HomeMy WebLinkAboutItem 7b - Ordinance Amendment Title 13 Private Sewer Lateral Inspections Replacements and Dissolution of Mandatory Wastewater Flow offset Program Item 7b
Department: Utilities
Cost Center: 6102
For Agenda of: 4/21/2026
Placement: Business
Estimated Time: 45m
FROM: Aaron Floyd, Public Works & Utilities Director
Prepared By: Chris Lehman, Deputy Director - Wastewater
SUBJECT: INTRODUCE AN ORDINANCE AMENDING TITLE 13 OF THE
MUNICIPAL CODE REGARDING PRIVATE SEWER LATERAL
INSPECTIONS, REPLACEMENTS, AND DISSOLUTION OF THE
MANDATORY WASTEWATER FLOW OFFSET PROGRAM (CODE-0169-
2026) AND APPROVE A RESOLUTION GRANTING DIRECTOR
DISCRETIO
RECOMMENDATION
1. Introduce a Draft Ordinance entitled “An Ordinance of the City Council of the City of
San Luis Obispo, California, Amending Section 13.08.395 (Private Sewer
Laterals/Systems) and Section 13.08.396 (W astewater Flow Offset) of the City of San
Luis Obispo Municipal Code.”
2. Adopt a Draft Resolution entitled “A Resolution of the City Council of the City of San
Luis Obispo, California, Authorizing the Discretion of the Public Works and Utilities
Director to Waive Wastewater Flow Offset Program Requirements and Resolution and
Determination of Satisfaction of Conditions of Approval Related to Wastewater Flow
Offsets.”
3. Find the actions exempt from the California Environmental Quality Act (CEQA).
REPORT IN BRIEF
This report carries forward analysis and updated staff recommendations from the August
19, 2025, City Council Study Session discussion (Item 8a). That study session included
an update on the City's Private Sewer Lateral and Wastewater Offset Programs and
potential recommended changes. The Study Session Discussion Item #1 , “Should the
Wastewater Flow (Private Sewer Lateral) Offset Program Continue?,” has been carried
forward to this public hearing with staff’s recommendation to 1) dissolve the currently
mandated wastewater flow offset program and 2) modify existing citywide Sewer Lateral
Program “Inspection Upon Sale” regulations to require replacement or repair of failed and
poor-rated private sewer laterals within six months of time of sale of the property. As
described in this report, staff’s recommendation represents a change from the existing
approach and is result of many factors including: adoption and implementa tion of the 2025
Wastewater Collection System Infrastructure Renewal Strategy, advancements in
wastewater flow data collection, modeling, and analysis, further eval uation of the
effectiveness of the private sewer lateral and wastewater flow offset programs, potential
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opportunities to address and remedy the sources of wet weather infiltration and inflow by
focusing on the replacement of failed and poor private sewer laterals identified by the
Inspection Upon Sale Program, and continued public outreach. Staff also continue to
implement capital projects to improve capacity within the public sewer system and
conduct outreach regarding available private sewer lateral rebate programs. As described
further in this report, the proposed changes will provide a greater beneficial impact on
municipal sewer system capacity and public health and safety than the current Programs,
while reducing logistical and monetary burdens on the community and housing
development, and City staff administrative workload.
POLICY CONTEXT
The primary goals of the Wastewater Flow Offset (Private Sewer Lateral) and Inspection
Upon Sale Programs continue to be the reduction of inflow and infiltration from private
sewer laterals and the associated potential for sewer spills and impacts to public health,
safety, and general welfare, while accommodating housing development and furthering
the Major City Goal of Housing and Neighborhood Livability‐Healthy, Safe, and
Affordable.
California River Watch Settlement Agreement
On July 7, 2016, the City entered into a settlement agreement with California River Watch
regarding alleged Clean Water Act violations. The settlement agreement included a
“sunset” date of July 7, 2023, which meant, in part, that California River Watch agr eed
not to sue the City for the period between July 7, 2016, and July 7, 2023 (refer to further
discussion in the Background section of this Council Agenda Report). The settlement
agreement required the City to consider two Supplemental Environmental Progr ams
intended to secure significant benefits to the local environment. The following programs
are excerpted from that agreement:
Lateral Inspection and Repair Program: Within one (1) year from the Effective Date
of this Agreement, the City staff shall recommend to the City Council an ordinance
establishing program for the inspection, repair, and/or replacement of private
Summary of Staff Recommendations:
1. Modification of the Citywide Sewer Lateral Inspection Program to include repair
or replacement of poor or failed condition laterals as determined through the
Inspection Upon Sale process.
2. Dissolution of mandatory Wastewater Flow (Private Sewer Lateral) Offset
Program requirements.
3. Continued discretionary review and determination of conditional wastewater
flow offsets for specified entitlements based on modeling and analysis.
4. Public Works and Utilities Director discretion to waive pending offset
improvements for entitled projects and building permits in process.
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sewer laterals. The program proposed will use the following events as a basis or
trigger” for inspection, repair, and/or replacement:
1. Transfer of ownership of the property if no inspection or replacement of
the sewer lateral occurred within twenty (20) years prior to the transfer;
2. If two (2) or more sanitary sewer overflows are caused by the same
private sewer lateral within the immediate past two (2) years; or
3. Where the application for a building permit indicated the expected
addition of flow through the private lateral (e.g. addition of bathrooms,
bedrooms, addition living space).
Voluntary Private Lateral Replacement Rebate Program: The City staff shall
recommend a Voluntary Private Lateral Replacement Rebate Program. For three
(3) years from establishment, the Program will provide, on a first come, first served
basis, one thousand ($ 1,000) dollars toward the total replacement costs of a
residential private lateral, not to exceed a total of fifty thousand ($ 50,000) dollars
annually.
The settlement agreement with California River Watch did not mandate that the City adopt
either of these programs, but it did mandate that the City Council consider an ordinance
to establish such programs. Council provided direction to staff at study sessions on
October 4, 2016, and April 4, 2017. This lawsuit settlement has subsequently sunset
(expired).
Current Policy Regarding Private Sewer Lateral Inspection Upon Sale Regulations.
The City Council received presentations and provided direction to staff regarding
wastewater system capacity constraints at study sessions on October 4, 2016, and April
4, 2017. On May 16, 2017, Council considered and did not approve a proposed private
sewer lateral ordinance that would have required mandatory repair or replacement of
defective laterals prior to a change of ownership in real property. Following the 2017 study
sessions, and after deliberation and further study, the City adopted Sewer Lateral
Inspection and Offset Program requirements (August 20, 2019), and the Private Sewer
Lateral Rebate program (August 20, 2019), which are currently in place today as part of
the City’s Municipal Code.1, 2, 3 Minor amendments to the Code were subsequently
adopted by the City Council on May 7, 2024. The current inspection upon sale
requirements do not require the repair or replacement of defective laterals.
DISCUSSION
Background
Private sewer laterals are the portion of the sewer lines that connect from a residence or
commercial structure up to and including the point of connection with the publicly owned
sewer main. The City estimates that there are 13,421 private sewer laterals citywide,
1 Municipal Code Subsection 13.08.395(C)(1)(h) Inspection of Existing Private Sewer Laterals
2 Municipal Code Subsection 13.08.395(I) Rebate Programs
3 Municipal Code Section 13.08.396 Wastewater flow offset
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including 3,052 within the updated capacity-constrained areas (Figure 1).4 An interactive
map showing the boundaries of the capacity-constrained areas and the known and
unknown condition of private sewer laterals within the City is available to the public at
www.slocity.org/laterals. Notably, this is a significant reduction from the 7,000 private
sewer laterals located in the prior capacity-constrained areas. Capacity-constrained
areas are portions of the City’s municipal wastewater collection (sewer) system that lack
or have limited capacity to serve existing and future development during wet weather
conditions.
Figure 1: Sewer Capacity-Constrained Area Map
4 The City Council adopted a General Plan Amendment to the Water and Wastewater Element on
December 2, 2025, which included an updated Wastewater Flow Capacity-Constrained Area Map.
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Where private sewer laterals in poor or failed condition connect to the City sewer,
groundwater flows into the sewer, and these areas of the collection system experience
“surcharging,” a condition where the sewer pipe is so full that the wastewater flow starts
backing up in the pipe and sometimes exits through toilets or access locations in the
public streets. This is especially prevalent in capacity-constrained areas, which can lead
to sewer spills.
Figure 2, below, represents the annual number of sewer spills since 2021, and shows
that there has been a reduction in sewage spills origi nating from City infrastructure. The
data also show that there are still spills originating from private infrastructure, indicating
that a private sewer lateral replacement program is still important.
Figure 2: Sewer Spills as of March 2026 (Private Sewer Spill Reporting Requirements Began in 2021)
Private Sewer Lateral and Wastewater Offset Programs
There are two Municipal Code Sections and associated Programs that are proposed for
amendment. While the requirements, process, and regulations for implementation of
these Programs are identified in different sections of the Municipal Code, they share a
similar purpose: to reduce inflow and infiltration from private sewer laterals, reduce the
potential for sewer spills and associated impacts to public health, safety, and general
welfare, and improve and maintain capacity with the municipal sewer system while
accommodating development. A general and simplified summary of these programs and
associated Code sections is provided in Table 1, below.
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Table 1. Current Program, Municipal Code Section, and General Applicability
Program Municipal Code
Section
Where
Required
General Summary
Sewer Lateral
Inspection, Repair,
and Replacement
Program
13.08.395
Private Sewer
Laterals/Systems
Citywide As further specified in the Code,
and applicable Citywide, requires
a property owner to submit an
inspection video of their private
sewer lateral for review by the City.
The existing Code identifies the
actions triggering an inspection,
including but not limited to a
property sale within the City.
An inspection is not required if:
a. The private sewer lateral has
been replaced within the past
20 years.
b. An inspection has been
submitted to the City within the
past 5 years.
c. The private sewer lateral is
located in a common interest
development and is privately
maintained.
As further specified in the Code, if
the sewer lateral is in poor or failed
condition, the lateral must be
repaired or replaced under all
circumstances triggering an
inspection except a property sale.
Wastewater Flow
Offset Program
13.08.396
Wastewater Flow
Offset
Within
Wastewater
Collection
System
Capacity-
Constrained
Areas
As further specified in the Code,
currently requires property owner
or developer proposing new
development or intensification of
the existing use or development
within capacity-constrained
areas to offset the project’s
wastewater flow by replacing a
poor or failed-condition sewer
lateral(s) or completing an in-lieu
capital improvement within the
capacity-constrained area. Current
regulations mandate an offset
requirement for new development
and intensification of an existing
use.
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Item 7b
Inspection of and Replacement of Existing Private Sewer Laterals
The City Council adopted a Municipal Code amendment on August 20, 2019, that
requires, with some exceptions5, the inspection of private sewer laterals connected to the
City’s sewer system, at the property owner’s sole expense, when certain events occur,
such as sewer spills, transfer of property ownership, and certain building permit
conditions6 (refer to Table 1 on the following page). Following an inspection required by
the transfer of property ownership, the inspection results must be provided to the City and
disclosed to the purchaser of the property, but repair/replacement of poor or failed laterals
is currently not triggered by sale alone.
These inspections have produced a dataset critical to
the success of the overarching private sewer lateral
programs, which aim to correct private infrastructure
deficiencies with a data-driven approach that is
focused on the highest areas of risk. From 2019 to
present, there have been 1,146 inspections
completed through the Inspection Upon Sale
Program. As outlined in Table 1 above, given that
laterals newer than 20 years are not subject to
mandatory inspection requirements, this dataset is
focused on the oldest lateral inventory in the
community. Of those 1,146 laterals inspected through
the program, 341 (30%) were determined to be in
poor or failed condition but were not required to be
repaired or replaced because the current Municipal
Code regulations do not require replacement of a
poor or failed condition lateral based on property sale
alone.
The current repair or replacement regulations, which are not presently applied to the
Inspection Upon Sale Program, require repair or replacement of private sewer laterals,
that do not comply with the condition requirements identified in the Municipal Code 7 (refer
to Table 2, below). As described in the existing regulations, conditions warranting full
replacement rather than a point repair include a private sewage spill, findings of infiltration
and intrusion, or a lateral with defects having not met the required pipe material
requirements as identified in the City’s Standard Specifications and Engineering
Standards. The current regulations require the improvements to be implemented within
180 days.
5 Municipal Code Subsection 13.08.395(C)(2) Exceptions for inspection requirements of existing
private sewer laterals.
6 Municipal Code Subsection 13.08.395(C)(1) Inspection of Private Sewer Laterals.
7 Municipal Code Subsection 13.08.395(B) Ownership, Maintenance, and Repair
Figure 3: Private Sewer Lateral Root Intrusion
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Item 7b
Table 2. Current Sewer Lateral Inspection, Repair, and Replacement Program
Citywide
Program and
Code Section
When an
Inspection is
Required
Events
Triggering
Repair or
Replacement
Requirement
Conditions
Warranting
Repair or
Replacement
Conditions
Warranting Full
Replacement
Sewer Lateral
Inspection,
Repair, and
Replacement
Program
13.08.395
Private Sewer
Laterals/Systems
a. Issuance of
a Notice of
Violation
due to a
private
sewage spill
b. Building
permit
c. Change of
use
d. New water
meter or
increase in
the size of
the existing
water meter
e. Subdivision
of the
property
f. Evident
inflow and
infiltration
affecting the
sewer
system
g. Property
sale
Inspection
shows poor or
failed condition
lateral and the
following:
a. Issuance of a
Notice of
Violation due
to a private
sewage spill
b. Building
permit
c. Change of
use
d. New water
meter or
increase in
the size of
the existing
water meter
e. Subdivision
of the
property
f. Evident
inflow and
infiltration
affecting the
sewer
system
Based on the
inspection,
repair or
replacement is
required if the
private sewer
lateral is not in
compliance
with the
following:
a. Private sewer
laterals shall
be free of
displaced
joints, breaks,
offsets,
structural
defects,
damage,
open joints,
missing
portions of
pipe, root
intrusion,
cracks, leaks,
sediment
deposits,
bellies in the
pipe or any
other similar
conditions,
defects or
obstructions
likely to cause
or contribute
to blockage of
the private
sewer lateral
or the public
sewer.
a. Sanitary
sewer
overflow
b. Findings of
infiltration
and intrusion
c. Defects that
do not meet
the required
pipe material
requirements
as defined in
the City’s
Standard
Specifications
and
Engineering
Standards.
Page 322 of 370
Item 7b
Citywide
Program and
Code Section
When an
Inspection is
Required
Events
Triggering
Repair or
Replacement
Requirement
Conditions
Warranting
Repair or
Replacement
Conditions
Warranting Full
Replacement
b. Private sewer
laterals shall
be equipped
with
cleanouts.
c. Private sewer
laterals shall
not be
constructed,
either in
whole or in
part, of
“Orangeburg
pipe.”
d. It is unlawful
to connect a
private sewer
lateral to
storm drains,
roof drains,
yard drains,
surface or
subsurface
drainage,
groundwater,
or other non-
sewage pipes
or drains.
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Item 7b
Proposed Amendment to the Municipal Code Inspection Upon Sale Requirements
Staff recommend a Municipal Code amendment that would require repair or replacement
of poor or failed condition laterals as determined through the Inspection Upon Sale
Program (refer to Table 3 below). This amendment will result in a greater number of lateral
replacements compared to the current Program and is anticipated to result in a reduction
of inflow and infiltration affecting the Citywide municipal sewer system, a reduction of
sewer spills Citywide, an increase in Citywide sewer system capacity during wet weather,
and a reduction in the capacity-constrained area boundaries.
The recommended effective date for this requirement is January 1, 2027, to allow for
additional outreach and education to key stakeholders and the broader community. Staff
are not proposing retroactive replacement requirements for laterals that have alr eady
been inspected and condition-rated through this program.8
Table 3. Existing and Proposed Triggers for Sewer Lateral Inspections
and Repair/Replacement
Trigger Current Ordinance (Citywide) Proposed Ordinance (Citywide)
Inspection
Required
Replace/Repair
(failed/poor
condition)
Inspection
Required
Replace/Repair
(failed/poor
condition)
Property Sale X X X
Sewer Spill (Notice
of Violation)
X X X X
Building Permit
(specified scope)
X X X X
Change of Use
(specified scope)
X X X X
New Water Meter
or Increase in the
Water Meter Size
X X X X
Subdivision X X X X
Evident
inflow/infiltration
X X X X
8 From 2019-present, 341 laterals have been conditioned as poor or failed and have not been replaced.
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Replacement requirements, administered through a staff-issued Notice to Correct, would
allow 180 days for replacement (from the time of notification from the City), which is
consistent with existing requirements. The replacement duration may be extended at the
discretion of the Public Works and Utilities Director, given that good faith efforts have
been made to complete the work and there are extenuating circumstances that result in
replacement not being feasible by the assigned deadline (see Figure 4).
Existing rebates would remain available to help offset the cost of the work for community
members, including the following:
Private Sewer Lateral Inspection Rebate (up to $350):
o Applies to all property types within capacity-constrained areas
o Inspection completed on or after December 2, 2025
Private Sewer Lateral Replacement Rebate (up to $4,000):
o Citywide: single-family residences
o Capacity-constrained area only: multi-family and commercial properties
o Full replacements, only, completed on or after December 2, 2025
Staff continue to monitor and evaluate these existing rebate programs to ensure
availability of sufficient funding. In the event application and funding trends demonstrate
that the rebate programs could be expanded, staff may return to City Coun cil for Rebate
Program modifications. Staff continue to provide additional outreach to the community
regarding these rebate opportunities.
Figure 4: Inspection Upon Sale Workflow
Private sewer laterals not replaced within 180 days (or within the timeframe authorized
by a Director extension) will result in an Administrative Citation and Notice of Violation, 9
9 Municipal Code Section 13.08.470 Authority of director, Notice of Violation.
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and the City may withhold a building permit for repair, construction, or alternation
associated with the property or require a financial surety. 10
It is important to note that the prior staff recommendations brought forward to Council
between 2017 and 2019 would have required that this work be completed prior to close
of escrow. This previously recommended requirement was determined through outreach
with realtors to be infeasible given the condensed timeframe associated with many real
estate transactions. Ultimately, Council at that time elected to proceed with the current
Wastewater Flow (Sewer Lateral) Offset and Inspection Programs to achieve desired
community outcomes rather than imposing a replacement upon sale requirement.
Staff’s current proposed recommendation addresses concerns expressed in 2017 -2019
regarding the timing of any necessary replacements by allowing the lateral replacement
to occur after the close of escrow, with opportunities for a discretionary extension.
Additionally, delaying the implementation date for the proposed changes to January 1,
2027, and continuing educational support and outreach by staff will help to minimize
impacts to the property sale process.
Wastewater Flow Offset Program
The existing Wastewater Flow Offset Program requires proposed intensified or new
development projects located in capacity-constrained areas to “offset” the additional new
flow in these areas by repairing existing failing private infrastructure before the new
infrastructure is occupied. Municipal Code Section 13.08.396(A) states that:
“The city experiences surcharging in the wastewater collection system and sanitary
sewer overflows during wet weather events due to inflow and infiltration. The
purpose of these regulations is to establish a methodology whereby new or
intensified development in capacity constrained areas as established by the city
council could offset new wastewater flow to mitigate capacity constraints in the
existing wastewater collection system to accommodate the project’s additional
demand.”
From 2019 to present, 114 private sewer laterals have been replaced as a requirement
of the current Wastewater Flow Offset Program.
Proposed Amendment to the Municipal Code Wastewater Flow Offset Requirements
Following the August 19, 2025 City Council Study Session and adoption and
implementation of the 2025 Wastewater Collection System Infrastructure Renewal
Strategy, staff have conducted additional evaluations of the Wastewater Flow Offset
Program. Based on the improved City wastewater flow model, advancements in
wastewater flow data collection and analysis, and the proposed Municipal Code
amendment summarized above related to the Inspection Upon Sale Program , staff’s
10 Municipal Code Section 1.24.200 Prohibition against issuance of permits.
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Item 7b
recommendation is to dissolve the existing mandatory wastewater flow offset
requirements provided in Section 13.08.396 (Attachment A, Draft Ordinance).
Improvements in capacity-constrained areas will continue as a result of both City and
private sewer improvements through 1) the City’s capital improvement plan, 2) voluntary
replacement of private sewer laterals, encouraged through rebates and education, 3)
mandatory replacement of private sewer laterals following sewer spills, 4) mandatory
replacement of private poor/failed sewer laterals condit ioned through tenant
improvements or intensification projects, 5) if Council approves staff’s current
recommendation, mandatory replacement of private sewer laterals conditioned as
poor/failed through the Inspection Upon Sale process, and 6) conditioned of fsets based
on discretionary review of entitlements and wastewater flow modeling for the protection
of public health and safety.
Upon Council authorization, the Public Works and Utilities Director would be allowed
discretion to waive pending offset improvements for existing entitled projects, building
permits under review, and issued building permits if the offset is required by the current
version of Municipal Code 13.08.396 only and not required for the protection of public
health and safety (Attachment B, Draft Resolution). This requirement would be waived
for: actions subject to ministerial permits only (e.g., accessory dwelling unit, single -family
residence, remodel of existing structure), Minor Development entitlements, and Moderate
and Major Development entitlements where the Wastewater Collections Infrastructure
Renewal Strategy and associated wastewater flow model demonstrate that there would
be no adverse effect on public health and safety. Prior offsets (already completed) would
qualify for rebate awards under the currently adopted rebate program conditions and
requirements.
Anticipated Beneficial Effects within Capacity-Constrained Areas and Citywide
From 2019 to present, 114 private sewer laterals have been replaced as a requirement
of the current Wastewater Flow Offset Program. This is significantly less than the 341
private sewer laterals that were conditioned as poor/failed (but not replaced) through the
Inspection Upon Sale Program during the same time period. During that same time
period, 518 private sewer lateral rebates have been issued, primarily associated with
voluntary replacement (Figure 5).
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Item 7b
Figure 5: Private Sewer Lateral Replacement Strategy Comparison
Since 2019, 1,146 property sales required a private sewer lateral inspection, and 30% of
these laterals were determined to be in poor or failed condition. Looking at this data, it is
anticipated that this trend will continue, and staff anticipates the proposed combined
changes to the Municipal Code and Sewer Lateral Inspection and Wastewater Flow Offset
Programs, and continuance of the existing rebate programs, will result in a greater
number of lateral replacements, a reduction of inflow and infiltration, and a reduction of
sewer spills. Replacement of these laterals will ultimately contribute to the reduction of
capacity-constrained areas of the sewer system.
These changes would result in other benefits related to City resources and challenges
experienced by the community. Implementation of the Wastewater Flow Offset Program
requires a significant amount of staff resources to administer compared to the gain of the
114 lateral replacements since 2019. In addition, based on continu ed outreach and
community feedback, staff are aware of the burden on the community, property owners,
and developers to locate a poor or failed condition lateral and conduct private negotiations
with another property owner to satisfy the offset requirement. The Offset Program has
been particularly challenging for property owners who are developing a detached
Accessory Dwelling Unit or expanding an existing single-family residence to increase
housing availability within the City.
From 2019 to 2025, the Wastewater Flow Offset Program, implementation of
development agreements and conditioned improvements, and citywide initiatives aimed
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to reduce inflow and infiltration contributed to the reduction of capacity-constrained areas
from approximately 2,100 acres to 1,100 acres, which is reflected in the revised map
adopted on December 2, 2025. The updated 2025 capacity-constrained area map will
continue to inform development projects in areas that have limited wastewater capacity,
allow for analysis of a development’s impact, and require mitigation of impacts through
the discretionary and environmental review of an entitlement application. The proposed
amendments to the Wastewater Offset and Private Sewer Lateral Programs will continue
the pace of or accelerate the replacement of private sewer laterals and will provide
additional condition assessments for the 33% of the privately owned laterals in capacity
constrained areas that are currently unknown; see Figure 6.
Figure 6: Current Private Sewer Lateral Conditions in Capacity-Constrained Areas
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Item 7b
Continued Discretionary Review of Development and Use Entitlements
Staff will continue to conduct review of discretionary development projects, subdivisions,
and use permits to determine the project’s impact to the City’s sewer system. In addition
to a project’s compliance with the City’s Engineering Standards, f low offset requirements
and on and offsite sewer improvements for discretionary projects and associated
entitlements would be determined by an engineer’s utility design narrative, assessment
of existing affected infrastructure, and wastewater flow modeling and impact analysis
conducted during the discretionary review process for specified entitlements. If these
reviews indicate that a project would negatively impact the City’s wastewater
infrastructure, private sewer lateral offsets and other improvements to the wastewater
system may be required as a means to mitigate those negative impacts.
The resulting offset requirement and/or infrastructure improvement would be ad opted via
conditions of approval and/or mitigation measures. This process would also allow for
consideration of existing approved “wastewater offset credits” obtained by a developer
under the existing ordinance and program. The process would follow the reg ular review,
evaluation, and approvals for discretionary entitlement applications. Conditions of
approval would be required when reasonable and necessary to protect the public health,
safety, and general welfare and ensure compliance with all appliable Cit y regulations and
policies. The City’s authority for conditioned approvals is established in existing City
Municipal Code regulations, including Title 17 (Zoning Regulations), Article 6 (Permit
Procedures). The conditions of approval would be implemented and verified during the
building permit phase.
The overwhelming majority of development projects would not be subject to any future
offset requirements under the recommended changes. Ministerial and Minor
Development Review Projects (as defined in the City’s Zoning Ordinance, Municipal Code
Section 17.106.030) would not be subject to a wastewater flow offset requirement. For
example, a single-family residence, the addition of an accessory dwelling unit (ADU), the
remodel of an existing single-family residence, a 10-unit multi-family residential or mixed-
use project, and commercial tenant improvement projects would not require capacity
offsets based on the wastewater flow from these small projects. Projects that only require
a building permit and do not require a discretionary entitlement would also not be subject
to future offset requirements.
Based on the range of wastewater flow generated by future projects subject to
discretionary review, the following entitlement categories would be subject to engineering
analysis and flow modeling, and depending upon project and location -specific analysis,
may be subject to a conditioned discretionary offset requirement based on the analysis:
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Item 7b
1. Citywide: Major11 Development Review Projects, such as a 50-unit housing
project, subdivisions that would result in a 50-unit housing development (as one
example), and amendments to the City’s General Plan and/or a property’s zoning
designation.
2. Within a Capacity-Constrained Area: Moderate12 Development Review Projects
such as an 11-unit multi-family housing development or a subdivision that would
result in an 11-unit residential project (as one example).
The results of the engineering analysis and flow modeling will determine the conditioned
proportional offset, which may include but not be limited to public or private sewer
improvements, such as upsizing a sewer main, and/or replacing private sewer laterals
offsite. The City will continue to maintain the database and map showing the location of
poor and failed-condition laterals, such that this information could be used by a developer
to help satisfy the offset condition of approval.
Previous Council or Advisory Body Action
On August 19, 2025, staff presented 1) the results of the 2025 Wastewater Collection
System Infrastructure Renewal Strategy, including an updated capacity-constrained
areas map, 2) recommendation for expanded rebate eligibility for private sewer lateral
replacements and a new private sewer lateral inspection rebate, and 3) options to modify
of dissolve the existing Wastewater Flow Offset Program. Council directed staff to 1)
proceed to the Planning Commission and return to Council in December 2025 with an
updated capacity-constrained sewer map for inclusion in an amendment to the Water and
Wastewater Element of the General Plan, 2) return to Council with final recommendations
for updates to private sewer lateral rebates, and 3) return to Council in 2026, following
additional outreach and analysis, with updated recommendations regarding modifications
to the Wastewater Flow Offset Program.
On December 2, 2025, Council 1) adopted the new sewer capacity-constrained area map
as part of a General Plan amendment to the Water and Wastewater Element, and 2)
adopted updates to private sewer lateral rebates including extending eligibility for private
sewer lateral replacement rebates to multi-family and commercial properties located in
capacity-constrained areas (retaining existing eligibility for single -family homes citywide)
and creation of a new private sewer lateral inspection rebate.
11 Major Review Projects include multi and single-unit developments 50 units or more, and non-
residential/mixed-use development more than 10,000 square feet in size, significant additions in the
Downtown Commercial zone, and any project where an environmental impact report is required.
12 Moderate Review Projects include multi and single-unit developments between 11-49 units and non-
residential/mixed-use development 2,500 to 10,000 square feet in size, or a significant enlargement or
modification.
Page 331 of 370
Item 7b
Public Engagement
Since the December 2, 2025 Council Study Session, staff have met with various
community stakeholders and key partners to generate discussion and feedback, which
has been evaluated to determine alignment and to produce the recommendations in this
report. In summary:
January 8, 2026: staff met with several stakeholders in the development
community.
January 15, 2026: staff gave a presentation on proposed changes to approximately
20 San Luis Obispo Coastal Association of Realtors members at the San Luis
Obispo Compass office.
February 5, 2026: staff presented at the Developer’s Roundtable.
March 12, 2026: staff gave a presentation to the San Luis Obispo Chamber
Legislative Action Committee.
March 23, 2026: Following the March 12 Chamber meeting, staff met again with
several interested developers.
March 27, 2027: staff met again with representatives from the San Luis Obispo
Coastal Association of Realtors at the Compass office.
Both the realtor and developer communities have provided meaningful feedback and
participated in collaborative discussions to refine the City’s approach. Stakeholder
comments and concerns are summarized in Table 4 below, along with staff’s
corresponding responses and approaches, as incorporated into the action
recommendations (as applicable).
Table 4. Stakeholder Outreach Summary
Stakeholder Group Comments and Concerns Staff Response
Realtor
Hardship funding source
beyond $4,000 rebate for
those who qualify.
Staff have not yet identified a
Proposition 218-compliant funding
source and administrative structure to
implement this.
Realtor Limited contractor availability
to perform work.
Staff believe there are sufficient
qualified contractors to complete work,
and will conduct additional outreach to
other qualified firms not currently
performing replacements.
Realtor
Owner confusion between
plumber and City
assessment of lateral.
Staff are in the final stages of
evaluating an online portal that would
allow direct access to videos and
comments. This would result in
standardized review and serve as an
additional tool for private bid
procurement for replacement work.
Realtor May not be able to complete
work in 180 days.
Director discretion to extend deadline
with demonstration of good faith effort.
Page 332 of 370
Item 7b
Stakeholder Group Comments and Concerns Staff Response
Realtor Education is needed.
Staff will coordinate an expanded
roadshow to brokerage offices.
Ordinance change proposed to be
effective January 1, 2027 to allow for
additional outreach and education.
Realtor
Consider mandated
replacement of all existing
poor/failed laterals rather
than requiring replacement
through Inspection Upon
Sale Program.
Staff do not recommend this as
replacement through property transfer
allows for easier access to funding
source for the replacement (i.e.
included in home purchase financing).
Realtor Potential delay to escrow
closing.
Buyer and seller may negotiate
replacement through terms of sale,
similar to other contingency items.
Realtor
Can staff limit mandatory
repair or replacement of
poor/failed condition laterals
conditioned through the
Inspection Upon Sale
process to only laterals
located in capacity-
constrained areas?
Staff’s current recommendation to
require mandatory repair or
replacement applies to all laterals
conditioned as poor/failed City-wide,
which is consistent with all other
replacement triggers (e.g. development
and enforcement following sewer
spills). These faulty laterals introduce
groundwater and stormwater into the
system during wet-weather flows and
become obstructed during dry-weather
flows (root intrusion), both of which
lead to sewer spills.
Developer What happens to current
project requirements?
Project requirements may be waived
upon Council’s approval of staff’s
recommendations.
Developer
What happens with existing
“credits” for offsets already
completed?
Credits are available to use to offset
future mitigation requirements and are
subject to existing rebate eligibility.
Developer
If the Wastewater Flow
Offset Program is dissolved,
what is the project threshold
for future mitigation or
condition of approval
requirements?
1) All Major Development Review
projects, subdivisions that would
result in a major development-sized
project, and amendments to the
City’s General Plan and/or a
property’s zoning designation.
2) Moderate Development Review
projects and subdivisions that
would result in a moderate
development-sized project within a
capacity-constrained area.
Page 333 of 370
Item 7b
CONCURRENCE
The Community Development Department concurs with the proposed Municipal Code
amendment. Developers have noted that the current sewer lateral program is a barrier to
the development of housing, and the proposed changes could help facilitate housing
development and achievement of Major City and General Plan Housing Element goals
and policies. The proposed amendments also allow the continuing discretionary review
and conditioned approvals for specified entitlements in order to ensure public health,
safety and wellness. The City Attorney's Office has reviewed the draft Municipal Code
amendment and has approved to form.
ENVIRONMENTAL REVIEW
The proposed Municipal Code amendment and associated Council-authorized discretion
to the Public Works and Utilities Director is exempt from the California Environmental
Quality Act (CEQA) pursuant to State CEQA Guidelines Sections 15307 (Actions by
Regulatory Agencies for Protection of Natural Resources) and 15308 (Actions by
Regulatory Agencies for the Protection of the Environment) because the proposed
modifications are anticipated to result in a significantly greater number of replacements
of private sewer laterals in failed or poor condition (both within capacity-constrained areas
and citywide), which will result in a reduction in inflow and infiltration from groundwater
and stormwater affecting the City’s wastewater collection system, a reduction in wet
weather sewer spills within capacity-constrained areas, and a reduction in private sewer
lateral spills citywide.
In addition, currently, property sales require inspection of the privat e sewer lateral, only.
If that lateral is in poor or failed condition, there is no current requirement to replace the
lateral (unless other actions trigger the requirement, such as intensification through a
permitting process). These failed or poor-conditioned laterals contribute to inflow and
infiltration and have the potential to result in a sewage spill. Requiring replacement of
private sewer laterals in failed or poor condition as a requirement of a property sale would
avoid the potential for resulting private lateral sewage spills, which would have a
beneficial effect on the environment. As evident in the data,13 these modifications to the
program, including elimination of the mandatory offset requirements for projects currently
meeting the definition of “intensification”, would have an overall beneficial impact on the
environment. Furthermore, the Municipal Code amendment does not eliminate the
requirement for discretionary review for specified entitlements, review for consistency with
General Plan policies regarding wastewater collection system capacity, and CEQA
compliance, which requires consideration of a project’s impact on water quality and a
determination that the project can be adequately served by all required utilities and public
services.
13 From August 2019 to March 2026, 114 private sewer laterals have been replaced as a
requirement of the Wastewater Flow Offset Program. This is significantly less than the 341 private
sewer laterals that were conditioned as poor/failed (but not replaced) through the Inspection Upon
Sale Program during the same time period (Source: City of San Luis Obispo, 2026).
Page 334 of 370
Item 7b
The physical construction of private sewer lateral replacements resulting from the
Municipal Code amendment would be exempt from CEQA pursuant to State CEQA
Guidelines Sections 15301 (Existing Facilities), and 15303 (New Construction or
Conversion of Small Structures) as the new lateral would have substantially the same
purpose as the lateral to be replaced, and would involve negligible or no expansion of the
existing use.
FISCAL IMPACT
Budgeted: NA Budget Year: 2025-26
Funding Identified: NA
Fiscal Analysis:
While there are no fiscal impacts directly associated with this item, the Utilities Branch will
continue to administer private sewer lateral rebates through the currently adopted
programs or until appropriated funds are exhausted each fiscal year.
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $0 $0 $0 $0
State
Federal
Fees
Other:
Total $0 $0 $0 $0
Summary of Staff Recommendations:
1. Modification of the Citywide Sewer Lateral Inspection Program to include repair
or replacement of poor or failed condition laterals as determined through the
Inspection Upon Sale process.
2. Dissolution of mandatory Wastewater Flow (Private Sewer Lateral) Offset
Program requirements.
3. Continued discretionary review and determination of conditional wastewater
flow offsets for specified entitlements based on modeling and analysis.
4. Public Works and Utilities Director discretion to waive pending offset
improvements for entitled projects and building permits in process.
Page 335 of 370
Item 7b
ALTERNATIVES
1. Council may direct staff not to amend Title 13 of the City’s Municipal Code. This
alternative would retain existing wastewater flow offset requirements for intensification
projects and would not require mandatory repair or replacement of private sewer
laterals determined to be in poor or failed condition through the inspection upon sale
process. Impacts of this alternative include 1) retaining existing requirements for new
development and intensification projects in the city, which increase costs associated
with new development and housing, and 2) existing poor or failed laterals would not
be replaced after ownership transfer, resulting in increased risk to the property owner,
environment, and the city’s sewer conveyance system.
2. Council may direct staff to proceed with partial amendments to Title 13 of the
City’s municipal code, retaining the wastewater flow offset program and only
amending 13.08.395 to require mandatory replacement or repair of poor or failed
condition laterals following inspection upon sale reports. Under this scenario, the
number of private sewer lateral replacements would increase, and development
projects would continue to be subjected to the offset program mandates.
3. Council may direct staff to proceed with partial amendments to Title 13 of the
City’s municipal code and only amend 13.08.396 to dissolve the mandatory
wastewater flow offset program requirements for intensification projects. This
action would not achieve the overall beneficial effect resulting from the replacement
of poor or failed private sewer laterals following a condition assessment under the
Inspection Upon Sale program, without a specified timeframe f or lateral replacement.
Since 2019, 341 sewer laterals have been determined to be in poor or failed condition
during property sales, but these inspection reports did not require sewer lateral
replacement after ownership transfer. Results include increased burden on ratepayers
from inflow and infiltration (increased costs to convey and treat rainwater), emergency
response following sewer spills, and risks to property owners, the public, and the
environment associated with sewer spills.
ATTACHMENTS
A - Draft Ordinance entitled “An Ordinance of the City Council of the City of San Luis
Obispo, California, Amending Section 13.08.395 (Private Sewer Laterals/Systems)
and Section 13.08.396 (Wastewater Flow Offset) of the City of San Luis Obispo
Municipal Code.”
B - Draft Resolution entitled “A Resolution of the City Council of the City of San Luis
Obispo, California, Authorizing the Discretion of the Public Works and Utilities Director
to Waive Wastewater Flow Offset Program Requirements and Resolution and
Determination of Satisfaction of Conditions of Approval Related to Wastewater Flow
Offsets.”
Page 336 of 370
O ______
ORDINANCE NO. _____ (2026 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING TITLE 13, CHAPTER 13.08,
SECTION 13.08.395 (PRIVATE SEWER LATERALS/SYSTEMS) AND
SECTION 13.08.396 (WASTEWATER FLOW OFFSET) OF THE SAN
LUIS OBISPO MUNICIPAL CODE
WHEREAS, the City’s General Plan supports development and redevelopment of
sites that will accommodate the community’s future growth in areas with capac ity
constraints in the wastewater collection system; and
WHEREAS, General Plan Water and Wastewater Element Policies state that the
City’s wastewater collection system shall support population and related service demands
consistent with the General Plan (Policy B 2.2.2), and the City shall collect and convey all
wastewater under safe and sanitary conditions to the Water Resource Recovery Facility
(Goad B 4.1); and
WHEREAS, the City must provide capacity assurance consistent with its adopted
Sewer System Management Plan and Statewide General Waste Discharge
Requirements; and
WHEREAS, the City of San Luis Obispo has completed the 2025 Wastewater
Collections System Infrastructure Renewal Strategy, which includes an updated
wastewater flow model and data analysis; and
WHEREAS, private sewer laterals in failed and poor condition contribute
significant inflow and infiltration contributing to capacity constraints, surcharging, and
overflows in the wastewater collection system during peak wet weather events; and
WHEREAS, private sewer laterals in failed and poor condition are at high risk for
backups and overflow due to roots and debris that enter the system, which poses a
significant risk to the property owner, tenants, public and environment ; and
WHEREAS, in combination with the implementation of capital sewer projects, the
replacement of failed and poor-condition private sewer laterals will improve capacity in
the municipal collection system during peak wet weather events and reduce potential for
sewer surcharging and overflows.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis
Obispo that:
SECTION 1. Environmental Review. The proposed Municipal Code amendment is
exempt from the California Environmental Quality Act (CEQA) pursuant to State CEQA
Guidelines Sections 15307 (Actions by Regulatory Agencies for Protection of Natural
Resources) and 15308 (Actions by Regulatory Agen cies for the Protection of the
Page 337 of 370
Ordinance No. _____ (2026 Series) Page 2
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Environment) because the proposed modifications are anticipated to result in a
significantly greater number of replacements of private sewer laterals in failed or poor
condition (both within capacity-constrained areas and citywide), which will result in a
reduction in inflow and infiltration from groundwater and stormwater affecting the City’s
wastewater collection system, and a reduction in wet weather sewer spills within capacity-
constrained areas. The physical construction of private sewer lateral replacements
resulting from the Municipal Code amendment would be exempt from CEQA pursuant to
State CEQA Guidelines Sections 15301 (Existing Facilities), and 15303 (New
Construction or Conversion of Small Structures) as the new lateral would have
substantially the same purpose as the lateral to be replaced, and would involve negligible
or no expansion of the existing use.
SECTION 2. Municipal Code Section 13.08.395 of the San Luis Obispo Municipal
Code and Ordinance Number 1734 (2024 Series) is hereby amended to read as follows
and superseded to the extent inconsistent herewith:
13.08.395 Private sewer laterals/systems.
A. Purpose. Inflow and infiltration (I/I) is a serious problem for the city in that during wet
weather events, a significant amount of water is introduced into the city’s wastewater
collection system from breaches in the public and private sewer pipeline system. Studies
have shown that private sewer laterals are a significant source of I/I for the city. The city
has determined that it is in the interest of the public’s health, safety, and welfare to
address I/I contributed by private sewer laterals and, as such, it is a city priority to require
the inspection of private sewer laterals.
B. Ownership, Maintenance, and Repair.
1. The entire lateral, from the building connection up to and including the “wye”
connection or other tie-in to the city-owned sewer main, shall fall within the owner’s
responsibility for installation, maintenance, repair, and replacement.
2. Each property owner shall be responsible for maintenance and repair of their
private sewer lateral in compliance with this section in a safe and sanitary condition,
including:
a. Private sewer laterals shall be free of displaced joints, breaks, offsets,
structural defects, damage, open joints, missing portions of pipe, root intrusion,
cracks, leaks, sediment deposits, bellies in the pipe or any other similar
conditions, defects or obstructions likely to cause or contribute to blockage of the
private sewer lateral or the public sewer.
b. Private sewer laterals shall be equipped with cleanouts.
c. Private sewer laterals shall not be constructed, either in whole or in part, of
“Orangeburg pipe.”
Page 338 of 370
Ordinance No. _____ (2026 Series) Page 3
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d. As described in Section 13.08.030(A), it is unlawful for any individual to
connect the following to a private sewer lateral: storm drains, roof drains, yard
drains, surface or subsurface drainage, groundwater, or other non -sewage pipes
or drains.
3. If a property owner fails to maintain the abovementioned wastewater facilities in
a safe and sanitary condition, the director may order and require termination of water
service to the parcel and all structures connected to the sewer outlet subject to these
conditions. The water service shall not be reinstated until the maintenance or
installation of appropriate wastewater disposal facilities has been approved by the
director.
4. Before granting any permit authorizing construction of a private sewer lateral or
private sewer main serving multiple properties, the city shall require a private
easement setting forth responsibilities for each parcel served (including responsibility
for maintenance, inspection, and improvement of the shared sewer lateral).
C. Inspection of Existing Private Sewer Laterals.
1. Except as set forth in subsection (C)(2) of this section, after January 1, 2020, all
private sewer laterals connected to the city’s sewer system shall be inspected per
subsection F of this section at the property owner’s sole expense, when any of
the following events occur:
a. Whenever the city has issued a notice of violation following a sanitary sewer
overflow event from a property’s private sewer lateral.
b. Upon submittal of a building permit for the addition of a bedroom, bathroom,
or kitchen in a residential structure or the addition of nonresidential space
or an additional plumbing fixture unit in nonresidential structures.
c. A change of the use of the structure from: (i) residential to nonresidential
use; (ii) to a nonresidential use that will result in a higher flow than the
previous nonresidential use; or (iii) to a nonresidential use where the
structure served has been vacant or unoccupied for more than three years.
d. Increase in size of the domestic water meter serving the property or adding
a new domestic water meter.
e. Whenever property located in the city and containing one or more structures
which are served by a private sewer lateral or laterals is subdivided. The
inspection shall occur prior to recordation of the final map.
f. Within thirty days of notification by the city that “smoke testing” or closed -
circuit television (CCTV) sewer main inspection indicates the presence of
inflow or infiltration from private property that impacts the operation of the
public wastewater collection system.
g. Upon any change in ownership of real property within the city, which shall
be implemented as follows:
i. “Change in ownership” shall have the meaning set forth in California
Revenue and Taxation Code Sections 60 and 61. A change in ownership
Page 339 of 370
Ordinance No. _____ (2026 Series) Page 4
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shall not include those transactions as set forth in California Revenue
and Taxation Code Section 62.
ii. Before close of escrow for any change in ownership of real property
within the city, the seller(s) of such property shall disclose to the buyer(s)
the results of the private sewer lateral inspection as set forth in
subsection F of this section.
h. For events identified in subsections (C)(1)(a) through (C)(1)(g) of this
section, repair or replacement shall be made pursuant to subsection G of
this section.
i. For events identified in subsection (C)(1)(g), repair or replacement
requirements pursuant to subsection G of this section shall not be effective
until January 1, 2027.
D. Private Sewer Laterals Within Common Interest Developments.
1. For purposes of this section, the term “common interest development” shall
include any community apartment project, condominium project, planned
development, or stock cooperative.
2. Private sewer laterals located within a common interest development shall be
inspected pursuant to the requirements of subsection F of this section as follows:
a. Whenever the city has issued a notice of violation following a sanitary sewer
overflow event from a common interest development’s private sewer lateral.
b. Increase in size of the water meter serving the common interest development.
3. Exceptions. An inspection required pursuant to subsection (D)(1) of this section
shall not be required in the following circumstances:
a. Prior Replacement of Lateral. If the private sewer lateral serving the common
interest development in its entirety was installed or replaced within the twenty
years prior to the date the inspection would otherwise be required.
b. Prior Inspection or Repair of a Lateral. If the private sewer lateral serving the
common interest development in its entirety was inspected in accordance with
the inspection requirements of subsection F of this section within the five years
prior to the date the inspection would otherwise be required.
E. Inspection of Shared Private Sewer Laterals. Each property owner served by a shared
private sewer lateral shall be responsible for compliance with subsection B of this section
and shall be subject to the inspection requirements identified in subsection C of this
section. For purposes of this subsection E, a “shared private sewer lateral” shall mean
laterals serving more than one property that are not part of a common interest
development.
F. Inspection Requirements.
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Ordinance No. _____ (2026 Series) Page 5
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1. Property owners must submit documentation of the sewer lateral inspection to the
city prior to the close of escrow. Testing may be accomplished by either a water
exfiltration test, an air test, or closed-circuit video recording observation. Installation
of cleanouts and removal of existing P-traps may be necessary to accomplish the
video inspection. If a closed-circuit video recording observation is selected as the
method of inspection, then the video shall meet the following requirements:
a. Shall be in digital format.
b. Shall be in color (black and white or otherwise unclear video will not be
accepted).
c. Shall show the address of the lateral.
d. Shall show the date the video was taken.
e. Shall inspect the entire lateral from the house connection to the city -owned
sewer main.
f. Shall have a running foot or time marker clearly visible on the screen.
g. Where joints are present, shall briefly stop the camera at each to clearly
indicate their integrity.
h. Shall have the telephone number for the point of contact for the company
providing the inspection.
i. A map shall be provided with the video inspection to clearly show the lateral
location including the cleanout or access point at the house connection used to
insert the camera into the lateral and the wye connection to the city-owned sewer
main.
2. The lateral inspection and lateral inspection report shall be prepared and signed
by a contractor, plumber, or a person experienced in lateral inspections who shall
declare that the report is true and correct. At a minimum, the ins pection report shall
include the information in Exhibit A:
EXHIBIT A: PRIVATE SEWER LATERAL INSPECTION REPORT
Property Address (or
Addresses):_________________________________________________________________
Inspection
Date:_______________________________
Inspection
Method:______________________________
Company Name/Point of
Contact:__________________________________________________________________
Phone Number/Email
Address:____________________________________________________________________
Page 341 of 370
Ordinance No. _____ (2026 Series) Page 6
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EXHIBIT A: PRIVATE SEWER LATERAL INSPECTION REPORT
Lateral Length (in
feet):_________________________
Lateral
Material:______________________________
Installation date (if
known):______________________
Lateral
Age:_________________________________
Describe deficiencies (if
any):____________________________________________________________________
Plumber/Contractor
Signature:___________________________________________________________________
License # of
Plumber/Contractor:___________________________________________________________
Property Owner
Signature:___________________________________________________________________
Property Owner interest in participating in city Wastewater Flow Offset Program: * YES NO
* If Property Owner indicates “Yes”, city would include address on eligibility list for Wastewater
Flow Offset Mitigation requirement.
3. A contractor, plumber, or a person experienced in lateral inspections who
prepares a false lateral inspection report shall be subject to punishment under
Article XII of this chapter in addition to any other legal remedies or punishment
provided by law.
4. Verification. The city reserves the right to verify the sewer lateral inspection
results prior to being accepted.
G. Sewer Lateral Repair or Replacement Requirements. Upon receipt of the private
sewer lateral inspection report pursuant to this chapter, the city shall review the private
sewer lateral inspection and lateral inspection report to verify the plumber/contractor
findings and provide the owner with a determination on whether the lateral meets the
criteria described in subsection B of this section. If the private sewer lateral is not in
compliance with subsection B of this section, then it shall be repaired or replaced to
conform to such standards within one hundred eighty days of the city’s determination. If
an inspection of a noncompliant lateral was conditioned due to a sanitary sewer
Page 342 of 370
Ordinance No. _____ (2026 Series) Page 7
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overflow or from findings of infiltration and intrusion, or a lateral with defects having not
met the required pipe material requirements, it must be completely replaced rather than
repaired. No person shall repair or replace a sewer lateral without first obtaining a
permit from the city.
H. Punishment for Violation of This Chapter. Violations of this article shall be
punishable pursuant to the remedies identified in Article XII of this chapter. It is
considered a violation for any property owner to have a sewer lateral system that does
not comply with subsection B of this section, unless the repair or replacement of such
system is being pursued in good faith. The city may withhold building permits or other
discretionary approvals for a property with a private sewer lateral that is determined to
be not in compliance with subsection B of this section until the private sewer lateral is
brought into compliance with city standards. Final building approval will be conditioned
upon repair or replacement of any noncompliant lateral systems to the satisfaction of
the director.
I. Rebate Programs. The city may establish by resolution one or more programs to
assist owners with the replacement of private sewer laterals.
J. Fees. The city council may from time to time establish, by resolution, fees for issuing
permits, reviewing inspection reports and other activities of the city performed pursuant
to this chapter.
SECTION 3 Municipal Code Section 13.08.396 of the San Luis Obispo Municipal
Code and Ordinance Number 1734 (2024 Series) is hereby amended to read as follows
and superseded to the extent inconsistent herewith:
13.08.396 Wastewater flow offset.
A. Discretionary Review. As contemplated and consistent with the City’s Wastewater
Collection System Infrastructure Renewal Strategy, current and as may be amended, the
City reserves the right to conduct discretionary review of development, subdivision, and
land use entitlements that contribute wastewater flow to the municipal wastewater
collection system. Nothing in this Municipal Code Chapter shall prohibit the City from
imposing conditions of approval for wastewater flow capacity offsets deemed
proportional, reasonable, and necessary to protect the public health, safety, and general
welfare and ensure compliance with this Chapter and all applicable City regulations and
policies.
1. Major development review entitlements and General Plan and Zoning
Amendments citywide and Moderate development review projects within
wastewater system capacity constrained areas shall be subject to engineering
analysis, such as wastewater flow estimates and wastewater flow modeling
provided by the applicant with the entitlement application to determine available
sewer system capacity and the project’s effect on the municipal wastewater
collection system. Subdivision and use permit entitlements resulting in the range
Page 343 of 370
Ordinance No. _____ (2026 Series) Page 8
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of development as identified in the Major and Moderate Development review tiers
shall be subject to this requirement.
2. The results of the engineering analysis and flow modeling shall determine
associated conditions of approval, which may include but not be limited to public
or private sewer improvements, such as upsizing sewer mains, and/or replacing
private sewer laterals to offset capacity deficiencies.
SECTION 4. A summary of this ordinance, together with the names of Council
members voting for and against, shall be published at least five (5) days prior to its final
passage, in The New Times, a newspaper published and circulated in this City. This
ordinance shall go into effect at the expiration of thirty (30) days after its final passage.
INTRODUCED on the ____ day of ____, 2026, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the ____ day of ____, 20 26, on the following
vote:
AYES:
NOES:
ABSENT:
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
Page 344 of 370
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EXHIBIT A
SECTIONS 13.08.395 AND 13.08.396
LEGISLATIVE DRAFT
Page 345 of 370
13.08.395 Private sewer laterals/systems.
A. Purpose. Inflow and infiltration (I/I) is a serious problem for the city in that during wet
weather events, a significant amount of water is introduced into the city’s wastewater collection
system from breaches in the public and private sewer pipeline system. Studies have shown that
private sewer laterals are a significant source of I/I for the city. The city has determined that it is
in the interest of the public’s health, safety, and welfare to address I/I contributed by private
sewer laterals and, as such, it is a city priority to require the inspection of private sewer laterals.
B. Ownership, Maintenance, and Repair.
1. The entire lateral, from the building connection up to and including the “wye” connection
or other tie-in to the city-owned sewer main, shall fall within the owner’s responsibility for
installation, maintenance, repair, and replacement.
2. Each property owner shall be responsible for maintenance and repair of their private
sewer lateral in compliance with this section in a safe and sanitary condition, including:
a. Private sewer laterals shall be free of displaced joints, breaks, offsets, structural
defects, damage, open joints, missing portions of pipe, root intrusion, cracks, leaks,
sediment deposits, bellies in the pipe or any other similar conditions, defects or
obstructions likely to cause or contribute to blockage of the private sewer lateral or the
public sewer.
b. Private sewer laterals shall be equipped with cleanouts.
c. Private sewer laterals shall not be constructed, either in whole or in part, of
“Orangeburg pipe.”
d. As described in Section 13.08.030(A), it is unlawful for any individual to connect the
following to a private sewer lateral: storm drains, roof drains, yard drains, surface or
subsurface drainage, groundwater, or other non-sewage pipes or drains.
3. If a property owner fails to maintain the abovementioned wastewater facilities in a safe
and sanitary condition, the director may order and require termination of water service to
the parcel and all structures connected to the sewer outlet subject to these conditions. The
water service shall not be reinstated until the maintenance or installation of appropriate
wastewater disposal facilities has been approved by the director.
4. Before granting any permit authorizing construction of a private sewer lateral or private
sewer main serving multiple properties, the city shall require a private easement setting
Page 346 of 370
forth responsibilities for each parcel served (including responsibility for maintenance,
inspection, and improvement of the shared sewer lateral).
C. Inspection of Existing Private Sewer Laterals.
1. Except as set forth in subsection (C)(2) of this section, after January 1, 2020, all private
sewer laterals connected to the city’s sewer system shall be inspected per subsection F of
this section at the property owner’s sole expense, when any of the following events occur:
a. Whenever the city has issued a notice of violation following a sanitary sewer
overflow event from a property’s private sewer lateral.
b. Upon submittal of a building permit for the addition of a bedroom, bathroom, or
kitchen in a residential structure or the addition of nonresidential space or an additional
plumbing fixture unit in nonresidential structures.
c. A change of the use of the structure from: (i) residential to nonresidential use; (ii) to
a nonresidential use that will result in a higher flow than the previous nonresidential
use; or (iii) to a nonresidential use where the structure served has been vacant or
unoccupied for more than three years.
d. Increase in size of the domestic water meter serving the property or adding a new
domestic water meter.
e. Whenever property located in the city and containing one or more structures which
are served by a private sewer lateral or laterals is subdivided. The inspection shall
occur prior to recordation of the final map.
f. Within thirty days of notification by the city that “smoke testing” or closed-circuit
television (CCTV) sewer main inspection indicates the presence of inflow or infiltration
from private property that impacts the operation of the public wastewater collection
system.
g. Upon any change in ownership of real property within the city, which shall be
implemented as follows:
i. “Change in ownership” shall have the meaning set forth in California Revenue
and Taxation Code Sections 60 and 61. A change in ownership shall not include
those transactions as set forth in California Revenue and Taxation Code Section
62.
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ii. Before close of escrow for any change in ownership of real property within the
city, the seller(s) of such property shall disclose to the buyer(s) the results of the
private sewer lateral inspection as set forth in subsection F of this section.
h. For events identified in subsections (C)(1)(a) through (C)(1)(f) (C)(1)(g) of this
section, repair or replacement shall be made pursuant to subsection G of this section.
i. For events identified in subsection (C)(1)(g), repair or replacement
requirements pursuant to subsection G of this section shall not be effective until
January 1, 2027.
2. Exceptions. An inspection required pursuant to subsection (C)(1) of this section shall
not be required in the following circumstances:
a. New Construction or Prior Replacement of Lateral. If the owner(s) (or the owner’s
predecessor-in-interest) has originally installed or has replaced the private sewer lateral
within the twenty years prior to the date the inspection would otherwise be required.
b. Prior Inspection of a Lateral. If the owner(s) (or the owner’s predecessor-in-interest)
has completed an inspection of the sewer lateral in accordance with the inspection
requirements of subsection F of this section within the past five years.
c. The private sewer lateral is located within a common interest development system
that is not owned and operated by the city, which is regulated under subsection D of
this section and serves more than two separate units or properties within the common
interest development.
The owner shall bear the burden of proving that the inspection requirements of
subsection (C)(1) of this section do not apply. The owner shall provide proof of any
prior replacement, inspection or repair of a private sewer lateral in the form of a validly
issued permit or other documentation that ensures such prior replacement, repair or
inspection of a private sewer lateral occurred pursuant to the exceptions above. The
form and content of the document or proof must be deemed sufficient by the city’s
utilities director.
D. Private Sewer Laterals Within Common Interest Developments.
1. For purposes of this section, the term “common interest development” shall include any
community apartment project, condominium project, planned development, or stock
cooperative.
2. Private sewer laterals located within a common interest development shall be inspected
pursuant to the requirements of subsection F of this section as follows:
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a. Whenever the city has issued a notice of violation following a sanitary sewer
overflow event from a common interest development’s private sewer lateral.
b. Increase in size of the water meter serving the common interest development.
3. Exceptions. An inspection required pursuant to subsection (D)(1) of this section shall
not be required in the following circumstances:
a. Prior Replacement of Lateral. If the private sewer lateral serving the common
interest development in its entirety was installed or replaced within the twenty years
prior to the date the inspection would otherwise be required.
b. Prior Inspection or Repair of a Lateral. If the private sewer lateral serving the
common interest development in its entirety was inspected in accordance with the
inspection requirements of subsection F of this section within the five years prior to the
date the inspection would otherwise be required.
E. Inspection of Shared Private Sewer Laterals. Each property owner served by a shared
private sewer lateral shall be responsible for compliance with subsection B of this section and
shall be subject to the inspection requirements identified in subsection C of this section. For
purposes of this subsection E, a “shared private sewer lateral” shall mean laterals serving more
than one property that are not part of a common interest development.
F. Inspection Requirements.
1. Property owners must submit documentation of the sewer lateral inspection to the city
prior to the close of escrow. Testing may be accomplished by either a water exfiltration test,
an air test, or closed-circuit video recording observation. Installation of cleanouts and
removal of existing P-traps may be necessary to accomplish the video inspection. If a
closed-circuit video recording observation is selected as the method of inspection, then the
video shall meet the following requirements:
a. Shall be in digital format.
b. Shall be in color (black and white or otherwise unclear video will not be accepted).
c. Shall show the address of the lateral.
d. Shall show the date the video was taken.
e. Shall inspect the entire lateral from the house connection to the city-owned sewer
main.
f. Shall have a running foot or time marker clearly visible on the screen.
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g. Where joints are present, shall briefly stop the camera at each to clearly indicate
their integrity.
h. Shall have the telephone number for the point of contact for the company providing
the inspection.
i. A map shall be provided with the video inspection to clearly show the lateral location
including the cleanout or access point at the house connection used to insert the
camera into the lateral and the wye connection to the city-owned sewer main.
2. The lateral inspection and lateral inspection report shall be prepared and signed by a
contractor, plumber, or a person experienced in lateral inspections who shall declare that
the report is true and correct. At a minimum, the inspection report shall include the
information in Exhibit A:
EXHIBIT A: PRIVATE SEWER LATERAL INSPECTION REPORT
Property Address (or
Addresses):_________________________________________________________________
Inspection
Date:_______________________________
Inspection
Method:______________________________
Company Name/Point of
Contact:__________________________________________________________________
Phone Number/Email
Address:____________________________________________________________________
Lateral Length (in
feet):_________________________
Lateral
Material:________________________________
Installation date (if
known):______________________
Lateral
Age:___________________________________
Describe deficiencies (if
any):____________________________________________________________________
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EXHIBIT A: PRIVATE SEWER LATERAL INSPECTION REPORT
Plumber/Contractor
Signature:____________________________________________________________________
License # of
Plumber/Contractor:__________________________________________________________________
Property Owner
Signature:_______________________________________________________________________
Property Owner interest in participating in city Wastewater Flow Offset Program: * YES NO
* If Property Owner indicates “Yes”, city would include address on eligibility list for Wastewater Flow
Offset Mitigation requirement.
3. A contractor, plumber, or a person experienced in lateral inspections who prepares a
false lateral inspection report shall be subject to punishment under Article XII of this chapter
in addition to any other legal remedies or punishment provided by law.
4. Verification. The city reserves the right to verify the sewer lateral inspection results prior
to being accepted.
G. Sewer Lateral Repair or Replacement Requirements. Upon receipt of the private sewer
lateral inspection report pursuant to this chapter, the city shall review the private sewer lateral
inspection and lateral inspection report to verify the plumber/contractor findings and provide the
owner with a determination on whether the lateral meets the criteria described in subsection B
of this section. If the private sewer lateral is not in compliance with subsection B of this section,
then it shall be repaired or replaced to conform to such standards within one hundred eighty
days of the city’s determination. If an inspection of a noncompliant lateral was conditioned due
to a sanitary sewer overflow or from findings of infiltration and intrusion, or a lateral with defects
having not met the required pipe material requirements, it must be completely replaced rather
than repaired. No person shall repair or replace a sewer lateral without first obtaining a permit
from the city.
H. Punishment for Violation of This Chapter. Violations of this article shall be punishable
pursuant to the remedies identified in Article XII of this chapter. It is considered a violation for
any property owner to have a sewer lateral system that does not comply with subsection B of
this section, unless the repair or replacement of such system is being pursued in good faith. The
city may withhold building permits or other discretionary approvals for a property with a private
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sewer lateral that is determined to be not in compliance with subsection B of this section until
the private sewer lateral is brought into compliance with city standards. Final building approval
will be conditioned upon repair or replacement of any noncompliant lateral systems to the
satisfaction of the director.
I. Rebate Programs. The city may establish by resolution one or more programs to assist
owners with the replacement of private sewer laterals.
J. Fees. The city council may from time to time establish, by resolution, fees for issuing
permits, reviewing inspection reports and other activities of the city performed pursuant to this
chapter. (Ord. 1734 § 8, 2024; Ord. 1704 §§ 16—18, 2021; Ord. 1665 § 3, 2019)
13.08.396 Wastewater flow offset.
A. Discretionary Review. As contemplated and consistent with the City’s Wastewater
Collection System Infrastructure Renewal Strategy, current and as may be amended, the City
reserves the right to conduct discretionary review of development, subdivision, and land use
entitlements that contribute wastewater flow to the municipal wastewater collection system.
Nothing in this Municipal Code Chapter shall prohibit the City from imposing conditions of
approval for wastewater flow capacity offsets deemed proportional, reasonable, and necessary
to protect the public health, safety, and general welfare and ensure compliance with this
Chapter and all applicable City regulations and policies.
1. Major development review entitlements and General Plan and Zoning Amendments
citywide and Moderate development review projects within wastewater system capacity
constrained areas shall be subject to engineering analysis, such as wastewater flow
estimates and wastewater flow modeling provided by the applicant with the entitlement
application to determine available sewer system capacity and the project’s effect on the
municipal wastewater collection system. Subdivision and use permit entitlements
resulting in the range of development as identified in the Major and Moderate
Development review tiers shall be subject to this requirement.
2. The results of the engineering analysis and flow modeling shall determine associated
conditions of approval, which may include but not be limited to public or private sewer
improvements, such as upsizing sewer mains, and/or replacing private sewer laterals to
offset capacity deficiencies.
A. Purpose. The city experiences surcharging in the wastewater collection system and sanitary
sewer overflows during wet weather events due to inflow and infiltration. The purpose of these
regulations is to establish a methodology whereby new or intensified development in capacity
constrained areas as established by the city council could offset new wastewater flow to
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mitigate capacity constraints in the existing wastewater collection system to accommodate the
project’s additional demand. Without a reduction in inflow and infiltration in these areas, the city
will not be able to serve new or intensified development until a significant number of private
sewer laterals are replaced or public sewer mains are upsized. Wastewater flow offset through
private lateral replacement provides a benefit to the wastewater collection system and the
community by reducing public and environmental health concerns by reducing potential SSOs.
B. Application. The provisions of this article shall apply to new or intensified development in
capacity constrained areas of the wastewater collection system as established by the city
council.
C. Calculating the Wastewater Flow Offset. An applicant shall calculate a development’s
wastewater flow offset (Exhibit B) using the domestic sewage generation factors and peaking
factor identified in the uniform design criteria, found in the city’s adopted engineering standards.
D. Wastewater Flow Offset Through Private Lateral Replacement. The city determined that
replacement of a private sewer lateral serving an existing single-family residence (one
equivalent dwelling unit) would create a wastewater flow offset of three hundred ninety gallons
per day. This is equal to the wastewater generation rate of one single-family residence (one
hundred fifty gallons per day), at a peaking factor of 2.6.
EXHIBIT B: Wastewater Flow Offset Calculation Worksheet
Residential Development:
Studio Units: ____________________________
Multi-Family Units: ____________________________
Single-Family Units: ____________________________
Residential Wastewater
Flow:
Studio Units: ____________________________
Multi-Family Units: ____________________________
Single-Family Units: ____________________________
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EXHIBIT B: Wastewater Flow Offset Calculation Worksheet
RESIDENTIAL FLOW TOTAL (gallons per
day):
____________________________
Non-Residential
Development:
Commercial Square
Footage:
____________________________
Industrial Square Footage: ____________________________
Manufacturing Square
Footage:
____________________________
Business Park Square
Footage:
____________________________
Hotel/Motel Rooms: ____________________________
Non-Residential
Wastewater Flow:
Commercial: ____________________________
Industrial: ____________________________
Manufacturing: ____________________________
Business Park: ____________________________
Hotel/Motel: ____________________________
NON-RESIDENTIAL FLOW TOTAL (gallons per
day):
____________________________
(Proposed Residential Flow + Proposed Non-Residential Flow) x Peaking Factor =
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EXHIBIT B: Wastewater Flow Offset Calculation Worksheet
Total Wastewater Flow Offset
TOTAL WASTEWATER FLOW OFFSET
(gallons per day):
____________________________
* Replacement of a private sewer lateral serving an existing single-family residence (one
equivalent dwelling unit) would offset 390 gallons per day of additional wastewater flow.
E. Wastewater flow offset must occur off-site, within the same capacity constrained wastewater
flow basin as the proposed new or intensified development. Developers required to complete an
offset must complete a wastewater flow offset program application to obtain a building permit for
the offset. Underlying building permits for the project triggering the offset may be withheld until
completion of the wastewater offset.
F. Construction of off-site public sewer main improvements, including replacement or
rehabilitation of sewer manholes, providing the equivalent or greater reduction in inflow and
infiltration within the same capacity constrained wastewater flow basin may be allowed as an
alternative to wastewater flow offsets (replacement of private sewer laterals) at the discretion of
the utilities director.
G. Single-family residences applying for an ADU building permit may be allowed to submit for
an offset in a different capacity constrained basin, provided there is an equivalent or greater
reduction in inflow and infiltration, at the discretion of the utilities director.
H. Sewer capacity offsets within the same parcel boundary (on-site) may be considered as an
offset credit for a residential intensification project, at the discretion of the utilities director. (Ord.
1734 § 8, 2024; Ord. 1704 § 19, 2021; Ord. 1665 § 3, 2019)
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R ______
RESOLUTION NO. _____ (2026 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AUTHORIZING THE DISCRETION OF THE
PUBLIC WORKS AND UTILITIES DIRECTOR TO WAIVE
WASTEWATER FLOW OFFSET PROGRAM REQUIREMENTS AND
RESOLUTION AND DETERMINATION OF SATISFACTION OF
CONDITIONS OF APPROVAL RELATED TO WASTEWATER FLOW
OFFSETS
WHEREAS, on April 2, 2024, the City of San Luis Obispo adopted Ordinance
1734, which amended the Wastewater Flow (Sewer Lateral) Offset Program as
established in Municipal Code Section 13.08.396 ; and
WHEREAS, on April 21, 2026, the City Council introduced an ordinance to amend
Municipal Code Section 13.08.396 and dissolve the mandatory Wastewater Flow Offset
Program; and
WHEREAS, the City Council determined that the mandatory Wastewater Flow
Offset Program would no longer be required for entitlements and permits currently in
process, and resolution and determination of satisfaction of conditions of approval specific
to wastewater flow offsets would be at the discretion of the Public Works and Utilities
Director.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows/or that (whatever action is needed):
SECTION 1. Action. The Director of the Public Works and Utilities Department has
the discretion and authority to waive mandatory Wastewater Offset Flow Program
requirements and previously required conditions of approval for building permits currently
in process as of the date of the adoption of this Resolution (prior to issuance of a building
permit and prior to occupancy), upon the Director’s determination that there is adequate
capacity in the affected wastewater collection system and issuance of the waiver would
not result in an impact on public health and safety. The Director of Public Works and
Utilities has the discretion and authority to resolve and make a determination that
identified conditions of approval related to wastewater flow offsets have been satisfied.
Upon motion of Council Member ___________, seconded by Council Member
___________, and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _______________ 20 26.
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Resolution No. _____ (2026 Series) Page 2
R ______
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
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