TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 53
Serving as general manager for Tri Delta Transit from 2018 to 2023, and before that, the general manager for First Transit from 2012 to 2018, Yevette has demonstrated a proven ability to improve service quality, safety performance, and operational efficiency while building strong, transparent partnerships. She has successfully managed multimodal operations, negotiated contract renewals, and led measurable safety improvements, including a 75 percent reduction in preventable accidents and a 95 percent reduction in work-related injuries.
Jeffery Lampton, Operations Manager
Jeffery Lampton is MV’s proposed operations manager for SLO Transit’s operations. He brings nearly five years of progressive transit leadership experience, with a strong focus on operational performance, safety, and regulatory compliance.
As the operations manager for SLO Transit, Jeffery will bring a collaborative leadership style, data-driven approach, and strong operational discipline.
Currently serving as special projects manager and interim general manager with MV, he provides senior-level oversight of fixed-route, paratransit, and shuttle services, supporting reliable service delivery while meeting client, contractual, and company performance expectations. His background combines field-based operational insight with executive-level decision-making, positioning him well to support SLO Transit’s daily operations.
From 2023 to 2025, Jeffrey served as operations manager with another contractor, where he achieved measurable results, including a 10 percent improvement in on-time performance within his first month and a significant reduction in customer complaints and excessively late trips.
Casterdale Green, Maintenance Manager
Casterdale Green is MV’s proposed maintenance manager for SLO Transit’s operations. He brings nearly two decades of experience in fleet transportation maintenance, with a strong track record of leading technicians, maintaining DOT-compliant fleets, and delivering cost-effective, reliable operations.
For SLO Transit, Casterdale will ensure its fleet is safe, reliable, and fully DOT compliant by leading preventative and corrective maintenance programs, managing technicians and inventory, and delivering maintenance operations that support uninterrupted service.
Currently serving as maintenance manager for Durham School Services, Casterdale is responsible for overseeing multiple maintenance locations across a major metropolitan area, managing manpower, controlling inventory, and ensuring fleet readiness in compliance with state, federal, and company requirements. His hands-on technical expertise, combined with disciplined cost control and accountability, has resulted in well-maintained fleets and highperforming teams known for stepping up during critical operational periods.
Throughout his career, Casterdale has held increasingly responsible leadership roles with FedEx Freight, Republic Services, Family Dollar Trucking, and JB Hunt, where he managed preventive and corrective maintenance programs, scheduled and planned repairs using industry standards, supervised teams of up to 20 technicians, and coordinated vendor and parts operations. His experience also includes establishing efficient invoicing processes and strengthening vendor relationships to reduce costs while improving service quality.
Aaron Pike, Safety and Training Manager
Aaron Pike is MV’s proposed safety and training manager for SLO Transit’s operations. Aaron brings over 30 years of experience in public transportation operations, safety, and compliance.
For SLO Transit, Aaron offers deep institutional knowledge of state and federal safety requirements and a proven ability to build effective training programs that support safe, reliable, and customer-focused transit service.
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 54
Currently serving as the operations manager for Classic Charter, Aaron oversees daily operations, including driver development, compliance with state and government agencies, and coordination across dispatch, maintenance, and administrative functions. His responsibilities include ensuring regulatory compliance, managing logistics and fleet utilization, and supporting operational efficiency through scheduling, warehousing, and shuttle bus fulfillment.
Previously, Aaron served as the operations/ safety manager for Laidlaw Transit Services, where he oversaw daily safety operations. He maintained company and state/federal compliance and led comprehensive operator training and development programs. His experience includes accident prevention, safety process implementation, customer complaint resolution, employee performance management, as well as mentoring high performers and supporting trainees.
Regional and Corporate Support
Lorraine Lopez, Regional Vice President of Operations
Lorraine Lopez is a transportation professional with more than 20 years of experience in the industry.
Since 2023, she has served as the regional vice president of operations at MV. Lorraine has a strong background in operations management, including 16 years of overseeing public transit contracts for private-sector contracting firms.
Lorraine supervises MV contracts in the Southern California region. She guides general managers in achieving continual operational improvement and ensuring client satisfaction. Her key areas of focus include prioritizing our corporate safety standards and exceeding client expectations for service delivery.
Terry Thompson, Vice President, Customer Success
Terry Thompson is a vice president of customer success for MV. Terry’s experience in management, operations, finance, safety, and customer care spans 20 years. He is well-equipped to support SLO Transit by leveraging his comprehensive skill set to address the unique challenges and opportunities within public transit systems. Terry engages extensively with MV’s Customer Success team and MV’s clients to cultivate opportunities for public transit that align with passenger demands, ensuring a seamless and efficient transit experience for all.
Jorge Flores, Director of Safety
Joining MV in 2025, as director of safety for the southwest region, Jorge has been instrumental in ensuring compliance with all regulatory requirements related to health, safety, and security. Jorge schedules and conducts safety audits and inspections, and provides safety-related support to our local team. His commitment to safety is evident through his regular on-site visits, where he attends monthly safety meetings, meets with local teams, inspects or audits safety programs, and collaborates with Safety and Training Manager Aaron Pike in the deployment of MV’s newest safety initiatives.
Sam Tolley, Director of Maintenance
With 14 years of experience in public transit fleet maintenance, Sam will support the City in achieving its maintenance and operational goals, ensuring a reliable, safe, and efficient transit system for San Luis Obispo. As the director of maintenance, Sam is entrusted with overseeing challenging and highprofile operations and tasked with ensuring the successful start-up of services. He will work with the local team to ensure maintenance operations remain efficient, innovative, and focused on delivering safety and reliability.
Jorge Parra, Director of Human Resources
Jorge has more than two decades of diverse experience in human resources and operations management, with exceptional leadership and expertise in aligning HR strategies with organizational goals. He encourages a cohesive work environment by providing and implementing labor strategies and regulations, and administering fair corrective procedures as required.
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 55
As an advisor to the local leadership team on the City’s behalf, Jorge’s operational background will provide a unique perspective on effectively managing collaboration between our human resources and local management teams.
Heidi Heath, Director of Labor Relations
With 30 years of hands-on experience in public transportation, Heidi Heath will serve as the City’s director of labor relations.
As the labor relations director for these operations, Heidi will counsel managers and MV leadership on union and labor matters. Her role is crucial in resolving grievances and advising on disciplinary protocols, ensuring operations run smoothly and fairly. The City can rely on Heidi’s extensive knowledge to proactively work with Teamsters Local 986 to establish positive relations.
Mike Krukat, Director of Finance
Mike Krutak is a seasoned financial executive with a background in leading finance and administration functions across various domains. He has over two decades of experience and expertise in financial planning, analysis, budgeting, and leadership.
For this contract, Mike will serve as MV’s transition lead in all areas of finance and accounting. He will work with the transition team to develop on-site procedures for this contract and coordinate centralized financial functions for the County’s operation. Mike will also work closely with the local team to provide actionable recommendations for operations improvement.
Elizabeth Chavez, Regional Account Manager
Elizabeth is an experienced transit finance professional with over a decade of experience in accounting and financial management for public transportation operations.
Currently serving as regional accounting manager with MV, she leads financial operations across multiple service regions, overseeing multimillion-dollar budgets, month-end close, reconciliations, and financial reporting while ensuring compliance with GAAP and internal controls. Her background includes managing budgeting and forecasting, client billing, payroll, DBE reporting, and audit readiness for multiple transit contracts.
Keith Everage, VP Business Development
Keith offers over 17 years of experience in the transportation industry. He promotes teamwork among his team and ensures MV’s dedication to serving passengers in the best way possible.
With his extensive experience and dedication to improving transit services, Keith is poised to support SLO Transit in achieving its operational and service goals, ensuring a positive and efficient experience for all passengers.
“All of the executives at MV are accessible. They are invested in your success. We have an army behind us.”
6.1.a. Organizational Chart
Our proposed operation for SLO Transit is organized around clearly defined roles that work together to deliver safe, reliable, and customer- focused service. Vehicle operators provide professional, ADA-compliant service and coordinate with dispatch using onboard technology, while dispatchers oversee daily operations, manage operator assignments, monitor service in real time, and coordinate with maintenance and road supervisors. Road supervisors provide field oversight, respond to incidents, conduct operator evaluations, and support service recovery, while fleet readiness is maintained by vehicle service workers and a tiered maintenance team. Customer service representatives MV EMPLOYEE PERSPECTIVE Corey Siu, Safety and Training Manager, PACE Chicago Division 135
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 56
manage passenger feedback, investigate complaints, and analyze data to support continuous service improvement, creating an integrated management approach focused on safety, accountability, and high-quality service delivery.
Job Descriptions
Operator
Vehicle operators serve as the primary link to passengers, representing the City with professionalism and a strong safety focus. Their main duty is to transport customers safely and on time while following regulations and policies.
Operators answer customer questions respectfully, provide route and stop information, and assist with boarding and mobility device securement when requested. They are trained in ADA compliance, passenger empathy, system routes, onboard technology, and dispatch communication. Operators work with dispatch on schedules, equipment issues, accidents, and other events.
Dispatcher
The dispatcher oversees all on-road operations from daily pullout to return, coordinating with operators to monitor status, resolve delays, and manage disruptions. Duties include operator check-in/out, report times, vehicle assignments, bulletin distribution, ensuring timely departures, and answering customer questions. Dispatchers are trained in reasonable suspicion and assess operator fitness for duty, assigning extraboard staff as needed. They coordinate with maintenance for vehicle exchanges, maintenance pulls, and handle inspection or defect forms. The dispatcher monitors routes for schedule adherence and service delivery using radio and GPS, collaborating with operators and supervisors to respond effectively to accidents and emergencies. They also manage complaint intakes, investigations, and the response process. They analyze customer feedback data to assess the system's performance and recommend corrective action to the management team.
Road Supervisor
The road supervisor oversees vehicle safety and service quality, evaluates operators for safe driving and customer care, and provides system information to passengers as needed. They respond promptly to incidents, conduct investigations, and determine the preventability of incidents. Based on field observations, they recommend coaching or retraining. The supervisor enforces City policies respectfully and is strategically positioned to ensure a quick response throughout the service area.
General Manager
1FT
Operations Manager
1FT
Road Supervisor
4FT
Vehicle Operator
24FT, 3PT
Dispatcher
3FT
Safety and Training
Manager
1FT
Maintenance
Manager
1FT
Technician
A-Level 1FT
B-Level 1FT
C-level 2FT
Utility Worker
1FT
Fueler
1FT
Accounting
Coordinator
1FT
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 57
Utility Worker
The utility worker ensures the City fleet is cleaned and fueled to the specifications outlined in the RFP. This position works primarily at night in an assembly-line fashion, preparing the fleet for the next day. The utility worker completes minor graffiti removal and maintains seat upholstery repair. They perform preliminary vehicle inspections, check various fluids, including the oil, water, and fuel levels, and inspect the hoses, belts, batteries, and equipment. “MV really invests in us. They pay for certifications. All you have to do is study for them and pass them. And I just passed my Brakes ASE, so I’ve got that on my resume.”
A-Level Technician
The A-level technician is the highest-level line technician. Under general supervision, the A-level technician performs the most challenging repair tasks and supervises subordinates. This person conducts all needed repairs and adjusts vehicle systems. The A-level technician is responsible for teaching, diagnosing, inspecting, and changing or repairing defective components and sub-components.
B-Level Technician
The B-level technician performs a variety of preventive maintenance and minor repairs. This position performs general maintenance, troubleshooting, diagnosis, and repairs to various vehicle systems. These systems include engine and emissions, drive trains, brakes, climate control, electrical and specialty electrical systems, electronic systems, accessibility equipment, transmissions, and steering and suspension. The B-level technician also completes work orders and preventive maintenance forms.
C-Level Technician
The C-level technician performs minor repairs under the direction of A-level or B-level technicians. Their duties include oil changes, tire changes, fluid replacement, minor body repair, and all other minor repairs as necessary.
Fueler
The fueler is responsible for ensuring all vehicles are completely fueled and ready for service at various times of day.
They track and monitor fuel intake and ensure fuel logs are maintained accurately and updated with the type of fuel.
They also ensure the fuel island is maintained and kept clean, and any spills are immediately contained and reported to the appropriate personnel.
6.2. Wages
MV will immediately recognize the Teamster Local 986 as the bargaining unit representing the SLO Transit operators, road supervisors, and dispatchers. MV collaborates with the union to negotiate the existing labor agreement, which remains through 2030. MV has an excellent relationship with the Teamsters and works with its local unions.
Please note that MV retains all rights to set the initial terms and conditions of employment, which may include the decision not to participate in existing health benefit plans or pension plans if we determine it is not economically feasible or otherwise in the best interest of MV. Additionally, MV is not encumbered by the current plan or any newly negotiated agreement that may contain economic terms or other items not considered in MV’s submitted pricing.
MV is pleased to offer the following compensation package to its team.
MV EMPLOYEE PERSPECTIVE Dezire Patterson, Electronics Technician , San Antonio Division 583
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 58
Operator Wage Scale
Non-Operator Wage Scale
6.3. Benefits Package
MV’s proposal considers all personal time off (PTO) (i.e., vacation, sick time, etc.) to be paid by the incumbent contractor at the termination of their contract. MV will not be responsible for this cost.
Benefits
All full-time employees (those with 35 or more scheduled hours per week) are eligible to participate in the following benefits programs.
Benefit Bargained Non-Bargained
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 59
Benefit Bargained Non-Bargained
6.4. Staffing Plan
MV is pleased to present the following staffing plan for SLO Transit.
Position No. of employees Position No. of employees
Full time Part time Full time Part time
General Manager 1 Vehicle Operator 24 3
Operations Manager 1 Utility Worker 1
Maintenance Manager 1 A-Level Technician 1
Safety And Training Manager 1 B-Level Technician 1
Accounting Coordinator 1 C-Level Technician 2
Dispatcher 3 Fueler 1
Road Supervisor 4
Application, Qualifications, and Hiring Process
MV Transportation, Inc. has an Equal Opportunity Employment (EEO) policy and will not discriminate against any employee or applicant because of age, race, religion, color, sex, disability, national origin, or any other characteristic protected by the law.
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 60
MV posts all career opportunities, from vehicle operators to management staff, on our website (careers.mvtransit.com), which is powered by CareerBuilder, LLC.
An applicant begins the employment process by completing an online application. Our team reviews the application to determine if the applicant meets the qualifications. Applicants meeting the minimum requirements attend an interview with the hiring lead, who assesses their customer service skills and fit for the job. Upon successful completion of their interview, the applicant’s qualifications process begins.
The hiring lead will contact the applicant and request that they review and sign the required release documents, including an application for employment, background check disclosure and authorization release, FTA or FMCSA DOT disclosure and authorization, and an I-9 Express Online I-9 verification.
MVR and Background Check Review
Once the applicant completes the necessary disclosures, our corporate qualifications department assesses the applicant. This team orders all motor vehicle records (MVRs) and background checks to determine if any of the following items are present:
Our team reviews criminal convictions and motor vehicle reports and assesses based on the Equal Employment Opportunity Commission (EEOC) guidelines, along with the following eligibility factors:
Our qualifications team initiates an individual assessment if these reports reveal adverse information. The applicant receives a pre-adverse letter and a copy of their background reports; the applicant can contest the report within seven business days.
If the applicant provides appropriate documentation clearing the issues cited, our qualifications team notifies the local hiring lead that the applicant is qualified. Otherwise, the qualifications department issues a disqualified notification to the hiring leader, who will, in turn, notify the applicant.
Pre-employment Testing
MV requires every covered employee who performs a safety-sensitive function as described in the FTA regulations Part 655 and the FMCSA regulations Part 382 to submit to a pre-employment drug and alcohol test. Additionally, applicants may be required to pass a DOT or non-DOT physical examination (depending on the position). Refusal to submit to these requirements serves as an automatic disqualification from employment.
The frequency, severity,
and nature of the
conviction
The age of the
applicant at the time of
the conviction
The elapsed time from
the date of the
conviction to the
present
The relationship
between the nature of
the offense and the
type of employment
Evidence of rehabilitation,
successful employment
history, and any
aggravating, mitigating or
extenuating
circumstances
Criminal Convictions
Five-year history
of Misdemeanor(s)
or Felony(ies)
Traffic Offenses
Serious traffic offenses in
the last three (3) years
Moving Violations
More than two (2) moving
violations in the last three
(3) years
MV Pattern
Pattern on the motor
vehicle report (MVR)
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 61
We manage all testing and physical appointments through eScreen, Inc. A medical review officer (MRO) reviews exams and test results to ensure compliance with DOT requirements. This review is based on the medical standards set forth by FMCSA (49 CRF 391.41) and medical guidelines.
One of SLO Transit’s goals is to build and sustain a strong local workforce, and MV is uniquely positioned to deliver through our comprehensive recruitment and retention plan. Our approach begins with an inclusive, transparent hiring process grounded in our Equal Opportunity Employment policy and supported by industry-leading recruiting technology.
“I’m very thankful for this job. It’s very motivating because I’m breaking stereotypes. Most women think they can’t be in a shop, but we can do the same thing that men can do- any day, every day. As a woman, it’s a healthy environment and a safe one because I always feel like I’m one of them. Very equal here. Everybody treats everybody the same way.” -Dezire Patterson, Electronics Technician, San Antonio division 583 We “never stop recruiting,” maintaining a consistent pipeline for local candidates through digital advertising, community partnerships, job fairs, and dedicated regional recruiters who work side-by-side with the local management team. By combining broad market visibility with hands-on engagement, we can ensure SLO Transit attracts qualified candidates who reflect and understand the community they serve.
What sets MV apart is our data-driven focus on long-term retention, not just filling positions. MV uses advanced assessment tools and predictive models to identify candidates who are not only qualified but most likely to succeed and stay. Personality assessments, AI-driven tenure prediction, and structured interviews help match candidates to the demands of the role, resulting in significantly reduced turnover.
Ongoing engagement analytics allow managers to proactively address turnover risks, while clear pathways for growth—from operator to trainer or supervisor—reinforce MV’s commitment to building lasting careers locally. This integrated strategy ensures SLO Transit has a stable, high-performing team invested in long-term success.
Recruitment at MV
Our recruiting process begins when we create and post a job opening on Appcast, a platform that leverages programmatic software to ensure broad visibility and attract qualified candidates. Appcast leverages data from our talent management platform, ICIMS, to determine the most advantageous advertising options and automatically places those ads.
MV uses Phenom People’s Contact Management System and Career site (MV Careers) to guide our recruiting process once the job has been posted. The system’s AI algorithms drive chatbots on our site, identifying and targeting potential candidates across multiple platforms to connect our team with top talent within the industry.
Phenom streamlines the applications and interview process, reducing barriers to entry and encouraging more candidates to apply.
Once the hiring manager receives applications, they are reviewed to identify individuals who meet the job's essential qualifications. For operator positions, personality assessments and AI-driven tenure prediction tools are used to evaluate the applicant’s long-term fit within the organization and the likelihood of retention.
Selected candidates are then interviewed, either by phone or in person, to assess their experience, communication skills, reliability, and cultural fit. Additional interviews with other key managers may follow, along with background checks, motor vehicle records (MVRs), drug testing, and verification of the candidate’s qualifications.
Once a candidate is selected, the onboarding process begins, including orientation and training to ensure they are fully prepared for their role within MV.
MV ADVANTAGE Building a Strong Local Team Through Proven Recruitment and Retention
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 62
Our Recruiting Strategy
MV’s national recruiting program has evolved over the past five years to adjust to the changing labor market since the COVID-19 pandemic. It has proven to be highly successful since that time. Our approach unites key actions designed to attract and retain top talent within the industry:
• Always Be Recruiting: MV is steadfast in our continued recruiting efforts. Our motto is “never stop recruiting” to ensure a steady flow of candidates in our recruitment pipeline at all times. • Digital Presence: MV has a robust digital recruiting strategy that leverages market-leading recruiting platforms, social media, and industry-focused recruiting sites to advertise and promote jobs at MV.
• Advertising Investment: We use paid advertising on social media and recruiting sites, as well as radio advertising within the communities we serve, to get the word out that MV is hiring. We leverage a tool called AppCast that consumes data from our Talent Management System, ICIMS, and makes intelligent choices about where to digitally recruit. • Competitive Wages MV establishes benchmarks when setting wage rates, based on an extensive wage analysis for similar jobs in the local area. For the City, we will recognize wages from the Collective Bargaining Agreement released in the City’s second addendum. • Regional Support: Every MV location has a regional recruiter who is assigned specifically to the local region to assist our general managers in their recruiting efforts. Regional recruiters are on site during the transition and visit the location throughout the term of the contract. They participate in job fairs, place all advertising, and continually coordinate with the local team to ensure we are always recruiting.
• Partnering the Community: MV’s on-the-ground recruiting plan factors into our strong local presence within the community. We collaborate with local agencies to support job placement and work with local non-profits that offer job preparation services. These non-profits also advertise and promote our job openings to their clients. We will attend local job fairs and work with career centers at local colleges, as we strive to recruit from the local communities we serve. • High Engagement with Applicants: MV’s regional recruiters and local team stay actively engaged with interested applicants throughout the recruiting and hiring process. By being available to answer questions, provide information about the job, and assist the applicant throughout the process, we ensure that our focus on employee engagement begins at the time of recruitment.
Assessing the Right Candidates
This past year, MV piloted and rolled out personality assessments by the software company TalentClick. This unique digital personality assessment tells us whether a candidate has the right temperament, behaviors, work style, and values for a fixed-route bus operator job. This easy online questionnaire asks the candidate questions designed to reveal key individual traits. Based on our pilot scoring, and as of April 2025, we have seen a 64% year-over-year improvement in operator turnover using this assessment.
This test is a highly tailored assessment designed to match the traits required for a vehicle operator role.
Each candidate’s assessment results are measured against pre-determined ranges, based on our top-performing fixed route operators. Using this assessment, we can identify candidates whose personalities and values align with MV’s safety, performance, and tenure expectations. The TalentClick system generates interview questions and offers coaching plans based on the applicant’s scoring.
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 63
We are confident that this will help us screen for immediate hires and address long-term turnover by selecting only those operators who meet all safety requirements and are more likely to stay.
Employee Retention Learning Model
Within our recruiting initiatives, we use data-driven solutions to ensure we not only attract the right talent but also keep them. We use generative learning to predict the likelihood that a candidate will stay using our Operator Prediction Model. This model ingests all data from the candidate’s application (work history, address, employment gaps, and wages) and generates an assessment score that predicts long-term employee retention, providing key information for hiring decisions.
Engagement Learning Model
MV’s HR team partnered with our Data Sciences team to develop a tool that identifies actual operators who are predicted to be at risk of turnover, providing key risk scores to our management team so that they can take immediate action using generative learning.
Our engagement tool examines factors that predict turnover, including an employee’s commute time, safety score, compensation, hours worked, periods when they’re not earning, and the frequency of absences. Our general managers have a division dashboard that shows their employees' turnover risk, ranked from most likely to leave to least.
Our managers review these dashboards daily and work closely with employees who are at high risk of leaving to identify areas for improvement in their work experience. This engagement model, along with our highly effective employee retention program, has an 85% success rate company-wide.
MV has achieved a dramatic reduction in turnover, setting a new standard for safety and reliability in the transit industry. In just one year, turnover dropped from nearly 60% in 2024 to 39.3% in 2025—a 34%+ improvement in turnover rate and well below national averages. Ninety-day turnover, a key success measure, fell from 23.6% in 2024 to 15.2% in 2025, reflecting better hiring and onboarding practices. And voluntary turnover decreased from 35.8% in 2024 to 24.9% in 2025, underscoring the power of MV’s engagement and retention strategies. This success is the result of a holistic, people-first strategy: advanced AI-powered hiring tools, proactive employee engagement, actionable feedback loops, competitive compensation, and robust safety recognition programs.
The impact goes beyond retention. By keeping experienced drivers behind the wheel, MV operates 9% safer than the transit industry average, as measured by Lytx collision data over 15 months. Fewer collisions mean safer roads and greater peace of mind for clients and communities. MV’s approach proves that investing in people delivers measurable results—driving down turnover, elevating safety, and redefining what’s possible in public transit.
Employee Retention
MV shares the City’s goal of retaining a high-quality workforce. We take a unique approach to mitigating turnover, with a few key actions.
First, we ensure our employee culture is second to none, and we work to create an enviable workplace for all.
Focused safety messaging, ongoing operator coaching, high engagement of our leadership team, and a series of employee-focused and safety events, hosted lunches, dynamic safety meetings, recognition programs, and contests all create an environment that our employees want to be a part of.
MV ADVANTAGE Leading the Way in Turnover Reduction and Safer Roads
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 64
Compensation is also critically important. We have performed an extensive wage analysis to understand where we needed to be in terms of operators and wages. This and our competitive benefits package make MV a great place to start a long-term career.
To that end, we make opportunities for growth and development available to our team, and we identify high-performing individuals locally who are ready to take the next step in their jobs. For example, experienced operators often choose to move on to road supervision, while others become certified as behind-the-wheel trainers. Ongoing mentorship and formalized training through MV’s multiple development programs make MV a desirable place with ample opportunities.
When people do leave, we have an extremely thorough exit interview process where we capture key data about why. We apply deep analytics to this, and our broader set of hiring data (turnover metrics, engagement survey results), and create proprietary dashboards with actionable data that reveal why and when people were leaving their jobs. Working as an early-warning system, this platform allows us to track the dynamic changes week over week as we put into place mitigation strategies.
Our corporate and regional HR teams also partner with our local general manager to create personalized action plans focused on employee retention – based on what the data is telling us. This plan includes weekly calls to discuss any shortages, providing new interview tools to help managers find the right candidate, and refocusing our local team on employee engagement. This CEO-driven initiative included intensive training and education for our local team. Our exit interview process collects detailed data on why employees leave. We analyze this alongside hiring, turnover, and engagement metrics,
producing dashboards that identify trends
and provide actionable insights for
retention. The platform monitors weekly
changes as we implement mitigation
strategies.
HR teams collaborate with local
managers to develop tailored plans aimed
at retention, guided by the data. Actions
include weekly calls to address shortages,
updated interview tools, and a renewed
focus on employee engagement through
leadership training and education.
Productive Union Relations
Ensuring a stable workforce relies heavily on maintaining a harmonious and productive relationship with union leadership. Although the local team takes the lead on decisions related to employee and union relations, they are supported by dedicated labor negotiators and professionals from MV’s regional and corporate support structures.
MV’s Director of Labor Relations, Heidi Heath, has successfully negotiated several collective bargaining agreements (CBAs) and will oversee negotiations for MV in San Luis Obispo, allowing the local team to concentrate on positive employee relations while sidestepping some of the more challenging discussions regarding unions.
Due to MV’s size and national presence, we have made significant investments in labor resources. MV works with more than 100 local unions across the country and employs a team of labor directors who ensure amicable relations.
We have negotiated numerous union contracts and are well-versed in all FTA and Section 13(c) regulations.
A TENURED TEAM
IS A SAFER TEAM
MV’s data-driven approach to a
solutions-based operation extends to
our retention efforts. We employ a
rigorous exit interview process, and
the feedback we receive from these
sessions is documented and
analyzed against turnover metrics
and engagement survey results.
Based on what we learn from this
process, we develop action plans
focused on retention – because a
tenured team is a safer team.
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 65
MV will recognize the wage rates identified in the Collective Bargaining Agreement released in the City’s Second Addendum. Recognition of these wage provisions supports continuity of employment, workforce stability, and employee retention during transition and ongoing operations. Other than wage recognition, MV has no other relevant provisions to list.
6.5. Labor Code Compliance
Retaining existing employees: MV Transportation declares that it will retain the prior contractor or subcontractor employees for not less than 90 days. MV shall retain employees employed by prior contractors or subcontractors, except for reasonable and substantiated cause. That cause is limited to the particular employee’s performance or conduct while working under the prior contract or the employee’s failure of any controlled substances and alcohol test, physical examination, criminal background check required by law as a condition of employment, or other standard hiring qualification lawfully required by MV.
MV Transportation declares that it will retain the employees of its SLO Transit location for not less than 90 days. MV will retain those employed under this contract as the current operator of these services, except for reasonable and substantiated cause. That cause is limited to the particular employee’s performance or conduct while working under the prior contract or the employee’s failure of any controlled substances and alcohol test, physical examination, criminal background check required by law as a condition of employment, or other standard hiring qualification lawfully required by MV.
KEY PERSONNEL RESUME (CONFIDENTIAL)
Public Transit. Reimagined. | 1
Yevette Mc Neese
General Manager
Yevette Mc Neese is MV’s proposed general manager for San Luis Obispo’s SLO Transit services.
EXPERIENCE
General Manager of Operations – Transdev (San Francisco, CA)
2023 to Present
» Manages location projects and oversees procurement of assets, ensuring compliance with local, state, and federal laws » Develops local SMS DOT plan and establishes safety and training goals for accident and injury prevention
» Analyzes data to comply with NTD reporting requirements » Responsible for daily operations, including administrative functions and information systems
General Manager – Transdev (Antioch, CA)
2018 to 2023
» Developed schedules to optimize staffing and ensure
schedules met contractual, union, and customer service
requirements
» Developed an action plan to improve operational safety and efficiency
» Ensured transparent communications with the City to satisfy all client, corporate, union, and contractual requirements
» Analyzed data using Trapeze, Trans Trac, Transitminer, and Connexionz software to comply with NTD reporting
General Manager – First Transit (Houston, TX)
2012 to 2018
» Reduced preventable accidents by 75% and work-related injuries by 95%
» Oversaw maintenance, facilities, grounds, and a fleet of 100 vehicles
» Responsible for daily operations, and fostered a culture of transparent communication with the client
General Manager – First Transit (Houston, TX)
2007 to 2012
Summary of Qualifications
→ Availability: 100%
dedicated to SLO Transit
→ 18 years of experience in
paratranist, fixed route, ondemand, microtranist,
shuttle, and MedVan
services
→ Proficient in Connexionz,
Trapeze, Transitminer, and
Trans Trac software
→ Improvements to client and
company transparent
communication
→ Reduced preventible
accidents by 75%
→ Reduced work-related
injuries by 95%
Professional Affiliations
• Received the Gold Lean Status
Award
• Received the Regional safety
Award for most-improved
location and superior
improvement in overall safety
KEY PERSONNEL RESUME (CONFIDENTIAL)
Public Transit. Reimagined. | 1
Jeffery Lampton
Operations Manager
Jeffery Lampton is MV’s proposed operations manager for San Luis Obispo’s SLO Transit services.
EXPERIENCE
Special Projects/Interim General Manager – MV
Transportation, Inc. (Corpus Christi, TX)
2025 to Present
» Ensures DOT/FTA/FMSCA compliance for all personnel
» Provides leadership for daily operation, safety, maintenance coordination, and administrative functions
» Serves as the primary point of contact for client interactions during interim assignments
» Leads special projects focused on recruiting/hiring, safety improvement, operational efficiency, compliance audits, and performance turnaround initiatives
» Leads decision-making related to service delivery, OTP, workforce deployment, and incident response
Operations Manager – Transdev (San Bernardino, CA)
2023 to 2025
» Directed daily transit operations and oversaw safety, service reliability, and regulatory compliance
» Managed drivers, frontline supervisors, and operational staff » Saw OTP improve by 10% and a 30% reduction in customer complaints
» Reduced late trips from 527 to under 100 within one month » Ensured staff had the tools necessary to fulfill contract compliance
Road Supervisor– MV Transportation, Inc. (Phoenix, AZ)
2021 to 2023
» Supervised 150 drivers to ensure safe, compliant, and reliable service delivery
» Conducted accident investigations, employee coaching, and corrective action
» Cross-trained in window and radio dispatching and reservations » Responsible for division recruitment and hiring
Summary of Qualifications
→ Availability: 100%
dedicated to SLO Transit
→ 4 years of experience in
paratranist, fixed route, and
microtranist services
→ Proficient in Trapeze,
SpareLabs, Swiftly, RideCo,
and Passio
→ Improvements to late trips
from 527 to under 100
→ Improved OTP by 10%
→ 30% reduction in
complaints
Education and Training
Kent State University (Kent,
Ohio)
» Bachelor of Arts in
Criminal Justice
General Manager
Development Academy
(Dallas, TX)
» Planned attendance
KEY PERSONNEL RESUME (CONFIDENTIAL)
Public Transit. Reimagined. | 1
Casterdale Green
Maintenance Manager
Casterdale Green is MV’s proposed maintenance manager for San Luis Obispo’s SLO Transit services.
EXPERIENCE
Maintenance Manager – Durham School Services (Arlington, TN)
2014 to Present
» Manages fleets to ensure DOT, company, and state
requirements
» Provides hands-on maintenance, technical repair, and training » Responsible for inventory and fleet management
» Coaches technicians, and provides retraining as needed » Oversees maintenance operations for multiple locations, ensuring accountability and adequate fleet management
Fleet Maintenance Manager – FedEx Freight (East Moline, IL) 2020 to 2021
» Used industry standards to meet business goals and objectives » Led a team including a maintenance supervisor, parts clerk, and 12 technicians
» Responsible for addressing preventative and major repairs Fleet Maintenance Supervisor – Republic Services (Bettendorf, IA)
2016 to 2020
» Oversaw maintenance coordination of equipment
» Responsible for addressing preventative and major repairs » Scheduled and planned vehicle maintenance using industry standards to meet business goals and objectives
Transportation Maintenance Supervisor – Family Dollar
Trucking (West Memphis, AR)
2014
Foreman/Supervisor – JB Hunt (Memphis, TN)
2012 to 2014
Lead Senior Tractor Mechanic – Schneider National (West Memphis, AR)
2007 to 2012
Summary of Qualifications
→ Availability: 100%
dedicated to SLO Transit
→ 18 years of experience in
vehicle maintenance
→ Effective leadership
managing a team of
professional and dedicated
technicians
Certifications and Licenses
» HVAC
» CDL B- commercial
driver license
» Air Brake Endorsement
» Passenger endorsement
» CPR certification
» ASE A8 engine
performance
certification
» ASE A7 heating and air
conditioning
certification
» ASE certification
» OSHA 30
» Non-CDL class C
» School bus
endorsement
» EPA 609 certification
» HVAC certification
» CDL
» DOT physical
certification
» CDL A
KEY PERSONNEL RESUME (CONFIDENTIAL)
Public Transit. Reimagined. | 1
Aaron Pike
Safety and Training Manager
Aaron Pike is MV’s proposed safety and training manager for San Luis Obispo’s SLO Transit services.
EXPERIENCE
Operations Manager – Classic Charter (Visalia, CA)
2005 to Present
» Manages over 50 drivers while ensuring smooth daily charter services
» Responsible for scheduling driver development and re-training as needed
» Communicates with different departments to ensure smooth operations
» Responds to customer complaints to ensure passenger
satisfaction and the quick resolution of any issues
» Retains a commercial license with SPAB certification and CHP to assist with driving routes as needed
» Creates itineraries for large bus moves and shuttle orders » Handles logistics for large bus moves and large bus shuttle orders
Operations/Safety Manager – Laidlaw Transit Service (Martinez, CA)
1995 to 2005
» Oversaw daily safety operations
» Maintained company, state, and federal compliance with safety regulations
» Responsible for training and developing new drivers to ensure they understand all aspects of their job and all safety requirements » Handled customer complaints to ensure timely resolution and maintain excellent customer satisfaction
» Handled any driver issues to ensure quick resolution and continued smooth, daily service
» Implemented new staff training processes and incentive programs
» Supported driver career advancement by coaching and
managing trainees
Summary of Qualifications
→ Availability: 100%
dedicated to SLO Transit
→ 30 years of experience in
paratranist, fixed-route, and
charter services
→ Comercial license with
SPAB certification with CHP
→ Implemented driver
incentive programs to
encourage strong safety
performance
Professional Affiliations
• Class B/ Air Brake, Customer
Relations
• D.M.V Training
• Driver Mentor training
• T.S.I and field experience
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 66
7. Reporting
Operational reporting provides service statistics necessary to gauge service quality, ensure contractual compliance, acquire transit funding, and complete all National Transit Database (NTD) reporting.
In response to RFP section G.7, MV meets FTA/NTD reporting requirements and provides these reports to clients who receive federal funding, who must submit them. MV uses the accepted FTA sampling methodology and has systems to collect and report this information pursuant to the National Transit Database Reporting Manual guidelines.
A large portion of the service data is collected and reported using Connexionz. In contrast, others are collected using MV’s Accounting and HR ERP and other third-party data collection systems.
As required, MV will track the following items to ensure it is meeting the standards outlined by the City and the Company:
• Service delivery and operations performance;
• Operational reports, such as passenger activity, revenue, and customer feedback; • Safety, incidents, and compliance;
• Fleet, vehicle status, and maintenance;
• Financial, administrative, and management reporting; and • Ridership trends by type and route.
It is also important to update the team on its performance; MV continuously updates and shares performance results during location safety meetings.
Please see the sample Connexionz reporting templates following this section.
Accounting and HR Software
MV uses Infor’s Financial and Human Capital Management systems at our corporate office and operating locations.
The Infor Human Capital Management system includes features such as benefits administration, payroll management, HR administration, leave of absence management, a built-in business process framework, and native business analytics tools and reports. Infor software is fully integrated and web-enabled.
MV began transitioning to Workday, a modern cloud-based ERP system, in June 2025, and this process will continue through 2026. Given the complexity of this enterprise transition, we are using a phased approach to mitigate risk and orchestrate change effectively. This transition streamlines operations for our customers, enhances workforce management, and improves decision-making.
Workday offers automation, integration, and user-friendly finance, while also enhancing HR tasks and overall business operations. By centralizing functions, automating workflows, and providing real-time insights, Workday increases efficiency in our daily operations and improves employee experiences, ultimately driving growth. The Workday platform is scalable, secure, and offers an intuitive design to provide agile business solutions.
The software’s scalability enables MV’s growth without capacity constraints. Additionally, its role-specific permissions and security features allow our management to selectively determine which processes and controls to centralize.
MV will maintain accounting records on an accrual basis following Generally Accepted Accounting Principles (GAAP).
MV believes in proper data backup and off-site storage of data backups in the case of a fire or other catastrophic event. MV’s IT team will set up the local computer network to ensure proper connectivity, security levels, password protection, and local technical support. MV will work with the City IT staff as needed.
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 67
7.1. Approach to Reporting Quality Control
MV supplies NTD data to its clients and assists in compiling these reports. While the Federal Transit Administration (FTA) prohibits private contractors from directly reporting data to the NTD Database on behalf of FTA-funded transit agencies, MV’s local operations teams assist in collecting and summarizing all required data.
MV follows the trip sampling methodology and forms, as outlined in the NTD Reporting Manual, including FTA Circular 2710-1A. Compliance with FTA uniform accounting standards and NTD reporting systems is key to MV’s U.S. federally funded operations.
MV will fully cooperate with the City to collect and report all FTA ridership, operating, safety, and financial information. The information collected and summarized for the City’s NTD reports will be maintained as required.
The general manager will be responsible for meeting the City's NTD sampling, collection, verification, and reporting requirements. This individual will be supported by the MV corporate staff described in section 6.1 Key Personnel and will avail herself of the City’s guidance, FTA seminars on NTD reporting, and other support available from the FTA website.
The safety training manager will collect sample trip data, with support from the operations managers and service supervisors. This information is compiled for the following NTD modules: basic, financial, and service. MV’s vehicle operators will be required to collect sample data only occasionally, and only on routes with the lowest ridership.
Dispatchers will distribute and collect required vehicle operator surveys; vehicle operators will complete and submit any required operator surveys. The maintenance manager will supply data for the Asset Module (fleet and facility data). Finally, the operations manager will assist the general manager with collecting required operational and ridership data.
Accident and Incident Procedures
Please see the sample accident/incident forms following this section.
Achieving an operation marked by world-class safety requires employees to prioritize safety as the most important aspect of their jobs and to consistently promote safe behavior. It is equally important to be prepared if the unexpected happens and an accident or incident occurs. MV operators are thoroughly trained in MV’s procedures to promptly and accurately report all accidents and incidents.
All incidents must be immediately reported from the scene. In the event of a severe incident, the safety and training manager will immediately contact Director of Safety Jorge Flores, who will then notify our Rapid Response Investigations Expert, AJ Holl, at (361) 960-5008.
All MV operators are trained in emergency response. In the event of an accident, they contact dispatch as soon as they can safely do so. Dispatch will then send a road supervisor to the scene, who is an expert in emergency response and accident investigation.
Our staff is required to adhere to the following crucial steps as part of MV’s accident response and investigation procedures:
Accident Investigation Steps
1 Emergency Response
For serious accidents, we involve law enforcement/emergency medical response to ensure injured parties are attended to, and we will obtain the contact details of the response team.
2 Identify Witnesses
Identify eyewitnesses, including passengers and other involved parties (other vehicle driver and/or passengers, pedestrians), and respectfully request their contact information.
3 Document Injuries Record any observed injuries. Note if there are no visible injuries.
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 68
4 Photograph Incident Scene
Capture long-view images of all vehicles involved, close-up shots of specific damage, license plates, and photograph the positions of vehicles at their final rest if possible.
5 Obtain Surveillance Footage
Attempt to locate traffic, surveillance, and doorbell cameras that may have captured the accident. If successful, note available details and try to obtain a video copy from the business owner/homeowner.
6 Drug & Alcohol Testing Ensure drug and alcohol testing of the operator following company protocols. 7 Seek Outside Counsel Engage outside investigations counsel for fatal or critical accidents via the safety director.
8 Complete Documentation Finalize all documentation with the operator, including operator interviews, preventability determination sheets, and obtain video of the event. 9 Upload & File Upload supporting accident documents to Azure and complete the accident folder using MV’s accident folder checklist.
Accident Checklist
YES NO Pending
{ } { } { }
{ } { } { }
{ } { } { }
{ } { } { }
{ } { } { }
{ } { } { }
{ } { } { }
{ } { } { }
{ } { } { }
{ } { } { }
24 Hour Hotline Called/Ref#_______________
Drug/Alcohol Form/Paperwork/BAT, COC/Copies
Police Report#__________________________
Police Report Due by_____________________
Courtesy Cards/Witness Cards
Pictures (scene Pictures not just damage)
Accident Form/Manual
Accident Form/E-Form
Operator Statement/Signed/Dated
Accident E-Form Signed/Dated
Body Damage Estimate Minor/Moderate/Major { } { } { }
Notify Jacob Ortiz (661) 513-8205 Date:________ Time:_______ Email Sent Y/N Ruben Mendoza (818) 749-9824 Date:________ Time:_______ Email Sent Y/N Lead Road Supervisor/ 2
nd Supervisor on Scene:______________________________
____________________________________________________________________ Claim Status Notes:
_____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ Incident
Web Page X
TRANSPORTATION, INC.
MV Transportation
Santa Clarita Division 150
28250 Constellation Rd. Valencia, CA 91355
FTA Post-Accident Drug and Alcohol Testing Decision Making Form The Federal Transit Administration (FTA) drug and alcohol testing regulation (49 CFR Part 655) requires that safety-sensitive employees involved in a public transportation vehicle accident (as defined at 655.4 & 655.44) submit to tests for alcohol misuse and prohibited drug use as soon as possible following the accident. Part 655 also requires the testing of any other safety-sensitive employee whose performance could have contributed to the accident, as determined by the employer at the scene using the best information available at the time of the decision.
Accident Information:
Date of Accident: Time of Accident: AM/PM
Employee Name: Employee ID/SSN:
Decision Questions:
• Was there a fatality?
YES (FTA drug and alcohol tests are REQUIRED) NO
• If there was NO fatality, answer the following questions:
1. Has any individual suffered a bodily injury and immediately received medical treatment away from the scene of the accident? YES NO
2. Was there any disabling damage to any vehicle involved in the accident, requiring the vehicle to be towed away from the scene? YES NO If you marked NO to questions 1 and 2 DO NOT CONDUCT A DOT TEST If you answered yes to any of these TWO questions, can you completely discount the performance of the operator of the public transportation vehicle as a contributing factor to the accident? NO (FTA drug and alcohol tests are REQUIRED)
YES, Explain:
(If you answered YES, FTA drug and alcohol tests are PROHIBITED) • Other than the operator, could the performance of any other safety-sensitive employee have contributed to the accident, using the best information available?
NO
YES, Explain:
(If YES, make arrangements to immediately post-accident test that employee) Did You Decide to Perform a Drug or Alcohol Test?
YES, under DOT (Complete page 2 of this form) NO (No further action required)
Time of Decision to Conduct a DOT/FTA Post-Accident Test: AM/PM Testing Information:
Collection Site Location: Time Arrived: AM/PM
1. Was the alcohol test performed within 2 hours of the time of the accident? YES
NO, Explain:
2. Was the alcohol test performed within 8 hours of the time of the accident? YES
NO, Explain:
If the alcohol test is not conducted within 8 hours cease all efforts to administer the test.
3. Was the drug test performed within 32 hours of the time of the accident? YES
NO, Explain:
If the drug test is not conducted within 32 hours cease all efforts to administer the test.
MV Transportation Policy: When conducting a post injury/post-accident test (If allowable within your state) under company policy and not DOT authority, you must explain to the employee that the drug and alcohol test are being done under MV transportation authority and must be done on NON-DOT drug and alcohol testing chain of custody forms.
I am conducting this test under MV Transportation Authority(NON-DOT) ___________ The above documentation was provided by:
Supervisor Name: Phone No: 661-295-6328_______________
Signature: Date:
After completing this form please fax to compliance dept. at 972-391-4727 ONLY if a test was conducted.
If no test was conducted do not fax.
Keep 1 copy in drug file and 1 copy in accident folder at all times
Slip/Fall Passenger California None NO N/A
MARK “X” WHERE DAMAGE OR CONTACT OCCURRED
TRANSIT OPERATION AND MAINTENANCE SERVICES| TRANSIT-01
Public Transit. Reimagined. | 69
Appendix
Please find the following documents in the appendix on the following pages:
» Items for Discussion
» Certificate of Insurance
» Staff Schedule
Exceptions
MV respectfully requests discussion of the following recommendations at the appropriate time during the procurement process.
RFP/Contract Section Stated Language Proposed Language Explanation Price Adjustment N/A Include provision that provides for price adjustments if Contractor’s costs increase or revenues decrease as a
result of (i) changes to the scope of work/service hours requested by the City, (ii) changes in laws, rules,
regulations, etc. applicable to the services to be provided by Contractor, and/or (iii) wage increases necessary for Contractor to be able to recruit and retain qualified
employees as a result of an increase in the minimum wage in the City or surrounding jurisdictions; and (iv) costs incurred in response to a federal, state, or local state of emergency (including the COVID-19 pandemic or similar
national emergency), including providing personal
protective equipment, supplies, staffing, and additional services (including additional health and safety services or requirements). If the parties are unable to agree on a rate adjustment, then either party may terminate the contract upon 120 days written notice to the other party.
Contractor needs price protection for
changes requested by the City or matters
that were not contemplated at the time of
Contractor’s proposal.
Vehicle Acceptance
Standards
N/A Include Contractor’s vehicle acceptance standards as the applicable standard against which all vehicles will be
inspected. Include Contractor’s vehicle acceptance
agreement as an exhibit to the Agreement.
Upon delivery of the vehicles to
Contractor, the vehicles must be in the
same condition as the condition that
Contractor is required to maintain.
Include that the City will be responsible for
the cost of major repairs needed during
the first 180 days after Contractor begins
service under the Agreement.
Facility Condition /
Environmental
N/A Include provision to make it clear that Contractor is not responsible for any facility repairs or environmental issues or releases of hazardous materials existing on or prior to the Contractor’s occupancy of the City’s facilities, or caused by any party other than Contractor.
Contractor should not be responsible for
existing issues or issues caused by other
parties.
Exceptions
RFP/Contract Section Stated Language Proposed Language Explanation Requirement to Meet
All Provisions.
By virtue of its proposal
submittal, the bidder
acknowledges agreement
with and acceptance of all
provisions of the RFP
specifications
Notwithstanding Contractor’s delivery of a proposal,
Contractor reserves the right to reject a contract award if Contractor and the City are unable to negotiate a
satisfactory resolution to Contractor’s submitted
exceptions.
Contractor’s proposal and acceptance of
an award are subject to and conditioned
upon the City’s acceptance of
Contractor’s exceptions.
Proterra Vehicle Parts N/A Include provision to allow contractor to reengage client if contractor experiences issues with Proterra replacement parts.
The industry has experienced a parts issue
with Proterra as it relates to availability
and timing.
Start Up Costs N/A Include provision to all contractor to remove start up costs from the total costs in Year 1.
Currently start-up is part of fixed costs in
Year 1.
Fleet Replacement
Schedule
N/A Include provision to allow contractor to reengage client if replacement fleet does not arrive according to schedule.
We followed the replacement schedule
presented in the RFP documents.
Price Pages N/A Please acknowledge that price pages have a double count for maintenance expenses.
Price pages C95 “Operating Maintenance
Expense” reflect the maintenance costs as
well as C97 under monthly fee (fixed
costs).
Termination Without
Cause
The City may at any time, for
any reason, with or without
cause, suspend or terminate
this Agreement, or any
portion hereof, by serving
upon the Contractor at least
thirty (30) days prior written
notice.
Revise to provide for at least 60 days’ notice of
termination and payment of Contractor’s reasonable
close-out costs.
Contractor will have contract termination
costs as well as employment termination
obligations required by law (WARN ACT,
etc.).
Labor Matters N/A Contractor shall have the ability to determine which employees it will hire and will have the right to set the terms and conditions of employment for its employees.
Contractor must have the ability to
negotiate the terms and conditions of
employment and shall not be bound by
the terms of any of the City’s 13(c)
Agreements or of any CBA between the
employees and the prior contractor.
Yes Update Cream colored boxes only
No If employee is off, type OFF in the start time Wednesday Drives the Functional Schedule 0:00
0:30
1:00
1:30
2:00
2:30
3:00
3:30
4:00
4:30
5:00
5:30
6:00
6:30
7:00
7:30
8:00
8:30
9:00
9:30
10:00
10:30
11:00
11:30
12:00
12:30
13:00
13:30
14:00
14:30
15:00
15:30
16:00
16:30
17:00
17:30
18:00
18:30
19:00
19:30
20:00
20:30
21:00
21:30
22:00
22:30
23:00
23:30
Start End
Shift 1 Length
(Hours)
Total Shift
Hours Start End
Shift 1 Length
(Hours)
Total Shift
Hours Start End
Shift 1 Length
(Hours) Total Shift Hours Start End
Shift 1 Length
(Hours)
Total Shift
Hours Start End
Shift 1 Length
(Hours)
Total Shift
Hours Start End
Shift 1 Length
(Hours)
Total Shift
Hours Start End
Shift 1 Length
(Hours)
Total Shift
Hours Weekly Total Hours Position #
General Manager OFF OFF 0.0 8:00 AM 5:00 PM 9.0 9.0 8:00 AM 5:00 PM 9.0 9.0 8:00 AM 5:00 PM 9.0 9.0 8:00 AM 5:00 PM 9.0 9.0 8:00 AM 5:00 PM 9.0 9.0 OFF OFF 0.0 45.00 1 General Manager 111111111111111111 Operations Manager OFF OFF 0.0 5:30 AM 2:30 PM 9.0 9.0 10:00 AM 7:00 PM 9.0 9.0 10:00 AM 7:00 PM 9.0 9.0 10:00 AM 7:00 PM 9.0 9.0 10:00 AM 7:00 PM 9.0 9.0 OFF OFF 0.0 45.00 1 Operations Manager 111111111111111111Safety and Training Manager OFF OFF 0.0 OFF OFF 0.0 5:30 AM 2:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 5:00 AM 2:00 PM 9.0 9.0 45.00 1 Safety and Training Manager 111111111111111111 Maintenence Manager 7:00 AM 4:00 PM 9.0 9.0 7:00 AM 4:00 PM 9.0 9.0 7:00 AM 4:00 PM 9.0 9.0 7:00 AM 4:00 PM 9.0 9.0 7:00 AM 4:00 PM 9.0 9.0 OFF OFF 0.0 OFF OFF 0.0 45.00 1 Maintenence Manager 111111111111111111 Accounting Coordinator OFF OFF 0.0 10:00 AM 7:00 PM 9.0 9.0 10:00 AM 7:00 PM 9.0 9.0 10:00 AM 7:00 PM 9.0 9.0 10:00 AM 7:00 PM 9.0 9.0 10:00 AM 7:00 PM 9.0 9.0 OFF OFF 0.0 45.00 1 Accounting Coordinator Dispatcher 1 7:30 AM 4:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 OFF OFF 0.0 OFF OFF 0.0 45.00 3 Dispatcher 1 333333333333333333Dispatcher 2 12:30 PM 9:30 PM 9.0 9.0 2:30 PM 11:30 PM 9.0 9.0 2:30 PM 11:30 PM 9.0 9.0 OFF OFF 0.0 OFF OFF 0.0 5:00 AM 2:00 PM 9.0 9.0 7:30 AM 4:30 PM 9.0 9.0 45.00 3 Dispatcher 2Dispatcher 3 OFF OFF 0.0 OFF OFF 0.0 11:30 AM 8:30 PM 9.0 9.0 2:30 PM 11:30 PM 9.0 9.0 2:30 PM 11:30 PM 9.0 9.0 2:30 PM 11:30 PM 9.0 9.0 12:30 PM 9:30 PM 9.0 9.0 45.00 3 Dispatcher 3 333333333333333333Road Supervisor 1 7:30 AM 4:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 OFF OFF 0.0 OFF OFF 0.0 45.00 4 Road Supervisor 1 444444444444444444Road Supervisor 2 12:30 PM 9:30 PM 9.0 9.0 1:30 PM 10:30 PM 9.0 9.0 1:30 PM 10:30 PM 9.0 9.0 OFF OFF 0.0 OFF OFF 0.0 5:30 AM 2:30 PM 9.0 9.0 7:30 AM 4:30 PM 9.0 9.0 45.00 4 Road Supervisor 2Road Supervisor 3 OFF OFF 0.0 2:30 PM 11:30 PM 9.0 9.0 2:30 PM 11:30 PM 9.0 9.0 1:30 PM 10:30 PM 9.0 9.0 1:30 PM 10:30 PM 9.0 9.0 1:30 PM 10:30 PM 9.0 9.0 OFF OFF 0.0 45.00 4 Road Supervisor 3 444444444444444444Road Supervisor 4 OFF OFF 0.0 OFF OFF 0.0 OFF OFF 0.0 2:30 PM 11:30 PM 9.0 9.0 2:30 PM 11:30 PM 9.0 9.0 2:30 PM 11:30 PM 9.0 9.0 12:30 PM 9:30 PM 9.0 9.0 36.00 4 Road Supervisor 4 444444444444444444 Mechanic 1 OFF OFF 0.0 5:30 AM 2:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 5:30 AM 2:30 PM 9.0 9.0 OFF OFF 0.0 45.00 6 Mechanic 1 666666666666666666 Mechanic 2 OFF OFF 0.0 2:00 PM 11:00 PM 9.0 9.0 2:00 PM 11:00 PM 9.0 9.0 2:00 PM 11:00 PM 9.0 9.0 2:00 PM 11:00 PM 9.0 9.0 2:00 PM 11:00 PM 9.0 9.0 OFF OFF 0.0 45.00 6 Mechanic 2 666666666666666666 Mechanic 3 7:00 AM 4:00 PM 9.0 9.0 8:00 AM 5:00 PM 9.0 9.0 8:00 AM 5:00 PM 9.0 9.0 8:00 AM 5:00 PM 9.0 9.0 OFF OFF 9.0 9.0 OFF OFF 0.0 7:00 AM 4:00 PM 9.0 9.0 54.00 6 Mechanic 3 666666666666666666 Mechanic 4 12:00 PM 9:00 PM 9.0 9.0 3:00 PM 12:00 AM 9.0 9.0 3:00 PM 12:00 AM 9.0 9.0 3:00 PM 12:00 AM 9.0 9.0 OFF OFF 9.0 9.0 OFF OFF 0.0 12:00 PM 9:00 PM 9.0 9.0 54.00 6 Mechanic 4 Utility Worker OFF OFF 0.0 9:00 AM 6:00 PM 9.0 9.0 6:00 AM 3:00 PM 9.0 9.0 6:00 AM 3:00 PM 9.0 9.0 6:00 AM 3:00 PM 9.0 9.0 6:00 AM 3:00 PM 9.0 9.0 OFF OFF 0.0 45.00 6 Utility Worker Fueler OFF OFF 0.0 4:00 PM 1:00 AM 9.0 9.0 4:00 PM 1:00 AM 9.0 9.0 4:00 PM 1:00 AM 9.0 9.0 4:00 PM 1:00 AM 9.0 9.0 4:00 PM 1:00 AM 9.0 9.0 OFF OFF 0.0 45.00 6 Fueler End of schedule End of schedule End of schedule End of schedule End of schedule End of schedule End of schedule Schedule Represents a Typical Wednesday
Position
Sunday Monday Tuesday Wednesday Thursday Friday Saturday No Split Shift No Split Shift No Split Shift No Split Shift No Split Shift No Split Shift No Split Shift
Sunday Monday Tuesday Wednesday Thursday Friday Saturday General Manager OFF 08:00 - 17:00 08:00 - 17:00 08:00 - 17:00 08:00 - 17:00 08:00 - 17:00 OFF Operations Manager OFF 05:30 - 14:30 10:00 - 19:00 10:00 - 19:00 10:00 - 19:00 10:00 - 19:00 OFFSafety and Training Manager OFF OFF 05:30 - 14:30 05:30 - 14:30 05:30 - 14:30 05:30 - 14:30 05:00 - 14:00Maintenence Manager 07:00 - 16:00 07:00 - 16:00 07:00 - 16:00 07:00 - 16:00 07:00 - 16:00 OFF OFF Accounting Coordinator OFF 10:00 - 19:00 10:00 - 19:00 10:00 - 19:00 10:00 - 19:00 10:00 - 19:00 OFF 0 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 Dispatcher 1 07:30 - 16:30 05:30 - 14:30 05:30 - 14:30 05:30 - 14:30 05:30 - 14:30 OFF OFFDispatcher 2 12:30 - 21:30 14:30 - 23:30 14:30 - 23:30 OFF OFF 05:00 - 14:00 07:30 - 16:30Dispatcher 3 OFF OFF 11:30 - 20:30 14:30 - 23:30 14:30 - 23:30 14:30 - 23:30 12:30 - 21:30 0 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 Road Supervisor 1 07:30 - 16:30 05:30 - 14:30 05:30 - 14:30 05:30 - 14:30 05:30 - 14:30 OFF OFFRoad Supervisor 2 12:30 - 21:30 13:30 - 22:30 13:30 - 22:30 OFF OFF 05:30 - 14:30 07:30 - 16:30Road Supervisor 3 OFF 14:30 - 23:30 14:30 - 23:30 13:30 - 22:30 13:30 - 22:30 13:30 - 22:30 OFFRoad Supervisor 4 OFF OFF OFF 14:30 - 23:30 14:30 - 23:30 14:30 - 23:30 12:30 - 21:30 0 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 Mechanic 1 OFF 05:30 - 14:30 05:30 - 14:30 05:30 - 14:30 05:30 - 14:30 05:30 - 14:30 OFFMechanic 2 OFF 14:00 - 23:00 14:00 - 23:00 14:00 - 23:00 14:00 - 23:00 14:00 - 23:00 OFFMechanic 3 07:00 - 16:00 08:00 - 17:00 08:00 - 17:00 08:00 - 17:00 OFF OFF 07:00 - 16:00Mechanic 4 12:00 - 21:00 15:00 - 00:00 15:00 - 00:00 15:00 - 00:00 OFF OFF 12:00 - 21:00Utility Worker OFF 09:00 - 18:00 06:00 - 15:00 06:00 - 15:00 06:00 - 15:00 06:00 - 15:00 OFFFueler OFF 16:00 - 01:00 16:00 - 01:00 16:00 - 01:00 16:00 - 01:00 16:00 - 01:00 OFF 0 End of
schedule -
00:00
End of schedule -
00:00
End of schedule -
00:00
End of schedule -
00:00
End of schedule -
00:00
End of schedule -
00:00
End of schedule -
00:00
0 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:000 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:000 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:000 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:000 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:000 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:000 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:000 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:000 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:000 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:000 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:000 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:000 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 00:00 - 00:00 Functional Schedule
Main Office: 1430 East Holt Avenue • Covina, CA 91724 • PHONE (626) 350-9860 • FAX (626) 448-0986 Regional Office: 300 Shadow Lane • Las Vegas, NV 89106 • PHONE (702) 385-0995 • FAX (702) 385-4410 Regional Office: 204 N. Broadway • Santa Maria, CA 93454 • PHONE (805) 922-7875 • FAX (805) 922-6885 www.local986.org
March 11, 2026
To Whom it May Concern:
My name is Cliff Reynolds, Business Coordinator at Teamsters Local Union No. 986. Our Local currently represents bus drivers, road supervisors, and dispatchers in Southern California.
The Teamsters and I have successfully worked with MV Transportation's labor and HR team on issues affecting our members within our jurisdiction. We value safety and service, and trust MV shares these priorities. Teamsters Local Union No. 986 fully supports MV Transportation in the San Luis Obispo Fixed Route Service procurement process should they be recommended by the City.
We look forward to working with the MV Team again.
Sincerely,
Cliff Reynolds
Business Coordinator
Teamsters Local Union No. 986
Cc: FILE
Item 7a
Department: Human Resources
Cost Center: 3001
For Agenda of: 3/17/2025
Placement: Public Hearing
Estimated Time: 15 Minutes
FROM: Nickole Domini, Human Resources Director
Prepared By: Jeff Andrews, Human Resources Manager
SUBJECT: OVERVIEW OF VACANCIES AND RECRUITMENT AND RETENTION EFFORTS FOR CALENDAR YEAR 2025
RECOMMENDATION
Conduct a public hearing regarding and receive and file the City of San Luis Obispo Workforce Vacancies, Recruitment, and Retention Trends presentation.
POLICY CONTEXT
Information in this report complies with Section 3502.3 of the Government Code (GC 3502.3) which became effective January 1, 2025, as set forth via Assembly Bill 2561. GC 3502.3 requires public agencies to present the status of their vacancies and recruitment and retention efforts during a public hearing before their governing board at least once per fiscal year prior to the adoption of a final budget for the fiscal year.
DISCUSSION
Background
Staff presented the status of vacancies and recruitment and retention efforts in March 2025 during the first year of GC 3502.3 requirements. At that time, the City Council adopted a Resolution to approve policies and procedures to comply with this law.
City of San Luis Obispo Bargaining Groups
There are six (6) bargaining groups (four represented and two unrepresented) at the City consisting of 4881 authorized regular full- and part-time positions (485.5 full-time equivalent2(FTE)).
1 This number does not include the Council – one (1) Mayor and four (4) City Council Member positions. 2 A position is a job role that exists whether filled or vacant; FTE measures hours worked rather than the number of employees, allowing part-time hours to be aggregated into the equivalent of full-time positions for budgeting, forecasting, and staffing purposes.
Item 7a
Table 1: Count of Regular Full- and Part-Time3 Positions by Bargaining Group as of December 31, 2025
City of San Luis Obispo Bargaining Group Position Count City Employees’ Association 218
International Association of Firefighters, Local 3523 53 Police Officers' Association 73
Police Staff Officers' Association 17
Unrepresented Confidential Group 13
Unrepresented Management Group 114
Vacancies, Recruitment, Retention
Vacancies
Position vacancies occur when newly budgeted positions are approved, when internal movement occurs such as a promotion or transfer, or when an employee leaves the organization. When vacancies occur, it is a high priority for the Human Resources Department and the City’s hiring managers to fill the positions to ensure continuity of services, maintain operational efficiency, minimize the need for overtime, and minimize disruptions to departmental functions. Timely recruitment and hiring efforts help the City sustain its workforce, meet community needs, and uphold service standards while also providing opportunities for internal growth and external talent acquisition.
Throughout the 2025 calendar year (CY), the City’s average vacancy rate across all bargaining units was 7.6%, compared to 6.6% in CY 2024. The vacancy rate is calculated monthly as the quantity of vacant positions divided by the quantity of positions. While the vacancy rate increased by one percent in CY 2025, this is likely due to the activation of the Fiscal Health Contingency Plan (FHCP) in April 2025, which also included a hiring chill and set the requirement for City Manager approval to fill vacant positions that were critically needed to support operations.
Table 2: Vacancy Rate by Bargaining Group
City of San Luis Obispo Bargaining Group CY 2024 CY 2025 City Employees’ Association 7.0% 9.6%
International Association of Firefighters, Local 3523 11.3% 9.4% Police Officers' Association 2.8% 2.7%
Police Staff Officers' Association 5.9% 0.0%
Unrepresented Confidential Group 7.7% 7.7%
Unrepresented Management Group 9.7% 7.0%
Recruitment and Retention Efforts
3 There are five (5) City positions budgeted at 50% part-time.
Item 7a
Pursuant to the Council adopted Compensation Philosophy, it is the policy of the City of San Luis Obispo to recruit and retain well-qualified employees who exemplify the City’s organizational values.
To assist with recruitment and retention efforts, the City Council adopted a Recruitment, Referral, and Retention Incentive Program (RRR Program) (Attachment A), which establishes guidelines and procedures for the eligibility, approval, and processing of recruitment, hiring, referral, and retention incentives for employees. Additionally, the City’s Employee Opportunity Program (EOP) was developed to enhance employment opportunities for current City employees who desire to transfer or promote to another position. Internal promotions are a key performance indicator for the Human Resources Department, with a goal of filling 40% of vacant positions via EOP. In CY 2025, 43% of vacant positions were filled via EOP, the same percentage as CY 2024.
The table below summarizes average monthly recruitment activity, median time-to-hire for regular part- and full-time vacancies, and total positions filled for the two most recent calendar years in which this data has been tracked.
Recruitment Metrics CY 2024 CY 2025
Average Monthly Active Recruitments 39 23
Median Time to Hire (Days) 71 58
Total Positions Filled 107 76
While the City maintains an overall low vacancy rate, hiring for certain regular positions, such as civil engineers, planners, utility billing, and firefighter paramedics, remains a challenge. The high cost-of-living in the San Luis Obispo area and the City’s geographical distance from a major metropolitan center limit the applicant pool. Additionally, some applicants have declined job offers because the salary for the position is not competitive or comparable with those offered by other organizations.
For CY 2025, the City’s retention rate was 91%, reflecting a strong ability to retain employees. The retention rate is calculated as the quantity of original employees remaining at the end of the year, divided by the quantity of employees at the beginning of the year. The average tenure for City employees is 7.7 years, demonstrating some stability within the workforce.
Filing vacancies and recruiting top talent are critical to delivering core services to the community and carrying out Council’s priorities but retaining that talent is equally essential for sustaining long-term success and minimizing future vacancies. While the City has a 91% retention rate, employees with less than five (5) years of tenure with the City are leaving more frequently. In CY 2025, 76% of all City resignations stemmed from employees with less than five (5) years of City service (up from 70% in 2024). Exit interviews from these employees and national trends indicate that employees are increasingly prioritizing flexibility, remote work, increased salary, and other evolving workplace values.
Item 7a
To support employee retention and reduce burnout, the City continues to prioritize physical and mental well-being through flexible work arrangements, including 9/80 schedules and hybrid-telework options for certain positions. Employee engagement is further sustained through a culture of recognition and transparent communication.
Beyond formal recognition committees and regular performance feedback from management, the City maintains open lines of communication through bimonthly City Manager briefings and anonymous Employee Engagement Surveys. The most recent survey, launched in January 2026, will help to provide critical data to ensure the City continues to invest in its workforce effectively, fostering trust and empowering employees to serve the community.
Previous Council or Advisory Body Action
City Council adopted a Resolution on March 4, 2025, to approve the policies and procedures to comply with GC 3502.3.
Public Engagement
All City bargaining units were notified that they are entitled to make a presentation at this hearing pursuant to GC 3502.3. In accordance with the noticing requirements for public hearings, a legal ad was published in The New Times 10 days prior to the public hearing.
The public will have an opportunity to provide public comment in writing prior to the meeting or as public comment during the meeting.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2025-26
Funding Identified: No
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund
State
Federal
Fees
Other:
Total $0 $0 $0 $0
Item 7a
There are no financial impacts directly associated with this item.
ALTERNATIVES
Council could direct staff to present the status of vacancies and recruitment and retention efforts during a public hearing more than once per fiscal year. The law only requires such reporting on an annual basis before a budget is adopted. Providing updates more frequently may not allow for collection of sufficient data to present accurate and appropriately representative reporting.
City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: April 21, 2026
TO: Mayor and Council
FROM: Aaron Floyd, Public Works and Utilities Director
Prepared By: Chris Lehman, Deputy Director - Wastewater VIA: Whitney McDonald, City Manager
SUBJECT: ITEM 7b - ORDINANCE AMENDING TITLE 13 OF THE MUNICIPAL CODE
REGARDING PRIVATE SEWER LATERAL INSPECTIONS,
REPLACEMENTS, AND DISSOLUTION OF THE MANDATORY
WASTEWATER FLOW OFFSET PROGRAM
Staff received the following questions regarding the proposed changes to the Sewer Lateral Inspection, Repair, and Replacement Program. The questions are below with staff’s response shown in italics:
1) There are concerns that only a limited number of companies perform sewer lateral replacements in the City. How will laterals be replaced in a timely manner?
From records obtained through sewer lateral rebate applications and outreach to local plumbing companies, the City is aware of nine local companies, and at least one from the Central Valley, that are able to complete sewer lateral replacements in the City of SLO. The City is unaware of any instance where a lateral could not be replaced within six months due to unavailable contractor labor. For property owners who may experience delays in replacement but have demonstrated good faith efforts towards this requirement, the Public Works & Utilities Director currently has the authority to authorize extensions.
2) Have staff considered only requiring replacement in capacity-constrained areas upon sale? If not, why not (if this is where most of the problems are)? Staff’s recommendation to require citywide repair or replacement of private sewer laterals determined to be in poor/failed condition through the Inspection Upon Sale program is consistent with all other events defined in SLO Municipal Code Section
13.08.395 (C), which does not differentiate between locations in the City. These existing events are:
a. Whenever the city has issued a notice of violation following a sanitary sewer overflow event from a property’s private sewer lateral.
Item 7b - Ordinance amending Title 13 of the Municipal Code Page 2 b. Upon submittal of a building permit for the addition of a bedroom, bathroom, or kitchen in a residential structure or the addition of nonresidential space or an additional plumbing fixture unit in nonresidential structures.
c. A change of the use of the structure from: (i) residential to nonresidential use; (ii) to a nonresidential use that will result in a higher flow than the previous nonresidential use; or (iii) to a nonresidential use where the structure served has been vacant or unoccupied for more than three years. d. Increase in size of the domestic water meter serving the property or adding a new domestic water meter.
e. Whenever property located in the city and containing one or more structures which are served by a private sewer lateral or laterals is subdivided. The inspection shall occur prior to recordation of the final map. f. Within thirty days of notification by the city that “smoke testing” or closedcircuit television (CCTV) sewer main inspection indicates the presence of inflow or infiltration from private property that impacts the operation of the public wastewater collection system.
Staff’s recommendation, as defined in the draft ordinance, is to include “Upon any change in ownership of real property within the city” (Inspection Upon Sale) as an event that could trigger repair or replacement of the sewer lateral (citywide). These poor/failed condition laterals result in high risk to property owners, the community, and the environment.
The current Private Sewer Lateral Inspection, Repair, and Replacement Program applies Citywide because: poor/failed condition laterals have the potential to result in sewage spills and associated public health and safety in both capacityconstrained and non-capacity constrained areas, and as evident in the 2025 Wastewater Flow Infrastructure Renewal Strategy, capacity-constrained areas have the potential to change over time as older private sewer laterals throughout the City continue to fail and contribute inflow and infiltration flows to the municipal sewer system.
In addition, staff is cognizant of housing needs located throughout the city, not just in the capacity-constrained areas. Implementation of the program as proposed (citywide) supports the goal of building and ensuring capacity in the wastewater collections system for future housing developments citywide. This approach is consistent with General Plan policies related to expansion of wastewater system capacity in support of projected flows and Major City Goals for Housing.
In the event the Council moves to limit the replacement requirement specific to the Inspection Upon Sale program to capacity-constrained areas only, staff proposes the following draft revised ordinance language for consideration and discussion:
Item 7b - Ordinance amending Title 13 of the Municipal Code Page 3 a. For events identified in subsections (C)(1)(a) through (C)(1)(g) of this section, repair or replacement shall be made pursuant to subsection G of this section.
b. For events identified in subsection (C)(1)(g), repair or replacement requirements pursuant to subsection G of this section shall not be effective until January 1, 2027 and shall be only applicable to wastewater collections system capacity-constrained areas as shown in the General Plan Water and Wastewater Element.
3) Why are common interest developments not proposed to be subject to this new requirement?
Staff’s recommended ordinance changes do not include modified requirements for properties that are currently exempt from inspection, such as common interest developments. The reason for this existing exemption involves the complexities of determining fiscal proportionality that may occur when multiple owners share a single asset in common.
4) What are the costs associated with required private sewer lateral inspections and replacements?
Staff’s research indicates that private sewer lateral inspections range from $250- $400, and private sewer lateral replacements can range from $8,000 to $30,000 or more, depending on the complexity of the location (e.g., length, depth, utility conflicts, etc.). Data from the private sewer lateral replacement rebate program indicates that, on average, replacing a private sewer lateral costs around $12,000.
Item 7b
Department: Utilities
Cost Center: 6102
For Agenda of: 4/21/2026
Placement: Business
Estimated Time: 45m
FROM: Aaron Floyd, Public Works & Utilities Director
Prepared By: Chris Lehman, Deputy Director - Wastewater SUBJECT: INTRODUCE AN ORDINANCE AMENDING TITLE 13 OF THE
MUNICIPAL CODE REGARDING PRIVATE SEWER LATERAL
INSPECTIONS, REPLACEMENTS, AND DISSOLUTION OF THE
MANDATORY WASTEWATER FLOW OFFSET PROGRAM (CODE-0169-
2026) AND APPROVE A RESOLUTION GRANTING DIRECTOR
DISCRETIO
RECOMMENDATION
1. Introduce a Draft Ordinance entitled “An Ordinance of the City Council of the City of San Luis Obispo, California, Amending Section 13.08.395 (Private Sewer Laterals/Systems) and Section 13.08.396 (Wastewater Flow Offset) of the City of San Luis Obispo Municipal Code.”
2. Adopt a Draft Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California, Authorizing the Discretion of the Public Works and Utilities Director to Waive Wastewater Flow Offset Program Requirements and Resolution and Determination of Satisfaction of Conditions of Approval Related to Wastewater Flow Offsets.”
3. Find the actions exempt from the California Environmental Quality Act (CEQA).
REPORT IN BRIEF
This report carries forward analysis and updated staff recommendations from the August 19, 2025, City Council Study Session discussion (Item 8a). That study session included an update on the City's Private Sewer Lateral and Wastewater Offset Programs and potential recommended changes. The Study Session Discussion Item #1, “Should the Wastewater Flow (Private Sewer Lateral) Offset Program Continue?,” has been carried forward to this public hearing with staff’s recommendation to 1) dissolve the currently mandated wastewater flow offset program and 2) modify existing citywide Sewer Lateral Program “Inspection Upon Sale” regulations to require replacement or repair of failed and poor-rated private sewer laterals within six months of time of sale of the property. As described in this report, staff’s recommendation represents a change from the existing approach and is result of many factors including: adoption and implementation of the 2025 Wastewater Collection System Infrastructure Renewal Strategy, advancements in wastewater flow data collection, modeling, and analysis, further evaluation of the effectiveness of the private sewer lateral and wastewater flow offset programs, potential
Item 7b
opportunities to address and remedy the sources of wet weather infiltration and inflow by focusing on the replacement of failed and poor private sewer laterals identified by the Inspection Upon Sale Program, and continued public outreach. Staff also continue to implement capital projects to improve capacity within the public sewer system and conduct outreach regarding available private sewer lateral rebate programs. As described further in this report, the proposed changes will provide a greater beneficial impact on municipal sewer system capacity and public health and safety than the current Programs, while reducing logistical and monetary burdens on the community and housing development, and City staff administrative workload.
POLICY CONTEXT
The primary goals of the Wastewater Flow Offset (Private Sewer Lateral) and Inspection Upon Sale Programs continue to be the reduction of inflow and infiltration from private sewer laterals and the associated potential for sewer spills and impacts to public health, safety, and general welfare, while accommodating housing development and furthering the Major City Goal of Housing and Neighborhood Livability‐Healthy, Safe, and Affordable.
California River Watch Settlement Agreement
On July 7, 2016, the City entered into a settlement agreement with California River Watch regarding alleged Clean Water Act violations. The settlement agreement included a “sunset” date of July 7, 2023, which meant, in part, that California River Watch agreed not to sue the City for the period between July 7, 2016, and July 7, 2023 (refer to further discussion in the Background section of this Council Agenda Report). The settlement agreement required the City to consider two Supplemental Environmental Programs intended to secure significant benefits to the local environment. The following programs are excerpted from that agreement:
Lateral Inspection and Repair Program: Within one (1) year from the Effective Date of this Agreement, the City staff shall recommend to the City Council an ordinance establishing program for the inspection, repair, and/or replacement of private Summary of Staff Recommendations:
1. Modification of the Citywide Sewer Lateral Inspection Program to include repair or replacement of poor or failed condition laterals as determined through the Inspection Upon Sale process.
2. Dissolution of mandatory Wastewater Flow (Private Sewer Lateral) Offset Program requirements.
3. Continued discretionary review and determination of conditional wastewater flow offsets for specified entitlements based on modeling and analysis.
4. Public Works and Utilities Director discretion to waive pending offset improvements for entitled projects and building permits in process.
Item 7b
sewer laterals. The program proposed will use the following events as a basis or trigger” for inspection, repair, and/or replacement:
1. Transfer of ownership of the property if no inspection or replacement of the sewer lateral occurred within twenty (20) years prior to the transfer;
2. If two (2) or more sanitary sewer overflows are caused by the same private sewer lateral within the immediate past two (2) years; or
3. Where the application for a building permit indicated the expected addition of flow through the private lateral (e.g. addition of bathrooms, bedrooms, addition living space).
Voluntary Private Lateral Replacement Rebate Program: The City staff shall recommend a Voluntary Private Lateral Replacement Rebate Program. For three (3) years from establishment, the Program will provide, on a first come, first served basis, one thousand ($ 1,000) dollars toward the total replacement costs of a residential private lateral, not to exceed a total of fifty thousand ($ 50,000) dollars annually.
The settlement agreement with California River Watch did not mandate that the City adopt either of these programs, but it did mandate that the City Council consider an ordinance to establish such programs. Council provided direction to staff at study sessions on October 4, 2016, and April 4, 2017. This lawsuit settlement has subsequently sunset (expired).
Current Policy Regarding Private Sewer Lateral Inspection Upon Sale Regulations.
The City Council received presentations and provided direction to staff regarding wastewater system capacity constraints at study sessions on October 4, 2016, and April 4, 2017. On May 16, 2017, Council considered and did not approve a proposed private sewer lateral ordinance that would have required mandatory repair or replacement of defective laterals prior to a change of ownership in real property. Following the 2017 study sessions, and after deliberation and further study, the City adopted Sewer Lateral Inspection and Offset Program requirements (August 20, 2019), and the Private Sewer Lateral Rebate program (August 20, 2019), which are currently in place today as part of the City’s Municipal Code.1, 2, 3 Minor amendments to the Code were subsequently adopted by the City Council on May 7, 2024. The current inspection upon sale requirements do not require the repair or replacement of defective laterals.
DISCUSSION
Background
Private sewer laterals are the portion of the sewer lines that connect from a residence or commercial structure up to and including the point of connection with the publicly owned sewer main. The City estimates that there are 13,421 private sewer laterals citywide,
1 Municipal Code Subsection 13.08.395(C)(1)(h) Inspection of Existing Private Sewer Laterals 2 Municipal Code Subsection 13.08.395(I) Rebate Programs 3 Municipal Code Section 13.08.396 Wastewater flow offset
Item 7b
including 3,052 within the updated capacity-constrained areas (Figure 1).4 An interactive map showing the boundaries of the capacity-constrained areas and the known and unknown condition of private sewer laterals within the City is available to the public at www.slocity.org/laterals. Notably, this is a significant reduction from the 7,000 private sewer laterals located in the prior capacity-constrained areas. Capacity-constrained areas are portions of the City’s municipal wastewater collection (sewer) system that lack or have limited capacity to serve existing and future development during wet weather conditions.
Figure 1: Sewer Capacity-Constrained Area Map
4 The City Council adopted a General Plan Amendment to the Water and Wastewater Element on December 2, 2025, which included an updated Wastewater Flow Capacity-Constrained Area Map.
Item 7b
Where private sewer laterals in poor or failed condition connect to the City sewer, groundwater flows into the sewer, and these areas of the collection system experience “surcharging,” a condition where the sewer pipe is so full that the wastewater flow starts backing up in the pipe and sometimes exits through toilets or access locations in the public streets. This is especially prevalent in capacity-constrained areas, which can lead to sewer spills.
Figure 2, below, represents the annual number of sewer spills since 2021, and shows that there has been a reduction in sewage spills originating from City infrastructure. The data also show that there are still spills originating from private infrastructure, indicating that a private sewer lateral replacement program is still important.
Figure 2: Sewer Spills as of March 2026 (Private Sewer Spill Reporting Requirements Began in 2021) Private Sewer Lateral and Wastewater Offset Programs
There are two Municipal Code Sections and associated Programs that are proposed for amendment. While the requirements, process, and regulations for implementation of these Programs are identified in different sections of the Municipal Code, they share a similar purpose: to reduce inflow and infiltration from private sewer laterals, reduce the potential for sewer spills and associated impacts to public health, safety, and general welfare, and improve and maintain capacity with the municipal sewer system while accommodating development. A general and simplified summary of these programs and associated Code sections is provided in Table 1, below.
Item 7b
Table 1. Current Program, Municipal Code Section, and General Applicability Program Municipal Code
Section
Where
Required
General Summary
Sewer Lateral
Inspection, Repair,
and Replacement
Program
13.08.395
Private Sewer
Laterals/Systems
Citywide As further specified in the Code,
and applicable Citywide, requires
a property owner to submit an
inspection video of their private
sewer lateral for review by the City.
The existing Code identifies the
actions triggering an inspection,
including but not limited to a
property sale within the City.
An inspection is not required if:
a. The private sewer lateral has
been replaced within the past
20 years.
b. An inspection has been
submitted to the City within the
past 5 years.
c. The private sewer lateral is
located in a common interest
development and is privately
maintained.
As further specified in the Code, if
the sewer lateral is in poor or failed
condition, the lateral must be
repaired or replaced under all
circumstances triggering an
inspection except a property sale.
Wastewater Flow
Offset Program
13.08.396
Wastewater Flow
Offset
Within
Wastewater
Collection
System
CapacityConstrained
Areas
As further specified in the Code,
currently requires property owner
or developer proposing new
development or intensification of
the existing use or development
within capacity-constrained
areas to offset the project’s
wastewater flow by replacing a
poor or failed-condition sewer
lateral(s) or completing an in-lieu
capital improvement within the
capacity-constrained area. Current
regulations mandate an offset
requirement for new development
and intensification of an existing
use.
Item 7b
Inspection of and Replacement of Existing Private Sewer Laterals The City Council adopted a Municipal Code amendment on August 20, 2019, that requires, with some exceptions5, the inspection of private sewer laterals connected to the City’s sewer system, at the property owner’s sole expense, when certain events occur, such as sewer spills, transfer of property ownership, and certain building permit conditions6(refer to Table 1 on the following page). Following an inspection required by the transfer of property ownership, the inspection results must be provided to the City and disclosed to the purchaser of the property, but repair/replacement of poor or failed laterals is currently not triggered by sale alone.
These inspections have produced a dataset critical to
the success of the overarching private sewer lateral
programs, which aim to correct private infrastructure
deficiencies with a data-driven approach that is
focused on the highest areas of risk. From 2019 to
present, there have been 1,146 inspections
completed through the Inspection Upon Sale
Program. As outlined in Table 1 above, given that
laterals newer than 20 years are not subject to
mandatory inspection requirements, this dataset is
focused on the oldest lateral inventory in the
community. Of those 1,146 laterals inspected through
the program, 341 (30%) were determined to be in
poor or failed condition but were not required to be
repaired or replaced because the current Municipal
Code regulations do not require replacement of a
poor or failed condition lateral based on property sale alone.
The current repair or replacement regulations, which are not presently applied to the Inspection Upon Sale Program, require repair or replacement of private sewer laterals, that do not comply with the condition requirements identified in the Municipal Code7(refer to Table 2, below). As described in the existing regulations, conditions warranting full replacement rather than a point repair include a private sewage spill, findings of infiltration and intrusion, or a lateral with defects having not met the required pipe material requirements as identified in the City’s Standard Specifications and Engineering Standards. The current regulations require the improvements to be implemented within 180 days.
5 Municipal Code Subsection 13.08.395(C)(2) Exceptions for inspection requirements of existing private sewer laterals.
6 Municipal Code Subsection 13.08.395(C)(1) Inspection of Private Sewer Laterals. 7 Municipal Code Subsection 13.08.395(B) Ownership, Maintenance, and Repair Figure 3: Private Sewer Lateral Root Intrusion
Item 7b
Table 2. Current Sewer Lateral Inspection, Repair, and Replacement Program Citywide
Program and
Code Section
When an
Inspection is
Required
Events
Triggering
Repair or
Replacement
Requirement
Conditions
Warranting
Repair or
Replacement
Conditions
Warranting Full
Replacement
Sewer Lateral
Inspection,
Repair, and
Replacement
Program
13.08.395
Private Sewer
Laterals/Systems
a. Issuance of
a Notice of
Violation
due to a
private
sewage spill
b. Building
permit
c. Change of
use
d. New water
meter or
increase in
the size of
the existing
water meter
e. Subdivision
of the
property
f. Evident
inflow and
infiltration
affecting the
sewer
system
g. Property
sale
Inspection
shows poor or
failed condition
lateral and the
following:
a. Issuance of a
Notice of
Violation due
to a private
sewage spill
b. Building
permit
c. Change of
use
d. New water
meter or
increase in
the size of
the existing
water meter
e. Subdivision
of the
property
f. Evident
inflow and
infiltration
affecting the
sewer
system
Based on the
inspection,
repair or
replacement is
required if the
private sewer
lateral is not in
compliance
with the
following:
a. Private sewer
laterals shall
be free of
displaced
joints, breaks,
offsets,
structural
defects,
damage,
open joints,
missing
portions of
pipe, root
intrusion,
cracks, leaks,
sediment
deposits,
bellies in the
pipe or any
other similar
conditions,
defects or
obstructions
likely to cause
or contribute
to blockage of
the private
sewer lateral
or the public
sewer.
a. Sanitary
sewer
overflow
b. Findings of
infiltration
and intrusion
c. Defects that
do not meet
the required
pipe material
requirements
as defined in
the City’s
Standard
Specifications
and
Engineering
Standards.
Item 7b
Citywide
Program and
Code Section
When an
Inspection is
Required
Events
Triggering
Repair or
Replacement
Requirement
Conditions
Warranting
Repair or
Replacement
Conditions
Warranting Full
Replacement
b. Private sewer
laterals shall
be equipped
with
cleanouts.
c. Private sewer
laterals shall
not be
constructed,
either in
whole or in
part, of
“Orangeburg
pipe.”
d. It is unlawful
to connect a
private sewer
lateral to
storm drains,
roof drains,
yard drains,
surface or
subsurface
drainage,
groundwater,
or other nonsewage pipes
or drains.
Item 7b
Proposed Amendment to the Municipal Code Inspection Upon Sale Requirements Staff recommend a Municipal Code amendment that would require repair or replacement of poor or failed condition laterals as determined through the Inspection Upon Sale Program (refer to Table 3 below). This amendment will result in a greater number of lateral replacements compared to the current Program and is anticipated to result in a reduction of inflow and infiltration affecting the Citywide municipal sewer system, a reduction of sewer spills Citywide, an increase in Citywide sewer system capacity during wet weather, and a reduction in the capacity-constrained area boundaries.
The recommended effective date for this requirement is January 1, 2027, to allow for additional outreach and education to key stakeholders and the broader community. Staff are not proposing retroactive replacement requirements for laterals that have already been inspected and condition-rated through this program.8 Table 3. Existing and Proposed Triggers for Sewer Lateral Inspections and Repair/Replacement
Trigger Current Ordinance (Citywide) Proposed Ordinance (Citywide) Inspection
Required
Replace/Repair
(failed/poor
condition)
Inspection
Required
Replace/Repair
(failed/poor
condition)
Property Sale X X X
Sewer Spill (Notice
of Violation)
X X X X
Building Permit
(specified scope)
X X X X
Change of Use
(specified scope)
X X X X
New Water Meter
or Increase in the
Water Meter Size
X X X X
Subdivision X X X X
Evident
inflow/infiltration
X X X X
8 From 2019-present, 341 laterals have been conditioned as poor or failed and have not been replaced.
Item 7b
Replacement requirements, administered through a staff-issued Notice to Correct, would allow 180 days for replacement (from the time of notification from the City), which is consistent with existing requirements. The replacement duration may be extended at the discretion of the Public Works and Utilities Director, given that good faith efforts have been made to complete the work and there are extenuating circumstances that result in replacement not being feasible by the assigned deadline (see Figure 4).
Existing rebates would remain available to help offset the cost of the work for community members, including the following:
Private Sewer Lateral Inspection Rebate (up to $350):
o Applies to all property types within capacity-constrained areas o Inspection completed on or after December 2, 2025
Private Sewer Lateral Replacement Rebate (up to $4,000):
o Citywide: single-family residences
o Capacity-constrained area only: multi-family and commercial properties o Full replacements, only, completed on or after December 2, 2025 Staff continue to monitor and evaluate these existing rebate programs to ensure availability of sufficient funding. In the event application and funding trends demonstrate that the rebate programs could be expanded, staff may return to City Council for Rebate Program modifications. Staff continue to provide additional outreach to the community regarding these rebate opportunities.
Figure 4: Inspection Upon Sale Workflow
Private sewer laterals not replaced within 180 days (or within the timeframe authorized by a Director extension) will result in an Administrative Citation and Notice of Violation, 9
9 Municipal Code Section 13.08.470 Authority of director, Notice of Violation.
Item 7b
and the City may withhold a building permit for repair, construction, or alternation associated with the property or require a financial surety. 10 It is important to note that the prior staff recommendations brought forward to Council between 2017 and 2019 would have required that this work be completed prior to close of escrow. This previously recommended requirement was determined through outreach with realtors to be infeasible given the condensed timeframe associated with many real estate transactions. Ultimately, Council at that time elected to proceed with the current Wastewater Flow (Sewer Lateral) Offset and Inspection Programs to achieve desired community outcomes rather than imposing a replacement upon sale requirement.
Staff’s current proposed recommendation addresses concerns expressed in 2017-2019 regarding the timing of any necessary replacements by allowing the lateral replacement to occur after the close of escrow, with opportunities for a discretionary extension.
Additionally, delaying the implementation date for the proposed changes to January 1, 2027, and continuing educational support and outreach by staff will help to minimize impacts to the property sale process.
Wastewater Flow Offset Program
The existing Wastewater Flow Offset Program requires proposed intensified or new development projects located in capacity-constrained areas to “offset” the additional new flow in these areas by repairing existing failing private infrastructure before the new infrastructure is occupied. Municipal Code Section 13.08.396(A) states that:
“The city experiences surcharging in the wastewater collection system and sanitary sewer overflows during wet weather events due to inflow and infiltration. The purpose of these regulations is to establish a methodology whereby new or intensified development in capacity constrained areas as established by the city council could offset new wastewater flow to mitigate capacity constraints in the existing wastewater collection system to accommodate the project’s additional demand.”
From 2019 to present, 114 private sewer laterals have been replaced as a requirement of the current Wastewater Flow Offset Program.
Proposed Amendment to the Municipal Code Wastewater Flow Offset Requirements Following the August 19, 2025 City Council Study Session and adoption and implementation of the 2025 Wastewater Collection System Infrastructure Renewal Strategy, staff have conducted additional evaluations of the Wastewater Flow Offset Program. Based on the improved City wastewater flow model, advancements in wastewater flow data collection and analysis, and the proposed Municipal Code amendment summarized above related to the Inspection Upon Sale Program, staff’s
10 Municipal Code Section 1.24.200 Prohibition against issuance of permits.
Item 7b
recommendation is to dissolve the existing mandatory wastewater flow offset requirements provided in Section 13.08.396 (Attachment A, Draft Ordinance).
Improvements in capacity-constrained areas will continue as a result of both City and private sewer improvements through 1) the City’s capital improvement plan, 2) voluntary replacement of private sewer laterals, encouraged through rebates and education, 3) mandatory replacement of private sewer laterals following sewer spills, 4) mandatory replacement of private poor/failed sewer laterals conditioned through tenant improvements or intensification projects, 5) if Council approves staff’s current recommendation, mandatory replacement of private sewer laterals conditioned as poor/failed through the Inspection Upon Sale process, and 6) conditioned offsets based on discretionary review of entitlements and wastewater flow modeling for the protection of public health and safety.
Upon Council authorization, the Public Works and Utilities Director would be allowed discretion to waive pending offset improvements for existing entitled projects, building permits under review, and issued building permits if the offset is required by the current version of Municipal Code 13.08.396 only and not required for the protection of public health and safety (Attachment B, Draft Resolution). This requirement would be waived for: actions subject to ministerial permits only (e.g., accessory dwelling unit, single-family residence, remodel of existing structure), Minor Development entitlements, and Moderate and Major Development entitlements where the Wastewater Collections Infrastructure Renewal Strategy and associated wastewater flow model demonstrate that there would be no adverse effect on public health and safety. Prior offsets (already completed) would qualify for rebate awards under the currently adopted rebate program conditions and requirements.
Anticipated Beneficial Effects within Capacity-Constrained Areas and Citywide From 2019 to present, 114 private sewer laterals have been replaced as a requirement of the current Wastewater Flow Offset Program. This is significantly less than the 341 private sewer laterals that were conditioned as poor/failed (but not replaced) through the Inspection Upon Sale Program during the same time period. During that same time period, 518 private sewer lateral rebates have been issued, primarily associated with voluntary replacement (Figure 5).
Item 7b
Figure 5: Private Sewer Lateral Replacement Strategy Comparison Since 2019, 1,146 property sales required a private sewer lateral inspection, and 30% of these laterals were determined to be in poor or failed condition. Looking at this data, it is anticipated that this trend will continue, and staff anticipates the proposed combined changes to the Municipal Code and Sewer Lateral Inspection and Wastewater Flow Offset Programs, and continuance of the existing rebate programs, will result in a greater number of lateral replacements, a reduction of inflow and infiltration, and a reduction of sewer spills. Replacement of these laterals will ultimately contribute to the reduction of capacity-constrained areas of the sewer system.
These changes would result in other benefits related to City resources and challenges experienced by the community. Implementation of the Wastewater Flow Offset Program requires a significant amount of staff resources to administer compared to the gain of the 114 lateral replacements since 2019. In addition, based on continued outreach and community feedback, staff are aware of the burden on the community, property owners, and developers to locate a poor or failed condition lateral and conduct private negotiations with another property owner to satisfy the offset requirement. The Offset Program has been particularly challenging for property owners who are developing a detached Accessory Dwelling Unit or expanding an existing single-family residence to increase housing availability within the City.
From 2019 to 2025, the Wastewater Flow Offset Program, implementation of development agreements and conditioned improvements, and citywide initiatives aimed
Item 7b
to reduce inflow and infiltration contributed to the reduction of capacity-constrained areas from approximately 2,100 acres to 1,100 acres, which is reflected in the revised map adopted on December 2, 2025. The updated 2025 capacity-constrained area map will continue to inform development projects in areas that have limited wastewater capacity, allow for analysis of a development’s impact, and require mitigation of impacts through the discretionary and environmental review of an entitlement application. The proposed amendments to the Wastewater Offset and Private Sewer Lateral Programs will continue the pace of or accelerate the replacement of private sewer laterals and will provide additional condition assessments for the 33% of the privately owned laterals in capacity constrained areas that are currently unknown; see Figure 6.
Figure 6: Current Private Sewer Lateral Conditions in Capacity-Constrained Areas
Item 7b
Continued Discretionary Review of Development and Use Entitlements Staff will continue to conduct review of discretionary development projects, subdivisions, and use permits to determine the project’s impact to the City’s sewer system. In addition to a project’s compliance with the City’s Engineering Standards, flow offset requirements and on and offsite sewer improvements for discretionary projects and associated entitlements would be determined by an engineer’s utility design narrative, assessment of existing affected infrastructure, and wastewater flow modeling and impact analysis conducted during the discretionary review process for specified entitlements. If these reviews indicate that a project would negatively impact the City’s wastewater infrastructure, private sewer lateral offsets and other improvements to the wastewater system may be required as a means to mitigate those negative impacts.
The resulting offset requirement and/or infrastructure improvement would be adopted via conditions of approval and/or mitigation measures. This process would also allow for consideration of existing approved “wastewater offset credits” obtained by a developer under the existing ordinance and program. The process would follow the regular review, evaluation, and approvals for discretionary entitlement applications. Conditions of approval would be required when reasonable and necessary to protect the public health, safety, and general welfare and ensure compliance with all appliable City regulations and policies. The City’s authority for conditioned approvals is established in existing City Municipal Code regulations, including Title 17 (Zoning Regulations), Article 6 (Permit Procedures). The conditions of approval would be implemented and verified during the building permit phase.
The overwhelming majority of development projects would not be subject to any future offset requirements under the recommended changes. Ministerial and Minor Development Review Projects (as defined in the City’s Zoning Ordinance, Municipal Code Section 17.106.030) would not be subject to a wastewater flow offset requirement. For example, a single-family residence, the addition of an accessory dwelling unit (ADU), the remodel of an existing single-family residence, a 10-unit multi-family residential or mixeduse project, and commercial tenant improvement projects would not require capacity offsets based on the wastewater flow from these small projects. Projects that only require a building permit and do not require a discretionary entitlement would also not be subject to future offset requirements.
Based on the range of wastewater flow generated by future projects subject to discretionary review, the following entitlement categories would be subject to engineering analysis and flow modeling, and depending upon project and location-specific analysis, may be subject to a conditioned discretionary offset requirement based on the analysis:
Item 7b
1. Citywide: Major11 Development Review Projects, such as a 50-unit housing project, subdivisions that would result in a 50-unit housing development (as one example), and amendments to the City’s General Plan and/or a property’s zoning designation.
2. Within a Capacity-Constrained Area: Moderate12 Development Review Projects such as an 11-unit multi-family housing development or a subdivision that would result in an 11-unit residential project (as one example).
The results of the engineering analysis and flow modeling will determine the conditioned proportional offset, which may include but not be limited to public or private sewer improvements, such as upsizing a sewer main, and/or replacing private sewer laterals offsite. The City will continue to maintain the database and map showing the location of poor and failed-condition laterals, such that this information could be used by a developer to help satisfy the offset condition of approval.
Previous Council or Advisory Body Action
On August 19, 2025, staff presented 1) the results of the 2025 Wastewater Collection System Infrastructure Renewal Strategy, including an updated capacity-constrained areas map, 2) recommendation for expanded rebate eligibility for private sewer lateral replacements and a new private sewer lateral inspection rebate, and 3) options to modify of dissolve the existing Wastewater Flow Offset Program. Council directed staff to 1) proceed to the Planning Commission and return to Council in December 2025 with an updated capacity-constrained sewer map for inclusion in an amendment to the Water and Wastewater Element of the General Plan, 2) return to Council with final recommendations for updates to private sewer lateral rebates, and 3) return to Council in 2026, following additional outreach and analysis, with updated recommendations regarding modifications to the Wastewater Flow Offset Program.
On December 2, 2025, Council 1) adopted the new sewer capacity-constrained area map as part of a General Plan amendment to the Water and Wastewater Element, and 2) adopted updates to private sewer lateral rebates including extending eligibility for private sewer lateral replacement rebates to multi-family and commercial properties located in capacity-constrained areas (retaining existing eligibility for single-family homes citywide) and creation of a new private sewer lateral inspection rebate.
11 Major Review Projects include multi and single-unit developments 50 units or more, and nonresidential/mixed-use development more than 10,000 square feet in size, significant additions in the Downtown Commercial zone, and any project where an environmental impact report is required. 12 Moderate Review Projects include multi and single-unit developments between 11-49 units and nonresidential/mixed-use development 2,500 to 10,000 square feet in size, or a significant enlargement or modification.
Item 7b
Public Engagement
Since the December 2, 2025 Council Study Session, staff have met with various community stakeholders and key partners to generate discussion and feedback, which has been evaluated to determine alignment and to produce the recommendations in this report. In summary:
January 8, 2026: staff met with several stakeholders in the development community.
January 15, 2026: staff gave a presentation on proposed changes to approximately 20 San Luis Obispo Coastal Association of Realtors members at the San Luis Obispo Compass office.
February 5, 2026: staff presented at the Developer’s Roundtable. March 12, 2026: staff gave a presentation to the San Luis Obispo Chamber Legislative Action Committee.
March 23, 2026: Following the March 12 Chamber meeting, staff met again with several interested developers.
March 27, 2027: staff met again with representatives from the San Luis Obispo Coastal Association of Realtors at the Compass office.
Both the realtor and developer communities have provided meaningful feedback and participated in collaborative discussions to refine the City’s approach. Stakeholder comments and concerns are summarized in Table 4 below, along with staff’s corresponding responses and approaches, as incorporated into the action recommendations (as applicable).
Table 4. Stakeholder Outreach Summary
Stakeholder Group Comments and Concerns Staff Response
Realtor
Hardship funding source
beyond $4,000 rebate for
those who qualify.
Staff have not yet identified a
Proposition 218-compliant funding
source and administrative structure to
implement this.
Realtor Limited contractor availability
to perform work.
Staff believe there are sufficient
qualified contractors to complete work,
and will conduct additional outreach to
other qualified firms not currently
performing replacements.
Realtor
Owner confusion between
plumber and City
assessment of lateral.
Staff are in the final stages of
evaluating an online portal that would
allow direct access to videos and
comments. This would result in
standardized review and serve as an
additional tool for private bid
procurement for replacement work.
Realtor May not be able to complete
work in 180 days.
Director discretion to extend deadline
with demonstration of good faith effort.
Item 7b
Stakeholder Group Comments and Concerns Staff Response
Realtor Education is needed.
Staff will coordinate an expanded
roadshow to brokerage offices.
Ordinance change proposed to be
effective January 1, 2027 to allow for
additional outreach and education.
Realtor
Consider mandated
replacement of all existing
poor/failed laterals rather
than requiring replacement
through Inspection Upon
Sale Program.
Staff do not recommend this as
replacement through property transfer
allows for easier access to funding
source for the replacement (i.e.
included in home purchase financing).
Realtor Potential delay to escrow
closing.
Buyer and seller may negotiate
replacement through terms of sale,
similar to other contingency items.
Realtor
Can staff limit mandatory
repair or replacement of
poor/failed condition laterals
conditioned through the
Inspection Upon Sale
process to only laterals
located in capacityconstrained areas?
Staff’s current recommendation to
require mandatory repair or
replacement applies to all laterals
conditioned as poor/failed City-wide,
which is consistent with all other
replacement triggers (e.g. development
and enforcement following sewer
spills). These faulty laterals introduce
groundwater and stormwater into the
system during wet-weather flows and
become obstructed during dry-weather
flows (root intrusion), both of which
lead to sewer spills.
Developer What happens to current
project requirements?
Project requirements may be waived
upon Council’s approval of staff’s
recommendations.
Developer
What happens with existing
“credits” for offsets already
completed?
Credits are available to use to offset
future mitigation requirements and are
subject to existing rebate eligibility.
Developer
If the Wastewater Flow
Offset Program is dissolved,
what is the project threshold
for future mitigation or
condition of approval
requirements?
1) All Major Development Review
projects, subdivisions that would
result in a major development-sized
project, and amendments to the
City’s General Plan and/or a
property’s zoning designation.
2) Moderate Development Review
projects and subdivisions that
would result in a moderate
development-sized project within a
capacity-constrained area.
Item 7b
CONCURRENCE
The Community Development Department concurs with the proposed Municipal Code amendment. Developers have noted that the current sewer lateral program is a barrier to the development of housing, and the proposed changes could help facilitate housing development and achievement of Major City and General Plan Housing Element goals and policies. The proposed amendments also allow the continuing discretionary review and conditioned approvals for specified entitlements in order to ensure public health, safety and wellness. The City Attorney's Office has reviewed the draft Municipal Code amendment and has approved to form.
ENVIRONMENTAL REVIEW
The proposed Municipal Code amendment and associated Council-authorized discretion to the Public Works and Utilities Director is exempt from the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Sections 15307 (Actions by Regulatory Agencies for Protection of Natural Resources) and 15308 (Actions by Regulatory Agencies for the Protection of the Environment) because the proposed modifications are anticipated to result in a significantly greater number of replacements of private sewer laterals in failed or poor condition (both within capacity-constrained areas and citywide), which will result in a reduction in inflow and infiltration from groundwater and stormwater affecting the City’s wastewater collection system, a reduction in wet weather sewer spills within capacity-constrained areas, and a reduction in private sewer lateral spills citywide.
In addition, currently, property sales require inspection of the private sewer lateral, only.
If that lateral is in poor or failed condition, there is no current requirement to replace the lateral (unless other actions trigger the requirement, such as intensification through a permitting process). These failed or poor-conditioned laterals contribute to inflow and infiltration and have the potential to result in a sewage spill. Requiring replacement of private sewer laterals in failed or poor condition as a requirement of a property sale would avoid the potential for resulting private lateral sewage spills, which would have a beneficial effect on the environment. As evident in the data,13 these modifications to the program, including elimination of the mandatory offset requirements for projects currently meeting the definition of “intensification”, would have an overall beneficial impact on the environment. Furthermore, the Municipal Code amendment does not eliminate the requirement for discretionary review for specified entitlements, review for consistency with General Plan policies regarding wastewater collection system capacity, and CEQA compliance, which requires consideration of a project’s impact on water quality and a determination that the project can be adequately served by all required utilities and public services.
13 From August 2019 to March 2026, 114 private sewer laterals have been replaced as a requirement of the Wastewater Flow Offset Program. This is significantly less than the 341 private sewer laterals that were conditioned as poor/failed (but not replaced) through the Inspection Upon Sale Program during the same time period (Source: City of San Luis Obispo, 2026).
Item 7b
The physical construction of private sewer lateral replacements resulting from the Municipal Code amendment would be exempt from CEQA pursuant to State CEQA Guidelines Sections 15301 (Existing Facilities), and 15303 (New Construction or Conversion of Small Structures) as the new lateral would have substantially the same purpose as the lateral to be replaced, and would involve negligible or no expansion of the existing use.
FISCAL IMPACT
Budgeted: NA Budget Year: 2025-26
Funding Identified: NA
Fiscal Analysis:
While there are no fiscal impacts directly associated with this item, the Utilities Branch will continue to administer private sewer lateral rebates through the currently adopted programs or until appropriated funds are exhausted each fiscal year.
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $0 $0 $0 $0
State
Federal
Fees
Other:
Total $0 $0 $0 $0
Summary of Staff Recommendations:
1. Modification of the Citywide Sewer Lateral Inspection Program to include repair or replacement of poor or failed condition laterals as determined through the Inspection Upon Sale process.
2. Dissolution of mandatory Wastewater Flow (Private Sewer Lateral) Offset Program requirements.
3. Continued discretionary review and determination of conditional wastewater flow offsets for specified entitlements based on modeling and analysis.
4. Public Works and Utilities Director discretion to waive pending offset improvements for entitled projects and building permits in process.
Item 7b
ALTERNATIVES
1. Council may direct staff not to amend Title 13 of the City’s Municipal Code. This alternative would retain existing wastewater flow offset requirements for intensification projects and would not require mandatory repair or replacement of private sewer laterals determined to be in poor or failed condition through the inspection upon sale process. Impacts of this alternative include 1) retaining existing requirements for new development and intensification projects in the city, which increase costs associated with new development and housing, and 2) existing poor or failed laterals would not be replaced after ownership transfer, resulting in increased risk to the property owner, environment, and the city’s sewer conveyance system.
2. Council may direct staff to proceed with partial amendments to Title 13 of the City’s municipal code, retaining the wastewater flow offset program and only amending 13.08.395 to require mandatory replacement or repair of poor or failed condition laterals following inspection upon sale reports. Under this scenario, the number of private sewer lateral replacements would increase, and development projects would continue to be subjected to the offset program mandates.
3. Council may direct staff to proceed with partial amendments to Title 13 of the City’s municipal code and only amend 13.08.396 to dissolve the mandatory wastewater flow offset program requirements for intensification projects. This action would not achieve the overall beneficial effect resulting from the replacement of poor or failed private sewer laterals following a condition assessment under the Inspection Upon Sale program, without a specified timeframe for lateral replacement.
Since 2019, 341 sewer laterals have been determined to be in poor or failed condition during property sales, but these inspection reports did not require sewer lateral replacement after ownership transfer. Results include increased burden on ratepayers from inflow and infiltration (increased costs to convey and treat rainwater), emergency response following sewer spills, and risks to property owners, the public, and the environment associated with sewer spills.
ATTACHMENTS
A - Draft Ordinance entitled “An Ordinance of the City Council of the City of San Luis Obispo, California, Amending Section 13.08.395 (Private Sewer Laterals/Systems) and Section 13.08.396 (Wastewater Flow Offset) of the City of San Luis Obispo Municipal Code.”
B - Draft Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California, Authorizing the Discretion of the Public Works and Utilities Director to Waive Wastewater Flow Offset Program Requirements and Resolution and Determination of Satisfaction of Conditions of Approval Related to Wastewater Flow Offsets.”
O ______
ORDINANCE NO. _____ (2026 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AMENDING TITLE 13, CHAPTER 13.08,
SECTION 13.08.395 (PRIVATE SEWER LATERALS/SYSTEMS) AND
SECTION 13.08.396 (WASTEWATER FLOW OFFSET) OF THE SAN
LUIS OBISPO MUNICIPAL CODE
WHEREAS, the City’s General Plan supports development and redevelopment of sites that will accommodate the community’s future growth in areas with capacity constraints in the wastewater collection system; and
WHEREAS, General Plan Water and Wastewater Element Policies state that the City’s wastewater collection system shall support population and related service demands consistent with the General Plan (Policy B 2.2.2), and the City shall collect and convey all wastewater under safe and sanitary conditions to the Water Resource Recovery Facility (Goad B 4.1); and
WHEREAS, the City must provide capacity assurance consistent with its adopted Sewer System Management Plan and Statewide General Waste Discharge Requirements; and
WHEREAS, the City of San Luis Obispo has completed the 2025 Wastewater Collections System Infrastructure Renewal Strategy, which includes an updated wastewater flow model and data analysis; and
WHEREAS, private sewer laterals in failed and poor condition contribute significant inflow and infiltration contributing to capacity constraints, surcharging, and overflows in the wastewater collection system during peak wet weather events; and WHEREAS, private sewer laterals in failed and poor condition are at high risk for backups and overflow due to roots and debris that enter the system, which poses a significant risk to the property owner, tenants, public and environment; and WHEREAS, in combination with the implementation of capital sewer projects, the replacement of failed and poor-condition private sewer laterals will improve capacity in the municipal collection system during peak wet weather events and reduce potential for sewer surcharging and overflows.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo that:
SECTION 1. Environmental Review. The proposed Municipal Code amendment is exempt from the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Sections 15307 (Actions by Regulatory Agencies for Protection of Natural Resources) and 15308 (Actions by Regulatory Agencies for the Protection of the
Ordinance No. _____ (2026 Series) Page 2
O ______
Environment) because the proposed modifications are anticipated to result in a significantly greater number of replacements of private sewer laterals in failed or poor condition (both within capacity-constrained areas and citywide), which will result in a reduction in inflow and infiltration from groundwater and stormwater affecting the City’s wastewater collection system, and a reduction in wet weather sewer spills within capacityconstrained areas. The physical construction of private sewer lateral replacements resulting from the Municipal Code amendment would be exempt from CEQA pursuant to State CEQA Guidelines Sections 15301 (Existing Facilities), and 15303 (New Construction or Conversion of Small Structures) as the new lateral would have substantially the same purpose as the lateral to be replaced, and would involve negligible or no expansion of the existing use.
SECTION 2. Municipal Code Section 13.08.395 of the San Luis Obispo Municipal Code and Ordinance Number 1734 (2024 Series) is hereby amended to read as follows and superseded to the extent inconsistent herewith:
13.08.395 Private sewer laterals/systems.
A. Purpose. Inflow and infiltration (I/I) is a serious problem for the city in that during wet weather events, a significant amount of water is introduced into the city’s wastewater collection system from breaches in the public and private sewer pipeline system. Studies have shown that private sewer laterals are a significant source of I/I for the city. The city has determined that it is in the interest of the public’s health, safety, and welfare to address I/I contributed by private sewer laterals and, as such, it is a city priority to require the inspection of private sewer laterals.
B. Ownership, Maintenance, and Repair.
1. The entire lateral, from the building connection up to and including the “wye” connection or other tie-in to the city-owned sewer main, shall fall within the owner’s responsibility for installation, maintenance, repair, and replacement.
2. Each property owner shall be responsible for maintenance and repair of their private sewer lateral in compliance with this section in a safe and sanitary condition, including:
a. Private sewer laterals shall be free of displaced joints, breaks, offsets, structural defects, damage, open joints, missing portions of pipe, root intrusion, cracks, leaks, sediment deposits, bellies in the pipe or any other similar conditions, defects or obstructions likely to cause or contribute to blockage of the private sewer lateral or the public sewer.
b. Private sewer laterals shall be equipped with cleanouts. c. Private sewer laterals shall not be constructed, either in whole or in part, of “Orangeburg pipe.”
Ordinance No. _____ (2026 Series) Page 3
O ______
d. As described in Section 13.08.030(A), it is unlawful for any individual to connect the following to a private sewer lateral: storm drains, roof drains, yard drains, surface or subsurface drainage, groundwater, or other non-sewage pipes or drains.
3. If a property owner fails to maintain the abovementioned wastewater facilities in a safe and sanitary condition, the director may order and require termination of water service to the parcel and all structures connected to the sewer outlet subject to these conditions. The water service shall not be reinstated until the maintenance or installation of appropriate wastewater disposal facilities has been approved by the director.
4. Before granting any permit authorizing construction of a private sewer lateral or private sewer main serving multiple properties, the city shall require a private easement setting forth responsibilities for each parcel served (including responsibility for maintenance, inspection, and improvement of the shared sewer lateral).
C. Inspection of Existing Private Sewer Laterals.
1. Except as set forth in subsection (C)(2) of this section, after January 1, 2020, all private sewer laterals connected to the city’s sewer system shall be inspected per subsection F of this section at the property owner’s sole expense, when any of the following events occur:
a. Whenever the city has issued a notice of violation following a sanitary sewer overflow event from a property’s private sewer lateral. b. Upon submittal of a building permit for the addition of a bedroom, bathroom, or kitchen in a residential structure or the addition of nonresidential space or an additional plumbing fixture unit in nonresidential structures. c. A change of the use of the structure from: (i) residential to nonresidential use; (ii) to a nonresidential use that will result in a higher flow than the previous nonresidential use; or (iii) to a nonresidential use where the structure served has been vacant or unoccupied for more than three years. d. Increase in size of the domestic water meter serving the property or adding a new domestic water meter.
e. Whenever property located in the city and containing one or more structures which are served by a private sewer lateral or laterals is subdivided. The inspection shall occur prior to recordation of the final map. f. Within thirty days of notification by the city that “smoke testing” or closedcircuit television (CCTV) sewer main inspection indicates the presence of inflow or infiltration from private property that impacts the operation of the public wastewater collection system.
g. Upon any change in ownership of real property within the city, which shall be implemented as follows:
i. “Change in ownership” shall have the meaning set forth in California Revenue and Taxation Code Sections 60 and 61. A change in ownership
Ordinance No. _____ (2026 Series) Page 4
O ______
shall not include those transactions as set forth in California Revenue and Taxation Code Section 62.
ii. Before close of escrow for any change in ownership of real property within the city, the seller(s) of such property shall disclose to the buyer(s) the results of the private sewer lateral inspection as set forth in subsection F of this section.
h. For events identified in subsections (C)(1)(a) through (C)(1)(g) of this section, repair or replacement shall be made pursuant to subsection G of this section.
i. For events identified in subsection (C)(1)(g), repair or replacement requirements pursuant to subsection G of this section shall not be effective until January 1, 2027.
D. Private Sewer Laterals Within Common Interest Developments.
1. For purposes of this section, the term “common interest development” shall include any community apartment project, condominium project, planned development, or stock cooperative.
2. Private sewer laterals located within a common interest development shall be inspected pursuant to the requirements of subsection F of this section as follows:
a. Whenever the city has issued a notice of violation following a sanitary sewer overflow event from a common interest development’s private sewer lateral. b. Increase in size of the water meter serving the common interest development.
3. Exceptions. An inspection required pursuant to subsection (D)(1) of this section shall not be required in the following circumstances:
a. Prior Replacement of Lateral. If the private sewer lateral serving the common interest development in its entirety was installed or replaced within the twenty years prior to the date the inspection would otherwise be required. b. Prior Inspection or Repair of a Lateral. If the private sewer lateral serving the common interest development in its entirety was inspected in accordance with the inspection requirements of subsection F of this section within the five years prior to the date the inspection would otherwise be required.
E. Inspection of Shared Private Sewer Laterals. Each property owner served by a shared private sewer lateral shall be responsible for compliance with subsection B of this section and shall be subject to the inspection requirements identified in subsection C of this section. For purposes of this subsection E, a “shared private sewer lateral” shall mean laterals serving more than one property that are not part of a common interest development.
F. Inspection Requirements.
Ordinance No. _____ (2026 Series) Page 5
O ______
1. Property owners must submit documentation of the sewer lateral inspection to the city prior to the close of escrow. Testing may be accomplished by either a water exfiltration test, an air test, or closed-circuit video recording observation. Installation of cleanouts and removal of existing P-traps may be necessary to accomplish the video inspection. If a closed-circuit video recording observation is selected as the method of inspection, then the video shall meet the following requirements:
a. Shall be in digital format.
b. Shall be in color (black and white or otherwise unclear video will not be accepted).
c. Shall show the address of the lateral.
d. Shall show the date the video was taken.
e. Shall inspect the entire lateral from the house connection to the city-owned sewer main.
f. Shall have a running foot or time marker clearly visible on the screen. g. Where joints are present, shall briefly stop the camera at each to clearly indicate their integrity.
h. Shall have the telephone number for the point of contact for the company providing the inspection.
i. A map shall be provided with the video inspection to clearly show the lateral location including the cleanout or access point at the house connection used to insert the camera into the lateral and the wye connection to the city-owned sewer main.
2. The lateral inspection and lateral inspection report shall be prepared and signed by a contractor, plumber, or a person experienced in lateral inspections who shall declare that the report is true and correct. At a minimum, the inspection report shall include the information in Exhibit A:
EXHIBIT A: PRIVATE SEWER LATERAL INSPECTION REPORT
Property Address (or
Addresses):_________________________________________________________________ Inspection
Date:_______________________________
Inspection
Method:______________________________
Company Name/Point of
Contact:__________________________________________________________________ Phone Number/Email
Address:____________________________________________________________________
Ordinance No. _____ (2026 Series) Page 6
O ______
EXHIBIT A: PRIVATE SEWER LATERAL INSPECTION REPORT
Lateral Length (in
feet):_________________________
Lateral
Material:______________________________
Installation date (if
known):______________________
Lateral
Age:_________________________________
Describe deficiencies (if
any):____________________________________________________________________ Plumber/Contractor
Signature:___________________________________________________________________ License # of
Plumber/Contractor:___________________________________________________________ Property Owner
Signature:___________________________________________________________________ Property Owner interest in participating in city Wastewater Flow Offset Program: * YES NO * If Property Owner indicates “Yes”, city would include address on eligibility list for Wastewater Flow Offset Mitigation requirement.
3. A contractor, plumber, or a person experienced in lateral inspections who prepares a false lateral inspection report shall be subject to punishment under Article XII of this chapter in addition to any other legal remedies or punishment provided by law.
4. Verification. The city reserves the right to verify the sewer lateral inspection results prior to being accepted.
G. Sewer Lateral Repair or Replacement Requirements. Upon receipt of the private sewer lateral inspection report pursuant to this chapter, the city shall review the private sewer lateral inspection and lateral inspection report to verify the plumber/contractor findings and provide the owner with a determination on whether the lateral meets the criteria described in subsection B of this section. If the private sewer lateral is not in compliance with subsection B of this section, then it shall be repaired or replaced to conform to such standards within one hundred eighty days of the city’s determination. If an inspection of a noncompliant lateral was conditioned due to a sanitary sewer
Ordinance No. _____ (2026 Series) Page 7
O ______
overflow or from findings of infiltration and intrusion, or a lateral with defects having not met the required pipe material requirements, it must be completely replaced rather than repaired. No person shall repair or replace a sewer lateral without first obtaining a permit from the city.
H. Punishment for Violation of This Chapter. Violations of this article shall be punishable pursuant to the remedies identified in Article XII of this chapter. It is considered a violation for any property owner to have a sewer lateral system that does not comply with subsection B of this section, unless the repair or replacement of such system is being pursued in good faith. The city may withhold building permits or other discretionary approvals for a property with a private sewer lateral that is determined to be not in compliance with subsection B of this section until the private sewer lateral is brought into compliance with city standards. Final building approval will be conditioned upon repair or replacement of any noncompliant lateral systems to the satisfaction of the director.
I. Rebate Programs. The city may establish by resolution one or more programs to assist owners with the replacement of private sewer laterals.
J. Fees. The city council may from time to time establish, by resolution, fees for issuing permits, reviewing inspection reports and other activities of the city performed pursuant to this chapter.
SECTION 3 Municipal Code Section 13.08.396 of the San Luis Obispo Municipal Code and Ordinance Number 1734 (2024 Series) is hereby amended to read as follows and superseded to the extent inconsistent herewith:
13.08.396 Wastewater flow offset.
A. Discretionary Review. As contemplated and consistent with the City’s Wastewater Collection System Infrastructure Renewal Strategy, current and as may be amended, the City reserves the right to conduct discretionary review of development, subdivision, and land use entitlements that contribute wastewater flow to the municipal wastewater collection system. Nothing in this Municipal Code Chapter shall prohibit the City from imposing conditions of approval for wastewater flow capacity offsets deemed proportional, reasonable, and necessary to protect the public health, safety, and general welfare and ensure compliance with this Chapter and all applicable City regulations and policies.
1. Major development review entitlements and General Plan and Zoning Amendments citywide and Moderate development review projects within wastewater system capacity constrained areas shall be subject to engineering analysis, such as wastewater flow estimates and wastewater flow modeling provided by the applicant with the entitlement application to determine available sewer system capacity and the project’s effect on the municipal wastewater collection system. Subdivision and use permit entitlements resulting in the range
Ordinance No. _____ (2026 Series) Page 8
O ______
of development as identified in the Major and Moderate Development review tiers shall be subject to this requirement.
2. The results of the engineering analysis and flow modeling shall determine associated conditions of approval, which may include but not be limited to public or private sewer improvements, such as upsizing sewer mains, and/or replacing private sewer laterals to offset capacity deficiencies.
SECTION 4. A summary of this ordinance, together with the names of Council members voting for and against, shall be published at least five (5) days prior to its final passage, in The New Times, a newspaper published and circulated in this City. This ordinance shall go into effect at the expiration of thirty (30) days after its final passage.
INTRODUCED on the ____ day of ____, 2026, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the ____ day of ____, 2026, on the following vote:
AYES:
NOES:
ABSENT:
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________
Teresa Purrington
City Clerk
O ______
EXHIBIT A
SECTIONS 13.08.395 AND 13.08.396
LEGISLATIVE DRAFT
13.08.395 Private sewer laterals/systems.
A. Purpose. Inflow and infiltration (I/I) is a serious problem for the city in that during wet weather events, a significant amount of water is introduced into the city’s wastewater collection system from breaches in the public and private sewer pipeline system. Studies have shown that private sewer laterals are a significant source of I/I for the city. The city has determined that it is in the interest of the public’s health, safety, and welfare to address I/I contributed by private sewer laterals and, as such, it is a city priority to require the inspection of private sewer laterals.
B. Ownership, Maintenance, and Repair.
1. The entire lateral, from the building connection up to and including the “wye” connection or other tie-in to the city-owned sewer main, shall fall within the owner’s responsibility for installation, maintenance, repair, and replacement.
2. Each property owner shall be responsible for maintenance and repair of their private sewer lateral in compliance with this section in a safe and sanitary condition, including:
a. Private sewer laterals shall be free of displaced joints, breaks, offsets, structural defects, damage, open joints, missing portions of pipe, root intrusion, cracks, leaks, sediment deposits, bellies in the pipe or any other similar conditions, defects or obstructions likely to cause or contribute to blockage of the private sewer lateral or the public sewer.
b. Private sewer laterals shall be equipped with cleanouts. c. Private sewer laterals shall not be constructed, either in whole or in part, of “Orangeburg pipe.”
d. As described in Section 13.08.030(A), it is unlawful for any individual to connect the following to a private sewer lateral: storm drains, roof drains, yard drains, surface or subsurface drainage, groundwater, or other non-sewage pipes or drains.
3. If a property owner fails to maintain the abovementioned wastewater facilities in a safe and sanitary condition, the director may order and require termination of water service to the parcel and all structures connected to the sewer outlet subject to these conditions. The water service shall not be reinstated until the maintenance or installation of appropriate wastewater disposal facilities has been approved by the director.
4. Before granting any permit authorizing construction of a private sewer lateral or private sewer main serving multiple properties, the city shall require a private easement setting
forth responsibilities for each parcel served (including responsibility for maintenance, inspection, and improvement of the shared sewer lateral).
C. Inspection of Existing Private Sewer Laterals.
1. Except as set forth in subsection (C)(2) of this section, after January 1, 2020, all private sewer laterals connected to the city’s sewer system shall be inspected per subsection F of this section at the property owner’s sole expense, when any of the following events occur:
a. Whenever the city has issued a notice of violation following a sanitary sewer overflow event from a property’s private sewer lateral. b. Upon submittal of a building permit for the addition of a bedroom, bathroom, or kitchen in a residential structure or the addition of nonresidential space or an additional plumbing fixture unit in nonresidential structures.
c. A change of the use of the structure from: (i) residential to nonresidential use; (ii) to a nonresidential use that will result in a higher flow than the previous nonresidential use; or (iii) to a nonresidential use where the structure served has been vacant or unoccupied for more than three years.
d. Increase in size of the domestic water meter serving the property or adding a new domestic water meter.
e. Whenever property located in the city and containing one or more structures which are served by a private sewer lateral or laterals is subdivided. The inspection shall occur prior to recordation of the final map.
f. Within thirty days of notification by the city that “smoke testing” or closed-circuit television (CCTV) sewer main inspection indicates the presence of inflow or infiltration from private property that impacts the operation of the public wastewater collection system.
g. Upon any change in ownership of real property within the city, which shall be implemented as follows:
i. “Change in ownership” shall have the meaning set forth in California Revenue and Taxation Code Sections 60 and 61. A change in ownership shall not include those transactions as set forth in California Revenue and Taxation Code Section
62.
ii. Before close of escrow for any change in ownership of real property within the city, the seller(s) of such property shall disclose to the buyer(s) the results of the private sewer lateral inspection as set forth in subsection F of this section. h. For events identified in subsections (C)(1)(a) through (C)(1)(f) (C)(1)(g) of this section, repair or replacement shall be made pursuant to subsection G of this section. i. For events identified in subsection (C)(1)(g), repair or replacement requirements pursuant to subsection G of this section shall not be effective until January 1, 2027.
2. Exceptions. An inspection required pursuant to subsection (C)(1) of this section shall not be required in the following circumstances:
a. New Construction or Prior Replacement of Lateral. If the owner(s) (or the owner’s predecessor-in-interest) has originally installed or has replaced the private sewer lateral within the twenty years prior to the date the inspection would otherwise be required. b. Prior Inspection of a Lateral. If the owner(s) (or the owner’s predecessor-in-interest) has completed an inspection of the sewer lateral in accordance with the inspection requirements of subsection F of this section within the past five years. c. The private sewer lateral is located within a common interest development system that is not owned and operated by the city, which is regulated under subsection D of this section and serves more than two separate units or properties within the common interest development.
The owner shall bear the burden of proving that the inspection requirements of subsection (C)(1) of this section do not apply. The owner shall provide proof of any prior replacement, inspection or repair of a private sewer lateral in the form of a validly issued permit or other documentation that ensures such prior replacement, repair or inspection of a private sewer lateral occurred pursuant to the exceptions above. The form and content of the document or proof must be deemed sufficient by the city’s utilities director.
D. Private Sewer Laterals Within Common Interest Developments.
1. For purposes of this section, the term “common interest development” shall include any community apartment project, condominium project, planned development, or stock cooperative.
2. Private sewer laterals located within a common interest development shall be inspected pursuant to the requirements of subsection F of this section as follows:
a. Whenever the city has issued a notice of violation following a sanitary sewer overflow event from a common interest development’s private sewer lateral. b. Increase in size of the water meter serving the common interest development.
3. Exceptions. An inspection required pursuant to subsection (D)(1) of this section shall not be required in the following circumstances:
a. Prior Replacement of Lateral. If the private sewer lateral serving the common interest development in its entirety was installed or replaced within the twenty years prior to the date the inspection would otherwise be required. b. Prior Inspection or Repair of a Lateral. If the private sewer lateral serving the common interest development in its entirety was inspected in accordance with the inspection requirements of subsection F of this section within the five years prior to the date the inspection would otherwise be required.
E. Inspection of Shared Private Sewer Laterals. Each property owner served by a shared private sewer lateral shall be responsible for compliance with subsection B of this section and shall be subject to the inspection requirements identified in subsection C of this section. For purposes of this subsection E, a “shared private sewer lateral” shall mean laterals serving more than one property that are not part of a common interest development.
F. Inspection Requirements.
1. Property owners must submit documentation of the sewer lateral inspection to the city prior to the close of escrow. Testing may be accomplished by either a water exfiltration test, an air test, or closed-circuit video recording observation. Installation of cleanouts and removal of existing P-traps may be necessary to accomplish the video inspection. If a closed-circuit video recording observation is selected as the method of inspection, then the video shall meet the following requirements:
a. Shall be in digital format.
b. Shall be in color (black and white or otherwise unclear video will not be accepted). c. Shall show the address of the lateral.
d. Shall show the date the video was taken.
e. Shall inspect the entire lateral from the house connection to the city-owned sewer main.
f. Shall have a running foot or time marker clearly visible on the screen.
g. Where joints are present, shall briefly stop the camera at each to clearly indicate their integrity.
h. Shall have the telephone number for the point of contact for the company providing the inspection.
i. A map shall be provided with the video inspection to clearly show the lateral location including the cleanout or access point at the house connection used to insert the camera into the lateral and the wye connection to the city-owned sewer main.
2. The lateral inspection and lateral inspection report shall be prepared and signed by a contractor, plumber, or a person experienced in lateral inspections who shall declare that the report is true and correct. At a minimum, the inspection report shall include the information in Exhibit A:
EXHIBIT A: PRIVATE SEWER LATERAL INSPECTION REPORT
Property Address (or
Addresses):_________________________________________________________________ Inspection
Date:_______________________________
Inspection
Method:______________________________
Company Name/Point of
Contact:__________________________________________________________________ Phone Number/Email
Address:____________________________________________________________________ Lateral Length (in
feet):_________________________
Lateral
Material:________________________________
Installation date (if
known):______________________
Lateral
Age:___________________________________
Describe deficiencies (if
any):____________________________________________________________________
EXHIBIT A: PRIVATE SEWER LATERAL INSPECTION REPORT
Plumber/Contractor
Signature:____________________________________________________________________ License # of
Plumber/Contractor:__________________________________________________________________ Property Owner
Signature:_______________________________________________________________________ Property Owner interest in participating in city Wastewater Flow Offset Program: * YES NO * If Property Owner indicates “Yes”, city would include address on eligibility list for Wastewater Flow Offset Mitigation requirement.
3. A contractor, plumber, or a person experienced in lateral inspections who prepares a false lateral inspection report shall be subject to punishment under Article XII of this chapter in addition to any other legal remedies or punishment provided by law.
4. Verification. The city reserves the right to verify the sewer lateral inspection results prior to being accepted.
G. Sewer Lateral Repair or Replacement Requirements. Upon receipt of the private sewer lateral inspection report pursuant to this chapter, the city shall review the private sewer lateral inspection and lateral inspection report to verify the plumber/contractor findings and provide the owner with a determination on whether the lateral meets the criteria described in subsection B of this section. If the private sewer lateral is not in compliance with subsection B of this section, then it shall be repaired or replaced to conform to such standards within one hundred eighty days of the city’s determination. If an inspection of a noncompliant lateral was conditioned due to a sanitary sewer overflow or from findings of infiltration and intrusion, or a lateral with defects having not met the required pipe material requirements, it must be completely replaced rather than repaired. No person shall repair or replace a sewer lateral without first obtaining a permit from the city.
H. Punishment for Violation of This Chapter. Violations of this article shall be punishable pursuant to the remedies identified in Article XII of this chapter. It is considered a violation for any property owner to have a sewer lateral system that does not comply with subsection B of this section, unless the repair or replacement of such system is being pursued in good faith. The city may withhold building permits or other discretionary approvals for a property with a private
sewer lateral that is determined to be not in compliance with subsection B of this section until the private sewer lateral is brought into compliance with city standards. Final building approval will be conditioned upon repair or replacement of any noncompliant lateral systems to the satisfaction of the director.
I. Rebate Programs. The city may establish by resolution one or more programs to assist owners with the replacement of private sewer laterals.
J. Fees. The city council may from time to time establish, by resolution, fees for issuing permits, reviewing inspection reports and other activities of the city performed pursuant to this chapter. (Ord. 1734 § 8, 2024; Ord. 1704 §§ 16—18, 2021; Ord. 1665 § 3, 2019)
13.08.396 Wastewater flow offset.
A. Discretionary Review. As contemplated and consistent with the City’s Wastewater Collection System Infrastructure Renewal Strategy, current and as may be amended, the City reserves the right to conduct discretionary review of development, subdivision, and land use entitlements that contribute wastewater flow to the municipal wastewater collection system.
Nothing in this Municipal Code Chapter shall prohibit the City from imposing conditions of approval for wastewater flow capacity offsets deemed proportional, reasonable, and necessary to protect the public health, safety, and general welfare and ensure compliance with this Chapter and all applicable City regulations and policies.
1. Major development review entitlements and General Plan and Zoning Amendments citywide and Moderate development review projects within wastewater system capacity constrained areas shall be subject to engineering analysis, such as wastewater flow estimates and wastewater flow modeling provided by the applicant with the entitlement application to determine available sewer system capacity and the project’s effect on the municipal wastewater collection system. Subdivision and use permit entitlements resulting in the range of development as identified in the Major and Moderate Development review tiers shall be subject to this requirement.
2. The results of the engineering analysis and flow modeling shall determine associated conditions of approval, which may include but not be limited to public or private sewer improvements, such as upsizing sewer mains, and/or replacing private sewer laterals to offset capacity deficiencies.
A. Purpose. The city experiences surcharging in the wastewater collection system and sanitary sewer overflows during wet weather events due to inflow and infiltration. The purpose of these regulations is to establish a methodology whereby new or intensified development in capacity constrained areas as established by the city council could offset new wastewater flow to
mitigate capacity constraints in the existing wastewater collection system to accommodate the project’s additional demand. Without a reduction in inflow and infiltration in these areas, the city will not be able to serve new or intensified development until a significant number of private sewer laterals are replaced or public sewer mains are upsized. Wastewater flow offset through private lateral replacement provides a benefit to the wastewater collection system and the community by reducing public and environmental health concerns by reducing potential SSOs.
B. Application. The provisions of this article shall apply to new or intensified development in capacity constrained areas of the wastewater collection system as established by the city council.
C. Calculating the Wastewater Flow Offset. An applicant shall calculate a development’s wastewater flow offset (Exhibit B) using the domestic sewage generation factors and peaking factor identified in the uniform design criteria, found in the city’s adopted engineering standards.
D. Wastewater Flow Offset Through Private Lateral Replacement. The city determined that replacement of a private sewer lateral serving an existing single-family residence (one equivalent dwelling unit) would create a wastewater flow offset of three hundred ninety gallons per day. This is equal to the wastewater generation rate of one single-family residence (one hundred fifty gallons per day), at a peaking factor of 2.6.
EXHIBIT B: Wastewater Flow Offset Calculation Worksheet Residential Development:
Studio Units: ____________________________
Multi-Family Units: ____________________________
Single-Family Units: ____________________________
Residential Wastewater
Flow:
Studio Units: ____________________________
Multi-Family Units: ____________________________
Single-Family Units: ____________________________
EXHIBIT B: Wastewater Flow Offset Calculation Worksheet RESIDENTIAL FLOW TOTAL (gallons per
day):
____________________________
Non-Residential
Development:
Commercial Square
Footage:
____________________________
Industrial Square Footage: ____________________________ Manufacturing Square
Footage:
____________________________
Business Park Square
Footage:
____________________________
Hotel/Motel Rooms: ____________________________
Non-Residential
Wastewater Flow:
Commercial: ____________________________
Industrial: ____________________________
Manufacturing: ____________________________
Business Park: ____________________________
Hotel/Motel: ____________________________
NON-RESIDENTIAL FLOW TOTAL (gallons per
day):
____________________________
(Proposed Residential Flow + Proposed Non-Residential Flow) x Peaking Factor =
EXHIBIT B: Wastewater Flow Offset Calculation Worksheet Total Wastewater Flow Offset
TOTAL WASTEWATER FLOW OFFSET
(gallons per day):
____________________________
* Replacement of a private sewer lateral serving an existing single-family residence (one equivalent dwelling unit) would offset 390 gallons per day of additional wastewater flow.
E. Wastewater flow offset must occur off-site, within the same capacity constrained wastewater flow basin as the proposed new or intensified development. Developers required to complete an offset must complete a wastewater flow offset program application to obtain a building permit for the offset. Underlying building permits for the project triggering the offset may be withheld until completion of the wastewater offset.
F. Construction of off-site public sewer main improvements, including replacement or rehabilitation of sewer manholes, providing the equivalent or greater reduction in inflow and infiltration within the same capacity constrained wastewater flow basin may be allowed as an alternative to wastewater flow offsets (replacement of private sewer laterals) at the discretion of the utilities director.
G. Single-family residences applying for an ADU building permit may be allowed to submit for an offset in a different capacity constrained basin, provided there is an equivalent or greater reduction in inflow and infiltration, at the discretion of the utilities director.
H. Sewer capacity offsets within the same parcel boundary (on-site) may be considered as an offset credit for a residential intensification project, at the discretion of the utilities director. (Ord. 1734 § 8, 2024; Ord. 1704 § 19, 2021; Ord. 1665 § 3, 2019)
R ______
RESOLUTION NO. _____ (2026 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AUTHORIZING THE DISCRETION OF THE
PUBLIC WORKS AND UTILITIES DIRECTOR TO WAIVE
WASTEWATER FLOW OFFSET PROGRAM REQUIREMENTS AND
RESOLUTION AND DETERMINATION OF SATISFACTION OF
CONDITIONS OF APPROVAL RELATED TO WASTEWATER FLOW
OFFSETS
WHEREAS, on April 2, 2024, the City of San Luis Obispo adopted Ordinance 1734, which amended the Wastewater Flow (Sewer Lateral) Offset Program as established in Municipal Code Section 13.08.396; and
WHEREAS, on April 21, 2026, the City Council introduced an ordinance to amend Municipal Code Section 13.08.396 and dissolve the mandatory Wastewater Flow Offset Program; and
WHEREAS, the City Council determined that the mandatory Wastewater Flow Offset Program would no longer be required for entitlements and permits currently in process, and resolution and determination of satisfaction of conditions of approval specific to wastewater flow offsets would be at the discretion of the Public Works and Utilities Director.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows/or that (whatever action is needed):
SECTION 1. Action. The Director of the Public Works and Utilities Department has the discretion and authority to waive mandatory Wastewater Offset Flow Program requirements and previously required conditions of approval for building permits currently in process as of the date of the adoption of this Resolution (prior to issuance of a building permit and prior to occupancy), upon the Director’s determination that there is adequate capacity in the affected wastewater collection system and issuance of the waiver would not result in an impact on public health and safety. The Director of Public Works and Utilities has the discretion and authority to resolve and make a determination that identified conditions of approval related to wastewater flow offsets have been satisfied.
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 _______________ 2026.
Resolution No. _____ (2026 Series) Page 2
R ______
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________
Teresa Purrington
City Clerk
City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: April 21, 2026
TO: Mayor and Council
FROM: Aaron Floyd, Public Works and Utilities Director
Prepared By: Shane Whittington, Utilities Business Manager VIA: Whitney McDonald, City Manager
SUBJECT: ITEM 8a - 2026 WATER AND SEWER RATE STRUCTURE STUDY Staff received the following question regarding the City’s Customer Assistance Program (CAP). The questions are below with staff’s response shown in italics:
1) On the webpage linked in the staff report about CAP (Lower Your Utility Bill | City of San Luis Obispo, CA), the criteria for people who qualify for the program is listed. How did we come to these criteria? Specifically, I’m curious about the “household income less than twice the Federal Poverty Level (FPL)” criteria. That income is extremely low. Have we ever thought of increasing that to 2.5 times, or 3 times?
The original eligibility criteria for the Customer Assistance Program (CAP) were established on October 6, 1992 (R-8073) and were based on co-enrollment in relevant federal and state assistance programs. On June 1, 2021 (R-11254), Council expanded eligibility to include households with incomes less than two times the Federal Poverty Level (FPL), providing a locally administered pathway for customers who may not be enrolled in other programs.
The current 2x FPL threshold is generally consistent with comparable programs offered by utilities such as PG&E and SoCalGas, as well as other stateadministered assistance programs. The rationale for this consistency was to offer a lower barrier pathway for customers who already qualify for assistance with other providers. It was also for this reason that if a customer received government assistance from CalWorks, CalFresh, Supplemental Social Security, or Medi-Cal, the City would allow that to qualify for the CAP.
These assistance program thresholds are in the table below.
ITEM 8a - 2026 WATER AND SEWER RATE STRUCTURE STUDY Page 2 It is worth noting that PGE and SoCal Gas both combine their 1-2 person households income limits, using the higher number.
For additional context, the median household income in the City of San Luis Obispo is approximately $76,000. As shown in the table below, expanding eligibility to 2.5x or 3x FPL would result in some qualifying income thresholds exceeding the City’s median household income, depending on household size (highlighted in yellow).
If Council gave staff direction to modify the CAP, staff would include a discussion of potential modifications in the future rate setting process that will occur as a part of the Financial Plan process for Fiscal Year 2027-29 to allow for rate impact analysis to occur.
Item 8a
Department: Utilities
Cost Center: 6001; 6101
For Agenda of: 4/21/2025
Placement: Study Session
Estimated Time: 60 minutes
FROM: Aaron Floyd, Public Works & Utilities Director
Prepared By: Shane Whittington, Utilities Business Manager SUBJECT: 2026 WATER AND SEWER RATE STRUCTURE STUDY
RECOMMENDATION
1. Receive a presentation and conduct a Study Session on the 2026 Water and Sewer Rate Structure Study;
2. Confirm the City’s prioritization of rate design attributes; and
3. Confirm staff’s recommendation to proceed with a four-year rate adoption period.
REPORT-IN-BRIEF
Staff typically begin the water and sewer rate study process in the second year of the financial plan. This Study Session is an early step in that process and does not involve adopting new rates. Instead, it allows Council to provide direction on key rate design elements before detailed analysis begins. Rate adoption will occur in the winter and spring of 2027 through a separate process that includes public outreach, noticing, and a public hearing in accordance with State law.
Staff is initiating the 2026 Water and Sewer Rate Structure Study to evaluate the City’s water and wastewater rate design in accordance with State law, City policy, and prior Council direction. This Study Session provides an opportunity for Council to confirm the prioritization of rate design attributes and provide direction on the preferred rate adoption period. Council direction will guide development of cost-of-service and rate structure options to be considered at a future public hearing prior to adoption of any new rates.
A rate structure is the framework a utility uses to allocate the cost of providing water and sewer services among customers. It determines how charges are designed—such as fixed service charges and variable usage-based rates—to recover costs in a manner that is fair, understandable, legally compliant, and aligned with policy goals. In California, rate structures must comply with Proposition 218, which requires that rates reflect the proportional cost of service attributable to each parcel and revenue cannot exceed the reasonable cost of providing the property-related service. Well-designed rate structures also balance objectives such as revenue stability, conservation, and equity, while remaining legally defensible.
Item 8a
As part of this Study Session, staff request Council’s direction on the following:
Overall Rate Design: Confirm whether to generally maintain the existing rate structure. If significant changes are directed, staff will return for a second Study Session in August 2026.
Rate Adoption Period: Confirm a preferred rate adoption period (e.g., two-year or four-year).
POLICY CONTEXT
The City periodically conducts water and wastewater rate studies to ensure utility revenues are sufficient, legally compliant, and aligned with City Council policy direction.
Water and sewer rates must be designed and adopted in accordance with State law, the City’s Municipal Code, and prior Council policy decisions regarding rate structure and cost recovery.
Utility rates for water and wastewater service are governed by California Constitution Article XIII D, adopted by voters through Proposition 218 in 1996. Article XIII D establishes several key requirements for property-related fees and charges, including:
Revenues derived from a utility rate may not exceed the funds required to provide the service.
Revenues may only be used for the service for which the fee was imposed. Fees must not exceed the proportional cost of providing service to each parcel. Fees may not be imposed for general governmental services available to the public at large.
Utilities must conduct a public noticing and protest hearing process prior to adoption of new or increased rates.
Because of these requirements, water and wastewater rate structures must be supported by a cost-of-service analysis demonstrating that rates are proportional to the cost of providing service.
California law also establishes expectations regarding the frequency and transparency of utility rate studies. California Government Code Articles 4.6, 4.6.5, and 4.7 require local agencies that charge water or wastewater service fees to periodically evaluate the adequacy of those fees and publicly report on the findings of that review. This requirement is intended to ensure that agencies:
Regularly review whether rates generate sufficient revenue to fund operations, maintenance, and capital needs, and
Provide public transparency regarding the basis for utility rates.
Consistent with this requirement and industry best practices, local governments commonly conduct rate studies on a multi-year cycle to maintain financial stability and compliance with Proposition 218.
Item 8a
The San Luis Obispo Municipal Code §13.04.090 authorizes the City Council to establish water service rates and charges necessary to operate, maintain, and improve the municipal water system. The Municipal Code provides Council with the authority to adopt and periodically adjust rates to ensure the water utility remains financially sustainable and capable of meeting service obligations. Wastewater rates are similarly established by Council authority to ensure the wastewater utility can fund required operations, maintenance, regulatory compliance, and infrastructure investments.
The San Luis Obispo City Charter also establishes requirements regarding the use of utility revenues. Charter Section 806 requires that all income derived from the operation of a City public utility be devoted exclusively to the expenses of operating, maintaining, improving, or bettering the utility system, and to the repayment of related debts and interest. This provision reinforces the principle that utility revenues must be used solely for utility purposes and supports the cost-of-service framework used in developing water and wastewater rates.
Collectively, these State constitutional provisions, statutes, and local ordinance and policies establish the legal and policy framework that constrains utility rate setting. Under this framework, water and wastewater rates must be based on the cost of providing service, may not generate profit, and revenues must be used exclusively for the operation, maintenance, and improvement of the water and sewer enterprises.
Within this policy framework, there are ten industry-standard rate design attributes that are considered in the development of public utility rates. Cost-of-service rate-making principles originate from Bonbright’s Principles of Public Utility Rates and are reflected in industry guidance such as American Water Works Association’s (AWWA) Principles of Water Rates, Fees, and Charges (M1) and Water Environment Federation’s (WEF) Financing and Charges for Wastewater Systems (MOP 27). These rate principles are meant to serve as guides in the development of sound rate design.
These rate attributes are described in Table 1.
Table 1 - Rate Design Attributes
Rate Design Attribute Plain Meaning Example in Rates
1. Effectiveness in yielding
total revenue requirements.
Rates should bring in enough
money to run the system and
recover the full cost to provide
service.
Making sure fixed charges and
usage rates together fully fund
operations, maintenance, and
infrastructure replacement.
2. Revenue stability and
predictability (revenue the
City receives).
The utility should receive steady
income so it can plan, maintain
service, and avoid sudden
financial problems.
Having a reasonable fixed
monthly charge so revenue
doesn’t collapse during wet or
drought years when water use
alters.
3. Stability and predictability
of rates (water rates that
customers pay).
Customers shouldn’t see large
or sudden swings in their bills
from one year to the next.
Gradual rate adjustments over
time instead of large one-time
increases.
4. Promotion of efficient
resource use.
Within the confines of the law
(while still being cost-based),
Tiered pricing where higher
usage matches the higher cost
Item 8a
rates should encourage people
to use water wisely, but not
punish normal or necessary use.
per unit of delivering those
services.
5. Reflect all present and
future costs and benefits of
providing utility service.
Rates should cover not only
today’s costs, but also long-term
repairs, upgrades, and reliability
needs.
Including funding for pipe
replacement or treatment
upgrades instead of waiting for
failures.
6. Proportional distribution of
total costs among the
customer classes of service.
Different customer groups
should pay based on what it
costs to serve them.
Large irrigation users paying
more if they drive peak demand
or infrastructure sizing.
7. Avoidance of undue
discrimination in rate
relationships.
Customers in similar situations
should be treated the same, and
differences should be based on
real cost differences.
Avoiding special discounts for
one group unless there’s a clear
difference in the cost to provide
service.
8. Dynamic in its ability to
respond to changing supply
and demand conditions
and/or environmental
concerns.
Rates should be flexible enough
to respond to droughts, growth,
or changing water supply
conditions.
Drought surcharges or seasonal
rates.
9. Simple and easy to
understand; easy to
administer.
Customers should be able to
understand their bill, and staff
should be able to run the system
efficiently.
Limiting the number of tiers or
keeping the bill format clear and
consistent.
10. Freedom from controversy
as to interpretation.
The rate structure should be
clear enough that people don’t
constantly argue about what it
means or how it works.
Using clear formulas and
definitions so customers, staff,
and auditors all interpret rates
the same way.
The order of these rate design attributes does not indicate relative importance.
Application of these attributes is constrained by State constitutional provisions, statutes, and local policies, which take precedence in the development of utility rates. In practice, the attributes may be complementary, overlapping, or at times even in conflict with one another, and must be balanced in the design of the rate structure.
DISCUSSION
Background
The current water rate structure consists of a monthly base fee and a volumetric usage charge.1 Volumetric rates vary based on the cost of service for single-family residential, multi-family, non-residential, and landscape irrigation customers. Monthly base fees vary by meter size to reflect differences in system capacity requirements.
Tables 2 and 3 summarize the water rates approved by the City Council on June 17, 2025 (Resolution No. 11582), including the current volumetric usage charge shown in Table 2 as “Water Usage (Variable Per Unit Cost)” and the current monthly base fee shown in Table 3 as “Water Monthly Base Fees (Fixed Cost).”
1 A volumetric water charge is a utility pricing mechanism where consumers are billed directly proportional to the volume of water consumed (e.g., per gallon).
Item 8a
Table 2 - Water Usage
(Variable Per Unit Cost)
Approved Rates
Effective July 1, 2025
Approved Rates
Effective July 1, 2026
Single Family Residential
Tier 1: 0 to 5 units
$9.01 $9.51
Single Family Residential
Tier 2: 6 to 12 units
$10.38 $10.95
Single Family Residential
Tier 3: 13+ units
$17.90 $18.88
Multi-Family $10.11 $10.67
Non-Residential $10.70 $11.29
Landscape Irrigation $10.92 $11.52
Table 3 - Water Monthly
Base Fees
(Fixed Cost)
Approved Rates
Effective July 1, 2025
Approved Rates
Effective July 1, 2026
Single Family Residential $31.91 $33.67
Multi-Family, Non-Residential, and Landscape Irrigation by Water Meter Size
0.75-inc or less meter $31.91 $33.67
1-inch meter $53.28 $56.21
1.5-inch meter $106.34 $112.19
2-inch meter $170.17 $179.53
3-inch meter $319.24 $336.80
4-inch meter $532.19 $561.46
6-inch meter $1,064.07 $1,122.59
8-inch meter $1,702.61 $1,796.25
The current sewer rate structure also consists of a monthly base fee and a volumetric usage charge. Volumetric sewer rates vary based on the cost of service for single-family residential and multi-family customers (subject to a sewer cap) and for non-residential customers. Monthly base fees vary by meter size.
Tables 4 and 5 summarize the sewer rates approved by the City Council on June 17, 2025 (Resolution No. 11584), including the current volumetric usage charge shown in Table 4 as “Sewer Usage (Variable Per Unit Cost)” and the current monthly base fee shown in Table 5 as “Sewer Monthly Base Fees (Fixed Cost).” Table 4 - Sewer Usage
(Variable Per Unit Cost)
Approved Rates
Effective July 1, 2025
Approved Rates
Effective July 1, 2026
Single Family and MultiFamily Residential Per
Unit Cost
(Up to Sewer Cap)
$10.46 $11.14
Non-Residential Per Unit
Cost
$10.94 $11.65
Item 8a
Table 5 - Sewer Monthly
Base Fees
(Fixed Cost)
Approved Rates
Effective July 1, 2025
Approved Rates
Effective July 1, 2026
Single Family Residential $26.11 $27.81
Multi-Family, Non-Residential, and Landscape Irrigation by Water Meter Size
0.75-inc or less meter $26.11 $27.81
1-inch meter $43.61 $46.44
1.5-inch meter $86.93 $92.61
2-inch meter $139.20 $148.25
3-inch meter $261.15 $278.12
4-inch meter $435.33 $463.63
6-inch meter $870.40 $926.98
8-inch meter $1,392.70 $1,483.23
10-inch meter $2,002.22 $2,132.36
The City’s current water and wastewater rate structures reflect policy direction provided by the City Council during prior rate study sessions conducted on October 4, 2005 (Item Bus 4), June 14, 2011 (Item PH 1 and PH 2), and January 9, 2018 (Item 11). During these meetings, Council identified the relative importance of rate design attributes to guide development of the rate structure. Table 6 summarizes Council’s prioritization of the top five out of ten rate design attributes described in Principles of Public Utility Rates (Bonbright), with 1 representing the highest priority.
Table 6 - Council’s Top 5 Rate Design Attributes
Rate Design
Attributes
October 4, 2005 June 14, 2011 January 9, 2018
1. Effectiveness in
yielding total revenue
requirements.
1 N/A - will be met for all
rate design options
N/A - will be met for all
rate design options
2. Revenue stability
and predictability
(revenue the City
receives).
1 1
3. Stability and
predictability of rates
(water rates that
customers pay).
4 2 3
4. Promotion of
efficient resource use. 2 5 2
5. Reflect all present
and future costs and
benefits of providing
utility service.
5 6. Proportional
distribution of total
costs among the
customer classes of
service.
5 4 4
7. Avoidance of undue
Item 8a
discrimination in rate
relationships.
8. Dynamic in its
ability to respond to
changing supply and
demand conditions
and/or environmental
concerns.
9. Simple and easy to
understand; easy to
administer.
3 3
10. Freedom from
controversy as to
interpretation.
Between 2005 and the 2011 and 2018 study sessions, Council placed increased emphasis on revenue stability and predictability. This shift was influenced by drought conditions throughout the 2000s and 2010s, which resulted in reduced water consumption. At that time, the rate structure relied heavily on volumetric charges that varied directly with water use. As consumption declined, utility revenues decreased while the cost of operating the water system remained largely fixed. This resulted in structural revenue shortfalls and the need to implement temporary drought surcharges to maintain financial stability.
In response to these conditions, Council directed staff to develop a rate structure that provided greater revenue stability. Based on this direction, Council adopted a rate structure that included a monthly base fee in addition to volumetric charges on June 12, 2013 (Item PH 4). This change increased the portion of revenue recovered through fixed charges, improving the ability of the utility to meet revenue requirements during periods of reduced water use.
Across the 2005, 2011, and 2018 study sessions, Council’s rate design priorities have remained generally consistent. In addition to revenue stability and predictability, Council has consistently prioritized:
Stability and predictability of rates paid by customers; Promotion of efficient use of water resources; and
Proportional distribution of costs among customer classes based on cost of service.
Although the relative ranking of these attributes has varied over time, the overall policy direction has remained consistent. Staff believe the current rate structure reflects these priorities and has been effective in maintaining financial sustainability, legal compliance, and alignment with Council policy direction.
These established rate design priorities are recommended by staff to provide the policy framework for the 2026 Water and Sewer Rate Study, which will evaluate potential adjustments to the rate structure while maintaining consistency with State law, City policy, and Council direction.
Item 8a
Public Engagement
On February 23, 2026, staff conducted
a public information session regarding
water and wastewater rate structure
design to obtain community input. Prior
to the meeting, staff advertised the
public information session through two
social media posts, one social media
story, and direct email outreach to 159
organizations and contacts, including
homeowner associations, property
management companies, mobile home
parks, multifamily property contacts,
and community organizations and
service providers.
Despite the outreach, public participation was minimal and no written feedback forms identifying rate design priorities were submitted at the meeting. Verbal comments received at the meeting generally expressed support for maintaining the existing rate structure. Additional public outreach and opportunities for public engagement and input will be conducted by staff throughout the Water and Sewer Rate Study, including emails, postcard mailers, public postings, social media, and public meetings and hearings.
Customer Assistance Program
Although not part of the rate structure itself, the City’s Customer Assistance Program (CAP) provides a mechanism to support qualified customers and is relevant to Council’s consideration of rate affordability. No Council direction is requested on this program at this time. Staff are highlighting recent increases in participation and ongoing efforts to expand enrollment among eligible customers. The program is funded through late fees, which are not property-related charges and are therefore not subject to Proposition 218 requirements.
Following Council authorization in 2025 to increase the program discount from 15% to 20% (Resolution No. 11583) and expanded outreach efforts, program participation has increased. Over the last five years, enrollments are forecasted to increase by approximately 51%, and utilization of available assistance funds is forecasted to increase by approximately 313%.
Figure 1 summarizes assistance provided through the Customer Assistance Program from Fiscal Year 2021-22 through the Fiscal Year 2025-26 forecast.
Item 8a
Figure 1 – Customer Assistance Program
Staff will continue to evaluate opportunities to increase awareness of and participation in the program to ensure that available assistance reaches eligible customers, including potential program administration modifications that could provide pathways to users not currently able to participate in this program.
STUDY SESSION QUESTIONS
Based on the discussion above, Staff requests Council’s consideration and direction regarding the following topics.
1. General Concurrence Regarding Rate Design Priorities.
As noted above, staff recommend the following prioritization of rate design attributes, consistent with prior Council direction:
1. Revenue stability and predictability (revenue the City receives).
2. Promotion of efficient resource use.
3. Stability and predictability of rates (water rates that customers pay).
4. Proportional distribution of total costs among the customer classes of service.
5. Reflect all present and future costs and benefits of providing utility service.
Staff request the City Council consider and confirm the existing rate design priorities or provide staff with direction on modifications to the rate design attribute prioritization.
If Council provides direction that significantly shifts rate design priorities, staff will return for a second Study Session in August 2026 to further explore those policy directions. The relationship between rate design attributes is complex, and changes are typically
Item 8a
implemented and evaluated over multiple rate cycles rather than through a single adjustment. While staff are not able to present specific rate impacts at this stage, different priorities can influence the structure in meaningful ways—for example, greater emphasis on revenue stability may increase the proportion of fixed charges, while greater emphasis on simplicity and ease of administration may result in fewer rate tiers or a more streamlined rate structure. Any resulting rate structure must be supported by a cost-ofservice analysis and comply with Proposition 218 requirements. Table 1 provides general examples of how these attributes can be reflected in rate design.
2. General Concurrence for a Four-year Rate Adoption.
Staff are proposing a four-year rate adoption period. Council has historically adopted twoyear rate adjustments in alignment with the City’s financial plans. A four-year rate adoption period provides greater revenue stability, customer bill predictability, and administrative efficiency by reducing the frequency of rate studies, public noticing, and Proposition 218 proceedings. Longer adoption cycles also support multi-year capital planning and financial forecasting, allowing the City to align rate adjustments with planned infrastructure investment. This approach is commonly used by utilities when costs and operating conditions are reasonably predictable. State law allows for adoption of utility rates for up to five years (California Government Code § 53756). Industry practice is to conduct rate studies on a one- to five-year cycle to ensure revenues remain sufficient, legally compliant, and aligned with community priorities.
The predictability of the current rate structure and its demonstrated ability to successfully maintain financial sustainability, legal compliance, and alignment with prior Council policy direction from 2005, 2011, and 2018 has given staff the comfort to recommend a fouryear rate adoption concurrent with adoption of the 2027-29 Financial Plan. As a reminder, any rate adjustments require noticing, a public hearing, and Council authorization to adopt. If Council provides direction to significantly alter the existing rate structure, staff may return with a recommendation to only proceed with a two-year rate adoption as a new rate structure may not result in the revenue stability required for a longer rate adoption period.
NEXT STEPS
If Council provides direction that significantly shifts rate design priorities, staff will return for a second Study Session in August 2026 to further explore those policy directions. If Council generally confirms the existing rate design priorities, staff will proceed with development of the Water and Sewer Rate Study.
Public outreach for the rate setting process is anticipated to begin in winter 2027 and will include emails, public postings, social media, and public meetings. Staff anticipate returning to Council in spring 2027 to request authorization to initiate the Proposition 218 noticing process. The Proposition 218 public hearing and Council consideration of rate adoption is anticipated to occur in May or June 2027.
Item 8a
CONCURRENCE
The City’s Finance Department concurs with the staff recommendation.
ENVIRONMENTAL REVIEW
The evaluation and modification of rates and charges by public agencies is statutorily exempt from the California Environmental Quality Act (CEQA) under Public Resources Code §§ 21083 and 21080(b)(8) and State CEQA Guidelines § 15273, as it involves the establishment of rates to fund operating expenses and capital projects necessary to maintain service within existing service areas. The proposed Water and Sewer Rate Study would not result in the commitment to or funding of the expansion of capital projects not otherwise evaluated under CEQA. Therefore, no environmental review is required for this item.
FISCAL IMPACT
This item does not have a direct fiscal impact. The study session is intended to obtain Council direction to inform the upcoming Water and Sewer Rate Study. Funding for the rate study is included in the adopted budget for the Water and Wastewater Utilities. Any future fiscal impacts associated with rate adjustments will be evaluated and presented to Council as part of the rate study and Proposition 218 rate adoption process.
Budgeted: N/A Budget Year: 2025-27
Funding Identified: N/A
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $0 $0 $0 $0
State
Federal
Fees
Other:
Total $0 $0 $0 $0
ALTERNATIVES
1. Provide different direction on rate design priorities. Council may provide direction regarding the prioritization of rate design attributes to be used in the development of the Water and Wastewater Rate Structure Study that differs from staff’s recommendation. Changes to the prioritization of these attributes may result in different rate structure options being evaluated and presented to Council at a future meeting. Significant changes to the prioritization ranking may affect the
Item 8a
predictability of the resulting rate structure, warranting a two-year rate plan rather than a four-year rate plan to monitor the effects.
2. Direct staff to prepare a two-year rate adoption instead of a four-year adoption.
Instead of confirming a four-year rate adoption period, Council may direct staff to prepare a two-year rate study. A shorter rate adoption period may provide greater flexibility to respond to changing financial, regulatory, or economic conditions but may result in more frequent rate studies and Proposition 218 proceedings. Industry standard guidance is to conduct rate studies every one to five years.
3. Defer direction and return at a later date. Council may choose to defer direction on the rate study and request that staff return at a future meeting with additional information, analysis, or public outreach. Deferring direction may delay the rate study schedule and could affect the timing of future rate adjustments.