HomeMy WebLinkAbout12-12-2017 Agenda Packet copyTuesday, December 12, 2017
4:00 PM SPECIAL MEETING Council Chamber
990 Palm Street
San Luis Obispo Page 1
CALL TO ORDER: Mayor Heidi Harmon
ROLL CALL: Council Members Carlyn Christianson, Aaron Gomez, Andy
Pease, Vice Mayor Dan Rivoire and Mayor Heidi Harmon
PUBLIC COMMENT FOR AGENDA ITEMS ONLY
STUDY SESSION
1.COMMUNITY CHOICE ENERGY STUDY SESSION (HERMANN / CODRON – 90
MINUTES)
Recommendation:
1.Receive and file the Technical Feasibility Study on Community Choice Energy (CCE)
for the Tri-County area including San Luis Obispo County, Santa Barbara County, and
Ventura County; and
2.Receive and file an initial feasibility study prepared by Pilot Power Group for the intra-
county region – City of San Luis Obispo and County of San Luis Obispo; and
3.Provide staff with direction regarding whether or not to continue to pursue community
choice energy options as follows:
1.Form a new CCE program; or
2.Solicit proposals to identify an existing CCE program to join; or
3.Discontinue or pause the pursuit of a CCE program at this time.
ADJOURNED TO THE SPECIAL MEETING OF DECEMBER 12, 2017 TO BEGIN AT
6:00 PM
Packet Pg 1
San Luis Obispo City Council Agenda December 12, 2017 Page 2
6:00 PM
SPECIAL MEETING
Council Chamber
990 Palm Street
CALL TO ORDER: Mayor Heidi Harmon
ROLL CALL: Council Members Carlyn Christianson, Aaron Gomez, Andy
Pease, Vice Mayor Dan Rivoire and Mayor Heidi Harmon
PLEDGE OF ALLEGIANCE: Council Member Andy Pease
PRESENTATIONS
2. PROCLAMATION - COMMENDATION TO SLO SAFE SPACE INITIATIVE
(HARMON – 5 MINUTES)
3. PRESENTATION - CERTIFICATE OF RECOGNITION TO OUTGOING VICE
MAYOR DAN RIVOIRE (HARMON – 5 MINUTES)
APPOINTMENTS
4. VICE MAYOR APPOINTMENT FOR 2018 (HERMANN / GALLAGHER – 5
MINUTES)
Recommendation:
Appoint Council Member Carlyn Christianson as Vice Mayor to serve a one-year term
commencing upon appointment.
5. APPOINTMENT TO THE PROMOTIONAL COORDINATING COMMITTEE
(PCC) (HERMANN / GALLAGHER / GOODWIN – 5 MINUTES)
Recommendation:
In accordance with the recommendation of the Council Subcommittee:
Confirm the appointment of John Thomas to the Promotional Coordinating Committee to
complete an unexpired term through March 31, 2019.
Packet Pg 2
San Luis Obispo City Council Agenda December 12, 2017 Page 3
PUBLIC COMMENT PERIOD FOR ITEMS NOT ON THE AGENDA (not to exceed 15
minutes total)
The Council welcomes your input. You may address the Council by completing a speaker slip
and giving it to the City Clerk prior to the meeting. At this time, you may address the Council
on items that are not on the agenda. Time limit is three minutes. State law does not allow the
Council to discuss or take action on issues not on the agenda, except that members of the
Council or staff may briefly respond to statements made or questions posed by persons
exercising their public testimony rights (gov. Code sec. 54954.2). Staff may be asked to
follow up on such items
CONSENT AGENDA
Matters appearing on the Consent Calendar are expected to be non-controversial and will be
acted upon at one time. A member of the public may request the Council to pull an item for
discussion. Pulled items shall be heard at the close of the Consent Agenda unless a majority of
the Council chooses another time. The public may comment on any and all items on the
Consent Agenda within the three minute time limit.
6. WAIVE READING IN FULL OF ALL RESOLUTIONS AND ORDINANCES
(GALLAGHER)
Recommendation:
Waive reading of all resolutions and ordinances as appropriate.
7. MINUTES OF NOVEMBER 21, 2017 (GALLAGHER)
Recommendation:
Approve the minutes of the City Council meeting of November 21, 2017.
8. APPROVE CORRECTIONS TO THE ORCUTT AREA SPECIFIC PLAN PARK
FEES (CODRON / DOSTALEK)
Recommendation:
Adopt a Resolution “A Resolution of the City Council of the City of San Luis Obispo,
California, approving corrections to the Orcutt Area Specific Plan Park fees.”
Packet Pg 3
San Luis Obispo City Council Agenda December 12, 2017 Page 4
9. QUITCLAIM DEED FOR EASEMENTS ACROSS THE PROPERTY LOCATED AT
4450 BROAD STREET (CODRON / DOSTALEK)
Recommendation:
Adopt a Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo,
California, authorizing the Mayor to execute a quitclaim deed for easements across the property
located at 4450 Broad Street.”
10. 2017 WATER RESOURCES STATUS REPORT (MATTINGLY / FLOYD / METZ /
BOERMAN)
Recommendation:
Receive and file the 2017 Water Resources Status Report.
11. SMALL BORE ASSOCIATION LEAD REMEDIATION, SPECIFICATION NO.
91219 (GRIGSBY / MCGUIRE)
Recommendation:
1. Approve construction documents for “Small Bore Association Lead Remediation”; and
2. Authorize staff to advertise for bids and authorize the City Manager to award the
construction contract if the lowest responsible bid is within the Engineer’s Estimate of
$221,500; and
3. Authorize allocation of $209,000 from the General Capital Fund and $70,000 from the
Sewer Fund for a total of $279,000, with $244,000 to the construction account and
$35,000 to the construction management account of the project.
12. AUTHORIZE REQUEST FOR PROPOSALS FOR PARKING LOTS AND
STRUCTURES SWEEPING AND JANITORIAL SERVICES, SPECIFICATION NO.
91624 (GRIGSBY / LEE)
Recommendation:
1. Authorize the release of the Request for Proposals (RFP) for Parking Lots and Structures
Sweeping and Janitorial Services, Specification No. 91624; and
2. Authorize the City Manager to enter into a contract(s) with the successful bidder(s) if
within authorized project budget of $250,000; and
3. Authorize the City Attorney to approve modifications to the form of the contract with
the successful bidder(s).
Packet Pg 4
San Luis Obispo City Council Agenda December 12, 2017 Page 5
13. CITY COUNCIL RESOLUTION SUPPORTING THE MISSION OF THE
CENTRAL COAST DISTRACTED DRIVING AWARENESS PARTNERSHIP
(GRIGSBY / HUDSON / FUKUSHIMA)
Recommendation:
Adopt a Resolution entitled “A Resolution of the City Council of the City of San Luis
Obispo, California, endorsing the Mission of the Central Coast Distracted Driving
Awareness Partnership.”
14. ORDINANCE ADOPTION - AMENDING AND REAFFIRMING THE CURRENT
ELECTION CAMPAIGN REGULATIONS (HERMANN / GALLAGHER)
Recommendation:
Adopt Ordinance No. 1643 (2017 Series) entitled “An Ordinance of the City Council of the
City of San Luis Obispo, California, readopting and amending Chapter 2.40 of the
Municipal Code related to Election Campaign Regulations.”
15. COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) MARSH STREET
CURB RAMPS PROJECT, SPECIFICATION NO. 91544 (GRIGSBY / NELSON)
Recommendation:
1. Approve Plans and Specifications for the Community Development Block Grant (CDBG)
Marsh Street Curb Ramps project, Specification No. 91544; and
2. Authorize staff to advertise for bids and authorize the City Manager to award the contract
if the lowest responsible bid is within the Engineer’s Estimate of $195,500.
Packet Pg 5
San Luis Obispo City Council Agenda December 12, 2017 Page 6
PUBLIC HEARING ITEMS AND BUSINESS ITEMS
16. BUDGET FOUNDATION: FISCAL HEALTH RESPONSE PLAN (JOHNSON /
BRADFORD / STANWYCK)
Recommendation:
1. Review and provide general direction to staff regarding proposed components and
allocations for the development of a Fiscal Health Response Plan (FHRP) with final
adoption of the FHRP in April 2018; and
2. Provide direction to staff to return in April 2018 with specific recommendations on the
use of one-time fund balance above policy reserve including dollar allocation to fund a
Section 115 Pension Trust to address long-term variability in pension costs and address
unfunded liability; and
3. Review a preliminary 10-Year Capital Improvement Plan (CIP) and provide general
direction to staff to return to Council in January 2018 for final review including
recommendations to allocate reserves in excess of policy requirements towards
community safety project.
COUNCIL LIAISON REPORTS AND COMMUNICATIONS
(Not to exceed 15 minutes) Council Members report on conferences or other City activities.
At this time, any Council Member or the City Manager may ask a question for clarification,
make an announcement, or report briefly on his or her activities. In addition, subject to
Council Policies and Procedures, they may provide a reference to staff or other resources for
factual information, request staff to report back to the Council at a subsequent meeting
concerning any matter, or take action to direct staff to place a matter of business on a future
agenda. (Gov. Code Sec. 54954.2).
ADJOURNMENT
The Regular City Council Meetings of December 19, 2017 and January 2, 2018 was previously
cancelled. The next Regular City Council Meeting is scheduled for Tuesday, January 9, 2018
at 5:30 p.m. and 6:00 p.m., respectively, in the Council Hearing Room and Council Chamber,
990 Palm Street, San Luis Obispo, San Luis Obispo, California.
Packet Pg 6
San Luis Obispo City Council Agenda December 12, 2017 Page 7
LISTENING ASSISTIVE DEVICES are available for the hearing impaired--please see City Clerk.
The City of San Luis Obispo wishes to make all of its public meetings accessible to the
public. Upon request, this agenda will be made available in appropriate alternative form ats to
persons with disabilities. Any person with a disability who requires a modification or
accommodation in order to participate in a meeting should direct such request to the City
Clerk’s Office at (805) 781-7100 at least 48 hours before the meeting, if possible.
Telecommunications Device for the Deaf (805) 781-7107.
City Council regular meetings are televised live on Charter Channel 20. Agenda related
writings or documents provided to the City Council are available for public inspection in the
City Clerk’s Office located at 990 Palm Street, San Luis Obispo, California during normal
business hours, and on the City’s website www.slocity.org. Persons with questions concerning
any agenda item may call the City Clerk’s Office at (805) 781-7100.
Packet Pg 7
Page intentionally left
blank.
Packet Pg 8
Meeting Date: 12/12/2017
FROM: Greg Hermann, Acting Assistant City Manager
Michael Codron, Community Development Director
Prepared By: Marcus Carloni, Sustainability Coordinator
SUBJECT: COMMUNITY CHOICE ENERGY STUDY SESSION
RECOMMENDATION
1. Receive and file the Technical Feasibility Study on Community Choice Energy (CCE) for the
Tri-County area including San Luis Obispo County, Santa Barbara County, and Ventura
County (Attachment E); and
2. Receive and file an initial feasibility study prepared by Pilot Power Group for the intra-
county region – City of San Luis Obispo and County of San Luis Obispo (Attachment F); and
3. Provide staff with direction regarding whether or not to continue to pursue community choice
energy options as follows:
1. Form a new CCE program; or
2. Solicit proposals to identify an existing CCE program to join; or
3. Discontinue or pause the pursuit of a CCE program at this time.
REPORT-IN-BRIEF
Climate Action was included as a Major City Goal in 2017-2019 Financial Plan. A key action in
this goal included the following objective:
Assess and report the requirements to achieve the “net-zero carbon City” target including
feasibility analysis and implementation of a Community Choice Energy program.
The purpose of this staff report is to provide information on the feasibility analyses completed to
date for CCE programs, pursuant to the Major City Goal objective, and for the City Council to
provide direction on next steps. In 2015 the City Council approved a resolution authorizing the
City’s participation in the exploration of Community Choice Energy. Since approval of that
resolution, the City has been involved in two feasibility study efforts: 1) the Intra-County Study -
a pro-bono “initial feasibility study” prepared by Pilot Power Group designed to provide a high-
level assessment of CCE feasibility within San Luis Obispo County, and 2) the Tri-County
Feasibility Study – a multi-jurisdictional feasibility study providing a detailed analysis of eight
geographical CCE participation scenarios across San Luis Obispo, Santa Barbara, and Ventura
Counties (including the City jurisdictions within those Counties).
The findings of the Intra-County Study generally align with the findings of a peer review of the
Tri-County study, finding with high probability that a new CCE program would be able to cover
its costs, generate net revenue, and maintain rate competitiveness across the studied scenarios.
Packet Pg 9
1
The results of the Tri-County study were released in September 2017 and conclude that a newly
created regional CCE program spanning San Luis Obispo, Santa Barbara, and Ventura Counties
is not likely to be a viable venture in terms of the CCE program’s ability to provide competitive
rates and remain a solvent organization. However, the results of the peer review indicate that it
may be possible for a local or regional CCE program operating within Pacific Gas and Electric
Company (PG&E) territory only (e.g. in San Luis Obispo and northern Santa Barbara County) to
offer competitive rates while covering its costs.
The Tri-County Feasibility Study and the Intra-County Study, however, did not consider the
viability of joining an existing CCE program, which is another potential option for the City. Of
the in-development CCE’s, Monterey Bay Community Power (MBCP) is the only one within
PG&E service territory and the City could pursue joining this effort, or other CCE programs
accepting new jurisdictions.
In addition to the option to join an existing CCE program such as MBCP, this report provides
several other options for the City Council’s consideration and direction to staff. Such options
include forming a new local CCE program that only includes the City of San Luis Obispo, and/or
forming a new CCE program wherein the City takes the lead to work with and include other
jurisdictions to establish a larger CCE. General pros and cons with these options are provided
herein together with a comparison table, and next steps associated with each of these options,
dependent upon City Council direction.
Note: for a glossary of terms used in this report please see Attachment A.
DISCUSSION
Background
1. About Community Choice Energy
Community Choice Energy (CCE), also known as Community Choice Aggregation (CCA),
enables local governments to leverage the purchasing power of their residents, businesses, and
governments to purchase or generate power for their communities. When a CCE program is
formed, the CCE provider purchases the electricity—which typically includes a higher
percentage of electricity from renewable resources like wind and solar—and sets the rates
charged to customers. The existing “investor-owned utility” (IOU), PG&E in our region,
continues to deliver the electricity purchased by the CCE provider over their power lines and
continues to provide metering, billing, and other customer service as they do now. The day-to-
day experience for the customer is the same, meaning services continue to be provided by PG&E
and the only difference is that energy is purchased through the CCE.
Currently, there are nine CCE programs in operation throughout California: five in the San
Francisco Bay Area, one in Humboldt County, and three in the Los Angeles area. The longest-
standing CCE program is MCE Clean Energy, which began operations in Marin County in 2010
and has since grown to also include parts of Napa, Solano, and Contra Costa Counties. More
than 20 jurisdictions are actively studying or developing CCE programs, with several programs
Packet Pg 10
1
expected to launch in 2018. Attachment D includes a matrix prepared by County of Santa
Barbara staff that compares the nine operational CCE programs and three in-development CCE
programs. All of the operational and in-development CCE programs conducted feasibility studies
that suggested CCE would be economically viable for their communities.
2. Steps to Forming a CCE Program
There are three basic steps to forming a CCE program as provided below.
• Step 1 (Feasibility): Assess the viability of CCE via a feasibility study. The study is
typically prepared by a third-party with energy industry expertise with input from local
government staff/elected officials and community members. A key milestone at this stage is
obtaining electricity consumption data from the existing investor-owned utility (e.g. PG&E)
and beginning to develop relationships with the investor-owned utility (IOU) as a working
partnership with them is required.
• Step 2 (Implementation): If feasible, the next step is to set up the CCE program
implementation organization, prepare an implementation plan and IOU service agreements.
If multiple jurisdictions are involved, a joint powers authority (JPA) is formed. The
implementation plan must be certified by the California Public Utilities Commission and
provides more detail about how the CCE program will be launched and operated. Power
procurement and other service contracts may also be initiated during this phase, and more
robust outreach and education efforts can occur.
• Phase 3 (Launch): Launch the CCE program. This includes setting up the systems and
processes, and securing vendors and staff needed to provide electricity service to customers.
Key activities include hiring staff/vendors, purchasing power, setting up power scheduling
systems and procedures with the California Independent System Operator, developing
customer support programs, establishing billing systems and processes with the IOU,
posting a California Public Utilities Commission bond and required deposits, developing
marketing materials, and notifying customers of program launch.
Previous Council Direction
In December 2013 City Staff presented the City Council with a detailed report to educate the
Council and community about CCE. No formal action was taken at that time other than
exploratory steps including appointing Councilmembers to a CCE exploration advisory
committee and allow the City Manager to release City power usage data to facilitate exploration
of potential feasibility. In March 2015 the City Council approved Resolution No. 10609
confirming the City of San Luis Obispo’s participation in the exploration of CCE. The resolution
authorized participation in an inter-jurisdictional investigation into CCE feasibility allowing
execution of appropriate documents to allow technical consultants to acquire energy usage load
data from the electric distribution utility for analysis as part of the feasibi lity study. (See
Attachment B for the December 2013 staff report, March 2015 staff report, and March 2015
resolution.)
Since adoption of the resolution, City staff have been involved in two CCE feasibility studies -
Packet Pg 11
1
the Central Coast Power feasibility study (also known as the “Tri-County” feasibility study) and
the Intra-County initial feasibility study. Details on these two efforts are provided below.
Update on efforts since Council direction
1. Tri-County Feasibility Study
In 2016, the Tri-County (San Luis Obispo, Santa Barbara, and Ventura Counties) CCE feasibility
study effort began; led by the County of Santa Barbara with funding from ten other jurisdictions 1
and the Community Environmental Council, and was conducted by Willdan Financial Services
(Willdan). A peer review was subsequently conducted by MRW & Associates. Staff from the
eleven jurisdictions participated in an Advisory Working Group (AWG) to help guide and
oversee the feasibility analysis, provide outreach support, and monitor policy and program
developments related to CCE. The City of San Luis Obispo was not directly apart of the AWG
but worked closely with County of San Luis Obispo and County of Santa Barbara staff to
monitor the process.
Scope of Tri-County Feasibility Study
This study evaluated the feasibility of forming a new CCE program run by one or multiple local
governments in the Tri-County Region. The study did not consider the viability of one or more
jurisdictions joining an existing CCE program.
The study assessed financial feasibility in terms of the ability of a local/regional CCE program to
provide competitive electricity rates while meeting policy goals and covering substantial CCE
program formation costs and ongoing operating expenses over a ten-year study period (2020-
2030).
The Advisory Working Group (AWG) selected eight participation scenarios to explore the
feasibility of different sizes and configurations for the CCE program and the potential effect of
customer demographics. In addition, due to the complexity of evaluating the feasibility of
forming a new CCE, the AWG took the additional prudent step to commission MRW &
Associates (MRW) to conduct a third-party peer review of the Willdan feasibility study – to
evaluate the assumptions and conclusions of Willdan’s work. For details on the participation
scenarios and discussion of the Tri-County Feasibility Study see Attachment C (County of Santa
Barbara Staff Report to Board of Supervisors October 3, 2017) and see Attachment E (Tri-
County Feasibility Study).
Findings of Tri-County Feasibility Study and MRW Peer Review
In summary, the feasibility study indicates that a newly created regional CCE program spanning
San Luis Obispo, Santa Barbara, and Ventura Counties is likely not a viable venture in terms of
the CCE program’s ability to provide competitive rates and remain a solvent organization. Key
factors that led to this conclusion are the very large size of the region leading to expensive and
1 County of San Luis Obispo, County of Santa Barbara, County of Ventura, Cities of Camarillo, Carpinteria,
Moorpark, Santa Barbara, Simi Valley, Thousand Oaks, and Ventura.
Packet Pg 12
1
risky debt issues, assumptions about significantly higher than expected future power cost
projections, and complications arising from potentially operating in two utility service territories
(Pacific Gas and Electric (PG&E) and Southern California Edison (SCE)). SCE’s relatively less
expensive rates also contributed to the infeasibility finding.
However, the results of the peer review (Attachment E, Tri-County Feasibility Study, Appendix
L) indicate that it may be possible for a local or regional CCE program to operate within Pacific
Gas and Electric Company (PG&E) territory, i.e., in San Luis Obispo and northern Santa Barbara
County, to offer competitive rates while covering its costs.
In its peer review, MRW did a rate comparison for unincorporated San Luis Obispo Count y
which is fully within PG&E territory. Figure 1 (below) shows the CCE program’s expected rates
(as shown by the stacked bar charts illustrating CCE costs) compared to the applicable IOU rates
(blue line) for unincorporated San Luis Obispo County. Figure 1 shows that, after the first year,
the unincorporated San Luis Obispo County CCE program’s rates are expected to also be
roughly the same/lower than PG&E’s rates, with the exception of a three-year period from 2025
through 2027 where the rates are projected to exceed PG&E’s rates, and then dip back down
below PG&E rates for the remaining years. This three-year anomaly is due to the anticipated
closure of the Diablo Canyon Power Plant, which is expected to temporarily lower PG&E’s rates
due to PG&E’s plans to replace Diablo Canyon’s output with low-cost energy efficiency rather
than new generation.
Figure 1. CCE versus PG&E Rate Comparison, Unincorporated San Luis Obispo County Middle of the
Road (50% Renewable)
Scenario
It is worth noting that the Tri-County feasibility study evaluates the feasibility of forming a new
CCE program run by one or multiple local governments in the Tri-County Region. The study did
not consider the viability of one or more jurisdictions joining an existing CCE program, which is
a potential option for the City of San Luis Obispo.
Packet Pg 13
1
Tri-County Study – Current Status
At this point, the County of San Luis Obispo, County of Ventura, and the other core jurisdictions
are no longer involved in the Tri-County study. The study is still moving forward (scope has
been adjusted, new consultants have been hired) and continues to be led by County of Santa
Barbara staff, but with the withdrawal of the jurisdictions noted above, the study’s scope is now
limited to assessing the feasibility of a CCE program within Unincorporated Santa Barbara
County and the City of Santa Barbara and is now being performed by Pacific Energy Advisors.
The County of Santa Barbara Board has also directed their staff to look into the possibility of
joining the two nearby in-development CCE programs (Monterey Bay Community Power for the
portion of the County in PG&E territory and Los Angeles Community Choice Energy for the
portion within SCE territory).
City Staff have been in communication with the County of Santa Barbara staff leading the Tri-
County effort. Dependent upon the results of the new feasibility study there may be an
opportunity for the City of San Luis Obispo and other local jurisdictions to join with Santa
Barbara to form a Joint Powers Authority for a CCE program. Upon direction from the City
Council, staff can continue to work with County of Santa Barbara staff to monitor the feasibility
study and discuss the City’s involvement.
2. Intra-County Feasibility Study
While the Tri-County Feasibility Study was underway, the City of San Luis Obispo worked in
parallel to analyze the feasibility of an intra-county CCE. On July 14, 2015 the City of San Luis
Obispo invited the County of San Luis Obispo to participate in an intra-county “initial feasibility
study” for a CCE program within the County of San Luis Obispo. Each of the other six
incorporated cities in the county were invited to participate, but none chose to do so. The initial
feasibility study was offered at no cost and has been completed by Pilot Power Group using an
analysis of regional energy use data from PG&E. The final report is provided as Attachment F.
The initial feasibility study provides a high-level assessment of the likelihood that a new CCE
program in San Luis Obispo would be able to maintain rate competitiveness and generate
revenue in excess of program costs. The study includes three geographic participation options
(County of San Luis Obispo only, City of San Luis Obispo only, and combined County and City
of San Luis Obispo) and two scenarios. Scenario 1 assumes the CCE program would operate
with the minimum amount of renewable energy needed to remain compliant with state
requirements – essentially the CCE would have the same renewable portfolio as PG&E in this
scenario. Scenario 2 assumes the CCE program would include 50% renewable energy in its
portfolio.
In all three geographic participation options and both scenarios, the study finds with high
probability that a new CCE program would be able to cover its costs, generate net revenue, and
maintain rate competitiveness. A summary of the results of the study is provided in the table
below. As an example, the table shows that a “City only” CCE (dark blue column) providing
50% renewable energy (Scenario 2) would have 65% probability of generating revenue in excess
of expenditures in the first year of operation (2018). Based on the assumptions of the study, the
Packet Pg 14
1
expected net revenue in year one would be $853,189. The simulations run as part of this study
showed that 46.63% of the time, the model produced a net revenue amount that was equal to or
exceeded the expected net revenue of $853,189.
In concluding that conditions are favorable to create a CCE program in San Luis Obispo, the
initial feasibility study findings generally confirm the findings of the MRW peer review of the
Tri-County Feasibility Study, noted above, which are that a City only option or combination of
jurisdictions with PG&E service area are likely financially viable.
It is important to note, however, that given the pro bono nature of the initial feasibility study, and
the associated limits on its scope, these findings should only be used to indicate initial feasibility.
A more in-depth, full feasibility analysis is the next step to determine whether a City of San Luis
Obispo led CCE is viable. As part of the Major City Goal, the 2017-2019 Financial Plan
allocated $25,000 to pay for this type of analysis.
Options for Council Consideration
With the results of the Tri-County and Intra County feasibility studies described above, staff
have included two basic options for the City to pursue Community Choice Energy, as provided
below.
1. Form a New CCE Program
Pros: Local control, may include multiple local jurisdictions in our efforts.
Cons: Slower (1 to 2 years), potential additional financial risk to the City, potentially more
expensive and resource intensive.
There are a number of options for forming a new CCE program which , if feasible, could include:
a) the City working to form a local CCE program that only includes the City of San Luis Obispo;
b) the City taking the lead and working with other jurisdictions to establish a larger CCE
program operating together as a joint powers authority; and/or, c) the City continuing to monitor
the Tri-County effort and possibly join Santa Barbara to establish a larger CCE program.
Packet Pg 15
1
Generally, the next step for options a and b, above, would include staff preparing a Request for
Proposals (RFP) to obtain, at a minimum, a consultant to assist in preparation of a full feasibility
study to provide a complete assessment of the viability of a CCE program. A full feasibility
study for the City of San Luis Obispo (and potentially including other jurisdictions) appears to be
a viable option based on the results of the Intra-County initial feasibility study which indicates
potential feasibility across all studied scenarios, as described above.
Cost Examples
Redwood Coast Energy Authority Example. Initial financial and startup costs can be significant.
Recently, new methods have emerged such as the approach used by Redwood Coast Energy
Authority (currently operational CCE) to finance a new CCE program. Their approach included
putting out an RFP in search of an entity, or group of entities, to provide comprehensive services
to support the development, financing, launch and operations of a CCE program with n o upfront
costs paid by Redwood Coast Energy Authority (RCEA). In this approach, the successful bidder
undertakes the development and launch of the program at their own risk and would receive on-
going operations fees after and contingent on the successful launch of the CCE program. If the
City undertook this approach it would essentially mean no costs would be borne by the City until
revenues from the operating CCE program are received.
California Choice Energy Authority Example. Another example of an initial financing approach
is the method proposed by the California Choice Energy Authority – a Joint Powers Authority
(JPA) of the City of Lancaster and the City of San Jacinto which is governed by the Lancaster
City Council with each City joining as an associate member of the JPA. CCEA offers initial
support (as well as continued support) for starting a new CCE. Note: their experience is in
Southern California Edison territory. CCEA offers their services (including use of their
contracted consultants) to help jurisdictions assess feasibility, prepare an implementation plan for
submittal to the California Public Utilities Commission and administrative support to manage
these efforts for a cost of $63,000. The City has currently budgeted $25,000 to support initial
efforts associated with establishing a CCE.
In addition to initial financing, CCEA has a hybrid approach to implementation where
jurisdictions join CCEA to group together and share operational expenses and leverage
economies of scale to help keep costs down, such as the cost of power purchasing, but individual
jurisdictions still operate their own local CCE (i.e. share operational expenses but still keep local
control of CCE revenues). If directed to “form a new CCE” staff will explore this approach
further, however, two initial concerns include 1) CCEA operates in SCE territory and doesn’t
have experience in PG&E territory, and 2) lack of control and the ability to decide key policy
decisions which under CCEA are currently solely governed by the City of Lancaster’s City
Council.
2. Join an Existing Program
Pros: fast (as soon as early 2019), cost effective, low risk to the City.
Cons: less control – City would be one of several votes on the JPA.
Packet Pg 16
1
Monterey Bay Community Power
The Tri-County Feasibility Study and the Intra-County Study did not consider the viability of
joining an existing CCE program, which is a potential option for the City. For a list and details of
operational and in-development CCE’s, see Attachment D. Of the in-development CCE’s,
Monterey Bay Community Power (MBCP) is the only one within PG&E service territory and the
City could pursue joining this effort, or other CCE programs accepting new jurisdictions.
MBCP begins serving customers in 2018 and currently consists of a Joint Powers Authority
between the Counties of Monterey, Santa Cruz, and San Benito. MBCP has already obtained all
the financing and funding needed to operate and is projecting approximately $39 million in net
revenue in its first year of operation (2018, partial year), and approximately $40-50 million in net
revenue in its first full year of operation (2019). The agency has discretion to set its rates to be
identical to PG&E rates with customer credits issued annually or quarterly depending upon
customer class, and their standard electricity portfolio is 100% carbon free by purchasing from
hydroelectricity sources.
Staff have been in preliminary discussion with the Chief Executive Officer of MBCP who has
expressed interest in the City of San Luis Obispo joining MBCP. The cost to join would be
approximately $25,000 to $50,000 to cover consultant costs associated with amending MBCP’s
Implementation Plan and resubmittal to the California Public Utilities Commission for re-
certification.
Other Existing Programs
While MBCP is the only option currently available for the City to join with an existing CCE in
PG&E service territory, several other CCE’s exist. As previously mentioned, the Santa Barbara
County Board of Supervisors recently directed its staff to look into Los Angeles Community
Choice Energy; however, that direction was only for its southern portion that is in SCE territory.
Staff can continue to monitor options available for joining a CCE located outside of PG&E
territory, but there are no clear options currentl y available to join.
3. Discontinue/Pause Pursuit of a CCE
Pros: Potential for new, better, CCE model to emerge.
Cons: Lose greenhouse gas emission reduction potential and economic benefit of CCE, rapidly
changing regulatory environment may preclude future options.
The electricity market and policy environment are rapidly transforming. While CCE programs
have enjoyed tremendous growth over the past couple of years, both in terms of the number of
programs and expansions of existing programs to serve more customers, the IOUs (e.g. PG&E)
have had time to adjust to a more competitive market in a way that poses a greater risk to new
CCE program formation. In addition, significant regulatory and potential legislative changes are
possible in the next couple of years for CCE programs. Two bills were being proposed during the
last legislative session that would have effectively stopped the formation of new CCE programs,
and similar bills may be proposed in the near future.
Packet Pg 17
1
The City Council could choose to discontinue or pause pursuit of a CCE program at this time to
wait and see what happens with the market. However, the City may lose the opportunity of
Community Choice Energy based on shifts at the regulatory level. If the City lost the opportunity
to participate in a CCE, it might be difficult to achieve established net carbon community goals.
This option is not recommended since options exist that may reduce the City’s upfront risk and
costs of launching a CCE program.
COMPARISON OF CCE OPTIONS
Speed Cost Risk Local Control
Regionalism
1
Form a New CCE Program
City of SLO Only Med Low-High
Med/Hig
h High Low
City of SLO + other Jurisdictions Med Low/Med Med Med Med
Monitor/Join Tri-County Effort2 Slow Med Med Med High
Join an Existing Program Fast Low Low Low Low
Discontinue or Pause Pursuit n/a n/a n/a n/a n/a
1 A regional approach (multiple jurisdictions) to reducing Greenhouse Gas Emissions in San Luis Obispo
2 At this time the results of the new study are unknown
QUESTIONS FOR COUNCIL CONSIDERATION AND DIRECTION
Staff has provided the following focused questions to facilitate City Council direction to help
guide the City Council in their deliberations.
Questions for City Council direction
Yes No
A. Pursuit of Community Choice Energy (CCE)
1. Continue pursuit of CCE
2. Pause pursuit of CCE
3. Discontinue pursuit of CCE
B. Form a new Community Choice Energy program?
1. City of San Luis Obispo Only?
2. City of San Luis Obispo and pursue other jurisdictions?
3. Continue to monitor the tri-county effort and possibly join Santa
Barbara?
C. Join an Existing Program?
1. Monterey Bay Community Power or research additional alternatives
outside of PG&E service territory?
Packet Pg 18
1
Questions for City Council direction
D. Evaluation Factors
1. What criterion or set of criteria should be prioritized in evaluating
CCE options?
a. Renewable portfolio
b. Pricing
c. Governance (i.e. local control vs. ease/cost of administration)
d. Risk tolerance
e. Other
Should the City Council direct staff to continue pursuit of Community Choice Energy staff has
provided a summary of next steps by option below:
1. Option B.1 (City of SLO Only): If chosen, staff will prepare a Request for Proposal
(RFP) and seek consultant(s) qualified to move us forward with Community Choice
Energy. Based on existing limited staff resources and funding, staff would seek
consultants who can provide comprehensive services to support development, financing,
launch and operation of a CCE program similar to the Redwood Coast Energy Authority
model described above. The RFP will be reviewed by the City Council for approval prior
to issuance.
2. Option B.2 (City of SLO + other Jurisdictions): If chosen, staff will reach out to other
jurisdictions within San Luis Obispo County as well as jurisdictions in Santa Barbara
County that are within PG&E service territory (e.g. Santa Maria) to assess and encourage
interest in joining the City. Then staff will prepare an RFP as discussed in option #1
above.
3. Option B.3 (Monitor and Possibly Join Santa Barbara): Note: this option could be
combined with options B.1 and 2 above. If chosen, staff would continue to monitor the
Tri-County effort and see what options exist for the City to join Santa Barbara should the
new review find feasibility.
4. Option C (Join an Existing Program): If chosen, staff will continue discussions with
Monterey Bay Community Power and search out opportunities to join other similar
programs by issuing a Request for Information to see if other CCE programs are
interested in allowing the City to join.
ENVIRONMENTAL REVIEW
Direction from the City Council regarding Community Choice Energy does not constitute a
project subject to environmental review under the California Environmental Quality Act (CEQA)
pursuant to CEQA Guidelines Section 15262, as the actions involve only feasibility or planning
studies for possible future actions which the Council has not approved, adopted, or funded and
does not have a legally binding effect on later activities.
Packet Pg 19
1
FISCAL IMPACT
The City Council has budgeted $25,000 for pursuit of Community Choice Energy through the
Climate Action Major City Goal work program. Fiscal impact will be researched in detail and
determined dependent upon Council direction.
ALTERNATIVES
The City Council could choose no options and elect to suspend all efforts to pursue a CCE. This
alternative is not recommended as CCE’s have shown promise in both reducing energy costs and
providing greater renewable energy options to help jurisdictions meet GHG reduction goals.
Attachments:
a - Glossary of Terms
b - December 2013 Council Agenda Report - March 2015 Council Agenda Report - March
2015 Council Resolution
c - County of Santa Barbara Staff Report to Board of Supervisors October 3, 2017
d - Matrix Comparing CCE Programs
e - Tri-County Feasibility Study (Executive Summary)
f - Intra-County Initial Feasibility Study
g - Council Reading File - Full Tri-County Feasibility Study
Packet Pg 20
1
24 October 20, 2017
Glossary of Terms
aMW: Average annual Megawatt. A unit of energy output over a year that is equal to the energy
produced by the continuous operation of one megawatt of capacity over a period of time (8,760
megawatt-hours).
Basis Difference (Natural Gas): The difference between the price of natural gas at the Henry Hub
natural gas distribution point in Erath, Louisiana, which serves as a centr al pricing point for
natural gas futures, and the natural gas price at another hub location (such as for Southern
California).
Buckets: Buckets 1-3 refer to different types of renewable energy contracts according to the
Renewable Portfolio Standards requirements. Bucket 1 are traditional contracts for delivery of
electricity directly from a generator within or immediately connected to California. These are the
most valuable and make up the majority of the RECS that are required for LSEs to be RPS
compliant. Buckets 2 and 3 have different levels of intermediation between the generation and
delivery of the energy from the generating resources.
Bundled Customers: Electricity customers who receive all their services (transmission,
distribution and supply) from the Investor-Owned Utility.
CAISO: The California Independent System Operator. The organization is responsible for
managing the electricity grid and system reliability within the former service territories of the
three California IOUs.
California Energy Commission (CEC): The state regulatory agency with primary responsibility for
enforcing the Renewable Portfolio Standards law as well as a number of other, electric -industry
related rules and policies.
California Public Utilities Commission (CPUC): The state agency with primary responsibility for
regulating IOUs, as well as Direct Access (ESP) and CCE entities.
Capacity Factor: the ratio of an electricity generating resource’s actual output over a period of
time to its potential output if it were possible to operate at full nameplate capacity continuously
over the same period. Intermittent renewable resources, like wind and solar, typically have lower
capacity factors than traditional fossil fuel plants because the wind and sun do not blow or shine
consistently.
Category 1: renewable energy and Renewable Energy Certificates (REC’s) from an RPS eligible
facility that is directly interconnected to the distribution or transmission grid within California
Category 2: renewable energy and REC’s from an RPS eligible facility but cannot be delivered to
a California balancing authority without substituting electricity from another source.
Category 3: procurement of unbundled RECs only or not meeting the conditions of Cat egory 1
and 2.
Category 2 Override: the pro forma model will exchange Category 2 renewables for Category 1
renewables.
Climate Zone: A geographic area with distinct climate patterns necessitating varied energy
demands for heating and cooling.
Coincident Peak: Demand for electricity among a group of customers that coincides with peak
total demand on the system.
Community Choice Aggregation: Method available through California law to allow Cities and
Counties to aggregate their citizens and become their electric generation provider.
Packet Pg 21
1
25 October 20, 2017
Community Choice Energy: A City, County or Joint Powers Agency procuring wholesale power to
supply to retail customers.
Congestion Revenue Rights (CRRs): Financial rights that are allocated to Load Serving Entities to
offset differences between the prices where their generation is located and the price that they
pay to serve their load. These rights may also be bought and sold through an auction process.
CRRs are part of the CAISO market design.
Consumption: The use of energy or the amount of energy consumed by an individual or
organization.
Demand Response (DR): Electric customers who have a contract to modify their electricity usage
in response to requests from a utility or other electric entity. Typically, will be used to lowe r
demand during peak energy periods, but may be used to raise demand during periods of excess
supply.
Direct Access: Large power consumers which have opted to procure their wholesale supply
independently of the IOUs through an Electricity Service Provider.
DWR Bond Charge: an imposed bond charge to recover Department of Water Resources (DWR)
bond costs from bundled customers.
EEI (Edison Electric Institute) Agreement: A commonly used enabling agreement for transacting
in wholesale power markets.
Electric Service Providers (ESP): An alternative to traditional utilities. They provide electric
services to retail customers in electricity markets that have opened their retail electricity markets
to competition. In California the Direct Access program allows large electricity customers to
optout of utility-supplied power in favor of ESP-provided power. However, there is a cap on the
amount of Direct Access load permitted in the state.
Electric Tariffs: The rates and terms applied to customers by electric utilities. Typically have
different tariffs for different classes of customers and possibly for different supply mixes.
Enterprise Model: When a City or County establish a CCE by themselves as an enterprise within
the municipal government.
Federal Tax Incentives: There are two Federal tax incentive programs. The Investment Tax Credit
(ITC) provides payments to solar generators. The Production Tax Credit (PTC) provides payments
to wind generators.
Feed-in Tariff: A tariff that specifies what generators, who are connected to the distribution
system, are paid.
Forward Prices: Prices for contracts that specify a future delivery date for a commodity or other
security. There are active, liquid forward markets for electricity to be delivered at a number of
Western electricity trading hubs, including NP15 which corresponds closely to the price location
which the City of Davis will pay to supply its load.
Implied Heat Rate: A calculation of the day-ahead electric price divided by the day-ahead natural
gas price. Implied heat rate is also known as the ‘break-even natural gas market heat rate,
because only a natural gas generator with an operating heat rate (measure of unit efficiency)
below the implied heat rate value can make money by burning natural gas to generate power.
Natural gas plants with a higher operating heat rate cannot make money at the prevailing
electricity and natural gas prices.
Integrated Resource Plan: A utility's plan for future generation supply needs.
Investor-Owned Utility: For profit regulated utilities. Within California there are three IOUs -
Packet Pg 22
1
26 October 20, 2017
Pacific Gas and Electric, Southern California Edison and San Diego Gas and Electric.
ISDA (International Swaps and Derivatives Association): Popular form of bilateral contract to
facilitate wholesale electricity trading.
Joint Powers Agency (JPA): A legal entity comprising two or more public entities. The JPA
provides a separation of financial and legal responsib ility from its member entities.
Load Data: Detailed information related to energy consumption by an individual, organization,
or community.
Load Forecast: A forecast of expected load over some future time horizon. Short-term load
forecasts are used to determine what supply sources are needed. Longer-term load forecasts are
used for budgeting and long-term resource planning.
Marginal Unit: An additional unit of power generation to what is currently being produced. At
and electric power plant, the cost to produce a marginal unit is used to determine the cost of
increasing power generation at that source.
MRTU: CAISO's Market Redesign and Technology Upgrade. The redesigned, nodal (as opposed to
zonal) market that went live in April of 2009.
Net Energy Metering: The program and rates that pertain to electricity customers who also
generate electricity, typically from rooftop solar panels.
Non-Coincident Peak: Energy demand by a customer during periods that do not coincide with
maximum total system load.
Non-Renewable Power: Electricity generated from non-renewable sources or that does not
come with a Renewable Energy Credit (REC).
NP15: Refers to a wholesale electricity pricing hub - North of Path 15 - which roughly corresponds
to PG&E's service territory. Forward and Day-Ahead power contracts for Northern California
typically provide for delivery at NP15. It is not a single location, but an aggregate based on the
locations of all the generators in the region.
Off Peak: time when demand for electricity is low between the hours of 11:00 pm to 6:59 am
during the week days and 24 hours during the weekends.
On-Bill Repayment (OBR): Allows electric customers to pay for financed improvements such as
energy efficiency measures through monthly payments on their electricity bills.
On-Peak: time when demand for electricity is high between the hours 7:00 am and 10:59 pm
during the weekdays.
Operate on the Margin: Operation of a business or resource at the limit of where it is profitable.
Opt-Out: Community Choice Aggregation is, by law, an opt-out program. Customers within the
borders of a CCE are automatically enrolled within the CCE unless they proactively opt-out of the
program.
Power Charge Indifference Adjustment (PCIA): A charge applied to customers who leave IOU
service to become Direct Access or CCE customers. The charge is meant to compensate the IOU
for costs that it has previously incurred to serve those customers.
PPA (Power Purchase Agreement): The standard term for bilateral supply contracts in the
electricity industry.
Rate Stabilization Fund: an amount allocated into a reserve fund to be utilized to offset higher
potential higher rates during rate setting.
Renewable Energy Credits (RECs): The renewable attributes from RPS-qualified resources which
must be registered and retired to comply with RPS standards.
Packet Pg 23
1
27 October 20, 2017
Resource Adequacy (RA): The requirement that a Load-Serving Entity own or procure sufficient
generating capacity to meet its peak load plus a contingency amount (15 percent in California)
for each month.
RPS (Renewable Portfolio Standards): The state-based requirement to procure a certain
percentage of load from RPS-certified renewable resources.
Scheduling Coordinator: An entity that is approved to interact directly with CAISO to schedule
load and generation. All CAISO participants must be or have an SC.
Scheduling Agent: A person or service that forecasts and monitors short term system load
requirements and meets these demands by scheduling power resource to meet that demand.
Spark Spread: The theoretical grow margin of a gas-fired power plant from selling a unit of
electricity, having bought the fuel required to produce this unit of electricity. All other costs
(capital, operation and maintenance, etc.) must be covered from the spark spread.
Supply Stack: Refers to the generators within a region, stacked up according to their marginal
cost to supply energy. Renewables are on the bottom of the stack and peaking gas generators on
the top. Used to provide insights into how the price of electricity is likely to change as the load
changes.
Total CAISO Load: the total electricity need to procure from the CAISO taking in consideration
for line losses. Line losses is wasted electric energy due to inherent inefficiencies or defects in
the distribution or transmission system.
Total Retail Load: the total electricity consumed by consumers (residential and commercial) in a
given period.
Uncollected Factor: a model parameter allocating a percentage of revenue as uncollectable,
otherwise considered bad debt.
Weather-Adjusted: Normalizing energy use data based on differences in the weather during the
time of use. For instance, energy use is expected to be higher on extremely hot days when air
conditioning is in higher demand than on days with comfortable temperature. Weather
adjustment normalizes for this variation.
Wholesale Power: Large amounts of electricity that are bought and sold by utilities and other
electric companies in bulk at specific trading hubs. Quantities are measured in MWs, and a
standard wholesale contract is for 25 MW for a month during heavy-load or peak hours (7am to
10 pm, Mon-Sat), or light-load or off-peak hours (all the other hours).
Packet Pg 24
1
RESOLUTION NO. 10609 (2015 Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, CONFIRMING CITY OF SAN LUIS OBISPO
PARTICIPATION IN THE EXPLORATION OF COMMUNITY CHOICE
AGGREGATION (CCA)
WHEREAS, the San Luis Obispo City Council is committed to supporting actions that
promote local economic benefit and job creation; and
WHEREAS, the San Luis Obispo City Council is committed to promoting choice and
competition for the benefit of its residents and businesses; and
WHEREAS, the San Luis Obispo City Council is committed to increasing energy
efficiency, and to supporting more broad availability and use of local renewable power sources;
and
WHEREAS, Community Choice Aggregation (CCA) is a program through which an
energy district, represented by participating local governments within its jurisdiction, purchases
electrical power on behalf of its residential and commercial customers; and
WHEREAS, the electric distribution utility is an important partner, responsible for
reliable delivery of power and enhancement and maintenance of grid infrastructure; and
WHEREAS, Community Choice Aggregation, if determined to be technically and
financially feasible, could provide substantial economic and environmental benefits to all
residents and businesses in the City of San Luis Obispo; and
WHEREAS, Community Choice Aggregation provides the opportunity to fund and
implement a wide variety of energy related programs of interest to the community; and
WHEREAS, it is intended for the CCA Exploration Advisory Committee (CEAC), to be
an advisory group comprised of local agency staff, local elected officials or their designees, and
members of the public with expertise in energy, finance, law and /or any other pertinent skills;
with the charge to develop CCA feasibility information and to advise the San Luis Obispo City
Council and participating local agencies; and
WHEREAS, the City of San Luis Obispo's adopted Climate Action Plan states that the
City shall evaluate the feasibility of a regional Community Choice Aggregation program to
procure electricity from renewable resources.
NOW, THEREFORE, BE IT RESOLVED by the San Luis Obispo City Council that:
1. The San Luis Obispo City Council agrees to participate in an inter -
jurisdictional investigation into the feasibility of Community Choice
Aggregation (CCA), through a CCA Exploration Advisory Committee
R 10609
Packet Pg 25
1
Resolution No. 10609 (2015 Series)
Page 2
CEAC), supported by SLO Clean Energy, California Clean Power, or
similar entity, to guide preparation of feasibility information without
obligation of the expenditure of General Funds unless separately
authorized in a future action by the San Luis Obispo City Council.
2. The San Luis Obispo City Council will appoint at least one designee and
an alternate to participate as a member of the CEAC.
City staff is authorized to execute the appropriate documents to allow the
city, CEAC, SLO Clean Energy, California Clean Power, or similar entity,
and its technical consultants to acquire energy usage load data from the
electric distribution utility so it may be analyzed as part of the exploration
process.
4. Adoption of this resolution in no way binds or otherwise obligates the San
Luis Obispo City Council to establish or participate in a Community
Choice Aggregation program.
Upon motion of Council Member Rivoire, seconded by Council Member Christianson, and on the
following roll call vote:
AYES: Council Members Carpenter, Christianson and Rivoire,
Vice Mayor Ashbaugh and Mayor Marx
NOES: None
ABSENT: None
The foregoing resolution was adopted this 31St day of March 2015.
I- 2*
a r Jan M rx
ATTEST:
cony ei, -
City Clerk
Packet Pg 26
1
Resolution No. 10609 (2015 Series)
Page 3
APPROVED AS TO FORM:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this s day of i
Packet Pg 27
1
THIS PAGE IS INTENTIONALLY LEFT BLANK
Packet Pg 28
1
CityofSanLuisObispo, CouncilAgendaReport, MeetingDate, ItemNumber
FROM: Michael Codron, Assistant City Manager
SUBJECT: RESOLUTION SUPPORTING CITY PARTICIPATION IN THE
EXPLORATION OF COMMUNITY CHOICE AGGREGATION ( CCA),
TOGETHER WITH OTHER JURISDICTIONS IN THE REGION.
RECOMMENDATION
Adopt a resolution in support of an inter-jurisdictional investigation into the feasibility of CCA
and to communicate this support to the County Board of Supervisors and the other cities in the
County. There is no obligation to expend City funds or commitment to establish or participate in
a potential future CCA program.
DISCUSSION
Background
In December 2013 City staff presented the City Council with a detailed report to educate the
Council and community about CCA, and identify options available to the City to participate in an
exploration of the feasibility of such a program in the region (Attachment 1, 12-3-13 Council
Agenda Report).1 At this meeting, the Council stopped short of officially endorsing CCA
exploration (because no resolution of support was adopted), but a majority of the Council
expressed sufficient interest that two exploratory steps were taken, as follows:
1. Council Member Christianson was appointed to be the City’s representative on a CCA
Exploration Advisory Committee supported by SLO Clean Energy. Council Member
Ashbaugh was selected to be the alternate; and
2. The City Manager was authorized to allow the release of City power usage data to
facilitate the exploration of feasibility.
Council Member Christianson was able to attend all of the meetings that occurred in 2014 and
has now been replaced on the Committee by Council Member Rivoire.
Current Request
Following the 2014 meetings it has become clear that the next official step is for a lead agency to
step forward and formally organize and fund a feasibility study. For this to happen, it would be
helpful for interested jurisdictions to step forward and declare their support. The Cityof San Luis
Obispo can express its support by passing a resolution similar to the one passed in 2014 by the
City of Morro Bay. The proposed resolution has no funding or other resources attached to it, but
is a clear indication of the City’s formal desire to participate in the exploration process if it
moves forward (Attachment 2).
1 Community Choice Aggregation (CCA) essentially leverages the aggregate buying power of individual customers
in a city or county to secure a different mix of energy sources than the standard investor-owned utility (PG&E).
CCA is often used to secure contracts with energy providers that use alternative power sources such as solar or
wind.
3/31/15
B3
B3-1Packet Pg 29
1
Community Choice Aggregation Resolution Page 2
The proposed action is consistent with the Climate Action Plan (CAP) adopted in August 2012.
A specific implementation item in the CAP calls for the City to: “Evaluate the feasibility of a
regional Community Choice Aggregation program to procure electricity from renewable
resources.”2 The proposed action is one of many steps that the City can take to advance this
action item. Furthermore, the City is a member of the Air Pollution Control District’s
Greenhouse Gas Stakeholder Group, which supports a regional CCA feasibility study.
Should the Council adopt the resolution and direct a letter to be sent to the County and other
cities in the County, staff from Administration will craft that correspondence for the Mayor’s
signature.
Supporting Documentation and Resources
In addition to the information included in Attachment 1, SLO Clean Energy has provided the
following links for those that wish to research the issue more deeply:
1. Introduction to CCA by Geof Syphers, CEO of Sonoma Clean
Power https://www.youtube.com/watch?v=-pQLETdzcy4 (15 Minutes)
2. Recommendations on starting your own CCA from Geof
Syphers https://www.youtube.com/watch?v=queqJZUODB8 (22 Minutes)
3. Videos submitted by community choice leaders at a Business for Clean Energy
Conference in Silicon Valley http://biz4cleanenergy.com/new-energy-choices-silicon-
valley/
CONCURRENCES
The Utilities Department concurs with information included in this report.
FISCAL IMPACT
There is no fiscal impact associated with passing a resolution expressing interest in exploring a
CCA. It is likely that a funding request would be made to the City in the future, should another
jurisdiction take the lead role in the feasibility analysis, however the City makes no
commitments with respect to funding by passing the proposed resolution.
ALTERNATIVES
1. Do not pass a resolution in support of CCA. This alternative is not recommended because
the next steps in learning more about CCA require jurisdictions like the City of San Luis
Obispo to formally express their interest so that a lead agency might step forward to facilitate
the exploration process and feasibility study.
2. Continue consideration to a future meeting. The Council can continue consideration of the
draft resolution if more information is needed. In this case, direction should be provided to
staff to conduct additional research and return to the City Council at a future date.
2 City of San Luis Obispo. Climate Action Plan: Pg.: A-4. 2012
B3-2Packet Pg 30
1
Community Choice Aggregation Resolution Page 3
ATTACHMENTS
1. 12-3-13 Council Agenda Report with background information about CCA
2. Draft resolution expressing the City’s support for participation in an exploration of the
feasibility of CCA
B3-3Packet Pg 31
1
THIS PAGE IS INTENTIONALLY LEFT BLANK
Packet Pg 32
1
ATTACHMENT 1
FROM: Carrie Mattingly, Utilities Director
Prepared By: Ron Munds, Conservation Manager
SUBJECT: COMMUNITY CHOICE AGGREGATION PROGRAMS (RELATED TO
ENERGY GENERATION CHOICES)
RECOMMENDATION
Receive information regarding Community Choice Aggregation Programs.
DISCUSSION
Background
In response to Council direction, the following report gives an overview of Community Choice
Aggregation (CCA). In 2002 the California Legislature passed Assembly Bill 117, which permitted
the creation of CCA programs. Under the legislation, a city, county, or Joint Powers Authority, may
implement a CCA program. A CCA entity is allowed to set rates for its customers and choose the
form of energy generation, enabling communities to choose renewable energy sources rather than
the local utility’s mix of energy sources. CCA essentially leverages the aggregate buying power of
individual customers in a city or county.
Once formed, individual customers within aCCA service area can opt out of the CCA and continue
to receive power from the local (usually investor -owned) utility. Although a CCA contracts for its
own energy supply mixes, the local utility continues to own the electricity distribution infrastructure
and provide electricity transmission, distribution, billing, and related customer services. This means
customers of a CCA continue to pay the same charges for the power transmission and distribution
charges as customers that remain with the utility. The CCA entity must pay the local utility for
services provided to the CCA (such asmeter reading and billing).
In order to form a CCA, the law requires jurisdictions to submit an implementation plan to the
California Public Utilities Commission (CPUC) that provides information on the proposed CCA’s
organizational structure, rate setting procedures, and a description of the financial and technical
capabilities of any third parties that will supply power to the CCA. AB 117 further stipulates that
the CPUC shall ensure that no costs are shifted to the remaining customers of the incumbent utility
as a result of the CCA customers’ departure from the electricity load served by the utility. The
CPUC has instituted a Cost Responsibility Surcharge that CCAs must pay to incumbent utilities
until shifted or “stranded” costs are paid off. The Cost Responsibility Surcharge potentially can
affect the cost-competitiveness of CCAs because a high Cost Responsibility Surcharge must be
recovered in the CCA’s rates. There is only one operating CCA in California, Marin Energy
Authority; the rates in their service area are currently competitive with PG&E’s rates with some
customers paying slightly less and others paying slightly more than PG&E customers.
Meeting Date
Item NumberDec. 3, 2013
SS1
B3-4Packet Pg 33
1
Community Choice Aggregation Page 2
Things to Consider – Potential Advantages of a CCA Program
There are a number of potential benefits to having a public CCA entity provide electrical power
rather than an investor owned utility:
1. Increased Renewable Energy Use: Because a CCA entity can select the type of power it
provides to its customers, it can focus on carbon-free renewable power sources, and reduce
its reliance on generation using fossil fuels such as gas or coal.
2. Local Economic Benefits: If the CCA entity were to focus on local renewable generation
sources, the revenues for electrical service paid by residents in a region would remain in the
area of benefit rather than be paid to the incumbent utility’s investors, thus potentially
creating local jobs and improving the local economy.
3. Local Control: The governing board of the CCA entity would be comprised of local elected
officials, so that residents could more easily influence decisions about the operation and
priorities of the CCA entity.
4. Lower Financing costs: Because public entities are able to finance electrical generation
facilities with tax-exempt bonds and do not have to pay dividends to shareholders, a public
CCA program may, in the long run, be able to provide electrical power at a lower cost than
an investor-owned utility.
5. Increased Customer Choice: A public CCA increases consumer choice, by giving
customers an option of receiving power from the CCA entity or remaining with the
incumbent utility.
6. Influence Conservation Programs: A public CCA could choose to undertake more
aggressive energy conservation programs than the incumbent utility which would provide a
community-wide benefit.
7. Implementation of City Policies: There are General Plan and Climate Action Plan policies
that support use of renewable energy.
8. Provide for Small-Scale Renewables: A CCA can provide a market for small-scale
renewable energy projects such as photovoltaics.
Things to Consider – Potential Issues and Risks of a CCA Program
The risks associated with CCA formation fall into two categories: Pre-formation risks and post-
formation (operational) risks.
Pre-formation Issues - Creating a CCA program will require a number of political, engineering,
legal, and financial steps, including the development of a detailed implementation plan that must be
submitted to and certified by the CPUC. The development work and the preparation of the
implementation plan will require the hiring of expert consultants to perform necessary analysis
including a feasibility study.
B3-5Packet Pg 34
1
Community Choice Aggregation Page 3
The city received correspondence from the SLO Clean Energy coalition which indicated an
opportunity to share costs for a regional CCA feasibility study between San Luis Obispo, Santa
Cruz, Monterey, and San Benito Counties (Attachment, SLO Clean Energy Letter). The costs of the
study and cost allocation are not detailed in the submitted letter although it states a CCA feasibility
study can be over $200,000 for a single county.
Other California counties have completed CCA feasibility studies, including Sonoma County which
estimated the total start-up cost for a CCA in their county to be $1.7 million. Sonoma County’s
study also indicates that $500,000 to $750,000 of the total cost may not be recoverable from CCA
rates once in operation. The non-recoverable costs would include the feasibility study and the
drafting and execution of the necessary formation related agreements ( such as a Joint Powers
Agreement).
Once the decision has been made to initiate a CCA program, the entity will then need to begin
taking steps to commence operations. Depending on how the CCA elects to structure its program,
additional funds will be needed to finance start-up costs which would include but not be limited to
the following:
1. Recruit and hire staff
2. Develop information and outreach materials
3. Establish a customer call center for inquiries
4. Prepare short and long term load forecasts
5. Develop capability or negotiate contracts for operational services ( such as electronic data
interchange with utility, customer bill calculations, schedule coordinator services, etc.)
6. Execute contracts for electric supply; identify generation projects and negotiate participation
7. Obtain financing for program capital requirements
8. Send customer notices and explain opt-out option
9. Submit notification of certification to the CPUC
Post-formation Risks - The predominant cost of service variables and risks that might impact the
CCA’s operational costs are:
1. The Cost Responsibility Surcharge (CRS) will vary year-to-year: The CRS is inversely
related to the prevailing market price of electricity such that if market prices fall, the CRS
will increase. To the extent the CRS increases and CCA program has locked in electricity
prices through long-term contracts, the CCA customers’ total rates will increase.
2. Procurement Risks: This broad category of risks relates to the ability of a CCA to procure
power at reasonable costs, to avoid significant under- or over-procurement, avoid a
supplier’s ability to default on a supply contract at times when energy spot markets are high
forcing the CCA to purchase expensive power, and the future success of the CCA at
renewing power supply agreements.
3. Regulatory Risks: These risks consist of uncertainty in regulatory decisions by the
California Public Utilities Commission that could adversely affect the costs that customers
have to pay to take service from a CCA, such as exit fees paid by customers and bonding
requirements for the CCA.
B3-6Packet Pg 35
1
Community Choice Aggregation Page 4
4. Policy Risks: While all CCA members have a voice on a governing Board, no single city
can control policy. Thus, due to the differing demographic, economic, and business
composition relative to a regional body, the City might find that the interests of its citizens
and businesses are not well served by decisions of the governing Board.
5. Customer Cost Risks: These risks consist of the uncertainty in exit fees, whether the CCA
can continue to “meet or beat” PG&E’s costs of service, how a CCA will handle adding
different types of customers in the future, and the uncertainty in costs that are passed
through directly from the CCA’s power supplier to customers. This also includes the risk
that the CCA may not be willing, or able, to provide low-income customers rates that will be
no higher than PG&E’s.
Community Choice Aggregation Programs in California
CCA Programs have been authorized in California since 2003. The only CCA program currently
operating in California was created in Marin County and began serving customers in May 2010.
However, there are multiple other cities or counties exploring the feasibility and program
requirements of establishing a CCA. The following is a summary and status of programs in
California:
Entity Status Milestones Additional Information
Marin Energy
Authority
Operating Only operational CCA
in California
marinenergyauthority.com
Sonoma Clean Power Initiating Projected to begin
service in January
2014
www.scwa.ca.gov/cca/
Clean Power SF Initiating Working to finalize
implementation plan
cleanpowersf.org
Monterey/Santa Cruz/
San Bonito Counties
Investigating Counties and
interested cities pass
resolution of
participation in May
2013
montereybaycca.org
Yolo County/City of
Davis
Investigating Early stages of
investigation
City-
council.cityofdavis.org
San Diego County Very Early Stages of
Investigation
Exploring funding
sources and other
organizational issues
sandiegoenergydistrict.org
This is not an all-inclusive list; there may be other cities and/or counties investigating the formation
of a CCA.
Next Steps
Should Council be interested in further exploring the formation of a CCA or expressing its support
for such a venture, more fully understanding the exact cost of participating in a feasibility study and
funding sources for such a study will be important. Some other items for consideration would be
B3-7Packet Pg 36
1
Community Choice Aggregation Page 5
any electricity data access restrictions, collective community support for CCA formation, the
current energy mix of PG&E, and a broader study of the successes/challenges experienced by other
cities and/or counties who are doing this or attempted such an action. Exploration of the formation
of a CCA is not currently on the work program of any city department. Undertaking such
exploration would require a very significant commitment of interdepartmental staff resources and
financial resources, not currently contemplated or budgeted. Thus, if the Council is interested in
further studying the formation of a CCA, staff would recommend that Council consider options and
priorities in the context of the City’s existing budget processes, whereby current Major city goal and
work program impacts, workload re-prioritizations, and/or additional staff and financial resource
needs can be evaluated in a comprehensive way.
CONCURRENCES
The Community Development Department concurs with the information provided in this report.
FISCAL IMPACT
The material provided in this report has been presented for information purposes therefore there is
no fiscal impact associated with this report.
ATTACHMENT
1. SLO Clean Energy Letter
CCA (MattinglyMunds)
B3-8Packet Pg 37
1
BOARD OF SUPERVISORS
AGENDA LETTER
Clerk of the Board of Supervisors
105 E. Anapamu Street, Suite 407
Santa Barbara, CA 93101
(805) 568-2240
Agenda Number:
Department Name: Community Services
Department
Department No.: 057
For Agenda Of: October 3, 2017
Placement: Departmental
Estimated Time: 2 hours 30 minutes
Continued Item: No
If Yes, date from: N/A
Vote Required: Majority
TO: Board of Supervisors
FROM: Department
Director(s)
George Chapjian, Community Services Director
(805) 568-2467
Contact Info: Jen Cregar, Project Supervisor, Energy & Sustainability Initiatives
(805) 568-3506
SUBJECT: Community Choice Energy Feasibility Study Results
County Counsel Concurrence Auditor-Controller Concurrence
As to form: Yes As to form: Yes
Other Concurrence: Risk Management
As to form: Yes
Recommended Actions:
That the Board of Supervisors:
A. Receive and file a Technical Feasibility Study on Community Choice Aggregation for the
Central Coast Region (Attachment A; report and study appendices also may be downloaded at
http://www.centralcoastpower.org/resources.nrg);
B. Receive and file a Comparison Matrix of Community Choice Energy Programs (Attachment C);
C. Provide staff with direction regarding community choice energy options as follows:
1. Option 1. Join two existing CCE programs;
2. Option 2. Form a new CCE program;
3. Option 3. Not implement a CCE program at this time and continue to explore additional
CCE-related options for later consideration; or
4. Option 4. Not implement a CCE program at this time and discontinue the County’s
evaluation of CCE.; and
Packet Pg 38
1
Page 2 of 15
Community Choice Energy Feasibility Study Results October 3, 2017
D. Determine that the above recommended actions do not constitute a project subject to
environmental review under the California Environmental Quality Act (CEQA) pursuant to
CEQA Guidelines Section 15262, as the actions involve only feasibility or planning studies for
possible future actions which the Board has not approved, adopted, or funded and does not have
a legally binding effect on later activities, and direct staff to file a Notice of Exemption (NOE)
(Attachment B); or
E. Provide other direction to staff.
Summary Text:
Staff, in collaboration with ten other jurisdictions across the Tri-County Region, has been evaluating the
feasibility of a regional community choice energy (CCE) program for Santa Barbara, San Luis Obispo,
and Ventura Counties. The County of Santa Barbara (“County”) commissioned a feasibility study
(Attachment A) in 2016 to determine whether CCE is a good fit for Santa Barbara County and the Tri-
County Region. The feasibility study and subsequent peer review suggest that a newly created regional
CCE program spanning Santa Barbara, San Luis Obispo, and Ventura Counties is likely not a viable
venture in terms of the CCE program’s ability to provide competitive rates and remain a solvent
organization. The feasibility study similarly found that a stand-alone CCE program for the
unincorporated area of Santa Barbara County also would not produce competitive rates or a long-term
financially viable organization.
The results of the peer review, however, indicate that it may be possible for a local or regional CCE
program operating within Pacific Gas and Electric Company (PG&E) territory, including northern Santa
Barbara County, to offer competitive rates while covering its costs. However, a jurisdiction that offers
CCE service to one residential customer must offer CCE service to all residential customers. This means
that the County cannot operate a CCE program solely within PG&E territory in the northern
unincorporated area of Santa Barbara County. The County must also offer CCE service in the southern
unincorporated area of Santa Barbara County, which is served by Southern California Edison (SCE),
which has lower electricity generation rates than PG&E. The feasibility study and peer review indicate
that a new regional CCE program, under the assumptions used in the feasibility study and peer review, is
not likely to be able to offer competitive rates in SCE territory.
Staff is requesting that the Board consider the following options and provide direction on how to
proceed with CCE:
Option 1. Join two existing CCE programs;
Option 2. Form a new CCE program;
Option 3. Not implement a CCE program at this time and continue to explore additional CCE-
related options for later consideration; or
Option 4. Not implement a CCE program at this time and discontinue the County’s evaluation of
CCE.
No additional funding or changes in staffing levels are requested at this time.
Packet Pg 39
1
Page 3 of 15
Community Choice Energy Feasibility Study Results October 3, 2017
Background:
About Community Choice Energy
CCE, also known as community choice aggregation (CCA), enables local governments to leverage the
purchasing power of their residents, businesses, and governments to purchase or generate power for their
communities. When a CCE program is formed, the CCE provider purchases the electricity—which
typically includes a higher percentage of electricity from renewable resources like wind and solar—and
sets the rates charged to customers. The existing investor-owned utility (IOU)—in our region, PG&E
and SCE—continues to deliver the electricity purchased by the CCE provider over the IOU’s power
lines and provide metering, billing, and other customer service.
Currently, there are nine CCE programs in operation throughout California: five in the San Francisco
Bay Area, one in Humboldt County, and three in the Los Angeles area. The longest-standing CCE
program is MCE Clean Energy, which began operations in Marin County in 2010 and has since grown
to also include parts of Napa, Solano, and Contra Costa Counties. More than 20 jurisdictions are actively
studying or developing CCE programs, with several programs expected to launch in 2018. Attachment C
includes a matrix that compares a potential Central Coast Power regional CCE program with the nine
operational CCE programs and three in-development CCE programs that would share some similarities
to a regional Central Coast Power CCE program. All of the operational and in-development CCE
programs conducted feasibility studies that suggested CCE could be economically viable for their
communities.
Board Action Related to CCE
On May 5, 2015, the Board provided direction to staff to solicit participation from area local
governments in a regional CCE feasibility study and to prepare information on the costs of CCE
exploration. On June 9, 2015, the Board appropriated funds to the Community Services Department to
conduct the initial phase of evaluating the formation of a CCE program (“Phase 1”). Per Board direction,
staff contacted all 27 eligible jurisdictions1 throughout the Tri-County Region in late 2015 to invite them
to participate in a regional CCE feasibility study. Ten jurisdictions, plus the Community Environmental
Council, joined the County to fund the study, the results of which are presented herein. Staff formed an
Advisory Working Group, composed of the contributing counties and cities,2 to help guide and oversee
the feasibility analysis, provide outreach support, and monitor policy and program developments related
to CCE.
The County, with input from the Advisory Working Group, commissioned Willdan Financial Services
(“Willdan”) to complete the CCE feasibility study. The contract with Willdan was approved by the
Board on May 10, 2016, and subsequently extended to allow for the completion of the study presented
herein. The Advisory Working Group selected Willdan to conduct the study, in part, due to its
commitment to providing an impartial assessment and willingness to forego future CCE work in the
region so as to not bias the outcome of the study. Willdan has also completed similar feasibility studies
for the Cities of Lancaster and San Diego. MRW and Associates (“MRW”), who was later hired to
conduct a peer review of Willdan’s feasibility study, also has agreed to the same commitment to
1 Lompoc operates its own municipally owned electric utility and therefore is not eligible to participate in a CCE program.
All other cities and counties in the Tri-County Region are included in the study.
2 For a list of Advisory Working Group members, visit http://centralcoastpower.org/about.nrg#leadership.
Packet Pg 40
1
Page 4 of 15
Community Choice Energy Feasibility Study Results October 3, 2017
impartiality and has performed similar CCE technical evaluations for other local governments, including
Alameda County and the City of San Diego.
Our regional CCE exploration effort is sometimes referred to as “Central Coast Power.” Staff, with input
from the Advisory Working Group, created a website (www.CentralCoastPower.org) to share
information about our local CCE progress.
Feasibility Study Scope
The feasibility study evaluates the feasibility of forming a new CCE program run by one or multiple
local governments in the Tri-County Region. The study did not consider the viability of one or more
jurisdictions joining an existing CCE program.
The study assessed financial feasibility in terms of the ability of a local/regional CCE program to
provide competitive electricity rates while meeting policy goals and covering substantial CCE program
formation costs and ongoing operating expenses over an eleven-year study period (2020-2030).
The Advisory Working Group selected eight participation scenarios to explore the feasibility of different
sizes and configurations for the CCE program and the potential effects of customer demographics. The
eight participation scenarios included in the study are:
1. All Tri-County Region, including all 27 eligible jurisdictions throughout San Luis Obispo, Santa
Barbara, and Ventura Counties
2. Advisory Working Group Jurisdictions, including the 11 jurisdictions that funded the feasibility
study
3. All San Luis Obispo County, including the unincorporated area of the county and its cities
4. Unincorporated San Luis Obispo County
5. All Santa Barbara County, including the unincorporated area of the county and its cities
6. Unincorporated Santa Barbara County
7. All Ventura County, including the unincorporated area of the county and its cities
8. City of Santa Barbara
In addition to the eight participation scenarios, three renewable energy content scenarios were
considered for each participation scenario:
1. Renewable Portfolio Standard (RPS) Equivalent: This scenario assumes that the CCE program
would offer its base electricity product to all customers starting at 33% renewable energy content
in 2020 and ramping up to 50% renewable energy content by 2030 in alignment with the
California RPS.3
2. Middle of the Road: This scenario assumes that the CCE program would offer its base electricity
product to all customers using 50% renewable energy content for the entire study period.
3. Aggressive: This scenario assumes that the CCE program would offer its base electricity product
to all customers using 75% renewable energy content for the entire study period.
3 http://www.cpuc.ca.gov/RPS_Homepage/
Packet Pg 41
1
Page 5 of 15
Community Choice Energy Feasibility Study Results October 3, 2017
For each of the renewable energy content scenarios, 2% of customers were assumed to voluntarily opt
up to a premium 100% renewable energy product. In total, 24 different scenarios were considered (8
participation x 3 renewable energy content scenarios). Twelve of the 24 scenarios include the
unincorporated area of Santa Barbara County. The results for the Advisory Working Group participation
scenario under all three renewable energy content scenarios are presented in the body of the feasibility
study report and in greater detail in Appendix D of the feasibility study report. Results for the remaining
scenarios are included in Appendices C and E-J. Appendix E includes the results for the Unincorporated
Santa Barbara County Scenario. The report and appendices are available at:
http://www.centralcoastpower.org/resources.nrg.
Feasibility Study Peer Review
Evaluating the feasibility of CCE is a difficult, complex, and time-consuming exercise involving
numerous variables and assumptions that are predicated on long-term forecasts of conditions and costs
within a dynamic energy procurement and regulatory landscape. While the existence of nine CCE
programs throughout California provides some verification of proof of concept, the procurement and
management of energy by local governments remains a complicated and multi-faceted venture.
Two IOUs currently serve Santa Barbara County: PG&E in North County and SCE in South County.
While this split IOU situation does not apply to other local governments in the region, each of the eight
participation scenarios that include the unincorporated area of Santa Barbara County is affected by the
presence of both IOUs. There are no other operational CCE programs that span multiple utility service
areas, and there is no way to offer a CCE program for the unincorporated area of Santa Barbara County
without operating in both IOU territories. PG&E and SCE have differing rate structures and actual
customer rates, which present some unique challenges to the CCE program that would need to be
considered when setting electricity rates.
In addition, a potential regional CCE program would be substantially larger in terms of customers
served, the amount of electricity provided, and geographic reach than any of the existing CCE programs
when they launched. While some of the existing CCE programs have grown over time, the absence of a
similar sized start-up CCE model proved to be challenging when conducting a feasibility assessment for
our region.
Willdan completed its preliminary draft feasibility study in May 2017. Given the complexities described
above, staff, with input from the Advisory Working Group, took the additional prudent steps of (1)
contacting existing CCE program staff to gather additional data related to the costs of operating a CCE
program and (2) commissioning MRW to conduct a third-party review of the Willdan draft study.
The purpose of the peer review was to evaluate the assumptions and conclusions of the Willdan draft
study. MRW suggested several revisions to the Willdan draft study and the pro forma upon which the
financial assessment was built to, in the opinion of MRW, improve the reasonableness and efficacy of
the assumptions that underpinned the Willdan draft feasibility study. MRW’s findings and
recommendations along with Willdan’s response to the MRW analysis are included in Appendix L of
the feasibility study report.
Packet Pg 42
1
Page 6 of 15
Community Choice Energy Feasibility Study Results October 3, 2017
Three variables had the largest influence on the Willdan feasibility study and MRW peer review:
1. Cost of Renewable Energy: To forecast renewable energy costs, Willdan relied on the average
prices that PG&E & SCE have paid for renewable energy to comply with the State RPS. Some of
this pricing is based on long-term contracts that the IOUs executed more than a decade ago. By
contrast, MRW relied on renewable energy prices from contracts executed in 2016, which it
believes is more reflective of the marketplace in which the CCE program would procure
renewable energy. MRW’s assumed renewable energy costs were approximately 30 perc ent
lower than those assumed by Willdan and in line with pricing reported by operational CCE
programs. Willdan also did some sensitivity testing of lower renewable energy prices.
2. Escalation of PG&E and SCE Rates: Electricity rates include two primary components: the
charges assessed for the cost of (1) the electricity provided to the customer (“generation charge”)
and (2) the delivery of the electricity over the IOUs’ power lines and related infrastructure
(“delivery charge”). The delivery charge is the same for CCE and non-CCE customers; whereas,
the generation charge can vary between IOUs and CCE providers. Therefore, the rate
competitiveness of a CCE program is dependent, in part, on the behavior of future PG&E and
SCE generation rates against which the CCE generation rates must compete.
Willdan and MRW take different approaches in forecasting future IOU generation rates. Willdan
adjusts PG&E’s and SCE’s rates by 0% – 0.5% annually based on current IOU rates that have
already been approved by the California Public Utilities Commission (CPUC) and market prices
for renewable energy. By contrast, MRW, citing pending rate cases before the CPUC and
accounting for factors other than renewable energy prices, forecasts more robust growth rates for
the IOUs’ generation rates over the study period.
3. Financing: Willdan assumed that the CCE program’s start-up costs (e.g., staff, office, and
consultant costs prior to program launch); working capital equal to five months of operating
expenses; and contributions to a rate stabilization and contingency fund would be financed
through a 30-year bond issuance. According to Willdan, the sheer size of a potential CCE
program serving the Tri-County Region precludes the cost-effective use of other, more
traditional financing models (e.g., General Fund or bank loans) commonly used by smaller
existing CCE programs. MRW noted the use of long-term bond financing was unusual and the
amount financed was high relative to other CCE programs. MRW suggested that it is atypical to
include a fully funded rate stabilization/contingency fund in initial financing. MRW also
highlighted the more common practice by other CCE programs to finance three—rather than
five—months of working capital.
Although not as large of a driver of the feasibility outcome as the items cited above, the Power Cost
Indifference Adjustment (PCIA) exit fee charged to CCE customers by the IOUs affects the
competitiveness of the CCE program’s rates relative to the IOUs’ rates.4 The PCIA fluctuates based on
4 The PCIA is designed to keep remaining IOU customers who do not join a CCE program from having to bear the sunk cost
of contracts the IOUs already signed for customers who no longer will receive electricity bought for them by the IOUs. The
PCIA is intended to not penalize (or reward) remaining IOU customers when CCE customers depart. However, it puts CCE
rates at a disadvantage due to the added charge. Both IOUs and the CCE providers are unhappy with the current PCIA model,
which is under review by the CPUC as part of R.17-06-026 to Review, Revise and Consider Alternatives to the Power
Charge Indifference Adjustment.
Packet Pg 43
1
Page 7 of 15
Community Choice Energy Feasibility Study Results October 3, 2017
current renewable energy market prices and is in part based on confidential pricing paid by the IOUs for
historical power purchases. The market fluctuations and confidential nature of the data make it hard for
CCE programs to predict the impact of the PCIA on CCE rate competitiveness year to year.
Feasibility Study Findings
CCE program feasibility is typically assessed based on (1) the competitiveness of CCE rates against the
existing IOU rates and (2) the long-term financial viability of the enterprise. According to Willdan’s
analysis, none of the 24 scenarios studied—including the County operating its own CCE program in the
unincorporated area of Santa Barbara County—shows a feasible outcome, meaning the CCE rates were
higher than PG&E and/or SCE rates, and the CCE program is predicted to have negative net margins in
most study years (2020-2030). Given the underperformance of the CCE program in terms of being rate
competitive, consistently having negative net margins, and failing to meet the target for working capital,
the CCE program under the assumptions used in Willdan’s analysis is neither reliably solvent nor
financially feasible.
A summary of Willdan’s assessment of how electricity rates, the overall electricity bill, and greenhouse
gas emissions would change for a typical residential customer under the CCE program or existing IOU
for each of the 12 scenarios that include the unincorporated area of Santa Barbara County is shown in
Table 1 below. The rate comparison is for the generation component of the overall electricity rates only;
the delivery rates would stay the same regardless of whether the customer is a CCE or non-CCE
customer. For the Advisory Working Group Middle of the Road (50% Renewable) Scenario, a
typical CCE residential customer in PG&E territory (northern Santa Barbara and San Luis
Obispo Counties) would, on average, experience nearly 30% higher generation rates, resulting in
an extra $16 charge on the customer’s monthly electricity bill. A CCE residential customer in SCE
territory (southern Santa Barbara and Ventura Counties) would, on average, experience 50%
higher generation rates, resulting in an extra $20 on its monthly bill. The rate and bill impact is even
higher (more costly) under the Advisory Working Group Aggressive (75% Renewable) Scenario.
Similarly, the rate and bill delta would be larger for the unincorporated area of Santa Barbara
County for all three renewable energy content scenarios than for the equivalent Advisory
Working Group scenarios. A CCE program serving solely the unincorporated area of Santa Barbara
County would see higher rates because it would have fewer customers over which to spread fixed costs
for common CCE functions such as power procurement and scheduling, legal/regulatory support, and
billing coordination with the IOUs, despite having somewhat lower expenses due to smaller staff size
and lower power costs.
While the CCE Middle of the Road (50% Renewable) and Aggressive (75% Renewable) Scenarios
would lower greenhouse gas emissions relative to PG&E’s and SCE’s electricity portfolios, the RPS
Equivalent Scenario would increase greenhouse gas emissions for all CCE participation scenarios. The
emissions increase is because PG&E and SCE currently have more greenhouse gas-free renewable
energy in their electricity supply portfolios than required by the State RPS, and based on renewable
energy contracts already signed, the IOUs are expected to continue to exceed the RPS requirement until
at least 2020. If the CCE program were to merely meet—rather than exceed—the RPS, the CCE
program would create more greenhouse gas emissions than either IOU in 2020.
Packet Pg 44
1
Page 8 of 15
Community Choice Energy Feasibility Study Results October 3, 2017
Table 1. Willdan Summary of Forecasted Outcomes for a Typical Residential Customer in 2020
Participation
Scenario
Included
Jurisdictions
Renewable
Energy
Content
Pacific Gas & Electric Southern California Edison
Proportional
GHG
Comparison
Generation
Rate
Comparison
(% Increase/
Decrease for
CCA
Customers)
Bill
Comparison
($ Increase/
Decrease for
CCA
Customers)
Generation
Rate
Comparison
(% Increase/
Decrease for
CCA
Customers)
Bill
Comparison
($ Increase/
Decrease for
CCA
Customers)
All Tri-County
Region
All San Luis
Obispo County
All Santa
Barbara County
All Ventura
County
RPS
Equivalent 22% $11.25 41% $14.55 6%
50% 29% $14.62 51% $17.93 -9%
75% 43% $21.72 71% $25.05 -55%
Advisory
Working Group
Jurisdictions
San Luis Obispo
County
Santa Barbara
County
Carpinteria
Santa Barbara
Ventura County
Camarillo
Moorpark
Ojai
Simi Valley
Thousand Oaks
Ventura
RPS
Equivalent 22% $12.21 41% $16.08 6%
50% 29% $15.92 50% $19.79 -9%
75% 43% $23.68 70% $27.64 -55%
All Santa
Barbara County
Buellton
Carpinteria
Goleta
Guadalupe
Santa Barbara
Santa Maria
Solvang
Unincorporated
Santa Barbara
County
RPS
Equivalent 24% $11.15 45% $14.53 7%
50% 31% $14.27 55% $17.69 -9%
75% 45% $20.78 75% $24.22 -55%
Unincorporated
Santa Barbara
County
Unincorporated
Santa Barbara
County
RPS
Equivalent 26% $15.08 47% $19.29 7%
50% 33% $18.97 56% $23.23 -9%
75% 47% $27.11 76% $31.44 -54%
In its peer review, MRW analyzed the feasibility of a CCE program under the Advisory Working Group
Middle of the Road (50% Renewable) Scenario. MRW’s analysis generally assumed lower CCE
program costs and higher IOU rates against which the CCE program would compete, resulting in MRW
showing a smaller delta between the CCE and IOU rates (as compared to Willdan). For the Advisory
Working Group Middle of the Road (50% Renewable) Scenario, MRW’s analysis shows the CCE
program’s rates being higher than the weighted average of the IOUs’ rates for at least the first five or six
years of the CCE program’s operation, as shown in Figure 2.
Packet Pg 45
1
Page 9 of 15
Community Choice Energy Feasibility Study Results October 3, 2017
Figure 2. CCE versus Weighted Average IOU Rate Comparison, Advisory Working Group
Middle of the Road (50% Renewable) Scenario
Because of the complications of trying to set CCE rates that can compete in PG&E and SCE territory,
MRW concludes—consistent with Willdan’s findings—that a regional CCE program is not likely to be
able to offer rates that are competitive with SCE for CCE customers located in SCE territory. MRW
suggests, however, that a CCE program may be able to offer competitive rates for CCE customers
located in PG&E territory. To illustrate the potential rate competitiveness in PG&E territory, MRW did
a rate comparison for the unincorporated area of Santa Barbara County.
Figure 3 shows the CCE program’s expected rates (as shown by the stacked bar charts illustrating CCE
costs) compared to the applicable IOU rates (blue line) for the unincorporated area of Santa Barbara
County. After the first year, the CCE rates for the unincorporated area of Santa Barbara County are
projected to be generally comparable to the weighted average of the SCE and PG&E rates. This is
because the unincorporated area of Santa Barbara County has more PG&E than SCE customers; the
PG&E customers consume more electricity than the SCE customers; and PG&E’s generation rates are
higher than SCE’s rates, meaning the CCE rates do not have to be as low to compete with PG&E versus
SCE rates.
Packet Pg 46
1
Page 10 of 15
Community Choice Energy Feasibility Study Results October 3, 2017
Figure 3. CCE versus Weighted Average IOU Rate Comparison, Unincorporated Santa Barbara
County Middle of the Road (50% Renewable) Scenario
Options for Board Consideration
At best, the feasibility study and peer review results suggest a regional CCE program could offer
customers electricity with a higher renewable energy content (at either 50% or 75%) than either PG&E
(43%) or SCE (41%) are expected to offer in 2020, but at higher rates (29% to 70% higher according to
Willdan). At worst, the CCE program could charge higher rates and dissolve within a matter of a few
years due to an inability to cover costs and maintain adequate working capital. In short, the results of the
feasibility study and peer review do not support the creation of a regional CCE program at this time due
to the:
difficulty of maintaining rates that can be competitive, in particular with SCE’s low generation
rates;
uncertainty of a shifting market and policy landscape, especially in light of the California Public
Utilities Commission (CPUC) open proceeding to consider modifications to the PCIA;5 and
IOUs’ historical trends of shifting generation-related costs to the fixed delivery charge paid by
CCE and non-CCE customers, which makes it harder for CCE programs to compete with
decreasing IOU generation rates.6
Thus, staff recommends the County not pursue a regional CCE program at this time.
MRW’s peer review, however, preliminarily suggests that a CCE program may be able to offer
competitive rates for CCE customers located in PG&E territory, including northern Santa Barbara
5 R.17-06-026, Rulemaking to Review, Revise and Consider Alternatives to the Power Charge Indifference Adjustment
6 Analysis conducted by Willdan shows that SCE’s delivery charge (which is the same for CCE and non -CCE customers) for
residential customers from 2014 to 2017 has increased 89%, while the residential generation charge (against which CCE
programs compete) has decreased 13%. Similar trends hold for non-residential customers. Although comparable data is not
available to do as thorough of an analysis for PG&E, according to Willdan, statewide IOU rate trends suggest PG&E has also
shifted costs from the generation charge, against which CCE programs compete, to the delivery charge paid by all customers.
Lancaster Choice Energy also recently filed a protest with the CPUC because of its concerns about SCE’s generation and
delivery charges and the impact on Lancaster Choice Energy’s customers.
Packet Pg 47
1
Page 11 of 15
Community Choice Energy Feasibility Study Results October 3, 2017
County. However, the statute that enables local governments to pursue CCE programs requires that a
jurisdiction that offers CCE service to one residential customer must offer CCE service to all residential
customers.7 This means that the County cannot operate a CCE program solely within PG&E territory in
northern Santa Barbara County. The County must also offer CCE service in southern Santa Barbara
County, which is served by SCE.
Staff presents the following options for your Board’s consideration:
Option 1. Join two existing CCE programs. The feasibility study and peer review did not consider the
viability of the County joining an existing CCE program. County staff has spoken with staff at other
operational and in-development CCE programs to gauge their interest in having Santa Barbara County
join their programs. As mentioned previously, all existing CCE programs have experience with either
PG&E or SCE, but not both. PG&E and SCE have different billing systems, rate structures, and
approaches to coordinating with CCE programs. Therefore, it would be difficult for an existing CCE
program operating (or soon to be operating) in a single IOU territory to absorb Santa Barbara County,
spanning two IOUs. Furthermore, the existing CCAs that staff spoke with prefer to add local
governments that are contiguous (or near contiguous) with their boundaries to maintain a cohesive
community feel.
With these constraints in mind, it may be possible for the County to join two CCE programs: potentially
Monterey Bay Community Power (MBCP)8 for the northern unincorporated part of Santa Barbara
County and, for the southern part, one of the in-development LA area CCE programs, such as Los
Angeles Community Choice Energy (LACCE),9 South Bay Clean Power (SBCP),10 or California Choice
Energy Authority (CCEA).11 Three of the programs (MBCP, LACCE, and CCEA) use a joint powers
authority (JPA) structure; SBCP has not yet been created, and it is not clear if the program will launch.
Both MBCP and LACCE plan to launch in early 2018.
California Choice Energy Authority is operating and offers a new service model created by the City of
Lancaster in which CCEA provides back-office functions, such as power procurement, billing
coordination with SCE, and legal/regulatory support, for a fee to smaller stand-alone CCE programs.
Each of the CCEA member CCE programs are responsible for their own rate-setting, marketing and
outreach, program offerings, and financial and risk management. This fee-for-service model is similar to
the “JPA of JPAs” model supported by SBCP. However, staff does not feel CCEA or related “JPA of
JPA” models are a good fit for the County because the County would continue to be exposed to SCE’s
low generation rates and the ongoing uncertainty of the PCIA and other market/regulatory factors.
A significant complication with joining two existing CCE programs is that Public Utilities Code Section
366.2 (b) requires that a local government that offers CCE to its community must serve 100% of
residential customers. While joining two CCE programs could serve all of the County’s residents, there
may be questions about program timing, such as whether both CCE programs would be required to start
serving all Santa Barbara County residents on the same day and how all residential customers would
7 Public Utilities Code Section 366.2 (b). http://codes.findlaw.com/ca/public-utilities-code/puc-sect-366-2.html. This equal
service provision does not apply to non-residential customers.
8 http://montereybaycca.org/
9 http://green.lacounty.gov/wps/portal/green/lacce
10 https://southbaycleanpower.org/
11 https://californiachoiceenergyauthority.com/
Packet Pg 48
1
Page 12 of 15
Community Choice Energy Feasibility Study Results October 3, 2017
continue to be offered a CCE choice if one or both programs are discontinued. Staff has spoken with
CPUC staff, who have indicated a split-CCE approach like this would require further review with no
guarantees that the CPUC would accept this approach. There is some precedent for how the CPUC may
handle a split-IOU approach under a single CCE program, as Placer County is pursuing a phased launch
across two IOU service areas: PG&E and Liberty Utilities.12 Further study would be needed to
determine whether existing CCE programs would be willing and able to add the County and the
logistical considerations and costs of joining an existing program(s).
Joining other CCE programs would also likely mean joining existing JPAs, the structure and operating
rules of which have already been established. Participating in such a JPA would limit the County’s
control and decision-making authority related to, for example, rates and program design, but could
reduce the County’s costs and risk exposure.
Option 2. Form a new CCE program. Although staff does not recommend it based on the feasibility
study and peer review results, the County could establish a new CCE program. There are two sub-
options for consideration further described below.
Option 2a. Create a CCE program for the unincorporated parts of Santa Barbara County.
If the County were to form a new CCE program serving only the unincorporated areas, the
County would fund the CCE program using an enterprise fund and could house the program
within an existing or new department or division. This would allow the County to retain more
control over program design, costs, and rate-setting than forming a JPA, but it also would mean
the County must fully fund the start-up program and carry all the risk. The County would still
face the hurdle of rate-competitiveness in SCE territory and potentially PG&E territory. If
market and policy dynamics change in the future in support of a regional CCE program, the
County could later pursue a JPA structure to add other interested jurisdictions.
Option 2b. Create a CCE program with one or more jurisdictions. If your Board is interested
in continuing to pursue a regional CCE program and other jurisdictions are also interested, a new
JPA could be formed to administer the regional CCE program.
Option 3. Not implement a CCE program at this time and continue to explore additional CCE-
related options for later consideration. The electricity market and policy environment are rapidly
transforming. While CCE programs have enjoyed tremendous growth over the past couple of years, both
in terms of the number of programs and expansions of existing programs to serve more customers, the
IOUs have had time to adjust to a more competitive market in a way that poses a greater risk to new
CCE program formation. Similarly, the CPUC is grappling with how to manage the growth of CCE and
level the playing field for all types of electricity providers. Significant regulatory and potential
legislative changes are expected in the next couple of years for CCE programs. It may benefit the
County to take a “wait and see” approach to let the market stabilize before further considering CCE.
If your Board chooses not to proceed with CCE at this time, staff is prepared—with ongoing funding to
be determined based on your direction for which option to pursue—to continue to work with the
Advisory Working Group and others to pursue other local renewable energy generation (e.g.,
12 The San Joaquin Valley Power Authority pursued CCE across two IOU territories in the mid-2000s, but ultimately the
CCE program did not launch.
Packet Pg 49
1
Page 13 of 15
Community Choice Energy Feasibility Study Results October 3, 2017
aggregation of government accounts); green job creation; and greenhouse gas reduction strategies in
support of the County’s economic and sustainability goals, including its commitment to reduce
countywide greenhouse gas emissions to 15% below 2007 levels by 2020, as called for by the County’s
Energy and Climate Action Plan. Staff can also further study different CCE options, such as limiting
CCE service to residential and government customers or the CCE program providing electricity
produced by its own renewable energy generation projects from the start. Staff could also pursue
legislative options for allowing the County to offer a CCE program for a portion of the unincorporated
county, for example, PG&E’s service area where CCE may be more financially feasible.
Option 4. Not implement a CCE program at this time and discontinue the County’s evaluation of
CCE. Your board may direct staff to discontinue implementation or further exploration of CCE.
Table 2 summarizes the potential benefits and risks of each option.
Table 2. Potential Benefits and Risks of CCE Options
Options Benefits Risks
1. Join 2 Existing CCE
Programs
May ameliorate the
negative impact of SCE’s
lower generation rates on
CCE rates for North
County
May be less time-
consuming than creating a
new program
May lower rates due to
lower start-up and
operational costs
May not require as large
of a financial investment
May allow programs and
electricity products to be
better tailored to North
and South County
Carries greater risk of
CPUC rejecting program
May not find willing host
for both parts of the
county
Dilutes local control
May require more
complex logistical
coordination
May create
customer/brand confusion
Packet Pg 50
1
Page 14 of 15
Community Choice Energy Feasibility Study Results October 3, 2017
Performance Measure:
N/A
Contract Renewals and Performance Outcomes:
N/A
Fiscal and Facilities Impacts:
Budgeted: Yes
Fiscal Analysis:
The Board has authorized ongoing annual funding of $165,000 towards salaries and benefits expenses
for CCE and related programs in the Energy and Sustainability Initiatives Division of the Community
Services Department. In addition, in FY2015-16, the Board authorized $235,000 towards the costs of the
Phase I CCE exploration, including the feasibility study presented today. Approximately $160,000 of the
$235,000 remains.
2. Form a New CCE Program Increases local control
(especially Option 2a) and
may increase accessibility
of customers to decision-
makers
Simplifies and streamlines
decision-making process
(Option 2a) May be less
time-consuming than
forming a JPA
Increases County’s
financial risk exposure
May increase rates and
provide less financial
stability due to smaller,
less diverse customer base,
reduced purchasing power,
and possibly less
advantageous credit terms
Presents fewer resources
due to smaller size
3. Not implement a CCE
program at this time and
continue to explore additional
CCE-related options for later
consideration
May identify other more
cost-effective options for
achieving similar policy
goals
May avoid significant
market and policy risk and
cost
May miss opportunity to
offer CCE to community
4. Not implement a CCE
program at this time and
discontinue the County’s
evaluation of CCE.
May avoid significant
market and policy risk and
cost
Can reallocate funding to
other policy priorities
May miss opportunity to
offer CCE to community
Packet Pg 51
1
Page 15 of 15
Community Choice Energy Feasibility Study Results October 3, 2017
The County also received $327,500 from outside entities to help fund the Phase I costs. Additionally,
over the past two fiscal years, the Board has conditionally appropriated $275,000 and $300,000 for
anticipated Phase 2 and Phase 3 costs, respectively, should your Board direct staff to continue CCE
implementation.
Key_Contract_Risks:
N/A
Staffing Impacts:
No additional staffing requests are being made at this time. However, depending on Board direction,
staff may request additional resources to pursue next steps.
Special Instructions:
Please send one copy of the minute order to Jennifer Cregar.
Attachments:
Attachment A: Technical Feasibility Study on Community Choice Aggregation for the Central Coast
Region (report and study appendices also may be downloaded at
http://www.centralcoastpower.org/resources.nrg)
Attachment B: CEQA NOE
Attachment C: Comparison Matrix of Community Choice Energy Programs
Authored by:
Jennifer Cregar, Project Supervisor, Energy and Sustainability Initiatives
Packet Pg 52
1
Community Choice Energy Program Comparison Matrix
September 2017
Central Coast Power Apple Valley Choice Energy CleanPowerSF Lancaster Choice Energy Marin Clean Energy Peninsula Clean Energy Pico Rivera Innovative
Municipal Energy
Redwood Coast Energy
Authority Silicon Valley Clean Energy Sonoma Clean Power Inland Choice Power Los Angeles Community
Choice Energy
Monterey Bay Community
Power
Milestones
June 2015 - SB County BOS
provided direction and funding for
feasibility study
December 2015 - Advisory Working
Group formed
Summer 2017 - feasibility study and
peer review expected to be
completed
Fall 2017 - CCE votes expected
Spring 2020 - possible launch
2010 - Initial feasibility study
2014-2015 - Updated feasibility
study
September 2016 - Submitted
implementation plan (IP)
November 2016 - IP certified by
CPUC
April 2017 - Launch
May 2004 - SF BOS authorized CCE
program
June 2007 - Draft implementation
plan (IP) approved by SF BOS
March 2010 - Revised IP approved
by SF BOS and submitted to CPUC
May 2010 - CPUC certified IP;
SFPUC & PG&E execute CCA
Service Agreement (later extended
through Dec 2018)
June 2013 - CPUC certified revised
IP
August 2015 - CPUC certified
another revised IP
May 2016 - Phase 1 launch
Nov 2017 - Phase 2 launch
Summer 2019 - Full launch
July 2013 - Initial Phase I feasibility
study completed
Q2 2014 - Phase II feasibility study
completed
May 2014 - Lancaster City Council
authorized CCE program and
approved implementation plan (IP)
October 2014 - CPUC certified IP
March 2015 - CPUC certified
revised IP
May 2015 - Phase 1 launch
Oct 2015 - Remaining residential +
commercial accounts launched
2017 - Launched California Choice
Energy Authority to provide
backend services to other SoCal
CCAs
December 2008 - JPA formed
May 2010 - Phase 1 launch
2011 - Included other accounts in
original member jurisdictions;
added new Marin County cities
2012 - Remaining Marin accounts
started service; Richmond joined;
EE programs launched
2013 - Program launched in
Richmond
2015 - Unincorporated Napa
County and cities of Benicia, El
Cerrito, and San Pablo joined
September 2016 - Additional Napa
and Contra Costa County cities
joined
2018 - Planned addition of
unincorporated Contra Costa
County + 8 cities
December 2014 - Initial CCE
research
September 2015 - Feasiblity study
completed
October 2015 - JPA formed
February 2016 - Deadline for cities
to join JPA
April 2016 - Implementation plan
submitted
October 2016 - Phase 1 launch
April 2017 - Phase 2 launch
October 2017 - Estimated final
phase launch
Mid-2016 - Joined California Choice
Energy Authority to develop
implementation plan and provide
support services
December 2016 - Implementation
plan submitted
September 2017 - Phase 1 (full)
launch
June 2015 - RCEA board approved
CCE implementation
September 2015 - JPA amended for
CCE
October 2016 - Implementation
plan (IP) submitted
January 2017 - IP certified
May 2017 - Full launch
Late 2017 - Ferndale to join (last
city in Humboldt County)
2014 - Initial CCE research
May 2015 - Initial CCE assessment
report
November 2015 - Feasibility study
March 2016 - Formed JPA
April 2016 - Feasibility study
completed
July 2016 - Submitted
implementation plan
April 2017 - Phase 1 launch
July 2017 - Phase 2 (final) launch
2011 - Steering committee formed
to explore CCE; feasibility study
completed
2012 - Original implementation
plan; JPA formed
2013 - Revised implementation
plan submitted and certified; cities
sign on
May 2014 - Phase 1 launch
December 2014 - Phase 2 launch
June 2015 - Cloverdale, Petaluma,
and Rohnert Park joined
June 2017 - Mendocino County,
Fort Bragg, Point Arena, and Willits
joined
November 2016 - Feasibility study
covering tri-COG region completed
Spring 2017 - San Bernardino
County withdrew its interest due
to pressure from anti-CCE group
July 2016 - Feasibility study
completed
September 2016 - LA County BOS
directed staff to proceed and form
a JPA with interested cities
April 2017 - LA County approved
CCE for unincorporated county
January 2018 - Estimated Phase 1
launch
July 2018 - Estimated Phase 2
launch
January 2019 - Estimated Phase 3
launch
2013 - Advisory group formed
Mid-2014 - Study funds raised
May 2016 - Feasibility study
completed
February-April 2017 - JPA formed
August 2017 - Submitted
implementation plan (IP)
March 2018 - Estimated Phase 1
launch
July 2018 - Estimated Phase 2
launch
Current No. Customers Served
Tri-County: ~600,000 accounts
AWG: ~393,000
Unincorporated SB County:
~53,000
~28,000 accounts (July 2017)~76,000 accounts (July 2017);
~360,000 accounts at full launch ~51,000 accounts (July 2017)~256,000 accounts (July 2017)~290,000 accounts (July 2017 ~16,000 accounts (implementation
plan estimate at full launch)~61,000 accounts (July 2017)~210,000 accounts (July 2017)~600,000 accounts (July 2017)~1.3M accounts (feasibility study
estimate at full launch)
Unincorporated county: ~300,000
accounts (feasibility study
estimate)
Uninc. + cities: ~1.5M accounts
(feasibility study estimate at full
launch)
~270,000 accounts (IP estimate at
full launch)
Opt-out Rate
Feasibility study assumed 15% (+ all
Direct Access customers, which
comprise 23.5% of AWG
customers)
Unknown 3.3% (July 2017)6% (October 2016)
16% (Jun 2010, based on initial
participants); decreased to 9% at
most recent program expansion in
Sep 2016
1.8% (July 2017)Unknown 3% (May 2017)< 2% (July 2017)12% (2017)Unknown Unknown IP estimates ~5% (August 2017)
Current Annual Load
Tri-County: ~8,500 GWh
AWG: ~5,900 GWh
Unincorporated SB County: ~1,300
GWh
* Includes non-DA customers only
~220 GWh (2017);
~280 GWh (2018 - 1st full year of
operations)
535 GWh (July 2017); ~3,600 GWh
(full launch)
Peak: 93 MW (July 2017)
~600 GWh (July 2017)
Peak: 123 MW (July 2017)
~2,800 GWh (July 2017)
Peak: 520 MW (July 2017)
~3,600 GWh (July 2017)
Peak: 660 MW (July 2017)
~230 GWh (implementation plan
estimate at full launch)
~730K GWh (implementation plan
estimate at full launch)~3,500 GWh (July 2017)
~2,300 GWh (2016); ~2600 GWh
(June 2017)
Peak: 512 MW (July 2017)
~21,000 GWh (feasibility study
estimate at full launch)
~3,000 GWh (feasibility study
estimate for unincorporated
county)
~2,300 GWh (Phase 1 - March
2018;
Phase 2: ~3,600 GWh (Phase 2 -
July 2018)
Current Financials
For AWG Middle of the Road (50%
Renewable) Scenario, 2020
Net: -$44,000 (feasibility study
estimate)
Revenues: $13.2M (2017 projection
from IP)
Costs: $12.2M (2017 projection
from IP)
Net: $1.0M (2017 projection from
IP)
In process of developing monthly
financial statements; will also be
included in annual CAFRs for SFPUC
(July 2017)
Revenues: $23.4M (2016)
Revenues: $44.1M ( March 2016)
Costs: $14.6M (March 2016)
Net: $29.5M (March 2016)
Net position: $18M (FY16-17);
projected $33M (FY1718)
Revenues: $12.5M (2018
projection from IP)
Costs: $$12.1M (2018 projection
from IP)
Net: $$460,000 (2018 projection
rom IP)
Unknown Net position: $6.7M (June 2017);
$31.1M (2018 projection from IP)
Revenues: $69.6M (June 2017)
Costs: $15.9M (June 2017)
Net: $53.7M (June 2017)
Unknown Unknown
Revenues: $173M (2018 projection
from IP)
Costs: $134M (2018 projection
from IP)
Net: $39M (2018 projection from
IP)
Rollout Strategy
Phase 1: Large commercial
accounts
Phase 2: Small and medium
commercial accounts
Phase 3: Residential, outdoor
lighting, and traffic control
accounts
No phasing - all customers served
on Day 1
Phase 1: Sample of residential and
commercial accounts
Phase 1: Municipal + sample of
residential and commercial
accounts
Phase 2: Remaining
Phase 1: Municipal + sample of
residential and C&I accounts
comprising 20% of load
Phase 2: Another 20% of
residential and C&I accounts
Phase 3: Remaining accounts in
Marin Couny
Phase 4: Richmond accounts
Phase 5: Unincorporated Napa
County accounts
Phase 6: San Pablo, Benicia, and El
Cerrito accounts
Phase 7: American Canyon,
Calistoga, Lafayette, Napa, St.
Helena, Walnut Creek, and
Yountville accounts
Phase 1: Municipal +
small/medium commercial + 20%
of residential + early adopters
Phase 2: Large C&I + 35% of
residential
Phase 3: Agricultural + street
lighting + remaining residential
Phase 4: Remaining (if needed)
No phasing - all customers served
on Day 1
No phasing - all customers served
on Day 1
Phase 1: Municipal +
small/medium commercial + 20%
of residential accounts
Phase 2: All remaining accounts
Note: IP originally called for 3
phases with option for 4th phase;
Board voted to collapse into 2
phases
Phase 1: Sample of residential and
most commercial accounts
Phase 2: Remaining accounts in
initial service territory
Phase 3: Cloverdale, Petaluma, and
Rohner Park accounts
Phase 4: Mendocino County, Fort
Bragg, Point Arena, and Willits
accounts
Phase 1: Municipal accounts + 5%
of commercial accounts
Phase 2: Remaining
Phase 1: LA County municipal
accounts in unincorporated county
Phase 2: Non-residential accounts
Phase 3: Residential accounts
Phase 1: All C&I and agricultural
accounts
Phase 2: All residential accounts
Phase 3: Remaining (if needed)
Post-Launch Governing Body Apple Valley Town Council SFPUC with rate approval by SF
BOS
Lancaster City Council, California
Choice Energy Authority (CCEA) JPA JPA JPA Pico Rivera City Council, California
Choice Energy Authority (CCEA) JPA JPA (existing)JPA JPA JPA JPA JPA
Pre-Launch Coordinating Body
Advisory Working Group comprised
of San Luis Obispo, Santa Barbara,
and Ventura Counties and the cities
of Camarillo, Carpinteria,
Moorpark, Ojai, Santa Barbara, Simi
Valley, Thousand Oaks, and
Ventura
Town of Apple Valley SFPUC City of Lancaster
County of Marin, Marin Municipal
Water District, North Marin Water
District, Berkeley, Emeryville,
Oakland, and Pleasant contributed
to "CCA Demonstration Project"
Later formed Local Government
Task Force
County advisory committee of all
cities and select stakeholders met
for 8 months until JPA was formed
and Board was seated
City of Pico Rivera RCEA Board
CCE Partnership comprised of
Santa Clara County, Cupertino,
Mountain View, and Sunnyvale
later morphed into JPA with all 12
participating jurisdictions
Steering committee of the Sonoma
County Water Agency, city council
members, city managers and staff,
business representatives, activists,
and others
Informal coordination among
Coachella Valley Association of
Governments, San Bernardino
Associated Governments, and
Western Riverside Council of
Governments
Stakeholder advisory group led by
LA County
Santa Cruz County hosts the
Planning and Development
Advisory Committee which is made
up of interested cities and some
local experts
OPERATIONAL IN DEVELOPMENT
Page 1 of 5 Packet Pg 53
1
Community Choice Energy Program Comparison Matrix
September 2017
Central Coast Power Apple Valley Choice Energy CleanPowerSF Lancaster Choice Energy Marin Clean Energy Peninsula Clean Energy Pico Rivera Innovative
Municipal Energy
Redwood Coast Energy
Authority Silicon Valley Clean Energy Sonoma Clean Power Inland Choice Power Los Angeles Community
Choice Energy
Monterey Bay Community
Power
OPERATIONAL IN DEVELOPMENT
Community Advisory Committee No
Not explicity for CPSF, but SFPUC
has an existing Citizens' Advisory
Committee that includes a Power
Subcommittee
No No Yes Unknown
Yes - existing Community Advisory
Committee to also provide
feedback on CCE matters
Unknown
Yes - JPA Agreement includes
requirement for:
- Ratepayer Advisory Committee
to be appointed by board and
comprised of 3 C&I customers and
4 residential customers (1 of whom
must be a tenant)
- Business Operations Committee
to be appointed by board and
comprised of 5 members with
expertise in managmeent,
administration, finance, public
contracts, infrastructure
development, renewable power
generation, power sale and
marketing, and energy
conservation
Unknown Unknown Yes
Original Jurisdictions 1) Apple Valley 1) City and County of San Francisco 1) Lancaster
1) Marin County
2) Belvedere
3) Fairfax
4) Mill Valley
5) San Anselmo
6) San Rafael
7) Sausalito
8) Tiburon
1) San Mateo County
2) Atherton
3) Belmont
4) Brisbane
5) Burlingame
6) Colma
7) Daly City
8) East Palo Alto
9) Foster City
10) Half Moon Bay
11) Hillsborough
12) Menlo Park
13) Millbrae
14) Pacifica
15) Portola Valley
16) Redwood City
17) San Bruno
18) San Carlos
19) San Mateo
20) South San Francisco
21) Woodside
1) Pico Rivera
1) Humboldt County
2) Arcata
3) Blue Lake
4) Eureka
5) Fortuna
6) Rio Dell
7) Trinidad
1) Santa Clara County
2) Campbell
3) Cupertino
4) Gilroy
5) Los Altos
6) Los Altos Hills
7) Los Gatos
8) Monte Sereno
9) Morgan Hill
10) Mountain View
11) Saratoga
12) Sunnyvale
1) Sonoma County
2) Cotati
3) Santa Rosa
4) Sebastopol
5) Sonoma
6) Windsor
1) Riverside County
2) Banning
3) Blythe
4) Calimesa
5) Canyon Lake
6) Catherdral City
7) Coachella
8) Corona
9) Desert Hot Springs
10) Eastvale
11) Hemet
12) Indian Wells
13) Indio
14) Jurupa Valley
15) La Quinta
16) Lake Elsinore
17) Menifee
18) Moreno Valley
19) Murrieta
20) Norco
21) Palm Desert
22) Palm Springs
23) Perris
24) Rancho Mirage
25) Riverside
26) San Jacinto
1) Los Angeles County
1) Monterey County
2) Carmel-By-The-Sea
3) Del Rey Oaks
4) Gonzales
5) Greenfield
6) King City
7) Marina
8) Monterey
9) Pacific Grove
10) Salinas
11) Sand City
12) Seaside
13) Soledad
14) San Benito County
15) Hollister
16) San Juan Bautista
17) Santa Cruz County (lead
agency)
18) Capitola
19) Santa Cruz
20) Scotts Valley
21) Watsonville
Current Jurisdictions 1) Apple Valley 1) City and County of San Francisco
1) Lancaster
Note: CCEA jurisdictions listed
separately
1) Marin County
2) Belvedere
3) Corte Madera
4) Fairfax
5) Larkspur
6) Mill Valley
7) Novato
8) Ross
9) San Anselmo
10) San Rafael
11) Sausalito
12) Tiburon
13) Napa County
14) American Canyon
15) Calistoga
16) Napa
17) St. Helena
18) Yountville
19) Benicia (Solano County)
20) El Cerrito (Contra Costa
County)
21) Richmond (Contra Costa
County)
22) San Pablo (Contra Costa
County)
23) Walnut Creek (Contra Costa
1) San Mateo County
2) Atherton
3) Belmont
4) Brisbane
5) Burlingame
6) Colma
7) Daly City
8) East Palo Alto
9) Foster City
10) Half Moon Bay
11) Hillsborough
12) Menlo Park
13) Millbrae
14) Pacifica
15) Portola Valley
16) Redwood City
17) San Bruno
18) San Carlos
19) San Mateo
20) South San Francisco
21) Woodside
1) Pico Rivera
1) Humboldt County
2) Arcata
3) Blue Lake
4) Eureka
5) Fortuna
6) Rio Dell
7) Trinidad
1) Santa Clara County
2) Campbell
3) Cupertino
4) Gilroy
5) Los Altos
6) Los Altos Hills
7) Los Gatos
8) Monte Sereno
9) Morgan Hill
10) Mountain View
11) Saratoga
12) Sunnyvale
1) Sonoma County
2) Cloverdale
3) Cotati
4) Petaluma
5) Rohnert Park
6) Santa Rosa
7) Sebastopol
8) Sonoma
9) Windsor
10) Mendocino County
11) Fort Bragg
12) Point Arena
13) Willits
It appears Riverside County,
Rancho Mirage, and San Jacinto
will pursue their own CCAs
independent of what the Tri-COG
region chooses. San Bernardino
County is not moving forward.
1) Los Angeles County
2) Calabasas
3) Rolling Hills Estates
4) South Pasadena
5) West Hollywood
1) Monterey County
2) Carmel-By-The-Sea
3) Gonzales
4) Greenfield
5) Marina
6) Monterey
7) Pacific Grove
8) Salinas
9) Sand City
10) Seaside
11) Soledad
12) San Benito County
13) Hollister
14) San Juan Bautista
15) Santa Cruz County (lead
agency)
16) Capitola
17) Santa Cruz
18) Scotts Valley
19) Watsonville
Page 2 of 5 Packet Pg 54
1
Community Choice Energy Program Comparison Matrix
September 2017
Central Coast Power Apple Valley Choice Energy CleanPowerSF Lancaster Choice Energy Marin Clean Energy Peninsula Clean Energy Pico Rivera Innovative
Municipal Energy
Redwood Coast Energy
Authority Silicon Valley Clean Energy Sonoma Clean Power Inland Choice Power Los Angeles Community
Choice Energy
Monterey Bay Community
Power
OPERATIONAL IN DEVELOPMENT
JPA Composition N/A N/A
Spun off California Choice Energy
Authority to provide back-office
services to other cities pursuing
CCE
24 members - 1 per jurisdiction
Nominee and alternate required to
be elected official
22 members - 1 per city + 2 for San
Mateo County
Nominee required to be elected
official; alternate can also be staff
Member of California Choice
Energy Authority
9 members - 1 per jurisdiction +
water district
12 members - 1 member per
jurisdiction
Nominee required to be elected
official; alternate can also be staff
or member of public
2 official JPA members (County +
Water Agency), but all 9 cities sit
on board and have voting
privileges, so 11 participants
overall - currently 1 per
jurisdiction, but allowed to appoint
more than 1 with board approval;
Santa Rosa permitted to have
same number of voting
participants as Sonoma County
Not required to be elected official
Feasibility study evaluates two JPA
options:
1) New tri-COG JPA
2) Separate existing JPAs (1 per
COG)
5 members (as of September 2017)
- 1 member per jurisdiction
Nominee required to be elected
official; alternates (up to 2) can
also be a member of an advisory
body, staff person, or member of
public
11 members - weighted based on
population as follows:
- 1 seat per jurisdiction for
populations of 50K+:
1) Monterey County
2) Santa Cruz County
3) Salinas
4) Santa Cruz
5) Watsonville
- 1 seat per jurisdiction b/c of
large geographic area:
6) San Benito County
- 1 seat shared b/t Santa Cruz
County's small cities:
7a) Scotts Valley
7b) Capitola
- 1 seat shared among Monterey
County's small Peninsula Cities:
8a) Carmel
8b) Monterey
8c) Pacific Grove
JPA Voting Structure N/A N/A N/A
1st Tier: Voting share is split 50/50
as follows:
- Simple Majority (1 vote per
member)
- Load Share (proportional based
on load)
2nd Tier: Special Voting
- 2/3 majority (based on 50/50
split above) required to amend JPA
agreement
1st Tier: Simple Majority (1 vote
per member)
2nd Tier: Load Share (proportional
based on load) + Simple Majority
- 1 vote per member except for
County which must share 1 vote
among its 2 positions
- Can be called by any member on
any vote
3rd Tier: Special Voting
- 2/3 majority required for
involuntary termination of a
member or amendment of the JPA
agreement
- 3/4 majority required for
eminent domain and member $
contributions
N/A
1st Tier: Voting share is weighted
as follows:
- 1/3 Pro Rata Share calculated as
follows: [1/Total # CCE
Participants] x 1/3
- 2/3 Customer Base Share
calculated as follows [# CCE
customers in member's
jurisdiction/Total # of CCE
customers] x 2/3
Only CCE participants may vote on
CCE matters (not all existing RCEA
JPA members are CCE participants).
2nd Tier (applies to all RCEA
members, not just CCE
participants): Special Voting
- 2/3 majority required for
amending the JPA agreement and
allowing members to withdraw
1st Tier: Simple Majority (1 vote
per member)
2nd Tier: Load Share (proportional
based on load)
- Requires 2+ members to call for
this voting process
- Also requires Simply Majority
3rd Tier: Special Voting
- 2/3 majority required to add
members, incur debt, allow
members to withdraw, shorten
notification period for members to
withdraw, involuntarily terminate a
member, or amend the JPA
agreement
1st Tier: Load Share (proportional
based on load)
- If jurisdiction has more than 1
member, jurisdiction gets only 1
weighted vote
2nd Tier: Load Share + Simple
Majority (1 vote per member)
- Can be called by any member on
any vote
3rd Tier: Special Voting
- 2/3 majority required for
removal of Ratepayer Advisory
Committee member, involuntary
termination of a party, or
amending the JPA agreement; can
also require load share vote
- 3/4 majority required for
eminient domain and member $
contributions; can also require load
share vote
Unknown
1st Tier: Simple Majority (1 vote
per member)
2nd Tier: Load Share
- Can be called by 3+ members on
any affirmative 1st Tier vote
3rd Tier: Special Voting
- 2/3 majority required for change
of Treasurer or Auditor, issuing
bonds or other debt, eminent
domain, amending the JPA
agreement, or involuntary
termination of a party
1st Tier: Simple Majority (1 vote
per member, per seat assignments
above)
2nd Tier: Special Voting
- 2/3 majority required for
involuntary termination of a party
or amending the JPA agreement
- 3/4 majority required for
eminent domain and member $
contributions
JPA Entry Requirements N/A N/A N/A
"Initial Participants" must execute
JPA agreement within 6 months of
the 1st two local governments
signing and have lower
requirements:
- Executed JPA agreement
- Ordinance
To join after 1st 6 months, member
agency must submit:
- Executed JPA agreement
- Resolution
- Ordinance
- Membership fee (proportional)
- MCE currently does not
require fee to join
- Agreement to any supplemental
conditions (established by JPA
board)
- Receive affirmative vote of JPA
board
Takes effect when the County of
San Mateo and 2+ municipalities
execute agreement.
To join, member agency must
submit:
- Executed JPA agreement
- Ordinance
N/A
To join, existing RCEA members
must submit:
- Ordinance
Takes effect when 3+ initial
participants execute agreement
To join, member agency must
submit:
- Executed JPA agreement
- Resolution
- Ordinance
- Membership fee (proportional)
- Initial participants share Phase
2 & 3 costs, which must be
provided within 30 days of
agreement execution date
- Agreement to any supplemental
conditions (established by JPA
board)
To join, member agency must
submit:
- Executed JPA agreement
- Resolution
- Ordinance
- Membership fee (proportional)
- Agreement to any supplemental
conditions (established by JPA
board)
- Receive affirmative vote of JPA
board
Unknown
Takes effect when LA County + 1
other entity execute agreement
Other "Initial Participants" must
execute JPA agreement within 6
months of the 1st two local
governments signing and have
lower requirements:
- Executed JPA agreement
- Ordinance
To join after 1st 6 months, member
agency must submit:
- Executed JPA agreement
- Ordinance
- Membership fee (proportional)
- Agreement to any supplemental
conditions (established by JPA
board)
- Receive affirmative vote of JPA
board
Takes effect when 3+ jurisdictions
execute agreement.
To join, member agency must
submit:
- Executed JPA agreement
- Ordinance
- Membership fee (start-up costs
allocated proportionally based on
population for credit guarantee)
JPA Exit Requirements N/A N/A N/A
Minimum 30-day notice prior to
initial program agreement
Subsequent to initial program
agreement, minimum 6-month
notice required with withdrawal to
take effect at beginning of next FY
Liable for applicable costs through
termination date
Minimum 15-day notice prior to
program launch if, after receiving
bids from power suppliers, bids do
not result in:
1) rates equal to or less than
PG&E,
2) GHG emission rates lower than
PG&E, OR
3) renewable energy content
higher than PG&E
Subsequent to program launch,
minimum 6-month notice required
with withdrawal to take effect at
beginning of next FY
30-day notice required if member
seeks to withdraw after an
amendment to the JPA agreement
that the member voted against
Except for the pre-program launch
withdrawal option, liable for
applicable costs through
termination date
N/A
No specific exit requirements for
CCE participants; any member may
withdraw upon receiving 2/3 vote
Minimum 15-day notice prior to
program launch if, after receiving
bids from power suppliers, bids do
not result in:
1) rates equal to or less than
PG&E,
2) GHG emission rates lower than
PG&E, OR
3) renewable energy content
higher than PG&E
Subsequent to program launch,
minimum 6-month notice required
with withdrawal to take effect at
beginning of next FY
Pre-vote notice required if
member seeks to withdraw after
an amendment to the JPA
agreement that the member plans
to vote against
Liable for applicable costs through
termination date, even if withdraw
prior to program launch
Minimum 6-month notice required
with withdrawal to take effect at
beginning of next FY
30-day notice required if member
seeks to withdraw after an
amendment to the JPA agreement
that the member voted against
Liable for applicable costs through
termination date
Unknown
Minimum 6-month notice and
affirmative vote of local
government's governing body
required
Liable for applicable costs through
termination date
Minimum 15-day notice prior to
program launch if, after receiving
bids from power suppliers, bids do
not result in:
1) rates equal to or less than
PG&E,
2) GHG emission rates lower than
PG&E, OR
3) renewable energy content
higher than PG&E
Minimum 6-month notice required
with withdrawal to take effect at
beginning of next FY
30-day notice required if member
seeks to withdraw after an
amendment to the JPA agreement
that the member voted against
Liable for applicable costs through
termination date (for pre-program
launch withdrawal option, only
liable for proportionate credit
guarantee contribution)
Page 3 of 5 Packet Pg 55
1
Community Choice Energy Program Comparison Matrix
September 2017
Central Coast Power Apple Valley Choice Energy CleanPowerSF Lancaster Choice Energy Marin Clean Energy Peninsula Clean Energy Pico Rivera Innovative
Municipal Energy
Redwood Coast Energy
Authority Silicon Valley Clean Energy Sonoma Clean Power Inland Choice Power Los Angeles Community
Choice Energy
Monterey Bay Community
Power
OPERATIONAL IN DEVELOPMENT
JPA Compensation N/A N/A N/A No - but reimbursement policy
may be adopted
No - but reimbursement policy
may be adopted N/A
No - but will reimburse for
documented expenses related to
Board duties
No - but reimbursement policy
may be adopted
No - but reimbursement policy
may be adopted Unknown Unknown No - but reimbursement policy
may be adopted
Implementation model (at launch)
In-house
1) Finance
2) Outreach/marketing
3) Key account management
4) Resource planning
5) Legal/regulatory (with outside
counsel as needed)
Outsourced
1) Customer service/call center
2) Data management/billing
coordination/enrollment
3) Power scheduling
4) Power procurement
5) Legal/regulatory
In-house
1) Resource planning
2) Power procurement
3) Finance
4) Key account management
5) Legal/regulatory
6) Outreach/marketing
Outsourced
1) Power scheduling
2) Customer service/call center
(with expectation to bring in-
house)
3) Data management/billing
coordination/enrollment (with
expectation to bring in-house)
4) DSM program development and
implementation (via SFE and
possibly others)
In-house
1) Finance
2) Outreach/marketing
Outsourced
1) Resource planning
2) Power procurement
3) Power sheduling
4) Customer service/call center
5) Data management/billing
coordination/enrollment
6) Legal/regulatory
7) DSM program development and
implementation
In-house
1) Finance
2) Outreach/marketing
3) Key account management
4) Legal/regulatory
Outsourced
1) Resource planning
2) Power procurement
3) Power scheduling
4) Customer service/call center
5) Data management/billing
coordination/enrollment
In-house
1) Finance
2) Outreach/marketing
3) Key account management
4) Legal/regulatory
5) Resource planning
Outsourced
1) Power procurement
2) Power scheduling
3) Customer service/call center
4) Data management/billing
coordination/enrollment
In-house
1) Finance
2) Outreach/marketing
3) Key account management
4) Legal/regulatory (with outside
counsel as needed)
Outsourced
1) Resource planning
2) Power procurement
3) Power scheduling
4) Customer service/call center
5) Data management/billling
coordination/enrollment
In-house
1) Finance
2) Key account management
3) Resource planning (in
coordination with TEA)
4) Outreach/marketing (in
coordination with LEAN)
Outsourced
1) Power procurement
2) Power scheduling
3) Customer service/call center
4) Data management/billing
coordination/enrollment
5) Outreach/marketing
6) Legal/regulatory
In-house
1) Finance
2) Outreach/marketing
3) Key account management
4) Resource planning
5) Legal/regulatory (with outside
counsel as needed)
Outsourced
1) Customer service/call center
2) Data management/billing
coordination/enrollment
3) Power scheduling
4) Power procurement
5) Legal/regulatory
In-house
1) Finance
2) Outreach/marketing
3) Key account management
4) Legal/regulatory
Outsourced
1) Resource planning (later
brought in house
2) Power procurement (later
brought in house)
3) Power scheduling
4) Customer service/call center
(some brought in house)
5) Data management/billing
coordination/enrollment
Unknown Unknown
In-house
1) Finance
2) Outreach/marketing
3) Key account management
4) Legal/regulatory (with outside
counsel as needed)
5) Resource planning
Outsourced
1) Power procurement
2) Power scheduling
3) Customer service/call center
4) Data management/billing
coordination/enrollment
5) Legal/regulatory
Vendors
Technical: Willdan/EnerNex
Other: LEAN Energy US, MRW &
Associates (peer review)
Power Supply: Shell Energy North
America
Technical: Davis & Associates
Communications, MRW &
Associates, and Pacific Energy
Advisors
Power Scheduling: APX
Power Supply: Calpine,
Constellation, and Iberdrola
Data Management/Call Center:
Calpine Energy Solutions (formerly
Noble Americas)
Other: Willdan/EnerNex (job
creation impact); SF Department of
Environment (DSM)
Technical: Willdan/EnerNex,
Pacific Energy Advisors
Power Supply & Scheduling: Direct
Energy
Data Management/Call Center:
Calpine Energy Solutions (formerly
Noble Americas)
Technical: Navigant Consulting
Power Supply: Shell Energy North
America, G2Energy, Dominoin,
Genpower, Calpine, EDP,
Recurrent, Waste Management,
East Bay MUD, Avangrid, Portland
General Electric, 3 Phases,
SunPower, Powerex, City of Santa
Clara, First Solar, Nextera, SPower,
EDF, Terra Gen, LA County
Sanitation District, WAPA, Exelon,
Energy America, Morgan Stanley
Forecasting: Pacific Energy
Advisors
Data Management/Call Center:
Calpine Energy Solutions (formerly
Noble Americas)
Technical: Pacific Energy Advisers
Marketing: Circlepoint; Green
Ideals
Power Scheduling: Energy America,
ZGlobal
Power Supply: Energy America,
Shell Energy North America,
Exelon, NRG, Mega Renewables,
Wright Solar Park, Silicon Valley
Power, Direct Energy, Buena Vista
Energy, Energy Development &
Construction Corp., Cuyama Solar,
LLC, Morgan Stanley Group
Data Management/Call Center:
Calpine Energy Solutions (formerly
Noble Americas)
Other: MRW & Associates (peer
review); Winston & Strawn (legal);
Troutman Sanders (legal); PIN
Presort (mailing)
California Choice Energy Authority
Strategy: LEAN
Technical: The Energy Authority
Marketing: LEAN
Power Supply & Scheduling: The
Energy Authority
Data Management/Call Center:
Calpine Energy Solutions (formerly
Noble Americas)
Other: Braun Blaising McLaughlin
& Smith (legal/regulatory),
Richards Watson & Gershon
(legal/regulatory)
Technical: Pacific Energy Advisers
Technical: Dalessi Management
Consulting (now Pacific Energy
Advisors)
Power Scheduling: Constellation,
Shell Energy North America
Power Supply: Constellation, NRG,
Direct Energy, ConEdison (finalists
but not clear if contracts were
executed with all)
Data Management/Call Center:
Calpine Energy Solutions (formerly
Noble Americas)
Other: MRW & Associates (peer
review); Troutman Sanders (legal)
Technical: EES Consulting with Bki
Technical: EES Consulting with BKi
Other: Arc Alternatives (peer
review)
Strategy: LEAN
Technical: Pacific Energy Advisors
Marketing: Miller Maxfield
Other: MRW & Associates (peer
review)
Staffing
Tri-County: 57 FTEs (feasibility
study estimate)
AWG: 45 FTEs (feasibility study
estimate)
Unincorporated SB County: 28 FTEs
(feasibility study estimate)
3-5 FTEs (May 2017)10 FTEs (May 2017)3-5 FTEs (May 2017)40-45 FTEs (May 2017)10-15 FTEs (May 2017)3 FTEs expected to start
(September 2017)
3 dedicated FTEs + 4 mostly
dedicated FTEs + interns + 2 FTE
CCE/EE shared Key Account
Managers (May 2017)
12 FTEs (May 2017)15-20 FTEs (May 2017)Unknown Unknown 8 FTEs to launch (Aug 2017)
Funding Sources
Feasibility Study: $220,756
provided by members of AWG
Start Up: Feasibility study suggests
a bond issuance
Feasibility Study: GF
Start Up: ~$2.6M from GF (includes
interest, 5-year repayment term
starting in 2nd year of operations);
Feasibility Study: General Fund
Start Up: ~$12.9M from SF GF
($8.9M for feasibility study, IP, etc.
+ $4M for 2 months working
capital that was subject to internal
0.73% IR)
Feasibility Study: ~$600K (not
confirmed)
Start Up: Combination of financing
($3M line of credit) and negotiated
cash flow agreements with power
service providers (begin payback in
3rd year of operations with 3 years
to pay in full)
Start UP: ~$3.4M
- $110K CEC grant
- $75K BAAQMD grant
- $140K Marin Municipal Water
District contribution
- $10K North Marin Water District
contribution
- $847K Marin County
contribution (including interest-
free loans)
- $750K loan from 3 individuals
($250K each investor @ 5.75% IR,
unsecured)
- $1.45M in bank loans (secured
by Marin County and City of
Fairfax, both of whom earned
interest)
MCE has a $25M line of credit with
River City Bank but has not used it
as of June 2017
Feasibility Study: San Mateo
County provided funding from GF
(from residual revenues of a
previous project)
Start Up: Combination of County
and bank financing, including $12
million loan from Barclay and
nearly $9M from County including
$6M credit guarantee for bank
loan; County loans include interest
Feasibility Study: General Fund
Start Up: General Fund
Feasibility Study: Included in start
up costs fronted by TEA
Start Up: ~$8.2M
- $120K RCEA GF
- $700K Revolving line of credit
wtih 5% interest from county
economic development fund
- Balance vendor financed with
5% interest for power procurement
and operational costs
Feasibility Study: ~$680K split
evenly between the County,
Cupertino, Mountain View, and
Sunnyvale
Start Up: ~$222.7M, of which
$2.0M shared proportionally
among initial participants to JPA
agreement, with repayment within
3 years (codified in agreement); all
debt expected to be repaid by
December 2017
Feasibility Study: $60K funded by
Water Agency
Start Up: $10M funded through 2
separate lines of credit (one for
power procurement-related
expenses and the other for
everything else)
Feasibility Study: Each COG
contributed proportionately
Start Up: ~$20M (feasibility study
estimate)
Feasibility Study: GF, up to $15M
of which the JPA agreement
specifies will be repaid to LA
County
Start Up: ~$43M (feasibility study
estimate)
Feasibility Study: ~$400K from a
combination of grants and private
individual and organization
contributions
Start Up: ~$13M (feasibility study
and IP estimate) secured through 2
loans from River City Bank; IP
states MBCP expects to recover
borrowed costs within 1st year of
operations; JPA agreement
includes provision for Santa Cruz
County to be reimbursed for its
early contributions
Page 4 of 5 Packet Pg 56
1
Community Choice Energy Program Comparison Matrix
September 2017
Central Coast Power Apple Valley Choice Energy CleanPowerSF Lancaster Choice Energy Marin Clean Energy Peninsula Clean Energy Pico Rivera Innovative
Municipal Energy
Redwood Coast Energy
Authority Silicon Valley Clean Energy Sonoma Clean Power Inland Choice Power Los Angeles Community
Choice Energy
Monterey Bay Community
Power
OPERATIONAL IN DEVELOPMENT
Products & Rates
Base - 35% renewable at 3%
discount relative to SCE generation
rate (CARE rate 13% lower)
Premium - 50% renewable at
$2/month premium (residential) or
$0.002/kWh premium (non-
residential)
Base - 40% renewable (Cat 1),
example generation charge slightly
lower than PG&E but total bill
roughly equivalent
Premium - 100% renewable (Cat 1),
base rate + $0.02/kWh; rates and
total bill lower than PG&E 100%
green product
Note: overall 2017 portfolio is 53%
renewable
Base - 35% renewable, example
residential generation charge and
overall monthly bill very slightly
lower (-$1 for resi and -$2.60 for
C&I); designed to be 3% lower than
SCE
Premium - 100% renewable, flat
$10 premium resulting in about
$10 higher monthly bill for
example residential customer
Base - 50% renewable, example
residential generation charge $12
lower than PG&E but total bill
slightly higher (+$2)
Premium 1 - 100% renewable,
example residential generation
charge $7 lower than PG&E but
total bill higher (+$6); 2.6% of sales
in 2016
Premium 2 - 100% local solar,
example residential generation
charge $20 higher than PG&E and
total bill much higher (+$34)
Note: IP noted 25% renewable at
launch; have 626.5 MW of new
generation under contract
Base - 50% renewable and 80%
carbon free at 5% discount below
PG&E generation rate
Premium - 100% renewable and
100% carbon free at $0.01/kWh
premium
Note: One of PCE's new-build
projects is Cuyama (40MW)
Base - 50% renewable at unknown
rate delta (estimated 1-5% savings
in IP)
Premium - 100% renewable at $11
more for residential customers and
$0.01/kWh premium for non-
residential customers
Base - 40% renewable - designed
portfolio to achieve 2.7% rate
savings compared to PG&E's
standard rate
Premium - 100% renewable at
$0.01/kWh premium
Base - 50% RPS-eligible renewable
& 100% carbon free (other 50%
from hydro, as of April 2017) at 1%
below PG&E; example residential
generation charge ~$15 lower than
PG&E and total bill roughly the
same
Premium - 100% renewable and
100% carbon free at <$0.01/kWh
premium; example residential
generation charge ~$11 lower than
PG&E and total bill ~$3 more
Base - 42% RPS-eligible renewable
and 91% carbon free
Premium - 100% renewable & local
to Sonoma County (geothermal)
Note: IP noted 33% RE at launch
and has incrementally increased
since then
Feasibility study evaluates three
renewble content scenarios
(savings shown for year 1):
1) RPS-equivalent - estimated
4.9% rate savings compared to SCE
standard rate
2) 50% renewable - estimated
3.8% rate savings compared to SCE
standard rate; 11.2% rate savings
compared to SCE 50% green power
product
3) 100% renewable - estimated
5.7% rate increase compared to
SCE standard rate; 9.4% rate
savings compared to SCE 100%
green power product
Feasibility study evaluates three
renewable content scenarios
(savings shown for year 1):
1) RPS-equivalent - estimated
5.4% rate savings compared to SCE
standard rate
2) 50% renewable - estimated
4.1% rate savings compared to SCE
standard rate
3) 100% renewable - estimated
6.3% rate increase compared to
SCE standard rate
Board is considering 30-35% RPS-
eligible renewable energy in base
product at launch with the
remaining power coming from
carbon free resources
Board is considering setting rates
exactly equal to PG&E by customer
class and returning any
accumulated revenues above costs
to customers in the form of a
quarterly or year-end bill credit
Rate Setting and Structure
Rates approved by Town Council
Customer classes generally match
SCE's with option to establish
customized tariffs for large C&I
customers (e.g., indexed pricing,
fixed term pricing)
Rates set through public process
overseen by existing Rate Fairness
Board and approved by SFPUC
Board with veto authority by SF
BOS
Customer classes match PG&E's at
launch with flexibility to modify
later
Rates approved by City Council
Adopted simplified (not 1:1) rate
structure/customer class from
beginning
Rates approved by JPA Board
Customer classes generally match
PG&E's
Rates approved by JPA Board
Customer classes generally match
PG&E's with flexibility to modify
Rates approved by City Council
Customer classes generally match
SCE's with option to establish
customized tariffs for large C&I
customers
Rates approved by JPA Board
Customer classes generally match
PG&E's
Rates approved by JPA Board
Customer classes generally match
PG&E's with option to establish
customized tariffs for large C&I
customers (e.g., indexed pricing,
fixed term pricing)
Rates approved by JPA Board
Customer classes generally match
PG&E's with flexibility to modify
(e.g., customerize for C&I
customers)
Unknown Rates to be approved by JPA board
Rates to be approved by JPA board
Customer classes generally match
PG&E's with flexibility to modify
(e.g., customerize for C&I
customers)
Reserve Fund
Reserve Fund: 5 months working
capital
Contingency/Rate Stabilization
Fund: 12% of power costs + 10% of
non-power costs
Reserve Fund: 3% of annual
revenues
Contingency/Rate Stabilization
Fund: Unknown
Reserve Fund: 90 days operating
costs
Contingency/Rate Stabilization
Fund: 15% of annual revenues to
be achieved within 3 years of
completing enrollment
Reserve Fund: Unknown
Contingency/Rate Stabilization
Fund: Unknown
Reserve Fund: 90 days operating
costs
Contingency/Rate Stabilization
Fund: 15 % of annual revenues to
be achieved by March 2019
(subject to ability to maintain
competitive rates)
Reserve Fund: Unknown
Contingency/Rate Stabilization
Fund: 5% of annual gross revenues
Unknown
Reserve Fund: $6M within first
year of operations
Contingency/Rate Stabilization
Fund: Unknown
Reserve Fund: 90 days operating
costs, excluding power costs
Contingency/Rate Stabilization
Fund: Unknown
Reserve Fund: Unknown
Contingency/Rate Stabilization
Fund: Unknown
Unknown Unknown Reserve Fund: ~50% of operating
expenses
Use of Unbundled RECs No Yes - 8% (July 2017)No - exclusively use Cat 1 (CA
bundled) RECs Yes - 8% (July 2017)
Yes - 2017-2026 IRP commits to ≤
3% unbundled RECs in line with
RPS
No Unknown Initially no, but does not appear to
be explicit restriction on Cat 3 RECs
Initially no, but amended
procurement strategy to include
up to 12.5% Cat 3 RECs for 2017-18
due to difficulty securing Category
2 RPS-eligible renewables
Initially yes; sold Cat 3 RECs in 2016
and will only use going forward if
required to suport local RE
programs or protect the value of
CA renewables
Unknown Unknown No
Renewable Energy/Environmental
Goals
Lower GHG emissions and supports
participating local governments'
climate action plans
Prioritizes local and in-state
renewable resources
Unknown Unknown City aims to be zero net energy
community
Base product to be 80% renewable
by 2025; long-term* goal of 100%
renewable energy
75% GHG-free portfolio by 2017;
100% GHG-free portfolio by 2025
("subject to operational
practicalities and product
availability")
25 MW of local solar by 2021
Long-term* goal of offsetting 2% of
annual energy requirements with
DER
Offset 5% of annual capacity
(Resource Adequacy) requirements
through DR by 2026
* Long-term not defined
100% GHG-free portfolio by 2021
100% CA RPS eligible renewable
energy by 2025
20MW of new local power by 2025
Unknown
5% more renewables than PG&E
5% lower GHG intensity than PG&E
100% carbon free
Reduce electricity sales by 0.5% by
2024 through energy efficiency
(incremental to existing PG&E EE
efforts)
Website states SCP is "on track" to
be 50% renewable by 2020 Unknown Unknown Maximize carbon-free resources
DSM Programs Desires to administer/support DSM
programs
Plans to apply for independent
administration
Plans to apply for independent
administration
Withdrew business plan to apply
for independent administration Self administer
Plans to apply for independent
administration; may bring existing
local DSM programs in house
Plans to apply for independent
administration
Does not plan to apply to
administer; RCEA to continue to
administer PG&E-funded programs
with intent to add new programs
Plans to apply for independent
administration; may bring existing
local DSM programs in house
Plans to apply for independent
administration; may bring existing
local DSM programs in house
Unknown Unknown
Do not plan to apply for
independent administration within
the first few years; TBD after that
Opt-out Notice Mechanism Mailer Mailer independent from PG&E
bills Mailer Mailer Mailer - possible bill insert with
PG&E Mailer Mailer Mailer Mailer Unknown Unknown Mailer
Opt-out Fee (after 1st 60 days)Resi- $5; C&I - $25 (proposed)Resi - $5; C&I - $25
Not clear - no mention of fee on
website but IP included an
estimated $75 fee for resi and$100
for C&I
Resi - $5; C&I - $5-25 Resi - $5; C&I - $25 (after 1st year
of service)Unknown No fee
Base product: Resi - $5; C&I - $25
Premium product: Resi - $105;
Small C&I - $125; Large C&I - $25 +
$0.03/kWh (if no notice) or $25 (6-
month notice)
Resi - $5; C&I - $25 Unknown Unknown Resi - $5; C&I - $25 (estimate
included in IP)
Page 5 of 5 Packet Pg 57
1
FINAL REPORT
3H9HFG 2017
ON COMMUNITY CHOICE AGGREGATION
FOR THE CENTRAL COAST REGION
Packet Pg 58
1
Thispageintentionallyleftblank.
Packet Pg 59
1
EXECUTIVE SUMMARY
Packet Pg 60
1
Thispageintentionallyleftblank.
Packet Pg 61
1
Executive Summary
A. Community Choice Aggregation Overview
Community Choice Aggregation (CCA) is a program for local jurisdictions in California to procure
electricity supply for, and develop energy resources to serve, jurisdictional customers. According to the
Local Government Commission,1 the most common reasons for forming a CCA program are to:
Increase use of renewable generation,
Exert control over rate setting,
Stimulate economic growth, and
Lower rates.
When a CCA is formed, the local incumbent electric investor-owned utility (IOU) continues to deliver
power through its transmission and distribution facilities to customers within its service territory. The
IOU also provides monthly customer metering and billing services. The local CCA program procures the
electric commodity and sells it to its customers, with the intent that the electricity is less expensive, more
local, and/or uses more renewable generation than the current utility alternative. The two components,
delivery and generation, already appear separately on customer bills. The incumbent utility continues to
provide billing services, but the CCA’s generation rate replaces the IOU’s generation rate on customer
bills.
Jurisdictions in California have formed CCA programs in efforts to provide constituents the option to be
served with a greater mix of renewable and carbon-free energy generation than is provided by the
incumbent utility. Eight CCA programs are
currently operational in California, with ten more
launching in 2018. At least 17 additional
jurisdictions are exploring and/or are in the
planning stages for CCA.
B. Study Scope and Purpose
This technical feasibility Study for CCA for the
Central Coast Region (Study) was directed by the
Advisory Working Group (AWG), which was
formed by eleven governments in the Santa
Barbara, San Luis Obispo, and Ventura County
(Tri-County) Region. The Advisory Working
Group collectively has named the potential CCA
“Central Coast Power.” The Study’s purpose is to
advise and guide the Tri-County Region in
understanding the feasibility of forming a new CCA
program. This Study considers required startup
and operational processes and evaluates multiple
Ten local governments joined with the County of
Santa Barbara to fund this Study, and the
following jurisdictions formed an Advisory
Working Group in December 2015:
• Unincorporated San Luis Obispo County
• Unincorporated Santa Barbara County, plus:
o City of Carpinteria
o City of Santa Barbara
• Unincorporated Ventura County, plus:
o City of Camarillo
o City of Moorpark
o City of Ojai
o City of Simi Valley
o City of Thousand Oaks
o City of Ventura
Packet Pg 62
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-2
procurement scenarios to determine whether a CCA program in the Tri-County Region is: a) financially
feasible; and b) will meet its stated policy objectives. The Study results do not necessarily apply to one or
more of the Tri-County local governments joining an existing CCA program.
This Study evaluates the financial and economic viability of a CCA by:
xForecasting the CCA electricity demand requirements (load) and potential customers by class;
xEstimating the costs of procuring the necessary electricity supply; and
xProjecting the costs of starting up and administering a CCA program.
The Study also enumerates the potential benefits and associated risks of a CCA program and discusses
implementation requirements.
C. Energy Procurement and Study Scenarios
Energy procurement is complex and the total cost
of procurement is subject to changes in both market
conditions (price) and consumption (volume). Load
Serving Entities (LSEs)—IOUs, CCAs, and Electricity
Service Providers (ESPs)—must manage both load
forecasting and energy procurement with a robust
risk management approach to account for the
dynamic and volatile nature of power markets and
load.
Given the uniqueness of multiple municipalities
partnering to commission this feasibility Study, the Advisory Working Group established eight geographic
participation scenarios. These eight scenarios were selected to explore the feasibility of different sizes and
configurations for the CCA program and the potential effect of customer demographics. Although the
entire Tri-County Region may not ultimately pursue CCA, certain jurisdictions may decide to move
forward with CCA. The eight participation scenarios defined for this Study are:
1.All Tri-County Region
2.AWG Jurisdictions
3.All San Luis Obispo County
4.Unincorporated San Luis Obispo County
5.All Santa Barbara County
6.Unincorporated Santa Barbara County
7.All Ventura County
8.City of Santa Barbara
In addition to the eight participation scenarios, three renewable energy content scenarios were
considered. All scenarios include a customer option to opt-up to a 100% renewable energy product. For
the purposes of this Study, 2% of customers were assumed to opt-up to the 100% renewable option. The
three renewable energy content scenarios are as follows:
Throughout the report, the term LSE is used to
provide illustrative trends that are affecting the
Tri-County Region as a whole, regardless of
whether the electricity is provided by an IOU,
ESP or CCA program. For our purposes, a CCA
program is a subset of the more broad LSE
term.
Packet Pg 63
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-3
xRPS Equivalent: This scenario assumes that Central Coast Power would offer its base electricity
product to all customers starting at 33% renewable content in 2020 and ramping up to 50%
renewable content by 2030 in alignment with the California minimum Renewable Portfolio
Standard (RPS).2
xMiddle of the Road: This scenario assumes that Central Coast Power would offer its base
electricity product to all customers using 50% renewable content for the entire Study period.
xAggressive: This scenario assumes that Central Coast Power would offer its base electricity
product to all customers using 75% renewable content for the entire Study period.
This Study evaluates an eleven-year period from 2020 to 2030, although a potential CCA program could
begin earlier than 2020. Figure ES-1 illustrates how the renewable energy content in the RPS Equivalent
scenario grows over time, and in the other two scenarios remains constant across the Study period. These
three scenarios were chosen to illustrate the relative differences in cost given different levels of renewable
supply content. Actual CCA implementation may choose to follow a progression of increasing renewable
generation over that period based on cost competitiveness. For example, Central Coast Power CCA may
launch in 2020 with 50% renewable content and progress to 75% renewable content by 2030, assuming it
can do so at a cost advantage to the IOUs.
To enhance report readability, the main body of this report presents results for the AWG Jurisdictions
participation scenario, for the RPS Equivalent, Middle of the Road, and Aggressive renewable energy
content scenarios. Detailed results for the other seven participation scenarios are provided in Appendices
C, and E through J.
Figure ES-1 Renewable Energy Content Modeled in this Study
Packet Pg 64
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-4
The fundamental operational role of a CCA is to forecast
customer electricity needs and procure energy and
associated energy related services. Power procurement
consists of forecasting and risk management tasks. Power
procurement planning and day-to-day decision making rely
heavily on short-term and long-term forecasts of consumer
demand for power. The procurement function must also
evaluate and assess the inherent risks associated with demand forecasting and develop appropriate risk
mitigation strategies. Though no one can predict future energy demand with 100% certainty, logical, data-
driven, industry-standard methodologies to forecasting are available to provide a realistic outlook of
energy demand under a variety of future scenarios. Brief discussions covering the forecasts for customer
power demand and power procurement costs are provided in the following segments.
D. Customer Demand
As shown in Figure ES-2, Ventura County is the largest
electricity consumer of the three counties considered in
this Study, followed by Santa Barbara and San Luis Obispo
Counties. Collectively, customers in the incorporated
cities in San Luis Obispo and Ventura Counties consume
more electricity than customers in the unincorporated
county. The reverse is true in Santa Barbara County.
The fundamental operational role of a
CCA is to forecast customer electricity
needs and procure energy and
associated energy related services.
Energy is measured in several units
throughout this study: kilowatt-hours
(kWh), which is the unit used on customer
bills; megawatt-hours (MWh), where 1
MWh equals 1,000 kWh; and gigawatt-
hours (GWh), where 1 GWh equals
1,000 MWh or 1,000,000 kWh.
Packet Pg 65
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-5
Figure ES-2 Annual Demand in Gigawatt-hours (GWh) by County
Figure ES-3 shows the annual electricity consumption for each of the Study’s eight geographic participation
scenarios. The consumption and number of accounts generally mirror each other, with the exception of
unincorporated San Luis Obispo and Santa Barbara Counties.
Packet Pg 66
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-6
Figure ES-3 Annual Demand in GWh for Each Geographic Participation Scenario
Electricity consumption is forecasted to grow moderately over the Study period, however continued
customer adoption of distributed generation (DG) solar photovoltaic (PV) is expected to offset this
growth. DG PV reduces the amount of energy that needs to be provided by the potential CCA. Figure ES
4 illustrates the growth of customer-owned DG PV since the year 2000 and illustrates a forecast for
additional DG PV capacity if this trend continues. Table ES 1 lists the forecasted annual energy
consumption, annual DG PV generation, and the annual net load (consumption-generation) served by the
potential CCA for the AWG Jurisdictions participation scenario. In summary, a Central Coast Power CCA
would likely sell less electricity each year given customer DG PV adoption.
Packet Pg 67
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-7
Figure ES-4 California Solar Initiative Incentivized Customer-Owned Solar Photovoltaic in the Region with
2030 Forecast
Table ES-1 Load, Distributed Generation, and Net Load Forecast, AWG Jurisdictions Participation
Scenarios
Year Annual Energy
Consumption
(MWh)
Annual DG Generation
(MWh)
Annual Net Load
Served by LSE (MWh)
2020 6,698,164 164,987 6,533,177
2021 6,735,965 202,979 6,532,985
2022 6,777,276 244,414 6,532,862
2023 6,811,982 287,988 6,523,995
2024 6,868,761 335,074 6,533,686
2025 6,888,329 381,954 6,506,375
2026 6,930,669 431,948 6,498,721
2027 6,971,608 483,660 6,487,948
2028 7,026,296 538,288 6,488,008
2029 7,047,280 592,489 6,454,791
2030 7,085,173 650,280 6,434,893
Forecast
Packet Pg 68
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-8
As explained in Section II Technical and Financial Analysis, the increasing amount of DG PV also creates
more volatile customer load due to the variable nature of its energy output. Solar generation depends on
solar irradiance, which can fluctuate significantly over very short periods of time (within seconds) due to
weather patterns and resulting cloud cover.
E. Power Procurement Cost Forecasts
CCAs, like all LSEs, satisfy customer demand for electricity by managing a power supply portfolio, a
collection of supply-side resources. For the purposes of this Study, a power supply portfolio is designed
to acquire two distinct commodities: energy, typically measured in MWh, and resource adequacy capacity,
typically measured in megawatts (MW). Energy resources include natural gas generation, RPS compliant
renewable energy generation, energy storage, and California Independent System Operator (CAISO) day-
ahead and real-time market purchases. Resource adequacy is used to make sure there is sufficient capacity
to produce electricity during peak demand periods.
This Study projects decreasing costs for all energy resources considered, except for energy procured in
the CAISO markets, where average pricing remains constant and large fluctuations are due to variability
in renewable generation for both utility scale resources and customer-owned DG PV. Actual CAISO real-
time market prices from January 2014 through October 2016 for the Tri-County Region average around
$36 per megawatt-hour (MWh). However, the range of prices around that mean varied greatly, reaching
a high of $4,377 per MWh during shortages of supply relative to demand, and a low of -$1,277 per MWh—
meaning that CAISO will pay participants to take power—when supply exceeds demand. The high level
of DG PV penetration in California, combined with solar and wind energy’s variable nature, accounts for
much of this market volatility. This Study has modeled renewable resource variability and the CCA’s
associated exposure to CAISO market prices.
Table ES-2 presents the Study forecast for the average annual power procurement cost for the AWG
Jurisdictions participation scenario for the three renewable supply scenarios. As can be seen in these data,
the average cost of power procurement for the CCA rises as more renewable energy content is added
because renewable generation is forecast to be more expensive than alternative non-renewable resources,
despite a slight downward trend in renewable energy prices.
Packet Pg 69
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-9
Table ES-2 Average Annual Power Procurement Costs ($ per MWh), AWG Jurisdictions Scenarios
Year RPS Equivalent Middle of the Road
(50% Renewable)
Aggressive (75%
Renewable)
2020 $67 $74 $87
2021 $66 $74 $85
2022 $66 $74 $85
2023 $66 $72 $85
2024 $66 $72 $84
2025 $66 $71 $84
2026 $67 $70 $84
2027 $68 $70 $84
2028 $68 $69 $83
2029 $68 $69 $82
2030 $68 $69 $81
The total energy requirements served by various power supply options, including PPAs, the CAISO day-
ahead and real-time markets, among others, change depending on scenario, however, the price of each
option does not. This is what would be expected in actuality, as the amount of energy procured by the
CCA would have little to no bearing on the prevailing PPA and market prices on a long-term basis.
In support of the power procurement cost forecast, data from the U.S. Department of Energy’s Energy
Information Administration’s Annual Energy Outlook 2017,3 which provides estimates of renewable
generation costs on a regional basis, were examined. This data is used by utilities, energy consultancies,
and others to help understand current and future energy-related pricing trends and is based on real-world
project construction, financing, ownership, and ongoing operations and maintenance costs. Table ES-3
shows the various costing components for a new solar photovoltaic project and a new wind project,
assuming they are installed on sites where there is no need to work within the constraints imposed by
existing buildings or infrastructure (greenfield projects). This cost data supports all-in pricing at around
$67 per MWh for wind resources and $101 per MWh for solar PV resources.
Packet Pg 70
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-10
Table ES-3 Energy Information Administration Cost Estimates for New Wind and Solar Energy Resources
in California
Description
Wind Farm –
Onshore
Utility-Scale
Photovoltaic
Configuration
100 MW; 56 turbines
at 1.79 MW each
20 MW, Alternating
Current, Fixed Tilt
Installation Type Greenfield Installation
Greenfield
Installation
Total Capacity (MW) 100 20
Capacity Factor (National Average,
Jan. 2016-Apr. 2017) 36.59% 26.76%
Total Project Cost, California-Mexico Region ($ per kW-installed) $2,010 $2,578
Total Project Cost, California-Mexico Region ($) $201,000,000 $51,560,000
Variable O&M ($ per MWh) $ - $ -
Fixed O&M ($ per kW-year) $46.71 $21.66
Weighted Average Cost of Capital (%) 5.50% 5.50%
Debt Finance Term (years) 20 20
Financing Costs per Year ($) $16,819,545 $4,314,506
Fixed O&M Costs per Year ($) $4,671,000 $433,200
Total Project Costs per Year ($) $21,490,545 $4,747,706
Energy Production per Year (MWh) 320,528 46,884
Per Unit Cost ($ per MWh) $67.05 $101.27
Like all energy price forecasts, the one used within the Study—just as those used within other CCA
feasibility studies—may or may not accurately reflect actual future conditions, which are unknown and
not predictable. Various market drivers may change resulting in different outcomes from those assumed
here. The forecast used herein is a reasonable estimate for the purposes of analyzing the feasibility of
CCA within the Tri-County Region, but no warranties as to the accuracy of forecast prices for power
purchase agreements or CAISO market commodities are implied or should be inferred. For example,
large hydroelectric generation resources owned and managed by the IOUs were not significantly utilized
during the recent drought years through 2016. Rainfall in the winter of 2016-2017 filled the hydroelectric
reservoirs, enabling a low cost, carbon-neutral generation resource for the IOUs. Generally speaking, all
other things being equal, increased hydro production will lower IOU generation revenue requirements
and could have a dampening effect on IOU rates, potentially lowering the rates required for the CCA to
be competitive.
F. Greenhouse Gas Emissions Impact
This Study also evaluated the greenhouse gas (GHG) emissions impact of the renewable energy content
of the CCA’s portfolio—including the 100% renewable energy product assumed to be chosen by 2% of
customers—relative to that of the incumbent IOUs, Southern California Edison (SCE) and Pacific Gas and
Electric (PG&E). For the purposes of this comparison, the IOU Base Case assumes the IOUs will progress
from currently published 2020 RPS levels of renewable generation linearly to the 50% RPS goal in 2030.
Although each IOU may elect to exceed RPS requirements as they have in recent history and relative to
2020 requirements, for example PG&E submitted a joint proposal to decommission the El Diablo nuclear
power station and voluntarily reach 55% RPS by 2031,4 neither IOU has publicly stated firm plans to
exceed RPS targets. California is currently considering Senate Bill 100, which would increase the renewable
energy mandate to: 50% by December 31, 2026 and 60% by December 31, 2030.5 Figure ES-5 summarizes
Packet Pg 71
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-11
the GHG impact analysis results for the IOU renewable scenario and three CCA renewable scenarios.
Figure ES-5 GHG Emissions Impact Analysis, AWG Jurisdictions Participation Scenarios
Large hydroelectric generation resources owned and managed by the IOUs do not count towards RPS
goals and were also not significantly utilized during the recent drought years through 2016. Rainfall in the
winter of 2016-2017 filled the hydroelectric reservoirs enabling a low cost, carbon-neutral generation
component for the IOUs. In addition, the pumped hydro energy storage that can balance the variability of
other sources of renewable generation also relies on rain to fill reservoirs. Future rainfall and drought
conditions are unknown, and therefore the future utilization of large hydroelectric generation by the IOUs
cannot be predicted. Additional use of hydro resources or increases to the IOU RPS content would result
in lower GHG emissions for the IOUs, potentially decreasing the additional GHG reduction benefit of the
CCA program.
G. Cost of Service and Financial Pro Forma Analysis
The cost of service analysis relied on traditional utility ratemaking principles and followed an industry
standard methodology for creation of a financial pro forma to forecast the future economic and financial
performance of the CCA program. The Study assessed financial feasibility in terms of the ability of the
CCA program to realistically deliver competitive costs for customers while paying its substantial start-up
Packet Pg 72
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-12
and agency formation costs and ongoing operating expenses.
The first step in the cost of service analysis was developing
the projected CCA program revenue requirement: the
amount of revenue required to cover the costs of the CCA
program, including all operating and non-operating expenses,
debt-service payments, a contingency allotment, a working
capital reserve, and a rate stabilization fund. The revenue
requirement was based on a comprehensive accounting of all
pertinent costs and projections of customer participation;
assumptions and input development are described later in this
report. Cost assumptions relied on historical publicly-available
information, power cost forecasts conducted for this Study,
data provided by PG&E and SCE, and subject matter expertise
gained working with a host of public utilities and similar
organizations. Table ES-4 summarizes the CCA program Test
Year revenue requirements for the AWG Jurisdictions
participation scenarios
Table ES-4 Test Year CCA Revenue Requirements, AWG Jurisdictions Participation Scenarios
CCA program customer participation was assumed to be constant for each participation scenario across
the three renewable energy content scenarios examined. For all scenarios, an opt-out rate of 15% was
used for all rate classes for all years, meaning that 15% of bundled customers by load in each rate class
were assumed to opt out of the CCA program.6 This 15% opt-out rate is in addition to an estimated
23.5% of AWG Jurisdictions scenario load that represents typically large commercial customers who are
RPS Equivalent
Middle of the
Road Aggressive
REVENUE REQUIREMENT
Baseload
Total Operating Expenses Excluding Power Costs 10,146,683$ 10,256,373$ 10,482,215$
Total Non-Operating Expenses 16,959,517 18,158,147 20,239,969
Power Costs 461,419,035 489,933,855 549,930,521
Contingency/Rate Stabilization Fund 54,171,111$ 57,535,423$ 64,613,615$
BASELOAD REVENUE REQUIREMENT 542,696,345$ 575,883,798$ 645,266,320$
Opt-up to 100% RPS
Total Operating Expenses Excluding Power Costs 207,075$ 209,314$ 213,923$
Total Non-Operating Expenses 346,113 370,574 413,061
Power Costs 12,617,576 12,617,576 12,617,576
Contingency/Rate Stabilization Fund 1,105,533$ 1,174,192$ 1,318,645$
OPT-UP TO 100% RPS REVENUE REQUIREMENT 14,276,297$ 14,371,657$ 14,563,205$
TOTAL REVENUE REQUIREMENT 556,972,642$ 590,255,454$ 659,829,525$
AWG Jurisdictions Participation Scenarios
Description
The Test Year is the future
annualized period for which operating
costs are analyzed and rate proxies
established. The Study Test Year is
based on forecasts of CCA operating
conditions for years 2022, 2023, and
2024 and represents a twelve-month
period of normalized operations
selected to evaluate the cost of
service for each customer class and
the adequacy of rate proxies to
provide sufficient revenue.
Packet Pg 73
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-13
likely to remain with their existing Direct Access (DA) ESP. Other CCA feasibility studies have supported
the assertion that opt-out rates, within a reasonable range, have little bearing on CCA feasibility. Figure
ES-6 and Figure ES-7 summarize Test Year customer accounts by rate class and Test Year customer usage
by rate class for the AWG Jurisdictions participation scenarios, respectively. Average CCA Test Year
customer profiles for the three AWG Jurisdictions participation scenarios are provided in Table ES-5.
Figure ES-6 Test Year CCA Customer Accounts, AWG Jurisdictions Participation Scenarios
0
50
100
150
200
250
300
350
400
PG&E Customers, AWG
Jurisdictions Scenarios
SCE Customers, AWG Jurisdictions
Scenarios
Total CCA Customers, AWG
Jurisdictions Scenarios
Thousands Test Year Customer Accounts by Rate Class Traffic Control
Residential CARE
Residential
Lighting
Small Comm
<200kW
Med Comm
200<500kW
Large Comm
500<1,000kW
Very Large Comm
>1,000kW
Agriculture
Packet Pg 74
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-14
Figure ES-7 Test Year CCA Customer Usage, AWG Jurisdictions Participation Scenarios
0
1,000
2,000
3,000
4,000
5,000
6,000
PG&E Customers, AWG
Jurisdictions Scenarios
SCE Customers, AWG
Jurisdictions Scenarios
Total CCA Customers, AWG
Jurisdictions Scenarios
GWH Test Year Customer Energy Usage by Rate Class
Traffic Control
Residential CARE
Residential
Lighting
Small Comm
<200kW
Med Comm
200<500kW
Large Comm
500<1,000kW
Very Large Comm
>1,000kW
Agriculture
Packet Pg 75
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-15
Table ES-5 Test Year CCA Customer Accounts and Usage, AWG Jurisdictions Participation Scenarios
While rate design was not part of the Study scope, based on the detailed pro forma analysis, CCA rate
proxies by customer class by IOU jurisdiction were developed. Rate proxies represent the amount of
revenue by customer class required to make the CCA financially solvent, based on the Test Year. Based
on this analysis, CCA baseline customers would have all-in rate proxies that are higher than both PG&E
and SCE for most rate classes for all participation and renewable energy content scenarios examined.
Table ES-6 through Table ES-8 present the generation rate differences between the CCA and PG&E and
SCE for the AWG Jurisdictions participation scenarios for the RPS Equivalent, Middle of the Road, and
Aggressive renewable energy content scenarios. The generation portion of customers’ bills is the only
cost component for which the CCA competes with the incumbent utilities. Customer billing and delivery
charges (transmission and distribution) are the same for both CCA and IOU bundled customers.
Generation rate comparisons are provided for the first five years of the Study period by rate class.7 The
Accounts Annual Load
Average Monthly
Load
Line Description (MWh) (kWh/Account)
1 BASELOAD
2 Agriculture 6,454 490,772 6,337
3 Very Large Comm >1,000kW 13 718,495 4,673,350
4 Large Comm 500<1,000kW 405 441,022 90,742
5 Med Comm 200<500kW 576 297,829 43,094
6 Small Comm <200kW 40,034 1,124,051 2,340
7 Lighting 1,757 26,357 1,250
8 Residential 256,812 1,709,325 555
9 Residential CARE 22,929 124,036 451
10 Traffic Control 841 2,811 278
11 TOTAL BASELOAD 329,821 4,934,699 1,247
12 OPT-UP TO 100% RPS (MWH)
13 Agriculture - - -
14 Very Large Comm >1,000kW - - -
15 Large Comm 500<1,000kW 9 10,071 90,742
16 Med Comm 200<500kW 29 15,106 43,094
17 Small Comm <200kW 538 15,106 2,340
18 Lighting - - -
19 Residential 9,078 60,425 555
20 Residential CARE - - -
21 Traffic Control - - -
22 TOTAL OPT-UP TO 100% RPS 9,655 100,708 869
23 TOTAL CCA 339,476 5,035,407 1,236
CUSTOMERS OPTING UP TO 100% RENEWABLES Portion of Opt Up Portion of Total CCA
24 Agriculture 0%0.00%
25 Very Large Comm >1,000kW 0%0.00%
26 Large Comm 500<1,000kW 10%0.20%
27 Med Comm 200<500kW 15%0.30%
28 Small Comm <200kW 15%0.30%
29 Lighting 0%0.00%
30 Residential 60%1.20%
31 Residential CARE 0%0.00%
32 Traffic Control 0%0.00%
33 TOTAL 100%2.00%
Test Year
Packet Pg 76
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-16
total anticipated bill impact to residential customers in 2020 is included in Table ES 9.
Table ES-6 Generation Rate Comparisons for PG&E, SCE, and CCA, AWG Jurisdictions RPS Equivalent
Renewable Energy Content Scenario
CCA
Rates
PG&E
Rates
CCA
Rates
PG&E
Rates
CCA
Rates
PG&E
Rates
CCA
Rates
PG&E
Rates
CCA
Rates
PG&E
Rates
Agriculture 0.1175 0.0742 0.1175 0.0753 0.1175 0.0749 0.1175 0.0747 0.1175 0.0754
Commercial/Industrial Small <200kW 0.1183 0.1049 0.1183 0.1065 0.1183 0.1059 0.1183 0.1055 0.1183 0.1065
Commercial/Industrial Medium 200<500 kW 0.1190 0.1097 0.1190 0.1113 0.1190 0.1107 0.1190 0.1103 0.1190 0.1114
Commercial/Industrial Large 500<1000 kW 0.1145 0.1107 0.1145 0.1124 0.1145 0.1118 0.1145 0.1114 0.1145 0.1124
Residential 0.1220 0.1003 0.1220 0.1018 0.1220 0.1013 0.1220 0.1009 0.1220 0.1018
Residential CARE 0.1152 0.0936 0.1152 0.0950 0.1152 0.0945 0.1152 0.0941 0.1152 0.0950
Residential Solar Choice 0.1920 0.1265 0.1920 0.1284 0.1920 0.1277 0.1920 0.1272 0.1920 0.1284
Weighted Average 0.1193 0.0961 0.1193 0.0975 0.1193 0.0970 0.1193 0.0967 0.1193 0.0976
CCA Rate Premium/ (CCA Savings)24.10%22.27%22.92%23.37%22.22%
Rate Class
CCA
Rates SCE Rates
CCA
Rates SCE Rates
CCA
Rates SCE Rates
CCA
Rates SCE Rates
CCA
Rates SCE Rates
Agriculture 0.1050 0.0543 0.1050 0.0551 0.1050 0.0548 0.1050 0.0547 0.1050 0.0552
Commercial/Industrial Small <200kW 0.1072 0.0922 0.1072 0.0936 0.1072 0.0931 0.1072 0.0927 0.1072 0.0936
Commercial/Industrial Medium 200<500 kW 0.1064 0.0837 0.1064 0.0850 0.1064 0.0845 0.1064 0.0842 0.1064 0.0850
Commercial/Industrial Large 500<1000 kW 0.1057 0.0777 0.1057 0.0789 0.1057 0.0785 0.1057 0.0782 0.1057 0.0789
Residential 0.0999 0.0712 0.0999 0.0723 0.0999 0.0719 0.0999 0.0716 0.0999 0.0723
Residential CARE 0.0924 0.0635 0.0924 0.0645 0.0924 0.0641 0.0924 0.0639 0.0924 0.0645
Residential Green Tariff 0.1199 0.1127 0.1199 0.1144 0.1199 0.1138 0.1199 0.1134 0.1199 0.1144
Weighted Average 0.1034 0.0776 0.1034 0.0788 0.1034 0.0784 0.1034 0.0781 0.1034 0.0788
CCA Rate Premium/ (CCA Savings)33.23%31.26%31.97%32.44%31.21%
2026
Rate Class
2022 2023 2024 2025
Packet Pg 77
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-17
Table ES-7 Generation Rate Comparisons for PG&E, SCE, and CCA, AWG Jurisdictions Middle of the Road
Renewable Energy Content Scenario
Table ES-8 Generation Rate Comparisons for PG&E, SCE, and CCA, AWG Jurisdictions Aggressive
Renewable Energy Content Scenario
CCA
Rates
PG&E
Rates
CCA
Rates
PG&E
Rates
CCA
Rates
PG&E
Rates
CCA
Rates
PG&E
Rates
CCA
Rates
PG&E
Rates
Agriculture 0.1242 0.0742 0.1242 0.0753 0.1242 0.0749 0.1242 0.0747 0.1242 0.0754
Commercial/Industrial Small <200kW 0.1250 0.1049 0.1250 0.1065 0.1250 0.1059 0.1250 0.1055 0.1250 0.1065
Commercial/Industrial Medium 200<500 kW 0.1257 0.1097 0.1257 0.1113 0.1257 0.1107 0.1257 0.1103 0.1257 0.1114
Commercial/Industrial Large 500<1000 kW 0.1212 0.1107 0.1212 0.1124 0.1212 0.1118 0.1212 0.1114 0.1212 0.1124
Residential 0.1287 0.1003 0.1287 0.1018 0.1287 0.1013 0.1287 0.1009 0.1287 0.1018
Residential CARE 0.1219 0.0936 0.1219 0.0950 0.1219 0.0945 0.1219 0.0941 0.1219 0.0950
Residential Solar Choice 0.1987 0.1265 0.1987 0.1284 0.1987 0.1277 0.1987 0.1272 0.1987 0.1284
Weighted Average 0.1260 0.0961 0.1260 0.0975 0.1260 0.0970 0.1260 0.0967 0.1260 0.0976
CCA Rate Premium/ (CCA Savings)31.06%29.13%29.82%30.29%29.08%
Rate Class
CCA
Rates SCE Rates
CCA
Rates SCE Rates
CCA
Rates SCE Rates
CCA
Rates SCE Rates
CCA
Rates SCE Rates
Agriculture 0.1117 0.0543 0.1117 0.0551 0.1117 0.0548 0.1117 0.0547 0.1117 0.0552
Commercial/Industrial Small <200kW 0.1139 0.0922 0.1139 0.0936 0.1139 0.0931 0.1139 0.0927 0.1139 0.0936
Commercial/Industrial Medium 200<500 kW 0.1132 0.0837 0.1132 0.0850 0.1132 0.0845 0.1132 0.0842 0.1132 0.0850
Commercial/Industrial Large 500<1000 kW 0.1124 0.0777 0.1124 0.0789 0.1124 0.0785 0.1124 0.0782 0.1124 0.0789
Residential 0.1066 0.0712 0.1066 0.0723 0.1066 0.0719 0.1066 0.0716 0.1066 0.0723
Residential CARE 0.0991 0.0635 0.0991 0.0645 0.0991 0.0641 0.0991 0.0639 0.0991 0.0645
Residential Green Tariff 0.1266 0.1127 0.1266 0.1144 0.1266 0.1138 0.1266 0.1134 0.1266 0.1144
Weighted Average 0.1102 0.0776 0.1102 0.0788 0.1102 0.0784 0.1102 0.0781 0.1102 0.0788
CCA Rate Premium/ (CCA Savings)41.87%39.78%40.53%41.04%39.72%
2026
Rate Class
2022 2023 2024 2025
CCA
Rates
PG&E
Rates
CCA
Rates
PG&E
Rates
CCA
Rates
PG&E
Rates
CCA
Rates
PG&E
Rates
CCA
Rates
PG&E
Rates
Agriculture 0.1382 0.0742 0.1382 0.0753 0.1382 0.0749 0.1382 0.0747 0.1382 0.0754
Commercial/Industrial Small <200kW 0.1390 0.1049 0.1390 0.1065 0.1390 0.1059 0.1390 0.1055 0.1390 0.1065
Commercial/Industrial Medium 200<500 kW 0.1397 0.1097 0.1397 0.1113 0.1397 0.1107 0.1397 0.1103 0.1397 0.1114
Commercial/Industrial Large 500<1000 kW 0.1352 0.1107 0.1352 0.1124 0.1352 0.1118 0.1352 0.1114 0.1352 0.1124
Residential 0.1426 0.1003 0.1426 0.1018 0.1426 0.1013 0.1426 0.1009 0.1426 0.1018
Residential CARE 0.1359 0.0936 0.1359 0.0950 0.1359 0.0945 0.1359 0.0941 0.1359 0.0950
Residential Solar Choice 0.2026 0.1265 0.2026 0.1284 0.2026 0.1277 0.2026 0.1272 0.2026 0.1284
Weighted Average 0.1399 0.0961 0.1399 0.0975 0.1399 0.0970 0.1399 0.0967 0.1399 0.0976
CCA Rate Premium/ (CCA Savings)45.56%43.41%44.18%44.70%43.35%
Rate Class
CCA
Rates SCE Rates
CCA
Rates SCE Rates
CCA
Rates SCE Rates
CCA
Rates SCE Rates
CCA
Rates SCE Rates
Agriculture 0.1258 0.0543 0.1258 0.0551 0.1258 0.0548 0.1258 0.0547 0.1258 0.0552
Commercial/Industrial Small <200kW 0.1280 0.0922 0.1280 0.0936 0.1280 0.0931 0.1280 0.0927 0.1280 0.0936
Commercial/Industrial Medium 200<500 kW 0.1272 0.0837 0.1272 0.0850 0.1272 0.0845 0.1272 0.0842 0.1272 0.0850
Commercial/Industrial Large 500<1000 kW 0.1265 0.0777 0.1265 0.0789 0.1265 0.0785 0.1265 0.0782 0.1265 0.0789
Residential 0.1208 0.0712 0.1208 0.0723 0.1208 0.0719 0.1208 0.0716 0.1208 0.0723
Residential CARE 0.1132 0.0635 0.1132 0.0645 0.1132 0.0641 0.1132 0.0639 0.1132 0.0645
Residential Green Tariff 0.1308 0.1127 0.1308 0.1144 0.1308 0.1138 0.1308 0.1134 0.1308 0.1144
Weighted Average 0.1242 0.0776 0.1242 0.0788 0.1242 0.0784 0.1242 0.0781 0.1242 0.0788
CCA Rate Premium/ (CCA Savings)59.94%57.58%58.43%59.00%57.52%
2026
Rate Class
2022 2023 2024 2025
Packet Pg 78
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-18
Figure ES-8 and Figure ES-9 graphically depict the difference in generation rates between the CCA and
PG&E and the CCA and SCE, respectively, for the AWG Jurisdictions scenario for the three renewable
content scenarios.
Figure ES-8 CCA and PG&E Generation Rate Comparison Summary for AWG Jurisdictions Participation
Scenarios
0.0000 0.0500 0.1000 0.1500 0.2000
CCA Rates
PG&E Rates
CCA Rates
PG&E Rates
CCA Rates
PG&E Rates
AWG RPS Equivalent AWG Middle of The Road AWG Aggressive
2022-2026 Average Base Generation Rates ($/kWh)
Packet Pg 79
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-19
Figure ES-9 CCA and SCE Generation Rate Comparison Summary for AWG Jurisdictions Participation
Scenarios
Table ES-9 shows the percentage change in average generation rates and the monetary change in monthly
Residential bills for CCA customers versus PG&E and SCE, and the percent change in GHG emissions for
all rate classes. This data is presented for year 2020. The previous Tables ES-6 through ES-8 present
weighted average rate impacts across all seven customer classes examined for years 2022-2026.
0.0000 0.0500 0.1000 0.1500 0.2000
CCA Rates
SCE Rates
CCA Rates
SCE Rates
CCA Rates
SCE Rates
AWG RPS Equivalent AWG Middle of The Road AWG Aggressive
2022-2026 Average Base Generation Rates ($/kWh)
Packet Pg 80
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-20
Table ES-9 Summary of Forecasted Residential Class Outcomes by Renewable Energy Content Scenario,
AWG Jurisdictions Participation Scenarios, Year 2020
Participation
Scenario
Included
Jurisdictions
Renewable
Energy
Content
Pacific Gas & Electric Southern California Edison
Proportional
GHG
Comparison
Generation
Rate
Comparison
(% Increase/
Decrease for
CCA
Customers)
Monthly Bill
Comparison
($ Increase/
Decrease for
CCA
Customers)
Generation
Rate
Comparison
(% Increase/
Decrease for
CCA
Customers)
Monthly Bill
Comparison
($ Increase/
Decrease for
CCA
Customers)
All Tri-County
Region
All San Luis
Obispo County
All Santa Barbara
County
All Ventura
County
RPS
Equivalent
22% $11.25 41% $14.55 6%
50% 29% $14.62 51% $17.93 -9%
75% 43% $21.72 71% $25.05 -55%
Advisory Working
Group
Jurisdictions
San Luis Obispo
County
Santa Barbara
County
Carpinteria
Santa Barbara
Ventura County
Camarillo
Moorpark
Ojai
Simi Valley
Thousand Oaks
Ventura
RPS
Equivalent
22% $12.21 41% $16.08 6%
50% 29% $15.92 50% $19.79 -9%
75% 43% $23.68 70% $27.64 -55%
All San Luis
Obispo County
Arroyo Grande
Atascadero
Grover Beach
Morro Bay
Paso Robles
Pismo Beach
San Luis Obispo
Unincorporated
SLO County
RPS
Equivalent
29% $12.07 7%
50% 36% $14.89 -9%
75% 51% $20.77 -54%
Unincorporated
San Luis Obispo
County
Unincorporated
SLO County
RPS
Equivalent
35% $15.70 7%
50% 42% $18.77 -9%
75% 56% $25.21 -54%
All Santa Barbara
County
Buellton
Carpinteria
Goleta
Guadalupe
Santa Barbara
Santa Maria
Solvang
Unincorporated
Santa Barbara
County
RPS
Equivalent
24% $11.15 45% $14.53 7%
50% 31% $14.27 55% $17.69 -9%
75% 45% $20.78 75% $24.22 -55%
Packet Pg 81
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-21
Participation
Scenario
Included
Jurisdictions
Renewable
Energy
Content
Pacific Gas & Electric Southern California Edison
Proportional
GHG
Comparison
Generation
Rate
Comparison
(% Increase/
Decrease for
CCA
Customers)
Monthly Bill
Comparison
($ Increase/
Decrease for
CCA
Customers)
Generation
Rate
Comparison
(% Increase/
Decrease for
CCA
Customers)
Monthly Bill
Comparison
($ Increase/
Decrease for
CCA
Customers)
Unincorporated
Santa Barbara
County
Unincorporated
Santa Barbara
County
RPS
Equivalent
26% $15.08 47% $19.29 7%
50% 33% $18.97 56% $23.23 -9%
75% 47% $27.11 76% $31.44 -54%
All Ventura
County
Camarillo
Fillmore
Moorpark
Ojai
Oxnard
Port Hueneme
Santa Paula
Simi Valley
Thousand Oaks
Ventura
Unincorporated
Ventura County
RPS
Equivalent
41% $15.87 6%
50% 50% $19.54 -10%
75% 70% $27.35 -55%
City of Santa
Barbara Santa Barbara
RPS
Equivalent
69% $17.91 6%
50% 78% $20.42 -10%
75% 100% $25.98 -55%
Table ES-10 shows annual operating results for the AWG Jurisdictions participation scenario for the RPS
Equivalent renewable energy content scenario. Net operating margins are negative for all years of the
Study period; meaning revenues are not sufficient to cover total operating and non-operating expenses
plus the contingency and rate stabilization fund. In the initial years of the study period, this is due to the
phasing in of customers and a lag in revenues versus expenditures. In later years, this revenue insufficiency
is caused by rates remaining unchanged even though the CCA experiences an increase in operating costs.
Rates were not increased because the CCA rate proxies were not competitive with IOU rates from the
onset of the Study through 2026. Raising rates would make them less competitive. Although working
capital initially is adequate, given the current debt assumptions that include a long-term bond financing in
year 2020 of $288 million, starting in year 2024, working capital declines below targeted amounts and
continues to decrease. The combination of increasingly negative net margins and a shortage of working
capital would indicate the need for a rate increase around year 2026, again which would further harm the
CCA program’s rate competitiveness relative to the IOUs. Table ES-11 presents this data for the AWG
Jurisdictions Middle of the Road renewable energy content scenario and Table ES-12 presents this data
for the AWG Jurisdictions Aggressive renewable energy content scenario. Generally speaking, results for
these alternate renewable energy content scenarios are similar to the RPS Equivalent scenario, although
Packet Pg 82
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-22
net margins and working capital deficiencies are better due to the higher rate proxies, which are set at
the beginning and remain constant throughout the study period. Rate increases would still be required,
but around the 2028 timeframe.
Table ES-10 CCA Annual Operating Results, AWG Jurisdictions RPS Equivalent Scenario
Table ES-11 CCA Annual Operating Results, AWG Jurisdictions Middle of the Road Scenario
Year
Operating
Revenues
($000s)
Total Operating
Expenses Plus
Contingency/ Rate
Stabilization Fund
($000s)
Non-Operating
Revenues/
(Expenses)
($000s)
Debt Service
($000s)
Net Margin1
($000s)
Working Capital
Fund ($000s)
Working Capital
Target ($000s)
Working Capital
Surplus/
(Deficiency)
($000s)
Working
Capital
Surplus/
(Deficiency)
(%)
a b c d a - b + c - d e f e - f (e/f)-1
2020 110,694 139,109 1,145 11,515 (38,785) 211,653 47,077 164,575 350%
2021 445,293 469,267 2,227 11,515 (33,262) 189,905 159,570 30,335 19%
2022 545,838 533,627 2,046 17,276 (3,018) 186,887 181,993 4,894 3%
2023 556,361 541,735 2,028 17,276 (621) 186,266 184,808 1,458 1%
2024 556,922 543,639 1,925 17,276 (2,067) 184,199 185,916 (1,716) -1%
2025 555,121 543,720 1,985 17,276 (3,889) 180,310 186,453 (6,143) -3%
2026 554,190 551,493 1,903 17,276 (12,676) 167,634 189,470 (21,836) -12%
2027 553,316 556,757 1,721 17,276 (18,995) 148,639 191,885 (43,246) -23%
2028 553,165 566,687 1,396 17,276 (29,401) 119,238 195,934 (76,697) -39%
2029 550,808 569,985 1,183 17,276 (35,270) 83,967 198,148 (114,181) -58%
2030 548,923 581,521 386 17,276 (49,488) 34,479 203,224 (168,745) -83%
NPV of Net Margin:(176,175)
1 Net Margin includes Net Operating Income less Debt Service. The net present value (NPV) of the
Net Margin is determined using a 4% discount rate and is as of Year 2020. The discount rate
is equal to the interest rate on the long-term debt.
Year
Operating
Revenues
($000s)
Total Operating
Expenses Plus
Contingency/ Rate
Stabilization Fund
($000s)
Non-Operating
Revenues/
(Expenses)
($000s)
Debt Service
($000s)
Net Margin1
($000s)
Working Capital
Fund ($000s)
Working Capital
Target ($000s)
Working Capital
Surplus/
(Deficiency)
($000s)
Working
Capital
Surplus/
(Deficiency)
(%)
a b c d a - b + c - d e f e - f (e/f)-1
2020 117,525 150,875 1,235 12,330 (44,445) 223,724 50,583 173,141 342%
2021 472,491 504,655 2,323 12,330 (42,170) 193,883 170,117 23,766 14%
2022 579,072 568,848 2,082 18,499 (6,192) 187,691 192,494 (4,803) -2%
2023 590,222 575,366 2,044 18,499 (1,600) 186,092 194,836 (8,745) -4%
2024 590,817 570,966 1,962 18,499 3,314 189,406 194,067 (4,662) -2%
2025 588,906 566,609 2,098 18,499 5,896 195,302 193,284 2,019 1%
2026 587,918 570,586 2,132 18,499 966 196,268 195,171 1,096 1%
2027 586,991 571,282 2,109 18,499 (681) 195,587 196,227 (640) 0%
2028 586,831 576,506 1,991 18,499 (6,182) 189,405 198,875 (9,470) -5%
2029 584,330 574,978 2,033 18,499 (7,113) 182,292 199,652 (17,361) -9%
2030 582,330 581,643 1,541 18,499 (16,270) 166,022 203,279 (37,257) -18%
NPV of Net Margin:(100,693)
1 Net Margin includes Net Operating Income less Debt Service. The net present value (NPV) of the
Net Margin is determined using a 4% discount rate and is as of Year 2020. The discount rate
is equal to the interest rate on the long-term debt.
Packet Pg 83
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-23
Table ES-12 CCA Annual Operating Results, AWG Jurisdictions Aggressive Scenario
H. Feasibility Outcome Summary
The two primary factors driving forecasted feasibility results
for the CCA include: 1) the competitiveness of CCA rates
against PG&E and SCE rates; and 2) the long-term financial
viability of the enterprise. Under all participation scenarios,
because the rate comparisons show most rate classes paying
more for power supplied by the CCA than from the
incumbent utilities and because the CCA does not maintain
sufficient revenues and working capital throughout the Study
period, the CCA is deemed infeasible Regarding rate
competitiveness, forecasted CCA revenue requirements are
primarily driven by power procurement costs and the Cost
Responsibility Surcharge (CRS), which consists of the
Competitive Transition Charge (CTC), the Department of
Water Resources Bond Charge (DWR-BC), and the Power
Cost Indifference Adjustment (PCIA). Together, these two
components represent 78% of the total of the overall
projected CCA revenue requirement and are thus primary drivers of rate competitiveness against the
two incumbent utilities.
Recent historical movements in the CRS and the allocation of incumbent utility revenue requirements
between generation and delivery (i.e., transmission and distribution) appear to disadvantage the CCA
program. The delivery portion of customers’ bills is paid equally by CCA and bundled IOU customers.
Generally speaking, in recent years the incumbent utilities appear to have been shifting costs from
generation to delivery, as discussed in more detail in Section II.E.1 Feasibility Drivers. The CCA only
competes against the incumbent utilities on generation. Given the assumptions of this Study, SCE and
PG&E forecasted generation rates are not high enough to support CCA feasibility at the forecasted level
of CCA power procurement and operational costs. Regarding long-term financial viability, the CCA would
Year
Operating
Revenues
($000s)
Total Operating
Expenses Plus
Contingency/ Rate
Stabilization Fund
($000s)
Non-Operating
Revenues/
(Expenses)
($000s)
Debt Service
($000s)
Net Margin1
($000s)
Working Capital
Fund ($000s)
Working Capital
Target ($000s)
Working Capital
Surplus/
(Deficiency)
($000s)
Working
Capital
Surplus/
(Deficiency)
(%)
a b c d a - b + c - d e f e - f (e/f)-1
2020 131,724 168,193 1,428 13,746 (48,788) 250,176 55,745 194,431 349%
2021 528,600 562,520 2,607 13,746 (45,059) 218,863 187,370 31,493 17%
2022 647,505 633,619 2,361 20,623 (4,375) 214,487 211,809 2,679 1%
2023 659,933 646,015 2,318 20,623 (4,388) 210,100 215,901 (5,801) -3%
2024 660,598 637,896 2,227 20,623 4,307 214,407 214,025 381 0%
2025 658,462 633,821 2,370 20,623 6,388 220,795 213,325 7,469 4%
2026 657,357 640,581 2,395 20,623 (1,452) 219,343 216,041 3,302 2%
2027 656,320 642,137 2,343 20,623 (4,096) 215,247 217,353 (2,106) -1%
2028 656,142 648,050 2,187 20,623 (10,344) 204,903 220,206 (15,303) -7%
2029 653,345 646,843 2,185 20,623 (11,936) 192,967 221,079 (28,111) -13%
2030 651,109 652,739 1,647 20,623 (20,605) 172,362 224,476 (52,114) -23%
NPV of Net Margin:(120,434)
1 Net Margin includes Net Operating Income less Debt Service. The net present value (NPV) of the
Net Margin is determined using a 4% discount rate and is as of Year 2020. The discount rate
is equal to the interest rate on the long-term debt.
In no participation or renewable
energy content scenario were the
CCA program’s rates competitive with
PG&E or SCE. Given the
underperformance of the CCA in
terms of being rate competitive,
consistently having negative net
margins, and failing to meet the
target for working capital, the CCA
under the assumptions used in the
Study is neither reliably solvent nor
financially feasible.
Packet Pg 84
1
Executive Summary
Technical Feasibility Study Central Coast Region
on Community Choice Aggregation August 2017
ES-24
need additional rate increases around the year 2026 timeframe to maintain adequate working capital and
increase net margins, further decreasing rate competitiveness.
I. Sensitivity Analysis Results
Upon completion of the Study outcomes for each participation and renewable energy content scenario,
additional sensitivity cases were examined against the AWG Jurisdictions participation scenario to
determine how changes in key inputs affect feasibility outcomes. These sensitivities included: (1) Decreases
in power procurement costs; (2) Increases in IOU rate escalation; and (3) Decreases in staffing costs. Each
sensitivity was examined individually to determine the point at which the CCA could be feasible. As
discussed in more detail in Section II.E.2, Pro Forma Sensitivity Analysis, in order for the CCA to be
feasible:
xPower procurement costs would have to decrease 40% over the Study forecast, or
xPG&E and SCE rates would have to escalate at an additional 4.0% per year above the Study
forecast.
A staffing cost reduction alone is not expected to affect program feasibility. Although not examined as
part of this Study, some combination of changes to the Study assumptions could result in a more feasible
outcome. Like all feasibility studies, assumptions used herein are based on a forecast of future conditions
which may or may not occur. Various market and regulatory drivers may change resulting in different
outcomes from those assumed herein. The assumptions used in the Study are reasonable for the purposes
of analyzing the feasibility of CCA within the Tri-County Region, but no warranties as to the accuracy of
outcomes are implied or should be inferred.
Packet Pg 85
1
Abbreviated Technical
Review of Community
Choice Energy
2017
CITY OF SAN LUIS OBISPO AND UNICORPORATED COUNTY OF SAN
LUIS OBISPO
PILOT POWER GROUP | 8910 University Center Lane, Suite 520 San Diego, CA 92122
Packet Pg 86
1
1 October 20, 2017
Table of Contents
Executive Summary ................................................................................................................................... 2
Model Assumptions .................................................................................................................................. 4
Scenarios ................................................................................................................................................... 4
City of San Luis Obispo .............................................................................................................................. 5
Load Profile and Shape ......................................................................................................................... 6
Scenario 1 – RPS Compliant (Baseline) ................................................................................................. 7
Alternative - RPS Compliant with a Rate Reduction ............................................................................. 8
Simulation Analysis ............................................................................................................................... 9
Scenario 2 – 50% Renewable Energy .................................................................................................. 10
Alternative – 50% Renewable Energy with a Rate Reduction ............................................................ 10
Simulation Analysis ............................................................................................................................. 11
Unincorporated County of San Luis Obispo ............................................................................................ 12
Load Profile and Shape ....................................................................................................................... 13
Scenario 1 – RPS Compliant (Baseline) ............................................................................................... 14
Alternative - RPS Compliant with a Rate Reduction ........................................................................... 15
Simulation Analysis ............................................................................................................................. 16
Scenario 2 – 50% Renewable Energy .................................................................................................. 17
Alternative – 50% Renewable Energy with a Rate Reduction ............................................................ 17
Simulation Analysis ............................................................................................................................. 18
City and Unincorporated County of San Luis Obispo, combined ............................................................ 19
Scenario 1 – RPS Compliant (Baseline) ............................................................................................... 20
Scenario 1 Alternative - RPS Compliant with a Rate Reduction .......................................................... 21
Simulation Analysis ............................................................................................................................. 21
Scenario 2 – 50% Renewable Energy .................................................................................................. 22
Alternative – 50% Renewable Energy with a Rate Reduction ............................................................ 22
Simulation Analysis ............................................................................................................................. 23
Glossary of Terms.................................................................................................................................... 24
Packet Pg 87
1
2 October 20, 2017
Executive Summary
California Community Choice Energy (CCE) laws and regulations allow cities and counties to procure
electricity for their residents, businesses and municipal facilities. A CCE program provides citizens with an
alternative to a single monopoly electric supplier and local control over a number of key electric
procurement related choices. The local control can result in rate savings, cleaner energy, local economic
development, customized programming, and many other community-based possibilities.
Adopted in 2002, California Assembly Bill 117 (AB 117), as later supplemented in 2011 by California Senate
Bill 790, provides the broad framework under which CCE operates. Under AB 117, local governments
procure electricity for retail customers aggregated within their boundaries, while the investor-owned
utility (IOU) continues to provide transmission, distribution, metering, billing, payment collection,
customer care, and other services.
When a CCE is ready to begin service to customers, all of the CCE jurisdictional customers are
automatically enrolled in the CCE electric procurement service. Any customer who prefers to continue to
receive procurement service from the IOU may, without penalty, opt-out of the CCE. Because the CCE is
now procuring electricity for the CCE customer, the charge for the CCE electric procurement appears on
the IOU bill, along with an additional charge called the Power Charge Indifference Adjustment (PCIA). The
PCIA is imposed on CCE customers to ensure that customers opting out of CCE service are not financially
impacted by the formation and operation of the CCE.
Since Marin Clean Energy launched in 2010, seven additional CCE programs have become operational.
About half a dozen CCE programs are very close to launching, and much more are under serious
consideration. Nearly all of the operational, and most of the planned, CCE programs are multi-
jurisdictional joint powers authorities. The City of Lancaster has, however, operated a single-jurisdiction
CCE for almost three years, and plans for other single-jurisdiction CCE programs are currently underway.
This abbreviated technical review is provided to the County of San Luis Obispo (SLO County) and the City
of San Luis Obispo (SLO City) as a preliminary evaluation of the financial viability of establishing a CCE
program. However, this review is by no means a complete analysis of a CCE. If SLO County, SLO City or
both elect to take the next steps in moving forward with establishing a CCE, it is strongly encouraged that
a full technical analysis and review be completed by a management consulting firm to determine the
feasibility of establishing a CCE.
There are several initial assumptions used in the “baseline” feasibility model. These assumptions include
an uncollected factor of 0.25%; the opt-out rate of 20%; and renewable purchase to follow the standard
RPS schedule. There is no consideration is made for rate stabilization fund, project and programming fund,
or accounting for debt service. These items would have to come out of available headroom and are specific
to each CCE structure. It is best to establish a “baseline” and make adjustments to the model from the
baseline. This way one can identify the impact of making a change to the model.
The review evaluates the financial viability of a City, County and Combined CCE program by:
• Forecasting the electricity load requirements and potential customers by class;
• Estimating the costs of procuring the electric supply;
Packet Pg 88
1
3 October 20, 2017
• Estimating the costs of administering the CCE program;
• Evaluating the impact of changes to the review assumptions on the projected feasibility outcomes
by completing two scenarios based on the renewable content and customer rate reduction.
Two (2) scenarios were completed for each jurisdiction, identifying the possible headroom available to
the CCE:
• Scenario 1 – Renewable Portfolio Standard (RPS) Compliant
• Scenario 2 - 50% Renewable Energy
A summary of the results of the expected outcomes and sensitivity analysis is outlined below:
The results of the feasibility model provided positive headroom for all years, for all scenarios and
jurisdictions. In Scenario 1 the most headroom is made available for the CCE. This scenario, in all
jurisdictions, provides the minimum renewable energy needed to remain compliant with the RPS rules
outlined by the California Public Utilities Commission (CPUC). The CCE portfolio content will have 29%
renewable energy beginning in 2018 and will increase by 2% each and every year there afterward.
Scenario 1 assumes as close to what the IOU’s renewable energy portfolio would be over a ten-year
period.
The primary difference between the County results and the City results is the size of load and number of
accounts. The County energy load is much larger than the City energy load, with the largest contributors
being large commercial and agriculture making up approximately 43.3% of the overall load. Whereas, the
City energy load is relatively evenly split between residential, small, medium and large commercial
customer.
In Scenario 2, there was positive headroom for all years and for all jurisdictions. However, as expected,
the headroom has decreased due to the higher percentage of renewable energy in the portfolio,
increasing to 50% for all years. The cost of renewable energy is purchased at a premium to the cost of
system energy. However, the CCE still have available headroom and would be rate competitive with the
IOU.
Year Criteria Scenario 1 Scenario 2 Scenario 1 Scenario 2 Scenario 1 Scenario 2
Probability Revenue is > $0.00 76%65%63%48%67%51%
Expected Revenue*$1,615,225 $854,189 $2,285,884 $198,967 $3,908,504 $1,060,548
Certainty Level**45.29% 46.63% 45.46% 46.80% 47.09% 46.67%
Probability Revenue is > $0.00 100% 100% 100%99% 100%98%
2018-2022 Expected Revenue $14,093,511 $10,834,614 $27,171,335 $18,248,709 $41,260,248 $29,078,711
Certainty Level 58.69% 58.11% 58.94% 58.77% 59.59% 58.72%
Probability Revenue is > $0.00 100% 100% 100% 100% 100% 100%
Expected Revenue $34,330,515 $29,331,450 $70,516,335 $56,847,625 $104,815,718 $86,147,916
Certainty Level 87.25% 86.98% 86.62% 87.01% 86.51% 87.61%
Potential rate reduction***5.58% 4.77% 4.26% 3.44% 4.62% 3.80%
City County County and City
*** "Potential rate reduction" provides a rough estimate of annual reduction across all rate classes if all net revenue were applied to reducing rates
* "Expected Revenue" indicates the net revenue as predicted by the model
** "Certainty level" indicates probability of net revenue equaling or exceeding the expected model outcome
2018
2018-2027
Packet Pg 89
1
4 October 20, 2017
The certainty level is relatively the same between jurisdictions. However, the certainty level is slightly
higher in Scenario 2 versus Scenario 1 due to the higher component of system energy which is more
volatile than renewable energy. Although, both renewable energy and system energy is subject to market
fluctuation.
Model Assumptions
The Model has the flexibility to modify multiple assumptions, the Baseline assumptions are highlighted in
red. Furthermore, the descriptive statistics are provided on any variable that was allowed to fluctuate
during the sensitivity analysis.
• Rate Reduction – 0%, unless the scenario requires it
• Uncollected Factor – 0.25%
• Opt-out Rate – 20%, sensitivity analysis allows opt-out rate to fluctuate using a normal distribution
with parameters: mean 20% and standard deviation 2.0%
• Renewable Purchase – Standard RPS schedule, unless the scenario requires a specific percentage
• GHG Purchase – 0%
• Rate Stabilization Fund – 0%
• Renewable Category 2 Override – No
• Opt-up 100% Renewable Program – 0%
• NP15 On Peak – Sensitivity analysis allows on-peak prices to fluctuate using a lognormal
distribution with parameters: mean $37.77, the standard deviation of $8.25, and coefficient to NP
15 Off Peak of 0.98. Statistical information based on historical NP 15 On Peak prices between 2009
– 2016.
• NP15 Off Peak - Sensitivity analysis allows off-peak prices to fluctuate using a lognormal
distribution with parameters: mean $29.50, the standard deviation of $8.16, and coefficient to NP
15 On Peak of 0.98. Statistical information based on historical NP 15 Off Peak prices between
2009 – 2016.
Scenarios
Two (2) scenarios were completed for SLO City, SLO County, and SLO City and County combined. Each
scenario identified the possible headroom available to the CCE. All scenarios consisted of a combination
of renewable energy component and some level of rate reduction.
• Scenario 1 - RPS Compliant (following the CPUC RPS Compliance Rules) and zero rate reduction
are given to customers. This scenario is considered the baseline.
• Scenario 2 - 50% Renewable Energy and zero rate reduction given to customers.
Packet Pg 90
1
5 October 20, 2017
City of San Luis Obispo
Based on historical utility load data provided by Pacific Gas & Electric (PG&E), the total annual load was
271,342 MWh with 22,971 accounts. Direct Access load was removed from the analysis since it is unknown
whether a Direct Access customer would elect to participate in the CCE. The consumption between rate
class is relatively evenly distributed between small commercial, medium commercial, large commercial,
and residential ranging from 51,000 MWh to 79,000 MWh. However, looking at accounts by rate class,
the majority of the accounts are residential at 18,764 or 81.7%.
Using the data provided, the model increases load and accounts year-over-year by 0.25% and 0.50%,
respectively. The growth assumptions were provided by the California Energy Commission (CEC)
California Energy Demand Forecast for 2015 – 2025. A baseline opt-out rate of 20% was utilized for all
rate classes for all years, resulting in a decrease of overall accounts remaining in the CCE. Although other
CCEs has experienced lower opt-out rates, it is believed 20% is a conservative case to use in the feasibility
analysis. The sensitivity analysis does allow the opt-out rate to fluctuate between 15% and 25%. At
launch, following the increases in load and accounts by 2018, there would be ~18,543 accounts remaining
in the CCE. The annual retail load associated with the accounts remaining would be ~219,406 MWh in the
first year of the CCE, but would marginally increase year-over-year due to increased customer accounts
and load. The total CAISO required load would be ~231,935 in the first year, the delta between retail load
and CAISO load is considered the energy waste resulting from the transmission of electrical energy across
power lines or line losses.
Customer Accounts 2018 2019 2020 2021 2022 2023
Residential 15,124 15,162 15,200 15,238 15,276 15,314
Small Commercial 2,898 2,905 2,912 2,919 2,927 2,934
Medium Comercial 244 244 244 244 244 244
Large Commercial 110 110 110 110 110 110
Agricultural 8 8 8 8 8 8
Lighting 160 160 160 160 160 160
Total Accounts 18,543 18,588 18,634 18,679 18,724 18,770
Customer Load (MWh)2018 2019 2020 2021 2022 2023
Residential 64,067 64,388 64,709 65,033 65,358 65,685
Small Commercial 49,746 49,995 50,245 50,496 50,748 51,002
Medium Comercial 41,489 41,696 41,905 42,114 42,325 42,536
Large Commercial 64,276 64,597 64,920 65,245 65,571 65,899
Agricultural 100 100 100 100 100 100
Lighting 821 821 821 821 821 821
Total Retail Load (MWh)219,406 220,499 221,597 222,700 223,809 224,923
Total CAISO Load (MWh)231,935 233,090 234,250 235,417 236,589 237,767
Rate Class Bundled Accounts Rate Class Percentage
AGRICULTURE 10 0.0%
LARGE COMMERCIAL 137 0.6%
MEDIUM COMMERCIAL 305 1.3%
OUTDOOR LIGHTING 160 0.7%
RESIDENTIAL 18,764 81.7%
SMALL COMMERCIAL 3,595 15.7%
Total 22,971 100.0%
Rate Class Annual MWh Rate Class Percentage
AGRICULTURE 125 0.0%
LARGE COMMERCIAL 79,152 29.2%
MEDIUM COMMERCIAL 51,091 18.8%
OUTDOOR LIGHTING 821 0.3%
RESIDENTIAL 78,895 29.1%
SMALL COMMERCIAL 61,259 22.6%
Total 271,342 100.0%
Packet Pg 91
1
6 October 20, 2017
Load Profile and Shape
It is the responsibility of the CCE to procure energy and related services. Forecasting, profiling, and risk
management are the primary tasks conducted for energy procurement. In doing so, one must evaluate
the load data provided by the utility.
Using data provided by PG&E, we are able to illustrate the forecasted hourly load shape by month. The
Forecasted Hourly Shape graph demonstrates the expected load consumed in each hour over a 24-hour
period by month. As expected, there is a higher demand for energy during the peak demand over a day.
Furthermore, we are able to illustrate the forecasted total monthly load over the calendar year. As
expected, there is a higher expected consumption during the winter months due to shorter daylight hours.
Packet Pg 92
1
7 October 20, 2017
Finally, we are able to illustrate the forecasted on-peak and off-peak block shape by month. This
information is vital when purchasing block energy from the wholesale market.
Scenario 1 – RPS Compliant (Baseline)
The RPS Compliant or baseline scenario would
demonstrate the profitability of the CCE if it
followed the minimum RPS requirement outlined
by the CPUC. In the CCE Revenue and Expense
charge, each colored section represents the fees
associated with a CCE. The purple section is the
net CCE revenue or headroom off the CCE. The
largest expense associated with a CCE is power
supply costs, identified in the red section. The
blue section represents non-bypassable charges,
which are fees associated with the PG&E and
include, but limited to, franchise fees, PCIA
charges, and DWR Bond fees. The non-
bypassable charges are forecasted to decline
with the elimination of the bond fee, and the cost
of PG&E’s resources is increasing. However, if
prices decline further, that would have upward
pressure on the PCIA charges, putting pressure
on headroom for the CCE. In the simulation
analysis, the PCIA is allowed to fluctuate due to
changes in the market prices. Finally, the green
section represents O&M fees associated with
running a CCE. As no structure has been outlined
Packet Pg 93
1
8 October 20, 2017
by the county or city, an average of cost was applied similarly to the administrative costs associated with
Sonoma Clean Power and Marin County Energy. The CCE Headroom chart provides a closer view of the
forecasted year-over-year annual headroom for the CCE. The red line is the cumulative CCE headroom
over the ten-year period.
Alternative - RPS Compliant with a Rate Reduction
As an alternative to Scenario 1, any available
headroom could be applied as a rate reduction
over a 10-year period. When applying the
available headroom as a rate reduction, the CCE
will have zero ($0) at the end of the 10 years. This
provides an average rate reduction of 5.58% over
the 10 years. When comparing a customer’s
monthly billing, the rate reduction lowers the
monthly bill by an average of $88.91 per annum
over a ten-year period. The chart illustrates the
average monthly invoice, across all rate classes
and a consumption of 500 kWh per month and a
delivery rate of $0.1394 per kWh.
Packet Pg 94
1
9 October 20, 2017
Simulation Analysis
Compared with many other CCA feasibility studies, this
abbreviated study takes a modified approach to sensitivity
analysis, instead of the conventional low-medium-high
approach, this study utilizes a Monte Carlo simulation to
determine a range of values and probabilities. The Monte
Carlo simulation randomly generates a range of values for
the assumption that has been pre-defined. The inputs
feed into defined forecast cells, providing a range of
possible outcomes, which are expressed as a distribution
graph. The distribution can be used to provide an
estimate of the probability or certainty of a particular
outcome. Pilot considers this approach to provide a more
accurate and meaningful analysis.
For the sensitivity, three periods of cumulative CCE
headroom are highlighted in the analysis: year 2018, years
2018-2022, and years 2018-2027. Allowing variables such
as opt-out rates and forward prices on system generation
to fluctuate, the probability of 2018 City CCE headroom to
be greater than the expected outcome is 45.29%. The
modeled expected headroom is $1,615,225, with a mean
of $1,334,612 and a median of $1,402,297. The
probability of the City 2018-2022 CCE headroom to be
greater than the modeled expected outcome of
$14,093,511 is 58.69%, with a mean of $14,947,479 and a
median of $15,059,219. Finally, the probability of the City CCE 2018-2027 headroom to be greater than
the modeled expected outcome of $34,330,315 is 87.25%, with a mean of $42,904,220 and a median of
$43,084,122.
Packet Pg 95
1
10 October 20, 2017
Scenario 2 – 50% Renewable Energy
In the second scenario, the renewable component
has increased to 50% exceeding the RPS
requirements outlined by the CPUC. There is no
rate reduction applied in this scenario. Under the
higher renewable energy scenario, the headroom
for the CCE falls by ~$761,000 each year. The
lower headroom is due to the cost or premium
paid to purchase additional renewable energy
over and above the RPS compliance requirement.
Alternative – 50% Renewable Energy with a Rate Reduction
As an alternative in Scenario 2, any available
headroom could be applied as a rate reduction
over a 10-year period. When applying the available
headroom as a rate reduction, the CCE will have
zero ($0) at the end of the 10 years. This provides
an average rate reduction of 4.77% over the 10
years. When comparing a customer’s monthly
billing, the rate reduction lowers the monthly bill
by an average of $76.68 per annum over a ten-year
period. The chart illustrates the average monthly
invoice, across all rate classes and a consumption
of 500 kWh per month and a delivery rate of
$0.1394 per kWh.
Packet Pg 96
1
11 October 20, 2017
Simulation Analysis
We performed a sensitivity analysis on multiple variables that are key to determine a probability of a
specific outcome, in this case, forecasted headroom. Using a statistical modeling simulation software, we
were able to derive probabilistic frequency curves. These curves are formulated by running thousands of
trials of the model which allow the key variables to fluctuate based on specific parameters.
For the sensitivity, again three periods of cumulative CCE
headroom are highlighted in the analysis: year 2018,
years 2018-2022, and years 2018-2027. Allowing
variables such as opt-out rates and forward prices on
system generation to fluctuate, the probability of 2018
City CCE headroom to be greater than the expected
outcome is 46.63%. The modeled expected headroom is
$854,189, with a mean of $617,382 and a median of
$707,329. The probability of the City 2018-2022 CCE
headroom to be greater than the modeled expected
outcome of $10,834,614 is 58.11%, with a mean of
$11,690,356 and a median of $11,686,958. Finally, the
probability of the City CCE 2018-2027 headroom to be
greater than the modeled expected outcome of
$29,331,450 is 86.98%, with a mean of $37,866,887 and
a median of $37,893,785.
Packet Pg 97
1
12 October 20, 2017
Unincorporated County of San Luis Obispo
Based on historical utility load data provided by PG&E, the total annual load was 745,275 MWh with
58,801 accounts. Direct Access load was removed from the analysis since it is unknown whether a Direct
Access customer would elect to participate in the CCE. As expected, the consumption between rate classes
would vary from the City data. Large commercial and agricultural load is taking a larger segment of
consumption at 25.9% and 17.4%, respectively, followed by residential customer load at 36.9%. However,
looking at accounts by rate class, the majority of the accounts are residential at 48,676 or 82.8%.
Using the data provided, the model increases load and account year-over-year by 0.25% and 0.50%,
respectively. The growth assumptions were provided by the California Energy Commission (CEC)
California Energy Demand Forecast for 2015 – 2025. A baseline opt-out rate of 20% was utilized for all
rate classes for all years, resulting in a decrease overall accounts remaining in the CCE. Other CCEs has
experienced lower opt-out rates. However, it is believed 20% is a conservative case to use in the feasibility
analysis. The sensitivity analysis does allow the opt-out rate to fluctuate between 15% and 25%. At launch
following the increases in load and accounts by 2018, there would be ~47,477 accounts remaining in the
CCE. The annual retail load associated with the accounts remaining would be ~601,400 MWh in the first
year of the CCE, but would marginally increase year-over-year due to increased customer accounts and
load. The total CAISO required load would be ~636,013 in the first year, the delta between retail load and
CAISO load is considered line loss. Line loss is energy waste resulting from the transmission of electrical
energy across power lines.
Customer Accounts 2018 2019 2020 2021 2022 2023
Residential 39,234 39,332 39,430 39,529 39,627 39,726
Small Commercial 5,091 5,104 5,116 5,129 5,142 5,155
Medium Comercial 244 244 244 244 244 244
Large Commercial 170 170 170 170 170 170
Agricultural 2,214 2,214 2,214 2,214 2,214 2,214
Lighting 525 525 525 525 525 525
Total Accounts 47,477 47,587 47,698 47,810 47,921 48,033
Rate Class Bundled Accounts Rate Class Percentage
AGRICULTURE 2,767 4.7%
LARGE COMMERCIAL 212 0.4%
MEDIUM COMMERCIAL 305 0.5%
OUTDOOR LIGHTING 525 0.9%
RESIDENTIAL 48,676 82.8%
SMALL COMMERCIAL 6,316 10.7%
Total 58,801 100.0%
Rate Class Annual MWh Rate Class Percentage
AGRICULTURE 129,855 17.4%
LARGE COMMERCIAL 193,117 25.9%
MEDIUM COMMERCIAL 59,149 7.9%
OUTDOOR LIGHTING 1,272 0.2%
RESIDENTIAL 275,069 36.9%
SMALL COMMERCIAL 86,813 11.6%
Total 745,275 100.0%
Customer Load (MWh)2018 2019 2020 2021 2022 2023
Residential 223,372 224,489 225,612 226,740 227,873 229,013
Small Commercial 70,498 70,850 71,204 71,560 71,918 72,278
Medium Comercial 48,033 48,273 48,514 48,757 49,001 49,246
Large Commercial 156,823 157,607 158,395 159,187 159,983 160,783
Agricultural 103,884 103,884 103,884 103,884 103,884 103,884
Lighting 1,272 1,272 1,272 1,272 1,272 1,272
Total Retail Load (MWh)601,400 603,881 606,375 608,881 611,400 613,931
Total CAISO Load (MWh)636,013 638,639 641,279 643,931 646,597 649,276
Packet Pg 98
1
13 October 20, 2017
Load Profile and Shape
It is the responsibility of the CCE to procure energy and related services. Forecasting, profiling, and risk
management are the primary tasks conducted for energy procurement. In doing so, one must evaluate
the load data provided by the utility.
Using data provided by PG&E, we are able to illustrate the forecasted hourly load shape by month. The
Forecasted Hourly Shape graph demonstrates the expected load consumed in each hour over a 24-hour
period by month. As expected, there is a higher demand for energy during the peak demand over a day.
Furthermore, we are able to illustrate the forecasted total monthly load over the calendar year. As
expected, there is a higher expected consumption during the winter months due to shorter daylight hours.
As well as, higher expected consumption during the summer months, possibly due to A/C usage in the
inland region.
Packet Pg 99
1
14 October 20, 2017
Finally, we are able to illustrate the forecasted on-peak and off-peak block shape by month. This
information is vital when purchasing block energy from the wholesale market.
Scenario 1 – RPS Compliant (Baseline)
The RPS Compliant or baseline scenario
demonstrates the profitability of the CCE if it
only followed the minimum RPS requirement
outlined by the CPUC. In the CCE Revenue and
Expense charge, each colored section
represents the fees associated with a CCE. The
purple section is the net CCE revenue or
headroom off the CCE. The largest expense
associated with a CCE is power supply costs,
identified in the red section. The blue section
represents non-bypassable charges, which are
fees associated with the PG&E and include, but limited to, franchise fees, PCIA charges, and DWR Bond
fees. The non-bypassable charges are forecasted to decline with the elimination of the bond fee, and the
cost of PG&E’s resources is increasing. However, if prices decline further, that would have upward
pressure on the PCIA charges, putting pressure on headroom for the CCE. In the simulation analysis, the
PCIA is allowed to fluctuate due to changes in the market prices. Finally, the green section represents
O&M fees associated with running a CCE. As no structure has been outlined by the county or city, an
average of cost was applied similarly to the administrative costs associated with Sonoma Clean Power and
Marin County Energy.
Packet Pg 100
1
15 October 20, 2017
The CCE Headroom chart illustrates a closer view
of the forecasted year-over-year annual
headroom for the CCE. The red line is the
cumulative CCE headroom.
Alternative - RPS Compliant with a Rate Reduction
As an alternative to Scenario 1, any available
headroom could be applied as a rate reduction
over a 10-year period. When applying the
available headroom as a rate reduction, the CCE
will have zero ($0) at the end of the 10 years. This
provides an average rate reduction of 4.26% over
the 10 years. When comparing a customer’s
monthly billing, the rate reduction lowers the
monthly bill by an average of $67.36 per annum
over a ten-year period. The chart illustrates the
average monthly invoice, across all rate classes
and a consumption of 500 kWh per month and a
delivery rate of $0.1394 per kWh.
Packet Pg 101
1
16 October 20, 2017
Simulation Analysis
We performed a sensitivity analysis on multiple
variables that are key to determine a probability of a
specific outcome, in this case, forecasted headroom.
Using a statistical modeling simulation software, we
were able to derive probabilistic frequency curves.
These curves are formulated by running thousands of
trials of the model which allow the key variables to
fluctuate based on specific parameters.
For the sensitivity, again three periods of cumulative
CCE headroom are highlighted in the analysis: year
2018, years 2018-2022, and years 2018-2027. Allowing
variables such as opt-out rates and forward prices on
system generation to fluctuate, the probability of 2018
City CCE headroom to be greater than the expected
outcome is 45.46%. The modeled expected headroom
is $2,285,884, with a mean of $1,447,631 and a median
of $1,709,989. The probability of the City 2018-2022
CCE headroom to be greater than the modeled
expected outcome of $27,171,335 is 58.94%, with a
mean of $29,629,721 and a median of $29,633,252.
Finally, the probability of the City CCE 2018-2027
headroom to be greater than the modeled expected
outcome of $70,516,335 is 86.62%, with a mean of
$93,924,794 and a median of $94,947,213.
Packet Pg 102
1
17 October 20, 2017
Scenario 2 – 50% Renewable Energy
In Scenario 2, the renewable component has
increased to 50% exceeding the RPS
requirements outlined by the CPUC. There is no
rate reduction applied in this scenario. Under
the higher renewable energy scenario, the
headroom for the CCE falls by ~$2,090,000 each
year. The lower headroom is due to the cost or
premium paid to purchase additional renewable
energy than the RPS compliance requirement.
Alternative – 50% Renewable Energy with a Rate Reduction
As an alternative to Scenario 2, any available
headroom is applied as a rate reduction over a
10-year period. When applying the available
headroom as a rate reduction, the CCE will have
zero ($0) at the end of the 10 years. This provides
an average rate reduction of 4.26% over the 10
years. When comparing a customer’s monthly
billing, the rate reduction lowers the monthly bill
by an average of $55.13 per annum over a ten-
year period. The chart illustrates the average
monthly invoice, across all rate classes and a
consumption of 500 kWh per month and a
delivery rate of $0.1394 per kWh.
Packet Pg 103
1
18 October 20, 2017
Simulation Analysis
We performed a sensitivity analysis on multiple variables
that are key to determine a probability of a specific
outcome, in this case, forecasted headroom. Using a
statistical modeling simulation software, we were able to
derive probabilistic frequency curves. These curves are
formulated by running thousands of trials of the model
which allow the key variables to fluctuate based on
specific parameters.
For the sensitivity, again three periods of cumulative CCE
headroom are highlighted in the analysis: year 2018, years
2018-2022, and years 2018-2027. Allowing variables such
as opt-out rates and forward prices on system generation
to fluctuate, the probability of 2018 City CCE headroom to
be greater than the expected outcome is 46.80%. The
modeled expected headroom is $198,967, with a mean of
($508,772) and a median of ($236,488). The probability of
the City 2018-2022 CCE headroom to be greater than the
modeled expected outcome of $18,248,709 is 58.77%,
with a mean of $20,470,588 and a median of $20,812,001.
Finally, the probability of the City CCE 2018-2027
headroom to be greater than the modeled expected
outcome of $56,847,625 is 87.01%, with a mean of
$80,311,648 and a median of $80,636,845.
Packet Pg 104
1
19 October 20, 2017
City and Unincorporated County of San Luis Obispo, combined
Finally, based on historical utility load data provided by PG&E, the total annual load was 1,016,617 MWh
with 81,772 accounts. Direct Access load was removed from the analysis since it is unknown whether a
Direct Access customer would elect to participate in the CCE. As expected, the consumption between rate
classes from the Combined data varies from the segregated City and County datasets. Large commercial
and residential load is taking a larger segment of consumption at 26.8% and 34.8%, respectively, followed
by agriculture load at 17.4%. However, looking at accounts by rate class, the majority of the accounts are
residential at 67,440 or 82.5%.
Using the data provided, the model increases load and account year-over-year by 0.25% and 0.50%,
respectively. The growth assumptions were provided by the California Energy Commission (CEC)
California Energy Demand Forecast for 2015 – 2025. A baseline opt-out rate of 20% was utilized for all
rate classes for all years, resulting in a decrease of overall accounts remaining in the CCE. Other CCEs have
experienced lower opt-out rates. However, it is believed 20% is a conservative case to use in the feasibility
analysis. The sensitivity analysis does allow the opt-out rate to fluctuate between 15% and 25%. At launch
following the increases in load and accounts by 2018, there would be ~66,020 accounts remaining in the
CCE. The annual retail load associated with the accounts remaining would be ~820,807 MWh in the first
year of the CCE, but would marginally increase year-over-year due to increased customer accounts and
load. The total CAISO required load would be ~867,948 in the first year, the delta between retail load and
Rate Class Annual MWh Rate Class Percentage
AGRICULTURE 129,980 12.8%
LARGE COMMERCIAL 272,269 26.8%
MEDIUM COMMERCIAL 110,240 10.8%
OUTDOOR LIGHTING 2,093 0.2%
RESIDENTIAL 353,963 34.8%
SMALL COMMERCIAL 148,072 14.6%
Total 1,016,617 100.0%
Rate Class Bundled Accounts Rate Class Percentage
AGRICULTURE 2,777 3.4%
LARGE COMMERCIAL 349 0.4%
MEDIUM COMMERCIAL 610 0.7%
OUTDOOR LIGHTING 685 0.8%
RESIDENTIAL 67,440 82.5%
SMALL COMMERCIAL 9,911 12.1%
Total 81,772 100.0%
Customer Load (MWh)2018 2019 2020 2021 2022 2023
Residential 287,440 288,877 290,321 291,773 293,232 294,698
Small Commercial 120,243 120,845 121,449 122,056 122,666 123,280
Medium Comercial 89,521 89,969 90,419 90,871 91,325 91,782
Large Commercial 221,098 222,204 223,315 224,432 225,554 226,681
Agricultural 103,984 103,984 103,984 103,984 103,984 103,984
Lighting 2,093 2,093 2,093 2,093 2,093 2,093
Total Retail Load (MWh)820,807 824,380 827,972 831,581 835,209 838,854
Total CAISO Load (MWh)867,948 871,730 875,530 879,349 883,187 887,045
Customer Accounts 2018 2019 2020 2021 2022 2023
Residential 54,358 54,494 54,630 54,766 54,903 55,041
Small Commercial 7,988 8,008 8,028 8,048 8,069 8,089
Medium Comercial 488 488 488 488 488 488
Large Commercial 279 279 279 279 279 279
Agricultural 2,222 2,222 2,222 2,222 2,222 2,222
Lighting 685 685 685 685 685 685
Total Accounts 66,020 66,176 66,332 66,489 66,646 66,803
Packet Pg 105
1
20 October 20, 2017
CAISO load is considered line loss. Line loss is energy waste resulting from the transmission of electrical
energy across power lines.
Scenario 1 – RPS Compliant (Baseline)
The RPS Compliant or baseline scenario
demonstrates the profitability of the CCE if it
only followed the minimum RPS requirement
outlined by the CPUC. In the CCE Revenue and
Expense charge, each colored section represents
the fees associated with a CCE. The purple
section is the net CCE revenue or headroom off
the CCE. The largest expense associated with a
CCE is power supply costs, identified in the red
section. The blue section represents non-
bypassable charges, which are fees associated
with the PG&E and include, but limited to,
franchise fees, PCIA charges, and DWR Bond fees. The non-bypassable charges are forecasted to decline
with the elimination of the bond fee, and the cost of PG&E’s resources is increasing. However, if prices
decline further, that would have upward pressure on the PCIA charges, putting pressure on headroom for
the CCE. In the simulation analysis, the PCIA is allowed to fluctuate due to changes in the market prices.
Finally, the green section represents O&M fees associated with running a CCE. As no structure, has been
outlined by the county or city, an average of cost was applied similarly to the administrative costs
associated with Sonoma Clean Power and Marin County Energy.
The CCE Headroom chart illustrates a closer view
of the forecasted year-over-year annual headroom
for the CCE. The red line is the cumulative CCE
headroom.
Packet Pg 106
1
21 October 20, 2017
Alternative - RPS Compliant with a Rate Reduction
As an alternative to Scenario 1, any available headroom is applied as a rate reduction over a 10-year
period. When applying the available
headroom as a rate reduction, the CCE will
have zero ($0) at the end of the 10 years. This
provides an average rate reduction of 4.62%
over the 10 years. When comparing a
customer’s monthly billing, the rate reduction
lowers the monthly bill by an average of
$73.11 per annum over a ten-year period. The
chart illustrates the average monthly invoice,
across all rate classes and a consumption of
500 kWh per month and a delivery rate of
$0.1394 per kWh.
Simulation Analysis
We performed a sensitivity analysis on multiple
variables that are key to determine a probability of a
specific outcome, in this case, forecasted headroom.
Using a statistical modeling simulation software, we
were able to derive probabilistic frequency curves.
These curves are formulated by running thousands of
trials of the model which allow the key variables to
fluctuate based on specific parameters.
Again, we focused on three outcomes: 2018
headroom, 2018-2022 cumulative headroom, and
2018-2027 cumulative headroom. Allowing variables
such as opt-out rates and forward prices on system
generation to fluctuate, the probability of 2018 City
CCE headroom to be greater than the expected
outcome is 47.09%. The modeled expected headroom
is $3,908,504, with a mean of $3,009,003 and a
median of $3,427,841. The probability of the City
2018-2022 CCE headroom to be greater than the
modeled expected outcome of $41,260,248 is 59.59%,
with a mean of $44,588,691 and a median of
$44,826,288. Finally, the probability of the City CCE
2018-2027 headroom to be greater than the modeled
expected outcome of $86,147,916 is 87.61%, with a
mean of $136,352,526 and a median of $137,544,563.
Packet Pg 107
1
22 October 20, 2017
Scenario 2 – 50% Renewable Energy
In the third scenario, the renewable component
has increased to 50% exceeding the RPS
requirements outlined by the CPUC. There is no
rate reduction applied in this scenario. Under the
higher renewable energy scenario, the
headroom for the CCE falls by ~$2,850,000 each
year. The lower headroom is due to the cost or
premium paid to purchase additional renewable
energy than the RPS compliance requirement.
Alternative – 50% Renewable Energy with a Rate Reduction
As an alternative to Scenario 2, any available
headroom is applied as a rate reduction over a
10-year period. When applying the available
headroom as a rate reduction, the CCE will have
zero ($0) at the end of the 10 years. This provides
an average rate reduction of 3.80% over the 10
years. When comparing a customer’s monthly
billing, the rate reduction lowers the monthly bill
by an average of $60.88 per annum over a ten-
year period. The chart illustrates the average
monthly invoice, across all rate classes and a
consumption of 500 kWh per month and a
delivery rate of $0.1394 per kWh.
Packet Pg 108
1
23 October 20, 2017
Simulation Analysis
We performed a sensitivity analysis on multiple variables that are key to determine a probability of a
specific outcome, in this case, forecasted headroom. Using a statistical modeling simulation software, we
were able to derive probabilistic frequency curves. These curves are formulated by running thousands of
trials of the model which allow the key variables to fluctuate based on specific parameters.
Again, we focused on three outcomes: 2018 headroom,
2018-2022 cumulative headroom, and 2018-2027
cumulative headroom. Allowing variables such as opt-out
rates and forward prices on system generation to
fluctuate, the probability of 2018 City CCE headroom to
be greater than the expected outcome is 46.67%. The
modeled expected headroom is $1,060,548, with a mean
of $52,607 and a median of $473,368. The probability of
the City 2018-2022 CCE headroom to be greater than the
modeled expected outcome of $29,078,711 is 58.72%,
with a mean of $32,098,164 and a median of $32,303,954.
Finally, the probability of the City CCE 2018-2027
headroom to be greater than the modeled expected
outcome of $86,147,916 is 87.61%, with a mean of
$118,194,123 and a median of $118,589,650.
Packet Pg 109
1
24 October 20, 2017
Glossary of Terms
aMW: Average annual Megawatt. A unit of energy output over a year that is equal to the energy
produced by the continuous operation of one megawatt of capacity over a period of time (8,760
megawatt-hours).
Basis Difference (Natural Gas): The difference between the price of natural gas at the Henry Hub
natural gas distribution point in Erath, Louisiana, which serves as a central pricing point for
natural gas futures, and the natural gas price at another hub location (such as for Southern
California).
Buckets: Buckets 1-3 refer to different types of renewable energy contracts according to the
Renewable Portfolio Standards requirements. Bucket 1 are traditional contracts for delivery of
electricity directly from a generator within or immediately connected to California. These are the
most valuable and make up the majority of the RECS that are required for LSEs to be RPS
compliant. Buckets 2 and 3 have different levels of intermediation between the generation and
delivery of the energy from the generating resources.
Bundled Customers: Electricity customers who receive all their services (transmission,
distribution and supply) from the Investor-Owned Utility.
CAISO: The California Independent System Operator. The organization is responsible for
managing the electricity grid and system reliability within the former service territories of the
three California IOUs.
California Energy Commission (CEC): The state regulatory agency with primary responsibility for
enforcing the Renewable Portfolio Standards law as well as a number of other, electric-industry
related rules and policies.
California Public Utilities Commission (CPUC): The state agency with primary responsibility for
regulating IOUs, as well as Direct Access (ESP) and CCE entities.
Capacity Factor: the ratio of an electricity generating resource’s actual output over a period of
time to its potential output if it were possible to operate at full nameplate capacity continuously
over the same period. Intermittent renewable resources, like wind and solar, typically have lower
capacity factors than traditional fossil fuel plants because the wind and sun do not blow or shine
consistently.
Category 1: renewable energy and Renewable Energy Certificates (REC’s) from an RPS eligible
facility that is directly interconnected to the distribution or transmission grid within California
Category 2: renewable energy and REC’s from an RPS eligible facility but cannot be delivered to
a California balancing authority without substituting electricity from another source.
Category 3: procurement of unbundled RECs only or not meeting the conditions of Category 1
and 2.
Category 2 Override: the pro forma model will exchange Category 2 renewables for Category 1
renewables.
Climate Zone: A geographic area with distinct climate patterns necessitating varied energy
demands for heating and cooling.
Coincident Peak: Demand for electricity among a group of customers that coincides with peak
total demand on the system.
Community Choice Aggregation: Method available through California law to allow Cities and
Counties to aggregate their citizens and become their electric generation provider.
Packet Pg 110
1
25 October 20, 2017
Community Choice Energy: A City, County or Joint Powers Agency procuring wholesale power to
supply to retail customers.
Congestion Revenue Rights (CRRs): Financial rights that are allocated to Load Serving Entities to
offset differences between the prices where their generation is located and the price that they
pay to serve their load. These rights may also be bought and sold through an auction process.
CRRs are part of the CAISO market design.
Consumption: The use of energy or the amount of energy consumed by an individual or
organization.
Demand Response (DR): Electric customers who have a contract to modify their electricity usage
in response to requests from a utility or other electric entity. Typically, will be used to lower
demand during peak energy periods, but may be used to raise demand during periods of excess
supply.
Direct Access: Large power consumers which have opted to procure their wholesale supply
independently of the IOUs through an Electricity Service Provider.
DWR Bond Charge: an imposed bond charge to recover Department of Water Resources (DWR)
bond costs from bundled customers.
EEI (Edison Electric Institute) Agreement: A commonly used enabling agreement for transacting
in wholesale power markets.
Electric Service Providers (ESP): An alternative to traditional utilities. They provide electric
services to retail customers in electricity markets that have opened their retail electricity markets
to competition. In California the Direct Access program allows large electricity customers to
optout of utility-supplied power in favor of ESP-provided power. However, there is a cap on the
amount of Direct Access load permitted in the state.
Electric Tariffs: The rates and terms applied to customers by electric utilities. Typically have
different tariffs for different classes of customers and possibly for different supply mixes.
Enterprise Model: When a City or County establish a CCE by themselves as an enterprise within
the municipal government.
Federal Tax Incentives: There are two Federal tax incentive programs. The Investment Tax Credit
(ITC) provides payments to solar generators. The Production Tax Credit (PTC) provides payments
to wind generators.
Feed-in Tariff: A tariff that specifies what generators, who are connected to the distribution
system, are paid.
Forward Prices: Prices for contracts that specify a future delivery date for a commodity or other
security. There are active, liquid forward markets for electricity to be delivered at a number of
Western electricity trading hubs, including NP15 which corresponds closely to the price location
which the City of Davis will pay to supply its load.
Implied Heat Rate: A calculation of the day-ahead electric price divided by the day-ahead natural
gas price. Implied heat rate is also known as the ‘break-even natural gas market heat rate,
because only a natural gas generator with an operating heat rate (measure of unit efficiency)
below the implied heat rate value can make money by burning natural gas to generate power.
Natural gas plants with a higher operating heat rate cannot make money at the prevailing
electricity and natural gas prices.
Integrated Resource Plan: A utility's plan for future generation supply needs.
Investor-Owned Utility: For profit regulated utilities. Within California there are three IOUs -
Packet Pg 111
1
26 October 20, 2017
Pacific Gas and Electric, Southern California Edison and San Diego Gas and Electric.
ISDA (International Swaps and Derivatives Association): Popular form of bilateral contract to
facilitate wholesale electricity trading.
Joint Powers Agency (JPA): A legal entity comprising two or more public entities. The JPA
provides a separation of financial and legal responsibility from its member entities.
Load Data: Detailed information related to energy consumption by an individual, organization,
or community.
Load Forecast: A forecast of expected load over some future time horizon. Short-term load
forecasts are used to determine what supply sources are needed. Longer-term load forecasts are
used for budgeting and long-term resource planning.
Marginal Unit: An additional unit of power generation to what is currently being produced. At
and electric power plant, the cost to produce a marginal unit is used to determine the cost of
increasing power generation at that source.
MRTU: CAISO's Market Redesign and Technology Upgrade. The redesigned, nodal (as opposed to
zonal) market that went live in April of 2009.
Net Energy Metering: The program and rates that pertain to electricity customers who also
generate electricity, typically from rooftop solar panels.
Non-Coincident Peak: Energy demand by a customer during periods that do not coincide with
maximum total system load.
Non-Renewable Power: Electricity generated from non-renewable sources or that does not
come with a Renewable Energy Credit (REC).
NP15: Refers to a wholesale electricity pricing hub - North of Path 15 - which roughly corresponds
to PG&E's service territory. Forward and Day-Ahead power contracts for Northern California
typically provide for delivery at NP15. It is not a single location, but an aggregate based on the
locations of all the generators in the region.
Off Peak: time when demand for electricity is low between the hours of 11:00 pm to 6:59 am
during the week days and 24 hours during the weekends.
On-Bill Repayment (OBR): Allows electric customers to pay for financed improvements such as
energy efficiency measures through monthly payments on their electricity bills.
On-Peak: time when demand for electricity is high between the hours 7:00 am and 10:59 pm
during the weekdays.
Operate on the Margin: Operation of a business or resource at the limit of where it is profitable.
Opt-Out: Community Choice Aggregation is, by law, an opt-out program. Customers within the
borders of a CCE are automatically enrolled within the CCE unless they proactively opt-out of the
program.
Power Charge Indifference Adjustment (PCIA): A charge applied to customers who leave IOU
service to become Direct Access or CCE customers. The charge is meant to compensate the IOU
for costs that it has previously incurred to serve those customers.
PPA (Power Purchase Agreement): The standard term for bilateral supply contracts in the
electricity industry.
Rate Stabilization Fund: an amount allocated into a reserve fund to be utilized to offset higher
potential higher rates during rate setting.
Renewable Energy Credits (RECs): The renewable attributes from RPS-qualified resources which
must be registered and retired to comply with RPS standards.
Packet Pg 112
1
27 October 20, 2017
Resource Adequacy (RA): The requirement that a Load-Serving Entity own or procure sufficient
generating capacity to meet its peak load plus a contingency amount (15 percent in California)
for each month.
RPS (Renewable Portfolio Standards): The state-based requirement to procure a certain
percentage of load from RPS-certified renewable resources.
Scheduling Coordinator: An entity that is approved to interact directly with CAISO to schedule
load and generation. All CAISO participants must be or have an SC.
Scheduling Agent: A person or service that forecasts and monitors short term system load
requirements and meets these demands by scheduling power resource to meet that demand.
Spark Spread: The theoretical grow margin of a gas-fired power plant from selling a unit of
electricity, having bought the fuel required to produce this unit of electricity. All other costs
(capital, operation and maintenance, etc.) must be covered from the spark spread.
Supply Stack: Refers to the generators within a region, stacked up according to their marginal
cost to supply energy. Renewables are on the bottom of the stack and peaking gas generators on
the top. Used to provide insights into how the price of electricity is likely to change as the load
changes.
Total CAISO Load: the total electricity need to procure from the CAISO taking in consideration
for line losses. Line losses is wasted electric energy due to inherent inefficiencies or defects in
the distribution or transmission system.
Total Retail Load: the total electricity consumed by consumers (residential and commercial) in a
given period.
Uncollected Factor: a model parameter allocating a percentage of revenue as uncollectable,
otherwise considered bad debt.
Weather-Adjusted: Normalizing energy use data based on differences in the weather during the
time of use. For instance, energy use is expected to be higher on extremely hot days when air
conditioning is in higher demand than on days with comfortable temperature. Weather
adjustment normalizes for this variation.
Wholesale Power: Large amounts of electricity that are bought and sold by utilities and other
electric companies in bulk at specific trading hubs. Quantities are measured in MWs, and a
standard wholesale contract is for 25 MW for a month during heavy-load or peak hours (7am to
10 pm, Mon-Sat), or light-load or off-peak hours (all the other hours).
Packet Pg 113
1
Page intentionally left
blank.
Packet Pg 114
1
Meeting Date: 12/12/2017
FROM: Greg Hermann, Acting Assistant City Manager
Prepared By: Carrie Gallagher, City Clerk
SUBJECT: VICE MAYOR APPOINTMENT FOR 2018
RECOMMENDATION
Appoint Council Member Carlyn Christianson as Vice Mayor to serve a one-year term
commencing upon appointment.
DISCUSSION
Section 408 of the City's Charter requires that the Council elect one of its members to serve in
the position of Vice Mayor.
Section 3.2 of the Council Policies and Procedures provides that the appointment of the Vice
Mayor shall be for a one-year term, that the appointment shall be made on a rotational basis, and
that the appointment shall go to the next senior member. This practice ensures that each Council
Member will have an opportunity to serve as Vice Mayor during his or her term.
Following current Council policy of rotating the Vice Mayor position, and consistent with
Council practice over the past ten years, Council Member Christianson is next in line for the
opportunity to serve as Vice Mayor. The appointment of Vice Mayor for the prior ten years has
been as follows:
1.Council Member Brown 2008
2.Council Member Settle 2009
3.Council Member Carter 2010
4.Council Member Ashbaugh 2011
5.Council Member Carpenter 2012
6.Council Member Smith 2013
7.Council Member Christianson 2014
8.Council Member Ashbaugh 2015
9.Council Member Carpenter 2016
10. Council Member Rivoire 2017
11. Council Member Christianson (Current Recommendation)
Looking to the future, the rotation indicates that either Council Member Gomez or Pease will be
eligible to serve in 2019. This practice ensures that each Council Member will serve one year of
his/her four-year term in the capacity of Vice Mayor.
ENVIRONMENTAL REVIEW
The recommended actions are not subject to the California Environmental Quality Act as it is not
a project as defined under the act.
Packet Pg 115
4
FISCAL IMPACT
There are no fiscal impacts associated with this recommendation.
Packet Pg 116
4
Meeting Date: 12/12/2017
FROM: Greg Hermann, Acting Assistant City Manager
Prepared By: Carrie Gallagher, City Clerk
Heather Goodwin, Deputy City Clerk
SUBJECT: APPOINTMENT TO THE PROMOTIONAL COORDINATING COMMITTEE
(PCC)
RECOMMENDATION
In accordance with the recommendation of the Council Subcommittee:
Confirm the appointment of John Thomas to the Promotional Coordinating Committee to
complete an unexpired term through March 31, 2019.
DISCUSSION
Promotional Coordinating Committee (Council Liaison Subcommittee Members
(Christianson and Rivoire)
Due to the resignation of Patricia Loosley, effective October 1, 2017, an unscheduled vacancy
occurred on the Promotional Coordinating Committee. Ms. Loosley’s term would have expired
on March 31, 2019.
The Council Liaison Subcommittee recommends the appointment of John Thomas, effective
December 12, 2017, to a term expiring March 31, 2019.
RECRUITMENT
Currently, the following Advisory Body has a vacancy and interviews are in the process of being
scheduled with the Council Liaison Subcommittee.
1. Planning Commission (1)
Interested individuals are encouraged to apply to fill vacancies on the following bodies:
1. Area Agency on Aging (1)
2. Construction Board of Appeals (1 citizen at large and 1 representative with disability)
CONCURRENCES
The Council Liaison Subcommittee concurs with the recommendation.
Packet Pg 117
5
ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the recommended actions in this
report, because the action does not constitute a “Project” under CEQA Guidelines sec. 15378.
FISCAL IMPACT
There is no additional fiscal impact for the addition of new PRC members.
AVAILABLE FOR REVIEW IN THE COUNCIL OFFICE
A hard copy of the Mr. Thomas’s Advisory Body application has been provided to the City
Council and is available for public review in the Clerk’s office.
Packet Pg 118
5
San Luis Obispo Page 1
Tuesday, November 21, 2017
Regular Meeting of the City Council
CALL TO ORDER
A Regular Meeting of the San Luis Obispo City Council was called to order on Tuesday,
November 21, 2017 at 4:00 p.m. in the Council Hearing Room, located at 990 Palm Street, San
Luis Obispo, California, by Mayor Harmon.
ROLL CALL
Council Members
Present: Council Members Carlyn Christianson, Aaron Gomez, Andy Pease, Vice Mayor
Dan Rivoire, and Mayor Heidi Harmon.
Council Members
Absent: None
City Staff
Present: Derek Johnson, City Manager; Christine Dietrick, City Attorney; Greg Hermann,
Acting Assistant City Manager; and Carrie Gallagher, City Clerk; were present at
Roll Call. Other staff members presented reports or responded to questions as
indicated in the minutes.
PUBLIC COMMENT ON CLOSED SESSION ITEMS
None.
---End of Public Comment---
Packet Pg 119
7
San Luis Obispo City Council Minutes of November, 21, 2017 Page 2
CLOSED SESSION
A. CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION
Paragraph (1) of subdivision (d) of Government Code § 54956.9;
Name of case withheld as it arises out of an administrative proceeding involving a
confidential personnel matter pending before the Personnel Board and is otherwise exempt
from disclosure per Gov. Code § 54954.5 (c) and under the California Public Records Act.
B. CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION
Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Government
Code § 54956.9: One case.
A point has been reached where, in the opinion of the legislative body of the local agency on
the advice of its legal counsel, based on existing facts and circumstances, there is a
significant exposure to litigation against the local agency. The existing facts and
circumstances exposing the City to litigation arise out of a confidential personnel matter and
therefore are exempt from disclosure pursuant to the California Public Records Act.
C. CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code § 54957.6
Agency Negotiators: Monica Irons, Nickole Sutter, Rick Bolanos,
Derek Johnson, Christine Dietrick
Represented Employee
Organizations: San Luis Obispo City Employee’s Association (SLOCEA)
San Luis Obispo Police Officer’s Association (POA)
San Luis Obispo Police Staff Officer’s Association
(SLOPSOA)
International Association of Firefighters Local 3523
Unrepresented Emplo yees: Unrepresented Management Employees
Unrepresented Confidential Employees
D. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
Paragraph (1) of subdivision (d) of Government Code § 54956.9;
Name of case: Application of Pacific Gas and Electric Company for Approval of the
Retirement of Diablo Canyon Power Plant, Implementation of the Joint Proposal, And
Recovery of Associated Costs Through Proposed Ratemaking Mechanisms (U39E) A: 16-08-
006
ADJOURNED TO THE REGULAR MEETING OF NOVEMBER 21, 2017 TO BEGIN AT
6:00 PM IN THE COUNCIL CHAMBER
Packet Pg 120
7
San Luis Obispo City Council Minutes of November, 21, 2017 Page 3
CALL TO ORDER
A Regular Meeting of the San Luis Obispo City Council was called to order on Tuesday,
November 21, 2017 at 6:00 p.m. in the Council Chamber, located at 990 Palm Street, San Luis
Obispo, California, by Mayor Harmon.
ROLL CALL
Council Members
Present: Council Members Carlyn Christianson, Aaron Gomez, Andy Pease, Vice Mayor
Dan Rivoire, and Mayor Heidi Harmon.
Council Members
Absent: None
City Staff
Present: Derek Johnson, City Manager; Christine Dietrick, City Attorney; Greg Hermann,
Acting Assistant City Manager; and Teresa Purrington, Acting City Clerk; were
present at Roll Call. Other staff members presented reports or responded to
questions as indicated in the minutes.
PLEDGE OF ALLEGIANCE
Council Member Christianson led the Pledge of Allegiance.
CITY ATTORNEY REPORT ON CLOSED SESSION
City Attorney Dietrick stated that there was no reportable action for Closed Session Items A, B,
C, and D and that the Council was represented by outside Counsel for Items A and B and that
there was no city staff in the Closed Session for those items.
PRESENTATIONS
1. PROCLAMATION - MAYOR'S MONARCH PLEDGE
Mayor Harmon presented a Proclamation to Genevieve and Kimberlee Leroux, declaring the
Council’s commitment to help restore the monarch butterflies in the City of San Luis
Obispo.
2. PROCLAMATION - NATIONAL HOSPICE PALLIATIVE CARE MONTH
Mayor Harmon presented a Proclamation to Gracie Rey, representing Hospice SLO County,
proclaiming November 2017 as “National Hospice Palliative Care Month” in the City of San
Luis Obispo.
Packet Pg 121
7
San Luis Obispo City Council Minutes of November, 21, 2017 Page 4
PUBLIC COMMENT ON ITEMS NOT ON THE AGENDA
None
---End of Public Comment---
CONSENT AGENDA
ACTION: MOTION BY COUNCIL MEMBER CHRISTIANSON, SECOND BY
COUNCIL MEMBER GOMEZ, CARRIED 5-0 to approve Consent Calendar Items 3 thru 8.
3. WAIVE READING IN FULL OF ALL RESOLUTIONS AND ORDINANCES
CARRIED 5-0, to waive reading of all resolutions and ordinances as appropriate.
4. MINUTES OF OCTOBER 17, 2017 AND NOVEMBER 7, 2017
CARRIED 5-0, to approve the minutes of the City Council meetings of October 17, 2017
and November 7, 2017.
5. ORDINANCE ADOPTION - ESTABLISHING A SPECIAL TAX FOR THE AVILA
RANCH COMMUNITY FACILITIES DISTRICT NO. 2017-1
CARRIED 5-0, to adopt Ordinance No. 1642 (2017 Series) entitled “An Ordinance of the
City Council of the City of San Luis Obispo, California, as legislative body of Avila Ranch
Community Facilities District No. 2017-1, levying a Special Tax against nonexempt real
property within the district to finance certain facilities, services and incidental expenses.”
6. SUPPLEMENTAL EMPLOYEE POLICY AND MINIMUM WAGE INCREASE
CARRIED 5-0, to:
1. Adopt the revised Supplemental Employee Policy, formerly the Temporary Employee
Policy, and authorize the City Manager to approve future administrative updates; and
2. Adopt Resolution No. 10847 (2017 Series) entitled “A Resolution of the City Council of
the City of San Luis Obispo, California, establishing and adopting a supplemental
employee salary schedule and superseding previous resolutions in conflict” as necessary to
comply with California Fair Wage Act of 2016 requiring a minimum wage of $11.00 per
hour effective January 1, 2018.
7. AUTHORIZATION TO RELEASE A REQUEST FOR PROPOSALS FOR
APPOINTED OFFICIALS’ EVALUATIONS CONSULTANT SPECIFICATION NO.
91636
CARRIED 5-0, to authorize staff to advertise for bids and authorize the City Manager to
award the consultant contract to the lowest responsible bid within the contract budget of
$17,000.
Packet Pg 122
7
San Luis Obispo City Council Minutes of November, 21, 2017 Page 5
8. STREETS MAINTENANCE DUMP TRUCK, TRANSFER DUMP TRAILER, AND
SWEEPER TRUCK PURCHASE, SPECIFICATION NO. 91589 & 91595
CARRIED 5-0, to:
1. Adopt Resolution No.10848 (2017 Series) entitled “A Resolution of the City Council of
the City of San Luis Obispo, California, approving Equipment Lease”; and
2. Approve the lease purchase and authorize the Finance Director to execute a purchase
order to Gibbs Truck Centers in the amount of $256,204.06 for one 2018 International
HX series heavy duty dump truck outfitted with a Reliance transfer dump set; and
3. Approve the lease purchase and authorize the Finance Director to execute a purchase
order to the Sweeper Shop in the amount of $303,052.78 for one 2018 Freightliner M2
heavy duty truck outfitted with a Schwarze M6 Avalanche sweeper unit; and
4. Authorize the City Manager, Finance Director and City Attorney to execute all related
documents on behalf of the City to execute a five-year loan agreement not to exceed
approved budget; and
5. Authorize the surplus designation of Fleet Asset No. 9713, a 1994 Freightliner heavy
duty dump truck, Fleet asset 1102, a 2007 Reliance transfer dump trailer, and Fleet Asset
No. 0817, a 2008 International street sweeper truck by sale, auction, trade-in or other
method in accordance with the City’s policies and procedures as prescribed in the
Financial Management Manual Section 405-L and 480.
PUBLIC HEARING ITEMS AND BUSINESS ITEMS
9. PUBLIC HEARING - RESOLUTION OF INTENT TO APPLY THE PENDING
CAPITAL FACILITIES FEE PROGRAM AND WATER AND WASTEWATER
CAPACITY AND CONNECTION FEE PROGRAM TO NEW DEVELOPMENT
Community Development Director Codron and Community Development Deputy Director
Fowler provided an in-depth staff report and responded to Council questions.
Public Comments:
Travis Fuentas
Dante Angelmo
---End of Public Comment---
ACTION: MOTION BY VICE MAYOR RIVOIRE, SECOND BY COUNCIL
MEMBER CHRISTIANSON, CARRIED 5-0 to adopt Resolution No. 10849 (2017 Series)
entitled “A Resolution of the City Council of the City of San Luis Obispo, California, setting
forth intent to apply the pending Capital Facilities Fee Program and Water and Wastewater
Capacity and Connection Fee Program to new development” should those projects be issued
building permits on or after the publication of the updated development impact fee program.
Packet Pg 123
7
San Luis Obispo City Council Minutes of November, 21, 2017 Page 6
10. CODE ENFORCEMENT PRIORITIES
Community Development Director Codron and Chief Building Official Schneider provided
an in-depth staff report and responded to Council questions.
Public Comments:
Michelle Tasseff
---End of Public Comment---
Receive a presentation, take public testimony, and provide direction to staff regarding:
1. Overall code enforcement priorities to guide the allocation of staff time and other
resources in the Building and Safety Division of the Community Development
Department (CDD); and
2. Direction regarding the use of enforcement tools - such as recorded notices of
violation and increased and new fees and fines - to improve the efficiency and
effectiveness of code enforcement activities; and
3. The scope and priority of a Safe Housing Outreach and Education Program for
landlords and tenants; and
4. Additional program activities and enhancements to pursue as resources permit.
Council supported staff’s recommendation without the voluntary inspections program and
self-certification program. Staff to return with Ordinances and/or Resolutions to implement
the changes to the code enforcement process and a new fine structure.
RECESS
Council recessed at 7:55 p.m. and reconvened at 8:00p.m., with all Council Members present.
11. DIABLO CANYON NUCLEAR POWER PLANT- JOINT PROPOSAL PROPOSED
DECISION
City Manager Johnson provided an in-depth staff report and responded to Council questions.
Public Comments:
None
---End of Public Comment---
Packet Pg 124
7
San Luis Obispo City Council Minutes of November, 21, 2017 Page 7
ACTION: MOTION BY VICE MAYOR RIVOIRE, SECOND BY COUNCIL
MEMBER CHRISTIANSON, CARRIED 5-0 to receive a report on the Administrative Law
Judge’s Proposed Decision for the Joint Proposal to close the Diablo Canyon Nuclear Power
Plant and authorize the City to advocate for legislation if necessary to fund the Community
Impacts Mitigation Program (CIMP).
12. ORDINANCE INTRODUCTION - AMENDMENT AND READOPTION OF THE
CURRENT ELECTION CAMPAIGN REGULATIONS
Acting Assistant City Manager and Acting City Clerk Purrington provided an in-depth staff
report and responded to Council questions.
Public Comments:
None
---End of Public Comment---
ACTION: MOTION BY COUNCIL MEMBER PEASE, SECOND BY COUNCIL
MEMBER CHRISTIANSON, CARRIED 5-0 to reaffirm City law by amending and
readopting Chapters 2.40.010 through 2.40.140 of the City of San Luis Obispo Municipal
Code by Ordinance No. 1643 (2017 Series) entitled “An Ordinance of the City Council of
the City of San Luis Obispo, California, readopting and amending Chapter 2.40 of the
Municipal Code related to Election Campaign Regulations.”
COUNCIL COMMUNICATIONS AND LIAISON REPORTS
Council Liaison Reports received from Council Member Pease, Council Member Christianson,
and Mayor Harmon,
ADJOURNMENT
The Regular City Council Meeting of December 5, 2017 was previously cancelled. The next
Regular City Council Meeting is scheduled for Tuesday, December 12, 2017 at 4:00 p.m. and 6:00
p.m., in the Council Chamber, 990 Palm Street, San Luis Obispo, California.
__________________________
Teresa L. Purrington
Acting City Clerk
APPROVED BY COUNCIL: XX/XX/2017
Packet Pg 125
7
Page intentionally left
blank.
Packet Pg 126
7
Meeting Date: 12/12/2017
FROM: Michael Codron, Community Development Director
Prepared By: David Watson, Contract Planner
Diane Dostalek, Senior Civil Engineer
SUBJECT: APPROVE CORRECTIONS TO THE ORCUTT AREA SPECIFIC PLAN
PARK FEES
RECOMMENDATION
Adopt a resolution (Attachment C) approving corrections to the Orcutt Area Specific Plan (OASP)
park fees.
DISCUSSION
Background
During the adoption of the 2010 Orcutt Area Specific Plan (OASP), a public infrastructure fee
program was included to provide for the collection of fees from individual development projects
to collectively contribute to a variety of roadway, utility, bicycle and park improvement projects
to serve the developing neighborhood. This fee program is referred to as the Public Facilities
Financing Plan (PFFP). The park fee component of the PFFP was created to fund the acquisition
and development of 16.5 acres of public parklands in four planned public parks to serve the
future residents of the OASP. The following list summarizes the parks and recreation projects
planned to serve the Project:
• Central Neighborhood Park - 12.6 Acres
• Pocket Park - 0.5 Acres
• Linear Park System - 1.2 Acres
• Trail Junction Park – 2.2 Acres
A majority of this park acreage is located on what has been referred to as the Righetti Ranch
development project (Tract 3063 – Ambient Communities). The adopted OASP recognizes that
it would be inequitable to exclusively set aside acreage on Righetti Ranch to serve the entire
planning area, and therefore establishes under the PFFP a mechanism to collect fees from other
OASP owners to contribute to the land being set aside and acquired on the Righetti site, in -lieu
of the other owners putting isolated public parks on each of their individual sites.
The City’s current fee structure for the OASP combines the park improvement fee and the
parkland acquisition in-lieu fee into a single fee. The 2017/18 fiscal year fee rate is $13,365 for
each single-family dwelling unit and $9,834 for each multi-family dwelling unit. The OASP Park
fees are due upon building permit issuance. To date, no OASP Park fees have been collected
from any developments because no building permits have been issued on the affected properties.
The proposed corrections to the OASP park fees not only correct a mathematical error in the
calculation of the parkland acquisition in-lieu fee, but also separate out the park improvement fee
Packet Pg 127
8
from the parkland acquisition in-lieu fee to accurately track credits due to the Righetti Ranch
developers and identify available funding for park construction (park improvement fees).
Proposed Corrections to the OASP Park Fees
Two (2) corrections to the OASP Park Fees are proposed:
1. Correct and update the in-lieu fees due from non-Righetti developers that are contributing
to the lands being set aside on the Righetti Ranch site, under a formula that identifies
each property’s parkland acreage needed to support their planned resident populations,
and
2. Separate the in-lieu parkland acquisition fee from the park improvement fee to properly
track these fees and their use separately.
In accordance with the Quimby Act (California Government Code Section 66477) and
Section 16.22 of the City’s Municipal Code, a parkland need shall be calculated for each
property based on projected populations of each project. Those developments which are not
contributing parkland or are not contributing enough parkland, will be required to contribute an
“in-lieu” fee representing their fair share of parkland acquisition needs. The fee will be collected
from each owner as they develop their properties and be used to reimburse Righetti for their
excess land dedications.
The in-lieu fee, also referred to as the “Parklands Acquisition Fee”, was designed to reimburse
Righetti Ranch for the areas of public parks they have set aside beyond their project’s
requirements. The total land value of the OASP parklands was set in 2009 at approximately $6.6
million. Righetti’s required share of parkland dedication is valued at $3.1 million, for which they
are not being reimbursed. Righetti is contributing an additional $3.54 million in land for park
development to satisfy non-Righetti developer needs, which will be eligible for reimbursement
through in-lieu fees paid by those other developers.
Table 9 from the November 15, 2016, City Council Update of the PFFP (Attachment A),
identifies the property owners required to contribute to the in-lieu fee. There was a mathematical
error in Table 9 from 2016 where the in-lieu fee was calculated using gross property acreage
rather than projected resident populations. Revised Table 9 (Attachment B) corrects the
calculation of the required public parklands needed from each project, and then extrapolates that
acreage requirement into an in-lieu fee. The proposed changes to Table 9 are highlighted in red
on Attachment B.
The Garay property, which is located within the OASP boundaries, can be self-contained with
respect to the provision of parkland dedication, and is therefore excluded from the area-wide fee
calculations for parkland acquisition in Table 9.
Packet Pg 128
8
The 2010 OASP and PFFP established an in-lieu fee base rate for reimbursement purposes of
$300,000/acre of public parklands. This base rate reflects the amount to be paid by each owner
in proportion to the number of acres they need to serve their resident population. For example,
for every 1,000 residents in a project, 10 acres of public parklands is required. The
$300,000/acre was a rate negotiated with the Righetti landowners at that time and is not subject
to escalation.
In the case of the PFFP, one additional nuance was added to the parklands acquisition in-lieu fee
calculation that differentiates the per-acre rate of contributions from a smaller sub-set of OASP
owners. In the case of the Jones and Pratt properties, these sites were planned to co nvey their
total storm water runoff discharges to the drainage basin designed into Righetti, paralleling the
railroad tracks. In this manner, Righetti is providing both storm water capacity as well as
parklands to serve the Jones and Pratt needs. For this, the rate of contribution per required acre
of parklands is increased to $400,000 for the Jones and Pratt properties. This increase in land
value for those properties receiving the added benefit of off-site storm water capacity rather than
providing on-site stormwater basins was conceived and approved with the establishment of the
PFFP and is not proposed for change with these revisions
Revised Table 9 (Attachment B) provides more detail as to the factors contributing to the final
calculations. The projected population for each property is included, which translates directly
into the in-lieu acreage required from each project. Using the $300,000 or $400,000 base
valuations and the required acreages described above, those numbers are then divided into th e
total in-lieu fees to arrive at a specific in-lieu fee charge per property.
Revised Table 9 also allocates these in-lieu fees between the single-family residential (SFR) and
multi-family residential (MFR) units planned for each property. Because the anticipated average
population from a SFR (2.46 persons) varies from an MFR unit (1.83 persons), the in -lieu fee by
unit type is differentiated to properly reflect each unit’s fair share of the total parklands
acquisition program. Table 1, below, provides a side-by-side comparison of the existing fees and
the corrected fees due from each property, broken down by SFR or MFR unit type.
Packet Pg 129
8
Table 1
Parkland In-Lieu Fee
2017/18 Fiscal Year Fee Rates
The proposed OASP park fee correction also includes separating out the Parklands Acquisition
In-Lieu Fee and the Park Improvement Fee. The 2016 total cost of park improvements, excluding
land acquisition, for the four parks is estimated to be just over $6.0 million. This cost was
allocated to the residential land uses based on the number of residents served. The 2017/18 fiscal
year rate for this equates to $6,717 per single family residential unit and $4,997 for multi -family
residential unit. As noted in the OASP, the Righetti Ranch developers are not required to
construct the park, only dedicate the land. Therefore, they will not receive credit for the portion
of the Park Fee that is allocated to Park Improvement. By separating out the Park Improvement
fee from the Parkland Acquisition Fee, staff will be able to better track available funds for
constructing the parks.
Below is a table showing a comparison of the total existing OASP park fees for the 2017/18
fiscal year, and what the corrected fees would be if Council approves them.
Property
Existing
Parklands
Acquisition
In-Lieu Fee
Existing Per
SFR Fee
Existing Per
MFR Fee
Corrected
Parklands
Acquisition
In-Lieu Fee
Corrected
SFR Fee
Corrected
MFR Fee
Pratt 1 - 024 $212,381 $0 $3,861 $307,132 $0 $5,866
Pratt 2 – 007 $316,640 $0 $3,861 $457,905 $0 $5,866
Taylor-Muick $578,255 $4,604 $3,425 $707,181 $5,914 $4,400
West Creek $888,620 $6,124 $4,555 $816,966 $5,914 $4,400
Anderson $258,236 $0 $3,354 $322,488 $0 $4,400
Evans $271,268 $0 $3,391 $335,053 $0 $4,400
Farrior $36,684 $0 $4,585 $33,505 $0 $4,400
Fiala $45,855 $11,464 $0 $22,520 $5,914 $0
Hall $54,543 $0 $4,958 $46,070 $0 $4,400
Imel $316,158 $18,598 $0 $95,710 $5,914 $0
Jones $561,361 $10,655 $7,927 $395,472 $7,885 $5,866
Totals $3,540,000 $3,540,000
Packet Pg 130
8
Table 2
OASP Park Fee
2017/18 Fiscal Year Fee Rates
Existing Corrected
OASP
Park Fee
OASP
Parklands
Acquisition
In-Lieu Fee
OASP
Park Improvement
Fee
Total
OASP
Park Fee
Single-Family
Unit $13,365 See Table 1 above $6,717 Varies
$12,631 to $14,602
Multi-Family
Unit $9,834 See Table 1 above $4,997 Varies
$9,397 to $10,863
Public Outreach
Discussion with affected OASP property owners began earlier this year, when the mathematical
error was initially identified. Each of the active development projects participated in meetings
with staff to review a corrected Table 9 calculation. This interaction occurred over the first six
months of this year. More recently, conversations with the Ambient, West Creek and Mangano
development interests have included review of the updated Table and the cost implications that
has for their individual projects.
Early in September, staff contacted all the affected property owners either by email or letter
notifying them of the proposed correction. Follow-up emails or letters were also sent in
mid-November to inform the affected property owners of the date of the Council meeting. As of
the preparation of this Report, no follow-up questions or concerns have been raised by any of the
affected OASP owners.
CONCURRENCES
The Parks and Recreation Department concurs with the recommended action.
ENVIRONMENTAL REVIEW
The Orcutt Area Specific Plan (OASP) and an associated Final Environmental Impact Report
(FEIR) were approved and certified in March 2010. Implementation of the Public Facilities
Financing Plan (PFFP), including actions such as the proposed 2016 PFFP Update, were
anticipated as mitigation measures to secure needed infrastructure in supporting orderly growth
in the OASP Planning Area. In this case, the corrections to Table 9 are consistent with t hese
earlier CEQA determinations and is statutorily exempt pursuant to Section 15273 of the CEQA
Guidelines. Therefore, no further environmental review is required.
Packet Pg 131
8
FISCAL IMPACT
There is no financial impact to the City associated with revising these fees because the project is a
correction of a previously approved fee. Acquisition and development of the OASP parks will be
funded through fees collected from developers within the Orcutt Area, as outlined in the Orcutt
Area Specific Plan.
ALTERNATIVES
Continue the Proposed Correction to the OASP Park Fees Pending Additional Information
Required. Council may elect to continue this item to provide additional clarifications or
information needed to render a decision. Should Council elect this alternative, direction should
be provided to staff as to the additional information needed.
Deny Approval of the Proposed Correction to OASP Park Fees. Council may elect not to
approve the corrections if findings are made that the proposed corrections are inconsistent with
San Luis Obispo’s Municipal Code, State Law, or the OASP. Denial is not recommended unless
required findings are made.
Attachments:
a - Table 9 from 11-15-16 Council Report
b - Revised Table 9
c - Draft Resolution Approving Revisions
Packet Pg 132
8
- Existing as of November 2016Packet Pg 1338
Table 9
City of San Luis Obispo
Orcutt Area Specific Plan Public Facilities Financing Plan
Parkland Acquisition In-Lieu Fee (1)
Baseline
In-lieu 2010 Share of In-Lieu Fee In-Lieu Fee
Property Owner Property Owner Property Projected Acreage Land Value In-lieu Fee Total Per Single-Per Multi-
(2010 reference)(2016 reference)Acreage Population (2)Required (3)Per Acre (4)Value (5)In-Lieu Fee (6)Family Unit Family Unit
Pratt (1 - 024)Pratt (1 - 024)5.41 101 1.01 400,000$ 9.11%322,631$ $5,866
Pratt (2 - 007)Pratt (2 - 007)5.55 150 1.50 400,000$ 13.59%481,014$ $5,866
Muick Taylor-Muick 11.98 235 2.35 300,000$ 15.94%564,220$ $5,914 $4,400
Midstate Robbins Reed - West Creek 11.75 165 1.65 300,000$ 11.19%396,245$ $5,914
Maddalena Robbins Reed - West Creek 6.66 192 1.92 300,000$ 13.05%461,949$ $4,400
Anderson Anderson 5.35 141 1.41 300,000$ 9.57%338,763$ $4,400
Evans Evans 5.62 146 1.46 300,000$ 9.94%351,961$ $4,400
Farrior Farrior 0.76 15 0.15 300,000$ 0.99%35,196$ $4,400
Fiala Fiala 0.95 10 0.10 300,000$ 0.67%23,656$ $5,914
Hall Hall 1.13 20 0.20 300,000$ 1.37%48,395$ $4,400
Imel Ambient Communities-Righetti Ranch 6.55 42 0.42 300,000$ 2.84%100,540$ $5,914
Jones Ambient Communities-Jones Ranch 11.63 130 1.30 400,000$ 11.74%415,430$ $7,885 $5,866
73.34 1346 13.46 100.00%3,540,000$
(1) Refer to Appendix B in the report for supporting documentation
(2) 2.46 persons per Single-Family Residence; 1.83 persons per Multi-Family Residence; Totals Rounded
(3) Derivation of acreage based on units and population provided; Generally 1 acre of parks required/100 residents; Refer to 2009 PFFP Appendix B for supporting documentation
(4) Allocated contributions for land values per acre are higher for Pratt and Jones as they benefit from storm drainage capacity included with Righetti Ranch basin
(5) The 2010 values calculate to a total of $4,630,370. In 2016 the City Council update to the PFFP included setting the total in-lieu fee due Righetti Ranch at $3,540,000. The "Baseline Share" is
arrived at by dividing each property's 2010 land value for their required acres by the $4,630,370 calculated value.
(6) Total In-lieu Fee due by propertty is set by multiplying the Baseline % against the $3,540,000 value set in 2016.
Source: City of San Luis Obispo; Orcutt Area Specific Plan Table A-2 (Final, May 2010); Goodwin Consulting group, Inc.
Updated: City of San Luis Obispo; Watson Planning Consultants, Inc. August 24, 2017
PFFP Table 9 revisited 08-24-2017 - 8-24-2017 Current as of: 8/24/2017Packet Pg 134
8
R _____
RESOLUTION NO. (2017 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SAN LUIS OBISPO, CALIFORNIA, APPROVING CORRECTIONS TO THE
ORCUTT AREA SPECIFIC PLAN PARK FEES
WHEREAS, in 2010 the City Council adopted the Orcutt Area Specific Plan (OASP) that
included a Public Facilities Financing Plan (PFFP) that established a program for providing public
parks within the OASP Planning Area; and
WHEREAS, the OASP and PFFP established a program of centralizing public parks on the
property known as the Righetti Ranch site, for the use and benefit the entire plan area; and
WHEREAS, by centralizing parks on one property, the OASP established a program of
requiring other owners within the OASP to contribute “in-lieu” fees to cover a fair share contribution
to Parklands Acquisition on the Righetti site; and
WHEREAS, the 2010 OASP and PFFP set fees for each property within the plan area, and
called for the periodic update of those fees; and
WHEREAS, in 2016, the City Council updated the PFFP, and following that action an error
in the formula for calculating Parklands Acquisition In-Lieu Fees was discovered that did not
equitably spread the full cost of in-lieu fee reimbursements over all benefitting OASP properties; and
WHEREAS, corrections to the Parklands Acquisition In-Lieu Fee formula to properly
allocate those fair share contributions to each benefitting property is appropriate and timely; and
WHEREAS, the existing fee structure for the OASP combines both the Parklands
Acquisition In -Lieu Fee and the Park Improvement Fee into a single fee, which inhibits the ability
to accurately manage fee credits due developers when they dedicate parkland and/or build park
improvements within their respective subdivisions.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Continued Findings. The corrections to the Orcutt Area Specific Plan
(OASP) Parklands Fees are based on the City Council making the following continued findings:
(A) The purpose for the OASP Parklands Fees are to establish an equitable method of
sharing the costs of (i) acquiring lands for public parks within the OASP, and (ii) providing a
mechanism for improvement of those public parks in a manner consistent with the City General Plan,
Parks and Recreation Element and the OASP detailed planning policies for the Plan Area. Because
there are multiple ownerships within the OASP, locating public parklands in the appropriate locations
did not necessarily follow discrete property ownerships, instead placing the burden for providing
public parks in areas that were disproportionate to land ownership patterns. Effectively, one property
owner (Righetti Ranch) was burdened with providing nearly all the public parklands for the entire
Packet Pg 135
8
Resolution No. (2017 Series) Page 2
R _____
OASP. To reconcile the inequity of locating public parks largely on a single site, a program for
collecting a fair share of the costs of those lands spread across all OASP owners became the
“Parklands Acquisition In-Lieu Fee” due for any and all developing properties within the OASP.
Addressing an equitable method for improving these public parks, a fee for the construction of the
public parks was codified as the “Parkland Improvement Fee”.
(B) The use of the fees is twofold. The “Acquisition Fee” was established to compensate
the owners of the Righetti site for public park lands they set aside above and beyond their project’s
fair share demands, to provide those additional lands for use by other owners within the OASP area,
and to alleviate the land area dedications for parks otherwise required on individual sites, freeing up
those areas for residential and/or commercial development in furtherance of the goals of the OASP.
The “Improvement Fee” is collected from all developing properties and used by the City to fund the
construction of the project improvements.
(C) There is a continued need for the improvements and there is a reasonable relationship
between the fee and the demand for public parks created by new residential development and the
provision of those lands and improvements within the OASP area based on established City policy.
Specifically, the OASP establishes 16.5 acres of public parks that are subject to this Fee program, and
anticipates another ~4 acres of public park space located within the OASP area. The “Acquisition”
and “Improvement” Fees referenced herein and under the OASP are directed at completing the 16.5
acres called for as public parks in the Plan Area.
(D) The sources and amounts of funding anticipated to complete the financing of the
improvements have been identified and will be deposited into the appropriate account upon receipt
and used to fund such improvements.
SECTION 2. The modifications to Table 9 of the Public Facilities Financing Plan and Orcutt
Area Specific Plan as set forth in Exhibit “A” attached hereto and incorporated herein, are hereby
approved.
SECTION 3. The Community Development Director is authorized to administer and
implement these fees as provided therein.
SECTION 4. The Mayor and City staff are authorized to take action necessary to carry out
the intent of this resolution.
SECTION 5. Environmental Review. The Orcutt Area Specific Plan (OASP) and an
associated Final Environmental Impact Report (FEIR) were approved and certified in March 2010.
Implementation of the Public Facilities Financing Plan (PFFP), including actions such as the 2016
Update of the PFFP, were anticipated as mitigation measures to secure needed infrastructure in
supporting orderly growth in the OASP Planning Area. In this case the corrections to Table 9 are
consistent with these earlier CEQA determinations and is statutorily exempt pursuant to Section
15273 of the CEQA Guidelines. Therefore, no further environmental review is required.
Packet Pg 136
8
Resolution No. (2017 Series) Page 3
R _____
Upon motion of _______________________, seconded by ________________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this ______ day of _______________ 2017.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Carrie Gallagher
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, _________.
____________________________________
Carrie Gallagher
City Clerk
Packet Pg 137
8
Resolution No. (2017 Series) Page 4
R _____
EXHIBIT 1
Packet Pg 1388
Meeting Date: 12/12/2017
FROM: Michael Codron, Community Development Director
Prepared By: Diane Dostalek, Senior Civil Engineer
SUBJECT: QUITCLAIM DEED FOR EASEMENTS ACROSS THE PROPERTY
LOCATED AT 4450 BROAD STREET
RECOMMENDATION
Adopt a resolution (Attachment F) authorizing the Mayor to execute a quitclaim deed for easements
across the property located at 4450 Broad Street.
DISCUSSION
Background
The Airport Business Center project located at 4450 Broad Street is currently under construction.
A vicinity map and project layout are shown on Attachment A. A recent title search of the
property discovered two existing easements that had not been discovered during previous title
searches. These easements were private easements reserved via a parcel map (37 PM 44) and a
grant deed (2712 OR 438). The easements were intended to provide access and utilities from
Broad Street to a rear parcel which did not have any frontage on Broad Street. The general
location of these easements is shown in Attachment B.
That rear parcel was eventually developed as Tract 2289 and the City acquired fee title to open
space creek Lot 49 of Tract 2289. The creek lot severs the connection between the homes and
streets in Tract 2289 and Broad Street, and there was never any intention to retain this access
when Tract 2289 and the Airport Business Center properties developed.
The developer of Tract 2289 attempted to quitclaim the rights to these easements before the City
acquired fee title to Lot 49, (see Attachment C), but that deed did not capture all the easement s
that needed to be quitclaimed, so remnant portions remained. The title company has determined
that the City became the dominant tenement of these remnant easements by default when the
City obtained fee title of Lot 49.
One of the Airport Business Center buildings (Building “A”, also known as Building “1”) is
being constructed over these easements, so the developer has requested that the City quitclaim its
rights to these easements. Attachment D shows these easements in relation to the Airport
Business Center project.
Resolution No. 5370 (1984 Series) authorizes the Mayor or Vice-Mayor to accept easement
dedications on behalf of the City, but there is no corresponding blanket resolution that authorizes
the Mayor or Vice-Mayor to quitclaim easements from the City to others.
Packet Pg 139
9
Quitclaim
Because these easements were never dedicated to the City as public easements, the vacation
procedures outlined in the California Streets & Highways Code are not relevant. Instead, a
Quitclaim Deed can be used to quitclaim any rights that the City may have to these easements. A
draft quitclaim is included as Attachment E. A resolution authorizing the Mayor to sign this
quitclaim is included as Attachment F.
CONCURRENCES
The Public Works Director and the Natural Resources Manager have reviewed the
recommendation contained herein finding that the easements have no practical utility for future
City purposes, and concur with the recommended action.
ENVIRONMENTAL REVIEW
Because this quitclaim does not need to follow the procedures of the California Streets &
Highways Code, it is not considered a project under CEQA and no environmental review is
required.
FISCAL IMPACT
There is no financial impact to the City associated with quitclaiming this easement. The cost to
process the quitclaim has been paid by the applicant.
ALTERNATIVES
Continue the Quitclaim Item Pending Additional Information Required. Council may elect to
continue this item to provide additional clarifications or information needed to render a decision.
Should Council elect this alternative, direction should be provided to staff as to the additional
information needed.
Deny approval of the Quitclaim. Council may choose to deny approval of the Quitclaim. This
alternative is not recommended because the easements are not needed and their existence is
interfering with the applicant’s ability to develop and finance their project.
Attachments:
a - Airport Business Center project
b - General location of easements
c - Original Quitclaim Deed
e - New Quitclaim Deed
f - Draft Resolution Approving Revisions
d - Specific location of easements
Packet Pg 140
9
Packet Pg 1419
Packet Pg 1429
Packet Pg 143
9
Packet Pg 144
9
Mail Tax Statements To: SAME AS ABOVE
-------------------------------------------------------------------------------------------------------------------------------------
RECORDING REQUESTED BY:
First American Title
MAIL TAX STATEMENT
AND WHEN RECORDED MAIL DOCUMENT TO:
City of San Luis Obispo
919 Palm Street
San Luis Obispo
Space Above This Line for Recorder’s Use Only
QUITCLAIM DEED
A.P.N.: Portion of 053-412-004 File No.: 4001-5049228 (LI)
The Undersigned Grantor(s) Declare(s):
CITY TRANSFER TAX $
DOCUMENTARY TRANSFER TAX $-0-
SURVEY MONUMENT FEE $
[ X ] computed on the consideration or full value of property conveyed, OR
[ ] computed on the consideration or full value less value of liens and/or encumbrances remaining at time of sale,
[ ] unincorporated area; [ X ] City of San Luis Obispo, and
SURVEY MONUMENT FEE $
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, The City of San Luis Obispo, a
municipal corporation and charter city
does hereby remise, release and forever quitclaim to Evitare, LLC, a California limited liability company
the following described easements in the City of San Luis Obispo, County of San Luis Obispo, State
of California:
20' ACCESS AND P.U.E. EASEMENT AS RESERVED AND SHOWN ON PARCEL MAP CO 80-0153,
RECORDED MAY 24, 1985 IN BOOK 37, PAGE 44 OF PARCELS MAPS, OVER THE
NORTHWESTERLY 20 FEET OF PARCEL A OF SAID PARCEL MAP; AND THAT CERTAIN
EASEMENT FOR INGRESS, EGRESS AND PUBLIC UTILITIES OVER THE NORTHWESTERLY 40
FEET OF PARCEL A OF SAID PARCEL MAP AS RESERVED IN GRANT DEED RECORDED MAY 31,
1985 AS INSTRUMENT NO. 29838, BOOK 2712, PAGE 438 OF OFFICIAL RECORDS
Packet Pg 145
9
Page 2 of 3
Dated: ________________
The City of San Luis Obispo, a municipal corporation and charter city
___________________________________________
By: Heidi Harmon, Mayor
(Authorization - Resolution No. ___________________)
Packet Pg 146
9
Page 3 of 3
A.P.N.: Portion of 053-412-004 File No.: 4001-5049228 (LI)
STATE OF ____________________ )SS
COUNTY OF ____________________ )
On _________________________________, before me, _____________________________________, Notary
Public, personally
appeared ____________________________________________________________________________________
________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is
true and correct.
WITNESS my hand and official seal.
Signature
__________________________________
This area for official notarial seal
Packet Pg 147
9
R _____
RESOLUTION NO. (2017 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SAN LUIS OBISPO, CALIFORNIA, AUTHORIZING THE MAYOR TO
EXECUTE A QUITCLAIM DEED FOR EASEMENTS ACROSS THE
PROPERTY LOCATED AT 4450 BROAD STREET
WHEREAS, as a result of the City acquiring fee title of Lot 49 in Tract 2289, the City became
a dominant tenement of several private easements across the property located at 4450 Broad Street
(the servient tenement); and
WHREAS, the subdivider of Tract 2289 attempted to quitclaim the easements before the City
took over fee title, but the quitclaim erroneously omitted several easements; and
WHEREAS, the owner of the servient tenement has requested that the City abandon these
remaining easements; and
WHEREAS, the easements are interfering with the property owner’s ability to develop and
finance a project on the servient tenement; and
WHEREAS, the easements are not needed for any public purpose; and
WHEREAS, abandoning these easements is not subject to the California Streets and
Highways Code procedures because they are not public easements.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. The above recitals are true and correct and incorporated herein by this
reference.
SECTION 2. The City Council hereby approves and authorizes the Mayor to execute the
Quitclaim Deed to quitclaim the City’s interests in the easements across the property located at
4450 Broad Street.
SECTION 3. The Mayor and City staff are authorized to take action necessary to carry out
the intent of this resolution.
Upon motion of _______________________, seconded by ________________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
Packet Pg 148
9
Resolution No. (2017 Series) Page 2
R _____
The foregoing resolution was adopted this ______ day of _______________ 2017.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Carrie Gallagher
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, _________.
____________________________________
Carrie Gallagher
City Clerk
Packet Pg 149
9
Packet Pg 150
9
Packet Pg 151
9
Page intentionally left
blank.
Packet Pg 152
9
Meeting Date: 12/12/2017
FROM: Carrie Mattingly, Utilities Director
Prepared By: Aaron Floyd, Utilities Deputy Director - Water
Jennifer Metz, Utilities Projects Manager
Mychal Boerman, Water Resources Program Manager
SUBJECT: 2017 WATER RESOURCES STATUS REPORT
RECOMMENDATION
Receive and file the 2017 Water Resources Status Report.
DISCUSSION
The 2017 Water Resources Status Report (2017 Report; Attachment A) provides an overview
and update on the City's water resources. This report covers Water Year 2017; which extends
from October 1 through September 30. These reports have been provided to the City Council and
community since 1985 and serve to both inform future policy decisions as well as provide
historical documentation of water conditions.
2016 Water Year
Summary
2017 Water Year
Summary Change
Total Water Use: 4,731 acre feet 4,975 acre feet +344 acre feet
Potable Water Use 4,529 acre feet 4,746 acre feet +217 acre feet
Recycled Water Use 202 acre feet 229 acre feet +27 acre feet
2017 Population 46,117 residents 46,724 residents +607 residents
Per Capita Demand Per Day (Potable Only) 88 gallons 91 gallons +3 gallons
Water Projection Model
(as of September 30, 2017) >5 years of supply >5 years of supply -
Water Resource Availability: 12,109 acre feet 12,115 acre feet +6 acre feet
Salinas & Whale Rock Reservoirs 6,940 acre feet 6,940 acre feet -
Nacimiento Reservoir 5,482 acre feet 5,482 acre feet -
Recycled Water (from 2016) 187 acre feet 193 acre feet +6 acre feet
Siltation (from 2010 to 2060)1 (500) acre feet (500) acre feet -
Water Supply Accounting: 12,109 acre feet 12,115 acre feet +6 acre feet
Primary Water Supply 2 7,496 acre feet 7,496 acre feet -
Reliability Reserve 3 1,209 acre feet 1,225 acre feet +16 acre feet
Secondary Water Supply 4 3,404 acre feet 3,394 acre feet -10 acre feet
NOTES:
1.Siltation losses at Salinas and Whale Rock Reservoirs are accounted for consistent with General Plan Policy A 4.2.2, The
City’s water supply from Nacimiento Reservoir is a contractual supply and would not be reduced by siltation losses.
2.Per General Plan Policy A 5.2.2, primary water supply is the amount of water needed for General Plan build -out using the
water use rate established by policy A 5.2.1 (117 gallons per capita per day).
3.Per General Plan Policy A 5.2.3, reliability reserve that is 20 -percent of the water use rate established in Policy A 5.2.1
multiplied by the City’s current population (46,724 in 2017).
Packet Pg 153
10
4. Per General Plan Policy A 5.2.4, secondary water supply is the remaining City water supply available after accounting for
primary water supply and a reliability reserve.
5. Values are rounded.
The 2017 Report was prepared in accordance with the General Plan, Water and Wastewater
Management Element, Policy A5.3.1. Highlights from the 2017 Report include:
• Beginning in October 2016, the City received abundant rainfall with over 35 inches at
San Luis Obispo Reservoir, where average annual rainfall is approximately 25 inches.
• In January, the City declared Climate Action a top priority during its major city goal-
setting workshop and identified objectives focused on energy efficiency and
greenhouse gas reductions within City facilities, such as the City’s Water Treatment
Plant and Water Resource Recovery Facility.
• In March, the City Council adopted a resolution approving the 2017 Recycled Water
Master Plan and authorized staff to negotiate an agreement for delivery of recycled
water outside the city limits consistent with policies and findings identified in the
General Plan.
• In April, Governor Brown issued Executive Order B-40-17 ending the drought state
of emergency in California and eliminating the City’s mandated 12 percent water use
reduction.
• In May, the City became a Groundwater Sustainability Agency over the area of the
San Luis Obispo Valley Groundwater Basin that lies beneath and within its
jurisdictional boundaries. In that role, the City will work collaboratively with other
stakeholders to comply with Sustainable Groundwater Management Act requirements
for the entire groundwater basin.
• In June, the City Council adopted resolutions to rescind the drought emergency
locally.
• In September, the City completed its first annual standardized water loss audit as
required by the Department of Water Resources.
ENVIRONMENTAL REVIEW
The 2017 Water Resources Status Report is not a "project" under the California Environmental
Quality Act (CEQA), because the action does not involve any commitment to a specific project
which may result in a potentially significant physical impact on the environment, as
contemplated by Title 14, California Code of Regulations, Section 15378.
CONCURRENCES
Community Development concurs with the environmental review findings.
FISCAL IMPACT
There are no fiscal impacts associated with the recommended action.
Packet Pg 154
10
Attachments:
a - 2017 Water Resources Status Report
Packet Pg 155
10
2017
Water Resources
Status Report
For the Time Period October 1, 2016 through September 30, 2017
Photo Credit: City of San Luis Obispo.
PREPARED BY:
Jennifer Metz, Utilities Projects Manager
Aaron Floyd, Utilities Deputy Director - Water
Mychal Boerman, Water Resources Program Manager
Salinas Reservoir (2015) Salinas Reservoir (2017)
Packet Pg 156
10
City of San Luis Obispo
2017 Water Resources Status Report
Page 2
The City’s 2017 Water Resources Status Report includes water production and water consumption data
for October 1, 2016 through September 30, 2017 and was prepared in accordance with the General Plan,
Water and Wastewater Management Element, Policy A5.3.1. The reporting period corresponds to the
Water Year (October 1 through September 30), the 12-month period for which precipitation totals are
measured designated by the calendar year in which it ends. This report for Water Year 2017 is organized as
follows:
I. Drought Declaration Rescinded and Water Policy Update
II. Water Supply
III. Water Demand
IV. Water Resource Availability
V. Water Supply Accounting
VI. Water Demand Management
I. DROUGHT DECLARATION RESCINDED AND WATER POLICY UPDATE
Following abundant rainfall this past winter, on April 7, 2017 Governor Brown issued Executive Order B-
40-17 ending the drought state of emergency in California and eliminating the City’s mandated 12 percent
water use reduction. The City Council adopted resolutions to rescind the drought emergency locally on
June 20, 2017.
A 2016 Executive Order (B-37-16),
approved by Governor Brown on May 9,
2016, bolsters California’s drought
resilience and preparedness by establishing
longer-term water conservation measures
that include permanent monthly water use
reporting, new urban water use targets,
reducing system water loss, eliminating
clearly wasteful practices, and
strengthening urban drought contingency
plans. These measures aim to not only
reduce immediate water use but to establish a long-term change in the way Californians think about
water.
What a Difference a Year Makes – For California and San Luis Obispo
The California Department of Water Resources Water Year 2017 report, subtitled “What a Difference a
Year Makes,” noted that the water year “dramatically illustrated the variability in California’s annual
precipitation, ending the state’s 5-year drought and coming in at second place for statewide runoff, behind
the wettest year of 1983.” On the hydrologic impacts of a wet 2017, the statewide report states:
Many of the hydrologic impacts of California’s prior five-year drought were remedied by the wet
conditions. For the first time since 2011, runoff in major river basins exceeded 150 percent of
average, in some cases exceeding 200 percent of average. The abundant runoff replenished
depleted soil moisture. Depleted surface water storage in most of the state’s major res ervoirs was
refilled (excepting Lake Oroville, due to emergency repairs and reconstruction of its spillways).
Locally, the City saw its surface water reservoirs recover between January and June of 2017. Since the end
of the drought the City has seen a slight increase in overall consumption from 2016 to 2017, from 92
gallons per capita day (gpcd) in Water Year 2016 to 95 gpcd in Water Year 2017. For potable water only,
the increase was from 88 gpcd in Water Year 2016 to 91 gpcd in Water Year 2017.
This conservation measure that originated with the drought became a
permanent requirement under the 2016 Executive Order
Packet Pg 157
10
City of San Luis Obispo
2017 Water Resources Status Report
Page 3
Water Resiliency Planning
The City declared Climate Action a top priority during its January 2017 major city goal-setting workshop
and identified objectives focused on energy efficiency and greenhouse gas reductions within City facilities,
such as the City’s Water Treatment Plant. The City is in the study phase of an energy efficiency project at
the Water Treatment Plant to utilize photovoltaic panels and install a hydropower turbine that would
convert the energy in the high-pressure water line from Nacimiento Reservoir into electricity. The
electricity generated on-site would offset the Water Treatment Plant’s overall power demand.
Concurrently, the energy efficiency project will assess several projects identified in the adopted 2015
Potable Water Master Plan such as: pump efficiencies within plant, the primary disinfection system, water
quality in storage tanks, distribution main inter-ties between service zones, and settings of related
controls needed for control system (SCADA-Supervisory Control and Data Acquisition) integration. The
assessment will make recommendations to replace aging infrastructure in a holistic manner from the
surface water source, to the treatment plant, and within the distribution system.
Although it is not clear exactly how San Luis Obispo and its watersheds will be affected, climate change
will impact future water supplies. To ensure water supply resiliency under worse-case scenarios, the City
utilizes a multi-source water supply discussed further in this report, makes conservative water demand
projections, and continues to pursue increased water use efficiency, increased water recycling, and
groundwater recharge.
Formula for Water Resiliency
Multi-
Source
Water
Supply
Conservative
Water
Demand
Projections
Water Use
Efficiency
Water
Recycling
Future
Ground
Water
Recharge
Water
Resiliency
10%32%25%
100%79%78%
SALINAS RESERVOIR WHALE ROCK RESERVOIR NACIMIENTO RESERVOIR
LOCAL RESERVOIR LEVELS
Jan-17 Jun-17
Packet Pg 158
10
City of San Luis Obispo
2017 Water Resources Status Report
Page 4
Water Loss Audit Regulation
Even the most efficiently managed water systems across the country experience unavoidable water loss
from leaks, water main breaks, meter inaccuracies, and a variety of other causes. Despite efforts to
minimize water loss, according to the US Environmental Protection Agency, the average water system
sees a difference of about 15 percent between water produced and water sold each year. The City is
working to reduce both real and apparent water losses. Senate Bill 555, approved by Governor Brown in
October 2015, requires retail water suppliers in California with 3,000 or more connections, or an annual
water demand of over 3,000 acre-feet, to conduct an annual audit of their distribution system to quantify
water loss. The standardized audit must be validated by a certified third party to ensure data accuracy
and consistency in reporting. The City submitted its first annual water loss audit to the Department of
Water Resources in October 2017
Calendar Year 2016 Water Loss
Apparent Losses 102.8 AF
Real Losses 412.9 AF
Water Losses 515.7 AF
Non-revenue water as percent by volume of water supplied 11.7%
Non-revenue water as percent by cost of operating system 2.8%
By “benchmarking” this data and setting water loss efficiency goals, the City will continue to work to
reduce real and apparent water losses by:
✓ Installing a computer system to monitor water system data such as pressure, flow, and tank levels
for early detection of abnormalities in the water distribution system.
✓ Replacing aging infrastructure to prevent pipe breaks and leaks.
✓ Implementing a comprehensive meter testing and calibration program to ensure water meters
are functioning per manufacturers’ specifications.
✓ Implementing a comprehensive meter replacement strategy to ensure water used at homes and
businesses is correctly recorded.
✓ Performing routine billing audits to reduce data handling errors.
Sustainable Groundwater Management Act and Formation of a Groundwater Sustainability Agency
The Sustainable Groundwater Management Act (SGMA) is a statewide law that empowers local agencies
to adopt groundwater management plans that relate to the needs and resources of their communities.
Although currently banking its groundwater resources, the City envisions groundwater playing an
important role in ensuring continued resiliency in its water supply portfolio.
During the 2017 Water Year, the City became a Groundwater Sustainability Agency over the area of the
San Luis Obispo Valley Groundwater Basin that lies beneath and within its jurisdictional boundaries. The
San Luis Obispo Valley Groundwater Basin “eligible entities” (City, County, Golden State Water Company,
Edna Ranch Mutual Water Company-East, Varian Ranch Mutual Water Company, and Edna Valley Growers
Mutual Water Company) are all working collaboratively to comply with SGMA requirements for the entire
Real Water Loss
Leaks in distribution system
infrastructure, pipeline breaks,
and water tank overflows.
+
Apparent Water Loss
Unauthorized consumption (water
theft), water metering inaccuracies,
and data handling errors.
=
Total
Water
Loss
Packet Pg 159
10
City of San Luis Obispo
2017 Water Resources Status Report
Page 5
groundwater basin. The GSA structure includes a Groundwater Sustainability Commission which is an
advisory body to the City Council and the Board of Supervisors. The Groundwater Sustainability
Commission consists of one member from the City Council, one County Supervisor and a representative
of each of the identified water companies. The City, County, and eligible entities are required by SGMA to
work together to create Groundwater Sustainability Plans by January 31, 2022.
II. WATER SUPPLY
Per the General Plan Water and Wastewater Management Element,
Policy A2.2.1, the City uses multiple water sources to meet its water
supply needs. The City has four primary water supply sources including
Whale Rock Reservoir, Salinas Reservoir, Nacimiento Reservoir, and
supplies recycled water for landscape irrigation and construction water.
Groundwater serves as a fifth supplemental source. The supply per
source for Water Year 2017 (October 1, 2016 to September 30, 2017) is
summarized below.
2017 City Water Supply by Source (Acre Feet)
Nacimiento
Reservoir
Whale Rock
Reservoir 2
Recycled
Water
Salinas
Reservoir Groundwater 3 Total City Water
Demand
3,383 1,150 229 213 0 4,975
68% 23% 5% 4% 0 % 100%
Notes:
1. All values are rounded.
2. Water delivered to Cal Poly State University is excluded from the City’s water demand.
3. Groundwater was not used for potable purposes during the 2017 Water Year.
NACIMIENTO RESERVOIR
Water deliveries to the City from Nacimiento Reservoir began in January 2011. During the 2017 Water
Year, 68 percent of the City’s total water demand was met by Nacimiento Reservoir. San Luis Obispo
County operates and maintains the water delivery system from Nacimiento Reservoir to participating
agencies (currently the cities of Paso Robles and San Luis Obispo, Atascadero Mutual Water Company,
Templeton Community Services District, County Service Area 10A [Cayucos], Santa Margarita Ranch, and
Bella Vista Mobile Home Park). The Nacimiento Project Commission provides oversight to project
operations, maintenance, and the project budget. The Nacimiento Project Commission is made up of
representatives from each of the four agencies’ governing boards and a County Representative who is a
member of the County Board of Supervisors which also sits as the Board of Directors for the Flood Control
District.
Since 2010, San Luis Obispo County Flood Control
District, the Nacimiento Regional Water
Management Advisory Committee, Monterey
County Parks, and Monterey County Water
Resources Agency have worked together to plan,
advise, and organize a Mussel Prevention
Program at Lake Nacimiento. On July 29, 2017, an
inspector noticed hundreds of invasive mussels
attached to a boat and prevented the owner
City of San Luis Obispo
Water Supply Sources
✓ Nacimiento Reservoir
✓ Whale Rock Reservoir
✓ Recycled Water
✓ Salinas Reservoir
✓ Groundwater
Packet Pg 160
10
City of San Luis Obispo
2017 Water Resources Status Report
Page 6
from launching at the Heritage Ranch boat ramp. Inspections are conducted as part of the on-going
program. Invasive mussels have not been found in any local San Luis Obispo County lakes to-date, due in
part to inspection program efforts, along with responsible boat owners’ prevention efforts.
SALINAS & WHALE ROCK RESERVOIRS
Prior to receiving water from Nacimiento Reservoir, Salinas and Whale Rock Reservoirs served as the City’s
primary water supplies for over 50 years. The City pays the County of San Luis Obispo Flood Control and
Water Conservation District (County) to provide oversight, operations, and maintenance of the Salinas
Reservoir and related water delivery facilities. The City provides the oversight, operations, and
maintenance of the Whale Rock Reservoir for the benefit of the Whale Rock Commission, a joint powers
agency made up of Cal Poly State University, California Men’s Colony, and the City. During the 2017 Water
Year, the City utilized 1,373-acre feet from Salinas and Whale Rock reservoirs, meeting 27 percent of total
City water demand.
Safe Annual Yield Update
Safe annual yield analyses of available water supply
sources are based on rainfall, evaporation, and
stream flow experienced during a historical period.
Although future conditions are unlikely to occur in
the precise sequence and magnitudes as have
occurred historically, this technique provides a
conservative estimate of the future water supply
capability of the existing sources, and provides a
tool for observing the impacts of increased
temperature, evaporation, and decreased
precipitation.
In 1988, the City contracted with engineering firm
Leedshill-Herkenhoff, Inc., to prepare a detailed
analysis of the coordinated operation of Salinas and
Whale Rock Reservoirs and create a model to
determine the safe annual yield. The report was completed in 1989 and utilized data from 1943 through
1991 including drought periods in 1946-51, 1959-61, and 1976-77. Key assumptions used in the model
were that the "controlling drought period" was from 1946 to 1951, that the City only used Whale Rock
Reservoir when Salinas Reservoir was below minimum pool or could not meet the City’s monthly demand,
and that minimum pool at Salinas and Whale Rock of 400 and 500 acre-feet, respectively. The minimum
pool at each lake is the amount of water that must be left in the lake for fishery and habitat resources (in
2017, minimum pool for each lake is 2,000-acre feet). Under those assumptions, the study estimated the
City’s total safe annual yield from the two reservoirs to be 9,080 acre-feet per year.
In 1991, staff updated the safe annual yield model to examine the impact of the 1986-91 drought and
revise the assumptions on the amount of water used from Whale Rock Reservoir each year to more
accurately reflect the way the City used that resource. The analysis determined that the 1986-91 drought
was the critical drought of record for the two reservoirs. When siltation is included, these revised
assumptions resulted in a reduction in the safe annual yield estimate to the 6,940-acre feet recognized
today.
The most recent drought data is currently being analyzed and peer-reviewed to determine if reductions
to the City’s current safe annual yield will be necessary going forward. Reductions are anticipated as the
Whale Rock Reservoir Level Gauge.
Packet Pg 161
10
City of San Luis Obispo
2017 Water Resources Status Report
Page 7
recent drought is now the critical drought of record. Revisiting the safe annual yield model will also
consider revision to the assumptions on the amount of water used from Salinas and Whale Rock
Reservoirs each year to accurately reflect the way the City uses its available water resources.
Spillway Assessment
As a result of the spillway failure at Oroville Dam, the
Department of Water Resources (DWR) is requiring
detailed analyses of dams that have large spillways
at high hazard dams. Though there are no known
deficiencies in the Whale Rock spillway, in May 2017,
the City received a letter from the DWR requesting
preparation of a work plan for a comprehensive
spillway condition assessment by August 1, 2017. By
conducting an analysis of design, current conditions,
and underlying or adjacent geology, any deficiencies
in the spillway will be identified. If required,
corrective action will be planned and projects
implemented to ensure the ability of Whale Rock
Reservoir’s spillway to function as designed.
The Work Plan for Whale Rock Reservoir’s Comprehensive Spillway Condition Assessment was approved
in September. The intent of the assessment is to evaluate the ability of the spillway to function as intended
during normal operations as well as during a flood event. The tasks listed in the work plan include:
• Review of the spillway’s design features using available as-built drawings, design and
construction records
• Evaluation of the existing conditions of the spillway
• Geologic inspection
• Evaluation of all inspection and repair records
The City’s Utilities Department staff is developing a scope of work for the comprehensive spillway analysis
based on the approved Work Plan. The scope of work will be the basis for a request for proposals to
identify qualified consultants to perform the spillway analysis.
Pipeline Reliability Analysis
The 18-mile long Whale Rock pipeline was
constructed in the late 1950s and has served the City
well since 1960, requiring minimal maintenance and
repairs. A pipeline reliability analysis was prioritized
as part of the Whale Rock Reservoir capital
improvement program for 2017-19. The analysis is
expected to be completed during the 2018 Water
Year. By determining the true condition of the
pipeline utilizing modern technology, it is expected
the Whale Rock Commission will be able to focus
resources on needed point repairs to the pipeline
and avoid full-scale replacement based on pipe age.
Whale Rock Reservoir Spillway
30-inch Whale Rock Pipeline Repair Conducted in June 2017
Packet Pg 162
10
City of San Luis Obispo
2017 Water Resources Status Report
Page 8
RECYCLED WATER
For the 2017 Water Year, the City delivered 229-acre
feet of recycled water, up from 202-acre feet for the
2016 Water Year. The City Council adopted a
resolution approving the 2017 Recycled Water
Master Plan on March 21, 2017 and authorized staff
to negotiate an agreement for delivery of recycled
water outside the city limits consistent with policies
and findings identified in the City’s General Plan.
The design phase for the City’s Water Resource
Recovery Facility (WRRF) Project continued through
Water Year 2017. Construction is planned to begin in
October 2018 and continue through 2021. When
complete, the WRRF Project will maximize recycled
water production. The project will also enable the City
to consider potable reuse, part of a One Water
concept, in the future.
As part of a larger property upgrade, the Irish Hills
Hamlet, a 146-unit apartment complex on Los Osos
Valley Road originally constructed in the 1970s,
retrofitted its landscape and irrigation system to
utilize recycled water. The property has almost
76,000 square feet of landscaped area and is
estimated to offset five-acre feet of potable water use
with the retrofit.
GROUNDWATER
The City stopped using groundwater for potable purposes in April 2015. The City’s groundwater wells
remain in an operable, stand-by position should the use of groundwater be required. During the 2017
Water Year, the City continued its work with a hydrogeologist to site a future well field for a potential
groundwater program expansion.
III. WATER DEMAND
During Water Year 2017, 67 percent of total water use in the City was to support single and multi-family
residential uses, 25 percent was to support commercial and other non-residential development, and eight
percent was to support landscape irrigation (separately metered). Historical water use is summarized
below, as well as corresponding population, per capita use rate, and precipitation. The 2017 per capita
water use was 95 gallons per capita per day (gpcd). Based on the City’s General Plan Water and
Wastewater Management Element policies, the City uses 117 gpcd to project water required to serve
build-out population.
Irish Hills Hamlet became the City’s latest recycled water
customer in August 2017
Packet Pg 163
10
City of San Luis Obispo
2017 Water Resources Status Report
Page 9
Population, Water Use & Rainfall
Year Population Total Water Use
(acre feet)
Per Capita
Water Use
(gpcd)
Rainfall1,2,3
(inches)
2008 44,579 6,359 127 18.1
2009 44,829 6,134 122 18.9
2010 44,948 5,489 109 36.0
2011 45,418 5,285 104 18.9
2012 45,308 5,541 109 21.5
2013 45,541 5,892 116 3.8
2014 45,473 5,524 109 14.2
2015 45,802 4,990 97 11.8
2016 46,117 4,731 92 17.8
2017 46,724 4 4,975 95 35.1
Notes:
1. Rainfall amounts fo r 2005 –2012 calendar year source: Cal Poly CIMIS Weath er Stati on.
2. Rainfall amount fo r calendar year 2013-2015: SLO Reservoir.
3. Data for 2008 through 2014 presents calendar year rainfall data. 2015 and 2016 rainfall data covers the Water Year
(October through September).
4. http://www.dof.ca.gov/Forecasting/Demographics/Estimates/e-1/
As the City’s reservoirs are located in different watersheds,
described below, rainfall at various sites within San Luis
Obispo County benefits us. All locations exceeded the annual
average during the 2017 water year.
2017 Water Year Rainfall Totals
Rainfall
Measurement
Location
Watershed
Annual
Average
Rainfall
(in inches)
2017 Water
Year Total
Rainfall
(in inches)
Rocky Butte Nacimiento
Reservoir 39 87.1
Hwy 46 and W
7 Mile Road in
Cambria, CA
Whale
Rock
Reservoir
30 38.0
SLO Reservoir City 25 35.1
Salinas Dam Salinas
Reservoir 23 33.6
Source: http://www.slocountywater.org/site/Water%20Resources/Data/
maps/precipitation-real-time.htm
San Luis Obispo and surrounding watersheds
experienced impressive rainfall totals during the
2017 Water Year
Packet Pg 164
10
City of San Luis Obispo
2017 Water Resources Status Report
Page 10
IV. WATER RESOURCE AVAILABILITY
The following table summarizes the Water Resource Availability based on Water and Wastewater
Management Element, Section 3. Water availability for 2017 is 12,115-acre feet, an increase of six-acre
feet over 2016 due to increased recycled water usage.
2017 Water Resource Availability
Water Resource Acre Feet Description
Salinas & Whale Rock Reservoirs 6,940 Safe Annual Yield 1
Nacimiento Reservoir 5,482 Dependable Yield 2
Recycled Water 193 2016 Annual Usage 3
Siltation from 2010 to 2060 (500) WWME Policy A 4.2.2 4
12,115 2017 Annual Availability
NOTES:
1. Safe Annual Yield determined from computer model, which accounts for siltation loss
through 2010 (per WWME Policy A 4.2.1).
2. Dependable Yield is the contractual amount of water the City has rights to from
Nacimiento Reservoir.
3. The quantity of recycled water included is the actual prior year’s recycled water usage
(calendar year 2016) per General Plan Water and Wastewater Management Element
Policy A 7.2.2.
4. Reservoir siltation is a natural occurrence that reduces storage capacity over long periods,
resulting in the reduction of safe annual yield.
V. WATER SUPPLY ACCOUNTING
Per General Plan Water and Wastewater Management
Element, Section 5, the City accounts for water supplies
necessary to meet three specific community needs:
• Primary water supply
• Reliability reserve
• Secondary water supply
The City’s primary water supply is defined as the amount
of water needed to serve the build-out population
identified in the General Plan, Land Use Element (2014).
Table 3 in the Land Use Element identifies an urban reserve
capacity of 57,200 people. The quantity of water needed
for the primary water supply is calculated per WWME
Policy A 5.2.2, using 117 gallons per capita per day (gpcd).
The reliability reserve provides a buffer for future
unforeseen or unpredictable long-term impacts to the
City’s water supply. The quantity of water for the reliability
reserve is established using 20 percent of the existing City
population (46,724, 2017 population) at 117 gpcd, thus the
reliability reserve will increase over time as population
increases. The reliability reserve concept is included in the
Primary Water Supply
= 117 gpcd x City Build-out Population
= 117 gpcd x 57,200 x 365 day/year x
Acre-Ft/325,851 gal
7,496 Acre-Ft/year
Reliability Reserve
= 117 gpcd x City Population x 20%
= 117 gpcd x 46,724 x 365 day/year x
Acre-Ft/325,851 gal x 20%
1,225 Acre-Ft/year
Secondary Water Supply
= Current Annual Availability – Primary
Water Supply – Reliability Reserve
= 12,115 Acre-Ft/year A – 7,496 Acre-
Ft/year – 1,225 Acre-Ft/year
3,394 Acre-Ft/year
A 2017 Annual Availability
Packet Pg 165
10
City of San Luis Obispo
2017 Water Resources Status Report
Page 11
City’s Charter (Section 909) which identifies that the water may not be used to serve future development,
and is defined per WWME Policy A 5.2.3.
The City’s secondary water supply is the amount of water remaining from available water resources above
those needed to meet the primary water supply and reliability reserve. The secondary supply is identified
to meet peak water demand periods or short-term loss of City water supply sources, per General Plan
Water and Wastewater Management Element, Policy A 5.2.4. Water supply accounting is summarized in
the table below .
2017 Water Supply Accounting (acre feet)
Total Primary Water Supply Reliability Reserve Secondary Water Supply
12,115 7,496 1,225 3,394
VI. WATER DEMAND MANAGEMENT
The water conservation program is an integral part of the City’s overall water management strategy. In
the late 1980’s, the City implemented effective water efficiency programs and policies that allowed for
continued community growth and economic development during water-constrained periods. It is
estimated that 90 percent of residential toilets in the City have been retrofitted to 1.6 gallons per flush or
more efficient. The City’s Toilet Retrofit Program is still active, requiring replacement of inefficient toilets
upon change of ownership of a home. Through strong conservation efforts, the community has reduced
its annual average per capita water use from over 180 gallons in 1987 to 95 for the 2017 Water Year.
To reach all local demographics, outreach efforts
were expanded by attending local events such as
Farmers Market, Earth Day, and the Disaster
Preparedness Expo. Conservation messaging also
continued through traditional media sources as well
as new avenues such as on-line “How To” videos
available at the City’s website (slowater.org)
explaining common areas around the house where
leaks occur and unnecessarily consume water.
During the 2017 Water Year, the City’s Water Efficient
Landscape Ordinance was updated with new climate
data which reduced the acceptable amount of
irrigation demand at newly constructed and
landscaped properties.
REGIONAL WATER RESOURCE PLANNING
The City continues to participate as a member of the Water Resources Advisory Committee and Regional
Water Management Group, which promotes collaborative, integrated management of water resources
within San Luis Obispo County and provides policy recommendations to the County Board of Supervisors.
In addition, the City participates in the regional Partners in Water Conservation group which is made up
of water conservation professionals from local agencies. The group meets every other month to discuss
trends in the industry, upcoming changes to regulations, and to work together on regional messaging
related to water conservation and water use efficiency.
Utilities Department information booth at 2017 Disaster
Preparedness Expo.
Packet Pg 166
10
Meeting Date: 12/12/2017
FROM: Daryl Grigsby, Director of Public Works
Prepared By: Michael J. McGuire, Senior Civil Engineer
SUBJECT: SMALL BORE ASSOCIATION LEAD REMEDIATION, SPECIFICATION No.
91219
RECOMMENDATION
1. Approve construction documents for “Small Bore Association Lead Remediation”; and
2. Authorize staff to advertise for bids and authorize the City Manager to award the construction
contract if the lowest responsible bid is within the Engineer’s Estimate of $221,500; and
3. Authorize allocation of $209,000 from the General Capital Fund and $70,000 from the Sewer
Fund for a total of $279,000, with $244,000 to the construction account and $35,000 to the
construction management account of the project.
DISCUSSION
The City of San Luis Obispo intends to demolish the Prado Day Center and the adjacent Small
Bore Association (SBA) Indoor Gun Range to make way for the expansion of the Water
Resource Recovery Facility (WRFF). The Prado Day Center will continue to operate in its
current location until the new homeless facility, currently being built across the street on Prado
Road, is complete. The SBA Indoor Gun Range is vacant, and unused for many years, and
ready for demolition.
Recent testing performed at the SBA Indoor Gun Range indicates the presence of lead and
asbestos containing materials. Although the levels of asbestos were considered trace, or non-
hazardous, lead at a hazardous level was detected in the paint on the doors, and the concrete
floor. Also, portions of the floor of the range is soil and contains a level of lead contamination
that can be considered hazardous.
This project will remediate the lead contaminated soil within the building prior to the demolition
of the structure itself. The structure needs to be demolished to make way for the WRRF upgrade
project.
Staff recommends approval of the construction documents, and authorization to advertise and
fund the project.
CONCURRENCES
This project has the concurrence of the Utilities Department and the Community Development
Department.
11
Packet Pg 167
ENVIRONMENTAL REVIEW
A Demolition Notification Form has been filed with the SLO County Air Pollution Control
District. The Fire Department has reviewed the construction documents and has determined that
the appropriate health and safety measures are being implemented to protect workers and the
public from hazardous materials, and that the hazardous materials are being remediated and
disposed of according to state and federal regulations. This project is categorically exempt from
the California Environmental Quality Act (CEQA) review pursuant to CEQA Guidelines Section
15330, Minor actions to prevent, minimize, stabilize, mitigate or eliminate the release or threat of
release of hazardous waste or hazardous substances, and a Notice of Exemption has been issued
for this project.
FISCAL IMPACT
The 2017-19 Financial Plan, Appendix E2, pages 39 to 40, identifies a construction budget of
$15,209,000 and a construction management budget of $3,000,000 for the WRRF Project.
$209,000 has been allocated from the General Capital Outlay Fund and the remaining $70,000
from the Sewer Fund to fully fund the construction and construction management phases of this
project.
Overall Project Fiscal Summary
Fiscal Impact Summary Cost
Total Project Budget Available 18,209,000$
Construction 221,500$
Contingency 22,000$
Total for Construction 243,500$
Printing/Advertising 500$
Construction Management 35,000$
Total Ancillary Items 35,500$
Total Construction Related Project Costs:279,000$
Project Balance 17,930,000$
ALTERNATIVES
Deny approval to advertise. The City Council could choose to deny or defer the approval to
advertise this project. Staff does not recommend this option. Should this be denied or deferred,
the WRRF upgrade project may not proceed on schedule. Demolition, remediation material and
labor costs will continue to rise and additional funds may be required.
11
Packet Pg 168
Attachments:
a - Council Reading File - Special Provisions
11
Packet Pg 169
Page intentionally left
blank.
Packet Pg 170
Meeting Date: 12/12/2017
FROM: Daryl Grigsby, Director of Public Works
Prepared By: Scott Lee, Parking Services Manager
SUBJECT: AUTHORIZE REQUEST FOR PROPOSALS FOR PARKING LOTS AND
STRUCTURES SWEEPING AND JANITORIAL SERVICES,
SPECIFICATION NO 91624
RECOMMENDATION
1. Authorize the release of the Request for Proposals (RFP) for Parking Lots and Structures
Sweeping and Janitorial Services, Specification No. 91624; and
2. Authorize the City Manager to enter into a contract(s) with the successful bidder(s) if within
authorized project budget of $250,000; and
3. Authorize the City Attorney to approve modifications to the form of the contract with the
successful bidder(s).
DISCUSSION
The City has a longstanding policy of using contract labor where appropriate for ongoing
operations and maintenance services. The City currently is operating under an extension of the
contract with SP Maintenance for cleaning services as the contract expired on June 30, 2017.
This RFP will allow a separate contract to be awarded for each of the three (3) specific
components of the RFP if it is in the best interest of the City. The three components are: 1)
Janitorial, Lot and 2) Structure Cleaning/Sweeping, and 3) Power Scrubbing/Pressure Washing.
Since each requires different equipment and may be perfo rmed by different or separate vendors,
allowing the city to award separate contracts for each will allow different vendors to submit
bids for provision of the services for which they are qualified.
NEXT STEPS
Solicitation for proposals will be done by publicizing the RFP on the city website in addition to
local notification required by the City’s Municipal Codes.
The RFP is scheduled to be released to the public upon approval by Council. After proposals are
received and accepted by the City in January 2018, a team of staff will review each proposal for
conformity and “best value”. Cost will not be the sole criterion in selecting the successful
bidder. Consultant proposals will be evaluated based on a combination of factors that result in
the best value to the City, including but not limited to:
a. Understanding of the work required by the City
b. Quality and responsiveness of the proposal
c. Demonstrated competence and professional qualifications necessary for satisfactory
12
Packet Pg 171
d. performance of the work required by the City
e. Recent experience in successfully performing similar services
f. Proposed methodology for completing the work
g. References
h. Background and related experience of the specific individuals to be assigned to the
i. project
j. Proposed compensation
The city will begin negotiations with the top ranked firm(s) as quickly as possible and determine
a final cost for services to the City. The new contract will become effective with the approval
and award which is expected to be in February 2018.
CONCURRENCES
Streets and Parks management concur with the recommendations made in this report.
ENVIRONMENTAL REVIEW
The issuance of this RFP and subsequent award of a contract for the services described above is
categorically exempt from environmental review pursuant to CEQA Guidelines § 15301
(Existing Facilities). In order for the successful bidder handling Power Scrubbing/Pressure
Washing to remain compliant with the City’s MS4 storm water permit with the State Water
Resources Control Board, as well as with the provisions of the City’s Municipal Code Chapter
12.08 (Urban Storm Water Quality Management and Discharge Control), a full -capture system
will be required to ensure that there is no discharge to the City’s storm water conveyance system.
FISCAL IMPACT
There is no impact to the General Fund as part of this RFP. Parking Services budgets $250,000
for Lot & Structure Sweeping and Janitorial Services under Contracted Services in its operating
budget for the combined three (3) components included in the RFP. This RFP is requesting the
janitorial services to be provided seven (7) days per week in the parking structures which is an
increase from the current five (5) days per week. This is necessary given the increases in
volumes utilizing the structures and expected increases in facility usage in the future. Part of this
cost is offset by the elimination of some parking lots no longer in existence and reassigned cost
savings from their closure. The frequency in other locations will remain the same.
ALTERNATIVES
The City Council may choose to not approve the RFP and instruct staff to continue to seek other
alternatives. This is not recommended as currently the City’s staffing is not sufficient to provide
this service.
Attachments:
a - Lot & structure sweeping and janitorial RFP (91624)
12
Packet Pg 172
Page 1 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
990 Palm Street San Luis Obispo, CA 93401
Notice Requesting Proposals for
PARKING LOTS & STRUCTURES SWEEPING AND JANITORIAL SERVICES
Specification No. 91624
The City of San Luis Obispo is soliciting proposals from qualified vendors for provision of
maintenance services pursuant to Specification No. 91624. All proposals must be received by the
Finance Department, City Hall, 990 Palm Street, San Luis Obispo, CA no later than 3:30 p.m. Pacific
Standard Time, January 11, 2018.
Proposals received after said date and time will not be considered. To guard against premature
opening, each proposal shall be submitted to the Finance Department in a sealed envelope
plainly marked with the proposer’s name, specification number, proposal title and due date of
proposal opening. Hard copied proposals shall be submitted along with the required forms
provided in the specification package and following instructions contained herein.
Proposals packages may be obtained at:
The City’s website: www.SLOCity.org – Doing Business – Bids & Proposals Page;
or
BIDSYNC.com
Additional information may be obtained by contacting:
Scott Lee, Parking Manager, (805) 781-7234 or slee@slocity.org
Nicole Lawson, Supervising Administrative Assistant, (805) 781-7059 or nlawson@slocity.org
For Public Records requests see Section 1.14
12
Packet Pg 173
Page 2 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
Specification No. 91624
TABLE OF CONTENTS
1. NOTICE TO PROPOSERS – PROPOSAL REQUIREMENTS .................................................. 5
1.1. Summary and Requirement to Meet All Provisions ......................................................................... 5
1.2. Contract Term and Optional Extensions .......................................................................................... 5
1.3. Important Dates ............................................................................................................................... 5
1.4. Proposal Submittal and Format ....................................................................................................... 5
1.5. Labeling ............................................................................................................................................ 6
1.6. Insurance Certificate ........................................................................................................................ 6
1.7. Submittal of References ................................................................................................................... 6
1.8. Statement of Contract Disqualifications .......................................................................................... 6
1.9. Withdrawal or Revision of Proposals ............................................................................................... 6
1.10. Multiple Proposals ........................................................................................................................... 6
1.11. Procuring Agency/Personnel ............................................................................................................ 6
1.12. Inquiries and Clarifications ............................................................................................................... 7
1.13. Addenda ........................................................................................................................................... 7
1.14. Public Records .................................................................................................................................. 7
2. CONTRACT AWARD AND EXECUTION ................................................................................... 8
2.1. Proposal Retention and Award ........................................................................................................ 8
2.2. Competency and Responsibility of Proposer ................................................................................... 8
2.3. Form of Agreement .......................................................................................................................... 8
2.4. Insurance .......................................................................................................................................... 8
2.5. Business License and Tax .................................................................................................................. 8
2.6. Failure to Accept Contract ................................................................................................................ 8
2.7. Oral Presentations / Site Visits / Meetings ....................................................................................... 8
2.8. Proposer’s Responsibility ................................................................................................................. 8
3. CONTRACT PERFORMANCE...................................................................................................... 9
3.1. Ability to Perform ............................................................................................................................. 9
3.2. Laws to be Observed ........................................................................................................................ 9
3.3. Payment of Taxes ............................................................................................................................. 9
12
Packet Pg 174
Page 3 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
3.4. Permits and Licenses ........................................................................................................................ 9
3.5. Safety Provisions .............................................................................................................................. 9
3.6. Public and Employee Safety ............................................................................................................. 9
3.7. Preservation of City Property ........................................................................................................... 9
3.8. Immigration Act of 1986 ................................................................................................................ 10
3.9. Proposer Non-Discrimination ........................................................................................................ 10
3.10. Work Delays ................................................................................................................................... 10
3.11. Payment Terms .............................................................................................................................. 10
3.12. Inspection ....................................................................................................................................... 10
3.13. Audit ............................................................................................................................................... 10
3.14. Interests of Proposer ...................................................................................................................... 10
3.15. Hold Harmless and Indemnification ............................................................................................... 11
3.16. Contract Assignment ...................................................................................................................... 11
3.17. Termination .................................................................................................................................... 11
4. PROPOSAL CONTENT AND SELECTION PROCESS ............................................................. 12
4.1. Overview ........................................................................................................................................ 12
4.2. Calendar of Events ......................................................................................................................... 12
4.3. Background and Objectives ............................................................................................................ 12
4.4. Description / Scope of Work .......................................................................................................... 13
4.5. Selection Process ............................................................................................................................ 13
5. REQUIRED SUBMITTALS AND CONTENT OF PROPOSALS .............................................. 13
Chapter 1: Title Page ...................................................................................................................... 13
Chapter 2: Organizational Summary .............................................................................................. 14
Chapter 3: References ......................................................................................................................... 14
Chapter 4: Sub Proposers ............................................................................................................... 14
Chapter 5: Disclosure of Past Contract Failures and Litigation ...................................................... 14
Chapter 6: Fee Proposal ................................................................................................................. 14
Chapter 7: Additional Required Forms ........................................................................................... 15
12
Packet Pg 175
Page 4 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
REQUIRED FORMS ................................................................................................ 16
FORM A: SIGNATURE AFFIDAVIT ......................................................................................................... 16
FORM B: VENDOR PROFILE ............................................................................................................ 17
FORM C: REFERENCES .................................................................................................................... 18
FORM D: STATEMENT OF PAST CONTRACT DISQUALIFICATIONS ................................................ 19
FORM E: COST PROPOSAL SUBMITTAL FORM .............................................................................. 20
APPENDICES ...................................................................................................... 21
APPENDIX A: SAMPLE AGREEMENT ............................................................................................... 21
APPENDIX B: INSURANCE REQUIREMENTS .................................................................................... 23
APPENDIX C: DESCRIPTION OF WORK ........................................................................................... 25
APPENDIX D: LOCATIONS AND WORK HOURS .............................................................................. 29
APPENDIX E: PARKING LOTS AND STRUCTURES SQUARE FOOTAGE ............................................ 30
12
Packet Pg 176
Page 5 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
1 NOTICE TO PROPOSERS – PROPOSAL REQUIREMENTS
1.1 Summary and Requirement to Meet All Provisions
The City of San Luis Obispo (“City”) is soliciting proposals from qualified vendors to perform
the cleaning tasks described in this RFP at the locations and frequencies listed. Vendors
submitting proposals (“Proposers”) are required to read this Request for Proposals (“RFP”)
in its entirety and follow the instructions contained herein and shall meet all of the terms,
and conditions of the RFP specifications package. By virtue of its proposal submittal, the
Proposer acknowledges agreement with and acceptance of all provisions of the RFP
specifications.
1.2 Contract Term and Optional Extensions
This shall be a Contract for Purchase of Services (Appendix A) for the provision of
maintenance services related to the Parking Lots & Structures Sweeping and Janitorial
Services RFP- Specification No. 91624 - for a term of four (4) years with two (2) additional
two-years extensions available to the City at their sole discretion, if the services are deemed
satisfactory, by written notification to the Contractor.
This contact may be awarded as up to three (3) separate contracts for provision of service
for 1) Manual Janitorial Services (Day porter activities including cleaning of the public
restrooms); 2) Parking Lot and Structures Cleaning (Sweeping); and 3) Power Scrubbing
(Pressure washing) of parking Structure stairwells and landing areas; and these awards may
be made to separate vendors. The frequency and locations are detailed in Appendices C
and D.
1.3 Important Dates
Deliver proposals no later than the due date and time indicated below. The City will reject
late proposals:
Issue Date: December 13, 2017
Due Date: January 11, 2018, 3:30PM, PST
1.4 Proposal Submittal and Format
Each proposal must be submitted in hard copy form (i.e. printed) with a total of Three (3)
copies provided in the order provided in the specifications and accompanied by any other
required submittals or supplemental materials. Proposal documents shall be enclosed in
an envelope that shall be sealed and addressed to:
Finance Department
Attn: Lorraine Colleran
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
No FAX submittals will be accepted.
12
Packet Pg 177
Page 6 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
1.5 Labeling
All proposals must be clearly labeled:
Proposer’s Name and Address: ________________________
Specification # 91624
Title: Parking Lots & Structures Sweeping and Janitorial Services
DUE: January 11, 2018, 3:30pm, PST
1.6 Insurance Certificate
If awarded a contract, each proposal will be required to provide a certificate of insurance
showing:
A. The insurance carrier and its A.M. Best rating.
B. Scope of coverage and limits.
C. Deductibles and self-insured retention.
The insurance requirements are detailed in Section 2.4.
1.7 Submittal of References
Each proposer shall submit a minimum of three (3) references on the form provide in the
RFP package as Form C.
1.8 Statement of Contract Disqualifications
Each Proposer shall submit a statement regarding any past government disqualifications on
the form provide in the RFP package as Form D.
1.9 Withdrawal or Revision of Proposals
Proposers may, without prejudice, withdraw proposals by requesting such withdrawal prior
to the time specified for the proposal opening, by submitting a written request to the Bid
Administrator for its withdrawal, in which event the proposal will be returned to the
Proposer unopened. All proposals will be opened and declared publicly. Proposers may
modify their proposal at any time prior to the due date and time of submission for
proposals.
1.10 Multiple Proposals
Multiple proposals from Proposers are NOT permitted. Any vendor responding to this RFP
shall incorporate their entire bid in one submission regardless of whether the bid is for one
or more components of this RFP. The proposed costs should be broken down into sufficient
detail to allow for the separate evaluation of each component being bid.
1.11 Procuring Agency/ Personnel
The City of San Luis Obispo is the procuring agency:
Scott Lee, Parking Manager
City of San Luis Obispo
(805) 781-7234
slee@SLOCity.org
12
Packet Pg 178
Page 7 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
The City of San Luis Obispo Finance Department administers the procurement function:
Lorraine Colleran (Bid Administrator)
Finance Department
990 Palm Street
San Luis Obispo, CA 93401
(805) 781-7435
LColleran@SLOCity.org
1.12 Inquiries and Clarifications
Proposers are to raise any questions they have about the RFP document without delay.
Direct any questions concerning due dates and/or actual submittals to the bid administrator
either by phone or in writing. Direct all technical questions, those concerning specifications
and/or scope of work, to the procuring agency, either by phone or in writing.
Furthermore, Proposers finding any significant ambiguity, error, conflict, discrepancy,
omission, or other deficiency in this RFP document shall immediately notify the procuring
agency and request clarification.
1.13 Addenda
In the event it is necessary to provide additional clarification or revision to the RFP, the
City will post addenda to the City website and to BIDSYNC.COM website. It is Proposer’s
sole responsibility to regularly monitor the websites for any such postings. Failure to
retrieve addenda and include their provisions may result in disqualification.
1.14 Public Records
Proposers are hereby notified that all information submitted in response to this RFP may
be made available for public inspection according to the Public Records Act of the State of
California and the California Constitution. Information qualifying as a “trade secret” –
defined in California Public Records Act of 2004 – may be held confidential. Proposers shall
seal separately and clearly identify all information they deem to be “trade secrets,” as
defined by the State of California Statutes. Do not dupli cate or comingle information,
deemed confidential and sealed, elsewhere in your response.
The City cannot ensure that information will not be subject to release if a request is made
under applicable public records laws. The City cannot consider the following confidential:
a bid in its entirety, price bid information, or the entire contents of any resulting contract.
The City will not provide advanced notice to Proposers prior to release of any requested
record.
To the extent permitted by such laws, it is the intention of the City to withhold the contents
of proposals from public view – until such time as competitive or bargaining reasons no
longer require non-disclosure, in the City’s opinion. At that time, all proposals will be
available for review in accordance with such laws.
12
Packet Pg 179
Page 8 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
2 CONTRACT AWARD AND EXECUTION
2.1 Proposal Retention and Award
The City reserves the right to retain all proposals for a period of 180 days for examination
and comparison. The City also reserves the right to waive non-substantial irregularities in
any proposal, to reject any or all proposals, to reject or delete one part of a proposal and
accept the other, except to the extent that proposals are qualified by specific limitations.
2.2 Competency and Responsibility of Proposer
The City reserves full discretion to determine the competence and responsibility,
professionally and/or financial stability, of Proposer. Proposer will provide, in a timely
manner, all information that the City deems necessary to make such a decision.
2.3 Form of Agreement
Proposers are responsible for reviewing this Form of Agreement prior to submission of their
proposal. The Form of Agreement shall serve as the basis for the contract resulting from
this RFP. The terms of this template contract shall become contractual obligations following
award of the RFP. By submitting a proposal, the contract shall become contractual
obligations following award of the RFP. By submitting a proposal, Proposers affirm their
willingness to enter into a contract containing these terms.
2.4 Insurance
Proposers shall provide proof of insurance in the form, coverages and amounts specified in
Appendix B of these specifications within ten (10) calendar days after notice of contract
award as a precondition to contract execution.
2.5 Business License and Tax
The Proposer must have a valid City of San Luis Obispo business license and tax certificate
before execution of the contract. Additional information regarding the City's business tax
program may be obtained by calling (805) 781-7134.
2.6 Failure to Accept Contract
The following will occur if the Consultant to whom the award is made (Consultant) fails to
enter into the contract: the award will be annulled; any bid security will be forfeited in
accordance with the special terms and conditions if a Consultant's bond or security is
required; and an award may be made to the next highest ranked Consultant with whom a
responsible compensation is negotiated, who shall fulfill every stipulation as if it were the
party to whom the first award was made.
2.7 Oral Presentations / Site Visits / Meetings
Proposers may be asked to attend meetings, make oral presentations, inspect City locations
or make their facilities, or those of existing clients with similar operations, available for site
inspection as part of the RFP process. Such presentations, meetings, or site visits will be at
the Proposer’s expense.
2.8 Proposer’s Responsibility
Proposers shall examine this RFP and shall exercise their judgment as to the nature and
scope of the work required. No plea of ignorance concerning conditions or difficulties that
exist or may hereafter arise in the execution of the work under the resulting c ontract, as a
12
Packet Pg 180
Page 9 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
consequence of failure to make necessary examinations and investigations, shall be
accepted as an excuse for any failure or omission on the part of the Proposers to fulfill the
requirements of the resulting contract.
3 CONTRACT PERFORMANCE
3.1 Ability to Perform
The Proposer warrants that it possesses, or has arranged through subcontracts, all capital
and other equipment, labor, materials, and licenses necessary to carry out and complete
the work hereunder in compliance with any and all federal, state, county, city, and special
district laws, ordinances, and regulations.
3.2 Laws to be Observed
The Proposer shall keep itself fully informed of and shall observe and comply with all
applicable state and federal laws and county and City of San Luis Obispo ordinances,
regulations and adopted codes during its performance of the work.
The issuance of this RFP and subsequent award of a contract for the services described
above is categorically exempt from environmental review pursuant to CEQA Guidelines §
15301 (Existing Facilities).
3.3 Payment of Taxes
The contract prices shall include full compensation for all taxes that the Proposer is required
to pay.
3.4 Permits and Licenses
The Proposer shall procure all permits and licenses, pay all charges and fees, and give all
notices necessary.
3.5 Safety Provisions
The Proposer shall conform to the rules and regulations pertaining to safety established by
OSHA and the California Division of Industrial Safety.
3.6 Public and Employee Safety
Whenever the Proposer's operations create a condition hazardous to the public or City
employees, it shall, at its expense and without cost to the City, furnish, erect and maintain
such fences, temporary railings, barricades, lights, signs and other devices and take such
other protective measures as are necessary to prevent accidents or damage or injury to the
public and employees.
3.7 Preservation of City Property
The Proposer shall provide and install suitable safeguards, approved by the City, to protect
City property from injury or damage. If City property is injured or damaged resulting from
the Proposer's operations, it shall be replaced or restored at the Proposer's expense. The
facilities shall be replaced or restored to a condition as good as when the Proposer began
work.
12
Packet Pg 181
Page 10 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
3.8 Immigration Act of 1986
The Proposer warrants on behalf of itself and all sub Proposers engaged for the
performance of this work that only persons authorized to work in the United States
pursuant to the Immigration Reform and Control Act of 1986 and other applicable laws shall
be employed in the performance of the work hereunder.
3.9 Proposer Non-Discrimination
In the performance of this work, the Proposer agrees that it will not engage in, nor permit
such sub Proposers as it may employ, to engage in discrimination in employment of persons
because of age, race, color, sex, national origin or ancestry, sexual orientation, or religion
of such persons.
3.10 Work Delays
Should the Proposer be obstructed or delayed in the work required to be done hereunder
by changes in the work or by any default, act, or omission of the City, or by strikes, fire,
earthquake, or any other Act of God, or by the inability to obtain materials, equipment, or
labor due to federal government restrictions arising out of defense or war programs, t hen
the time of completion may, at the City's sole option, be extended for such periods as may
be agreed upon by the City and the Proposer. In the event that there is insufficient time to
grant such extensions prior to the completion date of the contract, the City may, at the time
of acceptance of the work, waive liquidated damages that may have accrued for failure to
complete on time, due to any of the above, after hearing evidence as to the reasons for
such delay, and making a finding as to the causes of same.
3.11 Payment Terms
Payments will be made consistent with the Agreement. The City's standard payment terms
are 30 days from the receipt of an original invoice and acceptance by the City of the
materials, supplies, equipment or services provided by the Proposer (Net 30).
3.12 Inspection
The Proposer shall furnish City with every reasonable opportunity for City to ascertain that
the services of the Proposer are being performed in accordance with the requirements and
intentions of this contract. All work done and all materials furnished, if any, shall be subject
to the City's inspection and approval. The inspection of such work shall not relieve Proposer
of any of its obligations to fulfill its contract requirements.
3.13 Audit
The City shall have the option of inspecting and/or auditing all records and other written
materials used by Proposer in preparing its invoices to City as a condition precedent to any
payment to Proposer.
3.14 Interests of Proposer
The Proposer covenants that it presently has no interest, and shall not acquire any
interest—direct, indirect or otherwise—that would conflict in any manner or degree with
the performance of the work hereunder. The Proposer further covenants that, in the
performance of this work, no sub Proposer or person having such an interest shall be
employed. The Proposer certifies that no one who has or will have any financial interest in
performing this work is an officer or employee of the City. It is hereby expressly agreed
12
Packet Pg 182
Page 11 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
that, in the performance of the work hereunder, the Proposer shall at all times be deemed
an independent Proposer and not an agent or employee of the City.
3.15 Hold Harmless and Indemnification
The Proposer agrees to defend, indemnify, protect and hold the City and its agents, officers
and employees harmless from and against any and all claims asserted or liability established
for damages or injuries to any person or property, including injury to the Proposer's
employees, agents or officers that arise from or are connected with or are caused or claimed
to be caused by the acts or omissions of the Proposer, and its agents, officers or employees,
in performing the work or services herein, and all expenses of investigating and defending
against same; provided, however, that the Proposer's duty to indemnify and hol d harmless
shall not include any claims or liability arising from the established sole negligence or willful
misconduct of the City, its agents, officers or employees.
3.16 Contract Assignment
The Proposer shall not assign, transfer, convey or otherwise dispose of the contract, or its
right, title or interest, or its power to execute such a contract to any individual or business
entity of any kind without the previous written consent of the City.
3.17 Termination
If, during the term of the contract, the City determines that the Proposer is not faithfully
abiding by any term or condition contained herein, the City may notify the Proposer in
writing of such defect or failure to perform. This notice must give the Proposer a 10 (ten)
calendar day notice of time thereafter in which to perform said work or cure the deficiency.
If the Proposer has not performed the work or cured the deficiency within the ten days
specified in the notice, such shall constitute a breach of the contract and the City may
terminate the contract immediately by written notice to the Proposer to said effect.
Thereafter, neither party shall have any further duties, obligations, responsibilities, or rights
under the contract except, however, any and all obligations of the Proposer's surety shall
remain in full force and effect, and shall not be extinguished, reduced, or in any manner
waived by the termination thereof.
In said event, the Proposer shall be entitled to the reasonable value of its services
performed from the beginning date in which the breach occurs up to the day it received the
City's Notice of Termination, minus any offset from such payment representing the City's
damages from such breach. "Reasonable value" includes fees or charges for goods or
services as of the last milestone or task satisfactorily delivered or completed by the
Proposer as may be set forth in the Agreement payment schedule; compensation for any
other work, services or goods performed or provided by the Proposer shall be based solely
on the City's assessment of the value of the work-in-progress in completing the overall work
scope.
The City reserves the right to delay any such payment until completion or confirmed
abandonment of the project, as may be determined in the City's sole discretion, so as to
permit a full and complete accounting of costs. In no event, however, shall the Proposer
be entitled to receive any amount in excess of the compensation quoted in its proposal.
12
Packet Pg 183
Page 12 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
4 PROPOSAL CONTENT AND SELECTION PROCESS
4.1 Overview
The City of San Luis Obispo (“City”) is soliciting proposals from qualified vendors
(“Proposers”) for provision of maintenance services as specified in the Parking Lots and
Structures Sweeping and Janitorial Services RFP – Specification No. 91624. City is seeking
Proposer’s to contract for one or more of the service group components of this RFP as
stated in the RFP Appendix C and Appendix D.
The City requires well-managed and professional Proposers with demonstrated skills, and
high levels of customer service and satisfaction, to fulfill the requirements outlined in this
RFP.
4.2 Calendar of Events
Listed below are specific and estimated dates and times of RFP events, all of which are
subject to change. Proposers must complete events by specific dates as indicated unless
revised by the City. The City may or may not issue a formal notification for changes in
estimated dates and times.
Figure 4-2: Calendar of Events
Date Event
Wednesday, December 13, 2017 Issue date of RFP
Thursday January 11, 2018 3:30pm PST
T
Proposals due
January 2018 (Subject to Change) Evaluation of proposals
January 2018 (Subject to Change) Negotiation and award contract
February 2018 (Subject to Change) Contract Routing to City Council
February 2018 (Subject to Change) Contract Award
March 2018 (Subject to Change)
Contract begins
4.3 Background & Objective
The City of San Luis Obispo operates three parking structures, and 11 parking lots or areas
in the downtown area. The City wishes to have Proposers bid on any or all components of
the RFP proposed service areas. These are specifically 1) manual janitorial services, 2)
pressure washing/scrubbing and 3) Structure and Lot sweeping, for the work defined in
Appendix C and with the frequency defined on Appendix D.
12
Packet Pg 184
Page 13 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
The objective of this RFP is to select vendor(s) to provide the cleaning services at the
locations and on the frequency and the level detailed in this RFP .
4.4 Description/Scope of Work
The Contractor shall perform the cleaning tasks described in Appendix C at the locations
and frequencies specified in Appendix D. The intent of Specification No. 91624 is to procure
a high level of service that will present a pleasing appearance at all times. Each Contractor
shall maintain all specified locations at such a level as required by the City. The City’s
representative shall be sole judge of the adequacy of the Contractor’s maintenance and the
appearance of the sites.
Proposer shall meet all requirements of the specifications contained herein, as well as all
legislated mandates by the State of California, California Vehicle Code, San Luis Obispo
Municipal Code, and the City of San Luis Obispo. For any portion of this proposal that is
performed by Sub-Proposers, see Section 5, Chapter 9 (Required Submittals - Sub
Proposers) of this proposal.
4.5 Selection Process
The City may shortlist up to four (4) Proposers based on the submitted proposals and invite
them to an interview process. In addition, the City may request that Proposers
demonstrate their service either as part of the interview process or separately from it. The
City, at its discretion, may make site visits to locations where the Proposers currently
provide service.
Contract award will not be based solely on price, but on a combination of the factors
determined to be in the best interest of the City. After evaluating the proposals and
discussing them further with the finalists or the tentatively selected Proposer s, the City
reserves the right to further negotiate the proposed work and/or method and amount of
compensation. Once prospective Proposers have been evaluated by the evaluation panel,
negotiations shall begin. If negotiations are unsuccessful, talks with that Proposer will be
abandoned and negotiations will then commence with the next qualified Proposer, and so
on, until a final agreement has been reached and a contract prepared . Staff will present
their findings to the City Council, which, at its discretion, will award a contact.
5. REQUIRED SUBMITTALS AND CONTENT OF PROPOSALS
Proposing Vendors desiring to respond to this Request for Proposal (RFP) shall submit their
proposal in sufficient detail to allow for a thorough evaluation and comparative analysis. The
City shall use the responses as the basis of its evaluation. The proposals should be as brief and
concise as possible without sacrificing clarity. Proposals containing irrelevant material or an
abundance of excessively vague language may be penalized in the screening process.
Arrange proposals to match the following outline. Respond to each and every question and/or
statement. In the context of this section “you” and “your” is the same as “Proposer” and
“Proposer’s”, respectively.
12
Packet Pg 185
Page 14 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
Chapter 1: Title Page
The title page shall contain at a minimum the name of the Proposer, RFP Title, and Due Date.
Chapter 2: Organizational Summary – Description of Organization
Provide a brief summary introducing your firm. Limit your response to one page. At a
minimum, include the information briefly describing your firm’s organization and size and your
experience including the number of years in business.
Chapter 3: References
Provide three references from similar projects and clients. Limit your response to one page.
Chapter 4: Sub Proposers (if any)
Identify any sub-Proposers that would be used. Give a detailed description of their involvement,
scope of work, background, and responsibilities. The price proposed shall include any and all work
to be done by sub-Proposers, and the City will only process claims and payments to the Proposer.
A list of sub-Proposers to be hired shall be submitted as a part of the proposal. Also disclose
whether or not the sub Proposer is a subsidiary or is financially tied to the Proposer in any other
manner. Use of sub-Proposer does not relieve the Proposer of overall responsibility. City reserves
the right to approve all proposed sub-Proposers.
Chapter 5: Disclosure of Contract Failures and Litigation
Disclose any alleged significant prior or ongoing contract failures, contract breaches, any civil or
criminal litigation or investigation pending which involves your firm or in which your firm has
been judged guilty or liable, or which may affect the performance of the services to be rendered
herein, in which your firm, any of its employees, sub-Proposers, or sub consultants is or has been
involved in within the last three (3) years.
Chapter 6: Fee Proposal
Include detailed pricing information for the services described in this RFP.
Quote fees as all inclusive, not-to-exceed, fixed fees for each relevant aspect of the RFP
proposal. The fee could be a one-time fee, fee per use, fee per year or fee per contract period.
Also, identify all other costs beyond the usage cost such as a fee for system maintenance, etc.
As noted above, prepare the fee proposal as all inclusive, not-to-exceed, fixed fees:
o All Inclusive – Covers all direct and indirect expenses incurred by the Proposer including but
not limited to; travel, telephone, copying and other out-of-pocket expenses.
o Not-To-Exceed – The actual fees shall not exceed the amount specified in fee proposal.
o Fixed Fee – All prices, rates, fees and conditions outlined in the proposal shall remain
fixed and valid for the entire length of the contract and any/all renewals.
Provide exact fees - not a range. Take advantage of the opportunity to ask questions and receive
answers to gain clarification. Furthermore, document any significant assumptions for arriving at
fee estimates. You are responsible for verifying the correctness of calculations in your fee
proposal.
12
Packet Pg 186
Page 15 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
The City reserves the right to make an award without further discussion of the fee proposal
submitted. Therefore, the Proposer should submit the fee proposal on the most favorable terms
they can offer. However, this does not limit the City from negotiating with the selected Proposer.
A finalization of the specifications and scope of services is expected as a part of final contract
negotiation or through a Best and Final Offer (BAFO) process. By the BAFO the Proposer(s)
remaining in the process will have met with the City and or demonstrated their product /service
giving them the opportunity to obtain a complete understanding of all requirements.
Chapter 7: Additional Required Forms and/or Attachments
Include the following required forms and/or attachments to your Proposal. Forms are included
in the RFP.
o Form A – Signature Affidavit – A company representative with authority to bind the
Proposer to the City by contract shall sign the form, attesting the proposal has been
submitted in conformance to stated requirements.
o Form B – Vendor Profile – complete the information about your firm.
o Form C – References
o Form D – Statement of Past Contract Disqualifications
o Form E – Cost Proposal Submittal Form
12
Packet Pg 187
Page 16 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
FORM A: SIGNATURE AFFIDAVIT
Note: This form must be returned with your response.
In signing proposals, we certify that we have not, either directly or indirectly, entered into any
agreement or participated in any collusion or otherwise taken any action in restraint of free
competition; that no attempt has been made to induce any other person or firm to submit or
not to submit proposals, that proposals have been independently arrived at, without collusion
with any other Proposers, competitor or potential competitor; that proposals have not been
knowingly disclosed prior to the opening of proposals to any other Proposers or competitor;
that the above statement is accurate under penalty of perjury.
The undersigned, submitting this proposal, hereby agrees with all the terms, conditions, and
specifications required by the City in this Request for Proposal, declares that the attached
proposal and pricing are in conformity therewith, and attests to the truthfulness of all
submissions in response to this solicitation.
Proposers shall provide the information requested below. Include the legal name of the
Proposer and signature of the person(s) legally authorized to bind the Proposers to a contract.
SIGNATURE AND DATE OF AUTHORIZE REPRESENTATIVE
PRINT NAME: __________________________________________________
FIRM (PROPOSER) NAME: ________________________________________
12
Packet Pg 188
Page 17 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
FORM B: VENDOR PROFILE
Company Information
Company Name (Proposer)
FEIN: (If FEIN is not applicable, SSN collected
upon award)
Contact Name Title
Telephone (
)
Fax
(
)
Email
Address City State Zip
Primary Individual Contact Information
Contact Name Title
Telephone
( )
Fax
(
)
Email
Address City State Zip
Secondary Individual Contact Information
Contact Name Title
Telephone
( )
Fax
(
)
Email
Address City State Zip
12
Packet Pg 189
Page 18 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
FORM C: REFERENCES
Describe fully three contracts performed by your firm that demonstrate your ability to provide
the services included with the scope of the specifications. The City reserves the right to contact
references listed for additional information regarding your firm's qualifications.
Reference No. 1
Customer Name
Contact Individual
Telephone & Email
Street Address
City, State, Zip Code
Date of Services
Contract Amount
Description of Services
Reference No. 2
Customer Name
Contact Individual
Telephone & Email
Street Address
City, State, Zip Code
Date of Services
Contract Amount
Description of Services
Reference No. 3
Customer Name
Contact Individual
Telephone & Email
Street Address
City, State, Zip Code
Date of Services
Contract Amount
Description of Services
12
Packet Pg 190
Page 19 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
FORM D: STATEMENT OF PAST CONTRACT DISQUALIFICATIONS
The Proposer shall state whether it or any of its officers or employees who have a proprietary
interest in it, has ever been disqualified, removed, or otherwise prevented from bidding on, or
completing a federal, state, or local government project because of the violation of law, a safety
regulation, or for any other reason, including but not limited to financial difficulties, project
delays, or disputes regarding work or product quality, and if so to explain the circumstances.
Do you have any disqualification as described in the above paragraph to declare?
Yes No
If yes, explain the circumstances.
Executed on at _______________________________________ under
penalty of perjury of the laws of the State of California, that the foregoing is true and correct.
___________________________________________
Signature of Authorized Representative of Proposer
___________________________________________
Print name of Authorized Representative of Proposer
12
Packet Pg 191
Page 20 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
FORM E: COST PROPOSAL SUBMITTAL FORM
The City is requesting proposals for the Parking Lots & Structures Sweeping and Janitorial
Services. Incomplete cost proposals will not be accepted, and the submitted proposal will be
deemed incomplete. If there are any additional costs not included in this Cost Proposal, those
costs must be identified on a separate sheet of paper and included in this Request for Pro posal.
The undersigned, who is authorized to represent the proposing firm and has carefully examined
Specification No 91624, proposes to furnish the services described in Appendix C and Appendix
D of Specification No. 916624 for the prices quoted below in full.
Each Proposer shall fill out a separate cost proposal in its entirety FOR EACH OF THE THREE (3)
COMPONENTS BEING BID. INDICATE COMPONENT BEING BID IN THIS SPECIFIC QUOTE:
Janitorial (Part I) OR Lot & Structure Cleaning/Sweeping (Part II) OR
Power Scrubbing/Pressure Washing (Part III)
Lot 4 (Post Office lot adjacent to Marsh Street Structure)
Lot 8 (City Hall)
Lot 9
Lot 10
Lot 14
Lot 15
Old Library (800 Blk. Morro)
Parks and Recreation
Railroad Square
Railroad Transfer
842 Palm Street Structure
871 Marsh Street Structure
919 Palm Street Structure
Marsh Street Structure Public Restrooms
MONTHLY TOTAL $
Fully Burdened Hourly Labor Rate
for Additional Unspecified Work & Emergency Call Back ________________________________
Hour Billing Minimum Per Emergency Call Back ________________________________
Material Handling Markup Rate (Percentage) ________________________________
Signature of Authorized Representative Date:
Print Name of Vendor:
12
Packet Pg 192
Page 21 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
Appendix A: FORM OF AGREEMENT (SAMPLE)
AGREEMENT
THIS AGREEMENT is made and entered into in the City of San Luis Obispo on [date],
by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter
referred to as City, and [CONTRACTOR’S NAME IN CAPITAL LETTERS], hereinafter
referred to as Contractor.
W I T N E S S E T H:
WHEREAS, on [date], City requested proposals for provision of maintenance
services pursuant to Specification No. 91624 – Parking Lots and Structures Sweeping and
Janitorial Services.
WHEREAS, pursuant to said request, Contractor submitted a proposal which
was accepted by City for said [supplies, equipment, services, project, whatever].
NOW THEREFORE, in consideration of their mutual promises, obligations,
and covenants hereinafter contained, the parties hereto agree as follows:
1. TERM. The term of this Agreement shall be from the date this Agreement is made
and entered, as first written above, until acceptance or completion of said [supplies, equipment, services,
project, whatever].
2. INCORPORATION BY REFERENCE. City Specification No. 91624 and
Contractor's proposal dated [date], are hereby incorporated in and made a part of this Agreement.
3. CITY'S OBLIGATIONS. For providing [supplies, equipment, services, project,
whatever] as specified in this Agreement, City will pay and Contractor shall receive therefo r
compensation in a total sum not to exceed [$ .00].
4. CONTRACTOR'S OBLIGATIONS. For and in consideration of the payments and
agreements hereinbefore mentioned to be made and performed by City, Contractor agrees with City to
do everything required by this Agreement and the said specification.
5. AMENDMENTS. Any amendment, modification, or variation from the terms of this
Agreement shall be in writing and shall be effective only upon approval by the Council [or other official]
of the City.
2.
12
Packet Pg 193
Page 22 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
6. COMPLETE AGREEMENT. This written Agreement, including all writings specifically
incorporated herein by reference, shall constitute the complete agreement between the parties hereto.
No oral agreement, understanding, or representation not reduced to writing and specifically
incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding,
or representation be binding upon the parties hereto.
7. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage prepaid
by registered or certified mail addressed as follows:
City City Clerk
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
Contractor [ ]
[ ]
[ ]
[ ]
8. AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant that each
individual executing this agreement on behalf of each party is a person duly authorized and empowered
to execute Agreements for such party.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and
year first above written.
ATTEST: CITY OF SAN LUIS OBISPO
____________________________________ By:____________________________________
City Clerk City Manager
APPROVED AS TO FORM: CONTRACTOR
_____________________________________ By: ___________________________________
City Attorney
12
Packet Pg 194
Page 23 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
Appendix B: INSURANCE REQUIREMENTS
The Proposer shall procure and maintain for the duration of the contract insurance against claims
for injuries to persons or damages to property which may arise from or in connection with the
performance of the work hereunder by the Proposer, its agents, representatives, employees or
sub Proposers.
Minimum Scope of Insurance. Coverage shall be at least as broad as:
1. Insurance Services Office Commercial General Liability coverage (occurrence form CG 20
10 Prior to 1993 or CG 20 10 07 04 with CG 20 37 10 01 or the exact equivalent as
determined by the City).
2. Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability,
code 1 (any auto).
3. Workers' Compensation insurance as required by the State of California and Employer's
Liability Insurance.
4. Errors and Omissions Liability insurance as appropriate to the consultant's profession.
Minimum Limits of Insurance. Consultant shall maintain limits no less than:
1. General Liability: $1,000,000 per occurrence for bodily injury, personal injury and
property damage. If Commercial General Liability or other form with a general aggregate
limit is used, either the general aggregate limit shall apply separately to this
project/location or the general aggregate limit shall be twice the required occurrence
limit.
2. Automobile Liability: $1,000,000 per accident for bodily injury and property damage.
3. Employer's Liability: $1,000,000 per accident for bodily injury or disease.
4. Errors and Omissions Liability: $1,000,000 per occurrence.
Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be
declared to and approved by the City. At the option of the City, either: the insurer shall reduce
or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials,
employees and volunteers; or the Consultant shall procure a bond guaranteeing payment of
losses and related investigations, claim administration and defense expenses.
Other Insurance Provisions. The general liability and automobile liability policies are to contain,
or be endorsed to contain, the following provisions:
1. The City, its officers, officials, employees, agents and volunteers are to be covered as
insureds as respects: liability arising out of activities performed by or on behalf of t he
Consultant; products and completed operations of the Consultant; premises owned,
occupied or used by the Consultant; or automobiles owned, leased, hired or borrowed by
the Consultant. The coverage shall contain no special limitations on the scope of
protection afforded to the City, its officers, official, employees, agents or volunteers.
2. For any claims related to this project, the Consultant's insurance coverage shall be
primary insurance as respects the City, its officers, officials, employees, agents and
volunteers. Any insurance or self-insurance maintained by the City, its officers, officials,
12
Packet Pg 195
Page 24 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
employees, agents or volunteers shall be excess of the Consultant's insurance and shall
not contribute with it.
3. The Consultant's insurance shall apply separately to each insured against whom claim is
made or suit is brought, except with respect to the limits of the insurer's liability.
4. Each insurance policy required by this clause shall be endorsed to state that coverage
shall not be suspended, voided, canceled by either party, reduced in coverage or in limits
except after thirty (30) days prior written notice by certified mail, return receipt
requested, has been given to the City. The Consultant agrees to notify the City in the
event that the policy is suspended, voided or reduced in coverage or limits. A minimum of
30 days prior written notice by certified mail, return receipt requested, will be provided.
Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating
of no less than A:VII.
Verification of Coverage. Consultant shall furnish the City with a certificate of insurance showing
maintenance of the required insurance coverage. Original endorsements effecting general
liability and automobile liability coverage required by this clause must also be provided. The
endorsements are to be signed by a person authorized by that insurer to bind coverage on its
behalf. All endorsements are to be received and approved by the City before work commences.
Sub-consultants. Consultant shall include all sub-consultants as insured under its policies
or shall furnish separate certificates and endorsements for each sub-consultant. All
coverages for sub-consultants shall be subject to all of the requirements stated herein.
12
Packet Pg 196
Page 25 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
Appendix C: Description of Work
Overall Description of Work. The Contractor shall perform the cleaning tasks described in this
section at the locations and frequencies listed. The intent of this specification is to procure a high
level of cleaning maintenance that will present a pleasing appearance at all times. The Contractor
shall maintain all specified locations at such a level. The City’s representative shall be sole judge
of the adequacy of the Contractor’s maintenance and the appearance of the sites.
PART I: JANITORIAL
A. Parking Structure Cleaning
A. Daily Tasks:
1) Empty and clean trashcans in each of the four exit booths at the three Structures.
(1) at 842 Palm (1) at 919 Palm and (2) at 871 Marsh
2) Clean litter from all surface levels of the structure, alcoves & exterior foyers,
including the exterior sidewalks surrounding the structures.
3) Spot clean significant stains on decks, ramps, stairwells, elevator landings, alcoves &
exterior foyers, including the exterior sidewalks surrounding the structures.
Significant stains include: from any food or drink, Urine, fecal matter and vomit.
4) Clean stairwells, including all elevator landings and alcoves.
5) Clean elevators, disinfect and clean all interior walls, floors, ceilings and windows.
6) Clean both interior and exterior elevator doors and door frames.
B. Weekly Tasks:
1) Clean windows at base of stairwell at Marsh Street Structure near elevator landing
(corner of Marsh & Chorro).
2) Clean archaeological display exterior located in the 842 Palm Structure.
3) Clean drinking fountains located: (1) at 842 Palm Structure (Palm Street side); (2) at
Marsh Street Structure (Chorro Street side and Pacific Street side).
4) Clean 919 Palm Structure employee restroom.
5) Clean 842 Palm Structure employee restroom. (Located in booth)
6) Wet mop alcoves and exterior foyers.
12
Packet Pg 197
Page 26 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
7) Change all trash can liners in all Structures. Trashcans located at top or bottom of
each stairwell landing or just outside each stairwell landing separated by a door.
8) Dispose of all collected dirt, debris, and other material in an approved mann er.
The contractor shall:
1) Not allow contaminated water or cleaning solutions to enter storm drains.
2) Report problems to City Representative (781-7230) by 8:00 a.m. if tasks scheduled for
that day cannot be completed.
3) Report all non-emergencies to Police dispatch (781-7312) These include: People
sleeping in the Structures elevators or surrounding sidewalks and bench areas, people
sleeping in vehicles and any suspicious loitering or behavior.
4) Report emergencies to Police Dispatch (781-7312), and contact Police Dispatch to
deliver any lost and found articles found within 24 hours.
B. Parking Structure Public Restroom Cleaning (Morro Street near corner of
Pacific)
A. Daily Tasks:
1) Disinfect and clean restroom sinks, mirrors, countertops, partitions, walls, and
floors.
2) Disinfect, clean and descale toilets and urinals.
3) Clean all chrome plated or stainless steel surfaces.
4) Clean both interior and exterior doors including entry ways.
5) Refill toilet paper, seat covers and soap dispenser. Empty and reline all trash
containers.
6) Correct minor plumbing problems, clear clogged drains using a plumber’s helper or a
short snake, remove debris from floor drain grates. If plumbing problems cannot be
corrected notify the City representative (781-7230) immediately.
C. Materials and Supplies. All equipment, materials and supplies used for parking lots &
structures and restroom, sidewalks and drinking fountains cleaning shall be biodegradable
and preapproved by the City before any application. A list of proposed cleaning materials
shall be submitted at the time of award. The contractor shall not use any materials,
supplies, or equipment that may damage or destroy existing facilities. Materials, supplies,
and equipment shall not be stored on City property without prior written permission from
the City.
12
Packet Pg 198
Page 27 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
D. Trash and Debris Removal. The Contractor is responsible for removal of all dirt, debris,
trash and foreign objects from the sites and disposal of material s in an approved manner.
E. Graffiti Removal. Wipe off graffiti using an approved cleaning solution if graffiti cannot
be removed or if paint is worn where graffiti has been removed; notify the City
representative immediately at 781-7230.
PART II: Parking Lot and Structure Cleaning (Sweeping)
1. Parking Lot Cleaning
A. Daily Tasks:
1) Remove all dirt, weeds, and debris from parking lot surfaces using approved
motorized sweeper/vacuum equipment and, if necessary, hand -held equipment
(power blowers).
2) Remove all dirt, litter and debris from adjacent sidewalks and bench pads.
3) Remove all litter and debris from adjacent landscaped areas.
4) Remove spots, stains, fecal material, or other debris that possess a hazard to health
or safety.
5) Dispose of all collected dirt, debris, and other material in an approved manner.
The Contractor shall not allow contaminated water or cleaning solution to enter storm drains.
2. Parking Structure Cleaning
A. Weekly Tasks:
1) Parking garage decks and ramps using an approved power sweeper equipped with a
power brush and vacuum system. (A handheld blower will be used to remove dust &
debris from edge of walls and behind all cement car stops prior to using power
sweeper.)
2) For 842 Palm Structure, remove all debris from area underneath both stairwells at
ground level on Palm Street side.
12
Packet Pg 199
Page 28 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
3. Materials and Supplies. All equipment, materials and supplies used for parking lots &
structures and restroom, sidewalks and drinking fountains cleaning shall be biodegradable
and preapproved by the City before any application. A list of proposed cleaning materials
shall be submitted at the time of award. The contractor shall not use any materials, supplies,
or equipment that may damage or destroy existing facilities. Materials, supplies, and
equipment shall not be stored on City property without prior written permission from the
City.
4. Trash and Debris Removal. The Contractor is responsible for removal of all dirt, debris,
trash and foreign objects from the sites and disposal of materials in an approved manner.
PART III: POWER SCRUBBING (PRESSURE WASHING)
1. Parking Structure Cleaning
A. Weekly Tasks:
1) Pressure wash and power scrub oil stains on all levels and ramps (1 level each week
on rotating schedule). Note: This will include any and all spots/stains that are NOT
oil.
2) Hot pressure wash all stairwells and elevator landings at all three Structure
locations. The use of a water barrier must be used to insure “NO” water gets into
the Elevator Shaft!)
3) Pressure wash and power scrub oil stains on all levels and ramps (1 level each week
on rotating schedule). Note: This will include any and all spots/stains that are NOT
oil.
The contractor shall:
Remain compliant with the City’s MS4 storm water permit with the State Water Resources
Control Board, as well as with the provisions of the City’s Municipal Code Chapter 12.08
(Urban Storm Water Quality Management and Discharge Control), by utilizing a full-capture
system and ensure that there is no discharge to the City’s storm water conveyance system.
2. Materials and Supplies. All equipment, materials and supplies used for parking lots &
structures and restroom, sidewalks and drinking fountains cleaning shall be biodegradable
and preapproved by the City before any application. A list of proposed cleaning materials
shall be submitted at the time of award. The contractor shall not use any materials, supplies,
or equipment that may damage or destroy existing facilities. Materials, supplies, and
equipment shall not be stored on City property without prior written permission from the
City.
3. Trash and Debris Removal. The Contractor is responsible for removal of all dirt, debris,
trash and foreign objects from the sites and disposal of materials in an approved manner.
12
Packet Pg 200
Page 29 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
Appendix D: Locations and Work Hours
PARKING LOTS LOCATION WORK DAYS WORK HOURS
Lot 4 (PO Parking) Lower Level MSS Mon. & Thurs. 3:30 a.m. - 8:00 a.m.
Lot 8 (City Hall) 900 block Mill Mon. & Thurs. 3:30 a.m. - 8:00 a.m.
Lot 9 600 block Monterey Mon. & Thurs. 3:30 a.m. - 8:00 a.m.
Lot 10 1000 block Nipomo Daily 3:30 a.m. - 8:00 a.m.
Lot 14 600 block Palm Mon. & Thurs. 3:30 a.m. - 8:00 a.m.
Lot 15 600 block Monterey Mon. & Thurs. 3:30 a.m. - 8:00 a.m.
Old Library 800 block Morro Mon. & Thurs. 3:30 a.m. - 8:00 a.m.
Parks & Recreation 1300 block Nipomo Mon. & Thurs. 3:30 a.m. - 8:00 a.m.
Railroad Square 1820 Osos Mon. & Thurs. 3:30 a.m. - 8:00 a.m.
Railroad Transfer 950 High Street Mon. & Thurs. 3:30 a.m. - 8:00 a.m.
PARKING STRUCTURE LOCATION DUTIES WORK HOURS
Palm Structure (old) 842 Palm Street Janitorial (Sun. - Sat.)
Power Scrub/Pressure
Washing (Saturday)
Power Blowing and
Sweeping (Tuesday)
3:30 a.m. – 8:30 a.m.
7:00 a.m. – 9:00 a.m.
7:00 a.m. – 10:00 a.m.
Marsh Structure 871 Marsh Street Janitorial (Sun. - Sat.)
Power Scrub/Pressure
Washing (Saturday)
Power Blowing and
Sweeping (Friday)
3:30 a.m. – 8:30 a.m.
3:30 a.m. – 7:00 a.m.
3:30 a.m. – 8:00 a.m.
Palm Structure (new)
919 Palm Street Janitorial (Sun. - Sat.)
Power Scrub/Pressure
Washing (Saturday)
Power Blowing (Friday)
Sweeping (Friday)
3:30 a.m. – 8:00 a.m.
3:30 a.m. – 7:00 a.m.
3:30 a.m. – 8:00 a.m.
Marsh Structure
Public Restroom
1100 Block Morro Janitorial (Sun. - Sat.)
10:00 p.m. – 8:30 a.m.
12
Packet Pg 201
Page 30 Parking Lots & Structures Sweeping and Janitorial Services RFP – specification no. 91624
Appendix E: Parking Lots and Structures Square Footage
PARKING LOTS & STRUCTURES Area in Square Feet
Lot 4 (Ground Level Marsh Structure) 6,360
Lot 8 (City Hall) 17,000
Lot 9 10,000
Lot 10 9,470
Lot 14 38,000
Lot 15 5,000
Old Library Parking 1,200
Parks and Recreation 4,000
Railroad Square 100,000
Railroad Transfer Center 81,500
842 Palm Structure 130,000
871 Marsh Structure 200,000
919 Palm Structure 103,000
12
Packet Pg 202
Meeting Date: 12/12/2017
FROM: Daryl R. Grigsby, Director of Public Works
Prepared By: Jake Hudson, Transportation Manager
Adam Fukushima, Active Transportation Manager
SUBJECT: CITY COUNCIL RESOLUTION SUPPORTING THE MISSION OF THE
CENTRAL COAST DISTRACTED DRIVING AWARENESS
PARTNERSHIP
RECOMMENDATION
Adopt a resolution supporting the mission of the Central Coast Distracted Driving Awareness
Partnership
DISCUSSION
Background
The Central Coast Distracted Driving Awareness Partnership (CCDDAP) is a regional coalition
created by Bike SLO County in 2017. Bike SLO County joined several local organizations to
address distracted driving as a growing problem that concerns all road users. Some of
CCDDAP’s many organizational partners include the San Luis Obispo Council of Governments,
the San Luis Obispo County Office of Education, and the San Luis Obispo Bike Club. To
successfully address distracted driving, CCDDAP is seeking partnership among local
organizations and agencies and has asked the City for support of its mission.
In 2016, as part of the annual Traffic Safety Report, the City Council adopted a Vision Zero
policy goal to eliminate all traffic related fatalities and major injuries by the year 2030. As part
of the annual Traffic Safety Report, the City continues ongoing implementation efforts in
Enforcement, Education, Traffic Safety, Traffic Operations, and Neighborhood Traffic
Management programs to help reduce distracted driving and other factors in traffic collisions.
Support of the CCDDAP is consistent with the Cit y Council’s Major City Goal of promoting
multimodal transportation, and all City policies and programs addressing safety for drivers,
passengers, cyclists, and pedestrians.
ENVIRONMENTAL REVIEW
The recommended action is not a “Project” as defined by the California Environmental Quality
Act.
FISCAL IMPACT
No authorization of funding is requested with this resolution. Modest staff time is anticipated
and accommodated through existing work efforts.
13
Packet Pg 203
ALTERNATIVES
1. Council could decide not to support the resolution.
Attachments:
a - Resolution
13
Packet Pg 204
R ______
RESOLUTION NO. (2017 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, ENDORSING THE MISSION OF THE CENTRAL
COAST DISTRACTED DRIVING AWARENESS PARTNERSHIP
WHEREAS, Vision Zero is a philosophy, adopted by many cities and states around the
country, that no loss of life or serious injury on the transportation system is acceptable; and
WHEREAS, the City has adopted a Vision Zero policy goal to eliminate all traffic related
fatalities and serious injuries by 2030; and
WHEREAS, the Circulation Element of the San Luis Obispo General Plan provides policy
intent to provide a system of streets that are safe for all forms of transportation, while reducing
dependence on single-occupant use of motor vehicles by supporting and promoting alternatives
such as walking, bicycling and transit; and
WHEREAS, the mission of the Central Coast Distracted Driving Awareness Partnership
is to reduce the costly physical, emotional, and financial effects that distracted driving has upon
the lives of Central Coast resident and visitors
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. This City Council hereby endorses the mission of the Central Coast
Distracted Driving Awareness Partnership to reduce the costly physical, emotional, and financial
effects that distracted driving has upon the lives of Central Coast residents and visitors.
SECTION 2. The City Council directs the Public Works, Fire and Police Departments to
continue implementation of the City’s Enforcement, Education, Traffic Safety, Traffic Operations,
and Neighborhood Traffic Management programs to support the mission of the Central Coast Driving
Awareness Partnership.
SECTION 3. The City Council hereby authorizes the Mayor to support additional Vision
Zero efforts in the future to eliminate traffic related fatalities and major injuries.
Upon motion of , seconded by , and on the following roll
call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________, _______.
13
Packet Pg 205
Resolution No. _____ (2017 Series) Page 2
R ______
______________________________
Mayor Heidi Harmon
ATTEST:
_____________________
Carrie Gallagher
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, _________.
____________________________________
Carrie Gallagher
City Clerk
13
Packet Pg 206
Meeting Date: 12/12/2017
FROM: Greg Hermann, Acting Assistant City Manager
Prepared By: Carrie Gallagher, City Clerk
SUBJECT: ADOPTION OF AN ORDINANCE AMENDING AND REAFFIRMING THE
CURRENT ELECTION CAMPAIGN REGULATIONS
RECOMMENDATIONS
Adopt an Ordinance No. 1643 (2017 Series) which would re-adopt Chapter 2.40, Sections
2.40.010 through 2.40.130 in their entirety; amend Section 2.40.140; and remove Section
2.40.150 of the Municipal Code related to Election Campaign Regulations.
DISCUSSION
On November 21, 2017 the City Council voted 5-0 to introduce Ordinance No. 1643 (2017
Series), An Ordinance of the City Council of the City of San Luis Obispo, California, readopting
and amending Chapter 2.40 of the Municipal Code related to election campaign regulations.
ENVIRONMENTAL REVIEW
The recommended actions are not subject to the California Environmental Quality Act as it is not
a project as defined under the act.
ALTERNATIVES
Council may choose to not readopt current Campaign Regulations and therefore, per Chapter
2.40.150 of the City of San Luis Obispo Municipal Code, current regulations would expire on
June 30, 2018. This is not recommended as local Campaign Regulations provide clarity about
appropriate campaign activities and create transparency and promote trust with City voters.
Attachments:
a - Ordinance
b - Exhibit A
Packet Pg 207
14
O 1643
ORDINANCE NO. 1643 (2017 Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, READOPTING AND AMENDING CHAPTER
2.40 OF THE MUNICIPAL CODE RELATED TO ELECTION CAMPAIGN
REGULATIONS
WHEREAS, on the 20th day of May 2014, the Council of the City of San Luis Obispo
adopted Ordinance No. 1599 (2014 Series) entitled “An Ordinance of the City Council of the
City of San Luis Obispo, California, amending Chapter 2.40 of the Municipal Code related to
Election Campaign Regulations.”
WHEREAS, Section 2.40.150 of the City of San Luis Obispo Municipal Code states that,
unless readopted, Chapter 2.40 expires on June 30, 2018; and
WHEREAS, the City Council desires to readopt Chapter 2.40 with minor modification in
order to continue regulating local election campaigns.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Sections 2.40.010 through 2.40.130 of the San Luis Obispo Municipal Code
are hereby readopted in their entirety as set forth in Exhibit A attached hereto and incorporated
herein by this reference.
SECTION 2. Section 2.40.140 of the San Luis Municipal Code is hereby readopted and
amended to read as follows:
2.40.140 Council study committee.
A. Appointment. At least nine months prior to the expiration of this chapter, The
council shall may appoint a committee of at least five citizens to study the efficacy
of this chapter. the committee shall complete its deliberations and report its findings
to the city council on or before January 31, 2018.
SECTION 3. Section 2.40.150 of the San Luis Obispo Municipal Code is hereby repealed
in its entirety.
SECTION 4. If any provision, clause, sentence or paragraph of this chapter or the
application thereof to any person or circumstances shall be held invalid, such invalidity shall not
affect the other provisions of this chapter which can be given effect without the invalid provision
or application, and to this end the provisions of this chapter are declared to be severable.
SECTION 5. A summary of this ordinance, together with the names of Council members
voting for and against, shall be published at least five (5) days prior to its final passage, in The
Tribune, a newspaper published and circulated in this City. This ordinance shall go into effect at
Packet Pg 208
14
Ordinance No. 1643 (2017 Series)
O 1643
the expiration of thirty (30) days after its final passage.
INTRODUCED on the ______day of ___________, 2017, AND FINALLY ADOPTED
by the Council of the City of San Luis Obispo on the _____ day of _____________, 2017, on the
following roll call vote:
AYES:
NOES:
ABSENT:
Mayor Heidi Harmon
ATTEST:
Carrie Gallagher
City Clerk
APPROVED AS TO FORM:
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of
San Luis Obispo, California, this _______day of ___________,__________.
Carrie Gallagher
City Clerk
Packet Pg 209
14
2.40.010 Title.
This chapter may be cited as the election campaign regulations of the city.
2.40.020 Purpose and intent.
A. It is the purpose and intent of this chapter:
1. To promote integrity, honesty, fairness, and transparency in municipal election campaigns.
2. To prevent corruption, or the appearance of corruption, which results from the real or
imagined influence of large contributions on the conduct or actions of candidates elected
to office.
3. To ensure a level of discussion of public issues adequate for a viable campaign by
providing voters with the information necessary to make an assessment of each candidate
or measure before voting.
4. To require public disclosure of campaign contributions and expenditures made in supp ort
of or in opposition to candidates or measures in municipal elections.
5. To place realistic and enforceable limits on the amounts persons may contribute in
municipal election campaigns.
6. To ensure that funds contributed to a campaign committee are used solely for campaign
purposes.
7. To provide full and fair enforcement of all the provisions of this chapter.
B. By enacting this chapter, the council does not intend to deprive or restrict any citizen of the
exercise of rights guaranteed under the United States Constitution and the California
Constitution.
C. The city council takes specific notice of the findings and declarations made in the Political
Reform Act and finds and declares them applicable to San Luis Obispo and a basis for enacting
this chapter.
D. It is the intent of this chapter to impose limits on the amount of money that may be contributed
to a candidate or controlled committee to achieve the purposes specified in this section. This
chapter is not intended, and shall not be construed, to establish any reporting, filing, or
procedural requirement in addition to, or different from, the Political Reform Act or the
regulations adopted by the Fair Political Practices Commission (FPPC), except as specifically
set forth in Sections 2.40.050 and 2.40.090 infra.
2.40.030 Definitions.
The terms used in this chapter shall have the same definitions as specified in the Political Reform
Act and FPPC regulations. In those cases where definitions in the Political Reform Act or FPPC
regulations contain a specific reference to any state election, candidate, or electoral criteria, the
definition shall be modified to reflect the municipal equivalent, or, in the absence of a municipal
equivalent, to delete the specific reference.
Packet Pg 210
14
2.40.040 Contribution limitations.
A. Contributions by Persons to Candidates and/or Controlled Committees. No person shall make
any contribution to a candidate and/or any controlled committee connected with that candidate,
with respect to any single election, which would cause the total amount contributed by such
person to the candidate and any controlled committee connected with that candidate, when
combined, to exceed three hundred dollars.
B. Acceptance or Solicitation by Candidates or Controlled Committees. No candidate or
controlled committee shall solicit or accept any contribution from any person which would
cause the total amount contributed by such person, with respect to any single election, to the
candidate and/or any controlled committee connected with that candidate, when combined, to
exceed the sum of three hundred dollars.
C. Contributions by Candidates. The provisions of subsections A and B of this section shall not
apply to contributions from a candidate or from his or her immediate family to any controlled
committee connected with that candidate, nor to the expenditure, by the candidate, of his or
her personal funds. For purposes of this section, “immediate family” means a candidate’s or
elected officeholder’s spouse or domestic partner, and/or dependent children.
D. Anonymous Contributions. No candidate or controlled committee shall accept anonymous
contributions, with respect to any single election, which exceed fifty dollars. Subject to the
provisions of state law, in the event a candidate or controlled committee receives an
anonymous contribution that would result in a violation of this subsection, the candidate or
controlled committee shall promptly pay that sum to the city for deposit into the general fund
to be used to defray the costs of municipal elections.
2.40.050 Election campaign accounts.
A. Campaign Bank Accounts. An individual who plans to run for a city elective office and who
plans to accept contributions and make campaign-related expenditures must set up a campaign
bank account at a financial institution with a branch located in the city of San Luis Obispo.
B. Access to Records by City Clerk. The city clerk shall have full access at all reasonable hours
to the bank’s records concerning all election campaign accounts.
2.40.060 Campaign statements.
A. Required Filing Schedule. Every campaign treasurer shall file with the city clerk campaign
statements as required by the provisions of the Government Code and in a format acceptable
to the city clerk.
B. Contents. Each state campaign statement filed shall contain the information required under the
provisions of the Government Code and any contributions greater than $50.
C. Filing. Each document required to be filed in this chapter shall be filed with the city clerk
during business hours, and elsewhere as may be required by the Government Code.
D. Publication. The city clerk shall promptly, following receipt for filing, post a copy of each
campaign statement on the city of San Luis Obispo’s website for public inspection, redacting
personal information in accordance with state law. The city clerk shall report on the website of
any candidate and/or committee that has failed to comply by the required deadline with the
campaign statement requirements pursuant to this section or state law. In addition, the city
Packet Pg 211
14
clerk shall cause to be published a display ad in a newspaper of general circulation advising
the public how and where to access copies of the filed campaign statements on the city of San
Luis Obispo’s website, at the time mail ballots are distributed for said election.
2.40.070 Campaign signs.
A. Severability. This section is a separate and severable provision of the election campaign
regulations.
B. Campaign Signs. Campaign signs shall not exceed three square feet per sign in residential
zones and ten square feet per sign in nonresidential zones, and shall be removed no later than
ten days following the election.
C. Definition. “Campaign sign” means a sign intended to draw attention to or communicate a
position on any issue, candidate, or measure in any national, state, local, college or university
campus election, the placement of which is in conformity with Section 15.40.300 (Prohibited
signs); and which otherwise is not subject to regulation under Chapter 15.40 (Sign
Regulations).
2.40.080 Responsibilities of city clerk.
A. Duties. In addition to any other duties required of the city clerk under this chapter, the city
clerk shall:
1. Prescribe and furnish, without charge, appropriate forms for all campaign statements,
documents and reports required to be filed by this chapter.
2. Determine whether required statements and declarations have been filed and, if so, whether
they conform on their face with the requirements of this chapter.
3. Promptly notify all persons who have failed to file a statement in the form and at the time
required by this chapter.
4. Report, in writing, apparent violations of this chapter to the city attorney.
5. Promptly, following receipt for filing, post a copy of each campaign statement on the city
of San Luis Obispo’s website for public inspection. The city clerk shall report on the
website of any candidate and/or committee that has failed to comply by the required
deadline with the campaign statement requirements pursuant to this section or state law. In
addition, the city clerk shall cause to be published one display ad in a newspaper of general
circulation advising the public how and where to access copies of the filed campaign
statements on the city of San Luis Obispo’s website.
6. Compile and maintain a current log of all filed statements pertaining to each reporting
committee.
2.40.090 Criminal misdemeanor actions.
Any person who violates any provision of this chapter is guilty of a misdemeanor. Any person
who causes any other person to violate any provision of this chapter, or who aids and abets any
other person in the violation of any provision of this chapter, shall be liable under t he provisions
of this section.
2.40.100 Civil actions.
Packet Pg 212
14
A. Any person who intentionally or negligently violates any provision of this chapter shall be
liable in a civil action brought by the city attorney or by a person residing within the city for
an amount not more than three times the amount of the unlawful contribution or expenditure.
B. If any person files an original city campaign statement after any deadline imposed by this
chapter, he or she shall pay, in addition to any other penalties provided for under this chapter,
the sum of one hundred dollars per day after the deadline until the statement or report is filed.
Liability may not be enforced if on an impartial basis the city clerk determines that the late
filing was not willful and that enforcement of the liability will not further the purposes of this
chapter. In addition, the city clerk may assess any applicable fines in accordance with state
law.
C. If two or more persons are responsible for any violation, they shall be jointly and severally
liable.
D. Any person, before filing a civil action pursuant to this section, shall first file with the city
attorney a written request for the city attorney to commence the action. The request shall
contain a statement of the grounds for believing a cause of action exists. The city attorney shall
respond within ten days after receipt of the request indicating whether he or she intends to file
a civil action. If the city attorney indicates in the affirmative and files a suit within thirty days
thereafter, no other action may be brought unless the action by the city attorney is dismissed
without prejudice.
E. In determining the amount of liability, the court may take into account the seriousness of the
violation and the degree of culpability of the defendant. If a judgment is entered against the
defendant or defendants in an action, the plaintiff shall receive fifty percent of the amount
recovered. The remaining fifty percent shall be deposited into the city treasury. In an action
brought by the city attorney, the entire amount shall be paid to the city treasury.
F. No civil action alleging a violation of any provision of this chapter shall be filed more than
four years after the date the violation occurred.
2.40.110 Injunctive relief.
The city attorney or any person residing in the city may sue for injunctive relief to enjoin violations
or to compel compliance with the provisions of this chapter.
2.40.120 Cost of litigation.
The court may award to a plaintiff or defendant who prevails in any action authorized by this
chapter his or her costs of litigation, including reasonable attorneys’ fees; provided, however, no
costs of litigation or attorneys’ fees shall be awarded against the city.
2.40.130 Construction of provisions.
A. This chapter shall be in addition to all other city and state laws applicable to municipal
elections. Unless the contrary is stated or clearly appears from the context, the definitions and
terms set forth in the Government Code shall govern the interpretations of terms used in this
chapter. This chapter shall be construed liberall y in order to effectuate its purposes.
B. If any provision of this chapter, or the application thereof to any person or circumstance, is
held invalid, the validity of the remainder of the chapter and the applicability of such provision
to other persons and circumstances shall not be affected thereby.
Packet Pg 213
14
Page intentionally left
blank.
14
Meeting Date: 12/12/2017
FROM: Daryl Grigsby, Director of Public Works
Prepared By: Brian Nelson, Acting Supervising Civil Engineer
SUBJECT: COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) MARSH STREET
CURB RAMPS PROJECT, SPECIFICATION NO. 91544
RECOMMENDATION
1. Approve Plans and Specifications for the Community Development Block Grant (CDBG)
Marsh Street Curb Ramps project, Specification No. 91544; and
2. Authorize staff to advertise for bids and authorize the City Manager to award the contract if
the lowest responsible bid is within the Engineer’s Estimate of $195,500.
DISCUSSION
This project is part of an ongoing program to increase accessibility to streets and sidewalks to all
community members by constructing sidewalk curb ramps throughout the City of San Luis
Obispo public rights-of-way. This work is funded by both Community Development Block Grant
(CDBG) and City General funds. Sidewalk curb ramps provide access and implement state and
federal accessibility requirements.
Marsh Street from Archer Street to Johnson Avenue is the work area for this project since there
are 31 non-compliant curb ramps, there is high pedestrian usage, and these improvements are
required due to scheduled pavement improvements in the summer of 2019. This project will
replace curb ramps on six corners with existing non-compliant ramps and install truncated domes
at 14 other ramps. The 11 remaining corner ramps are planned to be upgraded as a component of
private development projects or the paving improvements scheduled for 2019.
Currently, the City is updating the inventory of known accessibility improvements and that work
should be complete in the next several months. Based on current information, there are 2,436
locations at intersections where pedestrians may cross the street. Of these locations:
• 703 or 29% of the locations meet current ADA standards.
• 1207 or 50% of the locations already have a transition ramp that does not meet current
standards. These ramps typically have steep slopes or do not have truncated domes
which are used by the visually impaired.
• 526 or 22% of the locations do not provide a ramp between the sidewalk and street.
Currently, it is the City’s practice to prioritize curb ramp installation based on individual requests
by community members with special needs and then proceeding with scheduled pavement
maintenance.
Packet Pg 214
15
ENVIRONMENTAL REVIEW
This project uses Federal CDBG funds, and National Environmental Protection Act (NEPA)
clearance has been obtained through the County of San Luis Obispo. Additionally, the project is
categorically exempt from CEQA review pursuant to CEQA Guidelines Section 15301 (Existing
facilities).
FISCAL IMPACT
This project is included in the 2017-19 Financial Plan, pages E2-132 to E2-134. The total
anticipated budget needed for project construction is $236,600. The current project budget is
$132,621, which leaves an additional funding need of $103,979. The variance between the
current budget and the budget required by the project scope is due to construction costs that have
doubled on average for curb ramp related projects since 2015, which can be attributed to an
improved economy. CDBG grant funding, which comprises the majority of the current budget,
has not increased relative to increasing costs. Therefore, staff recommends that additional funds
be allocated from the Street Reconstruction and Resurfacing Master Account to supplement the
required budget. The Street Reconstruction and Resurfacing Account currently has a balance of
$1,215,175 of which approximately $700,000 is planned to be used to repair Dana Street and the
intersections of Palm at Johnson and Palm at Toro. The remainder balance is anticipated to be
used on the southerly portions of Broad Street near the Airport to replace pavement failures. A
Budget Amendment Request will be completed at the time of contract award to transfer funding
into this project’s account.
Estimated Project Cost by Funding Sources
Sidewalk
Ramp
Comstruction
(99868)
Streets R&R
Master
Account
(90346)
Total
Construction Estimate:$132,621 $62,879 $195,500
Contingencies:$39,100 $39,100
Material Testing:$1,500 $1,500
Printing:$500 $500
Total for Project:$132,621 $103,979 $236,600
CDBG Grand Funding:$105,000
General Fund Balance:$27,621 $1,215,175
Total Current Account Balance:$132,621 $1,215,175
CDBG MARSH STREET CURB RAMPS, SPECIFICATION NO. 91544
ALTERNATIVES
Deny authorization to advertise. The City Council may choose not to authorize project
advertisement. This is not recommended because the CDBG Curb Ramp project is mostly
supported by grant money and the project provides ADA access to City sidewalks.
Packet Pg 215
15
Attachments:
a - Council Reading File - 91544 Plans
b - Council Reading File - 91544 Specifications
Packet Pg 216
15
Page intentionally left
blank.
15
Meeting Date: 12/12/2017
FROM: Derek Johnson, City Manager
Shelly Stanwyck, Parks and Recreation Director
Xenia Bradford, Finance Director
Prepared By: Xenia Bradford, Finance Director
SUBJECT: BUDGET FOUNDATION: FISCAL HEALTH RESPONSE PLAN
RECOMMENDATION
1. Review and provide general direction to staff regarding proposed components and allocations
for the development of a Fiscal Health Response Plan (FHRP) with final adoption of the
FHRP in April 2018; and
2. Provide direction to staff to return in April 2018 with specific recommendations on the use of
one-time fund balance above policy reserve including dollar allocation to fund a Section 115
Pension Trust to address long-term variability in pension costs and address unfunded
liability; and
3. Review a preliminary 10-Year Capital Improvement Plan (CIP) and provide general direction
to staff to return to Council in January 2018 for final review including recommendations to
allocate reserves in excess of policy requirements towards community safety project.
REPORT-IN-BRIEF
This report has three separate sections for Council to receive and provide direction on:
1. Fiscal Health Response Plan (FHRP).
2. Pension Trust Formation using Reserves in Excess of Policy Level.
3. 10-Year CIP.
The City of San Luis Obispo is committed to fiscal health and delivery of quality services to the
community. Due to significant policy changes made by the California Public Employees’
Retirement System (CalPERS) to address unfunded liabilities, the City identified a need to
reduce ongoing expenditures by $8.9 million (in all funds) in order to meet rapidly rising pension
costs. The Budget Foundation sets general strategic direction that will lead to specific
recommendations and adoption of the FHRP in April 2018. The FHRP will establish a roadmap
to long-term fiscal health and financial sustainability implemented during a period of three fiscal
years (2018-19, 2019-20 and 2020-21).
With the development of the 2017-19 Financial Plan, the Council adopted the Fiscal
Sustainability and Responsibility Major City Goal addressing long-term fiscal health. The Fiscal
Sustainability and Responsibility Major City Goal includes four major work areas: 1) Economic
development and responsiveness; 2) Fiscal responsibility including actions to ensure structurally
balanced fiscal outlook; 3) Addressing long-term unfunded liabilities; and 4) Infrastructure
Packet Pg 217
16
financing. On November 7th the Council received and filed presentation on the approach and
timeline to develop the FHRP that addresses the second and third major work areas of the goal;
actions to ensure a structurally balanced fiscal outlook and address unfunded liabilities.
The current and anticipated fiscal challenge is driven by rapidly rising pension costs needed
primarily to pay down unfunded liabilities. The City’s fiscal forecast has been extended to a ten-
year timeframe to provide the Council and the community with a longer-term financial outlook.
Along with the 10-year CIP, these tools provide more effective communication of the longer-
term impacts of the proposed solution.
The recommended solution is to reduce an ongoing budget gap of $8.9 million dollars by fiscal
year 2020-21, of which $7.5 million represents the General Fund and $1.4 million represents
Enterprise Funds (Water, Sewer, Parking, and Transit). The recommendations are based on long-
term fiscal health analysis for each operating fund and community and staff feedback. The
recommendation presented for Council consideration and detailed in the “Solution Components
Recommendation” section of the report is presented by fund and outlines associated efficiencies,
service level impacts, and risks associated with the solution.
In order to propose a solution, staff assessed the service level impacts of meeting the $7.5 million
target through General Fund operating reductions alone. Significant reductions in public safety,
infrastructure maintenance, parks services, capital project delivery and other areas would be
necessary so a more balanced approach that includes new ways of doing business, new revenues
and employee concessions is proposed to meet the $7.5 M General Fund target.
New Revenue 30% to 40%
Operating Reductions and New Ways of Doing Business 30% to 40%
Employee Concessions 20% to 30%
The Enterprise Fund solutions totaling $1.4 M will be met through various strategies unique to
each fund. The primary reliance will be on doing business differently and employee
concessions. Enterprise Fund revenues are those revenue projections based on approved and
historic rates and revenue growth trends.
Based on the preliminary fiscal forecasts (Attachment A), it is expected that the recommended
reductions and new general fund revenues will generate adequate one-time resources in the first
three to five years to allocate toward a Section 115 Pension Trust. Specific recommendations for
allocations to that Trust would be made by Council in April 2018, assuming Council provides
direction to form such Trust.
A 10-year CIP is included to introduce the City’s long-term capital improvement plans and
needs. This document takes a preliminary look capital projects planned and to be funded by
General Fund as well as capital projects required by the Enterprise Funds (Water, Sewer, Parking
and Transit) which are funded through the funds own sources of revenue collected through
various fees. Staff will return to Council in January to present the ten-year CIP in detail and seek
direction regarding those long-term needs. The preliminary CIP is presented with this report to
provide a thorough understanding of the long-term fiscal outlook and competing priorities.
Packet Pg 218
16
DISCUSSION
BACKGROUND
Background: Major City Goal -Fiscal Sustainability and Responsibility
With the adoption of the City's 2017-19 Financial Plan, Council continued to address the City's
long-term financial sustainability by adopting the Major City Goal - Fiscal Sustainability and
Responsibility. The Major City Goal work program includes engaging residents, staff, businesses
and other interested members of the community in developing strategies to address the fiscal
challenges ahead with a focus on the City's long-term financial sustainability. The FHRP will be
presented to Council in April 2018 and is a key deliverable of this goal.
Background: the Problem
Like almost 3,000 other member agencies in CalPERS, the City is facing significant increases in
required pension contributions. The City's annual CalPERS costs are projected to more than
double in ten years; growing from $7.8 million in 2014-15 to $19 million in 2024-25 for the
General Fund. These costs will continue to grow through 2031-32 and affect all funds including
the City's Enterprise Funds (Water, Wastewater, Transit, and Parking).
The City has determined that expenditures need to be reduced by approximatel y $8.9 million
($7.5 million from the General Fund and $1.4 million from the Enterprise Funds) over the next
three fiscal years to address these rapidly rising costs. The size of the problem has been informed
using fiscal forecasting supported by third party economic models as well as the City's outside
sales tax advisor and actuary specializing in pensions. The City's forecasting is based on
assumptions such as:
1. Continuing current levels of service,
2. Continuing the commitment to capital investment including a slight increase
due to ongoing maintenance needs,
3. Modest long-term revenue growth and inflation,
4. Required pension contributions to CalPERS,
5. Continuing Local Revenue Measure (Measure G) funds used consistent with
voter directive and Council policy,
6. Enterprise Funds revenue projections based on approved and historic rates and
revenue growth trends.
While CalPERS is the driver for the current fiscal challenge, it is not practically feasible for the
City to leave CalPERS. To exit CalPERS, the City would have 30 days to meet its projected
(worst case) financial obligations currently estimated to be from $377 to $495 million at the
time of separation. Furthermore, the current legal framework in California restricts cities’
ability to reduce retirement benefits for current employees, as well as retirees. Lastly, the City’s
contract with CalPERS forbids offering alternative retirement benefits for new employees.
Packet Pg 219
16
Background: The Fiscal Context for the Problem and for the FHRP Development
1. The City Has a History of Strong Financial Management and Fiscal Policies
The City continuously monitors long-term fiscal health and has a long history of strong
financial management. The 2016 Fitch Credit Rating review affirmed the City’s implied
default rating at AA+ and the City has received positive remarks for financial
management and a quick recovery from the Great Recession (2008 -2010). Along with
community engagement and prioritization of resources, long-term fiscal forecasting is an
integral part of the City’s financial planning.
On July 1, 2014, the City Council adopted a Financial Responsibility Philosophy as a
means for promoting community health and well-being. The philosophy calls on the City
to commit to fiscal responsibility through good economic times, as well as economic
downturns, and focuses on the following (Attachment E: Adopted Financial
Responsibility Philosophy):
a. Informed Decision-making.
b. Shared Responsibility.
c. Increased Transparency.
d. Aligned Investments.
e. Diversified and Aligned Revenue Sources. Long-Term Unfunded
Liabilities.
f. Continued Efficiency and Effectiveness.
In June of 2017, the City Council also formally adopted a fiscal policy regarding
Long-Term Liabilities and Maintenance of Infrastructure. The policy prioritizes
applying unassigned fund-balance due to one-time expenditure savings or one-time
increases in revenue to paying down long-term unfunded liabilities and investment in
infrastructure.
2. Impacts of CalPERS Lowering the Rate of Return
During 2017-19 Financial Plan development, CalPERS’ latest policy change to lower the
discount rate (or assumed rate of return) from 7.5% to 7% over a period of three years,
negatively impacted the City’s long-term fiscal outlook. Expenditures outpace revenues
starting in fiscal year 2018-19 for the General Fund and there are significant impacts to
the Enterprise Funds as well. The financial forecasts and recommendations are based on
current CalPERS policy and actuary analysis assumptions.
In November 2017, CalPERS discussed strategies to further lower the expected rate of
return or to shorten amortization period to pay-off unfunded liabilities in 20 years instead
of 30 years. The decision was delayed and will likely not be finalized until February
2018. The League of California Cities along with other agency representatives have
strongly urged the CalPERS Board not to take such actions due to significant
implications to the participant agencies and call for a legislative reform to address the
benefits.
Packet Pg 220
16
3. The City’s Fiscal Forecast in General
Attachment A is an updated General Fund fiscal forecast. Attachment B is an updated
fiscal forecast for Enterprise Funds.
The City’s fiscal forecasts and recommendations are based on the facts known today;
some uncertainties are impractical and impossible to model. Significant policy and
budget changes proposed at the Federal level may carry substantial impacts at the
Federal, State, and local levels including potential reductions in federal dollars awarded
to the City. Additionally, the longest steady but slow economic expansion since the Great
Depression has created an additional challenge for economists’ analysis.
The City uses multiple resources to develop its economic forecasts. The City partners
with Beacon Economics to monitor the economic climate and inform financial forecasts.
Beacon uses econometric analysis to take into account the macro economic climate from
Federal, State and local levels. The City also contracts with HdL Companies for detailed
analysis of the City’s sales tax patterns and with MuniServices for analysis of utility
user’s tax trends.
Overall, Beacon Economics foresees continued economic expansion. According to the
Beacon Economics report prepared for the City in November 2017.
Beacon Economics’ forecast represents an optimistic outlook through
2026–27 and assumes that the U.S. economy will grow at a moderate
pace, much as in recent years. Because of uncertainty surrounding
President Trump’s policies, there is an inherent uncertainty within this
forecast. Beacon will closely monitor policies as they are announced and
enacted and will adjust its economic outlook accordingly.
Overall, the San Luis Obispo economy is trending in the right direction,
and nothing on the immediate horizon signals a reversal of that trend. The
regional labor market is tight, although employment levels have been
reaching new highs virtually every month. The residential real estate
market has been characterized by low inventories, which will restrict
resales in the near term, but Beacon expects inventories to return to
historical norms over the coming years. Fuel prices have stabilized and
are trending higher, which will support growth in taxable sales. These
transitory factors are expected to fade, and Beacon sees the fundamentals
of the local economy remaining strong over the near term.
In summary, the City’s ten-year forecasts for the General Fund and the Enterprise Funds
are all constrained by the impact of rapidly rising pensions costs. Ten-year CIP needs for
the General Fund that will be brought to Council in January, are not fully reflected in the
General Fund fiscal forecast, which assumes current levels of allocations to CIP with
slight increases assumed for maintenance needs. More detail can be found in the Fiscal
Forecast analyses detailed in Attachments A for the General Fund and Attachment B for
Packet Pg 221
16
Enterprise Funds.
4. Impacts of Diablo Canyon Uncertain
The closure of Diablo Canyon presents an uncertain future for the San Luis Obispo
County region. Diablo Canyon is a major employer in the region providing quality, high-
paying jobs. Almost a year ago, Pacific Gas & Electric Company reached an agreement
with the Coalition of the Cities including the City of San Luis Obispo, which would
return significant funding to the region and the City to mitigate the impacts of
decommissioning the plant. However, earlier this month, an administrative law judge
recommended a proposed decision that would negate this settlement agreement.
While the proposed decision is under review, the City continues to work toward an
alternative decision and assessing strategies for economic re-alignment to mitigate the
impacts of Diablo Canyon Plant closure. If a favorable decision is not reached, actions
could include a request for state legislation and more specific economic and financial
impact analyses of Diablo Canyon’s closure. Lastly, the Coalition of Cities and the
County have been discussing how to leverage SB 968, a bill which requires the CPUC
analyze the economic impacts of the Diablo Canyon’s closure. The parties are
regrouping in light of the proposed decision and while the effort and intent continues to
push the CPUC to approve funding through the Joint Proposal, if this effort is fruitless,
the parties may proceed with a separate economic and fiscal analysis. Should an
independent self-funded effort be required, Staff will return to the Coalition of Cities and
the City Council for approval.
FISCAL HEALTH RESPONSE PLAN
FHRP: Foundational Steps in Education and Outreach
In developing recommendations about the components of the FHRP staff followed several steps.
First, the size of the problem was established. Second, staff provided education and outreach
about the problem through community and employee workshops and presentations to various
community partners. During these sessions staff were able to educate and inform the community
and employees while receiving feedback. As informed by adopted Fiscal Polices (discussed
above), a collaborative effort of all City departments and funds resulted in a multitude of options
to achieve the objective of closing an $8.4 million ongoing budget gap. Options were carefully
considered using the following criteria:
1. City policy and goal alignment.
2. Increased operational efficiencies.
3. Minimizing service level impacts to the community.
4. Can the action be fully implemented within three years?
5. Are there factors outside the City control that make the proposed action particularly
risky?
Packet Pg 222
16
The FHRP to be adopted in April 2018 will achieve a structurally balanced budget and continued
long-term fiscal sustainability through a balanced, multi-faceted approach. The predominate
ones are:
1. New Revenues
2. Operating Reductions and New Ways of Doing Business
3. Employee Concessions
In conducting the analysis of how the three components could be allocated in the FHRP various
scenarios were explored by staff. The “extremes” of allocating the total cost of $8.9 M to one
single solution were analyzed and rejected as infeasible, impossible to achieve and/or too
impactful to community service levels. Ultimately, staff is recommending a balanced approach is
right for San Luis Obispo but examining the extreme scenario is important context.
Upon receiving preliminary direction from Council regarding the approach and how to balance
the proposed solutions, staff will work on developing the detailed FHRP. It is important to note
that as this detailed plan is developed, staff will take into account the many legal requirements
that must be navigated in implementing changes in the public sector. This may include
regulatory requirements, ballot initiatives or further approval from the community, as well as the
City’s obligation to meet and confer in good faith with its represented employee groups
regarding changes to wages, hours, and/or working conditions.
FHRP: Extreme Allocation Analysis Not Recommended
1. Operational Reductions and Efficiencies too Impactful at Sole Solution
Even with operating reductions phased-in over the three-year period and increased efficiencies
considered, service level impacts of achieving $8.9 million through this approach are severe.
Under this scenario, service level impacts would include significant reductions in ongoing
maintenance and capital project delivery; significant reductions in strategic initiatives for
economic and community development; reduction in information technology efforts resulting in
reduced transparency and decreased efficiency; significant reductions to community events,
recreational activities, and public safety; and elimination of multiple community partnerships and
support to a wide variety of organizations; Internal service functions would also be impacted
which could expose the City to higher risk factors over legal, human resources and financial
issues. Approximately 68 full-time equivalent positions would be eliminated and significant
reductions to services currently provided through contract services.
The chart below shows the number of full-time equivalent positions that represent $8.9 million in
operating reductions by function (not by department). This is an illustration only and represents
a scenario where all departments have analyzed the impact to operations based on the same
relative percent share to achieve the total goal.
Packet Pg 223
16
2. Revenues too Impactful as Sole Solution
Similarly to solving the problem solely through operational reductions, attempting to solve it
solely by increasing revenue was determined to be impractical and overly impactful on the
community. Again, understanding what this extreme solution might look like provides context
for the more balanced decision-making proposed.
In California, State law requires voter approval for municipalities to raise revenue through
taxation. General taxes require a simple majority and special taxes require a super-majority. The
laws also limits municipalities’ powers to recoup expenditures through charges for services or
development impact fees to the actual cost of activity.
Closing the budget gap by pursuing new revenue only is risky due to the limited powers.
The following revenue sources were analyzed: 1) cannabis business taxation; 2) parcel tax to
cover Stormwater program cots; 3) sales tax; and 4) transient occupancy tax. Attachment D is a
detailed analysis of these revenue sources and how taxation works at the local level.
3. Concessions too Impactful as Sole Solution
Aligned with the City’s Fiscal Sustainability and Responsibility Philosophy and Labor Relations
Objectives adopted by the Council, staff analyzed employee concessions as part of the tenant of
shared responsibility between the City and its employees to share the burden of health and
retirement benefit costs. Similar to considering solving the problem only through expenditure
reductions or increased revenues, reducing employee compensation as the sole solution has
significant service level impacts as it would be very difficult to achieve and would result in
increased turnover and extraordinary recruitment challenges, all of which may prove more costly
in the long term. To put this in perspective, to achieve an $8.9 million reduction, each employee
would be faced with an eighteen percent (18%) reduction in employee compensation (salary and
Reduction of 68 FTE too Impactful to Service Levels
Packet Pg 224
16
benefits). This reduction would significantly reduce the City’s ability to attract and retain
employees consistent with its compensation philosophy (Attachment E). Further, such
concessions would require challenging negotiations with the City’s represented employee groups
that would likely take months or even years to resolve.
FHRP: A Balanced Allocation of Components is Proposed
FHRP Components: General Fund
Through careful analysis staff identified a solution in alignment with Council adopted fiscal
policies. The solution emphasizes: 1) new ways of doing business with minimal service level
impacts, 2) actions to implement immediate savings by implementing policies and actions
enhancing prudent spending, 3) revenue options that are aligned with Council goals, 4) employee
concessions recognizing the adopted shared responsibility philosophy and increased CalPERS
costs, and 5) other operating expenditure reductions which will be developed in detail between
December and April with focus on minimized impacts to the service levels provided and
discussions with the community.
The recommended components allocation to close $7.5 million budget gap for the General Fund
are presented in ranges for Council general direction. The following ranges are proposed:
New Revenue 30% to 40%
Operating Reductions and New Ways of Doing Business 30% to 40%
Employee Concessions 20% to 30%
The solutions for the Enterprise Funds will be varied and appropriate to each fund but will
include employee concessions.
Packet Pg 225
16
1. FHRP Operating Reductions and New Ways of Doing Business 30% to 40%
Operating reductions and new ways of doing business including operational efficiencies are
estimated to reach approximately $3 million dollars over the three-year period with a reduction
of approximately $1 million anticipated in fiscal year 2018-19.
Staff will further analyze the following operational efficiencies and bring a detailed plan back to
Council in April 2018:
a. 2% Operating Program Savings
The City’s financial plans rely on a 2% savings in operating programs each fiscal year.
Historically, through prudent expenditure management, the City has been able to realize
greater savings. Staff will continue to analyze expenditure savings, particularly in areas
of commodity costs such as gas and electricity.
b. Increased Investment in Sustainable Infrastructure
Aligned with the Climate Action Major City Goal, staff will also pursue sustainability
efforts and will consider investment in infrastructure which is expected to result in
ongoing savings.
30% - 40%
Packet Pg 226
16
1. Reorganizations
Staff will analyze re-organization opportunities and ways of doing business
differently.
2. Proactive Fiscal Management
Staff will engage in proactive management and recoupment of costs through
collection efforts, debt management, and investment management.
2. FHRP Employee Concessions 20% - 30%
Given the increased CalPERS costs aimed at addressing the unfunded pension liability along
with the Fiscal Sustainability Philosophy and Labor Relations Objectives adopted by council,
employee compensation reductions need to account for a portion of the solution. In determining
the appropriate “size” for this portion of the solution staff considered the viability and service
impacts of operating reductions, new ways of doing business, and new revenues, and estimated
compensation reductions that were less likely to exacerbate service level impacts by driving
turnover and/or prohibiting recruitment. The recommendation assumes that approximately $1.7
million dollars will be achieved through employee concessions or 23% of the total target. The
City recognizes its obligation to meet and confer in good faith with its represented employee
groups regarding the impacts of changes to wages, hours, and/or working conditions and is
committed to working in good faith with it labor groups in the event compensation modifications
are determined necessary.
3. FHRP Revenue Options 30% to 40%
The City major operating funds are the General Fund primarily funded by taxes and fees for
services and Enterprise funds (Water, Sewer, and Parking) that fund their own operations and
capital investment programs through rates. The Transit Fund is another Enterprise fund;
however, transit is primarily funded through Federal and State funding with a 20-percent match
from fares.
In California, State law requires voter approval for municipalities to raise revenue through
taxation. General taxes require a simple majority and special taxes require a super-majority. The
laws also limit municipalities’ powers to recoup expenditures through charges for services or
development impact fees to the actual cost of activity.
There are multiple revenue options that the City could pursue. As discussed in more detail in
Attachment D – there are pros and cons to each which range from uncertainty to the time in
which it will take to implement taxes and attendant revenues. As there are multiple options
Council direction on preferred resource is sought.
The chart below depicts the availability of new revenue compared with dollar amount of revenue
that is potentially available. In general the chart illustrates that larger amounts of new revenue
are less available and will take a longer period of time to realize. In the left top corner are
revenue options available to the City Council, which consist of elimination of current subsidies
for services or City owned property subsidized rentals. Elimination of subsidies could raise over
$200 thousand annually. In the middle spectrum is Economic Development that boosts the City’s
ability to maintain and raise major revenues such as Sales Tax, Property Tax and Transient
Packet Pg 227
16
Occupancy Tax; however, even though economic development is imperative to the region and
positively impacts revenue generated, the City has less direct control over the revenue growth
which is also highly impacted by larger regional, State and National facto rs. On the bottom left
are the taxation revenue options discussed in this report, which can contribute to significant and
attainable dollars generated but which require voter approval.
Availability$ Amount
Ongoing Revenue Options
Eliminate policies
subsidizing services
provided
1.Excise Tax on Cannabis
2.Sales Tax
3.Transient Occupancy Tax
4. Parcel tax for Stormwater
Economic
Development
Revenue Menu
Staff analyzed various revenue enhancement options and the recommendation is based on the
City’s fiscal policies and Council direction.
1. Cannabis Taxation - $500,000 Growing to $3 million Annually1
Following the State election and voter approval of Proposition 64, the Council held a
1 The estimate is based on preliminary research. The forecast will be further refined as information becomes
available regarding restrictions and allowed cannabis activities in the city limits. The estimate reflects an assumption
in fiscal year 2018-19 that development agreements would be pursued with vendors prior to placing a ballot measure
to the voters. It is estimated that the revenue will increase over time as the business activities mature and will reach
up to $3 million by fiscal year 2020-21.
Packet Pg 228
16
study session regarding the City’s prohibition of cannabis activities within the city limits.
Staff was directed to:
• Monitor developments in other jurisdictions
• Monitor development at the Federal level
• Engage the community regarding various land use and taxation alternatives that
may be appropriate; and
• Return to the City Council recommendations
A significant amount of public outreach has already occurred, and staff continues to
monitor developments in other jurisdictions and at the State and Federal level. The City is
maintaining a website to inform the public about progress on this issue, and has
developed a presentation outlining some of the regulatory options available to the City.
The revenue estimates included in this report are based on high level assumptions about
local regulations and future business activity. Staff plans to check in with the City
Council prior to April 2018 so that assumptions or recommendations included in the
FHRP are in line with Council direction regarding local cannabis regulations.
It is presumed, that if Council changes regulations regarding cannabis activities within
the city limits, direct costs of regulation of such activities will be reimbursed through fees
and permitting costs levied against cannabis businesses. Indirect costs associated with
potential increased health and safety issues are difficult to estimate and staff will continue
to study other’s state experiences as well as monitor regional activities. Statewide grant
funding raised from State taxes are intended to help fund the indirect service impacts of
cannabis.
Staff has performed preliminary analysis of cannabis taxation which is estimated to be a
net revenue generating activity. A more detailed analysis is included in Attachment C to
this report. The recommendation is based on broad ranges of possible allowable activities
and the amount of revenue that could be generated.
Based on preliminary estimates, if the City allows cannabis cultivation and distribution in
fiscal year 2018-19, the City could realize up to $500,000 that year, incrementally
increasing to up to $3 million. The estimates are preliminary and based on all of the uses
allowed by the State regulations. The actual revenues collected would depend greatly on
the range and scale of activities allowed in the City. Preliminary feedback from the public
outreach process indicates that retail sales, cultivation and manufacturing uses should be
allowed, but with limits. As a result, staff plans to check in with the City Council prior to
April 2018 so that the revenue estimates included in the FHRP are tailored to the
Council’s direction regarding regulations.
Under California law, the excise tax on cannabis would require a majority vote approval
and could be put forth to vote with the next general election in Novemb er 2018. It is
important to note that over 67% of City voters supported Proposition 64 in November
2016.
Packet Pg 229
16
It is important to also highlight that uncertainty of this revenue source is high and
reliance on this revenue source is associated with high level of risk. Staff will continue to
develop recommendations to present to the Council with the FHRP in April 2018.
2. Storm Water Parcel Tax $1.5 million
SB 231 was signed into law this past year and is part of an overall strategy to better
manage water supplies as California’s water continues to be strained by climate change,
continuing cycles of drought and a steadily growing population.
In recent years, as California suffered through a punishing five-year drought, awareness
has grown about the importance of recycling and reusing water and the damage done by
polluted water runoff. SB 231 adds a missing definition of “sewer service” to state law to
include storm water, which was long considered to be part of that definition until a court
decision cast doubt on that interpretation 15 years ago. The measure allows local
governments to finance and build projects that capture and clean storm water.
Staff recommends pursuing a property-related fee to fund the storm water program.
Based on a similar cost structure to Palo Alto, preliminary revenue estimates are
approximately $1.5 million per year. It is recommended that these two options are further
developed and presented as part of the Fiscal Health Response Plan; however, the
likelihood of voter approval is currently untested. See Attachment D for further
discussion.
If the proposed property-related fee is approved by the voters, the timing of this action is
likely to fall within 2019-20 fiscal year with the first revenue collection realized in fiscal
year 2020-21.
Enterprise Funds
All four Enterprise Funds completed a 10-Year Fiscal Forecast similar to the General Fund. The
details of that Forecast are noted in Attachment B. Below is a summary of the assumptions and
findings of that 10-year review.
1. Each fund has unique challenges in addition to the CalPERS issue. For example, the
long-term capital needs in Water and Sewer are a much larger issue for those Utilities
than the CalPERS issue.
2. It is assumed that any concession target directed by Council would apply to the
employees in the Enterprise Funds.
3. It is assumed that the Enterprise funds will not meet any CalPERS related shortfall
through future rate or fee increases, beyond those already approved by Council.
4. Outside of the concession decision, Council direction is not needed at this point, for the
Enterprise Funds. Each Fund manager and the Finance Department will return to Council
with recommendations on how the funds will address any CalPERS and other financial
issues in April 2018 and will be incorporated into the Fiscal Health Response Plan.
Packet Pg 230
16
ESTABLISHMENT OF A TRUST
Addressing Unfunded Liabilities: Establish Section 115 Pension Trust Fund
Like many cities in California, the City’s unfunded pension liability is the driving factor for
rapidly rising required pension contributions to CalPERS. Due to CalPERS policy changes and
stabilization strategies to pay down the unfunded liabilities and secure assets, required
contributions to CalPERS are rapidly rising. As of June 30, 2016, valuation prepared by
CalPERS, the City’s outstanding unfunded pension liability is $148 million. This amount is
anticipated to show approximately $165 million in total pension unfunded liability for the City
once the full impact of rate of return reduction from 7 percent to 7.5 percent is reflected in
actuary reports in June 20, 2018.
The fiscal forecasts presented, are based on a strategy to address ongoing budget gap within three
years and set funds aside to address unfunded liabilities and mitigate future rising costs. Th e
financial forecasts are based on preliminary 2016-17 fiscal year-end results including one-time
funds above policy reserve. In December 2017 the audited Comprehensive Annual Financial
Report (CAFR) will be recorded and presented to Council in January 2018. The final findings
and fund balances will then be presented to Council in February 2018 with the Mid-Year Report
which will also update the Council with the latest trends in revenue and expenditures through the
first six months of the current fiscal year 2017-18. With the Mid-Year Report, recommendations
regarding the use of one-time funds above policy required reserves will be presented to Council
and included in the FHRP presented in April 2018.
There are two main strategies that can be considered by the City to address paying down
unfunded liabilities and re-directing funds toward the pay-down to achieve long-term savings by
investing early.
1. Accelerated payments to CalPERS using one-time funds.
2. Establishing and funding a Section 115 Pension Trust allowable by the
Internal Revenue Code for the purpose of paying pension costs.
Pros and Cons:
Accelerated payments directly to CalPERS:
Re-directing funds directly to CalPERS increases the City assets set aside for pensions within
CalPERS managed plans and will be immediately reflected in the following actuary valuations.
The pre-payments above required contributions would result in increased savings or interest rate
earnings and decreased unfunded liabilities recorded both in the valuations and the City’s
financial statements. Depending on which plan the pre-payments would be applied to, either
greater overall savings and decreased unfunded liability would be achieved or greater savings in
required pension contributions.
CalPERS policy guides amortization schedules for asset gains and losses as well as for any
adjustments to assumptions. Applying payments to plans with changes that are amortized over a
Packet Pg 231
16
shorter period of time would yield more significant impacts to lower required contributions from
the City but would lower overall savings in the long-term impacting unfunded liability. Vice
versa, applying pre-payments to plans with longer amortization schedules, would yield greater
overall savings and lower unfunded liability but will be less impactful in lowering required
contributions. The savings calculations would be based on 7 percent interest rate according to
CalPERS current long-term earnings expectation. The reason this analysis is important is
because required contributions affect the City’s liquidity and cash-flow. CalPERS requires the
City to make required contributions based on CalPERS assumptions and actuarial analysis,
which directly impacts the City’s budget.
Establishment of a Pension Trust:
The Internal Revenue Service allows municipalities to establish pension trusts for the purpose of
paying pensions according to section 115 of the Internal Revenue Code. The trust has to be
established by an authorized agent. Two main providers have been active in establishing trusts:
Public Financial Management (PFM) and Public Agency Retirement Services (PARS). PFM
provides a more customized approach to investments; whereas, PARS provides established plans
the City can join. Other jurisdictions such as Paso Robles have formed section 115 pension
trusts.
Staff preliminary analysis estimates a net interest earnings rate of 5 percent by placing funds in a
trust. The benefit of setting funds in a trust is flexibility for the City to utilize the funds from the
trust to make required contributions to CalPERS in the future. The expected interest rate is based
on the provider’s past experience over approximately 10 years. The expected rate of return of 7
percent by CalPERS is a long-term interest rate expectation. The actual rate of return earned in
the future will largely depend on the market conditions for both CalPERS and Pension Trust
funds management provider. Also, higher risk investment strategies yield higher returns but also
expose assets. The loss of assets during the Great Recession is the most significant driver for the
existing unfunded liabilities.
Good performance by the market and prudent management of funds, should yield similar
investment return by both CalPERS and section 115 trust providers. Currently, under GASB
rules, the City’s investments in section 115 trust, would not be reflected on financial statements
as a reduction of unfunded liabilities but would be reflected as assets held by the City. Section
115 trust provides enhanced control of investments by the City working closely with t he trust
provider. It also provides enhanced liquidity by drawing funds from the trust to make payments
to CalPERS in future years as pension costs continue to rise through approximately fiscal year
2030-31.
The recommendations to reduce ongoing expenditures or raise revenues in the amount of $8.9
million dollars assumes redirection of payments toward early pre-payments of unfunded
liabilities to reduce future contributions to pensions, resulting in long-term savings.
Staff recommends that the city form a 115 Pension Trust to maximize the City’s liquidity and
ability to meet its pension obligations in the long-run. Staff will return to Council with detailed
recommendations and actions to utilize one-time funds to address pension costs and capital needs
and recommendations in April 2018 with the Budget Strategic Direction as part of the Fiscal
Packet Pg 232
16
Health Response Plan. In the interim, staff will return with all actions necessary to establish a
115 Pension Trust.
Unaudited Reserves Above Policy Requirement
The CAFR is scheduled for presentation to the City Council on January 16, 2018. The citywide
financial statements will present audited results for the City as of the end of fiscal year 2016 -17.
The City’s auditors are currently wrapping up their analysis with the CAFR scheduled for release
to the City Council and public by December 31, 2017.
The City’s fiscal and budget policies set requirements for major funds to maintain operating
reserves at certain thresholds. The policies also guide the use of one-time dollars above policy
reserves to be applied to 1) paying down unfunded liabilities, and, 2) fund infrastructure.
Analysis and recommendations for the use of one-time fund available above policy reserves will
be presented with the Mid-Year Report in February 2018 and will be incorporated into the Fiscal
Health Response Plan in April 2018.
TEN-YEAR CAPITAL IMPROVEMENT PLAN
This brief presentation of the General Fund Ten-Year Capital Improvement Plan (CIP) is merely
an introduction to a more detailed discussion for Council at the January 16th, 2018 meeting. The
CIP is different from the Operating Program in that Capital projects both cost over $25,000 and
result in the construction, acquisition or maintenance of a physical city asset. One key point is
that each Enterprise Fund has developed a Ten-Year CIP as described above. They will be
addressing their needs and potential solutions in their respective Ten Year Financial Forecast.
In the past Council has viewed the CIP in two formats as noted below.
Financial Plan includes a two-year CIP, and a five-year forecast. Projects included in the
Financial Plan are all fully funded by either General fund, Measure G, Impact Fees, grants or
other sources.
Long-Range CIP. All anticipated projects over approximately the 20-year horizon are included
in this list. Every anticipated project, even those for which funds are not identified, are
included in this list. In addition, the Long-Range CIP does not note the anticipated year of
construction.
The 10-Year CIP enables the Council to see at a glance all the projects identified in various
planning documents approved over the last several years. The features of this 10- Year CIP are
as follows:
1) Planning documents were reviewed, and all projects were included which could potentially
be completed in the Ten -Year horizon. Those documents included:
a) Land Use and Circulation Element,
b) Area Specific Plans such as Orcutt, Margarita, etc.,
c) Bicycle Transportation Plan,
Packet Pg 233
16
d) Mission Plaza Concept Plan,
e) Downtown Concept Plan,
f) Anticipated projects from the Parks and Recreation Element and Facilities Master Plan,
g) Wastewater and Water Master Plans,
h) Long-term Parking and Transit needs.
2) Projects were placed in their anticipated year of implementation within the 10-Year
horizon.
3) Projects were classified in the following Categories:
a) Annual Maintenance (projects which are included in every Financial Plan to maintain
existing city assets such as street paving, storm drain replacement, sidewalk repair, parks
major maintenance);
b) Rehabilitation and Replacement (projects which replace or rehabilitate a city asset, such
as the Marsh Street Bridge replacement);
c) New Project (project which is an addition to the city inventory, the Santa Rosa Skate Park
for example).
The chart below outlines the costs of the preliminary 19-Year CIP. The primary purpose of the
chart is to demonstrate the extent to which the City can afford Annual Maintenance,
Rehabilitation or Replacement and New Projects.
Staff will return with the following actions to address the CIP needs:
1. December-January. Staff will further refine the project list to reflect what reasonably can
Packet Pg 234
16
be constructed in the Ten-Year time frame
2. January 16, Council review the refined list and provide direction on potential funding
sources for projects which are outside existing city funding capacity
3. Within the Ten-Year CIP are several security related projects which have risen in priority
as a result of the increase in deliberate and accidental threats to public gatherings. Since the
City is host of ongoing public events such as Farmers Market, staff has identified Security
projects which could be implemented if funds were available. Staff is recommending $1.2
million be set aside in anticipation of a specific Security CIP to be presented to Council
during Mid-Year budget discussions in February 2018.
COMMUNITY AND STAFF OUTREACH
The City is committed to involving the community and staff in discussions about potential
solutions to the financial challenges ahead. A number of outreach and engagement efforts have
already been completed and will continue throughout the process. Outreach to date has included:
a. Fiscal Health webpage
b. E-notification category to sign up to receive updates
c. Community Information Session
d. Staff Information Sessions
e. Several press releases, news items and social media posts resulting in media
coverage
f. Open City Hall topic
g. Staff surveys
h. Frequently Asked Questions by topic
i. Regular email updates to staff
All feedback received through the information sessions and Open City Hall is compiled in
Attachment F.
NEXT STEPS
Based on Council direction, staff will further refine recommendations through community
engagement and Council input. In January through March, staff will continue community
engagement and return to Council for additional direction if necessary. Staff will also return to
Council with a detailed review of the ten-year CIP needs assessment. Both operating and capital
needs will be further analyzed based on the input and staff will return to Council with Strategic
Budget Direction in April 2018 with the detailed FHRP to be implemented over the next three
fiscal years, 2018-19 through 2020-21. The 2018-19 Supplemental Budget will implement the
first year of the FHRP.
Packet Pg 235
16
CONCURRENCES
Leading to this recommendation staff held a community and employee workshops to educate and
receive feedback. Public and employees also had access to the City website to submit comments
and suggestions. The recommendations were developed through a collaborative citywide process
and the City leadership team concurs with the recommendations.
ENVIRONMENTAL REVIEW
Not applicable.
FISCAL IMPACT
In accordance with the City fiscal policies and Fiscal Sustainability and Responsibility Major
City Goal, development of Fiscal Health Response Plan is essential to achieve long-term
structurally balanced fiscal outlook. Due to significant changes in pension costs, staff identified
and informed the Council of the need to take action in January 2017. In accordance with general
direction from Council to reduce expenditures and/or increase revenue, staff will continue to
develop the FHRP to achieve a structurally balanced budget.
ALTERNATIVES
Council may provide staff with alternative direction and direct staff to:
1. Pursue greater or lower level of operating reductions,
2. Pursue alternative revenue sources,
3. Pursue greater or lower level of employee concessions.
Further, Council may direct staff to not pursue establishment of a Section 115 Pension Trust.
Council could also direct staff to return during January through March with further analysis
leading to finalization of the FHRP in April 2018.
Packet Pg 236
16
Attachments:
a - General Fund Fiscal Forecast
b - Enterprise Funds Fiscal Forecasts
c - Budget and Fiscal Policies
d - Revenue Options
e - Compensation Philosophy Resolution No 10248
f - Info Session and Open City Hall Comments
Packet Pg 237
16
1
ATTACHMENT A: GENERAL FUND FISCAL FORECAST
General Fund
The General Fund ten-year forecast assumptions are based on continuous slow economic growth.
The General Fund’s largest sources of revenue are sales tax, representing approximately 35% of
total revenues including approximately $7.5 million derived from Local Revenue Measure half
cent sales tax; property tax representing approximately 15%, followed by transient occupancy tax
representing approximately 10%.
The forecast assumptions presume slow growth ranging from 2% to 1% growth in sales tax. The
projection is based on detailed analysis by HdL and is a conservative estimate given high volatility
of this revenue source with economic fluctuations. Even though sales tax trends continue to be
positive for the City, increasing transfer of activity to internet sales that are not subject to sales tax
have been putting pressure on sales tax derived from general consumer goods and this trend is
being closely monitored.
Property tax assumptions include 6% to 5% growth due to three major hotel developments in the
City of San Luis Obispo that will add value to the City’s property tax roll and are also expected to
positively impact the sales tax and transient occupancy tax revenue sources. Property tax growth
is more conservatively estimated at 3% in the outer years due to uncertainties described earlier in
this report.
Transient occupancy tax growth rates over the long-run are estimated conservatively at
approximately 2% based on the most recent history in this revenue source. The City will closely
monitor transient occupancy trends as new hotels begin to enter the market, and will continue to
proactively work on tourism enhancement through the City’s economic development program.
Expenditure assumptions for the base line forecast, or “status quo scenario” that does not include
recommendations to eliminate the structural budget gap, are based on a Federal Reserve Bank
target inflation of 2% on annual basis applied to all operating expenditures for the General Fund.
The General Fund forecast also assumes continued commitment to Capital Improvement Program
and the continuation of the Local Revenue Measure beyond its sunset date of 2022. The Capital
Improvement Program assumed allocation increases slightly over time to maintain the
commitment of 70% of Local Revenue Measure funds allocated directly to Capital Improvement
Program and 30% to operating expenditures.
Labor cost assumptions for all fund forecasts are based on total compensation growth aligned with
inflation and actuary analysis of pension costs including paying down unfunded liabilities as
required by the City’s contract with CalPERS. CalPERS projections in the outer years beyond
CalPERS valuation reports have been updated based on Bartell & Associates actuary analysis.
The graph below depicts the ten-year forecast if the City “does nothing”, which means the City
would continue to operate at current expenditure and revenue levels and provide the same level of
services. The blue line represents total revenues and the red line represents total expenditures over-
Packet Pg 238
16
2
ATTACHMENT A: GENERAL FUND FISCAL FORECAST
time. The yellow line shows cumulative fund balance above or below policy reserve. As shown,
if the City does not address the projected budget gap on an ongoing basis, within ten years, the
City would accumulate a deficit in the General Fund exceeding $90 million. Expenditures are
expected to outpace revenue starting in fiscal year 2018-19 by approximately $700,000 and
exceeding $3 million by fiscal year 2020-21 or the third year of Fiscal Health Response Plan. The
recommendations are based on the premise of reductions or new revenues in the first three years
to reach $7.5 annually diverting the expenditures to paying down unfunded liabilities.
The next graph below, shows the General Fund forecast including closing the budget gap in the
amount of $7.5 by fiscal year 2020-21. The recommendation is detailed later in this report in the
Recommendation section and include both reductions in expenditures and increases in revenue.
The proposed strategy assumes increased payments toward unfunded liabilities in the first five
years. Closing the budget gap early and setting funds aside in a pension trust will increase the
City’s return on investment and enable the City to smooth out the impacts of continuously
increasing required contributions to pay down unfunded liabilities by CalPERS through
approximately fiscal year 2031-32. Aligned with Council adopted fiscal policies, the
recommendation also includes assumptions that one-time available funds will be directed toward
paying down unfunded liabilities and infrastructure.
Based on current assumptions, it is estimated that the General Fund will pay into the pension trust
approximately $15 million over a five-year timeframe and will use these funds in later years to
pay required contributions to CalPERS.
Packet Pg 239
16
3
ATTACHMENT A: GENERAL FUND FISCAL FORECAST
The General Fund Forecast assumptions are based on the current levels of investment toward the
Capital Improvement Program with a slight increase over time to maintain the Local Revenue
Measure commitment to invest approximately 70% of this revenue toward capital. A ten -year
Capital Improvement Program analysis has been prepared along with the financial forecasts and
staff will return to Council in January to present the Capital Improvement Program needs for the
General Fund and seek general direction for timing of deliverables and funding sources.
Packet Pg 240
16
1
ATTACHMENT B: ENTERPRISE FUNDS FISCAL FORECASTS
Water Fund
Background
The five-year forecast presented with the 2017-19 Financial Plan shows the Water fund in a
positive working capital position by year five. All assumptions as known at that time for unfunded
liabilities were accounted for and the capital plan began to address the need for infrastructure
renewal. However, the 10-year forecast paints a picture showcasing the impact that the capital
spending has on the current fund reserves and working capital as needed investments begin to
outpace the revenue assumptions. If not addressed, the fund would enter a negative fund position
in 2022-23 and continue the downward trend throughout the 10-year period.
*unreserved WC = Working Capital minus reserves
Capital Improvement Plan
Based on the approved master plans, staff developed three elements to the capital improvement
investment. The first scenario reflects the need of the system over the 10-year period (Need). The
next scenario looks at a level of investment that staff includes in the financials in the same time
period (Afforded at current rates), and the third element provides a picture of what can be
realistically constructed on an annual basis (Deliverable).
Packet Pg 241
16
2
ATTACHMENT B: ENTERPRISE FUNDS FISCAL FORECASTS
Fiscal Health Response
Staff applied fiscal health response reduction as proposed by the General Fund. The same
assumptions were applied to improve the fiscal standing of the fund. However, it became apparent
that the magnitude of the needed investment for capital infrastructure overrode the applied
reductions. Staff therefore analyzed new revenue opportunities including an aggressive water
meter replacement program and examination of its water portfolio for opportunities to sell excess
water for certain periods under certain conditions. Staff believes that $1 million in new revenue
commencing 2019-20 would keep the fund healthy into the future and afford the needed
investment in the fund’s infrastructure.
Staff was aware that the outer years will jeopardize the fund’s health at current revenues and
therefore requested Council approval for a rate study in 2017. Applicable rate increases were
therefore approved for 2017-18 only and the study results are scheduled to come before the City
Council in January 2018.
Packet Pg 242
16
3
ATTACHMENT B: ENTERPRISE FUNDS FISCAL FORECASTS
*unreserved WC = Working Capital minus reserves
Sewer Fund
Background
The Sewer Fund’s five-year forecast presented with the 2017-19 Financial Plan showed a healthy
working capital as the fund prepared for the Water Resource Recovery Facility (WRRF) Project
to begin in 2018-19. It included all assumptions for unfunded liabilities and the capital plan began
to address the need of the wastewater collection system. However, the 10-year forecast includes
needed investments in the collection systems beginning 2023-24 that are outpacing the current
revenue assumptions through 2027-28. If not addressed, the fund would enter a negative fund
position in 2024-25 that accelerates beyond the 10-year period.
Packet Pg 243
16
4
ATTACHMENT B: ENTERPRISE FUNDS FISCAL FORECASTS
*unreserved WC = Working Capital minus reserves
Capital Improvement Plan
As in the Water Fund, staff developed three elements to the capital improvement investment based
on the adopted master plan for wastewater collection. The first scenario reflects the need of the
system over the 10-year period (Need). The next scenario looks at what staff currently assumes in
investment over the same time (Afforded current rates), and the third element provides a picture
of what can be realistically constructed on an annual basis (Deliverable).
Packet Pg 244
16
5
ATTACHMENT B: ENTERPRISE FUNDS FISCAL FORECASTS
Fiscal Health Response
The Sewer Fund included the reduction as proposed by the General Fund. The same assumptions
were applied to improve the fiscal standing of the fund. However, the needed investment for capital
infrastructure still outpaces the available funding. Staff therefore analyzed the capital plan and
especially the WRRF project. At 60% design, the project now allows for a revisiting of the required
funding. Staff feels comfortable that the cost estimate can be reduced to $130 million. The resulting
fund picture is illustrated below.
As in the Water Fund, staff was aware that future action would be required to keep the fund healthy
and the current rate structure study includes the Sewer Fund with conclusion in early 2018.
Packet Pg 245
16
6
ATTACHMENT B: ENTERPRISE FUNDS FISCAL FORECASTS
*unreserved WC = Working Capital minus reserves
Packet Pg 246
16
7
ATTACHMENT B: ENTERPRISE FUNDS FISCAL FORECASTS
Parking Fund
Background
The Parking Fund’s five-year forecast presented with the 2017-19 Financial Plan showed a healthy
working capital as the fund prepared for the Palm/Nipomo Parking Garage Project to begin in
2019-20. It included assumptions for unfunded liabilities and the capital plan began to address the
need of the three-existing parking garage infrastructure maintenance needs. Parking rate increases,
designed to incrementally increase over a three-year period, were adopted in August 2017.
Fiscal Health Response
The projected impact of the unfunded liability account on the Parking Services annual budget is
$175,000 and a one-time contribution to the stabilization fund in the amount of $328,381. After
consideration of available options for the Parking Fund to address the increased cost the most
direct fiscal approach for the fund is through operating expense reductions in non-revenue
generating categories. The Council approved multi-year rate and fine increases (2018 thru 2020)
which are included in the base projections. Staffing reductions, particularly in part time employees
will result in an even greater reduction in revenue due to less parking enforcement coverage on
weekends and less booth attendant hours to staff the structure. Each of these services are offset by
collected revenue by the employees themselves. A reduction in staffing thus results in a reduction
in revenue greater than the savings and thus increases the problem. Instead, the Fund will address
the shortfall by reductions in the operating line items for contract services.
As an option, the Parking Fund is in a unique position where it could fund the payoff of the entire
unfunded liability for this enterprise fund (approximately $2.5M) and still meet the annual working
$10,116,569
$11,423,950
$5,165,650
$5,508,430
$5,790,830
$6,054,330
$6,041,070
$5,728,430
$5,257,570
$4,670,230
$3,971,010
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
Parking Fund -
If we do nothing
Revenue Expenditures Unreserved Working Capital
Packet Pg 247
16
8
ATTACHMENT B: ENTERPRISE FUNDS FISCAL FORECASTS
capital reserves as well as the projected CIP projects. This might assist the General Fund in
allowing some additional short-term possibilities in paying more towards the UAL. The annual
savings (UAL payments) for the Fund would recoup the entire payoff in approximately 10
years. This could potentially benefit both the Parking Fund and the City’s obligation. City staff
is currently reviewing that option to determine if it is a viable way to proceed. Staff will return to
Council with specific recommendations regarding this approach.
Transit Fund
Background
The Transit Enterprise Fund is anticipated to be negatively impacted by the CalPERS unfunded
liability issue an average of $61,177 each year for the next ten years, totaling $672,949. For fiscal
year 2016-17 Transit was a $3.7 million-dollar operation. It is anticipated to grow to $4.3 million
dollars by the end of the ten-year forecast period. The CalPERS impact represents 1.6% to 1.8%
of the yearly Transit Enterprise operating budget. The Unfunded Liability can be absorbed into
Transit’s yearly operational costs with nominal impacts on the overall program primarily due to
use of fuel and purchased transportation reductions. These costs, however, are in the context of
increasingly limited regional funds along with growing service costs amongst the region’s transit
operators. The unfunded liability issue could have impacts to the Capital Improvement Plans (CIP)
$10,116,569
$11,489,489
$5,297,149
$5,711,109
$6,189,789
$6,652,589
$6,842,149
$6,736,049
$6,475,529
$6,102,549
$5,621,649
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
Parking Fund
If we do something
Revenue Expenditures Unreserved Working Capital
Packet Pg 248
16
9
ATTACHMENT B: ENTERPRISE FUNDS FISCAL FORECASTS
including vehicle replacement needs. These are largely unfunded in the 10-year forecast and are
typically funded by Federal grants that may be limited in the future. Local matches necessary for
federal grants could be impacted by this issue. If Federal funds are not forthcoming, additional
operating costs for maintenance may be necessary or substantial rehabilitation will be needed.
Fiscal Health Response
As a matter of fiscal practice, the Transit Enterprise Fund is budgeted with maximum possible
expenditures and yet very conservative revenues. Local and State revenues sources tend to be
cyclical, with ups and downs, but on average 1% revenue growth is assumed each year.
Meanwhile, and based on existing service contract(s), expenditures are expected to grow on
average by 3% each year over the same period. Under these assumptions, there is a projected
additional shortfall of around $180,000 annually that must be made up by the Transit Program’s
Working Capital/Deferred Revenue; assuming no new revenue sources are realized. However,
historically Transit Fund revenues have better performed than forecasted, while maximum
expenses have rarely ever been fully realized. Regardless, even under the most conservative
forecast, there is sufficient Transit Working Capital to sustain the fund for the next ten years under
this scenario and still leave a modest balance, albeit further reduced.
Like the Parking Fund, the Transit Enterprise Fund is in a unique position that it has one-time
available working capital that could be used to pay off its entire Unfunded Liability upfront. This
is a preferable option because there is some concern that State Transit Development Act (TDA)
rules would prevent Transit from paying into a contingency fund and would require further
research.
Capital Improvement Plan
The major challenge of the Transit Enterprise Fund is projected with regards to Transit related
capital needs particularly, bus replacements. Fourteen vehicles will reach the end of their Federal
Transit Administration defined “Useful-Life” within the next ten years. Without the availability
of awarded (Federal or State) grants, mid-life rehabilitation of vehicle powertrains will be needed
to keep these vehicles in service. Rehabs could directly require the use of Transit’s Deferred
Revenue/Working Capital, creating a more dire ten-year forecast.
Packet Pg 249
16
10
ATTACHMENT B: ENTERPRISE FUNDS FISCAL FORECASTS
$2,642,204
$2,503,180
$2,284,750
$2,105,635
$1,922,626
$1,746,492
$1,563,931
$1,386,755
$1,202,033
$1,021,825
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
Tranist Fund -If we do nothing
Revenues Expenditures Unreserved Working Capital
$2,810,986
$2,642,204
$2,423,580
$2,205,150
$2,026,035
$1,843,026
$1,666,892
$1,484,331
$1,307,155
$1,122,433
$942,225
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
Tranist Fund -If we do something
Revenues Expenditures Unreserved Working Capital
Packet Pg 250
16
1
ATTACHMENT C: BUDGET AND FISCAL POLICIES
Long-Term Liabilities and Maintenance of Infrastructure
The City will give priority to applying unassigned fund-balance due to one-time expenditure savings or
one-time increase in revenue to pay down long-term unfunded liabilities and invest in infrastructure and
equipment.
Financial Responsibility Philosophy
On July 1, 2014, the City Council adopted a Financial Responsibility Philosophy as a means for promoting
community health and well-being. The philosophy calls on the City to commit to fiscal responsibility
through good economic times, as well as economic downturns, and includes the following directives:
• Informed Decision-making. The City will identify and consider immediate and long-term
economic, social, and environmental impacts of all decisions considered by the Council.
• Shared responsibility. The City recognizes a shared responsibility between the employee and
employer to appropriately fund employee benefits, including pension benefits. Ensuring an
appropriate balance is a valuable tool in attracting and retaining well qualified employees that
deliver services to the community, while maintaining a long-term, sustainable, and balanced
budget.
• Increased Transparency. The City will conduct all business, including labor negotiations and
other employee compensation matters, with transparency pursuant to all applicable laws and
regulations. The City will continue to develop tools, such as key measures and dashboards that
ma ke information readily available to community members in a timely and useful manner.
• Aligned Investments. The City shall allocate resources in alignment with community needs
and priorities for maintaining and/or adding capital projects, assets, or services .
• Diversified and Aligned Revenue Sources. The City will pursue diversified revenue sources
that are aligned with expenditures and community priorities.
• Long-Term Unfunded Liabilities. The City will identify all long-term liabilities, including
unfunded pension obligations and strive to achieve a higher funded portion of pension
obligations; and shall manage all liabilities to maintain and enhance fiscal responsibility.
• Continued Efficiency and Effectiveness. The City will explore and implement operational
efficiencies including alternative service delivery, best management practices, and cost
containment measures while preserving effectiveness.
Packet Pg 251
16
1
ATTACHMENT D: REVENUE OPTIONS
REVENUE OPTIONS
The City major operating funds are the General Fund primarily funded by taxes and fees for
services and Enterprise funds (Water, Sewer, and Parking) that fund their own operations and
capital investment programs through rates. The Transit Fund is another Enterprise fund; however,
transit is primarily funded through Federal and State funding with a 20-percent match from fares.
In California, State law requires voter approval for municipalities to raise revenue through
taxation. General taxes require a simple majority and special taxes require a super-majority. The
laws also limit municipalities’ powers to recoup expenditures through charges for services or
development impact fees to the actual cost of activity.
Service charges are approved by the City Council and the City fiscal policies include some
subsidies to programs with the most significantly subsidized activities in parks and recreation
youth and elderly programs. Based on the fee study conducted in fiscal year 2016-17, the overall
subsidy citywide is estimated at $200,000.
The City also leases a number of City assets below the market value as strategic partnerships in
the community.
Several taxation revenue options, subject to voter approval, have been analyzed by staff as follows:
1. Cannabis taxation
In 2016, the State of California legalized medical and recreational cannabis. Currently, the City’s
ordinance prohibits all commercial activities regarding cannabis within the city limits. The City
Council held a study session regarding the State legislation in March 2017 and directed staff to:
1. Monitor developments in other jurisdictions
2. Monitor development at the Federal level
3. Engage the community regarding various land use and taxation alternatives that may be
appropriate; and
4. Return to the City Council with recommendations.
Staff is currently monitoring activities at the local, state and federal level, and conducting a
significant public outreach and community engagement effort. Recommendations for the City
Council to consider will be provided later in the fiscal year. A check-in with the City Council will
be necessary to ensure that any assumptions included in the FHRP are consistent and in line with
Council direction regarding future cannabis regulations.
If the City Council amends the City ordinance and allows cannabis activities within the City limits,
such activities will need to be regulated and can also be taxed. It is assumed that the City policy
will be to fully offset its regulatory efforts of such activities through fees and permits. However, it
is important to note that the City will not be able to recoup potential secondary effects of the
Packet Pg 252
16
2
ATTACHMENT D: REVENUE OPTIONS
activities in the City at large due to potential overall demands especially on public safety services.
Such secondary effects are difficult to estimate, and staff is studying the experiences from other
States as well as monitoring development of ongoing regulatory changes in the State of California.
The cannabis industry is new in the United States, even though the states of Colorado, Oregon,
and Washington enacted similar legislations prior to California. A regulated California market for
cannabis is conceptually new and different from the illegal market that has existed for years, and
thus bears the risk of high uncertainty. Staff has contracted with MuniServices, a financial
consultant, to provide general advice on taxation and regulation of the cannabis industry. The fiscal
forecasts for revenue in the California cities that have allowed cannabis activities vary greatly.
Aligned with the studies and data on cannabis activities in the other states provided by
MuniServies, staff has prepared the following estimates for cannabis tax related revenue based on
the assumption that the Council amends the City ordinance to allow such activities in the City
limits, and that a general tax will put forth to the voters with the next general election of November
2018.
Because staff does not have Council direction on draft regulations, the estimates are very
preliminary and high level. The maximum total tax burden recommended is 25% to 35%. Any
taxation beyond this level is considered counter-productive for a variety of reasons. The total
burden applied to cannabis by the State is 16%. The City’s Local Revenue Measure of 0.5% would
also apply. Thus, the total burden already imposed on the cannabis industry within the City of San
Luis Obispo would be 16.5%, leaving a range of 8.5% to 18.5% for the City to consider levying
additional tax burden. MuniServices recommends that this additional tax rate be set between 5%
to 10%. Industry representatives advocate for a lower additional tax rate of 3% to 7%. The revenue
that may be derived from allowing cannabis business activities within the City would also depend
on the size and number of these businesses relative to market demand.
Regional comparative data is based on Grover Beach where voters have approved cannabis
taxation at the following rates:
Grover Beach
Commercial Medical Activities - 5% on Gross Receipts
Commercial Non-Medical Activities – 10% on Gross Receipts
Cultivation and Nurseries - $25.00 per sf on first 5,000 sf
$10.00 per sf over 5,000 sf
According to MuniServices, local commercial cannabis tax revenues are dependent on several
factors. The City has control over the tax rate and the types of businesses that will be allowed to
operate. However, there are a number of external factors that are outside the control of the City
that must also be considered when establishing the tax rate. MuniServices recommend s that any
revenue measure placed before the voters seek to authorize a tax rate range, allowing the City
Council some flexibility to adjust based on a variety of factors. The following is a list of some
external factors that can impact local tax revenue.
Packet Pg 253
16
3
ATTACHMENT D: REVENUE OPTIONS
• State level taxation
• Product price fluctuations
• Consumption
• Competition
• Ongoing unregulated sales (black market)
• Competent business operators
• Federal involvement
• Economic impacts
Selecting the initial tax rate within a range will require additional review and evaluation. An initial
lower tax rate will generate less revenue per sale but could generate a larger number of sales from
customers from within and outside the city. An initial higher tax rate will generate more revenue
per sale but would likely limit the number of customers from outside the city and push some
consumers towards the black market.
Approximately half of the estimated revenue is estimated to be derived from dispensaries and half
from other allowable cannabis business within the city such as cultivation and manufacturing. It is
estimated that up to $3 million dollars could be realized in cannabis related revenue by fiscal year
2020-21 if the City Council moves forward with regulations and pursues voter approval for
additional tax revenue. The estimate would also largely depend on the extent of cannabis business
activities allowed in the city. This estimate is based on the premise of allowing all business
activities allowed by State legislation, however, preliminary feedback from the community and
staff work on draft regulations indicates that limits to the number of dispensaries and amount of
building floor area allowed to be put to cultivation and manufacturing uses should be limited.
2. Sales Tax
The fiscal forecast assumes continued citizens’ support of the Local Revenue Measure beyond
Measure G sunset date in 2022. The Local Revenue Measure dollars currently generate
approximately $7.5 million dollars per year that support critical Capital Improvement Program
infrastructure.
The California state sales tax rate is 7.25% as of January 2017. Counties and cities can charge an
additional local sales tax for a total maximum allowable tax rate of 10.25%. Statutorily, Cities and
Counties may add a maximum of 2% sales tax for local purposes; however, with passage of
additional legislation the sales tax rate burden may be increased to 10.25% total.
According to the Legislative Analyst’s Office for the State of California from 2012, “California’s
Rates Range From 7.5 Percent to 10 Percent. The state’s average rate is roughly 8.5 percent,
including a quarter–cent established by Proposition 30 of 2012. (This quarter–cent rate is
scheduled to expire at the end of 2016.) Although California’s cities and counties have many
different sales tax rates, two rates are much more common than others. As shown in Figure 8,
almost two–thirds of Californians live in cities or counties with 8 percent or 9 percent rates. The
Packet Pg 254
16
4
ATTACHMENT D: REVENUE OPTIONS
remaining third live in places with other rates. While many rural counties have the lowest rate (7.5
percent), some of these counties contain cities with higher rates. Eight cities have the highest rate,
10 percent. (The tax rates described in this report are as of May 1, 2015.)”
The sales tax rate in for the City of San Luis Obispo is 7.75%, which includes 0.5% Local Revenue
Measure Sales tax.
1% of sales tax generates approximately $15 million annually.
3. Transient Occupancy Tax
Currently the City of San Luis Obispo Transient Occupancy tax is 10% with an additional 2% for
Tourism Benefit Improvement District.
Transient Occupancy Tax rate can be adjusted by voter approval with a majority vote for general
tax and super majority vote for special tax.
Packet Pg 255
16
5
ATTACHMENT D: REVENUE OPTIONS
1% increase in Transient Occupancy Tax generates approximately $750 thousand annually in
today’s dollars.
4. Stormwater
The City of San Luis Obispo’s team-based Stormwater Program works to achieve objectives such
as water quality protection, groundwater recharge, flood control, education, and compliance with
an extensive regulatory permit regime promulgated by the State Water Resources Control Board.
However, there is no funding put forth at the State or Federal level to support these mandated
activities. At present, the City has 6.15 FTE assigned to associated flood control efforts, but actual
staffing levels are approximately 9.25 FTE. In FY 2018-19, the City anticipates expending
$1,275,000 on various stormwater efforts, while the Ten-Year CIP forecast shows expenditures in
the $12-14 million range during years when larger capital projects are anticipated to occur.
Recent research indicates three potential approaches to funding ongoing stormwater activities and
associated capital improvement. These are: 1.) a revenue measure that is exempt from Prop 218
under SB 231 (Hertzberg) and AB 2403 (Rendon); 2.) a citizens’ initiative that relies on the recent
2017 court case California Cannabis Coalition v. City of Upland; and 3.) a Prop 218 balloted
revenue measure that demonstrates property-related benefit. The first two of these potential
approaches rely on new legislation or court case precedents, and are not yet proven pathways to a
successful revenue measure, suggesting a “wait and see” approach. The City of Palo Alto recently
passed a Stormwater Management Fee using the third approach, which appears as a model of best
practices. If the City of San Luis Obispo were to utilize a similar methodology using “Equivalent
Residential Units” based on parcel size at more conservative total rate of $9.65, this could result
in annual revenue of approximately $1.5 million.
Staff recommends that the City begin taking steps towards a Prop 218 balloted, property-related
stormwater fee, while also monitoring the SB 231/AB 2402 option, and that funding be set aside
with the 2018 Supplement to support hiring a consultant team to conduct further investigations,
fiscal and legal analysis, public opinion research, and develop educational materials. This type of
inter-disciplinary consultant study is estimated to cost $100,000 and the process to take two years
to complete.
Packet Pg 256
16
RESOLUTION NO . 10248 (2011 Series )
A RESOLUTION OF THE CITY OF SAN LUIS OBISPO MODIFYING IT S
COMPENSATION PHILOSOPHY SUPERSEDING PREVIOU S
RESOLUTIONS IN CONFLIC T
WHEREAS,the City of San Luis Obispo strives to provide excellent service to th e
community at all times, and supports this standard by promoting organizational values includin g
customer service, productivity, accountability, innovation, initiative, stewardship, and ethics ; an d
WHEREAS,to achieve our service standards, the City must attract and retain wel l
qualified employees who exemplify our organizational values ; an d
WHEREAS,fostering an environment attractive to such employees depends upon man y
factors, including a competitive compensation program .
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Lui s
Obispo that the City's compensation philosophy is adopted as follows :
SECTION 1 .The City is committed to providing competitive compensation as part o f
an overall strategy of attracting and retaining well qualified employees who exemplify ou r
organizational values .
SECTION 2 . The City will consider total compensation, including but not limited to ,
salary, health, retirement, and time off benefits .
SECTION 3 .In evaluating competitive compensation, the City considers :
A.Financial sustainability including the City's financial condition as reflecte d
throughout the financial forecast, competing service priorities, maintenance needs, capita l
improvement and other asset requirements, fund reserve levels, and revenue projections prior t o
implementing changes in compensation .
B.Community acceptability since taxpayers and ratepayers ultimately fund al l
employee compensation .
C.The "relevant labor market"that may vary depending upon classification and i s
primarily defined by the geographic region (local, state-wide, or national) and key market s
(municipal, other government agencies, private sector) where labor talent is found, recruite d
from, and/or lost.
When the relevant labor market is defined as "local"; local private sector compensation data wil l
be considered along with local public sector compensation (municipal and other governmen t
agencies . When the relevant labor market is statewide or national, the City will conside r
compensation date for public sector agencies (municipal and other government) with severa l
R 10248Packet Pg 257
16
Resolution No . 10248 (2011 Series )
Page 2
comparable demographic data points including but not limited to population, median home price ,
median household income, median age, median education level, services provided, an d
unemployment rate . Quality of life should also be considered when selecting comparable
municipal and other government agencies .
D."Internal relationships"referring to the relative value of classifications to on e
another as determined by the City . Classifications performing comparable duties, wit h
comparable responsibilities, requiring a similar level of skill, knowledge, ability, and judgment ,
will be valued similarly in the City's compensation structures .
E.Other relevant factors may include unforeseen economic changes, natura l
disasters, states of emergency, changes in City services, and changes in regulatory or lega l
requirements .
SECTION 4 .At least every five years, the City will evaluate its compensation structure ,
programs, and policies to assess market competitiveness, effectiveness, and compliance with Stat e
Law . Adjustments to the compensation structure may be made as a result of this periodi c
evaluation and will be done through the collective bargaining process, if applicable, or othe r
appropriate Council-management processes .
Upon motion of Council Member Carter, seconded by Council Member Carpenter, and o n
the following vote :
AYES :
Council Members Carpenter, Carter and Smith, and Mayor Mar x
NOES :
Vice Mayor Ashbaug h
ABSENT : Non e
The foregoing resolution was adopted on March 15, 2011 .
ATTEST :
Elaina Cano
City Clerk
APPROVED AS TO FORM :
Packet Pg 258
16
1
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
October 5th, 2017 Informational Session
On October 5th, 2017, City staff held three informational sessions (two for staff and one for the
public) about the City’s projected $8.9 million budget gap and potential solutions to maintain a
balanced budget in the future. Members of the public and staff were encouraged to attend the
event, as well as provide written suggestions for workable solutions which are provided below.
When the state had a financial crisis, it relied on furloughs to help. City employees have been
willing to do this, but have been denied every time. Good enough for the state…but not for SLO?
Offer a “golden handshake” or an early retirement incentive. Yes, it’s a short term, one-time only
solution but it will reduce the number of Tier One employees and increase the number of Tier
Two and PEPPA level employees.
1) Increase retirement age into the 60’s. All retirement (full age should be moved to 62-> 64)
2) Stop all “perks” such as employee free or reduced parking
3) Provide free/secure bicycle parking and reduced bus/RTA rates for staff all
The states pension reform in 2012 was incomplete, a political compromise. Suggestion: City
should continue to work with other cities, The League of California cities, and to the state
(Governor + State Representatives). Develop a Statewide approach to this “local government
crisis” which ultimately could result in reduced services to citizens.
How about floating or producing a ½% sale tax in the City for transportation such as measure J
last year. This could be specified for maintenance and CIP transportation issues. There by freeing
General Funds to pay CalPERS.
Thanks for providing more info/background
1) Make the CalPERS program like that in the private sector. (employee contribution, vacation,
health benefits, etc)
2) Police Chiefs, Fire Chiefs, City Managers, etc. should not have it so easy to come and go
from City to City. This is a drain.
3) I am not sympathetic to your list of reasons for why costs are increasing. All of these have
affected us in the private sector too. Where does all the “Fixed Expenses” CalPERS money
go?
Find & utilize local (or non-local) benefactors to sponsor existing programs/events with their
private funding. Community fundraisers towards general fund…would that money go into
CALPERS funding? Televised dance-a-thon?? Parks & Rec. would host it!! ☺
1) Cancel Cola for Current Retirees.
2) Plan ahead for budget shortfalls
3) Don’t take large payouts
Packet Pg 259
16
2
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
More volunteers (unpaid).
Note: It is not just CalPERS that was affected by lower returns. The General Population was
equally affected—whether their savings were in investments or in a bank savings account.
Additional employee contributions to retirement and health plans.
Although probably a drop in the bucket, consider employee rather than City funding any 401k—
type retirement plan. Rationale: City employees receive retirement checks from CalPERS. Any
supplemental retirement can be (should be) established and funded by the individual concerned.
If citizens & rate payers are to bear part of this burden, then so should some (if not all) of the
non-profits that receive City funding. There are other funding mechanisms that can pick up the
difference.
1. Stop street sweep in residential areas—they sweep the middle of the street not the gutters.
2. Stop getting all consultants.
1. Sell/rent/lease unused water allocation i.e. unused naci water to communities that need water.
2. Cal Poly/Cal Poly students use 2 lot of City resources at expense or tax paying residents.
Some sort of compensation from poly/students.
3. Like it or not Marijuana sales are coming-City should consider cashing in on that reserve.
4. Use Diablo closure $ dollars to make lump sum PERS payment.
• Consider parks, recreation, OS & Cultural Resources consolidate-bring Nat Res/ OS &
Adobe/facil. Mgmt. into P&R. Consider all P&R svcs-parks maintenance as well-&park
planning-similar to transp. planning and utilities.
• Why not use some City contingency funds?-> to pre-fund a retirement trust fund?
• Consider consolidation/re-org of CDD -> Why 2 Div. Directors + Principle Planner in Dec.
Rev—Need that many supervisors/mgmt? Consider other structures—less sloed.
• Homestay registration = $ Make it easy to legally provide.
• Consider increasing TOT -> Easy for public to support b/c $ comes from visitors?
• Retirement (early) incentives fir staff who are “close”?
• Corporate sponsorship for Daman Garcia sports fields.
• How to make legalization of cannabis net revenue positive for the City?
• Increase parking fees/ allow more overnight pking in structures for $$,
Move one time surplus dollars into a trust fund to hedge the City’s unfunded liability “moving
target”
Increased fees for public noticing for large development projects.
Use the City’s yearly “surplus” money to help pay down deficit.
Packet Pg 260
16
3
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
Retirement incentive (pay flat amount to retire by specific date)
Private citizens (homeowners) save hundreds of $ a month by putting solar panels on their
roof…why not the City? Lots of open space…in the corpyard, for starters—the City’s large
investment in equipment could be protected from sun & rain…
Parking spots & spaces in structures and on the street that offer vehicle charging for additional
payment enhancing electric vehicle use & providing revenue.
Stop hiring expensive consultants. Let staff do work.
Open City Hall Forum
In addition to the October 5th meeting date, an online forum through Open City Hall, has been
available for members of the public to provide feedback and comments/suggestions regarding the
Fiscal Health Response Plan. The comments below are the results of 83 participants answering
the following two questions: 1. What feedback do you have about the potential components of
the Fiscal Health Response Plan? 2. What ideas do you have for workable solutions to address
the problem? The answers to these questions are organized below by question. The responses
include both those that registered through Open City Hall and those that did not.
1. What feedback do you have about the potential components of the Fiscal Health
Response Plan?
I think there needs to be some adjustment to salary schedules for fire and police. When you look
at salaries of City of San Luis Obispo employees One notices that fire fighters and police officers
dominate the first five pages of the sallaries of employees. Lets face it San Luis is not that
"rough" of a place to work. It is not like LA or Chicago etc. Additionally, the number of fires we
have in SLO is not high, again not like a big city. I think we could increase age of retirement of
many public safety officers to decrease Cal pers payments.
Reduction of services is unacceptable. Claw back excessive pensions from every "pensioner"
taking in more than $100K.
GREATER EMPLOYEE CONTRIBUTION TO THEIR OWN PENSIONS IS A MUST.
SLO is a member of the CA League of Cities, right?? All members are dealing with this problem
!! Whatever “best practices ” are being developed within that group should be considered for
adoption here!!
We need to stay fiscally viable; so we may have a future for ALL of the visitors revenue
Cut back on the non- essential budget items. Buying open space, re-signage in the City because
someone liked the new font, etc. Focus on working with the employees to come up with
Packet Pg 261
16
4
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
solutions. The employees are the experts, listen to them. Holding the retirement system over the
heads of the employees is just not right. Both sides negotiate and both sides agree on contracts.
The employees just gave back 7.5% a few years ago. I would like to see us stop blaming
someone and start resolving the issues.
Have the City merge with County to create a Health Plan, ie a local Single Payer.
I am concerned that this will be insufficient to really address the issue of the unfunded liabilities.
I do not believe that tax payers in the state have been given a clear explanation on how these
pensions became so severely under funded. Before we funnel more and more money into this we
need a complete accounting of this program. Unfortunately our state legislature can not be
trusted to appropriately manage our tax dollars.
Retirement benefits don't exist for the vast majority of City residents yet we are forced to pay for
the wealthy City Staff to live happily ever after. Hardly equitable.
Just like citizens, government should learn to live within its means. Do not spend money you do
not have, and don't mortgage the future.
None
I am sorry this has been handed off for so many years we all new this was coming.
The problem here as I see it is not the employees in this situation but the continued
mismanagement of city funds by the administrators. The city continues to spend money on pet
projects like buying open space, public art, rebranding, bike boulevards, fighting against plastic
straws and other time and money wasting ideas. Government is supposed to provide services to
the city....water, public safety and public works. Our city though thinks that they can spend
money on whims to appease the vocal minority. Why not ask the city a very simple
question.....When the pension system was super funded and the city was not paying its
contribution, where did that money go? It is apparent the city mismanaged that part of it and
instead of saving it in a fund for later they spent it.
Government is a farce
Operational Reductions and employee consessions are the way to go.
I do not understand this question.
We are not alone, as other cities face the same issues with PERS rate increase- which likely will
come down again in near future as PERS recovers in the booming stock market, when all other
City revenue levels are at record or near record highs-drastic measures are not prudent or fair to
the citizens and businesses in town.
Stop spending money
Packet Pg 262
16
5
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
Curtail 'feel good' programs. Highest priorities should be clean water, sewers, solid waste, and
road maintenance.
The city must look closely at the cause of this problem - primarily pensions plans. While steps
have been taken to mitigate the future impact of pension plans, the city must look closely at
drastic cuts in this area. Very few private employers are providing any sort of pension. While
cutbacks have been made with the tiered pension plans, further cuts must be made in this area.
Use the 'increase employee contribution' plan first and see how well it addresses the shortfall.
Relunctantly, I recommend raising the SLO city sales tax
See below
Increase employee contributions
This survey makes no sense
The City should look for ways to decrease it's Pension Obligation, not just raise taxes and fees,
or reducing public services. Government pensions are outrageously lucrative to the employee,
and are an unfair burden to place on the taxpayers and citizens of SLO. Current City employees
and retirees need to be asked to take a significant cut to their pension plan, period
reduce expenses to balance budget, employees pay greater share of benefits
Employees need to finance their own retirement accounts, the taxpayers cannot afford any more
money for pensions for past employees, many of whom no longer live in the area
The city is spending millions on new financial software. I'm not sure that software going to
greatly improve staff efficiency and reduce resources usage; they'll have to prove it to me by
showing the fewer number of employees in those roles. Who comes up with these ideas?
It's the pensions. If nothing is done about that the problem with grow with time. Other solutions
are band aids.
I like that the city pays retirement and every business should
I support operational reductions
Not enough.
I think any solution should leverage wealthy SLO community members vs low-middle income
people and students living in the community.
Packet Pg 263
16
6
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
I have no real experience or understanding of city government or finances, but I LOVE this city,
and want to protect it from falling apart, so...
The plan lacks a realistic view of what the economy will do within the next couple years, and the
ancillary consequences of each option.
The City must first solve the issue of a defined benefits plan which cannot be funded properly.
You must move to a defined contribution plan where employees manage their own retirement
and annual operating costs are known and fixed. unions must be brought to the table and benefits
redefined. it is the only fair solution.
Increased revenue via operations and increased employee contributions to retirement plans are
the only ones that make any sense.
overpaid staff, overtime allowances, pension out of control. it seems obvious
Think more outside the box
I would form a "consulting group" by aggressively consulting with 3-4 other similar size CA-
cities who are dealing with the same issue. SLO does not have to reinvent the "wheel" here
reduce spending for city employee salaries, benefits, etc.. It appears the spending level for city
employees is not sustainable, and the city cannot provide needed services due to the drain of high
city employees benefits and salaries.
Pension plans must be renegotiated people retire younger live longer and make more money
doing so on the back of the rest of the population
City has plenty of revenue. Focus on cost management measures.
City services are already lacking. It is not fair to punish residents for this problem. I will likely
move as will other high earning families.
The City is out of normals with private business which changed years and years ago. This is why
there is a budget issue. The city never earned its money, and thus wastes money
Cut capital improvement projects. Cut open any future open space acquisitions. Cut the plans and
allocations and any work done on the bike master plan.
I'm not sure what this questions means. I don't think I'm alone since a lot of responders ignored
this one.
Packet Pg 264
16
7
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
Stop letting builders and developers buy off the City Councilmans and Board of Supervisors!
This town has been ruined with all the building and traffic- drive the 101 at anytime and enjoy
the parking lot it has become!
Let all person's take some responsibilty for there own issues, take care of YOURSELF
The plan is ultimately on the right track but it needs more stringent and aggressive goals in order
to produce change.
Avoids the real problem of over spending.
Do the right thing for the people you work for,
Prioritize employees and their promised pay and benefits before spending millions on extra and
less priority items with surplus funds, such as a giant skate part, new million dollar park, or sub
par repaving of LOVR. Time to prioritize the core services and start saying ‘no’ to those who
want everything without being able to afford it.
Operate the city like a private business would.
Unfortunately this train has been on the tracks for a long time and the City is standing directly in
front of it.
It's kind of a cop out to blame it all on pensions. They aren't going up $9 million next year. The
budget cites capital improvement projects
Spend more on double decker busses, $40M buildings (gov center, airport, pet shelter, women's
jail). Spend more on city managers, lawyers, studies, and on bothering the existing businesses
that are trying to make a living.
You need to do a better job.
Cut the pensions
Cut pensions
Separate the pension fund and bankrupt it. Or force concessions.
Reduce their benefits
Multi pronged solutions of equal weight is essential to minimize adverse effects while avoiding a
punitive character.
Stop spending so much money
Packet Pg 265
16
8
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
1. New ways of doing business..Yes! As in, stop throwing around phrases like "Fiscal
Responsibility" if you don't man them. The city needs to re-evaluate its priorities when it comes
to spending. The city employees are not owners of a company who are entitled to the 'excess'
from a few good years, unless they are willing to put up the capital in the bad years. The decision
makers should not have written checks they can't cash. 2. Revenue Options....I don't agree with
the City seeking additional revenues from residents because it made obligations it can't meet. 3.
Operational Reductions...The residents shouldn't have to experience reductions in basic services.
The city needs to re-evaluate its spending priorities. As example of reduction in services that
doesn't directly negatively impact residents, would be reducing funds put toward attracting
tourists. 4. Employee Concessions...Yes.
The costs are in salaries- you have to cut salaries. You cannot "fix" your problems hoping on the
mythical "pot of gold" at the end of the development rainbow
2. What ideas do you have for workable solutions to address the problem?
I think there needs to be some adjustment to salary schedules for fire and police. When you look
at salaries of City of San Luis Obispo employees One notices that fire fighters and police officers
dominate the first five pages of the sallaries of employees. Lets face it San Luis is not that
"rough" of a place to work. It is not like LA or Chicago etc. Additionally, the number of fires we
have in SLO is not high, again not like a big city. I think we could increase age of retirement of
many public safety officers to decrease Cal pers payments.
AA monetary cap on size of pensions. They should be good pensions, but fire and police with
pensions greater than $100K is just wrong, also for administrators. Cap pensions at $xx and
adjust for inflation from there.
I HAVE ALWAYS BELIEVED THAT CITY EMPLOYEE "COMPENSATION"
(INCLUDING ALL PENSION, HEALTH BENEFITS, ETC.) SHOULD BE ON A PAR WITH
THE PRIVATE SECTOR. AS A PROFESSIONAL IN THE CITY FOR 30 YEARS, I HAD TO
PUT AWAY ALL OF MY OWN MONEY TO FUND MY RETIREMENT. A SIMILAR
APPROACH SHOULD BE TAKEN WITH CITY EMPLOYEES. TO CONTINUE WITH A
DEFINED BENEFIT APPROACH TO RETIREMENT (WHICH HARDLY EXISTS IN THE
PRIVATE SECTOR) SHOULD NOT EXIST IN THE PUBLIC SECTOR (MUCH AS THE
PRIVATE SECTOR REALIZED DECADES AGO). ALL OF US HAVE TAKEN A
FINANCIAL HIT TO LIVE IN SLO, ESPECIALLY AS COMPARED TO THE COST OF
LIVING HERE. PUBLIC EMPLOYEES SHOULD NOT BE AN EXCEPTION.
THIS Might be far fetched: Charge for farmers market: lots of outta-towners visit!!!!!!!!!
Collaborate for ideas
Hire out our current employees’ expertise. Why can’t we have our building department, police,
fire, water, offer classes in which we charge a fee. How about getting restitution for fire and
police calls that are deemed intentional? How about advertising on our vehicles? Who wouldn’t
Packet Pg 266
16
9
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
want to sponsor the Fire Dept’s medical department or their hose compartment? I’m sure ABC
Bailbonds would love to advertise on a Police car. That’s all “free” money.
Since the elite have restricted taxes on income the City should raise revenues in commercial
areas. Have the City lend money to collect interest. Have the City act as developer for land
converted to housing collecting rent on affordable housing. The City should supply internet
services charging fair amounts for broadband.
Further changes to pensions for new employees. Moving to a defined contribution program.
Lower the cap on pension payout. Give employees the option to contribute for a larger retirement
benefit. Address the issue of waste in these agencies - Overstaffing, outdated policies that waste
money, government red tape that only causes inefficiency, actually terminating employees who
do not perform. Money saved could be used to address the shortfall. As individuals we have all
had to make concession and tighten our belts as we are taxed again and again. Maybe it's time for
the state to do the same thing.
City employees are overpaid when compared to the residents that they serve. They have become
the rich robbing from the poor. General lack of accountability and efficiency.
Whatever changes the city staff comes up with for you (the council) to consider, keep in mind
that the stock market is approaching the end of a 10 year expansion. The likelihood of a
recession in the next year is extremely high. This will have negative effects on the calpers
investments and compound the pension debt SLO will be faced with. So when hearing the city
staff's recommendations for how to handle the pension debt, keep in mind that we are due for a
pension crisis. I would recommend getting a free 14 day trial of Real Vision TV if you want to
understand what state the economy is in, and make more educated/drastic changes than what the
city staff presents to you. Good luck.
City jobs should be paid based on competitive market rates, not comparisons with adjacent
counties. Wage increases should not be 'automatic' but based on merit.
I don't understand why local government thinks they need to provide higher wages and higher
benefit levels than the private sector. Benefit levels should be cut immediately to match what
typical private employers are paying, not phased in over several years. Employees won't quit.
They are not likely to find a better deal anywhere else in the county. If this is not handled
appropriately, when the city goes bankrupt, there will be even more drastic cuts to be made.
Better to make smaller ones now.
I thinks there are 3 solutions: you can raise fees for everything connected to the city 2) you can
spend proposition G money that was promised to the citizens. 3 I thinks it s time we bring the
cost of our city goverdown and I mean the cost in all areas from newly hired park rangers maybe
1 of 2 or 3 rental inspectors cut to 2 cut salaries and redo the pension plan new hires. I am not not
sure this city council has the stomach for what should be done.
Packet Pg 267
16
10
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
The reality is that a lot of people on this survey just do not get it. PERS pensions are not going
away and the city will not be going to a 401K system. It would take law at the legislature to
make that happen and to leave PERS would cost the city dearly. The employees negotiated these
benefits fairly based on industry standards to blame them is irresponsible and more blame needs
to be put on the administration and their continued mismanagement of funds. Furthermore you
have an elected body who cannot make a decision due to the fact that the Chamber of Commerce
board think that they should have a say in city business, employee contracts and governing of the
city. Too many of our elected officials need to think for themselves and if they cannot then they
need to be held accountable by being recalled or thrown out of office. The employees already
pay their share of the costs and its time for the city to cut out the fat throughout the city and get
back to back essential services period.
Allow marijuana stores in the city
People are willing to work for less to live in SLO. It happens in the private sector, the same
should be true for the City Gov. We don't have to pay the same amounts as other cities.
It's time to start charging for parking. The zoning update should establish a parking maximum
for developers. By reducing parking and realistically pricing parking, you will reduce traffic
congestion while creating a sustainable revenue source. Do not eliminate transit service.
A thoughtful and well balanced approach, increasing revenues by allowing Marijuana sales in
town is a no brainer. Temporarily reducing spending on non essential services for the next
budget cycle. Make policy to utilize future budget surpluses and/or windfalls that the City comes
by be dedicated to paying down PERS obligation. Consider offering older employees some
reasonable early retirement incentives and freeze position if non essential and refill with new
employee in new PERS tier when appropriate. Work cooperatively with current employees to
increase their contributions- within reason of what other city's are doing so not to create and
exodus of quality work force who make this city the great place it is. Thank you for your
consideration
Stop spending money
Significant employee contributions to their retirement programs. They already receive higher
compensation than equivalent private sector employee
Legalize and tax marijuana
Reduce number of employees; cut back on all non-guaranteed pensions (for example, long term
employees should get what is already promised but future payments into their plans should be
reduced); reduce exorbitant public safety overtime; focus only on essential services such as road
maintenance and public safety)
I am a member of a public employee union, and I have to pay about 45% of the total contribution
(11% of my salary) to that system. The city pays nearly 80% of the total contribution to STRS?
Packet Pg 268
16
11
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
Crazy!! Also, reduce the 3% formula for public safety, why do they get 50% more than other
employees, and retire earlier. They are great employees with dangerous jobs but that is just too
much of a perk.
Also, ask employyes to contribute more to their retirement...and maybe have a two-tiered system
where new employees have a less-generous pension plan.
1. Base all pensions only on base salary, not any adders due to overtime or unused sick leave and
vacation. 2. Freeze existing pensions (no annual increases). 3. Increase contributions by current
employees. 4. Future employees use 401k type benefit only.
Reduce the city government payroll by cutting positions & departments that constitute
unnecessary luxuries.
Increase employees contributions and reduce operational costs
City manager should be required to take a course in basis mathematics, with the goal that they
learn to understand the true cost of pension plans , discount rates, etc. If prior management truly
understood the math, no one would have ever agreed to the current pension scheme, as it is not
sustainable even at a planned average rate of return of 7.5% (now 7%).
reduce number of employees, utilize contract workers, modify retirement program, eliminate
defined "benefit" plan, employees responsible for benefits, no OT.
Increase employee contributions to retirement. Decrease employee wages to more properly
reflect the value of the service performed. Stop setting salaries based on similar cities. The wage
should be established as what is best for the citizens, not what is best for the employees. We
should establish a citizen group to negotiate all future salary and benefit packages for city
employees.
Quit following stupid industry guidelines such as replacing computers every couple of years.
Replace them when necessary. Buy used vehicles instead and make use of them longer. Nobody
cares about you're brand new shiny vehicles. Lower salaries. There is no proof one city manager
at 300K is any better than a city manager at 100K. Heck, you can have 3 city managers for 300K
and I'm pretty sure 3 is better than one. I'm sure nothing will change except taxation of the
people. It's the only thing government knows.
Increase worker pension contributions significantly.
Increase taxes to pay for the city. The city is great and everyone wants to live here. Assess each
home $100,000 and have rent control put in so the renters don't pay for it. Fine businesses
$10,000 per year for each location if they do not pay living wages and provide retirement. That
way, the city can hire more people who can live here if the current businesses do not pay a fair
wage. It is such a great place, everyone should be able to live and retire here.
Packet Pg 269
16
12
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
Get over it and make $ from marijuana sales
overall, if a transition to 'portable' 401K style retirement plans could be implemented
immediately, transitioning away from the current PERS system, that would be helpful. Fix a
percentage of city payroll budget for safety employees and the associated PERS costs.
Immediate hiring freeze, stop approval of multi-use with minimal bottom floor comercial,
promote storefront marijuana shops near Poly and downtown where tourists frequent.
Policing is an incredibly expensive program to run in any city, and San Luis Obispo is no
different. There is a national movement, led by the likes of Black Lives Matter, Fight for 15,
DAPL, and BDS to divest from institutions that cause our communities danger, and invest in
what keeps us healthy. To take these movement seriously would be to take divestment from
policing seriously. This is not a radical policy idea--in fact, its happening all over the country
(look at Rikers Island, for example!). This would be a perfect opportunity to put progressive
politics into action: divest from policing, invest in health care pensions!
I love the idea of partnering with other small cities facing this, or who have successfully
navigated it already. Taxing weed sounds like a great plan. Solar/wind options that would lower
costs over time; more pay in by employees, raising sales tax, (is there a way to raise it on tourist
focused industries?), and raising property tax on homes not being occupied by the owner (if you
want to own a large portion of our town, pay into it).
Allow recreational marijuana dispensaries in town.
Stop the improvements for frivolous projects, stop giving breaks to residential projects, start
listening to residents and pay in full the pensions earned by last workers.
Tax the rich! Stop taking from people who can barely afford to live here.
Defined contribution plan to replace defined benefits. no other solution will work.
The compensation structure of city employees for a city with our tax revenue is highly
disproportionate. We either need to increase the half cent sales tax to a full penny or really
restructure the benefits packages of employees with 20+ years
the city has indulged its employees for too long; your retired employees ... retire at younger and
younger ages, live here when no young people can afford to and where persons employed in non
city jobs cannot as well. it should be obvious. it should have been obvious decades ago. start here
first, then approve marijuana and tax it , but not before you end the greed of the city employees
here.
Cannabis Taxes
Packet Pg 270
16
13
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
Contract Fire Services w/SLO County/CAL Fire will save MILLIONS & PROVIDE THE
SAME LEVEL OF SERVICE.
Yes. Raise employee contribution to pers. It's an excellent retirement program, but employee
contribution have always been too low for the return. They should be more vested.
Also look at how medium size for-profit companies employing unionized-staff are dealing with
these same issues. Most have switched to 401K plans.
Pay city employees lower salaries and benefits. These items are too a large portion of the city's
budget, and this spending expense is not sustainable relative to city revenues
Cost is mostly payroll, so need to reduce it. Cut police and fire staffing. Their cost is outrageous
due to overly generous pensions. Eliminate overtime where possible. Increase employee
contributions across the board. Cut management salaries. We don't need to pay City Manager in
line with Beverly Hills and other "comparable" cities. Of course, you will not do any of this, so
this outreach effort is just another waste of money.
Increase employee contributions, reduce future pensions, band with other cities to force
CALPERS and the state to live up to their obligations
instead of comparing to other cities, which got SLO in trouble, compare to normal private
business. No pension. Stop it now. 401K. Bring the salaries in line with private business
Cut costs, increase revenue- Raise taxes, Hiring freeze. Limit work on any capital improvement.
Employees should pay more into the system. After all, they are really just paying their future
selves. The City should contribute more to the system. This will make it more difficult to give
City employees future raises thus making their payout at retirement less. The City could curtail
wasteful spending such as poorly designed bike plans (yes, Chorro Street) that residents living on
those streets feel is unsafe.
Stop giving the Board of Supervisors raises! Bloated salaries and benefits need to end!
Easy Fix, do not allow double dippers to collect a dime
Offer those who are close to collecting on CalPers another few year so of work with an incentive
to spread the timeline of payment. Insure that overtime is not paid on all levels, this is simple
scheduling to insure overtime does not occur. Implement expectations of performance, and make
sure there is transparency between the city manager and council. Maximize city property as best
possible to insure property is being utilized to its fullest. Reasses salaries offered by the city. As
a local business owner we cannot compete with the rates offered by the city in many of the
positions. In addition, the expectation of productivity in the workforce is laughable. There are no
performance goals, there are no pressures for the city staff/employees to perform. In fact, it still
holds true the stigma of getting hired by the city equates to a well paying easy going job. A
Packet Pg 271
16
14
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
typical business hires based on experience and has expectations of deliverables. If not met,
people are fired. The city needs to reasses what current job positions are held and where there
might be overlap where salaries can be modified.
While interest rates are low, float a long term bond that covers the entire shortfall. Mandate a cut
in the budget.
The city is crawling with unpermitted construction. Not just the little things but whole houses
being remodled with no permits. I reported one but the city did nothing. Note these can be seen
from the street yet crickets.....
Make Marijuana sales legal. Tax it
It's easy cut spending like we have to do. Cut benefits. Give higher medical copays or less
coverage for a 5 year period. It's what we do have to do with our post tax money.
Cut jobs. I see no other way. Cut waste where can.
Prioritize government and create a hierarchy for services provided. Realize surplus funds as a
way to pay down debt, rather than splurge on added burdens
Cut from the top. The waste is almost always at the management level.
1. Reduce/eliminate unnecessary expenses. 2. Create new forms of revenue by tapping into areas
not yet capitalized on. For example: 1. Retrofit all parking garages with smart automated tech.
Eliminate staff and double the rates. Current rates are too cheap relative to the value of a
downtown parking garage. Consumers will pay as long as checkout is FAST and easy. 2. Make
sure all equipment using up water/energy is as efficient as possible to ensure best rates and utility
expenses. 3. Sell or lease under utilized city owned property to private parties at market rate.
The only way to truly address this situation is to reduce services and cap the amount of allotted
overtime. Those that remain on staff should be asked to take a voluntary pay cut (especially the
police department as they are the highest paid department in the county).
Hold off on some capital improvements until an infrastructure bill is passed. Focus on
maintaining what we have. Seek grants. Increase enterprise ventures
Spend and tax.
You need to do a better job.
Cut the pensions
Embrace recreational marijuana and thereby increase tax revenue
Packet Pg 272
16
15
ATTACHMENT F: INFO SESSION AND OPEN CITY HALL COMMENTS
Cut pensions
As above, it is not fair that the citizens have to pay for an inflated pension. This is worse than
simple bureaucratic red tape. Young tax paying families will suffer while non tax paying retired
people benefit... Perfect way to kill an economy
Reduce their benefits
The problem must be recognized as a temporary demographic one as baby boomers retire.
Reducing certain services may go unnoticed by residents. Certain types of fines should be
increased in areas where compliance has not been satisfactorily achieved according to police logs
and especially where the quality of life is impacted, meaning not parking fine which are already
too high. More city sponsored events which generate revenue may be considered while other
sacred events such as Concerts in the Plaza should remain free. Prudent investment of city funds
to generate growing revenue will be essential
Stop spending so much money
Having the City re-evaluate its priorities with regard to spending of available resources.
Cut salaries for employees making above 150k by 20%, between 100k-150k 18%, between 85K-
100K 15%, 55k-85K 10%
Packet Pg 273
16
Page intentionally left
blank.
Packet Pg 274
16