HomeMy WebLinkAboutItem 6g - Appropriate Storm Preparation and Response Funding Item 6g
Department: Public Works
Cost Center: 5009
For Agenda of: 9/15/2026
Placement: Consent
Estimated Time: N/A
FROM: Aaron Floyd, Public Works & Utilities Director
Prepared By: Brian Nelson, Deputy Director of Public Works / City Engineer
SUBJECT: APPROPRIATE STORM PREPARATION AND RESPONSE FUNDING
RECOMMENDATION
1. Appropriate $1,100,000 in Capital Projects Reserve Funding to the Storm Response
and Recovery Project Account to support storm preparation emergency projects; and,
2. Authorize the Finance Director to appropriate state grant funds for storm
preparedness infrastructure upgrade and repair projects, pending confirmation of
grant award and grant amount (expected to be $1,340,000); and,
3. Authorize the City Manager to execute state grant agreements in a final form approved
by the City Engineer and City Attorney; and,
4. Authorize the City Manager to transfer a total aggregate amount not to exceed
$500,000 from Completed Projects Funding to the Storm Response and Recovery
and/or Storm Drains project accounts to support any unforeseen cost increases or
state grant matching requirements associated with the delivery of storm preparedness
capital projects; and,
5. Adopt a draft Resolution (Attachment A) entitled, “A Resolution of the City Council of
the City of San Luis Obispo, California, Authorizing Appropriation of $1,100,000 from
the Capital Projects Reserve Fund, as well as State Water Resources Control Board
Grant Funding, to support Storm Preparedness Infrastructure Upgrades and Repairs
REPORT-IN-BRIEF
Recent inspections have identified storm infrastructure deficiencies that could pose
increased risks to public and private property during a significant storm event,
necessitating the City to advance emergency repairs and other priority storm
preparedness projects before the upcoming El Niño storm season. At the same time, the
City is expected to receive approximately $1.34 million in State funding to support storm
infrastructure upgrades and repairs, providing an opportunity to leverage outside funding
to address additional priority needs. Staff recommends appropriating $1.1 million in
Capital Projects Reserve funding to advance emergency repairs, appropriating the
anticipated State grant funding for eligible storm preparedness projects, and authorizing
the City Manager to execute the associated grant agreements. Staff also recommends
delegating authority to transfer up to $500,000 from CIP Completed Projects funding to
address unforeseen costs or grant matching requirements that may arise as these
projects are delivered.
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Item 6g
POLICY CONTEXT
The most recent Purchasing Guidelines for Job Order Contracts were approved by
Council via Resolution No. 11328 (2022 Series), as part of the 2022 Update to the City’s
Financial Management Manual.
The Fund Balance and Reserve Policy, adopted in June 2021, provides guidelines for the
Capital Projects Reserve Fund and states:
The City will maintain a committed reserve of 20% of the capital improvement plan
budget from the Local Revenue Measure for the purposes of offsetting
unanticipated cost increases, unforeseen conditions, and urgent unanticipated
projects to provide continued investment in infrastructure maintenance and
enhancement. Use and allocations of funds from the Capital Projects Reserve
Fund will be made to Capital Projects including Major Facility Replacement upon
Council approval as necessary during any fiscal year.
The proposed use of the Capital Projects Reserve Fund to supplement storm
preparedness projects is consistent with this policy, as these funds would be utilized for
urgent infrastructure maintenance projects.
Section 804 of the City’s Charter States that “…at any meeting after the adoption of the
budget, the Council may amend or supplement the budget by motion adopted by a
majority vote of the Council”. Staff’s recommendation to appropriate CIP Reserve funds
as well as state grant funds (if awarded), are consistent with this Charter Section.
Furthermore, the recommended actions related to the state grant funding are consistent
with the City’s Grant Management Policy - Section 740 of the 2025 Financial Management
Manual, which states that the City will aggressively pursue grant funding from state and
other sources, with a focus on securing grants for capital projects. Due to the quick
timeframe required to request grant funding, prior authority to apply for the state grant
was not received; therefore, approval of this report also confirms Council’s support for
utilizing grant funding, since the grant amount is in excess of $5,000.
DISCUSSION
Background – CIP Reserve Request
Old Garden Creek is a concrete-lined channel extending from Foothill Boulevard to
Patricia Drive that was constructed following the 1969 flood. On September 2, 2026, City
staff, accompanied by a structural engineer, inspected portions of the channel to eva luate
the condition and stability of several retaining walls.
The inspection identified significant deterioration and movement at two locations near
Felton Drive and Cuesta Drive. At the Felton Drive location, approximately 115 feet of
channel wall is distressed, has separated from the adjacent bridge, and contains f ailed
and fractured CMU blocks. At the Cuesta Drive location, approximately 300 feet of
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Item 6g
channel wall is heavily leaning, with fractured reinforcing steel and cracked CMU blocks
at the connection to the upstream bridge. Failure of these walls during a signi ficant storm
event could obstruct the creek channel and potentially impact six residential properties
and utility infrastructure in the surrounding area. These segments of wall were
constructed by the City in the early 1970’s and exist within a City-owned drainage
easement, meaning the City bears maintenance responsibility and has right of access to
the project area to perform any such maintenance.
Photos of Leaning block wall and Site Locations
Based on the observed conditions and consultation with a structural engineer, staff
believe the walls are at risk of failure during a significant storm event. Downstream of this
location, similar sections of wall experienced failure in January, March, and November
2023 and were repaired as part of the City’s 2023 emergency storm response.
Fortunately, the proposed repairs for the identified segments can utilize a design detail
developed for the previous wall failures that occurred, allowing the City to expedite design
and construction.
On September 4th, the City Manager approved staff’s recommendation to proceed with
the work on the above identified portions of Old Garden Creek under the emergency
authority outlined in Municipal Code Section 3.24.060. This will allow for expedited design
and construction, provided Council appropriates the funding recommended via this staff
report and resolution. Staff anticipate construction could begin in September and be
completed within approximately six to eight weeks, subject to contractor availability and
site conditions.
The estimated cost of the repairs is approximately $1.1 million. Staff recommends
utilizing available CIP Reserve funds in the Storm Response and Recovery Account
(Project #2001071) to fund the emergency repairs. Current forecasts indicate an
increased likelihood of above-normal precipitation in California during the 2026–27 winter
associated with the developing El Niño pattern. Increased rainfall, particularly during
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Item 6g
periods of heavier storms, can result in greater runoff and elevated flows and velocities
in local creeks and drainage channels, which could further stress the already
compromised channel walls and increase the potential for wall failure, channel
obstruction, and impacts to adjacent properties and infrastructure. Use of these funds
would allow the City to address the identified structural deficiencies before the upcoming
storm season and reduce the potential for more extensive damage and associated costs
resulting from a wall failure during a major storm event.
Background – State Grant
In May 2026, City staff provided Assemblymember Addis’ office with a list of storm
preparation projects that could benefit from State funding in advance of the upcoming El
Niño season. The projects submitted by the City included storm drain infrastructure
repairs and creek channel maintenance projects totaling approximately $1.34 million.
On September 1, 2026, Assemblymember Addis’ office provided City staff with the draft
funding language proposed to be included in the State Budget Act of 2026. The draft
legislation appropriates $17.945 million to the State Water Resources Control Board for
local assistance and specifically allocates $1.34 million to the City of San Luis Obispo
for infrastructure upgrades and repairs.
Public Works & Utilities staff have been informed that the City can expect to receive this
funding, with additional information regarding the grant agreement, eligible expenditures,
and implementation requirements forthcoming.
The State funding provides an opportunity to offset local costs associated with the City's
storm preparation and infrastructure repair efforts. Staff anticipate that the grant funds
can be applied toward eligible storm-related projects identified through the City's ongoing
evaluation of priority infrastructure needs.
Because the draft grant agreement and funding requirements have not yet been received,
staff are currently utilizing available Storm Drain Replacement funds (Project #2090742)
to advance the highest-priority work at this time. Once the State funding is formally
awarded and available, staff will evaluate eligible expenditures and recommend the
appropriate use of budget funds consistent with the grant requirements, with an eye
toward replacement of prior budgeted local funding with state grant funding, if that
flexibility is allowed by the terms of the grant agreement.
In the event the priority projects exceed existing budgets, including any future state grant
funds, staff recommend that the City Manager be delegated authority to transfer up to
$500,000 in additional funding from Completed Projects. This would be utilized as
contingency to address any unforeseen costs and could be utilized to support the above
emergency project on Old Garden Creek or previously planning priority infrastructure
upgrades for storm preparedness.
Previous Council or Advisory Body Action
On June 17, 2026, Council adopted the 2025-27 Financial Plan, which included CIP
funding for Storm Drain Replacements and Storm Response and Recovery.
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Item 6g
Public Engagement
The public will have an opportunity to comment on this item before or after the meeting.
Public impacts related to projects funded by the budget appropriations recommended by
this report will be communicated directly to affected property owners and neighborhoods
via Public Works staff through door-to-door communication, door hangers, or mailers as
necessary to reach to residents expected to be impacted by the work.
CONCURRENCE
City Administration and the Public Works & Utilities Department concur with the
recommendations of this report.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act does not apply to the funding and appropriation
requests of this report because the actions do not constitute a “Project” under CEQA
Guidelines Section 15378.
The infrastructure maintenance and repair projects planned for emergency preparedness,
funded by the newly appropriated funding, would qualify for an Exemption to the California
Environmental Quality Act pursuant to State CEQA Guidelines Sections 15301 (Existing
Facilities) because the projects consist of the repair and maintenance of storm drainage,
culverts, drainage channels, creeks, and roadways. A Notice of Exemption will be filed
through the Community Development Department upon prior to construction of each
project.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2026-27
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund:
Completed
Projects
$500,000 $500,000 $0 $
General Fund
Storm Drains
$931,172 $931,172 $0
General Fund
CIP Reserve
$2,212,229 $1,100,000 $1,112,229
State $1,340,000 $1,340,000 $0
Federal
Fees
Total $4,983,401 $3,871,172 $1,112,229 $
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Item 6g
The CIP Reserve has a current balance of $2,212,229. Following appropriation of $1.1
Million in reserve funds to the Storm Response and Recovery Account, the CIP Reserve
will have a balance of $1,112,229. The Storm Response and Recovery Account
(#2001071) currently does not have any existing funding identified for new emergency
projects, and appropriation of CIP Reserve funds would create a new subproject for
emergency repairs to the Old Garden Creek channel.
The Storm Drains account (#2090742) currently has an available balance of $931,172.
Following appropriation of the state grant, the project will have an available balance of
$2,271,172. This total amount is currently expected to be sufficient to address pre -
planned Storm Drain maintenance work, as wells as newly emergent storm preparedness
projects, including creek embankment repair at Almond/Center Streets, and a culvert
repair at Patricia Drive.
It should be noted that the expected project costs are based upon the best available
estimates from similar work, no bids or costs from contractors have yet been received.
Should the above account totals be insufficient to address unforeseen conditions during
execution of construction projects, or the grant award come with matching requirements,
$442,881 is currently available in Completed Projects (inclusive of both General Capital
Outlay and Local Revenue Measure funds) to support these additional cost increases.
That amount will exceed $500,000 following close out of the Mission Plaza
Enhancements project, which is expected in the Fall.
ALTERNATIVES
1. Do not appropriate CIP Reserve Funds or a reduced amount of CIP Reserve.
This would delay the emergency project, increasing risks to the public and private
property, and potentially result in increased project costs related to delaying the City's
ability to address the identified need. This would likely require the City to identify
additional local funding to proceed, potentially impacting other previously planned and
budgeted capital projects.
2. Do not appropriate the grant funds (if awarded). Declining the grant would result
in the loss of outside funding that could otherwise be used to advance previously
identified projects, limiting the City’s ability to quickly address preplanned projects and
emergent infrastructure needs as the winter season approaches.
ATTACHMENTS
A - Draft Resolution Appropriating Funds for Storm Preparedness Infrastructure
Upgrades and Repairs
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R ______
RESOLUTION NO. _____ (2026 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AUTHORIZING APPROPRIATION OF
$1,100,000 FROM THE CAPITAL PROJECTS RESERVE FUND, AS
WELL AS STATE WATER RESOURCE CONTROL BOARD GRANT
FUNDING, TO SUPPORT STORM PREPAREDNESS
INFRASTRUCTURE UPGRADES AND REPAIRS
WHEREAS, the City of San Luis Obispo maintains storm drainage infrastructure,
creek channels, culverts, and related facilities that are subject to damage and
deterioration over time, and as a result are subject to failure during significant storm
events; and
WHEREAS, recent inspections identified deteriorated and unstable storm
infrastructure conditions that could pose risks to public and private property during a
significant storm event and require emergency repairs prior to the upcoming storm
season; and,
WHEREAS, the City has identified additional priority storm preparedness
infrastructure upgrades and repairs that would improve the City's ability to prepare for and
mitigate risk from future storm events; and,
WHEREAS, the City's Fund Balance and Reserve Policy provides for the use of
the Capital Projects Reserve Fund for urgent and unanticipated infrastructure
maintenance and projects; and,
WHEREAS, the City anticipates receiving approximately $1,340,000 in State
Water Resources Control Board grant funding for storm preparedness infrastructure
upgrades and repairs, subject to final grant award, agreement, and eligibility
requirements; and
WHEREAS, appropriation of the anticipated State grant funding will allow the City
to leverage outside funding to advance eligible storm preparedness projects and address
priority infrastructure needs
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. The City Council authorizes the appropriation of $1,100 ,000 from the
Capital Projects Reserve Fund to the Storm Response and Recover Project Account.
SECTION 2. Upon receipt of the State Water Resources Control Board grant
award, the associated grant funds, currently anticipated to be approximately $1,340,000,
are hereby authorized for appropriation to the appropriate project account(s) to support
eligible storm preparedness infrastructure upgrades and repairs in accordance with the
terms and conditions of the grant agreement.
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Resolution No. _____ (202X Series) Page 2
R ______
SECTION 3. The City Council authorizes the City Manager to execute state grant
agreements for any grants referred to in Section 2 for storm preparedness projects.
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.
___________________________
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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