San Luis Obispo City Council
August 4, 2026

City Council
AGENDA

Tuesday, August 4, 2026, 5:30 p.m.

Council Chambers, 990 Palm Street, San Luis Obispo
Agenda has been amended because Item 5g has been pulled from the agenda and continued to a date uncertain.

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Agendas and Staff Reports: Agendas and staff reports for regular meetings are commonly posted one week in advance of the meeting date.

Staff Agenda correspondence regarding questions from Council received after the staff reports are published will be posted by 1:00 PM on the day of the meeting.

Contact the City Clerk's Office with questions by emailing [email protected].

ONLINE PARTICIPATION:

Zoom: To join the Regular Meeting, click this link https://slocity.zoomgov.com/j/1652441487 on any computer or mobile device.

Telephone: Call 1-669-444-9171 and enter the Meeting’s ID # 165 244 1487 to join by telephone audio only.

Public Comment during the meeting:

In person public comment:

Fill out a speaker card and give it to the City Clerk.

Online public comment:

Use the Zoom “raise your hand” button or telephone call in press *9 on your telephone (*6 to unmute/mute) when the comment period on your item of interest begins. You will be notified when you’ve been unmuted and it’s your turn to speak.:

Public Comment prior to the meeting (must be received 3 hours before the start of the meeting.

Correspondence received before the meeting will not be read aloud during the meeting):

Email - Submit to [email protected]. In the subject line, please include the date of the meeting and the item number (if applicable).

Mail - Address letters to the City Clerk's Office at 990 Palm Street, San Luis Obispo, California, 93401.

Voicemail - Call (805) 781-7164 and leave a voicemail. Please state and spell your name, the agenda item number, and leave your comment.
*All correspondence will be publicly archived and distributed to councilmembers; however, submissions received after the deadline may not be processed until the following day.

Pages

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

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

3. PRESENTATIONS

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

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

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

Recommendation:

To approve Consent Calendar Items 5a to 5h.

5.a WAIVE READING IN FULL OF ALL RESOLUTIONS AND

ORDINANCES
Recommendation:

Waive reading of all resolutions and ordinances as appropriate.

5.b MINUTES REVIEW - JULY 13, 2026 SPECIAL MEETING AND JULY 21, 2026 REGULAR MEETING COUNCIL MINUTES
11 Recommendation:

Approve the minutes of the City Council meeting held on July 13, 2026 and July 21, 2026.

5.c COMMUNITY RESILIENCE CENTERS GRANT APPLICATION 21
Recommendation:

Adopt a draft Resolution entitled, "A Resolution of the City Council of the City of San Luis Obispo, California, approving the application for grant funds under the California Strategic Growth Council Community Resilience Centers Program" to authorize staff to apply for a Planning Grant in an amount not to exceed $500,000.

5.d AUTHORIZE DISBURSEMENT OF PROHOUSING INCENTIVE

PROGRAM GRANT FUNDS FROM THE AFFORDABLE HOUSING
FUND
31 Recommendation:

Adopt a draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, authorizing the disbursement of Prohousing Incentive Program Grant Funds from the Affordable Housing Fund”.

5.e APPROVE A GRANT APPLICATION TO THE FISCAL YEAR 2026- 2027 AND 2027-2028 FOR CALRECYCLE BEVERAGE CONTAINER

RECYCLING GRANT PROGRAM
69 Recommendation:

Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, authorizing submittal of an Individual Grant Application for the CalRecycle Beverage Container Recycling Grant Program (FY 2026-27 and 2027-28).”

5.f AUTHORIZE THE FIRE DEPARTMENT TO ISSUE A PURCHASE

ORDER FOR A TRACTOR-DRAWN AERIAL APPARATUS
95 Recommendation:

Issue a purchase order (PO) in the amount of $2,637,438.34 to South Coast Fire Equipment for a sole source purchase of a Type 1 Tractor Drawn Aerial Apparatus (TDA): and

1. Authorize the City Manager to execute the purchase
documents; and,

2. Appropriate $1,000,000 from the Capital Projects Reserve Fund to support the replacement of Fire Truck 1; and,
Adopt a draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Authorizing Appropriation of $1,000,000 from the Capital Reserve to support the Replacement of Fire Truck 1

3. 5.g ADVISORY BODY APPOINTMENT FOR AN UNSCHEDULED

VACANCY ON THE HUMAN RELATIONS COMMISSION
109
This item has been pulled at the request of the Council Liaisons and rescheduled to a date uncertain. .

5.h AUTHORIZATION TO AWARD SILT REMOVAL PROJECT 2026,
SPECIFICATION 2000198
113
Recommendation:

Approve the project plans and special provisions for the Silt Removal 2026 project, Specification 2000198-04;and,

1. Award a construction contract to Andrew Brown General Engineering Inc. in the amount of $218,897 for the Silt Removal 2026 project, Specification 2000198-04; and,

2. Authorize the City Engineer to issue Contract Change Orders up to the available project budget (Account 2000198), and up to any amended budget subsequently approved by the City
Manager per City Purchasing Policy approval thresholds; and

3. Find this action consistent with the Final Programmatic Environmental Impact Statement/Environmental Impact Report (EIS/R), dated October 9, 2003, as certified by City Council through Resolution No. 9494

4. 6. PUBLIC HEARING AND BUSINESS ITEMS

6.a INTRODUCE AN ORDINANCE TO AMEND TITLE 13, CHAPTER 13.12

OF THE MUNICIPAL CODE TO ESTABLISH A NEW UNDERGROUND

UTILITY DISTRICT COMPRISING THE LIMITS OF THE PRADO

INTERCHANGE PROJECT AND PROVIDE DIRECTION ON THE

PRADO ROAD INTERCHANGE PROJECT AND PRADO CREE
125
Recommendation:

Prado Road Interchange Recommendations
Introduce a draft Ordinance entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, amending Section 13.12.040 of the San Luis Obispo Municipal Code to Establish a New Underground Utility District 17”; and

1. Receive and file the Final Value Analysis, Draft Bridge Type Selection and Wall Type Selection Reports which provides the technical basis for the Supplemental Project Report and final design development ; and

2. Authorize the Assistant City Manager to approve and execute the final Caltrans Supplemental Project Report (SPR) upon completion of the remaining technical appendices, provided no substantive changes are made to the project scope, purpose, or core recommendations; and

3. 4. Select an Aesthetic Theme for the Interchange Project:
a. “Figure 4 – Base Theme”; or
b. “Figure 5 – Mission Theme”; or
c. “Figure 6 – Modern Mission Theme”; and

5. Provide direction on gateway branding by either:

Including City branding lettering ("San Luis Obispo") to establish a regional gateway landmark; or
a.

Advancing a more heavily landscaped area instead of City branding; and
b.

Direct staff to evaluate a future Class I shared-use path along Elks Lane during the next update to the City's Active
Transportation Plan and, where feasible, acquire the necessary right-of-way in conjunction with the Prado Road Interchange Project to preserve the opportunity for future implementation; and

6. Prado Creek Bridge Recommendations

7. Receive and file the Preliminary Value Analysis Study and approve Value Analysis implementing design alternatives 1.0, 3.0,

4.0, 5.0, and 6.0 and not implementing design alternatives 2.0 and

7.0; and

8. Authorize the Finance Director to make the following budget revisions:

Decrease the project’s appropriation of Federal Earmark grant funds from $4.130 million to $2.065 million to resolve an accounting duplication; and
a.

Decrease the projects appropriation of Federal Highway
Bridge funds from $6.0 million to $0 to more appropriately align the funds with the anticipated reception timeframe; and
b.

9. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Authorizing Budget Adjustments for the Prado Creek Bridge Replacement Project.”
Prado Creek Bridge & Prado Road Interchange Projects
Recommendation

10. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Authorizing Submittal of Grant Applications for the Prado Road Interchange Project and Prado Creek Bridge Replacement Project, and requiring Council Appropriation upon Grant Award.”

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

8. ADJOURNMENT
The next Regular Meeting of the City Council will be held on August 18, 2026 at 5:30 p.m. in the Council Chambers at City Hall, 990 Palm Street, San Luis Obispo.

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

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

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

1 Council Minutes
July 13, 2026, 12:00 p.m.

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

Present:

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

1. CALL TO ORDER
A Special Meeting of the San Luis Obispo City Council was called to order on July 13, 2026 at 12:00 p.m. at Council Hearing Room, San Luis Obispo, by Mayor Stewart.

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

Stew Jenkins
Shawn Harris
--End of Public Comment--

3. CITY COUNCIL WORKSHOP

3.a CITY COUNCIL MEETING MANAGEMENT (90 MINUTES)
ACTION: The Council discussed how future meetings will be managed and reviewed the current meeting format. The Council discussed prioritizing public comment by moving public comment periods sooner in the process for each agenda item and updating the meeting cover page to inform the public when staff reports and agenda correspondence is available.

4. ADJOURNMENT
The meeting was adjourned at 1:40 p.m. The next Regular Meeting of the City Council will be held on August 4, 2026 at 5:30 p.m. in the Council Chambers at City Hall, 990 Palm Street, San Luis Obispo.

2 APPROVED BY COUNCIL: XX/XX/202X

1 Council Minutes
July 21, 2026, 5:30 p.m.

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

Present:

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

1. CLOSED SESSION (4:00 PM START)

1.a CALL TO ORDER

1.b CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION ACTION: City Attorney Christine Dietrick reported the Council met in Closed Session on one matter of anticipated litigation regarding exposure to litigation arising from allegations related to the potential application of the City’s recent Mobile Home Rent Stabilization Ordinance amendments to existing long term leases. There was no reportable action taken on this item.

1.c CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION
ACTION: Assistant City Attorney Markie Kersten reported. Council unanimously authorized defense of the city and individually named defendants in existing litigation as parties and facts listed on the agenda.

The individually named defendants did not participate in the Closed Session and Council was represented by outside legal counsel.

1.d ADJOURNMENT
Closed Session adjourned at 5:10 PM to the Regular Meeting of the San Luis Obispo Council at 5:30 PM.

2. CALL TO ORDER

2 A Regular Meeting of the San Luis Obispo City Council was called to order on July 21, 2026 at 5:30 p.m. in the Council Chambers, 990 Palm Street, San Luis Obispo, by Mayor Stewart.

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

4. PRESENTATIONS

4.a INTRODUCTION AND OATH OF OFFICE - FIRE CHIEF RANDY
HARRIS
City Manager Whitney McDonald introduced Fire Chief Harris. City Clerk Teresa Purrington administered the Oath of Office.

4.b SAN LUIS OBISPO COUNTY 2026 POINT-IN-TIME COUNT UPDATE Timmi Tway, Community Development Director, Daisy Wiberg, Homelessness Response Manager and Kate Borne, Business Services Analyst with the County of San Luis Obispo provided an in-depth staff report and responded to Council questions.

Public Comments:

Barry Price
---End of Public Comment---

4.c CITYWIDE SINGLE VOTE COMMUNICATIONS UPDATE
Deputy City Manager Greg Hermann, Communication Manager Whit Szentesi and Policy and Program Manager Natalie Harnett provided an indepth staff report and responded to Council questions.

Public Comments:

None
---End of Public Comment---

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

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

Dawn Ortiz Legg
Stefan Talke
Katie Ikard

3 Shawn Harris
Dona Hare Price
Volonakis
--End of Public Comment--

6. CONSENT AGENDA
Council Member Marx indicated that she would be recusing herself on Item 6h.

Public Comment:

Rachel Whalen - Item 6d
Clifford Betita - Item 6i
Babak Naficy - Item 6i
Kathy Borland - Item 6i
Kim Slickler - Item 6i
Alaina McBride - Item 6i
--End of Public Comment--
Motion By Council Member Shoresman
Second By Council Member Marx
To approve Consent Calendar Items 6a to 6k.

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

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

6.b MINUTES REVIEW - MAY 26, 2026 SPECIAL MEETING AND JUNE 16, 2026 REGULAR CITY COUNCIL MINUTES
Approve the minutes of the City Council meeting held on May 26, 2026 and June 16, 2026.

6.c ADVISORY BODY APPOINTMENT FOR AN UNSCHEDULED VACANCY

ON THE HOUSING AUTHORITY BOARD
Confirm the appointment of William Bartlett to the Housing Authority Board (HAB) for the remainder of the vacated term ending on June 30, 2027.

6.d ANNUAL CANNABIS BUSINESS PROGRAM UPDATE

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

6.e ADOPTION OF FY 2026-27 COMMUNITY PROMOTION PROGRAMS

FOR TOURISM BUSINESS IMPROVEMENT DISTRICT (TBID) AND

PROMOTIONAL COORDINATING COMMITTEE (PCC)
As recommended by the Tourism Business Improvement District (TBID) Board and the Promotional Coordinating Committee (PCC):

1. Authorize the City Manager to enter into program expenditures and various contracts for the TBID not to exceed the 2026-27 projected revenue of $1,952,383 (excludes administration overhead and staffing costs), based on the recommendations by the TBID Board; a. This includes, but is not exclusive of, approval of the funding of the first year of an extended two-year contract with Noble Studios for marketing services in the amount of $1,250,000; b. The funding of the contracts with the SLO Chamber of Commerce for Guest Services and Public Relations in the amount of $148,000; and
c. The funding of the contract with Badger Branding for content marketing services in the amount of $107,700; and

2. Authorize the City Manager to use the TBID Fund Balance of $1,630,929 for tourism marketing expenditures in FY 2026-27 in accordance with City policy; and

3. Approve amendments to Article 7 in TBID’s Bylaws to reflect an increase in fund reserve from $100,000 to 20% of projected annual revenue; and

4. Authorize the City Manager to enter into various contracts and program expenditures for Community Promotions not to exceed the FY 2026-27 program budget of $352,000 (excludes staffing costs) based on the recommendations by the PCC;
a. This includes the funding of the contracts with the SLO Chamber of Commerce for Guest Services, Public Relations, and Cultural Arts & Community Promotions (CACP) Grant
Marketing Support in the amount of $194,250;
b. The FY 2026-27 CACP allocations in the amount of $100,000 and authorization to execute individual agreements with each grant recipient;

5 c. Additionally, authorize the City Manager or her designee to modify allowed uses of grant funding when executing contracts for the FY 2026-27 CACP grant recipients in cases where the grantee’s specific line items in their proposed marketing or advertising plan has shifted but retains its overall intended purpose; and
d. Authorize the City Manager or her designee to use discretion in accepting or rejecting submitted expenses from the FY 2026-27 CACP grant recipients, up to the approved grant amount for each recipient, while ensuring overall purpose and intent remains consistent with recommendations from the Promotional Coordinating Committee and approval by City Council.

Grantees must notify staff of any requested deviation in the use of funds in advance of the expenditure, and staff will bring any substantial deviations back to the PCC for consideration.

6.f FREEWAY MAINTENANCE AGREEMENT AND PROJECT SPECIFIC

MAINTENANCE AGREEMENT WITH THE STATE OF CALIFORNIA,

DEPARTMENT OF TRANSPORTATION

1. Adopt Resolution No.11665 (2026 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, authorizing execution of a Freeway Maintenance Agreement with Caltrans for portions of State Route 101 within the City limits”; and

2. Adopt Resolution No. 11666 (2026 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, authorizing execution of a Project-Specific Maintenance Agreement with Caltrans for portions of State Highway Route 1 within the City limits.”

6.g SELECTION OF VOTING DELEGATE AND ALTERNATES FOR THE 2026 LEAGUE OF CALIFORNIA CITIES ANNUAL CONFERENCE
Appoint Council Member Mike Boswell as the Voting Delegate and Council Member Jan Marx as Alternate Voting Delegate to vote on the City’s behalf at the Annual Business Meeting of the League of California Cities on Thursday, September 24, 2026.

6.h 2026 ANNUAL MONITORING FOR THE SAN LUIS RANCH

DEVELOPMENT AGREEMENT, MITIGATION MEASURES, AND

PROJECT CONDITIONS

6 Council Member Marx declared a conflict on this item. (Due to owning property in the development.)
Receive and file the 2026 annual monitoring report for the San Luis Ranch Development Agreement, mitigation measures, and required project conditions.

6.i 2026 ANNUAL MONITORING FOR THE AVILA RANCH DEVELOPMENT

AGREEMENT, MITIGATION MEASURES, AND PROJECT CONDITIONS
Receive and file the 2026 annual monitoring report for the Avila Ranch Development Agreement, mitigation measures, and required project conditions.

6.j CONSIDER PARTICIPATING IN THE URBAN COUNTY OF SAN LUIS

OBISPO, OVERSEEN BY THE COUNTY OF SAN LUIS OBISPO, FOR
THE 2027-2029 COMMUNITY DEVELOPMENT BLOCK GRANT

PROGRAM CYCLES

1. Adopt Resolution No 11667 (2026 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Approving the Participation in the San Luis Obispo Region Urban County, Overseen by the County of San Luis Obispo, for the 2027- 2029 Community Development Block Grant Federal Program
Cycles”; and

2. Authorize the City Manager to sign the 2027-2029 Cooperation Agreement to participate in the San Luis Obispo Region Urban County.

6.k POLICE DEPARTMENT GRANT APPLICATIONS FOR FY 2026-27

1. Authorize the Police Department to submit grant applications to the following agencies: a. California Highway Patrol Cannabis Tax Fund Grant Program in an amount of $134,200; b. COPS Hiring Program Grant in an amount of $125,000

2. If the California Highway Parol Cannabis Tax Fund grant is awarded, authorize the City Manager and Chief of Police to execute related grant documents and authorize the Finance Director to make necessary budget adjustments upon the award of the grant.

7 3. Authorize staff to suspend and remove funding for the current School Resource Officer position, due to the loss of revenue from the San Luis Coastal Unified School District.

4. Adopt Resolution 11668 (2026 Series) entitled, “A Resolution of the Council of the City of San Luis Obispo, California, accepting a grant award provided through the California Highway Patrol Cannabis Tax Fund Grant Program to increase education, prevention and enforcement programs focusing on driving under the influence of alcohol and other drugs and authorizing the City Manager and Chief of Police to execute all related grant documents”.

7. LIAISON REPORTS AND COMMUNICATIONS
Mayor Stewart
 June 30 and July 1 attended the Tribal Stewardship Convening in Sacramento
 July15 - 17 attended the Cal Cities Board meeting in Redondo Beach Vice Mayor Francis
 Attended the Special meeting on the Nacimiento Water Project  Attended the Grizzly Graduation
 Attended Pride in the Plaza and Trans in the Park
 Attended the Independence Day Celebration
 Attended Housing Trust Fund Presentation
Council Member Boswell
 Attended the June 19th Community Action Partnership Meeting  Attended the Police Promotion Celebration
 Attended the Independence Day Celebration
Council Member Marx
 Attended the Air Pollution Control District (APCD) Meeting  Attended the Police Promotion Ceremony on July 16th
Council Member Shoresman

8  Attended the July 7th Downtown Association Board Meeting  Attended the Homeless Services Oversight Committee
 Attended the Juneteenth Celebration and presented a Proclamation  Attended the Meals that Connect Celebration
 Attended the Police Promotion Ceremony
 Attended SLO Days at Cal Poly

8. ADJOURNMENT
The meeting was adjourned at 8:30 p.m. The next Regular City Council Meeting is scheduled for August 4, 2026 at 5:30 p.m. in the Council Chambers at City Hall, 990 Palm Street, San Luis Obispo.
_________________________
APPROVED BY COUNCIL: XX/XX/202X

Item 5c
Department: Administration
Cost Center: 1010
For Agenda of: 8/4/2026
Placement: Consent
Estimated Time: N/A
FROM: Greg Hermann, Deputy City Manager
Prepared By: Samantha Vethavanam, Diversity, Equity, and Inclusion Admin Specialist SUBJECT: COMMUNITY RESILIENCE CENTERS GRANT APPLICATION

RECOMMENDATION
Adopt a Draft Resolution entitled, "A Resolution of the City Council of the City of San Luis Obispo, California, approving the application for grant funds under the California Strategic Growth Council Community Resilience Centers Program" to authorize staff to apply for a Planning Grant in an amount not to exceed $500,000.(Attachment A)

POLICY CONTEXT
 Financial Management Policy Section 740 requires that Council approve any grant application over $5,000.
 On July 6, 2021, the City Council adopted the Parks and Recreation Blueprint for the Future: 2021–2041 (Master Plan and General Plan Element). The Blueprint establishes five goals that support priorities identified in previously adopted plans and sets standards for future parkland, facilities, and amenities.

Its Community Needs Assessment also documents extensive community feedback, including an identified need for additional indoor multigenerational and community center facilities. These goals and findings align with the proposed SLO Community Commons concept.
 On January 17, 2023, Council adopted the Climate Adaptation and Safety Element of the General Plan (CASE). The CASE includes program MH-1.8:

Climate Resilience Hubs, which states that the City shall "work with community organizations, faith-based organizations, and other institutions to develop a network for conveniently located Climate Resilience Hubs including a mix of public facilities, community centers, businesses, and community-oriented facilities."
 On February 20, 2024, the City Council adopted the Diversity, Equity, and Inclusion Strategic Plan which includes tactic 2.2.7 to “Contract to develop a feasibility study for a multicultural center.”
 On June 17, 2025, the City Council adopted the 2025-27 Financial Plan and identified “Open Space, Climate Action, and Resilience” as a Major City Goal (MCG). Fiscal Year (FY) 2025-27 MCG task 3 directs staff to "Strengthen community resilience through emergency preparedness, community networks,

Item 5c
and planning efforts." While applying for a community resiliency grant is not specifically spelled out via the MCG workplan, a grant to plan for the creation of a Community Resilience Center would assist the City in moving the overarching goal under MCG task 3 forward.

DISCUSSION
Background
The California Strategic Growth Council (SGC) released the Round 2 Notice of Funding Availability for the Community Resilience Centers grant program on May 29, 2026, and the application period opened on July 2, 2026. The Community Resilience Centers (CRC) program provides grants that advance the development of neighborhood resilience centers that can provide shelter and resources during climate emergencies, including extreme heat events and poor air quality days, and support community services and programming year-round, in non-emergency times.

The CRC Program provides two types of grants – Planning and Implementation.

Implementation Grants support communities that are ready to fund new construction for a CRC facility, upgrades to an existing one, or the development of programs and services offered at the site. Planning Grants help communities through the initial stages of project development, including planning and pre-development activities, community engagement and coordination, site preparation, and other activities necessary to prepare for future funding opportunities. Planning Grant awards range from $100,000 to $500,000 each for a grant term of approximately two years. Staff recommend submitting an application for a Planning Grant, alongside co-applicants, which at present include the Diversity Coalition of San Luis Obispo County. Ongoing discussions are being had with Access Central Coast, the Promotores, and The Community Foundation of San Luis Obispo County to be co-applicants as well.

The SGC anticipates that approximately $5 million in Planning Grant funding will be available for competitive awards in this current round (Round 2). The SGC requires all lead applicants to provide evidence of a passed formal resolution that includes authorization to apply for and accept a CRC Planning Grant, and authority to execute all related documents if awarded. A draft resolution is provided as Attachment A. Planning Grant applications are due on September 4, 2026.

The Community Resilience Centers program is focused on equity, community resilience, and climate resilience. This means that the grant opportunity also provides an option to conduct initial planning work and explore the creation of a blended Multicultural Center and Resilience Hub that would further City goals related to both climate resilience and diversity, equity, and inclusion, and advance adopted policies and tactics from the CASE, the Climate Action Plan, the Diversity, Equity, and Inclusion Strategic Plan, and the 2025- 27 MCG work program. The Parks and Recreation Blueprint for the Future: 2021- 2041(Master Plan and General Plan Element) also contains goals and policies that support the purpose of the grant, along with extensive community feedback gathered through its needs assessment and implementation guidance that could inform the planning process. Most notably, Goal 1, “Build Community and Neighborhoods,” and

Item 5c
Section 1.5, “Park Amenity Standards,” identify the need for additional indoor facilities, including multigenerational and community centers, which would be explored through the proposed planning process.

The City’s proposed planning grant application would seek funding for a scope of work that includes formalizing a shared governance structure, identifying and evaluating potential project sites, conducting fiscal analyses and feasibility studies, and facilitating meaningful community engagement.

As the recommendation is for the City to apply for a Planning Grant, the grant would fund a process to convene stakeholders and consultants to brainstorm, conceptualize, and analyze a potential facility. The specifics (including the who, what, where, how) are still yet to be determined. Initial outreach to community partners, including the Diversity Coalition of San Luis Obispo County, The Community Foundation’s One Community Fund, 805 UndocuFund, the yak titʸu titʸu yak tiłhini Northern Chumash Tribe, the County of San Luis Obispo, Access Central Coast, and the Community Action Partnership of San Luis Obispo County point to strong stakeholder interest in the concept, which would be subject to change based on the outcomes of the planning process. Internal staff have also been supportive of the effort, including Parks & Recreation, Public Works, Sustainability & Natural Resources, the Fire Department, and the Community Development Department. Currently, the Parks and Recreation Commission is utilizing the community assessment priorities contained within the P&R Blueprint to identify the future development of a new or remodeled community center with a focus on multigenerational and multi-cultural programming.

A Multicultural Center and Resilience Hub could serve as a shared home for local organizations focused on supporting specific cultural, ethnic, identity-based, and multigenerational communities. These organizations could provide regular programming, services, and opportunities for community connection. During non-emergency operations, the facility could offer nonprofit office space, meeting and event rooms, a commercial kitchen, childcare services, and other shared community resources. When activated during an emergency, the facility could provide a safe and accessible location equipped with backup power, Wi-Fi, air conditioning, air purification systems, food distribution capabilities, and other essential services.

Based on already used and effective operating models, the City would operate and manage the Multicultural Center and Resilience Hub and establish agreements with participating community organizations. These agreements could provide organizations with dedicated workspaces and priority access to reserve shared meeting rooms and event spaces for programming, services, and community gatherings. The facility is also anticipated to include its own conference room or flexible event space that could support both partner-led activities and broader community use. Specific operating responsibilities, space-use agreements, scheduling procedures, and other management considerations would be developed through the planning process.

Item 5c
This recommended application follows a previous attempt to obtain funding from a CRC Planning Grant. After Council approval in September 2023, the City along with its coapplicants, the Diversity Coalition of San Luis Obispo County, the Promotores, and The Community Foundation’s One Community Fund (then called San Luis Obispo County UndocuSupport), applied for a Round 1 CRC Planning Grant. While the City scored high, it was ultimately not selected for funding. If authorized by the City Council, staff would resubmit a refined version of the Round 1 proposal, building on that application’s strong evaluation scores while incorporating feedback and enhancements to strengthen the application and improve its competitiveness for funding.

If successful, the City, alongside the list co-applicants on the grant, supporting partners, and community members would participate in a community driven planning process to advance a shared Multicultural Center facility that could operate as a Resilience Hub during times of emergencies. Should the Planning Grant point to a feasible next step, the City and its partners could consider applying for additional rounds of funding for an Implementation Grant.

Previous Council or Advisory Body Action
The topic of a Multicultural Center and/or Resilience Hub has been presented to Council on numerous occasions including:
 On June 1, 2021, City Council adopted the 2021-23 Financial Plan that included Diversity Equity and Inclusion MCG task 2.7.e, to “support feasibility study for Multicultural Center; provide City liaison/staff support”.  On July 6, 2021, City Council adopted the Parks and Recreation Blueprint for the Future: 2021-2041(Master Plan and General Plan Element) that included five goals intended to support and advance goals and programs identified in previously adopted plans, while also identifying standards for future parkland and amenities in the City through a Community Needs Assessment which are in alignment with the goals on the Multicultural Center and/or Resilience Hub concept.
 On January 17, 2023, Council adopted the City’s Climate Adaptation and Safety Element including program MH-1.8: Climate Resilience Hubs, which states that the City shall “work with community organizations, faith-based organizations, and other institutions to develop a network for conveniently located Climate Resilience Hubs including a mix of public facilities, community centers, businesses, and community-oriented facilities.”
 On June 6, 2023, Council adopted the 2023-25 Financial Plan which included:
o Diversity Equity and Inclusion MCG task 2.6.d to “Explore and develop shared multicultural programming, activities, and events with Cal Poly, Cuesta College, and Non‐profit partners through a pilot and/or pop-up multicultural center experience.”
o Climate Action MCG task 4.4.g to “monitor funding sources and if feasible pursue a Climate Resilience Hub Planning Grant with community partners, as called for in CASE program MH-1.8.”

Item 5c
 On September 5, 2023, Council adopted a resolution to approve the then application for grant funds from the California Strategic Growth Council Community Resilience Centers Program and authorized staff to apply for a Planning Grant in an amount not to exceed $500,000.
 On February 20, 2024, Council adopted the Diversity, Equity, and Inclusion Strategic Plan which includes tactic 2.2.7 to “Contract to develop a feasibility study for a multicultural center.”
 On June 17, 2025, Council adopted the 2025-27 Financial Plan which included Open Space, Climate Action, and Resilience MCG task 3 to "Strengthen community resilience through emergency preparedness, community networks, and planning efforts."
Public Engagement
The grant application process, as well as any planning activities funded through a grant award, will involve substantial participation from community members and partners. In addition to the engagement already completed with the nonprofit organizations and internal departments identified above, staff will engage the Promotores, the San Luis Obispo Climate Coalition, and other community stakeholders in the coming weeks.

Staff will also leverage findings from the Parks and Recreation Blueprint needs assessment, which includes extensive community feedback regarding the facilities, programs, services, and amenities residents need and would like to see in the City. This existing data will help inform the application and will be considered alongside additional targeted outreach conducted with community partners before the application is submitted.

Together, these efforts will help ensure the proposed concept reflects both previously identified community priorities and the current needs of the people and organizations it is intended to serve.

The Human Relations Commission will receive updates regarding the City’s intent to apply for a Community Resilience Center Planning Grant in partnership with community organizations, as well as regular updates as the process progresses. The Parks and Recreation Commission will also be engaged when appropriate, particularly as the concept builds upon community priorities identified through the Blueprint. If the City is awarded grant funding, these groups, along with additional community members and stakeholders, will play a significant role in the continued outreach, engagement, and planning process.

CONCURRENCE
Staff from the Fire Department, Office of Sustainability and Natural Resources, Public Works Department, Parks and Recreation Department, and Community Development Department concur with the recommendation presented in this Council Agenda Report.

Item 5c

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to the recommended action in this report, because the action does not constitute a “project” under the CEQA guidelines section 15378.

FISCAL IMPACT
Budgeted: No Budget Year: 2026-27
Funding Identified: Yes
Fiscal Analysis:

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

Total
Should the Strategic Growth Council Community Resilience Centers Planning Grant be successfully awarded at the requested funding level, the City would receive a reimbursable grant for an amount not to exceed $500,000, with no required match. Staff would return to Council at a future meeting to request appropriation of the awarded funds.

ALTERNATIVES

1. Council could direct staff not to submit a grant application. Council may direct staff to not submit a grant application. If this request is not approved, staff will cease work on the current grant application. The City could then consider a multicultural center and/or climate resilience center in the future if another suitable funding opportunity becomes available or through a future City planning and budget process.

However, staff cannot predict when a similar grant opportunity may become available.

Regardless, staff would continue exploring other potential funding sources and return to Council for direction and approval before advancing a future proposal.

ATTACHMENTS
A - Draft Resolution Approving the Community Resilience Centers Planning Grant Application

R ______
RESOLUTION NO. _____ (2026 SERIES)

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

OBISPO, CALIFORNIA, APPROVING THE APPLICATION FOR GRANT

FUNDS UNDER THE CALIFORNIA STRATEGIC GROWTH COUNCIL

COMMUNITY RESILIENCE CENTERS PROGRAM
WHEREAS, the California Strategic Growth Council’s Community Resilience Centers Program provides competitive funding to plan and develop neighborhood-level facilities that offer year-round services and programming, while also providing shelter and essential resources during climate-related and other emergencies; and WHEREAS, for Fiscal Year 2026–27, funding has been made available for the Community Resilience Centers Program through the Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024, and the California Strategic Growth Council is responsible for administering the grant program and establishing the necessary procedures; and
WHEREAS, said procedures established by the California Strategic Growth Council require a formal resolution authorizing the approval of Lead Applicant to apply, accept, and execute documents (if awarded) by the Lead Applicant’s governing board before submission of said application(s) to the State; and WHEREAS, per the guidelines of the grant program, the City of San Luis Obispo is identified as a city eligible for funding; and
WHEREAS, Community Resilience Centers grantees will enter into a grant agreement with the State of California and be responsible for compiling and submitting all invoices and reporting documents; and
WHEREAS, the City of San Luis Obispo, if selected will enter into an agreement with the State of California to carry out the Community Resilience Centers Grant; and WHEREAS, the Strategic Growth Council adopted a timeline indicating the full application is due September 4, 2026; and
WHEREAS, on September 5, 2023, City Council adopted a resolution to approve an application for grant funds from Round 1 of the California Strategic Growth Council Community Resilience Centers Program and authorized staff to apply for a Planning Grant in an amount not to exceed $500,000; and
WHEREAS, the City of San Luis Obispo was not awarded funds under Round 1; and
WHEREAS, in February 2024, Council adopted the Diversity, Equity, and Inclusion Strategic Plan which includes tactic 2.2.7 to “Contract to develop a feasibility study for a multicultural center;” and

Resolution No. _____ (2026 Series) Page 2
R ______
WHEREAS, in June 2025, City Council adopted the 2025-27 Financial Plan, which includes Open Space, Climate Action, and Resilience Major City Goal task 3 to "Strengthen community resilience through emergency preparedness, community networks, and planning efforts"; and
WHEREAS, on July 6, 2021, the City Council adopted the Parks and Recreation Blueprint for the Future: 2021–2041 (Master Plan and General Plan Element), which incorporates community input gathered through a comprehensive Community Needs Assessment and establishes goals, policies, and standards for future parkland, recreational facilities, and amenities; and
WHEREAS, Goal 1, “Build Community and Neighborhoods,” and Section 1.5, “Park Amenity Standards,” identify a need for additional indoor facilities, including multigenerational and community centers, which aligns with the proposed SLO Community Commons concept and its intended multicultural, multigenerational, and community-serving functions; and
WHEREAS, the City of San Luis Obispo and local nonprofit co-applicants intend to submit an application for a Community Resilience Centers Planning Grant in an amount not to exceed $500,000 to support community engagement, development of a shared governance structure, site identification and evaluation, fiscal and feasibility analyses, and other planning and predevelopment activities; and
WHEREAS, these activities would explore the creation of a Multicultural Center and Resilience Hub, envisioned as a shared facility offering year-round multicultural and multigenerational programming, community services, meeting and event spaces, nonprofit workspaces, and essential resources during climate-related and other emergencies; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows:

SECTION 1. Application Approval. The City Council approves the City of San Luis Obispo to serve as the Lead Applicant for the Planning Grant application due by September 4, 2026.

SECTION 2. City Manager Authorization. The City Council authorizes the City Manager, or designee, to execute and submit all documents including, but not limited to applications, agreements, and payment requests which may be necessary for the grant.

SECTION 3. Future City Council Actions. If grant funding is awarded, staff shall return to the City Council before expending the funds to request the necessary budget appropriation. Staff shall also obtain any additional authorization required under the City’s purchasing policies to solicit and contract for consultant services supporting the grantPage 28 of 1065 Resolution No. _____ (2026 Series) Page 3
R ______
funded planning process, including approval of a Request for Proposals and professional services agreement, as applicable.

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. ___________________________
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: August 4, 2026
TO: Mayor and Council
FROM: Timmi Tway, Community Development Director
Prepared By: Ethan Estrada, Assistant Planner
VIA: Whitney McDonald, City Manager
SUBJECT: ITEM #5d – PROHOUSING INCENTIVE PROGRAM FUNDING

DISTRIBUTION
Staff received a request from HASLO to update the name of their project from “Monterey Crossing Senior Project” to “Balay Ko on Monterey” in Exhibit A of the Draft Resolution (Attachment A) for this item. The project name was recently changed to Balay Ko on Monterey following a generous private donation made to the project. Updating the Draft Resolution as shown below will ensure consistency moving forward as future reports will be using this name.

Staff recommend that Exhibit A of the Draft Resolution be amended to read as follows:

Exhibit A
Staff Recommended AHF Disbursement
No. Applicant Project
Funding
Recommended
1 Smartshare Housing
Solutions
Waterman Village Project - Development of
affordable housing community serving low to
very-low incomes.
$150,000
2 Housing Authority of
the City of San Luis
Obispo (HASLO)
Balay Ko on Monterey (formerly known as
Monterey Crossing Senior Housing Project) -
Development of 55 affordable units serving lowincome seniors. $150,000
3 Transitions Mental
Health Association
(TMHA)
Supportive Housing Project - Development of a 3-
bedroom ADU in an existing residential property
with permanent supportive housing.
$50,000
TOTAL $350,000

Item 5d
Department: Community Development
Cost Center: 4007
For Agenda of: 8/4/2026
Placement: Consent
Estimated Time: N/A
FROM: Timmi Tway, Community Development Director
Prepared By: Ethan Estrada, Assistant Planner
SUBJECT: AUTHORIZE DISBURSEMENT OF PROHOUSING INCENTIVE

PROGRAM GRANT FUNDS FROM THE AFFORDABLE HOUSING FUND

RECOMMENDATION
Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, authorizing the disbursement of Prohousing Incentive Program Grant Funds from the Affordable Housing Fund”.

POLICY CONTEXT
The Prohousing Incentive Program (PIP) provides funding to facilitate below-market-rate housing development projects. The use of these funds and their distribution to the projects discussed below is consistent with City policies established in the General Plan Housing Element (HE), including:

HE Program 6.17. Financially assist in the development of 20 housing units per year that are affordable to extremely low, very low-, low-, and moderate-income households during the planning period using State, Federal, and local funding sources, with funding priority given to projects that result in the maximum housing benefits for the lowest household income levels.

HE Program 8.20. Actively seek and collaborate with non-profit housing providers to (jointly) apply for two revenue sources each year during the planning period for State, Federal, and local funding sources to financially assist with the development of housing for persons with developmental disabilities.

DISCUSSION
Background
The California Prohousing Designation Program (PDP) was established in accordance with Assembly Bill 101 and is administered by the California Department of Housing and Community Development (HCD). The PDP creates incentives for jurisdictions that are

Item 5d
compliant with housing laws, housing element requirements, and have enacted prohousing local policies that go beyond existing law.

On February 1, 2024, the City was designated a Prohousing Jurisdiction under the PDP by HCD. This designation allows a competitive advantage for critical affordable housing and infrastructure grant programs. It also provides eligibility for California’s Prohousing Incentive Program (PIP) for use towards planning and implementation activities related to housing and community development. The PDP is funded through Chapter 364, Statutes of 2017, Senate Bill 2 which established the Building Homes and Jobs Trust Fund (Fund). The Fund utilizes real estate transaction fees collected at a county level in all counties, at the time of recording documents for every real estate instrument, to establish a permanent source of funding. Five percent of annual collections are deposited in a fund to be used for an incentive program. The PIP awards funding based on the Eligible Applicant’s PDP Score1 and according to geographic area.

On April 2, 2024, Council adopted Resolution No. 11489, authorizing the City Manager to apply for PIP grant funds, and upon application approval, to enter into, execute, and deliver on a standard agreement with the State for the amount of $750,000. The City was approved for PIP grant funding and entered into a Standard Agreement (Attachment B) with HCD on December 18, 2024, for the maximum $750,000. This agreement stipulated that the funds would be issued to the City for distribution to the following projects and at the following amounts:
 People’s Self-Help Housing, Calle Joaquin Homekey Project: $400,000  Smartshare Housing Solutions, Waterman Village Project: $150,000  HASLO, Monterey Crossing Senior Project: $150,000
 Transitions Mental Health Assoc., Supportive Housing Project: $50,000 Previously, on April 16, 2024, Council approved an amendment2to Resolution No. 11439, originally adopted on July 24, 2023, that authorized the submittal of a joint application for Homekey Round 3 grant program funds in conjunction with People’s Self-Help Housing for the Calle Joaquin Homekey Project. The amendment included, among other items, edits to address a request by HCD to update the funding sources reported in the resolution which included adding the $400,000 committed by the City from the Affordable Housing Fund. This funding had been allocated to the Calle Joaquin Homekey Project to provide additional local match along with other generous contributions made at the time.

As this funding had already been issued to the project prior to receiving the PIP grant, on July 9, 2025, the City submitted a Request for Reimbursement of Funds (Attachment C) to HCD for the $400,000 allocated to the Calle Joaquin Homekey Project. This

1 As codified in the California Code of Regulations Title 25 Housing and Community Development, Division 1, Chapter 6, Subchapter 6.6, Sections 6600 through 6608, Consecutive Prohousing Designation Program. 2 Item 6h. Approve Cooperative Agreement with PSHH for Calle Joaquin Homekey Project and amendments to Resolution 11439 (2023 Series)

Item 5d
reimbursement was approved and the funds have been received. The remaining PIP grant funding of $350,000 (from the original $750,000 award) was received in March and April 2026 and are ready for disbursement.

Funding Recommendations
Staff recommends that Council authorize the disbursement of the remainder of the PIP grant funds housed in the Affordable Housing Fund as shown below and consistent with the Standard Agreement (Attachment B). PIP grant funds must be used for eligible activities outlined by HCD, which include predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, and rental housing that is affordable to extremely low-, very low-, low-, and moderate-income households.

As discussed above, the projects below qualify for PIP grant funding and were identified in the standard agreement with HCD as recipients of said funding at the listed amounts.

No. Applicant Project
Funding
Recommended
1 Smartshare Housing
Solutions
Waterman Village Project - Development of
affordable housing community serving low- to
very low-income households.
$150,000
2 Housing Authority of
the City of San Luis
Obispo (HASLO)
Monterey Crossing Senior Housing Project -
Development of 55 affordable units serving
low-income seniors.
$150,000
3 Transitions Mental
Health Association
(TMHA)
Supportive Housing Project - Development of
a 3-bedroom ADU in an existing residential
property with permanent supportive housing.
$50,000
TOTAL $350,000
Previous Council or Advisory Body Action
On June 20, 2023, the City Council approved Resolution No. 11432 (2023 Series) authorizing submittal of an application for a California Prohousing Designation.

On April 2, 2024, the City Council approved Resolution No. 11489 (2024 Series) authorizing and directing the City Manager to submit an application to the Department of Housing and Community Development for Prohousing Incentive Program grant funding in a total amount not to exceed $750,000, and upon application approval, to enter into, execute, and deliver on behalf of the City, a State of California Agreement (Standard Agreement) for the amount of $750,000 and any and all other documents required or deemed necessary or appropriate to evidence and secure the PIP grant.

On April 16, 2024, the City Council approved amendments to Resolution No. 11439 (2023 Series) originally approved on July 24, 2023, that authorized the joint application to, and participation in, the Homekey Program for the Calle Joaquin Homekey Project. These amendments included an update to the funding resources listed in the resolution, adding

Item 5d
the City’s Affordable Housing Fund contribution of $400,000 that was reimbursed with a portion of the PIP grant award.

Public Engagement
This item is on the agenda for the August 4, 2026, City Council meeting and will follow all the required posting and notification standards. Public comment on the item can be provided to the City Council through written correspondence prior to the meeting and through public testimony at the meeting.

CONCURRENCE
The Community Development Department, City Manager, and City Attorney’s Office have reviewed the proposed disbursement of PIP grant funding from the Affordable Housing Fund and concur with this report.

ENVIRONMENTAL REVIEW
The proposed report contemplates the disbursement of state incentive funds, which is not a project under CEQA, and is therefore exempt from CEQA review (CEQA Guidelines Section 15378).

FISCAL IMPACT
Budgeted: Yes Budget Year: 2026-27
Funding Identified: Yes
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $0 $0 $0 $0
State
Federal
Fees
Other: AHF $350,000 $350,000 $0
Total $350,000 $350,000 $0 $0
Total funding available for project awards is $350,000 of grant funding that has already been received. Providing the requested funds depletes the current award of PIP grant funds.

ALTERNATIVES
Council could elect to not disburse these funds. Should Council pursue this option, the City would have to amend or void the Standard Agreement that specifically identifies

Item 5d
the three projects discussed in this report. Additionally, any project(s) that the Council would want to disburse these funds to would have to qualify for PIP grant funds (verified by staff and HCD).

ATTACHMENTS
A - Draft Resolution authorizing the disbursement of PIP funds B - PIP Standard Agreement
C - PIP Request for Reimbursement of Funds

R ______
RESOLUTION NO. _____ (2026 SERIES)

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

OBISPO, CALIFORNIA, AUTHORIZING THE DISBURSEMENT OF

PROHOUSING INCENTIVE PROGRAM GRANT FUNDING FROM THE
CITY’S AFFORDABLE HOUSING FUND
WHEREAS, pursuant to Health and Safety Code 50470 et. Seq, the California Department of Housing and Community Development (Department) is authorized to issue Guidelines as part of an incentive program (hereinafter referred to as the Prohousing Incentive Program or “PIP”); and
WHEREAS, on April 2, 2024, the City Council of the City of San Luis Obispo authorized and directed the City Manager to submit a PIP grant application package (“Application”) to the Department to apply for the PIP grant funds in a total amount not to exceed $750,000, and upon approval by the Department, to enter into, execute, and deliver on behalf of the Applicant, a State of California Agreement (Standard Agreement) for the amount of $750,000 and any and all other documents required or deemed necessary or appropriate to evidence and secure the PIP grant, the Applicant’s obligations related thereto, and all amendments thereto; and WHEREAS, on December 18, 2024, the City Manager of the City of San Luis Obispo entered into a Standard Agreement with the Department for the amount of $750,000.

WHEREAS, on July 9, 2025, the City of San Luis Obispo submitted a Request for Reimbursement of Funds to the Department and was approved to allocate $400,000 of the $750,000 PIP grant award to the Affordable Housing Fund (AHF) to replenish the $400,000 that had been contributed by the City from the AHF to the Calle Joaquin Homekey Project (Resolution No. 11439).

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

SECTION 1. Environmental Determination. The disbursement of Prohousing Incentive Program grant funds from the City’s Affordable Housing Fund is not a project, as defined in California Environmental Quality Act (CEQA) Guidelines § 15378, and is not subject to environmental review.

SECTION 2. Action. The City Council does hereby authorize the City Manager to disburse the remaining PIP grant funds totaling $350,000 from the Affordable Housing Fund as shown in Exhibit A.

SECTION 3. Community Development Director Authority. The Community Development Director is hereby authorized to act on behalf of the City in connection with the disbursement of PIP grant funding via the City’s Affordable Housing Fund.

Resolution No. _____ (2026 Series) Page 2
R ______
Upon motion of Council Member ___________, seconded by Council Member ___________, and on the following roll call vote:

AYES:

NOES:

ABSENT:

The foregoing resolution was adopted this _____ day of _______________ 2026. ___________________________
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

Resolution No. _____ (2026 Series) Page 3
R ______
Exhibit A
Staff-Recommended PIP Grant Disbursement
No. Applicant Project
Funding
Recommended
1 Smartshare Housing
Solutions
Waterman Village Project - Development of
affordable housing community serving low- to
very low-income households.
$150,000
2 Housing Authority of
the City of San Luis
Obispo (HASLO)
Monterey Crossing Senior Housing Project -
Development of 55 affordable units serving lowincome seniors.$150,000 3 Transitions Mental
Health Association
(TMHA)
Supportive Housing Project - Development of a 3-
bedroom ADU in an existing residential property
with permanent supportive housing.
$50,000
TOTAL $350,000

Type text here
Edona Evans
12/18/2024

City of San Luis Obispo
23-PIP-18487

EXHIBIT A
Prohousing Incentive Program (PIP)
NOFA Date: 01/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024

AUTHORITY, PURPOSE AND SCOPE OF WORK

1. Authority
Pursuant to Health and Safety Code section 50470, subdivision (b)(2)(C)(i), the State of California Department of Housing and Community Development (the “Department” or “State”) has established the Prohousing Incentive Program (“PIP” or the “Program” as defined in Attachment C of the Guidelines) for Local Governments and Localities. This Standard Agreement, along with all its exhibits (the “Agreement”), is entered into under the authority of, and in furtherance of, the purpose of the Program. Pursuant to Health and Safety Code Section 50470, subdivision (d) (“PIP Statute”), the Department has issued the Prohousing Incentive Program Guidelines and Notice of Funding Availability (“NOFA”) dated January 23, 2024, to govern administration of the fund and carry out the Program.

2. Purpose
In accordance with the authority cited above, the Grantee has been awarded financial assistance in the form of a grant from the Program. The Department has agreed to make the grant to provide financial assistance to accelerate housing production for housing related projects and programs that assist in addressing the unmet housing needs of their local communities pursuant to the terms of the PIP Statute, Guidelines and NOFA, and Permanent Local Housing Allocation (PLHA) Statute and Guidelines, and this Agreement. By entering into this Agreement and thereby accepting the award of the Program funds, the Grantee agrees to comply with the terms and conditions of the PIP Statute, Guidelines and NOFA, and PLHA Statute and Guidelines, and this Agreement, the representations contained in the application, and the requirements of the authority cited above. Based on the representations made by the Grantee, the State shall provide a grant in the amount shown in Exhibit B, Section 2, Grant and Reimbursement Limit.

3. Definitions
Terms not otherwise defined herein shall have the same meaning as definitions set forth in Health and Safety Code Section 50470 and Attachment C of the PIP Guidelines and Definition Section (Section 101) of the PLHA Guidelines.

4. Scope of Work

City of San Luis Obispo
23-PIP-18487

EXHIBIT A
Prohousing Incentive Program (PIP)
NOFA Date: 01/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024
The “Scope of Work” or “Work” for this Agreement shall be used to accelerate housing production for housing related projects and programs that assist in addressing the unmet housing needs of their local communities. Uses shall consist of one or more of the eligible uses described in Guidelines set forth in the PIP Application, Exhibit E of this Agreement and any other supplemental forms prescribed by the Department in full accordance with this Agreement, PIP Guidelines and PLHA Guidelines Section 301.

Where eligible uses in PIP Guidelines Section 601 differ from PLHA Guidelines Section 301, the Department will defer to PLHA Guidelines except for eligible uses 7 (accessibility modifications) and 10 (fiscal incentives).

A Local government that receives an allocation shall use no more than five percent of the allocation for costs related to the administration of the Activity(ies) for which the allocation was made. Staff and overhead costs directly related to carrying out the eligible activities described in the PIP and PLHA Statute and Guidelines are “activity costs” and not subject to the cap on “administrative costs.” A Local government may share any funds available for administrative costs with entities that are administering its allocation.

The Scope of Work may in no event be revised or altered without the Department’s prior written consent and approval, and such consent and approval is within the Department’s sole and absolute discretion. The Department reserves the right, but assumes no obligation, to review and approve any and all Work.

5. Department Contract Coordinator
The Department’s Contract Coordinator of this Agreement is the Housing Policy Development Senior Program Manager, or the Manager’s designee. Unless otherwise informed, any notice, report, or other communication required by this Agreement shall be sent by email to the Department Contract Coordinator at [email protected].

6. Grantee Contract Coordinator
The Grantee’s Contract Coordinator for this Agreement is the Authorized Representative listed below.

Authorized Representative
Name:

Timothea Tway
Authorized Representative
Title:

Director of Community Development Department
Agency Name: City of San Luis Obispo

City of San Luis Obispo
23-PIP-18487

EXHIBIT A
Prohousing Incentive Program (PIP)
NOFA Date: 01/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024
Address: 990 Palm Street
San Luis Obispo, CA 93401
Phone Number: (805)781-7187
Email Address: [email protected]

City of San Luis Obispo
23-PIP-18487

EXHIBIT B
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024

BUDGET DETAIL AND PAYMENT PROVISIONS

1. Application for Funds
A. Grantee has submitted to the Department an Application for a Grant under the Program. The Department is entering into this Agreement on the basis of, and in reliance on fact, information, assertions and representations contained in the Application and any subsequent modifications or additions thereto approved by the Department. The Application and any approved modifications and additions thereto are hereby incorporated into this Agreement.

B. The Grantee warrants that all information, facts, assertions, and representations contained in the Application and approved modifications and additions thereto are true, correct, and complete to the best of the Grantee’s knowledge. In the event that any part of the Application and any approved modification and addition thereto is untrue, incorrect, incomplete, or misleading, in such a manner that would substantially affect the Department's approval, disbursement, reimbursement, or monitoring of the funding and the grant or activities governed by this Agreement, the Department may declare a breach hereof and take such action or pursue such remedies as are provided for breach hereof.

2. Grant and Reimbursement Limit
The Department’s decision to approve or deny an application or request for funding pursuant to the Program, and its determination of the amount of funding provided, shall be final. The maximum total amount granted and disbursable to the Grantee pursuant to this Agreement shall not exceed $750,000.00.

3. Grant Timelines
A. This Agreement is effective upon approval by all parties and the Department, which is evidenced by the date signed by the Department on page one, Standard Agreement, STD 213 (the “Effective Date”).

B. The grant term begins on the day the Department and the grantee have fully executed the Standard Agreement as described in Exhibit D(1).

C. All reimbursement requests for Grant funds must be submitted to the Department no later than March 30, 2026.

D. Upon completion of all deliverables within the Standard Agreement and prior to processing final invoicing, the awardee shall submit a Close Out Report.

City of San Luis Obispo
23-PIP-18487

EXHIBIT B
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024
E. The Grantee shall deliver to the Department all supporting documents of Work performed on or before March 30, 2026, to ensure meeting the June 30, 2026, expenditure deadline. Under special circumstances, as determined by the Department, the Department may modify the March 30, 2026, reimbursement deadline but may not go beyond the expenditure deadline.

F. It is the responsibility of the Grantee to monitor the project and timeliness of requests for reimbursement before the expenditure deadline.

G. The grant term ends on June 30, 2027.

4. Conditions of Reimbursement
A. The Department shall not award or disburse funds unless it determines that the grant funds shall be expended in compliance with the terms and provisions of the Guidelines, the NOFA, and this Agreement.

B. Grant funds shall only be used by the Grantee for project activities approved by the State that involve the preparation and adoption of project activities as stated in the Scope of Work.

C. A Grantee that receives funds under this Program may use a subcontractor. The subcontractor shall provide for compliance with all the requirements of the Program. The subcontract shall not relieve the Grantee of its responsibilities under the Program.

D. After the contract has been executed by the Department and all parties, approved and eligible costs for eligible activities may be reimbursed for the project(s) upon completion of deliverables as set forth in the PIP Application, Exhibit E of this Agreement, and any other supplemental forms prescribed by the Department and subject to the terms and conditions of this Agreement.

Applicants may request disbursements in advance of activity initiation under unique and/or unusual circumstances including but not limited to feasibility, lack of resources, or unavailability of funds.

E. Only approved and eligible costs incurred for work after the NOFA date, continued past the date of execution and acceptance of the Standard Agreement and completed during the grant term until the expenditure deadline will be reimbursable.

F. Approved and eligible costs incurred prior to the NOFA date are ineligible, unless otherwise approved by the Department.

City of San Luis Obispo
23-PIP-18487

EXHIBIT B
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024
G. The Contractor may request that eligible uses or grant funds may be revised without an amendment to this Agreement. This request must be made in writing to HCD and shall be effective only upon written HCD approval. HCD’s decision to approve or deny any such request shall be final.

5. Performance
The Grantee shall take such actions, pay such expenses, and do all things necessary to complete the scope of work and within the terms and conditions

6. Fiscal Administration
A. The Grantee is responsible for maintaining records which fully disclose the activities funded by the PIP grant. Adequate documentation for each reimbursable transaction shall be maintained to permit the determination, through an audit if requested by the State, of the accuracy of the records and the allowability of expenditures charged to Prohousing Incentive Program grant funds. If the allowability of expenditure cannot be determined because records or documentation are inadequate, the expenditure may be disallowed, and the State shall determine the reimbursement method for the amount disallowed. The State’s determination of the allowability of any expense shall be final.

B. Prior to receiving grants, the Grantee shall submit the following documentation:
1) Government Agency Taxpayer ID Form (GovTIN; Fi$cal form). 2) A Request for Funds on a form and manner provided by the Department; and
3) Any and all additional documentation that may be requested by the Department in the prescribed form and manner.

C. Grant fund payment will be made on a reimbursement basis. Project invoices will be submitted to the Department by the grantee on a quarterly basis or, if earlier, upon completion of deliverables.

D. The Department recognizes that budgeted deliverable amounts are based upon estimates. Grantees may request, in writing, a budget adjustment across deliverables subject to written approval by the Department, as long as the total budget does not exceed the maximum amount awarded to the Grantee.

E. Work must be completed prior to requesting reimbursement, unless otherwise approved by the Department.

City of San Luis Obispo
23-PIP-18487

EXHIBIT B
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024
F. Grant funds cannot be reimbursed until this Standard Agreement has been fully executed.

G. The Grantee will be responsible for compiling all invoices and supporting documentation and reporting documents. Invoices must be accompanied by reporting materials where appropriate. Invoices without the appropriate reporting materials will not be paid. Failure to provide requested documentation to HCD could result in exclusion from consideration for grants in future program years.

H. Supporting documentation may include but is not limited to purchase orders, receipts, progress payments, subcontractor invoices, timecards, or any other documentation as deemed necessary by the Department to support the reimbursement to the Grantee for expenses in accordance with the Grantee’s PIP Application and the PIP Guidelines.

I. The Grantee will submit documentation to the Department detailing actual costs incurred, which must be based on clear and completed objectives and deliverables as outlined in the PIP Application, Exhibit E of this Agreement, and any other supplemental forms prescribed by the Department J. In unique and/or unusual circumstances, the Department may consider alternative arrangements (e.g., disbursements in advance of activity initiation) to reimbursement and payment methods. Unusual circumstances include but are not limited to feasibility, unavailable funds or lack of resources and substantial progress in expenditure.

K. The Department may withhold Grant funds until the grant terms have been fulfilled.

L. The Department may withhold eligible Program Grants in future program years until terms of this Agreement have been fulfilled to the satisfaction of the Department.

7. Budget Contingency Clause
A. The Department’s provision of funding to Grantee pursuant to this Agreement is contingent on the continued availability of PIP funds and continued state authorization for PIP activities. The Department’s provision of funding is subject to amendment or termination due to lack of funds or proper authorization. This Agreement is subject to written modification or termination, as necessary, by the Department in accordance with requirements contained in any future state legislation and/or regulations. If funding for any fiscal year is reduced or deleted

City of San Luis Obispo
23-PIP-18487

EXHIBIT B
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024
for purposes of this program, the Department shall have the sole discretion to cancel this Agreement without cause, no liability occurring to the Department, or amend the current Agreement and amount allocated to Grantee.

City of San Luis Obispo
23-PIP-18487

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024

PIP TERMS AND CONDITIONS

1. Effective Date, Commencement of Work
This Agreement is effective upon the date of the Department representative’s signature on page one of the full executed Standard Agreement, STD 213. Grantee agrees that work under this Agreement shall not commence until execution of the STD 213, (the “Effective Date”).

2. Strict Compliance
Grantee will strictly comply with the terms, conditions and requirements of the PIP Statute, Guidelines and NOFA, and PLHA Statute and Guidelines, and this Agreement.

3. Contractor’s Application for Funds
A. Grantee has submitted to the Department an Application for a Grant under the Program.

B. Grantee warrants that all information, facts, assertions and representations contained in the Application and approved modifications and additions thereto are true, correct, and complete to the best of Grantee’s knowledge.

4. Eligible Activities
A. Grant funds awarded to the Grantee and expended by either the Grantee or any entity to which Grantee awards funds shall be used for the eligible activities set forth in Exhibit A(4). The following additional requirements shall apply:

B. Each Grantee shall submit a Plan contained in Exhibit E detailing:
1) The manner in which allocated funds will be used for eligible activities. 2) A description of how the Plan is consistent with the programs set forth in the Local government’s Housing Element.
3) The following for each proposed Activity:
a) A description of each proposed Activity and the percentage of funding allocated to it.
b) A description of major steps/actions and a proposed schedule required for the implementation and completion of the Activity.

City of San Luis Obispo
23-PIP-18487

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024
c) Where applicable, the period of affordability and level of affordability for each Activity. Rental Projects are required to have affordability periods of at least fifty-five years.

C. If funds are used for the acquisition, construction, or rehabilitation of for-sale housing projects or units within for-sale housing projects, the grantee shall record a deed restriction against the property that will ensure compliance with one of the following requirements if the property is no longer the primary residence of the homeowner due to sale, transfer or lease, unless it is in conflict with the requirements of another public funding source or law:
1) PIP loan and any interest thereon shall be reused consistent with the Eligible Activities specified in Exhibit A(4); or,
2) The initial owner and any subsequent owner shall sell the home at an Affordable housing cost to a qualified Lower-Income or ModerateIncome household; or, 3) The homeowner and the Local government shall share the equity in the unit pursuant to an equity-sharing agreement. The grantee shall reuse the proceeds of the equity-sharing agreement consistent with the Eligible Activities specified in Exhibit A(4).

D. If funds are used for the development of an affordable rental housing project, and the Local government makes the PIP assistance in the form of a loan to the Sponsor of the project, the loan shall be evidenced through a Promissory Note secured by a Deed of Trust.

E. If funds are used as a loan, Grantees are required to implement a program income reuse plan describing how repaid loans and any interest thereon shall be reused for Eligible Activities specified in Exhibit A(4).

5. Scope of Work Revisions and Terms/Amendments
A. Adjustments to the terms within this Agreement must be completed as a contract amendment. Contract amendments must be approved by the Department prior to implementation. If approved, contract amendments shall automatically be deemed a part of, and incorporated into, this Agreement. Approval shall be provided in writing, as appropriate. Contract amendments shall include but not be limited to:
1) Changes in the total grant amount;

City of San Luis Obispo
23-PIP-18487

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024
2) Changes in Payee(s);
3) Changes in the expiration date of this Agreement;
4) Changes to the grant term date;
5) Changes to the Reimbursement Deadline.

B. Revisions to the Scope of Work that may not require a contract amendment will be subject to the review and approval of the Housing Policy Development Senior Program Manager, or Manager’s Designee. Such revisions must be approved by the Department prior to implementation. Approval shall be provided in writing, as appropriate. Adjustments to the Scope of Work (Exhibit E) shall include but not be limited to:
1) An increase or reduction of activity scope;

2) Changes to or reallocations among activities that do not change the total award amount;
3) Changes in affordability and level of affordability for each activity; 4) Changes to activity start and/or completion dates.

6. Core Practices
A Grantee or Subrecipient must provide eligible activities in a manner consistent with the housing first practices described in California Code of Regulations, title 25, section 8409(b)(1)-(6). A Grantee or Subrecipient allocated funds for eligible activities that provide permanent housing shall incorporate the core components of Housing First as provided in Section 8255(b) of the Welfare and Institutions Code.

7. Monitoring Grant Activities
A. Grantee shall monitor the activities selected and awarded by them to ensure compliance with PIP requirements. An onsite monitoring visit of Subrecipients and any other service providers may occur whenever determined necessary by the Grantee, but at least once during the Grant period.

B. The Department will monitor the performance of the Grantee based on a risk assessment and according to the terms of this Agreement. The Department may

City of San Luis Obispo
23-PIP-18487

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024
also monitor any Subrecipients of the Grantee as the Department deems appropriate based on a risk assessment.

C. As requested by the Department, the Grantee shall submit to the Department all PIP monitoring documentation necessary to ensure that Grantee and its Subrecipients are in continued compliance with PIP requirements. Such documentation requirements and the submission deadline shall be provided by the Department at the time such information is requested from the Grantee.

8. Reporting/Audits
A. During the term of the Standard Agreement, the Department may request a performance report that demonstrates satisfaction of all requirements identified in the Standard Agreement and other Program requirements with emphasis on eligible activities, eligible uses, ineligible uses, and expenditures, according to timelines and budgets referenced herein.

B. Grantees shall submit a report, in the form and manner prescribed by the Department, by April 1 of the year following the receipt of funds, and annually thereafter until funds are expended. The annual report shall contain a detailed report which must include, at a minimum:
1) Identification of the Eligible Activities to which the Grantee committed program funds, and the income levels of households assisted; 2) Amounts awarded to Subrecipients with the activity(ies) identified; 3) Identification of the Eligible Activities upon which the Contractor expended program funds, and the income levels of households assisted and the affordability level for any units assisted; and 4) Close out report for contracts that were fully expended and in which all activities funded were completed during the fiscal year.

C. The Department may request additional information, as needed.

D. At any time during the term of the Standard Agreement, the Department reserves the right to perform or cause to be performed a financial audit. At the Department’s request, the Contractor shall provide, at its own expense, a financial audit prepared by a certified public accountant. The State of California has the right to review project documents and conduct audits during and over the project life.

City of San Luis Obispo
23-PIP-18487

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024
E. If a financial audit is required by the Department, the audit shall be performed by an independent certified public accountant. Selection of an independent audit firm shall be consistent with procurement standards contained in 24 CFR 85.36. 1) The Contractor shall notify the Department of the auditor's name and address immediately after the selection has been made. The contract for the audit shall allow access by the Department to the independent auditor's working papers.
2) The Contractor is responsible for the completion of audits and all costs of preparing audits.
3) If there are audit findings, the Contractor must submit a detailed response acceptable to the Department for each audit finding within ninety (90) days from the date of the audit finding report.

9. Retention and Inspection Records
A. The Contractor is responsible for maintaining records, which fully disclose the activities funded by the Grant. Adequate documentation of each transaction shall be maintained to permit the determination, through an audit if requested by the State, of the accuracy of the records and the allowability of expenditures charged to Grant funds.

B. The Grantee, its staff, contractors and subcontractors shall establish and maintain an accounting system and reports that properly accumulate incurred project costs by line. The accounting system shall conform to Generally Accepted Accounting Principles (GAAP), enable the determination of incurred costs at interim points of completion, and provide support for payment vouchers and invoices.

C. The Eligible Applicant shall maintain documentation of its normal procurement policy and competitive bid process (including the use of sole source purchasing), and financial records of expenditures incurred during the project in accordance with GAAP.

D. The Eligible Applicant must establish a separate ledger account for receipts and expenditures of grant funds and maintain expenditure details in accordance with the scope of work, project timeline and budget. Separate bank accounts are not required.

E. The Contractor agrees that the Department or its designee shall have the right to review, obtain, and copy all records and supporting documentation pertaining to

City of San Luis Obispo
23-PIP-18487

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024
performance of this Agreement. The Contractor agrees to provide the Department or its designee, with any relevant information requested. 1) The Contractor agrees to permit the Department or its designee access to its premises, upon reasonable notice, during normal business hours for the purpose of interviewing employees who might reasonably have information related to such records and inspecting and copying such books, records, accounts, and other material that may be relevant to a matter under investigation for the purpose of determining compliance with the PLHA Statutes, the NOFA, and this Agreement.

F. The Contractor further agrees to retain all records for a period of five years after the end of the term of this Agreement:
1) If any litigation, claim, negotiation, audit, monitoring, inspection or other action has been started before the expiration of the required record retention period, all records must be retained until completion of the action and resolution of all issues, which arise from it. 2) The Contractor also agrees to include in any contract that it enters in an amount exceeding $10,000, the Department’s right to audit the contractor’s records and interview their employees. The Contractor shall comply with the caveats and be aware of the penalties for violation of fraud and for obstruction of investigation as set forth in California Public Code Section 10115.10.

G. The determination by the Department of the eligibility of any expenditure shall be final. If the eligibility of any expenditure cannot be determined because records or documentation are inadequate, the expenditure may be disallowed, and the Department shall determine the reimbursement method for the amount disallowed.

H. The Contractor shall retain all books and records relevant to this Agreement for a minimum of five years after the end of the term of this Agreement. Records relating to any and all audits or litigation relevant to this Agreement shall be retained for five years after the conclusion or resolution of the matter.

I. Subcontractors employed by the Grantee and paid with moneys under the terms of this Standard Agreement shall be responsible for maintaining accounting records as specified above. The Grantee shall monitor and enforce subcontracts accordingly.

City of San Luis Obispo
23-PIP-18487

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024

10. Breach and Remedies of Non-Performance
A. The Department may monitor expenditures and activities of an applicant, as the Department deems necessary, to ensure compliance with Program requirements.

B. Any dispute concerning a question of fact arising under this Standard Agreement that is not disposed of by agreement shall be decided by the Department’s Housing Policy Development Manager, or the Manager’s designee, who may consider any written or verbal evidence submitted by the Grantee. The decision of the Department’s Housing Policy Development Manager or Designee shall be the Department’s final decision regarding the dispute.

C. Neither the pendency of a dispute nor its consideration by the Department will excuse the Grantee from full and timely performance in accordance with the terms of this Standard Agreement.

D. In the event that it is determined, at the sole discretion of the Department, that the Grantee is not meeting the terms and conditions of the Standard Agreement, immediately upon receiving a written notice from the Department to stop work, the Grantee shall cease all work under the Standard Agreement. The Department has the sole discretion to determine that the Grantee meets the terms and conditions after a stop work order, and to deliver a written notice to the Grantee to resume work under the Standard Agreement.

E. Both the Grantee and the Department have the right to terminate the Standard Agreement at any time upon 30 days written notice. The notice shall specify the reason for early termination and may permit the Grantee or the Department to rectify any deficiency(ies) prior to the termination date. The Grantee will submit any requested documents to the Department within 30 days of the early termination notice.

F. At any time, if the Department finds the applicant falsely proposed information in the application or as part of the application review, including documentation related to incentive payments (e.g., affordability, enhancements), the Department may require the repayment of funds or decline reimbursement.

G. The Department may, as it deems appropriate or necessary, require the repayment of funds from a grantee, or pursue any other remedies available to it by law for failure to comply with Program requirements (Health and Safety Code section 50515.04(e).

H. The following shall constitute a breach of this Agreement:

City of San Luis Obispo
23-PIP-18487

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024
1) Grantee’s failure to comply with any of the terms and conditions of this Agreement.
2) Use of, or permitting the use of, grant funds provided under this Agreement for any ineligible costs or for any activity not approved under this Agreement.
3) Any failure to comply with the deadlines set forth in this Agreement unless approved by the Program Manager.

I. In addition to any other remedies that may be available to the Department in law or equity for breach of this Agreement, the Department may at its discretion, exercise the following remedies:
1) Disqualify the Grantee from applying for future Program Funds or other Department administered grant programs;
2) Revoke existing PIP award(s) to the Grantee;
3) Decline reimbursement of funds;
4) Require the return of unexpended Program funds disbursed under this Agreement;
5) Require repayment of Program funds disbursed and expended under this Agreement;
6) Require the immediate return to the Department of all funds derived from the use of Program funds including, but not limited to recaptured funds and returned funds;
7) Seek, in a court of competent jurisdiction, an order for specific performance of the obligation defaulted upon, or the appointment of a receiver to complete the obligations in accordance with the PIP requirements; and
8) Other remedies available at law, or by and through this Agreement.

J. All remedies available to the Department are cumulative and not exclusive.

K. The Department may give written notice to the Grantee to cure the breach or violation within a period of not less than fifteen (15) days.

City of San Luis Obispo
23-PIP-18487

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024

11. Termination
A. The Department may terminate this Agreement at any time for cause by giving a minimum of thirty days’ notice of termination, in writing, to the Grantee. Cause shall consist of, violations of any terms and/or special conditions of this Agreement, the PIP Statutes, Guidelines or NOFA. Upon termination of this Agreement, unless otherwise approved in writing by the Department, any unexpended funds received by the Grantee shall be returned to the Department within thirty days of the notice of termination.

B. This Agreement is subject to any additional restrictions, limitations or conditions, or statute, regulations or any other laws, whether federal or those of the State of California, or of any agency, department, or any political subdivision of the federal or the State of California governments, which may affect the provisions, terms or funding of this Agreement in any manner.

C. The Department has the option to terminate this Agreement under the thirty-day cancellation clause or to amend this Agreement to reflect any reduction of funds.

12. Waivers
No waiver of any breach of this Agreement shall be held to be a waiver of any prior or subsequent breach. The failure of the Department to enforce at any time the provisions of this Agreement, or to require at any time, performance by the Grantee of these provisions, shall in no way be construed to be a waiver of such provisions nor to affect the validity of this Agreement or the right of the Department to enforce these provisions.

13. Relocation
Grantee shall comply with all requirements of applicable California relocation law (Gov.

Code, § 7260 et seq. and the regulations promulgated thereunder at Cal. Code Regulations, Title. 25, § 6000 et seq.). Any relocation plan for the Development shall be subject to the review and approval by the State.

14. Relationship of Parties
It is expressly understood that this Standard Agreement is an agreement executed by and between two independent governmental entities and is not intended to, and shall not be construed to, create the relationship of agent, servant, employee, partnership, joint venture or association, or any other relationship whatsoever other than that of an independent party.

City of San Luis Obispo
23-PIP-18487

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024

15. Third-Party Contracts
A. All state-government funded procurements must be conducted using a fair and competitive procurement process. The Grantee may use its own procurement procedures as long as the procedures comply with all City/County laws, rules and ordinances governing procurement, and all applicable provisions of California state law.

B. Any contract entered into as a result of this Agreement shall contain all the provisions stipulated in the Agreement to be applicable to the Grantee’s subrecipients, contractors, and subcontractors. Copies of all agreements with subrecipients, contracts, and subcontractors must be submitted to the Department’s program manager upon request.

C. The Department does not have a contractual relationship with the Grantee’s subrecipients, contractors, or subcontractors, and the Grantee shall be fully responsible for all work performed by its sub-recipients, contractors, or subcontractors.

D. In the event the Grantee is partnering with another jurisdiction or forming a collaborative effort between the Grantee and other jurisdictions who are grantees of the PIP, the Grantee acknowledges that each partner and/or all entities forming the SB 2 PIP collaborative are in mutual written agreement with each other but are contractually bound to the Department under separate, enforceable contracts.

E. In the event the Grantee is partnering with another jurisdiction or forming a collaborative effort with other entities that are not grantees of the Prohousing Incentive Program, the Department shall defer to the provisions as noted in subsections 8(B) and 8(C) of this Section.

F. The Grantee agrees to comply with all conditions of this Agreement including the Special Conditions set forth in Exhibit E. These conditions shall be met to the satisfaction of the Department prior to disbursement of funds. The Grantee shall ensure that all Subrecipients are made aware of and agree to comply with all conditions of this Agreement and the applicable State requirements governing the use of Grant funds. The Grantee shall ensure that all Subrecipients are qualified to do business and in good standing with the California Secretary of State and the California Franchise Tax Board. Failure to comply with these conditions may result in cancellation of this Agreement.

City of San Luis Obispo
23-PIP-18487

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024

16. Compliance with State and Federal Laws, Rules, Guidelines and Regulations A. The Grantee agrees to comply with all state and federal laws, rules and regulations that pertain to construction, health and safety, labor, fair employment practices, equal opportunity, and all other matters applicable to the grant, the Grantee, its contractors or subcontractors, and any other grant activity.

B. During the performance of this Agreement, the Grantee assures that no otherwise qualified person shall be excluded from participation or employment, denied program benefits, or be subjected to discrimination based on race, color, ancestry, national origin, sex, gender, gender identity, gender expression, genetic information, age, disability, handicap, familial status, religion, or belief, under any program or activity funded by this contract, as required by Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42 USC 3601-20) and all implementing regulations, and the Age Discrimination Act of 1975 and all implementing regulations.

C. The Grantee shall include the nondiscrimination and compliance provisions of this clause in all agreements with its sub-recipients, contractors, and subcontractors, and shall include a requirement in all agreements with all of same that each of them in turn include the nondiscrimination and compliance provisions of this clause in all contracts and subcontracts they enter into to perform work under the Prohousing Incentive Program.

D. The Grantee shall, in the course of performing project work, fully comply with the applicable provisions of the Americans with Disabilities Act (ADA) of 1990, which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to the ADA. (42 U.S.C. 12101 et seq.) E. The Grantee shall adopt and implement affirmative processes and procedures that provide information, outreach and promotion of opportunities in the Prohousing Incentive Program project to encourage participation of all persons regardless of race, color, national origin, sex, religion, familial status, or disability.

This includes, but is not limited to, a minority outreach program to ensure the inclusion, to the maximum extent possible, of minorities and women, and entities owned by minorities and women, as required by 24 CFR 92.351.

17. Litigation

City of San Luis Obispo
23-PIP-18487

EXHIBIT D
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 09/10/2024
A. If any provision of this Agreement, or an underlying obligation, is held invalid by a court of competent jurisdiction, such invalidity, at the sole discretion of the Department, shall not affect any other provisions of this Agreement and the remainder of this Agreement shall remain in full force and effect. Therefore, the provisions of this Agreement are, and shall be, deemed severable.

B. The Grantee shall notify the Department immediately of any claim or action undertaken by or against it, which affects or may affect this Agreement or the Department, and the Grantee shall take such action with respect to the claim or action as is consistent with the terms of this Agreement and the interests of the Department.

18. Special Conditions
The State reserves the right to add any special conditions to this Agreement it deems necessary to assure that the policy and goals of the Program are achieved.

City of San Luis Obispo
23-PIP-18487

EXHIBIT E
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 07/31/2024

PROGRAM-SPECIFIC PROVISIONS AND SPECIAL CONDITIONS

1. Program-specific Provisions
The following are project-specific terms and conditions and shall inform the references made to project-specific information not contained in the Standard Agreement.

2. Budget Detail:

Grantee has been awarded the following grant activity amounts: $750,000.00 Estimated allocation may not exceed: $750,000.00
Payees: City of San Luis Obispo, People’s Self-Help Housing Corporation, Smartshare Housing Solutions, Housing Authority of the City of San Luis Obispo, Transitions Mental Health Association
The authorized Payee(s) is/are specified below:

Name: City of San Luis Obispo Amount: $750,000
Name:People’s Self-Help Housing Corporation Amount: $400,000 Name:Smartshare Housing Solutions Amount: $150,000
Name:Housing Authority of the City of San Luis Obispo Amount: $150,000 Name:Transitions Mental Health Association Amount: $50,000

3. Consistency with Housing Element Programs:

Provide a description of how the Plan is consistent with the programs set forth in the Local government’s Housing Element.

The City’s Housing Element identifies increased housing production as a major goal.

Affordability is also identified as a major goal, with continuation of the Affordable Housing Fund program described within. The Affordable Housing Fund is intended to accelerate production of affordable housing projects with the goal of supporting 4 developments per year. This is achieved through direct financial assistance to affordable housing projects that are ready for construction. The PIP funds will enable the City to make loans from the Affordable Housing Fund to 4 eligible projects.

City of San Luis Obispo
23-PIP-18487

EXHIBIT E
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 07/31/2024
Project Timeline, Budget, and Statement of Work (Plan):

PROJECT TIMELINE AND BUDGET AND STATEMENT OF WORK
Objective
Responsible
Party Est. Cost Begin End Deliverable Notes
Objective: Award
funds to 4
separate
affordable
housing projects
in the City.

City of San Luis
Obispo
$750,000 9/1/2024 6/1/2025 Fund
disbursement
Subtask: Award
funds to Calle
Joaquin
Homekey Project.

Claim
reimbursement
for development
activities
City/People’s
Self-Help
Housing
$400,000 9/1/2024 12/1/2025 Development of
a 75 unit
affordable
housing
community
targeting
formerly
homeless
populations
Subtask: Award
funds to
Waterman Village
Project. Claim
reimbursement
for development
activities
City/SmartShare
Housing
Solutions
$150,000 12/1/2024 12/1/2025 Development of
a 20 unit
affordable
housing
community
serving low to
very-low
incomes
Subtask: Award
funds to
Monterey
Crossing Senior
Housing Project.

Claim
reimbursement
for development
Housing
Authority of the
City of San Luis
Obispo
$150,000 11/1/2024 6/1/2025 Development of
a 55 unit
affordable
housing
community
serving low
income seniors
and individuals.

Subtask: Award
funds to TMHA
Supportive
Housing Project.

Claim
reimbursement
for development
Transitions
Mental Health
Association
$50,000 11/1/2024 4/1/2025 Development of
a 3-bedroom
ADU in an
existing
residential
property with
permanent
supportive
housing.

Total Estimated
Cost: $750,000

City of San Luis Obispo
23-PIP-18487

EXHIBIT E
Prohousing Incentive Program (PIP)
NOFA Date: 1/23/2024
Approved Date: 06/11/2024
Preparation Date: 07/31/2024

4. Special Terms and Conditions
The following Special Conditions are applicable to this Standard Agreement:

None.

PIP Request for Funds
Version 03/2025
PROHOUSING INCENTIVE PROGRAM ROUND 2
Request for Reimbursement of Funds
Grantee: ________________________________ Contract No.: ____________________ Contract Execution Date: _______________ Contract Expiration Date: _______________ Contact Name: _________________________ Title: ____________________________ Phone Number: _________________________ E-mail: ___________________________ Send Payment To: (Address MUST match the address on the Government Agency Taxpayer ID Form submitted to the Department)
Street Address: ____________________________________________________________ City/State/Zip: ____________________________________________________________ Attention: _________________________ Position Title: _________________________ Cash Request Number: ____
Final Request ☐ (Check only if last request)
Request Type: ☐ Advance
Total Grant Amount Total Requested
to Date Amount Requested Balance
$ $ $ $
Grantee Certification: As a representative of the entity, I certify, to the best of my knowledge, that this report is true in all respects, the reported amounts agree with the official accounting records, and all disbursements will be or have been made for the purposes and conditions as detailed in the Standard Agreement of this grant.

Note: Funds request must be signed by the authorized representative as designated in the signed resolution, or if a designee, the designee must be on file with the Department.

Name: _______________________________ Title: _____________________ (Please print) (Please print)
Signature: _______________________________ Date: _____________________ For HCD Use Only
Program Rep.: ___________________________ Manager: ___________________________ Approval Date: ___________________________ Approval Date: ___________________________ Approved Disbursement Amount: $
☐ Reimbursement
City of San Luis Obispo ■23-PIP-18487 12/18/2024 06/30/2027 David Amini Housing Coordinator (805) 781-7524 [email protected] 990 Palm Street San Luis Obispo, CA 93401 David Amini Housing Coordinator 1 750,000.00 0.00 400,000.00 350,000.00 Whitney McDonald City Manager 7/9/2025 Docusign Envelope ID: 8AAA9AE8-23C7-4BFC-BF4D-CD560479AA12

Item 5e
Department: Utilities
Cost Center: 6107
For Agenda of: 8/4/2026
Placement: Consent
Estimated Time: N/A
FROM: Aaron Floyd, Public Works & Utilities Director
Prepared By: Rachelle Paris, Interim Solid Waste and Recycling Program Manager SUBJECT: APPROVE A GRANT APPLICATION TO THE FISCAL YEAR 2026-2027 AND 2027-2028 FOR CALRECYCLE BEVERAGE CONTAINER

RECYCLING GRANT PROGRAM

RECOMMENDATION
Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, authorizing submittal of an Individual Grant Application for the CalRecycle Beverage Container Recycling Grant Program (FY 2026-27 and 2027-28).”

POLICY CONTEXT
In 2016, the City Council adopted Resolution No. 10719 authorizing the Public Works and Utilities Director to apply to the Department of Resources Recycling and Recovery (CalRecycle) for any and all payment programs offered by this agency until rescinded.

Though this resolution is still in effect, CalRecycle has determined that the authority accorded by it does not extend to their grant programs. Adopting the proposed Resolution (Attachment A) is consistent with the City of San Luis Obispo’s Financial Management Manual, Section 740 Grant Management Policy. This policy states that Council must approve all grant applications in excess of $5,000 and delegates receipt and contract execution to the City Manager if delegation is allowed by the grantor agency.

The proposed grant application supports implementation of the City's Climate Action Plan by advancing the Circular Economy strategies to reduce single-use materials and encourage reusable alternatives. Expanding access to public water bottle filling stations supports these objectives by making reusable water bottles a more convenient option for residents and visitors. The project is also consistent with the City Council's Major City Goal of Fiscal Sustainability by pursuing external grant funding to improve public infrastructure and advance adopted sustainability objectives without relying solely on local funding.

Item 5e

DISCUSSION
Background
CalRecycle has issued a grant opportunity through the Beverage Container Recycling Program for a total of $1,500,000 available statewide for each fiscal year (FY) 2026-27 and 2027-28. The program provides a total maximum grant award of up to $275,000 per applicant.

The proposed locations were selected based on their high levels of recreational use, organized sports programming, and community events, as well as feedback from local sports organizations and event organizers identifying a need for improved access to drinking water. These parks regularly host youth and adult athletic leagues, tournaments, community gatherings, and special events that attract thousands of visitors each year.

The purpose of the grant project is to expand public access to drinking water bottle filling stations in high-use recreation areas, reducing reliance on single-use beverage containers by making reusable bottle refilling more convenient.

The Public Works and Utilities Department is
seeking $182,200 in grant funding for the
installation of nine water bottle filling stations at
four high-use community parks: Damon-Garcia
Sports Complex, Laguna Lake Park, Santa Rosa
Park, and Sinsheimer Park Stockton Field. The
purpose of the project is to expand public access
to drinking water bottle filling stations, which
would reduce reliance on single-use beverage
containers. The project is anticipated to be
implemented in phases: 1) replacement of
existing water fountains with bottle-filling stations
at Santa Rosa Park and Sinsheimer Park
Stockton Field, which would be conducted by
park maintenance staff; and 2) construction and
installation of new bottle-filling stations and
associated infrastructure at Laguna Lake Park
and Damon-Garcia Sports Complex, which would
require engineered site design and construction
by a contractor.

The proposed budget includes $45,826.20 for the purchase of nine “Most Dependable Fountains” brand hydration stations (Attachment B), as well as $6,845.00 for the design, purchase, and installation of custom wraps by Quality Tinting featuring Sustainable SLO branding and a QR code directing users to educational resources that promote waste reduction and beverage container recycling (Attachment C). “Most Dependable Fountains” are the City's current standard hydration station and are currently installed at 24 locations throughout the community, including parks, the Downtown core, public service counters at City facilities, and the Ludwick Community Center.

Item 5e
The proposed grant budget also includes the installation of two new potable water service lines and associated drainage infrastructure at the Laguna Lake Rotary Pavilion and Damon-Garcia Sports Complex, where potable drinking water service is not currently available (see Attachment D, Conceptual Plan and Project Description). Project costs are based on an engineer's estimate prepared by City staff in the amount of $115,898.24, which includes the anticipated construction costs for the installation of equipment, water service line and drainage infrastructure and improvements, construction project management, and other eligible implementation costs. The proposed budget also includes a 10% contingency of $11,589.82 to account for unforeseen construction conditions, cost fluctuations, and other eligible implementation expenses that may be incurred during project delivery.

In addition to the infrastructure improvements, the proposed grant budget includes $2,000 for in-house Communications Coordinator staff costs to develop and implement a comprehensive public outreach and education campaign to promote the new hydration stations and encourage the use of reusable beverage containers. Outreach efforts will include Sustainable SLO branded hydration station wraps, educational website content, and partnerships with event organizers at the project locations to educate vendors and visitors about the City's single-use plastic beverage container ordinance, beverage container recycling opportunities, and strategies to reduce litter and waste generation.

Previous Council or Advisory Body Action
In 2016, the City Council adopted Resolution No. 10719 authorizing the Public Works and Utilities Director to apply to CalRecycle for any and all payment programs offered by this agency. Though this resolution is still in effect, CalRecycle has determined that the authority accorded by it does not extend to their grant programs and requires a specific resolution in order for the City to apply for funding.

Public Engagement
The City has received letters of support from SLO Youth Baseball, Central Coast Friday Night Lights (FNL), American Youth Soccer Organization (AYSO), Central Coast Renaissance Festival, Friends of SLO City Dog Parks, and Monster Skate for this project (Attachment E).

CONCURRENCE
The Public Works Deputy Director of Maintenance Operations, the Director of Parks and Recreation, and the Office of Sustainability concur with staff’s recommendation.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to the recommended action described in this report and resolution, because the submittal of a grant application does not constitute a “Project” under State CEQA Guidelines Section 15378.

Replacement of existing water fountains with bottle-filling stations (which would have substantially the same purpose and capacity) and installation of new bottle-filling stations

Item 5e
and associated infrastructure would not result in a significant impact on the environment and qualifies for a Categorical Exemption pursuant to State CEQA Guidelines Section 15302 (Replacement or Reconstruction) and Section 15303 (New Construction or Conversion of Small Structures).

FISCAL IMPACT
Budgeted: No Budget Year: 2026-27 and 27-28
Funding Identified: Yes (grant funding)
Fiscal Analysis:

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

Proposed
CalRecycle
Grant
$182,176.27* $182,176.27
Total $182,176.27* $182,176.27 $ $
*Pending application and award
The recommendation in this staff report is to authorize staff to pursue a grant funding opportunity with CalRecycle for $182,200 to fund the purchase and installation of the water bottle filling stations and associated infrastructural improvements. If the Council authorizes the grant application, and the grant is not ultimately awarded, staff do not propose to proceed with this project at this time.

If the grant is awarded, staff recommend that Council delegate authority to the City Manager, the Public Works and Utilities Director, or their designee, to appropriate the full amount to allow project activities to begin immediately, rather than returning to Council to accept the award.

If the project is implemented, appropriate updates to capital improvement forecasts for standard maintenance and upkeep will be incorporated into operational costs identified in the City’s Financial Plan.

ALTERNATIVES

1. Council could decide to not authorize the application for the Beverage Container Recycling Grant Program. If Council does not authorize the grant

Item 5e
application, staff would not move forward with the project at this time, as current funding for the Capital Improvement Program has already been assigned to other projects.

2. Council could direct that awarded funding be used at alternative locations. As noted above, the proposed locations were identified by Parks and Recreation and Public Works Parks Maintenance staff and local sports organizations and event organizers based on the high levels of use associated with these locations, need for improved access to drinking water, and the associated maximum benefit related to grant objectives. If Council directed staff at this time to consider alternative locations for the water bottle-filling stations, the draft grant application would be amended, which would include a re-evaluation of estimated costs. Once the grant is awarded, any revisions to the approved project locations, work plan, budget, or project scope would require staff to submit a formal modification request to CalRecycle, including supporting justification. Any such revisions would require written approval from the assigned CalRecycle Grant Manager before grant funds could be expended for the revised scope.

ATTACHMENTS
A – Draft Resolution authorizing approval of grant application to the CalRecycle Beverage Container Recycling Grant Program
B – Most Dependable Fountains Purchase Cost Quote
C – Quality Tint Purchase and Installation Quote
D – Phase 2: Conceptual Site Plan and Descriptions (new water line installations at Damon-Garcia and Laguna Lake Park)
E – Communications Public Education Outreach Plan Estimate F – Letters of Support from SLO Youth Baseball, Friday Night Lights, AYSO, Central Coast Renaissance Festival, Friends of SLO City Dog Parks, and Monster Skate

R ______
RESOLUTION NO. _____ (2026 SERIES)

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

OBISPO, CALIFORNIA, AUTHORIZING SUBMITTAL OF AN

INDIVIDUAL GRANT APPLICATION FOR THE CALRECYCLE
BEVERAGE CONTAINER RECYCLING GRANT PROGRAM (FY 2026-27
AND 2027-28)
WHEREAS, the California Public Resources Code authorizes the Department of Resources Recycling and Recovery (CalRecycle) to administer various Grant Programs; and
WHEREAS, in furtherance of this authority, CalRecycle is required to establish procedures governing the administration of the Grant Programs; and WHEREAS, CalRecycle grant application procedures require, among other things, an applicant’s governing body to declare by resolution certain authorizations related to the administration of CalRecycle Grants; and
WHEREAS, the funds received from the CalRecycle Beverage Container Recycling Grant Program would be expended on a project consisting of the installation of water bottle filling stations at City facilities, which would support implementation of the City's Climate Action Plan by advancing the Circular Economy strategies to reduce singleuse materials and encourage reusable alternatives; and WHEREAS, expanding access to public water bottle filling stations supports these objectives by making reusable water bottles a more convenient option for residents and visitors; and
WHEREAS, the action is consistent with the City Council's Major City Goal of Fiscal Sustainability by pursuing external grant funding to improve public infrastructure and advance adopted sustainability objectives without relying solely on local funding.

NOW, THEREFORE, BE IT RESOLVED that the Council of the City of San Luis Obispo that the City Council hereby authorizes to submittal of application(s) to CalRecycle for the Beverage Container Recycling Grant Program (FY 2026-27 and 2027-28) in the amount of $182,176.27.

BE IT FUTHER RESOLVED that the City Manager, the Public Works and Utilities Director, or their designee, are hereby authorized as Signature Authority to execute in the name of the City of San Luis Obispo all grant documents, including but not limited to, applications, agreements, amendments, and requests for payment, necessary to secure grant funds and implement the approved grant project; and

Resolution No. _____ (2026 Series) Page 2
R ______
BE IT FUTHER RESOLVED that these authorizations are effective for five (5) years from the date of adoption of this resolution.

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. ___________________________
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

Quote QTE93099
Quote
Date 6/30/2026

Quoted by:
(901) 867-0039
Bill To: CITY OF SAN LUIS OBISPO Ship To: CITY OF SAN LUIS OBISPO 25 PRADO ROAD CITY OF SAN LUIS OBISPO
SAN LUIS OBISPO CA 93401 25 PRADO ROAD
SAN LUIS OBISPO CA 93401
Purchase Order No. Customer ID Shipping Method Payment Terms Req Ship Date Master No. 805-781-7025 FEDEX 85 AT TIME OF ORDER 0/0/0000 171,377 Quantity Item Number Description UOM Discount Unit Price Ext. Price 3 10125 SMSS 10125 SMSS BOTTLE FILLER EA $0.00000 $2,645.00000 $7,935.00

1.000 BLUE BLUE EA $0.00000 $0.00000 $0.00
2 10145 SMSSFA 10145 SMSSFA ADA BOTTLE FILLER EA $0.00000 $4,960.00000 $9,920.00

1.000 BLUE BLUE EA $0.00000 $0.00000 $0.00
2 10145 SMSSFA 10145 SMSSFA ADA BOTTLE FILLER EA $0.00000 $4,960.00000 $9,920.00 2 PET FTN ATT.SMS ATTACHED PET FOUNTAIN EA $0.00000 $1,100.00000 $2,200.00

1.000 BLUE BLUE EA $0.00000 $0.00000 $0.00
2 10495 WMSS 10495 WMSS BOTTLE FILLER W/ CARRIER
PLATE EA $0.00000 $4,105.00000 $8,210.00

1.000 BLUE BLUE EA $0.00000 $0.00000 $0.00
PRODUCTION AND SHIPPING IS 4-5 WEEKS. 1 YEAR Subtotal $38,185.00 WARRANTY ON PARTS. CALIFORNIA TAXES SUBJECT TO
CHANGE DUE TO SHIPPING Freight $4,300.00
BRUCE QUOTE IS GOOD FOR SIX MONTH Tax $3,341.20
ALL CREDIT CARD TRANSACTIONS INCUR A 2% PROCESSING FEE Total $45,826.20 ONE YEAR WARRANTY. LABOR NOT INCLUDED

PRICES SUBJECT TO CHANGE WITHOUT NOTICE

CALIFORNIA SALES TAX IS SUBJECT TO CHANGE BASED ON SHIP TO ZIP CODE

Remember, we do all types of signs!
Quality is licensed and insured. LIC #1011335
Quality
3583 S. Higuera St.

San Luis Obispo, CA 93401 US
+18055415533
[email protected]
www.qualitytintingandsigns.com
Estimate

ADDRESS
City of San Luis Obispo
1341 Nipomo St
San Luis Obispo, CA 93401
ESTIMATE # 12261
DATE 07/17/2026

ACTIVITY QTY RATE AMOUNT
Signs:Signs
Estimate is for 9 Hydration Stations
Hydration Stations:

PRINT MEDIA: Arlon SLX+
LAMINATE: 3220 Gloss
PRINT ONLY:
*Design updated to Sustainable SLO layout
*Updated with new QR code
OBSTRUCTIONS: No wrapping of bolts, hinges, chrome caps or buttons.

There will be seams on welded areas.
- Vinyl Wrapping
Hourly Rate @ $125/hr [Full Color Printed Graphics] - Installed @ Quality * Estimated 4-8 hours for Installation per unit. Median of 6 hrs per unit.

Overall 36-72 hours.Median of 54
Total of 9 units
Final Input Upon Completion.
*Pricing assumes unites are all at one location
* This vinyl wrap project will be billed at an hourly rate of $125/hr. That rate includes the material and installation. The time for wrap installations will vary depending on the scope of the project. We have provided an estimated range for the project and plugged in the median number of hours we anticipate needing for the purposes of the quote. Please note, this is just an estimated range; we will plug in the final number of installation hours when the work is completed. Vinyl wraps involve a detailed prep process; oftentimes we utilize local businesses who 54 125.00 6,750.00

Remember, we do all types of signs!
Quality is licensed and insured. LIC #1011335

ACTIVITY QTY RATE AMOUNT
specialize in these services to assist with this process. * Often times wrap/film/decal projects require disassembly of vehicle parts; such as, door handles, door panels, spoilers, badges and bumpers.

Although our installers take great care in disassembly and reassembly, there is always a risk of parts breaking or becoming damaged. * By giving a deposit on a wrap/film/decal project the customer is acknowledging that there is a risk of damage to their vehicle that may occur as a result of installing wrap/film/decals or removing wrap/film/decals from my vehicle, and they are releasing Quality Tinting & Signs of liability for any damages. It is also understood that damage can occur as a result of normal installation processes, removal procedures, or from any other unforeseeable factors. Some damages that are rare but can occur are damages to: electronics, door handles, door panels, trim pieces, spoilers, calibration of vehicle, batteries, paint, badges, and clips.

Please note this is not a conclusive list.

DESIGN:DESIGN
Graphic Design - Hourly Rate of $95/hr
Estimated time [.5-1.5 Hours ]. Median time used for quoting Final time will be updated upon approval of final design * Our graphic design services are charged at an hourly rate of $95/hr.

Graphic design services include color matching, setting up print ready artwork, vectorizing logos, checking quality of files provided, and creating and modifying design proofs. The majority of sign projects do require some graphic design services. We have provided an estimated range for the project and plugged in the median number of hours we anticipate needing for the purposes of the quote. Please note, this is just an estimated range; we will plug in the final number of design hours when the work is completed. If you’d like an update on design hours at any time during our design process, please feel free to check in with our staff for an update.
* Color variations: Quality keeps detailed records of colors and print settings used on previous projects to ensure that colors stay cohesive for our clients. Even with detailed records saved; colors can vary up to 10% for colors printed in house. Variables such as temperature, humidity, print equipment, and print material cause variance in colors. When possible we recommend choosing a stock colored vinyl if your project require the use of large floods of solid colors. The color grey is often the most inconsistently produced color. By leaving a deposit on your project, you accept and understand this color variance and agree that it will not be considered a defect or grounds for rejection of the final product. * By giving a deposit on this project you agree to Quality's Design & Proofing Terms. Please review the attached PDF or following this link to review our design terms, common FAQS, and file setup information. https://docs.google.com/document/d/1mtF3JU179j7RGEIVHYKQOQUYMUiPaiAb6r5VQWIB04/edit?usp=sharing 1 95.00 95.00
Thank you for your business. Please note: There is a
3% fee on all credit/debit card transactions. You are
SUBTOTAL 6,845.00
TAX 0.00

Remember, we do all types of signs!
Quality is licensed and insured. LIC #1011335
welcome to pay online with a checking/savings account
number or in person with a check or cash. We do
require final payment when services are rendered.

We appreciate the prompt payment of your invoice.

Invoices not paid within 15 days of the project being
completed are subject to a 1.5% monthly finance
charge. If your invoice states NET 30 terms, a 1.5%
monthly finance charge will be added after 30 days of
the work being completed.

Deposits are collected to reserve an appointment in our schedule and ensure your project as priority for those
dates in our shop. Deposits are non-refundable in the
event of missing your appointment or rescheduling.

TOTAL $6,845.00
Accepted By Accepted Date

Damon Garcia Hydration Station
Description of Work
This work includes the installation of a new water service to supply the proposed hydration station by extending a new service in a straight alignment from the existing water main tapping point, across the bridge, and into the open planter area.

This alternative requires coring through both bridge abutments and installing a 2- to 3-inch protective casing. The casing will be suspended along the side of the bridge using conduit hangers, with each end terminating within the cored openings in the bridge abutments. The new water service line will then be installed within the casing.

This Option is anticipated to require approximately:
120 linear feet of water service piping
50 linear feet of 2- to 3-inch protective casing
650 square feet of concrete panel removal and replacement Standard Percolation well City of SLO STD 9070

Laguna Lake Park Rotary Hydration Station
Existing 1" Potable
line.

Cut in tee
with valve
New hydration station
within 40' of spigot. Actual
location to be determined
by Parks.

Description of Work
The proposed hydration station at the Rotary area in Laguna Lake Park will be supplied by an existing 1-inch potable water service located adjacent to the BBQ area. The hydration station will be installed approximately 40 feet from the existing hose bib and will require trenching for the new water service connection, along with the construction of a concrete pad for the station. Due to the poor soil percolation rates at this location, the Parks Division recommends installing a larger-than-standard leach pit to accommodate drainage from the hydration station.

Existing
spigot
Work includes:
1 waterline cut in.
40' of trenching for waterline
25 square feet of concrete pad for hydration
station.
10'x10'x5' enlarged Percolation field City of SLO
standard 9070.

Communications Cost Estimate
CalRecycle Beverage Container Grant Program (FY 2026–27 and FY 2027–28) 1 | Page
Public Education and Outreach Project:

Sustainable SLO Refill: Public Hydration Station Expansion to Reduce Beverage Container Waste Purpose:

The City's Communications Coordinator will develop and implement a coordinated Public Education and Outreach Plan that informs residents, event organizers, and visitors about the City's new public water refill stations, encourages the use of reusable water bottles, and supports long-term reduction of beverage container waste through consistent public messaging and education.

Scope of Work:

The Communications Coordinator will complete the following activities over the two-year grant period:

Communications Task Estimated
Hours
Estimated
Cost
Develop Public Education & Outreach Plan 3 $128.76
Prepare and distribute project launch press release 1 $42.92 Prepare and distribute project completion/milestone
press release
1 $42.92
Develop quarterly social media content, graphics, and
analytics reports (5 quarters @ 6 hours/quarter)
30 $1,287.60
Design educational signage, flyers, and hydration station wraps
6 $257.52
Develop project webpage, create QR codes, and capture
project photography
6 $257.52
Total 47 $2,017.01
Budget Summary:
• Communications Coordinator Hourly Rate (Salary + Benefits): $42.92/hour • Total Estimated Staff Time: 47 hours
• Total Estimated In-House Communications Cost: $2,017.01

2 | Page
Budget Justification:

The Communications Coordinator will provide in-house communications services to plan, develop, and implement outreach materials and public engagement activities throughout the grant period. Staff time includes the following deliverables:

Press Releases
• Issue announcements at grant project launch and key milestones. • Highlight water refill station locations, encourage reusable bottle use, and educate the public about reducing litter and recycling California Redemption Value (CRV) beverage containers.

Quarterly Social Media Posts (5 quarters)
• Create and edit content tailored for Sustainable SLO platforms. • Share updates, photos, user tips, and environmental metrics. • Produce quarterly analytics reports to track reach and engagement.

Signage, Flyers, and Wrapping Development
• Design clear, attractive station signage to show where hydration stations are located • Produce educational flyers for community distribution and events. • Develop visual wraps for stations to create strong, consistent branding.

Website Creation
• Build a project webpage featuring water refill station locations, photos, and educational resources that encourage reusable water bottle use, reduce reliance on single-use beverage containers, and promote California Redemption Value (CRV) beverage container recycling.
• Include QR codes on water refill station wrappings, signage, and flyers linking directly to the webpage.
• Capture new photos for use across the site and outreach materials.

June 27, 2026
CalRecycle Grants and Loans Program
1001 I Street, P.O. Box 4025
Sacramento, CA 95812
Re: Letter of Support for the City of San Luis Obispo Beverage Container Recycling Grant To Whom It May Concern,
On behalf of AYSO Region 599, I am pleased to offer our strong support for the City of San Luis Obispo's application to the Beverage Container Recycling Grant Program and the proposed installation of a water bottle filling station at the Damon-Garcia Sports Complex.

AYSO Region 599 serves more than 1,400 youth players each fall season, along with hundreds of volunteer coaches, referees, and family members. Damon-Garcia is our primary game facility, hosting Wednesday evening and Saturday matches throughout our ten-week fall season. The complex also hosts scrimmages and multiple tournaments each year, welcoming visiting teams and families from across the Central Coast and Southern California.

As the only lighted sports complex in the City, Damon-Garcia is an incredibly valuable community resource and sees heavy use throughout the year. On busy game days, we are regularly asked by families where they can refill reusable water bottles, but there is currently no convenient option available.

A water bottle filling station would provide meaningful benefits for our players, families, referees, volunteers, and visitors. Easy access to drinking water encourages athletes to stay hydrated during long game days, particularly in warm weather when many participants spend several consecutive hours at the complex.

The addition would also directly support the City's sustainability goals. AYSO Region 599 has already embraced reusable water bottles as part of our tournament operations and works to reduce single-use plastic waste whenever possible. Despite those efforts, we routinely see trash and recycling receptacles overflowing with disposable water bottles during busy weekends. A filling station would make it easier for families to refill reusable bottles while helping reduce waste generated at one of the City's busiest athletic facilities.

The project would also improve the experience for our volunteers. Our referees often officiate multiple matches back-to-back and may not have time to leave the fields between games. As a result, AYSO regularly purchases large containers of drinking water simply to keep our referee crews hydrated throughout the day. A permanent filling station would provide a healthier, more sustainable, and more convenient solution for everyone using the complex.

As an organization built entirely by volunteers, we greatly appreciate investments that improve Damon-Garcia for the thousands of youth athletes, families, and community members who rely on it each year. This project is a practical improvement that supports player safety, environmental stewardship, and the continued success of youth sports in San Luis Obispo.

AYSO Region 599 proudly supports the City of San Luis Obispo's grant application and respectfully encourages the grant committee to fund this worthwhile project.

Thank you for your consideration.

Sincerely,
Kate Vanderwoude
Regional Commissioner
AYSO Region 599
[email protected]

Central Coast Renaissance Festival
July 29, 2026
CalRecycle Grants and Loans Program
1001 I Street, P.O. Box 4025
Sacramento, CA 95812
To the CalRecycle Grants and Loans Program Team,
On behalf of the Central Coast Renaissance Festival, I write in strong support of the City of San Luis Obispo's application to the CalRecycle Beverage Container Recycling Grant.

Our festival is among the longest-running cultural events on the Central Coast. This is our 40th year. Held annually at Laguna Lake Park, it draws over 10,000 visitors over a single weekend and brings together performers, artisans, vendors, and families from across the region — contributing meaningfully to local tourism and the cultural life of San Luis Obispo.

Laguna Lake Park is central to what makes our event possible, and the proposed hydration station at the Rotary Pavilion would benefit us directly. The City's ordinance prohibiting singleuse plastic beverage containers on City property reflects values we share, but without a water bottle refill station at the park, compliance is difficult for attendees and waste reduction at largescale events remains a challenge. A hydration station would change that — encouraging reusable bottle use, reducing single-use plastics, and improving waste diversion for thousands of people in a single weekend. It would also meaningfully improve visitors’ comfort and safety during a summer event held entirely outdoors.

Beyond the festival, this installation would serve all park users throughout the year — a lasting community benefit from a single well-placed improvement.

We strongly support this application and believe a hydration station at the Laguna Lake Rotary Pavilion will advance San Luis Obispo's sustainability goals while supporting one of the region's most beloved cultural traditions.

Sincerely,
Rick Smith, Media and Entertainment Coordinator
[email protected]
Central Coast Renaissance Festival

Central Coast Friday Night Lights
June 30, 2026
CalRecycle Grants and Loans Program
1001 I Street, P.O. Box 4025
Sacramento, CA 95812
To Whom It May Concern,
As representatives of Friday Night Lights (FNL) San Luis Obispo, we are pleased to offer our full support for the City of San Luis Obispo’s application to the Beverage Container Recycling Grant Program and the installation of a water bottle filling station at the Damon-Garcia Sports Complex.

FNL serves a large and growing number of youth athletes from across the region.

Damon-Garcia is a central hub for our league, hosting weekly games that draw hundreds of players, coaches, and families. Hydration is a constant need, and currently, the lack of accessible water sources leads many families to rely on single-use plastic bottles.

A water bottle filling station would be a meaningful and impactful improvement for our league and the broader community. Specifically, it would:
• Reduce plastic waste generated during practices and games. • Provide a safe, sanitary, and convenient hydration source for youth athletes. • Support the City’s environmental goals by encouraging reusable bottle use. • Improve the experience for families, especially during long game nights.

Our organization is committed to promoting healthy habits and environmental responsibility among our players. This project aligns perfectly with those values and would directly enhance the Damon-Garcia Sports Complex for all who use it.

We strongly encourage approval of the City’s grant application and look forward to the positive impact this project will bring to our youth sports community.

Thank you for your leadership and dedication to sustainability.

Sincerely,
Mark Broersma
Commissioner – Friday Night Lights Youth Flag Football – San Luis Obispo [email protected]/805-801-6390

6/29/2026
CalRecycle Grants and Loans Program
1001 I Street, P.O. Box 4025
Sacramento, CA 95812
To the CalRecycle Grants and Loans Program Team,
On behalf of SLO Youth Baseball, I am writing to express our strong support for the City of San Luis Obispo’s application to the CalRecycle Beverage Container Recycling Grant. Our organization provides youth baseball programs for players across San Luis Obispo and the surrounding communities, fostering teamwork, sportsmanship, and healthy outdoor recreation.

Sinsheimer Park’s Stockton Field is one of our primary practice and game locations, hosting hundreds of players, families, coaches, and visiting teams throughout the season. Access to clean drinking water is essential for youth athletes, especially during long practices, double-headers, and warm-weather tournaments. Currently, Stockton Field does not have a hydration station or adequate recycling options for plastic water bottles, which makes it difficult to encourage reusable bottle use and reduce single-use plastics.

Installing a water bottle filling station at Stockton Field would significantly improve safety, comfort, and sustainability for our players and families.

SLO Youth Baseball strongly supports the City’s grant application and believes that a hydration station at Sinsheimer Park will provide lasting benefits for the baseball community and all park users. This improvement will help reduce waste, promote responsible hydration practices, and enhance the overall experience for everyone who uses Stockton Field.

Thank you for your consideration and for supporting projects that strengthen both youth recreation and environmental stewardship.

Sincerely,
Matt Weber
President SLO Youth Baseball
[email protected]
805-305-4093

Friends of SLO City Dog Parks
813 Bougainvillea St
San Luis Obispo, CA 93401
July 1, 2026
CalRecycle Grants and Loans Program
1001 I Street, P.O. Box 4025
Sacramento, CA 95812
To the CalRecycle Grants and Loans Program Team,
On behalf of Friends of SLO City Dog Parks, I am writing to express our strong support for the City of San Luis Obispo’s application to the CalRecycle Beverage Container Recycling Grant.

Our organization is dedicated to enhancing and maintaining high-quality, safe, and engaging off-leash recreation spaces for dogs and their owners throughout San Luis Obispo.

The new Laguna Lake Dog Park is an important addition to the City’s park system, providing a much-needed off-leash space for dogs and a welcoming gathering place for residents. However, the park currently does not offer recycling, and the lack of a hydration station limits our ability to encourage reusable bottle use and reduce single-use plastics. Dog owners frequently spend extended periods at the park, and access to clean drinking water is essential.

Installing a hydration station at Laguna Lake Dog Park would significantly improve visitor experience and reduce waste in an area that sees heavy daily use. This improvement would benefit park users year-round and support responsible environmental practices.

Friends of SLO City Dog Parks supports the City’s grant application and believes that a hydration station will provide lasting benefits for the dog-owning community and the broader public.

Sincerely,
John McKenzie
President
[email protected]

June 30, 2026
CalRecycle Grants and Loans Program
1001 I Street, P.O. Box 4025
Sacramento, CA 95812
To the CalRecycle Grants and Loans Program Team,
On behalf of Central Coast Monster Skate, I am writing to express our strong support for the City of San Luis Obispo’s application to the CalRecycle Beverage Container Recycling Grant. Our organization is dedicated to building an inclusive, safe, and vibrant skate community across the Central Coast through youth programs, community events, and advocacy for accessible recreation spaces.

Santa Rosa Park is home to one of the most active skate parks in the region and serves hundreds of local youth, families, and visiting skaters each week. As an organization that regularly hosts meetups, clinics, and community building events at this location, we see firsthand how essential hydration and waste reduction infrastructure is for the health and safety of park users.

Currently, Santa Rosa Park does not offer beverage container recycling, and the lack of a water bottle filling station contributes to increased single use plastic waste and limits skaters’ ability to stay hydrated during long sessions. Installing a hydration station would directly support reusable bottle use, reduce litter, and improve the overall sustainability of the park — all while promoting healthier habits for the youth and families who rely on this space.

A hydration station would also strengthen our ability to host environmentally responsible skate events and clinics, reinforcing the values of stewardship and community care that are central to our mission.

This improvement would benefit not only the skate community but all park users year round.

Central Coast Monster Skate enthusiastically supports the City’s grant application and urges your favorable consideration. Enhancing hydration and recycling access at Santa Rosa Park will make a meaningful difference for the local skate community and the broader public.

Thank you for your commitment to supporting community centered environmental improvements.

Sincerely,
Paula Anton, Chair & Founder Mel Johnson, Treasurer
[email protected] [email protected]
805.434.4909

Item 5f
Department: 8
Cost Center: 8506
For Agenda of: 8/4/2026
Placement: Consent
Estimated Time: N/A
FROM: Randy Harris, Fire Chief
Prepared By: Nicole Vert, Business Analyst
SUBJECT: AUTHORIZE THE FIRE DEPARTMENT TO ISSUE A PURCHASE ORDER

FOR A TRACTOR-DRAWN AERIAL APPARATUS

RECOMMENDATION

1. Issue a purchase order (PO) in the amount of $2,637,438.34 to South Coast Fire Equipment for a sole source purchase of a Type 1 Tractor Drawn Aerial Apparatus (TDA): and

2. Authorize the City Manager to execute the purchase documents; and,

3. Appropriate $1,000,000 from the Capital Projects Reserve Fund to support the replacement of Fire Truck 1; and,

4. Adopt a draft Resolution (Attachment A) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Authorizing Appropriation of $1,000,000 from the Capital Reserve to support the Replacement of Fire Truck 1

POLICY CONTEXT
The recommended actions are consistent with the City of San Luis Obispo’s Municipal Code, Section 3.24.060- Sole source purchasing. The policy states that regular bid procedures can be waived when the item(s) to be purchased can be obtained from only one vendor or supplier, and when supplies or equipment have been uniformly adopted in the city or otherwise when standardized.

This action is considered a purchase of goods and in compliance with the City of San Luis Obispo’s Municipal Code 3.24.080, which requires Council approval for any purchase in excess of $200,000.

The recommended actions to support the replacement of Fire Truck 1 are consistent with City Council’s adopted Capital Improvement Plan (CIP) and Fund Balance and Reserve Policy. The Fund Balance and Reserve Policy, adopted in June 2021, provides guidelines for the Capital Projects Reserve Fund, which states:

The City will maintain a committed reserve of 20% of the capital improvement plan budget from the Local Revenue Measure for the purposes of offsetting unanticipated cost increases, unforeseen conditions, and urgent unanticipated

Item 5f
projects to provide continued investment in infrastructure maintenance and enhancement, Use and allocations of funds from the Capital Projects Reserve Fund will be made to Capital Projects including Major Facility Replacement upon Council approval as necessary during any fiscal year.

The proposed use of the Capital Projects Reserve Fund to support the replacement of Fire Truck 1 is consistent with this policy, as these funds would offset the unanticipated funding shortfall resulting from the denial of anticipated grant funding for a critical public safety asset. Furthermore, use of the Capital Projects Reserve Fund supports continued investment in essential infrastructure and helps maintain reliable emergency response service levels.

DISCUSSION
Background
Emergency vehicles are a vital part of the service delivery for the City of San Luis Obispo Fire Department. Truck 1 is a Tractor-Drawn Aerial (TDA) apparatus that is a fire truck equipped with a long aerial ladder used for rescues, accessing upper floors and roofs for rescues and fighting fires from elevated positions. Its aerial ladder can reach the City's multi-story buildings, including the County Government Center, Anderson Hotel and multiple buildings on the Cal Poly campus, beyond the safe reach of the portable ladders carried on fire engines. The TDA's unique two-driver steering system provides the ability to bend in the middle allowing for tight turns and exceptional maneuverability to safely navigate the City’s narrow streets, tight intersections, and downtown areas while carrying the specialized equipment needed for complex emergencies.

Truck 1 was purchased in 2010 with an expected lifespan of twenty years and 10,000 engine hours, which Truck 1 reached in 2023 and as a result the drive train began rapidly deteriorating. To extend its life to reach the expected twenty-year span, Truck 1 was refurbished in early 2025, receiving a new engine, transmission, water pump, and several other vital parts. This has greatly reduced the amount of time out of service for repairs and will allow the truck to reach replacement in 2030. The refurbishment did not extend the life of the truck beyond twenty years due to its other equipment, most importantly, the aerial ladder, which is reaching end of reliable life and will need to be removed from front line service.

The lead time for a custom-built fire truck is 43 to 46 months necessitating the PO issuance and order placement now to ensure the Truck’s arrival by 2030.

Through the utilization of an internal apparatus committee, staff developed specifications that were used to build the pricing for the purchase of a replacement Truck 1. The specifications considered the community’s unique features and sought the best overall fire truck to complement the existing apparatus fleet. The new fire apparatus will provide the same capabilities as previous engines but with improved safety, efficiency, and reliability.

Item 5f
Sole Source Purchase Recommended
It is recommended that City Council authorize a sole source purchase contract to South Coast Fire Equipment in the amount of $2,637,438.37 for the purchase of a 2026 Pierce Enforcer Type 1 TDA. City purchasing regulations allow for sole source purchases when supplies or equipment in use have been uniformly adopted by the City or otherwise standardized. The Pierce fire apparatus has been the standard for the City of San Luis Obispo for the last quarter century. As discussed more fully in the sole source justification memo (see Attachment C), the City’s Fire Department has standardized its apparatus (Pierce), and those apparatus can be obtained from only one vendor (South Coast Fire Equipment). Therefore, staff’s recommendation is to dispense with the standard bid procedures of Chapter 3.24, pursuant to Section 3.24.060(C) and 3.24.060(D), in making this purchase.

South Coast Fire Equipment provided the purchasing quote (Attachment B) for the apparatus as they are the sole provider of Pierce engines in this region (Attachment C).

The Fire Department has made significant parts, equipment, and training investment in maintaining Pierce-manufactured apparatus. Fire fleet already has an inventory of spare parts, filters, and maintenance items specific to the Pierce fire apparatus platform.

Additionally, the Fire Department’s Fire Vehicle Mechanic is specially trained to provide maintenance to Pierce manufactured fire apparatus.

Previous Council or Advisory Body Action
On April 15, 2025, the City Council approved the sole source purchase of a Pierce Arrow Type 1 Pumping Fire Engine.

Public Engagement
This item is a consent item for the August 4, 2026 City Council meeting and will follow all required postings and notifications. The public will have an opportunity to comment on this item at or before the meeting.

CONCURRENCE
The Finance Department and Public Works Department concur with the Fire Department’s recommendation to issue the PO and appropriate $1,000,000 from Capital Projects Reserve Fund.

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

Item 5f

FISCAL IMPACT
Budgeted: Yes Budget Year: 2026-27
Funding Identified: Yes
Fiscal Analysis:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ $ $ $
State
Federal
Fee
Capital
Reserves
$3,212,229 $1,000,000 $2,212,229 $0
Total $3,212,229 $1,000,000 $2,212,229 $0
Funding for the purchase of replacement Truck 1 was initially programmed into the Capital Improvement Plan (CIP) beginning with the adoption of the 2025-2027 Financial Plan, debt financed over five years through an external lender to be repaid with interest. South Coast Fire Equipment provided a quote for $2,637,438.34. The new engine will require outfitting with new equipment including but not limited to cardiac monitor, hoses and fittings, extrication equipment and other items necessary for a front-line apparatus. The estimated cost of this equipment is $300,000.

Staff propose two upfront payments of $1,000,000 from Capital Projects Reserve Fund now and $600,000 from Capital Outlay in FY 2028-29 before the arrival of Fire Truck 1, and debt financing the remaining $1,037,438.34. Fire staff will work with the Finance Department to find the best offers from a variety of lenders to secure most favorable terms. In November 2025 Council approved a lease agreement with JP Morgan to purchase a fire engine with an interest rate not to exceed 5%. Assuming similar terms for a new lease purchase agreement the debt service cost over a five-year term will be $137,226.13. The total cost of the truck with the equipment and debt service cost would be $3,074,664.47.

In December 2024, the Fire Department applied for a Federal Emergency Management Agency (FEMA) Assistance to Firefighter’s grant requesting $1,000,000 assistance in the purchase of the replacement of Truck 1. Due to the timing of the grant coinciding with

Item 5f
development of the 2025-2027 Financial Plan, the budget for Truck 1’s replacement included the requested grant award. Unfortunately, the City received notification in June 2026 that it was not awarded the grant. To offset this funding shortfall staff is requesting City Council approve the use of $1,000,000 from Capital Projects Reserve Fund.

The PO will lock the price for the replacement truck at the quoted $2,637,438.34. The quote expires August 7, allowing the quote to expire will require the City to obtain updated pricing which will guarantee a price increase of no less than 1%-2%, which could be an increase of as much as $52,748. The estimated delivery is not contingent on the payment plan. Staff will present the funding plan for the remaining budget with the 2027-2029 Financial Plan. Staff will also return to Council at a later date with a detailed lease agreement and request authorization to enter the agreement.

Two risks to the planned purchase are present. While the quoted price will be fixed upon PO issuance, the agreement allows South Coast to increase the purchase price to the extent that the compound annual growth rate of the Producer Price Index of Components for Manufacturing exceeds 5%. This metric has exceeded the 5% contract threshold for the last five months and currently stands at 6.6%. Should this situation occur, the seller will document any updated price and provide an option to cancel the order without charge.

Second, market interest rates at the time of borrowing could exceed staff’s assumption.

Interest rates are volatile and can be correlated with inflation rates. If either or both of these risks are realized, the total cost with interest may increase and staff may need to request additional appropriations.

ALTERNATIVES

1. Deny the sole source purchase. Pierce engines, the City’s standard fire engine, is only available through South Coast Fire Equipment that covers the west coast territory. Purchasing an apparatus from a different manufacturer would require additional operator and mechanic training, increase inventory requirements, and reduce operational consistency, resulting in increased overall costs.

2. Delay the purchase of Truck 1. Due to the long lead time from order placement to delivery, this alternative could risk not receiving delivery of replacement Truck 1 prior to the end of its useful life.

ATTACHMENTS
A - Draft Resolution
B - South Coast Quote
C - Sole Source Memo

R ______
RESOLUTION NO. _____ (2026 SERIES)

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

OBISPO, CALIFORNIA, A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AUTHORIZING
APPROPRIATION OF $1,000,000 FROM THE CAPITAL PROJECTS

RESERVE FUND TO SUPPORT THE REPLACEMENT OF FIRE TRUCK
1 WHEREAS, the City of San Luis Obispo provides fire protection services, which includes equipment that must be replaced from time to time; and WHEREAS, the Fire Department operates an aerial ladder apparatus that is reaching the end of its reliable service life; and
WHEREAS, to provide sufficient funding for the replacement purchase of a tractor drawn tiller apparatus and associated equipment purchase, staff recommends that the City Council approve the use of an additional $1,000,000 from the Capital Project Reserve Fund; and
WHEREAS, a balance of $3,212,229 is currently available in the Capital Project Reserve Fund; and
WHEREAS, Section 3.24.060(D) of the City of San Luis Obispo’s Municipal Code authorizes an exception to competitive bidding when supplies or equipment have been uniformly adopted or otherwise standardized by the City; and WHEREAS, the Fire Department has standardized its front-line fire apparatus on the Pierce manufacturing platform and has made substantial investments in manufacturer-specific parts, maintenance equipment, mechanic training, and operational familiarity as documented by the sole source memo (Attachment C).

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

SECTION 1. The City Council authorizes the appropriation of $1,000,000 from the Capital Project Reserve Fund to the replacement of Fire Truck 1 project account 2000554 and approves the sole source purchase thereof.

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

AYES:

NOES:

ABSENT:

Resolution No. _____ (2026 Series) Page 2
R ______
The foregoing resolution was adopted this _____ day of _______________ 2026. ___________________________
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

Extension
( 1 )
$ 2,425,221.00
Sales Tax @ 8.750% $ 212,206.84
$ 2,637,427.84
Performance Bond $ -
California Tire Fee $ 10.50
Consortium Fee Not Applicable $ -
$ 2,637,438.34
The above proposal price shall be valid until or extended in writing by South Coast Fire Equipment.

Said apparatus and equipment are to be built by the manfacturer and shipped in accordance with the specifications hereto attached, delays due to strikes, war or international conflict, failures to obtain chassis, materials, inability to obtain labor, supplies or manufacturing facilities, epidemics, acts of God, or causes beyond our control not preventing, delivery would be 43-46 months after receipt of this order and acceptance thereof at our office in Corona, California, and deliver to you at

PROPOSAL FOR FURNISHING FIRE APPARATUS
for final acceptance by South Coast Fire Equipment, Inc., at its corporate office in Corona, California, Each
May 18, 2026
City of San Luis Obispo
The undersigned is prepared to provide for you, our customer, upon an order being placed by you, the apparatus and equipment herein named and for the following prices:

San Luis Obispo, CA 93401
2160 Santa Barbara Ave
One
. The buyer must make the payment
within 15 days to obtain the full discount. Payments not received with in the 15 days are subject to an adjustment to the Total Purchase Price for the prepayment. $ 2,425,221.00
Pierce 107' Ascendant Tractor Drawn Aerial w/
a 1500 gpm pump on a Pierce Enforcer
Chassis
$ 212,206.84
$ -

TOTAL PURCHASE PRICE
$ -
08/01/26
Payment Terms - Payment is due of the Total Purchase Price at time of delivery. Changes to the specifications since the time of order can added to the Total Purchase Price or invoiced on a separate invoice. The final sales tax amount will be determined at time of delivery based on the tax rate at that time. An increase or decrease in cost will be reflected on the final invoice.

If the customer would desire to pay for the apparatus within 15 days of the purchase order being accepted the

APPARATUS COST WITH TAX
$ 10.50
Not Required
$ 2,637,427.84
$ 2,637,438.34
If the customer so desires to purchase the Product described in the Proposal and the attached specifications, prior to the expiration date listed above, the Customer shall sign and return this proposal. The Customer can then provide their choice of document for entering into the agreement by providing a Purchase Order, or signing a Contract with South Coast Fire Equipment, 3150 Palisades Dr. Corona, CA 92878 as the seller.

Ontario
Total Purchase Price would be reduced to N/A
The specifications herein contained shall form a part of the final contract and are subject to changes desired by the purchaser, provided such alterations are interlined prior to the acceptance by the company of the order to purchase, and provided such alterrations do not matterially affect the cost of the construction of the apparatus

The proposal for fire apparatus conforms with all Federal Department of Transportation (DOT) rules and regulations in effect at the time of bid, and with all National Fire Protection Association (NFPA) guidelines for Automotive Fire Apparatus as published at time of bid, except as modified by customer specifications Any increased costs incurred by the first party because of future changes in or additoinas to said DOT or NFPA standards will be passed along to the customer as an addition to the price set forth above. Unless accepted within 30 days from the specified date, the right is reserved to withdraw this proposition.

Respectfully Submitted,
South Coast Fire Equipment, Inc.

Sales Representative Signature:____________________________________ Title:_______________ Date:____________________
I, ___________________ authorized representative of
________________________ agrees to purchase the
proposed product(s) and agree to the terms and conditions of this proposal and the specifications hereto attached.

Bryden Newell
Force Majeure - South Coast Fire Equipment shall not be responsible nor deemed to be in default on accountof delays in performance due to causes which are beyond the seller's and manufacturer's control and make the seller's performance impracticable, including but not limited to wars, insurrections, strikes, riots, fires, storms, floods, other acts of nature, explosions, earthquakes, accidents, any act of government, delays in transportation, inability to obtain necessary labor supplies or manufacturing facilities, allocation regulations or orders affecting materials, equipment, facilities or completed products, failure to obtain any required license or certificates, acts of God or the public enemy or terrorisim, failure of transportation, epidemics, quarantine restrictions, failure of vendors (due to causes similiar to those within the scope of the clause) to perform their contracts or labor troubles causing cessation, slowdow, or interruption of work.

Cancellation/Termination. In the event this Agreement is cancelled or terminated by a party before completion, South Coast Fire Equipment (SCFE) may charge a cancellation fee. The following charge schedule based on costs incurred may be applied: (a) 10% of the Purchase Price after order is accepted and entered by Manufacturer; (b) 20% of the Purchase Price after completion of approval drawings, and; (c) 30% of the Purchase Price upon any material requisition. The cancellation fee will increase accordingly as costs are incurred as the order progresses through engineering and into manufacturing. SCFE endeavors to mitigate any such costs through the sale of such Product to another purchaser; however Customer shall remain liable for the difference between the Purchase Price and, if applicable, the sale price obtained by SCFE upon sale of the Product to another purchaser, plus any costs incurred by SCFE to conduct any such sale.

Due to global supply chain constraints, any delivery date contained herein is a good faith estimate as of the date of this order/contract, and merely an approximation based on current information. Delivery updates will be made available, and a final firm delivery date will be provided as soon as possible.

Persistent Inflationary Environment: If the Producer Price Index of Components for Manufacturing (www.bls.gov Series ID: WPUID6112) ("PPI") has increased at a compounded annual growth rate of 5.0% or more between the month Pierce accepts the order (Order Month") and a month 14 months prior to the then predicted Ready For Pickup date ("Evalution Month"), then pricing may be updated in an amount equal to the increase in PPI over 5.0% for each year or fractional year between the Order Month and the Evaluation Month.

The Seller will document any such updated price for the customer's approval before proceeding and provide an option to cancel the order without charge if the updated price is not accepted.

City of San Luis Obispo Sole Source Justification
Form
The City of San Luis Obispo (SLO) policy is to solicit quotations or bids for purchases for tier two (2) through five (5) price levels (See Purchasing Policy section 202A; 203A).

Under SLO Municipal Code 3.24.060, bid procedures may be waived and procurement obtained from a single solesource if it meets the criteria in Municipal Code 3.24.060. (See p. 2 for relevant criteria).

Staff must justify waiving the bid procedures in this form and tie the justification to one of the Municipal Code subsections. (See p. 2 for relevant criteria)
The justification should provide enough detail so that anyone in the public with no background on the purchase can understand the justification.

1. What is the product or service? Why is this product or service offered the only ‘sole-source’ that meets the City’s requirements?
Emergency vehicles are a vital part of the service delivery for the City of San Luis Obispo Fire Department. The tractor drawn apparatus is a critical piece of equipment for rapid response to all emergencies. Per Muni Code 3.24.060D “When supplies or equipment has been uniformly adopted in the city or otherwise standardized” bidding process is not required. The Fire Department has made significant parts, equipment, and training investment in maintaining Pierce-manufactured apparatus.

Fire fleet already has an inventory of spare parts, filters, and maintenance items specific to the Pierce fire apparatus platform. Additionally, the Fire Department’s Fire Vehicle Mechanic is specially trained to provide maintenance to Pierce manufactured fire apparatus. South Coast Fire Equipment is the sole provider of Pierce engines in this region.

2. Is the purchase an upgrade or addition to existing standardized equipment or systems? If so, will the purchase of this product avoid “switching” costs? (e.g., additional training required; data conversion; implementation of a new system; etc.)?
This purchase is not an upgrade or addition, but a replacement of an aging truck, the reliable life of which will end in 2030

3. Is this a request for services by a contractor with unique and critical knowledge of standardized City equipment, systems or programs?
No

4. What is the quoted price for the product or service, and is it reasonable (based on other products or services in the same field or based on historical pricing for the City for similar products or services)?
Quoted price is $2,637,438.34 and is in line with current costs of fire apparatus. South Coast is the only authorized dealer for Pierce and the only dealer SLOFD can purchase a Pierce fire apparatus from.

Requester:

Nicole Vert
__________________________________ ________________
Approver [______] Date

3.24.060 Bidding procedures—Use of not required when.

Purchase of those items listed in Section 3.24.010 shall be by bid procedures set forth in this chapter. Such procedures may be dispensed with, at the discretion and judgment of the purchasing authority as to the best interests of the city, as follows:

A. When the amount to be expended is less than the bid requirement amount which shall be specified by resolution of the council;
B. When an emergency purchase is made to address a situation that creates an immediate and serious need for equipment, supplies, or services that cannot be met through normal purchasing procedures and where the lack of such equipment, supplies or services would seriously threaten the functioning of city government, the preservation of property, or the health or safety of any person; C. When the item(s) to be purchased can be obtained from only one vendor or supplier; D. When supplies or equipment have been uniformly adopted in the city or otherwise standardized; E. When the purchase will be made cooperatively with one, or more, other units of government, or from a local dealer within the city limits that can provide the same brand, model and configuration of item(s) identified in cooperative purchase agreement(s) at or below the cooperative purchasing net cost within the same terms and conditions;
F. When reasonably necessary for the preservation or protection of public peace, health, safety or welfare of persons or property; or
G. When, given the indeterminate nature of the city’s need, a request for proposal will result in a more favorable and efficient comparison of supplies, equipment and/or services. (Ord. 1618 § 1 (Exh. A (part)), 2015: Ord. 1608 § 1, 2014; Ord. 954 § 2 (part), 1983: prior code § 2950.6).

Item 5g
Department: Administration
Cost Center: 1021
For Agenda of: 8/4/2026
Placement: Consent
Estimated Time: N/A
FROM: Greg Hermann, Deputy City Manager
Prepared By: Sara Armas, Deputy City Clerk
SUBJECT: ADVISORY BODY APPOINTMENT FOR AN UNSCHEDULED VACANCY

ON THE HUMAN RELATIONS COMMISSION

RECOMMENDATION
Confirm the appointment of Sophie Rose to the Human Relations Commission (HRC) for the remainder of the vacated term ending on June 30, 2028.

POLICY CONTEXT
The Advisory Body Handbook outlines the recruitment procedures, membership requirements, and term limits for City Advisory Bodies. Also contained in the Advisory Body Handbook are the bylaws for all Advisory Bodies, some of which include additional membership requirements. Additionally, the City Council Policies and Procedures Manual describes the “Appointment Procedure” and “Process” for Advisory Body appointments.

Recruitment and appointment recommendations were performed in conformance with all recruitment procedures, processes, and bylaws found in these resources.

California Government Code Section 54972, Local Appointments List (Maddy Act) requires that on or before December 31st of each year each legislative body shall prepare an appointments list for their boards, commissions, and committees whose members serve at the pleasure of the legislative body. This obligation was met and is on-going.

DISCUSSION
Annual appointments to the various City Advisory Bodies were made at the June 16, 2026 City Council meeting. The process for those appointments included recruitment by the City Clerk’s Office, interviews, and recommendations by the respective Council Liaison Subcommittees, with final confirmation of those recommendations made by the full Council. The applications of qualified candidates who are not chosen for immediate appointment are held for one-year for possible consideration in the event an unscheduled vacancy occurs. When unscheduled vacancies occur throughout the year, outreach to the qualified applicant list is conducted along with any necessary new recruitment for the given vacancies.

Item 5g
Human Relations Commission: Due to a resignation received July 1, 2026, there is an unscheduled vacancy on the Commission. Using the qualified applicants list from the 2026 Annual Advisory Body Recruitment, the Council Liaison Subcommittee assigned to the HRC, Mayor Stewart and Council Member Shoresman, recommend Sophie Rose to fill the vacant term ending June 30, 2028.

Other Vacancies: In addition to the vacancy on the HRC, the City Clerk’s Office is currently recruiting for two unscheduled vacancies on the Mass Transportation Committee (MTC).
 The Senior Representative position on the MTC is currently open as there were no applications received upon the previous member’s final term expiring. To qualify for this position, applicants must be at least 62 years of age and a resident of the City.
 The Cal Poly Representative has been vacant as of June 5, 2026. This position is designated by Cal Poly and has no term expiration.

Applications for these volunteer positions may be found on the City’s Job Opportunities webpage.

Public Engagement
Notices that the City was accepting applications for the above listed Advisory Bodies were placed on the City’s website and “e-notification” service, listed in the annual Local Appointments List (Maddy Act Notice – Government Code Section 54972), posted on the City website and City Information kiosk, and distributed via City social media outlets in February 2026 for the Annual Recruitment cycle. Following Maddy Act guidelines, notices were posted in the City Information kiosk outside City Hall and on the Advisory Body Vacancies page of the City’s website alerting the public that the City was specifically accepting applications for the vacancy on the HRC.

CONCURRENCE
As presented in the recommendation, the Council Liaison Subcommittee for the HRC is in concurrence with the stated recommendation along with the City Clerk’s Office, who coordinated and organized the process.

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

Item 5g

FISCAL IMPACT
Budgeted: Yes Budget Year: 2026-27
Funding Identified: N/A
Fiscal Analysis:

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

Total $N/A $ $ $
There is no fiscal impact for the appointment of the Advisory Body member.

Administration of the process is considered in the City Clerk’s annual budget.

ALTERNATIVES
Council could recommend changes to the Subcommittee recommended appointment or direct staff to re-open recruitment for additional candidates.

City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: August 4, 2026
TO: Mayor and Council
FROM: Aaron Floyd, Public Works and Utilities Director
Prepared By: Anthony Ramos, Senior Civil Engineering
VIA: Whitney McDonald, City Manager
SUBJECT: ITEM #5i – AUTHORIZATION TO AWARD SILT REMOVAL PROJECT 2026, SPECIFICATION 2000198-04
Staff received the following questions, regarding Silt Removal funding and Laguna Lake work. The questions are below with staff’s response shown in italics:
1) Clarify the project funding, including why we have $150,000 and $170,000 in Zone 9 funding, which financial plan the funding came from, and why there were remaining funds available, if from a previous financial plan.

The 2025–27 Financial Plan includes $170,000 in FY 2025–26 and $150,000 in FY 2026–27 to support the City's annual silt removal maintenance program. These funds were approved by the Zone 9 Flood Control Committee to support projects that reduce flood risk within the San Luis Obispo Creek Watershed, as set forth in Amendment No. 1 to the City-County Zone 9 Reimbursement Agreement, Section A.1, “Types of Activities Eligible for Reimbursement”.

County Zone 9 funding supports permitting, design, and construction of annual sediment removal work at locations prioritized based on their silt accumulation, as well as available funds. Each project’s construction costs typically range from $125,000 to $175,000, depending on the number of sites chosen for silt removal and the volume of sediment requiring removal.

Funding from previous financial plans remains available because a silt removal project has not been completed since 2023.

No project was performed in Summer 2024 due to standing water within the creeks that could not be removed under the existing permit conditions. Staff began an effort to update the permits to allow for removal of standing water in future projects.

In 2025, staff prepared a project for construction but received unresponsive bids, and there was insufficient time to re-advertise the project, award a contract, and complete construction within the environmental permit window.

Item 5i – Authorization to Award Silt Removal Page 2
For the current project, the permits have been revised to allow dewatering, providing greater flexibility to complete the work even if standing water is present during construction. The current project consolidates deferred silt removal locations from prior years into a single contract, maximizing the use of available funding and completing more needed work in advance of winter weather.

Remaining funding will be utilized to advance environmental permitting and design work for silt removal locations prioritized for Fall 2027. 2) Since there is funding left over, why are staff not proposing additional work within Laguna Lake.

Sediment removal within Laguna Lake is not included in the City's Waterway Management Plan Stream Management and Maintenance Program or the associated programmatic permits used for the City's routine Silt Removal projects.

The programmatic permits authorize sediment removal activities at 14 designated locations throughout the City's creek system but do not include Laguna Lake.

Additionally, dredging of Laguna Lake is not an eligible reimbursable expense under the City/County Zone 9 Reimbursement Agreement. As a result, Laguna Lake dredging is funded through the City's General Fund, with the next dredging project currently planned for FY 2028–29. The City currently has an environmental consultant, SWCA, under contract to assist with reinitiating the permitting process for the expired permits. City staff and SWCA are coordinating on the permit strategy and preparing the necessary documentation for permit submittal.

Item 5h
Department: Public Works
Cost Center: 5301
For Agenda of: 8/4/2026
Placement: Consent
Estimated Time: N/A
FROM: Aaron Floyd, Public Works & Utilities Director
Prepared By: Anthony Ramos, Senior Civil Engineer
SUBJECT: AUTHORIZATION TO AWARD SILT REMOVAL PROJECT 2026, SPECIFICATION 2000198-04

RECOMMENDATION

1. Approve the project plans and special provisions for the Silt Removal 2026 project, Specification 2000198-04; and,

2. Award a construction contract (Attachment A) to Andrew Brown General Engineering Inc. in the amount of $218,897 for the Silt Removal 2026 project, Specification 2000198-04; and,

3. Authorize the City Engineer to issue Contract Change Orders up to the available project budget (Account 2000198), and up to any amended budget subsequently approved by the City Manager per City Purchasing Policy approval thresholds; and,

4. Find this action consistent with the Final Programmatic Environmental Impact Statement/Environmental Impact Report (EIS/R), dated October 9, 2003, as certified by City Council through Resolution No. 9494

POLICY CONTEXT
On May 17, 2022, Council approved a Purchasing Policy Update to the Financial Management Manual (Resolution No. 11328), requiring Council authorization to award Public Works contracts exceeding $200,000.

This routine maintenance work is supported by the San Luis Obispo County Zone 9 Flood Control and Water Conservation District, Zone 9 Advisory Committee and is funded through annual budget allocations from the County, as described by the City/County Zone 9 Reimbursement Agreement. Furthermore, this annual effort implements recommendations of the Waterway Management Plan, Volume II, Stream Management and Maintenance Program, which was adopted by the City and County in 2003.

DISCUSSION
Background
During rain events, stormwater carries silt and other fine materials into creeks which then create silt deposits at points where flow velocity decreases. Over time, the accumulation

Item 5h
of these silt deposits reduces the creeks’ overall capacity to convey flow, resulting in a higher risk of localized flooding in severe storm events. That risk can be mitigated through regular removal of build-up, silt, and debris. This silt removal project will remove accumulated silt at critical points in the City’s creek system, as part of an annual maintenance effort to remove debris, sediment, and flow restrictive vegetation in advance of winter weather.

As the work occurs within an active creek environment, the project is regulated by the Regional Water Quality Control Board, California Department of Fish and Wildlife, and the U.S. Army Corps of Engineers. Construction must occur between June 15 and October 1 to comply with environmental permits and minimize potential impacts to wildlife and water quality.

The City is also pursuing a separate Capital Improvement Project to dredge Laguna Lake.

While this annual Silt Removal Project is covered under the City's existing routine maintenance regulatory approvals, including Nationwide Permits and associated programmatic authorizations, the Laguna Lake Dredging project requires separate environmental permits because of its scope. The permitting process for the dredging project has been initiated and is being coordinated independently, allowing this annual maintenance project to proceed under its existing environmental approvals.

Project
The project was bid using a Base Bid and three Additive Alternates to provide a better understanding of project costs and allow the maximum amount of silt removal to be completed within the available project budget. These locations were selected based on site visits, observed sediment accumulation, and the time elapsed since sediment was last removed at each location. This year’s project will address up to four of the following sites:

Tank Farm at Hollyhock (Base Bid)
This site is located on a tributary of the east fork of San Luis Obispo creek as it passes under Tank Farm Road at the junction with Hollyhock Road. The project proposes to remove accumulated sediment from beneath the bridge and immediately downstream to the natural level of the creek bed upstream. In addition, a knoll with trees on it will be removed to reduce sediment accumulation. Removing the sediment, knoll, and trees from this location reduces the potential for flooding during severe storms that poses a significant threat to the safety of residents and property in the immediate area.

Prefumo at Madonna Phase II Sediment Removal (Additive Alternate #1) This site is located downstream of Madonna Road Bridge with the nearest physical address adjacent to 1610 Oceanaire Drive. The project proposes to remove accumulated sediment and debris that has become established with vegetation that further restricts the outflow of water from Laguna Lake. Removing sediment from this location reduces the potential for flood waters inundating the surrounding neighborhood homes located at the top of the engineered channel on the west bank.

Item 5h
SLO Creek at LOVR (Additive Alternate #2)
This site is located downstream of the City’s Wastewater Reclamation Facility immediately under Los Osos Valley Road in the east barrel. This project proposes to remove accumulated sediment from the easterly barrel to provide more capacity for San Luis Obispo Creek. Removing the sediment reduces the potential for water backing up and potentially flooding the downtown area during larger storms.

Larkspur at Goldenrod (Additive Alternate #3)
This site is located on Islay Creek as it passes under Larkspur Street at the junction with Goldenrod Lane in a residential neighborhood. The project proposes to remove accumulated sediment from beneath the bridge and immediately upstream and downstream. In addition, several trees will be removed to reduce sediment accumulation.

Removing sediment and trees from this location reduces the potential for flooding during larger storms that poses a significant threat to the safety of residents and property in the immediate area and the residential neighborhoods surrounding the project.

Vicinity Map
The Silt Removal 2026 project, Specification 2000198-04, was advertised on June 4, 2026, with bids opened on July 2, 2026. As identified above, the project was advertised with a Base Bid and three Additive Alternates to maximize the scope of silt removal that can be accomplished this season, based on the available funding. Five bids were received and opened, and Andrew Brown General Engineering was the apparent low bidder with a bid of $218,897 for the total project, which was $26,103 below the Engineer’s Estimate of $245,000. The proposed contract award consists of $218,897 (inclusive of base bid and all additive alternates), as the total project bid is within the Publicly Disclosed Funding amount of $350,000, as disclosed to contractors in the Notice to Bidders, in compliance with Public Contract Code Section 20103.8C.

Item 5h
The Contractor’s references, license, and registration with the Department of Industrial Relations have been verified. Consequently, the contract is proposed to be awarded to Andrew Brown General Engineering as the lowest responsive and responsible bidder (Attachment A).

Bid Summary Bid Total
Engineer’s Estimate $245,000
John Madonna Construction $339,050
Rob Reynolds Construction $334,503
R. Burke Corporation $311,700
Souza Engineering Contracting $248,244
Andrew Brown General Engineering $218,897
Previous Council or Advisory Body Action
The annual silt removal projects are identified in the City’s financial plans with Council approving $170,000 in Fiscal Year 2025-26 and $150,000 in Fiscal Year 2026-27 for this project as part of the 2025-27 Financial Plan for this project as reflected in the fiscal impact section.

Public Engagement
Public engagement was conducted during planning associated with the 2025-27 Financial Plan as well as through the Zone 9 Advisory Committee meeting where annual silt removal budget allocations are recommended and discussed. As this is an annual project, similar outreach efforts have been carried out in previous financial plans as well.

To ensure direct communication with the community, affected residents within the limits of work will be notified of upcoming construction via door hangers. These notices, designed in accordance with City standards, will be distributed to all properties adjacent to the work area and will clearly outline the project's start and end dates. Additionally, in areas where parking must be restricted, "No Parking" signs will be clearly posted at least 24 hours in advance of the work.

Community impacts are expected to be minimal and short-term. Nearby residents may notice construction equipment operating in the creek corridor, minor noise, and temporary restrictions to portions nearby trails or creek banks during work.

Community benefits include reducing the risk of localized flooding, supporting neighborhood protection, and contributing to the City’s overall creek maintenance efforts.

CONCURRENCE
The project has been reviewed and has concurrence from the Public Works Branch and the City Administration’s Office of Sustainability and Natural Resources.

Item 5h

ENVIRONMENTAL REVIEW
The project consists of minor annual sediment removal activities that are classified as Category 2 activities under the City of San Luis Obispo Creek Waterway Management Program (WMP). The WMP was evaluated through a Programmatic Environmental Impact Statement/Environmental Impact Report (EIS/R), including the Draft Programmatic EIS/R circulated for public review and the Final Programmatic EIS/R dated October 9, 2003. The Final Programmatic EIS/R was certified by the City Council on October 21, 2003, through Resolution No. 9494.

The Programmatic EIS/R provides environmental clearance for Category 2 routine maintenance activities. The proposed sediment removal activities are within the scope of the Programmatic EIS/R incorporated in the project contract documents and will be implemented in accordance with WMP standards, mitigation measures, and best management practices by the contractor during construction. As determined by the City Council in Resolution No. 9494, Category 2 activities will not significantly alter flooding conditions, will maintain existing channel conveyance capacity, and do not result in significant environmental impacts. Therefore, no subsequent environmental review is required under CEQA.

Permits for work within the creek were also acquired as part of this project from the California Department of Fish and Wildlife, Regional Water Quality Control Board and U.S. Army Corps of Engineers.

FISCAL IMPACT
Budgeted: Yes Budget Year: 2026-27
Funding Identified: Yes
Fiscal Analysis:

The City’s Silt Removal program is fully funded through Zone 9 funding administered from San Luis Obispo County. With the addition of the $150,000 allocated in the financial plan for Fiscal Year 26-27 and remaining balances from prior fiscal years, there is currently an available balance of $450,920.91 in the Zone 9 Silt Removal Account (2000198). The current available balance is sufficient to fund the project.

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund
(Capital Outlay)
- 2000198
$19.39 $19.39 $0 $0
General Fund
(Regional
Grant 1) -
200198
$450,901.52 $255,377.61 $195,523.91 $0
Total $450,920.91 $255,397 $195,523.91 $0

Item 5h

ESTIMATED PROJECT COST BY FUNDING SOURCES
Silt Removal 2026, Specification No. 2000198-04
Zone 9 Silt Removal
2000198-04 Project Total
Costs
401 Fund
Base Bid $44,061 $44,061
Additive Alternate 1 Bid $59,152 $59,152
Additive Alternate 2 Bid $47,541 $47,541
Additive Alternate 3 Bid $68,143 $68,143
Total Project Bid $218,897 $218,897
Construction Contingency (15%) $33,000 $33,000
Total Construction Estimate $251,897 $251,897
Permitting Fees $3,000 $3,000
Printing: $500 $500
Total Project Cost $255,397 $255,397
Current Project Balance $450,920.91
Post Project Balance $195,523.91
Publicly Disclosed Funding Amount $350,000
Remaining funding within the account will be utilized for surveying, design, and environmental services for the next round of silt removal work in summer/fall 2027.

ALTERNATIVES

1. Deny authorization to award – The City Council could choose to not award the Silt Removal 2026 project. This alternative could result in increased sediment accumulating in the channel that can lead to flooding of the creek.

2. Scope reduction - Award Base Bid Only, or Base Bid + Additive Alternate 1, or Base Bid + Additive Alternate 1 + Additive Alternate 2 – The City Council could choose to award any of the options listed above, each of which would reduce the overall project cost. However, reducing the project scope would allow sediment to continue accumulating within the channel at locations excluded from the contract, increasing the potential for localized flooding. Additionally, all required permits have already been obtained for the full project. Any locations omitted from the current contract would require new permitting efforts before future work could proceed, resulting in additional time and cost.

ATTACHMENTS
A - Draft Construction Contract, Specification No. 2000198-04

AGREEMENT
THIS AGREEMENT, made on _____________, by and between the City of San Luis Obispo, a municipal corporation and charter city, San Luis Obispo County, California (hereinafter called the City) and ANDREW BROWN GENERAL ENGINEERING, INC. (hereinafter called the Contractor).

WITNESSETH:

That the City and the Contractor for the consideration stated herein agree as follows:

ARTICLE 1, SCOPE OF WORK: The Contractor shall perform everything required to be performed, shall provide and furnish all of the labor, materials, necessary tools, expendable equipment, and all utility and transportation services required to complete all the work of construction of
SILT REMOVAL 2026,
SPECIFICATION NO. 2000198-04
in strict compliance with the plans and specifications therefor, including any and all Addenda, adopted by the City, in strict compliance with the Contract Documents hereinafter enumerated.

It is agreed that said labor, materials, tools, equipment, and services shall be furnished and said work performed and completed under the direction and supervision and subject to the approval of the City or its authorized representatives.

ARTICLE II, CONTRACT PRICE: The City shall pay the Contractor as full consideration for the faithful performance of this Contract, subject to any additions or deductions as provided in the Contract Documents, the contract prices as follows:

Item Item Unit of Estimated Item Price Total
No. SS(1) Description Measure Quantity (in figures) (in figures) 1 5, 14 AREA 1 – COMPLY WITH
PERMITS AND CEQA LS 1 $2,177.00 $2,177.00
2 13 AREA 1 - EROSION CONTROL
MEASURES LS 1
$2,894.00 $2,894.00
3* 19 AREA 1 - SILT REMOVAL CY 150 $145.00 $21,750.00
4 7, 12 AREA 1 - TRAFFIC CONTROL LS 1 $9,480.00 $9,480.00 5 20,
77 AREA 1 - TREE REMOVAL EA 5 $547.00 $2,735.00
6 13 AREA 1 - DEWATERING LS 1 $2,189.00 $2,189.00
7 AREA 1 - CONSTRUCT AND
REMOVE TEMPORARY BERM LS 1
$2,836.00 $2,836.00
2-1 5, 14 AREA 2 - COMPLY WITH
PERMITS AND CEQA LS 1 $2,177.00 $2,177.00

Item Item Unit of Estimated Item Price Total
No. SS(1) Description Measure Quantity (in figures) (in figures) 2-2 13 AREA 2 - EROSION CONTROL
MEASURES LS 1 $3,217.00 $3,217.00
2-3* 19 AREA 2 - SILT REMOVAL CY 190 $179.00 $34,010.00 2-4 7, 12 AREA 2 - TRAFFIC CONTROL LS 1 $4,575.00 $4,575.00 2-5 20,
77 AREA 2 - TREE TRIMMING
BRANCH REMOVAL EA 2
$467.00 $934.00
2-6 17 VEGETATION REMOVAL
(CLEAR AND GRUB) LS 1
$9,733.00 $9,733.00
2-7 13 AREA 2 - DEWATERING LS 1 $3,549.00 $3,549.00
2-8 AREA 2 - REMOVE AND
REPLACE (E) ROCKS LS 1
$957.00 $957.00
3-1 5, 14 AREA 3 - COMPLY WITH
PERMITS AND CEQA LS 1
$2,177.00 $2,177.00
3-2 13 AREA 3 - EROSION CONTROL
MEASURES LS 1
$3,528.00 $3,528.00
3-3* 19 AREA 3 - SILT REMOVAL CY 400 $84.00 $33,600.00
3-4 7, 12 AREA 3 - TRAFFIC CONTROL LS 1 $4,575.00 $4,575.00 3-5 20,
77 AREA 3 - TREE REMOVAL EA 7 $523.00 $3,661.00
4-1 5, 14 AREA 3 - COMPLY WITH
PERMITS AND CEQA LS 1
$
2,177.00
$
2,177.00
4-2 13 AREA 3 - EROSION CONTROL
MEASURES LS 1
$3,528.00 $3,528.00
4-3* 19 AREA 3 - SILT REMOVAL CY 150 $290.00 $43,500.00 4-4 7, 12 AREA 3 - TRAFFIC CONTROL LS 1 $7,266.00 $7,266.00 4-5 20,
77 AREA 3 - TREE REMOVAL EA 11 $400.00 $4,400.00
4-6 13 AREA 3 - DEWATERING LS 1 $3,549.00 $3,549.00
4-7 77 POTHOLING EA 3 $1,241.00 $3,723.00
(1) refers to section in the Standard Specifications, with modifications in the Special Provisions, that describe required work.
* Bid item exempt from Section 9-1.06B and 9-1.06C of the Standard Specifications. The unit price will not be adjusted regardless of the final bid item quantity.

BID TOTAL: $218,897.00
Payments are to be made to the Contractor in compliance with and subject to the provisions embodied in the documents made a part of this Contract.

If any dispute arises regarding the work or contract price, Contractor must follow the procedures in the contract documents, including the requirements on change order requests and dispute resolution.

ARTICLE III, COMPONENT PARTS OF THIS CONTRACT: The Contract consists of the following documents, all of which are as fully a part thereof as if herein set out in full, and if not attached, as if hereto attached:

1. Notice to Bidders and Information for Bidders

2. Standard Specifications and Engineering Standards

3. Special Provisions, any Addenda, Plans and Contract Change Orders

4. Caltrans Standard Specifications and Standard Plans 2024

5. Accepted Bid and Bid Bond

6. List of Subcontractors

7. Labor Code Section 1725.5 Statements

8. Bidder Acknowledgements

9. Qualifications

10. Noncollusion Declaration

11. Agreement and Bonds

12. Insurance Requirements and Forms
ARTICLE IV INDEMNIFICATION: The Contractor shall indemnify, defend with legal counsel approved by City, and hold harmless City, its officers, officials, employees and volunteers from and against all liability, loss, damage, expense, cost (including without limitation reasonable legal counsel fees, expert fees and all other costs and fees of litigation) of every nature arising out of or in connection with the acts or omissions of Contractor, its employees, subcontractors, representatives, or agents, in bidding or performing the work or in failing to comply with any obligation of Contractor under this Agreement, except such loss or damage which is caused by the sole or active negligence or willful misconduct of the City. Should conflict of interest principles preclude a single legal counsel from representing both the City and the Contractor, or should the City otherwise find the Contractor’s legal counsel unacceptable, then the Contractor shall reimburse the City its costs of defense, including without limitation reasonable legal counsel fees, expert fees and all other costs and fees of litigation. The Contractor shall promptly pay any final judgment rendered against the City (and its officers, officials, employees and volunteers) with respect to claims determined by a trier of fact to have been the result of the Contractor’s acts or omissions in bidding or performing the work or in failing to comply with any obligation of Contractor under this Agreement. It is expressly understood and agreed that the foregoing provisions are intended to be as broad and inclusive as is permitted by the law of the State of California and will survive termination of this Agreement.

The Contractor obligations under this section apply regardless of whether such claim, charge, damage, demand, action, proceeding, loss, stop notice, cost, expense, judgment, civil fine or penalty, or liability was caused in part or contributed to by an Indemnitee.

However, without affecting the rights of the City under any provision of this agreement, the Contractor shall not be required to indemnify and hold harmless the City for liability attributable to the active negligence of City, provided such active negligence is determined by agreement between the parties or by the findings of a court of competent jurisdiction. In instances where the City is shown to have been actively negligent and where the City’s active negligence accounts for only a percentage of the liability involved, the obligation of the Contractor will be for that entire portion or percentage of liability not attributable to the active negligence of the City.

ARTICLE V: It is further expressly agreed by and between the parties hereto that should there be any conflict between the terms of this instrument and the bid of said Contractor, then this instrument shall control and nothing herein shall be considered as an acceptance of the said terms of said bid conflicting herewith.

ARTICLE VI LABOR CODE COMPLIANCE: This Agreement is subject to all applicable requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code, including requirements pertaining to wages, working hours and workers’ compensation insurance, as further specified in the contract documents.

The project is subject to the prevailing wage requirements applicable to the locality in which the work is to be performed for each craft, classification or type of worker needed to perform the work, including employer payments for health and welfare, pension, vacation, apprenticeship and similar purposes. Copies of these prevailing rates are on file with the City and are available online at http://www.dir.ca.gov/DLSR.

City may not enter into the Agreement with a bidder without proof that the bidder and its subcontractors are registered with the DIR to perform public work pursuant to Labor Code section 1725.5, subject to limited legal exceptions.

Pursuant to Labor Code § 1861, by signing this Agreement, Contractor certifies as follows:
“I am aware of the provisions of Labor Code § 3700 which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work on this contract.” IN WITNESS WHEREOF, the parties to these presents have hereunto set their hands this year and date first above written.

APPROVED AS TO FORM CONTRACTOR:

ANDREW BROWN GENERAL ENGINEERING,
INC
______________________________
J. Christine Dietrick
City Attorney
_______________________________
Andrew W. Brown
President

CITY OF SAN LUIS OBISPO
A Municipal Corporation
______________________________
Whitney McDonald, City Manager

City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: August 4, 2026
TO: Mayor and Council
FROM: Scott Collins, Assistant City Manager
Prepared By: Matt Horn, Major City Projects Manager
VIA: Whitney McDonald, City Manager
SUBJECT: ITEM # 6a- PRADO INTERCHANGE AND PRADO BRIDGE PROJECTS Staff received the following questions regarding the Prado Interchange and Prado Bridge Projects. The questions are below with staff’s response shown in italics:
1) Is there any marked difference in cost for the various aesthetic treatments? Some of them seem to have substantially more elements and I would imagine those will add to the cost.

Yes. Based on the project engineer’s preliminary assessment, the three aesthetic themes are expected to have different costs because they include different quantities and types of architectural treatments. Using the Base Theme as a relative cost index of 1.0, the preliminary comparison is:
 Base Theme: 1.0
 Modern Mission Theme: approximately 1.5 times the Base Theme  Mission Theme: approximately 1.75 times the Base Theme These factors are preliminary and compare only the relative costs of the aesthetic treatments. They do not mean that the total Interchange Project cost would increase by these percentages. The actual cost difference will depend on the final combination of wall treatments, fencing, railings, landscaping, lighting, materials, and other components selected for incorporation into the project.

Because the themes remain conceptual, the project team recommends waiting until completing additional coordination with the Caltrans District Landscape Architect and receiving input from Caltrans Structures before preparing detailed cost estimates. That coordination will clarify which treatments are acceptable and how they must be incorporated into the structural design. Additionally, the themes are also composed of individual elements that can be combined or omitted from a theme. Council may identify a preferred overall theme while selecting or omitting specific components to balance gateway character. Following Council direction and further Caltrans coordination, the selected aesthetic approach will be refined and a more detailed cost estimate prepared.

ITEM # 6a- PRADO INTERCHANGE AND PRADO BRIDGE PROJECTS Page 2 2) SPR review: Is the Caltrans review process iterative in that they can make minor or moderate requirements to change the design and staff responds to each of those or is it a final review report and the staff decides what is feasible to modify? “Any substantive change would return to the council” What’s the threshold for substantive? Is it cost or design or both? Caltrans review of the Supplemental Project Report (SPR) is expected to be iterative. The City will submit the draft SPR, and Caltrans may provide comments or require revisions to the supporting analyses, design assumptions, or documentation. The project team will respond to those comments and incorporate changes necessary to obtain Caltrans approval. The City may evaluate how best to address a Caltrans comment, but it cannot unilaterally decline a requirement that Caltrans determines is necessary for work within the State right-of-way or for approval of the SPR.

For purposes of the proposed delegation, a substantive change would be one that materially departs from the project scope or policy direction approved by Council.

This determination would consider both design and financial impacts. Examples could include a significant change to the approved roadway or bridge configuration, removal or reduction of bicycle or pedestrian improvements, a change to Council’s selected aesthetic direction, or acquisition of substantially more right-of-way.

Minor or moderate technical refinements that remain consistent with Council direction, such as adjustments to dimensions, structural details, drainage features, construction methods, quantities, or cost estimates within the approved project scope, would be addressed administratively. Revisions in excess of this threshold would return to Council before final approval.

Item 6a
Department: Public Works
Cost Center: 5009
For Agenda of: 8/4/2026
Placement: Public Hearing
Estimated Time: 120 mins
FROM: Scott Collins, Assistant City Manager
Prepared By: Matt Horn, Major City Projects Manager
SUBJECT: INTRODUCE AN ORDINANCE TO AMEND TITLE 13, CHAPTER 13.12

OF THE MUNICIPAL CODE TO ESTABLISH A NEW UNDERGROUND

UTILITY DISTRICT COMPRISING THE LIMITS OF THE PRADO

INTERCHANGE PROJECT AND PROVIDE DIRECTION ON THE PRADO

ROAD INTERCHANGE PROJECT AND PRADO CREE

RECOMMENDATION
Prado Road Interchange Recommendations

1. Introduce a draft Ordinance entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, amending Section 13.12.040 of the San Luis Obispo Municipal Code to Establish a New Underground Utility District 17” (Attachment A & B); and

2. Receive and file the Final Value Analysis, Draft Bridge Type Selection and Wall Type Selection Reports which provides the technical basis for the Supplemental Project Report and final design development (Attachment D, E & F); and

3. Authorize the Assistant City Manager to approve and execute the final Caltrans Supplemental Project Report (SPR) (Attachment G) upon completion of the remaining technical appendices, provided no substantive changes are made to the project scope, purpose, or core recommendations; and

4. Select an Aesthetic Theme (Attachment H) for the Interchange Project:
a. “Figure 4 – Base Theme”; or
b. “Figure 5 – Mission Theme”; or
c. “Figure 6 – Modern Mission Theme”; and

5. Provide direction on gateway branding by either:
a. Including City branding lettering ("San Luis Obispo") to establish a regional gateway landmark; or
b. Advancing a more heavily landscaped area instead of City branding; and

6. Direct staff to evaluate a future Class I shared-use path along Elks Lane during the next update to the City's Active Transportation Plan and, where feasible, acquire the necessary right-of-way in conjunction with the Prado Road Interchange Project to preserve the opportunity for future implementation; and Prado Creek Bridge Recommendations

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7. Receive and file the Preliminary Value Analysis Study (Attachment I) and approve Value Analysis implementing design alternatives 1.0, 3.0, 4.0, 5.0, and 6.0 and not implementing design alternatives 2.0 and 7.0; and

8. Authorize the Finance Director to make the following budget revisions:
a. Decrease the project’s appropriation of Federal Earmark grant funds from $4.130 million to $2.065 million to resolve an accounting duplication; and b. Decrease the projects appropriation of Federal Highway Bridge funds from $6.0 million to $0 to more appropriately align the funds with the anticipated reception timeframe; and

9. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Authorizing Budget Adjustments for the Prado Creek Bridge Replacement Project.” (Attachment J)
Prado Creek Bridge & Prado Road Interchange Projects Recommendation

10. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, Authorizing Submittal of Grant Applications for the Prado Road Interchange Project and Prado Creek Bridge Replacement Project, and requiring Council Appropriation upon Grant Award.” (Attachment K)

REPORT-IN-BRIEF
This report presents several policy and implementation actions necessary to continue advancing the Prado Road Interchange Project (Interchange Project) and Prado Creek Bridge Replacement Project (Bridge Project) through final design and toward construction.

For the Interchange Project, Council is being asked to establish an Underground Utility District, receive the completed Value Analysis and draft Bridge and Wall Type Selection Reports, authorize approval of the final Supplemental Project Report upon completion of technical review, approve the recommended interchange aesthetic theme and provide direction on gateway branding and a future Class I shared-use path along Elks Lane.

For the Bridge Project, Council is being asked to consider receiving the Preliminary Value Analysis Study, approving the recommended design refinements to reduce project costs while maintaining project functionality and performance, and authorizing budget revisions to grants to align funding appropriations with authorized reimbursements and eligible funding sources. Implementation of the recommended Value Analysis alternatives is estimated to reduce construction costs by approximately $5 million, resulting in an estimated construction cost of approximately $23 million in 2026 dollars.

Collectively, these actions establish key policy direction for both projects improving longterm project affordability and allowing the City to continue advancing two high-priority transportation infrastructure projects.

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POLICY CONTEXT
The Prado Road Interchange Project (Interchange Project) and Prado Creek Bridge Replacement Project (Bridge Project) are legacy transportation investments that implement the City's adopted vision for the Prado Road corridor. Together, these projects advance the City's Major City Goals for Infrastructure and Sustainable Transportation, Housing and Neighborhood Livability, and Open Space, Climate Action, and Resilience.

In addition, these projects directly implement numerous policies contained within the General Plan Land Use and Circulation Element (LUCE) and the 2021 Active Transportation Plan (ATP). The LUCE identifies the Interchange Project as “Project 19” and identifies improvements to the Prado Road corridor on both sides of US 101 as Projects 1 and 2. While the LUCE does not separately identify the Bridge Project, the project is located within the Prado Road Extension East corridor identified as Project 2.

See pages 2-31 through 2-34. The ATP identifies both the Interchange Project and Bridge Project as components of the Tier 1 bicycle and pedestrian network, as shown on Figure 27 on page 134. Tier 1 projects represent the City’s highest priority active transportation improvements and are identified as having the greatest potential to increase bicycle and pedestrian travel.

The General Plan identifies Prado Road as a critical east-west transportation arterial serving motorists, transit, emergency responders, bicyclists, and pedestrians. The corridor is planned to provide continuous, high-quality multimodal connectivity between South Higuera Street, US 101, Dalidio Drive, San Luis Ranch, and future development areas to the east. Both the Land Use and Circulation Element and the Active Transportation Plan recognize the historical lack of east-west connectivity across the southern portion of the City.

The coordinated Prado Road improvements are intended to improve safety and operations for all users. They will provide modern roadway geometry, safer intersections, improved bicycle and pedestrian facilities, and more direct connections across US 101.

The projects will also strengthen emergency and public-safety response by providing additional, more reliable east-west access between neighborhoods, employment areas, public facilities, and the regional highway system.

By creating a new connection across US 101 and improving the surrounding interchange, bridge, and roadway network, the projects are expected to distribute traffic more effectively, reduce circuitous travel, and relieve operational pressure on the adjacent Los Osos Valley Road and Madonna Road interchanges. Improved traffic flow will help reduce vehicle queuing at freeway ramps and interchange intersections, which in turn supports safer highway operations by reducing the potential for queue-related conflicts, sudden braking, and spillback onto US 101. Together, these improvements advance regional mobility, multimodal safety, emergency access, and the infrastructure needed to support long-term community growth.

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Environmental documents prepared for the San Luis Ranch, Avila Ranch, Froom Ranch, and Margarita Area Specific Plans identify the Prado corridor infrastructure as necessary to address cumulative regional circulation impacts. Both the Interchange and Bridge projects are reimbursable facilities within the City’s Citywide Transportation Impact Fee (TIF) Program, allowing incoming development to contribute its proportional share toward construction. Furthermore, the San Luis Ranch Development Agreement stipulates dedicated financial contributions explicitly restricted to the Interchange Project.

An Underground Utility District is a defined geographic area established by City Council ordinance in which existing overhead electric, telecommunications, and related utility facilities are required to be converted to underground service. Chapter 13.12 Underground Utilities, of the San Luis Obispo Municipal Code establishes the mechanism for creating these districts. Chapter 13.12.030 requires the City Council to adopt an ordinance and the City to formally notify affected property owners before overhead utilities may be converted to underground service. The City has a long-standing policy of undergrounding overhead facilities where practical and has previously established sixteen underground utility districts. More information on the proposed Underground Utility District can be found further into this report in Section “New Underground Utility District 17 for the Interchange Project”.

DISCUSSION
Background
Prado Road is planned to be one of the City's primary east-west transportation corridors and serves as a critical connection between residential neighborhoods, employment centers, regional commercial destinations, industrial areas, public facilities, and US 101.

The corridor accommodates local and regional traffic, designated truck routes, emergency response, transit, bicyclists, and pedestrians. Recognizing its importance, the City's General Plan Circulation Element identifies Prado Road as a key arterial necessary to improve community connectivity and support planned growth in the southern portion of San Luis Obispo. The General Plan further identifies three complementary Capital Improvement Plan projects that together will establish a continuous multimodal transportation corridor extending from Broad Street on the east to Madonna Road on the west. These coordinated projects include:

1. Bridge Project: Replacement of the existing Prado Road bridge over San Luis Obispo Creek with a wider bridge capable of accommodating future traffic volumes while providing enhanced bicycle and pedestrian facilities. The project also reconstructs the Prado Road/South Higuera Street intersection.

2. Interchange Project: Construction of a new Prado Road overcrossing of US 101, reconstruction of the northbound interchange ramps, addition of a northbound auxiliary lane between Prado Road and Madonna Road, realignment of Elks Lane, and widening of Prado Road.

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3. Prado Road Extension Project: Future extension of Prado Road from its current eastern terminus to Broad Street (State Route 227), creating a continuous eastwest arterial connection and improving access to future development areas identified in the General Plan. While this project is dependent upon future development and right-of-way acquisition, it will ultimately complete the eastern segment of the Prado Road corridor.

Figure 1 – Related Project Vicinity Map
Interchange Project
The Interchange Project is the largest and most complex transportation improvement planned within the Prado Road corridor. The project has been under development for more than two decades and is sponsored by the City of San Luis Obispo in partnership with the California Department of Transportation (Caltrans). Project development has included completion of a Project Study Report (PSR), Project Approval and Environmental Document (PA&ED), environmental clearance under both the California Environmental Quality Act (CEQA) and National Environmental Policy Act (NEPA), and approval of the Project Report authorizing advancement into the Plans, Specifications and Estimates (PS&E) phase of design.

The project addresses long-standing transportation deficiencies resulting from the absence of a continuous east-west crossing between the Los Osos Valley Road and Madonna Road interchanges. By providing a direct connection across US 101, the project will improve circulation throughout southern San Luis Obispo, reduce vehicle travel distances, relieve congestion at adjacent interchanges, improve multimodal connectivity, enhance emergency response routes, and provide the transportation infrastructure

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necessary to accommodate planned residential and commercial growth identified in the General Plan.

On September 5, 2023, the City Council reviewed multiple interchange alternatives, selected the Preferred Alternative, and approved the Project Report for advancement through the Caltrans project delivery process. Subsequently, on February 18, 2025, the City Council awarded the PS&E design contract to Consor Engineering to advance final project design. During that meeting, the Council also expressed concern regarding the project's estimated cost, the potential need for significant debt financing, and the importance of pursuing additional regional, state, and federal funding. To address these concerns, the Council supported implementation of a comprehensive Value Analysis during final design to identify opportunities to reduce construction costs while maintaining project performance and long-term functionality.

On November 4, 2025, the City Council reviewed the preliminary Interchange Project Value Analysis and approved a preferred set of conceptual, cost-saving design refinements.

Bridge Project
Immediately east of the Interchange Project, the City is advancing the Bridge Project.

The Bridge Project will replace the existing Prado Road bridge over San Luis Obispo Creek while improving safety, multimodal access, and utility reliability.

The existing bridge was constructed in 1957 and carries Prado Road across San Luis Obispo Creek near the South Higuera Street intersection. Caltrans inspects the bridge every two years as part of its bridge inspection program. In 2001, Caltrans classified the bridge as structurally deficient, indicating that one or more primary structural components had deteriorated to a condition requiring significant rehabilitation or replacement. The bridge was also previously identified as functionally obsolete because of its limited width, lack of modern bicycle and pedestrian facilities, and inability to accommodate current and projected transportation demands. Based on its structural condition and functional limitations, the City and Caltrans concluded that complete bridge replacement represents the most appropriate long-term solution.

The new bridge will replace the existing three-span reinforced concrete structure with a single-span precast concrete bridge that eliminates supports within the creek channel, maintaining hydraulic performance, reducing long-term maintenance requirements, and minimizing environmental impacts. The project also includes widening Prado Road and the South Higuera Street intersection, construction of modern bicycle and pedestrian facilities, ADA-compliant sidewalks and crossings, retaining walls, creek bank stabilization, storm drainage improvements, utility relocation, and environmental mitigation.

Because the bridge serves as a major utility corridor, the project also includes relocation and protection of critical water, recycled water, sanitary sewer, natural gas, and

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communications, and electrical infrastructure necessary to maintain utility service throughout construction.

Current Milestones for both Projects and Council Considerations Both the Interchange Project and the Bridge Project have advanced through their respective project delivery processes. As design and technical studies have progressed, the project team has developed additional information and identified several key policy and implementation decisions that are now ready for City Council consideration.

For the Interchange Project, Council is being asked to consider establishing an Underground Utility District to facilitate undergrounding of existing overhead utilities within the project corridor, receiving the completed Value Analysis and the draft Bridge Type Selection and Wall Type Selection Reports, authorizing the Assistant City Manager to approve the final Supplemental Project Report upon completion of technical review, approving the recommended interchange aesthetic theme, providing direction regarding gateway branding, and providing direction to evaluate a future Class I shared-use path along Elks Lane through the next Active Transportation Plan update while preserving the opportunity for future implementation through strategic right-of-way acquisition.

For the Bridge Project, Council is being asked to consider receiving the Preliminary Value Analysis Study and approving the recommended design refinements that reduce project costs while maintaining the project's operational objectives, multimodal functionality, and long-term performance and authorizing administrative grant adjustments to reconcile funding appropriations, accurately reflect authorized grant reimbursements, and ensure consistency with eligible funding sources.

Collectively, these actions represent significant implementation milestones for both projects and will allow design, funding, and project delivery activities to continue while ensuring that major policy decisions remain under the direction of the City Council.

New Underground Utility District 17 for the Interchange Project Chapter 13.12, Underground Utilities, of the San Luis Obispo Municipal Code establishes the process for converting existing overhead utility facilities to underground systems. An Underground Utility District is a geographically defined area established by City Council ordinance within which designated overhead electrical, telecommunications, and related facilities must be relocated underground. Establishing a district creates the legal and administrative framework needed to coordinate the conversion among the City, utility providers, and affected property owners. It does not, by itself, approve construction, appropriate funding, or determine every party’s final cost responsibility.

The City has a long-standing policy of undergrounding overhead utility facilities where practical, particularly when the work can be coordinated with a major roadway, bridge, development, or corridor improvement. Undergrounding removes poles, wires, and guy anchors that can conflict with vehicles, sight distance, sidewalks, and bicycle facilities. It also improves utility-system resilience by reducing exposure to vehicle collisions, wind, fire, and other environmental disruptions; reduces long-term conflicts with roadway,

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drainage, landscaping, and other public improvements; improves corridor and gateway aesthetics; and creates additional usable space for pedestrians and bicyclists.

Coordinating undergrounding with a major capital project can also avoid separate future excavations, traffic closures, construction costs, and periods of public disruption.

In 1978, the City and Pacific Gas and Electric Company entered into a franchise agreement granting PG&E the right to construct, operate, and maintain electrical facilities within public rights-of-way. (Attachment C) The agreement requires PG&E to relocate its facilities when they conflict with a City street improvement and recognizes the City’s objective of undergrounding overhead facilities where practical. For voluntary undergrounding, cost responsibility is also governed by applicable California Public Utilities Commission rules. Under the anticipated framework, PG&E will calculate the cost of relocating and undergrounding its electrical facilities and provide a credit equal to the estimated cost of reconstructing the affected overhead system. The City will be responsible for the eligible incremental cost of undergrounding beyond that credit. Cost responsibilities for communications facilities and private service conversions will be established through applicable tariffs, franchise requirements, utility agreements, and the final district implementation plan.

The City most recently applied this framework to the adjacent Prado Creek Bridge Replacement Project. In 2022, the City Council established Underground Utility District No. 16 for the Prado Road and South Higuera Street bridge and intersection improvements. District No. 16 provided the framework for the City, PG&E, communications providers, and affected property owners to coordinate undergrounding with the Bridge Project. Proposed District No. 17 would continue this coordinated approach along the next segment of the Prado Road corridor within the Interchange Project limits. Together, the two districts would support a more coherent, safer, and more resilient corridor extending through the bridge and interchange project areas.

Within the proposed District No. 17 boundaries, PG&E electrical facilities, AT&T and Charter/Spectrum communication lines, and other communications infrastructure are located on overhead poles within or adjacent to the public right-of-way. Several poles conflict with areas that will be reconstructed for the proposed roadway geometry, bridge structures, retaining walls, bicycle and pedestrian facilities, landscaping, and related improvements. Maintaining the overhead system would require substantial pole relocations, constrain the final project design, and retain overhead infrastructure within a corridor undergoing comprehensive reconstruction.

The properties affected by District No. 17 generally include parcels within the district boundaries and properties receiving service from the overhead facilities designated for removal. The district map included as Attachment B identifies the geographic limits of the proposed district. During final design, the City and utility providers will confirm the affected facilities, service connections, and properties requiring coordination. Some properties may require modifications to private electrical or communications service equipment before they can receive underground service. The City and utility providers will coordinate directly with those property owners.

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The properties affected by District No. 17 generally include parcels located within the district boundaries and properties receiving service from the overhead facilities designated for removal. The district map included as Attachment B identifies the geographic limits of the proposed district. Coordination is already underway with affected properties that are currently under development or active construction so that proposed site improvements can be planned to accommodate future underground utility service. If Council establishes District No. 17, the City and utility providers will confirm the service connections needs and commence coordination as the design details are formalized.

Chapter 13.12.030 requires formal notice to affected property owners and utility owners before the City Council establishes an underground utility district. For proposed District No. 17, notice was mailed to potentially affected property owners and published in The New Times at least 30 days before the public hearing. The notice described the proposed district and informed affected parties of the opportunity to participate in the Council hearing. Utility providers have also been informed of the City’s intent to pursue undergrounding and will continue participating in coordination throughout final design.

This district-specific notification supplements the broader public outreach conducted for the Interchange Project, including public workshops, community meetings, advisory-body presentations, environmental review, project website updates, and stakeholder coordination.

Following the required notice and public hearing, the City Council may establish the district by ordinance. If adopted, the City and utility providers will complete detailed design, confirm cost responsibilities, coordinate private service conversions, establish an implementation schedule, construct the underground system, transfer customers to underground service, and remove the former overhead facilities. The work will be coordinated with Interchange Project construction whenever practical. After conversion, each utility provider will remain responsible for operating and maintaining its underground facilities in accordance with applicable regulations and agreements. The district boundaries will remain established in the Municipal Code unless subsequently amended or repealed by the City Council.

Establishing District No. 17 would allow feasible overhead facilities to be converted underground as part of the Interchange Project instead of through a separate future utility project. This approach would eliminate conflicts between utility infrastructure and transportation improvements, improve safety and sight distance for roadway users, support planned bicycle and pedestrian facilities, increase system reliability and resilience, reduce future maintenance conflicts, and enhance the appearance of the Prado Road corridor and interchange gateway. The draft District No. 17 ordinance, district overview map, and 1978 PG&E franchise agreement are provided as Attachments A, B, and C.

Final Value Analysis Report for the Interchange Project As previously mentioned, City Council reviewed the preliminary Interchange Project Value Analysis on November 4, 2025, and approved a preferred set of conceptual, cost-saving

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design refinements. These refinements established the baseline for the detailed engineering, traffic modeling, and structural design that are now being incorporated into the Interchange Project's Supplemental Project Report.

The completed Value Analysis removed $20 million in construction costs from the Interchange’s structural costs as compared to the cost shown in the approved Project Report via three major systemic interventions:
 Lane Configuration Optimization: Micro-simulation modeling verified that downsizing the overcrossing bridge from four through lanes to two-lane crosssection west of the northbound ramp terminal maintains acceptable traffic operations through 2050. This adjustment avoids operational degradation at adjacent Madonna and Los Osos Valley Road interchanges. A four-lane crosssection is preserved exclusively east of the ramp terminals where localized turning movements peak near South Higuera Street. This modification successfully eliminates millions in structural and roadway costs.
 Active Transportation Consolidation: The total bridge deck width was reduced by consolidating bike facilities. The refined configuration delivers an expansive, bidirectional Class I shared-use path on the south side of Prado Road paired with a standard sidewalk on the north side. This layout maintains safe, high-quality multimodal connectivity while significantly dropping structural deck mass.  Structural Footprint Minimization: The overall elevated structure was shortened by approximately 1,300 linear feet by extending internal bridge spans and integrating strategically placed retaining walls. Crucially, the layout was completely reengineered to eliminate a structural support pier within the median of US 101. This choice dramatically reduces construction-phase falsework complexity, eliminates high-risk highway lane closures, and completely removes long-term median maintenance liabilities.

Figure 2 below provides a rendering of portions of the Interchange Project prior to incorporating the Value Analysis (VA) recommendations, while Figure 3 illustrates the refined design following incorporation of the VA recommendations. The renderings focus on the US 101 overcrossing and the intersection of Prado Road with the northbound US 101 on and off ramps. The primary differences include a narrower overcrossing bridge, replacement of the column-supported roadway structure near the northbound ramp intersection with a Mechanically Stabilized Embankment (MSE) wall and abutment system, and improved aesthetic due to the refined design.

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Figure 2 – Interchange Project Prior to VA Work
Figure 3 – Interchange Project with VA Work Incorporated

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The Final Value Analysis Report for the Interchange Project can be found as Attachment D.

Bridge Type Selection Recommendation for the Interchange Project The Bridge Type Selection process identifies the optimal architectural configuration for the primary overcrossing deck to match the downsized, performance-based width of 91 feet. The selection process balanced structural efficiency, long-term durability, seismic ductility, and localized site constraints:
 Selected Structure Type: The preferred framework utilizes a multi-span Precast Prestressed Concrete Wide Flange Girder structure or a Cast-in-Place Prestressed Concrete Box Girder system.
 Span Configurations & Falsework Elimination: In alignment with the Value Analysis findings, structural spans were lengthened to entirely clear the active lanes and median of US 101. Utilizing off-site manufactured precast concrete girders allows components to be craned directly into place, minimizing or entirely eliminating the need for temporary wooden support falsework over highway traffic, thereby preserving public safety and accelerating construction schedules.  Seismic and Foundation Engineering: Substructure foundations will leverage heavy Cast-in-Drilled-Hole (CIDH) concrete pilings driven deep into competent underlying bedrock layers. This configuration provides ideal seismic ductility and prevents differential settlement under California dual-agency (Caltrans/City) design criteria.
 Utility Integration Backbone: Because the Prado Road corridor serves as a primary regional utility network backbone, the selected bridge profile incorporates dedicated internal, structural utility cells. This system securely carries wet and dry utility transmission mains across the highway right-of-way, shielding conduits from environmental weathering and eliminating visual clutter.

The selected bridge type will support architectural fascia treatments and concrete traffic barriers supporting the chosen aesthetic theme.

The draft technical study that supports the bridge type selection recommendation can be found as Attachment E.

Wall Type Selection Recommendation for the Interchange Project Because the Value Analysis shortened the elevated concrete bridge spans by 1,300 linear feet, the structural earth embankments leading up to the overcrossing must be supported by an increased volume of retaining walls. Wall selection represents a critical balancing act between construction speed, structural longevity, and spatial right-of-way limitations.

The project's finalized structural wall schedule is categorized into distinct applications:
 Mechanically Stabilized Embankment (MSE) Walls: Primary choice for the main overcrossing approach ramps and the island wall supporting US 101 Northbound on and off ramps. MSE walls utilize interlocking precast concrete facing panels

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tied back to layers of high-strength geo-synthetic grid reinforcement straps embedded deep within compacted structural soil backfill. These walls are highly cost-effective, rapid to install, and offer excellent native flexibility to accommodate minor ground settlement without structural cracking.
 Cast-In-Place (CIP) Concrete Cantilever Walls: Used selectively at tight right-ofway boundaries, along the realigned Elks Lane corridor, and at specific points where deep underground utility networks intersect. Unlike MSE walls, which require wide horizontal excavations to lay back earth-reinforcement straps, a CIP concrete wall relies on a rigid, steel-reinforced L-shaped structural footing. They are chosen specifically where spatial boundaries are restricted, allowing retention of vertical earth cuts without encroaching on adjacent properties or disrupting critical utility infrastructure.

The selected wall variations will support architectural fascia treatments and concrete traffic barriers supporting the chosen aesthetic theme.

The draft technical study that supports the wall type selection recommendation can be found as Attachment F.

The bridge and retaining-wall type selection process is based primarily on structural performance, constructability, site conditions, long-term maintenance, and cost.

Regardless of the bridge and wall types ultimately selected, their visible architectural treatments, colors, textures, materials, and landscaping will be coordinated with the aesthetic theme selected for the Interchange Project. This approach allows the project to use cost-effective and technically appropriate structural systems while maintaining a consistent visual character throughout the corridor.

Supplemental Project Report (SPR) for the Interchange Project As a major infrastructure asset transitions from environmental scoping to final design during the Plans, Specifications, and Estimates (PS&E) phase, minor geometric adjustments often deviate from the conceptual limits originally approved by regulatory agencies. For the Prado Road Interchange Project, the extensive cost-saving design modifications developed during the value analysis phase of work diverge from the selected Preferred Alternative Project as documented in the Project Approval and Environmental Documentation (PA&ED) phase.

To formalize these technical reconfigurations without invalidating previous project milestones, Caltrans requires preparation of a Supplemental Project Report (SPR), which will document the approved project changes and contain the most current cost estimates and schedule. The SPR benefits the project as it provides:
 Formal Codification: It serves as the official engineering record validating significant refinements made to an already approved project configuration.  Timeline Preservation: Unlike an entirely new Project Report, an SPR does not redefine the project’s underlying purpose or re-evaluate alternate alignments,

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completely bypassing the need to restart the multi-year public environmental review cycle from scratch.
 Engineering Clearance: It provides Caltrans with the comprehensive documentation necessary to demonstrate that the revised, more affordable layout fully satisfies all regional transportation, safety, and multimodal performance metrics.

The Interchange Project interfaces directly with the San Luis Obispo Creek channel and its associated active floodway during storm events beginning with the 25-year storm event and continuing through larger flood events. Since the value engineering work introduced significant changes to the bridge structure lengths, supporting center piers, and approach retaining walls, advanced and iterative hydraulic modeling was required during the SPR phase to ensure community protection:
 Floodway Mitigation: Extensive hydraulic simulations verify that the shortened bridge footprint and MSE wall alignments satisfy the City’s Waterway Management Plan and the Federal Emergency Management Agency (FEMA) floodplain requirements. This comprehensive documentation is fully integrated into the SPR discussion and technical appendices to document that regional floodwaters are conveyed appropriately.
 Scour Safeguards (Structure Technical Policy 2.6): Subsequent to the primary Value Analysis, Caltrans enforced updated, strict hydraulic scour design guidelines under Structure Technical Policy 2.6. Substructure foundation modeling was required to recalculate the exact depth of the Cast-in-Drilled-Hole (CIDH) concrete pilings. This analysis confirms that even if an extreme storm event severely erodes the surface creek bed or surrounding embankments, the underlying bridge foundations remain safely anchored into solid bedrock.
 Stormwater Management: Refined stormwater treatment basins, bio-filtration swales, and modified wet utility cross-connections have been engineered into the final design layouts. These systems isolate, treat, and safely discharge roadway runoff prior to its introduction into the local watershed.

The draft SPR is currently undergoing comprehensive review by the City's Project Development Team and Caltrans functional units. Staff is requesting that Council delegate authority to the Assistant City Manager to approve the final SPR in order to maintain the project’s delivery schedule. Delegating this authority will allow the project to advance immediately upon completion of those reviews and incorporation of the remaining technical appendices, provided no substantive changes are made to the project scope, purpose, or core recommendations.

Prior to final approval of the SPR, staff intends to continue discussions with Caltrans regarding identified cost increases and potential opportunities to manage or reduce project costs. The delegated authority would apply only if the final SPR remains substantially consistent with the project scope, purpose, and recommendations presented to Council. Any substantive change to the project scope, purpose, or core recommendations would be returned to Council for consideration.

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The Draft Supplemental Project Report can be found as Attachment G.

Aesthetic Theme for the Interchange Project
The project's aesthetic and landscape design must satisfy the mitigation measures established in the Final Initial Study-Mitigated Negative Declaration (IS/MND) and the Visual Impact Assessment (VIA), both of which grant substantial review authority to the Caltrans District Landscape Architect. Under Mitigation Measures and the corresponding VIA guidelines, the City is required to develop a comprehensive landscape plan prior to project approval. This plan must focus on incorporating native, drought-tolerant plant materials that provide a diverse variety of colors, shapes, and species. To soften visual changes and reduce the overall scale of the new structural features, these plantings must be strategically integrated along constructed walls, structures, and benched or graded areas within the project corridor. Once installed, the landscaping is subject to a minimum two-year establishment and oversight period overseen by the District Landscape Architect.

To address these mitigation requirements and the project’s broader aesthetic objectives, three aesthetic themes have been developed. Reduced-size images of the three themes are shown below, and larger images are provided in Attachment H.

Figure 4 – Base Theme

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Figure 5 – Mission Theme
Figure 6 – Modern Mission Theme

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Each theme comprises multiple design components, including architectural wall treatments, planter walls, railings, fencing, landscaping, and lighting. The themes are not required to function as fixed packages, and individual components may be combined to achieve Council’s preferred aesthetic. For example, Council could express an overall preference for the Base Theme while directing that it incorporate the fencing or railing treatment shown in the Mission or Modern Mission Theme. General direction regarding the desired character, level of architectural detail, landscaping, lighting, and preferred individual features will allow the project team to work with Caltrans to refine a cohesive aesthetic design that reflects Council’s objectives while satisfying applicable project and agency requirements.

The project team reviewed the three themes for consistency with the VIA, applicable Caltrans requirements, the surrounding visual environment, and City policies. Based on the current level of design and coordination, all three themes appear capable of receiving Caltrans approval, subject to further refinement and final review.

The project team identified the Base Theme, enhanced with more extensive landscaping and reduced accent lighting, as the option that most directly minimizes the perceived scale of the Interchange Project and supports the objectives of the City’s Conservation and Open Space Policy 9.1.1. This policy seeks to preserve natural and agricultural landscapes by ensuring that infrastructure remains visually subordinate to and compatible with its surroundings. However, the Mission and Modern Mission themes provide more distinctive architectural treatments that may more strongly reflect the City’s identity and long-term vision for this regional gateway. Council is therefore being asked to consider whether the enhanced Base Theme best addresses the City’s aesthetic and policy objectives or whether one of the other themes would more appropriately address the City’s needs. The Council-selected theme will be further refined and submitted to Caltrans for final review and approval.

As part of this aesthetic refinement, the project team evaluated the integration of large architectural "San Luis Obispo" identification lettering onto the primary retaining wall assemblies. The primary benefit of this treatment is the creation of a highly visible, welcoming landmark that establishes a strong sense of place and identity at one of the City's primary regional gateways. Potential drawbacks include drawing additional attention to the scale and geometry of the interchange, which could conflict with the objective of reducing the visual prominence of the new structures.

Accordingly, Council is being asked to provide general direction on both the preferred aesthetic theme (with potential variation of components as described above) and whether to incorporate formal City identification lettering into the final engineering specifications or advance the selected theme with textured architectural fascia treatments and no lettering. If Council directs incorporation of City identification lettering into the Interchange Project, the existing gateway monument adjacent to US 101 near the Prado Road northbound ramps may need to be removed. Caltrans requirements generally limit

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gateway monuments or community identification features to one visible feature per state highway or interstate approach, in each direction of travel, entering a local jurisdiction.

Value Analysis for the Bridge Project
On November 4, 2025, the City Council authorized completion of a Value Analysis (VA) for the Bridge Project to determine whether the scale of the proposed improvements remained appropriate in light of the proposed reduction in the scale of the adjacent Interchange Project. A VA is a structured engineering process used to identify opportunities to improve project value by reducing construction and lifecycle costs while maintaining required functionality, safety, durability, and performance.

Figure 7 – Prado Road at South Higuera Street
Figure 7 above provides a rendering of the currently planned Prado Road and South Higuera Street intersection improvements, consistent with the design presented to Council on November 4, 2025. Since that time, however, the Preliminary Value Analysis Study (Attachment I) identified seven potential design refinements intended to reduce project costs and improve constructability, including modifications to bridge geometry, utility relocations, roadway features, and structural elements.

On May 20, 2026, the Active Transportation Committee (ATC) reviewed the Value Analysis recommendations within its purview, specifically those affecting bicycle and pedestrian facilities, roadway geometry, and the existing Bob Jones Trail Bridge. The ATC generally supported reducing the bridge width and shortening the raised median, while recommending that the northerly shoulder be replaced with Class II bicycle lanes. The ATC also strongly supported retaining the existing Bob Jones Trail Bridge, or replacing it if relocation becomes necessary, unless the cost of replacement becomes prohibitive.

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If Council directs implementation of Value Analysis recommendations that modify the currently planned improvements, the project design and associated renderings will be updated to reflect those changes as the project advances through final design.

The Preliminary Value Analysis evaluated the following recommendations:

Table 1 – Value Analysis Alternatives
Alternative Description Estimated
Savings Staff Recommendation

1.0 – Reduce
Bridge Width
Reduce the bridge
width from 114 feet to
91 feet by eliminating
one eastbound lane,
narrowing lane
widths, reducing
median width, and
simplifying bicycle
and pedestrian
facilities.
$3,000,000
Approve. The revised bridge
width accommodates
forecast traffic associated
with the Prado Interchange
Project while substantially
reducing construction
costs. Staff recommends
incorporating Class II
bicycle lanes consistent
with ATC direction.

2.0 – Eliminate
Utility
Undergrounding
Retain relocated
electrical and
communication facilities
overhead rather than
undergrounding them.
$500,000
Do Not Approve.

Undergrounding is
consistent with City policy
and improves long-term
corridor aesthetics and
reliability.

3.0 – Reduce
Utility Trench
Depth
Reduce minimum utility
cover requirements
where technically
feasible.
$100,000
Delegate to the City Engineer.

Final utility cover
requirements should be
determined during final
design based on
engineering, utility owner,
and maintenance
considerations.

4.0 – Limit Wet
Utility Relocations
Relocate only utilities
crossing the bridge and
defer replacement of
adjacent water
infrastructure to a future
project.
$300,000
Conditional Approval.

Complete only those utility
improvements that are
supported by available
utility funding and provide
long-term operational
benefit.

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Alternative Description Estimated
Savings Staff Recommendation

5.0 – Replace
Soldier Pile Walls
with Rock Slope
Protection
Replace soldier pile
retaining walls
beneath the bridge
with Rock Slope
Protection (RSP),
subject to hydraulic
verification.
$2,000,000
Approve, subject to final
engineering. Staff
recommends advancing
this alternative provided
hydraulic and scour
analyses confirm the
design meets applicable
standards.

6.0 – Shorten
Raised Median
Reduce the length of
the raised median while
maintaining required
access restrictions.
$20,000
Approve. This modification
maintains operational
objectives while providing a
modest cost reduction.

7.0 – Remove
Existing Bob
Jones Trail Bridge
Permanently remove
the existing pedestrian
bridge rather than
relocating or
reconstructing it.
$150,000
Do Not Approve. The ATC
recommendation to retain or
replace the bridge unless
future replacement costs
become prohibitive.

Total VA Identified Savings
Alternatives 1.0 – 7.0
$6,070,000
Total VA Recommended Savings
Alternatives 1.0, 3.0, 4.0, 5.0, and 6.0
$5,420,000
Based on the completed Value Analysis and subsequent engineering review, Council is being asked to approve incorporation of Alternatives 1.0, 5.0, and 6.0 into the final project design to achieve approximately $5 million in construction savings while maintaining the project's operational objectives, multimodal connectivity, and long-term functionality.

Council is also being asked to authorize the City Engineer to determine the appropriate implementation of Alternatives 3.0 and 4.0 during final design based on engineering requirements, available utility funding, and coordination with utility owners. Alternatives

2.0 and 7.0 are not proposed for implementation because they are inconsistent with City policy, community objectives, or Active Transportation Committee recommendations.

Schedule Impacts Related to Value Analysis Recommendations The construction durations identified in the Value Analysis reflect only the estimated time required to construct the project elements that would be added, modified, or removed.

They do not include the additional time required for design, environmental review, permitting, or agency coordination. In particular, implementation of Alternative 1.0, Bridge Width Reduction, and Alternative 5.0, Rock Slope Protection, will require additional traffic,

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hydraulic, geotechnical, and environmental analyses; revisions to the project plans; and environmental revalidation to confirm that the modified design remains consistent with the previously approved environmental documentation. Although the resulting design effort and schedule impacts have not yet been fully quantified, the anticipated reductions in construction complexity, duration, and cost are expected to outweigh the additional work required during final design.

Following Council direction, the additional analyses and approved recommendations will be documented in the Final Value Analysis Study Report and incorporated into the project plans, specifications, and cost estimates. The project schedule will be updated as the scope and duration of the remaining work become better defined.

The Value Analysis also identified potential benefits from coordinating construction of the Prado Creek Bridge and Prado Road Interchange Projects. Coordinated delivery could reduce cumulative impacts to the traveling public, improve contractor mobilization and construction sequencing, avoid duplicative traffic control and public outreach, and potentially reduce overall construction costs. Opportunities to coordinate the projects will continue to be evaluated during final design based on grant requirements, environmental permits, regulatory approvals, utility coordination, and other project-delivery commitments. The objective is to capture practical coordination benefits without unnecessarily delaying either project.

Elks Lane
The Active Transportation Committee (ATC) recommended pursuing a Class I shareduse path along Elks Lane and evaluating the long-term corridor alignment through a future update to the Active Transportation Plan (ATP). Incorporating this improvement into the current Prado Road Interchange Project or Prado Creek Bridge Project is not proposed because construction of a Class I facility along Elks Lane is outside the approved scope and currently identified funding for both projects.

However, the Prado Road Interchange Project provides an opportunity to preserve the ability to construct a Class I facility along Elks Lane in the future. Both the existing and proposed portions of Elks Lane are not currently wide enough to accommodate a Class I facility within the planned right-of-way. If directed by the City Council, staff could evaluate and acquire the additional right-of-way necessary to accommodate a future shared-use path as part of the Prado Road Interchange Project. Securing the necessary right-of-way in conjunction with the Interchange Project could reduce the need for future property acquisition and preserve flexibility for implementation once the corridor planning and design are further developed.

At this time, a conceptual alignment and roadway configuration incorporating a Class I facility along Elks Lane have not been developed. As a result, the required right-of-way, roadway geometrics, potential project impacts, and implementation costs are not yet known. If the City Council supports advancing the concept, staff would further develop the Class I facility in coordination with the ATC as part of a future ATP update. That process would evaluate the preferred alignment and configuration, identify planning-level

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costs, and establish the facility's relative priority within the City's broader active transportation network.

Following completion of that planning process, the City Council could consider whether and when to advance construction of the Class I facility through a future Capital Improvement Program planning and budgeting process. Accordingly, the current Council action would focus on preserving the opportunity for a future Class I facility rather than committing the City to its construction or a specific facility configuration.

Previous Council or Advisory Body Action
Interchange Project
In 1978 a Franchise Agreement between the City and PG&E was executed which outlines parameters under which PG&E may use the City’s rights-of-way for PG&E facilities.

The Interchange Project is included in the City’s 1992 Circulation Element of the City’s General Plan.

Previous City Councils have established 16 other underground utility districts.

Establishing a district defines the geographic area within which designated overhead utility facilities must be relocated underground and provides the legal and administrative framework for coordinating the conversion among the City, utility providers, and affected property owners. These districts are often established in conjunction with new development or the reconstruction of major transportation corridors. The most recent constructed City-funded capital project that included utility undergrounding was the 2005 widening of Broad Street/State Route 227, associated with Ordinance 1442.

On July 17, 2018, City Council approved the Supplemental Environmental Impact Report (SEIR) for the San Luis Ranch Development (Staff Report). The SEIR detailed the impacts of the development and need for the Interchange Project, but did not cover the project itself, necessitating separate CEQA and NEPA documents.

The Interchange Project implements portions of the City’s Tier 1 bicycle and pedestrian network. The Active Transportation Plan was adopted by Council on February 2, 2021.

On August 16, 2022, Council Authorized Staff to seek VA services and PS&E services (Staff Report).

On September 5, 2023, Council recommended approval of the IS/MND to Caltrans, declared Alt 3 as the City’s preferred interchange type, and recommended that Caltrans Administration approve the Project Report. (Staff Report) On February 18, 2025, Council awarded the PS&E design contract to Consor Engineering (Staff Report).

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On October 23, 2025, the Active Transportation Committee reviewed the Interchange Project’s VA alternatives and made recommendations to Council. (Staff Report) On November 4, 2025, the City Council directed staff to implement Value Analysis recommendations that reduced anticipated construction costs by $20 million. (Staff Report)
Bridge Project
On August 20, 2013, the City Council approved a Request for Proposals for consultant services for the Prado Road Bridge Widening Project, authorized the City Manager to execute an agreement with the selected consultant, and authorized the Finance Director to execute and amend purchase orders within the Council-authorized project budget. (Staff Report)
On October 21, 2014, the City Council approved the preferred conceptual alternative to replace the existing Prado Road bridge with a new single-span bridge, appropriated $390,000 in Transportation Impact Fee funds for continued project study and engineering, and authorized staff to pursue Highway Bridge Program funding. (Staff Report) The Bridge Project implements portions of the City’s Tier 1 bicycle and pedestrian network. The Active Transportation Plan was adopted by Council on February 2, 2021.

On October 4, 2022, the City Council introduced an ordinance to establish Underground Utility District 16 within the Prado Bridge Replacement Project limits and adopted Resolution No. 11368 approving the Final Initial Study/Mitigated Negative Declaration for the Project. (Staff Report)
On October 18, 2022, the City Council adopted Ordinance No. 1721, establishing Underground Utility District 16 within the Prado Bridge Replacement Project limits. (Staff Report)
On November 4, 2025, the City Council directed staff to complete a Value Analysis for the Project and return to the Council with the results. (Staff Report) On May 20, 2026, the Active Transportation Committee reviewed Prado Road Interchange and Prado Creek Bridge project’s proposed bicycle and pedestrian improvements and provided the following recommendations for Council’s consideration via a 4-0 vote. (Staff Report):
• The committee concurs with staff’s presentation in terms of the value analysis of the bridge adding that staff explore the possibility of a Class II bike lane on the North part of Segment 3.
• The committee requests that the existing Bob Jones bridge remain in its current configuration by reducing the width of the Prado bridge. • The committee recommends the establishment of a Class I, shared-use path, on the new segment of Elks Lane to be developed in the near term.

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Public Engagement
The Prado Interchange Project has included extensive public outreach throughout project development including:
• Public workshops.
• Community meetings.
• Advisory body presentations.
• Project website updates.
• Environmental review circulation.
• Stakeholder coordination meetings.

The most current Public Workshop occurred on March 11, 2026, at the Pavillion in San Luis Ranch.

Additionally, as required by the Municipal Code 13.12.30, a mailer notice was sent to all potentially affected properties and published in The New Times 30 days prior to this first hearing for the creation of the Underground Utility District.

CONCURRENCE
This project has concurrence from the Community Development, Public Works, and Utilities Departments.

Utility providers have been informed of the City's intent to pursue undergrounding within the project corridor and will continue participating in utility coordination efforts during PS&E.

ENVIRONMENTAL REVIEW
Both the Interchange and Bridge Projects are advancing in compliance with the California Environmental Quality Act (CEQA) and the National Environmental Policy Act (NEPA).

For the Interchange Project, Caltrans serves as the lead agency for both CEQA and NEPA. For the Bridge Project, the City of San Luis Obispo serves as the CEQA lead agency, and Caltrans serves as the NEPA lead agency. Accordingly, City Council adoption of the environmental document by resolution is not required for environmental documents for which Caltrans is the lead agency.

Interchange Project
The Interchange Project has the following environmental clearances:
 CEQA Compliance: Approved via an IS/MND.
 NEPA Compliance: Documented via a Categorical Exclusion (CE), with Caltrans acting as the federal lead agency.

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Because the VA implementation results in final design changes, the City will submit a Supplemental Project Report to Caltrans to initiate environmental revalidation. Caltrans will evaluate whether the existing CEQA IS/MND and NEPA Categorical Exclusion remain valid in light of the revised project scope, design, and any new environmental information or regulatory requirements. The revalidation process will document whether the existing environmental approvals remain valid, require supplemental documentation or public review, or must be replaced with new environmental documentation. Based on Caltrans’ initial feedback, the existing environmental approvals appear likely to remain valid, although supplemental documentation may be required to support that determination.

Bridge Project
The Bridge Project has the following environmental clearances:
 CEQA Compliance: Approved via an IS/MND by the City Council on October 4, 2022, by Resolution Number 11368 (2022).
 NEPA Compliance: Documented via a Categorical Exclusion (CE), with Caltrans acting as the federal lead agency.

FISCAL IMPACT
Budgeted: Yes Budget Year: 2025-30
Funding Identified: Yes
Table 2 – Standard Financial Table
Funding
Sources
Total Budget
Available
Budget
Adjustment
Remaining
Balance
Annual
Ongoing
Cost
Federal:

Earmark
$ 4,130,000 $ -2,065,000 $ 2,065,000 $ 0
Federal: HBP $ 6,000,000 $ -6,000,000 $ 0 $ 0
Total $ 10,130,000 $ -8,065,000 $ 2,065,000 $ 0
Table 2 summarizes the recommended grant-fund budget revisions. Additional information regarding these adjustments is provided in the “Grant Fund Administrative Adjustments” section below.

Fiscal Analysis:

Both the Interchange Project and the Bridge Project are included in the City’s 2025-27 Financial Plan. The Interchange Project appears on page 384 of the plan. The Bridge Project appears on page 379 of the plan.

Below is a summary of the anticipated costs and current funding plans for both projects.

The funding plans should not be viewed as final, as the City is actively working with its consultant teams to identify and pursue additional funding opportunities. These efforts

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include pursuing competitive grant programs, coordinating with regional and state funding partners, positioning both projects for future funding opportunities, evaluating financing strategies, and identifying other opportunities to reduce the amount of funding ultimately required from existing City resources. Simply put, the goal is to provide Council with the best available information about what these projects are expected to cost at the time of each update while maximizing regional, state, federal, and grant funding to keep the impact on existing City resources as low as possible.

Interchange Project: Grant and Financing Strategy
The City is actively pursuing a diversified funding strategy for the Prado Interchange Project rather than relying solely on existing local revenues or waiting for a future funding opportunity. The Consor project team, is providing grant strategy and application support during the Plan Specification & Estimate phase. This work includes identifying and evaluating federal, state, and regional discretionary funding programs, assessing the project's competitiveness, developing strategies to better position the project for future funding cycles, and preparing grant applications for promising opportunities. The City is also coordinating directly with SLOCOG, Caltrans, the California Transportation Commission, and other regional and state partners to identify potential funding opportunities and strengthen the project's competitiveness.

The City's strategy includes pursuing major state and federal transportation programs as they become available and developing the technical, economic, and project-readiness information necessary to compete successfully. The City is also pursuing opportunities for legislative and other discretionary funding and is continuing advocacy efforts intended to elevate the project at the regional, state, and federal levels.

The project financing strategy is therefore expected to consist of a combination of existing transportation impact fee revenues, regional transportation funding, state and federal grants, other discretionary funding, and potentially debt financing. If approved by voters in November 2026, the SLOCOG's proposed tax measure may provide another potential funding source that could assist with the Interchange Project, subject to the measure's final requirements, Council priorities, and future budget decisions.

In addition, the City is working with Kosmont, a financial consultant, that is providing expertise on debt and loan strategies for financing construction costs.

Based upon the Value Analysis (VA) and Supplemental Project Report (SPR), the estimated construction cost for the Interchange Project is $80 million in 2026 dollars.

Table 3 below escalates those dollars based upon a range probable inflationary factors until the anticipated start of construction in 2029.

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Table 3 – Construction Escalation
Construction Cost Escalation
Base Year (2026) $80,000,000
3% Inflation (2029) $87,400,000
5% Inflation (2029) $92,600,000
8% Inflation (2029) $100,800,000
The VA process identified opportunities to reduce project costs through refinements to the roadway configuration, consolidation of active transportation facilities, and reductions in the overall structural footprint. However, as the design has advanced, these savings have been partially offset by additional costs associated with utility relocations, updated bridge scour requirements, bridge revisions needed to accommodate sight-distance and truck-turning requirements, and enhanced aesthetic treatments.

The largest anticipated cost increase is associated with utility relocations. Current estimates include approximately $9 million for the relocation of electrical, communications, natural gas, water, sewer, and petroleum facilities, including facilities owned by Phillips 66. These estimates are based on increasingly developed utility designs, although the Phillips 66 relocation remains at a more conceptual level and will require further refinement.

Additional structural costs have also resulted from updated Caltrans requirements and further development of the project geometry. In December 2025, Caltrans issued Structure Technical Policy (STP) 2.6, which requires applicable structures within waterways and flood-prone areas to be designed for scour associated with a 200-year flood event. The project team requested a variance based on the project's location within a floodplain rather than directly spanning a creek; however, Caltrans denied the request, making compliance with the updated standard mandatory. The estimated cost to address this need is approximately $2.5 million.

In addition, the western approach to the Prado Road overcrossing must widen from approximately 65 feet to nearly 90 feet to provide adequate sight distance and accommodate the turning movements of large legal design vehicles at the northbound ramp terminal intersection without encroachment into opposing traffic. The resulting geometric flare creates an irregular bridge configuration for which a cast-in-place, posttensioned concrete box-girder structure is preferred because of its greater geometric flexibility compared with precast alternatives. The widened bridge geometry has increased the estimated project cost by approximately $2.5 million.

The current estimate also includes approximately $4 million for enhanced aesthetic treatments to project structures. This allowance is intended to support architectural treatments and other visual enhancements that will be further defined through coordination among the City, Caltrans, and the project design team. Landscaping costs are not yet included in the estimate and will be developed once the scope is sufficiently defined and confirmed with Caltrans.

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Staff intends to further discuss Caltrans additions with Caltrans to confirm their scope, necessity, funding eligibility, and associated cost.

The updated expenditure plan in Table 5 reflects the current understanding of project scope and anticipated construction costs, including a five-percent annual inflationary factor, and will continue to be refined as the project advances through final design. Table 4 provides the current planning-level cost comparison.

Table 4 – Cost Comparison (Interchange Project)
Category Current Cost Descriptions
Value Analysis cost
reductions previously
directed by Council
(November 2025)
($20.0 million)
Previously reported anticipated reduction;
detailed reconciliation is included in the VA
memorandum.

Utility relocation scope $9.0 million
Electrical, communications, natural gas,
water, sewer, petroleum, and Phillips 66
facilities; scope remains under refinement.

Caltrans scour and
geometric
requirements
$5.0 million Current estimate for updated requirements
and bridge-geometry development.

Enhanced aesthetic
treatments $4.0 million Current allowance; landscaping is not yet included.

Table 5 below presents the Interchange Project Expenditure Plan, which incorporates a five-percent annual inflationary factor to account for anticipated escalation through construction.

Table 5 – Interchange Project’s Expenditure Plan, Specification No. 2091613 Phase Current 2027-28 2028-29 2029-30
Design $10,045,780 $1,500,000
Phase 1 $3,049,853
Phase 2 $5,901,488
Phase 3 $94,439
Amendment 1 $22,018
Amendment 2 -
Amendment 3 -
Contingencies $977,982
Third Party
Review
$1,500,000
Right of Way $2,000,000
Utilities
Relocation $2,000,000 $7,000,000
Construction
Admin $2,000,000
Construction
Management
$10,000,000

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Construction $112,600,000
Construction
Contract $92,600,000
Contingency $20,000,000
Construction
Phase Total $131,600,000
Total Per Year $10,045,780 $3,500,000 $2,000,000 $131,600,000 Grand Total for
Project1 $147,145,780
Table 6 – Interchange Project’s Funding Plan
Funding Source Current 2027-28 2028-29 2029-30
Local Funds: $15,261 $85,212,196
Capital Outlay (LRM) $15,261
Debt Finance $85,212,196
Regional Funds: $1,435,260
Regional Grant
(County) $1,435,260
Developer Funds: $10,483,063 $2,000,000 $2,000,000 $11,000,000 Capital Outlay (SLR) $9,967,681 $2,000,000 $2,000,000 $11,000,000 AASP TIF $79,205
Citywide TIF $436,177
Grants: $35,000,000
Grant (SLOCOG) $10,000,000
Grant (Future) $25,000,000
Construction Phase
Total $131,212,196
Total Per Year $10,498,324 $3,435,260 $2,000,000 $131,212,196 Grand Total for
Project $147,145,780
During prior Council discussions, $75 million was identified as the upper planning-level assumption for potential debt financing. The updated funding plan shown in Table 6 increases this assumption by approximately $10.2 million, to $85.2 million. This adjustment is necessary to balance the current expenditure plan, which now incorporates anticipated construction-cost escalation through 2029, refined utility-relocation costs, additional structural and geometric requirements identified through Caltrans review, aesthetic improvements, construction management, and contingency. The increased amount represents a planning assumption based on currently available information and does not constitute authorization to issue debt.

Staff will continue to pursue grant funding, regional contributions, project savings, and other outside funding sources to reduce the amount ultimately financed. Staff will also continue working with Caltrans to evaluate the scope, necessity, funding eligibility, and

1 Summation of Total Per Year row above the Grand Total for Project Row

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cost of the additional Caltrans requirements. Any outside funding secured above the assumptions included in Table 6 or project costs avoided would reduce the debt-financing requirement.

Bridge Project: Grant and Financing Strategy
The City is similarly pursuing additional outside funding for the Bridge Project. Since the project includes substantial transportation safety, multimodal, bridge replacement, and infrastructure-resiliency benefits, staff is evaluating funding programs that may be applicable to specific components of the project rather than relying exclusively on a single grant program.

A current focus is the Highway Safety Improvement Program (HSIP) Cycle 13. The Bridge Project has been identified as the stronger of the two Prado projects for potential HSIP funding because of the documented collision history near the Prado Road and South Higuera Street intersection and the safety improvements incorporated into the project.

The City is working with the project team to evaluate and prepare an application, with particular attention to structuring the funding request around eligible safety improvements in a manner that maximizes the project's benefit-cost ratio. The City is also coordinating with SLOCOG to better understand lessons learned from previous HSIP funding efforts and identify opportunities to strengthen the application.

Implementation of the recommended VA alternatives is estimated to reduce construction costs by approximately $5 million, resulting in an estimated construction cost of approximately $23 million in 2026 dollars.

If Council supports coordinating the construction schedules of the Bridge and Interchange Projects, construction of the Bridge Project would begin in summer 2029 instead of summer 2027, representing an approximately two-year delay from the construction schedule currently identified. Coordinating the projects could provide construction efficiencies by reducing duplicated mobilization, traffic control, construction management, utility coordination, and other costs associated with delivering the projects separately.

Coordination could also reduce the duration and cumulative effects of construction on nearby residents, businesses, and roadway users.

After accounting for the estimated effects of construction-cost inflation associated with the delayed construction schedule, the recommended VA alternatives are still anticipated to provide a net construction-cost reduction. Using a 5% annual escalation factor, the estimated $23 million construction cost in 2026 dollars would increase to approximately $26.6 million in 2029. This remains approximately $1.4 million below the estimated $28 million construction cost before implementation of the recommended VA alternatives. This comparison reflects the estimated VA savings after escalation but does not include any additional savings that may result from coordinating construction of the Bridge and Interchange Projects.

Table 7 shows the estimated construction cost of the Bridge Project in 2029 under a range of potential annual construction-cost escalation rates. Staff will further evaluate potential