Loading...
HomeMy WebLinkAbout04-20-2021 Agenda PacketTuesday, April 20, 2021 San Luis Obispo Page 1 Based on the threat of COVID-19 as reflected in the Proclamations of Emergency issued by both the Governor of the State of California, the San Luis Obispo County Emergency Services Director and the City Council of the City of San Luis Obispo as well as the Governor’s Executive Order N-29-20 issued on March 17, 2020, relating to the convening of public meetings in response to the COVID-19 pandemic, the City of San Luis Obispo will be holding all public meetings via teleconference. There will be no physical location for the Public to view the meeting. Below are instructions on how to view the meeting remotely and how to leave public comment. Additionally, members of the City Council are allowed to attend the meeting via teleconference and to participate in the meeting to the same extent as if they were present. Using the most rapid means of communication available at this time, members of the public are encouraged to participate in Council meetings in the following ways: 1.Remote Viewing - Members of the public who wish to watch the meeting can view: •View the Webinar (recommended for the best viewing quality): ➢URL: https://slocity-org.zoom.us/j/92924798609?pwd=NE9ndzVVU1pwTUFwOTJSbTBqNWNDUT09 ➢Telephone Attendee:+1 (669) 900-6833 ➢Webinar ID: 929 2479 8609; Passcode: 043038 Note: The City utilizes Zoom Webinar for City Council Meetings. All attendees will enter the meeting muted. An Attendee tutorial is available on YouTube; please test your audio settings. •Televised live on Charter Cable Channel 20 •View a livestream of the meeting on the City’s YouTube channel: http://youtube.slo.city 2.Public Comment - The City Council will still be accepting public comment. Public comment can be submitted in the following ways: •Mail or Email Public Comment ➢Received by 3:00 PM on the day of meeting - Can be submitted via email to emailcouncil@slocity.org or U.S. Mail to City Clerk at 990 Palm St. San Luis Obispo, CA 93401. All emails will be archived/distributed to councilmembers, however, submissions after 3:00 p.m. on the day of the meeting may not be archived/distributed until the following day. Emails will not be read aloud during the meeting. •Verbal Public Comment ➢In Advance of the Meeting - Call (805) 781-7164; state and spell your name, the agenda item number you are calling about and leave your comment. The verbal comments must be limited to 3 minutes. All voicemails will be forwarded to the Council Members and saved as Agenda Correspondence. Voicemails will not be played during the meeting. ➢During the meeting – Join the webinar (instructions above). Once public comment for the item you would like to speak on is called, please raise your virtual hand, your name will be called, and your microphone will be unmuted. If you have questions, contact the office of the City Clerk at cityclerk@slocity.org or (805) 781-7100. San Luis Obispo City Council Agenda April 20, 2021 Page 2 5:30 PM *EARLY START* REGULAR MEETING TELECONFERENCE Broadcast Via Webinar CALL TO ORDER: Mayor Heidi Harmon ROLL CALL: Council Members Carlyn Christianson, Jan Marx, Andy Pease, Vice Mayor Erica A Stewart, and Mayor Heidi Harmon PLEDGE OF ALLEGIANCE: Council Member Carlyn Christianson PUBLIC HEARING ITEMS 1.RATE AND METHOD OF APPORTIONMENT AMENDMENT APPROVAL FOR CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) (ELKE / E. CANO – 15 MINUTES) Recommendation: Approve the Rate and Method of Apportionment amendment of Community Facilities District No. 2019-1 (San Luis Ranch) by the following actions: 1.Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, calling a Special Mailed-Ballot Election related to change proceedings within City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch).” 2.Adopt a Resolution of Change entitled, “A Resolution of Change of the City Council of the City of San Luis Obispo, California, relating to City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch)” if sufficient landowner support is received; and 3.Introduce an Ordinance entitled, “An Uncodified Ordinance of the City of San Luis Obispo, California, levying a Special Tax for the Fiscal Year 2021-2022 and following fiscal years solely within and relating to the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch)” to Levy the Special Tax for The Fiscal Year 2021-2022 and Following Fiscal Years Solely Within the Boundaries of The San Luis Ranch CFD. San Luis Obispo City Council Agenda April 20, 2021 Page 3 2. AUTHORIZE THE ISSUANCE OF THE SAN LUIS RANCH CFD SPECIAL TAX BONDS, IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $20,500,000, AUTHORIZING THE EXECUTION AND DELIVERY OF AN INDENTURE, A BOND PURCHASE AGREEMENT AND A CONTINUING DISCLOSURE CERTIFICATE, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION THEREWITH AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS (ELKE / E. CANO – 15 MINUTES) Recommendation: Approve the bond issuance for the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (CFD) by taking the following actions: 1. Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, authorizing the issuance of City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Special Tax Bonds, Series 2021, in an aggregate principal amount of not to exceed $20,500,000 authorizing the execution and delivery of an Indenture, a Bond Purchase Agreement and a Continuing Disclosure Certificate, authorizing the distribution of an official statement in connection therewith and authorizing the execution of necessary documents and certificates and related actions.” PRESENTATIONS 3. CITY MANAGER REPORT (JOHNSON – 10 MINUTES) Recommendation: Receive a brief report from City Manager Derek Johnson. 4. INTRODUCTION OF NICK TEAGUE, WATER RESOURCES PROGRAM MANAGER; CHRISTINA CLAXTON, ENVIRONMENTAL PROGRAMS MANAGER; AND MATT ANDERSON, LABORATORY MANAGER (FLOYD – 10 MINUTES) Utilities Director Aaron Floyd will introduce Nick Teague, Water Resources Program Manager; Christina Claxton, Environmental Programs Manager; and Matt Anderson, Laboratory Manager. PUBLIC COMMENT PERIOD FOR ITEMS NOT ON THE AGENDA (Not to exceed 15 minutes total) The Council welcomes your input. State law does not allow the Council to discuss or take action on issues not on the agenda, except that members of the Council or staff may briefly respond to statements made or questions posed by persons exercising their public testimony rights (Gov. Code sec. 54954.2). Staff may be asked to follow up on such items. San Luis Obispo City Council Agenda April 20, 2021 Page 4 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. 5. WAIVE READING IN FULL OF ALL RESOLUTIONS AND ORDINANCES (PURRINGTON) Recommendation: Waive reading of all resolutions and ordinances as appropriate. 6. MINUTES REVIEW - APRIL 6, 2021 COUNCIL MINUTES (PURRINGTON) Recommendation: Approve the minutes of the City Council meeting held on April 6, 2021. 7. AUTHORIZATION TO ADVERTISE LAGUNA LAKE 2021 MAINTENANCE DREDGING PROJECT, SPECIFICATION NO. 91392 (HORN / BURDE) Recommendation: 1. Approve the Project Plans and Special Provisions for the Laguna Lake 2021 Maintenance Dredging Project; and 2. Authorize staff to advertise for bids; and 3. Authorize the City Manager or designee to award the construction contract for the bid total if the lowest responsible bid is within the publicly disclosed funding amount of $650,000 and the funding amount is consistent with the adopted 2021-23 budget appropriation for this project. 8. APPROVAL OF THE FINAL TRACT MAP FOR TRACT 3140, 1137 PEACH STREET (FMAP 0542-2020) (CODRON / LA CHAINE) Recommendation: Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving the Final Map for Tract 3140 (1137 Peach Street, FMAP-0542-2020).” San Luis Obispo City Council Agenda April 20, 2021 Page 5 9. AUTHORIZATION TO INCLUDE THE PROPERTY AT 79 BENTON WAY IN THE CITY’S INVENTORY OF HISTORIC RESOURCES AS A MASTER LIST RESOURCE (ELBERT EARLE CHRISTOPHER HOUSE) (CODRON / OETZELL) Recommendation: As recommended by the Cultural Heritage Committee, adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, adding the property located at 79 Benton Way to the Master List of Historic Resources as “The Elbert Earle Christopher House” (HIST-0675-2020).” BUSINESS ITEM 10. 2021-23 FINANCIAL PLAN - STRATEGIC BUDGET DIRECTION AND MAJOR CITY GOAL WORK PROGRAM REVIEW (ELKE / HARNETT – 120 MINUTES) Recommendation: 1. Review the strategic budget direction report; and 2. Provide feedback and guidance to the City Manager regarding the recommended strategic budget direction and proposed budget allocations to commence budget adoption on June 1, 2021. LIAISON REPORTS AND COMMUNICATIO NS (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 next Regular City Council Meeting is scheduled for Tuesday, May 4, 2021 at 5:30 p.m. via teleconference. San Luis Obispo City Council Agenda April 20, 2021 Page 6 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 formats to persons with disabilities. Any person with a disability who requires a modification or accommodation in order to participate in a meeting should direct such request to the City Clerk’s Office at (805) 781-7100 at least 48 hours before the meeting, if possible. Telecommunications Device for the Deaf (805) 781-7410. 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. 1010 Marsh St., San Luis Obispo, CA 93401 (805) 546-8208 . FAX (805) 546-8641 PROOF OF PUBLICATION (2015.5 C.C.P.) STATE OF CALIFORNIA, County of San Luis Obispo, I am a citizen of the United States and a resident of the county aforesaid; I am over the age of eighteen years, and nor a parry interested in the above entitled matter. I am the principal clerk of the printer of the New "limes, a newspaper of general circulation, printed and published weekly in the City of San Luis Obispo, Count}' of San Luis Obispo, and which has been adjudged a newspaper of general circulation by the Superior Court of the County of San Luis Obispo, State of California, under the date of February 5, 1993,.Case number CV72789: char notice of which the annexed is a printed copy (set in type nor smaller than nonpareil), has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to -wit: 0 I in the year 2021. I certify (or declare) under the the penalty of perjury that the foregoing is true and correct. Dated at San Luis Obispypo, C,jal'�ifornin, this day of T 2021. Patricia Horton, New Times Legals Proof of Publication of a rir SAN LUIS OBISPO CITY COUNCIL NOTICE OF PUBLIC HEARING The San Luis Obispo City Council invites all interested persons to participate in a public meeting on Tuesday, April 20. 2021, at SM p.m. While the Council encourages public participation, growing concern about the COVIO-19 pandemic has required that public meetings be held via teleconference. Meetings can he viewed an Government Access Channel 20 orstreamed live homthe Citys YouTube Channel at b1tpJ/yautube.slo.city. Public comment prior to the start of the meeting, may be submitted in writing via U.S. Mail delivered to the City Clerks office at 990 Palm Street. San Luis Obispo, CA 93401 or by email to emailcouncil® slochy.org. Public Hearing Hem: •A Public Hearing to consider adapting a Hesolufon, as recommended by the Cultural Heritage Committee, designating the property at 79 Benton Way as a Master List Resource in the Ciry's Inventory of Historic Resources. Consideration of eligibility for historic listing is exempt from the provisions of the California Environmental Quality Act (CEOAlunderthegeneral rule described in CEQA Guidelines 4150611b113L as itisdoes not have the potential for causing a significant effect an the environment (HIST-0675-2020). For more information, contact Walter Oeoell Assistant Planner, forfheCiVsCommunity0evelopment0epartment a[(8051781-7593 orbyemad,, waelzell@7slocdyory. The City Council may also discuss other hearings or business ftems before or after the hems listed above. If you challenge the proposed project in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this Force, or in written correspondence delivered to the City Council at, or prior to, the public hearing. Reports for this meeting will be available for review online at www.slocitv.org no later than 72 hours prior to the meeting. Please call the City Clerk's Office at INS) 781-7100 for more information. The City Council meeting will be televised live on Charter Cable Channel 20 and live streaming on the Chyle YouTube channel hupsJ/youti be.sla.city. Teresa Purrington City Clerk City of San Luis Obispo April 8,2021 I I .. I ,I ., ,.., vlL. R.,L I-,II.Il el 1010 Marsh St., San Luis Obispo, CA 93401 (805) 546-8208 . FAX (805) 546-8641 PROOF OF PUBLICATION (2015.5 C.C.P.) STATE OF CALIFORNIA, County of San Luis Obispo, I am a citizen of the United States and a resident of the county aforesaid; I am over the age of eighteen years, and not a party interested in the above entitled matter. I am the principal clerk of the printer of the New Times, a newspaper of general circulation, printed and published weekly in the City of San Luis Obispo, Count)' of San Luis Obispo, and which has been adjudged a newspaper of general circulation by the Superior Court of the County of San Luis Obispo, State of California, under the date of February 5, 1.993, Case number CV72789: that notice of which the annexed is a printed copy (set in type not smaller than nonpareil), has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dares, ro-wit. t 1 in the year 2021. I certify (or declare) under the the penalty of perjury that the foregoing is true and correct. Dated at San Luis Obis, Ca orma, this day oof/ 1 ' 1 2021. Patricia Horton, New Times Legals F r 1 P IE Pi 0 Proof of Publication of tSe NOTICE OF PUBLIC HEARING REGARDING PROPOSED CHANGES TO THE CITY OF SAN LUIS OBISPO'S COMMUNITY FACILITIES DISTRICT NO. 2019-11SAN LUIS RANCH) Tuesday, April 20, 2021 530 p.m. Hosted via Teleconference On Tuesday, March 16, 2021, the City Council(the "City Council") of he City MS., Luis Obispo ON, "Cnr') adopted its Resolution No. I1233 (2021 Series) (Me "Resolution of Consideration') by which it has scheduled a public hearing W give Consideration to amending the powers C-mmmy conferred upon the City Council by the City-s Community Facilities District No. 2019-1 (San Luis Ranch) (the'Communny Facilities Dishint., At a special election within the Community Facilities District held on April 2, 2019, the Ciry Council was authorized, among other things, to levy a special tax to finance certain public facilities and M issue debt to finance the facilities. The special tax to be levied in the Community Facilities District is referred to herein as the "flute and Method of Apportionment" The Commu-'dy Facilities Disbict was formed under the -Mall,- Roos Community Facilities Act of 1982,- Chapter 2.5, Part I, Division 2, Title 5 of the GO m emem Code of the State of :aldomia, commencing wish Section 53311(the *Act-) (ha Act provides that changes in the powers conferred upon he City Council by the Community Facilities District may is considered and submitted to the qualified electors of the :ammunity Facilities District. The first step in that process is I describe the proposed Changes and to schedule and hold Public hearing on them. In its Resolution of Consideration, re City Council has set forth the proposed Changes Ithe Proposed Amendments") and sChed.Ild the public hearing. his Notice contains a brief summary of the Proposed mendmems, but you are rehired to Me Resolution of snsiderabon for the definitive description of Me Proposed mendments, including a description of the Community milNes Der ict and a description of Me amended and stated rate and method of apporhomamm. m Public Reunion: The City of San Luis Obispo City Council 11 hold the public hearing on Tuesday, April 20, 2021, at 530 n. via teleconference. Due to the meeting being held via econference and/or vide -conference only, the means by rich the public may observe such public hearing and offer blic commie shall be prescribed on the agenda for Me City uncil meeting. At the public hearing, any persons interested, including a taxpayers, Property Owners and registered voters withi the Community Facilities District, may appear and be heart and the oral or written testimony of all interested persons c taxpayers for or against any of the proposed changes to M authority conferred on the City Cauncil, will be heard an. considered. Any protests M the proposed Changes may be made orally o in writing by any interested persons or taxpayers, except the any protests pertaining to me regularity ar sufficiency of in shall be in writing and shall clearly set forth On irregularities and defects to which objection is made. The Cm Council may waive any irregularities in the form M content of any written protest and at the public hearing may correct mina, defects in the Proceedings. All written protests not presented in person by the protester at the public hearing must be filed with the City Clerk at or before the time fixed for the public hating in order to be received and considered. Any written Protest may be withdrawn in writing at any time before the conclusion ofthe public hearing. Written protests by a majority of the registered voters residing and registered within the Community Facilities District (provided they number at least 6), orbythe owners of a majority Of me land area within the Community F--IINes Distract not exempt from the special tax, will require suspension of these Proceedings for at leas[ one year. If such protein are directed only against certain elements of the proposed changes, only those elements need be excluded from the proceedings. The P-00-i'� M . The proposed changes tiro to amend the rate and method of apportionment in me Community Facilities District to, among other things, provide for an undeveloped tax on all of the multifamily housing within me Community Facilities District For a definitive description of the Proposed Amendments, you are referred to the Resolution of Consideration itseg, a copy of which can be requested from Me City Clerk's Office at (8051781-7100 or viewed on the City's website at the following link: hbpy/opengm, slocityorg/ WebUnk/D-ct sewaspx?id-IM676&dbid�&repo=CityClerk. For the Proposed Amendments to take eNest, a public hearing must be held on the Proposed Amendments and the qualified electors within the Community Facilities District must approve the Proposed Amendments by a two-thirds Pate. As the Community Facilities District is uninhabited, or inhabited by fewer than 12 registered voters, me qualified electors are, pursuant to the Act, the owners of property within the Community Facilities District. The City's special tax cmnsuham has studied the Proposed Amendments and will provide, at or before the vine of me Public hearing, a report which will --main a brief description of the Proposed Amentlmems and a beef analysis ofthe impact Of Me Proposed Amendments on me probable special tax fo be paid by the owners of lots or parcels in Me Community Facilities District The report will be available for inspection bythe public and will become a partofthe record ofhe public hearing. Questions should be directed to Economic & Planning Systems, Inc, Special Tax Cpnsudam, at (9161649-8010. Dated: April 8, MI Teresa Pumngton, City Clerk City of San Luis Obispo April 8, 2021 .yln„n &"„ ,,J, NT.1,G \]n,111^NIIG 1111,ttAUSMF..C:P,H,: N ... ..I Prof N PA Department Name: Finance Cost Center: 2001 For Agenda of: April 20, 2021 Placement: Public Hearing Estimated Time: 15 minutes FROM: Brigitte Elke, Finance Director Prepared By: Esteban Cano-Gutierrez, Financial Analyst – Infrastructure Financing SUBJECT: RATE AND METHOD OF APPORTIONMENT AMENDMENT APPROVAL FOR CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) RECOMMENDATION Advance the Rate and Method of Apportionment (the “RMA”) amendment of City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “CFD”) by the following actions: 1. Adopt a Resolution Calling a Special Mailed-Ballot Election, related to change proceedings within City of San Luis Obispo Community Facilities District No. 2019-1 - San Luis Ranch (Attachment A); and 2. Adopt a Resolution of Change relating to City of San Luis Obispo Community Facilities District No. 2019-1 - San Luis Ranch if sufficient landowner support is received (Attachment B); and 3. Introduce an Ordinance to levy the Special Tax for the Fiscal Year 2021-2022 and following fiscal years solely within the boundaries of the San Luis Ranch CFD (Attachment C). DISCUSSION Background On March 16, 2021, the City Council adopted a Resolution of Consideration (Resolution No. 11233 - 2021 series) to amend the Rate and Method of Apportionment for City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch). The RMA needed to be updated to include: (1) addition of an undeveloped special tax on the property expected to be developed into for-sale efficiency units, (2) a leveling of the special tax for the multifamily residential units so that it is based on type, not square footage, and (3) a clarification to the treatment and assessment of any low-income units added to the CFD after the date of the RMA. Since the formation of the CFD in 2019, some permissible changes to the planned development have occurred. As a result, the developers requested the aforementioned amendments to the RMA to better reflect the planned development. Specifically, these changes to the development plan included all the multi-family units being a “for-sale” product within the high-density residential area that were initially expected to be maintained by the builder as units f or rent. Item 1 Packet Page 1 Additionally, the City Council had authorized the relocation of 26 affordable housing units from the multi-family site to the commercial site as part of a mixed-use project to be developed by People’s Self-Help Housing Corporation. The site planned for development into for-rent and 26 affordable housing units were previously excluded from the undeveloped special tax but can now be included with this change in development. The City’s Special Tax Consultant for the CFD has prepared an Amended Hearing Report (Attachment D) to explain the effect of the amendment to the RMA. Voter/Landowner Approval to amend the RMA The action before the City Council is to complete the process required to update the RMA. According to the Act, for the proposed amendments to the RMA to take effect, a public hearing must be held and the qualified electors within the CFD must approve the proposed amendments by a two-thirds vote. If fewer than 12 voters are located in the area, approval by the landowners is required. At this time, no residents are living within the proposed CFD area, therefore the election corresponds to the landowners within the CFD. During the meeting on April 20, 2020, the Mayor will conduct the process based on required order of procedures according to the Act. First, the City Council will hold a public hearing to inquire into the amendment of the RMA. Next, the City Council will seek approval of the property owners with the adoption of a Resolution calling a Special Mailed-Ballot Election. Giving that there are no property owners yet, the Act allows for ballots to be sent to the landowners ahead of the adoption of the Resolution. The landowners have therefore completed the ballots and return the results to the City Clerk on the date hereof. Following the reporting out of the results of the election by the City Clerk, the City Council may proceed with adopting a Resolution of Change to amend the RMA for the San Luis Ranch CFD, if two-thirds of the landowners effectively supported the amendment. Approval of Ordinance The City Council has previously adopted its Ordinance No. 1661 (2019 Series) on April 16, 2019. In connection with the amended RMA, the City will introduce a new Ordinance directing and effecting the levy of the special tax on the secured property tax roll of the County in accordance with the amended RMA. The City Council will either need to conduct or may waive the first reading. Next Steps in the Bond Issuance Process Once the amended RMA is approved and the Resolution adopted, the City Council can move forward with the issuance of infrastructure bonds for the CFD. The request to issue bonds is scheduled before the City Council on April 20, 2021, following the action within this report. At the May 4, 2021, Council meeting, the City Council will conduct the second reading and adopt the Ordinance levying the special tax. Item 1 Packet Page 2 Policy Context The approved San Luis Ranch Specific Plan and related entitlements are consistent with the City’s s adopted General Plan, and findings to that effect were made in both the original project approved in July 2017 as well as the amended project approval in August 2018. An evaluation of the project’s consistency with General Plan policies is discussed at length in Section 4.9 of the certified Final Environmental Impact Report. The Specific Plan requires that funding mechanisms be included to ensure that public infrastructure is coordinated with future development under the plan. The formation of a CFD was consistent with this requirement. A CFD, as enabled by the Community Facilities District Act of 1982, allows a local jurisdiction to levy a special tax within a specified area to pay for public services and/ or infrastructure needed within the area. Over the past three decades, CFDs have become a common mechanism for cities to fund services and finance development-related infrastructure, and the use of a CFD, in this case, is consistent with the City’s Economic Development Strategic Plan and the General Plan. The General Plan provides specific policies related to the funding of infrastructure noted below: 1.13.6. Required Plans: The City shall not allow the development of any newly annexed private land until the City has adopted a specific or development plan for land uses, open space protection, roads, utilities, the overall pattern of subdivision, and financing of public facilities for the area. 1.13.9. Costs of Growth: The City shall require the costs of public facilities and services needed for new development to be borne by the new development unless the community chooses to help pay the costs for a certain development to obtain community-wide benefits. The City shall consider a range of options for financing measures so that new development pays its fair share of costs of new services and facilities which are required to serve the project, and which are reasonably related to the new growth attributable to the development. The revisions recommended to the RMA are consistent with these General Plan policies and with the City’s Local Goals and Policies for Community Facilities Districts. Public Engagement The Planning Commission considered and provided input on the originally approved San Luis Ranch project on nine occasions from 2014 through 2017, before finally recommending approval in June 2017. As noted under “Previous Council or Advisory Body Action,” the approved project was considered in a variety of public workshops and hearings before many of the City’s advisory bodies from 2014 through project approval as amended in 2018. On February 19, 2019, the City Council held a public hearing regarding the potential formation of a CFD, after which it adopted a Resolution of Intention to form a CFD. Item 1 Packet Page 3 For the proposed amendments to take effect, the public hearing must be held and the qualified electors within the Community Facilities District must approve the proposed amendments by a two-thirds vote. As the Community Facilities District is uninhabited or inhabited by fewer than 12 registered voters, the qualified electors are, according to the Act, the owners of property within the CFD. CONCURRENCE The Community Development Department concurs with the recommendations contained within this report. ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended action in t his report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: Yes/No Budget Year: 2021 Funding Identified: Yes/No Fiscal Analysis: Funding Sources Current FY Cost Annualized On-going Cost Total Project Cost General Fund N/A State Federal Fees Other: Total There will be no fiscal impact related to the amendment. The RMA was drafted by a special tax consultant who, together with the City’s bond counsel and Municipal Advisor also engaged in this effort, will get paid from developer deposits and/or the special tax proceeds for the CFD. The City’s costs for establishing and administering the San Luis Ranch CFD and related efforts will also be reimbursed from bond proceeds until the special tax is assessed through the County tax roll. The financial analysis conducted for the bond issuance process has considered and budgeted these costs. Item 1 Packet Page 4 ALTERNATIVES 1.Do not adopt the Proposed Resolutions and do not conduct the first reading of the Ordinance. The City Council could choose not to adopt the proposed resolution, in which case the CFD process is not completed. In this case, the project will not move forward without the amendment to the Rate Method of Apportionment to increase the Special Tax assessment to, among other things, provide for an undeveloped tax on all of the planned multifamily housing within the Community Facilities District. This action would also impair the ability to build the Prado Road Interchange in the near future since that project depends in part on fees generated by the approved development. 2.Direct modifications and continue the Hearing to a Date Certain. The City Council may continue the hearing to a date certain if it feels additional technical information is needed to complete the CFD process. If additional information is needed, the direction should be provided to staff so that it can be presented on that date. Attachments: a - Draft Resolution - Calling a Special Mailed Ballot Election b - Draft Resolution of Change c - Draft Ordinance - Levy the Special Tax d - COUNCIL READING FILE - Amended Hearing Report Item 1 Packet Page 5 R _________ RESOLUTION NO. ___ (2021 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, CALLING A SPECIAL MAILED-BALLOT ELECTION RELATED TO CHANGE PROCEEDINGS WITHIN CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) WHEREAS, the City Council (the “City Council”) of the City of San Luis Obispo (the “City”) conducted proceedings under and pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended (being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California), and all laws amendatory thereof or supplemental thereto (the “Act”), (i) to form its Community Facilities District No. 2019-1 (San Luis Ranch) (the “Community Facilities District”), (ii) to authorize a special tax to finance certain public facilities, (iii) to authorize the issuance of debt to finance the facilities, and (iv) to establish the appropriations limit for the Community Facilities District, all as set forth in the City Council’s Resolution No. 10998 (2019 Series) (the “Resolution of Formation”) and Resolution No. 10999 (2019 Series) (the “Resolution Deeming it Necessary to Incur Bonded Indebtedness”), both adopted on April 2, 2019; and WHEREAS, on March 16, 2021, the City Council adopted its Resolution No. 11233 (2021 Series) (the “Resolution of Consideration”) in which it determined to consider replacing the Rate and Method of Apportionment set forth in Exhibit B to the Resolution of Formation with the Amended Rate and Method of Apportionment set forth in Exhibit A to the Resolution of Consideration (the “Proposed Amendments”); and WHEREAS, the Resolution of Consideration set a public hearing to be held on April 20, 2021; and WHEREAS, the Public Hearing has been held as scheduled and all persons interested were permitted to testify and to submit written protests to the Proposed Amendments; and WHEREAS, the City Council determined that there was no majority protest under Section 53337 of the Government Code of the State of California, and thus the City Council is permitted to continue with these proceedings; and WHEREAS, in order for the Proposed Amendments to be effective, they must be submitted to an election of the qualified electors of the Community Facilities District; and WHEREAS, a Certificate Re: Landowners (the “Certificate re: Landowners”) has been filed with the City Clerk (the “Clerk”) and submitted to the City Council, certifying that during the 90 days preceding the close of the Public Hearing on April 20, 2021, there were no persons registered to vote within the territory of the Community Facilities District; and Item 1 Packet Page 6 Resolution No. ______ (2021 Series) Page 2 R ______ WHEREAS, a Certificate of Clerk re: Receipt of Property Owner Waiver and Consent Forms, has been submitted by the Clerk, stating that each landowner, or an authorized representative of each landowner, has filed with the Clerk a properly executed Waiver and Consent (as defined below) in substantially the form attached hereto as Exhibit B, and by this reference incorporated herein. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo, as follows: Section 1. The above recitals are true and correct, and the City Council so finds and determines. Section 2. The City Council accepts the Certificate re: Landowners filed in these proceedings and finds, in accordance therewith, that during the 90 days just past, there were no registered voters residing within the boundaries of the Community Facilities District. Accordingly, under Section 53326(b) of the Government Code of the State of California, the qualified electors of the Community Facilities District for the proposed special election shall be the owners of land within the Community Facilities District. Section 3. The City Council further finds and determines that the owners of land within the Community Facilities District (the “Landowners”) are the landowners set forth in the attachment to the Certificate re: Landowners and that the attachment correctly sets forth the amount of property owned by each Landowner and the number of votes to which each Landowner is entitled pursuant to Section 53326(b), being the number of acres owned rounded up to the next whole acre. Section 4. The City Council hereby approves the form of Waiver and Consent Shortening Time Periods and Waiving Various Requirements for Conducting a Mailed-Ballot Election (the “Waiver and Consent”) by which the time limits and related requirements respecting preparation and distribution of election materials are waived, a form of which is attached hereto as Exhibit B. The City Council hereby finds that the rights, procedures, and time periods therein waived are solely for the protection of the qualified electors and may be waived by the qualified electors under Section 53326(a) and 53327(b) of the Act and under other provisions of law dealing with waiver generally, and that the Waiver and Consent constitutes a full and knowing waiver, by any qualified elector who has executed the form, of those rights, procedures, and time periods. Section 5. The City Council further finds and determines, based on a Certificate of Clerk re: Receipt of Property Owner Waiver and Consent Forms provided this date by the Clerk that each Landowner, or an authorized representative of each Landowner, has filed with the Clerk a properly executed Waiver and Consent in substantially the form of Exhibit B hereto. The City Council therefore is establishing the procedures and time periods for this special mailed-ballot election without regard to statutory schedules. Item 1 Packet Page 7 Resolution No. ______ (2021 Series) Page 3 R ______ Section 6. Pursuant to Sections 53338(a) and 53326 of the Government Code of the State of California, the City Council hereby calls an election, to be held and conducted upon adoption of this Resolution, and sets April 20, 2021, as the election date. Pursuant to Section 53326 of the Government Code, the election shall be conducted by mailed ballot; provided that personal service of the respective ballots to authorized representatives of each Landowner is permitted under the terms of the Waiver and Consent forms on file with the Clerk and shall therefore be permitted. The Clerk is directed to either mail or make personal service of the ballots, in the form of the attached Exhibit A, to each Landowner or, if one has been appointed pursuant to a Waiver and Consent, to the Landowner’s authorized representative. Section 7. The proposition to be submitted to the qualified electors of the Community Facilities District shall be as set forth in the form of special election ballot attached hereto as Exhibit A. Section 8. The Clerk is hereby designated as the official to conduct the special mailed-ballot election pursuant to the Act and California Elections Code Sections 307 and 320 and the following provisions: a) The special election shall be held and conducted, and the votes canvassed and the returns made, and the results determined, as provided herein; and in all particulars not prescribed by this Resolution the special election shall be held and conducted and the votes received and canvassed in the manner provided by law for the holding of special elections consistent with the Act. b) All Landowners within the Community Facilities District as of the close of the Public Hearing shall be qualified to vote upon the proposition to be submitted at the special election. c) The special election shall be conducted as a mailed-ballot election, in accordance with the provisions of the Act and the prior proceedings of the City taken thereunder, and there shall be no polling places for the special election. All ballots shall be delivered or mailed by the Clerk to the Landowners, and all voted ballots are required to be received by the Clerk not later than 6:00 p.m. on the date of the election in order to be counted. However, if at any time the Clerk determines that all votes have been cast, the Clerk shall immediately declare the election closed. d) The Clerk shall commence the canvass of the returns of the special election and report the returns to the City Council no later than the City Council meeting of April 20, 2021. e) The City Council may thereupon declare the results of the special election and shall cause to be spread upon its minutes a statement of the results of the special election as ascertained by the canvass. Item 1 Packet Page 8 Resolution No. ______ (2021 Series) Page 4 R ______ Section 9. This Resolution shall take effect immediately upon its adoption. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2021. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on _____________________________. ____________________________________ Teresa Purrington City Clerk Item 1 Packet Page 9 Resolution No. ______ (2021 Series) Page 5 4124-5287-4283.1 EXHIBIT A CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) (CHANGE PROCEEDINGS) SPECIAL ELECTION BALLOT (Mailed-Ballot Election) This ballot is for the use of ____________________________________________, landowners owning land within City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch). According to the provisions of the Mello-Roos Community Facilities Act of 1982 and the resolutions of the City Council of the City of San Luis Obispo, the above-named landowners are entitled to cast _________ votes on this ballot. In order to be counted, this ballot must be certified below and be returned, either by mail or in person, before 6:00 p.m. on April 20, 2021, to: Teresa Purrington, City Clerk City of San Luis Obispo City Council 990 Palm Street San Luis Obispo, California 93401 Mailing by that date will not be sufficient. The ballot must be physically received by the City Clerk prior to the deadline in order to be counted. AN “X” OR OTHER MARK WILL CAST ALL VOTES ASSIGNED TO THIS BALLOT, OR THE VOTER MAY WRITE NUMBERS IN THE SPACES PROVIDED. BALLOT MEASURE Shall the authority previously conferred upon the City Council (the “City Council”) of the City of San Luis Obispo by and through its City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) be changed in accordance with Resolution No. [____] (2021 Series) adopted by the City Council on March 16, 2021, to modify the special tax to be levied therein? Number of votes YES Number of votes NO Item 1 Packet Page 10 4124-5287-4283.1 Certification The undersigned is or are the authorized representative(s) of the above-named landowner and is the person legally authorized and entitled to cast this ballot on behalf of the above-named landowner. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct and that this declaration is executed as of April 20, 2021. [LANDOWNER] By: Name: Title: Item 1 Packet Page 11 4124-5287-4283.1 EXHIBIT B WAIVER AND CONSENT SHORTENING TIME PERIODS AND WAIVING VARIOUS REQUIREMENTS FOR CONDUCTING A MAILED-BALLOT ELECTION CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) [LANDOWNER] (the “Owner”) is the owner of the real property listed below by Assessor’s Parcel Number (“APN”), which comprises [all][certain] of the land within the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “Community Facilities District”). The APNs are: The Owner understands that a special mailed-ballot, landowner election will be held to determine whether the authority conferred upon the City Council by and through the Community Facilities District will be changed all as set forth in Resolution No. [____] adopted by the City Council (the “City Council”) of the City of San Luis Obispo on March 16, 2021 (the Resolution of Consideration). The Owner requests that the election be conducted at the earliest possible date. The Owner is the entity legally entitled and authorized to cast the ballot attributable to the above-referenced parcels in the landowner, mailed-ballot election. The Owner hereby waives any and all minimum time periods and requirements pertaining to the conduct of the election pursuant to Government Code Section 53326(a). The Owner hereby waives the preparation and distribution of an impartial analysis of the ballot measure, as well as arguments in favor and against, under the authority of Government Code Section 53327(b). The Owner hereby waives the requirement to publish notice of the election under Government Code Section 53352. The Owner hereby waives the requirements regarding the time to mail ballots to the qualified electors under Elections Code Section 4101, and agrees that either mailed service or personal service of the ballot will be sufficient. The Owner hereby waives the requirements regarding identification envelopes for the return of mailed ballots contained in Government Code Section 53327.5. The Owner hereby waives any and all defects in notice or procedure in the conduct of the election, whether known or unknown (except the right to vote and to have the ballots fairly counted), Item 1 Packet Page 12 Resolution No. ______ (2021 Series) Page 8 4124-5287-4283.1 and states that the election is being expedited, pursuant to this Waiver and Consent, at the particular instance and request of the Owner. The Owner hereby consents to the levy and collection of the special tax on the above- referenced parcels in accordance with the amended rate and method of apportionment attached as an exhibit to the Resolution of Consideration of the Community Facilities District and hereby waives any and all rights to challenge the inclusion of the above-referenced parcels in the Community Facilities District and any and all other proceedings related thereto. Finally, the Owner will execute the ballot and cast the votes assigned to the above-listed property. The undersigned declares under penalty of perjury under the laws of the State of California that such person is properly authorized to execute this Waiver and Consent and to bind the Owner thereby, and that the statements contained herein are true and correct and that this Waiver and Consent is signed by the undersigned as of the date set forth below. Date: April 20, 2021 [LANDOWNER SIGNATURE BLOCK] [SIGNATURE TO BE NOTARIZED] Item 1 Packet Page 13 R _____ RESOLUTION NO. _______ (2021 SERIES) A RESOLUTION OF CHANGE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, RELATING TO CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) WHEREAS, on March 16, 2021, the City Council adopted its Resolution No. 11233 (2021 Series) (the “Resolution of Consideration”) in which it determined to consider replacing the Rate and Method of Apportionment set forth in Exhibit B to the Resolution of Formation with the Amended Rate and Method of Apportionment set forth in Exhibit A to the Resolution of Consideration (the “Proposed Amendments”); and WHEREAS, pursuant to the Resolution of Consideration, City staff was directed to engage a special tax consultant to study, or cause to be studied, the Proposed Amendments and, at or before said public hearing, file a report with the City Council containing a brief description of the Proposed Amendments and a brief analysis of the impact of the Proposed Amendments on the probable special tax to be paid by the owners of lots or parcels in the Commu nity Facilities District; and WHEREAS, said report was so filed with the City Council and made a part of the record of said public hearing; and WHEREAS, in order for the Proposed Amendments to be effective, a two-thirds approving vote by the qualified electors within the Community Facilities District is required; and WHEREAS, a special mailed-ballot election has been conducted within the Community Facilities District pursuant to Resolution No. [_____] (2021 Series), adopted by the City Council on April 20, 2021, to which reference is made for further particulars; and WHEREAS, a Certificate of the City Clerk (the “Clerk”) Re Election Results (the “Certificate of Election Results”) has been filed with the City Council; and WHEREAS, the City Council has received, reviewed, and hereby accepts the Certificate of Election Results; and NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo, as follows: Section 1. The above recitals are true and correct, and the City Council so finds and determines. Section 2. The City Council hereby finds and determines and declares that the ballot measure submitted to the qualified electors of the Community Facilities District has been passed and approved by those qualified electors in accordance with Sections 53338 of the Government Code of the State of California. Item 1 Packet Page 14 Resolution No. _______ (2021 Series) Page 2 R _____ Section 3. The City Council hereby finds and determines and declares that the authority conferred upon it by the Community Facilities District has been changed in accordance with the Proposed Amendments as set forth in the Resolution of Consideration. Section 4. The City Council hereby authorizes and directs the Clerk to cause an Amended Notice of Special Tax Lien to be prepared and to be recorded with the County Recorder of the County of San Luis Obispo (the “County Recorder”) in accordance with the provisions of Section 3117.5 of the Streets and Highways Code of the State of California and Section 53338(c) of the Government Code of the State of California. The Amended Notice of Special Tax Lien shall include, as an attachment, Exhibit A to the Resolution of Consideration and be recorded in the County Recorder’s office within fifteen days of the date of adoption of this Resolution. Section 5. This Resolution shall take effect immediately upon its adoption. Upon motion of Council Member ____________, seconded by Council Member ____________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this ____ day of _______ 2021. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________ Teresa Purrington, City Clerk APPROVED AS TO FORM: ____________________________ J. Christine Dietrick, City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ____________________________. ____________________________________ Teresa Purrington, City Clerk Item 1 Packet Page 15 O ____ ORDINANCE NO. ______ 2021 SERIES AN UNCODIFIED ORDINANCE OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, LEVYING A SPECIAL TAX FOR THE FISCAL YEAR 2021-2022 AND FOLLOWING FISCAL YEARS SOLELY WITHIN AND RELATING TO THE CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) WHEREAS, the City Council of San Luis Obispo (the Council) conducted proceedings under and pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended (Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California), and all laws amendatory thereof or supplemental thereto to form its Community Facilities District No. 2019-1 San Luis Ranch and authorized a special tax to finance certain public facilities; and WHEREAS, the Council also authorized the issuance of debt to finance the facilities, and established the appropriations limit for the Community Facilities District, all as set forth in Resolution No. 10998 (2019 Series) and Resolution No. 10999 (2019 Series) adopted on April 2, 2019; and WHEREAS, the Council adopted Ordinance No. 1661 (2019 Series) on April 16, 2019, to approve the levy of a Special Tax in connection with San Luis Ranch Communities Facilities District and its approved Rate and Method of Apportionment; and WHEREAS, on March 16, 2021, the Council adopted its Resolution No. 11233 (2021 series) (the “Resolution of Consideration”) in which it determined to consider updating the Rate and Method of Apportionment due to substantial changes in the development; and WHEREAS, on April 20, 2021 the City Council adopted a Resolution Calling a Special Mailed-Ballot Election, related to change proceedings within the San Luis Ranch Community Facilities District; and WHEREAS, the landowners within the San Luis Ranch Community Facilities District have completed the ballots and return the results to the City Clerk with at least two-thirds approving the amendment; and WHEREAS, in connection with the ballot results, the City Council has therefore adopted a Resolution of Change on April 20, 2021 related to the San Luis Ranch Community Facilities District Rate and Method of Apportionment; and WHEREAS, the action does not constitute a “Project” under California Environmental Quality Act Guidelines Sec. 15378 and therefore they are not applicable. THEREFORE, IT BE ORDAINED by the City Council of the City of San Luis Obispo does as follows: Item 1 Packet Page 16 Resolution No. ________ (2021 Series) Page 2 O ______ SECTION 1. Pursuant to Government Code section 53340, Resolution No. 10998 (2019 Series), adopted by the City Council (the “City Council”) of the City of San Luis Obispo (the “City”) on April 2, 2019 (the “Resolution of Formation”), Resolution No. 11233 (2021 Series), adopted by the City Council on March 16, 2021 (the “Resolution of Consideration”) and Resolution No. [____] (2021 Series) adopted by the City Council on April 20, 2021 (the “Resolution of Change” and, collectively with the Resolution of Formation and the Resolution of Consideration, the “Resolutions”), and in accordance with the Amended and Restated Rate and Method of Apportionment of Special Tax (the “RMA”) set forth in Exhibit A to the Resolution of Consideration, relating to the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “Community Facilities District”), a special tax is hereby levied on the Community Facilities District for the 2021-2022 fiscal year and for all subsequent fiscal years in the amount of the maximum special tax authorized under the Resolutions and the RMA, provided that this amount may be adjusted annually, subject to the maximum authorized special tax under the Resolutions and the RMA. SECTION 2. The Finance Director of the City of San Luis Obispo or designee thereof (the “CFD Administrator”) or such other officer or staff member succeeding to the duties of the CFD Administrator with respect to the Community Facilities District, with the aid of the appropriate officers and agents of the City and without further action of the City Council, is authorized and directed (a) to determine each year the appropriate amount of the special tax (pursuant to and as provided in the Resolutions and the RMA), (b) to prepare the annual special tax roll in accordance with the Resolutions and the RMA and (c) to provide all necessary and appropriate information to the County of San Luis Obispo (the “County”) Tax Collector in proper form, and in proper time, necessary to effect the correct and timely billing and collection of the special tax on the secured property roll of the County; provided, that as provided in Section 53340 of the California Government Code, the Resolutions and the RMA, the City Council has reserved the right to utilize any other lawful means of billing, collecting, and enforcing the special tax, including direct billing, supplemental billing, and, when lawfully available, judicial foreclosure of the special tax lien. SECTION 3. The appropriate officers and agents of the City are authorized to make adjustments to the Special Tax roll prior to the final posting of each Special Tax to the County tax roll each fiscal year, as may be necessary to achieve a correct match of each Special Tax levy with the assessor’s parcel numbers finally utilized by the County in sending out property tax bills. SECTION 4. The City agrees that, in the event either Special Tax is collected on the secured tax roll of the County, the County may add its reasonable and agreed charges for collecting the related Special Tax from the amounts collected, prior to remitting the related Special Tax collections to the City. SECTION 5. Taxpayers who have requested changes or corrections of the Special Tax pursuant to Section 8 of the RMA and who are not satisfied with the decision of the CFD Administrator (whether the CFD Administrator disagrees with the taxpayer or concludes that the City is not authorized to consider the change requested), may appeal to the City Council. The appeal must be in writing and fully explain the grounds of appeal and must be based solely on the correction of mistakes in the levy based upon the status of the property, and no other appeals will be allowed. The CFD Administrator shall schedule the appeal for consideration within a reasonable time at a City Council meeting. Item 1 Packet Page 17 Resolution No. ________ (2021 Series) Page 3 O ______ SECTION 6. If, for any reason, any portion of this ordinance is found to be invalid, or if the special tax is found inapplicable to any particular parcel by a court of competent jurisdiction, the balance of this ordinance, and the application of the special tax to the remaining parcels shall not be affected. SECTION 7. This ordinance shall take effect and be in force immediately as a tax measure; and before the expiration of twenty (20) days after its passage the same shall be published in summary, with the names of the members voting for and against the same, at least once in a newspaper of general circulation published and circulated in the Community Facilities District. SECTION 8. Ordinance No. 1661 (2019 Series) adopted by the City Council on April 16, 2019, is hereby superseded to the extent it is inconsistent with this ordinance. INTRODUCED on the 20th day of April 2021, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the ___ day of _____ 2021, on the following vote: AYES: NOES: ABSENT: Mayor Heidi Harmon ATTEST: Teresa Purrington City Clerk APPROVED AS TO FORM J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ____________________________. ____________________________________ Teresa Purrington City Clerk Item 1 Packet Page 18 Department Name: Finance Cost Center: 2001 For Agenda of: April 20, 2021 Placement: Business Item Estimated Time: 15 minutes FROM: Brigitte Elke, Finance Director Prepared By: Esteban Cano-Gutierrez, Financial Analyst – Infrastructure Financing SUBJECT: AUTHORIZE THE ISSUANCE OF THE SAN LUIS RANCH CFD SPECIAL TAX BONDS, IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $20,500,000, AUTHORIZING THE EXECUTION AND DELIVERY OF AN INDENTURE, A BOND PURCHASE AGREEMENT AND A CONTINUING DISCLOSURE CERTIFICATE, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION THEREWITH AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS. RECOMMENDATION Approve the bond issuance for the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (CFD) by taking the following actions: 1. Adopt a Resolution authorizing the issuance of the San Luis Ranch CFD Special Tax Bonds, in an aggregate principal amount of not to exceed $20,500,000 (Attachment A), authorizing the execution and delivery of an Indenture, a Bond Purchase Agreement and a Continuing Disclosure Certificate, authorizing the distribution of an Official Statement in connection therewith and authorizing the execution of necessary documents and certificates and related actions. DISCUSSION Background On April 20, 2021, the City Council held a special election to approve the updated Rate and Method of Apportionment (RMA) for the CFD. The CFD was previously authorized to incur bonded indebtedness in the aggregate principal amount of not to exceed $25,000,000 to be secured by the levy of a Special Tax on taxable property within the CFD. Based on the adoption of the amended and restated RMA, the City Council can now take the necessary steps to issue bonds for the CFD the aggregate principal amount of the bonds cannot exceed $20,500,000. Item 2 Packet Page 19 Analysis The CFD will issue its Special Tax Bonds, Series 2021 (Bonds), for the purpose of financing certain public capital infrastructure necessary for the development of the San Luis Ranch project. The proceeds of the will be used to finance the acquisition and construction of certain public facilities, fund a debt service reserve fund, fund capitalized interest, and pay certain costs of issuance of the Bonds. By adopting the Proposed Resolution, the City Council is taking the following actions in connection with the Bonds: 1. Authorizing the issuance of an aggregate principal amount of not to exceed $20,500,000 in bonds. 2. Approving the execution and delivery of an Indenture (Attachment B) 3. Approving the execution and delivery of a Bond Purchase Agreement (Attachment C) 4. Approving the execution and delivery of a Continuing Disclosure Certificate (Attachment D and E) 5. Approving the execution and delivery of a Preliminary Official Statement and authorizing the preparation of a final Official Statement (Attachment F) 6. Authorizing the officers of the City to execute any and all documents and instruments, for and on behalf of the City and/or the CFD, to carry out the issuance of the Bonds. Next Steps Once all necessary documents are approved by the Council, the Official Statement for the bond issuance will be release and staff expect the bonds to be sold by the week of May 3rd. The City has closely coordinated with its bond counsel, its municipal advisor, special tax consultant, the selected underwriter (all parties), as well as the developer for a successful bond issuance that took into consideration an appraisal and absorption study for the CFD. Special Tax Levy The City has already established the necessary accounts with the County of San Luis Obispo Tax Collector to administer the special tax within the San Luis Ranch CFD. All necessary documentation and information will be provided to the County of San Luis Obispo (the “County”) Tax Collector in proper form and required timelines to bill and collect the special tax on the secured property tax roll of the County. This does not exclude the City’s right to utilize any other lawful means of billing, collecting, and enforcing the special tax, including direct billing, supplemental billing, and, when lawfully available, judicial foreclosure of the special tax lien. In connection with the amendment of the RMA, the City will adopt an amendment to its Ordinance No. ___ to authorize the levy of the Special Tax in FY 2021-22 based on such amended RMA and in all future fiscal years Policy Context The approved San Luis Ranch Specific Plan and related entitlements are consistent with the City’s s adopted General Plan, and findings to that effect were made in both the original project approved in July 2017 as well as the amended project approval in August 2018. An evaluation of the project’s consistency with General Plan policies is discussed at length in Section 4.9 of the certified Final Environmental Impact Report. Item 2 Packet Page 20 The Specific Plan requires that funding mechanisms be included to ensure that public infrastructure is coordinated with future development under the plan. The formation of a CFD was consistent with this requirement. A CFD, as enabled by the Community Facilities District Act of 1982, allows a local jurisdiction to levy a special tax within a specified area to pay for public services and/ or infrastructure needed within the area. Over the past three decades, CFDs have become a common mechanism for cities to fund services and finance development-related infrastructure, and the use of a CFD, in this case, is consistent with the City’s Economic Development Strategic Plan and the General Plan. The General Plan provides specific policies related to the funding of infrastructure noted below: 1.13.6. Required Plans: The City shall not allow the development of any newly annexed private land until the City has adopted a specific or development plan for land uses, open space protection, roads, utilities, the overall pattern of subdivision, and financing of public facilities for the area. 1.13.9. Costs of Growth: The City shall require the costs of public facilities and services needed for new development to be borne by the new development unless the community chooses to help pay the costs for a certain development to obtain community-wide benefits. The City shall consider a range of options for financing measures so that new development pays its fair share of costs of new services and facilities which are required to serve the project, and which are reasonably related to the new growth attributable to the development. The Special Tax Levy for San Luis Ranch CFD, the bond issuance, the execution of the Indenture, the Bond Purchase Agreement, and any other related documentation to complete the bond issuance process are consistent with these General Plan policies. The issuance of the Bonds is consistent with the City’s Local Goals and Policies for Mello -Roos Community Facilities Districts. Public Engagement The Planning Commission considered and provided input on the originally approved San Luis Ranch project on nine occasions from 2014 through 2017, before finally recommending approval in June 2017. As noted under “Previous Council or Advisory Body Action,” the approved project was considered in a variety of public workshops and hearings before many of the City’s advisory bodies from 2014 through project approval as amended in 2018. On February 19, 2019, the City Council held a public hearing regarding the potential formation of a CFD, after which it adopted a Resolution of Intention to form a CFD. On March 16, 2021, a Resolution of Consideration was adopted to authorize the amendment of the RMA, as part of the process, it is necessary to conduct a Public Hearing on the April 20, 2021 Council Meeting. Also, the approval of the amendment is conditioned by a two-thirds vote of the San Luis Ranch registered voters or landowners. The results are going to be reported at the April 20, 2021 Council Meeting. Item 2 Packet Page 21 CONCURRENCE The Community Development Department concurs with the recommendations contained within this report. ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “ Project” under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: Yes/No Budget Year: 2021 Funding Identified: Yes/No Fiscal Analysis: Funding Sources Current FY Cost Annualized On-going Cost Total Project Cost General Fund N/A State Federal Fees Other: Total There will be no fiscal impact related to the bond issuance. The different necessary studies and documents for the process were made by a consultant that will get paid f rom the special tax proceeds for the CFD, as well as the City’s costs involved in establishing and administering the San Luis Ranch CFD. The financial analysis conducted for the bond issuance process has considered and budgeted these costs. ALTERNATIVES 1. Do not adopt the Proposed Resolution. The City Council could choose not to adopt the proposed resolution, in which case the bonds will not be issued. In this case, the project will not move forward without the bonded debt that is required to provide for necessary infrastructure and public improvements, such as the Prado Road Interchange, to mitigate the development impact and increase the quality of life for San Luis Obispo residents. 2. Direct modifications and continue the approval of the Proposed Resolutio n to a Date Certain. If additional information is needed, the direction should be provided to staff so that it can be presented on that date. Item 2 Packet Page 22 Attachments: a - Draft Resolution b - COUNCIL READING FILE - Indenture Series 2021 4131-8415-2872 3 c - COUNCIL READING FILE - Bond Purchase Agreement d - Continuing Disclosure Certificate Series 2021 4133-5720-9899 2 e - Continuing Disclosure Certificate Series 2021 4124-9554-2571 2 f - COUNCIL READING FILE - Preliminary Official Statement Item 2 Packet Page 23 R _____ RESOLUTION NO. ___ 2021 SERIES A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AUTHORIZING THE ISSUANCE OF CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) SPECIAL TAX BONDS, SERIES 2021, IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $20,500,000 AUTHORIZING THE EXECUTION AND DELIVERY OF AN INDENTURE, A BOND PURCHASE AGREEMENT AND A CONTINUING DISCLOSURE CERTIFICATE, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION THEREWITH AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS WHEREAS, the City Council (the “City Council”) of the City of San Luis Obispo (the “City”) has formed the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “Community Facilities District”) under the provisions of the Mello-Roos Community Facilities Act of 1982 (the “Act”); and WHEREAS, the Community Facilities District is authorized under the Act to levy special taxes (the “Special Taxes”) to pay for the costs of certain public facilities (the “Facilities”) necessary to mitigate the impact of development within the Community Facilities District particularly described in the City Council’s Resolution No. 10998 (2019 Series) adopted April 2, 2019 and to issue bonds payable from the Special Taxes; and WHEREAS, in order to provide funds to finance certain of the Facilities, the Community Facilities District proposes to issue its City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Special Tax Bonds, Series 2021 (the “Series 2021 Bonds”), in the aggregate principal amount of not to exceed $20,500,000; and WHEREAS, in order to provide for the authentication and delivery of the Series 2021 Bonds, to establish and declare the terms and conditions upon which the Series 2021 Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, the Community Facilities District proposes to enter into an Indenture with U.S. Bank National Association, as trustee (the “Trustee”) (such Indenture, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Indenture”); and WHEREAS, Piper Sandler & Co. (the “Underwriter”), has presented the Community Facilities District with a proposal, in the form of a Bond Purchase Agreement, to purchase the Series 2021 Bonds from the Community Facilities District (such Bond Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Purchase Agreement”); and Item 2 Packet Page 24 Resolution No. _____ (2021 Series) Page 2 R _____ WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”) requires that, in order to be able to purchase or sell the Series 2021 Bonds, the underwriter thereof must have reasonably determined that the Community Facilities District has, or one or more appropriate obligated persons have, undertaken in a written agreement or contract for the benefit of the holders of the Series 2021 Bonds to provide disclosure of certain financial information and certain listed events on an ongoing basis; and WHEREAS, in order to cause such requirement to be satisfied, the Community Facilities District desires to enter into a Continuing Disclosure Certificate with U.S. Bank National Association in its capacity as trustee and in its capacity as dissemination agent thereunder (such Continuing Disclosure Certificate, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Continuing Disclosure Certificate”); and WHEREAS, a form of the Preliminary Official Statement to be distributed in connection with the public offering of the Series 2021 Bonds has been prepared (such Preliminary Official Statement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Preliminary Official Statement”); and WHEREAS, there have been prepared and submitted to this meeting forms of: a) the Indenture; b) the Purchase Agreement; c) the Continuing Disclosure Certificate; d) the Preliminary Official Statement; WHEREAS, Integra Realty Resources has prepared and provided to the Community Facilities District an appraisal report (the “Appraisal”), providing an opinion of value of the property in the Community Facilities District as of November 29, 2020, which has been submitted to this meeting in draft form and which will be updated prior to distribution of the Preliminary Official Statement; and WHEREAS, Section 5852.1 of the California Government Code (the “Government Code”) requires that the City Council obtain from an underwriter, financial advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the issuance of the Series 2021 Bonds, good faith estimates of (a) the true interest cost of the Series 2021 Bonds, (b) the sum of all fees and charges paid to third parties with respect to the Series 2021 Bonds, (c) the amount of proceeds of the Series 2021 Bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the Series 2021 Bonds, and (d) the sum total of all debt service payments on the Series 2021 Bonds calculated to the final maturity of the Series 2021 Bonds plus the fees and charges paid to third parties not paid with the proceeds of the Series 2021 Bonds; and Item 2 Packet Page 25 Resolution No. _____ (2021 Series) Page 3 R _____ WHEREAS, in compliance with Section 5852.1 of the Government Code, the City Council has obtained from PFM Financial Advisors LLC, as the Community Facilities District’s municipal advisor (the “Municipal Advisor”), the required good faith estimates, which the Municipal Advisor has prepared in consultation with the Underwriter, and such estimates are disclosed and set forth in Exhibit A attached hereto; and WHEREAS, the Community Facilities District desires to proceed to issue and sell the Series 2021 Bonds and to authorize the execution of such documents and the performance of such acts as may be necessary or desirable to effect the offering, sale and issuance of the Series 2021 Bonds; and WHEREAS, the City Council is the legislative body of the Community Facilities District. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo, as follows: SECTION 1. The foregoing recitals are true and correct, and the City Council so finds and determines. SECTION 2. Subject to the provisions of Section 3 hereof, the issuance of the Series 2021 Bonds, in an aggregate principal amount of not to exceed $20,500,000, on the terms and conditions set forth in, and subject to the limitations specified in, the Indenture, be and the same is hereby authorized and approved. The Series 2021 Bonds shall be dated, shall bear interest at the rates, shall mature on the dates, shall be subject to call and redemption, shall be issued in the form and shall be as otherwise provided in the Indenture, as the same shall be completed as provided in this Resolution. SECTION 3. The City reasonably expects that debt obligations in an amount not to exceed $25,000,000 will be issued and that certain of the proceeds of such debt obligations will be used to reimburse the City for certain expenditures in connection with the Facilities. This resolution shall constitute a statement of official intent for purposes of Treasury Regulations Section 1.150- 2. This declaration does not bind the City to make any expenditure, incur any indebtedness, or proceed with constructing the Facilities. SECTION 4. The Indenture, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. Each of the Mayor of the City, and such other member of the City Council as the Mayor may designate, the City Manager of the City, the Finance Director of the City and such other officer or employee of the City as the City Manager may designate (the “Authorized Officers”) is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities Distric t, to execute and deliver the Indenture in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Indenture by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not authorize an aggregate principal amount of Series 2021 Bonds in excess of $20,500,000, shall not result in a final maturity date of the Series 2021 Bonds later than September 1, 2052, and shall not result in a true interest cost for the Series 2021 Bonds in excess of 5.5%. Item 2 Packet Page 26 Resolution No. _____ (2021 Series) Page 4 R _____ SECTION 5. The Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute and deliver the Purchase Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not result in an aggregate underwriter’s discount (not including any original issue discount) from the principal amount of the Series 2021 Bonds in excess of 1.5% of the aggregate principal amount of the Series 2021 Bonds. The City Council hereby finds and determines that the sale of the Series 2021 Bonds at negotiated sale as contemplated by the Purchase Agreement will result in a lower overall cost. SECTION 6. The Continuing Disclosure Certificate, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute and deliver the Continuing Disclosure Certificate in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Continuing Disclosure Certificate by such Authorized Officer. SECTION 7. The Preliminary Official Statement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, be and the same is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Series 2021 Bonds is hereby authorized and approved. Each of the Authorized Officers is hereby authorized to certify on behalf of the Community Facilities District that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12 (except for the omission of certain final pricing, rating, and related information as permitted by Rule 15c2- 12). SECTION 8. The preparation and delivery of a final Official Statement (the “Official Statement”), and its use in connection with the offering and sale of the Series 2021 Bonds, be and the same is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement, with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute the final Official Statement and any amendment or supplement thereto. Item 2 Packet Page 27 Resolution No. _____ (2021 Series) Page 5 R _____ SECTION 9. Based upon the property values within the Community Facilities District reported in the Appraisal and the value-to-lien information set forth in the Preliminary Official Statement, the City Council, for purposes of Section 53345.8 of the Act, hereby finds and determines that the value of the real property that would be subject to the Special Tax to pay debt service on the Series 2021 Bonds will be at least three times the principal amount of the Series 2021 Bonds to be sold and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act on property within the Community Facilities District or a special assessment levied on property within the Community Facilities District. SECTION 10. The Authorized Officers and the officers and employees of the City are, and each of them is, hereby authorized and directed, for and in the name of the Community Facilities District to do any and all things and to execute and deliver any and all documents which they or any of them deem necessary or advisable in order to consummate the transactions contemplated by this Resolution and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution. Item 2 Packet Page 28 Resolution No. _____ (2021 Series) Page 6 R _____ SECTION 11. All actions heretofore taken by the officers and employees of the City with respect to the issuance and sale of the Series 2021 Bonds, or in connection with or related to any of the agreements or documents referred to herein, are hereby approved, confirmed, and ratified. SECTION 12. This Resolution shall take effect immediately upon its adoption. Upon motion of Council Member ____________, seconded by Council Member ____________, and on the following roll call vote: AYES: NOES: RECUSED: The foregoing resolution was adopted this ____ day of __________ 2021. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ____________________________. ____________________________________ Teresa Purrington City Clerk Item 2 Packet Page 29 Resolution No. _____ (2021 Series) Page 1 R _____ EXHIBIT A GOOD FAITH ESTIMATES The good faith estimates set forth herein are provided with respect to the Series 2021 Bonds in accordance with Section 5852.1 of the Government Code. Such good faith estimates have been provided to the Community Facilities District by the Municipal Advisor, which the Municipal Advisor has prepared in consultation with the Underwriter. Principal Amount. The Municipal Advisor has informed the Community Facilities District that, based on the Community Facilities District’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Series 2021 Bonds to be issued and sold is $18,370,000 (the “Estimated Principal Amount”), which excludes approximately $630,000 of net premium estimated to be generated based on current market conditions. Net premium is generated when, on a net aggregate basis for a single issuance of bonds, the price paid for such bonds is higher than the face value of such bonds. The Estimated Principal Amount plus the net premium represent the total estimated proceeds available in the aggregate amount of $19,000,000. True Interest Cost of the Series 2021 Bonds. The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2021 Bonds is issued and sold, and based on market interest r ates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Series 2021 Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Series 2021 Bonds, is 3.85%. Finance Charge of the Series 2021 Bonds. The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2021 Bonds is issued and sold and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Series 2021 Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Series 2021 Bonds), is $725,000. Amount of Proceeds to be Received. The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2021 Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the Community Facilities District for sale of the Series 2021 Bonds, less the finance charge of the Series 2021 Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Series 2021 Bonds, is $16,000,000. Total Payment Amount. The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2021 Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate , its good faith estimate of the total payment amount, which means the sum total of all payments the Community Facilities District will make to pay debt service on the Series 2021 Bonds, plus the finance charge for the Series 2021 Bonds, as described above, not paid with the proceeds of the Series 2021 Bonds, calculated to the final maturity of the Series 2021 Bonds, is $33,000,000, which excludes any reserves or capitalized interest paid or funded with proceeds of the Series 2021 Bonds (which may offset such total payment amount). Item 2 Packet Page 30 Resolution No. _____ (2021 Series) Page 2 R _____ The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing at the time of preparation of such estimates. The actual principal amount of the Series 2021 Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Series 2021 Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Series 2021 Bonds issued and sold being different from the Estimated Principal Amount, (c) the actual amortization of the Series 2021 Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Series 2021 Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the Community Facilities District’s financing plan, or a combination of such factors. The actual date of sale of the Series 2021 Bonds and the actual principal amount of Series 2021 Bonds issued and sold will be determined by the Community Facilities District based on the timing of the need for proceeds of the Series 2021 Bonds and other factors. The actual interest rates borne by the Series 2021 Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Series 2021 Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the Community Facilities District. Item 2 Packet Page 31 CITY CLERK’S CERTIFICATE I, _________________________, duly appointed and qualified City Clerk of the City of San Luis Obispo (the “City”), certify that attached is a full, true, and correct copy of Resolution No. _______, adopted April 20, 2021, during a meeting of the City Council of the City. Such meeting was duly and legally held at the regular meeting place of the City Council. All of the members of said council had due notice of such meeting and a majority thereof was present at such meeting. I have carefully compared the same with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of such resolution adopted at said meeting and entered in said minutes. Said resolution has not been amended, modified, or rescinded since the date of its adoption, and the same is now in full force and effect. Dated: __________________ By: Teresa Purrington, City Clerk Item 2 Packet Page 32 4133-5720-9899.2 CONTINUING DISCLOSURE CERTIFICATE - DEVELOPER This Continuing Disclosure Certificate – Developer (the “Disclosure Certificate”) dated as of [____________], 2021, is executed and delivered by [MI San Luis Ranch, LLC][Presidio WH SLR 80 Towns, LLC][Presidio MI SLR 96, LLC][ Presidio WH SLR 83 SFR, LLC][ Presidio MI SLR 198, LLC] (the “Developer”) in connection with the issuance of $[PAR AMOUNT] aggregate principal amount of the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Special Tax Bonds (the “Bonds”). The Bonds are being issued pursuant to an Indenture, dated as of [____________], 2021 (the “Indenture”), among the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “District”) and U.S. Bank National Association, as trustee (the “Trustee”). SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Developer for the benefit of the holders and beneficial owners of the Bonds. The Developer acknowledges that the District has undertaken no responsibility with respect to any reports, notices or disclosures provided or required under this Disclosure Certificate, and has no liability to any person, including any holder or beneficial owner of the Bonds, with respect to this Disclosure Certificate. SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined herein, the following capitalized terms shall have the following meanings: “Affiliate” of another Person means (a) any Person directly or indirectly owning, controlling, or holding with power to vote, 50% or more of the outstanding voting securities of such other Person, (b) any Person 50% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by such other Person, and (c) any Person directly or indirectly controlling, controlled by, or under common control with, such other Person; for purposes hereof, control means the power to exercise a controlling influence over the management or policies of a Person, unless such power is solely the result of an official position with such Person. “Assumption Agreement” means an agreement containing terms substantially similar to this Disclosure Certificate, whereby a Major Developer agrees to provide Semiannual Reports and notices of significant events with respect to the portion of the Property owned by such Major Developer and its Affiliates, and with respect to the improvements or payments necessary to cause the Planned Development Stage to be reached that such Major Developer, or an Affiliate thereof, intends or is obligated (contractually or otherwise) to make or cause to be made. “Bonds” means the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Special Tax Bonds issued hereunder, and includes the Series 2021 Bonds and any Additional Bonds. “Developer” means [MI San Luis Ranch, LLC][Presidio WH SLR 80 Towns, LLC][Presidio MI SLR 96, LLC][ Presidio WH SLR 83 SFR, LLC][ Presidio MI SLR 198, LLC], a limited liability company organized and existing under the laws of the State of [Delaware], and its successors and assigns. “Development Plan” means with respect to a Major Developer, the specific improvements such Major Developer intends to make, or cause to be made, in order for the Planned Development Stage to be reached, the time frame in which such improvements are intended to be made and the estimated costs of such improvements; the Developer’s Development Plan, as of the date hereof, is described in the Official Statement under the captions “PROPERTY OWNERSHIP AND THE DEVELOPMENT.” “Disclosure Certificate” means this Disclosure Certificate as the same may be amended from time to time. Item 2 Packet Page 33 2 4133-5720-9899.2 “Dissemination Agent” means ________, and any successor Dissemination Agent designated in writing by the Developer and which has filed with the District a written acceptance of such designation. “District” means the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch). “Event of Bankruptcy” means, with respect to a Person, that such Person files a petition or institutes a proceeding under any act or acts, state or federal, dealing with or relating to the subject or subjects of bankruptcy or insolvency, or under any amendment of such act or acts, either as a bankrupt or as an insolvent, or as a debtor, or in any similar capacity, wherein or whereby such Person asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of such Person’s debts or obligations, or offers to such Person’s creditors to effect a composition or extension of time to pay such Person’s debts or asks, seeks or prays for reorganization or to effect a plan of reorganization, or for a readjustment of such Person’s debts, or for any other similar relief, or if any such petition or any such proceedings of the same or similar kind or character is filed or instituted or taken against such Person, or if a receiver of the business or of the property or assets of such Person is appointed by any court, or if such Person makes a general assignment for the benefit of such Person’s creditors. “Financing Plan” means, with respect to a Major Developer, the method by which such Major Developer intends to finance its Development Plan, including specific sources of funding for such Development Plan; the Developer’s Financing Plan, as of the date hereof, is described in the Official Statement under the caption “PROPERTY OWNERSHIP AND THE DEVELOPMENT.” “Listed Event” means any of the events listed in Section 5 hereof. “Major Developer” means any property owner, which owns (itself or through Affiliates) Taxable Parcels that are responsible in the aggregate for 20% or more of the Special Taxes levied on all of the Taxable Property for the then current Fiscal Year. “MSRB” shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http://emma.msrb.org. “Official Statement” means the final, executed Official Statement relating to the Bonds. “Participating Underwriter” shall mean Piper Sandler & Co., the original underwriter of the Bonds. “Person” means an individual, corporation, limited liability company, firm, association, partnership, trust or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. “Planned Development Stage” means, with respect to any portion of the Property, the stage of development at which such portion of the Property is ready to be presented to the marketplace as a finished residential unit[.][[for MI San Luis Ranch LLC Only:]; provided that with respect to the Developer Planned Development Stage shall mean the stage of development when the Developer is no longer a Major Developer and has completed all of the facilities described in the Official Statement under the caption “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”] Item 2 Packet Page 34 3 4133-5720-9899.2 “Rate and Method” means the rate and method of apportionment of the Special Taxes approved by the qualified electors of the District. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “Semiannual Report” shall mean any Semiannual Report provided by the Developer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Special Taxes” means the special taxes described and defined in the Rate and Method as the “Special Tax” approved by the qualified electors of the Community Facilities District . “State” shall mean the State of California. “Taxable Parcel” has the meaning ascribed thereto in the Rate and Method. “Trustee” means U.S. Bank National Association, a national banking association organized and existing under the laws of the United States of America, or any successor thereto as Trustee hereunder substituted in its place as provided in the Indenture. SECTION 3. Provision of Semiannual Reports. So long as the Developer’s obligations hereunder have not been terminated pursuant to Section 7, the Developer shall provide to the MSRB and the District a Semiannual Report which is consistent with the requirements of Section 4, not later than March 31 for the six-month period ending on the prior December 31, and not later than September 30 for the six-month period ending the prior June 30, commencing with the Semiannual Report for the six month period ending June 30, 2021. The Semiannual Report must be submitted in electronic format, accompanied by such identifying information as is prescribed by the MSRB, and may cross-reference other information as provided in Sections 4 or 5 hereof. SECTION 4. Content of Semiannual Reports. The Developer’s Semiannual Report shall contain or incorporate by reference the following information: (a) If information regarding such Major Developer has not previously been included in a Semiannual Report or in the Official Statement, the Development Plan and Financing Plan of such Major Developer or, if information regarding such Major Developer has previously been included in a Semiannual Report or in the Official Statement, a description of the progress made in the Development Plan of such Major Developer since the date of such information and a description of any significant changes in such Development Plan and the Financing Plan and the causes or rationale for such changes. (b) Identification of any portion of the Taxable Parcel owned by the Developer consisting of 20% or more of the Special Tax levy on all of the Taxable Parcel within the Improvement Area that is conveyed by the Developer to an entity that is not an affiliate since the date of the most recent Semiannual Report. (c) The number of building permits issued with respect to such Major Developer’s Property during the six-month period ending on April 30 and October 31 for the respective Semiannual Report date. (d) The number of lots that have not reached the Planned Development Stage sold within the Taxable Property owned by the Developer since the date of the Official Statement or a more recent Semiannual Report, and, if any such lots were sold to a Major Developer, the identity of the Major Developer. Item 2 Packet Page 35 4 4133-5720-9899.2 (e) The number of finished homes sold and conveyed to individual homeowners by the Developer in the Improvement Area during the six-month period ending on April 30 and October 31 for the respective Semiannual Report date. (f) Any material amendments to land use entitlements for Taxable Property of the Developer, if such amendments would prevent or significantly delay the implementation of the Developer’s Development Plan as described in the Official Statement or in any previous Semiannual Report . (g) The information required to be provided under Section 5 hereof during the six-month period ending on the respective April 30 and October 31 prior to the date by which such Semiannual Report must be filed in accordance with Section 3. SECTION 5. Reporting of Significant Events. Pursuant to the provisions of this Section 5, the Developer shall promptly give, or cause to be given, notice of the occurrence of any of the following events with respect to the Developer: (a) Any failure of the Developer to pay by the date due general property taxes or assessments with respect to its Taxable Parcel. (b) Any denial or termination of credit, any denial or termination of, or default under, any line of credit or loan or any other loss of a source of funds that could have a material adverse effect on the Developer’s most recently disclosed Financing Plan or Development Plan or on the ability of the Developer, or any Affiliate of the Developer owning any Taxable Property, to pay any Special Taxes with respect to its Taxable Property when due. (c) The occurrence of an Event of Bankruptcy with respect to the Developer, or any Affiliate, that could have a material adverse effect on the Developer’s most recently disclosed Financing Plan or Development Plan or on the ability of the Developer, or any Affiliate of the Developer owning any Taxable Property, to pay Special Taxes with respect to its Taxable Property when due. (d) Any previously undisclosed governmentally-imposed preconditions to commencement or continuation of development on the Developer’s Taxable Property, if such preconditions would prevent or significantly delay the Developer’s Development Plan as described in the Official Statement or in any previous Semiannual Report. (e) Any previously undisclosed legislative, administrative or judicial challenges to development on the Developer’s Taxable Property, if such challenges would prevent or significantly delay the Developer’s Development Plan as described in the Official Statement or in any previous Semiannual Report. Whenever the Developer obtains knowledge of the occurrence of a Listed Event, the Developer shall promptly report the occurrence of the Listed Event by filing a notice of such occurrence with the MSRB in electronic format, accompanied by such identifying information as is prescribed by the MSRB. SECTION 6. Assumption of Obligations. If any portion of the Taxable Parcels owned by the Developer, or any Affiliate of the Developer, is conveyed such that, upon such conveyance, such new owner will be a Major Developer, the obligations of the Developer under this Disclosure Certificate with respect to the Taxable Property transferred by the Developer shall be assumed by such Major Developer pursuant to an Assumption Agreement. Item 2 Packet Page 36 5 4133-5720-9899.2 SECTION 7. Termination of Reporting Obligation. All of the Developer’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all the Bonds. The Developer’s obligations under this Disclosure Certificate shall terminate upon the earliest to occur of (a)[[MI San Luis Ranch LLC only:](1) the date on which the Planned Development Stage has been reached and (2)] the date on which the Developer is no longer a Major Developer, as defined herein, or (b) the date on which all of the Developer’s obligations are assumed under one or more Assumption Agreements entered into pursuant to Section 6 hereof, or (c) the date on which all Special Taxes levied on the Taxable Property owned by the Developer and its Affiliates are paid or prepaid in full. Upon the occurrence of any such termination prior to the final maturity of the Bonds, the Developer shall give notice of such termination in the same manner as for a Listed Event under Section 5 hereof. SECTION 8. Amendment; Waiver. Notwithstanding any other provision hereof, the Developer may amend provisions of this Disclosure Certificate and any provision hereof may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3, 4 or 5 hereof, it may be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person (as defined in the Rule) with respect to the Bonds, or type of business conducted; and (b) The proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii) does not, in the opinion of bond counsel approved by the District, materially impair the interests of the holders or beneficial owners of the Bonds. If the semiannual financial information or operating data to be provided in the Semiannual Report is amended pursuant to the provisions hereof, the first semiannual financial information filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided. SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Developer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Semiannual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Developer chooses to include any information in any Semiannual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Developer shall have no obligation under this Disclosure Certificate to update such information or include it in any future Semiannual Report or notice of occurrence of a Listed Event. SECTION 10. Dissemination Agent. The Developer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign by providing 30 days’ written notice to the Developer. The Developer shall be responsible for paying the fees and expenses of the Dissemination Agent. SECTION 11. Default. In the event of a failure of the Developer to comply with any provision of this Disclosure Certificate, any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Developer to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Item 2 Packet Page 37 6 4133-5720-9899.2 Disclosure Certificate in the event of any failure of the Developer to comply with this Disclosure Certificate shall be an action to compel performance. SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Developer, the Participating Underwriter, the District and holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other Person. SECTION 13. Notices. Any notices or communications to the Developer may be given as set forth in Exhibit A hereto or such other address that shall be specified by the Developer to the District from time to time. SECTION 14. Governing Law. This Disclosure Certificate and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State of California. Item 2 Packet Page 38 7 4133-5720-9899.2 IN WITNESS WHEREOF, the undersigned has executed this Disclosure Certificate as of the day and year written above. MI SAN LUIS RANCH, LLC a Delaware limited liability company By: MI ENTITLEMENT IV, LLC a Delaware limited liability company Its: Sole Member and Manager By: Presidio Merced Land IV Passive, LLC a Delaware limited liability company, its Manager By: ____________________________________ Michael M. Sullivan Its: Authorized Representative Item 2 Packet Page 39 A-1 4133-5720-9899.2 EXHIBIT A TO CONTINUING DISCLOSURE CERTIFICATE – DEVELOPER Any notices or communications to or among any of the parties to this Disclosure Certificate may be given as follows: To Developer: MI San Luis Ranch, LLC Attn: Josh Bevin, Chief Financial Officer [___________________] [___________________] [___________________] Item 2 Packet Page 40 4124-9554-2571.2 CONTINUING DISCLOSURE CERTIFICATE – DISTRICT THIS DISTRICT CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”), dated as of [__________], 2021, is executed and delivered by the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “District”) in connection with the issuance by the District of the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Special Tax Bonds, Series 2021 (the “Bonds”). The Bonds are being issued pursuant to an Indenture (the “Indenture”), between the District and U.S. Bank National Association (the “Trustee”). The District covenants and agrees as follows. SECTION 1. Purpose of the Disclosure Certificate. The Disclosure Certificate is being executed and delivered by the District for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2- 12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: “Annual Report” means any Annual Report provided by the District pursuant to, and as described in, Sections 3 and 4 hereof. “Annual Report Date” means the date in each year that is nine months after the end of the District’s fiscal year, which date, as of the date of this Disclosure Certificate, is June 30, 2019. “Dissemination Agent” shall mean [Economic & Planning Systems, Inc.], or any successor Dissemination Agent designated in writing by the District and which has filed with the District a written acceptance of such designation. “EMMA System” means the MSRB’s Electronic Municipal Market Access system, or such other electronic system designated by the MSRB. “Financial Obligation” means, for purposes of the Listed Events set out in Section 5(a)(10) and Section 5(b)(7), a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term “Financial Obligation” shall not include Municipal Securities (as defined in the Securities Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule. “Listed Events” means any of the events listed in subsection (a) of Section 5 hereof. “MSRB” means the Municipal Securities Rulemaking Board, or any successor thereto. “Official Statement” means the Official Statement, dated [__________], 2021, relating to the Bonds. Item 2 Packet Page 41 2 4124-9554-2571.2 “Participating Underwriter” means the original underwriter of the Bonds required to comply with the Rule in connection with the offering of the Bonds. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. SECTION 3. Provision of Annual Reports. (a) The District shall, or shall cause the Dissemination Agent to, provide to the MSRB through the EMMA System, in an electronic format and accompanied by identifying information all as prescribed by the MSRB, an Annual Report which is consistent with the requirements of Section 4 hereof, not later than the Annual Report Date, commencing with the report for the 2020- 21 Fiscal Year. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 hereof; provided, however, that the audited financial statements of the District may be submitted separately from the balance of the Annual Report, and later than the date required above for the filing of the Annual Report if not available by that date. If the District’s fiscal year changes, it shall, or shall instruct the Dissemination Agent to, give notice of such change in the same manner as for a Listed Event under subsection (e) of Section 5 hereof. The first Annual Report may include the filing of or reference to the Official Statement. (b) Not later than 15 business days prior to the date specified in subsection (a) of this Section for the providing of the Annual Report to the MSRB, the District shall provide the Annual Report to the Dissemination Agent. (c) If the Dissemination Agent is other than the District, then not later than fifteen (15) Business Days prior to said date, the District shall provide the Annual Report to the Dissemination Agent. If the District is unable to provide the Annual Report to the MSRB by the Annual Report Date, the District shall send a notice to the MSRB in substantially the form attached as Exhibit A to the Disclosure Certificate. (d) The Dissemination Agent shall: (i) provide any Annual Report received by it to the MSRB, as provided herein; and (ii) file a report with the District certifying that the Annual Report has been provided pursuant to this Disclosure Certificate and stating the date it was so provided. SECTION 4. Content of Annual Reports. The District’s Annual Report shall contain or incorporate by reference the following: (a) The District’s audited financial statements, if any, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the District’s audited financial statements, if any, are not available by the time the Annual Report is required to be filed pursuant to subsection (a) of Section 3 hereof, the Annual Report shall contain unaudited financial statements, and the audited financial statements, if any, shall be filed in the same manner as the Item 2 Packet Page 42 3 4124-9554-2571.2 Annual Report when they become available. If the District’s financial statement is included or consolidated with the financial statement for the City of San Luis Obispo (the “City”), then the District shall file the City’s audited financial statements as its own. (b) The following information: (i) The principal amount of Bonds and any Additional Bonds (as defined in the Official Statement) Outstanding as of the December 31 next preceding the Annual Report Date along with debt service schedules for the Bonds and any Additional Bonds (as defined in the Official Statement) Outstanding as of such date; (ii) The balance in each reserve account for the Bonds and any Additional Bonds, and a statement of the required bond reserve amount, as of the December 31 next preceding the Annual Report Date; (iii) The total assessed value of all parcels within the District on which the Special Taxes are levied, as shown on the assessment roll of the San Luis Obispo County Assessor last equalized prior to the December 31 next preceding the Annual Report Date, and a statement of assessed value-to-lien ratios therefor based on special tax and assessment debt, either by individual parcel or by categories (e.g., “below 3:1,” “3:1 to 4:1” etc.); (iv) The Special Tax delinquency rate for the District as of the December 31 next preceding the Annual Report Date; the number of parcels within the District delinquent in payment of special taxes as of the December 31 next preceding the Annual Report Date; the amount of each delinquency; the length of time delinquent and the date on which foreclosure was commenced, or similar information pertaining to delinquencies deemed appropriate by the District; provided, however, that parcels with aggregate delinquencies of $1,000 or less (excluding penalties and interest) may be grouped together and such information may be provided by category; (v) The status of foreclosure proceedings and a summary of the results of any foreclosure sales in the District as of the December 31 next preceding the Annual Report Date; (vi) The identity of any property owner, representing more than 5% of the Special Tax levy, delinquent in payment of special taxes as of the December 31 next preceding the Annual Report Date; (vii) A table describing all tentative and final maps approved and/or recorded within the District, describing the gross acres, the planned commercial acres and the number and type of planned residential dwelling units; (viii) The number of new building permits issued and a description of the purpose of such permits (e.g., new single-family, new multi-family, new commercial, new industrial); Item 2 Packet Page 43 4 4124-9554-2571.2 (ix) A land ownership summary listing the top ten Special Tax payers for the District, as shown on the assessment roll of the San Luis Obispo County Assessor last equalized prior to the December 31 next preceding the Annual Report Date; and (x) For the current Fiscal Year, the amount of the Maximum Special Tax and the actual Special Tax levied within the District, with such amounts reported separately for Developed Property, Final Map Property and Undeveloped Property; provided, however, that once all Taxable Property within the District is Developed Property, the Maximum Special Tax and the actual Special Tax levied may each be shown on an aggregate basis in the Annual Report. For the purposes of this subparagraph (x), all capitalized ter ms used but not otherwise defined herein shall have the meanings ascribed thereto in the Rate and Method of Apportionment for the District. In addition to any of the information expressly required to be provided under this Section, as set forth above, the District shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the District or related public entities, which have been submitted to the MSRB through the EMMA System. The District shall clearly identify each such other document so included by reference. SECTION 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section, the District shall give notice, or cause notice to be given, not less than ten Business Days after the occurrence of any of the following events with respect to the Bonds: (i) Principal and interest payment delinquencies. (ii) Unscheduled draws on debt service reserves reflecting financial difficulties. (iii) Unscheduled draws on credit enhancements reflecting financial difficulties. (iv) Substitution of credit or liquidity providers, or their failure to perform. (v) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue IRS Form 5701 TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax-exempt status of the security. (vi) Defeasances. (vii) Tender offers. (viii) Bankruptcy, insolvency, receivership or similar event of the obligated person. Item 2 Packet Page 44 5 4124-9554-2571.2 Note: For the purposes of the event identified in subparagraph (ix), the event is considered to occur when any of the following occur: the appointment of a receiver, trustee or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. (ix) Rating changes. (x) Default, event of acceleration, termination event, modification of terms or other similar events under the terms of a financial Obligation of the District, any of which reflect financial difficulties. (b) The District shall give notice, or cause notice to be given, not less than ten Business Days after the occurrence of any of the following events with respect to the Bonds, if material: (i) Modifications to rights of Bond holders. (ii) Bond calls. (iii) Release, substitution or sale of property securing repayment of the Bonds. (iv) Non-payment related defaults. (v) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms. (vi) Appointment of a successor or additional trustee or the change of name of a trustee. (vii) Incurrence of a Financial Obligation of the District, or agreement to covenants, events of default, remedies, priority rights, or similar terms of a Financial Obligation of the District, any of which affect Bondholders. (c) Whenever the District obtains knowledge of the occurrence of a Listed Event described in subsection (b) above, the District shall determine if such event would be material under applicable federal securities laws. Item 2 Packet Page 45 6 4124-9554-2571.2 (d) If the District learns of the occurrence of a Listed Event described in subsection (a) of this Section, or determines that knowledge of a Listed Event described in subsection (b) of this Section would be material under applicable federal securities laws, the District shall notify the Dissemination Agent thereof in writing and instruct the Dissemination Agent to report the occurrence pursuant to subsection (e) of this Section. If in response to a request under subsection (b) of this Section, the District determines that the Listed Event would not be material under applicable Federal securities law, the District shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence pursuant to subsection (e) of this Section. (e) If the Dissemination Agent has been instructed by the District to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the MSRB through the EMMA System. Notwithstanding the foregoing, notice of Listed Events described in paragraph (vii) of subsection (a) of this Section and paragraph (ii) of subsection (b) of this Section need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds pursuant to the Indenture. SECTION 6. Termination of Reporting Obligation. The District’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the District shall give notice of such termination in the same manner as for a Listed Event under subsection (e) of Section 5 hereof. SECTION 7. Dissemination Agent. The District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the District pursuant to the Disclosure Certificate. SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the District may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) if the amendment or waiver relates to the provisions of subsection (a) of Section 3 hereof, Section 4 hereof or subsections (a) and (b) of Section 5 hereof, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver (i) is approved by Owners of the Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of Owners, or Item 2 Packet Page 46 7 4124-9554-2571.2 (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of Owners or Beneficial Owners of the Bonds. If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the annual financial information containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided. If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial statements or information, in order to provide information to investors to enable them to evaluate the ability of the District to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the accounting principles shall be given in the same manner as for a Listed Event under subsection (e) of Section 5 hereof. SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the District from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurr ence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the District chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the District shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 10. Default. In the event of a failure of the District or the Dissemination Agent to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of outstanding Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the District to comply with its obligations under the Disclosure Certificate. A default under the Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under the Disclosure Certificate in the event of any failure of the District to comply with the Disclosure Certificate shall be an action to compel performance. SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Trustee under the Indenture. The Dissemination Agent shall not be responsible for the form or content of any Annual Report or notice of Listed Event. The Dissemination Agent shall receive reasonable compensation for its services provided under this Disclosure Certificate. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the District agrees to indemnify and save the Dissemination Agent, its officers, Item 2 Packet Page 47 8 4124-9554-2571.2 directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the District under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the District, the Dissemination Agent, the Participating Underwriter and Owners and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. SECTION 13. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Item 2 Packet Page 48 9 4124-9554-2571.2 IN WITNESS WHEREOF, the District has executed this Disclosure Certificate as of the date first above written. CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) By: Finance Director of the City of San Luis Obispo Item 2 Packet Page 49 A-1 4124-9554-2571.2 EXHIBIT A NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Name of Issue: City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Special Tax Bonds, Series 2021 Date of Issuance: [___________], 2021 NOTICE IS HEREBY GIVEN that the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “District”) has not provided an Annual Report with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Certificate, dated [___________], 2021, executed by the District for the benefit of the Holders and Beneficial Owners of the above-referenced bonds. [The District anticipates that the Annual Report will be filed by ____________.] Dated: _________________ CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) By: Finance Director of the City of San Luis Obispo Item 2 Packet Page 50 San Luis Obispo Page 1 Tuesday, April 6, 2021 Regular Meeting of the City Council CALL TO ORDER A Closed Session of the San Luis Obispo City Council was called to order on Tuesday, April 6, 2021 at 5:03 p.m. by Mayor Harmon, with all Members present via teleconference. ROLL CALL Council Members Present: Council Members Carlyn Christianson, Jan Marx, Andy Pease, Vice Mayor Erica A. Stewart, and Mayor Heidi Harmon. Council Members Absent: None City Staff Present: Derek Johnson, City Manager; Christine Dietrick, City Attorney; and Teresa Purrington, 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--- A. 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 Employees: Unrepresented Management Employees Unrepresented Confidential Employees Item 6 Packet Page 51 San Luis Obispo City Council Minutes of April 6, 2021 Page 2 B. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to Government Code §54956.8 Property: APN 001-022-065 Agency Negotiators: Derek Johnson, City Manager J. Christine Dietrick, City Attorney Markie Jorgensen, Assistant City Attorney Shelly Stanwyck, Assistant City Manager Greg Hermann, Deputy City Manager Matt Horn, Director of Public Works Brian Nelson, Interim City Engineer Manuel Guzman, Construction Manager Shelsie Kloepper, Interim Supervising Civil Miguel Barcenas, Utilities Engineer Dave Hix, Deputy Director of Wastewater Jeremy Gearhart, Wastewater Collection Supervisor Hai Nguyen, Engineer Negotiating Parties: AQT Properties, LLC Under Negotiation: Price and terms of payment Property: APN 001-022-007 Agency Negotiators: Derek Johnson, City Manager J. Christine Dietrick, City Attorney Markie Jorgensen, Assistant City Attorney Shelly Stanwyck, Assistant City Manager Greg Hermann, Deputy City Manager Matt Horn, Director of Public Works Brian Nelson, Interim City Engineer Manuel Guzman, Construction Manager Shelsie Kloepper, Interim Supervising Civil Miguel Barcenas, Utilities Engineer Dave Hix, Deputy Director of Wastewater Jeremy Gearhart, Wastewater Collection Supervisor Hai Nguyen, Engineer Negotiating Parties: Charles Neumeyer Leslie Neumeyer Under Negotiation: Price and terms of payment RECESSED AT 5:35 P.M. TO THE REGULAR MEETING OF APRIL 6, 2021 TO BEGIN AT 6:00 PM IN THE COUNCIL CHAMBER Item 6 Packet Page 52 San Luis Obispo City Council Minutes of April 6, 2021 Page 3 CALL TO ORDER A Regular Meeting of the San Luis Obispo City Council was called to order on Tuesday, April 6, 2021 at 6:03 p.m. by Mayor Harmon, with all Members present via teleconference. ROLL CALL Council Members Present: Council Members Carlyn Christianson, Jan Marx, Andy Pease, Vice Mayor Erica A. Stewart, and Mayor Heidi Harmon. Council Members Absent: None City Staff Present: Derek Johnson, City Manager; Christine Dietrick, City Attorney; and Teresa Purrington, 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 Jan Marx led the Pledge of Allegiance. CITY ATTORNEY REPORT ON CLOSED SESSION City Attorney Dietrick stated the Council met in Closed Session on two matters. The first being conference with labor negotiations with regard to represented and unrepresented employee organizations as listed above there was no reportable action on this item. The second was with real property negotiators related to the acquisition of two sewer line easements. The staff received negotiating parameters from the Council by unanimous consensus. There was no further action on this item. PRESENTATIONS 1. CITY MANAGER REPORT City Manager Derek Johnson provided a report on the Buy Local Bonus Program, New “Together We Can Messaging,” Mayor’s Challenge for Water Conservation, Mission Plaza Pop-Up: Through the Flowers, South Hills Open Space Boardwalk, and on the Covid-19 Pandemic. 2. SEXUAL ASSAULT AWARENESS MONTH PROCLAMATION Mayor Harmon presented a Proclamation declaring the month of April as “Sexual Assault Awareness Month” to Stacy Salame on behalf of RISE. Item 6 Packet Page 53 San Luis Obispo City Council Minutes of April 6, 2021 Page 4 3. MONTH OF THE CHILD AND CHILD ABUSE PREVENTION MONTH PROCLAMATION Mayor Harmon presented a Proclamation declaring the month of April as “Month of the Child and Child Abuse Prevention Month” to Melinda Sokolowski, on behalf of CAPSLO. 4. INTRODUCTION OF MARKIE JORGENSEN, ASSISTANT CITY ATTORNEY City Attorney Christine Dietrick introduced Markie Jorgensen, the new Assistant City Attorney. 5. INTRODUCTION OF REBECCA BERNSTORFF, BUSINESS MANAGER FOR COMMUNITY SERVICES Assistant City Manager Shelly Stanwyck introduced Rebecca Bernstorff, the new Business Manager for Community Services. PUBLIC COMMENT ON ITEMS NOT ON THE AGENDA Michelle M Marshall James Raleigh Delk Tim Jouet Garett Brisbane Kalea Conrad Michael Guiffre Alejandro ---End of Public Comment--- CONSENT AGENDA ACTION: MOTION BY COUNCIL MEMBER CHRISTIANSON, SECOND BY VICE MAYOR STEWART, CARRIED 5-0 to approve Consent Calendar Items 6 thru 13. Council Member Pease recused from Item #12 due to the area being located within 300 feet of her business. 6. WAIVE READING IN FULL OF ALL RESOLUTIONS AND ORDINANCES CARRIED 5-0, to waive reading of all resolutions and ordinances as appropriate. 7. MINUTES REVIEW - MARCH 16, 2021 COUNCIL MINUTES CARRIED 5-0, to Approve the minutes of the City Council meeting held on March 16, 2021. Item 6 Packet Page 54 San Luis Obispo City Council Minutes of April 6, 2021 Page 5 8. SECOND READING AND ADOPTION OF ORDINANCE NO. 1693 (2021 SERIES) APPROVING A REZONE FOR A NEIGHBORHOOD PARK LOCATED AT 533 BROAD STREET CARRIED 5-0, to adopt Ordinance No. 1693 (2021 Series) entitled, “An Ordinance of the City council of the City of San Luis Obispo, California, approving a rezone for a Neighborhood Park. The project includes amending the Zoning Regulations Map to change the zoning designation of the associated property from Conservation/Open Space (C/OS) to Public Facility (PF), respectively, including a Mitigated Negative Declaration of Environmental Review, as represented in the staff report and attachments dated March 2, 2021 (533 Broad Street: PARK-0320-2020, GENP-0612-2019, RZ-0322-2020, and EID-0321- 2020).” 9. APPROVE AN AMENDMENT TO THE FIRE MUTUAL AID REIMBURSEMENT RESOLUTION CARRIED 5-0, to adopt Resolution No. 11234 (2021 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, identifying the terms and conditions for Fire Department response away from their official duty station and assigned to an Emergency Incident” to expand the City’s ability to seek full reimbursement for eligible mutual aid responses to fires and other disasters. 10. CONFIRM THE 2020-21 LIST OF PROJECTS FUNDED BY THE ROAD REPAIR AND ACCOUNTABILITY ACT (SB-1) CARRIED 5-0, to adopt Resolution No. 11235 (2021 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, confirming the 2020-21 list of projects funded by Senate Bill 1: The Road Repair and Accountability Act.” 11. REQUEST TO REMOVE THE PROPERTY AT 1136 IRIS STREET FROM THE CONTRIBUTING PROPERTIES LIST OF THE CITY’S INVENTORY OF HISTORIC RESOURCES CARRIED 5-0, to adopt Resolution No. 11236 (2021 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, removing the property at 1136 Iris Street from the Contributing Properties List of Historic Resources (HIST -0020-2021).” 12. SECOND READING OF ORDINANCE NO. 1694 (2021 SERIES) AMENDING SECTIONS 10.36.170, 10.36.220, AND 10.36.221 OF THE CITY’S MUNICIPAL CODE RELATING TO RESIDENTIAL PARKING PERMIT DISTRICTS CARRIED 4-0-1 (Council Member Pease recused), to adopt Ordinance No. 1694 (2021 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, amending Municipal Code Title 10 Chapter 36 regarding Stopping, Standing and Parking for certain purposes or in certain places.” Item 6 Packet Page 55 San Luis Obispo City Council Minutes of April 6, 2021 Page 6 13. AUTHORIZE PUBLIC SAFETY RADIO INFRASTRUCTURE REPLACEMENT CARRIED 5-0, to: 1. Authorize the City Manager to award the contract for purchase and installation of the replacement of the QS2 Public Safety Radio System to Commline Inc.; and 2. Authorize waiver of formal bids to cooperatively purchase radio equipment as allowed under Section 3.24.060 E of the City of San Luis Obispo Municipal Code using the NASPO Contract #06913. PUBLIC HEARING ITEMS AND BUSINESS ITEMS 14. REVIEW AND ACCEPTANCE OF THE 2020 GENERAL PLAN ANNUAL REPORT Community Development Director Michael Codron and Assistant Planner Graham Bultema provided an in-depth staff report and responded to Council questions. Public Comments: Erik Justesen ---End of Public Comment--- ACTION: MOTION BY COUNCIL MEMBER MARX, SECOND BY COUNCIL MEMBER CHRISTIANSON, CARRIED 5-0 to review and accept the 2020 General Plan Annual Report with the following change: • Page 37 Homestay Rentals – revise the first paragraph as follows: In 2015 the City Council adopted Ordinance No. 1611 (2015 Series) to develop rules and requirements for short-term rentals (commonly referred to as the Homestay Program) to preserve the rental housing stock for residents and workers and to protect public health, safety, and welfare within the City. RECESS Council recessed at 8:12 p.m. and reconvened at 8:22 p.m., with all Council Members present. 15. APPROVE AMENDMENTS TO COUNCIL POLICIES AND PROCEDURES REGARDING ORDER OF BUSINESS AND ADDING A POLICY REGARDING SOCIAL MEDIA City Clerk Teresa Purrington and City Attorney Christine Dietrick provided an in-depth staff report and responded to Council questions. Public Comments: Tim Jouet ---End of Public Comment--- Item 6 Packet Page 56 San Luis Obispo City Council Minutes of April 6, 2021 Page 7 ACTION: MOTION BY COUNCIL MEMBER PEASE, SECOND BY COUNCIL MEMBER MARX, CARRIED 5-0 to adopt Resolution No. 11237 (2021 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, amending its Council Policies and Procedure Manual” with the addition that in the event any content is removed or deleted from an account it should be screen-shot and saved along with the reason why it was removed. COUNCIL COMMUNICATIONS AND LIAISON REPORTS Council Member Marx asked that the keeping of bees be put in the parking lot for consideration at a later date. Vice Mayor Stewart and Council Member Christianson supported this suggestion. Vice Mayor Stewart updated the Council on CAPSLO’s work on establishing Medical Treatment Center (Detox.) Council Member Pease updated the Council on the Coast Rail Corridor study to expanding services to the north. ADJOURNMENT The meeting was adjourned at 9:07 p.m. The next Regular City Council Meeting is scheduled for Tuesday, April 20, 2021 at 5:30 p.m., via teleconference. APPROVED BY COUNCIL: XX/XX/2021 Item 6 Packet Page 57 BLANK PAGE This page is intended to be blank so that you can print double-sided. Item 6 Packet Page 58 Department Name: Public Works Cost Center: 5002 For Agenda of: April 20, 2021 Placement: Consent Estimated Time: N/A FROM: Matt Horn, Public Works Director Prepared By: Richard Burde, Engineer III SUBJECT: AUTHORIZATION TO ADVERTISE LAGUNA LAKE 2021 MAINTENANCE DREDGING PROJECT, SPECIFICATION NO. 91392 RECOMMENDATION 1.Approve the Project Plans (Attachment A) and Special Provisions (Attachment B) for the Laguna Lake 2021 Maintenance Dredging Project; and 2.Authorize staff to advertise for bids; and 3.Authorize the City Manager or designee to award the construction contract for the bid total if the lowest responsible bid is within the publicly disclosed funding amount of $650,000 and the funding amount is consistent with the adopted 2021-23 budget appropriation for this project. DISCUSSION Background The City of San Luis Obispo owns the 344 -acre Laguna Lake Natural Reserve that includes most of Laguna Lake, portions of Prefumo Creek and its outlet into the Lake, and adjacent upland areas. In July of 2014, Council adopted the “Laguna Lake Natural Reserve Conservation Plan” which outlined future management and conservation goals for Laguna Lake. On January 19, 2016, Council authorized MNS Engineers to produce construction documents for dredging of the Lake. The design of this project is complete and all necessary permits from governing environmental agencies to commence the dredging operation have been obtained. Permitting agencies include Army Corp of Engineers, California Department of Fish and Wildlife, and t he California Water Control Board. These permits are valid for a five -year period, starting in August of 2019, and have an option for a one-time extension of five additional years. In January of 2020 Council authorized City Staff to advertise the Laguna Lake Dredging project. The project was advertised, and bids were received on April 9, 2020. The project was not awarded due to the COVID pandemic and the anticipated decline in general fund revenue. Council approved the deferral and de-appropriation of this project’s funding with the 2020-21 Supplemental Budget. With the approval of Measure G-20 by the City’s voters and an improved economic outlook, staff is requesting that funding be appropriated in the upcoming 2021-23 Financial Plan to complete the project. Item 7 Packet Page 59 The scope of work for the Laguna Lake 2021 Maintenance Dredging Project will be to remove 2,000 cubic yards (CY) of accumulated sediment at the mouth of the Prefumo Creek , which discharges into the Lake from the south. In addition to this dredging operation, the project includes approximately 90 linear feet (LF) of bank stabilization at the Lake’s main parking lot. This will prevent further deterioration of the bank and prevent asphalt from eroding into the Lake. Although the permits received allow for up to 4,000 CY of annual sediment removal, City staff is recommending limiting the total volume in the first year to 2,000 CY to determine the benefits of this methodology with the intent of increasing volumes in subsequent years if the project work is successful. The nature of this project is highly logistical, and staff intends to use the first year’s dredging efforts to refine the work and increase efficiencies moving forward. Essentially, the project is a pilot and staff is expecting to learn from it and leverage this knowledge for future phases of dredging and bidding for this work. Fresh water lake dredging work is a highly specialized in nature, and contractors that perform this work are not commonly available in this area. For this reason, the bidding period for this project is longer than typical with the hope of attracting multiple competitive bids from qualified contractors. Reason for Project Plan and Bid Release Now Ahead of 2021-23 Financial Plan Adoption Due to the specialized nature of hydraulic dredging work staff feels that advertising the project well ahead of the anticipated start of construction will attract the maximum number of qualified bids. Environmental permits require that the dredging be completed during the dry season between April 15 and November 1. Staff intends on starting construction in July. The project is subject to 2021-23 CIP approval and funding allocations as well as engineers estimate. Previous Council or Advisory Body Action This project was originally identified in the 2015-17 Financial Plan that was approved by Council. Subsequently, funding was appropriated in the 17-19 and 19-21 Financial Plans. In addition to the above budget adoptions, Council took the following actions: ➢ August 18, 2015 – Authorize the issuance of a Request for Proposals (RFP) for phase I of the Laguna Lake Dredging and Sediment Management Project in furtherance of the City’s Laguna Lake Natural Reserve Conservation Plan ➢ January 19, 2015 – Award and approve a consultant services agreement with the firm MNS Engineers, Inc. (“MNS”) in an amount not-to-exceed $445,000 for Laguna Lake Dredging and Sediment Management ➢ September 20, 2016 - Receive and file the Preliminary Dredging Report (the “PDR”) prepared by MNS Engineers, Inc. and, as further described in the PDR, direct staff to proceed with further analysis and further recommendations. ➢ October 24, 2017 – Approve a Resolution to adopt a Mitigated Negative Declaration of Environmental Impacts for the Laguna Lake Dredging and Sediment Management Project. Item 7 Packet Page 60 ➢ May 8, 2019 – The City of San Luis Obispo received the California State Fish and Wildlife 1600 Lake Alteration Agreement, permitting the alteration of the Lake’s bed. ➢ August 7, 2019 – The City of San Luis Obispo received the Army Corp of Engineers 404 permit allowing for the discharge of dredged material into the waters of the United States. ➢ September 11, 2019 – The City of San Luis Obispo received the 401 permit from the California Water Control Board, which expands on the 404 permit received from the Army Corp by outlining water quality guidelines that must be maintained during construction. ➢ January 14, 2020 – City Council Authorized the advertisement of the 2020 Lake Dredging Project. ➢ June 2, 2020 – Council gave the Public Works Department the authorization to reject bids received on April 9th, 2020. Policy Context Per the October 2018 Purchasing Policy Update to the July 2015 Financial Management Manual, Council approval is required for Public Projects that cost over $175,000. Public Engagement Public engagement was done during the initial identification of this project to be included in the 2015-17 Financial Plan and again during subsequent Financial Plans and preparation of the construction documents. In addition, a neighborhood organization referred to as “The Friends of Laguna Lake” has continued to communicate with, and receive progress updates from, City staff. During this time “The Friends of Laguna Lake” have acted as liaison between the City and community stakeholders by providing progress updates regarding permitting, design, and construction timelines. City staff anticipates that this level of communication will continue throughout the life of the project. CONCURRENCE The Administration and Parks and Recreation departments concur with the proposed recommendation outlined in this document. ENVIRONMENTAL REVIEW Council approved a Mitigated Negative Declaration for the project on October 24, 2017. All environmental mitigations have been outlined in the permits that have been issued by the Army Corp., California Water Board, and Department of Fish and Wildlife. No additional environmental review is required. FISCAL IMPACT Budgeted: Yes Budget Year: 2019-22 Funding Identified: Yes Item 7 Packet Page 61 Fiscal Analysis: Funding Sources Current FY Cost Annualized On-going Cost Total Project Cost General Fund State Federal Fees Other: Local Sales Tax Fund $700,500 Total $700,500 201 Fund Engineer's Estimate:$550,000 $550,000 Contingencies (20%)$110,000 $110,000 Total for Construction $660,000 $660,000 Monitoring Services:$20,000 $20,000 Water Quality Sampling:$20,000 $20,000 Printing:$500 $500 Total Project Cost $700,500 $700,500 Current Project Balance(91392):$111 $111 Current Project Balance(99110):$8,921 $8,921 Additional Funding w/ FY21/23 FP:$840,000 $840,000 Post Project Remaining Balance:$139,611 $139,611 Publicly Disclosed Funding Amount:$650,000 Laguna Lake 2021 Maintenance Dredging, Specification No. 91392 Laguna Lake Dredging and Sediment Maintenance Project Implementation Account (91392) Project Total Costs There is currently an available balance of $111 in the Laguna Lake Dredging and Sediment Maintenance Project Implementation Account (Award 91392) and an available balance of $8,921 in the Laguna Lake Dredging Account (Award 99110) left over from the design phase of the project. Additional funding of $840,000 from the Local Revenue Measure Fund is proposed in the 2021-2023 Financial Plan Capital Improvement Plan to provide adequate funding for this project and the ensure the project can be awarded without the need to return to Council for award of the construction contract. Delays during the award phase could impact the City’s ability to complete the project within the regulatory permit window. Furthermore, if funds remain after project completion, those could be utilized for design services for refinement of project design elements (if necessary) and continued payments of regulatory permit fees. Item 7 Packet Page 62 While the construction estimate is $550,000, staff is requesting authorization to award a contract up to the Publicly Disclosed Funding amount of $650,000 in compliance with Public Contract Code Section 20103.8C. If the budget is approved as proposed, the funding will be made available July 1, 2021 to complete the summer 2021 dredging efforts. If funding appropriated by Council with the FY21/23 Financial Plan is less than the proposed $700,500 total estimated project cost, staff may need to modify the project scope to a new budget appropriation limit, which could delay the project. ALTERNATIVES Deny Authorization to advertise. Council could choose to not authorize City staff to advertise the dredging of Laguna Lake. This is not recommended since sediment will continue to accumulate, requiring more frequent or larger more costly dredging operations in the future. Additionally, dredging the Lake has been identified as an “Other Important Council Objective”. Attachments: a - COUNCIL READING FILE - Laguna Lake Dredging Plan Set 2021 b - COUNCIL READING FILES - Laguna Lake Dredging - 2021 Specification 100% Item 7 Packet Page 63 BLANK PAGE This page is intended to be blank so that you can print double-sided. Item 7 Packet Page 64 Department Name: Community Development Cost Center: 4003 For Agenda of: April 20, 2021 Placement: Consent Estimated Time: N/A FROM: Michael Codron, Community Development Director Prepared By: Steve LaChaine, Senior Civil Engineer SUBJECT: APPROVAL OF THE FINAL TRACT MAP FOR TRACT 3140, 1137 PEACH STREET (FMAP-0542-2020) RECOMMENDATION Adopt a Resolution (Attachment A) approving the Final Tract Map for Tract 3140, 1137 Peach Street, and authorize the Mayor to execute a Subdivision Agreement. DISCUSSION Background Tract 3140 is located at 1137 Peach Street (Attachment D). A vesting tentative tract map for Tract 3140 was approved by the City Council on September 1st, 2020, by Resolution No. 11162 (2020 Series). The vesting tentative tract map (Attachment E) approved a ten- lot residential subdivision. This tract map will create five new single- family home properties, adding to the existing five homes, which were built in the early 1900’s, all built on two underlining parcels. The new tract map creates 10 lots, five lots for the five existing houses, and five lots for the proposed houses, all in the category of single- family residence (no condominiums or apartments). Approving the Final Map The tentative parcel map has an initial two-year life per Municipal Code Section 16.10.150. It is not subject to any automatic extensions granted by the State Legislature. Therefore, the final map must be filed by September 1, 2022, unless the subdivider requests, and is granted, time extensions from the City, pursuant to Municipal Code Section 16.10.155. The final tract map for Tract 3140 (Attachment E) is ready to be approved and recorded. Pursuant to Section 16.14.080 of the Municipal Code, the Public Works Director has determined that the final tract map is in substantial conformity with the tentative tract map and approved modifications thereof. Item 8 Packet Page 65 The final tract map proposes to include ten-foot-wide public utility and street tree easements along Peach Street and Toro Street frontage areas, which are described on the final tract map. The tract map also shows the new location of private access, sewer, utility, and drainage easements on site to accommodate the final design. Appropriate securities will be submitted prior to map recordation to guarantee completion of the required subdivision improvements as shown in the Subdivision Agreement (Attachment F). The resolution approving the final tract map (Attachment G) also authorizes the Mayor to sign the Subdivision Agreement requiring the Subdivider to complete the subdivision improvements. Previous Council or Advisory Body Action The Planning Commission approved the Vesting Tentative Tract Map No. 3140 on September 1, 2020 via Resolution No. 11162 (Attachment C). Policy Context The City Council approves final maps in accordance with the Subdivision Map Act and the City’s Subdivision Regulations (Chapter 16). The regulations shall apply to all parts of subdivisions within the City of San Luis Obispo and to the preparation of subdivision maps and to other maps provided for by the Subdivision Map Act. Each subdivision and each part thereof lying within the City shall be made and each map shall be prepared and presented for approval as provided for and required by these regulations. Public Engagement Public engagement was completed with the approval of the Tentative Map along with Architectural approval for the specific development project. CONCURRENCES The Public Works Department concurs with the recommended action. ENVIRONMENTAL REVIEW Approval of the final map is statutorily exempt under the California Environmental Quality Act (CEQA) pursuant to Section 15268(b)(3) Ministerial Projects (approval of final subdivision maps) of Title 14 of the California Code of Regulations (State CEQA Guidelines). Therefore, no further environmental review is required. Resolution No. 11162 refers to the adopted Mitigated Negative Declaration of Environmental Review for this Tract 3140, by which the standard air quality, and biological and cultural resources, hazards and hazard materials, noise mitigation and tribal cultural resources conditions are to be followed and noted on grading and construction plans. Item 8 Packet Page 66 FISCAL IMPACT Budgeted: n/a Budget Year: 2020-21 Funding Identified: n/a Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund N/A 0 0 0 State Federal Fees Other: Total N/A for Private Subdivision There is no significant financial impact to the City associated with approving the final tract map for Tract 3140. The existing driveway aprons on Peach Street and Toro Street to be reconstructed to City standards and street trees being installed along Toro Street, and the new water services will result in a minimal increase in maintenance costs upon acceptance of the improvements by the City. This cost will be included in the annual budget appropriation of the responsible departments. The remainder of the subdivision improvements will be privately maintained. ALTERNATIVES Deny approval of the final parcel map. Denying approval of the final tract map can apply if findings are made that the requirements or conditions of the tentative map have not been met or performed (Section 66473 of the Subdivision Map Act) or if findings are made that the final map is not in substantial compliance with the previously approved tentative map (Section 66474.1 of the Subdivision Map Act). Because the final map is in substantial compliance with the tentative map and all of the conditions of the map will be met or securities deposited prior to map recordation, Sections 66474.1 and 66473 of the Subdivision Map Act require that City Council approve the map. Therefore, denying approval of the final map is not a recommended alternative unless the required findings are made. Attachments: a - Draft Resolution b - Vicinity Map c - COUNCIL READING FILE - Resolution No. 11162 (2020 Series) d - Tentative Map e - COUNCIL READING FILE - Tract 3140 Final Map f - Subdivision Agreement Draft Item 8 Packet Page 67 R _____ RESOLUTION NO. _______ (2021 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, APPROVING THE FINAL MAP FOR TRACT 3140 (1137 PEACH STREET, FMAP-0542-2020) WHEREAS, the City Council made certain findings concerning the vesting tentative map for Tract 3140, as described in Resolution No. 11162 (2020 Series); and WHEREAS, the subdivider has requested that the Council approve the final map for Tract 3140; and WHEREAS, the maintenance within Tract 3140 shall be open to the public as emergency access and maintenance/inspections of utilities; and WHEREAS, the owners of lots 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10 of Tract 3140, their heirs and assigns will be jointly responsible to improve, maintain and keep in repair, common driveway, per easement agreement to record concurrently with the Tract 3140 Final map; and WHEREAS, the subdivider will submit appropriate securities to guarantee installation of the required subdivision improvements as shown on the approved plans prior to map recordation, and the required fees will be received prior to map recordation, as provided in the Subdivision Agreement; and WHEREAS, all requirements, conditions and mitigation measures from Tract 3140 required per said Council Resolution No. 11162 (2020 Series) approving the Tract 3140 tentative map, have been completed or appropriate securities will be in place to guarantee their completi on prior to Tract 3140 map recordation; and WHEREAS, none of the improvements being constructed by Tract 3140 are off-site and there are no stand-alone projects that are required to be accepted for maintenance by the City prior to completion of the remaining subdivision improvements; and WHEREAS, approval of the final map is statutorily exempt under the California Environmental Quality Act (CEQA) pursuant to Section 15268(b)(3) Ministerial Projects (approval of final subdivision maps) of Title 14 of the California Code of Regulations (State CEQA Guidelines). Therefore, no further environmental review is required. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. The final map for Tract 3140 is found to be in substantial conformance with the tentative map. Item 8 Packet Page 68 Resolution No. ______ (2021 Series) Page 2 SECTION 2. The Mayor is authorized to accept easements for Private Access, Sewer, Utility, Drainage, Street Trees and Public Utilities on Tract 3140 in a form acceptable to the Public Works Director and the City Attorney; and SECTION 3. Approval of the final map for Tract 3140 shown in Attachment A of the staff report is hereby granted with the understanding that minor changes to the final map for technical accuracy and condition compliance may still be needed. The Public Works Director is authorized to approve these changes and record the map when it is deemed to be complete and all conditions and mitigation measures are complied with. SECTION 4. The Mayor is authorized to approve revisions to the Subdivision Agreement for Tract 3140 and execute the agreement in a form substantially shown in Attachment E of the staff report. SECTION 5. The Mayor and City staff are authorized to take action necessary to carry out the intent of this resolution. Item 8 Packet Page 69 Resolution No. ______ (2021 Series) Page 2 SECTION 6. Environmental Review (ARCH-0568-2019/SBDV-0571-2019/EID-0800- 2019) constitute the complete environmental determination for the project. The final map is substantially in conformance with the tentative map evaluated with these prior environmental determinations. Approval of the final map is statutorily exempt under the California Environmental Quality Act (CEQA) pursuant to Section 15268(b)(3) Ministerial Projects (approval of final subdivision maps) of Title 14 of the California Code of Regulations (State CEQA Guidelines). Therefore, no further environmental review is required. Upon motion of _______________________, seconded by ________________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this ______ day of _______________ 2021. ________________________________ Mayor Heidi Harmon ATTEST: ______________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: ________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ____________________________. ______________________________ Teresa Purrington City Clerk Item 8 Packet Page 70 City of San Luis Obispo, Commu nity Devel opmen t, 919 Palm S tree t, San Luis Obispo, CA, 93401-3218, 805.7 81.7170, slocity.o rg Item 8 Packet Page 71 Item 8 Packet Page 72 Item 8 Packet Page 73 Item 8 Packet Page 74 Item 8 Packet Page 75 1 SUBDIVISION AGREEMENT - TRACT 3140 THIS AGREEMENT is dated this ______ day of ___________202___ by and between GOSLO, LLC, a California limited liability company, herein referred to as "Subdivider," and the CITY OF SAN LUIS OBISPO, herein referred to as the "City." RECITALS REFERENCE IS HEREBY MADE to that certain proposed subdivision of real property in the City of San Luis Obispo, County of San Luis Obispo, State of California, a description of which is shown on the Final Map of Tract 3140, City of San Luis Obispo, California, as approved by the City Council on the ____ day of ___________, 202___. The Subdivider desires that said Tract No. 3140 be accepted and approved as a Final Map pursuant to the Subdivision Regulations of the City of San Luis Obispo (Title 16 of the San Luis Obispo Municipal Code), and It is a condition of said regulations that the Subdivider agree to install the improvements as set forth on the plans therefore. TERMS AND CONDITIONS: In consideration of the foregoing, the Subdivider does hereby agree to construct and install the following subdivision improvements in accordance with said subdivision regulations, and in accordance with approved plans and specifications on file in the office of the City Engineer, City of San Luis Obispo, to wit: 1. CURB, GUTTERS AND SIDEWALKS 2. STREET BASE AND SURFACING 3. WATER MAINS and SEWER MAINS, including sewer laterals to the property line and water services to the curb stop. Item 8 Packet Page 76 2 4. LANDSCAPING 5. DRAINAGE STRUCTURES 6. ELECTRIC, GAS, TELEPHONE AND CABLE TELEVISION: In addition to the inspection and approval of such facilities by the City, each public utility shall be required to file a letter stating that the developer has properly installed all facilities to be provided by him, and that the said utility is prepared to provide service to residents upon request. 7. ANY & ALL OTHER IMPROVEMENTS shown on plans or required by project approvals. All of the above facilities shall be installed in the locations designated and to the plans and specifications on file and approved by said City. The lines and grades for all of said improvements shall be established by the Subdivider in accordance with said approved plans and specifications. The Subdivider agrees that the work of installing the above improvements shall begin within thirty (30) days from the date of recording of the final map, and that the work shall be completed within twelve (12) months of said recording date, unless an extension has been granted by the City, provided that if completion of said work is delayed by acts of God or labor disputes resulting in strike action, the Subdivider shall have an additional period of time equivalent to such period of delay in which to complete such work. Any extension of time hereunder shall not operate to release the surety on the Improvement Security filed pursuant to this agreement. In this connection, the surety waives the provisions of Section 2819 of the Civil Code of the State of California. No building permits will be issued nor occupancy granted after the expiration date of the agreement until completion and acceptance of all subdivision improvements unless specifically approved by the City. Item 8 Packet Page 77 3 The Subdivider does also agree to comply with the conditions established by the City Council and has paid the necessary fees as indicated on the attached Exhibits 1 and 2. The restoration of lost section corners and retracement of section lines within the Subdivision shall be in accordance with Article 5, paragraph 8771 et seq., of the Professional Land Surveyors Act, Chapter 15 of the Business and Professions Code of the State of California. The Subdivider attaches hereto, as an integral part hereof, and as security for the performance of this agreement, an instrument of credit or bond approved by and in favor of the City of San Luis Obispo, and conditional upon the faithful performance of this agreement. Said instrument of credit or bond is in the amount of $___________ shown in Exhibit 2, which is the amount of the estimated cost of said improvements. Subdivider agrees to remedy any defects in the improvements arising from faulty workmanship or materials or defective construction of said improvements occurring within twelve (12) months after acceptance thereof. In accordance with Sections 66499.7 and 66499.9 of the Government Code of the State of California, upon final completion and acceptance of the work, City will release all but 10% of the improvement security, that amount being deemed sufficient to guarantee faithful performance by the Subdivider of his obligation to remedy any defects in the improvements arising within a period of one year following the completion and acceptance thereof. Completion of the work shall be deemed to have occurred on the date which the City Council shall, by resolution duly passed and adopted, accept said improvements according to said plans and specifications, and any approved modifications thereto. Item 8 Packet Page 78 4 Neither periodic nor progress inspections or approvals shall bind the City to accept said improvements or waive any defects in the same or any breach of this agreement. “AS-BUILT” record drawings are to be submitted within four weeks of completion of construction and prior to City acceptance of the public improvements. If the Subdivider fails to complete the work within the prescribed time, the Subdivider agrees that City may, at its option, declare the instrument of credit or bond which has been posted by Subdivider to guarantee faithful performance, forfeited and utilize the proceeds to complete said improvements, or city may complete said improvements and recover the full cost and expense thereof from the Subdivider or his surety. The Subdivider has deposited with the City a labor and materials surety in the amount of 50% ($_________) of the above described subdivision improvements in accordance with State law. Said Subdivider shall pay an inspection fee for City to inspect the installation of said subdivision improvements, and to verify that they have been completed in accordance with the plans and specifications. If off-site dedication of property is necessary to facilitate the construction of the required subdivision improvements, the subdivider shall exhaust all avenues available to acquire said off-site dedication. In the event the subdivider is unable to acquire said property, the City may lend the subdivider its powers of condemnation to acquire the off-site dedication, including any necessary construction, slope, and drainage easements. The Subdivider shall pay for all costs incurred by the City to acquire the off-site dedication, including, but not limited to, all costs associated with condemnation Item 8 Packet Page 79 5 through the condemnation process. Prior to proceeding with the condemnation process, the Subdivider shall deposit with the City all or a portion of the anticipated costs, as determined by the City Attorney, of the condemnation proceedings. The City does not and cannot guarantee that the necessary property rights can be acquired or will, in fact, be acquired. All necessary procedures of law would apply and would have to be followed. Title 16 of the San Luis Obispo Municipal Code, entitled "Subdivision," all plans and specifications on file with said City as a part of said Subdivision Map, and all other documents filed with the City by the Subdivider and approved by the City are hereby referred to for further particulars in interpreting and defining the obligations of the Subdivider under this agreement. Pursuant to Government Code Section 66474.9(b), the subdivider shall defend, indemnify and hold harmless the City and/or its agents, officers and employees from any claim, action or proceeding against the City and/or its agents, officers or employees to attack, set aside, void or annul, the approval by the City of this subdivision, and all actions relating thereto, including but not limited to environmental review (“Indemnified Claims”). The City shall promptly notify the subdivider of any Indemnified Claim upon being presented with the Indemnified Claim and City shall fully cooperate in the defense against an Indemnified Claim. It is understood and agreed by and between the Subdivider and the City hereto that this agreement shall bind the heirs, executors, administrators, successors and assigns of the respective Parties to this agreement. It is agreed that the Subdivider will furnish copies of the successful bidder's contract unit prices and total bid prices for all of the improvements herein referred to. Item 8 Packet Page 80 6 IN WITNESS WHEREOF, this agreement has been executed by: CITY OF SAN LUIS OBISPO SUBDIVIDER GOSLO, LLC a California limited liability company MAYOR Heidi Harmon Levi Seligman, Manager ATTEST: CITY CLERK Teresa Purrington APPROVED AS TO FORM: CITY ATTORNEY J. Christine Dietrick Item 8 Packet Page 81 7 EXHIBIT 1 TRACT 3140 SUBDIVISION AGREEMENT 1. The Subdivider has deposited a monumentation guarantee in the amount of $2,000 to cover the installation of survey monuments in accordance with the approved map and payment for same. Said guarantee will be released to the Subdivider upon receipt by the City of a letter from the Engineer indicating that they have completed the work and have been paid. 2. Park fees shall be paid, as listed in the attached EXHIBIT 2. 3. Public improvement inspection fees shall be paid at time of encroachment permit issuance. 4. Water and sewer impact fees shall be paid at time of building permits through the Community Development Department per the fee schedule in effect at that time. 5. Transportation impact fees shall be paid at time of building permits through the Community Development Department per the fee schedule in effect at that time. 6. The subdivider shall comply with all requirements of Council Resolution 11162 (2020 Series) approving the tentative map. Item 8 Packet Page 82 8 EXHIBIT 2 TRACT 3140 - FEE AND BOND LIST 1137 Peach Street Amount Form Date Received Bond Release Status Bonds and Guarantees: Total Faithful Performance $_________ Bond xxx Can be released upon City acceptance of improvements and deposit of one-year warranty surety. Labor & Materials (50% of total cost of improvements $_________ Bond xxx Can be released 90 days after acceptance of improvements, if no claims. (Civil Code Section 8412) Monument Guarantee $2,000 CD xxx Can be released upon verification that monuments have been set and surveyor has been paid. 10% Warranty $_________ Bond, CD, Letter of Credit To be collected prior to release of Faithful Performance Bond Can be released one-year after acceptance of improvements, if no defects. Fees: Map Check Fee $17,331.98 Check 10/30/20 Paid in full Improvement Plan Check Fee To be collected with building permits Improvement Plan Inspection Fee To be collected with building permits Park Fees1 $31,683.53 Check xxx (fee calculated 12/4/20) Affordable Housing Fee $21,875.00 Check xxx No affordable SFR planned (fee calculated 12/2/20) Water Impact Fee1 To be collected with building permit Wastewater Impact Fee1 To be collected with building permit Transportation Impact Fee1 To be collected with building permit 1 All Impact Fees are adjusted annually (July 1) based on CPI. Credit given for demolished units. Item 8 Packet Page 83 BLANK PAGE This page is intended to be blank so that you can print double-sided. Item 8 Packet Page 84 Department Name: Community Development Cost Center: 4003 For Agenda of: April 20, 2021 Placement: Consent Estimated Time: N/A FROM: Michael Codron, Community Development Director Prepared By: Walter Oetzell, Assistant Planner SUBJECT: AUTHORIZATION TO INCLUDE THE PROPERTY AT 79 BENTON WAY IN THE CITY’S INVENTORY OF HISTORIC RESOURCES AS A MASTER LIST RESOURCE (ELBERT EARLE CHRISTOPHER HOUSE) RECOMMENDATION As recommended by the Cultural Heritage Committee (CHC), adopt a Resolution (Attachment A) including the property at 79 Benton Way in the City’s Inventory of Historic Resources as a Master List Resource. DISCUSSION Background Susan and Mark Hoffman, represented by James Papp, have requested that the property at 79 Benton Way be designated as a Master List Resource in the City’s Inventory of Historic Resources, as The Elbert Earle Christopher House. The property is not currently included in the Inventory of Historic Resources, nor is it located within an Historic District. Previous Council or Advisory Body Action On March 22, 2021 the Cultural Heritage Committee considered this request and found that the property meets eligibility criteria for historical listing as a Master List Resource and recommended, by a 4-0 vote (with one member absent and one member recused), that the City Council designate the property as such in the City’s Inventory of Historic Resources (see Draft Minutes, Attachment B)1. Site and Setting The property is on the west side of Benton Way, about 60 feet north of Murray Street, in Mount Pleasanton Square, a residential neighborhood developed in the 1920s and 1930s, which includes a variety of architecturally and historically important homes. Predominant architectural styles are Mission Revival, Spanish Colonial revival, Tudor Revival, Craftsman, and California Bungalow, reflecting popular architectural styles of that time. 1 Meeting Minutes from the March 22nd Cultural Heritage Committee meeting are provided in Draft form at this time, as they have not yet been reviewed and approved by the Committee Item 9 Packet Page 85 The area is not within any historic district but was included in a late 1990s Cultural Heritage Committee review of the larger Mt. Pleasanton Square / Anholm area, which resulted in the nomination of 84 properties for inclusion in the City’s Inventory of Historic Resources. The subject property was developed with a single-family dwelling (see Figure 2), built in 1931-1932.2 Building Architecture As described in the Historical Evaluation prepared for the applicant by James Papp, PhD, Historian and Architectural Historian (Attachment C), the dwelling escapes easy architectural classification, suggesting Tudor, but departing from it with its low roof pitch, and in any event exhibiting the restraint in detailing associated with the Minimal Traditional style.3 The City’s Historic Context Statement describes the style as having its origins in the principles of the Modern movement, and reflecting a desire for greater efficiency and reduced costs to keep homes affordable to the middle class. The dwelling was built by Elbert Earle Christopher, a farmer from Oklahoma who emigrated to the area after World War I and became active locally as a builder from the late 1920s.4 The architectural and historical characteristics of the building are more fully discussed in the Historical Evaluation submitted with this application, and summarized in the Evaluation section of this report, below. EVALUATION Criteria for Historic Listing To be eligible for listing as an historic or cultural resource, the resource must exhibit a high level of historic integrity, be at least 50 years old, and meet one or more of the eligibility criteria described in § 14.01.070 of the Historic Preservation Ordinance (see Attachment D). As provided in §14.01.050 of the Ordinance, the most unique and important resources and properties in terms of age, architectural or historical significance, rarity, or association with important persons or events in the City’s past may be designated as “Master List Resources.” 2 Papp, Historical Evaluation (AttachmentC1), pg. 1 3 A description of the home’s architecture is provided from pg. 18 of the Historical Evaluation (Attachment C). 4 See from pg. 17 of the Historical Evaluation (Attachment C) for further biographical information about the builder. Figure 1: 79 Benton Way Item 9 Packet Page 86 Architectural Criteria (§ 14.01.070 (A)): Character-defining features of the Minimal Traditional Style are described in the City’s Historic Context Statement to include: ▪One-story ▪Simple rectangular plan ▪Medium or low-pitched hip or side-gable roof with shallow eaves ▪Smooth stucco wall cladding, often with wood lap or stone veneer accents ▪Shallow entry porch with slender wood supports ▪Fixed wooden shutters ▪Minimal decorative exterior detailing As described and depicted in pages 18 -25 of the applicant’s Historical Evaluation, the dwelling exhibits many of these characteristic features: The Christopher house retains its character-defining overall design of two nested ells with mid-pitch roofs, displaying front and south-facing side gables, with the close-clipped rakes and eaves and spare use of windows of the Minimal Traditional and absence of surface decoration of the later and more abstracted Minimal Traditional. (pg. 23) This section of the Historical Evaluation also details notable interior features of the home: Christopher focused his attention on form: not just the exterior double-ell but a directional interior that the exterior expresses. The low barrel vault of the living room draws the visitor from vestibule to a fireplace pushout relieved by graduated niches that both echo the vault and are echoed by flanking windows with views of Cerro San Luis. French doors look grandly down to the street. Descent to the sunken dining room is at right. The tower bedroom is in itself a master touch, its swagged ceiling more so… (pp. 20-21) Historic Criteria (§ 14.01.070 (B)): A timeline of the property, including a brief listing of its known occupants, is provided on page 2 of the Historical Evaluation. These occupants reflect the range of educators, business owners and professionals that populated the Mount Pleasanton neighborhood, but the evaluation does not indicate a relevant association with singular and important historical events and patterns or significance to the community rising to a level of significance that would satisfy Historic Criteria described in § 14.01.070 (B) of the Historic Preservation Ordinance. Item 9 Packet Page 87 Integrity (§ 14.01.070 (C)): The dwelling remains in its original location, and in the discussion of the integrity of its design5 the various character-defining elements of the home are discussed, concluding that it satisfies the criteria for Integrity set out in § 14.01.070 (C) of the Historic Preservation Ordinance: Overall, the house retains more than enough of its character to communicate its significance as an innovative, abstracted example of Minimal Traditional architecture with some extraordinary interior features. (pg. 24). Conclusion In considering the application and reviewing the historical evaluation of the property provided in support of the historical listing request (Attachment C), the Cultural Heritage Committee found that the primary dwelling on the property satisfies Evaluation Criteria for Architectural Style and Design and for Integrity described in §§ 14.01.070 (A & C) of the City’s Historic Preservation Ordinance, as representative of the Minimal Traditional style and having largely retained its historic character. Furthermore, they found that this particular unusual representation of the style and its distinctive interior elements satisfy Architectural Criteria to a degree that qualifies the property for designation as a Master List Resource (see Meeting Minutes, Attachment B.) Policy Context The recommended action on this item is supported by historical preservation policies set out in § 3.0 of the Conservation and Open Space Element of the City’s General Plan, and with procedures and standards for listing of historic resources set out in the City’ s Historic Preservation Ordinance §§ 14.01.060 & 14.01.070. Public Engagement Public notice of this hearing has been provided to owners and occupants of property near the subject site, and published in a widely circulated local newspaper, and hearing agendas for this meeting have been posted at City Hall, consistent with adopted notification procedures. Public notice was also previously provided for the Cultural Heritage Committee meeting of March 22, 2021. ENVIRONMENTAL REVIEW This action is categorically exempt from the provisions of the California Environmental Quality Act (CEQA). Inclusion of the subject properties on the City’s Inventory of Historic Resources does not have the potential for causing a significant effect on the environment, and so is covered by the general rule described in § 15061 (b) (3) of the CEQA Guidelines. FISCAL IMPACT Budgeted: No Budget Year: 2020-21 Funding Identified: No 5 Historical Evaluation (Attachment C), from pg. 23 Item 9 Packet Page 88 Fiscal Analysis: Funding Sources Current FY Cost Annualized On-going Cost Total Project Cost General Fund N/A State Federal Fees Other: Total N/A $ 0.00 $ 0.00 Adding a property to the Master List of Historic Resources will have no fiscal impact as the historic designation of the property itself has no bearing on City fiscal resources. ALTERNATIVES 1.Include the property in the City’s Inventory of Historic Resources as a Contributing List Resource, as a resource that has maintained its original or attained architectural character, and which contributes, either by itself or in conjunction with other structures, to the unique or historic character of its neighborhood, and to the City as a whole. 2.Continue consideration of the request with direction to the applicant and staff on pertinent issues. 3.Decline to include the property in the City’s Inventory of Historic Resources, based on finding that the property does not satisfy Evaluation Criteria for historic listing to a degree warranting designation as an historic resource. This alternative is not recommended because the applicant has provided an Historical Evaluation supporting a conclusion that the property meets the applicable Listing Criteria set out in the City’s Historic Preservation Ordinance. Attachments: a - Draft Resolution b - CHC Draft Minutes of 03/22/2021 c - COUNCIL READING FILE - Historical Evaluation by James Papp d - Evaluation Criteria Item 9 Packet Page 89 R ______ RESOLUTION NO. _____ (2021 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, ADDING THE PROPERTY LOCATED AT 79 BENTON WAY TO THE MASTER LIST OF HISTORIC RESOURCES AS “THE ELBERT EARLE CHRISTOPHER HOUSE” (HIST-0675-2020) WHEREAS, the applicants, Susan and Mark Hoffman, filed an application on December 23, 2020, for review of the inclusion of the property at 79 Benton Way on the City’s Master List of Historic Resources; and WHEREAS, the Cultural Heritage Committee of the City of San Luis Obispo conducted a public hearing via teleconference from the City of San Luis Obispo, California on March 22, 2021 and recommended that the City Council add the property at 79 Benton Way to the Master List of Historic Resources; and WHEREAS, the City Council of the City of San Luis Obispo conducted a public hearing on April 20, 2021 for the purpose of considering the request to add the properties to the Inventory of Historic Resources; and WHEREAS, notices of said public hearings were made at the time and in the manner required by law; and WHEREAS, the City Council has duly considered all evidence, including the record of the Cultural Heritage Committee hearing and recommendation, testimony of the applicant and interested parties, and the evaluation and recommendation presented by staff. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Findings. Based upon all the evidence, the City Council makes the following findings: a) The subject property is eligible for inclusion in the City’s Inventory of Historic Resources as a Master List Resource because the dwelling on the property satisfies at least one of the evaluation criteria for historic resource listing described in § 14.01.070 of the City’s Historic Preservation Ordinance (HPO), exhibits a high degree of historic integrity, and is more than 50 years old. b) The dwelling on the subject properties satisfies evaluation criteria related to architectural style (HPO §14.01.070 (A)). It conveys a purity of style, exhibits attractiveness through detailing and craftsmanship, expresses interesting details and eclecticism among carpenter-builders, and is a rare example within the City of the Minimal Traditional Style that, in addition to its exterior character-defining features, possesses an unusual “double-L” floor plan and distinctive interior details and features. The building occupies its original site, with its exterior and interior largely unaltered, and retains its characteristic design and materials, satisfying criteria for Integrity (HPO § 14.01.070 (C)). Item 9 Packet Page 90 Resolution No. _____ (2021 Series) Page 2 R ______ SECTION 2. Environmental Determination. The project is categorically exempt from the provisions of the California Environmental Quality Act (CEQA). Inclusion of the subject properties on the City’s Inventory of Historic Resources does not have the potential for causing a significant effect on the environment, and so is covered by the general rule described in § 15061 (b) (3) of the CEQA Guidelines. SECTION 3. Action. The City Council of the City of San Luis Obispo does hereby include the property located at 79 Benton Way in the Master List of Historic Resources as “The Elbert Earle Christopher House.” Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this ___ day of ______ 2021. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ___________________________. ____________________________________ Teresa Purrington City Clerk Item 9 Packet Page 91 Minutes – Cultural Heritage Committee Meeting of March 22, 2021 Page 1 Minutes CULTURAL HERITAGE COMMITTEE Monday, March 22, 2021 Regular Meeting of the Cultural Heritage Committee CALL TO ORDER A Regular Meeting of the San Luis Obispo Cultural Heritage Committee was called to order on Monday, March 22, 2021 at 5:30 p.m. via teleconference, by Chair Shannon Larrabee. ROLL CALL Present: Committee Members Damon Haydu, Glen Matteson, Wendy McFarland, Vice Chair Eva Ulz, and Chair Shannon Larrabee Absent: Committee Member Karen Edwards Staff: Senior Planner Brian Leveille, Assistant Planner Walter Oetzell, and City Clerk Teresa Purrington PUBLIC COMMENTS ON ITEMS NOT ON THE AGENDA John Ashbaugh James Papp --End of Public Comment-- CONSIDERATION OF MINUTES 1. Approve the minutes of the February 22, 2021 Cultural Heritage Committee meeting. ACTION: UPON MOTION BY VICE CHAIR ULZ, SECONDED BY COMMITTEE MEMBER MATTESON, CARRIED 5-0-1 (Member Edwards absent), to approve the minutes of the February 22, 2021 Cultural Heritage Committee meeting. PUBLIC HEARING ITEMS 2. 79 Benton Way. Review of a request to include the property at 79 Benton Way in the City’s Inventory of Historic Resources as a Master List Resource (Elbert Earle Christopher House). This action is categorically exempt from CEQA environmental review; Project Address: 79 Benton Way; Case #: HIST-0675-2020; Zone R-1; Susan and Mark Hoffman, owner/applicant. Vice Chair Ulz indicated she would be recusing herself from this item as she has a financial interest in the consulting firm that worked on the project. Vice Chair Ulz left the meeting at 5:42 p.m. Item 9 Packet Page 92 Minutes – Cultural Heritage Committee Meeting of March 22, 2021 Page 2 Assistant Planner Walter Oetzell presented the staff report and responded to Committee inquiries. Applicant Susan Hoffman, and Applicant representative James Papp provided a presentation and responded to Commissioner inquiries. Public Comment None --End of Public Comment-- ACTION: UPON MOTION BY COMMITTEE MEMBER HAYDU, SECONDED BY COMMITTEE MEMBER MATTESON, CARRIED 4-0-1-1 (Vice Chair Ulz recused and Member Edwards absent) to include the property at 79 Benton Way in the City’s Inventory of Historic Resources as a Master List Resource (Elbert Earle Christopher House) based upon its representation of the Minimal Traditionalist style, its unique floor plan, and distinctive interior features. COMMENT AND DISCUSSION Senior Planner Leveille provided an agenda forecast. ADJOURNMENT The meeting was adjourned at 6:53 p.m. The next Regular Cultural Heritage Committee meeting is scheduled for Monday, April 26, 2021 at 5:30 p.m., via teleconference. APPROVED BY THE CULTURAL HERITAGE COMMITTEE: XX/XX/2021 Item 9 Packet Page 93 12 Zoning, or remove the property from historic listing if the structure on the property no longer meets eligibility criteria for listing, following the process for listing set forth herein. 14.01.070. Evaluation Criteria for Historic Resource Listing When determining if a property should be designated as a listed Historic or Cultural Resource, the CHC and City Council shall consider this ordinance and State Historic Preservation Office (“SHPO”) standards. In order to be eligible for designation, the resource shall exhibit a high level of historic integrity, be at least fifty (50) years old (less than 50 if it can be demonstrated that enough time has passed to understand its historical importance) and satisfy at least one of the following criteria: A. Architectural Criteria: Embodies the distinctive characteristics of a type, period, region, or method of construction, or represents the work of a master, or possesses high artistic values. (1) Style: Describes the form of a building, such as size, structural shape and details within that form (e.g. arrangement of windows and doors, ornamentation, etc.). Building style will be evaluated as a measure of: a. The relative purity of a traditional style; b. Rarity of existence at any time in the locale; and/or current rarity although the structure reflects a once popular style; c. Traditional, vernacular and/or eclectic influences that represent a particular social milieu and period of the community; and/or the uniqueness of hybrid styles and how these styles are put together. (2) Design: Describes the architectural concept of a structure and the quality of artistic merit and craftsmanship of the individual parts. Reflects how well a particular style or combination of styles are expressed through compatibility and detailing of elements. Also, suggests degree to which the designer (e.g., carpenter-builder) accurately interpreted and conveyed the style(s). Building design will be evaluated as a measure of: a. Notable attractiveness with aesthetic appeal because of its artistic merit, details and craftsmanship (even if not necessarily unique); b. An expression of interesting details and eclecticism among carpenter-builders, although the craftsmanship and artistic quality may not be superior. (3) Architect: Describes the professional (an individual or firm) directly responsible for the building design and plans of the structure. The architect will be evaluated as a reference to: Item 9 Packet Page 94 13 a. A notable architect (e.g., Wright, Morgan), including architects who made significant contributions to the state or region, or an architect whose work influenced development of the city, state or nation. b. An architect who, in terms of craftsmanship, made significant contributions to San Luis Obispo (e.g., Abrahams who, according to local sources, designed the house at 810 Osos - Frank Avila's father's home - built between 1927 – 30). B. Historic Criteria (1) History – Person: Associated with the lives of persons important to local, California, or national history. Historic person will be evaluated as a measure of the degree to which a person or group was: a. Significant to the community as a public leader (e.g., mayor, congress member, etc.) or for his or her fame and outstanding recognition - locally, regionally, or nationally. b. Significant to the community as a public servant or person who made early, unique, or outstanding contributions to the community, important local affairs or institutions (e.g., council members, educators, medical professionals, clergymen, railroad officials). (2) History – Event: Associated with events that have made a significant contribution to the broad patterns of local or regional history or the cultural heritage of California or the United States. Historic event will be evaluated as a measure of: (i) A landmark, famous, or first-of-its-kind event for the city - regardless of whether the impact of the event spread beyond the city. (ii) A relatively unique, important or interesting contribution to the city (e.g., the Ah Louis Store as the center for Chinese-American cultural activities in early San Luis Obispo history). (3) History-Context: Associated with and also a prime illustration of predominant patterns of political, social, economic, cultural, medical, educational, governmental, military, industrial, or religious history. Historic context will be evaluated as a measure of the degree to which it reflects: a. Early, first, or major patterns of local history, regardless of whether the historic effects go beyond the city level, that are intimately connected with the building (e.g., County Museum). b. Secondary patterns of local history, but closely associated with the building (e.g., Park Hotel). Item 9 Packet Page 95 Department Name: Finance Cost Center: 2002 For Agenda of: April 20, 2021 Placement: Business Item Estimated Time: 120 minutes FROM: Derek Johnson, City Manager Prepared By: Brigitte Elke, Finance Director Natalie Harnett, Principal Budget Analyst SUBJECT: 2021-23 FINANCIAL PLAN - STRATEGIC BUDGET DIRECTION AND MAJOR CITY GOAL WORK PROGRAM REVIEW RECOMMENDATION 1. Review the strategic budget direction report (Attachment A); and 2. Provide feedback and guidance to the City Manager regarding the recommended strategic budget direction and proposed budget allocations to commence budget adoption on June 1, 2021. REPORT-IN-BRIEF The City of San Luis Obispo’s two-year budget approach has a long tradition of involving the community in its goal setting process, emphasizes long-range financial planning, and supports effective program management. Despite the Covid-19 pandemic, the City was able to continue its commitment to community involvement with multiple public City Council sessions, an online survey, and the first virtual Community Forum on January 19, 2021. Strategic Budget Direction is a critical next step in the development of the two-year Financial Plan for all of the City’s major funds (General, Water, Sewer, Parking and Transit Funds) and is based on the highest priorities determined through the community and the Council Goal-Setting process. The primary purpose of Strategic Budget Direction is for the Council to provide direction on: 1. Major City Goal Work Programs. 2. Significant Operating Budget Changes (SOBCs). 3. Capital Improvement Plan (CIP) with projects focused on asset maintenance, replacement, and new assets. This critical juncture affords the City Council an early review of key budget allocations and proposed work programs to accomplish ongoing services as well as Major City Goals established by the City Council in February 2021. Strategic Budget Direction therefore gives the City Council an opportunity to provide direction on any refinements to the work programs and resource allocations to fully achieve the Council’s desired outcomes over the next two-year Financial Plan period. Item 10 Packet Page 97 This report also provides an updated long-term fiscal forecast and the City’s financial position under which the Major City Goals, the City’s ongoing community services, and CIP will be implemented. The forecast incorporates all financial obligations to fully operate the City and implement the recommended Major City Goal objectives. Within the report, staff has summarized information and recommendations for Council to review and provide guidance to the City Manager in the development of the Financial Plan and budget. The individual sections of the report are intended to provide detailed information on each topic and cover: A. Financial Forecasts. The City’s long-term financial outlook including an updated1 five-year forecast. B. Major City Goals (MCG). Proposed work programs for MCGs including resource allocations. C. Ongoing Community Services. Proposed budget allocations. D. Local Revenue Measure Revenues and Uses. Proposed use of the local revenue measure that reflects recommendations by the Revenue Enhancement Oversight Commission. E. Significant Operating Budget Changes (SOBC). Proposed SOBCs for optimal service and Major City Goal work program delivery for the General Fund. F. Capital Improvement Plan (CIP). Five-Year CIP Projects for the General Fund including projects funded through the Local Revenue Measure. G. Enterprise Funds. The four Enterprise Funds’ long-term forecasts and work programs including SOBCs and CIP. H. Policy Changes. Recommended policy changes or amendments for long-term fiscal health. DISCUSSION The development of the two-year financial plan began in October 2020 and included numerous informational meetings and presentations with the community and Council to “set the stage” and lay the budget foundation. Extensive public engagement included a community survey, outreach to community groups, and a first virtual Community Forum due to the restriction of the Covid -19 health emergency. These efforts resulted in direction and feedback from the City Council that shaped the strategic planning and the Major City Goal priorities for the 2021-23 Financial Plan period. Based on the input and feedback received, the Council met on February 6, 2021, and after thoughtful deliberation, selected four strategic goals and gave direction to staff to establish appropriate work programs to achieve the desired outcome. Each of the four goals was to be crafted through the lens of the defined Vision Statement and each work program endeavor ed to leverage the synergies and nexus between each respective goal and the City’s ongoing service delivery. 1 The National, State and Local economy forecasts are being closely monitored and have been adjusted to incorporate the latest actual economic data and related revenue projections. A 2020-21 3rd quarter Financial Report will be presented in May 2021 that compares the latest budget to actual for the current fiscal year. Item 10 Packet Page 98 Fiscal Outlook The goals were crafted in consideration of the fiscal realities facing the City, its long -term financial well-being, the services the City provides the community on an ongoing basis, as well as its recovery from the pandemic. It is important to consider program and operating budget requests within the context of the realities the City has experienced since late 2019 and early 2020. The worldwide pandemic brought on by Covid-19 required the City to freeze budgets for the last quarter of fiscal year 2020 and continue with similar budget appropriations in 2020 -21 as the previous fiscal year. It also delayed or removed funding for capital infrastructure projects to balance the budget due to anticipated revenue loss. This loss, due to the shelter -in-place orders and related restrictions in the economy, amounted to $4.5 million revenue loss in 2019 -20 and is expected to yield a similar loss for the current fiscal year largely due to declines in sales and lodging tax as well as Parks & Recreation fees. However, the swift action by the City Council and City management as outlined above kept the City in positive fiscal standing, allowing the Council to make investments in the community and support the economic recovery from unassigned fund balance. As staff expects a return to “normal” over the remainder of the 2021 calendar year, the need to address resource deficiencies and catch up on programs addressing pent-up customer demand manifests itself in requests for operating budget and capital infrastructure funding for the next two-year Financial Plan. American Rescue Plan – Federal Stimulus Funding As a small city with under 500,000 in population, San Luis Obispo did not receive any direct CARES act funding from the Federal Government. It did receive $566,236 from the State that was appropriated towards emergency measures in response to the Covid-19 pandemic. These funds were roughly split to reimburse the City for emergency expenses which amount to over $2.1 million and fund homeless response and economic recovery efforts. On March 6, 2021, the Federal Government released a second stimulus bill known as the American Rescue Plan (ARP), releasing $1.9 trillion in funding. In a historic move, the bill includes direct payments to 19,000 municipalities in the nation and San Luis Obispo will receive $8.93 million to counter-act the far-reaching effects of the pandemic on the community’s well- being. For a jurisdiction such as the City, funding will come through the State which has 60 days to release the first half with the second 50% being distributed a year later. Jurisdictions have until December 31, 2024 to spend the funding. The restrictions on the use of funds are few, but it clearly denotes that it cannot be used to fund pension obligations. Staff recommends using the funding pursuant to: “For the provision of government services to the extent of the reduction in revenue of such State, territory, or Tribal government due to the Covid–19 public health emergency relative to revenues collected in the most recent full fiscal year of the State, territory, or Tribal government prior to the emergency.” Item 10 Packet Page 99 Considering the City’s revenue in sales tax, transient occupancy tax, and Parks & Recreation fees in 2018-19, $4.4 million were lost in 2019-20 and a further loss of $4.5 million is expected in 2020-21 in those three revenue categories. The ARP funding will therefore assist in reinstating frozen positions, provide funding for homelessness and housing, and invest in capital projects that had to be defunded due to the revenue shortfall. It will therefore allow the City to remove Fiscal Health Contingency Plan restrictions earlier than otherwise possible. STRATEGIC BUDGET DIRECTION REPORT LONG-TERM FISCAL FORECAST – SECTION A This section contains the five-year forecasts for the City’s five major funds. It leads with the 1) General Fund, followed by 2) Water, 3) Sewer, 4) Parking, and 5) Transit. Per the City’s fiscal policies, the two-year budget proposal within the Financial Plan must be balanced2. The forecast can indicate potential issues in the outer years to alert the City Council of potential structural corrective measures, should the assumptions hold true. However, if 2020 has showcased anything, unpredictability and forecasting of longer-term assumptions are difficult and subject to change. Nonetheless, Staff is committed to provide the Council the most professional and judicious assessment for informed financial decision making. Fiscal Year 2021-22 will mark the first full year with revenue from the November 2020 voter - approved sales tax measure. This can be seen in the increase in sales tax revenue projections as well as in the investment in infrastructure under Capital expenditures. The measure will also support operating budgets in the areas that correspond with the measure language to increase services to the community. For the upcoming two-year financial plan, increases in operating budgets are also made possible due to the American Rescue Plan (ARP) stimulus funding made available by the Federal Government to counteract the devastating revenue losses experienced during the Covid-19 pandemic. The local sales tax measure became effective on April 1, 2021, and funding received during the first quarter was dedicated to economic recovery and reopening efforts as recommended by the Revenue Enhancement Oversight Commission and approved by the City Council. General Fund – Five-Year Forecast* (in thousands) 2021-22 2022-23 2023-24 2024-25 2025-26 Revenue $99,801 $103,748 $101,410 $103,412 $105,315 Expenditure $98,849 $103,717 $100,542 $103,178 $105,157 Over/Under $951 $32 $868 $234 $158 *all numbers shown in thousands The City’s four enterprise funds for the Water and Sewer Utilities, Parking, and Transit also prepare a long-term forecast which can be found under Section G of the Strategic Budget Direction report. 2 City of San Luis Obispo Budget Policies: A. Balanced Budget. The City will maintain a balanced budget over the two-year period of the Financial Plan. Item 10 Packet Page 100 MAJOR CITY GOALS FOR 2021 THROUGH 2023 – SECTION B City Council Vision for its 2021-23 Major City Goals The City of San Luis Obispo is a dynamic community embracing its future while respecting its past with core values of civility, sustainability, diversity, inclusivity, regionalism, partnership, and resiliency. Major City Goals Work Programs The major city goal work programs identify the fiscal resources for programmatic and capital efforts to achieve the recommended milestones within each goal. The four goals are largely a continuation along the trajectory of previous Council goals established during the last financial plan except for Diversity, Equity, and Inclusion (DEI). Each work program has been uniquely crafted to respond to discrete direction while continuing efforts that span multiple financial plans. The investments have also considered the City’s current service levels to the community to assess investments in the established work programs. As such, the budget included in the strategic budget direction is balanced between current services to the community and the program cost included in each major city goal. Council review is now requested to ensure that staff’s proposed work programs appropriately fulfill the Council’s vision for the established goals over the next two years. Section B of the report includes the strategic approach and individual work efforts. Economic Recovery, Resiliency & Fiscal Sustainability – Goal Statement In collaboration with local partners, continue to support economic recovery for all from the Covid-19 pandemic and support a thriving local economy by supporting local businesses, arts and culture, downtown vitality, practicing fiscal responsibility, paying down unfunded pension liabilities, and investing in critical infrastructure. Outcomes and Expectations The City will: 1. Engage and expand upon community partnerships and invest in infrastructure, promotion, programs, and polices that support the economic and social recovery and resiliency of the community while ensuring fiscal sustainability. 2. Additional focus will be placed on the retention of existing businesses, the recovery of arts and culture, the vitality of the downtown, and supporting underserved groups and populations. 3. Additionally, all actions will be viewed through the lens of the City’s sustainability and DEI efforts. The outcomes associated with this goal are the retention and attraction of business, fiscal sustainability, support of arts and culture projects, a vibrant and active downtown, pre- payment of unfunded pension liabilities, and investment in key infrastructure. Item 10 Packet Page 101 Investment in the Economic Recovery, Resiliency, & Fiscal Sustainability Major City Goal Table 1: 2021-23 Financial Plan Major City Goals 2021-22 2022-23 1 Ongoing Community Services $6,522,764 $6,357,764 2 New Operating Investments $2,592,968 $1,865,440 3 Capital Infrastructure Projects $3,462,500 $8,089,500 Total $12,578,232 $16,312,704 Housing and Homelessness – Goal Statement In order to expand housing options for all, continue to facilitate the production of housing, including the necessary supporting infrastructure, with an emphasis on affordable and workforce housing. Collaborate with local non-profit partners and the county, the state, and federal governments to discover and implement comprehensive and effective strategies to reduce chronic homelessness. Outcomes and Expectations The City will: 1. Prioritize new and ongoing Housing Element policies and programs that focus on facilitating the increased production of affordable and workforce housing, in addition to market rate housing. 2. Engage with the community, regional agencies, local non-profit partners, and the Federal government to leverage resources to be utilized to implement strategies that reduce homelessness. The outcomes will be new housing production, infrastructure that supports housing, affordable housing partnerships, less persons that are unhoused, pilot programs that can be supported on an ongoing basis and increased funding and engagement from state and county governments in support of these outcomes at a local level. Investment in the Housing and Homelessness Major City Goal Table 2: 2021-23 Financial Plan Major City Goals 2021-22 2022-23 1 Ongoing Community Services $1,155,364 $1,131,324 2 New Operating Investments $1,133,597 $1,077,226 3 Capital Infrastructure Projects $9,090,100 $25,105,817 Total $11,379,061 $27,314,367 Diversity, Equity, Inclusion (DEI) – Goal Statement In response to our commitment to making San Luis Obispo a more welcoming and inclusive city for all, continue to develop programs and policies to support diversity, equity, and inclusion initiatives and advance the recommendations of the DEI Task Force. Item 10 Packet Page 102 Outcomes and Expectations The City will engage in initiatives that advance DEI within the organization and community: 1. Develop and implement strategies, programs and policies that build a workplace culture and community of inclusion, fairness and belonging for all. 2. Involve marginalized communities and diverse voices in program development and delivery to ensure current lived experiences are understood, priorities are addressed, and the City’s efforts are relevant and meaningful. 3. Partner with proven community providers and utilize best practice models to leverage City resources and maximize effectiveness and impact of initiatives. 4. Identify and track measurable results as the City progresses in maturing diversity and inclusion efforts. The outcomes associated with this goal are a more welcoming organization, community, and an improved sense of belonging by marginalized groups. The City will have a richer and more thorough understanding of the challenges that many are experiencing in San Luis Obispo and implement best practices to measure and adjust practices to advance DEI efforts. Investment in the Diversity, Equity, Inclusion Major City Goal Table 3: 2021-23 Financial Plan Major City Goals 2021-22 2022-23 1 Ongoing Community Services $180,500 $191,000 2 New Operating Investments $588,630 $650,097 3 Capital Infrastructure Projects $345,000 $95,000 Total $1,114,130 $936,097 Climate Action, Open Space, & Sustainable Transportation – Goal Statement To proactively address the climate crisis, continue to update and implement the Climate Action Plan for carbon neutrality, including preservation and enhancement of open space and the urban forest, alternative and sustainable transportation, and planning and implementation for resilience. Outcomes and Expectations The City will engage in projects and initiatives that contribute positively toward: 1. Reducing greenhouse gas emissions at both the municipal and community level on a trajectory consistent with the Climate Action Plan target of carbon neutrality by 2035. 2. Achieving the vision to complete and sustain the San Luis Obispo Greenbelt. 3. Integrating best practices for urban forestry throughout the community and City landscape in order to accrue the multiple benefits that trees provide including shading and cooling, beautification, habitat, stormwater retention, and carbon sequestration. Item 10 Packet Page 103 4. Implementation of Tier 1 projects identified in the Active T ransportation Plan (ATP), and planning and investment in transit service enhancements and transit fleet electrification, in order to achieve the mode-share split objectives identified in the Circulation Element of the General Plan. 5. Adapting and becoming more resilient to the impacts of climate change through the Resilient SLO planning process and through increased implementation efforts that address public health and safety. In addition, it is expected that this work must necessarily be integrated and cohesive with the parallel Major City Goals of Diversity, Equity, and Inclusion; Housing and Homelessness; and Economic Recovery, Resilience, and Fiscal Sustainability. The outcomes are reduced community wide and municipal emissions, expanded electrical charging network, more electric city vehicles, expanded open space areas, an improved and increased urban forest, and a community that is better prepared to respond to the vagaries and unpredictability of climate change. Investment in the Climate Action Major City Goal Table 4: 2021-23 Financial Plan Major City Goals 2021-22 2022-23 1 Ongoing Community Services $203,500 $228,500 2 New Operating Investments $667,376 $454,702 3 Capital Infrastructure Projects $14,592,660 $14,397,731 Total $15,463,536 $15,080,933 Overall Investment in all Major City Goals for 2021-23 Combined, the investment over the next two years for the four defined Major City Goals are as follows: Operating Capital Total Investment Operating Capital Total Investment 1 Climate Action, Open Space, Sustainable Transportation 870,876$ 14,592,660$ 15,463,536$ 683,202$ 14,397,731$ 15,080,933$ 2 DEI 769,130$ 345,000$ 1,114,130$ 841,097$ 95,000$ 936,097$ 3 Economic Recovery 9,115,732$ 3,462,500$ 12,578,232$ 8,223,204$ 8,089,500$ 16,312,704$ 4 Housing & Homelessness 2,288,961$ 9,090,100$ 11,379,061$ 2,208,550$ 25,105,817$ 27,314,367$ 5 Total 13,044,699$ 27,490,260$ 40,534,959$ 11,956,054$ 47,688,048$ 59,644,102$ 2021-22 2022-23 Table 5: Total Major City Goal Investment MCG ONGOING COMMUNITY SERVICES – SECTION C The City of San Luis Obispo, like most incorporated cities, provides services to the community on an ongoing basis. Those services are adjusted to the needs of the community and span from parks and recreation services, police and fire departments, housing services, transportation services (including public transportation), and public works (streets and related infrastructure such as multiuse paths, streetlights, bridges, parks maintenance, signage, and so forth). Item 10 Packet Page 104 Those established programs must be considered when budgeting and generally form the base and largest share of the City’s expenditures. Core or ongoing program deliveries are what the community has come to most rely on to meet its day-to-day needs and desired services. To a degree, the goal setting process allows for the discussion on those services and considers trade-offs when new initiatives are desired and the community’s needs change over time. The proposed budget for the 2021-23 Financial Plan considers the following community services that have been established over many years of community input: The table below shows the draft budget allocations by department. These allocations do not include the proposed SOBCs that are listed in Section E. Preliminary budget allocations fluctuate each year due to current employee costs and changes in costs of services and supplies. Historically, the City experiences a 2-5% increase in total operating budget year-over-year. Some outliers include: • Community Services Administration includes the addition of a Public Communications position approved on February 2, 2021 (R 11223). • Parks & Recreation experienced a particularly high increases in their FY 21-22 budgets due to the re-activation of frozen positions that were eliminated in the FY 20-21 supplemental budget due to Covid-19 uncertainties. These expenditure increases are offset by increases in projected revenue for the 21-23 Financial Plan years. • Finance Non-departmental includes contingencies for future wage increases in FY 22-23. Item 10 Packet Page 105 FY 21-22 Base Budget % change from FY21 FY 22-23 Base Budget % increase from FY22 1 Administration & IT 7,697,781$ 7,821,976$ 2%8,187,589$ 5% 2 City Attorney *778,167$ 703,157$ -10%735,588$ 5% 3 Finance 2,054,424$ 2,036,560$ -1%2,111,580$ 4% 4 Finance Non-Departmental 730,358$ 730,358$ 0%2,161,928$ 196% 5 Human Resources*1,350,586$ 1,182,348$ -12%1,212,569$ 3% 6 Police 17,802,862$ 18,960,959$ 7%19,823,240$ 5% 7 Fire 12,615,778$ 13,404,792$ 6%13,644,858$ 2% 8 Community Services Group: 9 Community Services Admin 404,998$ 480,349$ 19%491,351$ 2% 10 Community Development * 5,325,811$ 5,229,559$ -2%5,366,891$ 3% 11 Public Works 13,196,459$ 13,595,504$ 3%14,067,284$ 3% 12 Utilities - Solid Waste 159,318$ 170,699$ 7%176,280$ 3% 13 Parks and Recreation 4,274,301$ 4,737,956$ 11%4,944,660$ 4% 14 Total 66,390,843$ 69,054,217$ 4%72,923,819$ 6% **Adopted budget does not include carryover or budget amendments 2021-23 Financial Plan Years * 20-21 Adopted Budget includes approved one-time SOBCs from the 19-21 Financial Plan; therefore, a reduction is seen in FY 21-22 from the removal of these budget items. FY 20-21 Adopted Budget** Department Table 6: Core Services Operating Budget Allocations (before recommended SOBCs) The budget recommendations for the Utilities, together with Parking and Transit, can be found in Section G – Enterprise Funds LOCAL REVENUE MEASURE – SECTION D The proposed 2021-23 Local Revenue Measure (LRM) operating and capital expenditures were developed using input from the Community Forum, the Major City Goals established by the City Council, updated revenue projections, and the funding priorities developed from the ballot language. This planning was extensive as, with the voter approval in November, the revenue from this measure will grow to $24 million over the next Financial Plan period. On March 31, 2021, the Revenue Enhancement Oversight Commission (REOC) met to review the proposed expenditures and recommended approval by the City Council as presented and outlined in Section D. Based on community input used to create the ballot language for Measure G-20, at the February 18, 2021 meeting, the REOC approved the following ten spending priorities that were used to create the recommended projects and services to be included in the 2021-23 Financial Plan: 1. Protect Financial Stability 2. Community Safety and Emergency Preparedness 3. Creek and Flood Protection 4. Address Homelessness 5. Safe and Clean Public Areas 6. Economic Development and Business Retention 7. Youth/Senior Services and Recreation Facilities 8. Street Maintenance and Transportation (includes bicycle and pedestrian improvements) 9. Open Space/Natural Areas Preservation and Maintenance 10. Other Services and Projects Item 10 Packet Page 106 Previous input from the community and REOC has been to prioritize Local Revenue Measure funds for capital improvement program (CIP) projects. In recent years, expenditures have been split approximately 70% to capital infrastructure and 30% to operating costs. Operating program costs frequently follow and/or support the implementation of CIP projects; for in stance, the construction of a new park will require staff to maintain it. In addition, operating programs deliver essential services that align with Local Revenue Measure priorities. Given this interrelationship, it would not be sustainable to allocate all Local Revenue Measure dollars solely to CIP projects without related operating program support to implement the projects nor would this approach address some of the expectations from the public for services to maintain and safeguard community programs and assets. In the 2021-23 Financial Plan, expenditures are proposed to be budgeted at 75% capital and 25% operating costs, with an expectation of a range in future years of approximately 85% capital and 15% operating costs in order to meet the non-fair requirements of the City’s AB 1600 Development Impact Fee Program and keep up with maintenance. The reason for the increased operating allocation during the 2021-23 Financial Plan is two-fold. First, there is an increase of one-time funding that will help provide immediate economic recovery resources and other operating resources needed to help the community’s recovery from the Covid-19 pandemic and other emergent priorities. Second, it allows the City time to ramp -up the operating resources necessary to deliver on the ambitious Capital Improvement Plan. The split between CIP and operating costs for the 2021-23 Financial Plan are listed below: Table 7: Investment in Capital Projects Investment in Operating programs 1 FY 2021-22 $17,866,400 $6,285,392 2 FY 2022-23 $18,763,050 $6,273,051 A full breakdown of budget allocations and LRM uses can be found in Attachment A under Section D. SIGNIFICANT OPERATING BUDGET CHANGES – SECTION E As a cost control measure, the City requires increases to departmental budget line items in the programs above $7,500 to be justified and approved by the City Manager before being brought forward for Council consideration. A request can be brought forth for a variety of reasons, but is generally considered under the following circumstances: A. Essential for the protection of health and safety. B. Needed for the advancement of Major City Goals. C. Needed to provide ongoing services to the community. D. Realign ongoing services after budget cuts due to Covid-19. Item 10 Packet Page 107 SOBC requests are divided into two categories: 1) one-time for specific deliverables without ongoing service requirements; 2) ongoing to adjust the operating program budget for long -term service delivery. Given the short-term saving measures required due to the onset of the Covid-19 health emergency, a multitude of requests were submitted to bring service levels back to pre -pandemic levels and adjust to forecasted workload and service level requirements. A detailed listing of the requests can be found in Section E of the attached report. The City’s Financial Plan Steering Committee reviewed the requests and recommends the following investments in SOBCs. Connected to delivery of MCGs: Table 8: Major City Goal SOBCs (all funds)21-22 22-23 1 One-time 2,966,886$ 2,026,009$ 2 Climate Action 349,972$ 127,437$ 3 DEI 389,732$ 435,102$ 4 Economic 1,564,857$ 867,644$ 5 Housing & Homelessness 662,326$ 595,826$ 6 Ongoing 2,015,686$ 2,021,455$ 7 Climate Action 317,405$ 327,265$ 8 DEI 198,898$ 214,995$ 9 Economic 1,028,112$ 997,795$ 10 Housing & Homelessness 471,271$ 481,400$ 11 Total 4,982,572$ 4,047,465$ SOBC Funding Connected to Ongoing Community Service Delivery: Table 9: Core Services SOBC Funding (all funds)21-22 22-23 1. One-time 985,554$ 473,774$ 2. Ongoing 1,771,899$ 2,410,341$ Grand Total 2,757,453$ 2,884,115$ SOBC Funding CAPITAL IMPROVEMENT PLAN – SECTION F The Capital Improvement Program (CIP) and its annual implementation of projects is one of the primary functions of local government. Through its adopted CIP, the City meets community needs by providing the infrastructure required for economic vitality, neighborhood wellness, housing, transportation, sustainability, active and passive recreation, public safety, cleanliness, and other basic amenities. Item 10 Packet Page 108 City staff engage in a rigorous ranking and review process to develop a Capital Improvement Project Plan for Council consideration that both aligns with MCGs and addresses ongoing maintenance needs, and infrastructure improvements to support the orderly development of the community in alignment with mitigations, policies, and other development standards. Th e program now considers the new local sales tax measure that will provide an additional $13 million for infrastructure maintenance and improvements bringing the total infrastructure investment from this revenue source to about $18 million for the financial plan years. Through the CIP, the City systematically plans, schedules, and finances capital projects to ensure cost-effectiveness and conformance with established policies. With each two-year Financial Plan, the City prepares five-year CIP program recommendations for Council consideration and approval. Even though only the first two years are funded within the Financial Plan, five -year planning is a best practice and is recommended to achieve long-term objectives of the Capital Improvement Program. Comprehensive policies governing the development and management of the CIP are set forth in the fiscal policies. All the City’s construction projects, and equipment purchases costing $25,000 or more are included in the Capital Improvement Plan. To assist the City Manager in developing the recommended CIP for the 2021-23 Financial Plan, a designated CIP Review Committee evaluated all departmental requests to determine priority, timing, and cost. In doing so eight key questions served as a framework for this ex tensive analysis and included focus on DEI, Sustainability and implementation of community priorities associated with the local revenue sales tax measure. Based on prior Council direction and public input regarding the importance of maintaining existing infrastructure, City staff put all project requests in the following three categories. 1. Annual Asset Maintenance 2. Asset Replacement 3. New Assets Table 10: ID Project Type FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 Sum of 5 Year Total 1 Annual Asset Maintenance $19,738,490 $23,033,876 $18,692,315 $19,103,830 $17,807,501 $98,376,012 2 Asset Replacement $27,634,664 $22,686,846 $11,255,001 $2,920,001 $63,182,001 $127,678,513 3 New Asset $13,019,500 $20,243,597 $46,902,000 $67,555,000 $6,265,000 $153,985,097 4 CIP Project Delivery Augmentation $500,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $4,500,000 5 Grand Total $60,892,654 $66,964,319 $77,849,316 $90,578,831 $88,254,502 $384,539,622 As mentioned above, the City’s capital budget has grown significantly as a result of the local sales tax measure and the potential for leveraging capital budget dollars further with federal government grants. To deliver these projects, the City may need additional engineering and/or project delivery staffing resources. The City is currently working in partnership with a consultant to analyze the project staff and structure required to deliver the projects over both the two -year and the five- year time horizon. As identified in the table above, a general cost estimate for this consideration is provided. Item 10 Packet Page 109 Table 11: Water Rate Increases 2021 - 22 Proposed 2022 - 23 Proposed 2023 - 24 Projected 3 .5% 3 .5% 3. 5 % ENTERPRISE FUNDS – SECTION G G-1: Water Fund Fund Overview & Forecast The Water Fund safely and continuously provides water to the community. This requires securing raw water from three surface reservoirs, treating it to potable water standards, and delivering it to nearly 16,000 water service accounts, while continually maintaining and improving infrastructure. These City water operations rely on service rate revenue to cover almost all costs for operations and maintenance, infrastructure replacement, debt service, and payment for general City services provided to the fund (cost allocation). Taxes, including the Utility User Tax, do not support these services. Despite the uncertainty created by the Covid -19 pandemic, the Water Fund’s financial position is currently stable. At the onset of the pandemic, and associated stay -at-home order and business closures, the potential impact to the Water Fund was uncertain. The Utilities Department has closely monitored revenue since March 2020 and, while there has been some shift in usage patterns in residential and commercial sectors, overall, there has been no significant net impact to Water Fund revenue. Overall, the Water Fund’s long-term fiscal outlook is in line with original forecasts and can be found in Section G-1 of Attachment A. Rate Increases The Water Fund will be requesting a rate increase of 3.5% effective July 1, 2021 and 3.5% effective July 1, 2022. The most recent rate study, conducted in 2018, projected the water rate increase would be 5.5% in 2021 and 5.5% in 2022. The City’s rate consultant recently completed a rate confirmation study to confirm or modify these rate increase estimates. As a result of additional revenue expected from Cal Poly and refined investment and impact fee revenue projections, the rate consultant has recommended lower than previously forecasted rate increases. Operating Expenditures Overall, operating expenditure budgets are changing very little in 2021-22 and 2022-23. The Water Fund is requesting some SOBCs as summarized below and detailed in Section G of the attached report: Table 12: SOBC Type 21-22 22-23 Total One-time 80,000$ 80,000$ Ongoing 147,221$ 132,902$ 280,123$ Total 227,221$ 132,902$ 360,123$ Item 10 Packet Page 110 Capital Projects Below is a highlight of the 2021-23 Water Fund capital projects: 1. Reservoir 2 Cover Replacement. This project will replace the floating cover on the City’s largest treated water storage tank. This cover has reached its expected useful life and needs replacement. This project will cost $10,000 in 2021-22 and $950,000 in 2022- 23. 2. California – Stafford to Mill Waterline Project. This project replaces segments of a 16-inch water main that supplies water to roughly half of the City. This segment of pipeline runs through the bridge deck over Highway 101 and has a high consequence of failure. This project will cost $140,000 in 2021-22 and $1,650,000 in 2022-23. 3. Broad Street – Tank Farm to Aerovista Recycled Water Expansion Project. This project will extend recycled water lines from the intersection of Tank Farm and Broad Streets to Aerovista where this water can be utilized within the Airport area. This project will cost $45,000 in 2020-21 and $1,040,000 in 2021-11. 4. Water Treatment Plant Infrastructure Renewal Strategy. The renewal strategy will allow plant staff to prioritize Water Treatment Plant related capital improvement projects for the next decade. This project will cost $150,000 in 2020-21. G-2: Sewer Fund Fund Overview & Forecast The Sewer Fund safely and continuously provides wastewater service to the community. This requires delivering wastewater from its various sources to the Water Resource Recovery Facility (WRRF), ensuring compliance with the Clean Water Act, and treating an average of three million gallons of wastewater per day, while maintaining and improving wastewater infrastructure. These City sewer operations rely on service rate revenue to cover almost all costs for operations and maintenance, infrastructure replacement, debt service, and payment for general City services provided to the fund (cost allocation). Taxes, including the Utility User Tax, do not support these services. Despite the uncertainty created by the Covid-19 pandemic, the Sewer Fund’s financial position is currently stable. At the onset of the pandemic, and associated stay -at-home order and business closures, the potential impact to the Sewer Fund was uncertain. The Utilities departm ent has closely monitored revenue since March 2020 and, while there has been some shift in usage patterns in residential and commercial sectors, overall, there has been no net impact to Sewer Fund revenue. Overall, the Sewer Fund’s long-term fiscal outlook is in line with original forecasts and can be found in Section G-2 of Attachment A. Item 10 Packet Page 111 Rate Increases The Sewer Fund will be requesting a rate increase of 3.5% effective July 1, 2021 and 3.5% effective July 1, 2022. The most recent rate study, conducted in 2018, projected the sewer rate increase would be 6.5% in 2021 and 6.5% in 2022. The City’s rate consultant recently completed a rate confirmation study to confirm or modify these rate increase estimates. As a result of additional revenue expected from Cal Poly and refined investment and impact fee revenue projections, the rate consultant has recommended lower than previously forecasted rate increases. Table 13: Sewer Rate Increases 2021-22 Proposed 2022-23 Proposed 2023-24 Projected 3.5% 3.5% 3.5% Operating Expenditures Overall, operating expenditure budgets are changing very little in 2021-22 and 2022-23. The Sewer Fund is requesting some SOBCs as summarized below: Table 14: SOBC Type 21-22 22-23 Total One-time 57,517$ 11,865$ 69,382$ Ongoing 252,381$ 413,087$ 665,468$ Total 309,898$ 424,952$ 734,850$ Capital Projects Below is a highlight of the 2021-23 Sewer Fund capital projects: 1. Water Resource Recovery Facility (WRRF) Project. The WRRF will continue construction through the 2021-23 Financial Plan with project completion estimated in late 2023, early 2024. This is an ongoing project with a total construction budget of $140,000,000. 2. Calle Joaquin Lift Station Replacement. This project will replace the aging lift station and sewer line crossings at San Luis Obispo Creek and Highway 101. The new station will meet the demands of the Froom annexation and new development in the Laguna area. Recent bids received for this project exceeded the budget and staff will return to Council with a request to rebid with modified scope and additional funding in Fall of 2021. 3. Airport Gravity Mainline. This project will replace the existing airport lift station with a gravity sewer. The new mainline will serve existing customers, recent annexations, and future development in the airport area. This project will cost $2,020,000 in 2021-22. Item 10 Packet Page 112 4. Mainline Replacements. Replacements on Morro Street, Mill Street and Santa Rosa Street along with replacement of mainlines in the capacity constrained areas of Sierra Way, Henry, and Islay Street. These projects will cost $1,571,000 in 2021-22 and $5,345,000 in 2022-23. 5. Inflow and Infiltration. Ongoing funding for voluntary sewer lateral replacements and mainline repairs to reduce the Inflow and Infiltration (I/I) of stormwater into the wastewater collection system. This project will cost $200,000 in 2021-22 and $250,000 in 2022-23. G-3: Parking Fund Fund Overview & Forecast The fiscal outlook for the next two years shows the Parking Fund’s working capital balance significantly reduced because of lower-than-expected revenues, planned expenditures associated with the Palm-Nipomo Parking Structure project, the continued loss of high rate of return meter spaces for parklets (approximately $350,000 a year3), and a series of needed parking structure annual maintenance projects. Additionally, demand for long-term parking spaces has reduced significantly due to impacts from the pandemic and continue to trend in a lower occupancy caused by new health guidelines. The prolonged impacts from the pandemic and the support efforts provided to the Downtown’s recovery efforts have strained the Parking Fund. End of year unreserved working capital is projected to be $11.4 million, representing a $3 million loss during the fiscal year, with revenues below the coverage ratio requirements for debt service. This debt service ratio coverage is a critical component for future funding and could jeopardize the Fund’s ability to receive an I- Bank loan to fund the needed Palm/Nipomo parking structure. As such, based on current revenue and expenditure projections, the Parking Fund as of the writing of this report is projecting the year end need for $1.23 million (subject to change as revenues are collected) to support the Fund’s ability to meet debt service requirements for FY 2020-21. Addressing this short-term need will occur at the June 15th Council meeting when more information is known. To achieve short-and long-term goals and objectives of the Parking Fund, while continuing to support the economic recovery of the City’s downtown core, staff are proposing a multi -part strategy. This multi-part strategy includes changes in staffing and operating, to reduce expenditures alongside increases to revenues to cover the required debt service ratio for planned structure expansion in future years. The continued pandemic impacts and project development/timeline of the Palm-Nipomo Parking Structure necessitate several significant program changes and Council’s feedback. 3 This is the estimated annual amount based on historical revenue by on street parking space, exclusive of any parking citation receipts. Item 10 Packet Page 113 Direction is sought from Council to address long term needs on the specific proposed rate and program changes (outlined below). The additional revenue from the program and fee changes is anticipated to be $1,796,600/Yr. If they are not accepted as proposed, the Parking Fund will not present a balanced budget. Without program and fee adjustments, it is likely that the full buildout of the Palm/Nipomo Garage will be delayed and could impair economic recovery. Rate and Program Changes Staff is recommending a combination of long-term revenue enhancement strategies focused on three areas: 1) parking garages, 2) on-street and lot parking, and 3) enforcement with the objective of stabilizing and positioning the parking fund to timely construct needed parking facilities and manage and incentivize desired parking behaviors. These behaviors include disincentive short driving trips, walking, biking, parking in neighborhoods, and encouraging parking in structures rather than on surface streets. Parking Garages 1. Eliminate 1st Hour of Free Parking in Parking Garages 2. Implement Deferred Rate Increase in Parking Garages (Approved for July 2020) 3. Reduce Parking Garage Max Daily Rate On-Street & Lot Parking 4. Implement Paid Parking in Upper Monterey Area 5. Implement Paid Parking in Railroad Square 6. Implement Deferred Rate Increase for On-Street and Lot Parking (Approved for July 2020) 7. Expand Enforcement Hours from 6:00 pm to 9:00 pm for On-Street and Lot Parking 8. Transition to Tier-Based Pricing for On-Street and Lot Parking Enforcement 9. Expand Enforcement Hours from 6:00pm to 9:00pm 10. Increase Penalty Schedule for Safety Violation Fine Amounts 11. Implement and Establish Residential Parking Permit District in Old Town and Upper Monterey Area Districts 12. Enforcement of the Old Town Parking District Table 15: Parking Rate Changes Current Parking Rates (Mo./Qtr.) Proposed* Effective July 1, 2021 Proposed** Effective July 1, 2023 Proposed** Effective July 1, 2025 1 Parking Meters (Hourly) 2 Tier 1 (Super Core) $1.75 $2.00 $2.50 $3.00 3 Tier 2 (Core) $1.50 $1.75 $2.50 $3.00 4 Tier 3 (Outlying Areas) $1.00 $1.25 $1.50 $2.00 Item 10 Packet Page 114 Parking Rate Changes Current Parking Rates (Mo./Qtr.) Proposed* Effective July 1, 2021 Proposed** Effective July 1, 2023 Proposed** Effective July 1, 2025 5 Parking Structures 6 Hourly/Daily Max $1.25/$12.50 $1.50/$6.00 $1.75/$7.00 $2.00/$8.00 7 Monthly/Quarterly $85/$255 $85/$255 TBD TBD 8 DROP (Overnight parking for DT residents) $125/$375 $125/$375 TBD TBD 9 Permits 10 Residential Parking Permit $20 $20 $25 $25 11 DT Residential Parking Permit $20 $20 $25 $25 12 10-Hour Meter Permit $60 $60 TBD TBD 13 Other 14 Parking Structure Validations $75 for 100 $90 for 100 $100 for 100 $100 for 100 *Previously approved by Council to take effect July 1, 2020 but was deferred due to Covid-19 pandemic **Not part of the action items for Council but are included in the Long-Term Forecast and will be addressed in future budget discussions. Operating Expenditures - with Net Reductions The proposed parking fund budget includes a series of Significant Operating Budget Changes necessary to address daily needs of the Parking operations for the City. These enhancements are necessary to ensure that the Parking Fund can effectively expand operations to cover the Fund’s debt service even during times of economic uncertainty. These requests are offset by a reduction of contracted services. Table 16: Parking Fund SOBCs 21-22 22-23 Total 1 Ongoing 2 Parking Enforcement (3 FTE Additions)220,927$ 230,947$ 451,874$ 3 Parking Maintenance (2 FTE Additions)138,187$ 144,392$ 282,578$ 4 Revenue and Contract Services Reductions Offset (558,123)$ (645,114)$ (1,203,237)$ 5 Total (199,008)$ (269,775)$ (468,784)$ Capital Projects The Palm-Nipomo parking structure construction cost is currently estimated at $43.5 million with initial work beginning in FY 2021-22. A $6.5 million contribution from working capital for phase 1 that will occur in FY 2021-22 and FY 2022-23 and $37 million from bond issuance for phase 2 of construction that will begin in FY 2023-24. Item 10 Packet Page 115 The phase 2 of construction is estimated to take 18-24 months with the structure opening for operation at the beginning of FY 2025-26. These amounts are subject to change based upon revised project estimates and final ratio of cash versus debt financing amounts. Additionally, gateless parking structure upgrades, fleet replacement, HVAC air handler replacement and miscellaneous information technology requests are included within the capital improvement plan budget. G-4: Transit Fund Fund Overview & Forecast The Transit Fund has endured the pandemic with a balanced budget largely because of f ederal funding assistance and reduced costs from reduced operations. The Fund also holds a healthy working capital balance. The fiscal outlook for the next five years and the uncertainty in future ridership post pandemic (affecting all public transportation services) has resulted in restrained projections. At this time, revenues are projected to sufficiently keep pace with escalating costs. However, any significant changes, such as the expansion of the transit program, will require additional funding sources or an increase in rates in addition to rate increase discussed below. Part of this strategy includes negotiating a new agreement with increased cost of service recovery from Cal Poly. Rate Increases On April 4, 2017, the Council adopted the transit fare and interior bus advertisement rates which included annual rate increases. This is critically important to achieve the SLO Transit’s 20% Local Revenue requirements. To better support SLO Transit’s customers during the pandemic, in between March 2020 and July 2020 SLO Transit went fare-free and delayed the planned July 2020 rate increases. This action helped to protect both SLO Transit customers and staff. In July 2021, delayed rate increases will go into effect. A Regular Pass will increase from $38 to $40 and Senior and Disabled Pass will increase from $18 to $20. Capital Projects Capital projects continue to be a challenge for the Transit Fund which is highly reliant on discretionary grants. Proposed projects are limited to those that are essenti al and that can be funded from grants. Of those projects, the replacement of diesel buses with electric vehicles are the highest priority as well as the installation of necessary charging infrastructure to support electric vehicles. And while discretionary grant awards have been less than previously anticipated, the recently passed American Rescue Plan (ARP) includes enhanced federal transit funds that may be used for capital expenditures and that coupled with the infusion of CARES Act will assist SLO Transit meeting operational and capital needs. Programming of ARP funding to SLO Transit will be completed in conjunction with the San Luis Obispo Council of Governments (SLOCOG) and will be present to City Council at a future date anticipated to be at the Mid-Year Budget Review in 2022. Item 10 Packet Page 116 RECOMMENDED POLICY CHANGES FOR LONG-TERM FISCAL HEALTH – SECTION H The City has developed comprehensive budget policies to guide its ongoing financial processes, ability to react to extraordinary circumstances and maintain the long-term health of the City. The policies are constantly reviewed for best practices, continued practical application, and are amended when emerging issues warrant. Staff is currently working on updates to the City’s debt management policy and the Ci ty’s adopted fund balance and reserve levels that will be presented to Council in May. Under the latter, staff recommends incorporating language for the remaining funding set aside under the non-departmental contingency at year-end to carry over to the new fiscal year, so that only the difference between the balance and required budget has to be appropriated. This would eliminate the funding to return to fund balance and having to be appropriated again the next year. Policy Context The City Charter under Article VIII, Section 802, 803, and 804, requires the City Manager to present an annual budget to the City Council, for the City Council to hold a public hearing on the budget, and to adopt a budget. California Government Code Sec 53901 requires each local agency to file its budget with the county auditor within 60 days after the beginning of its fiscal year. If an agency does not have a “formal budget” it must “file a listing of its anticipated revenues, together with its expenditures and expenses for the fiscal year in progress” which amounts to much the same thing as a budget. The City’s budget and fiscal policies are included in each budget document and changes and revisions recommended by staff considered by the City Council during the public hearing. Public Engagement The City’s two-year financial plan process includes a high degree of public engagement and input ranging from community surveys, outreach to community groups and organizations, a Community Forum, and several public hearings before the City Council that commence in September and end with the adoption of the financial plan in June. CONCURRENCES All departments participated in the development of the 2021-23 financial plan and submitted SOBCs, CIPs and Major City Goal Work Programs to accomplish the City Councils goals and desired accomplishments. ENVIRONMENTAL REVIEW Adoption of a budget is not a project as defined under the California Environmental Quality Act. Item 10 Packet Page 117 FISCAL IMPACT Budgeted: Yes Budget Years: 2021-23 Funding Identified: Yes Fiscal Analysis & Fiscal Forecast In preparing the forecast for “Strategic Budget Direction,” all City departments reviewed and projected expenditure and revenue budgets for the next two financial plan years. The updated five-year forecast considers a realistic approach to revenue assumptions, expenditures, required investments in the City’s Major City Goal Work programs, and an ambitious capital improvement plan. Additionally, the long-term forecast includes a payments schedule towards the City’s unfunded liability, funding for a 115 Pension Trust fund, and is fully funding the reserve requirements. Full budget detail is found within each fund’s forecast (Attachment A – Sections A, C & G) Significant Operating Budget Changes (SOBCs) Table 17: Total Changes, by Fund 21-22 22-23 Total 1 One-time 3,952,440$ 2,499,783$ 6,452,224$ 2 General Fund 3,764,923$ 2,487,918$ 6,252,842$ 3 Sewer 57,517$ 11,865$ 69,382$ 4 Transit Fund 50,000$ 50,000$ 5 Water 80,000$ 80,000$ 6 Ongoing 3,787,585$ 4,431,797$ 8,219,382$ 7 General Fund 3,571,819$ 4,137,607$ 7,709,426$ 8 Parking Fund (199,008)$ (269,775)$ (468,784)$ 9 Sewer 252,381$ 413,087$ 665,468$ 10 Water 147,321$ 135,232$ 282,553$ 11 Whale Rock 15,073$ 15,646$ 30,719$ 12 Total 7,740,026$ 6,931,580$ 14,671,606$ Table 18: Transfers into CIP FUND Transfer Out Transfer In Transfer Out Transfer In 1 General Fund (7,362,916) (7,949,558) 2 LRM (17,866,400) (18,763,050) 3 Capital Outlay 16,003,023 16,967,220 4 Fleet 1,265,000 1,045,000 5 IT Replacement 988,973 564,777 6 Major Facilities Maint 867,500 593,200 7 Infrastructure Investment 5,662,320 7,099,911 8 Public Art Fund 442,500 442,500 21-22 22-23 Item 10 Packet Page 118 ALTERNATIVES The Strategic Budget Direction report provides the Council with budget recommendations based on the community input and the Council’s strategic planning direction through the major city goal process. As such, direction should be given to the City Manager for desired changes and budget reallocations. This guidance will then be incorporated into the preliminary Financial Plan that will be presented to Council on June 1, 2021. Attachments: a - COUNCIL READING FILE - Strategic Budget Direction Report Item 10 Packet Page 119