Agenda packet — Santa Maria City Council, August 4, 2026 (part 8 of 8)

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2026 Surplus Water Transfer Program
Transfer Agreement
Re. Westside Districts

12.10 No Agency. This Agreement shall not create, nor shall it be construed to create, any agency, partnership or similar relationship among the Parties.

12.11 Notices. All notices, approvals, acceptances, requests, demands and other communications required or permitted under this Agreement, to be effective, shall be in writing and shall be delivered, either in person or by email or by Federal Express or other similar overnight delivery service, to the Authorized Representative of the Party to whom the notice is directed. Any communication given by email shall be deemed delivered on such mailing date and any communication given by overnight service shall be deemed delivered one (1) business day after the dispatch date. Any Party may change its email and overnight service addresses by giving all other Parties written notice of its new addresses.

12.12 Severability. If any provision of this Agreement or its application to any Party or circumstance is held invalid or unenforceable, then the remainder of this Agreement and the affected provision to the extent it is not so held shall remain valid and enforceable and in full force and effect. The foregoing shall not apply, however, if the invalid or unenforceable provision in question or, as applicable, the portion or application thereof held invalid or unenforceable, is a fundamental and material provision of this Agreement.

12.13 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

12.14 Third Party Beneficiary; Enforcement. The Parties agree that this Agreement is for the benefit of (i) Contractors, (ii) CCWA, and (iii) all CCWA Participants that are not Contractors.

All of the aforementioned entities and persons shall be entitled to enforce the provisions of this Agreement.

12.15 Time of the Essence. Except as otherwise provided in this Agreement, time is of the essence with respect to this Agreement and the performance of each and every obligation contained in this Agreement.

12.16 Time for Performance. Notwithstanding any provision of this Agreement to the contrary, in the event a Party fails to perform any obligation under this Agreement (other than an obligation to pay money) because of strikes, lockouts, labor disputes, acts of God, inability to obtain labor or materials or reasonable substitutes for labor or materials, government or judicial actions, inclement weather or other causes beyond its reasonable control, that failure will not constitute a default under this Agreement, and the performance in question will be excused during the period in which the cause for failure continues.
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Transfer Agreement
Re. Westside Districts
1N WITNESS WHEREOF, the Parties have executed and entered into this Agreement as of the Effective Date.

CENTRAL COAST WATER AUTHORITY
By: Date:

Name: Peter Thompson
Title: Executive Director
Approved as to form:

Brownstein Hyatt Farber Schreck
By:

Name: Stephanie Osler Hastings
Authorized Representative:

Central Coast Water Authority
255 Industrial Way
Buellton, CA 93427
Attn: Peter Thompson, Executive Director
Telephone: (805) 688-2292
Email: [email protected]
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2026 Surplus Water Transfer Program
Transfer Agreement
Re. Westside Districts

CONTRACTOR
By: Date:

Name: Shad S. Springer
Title: Director of Utilities
Approved as to form:

City Attorney's Office
By:

Name: Thomas Watson
Authorized Representative:

City of Santa Maria
110 E Cook Street
Santa Maria, CA 93454
Attn: Shad S. Springer, Director of Utilities
Telephone: (805) 925-0951 ext. 7211
Email: sspringer(acityofsantamaria.orr
Exhibit A: Project Agreement between CCWA and Purchaser Exhibit B: Contractor's Transfer Quantity and Total Transfer Quantity

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2026 Surplus Water Transfer Program
Transfer Agreement
Re. Westside Districts
Exhibit A
Project Agreement between CCWA and Purchaser
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2026 Surplus Water Transfer Program
Transfer Agreement
Re. Westside Districts
Exhibit B*
Contractor's Transfer Quantity and Total Transfer Quantity Contractor
Transfer Quantity
Total Transfer Quantity:
* As provided in Section 5.1.2, Exhibit B may be modified without amendment of this Agreement. CCWA shall provide prompt notice of any changes to Exhibit B to Contractor. 51552012

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Attachment C
Eric Friedman
Chairman
Jeff Clay
Vice Chairman
Peter K. Thompson
Executive Director
Brownstein Hyatt
Farber Schreck
General Counsel
Member Agencies
City of Buellton
Carpinteria Valley
Water District
City of Guadalupe
City of Santa Barbara
City of Santa Maria
Goleta Water District
Montecito Water District
Santa Ynez River Water
Conservation District,
Improvement District #1
Associate Member
La Cumbre Mutual
Water Company
June 26, 2026
Mr. Justin Rowe
General Manager
Dudley Ridge WD, Berrenda Mesa WD, Lost Hills WD, and Belridge WSD 8501 Brimhall Rd. Building 200, Suite 202
Bakersfield, CA 93312
Mr. Sheridan Nicholas
Engineer -Manager
Wheeler Ridge-Maricopa Water Storage District
12109 Highway 166
Bakersfield, CA 93313
Subject: 2026 Westside Districts/Central Coast Water Authority Transfer Agreement Dear Mr. Rowe and Mr. Nicholas,
This Transfer Agreement ("Agreement") documents and confirms the agreement that has been reached between the Central Coast Water Authority ("CCWA"), and Dudley Ridge Water District ("DRWD"), Berrenda Mesa Water District, Lost Hills Water District, Belridge Water Storage District, and Wheeler Ridge-Maricopa Water Storage District (collectively, the "Westside Districts"), each a "Party" and collectively, the "Parties," for a transfer of CCWA's State Water Project ("SWP") water supplies.

BACKGROUND AND PURPOSE
CCWA, Kern County Water Agency ("KCWA"), and DRWD are State Water Contractors ("Contractors") that receive water deliveries from the SWP. Berrenda Mesa Water District, Lost Hills Water District, Belridge Water Storage District, and Wheeler Ridge-Maricopa Water Storage District receive SWP water supplies through KCWA ("KCWA Member Agency(ies)").

As of the Effective Date of this Agreement (defined below), the California Department of Water Resources ("DWR") has approved an allocation of SWP water supplied to the Contractors of 45% for calendar year 2026, which, for CCWA, equals a SWP Table A allocation of 20,469 acre-feet ("AF"). In total, CCWA has over 56,000 AF of water in its 2026 water portfolio.

CCWA anticipates that it will be able to meet all its annual local service area demands for 2026 with excess SWP water supplies remaining. The Westside Districts are interested in acquiring additional SWP water supplies in 2026 for use in their respective service areas.

Therefore, CCWA has agreed to sell, and the Westside Districts have agreed to purchase, up to 32,000 AF CCWA's SWP supplies, subject to the terms and conditions set forth herein.
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TERMS AND CONDITIONS

1. Conditions Precedent
a. DWR's written approval of this Agreement shall be a condition precedent to the effectiveness of this Agreement. DWR's approval shall be provided in the form of a non -permanent Transfer (individually, "SWP Agreement") between DWR, CCWA, DRWD, and KCWA. Said SWP Agreement may be a single agreement or separate agreements with each agency, depending on DWR's preference. i. CCWA and the Westside Districts, and each of them, shall cooperate with DWR and with each other in the preparation, review, and execution of the SWP Agreement with DWR, and with the processing of such other approvals as may be necessary to affect the water transfer described herein.
b. KCWA's execution of the above -referenced SWP Agreement on behalf of its Member Agencies shall be a condition precedent to the effectiveness of this Agreement. It shall be the KCWA Member Agencies' responsibility to work with KCWA on obtaining KCWA's approval of said SWP Agreement. The KCWA Member Agencies represent they have coordinated with KCWA on this transfer of SWP water supplies and that KCWA is willing to facilitate the same.

2. Water Transfer s) to the Westside Districts
a. Initial Water: CCWA , in its sole and absolute discretion, may make available for transfer, up to 12,000 AF of CCWA's 2026 Table A or Article 56 Carryover water supplies to the Westside Districts. This volume of water shall be referred to herein as the "Initial Water." The Westside Districts shall be obligated to purchase any Initial Water CCWA makes available, provided the Westside Districts have physical capacity to take delivery of the Initial Water. b. Additional Water: CCWA, in its sole and absolute discretion, may make available for transfer up to an additional 20,000 AF of its 2026 SWP Table A or Article 56 Carryover water supplies to the Westside Districts. This volume of water shall be referred to as "Additional Water." The Westside Districts may, but shall not be obligated to, purchase any Additional Water CCWA makes available. c. Transferred Water: The collective total of the Initial and Additional Water transferred will be referred to as "Transferred Water." The maximum potential Transferred Water under this Agreement is 32,000 AF.
d. The Westside Districts shall work with CCWA to develop a schedule for CCWA's transfer that is mutually agreeable to both parties. CCWA and the Westside District acknowledge that DWR's conveyance and delivery of Transferred Water is subject to any capacity limitations imposed by DWR. e. The Westside Districts shall determine amongst themselves the allocation of the Transferred Water.

3. Effective Date: Term
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This Agreement shall be effective as of the date of the last signature hereto ("Effective Date") and shall continue until the termination of the SWP Agreement, or until the Parties full and complete performance pursuant to this Agreement, whichever is later.

4. Point of Transfer
The Transferred Water will consist of Article 56 Carryover and/or 2026 Table A supplies.

The Point of Transfer ("POT") shall be San Luis Reservoir for Article 56 Carryover and Banks Pumping Plant of the California Aqueduct for 2026 Table A. The parties may otherwise agree in writing to an alternate point of transfer location, subject to DWR's approval. The Westside Districts shall take possession of the Transferred Water at the POT.

5. Payment
a. The Westside Districts shall pay CCWA for the Initial Water delivered to the Point of Transfer by CCWA as set forth in Table 1.
b. The Westside Districts shall pay CCWA for the Additional Water delivered to the Point of Transfer by CCWA as set forth in Table 2.

Table 1:

Water Type
Volume
(AF)
Price
($/AF)
2026 Table A
or Article 56
Carryover
Up to 12,000
$400
Table 2:

Water Type
Month
Delivered
Price
($/AF)
2026 Table A or
Article 56
Carryover
October
$250
2026 Table A or
Article 56
Carryover
November
$225
2026 Table A or
Article 56
Carryover
December ,
$200
c. CCWA shall be responsible for all conveyance costs up to the POT (including SWP delivery costs), which shall be at San Luis Reservoir or Banks Pumping Plant. The Westside Districts shall be responsible for all conveyance costs downstream of San Luis Reservoir or Banks Pumping Plant, including SWP delivery costs and any KCWA costs.
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If either CCWA or the Westside Districts (by and through KCWA/DRWD) are charged by DWR for SWP delivery costs for which the other party is responsible for, as per this Agreement, both parties agree to reconcile those charges and make appropriate payments/credits to the other party once those charges are known. d. Once the final volume of Transferred Water is known and reconciled with DWR by the Parties, CCWA shall invoice the Westside Districts for the reconciled amount of Transferred Water that was delivered to the POT by CCWA. All CCWA invoices shall be due and payable within 45 days of receipt. CCWA shall send all invoices to the following address in electronic format:

To: Westside Districts
Jamie Marquez
[email protected]
Cc: Eric McDaris (emcdaris .wrmwsd.com)
e. CCWA and the Westside Districts shall be responsible for their own internal and/or transaction costs associated with the transfer contemplated herein. This includes each entity's own legal and consulting costs incurred in the preparation, review, and implementation of this Agreement.

6. CEQA Compliance
All Parties shall be responsible for compliance with the California Environmental Quality Act, as applicable.

7. Places of Use
The water delivered to the Westside Districts pursuant to this Agreement shall be used entirely within the service areas of DRWD and KCWA.

8. Other Costs and Liabilities
CCWA shall be responsible for all costs and liabilities associated with the conveyance of water hereunder to Westside Districts to the POT, and Westside Districts shall be jointly and severally responsible for all costs and liabilities associated with the conveyance of water hereunder downstream of the POT. Except as provided in Section 9 below, this Agreement identifies the total cost obligations of the Parties, and neither the CCWA nor the Westside Districts is responsible to the other for any costs or liabilities other than those identified herein.

9. Indemnification
Each Party shall indemnify and hold the other Parties harmless from all liability, loss, damage and cost arising out of any claims, demands, actions or other proceedings by third parties of any nature (including, but not limited to, attorney fees as and when incurred), to the extent the same arises out of (i) the breach of any covenant, agreement or obligation of the Party contained in or contemplated by this Agreement, (ii) any representation or warranty of the party set forth in this Agreement having been untrue in #54607v1

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any material respect when made, except to the extent in either (i) or (ii) above that such claim arises from the indemnified Party's willful misconduct or negligence.

10. Force Majeure
In the event that an unavoidable event renders the performance of this Agreement impossible or infeasible, the parties hereto shall be excused from the performance thereof; provided, however, that DRWD, KCWA and CCWA shall first coordinate with DWR to determine whether alternate performance may be possible pursuant to an alternate schedule for completion of performance.

11. Authority
The undersigned representatives of CCWA and the Westside Districts hereby represent that they are authorized to execute this Agreement for the party on whose behalf this Agreement is executed.

12. Notice
Written notice may be provided by either party to the other and shall be in the form of email, followed by first-class mail (postage prepaid), and effective on the date of the first received to the following addresses:

Dudley Ridge Water District
Attn: Justin Rowe, General Manager
8501 Brimhall Rd. Bldg. 200, Suite 202
Bakersfield, CA 93312
Email: jrowegwestsidewa.org; jmarquez(� westsidewa.org
Berrenda Mesa Water District
Attn: Justin Rowe, General Manager
8501 Brimhall Rd. Bldg. 200, Suite 202
Bakersfield, CA 93312
Email: jroweL westsidewa.orL; jmarquez(westsidewa.org
Lost Hills Water District
Attn: Justin Rowe, General Manager
8501 Brimhall Rd. Bldg. 200, Suite 202
Bakersfield, CA 93312
Email: jrowe((iwestsidewa.org; jmarquezio'westsidewa.org Belridge Water Storage District
Attn: Justin Rowe, General Manager
8501 Brimhall Rd. Bldg. 200, Suite 202
Bakersfield, CA 93312
Email: j_rowe(u?westsidewa.org; jmarquez( ..westsidewa.org Wheeler Ridge-Maricopa Water Storage District
Attn: Sheridan Nicholas, Engineer -Manager
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12109 Highway 166,
Bakersfield, CA 93313
Email: [email protected]
Central Coast Water Authority
Attn: Peter Thompson, Executive Director
255 Industrial Way
Buellton, CA 93427
Email: [email protected]

13. Docusign
All parties consent to using Docusign for this Agreement which shall be binding.

Sincerely,
Peter Thompson
Executive Director
[Signatures on the following page]
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Justin RoweAOtienerai°Manager BY:

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Executed by the undersigned on the dates set forth below.

CENTRAL COAST WATER AUTHORITY
,-Signed by:

BY: PDX ttt,OwySti A.

Peter TIVE,1xecutive Director
DATE: 7/9/2026
BELRID GE sWA TER STORAGE DISTRICT DUDLEY RIDGEbWATER DISTRICT BY:EJ'AsfitObwt- BY: jVS1IA, reWt,
2hAq UH7t4t,L_ LFA 8Ut31t4..

Justin Rowe,uenera_ Manager Justin Rowe, enera- `Manager DATE: 7/8/2026 DATE: 7/8/2026

BERRENDA MESA WATER DISTRICT
DDocuSigned by:

AStitA, Newt,

WHEELER RIDGE- MARICOPA WATER

STORAGE DISTRICT
—DocuuSigned b
DATE: 7/8/2026

LOST HILLS WATER DISTRICT
BY: 5DocuSigned by:

A,SfitA, rOWt,
Justin Rowe, u`uenerraiManager
DATE: 7/8/2026
3 1FStd
Sheridan i6 i-181 , ttigineer- Manager
DATE: 7/14/2026
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COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Donna G. Schwartz, Chief Deputy City Clerk
DATE: August 4, 2026
SUBJECT: Appointment to the Block Grants Advisory Committee Description:

The City Council will consider making an appointment to the Block Grants Advisory Committee.

Environmental Notice: The activity is not a "Project" as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.

RECOMMENDATION:

Block Grants Advisory Committee
Councilmember Batalla will have the opportunity to make one nomination for an unexpired term ending July 2029, appointed by the Mayor, and confirmed by Council.

Applicant: Nomination to be made by:

Cynthia Gudino Councilmember Batalla
Incumbent — Not Appointed
Isaias Berumen
Esther Acosta
BACKGROUND:

Attendance
Members of the City's Boards, Commissions, and Committees serve an important role in advising staff and the City Council on matters that affect policy and issues that affect the future of the community; therefore, Members' attendance is key to the work these Boards, Commissions, and Committees perform. Members serve in their capacity as Members at the pleasure of the City Council pursuant to Santa Maria Municipal Code (SMMC) Section 2-16.02. As established by SMMC 2-16.01, Members are required to attend meetings regularly and not miss 25 percent of the regular meetings in a calendar year, or they would be deemed to have resigned upon acceptance by the City Council. While the Municipal Code focuses on the Planning Commission, Recreation and Parks Commission, Board of Appeals, and Library Board, it is the expectation that all City

Boards and Committee Members participate and attend meetings in the same manner as those Boards, Commissions, and Committees defined in the Municipal Code.

DISCUSSION:

Members of the Block Grants Advisory Committee are required by the Political Reform Act (Govt. Code Section 81000-91014), and the City's Conflict of Interest Code, to file Statements of Economic Interest, Form 700, disclosing personal assets and income within 30 days of appointment, annually thereafter, and upon leaving office. Committee Members must also disqualify themselves from participating in decisions which may affect their personal economic interests. Statements of Economic Interests are public documents and may be inspected by any member of the public and copied if requested.

The Fair Political Practices Commission (FPPC) is the State agency which interprets the law's provisions.

Copy of the application may be obtained from the City Clerk's office upon request.

Alternative(s)
A Councilmember could decide to withhold their nomination to a Board, Commission, or Committee until such time as additional applications could be received or there is sufficient opportunity for the Councilmember to make contact with the existing applicant(s) to be considered for nomination.

Impact on the Community
Having members of the public serve on the City's Advisory Bodies provides a positive impact to the community, enabling the City to obtain input from all segments of the community and ensures that the community receives information regarding the activities of the City's Boards, Committees, and Commissions.
2 COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Chenin Dow, Community Development Director
DATE: August 4, 2026
SUBJECT: Introduction of an Ordinance Amending Title 12 - Zoning, to Establish a "SMHP Senior Mobile Home Park Overlay District", Adding Related Definitions, and Amending the Official Zoning Map of the City.

Description:

The City Council will consider introducing an Ordinance amending Title 12 - Zoning to establish Chapter 12-25B titled "SMHP Senior Mobile Home Park Overlay District", and adding definitions for "Mobile Home Park, Senior" and "Mobile Home Park, All -ages", and amending the official Zoning Map of the City to add a new SMHP Senior Mobile Home Park Overlay District.

Environmental Notice: The proposed Zoning Text Amendments qualify for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) State Guidelines.

RECOMMENDATION:

1. Waive first reading and introduce an Ordinance amending Title 12, Zoning, by adding a new Chapter 12-25B, Titled "SMHP Senior Mobile Home Park Overlay District" and amending the official Zoning Map of the City to add a new SMHP Senior Mobile Home Park Overlay District; and

2. Set for adoption said Ordinance at the next regular City Council meeting.

BACKGROUND:

Mobile home parks within the City of Santa Maria provide an essential source of affordable housing, particularly for fixed -income senior residents. Five parks in the City currently operate as age -restricted communities intended for occupancy by persons 55 years of age and older pursuant to the federal Housing for Older Persons Act (HOPA) and state fair housing regulations. This ordinance is designed to ensure long-term protection of senior -serving mobile home parks and prevent unreviewed conversion to all -age use. The Planning Commission reviewed this item at a Study Session on May 21, 2026. The Planning Commission was supportive of the proposed Ordinance, and the item was scheduled for a Planning Commission hearing on July 1, 2026, where it was recommended for approval to the City Council.

DISCUSSION:

The proposed Ordinance would establish a new SMHP Overlay District applicable to the five existing Senior Mobile Home Parks in the City and to any future Senior Mobile Home Parks that are established. The existing senior mobile home parks include Rancho Buena Vista, Casa Grande, Casa Del Rio, La Maria, and Trailerancho. The SMHP Overlay is intended to function as a Zoning Overlay with requirements regulating occupancy standards, certification and reporting, and prohibition of the conversion of senior mobile home parks to all age parks.

Key components of the proposed ordinance include:
• Preservation of Senior Communities: Formally designates senior mobile home parks to maintain long-term availability as affordable housing for older adults. • Occupancy Standards: Requires that at least 80 percent of occupied mobile home units be occupied by at least one person 55 years of age or older, consistent with HOPA requirements.
• Biennial Certification: Requires biennial age verification and compliance certification by park owners or operators to confirm continued compliance with federal and state senior housing requirements.
• Disclosure Requirements: Mandates that park rules, leases, advertising, and signage clearly identify the property as a Senior Mobile Home Park. • Conversion Protection: Prohibits conversion to all -age status without a City - initiated or owner -requested rezoning process, which includes mandatory public hearings before the Planning Commission and City Council. • The definition of Mobile Home Park is proposed to be amended to add definitions for "Mobile Home Park, Senior" and "Mobile Home Park, All -Ages". • The official zoning map for the city is proposed to be amended to add the SMHP Overlay district designating the five existing senior mobile home parks in the city as SMHP.

The proposed SMHP Overlay would not impose new rent control or management restrictions, nor will the City regulate individual tenancy decisions or residency eligibility.

Park owners and operators remain responsible for compliance with applicable federal and state housing laws. It simply provides a transparent mechanism for the City to monitor and support compliance.

Additionally, the Ordinance directly aligns with the findings and policies of the City's Housing Element. Policies 2.1 and 4.1 specifically encourage strategies to maintain affordability controls on housing options within the community, and to plan for and support the development and preservation of senior housing, accessibility, and service needs of the elderly population. Data from the Housing Element's Housing Needs Assessment highlights that seniors are a designated special -needs population who face heightened housing insecurity because they are more likely to live on fixed incomes while requiring 2 higher levels of care. Specifically, 60 percent (3,405 households) of senior households in Santa Maria are lower -income (earning 80 percent of Area Median Income or less), and 40 percent are currently housing cost -burdened.

By formally establishing the overlay framework, the City can ensure that mobile home parks, which represent a vital segment of Santa Maria's naturally occurring affordable housing stock, are preserved to meet these documented low-income senior needs.

ATTACHMENT(S)
A. Ordinance
B. City of Santa Maria Official Zoning Map with SMHP Overlay 3 Attachment A
ORDINANCE NO.

AN ORDINANCE OF THE CITY COUNCIL

OF THE CITY OF SANTA MARIA, CALIFORNIA
AMENDING TITLE 12, ZONING, BY ADDING A NEW CHAPTER 12-25B TITLED "SMHP SENIOR MOBILE HOME PARK OVERLAY DISTRICT" AND

AMENDING THE OFFICIAL ZONING MAP OF THE CITY TO ADD A NEW

SMHP SENIOR MOBILE HOME PARK OVERLAY DISTRICT
WHEREAS, the City desires to amend its Municipal Code to include a "SMHP Senior Mobile Home Park Overlay District"; and
WHEREAS, the purpose of the SMHP Senior Mobile Home Park Overlay District is to preserve a significant source of affordable, senior housing by ensuring that senior mobile home parks within the City remain available to seniors and are not converted to allow occupancy by persons of all ages; and
WHEREAS, the proposed Ordinance is consistent with the goals, objectives, and policies of the Santa Maria General Plan and Housing Element, including those related to the preservation of affordable housing and housing opportunities for seniors; and WHEREAS, on July 1, 2026, the Planning Commission conducted a duly noticed public hearing, as required by Government Code Section 65854, and voted to recommend that the City Council adopt the Senior Mobile Home Park Overlay District; and
WHEREAS, on August 4, 2026 the City Council conducted a duly noticed public hearing, as required by Government Code Section 65854.

NOW, THEREFORE, IT IS HEREBY ORDAINED by the City Council of the City of Santa Maria, State of California, as follows:

SECTION 1. Title 12, of the Santa Maria Municipal Code is hereby amended to add a new Chapter 12-25B titled "SMHP Senior Mobile Home Park Overlay District", to read as follows:

Chapter 12-25B SMHP Senior Mobile Home Park Overlay District Section 12-25B.01 Regulations designated.

The sections of this Chapter constitute the regulations of the SMHP (Senior Mobile Home Park) Overlay District
Section 12-25B.02 Purpose and Intent.

The purpose of the SMHP Overlay District is to preserve and protect existing mobilehome parks intended for occupancy primarily for seniors in order to:

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(a) Maintain an affordable housing resource for residents aged 55 and older. (b) Prevent displacement of senior households due to conversion of age -restricted parks to all -age parks.
(c) Implement Housing Element policies promoting housing choice, affordability, and anti -displacement.
(d) Ensure consistency with the federal Housing for Older Persons Act of 1995 (42 U.S.C Section 3607)
Section 12-25B.03 Applicability.

The SMHP Overlay District applies to all mobile home parks that meet the definition of "Mobile Home Park, Senior" and are rezoned to the SMHP Overlay District as of the effective date of this Ordinance. The City may apply the SMHP Overlay District concurrently with or subsequent to the permitting of any new senior mobile home parks.

Each land use and proposed development within the SMHP Overlay District shall comply with all applicable requirements of the primary zone, in addition to the requirements of this section.

Section 12-25B.04 Signage, advertising, rental agreements and leases.

Signage, advertising, rental agreements and leases for properties within the SMHP Overlay District shall comply with the following:
(a) Signage, advertising, park rules, regulations, rental agreements and leases for units in a mobile home park in the SMHP Overlay District must state that the park is a "Senior Mobile Home Park."
(b) Any advertisement for a rental or vacancy in the SMHP Overlay District must state that the vacancy is intended for occupancy by at least one person 55 years of age or older.

Section 12-25B.05 Occupancy limitations and rentals.

At least 80 percent of the occupied units in a mobile home park in the SMHP Overlay District must be occupied by at least one person 55 years of age or older.

Section 12-25B.06 Age verification and compliance procedures The City shall ensure that at least 80 percent of the occupied mobile homes in a senior mobile home park are occupied by at least one resident who is 55 years of age or older.

The occupancy verification documentation shall be made available by park owners for inspection by the City upon reasonable notice and request. (a) At least once every two years owners and operators of senior mobile home parks shall submit documentation confirming that at least 80 percent of all occupied mobile homes are occupied by at least one resident 55 years of age or older to the City of Santa Maria Community Development Department. The owners or

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operators of each senior mobile home park shall maintain procedures for verifying the age of park residents.

The owner or operator of each senior mobile home park shall provide to the City a certification substantially in the following form:
"I [name] hereby certify that [number of such mobile homes] mobile homes out of a total of [total number] occupied mobile homes located in this mobile home park are occupied by at least one person 55 years of age or older and it is their primary residence. This certification is based on my personal knowledge of the residents, evidence provided to me in the form of official government documents containing specific information about the current age of the residents, resident affidavits, or age certifications made by residents."
(b) The City shall consider government -issued identification to be reliable documentation of the age of the residents of the senior mobile home park, provided that it contains specific information about current age or date of birth (e.g., driver's license).
(c) Reliable documentation shall also include a certification in a lease, application, affidavit, or other document signed by any member of the household aged 18 or older asserting that at least one person in the unit is 55 years of age or older. (d) If the occupant(s) of a particular mobile home refuse or are unable to comply with these age verification procedures, the City may, if it has sufficient evidence, consider the unit to be occupied by at least one person 55 years of age or older.

Such evidence may include:
i. Government records or documents;
ii. Prior forms or applications; or
iii. A statement from an individual who has personal knowledge of the age of the occupants. The individual's statement must set forth the basis for such knowledge and be signed under penalty of perjury.
(e) No later than 30 days after a request for age verification by a mobile home park owner or operator or an employee or agent of the City, all owners and residents of all mobile homes located, or proposed to be located, within the SMHP Overlay District shall provide to the mobile home park operator the requested age verification documents.

SECTION 2. Title 12, Chapter 12-2, Definitions, Section 12-2.102 of the Santa Maria Municipal Code is hereby amended to revise the definition of "Mobile home park", to read as follows:

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Section 12-2.102 Mobile home park.
"Mobile home park" means any lot or parcel of land where trailer or mobile home sites are rented or leased or offered for rent or lease for one or more house trailers or mobile homes (compare "-ouris camp.").
(a) Mobile Home Park, Senior. A mobile home park where at least 80 percent of the occupied units must be occupied by at least one person 55 years of age or older.
(b) Mobile Home Park, All -ages. A mobile home park where the units are rented or leased to the general public regardless of the ages of the residents or occupants.

SECTION 3. An Amendment to the Official Zoning Map of the City of Santa Maria is hereby approved adding a new Zone District identified as "SMHP Senior Mobile Home Park Overlay District" as shown on Attachment B of the Council Agenda Report dated August 4, 2026, incorporated herein by reference.

SECTION 4. This Ordinance has been reviewed for compliance with the California Environmental Quality Act (CEQA), and the CEQA guidelines, and the City's environmental procedures and has been found to be exempt pursuant to Section 15061(b)(3) (common sense exemption) of the CEQA guidelines. The City Council finds that there is no possibility the passage of this Ordinance amending the zoning code will have a significant effect on the environment because the changes are administrative in nature and do not approve specific development projects. Any future development projects utilizing the provisions of this Ordinance will be subject to separate environmental review under CEQA, as applicable, based on their specific characteristics, location, and potential impacts. Thus, the ordinance itself does not foreseeably result in construction activities or physical changes to the environment, either directly or indirectly.

SECTION 5. The City Council finds that the proposal is in accordance with the provisions of the General Plan of the City, that the proposed modifications are required for the public necessity, convenience, and general welfare, and that in the case of the zone change, the area is afforded the servies and facilities appropriate for the zone proposed. If any part or provision of this chapter, or the application thereof to any person or circumstance, is held invalid, the remainder of the chapter, including the application of that part or provision to other persons or circumstances, shall not be affected thereby and shall continue in full force and effect. To this end, the provisions of this ordinance are severable.

SECTION 6. The Chief Deputy City Clerk is hereby authorized to make minor changes herein to address clerical errors, so long as substantial conformance of the intent of this document is maintained. In doing so, the Chief Deputy City Clerk shall consult with the City Manager and City Attorney concerning any changes deemed necessary.

SECTION 7. This Ordinance shall be in full force and effect thirty days after its passage.

Within fifteen days following its passage, the City Clerk shall cause this Ordinance to be published in a newspaper of general circulation in accordance with State Law; or when

Page 4 of 5 ends

deemed necessary due to the length or complexity of the Ordinance, cause a summary of the Ordinance to be prepared and published at least five days prior to the City Council meeting at which the proposed Ordinance is to be adopted. If a summary is published at least five days prior to the City Council meeting at which the proposed Ordinance is to be adopted, then within fifteen days after adoption of the Ordinance the City Clerk shall publish a summary of the Ordinance with the names of those City Council Members voting for and against the Ordinance and shall post a certified copy of the full text of such adopted Ordinance along with the names of those City Council Members voting for and against the Ordinance.

INTRODUCED at a regular meeting of the City Council held on the 4th day of August 2026, and PASSED AND ADOPTED at a regular meeting held on the day of 2026, by the following roll call vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

Mayor
ATTEST:

Chief Deputy City Clerk
APPROVED AS TO FORM:

City Attorney
APPROVED AS TO CONTENT:

Department Director
City Manager

Page 5 of 5 ends

Attachment B
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(-; hnologies, Inc, M'ET\NASA, USGS, Bureau of Land Management, EPA, NPS, US Census Bureau, USDA, Ordinance No. 2026-02
Adopted June 2, 2026
Director of Community Development
City of Santa Maria Community Development Dept. 110 S. Pine St. #10I, Santa Maria, CA 93458 Zoning map as of June 2026.

This map is updated periodically. Please check with the Community Development Department for any possible changes.

This is the unoffical zoning map for illustration only. Base data provided by Santa Barbara County.

Not drawn to engineering standards.

Update by: Carol Ziesedsenne

TO:

FROM:

DATE:

SUBJECT:

COUNCIL AGENDA REPORT
Mayor and City Council
Chenin Dow, Community Development Director
August 4, 2026
Introduction of Ordinances Amending Various Sections of Title 12 — Zoning, Relating to Child Day Care Centers, Non-taxable Merchandise Limitations, Transitional and Supportive Housing, Density Bonus, and Accessory Dwelling Units.

Description:

The City Council will consider the introduction of two Ordinances amending various Sections of Title 12 — Zoning, relating to Child Day Care Centers, Non-taxable Merchandise Limitations, Transitional and Supportive Housing, Density Bonus, and Accessory Dwelling Units.

Environmental Notice: The proposed ordinance amendments are exempt from the requirements of the California Environmental Quality Act (CEQA) per Public Resources Code Section 21080.17, and CEQA Guidelines Section 15061(b)(3).

RECOMMENDATION:

1. Waive first reading and introduce an Ordinance amending various sections of Title 12 -Zoning of the Santa Maria Municipal Code relating to Child Day Care Centers, Non-taxable Merchandise Limitations, Transitional and Supportive Housing, and Density Bonus; and

2. Waive first reading and introduce an Ordinance amending Title 12, Chapter 12-56, Accessory Dwelling Units; and

3. Set for adoption said Ordinances at the next regular City Council meeting.

BACKGROUND:

The proposed amendments include updates to Title 12, Zoning, of the Santa Maria Municipal Code to address recent updates by the State legislature for Accessory Dwelling Units, compliance with the City's Housing Element Programs addressing Transitional and Supportive Housing and Employee Housing, and added flexibility in the types of uses that are permitted in shopping centers located within commercial zone districts. This item includes two Ordinances; one that includes proposed amendments to various sections of Title 12, and one that is specifically for Accessory Dwelling Units as this Ordinance is required to be reviewed and approved by the State Department of Housing and Community Development following adoption by the City Council. The proposed Ordinances were reviewed by the Planning Commission at a Study Session on May 21, 2026 and at hearing on July 1, 2026 where both were recommended to the City Council for approval.

DISCUSSION:

The following is a summary of the proposed ordinance amendments to Title 12, Zoning (see Attachments A and B).

Density Bonus
The proposed ordinance amendments to Chapter 12-48, Density Bonus, of Title 12 are required for the Municipal Code to comply with Government Code Section 65915, which governs density bonuses and other incentives. The ordinance includes the procedures for density bonus applications including determinations of qualification, development incentives, review procedures, and compliance with Objective Design Standards.

Sections that are no longer in compliance with State law or no longer applicable have been removed.

Housing Element Compliance Programs
The City's Housing Element of the General Plan includes Programs 4.D, and 4.E, requiring the City to permit transitional and supportive housing and employee housing for six or fewer employees as permitted uses in all residential zones. Additionally, Programs

4.F and 4.G state that the City will amend Title 12 to be consistent with the latest regulations for childcare facilities and list these larger facilities as permitted uses. To comply with these programs, the amendments include updating the relevant chapters of Title 12 for all residential zones to list transitional and supportive housing defined in Government Code Section 65582 and implemented under Health and Safety Code Section 50675.14 as a permitted use. Employee housing defined in Health and Safety Code Section 17021.5 providing accommodation for six or fewer employees is also proposed to be listed as permitted in residential districts.

Child day care centers that currently require a Conditional Use Permit will be listed as a permitted use in all residential, commercial and industrial zones. These facilities are required to comply with the State licensing provisions and any relevant Title 12 development standards for the zone addressing parking, landscaping, building height, setbacks, etc. The proposed ordinance specifies that child day care centers are only permitted in industrial zones when associated with, and integrated into, a facility that is a permitted or conditionally permitted use.

Non-taxable Merchandise Limitations
On October 21, 1997, the City Council adopted Ordinance 97-12, that added the following provision to shopping centers located in the Central Business (C-1) and General Commercial (C-2) districts:

For commercial uses exceeding 90,000 square feet of gross floor area, the non- taxable merchandise floor area shall not exceed eight percent of the total gross floor area of the building occupied by the commercial use. (Ord. 97-12, Enacted, 12/4/97)
The intent was to preserve the City's existing shopping centers that are generally located along Broadway and Main Street and maintain retail sales tax income for the City. The 2 General Plan Land Use Element was also amended at that time to include this limitation.

In the more than 25 years since this ordinance was adopted, the nature of retail sales and the types of businesses that occupy larger shopping centers has changed. This is in part a result of the popularity of online retail sales with fewer customers purchasing items in person at retail stores. Additionally, larger retail stores such as Costco Wholesale, Winco, Target, Sams Club, and Walmart now include a much wider variety of groceries and food products along with taxable merchandise. Specialty grocery stores like Sprouts, California Fresh, and Whole Foods have also gained in popularity as well as a variety of recreational types of uses that may be appropriate to locate within shopping centers located in commercial districts.

The proposed ordinance includes deleting this provision in both the C-1 and C-2 districts.

Removal of this requirement will provide greater flexibility for the types of uses permitted within shopping centers and avoid situations where vacant buildings cannot be occupied by a use that is permitted but may exceed the eight percent non-taxable limitation. The proposed amendment is also consistent with the City's recently adopted General Plan which superseded the prior General Plan that included this provision.

Accessory Dwelling Units and Junior Accessory Dwelling Units During the 2025 legislative session, the legislature passed and the Governor signed four new bills (AB 462, AB 1154, SB 9, and SB 543) further amending the State laws regulating ADUs and JADUs. To be consistent with State law, Chapter 12-56 of Title 12 is proposed to be amended to address the following:
• A definition of "Livable Space" has been added which is defined as: "A Space in a dwelling intended for human habitation, including living, sleeping, eating, cooking, or sanitation."
• No replacement parking is required when an attached garage is converted to a JADU.
• Owner occupancy is no longer required for a JADU that has its own sanitation facilities within the unit. If a JADU shares a sanitation facility with the principal dwelling, owner occupancy in either the principal dwelling or JADU is required. • Permit processing timelines:
o Within 15 business days — Notification of application completeness or incompleteness.
o Within 60 days from complete application — Permit is approved or denied unless the applicant requests a delay or there is an application to create a new primary dwelling unit on the site.
o Determinations regarding incompleteness or denial may be appealed to the Planning Commission within 14 calendar days following the written determination. Planning Commission is required to provide a final written determination within 60 days after receipt of the appeal. 3 Within 60 days following the adoption of the amended Ordinance by the City Council, the City is required to submit the adopted Ordinance to the California Department of Housing and Community Development (HCD) for review. The City is required to respond to any questions or comments received following review by HCD within 30 days.

ATTACHMENT(S)
A. Ordinance Amending Various Sections of Title 12
B. Ordinance Amending Title 12, Chapter 12-56, Accessory Dwelling Units 4 Attachment A
ORDINANCE NO.

AN ORDINANCE OF THE CITY COUNCIL

OF THE CITY OF SANTA MARIA, CALIFORNIA
AMENDING VARIOUS SECTIONS OF TITLE 12 -ZONING OF THE

SANTA MARIA MUNICIPAL CODE RELATING TO CHILD DAY CARE CENTERS,

NON-TAXABLE MERCHANDISE LIMITATIONS, TRANSITIONAL AND

SUPPORTIVE HOUSING, AND DENSITY BONUS
WHEREAS, the City of Santa Maria routinely considers technical amendments to the Municipal Code to address updates in State law, General Plan Amendments, and to correct inconsistencies as needed; and
WHEREAS, the proposed Amendments are consistent with the City of Santa Maria General Plan; and
WHEREAS, on July 1, 2026, the Planning Commission of the City of Santa Maria held a noticed public hearing and voted to recommend that the City Council adopt the proposed amendments to Title 12 of the Santa Maria Municipal Code; and WHEREAS, on August 4, 2026, the City Council conducted a noticed public hearing.

NOW, THEREFORE, IT IS HEREBY ORDAINED by the City Council of the City of Santa Maria, State of California, as follows:

SECTION 1. Title 12, Chapter 12-5, Section 12-5.03 of the Santa Maria Municipal Code is hereby amended as follows:

Section 12-5.03 Permitted uses.

The following uses shall be permitted in the RA district:
(a) Dwellings, single-family, and accessory dwelling units; (b) Keeping of cattle, sheep, goats or horses on a lot or parcel of land having an area of not less than two acres; provided, that not more than two such animals per acre are permitted, including the supplementary feeding of such cattle, sheep, goats or horses; provided further, that such grazing is not a part of nor conducted in conjunction with any dairy, livestock feedyard, livestock sales yard or commercial riding academy located on the same premises. No buildings, structures, pens or corrals designed or intended to be used for the housing or concentrated feeding of such stock shall be used on the premises for such grazing other than racks for supplementary feeding, troughs for watering or incidental fencing;
(c) Tree farming;
(d) Home occupations subject to the home occupation regulations contained in Chapter 12-29 of this title.
(e) Cottage food operations when in accordance with the requirements established in Chapter 12-29B of this title.

Page 1 of 22 ends

(f' Transitional Housing (as defined in Government Code Section 65582) (q' Supportive Housing (as defined in Government code Section 65582 and implemented in Health and Safety Code Section 50675.14)
(h) Employee housing providing accommodation for six or fewer employees (as defined in Health & Safety Code Section 17021.5)
(I) Employee housing meeting the provisions of Health and Safety Code Section 17021.6 SECTION 2. Title 12, Chapter 12-6, Section 12-6.03 and 12-6.04 of the Santa Maria Municipal Code is hereby amended as follows:

Section 12-6.03 Permitted uses.

The following uses are permitted in the R-1 district:
(a) Home occupations subject to home occupation regulations. See Chapter 29 of this title;
(b) Single-family dwellings, and accessory dwelling units; (c) Crop and tree farming;
(d) Care of nonrelated persons (six or less persons);
(e) Keeping of household pets, aviaries and greenhouses for domestic or hobby use; such structures shall comply with provisions contained in Chapter 12-27, Accessory Structures. The keeping of roosters, goats, sheep, pigs, horses, cows or similar animals is specifically prohibited;
(f) Small family day care homes;
(g) Large family day care homes when located in a single-family residence and when in accordance with requirements established in Chapter 12-29A of this title; (h) Cottage food operations when in accordance with the requirements established in Chapter 12-29B of this title.
(i; Transitional Housing (as defined in Government Code Section 65582); C) Supportive Housing (as defined in Government Code Section 65582 and implemented in Health and Safety Code Section 50675.14);
(k) Employee housing providing accommodation for six or fewer employees (as defined in Health and Safety Code Section 17021.5);
(I' Child Day Care Center
Section 12-6.04 Conditional uses.

Page 2 of 22 ends

Section 12-35.203. These special development conditions may include, but are not limited to:
(1) Minimum lot size,
(2) Maximum lot coverage,
(3) Hours of operation,
(4) Types of activities permitted,
(5) Building setbacks from adjacent properties,
(6) Landscape buffers,
(7) Architectural design,
(8) Property line walls,
(9) Limitations on dancing, entertainment and the serving of alcoholic beverages, (10) Lighting,
(11) Ingress and egress,
(12) Noise -attenuation measures.
(de) An increase in pipeline capacity through the repair, maintenance, replacement or installation of new pipelines as defined in Section 12-2.113.1; (e#) A commercial parking lot, provided that the commercial use is contiguous to the residentially zoned lot. If a dedicated public alley lies between the commercial use and the residentially zoned lot, the property may be determined to be contiguous to the residentially zoned lot;
(fg) Care of non -related persons, seven or more persons.

SECTION 3. Title 12, Chapter 12-6A, Section 12-6A.03 and 12-6A.04 of the Santa Maria Municipal Code is hereby amended as follows:

Section 12-6A.03 Permitted uses.

The following uses are permitted in the RSL-1 district:
(a) Home occupations subject to a home use permit. See Chapter 29 of this title; (b) Single-family dwellings, and accessory dwelling units; (c) Crop and tree farming;
(d) Care of nonrelated persons (six or less persons);
(e) Keeping of household pets, aviaries and greenhouses for domestic or hobby use; such structures shall comply with provisions contained in Chapter 12-27, Accessory Structures. The keeping of roosters, goats, sheep, pigs, horses, cows or similar animals is specifically prohibited;
(f) Small family day care homes;
(g) Large family day care homes when located in a single-family residence and when in accordance with requirements established in Chapter 29A; (h) Cottage food operations when in accordance with the requirements established in Chapter 12-29B of this title.

C) Transitional Housing (as defined in Government Code Section 65582); C) Supportive Housing (as defined in Government Code Section 65582 and implemented in Health and Safety Code Section 50675.4);
(k) Employee housing providing accommodation for six or fewer employees (as defined in Health & Safety Code Section 17021.5);
(I) Child Day Care Center

Page 3 of 22 ends

Section 12-6A.04 Conditional uses.

6.04(c)4-6.

SECTION 4. Title 12, Chapter 12-7, Section 12-7.03 and 12-7.04 of the Santa Maria Municipal Code is hereby amended as follows:

Section 12-7.03 Permitted uses.

The following uses are permitted in the R-2 district:
(a) Single-family dwellings when they meet all requirements set out in the R-1 district, and accessory dwelling units when allowed pursuant to Section 12-56.01(c); (b) Duplexes;
(c) Two detached dwelling units;
(d) Home occupations subject to obtaining a home use permit. See Chapter 12-29 of this title;
(e) Care of nonrelated persons (six or less persons);
(f) Small family day care homes;
(g) Keeping of household pets, aviaries and greenhouses for domestic or hobby use; such structures shall comply with provisions contained in Chapter 12-27, Accessory Structures. The keeping of roosters, goats, sheep, pigs, horses, cows or similar animals is specifically prohibited;
(h) Large family day care homes when located in a single-family residence and when in accordance with requirements established in Chapter 12-29A of this title; (i) Cottage food operations when in accordance with the requirements established in Chapter 12-29B of this title.

C) Transitional Housing 'as defined in Government Code Section 65582) (k) Supportive Housing (as defined in Government Code Section 65582 and implemented in Health and Safety Code Section 50675.14)
(I) Employee housing providing accommodation for six or fewer employees (as defined in Health and Safety Code Section 17021.5);
(m) Child Day Care Center
Section 12-7.04 Conditional uses.

Page 4 of 22 ends

zone, shall be permitted in the R-2 district subject to obtaining a conditional use permit according to the procedures set forth in Article 2 of Chapter 12-3 of this title:
(a) Dwelling groups, triplexes and fourplexes, when density requirements can be met; (b) Churches;
(c) Public utility uses;
(d) Chi d day care centers;
(de) Private schools;
(ef) Care of nonrelated persons (seven or more persons); (fg) Lodges and clubs, subject to the special development conditions as determined by the Planning Commission, on a case -by -case basis, as necessary to ensure maximum compatibility with adjacent land uses and to make the required findings specified in Section 12-35.203. These special development conditions may include, but are not limited to:
(1) Minimum lot size,
(2) Maximum lot coverage,
(3) Hours of operation,
(4) Types of activities permitted,
(5) Building setbacks from adjacent properties,
(6) Landscape buffers,
(7) Architectural design,
(8) Property line walls,
(9) Limitations on dancing, entertainment and the serving of alcoholic beverages, (10) Lighting,
(11) Ingress and egress,
(12) Noise -attenuation devices;
(g#h) A commercial parking lot, provided that the commercial use is contiguous to the residentially zoned lot. If a dedicated public alley lies between the commercial use and the residentially zoned lot, the property may be determined to be contiguous to the residentially zoned lot;
(h+) An increase in pipeline capacity through the repair, maintenance, replacement or installation of new pipelines as defined in Section 12-2.113.1; (j) Residential developments with a total of three or more dwelling units on the property.

SECTION 5. Title 12, Chapter 12-8, Section 12-8.03 and 12-8.04 of the Santa Maria Municipal Code is hereby amended as follows:

Section 12-8.03 Permitted uses.

The following uses are permitted in the R-3 district:
(a) Single-family dwellings, including accessory dwelling units as allowed by Section 12-

56.01(c); duplexes and triplexes;
(b) Group dwellings;
(c) Dwelling groups;
(d) Home occupations, subject to home use permits. See Chapter 12-29 of this title; (e) Keeping of household pets, aviaries and greenhouses for domestic or hobby use; such structures shall comply with provisions contained in Chapter 12-27, Accessory Structures. The keeping of roosters, goats, sheep, pigs, horses, cows or similar

Page 5 of 22 ends

animals is specifically prohibited;
(f) Care of nonrelated persons (six or less persons);
(g) Small family day care homes;
(h) Large family day care homes when located in a single-family residence and when in accordance with requirements established in Chapter 12-29A of this title; (i) Cottage food operations when in accordance with the requirements established in Chapter 12-29B of this title.

C) Transitional Housing (as defined in Government Code Section 65582) (k) Supportive Housing (as defined in Government Code Section 65582 and implemented in Health and Safety Code Section 50675.14)
(I' Employee housing providing accommodation for six or fewer employees (as defined in Health and Safety Code Section 17021.5)
(m; Child Day Care Centel
Section 12-8.04 Conditional uses.

The following uses and those similar uses which the Planning Commission finds to fall within the intent and purpose of this zone, that will not be more obnoxious or detrimental to the public welfare, are found by the commission to be compatible with adjoining land uses, and which are of a comparable nature and of the same class enumerated for this zone, shall be permitted in the R-3 district subject to obtaining a conditional use permit according to the procedures set forth in Article 2 of Chapter 12-35 of this title:
(a) Churches;
(b) Public utility uses;
(c) Chi d day care centers;
(c4) Private schools;
(de) Care of nonrelated persons (seven or more persons); (ef) Lodges and clubs, subject to the special development conditions as determined by the Planning Commission, on a case -by -case basis, as necessary to ensure maximum compatibility with adjacent land uses and to make the required findings specified in Section 12-35.203. These special development conditions may include, but are not limited to:
(1) Minimum lot size,
(2) Maximum lot coverage,
(3) Hours of operation,
(4) Types of activities permitted,
(5) Building setbacks from adjacent properties,
(6) Landscape buffers,
(7) Architectural design,
(8) Property line walls,
(9) Limitations on dancing, entertainment and the serving of alcoholic beverages, (10) Lighting,
(11) Ingress and egress,
(12) Noise -attenuation devices;
(fg) A commercial parking lot, provided that the commercial use is contiguous to the residentially zoned lot. If a dedicated public alley lies between the commercial use and the residentially zoned lot, the property may be determined to be contiguous to the

Page 6 of 22 ends

residentially zoned lot;
(gh) Miniwarehouses under the following conditions:
(1) The miniwarehouse development is in a location which would provide a service to the immediate residential neighborhood,
(2) The parcel of land proposed for development must have unique characteristics which make residential development impractical. Such characteristics would include, but not be limited to, encroachment by oil wells, exposure to high noise levels and access constraints,
(3) The development of the miniwarehouse complex must be compatible with the neighborhood and have no significantly adverse effect on abutting property, (4) The miniwarehouse development standards in Section 12-15.14 of this Code shall be considered as development guidelines for miniwarehouse development in the R-3 zoning district;
(hi) An increase in pipeline capacity through the repair, maintenance, replacement or installation of new pipelines as defined in Section 12-2.113.1; (j) Public schools;
([k) Residential developments with a total of four or more dwelling units on the property; (kl) Boardinghouses;
(Ins) Student housing.

SECTION 6. Title 12, Chapter 12-10, Section 12-10.03 and 12-10.04 of the Santa Maria Municipal Code is hereby amended as follows:

Section 12-10.03 Permitted uses.
(a) The following uses shall be permitted in the CPO district:
(1) Art studios and art galleries;
(2) Business or professional offices;
(3) Insurance sales;
(4) Travel agencies;
(5) Photographic studios;
(6) Medical and/or dental laboratories;
(7) Medical or dental offices;
(8) Stock brokerages;
(9) Massage businesses (as defined in Section 4-18.101(m)); (10) Public utility offices;
(11) Camera and watch repair;
(12) Beauty shops;
(13) Physical fitness center/health club.
(14) Emergency shelters subject to compliance with all requirements set forth in Chapter 12-53 of this title.
(15) Child Day Care Center
(b) Those uses not listed, which are determined to be similar in nature and which are compatible with the purpose and intent of this zone, may be permitted.

Page 7 of 22 ends

Section 12-10.04 Conditional uses.

Those similar uses which the Planning Commission finds to fall within the intent and purpose of this zone, that will not be more obnoxious or detrimental to the public welfare, are found by the Planning Commission to be compatible with adjacent properties provided that conditions and development standards are applied to mitigate any potentially adverse impacts, shall be permitted in the CPO district subject to obtaining a conditional use permit according to the procedures set forth in Article 2 of Chapter 12-35 of this title. Examples include:
(a) An apartment or living quarters for the owner, caretaker or occupant of the building site;
(b) Hospitals or convalescent hospitals;
(c) Rest homes;
(d) Pharmacies (in conjunction with a medical facility); (e) Banks and savings and loan associations;
(f) Music schools;
(g) Repealed per Ordinance No. 2005-04.
(h) Lodges and clubs;
(i) Churches;
(j) Any use associated with the above permitted office uses with drive -up, drive-in or drive - through facilities for serving customers from their vehicle; (k) An increase in pipeline capacity through the repair, maintenance, replacement or installation of new pipelines as defined in Section 12-2.113.1; (I) Florists;
(m) Chi d daycare centers;
(ma) Copy service centers.

SECTION 7. Title 12, Chapter 12-11, Section 12-11.03 and 12-11.04 of the Santa Maria Municipal Code is hereby amended as follows:

Section 12-11.03 Permitted uses.

The following uses are permitted in the CC district:
(a) Bakeries;
(b) Barbershops;
(c) Delicatessens;
(d) Grocery stores;
(e) Laundry and cleaning establishments (retail to general public including self-service); (f) Pharmacies;
(g) Public utility offices;
(h) Restaurants (no sale or consumption of alcoholic beverages on the premises); (i) Beauty shops;
(j) Florist;
(K) Child Day Care Center;
Section 12-11.04 Conditional uses.

Those similar uses which the Planning Commission finds to fall within the intent and purpose of this zone, that will not be more obnoxious or detrimental to the public welfare

Page 8 of 22 ends

and are found by the commission to be compatible with adjoining land uses, provided that conditions and development standards are applied to mitigate any potentially adverse impacts, shall be permitted in the CC district subject to obtaining a conditional use permit according to the procedures set forth in Article 2 of Chapter 12-35 of this title. Examples include:
(a) Restaurants (including sale and consumption of alcoholic beverages on the premises); (b) Banks and financial institutions;
(c) Drugstores;
(d) Penny arcades, as provided in Section 12-11.05;
(e) Any use with drive -up, drive-in or drive -through facilities for serving customers from their car, except the sale of gasoline and other fuels is prohibited; (f) An increase in pipeline capacity through the repair, maintenance, replacement or installation of new pipelines as defined in Section 12-2.113.1; (g) An apartment or living quarters which can be occupied only by the owner, caretaker or someone associated with a business located in the building; (h) Chi d daycare centers;
(hi) Carpet sales.

SECTION 8. Title 12, Chapter 12-12, Section 12-12.03, 12-12.04, and 12-12.19 of the Santa Maria Municipal Code is hereby amended as follows:

Section 12-12.03Permitted uses.

The following uses are permitted in the C-1 district:
(a) Retail sales, such as:
(1) Art supply,
(2) Clothing stores,
(3) Department stores,
(4) Drugstores,
(5) Ice cream shops,
(6) Jewelry stores,
(7) Sporting goods stores,
(8) Radio, TV, stereo sales,
(9) Beauty shops;
(b) Service:
(1) Banks and financial institutions,
(2) Commercial and professional office,
(3) Restaurants,
(4) Physical fitness center/health club,
(5) Temporary buying within a hotel or motel;
(6) Child Day Care Center
(c) All uses permitted in the CC and CPO districts, except for emergency shelters; (d) Efficiency Unit Projects, subject to Chapter 12-52.

Section 12-12.04 Conditional uses.

Those uses which the Planning Commission finds to fall within the intent and purpose of this zone, that will not be more obnoxious or detrimental to the public health and welfare and are found by the commission to be compatible with adjoining land uses, provided that

Page 9 of 22 ends

conditions and development standards are applied to mitigate any potentially adverse impacts, are permitted in the C-1 district subject to obtaining a conditional use permit according to the procedures set forth in Article 2 of Chapter 12-35 of this title. Examples include
(a) Bars and cocktail lounges, and restaurants serving alcoholic beverages; (b) Hotels or motels;
(c) Passenger terminals;
(d) Pet shops, (exception: fish sales only does not require a CUP); (e) Lodges and clubs;
(f) Churches;
(g) Mechanical riding machines;
(h) Penny arcades, as provided in Section 12-12.05;
(i) Any use with drive -up, drive-in or drive -through facilities for serving customers from their vehicle;
(j) Temporary retail sales within a hotel or motel;
(k) An increase in pipeline capacity through the repair, maintenance, replacement or installation of new pipelines as defined in Section 12-2.113.1; (I) Farmers' markets;
(m) Arts and crafts sales;
(n) Auditoriums;
(o) Community centers;
(p) Theaters;
(q) Concurrent retailing of motor vehicle fuel with alcoholic beverages for off -premises consumption at existing nonconforming service stations; (r) An apartment or living quarters which can be occupied only by the owner, caretaker or someone associated with a business located in the building; (s) Chi d daycare centers;
(st) Senior citizen housing;
(tii) Buyback recycling facility when in conjunction with an existing business; (uv) Emergency shelters subject to compliance with all requirements set forth in Chapter 12-53 of this title.

Section 12-12.19 Non-taxable merchandise limitations.

For commercial uses exceeding 90,000 square feet of gross floor area, the non taxable merchandise - oor area sha no exceed 8% o- the o a gross - oor area o he bui ding occupied by -he commercia use.

SECTION 9. Title 12, Chapter 12-13, Section 12-13.04, and 12-13.17 of the Santa Maria Municipal Code is hereby amended as follows:

Section 12-13.04 Conditional uses.

Those uses which the Planning Commission finds to fall within the intent and purpose of this zone, that will not be more obnoxious or detrimental to the public welfare, and are found by the commission to be compatible with adjoining land uses, provided that conditions and development standards are applied to mitigate any potentially adverse impacts, are permitted in the C-2 district subject to obtaining a conditional use permit

Page 10 of 22 ends

according to the procedures set forth in Article 2 of Chapter 12-35 of this title. Examples include:
(a) Bars, cocktail lounges and restaurants serving alcoholic beverages; (b) Bowling alleys;
(c) Butane and propane service stations;
(d) Chi d daycare centers;
(de) Nightclubs;
(ef) All other automotive repair shops, including body and fender repair shops; (fg) Service stations;
(gig) Veterinary clinics;
(h+) Repealed per Ordinance 2005-04.
(i}) Car washes;
(lc) Light wholesale uses which supply goods and materials which are sold in retail stores permitted in the C-1 district and C-2 district; provided, however, that the uses do not generate significant truck traffic;
(Id) Lodges and clubs;
(lm) Churches;
(ma) Mechanical riding machines;
(no) Penny arcades, as provided in Section 12-13.05;
(op) Automobile sales;
(pq) Boat sales;
(gr) Bus and taxi terminals;
(rs) Nurseries;
(st) Trailer sales;
(ta) Recreational vehicle sales;
(uv) Any use with drive -up, drive-in or drive -through facilities for serving customers from their vehicle;
(vw) Temporary retail sales within a hotel or motel;
(wx) An increase in pipeline capacity through the repair, maintenance, replacement or installation of new pipelines as defined in Section 12-2.113.1; (xy) Tractor and farm equipment sales;
(yz) Tire sales and service;
(zaa) Concurrent retailing of motor vehicle fuel with alcoholic beverages for off -premises consumption;
(aab) An apartment or living quarters which can be occupied only by the owner, caretaker or someone associated with a business located in the building; (bbGG) Buyback recycling facility when in conjunction with an existing business; (ccdd) Emergency shelters subject to compliance with all requirements set forth in Chapter 12-53 of this title.

Section 12-13.17 Non-taxable merchandise limitations.

For commercial uses exceeding 90,000 square feet of gross floor area, the non-taxable merchandise floor area shall not exceed 8% of the total gross floor area of the building occupied by -he commercia use.

Page 11 of 22 ends

SECTION 10. Title 12, Chapter 12-15, Section 12-15.03, and 12-15.05 of the Santa Maria Municipal Code is hereby amended as follows:

Section 12-15.03 Permitted uses.
(a) Industrial, manufacturing and non -public -oriented office uses conducted entirely within an enclosed building, subject to the prescribed performance standards contained in Article 3 of Chapter 12-33 of this title, are permitted in the M -I district. Examples include:
(1) Administrative, executive and date processing offices when incidental and accessory to and directly related to primary industrial or manufacturing uses permitted in this zone;
(2) Non -public -oriented offices which do not provide services or cater to the general public, other than those listed under Section 12-15.04; (3) Scientific research and experimental development laboratories; (4) Architects, engineering and industrial design offices; (5) Light assembly;
(6) Manufacturing, processing and packaging of pharmaceuticals and drugs; (7) Manufacturing, processing and packaging of scientific, optical, medical, dental and precision instruments;
(8) Printing, publishing and allied industries;
(9) Warehousing and wholesale distributors; terial;
(10) Manufacturing, assembling, packaging and processing of articles or products from previously prepared ma -
(11) Limited retail sales when the product sold is manufactured, fabricated or assembled on site. The retail sales activity shall not provide service to or cater to or attract the general public;
(12) The storage of flammable liquid in underground tanks, with a capacity not exceeding 50 gallons, in conjunction with other permitted uses of the zone; (13) Uses not listed may be permitted upon determination by the Planning Commission to be compatible with the purpose of this zone; (14) Baker (wholesale);
(15) Wholesale and/or retail sales, when such use(s) are within 1,000 feet of the U.S.

Highway 101 and Stowell Road interchange. Restaurants, as an accessory use to the wholesale/retail outlet, may be permitted provided the total floor area of all restaurants does not exceed 10,000 square feet. Retail and restaurant uses within this section are required to comply with parking requirements outlined in 12-32.03 for commercial or restaurant uses.
(16) Child Day Care Center, when associated with, and integrated into, a facility that is a permitted or conditional use;
Section 12-15.05 Conditional uses.

The following uses and those similar uses which the Planning Commission finds to fall within the purpose of this zone, that will not be more obnoxious or detrimental to the public welfare, and are found by the commission to be compatible with adjoining land uses, provided that conditions and development standards are applied to mitigate any potentially adverse impacts, are permitted in the M-1 district subject to obtaining a conditional use permit according to the procedures set forth in Article 2 of Chapter 12-35

Page 12 of 22 ends

and subject to the development standards of Section 12-15.06:
(a) Industrial or manufacturing uses which involve the screened outside storage of materials or products provided the outside storage area does not exceed 15% of the lot area and is to the side or rear of the building(s), and provide the outside storage area incorporates landscaping to maintain compatibility with the prescribed performance standards contained in Article 3 of Chapter 12-33 of this title. (b) Miniwarehouses, subject to the development regulations in Section 12-15.14 of this Code;
(c) Manufacturing and industrial enterprises which, as evidenced by findings in a resolution adopted by the Planning Commission, are compatible and harmonious with nearby existing and permitted uses;
(d) Any use involving the storage or handling of explosive materials, the storage or handling of blasting agents, or the storage or handling of flammable liquids in aboveground tanks;
(e) An increase in pipeline capacity through the repair, maintenance, replacement or installation of new pipelines as defined in Section 12-2.113.1; (f) Truck terminals where the docks and truck parking are behind the buildings or screened by landscaping and walls;
(g) Child care, when associated with, and integrated into, a facility that is a permitted or conditiona use;
(gh) Tractor and heavy equipment sales and service facilities, including landscaped outdoor display and screened storage, when located adjacent to U.S. Highway 101;
(h+) Churches within an existing building;
(i}) Expansion of existing church;
(1k) Establishment of a recreational vehicle storage yard.

SECTION 11. Title 12, Chapter 12-16, Section 12-16.03, and 12-16.05 of the Santa Maria Municipal Code is hereby amended as follows:

Section 12-16.03 Permitted uses.

The following uses are permitted in the C -M (commercial/manufacturing) district subject to the prescribed performance standards contained in Article 2 of Chapter 12-33 of this title:
(a) Manufacturing, such as:
(1) Baker (wholesale),
(2) Cabinet shop;
(b) Processing, such as:
(1) Blueprinting and photocopying,
(2) Carpet and rug cleaning plant,
(3) Bottling plant,
(4) Laboratory (medical or scientific);
(c) Wholesaling, warehousing and storage, not open to the general public, such as:
(1) Wholesaling and warehousing facilities,
(2) Van and storage,

Page 13 of 22 ends

(3) Feed and fuel,
(4) The storage of flammable liquid in underground tanks, subject to approval by the fire marshal;
(d) Utilities, such as:
(1) Distribution plants,
(2) Utility substations;
(e) Repair and equipment services, such as:
(1) Automotive repair and service facilities excluding conditional uses listed in 12-

16.05;
(2) Equipment rental and/or service;
(f) Other:
(1) Heavy retail business when the business is contained wholly within a building, (2) Administrative or executive offices when incidental and accessory to and when directly related to the primary industrial or manufacturing uses permitted in the zone.
(3; Child Day Care Center when associated with, and integrated into, a facility that is a permitted or conditional use
Section 12-16.05 Conditional uses.

Those similar uses which the Planning Commission finds to fall within the intent and purpose of this zone, that will not be more obnoxious or detrimental to the public welfare, and are found by the Planning Commission to be compatible with adjoining land uses, provided that conditions and development standards are applied to mitigate any potentially adverse impacts, are permitted in the CM district subject to obtaining a conditional use permit according to the procedures set forth in Article 2 of Chapter 12-35 of this title and subject to the development standards of Section 12-16.06. Examples include:
(a) Screened material storage yard;
(b) Screened utility yard;
(c) Mini -warehouses subject to the development standards in Section 12-15.14; (d) Screened storage yard;
(e) Any screened outside storage use;
(f) Any use involving the storage or handling of explosive materials. The storage or handling of blasting agents, or the storage or handling of flammable liquids in aboveground tanks;
(g) Kennels;
(h) An increase in pipeline capacity through the repair, maintenance, replacement or installation of new pipelines as defined in Section 12-2.113.1; (i) Commercial vehicle sales, service, or rental facilities; (j) Commercial batting cage facilities when contained within a building; (k) Automotive body and fender repair and/or automotive painting; (I) Heavy retail businesses which are not totally contained within a building; (m) Tire sales and service;
(n) Auto detailing;
(o) Auto wash;
(p) Transmission repair and service;

Page 14 of 22 ends

(q) Screened vehicular parking and storage in conjunction with an existing non- conforming auto salvage yard;
(r) Additions to existing churches located on single tenant building sites; (s) Chi d day care centers;
(st) Recycling, including outside storage;
(tu) Trucking terminals;
(uv) An apartment or living quarters for the caretaker of a building site; (vw) Physical fitness centers/health club;
(wx) Pallet making;
(xy) Camper sales and service;
(yz) Churches within an existing building;
(zaa) Expansion of existing church.

SECTION 12. Title 12, Chapter 12-17, Section 12-17.03, and 12-17.05 of the Santa Maria Municipal Code is hereby amended as follows:

Section 12-17.03 Permitted uses.
(a) The following uses shall be permitted in the M-2 (general manufacturing) district, subject to the prescribed performance standards contained in Chapter 12-33 of this title:
(1) Boat manufacture;
(2) Heavy equipment assembly;
(3) Welding operations;
(4) Sheet metal fabrication;
(5) Storage of flammable liquid in underground tanks, subject to fire marshal approval; (6) Administrative or executive offices when incidental and accessory to and when directly related to primary industrial or manufacturing uses permitted in the zone. (7) Child Day Care Center when associated with, and integrated into, a facility that is a permitted or conditional use.
(b) Uses not listed may be permitted upon determination by the Planning Commission to be compatible with the purpose and intent of this zone.

Section 12-17.05 Conditional uses.

Page 15 of 22 ends

aboveground tanks;
(c) Food processing plants;
(d) Salvage yards;
(e) Miniwarehouses subject to the development standards in Section 12-15.14; (f) An increase in pipeline capacity through the repair, maintenance, replacement or installation of new pipelines as defined in Section 12-2.113.1; (g) Pallet making;
(h) Greenhouses;
(i) Chi d daycare -aci i-ies as an accesso-y use;
(y) Battery Energy Storage Systems ("BESS") as a primary or ancillary use, that are a "Front -of -the -Meter" facility, meaning the energy storage collection systems are connected to the distribution system on the utility side of the meter. (For the purposes of this Title, BESS is a unique use from a Substation, Utility Substation, Electrical Substation, Public Utility Structures, Distribution Plant, Utility Distribution Station, Utility Yard, Public Service Facility, or any other Public or Private utility use cited in this Title).

SECTION 13. Title 12, Chapter 12-48, Density Bonus, of the Santa Maria Municipal Code is hereby amended in its entirety as follows:

Section 12-48.01. Purpose and Intent.

The Housing Element of the General Plan sets forth various goals and policies to encourage a variety of housing types and costs a affordability levels to serve the various economic needs of all residents within the community. It is the intent of the City to -ur-her encourage the provision development of housing affordable to lower cos-, very low, low, and moderate costincome level householdsand1 senior citizen housing, and housing for State specified targeted special needs populations such as transitional foster youth, disabled veterans, and homeless persons, and students (herein after referred to collectively in this oChaoter as "affordable and special needs housing") by providing athis Chapter as the City density bonus programordinance, to implement State Density Bonus Law per Government Code Section 65915 et seq., or successor sections.

Section 12-48.02. Compliance with California Density Bonus Law. Government Code Section 65915
In accordance with Government Code Section 65915 et seq., or successor sections, the P anning Commission and/or City Counci shall provide grant the developer incentives more units than the General Plan or Zoning Ordinance would normally allow, for the production of modera e income, ower income, very ow income or senior affordable and special needs housing units when the deve oper proposed Dro'ect meets the requirements set forth in Section 65915 et seq., or successor sections. his chap .er. In the event the Legislature amends specific requirements of Section 65915 et seq. or successor sections, those amendments shall control and apply in Santa Maria pending further amendment of this Cchapter. Terms used in this Chapter shall be interpreted as defined in, or otherwise cited by, Government Code Section 65915 et seq. or successor sections.

Page 16 of 22 ends

Section 12-48.03. Projects Eligible for a Density Bonuses.

Any housing development of five or more units, conforming to the provisions of Government Code Section 65915 et seq. or successor sections, as dc-ined by 50073.5 the Health and Safety Code, any senior citizen housing development as defined in Sec -ion 5' .3 o- the Civi Code, any mobi ehome pa .< tha • imis residency to o der persons pursuant -o Civi Code § 798.76 or 799.5, and any common in .eres development project as defined below, shall be entitled to a density increase over the otherwise maximum allowable gross residential density, as of the date of application by the applicant to the GCity, densi-y bonus resulting in additional dwelling units above the maximum number of dwelling units otherwise allowed by the General Plan and this tTitle,i-n with the amoun . number of additional units being calculated based upon the criteria as specified by Government Code Section 65915 et seq. or successor sections. {g), i- ho proposed deve opment pro.ec- mee s he o owing minimum criteria:
(a) Ten pe-cen- of the o a units in he pro.ec , before he density bonus is app ied, is reserved for lower income households as do incd in Scc ion 50079.5 o the Flea -h and Safety Code; o
(b) Five percent o- the tota uni s in -he p o ec , be o e the densi y bonus is app ied, is reserved for very low income households, as defined in Section 50105 of the Health and Sa-ety Code; or
(c) Fifty percent of the total units in the project, before the density bonus is applied, is reserved for qualifying residents as speci-icd in Scc ion 5 .3 of the State Civi Code; e -F
(d)
Ten percen- o- the ota dwe ing uni s in a Civi Code § ' 35' common in-eres deve opmen projec , be -ore -he dud y bonus is app icd, arc reserved or persons and -ami ics o' modcra c income, provided That a o he units are oered to -he pub is for purchase.

Section 12-48.04. Additional Incentives for Affordable Units. (a) In addition to the density bonus provided by Section 12-48-03, the City shall, through a p anncd dove opment permit, agrcemen-, or subdivision, gran - addi -iona incen -fives or concessions in the number specified by subsection (d)(1) of Government Code Secion659' 5. Examp es inc ude:
(' )
Reducing or waiving deve opmen s•andards, modi-ying o waiving zoning requiremens (incuding minimum o size or se•bac<s), and modiying archi cc ura design rcquiremen s or Public Wor<s requiremen-s which resu - in iden i-iab e cos • reduc ions; or
{2) Prov'ding other regu atory incen
ives or concec' ions proposed by
or -he Ci-y, so as to resu in iden
i-iab e cos reduc ions; or

Page 17 of 22 ends

he deve
oper

{3) A owing he deve oper -o pay deve opment 'mpact Tees over a per'od o- time no to exceed Three years in equa ins -a men .s. The Terms o- an approva under -his section shall be reflected in a written agreement containing provisions for interest and security approved by the Finance Director and City Attorney; or (I) Approving mixed -use zoning in con'unc-ion wi-h -he project. (b) The app icant or a densiy bonus may submi a proposa reques ing specific concessions or incen ives o s .a-- or Commie ion or Counci consideration. n -he case of a proposal that would not qualify for additional concessions or incentives due to the small number of units proposed, the applicant may request to substitute a specific concession or incentive in place of a density bonus. (c) The Commission or Council shall grant a requested concession or incentive for a project described in Section 12 48.03, subsections (a) through (d), unless it makes a written inding based on subs antis evidence either:
{) tha- the add i-iona incentive is no- required in o -der -o provide or affordab e housing costs as defined in Section 50052.5 of theHealth and Safety Code or for rents for the targeted units as specified in Section 65915(c) of the California Governmen Code; or
{2) The concession or incen ive wou d have a specific adverse impac , as defined in paragraph (2) o- subdivision (d) o- Sec -ion 65589.5, upon the pub is hea -h and sa-c-y or upon the physica environment or on any rea proper -y tha- is is-ed in the California Register of Historical Resources and for which -he-e is no feasible method to satisfactorily mitigate or avoid the specific adverse impact withou- rendering the deve opmen- una--o dab e to ow and mode a .e -income househo ds.

Section 12-48.05. Additional Density Bonus For Donation of Land To City; Additional Density Bonus Or Incentive/Concession for Child Care. (a) When an app ican- -or approva o- a residen-ia deve opmen dons es and -o the City according to the requirements of Government Code Section 65915(h), or successor sec -ion, -he app icant sha receive an addi-'ona densiy bonus. (b) When an applicant proposes to construct a housing development as described by Section 12 48.03 and includes a child care facility as defined by Government Code §65915(i), the applicant shall receive either an additional density bonus or an additional incentive or concession according to the terms of Government Code Sec ion 659' 5(i), or successor sec ion.

Section 12-48.06. Repea ed.

Section 12-48.06 was repealed in its entirety and deleted per Ordinance 2006 ' 7.

Section 12-48.074. Procedure for Density Bonus.

Applications for residential projects that also request a density bonus which wi incr so

Page 18 of 22 ends

he densiy beyond :ha o herwise a owed in a specified zoning distric., shall be processed in a manner consistent with procedures for a s andard residential project proposing residential dwellings of the same type in the same in i-s designated zoning district. Developers reques-ing incenrivcs described in 2-18 04(a)(1), however, shall apply for a planned development (PD) permit per Scc-ion '2 35 whc-hcr or no- .he project site is located in a planned development overlay zone.The PD process allows discreionary review o -he pro'ec -o imp emen -he incen Ives and appropriae enforcement measures.

The deve oper may submi o he Communi y Deveopmen Departmen. a wri en proposal for a project pursuant to this chapter prior to the submittal of any formal development applications. Within 90 days of receipt of a proposal, the City shall notiy .he deve oper, in wri-ing, o 'he procedures o be fo owed -o comp y wi h he requirements o- this chap .er.

The application materials submitted by the developer must clearly indicate hoeach requested incentives; or concession(s) pursuant to Government Code Section 65915 subdivision ;d, and/or waiver(s), or modification(s) of development standards pursuant to Government Code Section 65915 (e)are necessary to make the proposed housing units economics y gasib e. Additional information for density bonus projects required when the proposa project application is submitted include:

Li
Li
A written description that specifies the number ype, oca'ion, size and cons ruc-ion scheduling of units in the project which will be designated as the affordable or senior units. of dwelling units permitted by the City of Santa Maria General Plan and Municipal Code for the zoning designation of the project site, Indication of the percen .age income level of the proposed dwelling units that will be reserved for moderate, low or very low income or senior households.

Preliminary plans which depict the proposed income level of dwelling units in the project which will be designated as the affordable and/or special needs housing units, and the resulting total units and density (units per acre) of the proposed project.

Ld,Z An explanation of the methods to be used to verify tenant and/or buyer incomes and to maintain affordability of the affordable housing units, and the financing mechanism for ongoing administration and monitoring of the affordable housing units.

Any proposed phasing of the construction of the affordable and special needs housing units in relation to the nonrestricted units in the housing development.

Reasonable documentation demonstrating that the proposed housing development qualifies and is eligible for the requested bonus residential units by addressing the provisions of Government Code Section 65915(b),1).

A description of all dwelling units existing on the site, and/or that existed on the site in the five-year period preceding the date of submittal of the application.

Lel
Lgi

Page 19 of 22 ends

fl If dwelling units on the site are currently rented, income and household size of all residents of currently occupied units, if known. fit) If any dwelling units on the site were rented in the five-year period but are not currently rented, the income and household size of residents occupying the dwelling units when the site contained the maximum number of dwelling units, if known.

Section 12-48.085. Affordable Housing Density Bonus Agreement.

To be eligible for a density bonus, the developer must sign a binding agreement with the City, approved as to form by the City Attorney's office, which sets forth the conditions and requirements to be met in the implementation of the density bonus program. The Agreement will also establish specified compliance standards and remedies available to the City upon failure by the developer to make units accessible to intended household income level(s) and/or special needs households. The relevant terms and conditions of the density bonus agreement shall be filed and recorded on those individual lots or units of a project development which are designated for the location of target dwelling units. (b) The term o- the agreement sha be at eas 30 years, or such o her perod as may be required by a -financing program for he pro'ec
(c) When the agreement pertains to moderate -income units in a common interest deve opmen , he agreemen- sha contain provisions -or equity sharing as required by Governmen- Code Sec ion 659'5(c), o- successor sec ion.

Section 12-48.096. Requirements for Participation.

In order for a developer to participate in the density bonus program and be c igib e or incen -ivcs, the following requirements must be met:
(a) The developer shall set aside, per the approved agreement, the number of units which are designated for affordable and/or moderate, ow, very ow or senor special needs housing houscho ds. A unit will be counted toward meeting the set -aside requirement if it is either vacant or occupied by a qualified resident. (b) The targetaffordable and special needs housing units must be compatible in floor plan, furnishings, and exterior design to the non -designated units. Further, the targetaffordable and special needs housing units must be equally dispersed in each phase throughout the development.
(c) The maximum allowable rents to comply with the density bonus law are determined by a formula designated by the State Department of Housing and Community Development based on area median income.
(d) Dwellings sold per the agreement shall be affordable to the designated income households as defined by income limits established by the State Department of

Page 20 of 22 ends

Housing and Community Development based on area median income. (e) The dcvc oper shall provide to the Community Development Department a yearly accounting o- -he -ota uni-s occupied, -he total units vacant, the -ota units occupied by ower or very ow incomc houscho ds, and -he to -a by which -he units set aside fell short of the required number of units. The distribution (location) of the affordable units must a so be shown.

SECTION 14. This Ordinance has been reviewed for compliance with the California Environmental Quality Act (CEQA), and the CEQA guidelines, and the City's environmental procedures and has been found to be exempt pursuant to Section 15061(b)(3) (common sense exemption) of the CEQA guidelines. The City Council finds that there is no possibility the passage of this Ordinance amending the zoning code will have a significant effect on the environment because the changes are administrative in nature and do not approve specific development projects. Any future development projects utilizing the provisions of this Ordinance will be subject to separate environmental review under CEQA, as applicable, based on their specific characteristics, location, and potential impacts. Thus, the ordinance itself does not foreseeably result in construction activities or physical changes to the environment, either directly or indirectly.

SECTION 15. If any part or provision of this chapter, or the application thereof to any person or circumstance, is held invalid, the remainder of the chapter, including the application of that part or provision to other persons or circumstances, shall not be affected thereby and shall continue in full force and effect. To this end, the provisions of this ordinance are severable.

SECTION 16. The Chief Deputy City Clerk is hereby authorized to make minor changes herein to address clerical errors, so long as substantial conformance of the intent of this document is maintained. In doing so, the Chief Deputy City Clerk shall consult with the City Manager and City Attorney concerning any changes deemed necessary.

SECTION 17. This Ordinance shall be in full force and effect thirty (30) days after its passage. Within fifteen days following its passage, the City Clerk shall cause this Ordinance to be published in a newspaper of general circulation in accordance with State Law; or when deemed necessary due to the length or complexity of the Ordinance, cause a summary of the Ordinance to be prepared and published at least five days prior to the City Council meeting at which the proposed Ordinance is to be adopted. If a summary is published at least five days prior to the City Council meeting at which the proposed Ordinance is to be adopted, then within 15 days after adoption of the Ordinance the City Clerk shall publish a summary of the Ordinance with the names of those City Council Members voting for and against the Ordinance and shall post a certified copy of the full text of such adopted Ordinance along with the names of those City Council Members voting for and against the Ordinance.

Page 21 of 22 ends

INTRODUCED at a regular meeting of the City Council held on the 4th day of August, 2026, and PASSED AND ADOPTED at a regular meeting held on the day of , 2026, by the following roll call vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

Mayor
ATTEST:

Chief Deputy City Clerk
APPROVED AS TO FORM:

City Attorney
APPROVED AS TO CONTENT:

Department Director
City Manager

Page 22 of 22 ends

Attachment B
ORDINANCE NO.

AN ORDINANCE OF THE CITY COUNCIL

OF THE CITY OF SANTA MARIA, CALIFORNIA
AMENDING TITLE 12, "ZONING," CHAPTER 12-56 "ACCESSORY
DWELLING UNITS" OF THE CITY OF SANTA MARIA MUNICIPAL CODE WHEREAS, State law authorizes cities to act by ordinance to provide for the creation and regulation of accessory dwelling units (ADUs) and junior accessory dwelling units (JADUs); and
WHEREAS, in recent years, the California legislature has approved, and the Governor has signed into law, numerous bills revising the State law as it relates to ADUs (Government Code Section 66314 et seq.) and JADUs (Government Code Section 66333 et seq.); and
WHEREAS, during the 2025 legislative session, the legislature passed and the Governor signed four new bills further amending the State ADU/JADU laws, namely AB 462, AB 1154, SB 9 and SB 543; and
WHEREAS, the City desires to amend its local regulatory scheme for the processing and construction of ADUs and JADUs in order to comply with current California law; and
WHEREAS, on July 1, 2026, the Planning Commission conducted a noticed public hearing and voted to recommend that the City Council adopt the ADU/JADU ordinance; and
WHEREAS, on August 4, 2026, the City Council conducted a noticed public hearing.

NOW, THEREFORE, IT IS HEREBY ORDAINED by the City Council of the City of Santa Maria, State of California, as follows:

SECTION 1. Title 12, Chapter 12-56 of the Santa Maria Municipal Code is hereby amended in its entirety to read as follows:
///
///
///

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"CHAPTER 12-56 ACCESSORY DWELLING UNITS
Section 12-56.01. Purpose.

The purpose of this Chapter is to allow and regulate Accessory Dwelling Units (ADUs) and Junior Accessory Dwelling Units (JADUs) in compliance with California Government Code Sections 66314 et seq. and 66333 et seq. The intent is to encourage the orderly development of ADUs and JADUs that contribute needed housing.

Section 12-56.02. Effect of Conforming.

An ADU or JADU that conforms to the standards in this section will not be:
(1) Deemed to be inconsistent with the City's General Plan land use designation and zone district for the lot on which the ADU or JADU is located. (2) Deemed to exceed the allowable dwelling unit density for the lot on which the ADU or JADU is located.
(3) Considered in the application of any City ordinance, policy, or program to limit residential growth.
(4) Required to correct a Nonconforming Zoning Condition, as defined below. This does not prevent the City from enforcing compliance with applicable building standards in accordance with Health and Safety Code Section 17980.12.

Section 12-56.03. Definitions.

Accessory Dwelling Unit (ADU). An attached or detached residential dwelling unit that provides complete independent living facilities for one or more persons and is located on a lot with a proposed or existing primary residence. It includes permanent provisions for living, sleeping, eating, cooking, and sanitation on the same lot as the single-family or multi -family dwelling is or will be situated. An Accessory Dwelling Unit also includes the following:
(1) An efficiency unit, as defined by Section 17958.1 of the California Health and Safety Code; and
(2) A manufactured home, as defined by Section 18007 of the California Health and Safety Code.

Accessory Structure. A structure that is accessory and incidental to a dwelling located on the same lot.

Efficiency Kitchen. A kitchen that includes a cooking facility with appliances and a food preparation counter and storage cabinets that are of a reasonable size in relation to the size of the JADU.

Page 2 of 14 ends

Existing Structure. For the purposes of defining an allowable space that can be converted to an accessory dwelling unit, within the proposed space of an existing structure means within the four walls and roofline of any existing structure that can be made safely habitable under local building codes at the determination of the building official regardless of any non-compliance with zoning standards.

Junior Accessory Dwelling Unit (JADU). A residential unit that:
(1) Is no more than 500:square=feet in size of interior livable space; (2) Is contained entirely within a single-family residence or attached garage; (3) Includes its own separate sanitation facilities or shares sanitation facilities with the existing or proposed single-family dwelling. If the unit does not include its own separate bathroom, then it contains an interior entrance to the main living area of the existing or proposed single-family dwelling in addition to an exterior entrance that is separate from the main entrance to the primary dwelling; and (4) Includes an efficiency kitchen as defined herein.

Living Area. The interior habitable area of a dwelling unit, including basements and attics, but does not include a garage or any accessory structure.

Livable Space. A space in a dwelling intended for human habitation, including living, sleeping, eating, cooking, or sanitation.

Multi -Family Dwelling. Any structure designed for human habitation that has been divided into two or more legally created independent living quarters.

Nonconforming Zoning Condition. A physical improvement on a property that does not conform with current zoning standards.

Passageway. A pathway that is unobstructed clear to the sky and extends from a street to one entrance of the accessory dwelling unit.

Public Transit. A location, including, but not limited to, a bus stop or train station, where the public may access buses, trains, subways, and other forms of transportation that charge set fares, run on fixed routes, and are available to the public.

Section 12-56.04. Approval Requirements.
(1) Approval of ADUs and JADUs in conformance with Government Code Section 66323. The Community Development Director shall ministerially approve an application for an ADU or JADU that complies with each of the general requirements in Section 12-56.04(4a through d) with a building permit for any of the following units, or any combination of the following units:

Page 3 of 14 ends

(a) Converted on a single-family dwelling lot.
(i) One ADU on a lot with a proposed or existing single-family dwelling on it, where the ADU:

1. Is either:
a. Within the space of a proposed single-family dwelling; or
b. Within the space of an existing single-family dwelling; or
c. Within the existing space of an accessory structure, plus up to 150 additional square feet if the expansion
is limited to accommodating ingress and egress; and

2. Has exterior access that is independent of that for the proposed or existing single-family dwelling; and

3. Has side and rear setbacks sufficient for fire and safety, as dictated by applicable building and fire codes.
(ii) One JADU within the space of an existing or proposed single-family dwelling or attached garage in compliance with the requirements of Government Code Section 66333.

1. When a garage is converted to a JADU, onsite replacement pa -King sha be provided in con-ormance wi-h Chapter '2 32.

Covered parKing is no- required.
(b) Limited detached on a single-family dwelling lot. One detached, new construction ADU on a lot with a proposed or existing single-family dwelling (in addition to any JADU that might otherwise be established on the lot under Section 12-56.04(1)(a)(ii) above), if the detached ADU satisfies the following limitations:
(i) The side and rear setbacks are at least four feet.
(ii) The floor area is a maximum of 800 -square -feet of livable space. (iii) The height does not exceed the applicable height limit in subsection 12-56.05(1)(b), below.
(c) Converted on multi -family dwelling lot.
(i)
Multiple ADUs within portions of existing multi -family dwelling structures that are not used as livable space, including, but not limited to, storage rooms, boiler rooms, passageways, attics, basements, or garages, if each converted ADU complies with state building standards for dwellings.

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(ii) At least one converted ADU is allowed within an existing multi -family dwelling, and up to 25 percent of the existing multi -family dwelling units may each have a converted ADU under this subsection. (d) Limited detached on multi -family dwelling lot. On a lot with an existing multi -family dwelling, not more than eight detached ADUs. However, in this instance the number of ADUs allowable shall not exceed the number of existing units on the lot. On a lot with a proposed multi -family dwelling, not more than two detached ADUs. In both instances, each detached ADU shall meet the following requirements:
(i) The side and rear yard setbacks are at least four feet. If the existing multi -family dwelling has a rear or side yard setback of less than four feet, the City will not require any modification to the existing multi- family dwelling as a condition of approving the ADU.
(ii) The height does not exceed the applicable height limit in subsection 12-56.05(1)(ab), below.
(2) Approval of ADUs not in conformance with Government Code Section 66323.

Except as allowed under subsection 12-56.04(1) above, one attached or one detached ADU shall be allowed for each lot with a single-family dwelling or in connection with a proposed single-family dwelling for a vacant lot. No ADU may be constructed or legalized without obtaining a building permit in compliance with the development standards contained in Section 12-56.05, below.

Section 12-56.05. Development Standards for ADUs and JADUs. (1) The following requirements apply to all ADUs and JADUs that are approved under Sections 12-56.04(1) and (2), above:
(a) Zoning. ADUs may be permitted on lots in a residential or mixed -use zoning district with an existing legal single-family or multi -family dwelling, or in connection with a proposed single-family or multi -family dwelling for a vacant lot. JADUs are only permitted on lots that are zoned for single-family residential (R-1 & RSL-1) with an existing or proposed single-family dwelling.
(b) Height.
(i) A detached ADU created on a lot with an existing or proposed single- family dwelling unit may not exceed 18 -feet in height. The ADU may be up to two additional feet in height (for a maximum of 20 feet) if necessary to accommodate a roof pitch on the ADU that is aligned with the roof pitch of the primary dwelling unit. A detached ADU created on a single-family lot that also contains a permitted JADU may not exceed 16 -feet in height.

Page 5 of 14 ends

(ii) A detached ADU created on a lot that has an existing or proposed multi -family dwelling unit may not exceed 16 -feet in height. The height limit may be increased to 18 -feet in height if the existing or proposed multi -family dwelling unit has more than one story above grade or is located within one-half mile walking distance of a major transit stop or a high quality transit corridor, as those terms are defined in Section 21155 of the Public Resources Code. The ADU may be up to two additional feet in height (for a maximum of 20 feet) if necessary to accommodate a roof pitch on the ADU that is aligned with the roof pitch of the primary dwelling unit.
(iii) An ADU that is attached to the primary dwelling may not exceed 25 - feet in height or the height limitation imposed by the underlying zone district that applies to the primary dwelling, whichever is lower.

Notwithstanding the foregoing, ADUs subject to this subsection may not exceed two stories.
(iv) For purposes of this section, height is the vertical distance between the existing legal grade and the uppermost point of the roof of the structure directly above that legal grade.
(c) Minimum Size. The minimum floor area of an ADU is 150 -square -feet for a standard unit. An "efficiency unit" ADU, in accordance with California Health and Safety Code Section 17958.1, may be a minimum of 150 -square -feet. (d) Owner Occupancy. For all JADUs that have shared sanitation facilities with the existing structure, either the primary dwelling unit or the newly created JADU shall be owner -occupied as a primary dwelling unit and permanent residence by the property owner(s). Owner -occupancy shall not be required if the owner is another government agency, land trust, or housing organization.
(i)
If the Zoning Administrator determines that neither of the units is occupied by the property owner, the approval of the JADU shall terminate immediately and the unit shall not be rented, leased, or occupied as a separate dwelling.
(ii) For the purposes of this Chapter, the property owner is the majority owner of the property as shown in the most recent Santa Barbara County assessor's roll. If there is more than one property owner on record, the owner with the majority interest in the property shall be deemed the property owner. Any property owner of record holding an equal share interest in the property may be deemed the majority property owner.

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(iii) Covenant Agreement. A covenant agreement is required prior to the issuance of a building permit. The covenant agreement shall state that:

1. The JADU shall not be sold separately.-i

2. The JADU is restricted to the approved size;

3. If the JADU has shared sanitation facilities with the existing structure, Tthe property owner is required to reside in the primary dwelling unit or the JADU;

4. The use of the JADU shall be in effect only so long as the property is in compliance with the provisions of this Chapter;

5. The above declarations are binding upon any successor in ownership of the property, lack of compliance shall be cause for code enforcement;

6. The covenant agreement shall terminate upon removal of the JADU; and

7. The covenant agreement shall be recorded with the County Recorder of the County of Santa Barbara at the expense of the property owner.
(e) No separate conveyance. Except as provided in Government Code Section 66340 et seq., no ADU or JADU may be sold or otherwise conveyed separately from the lot and the primary dwelling (in the case of a single- family dwelling lot) or from the lot and all of the dwellings (in the case of a multi -family dwelling lot). All restrictive covenants, and other contractual agreements with the City apply to the property. No JADU may be sold or otherwise conveyed separately from the single family residence. (f) Rental of Unit. Rental of the ADU or JADU shall be for a term longer than 30 days.is allowed for not less than 30 days
(g) Building Codes. Local building code requirements apply to ADUs and JADUs, as appropriate.
(h) Passageway. No passageway shall be required in conjunction with the construction of an ADU.
(i) Fire Sprinklers. Fire sprinklers are required in an ADU or JADU if sprinklers are required in the primary residence. The construction of an ADU or JADU does not trigger a requirement for fire sprinklers to be installed in the primary dwelling.

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(j) Utility Meters. ADUs and JADUs shall not be considered new residential uses for the purpose of calculating utility connection fees or capacity charges, including water and sewer service. ADUs and JADUs contained within an existing residence or an existing accessory structure are not required to install new or separate utility connections or pay a related connection fee or capacity charge. For new attached and detached ADUs, the connection fee and/or capacity charge must be proportionate to the burden of the unit on the water or sewer system based on either its square feet or the number of its drainage fixture unit (DFU) values, as defined by the Plumbing Code.
(k) Development Impact Fees.
(i)
No development impact fees are required for an ADU that has 750 - square -feet of interior livable space or less or a JADU. is ess han 750 square feet in floor area. For purposes of this subsection, "impact fee" means a "fee" under the Mitigation Fee Act (Government Code Section 66000(b)) and a fee under the Quimby Act
(Government Code Section 66477). "Impact fee" here does not include any connection fee or capacity charge for water or sewer service.
(ii) Any development impact fee that is required for an ADU that has more than is 750 -square -feet of interior livable space shallor argot. in - oor area mus- be charged proportionately in relation to the square footage of the primary dwelling unit. "Development impact fee" here does not include any connection fee or capacity charge for water or sewer service. The amount of the required fee shall be determined by adopted fee Resolutions and ordinances and applicable law in effect when paid.
(2) The following requirements apply to all ADUs and JADUs that are approved under Section 12-56.04(2), above:
(a) Maximum Size.
(i) The maximum size of an ADU is as follows:

1. 850:square feet of interior livable space for a studio or one - bedroom ADU.

2. 1,000:square_feet of interior livable space for an ADU with two or more bedrooms.

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(ii) An attached ADU that is created on a lot with an existing or proposed primary dwelling is further limited to 50 percent of the floor area of the existing or proposed primary dwelling. (iii) Application of other development standards in this Section, such as lot coverage (as applicable), might further limit the size of the ADU, but no application of the percent -based size limit above or of a front setback, lot coverage limit, or open space requirement (as applicable) may require the ADU to be less than 800:square:feet of interior livable space.
(b) Lot Coverage. No ADU may exceed 10 percent of the total lot area of the subject lot, subject to subsection 2(a)(iii) above.
(c) Setbacks. ADUs subject to this subsection must observe the following setback requirements:
(i) Side setback: Four feet
(ii) Rear setback: Four feet
(iii)Front Setback: The ADU shall be constructed in accordance with the setback of the underlying zone district, subject to Section 2(a)(iii) above. (iv)No setback is required for an ADU subject to this subsection if the ADU is constructed in the same location and to the same dimensions as an existing structure.
(d) Building Separation. The minimum separation between the primary dwelling unit and a detached ADU must be at least five feet for new construction. (e) Parking.
(i) Parking for ADUs shall be provided at a rate of one parking space per ADU or per bedroom, whichever is less. These spaces shall be provided in conformance with Section 12-32.12, except that tandem parking is allowed for ADUs as stated in Government Code section 66314 unless specific findings are made that parking in setback areas or tandem parking is not feasible based upon the specific site or regional topographical or fire and life safety conditions.
(ii) Parking requirements for an ADU are in addition to the required parking for the primary dwelling unit.
(iii) Parking is not required in any of the following instances:

1. The ADU is located within 1/2 mile walking distance of public transit.

Page 9 of 14 ends

2. The ADU is located within an architecturally and historically significant district;

3. The ADU is part of the proposed or existing primary residence or an accessory structure;

4. When on -street parking permits are required but not offered to the occupant of the ADU;

5. When a car share vehicle is located within one block of the ADU.

Objective Design Standards.
(i) The materials and colors of the exterior walls, roof, windows, and doors must match the appearance of those of the primary dwelling. Samples of existing and proposed colors, materials, roofing, and features must be provided as part of a complete ADU application.
(ii) The roof pitch must match that of the dominant roof pitch of the primary dwelling. The dominant roof pitch is the pitch shared by the largest portion of the roof. Roof pitch and roof materials for a newly constructed ADU may be different from that of the primary dwelling on the lot only if accommodating installation of solar energy systems at the same time as construction of the ADU.
(iii)Windows and doors of the ADU may not have a direct line of sight to an adjoining residential property. Fencing, landscaping, or privacy glass may be used to provide screening and prevent a direct line of sight.

Samples of proposed vegetative screening and planting locations must be provided as part of a complete ADU application. Exceptions to this design standard apply only to conversion of legally permitted structures that do not include installation of new exterior windows facing an adjacent property line or when only clerestory windows are used and do not provide views into neighboring lots.
(iv)Two-story detached ADUs shall limit the major access to stairs, decks, entry doors, and windows to the interior of the lot or an alley and comply with all development standards. Only one (1) curb cut shall be permitted per parcel and no additional driveways or access points shall be created to accommodate the ADU or main dwelling unit.
(v) Exterior lighting shall be directed downward, fully shielded, and full cutoff or as otherwise required by the building or fire code.
(vi)Private Open Space. The main dwelling unit and the additional dwelling unit shall each be provided with a minimum of fifteen (15) feet by fifteen (15) feet of usable private open yard area, subject to subsection 2(a)(iii) above.

Page 10 of 14 ends

(g) Historical Protections. An ADU that is on real property that is listed in the California Register of Historic Resources may not alter the exterior of any structure that is designated as a historic resource or, if the entire lot is designated as a historic resource, it may not alter the exterior of any structure on the lot.

Section 12-56.06. Permit process and timing.
(1) ADUs and JADUs shall be permitted ministerially, without discretionary review or a hearing. The Community Development Director shall issue a building permit to establish an ADU and/or JADU in compliance with this Chapter if all applicable requirements in this Chapter are met, as appropriate.
(2) The City shall determine whether an application for an ADU or JADU is complete and provide written notice to the applicant not later than 15 business days after the City receives the application. If the City determines an application is incomplete, the City shall provide the applicant with a list of incomplete items and a description of how the application can be made complete.
(3) The City shall either approve or deny the application for an ADU or JADU within 60 days from the date the City receives a completed application, unless either:
(a) The applicant requests a delay, in which case the 60 -day time period is tolled for the period of the requested delay; or
(b) If the permit application to create an ADU or JADU is submitted with a permit application to create a new single-family or multifamily dwelling on the lot, the City may delay approving or denying the permi application for the ADU or JADU until the City approves or denies the permit application to create the new single-family or multifamily dwelling, but the application to create the ADU or JADU shall be considered without discretionary review or hearing. However, if the conditions set forth in Government Code Section 66328 related to a state of emergency are met, a certificate of occupancy may be issued for an ADU before the certificate of occupancy is issued for the primary dwelling.
(4) If an application for an ADU or JADU is determined to be incomplete under subdivision (2) above, or denied under subdivision (3) above, the applicant may appeal the decision to the Planning Commission by submitting a written appeal filed with the Community Development Director within 14 calendar days following the written determination by the Community Development Director. The Planning Commission shall provide a final written determination not later than 60 business days after receipt of the applicant's written appeal.
(5) The City must approve or deny an application to create an ADU or JADU within 60 -days from the date that the City receives a completed application. If the City has no approved or denied -he comp eed app ication within 60 days, the app ica-ion is deemed approved un ess either:

Page 11 of 14 ends

a. The applicant requests a delay, in which case the 60 day time period is o ed -or the period o- -he reques-ed de ay; or
b. f -he permi: app ica-ion to crea -e an ADU or JADU is submi ed wi h a permi application to create a new single-family dwelling on the lot, the City may delay acting on the permit application for the ADU or JADU until the City acts on the permit application to create the new single family dwelling, but the application to create the ADU or JADU shall be considered without discreionary review or hearing. Fina bui ding permi- inspcc ion -or -ho singe -am' y dwe ing sha be approved prior to fina bui ding permi inspec ion approva -or he ADU or JADU.
{6) - 'he Ciy denies an app ica ion o crea e an ADU or JADU, he Ci y mus provide the app icant wi-h comments -hat inc ude a ist o- a -he de-ec ive or dc-icicnt i-CMG and a description of how the application may be remedied by the applicant. Notice of the denial and corresponding comments must be provided to the applicant within he 60 day -ime period es ab ished by subsection (2) above.

Section 12-56.07. Nonconforming Zoning Code Conditions, Building Code Violations, and Unpermitted Structures.
(1) The City will not deny an ADU or JADU application due to a nonconforming zoning condition, building code violation, or unpermitted structure on the lot that does not present a threat to the public health and safety and that is not affected by the construction of the ADU or JADU.
(2) As required by State law, the City may not deny a permit to legalize an existing but unpermitted ADU or JADU that was constructed before January 1, 2020, if denial is based on either of the following grounds:
(a) The ADU or JADU violates building standards pursuant to Article 1 (commencing with Section 17960) of Chapter 5 of Part 1.5 of Division 13 of the Health and Safety Code, or
(b) The ADU or JADU does not comply with the State ADU or JADU law (Government Code Section 66314 et seq., 66333 et seq.) or this Chapter. (c) Exceptions:
(i)
Notwithstanding subsection 2 above, the City may deny a permit to legalize an existing but unpermitted ADU that was constructed before January 1, 2020, if the City makes a finding that correcting a violation is necessary to comply with the standards specified in Section 17920.3 of the Health and Safety Code.
(ii) Subsection 2 above does not apply to a building that is deemed to be substandard in accordance with California Health and Safety Code Section 17920.3."

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Section 12-56.08. ADUs and JADUs prohibited on parcels created under the Starter Home Revitalization Act.

As provided for by State of California Government Code Section 66499.41(g), the City of Santa Maria chooses not to permit an ADU or a JADU on parcels created through the exercise of the authority contained within Government Code Section 66499.41, known as the Starter Home Revitalization Act of 2021.

SECTION 2. Under California Public Resources Code Section 21080.17, the California Environmental Quality Act (CEQA) does not apply to the adoption of an ordinance by a city or county implementing the provisions of Article 2 (commencing with Section 66314) or Article 3 (commencing with Section 66333) of Chapter 13 of Division 1 of Title 7 of the Government Code, which sets forth California's ADU and JADU law. Therefore, the Ordinance is statutorily exempt from CEQA.

SECTION 3. If any part or provision of this chapter, or the application thereof to any person or circumstance, is held invalid, the remainder of the chapter, including the application of that part or provision to other persons or circumstances, shall not be affected thereby and shall continue in full force and effect. To this end, the provisions of this ordinance are severable.

SECTION 4. The Chief Deputy City Clerk is hereby authorized to make minor changes herein to address clerical errors, so long as substantial conformance of the intent of this document is maintained. In doing so, the Chief Deputy City Clerk shall consult with the City Manager and City Attorney concerning any changes deemed necessary.

SECTION 5. This Ordinance shall be in full force and effect thirty days after its passage.

Within fifteen days following its passage, the City Clerk shall cause this Ordinance to be published in a newspaper of general circulation in accordance with State Law; or when deemed necessary due to the length or complexity of the Ordinance, cause a summary of the Ordinance to be prepared and published at least five days prior to the City Council meeting at which the proposed Ordinance is to be adopted. If a summary is published at least five days prior to the City Council meeting at which the proposed Ordinance is to be adopted, then within fifteen days after adoption of the Ordinance the City Clerk shall publish a summary of the Ordinance with the names of those City Council Members voting for and against the Ordinance and shall post a certified copy of the full text of such adopted Ordinance along with the names of those City Council Members voting for and against the Ordinance.

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INTRODUCED at a regular meeting of the City Council held on the 4th day of August, 2026, and PASSED AND ADOPTED at a regular meeting held on the day of , 2026, by the following roll call vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

Mayor
ATTEST:

Chief Deputy City Clerk
APPROVED AS TO FORM:

City Attorney
APPROVED AS TO CONTENT:

Department Director
City Manager

Page 14 of 14 ends

COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: David W. Rowlands, City Manager
DATE: August 4, 2026
SUBJECT: Introduction of an Ordinance Amending the Santa Maria Municipal Code Increasing City Council Salaries
Description:

The City Council will consider introducing an Ordinance to increase City Council salaries.

RECOMMENDATION:

1. Waive first reading and introduce an Ordinance amending Section 2-2.02 (Salaries Designated) of Chapter 2-2 of the Santa Maria Municipal Code increasing City Council salaries by $341.31 per month; and

2. Set said ordinance for adoption at the next regular City Council meeting to take effect December 2026.

BACKGROUND:

City Council salaries have been increased only five times in the last four decades. The Council received a salary of $500 per month between 1986 and 2001. However, for a four-year period beginning in 1993 and running through 1996, the Council voluntarily reduced its salary by four percent during tight budget times. The City Council received $800 per month between 2001 and 2005. The Council salaries increased in 2005 to $920 per month, in 2008 to $1,050 per month, in 2016 to $1,313 per month and on March 15, 2022, are currently set at $1,706.90.

DISCUSSION:

Since the City of Santa Maria is a Charter City and the setting of Councilmembers' salaries are defined as a municipal affair, City Council has the authority to increase their salaries by either Charter authority or the Government Code. The salary of Councilmembers of general law cities is controlled by Government Code Section 36516(a), which permits a City Council to establish by ordinance a salary level up to a ceiling determined by the city's population. The electorate may approve a higher salary. (Government Code § 36516(b)). A directly elected Mayor may receive additional compensation with the consent of the electorate or by ordinance of the City Council.

(Government Code § 36516.1). Government Code Section 36516(c) allows the compensation of Councilmembers to be increased by five percent for each calendar year from the operative date of the last adjustment of the salary. Chapter 2-2 of the Municipal Code deals with City Council salaries.

A comparison of salary levels for nearby cities is provided below. Santa Maria is the most populous city, yet Councilmember salaries are the third lowest of the four agencies. Santa Barbara is approximately 22 percent smaller in population and their salaries are approximately 209 percent higher than Santa Maria's.

City Mayor Salary Proposed Council Salary Proposed Population Santa Maria $1,956.90 $2,298 $1,706.90 $2,048 110,608
Lompoc $1,400.00 $1,200.00 44,444
San Luis Obispo $2,923.00 $2,319.00 47,086
Santa Barbara $6,609.00 $5,281.00 86,552
It is the opinion of the City Attorney that "compounding" the salary each year from the last adjustment is not appropriate because it states the increase is five percent "each" year. If it said five percent "per" year, it could be compounded.

It has been four calendar years since the Council's last salary increase. Therefore, an increase of $341.31 per month to a maximum salary of $2,048.28 per month per Councilmember would be lawful ($1,706.90 x 5 percent x 4 years= $341.31; $1,706.90 current salary + $341.31 increase = $2,048.28). Mayor would be entitled to an additional $250 to the $2,048.28 = $2,298.28.

According to Government Code Section 36516.5, any (Council) salary increase may take effect only when at least one member of the Council commences a new term. And while Santa Maria is a Charter City and the State Attorney General has stated that Charter Cities are exempt from the aforementioned Government Code section, because of a recent court case (Green Valley Landowners Assn. v. City of Vallejo [2015] 241 Cal. App.4th 425, 436), the City Attorney recommends that any City Council salary increase not take effect until a Councilmember commences a new term which will be this December 2026.

Therefore, the authorizing ordinance shall make December 2026 the effective date.

Alternatives)
If the recommended action is not approved, the City Council could not take any action on adjusting its salary or it could approve a different amount. 2 Fiscal Considerations
Should Council decide to increase City Councilmembers and the Mayor's salaries, the annual increased costs to the budget would amount to $19,382.88 per fiscal year.

Impact on the Community
Increasing the Council's salaries to the maximum amount provided by law is still well below the value that the community receives from the benefit of having five dedicated individuals giving significant time in service to the community.

ATTACHMENT(S)
A. Ordinance
3 Attachment A
ORDINANCE NO.

AN ORDINANCE OF THE CITY COUNCIL

OF THE CITY OF SANTA MARIA, CALIFORNIA,
AMENDING SECTION 2-2.02 (SALARIES DESIGNATED)
OF CHAPTER 2-2 OF THE SANTA MARIA MUNICIPAL CODE
INCREASING CITY COUNCIL SALARIES BY $341.31 PER MONTH
WHEREAS, the salaries of Councilmembers were last adjusted in 2022 to $1,706.90 per month for each Councilmember and an additional $250 per month for the Mayor; and
WHEREAS, the California Government Code provides for increases to Council salaries; and
WHEREAS, the City Council has not had an increase in compensation for the past four years, and only six times in the past four decades; and WHEREAS, based on California Government Code provisions, the City Council is eligible for a salary increase to $2,048.28 per month; and WHEREAS, Government Code Section 36516.5 does not apply to a charter city, however, the City Council voluntarily chooses to comply with its provisions, and therefore, the salary increases provided herein will not become effective until the start of the next term of office of any Councilmember.

NOW, THEREFORE, IT IS HEREBY ORDAINED by the City Council of the City of Santa Maria, State of California, as follows:

SECTION 1. Section 2-2.02 of Chapter 2-2 of Title 2 is hereby amended to read as follows:

Section 2-2.02. Salaries designated.

Each member of the Council and the Mayor shall receive, exclusive of any money paid as reimbursement for actual and necessary expenses incurred in the performance of official City duties, as salary, the sum of two thousand forty-eight dollars and twenty-eight cents ($2,048.28) per month. The increased salaries shall become payable on December 31, 2026.

SECTION 2. After its passage and adoption, this Ordinance shall not commence until the start of the next term of office of any Councilmember, which will be December 2026.

Page 1 of 3 ends

Attachment A
SECTION 3. If any part or provision of this Chapter, or the application thereof to any person or circumstance, is held invalid, the remainder of the Chapter, including the application of that part of provision to other persons or circumstances, shall not be affected thereby and shall continue in full force and effect. To this end, the provisions of this Ordinance are severable.

SECTION 5. This Ordinance shall be in full force and effect thirty (30) days after its passage. Within fifteen days following its passage, the City Clerk shall cause this Ordinance to be published in a newspaper of general circulation in accordance with State Law; or when deemed necessary due to the length or complexity of the Ordinance, cause a summary of the Ordinance to be prepared and published at least five days prior to the City Council meeting at which the proposed Ordinance is to be adopted. If a summary is published at least five days prior to the City Council meeting at which the proposed Ordinance is to be adopted, then within 15 days after adoption of the Ordinance the City Clerk shall publish a summary of the Ordinance with the names of those City Council Members voting for and against the Ordinance and shall post a certified copy of the full text of such adopted Ordinance along with the names of those City Council Members voting for and against the Ordinance.

Page 2 of 3 ends

Attachment A
INTRODUCED at a regular meeting of the City Council held on the 4th day of August 2026, and PASSED AND ADOPTED at a regular meeting held on the day of 20_, by the following roll call vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

Mayor
ATTEST:

Chief Deputy City Clerk
APPROVED AS TO FORM:

City Attorney
APPROVED AS TO CONTENT:

Department Director
City Manager

Page 3 of 3 ends

COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Chenin Dow, Director of Community Development
DATE: August 4, 2026
SUBJECT: Adoption of a Resolution Designating an Elected Official as the Continuum of Care Board Representative
Description:

The City Council will designate an elected official to serve as the City's representative on the Santa Maria/Santa Barbara County Continuum of Care (CoC) Board and authorize the City Manager, or designee, to submit the required CoC Board City Elected Officials Form to the County of Santa Barbara.

Environmental Notice: This activity is not a "Project" as defined by Section 15378 of the California Environmental Quality Act (CEQA) Guidelines. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, no environmental review is required.

RECOMMENDATION:

1. Adopt a Resolution designating an elected official as the City's representative on the Santa Maria/Santa Barbara County Continuum of Care (CoC) Board; and

2. Designate a staff member to serve as an alternate representative in the event that the designated elected official is unavailable for a given meeting; and

3. Authorize the City Manager, or designee, to execute and submit the required documents.

BACKGROUND:

The Santa Maria/Santa Barbara County Continuum of Care (CoC) Board is the regional body responsible for coordinating policies, strategies, and programs to prevent and end homelessness throughout Santa Barbara County. Its responsibilities include overseeing federal and state homelessness funding, the County's Coordinated Entry System (CES), and the annual Point -in -Time (PIT) Count. The Board generally meets via Zoom every other month (usually on a Thursday afternoon), with occasional special meetings.

Historically, the City of Santa Maria has been represented on the CoC Board by Community Programs Division staff.

On March 12, 2026, the CoC Board amended its Governance Charter to require each participating city to be represented by an elected official. The Charter also allows the elected official to designate a delegate, a City staff member, to participate in CoC Board meetings and activities on their behalf during the official's two-year term.

These changes are intended to align the CoC's governance structure with federal funding requirements and strengthen the region's competitiveness for homelessness funding.

As the CoC Lead Agency, the County of Santa Barbara has requested each participating city to submit a CoC Board City Elected Officials Form identifying the City's elected representative and, if applicable, their designated City staff delegate.

DISCUSSION:

To comply with the updated Governance Charter, the City Council is requested to designate an elected official as the City's CoC Board representative. The designated official may appoint a delegate to participate in Board meetings and activities on their behalf. Submitting the required form will establish the City's official representation. The Council may update its representative or delegate at any time by submitting a revised form.

Alternative(s)
If the City Council does not designate an elected official, the City Manager, or designee, may appoint a City staff member to participate in CoC Board activities, with the understanding that this does not technically satisfy the Governance Charter's requirement for an elected official to serve as the City's representative.

Fiscal Considerations
There is no direct fiscal impact associated with this action.

Impact on the Community
Participation by an elected official supports the City's continued involvement in regional homelessness planning and may enhance the region's competitiveness for federal homelessness funding.

ATTACHMENT(S)
A. CoC Board Representation Resolution
B. Santa Maria/Santa Barbara County Continuum of Care Board Form C. Summary of Governance Charter Amendments
2 Attachment A
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF SANTA MARIA, CALIFORNIA,

DESIGNATING AN ELECTED OFFICIAL AS THE

CITY'S REPRESENTATIVE ON THE SANTA MARIA/

SANTA BARBARA COUNTY CONTINUUM OF CARE BOARD
WHEREAS, the Santa Maria/Santa Barbara County Continuum of Care ("CoC") Board is the regional body responsible for coordinating policies, strategies, and programs to prevent and end homelessness throughout Santa Barbara County; and WHEREAS, the CoC Board's responsibilities include overseeing federal and state homelessness funding, the County's Coordinated Entry System, and the annual Point -in - Time Count; and
WHEREAS, the CoC Board generally meets via Zoom every other month, with occasional special meetings, and the City of Santa Maria has historically been represented on the CoC Board by City staff; and
WHEREAS, on March 12, 2026, the CoC Board amended its Governance Charter to require that each participating city be represented on the CoC Board by an elected official; and
WHEREAS, the amended Governance Charter allows the designated elected official to appoint a delegate, who shall be a City staff member, to participate in CoC Board meetings and activities on their behalf during the official's two-year term; and WHEREAS, these changes are intended to align the CoC's governance structure with federal funding requirements and to strengthen the region's competitiveness for homelessness funding; and
WHEREAS, the County of Santa Barbara, as the CoC Lead Agency, has requested that each participating city submit a CoC Board City Elected Officials Form identifying the City's elected representative and designated City staff delegate; and WHEREAS, the City Council desires to designate an elected official to serve as the City's representative on the CoC Board and to designate a City staff member to serve as an alternate representative in the event the designated elected official is unavailable for a given meeting.

NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the City of Santa Maria, California, as follows:

SECTION 1. is hereby designated as the City of Santa
Maria's elected official representative on the Santa Maria/Santa Barbara County Continuum of Care Board for a two-year term.

Page 1 of 2 ends

Attachment A
SECTION 2. is hereby designated as the alternate
representative, and shall serve as the City's staff delegate to participate in CoC Board meetings and activities in the event the designated elected official is unavailable.

SECTION 3. The City Manager, or designee, is hereby authorized to execute and submit the CoC Board City Elected Officials Form, and any other documents necessary, on behalf of the City of Santa Maria; and
SECTION 4. The City Council may update the City's designated representative or alternate at any time by submitting a revised CoC Board City Elected Officials Form; and SECTION 5. The Chief Deputy City Clerk is hereby authorized to make minor changes herein to address clerical errors, so long as substantial conformance with the intent of this document is maintained. In doing so, the Chief Deputy City Clerk shall consult with the City Manager and City Attorney concerning any changes deemed necessary.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Santa Maria held this 4th day of August 2026.

Mayor
ATTEST:

APPROVED AS TO FORM:

Chief Deputy City Clerk City Attorney
APPROVED AS TO CONTENT:

Department Director
City Manager

Page 2 of 2 ends

Attachment B
CA -603 Santa Maria / Santa Barbara County Continuum of Care ("CoC") CoC Board City Elected Officials Form
Per CoC Board Action on 3/12/2026, certain CoC Board member seat titles and their definitions as stated in Governance Charter Article IV.F.2.b. CoC Board Selection now call for "An Elected Official of..." each represented city jurisdiction within the region's geographic boundaries.

Board action also updated the CoC Board Seat Definitions (PDF page 3) to allow the public office holder representing each city to delegate their CoC Board representative.

Completing and filing of this form with the CoC Lead Agency — County of Santa Barbara, Community Services Department, Housing and Community Development Division, CoC Unit of Homelessness Assistance Programs, per below — affirms CoC Board representation as stipulated and may be changed at any time as indicated.

CoC Board - City Elected Officials Form
An Elected Representative of the City of
Elected City Office Holder, Full Name and Office:

Elected Official Contact Detail, Email and Phone:

Current Term End Date:

Delegate, if applicable - Full Name and Position:

Delegate Contact Detail, Email and Phone:

Elected Office Holders: To complete the process your name as it appears on this form (and your Delegate's, if applicable) will be submitted as a "Nominee" for your city's CoC Board Seat, and appear on the next CoC Board Election Ballot (currently scheduled for August, 2026).

To file this form, email the completed PDF to [email protected] and include as CC: all applicable parties.

For example, if a Delegate is named and submits the form, the elected office holder must be included in the form filing email.

Questions should be directed to Matthew Rector, CoC Coordinator and Homeless Assistance Programs Specialist, Sr., at [email protected].

Page 1 of 1 ends

Attachment C
CoC Board Updates to Governance Charter, March and June 2026 Adopted by CoC Board Action on 3/12/2026
Update certain CoC Board membership seat titles and definitions, Article IV.F.2.b. CoC Board Selection to call for "An Elected Official of..." each represented jurisdiction; and to update the CoC Board Seat Definitions (PDF page 3) to allow delegates of those elected officials to be seated.

Updates to the CoC Charter and Seat Definitions from Governance Committee discussion and recommendation on 2/12/2026.

From CoC Governance Charter. Edits in red:

CoC Board Selection
[...] b. [...] The stakeholders that are currently included on the Board are:
o Elected Representative of the City of Goleta
o Elected Representative of the City of Lompoc
o Elected Representative of the City of Santa Maria
o Elected Representative of the City of Santa Barbara
From CoC Seat Definitions. Edits in red:

Seat Definition
Elected Representative of the City of Goleta
An elected City of Goleta public office holder
or their delegate.

Elected Representative of the City of Lompoc
An elected City of Lompoc public office holder
or their delegate.

Elected Representative of the City of Santa Maria
An elected City of Santa Maria public office holder
or their delegate.

Elected Representative of the City of Santa Barbara
An elected City of Santa Barbara public office holder
or their delegate.
1 CoC Board Updates to Governance Charter, March and June 2026 Adopted by CoC Board Action on 6/18/2026
Update certain CoC Board membership seat titles and definitions, Article IV.F.2.b. CoC Board Selection to:
a) Create an additional seat, "Recovery Housing / Sober Living Representative", to be filled in the upcoming CoC Board Elections in August, 2026;
b) Re -define the Public Safety seat as the "Local Law Enforcement" seat (effective immediately); and
c) Update the published CoC Board Seat Definitions accordingly.

From CoC Governance Charter. Edits in red:

CoC Board Selection
[...] b. [...] The stakeholders that are currently included on the Board are:
o Recovery Housing / Sober Living Representative {Added} o Local Law Enforcement {Changed from "Public Safety"}
From CoC Seat Definitions. Edits in red:

Seat Definition
{Proposed New Seat}
Recovery Housing /
Sober Living Representative
Senior staff member from a local homeless or
social services agency or who serves as
leadership of a program that provides for
treatment- or recovery housing; and/or sober
living.

Pubic Sa e Local Law Enforcement
Seat.
{There is no proposed change to operational
representative seat definition]
y
2 COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Rebecca Campbell, Director of Finance
DATE: August 4, 2026
SUBJECT: Adoption of a Resolution Approving the City General Fund Reserve Policy and Section 115 Trust
Description:

The City Council will consider adopting a Resolution approving a new General Fund Reserve Policy and will consider establishing a Section 115 Trust and funding those accounts as outlined in the Fiscal Considerations section of this report.

RECOMMENDATION:

1. Adopt a Resolution approving an updated City General Fund Reserve Policy and directing the Director of Finance to take steps to establish a Section 115 Trust and to fund those accounts; and

2. Directing the Finance Director to align funding the reserves and the Section 115 trust as outlined in the Fiscal Considerations section of this report.

BACKGROUND:

Staff presented this item to City Council on April 7, 2026, and the City Council gave direction to staff to have the item returned to them with the budget. The City's current Reserve policy endeavors to maintain a minimum unassigned fund balance of at least 25 percent of operating appropriations to insulate the General Fund programs and current service levels from large and unanticipated one-time expenditure requirements, a revenue reduction due to a change in State or Federal legislation, and other unforeseen circumstances.

In Fiscal Year (FY) 2010-11, the City adopted a General Fund Prudent Reserve (known as the "Economic Stabilization Reserve") under Governmental Accounting Standards Board (GASB) Statement Number 54. The prudent reserve amount is updated annually calculated based on 25 percent of operating appropriations. Appropriations from the reserve can only be made by formal City Council action and are limited to emergencies such as:
• An unplanned, major event such as a catastrophic disaster requiring expenditures over five percent of the adopted General Fund Budget.

• Budgeted revenue took over by another entity.
• A drop in projected/actual revenue of more than five percent of the adopted General Fund revenue budget.

The policy outlines that should the prudent reserve commitment be used, and its level falls below the minimum amount as described herein, the goal is to replenish the fund within two fiscal years.

The Local Economic Augmentation Fund (LEAF) reserve fund was established in FY 2000-01 to be used as the primary financing mechanism to address any potential revenue shortfalls during times of economic downturns or severe State action, so as not to significantly impact the operating budget and service levels of the General Fund. The City Council set aside General Fund proceeds into this account. The intent of this fund was to be used as a "gap financing" mechanism during downturns in the local economy. Per policy, the City will strive to maintain 5 percent of General Fund and Measure U fund annual appropriations in the LEAF fund balance.

The City also has maintained reserves for its Other Post -Employment Benefits (OPEB) Tong -term debt and for its Pension long-term debt.

The City of Santa Maria (herein referred to as the "City") should maintain a prudent level of financial resources to protect against reducing service levels or incurring debt due to revenue shortfalls or unpredicated one-time expenditures. This policy establishes how and when the City builds up stabilization funds and identifies the purposes for which they may be used. The Government Finance Officers Association (GFOA) provides guidance and recommendations for the development of these funds. The City's current policies on reserves have been reviewed and policy modifications are recommended in accordance with GFOA guidance, credit agency recommendations, and best practices.

DISCUSSION:

The maintenance of a General Fund Reserve is a sound business practice to protect the fiscal solvency of the City. A prudent General Fund Reserve level is a critical measure of a government's ability to manage risk. Risk comes in many forms, often unforeseen — a reserve fund is a key tool in meeting the financial challenges of such unforeseen occurrences.

The City has current policies on establishing and maintaining Reserve funds, and support for Reserves are a best practice recommendation from the GFOA and various credit rating agencies. Reserves are a key factor in municipal bond credit ratings because they provide liquidity, fiscal flexibility, and a buffer against economic volatility.

The GFOA recommends, at a minimum, that general -purposes governments, regardless of size, maintain unrestricted fund balance in their General Fund of no less than two months (or 16.7%) of general fund operating expenditures. Credit agencies look at strong reserves that are generally above 20 to 30% of appropriations. A stable, reasonable level of reserved and unreserved fund balance denotes financial stability and strong fiscal 2 management, both important factors considered by rating agencies in evaluating the credit worthiness of the City. The General Fund Reserve Policy and General Fund Appropriation for Contingencies establishes guidelines to ensure the City maintains an unrestricted fund balance in line with GFOA recommendations.

A General Fund Reserve Policy is important in order to ensure that the City is effectively able to:
• Respond strategically and responsibly to the challenges of a changing fiscal environment;
• Mitigate operational impacts during difficult economic times; • Provide flexibility to the City Council for thoughtful reaction to State fiscal or legislative actions that reduce City revenues or increase City costs; • Maintain adequate cash balances;
• Manage unanticipated costs occurring on a one-time basis, such as natural disasters; and
• Demonstrate fiscal soundness and continued creditworthiness to bond rating agencies and the financial community.

In reviewing GFOA guidance, credit agency recommendations, and best practices for local governmental organizations the following reserves are recommended:
• General Fund Reserve (GFOA Core Operating Reserve) — It is the goal of the City Council to build a General Fund Reserve of 16.7 percent of the prior year's budgeted General Fund operating expenditures. The purpose is to maintain liquidity and cover normal revenue fluctuations and unexpected expenditures. • Local Economic Augmentation Fund — When adopting the annual budget for the General Fund, the City Council to put aside 10 percent to 15 percent of General Fund expenditures to buffer against economic downturns, recessions, or major volatility.
• Emergency / Catastrophic Reserve — When adopting the annual budget for the General Fund, the City Council shall put aside 5 percent to 10 percent of General Fund expenditures to respond to disasters or major unforeseen events. • Appropriation for Contingencies — An amount up to five (5.0) percent of the General Fund operating expenditures and should not be less than one (1.0) percent of the approved General Fund operating expenditures in any given year. An amount appropriated for unanticipated expenditure requirements that are adopted as part of the Budget with a majority vote of the City Council and can be used during the 3 course of a fiscal year transferring the appropriation to elsewhere in the budget.

The Appropriation for Contingencies expires June 30th of each fiscal year to be reestablished the following year.

Fund balances represent the net assets of each fund. Net assets generally represent a fund's assets (cash, receivables, etc.) less liabilities. Portions of a fund's balance may be non -spendable, restricted, assigned or committed for future expenditure as a result of City policy. In the event that there is excess Fund Balance Available — The amount, if any, of actual General Fund balance that is available, after the close of fiscal year accounting, exceeding the estimated General Fund Balance Available used in the Budget. This difference, if any, is considered when finalizing the annual Adopted Budget and shall be prioritized as follows:

1. The first priority for Excess General Fund Balance Available at the beginning of each fiscal year, if any, is to increase the General Fund Reserve to ensure it is maintained within the recommended 16.7 percent of the prior year's General Fund and Measure U budgeted operating expenditures.

2. The second priority for Excess General Fund Balance Available at the beginning of each fiscal year, if any, is to increase the Local Economic Augmentation Fund (Stabilization Reserve) to put aside 10 percent to 15 percent.

3. The third priority for Excess General Fund Balance Available at the beginning of each fiscal year, if any, is to increase the Emergency/Catastrophic Reserve to put aside 5 percent to 10 percent.

4. The fourth priority for Excess General Fund Balance Available at the beginning of each fiscal year, if any, is to dedicate excess fund balance for known and quantified unfunded liabilities or one-time unmet needs, including but not limited to the following:
a. Employee pension plan contributions and pension obligation bond debt service
b. Other post -employment benefits (retiree health)
c. Unmet building or maintenance needs
d. Accrued employee leave
e. Litigation settlements
Section 115 Trust
The GFOA supports Section 115 trusts because they help governments responsibly manage long-term liabilities —especially OPEB and pension costs.

In 2012, the GASB issued Statement No. 68, Accounting and Financial Reporting for Pensions. GASB 68 requires that governmental employers that sponsor Defined Benefit plans (i.e., CaIPERS) must recognize a Net Pension Liability on their balance sheet, which is the difference between the City's total pension liability (actuarial accrued liability) 4 and actual plan assets. GASB 68 (which replaces the requirements of GASB 27) became effective for fiscal years starting after June 15, 2014. The City's Net Pension Liability is $184.3 million as of June 30, 2024. The City set has set aside $6.2 million in reserve, established in FY 2017-18, for Unfunded Pension liability costs. Currently the reserve sits at $15.4 million.

In 2015, the GASB issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. GASB 75 requires the City to report costs and obligations for post -employment healthcare and other post -employment benefits (called "OPEBs") much like the current accounting requirement to report pension obligations. Like GASB 68, the City must also report its net OPEB liability (difference between the total OPEB liability and assets accumulated in an irrevocable trust) on its Financial Statements. GASB 75 (which replaces the requirements of GASB 45) will become effective for fiscal years beginning after June 15, 2017. The City's Net OPEB liability is $18.6 million as of June 30, 2024. The City set has set aside a $6.2 million in reserve, established in FY 2010-11, for OPEB liability costs, and the reserve sits at $6.2 million.

To help public agencies address and manage their GASB 68 and 75 liabilities, programs have been established as a multiple employer trust. To be able to properly offset liabilities on the City's financial statements, funds must be set aside in an exclusive benefit, irrevocable trust that cannot be accessed by creditors. The trust permits the City, under federal and state law, to invest in a more diversified array of investments to maximize investment returns long term and reduce the City's liabilities.

Expected benefits of a Section 115 Trust Program to the City include:
• Contributions placed in an exclusive benefit trust can offset unfunded liabilities, which will lower the City's Net OPEB Liability and address its Net Pension Liability. • Investment flexibility with Section 115 Trust compared to restrictions on general fund investments.
• Increased risk diversification of plan assets through different asset management • Oversight and control of fund management selection, monitoring of performance and ability to replace fund management based on performance criteria. • Increased flexibility on use of trust assets (i.e., trust assets can be accessed at any time if the assets are used to fund the City's pension and OPEB obligations and defray reasonable expenses associated therewith)
• Potential for positive rating agency and investor consideration.

Staff will return to City Council as a next step with a resolution for the Section 115 Trust.

Alternative(s)
None presented at this time.
5 Fiscal Considerations
In order to fund the General Reserve, LEAF, Emergency Catastrophic Reserve, and Contingencies, and the Section 115 trust for pension liability, an estimated $15,188,353 will be transferred out from the existing Pension Reserve and transferred into the other areas as shown in Table 1 below.

Table 1: Transfers Out from Pension Reserve
$ 15,416, 310 Pension Reserve
$ (2,900,000) GF Reserve (Operating Reserve)
$ (9,016,310) LEAF
$ (1,000,000) Disaster Reserve
$ (1,000,000) Contingencies
$ (1,500,000) 115 Trust for Pension
$ - Balance
Table 2 represents the existing policy target and projected status of the City's General Fund reserves at June 30, 2026, based on year-end FY 2024 audit results and FY 2026 departmental projection estimates. Recommended changes are reflected in the New Policy columns with this policy update. Please note that the "General Reserve" was formally known as the Economic Stabilization Reserve and will be retitled.

Table 2: General Fund Reserve Existing and New Policy Comparison Estimates Existing Policy Projected June 30,
Target 2026 Balance
New
Policy
Target
New Policy
Recommendation
Unassigned Fund
Balance
$26.9 M
$0 N/A
N/A
General Reserve
(Core Operating
Reserve)
Local Economic
Augmentation Fund
(Emergency Reserve)
Emergency/Catastrophic
Reserve (Disaster
Reserve)
$26.9 M
$19,800,000 $22.7 M $22,700,000
$6.8 M $937,650 $20.4 M $9,953,960
N/A
$5.4 M $1,000,000
Contingencies*
OPEB

PENSION
N/A - $5.4 M $1,000,000
N/A $6,248,027 N/A
N/A $15,416,310 N/A
115 Trust for OPEB
115 Trust for Pension
Total Funds
N/A N/A $6,248,027
N/A N/A $1,500,000
$64.8 M $42,401,987 $53.9 M $42,401,987
6 Staff is recommending that funding be moved based on GFOA best practices as outlined in the new policy with the following actions:
• Fully fund the General Reserve (Core Operating Reserve) per policy at $22.7 million. This will require moving $2.9 million from the existing Pension Reserve. • Increase the LEAF Reserve to $10.0 million. This will require moving $9.0 million from the existing Pension Reserve.
• Establish the Emergency/Catastrophic Reserve at $1.0 million. This will require moving $1.0 million from the existing Pension Reserve.
• Establish a General Fund Contingency account at $1.0 million. This will require moving $1.0 million from the existing Pension Reserve.
• Move $6,248,027 in OPEB Reserve from the investment pool to a OPEB Section 115 irrevocable trust account. Staff will return to City Council for next steps on that establishment.
• Move $1,500,000 in Pension Reserve from the investment pool to a Pension Section 115 irrevocable trust account. Staff will return to City Council for next steps on that establishment.

The new policy recommends that a total of $53.9 million be set aside in reserves and contingencies. As recommended, there is an estimated total of $42,401,987 in funding set aside in reserves, contingency, and in the Section 115 trust.

Imact on the Community
Maintaining a prudent financial reserve has several direct and indirect impacts on a community. From a public finance perspective, reserves enhance financial stability, service continuity, and long-term affordability of government services. For the community, prudent reserves result in: stable public services, lower infrastructure financing costs, better emergency response capability, reduced likelihood of sudden tax increases or service cuts, and greater financial resilience during economic downturns. A prudent reserve functions as the community's financial safety net, protecting both services and taxpayers during periods of uncertainty.

Prefunding pension and OPEB obligations through a Section 115 trust benefits both the community and employees by ensuring these long-term commitments are funded in a disciplined, transparent, and sustainable way. For the community, it helps stabilize budgets, reduce long-term costs, and protect service levels by avoiding sharp increases in future contributions. For employees, it provides greater security that promised retirement benefits will be paid, backed by dedicated assets that are professionally managed and legally restricted for that purpose.

ATTACHMENT'S)
A. Resolution
B. General Fund Reserve Policy
7 Attachment A
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF SANTA MARIA, CALIFORNIA,

APPROVING AN UPDATED CITY GENERAL FUND RESERVE POLICY

AND DIRECTING THE DIRECTOR OF FINANCE TO TAKE STEPS TO
ESTABLISH A SECTION 115 TRUST AND TO FUND THOSE ACCOUNTS WHEREAS, the City has current policies on establishing and maintaining Reserve funds, and support for Reserves are a best practice recommendation from the Government Finance Officers Association (GFOA) and various credit rating agencies; and WHEREAS, the City's current policies on reserves have been reviewed and policy modifications are recommended in accordance with GFOA guidance, credit agency recommendations, and best practices; and
WHEREAS, the GFOA supports Section 115 irrevocable trusts because they help governments responsibly manage long-term liabilities for other post -employment benefit and pension costs.

NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the City of Santa Maria, California, as follows:

1. A new General Fund reserve policy, outlined as Attachment B is approved, and authorizes:
a. The "Economic Stabilization" Reserve shall be retitled to the "General Reserve" with a savings target of 16.7 percent of the prior fiscal year's budgeted General Fund and Measure U Fund operating expenditures; b. Maintaining the Local Economic Augmentation Fund reserve with the target of 10 percent to 15 percent of the prior fiscal year's budgeted General Fund and Measure U Fund operating expenditures; c. Establishing an Emergency/Catastrophic Reserve with the target of 5 percent to 10 percent of the prior fiscal year's budgeted General Fund operating expenditures;
d. Establishing a General Fund Appropriation for Contingencies with the target of 5 percent of the fiscal year's budgeted General Fund operating expenditures. Appropriations for Contingencies should not be less than 1 percent of the approved General Fund operating expenditures in any given year;
e. The Director of Finance is authorized to adjust reserves in the City financial system in accordance with the policy and year-end financial actual results as outlined; and

Page 1 of 2 ends

Attachment A

2. The Director of Finance is authorized and directed to take the steps necessary to establish a Section 115 Irrevocable Trust with the intent to prefund the City's long-term debt for other post -employment benefits and unfunded pension liability costs.

3. The Chief Deputy City Clerk is hereby authorized to make minor changes herein to address clerical errors, so long as substantial conformance of the intent of this document is maintained. In doing so, the Chief Deputy City Clerk shall consult with the City Manager and City Attorney concerning any changes deemed necessary.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Santa Maria, California, held this 4th day of August 2026.

Mayor
ATTEST:

Chief Deputy City Clerk
APPROVED AS TO FORM:

City Attorney
APPROVED AS TO CONTENT:

Department Director
City Manager

Page 2 of 2 ends

ATTACHMENT B
m
'III '

CITY OF SANTA MARIA

GENERAL FUND RESERVES POLICY

PURPOSE
Establish a General Fund Reserve Policy.

POLICY SCOPE
This Policy sets forth the parameters and funding methods the City may utilize to establish and maintain an adequate General Fund Reserve and Appropriation for Contingencies.

BACKGROUND
The City of Santa Maria (herein referred to as the "City") should maintain a prudent level of financial resources to protect against reducing service levels or incurring debt due to revenue shortfalls or unpredicated one-time expenditures. This policy establishes how and when the City builds up stabilization funds, and identifies the purposes for which they may be used. The Government Finance Officers Association (GFOA) provides guidance and recommendations for the development of these funds.

The City has current policies on establishing and maintain Reserve funds, and additional support for Reserves are a best practice recommendation from the GFOA and various credit rating agencies.

The GFOA recommends, at a minimum, that general -purposes governments, regardless of size, maintain unrestricted fund balance in their General Fund of no less than two months (or 16.7%) of general fund operating expenditures. A stable, reasonable level of reserved and unreserved fund balance denotes financial stability and strong fiscal management, both important factors considered by rating agencies in evaluating the credit worthiness of the City. The General Fund Reserve Policy and General Fund Appropriation for Contingencies establishes guidelines to ensure the City maintains an unrestricted fund balance in line with GFOA recommendations.

IIIIII

CITY OF SANTA MARIA

GENERAL FUND RESERVES POLICY
A General Fund Reserve Policy is important in order to ensure that the City is effectively able to:

A. Respond strategically and responsibly to the challenges of a changing fiscal environment;
B. Mitigate operational impacts during difficult economic times; C. Provide flexibility to the City Council for thoughtful reaction to State fiscal or legislative actions that reduce City revenues or increase City costs; D. Maintain adequate cash balances;
E. Manage unanticipated costs occurring on a one-time basis, such as natural disasters; and
F. Demonstrate fiscal soundness and continued creditworthiness to bond rating agencies and the financial community.

DEFINITIONS
Appropriation for Contingencies — An amount appropriated for unanticipated expenditure requirements. Appropriation for Contingencies is adopted as part of the Budget with a majority vote of the City Council and can be used during the course of a fiscal year transferring the appropriation to elsewhere in the budget. The Appropriation for Contingencies expires June 30th of each fiscal year to be reestablished the following year.

Emergency/ Catastrophic Reserve — The portion of the General Fund balance assigned by the City Council as the Disaster Reserve. This funding is set aside to respond to disasters or major unforeseen events.

Excess Fund Balance Available — The amount, if any, of actual General Fund balance that is available, after the close of fiscal year accounting, exceeding the estimated General Fund Balance Available used in the Budget. This difference, if any, is considered when finalizing the annual Adopted Budget.

Fund Balances — Fund balances represent the net assets of each fund. Net assets generally represent a fund's assets (cash, receivables, etc.) less its liabilities. Portions of a fund's balance may be non -spendable, restricted, assigned or committed for future expenditure as a result of City policy, terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions, which the City cannot unilaterally alter.

Fund Balance Available — The amount of General Fund balance that is available for financing expenditures and other funding requirements after deducting non -spendable, restricted, committed and assigned fund balance. Also referred to as the unobligated or unassigned fund balance.

General Fund — The main operating fund providing general City-wide services.

General Fund Reserve (Operating Reserve) — The portion of the General Fund balance assigned by the City Council as the General Fund Reserve. It is not available for 2 of 5

m
�Ill�i

CITY OF SANTA MARIA

GENERAL FUND RESERVES POLICY
appropriation during the fiscal year except in cases of a legally declared emergency, as the funds are held for future years in anticipation of limited duration budget shortfalls and to ensure sufficient working capital for cash flow. The General Fund Reserve is not a budgetary appropriation and so does not expire at year end. It can be added to or reduced with each year's budget.

Local Economic Augmentation Fund (Emergency Reserve) — The portion of the General Fund balance assigned by the City Council as the Budget Stabilization Reserve. Stabilization funds are called by many names, including rainy day funds, contingency funds, and are there to buffer against economic downturns, recessions, or major volatility.

Measure U Fund: A locally approved transactions and use tax (sales tax) fund that provides discretionary revenue to support the City of Santa Maria's general municipal services, including public safety, infrastructure, and community programs. The fund is used to maintain service levels, address community priorities, and enhance long-term fiscal stability.

Unrestricted Fund Balance — The portion of the General Fund balance made up of the committed, assigned and available (unassigned) fund balance. The unrestricted fund balance is not restricted by law for a specific purpose.

POLICY
A. General Fund Reserve (GFOA Core Operating Reserve) — It is the goal of the City Council to build a General Fund Reserve of 16.7 percent of the prior year's budgeted General Fund operating expenditures. The purpose is to maintain liquidity and cover normal revenue fluctuations and unexpected expenditures.

B. Local Economic Augmentation Fund — When adopting the annual budget for the General Fund, the City Council to put aside 10% to 15% of General Fund expenditures to buffer against economic downturns, recessions, or major volatility.

C. Emergency / Catastrophic Reserve — When adopting the annual budget for the General Fund, the City Council shall put aside 5% to 10% of General Fund expenditures to respond to disasters or major unforeseen events.

D. Appropriation for Contingencies — An amount up to five (5.0) percent of the General Fund operating expenditures and should not be less than one (1.0) percent of the approved General Fund operating expenditures in any given year. An amount appropriated for unanticipated expenditure requirements that are adopted as part of the Budget with a majority vote of the City Council and can be used during the course of a fiscal year transferring the appropriation to elsewhere in the budget. The Appropriation for Contingencies expires June 30th of each fiscal year to be reestablished the following year.

1. During the public hearing on the Recommended Budget or at any properly noticed public meeting the City Council may consider reducing the amount set aside in the General Fund Appropriation for Contingencies.

E. Excess Fund Balance Available — When adopting the annual budget for the General Fund, the City Council will provide direction to the Director of Finance to reconcile the difference between the General Fund's estimated and actual Fund Balance Available at the beginning of the budget period. In those instances when the actual Fund 3 of 5

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GENERAL FUND RESERVES POLICY
Balance Available is less than estimated, the City Director of Finance may be directed to reduce the General Fund Appropriation for Contingencies and/or General Fund Reserves. In those instances when the actual Fund Balance Available is greater than estimated, the Director of Finance may be given specific direction, generally within the following parameters:

1. The first priority for Excess General Fund Balance Available at the beginning of each fiscal year, if any, is to increase the General Fund Reserve and/or General Fund Appropriation for Contingencies to ensure it is maintained within the recommended 16.7 percent of the prior year's General Fund operating expenditures.

3. The third priority for Excess General Fund Balance Available at the beginning of each fiscal year, if any, is to increase the Emergency/Catastrophic Reserve to put aside 5% to 10%.

3. The fourth priority for Excess General Fund Balance Available at the beginning of each fiscal year, if any, is to dedicate excess fund balance for known and quantified unfunded liabilities or one-time unmet needs, including but not limited to the following:
a. Employee pension plan contributions and pension obligation bond debt service
b. Other post -employment benefits (retiree health)
c. Unmet building or maintenance needs
d. Accrued employee leave
e. Litigation settlements
F. Unreserved Fund Balance — The City will maintain sufficient fund balances in the General Fund to provide adequate working capital and to accommodate required adjustments to other reserve accounts, including advances to other funds.

Appropriations or use of funds from Unreserved Fund Balances will require approval by the City Council.

G. Other Assignments or Commitments of the General Fund — Establishment of these policies do not preclude the City Council from setting aside additional funds for a specific project, program or capital item.

H. Specifying the Appropriate Circumstances for Drawing Down Reserves — It is to be expected that the reserve or budgetary cushion will temporarily diminish when unforeseen pressures affect the General Fund. Therefore, it is important to have a policy for drawing down reserves. The GFOA suggests those circumstances in which invasion of the general reserve may be warranted:
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CITY OF SANTA MARIA
Mill, GENERAL FUND RESERVES POLICY
• Emergency
• Non -recurring expenses
• One-time capital cost
There is no "one -size -fits -all" definition of what constitutes an "emergency" for purposes of administering a reserve policy. Ultimately, an "emergency" is what the City Council determines it to be. It will always reflect a carful balancing of the City Council's desire to maintain an adequate reserve, with its desire to maintain essential services — and, in some cases, its obligation to maintain statutorily required serve levels.

Until the City reaches its general reserve goal, the budget process permits appropriations for one-time projects/expenses and capital projects. In the event that the City realizes reserves above the minimum levels defined, the first use of such funds should be a designation for capital projects and other one-time uses.

I. Directing the Replenishment of the Reserve — If and when reserves are diminished, the City Council should adopt a plan to replenish reserves to minimum levels within a specific timeframe.

J. The General Fund Reserve shall be the last resort in balancing the City budget.

K. A majority vote of the City Council shall be required to authorize General Fund Reserve expenditures.

L. No expenditures shall be made directly from the General Fund Reserve. Funds for expenditures shall be transferred to a cost center.

RESPONSIBILITIES
The City Manager and the City Director of Finance are hereby authorized and directed to implement the Policy hereby established when preparing the annual budget for each fiscal year. Additionally, the Finance Director will initiate a review of the policy within seven years of adoption. The review of the policy will include a review of best practices as well as a financial risk assessment.
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Santa Maria City CouncilAugust 4, 2026

Santa Maria City Council
August 4, 2026