San Luis Obispo City Council
September 16, 2025

City Council
AGENDA

Tuesday, September 16, 2025, 5:30 p.m.

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

INSTRUCTIONS FOR PUBLIC COMMENT:

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

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

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

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

Public Comment during the meeting:

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

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

Pages

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

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

1.b CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) and paragraph (1) of subdivision (e) of Section 54956.9. No. of potential cases: One.

1.c ADJOURNMENT
The City Council will hold a Regular Meeting on September 16, 2025 at 5:30 PM in the Council Chambers at City Hall, 990 Palm Street, San Luis Obispo.

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

3. PLEDGE OF ALLEGIANCE
Council Member Marx will lead the Council in the Pledge of Allegiance.

4. PRESENTATIONS

4.a NATIONAL DRIVE ELECTRIC MONTH
Mayor Stewart will present a proclamation declaring September 12, 2025 to October 12, 2025 as "National Drive Electric Month".

4.b HISPANIC, LATINX, LATINO HERITAGE MONTH PROCLAMATION Mayor Stewart will present a proclamation declaring September 15 to October 15, 2025 as Hispanic, Latinx, Latino Heritage Month.

4.c NATIONAL ALCOHOL AND DRUG ADDICTION RECOVERY MONTH

PROCLAMATION
Mayor Stewart will presented a Proclamation declaring September as National Alcohol and Drug Addiction Recovery Month.

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

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

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

Recommendation:

To approve Consent Calendar Items 6a to 6i.

6.a WAIVE READING IN FULL OF ALL RESOLUTIONS AND

ORDINANCES
Recommendation:

Waive reading of all resolutions and ordinances as appropriate.

6.b MINUTES REVIEW - SEPTEMBER 2, 2025 COUNCIL MINUTES 11 Recommendation:

Approve the minutes of the City Council meeting held on September 2, 2025.

6.c LEASE AMENDMENT NO. 3 WITH CITY FARM SLO 19
Recommendation:

Authorize Lease Amendment No. 3 to the Lease Agreement between the City of San Luis Obispo and Central Coast Ag Network, dba City Farm SLO, to add an additional 1.5 acres of farmland to the lease area.

6.d AUTHORIZE SOLAR POWER PURCHASE AGREEMENT CONTRACT

ASSIGNMENT
49 Recommendation:

Authorize the City Manager or their designee to execute a Consent to Assignment of Project Documents and Acknowledgement to transfer Power Purchase Agreements from ForeFront Power to Greenskies Clean Energy, in a form subject to review and approval by the City Attorney’s office.

6.e APPROVAL OF THE FINAL MAP FOR TRACT 3089 PHASE 5, AVILA RANCH, 175 VENTURE DRIVE (FMAP-0132-2024)
109
Recommendation:

Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving the final map for Tract 3089 Phase 5, Avila Ranch, including an addendum to the Final Environmental Impact Report clarifying the timing of transportation mitigation measures, and authorizing the Mayor to execute a Subdivision Agreement in a form subject to the approval of the City Attorney (175 Venture Drive, FMAP-0132-2024).”

6.f AUTHORIZATION TO SUBMIT AN APPLICATION FOR
PROPOSITION 1 INTEGRATED REGIONAL WATER MANAGEMENT
(IRWM) ROUND 2 IMPLEMENTATION GRANT
235
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 Proposition 1, Round 2 Integrated Regional Water Management Implementation
Grant”; and

1. Authorize the Director of Utilities, or his designee, carry out the City’s responsibilities under the funding agreement and to sign the funding agreement for the Implementation Phase of the Project and any amendments thereto, on behalf of the City.

2. 6.g ADVISORY BODY APPOINTMENTS FOR UNSCHEDULED

VACANCIES ON THE ADMINISTRATIVE REVIEW BOARD AND

MASS TRANSPORTATION COMMITTEE
323
Recommendation:

Confirm the appointment of Jim Gardiner to the Administrative Review Board (ARB) and Stone Ramage to the Mass Transportation Committee (MTC).

6.h AUTHORIZATION TO ENTER INTO A CONTRACT WITH PGE TO

PARTICIPATE IN THE EV FLEET PROGRAM
327
Recommendation:

Authorize the City Manager to execute and return the PG&E EV Fleet Program Letter of Commitment and Program Terms and Conditions (“Contract”) for the Corporation Yard Electric Vehicle Charging Project; and

1. Authorize the City Engineer to execute easements with PG&E, in a final form approved by the City Attorney, to support utility infrastructure improvements installed under the PG&E EV Fleet Program

2. 6.i AUTHORIZATION TO APPLY FOR THE 2025 LAND AND WATER

CONSERVATION FUND GRANT CYCLE
365
Recommendation:

Adopt a Draft Resolution affirming the submittal of a grant application, for a matching grant of $585,000, with the minimum award of $292,500, from the California Department of Parks and Recreation Office of Grants and Local Services (OGALS) for the Land and Water Conservation Fund (LWCF) ; and

1. Authorize the Assistant City Manager to execute the necessary grant documents and appropriate the grant amount into the Parks and Recreation Department’s parkland improvement
project budget to support current park improvement projects upon grant award.

2. 7. PUBLIC HEARING AND BUSINESS ITEMS

7.a RECOMMEND ADOPTION OF RESOLUTION OF NECESSITY FOR

THE ACQUISITION BY EMINENT DOMAIN OF CERTAIN REAL
PROPERTY INTERESTS (ASSESSOR’S PARCEL NUMBER 001-043-
027) FOR PUBLIC PURPOSES IN CONNECTION WITH THE
CALIFORNIA & TAFT ROUNDABOUT PROJECT (60 MINUTES)
375
Recommendation:

Adopt a Draft Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California, Declaring Certain Real Property Interests Necessary for Public Purposes and Authorizing the Acquisition Thereof in Connection with the California & Taft Roundabout Project (Certain Real Property Interests on APN 001-043-027)”; and

1. Open and conduct a hearing on the adoption of the proposed Resolution of Necessity, receive the evidence referenced in the Agenda Report (“Report”), take testimony from anyone wishing to address issues A, B, C, and D as outlined in the Report, and consider all evidence presented to determine whether to adopt the proposed Resolution of Necessity; and

2. If the City Council finds, based on the evidence contained and referred to in this Report, the testimony and comments
submitted to the City Council, that the evidence warrants the necessary findings with respect to the proposed Resolution of Necessity, then City Staff recommends that the City Council, in the exercise of its discretion, adopt proposed Draft Resolution which requires a 4/5ths vote of the entire City Council, authorizing the acquisition by eminent domain of the real property interests summarized below, described more
particularly in the Exhibits to the Resolution of Necessity and referred to collectively as the "subject Property Interests”: 578 California Boulevard, San Luis Obispo, CA (APN 001-043-027) (“Property”) Owned by Kirit Chunibhai Patel and Gita Kirit Patel, Trustees of the Kirit Chunibhai Patel and Gita Girit Patel 1992 Revocable Trust

3. An approximate 2,182 square foot fee portion of the
Property for public street and right-of-way purposes, public utilities, drainage, and all uses necessary or convenient thereto in connection with the California & Taft Roundabout Project (Project) described more particularly on EXHIBIT “A” and depicted on EXHIBIT “B” to the Resolution of
Necessity; and
•
An approximate 763 square foot temporary construction
easement with a term of 18 months on the Property to
facilitate the construction of the California & Taft
Roundabout Project described more particularly on
EXHIBIT “C” and depicted on EXHIBIT “D” to the
Resolution of Necessity; and
•
An approximate 1,614 square foot temporary nonexclusive access easement for a term of 18 months on the Property for ingress and egress and to complete driveway tie-in work and conform driveway to adjacent public street •
improvements in connection with the construction of the California & Taft Roundabout Project described more
particularly on EXHIBIT “E” and depicted on EXHIBIT “F” to the Resolution of Necessity; and
If the City Council adopts the proposed Resolution of
Necessity, authorize the City’s legal counsel to file and prosecute eminent domain proceedings for the acquisition of the Subject Property Interests by eminent domain; and

4. Authorize the City Manager to execute all necessary
documents; and

5. Authorize the City Clerk to certify the adoption of the Resolution of Necessity; and

6. Authorize the Finance Director or their designee to approve purchases related to legal costs to support eminent domain proceedings up to $400,000; and

7. Authorize the Finance Director or their designee to approve other purchases related to property acquisition efforts for the California & Taft Roundabout Project (Account #2091503), including property purchases within the authorization previously provided by Council in closed session, up to the currently available project budget, and any subsequently amended
budget approved by the City Manager.

8. 7.b RESPONSE TO GRAND JURY REPORT - ROUND AND ROUND
WITH TOWN AND GOWN (120 MINUTES)
555
Recommendation:

Approve the City Council, Planning Commission, and City Manager’s joint response to the San Luis Obispo County Civil Grand Jury Report entitled “Round and Round with Town and Gown.”

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

9. ADJOURNMENT
The next Regular Meeting of the City Council will be held on October 7, 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
September 2, 2025, 5:30 p.m.

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

Present:

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

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

1.a CALL TO ORDER
Mayor Erica A. Stewart called the Closed Session of the San Luis Obispo City Council to order at 5:30 p.m. in the Council Hearing Room with all Council Members present.

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

None
---End of Public Comment---

1.c CONFERENCE WITH REAL PROPERTY NEGOTIATORS
ACTION: City Attorney Christine Dietrick reported that the Council provided direction regarding price and terms.

1.d ADJOURNMENT

2. CALL TO ORDER
A Regular Meeting of the San Luis Obispo City Council was called to order on September 2, 2025 at 5:30 p.m. in the Council Chambers, 990 Palm Street, San Luis Obispo, by Mayor Stewart.

3. PLEDGE OF ALLEGIANCE
Mayor Stewart led the Council in the Pledge of Allegiance.

2 4. PRESENTATIONS

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

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

Dr. Loew
--End of Public Comment--

6. CONSENT AGENDA
Council Member Francis requested that Item 6c be pulled from the Consent Agenda.

Public Comment:

Courtney Kienow - Item 6j
--End of Public Comment--
Motion By Council Member Marx
Second By Vice Mayor Shoresman
To approve Consent Calendar Items 6a, 6b, 6d to 6k.

Ayes (5): Council Member Boswell, Council Member Francis, Council Member Marx, Vice Mayor Shoresman, and Mayor Stewart
Recused (2): Council Member Boswell and Council Member Francis on Item 6j only
CARRIED (5 to 0)

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

6.b MINUTES REVIEW - AUGUST 19, 2025 COUNCIL MINUTES
Approve the minutes of the City Council meeting held on August 19, 2025.

6.d PUBLIC WORKS DEPARTMENT SURPLUS FLEET ASSETS AND

EQUIPMENT DISPOSAL
Authorize designation and sale of surplus SLO Transit vehicles and surplus Fleet Maintenance equipment in accordance with the City’s policies and procedures prescribed in the Financial Management Manual

3 6.e ADOPTION OF ORDINANCE NO. 1749 (2025 SERIES) REVOKING THE

PLANNED DEVELOPMENT OVERLAY RELATED TO A DEVELOPMENT
PROJECT AT 1144 CHORRO STREET
Adopt Ordinance No. 1749 (2025 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, revoking the Planned Development Overlay (Ordinance No. 1687 [2020 Series]), related to a development project proposed at 1144 Chorro Street, and amending the Zoning Map to rezone the seven (7) associated properties from C-D-PD and C-D-H-PD to C-D and C-D-H, respectively. The project is exempt from environmental review (CEQA) (1144 Chorro Street; 895, 898, and 973 Higuera Street; 876 and 890 Marsh Street; and 868 and 870 Monterey Street; PDEV-0428-2023).”

6.f ADOPTION OF TITLE VI PROGRAMS FOR SLO TRANSIT AND FOR

THE PUBLIC WORKS DEPARTMENT

1. Adopt Resolution No. 11590 (2025 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving the adoption of San Luis Obispo (SLO) Transit’s Federal Transit Administration Title VI Program update for federal fiscal years 2026-2028”; and

2. Adopt Resolution No. 11591 (2025 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving the adoption of the Public Works Department’s Title VI Program Plan.”

6.g APPROVE PARTICIPATION IN MULTIPLE NATIONAL OPIOID

LITIGATION SETTLEMENT AGREEMENTS

1. Approve City participation in the nationally negotiated opioid related settlement agreements with Purdue Pharma L.P. & Sackler Family (“Purdue and Sackler”); and

2. Approve City participation in the nationally negotiated opioid related settlement agreements with eight opioids manufacturers, Alvogen, Amneal, Apotex, Hikma, Indivior, Mylan, Sun, and Zydus (the “Manufacturers”); and

3. Approve City participation in all future nationally negotiated opioid related settlement agreements; and

4. Authorize the City Manager and City Attorney to execute documents as needed to participate in the above-specified and all

4 future nationally negotiated opioid related settlement agreements; and

5. Authorize the City Manager and City Attorney to elect direct allocation of the settlement funds to the City; and

6. Authorize the City Manager to vote on the Purdue bankruptcy plan, in consultation with the City Attorney (including abstention if the City Manager determines abstention is in the best interest of the City.)

7. Authorize staff to submit required annual opioid settlement expenditure reporting forms to the Department of Health Care Services.

6.h ACCEPTANCE OF A MONETARY GIFT TO THE PUBLIC ART FUND Authorize the Mayor to execute a donation agreement with the Donna P.

Duerk Family Trust, in substantially the same form as that in Attachment A, accepting a donation valued at $21,730.07 to be used to support the installation of an art piece within the City.

6.i AUTHORIZE SEWER FUND BUDGET ADJUSTMENT FOR UTILITIES

CLOSED CIRCUIT TELEVISION (CCTV) VAN RETROFIT

1. Adopt Resolution No. 11592 (2025 Series) entitled “A Resolution of the City Council of the City of San Luis Obispo Approving a Budget Adjustment to Allocate $25,675 From the Sewer Fund
Undesignated Balance”.

2. Find the project categorically exempt from the California Environmental Quality Act.

6.j GRANT AGREEMENT FOR THE RENOVATION OF THE CAL POLY CIE Council Member Francis declared a conflict on this item, due to her husband’s financial relationship with Cal Poly Community Foundation.

Council Member Boswell declared a conflict on this item, due to receiving income from the Cal Poly Foundation.

Authorize the City Manager to execute a one-time Grant agreement with the Cal Poly Corporation for the renovation of the Center for Innovation and Entrepreneurship in a final form satisfactory to the City Attorney and authorize the disbursement of funds in the amount of up to $116,000.

5 6.k AUTHORIZE THE CITY ATTORNEY TO CORRECT A CLERICAL ERROR (2024-29 ON-CALL LIST FOR LEGAL SERVICES)

1. Authorize the City Attorney to send belated notification of the City’s Request for Qualifications for Legal Services, On-call Outside Counsel 2024 (“RFQ”) to two law firms that were unintentionally left off the notification list; and

2. Authorize the acceptance of qualifications, in the form directed by the City Council approved RFQ specifications, from the two law firms that receive belated notifications; and

3. Authorize the City Attorney to review submitted qualifications and, if deemed responsive, add the two law firms to the City’s current 2024-29 on-call list for outside counsel legal services.

Item 6c pulled from Consent

6.c POLICE DEPARTMENT 2024 ANNUAL REPORT AND ASSEMBLY BILL 481 (MILITARY EQUIPMENT USE) ANNUAL REPORT UPDATE
Chief Scott, Deputy Chief Shafer and Deputy Chief Amoroso provided an overview of the staff report and responded to Council questions.

Public Comments:

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

1. Receive and file the 2024 Police Department Annual Report.

2. Adopt Resolution No. 11589 (2025 Series) entitled “A Resolution of the City Council of the City of San Luis Obispo, California, accepting the 2024 Military Equipment Use (Ab 481) Annual Report and Renewing Ordinance No. 1712 with Findings of Ongoing Compliance with City Policy and State Law”
Ayes (5): Council Member Boswell, Council Member Francis, Council Member Marx, Vice Mayor Shoresman, and Mayor Stewart
CARRIED (5 to 0)

6 7. CLOSED SESSION

7.a THREAT TO PUBLIC SERVICES OR FACILITIES
Action: City Attorney Christine Dietrick report that there was no reportable action taken on this item.

8. LIAISON REPORTS AND COMMUNICATIONS
Mayor Stewart
 SLO Regional Transit Authority (SLORTA) will be attending the September 3rd meeting.
 Met with ASI Leadership
 Met with Ad Hoc Committee on the Grand Jury Report
 Attended the SLO County Medicare Forum Hosted by Congressman Salud Carbajal
 Participated in the SLO Chamber Vision Trip to Madison, Wisconsin Vice Mayor Shoresman
 Attended the employee Summer Celebration
 Attended the College of Law Ribbon Cutting
 Attended Good Morning SLO
 Attended the SLO County Medicare Forum Hosted by Congressman Salud Carbajal
 Represented the City at the Annual Grand Jury meeting with all the cities in the County
Council Member Boswell
 Had a Ride Along with the CAT Team and Community Service Officers Council Member Francis
 Nacimiento Water Project - Attended the August 28th meeting.  Attended SLO College of Law ribbon cutting
Council Member Marx
 County Water Resources Advisory Committee (WRAC) - will be attending the September 3rd meeting

7  Attended the Employee Summer Celebration
 Met with some residence regarding crosswalk at Broad and Murray.

9. ADJOURNMENT
The meeting was adjourned at 7:03 p.m. The next Regular City Council Meeting is scheduled for September 16, 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 6c
Department: Administration
Cost Center: 1005
For Agenda of: 9/16/2025
Placement: Consent
Estimated Time: N/A
FROM: Greg Hermann, Deputy City Manager
Prepared By: Robert Hill, Sustainability & Natural Resources Official SUBJECT: LEASE AMENDMENT NO. 3 WITH CITY FARM SLO

RECOMMENDATION
Authorize Lease Amendment No. 3 to the Lease Agreement between the City of San Luis Obispo and Central Coast Ag Network, dba City Farm SLO, to add an additional 1.5 acres of farmland to the lease area (Attachment A).

POLICY CONTEXT
The City of San Luis Obispo’s Conservation and Open Space Element of the General Plan (2016) states that "Publicly owned agricultural lands should be leased back to farmers or used as demonstration projects that will benefit local farmers" and “The City should lease lands designated Agriculture for continued agricultural use, provided the lease agreement reflects all City policies and management objectives.” In January 2011, the City established the Calle Joaquin Agricultural Reserve for the purpose of preserving significant parts of "this signature working agricultural landscape" at the City's southern gateway. The plan document for the Calle Joaquin Agricultural Reserve (2011) states that “operation will be in the hands of a nonprofit entity which, pursuant to an agreement with the City of San Luis Obispo, will be responsible for the overall capital improvements, operation, and maintenance of the agricultural operations of the site.”
The City’s Land Use Element (2014) includes Policy 1.9.1, Agricultural Protection: “The City shall support preservation of economically viable agricultural operations and land within the urban reserve and city limits.”
The City’s Climate Action Plan for Community Recovery (2022) within the Natural Solutions section, Pillar 6, states: “The Calle Joaquin Agricultural Reserve (locally known as “City Farm”) is part of City’s Greenbelt Protection Program—a system of protected natural resources and conserved landscapes that is central to maintaining the City’s identity and unique sense of place. In addition to carbon sequestration, the City’s Greenbelt provides tremendous climate resilience benefits including shading and cooling,

Item 6c
stormwater management and watershed protection, as well as buffering from extreme heat events, catastrophic flooding, and wildfires.”
The City’s Financial Management Manual (Section 475-C) allows for long-term leases of City property, as well as provisions for leases to non -profit organizations, where there is a clear link to accomplishment of significant City goals, plans, or policies and where the proposal has a clear and measurable community benefit.

DISCUSSION
Background
Since 2013, the City of San Luis Obispo has partnered with the Central Coast Ag Network (doing business as “City Farm SLO”) to offer prime agricultural farmland to small sustainable farmers, as well as to provide hands-on educational programming for local youth. The City currently leases to City Farm SLO approximately 20 acres of agricultural farmland located within City limits.

In 2021, City Farm SLO reached a series of milestones set forth in the original 2013 Agricultural Ground Lease, as well as other important goals, including the establishment of public programming, demonstration gardens, an orchard, and infrastructure including on-site solar energy generation, a produce cooler, and livestock shed. Further, City Farm SLO’s 2021 Strategic Plan affirmed four major goals: (1) providing affordable land for small sustainable farms; (2) offering farm-based education for at-risk and under-served youth; (3) modeling regenerative agricultural practices; and (4) fostering a diverse community focused on food and farming.

In recent years, City Farm SLO has continued to grow as an organization and increase its presence in the community. Noteworthy activity includes their relationships with the San Luis Coastal Unified School District and Pacific Beach High School, SLO Food Bank, and the College Corps Fellowship Program, as well as programming such as the Youth Empowerment Program, The Garden For All therapeutic horticulture project, the Prefumo Creek Riparian Restoration and Enhancement Project, and ongoing sustainable and regenerative farming practices with a suite of local farmers.

Previous Council Action
In January 2013, the City Council approved the Agricultural Ground Lease for “the purpose of putting the majority of the Premises into active sustainable agricultural use … [and] facilities to provide educational and agricultural support.” (Attachment B.) In November 2013, the City Council approved Lease Amendment No. 1 in order to add an additional three acres into the leased premises following the City’s successful resolution of a title dispute that had affected that area.

In January 2022, the City Council approved Lease Amendment No. 2 that extended the term for another 40 years, amended terms to reflect operational changes, as well as to incorporate updates in local and state legislation governing water use in the context of the Sustainable Groundwater Management Act (SGMA).

Item 6c
Lease Amendment No. 3
On June 18, 2025, the City received a letter request from City Farm SLO requesting the addition of approximately 1.5 acres of City land be added to the existing lease area (Attachment C). This subject land was dedicated to the City at the same time as other areas of what now constitutes the Calle Joaquin Agricultural Reserve (City Farm) as the open space remainder of Parcel Map SLO 04-0615. The plan document for the property identifies this site as “Phase 1B” (Figure 7, p.19). The narrative description (p.18) of Phase 1B is as follows:

Phase 1B includes improvements and activities in areas that are City controlled or maintained. These may include but are not limited to:
 Initial extension of the Bob Jones Trail from Calle Joaquin to Oceanaire Drive via a pedestrian/bicycle bridge over Prefumo Creek, with ultimate connection to either Madonna Road or Dalidio Drive (possibly both);  Possible community garden or native plant nursery;
 Possible wetland meadow at the southern corner of the property; and  Riparian enhancement plantings along Prefumo Creek and the fill area at the south end of the property, along with control of date palms and other non-native vegetation.

In the intervening time since 2011, there have been substantive updates to the potential uses identified for Phase 1B. In the 2011 to 2014 timeframe, staff installed plantings intending to foster the “wetland meadow” concept, however, with ongoing drought that was occurring during that time, together with challenging site characteristics, those efforts were unsuccessful. Notably, on September 3, 2019, the City Council opted not to pursue the extension of the Bob Jones Trail through the property, instead choosing to focus on Tier 1 active transportation infrastructure along Los Osos Valley Road between Calle Joaquin and Froom Ranch Way (see: Council Agenda Report and Resolution 11043 (2019 Series)). Community garden plots will now be available at the SLO Ranch Farms and Marketplace as part of the San Luis Ranch Specific Plan. Riparian enhancement, removal and control of date palms and other non-native vegetation has occurred as part of the Prefumo Creek Riparian Restoration and Enhancement Project, as well as installation of an interpretive and educational walking path along the creek.

City Farm SLO now proposes to add this land to their existing inventory for uses consistent with existing lease terms, including implementation of the current Strategic Plan, sustainable agriculture, education, and community engagement. Based on firsthand observation, City Farm SLO notes that the site has received some level of flooding for 1-5 days over the past three years. It is envisioned that cropping would either be seasonal or with the intention of a crop selection that can withstand occasional flooding, as well as to continue with riparian enhancement efforts and natural drainage and infiltration techniques. Because the proposed lease addition would not conflict with potential activities identified for Phase 1B, or would continue to implement them, and the addition would increase capacity for City Farm SLO’s farming operations and Strategic Plan goals, staff is supportive of this request.

Item 6c
Public Engagement
An extensive public engagement process was undertaken at the time that the Calle Joaquin Agricultural Reserve and plan document were established, including community meetings and public hearings, leading to the decision to establish a relationship with a non-profit entity capable of implementing sustainable farming operations and educational activities.

Any member of the public may comment on this item either in person at the City Council meeting or by written comment received prior to the meeting.

CONCURRENCE
The Parks and Recreation Department’s Ranger Service division concurs with the recommendation, which would lesson maintenance and patrol duties for this property since City Farm is responsible for maintenance of the Premises under the Agricultural Ground Lease (see section 15.).

ENVIRONMENTAL REVIEW
The activities proposed by City Farm SLO are consistent with the Environmental Review and Mitigated Negative prepared for the Calle Joaquin Agricultural Reserve in 2011. The proposed addition of 1.5 acres of land to City Farm SLO’s existing lease is Categorically Exempt under CEQA Guidelines Section 15325(b) “Acquisition, sale, or other transfer of areas to allow continued agricultural use of the areas” and 15325(d) “Acquisition, sale, or other transfer to prevent encroachment of development into flood plains.”

FISCAL IMPACT
Budgeted: No Budget Year: 2025-26
Funding Identified: No
Fiscal Analysis:

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

Total N/A N/A N/A N/A
The proposed 1.5-acre lease addition does not have a fiscal impact in and of itself. It would require very modest staff time to oversee the continued adherence to the lease agreement. Consistent with Financial Management Manual Section 475-C regarding

Item 6c
long-term leases of City facilities where there is clear link to accomplishment of significant City goals, plans, or policies and where the proposal has a clear and measurable community benefit, the existing Agricultural Ground Lease is made at $1.00 per year. This lease rate is proposed to continue with the 1.5-acre land addition where it is anticipated that community benefits and achievement of City goals will also expand. Should City Farm SLO elect to sub-lease the area, the revenue from such a sub-lease is required to be used in furtherance of the organization’s Strategic Plan implementation and allowable uses, all as allowed under the terms of the lease.

ALTERNATIVES
Council has several alternative options.

1. Council could request additional information, clarification, or changes to the terms of the draft Lease Amendment No. 3 before taking action.

2. Council could decide not to approve the draft Lease Amendment No. 3. Should Council pursue this option, staff suggests identifying or proposing uses or activities to provide staff with guidance for future management of the site. It should be noted that the subject land is not suitable for most land uses other than agriculture or natural resources conservation.

ATTACHMENTS
A - Draft Lease Agreement Amendment No. 3
B - Agricultural Ground Lease (2013)
C - Letter of Interest from City Farm SLO

1 AMENDMENT NO. 3

AGRICULTURAL GROUND LEASE BETWEEN

THE CITY OF SAN LUIS OBISPO AND

CENTRAL COAST AG NETWORK
This Amendment No. 3 to the Agricultural Ground Lease (“Lease”) is entered into this __ day of ________________, by and between the City of San Luis Obispo (the "City") and Central Coast Ag Network, a California public benefit non-profit corporation ("CCAN").

RECITALS
A. The City owns certain agricultural land within City limits, commonly identified as the Calle Joaquin Agricultural Reserve, 0 Calle Joaquin, San Luis Obispo.

B. CCAN is a nonprofit corporation whose purpose is to champion a sustainable local and regional food system to ensure a nourishing, diverse and abundant supply of food that is resilient, safe and secure, and CCAN seeks to manage the on-site agricultural production and agricultural education and activities under sustainable agriculture practices.

C. On January 7, 2013, the City and CCAN entered into the Lease for the purpose of putting the majority of the Premises into active sustainable agricultural use, while permitting development of a portion of the Premises, not to exceed the percentage allowable per zoning regulations, for facilities for the aggregation, light processing and distribution of agricultural products grown locally or on the Premises as part of a local food system as well as facilities to provide educational and agricultural support.

D. On February 1, 2013, the City acquired additional property and on May 2, 2013, entered into Amendment No. 1 with CCAN to add this additional property into the Premises.

E. On January 27, 2022, the City entered into Amendment No. 2 that extended the term for another 40 years, and amended terms to reflect operational changes, as well as to incorporate updates in local and state legislation governing water use in the context of the Sustainable Groundwater Management Act (SGMA).

F. On June 18, 2025, the City received a letter request from CCAN (City Farm SLO) requesting the addition of approximately 1.5 acres of contiguous City land to the existing Lease area.

G. Both City and CCAN desire to expand the lease area with this Amendment No. 3, and the existing Lease rate of $1.00 per year will continue in consideration of CCAN’s ability to also continue to expand its delivery of clear and measurable community benefits and accomplishment of significant City goals, plans, or policies, as provided for under Section 475-C of the City’s Financial Management Manual.

AGREEMENT

1. The area of the City’s Lease with CCAN is hereby amended to include an additional area of approximately 1.5 acres, as shown on Exhibit A, which is incorporated herein.

2 2. The additional land area will be operated and managed consistent with all other terms and conditions of the Lease, which shall remain in full force and effect.

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

CITY OF SAN LUIS OBISPO
_________________________________
Mayor
ATTEST:
____________________________
City Clerk
Approved:
____________________________
City Manager
Approved to as form:
____________________________
City Attorney
CENTRAL COAST AG NETWORK, a California public benefit non-profit corporation __________________________
President
___________________________
Secretary

3 EXHIBIT A

June 18, 2025
San Luis Obispo City Council
990 Palm Street
San Luis Obispo, CA 93401
Dear Mayor Stewart and Members of the San Luis Obispo City Council, On behalf of the Board of Directors of City Farm SLO, we are writing to respectfully request the addition of approximately 1.4 adjacent acres of unused City land to our existing lease agreement, to be used in accordance with the established purpose and intent of that lease. See map attached.

City Farm SLO has worked in partnership with the City since 2013 to transform public land into a vibrant community asset. As outlined in Section 2 of our lease, the purpose of this agreement is “to put the majority of the Premises into active sustainable agricultural use,” while also permitting a portion of the land to support the development of facilities for aggregation, light processing, distribution, education, and agricultural support, all in service to a resilient local food system.

With this in mind, we request the opportunity to lease additional acreage adjacent to our current site to expand our impact. All proposed uses will remain consistent with the original lease purpose and City Farm SLO’s current Strategic Plan, emphasizing sustainable agriculture, education, and community engagement.

We welcome the opportunity to meet with City staff and Councilmembers to discuss this request further and answer any questions you may have. Thank you for your continued partnership.

Sincerely,
Gina Brausch
Board Chair, City Farm SLO
On behalf of the City Farm SLO Board of Directors
[email protected]
Central Coast Ag Network, Inc. dba City Farm SLO
PO Box 3736 • San Luis Obispo, CA 93403 • 805-769-8344 • [email protected] • cityfarmslo.org Page 47 of 651

City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: September 16, 2025
TO: Mayor and Council
FROM: Aaron Floyd, Interim Public Works Director
Prepared By: Noah Maidrand, Engineer II
Chris Read, Sustainability Manager
VIA: Whitney McDonald, City Manager
SUBJECT: ITEM 6d. – AUTHORIZE SOLAR POWER PURCHASE AGREEMENT

CONTRACT ASSIGNMENT
Staff received the following questions, regarding Item 6d. to authorize the contract assignment of the City’s Solar Power Purchase Agreements (PPA’s). The questions are below with staff’s response shown in italics:
1) Will the solar array at the SLO Swim Center/Sinsheimer Park cover the full lot, or only a portion? Would covering the full lot provide more offset savings?
Only a portion of the parking lot can be covered with a solar array under this project. The allowable system size is limited to that specified in the 2023 Net Energy Metering (NEM) application, which was determined by the capacity of the existing electrical panel. Any significant change in size (+/- 10%) would result in losing NEM 2.0 status. Ultimately, this limits solar generation to 110% of the existing load, which will be generated by solar panels covering the area shown for the system in Attachment C of the Agenda Item.
2) Will the array at the SLO Swim Center/Sinsheimer result in any loss of parking spaces? Would the location of the project limit potential future expansion of the pool facilities?
The array will be canopy mounted with the support columns installed in the existing median planters of the parking lot. The structure will not eliminate any existing parking spaces. Several new accessible parking spaces will be installed under the canopy to meet ADA requirements. As a result, two parking spaces will be converted into accessible landing spaces and paths of travel.

Staff took into consideration any future expansion of the swim center during the solar array design phase. Solar arrays are placed in the western portion of the parking lot to allow facility expansion into the south and east. Expanding in this direction would have the least impact on parking and the facility itself.

ITEM 6d. – AUTHORIZE SOLAR POWER PURCHASE AGREEMENT CONTRACT ASSIGNMENT Page 2 3) Page 99 of the Agenda Packet shows the estimated Net Energy Metering (NEM) rate savings over one year and 20 years compared between NEM 2.0 and NEM 3.0. Can you please clarify that the red text in the column indicating “year one savings” indicates negative numbers, meaning a cost to the City rather than savings? Will the Cultural Arts District Parking Structure be the only facility with actual cost savings in year one? Will all facilities have cost savings over the 20 years of the system?
The red text in the year one savings column indicates a cost (ie higher electrical bills), rather than savings. The PPA rate the City pays for solar electricity is the same in year 1 as in year 20. While grid electricity costs increase each year, the City’s PPA stays the same. That means that value of the solar increases through the life of the PPA. A simplified version of the table included in Page 99 of the Agenda Packet is included below for reference

ITEM 6d. – AUTHORIZE SOLAR POWER PURCHASE AGREEMENT CONTRACT ASSIGNMENT Page 3 Site Specific Savings Comparison: NEM 2.0 vs. NEM 3.0 NEM 2.0 Scenario
Site
Y1
Production
(kWh)
%
Energy
Offset
Pre-Solar
Utility Bill
Year 1
Savings
20 Year
Savings
Bus Yard 521,623 11% $1,146,030 ($18,150) $532,083
Sinsheimer 455,286 113% $128,449 ($27,112) $572,412
Fire House 224,406 63% $108,165 ($27,910) $38,710
CAD Parking
Structure 354,968 92% $157,819 $33,122 $1,590,066
NEM 3.0 Scenario
Site
Y1
Production
(kWh)
%
Energy
Offset
Pre-Solar
Utility Bill
Year 1
Savings
20 Year
Savings
Bus Yard 521,623 11% $1,146,030 ($18,159) $531,849
Sinsheimer 455,286 113% $128,449 ($96,636) ($1,519,714) Fire House 224,406 63% $108,165 ($43,508) ($457,927)
CAD Parking
Structure 354,968 92% $157,819 ($30,054) ($56,632)
All projects except the parking structure will cost more to operate compared to grid electricity initially, but the City will start to see savings based on the fixed price PPA as the contract matures over 20 years. The timeline for when positive cashflow is anticipated varies for each site based on a variety of factors, including the total percent of existing electrical load that is offset. Positive cashflow is anticipated to begin between years 5 and 9 based on each site. Net positive savings at the end of the 20 year agreement is shown in Table 2 of the Council Agenda Report and is copied below for reference.

Site Year 20 Cumulative
Savings Fund Source
CAD Parking $532,083 Parking Fund
SLO Swim Center $572,412 General Fund – LRM
Fire Station 1 $38,710 General Fund – LRM
Transit Yard $1,590,066 Transit Fund
Total $2,733,271

ITEM 6d. – AUTHORIZE SOLAR POWER PURCHASE AGREEMENT CONTRACT ASSIGNMENT Page 4 4) Is the City confident the Cultural Arts District Parking Structure will be open by March 2026?
The CADPS project is still tracking for opening by late February/early March 2026, weather permitting. The contractor has installed a majority of the primary steel for the photovoltaic system on the 5th floor of the structure and will soon be ready for panel installation. The solar contractor must complete installation of the solar system by April of 2026, which will not impact the opening of the CADPS.

Item 6d
Department: Public Works
Cost Center: N/A
For Agenda of: 9/16/2025
Placement: Consent
Estimated Time: N/A
FROM: Aaron Floyd, Interim Public Works Director
Prepared By: Noah Maidrand, Engineer II
Chris Read, Sustainability Manager
SUBJECT: AUTHORIZE SOLAR POWER PURCHASE AGREEMENT CONTRACT

ASSIGNMENT

RECOMMENDATION
Authorize the City Manager or their designee to execute a Consent to Assignment of Project Documents and Acknowledgement to transfer Power Purchase Agreements from ForeFront Power to Greenskies Clean Energy, in a form subject to review and approval by the City Attorney’s office.

POLICY CONTEXT
California Government Code Section 4217.12 allows a public agency to enter into an energy services contract and a related facility ground lease provided the agency determines it is in the best interest of the public agency. This determination was made by Council in 2018 via Resolution No. 10933 allowing staff to execute power purchase agreements to offset the City’s energy consumption.

DISCUSSION
Background
A Power Purchase Agreement (PPA) is a financial agreement where the cost of a solar asset is paid for by purchasing electricity directly from the owner of that system over the term of the agreement. Under this arrangement, a third party owns and operates the system, and the City pays the third party for electricity generated. This arrangement allows the City to adopt sustainable energy solutions without any upfront capital investment.

As described in the 2018 Council Agenda Report, the City is “piggybacking” from a statewide procurement process conducted by the Joint Powers Authority called the School Project for Utility Rate Reduction (SPURR), which selected ForeFront as its primary vendor. In 2018, Council made findings that the projects would save both money and energy, allowing for a direct contract with ForeFront under Government Code Section 4217.

Item 6d
The PPA approved in 2018 includes a Master Services Agreement (Attachment A) that sets standard terms and conditions for the relationship between the City and ForeFront, and site specific “Energy Service Agreements”, which set the terms and conditions for each site. This format was set up to maximize flexibility as sites were removed or added.

Since approval in 2018, one project was removed due to infeasibility, Utilities – Reservoir 1, and one project was added due to an emergent opportunity, Cultural Arts District Parking Structure. Table 1 provides the current list of proposed project sites, the reason for inclusion, and the estimated offset of existing electrical load. The electricity produced by the solar arrays will reduce the amount of energy needed to be purchased from PG&E at each site, providing cost savings over the 20-year period of the solar contracts. In all cases, projects were designed to offset as much load as possible given current site constraints. Forefront has prepared conceptual layouts of each site showing the approximate size and location of the systems (Attachment C).

Table 1. Justification and Offset of Existing Load by Site Site Justification Offset of
Existing Load
Cultural Arts District
Parking Structure Solar is included in the project design. 94%* SLO Swim Center Solar is needed to offset current circulation pumping, projected heat pump water heating.
110%**
Fire Station 1
Solar is needed to offset current electricity use and
if paired with a battery in the future could serve as a microgrid.
62%
Bus Yard Solar is needed to offset the expected increase in load from electric bus charging. 11%
*Load was modeled based on project design using comparable usage data from the City of Monterey parking structures. The offset includes EV Charging Infrastructure. **The projected solar generation at the SLO Swim Center exceeds current electrical loads because the system is sized to account for operational constraints and to allow for future load growth or expanded uses.

While the existing pool heat pumps cannot be directly offset by solar, the additional capacity ensures flexibility for future equipment upgrades or facility expansions without needing to install a new system.

Project History
In 2018, the portfolio of projects included Fire Station #1, SLO Swim Center, and the Bus Yard. Since all of the proposed projects were relatively small, ForeFront’s finance department would only proceed with the projects if they were all constructed in the same calendar year. In 2019, the agreements were finalized and fully executed by both parties.

However, in 2019, it became clear that the Transit Yard would need substantial engineering and realignment to accommodate electric bus charging. In order to maintain the full portfolio, all projects were put on indefinite hold until the Transit Yard Electric Vehicle Charging Infrastructure Project (Transit EV Charging Project) was complete. With the completion of the Transit EV Charging Project in 2024, the City has now resumed focus on the solar projects.

Item 6d
Since the agreements were authorized with Forefront, the Public Utilities Commission adopted a new net energy metering policy (commonly referred to as net energy metering 3, or NEM 3.0) that substantially decreased the value of solar energy that is generated and exported to the grid. To maintain the previous more lucrative net energy metering (the rate earned by selling power back to PG&E, often referred to as NEM 2.0), the City worked with ForeFront to submit grid interconnection applications for all four proposed sites. Interconnection agreements were executed by the City Manager on October 7, 2024. As a result, the City has received “grandfathered” NEM 2.0 rates. These rates will expire for each site if a solar project is not operational by April 14, 2026. For projects that go online prior to this date, rates are grandfathered for 20 years.

On June 23, 2025, staff met with Forefront’s Chief Commercial Officer and were informed that Forefront had a large backlog of NEM 2.0 projects that had fallen behind schedule and were at risk of missing the NEM 2.0 deadline. If projects did not meet the NEM 2.0 deadline, they would default onto NEM 3.0, making them far less fiscally advantageous.

To mitigate this, Forefront would offload many of their NEM 2.0 deadline projects onto other solar providers they deem capable of executing the PPA’s as executed. The City’s solar projects were identified as projects that Forefront would like to transfer to another solar provider.

Forefront identified Greenskies Clean Energy LLC (GCE) as an appropriate alternative capable of delivering the City’s solar projects as scoped. City staff met with GCE staff and have affirmed that they are capable of delivering the City’s solar projects within the NEM

2.0 deadline1. GCE has delivered over 150 commercial solar projects in California and is actively working with several municipalities in California to deliver similar solar projects.

The Master Service Agreement allows the “Provider”, Forefront, to transfer or assign the Power Purchase Agreement with the consent of the “Purchaser”, the City. Under the terms of the Power Purchase Agreement, the City cannot unreasonably withhold consent to the assignment. After reviewing with the Office of Sustainability and the City Attorney’s office, staff recommend consenting to this assignment of the City’s agreement to GCE to ensure the NEM 2.0 deadline is met for the City’s solar projects.

Staff recommend authorizing the City Manager to execute the Consent to Assignment once staff have finalized the form and terms of the consent. This delegated authority will allow staff to continue working with Forefront and GCE to complete the design and meet the tight project timeline. Staff have prepared a Draft Consent to Assignment (Attachment B) in coordination with the Office of Sustainability and the City Attorney’s Office that they will work to finalize with GCE. The existing terms and conditions of the Master Services Agreement (Attachment A) and the Site-Specific Agreements will remain the same, except as modified by the Consent to Transfer. Final Consent to Assignment will be reviewed and approved by the City Attorney’s Office prior to execution.

1 Staff are currently negotiation with GCE to assign some punitive cost of delay equivalent to the loss of savings between NEM 2.0 and NEM 3.0 if the NEM 2.0 deadline is missed. The City would also have the right to terminate the contract if that deadline is missed as a material breach of contract.

Item 6d
Previous Council or Advisory Body Action
 September 2018: Authorize Power Purchase Agreement with Forefront Power.

Specific recommendations included:

1. Authorize staff to negotiate a solar PPA with ForeFront Power for the design and potential development, operation, and maintenance of solar energy systems at and for City Facilities, and

2. Adopt Resolution No. 10933 (2018 Series) making findings on energy savings as required by Government Code 4217.12., and

3. Authorize the City Manager to enter into a solar PPA with ForeFront Power in a form subject to the approval of the City Attorney, and

4. Authorize the City Manager to enter into Interconnection Agreements to maintain “time of use” rates for City facilities in a form subject to the approval of the City Attorney.
 June 2019: 2019-21 Financial Plan (Climate Action MCG Task 10 – Develop PPA solar projects)
 June 2021: 2021-23 Financial Plan (Climate Action MCG Task 4.3.iv – Complete installation of solar projects […])
 July 2021: Adoption of Lead by Example Plan (Energy 1.3: Complete solar projects at SLO Swim Center, Transit Yard, and Fire Station 1 to offset energy use at key facilities)
 June 2023: 2023-25 Financial Plan (Climate Action MCG Task 4.1.c – Complete installation of solar panels […])
Public Engagement
The public participated in each of the previous financial plans, and the Lead by Example plan adopted by City Council that prioritized installing solar arrays at City facilities to offset greenhouse gas emissions. During the strategic planning process for the 2025-27 Financial Plan, the community affirmed that Climate Action and Resilience remained a Major City Goal.

CONCURRENCE
This project transition has concurrence with the Office of Sustainability and the City Attorney’s office.

ENVIRONMENTAL REVIEW
The contract assignment has no impact on previous environmental reviews. Each project will undergo an individual CEQA determination once ready for construction.

FISCAL IMPACT
Budgeted: N/A Budget Year: N/A
Funding Identified: N/A

Item 6d
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current Funding
Request
Remaining
Balance
Annual
Ongoing Cost
General Fund $0 $0 $0 $0
State $0 $0 $0 $0
Federal $0 $0 $0 $0
Fees $0 $0 $0 $0
Other: $0 $0 $0 $0
Total $0 $0 $0 $0
This recommendation has no fiscal impact on the project. These projects do not have any upfront capital costs to the City but will have some increased operational costs during the first years of operation, with net positive energy savings over the 20-year term of the PPA.

Table 2. Year 1 Cost Increase and Year 20 Cumulative Savings by Site Site Year 20 Cumulative
Savings Fund Source
CAD Parking $532,083 Parking Fund
SLO Swim Center $572,412 General Fund – LRM
Fire Station 1 $38,710 General Fund – LRM
Transit Yard $1,590,066 Transit Fund
Total $2,733,271
*The CAD Parking Structure has projected savings in year 1 based on comparable data from a parking structure in the City of Monterey.

ALTERNATIVES
Council could decide not to approve the Consent to Assignment with GCE.

ForeFront has indicated their inability to complete the projects by the NEM 2.0 deadline.

Should Council pursue this option, it is unlikely that the City would be able to design and construct the solar projects within the NEM 2.0 deadline, which would eliminate the project savings and viability of a power purchase agreement model for energy efficiency projects based on NEM 3.0’s lower value of solar energy.

ATTACHMENTS
A - General Terms and Conditions of Energy Service Agreement B - DRAFT Consent to Assignment
C - Site Conceptual Layouts

***

GENERAL TERMS AND CONDITIONS OF

ENERGY SERVICES AGREEMENT
These General Terms and Conditions (“General Conditions”) are dated ___________________and are witnessed and acknowledged by FFP BTM SOLAR, LLC, a Delaware limited liability company (“Provider”) and the City of San Luis Obispo, a California Municipal Corporation (“Purchaser”), as evidenced by their signature on the last page of this document. These General Conditions are intended to be incorporated by reference into Energy Services Agreements that may be entered into between Provider and Purchaser. These General Conditions shall have no binding effect upon Provider or Purchaser, respectively, except to the extent Provider or Purchaser becomes a party to an Energy Services Agreement that incorporates these General Conditions.

1. DEFINITIONS.

1.1 In addition to other terms specifically defined elsewhere in the Agreement, where capitalized, the following words and phrases shall be defined as follows:
“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling, controlled by or under common control with such specified Person.
“Applicable Law” means, with respect to any Person, any constitutional provision, law, statute, rule, regulation, ordinance, treaty, order, decree, judgment, decision, certificate, holding, injunction, registration, license, franchise, permit, authorization, guideline, Governmental Approval, consent or requirement of any Governmental Authority having jurisdiction over such Person or its property, enforceable at law or in equity, including the interpretation and administration thereof by such Governmental Authority.
“Assignment” has the meaning set forth in Section 13.1. “Bankruptcy Event” means with respect to a Party, that either (i) such Party has (A) applied for or consented to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property; (B) admitted in writing its inability, or be generally unable, to pay its debts as such debts become due; (C) made a general assignment for the benefit of its creditors; (D) commenced a voluntary case under any bankruptcy law; (E) filed a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding up, or composition or readjustment of debts; (F) taken any corporate or other action for the purpose of effecting any of the foregoing; or (ii) has a petition in bankruptcy filed against it, and such petition is not dismissed within ninety (90) days after the filing thereof. “Business Day” means any day other than Saturday, Sunday or any day within the meaning of the California Code of Civil Procedure Section 135.
“Commercial Operation” has the meaning set forth in Section 3.3(b). “Commercial Operation Date” has the meaning set forth in Section 3.3(b). “Confidential Information” has the meaning set forth in Section 15.1. “Construction Start Date” has the meaning set forth in Section 5 of the Special Conditions.

GENERAL CONDITIONS v.20.1
DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347 12/21/2018

“Covenants, Conditions and Restrictions” or “CCR” means those requirements or limitations related to the Premises as may be set forth in a lease, if applicable, or by any association or other organization, having the authority to impose restrictions.
“Delay Liquidated Damages” means the daily payment of (i) $0.250/day/kW if the Provider fails to achieve the Commercial Operation Date by the Guaranteed Commercial Operation Date. “Disruption Period” has the meaning set forth in Section 4.3. “Early Termination Date” means any date on which the Agreement terminates other than by reason of expiration of the then applicable Term.
“Early Termination Fee” meansthe fee payable by Purchaser to Provider under the circumstances described in Section

11.2. “Effective Date” has the meaning set forth in the preamble to the Special Conditions. “Energy Services” has the meaning set forth in the Special Conditions, and includes the supply of electrical energy output from a System pursuant to the terms of each of the Special Conditions. “Energy Services Agreement” or “Agreement” means each Energy Services Agreement (including the Schedules attached thereto) that may be entered into between Provider and Purchaser or between their respective affiliates that incorporates these General Conditions by reference.
“Energy Services Payment” has the meaning set forth in Schedule 2 of the Special Conditions. “Environmental Attributes” shall mean, without limitation, carbon trading credits, renewable energy credits or certificates, emissions reduction credits, emissions allowances, green tags, tradable renewable credits, or Green-e® products.
“Environmental Documents” has the meaning set forth in Section 7.2(h). “Environmental Law” means any and all federal, state, local, provincial and foreign, civil and criminal laws, statutes, ordinances, orders, common law, codes, rules, regulations, judgments, decrees, injunctions relating to the protection of health and the environment, worker health and safety, and/or governing the handling, use, generation, treatment, storage, transportation, disposal, manufacture, distribution, formulation, packaging, labeling, or release to the environment of or exposure to Hazardous Materials, including any such requirements implemented through Governmental Approvals.
“Estimated Remaining Payments” means as of any date, the estimated remaining Energy Services Payments to be made through the end of the then-applicable Term, as reasonably determined by Provider. “Expiration Date” means the date on which the Agreement terminates by reason of expiration of the Term. “Fair Market Value” means, with respect to any tangible asset or service, the price that would be negotiated in an arm’s-length, free market transaction, for cash, between an informed, willing seller and an informed, willing buyer, neither of whom is under compulsion to complete the transaction. Fair Market Value of the System will be determined pursuant to Section 2.4.
“Financing Party” means, as applicable (i) any Person (or its agent) from whom Provider (or an Affiliate of Provider) leases the System, (ii) any Person (or its agent) who has made or will make a loan to or otherwise provides financing to Provider (or an Affiliate of Provider) with respect to the System, or (iii) any Person acquiring a direct or indirect interest in Provider or in Provider’s interest in the Agreement or the System as a tax credit investor. “Force Majeure Event” has the meaning set forth in Section 10.1.

DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

“Provider” has the meaning set forth in the Special Conditions. “Provider Default” has the meaning set forth in Section 11.1(a). “General Conditions” means these General Terms and Conditions of the Energy Services Agreement, including all Exhibits hereto.
“Guaranteed Commercial Operation Date” has the meaning set forth in Section 5 of the Special Conditions, which date shall be extended day-for-day for Force Majeure Events and for other events outside of Provider’s reasonable control.
“Governmental Approval” means any approval, consent, franchise, permit, certificate, resolution, concession, license, or authorization issued by or on behalf of any applicable Governmental Authority, including any such approval, consent, order or binding agreements with or involving a governmental authority under Environmental Laws. “Governmental Authority” means any federal, state, regional, county, town, city, or municipal government, whether domestic or foreign, or any department, agency, bureau, or other administrative, regulatory or judicial body of any such government.
“Hazardous Materials” means any hazardous or toxic material, substance or waste, including petroleum, petroleum hydrocarbons or petroleum products, and any other chemicals, materials, substances or wastes in any amount or concentration which are regulated under or for which liability can be imposed under any Environmental Law. “Indemnified Parties” has the meaning set forth in Section 16.1. “Initial Term” has the meaning set forth in Section 2 of the Special Conditions. “Installation Work” meansthe construction and installation of the System and the start-up, testing and acceptance (but not the operation and maintenance) thereof, all performed by or for Provider at the Premises. “Invoice Date” has the meaning set forth in Section 6.2. “Liens” has the meaning set forth in Section 7.1(e).
“Local Electric Utility” means the local electric distribution owner and operator providing electric distribution and interconnection services to Purchaser at the Premises.
“Losses” means all losses, liabilities, claims, demands, suits, causes of action, judgments, awards, damages, cleanup and remedial obligations, interest, fines, fees, penalties, costs and expenses (including all attorneys’ fees and other costs and expenses incurred in defending any such claims or other matters or in asserting or enforcing any indemnity obligation).
“Option Price” has the meaning set forth in Section 2.3. “Party” or “Parties” has the meaning set forth in the preamble to the Special Conditions. “Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, firm, or other entity, or a Governmental Authority. “Pre-existing Environmental Conditions” means any: (i) violation of, breach of or non-compliance with any Environmental Laws with respect to the Premises that first existed, arose or occurred on or prior to Provider’s commencement of construction at the Premises and (ii) the presence or release of, or exposure to, any Hazardous Materials at, to, on, in, under or from the Premises that first existed, arose or occurred on or prior to Provider’s commencement of construction at the Premises.

DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

“Premises” means the premises described in Schedule 1 of the Special Conditions. The Premises includes the entirety of any structures and underlying real property located at the address in Schedule 1 of the Special Conditions. “Provider” has the meaning set forth in the Special Conditions and Preamble “Purchase Date” means the first Business Day that occurs after the applicable purchase date set forth in Schedule 3 of the Special Conditions.
“Purchaser” has the meaning set forth in the preamble to the Special Conditions. “Purchaser Default” has the meaning set forth in Section 11.2(a). “Renewal Term” has the meaning set forth in Section 2.1. “Representative” has the meaning set forth in Section 15.1. “Security Interest” has the meaning set forth in Section 8.2. “Site-Specific Requirements” means the site-specific information and requirements as may be set forth in Schedule 6 of the Special Conditions.
“Special Conditions” means each Energy Services Agreement, excluding these General Conditions. “Stated Rate” means a rate per annum equal to the lesser of (a) the “prime rate” (asreported in The Wall StreetJournal) plus two percent (2%) or (b) the maximum rate allowed by Applicable Law. “System” has the meaning set forth in Schedule 1 of the Special Conditions. “System-based Incentives” means any accelerated depreciation, installation or production-based incentives, investment tax credits and subsidies including, but not limited to, the subsidies in Schedule 1 of the Special Conditions and all other related subsidies and incentives.
“System Operations” means Provider’s operation, maintenance and repair of the System performed in accordance with the requirements herein.
“Term” has the meaning set forth in Section 2 of the Special Conditions. “Term Year” means a twelve (12) month period beginning on the first day of the Term and each successive twelve (12) month period thereafter.
“Termination Date” meansthe date on which the Agreement ceasesto be effective, including on an Early Termination Date or the Expiration Date.
“Transfer Time” has the meaning set forth in Section 4.3(a).

1.2 Interpretation. The captions or headings in these General Conditions are strictly for convenience and shall not be considered in interpreting the Agreement. Words in the Agreement that impart the singular connotation shall be interpreted as plural, and words that impart the plural connotation shall be interpreted as singular, as the identity of the parties or objects referred to may require. The words “include”, “includes”, and “including” mean include, includes, and including “without limitation” and “without limitation by specification.” The words “hereof”, “herein”, and “hereunder” and words of similar import refer to the Agreement as a whole and not to any particular provision of the Agreement. Except as the context otherwise indicates, all references to “Articles” and “Sections” refer to Articles and Sections of these General Conditions.

DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

2. TERM AND TERMINATION.

2.1 Term; Early Termination; Milestone Dates.
(a) Term. The term of the Agreement shall commence on the Effective Date and shall continue for the number of years after the Commercial Operation Date that are specified in the Special Conditions (the “Initial Term”), unless and until extended or terminated earlier pursuant to the provisions of the Agreement. (b) Early Termination. Purchaser may terminate the Agreement prior to any applicable Expiration Date for any reason upon sixty (60) days’ prior written notice. If Purchaser terminates the Agreement prior to the Expiration Date of the Initial Term, Purchaser shall pay, as liquidated damages, the Early Termination Fee set forth on Schedule 3, Column 1 of the Special Conditions, and, except when Purchaser exercises its Purchase Option in accordance with Section 2.2 below, Provider shall cause the System to be disconnected and removed from the Premises. As security for Provider’s removal obligations hereunder, within 5 business days of Purchaser providing such termination notice, Provider shall post a decommissioning and removal bond in an amount sufficient to decommission and remove the System and restore the Premises. Upon Purchaser’s payment to Provider of the Early Termination Fee, the Agreement shall terminate automatically. If the Purchaser exercises its Purchase Option in accordance with Section 2.2 below, the Early Termination Fee shall only be payable to the extent required by Section 2.4. (c) If Provider fails to commence construction by the Construction Start Date, Purchaser shall be entitled (as its sole remedy) to Delay Liquidated Damages not to exceed $22.5/kW, and, at Purchaser’s election, may (ii) terminate this Agreement with no liability whatsoever if Provider fails to commence construction of the System by the date that is 90 days after the Construction Start Date. If Provider fails to achieve Commercial Operation by the Guaranteed Commercial Operation Date, Purchaser shall be entitled (as its sole remedy) to Delay Liquidated Damages not to exceed $15/kW, plus (if Installation Work had commenced at the Premises as of the date of termination) any costs reasonably incurred by Purchaser to return its Premises to its condition prior to commencement of the Installation Work. Further, Purchaser may terminate this Agreement with no liability whatsoever if Provider fails to commence Commercial Operation by the date that is 60 days after the Guaranteed Commercial Operation Date. The Construction Start Date and Guaranteed Commercial Operation Date shall be extended on a day-for-day basis if, notwithstanding Provider’s commercially-reasonable efforts, interconnection approval is not obtained within 60 days after the Effective Date, provided that interconnection applications are submitted within 45 days of the later of (a) the Effective Date and (b) finalization of the System layout.

2.2 Purchase Option. On any Purchase Date, so long as a Purchaser Default shall not have occurred and be continuing, Purchaser has the option to purchase the System for a purchase price (the “Option Price”) equal to the greater of (a) the Fair Market Value of the System as of the Purchase Date, or (b) the Early Termination Fee as of the Purchase Date, as specified in Schedule 3, Column 2 of the Special Conditions. To exercise its purchase option, Purchaser shall, not less than one hundred and eighty (180) days prior to the proposed Purchase Date, provide written notice to Provider of Purchaser’s intent to exercise its option to purchase the System on such Purchase Date. Within thirty (30) days of receipt of Purchaser’s notice, Provider shall specify the Option Price, and Purchaser shall then have a period of thirty (30) days after notification to confirm or retract its decision to exercise the purchase option or, if the Option Price is equal to the Fair Market Value of the System, to dispute the determination of the Fair Market Value of the System in accordance with Section 2.3 below. In the event Purchaser confirms its exercise of the purchase option in writing to Provider (whether before or after any determination of the Fair Market Value determined pursuant to Section 2.3), (i) the Parties shall promptly execute all documents necessary to (A) cause title to the System to pass to Purchaser on the Purchase Date, free and clear of any Liens, and (B) assign all vendor warranties for the System to Purchaser, and (ii) Purchaser shall pay the Option Price to Provider on the Purchase Date, such payment to be made in accordance with any previous written instructions delivered to Purchaser by Provider or Provider’s Financing Party, as applicable, for payments under the Agreement. Upon execution of the documents and payment of the Option Price, in each case as described in the preceding sentence, the Agreement shall terminate automatically. Payment of the Option Price shall be in lieu of and instead of any payments as described in Section 2.2 hereof. In the event Purchaser retracts its exercise of, or does not timely confirm, the purchase option, the provisions of the Agreement shall be applicable as if Purchaser had not exercised any option to purchase the System. At the Purchaser’s option, an independent escrow company may be used to facilitate the administration of the terms of purchase set forth herein, and the Purchaser shall pay the Option Price to the escrow company for delivery to Provider on the Purchase Date DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

upon the satisfaction of the terms of purchase set forth herein. All costs and fees of the escrow company shall be paid by Purchaser. The identity of the escrow company shall be subject to Provider’s approval, which shall not be unreasonably withheld. In the event the purchase of the System cannot be consummated on the Purchase Date due to circumstances beyond the Purchaser’s control, and the Purchaser has otherwise complied with the requirements of this section, the Purchase Date may take place on any Business Day within 30 days of the Purchase Date at no additional cost to the Purchaser.

2.3 Determination of Fair Market Value. If the Option Price indicated by Provider in accordance with Section 2.2 is equal to the Fair Market Value (as determined by Provider). Provider shall (at the same time Provider informs Purchaser of the Option Price) provide Purchaser with a written report that informs Purchaser of the calculations, price comparisons and data relied upon by Provider in determining the Fair Market Value. Provider shall also concurrently provide Purchaser with copies of all determinations, appraisals and reportsrelating to the Fair Market Value of similarly sized Systems (regardless of whether of such determinations, appraisals, or reports were prepared or made by Provider or an independent appraiser), not to exceed three (3) separate reports. If Purchaser disputes such stated Fair Market Value within thirty (30) days of receipt of such notice from Provider, then the Parties shall mutually select an independent appraiser with experience and expertise in the Energy Services industry. Such appraiser shall act reasonably and in good faith to determine Fair Market Value and shall set forth such determination in a written opinion delivered to the Parties. The valuation made by the appraiser shall be binding upon the Parties in the absence of fraud or manifest error. The costs of the appraisal shall be borne equally by the Parties.

2.4 Removal of System at Expiration. Subject to Purchaser’s exercise of its purchase option under Section 2.2, upon the expiration or earlier termination of the Agreement, Provider shall, at Provider’s sole expense and liability, remove all of its tangible property comprising the System from the Premises on a mutually convenient date but in no case later than ninety (90) days after the Termination Date. The Premises shall be returned to its original condition, except for System mounting pads or other support structures on roof-mounted systems only, and ordinary wear and tear. If the System is to be located on a roof, then in no case shall Provider’s removal of the System affect the integrity of Purchaser’s roof, which shall be as leak proof as it was prior to removal of System (other than ordinary wear and tear). For purposes of Provider’s removal of the System, Purchaser’s covenants pursuant to Section 7.2 shall remain in effect until the date of actual removal of the System. Provider shall leave the Premises in neat and clean order. If Provider fails to remove or commence substantial efforts to remove the System by such agreed upon date, Purchaser shall have the right, at its option, to remove the System to a public warehouse and restore the Premises to its original condition (other than System mounting pads or other support structures and ordinary wear and tear) at Provider’s reasonable cost; or (b) consider the System to be abandoned property which the Purchaser shall have the right to leave in place and use as the Purchaser’s property (which Provider could only access with the Purchaser’s separate written permission). Purchaser shall have one hundred eighty (180) days from the aforementioned agreed upon date to provide Provider with written notice of whether Purchaser will exercise option (a) or (b) above, and the System will be temporarily deemed to have option (b) status until the Purchaser provides such formal written notice to Provider.

2.5 Conditions of the Agreement Prior to the Commercial Operation Date. (a) In the event that any of the following events or circumstances occur prior to the Commercial Operation Date, Provider may (at its sole discretion) provide notice that it is terminating the Agreement, in which case neither Party shall have any liability to the other except for any such liabilities that may have accrued prior to such termination:
(i) Provider determines that the Premises, as is, is insufficient to accommodate the System or unsuitable for construction or operation of the System.
(ii) There exist site conditions (including environmental conditions) or construction requirements that could not have been reasonably known as of the Effective Date and that could reasonably be expected to materially increase the cost ofInstallation Work or would adversely affect the electricity production fromthe System as designed. (iii) There is a material adverse change in the regulatory environment, incentive program or federal or state tax code (including the expiration of any incentive program or tax incentives in effect as of the Effective Date) that could reasonably be expected to adversely affect the economics of the installation for Provider and its investors.

DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

(iv) Provider is unable to obtain financing for the System on terms and conditions satisfactory to it. (v) Provider has not received: (1) a fully executed a license in the form of Exhibit A of these General Conditions from the owner of the Premises (if the Purchaser is a tenant), (2) a release or acknowledgement from any mortgagee of the Premise, if required by Provider’s Financing Party, to establish the priority of its security interest in the System, and (3) such other documentation as may be reasonably requested by Provider to evidence Purchaser’s ability to meet its obligations under Section 7.2(d)(ii) to ensure that Provider will have access to the Premises throughout the Term.
(vi) There has been a material adverse change in the rights of Purchaser to occupy the Premises or Provider to construct the System on the Premises.
(viii) Purchaser has determined that there are easements, CCRs or other land use restrictions, liens or encumbrances that would materially impair or prevent the installation, operation, maintenance or removal of the System.
(ix) There has been a material adverse change in Purchaser’s credit-worthiness. (b) If any of the conditions set forth in Section 2.5(a) are partly or wholly unsatisfied, and Provider wishes to revise the information in the Special Conditions, then Provider may propose written modifications to the Special Conditions for acceptance by Purchaser. Any such proposed modifications by Provider must expressly state that they are being proposed pursuant to this section. If Purchaser does not accept such modified Special Conditions in writing, Provider may terminate this Agreement as provided in Section 2.5(a). In the event of such termination by Provider, Section 2.4 shall govern the removal of all its tangible property regarding the System from the Premises. If Purchaser accepts such revised Special Conditions, such revised Special Conditions shall be deemed an amendment of the Agreement, and the Agreement shall remain in force and effect upon execution of such amendment by both Parties.

3. CONSTRUCTION, INSTALLATION AND TESTING OF SYSTEM.

3.1 Installation Work. Provider will cause the System to be designed, engineered, installed and constructed substantially in accordance with Schedule 1 of the Special Conditions and Applicable Law. At its request, Purchaser shall have the right to review all construction plans and designs, including engineering evaluations of the impact of the System. Provider shall perform the Installation Work at the Premises between the hours of 7:00 a.m. and 7:00 p.m. in a manner that minimizes inconvenience to and interference with the use of the Premises to the extent commercially practical.

3.2 Approvals; Permits. Purchaser shall assist Provider in obtaining all necessary consents, approvals and permits required to perform Purchaser’s obligations under this Agreement, including but not limited to those related to the Local Electric Utility, any Governmental Approval, and any consents, waivers, approvals or releases required pursuant to any applicable contract or CCR. Notwithstanding the foregoing, Provider shall be solely responsible for obtaining any and all building permits for the System.

3.3 System Acceptance Testing.
(a) Provider shall conduct testing of the System in accordance with such methods, acts, guidelines, standards and criteria reasonably accepted or followed by providers of Energy Services similar to those provided by the System in the United States. Purchaser reserves the right to do independent testing and/or independent verification of Provider’s testing, provided that Purchaser provides Provider with sufficient advance notice of such activities so as to allow Provider to be present during such activities.(b) If the results of such testing indicate that the System is capable of providing the Energy Services, using such instruments and meters as have been installed for such purposes, and the System has been approved for interconnected operation by the Local Electric Utility (“Commercial Operation”), then Provider shall send a written notice to Purchaser to that effect, and the date of such notice shall be the “Commercial Operation Date.”
DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

4. SYSTEM OPERATIONS.

4.1 Provider as Owner and Operator. The System will be owned by Provider or Provider’s Financing Party and will be operated and maintained and repaired by Provider, as necessary to ensure that the System is in good working order, at Fore Front Power’s sole cost and expense; provided, any repair or maintenance costs incurred by Provider as a result of Purchaser’s negligence or breach of its obligations hereunder shall be reimbursed by Purchaser provided that Provider has first provided written notice to Purchaser, and Purchaser acknowledges that it is responsible for such work.

4.2 Metering. Provider shall install and maintain a utility grade kilowatt-hour (kWh) meter for the measurement of electrical energy provided by the System and may install a utility grade kilowatt-hour (kWh) meter for the measurement of electrical energy delivered by the Local Electric Utility and consumed at the Premises.

4.3 System Disruptions. In the event that (a) the owner or lessee of the Premises repairs the Premises for any reason not directly related to damage caused by the System, and such repair requires the partial or complete temporary disassembly or movement of the System, or (b) any act or omission of Purchaser or Purchaser’s employees, Affiliates, agents or subcontractors (collectively, a “Purchaser Act”) results in a disruption or outage in System production, then, in either case, Purchaser shall (i) pay Provider for all work required by Provider to disassemble or move the System and (ii) continue to make all payments for the Energy Services during such period of System disruption (the “Disruption Period”), and (iii) reimburse Provider for any other lost revenue during the Disruption Period, including any lost revenue associated with any reduced sales of Environmental Attributes and any reduced System-based Incentives, if applicable, during the Disruption Period. For the purpose of calculating Energy Services Payments and lost revenue for such Disruption Period, Energy Services for each month of said months shall be deemed to have been produced at the average rate over the same month for which data exists (or, if the disruption occurs within the first twelve (12) months of operation, the average over such period of operation).

5. TITLE TO SYSTEM.

5.1 Throughout the duration of the Agreement, Provider or Provider’s Financing Party shall be the legal and beneficial owner of the System at all times, and the System shall remain the personal property of Provider or Provider’s Financing Party and shall not attach to or be deemed a part of, or fixture to, the Premises. The System shall at all times retain the legal status of personal property as defined under Article 9 of the Uniform Commercial Code.

Purchaser covenants that it will use reasonable commercial efforts to place all parties having an interest in or lien upon the real property comprising the Premises on notice of the ownership of the System and the legal status or classification of the System as personal property. If there is any mortgage or fixture filing against the Premises which could reasonably be construed as attaching to the System as a fixture of the Premises, Purchaser shall provide, at Provider’s request, a disclaimer or release from such lien holder. If Purchaser is the fee owner of the Premises, Purchaser consents to the filing by Provider, on behalf of Purchaser, of a disclaimer of the System as a fixture of the Premises in the office where real estate records are customarily filed in the jurisdiction of the Premises. If Purchaser is not the fee owner, Purchaser will, at Provider’s request, use commercially reasonable efforts to obtain such consent from such owner.

5.2 Environmental Attributes And System-Based Incentives. Purchaser’s purchase of Energy Services includes Environmental Attributes, but does not include System-based incentives. System-based Incentives shall be owned by Provider or Provider’s financing party for the duration of the System’s operating life. Purchaser disclaims any right to System-based Incentives based upon the installation of the System at the Premises, and shall, at the request of Provider, execute any document or agreement reasonably necessary to fulfill the intent of this Section 5.2.

6. PRICE AND PAYMENT.

6.1 Consideration. Purchaser shall pay to Provider a monthly Energy Services Payment for the Energy Services provided during each calendar month of the Term as set forth in the Special Conditions.

DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

6.2 Invoice. Provider shall invoice Purchaser on or about the first day of each month (each, an “Invoice Date”), commencing on the first Invoice Date to occur after the Commercial Operation Date, for the Energy Services Payment in respect of the immediately preceding month. The last invoice shall include Energy Services provided only through the Termination Date of this Agreement.

6.3 Time of Payment. Purchaser shall pay all undisputed amounts due hereunder within thirty (30) days of receipt of the applicable Invoice Date.

6.4 Method of Payment. Purchaser shall make all payments under the Agreement either (a) by electronic funds transfer in immediately available funds to the account designated by Provider from time to time or (b) by check timely delivered to the location designated by Provider from time to time. All payments that are not paid when due shall bear interest accruing from the date becoming past due until paid in full at a rate equal to the Stated Rate.

6.5 Disputed Payments. If a bona fide dispute arises with respect to any invoice, Purchaser shall not be deemed in default under the Agreement and the Parties shall not suspend the performance of their respective obligations hereunder, including payment of undisputed amounts owed hereunder. If an amount disputed by Purchaser is subsequently deemed to have been due pursuant to the applicable invoice, interest shall accrue at the Stated Rate on such amount from the date becoming past due under such invoice until the date paid. In the alternative to withholding payment of an amount that is subject to a bona fide dispute, Purchaser shall also have the option to pay said amount under an express reservation of the Purchaser’s right to later seek recoupment of that amount. Any amounts so recouped shall earn interest at the Stated Rate.

7. GENERALCOVENANTS.

7.1 Provider’s Covenants. Provider covenants and agrees to the following:
(a) Notice of Damage or Emergency. Provider shall promptly notify Purchaser if it becomes aware of any damage to or loss of the use of the System or that could reasonably be expected to adversely affect the System, and immediately notify Purchaser if it becomes aware of any event or circumstance relating to the System or the Premises that poses a potential risk to human health, the environment, the System or the Premises. In the event Provider damages the Premises by any act or omission of Provider, or its employees, Affiliates, agents or subcontractors, Provider shall, at its sole cost, promptly repair said Premises to the condition existing prior to such damage.
(b) Governmental Approvals. While providing the Installation Work, Energy Services, and System Operations, Provider shall obtain and maintain and secure all Governmental Approvals required to be obtained and maintained and secured by Provider and to enable Provider to perform such obligations. (c) Health and Safety. Provider shall take all necessary and reasonable safety precautions with respect to providing the Installation Work, Energy Services, and System Operations that shall comply with all Applicable Laws pertaining to the health and safety of persons and real and personal property. All work shall be performed by licensed professionals, as may be required by Applicable Law, and in accordance with such methods, acts, guidelines, standards and criteria reasonably accepted or followed by a majority of System integrators in the United States. (d) Liens. Other than a Financing Party’s security interest in or ownership of the System, Provider shall not directly or indirectly cause, create, incur, assume or suffer to exist any mortgage, pledge, lien (including mechanics’, labor or materialman’s lien), charge, security interest, encumbrance or claim of any nature (“Liens”) on or with respect to the Premises or any interest therein, in each case to the extent such Lien arises from or is related to Provider’s performance or non-performance of its obligations hereunder. If Provider breaches its obligations under this Section, it shall (i) immediately notify Purchaser in writing, (ii) promptly cause such Lien to be discharged and released of record without cost to Purchaser, and (iii) defend (with counsel subject to the reasonable approval of Purchaser), indemnify and hold harmless Purchaser against all costs and expenses (including reasonable attorneys’ fees and court costs at trial and on appeal) incurred in discharging and releasing such Lien; provided, Provider shall have the right to contest any such Lien, so long as it provides a statutory bond or other reasonable assurances of DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

payment that either remove such Lien from title to the Premises or that assure that any adverse judgment with respect to such Lien will be paid without affecting title to the Premises. (e) Hazardous Materials. Provider shall indemnify, defend and hold harmless Purchaser from and against any and all claims, actions, causes of action, suits, proceedings, costs, expenses (including attorney’s fees), liabilities, damages, penalties, fines, losses and liens of any type resulting from (i) any release of Hazardous Materials caused or permitted by Provider, or (iii) any violation or alleged violation of any Environmental Laws by Provider.

7.2 Purchaser’s Covenants. Purchaser covenants and agrees as follows:
(a) Notice of Damage or Emergency. Purchaser shall promptly notify Provider if it becomes aware of any damage to or loss of the use of the System or that could reasonably be expected to adversely affect the System, and immediately notify Provider it becomes aware of any event or circumstance that poses an imminent risk to human health, the environment, the System or the Premises. In the event of damage to Purchaser’s Premises caused by, or as the result of, the System, Provider shall, at its sole cost, repair said Premises to the condition existing prior to such damage.
(b) Liens. Purchaser shall not directly or indirectly cause, create, incur, assume or suffer to exist any Liens on or with respect to the System. If Purchaser breaches its obligations under this Section, it shall immediately notify Provider in writing, shall promptly cause such Lien to be discharged and released of record without cost to Provider, and shall indemnify Provider against all costs and expenses (including reasonable attorneys’ fees and court costs at trial and on appeal) incurred in discharging and releasing such Lien. (c) Consents and Approvals. To the extent that only Purchaser is authorized to request, obtain or issue any necessary approvals, Governmental Approvals, rebates or other financial incentives, Purchaser shall cooperate with Provider to obtain or issue such approvals, Governmental Approvals, rebates or other financial incentives in the name of Provider. Purchaser shall provide to Provider copies of all Governmental Approvals and CCRs applicable to the Premises, other than those obtained by Provider or to which Provider is a party. (d) Access to Premises, Grant of License.
(i) Purchaser hereby grants to Provider a commercial license coterminous with the Term containing all the rights necessary for Provider to use and occupy portions of the Premises, subject to the terms and conditions hereof, for the installation, operation, maintenance and removal of the System pursuant to the terms of this Agreement, including ingress and egress rights to the Premises for Provider and its employees, contractors and subcontractors and access to electrical panels and conduits to interconnect or disconnect the System with the Premises’ electrical wiring.

If Provider’s financing structure requires that Purchaser enter into a license agreement directly with Financing Party, Provider shall enter into such an agreement which shall be in a form set forth by Provider and which contain substantially the same rights as set forth in this Section 7.2(d). (ii) Regardless of whether Purchaser is owner of the Premises or leases the Premises from a landlord, Purchaser hereby covenants that Provider shall have reasonable access to the Premises and System during the Term of this Agreement and for so long as needed after termination to remove the System pursuant to the applicable provisions herein, and neither Purchaser nor Purchaser’s landlord will unreasonably interfere or mishandle any Provider equipment or the System without written authorization from Provider; provided, Purchaser and Purchaser’s landlord shall at all times have access to and the right to observe the Installation Work or System removal. (iii) If Purchaser is a lessee of the Premises, Purchaser further covenants that it shall deliver to Provider, a license fromPurchaser’slandlord in substantially the form attached hereto as Exhibit A of these General Conditions. (e) Temporary storage space during installation or removal. Purchaser shall use commercially reasonable efforts to obtain an agreement for sufficient space at the Premises for the temporary storage and staging of tools, materials and equipment and for the parking of construction crew vehicles and temporary construction trailers and facilities reasonably necessary during the Installation Work, System Operations or System removal, and access DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

for rigging and material handling; provided that such temporary storage and staging does not unreasonably interfere with Purchaser’s use of the Premises.
(f) On or before the Effective Date of each Special Conditions Purchaser shall identify and set forth in each Special Conditions and unless previously delivered, Purchaser shall, to the extent the same are known and available, deliver to Provider copies of all reports, agreements, plans, inspections, tests, studies or other materials concerning the presence of Hazardous Materials at, from or on the Premises including, but not limited to, soil reports, design drawings, environmental reports, sampling results or other documents relating to Hazardous Materials that have been identified or may be present on, in or under the Premises (collectively, the “Environmental Documents”).

Thereafter, Purchaser agrees to provide copies of any new Environmental Documents within ten (10) days of receipt of same. Purchaser hereby agrees to furnish such other documents in Purchaser’s possession or control with respect to Governmental Approvals compliance with Environmental Law or Hazardous Materials with respect to the Premises as may be reasonably requested by Provider from time to time. (g) Notwithstanding anything to the contrary in the Agreement, Purchaser shall operate and maintain the Premises to comply with the requirements of all applicable Environmental Laws that limit or govern the conditions or uses of the Premises, without impairing or interfering with Provider’s construction, operation and ownership of the System or occupancy of the Premises. In no event shall Provider have any liability or obligation with respect to any Pre-existing Environmental Condition on, in or under the Premises, or operations or maintenance of the Premises required to comply with Environmental Laws with respect to Pre-Existing Environmental Conditions. (j) Purchaser shall indemnify, hold harmless and defend Provider from and against all claims, pay costs and expenses, and conduct all actions required under Environmental Laws in connection with (i) the existence at, on, above, below or near the Premises of any Pre-existing Environmental Conditions, and (ii) any Hazardous Materials released, spilled or deposited at, on above or below the Premises by the Purchaser.

8. REPRESENTATIONS & WARRANTIES.

8.1 Representations and Warranties of Both Parties. In addition to any other representations and warranties contained in the Agreement, each Party represents and warrants to the other as of the Effective Date that:
(a) it is duly organized and validly existing and in good standing in the jurisdiction of its organization; (b) it has the full right and authority to enter into, execute, deliver, and perform its obligations under the Agreement;
(c) it has taken all requisite corporate or other action to approve the execution, delivery, and performance of the Agreement;
(d) the Agreement constitutes its legal, valid and binding obligation enforceable against such Party in accordance with its terms, except as may be limited by applicable bankruptcy and other similar laws now or hereafter in effect;
(e) there is no litigation, action, proceeding or investigation pending or, to the best of its knowledge, threatened before any court or other Governmental Authority by, against, affecting or involving any of its business or assetsthat could reasonably be expected to adversely affect its ability to carry out the transactions contemplated herein; (f) its execution and performance of the Agreement and the transactions contemplated hereby do not and will not constitute a breach of any term or provision of, or a default under, (i) any contract, agreement or Governmental Approval to which it or any of its Affiliates is a party or by which it or any of its Affiliates or its or their property is bound, (ii) its organizational documents, or (iii) any Applicable Laws; and (g) its execution and performance of the Agreement and the transactions contemplated hereby do not and will not require any consent from a third party, including any Governmental Approvals from any Governmental Authority, that are not identified in the Special Conditions.

DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

8.2 Representations of Purchaser. Purchaser represents and warrants to Provider as of the Effective Date that:
(a) Purchaser acknowledges that it has been advised that part of the collateral securing the financial arrangements for the System may be the granting of a first priority perfected security interest (the “Security Interest”) in the System to a Financing Party;
(b) To Purchaser’s knowledge, the granting of the Security Interest will not violate any term or condition of any covenant, restriction, lien, financing agreement, or security agreement affecting the Premises; (c) Purchaser is aware of no existing lease, mortgage, security interest or other interest in or lien upon the Premises that could attach to the System as an interest adverse to Provider’s Financing Party’s Security Interest therein;
(d) To Purchaser’s knowledge, there exists no event or condition which constitutes a default, or would, with the giving of notice or lapse of time, constitute a default under this Agreement; (e) To Purchaser’s knowledge, Purchaser has identified and disclosed to Provider in the Special Conditions (i) all Environmental Documents, (ii) all CCRs, Governmental Approvals or other restrictions imposed under Applicable Laws with respect to the use of the Premises that could affect the construction and operation of the System, and (iii) all environmental reports, studies, data or other information relating to the use of the Premises by Provider within the Purchaser’s possession or control;
(f) To Purchaser’s knowledge, the Premises is in compliance with Environmental Laws, and that Purchaser holds and is in compliance with all Governmental Approvals required for the ownership and any current operations or activities conducted at the Premises; and (g) Purchaser has identified in the Special Conditions and delivered to Provider all material reports and information concerning the presence or release of Hazardous Materials on, in or under the Premises.

Any Financing Party shall be an intended third-party beneficiary of this Section 8.2.

8.3 EXCLUSION OF WARRANTIES. EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY

SET FORTH HEREIN, THE INSTALLATION WORK, SYSTEM OPERATIONS, AND ENERGY SERVICES PROVIDED BY PROVIDER TO PURCHASER PURSUANT TO THIS AGREEMENT SHALL BE “AS-IS WHERE-IS.” NO OTHER WARRANTY TO PURCHASER OR ANY OTHER PERSON, WHETHER EXPRESS,

IMPLIED OR STATUTORY, IS MADE AS TO THE INSTALLATION, DESIGN, DESCRIPTION, QUALITY,

MERCHANTABILITY, COMPLETENESS, USEFUL LIFE, FUTURE ECONOMIC VIABILITY, OR FITNESS

FOR ANY PARTICULAR PURPOSE OF THE SYSTEM, THE ENERGY SERVICES OR ANY OTHER SERVICE

PROVIDED HEREUNDER OR DESCRIBED HEREIN, OR AS TO ANY OTHER MATTER, ALL OF WHICH ARE EXPRESSLY DISCLAIMED BY PROVIDER.

9. TAXES AND GOVERNMENTAL FEES.

9.1 Purchaser Obligations. Purchaser shall reimburse and pay for any documented taxes, fees or charges imposed or authorized by any Governmental Authority and paid by Provider due to Provider’s sale of the Energy Services to Purchaser (other than income taxes imposed upon Provider). Provider shall notify Purchaser in writing with a detailed statement of such amounts, which shall be invoiced by Provider and payable by Purchaser. Purchaser shall timely report, make filings for, and pay any and all sales, use, income, gross receipts or other taxes, and any and all franchise fees or similar fees assessed against it due to its purchase of the Energy Services. This Section 9.1 excludes taxes specified in Section 9.2.

9.2 Provider Obligations. Subject to Section 9.1 above, Provider shall be responsible for all income, gross receipts, ad valorem, personal property or real property or other similar taxes and any and all franchise fees or similar fees assessed against it due to its ownership of the System.

DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

10. FORCE MAJEURE.

10.1 Definition. “Force Majeure Event” means any act or event that prevents the affected Party from performing its obligations in accordance with the Agreement, if such act or event is beyond the reasonable control, and not the result of the fault or negligence, of the affected Party and such Party had been unable to overcome such act or event with the exercise of due diligence (including the expenditure of reasonable sums). Subject to the foregoing conditions, “Force Majeure Event” shall include without limitation the following acts or events: (i) natural phenomena, such as storms, hurricanes, floods, lightning, volcanic eruptions and earthquakes; (ii) explosions or fires arising from lightning or other causes unrelated to the acts or omissions of the Party seeking to be excused from performance; (iii) acts of war or public disorders, civil disturbances, riots, insurrection, sabotage, epidemic, terrorist acts, or rebellion; (iv) strikes or labor disputes (except strikes or labor disputes caused solely by employees of Provider or as a result of such party’s failure to comply with a collective bargaining agreement); (v) action or inaction by a Governmental Authority (unless Purchaser is a Governmental Authority and Purchaser isthe Party whose performance is affected by such action nor inaction). A Force Majeure Event shall not be based on the economic hardship of either Party, or upon the expiration of any lease of the Premises by the Purchaser from the owner of the Premises.

10.2 Excused Performance. Except as otherwise specifically provided in the Agreement, neither Party shall be considered in breach of the Agreement or liable for any delay or failure to comply with the Agreement (other than the failure to pay amounts due hereunder), if and to the extent that such delay or failure is attributable to the occurrence of a Force Majeure Event; provided, the Party claiming relief under this Article 10 shall as soon as practicable after becoming aware of the circumstances constituting Force Majeure (i) notify the other Party in writing of the existence of the Force Majeure Event, (ii) exercise all reasonable efforts necessary to minimize delay caused by such Force Majeure Event, (iii) notify the other Party in writing of the cessation or termination of said Force Majeure Event and (iv) resume performance of its obligations hereunder as soon as practicable thereafter; provided, Purchaser shall not be excused from making any payments and paying any unpaid amounts due in respect of Energy Services delivered to Purchaser prior to the Force Majeure Event performance interruption.

10.3 Termination in Consequence of Force Majeure Event. If a Force Majeure Event shall have occurred that has affected Provider’s performance of its obligations hereunder and that has continued for a continuous period of one hundred eighty (180) days, then either Party shall be entitled to terminate the Agreement upon ninety (90) days’ prior written notice to the other Party. If at the end of such ninety (90) day period such Force Majeure Event shall still continue, the Agreement shall automatically terminate. Upon such termination for a Force Majeure Event, neither Party shall have any liability to the other (other than any such liabilities that have accrued prior to such termination), other than Providers obligations as set forth in Section 2.4.

11. DEFAULT.

11.1 Provider Defaults and Purchaser Remedies.
(a) Provider Defaults. The following eventsshall be defaults with respect to Provider (each, a “Provider Default”):
(i) A Bankruptcy Event shall have occurred with respect to Provider; (ii) Provider fails to pay Purchaser any undisputed amount owed under the Agreement within thirty (30) days from receipt of notice from Purchaser of such past due amount; and (iii) Provider breaches any material representation, covenant or other term of the Agreement and (A) if such breach can be cured within thirty (30) days after Purchaser’s written notice of such breach and Provider fails to so cure, or (B) Provider fails to commence and pursue a cure within such thirty (30) day period if a longer cure period is needed.
(b) Purchaser’s Remedies. If a Provider Default described in Section 11.1(a) has occurred and is continuing, in addition to other remedies expressly provided herein, and subject to Article 12, Purchaser may terminate the Agreement and exercise any other remedy it may have at law or equity or under the Agreement.

DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

11.2 Purchaser Defaults and Provider’s Remedies.
(a) Purchaser Default. The following events shall be defaults with respect to Purchaser (each, a “Purchaser Default”):
(i) A Bankruptcy Event shall have occurred with respect to Purchaser; (ii) Purchaser breaches any material representation, covenant or other term of the Agreement if (A) such breach can be cured within thirty (30) days after Provider’s notice of such breach and Purchaser fails to so cure, or (B) Purchaser fails to commence and pursue said cure within such thirty (30) day period if a longer cure period is needed; and
(iii) Purchaser fails to pay Provider any undisputed amount due Provider under the Agreement within thirty (30) days from receipt of notice from Provider of such past due amount. (b) Provider’s Remedies. If a Purchaser Default described in Sections 11.2(a) has occurred and is continuing, in addition to other remedies expressly provided herein, and subject to Article 12, Provider may terminate this Agreement and upon such termination, (A) Provider shall be entitled to receive from Purchaser the Early Termination Fee, and (B) Provider may exercise any other remedy it may have at law or equity or under the Agreement.

11.3 Cross Default. With respect to any Systems that are co-located at the same Premises, if a Party defaults under the Agreement related one such System, it shall also be a default of such Party under the Agreement(s) related to the other co-located System(s); provided, a cure of the original default shall be a cure of any such cross default. In the event of a cross default, the non-defaulting Party shall be entitled to exercises its rights with respect to all such Agreements, including terminating all such Agreements (but not less than all such Agreements) and, if Provider terminates the Agreements due to a Purchaser Default, Purchaser shall pay the Early Termination Fees for all such terminated Agreements.

11.4 Removal of System. Upon any termination of the Agreement pursuant to this Article 11, Provider will remove the System pursuant to Section 2.4 hereof, absent any purchase of the System by Purchaser pursuant to Section 2.2 hereof.

12. LIMITATIONS OF LIABILITY.

12.1 Except as expressly provided herein, neither Party shall be liable to the other Party or its Indemnified Persons for any special, punitive, exemplary, indirect, or consequential damages, losses or damages for lost revenue or lost profits, whether foreseeable or not, arising out of, or in connection with the Agreement, provided, the limits of liability under this Section 12.1 shall not apply with respect to indemnity obligations hereunder in respect of thirdparty personal injury or environmental claims.

12.2 A Party’s maximum liability to the other Party under the Agreement, shall be limited to the aggregate Estimated Remaining Payments as of the date of the events giving rise to such liability, provided, the limits of liability under this Section 12.2 shall not apply with respect to (i) indemnity obligations hereunder in respect of personal injury or environmental claims, (ii) any obligation of Purchaser to pay Energy Service Payments, the Early Termination Fee or the Option Price (iii) any obligation of Provider to pay for Lost Savings in accordance with the Special Conditions, if applicable, (iv) any obligation of Provider to pay for Delay Liquidated Damages, and (v) any obligations of Provider under section 2.4 relating to removal of System at Expiration Date, and (vi) any insured loss.

13. ASSIGNMENT.

13.1 Assignment by Provider. Provider shall not sell, transfer or assign (collectively, an “Assignment”) the Agreement or any interest therein, without the prior written consent of Purchaser, which shall not be unreasonably withheld, conditioned or delayed; provided, Purchaser agrees that Provider may assign this Agreement without the consent of the Purchaser to an affiliate of Provider or any party providing financing for the System. In the event that Provider identifies a secured Financing Party in the Special Conditions, or in a subsequent notice to Purchaser, then DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

Purchaser shall comply with the provisions set forth in Exhibit B of these General Terms and Conditions and agrees to provide such estoppels and acknowledgments as Provider may reasonably request from time to time. Any Financing Party shall be an intended third-party beneficiary of this Section 13.1. Any Assignment by Provider without obtaining the prior written consent and release of Purchaser, when such consent is required by this Section 13.1, shall not release Provider of its obligations hereunder.

13.2 Acknowledgment of Collateral Assignment. In the event that Provider identifies a secured Financing Party in the Special Conditions, or in a subsequent notice to Purchaser, then Purchaser hereby acknowledges:
(a) The collateral assignment by Provider to the Financing Party, of Provider’s right, title and interest in, to and under the Agreement, as consented to under Section 13.1 of the Agreement. (b) That the Financing Party as such collateral assignee shall be entitled to exercise any and all rights of lenders generally with respect to Provider’s interests in this Agreement. (c) That it has been advised that Provider has granted a first priority perfected security interest in the System to the Financing Party and that the Financing Party has relied upon the characterization of the System as personal property, as agreed in this Agreement in accepting such security interest as collateral for its financing of the System.

Any Financing Party shall be an intended third- party beneficiary of this Section 13.2.

13.3 Assignment by Purchaser. Purchaser shall not assign the Agreement or any interest therein, without Provider’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Any Assignment by Purchaser without the prior written consent of Provider shall not release Purchaser of its obligations hereunder.

14. NOTICES.

14.1 Notice Addresses. Unless otherwise provided in the Agreement, all notices and communications concerning the Agreement shall be in writing and addressed to the other Party (or Financing Party, as the case may be) at the addresses set forth in the Special Conditions, or at such other address as may be designated in writing to the other Party from time to time.

14.2 Notice. Unless otherwise provided herein, any notice provided for in the Agreement shall be hand delivered, sent by registered or certified U.S. Mail, postage prepaid, or by commercial overnight delivery service, and shall be deemed delivered to the addressee or its office when received at the address for notice specified above when hand delivered, upon confirmation of sending when sent by facsimile (if sent during normal business hours or the next Business Day if sent at any other time), on the Business Day after being sent when sent by overnight delivery service (Saturdays, Sundays and legal holidays excluded), or five (5) Business Days after deposit in the mail when sent by U.S. mail.

14.3 Address for Invoices. All invoices under the Agreement shall be sent to the address provided by Purchaser. Invoices shall be sent by regular first class mail postage prepaid.

15. CONFIDENTIALITY.

15.1 Confidentiality Obligation. The Parties acknowledge and agree that in the course of performing under this Agreement, each will disclose to the other confidential information, including trade secrets, business plans, strategies, financial information, proprietary, patented, licensed, copyrighted or trademarked information, and/or technical information regarding the financing, design, operation and maintenance of the System or of Purchaser’s business (“Confidential Information”) relating to each Party’s business. Except as provided herein, each Party agrees not to disclose the Confidential Information of the other to any third party and to treat it with the same degree of care as it would its own Confidential Information. Confidential Information will not include information that: (i) is or DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

becomes publicly available through no wrongful act of the receiving Party; (ii) was lawfully obtained by the receiving Party from a third party who was without any obligation to maintain the Confidential Information as confidential; (iii) was previously known to the receiving Party without any obligation to keep it confidential; or (iv) was independently developed by the receiving Party without the use of or reliance upon the Confidential Information of the disclosing Party. All proprietary and other information received by Provider, whether received in connection with Provider’s proposal to Purchaser or in connection with any Energy Management Services performed by Provider, will be disclosed upon receipt of a request for disclosure, pursuant to the California Public Records Act; provided, however, that, if any information is set apart and clearly marked “trade secret” or “Confidential Information” when it is provided to Purchaser, Purchaser shall give notice to Provider of any request for the disclosure of such information. Provider shall then have five (5) days from the date it receives such notice to enter into an agreement with the Purchaser, satisfactory to Purchaser’s attorney, providing for the defense of, and complete indemnification and reimbursement for all costs (including plaintiff’s attorney fees) incurred by Purchaser in any legal action to compel the disclosure of such information under the California Public Records Act. The Provider shall have sole responsibility for defense of the actual “trade secret” or “Confidential Information” designation of such information. The parties understand and agree that any failure by Provider to respond to the notice provided by Purchaser and/or to enter into an agreement with Purchaser, in accordance with this Section, shall constitute a complete waiver by Provider of any rights regarding the information designated “trade secret” or “Confidential Information” by Provider, and such information shall be disclosed by Purchaser pursuant to applicable procedures required by the Public Records Act.

15.2 Permitted Disclosures. Notwithstanding any other provision herein, neither Party shall be required to hold confidential any information that:
(a) Becomes publicly available other than through the receiving Party; (b) Is required to be disclosed by a Governmental Authority, under Applicable Law or pursuant to a validly issued subpoena or required filing, but a receiving Party subject to any such requirement shall promptly notify the disclosing Party of such requirement;
(c) Is independently developed by the receiving Party; or (d) Becomes available to the receiving Party without restriction from a third party under no obligation of confidentiality.

15.3 Goodwill and Publicity. Neither Party shall use the name, trade name, service mark, or trademark of the other Party in any promotional or advertising material without the prior written consent of such other Party.

The Parties shall coordinate and cooperate with each other when making public announcements related to the execution and existence of the Agreement, and each Party shall have the right to promptly review, comment upon, and approve any publicity materials, press releases, or other public statements by the other Party that refer to, or that describe any aspect of, the Agreement; provided, no such publicity releases or other public statements (except for filings or other statements or releases as may be required by Applicable Law) shall be made by either Party without the prior written consent of the other Party. At no time will either Party acquire any rights whatsoever to any trademark, trade name, service mark, logo or other intellectual property right belonging to the other Party.

Notwithstanding the foregoing, Purchaser agrees that Provider may, at its sole discretion, take photographs of the installation process of the System and/or the completed System, and Provider shall be permitted to use such images (regardless of media) in its marketing efforts, including but not limited to use in brochures, advertisements, websites and news outlet or press release articles. The images shall not include any identifying information without Purchaser permission and the installation site shall not be disclosed beyond the type of establishment (such as “Retail Store,” “Distribution Center,” or such other general terms), the city and state.

15.4 Enforcement of Confidentiality Obligation. Each Party agrees that the disclosing Party would be irreparably injured by a breach of this Article 15 by the receiving Party or its Representatives or other Person to whom the receiving Party discloses Confidential Information of the disclosing Party and that the disclosing Party may be entitled to equitable relief, including injunctive relief and specific performance, in the event of any breach of the provisions of this Article 15. To the fullest extent permitted by Applicable Law, such remedies shall not be deemed to be the exclusive remedies for a breach of this Article 15, but shall be in addition to all other remedies available at law or in equity.

DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

16. INDEMNITY.

16.1 Provider Indemnity. Subject to Article 12, Provider will indemnify, defend and hold harmless Purchaser, Purchaser’s permitted successors and assigns and their respective officials, directors, officers, members, shareholders and employees (collectively, the “Purchaser Indemnified Parties”) from any and all claims, demands, suits, proceedings, loss, cost and damages of every kind and description, including any attorney’s fees or litigation expenses, which might be brought against or incurred by any Purchaser Indemnified Party on account of loss or damage to any property or for injuries to or death of any person, caused by, arising out of, or contributed to, in whole or in part, by reasons of any act, omission, professional error, fault, mistake, or negligence of Provider, its employees, agents, representatives, or subcontractors in connection with or incident to this Agreement, or arising out of worker’s compensation claims, unemployment compensation claims, or unemployment disability compensation claims of employees of Provider, or its subcontractors or claims under similar laws or obligations. Provider’s indemnification obligation will not extend to liability caused by the negligence of any Purchaser Indemnified Party.

16.2 Purchaser Indemnity. Subject to Article 12, Purchaser will indemnify, defend and hold harmless Provider, Provider’s permitted successors and assigns and their respective directors, officers, members, shareholders and employees(collectively, the “Provider Indemnified Parties”) from any and all claims, demands, suits, proceedings, loss, cost and damages of every kind and description, including any attorney’s fees or litigation expenses, which might be brought against or incurred by any Provider Indemnified Party on account of loss or damage to any property or for injuries to or death of any person, caused by, arising out of, or contributed to, in whole or in part, by reasons of any act, omission, professional error, fault, mistake, or negligence of Purchaser, its employees, agents, representatives, or subcontractors in connection with or incident to this Agreement, or arising out of worker’s compensation claims, unemployment compensation claims, or unemployment disability compensation claims of employees of Vendor, or its subcontractors or claims under similar laws or obligations. Purchaser’s indemnification obligation will not extend to liability caused by the negligence of any Provider Indemnified Party.

17. INSURANCE.

17.1 Generally. Purchaser and Provider shall each maintain the following insurance coverages in full force and effect throughout the Term either through insurance policies or acceptable self-insured retentions: (a) Workers’ Compensation Insurance as may be from time to time required under applicable federal and state law, (b) Commercial General Liability Insurance with limits of not less than $2,000,000 general aggregate, $1,000,000 per occurrence, and (c) automobile insurance with commercially reasonable coverages and limits. Additionally, Provider shall carry adequate property loss insurance on the System which need not be covered by Purchaser’s property coverage. The amount and terms of insurance coverage will be determined at Provider’s sole discretion.

17.2 Certificates of Insurance. Each Party, upon request, shall furnish current certificates evidencing that the insurance required under Section 17.1 is being maintained. Each Party’s insurance policy provided hereunder shall contain a provision whereby the insured agrees to give the other Party thirty (30) days’ written notice before the insurance is cancelled or materially altered.

17.3 Additional Insureds. Each Party’s insurance policy shall be written on an occurrence basis and shall include the other Party as an additional insured as its interest may appear.

17.4 Insurer Qualifications. All insurance maintained hereunder shall be maintained with companies either rated no less than A- as to Policy Holder’s Rating and Financial Size Category Class VII (or larger) in the current edition of Best’s Insurance Guide (or with an association of companies each of the members of which are so rated) or having a parent company’s debt to policyholder surplus ratio of 1:1.

17.5 Rights of enforcement. In the event any policy of insurance required under this Agreement does not comply with these requirements or is canceled and not replaced, either party has the right but not the duty to obtain the insurance it deems necessary and any premium paid by that party will be promptly reimbursed the non-compliant party.

DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

18. MISCELLANEOUS.

18.1 Integration; Exhibits. The Agreement, together with the Exhibits and Schedules attached thereto or incorporated by reference, constitute the entire agreement and understanding between Provider and Purchaser with respect to the subject matter thereof and supersedes all prior agreements relating to the subject matter hereof which are of no further force or effect. The Exhibits and Schedules attached to the Agreement, including these General Conditions as incorporated by reference, are integral parts of the Agreement and are an express part of the Agreement.

In the event of a conflict between the provisions of these General Conditions and any applicable Special Conditions, the provisions of the Special Conditions shall prevail.

18.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Provider and Purchaser.

18.3 Industry Standards. Except as otherwise set forth herein, for the purpose of the Agreement the normal standards of performance within the Energy Services industry in the relevant market shall be the measure of whether a Party’s performance is reasonable and timely. Unless expressly defined herein, words having well-known technical or trade meanings shall be so construed.

18.4 Cumulative Remedies. Except as set forth to the contrary herein, any right or remedy of Provider or Purchaser shall be cumulative and without prejudice to any other right or remedy, whether contained herein or not.

18.5 Sovereign Immunity. To the extent permitted by Applicable Law, Purchaser hereby waives any defense of sovereign immunity that Purchaser might otherwise have in connection with any action taken by Provider to enforce its rights against Purchaser under this Agreement.

18.6 Limited Effect of Waiver. The failure of Provider or Purchaser to enforce any of the provisions of the Agreement, or the waiver thereof, shall not be construed as a general waiver or relinquishment on its part of any such provision, in any other instance or of any other provision in any instance.

18.7 Survival. The obligations under Section 2.4 (Removal of System), Section 7.1 (Provider Covenants), Sections 7.2(d), (e), (f), (g) and (j) (Purchaser Covenants), Section 8.3 (Exclusion of Warranties), Article 9 (Taxes and Governmental Fees), Article 12 (Limitation of Liability), Article 14 (Notices), Article 15 (Confidentiality), Article 18 (Miscellaneous), all payment or indemnification obligations accrued prior to termination of this Agreement, or pursuant to other provisions of this Agreement that, by their sense and context, are intended to survive termination of this Agreement shall survive the expiration or termination of this Agreement for any reason.

18.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without reference to any choice of law principles. The Parties agree that the courts of the State of California and the Federal Courts sitting therein shall have jurisdiction over any action or proceeding arising under the Agreement to the fullest extent permitted by Applicable Law. The Parties waive to the fullest extent permitted by Applicable Law any objection it may have to the laying of venue of any action or proceeding under this Agreement any courts described in this Section 18.8.

18.9 Severability. If any term, covenant or condition in the Agreement shall, to any extent, be invalid or unenforceable in any respect under Applicable Law, the remainder of the Agreement shall not be affected thereby, and each term, covenant or condition of the Agreement shall be valid and enforceable to the fullest extent permitted by Applicable Law and, if appropriate, such invalid or unenforceable provision shall be modified or replaced to give effect to the underlying intent of the Parties and to the intended economic benefits of the Parties.

18.10 Relation of the Parties. The relationship between Provider and Purchaser shall not be that of partners, agents, or joint ventures for one another, and nothing contained in the Agreement shall be deemed to constitute a partnership or agency agreement between them for any purposes, including federal income tax purposes.

Provider and Purchaser, in performing any of their obligations hereunder, shall be independent contractors or independent parties and shall discharge their contractual obligations at their own risk.

DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

18.11 Successors and Assigns. This Agreement and the rights and obligations under the Agreement shall be binding upon and shall inure to the benefit of Provider and Purchaser and their respective successors and permitted assigns.

18.12 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument.

18.13 Electronic Delivery. This Agreement may be duly executed and delivered by a Party by execution and facsimile or electronic, “pdf” delivery of the signature page of a counterpart to the other Party.

18.14 Liquidated Damages Not Penalty. Purchaser acknowledges that the Early Termination Fee constitutes liquidated damages, and not penalties, in lieu of Provider’s actual damages resulting from the early termination of the Agreement. Purchaser further acknowledges that Provider’s actual damages may be impractical and difficult to accurately ascertain, and in accordance with Purchaser’s rights and obligations under the Agreement, the Early Termination Fee constitutes fair and reasonable damages to be borne by Purchaser in lieu of Provider’s actual damages. Provider acknowledges that Purchaser’s actual damages may be impractical and difficult to accurately ascertain, and in accordance with Provider’s rights and obligations under the Agreement, the Delay Liquidated Damages constitute fair and reasonable damages to be borne by Provider in lieu of the Purchaser’s actual damages.

18.15 Attorney’s Fees. In the event that any suit or action is instituted under or in relation to this Agreement, including without limitation to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.
[Remainder of page intentionally left blank.]
DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

These General Terms and Conditions are witnessed and acknowledged by Provider and Purchaser below. Neither Provider nor Purchaser shall have any obligations or liability resulting from its witnessing and acknowledging these General Terms and Conditions.
“PROVIDER”: FFP BTM SOLAR, LLC
By:

Name:

Title:

Date:

Go Mizoguchi
President
December 12, 2018
“PURCHASER”: THE CITY OF SAN LUIS OBISPO
By:

Name: Derek Johnson
Title: City Manager
Date:

APPROVED AS TO FORM
J. Christine Dietrick
City Attorney
DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

Exhibit A
of General Conditions
[Landlord’s Address]
Attn: Authorized Representative
[PURCHASER’SLETTERHEAD]
Re: Proposed Energy System Installation at [Address of Premises] Lease dated [ ] between [PURCHASER] and [LANDLORD] (the “Lease”) Dear Authorized Representative:

As has been discussed with you, [PURCHASER] (“Purchaser”) and [Forefront Power], LLC and an affiliate of Forefront Power, LLC (“Provider”) have entered into an Energy Services Agreement, pursuant to which Provider will install, finance, operate, and maintain a [solar photovoltaic] [battery storage] system at the above-referenced premises which [PURCHASER] leases from you pursuant to the Lease. By signing below and returning this letter to us, you confirm that:

1. The [solar photovoltaic] [battery storage] system and the renewable energy (including environmental credits and related attributes) produced by the system are personal property, and shall not be considered the property (personal or otherwise) of [LANDLORD] upon installation of the system at the premises. Landlord consents to the filing by Provider of a disclaimer of the System as a fixture of the Premises in the office where real estate records are customarily filed in the jurisdiction of the Premises.

2. Provider or its designee (including finance Providers) shall have the right without cost to access the premises in order to install, operate, inspect, maintain, and remove the [solar photovoltaic] [battery storage] system. [LANDLORD] will not charge Purchaser or Provider any rent for such right to access the premises.

3. [LANDLORD] has been advised that the finance Providers for the [solar photovoltaic] [battery storage] system have a first priority perfected security interest in the system. Provider and the finance Providers for the [solar photovoltaic] [battery storage] system (including any system lessor or other lender) are intended beneficiaries of [LANDLORD]’s agreements in this letter.

4. [LANDLORD] will not take any action inconsistent with the foregoing.

We thank you for your consideration of this opportunity and we look forward to working with you in our environmental campaign to increase the utilization of clean, renewal energy resources.

Very truly yours,
[PURCHASER]
DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

By:_
Name:

Title: Authorized Representative
Acknowledged and agreed by:
[LANDLORD]
By:

Name:

Title: Authorized Representative
DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

Exhibit B
of General Conditions
Certain Agreements for the Benefit of the Financing Parties Purchaser acknowledges that Provider will be receiving financing accommodations from one or more Financing Parties and that Provider may sell or assign the System or this Agreement and/or may secure Provider’s obligations by, among other collateral, a pledge or collateral assignment of this Agreement and a first security interest in the System. In order to facilitate such necessary sale, conveyance, or financing, and with respect to any such Financing Party, Purchaser agrees as follows:
(a) Consent to Collateral Assignment. Purchaser consents to either the assignment, sale or conveyance to a Financing Party or the collateral assignment by Provider to a Financing Party, of Provider’s right, title and interest in and to this Agreement.
(b) Notices of Default. Purchaser will deliver to the Financing Party, concurrently with delivery thereof to Provider, a copy of each notice of default given by Purchaser under the Agreement, inclusive of a reasonable description of Provider default. No such notice will be effective absent delivery to the Financing Party. Purchaser will not mutually agree with Provider to cancel, modify or terminate the Agreement without the written consent of the Financing Party.
(c) Rights Upon Event of Default. Notwithstanding any contrary term of this Agreement:
i. The Financing Party, shall be entitled to exercise, in the place and stead of Provider, any and all rights and remedies of Provider under this Agreement in accordance with the terms of this Agreement and only in the event of Provider’s or Purchaser’s default. The Financing Party shall also be entitled to exercise all rights and remedies of secured parties generally with respect to this Agreement and the System. ii. The Financing Party shall have the right, but not the obligation, to pay all sums due under this Agreement and to perform any other act, duty or obligation required of Provider thereunder or cause to be cured any default of Provider thereunder in the time and manner provided by the terms of this Agreement. Nothing herein requires the Financing Party to cure any default of Provider under this Agreement or (unless the Financing Party has succeeded to Provider’s interests under this Agreement) to perform any act, duty or obligation of Provider under this Agreement, but Purchaser hereby gives it the option to do so. iii. Upon the exercise of remedies under its security interest in the System, including any sale thereof by the Financing Party, whether by judicial proceeding or under any power of sale contained therein, or any conveyance from Provider to the Financing Party (or any assignee of the Financing Party) in lieu thereof, the Financing Party shall give notice to Purchaser of the transferee or assignee of this Agreement. Any such exercise of remedies shall not constitute a default under this Agreement. iv. Upon any default not reasonably susceptible to cure by a Finance Party, including, without limitation, rejection or other termination of this Agreement pursuant to any process undertaken with respect to Provider under the United States Bankruptcy Code, at the request of the Financing Party made within ninety (90) days of such default, Purchaser shall enter into a new agreement with the Financing Party or its designee having the same terms and conditions as this Agreement.
(d) Right to Cure.

DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

i. Purchaser will not exercise any right to terminate or suspend this Agreement unless it shall have given the Financing Party prior written notice by sending notice to the Financing Party (at the address provided by Provider) of its intent to terminate or suspend this Agreement, specifying the condition giving rise to such right, and the Financing Party shall not have caused to be cured the condition giving rise to the right of termination or suspension within thirty (30) days after such notice or (if longer) the periods provided for in this Agreement. The Parties agree that the cure rights described herein are in addition to and apply and commence following the expiration of any notice and cure period applicable to Provider The Parties respective obligations will otherwise remain in effect during any cure period; provided, if such Provider default reasonably cannot be cured by the Financing Party within such period and the Financing Party commences and continuously pursues cure of such default within such period, such period for cure will be extended for a reasonable period of time under the circumstances, such period not to exceed additional ninety (90) days. ii. If the Financing Party (including any purchaser or transferee), pursuant to an exercise of remedies by the Financing Party, shall acquire title to or control of Provider’s assets and shall, within the time periods described in Sub-section (c)(i). above, cure all defaults under this Agreement existing as of the date of such change in title or control in the manner required by this Agreement and which are capable of cure by a third person or entity, then such person or entity shall no longer be in default under this Agreement, and this Agreement shall continue in full force and effect
DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

Exhibit C
of General Conditions
Requirements Applicable To The Installation Work
Section B.1 Prohibition Against Use of Tobacco. All properties and facilities owned, leased or operated by the Purchaser are tobacco-free work places. No person on, at or in any Purchaser-controlled property or facility, including, without limitation, the Premises, may smoke, chew or otherwise use tobacco products. Provider shall be responsible for: (i) informing any and all persons present on or at the Premises on account of the Installation Work about the Purchaser’s tobacco-free policy; and (ii) strictly enforcing such policy with respect to the Premises. The Purchaser, Provider, and each Subcontractor shall require that any person present on or at the Premises on account of the Installation Work who violates such policy must permanently leave the Premises, and shall prohibit such person from thereafter being present or performing any of the Installation Work on or at the Premises.

Section B.2 Prohibition Against Use of Drugs.
(a) Purchaser Drug-Free Policy. All properties and facilities owned, leased or operated by the Purchaser are drug-free work places. No person on, at or in any Purchaser-controlled property or facility, including, without limitation, the Premises, may: (i) engage in the unlawful manufacture, dispensation, possession or use, including being under the influence, of any controlled substance, (ii) possess or use any alcoholic beverage, or (iii) use any substance which may cause significant impairment of normal abilities. Provider shall be responsible for: (i) informing any and all persons present on or at the Premises on account of the Installation Work about the Purchaser’s drug-free policy; and (ii) strictly enforcing such policy with respect to the Premises. The Purchaser, Provider, and each Subcontractor shall require that any person present on or at the Premises on account of the Installation Work who violates such policy must permanently leave the Premises, and shall prohibit such person from thereafter being present or performing any of the Installation Work on or at the Premises.
(b) Drug-Free Workplace Certification. Provider is hereby made subject to the requirements of Government Code Sections 8350 et seq., the Drug-Free Workplace Act of 1990.

Section B.3 Compliance with Labor Requirements. The Installation Work is a “public works” project as defined in Section 1720 of the California Labor Code (“Labor Code”) and made applicable pursuant to Section 1720.6 of the Labor Code. Therefore, the Installation Work is subject to applicable provisions of Part 7, Chapter 1, of the Labor Code and Title 8 of the California Code of Regulations, Section 16000 et seq. (collectively, “Labor Law”). Provider acknowledges that, as provided by Senate Bill 854 (Stats. 2014, Ch. 28), the Project is subject to labor compliance monitoring and enforcement by the California Department of Industrial Relations (“DIR”).

Section B.4 Compliance with Labor Code Requirements. Provider must be, and shall be deemed and construed to be, aware of and understand the requirements of the Labor Law that require the payment of prevailing wage rates and the performance of other requirements on public works projects. Provider, at no additional cost to the Purchaser, must: (i) comply with any and all applicable Labor Law requirements, including, without limitation, requirements for payment of prevailing wage rates, inspection and submittal (electronically, as required) of payroll records, interview(s) of workers, et cetera; (ii) ensure that its Subcontractors are aware of and comply with the Labor Law requirements; (iii) in connection with Labor Law compliance matters, cooperate with the DIR, the Purchaser and other entities with competent jurisdiction; and (iv) post all job-site notices required by law in connection with the Installation Work, including, without limitation, postings required by DIR regulations. A Subcontractor that has been debarred in accordance with the Labor Code, including, without limitation, pursuant to Sections 1777.1 or 1777.7, is not eligible to bid on, perform, or contract to perform any portion of the Installation Work. Wage rates for the Installation Work shall be in accordance with the general prevailing rates of per-diem wages determined by the Director of Industrial Relations pursuant to Labor Code Section 1770. The following Labor Code sections are by this reference incorporated into and are a fully operative part of the Contract, and Provider shall be responsible for compliance therewith:
(a) Section 1735: Anti-Discrimination Requirements;
DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

(b) Section 1775: Penalty for Prevailing Wage Rate Violations; (c) Section 1776: Payroll Records;
(d) Sections 1777.5,1777.6 and 1777.7: Apprenticeship Requirements; (e) Sections 1810 through 1812: Working Hour Restrictions; (f) Sections 1813 and 1814: Penalty for Failure to Pay Overtime; and (g) Section 1815: Overtime Pay.

Section B.5 Requirements for Payroll Records. Provider must comply with all applicable provisions of Labor Code Sections 1776 and 1812, which relate to preparing and maintaining accurate payroll records, and making such payroll records available for review and copying by the Purchaser, the DIR Division of Labor Standards Enforcement, and the DIR Division of Apprenticeship Standards. The payroll records must be certified and made available as required by Labor Code Section 1776.

Section B.6 Contractor Registration. On and after March 1, 2015, no contractor may bid on a public works project unless the contractor is, and no subcontractor may be listed in any bid for a public works project unless the subcontractor is, currently registered with the DIR and qualified to perform public work pursuant to Labor Code Section 1725.5. On and after April 1, 2015, no contractor or subcontractor may be awarded a contract for work on a public works project, or may perform any work on a public works project, unless the contractor or subcontractor is currently registered with the DIR and qualified to perform public work pursuant to Labor Code Section 1725.5. It is not a violation of Labor Code Section 1725.5 for an unregistered contractor to submit a bid authorized by Business and Professions Code Section 7029.1 or Public Contract Code Section 20103.5, if the contractor is registered at the time the contract is awarded.

Section B.7 Permits and Licenses. Without limiting anything set forth in Section B.7 of this Exhibit C, Provider, its Subcontractors, and all of their respective employees and agents: (i) shall secure and maintain in force at all times during the performance of the Installation Work such licenses and permits as are required by law; and (ii) shall comply with all federal and State, and County laws and regulations, and other governmental requirements applicable to the System or the Installation Work. Provider or its subcontractors shall obtain and pay for all permits and licenses required for the performance of, or necessary in connection with, the Installation Work, and shall give all necessary notices and deliver all necessary certificates to the Purchaser, and shall pay all royalties and license fees arising from the use of any material, machine, method or process used in performing the Installation Work. Provider shall be solely responsible for all charges, assessments and fees payable in connection with any such licenses, permits, materials, machines, methods, and processes.

Section B.8 Protection of Minor-Aged Students. Provider, in conformance with Education Code Section 45125.1, shall require and be responsible for ensuring compliance by each and every person who will be on or at the Premises in connection with the construction, maintenance, operation or other purposes related to the System with all California Department of Justice guidelines and requirements relating to fingerprinting and criminal-history background checks, regardless of whether Section 45125.1 otherwise by its terms would apply to any such activities.

In the event Education Code Section 45125.1 is repealed or superseded, Provider, following receipt of written notice from the Purchaser, shall comply with such successor or other requirements as determined by the Purchaser in its reasonable discretion. The Purchaser, in its discretion, may exempt in writing any person(s) from the foregoing requirements if Provider makes alternative arrangements for supervision of such person(s) that are acceptable to the Purchaser in its sole discretion.

DocuSign Envelope ID: 467F42DA-3D6A-4C5A-898B-75556217B347

CONSENT TO ASSIGNMENT OF

PROJECT DOCUMENTS AND ACKNOWLEDGMENT
This Consent to Assignment of Project Documents and Acknowledgment, dated as of _____________, 2025 (this “Consent”), is made by City of San Luis Obispo (“Purchaser”) and Greenskies Clean Energy LLC, a Delaware limited liability company (“GCE”) in connection with those certain power systems:
(a) to be built as noted in Exhibit A to this Consent (the “Systems”); (b) to be located at the sites identified and described in Exhibit A to this Consent (the “Sites”); and
(c) the associated agreements and documents associated with such Systems and Sites including without limitation those identified in Exhibit A to this Consent (collectively such agreements and documents, the “Project Documents”). To the extent that there are any actual conflicts between the Project Documents and this Consent, the terms of this Consent shall prevail unless specifically agreed otherwise in writing signed by Purchaser and GCE.

Capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Project Documents.

1. Consent to Assignment and Change of Control.
a. An affiliate of GCE (the “GCE Owner”) will take over the development, design, procurement, construction, operation, maintenance and ownership of the Systems at the Sites by means of a purchase of all the rights, contracts and other assets related to such Systems (collectively, the “Transaction”) to the extent such rights, contracts, and other assets hereinbefore belonged to FFP BTM SOLAR, LLC, under the Project Documents, and GCE wishes that the Purchaser hereby gives its unconditional and irrevocable consent to the Transaction (the “Confirmation”) for the benefit of GCE and the GCE Owner and all of the their successors and assigns including their financing parties and future assignees. Effective as of the date of this Consent, the Purchaser hereby gives the Confirmation to GCE for the benefit of GCE and the GCE Owner and their successors and authorized assigns including to the assignment of all of the Project Documents (the “Assignment”) to the GCE Owner. Purchaser acknowledges that upon Assignment, GCE Owner shall have all the rights and responsibilities of “Provider” under each Project Document, including to perform and enforce the respective obligations thereunder. By consenting to the Assignment, Purchaser waives any claim that the Assignment, by itself, entitles Purchaser to termination or acceleration under any Project Document. b. Any provision for notices under any Project Document is hereby revised so that the Purchaser give notices as follows:

Greenskies Clean Energy LLC
127 Washington Avenue
West Bldg, Garden Level
North Haven, CT 06473
Attn: General Counsel

2. Representations and Warranties of Purchaser. Purchaser hereby represents and warrants to Provider, Assignee and GCE as follows:
a. Purchaser is a California municipal corporation and has all requisite power and authority to execute and deliver, and to perform its obligations under, the Project Documents and this Consent;
b. the execution, delivery and performance by Purchaser of this Consent have been duly authorized by all necessary action and, as of the date hereof, do not require any further consents or approvals that have not been obtained;
c. the execution, delivery and performance by Purchaser of this Consent will not (i) violate any provision of any law, regulation, order, judgment, injunction or similar matters applicable to it; or (ii) conflict with, result in a breach of or violate any of the terms, conditions or provisions of Purchaser’s formation, constituent or governing documents; d. all representations made by Purchaser in the Project Documents were true and correct as of the date the same were made and as of the date hereof; e. this Consent and the Project Documents are legal, valid and binding obligations of Purchaser enforceable against Purchaser in accordance with their respective terms except as may be limited by bankruptcy, insolvency and other laws affecting creditors’ rights in general;
f. the Project Documents are in full force and effect and have not been amended except as explicitly indicated in Exhibit A, and there are no other agreements or representations of any kind between Purchaser and Provider other than the Project Documents listed in Exhibit A; and
g. as of the date hereof, no liquidated damages or other such payments are due and owing under any Project Document.

3. Acknowledgment and Confirmation. Purchaser confirms with respect to the Project Documents, Sites and the Systems as follows.
a. Purchaser confirms each Site has a water source on site which Provider may use free of charge for the useful life of the System in question with such quantities of water available at all times when and as would be needed by a system similar to the System for its installation, operation and maintenance (all as dictated by prudent industry practices for similar systems in the county of the Site), with the sole exception of the Cultural Arts District Parking Structure. No water source is available for use on the top deck of the parking structure. b. Purchaser has granted Provider sunlight access pursuant to Section 10 of the Special Conditions (defined in Exhibit A). In connection therewith, Purchaser acknowledges that unobstructed access to sunlight (“100% Insolation”) is essential to Provider’s performance of its obligations and a material term of the Project Documents for each System. Purchaser agrees not to cause and, where possible, not permit any interference with each System’s 100% Insolation. If

Purchaser becomes aware of any activity or condition that could diminish the 100% Insolation of any System, Purchaser shall notify the GCE Owner promptly in writing and shall cooperate with the GCE Owner to retain 100% Insolation. The GCE Owner may seek specific enforcement of this provision against Purchaser without the necessity of posting a bond and without the Purchaser’s contesting that an adequate remedy at law exists for the GCE Owner. c. In addition to the ninety (90) days granted pursuant to Section 2.4 of the General Terms and Conditions (defined in Exhibit A), Purchaser hereby grants an additional ninety (90) days to GCE Owner for removal of each System and restoration of the Premises such that Provider is required to remove, at Provider’s expense, all of its tangible property comprising the System from the Premises on a mutually convenient date but in no case later than one hundred and eighty (180) days after the Termination Date.
d. Purchaser understands that as is customary for systems similar to each System, the GCE Owner intends to enter into financing and/or sale/leaseback arrangements with respect to each System and the providers of such financing will request that the Purchaser execute an agreement with them which may be of form and substance as set forth in Exhibit B hereto.

Pursuant to Section 13.1 of the General Terms and Conditions, Purchaser agrees to provide such standard and customary estoppels as Provider may request, therefore Purchaser will cooperate in good faith with the GCE Owner in reviewing, negotiating and executing such agreement when requested by the GCE Owner (but with such variations as are appropriate to account for any specific circumstances involving the System that are extraordinary to systems similar to the System).
e. Prior to the end of the term of the Project Documents (the “Initial Term”) or of any applicable Additional Term (as defined below) either party thereto may give the other party thereto written notice of its desire to extend the Project Documents on the terms and conditions set forth therein for three additional periods of five (5) years each (each such additional period, an “Additional Term”). Such notice shall be given, if at all, not more than one hundred twenty (120) and not less than sixty (60) days before the last day of the Initial Term or the then current Additional Term, as applicable. The party receiving the notice requesting an Additional Term shall respond positively or negatively to that request in writing within thirty (30) days after receipt of the request, but failure to respond within such thirty (30) day period shall not be deemed an acceptance of the offer for an Additional Term. Such acceptance shall only be binding and effective upon express written notification of same. The Additional Term shall begin immediately upon the conclusion of the Initial Term or the then current Additional Term on the same terms and conditions as set forth in the Project Documents as in effect immediately prior to the extension in question. If the party receiving the request for an Additional Term rejects or is deemed to reject the other party’s offer, the Project Documents shall terminate in accordance with their terms at the end of the Initial Term (if the same has not been extended) or the then current Additional Term.

4. Representations and Warranties of GCE. GCE hereby represents and warrants to Purchaser as follows:
a. Purchaser and GCE expressly agree that eligibility for Net Energy Metering (NEM) 2.0 for the Initial Term and any applicable Additional Term is an integral part of the performance exchanged under the Project

Documents. Notwithstanding anything to the contrary in the Project Documents, GCE guarantees Commercial Operation of the System, as both of those terms are defined in the General Terms and Conditions, by April 14, 2026, or the later date to which the California Public Utilities Commission or Local Electric Utility extends NEM 2.0 grandfathering for the System, if applicable. (“NEM 2.0 Deadline”). As such, Section 5.2 of the Special Conditions is amended and replaced with: “The Guaranteed Commercial Operation Date is April 14, 2026, or the later date to which the California Public Utilities Commission or Local Electric Utility extends NEM 2.0 grandfathering for the System, if applicable.” b. Notwithstanding anything to the contrary in the Project Documents – including, but not limited to, section 2.1(C) of the General Terms and Conditions - if (i) GCE fails to submit final building permit sign off and electrical clearing by the permitting authority having jurisdiction by April 14, 2026, or (ii) prior to the Guaranteed Commercial Operation Date, as that term is modified herein, GCE fails to keep System’s NEM2 grandfathering status in good standing with the Local Electric Utility such that the System would not be eligible for 20 years of NEM 2.0 grandfathering, GCE agrees that it shall amend the PPA rates to ensure that any loss in savings incurred by the City is fully offset and there is no other negative economic impact to the City. Alternatively and at Purchaser’s sole selection, if either (i) or (ii) occur, Purchaser may terminate this Agreement with no liability whatsoever, including, but not limited to the Early Termination Fee. The foregoing shall not apply to the extent GCE’s failure is caused by a delay due to an act or omission by Purchaser in connection with GCE’s submittal of interconnection applications. The remedies set forth in this paragraph shall be in addition to, and shall not be deemed a waiver or cancellation of, Purchaser’s right to Delay Liquidated Damages under the Project Documents. c. If, prior to the Guaranteed Commercial Operation Date, as that term is modified herein, the CPUC issues a decision such that the System would not be eligible for NEM 2.0 grandfathering for at least twenty (20) years, Purchaser may terminate this Agreement with no liability whatsoever, including, but not limited to the Early Termination Fee. d. The Parties shall memorialize the terms of this section 4 by amending, in writing, Section 5.2 of each of the Energy Services Agreements listed in Exhibit A.

5. General.
a. This Consent may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed

to be an original and all of which taken together shall constitute one and the same agreement.

Delivery of an executed counterpart of a signature page to this Consent by facsimile or e-mail (including “pdf” format) or other electronic means shall be effective as delivery of an original executed counterpart of this Consent.
b. In case any provision of this Consent, or the obligations of any of the parties hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions, or the obligations of the other parties hereto, shall not in any way be affected or impaired thereby, and the parties hereto shall negotiate in good faith to replace such invalid, illegal or unenforceable provisions.
c. This Consent shall be binding upon and benefit the successors and authorized assigns of Purchaser and GCE and their respective successors, transferees and authorized assigns. No termination, amendment, variation or waiver of any provisions of this Consent shall be effective unless in writing and signed by Purchaser and GCE. d. Except as expressly modified by this Consent, all other terms and provisions of the Project Documents are and remain in full force and effect. This Consent shall be governed by and construed in accordance with the laws of the State of California. [Signatures follow on next page.]

Signature Page
IN WITNESS WHEREOF, the parties hereto by their officers thereunto duly authorized have duly executed this Consent as of the date first set forth above.

PURCHASER:

By: ___________________________________
Name:________________________________
Title:_________________________________
GCE:

By: ___________________________________
Name:________________________________
Title:_________________________________

Exhibit A
Exhibit A: Project Documents
Energy Services Agreement – Solar dated October 22, 2024 for the Cultural Arts District Parking Structure project located at 972 Nipomo St., San Luis Obispo, CA 93401 Energy Services Agreement – Solar dated December 21, 2018 for the Bus Yard project located at 29 Prado Road, San Luis Obispo, CA 93401, as amended by that Amendment No. 1 to Energy Services Agreement – Solar dated October 10, 2019 and as amended by that Amendment No. 2 to Energy Services Agreement – Solar dated October 22, 2024.

Energy Services Agreement – Solar dated December 21, 2018 for the Fire Station 1 & Data Center project located at 2160 Santa Barbara Ave, San Luis Obispo, CA 93401, as amended by that Amendment No. 1 to Energy Services Agreement – Solar dated November 14, 2019 and as amended by that Amendment No. 2 to Energy Services Agreement – Solar dated October 22, 2024.

Energy Services Agreement – Solar dated May 21, 2019 for the San Luis Obispo Swim Center project located at 900 Southwood Dr., San Luis Obispo, CA 93401, as amended by that Amendment No. 1 to Energy Services Agreement – Solar dated September 27, 2019 and as amended by that Amendment No. 2 to Energy Services Agreement – Solar dated October 22, 2024. (collectively, the “Special Conditions”)
General Terms and Conditions of Energy Services Agreement dated December 21, 2018 (“General Terms and Conditions”).

Exhibit B
Exhibit B
See Attached:
“Consent to Collateral Assignment of Solar Project Documents and Equipment Subordination”

Form of Consent

CONSENT TO COLLATERAL ASSIGNMENT OF SOLAR PROJECT DOCUMENTS

AND EQUIPMENT SUBORDINATION
This Consent to Collateral Assignment of Solar Project Documents and Equipment Subordination, dated as of _____________, 202_ (this “Consent”), is made by ______________________________ (“Host”), and ____________________________ (“Company"), and is provided for the benefit of ______________(“Construction Lender”) and ______________________(“SLB Lessor”), in connection with those certain solar project documents including that certain consent to assignment to the Company (“Solar Project Documents”) identified in Schedule A to this Consent, and relates to the solar photovoltaic systems (“Systems”) located at the sites (“Sites”) identified and described in Schedule B to this Consent.

Capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Solar Project Documents. The term “Financing Party,” as used in this Consent, shall refer to Construction Lender prior to the Sale Leaseback Transaction (as such term is defined herein) for a specific System, and to SLB Lessor on or after the Sale Leaseback Transaction for the specific System.

1. Acknowledgment and Consent.
a. Host acknowledges that Company is entering into a construction financing agreement with Construction Lender to finance the building of one or more Systems (“Construction Financing”) and will enter into one or more sale-leaseback transactions (each a “Sale Leaseback Transaction”, collectively the “Sale Leaseback Transactions”) with ___________, whereby Company will sell its rights, interests and obligations in and to the Systems to ___________, and in connection therewith __________ will lease the Systems to Company (collectively, the "Transactions").
b. Host acknowledges that, as a part of the Transactions, Company shall assign the Solar Project Documents to [_____], or a sister entity thereto, not long after the date hereof, and may subsequently further assign the Solar Project Documents to another sister entity in connection with the Transactions (collectively the "Provider Assignees"). c. In order to secure its obligations under the Transactions, Company (i) is collaterally assigning and granting to Construction Lender a first-priority security interest in all of Company’s right, title and interest in, to and under the Solar Project Documents including, without limitation, all of Company’s rights to receive payments under or with respect to the Solar Project Documents, in connection with the Construction Financing, and (ii) in connection with the Sale Leaseback Transactions (A) will convey the Systems to SLB Lessor, (B) will collaterally assign and grant to SLB Lessor a first-priority security interest in all of Company’s right, title and interest in, to and under the Solar Project Documents (to the extent the security interest of Construction Lender is released) including, without limitation, all of Company’s rights to receive payments under or with respect to the Solar Project Documents, (C) is assigning and granting a non-exclusive license to the access rights set forth in the Solar Project Documents, and

(D) acknowledging and agreeing that the Financing Party shall not be bound by the terms of the Solar Project Documents unless and until Financing Party becomes a party to such Solar Project Documents.
d. To the extent consent is not already granted in the Solar Project Documents, Host consents to the transactions set forth in subparts (a) through (c) above.

2. Financing Party's Rights. Notwithstanding any contrary term in the Solar Project Documents:
a. Financing Party shall be entitled to exercise any and all rights of secured parties generally with respect to the Solar Project Documents. b. Host agrees that Host will provide to Financing Party notice of any default by Company and other material notices under the Solar Project Documents and will permit Financing Party the same cure periods as are available to Company under the Solar Project Documents, provided that Financing Party shall have an additional ninety (90) days to cure any default Company did not cure within the cure period permitted, so long as Financing Party is diligently proceeding to cause a cure; and further provided that any period to cause a cure shall be tolled if Financing Party is prohibited from curing any default due to bankruptcy of Company or by any other process, stay or injunction issued by any court or governmental authority. c. If, in connection with the exercise of any of its rights and remedies, Financing Party elects to exercise step-in rights under the Solar Project Documents, Financing Party shall use commercially reasonable efforts to ensure that the System remains under the care of a Qualified Operator. A “Qualified Operator” is a business organization which has the skillset and experience to operate and service the System in accordance with the terms of the Solar Project Documents.
d. If Financing Party transfers Company’s interests in the Solar Project Documents to a third party (an “Assignee”), so long as the Assignee is also a Qualified Operator, (i) Host shall recognize the respective Assignee as the counterparty under the Solar Project Documents; (ii) Host shall continue to perform its obligations under the Solar Project Documents in favor of such Assignee; and (iii) Financing Party shall be released from any further liability thereunder (other than those obligations arising prior to the date of such assignment or those obligations that are not assumed).

3. Representations and Warranties of Host. Host hereby represents and warrants to Financing Party as follows:
a. Host is duly organized, validly existing and in good standing under the laws of the _______________ and has all requisite power and authority to execute and deliver, and to perform its obligations under, the Solar Project Documents and this Consent; b. the execution, delivery and performance by Host of this Consent have been duly authorized by all necessary action and, as of the date hereof, do not require any further consents or approvals that have not been obtained;

c. the execution, delivery and performance by Host of this Consent will not (i) violate any provision of any law, regulation, order, judgment, injunction or similar matters applicable to it; or (ii) conflict with, result in a breach of or violate any of the terms, conditions or provisions of Host’s formation, constituent or governing documents; d. this Consent and the Solar Project Documents are legal, valid and binding obligations of Host enforceable against Host in accordance with their respective terms except as may be limited by bankruptcy, insolvency and other laws affecting creditors’ rights in general; e. as of the date hereof, Host has no knowledge of a Force Majeure event having occurred under the Solar Project Documents; and
f. as of the date hereof, Host has not taken any official action or entered into any approval to exercise any purchase option available to Host in connection with the Systems.

Representations and Warranties of Company. Company hereby represents and warrants to Financing Party and Host that the Company has the full power, authority and legal right to execute, deliver and perform its obligations under this Consent and the Solar Project Documents. This Consent has been duly executed and delivered by Company, and this Consent and the Solar Project Documents are legal, valid and binding obligations of Company enforceable against Company in accordance with their respective terms except as may be limited by bankruptcy, insolvency and other laws affecting creditors’ rights in general.

4. Confirmation and Agreement. Host confirms the following matters for the benefit of Financing Party with respect to the Solar Project Documents and the Systems. a. To Host’s knowledge, there exists no default or event or condition that would, with the giving of notice or lapse of time, constitute a default under the Solar Project Documents, and each of Company and Host has fulfilled all of its respective obligations under the Solar Project Documents to the extent such obligations are required to be performed as of the date hereof.
b. Host owns the Sites where the Systems have been or will be installed.

Host acknowledges and agrees that the Site specifications in Schedule B are correct. [If Host is a Lessee and not a Site Owner: Host confirms that it has a leasehold interest in the Sites, pursuant to that [Site Control Document] with [Landlord] and such leasehold interest is sufficient for Host to fulfill its obligations under the Solar Project Documents. Host further confirms that it has entered into a non-disturbance agreement with [Landlord] wherein [Landlord] (i) disclaims all ownership in the Equipment, (ii) agrees that, provided Company is not in default, Company’s right to undisturbed possession of the Site shall not be infringed for the term of the Solar Project Documents, and (iii) both Construction Lender and SLB Lessor are each a third-party beneficiary of such non-disturbance agreement].
c. The interest of Financing Party in the Systems shall at all times be superior to any interest Host may now or hereafter have in the System, and Host hereby

subordinates any lien, encumbrance or interest heretofore or hereafter created that Host may have in the System, whether such lien, encumbrance or interest is statutory or by agreement, to the title, lien, encumbrance or interest of Financing Party, regardless of the timing or order of creation or any perfection, and whether or not any System (or any part thereof) is deemed a fixture on the Sites. Host agrees that the Systems are, and shall at all times remain, personal property notwithstanding that it may be installed on or affixed to the Sites. d. Without limitation of the foregoing, Host grants to Financing Party and its agents, employees and contractors a license to enter upon the Sites and remove the Systems for up to one hundred eighty (180) days after notice to Financing Party of the termination or expiration of the Solar Project Documents, with such one hundred eighty (180) day period being tolled for any period of time during which Financing Party is stayed from removing the Systems by a proceeding in bankruptcy with respect to Company.
e. Host agrees not to hinder such exercise of remedies under the Solar Project Documents or this Consent. If Financing Party elects to remove the System Financing Party shall perform such removal in accordance with the terms of the Solar Project Documents, provided that Financing Party shall have no obligations to remove substructures installed in order to support the System.
f. The Solar Project Documents are in full force and effect and have not been amended except as explicitly indicated in Schedule A, and there are no other agreements or representations of any kind between Host and Company other than the Solar Project Documents listed in Schedule A.
g. Host will use commercially reasonable efforts to place its direct successors, assigns and lien holders on notice of the ownership of the Systems by Financing Party, the existence of Financing Party’s security interest in the Solar Project Documents, and the fact that the Systems are not part of the Sites or fixtures thereof, as necessary and appropriate to avoid confusion or adverse claims.
h. Host acknowledges that, under the Transaction, Company is not permitted to agree to an amendment or assignment of the Solar Project Documents without the prior written consent of Financing Party, which shall not be unreasonably withheld, conditioned, or delayed.
i. Host will use commercially reasonable efforts to deliver to Financing Party, concurrently with delivery to Company, duplicates or copies of all requests, demands or notices of, or with respect to, default, suspension or termination, or any claim or force majeure event or exercise of any purchase option, delivered by Host to Company under or pursuant to the Solar Project Documents. Notwithstanding the previous sentence, Host shall not be liable for failure to deliver notices under this Section 5(i).
j. There is no mortgage, financing statement, fixture filing, lien, or other encumbrance (a “Lien”) attached to any of the Sites described in the Solar Project Documents.

Notwithstanding the foregoing, if Company or Financing Party discovers a Lien on one or more of the Sites that could reasonably be construed as prospectively attaching to one or more

Systems, Host will secure, or otherwise cooperate with Company and Financing Party to secure, any non-disturbance agreement, lien waiver, disclaimer, or other documentation (“Waiver Documentation”) determined by Financing Party as necessary and appropriate to avoid confusion or adverse claims.
k. There is no easement, license, restrictive covenant, or other such real estate interest (“Site Interest”), whether possessory or non-possessory, that will adversely affect Company’s ability to develop, construct, operate, maintain, and decommission any of Systems in accordance with the Solar Project Documents. Notwithstanding the foregoing, if Company or Financing Party discovers a Site Interest on one or more of the Sites that could reasonably be construed as prospectively adversely affecting Company’s ability to comply with the Solar Project Documents, Host will secure or otherwise cooperate with Company and Financing Party to secure any Waiver Documentation determined by Financing Party as necessary and appropriate to permit full compliance with the Solar Project Documents. l. [Appropriation Language, if applicable] Host confirms that it intends to fulfill its obligations under the Solar Project Documents, including ensuring that sufficient monies are appropriated in accordance with applicable law. m. Host and Company confirm as of the date hereof, no liquidated damages or other such payments are due and owing.

5. General.
a. Unless otherwise expressly specified or permitted by the terms hereof, all communications and notices provided for herein shall be in writing, and any such communication or notice shall become effective (i) upon personal delivery thereof, including, without limitation, by overnight mail or courier service; (ii) in the case of notice by United States mail, certified or registered, postage prepaid, return receipt requested, upon receipt thereof; or (iii) in the case of notice by email or facsimile, upon confirmation of receipt thereof in writing by the intended recipient, and provided such email or facsimile transmission is promptly further confirmed by any of the methods set forth in clauses (i) or (ii) above, in each case addressed to each party hereto at its address set forth below or, in the case of any such party hereto, at such other address as such party may from time to time designate by written notice to the other parties hereto:

If to Host:

If to Financing Party:

Construction Lender
Attn:

SLB Lessor

If to Company:

Clean Focus Yield LLC
127 Washington Avenue
West Bldg, Garden Level
North Haven, CT 06473
Attn: Stanley Chin and General Counsel
b. This Consent may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Consent by facsimile or e-mail (including “pdf” format) or other electronic means shall be effective as delivery of an original executed counterpart of this Consent.
c. In case any provision of this Consent, or the obligations of any of the parties hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions, or the obligations of the other parties hereto, shall not in any way be affected or impaired thereby, and the parties hereto shall negotiate in good faith to replace such invalid, illegal or unenforceable provisions.
d. This Consent shall be binding upon and benefit the successors and assigns of Host, Company and their respective successors, transferees and assigns. No termination, amendment, variation or waiver of any provisions of this Consent shall be effective unless in writing and signed by Host and Company and consented to by Financing Party. e. Except as expressly modified by this Consent, all other terms and provisions of the Solar Project Documents are and remain in full force and effect. This Consent shall be governed by and construed in accordance with the laws of the State of New York. f. Each Power Purchase Agreement listed in Exhibit A constitutes a service contract and not a lease of property pursuant to Section 7701(e)(1) of the Internal Revenue Code, in accordance with Section 7701(e)(3) of the Internal Revenue Code. g. Host will from time to time, upon the written request of Financing Party, execute and deliver such further documents and do such other acts and things as Financing Party may reasonably request in order to effectuate more fully the purposes of this Consent. h. To the extent not prohibited by applicable law, the parties hereto hereby irrevocably waive all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Consent. i. This Consent is the entire agreement pertaining to the matters discussed herein and shall supersede all oral and written representations and negotiations and prior agreements, if any, related to the subject matter hereof. [Signatures follow on next page.]

Signature Page
IN WITNESS WHEREOF, the parties hereto by their officers thereunto duly authorized have duly executed this Consent as of the date first set forth above. [COMPANY]
By: ___________________________________
Name:
____________________________________
Title:__________________________________
____
[HOST]
By: ___________________________________
Name:
____________________________________
Title:__________________________________
____
Accepted: [Financing Party]
_____________
By: ___________________________________
Name: ________________________________
Title:__________________________________
By: ___________________________________
Name: ________________________________
Title:__________________________________

Schedule A
Power Purchase Agreements (“PPAs”)
Site Control Agreements

4817-1562-9220.1
Schedule B
Sites and Specifications
To be provided

Exhibit C
Exhibit C
NEM3 Savings Comparison

EXHIBIT C: CONSENT TO ASSIGNMENT OF PROJECT DOCUMENTS AND ACKNOWLEDGMENT NEM2
Site
NEM
Scenario
PPA Rate
PPA
Escalator
Solar
System
Size
System
Storage
Size
Y1
Production
(kWh)
% Energy
Offset Utility Bill
Pre-Solar Year 1
Savings Savings
20 Year
Bus Yard NEM2 $0.23 0% 287 0 521,623 11% $1,146,030 ($18,150) $532,083 Sinsheimer NEM2 $0.31 0% 259 0 455,286 113% $128,449 ($27,112) $572,412 Fire House NEM2 $0.34 0% 126 0 224,406 63% $108,165 ($27,910) $38,710 CAD Parking Structure NEM2 $0.29 0% 212 0 354,968 92% $157,819 $33,122 $1,590,066 NEM3
Site
NEM
Scenario
PPA Rate
PPA
Escalator
Solar
System
Size
System
Storage
Size
Y1
Production
(kWh)
% Energy
Offset Utility Bill
Pre-Solar Year 1
Savings Savings
20 Year
Bus Yard NEM3 $0.23 0% 287 0 521,623 11% $1,146,030 ($18,159) $531,849 Sinsheimer NEM3 $0.31 0% 259 0 455,286 113% $128,449 ($96,636) ($1,519,714) Fire House NEM3 $0.34 0% 126 0 224,406 63% $108,165 ($43,508) ($457,927) CAD Parking Structure NEM3 $0.29 0% 212 0 354,968 92% $157,819 ($30,054) ($56,632) ($9) ($234)
($69,524) ($2,092,126)
($15,598) ($496,637)
($63,176) ($1,646,698)
($148,307) ($4,235,695)
CAD Parking Structure
Calculated Savings Difference
Site Specific Savings Comparison: NEM 2.0 vs. NEM 3.0
Bus Yard
Fire House
Sinsheimer
8/18/2025 City of San Luis Obispo

City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: September 16, 2025
TO: Mayor and Council
FROM: Timmi Tway, Community Development Director
Prepared By: Callie Taylor, Senior Planner
Gabriel Munoz-Morris, Supervising Civil Engineer
VIA: Whitney McDonald, City Manager
SUBJECT: Item 6e – APPROVAL OF THE FINAL MAP FOR TRACT 3089 PHASE 5, AVILA RANCH, 175 VENTURE DRIVE (FMAP-0132-2024) - AGENDA

CORRESPONDENCE MEMO
The following memorandum provides City staff responses to questions received regarding the Avila Ranch Phase 5 Final Map approval. Staff determined it would be helpful to provide this memo to all Council Members and the public. The questions are below with staff’s response shown in italics:

1. What is the current status of the C&C affordable housing project? That project appears to be part of Phase 3 but the condition appears to push it into the final phase (now Phase 4). Can staff clarify the conditions and timeline for the affordable housing project?
Lot 186 in Phase 3 of Avila Ranch (165 Cessna Ct.) is the primary affordable and inclusionary housing site for Avila Ranch. The site will be developed with 60 units (R4 zoning), including 24 low or very-low-income, 8 low-income, and 8 moderate-income affordable units, plus an additional 19 moderate-income units and 1 manager’s unit provided by a density bonus approved by the Planning Commission in February 2024.

Lot 186 was established with the recording of the Avila Ranch Phase 1 Final Map in December 2021, and modified with the recording of the Phase 3 Final Map in March 2025. On December 1, 2022, the Avila Ranch primary developer (TH Avila) dedicated Lot 186 to C&C Development, an affordable housing provider, to construct and manage the R-4 affordable housing site. C&C Development has site control and is actively applying for funding to construct the project. Tax credit applications were submitted to the State by C&C Development in 2024 and 2025, but the project has not yet been awarded funding. C&C Development continues to apply for funding opportunities with assistance from the City.

Item 6e – Avila Ranch Phase 5 Final Map Approval - Agenda Correspondence Memo Page 2 The Avila Ranch project did not include specific conditions of approval regarding construction timing for completion of the affordable site. However, the Avila Ranch Development Agreement (DA) did include a statement that the R-4 affordable housing will be completed "early in the Project, rather than leaving them to the end." Exhibit "G" of the Development Agreement provides, "should an affordable housing provider fail to construct the units, the obligation to provide for the 24 deed-restricted low income affordable housing units on the lot remains with Avila Ranch to complete." In order to implement these DA stipulations, a restrictive covenant was included in the Avila Ranch Phase 3 Affordable Housing Agreement (recorded March 2025):
 In the event the Affordable Housing Provider elects not to complete the R-4 Affordable Housing Project or fails to do so, the primary market rate developer at Avila Ranch will have the right to step in and take over work necessary to complete the R-4 Affordable Housing Project.
 In order to ensure that the Affordable Housing Project is completed earlier in the Project, as opposed to the last phase of the Project, the City reserves the right to withhold the issuance of building permits to TH Avila:
o If the Affordable Housing Provider has not Commenced Construction by the issuance of a building permit for TH Avila's 500th unit; and/or, o If the Affordable Housing Provider has not Substantially Completed Construction by the issuance of a building permit for TH Avila's 550th unit.
 There are 740 total residential units within Avila Ranch; therefore, building permits will not be issued for the last 240 units until the affordable housing site in Phase 3 is under construction.

These types of timing triggers ensure that affordable and inclusionary housing is constructed at the same time as the market rate units, regardless of which phase is constructed first. The timing triggers are not tied to a specific phasing plan, but rather to total unit count. The Phase 3 Affordable Housing Agreement, including the restrictive covenant, was reviewed by City Council on January 23, 2024 in conjunction with approval of the Phase 2/3 Final Map. This restrictive covenant was reiterated in the DA Memorandum of Agreement regarding Phases 4 & 5, which is attached to the current Phase 5 Final Map approval agenda report.
.

In addition to the 59 low and moderate-income for-rent affordable units on Lot 186 to be developed by C&C Development, Avila Ranch includes an additional 27 for-sale moderate-income affordable units and 25 workforce housing incentive program units, which are being developed in other areas throughout the project. To date, all Phase 1 affordable units are complete and occupied, including 6 moderate-income for-sale homes and 8 workforce housing units, as required by the Development Agreement.

Item 6e – Avila Ranch Phase 5 Final Map Approval - Agenda Correspondence Memo Page 3

2. We are concerned about flooding near the Avila Ranch project site. They recently installed a storm drain right next to Buckley with a small catchment basin before the water enters the creek next to Buckley. Buckley has a history of flooding at this location.

The Avila Ranch project had an overall drainage study prepared during initial project approvals. The project site was required to mitigate impacts of development through the construction of stormwater facilities and basins. This ensures that the project does not negatively impact drainage conditions in the southern portion of the City near the confluence of San Luis Creek and East Fork. County and City staff work closely to manage this area of the San Luis Creek watershed through Zone 9 to ensure that development complies with the requirements of the Waterway Management Plan. The Avila Ranch site accomplishes peak management for larger storm events through the stormwater basin located in Park A, near the intersection of Vachell and Buckley.

Currently, the developer is working on initial improvements in the Phase 5 area. The comment appears to reference the construction of additional stormwater basins that are required for water quality regulations in the Phase 5 area. The current construction of these basins is per the approved improvement plans and is being inspected by the City.

3. I am concerned that the developer has put off the improvement of Buckley in front of the development. They were supposed to put in bike lanes on the south side of Buckley.

The widening of Buckley, from Tank Farm creek to the eastern project limit, was a condition of approval for the Avila Ranch project. Originally, the condition required the widening of Buckley Road with Phase 4 as Phase 4 was originally intended to be constructed prior to Phase 5. Due to the developer’s request to modify the phasing of the project and construct Phase 5 before Phase 4, City staff modified the timing trigger for the Buckley Road widening to require it with Phase 4 or Phase 5, whichever comes first. In addition, the Avila Ranch project was conditioned to construct new bike bridges on the north and south side of Buckley Road during Phase 2. The bridge on the north side of Buckley is still required to be constructed during Phase 2, which is under construction now. When the Phase 2-3 Final Map was approved, the timing of the southern bicycle bridge was deferred to Phase 4 to be constructed concurrent with the Buckley widening (originally envisioned for Phase 4). The southern bicycle bridge will now be required to be constructed with Phase 4 or Phase 5, whichever comes first.

This will ensure that the southern bridge is constructed at the same time as the Buckley widening, which is also now required prior to Phase 4 or Phase 5, whichever comes first. The developer is currently negotiating the needed right-of-way for the construction of the southern bicycle bridge with the adjacent property owners.

Item 6e
Department: Community Development
Cost Center: 4003
For Agenda of: 9/16/2025
Placement: Consent
Estimated Time: N/A
FROM: Timmi Tway, Community Development Director
Prepared By: Gabriel Munoz-Morris, Supervising Civil Engineer SUBJECT: APPROVAL OF THE FINAL MAP FOR TRACT 3089 PHASE 5, AVILA RANCH, 175 VENTURE DRIVE (FMAP-0132-2024)

RECOMMENDATION
Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving the final map for Tract 3089 Phase 5, Avila Ranch, including an addendum to the Final Environmental Impact Report clarifying the timing of transportation mitigation measures, and authorizing the Mayor to execute a Subdivision Agreement in a form subject to the approval of the City Attorney (175 Venture Drive, FMAP-0132-2024).” (Attachment A)

REPORT-IN-BRIEF
A vesting tentative map for Avila Ranch (Tract 3089) was approved by the City Council on September 19, 2017, by Resolution No. 10832 (2017 Series). The Phase 1 final map was approved by the City Council on December 4, 2018, by Resolution No. 10968 (2018 Series). The Phase 2-3 final map was approved by the City Council on January 23, 2024, by Resolution No. 11472 (2024 Series). Phase 5 will create 101 single-family R-1 residential lots, 2 commercial/mixed use lots, and various lots for parks, open space, and agricultural use.

The City and the Developer have entered into a Development Agreement (DA), adopted by City Council on October 3, 2017, by Ordinance No. 1639 (2017 Series). A Community Facilities District (CFD) was approved on November 21, 2017, by Ordinance No. 1642 (2017 Series) for Tract 3089 to close the gap between anticipated general fund revenue to be generated by the development and projected costs to provide public services and facilities maintenance within the development.

The Developer is proposing to construct Phase 5 of Tract 3089 ahead of Phase 4. In addition, the Developer is eliminating Phase 6 and incorporating elements of Phase 6 into Phases 5 and 4. Modified phasing construction was contemplated by the Development Agreement, which states that the phasing plan and phased installation of project infrastructure may be amended by an agreement between the Developer and the City. A Development Agreement Memorandum of Agreement (Attachment B) has been drafted

Item 6e
to reflect build out of the modified phasing, and a Third Addendum to the Avila Ranch Final Environmental Impact Report (FEIR) (Attachment C), including a Transportation Analysis of the modified phasing (Attachment D), has been drafted to clarify the required timing of offsite improvement construction due to the proposed modification in phasing.

Staff worked closely with the Developer to ensure that the modified phasing does not negatively impact the timing of offsite improvements.

The original project approvals included several transportation infrastructure improvements that were required to be constructed prior to or in conjunction with Phase 4 of the development. With approval of the Phase 5 final map and proposal to advance Phase 5 development ahead of Phase 4, staff is recommending the following clarifications to timing of transportation improvements:

1. Horizon Lane Improvements: Improvements to Horizon Lane between Suburban Road and Avila Ranch project boundary are required per Mitigation Measure TRANS-4 and Condition of Approval #106. Improvements were previously required with Phase 4. Staff recommends retaining timing of improvements with Phase 4 as the need for these improvements is triggered by the housing proposed in Phase 4.

2. Suburban Road Improvements: Improvements to Suburban Road between Earthwood and Horizon Lane are required per Mitigation Measure TRANS-4 and Condition of Approval #102. Improvements previously were required with Phase

4. Staff recommends retaining timing of improvements with Phase 4 as the need for these improvements is triggered by the housing proposed in Phase 4.

3. Buckley Road Frontage Improvements: Widening of Buckley Road east of the Tank Farm Creek Bridge along project frontage is required per Condition of Approval #107. Improvements were previously required with Phase 4. Staff recommends requiring improvements with Phase 4 or 5, whichever comes first.

Note that this improvement requires that the Developer dedicate land to the County to facilitate the widening of Buckley Road. The Developer has submitted an Offer of Dedication to the County and that document has been approved by the County.

The City and County will enter into a Maintenance Agreement for this portion of Buckley Road which will memorialize maintenance responsibilities for the improved portions of Buckley Road.

4. Buckley Bicycle Bridge (South Side): Addition of bicycle bridges on both the north and south sides of Buckley Road crossing Tank Farm Creek are required per Mitigation Measure TRANS-11 and Condition of Approval #109. Original approvals required construction of both bridges with Phase 2. With approval of the Phase 2- 3 final map, the timing of southern bridge was deferred to Phase 4 to be constructed concurrent with Buckley Road Widening. Staff recommends requiring construction of the southern bridge with Phase 4 or 5, whichever comes first.

Item 6e

5. Jespersen/Venture & Jespersen/Wright Brothers Roundabouts: Construction of roundabouts at Jespersen/Venture and Jespersen/Wright Brothers intersections is required per Condition of Approval #110. Improvements were previously required with Phase 4. Staff recommends requiring improvements with Phase 4 or 5, whichever comes first.

Further discussion on these transportation infrastructure improvements is provided later in this report.

A Phase 5 Affordable Housing Agreement is not required because Phase 5 does not include deed restricted affordable units, as outlined in the Avila Ranch Development Agreement. Phases 1, 2, 3, and 4 meet the tract’s affordable housing requirement, with the majority of the affordable units to be provided in the multifamily (R-4 and R-3) portions of Phases 3 and 4.

The original project conditions required that Park G, which is in Phase 4, be constructed before the end of Phase 4, which was originally planned ahead of Phase 5. This would have meant that 580 of the 680 market-rate units in Avila Ranch would have been occupied by the time Park G was constructed. In response to the Developer’s request to modify phasing and construct Phase 5 ahead of Phase 4, City staff negotiated updated timing triggers for Park G. Park G will now be required to commence construction prior to issuance of occupancy permits for the 500th market rate unit and must be constructed prior to the issuance of occupancy permits for the 550th market rate unit. This advances the completion of construction for Park G compared to the original condition’s timing and ensures that the development meets or exceeds the original ratio of park acreage per 1,000 residents contemplated during project approval. These new timing requirements for Park G are also consistent with timing requirements for the completion of Buckley Road widening and bicycle bridge improvements and construction of affordable housing units.

POLICY CONTEXT
This item supports the development of 101 Phase 5 housing units, which directly advances a Major City Goal for additional housing. The Subdivision Map Act requires City Council approval for subdivision final maps 1.

DISCUSSION
Tract 3089 Phase 5 Avila Ranch (FMAP-0132-2024) is located at 175 Venture Drive as shown on the Vicinity Map provided as Attachment E.

1 “The legislative body shall, at the meeting at which it receives the map or, at its next regular meeting after the meeting at which it receives the map, approve the map if it conforms to all the requirements of this chapter and any local subdivision ordinance applicable at the time of approval or conditional approval of the tentative map and any rulings made thereunder. If the map does not conform, the legislative body shall disapprove the map.” Govt.

Code 66458(a).

Item 6e
Background
A vesting tentative map for Tract 3089 was approved by the City Council on September 19, 2017, by Resolution No. 10832 (2017 Series). The approved tentative map (Attachment F) showed a total of 424 lots consisting of 398 single-family lots (R-1 and R2 zone), nine multi-family lots for up to 322 units (R-3 and R-4 zone), 11 park lots, two open space lots, two commercial lots, and two public facilities lots. At that same meeting, an Ordinance to adopt a Development Agreement was introduced and a Resolution of Intention to establish the Community Facilities District (CFD) was approved. The City and the Developer entered into a Development Agreement (DA), adopted by City Council on October 3, 2017 by Ordinance No. 1639 (2017 Series). The final steps to implement the CFD occurred at the November 21, 2017 Council meeting where the City Council adopted Ordinance No. 1642 (2017 Series) establishing a Special Tax for the CFD. The CFD was required to close the gap between anticipated general fund revenue to be generated by the development and projected costs to provide services to the development, such as police and fire, and to maintain the public infrastructure within Tract 3089 including parks, streets, sidewalks, parkways, open space, and storm drainage systems.

The previous Phase 1 final map was approved by Resolution No. 10968 (2018 Series) on December 4, 2018. Phase 1 created 179 single-family residential lots, three lots for 125 multi-family units, a lot for an interim fire station, and various lots for parks and public facilities. The Phase 2-3 final map was approved by Resolution No. 11472 (2024 Series) on January 23, 2024. The Phase 2-3 map created 121 single family residential lots, one large multi-family lot, two park lots, and an open space lot.

Although the tentative map shows up to 723 residential units being constructed, the resolution approving the tentative map and the Development Agreement both state that only 720 residential units are approved. A density bonus was approved by Planning Commission on February 14, 2024 with Resolution PC-1083-2024 for the affordable housing R-4 component to increase the total density to 740 units within the Specific Plan area, as allowed by State Density Bonus Law.

At this time, 160 homes have been completed, 64 permits are issued for construction, and 60 permits are under review for the development as a whole. The majority of the completed homes are in the Phase 1 area and active construction of homes in Phase 2- 3 areas is ongoing. The remaining homes to complete Phase 1 will be constructed last to avoid impacts to homeowners due to proximity to the Phase 1-3 model homes. All Phase 1 affordable units are complete and occupied, including 6 moderate-income for sale homes and 8 workforce housing units, as required by the Development Agreement. Two workforce units are currently under construction in Phase 2-3. A total of 3 moderate income homes and 5 workforce housing units will be provided in Phase 2-3. All parks in Phase 1 are complete and two parks in Phase 2-3 are under construction and nearing completion.

Phasing
At the time of tentative map submittal, the subdivider proposed to develop the project as shown on the Phasing Plan provided as Attachment G, and a Phased Vesting Tentative

Item 6e
Tract Map was approved with public improvements and infrastructure required for each respective phase. The conditions and mitigation measures were developed based on this phasing plan. The subdivider is not required to adhere to the phasing plan, but creating lots out of phase could result in subsequent environmental review and new or modified conditions in order to properly mitigate the impacts and provide for orderly development.

The Avila Ranch Development Plan and Exhibits E-1 through E-4 and J of the Development Agreement describe the project’s backbone infrastructure, which was planned to be designed and constructed in six (6) phases. Section 6.01.3 of the Development Agreement states that “The Phasing Plan may be amended by agreement of the Parties to take advantage of new technologies, to respond to changes in the underlying land use assumptions upon which the plan is based, or for such other reasons as the Parties may agree.”
Phase 5 is currently proposed for final map recordation and construction ahead of Phase

4. Phase 5 includes up to 101 low density R-1 zoned single family lots. Based on the recommendation of the Architectural Review Commission (ARC), the Planning Commission (PC) approved architectural review of the R-1 product in Phase 5 on August 10, 2022, by Resolution PC-1065-2022. Phase 4 is designated for up to 197 R-3 zoned multifamily townhome style units at the northeast side of the Avila Ranch development area. An application was recently submitted for Phase 4 architectural review by the ARC and Planning Commission, and the Phase 4 final map and public improvement plans have been submitted for City review and plan check. Phase 6 was merged into Phases 4 and 5, and no maps will be recorded with a Phase 6 designation. The two commercial parcels in Phase 6 have been incorporated into Phase 5. The Phase 6 agricultural/open space parcels have been incorporated into Phases 4 and 5.

A Transportation Analysis has been prepared by Central Coast Transportation Consulting (dated July 16, 2025) to evaluate the proposed modified phasing (Attachment H) and an Addendum to the Avila Ranch Final EIR (Attachment C) has been prepared by the City to clarify the timing of the transportation improvements required in Phases 4 and 5. A Development Agreement Memorandum of Agreement (Attachment B) has been prepared by the developer to reflect the modified phasing and timing of required infrastructure, which is visually depicted in the Transportation Improvement Phasing Plan (Attachment H) dated May 8, 2025. The modifications to the transportation improvement installation timing are described in more detail in this report below.

The Tract 3089 Phase 5 map is creating a total of 109 lots consisting of:
 101 single-family residential units (Lots 331 to 385 and 387 to 425 and 427 to 433)  Two public park lots (Lots 386 and 426)
 Four lots for public open space and/or agriculture (Lots 434, 435, 438, and 439)  Two commercial lots (Lots 436 and 437)

Item 6e
Minor Corrections to Approved Tentative Map
City Municipal Code Section 16.10.160 grants the Community Development Director the authority to approve minor corrections to an approved tentative map or conditions of approval if all the following are true:

1. No lots, units or building sites are added or deleted; and

2. The proposed changes are consistent with the intent and spirit of the original tentative map approval; and

3. The proposed changes are consistent with the zoning regulations, the building code, the General Plan, and the Subdivision Map Act.

Under the authority listed above, the Community Development Director has approved the following minor corrections for Tract 3089:

1. Revision of the lot numbering from tentative map to final map so that the numbering would be consecutive on the final map as required by Section 16.14.040.H of the San Luis Obispo Municipal Code.

2. Modifications to timing requirements for certain transportation improvement conditions of approval where related to the proposed modified phasing construction (Phase 5 construction ahead of Phase 4). The construction timing modifications are also reflected in the FEIR Third Addendum (Attachment C), the Development Agreement Memorandum of Agreement (Attachment B), and explained in more detail in the following section of this staff report.

3. Modification to the timing requirement for the construction of Park G due to the proposed modified phasing construction (Phase 5 construction ahead of Phase 4).

Park G, which is to be built with Phase 4, will now be required to commence construction prior to issuance of occupancy permits for the 500th market rate unit and must be constructed prior to the issuance of occupancy permits for the 550th market rate unit. This advances the completion of construction for Park G compared to the original condition’s timing and ensures that the development meets or exceeds the original ratio of park acreage per 1,000 residents contemplated during project approval.

Modifications to Timing of Transportation Improvement COAs and Mitigation The original project approvals included several transportation infrastructure improvements that were required to be constructed prior to or in conjunction with Phase 4 of the development. With approval of the Phase 5 final map and proposal to advance Phase 5 development ahead of Phase 4, staff has included the following clarifications to timing of transportation improvements. These clarifications are reflected in the FEIR Third Addendum (Attachment C) and the Development Agreement Memorandum of Agreement (Attachment B).

1. Timing of Mitigation Measure TRANS-4 and Condition of Approval #106: Horizon Lane Improvements (Suburban Road to Avila Ranch Project Boundary)

Item 6e
 Previous Approval: Per Mitigation Measure TRANS-4 and Condition of Approval #106, the Developer is required to construct/improve Horizon Road between Suburban Lane and the project boundary to City Engineering Standards for a commercial collector street, with designs completed prior to Phase 4 final map recordation, construction initiation prior to issuance of Phase 4 building permits, and construction completion prior to issuance of occupancy permits for the 100th residential unit of Phase 4 development.  Timing: No modifications proposed. Advancing Phase 5 ahead of Phase 4 does not trigger need for Horizon Lane improvements between Suburban Road and the project boundary. A Transportation Analysis Memorandum has been prepared by Central Coast Transportation Consulting (Attachment D), which confirms that no transportation impacts are anticipated by advancing Phase 5 prior to Phase 4 without the Horizon Lane improvements in place. Phase 5 is located on the south side of the development, adjacent to Buckley Road, and it is expected that Phase 5 traffic would predominantly use Buckley Road since this route provides a shorter path than a route north through the rest of the development via slower speed roads.

2. Timing of Mitigation Measure TRANS-4 and Condition of Approval #102: Suburban Road Improvements (Earthwood to Horizon/Jespersen)
 Previous Approval: Per Mitigation Measure TRANS-4 and Condition of Approval #102, the Developer is required to improve Suburban Road between Earthwood Lane and Horizon/Jespersen Road to City Engineering Standards for a commercial collector street, with design and construction initiation prior to issuance of 1st building permits for Phase 4, and construction completion prior to issuance of occupancy permits for the 100th residential unit of Phase 4 development and prior to the connection of Horizon Lane with the project site.  Timing: No modifications proposed. Advancing Phase 5 ahead of Phase 4 does not trigger need for Suburban Road improvements east of Earthwood, as development is not anticipated to add traffic to this segment of Suburban until Phase 4 development and extension of Horizon Lane between Suburban and Avila Ranch. A Transportation Analysis Memorandum has been prepared by Central Coast Transportation Consulting (Attachment D), which confirms that no transportation impacts are anticipated by advancing Phase 5 prior to Phase 4 without the Horizon Lane improvements in place.

3. Timing of Condition of Approval #107: Buckley Road Frontage Improvements  Previous Approval: Per Condition of Approval #107, the Developer is required to construct frontage improvements along Buckley Road from the Tank Farm Creek Bridge to the eastern site boundary, including addition of on-street Class II bike lanes/shoulders on both sides of the street, and an off-street Class I shared-use path on the north side of Buckley Road. Improvements are required to be designed prior to issuance of building permits for Phase 4 and

Item 6e
construction completed prior to issuance of occupancy permits for the 50th residential unit of Phase 4.
 Timing Modification: Design of Buckley Road frontage improvements shall be required prior to issuance of any building permits for Phase 4 or Phase 5, whichever comes first. Construction shall be completed prior to issuance of occupancy permits for the 50th cumulative residential unit with Phase 4 or Phase 5, whichever comes first.
 Note that this improvement requires that the Developer dedicate land to the County to facilitate the widening of Buckley Road. The Developer has submitted an Offer of Dedication to the County and that document has been approved by the County. The City and County will enter into a Maintenance Agreement for this portion of Buckley Road which will memorialize maintenance responsibilities for the improved portions of Buckley Road. Initial discussions between City and County staff have begun and the agreement itself is being finalized. The final agreement will be presented to the City Council and Board of Supervisors for approval.

4. Timing of Mitigation Measure TRANS-11 and Condition of Approval #109: Buckley Road Bicycle Bridges
 Previous Approval: Per project Mitigation Measure TRANS-11 and Condition of Approval #109, the Developer is required to construct two bicycle bridges over Tank Farm Creek located north and south of Buckley Road. Construction of both bridges was originally required prior to Phase 2. With previous Council approval of the Phase 2-3 final map (Resolution No. 11472), the required timing for construction of the bicycle bridge south of Buckley Road was modified to coincide with the Buckley Road frontage improvements required with Phase 4 in order to minimize construction impacts on properties to the south where a construction easement and right-of-way acquisition is needed. Discussions with the property owner regarding the needed right-of-way are underway at this time. The northern bicycle bridge remains a requirement with Phase 2. The FEIR First Addendum was prepared with the Phase 2-3 final map approval to reflect this change, which can be reviewed along with additional discussion on the modified timing of Mitigation Measure TRANS-11 in the January 23, 2024, City Council Agenda Report packet.
 Timing Modification: Completion of construction of the bicycle bridge over Tank Farm Creek south of Buckley Road shall be required prior to issuance of the 50th occupancy permit for Phase 4 or Phase 5, whichever occurs first. This modification is intended to ensure that the timing of construction of this bicycle bridge remains consistent with previous City Council approvals, even if Phase 5 is advanced ahead of Phase 4.

5. Timing of Condition of Approval #110: Jespersen/Venture & Jespersen/Wright Brothers Roundabouts

Item 6e
 Previous Approval: Per Condition of Approval #110, the Developer is required to construct single lane roundabouts at the Jespersen/Venture and Jespersen/Wright Brothers intersections, with design substantially complete prior to recordation of the Phase 4 final map and construction prior to issuance of building permits for Phase 4.
 Timing Modification: Design of the roundabouts to be substantially complete prior to recordation of Phase 4 or Phase 5 final map, whichever comes first, and construction complete prior to issuance of any building permits for Phase 4 or Phase 5.

An Addendum to the FEIR (Attachment C) has been prepared to address a minor change to the timing of Mitigation Measure TRANS-11 (Buckley Road South Bicycle Bridge) from Phase 4 to Phase 4 or 5 (whichever comes sooner), and to document that the Horizon Lane and Suburban Road Improvements required with Phase 4 per Mitigation Measure TRANS-4 are not triggered/warranted if Phase 5 is advanced ahead of Phase 4. A Memorandum of Agreement to the project Development Agreement has also been prepared (Attachment B) to reflect these timing clarifications 2. As required by Mitigation Measure TRANS-2, a Transportation Improvement Phasing Plan (Attachment H) has been prepared to graphically reflect the timing of offsite transportation improvements by phase as currently proposed for construction.

Community Facilities District
The Community Facilities District (CFD) for Avila Ranch was established by Council Ordinance No. 1642 (2017 Series) for Tract 3089 to fund both services and infrastructure maintenance. The CFD closes the gap between anticipated general fund revenue generated by the development and projected costs to provide services to the development, such as police and fire, and public infrastructure maintenance including parks, streets, sidewalks, parkways, open space, and storm drainage systems.

Maintenance of water and sewer infrastructure in Tract 3089 will be funded via the enterprise program consistent with the rest of the citywide systems.

This is the City’s first CFD established for the purpose of ongoing maintenance. The CFD also helps to cover the cost of City services associated with this residential development such as Fire, Police, and infrastructure maintenance. A property tax exchange with the County of San Luis Obispo was established for this property when it was annexed in 2008 and was based on the County’s master tax exchange agreement for commercial land.

This tax exchange does not provide the City with any property tax increment as the

2 Section 6.01 of the Development Agreement states that while the project’s backbone infrastructure is planned to be designed and constructed in six (6) phases, further analysis may result in a more costeffective approach to the provisions of such infrastructure to adequately serve development within the Project Area. Section 6.01.1 states that the infrastructure design and construction phasing may be revised with a written agreement (Memorandum of Agreement) signed by both the City and the Developer, and that such revisions shall not require amendment to this Development Agreement.

Additionally, Section 6.01.3 of the Development Agreement provides: “The Phasing Plan may be amended by agreement of the Parties to take advantage of new technologies, to respond to changes in the underlying land use assumptions upon which the plan is based, or for such other reasons as the Parties may agree.”

Item 6e
property is developed. Therefore, the CFD ensures adequate funding is available for the City to maintain the public facilities and services that will serve this new neighborhood.

The funds for the CFD are collected by the County with the regular property tax assessments, beginning with the issuance of the building permit on each lot. The County disperses the CFD funds to the City twice per year.

Affordable Housing
The Avila Ranch Affordable/Workforce Housing Plan (Exhibit G of the Development Agreement) identifies the quantity, affordability level, and location of the project’s required affordable and inclusionary housing units. Overall, the Avila Ranch project will provide a total of 32 low-income, 35 moderate-income, 25 workforce, and 19 additional density bonus affordable units. The Development Agreement also includes design and development strategies that serve to provide a range of additional affordable housing in excess of standard inclusionary ordinance requirements.

Phase 5 of Avila Ranch does not include any deed restricted affordable or inclusionary housing units. Phases 1, 2, 3, and 4 meet that requirement for the tract, with the majority of the affordable units to be provided in the multifamily (R-4 and R-3) portions of Phases 3 and 4.

Given that the Development Agreement contemplated the possibility of project phases being constructed out of order, timing triggers were included in the project’s Affordable Housing Agreements (AHA) at the time of recordation in order to ensure affordable units are constructed earlier in the project, rather than at the end of the project. The most recent Affordable Housing Agreement was recorded for Phase 3, which includes a requirement of 59 affordable units on a site dedicated to an affordable housing developer for development. In order to ensure that these affordable units are completed, the Affordable Housing Agreement requires construction of the affordable housing project in Phase 3 to begin prior to the issuance of a building permit for Avila’s 500th unit and requires the affordable project to be substantially completed by the issuance of a building permit for Avila’s 550th unit. The market rate developer has transferred the Phase 3 affordable housing site to C&C Development, an affordable housing developer, who will construct the 59 affordable units. There are 740 total residential units within Avila Ranch; therefore, building permits will not be issued for the last 240 units until the affordable housing site in Phase 3 is under construction. These types of timing triggers ensure that affordable housing is constructed at the same time as the market rate units, regardless of which phase is constructed first, as the timing triggers are not tied to a specific phasing plan but rather to total unit count. At this time, 160 homes have been completed, 64 permits are issued for construction, and 60 permits are under review for the development.

Parks
Section 7.03 of the DA requires the subdivider to dedicate land in excess of that ordinarily required by the City to construct public parks in south San Luis Obispo, an area of the City that presently has a deficiency of park area. In particular, Tract 3089 shall provide

18.25 acres of public park land, 1.76 acres in excess of City requirements. As shown on the Park Layout provided as Attachment I, a total of nine park lots labeled Park A through

Item 6e
Park I are proposed in Tract 3089. The Parks and Recreation Commission (PRC) reviewed the conceptual plans for Parks A through I on January 4, 2017, and recommended approval to the Council. The City Council approved the Avila Ranch Parks Master Plan on September 19, 2017 as Appendix B of the Avila Ranch Development Plan. The PRC also reviewed and approved detailed park plans for Parks A, B, and C at that time. Parks D and E are being constructed in Phase 2-3. Parks H and I are proposed to be constructed in Phase 5. Phase 5 provides sufficient parkland and park improvements to meet City requirements based on the projected population and housing onsite, so there would be no "in-lieu" park fees needed. Project-related fees, taxes and assessments are described in Section 5.04 of the Development Agreement. Parks are not among the identified fee-generators in this section. Parks F and G will be constructed in Phase 4, which will be constructed after Phase 5. Park G is an 11-acre sports complex that was originally required to be constructed before the end of construction of Phase 4.

This would have meant that 580 of the 680 market-rate units in Avila Ranch would have been occupied by the time Park G was constructed. In response to the Developer’s request to modify phasing and construct Phase 5 ahead of Phase 4, City staff negotiated updated timing triggers for Park G. Park G will now be required to commence construction prior to issuance of occupancy permits for the 500th market rate unit and must be constructed prior to the issuance of occupancy permits for the 550th market rate unit. This advances the completion of construction for Park G compared to the original condition’s timing and ensures that the development meets or exceeds the original ratio of park acreage per 1,000 residents contemplated during project approval. This change is memorialized in the attached MOA.

Off-Site Transportation Improvements
Per the subdivision conditions of approval, mitigation measures, and the DA, Tract 3089 is required to complete multiple off-site transportation improvements to mitigate for the increase in traffic generated by the development. Many of these improvements were constructed with Phase 1 of the tract, including construction of the Buckley Road Extension, extension of the northbound right-turn lane at the Higuera/South intersection, addition of bicycle lanes on Vachell Lane, addition of sidewalks on S. Higuera between Los Osos Valley Road and Vachell Lane, and improvements to the S. Higuera/Tank Farm intersection. The Subdivider has also paid fair share mitigation fees with Phase 1 and Phase 2-3 for additional off-site projects that are not triggered solely by this development but will ultimately be needed upon build-out of the City, including contributions towards future improvements along the Buckley Road corridor beyond the project site and the Highway 227/Buckley Road intersection.

Off-site improvements required with Phase 2-3 of the development include installation of a permanent median and left-turn access restrictions at the S. Higuera/Vachell Lane intersection [Condition #104], construction of sidewalk on the east side of S. Higuera Street from Los Osos Valley Road to the southern City Limits [Condition #111], and construction of the bicycle bridge over Tank Farm Creek on the north side of Buckley Road [Mitigation Measure TRANS-11 and Condition #109].

Item 6e
Phase 5 is subject to additional off-site improvement requirements, which were described previously in this report and summarized again as follows:
 Buckley Road Widening – Widen Buckley Road along project frontage east of the Tank Farm Creek Bridge to provide on-street Class II bike lanes/shoulders and an off-street Class I path on the north side of the street. Completion required prior to issuance of occupancy permits for the 50th residential unit of Phase 4 or Phase 5, whichever comes sooner [Condition #107, based on modified phasing plan].  Buckley Road Bicycle Bridges at Tank Farm Creek (South Side) – Construction of the bicycle bridge on the south side of Buckley Road to be constructed in conjunction with the project’s Buckley Road frontage improvements, with improvement completion required prior to issuance of occupancy permits for the 50th residential unit of Phase 4 or Phase 5, whichever comes sooner [Mitigation Measure TRANS-11 and Condition #109, based on modified phasing].

The timing requirements for these offsite improvements is reflected in a FEIR Addendum (Attachment C) and the Development Agreement Memorandum of Agreement (Attachment B). The Developer will enter into the draft Subdivision Agreement provided as Attachment K, which includes bonding requirements if the Phase 5 improvements are not completed at time of map recordation.
 Fees:
o Buckley/Vachell Fair Share Mitigation – Funds fair share contribution towards future intersection control upgrades (roundabout or signal). Fees due with map recordation of each phase based on percent of total traffic generated by phase.

Total for full build out is $108,798. The fee allocation for Phase 5 is $13,884.05 and $25,024.17 for Phase 6, which is now included in Phase 5 and will be paid at time of Phase 5 final map recordation.
o Citywide and Los Osos Valley Road Subarea Transportation Impact Fees (TIF).

Fees are vested into the TIF rate schedule that is in effect at time of final map recordation for each phase. Fees are paid with each building permit issuance while accounting for available fee credits remaining for eligible infrastructure improvements constructed by Avila Ranch.

There are other improvements identified in the conditions, mitigation measures, and the DA where the Subdivider is required to pay a fee for the project’s fair share of the improvement instead of constructing the improvement. Some of these fees are for future intersection improvements along Buckley Road, the extension of the Bob Jones Trail, improvements at the S. Higuera/Los Osos Valley Road intersection, and the recent improvements to the Los Osos Valley Road interchange. Other required fair share fees have been moved into the Citywide TIF, so payment of the current Citywide TIF by the Subdivider would satisfy those requirements. Unless otherwise allowed in the project approvals, the fair share fees will be paid at map recordation.

Interim Fire Station

Item 6e
The interim fire station is required to be constructed prior to occupancy of the 361st unit (occupancy of 50% of the development), as identified in the Final EIR. City staff has been meeting with the Avila Ranch developer and their design engineer to prepare a preliminary design for the fire station. Programing and site layout is in process. The fire station design will be reviewed by the City’s Architectural Review Commission (ARC). It is expected to take approximately 1 year to construct, which is anticipated to begin by spring 2027. The targeted date for fire station to be open and operational is May 2028.

Reimbursement Agreements
As outlined in the Development Agreement and the conditions of approval, some of the infrastructure improvements being constructed with Tract 3089 are eligible for reimbursement. All local funding contributions towards reimbursement obligations to Avila Ranch have already been allocated in previous Financial Plans. To facilitate these reimbursements, a Public Reimbursement Agreement was approved by the City Council on December 4, 2018 by Resolution 10968 (2018 Series), and a Private Reimbursement Agreement was approved on June 18, 2019 by Resolution 11022 (2019 Series).

Wetlands
Phase 5 will not be disturbing any wetlands, therefore no easement documents for wetlands will need to be prepared.

Agricultural and Open Space Conservation
To compensate for the loss of onsite agricultural lands and to meet the open space objectives of the General Plan, Section 7.04 of the Development Agreement requires Tract 3089 to dedicate at least 50 acres of on-site open space and/or agricultural land and preserve at least 50 acres of offsite open space and/or agricultural land. The Subdivider previously recorded an easement for 30.5 acres of on-site agricultural land with the Phase 1 map, although this land was located in Phases 4 and 5 and not part of the Phase 1 subdivision. The Phase 1 final map included 5.46 acres of open space dedication, and the Phase 2-3 final map included 3.6 acres of open space dedication.

Phase 5 will dedicate 14.34 acres of open space and/or agriculture land, located on lots 434, 435, 438, and 439 to the City. The balance of on-site agricultural lands and open space will be dedicated as 25.48 acres of agricultural land in Phase 4, as shown on the approved tentative map (Phase 6 has been eliminated and distributed to Phase 4 and 5 final maps). The Avila Ranch project opted to satisfy a portion of its open space conservation requirements through an in-lieu fee, which has been received with Phase 1 map recordation and is paid in full.

The resolution approving the final map authorizes the City Clerk to accept an offer of dedication in fee for Lots 434, 438, and 439 for open space purposes, and Lots 426 and 386 for Public Park Purposes with the signature of the Clerk on the final map. Lot 435 will be dedicated in fee to the City by a separate irrevocable offer of dedication for open space/agricultural purposes. The resolution approving the final map authorizes the Mayor to accept this offer at any future date based on the recommendation of the Natural Resources Manager that the required due-diligence investigations have been completed.

This ensures that the City does not accept fee ownership of agricultural land without

Item 6e
confirmation that the land does not create new liability for the City. The offer for Lot 435 must remain open but the City is not required to accept the dedication at any future date.

The acceptance of the fee offers will provide for all potential uses of that site, including drainage, pedestrian and bicyclist access, public utilities, and bridges. The land that will become Lots 386, 426, 435, and 438 has traditionally been agricultural land while the land that will become Lots 434 and 439 has served as Tank Farm Creek traditionally.

Approving the Final Map
Although tentative maps typically have an initial two-year life per Municipal Code Section

16.10.150, approval of a Development Agreement allows for that lifespan to be extended pursuant to Government Code Section 66452.6(a)(1). Section 8.04 of the Development Agreement extends the life of the tentative map to the later of (i) the expiration or earlier termination of the Development Agreement or (ii) the date upon which the tentative map would expire under the laws of the State of California. According to Section 1.03.1 of the Development Agreement, the duration of the Development Agreement could extend to the year 2047.

The final map for Tract 3089 Phase 5 (Attachment J) is ready to be approved. There may be minor revisions still required for technical accuracy and condition compliance, to be completed before the map records. Pursuant to Section 16.14.080 of the Municipal Code, the Public Works Director has determined that the final map is in substantial compliance with the tentative map and approved modifications thereof. California Government Code Section 66474.1 states that “a Legislative body shall not deny approval of a final or parcel map if it has previously approved a tentative map for the proposed subdivision and if it finds that the final or parcel map is in substantial compliance with the previously approved tentative map.” The approval of a final map is considered a ministerial action.

Appropriate securities will be submitted prior to map recordation to guarantee completion of the required subdivision improvements as shown in the Subdivision Agreement (Attachment K). The Subdivision Agreement is still in draft form as some details still need to be confirmed with the Subdivider such as amount and timing of fee payments, bonds, and specific language in the agreement. The resolution approving the final map also authorizes the Mayor to sign the Subdivision Agreement requiring the Subdivider to complete the subdivision improvements.

Public Engagement
Public notification for the tentative map, environmental document, and underlying entitlements occurred with the Planning Commission hearings on June 28, 2017, June 29, 2017, July 12, 2017, and August 9, 2017, and at the City Council meeting on September 19, 2017. Approval of the final map is considered a ministerial action, so a public hearing to approve the final map for this Phase 5 map is not required.

CONCURRENCE

Item 6e
The Director of Public Works, the Director of Parks and Recreation, the Fire Chief, and the Natural Resources Manager concur with the recommended action.

ENVIRONMENTAL REVIEW
The Avila Ranch Development Plan (ARDP) and associated Final Environmental Impact Report (FEIR) were approved and certified by the City Council on September 19, 2017, pursuant to Resolution No. 10832 (2017 Series). The significance of each impact resulting from implementation of the Project was determined based on impact significance criteria and applicable CEQA Guidelines for each impact topic. The EIR found that the Project would result in significant and unavoidable construction-related and long-term impacts to air quality, construction-related noise, and long-term transportation and traffic impacts.

Mitigation measures were adopted to reduce the potential impacts where feasible, and the City Council adopted CEQA findings and a Statement of Overriding Conditions to address the identified significant and unavoidable impacts described in the Final EIR. All mitigation measures adopted as part of the ARDP FEIR that are applicable to the project are carried forward and applied to the project to effectively mitigate the impacts that were previously identified.

A First Addendum to the Final EIR was prepared in January 2024 to address a change in timing of the implementation of Mitigation Measure TRANS-11, which established an obligation for the project to install two separated bicycle bridges on each side of Buckley Road at Tank Farm Creek to improve access to safe bicycle routing along Buckley Road.

The timing of the southern bicycle bridge was modified to coincide with the Buckley Road frontage improvements required with Phase 4. The City Council approved the FEIR First Addendum on January 23, 2024.

A Second Addendum to the Final EIR was prepared in February 2024 to document an affordable housing density bonus to increase the density of the R-4 project component from 125 to 145 units. The transportation analysis for the density bonus found that the addition of 20 affordable housing units would not result in new impacts to Vehicle Miles Traveled (VMT) and would not result in additional transportation impacts. The Planning Commission approved the FEIR Second Addendum on February 14, 2024.

A Third Addendum to the Final EIR has been prepared, pursuant to CEQA Guidelines Sections 15164 and 15162, to address the timing for buildout of the six (6) phases of the Vesting Tentative Tract Map. The Developer is proposing to construct Phase 5 of Tract 3089 ahead of Phase 4. Phase 6 has been eliminated and absorbed by Phases 4 and 5.

Modified phasing construction was contemplated by Article 6 of the Avila Ranch Development Agreement, which states that the phasing plan and phased installation of project infrastructure may be amended by an agreement between the Developer and the City. An addendum to a previously certified Final EIR is appropriate when minor technical changes or additions are necessary and none of the conditions described in CEQA Guidelines Section 15162 have occurred. The FEIR Third Addendum addresses updated timing requirements related to the construction of the south bicycle bridge on Buckley Road (Mitigation Measure TRANS-11) and improvements to Horizon Lane and Suburban Road (Mitigation Measure TRANS-4). The south bicycle bridge will be constructed in

Item 6e
Phase 4 or 5, whichever comes first, concurrent with the bicycle lanes and road widening on Buckley. Improvements to Horizon Lane and Suburban Road will remain tied to Phase 4 final map construction.

The FEIR and associated Addendums constitute the complete environmental determination for the project. The final map is substantially in conformance with the tentative map evaluated with this prior environmental determination.

Approval of the final map is statutorily exempt under the California Environmental Quality Act (CEQA) pursuant to Section 15268(b)(3) Ministerial Projects (approval of final subdivision maps) of Title 14 of the California Code of Regulations (State CEQA Guidelines). Therefore, no further environmental review is required.

FISCAL IMPACT
Budgeted: Yes Budget Year: 2026-Ongoing
Funding Identified: Yes
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: CFD
Total $0 $0 $0 $0
There are no fiscal impacts directly associated with approval of the final map for Tract 3089 Phase 5. The City will eventually incur costs upon acceptance of the improvements by the City, which will occur by separate Council action once the subdivision improvements are deemed complete.

The CFD structure is designed to be revenue neutral to the City to fund the cost of services, such as police and fire, and infrastructure maintenance. The CFD is analyzed each year and taxes are levied to cover projected costs which will increase incrementally as more of the CFD-maintained services and improvements come online. An analysis of the annual costs to provide the services and infrastructure maintenance to the Avila Ranch development, including administration, is currently estimated to be $1.7 million annually at buildout. The City is collecting Special Taxes from the developed parcels within Avila Ranch and incorporates this funding into a maintenance budget for the improvements at the development. Currently, the CFD is estimated to generate $1.7 million in annual revenue at buildout, therefore there is no net fiscal impact anticipated for the City’s budget. Costs for maintenance of the new open space and public park lots included in the Phase 5 final map will be incorporated into the CFD services budget, which is $721,520 for FY 25-26, as well

Item 6e
as future financial plans. The CFD at Avila Ranch was established in-lieu of a Homeowners Association, and therefore the CFD funds of approximately $200 per month per unit provides the maintenance of roads, parks, and other infrastructure within the development. This cost has previously been determined to be within the City’s financial plan policy limits for total property tax burden.

ALTERNATIVES
Deny approval of the final map. Denying approval of the final map is appropriate only if findings are made that the requirements or conditions of the tentative map have not been met or performed (Section 66473 of the Subdivision Map Act) or if findings are made that the final map is not in substantial compliance with the previously approved tentative map (Section 66474.1 of the Subdivision Map Act). Because the final map is in substantial compliance with the tentative map and all the conditions of the map will be met or securities deposited prior to map recordation, Sections 66474.1 and 66473 of the Subdivision Map Act require that the City Council approve the map.

ATTACHMENTS
A - Draft Resolution approving Avila Ranch Tract 3089 Phase 5 Final Map B - Development Agreement Memorandum of Agreement: Modified Phasing Buildout C - Third Addendum to the Avila Ranch Final EIR
D - Transportation Analysis, May 9, 2025 by Central Coast Transportation Consulting E - Vicinity Map
F - Tentative Map (Tract 3089)
G -Phasing Plan (Tract 3089)
H - Transportation Improvement Phasing Plan and Off-Site Construction Requirements dated July 16, 2025
I - Park Layout (Tract 3089)
J - Draft Final Map Tract 3089 Phase 5
K - Draft Subdivision Agreement Tract 3089 Phase 5

R ______
RESOLUTION NO. _____ (2025 SERIES)

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

OBISPO, CALIFORNIA, APPROVING THE FINAL MAP FOR TRACT
3089 PHASE 5, AVILA RANCH, INCLUDING AN ADDENDUM TO THE

FINAL ENVIRONMENTAL IMPACT REPORT CLARIFYING THE TIMING

OF TRANSPORTATION MITIGATION MEASURES, AND AUTHORIZING

THE MAYOR TO EXECUTE A SUBDIVSION AGREEMENT IN A FORM
SUBJECT TO THE APPROVAL OF THE CITY ATTORNEY (175
VENTURE DRIVE, FMAP-0132-2024)
WHEREAS, the City Council made certain findings concerning the phased vesting tentative map for Tract 3089, as prescribed in Resolution No. 10832 (2017 Series); and WHEREAS, the City Council entered into a Development Agreement with the Subdivider of Tract 3089 with Ordinance No. 1639 (2017 Series); and WHEREAS, the Community Development Director approved minor corrections to the tentative map as allowed by the City Municipal Code and California Government Code; and
WHEREAS, the Subdivider has requested that the Council approve the final map for Tract 3089 Phase 5; and
WHEREAS, there are certain lots that are offered to the City in fee for public purposes; and
WHEREAS, Tract 3089 is required to preserve at least 50 acres of on-site open space and/or agricultural land and preserve at least 50 acres of offsite open space and/or agricultural land by the recordation of deed restrictions, but only a portion of that is required to be preserved with Phase 5; and
WHEREAS, the Subdivider will be constructing certain improvements that are eligible for fee credits per the project’s development approval documents and the City’s AB1600 fee program; and
WHEREAS, the Subdivider will submit appropriate securities to guarantee installation of the required subdivision improvements as shown on the approved plans prior to map recordation, and the required fees will be received prior to map recordation, as prescribed in the Subdivision Agreement, the Development Agreement, and the project approvals; and
WHEREAS, all requirements, conditions and mitigation measures required per said Council Resolution No. 10832 (2017 Series) approving the tentative map and Ordinance No. 1639 (2017 Series) approving the Development Agreement have been

Resolution No. _____ (2025 Series) Page 2
R ______
completed or appropriate securities will be in place to guarantee their completion prior to Phase 5 map recordation; and
WHEREAS, the Avila Ranch Development Plan and associated Final Environmental Impact Report were approved and certified by the City Council on September 19, 2017, pursuant to Resolution No. 10832 (2017 Series); and WHEREAS, a First Addendum to the Final EIR was approved by the City Council on January 23, 2024 to address a change in timing of the implementation of Mitigation Measure TRANS-11; and
WHEREAS, a Second Addendum to the Final EIR was approved by the Planning Commission on February 14, 2024 to document an affordable housing density bonus which increased the density of the Avila Ranch R-4 project component from 125 to 145 units; and
WHEREAS, a Third Addendum to the Final EIR has been prepared to evaluate the modified phasing plan for Avila Ranch with Phase 5 to be constructed ahead of Phase 4, including clarifications and minor modifications to the required timing of the project’s transportation mitigation measures; and
WHEREAS, approval of the final map is statutorily exempt under the California Environmental Quality Act (CEQA) pursuant to Section 15268(b)(3) Ministerial Projects (approval of final subdivision maps) of Title 14 of the California Code of Regulations (State CEQA Guidelines), therefore, no further environmental review is required for approval of the Tract 3089 Phase 5 final map.

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

SECTION 1. The final map for Tract 3089 Phase 5 is found to be in substantial conformance with the tentative map.

SECTION 2. Phase 5 provides sufficient parkland and park improvements to meet City requirements based on the projected population and housing onsite, so there are no "in-lieu" park fees required.

SECTION 3. The City Clerk is authorized to accept fee offers for the open space and park lots dedicated on the map with the signing of the final map.

SECTION 4. The Mayor is authorized to accept the irrevocable offer of dedication in fee for Lot 435 for open space/agricultural purposes dedicated by separate instrument to record concurrently with the map at any future date based on the recommendation by the City’s Natural Resources Manager that the required due-diligence investigations have been completed.

Resolution No. _____ (2025 Series) Page 3
R ______
SECTION 5. Approval of the final map for Tract 3089 Phase 5 is hereby granted with the understanding that minor changes to the final map for technical accuracy and condition compliance are still needed. The Public Works Director is authorized to approve these changes and record the map when it is deemed to be complete, and all conditions and mitigation measures are complied with.

SECTION 6. The Mayor is authorized to approve revisions to the Subdivision Agreement for Tract 3089 Phase 5 and execute the agreement in a form substantially the same as shown in Attachment K of the staff report.

SECTION 7. Pursuant to the FEIR Third Addendum provided as Attachment C of the Council Agenda Report, the timing of Mitigation Measure TRANS-4 and TRANS-11 has been modified and clarified based on the modified project phasing plan, and said modification does not trigger one of the events in Section 15162 of the CEQA Guidelines and therefore an addendum is appropriate.

SECTION 8. The Public Works Director is authorized to reduce or release securities for the public improvements once the requirements for release are met and is authorized to cause the improvements to be accepted into the City’s maintenance system.

SECTION 9. The City Manager is authorized to execute a Memorandum of Agreement in a form that is substantially the same as shown in Attachment B of the staff report.

SECTION 10. The Mayor and City staff are authorized to take action necessary to carry out the intent of this resolution.

Resolution No. _____ (2025 Series) Page 4
R ______
SECTION 11. Environmental Review. The Avila Ranch Development Plan (ARDP) and associated Final Environmental Impact Report, together with the three (3) FEIR Addendums, constitute the complete environmental determination for the project, and the Third Addendum is hereby approved. All mitigation measures adopted as part of the ARDP FEIR that are applicable to the project are carried forward and applied to the project to effectively mitigate the impacts that were previously identified. The final map is substantially in conformance with the tentative map evaluated with these prior environmental determinations. Approval of the final map is statutorily exempt under the California Environmental Quality Act (CEQA) pursuant to Section 15268(b)(3) Ministerial Projects (approval of final subdivision maps) of Title 14 of the California Code of Regulations (State CEQA Guidelines). Therefore, no further environmental review is required.

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

1 RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:

City of San Luis Obispo
Community Development
919 Palm St.,
San Luis Obispo, CA 93401-3218
Attn: _________________
No fee pursuant to Government Code Sect. 6103
No Documentary Transfer Tax per R & T Code Sect. 11922
No Recording Fee per Government Code Sect. 27383

MEMORANDUM OF AGREEMENT
This Memorandum of Agreement ("MOA No. 2") is made this ___ day of August, 2025, by and among Trumark Construction Services, Inc., a California corporation (“Developer”) MRP HTMB, LLC, a Delaware limited liability company, doing business in California as Millrose California Holdings, LLC ("Owner”) and the City of San Luis Obispo, a municipal corporation and charter city (“City"). Developer, Owner, and City are sometimes collectively referred to as “Parties.”

1. On October 3, 2017, City adopted that certain agreement entitled “Development Agreement by and Between the City of San Luis Obispo and Avila Ranch, LLC, relating to the Avila Ranch Specific Plan” (“Development Agreement”) (amended by the certain Amendment No. 1 dated April 16, 2019) in conjunction with the development of approximately 152 acres of real property located north of Buckley Road and east of Vachell Road, in the City of San Luis Obispo, commonly referred to as Avila Ranch (the “Avila Ranch Project” or “Project”).

2. The Development Agreement provides that the Avila Ranch Project will be constructed in six (6) phases (Phases 1 through 6) as illustrated in Exhibit “D” to the Development Agreement.

3. On and after June 14, 2019, Avila Ranch Developers, Inc., acquired ownership of approximately 59 acres west of Tank Farm Creek making up Phase 1, 2 and 3 of the Avila Ranch Project and the rights to develop the Avila Ranch Project pursuant to the entitlements approved by the City, including, but not limited to the Development Agreement.

4. On or about November 6, 2020, 104 Investments, LLC, a California limited liability company (“104”), Wathen Castanos Peterson Coastal, LP, a California limited partnership (“WCP Coastal”), Joshua Elof Peterson and Cory Jessica Malone, as Co-Trustees of the Peterson Family Trust, established under Declaration of Trust dated January 7, 2015 (the “Peterson Trust”), FG2 Holdings, LLC, a California limited liability company (“FG2”) Avila Ranch EA, LLC, a California limited liability company (“AREA”) and CJ Holdings, LP, a California limited partnership (“CJ Holdings”) (collectively “Investcos”) acquired ownership of approximately 92 acres, east of Tank Farm making up Phases 4, 5 and 6 of the Avila Ranch Project (“Phase 4-6 Property”) pursuant to the entitlements approved by the City, including, but not limited to the Development Agreement.

5. On or about September 8, 2021, Avila Ranch Developers, Inc., a California corporation, as the “Developer”, together with Investcos, and City entered that certain Memorandum of Agreement, for the

2 purposes of establishing the terms and conditions upon which Developer would advance Phases 4 and 5 ahead of Phases 2 and 3, attached hereto as Exhibit “A” (“MOA No. 1”).

6. Notwithstanding MOA No. 1, Phases 4 & 5 were not constructed in advance of Phases 2 & 3; nevertheless, the Project remains in compliance with paragraph 10 of MOA No. 1 with respect to the timing and completion of those certain identified conditions of approval (“COA”) described therein.

7. On October 12, 2023, Trumark Companies (“Trumark”), acquired the home building business of WCP Developers, LLC, including that of Avila Ranch Developers, Inc. and certain portions of the Avila Ranch Project, including the balance of Phase 1, the property included in the Phase 2 & 3 Final Map, excluding the multi-family portions (Lot 327).

8. On February 14, 2025, TH Avila Ranch, a Trumark related entity, acquired the Phase 4-6 Property.

9. On March 25, 2025, in conjunction with the recordation of the Phase 2 & 3 Final Map, City and TH Avila Ranch entered into the “Avila Ranch Phase 3 Affordable Housing Agreement and Declaration of Restrictive Covenants” (“Phase 3 Affordable Housing Agreement”) wherein Section 2.2 provides:

Construction of R-4 Affordable Housing Project. The Parties have agreed that the Affordable Housing Provider will construct the R-4 Affordable Housing Project, consisting of thirty-two (32) rental units to Lower-Income Households (including, without limitation, eight (8) two-bedroom/1-bath rental units to Low-Income Households), twenty-seven (27) rental units to Moderate-Income Households (including, without limitation, eight (8) twobedroom/1-bath rental units to Moderate-Income Households), and one (1) manager’s unit, for a total of sixty (60) rental units, in the approximate location shown and described on Exhibit B in conformance with the provisions of Article 5 herein.

10. Furthermore, Article 5 of the Phase 3 Affordable Housing Agreement, the terms of which are incorporated herein by reference, imposed a timeframe within which the construction of the R-4 ForRent Affordable Units was to commence and be completed; specifically Section 5.5 provides:

Construction Timing of Affordable Housing Project. For purposes of this Agreement, the term “Commence Construction” means issuance by the City of a “ready to issue” letter for a building permit for the R-4 Affordable Housing Project, the only condition for which is the payment of City fees. For purposes of this Agreement, the term “Substantially Complete Construction” means completion of seventy-five percent (75%) of the construction of the R-4 Affordable Housing Project as demonstrated by the construction budget attached to the first lender construction loan documents for the R-4 Affordable Housing Project and draw requests approved by the first lender. In order to ensure that the Affordable Housing Project is completed earlier in the Project, as opposed to the last phase of the Project, the City reserves the right to withhold the issuance of building permits to ARD if the Affordable Housing Provider has not Commenced Construction by the issuance of a building permit for ARD’s 500th unit, and/or if the Affordable Housing Provider has not Substantially Completed Construction by the issuance of a building permit for ARD’s 550th unit.

3 11. On March 30, 2025, in a land banking arrangement, TH Avila Ranch, transferred title to the Phase 4-6 Property to MRP California, LLC (“MRP California”), a Delaware limited liability company, doing business in California as Millrose California Holdings, LLC, with the understanding that Trumark, by and through its general contracting entity, Trumark Construction Services, Inc, a California corporation, would continue to construct and develop the Phase 4-6 Property in accordance with the Development Agreement and all other Project entitlements.

12. On May 9, 2025, MRP California, changed its name to MRP HTMB, LLC, a Delaware limited liability company, doing business in California as Millrose California Holdings, LLC (“MRP”)

13. Section 6.01 of the Development Agreement provides that the Project’s Backbone Infrastructure is planned to be designed and constructed in six (6) phases, as described in Exhibit E-1 through E-4 and J of the Development Agreement.

14. Notwithstanding the foregoing, the Development Agreement further provides:

The Parties acknowledge that further analysis may result in a more cost-effective approach to the provisions of such infrastructure to adequately serve development within the Project Area, and that Exhibit E-1 through E-4 and J may be revised accordingly by agreement of the Parties and that such revisions shall not require amendment to this Development Agreement. (Development Agreement Section

6.01.1)

15. Additionally, Section 6.1.3 of the Development Agreement provides:

The Phasing Plan may be amended by agreement of the Parties to take advantage of new technologies, to respond to changes in the underlying land use assumptions upon which the plan is based, or for such other reasons as the Parties may agree.

16. All COA’s relating to Phase 1 have been completed and the COA’s relating to the development of Phases 2 & 3 have commenced and are complete or nearly complete.

17. Developer is separately processing both the Phase 4 (R-3) and Phase 5 (R-1) Final Maps and desires to commence construction of Phase 5 in advance of Phase 4.

18. In advancing Phase 5 ahead of Phase 4, Developer, with the consent of Owner, agrees to implement the following Conditions as indicated below:

A. Horizon Lane Improvements: Improvements to Horizon Lane between Suburban Road and the Avila Ranch project boundary required per MM TRANS-4 and COA #106 is an improvement required with Phase 4.
 Developer requests to retain timing of this improvement with Phase 4, as outlined in the CCTC memo dated July 16, 2025. The specific timing requirements identified in TRANS4 and COA #106 which tie improvement milestones to permit issuance and occupancy at certain points in Phase 4 will remain.

B. Suburban Road Improvements: Improvements to Suburban Road between Earthwood and Horizon Lane required per MM TRANS-4 and COA #102 is an improvement required with Phase 4.

4  Developer requests to retain timing of this improvement with Phase 4, as outlined in the CCTC memo dated July 16, 2025. The specific timing requirements identified in TRANS4 and COA #102 which tie improvement milestones to permit issuance and occupancy at certain points in Phase 4 will remain.

C. Buckley Road Frontage Improvements: Widening of Buckley Road east of Tank Farm Creek Bridge along project frontage required per COA #107 includes Class 1 bike path on north side of road and Class II bike lanes on the south side of the road. Per COA #107, these improvements are required to be initiated prior to issuance of building permits for Phase 4, and improvements shall be completed no later than the 50th residential unit occupancy of Phase 4 development.  Per this MOA No. 2, Developer requests that these improvements will be installed with Phase 4 or 5, whichever comes first. For the avoidance of doubt, these improvements will be initiated prior to issuance of building permits for Phase 4 or Phase 5, and these improvements will be completed no later than the 50th residential unit occupancy in Phase 4 or Phase 5, whichever comes first.

D. Buckley Bicycle Bridge (South Side): The addition of a bicycle bridge on north and south sides of Buckley Road crossing Tank Farm Creek are required per MM TRANS-11 and COA #109.

Original approvals required construction of both bridges prior to Phase 2. With the approval of Phase 2-3 Final Map, the timing of southern bridge was deferred to, prior to Phase 4 and concurrent with Buckley Road Widening.
 Per this MOA No. 2, Developer requests that the southern bridge will be constructed with Buckley Road Widening, prior to the issuance of occupancy permits for the 50th residential unit in Phase 4 or 5, whichever comes first.

E. Jespersen/Venture & Jespersen/Wright Brothers Roundabouts: The construction of roundabouts at Jespersen/Venture and Jespersen/Wright Brothers intersections required per COA #110 require the improvements to be installed prior to issuance of building permits in Phase 4.  Per this MOA No. 2, Developer requests that these improvements will be installed prior to issuance of building permits in Phase 4 or 5, whichever comes first.

F. 9.5 Acre Neighborhood Park: The construction of a 9.5-acre neighborhood park was proposed as part of Phase 4. The 9.5-acre park comprises half of the total parkland required for the Project. The Environmental Impact Report determined there would be less than significant impacts related to parks and recreation facilities because the Project would meet the required ratio of ten acres of park land per 1000 residents.
 Per this MOA No. 2, the 9.5-acre neighborhood park shall be completed prior to completion of the 550th unit of the Project.

G. Construction of R-4 Affordable Housing. City and Owner acknowledge Article 5 of the Phase 3 Affordable Housing Agreement and further acknowledge and agree that the terms of Article 5,

5 specifically Section 5.5, are not only applicable to the R-4 Property (Phase 3) identified in Exhibit “A” attached thereto, but to the entirety of the Avila Ranch project.

19. City agrees that advancing Phase 5 ahead of Phase 4 is beneficial to the Project and the health, safety and welfare of the City as it (a) advances the construction of Backbone Infrastructure which would otherwise be deferred; (b) does not create new or additional impacts not previously assessed or mitigated; (c) does not defer or otherwise delay the development of infrastructure necessary to mitigate impacts created by the Project; and (d) is consistent with the terms and conditions of the Avila Ranch Development Agreement.

20. Based on the foregoing, and consistent with the terms of the Development Agreement, the Parties agree that Developer may develop Phase 5 ahead of Phase 4.

21. This MOA No. 2, which shall be recorded upon final execution against the real property described in Exhibit “B” attached hereto, may be executed in two or more fully or partially executed counterparts, each of which will be deemed an original binding the signer thereof against the other signing parties, but all counterparts together will constitute one and the same instrument. This MOA No. 2 is binding on and inures to the benefit of the Parties and their respective legal representatives, successors, and assigns.

22. The intent of this MOA No. 2 and the recordation thereof is to make it a matter of public record, providing notice to others of its existence and contents of MOA No. 1, the Phase 3 Affordable Housing Agreement, Developers agreement regarding the timing of construction of certain improvements.

Nothing in this MOA No. 2 is intended to amend any previously agreed upon document between the City and Developer, including, but not limited to, the Development Agreement, MOA No. 1, or the Phase 3 Affordable Housing Agreement, each of which remains in full force and effect as originally written. In the event of a conflict between this MOA No. 2 and any previously agreed upon document between the City and Developer, the previously agreed upon document will prevail. [signatures commence on following page]

6 CITY OF SAN LUIS OBISPO,
a municipal corporation and charter city
By: ___________________________
Whitney McDonald, City Manager

TRUMARK CONSTRUCTION
SERVICES, INC., a California
corporation
By: ____________________________
Joshua E. Peterson,
Authorized Agent

MRP HTMB, LLC
a Delaware limited liability company
doing business in California as
Millrose California, LLC
By: __________________________
[Name] _______________________
Authorized Agent

7 EXHIBIT "A"
MOA NO. 1
The Original MOA No. 1 is maintained with the City Clerk

8 EXHIBIT “B”

LEGAL DESCRIPTION OF PROPERTY
The land referred to is situated in the County of San Luis Obispo, City of San Luis Obispo, State of California, and is described as follows:

Parcel 4 of Certificate of Compliance for Lot Line Adjustment No. COAL 01-0097 in the City of San Luis Obispo, County of San Luis Obispo, State of California recorded April 9, 2003 in Document No. 2003-035675 of Official Records in the Office of the County Recorder, County of San Luis Obispo, State of California.

Excepting that portion of Parcel 4 of Certificate of Compliance for Lot Line Adjustment No. COAL 01-0097 in the City of San Luis Obispo, County of San Luis Obispo, State of California, recorded April 9, 2003 in Document No. 2003-035675 of Official Records in the Office of the County Recorder, County of San Luis Obispo, State of California, lying Northerly and Westerly of the line described as follows:

Beginning at a point being North 10° 13’ 54” East, a distance of 154.30 feet from the Southerly terminus of the Line described as “S 10° 13’ 54” W, 296.48” feet of said Parcel 4; thence North 41° 07’ 43” East, a distance of 294.58 feet; thence, South 72° 09’ 02” East, a distance of 436.26 feet; thence North 58° 23’ 53” East, a distance of 65.56 feet; thence North 9° 51’ 38” East, a distance of 273.28 feet; thence North 42° 06’ 40” East, a distance of 401.67 feet; thence North 81° 05’ 41” East, a distance of 229.24 feet to the East line of Lot 27 of Harford & Chapman’s Subdivision in the City of San Luis Obispo, County of San Luis Obispo, State of California, filed in Book B of Maps at Page 30 in the Office of the County Recorder, County of San Luis Obispo, State of California.

Thence North along said East Line North 0° 15’ 35” East, a distance of 600.63 feet to the Northerly Line of said Parcel 4.

This legal description is made pursuant to that certain Certificate Approving a Lot Line Adjustment, designated as “Parcel B” in Certificate No. SLO AL 18-00013 (Fmap-1552-2018), recorded June 22, 2018 as Instrument No. 2018-25711 of Official Records.

APN: 053-259-008

Third Addendum to the Final Environmental Impact Report for the Avila Ranch Development Plan
June, 2025

1. Project Title:

Avila Ranch Development Plan

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:

Callie Taylor, Senior Planner
805-781-7016

4. Project Location:
175 Venture Drive
San Luis Obispo, CA 93401

5. Project Applicant and Representative Name and address:

Avila Ranch
Trumark Homes
Dan Garson, Director of Land Development
735 Tank Farm Rd Suite 100, San Luis Obispo, CA 93401

6. General Plan Designation:

Special Focus Area SP-4. Per Avila Ranch Development Plan: Low-Density Residential, Medium-Density Residential, Medium-High Density Residential, High-Density Residential, Neighborhood Commercial, Open Space, Park

7. Zoning:

Per Avila Ranch Development Plan: R-1 Low-Density Residential, R-2 Medium-Density Residential, R-3 Medium-High Density Residential, R-4 High-Density Residential, C-N Neighborhood Commercial, Conservation/Open Space C/OS, PF Public Facility, Airport Area Specific Plan

8. Description of the Project:

The Avila Ranch Development Plan was approved by the San Luis Obispo City Council on September 19, 2017. Project entitlements included certification of the Final EIR, approval of the Avila Ranch Development Plan, Airport Area Specific Plan Amendment, General Plan Amendment, Phased Vesting Tentative Tract Map, Zone Change, Development Agreement, and establishment of a Community Facilities District. The project includes 740 residential units, 15,000 square feet of neighborhood commercial, open space, and parks on a 150-acre area which is to be developed within six (6) phases of development with a phased final map.

9. Project Entitlements Requested:

Previously approved by the City Council on September 19, 2017. Project implementation, Final Map recordation, permits, and construction are in process.

10. Previous Environmental Review:

The Avila Ranch Development Plan (ARDP) and associated Final Environmental Impact Report (FEIR) were approved and certified by the City Council on September 19, 2017, pursuant to Resolution No. 10832 (2017 Series). The significance of each impact resulting from implementation of the Project was determined based on impact significance criteria and applicable CEQA Guidelines for each impact topic. The EIR found that the Project would result in significant and unavoidable construction-related and long-term impacts to air quality, construction-related noise, and long-term transportation and traffic impacts.

Mitigation measures were adopted to reduce the potential impacts where feasible, and the City Council adopted CEQA findings and a Statement of Overriding Conditions to address the identified significant and unavoidable impacts described in the Final EIR.

An Addendum to the Final EIR (“First Addendum”) was prepared in January 2024 to address a change in timing of the implementation of Mitigation Measure TRANS-11, which established an obligation for the project to install two separated bicycle bridges on each side of Buckley Road at Tank Farm Creek to improve access to safe bicycle routing along Buckley Road. The timing of the southern bicycle bridge was modified to coincide with the Buckley Road frontage improvements required with Phase 4 in order to minimize construction impacts on properties to the south where a construction easement and rightof-way acquisition is needed. The northern bicycle bridge remains a requirement with Phase 2. The City Council approved the FEIR First Addendum on January 23, 2024.

A Second Addendum to the Final EIR was prepared in February 2024 to document an affordable housing density bonus to increase the density of the R-4 project component from 125 to 145 units. The transportation analysis for the density bonus found that the addition of 20 affordable housing units would not result in new impacts to Vehicle Miles Traveled (VMT) and would not result in additional transportation impacts. The mitigation measures incorporated with the original 2017 FEIR and the 2024 FEIR First Addendum

are sufficient to mitigate the impacts of the project. The Planning Commission approved the FEIR Second Addendum on February 14, 2024.

Buildout of the project is currently underway. Phase 1 and 2 residential units are currently under construction. On- and off-site improvements have been constructed as part of Phase 1 and 2, including transportation improvements to mitigate for the increase in traffic generated by the Tract 3089 development.

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 ARDP Final EIR, additional information has been identified regarding the preferred timing for buildout of the six (6) phases of the Vesting Tentative Tract Map. The sequencing of the phased buildout evaluated in the ARDP Final EIR is now proposed to be modified with Phase 5 being constructed ahead of Phase 4.

In addition, Phase 6, which originally included the commercial and agricultural parcels, is proposed to be mapped in Phases 4 and 5, eliminating the need for a Phase 6. Modified phasing construction was contemplated by Article 6 of the Avila Ranch Development Agreement, which states that the phasing plan and phased installation of project infrastructure may be amended by an agreement between the Developer and the City to take advantage of new technologies, to respond to changes in the underlying land use assumptions upon which the plan is based, or for such other reasons as the parties may agree. A DA Memorandum of Agreement has been prepared, as required by Article 6 of the DA, to reflect the modified phasing plan and approve this change to the sequencing for project buildout. Once signed by both the City and the Developer, the DA Memorandum of Agreement, in conjunction with this EIR Addendum, would allow for the alternative project phasing as currently proposed.

The purpose of this Addendum is to document the revised phasing buildout, to clarify the timing of on- and off-site improvements that are tied to each phase, and to discuss the potential effects associated with this change. The analysis herein concludes that this phasing change would not result in any new or more severe significant environmental effects not previously analyzed in the Final EIR, nor any new or modified mitigation measures. The evaluation below discusses the issue areas that are relevant to this Addendum and covered by the previously approved Final EIR.

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.

NEW INFORMATION AND UPDATED PROJECT ELEMENTS

NEW INFORMATION NOT CONSIDERED IN THE FINAL EIR
The Avila Ranch Development Plan (ARDP) and the Phased Vesting Tentative Tract Map (Tract 3089), approved by the San Luis Obispo City Council on September 19, 2017, included a phasing plan which identified six (6) phases for development of the 150-acre plan area.

Avila Ranch Development Plan: Figure 9 Phasing Plan
As identified in the ARDP, the original project phasing was primarily determined by the required location of sewer and circulation facilities, existing road improvements, and site topography.

Phase descriptions are as follows:

Phase 1: 179 R-2 units (detached single family homes)
Phase 2: 29 R-2 units (detached single family homes)
Phase 3: 89 R-2 units (detached single family homes) and 145 R-4 units (for-rent apartments) Phase 4: 197 R-3 units (duplex units and townhomes)
Phase 5: 101 R-1 units (detached single family homes with ADUs) Phase 6: 15,000 sq. ft. of neighborhood commercial
The sequencing of the phased buildout evaluated in the ARDP Final EIR is now proposed to be modified with Phase 5 being constructed ahead of Phase 4. Phase 5 includes construction of 101 R-1 zoned single family units, which will now be constructed ahead of the 197 R-3 multifamily townhome units in Phase 4. In addition, Phase 6 has been merged into Phases 4 and 5, therefore no maps will be recorded with a Phase 6 designation. The two (2) commercial parcels in Phase 6 have been incorporated into Phase 5. The Phase 6 agricultural/open space parcels (totaling approximately 30 acres) have been incorporated into both Phases 4 and 5.

Modified phasing is allowed by the Avila Ranch Development Agreement, provided that both the Developer and the City agree in writing. The modified phasing buildout is the subject of this Addendum.

CHANGED BASELINE CONDITIONS AND UPDATED PROJECT ELEMENTS This Addendum considers the potential effects of constructing Phase 5, including 101 R-1 zoned single family units, ahead of the 197 R-3 zoned multifamily townhomes in Phase 4. The total number of units and areas of development remain consistent with previous project approvals and 2017 Final EIR, including the First and Second Addendum. Other project elements, including roadways, backbone infrastructure, utilities, and other public improvements identified in the ARDP will be constructed as previously required. The modified phasing order would not alter any portion of the ARDP that was intended to be left in open space or agriculture under the original 2017 approval.

MINOR TECHNICAL CHANGES TO THE FINAL EIR
The project phasing revisions noted above would result in minor changes to the approved project and Final EIR and are therefore evaluated in this Addendum in the analysis that follows.

Environmental Issues for Consideration
The proposed change to the project phasing does not anticipate any new development or ground disturbance in any area within the ARDP that was not already evaluated in the Final EIR. Total project buildout remains the same, with only the order of phases proposed for modification. For that reason, impacts associated with issues related to ground disturbance and/or total buildout will not change from what was described in the FEIR, including agricultural resources, air quality and greenhouse gas emissions, biological resources, cultural resources, hazards, hydrology/water quality, and noise. These issues will not be analyzed further in this Addendum.

Other impacts that are linked to the phasing plan and/or timing of improvements are discussed in the paragraphs that follow. These include the issues of population and housing, public services, transportation and traffic, and utilities.

Analysis
For all issues, there were no new significant impacts, no increase in the severity of a previously identified significant impact, nor any new mitigation measures required. Modifications and clarifications to the timing of some transportation mitigation measures have been incorporated in order to respond to the modified phasing buildout. The following analysis of each issue discusses this in more detail and provides support for this conclusion.

Population and Housing. The FEIR did not identify any significant impacts related to this issue.

Its conclusion that development will occur within the City’s adopted growth rate (Impact PH-1) is still true for the proposed project phasing modification, because development would still be subject to the City’s policies related to growth, and subject to market constraints, as it is part of a long-term phased buildout of the ARDP. As a project that provides housing, other impacts related to improving jobs-housing balance and the provision of affordable housing were found to be beneficial. Increased housing opportunities would reinforce these conclusions.