San Luis Obispo City Council
June 17, 2025

City Council
AGENDA

Tuesday, June 17, 2025, 5:30 p.m.

Council Chambers, 990 Palm Street, San Luis Obispo
**The Agenda has been amended to add a Proclamation declaring the month of June as Pride Month.

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

2. PLEDGE OF ALLEGIANCE
Vice Mayor Michelle Shoresman will lead the Council in the Pledge of Allegiance.

3. PRESENTATIONS

3.a PRIDE MONTH PROCLAMATION
Mayor Stewart will present a proclamation declaring the month of June as "Pride Month".

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

4. 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.

5. 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 5l.

5.a WAIVE READING IN FULL OF ALL RESOLUTIONS AND

ORDINANCES
Recommendation:

Waive reading of all resolutions and ordinances as appropriate.

5.b MINUTES REVIEW - JUNE 03, 2025 COUNCIL MINUTES 13
Recommendation:

Approve the minutes of the City Council meeting held on June 3, 2025.

5.c AUTHORIZATION TO CONTINUE THE COLLECTION OF MULTIDWELLING PROPERTY FIRE AND LIFE SAFETY INSPECTION FEES
19 Recommendation:

Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, authorizing the San Luis Obispo County Auditor to collect fees for 2025-26 Fire and Life Safety Inspections of Multi-Dwelling Properties containing three or more dwelling units on the Secured Property Tax Roll pursuant to California Government Code Section 54988, et seq.”

5.d ADOPT A DRAFT RESOLUTION TRANSFERING UNCLAIMED

CHECK FUNDS FROM THEIR RESPECTIVE FUND(S) TO THE

GENERAL FUND PURSUANT TO CALIFORNIA GOVERNMENT
CODE SECTION 50050, et seq.
25 Recommendation:

Adopt a draft Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California, Transferring Unclaimed Check Funds from their Respective Fund(s) to the General Fund Pursuant to California Government Code Section 50050, et seq.”

5.e AUTHORIZATION TO ADVERTISE THE MONITORING WELL
DRILLING PROJECT, SPECIFICATION 2091506, AND

AUTHORIZATION FOR ADDITIONAL FUNDING FOR THE

GROUNDWATER CONTAMINATION CHARACTERIZATION

PROJECT
37 Recommendation:

Approve the project plans and special provisions for the Monitoring Well Drilling Project, Specification Number 2091506; and

1. 2. 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 responsive and responsible bid is within the available budget for the Monitoring Well Drilling Project; and

3. Authorize the City Engineer to approve Contract Change Orders up to the available project budget; and

4. Authorize the City Manager to approve contract amendments for the project, not to exceed a cumulative total of $8,925,379; and

5. Find the Monitoring Well Drilling Project consistent with the previously adopted Initial Study/Mitigated Negative Declaration and Mitigation, Monitoring, and Reporting Program.

6. 5.f SURPLUS DESIGNATION OF FIRE FLEET ASSET BY SALE,

AUCTION OR TRADE-IN
107
Recommendation:

Adopt a draft Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California, Authorizing the Surplus Designation of Fire Fleet Asset and its Sale, Auction or Trade-In” for the Fire Department’s Fleet Asset No.0607, a 2005 Ford Ranger pickup truck, in accordance with the City’s policies and procedures as prescribed in the Financial Management Manual Section 405-L and 480.

5.g SECOND READING AND ADOPTION OF ORDINANCE NO. 1747
(2025 SERIES) TO AMEND THE AIRPORT AREA SPECIFIC PLAN TO

ALLOW MIXED-USE RESIDENTIAL DEVELOPMENT WITHIN THE

SERVICE COMMERCIAL (C-S) AND MANUFACTURING (M) ZONES

SUBJECT TO A MINOR OR CONDITIONAL USE PERMIT
113
Recommendation:

Adopt 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 minor or 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.”

5.h APPROPRIATE GRANT FUNDS TO TRANSIT PROGRAM CAPITAL

PROJECTS
139
Recommendation:

Adopt a Draft Resolution entitled, “A Resolution by the City Council of the City of San Luis Obispo, California, approving the appropriation of federal and state grant funds to Transit program capital projects.”

5.i AUTHORIZATION TO APPLY FOR GRANT FUNDING THROUGH THE SAFE STREETS AND ROADS FOR ALL (SS4A) GRANT PROGRAM

TO SUPPORT THE FOOTHILL COMPLETE STREETS PROJECT
155
Recommendation:

Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving the application for grant funding from the Federal Safe Streets and Roads for All (SS4A) program for the Foothill Complete Street Project” authorizing:

Staff to prepare and submit an application for the SS4A grant program of up to $800,000 for the Foothill Complete Streets Project;

1. The use of up to $258,090 of funding previously approved and/or planned for the Foothill Complete Streets Project in the 2025-27 Financial Plan as matching funds for this grant;

2. The City Manager to appropriate grant funds and approve a budget amendment to reflect received grant funds, if awarded;

3. The appointment of the City Manager, or their designee, as agent to conduct all negotiations, execute and submit all grant documents including, but not limited to, applications,
agreements, and payment requests which may be necessary for the completion of the aforementioned project.

4. 5.j AMEND THE PARKING PENALTY SCHEDULE FOR VIOLATIONS OF CALIFORNIA VEHICLE CODE SECTIONS 22500(N)(1)(A) AND
22511.1(A) AND DESIGNATE ELECTRIC VEHICLE CHARGING

PARKING SPACES
163
Recommendation:

Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, amending the Parking Penalty Schedule”.

1. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, to Designate Electric Vehicle Parking Spaces for the Exclusive Purpose of Charging Electric Vehicles”.

2. 5.k SUCCESSOR RESOLUTIONS FOR THE SAN LUIS OBISPO CITY EMPLOYEES’ ASSOCIATION AND UNREPRESENTED

MANAGEMENT AND CONFIDENTIAL EMPLOYEE GROUPS
179
Recommendation:

Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, adopting and ratifying the Memorandum of Understanding between the City of San Luis Obispo and the San Luis Obispo City Employees’ Association for The Period of July 1, 2025, to June 30, 2028”; and

1. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Amending Management Compensation for Appointed Officials,
Department Heads, and Management Employees and
Superseding Previous Resolutions in Conflict”; and

2. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Regarding Compensation for the Unrepresented Confidential Employees and Superseding Previous Resolutions in Conflict”; and

3. Adopt Regular and Temporary Employee Salary Schedules effective July 3, 2025, as required by California Public Employees Retirement System.

4. 5.l SECOND READING AND ADOPTION OF ORDINANCE NO. 1748 (2025 SERIES) ADOPTING THE CALFIRE LOCAL RESPONSIBILITY

AREA FIRE HAZARD SEVERITY ZONE MAPS AS REQUIRED BY
GOVERNMENT CODE 51178
335
Recommendation:

Adopt Ordinance No. 1748 (2025 Series) entitled “An Ordinance of the City of San Luis Obispo, California, designating the Fire Hazard Severity Zones as identified by the State Fire Marshal,” as introduced on June 3, 2025.

6. PUBLIC HEARING AND BUSINESS ITEMS

6.a ADOPT A RESOLUTION UPDATING THE 2025-26 AND 2026-27 WATER RATES (20 MINUTES)
343
Recommendation:

Receive and file the City of San Luis Obispo Water and
Wastewater Rate Study Updated Report, March 2025; and

1. Adopt a Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California, Establishing the Water Service Rates for Financial Plan 2025-27”; and

2. Adopt a Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California, to Amend the City of San Luis Obispo Low Income Assistance Program for City
Residents”; and

3. Find the action statutorily exempt from the California Environmental Quality Act (CEQA) under Public Resources Code 21083 and 21080(b)(8) and State CEQA Guidelines
Section 15273 (Rates, Tolls, Fares, and Charges).

4. 6.b ADOPT A RESOLUTION UPDATING THE 2025-26 AND 2026-27 SEWER RATES (20 MINUTES)
437
Recommendation:

Receive and file the City of San Luis Obispo Water and
Wastewater Rate Study Update Report, March 2025; and

1. Adopt a Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California, Establishing the Sewer Service Rates for Financial Plan 2025-27”; and

2. Find the action statutorily exempt from the California Environmental Quality Act (CEQA) under Public Resources Code 21083 and 21080(b)(8) and State CEQA Guidelines
Section 15273 (Rates, Tolls, Fares, and Charges).

3. 6.c ADOPTION OF THE 2025-27 FINANCIAL PLAN (90 MINUTES) 531 Recommendation:

Adopt a Draft Resolution entitled, “A Resolution of the Council of the City of San Luis Obispo, California, approving the 2025-27 Financial Plan and Fiscal Year 2025-26 Budget.”

7. 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

8. ADJOURNMENT
The Regular Meeting of the City Council scheduled for July 1, 2025 has been cancelled. The next Regular Meeting of the City Council will be held on July 15, 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
June 3, 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
Council Members

Absent:

Mayor Erica A. Stewart
City Staff Present: City Manager Whitney McDonald, Deputy City Attorney Sadie Symens, Teresa Purrington, City Clerk
_____________________________________________________________________

1. CALL TO ORDER
A Regular Meeting of the San Luis Obispo City Council was called to order on June 3, 2025 at 5:30 p.m. in the Council Chambers, 990 Palm Street, San Luis Obispo, by Vice Mayor Shoresman with Mayor Stewart absent.

2. PLEDGE OF ALLEGIANCE
Council Member Marx led the Council in the Pledge of Allegiance.

3. PRESENTATIONS

3.a HUNGER AWARENESS DAY PROCLAMATION
Vice Mayor Shoresman presented a proclamation declaring June 6th as "Hunger Awareness Day" to Molly Kern on behalf of SLO Food Bank.

3.b INTRODUCTION - MATTHEW PENNON, DIVERSITY, EQUITY AND

INCLUSION MANAGER

3.c CITY MANAGER REPORT
City Manager Whitney McDonald provided a report on upcoming projects.

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

None
--End of Public Comment--

2 5. CONSENT AGENDA
Council Members Marx and Francis requested that Item 5d be pulled for discussion.

Public Comment:

None
--End of Public Comment--
Motion By Council Member Francis
Second By Council Member Boswell
To approve Consent Calendar Items 5a to 5l.

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

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

5.b MINUTES REVIEW - MAY 20, 2025 DRAFT COUNCIL MINUTES Approve the minutes of the City Council meeting held on May 20, 2025.

5.c ADOPTION OF ORDINANCE NO. 1746 (2025 SERIES) AMENDING SECTION 17.86.080 OF TITLE 17 OF THE MUNICIPAL CODE TO

CLARIFY SPECIFIC LAND USE AND OPERATIONAL REQUIREMENTS
FOR COMMERCIAL CANNABIS ACTIVITY [CITYWIDE]
Adopt Ordinance No. 1746 (2025 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, approving an amendment to Section 17.86.080 (“Cannabis”) of Title 17 (“Zoning”) of the Municipal Code to clarify specific land use and operational requirements for commercial cannabis activity.” The project is exempt from environmental review under CEQA Guidelines Section 15301.

5.e 2025-26 PROJECTS FUNDED BY SB1: THE ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017
Adopt Resolution No. 11567 (2025 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, adopting a list of

3 projects for Fiscal Year 2025-26 funded by SB 1: The Road Repair and Accountability Act of 2017.”

5.f APPROVE A MILLS ACT HISTORICAL PROPERTY PRESERVATION AGREEMENT FOR THE “VOLLMER HOUSE” AT 1116 PISMO STREET
(HIST-0151-2025)
As recommended by the Cultural Heritage Committee, adopt Resolution No. 11568 (2025 Series) entitled “A Resolution of the City Council of the City of San Luis Obispo, California, approving a Historic Property Preservation Agreement between the City and the owners of the Vollmer House at 1116 Pismo Street (Application No. HIST-0151-2025)”

5.g AUTHORIZE THE DISPOSAL OF WRECKED FLEET ASSET 1712
Authorize the Disposal of a Wrecked Fleet Asset No. 1712 in Accordance with Section 405-L of the City’s Financial Management Manual.

5.h FINAL ACCEPTANCE OF PUBLIC IMPROVEMENTS FOR TRACT 2428 PHASE 3 – A RESIDENTIAL SUBDIVISION AT 3000 CALLE MALVA Adopt Resolution No. 11569 (2025 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Accepting the Public Improvements, Certifying Completion of the Private Improvements, and Authorizing Release of the Securities for Tract 2428-Phase 3 (3000 Calle Malva)” accepting the public improvements, certifying the private improvements, and authorizing the release of securities for Tract 2428- Phase 3.

5.i AUTHORIZE COMMUNITY PARTNERSHIP AGREEMENT WITH SAN
LUIS OBISPO MUSEUM OF ART FOR 2025-2027
Authorize the Mayor to execute a two-year Community Partnership Agreement with the San Luis Obispo Museum of Art for installation of several public art projects each year and as approved by the City Attorney.

5.j AUTHORIZE SELF-INSURED RETENTION INCREASE WITHIN THE CALIFORNIA JOINT POWERS INSURANCE AUTHORITY’S GENERAL

LIABILITY EXCESS PROTECTION PROGRAM
Adopt Resolution No. 11570 (2025 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving an Increase to the Self-Insured Retention Limit within the California Joint Powers Insurance Authority's General Liability Excess Insurance Program.”

4 5.k APPROVE THE AFFORDABLE CARE ACT REPORTING AND

TEMPORARY EMPLOYEE ELIGIBILITY POLICY IN COMPLIANCE WITH

THE AFFORDABLE CARE ACT

1. Adopt a draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, adopting the Affordable Care Act Reporting and Temporary Employee Eligibility Policy.”

2. Authorize the City Manager to make future administrative changes to the policy as deemed necessary to remain compliant with Affordable Care Act.

5.l AUTHORIZATION TO TRANSFER FUNDS FROM SEWER FUND

COMPLETED PROJECTS AND AWARD THE FOOTHILL-SANTA ROSA
SEWER PIPELINE REPLACEMENT PROJECT, SPECIFICATION NO.
2000096

1. Authorize the transfer of $126,000 from Sewer Fund Completed Projects (602.9501.71501) to the Foothill-Santa Rosa Sewer Pipeline Replacement Project, Specification No. 2000096; and

2. Award a Construction Contract to Souza Engineering Contracting, Inc in the amount of $598,591.00 for the Foothill-Santa Rosa Sewer Pipeline Replacement Project, Specification No. 2000096; and

3. Authorize the Utilities Director to approve Contract Change Orders up to the available project budget and any amended budget subsequently approved by the City Manager up to $200,000.

5.d CONSIDERATION OF THE 2025-26 HUMAN SERVICES GRANT

FUNDING RECOMMENDATIONS
Public Comments:

Nathan Rubinoff
Marina Bernheiner
Dona Hare Price
Jason Main
---End of Public Comment---
Motion By Council Member Francis
Second By Council Member Marx

5  To approve the 2025-26 Human Services Grant funding allocations in the amount of $150,000; with the following change to the funding allocations presented in the staff report
o Decrease the amount provided to Casa by $5000 and reallocate it to Peoples Self Help Housing.
 Authorize the City Manager to execute agreements with each grant recipient.

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

6. PUBLIC HEARING AND BUSINESS ITEMS

6.a INTRODUCE A DRAFT ORDINANCE ADOPTING THE CALFIRE LOCAL

RESPONSIBILITY AREA FIRE HAZARD SEVERITY ZONE MAPS AS
REQUIRED BY GOVERNMENT CODE 51178
Fire Chief Todd Tuggle provided an in-depth staff report and responded to Council questions.

Public Comments:

None
---End of Public Comment---
Motion By Council Member Boswell
Second By Council Member Francis
To adopt Ordinance No. 1748 (2025 Series) entitled “An Ordinance of the City of San Luis Obispo, California, designating the Fire Hazard Severity Zone Maps as identified by the State Fire Marshal.”
Ayes (4): Council Member Boswell, Council Member Francis, Council Member Marx, and Vice Mayor Shoresman
Absent (1): Mayor Stewart
CARRIED (4 to 0)

6 7. LIAISON REPORTS AND COMMUNICATIONS
Vice Mayor Shoresman
 Provided an update on the May 21st Homeless Services Oversight Committee meeting.
 Attended the Kiwanis 100 year Anniversary Celebration  Attended the Laguna Lake Dog Park Ribbon Cutting
 Presented the SLO High School Community Service Awards on behalf of Mayor Stewart
Council Member Francis
 Provided an update on the May 28th Nacimiento Water Project meeting.  Attended the Laguna Lake Dog Park Ribbon Cutting
 Attended Trans Day in Meadow Park.
 Will be attending the SLOCOG/RTA meeting on June 4th.

Council Member Marx
 Provided an update on the May 21st meeting of the Air Pollution Control District (APCD)
 Provided an updated on the May 27th Executive Committee of the Integrated Waste Management Authority (IWMA)
 Will be attending the County Water Resources Advisory Committee (WRAC) meeting on June 4th.
 Attended a show of senior projects for Cal Poly Civil Engineering students.

8. ADJOURNMENT
The meeting was adjourned at 7:54 p.m. The next Regular City Council Meeting is scheduled for June 17, 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

Item 5c
Department: Fire
Cost Center: 8503
For Agenda of: 6/17/2025
Placement: Consent
Estimated Time: N/A
FROM: Todd Tuggle, Fire Chief
Prepared By: Nicole Vert, Business Analyst
SUBJECT: AUTHORIZATION TO CONTINUE THE COLLECTION OF MULTIDWELLING PROPERTY FIRE AND LIFE SAFETY INSPECTION FEES

RECOMMENDATION
Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, authorizing the San Luis Obispo County Auditor to collect fees for 2025-26 Fire and Life Safety Inspections of Multi-Dwelling Properties containing three or more dwelling units on the Secured Property Tax Roll pursuant to California Government Code Section 54988, et seq.”

POLICY CONTEXT
California Health & Safety Code Section 13146.2(b) authorizes cities to charge property owners to recover the reasonable costs of providing mandated Fire and Life Safety annual inspections for multi-dwelling properties with three or more units.

On June 7, 2005, the Council adopted Ordinance No. 1472 authorizing the collection of annual fees for these inspections through the secured County property tax roll as the most cost-efficient method for fee collection (City Municipal Code Section 3.50.01(c)). A listing of fees by Assessor’s Parcel Number will be submitted to the County AuditorController for collection on the 2025-26 secured property tax roll in accordance with the County’s schedule and data format requirements, pursuant to California Government Code 54988, et seq. The County requires an annual resolution adopted by the Council authorizing the continued collection of those fees on the property tax roll.

DISCUSSION
Background
In May 2005, the City Council approved a cost recovery program for State-mandated fire and life safety inspections for multi-dwelling properties with three or more units. In 2024 the City conducted a fee study and changed how fees for apartment buildings, hotels/motels, and sorority/fraternity inspections are calculated, removing the costs of suppression staff, resulting in a reduction in most fees. The reduction varies by fee with

Item 5c
the average change being -11%. Staff estimates the resulting revenue reduction to be $41,800. FY2023-24 revenue from these inspections was $380,309. FY2025-26 revenue is estimated to be $338,509 after the fee adjustments.

Staff is recommending that the fee collection continue to be done through the secured property tax roll in 2025-26 and is requesting that Council adopt the required resolution to authorize that collection.

Previous Council or Advisory Body Action
On June 4, 2024, the City Council authorized the continued collection of multi-dwelling property Fire and Life Safety Inspection Fees with the adoption of Resolution No. 11496 (2024 Series).

On July 2, 2024, the City Council adopted revised Citywide user and regulatory fees with the adoption of Resolution No. 11507 (2024 Series).

Public Engagement
This item is on the agenda for the June 17, 2025 City Council meeting and will follow all required postings and notifications. The public will have the opportunity to provide comment on this item at or before the meeting.

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

FISCAL IMPACT
Budgeted: Yes Budget Year: 2025-26
Funding Identified: N/A
Fiscal Analysis:

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

Total $ $ $ $N/A
As of May 21, 2025, the City had collected $275,123.62 of the expected $380,000 for fiscal year 2024-25, with the remaining amount expected to be posted in the near future as the deadline to pay property taxes was April 10, 2025, and the County remits payment to the City in June. Any unpaid taxes are now delinquent.

Item 5c

ALTERNATIVES
Do not adopt the Resolution and go to a less cost-effective billing system by the Finance Department. Finance would become responsible for billing, increasing both workload and processing costs with individual mailings. Potential for non-payments would increase and Finance would be tasked with following up with non-payments. This would be counter to fiscal sustainability.

ATTACHMENTS
A - Draft Resolution authorizing collection of Multi-Dwelling Property Fire and Life Safety Inspection Fees

R ______
RESOLUTION NO. _____ (2025 SERIES)

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

OBISPO, CALIFORNIA, AUTHORIZING THE SAN LUIS OBISPO
COUNTY AUDITOR TO COLLECT FEES FOR 2025-26 FIRE AND LIFE

SAFETY INSPECTIONS OF MULTI-DWELLING PROPERTIES

CONTAINING THREE OR MORE DWELLING UNITS ON THE SECURED

PROPERTY TAX ROLL PURSUANT TO CALIFORNIA GOVERNMENT
SECTION 54988, ET SEQ.

WHEREAS, the City of San Luis Obispo is required by California Health & Safety Code Section 17921 annually to inspect multi-dwelling properties containing three or more dwelling units, including apartments, certain residential condominiums, hotels, motels, lodging houses, and congregate residences; and
WHEREAS, California Health & Safety Code Section 13146.2(b) authorizes cities to charge property owners in recovering the reasonable costs of providing these annual inspections; and
WHEREAS, the City of San Luis Obispo first authorized fee placement on the secured property tax roll with adoption of Ordinance No. 1472 on June 7, 2005.

WHEREAS, Resolution No. 11496 (2024 Series) adopted on June 4, 2024 authorized the continued collection of multi-dwelling property Fire and Life Safety Inspection Fees.

WHEREAS, the Council desires to continue collection of these fees on the secured property tax roll for 2025-26.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows
SECTION 1. Pursuant to California Health & Safety Code Section 13146.2(b) and Municipal Code Section 3.50, the Council hereby authorizes and directs that Fire and Life Safety Inspection fees shall be collected on the secured property tax roll by the San Luis Obispo County Auditor-Controller for fiscal year 2025-26. A listing of fees by assessor’s parcel number shall be provided to the County Auditor-Controller for collection on the 2025-26 secured property tax roll in accordance with their schedule and data format requirements, pursuant to California Government Code 54988, et seq.

SECTION 2. Resolution Number 11496 (2024 Series) is hereby repealed and superseded to the extent inconsistent herewith.

Upon motion of Council Member ___________, seconded by Council Member ___________, and on the following roll call vote:

Resolution No. _____ (2025 Series) Page 2
R ______
AYES:

NOES:

ABSENT:

The foregoing resolution was adopted this _____ day of _______________ 2025. ___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________
Teresa Purrington
City Clerk

City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: June 17, 2025
TO: Mayor and Council
FROM: Emily Jackson, Director of Finance
Prepared By: Debbie Malicoat, Deputy Director of Finance VIA: Whitney McDonald, City Manager
SUBJECT: ITEM 5d. - ADOPT A DRAFT RESOLUTION TRANSFERING UNCLAIMED

CHECK FUNDS FROM THEIR RESPECTIVE FUND(S) TO THE

GENERAL FUND PURSUANT TO CALIFORNIA GOVERNMENT CODE
SECTION 50050, ET SEQ.

Staff included a list of all unclaimed checks that meet the legal criteria to become property of the City on June 17, 2025. After publication of the City Council Agenda, staff received a valid claim for one of the checks.

The following listing will be removed from the Resolution’s attachment:

This reduces the total amount of unclaimed checks to $20,636.73.

An updated Resolution and list of unclaimed checks has been provided to the City Clerk.

Item 5d
Department: Finance
Cost Center: 2005
For Agenda of: 6/17/2025
Placement: Consent
Estimated Time: N/A
FROM: Emily Jackson, Finance Director
Prepared By: Debbie Malicoat, Deputy Finance Director
Courtney Miles, Accountant
SUBJECT: ADOPT A DRAFT RESOLUTION TRANSFERING UNCLAIMED CHECK

FUNDS FROM THEIR RESPECTIVE FUND(S) TO THE GENERAL FUND PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 50050,
ET SEQ.

RECOMMENDATION
Adopt a draft Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California, Transferring Unclaimed Check Funds from their Respective Fund(s) to the General Fund Pursuant to California Government Code Section 50050, et seq.”

POLICY CONTEXT
The City has an adopted Stale Dated Check Policy (Resolution No. 10738 (2016 Series)) that provides guidance and procedures for escheating unclaimed monies held by the City, in compliance with the California Government Code.

DISCUSSION
Background
California Government Code Section 50050, et seq., provides for local governments to establish policies and procedures for the escheatment of unclaimed monies held in the City’s possession. Escheatment is the reversion of property to a governmental entity in the absence of legal claimants or heirs. Unclaimed monies are amounts that are not the property of the City but held in its custody.

The City of San Luis Obispo routinely pays vendors and employees via paper checks that are valid for a period of six (6) months. If a payables or payroll check does not get cashed by a date that is six (6) months past the issue date, that check becomes “stale dated” and is no longer valid.

Item 5d
Per the City of San Luis Obispo’s Stale Dated Check Policy, the City may attempt to send a letter and affidavit form for replacement check(s) to the address on record for any check(s). This is completed on a regular and routine basis for both payables and payroll checks.

California Government Code sections 50050 and 50051 allows the City to reclaim these funds after three (3) years, following publication of a notice once a week for two successive weeks in a newspaper of general circulation published in the City of San Luis Obispo. The funds shall become the property of the City of San Luis Obispo forty-five (45) days after the initial public notice is published.

Government Code section 50055 permits any individual item of less than fifteen (15) dollars, which remain unclaimed, to transfer from the funds which the money was originally drawn from to the General Fund without the necessity of publishing a notice in a newspaper.

Notices were mailed to 143 individual payees, identified in the draft Resolution (Attachment A), over the course of the three-year period. Public Notice was issued in the New Times on May 1, 2025, and May 8, 2025, for all unclaimed funds over the amount of fifteen (15) dollars. The funds can become property of the City of San Luis Obispo on June 17, 2025, a date no earlier than forty-five (45) days after the initial public notice is published. All checks recommended for voidance and transfer to the General Fund are older than three years.

Government Code section 50053 grants that the City Council can transfer, by resolution, any unclaimed funds held in a Special fund, from the respective fund(s) to the General Fund when the unclaimed funds become the property of the City of San Luis Obispo. Staff is recommending that any funds which become the property of the City on June 17, 2025, be transferred to the General Fund.

Public Engagement
Notices were mailed to individual payees over the course of the three-year period. Public Notice was issued in the New Times on May 1, 2025, and May 8, 2025, for all unclaimed funds over the amount of fifteen (15) dollars. Payees may file a claim for the unclaimed funds up until the date the unclaimed funds become the property of the City as stated above, pursuant to Government Code § 50052.

FISCAL IMPACT
Budgeted: Yes Budget Year: 2024-25
Funding Identified: N/A

Item 5d
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $1,000 $0 $50 $950
State
Federal
Fees
Other:

Total $1,000 $0 $50 $950
Transferring unclaimed, uncashed payables and payroll checks will increase the General Fund’s fund balance by $20,729.04. Costs associated with the noticing of transferring unclaimed, uncashed payables and payroll checks were approximately $950.

ALTERNATIVES

1. Council could choose to escheat unclaimed monies to the State Controller’s Office. The Government Code allows the City to escheat unclaimed monies back to the City, which can then be used by the City. This alternative is not in compliance with the City’s adopted Stale Dated Check Policy.

2. Council could choose not to escheat unclaimed monies. This alternative would jeopardize reconciliation efforts and accounting procedures necessary when outstanding checks remain on the City’s books. Timely escheatment of unclaimed, stale dated checks is a best practice for bank reconciliations. This alternative is not in compliance with the City’s adopted Stale Dated Check Policy.

ATTACHMENTS
A - Draft Resolution transferring unclaimed check funds from their respective funds to the General Fund.

R ______
RESOLUTION NO. _____ (2025 SERIES)

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

OBISPO, CALIFORNIA, TRANSFERING UNCLAIMED CHECK FUNDS

FROM THEIR RESPECTIVE FUND(S) TO THE GENERAL FUND
PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 50050 et seq.

WHEREAS, the attached list of checks has been outstanding and unclaimed in special funds for more than three years; and
WHEREAS, the City has provided public notice as required in California Government Code Sections 50050 and 50051 and the City’s Unclaimed Check Policy for checks greater than fifteen (15) dollars; and
WHEREAS, no public notice is required by California Government Code Section 50055 and the City’s Unclaimed Check Policy for checks less than fifteen (15) dollars; and
WHEREAS, no claims have been made to checks under Government Code Section 50052; and
WHEREAS, the funds can become property of the City of San Luis Obispo on June 17, 2025, a date no earlier than forty-five (45) days after the initial public notice is published.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo that in accordance with California Government Code Section 50053 and 50055, the unclaimed checks on the attached list in the total amount of $20,729.04 shall be transferred from the respective fund(s) to the General Fund’s non-departmental revenue account.

Resolution No. _____ (2025 Series) Page 2
R ______
Upon motion of Council Member ___________, seconded by Council Member ___________, and on the following roll call vote:

AYES:

NOES:

ABSENT:

The foregoing resolution was adopted this _____ day of _______________ 2025. ___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________
Teresa Purrington
City Clerk

Payee Name Check Number Amount Fund
Abbott Laboratories Inc` 361378 74.16 101
Advanced Alternative Medical Center 353598 248.41 101
Alex Wilkerson 351124 60.75 101
Allison Frisby 742098 104.34 803
Andrew Gust 347050 17.18 601
Angelica Hollstein 350907 63.00 101
Anushka Iyer 744286 293.54 803
Araceli Marquina 356944 20.00 101
Atlas Blue, Inc. 357477 1,215.65 602
Betty Bautista 353890 53.00 611
Brian Banks 351139 49.50 101
Brian Bates 351140 40.50 101
Brittany Escobar Solis 742958 265.11 803
Brittnie Bennet 358925 25.00 101
Burt Industrial Supply 347896 204.92 601
Camri Wilson 356959 20.00 101
Carmi Adams 350663 83.25 101
Cassidy J Pedraza 741554 81.94 803
Central Coast Fire Prevention Assoc 375606 120.00 101
Central Coast Parkinson's Support Group 354256 150.00 101 CFCIA 375609 50.00 101
Chad Wilkinson 350673 54.00 101
Cherisse Sweeney 370607 59.72 101
Christina Rice 351157 55.50 101
Christine Serano 351158 48.75 101
Cody Scheel 369025 45.45 601
Colby J Kraxberger 744045 141.24 803
Colby J Kraxberger 744134 85.66 803
Colby J Kraxberger 744159 35.69 803
David Atkins 356651 75.00 101
Diane Marie Orrell 364751 103.00 101
Dillon P Estrada 740180 66.52 803
Dominic Tartaglia 351364 42.50 611
Dr Sven & Mrs Jane Markoff 361380 59.92 101
Dustin Elias 359474 20.00 101
Dylan Deffenbaugh 348351 25.15 611
Emily L Stock 740821 200.31 803
Emily L Stock 740877 40.06 803
Emily L Stock 740920 19.12 803
Emily L Stock 740965 76.48 803
Emily L Stock 741006 76.48 803
Emily L Stock 742256 298.81 803
Emily L Stock 742309 301.73 803
Emily L Stock 742413 275.14 803
Eric Marmolejo 351186 63.00 101
Erik Mellor 347088 16.43 601
Erik Mork 367977 30.00 601
Evan J Katz 741373 99.94 803
Attachment A

Payee Name Check Number Amount Fund
Fastrack 347932 29.00 101
Glenn Scheitrum 348370 63.00 611
Grace Glaeser 742298 109.15 803
Grace Glaeser 743660 37.48 803
Hyojung Byun 351535 175.00 101
Ian Connolly 355439 39.23 611
Ian Courtney 347014 20.78 601
Integrated Tactical Concepts 374377 1,000.00 101
Irma Del Pilar 358781 80.00 101
Ivan Ortega 374765 30.00 601
Jade Buhman 356690 38.00 611
Jami S Carricaburu 741401 65.10 803
Jami S Carricaburu 741448 26.64 803
Jami S Carricaburu 742967 181.24 803
Jared M Friedman 741360 62.14 803
Jared Vleming 357835 25.00 611
Jennie Diaz 353992 136.81 601
Jersey Mike's Subs 352841 150.00 101
Joel Orth 350753 108.00 101
John Rouke 350833 681.27 101
Jonathan Abercrombie 351807 170.00 611
Jordan Pickens 350756 74.25 101
Jordan Reece 350076 40.00 101
Kaitlyn Waller 350759 150.00 101
Katherine Mei 350762 42.50 611
Katherine Murray 743939 42.82 803
Kaylene Wakeman 350885 24.75 101
Kelly Evans 370659 59.72 101
Ken Craig 360578 92.31 601
Kim Le 347956 21.52 601
Kira Abercromby 351015 33.75 101
Kirsten Smith 367155 17.05 601
Kyah L Yruegas 740607 25.58 803
Lamplighter Inn & Suites 350539 99.99 208
Lance Marks 348912 62.00 101
Laura Wilvert 358502 55.00 101
Laurel Cadena 358820 35.00 101
Lillian Frey 742193 163.89 803
Lilliana Ruiz 350542 100.00 101
LR Development Group 363016 99.76 601
Maria Ramirez 350779 36.00 101
Marine Layer 371282 1,735.72 601
Mason Heller 353655 75.00 101
Massage by Casey Gaspar 352681 83.41 101
Megan Henney 347058 39.21 601
Melissa V Orloff 739944 40.06 803
Melissa V Orloff 739988 40.06 803
Michael Hopkins 743411 204.86 803

Payee Name Check Number Amount Fund
Michael Smith 372192 25.00 611
Mike McNamara 355219 68.48 611
Natalie Franzone-Cohen 347543 20.40 611
Nathan W Hamilton 739940 75.11 803
Nicole A Segovia 740125 135.21 803
Nicole A Segovia 740173 90.13 803
Office Depot 350800 1,312.79 101
Orchid Monroy-Ochoa 351055 25.75 101
Patrick Larsen 347810 50.00 101
Perfect Air 367200 57.77 101
Perfect Air 367201 25.00 101
Peter Slason 355234 25.00 621
Ponton Industries 351063 751.67 602
Pradeep Patel 351270 76.50 101
R & M Rentals 355240 40.70 101
Ray McGee 352467 25.00 611
Redwood Toxicology Laboratory 365817 39.68 101
Reva Chadha 739692 131.62 803
Richard Vasquez 375547 24.90 601
Rick Jelmini 363041 40.33 601
Rosa Lopez Ramirez 347257 75.00 101
Rosemary Weddle 350233 40.00 611
Sabrina J Marks 740778 80.12 803
San Luis Interiors 352891 483.87 101
Savannah Salgado 374286 70.00 611
Shawn Murphy - Right Brain 375948 1,137.50 101
SLO City Employees Assn 352114 68.35 803
Spring Angelotti 357064 20.00 101
Stanley Converent Security 351436 257.07 101
Stephen Bravante 362678 67.50 101
Steve Gonzalez 352065 56.02 101
Steve Guerrero 351299 47.25 101
Steven Enciso 369278 48.01 601
Steven Johnson 364864 56.21 601
Sylvia Torres 350862 225.00 101
T.J.N. Dozer & Backhoe SE 352329 25.00 101
Teresa Navarro 351098 33.75 101
Todd Buranen 357458 17.00 611
Toyota of San Luis Obispo 351711 84.43 601
Tyler J Glassman 741562 263.65 803
Tyler J Glassman 741619 65.56 803
U V S Thrift Shop 359074 25.00 101
Vance Trimble 354181 20.46 602
Vanessa Ramirez 351313 70.00 101
Vincent Troncoso - BMW of SLO 365260 836.29 101
Wells Fargo Vendor Finance 347167 42.06 101
WIN−911 Software 347733 1,095.00 602

Payment Date Payee Check Number Payment
Amount
1/12/2018 Kaelyn Hawkins 347056 $ 10.68
1/12/2018 Mitch Joiner 347068 $ 12.56
1/12/2018 Christine Truong 347155 $ 14.99
1/12/2018 Patrick Wilson 347169 $ 10.40
2/23/2018 Ray Garcia 347996 $ 12.50
5/18/2018 Daniel Desvoigne 349724 $ 12.50
12/20/2018 Kiana Vanderham 354671 $ 10.00
1/23/2019 DYLAN MARTIN 355183 $ 14.94
4/24/2019 Avery Ferguson 356947 $ 14.27
4/24/2019 SLOCEA 357061 $ 7.84
1/2/2020 Michael Specchierla 362230 $ 6.25
9/9/2020 Advanced Heating & Air Conditioning Enterprise Inc 367055 $ 15.00 9/9/2020 Clover And Branch 367092 $ 15.00
9/9/2020 Corie Varin 367097 $ 14.23
9/9/2020 Morgan Stanley Smith Barney Financing L L C 367181 $ 15.00 9/9/2020 Perfect Air 367199 $ 4.00
9/9/2020 Terry Comer 367266 $ 15.00
10/21/2020 Barbara Park 367938 $ 15.00
10/21/2020 Periscope Intermediate Corp 368028 $ 15.00
10/21/2020 S T Electric 368040 $ 15.00
11/17/2021 Marissa W Womack 375515 $ 15.00
3/14/2019 Ronald P Faria Jr 741142 $ 1.12
3/14/2019 Ryan O Dale 741146 $ 1.97
3/14/2019 Christopher Olcott 741147 $ 2.12
3/14/2019 James R Austin 741148 $ 2.72
3/14/2019 Nicola C Morais 741152 $ 3.24
3/14/2019 Michelle R Bulow 741154 $ 3.67
3/14/2019 Christina N Claxton 741160 $ 5.05
3/14/2019 Joseph J O'Donnell 741164 $ 5.57
3/14/2019 Gustavo Ahumada 741166 $ 6.89
3/14/2019 Edward C Humphrey 741169 $ 7.23
1/2/2020 Kylee K Bailey 742640 $ 0.94
1/3/2020 Luca P Benedetti 742643 $ 6.13
1/4/2020 George A Berrios 742645 $ 6.13
1/5/2020 Joshua M Bywater 742649 $ 0.94
1/6/2020 Lauren C Henry 742656 $ 0.94
1/7/2020 Brent F Inglehart 742658 $ 6.13
1/8/2020 Elizabeth A Jacobs 742659 $ 0.94
1/9/2020 Rudy M Orozco 742677 $ 3.16
1/10/2020 Jessica L Owens 742678 $ 3.16
1/11/2020 Nolan I Parsons 742679 $ 0.94
1/12/2020 Donald J Peck 742680 $ 0.94
1/13/2020 Jacob P Pelletier 742681 $ 0.94
1/14/2020 Matthew J.E. Perlette 742682 $ 0.94
1/15/2020 Patricia A Karp 742683 $ 3.35
1/16/2020 Nicole Sanchez 742687 $ 0.94
1/17/2020 Hayden P Warner 742695 $ 0.94
1/18/2020 Mathew I Sanchez 742699 $ 0.94
1/19/2020 Brandon J Tyler 742700 $ 0.94
1/20/2020 Angela G Polido Sandoval 742702 $ 0.94
1/21/2020 Marisela Herrera 742703 $ 0.94
3/12/2020 Jami S Carricaburu 742882 $ 10.71

Item 5e
Department: Utilities
Cost Center: 6003
For Agenda of: 5/6/2025
Placement: Consent
Estimated Time: N/A
FROM: Aaron Floyd, Utilities Director
Prepared By: Nick Teague, Water Resources Program Manager SUBJECT: AUTHORIZATION TO ADVERTISE THE MONITORING WELL DRILLING PROJECT, SPECIFICATION 2091506, AND AUTHORIZATION FOR

ADDITIONAL FUNDING FOR THE GROUNDWATER CONTAMINATION

CHARACTERIZATION PROJECT

RECOMMENDATION

1. Approve the project plans and special provisions for the Monitoring Well Drilling Project, Specification Number 2091506; and

2. Authorize staff to advertise for bids; and

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

3.24.190 of the Municipal Code if the lowest responsive and responsible bid is within the available budget for the Monitoring Well Drilling Project; and

4. Authorize the City Engineer to approve Contract Change Orders up to the available project budget; and

5. Authorize the City Manager to approve contract amendments for the project, not to exceed a cumulative total of $8,925,379; and

6. Find the Monitoring Well Drilling Project consistent with the previously adopted Initial Study/Mitigated Negative Declaration and Mitigation, Monitoring, and Reporting Program.

REPORT-IN-BRIEF
The Monitoring Well Drilling Project is part of 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 while removing PCE contamination from local groundwater supplies. Monitoring wells are used to monitor groundwater depth and groundwater quality to demonstrate the effectiveness of the larger project’s goal to remove PCE from the groundwater basin and to ensure that groundwater pumping does not negatively impact stream flows or result in land subsidence. Monitoring well drilling is the second of three phases of the implementation stage of this project and is critical to demonstrating the effectiveness of the entire project. In addition to the request

Item 5e
for actions related to monitoring well drilling, staff is requesting Council’s authorization for contract amendments for the project, as described in the fiscal analysis.

POLICY CONTEXT
The Monitoring Well Drilling Project is consistent with the City’s adopted General Plan Water and Wastewater Element (WWE) Goals A 2.1 and A 3.1 as providing an additional reliable water supply source that helps to ensure a long-term, reliable water supply and expands the City’s water resources to meet both current resiliency strategies and future water demand associated with development envisioned by the General Plan. Specifically, Policy A 3.2.3 states that “the City will continue to use groundwater to enhance the resiliency of the City’s water supply portfolio”.

DISCUSSION
Background
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 Groundwater Sustainability Plan, 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. Local groundwater quality sampling has documented areas of the San Luis Obispo Valley Groundwater Basin underlying the City that have localized groundwater contamination from PCE. PCE contamination restricts the City’s use of groundwater as a source of drinking water and must be treated before the City can utilize this resource. PCE is a chemical that is typically associated with dry cleaners, textile operations, and metal degreasing activities. The origin of the contamination remains unknown; however, it is not believed to be from a facility owned by the City of San Luis Obispo.

In July 2020, the City received a $1,996,575 grant through Round 1 (Planning Phase) of the State of California Proposition 1 Groundwater Grant Program to study PCE contamination of the groundwater basin. The State’s program provides funding for grants and loans for projects that prevent and clean up contamination of groundwater that serves, or will serve, as a source of drinking water. A detailed understanding of the extent of PCE contamination and remediation options were necessary steps in fully utilizing the City’s ground water supplies. The total Planning Phase cost including the City’s local match was over $2 million. The Planning Phase of the Groundwater Contamination Characterization Project, including completion of a Remedial Investigation Report (PCE Plume Characterization Project Summary), Feasibility Study Report for the PCE Plume Characterization Project, and submittal of all documentation required by the State Water Resources Control Board (SWRCB) for reimbursement, was completed April 12, 2023.

Item 5e
In September 2021, staff submitted a conceptual proposal through the Proposition 1 Groundwater Grant Program indicating the City’s interest in additional grant funding for the Project’s Implementation Phase (Round 3 of the Proposition 1 Groundwater Grant Program). In April 2022, the SWRCB invited the City to submit a full grant application for the Implementation Phase of the Groundwater Contamination Characterization Project.

The grant application for the Implementation Phase was submitted July 2022, and the refined estimated budget was $6,607,850 (Attachment A). On March 13, 2023, staff received a preliminary grant award letter from the SWRCB in the amount of $5,877,765, the full amount requested in the grant application (Attachment B). The award of the grant from the SWRCB required a local match of $730,085.

On August 30, 2023, the City received a memo from the SWRCB that informed the City that SWRCB waived the match requirement for the City’s Implementation Phase ($730,085; Attachment C). The grant agreement was signed and executed on February 14, 2024, funding the full project budget amount of $6,607,850 with grant funding.

On December 18, 2024, the City requested additional grant funding through the Proposition 1 Groundwater Grant Program to cover increased costs for tasks primarily related to design, engineering, and construction of the new extraction wells and groundwater treatment facility. In February 2025, the SWRCB notified the City that they were awarding an additional $1,174,950 in grant funding to the Implementation Phase of the Groundwater Contamination Characterization Project. The grant agreement (Attachment D) was signed and executed on February 14, 2025, providing a total of $7,782,800 in grant funding.

Recommended Action
Staff are currently requesting approval of the project plans and special provisions (Attachment E), and the authorizations and approvals needed, to commence the Monitoring Well Drilling Project. The Monitoring Well Drilling Project includes the drilling and construction of between 8 and 9 new monitoring wells within the identified PCE plume (Figure 1). These wells will be used to monitor groundwater quality to determine the effectiveness of groundwater pumping on the removal of PCE from the groundwater basin. They will also be used to monitor groundwater levels so that groundwater production can be optimized while remaining compliant with the San Luis Obispo Valley Groundwater Sustainability Plan (GSP). As previously mentioned, the Monitoring Well Drilling Project is part of the Implementation Phase of the Groundwater Contamination Characterization Project, which also includes two additional Project components: a Groundwater Well Drilling Project, and a Well Equipping Project. Completion of the projects comprising the Implementation Phase is expected in Spring 2026, at which time the City will begin using groundwater as an additional source of supply.

Staff are requesting City Council authorization for the City Manager to approve contract amendments for the project, not to exceed a cumulative total of $8,925,379. Previous Council authorization on March 6, 2025, capped contract amendments for the project at

Item 5e
$7,750,429 ($6,607,850 of grant funding, $1,142,579 City funding). The increase in grant funding approved in February 2025, increased the total available funding for the project to $8,925,379 ($7,782,800 grant funding, $1,142,579 City funding). This authorization will allow staff to utilize the entire available funding amount.

Figure 1. Map of proposed monitoring well locations for the Monitoring Well Drilling Project, Groundwater Contamination Characterization Project Implementation Phase

Item 5e
Previous Council or Advisory Body Action
The City Council authorized staff to prepare and submit a grant application for the Groundwater Contamination Characterization Project (Round 1 – Planning Phase) on February 5, 2019.

On December 7, 2021, the City Council approved and authorized specifications for the Planning Phase of the Groundwater Contamination Characterization Project and award of the construction contract; staff preparation and submittal of the grant application for the Implementation Phase (Round 3) of the Project; funding for application preparation and a local match of a maximum of 10 percent of the total project cost; execution of grant application documents; and a Resolution entitled “A Resolution authorizing entering into a Funding Agreement with the State Water Resources Control Board and authorizing and designating a representative for Phase 3 of the Groundwater Contamination Characterization Project.”
On May 16, 2023, the City Council approved and authorized the use of up to $1,142,579 of City funding for the local match requirement (that was required at that time, but later waived), and any potential increases in costs related to CEQA compliance, construction, and materials costs and associated inflation; execution of required grant, consultant, and construction-related agreements; and change orders and contract agreements for the project, not to exceed a cumulative total of $7,020,344 (including $5,877,765 of grant funding).

On March 4, 2025, the City Council approved the project plans and special provisions for the Groundwater Well Drilling Project; adopted a resolution recommending adoption of the Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program for the Groundwater Contamination Characterization Project; and authorized the City Manager to approve contract amendments for the project, not to exceed a cumulative total of $7,750,429.

Public Engagement
A public forum was held on December 10, 2024, at the Public Library meeting room. At the public forum, staff from the City, and its consultant, presented on this project, and additional forthcoming projects that will collectively result in new infrastructure, which will provide clean groundwater for use as a new water source for the City. As a result of the public forum, the Groundwater Contamination Characterization Project was highlighted in an article by the San Luis Obispo Tribune.

CONCURRENCE
The Utilities Department Deputy Director of Engineering concurs with the proposed scope and approach of the project.

Item 5e

ENVIRONMENTAL REVIEW
On March 4, 2025, City Council adopted a Resolution to adopt the Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program (MMRP) for the Groundwater Contamination Characterization Project. This Initial Study/Mitigated Negative Declaration (IS/MND) was prepared for the “whole of the action” of the Groundwater Contamination Characterization Project, which includes the Monitoring Well Drilling Project described in this agenda report and attached proposed bid package in addition to all other project implementation actions, including but not limited to construction and operation of groundwater wells, well treatment systems, and associated utility infrastructure. The environmental review process complied with all requirements of the California Environmental Quality Act statute and guidelines, including but not limited to Native American tribal consultation, noticing requirements, public circulation of the document, availability of the environmental document at the City Utilities Department office and the City website, and filing of the Notice of Determination.

The IS/MND identifies potentially significant impacts to the following environmental resources: aesthetics, biological resources, cultural resources, geology and soils, noise, and tribal cultural resources. Mitigation measures were adopted that would reduce all identified impacts to less-than-significant. The Monitoring Well Drilling Project was evaluated in the adopted IS/MND and is subject to the mitigation measures included in the adopted MMRP. Therefore, staff recommends that the City Council find the Project consistent with the adopted IS/MND and MMRP, and no further environmental analysis of project impacts is required.

FISCAL IMPACT
Budgeted: Yes Budget Year: 2024-25
Funding Identified: Yes
Fiscal Analysis:

Funding previously approved by Council for this project includes $6,607,850 that has been provided through the State Water Resources Control Board (SWRCB) Proposition 1 Round 3 funds; and $1,142,579 from the City’s Water Fund. The recent $1,174,950 increase in grant funding will increase the available funding to $8,925,379 ($7,782,800 grant funding, $1,142,579 City funding).

Item 5e
Table 1. Previously allocated funds and current funding request by funding source.

SWRCB Prop 1
Round 3 Grant
Funding
Water Fund (601)
Unreserved Working Capital
Previously Authorized
Funds
$6,607,850 $1,142,579*
Additional Grant Funding $1,174,950
Total Funding By Source $7,782,800 $1,142,579
New Total Project Cost $8,925,379
*Amount equal to the initial local match requirement. This funding was added to the total grant funds following the waiver of the local match.

Table 2. Engineer’s Estimate for Monitoring Well Drill Project.

Monitoring Well Drilling Project, Specification (2091506) Construction Base Bid Estimate $480,000
Additive Alternate Estimate $35,000
Contingencies $129,000
Material Testing $67,000
Permitting and Monitoring $26,000
Printing and Advertisement $1,000
Total Cost of Project $738,000
Total Available Funding $7,782,800
Expenditures to date $2,012,897
Additional Funding $1,142,579
Remaining Balance $6,912,482

ALTERNATIVES

1. Defer the approval to advertise the project. City Council could choose to defer the authorization to advertise this project to a later date. The project is necessary to satisfy the requirements of the Prop. 1 Groundwater Cleanup grant. Deferring this project to a later date my impact the City’s ability to meet project deadlines, which would result in non-compliance and potential recoupment of grant funding.

2. Deny the approval to advertise the project. City Council could choose to deny the authorization to advertise this project. The project is necessary to satisfy the requirements of the Prop. 1 Groundwater Cleanup grant and failure to advertise this project would result in non-compliance and potential recoupment of grant funding.

Item 5e

ATTACHMENTS
A - Estimated Budget Submitted with Round 3 Groundwater Contamination Characterization Project Grant Application
B - Proposition 1 Round 3 Preliminary Award Letter
C - Revised Memo for Match Waiver and Funding
D - Proposition 1 Groundwater Grant Program grant agreement signed and executed on February 14, 2025
E - Project plans and special provisions for the Monitoring Well Drilling Project, Specification Number 2091506

Attachment 7 - Budget Tables Proposition 1 GWGP Implementation Full Proposal Applicant: City of San Luis Obispo FAAST PIN: 48368
Project: City of San Luis Obispo PCE Plume Characterization Requested Grant Local Match Other Funding Total % Local Match

1. Direct Project Administration Costs $114,480 $12,720 $0 $127,200 10%

1.1 Program Management Administration $87,480 $9,720 $97,200 10%

1.2 City Staff Administration $27,000 $3,000 $30,000 10%

2. Planning/Design/Engineering/Environmental $588,690 $142,410 $0 $731,100 17%

2.1 Groundwater Model $117,000 $13,000 $130,000 10%

2.2 Develop Extraction and Monitoring Plan $28,800 $3,200 $32,000 10%

2.3 Design Monitoring Wells $66,420 $7,380 $73,800 10%

2.4 Design Extraction and Treatment Wells (two
locations) $376,470 $41,830 $418,300 10%

2.5 Permitting $0 $77,000 $77,000 100%

3. Construction/Implementation $5,108,670 $567,630 $0 $5,676,300 10%

3.1 Construction - Monitoring Well(s) $830,250 $92,250 $922,500 10%

3.2 Construction Administration - Monitoring Well(s) $99,630 $11,070 $110,700 10%

3.3 Construction - Extraction and Treatment Wells
(two locations) $3,764,700 $418,300 $4,183,000 10%

3.4 Construction Administration Extraction and
Treatment Well $414,090 $46,010 $460,100 10%

4. Monitoring/Performance $36,000 $4,000 $0 $40,000 10%

4.1 Continued Sampling and Monitoring $36,000 $4,000 $40,000 10%

5. Outreach $29,925 $3,325 $0 $33,250 10%

5.1 Outreach $19,800 $2,200 $22,000 10%

5.2 Technical Advisory Meetings $10,125 $1,125 $11,250 10% Grand Total: $5,877,765 $730,085 $0 $6,607,850 11%
Other Funding Sources:

Note: CHECK YOUR NUMBERS! Do NOT assume this Excel spreadsheet is correct. Please refer to the READ ME tab.

Does the Budget Summary Total match the Budget Details Total? YES Prop 1 GROUNDWATER GRANT PROGRAM - BUDGET SUMMARY

Attachment 10 - Budget Tables Proposition 1 GWGP Implementation Full Proposal Project: City of San Luis Obispo PCE Plume Characterization

1. Direct Project Administration Costs 1.9% $127,200

1.1 Program Management Administration Refer to Budget Narrative $0 $97,200.00 LS 1 $97,200 $97,200

1.2 City Staff Administration City Staff $100.00 300 $30,000 $0 $30,000

2. Planning/Design/Engineering/Environmental 10.7% $731,100

2.1 Groundwater Model Refer to Budget Narrative $0 $130,000.00 LS 1 $130,000 $130,000

2.2 Develop Extraction and Monitoring Plan Refer to Budget Narrative $0 $32,000.00 LS 1 $32,000 $32,000

2.3 Design Monitoring Wells Refer to Budget Narrative $0 $6,150.00 EA 12 $73,800 $73,800

2.4 Design Extraction and Treatment Wells (two
locations) Refer to Budget Narrative $0 $209,150.00 EA 2 $418,300 $418,300

2.5 Permitting Refer to Budget Narrative $0 $77,000.00 LS 1 $77,000 $77,000

3. Construction/Implementation 85.8% $5,676,300

3.1 Construction - Monitoring Well(s) Refer to Budget Narrative $0 $76,875 EA 12 $922,500 $922,500

3.2 Construction Administration - Monitoring
Well(s) Refer to Budget Narrative $0 $110,700 LS 1 $110,700 $110,700

3.3 Construction - Extraction and Treatment Wells
(two locations) Refer to Budget Narrative $0 $2,091,500 EA 2 $4,183,000 $4,183,000

3.4 Construction Administration Extraction and
Treatment Well Refer to Budget Narrative $0 $460,100 LS 1 $460,100 $460,100

4. Monitoring/Performance 1.2% $40,000

4.1 Continued Sampling and Monitoring Refer to Budget Narrative $0 $40,000 LS 1 $40,000 $40,000

5. Outreach 0.4% $33,250

5.1 Outreach Refer to Budget Narrative $0 $22,000 LS 1 $22,000 $22,000

5.2 Technical Advisory Meetings Refer to Budget Narrative $0 $11,250 LS 1 $11,250 $11,250 Grand Total: 100% $6,607,850
Note: CHECK YOUR NUMBERS! Do NOT assume this Excel spreadsheet is correct. Please refer to the READ ME tab.

Does the Budget Summary Total match the Budget Details Total? YES Discipline/Consultant/
Description
Prop 1 GROUNDWATER GRANT PROGRAM - BUDGET DETAIL
Applicant: City of San Luis Obispo FAAST PIN: 48368
# of
Units Rate Total Cost # of Hours
Total
Labor
Percent of
Cost Budget Category TOTALS
Consulting/Materials/Equipment
Unit Cost Units
Labor Costs

Attachment 10 - Budget Tables Proposition 1 GWGP Implementation Full Proposal Project: City of San Luis Obispo PCE Plume Characterization Prop 1 GROUNDWATER GRANT PROGRAM - BUDGET NARRATIVE
Applicant: City of San Luis Obispo FAAST PIN: 48368
Costs associated with work with contracts to be awarded are based on professional experience and the latest program cost estimates. Note that consultant costs will be completed on a time and materials basis and construction contractor costs will be paid based on bid documents and percent progress. The basis for each line item estimate in the budget is described below.

1. Direct Project Administration Costs

1.1 Program Management Administration - Estimated at 1.5% of the overall program value.

1.2 City Staff Administration - Based on City staff availability and expected level of effort/involvement to provide general oversight on behalf of the City, manage consultants, execute and manage City contracts. Budget assumes 300 hours of staff time at an hourly rate of $100/hr.

2. Planning/Design/Engineering/Environmental

2.1 Groundwater Model - Estimated based on experience and engineering judgement. Work anticipated to be performed by Water Systems Consulting Team.

2.2 Extraction and Monitoring Plan - Estimated based on experience and engineering judgement. Work anticipated to be performed by Water Systems Consulting Team.

2.3 Design Monitoring Wells - Estimated at 8% of the total construction cost of Task 3.1. Work anticipated to be performed by Water Systems Consulting Team.

2.4 Design Extraction and Treatment Wells (two locations) - Estimated at 10% of the total construction cost of Task 3.3. Work anticipated to be performed by Water Systems Consulting Team.

2.5 Permitting - Estimated at 1.5% of the total construction cost of Task 3.1 and 3.3. Work anticipated to be performed by Water Systems Consulting Team and a City selected environmental consultant. Assumes an IS/MND will be required prior to construction of the extraction wells.

3. Construction and Implementation

3.1 Monitoring Well Construction - Estimated construction cost is based on applying recent bidding information and applying engineering judgment for the construction of up to 12 monitoring wells (8 minimum). Costs based on sonic drilling method, and include permitting, traffic control, sound walls, waste disposal, drilling, construction, and well development.

3.2 Monitoring Well Administration - Estimated at 12% of the total construction cost of Task 3.1, which includes monitoring well inspection, final design of well screening, and general construction administration. Work anticipated to be performed by Water Systems Consulting Team.

3.3 Extraction and Treatment Well Construction - Estimated construction cost is based on amalgamating different cost estimating methods, including reviewing recent bidding information, coordinating with suppliers and applying engineering judgement. Construction cost also escalated based on inflation rate of 3% average year over year to mid-2025, which is the anticipated construction period. Construction anticipated to be awarded to two (2) independent construction contractors. One contractor will drill the well(s) and another contractor will equip and install the treatment systems. Assumes the wells can be located on City owned property.

3.4 Extraction and Treatment Well Construction Administration - Estimated at 11% of the total construction costs of Task 3.3. Work anticipated to be performed by Water Systems Consulting Team.

4. Monitoring and Performance

4.1 Monitoring and Performance - Includes field sampling and laboratory testing for the 12 monitoring wells (8 minimum) twice per year and includes preparation of summary report. Budget estimate includes sampling for one year following construction.

5. Outreach

5.1 Outreach - Costs associated with this task were estimated using another project's estimated costs for similar work.

5.2 Technical Advisory Meetings - Budget based on attendance of six (6) 2-hour meetings and preparing materials for meeting

State Water Resources Control Board
March 6, 2023
Mr. Aaron Floyd
City of San Luis Obispo
Utilities Department
879 Morro Street
San Luis Obispo, CA 93401
[email protected]
PROPOSITION 1 GROUNDWATER GRANT PROGRAM (GWGP) ROUND 3

IMPLEMENTATION GRANT SOLICITATION, NOTIFICATION OF AWARD Dear Mr. Floyd:

Congratulations! The Tetrachloroethylene (PCE) Plume Characterization Implementation Project (Project) has been approved for funding with a grant award of $5,877,765.

The Project consists of preparing a fate and transport groundwater model of the PCE plume, siting and construction of 2 extraction and treatment wells, and installation of a minimum of 8 monitoring wells to monitor the long-term progress of treatment within the City of San Luis Obispo (City).

The Project has been reviewed by technical experts from the State Water Resources Control Board’s (State Water Board) Division of Financial Assistance (Division), the Central Coast Regional Water Quality Control Board, and the State Water Board’s Division of Drinking Water. The technical experts concur that the Project, as proposed, should achieve the stated objectives and is eligible for funding per the GWGP Guidelines, as amended on February 2, 2021.

Based on staff’s review of the City’s request for a reduced match, supporting information provided in the Full Proposal, and the GWGP Guidelines, Table 2, the City qualifies for a reduced match of eleven percent (11%) because one hundred percent (100%) of the Project benefits a Disadvantaged Community or Economically Distressed Area.

Robin Guillot has been assigned as the Project Manager for this Project. You will receive an introductory email from an assigned Program Analyst with further information about roles and responsibilities, grant agreement development, invoicing, deliverables, performance measures, and reporting requirements. You will also be contacted by your assigned Project Manager to ensure that all conditions and comments are addressed

Mr. Floyd - 2 -
prior to execution of the final grant agreement. We encourage your prompt response to any requests from our staff because unreasonable delays or failure to respond could result in withdrawal of this grant award.

Your grant award is conditioned on the successful negotiation of a grant agreement.

The agreement process will begin with the finalization of a scope of work and budget that is acceptable to the Division. The scope of work will be based on the Full Proposal; however, the Division may require changes to the scope of work and budget as part of the grant agreement negotiation process. Based on the technical review of the Full Proposal, staff have initially identified the following item(s) that will need to be addressed.

Key information to be provided prior to execution of the grant agreement:

1. Additional documentation regarding monitoring requirements and a detailed description of the remediation technology intended to be used for the Project.

2. Documents omitted from the Full Proposal including an up-to-date Project Director Certification form signed by the City’s Authorized Representative.

Thank you for your consideration in addressing these items with Division staff. We look forward to working with you on this Project. Please contact the assigned Project Manager, Robin Guillot, with any questions at (916) 319-8259, or [email protected].

Sincerely,
Joe Karkoski, Deputy Director
Division of Financial Assistance
cc: see next page
Joe Karkoski Digitally signed by Joe Karkoski
Date: 2023.03.06 10:48:31
-08'00'

Mr. Floyd - 3 -
cc: Christopher Stevens
Division of Financial Assistance
Kim Dinh
Division of Financial Assistance
Alex Huang
Division of Financial Assistance
Robin Guillot
Division of Financial Assistance
Debbie Cheung
Division of Financial Assistance
Andrew Nevis
Office of Legislative Affairs
Jeff Densmore
Division of Drinking Water
Katie McNeill
Regional Water Quality Control Board
Dean Thomas
Regional Water Quality Control Board
Daniel Ellis
Regional Water Quality Control Board
Miguel Barcenas
City of San Luis Obispo
[email protected]

State Water Resources Control Board
TO:

FROM:

DATE:

Joe Karkoski
Deputy Director

DIVISION OF FINANCIAL ASSISTANCE
Alex Huang
Senior Engineering Geologist

DIVISION OF FINANCIAL ASSISTANCE
August 29, 2023
SUBJECT: REVISED - PROPOSITION 1 GROUNDWATER GRANT PROGRAM (GWGP) ROUND 3 FUNDING RECOMMENDATIONS

BACKGROUND
The GWGP Round 3 full proposal solicitation window opened on April 14, 2022, and closed on July 15, 2022. Technical reviewers from several state agencies scored each proposal according to the rubric in Appendix F of the GWGP guidelines. On February 9, 2023, the Deputy Director of the Division of Financial Assistance (DFA) approved staff’s recommendation to award funding for eight projects and to not award funding for the Central Coast Blue project (Attachment A). DFA issued funding award letters for the eight Round 3 projects approved for funding. On March 17, 2023, DFA issued a funding denial letter for the Central Coast Blue project (Attachment B).

The following new developments occurred after the Deputy Director of DFA approved staff’s recommendation:

1. DFA received an urgent appeal letter from the City of Pismo Beach (City) regarding the funding determination for the Central Coast Blue project on March 23, 2023 (Attachment C). Staff met with the City in person on April 5, 2023, and again via Teams on April 25, 2023, to discuss the project and its nexus to the cleanup or prevention of groundwater contamination. The City initially asked for $35.7 million in its proposal, then reduced the request to $18.5 million in its appeal letter. Most recently, in an email dated May 24, 2023, the City asked DFA to reconsider an approval of $8 million in GWGP funding (Attachment D).

2. The GWGP Guidelines were amended on May 2, 2023, to allow the Deputy Director of DFA discretion to completely waive the match requirements for Round 3 projects that benefit disadvantaged communities (DACs) and severely disadvantaged communities (SDACs), to the extent authorized by statute.

Joe Karkoski - 2 -
ANALYSIS: REVISED FUNDING RECOMMENDATION FOR CITY OF PISMO BEACH’S CENTRAL COAST BLUE PROJECT
DFA staff have re-evaluated the City’s proposed Central Coast Blue project (Project) and concluded that the Project is eligible for GWGP funding, and recommend providing $8 million in Prop 1 GWGP funding.

By statute, projects that prevent contamination of groundwater that has served, or serves, as a source of drinking water are eligible. (Wat. Code, § 79771.) This project would prevent groundwater contamination that has served, and serves, as a source of drinking water by providing groundwater recharge to protect against contamination.

Under the GWGP Guidelines, projects that provide groundwater recharge to prevent or reduce contamination of municipal or domestic wells, or that consist of groundwater injection to prevent seawater intrusion, are specifically listed as eligible project types. (GWGP Guidelines, § 4.4, subds. d and e.) Although the available information indicates that the communities’ voluntarily reduced pumping has reduced the likelihood of seawater intrusion, seawater intrusion would cause substantial adverse impacts to this water supply. Based on the eligibility criteria in the statute and GWGP Guidelines, the Project is eligible.

Staff have determined that $8 million in funding is appropriate, but not the full requested amount of $35.7 million, based on the following considerations. The City and other local governments have successfully forestalled the immediate threat of groundwater degradation because the City and its partner agencies have diligently conserved water and reduced their groundwater pumping rates. As a result, the Project scored lower than the other proposals evaluated for Prop 1 GWGP funding. As discussed in the next section, there are insufficient remaining Prop 1 GWGP funds to cover the entire $35.7 million request.

However, DFA staff have determined that the benefits of the project are significant enough to justify a GWGP grant. Future precipitation is unpredictable. During critically dry years, dwindling surface water supplies may force the City and other local governments to increase pumping rates, resulting in overdraft of the groundwater basin.

The Project aims to prevent situations like this from happening. Additionally, the potential for the Project to enhance local water supply reliability and address the urgent need for an alternative water supply cannot be overlooked. The Project supports the priorities of Proposition 1 by enhancing water supply reliability (Wat. Code, § 79771(b)(3)), promoting groundwater recharge (Wat. Code, § 79771(b)(4)), and by allowing California to adapt to changing hydrologic conditions brought on by climate change (Wat. Code, § 79770). The project also aligns with California’s Water Supply Strategy and conforms with Executive Order N-3-23.

Therefore, staff recommend providing $8 million in Prop 1 GWGP funding for the Central Coast Blue Project.

Joe Karkoski - 3 -
ANALYSIS: MATCH WAIVERS
The Prop 1 GWGP Guidelines set aside funds for projects benefiting DACs and SDACs as required by statute. The rest of the funds may be used for any projects eligible for Prop 1 GWGP, regardless of disadvantaged status (generic funds). The set-aside funds for projects benefitting DACs were exhausted after the initial award of Round 3 projects, and only one Round 3 project benefits an SDAC. Waiving the match requirement for eligible Round 3 projects would enable the GWGP to commit an additional $6.2 million from the generic funds and $1 million from the SDAC set-aside funds.

CONCLUSIONS
If the Deputy Director of DFA approves the $8 million request from the City and waives the match requirement for all eligible Round 3 DAC and SDAC projects, there would be $13.3 million remaining in generic funds, and $20.8 million left in the SDAC set-aside.

These funds may be used to fund additional cost increases for existing projects, or to fund new drinking water treatment or wastewater projects that serve SDACs.

STAFF RECOMMENDATIONS
Staff recommends the following:

1. Award GWGP funds for the Central Coast Blue Project and waive match for all Round 3 projects that serve DACs and an SDAC that are eligible for the match waiver (a total of five projects) as shown in Table 1. One DAC project would not qualify for match waiver, as explained in the footnote. The non-DAC projects do not qualify for a match waiver under the amended Guidelines. $635,900,000
$20,800,000 $13,300,000
Prop 1 GWGP Funds Remaining After
Waiving Match and Funding Central
Coast Blue
Committed SDAC Set-Aside Remaining Generic Funds Remaining

Joe Karkoski - 4 -
TABLE 1 – GWGP Round 3 Revised Funding Recommendations
Applicant Proposal Title DAC
Status
Funding
approved
2/9/23
Match
waiver
Revised
funding
amount
City of Dinuba Wellfield Groundwater
Quality Improvement and
Sustainability Project
SDAC $9,541,601 Waive $10,611,819
City of Turlock Downtown Turlock PCE
Project
DAC $14,640,045 Waive $17,269,997
City of El Monte* Former Crown City Plating
Site
DAC $1,901,250 Do not
waive
$1,901,250
(No change)
San Gabriel
Basin Water
Quality Authority
Whitmore Street
Groundwater Remediation
Facility Expansion
Implementation
DAC $1,850,735 Waive $3,701,470
City of Modesto Municipal Groundwater
Supply Contamination
Prevention and Cleanup
DAC $8,445,035 Waive $9,434,145
City of San Luis
Obispo
PCE Plume
Characterization
DAC $5,877,765 Waive $6,607,850
Alameda County
Water District
Brackish Groundwater
Reclamation Project
NonDAC$2,205,094 Do not
waive
$2,205,094
(No change)
United Water
Conservation
District
Phase 1 Pumping of
Coastal Brackish
Groundwater Wells to
Control Seawater
Intrusion, Oxnard Basin
NonDAC$8,449,062 Do not
waive
$8,449,062
(No change)
City of Pismo
Beach
Central Coast Blue NonDAC$0 Do not
waive
$8,000,000
Totals: $52,910,587 $68,180,687
*The City of El Monte’s project, while serving a DAC, would not be eligible for a match waiver under present circumstances. Water Code, section 79771(c), prohibits funding to be used to pay any share of the costs of remediation recovered or recoverable from responsible parties. Under current circumstances, 54% of the project funds appear to be recoverable from a viable potentially responsible party, the property owner.

2. GWGP staff should notify Round 3 applicants that will be affected by the approval of a complete waiver of match requirements.

3. GWGP staff should notify the City of Pismo Beach about DFA’s funding decision, superseding the funding determination letter dated March 17, 2023.

Joe Karkoski - 5 -

APPROVAL
I, Joe Karkoski, Deputy Director of the State Water Board’s Division of Financial Assistance, approve staff’s recommendations described above.

Approved: _________________________
Joe Karkoski, Deputy Director
Division of Financial Assistance
Attachments (4)

1. Attachment A - Round 3 Funding Recommendation Narrative

2. Attachment B - Pismo Beach - Funding Determination Letter

3. Attachment C - Pismo Beach Central Coast Blue Funding Determination

4. Attachment D - Support for Central Coast Blue and Funding Determination cc: Christopher Stevens
Division of Financial Assistance
Kim Dinh
Division of Financial Assistance
Debbie Cheung
Division of Financial Assistance
Kari Holzgang
Division of Financial Assistance
Anabel Ruiz
Division of Financial Assistance
Joseph Escobar
Division of Financial Assistance
David Maurer
Division of Financial Assistance
Catarina Hinojos
Division of Financial Assistance
Joe Karkoski Digitally signed by Joe Karkoski
Date: 2023.08.29 15:29:00
-07'00'

calrtoattA roTJ
-
Water Boards \ /
_,. :.i=_; +;;-.i;i; ifffi i.B.;x:iii6i;

GROUNDWATER IMPLEMENTATION GRANT
AMENDM ENT NO. 1
AGREEMENT NO. D2312550
by and between
CITY OF SAN LUIS OBISPO ("Recipient")
AND
CALIFORNIA STATE WATER RESOURCES CONTROL BOARD ("State Water Board") for the purpose of the
CITY OF SAN LUIS OBISPO PCE PLUME CHARACTERIZATION ("Project") Section 79771of the Water Code, and Resolution Nos. 2017-0075,2021-0003, and 2023-0013.

PROJECT FUNDING AMOUNT: $6€o7#5o $7.782.800
ESTIMATED REASONABLE PROJECT COST: $ffi $7.782.800
ELIGIBLE WORK START DATE: MARCH 6,2023
WORKCOMPLETIONDATE: W DECEMBER 31 ,2026
FINAL REIMBURSEMENT REQUEST DATE: MARCH_reS FEBRUARY 1.2027 RECORDS RETENTION END DATE: W DECEMBER 31 ,2062
This Aqreement executed bv the State Water Board on Februarv 14. 2024. is herebv amended and restated. to revise the cover Daqe. the Aoreement and Exhibits A and B (deletions shown as stricken and revisions bold and underlined). Exceot as noted herein all other terms and conditions shall remain the same. Please note. paqe numbers mav have chanqed.

Adobe Acrobat Sign Transaction Number CBJCHBCAABAAnvpolJpx4DzkimlaflKPegEmalTGtUH2

1 City of San Luis Obispo
Agreement No.. D231 2550 ffi
The State Water Board and the Recipient mutually promise, covenant, and agree to the terms, provisions, and conditions of this Agreement, including the following Exhibits, which are attached hereto or are incorporated by reference:
. EXHIBIT A - SCOPE OF WORK AND SCHEDULE
o EXHIBIT B - FUNDING TERMS
o EXHIBIT C - GENERAL TERMS AND CONDITIONS 2019-NOV
o EXHIBIT D - SPECIAL CONDITIONS

2. Party Contacts during the term of this Agreement are Each party may change its contact upon written notice to the other party. While Party Contacts are contacts for day-to-day communications regarding Project work, the Recipient must provide official communications and notices to the Division's Deputy Director.

3. Conditions precedent to this Agreement are set forth as follows (a) The Recipient must deliver to the Division a resolution authorizing this Agreement and identifying its Authorized Representative by title. (b) The Recipient must deliver an opinion of general counsel satisfactory to the State Water Board's counsel dated on or after the date that the Recipient signs this Agreement.

4. The Recipient represents, warrants, and commits to the following as of the Eligible Work Start Date and continuing thereafter for the term of this Agreement, which shall be at least until the Records Retention End Date:
(a) The Recipient agrees to comply with all terms, provisions, conditions, and commitments of this Agreement, including all incorporated documents.

State Water Board City of San Luis Obispo
Section Division of Financial Assistance
Name: Robin Guillot, Project Manager Name Nick Teague, Water Resources Program
Manaqer
Address 1001 I Street, 17th Floor Address 879 Morro Street City,
State
zip.

Sacramento, CA 958'14 City,
State,
zip:

San Luis Obispo, CA 93401
Phone (916) 319-8259 Phone (805) 781-7217
Email Robi n. G u i I lot@waterboard s. ca. q ov Email [email protected]

5 City of San Luis Obispo
Agreement No.: D2312550 ffi
(b) The execution and delivery of this Agreement, including all incorporated documents, has been duly authorizedby the Recipient. Upon execution by both parties, this Agreement constitutes a valid and binding obligation of the Recipient, enforceable in accordance with its terms, except as such enforcement may be limited by law.
(c) None of the transactions contemplated by this Agreement will be or have been made with an actual intent to hinder, delay, or defraud any present or future creditors of the Recipient. The Recipient is solvent and will not be rendered insolvent by the transactions contemplated by this Agreement. The Recipient is able to pay its debts as they become due.

The Recipient maintains sufficient insurance coverage considering the scope of this Agreement including, for example but not necessarily limited to, general liability, automobile liability, workers compensation and employer liability, and professional liability.
(d) The Recipient is in compliance with all State Water Board funding agreements to which it is a party.

This Agreement, and any amendments hereto, may be executed and delivered in any number of counterparts, each of which when delivered shall be deemed to be an original, but such counterparts shall together constitute one document. The parties may sign this Agreement, and any amendments hereto, either by an electronic signature using a method approved by the State Water Board or by a physical, handwritten signature. The parties mutually agree that an electronic signature using a method approved by the State Water Board is the same as a physical, handwritten signature for the purposes of validity, enforceability, and admissibility.

City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

lN WITNESS WHEREOF, this Ag+eem€n+ Amendment has been executed by the parties hereto.

CITY OF SAN LUIS OBISPO STATE WATER RESOURCES CONTROL
BOARD
Aaron Flayd %
By
Name
Title:

Aaron Floyd
Utilities Director
By
Name
Title:

Date Mar Date 6,2025
Joe Karkoski
Deputy Director
Division of Financial Assistance
Ma r L4,2025
Adobe Acrobat Sign Transaction Number: CBJCHBCAABAAnvpolJpx4DzkimraflKPQgEmalTGtUH2

City of San Luis Obispo
Agreement No.: D23'1 2550
Amendment 1

EXHIBIT A _ SCOPE OF WORK AND SCHEDULE
A.1 PROJECT PURPOSE AND DESCRIPTION
(a) The Project is for the benefit of the Recipient. The funding under this Agreement shall be used for the purpose of preparing a fate and transport groundwater model of Tetrachloroethylene (PCE) contamination, siting and construction of extraction and treatment wells, and a network of monitoring wells for the clean-up and prevention of PCE contamination in drinking water supply wells in the San Luis Valley area of the San Luis Obispo Groundwater Basin.
(b) The Useful Life of this Project is at least twenty (20) years, which may consist of the length of time the Project must be operated and maintained in order to achieve the environmental outcome(s) identified herein, and the length of time that the environmental outcome of the Project will be sustained after the Project is no longer operated or maintained.

4.2 SCOPE OF WORK.
(a) Project Management
(1) Provide all technical and administrative services as needed for Project completion; monitor, supervise, and review all work performed; and coordinate budgeting and scheduling to ensure the Project is completed within the budget, on schedule, and in accordance with approved procedures, applicable laws, and regulations.
(2) Notify the Project Manager at least fifteen (15) working days in advance of upcoming meetings, workshops, and trainings. (3) Develop and update appropriately a detailed Project schedule including key Project milestones, and submit to the Project Manager.
(4) Conduct periodic and final site visits with the Project Manager (5) Conduct pre-, during, and post-implementation photo monitoring at the Project site and submit to the Project Manager.

Gene ral Com p I ia nce Req u i rements/P roject Effective ness a nd Performance
(b)
Exhibit A Page 63 of 1018
City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

(1) Submit Global Positioning System (GPS) information and survey data for project site(s) and monitoring location(s) for this Project to the Project Manager. Submittal requirements for GPS data are available at:
http : //www.waterboards. ca. q ov/water iss ues/proq rams/q rants loan s/q rant_i nfo/d ocs/q ps. pdf
(2) Prepare a Monitoring and Reporting Plan (MRP) that addresses pre-construction and post-construction performance monitoring for the useful life of the Project. Submit the MRP to the Technical Advisory Committee (TAC) for comment and the Project Manager for approval. Any costs not supported by the approved MRP will not be reimbursed. Reimbursement for monitoring costs incurred prior to the MRP submittal will require approval by the Project Manager. The MRP may be submitted as separate documents or in one report and shall include the following:
(a) A Monitoring Plan (MP) that includes the following sections:
(1) Purpose: Describe the methods used to measure,
evaluate, and document performance of the
remediation and treatment system based on the
effectiveness of the remedy meeting the Project
purpose, objectives, and metrics developed in the
Project Assessment and Evaluation Plan (PAEP).

Describe the relation of the proposed monitoring
activities to any other monitoring activities conducted by the Recipient in the Project area.
(2) Project Area. Provide a map and narrative
description of the anticipated area of plume capture,
location of the Project, and location of monitoring
wells and production wells that will be sampled to
achieve the purpose of the MP.
(3) Sampling Plan: Describe the methodology and
analytical methods used, selection of monitoring
locations, the frequency of monitoring, and the
process that will be used to make any necessary
changes to achieve the purpose of the MP.
(4) Field Procedures: Provide a description of field
procedures including sample collection methods,
equipment decontamination, sample identification and
handling, and documentation procedures.

Exhibit A Page 64 of 1018
(3)
(b) A PAEP which describes how the Project performance will be assessed, evaluated, and reported. The PAEP must
establish baseline groundwater quality conditions for the Project area and detail the Project's goals, desired
outcomes, and the methods of measuring and reporting
Project benefits.

Monitor Project effectiveness in accordance with the approved MRP.

City of San Luis Obispo
Agreement No.: D2312550
Amendment 1
PageT of 47
Conduct post-construction monitoring in accordance with the approved MRP and include the results during the first year of post-construction monitoring in the associated quarterly progress report. A summary of all Project effectiveness monitoring and data analysis shall be included in the Final Project Report.
(a)
(4) Prepare, maintain, and implement a Quality Assurance Project Plan (OAPP) in accordance with the United States Environmental Protection Agency's (USEPA) QAPP guidance documents (EPA QA/G-S and EPA OA/R-S). Water quality monitoring data include physical or chemical monitoring of any groundwater. The QAPP shall be submitted to the Project Manager for approval. A template for the USEPA's QAPP is available from the Project Manager. (5) Prepare and upload all groundwater analytical data collected in accordance with the MRP to the State Water Board's
GeoTracker/GAMA system in Electronic Deliverable Format (EDF).

Groundwater samples include. monitoring well samples, borehole samples, piezometer samples, and samples from drinking water wells. Locational information for these sampling points shall be submitted using the GEO_XY, GEO Z, and GEO WELL files.

Contact the Project Manager to obtain a Global lD prior to collecting samples.
a) Upload data that was utilized in item (bX2) to establish baseline groundwater quality conditions for the Project area b) Upload other data related to the design and development of the Project that is not presently available on
GeoTracker/GAMA. This may include reports, figures, maps and geographic information system (GlS) data. Submit an annotated list of reviewed data and reports to the Project Manager.

Exhibit A Page 65 of 1018
City of San Luis Obispo
Agreement No.: D2312550
Amen 1

(c) Environmental Compliance and Permitting
(1) Complete documentation required under the California Environmental Quality Act (CEOA) for the Project. Take all required steps to prepare, circulate, and certify the required CEQA document(s). Pursuant to item 14 of Exhibit C, no work that is subject to CEQA may proceed under this Agreement until the State Water Board has provided approval to proceed.
(a) Submit the draft CEQA document to the Project Manager for comment, if applicable.
(b) Submit the final CEQA document to the Project Manager. (c) Obtain written environmental clearance from the State Water Board confirming the State Water Board has made its own environmental findings and concurs that
implementation/construction may proceed.
(2) Obtain all public agency approvals, entitlements, and permits required for Project implementation. lf the Project is carried out on lands not owned by the Recipient, the Recipient shall obtain adequate rights of way for the useful life of the Project. Submit a list and signed copies of such approvals, entitlements, and permits to the Project Manager.
(d) Technical Advisory Committee
(1) Establish a TAC that includes representatives from the Division, the Division of Drinking Water (DDW, and the Regional Water Board.

Submit the final list of TAC members, their roles and
responsibilities, and affiliations to the Project Manager. (2) Convene a kickoff meeting to establish TAC goals and objectives, formalize roles, and create a schedule for future meetings. Submit a summary of the kickoff meeting to the Project Manager. (3) Conduct additional TAC meetings in accordance with the schedule developed in ltem (dX2) and submit agendas, meeting notes, and sign-in sheets for each meeting to the Project Manager. (e) Planning, Design and Engineering
(1) Conduct Groundwater Fate and Transport Modeling for the purpose of siting monitoring wells and extraction wells that will clean up g rou ndwater contam i nation.

Exhibit A Page 66 of 1018
City of San Luis Obispo
Agreement No.: D231 2550
Amendment 1

(2) Prepare a Groundwater Fate and Transport Modeling Report (Modeling Report) and submit to the TAC for comment and to the Project Manager for approval. The Modeling Report shall include, at a minimum, the following:
(a) Modeling details and results including, but not limited to, particle tracking analysis, model calibration, sensitivity analysis and pumping rates which are necessary to achieve remedial action objectives.
(b) Description of the conceptual understanding on which the model is based, how the model simulates components of the natural system, and the underlying assumptions and
limitations.
(3) Prepare the sixty percent (60%) design plans and specifications and submit to the TAC for comment and the Project Manager for approval. The plans and specifications shall include at a minimum the following components.
(a) lnstall a minimum of eight (8) new groundwater monitoring wells.
(b) lnstall up to two (2) extraction wells and equip two (2) extraction wells with a granular activated carbon (GAC) groundwater treatment system with a minimum design flow rate of 150 gpm.
(4) Complete the one hundred percent (100%) design plans and specifications, prepare a summary identifying any changes from the sixty percent (60%) plans, and submit both to the TAC for comment and the Project Manager for approval.
(5) Complete the bid documents in accordance with the approved design plans in (e)( ) and, after receiving all required approvals, advertise the Project for bid. Submit the advertised bid documents to the TAC and the Project Manager.
(f) Constructionandlmplementation
(1) Award the construction contract(s) and submit the Notice(s) to Proceed and awarded contract(s) to the Project Manager. (2) Construct the project in accordance with the approved design plans and specifications in ltem (eX4), after obtaining environmental clearance in ltem (c)(1)(c) and the necessary approvals, entitlements, and/or permits in ltem (cX2)
Exhibit A Page 67 of 1018
City of San Luis Obispo
Agreement No.: D2312550
Amendment 1
Page '10 of 47
(3) Submit any proposed changes that arise during construction that may affect the Project's benefits, schedule, or costs to the TAC for comment, if applicable, and the Project Manager for approval prior to implementation.
(4) Submit as-built drawings for components listed in ltem (eX3) and provide a summary of changes from the approved design plans and specifications in item (e)(4) that occurred during construction to the TAC and the Project Manager.
(5) Prepare documents that address operation and maintenance of the Project for its useful life and submit to the TAC and Project Manager for comment. The documents shall include the following:
(a) An operations and maintenance plan
(b) A testing and startup plan including initial, functional, and performance testing.
(g) Public Outreach
(1) Develop outreach materials including flyers, posters, brochures, and advertisements, and update the website and associated social media web pages to include Project progress and outcomes.

Submit copies of the outreach materials and web links to the Project Manager.
(2) Conduct a minimum of one (1) public workshop for stakeholders.

Submit the workshop materials, sign-in sheet(s), and photo documentation of the workshop to the Project Manager.

Upon Completion of Construction, the Recipient must expeditiously initiate Project operations.

A.3 PROGRESS REPORTS
The Recipient must submit quarterly progress reports, using a format provided by the Project Manager, within forty-five (45) days following the end of the calendar quarter (March, June, September, and December) to the Project Manager.

Progress reports must provide a brief description of activities that have occurred, milestones achieved, monitoring results (if applicable), and any problems encountered in the performance of the work under this Agreement during the applicable reporting period. Reporting is required even if no project-related activities occurred during the reporting period. The Recipient must document all activities and expenditures in progress reports, including work performed by contractors.

Exhibit A Page 68 of 1018
City of San Luis Obispo
Agreement No.. D2312550
Amendment 1
Page11ot47

4.4 AS NEEDED REPORTS
The Recipient must provide expeditiously, during the term of this Agreement, any reports, data, and information reasonably required by the Division, including but not limited to material that is necessary or appropriate for evaluation of the funding program or to fulfill any reporting requirements of the state or federal government.

A.5 FINAL REPORTS. (a) At the conclusion of the Project, the Recipient must submit the following to the Project Manager:
(1) Draft Final Project Report. Prepare and submit to the Project Manager for review and comment a draft Final Project Report in a format provided by the Project Manager that must include the following information, as well as information set forth in the Scope of Work, above:
a) Description of the water quality problem the Project sought to address,
b) Description of the Project scope, cost, and schedule, with photo documentation;
c) Discussion of the Project's likelihood of successfully addressing that water quality problem in the future, including an evaluation and summary of relevant water quality data; and
d) Summary of lessons learned.
(2) Final Project Report. Prepare a Final Project Report that addresses, to the extent feasible, comments made by the Project Manager on the draft Final Project Report. Submit one (1) reproducible master copy and an electronic copy.
(3) Final Project Summary. Prepare a brief summary of the information contained in the Final Project Report, using a format provided by the Project Manager and include accomplishments,
recommendations, and lessons learned, as appropriate.
(b) lf the Recipient fails to submit a timely Final Project Report, the State Water Board may stop processing pending or future applications for new financial assistance, withhold reimbursements under this Agreement or other agreements, and begin administrative proceedings.

Exhibit A Page 69 of 1018
City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

A.6 OPERATIONAL REPORTS
(a) During the Useful Life of the Project, the Recipient must submit operational reports to the Division that include detailed operational and groundwater monitoring data as defined in the approved MRP and any updates to the Modeling Report, Operations and Maintenance Plan, or Pumping Plan.
(b) As set forth below, the Recipient must submit operational reports to the Project Manager, the Regional Water Board, and the Division of Drinking Water Section Chief (also known as the Regional Engineer), and upload the reports to GeoTracker.
(1) For each of the first five (5) years following Work Completion (i.e., Years 1 through 5), the Recipient shall submit a total of four (4) Operational Reports, consisting of three (3) quarterly Operational Reports, and one (1) Annual Operational Report which provides data and information for the fourth quarter and an annual summary. The Quarterly and Annual Operational Reports shall be submitted within forty-five (45) days following the end of each calendar quarter (March, June, September, December), with the first Quarterly Operational Report due no later than one hundred thirty-five (135) days after Work Completion and the first Annual Operational Report due no later than one (1) year and forty-five (45) days after Work Completion.
(2) For the remaining Useful Life of the Project, the Recipient must continue to submit Annual Operational Reports within forty-five (45) days following the end of the fourth quarter (i.e., March, June, September, or December, consistent with the established timeframe for Annual Operational Report submittal).

A.7 SIGNAGE
The Recipient must place a professionally prepared sign at least four (4) feet tall by eight (8) feet wide made of To-inch-thick exterior grade plywood or other approved material in a prominent location on the Project site and must maintain the sign in good condition for the duration of Project implementation. The sign may include another agency's required information and must include, prominently displayed, the following disclosure statement and color logos (available from the Division).

TR9:J pWater Boards
-
*#WAIIR BONO 2Ol/a
Exhibit A Page 70 of 1018
City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

"Funding for this project has been provided in full or in part by Proposition 1 - the Water Quality, Supply, and lnfrastructure lmprovement Act of 2014 through an agreement with the State Water Resources Control Board." A.8 FINAL PROJECT INSPECTION AND CERTIFICATION
Upon completion of the Project, the Recipient must provide for a final inspection and must certify that the Project has been completed in accordance with this Agreement, any final plans and specifications submitted to the State Water Board, and any amendments or modifications thereto. lf the Project involves the planning, investigation, evaluation, design, or other work requiring interpretation and proper application of engineering, or other professionals, the final inspection and certification must be conducted by a California Registered Civil Engineer or other appropriate California registered professional. The results of the Final lnspection and Certification must be submitted to the Project Manager.

A.9 SCHEDULE.

Failure to provide items by the due dates indicated in the table below may constitute a material violation of this Agreement. The Project Manager may adjust the dates in the "Estimated Due Date" column of this table, but Critical Due Date adjustments will require an amendment to this Agreement. The Recipient must complete and submit all work in time to be approved by the Division prior to the Work Completion Date. As applicable for specific submittals, the Recipient must plan adequate time to solicit, receive, and address comments prior to submitting the final submittal. The Recipient must submit the final Reimbursement Request prior to the Final Reimbursement Request Date set forth on the Cover Page.

As applicable for specific submittals, the Recipient shall plan adequate time to solicit, receive, and address TAC comments prior to submitting the final deliverable.

Submittal Schedule

ITEM DESCRIPTION OF SUBMITTAL CRITICAL DUE
DATE

ESTIMATED

DUE DATE
EXHIBIT A.2 - SCOPE OF WORK
(a) Project Management
(aX2) Notification of Upcoming Meetings,
Workshops, and Trainings
15 Days Prior
(a)(3) Detailed Project Schedule 30 Days After
Execution
(aX4) Periodic and Final Site Visits As Needed
Exhibit A Page 71 of 1018
City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

ITEM DESCRIPTION OF SUBMITTAL CRITICAL DUE
DATE

ESTIMATED

DUE DATE
(aX5) Pre-, During, and Post-Construction
Photos
Ongoing
(b) Ge neral Com pl ian ce Req u i rements/P roject Effectiveness and Performance (bx1) Global Positioning System (GPS)
lnformation
+anuary+gZ6
Februarv 2026
(bx2) Monitoring and Reporting Plan (MRP) Mareh 2024
March 2026
(bX2Xa) Monitoring Plan (MP) Mareh 2024
Complete
(bx2xb) Project Assessment and Evaluation
Plan (PAEP)
eegr+aqf+025
September 2025
(bx4) Quality Assurance Project Plan (QAPP) Mareh 2024
Complete
(bx5) GeoTracker Upload eegruaqf+O25
June 2026
(c) Environmental Compliance and Permitting
(cX1Xa) Draft CEQA Document Septemge+:gZ+
Gomplete
(c)
( 1 )(b) Final CEQA Document geeemgera*
M
Mav 2025
(cX2) List and Signed Copies of Approvals,
Entitlements or Permits
lansaqf+€25
Mav 2025
(d) Technical Advisory Committee (TAC)
(dx1) List of TAC Members and Their Roles
and Responsibilities
Complete
(dx2) Summary of the Kickoff Meeting lnnt tant t)At)A
vqr ruqr t LvLComplete
(dx3) Agendas, Meeting Notes, and Sign-ln
Sheets
Ongoing
(e) Planning, Design, and Engineering
(eX2) Groundwater Fate and Transport
Modeling Report
f*+wPyW.

Complete
Exhibit A Page 72 of 1018
City of San Luis Obispo
Agreement No.. D2312550
Amendment 1

ITEM DESCRIPTION OF SUBMITTAL CRITICAL DUE
DATE

ESTIMATED

DUE DATE
(eX3) 60% Design Plans and Specifications nugust4o2a
Complete
(eXa) 100o/o Design Plans Nevember 2024
March 2025
(eX5) Advertised Bid Documents D€€emb€++€e.4
June 2025
(f) Construction and lmplementation
(fx1) Notice(s) to Proceed lanuary+geS
September 2025
(fx3) Proposed Changes As Needed
(0(4) As-Built Drawings eeg+ua+V+ge6
October 2026
(fX5Xa) Operations and Maintenance
Management Plan
Nevember 2025
Julv 2026
(fx5xb) Testing and Startup Plan Deeember 2025
Julv 2026
(g) Public Outreach
(gX1) Outreach Materials (such as flyers,
posters, brochures, and
advertisements)
lanuaqf:geS
March 2025
(gX2) Public Presentation Meeting Materials As Needed

REPORTS
A.3 Progress Reports Quarterly

4.4 As Needed Reports As Needed
A 5(a)(1) Draft Final Project Report Deeember+f M
September 2026
A.5(aX2) Final Project Report eeUruaqf+ M
November 30,
2026
Exhibit A Page 73 of 1018

ITEM DESCRIPTION OF SUBMITTAL CRITICAL DUE
DATE

ESTIMATED

DUE DATE
A.5(aX3) Final Project Summary Before Work
Completion
Date
A,8 Final Project lnspection and
Certification
Before Work
Completion
Date
EXHIBIT B _ FUNDING TERMS

8.7(e) Reimbu rsement Requests Quarterly

8.7(i) Final Reimbursement Request Ua+en-l#OZC
Februarv 1.
2027
City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

The Division may require corrective work to be performed prior to Project Completion Any work occurring after the Work Completion Date will not be reimbursed under this Agreement.

The Recipient must deliver any request for amendment no fewer than 120 days prior to the Work Completion date.

Exhibit A Page 74 of 1018
City of San Luis Obispo
Agreement No.: D231 2550
Amendment 1

EXHIBIT B _ FUNDING TERMS

8.1 ESTIMATED REASONABLE COST AND PROJECT FUNDS
The estimated reasonable cost of the total Project is set forth on the Cover Page of this Agreement and is greater than or equal to the funding anticipated to be provided by the State Water Board under this Agreement. Subject to the terms of this Agreement, the State Water Board agrees to provide Project Funds not to exceed the amount of the Project Funding Amount set forth on the Cover Page of this Agreement.

8.2 RECIPIENTCONTRIBUTIONS.

The Recipient must pay any and all costs connected with the Project including, without limitation, any and all Project Costs. lf the Project Funds are not sufficient to pay the Project Costs in full, the Recipient must nonetheless complete the Project and pay that portion of the Project Costs in excess of available Project Funds, and shall not be entitled to any reimbursement therefor from the State Water Board.

8.3 DOUBLE PAYMENT PROHIBITION
lf the Recipient recovers funds from any responsible parties, the Recipient shall immediately notify the Division. The amount of this Agreement may be reduced to reflect the recovered funds.

8.4 VERIFIABLE DATA.

Upon request by the Division, the Recipient must submit verifiable data to support deliverables specified in the Scope of Work. The Recipient's failure to comply with this requirement may be construed as a material breach of this Agreement.

8.5 BUDGET COSTS
Budget costs are contained in the Project Cost table below:

LINE ITEM PROJECT

FUNDING
AMOUNT
TOTAL

PROJECT
COSTS
Direct Project Adm i n istration
Costs
$127 208
$107,650
#ru
$107,650
Plan ning/Desig n/Eng ineering/
Environmental
s?31;1oo
$883.900
$731r{€O
$883,900
Construction/l mplementation $ffi
$6.698.000
$ww
$6.698.000
Monitorinq/Performance $40,000 $40,000
Exhibit B

City of San Luis Obispo
Agreement No.. D2312550
Amendment 1

Education/Outreach $3W
$53.250
$33#50
$53.250
TOTAL $ffi
$7.782.800
$6]6€7€50
$7,782.800
lndirect Costs are ineligible for funding under this Agreement.

The Recipient is prohibited from requesting disbursement amounts that represent the Recipient's mark-ups to costs invoiced or otherwise requested by consultants or contractors.

8.6 LINE ITEM ADJUSTMENTS
(a) Subject to the prior review and approval of the Project Manager, adjustments between existing line items may be used to defray allowable direct costs up to fifteen percent (15%) of the total Project Funding Amount, including any amendment(s) thereto. Line ltem adjustments approved by the Project Manager must be de minimis, less than fifteen percent (15%) of the total Project Funding Amount, and may not include any changes to the Scope of Work. Line item adjustments in excess of fifteen percent (15o/o) or line item adjustments that result in a change to the Scope of Work will require an Agreement amendment. Upon request by the Project Manager, supporting documents for professional and administrative services must include the employees' names, classifications, labor rates, hours worked, and descriptions of the tasks performed.
(b) The Recipient may submit a request for an adjustment in writing to the Project Manager. Such adjustment may not increase or decrease the total Project Funding Amount. The Recipient shall submit a copy of the original Agreement budget reflecting the requested changes and shall note proposed changes by striking out the original amount(s) followed with proposed change(s) in bold and underlined. Budget adjustments deleting a budget line item or adding a new budget line item shall require a formal amendment. The Division may also propose budget adjustments. (c) The sum of adjusted line items shall not exceed the total budget amount.

8.7 REIMBURSEMENT PROCEDURE.

Except as may be othenrvise provided in this Agreement, reimbursement of Project Funds will be made as follows:
(a) Upon execution and delivery of this Agreement, the Recipient may submit a Reimbursement Request for eligible Project Costs as specified in this Exhibit B

City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

Exhibit through submission to the State Water Board using the Reimbursement Request forms provided by the Project Manager. To be eligible for reimbursement, Project Costs, including planning and design allowance costs, must have been incurred in compliance with all applicable req uirements, includ ing the state cross-cutting req u irements listed in Exhibit D.
(b) Reimbursement Requests must contain the following information:
(1) The date of the request;
(2) The time period covered by the request, i.e., the term "from" and "to";
(3)
(4)
The total amount requested;
Original signature and date (in ink) or electronic signature, consistent with the State Water Board's approved procedures, of the Recipient's Authorized Representative or his/her designee; and (5) The Final Reimbursement Request must be clearly marked "FINAL REIMBURSEMENT REQUEST" and must be submitted NO LATER
THAN the Final Reimbursement Request Date.
(c) The Recipient may sign Reimbursement Requests either by an electronic signature consistent with the State Water Board's approved procedures or by a physical, handwritten signature. The parties mutually agree that an electronic signature consistent with the State Water Board's approved procedures is the same as a physical, handwritten signature for the purposes of validity, enforceabi I ity, and admissibility. (d) Reimbursement Requests must be itemized based on the line items specified in the budget in this Exhibit. Reimbursement Requests must be complete, signed by the Recipient's Authorized Representative or his/her designee, and addressed to the Project Manager as set forth in this Agreement. Reimbursement Requests submitted in any other format than the one provided by the State Water Board will cause a Reimbursement Request to be disputed. ln the event of such a dispute, the Project Manager will notify the Recipient. Payment will not be made until the dispute is resolved and a corrected Reimbursement Request is submitted.

The Project Manager has the responsibility for approving Reimbursement Requests. Project Costs incurred prior to the Eligible Work Start Date of this Agreement will not be reimbursed.
(e) Project Funds must be requested quarterly via Reimbursement Request for eligible costs incurred during the reporting period of the corresponding Exhibit B

(0
City of San Luis Obispo
Agreement No.: D231 2550
Amendment 1

Progress Report, describing the activities and expenditures for which the reimbursement is being requested. Each Reimbursement Request must be accompanied by a Progress Report. Failure to provide timely Reimbursement Requests may result in such requests not being honored The Recipient agrees that it will not submit any Reimbursement Requests that include any Project Costs until such costs have been incurred and are currently due and payable by the Recipient, although the actual payment of such costs by the Recipient is not required as a condition of reimbursement. Supporting documentation (e.9., receipts) must be submitted with each Reimbursement Request as well as to support Match Contributions claimed, if any. The amount requested for personnel costs must include a calculation formula (i.e., hours or days worked times the hourly or daily rate = total amount claimed). Reimbursement of Project Funds will be made only after receipt of a complete, adequately supported, properly documented and accurately addressed Reimbursement Req uest.
(g) The Recipient will not seek reimbursement of any Project Costs that have been reimbursed from other funding sources.
(h) The Recipient must use Project Funds within thirty (30) days of receipt to reimburse contractors, vendors, and other Project Costs. Any interest earned on Project Funds must be reported to the State Water Board and will either be required to be returned to the State Water Board or deducted from future reimbursements. ln the event that the Recipient fails to disburse Project Funds to contractors or vendors within thirty (30) days from receipt of the Project Funds, the Recipient must immediately return such Project Funds to the State Water Board. lnterest shall accrue on such Project Funds from the date of reimbursement through the date of mailing of Project Funds to the State Water Board. lf the Recipient held such Project Funds in interest-bearing accounts, any interest earned on the Project Funds shall also be due to the State Water Board. (i) The Recipient must submit its final Reimbursement Request no later than the Final Reimbursement Request Date specified herein. lf the Recipient fails to do so, then the undisbursed balance of this Agreement may be deobligated.

The Recipient agrees that it will not request a reimbursement unless that cost is allowable, reasonable, and allocable.
(k) Notwithstanding any other provision of this Agreement, no reimbursement shall be required at any time or in any manner that is in violation of or in conflict with federal or state laws, policies, or regulations. 0)
Exhibit B

City of San Luis Obispo
Agreement No.: D2312550
Amendment 1
Page2l ol47
(t) The Recipient agrees that it shall not be entitled to interest earned on undisbursed Project Funds.
(m) The Recipient must include any other documents or requests required or allowed under this Agreement.
(n) Notwithstanding any other provision of this Agreement, the Recipient agrees that the State Water Board may retain an amount equal to ten percent (10Yo) of the Project Funding Amount until Project Completion.

Any retained amounts due to the Recipient will be promptly disbursed to the Recipient, without interest, upon Project Completion.

8.8 REVERTING FUNDS AND DISENCUMBRANCE,
ln the event the Recipient does not submit Reimbursement Requests for all funds encumbered under this Agreement timely, any remaining funds revert to the State. The State Water Board may notify the Recipient that the project file is closed, and any remaining balance will be disencumbered and unavailable for further use under the Agreement.

Exhibit B

City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

EXHIBIT C _ GENERAL TERMS AND CONDITIONS 201g-NOV
GENERAL TERMS AND CONDITIONS 2019-NOV is posted at
https://www.waterboards.ca.qov/water issues/proqrams/grants loans/qeneral terms.html and replicated below:

DEFINITIONS. Unless otherwise specified in this Agreement, each capitalized term used in this Agreement has the following meaning:
. "Agreement" means this agreement, including all exhibits and attachments hereto. "Cover Page" means the front page of this Agreement.
"Days" means calendar days unless otherwise expressly indicated "Deputy Director" means the Deputy Director of the Division. "Division" means the Division of Financial Assistance of the State Water Board or any other division or unit of the State Water Board authorized to administer this Agreement.
"Event of Default" means the occurrence of any of the following events:
a) A representation or warranty made by or on behalf of the Recipient in this Agreement or in any document furnished by or on behalf of the Recipient to the State Water Board pursuant to this Agreement shall prove to have been inaccurate, misleading or incomplete in any material respect; b) Failure by the Recipient to observe and perform any covenant, condition, or provision in this Agreement, which failure shall continue for a period of time, to be determined by the Division;
c) lnitiation of proceedings seeking arrangement, reorganization, or any other relief under any applicable bankruptcy, insolvency, or other similar law; the appointment of or taking possession of the Recipient's property by a receiver, liquidator, assignee, trustee, custodian, conservator, or similar official; the Recipient's entering into a general assignment for the benefit of creditors; the initiation of resolutions or proceedings to terminate the Recipient's existence, or any action in furtherance of any of the foregoing;
d) A determination pursuant to Gov. Code section 11137 that the Recipient has violated any provision in Article 9.5 of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code; or
e) Loss of the Recipient's rights, licenses, permits, or privileges necessary for the Project, or the occurrence of any material restraint on the Recipient's enterprise by a government agency or court order.
a
a
a
a
a
Exhibit C

a
City of San Luis Obispo
Agreement No.. D231 2550
Amendment 1

"Final Reimbursement Request Date" means the date set forth as such on the Cover Page of this Agreement, after which date, no further reimbursements or disbursements may be requested.
o "Fiscal Year" means the period of twelve (12) months terminating on June 30 of any year.
"GAAP" means generally accepted accounting principles, the uniform accounting and reporting procedures set forth in publications of the American lnstitute of Certified Public Accountants or its successor, or by any other generally accepted authority on such procedures, and includes, as applicable, the standards set forth by the Governmental Accounting Standards Board or its successor, or the Uniform System of Accounts, as adopted by the California Public Utilities Commission for water utilities.
"Material Obligation" means an obligation of the Recipient that is material to this transaction.
"Party Contact" means, for the Recipient, the Authorized Representative of the Recipient or any designee of the Authorized Representative, and, for the State Water Board, the Division staff set forth in Section 2 of this Agreement. "Project" means the Project funded by this Agreement as described in Exhibits A and B and in the documents incorporated by reference herein. "Project Completion" means, as determined by the Division, that the Project is complete to the reasonable satisfaction of the Division. "Project Costs" means the incurred costs of the Recipient which are eligible for funding under this Agreement, pursuant to applicable statutes, policy, regulations, or guidelines.
"Project Funding Amount" means the maximum amount payable under this Agreement, as set forth on the Cover Page.
"Project Funds" means all moneys disbursed to the Recipient by the State Water Board for eligible Project Costs pursuant to this Agreement. "Project Manager" means the person designated by the State Water Board to manage performance of this Agreement. The Project Manager is set forth on the Cover Page.
"Records Retention End Date" means the last date that the Recipient is obligated to maintain records related to this Agreement and is set forth on the Cover Page of this Agreement.
a
a
a
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Exhibit C

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City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

"Regional Water Quality Control Board" or "Regional Water Board" means the appropriate Regional Water Quality Control Board.
"Reimbursement Period" means the period during which Project Funds may be disbursed.
"Reimbursement Request" means the Recipient's request for Project Funds from the State Water Board as set forth in Exhibit B.
o "State" means State of California
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"State Water Board" means the State Water Resources Control Board "Work Completion" means the Recipient's submittal of allwork set forth under Exhibit A for review and approval by the Division.
"Work Completion Date" means the date set forth on the Cover Page of this Agreement and is the last date on which Project Costs may be incurred under this Agreement.
a
o "Year" means calendar year unless othenruise expressly indicated

1. ACCESS, INSPECTION, AND PUBLIC RECORDS. The Recipient must ensure that the State Water Board, the State Auditor, or any authorized representative of the foregoing, will have safe and suitable access to the Project site at all reasonable times through the Records Retention End Date or useful life of the Project, whichever is longer. The Recipient acknowledges that, except for a subset of information regarding archaeological records and personally identifiable information, the Project records and locations may be public records, including but not limited to all of the submissions accompanying the application, all of the documents incorporated into this Agreement by reference, and all reports, Reimbursement Requests, and supporting documentation submitted hereunder.

2. ACCOUNTING AND AUDITING STANDARDS; FINANCIAL MANAGEMENT SYSTEMS. The Recipient must maintain GAAP-compliant project accounts, including GAAP requirements relating to the reporting of infrastructure assets. Without limitation of the requirement to maintain Project accounts in accordance with GAAP, the Recipient must:
(a) Establish an official file for the Project which adequately documents all significant actions relative to the Project;
(b) Establish separate accounts which will adequately and accurately depict all amounts received and expended on the Project, including all Project Funds received under this Agreement;
Exhibit C

City of San Luis Obispo
Agreement No.: D231 2550
Amendment 1

(c) Establish separate accounts which will adequately depict all income received which is attributable to the Project, specifically including any income attributable to Project Funds disbursed under this Agreement;
(d) Establish an accounting system which will accurately depict final total costs of the Project if authorized under this Agreement;
(e) Establish such accounts and maintain such records as may be necessary for the State to fulfill federal reporting requirements, including any and all reporting requirements under federal tax statutes or regulations; and (f) lf the Recipient uses its own employees, equipment, or resources for any phase of the Project, accounts will be established which reasonably document all employee hours charged to the Project and the associated tasks performed by each employee

3. AMENDMENT. No amendment or variation of the terms of this Agreement shall be valid unless made in writing and signed by both the Recipient and the Deputy Director or designee and approved as required.

4. ASSIGNABILIry. This Agreement is not assignable by the Recipient, either in whole or in part, without the consent of the State Water Board. Amendment of the Agreement may be required.

5. AUDIT. The Division may call for an audit of financial information relative to the Project if the Division determines that an audit is desirable to assure program integrity or if an audit becomes necessary because of State or federal requirements. lf an audit is called for, the audit must be performed by a certified public accountant independent of the Recipient and at the cost of the Recipient. The audit must be in the form required by the Division. The Recipient must return, or ensure the return of, any audit disallowances within 30 days.

6. BONDING. Where construction contractors are used, the Recipient must not authorize construction to begin until each contractor has furnished a performance bond in favor of the Recipient in the following amounts: faithful performance (100%) of contract value; labor and materials (100%) of contract value. This requirement shall not apply to any contract for less than $25,000.00.

7. COMPETITIVE BIDDING. Recipient must adhere to any applicable State law or local ordinance for competitive bidding and applicable labor laws. lf Recipient is a private entity, any construction contracts related in any way to the Project must be let by competitive bid procedures which assure award of such contracts to the lowest responsive and responsible bidders. Recipient must not award a construction contract until a summary of bids and identification of the selected lowest responsible bidder is submitted to and approved in writing by the Division. Recipient must provide a full explanation if Recipient is proposing to award a construction contract to anyone other than the lowest responsible bidder.

Exhibit C

City of San Luis Obispo
Agreement No.: D2312550
Amendment I

8. COMPLIANCE WITH APPLICABLE LAWS, RULES, AND REQUIREMENTS. ThC Recipient must, at all times, comply with and require its contractors and subcontractors to comply with all applicable federal and State laws, rules, guidelines, regulations, and requirements and with provisions of the adopted environmental mitigation plan, if any, for the useful life of the Project.

L COMPUTER SOFTWARE. The Recipient certifies that it has appropriate systems and controls in place to ensure that State funds will not be used in the performance of this Agreement for the acquisition, operation or maintenance of computer software in violation of copyright laws.

10. CONFLICT OF INTEREST. The Recipient certifies that it, its owners, officers, directors, agents, representatives, and employees are in compliance with applicable State and federal conflict of interest laws and will remain in compliance for the useful life of the Project. Any service provider or contractor with which the Recipient contracts must not have any role or relationship with the Recipient, that, in effect, substantially limits the Recipient's ability to exercise its rights, including cancellation rights, under the contract, based on all the facts and circumstances. Public entities are required to have adopted conflict of interest codes and may be required to provide documentation of those codes to the Division.

11. DATA MANAGEMENT. The Recipient will undertake appropriate data management activities so that Project data can be incorporated into statewide data systems.

12. DEBARRED, DISQUALIFIED, OR EXCLUDED CONTRACTORS. The Recipient must not contract or allow subcontracting with excluded parties. The Recipient must not contract with any party who is debarred or suspended or othenruise excluded from or ineligible for participation in any work overseen, directed, funded, or administered by the State Water Board program for which this funding is authorized. For any work related to this Agreement, the Recipient must not contract with any individual or organization on the State Water Board's List of Disqualified Businesses and Persons that is identified as debarred or suspended or otherwise excluded from or ineligible for participation in any work overseen, directed, funded, or administered by the State Water Board program for which funding under this Agreement is authorized. The State Water Board's List of Disqualified Businesses and Persons is located at
htto ://www.waterboa rds. ca. qov/water is es/oroo ra ms/enforcement/firua/d bo. shtm I '13. DRUG-FREE WORKPLACE. The Recipient certifies that it will provide a drug-free workplace in compliance with the Drug-Free Workplace Act (Gov. Code. SS 8350-8357) The Recipient shall publish a statement notifying employees that the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited in the Recipient's workplace and specifying the actions to be taken against employees for violations of the prohibition. The Recipient shall establish a drug-free awareness program to inform employees about the dangers of drug abuse in the workplace, the Recipient's policy of maintaining a drug-free workplace, any available Exhibit C

City of San Luis Obispo
Agreement No.: D23'1 2550
Amendment 1
Page27 of47
drug counseling, rehabilitation and employee assistance programs, and penalties that may be imposed upon employees for drug abuse violations. The Recipient shall provide that every employee who works on the Project receives a copy of the Recipient's drugfree workplace policy statement and agrees to abide by the terms of the statement as a condition of employment on the Project.

14. ENVIRONMENTAL CLEARANCE. No work that is subject to California Environmental Quality Act (CEQA) or the National Environmental Policy Act (NEPA) may proceed under this Agreement until the State Water Board has provided approval to proceed.

Upon receipt and review of the Recipient's environmental documents, the State Water Board shall make the appropriate environmental findings before determining whether to approve construction or implementation funding for the Project under this Agreement. Providing approval for such construction or implementation funding is fully discretionary. The State Water Board may require changes in the scope of work or additional mitigation as a condition to providing construction or implementation funding under this Agreement. Recipient shall not perform any work subject to CEQA and/or NEPA before the State Water Board completes its environmental review and specifies any changes in scope or additional mitigation that may be required. Proceeding with work subject to CEQA and/or NEPA without approval by the State Water Board shall constitute a breach of a material provision of this Agreement. lf this Project includes modification of a river or stream channel, the Recipient must fully mitigate environmental impacts resulting from the modification. The Recipient must provide documentation that the environmental impacts resulting from such modification will be fully mitigated considering all of the impacts of the modification and any mitigation, environmental enhancement, and environmental benefit resulting from the Project, and whether, on balance, any environmental enhancement or benefit equals or exceeds any negative environmental impacts of the Project.

15. FINAL REIMBURSEMENT REQUEST. The Recipient agrees to ensure that its final Reimbursement Request is received by the Division no later than the Final Reimbursement Request Date, unless prior approval has been granted by the Division lf the final Reimbursement Request is not received timely, the undisbursed balance of this Agreement may be deobligated.

16. FRAUD AND MISUSE OF PUBLIC FUNDS. All requests for disbursement must be accurate and signed by the Recipient or its Authorized Representative under penalty of perjury. All costs submitted pursuant to this Agreement must only be for the work or tasks set forth in this Agreement. The Recipient must not submit any invoice containing costs that are ineligible or have been reimbursed from other funding sources unless required and specifically noted as such (i.e., match costs). Any costs for which the Recipient is seeking reimbursement shall not be reimbursed from any other source. Double or multiple billing for time, seryices, or any other cost is improper and will not be compensated. Any suspected occurrences of fraud, forgery, embezzlement, theft, or any other misuse of public funds may result in suspension of disbursements and, notwithstanding any other section in this Agreement, the termination of this Exhibit C

City of San Luis Obispo
Agreement No.: D231 2550
Amendment 1

Agreement requiring the immediate repayment of all funds disbursed hereunder. Additionally, the Deputy Director of the Division may request an audit and refer the matter to the Attorney General's Office or the appropriate district attorney's office for criminal prosecution or the imposition of civil liability.

17. FUNDING CONTINGENCY. The State Water Board's disbursement of funds hereunder is contingent on the Recipient's compliance with the terms and conditions of this Agreement. The State Water Board's obligation to disburse funds is contingent upon the availability of sufficient funds to permit the disbursements provided for herein. lf sufficient funds are not available for any reason, including but not limited to failure of the federal or State government to appropriate funds necessary for disbursement of funds, the State Water Board shall not be obligated to make any disbursements to the Recipient under this Agreement. lf this Agreement's funding for any fiscal year expires due to reversion or is reduced, substantially delayed, or deleted by the Budget Act, by Executive Order, or by order or action of the Department of Finance, the State Water Board has the option to either cancel this Agreement with no liability accruing to the State Water Board, or offer an amendment to the Recipient to reflect the reduced amount. This provision shall be construed as a condition precedent to the obligation of the State Water Board to make any disbursements under this Agreement. Nothing in this Agreement shall be construed to provide the Recipient with a right of priority for disbursement over any other entity. lf any disbursements due the Recipient under this Agreement are deferred because sufficient funds are unavailable, it is the intention of the State Water Board that such disbursement will be made to the Recipient when sufficient funds do become available, but this intention is not binding.

18. GOVERNING LAW. This Agreement is governed by and shall be interpreted in accordance with the laws of the State of California.

19. RECIPIENT'S SHARE. The Recipient agrees that it will provide for the payment of its full share, if any share is required, of Project Costs and that all costs connected with the Project will be timely paid by the Recipient.

20.INDEMNIFICATION AND STATE REVIEWS. The parties agree that review or approval of Project plans and specifications by the State Water Board is for administrative purposes only, including conformity with application and eligibility criteria, and expressly not for the purposes of design defect review or construction feasibility, and does not relieve the Recipient of its responsibility to properly plan, design, construct, operate, and maintain the Project. To the extent permitted by law, the Recipient agrees to indemnify, defend, and hold harmless the State Water Board and any trustee, and their officers, employees, and agents for the Bonds, if any (collectively, "lndemnified Persons"), against any loss or liability arising out of any claim or action brought against any lndemnified Persons from and against any and all losses, claims, damages, liabilities, or expenses, of every conceivable kind, character, and nature whatsoever arising out of, resulting from, or in any way connected with (1) the Project or the conditions, occupancy, use, possession, conduct, or management of, work done in or about, or the Exhibit C

City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

planning, design, acquisition, installation, or construction, of the Project or any part thereof; (2) the carrying out of any of the transactions contemplated by this Agreement or any related document; (3) any violation of any applicable law, rule or regulation, any environmental law (including, without limitation, the Federal Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, the California Hazardous Substance Account Act, the Federal Water Pollution Control Act, the Clean Air Act, the Toxic Substances Control Act, the Occupational Safety and Health Act, the Safe Drinking Water Act, the California Hazardous Waste Control Law, and California Water Code Section 13304, and any successors to said laws), rule or regulation or the release of any toxic substance on or near the Project; or (4) any untrue statement or alleged untrue statement of any material fact or omission or alleged omission to state a material fact necessary to make the statements required to be stated therein, in light of the circumstances under which they were made, not misleading with respect to any information provided by the Recipient for use in any disclosure document utilized in connection with any of the transactions contemplated by this Agreement, except those arising from the gross negligence or willful misconduct of the lndemnified Persons. The Recipient must also provide for the defense and indemnification of the lndemnified Persons in any contractual provision extending indemnity to the Recipient in any contract let for the performance of any work under this Agreement, and must cause the lndemnified Persons to be included within the scope of any provision for the indemnification and defense of the Recipient in any contract or subcontract. To the fullest extent permitted by law, the Recipient agrees to pay and discharge any judgment or award entered or made against lndemnified Persons with respect to any such claim or action, and any settlement, compromise or other voluntary resolution. The provisions of this section survive the term of this Agreement.
2I.lNDEPENDENT ACTOR. The Recipient, and its agents and employees, if any, in the performance of this Agreement, shall act in an independent capacity and not as officers employees, or agents of the State Water Board.

22.lNSPECT|ON. Throughout the useful life of the Project, the State Water Board shall have the right to inspect the Project area to ascertain compliance with this Agreement

23.INTEGRATION. This Agreement constitutes the complete and final agreement between the parties. No oral or written understanding or agreement not incorporated in this Agreement shall be binding on either party

24. LIENS. The Recipient must not make any pledge of or place any lien on the Project or Project assets except upon consent of the Division.

25. NO DISCRIMINATION. The Recipient must comply with Government Code section 1 1 135 and the implementing regulations (Cal. Code Regs, tit. 2, S 11140 et seq.), including, but not limited to, ensuring that no person is unlawfully denied full and equal access to the benefits of, or unlawfully subjected to discrimination in the operation of, Exhibit C

City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

the Project on the basis of sex, race, color, religion, ancestry, national origin, ethnic group identification, age, mental disability, physical disability, medical condition, genetic information, marital status, or sexual orientation as such terms are defined under California law, for as long as the Recipient retains ownership or possession of the Project. lf Project Funds are used to acquire or improve real property, the Recipient must include a covenant of nondiscrimination running with the land in the instrument effecting or recording the transfer of such real property. The Recipient must comply with the federalAmerican with Disabilities Act of 1990 and implementing regulations as required by Government Code section 1 1 135(b). The Recipient's obligations under this section shall survive the term of this Agreement. During the performance of this Agreement, Recipient and its contractors and subcontractors must not unlawfully discriminate, harass, or allow harassment against any employee or applicant for employment because of sex, race, color, ancestry, religious creed, national origin, sexual orientation, physical disability (including HIV and AIDS), mental disability, medical condition (cancer), age (over 40), marital status, denial of family care leave, or genetic information, gender, gender identity, gender expression, or military and veteran status. The Recipient, its contractors, and subcontractors must ensure that the evaluation and treatment of their employees and applicants for employment are free from such discrimination and harassment. The Recipient, its contractors, and subcontractors must comply with the provisions of the Fair Employment and Housing Act and the applicable regulations promulgated thereunder. (Gov. Code, $12990, subds. (a)-(f) et seq.;Cal. Code Regs., tit. 2, S 7285 et seq.) Such regulations are incorporated into this Agreement by reference and made a part hereof as if set forth in full. The Recipient, its contractors, and subcontractors must give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. The Recipient must include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under this Agreement.

26. NO THIRD-PARTY RIGHTS. This Agreement creates no rights in and grants no remedies to any third party as a beneficiary of this Agreement.

27. NO OBLIGATION OF THE STATE. Any obligation of the State Water Board herein contained shall not be an obligation, debt, or liability of the State and any such obligation shall be payable solely out of the moneys encumbered pursuant to this Agreement.

28. NON-WAIVER. Nothing in this Agreement shall affect or impair the Recipient's obligation to undertake work under this Agreement or shall affect or impair the right of the State Water Board to bring suit to enforce such work. No delay or omission of the State Water Board in the exercise of any right arising upon an Event of Default shall impair any such right or be construed to be a waiver of any such Event of Default. The State Water Board may exercise from time to time and as often as shall be deemed expedient by the State Water Board, any remedy or right provided by law or pursuant to this Agreement. Any waiver of rights by the State Water Board with respect to a default Exhibit C

City of San Luis Obispo
Agreement No.: D23'1 2550
Amendment 1

or other matter arising under this Agreement at any time shall not be considered a waiver of rights with respect to any other default or matter.

29. OTHER FUNDING SOURCES; INCOME RESTRICTIONS. lf funding for Project Costs is made available to the Recipient from sources other than this Agreement, the Recipient must notify the Division. The Recipient may retain such funding up to an amount which equals the Recipient's contribution to Project costs. To the extent allowed by requirements of other funding sources, excess funding must be remitted to the State Water Board. The Recipient agrees that any refunds, rebates, credits, or other amounts (including any interest thereon) accruing to or received by the Recipient as related to this Agreement must be paid by the Recipient to the State Water Board, to the extent that they are properly allocable to costs for which the Recipient has been reimbursed by the State Water Board under this Agreement.

30. PERMITS AND AUTHORIZATIONS. Recipient must procure all permits, licenses and other authorizations necessary to accomplish the work contemplated in this Agreement, pay all charges and fees, and give all notices necessary and incidental to the due and lawful prosecution of the work. Signed copies of any such permits or licenses must be submitted to the Division before any construction or implementation begins.

Any contractors, outside associates, or consultants required by the Recipient in connection with the services covered by this Agreement shall be limited to such individuals or firms as were specifically identified and agreed to during negotiations for this Agreement, or as are specifically authorized by the State Water Board's Project Manager during the performance of this Agreement. Any substitutions in, or additions to, such contractors, associates, or consultants, shall be subject to the prior written approval of the State Water Board's Project Manager.

31. PREVAILING WAGES. If applicable, the Recipient agrees to be bound by all applicable provisions of State Labor Code regarding prevailing wages. lf applicable, the Recipient must monitor all agreements subject to reimbursement from this Agreement to ensure that the applicable prevailing wage provisions of the State Labor Code are being met.

Division of lndustrial Relations (DlR) requirements may be found at:
htto://www.dir.ca.oov/lcp.asp. For more information, please refer to DIR's Public Works Manual at: httn ://www.dir.ca. clov/d lse/PWMa n ua lCom bi ned. odf

32. PRIOR COSTS. No costs incurred prior to the Eligible Work Start Date are eligible for reimbursement.

33. PROFESSIONALS. The Recipient agrees that only licensed professionals will be used to perform services under this Agreement where such services are called for. All technical reports required pursuant to this Agreement that involve planning, investigation, evaluation, design, or other work requiring interpretation and proper application of engineering, architectural, or geologic sciences, shall be prepared by or under the direction of persons registered to practice in California pursuant to Business Exhibit C

City of San Luis Obispo
Agreement No.. D231 2550
Amendment 1

and Professions Code, sections 5536.1 , 6735, 7835, and 7835.1 . As required by these laws, completed technical reports must bear the signature(s) and seal(s) of the registered professional(s) in a manner such that all work can be clearly attributed to the professional responsible for the work.

34. RECORDS, INSPECTION, AUDITS, AND INTERVIEWS; RECORDS RETENTION. The Recipient must maintain separate books, records and other material relative to the Project and retain such books, records, subcontracts, and other material until at least the Records Retention End Date set forth on the Cover Page of this Agreement. The Recipient must require that such books, records, and other material are subject at all reasonable times (at a minimum during normal business hours) to inspection, copying, and audit by the State Water Board, the Department of Finance, the California State Auditor, the Bureau of State Audits, or any authorized representatives of the aforementioned, including federal funding agencies and their auditors, if any. The Recipient must allow and must require its contractors to allow interviews during normal business hours of any employees who might reasonably have information related to such records. The Recipient agrees to include a similar duty regarding audit, interviews, and records retention in any contract or subcontract related to the performance of this Agreement. The provisions of this section survive the term of this Agreement.

35. RELATED LITIGATION. Under no circumstances may the Recipient use funds from any reimbursement under this Agreement to pay costs associated with any litigation the Recipient pursues against the State Water Board or any Regional Water Board.

Regardless of the outcome of any such litigation, and notwithstanding any conflicting language in this Agreement, the Recipient agrees to complete the Project funded by this Agreement or to repay all of the disbursed funds plus interest.

36. REMEDIES. The State Water Board may enforce its rights under this Agreement by any judicial proceeding, whether at law or in equity. None of the remedies available to the State Water Board shall be exclusive of any other remedy, and each such remedy shall be cumulative and in addition to every other remedy given hereunder or now or hereafter existing at law or in equity The State Water Board may exercise any remedy, now or hereafter existing, without exhausting and without regard to any other remedy.

Any dispute of the Recipient is limited to the rights and remedies provided to the Recipient under this Agreement and is subject to the procedures provided to the Recipient under this Agreement.

37. REPORTS - AS NEEDED. The Recipient must provide expeditiously any reports, data, and information reasonably required by the Division, including but not limited to material necessary or appropriate for evaluation of the funding program or to fulfill any reporting requirements of the State or federal government.

38. RESPONSIBILITY FOR WORK. The Recipient shall be responsible for all work and for persons or entities engaged in work performed pursuant to this Agreement, including, Exhibit C

City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

but not limited to, contractors, subcontractors, suppliers, and providers of services. The Recipient shall be responsible for responding to any and all disputes arising out of its contracts for work on the Project, including, but not limited to, payment disputes with contractors and subcontractors. The State Water Board will not mediate disputes between the Recipient and any other entity concerning responsibility for performance of work.

39. RIGHTS lN DATA. The Recipient agrees that all data, plans, drawings, specifications, reports, computer programs, operating manuals, notes, and other written or graphic work produced in the performance of this Agreement are subject to the rights of the State as set forth in this section. The State shall have the right to reproduce, publish, and use all such work, or any part thereof, in any manner and for any purposes whatsoever and to authorize others to do so. lf any such work is copyrightable, the Recipient may copyright the same, except that, as to any work which is copyrighted by the Recipient, the State reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, and use such work, or any part thereof, and to authorize others to do so, and to receive electronic copies from the Recipient upon request. The Recipient may disclose, disseminate and use in whole or in part, any final form data and information received, collected, and developed under this Agreement, subject to appropriate acknowledgement of credit to the State Water Board for financial support.

The Recipient shall not utilize the materials for any profit-making venture or sell or grant rights to a third party who intends to do so.

40. STATE WATER BOARD ACTION; COSTS AND ATTORNEY FEES. ln the event of litigation between the parties hereto arising from this Agreement, it is agreed that each party shall bear its own costs and attorney fees.

41. STATUS QUO. lf any action to enforce any right or exercise any remedy shall be brought and either discontinued or determined adversely to the State Water Board, then the State Water Board shall be restored to its former position, rights, and remedies as if no such action had been brought.

42.TERMINATION, IMMEDIATE REPAYMENT, AND INTEREST: This Agreement may be terminated by written notice at any time, at the option of the State Water Board, if:
a. the Recipient has received funds as a result of a material misrepresentation in the funding application or other submitted document; or b. upon violation by the Recipient of any material provision of this Agreement after such violation has been called to the attention of the Recipient and after failure of the Recipient to bring itself into compliance with the provisions of this Agreement within a reasonable time as established by the State Water Board. ln the event of such termination, the Recipient agrees, upon demand, to immediately repay to the State Water Board an amount equal to the amount of Project Funds disbursed to the Recipient prior to such termination. ln the event of termination, interest Exhibit C

City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

shall accrue on all amounts due at the highest legal rate of interest from the date that notice of termination is mailed to the Recipient to the date of full repayment by the Recipient.

43.TlMlNG. Time is of the essence. The Recipient must expeditiously proceed with and complete the Project. Failure to proceed according to the timelines set forth in this Agreement may require the Recipient to repay to the State Water Board all disbursed Project Funds.

44.TRAVEL AND PER DIEM. No work or travel outside the State of California is permitted under this Agreement unless the Division provides prior written authorization. No work or travel outside the United States of America is authorized. Failure to comply with this restriction may constitute an Event of Default and result in termination of this Agreement. Any reimbursement for necessary travel and per diem shall be set pursuant to and at rates not to exceed those set by the California Department of Human Resources at httn: /www calhr onrr/em nlovees/Paoes/travel -reimburse mcnfq as,nv AS of the date costs are incurred by the Recipient.

45. UNDISBURSED FUNDS. The Recipient is not entitled to interest earned on undisbursed funds.

46. UNENFORCEABLE PROVISION; SEVERABILITY. ln the event that any provision of this Agreement is unenforceable or held to be unenforceable, then the parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby.

47. UNION ACTIVITIES: The Recipient hereby acknowledges the applicability of Government Code sections 16645 through 16649 to this Agreement. The Recipient certifies that none of the Project Funds will be used to assist, promote, or deter union organizing lf the Recipient incurs costs or makes expenditures to assist, promote, or deter union organizing, the Recipient will maintain records sufficient to show that no reimbursement from Project Funds has been sought for these costs and the Recipient shall provide those records to the Attorney General upon request.

48.VENUE. Any action arising out of this Agreement shall be filed and maintained in the Superior Court in and for the County of Sacramento, California.

49.WAIVER AND RIGHTS OF THE STATE WATER BOARD. Any waiver of rights by the State Water Board with respect to a default or other matter arising under this Agreement at any time shall not be considered a waiver of rights with respect to any other default or matter.

50.WATER CONSERVATION AND EFFICIENCY PROGRAMS: The Recipient acknowledges that it has appropriate water conservation and efficiency programs in place, and that this provision constitutes a condition of this Agreement. A web link with examples of water conservation and efficiency programs is available at:

Exhibit C

City of San Luis Obispo
Agreement No.. D2312550
Amendment 1

htto ://www waterboa rds. ca. oov/waterrio ter issues/oroorams/d rouo hUconservatio n.shtml.

51.WATER DIVERSION AND USE: To the extent applicable, the Recipient has complied with, and shall continue to comply with, the requirements of Water Code, division 2, part

5.1 , section 5100 et seq. for filing statements of water diversion and use.

52. WITH HOLDI NG OF DISBU RSEMENTS AND REI MBU RSEM ENTS. Notwithstand ing any other provision of this Agreement, the State Water Board may withhold all or any portion of the Project Funds upon the occurrence of any of the following events:
a) Failure of the Recipient to maintain reasonable progress on the Project as determined by the Division;
b) Commencement of litigation or a judicial or administrative proceeding related to the Project, or Recipient that the State Water Board determines may impair the timely satisfaction of Recipient's obligations under this Agreement; c) Any investigation by State, local, or federal investigators or auditors, or a grand jury, relating to the Recipient's financial management, accounting procedures, or internal fiscal controls;
d) A material adverse change in the condition of the Recipient, or the Project, that the Division reasonably determines would materially impair the Recipient's ability to satisfy its obligations under this Agreement, or any other event that the Division reasonably determines would materially impair the Recipient's ability to satisfy its obligations under this Agreement;
e) The Recipient's material violation of, or threat to materially violate, any provision of this Agreement;
0 Suspicion of fraud, forgery, embezzlement, theft, or any other misuse of public funds by the Recipient or its employees, or by its contractors or agents directly or indirectly regarding the Project;
g) An event requiring notice under this Agreement; or
h) An Event of Default or an event that the Division determines may become an Event of Default.

Exhibit C

City of San Luis Obispo
Agreement No.: D231 2550
Amendment 1

EXHIBIT D _ SPECIAL CONDITIONS
D.1 DEFINITIONS.

Each capitalized term used in this Agreement has the following meaning "Authorized Representative" means the duly appointed representative of the Recipient as set forth in the certified original of the Recipient's authorizing resolution that designates the Authorized Representative by title. "Completion of Construction" means the date that the work of building and erection of the Project is substantially complete.
"District Office" means District Office of the Division of Drinking Water of the State Water Board.
"Division of Drinking Water" means the Division of Drinking Water of the State Water Board.
"Eligible Work Start Date" means the date set forth on the Cover Page of this Agreement, establishing the date on or after which any costs may be incurred and eligible for reimbursement hereunder.
"Event of Default" means, in addition to the meanings set forth in Exhibit C, the occurrence of any of the following events:
0 A material adverse change in the condition of the Recipient, which the Division reasonably determines would materially impair the Recipient's ability to satisfy its obligations under this Agreement. g) Failure to operate the Project, unless the Division has given its approval for such non-operation;
"Guidelines" means the State Water Board's "Proposition 1 Groundwater Grant Program Guidelines" in effect as of the execution date of this Agreement. "lndirect Costs" means those costs that are incurred for a common or joint purpose benefiting more than one cost objective and are not readily assignable to the Project (i.e., costs that are not directly related to the Project). Examples of lndirect Costs include, but are not limited to: central service costs; general administration of the Recipient; non-project-specific accounting and personnel services performed within the Recipient organization; depreciation or use allowances on buildings and equipment; the costs of operating and maintaining non-project-specific facilities; tuition and conference fees; generic overhead or markup; and taxes.
o
a
o
o
a
a
a
a
Exhibit D

City of San Luis Obispo
Agreement No.: D231 2550
Amendment 1
Page37 of47
o
o
"lnitiation of Construction" means the date that notice to proceed with work is issued for the Project, or, if notice to proceed is not required, the date of commencement of building and erection of the Project.
"Recipient" means City of San Luis Obispo
"Useful Life" means the economically useful life of the Project beginning at Completion of Construction and is set forth in Exhibit A.

D.2 ADDITIONAL REPRESENTATIONS AND WARRANTIES
(a) The Recipient has not made any untrue statement of a material fact in its application for this financial assistance or omitted to state in its application a material fact that makes the statements in its application not misleading. (b) The Recipient agrees to fulfill all assurances, declarations, representations, and commitments in its application, accompanying documents, and communications filed in support of its request for funding under this Agreement.
(c) The execution, delivery, and performance by the Recipient of this Agreement, including all incorporated documents, do not violate any provision of any law or regulation in effect as of the date of execution of this Agreement by the Recipient, or result in any breach or default under any contract, obligation, indenture, or other instrument to which the Recipient is a party or by which the Recipient is bound as of the date of execution of this Agreement by the Recipient.
(d) Except as set forth in this paragraph, there are, as of the date of execution of this Agreement by the Recipient, no pending or, to the Recipient's knowledge, threatened actions, claims, investigations, suits, or proceedings before any governmental authority, court, or administrative agency which may materially affect the financial condition or operations of the Recipient and/or the Project.
(e) There are no proceedings, actions, or offers by a public entity to acquire by purchase or the power of eminent domain any of the real or personal property related to or necessary for the Project.
(f) The Recipient is duly organized and existing and in good standing under the laws of the State of California. The Recipient must at all times maintain its current legal existence and preserve and keep in full force and effect its legal rights and authority. Within the preceding ten (10) years, the Recipient has not failed to demonstrate compliance with state or federal audit disallowances.

Exhibit D

City of San Luis Obispo
Agreement No.: D231 2550
Amendment 1

(g) Any financial statements or other financial documentation of Recipient previously delivered to the State Water Board as of the date(s) set forth in such financial statements or other financial documentation: (a) are materially complete and correct; (b) present fairly the financial condition of the Recipient; and (c) have been prepared in accordance with GAAP.

Since the date(s) of such financial statements or other financial documentation, there has been no material adverse change in the financial condition of the Recipient, nor have any assets or properties reflected on such financial statements or other financial documentation been sold, transferred, assigned, mortgaged, pledged or encumbered, except as previously disclosed in writing by the Recipient and approved in writing by the State Water Board.
(h) The Recipient is current in its continuing disclosure obligations associated with its material debt, if any.
(i)
0)
(t)
(k)
The Recipient has no conflicting or material obligations, except as set forth in this paragraph.

The Recipient has sufficient real or personal property rights necessary for the purposes of this Agreement, not subject to third party revocation, which rights extend at least to the Records Retention End Date of this Agreement, except as disclosed to the State Water Board. The Recipient has disclosed to the State Water Board all proceedings, actions, or offers of which the Recipient has knowledge or belief that may in any way affect the Recipient's ability to access or legally possess all of the property necessary for the purpose of this Agreement, including any proceedings, actions, or offers to lease, purchase, or acquire by eminent domain any of the real or personal property related to or necessary for the Project.

The Recipient legally possesses property access rights to any real or personal property necessary for the purposes of this Agreement for which the Recipient does not legally possess all real or personal property rights.

The Recipient and its principals, contractors, and subcontractors, to the best of the Recipient's knowledge and belief, are not presently debarred, suspended, proposed for debarment, declared ineligible, or othenruise excluded from participation in any work overseen, directed, funded, or administered by the State Water Board program for which this funding is authorized; nor have they engaged or permitted the performance of services covered by this Agreement from parties that are debarred or suspended or otherwise excluded from or ineligible for participation in any work overseen, directed, funded, or administered by the State Water Board program for which this funding is authorized.
(m) [RESERVED]
Exhibit D

City of San Luis Obispo
Agreement No.: D231 2550
Amendment 1

D.3 ACKNOWLEDGEMENTS
The Recipient must include the following acknowledgement in any document, written report, or brochure to be shared with the general public prepared in whole or in part pursuant to this Agreement:
"Funding for this project has been provided in full or in part under Proposition 1 - the Water Quality, Supply, and lnfrastructure lmprovement Act of 2014 through an agreement with the State Water Resources Control Board. The contents of this document do not necessarily reflect the views and policies of the foregoing, nor does mention of trade names or commercial products constitute endorsement or recommendation for use."
D.4 [RESERVED]
D.5 [RESERVEDI
D.6 PROPERTY RIGHTS OPINION
Prior to any request for reimbursement for construction costs related to the production wells and associated well-head treatment under this Agreement, the Recipient must deliver an opinion of counsel satisfactory to the Division's counsel that the Recipient has sufficient property rights in the Project property for the purposes contemplated in the Agreement with respect to any property acquired for the purposes of the Project. No construction funds related to the production wells and associated well-head treatment will be disbursed under this Agreement until the Recipient satisfies this condition.

D.7 RETURN OF FUNDS
Notwithstanding any other provision of this Agreement, if the Division determines that an Event of Default has occurred, the Recipient may be required, upon demand, to immediately return to the State Water Board any grant amounts received pursuant to this Agreement and pay interest at the highest legal rate on all of the foregoing.

D.8 DAMAGES FOR BREACH OF TAX-EXEMPT STATUS.
ln the event that any breach of any of the provisions of this Agreement by the Recipient results in the loss of tax-exempt status for any bonds of the State or any subdivision or agency thereof, or if such breach results in an obligation on the part of the State or any subdivision or agency thereof to reimburse the federal government by reason of any arbitrage profits, the Recipient must immediately reimburse the State or any subdivision or agency thereof in an amount equal to any damages paid by or loss incurred by the State or any subdivision or agency thereof due to such breach.

Exhibit D

City of San Luis Obispo
Agreement No.: D23'1 2550
Amendment 1

D,9 OPERATION AND MAINTENANCE
The Recipient shall sufficiently and properly staff, operate, and maintain the facility and structures constructed or improved as part of the Project throughout the term of this Agreement, consistent with the purposes of this Agreement. The Recipient assumes all operations and maintenance costs of the facilities and structures; the State Water Board shall not be liable for any cost of such maintenance, management or operation.

D.1O INSURANCE
The Recipient will procure and maintain or cause to be maintained insurance on the Project with responsible insurers, or as part of a reasonable system of self-insurance, in such amounts and against such risks (including damage to or destruction of the Project) as are usually covered in connection with systems similar to the Project. Such insurance may be maintained by a self-insurance plan so long as such plan provides for (i) the establishment by the Recipient of a separate segregated self-insurance fund in an amount determined (initially and on at least an annual basis) by an independent insurance consultant experienced in the field of risk management employing accepted actuarial techniques and (ii) the establishment and maintenance of a claims processing and risk management program.
ln the event of any damage to or destruction of the Project caused by the perils covered by such insurance, the net proceeds thereof shall be applied to the reconstruction, repair or replacement of the damaged or destroyed portion of the Project. The Recipient must begin such reconstruction, repair or replacement as expeditiously as possible, and must pay out of such net proceeds all costs and expenses in connection with such reconstruction, repair or replacement so that the same must be completed and the Project must be free and clear of all claims and liens.

Recipient agrees that for any policy of insurance concerning or covering the construction of the Project, it will cause, and will require its contractors and subcontractors to cause, a certificate of insurance to be issued showing the State Water Board, its officers, agents, employees, and servants as additional insured; and must provide the Division with a copy of all such certificates prior to the commencement of construction of the Project.

D.11 CONTINUOUS USE OF PROJECT; NO LEASE, SALE, TRANSFER OF OWNERSHIP, OR DISPOSAL OF PROJECT.

The Recipient agrees that, except as provided in this Agreement, it will not abandon, substantially discontinue use of, lease, sell, transfer ownership of, or dispose of all or a significant part or portion of the Project during the Useful Life of the Project without prior written approval of the Division. Such approval may be conditioned as determined to be appropriate by the Division, including a condition requiring repayment of all disbursed Exhibit D

City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

Project Funds or all or any portion of all remaining funds covered by this Agreement together with accrued interest and any penalty assessments that may be due.

Djz NOTICE
Upon the occurrence of any of the following events, the Recipient must notify the Division's Deputy Director and Project Manager by phone and email within the time specified below:
(a) Within 24 hours, the Recipient must notify the Project Manager by phone and by email and the Division by phone at (916) 327-9978 and by email, [email protected], of any discovery of any potential tribal cultural resource, archaeological or historical resource, or human remains in the Project area. lf there are any applicable provisions of a mitigation, monitoring and reporting program adopted for the project, the Recipient shall comply with such provisions. The Recipient must coordinate with the Division to determine the appropriate course of action necessary to mitigate potential impacts. ln the event of the discovery of human remains during construction of the Project, the Recipient shall cease construction and take other action required by any applicable laws, which may include but are not limited to Health and Safety Code, section 7050.5 and Public Resources Code, section 5097.98.
(b) [RESERVED]
(c) The Recipient must notify the Division and Party Contacts promptly of the occurrence of any of the following events:
(1) Bankruptcy, insolvency, receivership or similar event of the Recipient, or actions taken in anticipation of any of the foregoing; (2) Change of ownership of the Project (no change of ownership may occur without written consent of the Division);
Loss, theft, damage, or impairment to Project;
Events of Default, except as othenruise set forth in this section; (6)
A proceeding or action by a public entity to acquire the Project by power of eminent domain.

Any litigation pending or threatened with respect to the Project or the Recipient's technical, managerial or financial capacity or the Recipient's continued existence, or any judgment or court order relating to such litigation that has a significant effect on the Project or the Recipient;
Consideration of dissolution, or disincorporation;
(3)
(4)
(5)
(7)
Exhibit D

(8)
(e)
(10)
(1 1)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(1e)
City of San Luis Obispo
Agreement No.: D231 2550
Amendment 1

Enforcement actions by or brought on behalf of the State Water Board or Regional Water Board.

The discovery of a false statement of fact or representation made in this Agreement or in the application to the Division for this financial assistance, or in any certification, report, or request for reimbursement made pursuant to this Agreement, by the Recipient, its employees, agents, or contractors.

Any substantial change in scope of the Project. The Recipient must undertake no substantial change in the scope of the Project until prompt written notice of the proposed change has been provided to the Division and the Division has given written approval for the change;
Any circumstance, combination of circumstances, or condition, which is expected to or does delay Work Completion for a period of ninety (90) days or more;
Cessation of all major construction work on the Project where such cessation of work is expected to or does extend for a period of thirty (30) days or more;
Any Project monitoring, demonstration, or other implementation activities required in this Agreement;
Any public or media event publicizing the accomplishments and/or results of this Agreement and provide the opportunity for attendance and participation by state representatives with at least ten (10) working days' notice to the Division;
Any event requiring notice to the Division pursuant to any other provision of this Agreement;
Failure to observe or perform any covenant or comply with any condition in this Agreement;
The award of the prime construction contract for the Project; and the lnitiation of Construction of the Project;
An offer from a public entity to purchase the Project or any portion thereof, or any of the real or personal property related to or necessary for the Project; or
Adverse tax opinions, the issuance by the lnternal Revenue Service or proposed or final determinations of taxability, Notices of Proposed lssue (lRS Form 5701-TEB) or other material notices of determinations with respect to the tax status of any tax-exempt bonds;
Exhibit D

City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

(20) Work Completion and Project Completion
D.13 FRAUD, WASTE, AND ABUSE
The Recipient shall prevent fraud, waste, and the abuse of Project Funds, and shall cooperate in any investigation of such activities that are suspected in connection with this Agreement. The Recipient understands that discovery of any evidence of misrepresentation or fraud related to Reimbursement Requests, invoices, proof of payment of invoices, or other supporting information including, but not limited to, double or multiple billing for time, services, or any other eligible cost, may result in an administrative action by the State Water Board and/or referral to the Attorney General's Office or the applicable District Attorney's Office for appropriate action. The Recipient further understands that any suspected occurrences of false claims, misrepresentation, fraud, forgery, theft or any other misuse of Project Funds may result in withholding of reimbursements and/or the termination of this Agreement requiring the immediate repayment of all Project Funds disbursed hereunder. A person who knowingly makes or causes to be made any false statement, material misrepresentation, or false certification in any submittal may be subject to a civil penalty, criminal fine, or imprisonment. (Wat Code, S 13490 et seq.)
D.14 DISPUTES
The Recipient must continue with the responsibilities under this Agreement during any dispute. The Recipient may, in writing, appeal a staff decision within thirty (30) days to the Deputy Director of the Division or designee, for a final Division decision. The Recipient may appeal a final Division decision to the State Water Board within thirty (30) days. The Office of the Chief Counsel of the State Water Board will prepare a summary of the dispute and make recommendations relative to its final resolution, which will be provided to the State Water Board's Executive Director and each State Water Board Member. Upon the motion of any State Water Board Member, the State Water Board will review and resolve the dispute in the manner determined by the State Water Board.

Should the State Water Board determine not to review the final Division decision, this decision will represent a final agency action on the dispute. This provision does not preclude consideration of legal questions, provided that nothing herein shall be construed to make final the decision of the State Water Board, or any official or representative thereof, on any question of law. This section relating to disputes does not establish an exclusive procedure for resolving claims within the meaning of Government Code sections 930 and 930.4.

D.15 EXECUTIVE ORDER N-6-22
-

RUSSIAN SANCTIONS
On March 4,2022, Governor Gavin Newsom issued Executive Order N-6-22 (the EO) regarding Economic Sanctions against Russia and Russian entities and individuals. "Economic Sanctions" refers to sanctions imposed by the U.S. government in response to Russia's actions in Ukraine, as well as any sanctions imposed under state law. The Exhibit D

City of San Luis Obispo
Agreement No.. D2312550
Amendment 1

EO directs state agencies to terminate contracts with, and to refrain from entering any new contracts with, individuals or entities that are determined to be a target of Economic Sanctions. Accordingly, should the State Water Board determine Recipient is a target of Economic Sanctions or is conducting prohibited transactions with sanctioned individuals or entities, that shall be grounds for termination of this Agreement. The State Water Board shall provide Recipient advance written notice of such termination, allowing Recipient at least 30 calendar days to provide a written response. Termination shall be at the sole discretion of the State Water Board.

The Recipient represents that the Recipient is not a target of economic sanctions imposed in response to Russia's actions in Ukraine imposed by the United States government or the State of California. The Recipient is required to comply with the economic sanctions imposed in response to Russia's actions in Ukraine, including with respect to, but not limited to, the federal executive orders identified in California Executive Order N-6-22, located at https://www.qov.ca.qov/wpco nte nVu o loads I 2022 I 03 I 3.4 .22 ssia-U krai ne-Executive-Order. odf and the sanctions identified on the United States Department of the Treasury website (https://home.treasury.qov/policv-issues/financial-sanctions/sanctions-proorams-andcountrv-information/ukraine-russia-related-sanctions). The Recipient is required to comply with all applicable reporting requirements regarding compliance with the economic sanctions, including, but not limited to, those reporting requirements set forth in California Executive Order N-6-22 for all Recipients with one or more agreements with the State of California with an aggregated value of Five Million Dollars ($5,000,000) or more. Notwithstanding any other provision in this Agreement, failure to comply with the economic sanctions and all applicable reporting requirements may result in termination of this Agreement.

For Recipients with an aggregated agreement value of Five Million Dollars ($5,000,000) or more with the State of California, reporting requirements include, but are not limited to, information related to steps taken in response to Russia's actions in Ukraine, including but not limited to:
(a) Desisting from making any new investments or engaging in financial transactions with Russian institutions or companies that are headquartered or have their principal place of business in Russia; (b) Not transferring technology to Russia or companies that are headquartered or have their principal place of business in Russia; and (c) Direct support to the government and people of Ukraine D.16 STATE PROGRAM REQUIREMENTS
Exhibit D

a
City of San Luis Obispo
Agreement No.: D231 2550
Amendment 1

Eminent Domain Prohibited. (Wat. Code, S 79711.) Where land acquisition is otherwise authorized under this Agreement, Project Funds and Match Contribution shall not be used to acquire land via eminent domain.

Governor's Infrastructure Plan. (Gov. Code, S 13100.) The Recipient shall ensure that the Project shall maintain consistency with section 13100 of the Government Code (five-year infrastructure plan).

Groundwater Monitoring. (Wat. Code, S 10920.) The Recipient shall comply with Water Code section 10920 et seq., which requires groundwater monitoring and reporting of g roundwater elevations.

Remediation Costs Limited. (Wat. Code, 579771.) Project Funds shall not be used to pay any share of the costs of remediation recovered from parties responsible for the contamination of a groundwater storage aquifer, but may be used to pay costs that cannot be recovered from responsible parties. Recipients that have received Project Funds for remediating groundwater storage aquifers shall exercise reasonable efforts to recover the costs of groundwater cleanup from the parties responsible for the contamination. Funds recovered from responsible parties may only be used to fund treatment and remediation activities.

Sustainable Groundwater Management Act (SGMA) Compliance. Wat. Code, $ 10720-10737.8. To the extent required under SGMA, the Recipient shall comply with the following:
o lf, after July 1 ,2017, the Project is or will be located in a non-adjudicated h ig h- or med i um-priority Cal iforn ia Statewide Groundwater Elevation Monitoring (CASGEM) basin, the Recipient shall ensure that a Groundwater Sustainability Agency (GSA) has formed or an alternative has been submitted to DWR. (Wat. Code, S 10735.2 (a)(1)) o lf, after January 31,2020, the Project is or will be located in a nonadjudicated high- or medium-priority CASGEM basin that is subject to critical conditions of overdraft, the Recipient shall ensure that the Project is consistent with an adopted Groundwater Sustainability Plan (GSP). o lf, after January 31,2022, the Project is or will be located in a nonadjudicated high- or medium-priority CASGEM basin that is not subject to critical conditions of overdraft, the Recipient shall ensure that the Project is consistent with an adopted GSP.

Water Quality Compliance. (Wat. Code, S 79707.) The Recipient shall ensure that the Project shall maintain consistency with Division 7 of the Water Code (commencing with section 13000) and Government Code section 13100. a
a
a
a
Exhibit D

D.17 STATE CROSS-CUTTERS
The Recipient represents that, as applicable, it complies and covenants to maintain compliance with the following with respect to all Project Costs for the term of the Agreement.

The California Environmental Quality Act (CEQA), as set forth in Public Resources Code, section 21000 et seq. and in the CEQA Guidelines at Title 14, Division 6, Chapter 3, section 15000 et seq.
a
a
o
City of San Luis Obispo
Agreement No.: D2312550
Amendment 1

Water Quality Monitoring. (Wat. Code, S 79704.) lf water quality monitoring is required as part of the Project, the Recipient shall collect and report water quality monitoring data to the State Water Board in a manner that is compatible and consistent with surface water monitoring data systems or groundwater monitoring data systems administered by the State Water Board.

Wild and Scenic Rivers. (Wat. Code, S 79711.) The Recipient shall ensure that the Project will not have an adverse effect on the values upon which a wild and scenic river or any other river is afforded protections pursuant to the California Wild and Scenic Rivers Act or the federal Wild and Scenic Rivers Act.

Water Conservation requirements, including regulations in Division 3 of Title 23 of the California Code of Regulations.

Monthly Water Diversion Reporting requirements, including requirements set forth in Water Code, section 5103.

Public Works Contractor Registration with Department of lndustrial Relations requirements, including requirements setforth in sections 1725.5 and'1771.1 of the Labor Code.

Volumetric Pricing & Water Meters requirements, including the requirements of Water Code, sections 526 and 527.

Urban Water Management Plan requirements, including the Urban Water Management Planning Act (Water Code, S 10610 et seq.).

Urban Water Demand Management requirements, including the requirements of Water Code, section 10608.56.

Delta Plan Consistency Findings requirements, including the requirements of Water Code, section 85225 and California Code of Regulations, title 23, section 5002.
a
a
o
o
o
o
a
Exhibit D

o
a
a
a
City of San Luis Obispo
Agreement No.: D2312550
Amendment I

Agricultural Water Management Plan Consistency requirements, including the requirements of Water Code, section 10852.

Charter City Project Labor Requirements, including the requirements of Labor Code, section 1782 and Public Contract Code, section 2503.

The Recipient agrees that it will, at all times, comply with and require its contractors and subcontractors to comply with directives or orders issued pursuant to Division 7 of the Water Code.

Regulations in Division 4 of Title 22 of the California Code of Regulations, including but not limited to California Waterworks Standards in Chapter 16, and Lead and Copper regulations in Chapter 17.5.

Exhibit D

Item 5f
Department: 8
Cost Center: 8506
For Agenda of: 6/17/2025
Placement: Consent
Estimated Time: N/A
FROM: Todd Tuggle, Fire Chief
Prepared By: Nicole Vert, Business Analyst
SUBJECT: SURPLUS DESIGNATION OF FIRE FLEET ASSET BY SALE, AUCTION

OR TRADE-IN

RECOMMENDATION
Adopt a draft Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California, Authorizing the Surplus Designation of Fire Fleet Asset and its Sale, Auction or Trade-In” for the Fire Department’s Fleet Asset No.0607, a 2005 Ford Ranger pickup truck, in accordance with the City’s policies and procedures as prescribed in the Financial Management Manual Section 405-L and 480.

POLICY CONTEXT
In compliance with the City’s Financial Management Manual: Section 405-E, “Updated Fleet Vehicle Replacement Policy,” light duty trucks (under 1 ton) should be replaced after 12 years. Section 480-A of the Financial Management Manual provides that the “Council approval is required to declare personal and consumable supplies as surplus with a value of $1,000.” Resolution No. 10052 (2009 Series) requires this be done by resolution.

DISCUSSION
Background
To ensure sustainability of services to the City, the Fire Department maintains a fleet which includes light trucks. These trucks serve the department by towing trailers with equipment or transporting staff when not on front line apparatus.

The Fire Department’s Fleet Asset No. 0607, a 2005 Ford Ranger truck, was placed into service in 2005. Per the City’s Financial Management Manual Section 405-E “Fleet Vehicle Replacement Policy,” light trucks should be replaced after 12-15 years. This truck has surpassed the recommended replacement age, and its aged components have begun to increase in cost and time-consuming repairs. The Fire Department has already purchased the replacement vehicle for this fleet asset, a Chevrolet Silverado and is not

Item 5f
seeking replacement. Staff is therefore recommending that the Council declare the truck as surplus so that staff may dispose of the truck in accordance with the surplus policies of the Financial Management Manual.

Staff has reviewed recent online sales of similar make and model trucks and those have been selling in the range of $2,500 to $6,000. The truck will be listed with an online auction website and staff anticipates the truck will sell in the same price range.

Previous Council or Advisory Body Action
On May 5, 2022, Council approved surplus designation of Fire Fleet Asset No. 0331.

Public Engagement
This item is on the agenda for the June 17, 2025 City Council meeting and will follow all required postings and notifications. The public will have an opportunity to comment on this item at or before the meeting.

ENVIRONMENTAL REVIEW
The California Environmental Protection Agency Quality Act (CEQA) does not apply to the recommended actions in this report, because none of the actions constitute a “Project” under CEQA Guidelines Sec 15378

FISCAL IMPACT
Budgeted: No Budget Year: 2024-25
Funding Identified: Yes/No
Fiscal Analysis:

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

Total $ $ $ $N/A
Staff anticipate the sale or auction of the surplus item will generate an estimated $3,500 in revenue after any associated fees and will increase the “Fleet Sale of Surplus Property” revenue fund.

ALTERNATIVES

Item 5f
Council could deny the surplus designation of the 2005 Ford Ranger. Denying the disposal will result in a further decrease of value of the vehicle and continued costs of maintenance and upkeep.

ATTACHMENT
A – Draft Resolution authorizing the Surplus Designation of Fire Fleet Asset

R ______
RESOLUTION NO. _____ (2025 SERIES)

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

OBISPO, CALIFORNIA, AUTHORIZING THE SURPLUS DESIGNATION

OF FIRE FLEET ASSET AND ITS SALE, AUCTION OR TRADE-IN
WHEREAS, the City of San Luis Obispo acquired Fire Fleet Asset No. 0607, a Ford Ranger truck, in 2005; and
WHEREAS, the City of San Luis Obispo’s Financial Management Manual Section 405-E states light duty trucks should be replaced after twelve (12) years of use, and a Chevrolet Silverado has been purchased as replacement; and WHEREAS, Section 480-A of the Financial Management Manual states, “Council approval is required to declare personal and consumable supplies as surplus with a value of $1,000,” which must be done by adoption of a resolution under Resolution No. 10052 (2009 Series); and
WHEREAS, Fire Fleet Asset No. 0607 has exceeded its useful life and is no longer necessary for City operations and therefore qualifies as surplus under applicable City policy.

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

SECTION 1. The City Council hereby declares Fire Fleet Asset No. 0607 to be surplus to the needs of the City. The City Manager, or their designee, is authorized to dispose of the surplus property in accordance with applicable provisions of City policy.

The method of disposal may include sale, donation, recycling, or other lawful means, as determined to be in the best interest of the City.

Upon motion of Council Member ___________, seconded by Council Member ___________, and on the following roll call vote:

AYES:

NOES:

ABSENT:

Resolution No. _____ (2025 Series) Page 2
R ______
The foregoing resolution was adopted this _____ day of _______________ 2025. ___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________
Teresa Purrington
City Clerk

Item 5g
Department: Community Development
Cost Center: 4006
For Agenda of: 6/17/2025
Placement: Consent
Estimated Time: N/A
FROM: Timmi Tway, Community Development Director
Prepared By: John Rickenbach, Contract Planner and Rachel Cohen, Principal Planner SUBJECT: SECOND READING AND ADOPTION OF ORDINANCE NO. 1747 (2025

SERIES) TO AMEND THE AIRPORT AREA SPECIFIC PLAN TO ALLOW

MIXED-USE RESIDENTIAL DEVELOPMENT WITHIN THE SERVICE

COMMERCIAL (C-S) AND MANUFACTURING (M) ZONES SUBJECT TO

A MINOR OR CONDITIONAL USE PERMIT

RECOMMENDATION
Adopt 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 minor or 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.”

POLICY CONTEXT
The proposed amendments are intended to expand housing opportunities in the City by allowing mixed-use development in areas zoned Service Commercial (C-S) or Manufacturing (M) within the Airport Area Specific Plan (AASP) consistent with many of the City’s goals, policies, and programs outlined in Table 1 below.

Table 1: Major City Goals and General Plan Policy Consistency Goal/Policy/Program Consistency Analysis
Major City Goal
Housing and Homelessness. Support the
expansion of housing options for all, and
continue to facilitate the production of
housing, including the necessary supporting
infrastructure, with an emphasis on affordable
and workforce housing as well as accessibly
connected development. Collaborate with
Consistent. The proposed amendments
allowing mixed-use in the AASP directly
addresses this major city goal by creating an
additional area of the City that can
accommodate housing in the City.

Item 5g
Goal/Policy/Program Consistency Analysis
local non-profit partners, non-governmental
agencies, the county, the state, and federal
governments to advocate for increased
funding and implementation of
comprehensive and effective strategies to
prevent and reduce homelessness.

Work Program Item #3.1.c. Initiate an
update to the Airport Area Specific Plan to
allow mixed-use residential development,
where appropriate and consistent with the
County Airport Land Use Plan.

Consistent. The proposed amendments to
the AASP would fulfill MCG work program
item 3.1.c to allow additional residential
development as part of a mixed-use project
consistent with the ALUP.

General Plan Housing Element
Program 5.5. Update the Zoning
Regulations to allow mixed-use development
within Service Commercial (C-S) and
Manufacturing (M) zones without a use
permit within one year of the adoption of the
Housing Element.

Consistent. Program 5.5 has already been
implemented in C-S and M zones throughout
the City, with the exception of several specific
plan areas, such as the AASP. With the
recent update of the Airport Land Use Plan
(ALUP), there is now an opportunity to
implement this program in the AASP.

However, a Conditional Use Permit (CUP)
would be required subject to specific findings
due to existing conditions in the AASP.

Program 6.13. Consider General Plan
amendments, as projects are proposed, to
rezone commercial, manufacturing, or public
facility zoned areas for higher-density, infill or
mixed-use housing, where compatible with
surrounding development…
Consistent. While Program 6.13 encourages
mixed-use residential development through
amendments to the General Plan (and not to
specific plans), its intent is consistent with the
specific plan amendment currently being
proposed, which would allow for mixed-use
residential development in a substantial
portion of the City where it had not been
previously allowed, and would have a similar
effect to what would occur through a General
Plan amendment.

General Plan Land Use Element
Policy 3.8.5. Mixed Uses. The City
encourages compatible mixed uses in
commercial districts.

Consistent. By allowing for mixed-use
residential development within the Service
Commercial and Manufacturing zones within
the AASP, the project directly implements this
policy.

Item 5g

DISCUSSION
In 2005, the City adopted the Airport Area Specific Plan (AASP) in the southern part of the City surrounding the San Luis Obispo County Regional Airport. The specific plan only included commercial and industrial type uses and development standards based on the regulations outlined in the 2002 San Luis Obispo County Regional Airport’s Airport Land Use Plan (ALUP). In 2021, the Airport Land Use Commission (ALUC) updated the ALUP and removed restrictions to residential development in specific airport safety zones. This update has provided the City an opportunity to consider mixed-use residential projects within the AASP.

In 2020, the City adopted the Housing Element and included Program 5.5 that called for updating the Zoning Regulations “to allow mixed-use within Service Commercial (C-S) and Manufacturing (M) zones without a use permit within one year of the adoption of the Housing Element.” In 2021, the City Council adopted an update to the Zoning Regulations that removed the Conditional Use Permit (CUP) requirement and allowed mixed-use by right in the C-S and M zones. However, updates could not be made to specific plan areas such as the AASP because of the existing 2002 ALUP safety zone and noise contour limitations.

With the update to the ALUP, an update to the Zoning Regulations, and the Major City Goal of Housing and Homelessness, City Council included work program item 3.1.c in the 2023-25 Financial Plan; “Initiate an update to the Airport Area Specific Plan to allow mixed-use residential development, where appropriate and consistent with the County Airport Land Use Plan.” In September 2023, the City received an application from a developer to initiate and implement this task.

As such, the City is proposing to amend the AASP to allow mixed-use development within parcels zoned either Service Commercial (C-S) or Manufacturing (M) in ALUP Safety Zone 6 with a Minor Use Permit (MUP) or a Conditional Use Permit (CUP). A project would be required to demonstrate that it has access to sufficient water and sewer capacity and infrastructure, is fiscally neutral, compatible with nearby uses, consistent with the ALUP, and that there is adequate emergency response. Each project would be subject to environmental review as required by the California Environmental Quality Act (CEQA).

Previous Action and Public Engagement
Airport Land Use Commission – January 15 and February 19, 2025 On January 15, 2025, the project was informally presented to Airport Land Use Commission (ALUC) for preliminary review and formally reviewed on February 19, 2025.

The ALUC found the project to be in conformance with the ALUP, subject to findings and conditions, which have been incorporated into the proposed AASP amendment.

Item 5g
Planning Commission – February 26, 2025
The Planning Commission reviewed the proposed specific plan amendments on February 26, 2025, which incorporated the recommendations of the ALUC. The Planning Commission unanimously recommended that the City Council approve the proposed amendments with a minor edit to the amendment to clarify that emergency response is consistent with the Climate Adaptation and Safety Element (CASE). Public notice was provided for the Planning Commission meeting and the opportunity for public comment was provided during that meeting. No one commented at the Planning Commission meeting.

SLO Chamber of Commerce Economic Development Committee – April 3, 2025 City staff provided a presentation to the Economic Development Committee on the proposed amendments to the AASP and answered questions the committee had about the proposed changes.

City Council – May 6, 2025
The City Council voted 5-0 at the May 6, 2025, public hearing to introduce an ordinance amending the Airport Area Specific Plan to allow mixed-use development in the Service Commercial (C-S) and Manufacturing (M) zones subject to a minor or conditional use permit where appropriate and consistent with the Airport Area Specific Plan. The Ordinance introduced by Council included modifications to specify that a Minor Use Permit (MUP) be required for projects that qualify as a minor or moderate development review and require a Conditional Use Permit (CUP) for projects that qualify as a major development review, consistent with Municipal Code Section 17.106, as presented by staff at the hearing, instead of requiring a Conditional Use Permit for all mixed-use projects. These modifications and associated administrative changes are included in Attachment A, Ordinance No. 1747 (2025 Series). Public notice was provided for the public hearing consistent with the City’s notification procedures. Public comment was received both in writing and during the public meeting held on May 6, 2025.

Public notice for this City Council meeting held on June 17, 2025, has been published in a widely circulated local newspaper, and hearing agendas for this meeting have been posted at City Hall and online, consistent with adopted notification procedures.

CONCURRENCE
Planning Division Staff, as well as the City Attorney’s office, have reviewed the proposed amendments to the AASP and any feedback has been incorporated in the draft ordinance.

ENVIRONMENTAL REVIEW
The Final Programmatic EIR for the Airport Area and Margarita Area Specific Plans and Related Facilities Master Plans (“Final EIR”, or “AASP Final EIR”) addressed future

Item 5g
development within the Airport Area Specific Plan. The Final EIR was certified in September 2003 and has provided the basis for evaluating the impacts of future development within the AASP area. Subsequent amendments to the AASP were subject to separate CEQA evaluations to address the potential impacts stemming from those amendments.

An Addendum to the Final EIR has been prepared to address changes to the approved project, and is included as Attachment G. Pursuant to Section 15164(b) of the CEQA Guidelines, an addendum to an adopted Final EIR may be prepared by the Lead Agency that prepared the original Final EIR if only minor technical changes or additions are necessary or none of the conditions described in Section 15162 have occurred that require preparation of a subsequent EIR. An Addendum is appropriate to address the modified project because the proposed changes to the approved project do not meet the conditions of Section 15162(a) for preparation of a subsequent EIR.

The County of San Luis Obispo Airport Land Use Commission conducted an Initial Study and prepared a Negative Declaration for the 2021 update of its Airport Land Use Plan (ALUP). That environmental document was used in part to inform some of the conclusions contained in the Addendum prepared for the proposed AASP amendment.

FISCAL IMPACT
Budgeted: N/A Budget Year: 2024-25
Funding Identified: N/A
Fiscal Analysis:

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

Total $0 $0 $0 $0
Fiscal Impact of Approving the Specific Plan Amendment
There are no fiscal impacts directly related to approval of the specific plan amendments.

No previously unanticipated fiscal impacts would occur as a result of this action.

Item 5g

ALTERNATIVES

1. Continue the second reading and adoption of the ordinance. An action continuing the project should include direction for staff on pertinent issues that should be further studied or analyzed for future presentation to the Council, with consideration that the Council has provided direction to staff via Work Program Item #3.1.c. to “Initiate an update to the Airport Area Specific Plan to allow mixed-use residential development, where appropriate and consistent with the County Airport Land Use Plan.” If Council pursues this alternative, any modifications to the ordinance would require another introduction at a future Council meeting and a second reading / adoption at another regularly scheduled meeting that follows at least five days after the introduction.

2. Do not adopt the introduced ordinance. The City Council could decide not to adopt the attached Ordinance. Amendments to the AASP are required to be made per Work Program Item #3.1.c. which supports Major City Goals and the City’s General Plan.

Denying the proposed amendments would also provide a barrier to future housing production that will be required by the state. If Council pursues this option, they should provide findings that cite the basis for denial, which should reference inconsistency with Major City Goals, General Plan, or other relevant policy documents.

ATTACHMENTS
A - Ordinance No. 1747 (2025 Series)
B - Addendum to Final EIR

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ORDINANCE NO. 1747 (2025 SERIES)

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 MINOR OR CONDITIONAL USE PERMIT WHERE

APPROPRIATE AND CONSISTENT WITH THE AIRPORT LAND USE

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, AS REPRESENTED IN THE CITY
COUNCIL AGENDA REPORT AND ATTACHMENTS DATED MAY 6,
2025 (SPEC-0457-2023)
WHEREAS, it is a Major City Goal to address housing and homelessness by supporting the expansion of housing options for all, and continue to facilitate the production of housing; and
WHEREAS, the General Plan Land Use and Housing Elements include numerous policies that support the development of additional housing to meet ongoing demand; and WHEREAS, the City has allowed for mixed-use development in Service Commercial (C-S) and Manufacturing (M) zones throughout the City except in the Airport Area Specific Plan (AASP) in order to help address ongoing housing demand; and WHEREAS, the City has not allowed for mixed-use development in C-S and M zones in the AASP because of density and land use restrictions set forth in the 2002 San Luis Obispo County Airport Land Use Plan (ALUP) in effect at the time of the adoption of the AASP in 2005; and
WHEREAS, the San Luis Obispo County Airport Land Use Commission updated the ALUP in 2021 in such a way that provides an opportunity for mixed-use residential development in the C-S and M zones within the AASP; and WHEREAS, the Airport Land Use Commission of the County of San Luis Obispo, upon receipt of a formal referral from the City of San Luis Obispo, conducted a hearing on February 19, 2025, and determined the proposed amendments to the AASP are consistent with the ALUP subject to findings and conditions; and WHEREAS, the Planning Commission of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California on February 26, 2025, and recommended adoption of amendments to the AASP to allow mixed-use development within specified areas of the Service Commercial (C-S) and Manufacturing (M) zones subject to a minor or conditional use permit where appropriate and consistent with the ALUP; and

Ordinance No. 1747 (2025 Series) Page 2
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WHEREAS, the City Council of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California on May 6, 2025, for the purpose of approving amendments to the AASP to allow mixeduse development within specified areas of the Service Commercial (C-S) and Manufacturing (M) zones subject to a minor or conditional use permit where appropriate and consistent with the ALUP; and
WHEREAS, notices of said public hearings were made at the time and in the manner required by law; and
NOW, THEREFORE, the City Council of the City of San Luis Obispo does hereby ordain as follows:

SECTION 1. Findings. Based upon all the evidence in the record, the Council makes the following findings:

1. The proposed amendment to the Airport Area Specific Plan (AASP) is consistent with the intent of the General Plan because it will not result in additional impacts beyond those anticipated in the Airport Area and Margarita Area Specific Plans and Related Facilities Master Plans Final EIR, and because the concept of mixed uses in appropriate locations within the city is supported in multiple policies within the General Plan, notably in the Housing and Land Use Elements.

2. The proposed AASP amendments are intended to allow for mixed-use development consistent with the intent of the General Plan and in a manner generally consistent with how it is considered in C-S and M zones elsewhere in the City.

3. The proposed AASP amendments do not substantively change the policy framework or overall land use, or circulation pattern envisioned in the originally adopted Specific Plan.

4. The proposed AASP amendments will not cause serious health problems, substantial environmental damage, or cause impacts beyond those disclosed in the certified Final EIR and Addendum for this action.

SECTION 2. Environmental Review. An addendum to the certified Final Environmental Impact Report (FEIR) (SCH #2000051062) for the Airport Area and Margarita Area Specific Plans and Related Facilities Master Plans was prepared to address changes to the previously-approved project, pursuant to Section 15164(b) of the CEQA Guidelines, since only minor technical changes or additions are necessary to the certified Final EIR and none of the conditions described in Section 15162 of the CEQA Guidelines have occurred that require preparation of a subsequent EIR.

The project is consistent with the certified Final Environmental Impact Report (FEIR) for Airport Area and Margarita Area Specific Plan and Related Master Plans under the California Environmental Quality Act (CEQA) in conjunction with an Addendum prepared

Ordinance No. 1747 (2025 Series) Page 3
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pursuant to CEQA Guidelines 15164. All mitigation measures adopted as part of the Final EIR that were included in the Airport Area Specific Plan that are applicable to the proposed Specific Plan Amendment (SPA) are carried forward and applied to the proposed SPA to effectively mitigate the impacts that were previously identified.

SECTION 3. Action. The Airport Area Specific Plan is hereby amended as follows:

Chapter 1—Introduction

the page.

Pursuant to Section 15164(b) of the CEQA Guidelines, an Addendum to the Final EIR was prepared to address changes to the Specific Plan Amendment approved in 2025, which allowed mixed-use development in Service Commercial (C-S) and Manufacturing (M) zones subject to a Minor or Conditional Use Permit within the AASP.

In 2025, the AASP was amended to allow mixed-use in the Service Commercial (C-S) and Manufacturing (M) zones subject to a Minor or Conditional Use Permit and findings described in Table 4-3, consistent with the 2021 amended and restated San Luis Obispo County Regional Airport Land Use Plan.

Chapter 3—Conservation and Resource Management

The Airport Land Use Commission adopted a major amendment to the Airport Land Use Plan on May 26, 2021. The amended and restated ALUP provides for noise contours that are tied to aircraft and airport activity that are consistent with adopted federal Terminal Area Forecasts, and on safety zones that are based on and consistent with those described in the Caltrans Airport Land Use Planning Handbook. These revised safety areas and noise contours have the general effect of opening certain areas in the AASP to residential development.

Chapter 4—Land Use

The land use plan was developed to ensure compatibility with airport operations. The designated AASP land uses are consistent with the airport safety areas in the San Luis Obispo County Regional Airport Land Use Plan (ALUP), as amended in 2021. Generally, the critical areas in line with the runway centerlines will be maintained as open space.

Lower intensity warehousing, manufacturing, service, business park and mixed-use development are designated for the less sensitive zones to the sides of the runways, and further out from the ends of the runways.

Ordinance No. 1747 (2025 Series) Page 4
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Use Program and Development Capacities) and all references to Table 4-1 in the entire text of the Specific Plan.

and #10 at the end of the table that refers to the development standards and findings for mixed-use development within the C-S and M zones as written below.

Table 4-3 – Allowed Uses
Key:

A = Allowed
D = Allowed by Administrative Use Permit
PC = Allowed by Planning Commission Use Permit
Land Use
Zoning District

PF C-S M BP
MIXED-USE (also see Footnotes 9 & 10) D/PC D/PC
Footnote:

9. Per the Zoning Regulations, a Minor (Administrative) Use Permit (noted as D in Table 4-3) shall be applied to projects that qualify as a minor or moderate development review and a Conditional Use Permit (noted as PC in Table 4-3) shall be applied to projects that qualify as a major development review. In order to approve a Minor Use Permit or Conditional Use Permit for a mixed-use development in the C-S and M zones, the Community Development Director or the Planning Commission shall find the project consistent with development standards outlined in San Luis Obispo Municipal Code Section 17.70.130 (Mixed-use development) and make the following findings:
1) There is demonstrable water and sewer capacity to serve the project; 2) Any fiscal impact of the project to the City must be offset to achieve fiscal neutrality;
3) There are no nearby uses that generate sufficient air emissions, noise, odors or vibration to create an incompatibility with proposed mixed-use development; 4) Proposed mixed-use residential development is consistent with land use, safety or noise restrictions set forth in the ALUP and any residential portion of a mixed-use development shall be wholly located within Safety Zone 6; and 5) There is adequate emergency response consistent with the Climate Adaptation and Safety Element (CASE).

10. Avigation easements shall be recorded for each property prior to the issuance of a building permit. All owners, potential purchasers, occupants (whether as owners or

Ordinance No. 1747 (2025 Series) Page 5
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renters), and potential occupants (whether as owners or renters) shall receive full and accurate disclosure concerning the noise, safety, or overflight impacts associated with Airport operations prior to entering any contractual obligation to purchase, lease, rent, or otherwise occupy the subject property or properties.

indicate a maximum Floor Area Ratio (FAR) of 1.5 for the C-S and M zones for mixeduse development as shown below.

Table 4-5
San Luis Obispo Airport Area Specific Plan

BUILDING INTENSITY AND COVERAGE STANDARDS
Also See Table 4-6. Limitations on employee and customer concentrations due to airport safety are more restrictive than the standards provided below in most cases and may reduce maximum potential FAR.

Design Standard
Land Use Designation
Business
Park
Service
Commercial Manufacturing
Maximum floor area ratio: mixeduse developmentn/a 1.5 1.5

(b) Parking standards for the residential component of mixed-use projects in the C-S and M zones must be consistent with the parking standards for residential uses as set forth in Section 17.72 of the Zoning Regulations.

Chapter 5—Community Design

In R-3 and R-4 zones, as well as in the residential portions of mixed-use projects, parking bays and garages shall be placed adjacent to non-residential uses or adjacent to noise exposure areas to the extent possible to buffer sound impacts.

Each commercial, industrial loading, outdoor recycling or waste collection area shall be located on the side of a building opposite from parcel lines or street frontages of any land designated for residential use, or for mixed-use projects, separated or screened from the residential portion of the project to the extent possible.

Residential landscape design standards also apply to mixed-use projects within the Service Commercial and Manufacturing land use categories.

Ordinance No. 1747 (2025 Series) Page 6
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Chapter 8—Public Facilities Financing

8.6.4 Fiscal Neutrality
In order to support long-term fiscal solvency for the City General Fund while not overprescribing non-residential uses beyond market and financial feasibility, and while not relying solely on future non-residential uses which are difficult to predict, mixed-use projects will be required to achieve fiscal neutrality. It is recommended that the City implement a Community Facilities District (CFD), similar to the mechanism used for the Avila Ranch development project, that could be applied to the AASP. However, without a CFD or another mechanism that can apply to the entire AASP, fiscal neutrality can also be achieved on a project-by-project basis, through the implementation of Home Owners Associations or similar mechanisms that use fees collected from homeowners to provide public services.

Chapter 9—Implementation

Consistent with required citywide procedures, commercial, industrial, institutional, mixeduse and residential developments will be subject to architectural review.

this section:

All individual development projects within the AASP that require discretionary approval are subject to project-specific environmental review as applicable under the California Environmental Quality Act (CEQA).

SECTION 4. Severability. If any subdivision, paragraph, sentence, clause, or phrase of this Ordinance is, for any reason, held to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect the validity or enforcement of the remaining portions of this Ordinance, or any other provisions of the City’s rules and regulations. It is the City's express intent that each remaining portion would have been adopted irrespective of the fact that any one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared invalid or unenforceable.

SECTION 5. Publication. A summary of this ordinance, together with the names of Council members voting for and against, shall be published at least five (5) days prior to its final passage, in The New Times, a newspaper published and circulated in this City.

This ordinance shall go into effect at the expiration of thirty (30) days after its final passage.

Ordinance No. 1747 (2025 Series) Page 7
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INTRODUCED on the 6
th day of May 2025, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the 17th day of June, 2025, on the following vote:

AYES:

NOES:

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

1 Addendum to the Final Programmatic Environmental Impact Report for the Airport Area and Margarita Area Specific Plans and Related Facilities Master Plans

1. Project Title:

Airport Area Specific Plan Amendment to Allow Mixed-Use Development in the Service Commercial (C-S) and Manufacturing (M) zones subject to the approval of a conditional use permit

2. Lead Agency Name and Address:

City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401

3. Contact Person and Phone Number:

Rachel Cohen, Principal Planner
805-781-7574

4. Project Location:

Airport Area Specific Plan area, generally bounded by South Higuera Street to the west, Meissner Lane to the north, Broad Street to the east, and Buckley Road to the south, in San Luis Obispo, CA

5. Project Applicant and Representative Name and address:

City of San Luis Obispo
Community Development Department
919 Palm Street
San Luis Obispo, CA 93401

6. General Plan Designation:

Services & Manufacturing

7. Zoning:

Service Commercial (C-S) and Manufacturing (M)

2 8. Description of the Project:

The Airport Area Specific Plan (AASP) is a land use program with policies, goals, guidelines and infrastructure financing strategies to guide future development to ensure land use compatibility within the AASP planning area. The AASP was adopted in 2005 and has been amended several times since then in response to changing conditions or opportunities unforeseen at the time of its adoption. The proposed project would amend the AASP to allow for mixed-use development (as defined in the City’s Municipal Code) with a conditional use permit within parcels designated as either Service Commercial (CS) or Manufacturing (M).

The AASP does not currently allow mixed-use development. The underlying reason for this was because of the area’s proximity to the San Luis Obispo County Airport, and the established safety and noise areas that limited or prohibited noise sensitive residential uses or high density residential development. The southern portion of the City at that time was also viewed as the area most appropriate for industrial uses. In 2021, the San Luis Obispo County Airport Land Use Commission (ALUC) amended and restated the Airport Land Use Plan (ALUP) to address new technical information related to safety and noise, which resulted in a refinement of areas subject to land use restrictions under the ALUP, including areas within the AASP. As a result, there is now substantial area within the AASP where the land use restrictions have changed related to airport safety and noise, and creates opportunities for mixed-use developments.

No development would occur directly as a result of this action, which is simply a modification of existing land use requirements under the AASP. Future development under the modified land use requirements could occur as a result of individual project applications that must be approved by the City of San Luis Obispo through its normal development and conditional use permit review processes. However, the magnitude and timing of such development is speculative at this time, and would be influenced by a variety of issues, including market demand, property owner desire to develop, consistency with the ALUP, and potential environmental constraints that may apply to specific parcels where project development applications are under consideration.

The Project Area includes all parcels designated as Service Commercial (C-S) or Manufacturing (M) within the 1,200-acre AASP planning area. Figure 1 shows the location of C-S and M designated parcels within the AASP.

9. Project Entitlements Requested:

No project-level entitlements are requested or would occur as a result of this action.

Instead, the resulting amendment would allow mixed-use development, subject to specific findings, with a conditional use permit in portions of the Airport Area Specific Plan currently designated as Service Commercial (C-S) and Manufacturing (M), consistent with the requirements of the City’s Zoning Regulations, as they currently apply to C-S and M

3 designated lands in the remainder of the City. The reason this amendment is necessary is because as currently written, the AASP does not allow mixed-use development.

Figure 1: Existing Land Use Designations in the Airport Area Specific Plan Development under the modified land use requirements would result from individual project applications that must be approved by the City of San Luis Obispo through its normal development and conditional use permit review processes. Proposed modifications to the Airport Area Specific Plan are described below in detail under the heading “New Information and Updated Project Elements.”

10. Previous Environmental Review:

The Final Programmatic EIR for the Airport Area and Margarita Area Specific Plans and Related Facilities Master Plans (“Final EIR”, or “AASP Final EIR”) addressed future development within the Airport Area Specific Plan. The Final EIR was certified in September 2003, and has provided the basis for evaluating the impacts of future development within the AASP area. Subsequent amendments to the AASP were subject to separate CEQA evaluations to address the potential impacts stemming from those amendments. In a similar manner, the analysis in this Addendum tiers from the original Final EIR.

4 Individual projects that may be proposed under the AASP as amended would be subject to review under the California Environmental Quality Act (CEQA) as appropriate on a project-by-project basis.

The County of San Luis Obispo Airport Land Use Commission conducted an Initial Study and prepared a Negative Declaration for the 2021 update of its Airport Land Use Plan (ALUP) (SCH: 2021030474). That environmental document was used to inform the conclusions contained in this addendum.

11. Purpose of the Addendum:

Section 15164 of the State CEQA Guidelines allows a lead agency to prepare an addendum to a Final EIR when only “minor technical changes or additions” are necessary to address the effects of a minor change to the approved project since the Final EIR was certified. In addition, the lead agency is required to explain its decision not to prepare a subsequent EIR pursuant to State CEQA Guidelines Section 15162, which requires subsequent EIRs when proposed changes would require major revisions to the previous EIR “due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects.” Subsequent to certification of the AASP Final EIR, additional information has been identified which provides a more consistent Citywide approach to mixed-use development, specifically as it is allowed in the C-S and M zones. In 2021, the San Luis Obispo County Airport Land Use Commission (ALUC) updated its Airport Land Use Plan (ALUP) to address new technical information related to safety and noise, which resulted in a refinement of areas subject to land use restrictions under the ALUP and has created opportunities for mixed-use developments within the AASP. The proposed action requires an amendment to the AASP to allow for mixed-use in the C-S and M zones subject to a Conditional Use Permit. This project is described in more detail in subsequent sections of this EIR Addendum.

The purpose of this Addendum is to document the proposed change to the AASP, and to confirm that this change would not result in any new or more severe significant environmental effects not previously analyzed in the Final EIR, and would not modify any existing mitigation requirements described in that document.

The evaluation below discusses the issue areas that are relevant to this Addendum and covered by the previously approved Final EIR. The evaluation concludes that no new environmental effects are created and that there is no increase in the severity of previously identified significant effects.

5 12. Addendum Requirements:

Pursuant to Section 21166 of CEQA and Section 15162 of the State CEQA Guidelines, when a lead agency has adopted an EIR for a project, a subsequent EIR does not need to be prepared for the project unless the lead agency determines that one or more of the following conditions are met:

1. Substantial project changes are proposed that will require major revisions of the previous EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects;

2. Substantial changes would occur with respect to the circumstances under which the project is undertaken that require major revisions to the previous EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; or

3. New information of substantial importance that was not known and could not have been known with the exercise of reasonable diligence at the time the previous EIR was adopted shows any of the following:
a. The project will have one or more significant effects not discussed in the previous EIR; or
b. Significant effects previously examined will be substantially more severe than identified in the previous EIR; or
c. Mitigation measures or alternatives previously found not to be feasible would in fact be feasible, and would substantially reduce one or more significant effects of the project, but the project proponent declines to adopt the mitigation measures or alternatives; or
d. Mitigation measures or alternatives that are considerably different from those analyzed in the previous EIR would substantially reduce one or more significant effects on the environment, but the project proponent declines to adopt the mitigation measures or alternatives.

Preparation of an Addendum to an EIR is appropriate when none of the conditions specified in Section 15162 (above) are present and some minor technical changes to the previously certified EIR are necessary to address minor changes to an approved project.

Because the new information would not result in any new or more severe significant impacts, an Addendum is the appropriate CEQA document.

6 CURRENT REGULATORY FRAMEWORK FOR C-S AND M ZONES
San Luis Obispo County Airport Land Use Plan
Mixed-use development was not originally allowed at the time of the AASP’s adoption in 2005 because of the area’s proximity to the San Luis Obispo County Airport, and the established safety and noise areas that limited or prohibited noise sensitive residential uses or high density residential development. The southern portion of the City at that time was also viewed as the area most appropriate for industrial uses. In 2021, the San Luis Obispo County Airport Land Use Commission (ALUC) updated its Airport Land Use Plan (ALUP) to address new technical information related to safety and noise, which resulted in a refinement of areas subject to land use restrictions under the ALUP, including areas within the AASP. As a result, there is now substantial area within the AASP where the land use restrictions have changed related to airport safety and noise and creates opportunities for mixed-use developments..

Current AASP Requirements
For the reasons described above related to the ALUP, the AASP does not currently allow mixeduse development in either the Service Commercial (C-S) or Manufacturing (M) zones. As stated in Section 4.2.2 of the AASP, “areas designated Service Commercial are generally for storage, transportation, and wholesaling type uses, as well as certain retail sales and business services that may be less appropriate in other commercial designations.” Similarly, Section 4.2.3 summarizes the intent of the Manufacturing designation as areas “for assembly, fabrication, storage and distribution, and sales and service type uses that have little or no direct trade with local consumers.”
Table 4-3 of the AASP shows the allowed uses within each land use designation. Mixed-use is not allowed under either designation.

Other Relevant Regulatory Setting
There is an existing regulatory framework for allowing mixed-use in non-residential zones Citywide. Mixed-use development is allowed in the C-S and M zones in all parts of the City except within the AASP and other specific plan areas. Within both designations, the Zoning Regulations allow for residential development up to 24 density units per acre (Municipal Code Sections 17.36.020 and 17.40.020).

Final Environmental Impact Report
The 2003 Final EIR examined the policy framework and conceptual development under the AASP at a programmatic level. That document did not include project-specific analysis of the parcels potentially impacted by the proposed action. The FEIR impact analysis was general, and any required mitigation for key issue areas was programmatic, in consideration of cumulative development that might occur under the AASP. Please refer to the section below entitled “Analysis Of The Proposed Project In The Context Of The Final EIR” for further discussion of relevant issues and how they relate to the proposed Specific Plan Amendment

7 NEW INFORMATION AND UPDATED PROJECT ELEMENTS

NEWLY DISCOVERED INFORMATION
In recent years, the demand for housing in general, and affordable housing in particular, has risen dramatically in San Luis Obispo, as it has elsewhere. In response, the City’s 2014 General Plan Land Use Element update reflects this increased demand, and includes several large areas for increased residential development, projects that have since been approved and are in the process of being completed. At the same time, the City has tried to address these issues by supporting mixed-use development, in areas where demand for non-residential development in Service Commercial or Manufacturing designated land has declined. The result is that the City allows mixed-use by right in the C-S and M zones outside the AASP. However, the AASP does not allow mixed-use development, because of previous safety and noise restrictions included in the ALUP. As described above, the 2021 update of the ALUP removed those restrictions that limited or prohibited mixed-use development.

The proposed project responds to the changes in the ALUP and increased housing demand in an evolving market by allowing for mixed-use development in the C-S and M land use designations in the AASP with the approval of a conditional use permit.

As discussed previously, the underlying reason why mixed-use development was not allowed in the AASP is because of the area’s proximity to the San Luis Obispo County Airport, and safety and noise conflicts that could arise if residential development were allowed. In 2021, the San Luis Obispo County Airport Land Use Commission (ALUC) updated its Airport Land Use Plan (ALUP) to address new technical information related to safety and noise, which resulted in a refinement of areas subject to land use restrictions under the ALUP, including areas within the AASP. As a result, there is substantial area where the land use restrictions have changed related to airport safety and noise.

CHANGED BASELINE CONDITIONS AND UPDATED PROJECT ELEMENTS The proposed project would amend the AASP, modifying various aspects of the plan in order to facilitate mixed-use development with approval of a conditional use permit in the C-S and M land use designations. It would not change any existing land use designation, nor would it result in more or less land designated as either C-S or M. Instead, it would modify existing language and tables in various parts of the existing AASP in order to facilitate mixed-use within these land use designations.

A detailed land use inventory was prepared in 2024 to verify the amount of C-S or M designated lands within the planning area. Table 1 below summarizes the results of the 2024 land use inventory for each designation, showing the total acreage of vacant and developed parcels in these two land use designations.

8 Table 1. Summary of 2024 Land Use Inventory
C-S and M Parcels in the AASP
Land Use Designation
Acreage
Developed
(or entitled)
Vacant Total
Service Commercial (C-S) 140.4 85.6 226.0
Manufacturing (M) 94.7 20.4 115.1
Total 235.1 106.0 341.1
Portions of land designated as either C-S or M are constrained from considering mixed-use development. Some of this constrained area remains within airport land use safety zones under the ALUP that do not allow for residential uses. Other parcels are too small or configured in such a way to make development challenging. Depending on the location, a variety of environmental constraints could present other challenges, including drainage features, steep slopes, or the potential for sensitive biological or cultural resources. Some parcels are adjacent to existing industrial land uses that produce odors or noise, which could make them less attractive for mixeduse development. Finally, many of these parcels are already developed with other uses, or are entitled for development. It is likely that only a few of these more constrained parcels will eventually support mixed-use development.

There is no specific mixed-use development project proposed at this time, but the amendment would allow the City to process and potentially approve applications that propose such development. However, the magnitude and timing of such development cannot be known at this time, and would be influenced by a variety of issues, including market demand, property owner desire to develop, and potential environmental constraints that may apply to specific parcels where project development applications are under consideration. For these reasons, it is speculative to determine what the residential buildout potential of this action is at this time, or how it might alter the non-residential buildout assumptions made in the AASP.

If mixed-use development were to occur, it would be based on the maximum density currently allowed under the Zoning Regulations, which is 24 density units per acre.

ANALYSIS OF THE PROPOSED PROJECT IN THE CONTEXT OF THE FINAL EIR The updated project elements described above were not considered in the 2003 Final EIR, and so are analyzed here. The 2003 Final EIR examined the policy framework and conceptual development under the AASP at a programmatic level, which is also appropriate for the currently proposed Specific Plan Amendment. The following analysis examines the proposed project based on relevant issues from the 2003 Final EIR, with references to FEIR impact statements as appropriate. Implementation of the proposed project would not change any of the conclusions in the Final EIR, the level of significance or severity of any previously identified impact, or introduce any new mitigation measures. No changes to the Final EIR are required.

Land Use

9 The FEIR identifies the following land use impacts that are relevant to the proposed Specific Plan Amendment. As discussed in Impact LU-3, the Final EIR found the AASP was consistent with the ALUP in effect at the time of adoption of the AASP. No significant impacts were identified, and no mitigation was required. The Specific Plan amendment would allow for mixeduse development with approval of a conditional use permit, subject to potential constraints contained in the 2021 ALUP update. The County’s environmental document for the 2021 update (SCH 2021030474) concluded that there would be no land use impacts or hazards associated with allowing more intensive development in the AASP, or mixed-use or residential projects in the ALUP area if development regulations in the ALUP were complied with. Individual development projects within the AASP would need to be consistent with any land use restrictions set forth in the ALUP. No new impact would occur.

Impact LU-4 discussed compatibility with surrounding land uses. No conflicts with surrounding uses were identified in the AASP, so impacts were less than significant, and no mitigation was required. Individual development projects within the AASP would need to be compatible with adjacent development, a determination that would be made through development and conditional use permit review processes and project-specific CEQA analysis for any such future action. No new programmatic impacts would occur.

Hydrology and Water Quality
Impact H-5 discussed exposure of people and/or property to flood hazards. The FEIR found that the conversion of land to urban uses has the potential to increase flooding hazards if new buildings were constructed within the 100-year flood hazard area. However, the specific plan includes explicit requirements for flood channel improvements that will avoid flooding impacts by providing enhanced control of floodwaters. This impact was considered less than significant.

Mixed-use development would be evaluated individually under CEQA, and would be required to comply with existing regulations related to flood hazards and water quality. No new programmatic impacts would occur, nor would there be an increase in severity of any existing impact.

Traffic and Circulation
Since the time the AASP FEIR was prepared, CEQA analysis related to this issue has been modified considerably. The focus of CEQA review is now based primarily on a study of Vehicle Miles Traveled (VMT), which can have potential impacts on regional air quality and greenhouse gas emissions. These issues were not examined in the Final EIR.

One purpose of mixed-use development is to reduce commute distances between residences and work places. In some cases, mixed-use development could make it possible for some residents to walk to work, which would potentially reduce VMT. In those instances, there would be a net positive effect on greenhouse gas emissions and air quality relative to what would otherwise happen under the AASP. Future individual development projects within the AASP would be evaluated on a case by case basis through a project-specific CEQA analysis. No new programmatic impacts related to these issues would occur.

10 Other transportation issues that were studied in the FEIR related to roadway Levels of Service (LOS), which is a metric no longer considered in CEQA documents. Instead, these are issues that would be appropriately addressed through the development and conditional use permit review processes, with recommendations for potential roadway improvement made through engineering studies.

Air Quality
The FEIR identified impacts related to both short-term construction emissions and long-term operations emissions. Short-term construction emissions were found to be significant but mitigable at a programmatic level, with mitigation taking the form of following a variety of standard construction management techniques and following the existing regulatory framework set forth by the Air Pollution Control District (APCD). The impacts of specific development projects would be analyzed and mitigated as needed on a case by case basis.

Similarly, long-term operational impacts were also found to be less than significant with programmatic mitigation. The FEIR included the following relevant mitigation measure:

Mitigation Measure AIR-2.1. Implement Growth-Phasing Schedule. The City will implement a growth-phasing schedule for the Airport area, to assure that nonresidential development in the urban area does not exceed the pace of residential development.

The consideration of mixed-use development in the Airport Area is consistent with this mitigation requirement, as it allows for greater flexibility and opportunities to approve residential development in balance with non-residential development. Future individual development projects within the AASP would be evaluated on a case by case basis through a project-specific CEQA analysis. No new programmatic impacts related to this issue would occur.

Noise
The FEIR examined relevant programmatic impacts related to traffic and aircraft noise, but found them to be less than significant. For aircraft noise, this was because future development under the AASP was determined to be consistent with the ALUP. For traffic noise, it was determined that the City’s General Plan Noise Element included sufficient implementation requirements and strategies to ensure that noise would be mitigated on a project-by-project basis as appropriate, through the recommendations of project-specific noise studies. Future individual development projects within the AASP would be evaluated on a case by case basis through a project-specific CEQA analysis. The County’s environmental document for the 2021 update (SCH 2021030474) concluded that there would be no noise impacts or hazards associated with allowing more intensive development in the AASP, including mixed-use or residential projects in the ALUP area, if development regulations in the ALUP were complied with. No new programmatic impacts related to this issue would occur.

Public Services and Utilities
The FEIR examined potential programmatic impacts related to the provision of water and wastewater services from buildout under the AASP, but concluded these would be less than significant because projects would be required to follow the regulatory provisions included in the

11 General Plan, AASP and relevant utilities master plans. Similarly, programmatic impacts related to storm drainage were considered less than significant because projects would be required to follow the provisions of the Storm Drain Master Plan. Impacts related to solid waste disposal were also considered less than significant, as projects would be required to follow regulatory provisions included in the General Plan and AASP.

Impacts related to law enforcement were considered less than significant, as future staffing and facilities would be addressed through fiscal studies as needed. Impacts to fire protection services were also considered less than significant with the following mitigation measure:

PS-1. New Fire Protection Personnel. To mitigate the impacts associated with buildout of the [AASP], a sufficient number of fire protection personnel should be hired to maintain a ratio of one firefighter for every 1,000 residents.

Determining the appropriate level of public services staff is typically addressed in the City’s annual budget cycles, with recommendations resulting from studies to service impacts that are projected to occur based on reasonably foreseeable cumulative development. The proposed project does not facilitate any specific development project, so the magnitude of potential longterm impacts to public services is speculative, and would be addressed on a case-by-case basis as development projects are proposed. No new programmatic impacts related to this issue would occur.

Impacts to schools were found to be less than significant. Mitigation is limited to the payment of statutory fees, and no additional school-related impact fees may be imposed above the limits established in statute (Government Code Section 65595 et seq). No new programmatic impacts related to this issue would occur.

Impacts to parks and recreation were found to be less than significant, as buildout of the AASP would not increase demand over the established park service standard of 10 acres per 1,000 residents. The amount of residential development that might occur under the mixed-use provisions of the project is speculative, and would be limited by a combination of market factors, property owner desire, lot configuration, and environmental constraints. Impacts to parks and recreation would be considered on a case by case basis as individual development projects are proposed. No new programmatic impacts related to this issue would occur.

Other Issues
The proposed project would not introduce new development into areas that were not already planned for urban uses. Therefore, for all other issues related to resource protection (biological resources, cultural resources, agricultural resources, and the exposure to hazardous materials), the potential impact of new development would not change, so the existing impact analysis for each issue would also remain unchanged. No new programmatic impacts related to these issues would occur.

12 DETERMINATION
In accordance with Section 15164 of the State CEQA Guidelines, the City of San Luis Obispo has determined that this Addendum to the certified Final EIR is necessary to document changes or additions that have occurred since the Final EIR was originally certified. Based on the analysis of the proposed project, no new changes to the Final EIR are required. The proposed project would not result in any new significant environmental effects or a substantial increase in the severity of previously identified significant effects. Additionally, no new information of substantial importance that was not known and could not have been known with the exercise of reasonable diligence at the time the previous Final EIR was adopted has been identified.

The preparation of a subsequent environmental document is not necessary because:

1. None of the circumstances included in Section 15162 of the CEQA Guidelines have occurred which require a subsequent environmental document:
a. The project changes do not result in new or substantially more severe environmental impacts.
b. The circumstances under which the project is undertaken will not require major changes to the IS/MND.
c. The modified project does not require any substantive changes to previously approved mitigation measures.

2. The changes are consistent with City General Plan goals and polices that promote provision of additional housing, particularly affordable housing, within the City.

3. The changes are consistent with City goals related to mixed-use that would encourage alternative forms of transportation and reduce Vehicle Miles Traveled (VMT), which relates to reducing air emissions, including greenhouse gas emissions.

The City has reviewed and considered the information contained in this Addendum and finds that the preparation of subsequent CEQA analysis that would require public circulation is not necessary. This Addendum does not require circulation because it does not provide significant new information that changes the adopted Final EIR in a way that deprives the public of a meaningful opportunity to comment upon a substantial adverse environmental effect of the project or a feasible way to mitigate or avoid such an effect. The City shall consider this Addendum with the certified Final EIR as part of the basis for potential approval of the proposed Specific Plan Amendment.

City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: June 17, 2025
TO: Mayor and Council
FROM: Scott Collins, Assistant City Manager
Prepared By: Alex Fuchs, Mobility Services Business Manager VIA: Whitney McDonald, City Manager
SUBJECT: ITEM 5h - APPROPRIATE GRANT FUNDS TO TRANSIT PROGRAM

CAPITAL PROJECTS
Staff received the following questions, regarding the management and tracking of grants funds used to subsidize the Transit Fund. The questions are below with staff’s response shown in italics:
1) On page 139, the section discussing LCTOP and SB1 (SGR) funds mentions these funds were not appropriated for one and three years, respectively.

Provide additional information regarding this.

The current Mobility Services Business Manager has overseen the Transit Program for the past two years. Prior to that, the role was filled on an interim, parttime basis for two years, and before that, it was managed by a different individual.

Due to this turnover in program leadership, some key information and institutional knowledge were not fully transferred. As staff conducted a thorough review of the Transit Fund over the past year, two funding sources—LCTOP and SB1 (SGR)— were identified that had been awarded but not yet formally appropriated.

This Council item corrects that oversight by appropriating the funds, ensuring they are now reflected in the budget as intended. Ideally, the grant funds would be appropriated annually as soon as the final apportionment amounts are determined.

Staff recognize the importance of accurate and timely grant management and are taking steps to improve continuity and tracking moving forward, including development of a Standard Operating Procedure for active federal grants, a list of annual transit program activities and key dates, and cataloging of prior Council actions.

Appropriate Grant Funds to Transit Program Capital Projects Page 2 2) On page 141, there is a reference to a SB1 (SGR) grant that was identified but never submitted. Provide additional information regarding this.

Transit operations are highly reliant on grant funding to support both ongoing services and capital investments. Because service delivery must remain consistent, the Transit budget must balance predictability with flexibility.

It is standard practice to identify specific grant sources within the budget; however, these may shift during the fiscal year. In some cases, a grant application may not be successful, or a different funding source may become available that is a better fit for a specific project. Additionally, many grant programs—whether competitive or formula-based—initially provide estimated funding amounts, which are often revised as the year progresses.

As a result, the Transit budget reflects the best available information at the time it is presented to Council and the public. In some instances, this includes funding from competitive grants that staff believe are likely to be awarded. If those grants are not awarded or are funded at a lower level than anticipated, the budget will need to be revisited and adjusted accordingly during the fiscal year.

This is the scenario for the SB1 (SGR) grant funds referenced on page 141. These funds were originally identified as a potential competitive source to cover the design costs for the Bus Yard Parking Lot Maintenance project. However, the City ultimately secured an alternative funding source through FTA Section 5307, and there are sufficient TDA funds available to meet the local match requirement. 3) What is the current process for tracking grant applications and appropriation deadlines? Is there a particular system or software that could help streamline and manage this more effectively?
All transit-related grants are currently tracked using a series of spreadsheets aligned with the requirements of each administering agency. These spreadsheets typically include application and award dates, associated expenses, balance of remaining funds, etc. This approach is consistent with practices used by many other agencies. However, staff continue to evaluate best practices and industry standards and are open to refining our tracking methods. As part of this effort, staff may explore grant management software solutions to improve efficiency and oversight.

Item 5h
Department: Public Works
Cost Center: 9501
For Agenda of: 6/17/2025
Placement: Consent
Estimated Time: N/A
FROM: Scott Collins, Assistant City Manager
Prepared By: Alex Fuchs, Mobility Services Business Manager SUBJECT: APPROPRIATE GRANT FUNDS TO TRANSIT PROGRAM CAPITAL

PROJECTS

RECOMMENDATION
Adopt a Draft Resolution entitled, “A Resolution by the City Council of the City of San Luis Obispo, California, approving the appropriation of federal and state grant funds to Transit program capital projects.”

REPORT-IN-BRIEF
The Transit Fund is one of four enterprise funds within the City and relies heavily on grant opportunities and rebate programs to fund capital projects. The City has an obligation to make the best use of awarded grant funds to the extent allowed by the administrating agencies. The recommended action of this report accomplishes three grant related activities to make the best use of federal and state funds available to the City for transit program capital projects.

First, staff recommends that remaining federal and state grant dollars from a recently completed project be reappropriated to eligible Transit program projects to meet the requirements of their respective guidance documents. Second, staff recently executed a grant with the Federal Transit Administration (FTA) to fund several capital projects. These grant dollars now need to be appropriated to their associated project budgets. Third, state grant program funds awarded to the City in prior fiscal years need to be appropriated so that those funds can be expended in a timely manner as required by the administrating agencies.

Staff is recommending adopting a Draft Resolution (Attachment A) appropriating federal and state grant funds to Transit program capital projects as described in this report to accomplish these activities.

POLICY CONTEXT
Appropriation of grant funds to associated capital projects as detailed in this report are consistent with the City’s proposed 2025-27 Financial Plan Major City Goal for Infrastructure and Sustainable Transportation. Funding these capital projects is also

Item 5h
necessary to implement recommendations of the SLO Transit Innovations Study and SLO Transit’s Zero Emission Bus Rollout Plan.

Because each of the recommended actions of this report relate to appropriation of previously-received grant funds and/or reappropriation of leftover funds from completed projects, they do not affect projects presented in the 2025-27 Financial Plan or the draft Capital Improvement Plan (CIP); however, the action is consistent with the Major City Goal of Infrastructure and Sustainable Transportation which supports policies and programs aimed at expanding mass transportation and public transit.

Financial Management Manual Policy 740 requires that the City Council approve grant applications greater than or equal to $5,000. However, due to the often limited time given to apply for grants and the Transit program’s heavy reliance on grants to fund operations and capital projects, in 2022 City Council adopted Resolution No. 11330 authorizing the Public Works Director to apply for future transit related funding opportunities and to execute related documents on behalf of the City.

DISCUSSION
Reappropriation of Completed Project Funds
Staff recently closed Project No. 2000058 (Bus Replacements) for the purchase of two battery electric buses. This project was partially funded by the state’s Hybrid and ZeroEmission Truck and Bus Voucher Incentive Project (HVIP) program, which applies pointof-sale discounts to HVIP-eligible vehicle purchases. Both buses were eligible to participate in the program, and the City received a discount that was applied directly to the invoices from the respective bus manufacturers. These vouchers resulted in a savings of federal and state grant dollars for the project as shown in Table 1.

Table 1: Project No. 2000058 (Bus Replacements) Remaining Funds Funding Source Amount
FTA Section 5307 $ 135,909
SB 1 (SGR) $ 150,325
Low Carbon
Transit Operations
Program (LCTOP)
$ 69,156
Total $ 355,390
If the funds are not reappropriated, then the City will lose access to the remaining federal funds and will have to reimburse the state for unexpended funds already disbursed. The grant program guidelines for these funds have criteria identifying when the funds can be reassigned to other eligible projects. Staff is recommending these remaining funds be reassigned to eligible Transit program projects. Otherwise, the federal grant funds will be de-obligated and unavailable to the City for future projects and the state grants funds will need to be returned to the administrating agency for reprogramming.

Item 5h
Appropriation of Federal Grant Dollars
In November 2024, under the authorization vested by Resolution No. 11330, staff submitted an application to the Federal Transit Administration (FTA) using Section 5307 formula grant funds for three capital improvement plan projects and for preventive maintenance of revenue vehicles1 as shown in Table 2. The TDA funds and SB 125 grant funds shown in Table 2 provide the matching local funds as required by the FTA. The application was approved at the end of March 2025, grant CA-2025-050 was created and is available for the City to begin incurring eligible expenses.

Table 2: FTA Section 5307 Grant Fund Breakdown by Project FTA 5307 Grant TDA Funds SB 125 Grant Total
Project No. 1000102
(Bus Yard Parking Lot
Maintenance)
$ 60,000 $ 15,000 $ 0 $ 75,000
Project No. 2000404
(Auto Vehicle Locator
System Replacement)
$ 300,000 $ 0 $ 130,000 $ 430,000
Project No. 2000506
(Bus Stop Improvements) $ 280,000 $ 70,000 $ 0 $ 350,000 Preventive Maintenance $ 211,296 $ 52,824 $ 0 $ 264,120 Staff is recommending that Council appropriate the awarded funds to the related capital projects as shown in the Fiscal Impact section of this report.

Appropriation of State Grant Funds from Prior Fiscal Years State funds are available to transit agencies through the Low Carbon Transit Operations Program (LCTOP) and State of Good Repair (SGR) program. SGR is a key component of Senate Bill (SB) 1, enacted in 2017, to address the state’s aging infrastructure. In this report, the term “SB 1 (SGR)” is used to refer to funds received from the program.

Both LCTOP and SB 1 (SGR) funds allocated to our region are managed by the San Luis Obispo Council of Governments (SLOCOG) and are separated into two categories – operator apportionment and regional competitive funds. Operator apportionment funds are formula-based and are apportioned to each transit agency within the given region.

Regional competitive funds must be applied for and are awarded by SLOCOG based on adopted evaluation criteria.

Each year, the City receives approximately $14,500 in LCTOP operator apportionment funds and $9,000 in SB 1 (SGR) operator apportionment funds. The amounts vary slightly from year-to-year depending upon the collection of fees by the state that fund the

1 The Federal Transit Administration defines Preventive Maintenance as, “All maintenance costs related to vehicles and non-vehicles. Specifically, preventive maintenance includes all the activities, supplies, materials, labor, services, and associated costs required to preserve or extend the functionality and serviceability of the asset in a cost-effective manner, up to and including the current state of the art for maintaining such an asset.

Item 5h
programs. Both operator apportionment funds and regional competitive funds must either be assigned to new or existing eligible projects on file with the State of California.

During the closeout of Project No. 2000058, staff found that LCTOP and SB 1 (SGR) operator apportionment funds from prior fiscal years were never appropriated. These funds need to be appropriated to their associated projects so funds can be expended in a manner as required by the administrating agencies (FY 2024-25 LCTOP Guidelines - Page 10 and 2024 State of Good Repair Guidelines - Page 11). Otherwise, these funds would need to be returned to the administrating agency for reprogramming. Staff is recommending appropriating $14,868 in LCTOP funds and $27,355 in SB 1 (SGR) funds to eligible projects, as described in the Fiscal Impact section of the report.

Previous Council Actions

1. April 15, 2025 – Council reviewed the Strategic Budget Direction Report and the 2025-27 Major City Goals and Work Plans which includes Infrastructure and Sustainable Transportation as a Major City Goal. Council also provided feedback and guidance proposed budget allocations before the scheduled adoption of the 25-27 Financial Plan.

2. January 14, 2025 – Council approved appropriation of Senate Bill 125 grant funds to several capital projects and the execution of an agreement with SLOCOG for reimbursement of project expenditures.

3. June 4, 2024 – Council adopted the FY 2024-25 Supplemental Budget including updates to the Capital Improvement Plan (CIP).

4. March 5, 2024 – Council adopted SLO Transit’s Zero-Emission Rollout Plan as required by California’s Air Resources Board.

5. January 23, 2024 – Council received and filed Transit Innovation Study and directed staff to finalize the report and begin implementation.

6. July 11, 2023 – Council adopted Resolution No. 11434 (2023 Series) authorizing the appropriation of undesignated Transit Fund balance for the purchase of six battery electric buses.

7. June 6, 2023 – Council adopted the 2023-25 Financial Plan and FY 2023-24 Budget which includes the Climate Action, Open Space, and Sustainable Transportation Major City Goal.

Public Engagement
This is an administrative item, so no outside public 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.

CONCURRENCE
SLOCOG is the sponsor agency for both LCTOP and SB 1 (SGR) programs and SLOCOG staff concur with the transfer of funds to the eligible projects as described in this report.

Item 5h

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. Capital projects must comply with state and local laws including environmental review or finding of exemption.

FISCAL IMPACT
Budgeted: Yes Budget Year: 2024-25
Funding Identified: Yes
Fiscal Analysis:

Reappropriation of unexpended federal and state dollars to applicable projects makes the best use of funds that would otherwise be de-obligated by or returned to the administrating agency. Similarly, appropriating FTA Section 5307 program dollars aligns with the program’s intent and supports delivery of critical transit projects. Appropriating state grant funds awarded to the City allow those funds to be expended in accordance with their respective program guidelines.

Project No. 2000102 – Bus Yard Parking Lot Maintenance
This project initially identified $25,000 in unsecured SB 1 (SGR) grant funds for design; however, an application for SB 1 (SGR) competitive funds for design was not submitted and, therefore, not obtained. In March 2025, the project was awarded $60,000 in FTA Section 5307 formula funds for design. This grant requires a minimum 20% local match.

Staff recommends using Transportation Development Act (TDA) funds to meet this requirement by appropriating $15,000 in TDA funds to the project. A total of $75,000 is sufficient to complete the design phase based on the current scope of work. Any unspent FTA funds may be amended and reallocated to support the construction phase.

The recommended action appropriates $60,000 in FTA Section 5307 funds and $15,000 in TDA funds to Project No. 2000102 and deprograms the previously identified $25,000 in SB 1 (SGR) funds.

Project No. 2000102 (Bus Yard Parking Lot Maintenance)
SB 1 (SGR)
Grant
FTA 5307
Grant
TDA
Funds
Total
Project
Budget
Current Fund
Amount $ 25,000 $ 0 $ 0 $ 25,000
Proposed Funding
Added $ 0 $ 60,000 $ 15,000
Proposed Funding
Removed $ (25,000) $ 0 $ 0
Post Transfer
Amount $ 0 $ 60,000 $ 15,000 $ 75,000

Item 5h
Project No. 2000403 – Battery Electric Bus Charging Infrastructure In April 2024, the SLOCOG Board approved a total allocation of $319,168 in LCTOP funds to the City to support procurement and installation of electric vehicle charging infrastructure. This funding includes $304,400 in regional competitive funds and $14,868 in operator apportionment funds; both administered through the LCTOP program. The regional competitive funds have been appropriated, and staff is recommending the appropriation of $14,868 in operator funds to assist with project implementation.

In addition to LCTOP funds, this project includes $395,000 in Senate Bill (SB) 125 funds appropriated by Council in January 2025, bringing the total project budget to $699,400.

Based on initial input from electrical engineers, additional site improvements are needed before electric vehicle charging stations can be installed.

To help meet this need, staff recommends reallocating $69,156 in unexpended LCTOP funds from Project No. 2000058, which was previously funded for the purchase of two battery electric buses. Under LCTOP guidelines (page 13), remaining funds may be reassigned to another project with an approved allocation request. Project No. 2000403 meets this requirement and is eligible to receive the unspent funds.

The recommended action in this report appropriates $14,868 in LCTOP operator apportionment funds and $69,156 in reassigned LCTOP competitive funds for a total of $84,024 to Project No. 2000403 to complete necessary site improvements for the purchase and installation of charging infrastructure at the Bus Yard.

Project No. 2000403 (Battery Electric Bus Charging Infrastructure) LCTOP
Grant SB 125 Grant Total Project Budget
Current Fund
Amount $ 304,400 $ 395,000 $ 699,400
Proposed
Transfers $ 84,024 $ 0
Post Transfer
Amount $ 388,424 $ 395,000 $ 783,423
Project No. 2000404 – Auto Vehicle Locator System Replacement Automatic Vehicle Locator (AVL) systems track the real-time location of buses, trains, and other public transit vehicles. This data is used for various purposes, including optimizing routes, improving schedule adherence, providing real-time information to passengers, and enhancing overall transit operations. Replacement of SLO Transit’s failing AVL system is the 4th highest priority recommendation of SLO Transit’s Transit Innovation Study.

In January 2025, Council authorized execution of a cooperative agreement with SLOCOG for SB 125 grant funds. The cooperative agreement included $130,000 in funds for Project No. 2000404 – Auto Vehicle Locator System Replacement. Initial cost quotes indicated that it is not enough to fully fund the replacement of all the system components. Staff

Item 5h
applied for and was awarded $300,000 in FTA Section 5307 formula funds to fully fund the project.

The recommended action in this report appropriates $300,000 in FTA Section 5307 funds to Project No. 2000404 to fully fund the replacement of SLO Transit’s failing auto vehicle locator system.

Project No. 2000404 (Auto Vehicle Locator System Replacement) FTA 5307
Grant
SB 125
Grant
Total Project
Budget
Current Fund
Amount $ 0 $ 130,000 $ 130,000
Proposed
Transfers $ 300,000 $ 0 $ 300,000
Post Transfer
Amount $ 300,000 $ 130,000 $ 430,000
Project No. 2000505 – Fleet Replacement: 6 Gillig Buses In July 2023, Council approved appropriation of additional Transit Fund dollars to Project No. 2000505 for the purchase of six battery electric buses. In January 2025, Council authorized execution of a cooperative agreement with SLOCOG for SB 125 grant funds including supplanting $278,521 in Transit Fund dollars with $280,000 of SB 125 funds.

Project No. 2000058 for the purchase of two battery electric buses was supported by FTA Section 5307 and TDA funds through grant CA-2021-172 that was executed in August 2021 and by SB 1 (SGR) and LCTOP state grants dollars. Following project completion, $135,909 of FTA Section 5307 funds and $23,984 TDA remain in this project due to the project being eligible for vouchers through the state’s HVIP program. To ensure these funds are not lost, staff recommends reallocating them to support the ongoing purchase of six battery electric buses.

The recommended action appropriates $135,909 in FTA Section 5307 funds and $23,984 in TDA funds to Project No. 2000505 to supplant Transit Fund dollars appropriated to the project as contingency. Doing so preserves Transit Fund working capital and prioritizes use of grant funds for capital projects.

Project No. 2000505 (Fleet Replacement: 6 Gillig Buses) FTA
5339(b)
Grant
FTA 5307
Grant TDA Funds Transit Fund
SB 125
Grant
Total
Project
Budget
Current Fund
Amount $ 4,799,978 $ 506,296 $ 1,326,569 $ 414,682 $ 280,000 $ 7,327,524 Proposed
Transfers $ 135,909 $ 23,984 $ (159,893)
Post Transfer
Amount $ 4,799,978 $ 642,205 $ 1,350,553 $ 254,789 $ 280,000 $ 7,327,524

Item 5h
Project No. 2000506 – Bus Stop Improvements
This project will replace outdated bus shelters that are well beyond their useful life and make associated site improvements to meet Americans with Disabilities Act (ADA) standards. The estimated total cost is approximately $496,500, which may also cover additional bus stop amenities such as trash receptacles, solar lighting, and schedule holders if funds allow.

The project was originally planned to be funded entirely with Transportation Development Act (TDA) funds. However, staff recently secured $280,000 in FTA Section 5307 funds for this project, significantly expanding the project budget. While TDA funds are still required to meet the 20% local match requirement, only $70,000 is needed. As a result, staff recommends deprogramming $20,000 in TDA funds to preserve this flexible funding source for future transit needs.

To fully fund the project, staff also recommends reprogramming $150,325 in remaining SB 1 (SGR) funds from Project No. 2000058. According to SB 1 (SGR) guidelines (page 11) savings from completed or canceled projects may be applied to other eligible projects.

Shelter replacement qualifies under these guidelines, and SLOCOG, the regional sponsor, supports this reallocation. In addition, $27,355 in SB 1 (SGR) operator apportionment funds from prior fiscal years were previously designated for this project but were never formally appropriated.

The recommended action appropriates $280,000 in FTA Section 5307 funds, $150,325 in SB 1 (SGR) reprogrammed funds, and $27,355 in SB 1 (SGR) operator apportionment funds, while deprogramming $20,000 in TDA funds.

Project No. 2000506 (Bus Stop Improvements)
FTA 5307
Grant TDA Funds SB 1 (SGR)Grant
Total
Project
Budget
Current Fund
Amount $ 0 $ 90,000 $ 0 $ 90,000
Proposed Funding
Added $ 280,000 $ 0 $ 177,680
Proposed Funding
Removed $ 0 $ (20,000) $ 0
Post Transfer
Amount $ 280,000 $ 70,000 $ 177,680 $ 527,680

ALTERNATIVE
Council could decide not to adopt the Draft Resolution appropriating grant funds to Transit program capital projects. This would delay progress on projects that support the State of California’s zero-emission mandates for transit agencies and implementation of key recommendations of the Transit Innovation Study.

Item 5h

ATTACHMENTS
A - Draft Resolution approving appropriation of grant funds to Transit program projects

R ______
RESOLUTION NO. _____ (2025 SERIES)

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

OBISPO, CALIFORNIA, APPROVING THE APPROPRIATION OF

FEDERAL AND STATE FUNDS TO TRANSIT PROGRAM CAPITAL

PROJECTS
WHEREAS, the Transit Fund is one of four enterprise funds within the City and relies heavily on federal and state grant opportunities to fund capital projects; and WHEREAS, the City has an obligation to make the best use of awarded grant funds to the extent allowed by the administrating agencies; and WHEREAS, unexpended Federal Transit Administration (FTA) Section 5307 formula funds, Low Carbon Transit Operations Program (LCTOP) funds, and Senate Bill (SB) 1 State of Good Repair (SGR) funds from a completed capital project are available for reappropriation to eligible capital projects; and
WHEREAS, San Luis Obispo Council of Governments (SLOCOG) is the sponsoring agency for both LCTOP and SB 1 (SGR) programs and concurs with the reappropriation of unexpended funds to eligible projects; and WHEREAS, in June 2022, Council adopted Resolution No. 11330 (2022 Series) authorizing the Public Works Director to apply for funding opportunities that benefit the City’s Transit program; and
WHEREAS, in November 2024 staff applied for use of FTA Section 5307 formula funds for three capital improvement plan projects and for preventive maintenance of revenue vehicles and in March 2025, the application was approved allowing the City to be reimbursed for eligible expenses; and
WHEREAS, operator apportionment funds from LCTOP and SB 1 (SGR) are disbursed to the City each year and must be appropriated to either new or existing, approved projects on file with the State of California; and WHEREAS, during an internal review of Transit program grants, staff discovered that $14,868 in LCTOP operator apportionment funds and $27,355 in SB 1 (SGR) operator apportionment funds from prior fiscal years were never appropriated to eligible projects; and
WHEREAS, these grant funds need to be appropriated to their associated projects so funds can be expended in a timely manner, as required the administrating agencies, and before the City can incur expenses towards the respective projects