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HomeMy WebLinkAbout11-19-2019 Council Agenda PacketTuesday, November 19, 2019 5:30 PM CLOSED SESSION Council Hearing Room 990 Palm Street San Luis Obispo Page 1 CALL TO ORDER: Mayor Heidi Harmon ROLL CALL: Council Members Carlyn Christianson, Aaron Gomez, Erica A. Stewart, Vice Mayor Andy Pease and Mayor Heidi Harmon PUBLIC COMMENT ON CLOSED SESSION ITEMS CLOSED SESSION A.CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION Paragraph (1) of subdivision (d) of Government Code § 54956.9; Name of case: Donald Clyde Baer, an incompetent person by and through his Guardian ad Litem Jennifer L. Baer - Riedhart, and Carolyn Baer, an incompetent person by and through her Guardian ad Litem Jennifer L. Baer-Riedhart, v. City of San Luis Obispo; Carolyn Margaret Fergoda; and Does 1 through 100; San Luis Obispo Superior Court Case No. 18CV-0471. Adjourn to the Regular City Council Meeting scheduled for Tuesday, November 19, 2019 at 6:00 p.m., in the Council Chamber, 990 Palm Street, San Luis Obispo. Page intentionally left blank. Tuesday, November 19, 2019 6:00 PM REGULAR MEETING Council Chambers 990 Palm Street San Luis Obispo Page 2 CALL TO ORDER: Mayor Heidi Harmon ROLL CALL: Council Members Carlyn Christianson, Aaron Gomez, Erica A. Stewart, Vice Mayor Andy Pease and Mayor Heidi Harmon PLEDGE OF ALLEGIANCE: Council Member Carlyn Christianson PRESENTATIONS 1.INTRODUCTION OF ADMINISTRATIVE ANALYST FOR UTILITIES - KELLY MATTOS (FLOYD – 5 MINUTES) APPOINTMENTS 2.APPOINTMENT TO THE ACTIVE TRANSPORTATION COMMITTEE (PURRINGTON / CHRISTIAN – 5 MINUTES) Recommendation: In accordance with the recommendation of the Council Liaison Subcommittee, confirm the appointment of Donette Dunaway to the Active Transportation Committee (ATC) to complete an unexpired term through March 31, 2022. PUBLIC COMMENT PERIOD FOR ITEMS NOT ON THE AGENDA (Not to exceed 15 minutes total) The Council welcomes your input. You may address the Council by completing a speaker slip and giving it to the City Clerk prior to the meeting. At this time, you may address the Council on items that are not on the agenda. Time limit is three minutes. State law does not allow the Council to discuss or take action on issues not on the agenda, except that members of the Council or staff may briefly respond to statements made or questions posed by persons exercising their public testimony rights (Gov. Code sec. 54954.2). Staff may be asked to follow up on such items. San Luis Obispo City Council Agenda November 19, 2019 Page 3 CONSENT AGENDA Matters appearing on the Consent Calendar are expected to be non-controversial and will be acted upon at one time. A member of the public may request the Council to pull an item for discussion. Pulled items shall be heard at the close of the Consent Agenda unless a majority of the Council chooses another time. The public may comment on any and all items on the Consent Agenda within the three-minute time limit. 3.WAIVE READING IN FULL OF ALL RESOLUTIONS AND ORDINANCES (PURRINGTON) Recommendation: Waive reading of all resolutions and ordinances as appropriate. 4.DRAFT MINUTES REVIEW - NOVEMBER 12, 2019 CITY COUNCIL MEETING (PURRINGTON) Recommendation: Approve the minutes of the City Council meeting held on November 12, 2019. 5.CONSIDERATION OF THE HUMAN RELATIONS COMMISSION’S RECOMMENDED PRIORITIES FOR THE 2020-21 COMMUNITY DEVELOPMENT BLOCK GRANT AND GRANTS-IN-AID PROGRAMS (CODRON / VERESCHAGIN) Recommendation: Approve the Community Development Block Grant and Grants-in-Aid funding priorities for the 2020-21 funding year, as recommended by the Human Relations Commission. 6.2019-20 FIRST QUARTER FINANCIAL REPORT (ELKE / HARNETT) Recommendation: Receive an update on the status of the current financial position, Major City Goals, and CIP projects for the first quarter of Fiscal Year 2019-20. The City’s Financial Reporting and Budget Administration policy for interim reporting requires that staff prepare and issue a formal quarterly report to the Council. San Luis Obispo City Council Agenda November 19, 2019 Page 4 7.AMENDMENT #2 TO THE CURRENT AGREEMENT FOR JOINT CONSTRUCTION AND FINANCING COSTS FOR AN ANIMAL SERVICES FACILITY (HERMANN / BETZ) Recommendation: Authorize the City Manager to approve Amendment #2 to the Agreement for Allocation of Construction and Financing Costs for an Animal Services Shelter. 8.HIGUERA STREET SIDEWALK REPAIR, SPECIFICATION NO. 91320 (STANWYCK / MCGUIRE) Recommendation: 1.Approve construction documents for “Higuera Street Sidewalk Repair, Specification No. 91320”; and 2.Authorize Staff to advertise for bids and authorize the City Manager to award the construction contract, if the lowest responsible bid is within the Engineer’s estimate of $295,000. 9.MARSH STREET BRIDGE REPLACEMENT EASEMENTS, SPECIFICATION NO. 90480 (STANWYCK / MCGUIRE) Recommendation: 1.Authorize the City Manager to execute an extension agreement with 1042 Pacific Street, a California General Partnership, for a temporary construction easement at 1042 Pacific St.; and 2.Authorize the City Manager to execute an extension agreement with Charles Zanoli, Surviving Trustee, for a temporary construction easement at 1043 Marsh St.; and 3.Authorize the City Manager to execute an extension agreement with the Maino Family Trusts for temporary construction easements at 1020 & 1080 Marsh St. 10.INTEGRATED REGIONAL WATER MANAGEMENT (IRWM) GRANT FUNDING FOR THE WATER RESOURCE RECOVERY FACILITY (FLOYD / HIX / THOMPSON) Recommendation: Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, accepting a grant from the San Luis Obispo County Flood Control and Water Conservation District” in the amount of $1,314,530 for the construction of the Membrane Bioreactor and Ultraviolet Disinfection processes for the Water Resource Recovery Facility project. San Luis Obispo City Council Agenda November 19, 2019 Page 5 11. AUTHORIZE 2019 AIR POLLUTION CONTROL DISTRICT GRANT APPLICATION TO SUPPORT PROCUREMENT OF INFRASTRUCTURE NEEDED TO TRANSITION TO ZERO EMISSION TRANSIT VEHICLES (STANWYCK / ANGUIANO / READ) Recommendation: 1. Authorize the Public Works Director, or their designee, to execute and file grant applications with the Air Pollution Control District (APCD) for transit projects and to execute any related grant applications, certifications, assurances, forms, agreements, and associated documents on behalf of the City; and 2. Approve a Transit Budget Amendment to increase the budget reflecting these grant funds, if awarded. 12. COUNCIL CHAMBER AUDIO/VIDEO REPLACEMENT PROJECT, SPECIFICATION NO. 100120 (HERMANN / PURRINGTON) Recommendation: Increase the amount the City Manager is authorized to award from $200,000 to $230,000 for a contract if the lowest responsible bid is within the approved project budget of $230,000 from the City’s Share of the Public, Educational, and Government (PEG) funds. PUBLIC HEARING AND BUSINESS ITEMS 13. REVIEW OF THE PROPOSED ANNEXATION OF APPROXIMATELY 39 ACRES OF PROPERTY (30 PARCELS) ALONG FIERO LANE AND CLARION COURT AND ASSOCIATED INFRASTRUCTURE IMPROVEMENTS, INCLUDING APPROVAL OF THE SECOND AMENDMENT TO THE MEMORANDUM OF AGREEMENT REGARDING THE PROPOSED ANNEXATION, AND ADOPTION OF AN INITIAL STUDY/MITIGATED NEGATIVE DECLARATION TIERED FROM THE FINAL PROGRAM ENVIRONMENTAL IMPACT REPORT FOR THE AIRPORT AREA AND MARGARITA AREA SPECIFIC PLANS AND RELATED FACILITIES MASTER PLANS (SCH#2000051062) (PL-ANNX-1166-2015; EID-0626- 2019) (CODRON / SCOTT – 60 MINUTES) Recommendation: As recommended by the Planning Commission, adopt a Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California, approving application for the Annexation of the Fiero Lane and Clarion Court Properties (Fiero Lane Water Company, FLWC) to the City of San Luis Obispo and the associated second amendment to the Memorandum of Agreement, with Adoption of an Initial Study/Mitigated Negative Declaration (Multiple Properties, 850 Fiero Lane, Primary; PL-ANNX-1166-2015, EID- 0626-2019)” to: San Luis Obispo City Council Agenda November 19, 2019 Page 6 1. Approve and authorize the Mayor to execute the Second Amendment to the Memorandum of Agreement for the Annexation of the Fiero Lane/Clarion Court area, which incorporates conditions of annexation as recommended by the Planning Commission; and 2. Approve the filing of an application and request for San Luis Obispo Local Agency Formation Commission (LAFCo) to initiate proceedings for annexation of the Fiero Lane-Clarion Court area; and 3. Direct the Community Development Director to process the application; and 4. Authorize the City Manager to execute any documents in a form approved by the City Attorney related to the annexation of the subject lands to the City of San Luis Obispo; and 5. Authorize the City Manager to initiate tax negotiations with the County of San Luis Obispo; and 6. Adopt the associated Initial Study / Mitigated Negative Declaration for the annexation, which tiers off the certified Final Environmental Impact Report for the Airport Area and Margarita Area Specific Plans and Related Facilities Master Plans (SCH# 2000051062). 14. WATER ENERGY EFFICIENCY PROJECT (FLOYD / BOERMAN / MEEKS – 45 MINUTES) Recommendation: 1. Receive the Water Energy Efficiency Project Investment Grade Audit. 2. Authorize the City Manager to execute a Work Order, upon approval of the City Attorney as to form, to enter into agreement with PG&E for implementation of the Water Energy Efficiency Project (Project) at a not to exceed cost of $13,999,644. 3. Approve Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California, authorizing use of Water Fund unreserved working capital for the Water Energy Efficiency Project” to provide adequate cash flow when considered necessary for Project implementation and authorize the Finance Director to execute any and all certificates, contracts, and other documents necessary to secure project financing. 4. Authorize the City Manager to execute a no-cost, 50-year ground lease with Cal Poly for 0.5 acres adjacent to the City’s Water Treatment Plant on Stenner Creek Road. LIAISON REPORTS AND COMMUNICATIONS (Not to exceed 15 minutes) Council Members report on conferences or other City activities. At this time, any Council Member or the City Manager may ask a question for clarification, make an announcement, or report briefly on his or her activities. In addition, subject to Council Policies and Procedures, they may provide a reference to staff or other resources for factual information, request staff to report back to the Council at a subsequent meeting concerning any matter, or take action to direct staff to place a matter of business on a future agenda. (Gov. Code Sec. 54954.2) San Luis Obispo City Council Agenda November 19, 2019 Page 7 ADJOURNMENT The next Regular City Council Meeting is scheduled for Tuesday, December 3, 2019 at 5:00 p.m. and 6:00 p.m., respectively, in the Council Hearing Room and Council Chamber, 990 Palm Street, San Luis Obispo, California. LISTENING ASSISTIVE DEVICES are available for the hearing impaired--please see City Clerk. The City of San Luis Obispo wishes to make all of its public meetings accessible to the public. Upon request, this agenda will be made available in appropriate alternative formats to persons with disabilities. Any person with a disability who requires a modification or accommodation in order to participate in a meeting should direct such request to the City Clerk’s Office at (805) 781-7100 at least 48 hours before the meeting, if possible. Telecommunications Device for the Deaf (805) 781-7140. City Council regular meetings are televised live on Charter Channel 20. Agenda related writings or documents provided to the City Council are available for public inspection in the City Clerk’s Office located at 990 Palm Street, San Luis Obispo, California d uring normal business hours, and on the City’s website www.slocity.org. Persons with questions concerning any agenda item may call the City Clerk’s Office at (805) 781-7100. Department Name: Administration Cost Center: 1021 For Agenda of: November 5, 2019 Placement: Consent Estimated Time: N/A FROM: Greg Hermann, Deputy City Manager Prepared By: Kevin Christian, Deputy City Clerk SUBJECT: APPOINTMENT TO THE ACTIVE TRANSPORTATION COMMITTEE RECOMMENDATION In accordance with the recommendation of the Council Liaison Subcommittee, confirm the appointment of Donette Dunaway to the Active Transportation Committee (ATC) to complete an unexpired term through March 31, 2022. DISCUSSION Active Transportation Committee (Subcommittee Members Harmon and Gomez) Due to the resignation of Ken Kienow, effective October 6, 2019, there was an unscheduled vacancy on the Active Transportation Committee. Mr. Kienow’s term would have expired on March 31, 2022. The Council Liaison Subcommittee recommends appointment from the ATC qualified candidate list of Donette Dunaway to the Active Transportation Committee, effective November 21, 2019, to a term expiring on March 31, 2022. Background The City Clerk’s office conducted an annual open recruitment for scheduled and unscheduled Advisory Body positions between November 15, 2018 and January 18, 2019. Council Liaison Subcommittees conducted interviews during the months of February and March of 2019. At that time, all interviewed candidates were ranked for possible appointment to the Advisory Body positions for which they applied. Qualified candidates that were not appointed at that time were added to a list for possible appointment in the event of an unscheduled vacancy. When unscheduled vacancies occur outside the annual recruitment period, Council Liaison Subcommittee members are given the option to appoint from this list. Policy Context The Advisory Body Handbook, last adopted by the City Council in February 2018, outlines the recruitment procedures, membership requirements and terms. Also contained in the Advisory Body Handbook are the bylaws for all advisory bodies. Recruitment was performed in conformance with recruitment procedures and bylaws. Packet Page 1 Public Engagement During the past annual recruitment period, November 15, 2018 through January 18, 2019, notices that the City was accepting applications for 15 Advisory Bodies were placed in The New Times, The Tribune, on the City’s website and social media outlets, and sent to households as utility bill inserts. In accordance with the Maddy Act (California Government Code 54974), a Notice of Recruitment for this Unscheduled Vacancy was posted on the bulletin board outside City Hall, 990 Palm Street, San Luis Obispo, California, and on the City’s website on October 9, 2019. CONCURRENCE The Council Liaison Subcommittee concurs with the recommendation. ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15278. FISCAL IMPACT There are no fiscal impacts associated with appointment to the Active Transportation Committee. ALTERNATIVES Council could recommend further recruitment for this position. This option is not recommended as the ATC is currently creating the City’s first Active Transportation Plan (combination of an update of the Bicycle Transportation Plan and creation of a Pedestrian Plan) which requires significant time investment by the committee members. COUNCIL READING FILES A copy of Ms. Dunaway’s Advisory Body application is available for public review in the City Clerk’s office. Packet Page 2 San Luis Obispo Page 1 Tuesday, November 12, 2019 Continued Regular Meeting of the City Council CALL TO ORDER A Continued Regular Meeting of the San Luis Obispo City Council was called to order on Tuesday, November 12, 2019 at time 6:30 p.m. in the Council Chamber, located at 990 Palm Street, San Luis Obispo, California, by Mayor Harmon. ROLL CALL Council Members Present: Council Members Carlyn Christianson, Aaron Gomez, Erica A. Stewart, Vice Mayor Andy Pease, and Mayor Heidi Harmon. Absent: None City Staff Present: Derek Johnson, City Manager; Christine Dietrick, City Attorney; and Teresa Purrington, City Clerk; were present at Roll Call. Other staff members presented reports or responded to questions as indicated in the minutes. PLEDGE OF ALLEGIANCE Council Member Stewart led the Pledge of Allegiance. PROCLAMATIONS 1. NATIONAL HOSPICE AND PALLIATIVE CARE MONTH Mayor Harmon presented a Proclamation to Kris Kington-Baker, Executive Director of Hospice SLO County, declaring November to be “National Hospice and Palliative Care Month.” Item 4 Packet Page 3 San Luis Obispo City Council Minutes of November 12, 2019 Page 2 PUBLIC COMMENT ON ITEMS NOT ON THE AGENDA Marisa Balmana Jeffery Specht Dave Hannings Terry Mohan Don Hedrick ---End of Public Comment--- CONSENT AGENDA ACTION: MOTION BY COUNCIL MEMBER CHRISTIANSON, SECOND BY VICE MAYOR PEASE, CARRIED 5-0 to approve Consent Calendar Items 2 thru 9. Public Comment Item 5 – Jeffery Specht 2. WAIVE READING IN FULL OF ALL RESOLUTIONS AND ORDINANCES CARRIED 5-0, to waive reading of all resolutions and ordinances as appropriate. 3. DRAFT MINUTES REVIEW - OCTOBER 22, 2019 CITY COUNCIL MEETING CARRIED 5-0, to approve the minutes of the City Council meeting held on October 22, 2019. 4. AN ORDINANCE TO ADOPT BY REFERENCE THE 2019 CALIFORNIA BUILDING AND FIRE CODES WITH LOCAL AMENDMENTS CARRIED 5-0, to adopt Ordinance No. 1670 (2019 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, amending Title 15 of the Municipal Code to adopt by reference and amend the latest editions of the California Building Standards Codes and adopting findings of fact to support the amendments.” 5. POLICE EVIDENCE ACCOUNT CARRIED 5-0, to: 1. Authorize the transfer of funds from Fund 701 General Agency Fund – Police (for Evidence funds) in the amount of $139,258 to General Fund balance; and 2. Authorize the Finance Director to return claimed funds that have been validated by the Police Department, up to $7,500 to claimant from the Evidence Fund account; and 3. Authorize the City Manager to approve the close out of the Evidence Fund account annually, at the end of each fiscal year, and appropriate funds accordingly; and 4. Adopt Resolution No 11057 (2019 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, authorizing the transfer of funds from Fund 701 General Agency Fund – Police Evidence Funds, to General Fund Balance.” Item 4 Packet Page 4 San Luis Obispo City Council Minutes of November 12, 2019 Page 3 6. PARKS AND RECREATION OFFICE REHABILITATION PROJECT, SPECIFICATION NO. 91562 CARRIED 5-0, to approve the Project Plans and Special Provisions for the Parks and Recreation Office Rehabilitation Project, Specification 91562, authorize staff to advertise for bids and authorize the City Manager to award the construction contract for the Bid Total if the lowest responsible bid is within the Engineer’s Estimate $340,000. 7. ISLAY HILL PARK PLAYGROUND RENOVATION, SPECIFICATION NO. 91654 CARRIED 5-0, to: 1. As recommended by the Parks and Recreation Commission, approve the Project Plans and Special Provisions for the Islay Hill Park Playground Renovation Project, Specificati on Number 91654; and 2. Authorize staff to advertise for bids and authorize the City Manager to award the construction contract if the lowest responsible bid is within the publicly disclosed Funding Amount of $300,000; and 3. Approve a City Sole Source purchase from GameTime Equipment in an amount not to exceed $150,000 for purchase of playground equipment and authorize Finance Director to execute Purchase Order upon receipt of final quote. 8. SCHEDULE OF CITY COUNCIL MEETINGS FOR 2020 CARRIED 5-0, to: Adopt the proposed 2020 Regular City Council meeting schedule with meetings normally held the first and third Tuesday of every month, with the following exceptions: 1. Reschedule the Regular City Council meeting of January 7 to January 14, 2020, 2. Reschedule the Regular City Council Meeting of November 3 to November 10, 2020, 3. Cancel the Regular City Council meetings of August 4 and December 15, 2020. 9. AMENDMENT TO LEGAL SERVICES AGREEMENT FOR CONTRACT DEPUTY CITY ATTORNEY SERVICES CARRIED 5-0, to adopt Resolution No. 11058 (2019 Series) entitled, “A Resolution of the City of San Luis Obispo, California, approving an amendment to the Legal Services Contract with Hanley and Fleishman, LLP, and Related Budgetary Appropriations” authorizing the City Attorney to execute a Third Amendment to the Legal Services Agreement. Item 4 Packet Page 5 San Luis Obispo City Council Minutes of November 12, 2019 Page 4 PUBLIC HEARING ITEMS AND BUSINESS ITEMS 10. PUBLIC HEARING TO INTRODUCE AN ORDINANCE TO REZONE PROPERTIES AT 609 & 633 PALM, 610, 614 & 630 MONTEREY, 970 & 972 NIPOMO STREETS, AND REVIEW OF A NEW PERFORMING ARTS FACILITY AND A NEW PARKING STRUCTURE WITHIN THE DOWNTOWN COMMERCIAL ZONE (CODRON / STANWYCK /COHEN / BURDE – 90 MINUTES) Vice Mayor Pease recused herself as her business is located within 500 feet of the proposed project. Vice Mayor Pease left the dais at 7:18 PM. RECESS Council recessed at 7:22 p.m. and reconvened at 7:26 p.m., with Council Members Christianson, Gomez, and Stewart and Mayor Harmon present. Council Member Gomez recused himself as his business is located within 500 feet of the proposed project. Council Member Gomez left the dais at 7:26 PM. Community Development Director Michael Codron and Associate Planner Rachel Cohen, Tim Bochum, Deputy Director Public Works, Debbie Lagomarcino Rudd - RRM design group, Pierre Rademaker – Rademaker Design, Michelle Wendler – Watry Design (Architect), Bryce Engstrom – Architect (SLO Rep,) Kevin Harris – Managing Artistic Director (SLO Rep,) provided an in-depth staff report and responded to Council questions. Public Comments: Ellie Washington Jeffery Specht Patty Thayer Jeff Olds Mary Ellen Gibson Ursula Bishop Penny Della Pelle Ann Robinson Charley Beck Bettina Swigger Evan Reed Dave Hannings Wendy George James Papp Barry Rands Molly Kern Mary Mitchell John Dunn Don Hedrick John Ashbaugh Joan Roach Sandra Marshall ---End of Public Comment--- Item 4 Packet Page 6 San Luis Obispo City Council Minutes of November 12, 2019 Page 5 RECESS Council recessed at 9:11 p.m. and reconvened at 9:21 p.m., with Council Members Christianson and Stewart and Mayor Harmon present. ACTION: MOTION BY COUNCIL MEMBER CHRISTIANSON, SECOND BY COUNCIL MEMBER STEWART, CARRIED 3-0-2 (COUNCIL MEMBER GOMEZ AND VICE MAYOR PEASE RECUSED) to: 1. Introduce Ordinance No. 1671 (2019 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, rezoning properties at 609 & 633 Palm, 610, 614 & 630 Monterey, 970 & 972 Nipomo Streets from Office with a Historic District Overlay (O-H) and Medium-High Density Residential (R-3) to Downtown Commercial Zone with a Historic Overlay (C-D-H) consistent with the Palm Nipomo Parking Structure Project with an addendum to the Certified Environmental Impact Report as represented in the Council Agenda Report and attachments dated November 5, 2019 (RZ-0460-2019).” 2. Adopt Resolution No. 11059 (2019 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving the Architectural Design of a new Performing Arts Facility (SLO Rep Theatre) and a new Parking Structure, a deviation in the height and floor area ratio for the parking structure, Use Permits to allow the SLO Rep Theatre and a Parking Structure within the Downtown Commercial Zone, and adopt a General Plan Amendment changing the project site from Office and Medium-High Density Residential to General Retail with an addendum to the Certified Environmental Impact Report as represented in the City Council Agenda Report and attachments dated November 5, 2019 (609 & 633 Palm, 610, 614 & 630 Monterey, 970 & 972 Nipomo Streets; ARCH-0415-2019, USE-0416-2019, ARCH-0448-2019, USE-0388-2017 & GENP-0389-2017).” With the following added direction: • Immediately begin the process of advertising for a private partner to relocate the Heyd adobe. • Authorize the City Manager to use his purchasing authority to incentivize a public/private partnership for the relocation of the Heyd adobe. Council Member Gomez and Vice Mayor Pease rejoined the meeting at 10:04 p.m. Item 4 Packet Page 7 San Luis Obispo City Council Minutes of November 12, 2019 Page 6 11. ANNUAL PUBLIC HEARING FOR THE TOURISM BUSINESS IMPROVEMENT DISTRICT Deputy City Manager Greg Hermann, Tourism Manager Molly Cano and TBID Chair Bruce Skidmore provided an in-depth staff report and responded to Council questions. Public Comments: None ---End of Public Comment--- ACTION: MOTION BY COUNCIL MEMBER CHRISTIANSON, SECOND BY VICE MAYOR PEASE, CARRIED 5-0 to: 1. Receive testimony regarding the City Council’s intention to continue the San Luis Obispo Tourism Business Improvement District and determine whether a legally sufficient protest is made; and 2. Adopt a Resolution No. 11060 (2019 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, declaring the basis for and the levy of the assessment for the San Luis Obispo Tourism Business Improvement District and affirming the establishment of the District.” COUNCIL COMMUNICATIONS AND LIAISON REPORTS Mayor Harmon attended the quarterly Advisory Body Meeting, visited Gopher Glen carbon sequestering project with Bob Hill Sustainability and Natural Resources Official, attended the WRRF groundbreaking, Central Coast Economic Forecast and the League of Women voters event celebrating Women’s Right to Vote. Gomez attended a Zero Waste conference in Vancouver on behalf of the City. Vice Mayor Pease participated in a panel discussion hosted by two of the of Downtown SLO’s committees to discuss groundwater process. Item 4 Packet Page 8 San Luis Obispo City Council Minutes of November 12, 2019 Page 7 ADJOURNMENT The meeting was adjourned at 10:18 p.m. The next Regular City Council Meeting is scheduled for Tuesday, November 19, 2019 at 5:00 p.m. and 6:00 p.m., in the Council Chamber, 990 Palm Street, San Luis Obispo, California. __________________________ Teresa Purrington City Clerk APPROVED BY COUNCIL: XX/XX/2019 Item 4 Packet Page 9 Page intentionally left blank. Item 4 Packet Page 10 Department Name: Community Development Cost Center: 4007 For Agenda of: November 19, 2019 Placement: Consent Estimated Time: N/A FROM: Michael Codron, Community Development Director Prepared By: Cara Vereschagin, Housing Coordinator SUBJECT: CONSIDERATION OF THE HUMAN RELATIONS COMMISSION’S RECOMMENDED PRIORITIES FOR THE 2020-21 COMMUNITY DEVELOPMENT BLOCK GRANT AND GRANTS-IN-AID PROGRAMS RECOMMENDATION Approve the Community Development Block Grant and Grants-in-Aid funding priorities for the 2020-21 funding year, as recommended by the Human Relations Commission. DISCUSSION The City’s annual Community Development Block Grant (CDBG) and Grants-in-Aid (GIA) review method provides the City Council and the public with opportunities to provide early input in the grant award process. Establishing funding priorities is the second step in the four-step procedure, which helps to ensure an open, inclusive, and fair grant application process. The Human Relations Commission (HRC) is the advisory body to the City Council on funding priorities and recommendations for both grant programs. CDBG and GIA Program Overview The CDBG program is a federal program administered by the U.S. Department of Housing and Urban Development (HUD). The County of San Luis Obispo manages this grant and the final funding decisions must be approved by the Board of Supervisors in the County’s annual Action Plan. The funding is non-competitive, however projects that are recommended for funding must directly or indirectly benefit low-income persons. The City’s GIA program serves to provide financial support to non-profit organizations that promote the economic and social well-being of the citizens of San Luis Obispo. Programs requesting funding must be tied explicitly to at least one funding priority and must be compliant with the HRC’s Statement of Purpose and Bylaws. CDBG and GIA Project Decision Process The four steps in the review process for both grant programs are as follows: 1. HRC “Community Needs Workshop”: The HRC hosted a public hearing on October 2, 2019 to inform the public about the upcoming CDBG and GIA funding cycles, how to apply for grants, to hear community views on grant funding needs, and to develop funding priorities. In addition, an Open City Hall online forum was available to those not able to attend the workshop. Responses were incorporated into the development of funding priorities for both grant programs. Minutes from this meeting can be found in Attachment A. Item 5 Packet Page 11 2. Council Priority Setting: Council sets CDBG and GIA funding priorities which is scheduled for November 19, 2019. 3. HRC Funding Recommendations Hearings: HRC will hold two separate public hearings to finalize funding recommendations for both CDBG and GIA programs. The hearing for the CDBG program is scheduled for December 4, 2019. The hearing for the GIA program is scheduled for May 6, 2020. 4. Council Approval of Final Recommendations: City Council will review and approve final funding recommendations for both CDBG and GIA programs. The Council will hold a public hearing for CDBG funding decisions, which is tentatively scheduled for March 3, 2020. Final funding allocations for the GIA program is tentatively scheduled for City Council review in July 2020. HRC Recommended CDBG and GIA Funding Priorities for Program Year 2020-21 After hearing and reviewing public testimony, the Human Relations Commission reviewed the previously adopted 2019 CDBG and GIA funding priorities and decided to uphold those priorities for this grant cycle. The HRC’s recommended funding priorities for CDBG are ranked; whereas the recommendation for GIA include one main area of importance with other remaining, non-ranked objectives, indicated as follows: Community Development Block Grant (ranked): 1. Provide emergency and transitional shelter, homelessness prevention and services. 2. Develop and enhance affordable housing for low and very-low income persons. 3. Promote accessibility and/or removal of architectural barriers for the disabled and elderly. 4. Enhance economic development (to include seismic retrofit, economic stability, low- and moderate-income jobs). Grants-in-Aid: Main Priority: Homeless prevention, including affordable and alternative housing, supportive services and transitional housing Other Priorities: • Hunger and malnutrition prevention • Supportive physical and mental health services for those in need • Services for seniors and/or people with disabilities in need • Supportive and developmental services for children and youth in need Item 5 Packet Page 12 Diversity and Inclusion General Fund Allocation Additionally, The HRC also attempted to collect public feedback on how to prioritize and distribute the $20,000 allocated for diversity and inclusion efforts at the Community Needs Workshop but was unsuccessful in that no public comment was collected. Since the public hearing, City staff and the HRC ad-hoc diversity and inclusion subcommittee have been meeting with community stakeholders to learn about the present community needs, to ultimately develop next steps to distribute this funding. Once staff and the ad-hoc committee have narrowed the scope of community needs, it is anticipated that the ad-hoc committee with make a recommendation to the HRC on how to distribute the funding, whether it be a grant process for members of the public, or the identification of programs or events to be funded. Upon final consensus, the HRC will make a recommendation on how to distribute the allocation to the City Council for consideration. Next Steps The next step in the CDBG and GIA program cycles is for the Council to consider th e HRC’s recommendations and to affirm or revise the City’s funding priorities. This step is important because these priorities will guide the HRC’s actions during grant application review. These priorities will also guide Council’s final funding decisions, when they consider CDBG funding recommendations in March 2020 and GIA funding recommendations in July 2020. Policy Context Task 15 in the Ongoing Housing Production Programs section in the 2019-21 Housing Major City Goal states that CDBG and GIA grant funding should be prioritized for housing production available for lower income households. The City’s Housing Element also indicates several programs throughout the document to help facilitate affordable housing through various grant programs. ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: Yes Budget Year: 2020-21 Funding Identified: No Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund State Federal N/A Fees Other: Total Item 5 Packet Page 13 Decisions made regarding priorities will affect how CDBG and GIA applications are evaluated and chosen for support. The City receives CDBG funds through the County allotment and, while this does not directly impact the General Fund, to the extent that projects can be funded through CDBG, they are not otherwise requesting money from the City’s General Fund. The City has historically designated a portion of General Fund monies for the GIA program and the priorities expressed by the Council will influence how those grants will be awarded. The 2020 -21 budget has an amount of $150,000 dedicated to the program. Establishing priorities has no immediate fiscal impact but is helpful in allocating the CDBG and GIA funding regardless of the amount. ALTERNATIVES 1. The Council may modify the proposed funding priorities. 2. The Council may continue consideration of the funding priorities. Direction should be given to staff regarding additional information needed to make a decision on priorities. This alternative is not recommended because the timelines for Advisory Body review and application submittal are fairly structured and the addition of time could delay funding approval for projects. Attachments: a - HRC Draft 10.2.19 Meeting Minutes Item 5 Packet Page 14 Draft Minutes Human Relations Commission Wednesday, October 2, 2019 Regular Meeting of the Human Relations Commission CALL TO ORDER A Regular Meeting of the San Luis Obispo Human Relations Commission was called to order on Wednesday, October 2, 2019 at 5:00 p.m. in the Council Chamber, located at 990 Palm Street, San Luis Obispo, California, by Chair Welts. ROLL CALL Present: Commissioners Renoda Campbell, Bill Crewe, Abe Lincoln, Vice Chair Michael Hopkins, and Chair Nancy Welts Absent: Commissioners Jeannette Richardson and Emily Rosten Staff: Cara Vereschagin, Housing Coordinator and Brian Leveille, Senior Planner PUBLIC COMMENT FOR ITEMS NOT ON THE AGENDA None. --End of Public Comment-- APPROVAL OF MINUTES 1. Consideration of Minutes of the Regular Human Relations Commission Meeting of September 4, 2019. ACTION: MOTION BY CHAIR WELTS, SECOND BY VICE CHAIR HOPKINS, 5-0-2 to approve the minutes of the Regular Meeting of the Human Relations Commission of September 4, 2019. PUBLIC HEARINGS 2. Community Needs Workshop Housing Coordinator Vereschagin presented an overview of the Community Development Block Grant and Grants-in-Aid processes and timelines, which highlighted key dates for the applicants. She also explained that the Workshop is intended to gather information from the Item 5 Packet Page 15 City of San Luis Obispo, Title, Subtitle Draft Minutes Human Relations Commission Meeting of October 2, 2019 Page 2 public, regarding health and human service needs in order to develop funding priorities for the 2019-20 grant cycle. Additionally, she explained that this fiscal year, the City Council allocated $20,000 for diversity and inclusion efforts, and that the HRC had been solicited to collect feedback from the public during this Community Needs Workshop, as to how the money should be distributed. Chair Welts then opened the public hearing. Public Comments: Steven Orozco, Peoples’ Self-Help Housing Kelly Cunningham Grace McIntosh, CAPSLO Jane Pomeroy, RISE Jan Maitzen, Transitional Food and Shelter Anne Wyatt, SmartShare Housing Solutions Kirsten Rambo, StandStrong Kevin J Drabinski, Food Bank Coalition Alexis Okumura, Senior Volunteer Services Chair Welts closed the public hearing. No Action was taken on this item. 3. Establish 2020-21 Community Development Block Grant (CDBG) and Grants- in-Aid (GIA) Funding Priorities Chair Welts opened the public hearing. Public Comments: None. Chair Welts closed the public hearing. After hearing the public testimony, the Commission agreed that they loved the creative spark of the community and that their mission to address all the needs was far from completion. The public testimony also solidified that their work has been heading in a positive direction. The Commission also expressed a desire to discuss non-fiscal priorities and to further impact and address the crucial community needs. ACTION: MOTION BY CHAIR WELTS, SECOND BY COMMISSIONER CREWE, 5-0-2 to approve the recommendation of the funding priorities for the 2020-21 CDBG and GIA grant cycles to remain unchanged from what was previously adopted described following below, and to further explore and discuss non-fiscal priorities to address the community needs: Item 5 Packet Page 16 City of San Luis Obispo, Title, Subtitle Draft Minutes Human Relations Commission Meeting of October 2, 2019 Page 3 Grants in Aid (GIA) 2020-21 Funding Priorities Main Priority: • Homeless prevention including affordable and alternative housing, supportive services, and transitional housing Other Priorities: • Hunger and malnutrition support • Supportive physical and mental health services for those in need • Services for seniors and/ or people with disabilities in need • Supportive and developmental services for children and youth in need Community Development Block Grant (CDBG) 2020-21 Funding Priorities 1. Provide emergency and transitional shelter, homelessness prevention and services. 2. Develop and enhance affordable housing for low and very-low income persons. 3. Promote accessibility and/or removal of architectural barriers for the disabled and elderly. 4. Enhance economic development (including seismic retrofit, economic stability, low and moderate income jobs). STAFF & COMMISSION COMMUNICATIONS 4. Staff Updates No updates from staff were presented. 5. Commissioner Updates Vice Chair Hopkins reminded the Commission to reach to the 2019-20 GIA grant recipients as assigned liaisons. Commissioner Crewe announced that the upcoming veteran’s stand down event in Santa Maria was providing shuttle services for attendees. ADJOURNMENT Chair Welts adjourned the meeting at 5:46 p.m. The next Regular meeting of the Human Relations Commission is scheduled for Wednesday, November 6, 2019 at 5:00 p.m., in the Council Hearing Room, 990 Palm Street, San Luis Obispo, California APPROVED BY THE HUMAN RELATIONS COMMISSION: XX/XX/2019 Item 5 Packet Page 17 Page intentionally left blank. Item 5Item 6 Packet Page 18 Department Name: Finance Cost Center: 2002 For Agenda of: November 19, 2019 Placement: Consent Estimated Time: N/A FROM: Brigitte Elke, Finance Director Prepared By: Natalie Harnett, Interim Budget Analyst SUBJECT: 2019-20 FIRST QUARTER FINANCIAL REPORT RECOMMENDATION Receive an update on the status of the current financial position, Major City Goals, and CIP projects for the first quarter of Fiscal Year 2019-20. The City’s Financial Reporting and Budget Administration policy for interim reporting requires that staff prepare and issue a formal quarterly report to the Council. DISCUSSION The accompanying First Quarter Financial Report for 2019-20 (Attachment A) provides a high- level overview of the City’s Financial condition as of September 30, 2019. The report summarizes revenue and expenditure actuals for the first three months of the quarter. It also includes an update on Major City Goals tasks that were expected to be completed during the first quarter. The report includes a Capital Improvement Project update and highlights milestones from the first quarter. The report’s focus is on the General Fund; however, updated information is also provided for each of the City’s enterprise funds. Background One of the City’s Fiscal Sustainability and Responsibility Major City Goal tasks is to implement quarterly financial reports to monitor fiscal performance including performance measures. The purpose of reporting on financial position more regularly is to address economic development and fiscal health sooner, thus allowing the city to find new ways of doing business and increase efficiency. Report Contents Section A: General Fund Update: Overall, the General Fund revenues and expenditures are on track with the budget. Cannabis businesses are expected to open later than originally forecasted so tax revenues will also lag. The City will propose a lower revenue projection at mid -year. Another notable variance is in Development Services revenue, which has already reached over 50% of it’s revenue projection for the year. Most of this over realization is due to several big developments completing the planning process ahead of schedule, but some is due to general growth in development activity. The Community Development Department’s original projections Item 6 Packet Page 19 were conservative and will be reassessed at mid-year. Section B: Enterprise Funds Update: Enterprise fund revenue showed no variance from projections. Collectively, the funds have reached 22% of the year’s revenue projection. None of the funds show signs of over or underspending thus far. Section C: Major City Goals Update: Of the twelve Major City Goal tasks that had a scheduled completion date during the first quarter, four were completed. Task completion dates were updated for the remaining tasks. A status report on all Major City Goal tasks will be provided and needed adjustments recommended at mid-year. Section D: Capital Improvement Plan Update: Public Works CIP Engineering and Management staff have delivered numerous projects in the first quarter of FY20. A couple highlights are the completed South Broad Street Pavement Improvements and the installation and opening of the first permanent Pickleball Courts (three) at French Park and relocated basketball court. Section E: CalPERS and Debt Schedule Update: The City made its annual CalPERS unfunded liability payment in July in the amount of $10.2 million. It also made all its debt payments due for the first quarter, totaling just under $1 million. Section F: Outlook for Next Quarter: Staff forecasts that Sales Tax revenue will remain high through the holiday season, but Transient Occupancy Tax Revenue will begin to slow down. There are eight Major City Goal Tasks expected to be completed next quarter along with several CIP projects. The City will be launching its new budget system over the next quarter in addition to a new quarterly Transient Occupancy Tax report that will published on the city’s website in late November. Policy Context Fiscal Health Major City Goal task 4 is to implement quarterly financial reports to monitor fiscal performance, including performance measures. Budget policy F, Goal Status Reports of major program objectives, will be formally reported to the Council on an ongoing, periodic basis. Public Engagement Public comment on the item can be provided to the City Council through written correspondence prior to the meeting and through public testimony at the meeting. First Quarter Financial Report for 2019-20 (Attachment A)will also be posted on the City’s website for public review. CONCURRENCE Operating departments were provided with the first quarter financial results before the preparation of this report. The respective fiscal officers reviewed the numbers and will be making budget amendment requests at mid-year if needed. Item 6 Packet Page 20 ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: Yes Budget Year: 2019-20 Funding Identified: Yes Fiscal Analysis: Funding Sources Current FY Cost Annualized On-going Cost Total Project Cost General Fund N/A N/A N/A State Federal Fees Other: Total N/A N/A N/A As part of the City’s Fiscal Sustainability and Responsibility Major City Goal, $10,000 was allocated for the ongoing staffing expenses involved with implementing quarterly financial reports. The attached first quarter report provides a high-level overview of the City’s financial position after the first three months of the year. No changes to the budget will be made at this time. ALTERNATIVES Not receive an update on the status of the current financial position, Major City Goals, and CIP projects for the first quarter of Fiscal Year 19-20. Attachments: a - FY20 First Quarter Report Item 6 Packet Page 21 Fiscal Year 2019-20 Prepared by: Natalie Harnett, Principal Budget Analyst First Quarter Report Item 6 Packet Page 22 First Quarter Financial Report Fiscal Year 19-20 First Quarter Financial Report Fiscal Year 2019-20 Introduction This financial report provides an overview of the City’s financial position through the first quarter of fiscal year 2019-20 (July 1, 2019-September 30, 2019) for the General Fund and major enterprise operating funds. It also provides an update on the stat us of the City’s Capital Improvement Program projects (CIP) and Major City Goals. Notable milestones or trends within the first quarter are addressed. This report is broken down into the following sections: SECTION A General Fund: Operating Revenues The following table includes first quarter revenue comparisons for FY19 and FY20 and a revenue budget to actual comparison for FY19. FY19 FY20 $ Variance % Variance FY20 % of budget Tax & Franchise Revenue Sales & Use Tax 3,451,275 3,360,627 (90,648) -3% 18,060,000 19% Local Revenue Measure G 1,725,638 1,671,117 (54,520) -3% 7,840,000 21% Property Tax 123,611 132,909 9,298 8%17,921,000 1% Transient Occupancy Tax 2,316,381 2,334,589 18,208 1%8,033,000 29% Utility User Tax 1,189,307 1,187,531 (1,776) 0%5,854,000 20% Franchise Fees 67,567 77,798 10,231 15%1,558,000 5% Business Tax 2,550,720 2,862,835 312,115 12%2,942,000 97% Gas Tax 267,746 393,091 125,345 47%1,783,000 22% Cannabis Tax - - - 0%650,000 0% Total Tax/Franchise 11,692,244 12,020,497 328,253 3%64,641,000 19% Fees for Service Police Services 108,290 108,157 (133) 0%742,202 15% Fire Services 322,519 325,975 3,456 1%1,399,793 23% Development Review 1,123,099 2,854,728 1,731,628 154%5,333,000 54% Parks and Recreation 413,291 392,278 (21,014) -5% 1,914,645 20% Total General Government 282,794 425,035 142,240 50%560,000 76% Cannabis - 7,676 7,676 0%400,000 2% Other Revenues 161,877 1,891,083 1,729,206 1068%2,262,000 84% Subventions & Grants 21,430 18,897 (2,533) -12% 900,000 2% Total Fees & Other 2,433,302 6,023,828 3,590,527 148%24,830,973 24% Total Revenue 14,125,546 18,044,325 3,918,780 28%89,471,973 20% First Quarter Actual Comparison Budget to Actual Comparison Key: No Variance Variance Significant Variance Section A: General Fund Update Section B: Enterprise Funds Update Section C: Major City Goals Update Section D: Capital Improvement Plan Update Section E: CalPERS and Debt Schedule Update Section F: Outlook and Conclusion Item 6 Packet Page 23 First Quarter Financial Report Fiscal Year 19-20 The following factors should be taken into consideration when analyzing first quarter revenue data: • Property tax revenue has not yet been received . • Only two months of Sales Tax has been received. • Most franchise fees are collected annually in April. • Some departmental revenues are seasonal. • Subventions and Grants are awarded in large amounts and at varying times of the year. • The significant increase in “Other Revenues” is due to one-time funding from SB1090 (Diablo Canyon Power Plant closure). Overall, General Fund operating revenues are ahead of FY19 revenues during the same time period. Although revenues are only at 20% percent of the budget through the first quarter, this is primarily due to the timing associated with the city’s largest revenue sources, sales tax and property tax. The majority of property tax funding is received in the third and fourth quarters of the fiscal year. Sales Tax: Only two months of sales tax has been received during the first quarter due to the timing of disbursements from the California Department of Tax and Fee Administration (CDTFA). From the two months that have been collected, Sales Tax revenue is only slightly lower than FY19, but because of true-up that happens in later months, this amount is likely to increase. July 2019 marked ten years of continuous economic growth which is the largest period of U.S economic expansion on record. Staff expects sales tax revenue growth to slow over the next year and will continue to closely monitor this revenue stream and provide an update at the FY20 mid-year review. Transient Occupancy Tax (TOT): Year to date revenues are slightly higher than one year ago. Staff forecasted growth in TOT due to three new hotels opening in 2019 and the expansion of homestay rentals. TOT is discussed in detail in the new quarterly TOT report that will be published in late November. Business Tax: The renewal cycle for business tax occurs during the first quarter of the fiscal year; therefore, most of the anticipated revenue for the year has been collected. The City had higher revenue during the first quarter of this year compared to FY19 for two reasons. The City opened the business license renewal period earlier and encouraged online submittals. Overall, more 3.064.18$4.02 $4.94 $4.44 FY 15 -16 FY 16 -17 FY 17 -18 FY 18 -19 FY 19 -20 (FORECAST) SALES TAX (MILLIONS) QTR 1 FIVE YEAR COMPARISON Item 6 Packet Page 24 First Quarter Financial Report Fiscal Year 19-20 businesses complied early and fewer administrative citations were sent in October. The City has also increased business license enforcement as part of the Fiscal Health Response Plan. Cannabis Tax: The City is currently doing background checks for the cannabis businesses that applied in January 2019. The process is taking longer due to unexpected hurdles during backgrounding of applicants. One non-retail business has been approved and is scheduled to open during the winter of FY20. Staff will adjust Cannabis revenue assumptions at mid-year when opening dates will be known for two of the three anticipated retailers. Development Review: When taking a closer look at development review revenue, there are three main fee types that are contributing to the notably high revenues for the first quarter. Development review revenues are particularly difficult to forecast because there are so many external factors that could impact development activity. “Plan Check Fees” and “Building Permits” are fees that indicate the overall health of construction activit y within the community. The high actuals associated with the three fee types highlighted above are directly related to several specific, yet large development projects moving through the planning process ahead of schedule. The Community Development Department conservatively projected revenues because of overall uncertainty in the economy. The department is critically evaluating these revenue streams and will adjust the budget accordingly at mid-year. The year over year revenue graph below helps illustrate the variance. Development Services revenue has already reached over 50% of the total revenue received in the entire year of FY19. FY19 FY20 $ Variance % Variance FY20 % of budget Planning & Zoning Fee 120,616 203,395 82,779 69%480,000 42% Development Review Fees 24,741 110,064 85,323 345%166,000 66% Building Permits 428,940 884,060 455,120 106%2,263,000 39% Code Enforcement Fees 30,353 19,806 (10,547) -35% 82,000 24% Plan Check Fees 187,878 259,790 71,912 38%994,000 26% Infrastructure Plan Check 228,645 1,210,853 982,208 430%923,000 131% Encroachment Permits 66,032 69,719 3,687 6%305,000 23% Engineering Dev Rev Fees 22,900 40,462 17,561 77%120,000 34% First Quarter Actual Comparison Budget to Actual Development Review Fees Item 6 Packet Page 25 First Quarter Financial Report Fiscal Year 19-20 General Fund: Department Operating Expenditures The following table include first quarter staffing consumption for FY20 compared to the budget. First quarter staffing expenditures are exactly on track. The City assumes a 2% salary savings at the end of the year to account for vacancies and fluctuations in employee pay grades. The following table include first quarter non-staffing consumption for FY20 compared to the budget. Department operating expenditures are generally on target. In a linear fashion, expenditures should track at 25% at quarter end, but this is often not the case for non-staffing expenses. One of the largest line item expenses in the operating budget is Contract Services and contracts are paid at varying times of the year. For example, a department budget could go from 5% expended to 60% expended after one large annual contractual obligation. Staffing General Fund Budget Actual YTD % of budget Administration & IT 4,270,520 804,856 19% City Attorney 779,577 163,125 21% Community Development 4,625,003 902,672 20% Finance 1,684,061 351,355 21% Fire 12,298,808 2,649,803 22% Human Resources 1,074,645 212,094 20% Parks & Recreation 3,517,812 863,114 25% Police 16,882,738 3,566,837 21% Public Works 8,977,704 1,894,053 21% Grand Total 54,110,869 11,407,908 21% Budget to Actual Comparison Non-Staffing General Fund Budget (incl. FY19 encumbrances) Actual YTD % of budget Administration & IT 4,634,253 631,148 14% City Attorney 270,148 63,706 24% Community Development 1,074,906 287,277 27% Finance 805,830 158,390 20% Fire 810,916 135,090 17% Human Resources 518,584 22,315 4% Parks & Recreation 1,080,337 176,229 16% Police 1,282,269 252,603 20% Public Works 5,237,803 985,075 19% Solid Waste 46,510 451 1% Grand Total 15,761,557 2,712,285 17% Budget to Actual Comparison Item 6 Packet Page 26 First Quarter Financial Report Fiscal Year 19-20 SECTION B Enterprise Funds: Operating Revenue The table below includes first quarter actual revenue comparisons for FY19 and FY20 and a revenue budget to actual comparison for FY20 for the Enterprise Funds. Water & Sewer: Revenues are on track and very comparable to where they were during the first quarter of last year. Parking: Parking revenues were artificially low in FY19 due to change in the financial system and parking meter revenues being entered in the following quarter. This revenue stream typically adds about $100K-$150K per month. Considering the discrepancy, FY20 revenue are only slightly higher than the prior year. Transit: Most of the Transit Fund revenue is from State and Federal grants that are received at the end of the fiscal year; therefore, having received only 5% of the forecasted revenue at this point is completely normal. Enterprise Funds: Operating Expenditures The following tables include first quarter staffing followed by non-staffing consumption for FY20 compared to the budget. Like the trend in the general fund, operating expenditures for the City’s enterprise funds are tracking lower than 25% for the first quarter. Very similar trends were seen in FY19 but spending usually increases during later quarters in the year. The Water fund has spent 62% of the budget because it makes a large annual Nacimiento water payment in July. FY19 FY20 $ Variance % Variance FY20 % of budget Water 5,941,218 6,282,288 341,070 5.74% 27,066,000 23% Sewer 4,139,331 4,176,662 37,331 0.90% 17,432,427 24% Parking 875,111 1,206,485 331,375 37.87% 5,343,000 23% Transit 594,512 213,274 (381,238) -64.13% 4,116,000 5% Total Revenue 11,550,172 11,878,709 328,537 2.84% 53,957,427 22% First Quarter Actual Comparison Enterprise Funds Budget to Actual Comparison Staffing Enterprise Funds Budget Actual YTD % of budget Parking 1,287,835 302,812 24% Sewer 4,335,683 843,834 19% Transit 342,360 74,495 22% Water 4,137,825 821,332 20% Grand Total 10,103,703 2,042,474 20% Budget to Actual Comparison Non-Staffing Enterprise Fund Budget (incl. FY19 encumbrances) Actual YTD % of budget Parking 1,343,911 180,372 13% Sewer 2,447,295 590,241 24% Transit 3,774,565 298,856 8% Water 12,675,448 7,858,195 62% Grand Total 20,241,220 3,090,565 15% Budget to Actual Comparison Item 6 Packet Page 27 First Quarter Financial Report Fiscal Year 19-20 SECTION C Major City Goals Update Of the twelve tasks that were scheduled to be completed during the first quarter of FY20, four were fully completed. The others are in progress and the updated completion dates are included in the table below: Completed (Yes/No)Task Update Updated Completion Date (If applicable) Fiscal Health Negotiate labor agreements consistent with Fiscal Health Response Plan objectives with the San Luis Obispo City Employees' Association and the San Luis Obispo Police Staff Officers' Association. 8/30/2019 No The Human Resources Department has successfully negotiated a labor agreement with the San Luis Obispo Police Staff Officers Association consistent with Fiscal Health Response Plan objectives. Negotiations with the San Luis Obispo City Employees' Association is in progress and we are hopeful to come to agreement in early 2020. Winter/Spring 2020 Fund new Cannabis Detective Position using Cannabis Fees Jul-19 Yes The Cannabis Detective is actively working on applications and background investigations to sucessfully integrate cannabis industry in San Luis Obispo. Purchase specific equipment related to Cannabis Detective Jul-19 No Some equipment has been purchased such as a ID card machine Ongoing through FY20 Climate Action Support SLO Green Business Network and Certify City Hall as a Green Business Jul-19 No The $10,000 in support was disbursed to the SLO Green Business Network, which has certified 20 local businesses. The City will engage with the SLO Green Business Network to certify City Hall as a Green Business by March 2020. 1st Quarter 2020 Sustainable Transportation Construct Anholm Greenway Phase 1 & 2 (Grants, SB1, & GF) 2019 No Anholm Greenway Phase 1A (Foothill/Ferrini Crossing) is under construction and will be completed in November 2019. Phase 1B (Foothill to Broad) and Phase 2 (Broad to Downtown) are in design with plans to start construction by mid-year 2020. Phase 1A - Nov 2019 Phase 1B - Nov 2020 Phase 2 - Nov 2020 Complete Prado Creek Bridge Environmental Review & Construction Documents (Traffic Impact Fees & Grants) 2019 No Environmental review underway, with CEQA/NEPA documents submitted for internal review and planned for submittal to Caltrans by end of 2019. Anticipated completion of Environmental, Right-of-Way Aquisition, and Construction Documents by end of 2020. 4th Quarter 2020 Housing Complete an Affordable Housing Nexus Study in alignment with HE 2.15 and HE 4.6* Fall 2019 No Nexus study is underway and on schedule. Staff anticiaptes a final report with policy recommendations from the consultant in mid-December. 2nd Quarter FY20 Continue the Affordable Housing Monitoring Program* Fall 2019 No Montioring progam is underway and staff anticipates completion of this item in mid-December. Depending on findings, completion of all follow-up actions associated with this work effort may take additional time and coordination with the City Attorney's Office. 2nd Quarter FY20 Downtown Vitality Fund Police Field Service Technician and a Downtown Sergeant with land lease revenues Jul-19 Yes Both positions have been hired. Install security cameras in Mission Plaza Sept-19 No In progress. Staff working with contractor to start project. Construction to begin January 2020 Work with Downtown SLO to update downtown tile maps Aug-19 Yes The design and installation of the new tile maps at Monterey/Chorro, Marsh/Chorro and Higuera/Broad was completed in July 2019. Support the implementation of a Property- Based Business Improvement District (also included in Fiscal Health and Sustainability Major City Goal) Sep-19 Yes With the withdrawl of the petition for the PBID by Downtown SLO, the City amended its existing agreement with DSLO to fund a one-year pilot program that will add an additional downtown ambassador to their Clean and Safe Program. Downtown SLO hired a new ambasssador and they began work on October 25, 2019. Tertiary MCG Priorites* PROGRAMS/PROJECTS 2019-20 Major Task Completion Date Status Update (as of Sept 30, 2019) Item 6 Packet Page 28 First Quarter Financial Report Fiscal Year 19-20 SECTION D CIP Update Public Works CIP Engineering and Management staff have delivered numerous projects within the first quarter of the fiscal year as listed in the below table. These projects include South Broad Street Pavement Improvements, which in addition to new asphalt pavement, included Americans with Disabilities Act (ADA) ramp upgrades and wider and safer bike lanes with striped buffers. Public Works staff also designed and implemented Utilities projects that maintained or replaced existing sanitary sewer and potable water systems, ensuring continued health and welfare of the public. Other notable projects include installation of the first permanent Pickleball Courts at French Park and maintenance of the Therapy Pool at the SLO Swim Center. Project Proponent Department Status LRM Funding Approx. Construction Budget South Broad Street Pavement Improvements Public Works Completed in October Yes $2,270,500 Casa/Murray Waterline Replacements Utilities Awarded. Construction to start November No $2,055,000 Stafford-Kentucky-Taft Sewer Replacement Utilities Ongoing. Completion targeted November No $1,230,000 Osos-Leff-Santa Barbara Sewer Replacement Utilities Completed in September No $1,103,000 Sewer Lining 2016 Utilities Substantially Completed in August No $524,000 Foothill Pipe Bursting Utilities Ongoing. Completion targeted November No $304,000 Sewer Lining 2019 Utilities Completed in October No $228,000 Water Treatment Plant Wash Water Tank Recoat Utilities Ongoing. Completion targeted December No $168,000 Pickleball Courts Parks and Recreation Completed in September No $167,000 Dispatch HVAC Replacement Police / Fire / PW Completed in October Yes $151,000 El Capitan Bridge Replacement Public Works Ongoing. Completion targeted November No $108,000 Silt Removal 2019 Public Works / Administration Completed in October No $97,000 Swim Center Therapy Pool Re- Plaster Public Works / Parks and Recreation Completed in September Yes $96,000 Fire Station 4 Emergency Backup Generator Fire Completed in September Yes $94,000 City Hall Painting Public Works Completed in September Yes $40,000 Fire Station 3 Painting Public Works Completed in August Yes $10,000 $8,645,500 Total Budget for Active Projects in FY 2019 Q1 Item 6 Packet Page 29 First Quarter Financial Report Fiscal Year 19-20 SECTION E Update on CalPERS Unfunded Liability Payment: The CalPERS unfunded liability payment was made in July 2019 in the amount of $10,218,495. When the city prepays the unfunded liability, it saves a significant amount in interest as opposed to paying the amount due monthly. For FY20, the City saved $368,924 by prepaying the unfunded liability. Debt Schedule: Below is a table of all debts that had maturity dates during the first quarter and the associated payments. SECTION F Outlook for Next Quarter The second quarter of FY20 will provide City staff with a clearer picture of revenue and expenditure trends. Transient Occupancy Tax revenue typically begins to slow down in the second quarter due to lower travel activity during the Winter months. Historically, Sales Tax revenues for San Luis Obispo remain strong through the holiday season and drop after the second quarter. Sales Tax revenues for the second quarter for FY20 are forecasted to be about $4.7 million, or about $300K higher than forecasted for the first quarter. Including the first quarter Major City Goal tasks that were extended, there are eight MCG work tasks that are scheduled to be completed next quarter. The City will also be launching the Oracle budget module over the next three months. This system will help the departments improve forecasting and easily generate real time revenue and expenditure information. By January, FY19 financials will be audited and finalized, giving staff a clear picture of fund balances and overall ending position of FY19. Depending on the amount of savings, departments may request to increase budgets for projects or programs based on City priorities. Conclusion Except for identified variances, revenue and expenditures are tracking as expected. Staff will continue to monitor these variances and report to City Council in February with the mid-year review and proposed budget changes. Based on first quarter results, the major changes will be to lower Cannabis related revenue projections, possibly offset by an increase in development services. City staff will be attending the annual Central Coast Economic Forecast on November 8, 2019 and will be providing a comprehensive economic update at mid-year review. Fund Item Principal Payment Premium/ Discount Interest Payment Total Final Year General 2018 Lease Fire Truck 31,934 4,599 36,533 2024 General 2015 Lease Mobil Data Equipment Lease 44,291 172 44,463 2020 General 2014 Lease Copiers 5,324 23 5,347 2020 General 2010 Lease Fire Truck (Apparatus)1,869 1,869 2020 Water 2004 State Water Resource Control Board 453,100 72,357 525,457 2025 Parking 2001 State Infrastructure Bank (CIEDB) Loan Marsh St 275,580 12,968 66,354 354,902 2032 TOTAL 810,229 85,325 73,017 968,571 Item 6 Packet Page 30 Department Name: Administration Cost Center: 1001 For Agenda of: November 19, 2019 Placement: Consent Estimated Time: N/A FROM: Greg Hermann, Deputy City Manager Prepared By: Ryan Betz, Assistant to the City Manager SUBJECT: AMENDMENT #2 TO THE CURRENT AGREEMENT FOR JOINT CONSTRUCTION AND FINANCING COSTS FOR AN ANIMAL SERVICES FACILITY RECOMMENDATION Authorize the City Manager to approve Amendment #2 to the Agreement for Allocation of Construction and Financing Costs for an Animal Services Shelter. DISCUSSION Background On February 7, 2017 the City Council approved a contract with the County of San Luis Obispo, and the Cities of Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Pismo Beach and Paso Robles to pay a proportional share of the County’s costs to finance and construct a replacement of the County Animal Services Shelter (Shelter) in exchange for the continued right to use of and services from the Shelter. The Shelter, operated by the County of San Luis Obispo’s Animal Services Division, houses and cares for stray and owner relinquished animals. Located at 885 Oklahoma Avenue in San Luis Obispo, it is the County 's only open intake animal shelter and receives approximately 5,000 animals annually, with dogs and cats accounting for roughly 95% of the animals handled. The existing Shelter was constructed in 1975 and since that time industry standards and public expectations of animal shelter have shifted substantially and many of the shelter's original design features and characteristics are now outdated or inconsistent with the current understanding of humane animal sheltering. Under this service contract, all seven cities and the County are allocated shares of the County’s costs to build a new Shelter to provide animal services based on a formula that factors the agencies' proportionate use of field services and shelter services. The agreement provides a mechanism to: 1. Allocate costs based on proportionate use. 2. Clarifies service and shelter governance. 3. Contains mechanisms to control construction costs and affords the County a more efficient way to construct a shelter consistent with state law in order to satisfy local service preferences and standards. Item 7 Packet Page 31 On August 21, 2018 the City Council approved Amendment #1. The amendment clarified that the first $1,000,000 of costs would be allocated solely to the County and added clarity for shared governance of shelter services among participating agencies, and a new service approach to the shelter operations. Agreement Amendment #2 In April 2019, the County invited the top 3 prequalified Design-Build Entities (DBEs) to submit proposals for the new Shelter. In July 2019, the County received proposals from 2 DBEs for design and construction of the new Shelter: F&H Construction and Diani Bui lding Corporation. The proposals were reviewed for firm expertise and project management, pricing for key project components and project additives, concept design and design approach, lifecycle costs, delivery schedule, and presentation. These categories were ranked by a selection committee consisting of representatives from the County, City of San Luis Obispo, and the City Managers from Atascadero and City of Grover Beach. In August 2019, the selection and project steering committee affirmed the selection of F&H Construction as the best qualified firm providing the best value to the project and are recommending the Board of Supervisors award them the project at a Board of Supervisors meeting in December 2019. Final negotiations with F&H are nearing completion, and a Design-Build contract will be awarded and signed by the County Board of Supervisors following ratification of the amended agreement regarding project cost allocations between the County and all partner Cities contracting for shelter services (Amendment #2). Amendment #2 (Attachment A) identifies the increased estimated construction costs for the Shelter. Initial project construction costs were estimated to be $13,176,500 and as part of Amendment #1, the County agreed to reduce the costs allocated to the Cities by $1,000,000, lowering the estimated shared construction costs to $12,176,500. Based upon the pending Design-Build contract for the project, the total project costs to be shared by the cities and County are $18,999,773. The increase is likely due to the current high activity in the building industry, shortage of labor, tariffs on materials and DBEs needing to adhere to State requirements for providing skilled labor on projects, and a high demand for design and construction of capital projects throughout the State of California. Over the last two years, the City has also experienced elevated bid proposals for capital projects that align with the increases demonstrated with this project. Previous Council or Advisory Body Action On August 21, 2018 the City Council approved Amendment #1 to the agreement. On February 7, 2017 the City Council approved the original agreement for allocation of construction and financing costs in exchange for the continued animal shelter use and services. Policy Context Under state law, each incorporated City has the option of contracting with the County or providing their own animal services consistent with the standards outlined under state law. All seven cities in the County of San Luis Obispo have contracted with the County for those services. Absent an agreement to offset the County’s construction costs and to facilitate the County moving forward with construction of a new Shelter, the cities would need to pursue alternate service delivery methods that were deemed cumulatively more costly and less effective Item 7 Packet Page 32 than the current County services agreements. Public Engagement This item is on the agenda for the November 19, 2019 City Council meeting and will follow all required postings and notifications. The public may comment on this item at or before the meeting. CONCURRENCE The County of San Luis Obispo and the cities of Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Pismo Beach, and Paso Robles have either approved Amendment #2 or are in the process of approving it. In addition to the cities listed above, the City’s Police Department concurs with the proposed amendment to the existing agreement. ENVIRONMENTAL REVIEW The County of San Luis Obispo is the lead agency under the California Environmental Quality Act (CEQA) and will complete all required environmental review for the project. The project is not in the City’s jurisdiction, the City will not be directly participating in the contracts for or construction of the new Shelter and is not responsible for carrying out or approving the project or any regulatory oversight of the project for purposes of CEQA. FISCAL IMPACT Budgeted: Yes Budget Year: 2019-20 Funding Identified: Yes Fiscal Analysis: Funding Sources Current FY Cost Annualized On-going Cost Total Project Cost General Fund $145,128* $111,028 State Federal Fees Other: Total $145,128 $111,028 *$111,028 for 19-20 and $34,100 for a one-time construction cost. Both have been budgeted in the Police Department’s budget. As part of the approved 2019-21 Financial Plan, the Police Department budgeted $130,000 for the annual allocated project costs the construction of the new Shelter. The estimated annual allocated cost derived from the Shelter project costs over the next 25 years is $111,028 (Attachment B), a savings of $18,972 in FY 19-20. There is no immediate identified use for the savings, and it will remain in the Police Department’s budget for FY 19-20. As the lead agency for project, the County will be funding the project through debt financing, with the participating Item 7 Packet Page 33 cities paying their portion of the construction cost directly to the County on an annual basis. The original agreement also included a one-time construction cost allocation of $34,100, which the Police Department budgeted as part of the approved 2017-19 Financial Plan and is still applicable. It brings the total due for the first year (2019-20) to $145,128. In addition to the construction cost for the new Shelter, the City pays $151,582 annually to the County for animal care and control services. The City, along with the six other cities within the County, have contracted with the County for these services for many years. Services provided include: 1. Emergency and non-emergency response of Animal Services Officers for injured and stray animals; 2. Investigative services for animal bites, abuse, and neglect; 3. Sheltering and quarantine services; 4. Dog licensing; 5. Animal adoption and other services as required either by State law or City Municipal Code. The Police Department administers the contract on behalf of the City and the funding for this cost was approved in the 2019-21 Financial Plan. This funding, for animal care and control services, is separate than the construction cost for the new Shelter. ALTERNATIVES The City Council may choose not to approve this amendment. This alternative is not recommended because the estimated cost identified in this amendment is under budget and ensures the City participates, in a joint effort with the cities and County, to ensure the County’s construction of a new Shelter that meets the service needs of the community and is consistent with the humane sheltering of animals. Attachments: a - Amendment No. 2 b - Exhibit A to Amendment No. 2 Item 7 Packet Page 34   Page 1 of 3 AMENDMENT NUMBER 2 TO THE AGREEMENT FOR ALLOCATION OF CONSTRUCTION AND FINANCING COSTS FOR AN ANIMAL SERVICES SHELTER AT 865 OKLAHOMA AVENUE IN SAN LUIS OBISPO, CALIFORNIA, BETWEEN THE CITIES OF ATASCADERO, ARROYO GRANDE, GROVER BEACH, MORRO BAY, PASO ROBLES, PISMO BEACH, AND SAN LUIS OBISPO AND THE COUNTY OF SAN LUIS OBISPO THIS AMENDMENT No. 2 (“Amendment No. 2”), dated for reference as of December 10, 2019, to the Agreement (defined below), is entered into by and between the COUNTY OF SAN LUIS OBISPO (the “County”), and the cities of ATASCADERO, ARROYO GRANDE, GROVER BEACH, MORRO BAY, PASO ROBLES, PISMO BEACH, AND SAN LUIS OBISPO (each, a “City,” and collectively, the “Cities,” and, together with the County, the “Parties”, or individually “Party”). RECITALS The County and each of the Cities previously entered into an Agreement (“Agreement”) for allocation of construction and financing costs for a new Animal Service Shelter at 865 Oklahoma Avenue in San Luis Obispo, California (“Shelter” or “Project”). The Agreement is dated as of February 1, 2017. The Parties entered into Amendment No. 1 to the Agreement, dated June 5, 2018. The County provided written notice of increased estimated construction costs to the Cities on July 18, 2019, pursuant to Section 3(a)(ii) of the Agreement. The Cities approved the additional construction costs in writing, pursuant to Section 3(a)(ii) of the Agreement. The Parties acknowledge the benefit of collaborative and joint efforts in constructing, financing, and managing the Shelter. The Parties now enter into this Amendment No. 2 to memorialize the increased estimated construction costs for the Shelter. The Agreement, Amendment No. 1and this Amendment No. 2 represent the entire agreement between the Parties. NOW, THEREFORE, the Parties agree as follows: 1. Recitals. The above Recitals are true and correct.  2. Capital and Financing Costs a) The Project construction costs to be shared by the Parties were estimated at the time the Agreement was signed to be Thirteen Million One Hundred Seventy-Six Thousand Five Hundred Dollars ($13,176,500). Pursuant to Amendment No. 1, the County agreed to reduce the costs allocated to the Cities by $1 Million, thereby lowering the estimated shared constructions costs to Twelve Million One Hundred Seventy-Six Thousand Five Hundred Dollars ($12,176,500). Pursuant to this Amendment No. 2, and in consideration of the Design- Build contract amount for the Project, the Project construction costs to be shared by the Parties shall not exceed Eighteen Million Nine Hundred Ninety-Nine Thousand Seven Hundred Seventy-Three Dollars ($18,999,773). b) Estimated financing costs are shown in Attachment A to this Amendment No. 2 and may vary depending on the applicable interest rate and whether there are out of pocket costs to obtain Item 7 Packet Page 35   Page 2 of 3 financing (collectively “Estimated Project Financing Costs”). If the actual interest rate is higher or lower than that estimated on Attachment A, the actual financing costs will vary. 3. In the event of a conflict between the terms of the Agreement, Amendment No. 1 and this Amendment No. 2, the terms of this Amendment No. 2 shall prevail. IN WITNESS WHEREOF, by their execution below, the Parties agree to be bound by the provisions of this Amendment, and the Board of Supervisors of the COUNTY OF SAN LUIS OBISPO has authorized and directed the Chairperson of the Board of Supervisors to execute this Agreement for and on behalf of the County, and the Cities of ATASCADERO, ARROYO GRANDE, GROVER BEACH, MORRO BAY, PASO ROBLES, PISMO BEACH, AND SAN LUIS OBISPO have caused this Agreement to be subscribed by each of their duly authorized officers and attested by their Clerks. Dated: _______________ COUNTY OF SAN LUIS OBISPO _____________________ ____________________________ Clerk of the Board Dated: _______________ CITY OF ATASCADERO _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF ARROYO GRANDE _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF GROVER BEACH _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF MORRO BAY _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF PASO ROBLES _____________________ ____________________________ City Clerk By: Item 7 Packet Page 36   Page 3 of 3 Dated: _______________ CITY OF PISMO BEACH _____________________ ____________________________ City Clerk By: Dated: _______________ CITY OF SAN LUIS OBISPO _____________________ ____________________________ City Clerk By: Item 7 Packet Page 37 SLO County Animal Services Facility Financing cost estimates at proposal costs July 25, 2019 market update Project cost 13,176,500$                   Scope Cost 20,348,740$             less: County‐only Road Costs (348,967)$                 County Contribution (1,000,000)$                   less: County Contribution (1,000,000)$              Shared debt 12,176,500$                  Amount Financed 18,999,773$             Agency Share 25yr ‐ 3.5%Additional Annual Debt Service vs. MOU  low‐end 25yr ‐ 3.24% Arroyo Grande 5.94% 45,523$                          20,231$                                                          65,753$                     Atascadero 15.03% 115,186                          51,190                                                            166,376                     Grover Beach 3.12% 23,911                            10,626                                                            34,537                       Morro Bay 2.90% 22,225                            9,877                                                              32,102                       Paso Robles 18.15% 139,097                          61,816                                                            200,913                     Pismo Beach 1.19% 9,120                               4,053                                                              13,173                       San Luis Obispo 10.03% 76,868                            34,160                                                            111,028                     Unincorporated 43.64% 334,447                          148,630                                                          483,077                     Avg Annual Payment 100.00%766,377$                        340,582$                                                       1,106,959$               MOU (low end) Estimated Annual Debt Service at July 25th market  update Exhibit A to MOA Amendment No. 2 Item 7 Packet Page 38 Department Name: Public Works Cost Center: 5006 For Agenda of: November 19, 2019 Placement: Consent Estimated Time: N/A FROM: Shelly Stanwyck, Assistant City Manager, Community Services Prepared By: Michael J. McGuire, Senior Civil Engineer SUBJECT: HIGUERA STREET SIDEWALK REPAIR, SPECIFICATION NO. 91320 RECOMMENDATION 1. Approve construction documents for “Higuera Street Sidewalk Repair, Specification No. 91320”; and 2. Authorize Staff to advertise for bids and authorize the City Manager to award the construction contract, if the lowest responsible bid is within the Engineer’s estimate of $295,000. DISCUSSION Background The Higuera Street Sidewalk Repair is a subproject of the 2019-21 Downtown Renewal CIP (Attachment A). The goal of this work is to improve public safety and enhance aesthetics in the downtown core by replacing old and deteriorated sidewalks with the City’s Mission Style Sidewalk. When the initial Downtown Renewal project was implemented in 2012, a small section of the sidewalk located in front of 858 & 860 Higuera Street was not included in the work as there was a basement space below the sidewalk. The sidewalk, which was acting as the ceiling for the basement below it, has deteriorated and needs replacement. As specialized engineering was necessary to support the sidewalk, this became its own separate project from the rest of the Downtown Renewal. Construction funding was made available in 2017 and recently, the repair design work was updated and completed for the current building codes (Attachment B). In March 2019, a small chunk of the sidewalk at this location broke off and fell into the basement. This event indicated that the sidewalk is deteriorating rapidly, and replacement is urgently needed. Initial estimates from 2012, adjusted for inflation, indicated that the project could be completed with the funding in the approved 2019-21 budget. Recently, however, the high demand for contract labor has demonstrated that construction costs are exceeding annual inflation rates, and prior construction estimates would likely be insufficient to fully fund the project. Costs premiums are also expected due to the work being performed at night as well as the unusual constraints of accessing the work site. These factors require staff to request additional funding Item 8 Packet Page 39 for construction. The construction work is anticipated to start in January 2020 and will be completed at night in order to minimize construction impacts to businesses. During business hours, the City’s Contractor is required to provide fully accessible entrances for affected businesses. On September 30, 2019, a letter was sent to the property owner requesting a cost-sharing arrangement between the City and the Owner so that the project could proceed to construction (Attachment C). To date, a written response has not been received. Policy Context Per the October 2018 Financial Management Manual, Council approval is required for Public Projects that cost over $175,000. Section 12.16.020 of the Municipal Code references the State of California’s Streets and Highway Code1 that indicates the adjacent property owner of public sidewalk is required to maintain and replace this sidewalk. The City has a past practice, in many instances, particularly those areas of the downtown, where the sidewalk is used intensively by the public, to maintain and repair it in the interest of public safety and liability avoidance, because the City can be held liable for injuries occurring as the result of sidewalk conditions that are held to be in a dangerous condition to the public. However, as this sidewalk also serves as a roof for a basement; staff reached out to the property owner to no response. Given a failure of this key sidewalk would negatively impact a portion of Higuera Street downtown, staff has pursued this City-funded project but provides an alternative below for Council to consider within the context of existing policy. Public Engagement Annual maintenance for public roadways, including sidewalk reconstruction, was identified and included in the 2019-21 Financial Plan and identified as a Major City Goal. CONCURRENCE This project has the concurrence of the Utilities Department. ENVIRONMENTAL REVIEW The Community Development Department has issued a Notice of Exemption pursuant to Section 15302 Class 2 (Replacement or Reconstruction) of the California Environmental Quality Act Guidelines. 1 “Streets & Highways Code § 5610. The owners of lots or portions of lots fronting on any portion of a public street or place when that street or place is improved or if and when the area between the property line of the adjacent property and the street line is maintained as a park or parking strip, shall maintain any sidewalk in such condition that the sidewalk will not endanger persons o r property and maintain it in a condition which will not interfere with the public convenience in the use of those works or areas save and except as to those conditions created or maintained in, upon, along, or in connection with such sidewalk by any perso n other than the owner, under and by virtue of any permit or right granted to him by law or by the city authorities in charge thereof, and such persons shall be under a like duty in relation thereto. [Added by Stats. 1941, Ch. 79]” Item 8 Packet Page 40 FISCAL IMPACT Budgeted: Yes Budget Year: 2019 -20 Funding Identified: Yes Fiscal Analysis: Construction (Engineer’s Estimate):$295,000 Construction Contingencies:$44,500 Printing and Advertising:$500 Special Inspection:$10,000 Total Estimated Project Cost:$350,000 Proposed FY19-20 Funding Allocation: Current Funds:$190,000 Broad Street Project Allocated Funds:$160,000 Total Project Budget:$350,000 Higuera Street Sidewalk Repair, Specification No. 91320 The 2017-19 Financial Plan, page E2-129 to E2-131, identified $160,000 for the construction phase and $30,000 for the construction management phase. This funding was re-appropriated by Council action June 2018 to the Laurel Lane Complete Streets project. New funding of $190,000 was provided in the 2019-21 Financial Plan to support this project; however, the revised cost estimate for construction indicates that an additional $160,000 is needed to fully fund the project. Staff have identified supplemental funds within a separate Downtown Renewal project for the west side of Broad Street between Higuera and Marsh streets. That project contains a budget of $210,000 in Fiscal Year 2019-20 and $640,000 in Fiscal Year 2020-21 for design and construction services. In order to fully fund the Higuera Street Sidewalk Repair project, staff proposes to utilize the portions of the 2019-20 budget from the Broad Street project to fully fund the sidewalk replacement. Any remaining funds will be returned to the Broad Street project. Staff recommends this alternative as the Higuera Street Sidewalk project is fully designed and ready for advertisement. Design for the Broad Street project has not yet begun. However, by proceeding with this funding plan, there is a potential that the Broad Street project will have insufficient funds for construction in Fiscal Year 2020-21 and supplemental funding will need to be allocated at that time or the scope of the Broad Street work will need to be reduced. ALTERNATIVES Deny advertising the Project. The City Council could choose to postpone the project. Staff does not recommend this alternative. Further delay of replacement could lead to failure of the sidewalk, with impacts to the businesses at that sidewalk area coupled with limited pedestrian access along Higuera Street. Emergency repair work would cost substantially more than addressing the repair work now. Item 8 Packet Page 41 Direct Staff to issue a Notice of Correction to Property Owner: Council could make the determination this work is best completed by the property owner and require that this sidewalk be maintained by the property owner in compliance with City Municipal Code Section 12.16.020 Property Owners Responsibility and the State Streets and Highways Code. Section 12.16.020 of the Municipal Code references the State of California’s Streets and Highway Code that indicates the adjacent property owner of public sidewalk is required to maintain and replace this sidewalk. To implement this requirement, the City would notice the property owner of the required repairs. Within two weeks of the Notice of Correction being furnished to the Property Owner, the Property Owner is required to start the sidewalk replacement work and pursue diligently until complete. If the Property Owner fails to start this work within two weeks, the Ci ty could then complete the necessary work. Upon completion of this work, the final cost of the work would be presented to City Council in a Public Hearing in which City Council would make the final determination on whether to lien the property to eventually obtain reimbursement for this cost. This process does not preclude any cost sharing between the property owner and the City and does not preclude Council from approving the project and authorizing advertisement for bids as recommended by staff. Attachments: a - Vicinity Map b - COUNCIL READING FILE - Plans & Special Provisions c - Notice Letter dated September 30, 2019 Item 8 Packet Page 42 Item 8Packet Page 43 City of San Luis Obispo, Public Works, 919 Palm Street, San Luis Obispo, CA, 93401-3218, 805.781.7200, slocity.org   September 30, 2019 Lana Johns 2333 Sunrise Drive Bishop, CA 93514 Subject: Sidewalk Repair – 858-860 Higuera Street Ms. Johns, This letter is in regard to the sidewalk in front of your property in San Luis Obispo, 858-860 Higuera Street. In our last conversation, on August 28, 2019, I updated you that the City had completed a construction cost estimate which clearly indicated that the project was underfunded and could not continue under staff’s authority and that we had concerns about the lack of owner financial participation in the project. Due to the increased cost of the sidewalk repair project, we must go back to the City Council to request additional funding and obtain approval to advertise the project. At this time, the City is concerned about the high cost of the repair work which directly benefits your property. Further, the City of San Luis Obispo’s Municipal Code identifies the curb, gutter and sidewalk in front of your property as being the maintenance responsibility of the property owner. 12.16.020 Property owner’s responsibility – City Municipal Code The maintenance, repair and collection of the cost of repair shall be governed by the procedure set forth in Division 7, Part 3, Chapter 22 of the Streets and Highways Code of the state. (Prior code § 7330.1) Related, appropriate sections of the Streets and Highway Code which support the cost of repair relationship to the property owner are included as an attachment to this letter. While this is not a notice for correction, the City offers you the opportunity to participate in a cost sharing of this construction work. This project not only provides safer access and benefits to the businesses on your property but it also benefits the community. I am available to discuss with you some proportional cost sharing for this project. Related to our discussion, in an effort to potentially decrease costs, the City requests that there be greater access to the basement of your property during construction (a construction access agreement). As the only access to the basement area is through LuLu Luxe, it will be very difficult, if not impossible, for the Contractor to access this way only once, until an access Item 8 Packet Page 44 opening is created through the sidewalk. All safeguards will be implemented to protect Lulu Luxe and the store contents during any access by the Contractor and its personnel. These measures will be specified in the construction documents for the Contractor to adhere to, and the Contractor will be obligated to pay for any and all damages that are incurred during access. In order to complete this project quickly, staff would like to present this project with a cost sharing arrangement between us to the City Council on November 19, 2019. The City requests that you provide a response as soon as possible so that we may keep the project moving forward. If you have any questions, please contact Matt Horn at 805-781-7191. Sincerely, Mike McGuire Senior Engineer Matt Horn City Engineer Item 8 Packet Page 45 Page intentionally left blank. Item 8 Packet Page 46 Department Name: Public Works Cost Center: 5001 For Agenda of: November 19, 2019 Placement: Consent Estimated Time: N/A FROM: Shelly Stanwyck, Assistant City Manager Community Services Prepared By: Michael J. McGuire, Senior Civil Engineer SUBJECT: MARSH STREET BRIDGE REPLACEMENT EASEMENTS, SPECIFICATION NO. 90480 RECOMMENDATION 1. Authorize the City Manager to execute an extension agreement with 1042 Pacific Street, a California General Partnership, for a temporary construction easement at 1042 Pacific Street; and 2. Authorize the City Manager to execute an extension agreement with Charles Zanoli, Surviving Trustee, for a temporary construction easement at 1043 Marsh St.; and 3. Authorize the City Manager to execute an extension agreement with the Maino Family Trusts for temporary construction easements at 1020 & 1080 Marsh St. DISCUSSION Background The Marsh Street Bridge, located near the intersection of Marsh and Santa Rosa Streets, was approved by the City Council in January 2013 for removal and replacement. This followed a determination by the California Department of Transportation (Caltrans) that the bridge, built in 1909, is structurally deficient. The City also contracted with Dokken Engineering to conduct a bridge assessment to evaluate that determination. This assessment concluded that a complete replacement of the existing bridge was the most prudent and cost-effective alternative given the age of the structure. Dokken Engineering began the design process for a replacement bridge at the start of 2013 and has proceeded with development of the plans, specifications and construction cost estimate for the bridge, which are nearly complete. Dokken has also nearly completed the environmental permitting process, along with the City Council adoption of the Final Environmental Impact Report (FEIR) for the Marsh Street Bridge Replacement project on May 2, 2017. Item 9 Packet Page 47 Temporary Construction Easements One of the most critical components for the Marsh Street Bridge Replacement project is obtaining the Temporary Construction Easements (TCEs) from the property owners adjacent to the bridge. The TCEs are necessary for equipment access to San Luis Obispo Creek to conduct construction activities within the creek as well as to provide a staging and equipment area for the bridge contractor and provide vehicular and emergency access for a medical services business adjacent to the bridge. There are also permanent easements necessary from two of the adjacent property owners for construction of a wing wall for the bridge. The TCEs and permanent easements were required for obtaining clearance from Caltrans to enter the construction phase and were obtained on April 18, 2019. Completion of this phase resulted in the release of the Highway Bridge Program (HBP) grant funds for construction and will allow advertising the project for construction bidding, with the award of the project to a responsive and responsible bridge contractor and provide for construction of the bridge. The construction of the Marsh Street Bridge is anticipated to start in Spring 2020. The City Council authorized TCE agreements with the property owners on August 21, 2018 and these agreements were fully enacted in November 2018. These agreements were in effect for 12 - months, as construction was anticipated to start in March of this year (2019). Due to delays in obtaining clearance to proceed with the construction phase and the brief federal government shutdown, construction could not start and with this timing change the City is now required to obtain 12 to 14-month extensions of the TCE’s so that construction can begin in 2020. The Four Properties Requiring Temporary Construction Easement Extensions As previously conveyed to Council, there are four parcels of property adjacent to the Marsh Street Bridge that require TCEs in order for the replacement project to go forward. Hamner Jewell & Associates, one of the City’s on-call consultants for right of way acquisition, has researched the parcels based on fair market values, conferred and negotiated with the owners (with approval by the City Council to make the offers on January 9, 2018) and prepared agreements for the easement acquisitions. All easement acquisitions are based on negotiations with the owners and valued for the temporary use of the property by the City, loss of use by the owner and special considerations mentioned below. Also, the offers take into account the duration of the TCE, which went into effect when Caltrans certified the right of way acquisitions and extend to an additional two months beyond the anticipated construction time. The TCEs extensions are for a 12 to 14-month period. The property at 1042 Pacific Street, a commercial office building with multiple tenants, requires a temporary easement through the property’s parking lot to provide patient and emergency vehicle access to the DaVita Dialysis Center. The negotiated agreement with the owners is $9,800 (Attachment A). Item 9 Packet Page 48 1043 Marsh Street, site of the DaVita Dialysis Center, will lose the entrance/exit to their parking lot for the duration of construction. Given the critical nature of the services provided by DaVita to the community, access to the Center is a top priority during construction. Also, construction activities will be closely monitored to have little or no impact to the day -to-day operations of the Center. The negotiated agreement with the owner for loss of use of entrance and parking stalls, occasional utility shutdowns and property restoration is $9,200 (Attachment B). Two properties, 1020 & 1080 Marsh Street, are owned by several family trusts. These properties require TCEs for accessibility to the creek bed and the area of construction work. The negotiated extension agreement for 1020 Marsh Street and 1080 Marsh Street is $127,000 (Attachment C). The offer for 1080 Marsh Street also includes the loss of 20 leased parking stalls and the replacement of the parking lot after construction is completed. Previous Council Action On September 17, 2019, the City Council approved staff to advertise the project for construction bids and authorized the City Manager to award a construction contract to the lowest responsible bidder. On July 16, 2019, the City Council approved a Request for Proposals and authorized staff to advertise for Construction Management Services for the project. On October 16, 2018, the City Council appropriated an additional $1,406,160 in grant funding to match the total project amount allocated by Caltrans. On August 21, 2018, the City Council approved the Temporary Construction and Permanent Easement Agreements with the property owners adjacent to the Marsh Street Bridge. On January 9, 2018, the City Council, in closed session, authorized staff to enter into property acquisition negotiations with the properties adjacent to the Marsh Street Bridge. On May 2, 2017, the City Council approved adoption of the Final Environmental Impact Report. On January 22, 2013, the City Council approved the replacement of the Marsh Street Bridge. Policy Context As the original easements were approved by the City Council, and the bridge replacement continues to be a high City priority, staff requests the Council approve the easement extensions so that construction can start in 2020. Public Engagement The bridge replacement was identified and included in the 2015-17 Financial Plan and identified as a Council Goal. Item 9 Packet Page 49 CONCURRENCE The extensions have the concurrence of the trustees and owners of the four properties involved in the right of way acquisition activities. ENVIRONMENTAL REVIEW The City Council approved adoption of the Final Environmental Impact Report (FEIR) on May 2, 2017. In addition to National Environmental Policy Act (NEPA) approval with the FEIR, environmental permitting should be completed by December 2019 with the Department of Fish & Wildlife, the Regional Water Quality Control Board, the Army Corps of Engineers and the State Historic Preservation Office. FISCAL IMPACT Budgeted: Yes Budget Year: 2019-20 Funding Identified: Yes Fiscal Analysis: Property Address Easement Acquisition 1042 Pacific Street $9,800 1043 Marsh Street $9,200 1020/1080 Marsh St. $127,000 TOTAL $146,000 The project was approved as part of the 2015-17 Financial Plan. Currently, there is $6,336,050 available in the project budget, which is sufficient to fully fund the total costs of right of way acquisitions and consultant fees and does not impact the anticipated costs for the construction phase. This project is 89% funded by the HBP grant funding with a 11% City Local Revenue Measure match. The TCEs have been agreed to, but not yet funded; as described above, this would fund the TCEs as proposed to be extended. ALTERNATIVE Deny executing the contracts. The City Council could choose to not authorize the extension easements. Staff does not recommend this alternative. The City would be unable to proceed with the construction phase. Construction would be delayed until 2021 and the acquisition of easements would most likely need to be renegotiated with increased cost amounts, along with increased appraisal and consultant fees. Item 9 Packet Page 50 Attachments: a - COUNCIL READING FILE - Agreement with 1042 Pacific Street b - COUNCIL READING FILE - Agreement with Charles Zanoli for 1043 Marsh Street c - COUNCIL READING FILE - Agreement with Maino Properties for 1020 & 1080 Marsh Street Item 9 Packet Page 51 Page intentionally left blank. Item 9 Packet Page 52 Department Name: Utilities Cost Center: 6101 For Agenda of: November 19, 2019 Placement: Consent Estimated Time: N/A FROM: Aaron Floyd, Utilities Director Prepared By: David Hix, Deputy Director, Utilities – Wastewater Jennifer Thompson, Utilities Business Manager SUBJECT: ADOPT A RESOLUTION FOR INTEGRATED REGIONAL WATER MANAGEMENT (IRWM) GRANT FUNDING FOR THE WATER RESOURCE RECOVERY FACILITY RECOMMENDATION Adopt a resolution (Attachment A) to submit a grant application and accept a grant award of $1,314,530 from the San Luis Obispo County Flood Control and Water Conservation District for the construction of the Membrane Bioreactor and Ultraviolet Disinfection processes for the Water Resource Recovery Facility project. DISCUSSION In 2012, the City of San Luis Obispo approved the San Luis Obispo County Region Integrated Regional Water Management Program Participants Memorandum of Understanding that outlined the structure for water planning for San Luis Obispo County. In November of 2014, Proposition 1 was approved by the voters of California which made available $510 million in funding for Integrated Regional Water Management (IRWM). On June 5, 2019, the San Luis Obispo County IRWM program selected the City’s project, along with four other regional projects, to recommend funding through Proposition 1’s implementation grant program administered by the California State Department of Water Resources. The City’s request is to fund a portion of the Membrane Bioreactor (MBR) and Ultraviolet (UV) Disinfection processes for the Water Resource Recovery Facility (WRRF) project. Referred by the project name for the grant “One Water SLO”, these components of the WRRF project will increase the quantity and quality of the recycled water, provide the City with increased water resiliency, and enhance the habitat downstream of the WRRF. On September 23, 2019, the City presented its project to the State Department of Water Resources representatives who recommended One Water SLO and four other County projec ts submit an application for funding. The County IRWM will be submitting an application for funding the City’s project in the amount of $1,314,530. This request is authorization to submit the application for funding of the City’s One Water SLO project and for funding the City’s proportionate share ($15,000) of the County IRWM’s consultant to develop the grant application. Item 10 Packet Page 53 Policy Context The WRRF project upgrade involves several processes to ensure compliance with the City’s stringent requirements for treated wastewater discharge. The project will also increase capacity that aligns with the City’s General Plan and maximize recycled water production. Pursuing grant funding is consistent with the WRRF project’s funding strategy. Public Engagement Public outreach and engagement for the WRRF project and grant funding opportunities began at the first steps of this project. The WRRF project continues engagement activities through the project website http://slowrrfproject.org, updates in the Utilities Department Resource newsletter, tours, presentations, and other events. ENVIRONMENTAL REVIEW The Environmental Impact Report (EIR) for the WRRF Project was certified by Council on August 16, 2016. FISCAL IMPACT Budgeted: Yes Budget Year: 2019-20 Funding Identified: Yes Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost Sewer Fund $15,000 State Federal Fees Other: Total $15,000 There is adequate funding in the WRRF Project program budget already approved by Council to support the City’s share of consultant services. The City’s proportional cost share for consultant services to support the County IRWM’s submittal of the grant proposal has been estimated to be an amount not to exceed $15,000. Accepting this grant will reduce the overall costs of the WRRF project design. Item 10 Packet Page 54 ALTERNATIVES Deny adoption of the resolution. Council may decide to not adopt the resolution. Staff does not recommend this option as the City has been recommended by IRWM for the grant funding. Accepting this grant will reduce WRRF construction costs and is consistent with the project’s funding strategy. Attachments: a - Draft Resolution Accepting a Grant from IRWM Item 10 Packet Page 55 R ______ RESOLUTION NO. _____ (2019 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, ACCEPTING A GRANT FROM THE SAN LUIS OBISPO COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT WHEREAS, the City participates in the Integrated Regional Water Management (IRWM) Program and Regional Water Management Group; and WHEREAS, the City Council approved the “San Luis Obispo County Region Integrated Regional Water Management Program Participants Memorandum of Understanding” outlining the governance structure for the integrated water management planning efforts for San Luis Obispo County and the Mayor executed the Memorandum in November 2012; and WHEREAS, on November 4, 2014, California voters approved Proposition 1, the Water Quality, Supply, and Infrastructure Improvement Act of 2014. Proposition 1 authorized $510 million in Integrated Regional Water Management (IRWM) funding; and WHEREAS, the City is upgrading its Water Resources Recovery Facility to meet the requirements of its recently adopted National Pollutant Discharge Elimination System permit, maximize recycled water production, increase capacity, replace ageing infrastructure, and create a community asset; and WHEREAS, the City has prepared a design, completed bidding and will construct Membrane Bioreactor and Ultraviolet Disinfection processes for the Water Resources Recovery Facility project; and WHEREAS, the City, through the IRWM, was recommended to apply for a Proposition 1 implementation grant to fund portions of the Membrane Bioreactor and Ultraviolet Disinfection Component of the Water Resources Recovery Facility, referred to as the “One Water SLO”, project; and WHEREAS, the City’s One Water SLO project, and four other County projects, were recommended for Proposition 1 implementation grant funding; and WHEREAS, the San Luis Obispo County Flood Control and Water Conservation District is the lead agency responsible for the IRWM program and for the administration of agreements necessary to receive State funding; and WHEREAS, the City wishes to submit an application and accept the grant funding for the One Water SLO project in the amount of $1,314,530.00 Item 10 Packet Page 56 Resolution No. _____ (2019 Series) Page 2 R ______ NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. That the City is authorized to submit an application to the California Department of Water Resources to obtain a Round 1 Integrated Regional Water Management Implementation Grant pursuant to the Water Quality, Supply, and Infrastructure Improvement Act of 2014 (Water Code § 79700 et seq.); and SECTION 2. That, if awarded, the City Manager is authorized to enter into an agreement to receive a grant for the One Water SLO project; and SECTION 3. The Director of Utilities, or designee, is hereby authorized and designated to prepare the necessary data, conduct investigations, file such proposal, and execute a grant agreement with California Department of Water Resources and any other documents necessary to implement the City’s application for and award of the grant funding; and SECTION 4. The Director of Utilities, or designee, is hereby authorized and designated to represent the City of San Luis Obispo in carrying out City of San Luis Obispo's responsibilities under the funding agreement, including certifying invoices and disbursement requests for Project costs on behalf of City of San Luis Obispo and compliance with applicable state and federal laws. Item 10 Packet Page 57 Resolution No. _____ (2019 Series) Page 3 R ______ SECTION 5. Any and all actions, whether previously or subsequently taken by City of San Luis Obispo, which are consistent with the intent and purposes of the foregoing resolution, shall be, and hereby are, in all respects, ratified, approved and confirmed. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2019. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this __________ day of _____________________, ___________. ____________________________________ Teresa Purrington City Clerk Item 10 Packet Page 58 Department Name: Public Works Cost Center: 5201 (Transit) For Agenda of: November 19, 2019 Placement: Consent Estimated Time: N/A FROM: Shelly Stanwyck, Assistant City Manager & Interim Public Works Director Prepared By: Gamaliel Anguiano, Transit Manager SUBJECT: AUTHORIZE 2019 AIR POLLUTION CONTROL DISTRICT GRANT APPLICATION TO SUPPORT PROCUREMENT OF INFRASTRUCTURE NEEDED TO TRANSITION TO ZERO EMISSION TRANSIT VEHICLES RECOMMENDATION 1. Authorize the Public Works Director, or their designee, to execute and file grant applications with the Air Pollution Control District (APCD) for transit projects and to execute any related grant applications, certifications, assurances, forms, agreements, and associated documents on behalf of the City; and 2. Approve a Transit Budget Amendment to increase the budget reflecting these grant funds, if awarded. DISCUSSION Background On December 17, 2018 the California Air Resources Board adopted the Innovative Clean Transit (ICT) fleet rule. The ICT requires all public transit agencies to transition to a 100 percent zero- emission bus (ZEB) fleet by 2040. The City of San Luis Obispo is state mandated to have 25% of its transit vehicles be electric by 2026. Transitioning the City’s transit fleet to zero emission vehicles is consistent with the City’s adopted 2019-21 Major City Goal for Sustainable Transportation. Conventional wisdom is that transit facility infrastructure should precede any ZEB purchase and delivery and will need to commence well in advance of the ICT 2026 mandate. Several City initiatives are underway to address needed infrastructure upgrades necessary for the transition to electric transit vehicles. Pursuit of the subject grant application is part of that effort. If secured, this APCD grant will help fund the procurement of electric vehicle charging units (infrastructure for an electrified transit fleet). Initial quotes are approximately $80,000 per charge unit. The City’s Transit Program would like to procure three of these units; the total cost of $250,000 for the three units is reflected in the grant application. Item 11 Packet Page 59 The City’s Financial Management Manual Policy 740 requires that the City Council approve grant applications equal to or greater than $5,000. Council approval is therefore sought to approve staff’s application to the APCD to request $250,000 towards capital purchases with regard to electric transit vehicles charging units. Aiding in at least one part of the transition process and meeting the ICT mandate. Grant opportunities, in addition to this one, can augment City funds for the purposes described above vehicle electrification goals. Current and future opportunities will likely be available from the U.S. Department of Transportation, California Air Resources Board, and the San Luis Obispo County Air Pollution Control District. Currently, the Alt Fuel and EV Infrastructure Program overseen by the San Luis Obispo County Air Pollution Control District (APCD) could also help support important EV charging infrastructure for zero emission transit vehicles. Each grant has a specific purpose and will help the Transit program address various parts needed to meet the ICT mandate. Pursuing these discretionary grants will be critical as there are no other identified funding sources to aid the Transit program in meeting the ICT mandate. The submittal of grant applications to support EV charging infrastructure and conversion to zero emission transit vehicles meets the City’s Grant Management Policy outlined in Section 740 because there is an opportunity to significantly leverage City funds on balance with only modest staff time required to prepare the grant application; the proposed grant would result in priority work efforts being implemented; and, all grant administration, tracking, and reporting will be conducted in accordance with applicable City policy and any requirements specified in an awarded grant contract. Policy Context The recommended action to apply for grant funding resources in support of transit electrification will assist the City in ensuring compliance with the California Air Resources Board’s adopted Innovative Clean Transit (ICT) fleet rule. Transitioning the City’s transit fleet to zero emission vehicles is also consistent with the City’s adopted 2019-21 Major City Goals for Sustainable Transportation and Climate Action. Public Engagement The City’s adopted 2019-21 Major City Goal for Sustainable Transportation is reflective of the substantial public engagement process that was undertaken as part of the 2019-21 Financial Plan including online surveys, public meetings, and the Goal Setting workshop. CONCURRENCES The Sustainability Manager concurs with submitting grant applications in support of the City’s efforts to accomplish the objectives stated herein. Item 11 Packet Page 60 ENVIRONMENTAL REVIEW The California Environmental Quality Act (CEQA) does not apply to the recommended action in this report, because the action of submitting grant applications and proposals does not constitute a “Project” under CEQA Guidelines Sec. 15378. If successful, any City projects using grant funding would undergo all applicable reviews under CEQA and would be conducted in a manner consistent with adopted City plans. FISCAL IMPACT Budgeted: Yes Budget Year: 2019-20 Funding Identified: Yes Fiscal Analysis: Funding Sources Current FY Cost Annualized On-going Cost Total Project Cost Transit Fund $0 $5,000 $5,000 State $0 $0 $0 Federal $0 $0 $0 Fees $0 $0 $0 Other: APCD $250,000 $0 $250,000 Total $250,000 $5,000 $255,000 There is no impact on the City’s General Fund as a result of applying or receiving these grant funds because this falls under the Transit Fund. If awarded these funds will supplement the Transit Enterprise fund in achieving a capital project needed to support electric vehicles. This infrastructure project, at this time, has no other identified funding source beyond limited federal 5307 funding and their local match requirements. As stated previously, there are several low to no-cost initiatives underway to address needed infrastructure upgrades necessary for the transition to electric transit vehicles. This grant is just a part of several electric fleet readiness efforts. Other grants and agreements are also being researched and prepared for Council’s consideration, in the near future, t o support construction and installation costs. Some nominal ongoing costs are to be expected and can be accommodated within the Transit Program’s operating budget. These costs are largely tied to annual maintenance of the equipment (i.e. cleaning out filters). These costs are approximate $5,000 for the three chargers there on. Funds to support this will largely come from the savings achieved as a result from less purchase of diesel fuel. The City’s Public Works Department has time allocated within its normal work program to prepare and submit grant applications. If successful, these grant facilities and other public-private agreements, will significantly leverage and augment the City’s funds budgeted for this purpose in the City’s Transit Fund. Exact project and maintenance costs, however, are not yet known. Item 11 Packet Page 61 ALTERNATIVES 1. The City Council could request additional information or analysis from staff. 2. The City Council could deny the request to submit grant applications. Item 11 Packet Page 62 Department Name: Administration & IT Cost Center: 1021 For Agenda of: November 19, 2019 Placement: Consent Estimated Time: N/A FROM: Greg Hermann, Deputy City Manager Prepared By: Teresa Purrington, City Clerk and Brian Nelson, Senior Civil Engineer SUBJECT: COUNCIL CHAMBER AUDIO/VIDEO REPLACEMENT PROJECT, SPECIFICATION NO. 100120 RECOMMENDATION Increase the amount the City Manager is authorized to award from $200,000 to $230,000 for a contract if the lowest responsible bid is within the approved project budget of $230,000 from the City’s Share of the Public, Educational, and Government (PEG) funds. DISCUSSION Background The City maintains an audio-visual system in the Council Chamber to broadcast public meetings on television and online through the City’s website. This is a valuable service to the public and upgrading the equipment will further enhance overall ease of access by increased video and audio quality and new tools for efficiently viewing individual portions of meetings. The current equipment was installed in 2012 and the expected lifespan was 5 to 7 years. Today, at the end of 2019, the system is unreliable, and it is extremely hard to obtain replacement parts. Furthermore, technology has changed since the current equipment was installed in 2012. In order to improve customer service to our residents, an upgrade of the equipment in the Council Chambers is recommended. On September 17, 2019 the City Council authorized inviting bids for the Council Chamber Audio/Video Replacement Project, Specification Number 100120. Two bids were received and opened on October 24, 2019. Both bids were rejected as nonresponsive as each did not comply with the bidding instruction and City Standard requirements for bid responsiveness. Staff is requesting to increase the total amount of the project to $230,000 and increase the amount the City Manager is authorized to award to the same amount of $230,000. The reason for the requested increase in the budget is due to the tight construction timeline, the need to expedite the project and based on the bids received and rejected as nonresponsive our estimate for the project was low. Item 12 Packet Page 63 Previous Council or Advisory Body Action This project was added to the City Council approved 2019-21 Financial Plan, Capital Improvement Plan on September 17, 2019. Policy Context Funding for Public, Educational and Government (PEG) programming comes from a fee levied against the local cable company, as permitted by the Digital Infrastructure and Video Competition Act of 2006 and by the City’s Municipal Code (SLOMC 5.72.010.) One of the eligible uses of these funds is for the purchase and maintenance of broadcasting equipment in the Council Chamber. The City currently broadcasts City Council and Planning Commission meetings along with other City-related programming on Charter Cable Channel 20 (CATV) and through the City’s website. Public Engagement The original Request for Bid was published in the New Times and available on the City’s website for a three-week period. The rebid project will be published in the New Times and be available on the City’s website for a 14-day period. No additional public engagement was done. The public may comment on the item in writing prior to the City Council meeting or during public comment at the meeting. CONCURRENCE The Public Works Department and Information and Technology Division concurs with the recommendations in this report. ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: No Budget Year: Funding Identified: Yes Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund State Federal Fees Other PEG funds: $230,139 $230,000 $139 $5,000 Total $230,139 $230,000 $139 $5,000 Item 12 Packet Page 64 There is no fiscal impact to the General Fund for this project. It will be funded from existing PEG funds which can only be used for the acquisition and maintenance of equipment and facilities directly related to providing PEG services (Channel 20 Broadcast.). There are presently no other proposed uses for these funds. The City currently has $230,139 in the Government portion of the PEG fund account (712.0000.21008.) The estimated total project cost is $230,000, leaving a remaining balance in the account of $139. The City receives approximately $9,000 per quarter, or $36,000 a year, in new government PEG funds. ALTERNATIVES Deny the request to increase the amount the City Manager is authorized to award. This is not recommended as further delaying the replacement of the audio/video equipment will result in further degradation of the equipment and could prevent the City from being able to televise and live stream City Council and Planning Commission meetings. Item 12 Packet Page 65 Page intentionally left blank. Item 12 Packet Page 66 Department Name: Community Development Cost Center: 4003 For Agenda of: November 19, 2019 Placement: Public Hearing Estimated Time: 60 minutes FROM: Michael Codron, Community Development Director Prepared By: Shawna Scott, Senior Planner Dave Watson, Contract Planner SUBJECT: REVIEW OF THE PROPOSED ANNEXATION OF APPROXIMATELY 39 ACRES OF PROPERTY (30 PARCELS) ALONG FIERO LANE AND CLARION COURT AND ASSOCIATED INFRASTRUCTURE IMPROVEMENTS, INCLUDING APPROVAL OF THE SECOND AMENDMENT TO THE MEMORANDUM OF AGREEMENT REGARDING THE PROPOSED ANNEXATION, AND ADOPTION OF AN INITIAL STUDY/MITIGATED NEGATIVE DECLARATION TIERED FROM THE FINAL PROGRAM ENVIRONMENTAL IMPACT REPORT FOR THE AIRPORT AREA AND MARGARITA AREA SPECIFIC PLANS AND RELATED FACILITIES MASTER PLANS (SCH#2000051062) (PL-ANNX- 1166-2015; EID-0626-2019) RECOMMENDATION As recommended by the Planning Commission, adopt the Draft Resolution (Attachment A) to: 1. Approve and authorize the Mayor to execute the Second Amendment to the Memorandum of Agreement for the Annexation of the Fiero Lane/Clarion Court area, which incorporates conditions of annexation as recommended by the Planning Commission (Attachment A, Exhibit A); and 2. Approve the filing of an application and request for San Luis Obispo Local Agency Formation Commission (LAFCo) to initiate proceedings for annexation of the Fiero Lane- Clarion Court area; and 3. Direct the Community Development Director to process the application; and 4. Authorize the City Manager to execute any documents in a form approved by the City Attorney related to the annexation of the subject lands to the City of San Luis Obispo; and 5. Authorize the City Manager to initiate tax negotiations with the County of San Luis Obispo; and 6. Adopt the associated Initial Study / Mitigated Negative Declaration for the annexation, which tiers off the certified Final Environmental Impact Report for the Airport Area and Margarita Area Specific Plans and Related Facilities Master Plans (SCH# 2000051062). Item 13 Packet Page 67 REPORT-IN-BRIEF The Fiero Lane-Clarion Court annexation, proposed by the Fiero Lane Water Company (FLWC), includes 30 parcels and 38.97 acres of land located within the Airport Area Specific Plan (AASP) (Attachment A, Exhibit A, Annexation Map; and Attachment B, Detail Map and Legal Description). The subject area has long been identified as an annexation area, pursuant to the City Council’s adoption of the AASP on August 23, 20051 and Ordinance No. 1481,2 which established pre-zoning within the AASP, including the project area. The City’s General Plan3 and AASP4 (and associated Environmental Impact Reports and analyses5,6) have included the proposed annexation area when considering potential future growth and associated demands for public infrastructure and transportation improvements. As the proposed annexation is consistent with these documents, a tiered Initial Study/Mitigated Negative Declaration is proposed for Council adoption. This annexation area has historically received water and wastewater services via the FLWC, and is currently receiving City water service under an Outside User’s Agreement approved by the San Luis Obispo Local Agency Formation Commission (LAFCo), pursuant to a Memorandum of Agreement (MOA), Municipal Code amendment, and Addendum to the AASP Final EIR approved by the City Council in 2015. 7 These approvals were made in anticipation of having the FLWC work with City staff on the details of a future annexation. A one-year extension of the Outside User’s Agreement was approved by LAFCo in March 2019 following the City Council’s decision to amend the MOA8 to reflect an updated annexation schedule and infrastructure funding opportunity. For reference, both the 2015 and 2019 MOAs are included with Attachment C. The 2015 Plan For Services adopted for the 2015 MOA is included for reference as Attachment D. The Planning Commission considered the proposed annexation and associated Initial Study/Mitigated Negative Declaration (IS/MND) on October 9, 2019 and recommended the City Council authorize the annexation and adopt the environmental document. Minor clarifications have been added to the IS/MND to further mitigate identified construction-related impacts and expand upon the discussion regarding earlier analysis incorporated by reference from the Land Use and Circulation Element (LUCE) and AASP Final EIRs (Attachment E). The recommended Second Amendment to the MOA (Attachment A, Exhibit A) is provided to include additional conditions of approval as recommended by the Planning Commission, and to provide an updated 1 Council Agenda Report adopting the AASP: https://opengov.slocity.org/WebLink/DocView.aspx?id=31312&dbid=0&repo=CityClerk 2 Ordinance No. 1481: https://opengov.slocity.org/WebLink/DocView.aspx?id=50593&dbid=0&repo=CityClerk 3 Land Use Element Policy 1.13.5 Annexation in Airport Area; Policy 7.7 City Annexation and Services; Policy 7.14 Growth Management (see: http://www.slocity.org/home/showdocument?id=6635 ) 4 AASP Chapter 9.1 (see: http://www.slocity.org/home/showdocument?id=4294) 5 Land Use and Circulation Element Final EIR: https://www.slocity.org/government/department- directory/community-development/planning-zoning/general-plan 6 AASP and MASP Final EIR: https://www.slocity.org/government/department-directory/community- development/documents-online/environmental-review-documents/-folder-719 7 Council Agenda Report addressing the 2015 MOA and Outside User’s Agreement, including Addendum to AASP FEIR: https://opengov.slocity.org/WebLink/DocView.aspx?id=53305&dbid=0&repo=CityClerk 8 Council Agenda Report approving First Amendment to MOA in 2019: https://opengov.slocity.org/WebLink/DocView.aspx?id=91686&dbid=0&repo=CityClerk Item 13 Packet Page 68 schedule for annexation and associated infrastructure improvements (Attachment A, Exhibit A). Based on the evaluation presented in this report and recommended Second Amendment to the MOA, the proposed annexation would be consistent with the stated goals of the City’s General Plan, AASP, and long-term interest in bringing this area into the City. The planned public and private infrastructure improvements are consistent with the General Plan and AASP and are addressed in the certified Final EIRs for the LUCE and AASP, and the recommended IS/MND. Timing of improvements and financial contributions by the applicants/property owners are adequate to address a coordinated transition of the land from County control to the City. Following Council action, if authorized, the City will work with FLWC on an annexation application submittal to LAFCo. DISCUSSION Background The Fiero Lane-Clarion Court annexation area, proposed by the Fiero Lane Water Company (FLWC)9, includes 30 parcels and 38.97 acres of land located within the Airport Area Specific Plan (AASP) boundary, on the west side of Broad Street, east of Santa Fe Road (Attachment A, Exhibit A, Annexation Map; Attachment B, Detail Map and Legal Description; Figure 1. Fiero Lane-Clarion Court Proposed Annexation Area). The Fiero Lane-Clarion Court area is located within the City’s Sphere of Influence and adopted LAFCo Urban Service Area for the City. The area is developed with a mix of industrial, manufacturing, commercial, and office uses, with an estimated 500,124 square feet of total building area. 9 Representing the property owners within the proposed annexation boundary. Item 13 Packet Page 69 Figure 1. Fiero Lane-Clarion Court Proposed Annexation Area Summary of Previous Action by the City and LAFCO In December 2015, the City Council approved Resolution No. 10678 to adopt the 2015 MOA and associated Addendum to the Airport Area and Margarita Area Specific Plan Final EIR (Attachment C) that established a mutual understanding between the City and the FLWC to pursue a series of steps to ultimately annex these properties into the City. Part of this understanding included an agreement for the City to provide interim water and wastewater services to the properties pending completion of the annexation process 10. Adoption of the 2015 MOA was the culmination of extensive negotiations between the City and property owners over the manner in which annexation of this area could occur. Adoption of the 2015 MOA set the City on a course of pursuing annexation and established a mutual understanding of how the City would be reimbursed for costs incurred while processing the annexation, identification of what infrastructure would be granted to the City upon annexation, an analysis of the conditions of said infrastructure and various improvements to be completed to upgrade this infrastructure to City 10 Codified in City Municipal Code §13.16.020.E. Water and Sewer Service for Private Use Outside City Limits, Exceptions. Provision of interim water and/or sewer service to the Fiero Lane and Clarion Court annexation area, as set forth in the memorandum of agreement between the city of San Luis Obispo and Fiero Lane Water Company and adopted by city council Resolution No. 10678 (2015 Series). (Ord. 1627 § 2, 2015; Ord. 951 § 2, 1983) Item 13 Packet Page 70 standards11. Subsequent actions by LAFCo included approval of an Outside User’s Agreement between FLWC and the City to allow for the provision of City water and wastewater services on April 21, 2016, and approval of a two-year extension of the Outside User’s Agreement on April 6, 2017. During this time, FLWC and City explored financing options for paying fees and completing needed infrastructure associated with the pending annexation. This process led to several 2018 actions to implement a City-County Statewide Community Infrastructure Program (SCIP)12, a funding option for the Fiero Lane-Clarion Court property owners. Resolutions authorizing the SCIP program were adopted by the San Luis Obispo County Board of Supervisors (September 18, 2018) and City Council (November 13, 2018). Under the SCIP program, similar to assessment district financing, an engineer’s report will be prepared that will outline the costs of the needed improvements and City fees and allocate those costs to individual property owners. At that point the property owner may elect to pay their fair share of these costs or can take advantage of the SCIP process to issue bonds, and essentially finance their share of improvements. On March 19, 2019, the City Council approved the following actions: 1) a one-year extension to the 2015 MOA to extend interim water and wastewater services pending annexation of the Fiero Lane-Clarion Court area to the City; 2) First Amendment to the 2015 MOA, which included minor changes to the 2015 MOA to facilitate the extension, update schedule tasks, and clarify payment of water and wastewater impact fees; and 3) authorized the Community Development and Utilities Directors to adjust the MOA schedule to allow for financing and planning for infrastructure. Following Council action, LAFCo approved a one-year extension of the Outside User’s Agreement (set to expire March 2020). Planning Commission Review and Recommendation On October 9, 2019 the Planning Commission conducted a public hearing to consider the proposed annexation and associated Initial Study/Mitigated Negative Declaration and provide a recommendation to the City Council. The Planning Commission’s review included consideration of the 2015 MOA, the First Amendment to the MOA (extending interim water and sewer service to March 2020), the proposed Plan For Services for the annexation, as well as the progress made in identifying public infrastructure and private improvements necessary to accommodate the annexation of the Fiero area and provision of public services to the area. The Planning Commission also considered the IS/MND prepared for the proposed annexation. Commission discussion included a review of annexation-specific conditions for infrastructure under the MOA and Plan For Services, discussion of roadways and associated improvements, discussion of various environmental questions regarding land uses permitted under the County and how those would transition into City lands, water and wastewater availability for the annexation area, and mitigation measures recommended by staff that were reflective of earlier environmental work on the annexation (refer to additional discussion under Environmental 11 Refer to Council Agenda Report dated December 1, 2015 for additional background information and Addendum: https://opengov.slocity.org/WebLink/DocView.aspx?id=53305&dbid=0&repo=CityClerk 12 For general information about SCIP, see here: http://cscda.org/Infrastructure-Finance-Programs/Statewide- Community-Infrastructure-Program-(SCIP) Item 13 Packet Page 71 Review for more detail). The Planning Commission voted 4-0-3 recommending the City Council: 1) approve the filing of an application for annexation of the Fiero Lane-Clarion Court area and direct the Community Development Director to process the application with LAFC o, 2) authorize the City Manager to execute any documents in a form approved by the City Attorney related to the annexation of the subject lands to the City of San Luis Obispo, and 3) adopt the proposed Initial Study/Mitigated Negative Declaration (Attachment F, Planning Commission Minutes and Resolution). The conditions of approval recommended by the Planning Commission are incorporated into the Second Amendment to the MOA (Attachment A, Draft Resolution, Exhibit A). Based on further communications with FLWC and the City’s Transportation Division, a condition regarding establishment of City-controlled public right-of-way access to specified parcels within the annexation area has been modified for the Council’s consideration to allow for further negotiations between the City and FLWC, including an option for a City easement (Attachment A, Exhibit A, Infrastructure Improvements Item 1.c).13 Annexation Description The applicant is proposing annexation that will result in the continuance of existing uses and future development patterns that reflect manufacturing, business park, offices and construction services. As summarized above, the Fiero Lane-Clarion Court annexation area is receiving City water service. FLWC provides wastewater service to this area (as well as the nearby East Airport Commerce Park (EACP) – east of Broad Street between Farmhouse Lane, Kendall Road and Prospect Street) via a small private treatment plant within the service area. Upon annexation of the Fiero Lane-Clarion Court area to the City, water and wastewater services would be converted to connect to City utility systems. In the case of the FLWC wastewater treatment plant serving the EACP, this plant would need to be moved to the EACP area to continue to provide service to the EACP pending their annexation to the City. An application to annex the EACP area is currently under staff review at this time and is anticipated to be considered by the City Council early 2020. Staff anticipates that the EACP annexation and conversion to City services can be completed concurrently, eliminating the need to relocate the private treatment plant. The FLWC annexation has been planned to cover either circumstance (relocation and continued private treatment for EACP – or concurrent conversion to City treatment system) depending on the ultimate timing of the EACP annexation. Additionally, recycled water supply will also become available to the FLWC area following annexation. Public Facility Financing and Development Impact Fees As detailed in the Memorandums of Agreement (Attachment C) and as noted in the “Plan For Services” for the annexation area (Attachment D), annexation of the subject properties will trigger the need for various capital investments in the existing private systems that will be made public under the terms of the annexation. To complete these improvements, a financing mechanism has been proposed by the property owners/applicants that will allow capital improvements to be engineered, constructed and paid for through the SCIP. This financing program will allow plans to be developed, bids to be secured, and then property owners will have the option of paying their fair share of construction costs upfront or elect to finance the improvements in an approach very similar to assessment district financing. This financing program has been supported by Council actions on the Fiero planning effort and are appropriate for this use. The SCIP program also allows development impact fee contributions negotiated in 13 Proposed changes are shown in strikeout and italics/underline. Item 13 Packet Page 72 the MOAs to be paid or financed in this fashion. Water Demands and Wastewater Generation from the Proposed Annexation Because of the partially developed nature of the annexation area, information is readily available to use in identifying current demands and can be used to project buildout demands for each service to ensure City resources are readily available to support the annexation areas. Current and projected water and wastewater needs are summarized in Table 1 (Annexation Area Water Demand and Wastewater Generation). Table 1. Annexation Area Water Demand and Wastewater Generation Acres Building Area (1) (2) Water Demand (1) Wastewater Generated (1) 2018 Water Availability (3)(4) Wastewater Capacity (3) Developed Parcels 36.47 ac 500,124 SF 19.00 AFY 15,000 gpd Undeveloped Parcels 2.50 ac 50,000 SF 1.90 AFY 1,500 gpd Totals 38.97 ac 550,124 SF 20.90 AFY 16,500 gpd 10,130 AF 5.4 mgd Notes: (1) 2015 Fiero Lane Annexation – EIR Addendum to Airport Area and Margarita Area Specific Plans (2) Potential building area, and water/wastewater estimates, increased by approximately 10% to account for remaining potential development (3) 2018 Water Resources Status Report14 (4) Water and Wastewater Element15 / mgd = million gallons per day Pursuant to the City’s 2018 Water and Wastewater Element, which addresses build -out under the City’s Land Use Element (including the subject annexation), and consultation with the City Utilities Department, existing and future water availability and sewer capacity is adequate to serve the annexation area. Update on Annexation Task List and Schedule from the MOA The First Amendment to the MOA (approved by the City Council in March 2019) included an update of the tasks completed toward annexation, identification of funding for future improvements through the SCIP, and an updated schedule that included target dates for completion of the annexation. That schedule, included as Section 9 of the MOA (refer to Attachment C), assumed that Council action on the annexation request would be completed by Summer of 2019, LAFCo action to approve the annexation would be completed by Fall 2019, engineering plans would be readied for construction over the Winter of 2019-2020, annexation of the property would occur just prior to the start of construction, and construction of the improvements would be completed by July 2020. The schedule incorporated into the Second Amendment to the MOA (Attachment A, Exhibit A) includes updates showing that the overall sequence of tasks remains the same, but the timeframe has been extended in part to allow for concurrent annexation with the EACP area and to accommodate the SCIP process. 14 2018 Water Resources Status Report available online: https://www.slocity.org/Home/ShowDocument?id=22442 15 Water & Wastewater Element (May 15, 2018), available online: https://www.slocity.org/home/showdocument?id=19965 Item 13 Packet Page 73 Recent discussions with the applicant’s representative indicate the Fiero-Clarion annexation area is readying its submittal of their application to the County and SCIP program for financing of the fees and infrastructure improvements required. Staff is advised that the SCIP funding should become available by April 2020, which would then allow final engineering plans to be prepared, and construction to follow. Under this timeframe, if funding is available by April 2020, the City is anticipated to move forward on the annexation and supervise the preparation of engineering plans and the construction process as a city project with the improvements’ completion by the end of 2020. The applicant will pay normal and customary permit fees to process permits necessary to implement public improvements as shown in the final engineering plans. It is anticipated that annexation of the Fiero-Clarion and EACP areas would occur concurrently, and under this concurrent process, the relocation of the wastewater treatment facility (and associated permitting and extra costs) would not be required. The annexation areas would be brought into the City’s wastewater collection, treatment and disposal system together, allowing for the decommissioning of a private wastewater plant immediately adjoining city limits. Aligning the Fiero-Clarion process with the EACP annexation could also allow coordination (and cost efficiencies) in the completion of infrastructure and the decommissioning of the private treatment plant. LAFCo staff have indicated they support this “merging” of the two annexation efforts, should it be possible, and will provide assistance to the City in working through the complexities of the annexation applications. Policy Context General Plan Policy Consistency The 2014 General Plan Land Use Element (LUE) established a number of community goals, policies and programs for annexation and development that relate to the proposed annexation area (refer to additional discussion below), including: • Airport Land Use Plan Consistency • Annexations and Growth Management • Airport Area Specific Plan Consistency • Financing of Fair-Share Infrastructure and Development Impacts Airport Land Use Plan Consistency. General Plan Chapter 7, Policy 7.7 provides that the subject annexation areas shall be actively pursued by the City provided the annexations are consistent with the Airport Area Specific Plan and LUE Policy 1.13.5 (Annexation in Airport Area). The proposed annexation is consistent with the standards for land uses, infrastructure and fair-share cost contributions of the AASP. The AASP has been determined to be consistent with the County’s Airport Land Use Plan (ALUP), and the uses that exist within the annexation areas were approved by the County under findings of consistency with the ALUP. As proposed, the annexations would result in a continuation of the previously permitted uses and any future uses would be subject to AASP standards, the City’s Zoning Regulations, and Community Design Guidelines. Item 13 Packet Page 74 Annexations and Growth Management. Noted LUE Policies include: 1.13.3. Annexation Purpose and Timing The City may use annexation as a growth management tool, both to enable appropriate urban development and to protect open space. Areas within the urban reserve line which are to be developed with urban uses should be annexed before urban development occurs. The City may annex an area long before such development is to occur, and the City may annex areas which are to remain permanently as open space. An area may be annexed in phases, consistent with the city-approved specific plan or development plan for the area. Phasing of annexation and development will reflect topography, needed capital facilities and funding, open space objectives, and existing and proposed land uses and roads. 1.13.5. Annexation in Airport Area Properties in the Airport Area Specific Plan may only be annexed if they meet the following criteria: A. The property is contiguous to the existing city limits; and B. The property is within the existing urban reserve line; and C. The property is located near to existing infrastructure; and D. Existing infrastructure capacity is available to serve the proposed development; and E. A development plan for the property belonging to the applicant(s) accompanies the application for annexation; and F. The applicant(s) agree to contribute to the cost of preparing the specific plan and constructing area-wide infrastructure improvements according to a cost - sharing plan maintained by the City. Following the adoption of the AASP, planning for the Fiero-Clarion annexation commenced. Since that time additional planning for the EACP annexation is underway. This simultaneous planning process results in a greater degree of coordination in bringing these annexation areas, which currently share independent private infrastructure in the County, into the City. In this case, the Fiero-Clarion annexation area satisfies all the prerequisites under GP LUE Policy 1.13.5 and is recommended for annexation. Airport Area Specific Plan Consistency. The AASP includes a series of goals, policies and programs to comprehensively guide development of the Planning Area. Additional guidelines and development standards are included in the AASP, as well as infrastructure requirements and a plan for implementation of the Plan. Overall goals of the AASP include: 1. Provide a framework to move from County developments primarily focused on heavier industrial and manufacturing uses to a blend of these established uses, both inside and outside the City, with new uses focused on lighter industrial and manufacturing uses, professional and business park developments and employment centers. 2. Plan for proposed development, including annexations within the Planning Area, so that public facilities are developed concurrently with new development in a rational and cost- effective fashion. 3. Protect and enhance natural resources within the AASP, including emphasis on Item 13 Packet Page 75 maintaining visual qualities of the surrounding hills and open space areas and protection of creek corridors, wetlands and habitat qualities. The uses that exist in the annexation areas are consistent with the uses anticipated by the City’s AASP, and the annexation does not include any changes to the pre-zoning previously approved by the City Council. As described herein and in the referenced attachments, the financial and infrastructure planning needed to bring these properties into the City have been completed. In and of itself the annexation of the subject properties will not change the built environment of the area. Any expansion or modification of existing uses will be subject to City development standards. Future planning and development would be managed under the AASP standards and would result in consistency as new projects are brought forward. Financing of Fair-Share Infrastructure and Development Impacts. General Plan Policies discussed previously focus on new development paying its fair share. The proposed annexation will be responsible under the adopted MOA for financing infrastructure and paying negotiated development impact fees and contributions to assist in addressing cumulative project impacts, such as traffic, pedestrian and bicycle paths. These contributions, whether paid up front or financed under the SCIP approach will ensure adequate contributions are received from the annexation areas. Plan For Services The proposed annexation area has been analyzed to identify their impact on overall City services. To document this analysis and the recommendations derived from that analysis, a Plan For Services has been developed and adopted in 2015 for the annexation area (Attachment D). A summary of that document is included below. Current Conditions – Fiero Lane-Clarion Court Annexation Area. Fiero Lane and Clarion Court provide vehicular access to the area. These roads do not intersect; each is a cul -de-sac dead end. Fiero Lane access comes from Broad Street and Clarion Court is accessed via Santa Fe Road; Clarion Court would remain a private road post-annexation. At this time the Santa Fe Bridge facility is not intended to be annexed. No improvements to the bridge are identified with this action. Domestic water is delivered by the City via the water distribution system from Broad Street along Aerovista Lane to the water holding tank near the center of the annexation area. Water is distributed from the tank via pressurized water lines installed with the original developments of the area. Wastewater is collected by both gravity and force main/lift stations and conveyed to a private treatment plant operated by the FLWC at the end of Fiero Lane. Treated wastewater is disposed of in a leach field system to the immediate south (and outside) the annexation area. Emergency services are provided by the County, but these areas are also supported by the City under mutual aid agreements between the City and County. General government services are provided by the County. Storm water management, collection and disposal is handled by the private property owners under County-approved plans. Solid waste services are provided by the County via private contract with local waste and recycling providers. Post-Annexation Conditions – Fiero Lane-Clarion Court Annexation Area. Roadway Item 13 Packet Page 76 rehabilitation and upgrades are planned to bring the roads, walkways and street signage up to City standards. Following annexation, the roads, curbs, gutters and sidewalks will be maintained by the City under the Pavement Management Plan. Water system upgrades for the annexation area will include some main line and hydrant replacements, water meter replacements, and valving and backflow prevention will be installed. The City will continue to provide water service post-annexation. Conversion of the Fiero Lane-Clarion Court area to the City’s wastewater system will occur following City installation of a gravity collection line along Fiero Lane that will serve to collect wastewater from the location of the existing Fiero Lane Water Company wastewater plant (at the end of Fiero Lane cul-de-sac). This new City line would convey wastewater by gravity to an existing wastewater main line in Broad Street, and from there is conveyed to the City’s Water Resource Recovery Facility (WRRF). Until such time as this conversion occurs, the private FLWC treatment plant and disposal system will continue to operate as currently constituted. Much of the existing collection system within the annexation area along Clarion Court will remain a private collection and conveyance system, ultimately sending wastewater to the City’s new gravity main at Fiero Lane noted above. A new lift station in the vicinity of the FLWC wastewater plant is also planned. Following the connections of the various properties in the Fiero Lane-Clarion Court Annexation Area, the wastewater plant will be decommissioned at this location (it is possible this plant would be moved to the East Airport Annexation Area to serve those users as noted earlier and briefly summarized below). Preferred Wastewater Alternative: The FLWC wastewater system will be converted to interconnect with a gravity collection line in Broad Street, and from there is conveyed to the City’s WRRF. The force main and lift station currently serving the area would be abandoned. The timing of this work is contingent on the decommissioning of the FLWC wastewater plant following the connections of the various properties in the Fiero Lane- Clarion Court Annexation Area. Interim Wastewater Alternative: If annexation of the East Airport Area is delayed, or improvements are not completed at the time of the FLWC wastewater plant decommissioning, it is possible this treatment plant would be moved to the East Airport Annexation Area to serve those users on an interim basis. In such a case treated wastewater would be stored and disposed as recycled water in the East Airport Area. Recycled water supplies are also included in the Plan For Services, with extensions made by the applicants within the annexation area, to facilitate connection to this supply when it can be made available. Police and Fire emergency services would be provided by the City. It is expected the mutual aid agreements would remain between the City and County. General government services would be assumed by the City. Storm water management and solid waste services would continue as they presently exist. Item 13 Packet Page 77 Public Engagement Consistent with the City’s Public Engagement and Noticing (PEN) Manual and the City’s Municipal Code, the project was noticed per the City’s notification requirements. Newspaper legal advertisements were posted in New Times ten days prior to each meeting (Planning Commission and City Council). Additionally, postcards were sent to both tenants and owners of properties located within 300 feet of the project site ten days before each advisory body hearing. Public comment was provided to the advisory bodies through written correspondence and through public testimony at each of the hearings. CONCURRENCE Staff comments provided during review of the proposed annexation are incorporated into the presented evaluations and Second Amendment to the MOA. ENVIRONMENTAL REVIEW Environmental analysis of the proposed annexation has been guided by previous work in the form of the Airport Area and Margarita Area Specific Plans Final EIR (2005), FEIR Addendum for the Airport Area and Margarita Area Specific Plans (2015), and the City of SLO General Plan Land Use and Circulation Elements (LUCE) FEIR (2014 ). An Initial Study of environmental impact was prepared to document whether there have been changed circumstances since the referenced EIRs were completed, to analyze consistency of the annexation with the General Plan and Airport Area Specific Plan (AASP ), and to identify any potentially necessary mitigation measures that should be applied to the annexation process, as well as the completion of needed infrastructure (new or rehabilitation) to support City services to the areas. The Notice of Intent to Adopt an IS/MND was filed with the San Luis Obispo County Clerk and was advertised in the New Times on September 19, 2019. The IS/MND was also submitted to the State Clearinghouse (received September 19, 2019). The 30-day public review period started on Friday September 20 and ended October 21, 2019. Following Planning Commission review, a letter was submitted by the SLO County Air Pollution Control District (APCD) on October 21, 2019 that elaborated on construction phase mitigation measures for the proposed annexation area. These mitigations included implementing dust control and idling emission limitations from construction vehicles to any construction projects in the annexation area. Staff has added these updated suggestions to the proposed mitigation measures and conditions of approval for the annexation as reflected in Attachment A, Exhibit A (Second Amendment to the MOA) and Attachment E (Initial Study/Mitigated Negative Declaration). In the case of the Fiero Lane-Clarion Court annexation, the 2015 and 2019 MOAs, as well as the 2015 Plan For Services, were relied on to identify the needed infrastructure that is incorporated into the Project Description for the annexation. The conclusion of the Initial Study completed for the proposed annexation is that by incorporating the needed infrastructure features of the MOA and Plan For Services, in addition to and as a direct result of the analysis of the noted EIRs, and implementation of mitigation measures identified in the Initial Study, the annexation and provision of infrastructure services to the area would result in a less than significant effect s on Item 13 Packet Page 78 the environment. Therefore, an Initial Study / Mitigated Negative Declaration is recommended for adoption in association with the proposed Fiero Lane-Clarion Court annexation (Attachment E). FISCAL IMPACT Budgeted: Yes Budget Year: 2019-2021 Funding Identified: Fee supported activity based on 100% cost recovery. Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cos General Fund N/A State Federal Fees Other: Total When the AASP was adopted, it was accompanied by a fiscal impact analysis, which found that annexation of the properties within the Airport Area Specific Plan (AASP) boundary would result in positive fiscal impacts for the City; approximately $750,000 net fiscal benefit annually at build- out. The proposed future annexation will help the City realize the positive fiscal impact indicated in the fiscal analysis, as anticipated by the AASP. One of the key and critical next steps is to negotiate a tax exchange agreement with the County of San Luis Obispo. Approval of a tax exchange agreement is a precedent requirement before LAFCo can finalize the proposed annexation. Because the proposed area is largely developed, the Master Tax Exchange Agreement provides that the City and the County will negotiate both existing and future tax revenues.16 These negotiations cannot commence until the City Council approves the filing of an application. ALTERNATIVES 1. Continue the item. An action to continue the item should include a detailed list of additional information or analysis needed to make a determination on the project. 2. Deny the proposed annexation based on findings of inconsistency with the AASP and/or General Plan. This action is not recommended because the analysis indicates the project is consistent with the General Plan and AASP, 2015 and 2019 MOAs, and because the Outside Users Agreement is set to expire in March 2020. 16 1996 Property Tax Exchange Agreement: For commercial and industrial annexation areas already substantially developed, tax exchange will be negotiated on a case-by-case basis between the annexing city and the County to determine an appropriate property tax sharing arrangement, based upon the principle of fiscal neutrality for the County . Item 13 Packet Page 79 Attachments: a - Draft Resolution b - COUNCIL READING FILE - Exhibit A to Resolution c - Detail Map and Legal Description d - COUNCIL READING FILE - 2015 and 2019 MOA e - Plan for Services f - Initial Study MND g - Planning Commission Minutes and Resolution Item 13 Packet Page 80 R _______ RESOLUTION NO. _______ (2019 Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, APPROVING APPLICATION FOR THE ANNEXATION OF THE FIERO LANE AND CLARION COURT PROPERTIES (FIERO LANE WATER COMPANY, FLWC) TO THE CITY OF SAN LUIS OBISPO AND THE ASSOCIATED SECOND AMENDMENT TO THE MEMORANDUM OF AGREEMENT, WITH ADOPTION OF AN INITIAL STUDY/MITIGATED NEGATIVE DECLARATION (MULTIPLE PROPERTIES, 850 FIERO LANE, PRIMARY; PL-ANNX-1166-2015, EID- 0626-2019) WHEREAS, on December 1, 2015 the City Council of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, for the purpose of considering a Memorandum of Agreement regarding the proposed annexation of property along Fiero Lane and Clarion Court and the provision of interim water and sewer service; and WHEREAS, on December 1, 2015 the City Council adopted Resolution No. 10678 approving a Memorandum of Agreement (MOA) to pursue annexation of the subject properties and to provide interim water and wastewater services to said area pending completion of the annexation process; and WHEREAS, on March 19, 2019 the City Council adopted a First Amendment to the 2015 Memorandum of Agreement, which revised the schedule for completion of the annexation and extending the time for consideration of the annexation with the Local Agency Formation Commission (LAFCO), as prescribed in Resolution No. 10994 (2019 Series); and WHEREAS, the referenced MOAs and the 2016 Fiero Lane Water Company (FLWC) “Plan For Services” include details on the studies, analysis, scheduling and financing of the consideration of said annexation and the needed public and private infrastructure improvements to be completed as part of any annexation; and WHEREAS, the City is actively working with the applicants and their consultants on detailing the various improvements and implementation of the financing plans to complete said improvements; and WHEREAS, all the requirements, conditions and implementing measures of said Resolutions No. 10678 and 10994 have been met by the applicants in order to consider the annexation; and WHEREAS, a duly noticed Public Hearing before the Planning Commission was held on September 25, 2019 to consider testimony and input on the proposed annexation, needed public and private infrastructure improvements, development impact fees and charges to be paid to the City, environmental considerations for the annexation, and review of the timing and implementation of said fees and improvements; Item 13 Packet Page 81 R _______ WHEREAS, the Planning Commission recommended the City Council approve the annexation and adopt the associated Initial Study/Mitigated Negative Declaration; and WHEREAS, environmental analysis of the proposed annexation has been guided by previous work in the form of the Airport Area and Margarita Area Specific Plans Final EIR (2005), FEIR Addendum for the Airport Area and Margarita Area Specific Plans (2015), and the City of SLO General Plan Land Use and Circulation Elements (LUCE) FEIR (2014); and WHEREAS, an Initial Study of environmental impact was prepared for the proposed annexation, which tiers from the certified Final EIR for the Airport Area and Margarita Area Specific Plans, documents whether there have been changed circumstances since those referenced EIRs were completed, analyzes consistency of the annexation with the General Plan and Airport Area Specific Plan, and identifies mitigation measures that would be required to mitigate potentially significant impacts resulting from the annexation process and the construction of needed infrastructure (new or rehabilitation) to support City services to the areas; and WHEREAS, the conclusion of the Initial Study of environmental impact is that by incorporating the needed infrastructure features of the 2015 and 2019 MOAs, as well as the 2016 Plan For Services, in addition to and as a direct result of the analysis of the noted EIRs, and implementing noted mitigation measures, any significant effects of the annexation and provision of infrastructure services to the area would result in a less than significant effect on the environment. WHEREAS, the City Council has duly considered all evidence, including testimony of the applicant, interested parties, and the evaluation and recommendations by staff, presented at said hearing; and WHEREAS, notices of said public hearings were made at the time and in the manner required by law. NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of San Luis Obispo as follows: SECTION 1. Findings. Based upon all the evidence, the City Council does hereby adopt the following findings in support of its authorization for application for the annexation of the Fiero Lane/Clarion Court area from the County of San Luis Obispo into the City of San Luis Obispo: 1. This proposal for annexation is made pursuant to Title 5, Division 3, Part 3 of the Cortese- Knox-Hertzberg Local Government Reorganization Act of 2000, California Government Code Section 56000, et. seq. 2. The annexation boundary and the nature of the annexation are outlined in Exhibit A, which includes the Second Amendment to the Memorandum of Agreement (MOA) between the City of San Luis Obispo and the Fiero Lane Water Company, the First Amendment to the MOA, the 2015 MOA, and annexation boundary map. Item 13 Packet Page 82 R _______ 3. The project area is identified in the Airport Area Specific Plan as a future annexation area, and no changes to identified pre-zoning or General Plan land use designations are proposed. The proposed annexation is consistent with the Airport Area Specific Plan, which was determined to be consistent with the San Luis Obispo County Airport Land Use Plan. 4. The proposed annexation is consistent with the General Plan, including Policies 1.13.3 (Annexation Purpose and Timing) and 1.13.5 (Annexation in Airport Area) because the proposed project satisfies all the prerequisites identified under 1.13.5 and pre-zoning was established upon adoption of the Airport Area Specific Plan, which is a prerequisite for allowing development on the site under the City’s General Plan. 5. The Fiero Lane-Clarion Court area is within the City’s Sphere of Influence as defined by the Local Area Formation Commission (LAFCo), which is an area designated for eventual annexation provided that City services can be provided, and that annexation is otherwise consistent with LAFCo policies. 6. Memorandum of Agreement and Plan for Services provides a framework for providing the necessary City services, and approval of the Second Amendment to the Memorandum of Agreement between the City and the Fiero Lane Water Company adequately addresses the parameters of interim service and establishes sufficient penalties/timeframes to ensure future annexation and implementation of infrastructure improvements. SECTION 2. Environmental Review Findings and Adoption. Based upon all evidence in the record before it, including the Initial Study and any comments received, the City Council hereby adopts the Initial Study/Mitigated Negative Declaration (IS/MND) prepared and circulated for the annexation, and which tiers off the certified Final Environmental Impact Report for the Airport Area and Margarita Area Specific Plans and Related Facilities Master Plans (SCH# 2000051062), and adopts the following California Environmental Quality Act Findings: 1. During consideration of the 2015 MOA, the Council approved an Addendum to the certified Final Environmental Impact Report (FEIR) for the Airport Area and Margarita Area Specific Plan. The Council determined that approval of the 2015 MOA did not meet the criteria for preparing a subsequent or supplemental EIR pursuant to the California Environmental Quality Act (CEQA) Guidelines Section 15164. Following this 2015 approval, the City Council certified the Final Environmental Impact for the Land Use and Circulation Element Update, which analyzed the annexation of the Fiero Lane-Clarion Court area as it relates to potential environmental impacts associated with build-out of the General Plan. Based on these analyses, no significantly changed circumstances have occurred within the subject area since 2015 that would affect the analysis and conclusions of the approved 2015 Addendum. 2. The proposed project, as conditioned herein, is consistent with the requirements of the certified Airport Area and Margarita Area Specific Plans and Related Facilities Master Plans Final Environmental Impact Report (FEIR) (SCH# 2000051062) and approved Addendum to the certified FEIR, and this action incorporates those FEIR mitigation Item 13 Packet Page 83 R _______ measures as detailed herein. 3. A supplemental, tiered, Initial Study has been prepared for the project, which addresses potential environmental impacts resulting from the proposed project, and the Community Development Director has recommended that the results of that additional analysis be incorporated into a MND of environmental impacts, and recommends adoption of identified mitigation measures, all of which are incorporated below. 4. The IS/MND was revised to expand identified air quality mitigation measures and to provide clarifications regarding the incorporation of earlier analysis. The air quality mitigation measures have been expanded to include additional more effective requirements, which would further mitigate potential impacts. All additions and modifications to the Initial Study provide minor clarifications and expanded discussion, all supporting the conclusions of the publicly-circulated Initial Study/Mitigated Negative Declaration. No new impacts have been identified. Therefore, pursuant to California Environmental Quality Act Guidelines Section 15073.5 and Public Resources Code section 21080(f), recirculation of the Initial Study/Mitigated Negative Declaration is not required. 5. All potentially significant effects were analyzed adequately in the referenced FEIR and IS/MND, subject to the following mitigation measures being incorporated into the project and the mitigation monitoring program: Air Quality AQ-1: Naturally Occurring Asbestos. Naturally Occurring Asbestos (NOA) has been identified as a toxic air contaminant by the California Air Resources Board (ARB). Under the ARB Air Toxics Control Measure (ATCM) for Construction, Grading, Quarrying, and Surface Mining Operations, prior to any grading activities a geologic evaluation shall be conducted to determine if NOA is present within the area that will be disturbed. If NOA is not present, an exemption request must be filed with the District. If NOA is found at the site, the applicant must comply with all requirements outlined in the Asbestos ATCM. This may include development of an Asbestos Dust Mitigation Plan and an Asbestos Health and Safety Program for approval by the APCD. More information on NOA can be found at http://www.slocleanair.org/business/asbestos.asp. AQ-2: Asbestos Material in Demolition. Demolition activities can have potential negative air quality impacts, including issues surrounding proper handling, demolition, and disposal of asbestos containing material (ACM). Asbestos containing materials could be encountered during demolition or remodeling of existing buildings. Asbestos can also be found in utility pipes/pipelines (transite pipes or insulation on pipes). If utility pipelines are scheduled for removal or relocation or a building(s) is proposed to be removed or renovated, various regulatory requirements may apply, including the requirements stipulated in the National Emission Standard for Hazardous Air Pollutants (40CFR61, Subpart M - asbestos NESHAP). These requirements include but are not limited to: 1) notification to the APCD, 2) an asbestos survey conducted by a Certified Asbestos Inspector, and, 3) applicable removal and disposal requirements of identified ACM. More information on Asbestos can be found at http://www.slocleanair.org/business/asbestos.php. Item 13 Packet Page 84 R _______ AQ-3: Developmental Burning. APCD regulations prohibit developmental burning of vegetative material within San Luis Obispo County. AQ-4: Permits. Portable equipment and engines 50 horsepower (hp) or greater, used during construction activities will require California statewide portable equipment registration (issued by the ARB) or an Air District permit. The following list is provided as a guide to equipment and operations that may have permitting requirements, but should not be viewed as exclusive: power screens, conveyors, diesel engines, and/or crushers; portable generators and equipment with engines that are 50 hp or greater; internal combustion engines; unconfined abrasive blasting operations; concrete batch plants; rock and pavement crushing; tub grinders; and, trommel screens. AQ-5: Standard Mitigation Measures for Construction Equipment. The standard mitigation measures for reducing nitrogen oxides (NOx), reactive organic gases (ROG), and diesel particulate matter (DPM) emissions from construction equipment are listed below. All projects with diesel-powered construction activity shall comply with Section 2485 of Title 13 of the California Code of regulations and the 5-minute idling restriction identified in Section 2449(d)(2) of the California Air resources Board’s In-Use Off-Road Diesel regulation to minimize toxic air pollution impacts from idling engines. a. Maintain all construction equipment in proper tune according to manufacturer’s specifications; b. Fuel all off-road and portable diesel powered equipment with ARB certified motor vehicle diesel fuel (non-taxed version suitable for use off-road); c. Use diesel construction equipment meeting ARB's Tier 2 certified engines or cleaner off-road heavy-duty diesel engines, and comply with the State off-Road Regulation; d. Use on-road heavy-duty trucks that meet the ARB’s 2007 or cleaner certification standard for on-road heavy-duty diesel engines, and comply with the State On-Road Regulation; e. Construction or trucking companies with fleets that that do not have engines in their fleet that meet the engine standards identified in the above two measures (e.g. captive or NOx exempt area fleets) may be eligible by proving alternative compliance; f. All on and off-road diesel equipment shall not idle for more than 5 minutes. Signs shall be posted in the designated queuing areas and or job sites to remind drivers and operators of the 5 minute idling limit; g. Diesel idling within 1,000 feet of sensitive receptors is not permitted; h. Staging and queuing areas shall not be located within 1,000 feet of sensitive receptors; i. Electrify equipment when feasible; j. Substitute gasoline-powered in place of diesel-powered equipment, where feasible; k. Signs that specify no idling areas must be posted and enforced at the site; l. Use alternatively fueled construction equipment on-site where feasible, such as compressed natural gas (CNG), liquefied natural gas (LNG), propane or biodiesel. AQ-6: Best Available Control Technology (BACT) for Construction Equipment. If the estimated ozone precursor emissions from the actual fleet for a given construction phase are expected to exceed the APCD threshold of significance after the standard mitigation measures are Item 13 Packet Page 85 R _______ factored into the estimation, then BACT needs to be implemented to further reduce these impacts. The BACT measures can include: a. Further reducing emissions by expanding use of Tier 3 and Tier 4 off-road and 2010 on-road compliant engines; b. Repowering equipment with the cleanest engines available; and c. Installing California Verified Diesel Emission Control Strategies. These strategies are listed at: http://www.arb.ca.gov/diesel/verdev/vt/cvt.htm AQ-7: Fugitive Dust Mitigation Measures. Projects with grading areas that are less than 4 acres and that are not within 1,000 feet of any sensitive receptor shall implement the following mitigation measures to manage fugitive dust emissions such that they do not exceed the APCD’s 20% opacity limit (APCD Rule 401) or prompt nuisance violations (APCD Rule 402) in order to minimize nuisance impacts and to significantly reduce fugitive dust emissions: a. Reduce the amount of the disturbed area where possible; b. Use of water trucks or sprinkler systems, in sufficient quantities to prevent airborne dust from leaving the site and from exceeding the APCD’s limit of 20% opacity for greater than 3 minutes in any 60-minute period. Increased watering frequency would be required whenever wind speeds exceed 15 mph. Reclaimed (non-potable) water should be used whenever possible. Please note that during drought conditions, water use may be a concern and the contractor or builder shall consider the use of an APCD- approved dust suppressant where feasible to reduce the amount of water used for dust control (contact the APCD for a list of potential dust suppressants); c. All dirt stock-pile areas should be sprayed daily as needed; d. All roadways, driveways, sidewalks, etc. to be paved should be completed as soon as possible, and building pads should be laid as soon as possible after grading unless seeding or soil binders are used; e. All of these fugitive dust mitigation measures shall be shown on grading and building plans; and f. The contractor or builder shall designate a person or persons whose responsibility is to ensure any fugitive dust emissions do not result in a nuisance and to enhance the implementation of the mitigation measures as necessary to minimize dust complaints and reduce visible emissions below the APCD’s limit of 20% opacity for greater than 3 minutes in any 60-minute period. Their duties shall include holidays and weekend periods when work may not be in progress (for example, wind-blown dust could be generated on an open dirt lot). The name and telephone number of such persons shall be provided to the APCD Compliance Division prior to the start of any grading, earthwork or demolition (Contact Tim Fuhs at 805-781-5912). g. Projects with grading areas greater than 4 acres or within 1,000 feet of any sensitive receptor shall implement the measures above, in addition to the following additional mitigation measures to manage fugitive dust emissions such that they do not exceed the APCD’s 20% opacity limit (APCD Rule 401) or prompt nuisance violations (APCD Rule 402): 1) Permanent dust control measures identified in the approved project revegetation and landscape plans should be implemented as soon as possible, following completion of any soil disturbing activities; Item 13 Packet Page 86 R _______ 2) Exposed ground areas that are planned to be reworked at dates greater than one month after initial grading should be sown with a fast germinating, non-invasive grass seed and watered until vegetation is established; 3) All disturbed soil areas not subject to revegetation should be stabilized using approved chemical soil binders, jute netting, or other methods approved in advance by the APCD; 4) Vehicle speed for all construction vehicles shall not exceed 15 mph on any unpaved surface at the construction site; 5) All trucks hauling dirt, sand, soil, or other loose materials are to be covered or should maintain at least two feet of freeboard (minimum vertical distance between top of load and top of trailer) in accordance with California Vehicle Code (CVC) Section 23114; 6) “Track-Out” is defined as sand or soil that adheres to and/or agglomerates on the exterior surfaces of motor vehicles and/or equipment (including tires) that may then fall onto any highway or street as described in CVC Section 23113 and California Water Code 13304. To prevent ‘track out’, designate access points and require all employees, subcontractors, and others to use them. Install and operate a ‘track-out prevention device’ where vehicles enter and exit unpaved roads onto paved streets. The ‘track-out prevention device’ can be any device or combination of devices that are effective at preventing track out, located at the point of intersection of an unpaved area and a paved road. Rumble strips or steel plate devices need peri odic cleaning to be effective. If paved roadways accumulate tracked out soils, the track- out prevention device may need to be modified; 7) Sweep streets at the end of each day if visible soil material is carried onto adjacent paved roads. Water sweepers shall be used with reclaimed water where feasible. Roads shall be pre-wetted prior to sweeping when feasible. Air Quality Monitoring Program: These conditions shall be noted on all project grading and building plans. The applicant will also be required to comply with existing regulations and secure necessary permits from the Air Pollution Control District (APCD) before the onset of grading or demolition activities including, but not limited to additional dust control measures, and evaluation for Naturally Occurring and Material Containing Asbestos. The applicant shall present evidence of a plan for complying with these requirements prior to issuance of a grading or building permit from the City. The applicant shall provide the City with the name and telephone n umber of the person responsible for ensuring compliance with these requirements. The Building Inspector and Community Development and Public Works Inspectors shall conduct field monitoring. Cultural Resources and Tribal Cultural Resources CR-1: Unanticipated cultural resource discovery. In the event archaeological, historic, or paleontological resources are unearthed or discovered during any construction activities, the following standards apply: a. Construction activities shall cease, and the Environmental Coordinator and Planning Department shall be notified so that the extent and location of discovered materials may be recorded by a qualified archaeologist, and disposition of artifacts may be Item 13 Packet Page 87 R _______ accomplished in accordance with state and federal law, and in consultation with local Native American tribal organizations. b. In the event archaeological resources are found to include human remains, or in any other case where human remains are discovered during construction, the County Coroner is to be notified in addition to the Planning Department and Environmental Coordinator so that proper disposition may be accomplished. Cultural Resources and Tribal Cultural Resources Monitoring Program: Requirements for cultural resource mitigation, in the event of unforeseen encounter of materials during the potential relocation of the wastewater treatment facility, shall be clearly noted on all plans for project grading and construction. Compliance will be verified by the Community Development Director. SECTION 3. Actions. The City Council hereby: 1. Authorizes the filing of an application for annexation of the Fiero Lane-Clarion Court area and directs the Community Development Director to process the application with San Luis Obispo Local Agency Formation Commission (LAFCo). 2. Requests that LAFCO accept the application for annexation and initiate proceedings for annexation to Title 5, Division 3, Part 3 of the Cortese- Knox-Hertzberg Local Government Reorganization Act of 2000, California Government Code Section 56000, et. seq. 3. Authorizes the City Manager to execute any documents in a form approved by the City Attorney related to the annexation of the subject lands to the City of San Luis Obispo. 4. Approves the Second Amendment to the Memorandum of Agreement for the Annexation of the Fiero Lane/Clarion Court area (attached hereto as Exhibit A and incorporated herein by this reference), which incorporates conditions of annexation as recommended by the Planning Commission of the City of San Luis Obispo. 5. Authorizes the Mayor to execute Second Amendment to the Memorandum of Agreement between the City and the Fiero Lane Water Company attached hereto as Exhibit A and incorporated herein by this reference. 6. Authorizes the City Manager to initiate property tax negotiations with the County of San Luis Obispo. Item 13 Packet Page 88 R _______ 7. Authorizes the City Manager to execute any documents in a form approved by the City Attorney related to the annexation of the subject lands to the City of San Luis Obispo. Upon motion of _______________________, seconded by _______________________ and on the following vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this ____ day of ___________, 2019. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this ____________ day of ___________________, ___________. ____________________________________ Teresa Purrington City Clerk Item 13 Packet Page 89 ANNEXATION NO. TO THE CITY OF SAN LUIS OBISPO LEGAL DESCRIPTION All that property in the County of San Luis Obispo, State of California, described as follows: Beginning at the intersection of the north line of Lot 1 of Tract 2339 per the map of said Tract No. 2339, filed July 17, 2000 in Book 19, Page 25 of Maps, in the Office of the County Recorder of San Luis Obispo County, with the east line of the Offer of Dedication for Santa Fe Road Right of Way and Clarion Court according to said map, also being a point on the San Luis Obispo City Limits Line according to Annexation No. 77 to the City of San Luis Obispo (Airport/Margarita), a found nail and tag stamped LS 6192 in top of concrete curb bears North 81 °27'20" West 7.08 feet per said map ( see certificate of correction 2001-084 714 of Official Records for the description of the monument) ; Thence, leaving the existing City Limit Line, along the easterly line of said Offer of Dedication the following 5 courses: South 00 °02'18" East 217.22 feet to the beginning of a curve concave to the northeast, having a radius of 23.00 feet; Thence, southeasterly along the arc of said curve, through a central angle of 89 °59'54" a distance of 36.13 feet; Thence, South 00 °02'18" East 50.00 feet to the beginning of a non-tangent curve concave to the southeast, having a radius of 23.00 feet to which a radial line bears North 00 °02'23" West; Thence, southwesterly along the arc of said curve, through a central angle of 89°59'55" a distance of 36.13 feet; Thence, South 00 °02'18" East 104.42 feet to the south line of said Lot 1 and the north line of Parcel 2 of Parcel Map COAL-87-311 per the map , filed July 17, 2000 in Book 45, Page 2 of Parcel Maps, in the Office of the County Recorder of San Luis Obispo County; Thence along said north line North 89 °45'25" West 7.00 feet to the east line of the 25 foot Offer of Dedication shown as per 3082/0R/239 on said Parcel Map, being a line that is parallel with and offset 25 feet easterly from the centerline of Santa Fe Road; Thence along said line South 00°02'18" East 256.88 feet to the south line of said Parcel 2; Thence along said line South 89 °42'47" East 484.05 feet to a%" iron pipe with tag LS 5201 marking the northwest corner of Parcel 2 of Lot Line Adjustment COAL 91-141 Item 13 Packet Page 90 according to Document No. 1995-033401 in the Office of the County Recorder of San Luis Obispo County; Thence along the west line of said Parcel 2 South 00 °02'24" East 247.52 feet to a%" iron pipe with tag LS 5201 marking the southwest corner of said Parcel and an angle point of the easterly line of Parcel 1 of said Lot Line Adjustment according to Document No. 1995-033403 in the Office of the County Recorder of San Luis Obispo County; Thence along said easterly line North 89 °41'30" West 7.72 feet to a%" iron pipe with tag LS 5201; Thence continuing along said easterly line South 00 °07'14" West 46.95 feet to the northerly corner of the land described in the Grant Deed to the County of San Luis Obispo, a Public Entity in the State of California, recorded February 27, 2009 as Document No. 2009009610 of Official Records in the Office of the County Recorder of said County; Thence along the northeasterly line of said land South 55 °02'36" East 380.15 feet to the easterly corner of said land and the south line of Parcel A of Parcel Map COAL 83-24 per the map, filed March 21, 1985 in Book 37, Page 7 of Parcel Maps, in the Office of the County Recorder of San Luis Obispo County Thence along said line and along the south line of Parcel B of said Parcel Map South 86 °13'13" East 508.01 feet to the intersection with the east line of the 15 foot wide strip of land shown as a 15' wide take per 365 OR. 44 on said Parcel Map; Thence South 65°56'21" East 16.21 feet to the most westerly corner of Parcel 1 of Parcel Map CO 89-319 per the map, filed April 4, 2000 in Book 54, Page 61 of Parcel Maps, in the Office of the County Recorder of San Luis Obispo County, also being a point on the San Luis Obispo City Limits Line according to Annexation No. 65 to the City of San Luis Obispo; Thence said along San Luis Obispo City Limits Line and along the westerly line of said Parcel 1, North 00 °17'38" East 273.93 feet to the southerly corner of Lot 6 of Tract No. 712 per the map of said Tract No. 712, filed October 27, 1980 in Book 10, Page 49 of Maps, in the Office of the County Recorder of San Luis Obispo County; Thence along the southeasterly line of said Tract No. 712 North 67 °16'44" East 1282.02 feet to the easterly corner of Lot 9 of said Tract being on the southwesterly Right of Way line of Broad Street (State Highway 227) and the San Luis Obispo City Limits Line according to Annexation No. 53 to the City of San Luis Obispo and a curve concave to the northeast having a radius of 3555.00 feet, to which a radial line bears South 57°35'34" West; Thence along the southwesterly Right of Way line of Broad Street (State Highway Item 13 Packet Page 91 227), said San Luis Obispo City Limits Line, and the northeasterly line of said Tract No. 712 northwesterly along the arc of said curve through a central angle of 10 °23'57" a distance of 645.23 feet to the northerly corner of Lot 1 of said Tract No. 712; Thence continuing along the southwesterly Right of Way line of Broad Street (State Highway 227) and said San Luis Obispo City Limits Line northwesterly along the arc of said curve through a central angle of 00 °54'42" a distance of about 56.57 feet; Thence continuing along the southwesterly Right of Way line of Broad Street (State Highway 227) and said San Luis Obispo City Limits Line North 21 °15'47" West 100.70 feet to the most easterly corner of Parcel 1 of that property described in Document No. 26918 as recorded in Book 3308, Page 338 of Official Records in the Office of the County Recorder of said County, shown as Parcel A on the map filed in Book 36 page 55 of Licensed Surveys in the Office of the County Recorder of said County being on the San Luis Obispo City Limits Line according to Annexation No. 66; Thence along the southerly line of said Parcel A and said San Luis Obispo City Limits Line South 53°25'25" West 252.89 feet to angle point in said line; Thence continuing along the southerly line of said Parcel A and said San Luis Obispo City Limits Line South 87 °59'35" West 288.60 feet to the southwest corner of said Parcel A being a point on the southerly line of Lot 79 of said San Luis Obispo Suburban Tract and being on the San Luis Obispo City Limits Line according to Annexation No. 77; Thence continuing along the southerly line of Lots 79, 58, and 59 of the San Luis Obispo Suburban Tract and along the San Luis Obispo City Limits Line according to Annexation No. 77 South 87 °59'35" West 173.47 feet to an angle point therein; Thence, continuing along said line, South 71 °17'07" West 582.37 feet to an angle point therein; Thence, continuing along said line, North 89 °29'06" West 309.04 feet to an angle point therein; Thence, continuing along said line, North 81 °27'20" West 616.52 feet to the point of beginning. Containing 48.21 acres more or less. d of legal description � �zl-ltj George Y. Marchenko LS 6964 Date Item 13 Packet Page 92 POINT OF BEGINNING r--....!:.Nf__881o 27'20" W �- � 6 16.52· I � N 89° 29' 06" w 309.04' 5 71 0 1 7,, 'l'J 7, 0 IL01' 1 '1rnAC1' 2339 _..__ __ ___._--. N 89° 45' 25" W 7.00' S 89 ° 42' 47" E 484.05' S 0 ° 07' 14" W 46.95' 19/MilB/25 JPAR.C!El, 2 roAJL 87-211 45/JPM/2 = JP'ARCIEIL 2 COAJL 91-141 41995-033401 OR N 89 ° 41' 30" W 7.72' o' ,S,So IPTN.IPARCIBL A COAL 83-24 0._:>, � a6',, JPARCIE!L B COAJL 83-24 37/!PM/7 -�o (::-u>aoQ� . ?.s, --i.._-�;;;-;��--llS 86 0 13' 13" E 508.01' S 65 ° 56' 21" E 16.21' 0 100 200 400 WALLACE GROUP 1 INCH = 200 FEET 612 Clarion Court SAN LUIS OBISPO, CA 93401 T 805 544-4011 F 805 544-4294 www.wallacegroup.us EXHIBIT 8 ANNEXATION No. TO THE CITY OF --- SAN LUIS OBISPO.CA JOB No.: 376-01-19 DRAWING :fiero annx DRAWN BY: GM DATE: 8/17/2016 Sheet 1 of 2 Item 13 Packet Page 93 IPAR<CIEIL A S 87° 59' 35" W S 87 ° 59' 35" W 511· 1 1 .. \J'J 1•0 IPAJRCJEJL IBi COAJL 71-254 IPARCJEL JBi COAJL 83-24 37/IPM/7 JL())7I' 4J JL01' 5 JL01' 6 .__ __ N 0 ° 17' 38" E 273.93' IPAJRCJEJL 1 COAJL fJ'J-319 541/PM/61 S 65 ° 56' 21" E 16.21' WALLACE GROUP 612 Clarion Court SAN LUIS OBISPO, CA 93401 T 805544-4011 F 805 544-4294 www.wallacegroup.us 288.60' L=56.57', R=3555.00' ,1 =0 ° 54 • 42" !L01' 3 \W'J/' J L=645.23', R=3555.00' L\=10 ° 23' 57" JL01I' 7 A"€. 6, Avr 1 0 \ �6 54/JPM/61 EXHIBIT B ANNEXATION No. TO THE CITY OF 0 --- SAN LUIS OBISPO.CA JL())1' 8 SCALE 100 200 400 1 INCH = 200 FEET JOB No.: 376-01-19 DRAWING :fiero annx DRAWN BY: GM DATE: 8/17/2016 Sheet 2 of 2 Item 13 Packet Page 94 Fiero Lane/Clarion Court Annexation Plan for Services – March 2016 Contents: 1. Law Enforcement 2. Fire Protection (Including Paramedic and Ambulance) 3. Parks and Recreation 4. Streets and Paths 5. Public Transit 6. Solid Waste and Recycling 7. Government Services, Development Review and Code Enforcement 8. Water and Wastewater 9. Storm Drainage 10. Affordable Housing 1. Law Enforcement The San Luis Obispo Police Department provides a variety of law enforcement and community services. Police services are based at 1042 Walnut at the intersection of Santa Rosa (Highway 1) and Highway 101. The Department consists of 90 employees, 62 of which are sworn police officers. This results in a ratio of about 1.4 officers-per- 1000 residents. However, the City of San Luis Obispo is an employment center, so the daytime population of the City’s urban area increases by about 30,000 people per day over its resident population. Thus, the officers-per resident ratio can be a misleading descriptor of service level. The Department is divided into two police bureaus, with a Police Captain commanding each. The Operations Bureau consists of a Patrol Services Division, a Traffic Safety Unit, and a Situation Oriented Response Team, and Neighborhood Services. The majority of the Operations Bureau resources are devoted to patrol services and traffic safety. The Administrative Services Bureau consists of Administrative Services Division, Investigative Division, Communications Division, Records Unit, and Information Services Unit. This bureau provides services essential to law enforcement in the City and the effective use of the Operations Bureau resources. According to the Safety Element of the City’s General Plan, the Department has a 30% available-time objective for patrol officers. Available time is the portion of time that a patrol unit is not already on call or otherwise unavailable to respond to a new emergency call for service. The level of service in the annexed territory is the same as in the rest of the city. Item 13 Packet Page 95 City of San Luis Obispo Fiero Lane/Clarion Court Annexation Plan for Services - Page 2 The Airport Area Specific Plan indicates that the proposed annexation will drive the need for additional personnel and equipment to maintain the current level of service and meet the available-time objective for patrol response. The Specific Plan also indicates the potential need for a police substation/work area with urbanization of the area. Resources are allocated to the Police Department through the City’s 2-year budget and financial plan process. Requests for additional resources are weighed against other potential uses of the City’s general fund. The City expected that service demands and revenues both would increase upon annexation of the Airport Area. Increased service demands will continue approximately in proportion to the amount of new development in the area at a gradual pace over several years. The level of service provided to the Fiero Lane/Clarion Court Annexation Area will be the same as provided to the rest of the Specific Plan Area. 2. Fire Protection (Including Paramedic and Ambulance) The City of San Luis Obispo Fire Department provides emergency and non-emergency fire protection services in the City. Emergency services include fire response, emergency medical response, hazardous materials response, and public assistance. Non-emergency services include fire and life safety inspections, building inspections, building plan checks, fire code investigations, arson investigations, and public education. Additionally, the SLOFD is a member of a countywide team that responds to hazardous materials incidents throughout the County. The Fire Department operates 4 fire stations and has a firefighter/population ratio of approximately 1 firefighter per 1,000 residents. Headquarters (Fire Station #1) is located on the corner of Broad Street and South Street, Fire Station #3 is located at 1280 Laurel Lane, and Fire Station #4 is located at the corner of Madonna and Los Osos Valley Road. County Fire Station #21, which is located on the runway, provides for airport crash fire rescue services. This station also provides emergency response services for a rather large rural area. The City currently maintains a mutual aid agreement with Calfire to allow this station to respond to matters within the airport area. The Airport Area Specific Plan indicates that upon annexation of the plan area, the Department’s minimum staffing level may need to be increased. In addition, because of increased population and the increased potential hazards of the industrial area, the City may need to add additional inspectors to augment existing staff. The proximity of these stations to the Airport Area provide for emergency response times of 4 minutes or less. The Fire Department’s standard of coverage recommends that a three-person engine company, with paramedic, meet this standard 95 percent of the time. All SLOFD engine companies (first responders during an emergency call) include at least one paramedic. In 2013, the Chevron EIR evaluated development and annexation of the Chevron property and therefore evaluated the potential for fire department operational needs. The EIR concluded that the majority of the Airport area is not within the City’s desired 4- Item 13 Packet Page 96 City of San Luis Obispo Fiero Lane/Clarion Court Annexation Plan for Services - Page 3 minute response time. However, this response time may be enhanced by the completion of circulation improvements including the completion of Prado Road, Santa Fe Road, and the widening of Tank Farm Road. Even with these improvements planned for the future, the EIR concluded mitigation is necessary to achieve the City’s policy objectives for response time (Safety Element Policy 10.3). These mitigation measures are incorporated into the AASP as follows: Policy 7.9.1: Adequate Fire Suppression Services and Facilities The City shall provide adequate fire suppression services and facilities to the Airport Area, consistent with the Safety Element of the General Plan, by completing area transportation improvements, co- locating City fire services with existing CAL-Fire facilities located on Broad Street, and/or establishing a permanent facility within the Airport Area. Policy 7.9.2: Fire Station Location and Site Dedication During the first phase of development of the Chevron Tank Farm site, property that is suitable for the development of a new fire station shall be deeded to the City, to the approval of the Fire Chief. Policy 7.9.3: Interim Safety Improvements Until a permanent facility is developed that enables the City to achieve its response time objectives, new development in the Airport Area may be required to finance other improvements that will contribute to alleviating current deficiencies, as identified in the San Luis Obispo Fire Department Master Plan (2009). This policy will be implemented on a case by case basis through conditions of approval when project specific fire and life safety impacts are identified. The proposed annexation was anticipated by the Airport Area Specific Plan. The Specific Plan indicates that development of the plan will drive the need for additional personnel, including firefighters and inspectors, to maintain the current level of service. Resources are allocated to the Fire Department through the City’s 2-year budget and financial plan process. Requests for additional resources are weighed against other potential uses of the City’s general fund. The City expects that service demands and revenues both will increase upon annexation. Increased service demands will continue approximately in proportion to the amount of new development in the area at a gradual pace over several years. The level of service provided to the Fiero Lane/Clarion Court Annexation Area will be the same as provided to the rest of the Specific Plan Area. 3. Parks and Recreation The proposed annexation area is already developed and no additional development is proposed at this time. The area does not include parkland because no residential neighborhoods are proposed. 4. Streets Maintenance and Development Item 13 Packet Page 97 City of San Luis Obispo Fiero Lane/Clarion Court Annexation Plan for Services - Page 4 The proposed annexation boundaries have been created in consideration of the City’s ability to maintain public infrastructure within the annexation area. The City’s Pavement Management Plan was originally adopted in 1998 and provides the framework for the City’s maintenance program. The heart of the program is computer software that analyzes the conditions of various street segments via special algorithms and then makes maintenance recommendations according to the available budget. The City has purchased MicroPaver, a program originally written by the Army Corps of Engineers to maintain military bases. This program is made available to the public via the American Public Works Department and the University of Illinois. It is continually updated and maintained by the Corps and is in use throughout the United States and worldwide. Within the annexation area, existing public streets will be upgraded to City standards by the applicant and accepted by the City for maintenance upon completion of the upgrades. Maintenance of existing streets within the annexed territory will be accomplished by incorporating the streets into the pavement management program. 5. Public Transit Currently the nearest bus route (Route 3) is located about 1,500 feet north of the annexation area and the City’s Transportation Division is in the process of expanding said route. No development is proposed in the annexation area, however, as development occurs in the Airport Area, the potential for new or expanded bus routes will be evaluated in accordance with the potential routes identified in the specific plans. New development is responsible for providing transit facilities, such as turnouts, shelters and in some cases, smart signs that indicate how soon the next bus will arrive. 6. Solid Waste and Recycling The City of San Luis Obispo contracts with San Luis Garbage Company for garbage, green waste and recycling services. San Luis Garbage disposes of solid waste at the Cold Canyon Landfill, which is a regional facility. San Luis Garbage also serves commercial and residential properties within the City’s urban reserve and no change in service is expected for annexed properties. The City also runs a construction and demolition debris recycling program (Municipal Code Chapter 8.05). The goal of the program is to divert the bulk of the materials generated from projects within the City of San Luis Obispo from the landfill and thus, extend the landfill’s lifespan. Construction and demolition debris materials represent a significant percentage of the City’s solid waste stream, with current estimates at 25 percent of the total tonnage. The program helps the City meet State-mandated requirements for solid waste reduction. 7. Municipal Services, Development Review and Code Enforcement The City of San Luis Obispo will provide for municipal services within the annexed territory such as elections, public notices, development review, building permits and inspections, subdivision review, permitting and inspecting public improvements, and code enforcement. San Luis Obispo City government will provide for development Item 13 Packet Page 98 City of San Luis Obispo Fiero Lane/Clarion Court Annexation Plan for Services - Page 5 review of all new development projects in accordance with the Airport Area Specific Plan, and will coordinate with the County of San Luis Obispo with respect to on-going construction projects and active construction permits. Code enforcement activities are provided by full-time staff in the Community Development Department, in coordination with the Police Department and the City Attorney’s Office. Government services are based at City Hall, 990 Palm Street, San Luis Obispo. 8. Water and Wastewater According to water metering records from the Fiero Lane Water Company (FLWC), annual water demand for the Fiero Lane/Clarion Court annexation area is 8,293 units/year or 19 acre feet per year for both indoor and outdoor landscape use. The Airport Area Specific Plan and the City’s General Plan anticipated the water demand to serve this annexation and adequate water supplies are available to serve the build out of the City’s General Plan. The City has existing 12-inch potable water mains on Broad Street and Aerovista. For interim service, a water meter is proposed to be located on Aerovista with a future permanent meter location at Broad Street and Fiero Lane. The annexation area is in the City’s Water Reuse Master Plan area and will be served with recycled water for landscape irrigation in the future when the recycled water distribution system is extended south on Broad Street. Wastewater generation for the annexation area, including the 500,123.5 square feet of developed area, is approximately 15,000 gallons per day. Connection to the City’s gravity sewer is proposed to be located at the end of Fiero Lane (existing County-owned gravity main carrying flow from the Airport) to the City’s Airport lift station. The Airport lift station pumps flow to a gravity main on Broad Street that extends west on Tank Farm Road to the Tank Farm lift station. Both facilities have capacity to serve the proposed annexation. Some parcels within the proposed annexation area are served by existing septic tanks. Properties that receive access from Santa Fe Road will continue to use septic systems. Properties remaining on septic tanks will be allowed to remain on septic until the system fails or substantial additions or redevelopment of the property is proposed. At the time of failure or substantial increase in development, those properties will be required to connect to the sewer system. In 2015, average flow to the City’s Water Resource Recovery Facility was 3.5 million gallons per day (mgd). Design capacity of the WRRF is 5.1 mgd and the planned upgrade to the facility will increase its capacity to 5.4 mgd. Adequate capacity is available at the facility to serve the proposed annexation. 9. Storm Drainage On-site flooding and the potential for increased downstream flooding have restricted development potential in the Airport area. When considering how to address storm Item 13 Packet Page 99 City of San Luis Obispo Fiero Lane/Clarion Court Annexation Plan for Services - Page 6 drainage in the area, a number of objectives are identified in the Airport Area Specific Plan. These include:  Use the City’s Drainage Design Manual and Waterways Management Plan as the basis for all detention requirements in the Specific Plan area.  Provide a method for flood protection consistent with the City’s Flood Damage Prevention Regulations.  Maximize the opportunity for environmental enhancement of stream corridors and stormwater detention and conveyance facilities.  Minimize capital expenditures.  Provide opportunities for multiple-use of storm drainage facilities. Initially, an area-wide drainage solution was envisioned for the Airport Area. This solution was referred to as the Storm Drain Master Plan and relied on significant creek channel modifications to keep storm flows within existing creek channels, modified natural channels, and in man-made by-pass channels. A regional detention basin south of Buckley Road was proposed to detain water and prevent downstream flooding. After this solution was developed, the City’s Waterwa ys Management Plan was approved, which includes a Drainage Design Manual with standards for on-site storm water detention. Once it became evident that the costs of the original Storm Drain Master Plan were prohibitive, the Storm Drain Master Plan was revised to allow for on-site detention of storm flows, consistent with the Drainage Design Manual. The following proposed improvements and development requirements comprise the revised Storm Drain Master Plan for the Airport Area, and also improve the upstream situation in the Margarita Area: 1. Remove and replace existing Acacia Creek Bridge at Tank Farm Road with a standard Caltrans 2-span concrete slab bridge. 2. Remove and replace existing East Branch San Luis Obispo Creek Bridge at Santa Fe Road with a standard Caltrans 2-span concrete slab bridge. 3. Remove and replace the existing Tank Farm Creek culvert facilities at Tank Farm Road with a standard Caltrans 2-span concrete slab bridge. 4. Apply the requirements of the City’s Floodplain Management Regulations to proposed development within the Airport Area. 5. Apply the requirements of the City’s Waterways Management Plan, Drainage Design Manual to proposed development within the Airport Area. These proposed improvements, along with implementation of existing City-wide ordinances and requirements are expected to provide 100-year flood protection and provide for environmental enhancement of stream corridors. The analytical methods outlined in the Waterway Management Plan, Drainage Design Manual will be used to assist in the future design of flood control improvements. Item 13 Packet Page 100 City of San Luis Obispo Fiero Lane/Clarion Court Annexation Plan for Services - Page 7 10. Affordable Housing The proposed annexation area is currently developed with commercial structures/existing commercial uses and no new development is proposed as part of this application. Affordable housing would be required if new development is proposed in the future. Per the City’s Inclusionary Housing Requirement (Zoning Regulations Chapter 17.91), any new commercial projects that include over 2,500 square feet of floor area must provide affordable housing or pay in-lieu fees. The requirement is two affordable dwelling units per acre of land, or payment of an in-lieu fee equal to 5% of building valuation. The City uses the fees collected for affordable housing projects that meet eligibility criteria as specified by Council resolution. Item 13 Packet Page 101 CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 1 INITIAL STUDY ENVIRONMENTAL CHECKLIST FORM For EID-0626-2019 1.Project Title: Fiero Lane and Clarion Court Annexation 2. Lead Agency Name and Address: City of San Luis Obispo 919 Palm Street San Luis Obispo, CA 93401 3. Contact Persons and Phone Number: David Watson, Contract Planner dave@watsonplanning.us (805) 704-8728 Shawna Scott, Senior Planner sscott@slocity.org (805) 781-7176 4. Project Location: The approximately 39-acre proposed annexation area is located on the west side of Broad Street, approximately one-quarter mile south of Tank Farm Road. The site consists of 30 existing parcels located along Fiero Lane, Clarion Court, and a portion of Santa Fe. 5. Project Sponsor’s Name and Address: Matt Quaglino Fiero Lane Water Company President, Fiero Lane Water Company c/o Rob Miller, PE c/o Quaglino Properties Wallace Group 815 Fiero Lane 612 Clarion Court San Luis Obispo, CA 93401 San Luis Obispo, CA 93401 6.General Plan Designation: Current County of San Luis Obispo General Plan Designation: Commercial Service and Industrial Land Use Categories City of San Luis Obispo Proposed General Plan Designations: Business Park and Services & Manufacturing (consistent with the Airport Area Specific Plan, Figure 4-1 Land Use Designations) Item 13 Packet Page 102 CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 2 7. Zoning: Proposed: Business Park (BP), Service Commercial (CS), and Manufacturing (M) (consistent with the Airport Area Specific Plan, Figure 4-4 Zoning Designations) Figure 2: Project Vicinity Map Project location Figure 1: Regional Location Item 13 Packet Page 103 CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 3 Description of the Project: The Proposed Project includes annexation of approximately 39 acres of property into the City of San Luis Obispo. The proposed annexation area is comprised of 30 parcels located in the vicinity of Fiero Lane and Clarion Court, near the San Luis Obispo Regional Airport (Reference Source 1, Fiero Lane-Clarion Court Proposed Annexation Area). The Fiero Lane-Clarion Court annexation and service area is located within the Airport Area Specific Plan (AASP) located generally in and around 850 Fiero Lane, San Luis Obispo, California 93401. Approximately 90 percent of the properties within the annexation area are developed with businesses currently operating under San Luis Obispo County regulations. The subject area is identified in a previously approved 2015 Memorandum of Agreement (MOA) between the City and the Fiero Lane Water Company (FLWC) that provides (i) interim water and wastewater services to the Fiero Lane and Clarion Court properties located in the Fiero Lane Annexation area west of Broad Street, and (ii) provides for annexation of these properties into the City of San Luis Obispo. A First Amendment to this MOA was approved by the City Council on March 19, 2019, which allowed additional time (one year) to complete the application submittal and processing of the annexation with the San Luis Obispo County Local Agency Formation Commission (LAFCO). In 2015 the City Council adopted Resolution No. 10678, which provided for the two phases of the project, as summarized below: Phase 1 (Memorandum of Agreement): This phase included an interim hookup to City water and sewer facilities after initial Council and LAFCO authorization. The physical changes to the City’s infrastructure system were limited to the following: Disconnection from the FLWC Wastewater Treatment Plant (WWTP). Sewer system connection for the proposed annexation area, including approximately 30 feet of temporary sewer force main construction in existing disturbed street areas. Potable water system connection for the proposed annexation area at a single point, including minor temporary pipeline construction in existing disturbed areas. Phase 2: (Annexation): During this phase, City and FLWC staff have defined the detailed improvements required for permanent connections to City systems. During Phase 2, improvements would include: Decommissioning of the existing WWTP, including potential relocation of required plant equipment to the East Airport area (refer to description of wastewater alternatives below, under Plan for Services). Installation of new water meters Installation of recycled water main on Broad Street Reconfiguration of sewer laterals along Fiero Lane to connect to the existing airport gravity sewer Pavement rehabilitation and sidewalk repairs within Fiero Lane Other improvements identified in the MOA between the City and FLWC Item 13 Packet Page 104 CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 4 Plan For Services The proposed annexation area has been analyzed to identify their impact on overall City services. To document this analysis and the recommendations derived from that analysis, a Plan For Services has been developed and adopted in 2015 for the FLWC annexation area. A summary of the Plan for Services is included below. Current Conditions – Fiero Lane-Clarion Court Annexation Area. Fiero Lane and Clarion Court provide vehicular access to the area. These roads do not intersect; each is a cul-de-sac dead end. Fiero Lane access comes from Broad Street and Clarion Court is accessed via Santa Fe Road. At this time the Santa Fe Bridge facility is not intended to be annexed. No improvements to the bridge are identified with this action. Domestic water is delivered by the City via the water distribution system from Broad Street along Aero Vista Lane to the water holding tank near the center of the annexation area. Water is distributed from the tank via pressurized water lines installed with the original developments of the area. Wastewater is collected by both gravity and force main/lift stations and conveyed to a private treatment plant operated by the Fiero Lane Water Company at the end of Fiero Lane. Treated wastewater is disposed of in a leach field system to the immediate south (and outside) the annexation area. Emergency services are provided by the County, but these areas are also supported by the City under mutual aid agreements between the City and County. General government services are provided by the County. Storm water management, collection and disposal is handled by the private property owners under County-approved plans. Solid waste services are provided by the County via private contract with local waste and recycling providers. Post-Annexation Conditions – Fiero Lane-Clarion Court Annexation Area. Roadway rehabilitation and upgrades are planned to bring the roads, walkways and street signage up to City standards. Following annexation, the roads, curbs, gutters and sidewalks will be maintained by the City under the Pavement Management Plan. Water system upgrades for the annexation area will include some main line and hydrant replacements, water meter replacements, valving and backflow prevention will be installed. The current interim water service will become permanent under the annexation proposal. Conversion of the Fiero Lane-Clarion Court area to the City’s wastewater system will occur following City installation of a gravity collection line along Fiero Lane that will serve to collect wastewater from the location of the existing Fiero Lane Water Company wastewater plant (at the end of Fiero Lane cul-de-sac). This new City line would convey wastewater by gravity to an existing wastewater main line in Broad Street, and from there is conveyed to the City’s Water Resource Recovery Facility (WRRF). Until such time as this conversion occurs, the private FLWC treatment plant and disposal system will continue to operate as currently constituted. Much of the existing collection system within the annexation area along Clarion Court will remain a private collection and conveyance system, ultimately sending wastewater to the City’s new gravity main at Fiero Lane noted above. A new lift station in the vicinity of the FLWC wastewater plant is also planned. Following the connections of the various properties in the Fiero Lane-Clarion Court Annexation Area, the wastewater plant will be decommissioned at this Item 13 Packet Page 105 CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 5 location. It is possible this plant would be moved to the East Airport Annexation Area to serve those users as noted earlier and briefly summarized below. Preferred Wastewater Alternative: The FLWC wastewater system will be converted to interconnect with a gravity collection line in Broad Street, and from there is conveyed to the City’s WRRF. The force main and lift station currently serving the area would be abandoned. The timing of this work is contingent on the decommissioning of the FLWC wastewater plant following the connections of the various properties in the Fiero Lane-Clarion Court Annexation Area. Interim Wastewater Alternative: If annexation of the East Airport Area is delayed, or improvements are not completed at the time of the FLWC wastewater plant decommissioning, it is possible this treatment plant would be moved to the East Airport Annexation Area to serve those users on an interim basis. The proposed parcel identified by FLWC is APN 076-512-028 (1275 Prospect) – this parcel is currently developed with existing FLWC facilities. In such a case, FLWC proposes that treated wastewater would be conveyed via the lift station and force main on the East Airport area to the existing disposal field currently serving the FLWC plant, west of Broad Street treated wastewater would be stored and disposed as recycled water in the East Airport Area. Recycled water supplies are also included in the Plan For Services, with extensions made by the applicants within the annexation area, to facilitate connection to this supply when it can be made available. Police and Fire emergency services would be provided by the City. It is expected the mutual aid agreements would remain between the City and County. General government services would be assumed by the City. Storm water management and solid waste services would continue as presently exist. At this time the tasks required under Phase 1 of the MOA have been completed and the properties are now prepared to submit the annexation request to the City and LAFCO, and implement the improvements identified in Phase 2. Previous environmental review for this Project included the 2005 Final EIR certified for the Airport Area and Margarita Area Specific Plans, a 2015 Addendum to this 2005 Final EIR, and the 2014 General Plan Land Use and Circulation Element Update (LUCE) EIR. These materials are relied on and incorporated herein for this analysis. Tiering off earlier environmental studies is allowed by CEQA, essentially further refining impact analysis and mitigation strategies as new or changed circumstances arise. It also allows previous work to be reaffirmed as adequate for the review of the next stage of a given project. 8. Other public agencies whose approval is required: San Luis Obispo County Local Agency Formation Commission (LAFCO) – interim services agreement and annexation (Responsible Agency), Air Pollution Control District, Regional Water Quality Control Board, County of San Luis Obispo (for re-located wastewater treatment package plant) Item 13 Packet Page 106 CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 6 9.Have California Native American tribes traditionally and culturally affiliated with the project area requested consultation pursuant to Public Resources code section 21080.3.1? If so, has consultation begun? Native American Tribes have been notified about the project consistent with City and State regulations. The Northern Chumash Tribal Council (February 8, 2019) has noted that the existence of development and infrastructure within the annexation area does not preclude the presence of cultural resources. 10.Minor Clarifications to this Initial Study. Within the 30-day public review period for the Initial Study/Mitigated Negative Declaration, the City received a review letter from the San Luis Obispo County Air Pollution Control District (APCD) (October 21, 2019). The APCD requested that proposed mitigation measures be expanded to include additional more effective requirements, which would further mitigate potential impacts resulting from the emission of diesel particulate matter and fugitive dust during construction (impacts that were identified in the publicly-circulated Initial Study/Mitigated Negative Declaration). No new impacts were identified by the APCD, and this Initial Study and associated Mitigation Monitoring and Reporting Plan incorporates the mitigation requested by the APCD. This Initial Study also includes additional clarifications regarding earlier analysis, which expand upon the discussion of the use of earlier documents, including the certified Final Environmental Impact Reports for the Land Use and Circulation Element (LUCE) and Airport Area Specific Plan (AASP). These clarifications are informational, and do not result in the identification of any new impacts. All additions and modifications to this Initial Study (refer to underlined text) provide additional minor clarifications and expanded discussion, all supporting the conclusions of the publicly- circulated Initial Study/Mitigated Negative Declaration. Therefore, pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15073.5 recirculation of the Initial Study/Mitigated Negative Declaration is not required. Attachments 1.Resolution No. 10678, including 2015 Memorandum of Agreement (MOA) between City and Fiero Lane Water Company 2.Resolution No. 10994 approving the First Amendment providing for an extension to the 2015 MOA between City and Fiero Lane Water Company 3. Fiero Lane / Clarion Court “Plan For Services”, March 2016 Refer to Council Agenda Report Attachments Item 13 Packet Page 107 CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 7 ENVIRONMENTAL FACTORS POTENTIALLY AFFECTED: The environmental factors checked below would be potentially affected by this project, involving at least one impact that is a “Potentially Significant Impact” as indicated by the checklist on the following pages. Aesthetics Greenhouse Gas Emissions Population and Housing Agricultural Resources Hazards & Hazardous Materials Public Services X Air Quality Hydrology/Water Quality Recreation Biological Resources Land Use and Planning Transportation & Traffic X Cultural Resources Energy & Mineral Resources X Utilities and Service Systems Geology/Soils Noise X Tribal Cultural Resources Mandatory Findings of Significance FISH AND GAME FEES There is no evidence before the Department that the project will have any potential adverse effects on fish and wildlife resources or the habitat upon which the wildlife depends. As such, the project qualifies for a de minimis waiver with regards to the filing of Fish and Game Fees. X The project has potential to impact fish and wildlife resources and shall be subject to the payment of Fish and Game fees pursuant to Section 711.4 of the California Fish and Game Code. This initial study has been circulated to the California Department of Fish and Game for review and comment. STATE CLEARINGHOUSE X This environmental document must be submitted to the State Clearinghouse for review by one or more State agencies (e.g. Cal Trans, California Department of Fish and Game, Department of Housing and Community Development). The public review period shall not be less than 30 days (CEQA Guidelines 15073(a)). Item 13 Packet Page 108 Item 13 Packet Page 109 CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 9 EVALUATION OF ENVIRONMENTAL IMPACTS: 1. A brief explanation is required for all answers except “No Impact” answers that are adequately supported by the information sources a lead agency cites in the parentheses following each question. A “No Impact” answer is adequately supported if the referenced information sources show that the impact simply does not apply to projects like the one involved (e.g. the project falls outside a fault rupture zone). A “No Impact” answer should be explained where it is based on project-specific factors as well as general standards (e.g. the project will not expose sensitive receptors to pollutants, based on a project-specific screening analysis). 2. All answers must take account of the whole action involved, including off-site as well as on-site, cumulative as well as project-level, indirect as well as direct, and construction as well as operational impacts. 3. Once the lead agency has determined that a particular physical impact may occur, then the checklist answers must indicate whether the impact is potentially significant, less than significant with mitigation, or less than significant. "Potentially Significant Impact' is appropriate if there is substantial evidence that an effect may be significant. If there are one or more "Potentially Significant Impact" entries when the determination is made, an EIR is required. 4. “Negative Declaration: Less Than Significant With Mitigation Incorporated” applies where the incorporation of mitigation measures has reduced an effect from "Potentially Significant Impact" to a "Less than Significant Impact." The lead agency must describe the mitigation measures, and briefly explain how they reduce the effect to a less than significant level (mitigation measures from Section 19, "Earlier Analysis," as described in (5) below, may be cross- referenced). 5. Earlier analysis may be used where, pursuant to the tiering, program EIR, or other CEQA process, an effect has been adequately analyzed in an earlier EIR or negative declaration (Section 15063 (c) (3) (D)). In this case, a brief discussion should identify the following: a) Earlier Analysis Used. Identify and state where they are available for review. b) Impacts Adequately Addressed. Identify which effects from the above checklist were within the scope of and adequately analyzed in an earlier document pursuant to applicable legal standards, and state whether such effects were addressed by mitigation measures based on the earlier analysis. c) Mitigation Measures. For effects that are “Less than Significant with Mitigation Measures Incorporated,” describe the mitigation measures which were incorporated or refined from the earlier document and the extent to which they addressed site-specific conditions for the project. 6. Lead agencies are encouraged to incorporate into the checklist references to information sources for potential impacts (e.g. general plans, zoning ordinances). Reference to a previously prepared or outside document should, where appropriate, include a reference to the page or pages where the statement is substantiated. 7. Supporting Information Sources: A source list should be attached, and other sources used or individuals contacted should be cited in the discussion. 8. This is only a suggested form, and lead agencies are free to use different formats; however, lead agencies should normally address the questions from this checklist that are relevant to a project’s environmental effects in whatever format is selected. 9. The explanation of each issue should identify: a) The significance criteria or threshold, if any, used to evaluate each question; and b) The mitigation measure identified, if any, to reduce the impact to less than significance Item 13 Packet Page 110 CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2018 10 1. AESTHETICS. Would the project: a) Have a substantial adverse effect on a scenic vista? 2,3,4, 5, 17 X b) Substantially damage scenic resources, including, but not limited to, trees, rock outcroppings, open space, and historic buildings within a local or state scenic highway? 2,3,4, 5, 17 X c) Substantially degrade the existing visual character or quality of the site and its surroundings? 2,3,4, 5, 17 X d) Create a new source of substantial light or glare which would adversely affect day or nighttime views in the area? 2,3,4, 5, 17 X Evaluation Existing Visual Conditions. The Airport area is currently developed with a mix of light industrial and service manufacturing uses along with contractor and professional services. Views in the Airport area include the Santa Lucia Range, Islay Hill, and the hills located at the north end of the Margarita area that separate it from the city to the north. a) Based on Conservation and Open Space Element Figure 11: Scenic Roadways and Vistas, there are no designed Scenic Cones of View in or facing towards the proposed annexation area, although the section of Broad Street near the intersection with Fiero Lane, and a section of Tank Farm Road west of Santa Fe are designated as having high scenic value. The AASP notes that the Santa Lucia Mountains and foothills are important features in establishing the character of the Airport Area, and AASP Chapter 5 (Community Design) includes design guidelines and performance standards, which are in place to protect views and the area’s unique sense of place. The proposed annexation area is largely built-out and based on the presence of existing development and mature trees within and adjacent to the annexation area, views of surrounding hills and ridgelines are limited. The proposed Project would allow for future development, which would be consistent and compatible with the underlying and surrounding land use designations, based on compliance with the AASP and City standards. Implementation of the proposed Project, including proposed infrastructure improvements, would not significantly change the existing visual character of the project area, as the area is approximately 90 percent built-out with commercial, office, and light industrial uses, and the zoning designations under the AASP (Business Park, Service Commercial, and Manufacturing) allow or conditionally allow for similar uses. The AASP Final EIR analyzed impacts related to aesthetics as a result of development of the AASP area, including the Project site. The proposed Project supports implementation of goals and policies contained within the AASP and would be fully consistent with both the AASP and the analysis contained in the AASP Final EIR. Therefore, this impact is considered less than significant. b) The affected section of State Route 227 (Broad Street) is not designed a scenic route by the California Department of Transportation or the County of San Luis Obispo. As noted above, the City’s Conservation and Open Space Element identifies the section of Broad Street near the intersection with Fiero Lane, and a section of Tank Farm Road west of Santa Fe as having high scenic value. Implementation of the proposed Project would not result in the removal of any substantial trees, rock outcroppings, or buildings of historical significance, and future development would be subject to the adopted guidelines and performance standards identified in the AASP and the City’s Zoning Regulations and Community Design Guidelines. Therefore, there is a less than significant impact. c) The AASP Final EIR identified a significant and unavoidable impact (Impact LU-6: Change in Views) as a result of buildout of the AASP area and urbanization of the south end of the City. A Statement of Overriding Considerations was adopted upon certification of the AASP Final EIR and adoption of the AASP. As noted above, the proposed annexation area is currently urbanized and developed with commercial, office, and light industrial uses. Future development of the Project site would be visually compatible with the surrounding uses and would not significantly degrade the existing visual quality of the surrounding area, because it would be consistent with existing development, and subject to adopted AASP design guidelines and performance standards and the City’s Community Design Guidelines. The proposed site for the potentially- relocated package wastewater treatment facility is currently developed with FLWC facilities, and would not result in a significant visual change. Therefore, this is considered a less than significant impact. Item 13 Packet Page 111 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 11 d) Consistent with the analysis in the AASP Final EIR (Impact LU-7: Potential Increase in Daytime/Nighttime Light and Glare), future development within the proposed annexation area would contribute to an increase in light and glare from exterior lighting and materials. Pursuant to the AASP Final EIR and adopted AASP, future development shall comply with lighting guidelines and standards, consistent with AASP Final EIR Mitigation Measure LU-7.1 (Incorporate Lighting Design Standards into Margarita and Airport Area Specific Plans). In addition, future projects would comply with AASP guidelines that discourage reflective or shiny exterior finishes (see AASP Materials and Colors, Goal 5.14, Guideline C). Future projects would also be subject to Zoning Regulations Section 17.70.100 (Lighting and Night Sky Preservation), which requires shielding and other methods to minimize light intrusion. Compliance with existing AASP guidelines and the Zoning Regulations would ensure impacts related to light and glare would be less than significant. Conclusion: Less than significant impacts. The area is designated for business park and service-manufacturing uses under the AASP. Future development would be subject to AASP guidelines, City Community Design Guidelines, and performance measures and standards identified in the Zoning Regulations that address aesthetics, and based on the scope of the proposed annexation project, no additional mitigation measures beyond these identified requirements are necessary. 2. AGRICULTURE RESOURCES. Would the project: a) Convert Prime Farmland, Unique Farmland, or Farmland of Statewide Importance (Farmland), as shown on the maps pursuant to the Farmland Mapping and Monitoring Program of the California Resources Agency, to non-agricultural use? 2,4,6, 7,13 X b) Conflict with existing zoning for agricultural use, or a Williamson Act contract? 2,4,6, 7,13 X c) Involve other changes in the existing environment which, due to their location or nature, could result in conversion of Farmland, to non-agricultural use or conversion of forest land to non-forest use? 2,4,6, 7,13 X Evaluation The FEIR for the AASP analyzed the potential impact of development in the AASP (including the proposed annexation). Consistent with the strategy of the General Plan, the specific plan aims to accommodate urban development inside the urban reserve line while protecting land outside the urban area for open space, agricultural, and rural uses. No agricultural zoning or lands under Williamson Act contract are present with the proposed annexation area. a-b-c) The Proposed Project does not affect any existing or future agricultural activities. The subject service and annexation area is not in agricultural use, is not located on lands considered prime agricultural soils, is in an area long designated for annexation and infill development. There is no agricultural zoning or Williamson Act Contract in effect, and no grazing on the subject site. Conclusion: No impact. 3. AIR QUALITY. Where available, the significance criteria established by the applicable air quality management or air pollution control district may be relied upon to make the following determinations. Would the project: a) Conflict with or obstruct implementation of the applicable air quality plan? 2,4,5, 11,12 X b) Violate any air quality standard or contribute substantially to an existing or projected air quality violation? 2,4,5, 11,12 X c) Result in a cumulatively considerable net increase of any criteria pollutant for which the project region is non-attainment under an applicable federal or state ambient air quality standard (including releasing emissions which exceed qualitative thresholds for ozone precursors)? 2,4,5, 11,12 X Item 13 Packet Page 112 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 12 d) Expose sensitive receptors to substantial pollutant concentrations? 2,4,5, 11,12 X e) Create objectionable odors affecting a substantial number of people? 2,4,5, 11,12 X Evaluation As discussed in the AASP FEIR, local climate conditions are generally characterized by warm, dry summers and cooler, rainy winters. The Edna Valley in which the Fiero Lane-Clarion Court annexation area is located is generally affected by offshore cooling conditions and airflow through the valley from Morro Bay to the north. These wind patterns change frequently, but prevailing conditions as described have a tendency to restrict dispersion of pollutants for a matter of days which has led to periodic higher ozone level readings. To address this, the City relies on Federal-State-County APCD quality standards and monitoring, as well as a robust Climate Action Plan adopted by the City. The Air Quality impacts and mitigation measures developed for the AASP and FEIR identified thresholds for ground disturbance (such as 1,950 cu/yds per day or 4.0 acres of grading or larger) that would trigger additional environmental review. No new private development is permitted by this annexation, and any future development post-annexation would be subject to the AASP and the City’s Municipal Code and Zoning Regulations, which stipulate required levels of review. Infrastructure improvements identified for the proposed annexation, including infrastructure conversions and connections to bring private users into the City’s utility system are located within previously disturbed street rights-of-way. To address these factors, several protocols have been imposed to address both short-term quality concerns (generally construction-oriented emission mitigations) as well as longer-term emission reduction targets that rely on site design, traffic management, alternative energy techniques and similar options to minimize overall air quality impacts. The annexation of the exiting developed Fiero Lane-Clarion Court area will not materially change these existing conditions. Future development proposed within the subject area would be required to address these requirements as individual projects are evaluated. a) Annexation of the existing developed Fiero Lane-Clarion Court area would occur as anticipated in the AASP, and will not materially change existing conditions. Infrastructure improvements would occur within developed roadways and utility corridors that currently serve urban development, and would not result in an expansion of urban areas beyond what was anticipated and analyzed in the AASP FEIR, which determined that implementation of the AASP would be consistent with the APCD’s 1998 Clean Air Plan. While the Clean Air Plan was updated in 2001, the proposed annexation and associated infrastructure improvements would be consistent with this plan because the Transportation and Land Use Control Measures recommended in the 1998 plan to reduce emissions were incorporated into the attainment strategy for the 2001 Clean Air Plan. In addition, the proposed annexation would not change the anticipated zoning and land use designations identified in the AASP for the subject area. Therefore, the proposed project is consistent with the adopted Clean Air Plan. b-c) Based on the APCD’s San Luis Obispo County Attainment Status table (APCD, 2019), San Luis Obispo County is in non-attainment with California standards for ozone and respirable particulate matter. Potential short-term impacts resulting from build-out of the AASP area (including the proposed annexation area) were determined to be less than significant based on implementation of APCD construction emission mitigations identified in the AASP FEIR (AASP FEIR: Impact AIR-1: Short-term Construction Impacts; Mitigation Measure AIR-1.1 Construction-related Combustion Emissions Mitigation; Mitigation Measure AIR-1.2 Construction-Related Fugitive Dust (PM10) Mitigation; Mitigation Measure AIR-1.3 Construction-Related Activity Management Techniques). Long-term operational emissions were determined to be less than significant (AASP FEIR: Impact AIR-2 Long-term Operation Emissions; Mitigation Measure AIR-2.1 Implement Growth- Phasing Schedule). Construction of infrastructure improvements would result in the short-term generation of air emissions, including ozone precursors, reactive organic gasses, and diesel and dust particulates. In addition, ground disturbing activities and improvements to utility infrastructure has the potential to result in exposure to naturally occurring and materials containing asbestos. Land uses in the affected area consist of commercial, office, manufacturing, and light industrial uses, none of which are considered sensitive uses as defined by the APCD’s CEQA Handbook. Infrastructure construction is subject to APCD mitigation measures, and compliance with these measures would reduce potential impacts to less than significant. Relocation of the existing wastewater treatment package plant would not result in additional operational emissions exceeding existing conditions. Based on updates to the APCD’s CEQA Air Quality Handbook in 2012 and 2017, current mitigation measures Item 13 Packet Page 113 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 13 applicable to the infrastructure improvements are identified below, and these measures are equal or more effective than the air quality measures previously-adopted in association with the AASP FEIR: Mitigation Measures AQ-1: Naturally Occurring Asbestos. Naturally Occurring Asbestos (NOA) has been identified as a toxic air contaminant by the California Air Resources Board (ARB). Under the ARB Air Toxics Control Measure (ATCM) for Construction, Grading, Quarrying, and Surface Mining Operations, prior to any grading activities a geologic evaluation shall be conducted to determine if NOA is present within the area that will be disturbed. If NOA is not present, an exemption request must be filed with the District. If NOA is found at the site, the applicant must comply with all requirements outlined in the Asbestos ATCM. This may include development of an Asbestos Dust Mitigation Plan and an Asbestos Health and Safety Program for approval by the APCD. More information on NOA can be found at http://www.slocleanair.org/business/asbestos.asp. AQ-2: Asbestos Material in Demolition. Demolition activities can have potential negative air quality impacts, including issues surrounding proper handling, demolition, and disposal of asbestos containing material (ACM). Asbestos containing materials could be encountered during demolition or remodeling of existing buildings. Asbestos can also be found in utility pipes/pipelines (transite pipes or insulation on pipes). If utility pipelines are scheduled for removal or relocation or a building(s) is proposed to be removed or renovated, various regulatory requirements may apply, including the requirements stipulated in the National Emission Standard for Hazardous Air Pollutants (40CFR61, Subpart M - asbestos NESHAP). These requirements include but are not limited to: 1) notification to the APCD, 2) an asbestos survey conducted by a Certified Asbestos Inspector, and, 3) applicable removal and disposal requirements of identified ACM. More information on Asbestos can be found at http://www.slocleanair.org/business/asbestos.php. AQ-3: Developmental Burning. APCD regulations prohibit developmental burning of vegetative material within San Luis Obispo County. AQ-4: Permits. Portable equipment and engines 50 horsepower (hp) or greater, used during construction activities will require California statewide portable equipment registration (issued by the ARB) or an Air District permit. The following list is provided as a guide to equipment and operations that may have permitting requirements, but should not be viewed as exclusive: power screens, conveyors, diesel engines, and/or crushers; portable generators and equipment with engines that are 50 hp or greater; internal combustion engines; unconfined abrasive blasting operations; concrete batch plants; rock and pavement crushing; tub grinders; and, trommel screens. AQ-5: Standard Mitigation Measures for Construction Equipment. The standard mitigation measures for reducing nitrogen oxides (NOx), reactive organic gases (ROG), and diesel particulate matter (DPM) emissions from construction equipment are listed below: a. Maintain all construction equipment in proper tune according to manufacturer’s specifications; b. Fuel all off-road and portable diesel powered equipment with ARB certified motor vehicle diesel fuel (non-taxed version suitable for use off-road); c. Use diesel construction equipment meeting ARB's Tier 2 certified engines or cleaner off-road heavy-duty diesel engines, and comply with the State off-Road Regulation; d. Use on-road heavy-duty trucks that meet the ARB’s 2007 or cleaner certification standard for on-road heavy-duty diesel engines, and comply with the State On-Road Regulation; e. Construction or trucking companies with fleets that that do not have engines in their fleet that meet the engine standards identified in the above two measures (e.g. captive or NOx exempt area fleets) may be eligible by proving alternative compliance; f. All on and off-road diesel equipment shall not idle for more than 5 minutes. Signs shall be posted in the designated queuing areas and or job sites to remind drivers and operators of the 5 minute idling limit; g. Diesel idling within 1,000 feet of sensitive receptors is not permitted; h. Staging and queuing areas shall not be located within 1,000 feet of sensitive receptors; i. Electrify equipment when feasible; j. Substitute gasoline-powered in place of diesel-powered equipment, where feasible; k. Signs that specify no idling areas must be posted and enforced at the site; and, l. Use alternatively fueled construction equipment on-site where feasible, such as compressed natural gas (CNG), liquefied natural gas (LNG), propane or biodiesel. Item 13 Packet Page 114 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 14 AQ-6: Best Available Control Technology (BACT) for Construction Equipment. If the estimated ozone precursor emissions from the actual fleet for a given construction phase are expected to exceed the APCD threshold of significance after the standard mitigation measures are factored into the estimation, then BACT needs to be implemented to further reduce these impacts. The BACT measures can include: a. Further reducing emissions by expanding use of Tier 3 and Tier 4 off-road and 2010 on-road compliant engines; b. Repowering equipment with the cleanest engines available; and c. Installing California Verified Diesel Emission Control Strategies. These strategies are listed at: http://www.arb.ca.gov/diesel/verdev/vt/cvt.htm AQ-7: Fugitive Dust Mitigation Measures. Projects with grading areas that are less than 4-acres and that are not within 1,000 feet of any sensitive receptor shall implement the following mitigation measures to minimize nuisance impacts and to significantly reduce fugitive dust emissions: a. Reduce the amount of the disturbed area where possible; b. Use of water trucks or sprinkler systems, in sufficient quantities to prevent airborne dust from leaving the site and from exceeding the APCD’s limit of 20% opacity for greater than 3 minutes in any 60-minute period. Increased watering frequency would be required whenever wind speeds exceed 15 mph. Reclaimed (non-potable) water should be used whenever possible. Please note that during drought conditions, water use may be a concern and the contractor or builder shall consider the use of an APCD-approved dust suppressant where feasible to reduce the amount of water used for dust control (contact the APCD for a list of potential dust suppressants); c. All dirt stock-pile areas should be sprayed daily as needed; d. All roadways, driveways, sidewalks, etc. to be paved should be completed as soon as possible, and building pads should be laid as soon as possible after grading unless seeding or soil binders are used; e. All of these fugitive dust mitigation measures shall be shown on grading and building plans; and f. The contractor or builder shall designate a person or persons to monitor the fugitive dust emissions and enhance the implementation of the measures as necessary to minimize dust complaints, reduce visible emissions below 20% opacity, and to prevent transport of dust offsite. Their duties shall include holidays and weekend periods when work may not be in progress. g. Projects with grading areas greater than 4 acres or within 1,000 feet of any sensitive receptor shall implement the measures above, in addition to the following additional mitigation measures to manage fugitive dust emissions such that they do not exceed the APCD’s 20% opacity limit (APCD Rule 401) or prompt nuisance violations (APCD Rule 402): 1) Permanent dust control measures identified in the approved project revegetation and landscape plans should be implemented as soon as possible, following completion of any soil disturbing activities; 2) Exposed ground areas that are planned to be reworked at dates greater than one month after initial grading should be sown with a fast germinating, non-invasive grass seed and watered until vegetation is established; 3) All disturbed soil areas not subject to revegetation should be stabilized using approved chemical soil binders, jute netting, or other methods approved in advance by the APCD; 4) Vehicle speed for all construction vehicles shall not exceed 15 mph on any unpaved surface at the construction site; 5) All trucks hauling dirt, sand, soil, or other loose materials are to be covered or should maintain at least two feet of freeboard (minimum vertical distance between top of load and top of trailer) in accordance with California Vehicle Code (CVC) Section 23114; 6) “Track-Out” is defined as sand or soil that adheres to and/or agglomerates on the exterior surfaces of motor vehicles and/or equipment (including tires) that may then fall onto any highway or street as described in CVC Section 23113 and California Water Code 13304. To prevent ‘track out’, designate access points and require all employees, subcontractors, and others to use them. Install and operate a ‘track-out prevention device’ where vehicles enter and exit unpaved roads onto paved streets. The ‘track-out prevention device’ can be any device or combination of devices that are effective at preventing track out, located at the point of intersection of an unpaved area and a paved road. Rumble strips or steel plate devices need periodic cleaning to be effective. If paved roadways accumulate tracked out soils, the track-out prevention device may need to be modified; 7) Sweep streets at the end of each day if visible soil material is carried onto adjacent paved roads. Water sweepers shall be used with reclaimed water where feasible. Roads shall be pre-wetted prior to sweeping when feasible. d-e) The AASP FEIR did not identify any sensitive receptors in the subject annexation area nor did these documents find any objectional odors would occur as a result of the annexation of these lands into the City. Identified infrastructure Item 13 Packet Page 115 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 15 improvements do not include any actions that would generate objectionable odors. No new sensitive receptors are present within or adjacent to the subject area and future development would occur consistent with the adopted AASP. Therefore, potential impacts would be less than significant. Conclusion: Less than significant impact upon implementation of previously identified mitigation measures. Annexation of the subject area and service to existing uses will not result in changes in ambient air quality conditions in the vicinity. No new development is included as part of the contemplated service and annexation proposal, and implementation of infrastructure improvements is subject to previously- adopted identified mitigation measures noted above as AQ-1 through AQ-7 from the AASP FEIR, as updated based on the current effective APCD CEQA Air Quality Handbook. Future projects would be required to have independent CEQA review and requirements would be imposed as needed to comply with City and APCD Plans. 4. BIOLOGICAL RESOURCES. Would the project: a) Have a substantial adverse effect, either directly or through habitat modifications, on any species identified as a candidate, sensitive, or special status species in local or regional plans, policies, or regulations, or by the California Department of Fish and Game or U.S. Fish and Wildlife Service? 2,4,5, 6,13, 17 X b) Have a substantial adverse effect on any riparian habitat or other sensitive natural community identified in local or regional plans, policies, regulations or by the California Department of Fish and Game or US Fish and Wildlife Service? 2,4,5, 6,13, 17 X c) Have a substantial adverse effect on Federally protected wetlands as defined in Section 404 of the Clean Water Act (including, but not limited to, marshes, vernal pools, etc.) through direct removal, filling, hydrological interruption, or other means? 2,4,5, 6,13, 17 X d) Interfere substantially with the movement of any native resident or migratory fish or wildlife species or with established native resident or migratory wildlife corridors, or impede the use of wildlife nursery sites? 2,4,5, 6,13, 17 X e) Conflict with any local policies or ordinances protecting biological resources, such as a tree preservation policy or ordinance? 2,4,5, 6,13, 17 X f) Conflict with the provisions of an adopted Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan? 2,4,5, 6,13, 17 X Evaluation The larger context Airport Area contains the following natural communities (Figure 3C-1 and Table 3C-2; AASP FEIR): non-native grasslands, including several large patches of valley needlegrass grassland; and a matrix of coyote brush scrub, open water, freshwater marsh and seasonal wetland, riparian woodland and scrub, agricultural fields, and developed and ruderal areas. The larger area analyzed in the FEIR comprised some 404 acres. The subject Fiero Lane-Clarion Court annexation area comprises a smaller subset of approximately 39 acres. Specific habitat types noted in the FEIR for this area included annual grasslands, riparian habitat along the northerly drainage course and ruderal disturbed areas. As noted in the FEIR, none of the smaller subset of subject properties represent a significant sensitive resource area. The annexation will trigger the installation of various road and utility upgrades and improvements to serve the annexation area with City services. These upgrades and improvements, all detailed in Initial Study Sources #8-9-10, are all located within areas of existing disturbance (largely developed public and private streets) such that no utility systems needed to serve the annexation area will require disturbance to established and mapped wetland resources, sensitive natural communities, grassland disturbance riparian habitats or special status species as noted in the AASP FEIR. The relocated wastewater Item 13 Packet Page 116 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 16 treatment package plant would be located within Tract 2368 (East Airport), a subdivision currently within the County of San Luis Obispo, on a site currently developed with existing FLWC facilities (1275 Prospect). Pursuant to the MND that was adopted by the County upon approval of Tract 2368, the proposed relocation site contains non-native grassland habitat, and the results of a botanical survey noted that no sensitive or special-status species are present. a) No modifications to established habitat areas would result from the annexation of the subject Fiero Lane-Clarion Court properties and/or the installation of needed infrastructure (as addressed in Utilities, Transportation or Public Services section noted below) to serve the annexation area. Therefore, potential impacts would be less than significant. Any future projects considered by the City in the subject area would be required to meet City policies and regulations, as well as comply with California Fish and Wildlife and/or US Fish and Wildlife Service standards. b-c) The northern extent of the proposed annexation area is bounded by an existing creek and associated riparian corridor. The parcels adjacent to the creek are currently developed, and future development will be subject to creek setback requirements identified in the AASP and City Zoning Regulations. No infrastructure improvements are identified within or proximate to this riparian corridor, and no removal, filling, hydrological interruptions or other direct impacts to local resources are proposed with the annexation and infrastructure improvements noted herein. Therefore, implementation of the annexation and associated infrastructure improvements (located within established parcels and roadways) would not directly affect any riparian habitat, wetland habitat, or natural communities identified in the AASP FEIR. Therefore, potential impacts would be less than significant. d) The proposed annexation area is largely developed, and does not provide upland habitat suitable for wildlife migratory corridors. The proposed annexation would not require any infrastructure improvements that would affect wildlife within the existing riparian corridor, and no tree removals or disturbance of natural habitats would occur. Therefore, potential impacts would be less than significant, and no mitigation measures are required. e) The AASP FEIR did not identify any significant or sensitive biological resources located within the subject annexation area. No tree removal or other potentially adverse modifications to the lands are proposed by the annexation. Therefore, potential impacts would be less than significant, and no mitigation measures are required. f) There are no adopted Habitat or Natural Community Conservation Plans that identify or address the subject area. Based on the land use category and zoning identified in the City’s General Plan and AASP (Business Park and Services & Manufacturing), and lack of sensitive habitat within areas proposed for infrastructure improvements consistent with the AASP, the Proposed Project would be consistent with the City’s Conservation and Open Space Element. Conclusion: Less than significant impact. 5. CULTURAL RESOURCES. Would the project: a) Cause a substantial adverse change in the significance of a historic resource? (See CEQA Guidelines 15064.5) 4,5,6, 13, 17 X b) Cause a substantial adverse change in the significance of an archaeological resource? (See CEQA Guidelines 15064.5) 4,5,6, 13,17 X c) Directly or indirectly destroy a unique paleontological resource or site or unique geologic feature? 4,5,6, 13, 17 X d) Disturb any human remains, including those interred outside of formal cemeteries? 4,5,6, 13, 17 X Evaluation The AASP FEIR noted that at that time, multiple field surveys had been conducted within the larger Airport Area and with the exception of a historic building near Buckley Road, no cultural resources were noted in the area. The AASP and FEIR provide that any work conducted in areas where surveys have not been done shall include such surveys into their project planning and development. To the extent that road and utility installations occur within previously disturbed areas, it is unlikely that any potential significant impacts to resources may occur. As is the case with all public works projects, in the Item 13 Packet Page 117 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 17 event of unforeseen encounter of materials suspected to be of cultural significance, established protocols include suspending work pending more detailed review and consultation over such finds/findings. Native American Tribes have been notified about the project consistent with City and State regulations. The Northern Chumash Tribal Council (February 8, 2019) has noted that the existence of development and infrastructure within the annexation area does not preclude the presence of cultural resources. No evidence has been provided that would suggest any known resources are located within the subject annexation area. a, b, c, d) Based on the certified AASP FEIR, no cultural resources were documented within the subject area. Based on the adopted MND for Tract 2368, no cultural resources were documented within the parcel proposed for the potentially-relocated wastewater treatment package plant. In addition, pursuant to the adopted MND for Tract 2368, relocation of the plant within this area is subject to the following mitigation measure: Mitigation Measure CR-1: Unanticipated cultural resource discovery. In the event archaeological, historic, or paleontological resources are unearthed or discovered during any construction activities, the following standards apply: a. Construction activities shall cease, and the Environmental Coordinator and Planning Department shall be notified so that the extent and location of discovered materials may be recorded by a qualified archaeologist, and disposition of artifacts may be accomplished in accordance with state and federal law, and in consultation with local Native American tribal organizations. b. In the event archaeological resources are found to include human remains, or in any other case where human remains are discovered during construction, the County Coroner is to be notified in addition to the Planning Department and Environmental Coordinator so that proper disposition may be accomplished. Infrastructure improvements would occur within existing roadways and utility corridors. In the unlikely event of resource discovery, City of San Luis Obispo Archaeological Resource Preservation Program Guidelines Section 4.60.1 requires that all construction activities that may disrupt those materials shall cease and the Community Development Director shall be notified immediately of the discovery of archaeological materials. Based on the results of cultural resource studies within the subject area, location of infrastructure improvements, and compliance with adopted Guidelines in place to protect cultural resources upon inadvertent and unlikely discovery, potential impacts would be less than significant. Conclusion: Less than significant impact upon implementation of previously identified mitigation measures. 6. GEOLOGY AND SOILS. Would the project: a) Expose people or structures to potential substantial adverse effects, including risk of loss, injury or death involving: I. Rupture of a known earthquake fault, as delineated in the most recent Alquist-Priolo Earthquake Fault Zoning Map issued by the State Geologist for the area, or based on other substantial evidence of a known fault? Refer to Division of Mines and Geology Special Publication 42. 2,4,5, 13 X II. Strong seismic ground shaking? 5,13 X III. Seismic-related ground failure, including liquefaction? 5,13 X IV. Landslides or mudflows? 5,13 X b) Result in substantial soil erosion or the loss of topsoil? 5,13 X c) Be located on a geologic unit or soil that is unstable, or that would become unstable as a result of the project, and potentially result in on or off site landslides, lateral spreading, subsidence, liquefaction, or collapse? 2,4,5, 13 X d) Be located on expansive soil, as defined in Table 18-1-B of the Uniform Building Code (1994), creating substantial risks to life or property? 2,4,5, 13 X e) Have soils incapable of adequately supporting the use of septic 2,4,5, X Item 13 Packet Page 118 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 18 tanks or alternative waste water disposal systems where sewers are not available for the disposal of waste water? 13 Evaluation: San Luis Obispo lies within the southern Coast Range Geomorphic Provence, between the Central California Valley and Pacific Ocean. Rock types in the San Luis Obispo area are mainly comprised of volcanic, metavolcanics, and melanges of serpentinite and graywacke sandstone. These rocks are highly fractured and are part of the Mesozoic aged Franciscan Formation. The predominant northwest-southeast trending structures of the Coast Range Province are related to the San Andreas Fault Transform Boundary. According to the Geologic Map of California, San Luis Obispo Sheet published by the California Division of Mines and Geology (CDMG) in 1978, the site vicinity is underlain by the Franciscan Formation and Tertiary intrusive rocks. The nearest fault mapped in the site vicinity by Jennings (1994) is the Edna Fault, which is actually a fault zone that lies approximately 1-2 miles to the northwest of the project site. This fault zone generally trends along the northern flank of the Irish Hills. Previous analysis under the AASP and General Plan has noted that for the general conditions in the subject area, individual geologic studies are required to consider any proposed development projects. These studies have not identified specific areas within the AASP that would be prohibited from development due to geologic conditions or significant adverse conditions. Detailed geologic analysis specific to any proposed site or development would be provided consistent with city regulations to identify potential impacts and mitigation measures accordingly. a) The subject annexation property has not been identified to be subject to significant seismic constraints in the AASP FEIR. Based on this, no significant impacts related to seismic activity, landslides, or mudflow would occur during implementation of infrastructure improvements, and future analysis for project specific development will be conducted to analyze such potential impacts as appropriate with new development, as required by the California Building Code. b-c-d-e) The action of annexation will not result in physical impacts on the environment, with the exception of infrastructure improvements. Based on the location of infrastructure improvements, which would occur in areas with existing roads and utility corridors, and compliance with erosion and stormwater control measures as dictated by the City’s Municipal Code and Standard Specifications and Engineering Standards (May 2018), potential impacts related to soil erosion, expansive soils, or unstable geologic soils conditions would be less than significant. No septic tanks are proposed as part of the annexation area, as existing and future development would connect to City sewer infrastructure. Conclusion: Less than significant Impact 7. GREENHOUSE GAS EMISSIONS. Would the project: a) Generate greenhouse gas emissions, either directly or indirectly, that may have a significant impact on the environment? 11,12 X b) Conflict with an applicable plan, policy or regulation adopted for the purpose of reducing the emissions of greenhouse gases. 2,3,4, 11,12 X Evaluation In response to an increase in man-made greenhouse gas (GHG) concentrations over the past 150 years, California has implemented legislation to reduce statewide emissions. Assembly Bill 32 (AB 32) codifies the Statewide goal of reducing emissions to 1990 levels by 2020 (essentially a 15% reduction below 2005 emission levels) and the adoption of regulations to require reporting and verification of statewide GHG emissions. Senate Bill 32 (SB 32) extends AB 32, requiring the State to further reduce GHGs to 40 percent below 1990 levels by 2030. On December 14, 2017, the California Air Resources Board (ARB) adopted the 2017 Scoping Plan, which provides a framework for achieving the 2030 statewide target set by SB 32. The 2017 Scoping Plan does not provide project-level thresholds for land use development. Instead, it recommends that local governments adopt policies and locally-appropriate quantitative thresholds consistent with a statewide per capita goal of six metric tons (MT) CO2e by 2030 and two MT CO2e by 2050 (ARB 2017). As stated in the 2017 Scoping Plan, these goals may be appropriate for plan-level analyses (city, county, sub-regional, or regional level), but not for specific individual projects because they include all emissions sectors in the State. Item 13 Packet Page 119 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 19 The vast majority of individual projects do not generate sufficient GHG emissions to directly influence climate change. However, physical changes caused by a project can contribute incrementally to cumulative effects that are significant, even if individual changes resulting from a project are limited. The issue of climate change typically involves an analysis of whether a project’s contribution towards an impact would be cumulatively considerable. “Cumulatively considerable” means that the incremental effects of an individual project are significant when viewed in connection with the effects of past projects, other current projects, and probable future projects (CEQA Guidelines, Section 15064[h][1]). a, b) The action of annexation would not result in the generation of greenhouse gas emissions. Continued interim service by the City to existing uses in the County, and the annexation of those existing uses, do not result in changes to air emissions conditions in the area. Construction-related emissions would occur during the implementation of infrastructure improvements; however, these emissions would be short-term, and based on the limited scope of the action, would not have a significant impact on the environment or impair the achievement of greenhouse gas reductions by 2050. Furthermore, compliance with mitigation measures identified in Section 3 (Air Quality) would reduce the project’s contribution to air emissions during construction of infrastructure improvements. Conclusion: Less than significant impact 8. HAZARDS AND HAZARDOUS MATERIALS. Would the project: a) Create a significant hazard to the public or the environment through the routine transport, use, or disposal of hazardous materials? 2,4,5, 13 X b) Create a significant hazard to the public or the environment through reasonably foreseeable upset and accident conditions involving the release of hazardous materials into the environment? 2,4,5, 13 X c) Emit hazardous emissions or handle hazardous or acutely hazardous materials, substances, or waste within one-quarter mile of an existing or proposed school? 2,4,5, 13 X d) Be located on a site which is included on a list of hazardous materials sites compiled pursuant to Government Code Section 65962.5 and, as a result, it would create a significant hazard to the public or the environment? 2,4,5, 13, 15, 16, 17 X e) For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project result in a safety hazard for people residing or working in the project area? 2,4,5, 13 X f) For a project within the vicinity of a private airstrip, would the project result in a safety hazard for people residing or working in the project area? 2,4,5, 13 X g) Impair implementation of, or physically interfere with, the adopted emergency response plan or emergency evacuation plan? 2,4,5, 13 X h) Expose people or structures to a significant risk of loss, injury, or death, involving wildland fires, including where wildlands are adjacent to urbanized areas or where residents are intermixed with wildlands? 2,4,5, 13 X Evaluation The subject annexation area and area to be affected by infrastructure improvements are located on the eastern edge of the San Luis Obispo County Regional Airport, on the west side of Broad Street (State Route 227). Previous studies conducted for the AASP FEIR and LUCE Update FEIR acknowledge significant contamination of soils within the Airport Area as a result of Item 13 Packet Page 120 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 20 the Unocal Tank Farm lightning strike and fire, almost 90 years ago (1926). Ongoing remediation efforts and planning have been actively underway since the late 1980’s along Tank Farm Road. The subject annexation area does not fall within the documented contaminated areas from these prior studies. Based on review of the GeoTracker and Envirostor databases, there are no hazardous waste sites within the annexation area. The project site is located within the boundaries of the AASP, which was reviewed and approved by the Airport Land Use Commission. The annexation area is located within Airport Safety Zones S-1b and S-1-c. Following annexation, future development would be subject to development limitations and standards identified in the AASP and Zoning Regulations Chapter 17.64 (Airport [AOZ] Overlay Zone), which are required to ensure compatibility with existing and future airport operations, and to prohibit the establishment of incompatible uses and further expansion of incompatible uses what could detrimentally affect long-term economic viability of the airport, and to avoid or minimize exposure of persons to potential hazards associated with current and future airport operations. a, b) The proposed annexation will not create a hazard to the public as there will be no transport, use or disposal of hazardous chemicals permitted by the annexation action. Implementation of infrastructure improvements would consist of standard construction practices and would not involve the use or storage of large quantities of hazardous materials. Small quantities of potentially hazardous materials such as fuels, lubricants, and solvents would be used during construction of the project. California Health and Safety Code, Division 20, Chapter 6.5, and California Code of Regulations Title 22 – Hazardous Waste Management states that waste that is toxic, corrosive, flammable, or reactive when tested in accordance with the California Code of Regulations, Title 22, Article 11, Section 66693, must be handled, stored, transported, and disposed of in accordance with these regulations, which are more stringent than federal regulations. The transport of materials during the construction of the project could pose a threat to residents and people in the area. An accident involving such trucks could potentially expose nearby people to health hazards. However, U.S. EPA and U.S. Department of Transportation laws and regulations have been promulgated to track and manage the safe interstate transportation of hazardous materials and waste. U.S. EPA administers permitting, tracking, reporting, and operations requirements established by the Resource Conservation and Recovery Act (RCRA). U.S. Department of Transportation regulates the transportation of hazardous materials through implementation of the Hazardous Materials Transportation Act. This act administers container design, labelling, and driver training requirements. State and local agencies enforce the application of these acts and provide coordination of safety and mitigation responses in the case that accidents involving hazardous materials occur. Enforcement of these regulations and rapid response by local agencies would ensure that hazards to the public or environment through reasonably foreseeable upset and accident conditions involving the release of hazardous materials into the environment are less than significant. In addition, the project would be required to adhere to all federal, state, and local regulations, as well as the policies in the City of San Luis Obispo Safety Element, which discuss safety and reducing the risks of hazardous material exposure. Program 9.6 of the City’s Safety Element states that the City shall ensure that transportation of hazardous materials follows Caltrans- approved routes, and that all necessary safety precautions are taken to prevent hazardous material spills. Therefore, based on the limited scope and location of the infrastructure improvements and compliance with existing regulations, potential impacts would be less than significant. c) No hazardous emissions would be permitted by the annexation and there is not a school located within ½ mile of the annexation area or location of infrastructure improvements. Therefore, potential impacts would be less than significant. d) The subject annexation and infrastructure improvement areas are not located on a designated hazardous site nor listed to include materials that would represent a significant hazard to the public. Therefore, potential impacts would be less than significant. e) The property is located near the Regional Airport but the continued operation of existing uses, and any proposals for new uses following annexation, must be consistent with City General Plan, Zoning Regulations, and AASP (which was reviewed and approved by the Airport Land Use Commission). Application of those standards will prevent development within the subject annexation area from becoming a hazard to airport operations. Implementation of infrastructure improvements would not result in the creation of any features or involve any activities that would result in a hazard related to air traffic. Therefore, potential impacts would be less than significant. f) The property is not located near a private airstrip; therefore, potential impacts would be less than significant. Item 13 Packet Page 121 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 21 g) The subject annexation area will be subject to San Luis Obispo city emergency response and evacuation plans. Annexation of this area and implementation of infrastructure improvements will not impair the ability of the city to implement its designated plans and exercise its public safety responsibilities in the area. Therefore, potential impacts would be less than significant. h) The subject annexation area and areas identified for infrastructure improvements are located within a low fire hazard area, as identified on the City’s Safety Element Wildland Fire Hazard Map, and the area consists of a largely developed industrial area, which does not contain wildland fuels that could expose persons to significant risk from wildland fires. Therefore, potential impacts would be less than significant. Conclusion: Less than significant impact. 9. HYDROLOGY AND WATER QUALITY. Would the project: a) Violate any water quality standards or waste discharge requirements? 2,4,5, 6,13 X b) Substantially deplete groundwater supplies or interfere substantially with groundwater recharge such that there would be a net deficit in aquifer volume or a lowering of the local groundwater table level (e.g. The production rate of pre-existing nearby wells would drop to a level which would not support existing land uses for which permits have been granted)? 2,4,5, 6,13 X c) Substantially alter the existing drainage pattern of the site or area in a manner which would result in substantial erosion or siltation onsite or offsite? 2,4,5, 6,13 X d) Substantially alter the existing drainage pattern of the site or area in a manner which would result in substantial flooding onsite or offsite? 2,4,5, 6,13 X e) Create or contribute runoff water which would exceed the capacity of existing or planned stormwater drainage systems or provide substantial additional sources of polluted runoff? 2,4,5, 6,13 X f) Otherwise substantially degrade water quality? 2,4,5, 6,13 X g) Place housing within a 100-year flood hazard area as mapped on a Federal Flood Hazard Boundary or Flood Insurance Rate Map or other flood hazard delineation map? 2,4,5, 6,13, 14 X h) Place within a 100-year flood hazard area structures which would impede or redirect flood flows? 2,4,5, 6,13, 14 X i) Expose people or structures to a significant risk of loss, injury or death involving flooding, including flooding as a result of the failure of a levee or dam? 2,4,5, 6,13 X j) Inundation by seiche, tsunami, or mudflow? 2,4,5, 6,13 X Evaluation The principal drainage for the Airport Area is the East Branch San Luis Obispo Creek, which joins San Luis Obispo Creek southwest of the project area. Drainage from the Airport area is collected into Tank Farm Creek and the East Branch San Luis Obispo Creek. Drainage travels through the area on a generally southwesterly course until the East Branch San Luis Obispo Creek joins San Luis Obispo Creek. a, f) As analyzed in the AASP FEIR, potential impacts related to stormwater and water quality concerns are addressed by imposing established permit activity requirements, such as the State Water Board’s National Pollutant Discharge Elimination System (NPDES) construction activity stormwater permit and best management practices (BMPs). The AASP and City Item 13 Packet Page 122 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 22 requirements (including the Municipal Code and City Engineering Standards), impose these analyses and permitting requirements before allowing projects to proceed. Such analysis would be undertaken as required by the AASP for any future development project within the subject annexation area. As the annexation action does not include physical development beyond infrastructure improvements, and construction activities associated with infrastructure improvements would be subject to existing erosion control and water quality regulations, potential impacts would be less than significant and no mitigation is required. b) The subject annexation does not include groundwater extraction. The area is presently being served by the City’s municipal water system. Therefore, potential impacts would be less than significant. c-d) No alterations of drainage patterns are permitted or proposed by the subject annexation and infrastructure improvements. Therefore, potential impacts would be less than significant. e) The proposed annexation is subject to a 2015 Memorandum of Agreement (MOA) and 2019 First Amendment to said MOA to provide interim services and future annexation to a largely developed business and industrial area in the County, at Fiero Lane and Clarion Court. Annexation of those existing uses do not result in changes to drainage patterns or storm runoff conditions in the area. Potential impacts would be anticipated to include impervious surfaces and surface water pollution, and the potential to reorient water courses in the Plan area. Provisions from the 2015-2019 MOA Concerning Storm Drainage Infrastructure include the following: The existing storm drain within the existing County right-of-way is owned and maintained by the County. The Fiero Lane Water Company (Company) shall coordinate with the County to arrange for the inspection and cleaning of the storm drain system. In the event the County is unwilling to perform the work prior to annexation, the City and Company shall work cooperatively to arrange for an alternative means of cleaning with concurrence and permission from the County. With these provisions included in the Project Description, storm water conditions will be adequately addressed and can be found to comply with City infrastructure standards at the time of annexation. The proposed annexation and infrastructure improvements would not create or contribute runoff water which would exceed the capacity of existing or planned stormwater drainage systems or provide substantial additional sources of polluted runoff because no new impervious surfaces would be created. Therefore, potential impacts would be less than significant. g-h-i) The northwest corner of the proposed annexation area near Santa Fe Road is located within Flood Zone A. Pursuant to the Federal Emergency Management Agency, Flood Zone A is identified for areas subject to inundation by the one-percent- annual-chance flood event, and no Base Flood Elevations (BFEs) or flood depths are identified. Mandatory flood insurance purchase requirements and floodplain management standards apply to properties within this zone. No housing is proposed within the annexation area and no improvements are proposed that would block or impede floodwaters. Any future development within the annexation area, and within the flood zone, would be subject to Zoning Regulations Chapter 17.78 Flood Damage Prevention, which is in place to: promote the public health, safety, and general welfare, and to minimize public and private losses due to flood conditions in specific areas by legally enforceable regulations applied uniformly throughout the community to all publicly and privately-owned land within flood-prone, mudslide (i.e., mudflow), and/or flood-related erosion areas. Therefore, potential impacts would be less than significant. j) The subject site is not identified by the AASP FEIR to be subject to seiche, tsunami or mudflows; therefore, potential impacts would be less than significant. Conclusion: Less than significant impact 10. LAND USE AND PLANNING. Would the project: a) Physically divide an established community? 2,4 X b) Conflict with applicable land use plan, policy, or regulation of an agency with jurisdiction over the project adopted for the purpose of avoiding or mitigating an environmental effect? 2,4 X c) Conflict with any applicable habitat conservation plan or natural community conservation plans? 2,4 X Item 13 Packet Page 123 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 23 Evaluation The area is designated for business park and service-manufacturing uses under the General Plan and AASP. Annexation of the project area was anticipated in the AASP, which identified pre-zoning for the site (Business Park, Manufacturing, Service Commercial) at the time the AASP was adopted. a) The subject annexation area is located within a larger developed area of southern San Luis Obispo. The properties comprising Fiero-Clarion are approximately 90% developed at this time. The subject area is a continuation of development surrounding the general vicinity and the annexation of the site would bring it officially into the San Luis Obispo community without modifying any of the current land uses of the area. The annexation will not physically divide this established community, as it is currently included in the AASP and associated long-term planning maps for the area. Therefore, no impact would occur. b) As noted in the AASP FEIR, the subject annexation is consistent with City policies established under the General Plan and AASP and complies with the San Luis Obispo County Airport Land Use Plan (ALUP). No changes to pre-zoning or land use categories are proposed. The proposed annexation is consistent with applicable land use planning documents for the area. Therefore, potential impacts would be less than significant. c) As noted in Section 4 (Biological Resources) there are no Habitat or Natural Community Conservation Plans applicable to the subject property. Conclusion: Less than significant impact. 11. MINERAL RESOURCES. Would the project: a) Result in the loss of availability of a known mineral resource that would be of value to the region and the residents of the state? 2,4 X b) Result in the loss of availability of a locally important mineral resource recovery site delineated on a local general plan, specific plan or other land use plan? 2,4 X Evaluation The properties subject to the annexation are located in an urbanized area. There are no known mineral resources in the area, and there has not been any mining or mineral extraction uses of the subject properties. a, b) Based on the location of the proposed annexation and infrastructure improvements, no impact to mineral resources would occur. Conclusion: No impact. 12. NOISE. Would the project result in: a) Exposure of persons to or generation of noise levels in excess of standards established in the local general plan or noise ordinance, or applicable standards of other agencies? 2,4,5, 13 X b) Exposure of persons to or generation of excessive ground-borne vibration or ground-borne noise levels? 2,4,5, 13 X c) A substantial permanent increase in ambient noise levels in the project vicinity above levels existing without the project? 2,4,5, 13 X d) A substantial temporary, periodic, or permanent increase in ambient noise levels in the project vicinity above levels existing without the project? 2,4,5, 13 X Item 13 Packet Page 124 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 24 e) For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project expose people residing or working in the project area to excessive noise levels? 2,4,5, 13 X f) For a project within the vicinity of a private airstrip, would the project expose people residing or working in the project area to excessive noise levels? 2,4,5, 13 X Evaluation Noise-sensitive land uses are those land uses that can be adversely affected by elevated or increased noise levels. Sensitive land uses generally include residences, schools, libraries, nursing homes, and churches. The primary sources of noise within the subject area include traffic on major roadways and highways, and aircraft operating in and out of the County Airport. Stationary noise sources include the day-to-day activities associated with the existing land uses in the planning area. The subject annexation area is designated for service and manufacturing uses under the General Plan and AASP. Potentially sensitive receptors include existing offices in the area. Noise generation occurs most significantly from roadway traffic on Broad Street (State Route 227). Noise from nearby airport operations occurs on an intermittent basis. Increases in traffic or airport operations will cause incremental increases in background ambient noise levels. As indicated in Table 3F-3 of the AASP FEIR, properties within 100 feet of Broad Street (State Route 227) are predicted to be exposed to traffic noise levels that exceed the planning standard of 60 dBA-Ldn. More current noise contour modeling conducted for the LUCE Update EIR show that upon City buildout, the noise level 50 feet from the roadway centerline would be 71 decibels. Other sources of transportation-related noise include Tank Farm Road and Santa Fe Road. The proposed annexation area is located approximately 600-700 feet south of Tank Farm Road, and the western edge of the annexation area is bound by Santa Fe Road. As indicated in AASP FEIR Table 3F-3, properties within 100 feet of Santa Fe Road are predicted to be exposed to traffic noise levels ranging from 56 to 66 Ldn within 100 feet of the roadway. a, b, c, d) The LUCE Update FEIR models a noise level of approximately 71 dB within 50 feet of the Broad Street centerline (transportation-related noise). As documented in the LUCE Update EIR Background Report and County Airport Land Use Plan, the annexation area is located with the 55 and 60 dB noise contours. The AASP FEIR identified potential impacts due to exposure to traffic noise (Impact N-1: Exposure of Land Uses to Traffic Noise in Excess of the Standards for Exterior Noise Exposure specified in Table 3F-1; Impact N-2: Increase in Permanent or Temporary Ambient Noise Levels as Indicated in Table 3F-3, Substantial Increases in Noise Would Occur Along Some Roadways) and aircraft noise (Impact N-3: Exposure of Residential Uses to Aircraft Noise). The AASP FEIR determined that implementation of mitigation measures identified in the City’s Noise Element would mitigate impacts related to noise exposure to less than significant. While the annexation action does not permit or approve future development, discretionary review of future projects would occur, and would be subject to the requirements of the City’s Municipal Code, including Chapter 17.74 (Zoning Regulations, Airport Overlay Zone, Noise) and Chapter 9.12 (Noise Control), consistent with the AASP FEIR. Implementation and construction of identified infrastructure improvements would be short-term, and limited to areas within existing roadways and utility corridors. Implementation of the project would not result in any long-term increase in noise. Therefore, potential impacts would be less than significant. e) Existing background noise conditions include instantaneous increases from airport operations. The County’s ALUP, AASP, and AASP FEIR recognize the need to minimize noise generation, while balancing the viability of the airport with local land uses. On-going operations at the County airport consistent with present regulations will continue to minimize conflicts between nearby and adjoining uses. Increases in noise levels as analyzed by the AASP FEIR did not find these conditions to be adverse and unavoidable. Instead the AASP FEIR acknowledged various building and site planning techniques, along with land use restrictions, that have been incorporated into the AASP. While the proposed action does not include development of land uses, future development would be subject to standards identified in the City’s Noise Element and Municipal Code, which regulate noise exposure. Therefore, potential impacts would be less than significant. f) The subject site is not located in the vicinity of a private airstrip; therefore, impacts would be less than significant. Item 13 Packet Page 125 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 25 Conclusion: Less than significant Impact 13. POPULATION AND HOUSING. Would the project: a) Induce substantial population growth in an area, either directly (for example by proposing new homes or businesses) or indirectly (for example, through extension of roads or other infrastructure)? 2,4,5, 13 X b) Displace substantial numbers of existing housing or people necessitating the construction of replacement housing elsewhere? 2,4,5, 13 X c) Displace substantial numbers of people, necessitating the construction of replacement housing elsewhere? 2,4,5, 13 X Evaluation The AASP and City General Plan designate the subject annexation area for light industrial, commercial and manufacturing uses. These uses would not include residential occupancies of the area. These designations preclude new residential growth, or displacement of existing housing, within the subject annexation area. a-c) The proposed annexation will not result in new residential development or the relocation of existing housing within the annexation area. Only new uses consistent with the AASP and General Plan would be permitted. Conclusion: Less than significant impact. 14. PUBLIC SERVICES. Would the project result in substantial adverse physical impacts associated with the provision, or need, of new or physically altered government facilities, the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times, or other performance objectives for any of the public services: a) Fire protection? 4,5,10 X b) Police protection? 4,5,10 X c) Schools? 4,5,10 X d) Parks? 4,5,10 X e) Roads and other transportation infrastructure? 4,5,10 X f) Other public facilities? 4,5,10 X Evaluation The project area is currently served by the County Sheriff and County Fire/California Department of Forestry (CDF). There is also a mutual aid agreement between the County and City for fire service response. The project area is within the San Luis Coastal School District. The annexation is being processed pursuant to a 2015 Memorandum of Agreement (MOA) and 2019 First Amendment to said MOA to provide interim services and annexation to a developed business and industrial area in the County, at Fiero Lane and Clarion Court. Continued interim service by the City to existing uses in the County, and the future annexation of those existing uses, are subject to the March 2016 “Plan For Services” for the Fiero Land-Clarion Court Annexation Area (Source 10). a) Fire protection for the subject annexation area would be provided by the nearest staffed City Station #1 located at 2160 Santa Barbara Avenue and the County Fire/CDF Station #21 at the airport runway. Response times are considered four minutes or less, based on LUCE EIR Figure 4.13-1 (Fire Department Four-Minute Response Times). The AASP provides that the City will consider increases to staffing subject to budgetary analysis and overall city needs. The AASP notes that interim improvements may be provided at the Chevron and Avila Ranch development areas until permanent facilities are available. The City has completed the creation of a Community Facilities District (CFD) in association with the Avila Ranch development project (also located within the AASP) to facilitate funding for a new interim fire station in the area. The AASP Item 13 Packet Page 126 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 26 FEIR, AASP, and the proposed Plan for Services for this proposed annexation address fire service needs for this area of the city. Therefore, implementation of the proposed annexation would not result in a significant impact to fire services, such that construction of a new facility would be required. b) The City Police Department currently provides mutual aid response to the AASP. Similar to fire services, police services will undergo consideration for increases as annexation of the subject property is completed as noted in the AASP FEIR and Plan for Services. Additional personnel and equipment will be considered under standard budgetary programs. The AASP FEIR, AASP, and the proposed Plan for Services for this proposed annexation address police service needs for this area of the City. Therefore, implementation of the proposed annexation would not result in a significant impact to police services, such that a new police facility would be required. c, d) As the proposed project consists of the annexation of existing commercial and industrial businesses into the City, and the employees of these businesses are currently served by existing schools and parks, and the proposed annexation area is approximately 90 percent built-out, potential impacts to schools and parks would be less than significant. e) Provisions from the 2015-2019 MOA concerning street infrastructure include: 1. The Fiero Lane Water Company (COMPANY) will construct improvements and upgrades to Fiero Lane so as to bring the street infrastructure into a " state of good repair". For purposes of this requirement, the definition of state of good repair includes: a. Upgrading traffic control signs and markings to meet current federal, State and City standards; b. Upgrade street crossings to meet Federal and City ADA ramp and crossing standards; c. Perform pavement maintenance as needed to meet City minimum pavement condition index requirements; d. Remove and replace any damaged sections of sidewalk. 2. It is the intent of the agreement that Old Santa Fe Road south of the City/County boundary line, located immediately south of the Santa Fe Bridge, will remain under County jurisdiction after annexation of properties on Clarion Court. If as part of the LAFCO process, the City is required to take all, or part, of Old Santa Fe Road under City jurisdiction, the following requirements shall be required: a. The COMPANY will construct improvements and upgrades to Old Santa Fe Road, that is to be annexed to the City, so as to bring the street infrastructure into a "state of good repair". For purposes of this requirement, the definition of state of good repair includes: b. Upgrading traffic control signs and markings to meet current federal, State and City standards; and c. Upgrade street crossings at Clarion Court and the mini storage property to meet Federal and City ADA ramp and crossing standards d. Perform pavement maintenance as needed to meet City minimum pavement condition index requirements. The limits of required improvements begin at the south side of the existing bridge across the East Fork of San Luis Creek and terminate at the cul-de-sac fronting the mini storage property. No improvements to the bridge are proposed. With these provisions included in the Project Description, transportation and street infrastructure conditions will be adequately addressed and can be found to comply with City infrastructure standards at the time of annexation. As such, no physical impacts are attributed to the time needed for infrastructure installations, fee payments and annexation as contemplated in the annexation of lands subject to the MOA. f) Other public services, such as transit, solid waste and recycling and general city administrative services are not considered to be significantly impacted by the addition of the subject annexation area, based on the Project’s consistency with the AASP and General Plan. Conclusion: Less than significant impact. 15. RECREATION. Would the project: a) Increase the use of existing neighborhood and regional parks or 2,4 X Item 13 Packet Page 127 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 27 other recreational facilities such that substantial physical deterioration of the facility would occur or be accelerated? b) Include recreational facilities or require the construction or expansion of recreational facilities, which might have an adverse physical effect on the environment? 2,4 X Evaluation a, b) The annexation of the project area and existing uses would result in less than significant impacts from new or increased residential demands for added parks and recreation services because there are no residential zones within the proposed annexation area. As noted in Section 14 there will be no significant demands for school or parks and recreation services based on annexation of the subject properties. The annexation of existing land uses, and implementation of infrastructure improvements would not result in impacts from new or increased residential demands for added parks and recreation services. Therefore, potential impacts would be less than significant. Conclusion: Less than significant impact 16. TRANSPORTATION/TRAFFIC. Would the project: a) Conflict with an applicable plan, ordinance or policy establishing measures of effectiveness for the performance of the circulation system, taking into account all modes of transportation including mass transit and non-motorized travel and relevant components of the circulation system, including but not limited to intersections, streets, highways and freeways, pedestrian and bicycle paths, and mass transit? 2,3,4, 5,10, 13 X b) Conflict with an applicable congestion management program, including, but not limited to level of service standards and travel demand measures, or other standards established by the county congestion management agency for designated roads or highways? 2,3,4, 5,10, 13 X c) Result in a change in air traffic patterns, including either an increase in traffic levels or a change in location that results in substantial safety risks? 2,3,4, 5,10, 13 X d) Substantially increase hazards due to a design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g. farm equipment)? 2,3,4, 5,10, 13 X e) Result in inadequate emergency access? 2,3,4, 5,10 X g) Conflict with adopted policies, plans, or programs regarding public transit, bicycle, or pedestrian facilities, or otherwise decrease the performance or safety of such facilities? 2,3,4, 5,10, 13 X Evaluation The LUCE EIR evaluated potential impacts of build-out, including build-out of adopted Specific Plans. The Transportation section of the LUCE EIR states that: “Cumulative buildout of the proposed LUCE Update includes buildout of areas within existing city boundaries, as well as buildout of the identified expansion areas and within the sphere of influence. The increased development results in increased traffic, biking, walking, and transit usage throughout the city. By its nature, the LUCE Update considers cumulative development within the city and potential expansion areas." Future development within the annexation area would be subject to the adopted Circulation Element, the AASP, and transportation impact fees. The proposed annexation area is access via Broad Street (State Route 227), Tank Farm Road, and Santa Fe Road. Continued interim service by the City to existing uses in the County, and the future annexation of those existing uses, do not result in Item 13 Packet Page 128 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 28 changes to traffic generation and circulation conditions in the area that were not previously considered in the AASP Final EIR and EIR Addendum, the City’s LUCE updates in 2014, and as contemplated by the 2015 MOA concerning traffic mitigations and impact fees. Payment of these fees by new development, coupled with contributions negotiated under the MOA, will address cumulative traffic impacts. The Airport and Margarita Specific Plan Areas were considered under a unified Program EIR. This EIR analyzed traffic conditions on a regional basis, not distinguishing the planning areas from one another. For the purposes of impacts and mitigation measures, this analysis drove the preparation of the Specific Plan Transportation sections, each dealing with improvements that could be implemented on both a localized scale and in a regional context for citywide mitigation programs. The AASP and Plan for Services address a series of projects to be completed as part of the annexation process. These improvements primarily include pavement upgrades and bringing the roadway infrastructure for the annexation area up to city standards. These improvements are noted as traffic control and striping, accessibility ramps and walks, pavement maintenance and improvement to Old Santa Fe Road in the area. With these improvements the project will address its needs as a part of the annexation process outlined in the MOA. Section 14, above, of this Initial Study includes additional details regarding transportation infrastructure included in the Proposed Project. a-b) The proposed annexation area is approximately 90 percent built-out, and generates traffic on existing road and highway infrastructure under existing conditions. Future development would be subject to transportation impact fee programs. Transportation improvements provided under the MOA and PFS include upgrading street signs, striping, sidewalk repairs, handicapped access features and curb painting reflect city standards. The annexation area does not include street lighting that would conflict with City Lighting and Night Sky Preservation standards identified Zoning Regulations Chapter 17.70.100. For possible safety considerations, streetlights at the main entry streets of Fiero and Clarion are under consideration as part of the improvements plan preparation. This will be subject to AASP lighting standards (Goal 5.18, Standards 5.18.1 through 5.18.7), which include provisions for maximum height (30 feet on Broad Street, 20 feet on other streets). The proposed annexation will not conflict with City Circulation Element policies, nor be contrary to established transportation management, public transit and roadway improvement policies of the city. c) The subject site is approximately 90 percent built-out, and will not require new public roads to access the subject properties. The annexation of the subject property does not include changes in traffic patterns for vehicles or aircraft. Therefore, potential impacts would be less than significant. d) No changes in design of existing roadways are required by the proposed annexation; therefore, potential impacts would be less than significant. e) The subject site is approximately 90 percent built-out and will not require new access to provide for emergency response. Therefore, potential impacts would be less than significant. f) Existing public transit services and bicycle/pedestrian ways will not be changed. Increased improvements to sidewalks, handicapped accessibility and similar facilities are anticipated as part of the final annexation improvement plan. The proposed annexation will not conflict with established public transit, bicycle or pedestrian facilities or policies and regulations governing same. Conclusion: Less than significant impact. 17. TRIBAL CULTURAL RESOURCES. Would the project cause a substantial adverse change in the significance of a tribal cultural resource, defined in Public Resources Code section 21074 as either a site, feature, place, cultural landscape that is geographically defined in terms of the size and scope of the landscape, sacred place, or object with cultural value to a California Native American tribe, and that is: a) Listed or eligible for listing in the California Register of Historical Resources, or in a local register of historical resources as defined in Public Resources Code section 5020.1(k), or 2,4, 17 X b) A resource determined by the lead agency, in its discretion and 2,4, Item 13 Packet Page 129 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 29 supported by substantial evidence, to be significant pursuant to criteria set forth in subdivision (c) of Public Resources Code Section 5024.1. In applying the criteria set forth in subdivision (c) of Public Resources Code Section 5024.1, the lead agency shall consider the significance of the resource to a California Native American tribe. 17 X Evaluation On December 21, 2018, local Native American tribal groups were formally noticed that an Initial Study of Environmental Impact was being completed for the proposed project and invited to provide consultation on the proposed project. The Northern Chumash Tribal Council engaged in a tribal consultation meeting on February 8, 2019 and noted that the existence of development and infrastructure within the annexation area does not preclude the presence of cultural resources. a, b) Based on the certified AASP FEIR and tribal consultation, no historical resources or tribal cultural resources have been identified within the subject area. Based on the adopted MND for Tract 2368, no cultural resources were documented within the parcel proposed for the relocated wastewater treatment package plant. In addition, pursuant to the adopted MND for Tract 2368, relocation of the plant within this area is subject to the following mitigation measure: Mitigation Measure CR-1: Unanticipated cultural resource discovery. In the event archaeological, historic, or paleontological resources are unearthed or discovered during any construction activities, the following standards apply: c. Construction activities shall cease, and the Environmental Coordinator and Planning Department shall be notified so that the extent and location of discovered materials may be recorded by a qualified archaeologist, and disposition of artifacts may be accomplished in accordance with state and federal law, and in consultation with local Native American tribal organizations. d. In the event archaeological resources are found to include human remains, or in any other case where human remains are discovered during construction, the County Coroner is to be notified in addition to the Planning Department and Environmental Coordinator so that proper disposition may be accomplished. Infrastructure improvements would occur within existing roadways and utility corridors. In the unlikely event of resource discovery, City of San Luis Obispo Archaeological Resource Preservation Program Guidelines Section 4.60.1 requires that all construction activities that may disrupt those materials shall cease and the Community Development Director shall be notified immediately of the discovery of archaeological materials. Based on the results of cultural resource studies within the subject area, location of infrastructure improvements, and compliance with adopted Guidelines in place to protect cultural resources upon inadvertent and unlikely discovery, potential impacts would be less than significant. Conclusion: Less than significant impact upon implementation of identified mitigation measures. 18. UTILITIES AND SERVICE SYSTEMS. Would the project: a) Exceed wastewater treatment requirements of the applicable Regional Water Quality Control Board? 2,4,10 X b) Require or result in the construction or expansion of new water treatment, waste water treatment, water quality control, or storm drainage facilities, the construction of which could cause significant environmental effects? 2,4, 10,17 X c) Require or result in the construction of new storm water drainage facilities or expansion of existing facilities, the construction of which could cause significant environmental effects? 2,4,10 X d) Have sufficient water supplies available to serve the project from existing entitlements and resources, or are new and expanded water resources needed? 2,4, 10,18, 19 X Item 13 Packet Page 130 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 30 e) Result in a determination by the wastewater treatment provider which serves or may serve the project that it has adequate capacity to serve the project’s projected demand in addition to the provider’s existing commitment? 2,4,10 X f) Be served by a landfill with sufficient permitted capacity to accommodate the project’s solid waste disposal needs? 2,4,10 X g) Comply with federal, state, and local statutes and regulations related to solid waste? 2,4,10 X Evaluation The LUCE EIR evaluated potential impacts of build-out, including build-out of adopted Specific Plans. The City’s General Plan addresses build-out of the City, including annexation areas (and including the subject site). The City’s General Plan and 2018 Water and Wastewater Element conclude that there is adequate water supply to serve build-out of the General Plan (including the subject annexation area). The proposed annexation area is currently served by the Fiero Lane Water company, groundwater wells, collection system, and a community wastewater treatment plan. The proposed project involving annexation of the subject properties would require the service of water, wastewater and recycled water for irrigation. The 2015 AASP FEIR Addendum updated and analyzed resource availability and service demands for the EACP / S-G annexation area and found the City’s capacity for services to the area can support the annexation. Continued interim service by the City to existing uses in the County, and the future annexation of those existing uses, are subject to the March 2016 “Plan For Services” for the Fiero Land-Clarion Court Annexation Area (Source 10). Provisions from the 2015-2019 MOA Concerning Potable Water: 1. Record easements for CITY facilities on private property. 2. Pressure and leak test existing water mains that will become CITY facilities (Fiero Lane only). 3. Public and private water mains shall be sized to meet fire flow requirements. 4. Decommission and dismantle of groundwater collection, treatment, and pumping facilities. 5. Replace fire hydrants with CITY standard hydrants. 6. Replace all water meters. Meters shall be properly sized, accurate and meet City standards. 7. Water Services shall be upgraded to current City standard. 8. Backflow preventers shall be installed where recommended by County Cross Connection Inspector. 9. Isolation valves shall be installed. Provisions from the 2015-2019 MOA Concerning Wastewater: 1. Work with the CITY and County Airport to facilitate the CITY takeover of that portion of the Airport gravity sewer line in Fiero Lane. 2. Replace or rehabilitate failing portion of the Airport gravity sewer line — Manhole M 17- 15 to M17-8. 3. Fiero Lane System — Manhole M17- 18 — cut open pipe to expose invert and access flow. Manhole M 17- 18 to M 17- 19 — correct grade defects. 4. Tie over eight (8) sewer laterals on Fiero Lane to the Airport gravity sewer line or new City gravity main in Fiero Lane, if available. Any necessary repairs to private laterals shall be made by FLWC prior to tie over. 5. Abandon existing FLWC gravity main once laterals are tied over to deeper airport gravity line. 6. The wastewater treatment system will be decommissioned, removed and left for COMPANY to salvage or dispose in accordance with state standards. 7. Temporary and permanent easements shall be granted to the City for replacement of the existing gravity main in Fiero Lane and the existing Airport sewer pump station. This may include the site of the existing FLWC wastewater treatment system site, or another suitable site. FLWC will provide recorded permanent easement to the City of San Luis Obispo for the site of the existing FLWC wastewater treatment system for the construction of a City lift station to serve the area. The FLWC existing electrical service will be provided to the City. Clear access will be provided to the easement area from Fiero Lane. 8. The leach fields behind Clarion Court will be abandoned in accordance with applicable code after all Clarion properties are connected to the City wastewater collection system via private gravity or private force main connections. Item 13 Packet Page 131 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 31 a, b, e) The project area is currently served by a community wastewater collection and treatment system operated by the Fiero Lane Water Company. Upon annexation, the existing treatment system will be decommissioned and infrastructure improvements will be implemented pursuant to the MOA in order to connect the area to the City sewer wastewater collection system. Wastewater collection and treatment demand capacity analysis has been conducted by the City’s Utilities Department and the City determined that the wastewater collection system and Water Resources Recovery Facility has adequate capacity to serve the AASP, including the annexation area (2015 FEIR Addendum) within the permit requirements of the State Water Board, and as noted in Section 8 of the Plan For Services. As noted in the project description, if the pending annexation of the East Airport Area is delayed, or improvements are not completed at the time of the FLWC wastewater plant decommissioning, it is possible this treatment plant would be moved to the East Airport Annexation Area to serve those users on an interim basis. The proposed parcel identified by FLWC is APN 076-512-028 (1275 Prospect) – this parcel is currently developed with existing FLWC facilities. In such a case, FLWC proposes that treated wastewater would be conveyed via the lift station and force main on the East Airport area to the existing disposal field currently serving the FLWC plant, west of Broad Street. This initial study assesses the potential impacts of infrastructure improvements, including the potential relocation of the wastewater treatment plan, and concludes that potential impacts would be less than significant, or less than significant upon implementation of mitigation measures identified in the AASP EIR and County of San Luis Obispo Morabito-Burke MND (refer to Initial Study Sections 3 [Air Quality], 5 [Cultural Resources], and 17 [Tribal Cultural Resources]). Based on the City’s available capacity to serve the annexation area, completion of infrastructure improvements identified above and incorporated into the Project Description, and implementation of identified mitigation measures, potential impacts would be less than significant. c) The existing subdivision was constructed with storm drain infrastructure, which will continue to function in the same capacity following annexation. Storm drainage improvements anticipated on a regional basis were identified in the City’s Storm Drain Master Plan for the Airport Area. These requirements are included in the AASP, Plan for Services under the MOA and under standard city conditions for new development. New water treatment will not be required to continue current service. Therefore, potential impacts would be less than significant. d) Water service to the area, albeit on-going since 2015, is included in the City’s Urban Water Management Plan and General Plan documents. The AASP-Margarita SP EIR Addendum completed in November 2015 (Source 5) finds that the city has adequate water supplies to serve the subject annexation area. As documented in the City’s 2018 Water Resources Status Report and Water and Wastewater Element (2018), 10,130 acre-feet of water availability is sufficient for build-out of the City’s General Plan, including the proposed annexation area. In addition, under existing conditions, the City is providing water to FLWC. Based on existing conditions, the City’s available capacity to serve the annexation area, and completion of infrastructure improvements, potential impacts would be less than significant. f-g) Evidence included with the AASP FEIR and 2015 Addendum to the FEIR reflects sufficient capacity to continue serving the largely developed annexation area. Based on this information, and the fact that the annexation area is largely build-out under current conditions, potential impacts would be less than significant. Conclusion: Less than significant impact. 19. MANDATORY FINDINGS OF SIGNIFICANCE. a) Does the project have the potential to degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory? X No evidence exists that the proposed annexation of the Fiero Lane-Clarion Court area would result in impacts to local habitat Item 13 Packet Page 132 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 32 conditions, including the reduction of habitat areas, direct impacts to plant or animal species, impact the existence of any rare or endangered species, or negatively impact cultural resources of the State. b) Does the project have impacts that are individually limited, but cumulatively considerable? ("Cumulatively considerable" means that the incremental effects of a project are considerable when viewed in connection with the effects of the past projects, the effects of other current projects, and the effects of probable future projects) X No impacts of the proposed project are identified that would be considered “individually limited” or “cumulatively considerable.” The proposed project is consistent with the existing AASP, Land Use Element and Zoning for the development and the cumulative impacts of developing this site were analyzed as a part of the AASP FEIR and Addendum, Land Use and Circulation Element (LUCE) EIR. c) Does the project have environmental effects which will cause substantial adverse effects on human beings, either directly or indirectly? X No evidence has been presented or identified that suggests the annexation of the subject area would have a negative effect or substantial adverse effect directly or indirectly on humans. 20. EARLIER ANALYSES. Earlier analysis may be used where, pursuant to the tiering, program EIR, or other CEQA process, one or more effects have been adequately analyzed in an earlier EIR or Negative Declaration. Section 15063 (c) (3) (D). In this case a discussion should identify the following items: a) Earlier analysis used. Identify earlier analyses and state where they are available for review. Airport Area Specific Plan (2014), Airport Area and Margarita Area Specific Plans and Related Facilities Master Plans (SCH# 2000051062; September 2003); City of San Luis Obispo Land Use and Circulation Element (LUCE) Update EIR (2014), AASP FEIR Addendum (2015), Fiero Lane-Clarion Court Plan For Services (2016), Morabito-Burke Tract 2368 Environmental Determination ED01-322, Mitigated Negative Declaration, San Luis Obispo County, May 23, 2003, available for review at the City Community Development Department (919 Palm Street, San Luis Obispo, CA 93401) b) Impacts adequately addressed. Identify which effects from the above checklist were within the scope of and adequately analyzed in an earlier document pursuant to applicable legal standards, and state whether such effects were addressed by mitigation measures based on the earlier analysis. Applicable excerpts, analysis and conclusions from the AASP and LUCE Update EIRs and Morabito-Burke Tract 2368 MND have been added to each impact issue area discussion. c) Mitigation measures. For effects that are "Less than Significant with Mitigation Incorporated," describe the mitigation measures which were incorporated or refined from the earlier document and the extent to which they address site- specific conditions of the project. N/A Item 13 Packet Page 133 Issues, Discussion and Supporting Information Sources Amendment of the Fiero Lane Memorandum of Agreement Concerning Interim Service and Annexation EID-___-2018 Sources Potentially Significant Issues Potentially Significant Unless Mitigation Incorporated Less Than Significant Impact No Impact CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2019 33 21. SOURCE REFERENCES. 1. Fiero Lane-Clarion Court Proposed Annexation Area 2. City of SLO General Plan Land Use Element, December 2014 and Final EIR, October 2014 3. City of SLO General Plan Circulation Element, December 2014 and Final EIR, October 2014 4. Airport Area Specific Plan Updated 2014 5. City of SLO Addendum to the Final Program EIR for the Airport and Margarita Areas, November 2015 6. City of San Luis Obispo, Land Use Inventory Database 7. Website of the Farmland Mapping and Monitoring Program of the California Resources Agency: http://www.consrv.ca.gov/dlrp/FMMP/ 8. Resolution 10678; Fiero Water Company MOA, December 2015 9. Resolution 10994; Fiero Water Company First Amendment to MOA, March 2019 10. Fiero Lane / Clarion Court Plan For Services, March 2016 11. City of SLO Climate Action Plan, August 2012 12. Clean Air Plan for San Luis Obispo County, Air Pollution Control District, 2001 13. FEIR Airport Area and Margarita Area Specific Plans, 2005 14. Federal Emergency Management Agency (FEMA), Flood Map San Luis Obispo County 06077C1332G; accessed via www.fema.gov (September 12, 2019). 15. Geotracker, State Water Resources Control Board, 2015. https://geotracker.waterboards.ca.gov/ (accessed September 12, 2019) 16. Envirostor, Department of Toxic Substances Control. 2015. https://www.envirostor.dtsc.ca.gov/public/ (accessed September 12, 2019) 17. Morabito-Burke Tract 2368 Environmental Determination ED01-322, Mitigated Negative Declaration, San Luis Obispo County, May 23, 2003 18. 2018 Water Resources Status Report. 2018. https://www.slocity.org/Home/ShowDocument?id=22442 19. Water and Wastewater Element. 2018. https://www.slocity.org/home/showdocument?id=19965 Note: All documents listed above are available for review at the City of San Luis Obispo Community Development Department, 919 Palm Street, San Luis Obispo, California (805) 781-7101. Item 13 Packet Page 134 1 REQUIRED MITIGATION AND MONITORING PROGRAM Applicable mitigation measures carried forward from the certified Airport Area Specific Plan Final Program EIR and Mitigation and Monitoring Program; additional clarifications and new mitigation measures applicable to the proposed project are also listed below and are applicable to the project: Air Quality AQ-1: Naturally Occurring Asbestos. Naturally Occurring Asbestos (NOA) has been identified as a toxic air contaminant by the California Air Resources Board (ARB). Under the ARB Air Toxics Control Measure (ATCM) for Construction, Grading, Quarrying, and Surface Mining Operations, prior to any grading activities a geologic evaluation shall be conducted to determine if NOA is present within the area that will be disturbed. If NOA is not present, an exemption request must be filed with the District. If NOA is found at the site, the applicant must comply with all requirements outlined in the Asbestos ATCM. This may include development of an Asbestos Dust Mitigation Plan and an Asbestos Health and Safety Program for approval by the APCD. More information on NOA can be found at http://www.slocleanair.org/business/asbestos.asp. AQ-2: Asbestos Material in Demolition. Demolition activities can have potential negative air quality impacts, including issues surrounding proper handling, demolition, and disposal of asbestos containing material (ACM). Asbestos containing materials could be encountered during demolition or remodeling of existing buildings. Asbestos can also be found in utility pipes/pipelines (transite pipes or insulation on pipes). If utility pipelines are scheduled for removal or relocation or a building(s) is proposed to be removed or renovated, various regulatory requirements may apply, including the requirements stipulated in the National Emission Standard for Hazardous Air Pollutants (40CFR61, Subpart M - asbestos NESHAP). These requirements include but are not limited to: 1) notification to the APCD, 2) an asbestos survey conducted by a Certified Asbestos Inspector, and, 3) applicable removal and disposal requirements of identified ACM. More information on Asbestos can be found at http://www.slocleanair.org/business/asbestos.php. AQ-3: Developmental Burning. APCD regulations prohibit developmental burning of vegetative material within San Luis Obispo County. AQ-4: Permits. Portable equipment and engines 50 horsepower (hp) or greater, used during construction activities will require California statewide portable equipment registration (issued by the ARB) or an Air District permit. The following list is provided as a guide to equipment and operations that may have permitting requirements, but should not be Item 13 Packet Page 135 2 viewed as exclusive: power screens, conveyors, diesel engines, and/or crushers; portable generators and equipment with engines that are 50 hp or greater; internal combustion engines; unconfined abrasive blasting operations; concrete batch plants; rock and pavement crushing; tub grinders; and, trommel screens. AQ-5: Standard Mitigation Measures for Construction Equipment. The standard mitigation measures for reducing nitrogen oxides (NOx), reactive organic gases (ROG), and diesel particulate matter (DPM) emissions from construction equipment are listed below: a. Maintain all construction equipment in proper tune according to manufacturer’s specifications; b. Fuel all off-road and portable diesel powered equipment with ARB certified motor vehicle diesel fuel (non-taxed version suitable for use off-road); c. Use diesel construction equipment meeting ARB's Tier 2 certified engines or cleaner off-road heavy-duty diesel engines, and comply with the State off-Road Regulation; d. Use on-road heavy-duty trucks that meet the ARB’s 2007 or cleaner certification standard for on-road heavy-duty diesel engines, and comply with the State On-Road Regulation; e. Construction or trucking companies with fleets that that do not have engines in their fleet that meet the engine standards identified in the above two measures (e.g. captive or NOx exempt area fleets) may be eligible by proving alternative compliance; f. All on and off-road diesel equipment shall not idle for more than 5 minutes. Signs shall be posted in the designated queuing areas and or job sites to remind drivers and operators of the 5 minute idling limit; g. Diesel idling within 1,000 feet of sensitive receptors is not permitted; h. Staging and queuing areas shall not be located within 1,000 feet of sensitive receptors; i. Electrify equipment when feasible; j. Substitute gasoline-powered in place of diesel-powered equipment, where feasible; k. Signs that specify no idling areas must be posted and enforced at the site; and, l. Use alternatively fueled construction equipment on-site where feasible, such as compressed natural gas (CNG), liquefied natural gas (LNG), propane or biodiesel. AQ-6: Best Available Control Technology (BACT) for Construction Equipment. If the estimated ozone precursor emissions from the actual fleet for a given construction phase are expected to exceed the APCD threshold of significance after the standard mitigation measures are factored into the estimation, then BACT needs to be implemented to further reduce these impacts. The BACT measures can include: a. Further reducing emissions by expanding use of Tier 3 and Tier 4 off-road and 2010 on-road compliant engines; b. Repowering equipment with the cleanest engines available; and c. Installing California Verified Diesel Emission Control Strategies. These strategies are listed at: http://www.arb.ca.gov/diesel/verdev/vt/cvt.htm Item 13 Packet Page 136 3 AQ-7: Fugitive Dust Mitigation Measures. Projects with grading areas that are less than 4- acres and that are not within 1,000 feet of any sensitive receptor shall implement the following mitigation measures to minimize nuisance impacts and to significantly reduce fugitive dust emissions (contact the APCD for a list of potential dust suppressants): a. Reduce the amount of the disturbed area where possible; b. Use of water trucks or sprinkler systems, in sufficient quantities to prevent airborne dust from leaving the site and from exceeding the APCD’s limit of 20% opacity for greater than 3 minutes in any 60-minute period. Increased watering frequency would be required whenever wind speeds exceed 15 mph. Reclaimed (non-potable) water should be used whenever possible. Please note that during drought conditions, water use may be a concern and the contractor or builder shall consider the use of an APCD-approved dust suppressant where feasible to reduce the amount of water used for dust control; c. All dirt stock-pile areas should be sprayed daily as needed; d. All roadways, driveways, sidewalks, etc. to be paved should be completed as soon as possible, and building pads should be laid as soon as possible after grading unless seeding or soil binders are used; e. All of these fugitive dust mitigation measures shall be shown on grading and building plans; and f. The contractor or builder shall designate a person or persons to monitor the fugitive dust emissions and enhance the implementation of the measures as necessary to minimize dust complaints, reduce visible emissions below 20% opacity, and to prevent transport of dust offsite. Their duties shall include holidays and weekend periods when work may not be in progress. g. Projects with grading areas greater than 4 acres or within 1,000 feet of any sensitive receptor shall implement the measures above, in addition to the following additional mitigation measures to manage fugitive dust emissions such that they do not exceed the APCD’s 20% opacity limit (APCD Rule 401) or prompt nuisance violations (APCD Rule 402): 1) Permanent dust control measures identified in the approved project revegetation and landscape plans should be implemented as soon as possible, following completion of any soil disturbing activities; 2) Exposed ground areas that are planned to be reworked at dates greater than one month after initial grading should be sown with a fast germinating, non-invasive grass seed and watered until vegetation is established; 3) All disturbed soil areas not subject to revegetation should be stabilized using approved chemical soil binders, jute netting, or other methods approved in advance by the APCD; 4) Vehicle speed for all construction vehicles shall not exceed 15 mph on any unpaved surface at the construction site; 5) All trucks hauling dirt, sand, soil, or other loose materials are to be covered or should maintain at least two feet of freeboard (minimum vertical distance between top of load and top of trailer) in accordance with California Vehicle Code (CVC) Section 23114; 6) “Track-Out” is defined as sand or soil that adheres to and/or agglomerates on the exterior surfaces of motor vehicles and/or equipment (including tires) that may Item 13 Packet Page 137 4 then fall onto any highway or street as described in CVC Section 23113 and California Water Code 13304. To prevent ‘track out’, designate access points and require all employees, subcontractors, and others to use them. Install and operate a ‘track-out prevention device’ where vehicles enter and exit unpaved roads onto paved streets. The ‘track-out prevention device’ can be any device or combination of devices that are effective at preventing track out, located at the point of intersection of an unpaved area and a paved road. Rumble strips or steel plate devices need periodic cleaning to be effective. If paved roadways accumulate tracked out soils, the track-out prevention device may need to be modified; 7) Sweep streets at the end of each day if visible soil material is carried onto adjacent paved roads. Water sweepers shall be used with reclaimed water where feasible. Roads shall be pre-wetted prior to sweeping when feasible. Air Quality Monitoring Program: These conditions shall be noted on all project grading and building plans. The applicant will also be required to comply with existing regulations and secure necessary permits from the Air Pollution Control District (APCD) before the onset of grading or demolition activities including, but not limited to additional dust control measures, and evaluation for Naturally Occurring and Material Containing Asbestos. The applicant shall present evidence of a plan for complying with these requirements prior to issuance of a grading or building permit from the City. The applicant shall provide the City with the name and telephone number of the person responsible for ensuring compliance with these requirements. The Building Inspector and Community Development and Public Works Inspectors shall conduct field monitoring. Cultural Resources and Tribal Cultural Resources CR-1: Unanticipated cultural resource discovery. In the event archaeological, historic, or paleontological resources are unearthed or discovered during any construction activities, the following standards apply: a. Construction activities shall cease, and the Environmental Coordinator and Planning Department shall be notified so that the extent and location of discovered materials may be recorded by a qualified archaeologist, and disposition of artifacts may be accomplished in accordance with state and federal law, and in consultation with local Native American tribal organizations. b. In the event archaeological resources are found to include human remains, or in any other case where human remains are discovered during construction, the County Coroner is to be notified in addition to the Planning Department and Environmental Coordinator so that proper disposition may be accomplished. Cultural Resources and Tribal Cultural Resources Monitoring Program: Requirements for cultural resource mitigation, in the event of unforeseen encounter of materials during the potential relocation of the wastewater treatment facility, shall be clearly noted on all plans for project grading and construction. Compliance will be verified by the Community Development Director. Item 13 Packet Page 138 Via Email October 21, 2019 Shawna Scott City of San Luis Obispo 919 Palm Street San Luis Obispo, CA 93401 sscott@slocity.org SUBJECT: APCD Comments Regarding the Fiero Lane and Clarion Court Annexation (EID-0626-2019/PL-ANNX-1166-2015) Dear Ms. Scott: Thank you for including the San Luis Obispo County Air Pollution Control District (APCD) in the environmental review process. We have completed our review of the proposed Fiero Lane, and Clarion Court Annexation project located in San Luis Obispo. The proposed project includes the annexation of approximately 39 acres of property into the City of San Luis Obispo. The site consists of 30 existing parcels located along Fiero Lane, Clarion Court, and a portion of Santa Fe Road. Upon annexation, water, recycled water, and wastewater services would be converted to connect to City utility systems, and the existing wastewater treatment plan would be decommissioned and potentially relocated to 1275 Prospect Lane. Infrastructure improvements would include, but not be limited to installation of new water meters, installation of recycled water main on Broad Street, reconfiguration of sewer laterals on Fiero Lane, and pavement rehabilitation and sidewalk repairs. The proposed Initial Study/Mitigated Negative Declaration (IS/MND) includes mitigation measures stated in Section 3. Air Quality that were carried forwarded from the certified Airport Specific Plan Final Program Environmental Impact Report. Residential dwellings are within 1,000 feet of the proposed annexation area. The following are APCD comments that are pertinent to this project. GENERAL COMMENTS As a commenting agency in the California Environmental Quality Act (CEQA) review process for a project, the APCD assesses air pollution impacts from both the construction and operational phases of a project, with separate significant thresholds for each. Please Item 13 Packet Page 139 APCD Comments for the Fiero Lane and Clarion Court Annexation Project October 21, 2019 Page 2 of 4 address the items contained in this letter that are highlighted by bold and underlined text . CONSTRUCTION PHASE Construction Phase Impacts The proposed IS/MND includes mitigation measures stated in Section 3. Air Quality that were carried forwarded from the certified Airport Specific Plan Final Program Environmental Impact Report. These measures include the APCD’s language for naturally occurring asbestos (AQ-1), asbestos material in demolition (AQ-2), developmental burning (AQ-3), construction permit requirements (AQ- 4), standard control measures for construction equipment (AQ-5), best available control technology (AQ-6) and the short list for fugitive dust mitigation measures (AQ-7). AQ-1 through 6 are consistent with the APCD’s analysis of the proposed project and the APCD supports the inclusion of these measures in the conditions of approval for the project. However, because sensitive receptors are within 1,000 feet of the project, the APCD’s long list of dust control measures is required and to minimize toxic air pollution impacts from idling diesel engines, the APCD is also requiring mitigation to minimize impacts to sensitive receptors. These two mitigation measures are stated below. Dust Control Measures This project is within 1,000 feet of residential dwellings. Construction activities can generate fugitive dust, which could be a nuisance to residents and businesses in close proximity to the proposed construction site. Projects with grading areas greater than 4-acres or within 1,000 feet of any sensitive receptor shall implement the following mitigation measures to manage fugitive dust emissions such that they do not exceed the APCD’s 20% opacity limit (APCD Rule 401) or prompt nuisance violations (APCD Rule 402). a. Reduce the amount of the disturbed area where possible; b. Use of water trucks or sprinkler systems in sufficient quantities to prevent airborne dust from leaving the site and from exceeding the APCD’s limit of 20% opacity for greater than 3 minutes in any 60-minute period. Increased watering frequency would be required whenever wind speeds exceed 15 mph. Reclaimed (non-potable) water should be used whenever possible. When drought conditions exist and water use is a concern, the contractor or builder should consider the use of an APCD-approved dust suppressant where feasible to reduce the amount of water used for du st control. Please refer to the following link from the San Joaquin Valley Air District for a list of potential dust suppressants: Products Available for Controlling Dust; c. All dirt stockpile areas should be sprayed daily and covered with tarps or other dust barriers as needed; d. Permanent dust control measures identified in the approved project revegetation and landscape plans should be implemented as soon as possible, following completion of any soil disturbing activities; e. Exposed ground areas that are planned to be reworked at dates greater than one month after initial grading should be sown with a fast germinating, non-invasive grass seed and watered until vegetation is established; f. All disturbed soil areas not subject to revegetation should be stabilized using approved chemical soil binders, jute netting, or other methods approved in advance by the APCD; Item 13 Packet Page 140 APCD Comments for the Fiero Lane and Clarion Court Annexation Project October 21, 2019 Page 3 of 4 g. All roadways, driveways, sidewalks, etc. to be paved should be completed as soon as possible. In addition, building pads should be laid as soon as possible after grading unless seeding or soil binders are used; h. Vehicle speed for all construction vehicles shall not exceed 15 mph on any unpaved surface at the construction site; i. All trucks hauling dirt, sand, soil, or other loose materials are to be covered or should maintain at least two feet of freeboard (minimum vertical distance between top of load and top of trailer) in accordance with California Vehicle Code (CVC) Section 23114; j. “Track-Out” is defined as sand or soil that adheres to and/or agglomerates on the exterior surfaces of motor vehicles and/or equipment (including tires) that may then fall onto any highway or street as described in CVC Section 23113 and California Water Code 13304. To prevent ‘track out’, designate access points and require all employees, subcontractors, and others to use them. Install and operate a ‘track -out prevention device’ where vehicles enter and exit unpaved roads onto paved streets. The ‘track -out prevention device’ can be any device or combination of devices that are effective at preventing track out, located at the point of intersection of an unpaved area and a paved road. Rumble strips or steel plate devices need periodic cleaning to be effective. If paved roadways accumulate tracked out soils, the track-out prevention device may need to be modified; k. Sweep streets at the end of each day if visible soil material is carried onto adjacent paved roads. Water sweepers shall be used with reclaimed water where feasible. Roads shall be pre-wetted prior to sweeping when feasible; l. All PM10 mitigation measures required should be shown on grading and building plans; and m. The contractor or builder shall designate a person or persons whose responsibility is to ensure any fugitive dust emissions do not result in a nuisance and to enhance the implementation of the mitigation measures as necessary to minimize dust complaints and reduce visible emissions below the APCD’s limit of 20% opacity for greater than 3 minutes in any 60-minute period. Their duties shall include holidays and weekend periods when work may not be in progress (for example, wind-blown dust could be generated on an open dirt lot). The name and telephone number of such persons shall be provided to the APCD Compliance Division prior to the start of any grading, earthwork or demolition (Contact Tim Fuhs at 805-781-5912). Limits of Idling during Construction Phase State law prohibits idling diesel engines for more than 5 minutes. All projects with diesel-powered construction activity shall comply with Section 2485 of Title 13 of the California Code of Regulations and the 5-minute idling restriction identified in Section 2449(d)(2) of the California Air Resources Board’s In-Use Off-Road Diesel regulation to minimize toxic air pollution impacts from idling diesel engines. The specific requirements and exceptions for the on-road and off-road regulations can be reviewed at the following web sites: arb.ca.gov/msprog/truck-idling/factsheet.pdf and arb.ca.gov/regact/2007/ordiesl07/frooal.pdf . In addition, because this project is within 1,000 feet of sensitive receptors residential dwellings, the project applicant shall comply with the following more restrictive requirements to minimize impacts to nearby sensitive receptors. 1. Staging and queuing areas shall not be located within 1,000 feet of sensitive receptors; 2. Diesel idling within 1,000 feet of sensitive receptors shall not be permitted; 3. Use of alternative fueled equipment is recommended; and Item 13 Packet Page 141 APCD Comments for the Fiero Lane and Clarion Court Annexation Project October 21, 2019 Page 4 of 4 4. Signs that specify no idling areas must be posted and enforced at the site. Again, thank you for the opportunity to comment on this proposal. If you have any questions or comments, feel free to contact me at (805) 781-5912. Sincerely, JACKIE MANSOOR Air Quality Specialist JNM/jjh cc: Tim Fuhs, APCD Dora Drexler, APCD Item 13 Packet Page 142 Minutes -Draft Planning Commission CALL TO ORDER Regular Meeting Wednesday, October 9, 2019 A Regular Meeting of the San Luis Obispo Planning Commission was called to order on Wednesday, October 9, 2019 at 6:00 p.m. in the Council Chamber, located at 990 Palm Street, San Luis Obispo, California, by Vice Chair Dandekar. ROLL CALL Present: Absent: Staff: Commissioners Robert Jorgensen, Steve Kahn, John McKenzie, Nicholas Quincey, Vice-Chair Hemalata Dandekar. Commissioner Charles Stevenson and Chair Mike Wulkan Community Development Director Michael Codron, Principal Planner Tyler Corey, Assistant City Attorney Charles Bell, Deputy City Clerk Kevin Christian and as noted. PLEDGE OF ALLEGIANCE Vice Chair Dandekar led the Pledge of Allegiance. PUBLIC COMMENTS ON ITEMS NOT ON THE AGENDA None. --End of Public Comment-- CONSENT AGENDA 1.Consideration of the Planning Commission meeting Minutes of September 25, 2019. ACTION: MOTION BY COMMISSIONER MCKENZIE SECOND BY COMMISSIONER JORGENSEN CARRIED 5-0-2 (Commissioners Stevenson and Wulkan absent) to approve the minutes of September 25, 2019. Packet Page 1 Item 13 Packet Page 143 Planning Commission Meeting Minutes - DRAFT October 9, 2019 Page 2 of3 PUBLIC HEARINGS Commissioner Quincey recused himself and left the meeting at this time, noting a possible conflict with his employment position for the County of San Luis Obispo. 2.Project Address: 850 Fiero. Review of the proposed annexation of approximately 39 acres of property along Fiero Lane and Clarion Court; this action includes consideration of an Initial Study/Mitigated Negative Declaration tiered from the Final Program Environmental Impact Report for the Airport Area and Margarita Area Specific Plans and Related Facilities Master Plans (SCH#2000051062). Case#: ANNX-1166-2015, Zone: Easement; Fiero Lane Water Company, applicant; Len Family Trust, owner. Senior Planner Shawna Scott introduced consulting Planner David Watson. Mr. Watson and Ms. Scott presented the staff report and responded to Commission inquiries. Applicant representatives Bob Miller, General Manager Fiero Lane Water Company, and Matt Quaglino, President Fiero Lane Water Company, summarized the intent of their request for annexation and responded to Commission inquiries. Vice Chair Dandekar opened the public hearing. Public Comments Matt Quaglino Carol Florence --End of Public Comment-- Vice Chair Dandekar closed the public hearing. ACTION: MOTION BY COMMISSIONER KAHN, SECOND BY COMMISSIONER JORGENSEN, CARRIED 4-0-1-2 (Commissioner Quincey recused, Commissioners Stevenson and Wulkan absent) to recommend approval of the proposed annexation and adoption of the Initial Study I Mitigated Negative Declaration, subject to findings and conditions. Packet Page 2 Item 13 Packet Page 144 Planning Commission Meeting Minutes - DRAFT October 9, 2019 Page 3 of3 COMMENT AND DISCUSSION 3.Staff Updates & Agenda Forecast Principal Planner Tyler Corey provided an update of upcoming projects. ADJOURNMENT The meeting was adjourned at 7: 10 p.m. The next Regular meeting of the Planning Commission is scheduled for Wednesday, October 23, 2019 at 6:00 p.m., in the Council Chamber, 990 Palm Street, San Luis Obispo, California. APPROVED BY THE PLANNING COMMISSION: XX/XX/2019 Packet Page 3 Item 13 Packet Page 145 Page intentionally left blank. Packet Page 4 Item 13 Packet Page 146 R _____ RESOLUTION NO. (2019 SERIES) A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, RECOMMENDING APPROVAL OF THE ANNEXATION OF THE FIERO LANE- CLARION COURT PROPERTIES (FIERO LANE WATER COMPANY, FLWC) TO THE CITY OF SAN LUIS OBISPO (PL- ANNX-1166-2015, EID-0626-2019) WHEREAS, on December 1, 2015 the City Council adopted a Memorandum of Agreement between the City and FLWC establishing a two-phased approach to annexation of the FLWC lands to the City, as prescribed in Resolution No. 10678 (2015 Series); and WHEREAS, on March 19, 2019 the City Council adopted a First Amendment to the 2015 Memorandum of Agreement agreeing to revise the schedule for completion of the annexation and extending the time for consideration of the annexation with the Local Agency Formation Commission (LAFCO), as prescribed in Resolution No. 10994 (2019 Series); and WHEREAS, the referenced MOAs and the 2016 FLWC “Plan For Services” include details on the studies, analysis, scheduling and financing of the consideration of said annexation and the needed public and private infrastructure improvements to be completed as part of any annexation; and WHEREAS, the City is actively working with the applicants and their consultants on detailing the various improvements and implementation of the financing plans to complete said improvements; and WHEREAS, all the requirements, conditions and implementing measures of said Resolutions No. 10678 and 10994 have been met by the applicants in order to consider the annexation; and WHEREAS, a duly noticed Public Hearing before the Planning Commission was held on September 25, 2019 to consider testimony and input on the proposed annexation, needed public and private infrastructure improvements, development impact fees and charges to be paid to the City, environmental considerations for the annexation, and review of the timing and implementation of said fees and improvements; and WHEREAS, environmental analysis of the proposed annexation has been guided by previous work in the form of the Airport Area and Margarita Area Specific Plans Final EIR (2005), FEIR Addendum for the Airport Area and Margarita Area Specific Plans (2015), and the City of SLO General Plan Land Use and Circulation Elements (LUCE) FEIR (2014); and WHEREAS, an Initial Study of environmental impact was prepared for the proposed annexation, which tiers from the certified Final EIR for the Airport Area and Margarita Area Specific Plans, documents whether there have been changed circumstances since those referenced EIRs were completed, analyzes consistency of the annexation with the General Plan and Airport Area Specific Plan, and identifies mitigation measures that would be required to mitigate Item 13 Packet Page 147 Resolution No. (2019 Series) Page 2 R _____ potentially significant impacts resulting from the annexation process and the construction of needed infrastructure (new or rehabilitation) to support City services to the areas; and WHEREAS, the conclusion of the Initial Study of environmental impact is that by incorporating the needed infrastructure features of the 2015 and 2019 MOAs, as well as the 2016 Plan For Services, in addition to and as a direct result of the analysis of the noted EIRs, and implementing noted mitigation measures, any significant effects of the annexation and provision of infrastructure services to the area would result in a less than significant effect on the environment. NOW, THEREFORE, BE IT RESOLVED by the Planning Commission of the City of San Luis Obispo as follows: SECTION 1. CEQA Findings, Mitigation Measures, and Mitigation Monitoring Program. Based upon all the evidence, the Planning Commission recommends that the City Council adopt the following California Environmental Quality Act (CEQA) findings in support of the project: a)The proposed project, as conditioned herein, is consistent with the requirements of the certified Airport Area and Margarita Area Specific Plans and Related Facilities Master Plans Final Environmental Impact Report (FEIR) (SCH# 2000051062), and this action incorporates those FEIR mitigation measures as detailed herein. b)A supplemental, tiered, initial study has been prepared for the project, which addresses potential environmental impacts resulting from the proposed project, and the Community Development Director has recommended that the results of that additional analysis be incorporated into a Mitigated Negative Declaration (MND) of environmental impacts, and recommends adoption of identified mitigation measures, all of which are incorporated below. c)All potentially significant effects were analyzed adequately in the referenced FEIR and IS/MND, subject to the following mitigation measures being incorporated into the project and the mitigation monitoring program: Air Quality AQ-1: Naturally Occurring Asbestos. Naturally Occurring Asbestos (NOA) has been identified as a toxic air contaminant by the California Air Resources Board (ARB). Under the ARB Air Toxics Control Measure (ATCM) for Construction, Grading, Quarrying, and Surface Mining Operations, prior to any grading activities a geologic evaluation shall be conducted to determine if NOA is present within the area that will be disturbed. If NOA is not present, an exemption request must be filed with the District. If NOA is found at the site, the applicant must comply with all requirements outlined in the Asbestos ATCM. This may include development of an Asbestos Dust Mitigation Plan and an Asbestos Health and Safety Program for approval by the APCD. More information on NOA can be found at http://www.slocleanair.org/business/asbestos.asp. AQ-2: Asbestos Material in Demolition. Demolition activities can have potential negative air quality impacts, including issues surrounding proper handling, demolition, and disposal of asbestos containing material (ACM). Asbestos containing materials could be encountered Item 13 Packet Page 148 Resolution No. (2019 Series) Page 3 R _____ during demolition or remodeling of existing buildings. Asbestos can also be found in utility pipes/pipelines (transite pipes or insulation on pipes). If utility pipelines are scheduled for removal or relocation or a building(s) is proposed to be removed or renovated, various regulatory requirements may apply, including the requirements stipulated in the National Emission Standard for Hazardous Air Pollutants (40CFR61, Subpart M - asbestos NESHAP). These requirements include but are not limited to: 1) notification to the APCD, 2) an asbestos survey conducted by a Certified Asbestos Inspector, and, 3) applicable removal and disposal requirements of identified ACM. More information on Asbestos can be found at http://www.slocleanair.org/business/asbestos.php. AQ-3: Developmental Burning. APCD regulations prohibit developmental burning of vegetative material within San Luis Obispo County. AQ-4: Permits. Portable equipment and engines 50 horsepower (hp) or greater, used during construction activities will require California statewide portable equipment registration (issued by the ARB) or an Air District permit. The following list is provided as a guide to equipment and operations that may have permitting requirements, but should not be viewed as exclusive: power screens, conveyors, diesel engines, and/or crushers; portable generators and equipment with engines that are 50 hp or greater; internal combustion engines; unconfined abrasive blasting operations; concrete batch plants; rock and pavement crushing; tub grinders; and, trommel screens. AQ-5: Standard Mitigation Measures for Construction Equipment. The standard mitigation measures for reducing nitrogen oxides (NOx), reactive organic gases (ROG), and diesel particulate matter (DPM) emissions from construction equipment are listed below: a.Maintain all construction equipment in proper tune according to manufacturer’s specifications; b. Fuel all off-road and portable diesel powered equipment with ARB certified motor vehicle diesel fuel (non-taxed version suitable for use off-road); c.Use diesel construction equipment meeting ARB's Tier 2 certified engines or cleaner off-road heavy-duty diesel engines, and comply with the State off-Road Regulation; d.Use on-road heavy-duty trucks that meet the ARB’s 2007 or cleaner certification standard for on-road heavy-duty diesel engines, and comply with the State On-Road Regulation; e.Construction or trucking companies with fleets that that do not have engines in their fleet that meet the engine standards identified in the above two measures (e.g. captive or NOx exempt area fleets) may be eligible by proving alternative compliance; f.All on and off-road diesel equipment shall not idle for more than 5 minutes. Signs shall be posted in the designated queuing areas and or job sites to remind drivers and operators of the 5 minute idling limit; g.Diesel idling within 1,000 feet of sensitive receptors is not permitted; h.Staging and queuing areas shall not be located within 1,000 feet of sensitive receptors; i.Electrify equipment when feasible; j.Substitute gasoline-powered in place of diesel-powered equipment, where feasible; and, Item 13 Packet Page 149 Resolution No. (2019 Series) Page 4 R _____ k.Use alternatively fueled construction equipment on-site where feasible, such as compressed natural gas (CNG), liquefied natural gas (LNG), propane or biodiesel. AQ-6: Best Available Control Technology (BACT) for Construction Equipment. If the estimated ozone precursor emissions from the actual fleet for a given construction phase are expected to exceed the APCD threshold of significance after the standard mitigation measures are factored into the estimation, then BACT needs to be implemented to further reduce these impacts. The BACT measures can include: a.Further reducing emissions by expanding use of Tier 3 and Tier 4 off-road and 2010 on-road compliant engines; b.Repowering equipment with the cleanest engines available; and c.Installing California Verified Diesel Emission Control Strategies. These strategies are listed at: http://www.arb.ca.gov/diesel/verdev/vt/cvt.htm AQ-7: Fugitive Dust Mitigation Measures. Projects with grading areas that are less than 4-acres and that are not within 1,000 feet of any sensitive receptor shall implement the following mitigation measures to minimize nuisance impacts and to significantly reduce fugitive dust emissions: a.Reduce the amount of the disturbed area where possible; b.Use of water trucks or sprinkler systems, in sufficient quantities to prevent airborne dust from leaving the site and from exceeding the APCD’s limit of 20% opacity for greater than 3 minutes in any 60-minute period. Increased watering frequency would be required whenever wind speeds exceed 15 mph. Reclaimed (non-potable) water should be used whenever possible. Please note that during drought conditions, water use may be a concern and the contractor or builder shall consider the use of an APCD- approved dust suppressant where feasible to reduce the amount of water used for dust control; c.All dirt stock-pile areas should be sprayed daily as needed; d.All roadways, driveways, sidewalks, etc. to be paved should be completed as soon as possible, and building pads should be laid as soon as possible after grading unless seeding or soil binders are used; e.All of these fugitive dust mitigation measures shall be shown on grading and building plans; and f.The contractor or builder shall designate a person or persons to monitor the fugitive dust emissions and enhance the implementation of the measures as necessary to minimize dust complaints, reduce visible emissions below 20% opacity, and to prevent transport of dust offsite. Their duties shall include holidays and weekend periods when work may not be in progress. Air Quality Monitoring Program: These conditions shall be noted on all project grading and building plans. The applicant will also be required to comply with existing regulations and secure necessary permits from the Air Pollution Control District (APCD) before the onset of grading or demolition activities including, but not limited to additional dust control measures, and evaluation for Naturally Occurring and Material Containing Asbestos. The applicant shall present evidence of a plan for complying with these requirements prior to issuance of a grading or building permit from the City. The applicant shall provide the City with the name and telephone number of the Item 13 Packet Page 150 Resolution No. (2019 Series) Page 5 R _____ person responsible for ensuring compliance with these requirements. The Building Inspector and Community Development and Public Works Inspectors shall conduct field monitoring. Cultural Resources and Tribal Cultural Resources CR-1: Unanticipated cultural resource discovery. In the event archaeological, historic, or paleontological resources are unearthed or discovered during any construction activities, the following standards apply: a.Construction activities shall cease, and the Environmental Coordinator and Planning Department shall be notified so that the extent and location of discovered materials may be recorded by a qualified archaeologist, and disposition of artifacts may be accomplished in accordance with state and federal law, and in consultation with local Native American tribal organizations. b.In the event archaeological resources are found to include human remains, or in any other case where human remains are discovered during construction, the County Coroner is to be notified in addition to the Planning Department and Environmental Coordinator so that proper disposition may be accomplished. Cultural Resources and Tribal Cultural Resources Monitoring Program: Requirements for cultural resource mitigation, in the event of unforeseen encounter of materials during the potential relocation of the wastewater treatment facility, shall be clearly noted on all plans for project grading and construction. Compliance will be verified by the Community Development Director. SECTION 2. Action, Findings and Conditions. The Planning Commission hereby recommends the City Council 1) approve the filing of an application for annexation of the Fiero Lane- Clarion Court area and direct the Community Development Director to process the application with San Luis Obispo Local Agency Formation Commission (LAFCO) and 2) authorize the City Manager to execute any documents in a form approved by the City Attorney related to the annexation of the subject lands to the City of San Luis Obispo, based on the following findings and subject to the following conditions of approval: Findings: 1.The project area is identified in the Airport Area Specific Plan as a future annexation area, and no changes to identified pre-zoning or General Plan land use designations are proposed. The proposed annexation is consistent with the Airport Area Specific Plan, which was determined to be consistent with the San Luis Obispo County Airport Land Use Plan. 2.The proposed annexation is consistent with the General Plan, including Policies 1.13.3 (Annexation Purpose and Timing) and 1.13.5 (Annexation in Airport Area) because the proposed project satisfies all the prerequisites identified under 1.13.5 and pre-zoning was established upon adoption of the Airport Area Specific Plan, which is a prerequisite for allowing development on the site under the City’s General Plan. Item 13 Packet Page 151 Resolution No. (2019 Series) Page 6 R _____ 3.The Fiero Lane-Clarion Court area is within the City’s Sphere of Influence as defined by LAFCO, which is an area designated for eventual annexation provided that City services can be provided, and that annexation is otherwise consistent with LAFCO policies. 4.The Memorandum of Agreement and Plan for Services provides a framework for providing the necessary City services. Conditions of Approval: 1.In compliance with the adopted First Amendment to the Memorandum of Agreement, if re-location of the existing wastewater treatment facility is required in order to continue service to the East Airport area, prior to completion of annexation the applicant shall submit documentation verifying that the Fiero Lane Water Company has submitted an application to the Regional Water Quality Control Board for any required permits and authorizations related to the wastewater treatment plant and associated disposal of treated wastewater. To ensure implementation of the re-location of the wastewater treatment facility, prior to submittal of an annexation application to the San Luis Obispo County Local Agency Formation Commission (LAFCO) the applicant shall provide financial assurance in the form of a bond, to be approved by the City Utilities Director. 2.The applicant shall construct improvements and upgrades to Fiero Lane so as to bring the street infrastructure into a " state of good repair". For purposes of this requirement, the definition of state of good repair includes: a.Upgrading traffic control signs and markings to meet current federal, State and City standards; b.Upgrade street crossings to meet Federal and City ADA ramp and crossing standards; c.Perform pavement maintenance as needed to meet City minimum pavement condition index requirements; d.Remove and replace any damaged sections of sidewalk. 3.The applicant shall establish City-controlled public right-of-way access to parcels 076- 401-043, 076-400-001, 076-401-065 & 076-041-032, which are included within the proposed annexation area, but are not accessible via right-of-way. This may require subdivision of County-owned parcel 076-401-068 and transfer of the portion that includes the existing access road to the City. 4.The applicant shall exhaust all reasonable efforts to establish a reciprocal access agreement across parcel 076-413-038 to provide a potential future street connection and/or emergency access between Clarion Court and Fiero Lane. 5.Old Santa Fe Road south of the City/County boundary line, located immediately south of the Santa Fe Bridge shall remain under County jurisdiction after annexation of Item 13 Packet Page 152 Resolution No. (2019 Series) Page 7 R _____ properties on Clarion Court. If as part of the LAFCO process, the City is required to take all, or part, of Old Santa Fe Road under City jurisdiction, the following requirements shall be required by the applicant: a.Construct improvements and upgrades to the portion of Old Santa Fe Road that is to be annexed to the City so as to bring the street infrastructure into a "state of good repair". For purposes of this requirement, the definition of state of good repair includes: i.Upgrading traffic control signs and markings to meet current federal, State and City standards; and ii.Upgrade street crossings at Clarion Court and the mini storage property to meet Federal and City ADA ramp and crossing standards; and iii.Perform pavement maintenance as needed to meet City minimum pavement condition index requirements. The limits of required improvements begin at the south side of the existing bridge across the East Fork of San Luis Creek and terminate at the cul-de-sac fronting the mini storage property. No improvements to the bridge are proposed. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2019. ____________________________________ Tyler Corey, Secretary Planning Commission Item 13 Packet Page 153 Page intentionally left blank. Item 13 Packet Page 154 Department Name: Utilities Cost Center: 6001 For Agenda of: November 19, 2019 Placement: Business Item Estimated Time: 45 min FROM: Aaron Floyd, Utilities Director PREPARED BY: Mychal Boerman, Deputy Director - Water Jason Meeks, Water Treatment Plant Supervisor Jennifer Metz, Utilities Project Manager SUBJECT: WATER ENERGY EFFICIENCY PROJECT RECOMMENDATION 1. Receive the Water Energy Efficiency Project Investment Grade Audit (Attachment A). 2. Authorize the City Manager to execute a Work Order, upon approval of the City Attorney as to form, to enter into agreement with PG&E for implementation of the Water Energy Efficiency Project (Project) at a not to exceed cost of $13,999,644 (Attachment B). 3. Approve Resolution (Attachment C) for the use of Water Fund Unreserved Working Capital to provide adequate cash flow when considered necessary for Project implementation and authorize the Finance Director to execute any and all certificates, contracts, and other documents necessary to secure project financing. 4. Authorize the City Manager to execute a no-cost, 50-year ground lease (Attachment D) with Cal Poly for 0.5 acres adjacent to the City’s Water Treatment Plant on Stenner Creek Road. REPORT-IN-BRIEF The City’s Water Energy Efficiency Project (Project) involves a public/private partnership with Pacific Gas and Electric (PG&E) available for streamlined implementation of energy projects under PG&E’s Sustainable Solutions Turnkey (SST) program. Staff began working with a team of engineers from PG&E to identify the most economical and viable energy projects for the City to undertake at Water Division facilities in July 2016. Staff from the Utilities Department worked with the PG&E team through June 2019 on pilot studies and the Project’s preliminary design. Due to the specialty nature of the work and the current economic climate, construction bids were higher than anticipated causing staff to revisit Water Treatment Plant (WTP) capital priorities. Staff’s recommended approach is to complete the Project in two implementation phases including an Efficiency Phase and a future Resiliency Phase. Efficiency Phase project components include upgrading the WTP ozone generation system, Supervisory Control and Data Acquisition (SCADA) system, plant service water, and improvements to the Transfer Pump Station. Staff is also proposing to include the delivery of a Resiliency Phase component, a permanent backup generator for the WTP, with the Project. Item 14 Packet Page 155 At a cost of approximately $14 million, the Efficiency Phase of the Project would contribute to the City’s sustainability goals and advancement toward Zero Net Energy by reducing annual energy usage at the WTP by over 600 kWh or 118 MTCO2e (Metric Tons CO2 equivalent). This is 15 percent of the reduction target of 770 MTCO2e identified for Government Operations in the 2012 Climate Action Plan and 29 percent of the WTP’s GHG emissions from electricity use. Construction is estimated to take 13 months with completion estimated in early 2021. The total Project cost is $15,984,644, including the permanent WTP generator and additional SCADA integration services. On May 21, 2019, the City Council approved Resolution 11011 authorizing the Utilities Director to enter into a financing agreement with the Infrastructure Bank (IBank). As private financing may offer more favorable terms for the Project, staff continues to explore financing alternatives with its financial advisors at this time. DISCUSSION Background Consistent with the City Council’s commitment to Climate Action, Utilities Department staff began exploring the potential for achieving greater energy efficiency in Water Division operations in 2016. At a public hearing on April 4, 2018, the City Council adopted Resolution 10878 (Attachment E) approving the continued participation in the SST program and authorized the City Manager to enter into a service agreement for the Project pursuant to Government Code section 4217.10 et seq., including the following findings: a) The Water Energy Efficiency Project is subject to Government Code section 4217.10 et seq. and Article IX Section 907 of the City Charter and provides unique benefits to the public; b) The anticipated cost to the City under the contract with PG&E will be less than the anticipated marginal cost to the City for the electrical energy that would have been consumed by the City in the absence of those purchases; c) The project is exempt from Article IX Section 901 of the City Charter and is allowed by Government Code section 4217. 10 as an energy efficiency project. The agreement with PG&E is atypical of the City’s contracting procedures defined in Article IX, Section 901 of the City’s Charter. However, the City’s Charter, Article IX, Section 907 exempts energy projects and California Government Code Section 4217.10 et seq. allows the City to forgo standard procurement processes for certain conservation energy projects if it finds it best serves the City’s interest. The WTP treats over five million gallons of potable drinking water per day with an estimated cost of $345,000 per year for electricity. The total electricity cost for the City’s water treatment plant, water distribution system, and Whale Rock Reservoir raw water system facilities is approximately $628,000 annually. These facilities were examined as part of the Project. Energy used for raw water deliveries from Salinas Reservoir and Nacimiento Reservoir were not Item 14 Packet Page 156 examined as they are operated by San Luis Obispo County. PG&E Sustainable Solutions Turnkey (SST) Program PG&E’s SST Program involves a prescribed approach for implementing energy conservation projects. The goal of the SST Program is to implement energy saving projects at facilities and reallocate the money saved from reduced energy consumption and operational maintenance costs toward payment of the debt service for project construction. The SST Program has four stages. Sustainable Solutions Turnkey Program. The City’s Water Energy Efficiency Project In April of 2018, Council reviewed the Preliminary Energy Assessment and directed staff to proceed to the next phase of the Project, the Investment Grade Audit (IGA). Of the Energy Conservation Measures (ECMs) identified in the Preliminary Energy Assessment, eleven were selected for further investigation in the IGA. Preliminary cost estimates indicated that all eleven ECMs could be constructed for $14.3 million which was established as the City’s project budget. This project budget did not recognize a reduction in WTP operational costs from the potential energy savings. The City had planned to debt finance the project for 30 years with the initial payment during the 2019-20 fiscal year. To be considered viable, ECMs must adhere to the “triple bottom line” concepts of being environmentally, socially, and fiscally sustainable. The team investigated replacing aging infrastructure identified in the WTP capital improvement plan, with more energy efficient options. In order to maximize efficiencies, projects were evaluated in the context of their impact on the entire treatment process, as opposed to being studied individually. After removing projects that were determined to not be viable based on the triple bottom line criteria, City staff worked with the PG&E team to complete bid documents for eight ECMs. The IGA provides an in-depth study of the Project (eight ECMs), estimated energy savings, a set of design/build plans, and an implementation proposal. Bids were received for the eight ECMs on July 17, 2019 at a cost of over $24.8 million – $10.5 million over the preliminary construction estimate. Additional costs were due to the risk and complexity of the primary disinfection (ozone generation) system design and construction effort, the health of the economy, and a historically competitive construction market. ECMs were then prioritized and, as critical infrastructure, replacement of the WTP ozone generation system was identified as the ECM of greatest importance and its replacement will achieve significant energy savings. Since July, staff has worked to categorize and prioritize other ECMs for construction within budgetary resources. Staff’s recommended approach is to complete the Project in two implementation phases: An Efficiency Phase and a future Resiliency Phase. Efficiency Phase Four ECMs are proposed for inclusion in the Project’s Efficiency Phase. These include Item 14 Packet Page 157 upgrading the WTP ozone generation system, SCADA system, plant service water, and improvements to the Transfer Pump Station. A summary of the Efficiency Phase projects is provided below. A detailed description of each ECM component is available in the IGA (Attachment A). The anticipated energy savings and the cost of each component is included in Table 1. The expected benefits of the Efficiency Phase include: 1. Contribute to the City’s sustainability goals and advancement toward Zero Net Energy. 2. Reduce energy consumption and greenhouse gas emissions. 3. Replace obsolete equipment and components. 4. Improve ability to perform maintenance. 5. Improve reliability of achieving permit compliance. 6. Increase operational reliability, flexibility, and redundancy. 7. Reduced staff requirements for manual operation. 8. Optimized system sequencing and functionality. The Efficiency Phase ECMs will cost approximately $14 million and reduce energy usage by over 33 percent annually from current WTP operations. Construction is estimated to take 13 months with completion estimated in early 2021. Table 1: Efficiency Phase - Energy Savings and Cost ECM Description Annual Energy Savings (kWh) Efficiency Phase Cost Ozone System 541,009 $12,133,235 Transfer Pump Station - $456,060 Plant Service Water System 70,224 $366,795 SCADA System/Controls - $1,043,554 611,233 $13,999,644 The Project would contribute to the City’s sustainability goals and advancement toward Zero Net Energy by reducing annual energy usage at the WTP by over 600 kWh or 118 MTCO2e (Metric Tons CO2 equivalent). This annual reduction is equal to removing vehicle trips from 25 cars for a year1 or the annual amount of carbon sequestration achieved by 140 acres of forest. Ozone System. The City’s existing WTP ozonation system was installed in 1994, and due to its age is currently operating at about 50 percent efficiency. City staff worked with the PG&E team during September 2018 to conduct a pilot study to assist with equipment sizing by identifying maximum ozone demand for various blend ratios of the City’s three water supply sources. From this evaluation, it was determined to replace the existing ozone generators with modular ozone generators. The new generators will be fed by new liquid oxygen (LOx) storage and delivery systems. The WTP will remain in operation during construction, so demolition and construction of the ozone system will be conducted in two phases. 1 Calculated at a rate of 4.71 metric tons per vehicle per year . Act. Adapt. Thrive. Although some measures are not recommended for construction at this time due to available budget, the City continues to plan for resilience, and lay the foundation for achieving carbon neutrality by 2035. Item 14 Packet Page 158 The contractor for the ozone system, Cushman Contracting, Inc., has completed a similar ozone upgrade in Santa Barbara and has performed other water and wastewater work in the region (Paso Robles, Cayucos, Nacimiento, etc.). The City also has a demonstrated history of working with Electricraft, a key subconsultant on the Cushman team and an electrical contractor that is very experienced with the City’s WTP. Transfer Pump Station. The existing Transfer Pump Station (TPS) is located near the WTP at the south end of Stenner Creek Road. The TPS facility houses four-75 hp pumps that pump treated water from the WTP Clearwells to Reservoir 2 which provides water to the City’s high- pressure distribution system. The Project includes the addition of variable frequency drives (VFDs) to each of the four existing transfer pumps and improved pump sequencing, the combination of which is expected to improve overall system efficiency. Benefits include the ability to slowly ramp up each pump when they are brought online to eliminate pressure spikes, potentially harmful to the water distribution system, and the ability to continually modulate the pump speed to meet varied demands of the system. Another component to manage the operational costs of the TPS is to integrate level sensing at Clearwell #1 and pump sequencing to minimize the energy consumption related to serving Reservoir 2. This would include the strategic operation of pumps based on energy usage, energy rates, and tank levels. Plant Service Water System (PSWS). The Plant Service Water System provides treated water to processes in the WTP including cooling water for equipment, plant water, irrigation, fire hydrants, and the WTP fire suppression system. The Project includes the removal and disposal of the existing booster pump system and control panel, furnishing, installing, start-up and commissioning of the new booster pump system and diaphragm tank, and provision of temporary booster pump service for the PSWS during demolition of the existing system and installation of the new system. SCADA System/Controls. The WTP existing SCADA system is utilized by the City’s staff to monitor and control key equipment and processes at the WTP. This system is equipped with ten controllers of varying age (1994–2008). The existing controllers are an aging platform with limited availability of spare parts and service providers which is accompanied with rising maintenance costs. The project proposes replacement of eight of the ten existing controllers to provide a robust SCADA system that utilizes a centralized communication and control protocol and will provide the City the ability to monitor the potable water system (treatment and distribution) and optimize operation as a connected system. The proposed system will also provide critical process information of connected systems to evaluate and improve process operations and efficiency. Staff is proposing a budget of $185,000 for integration services, software, and hardware as part of the WTP SCADA upgrade. New software is recommended by the City’s Information Technology staff, as the City’s existing human-interface software has not kept up with the functionality of other platforms. It is timely to conduct this software upgrade with the replacement of the WTP SCADA system. Item 14 Packet Page 159 Resiliency Phase To assist the City with moving toward an energy neutral WTP, as well as contribute to the City’s sustainability goals and advancement toward Zero Net Energy, the Project looked for opportunities to generate energy on-site from renewable sources. These measures could offset 100 percent of the WTP’s GHG emissions from electricity use. With budgetary constraints and capital priorities, staff is proposing to move forward with two components of the overall Resiliency Phase, the WTP Generator and ground lease. Staff will return to Council with other Resiliency Phase measures, such as the proposed hydroelectric generation facility and on-site solar generation, in the future when a funding approach is identified including the potential for grant funding. WTP Generator. To prepare for Public Safety Power Shutoff (PSPS) events, on August 20, 2019, the City Council authorized the use of up to $2 million including design, equipment acquisition, construction costs and contingencies from Water Fund, Unreserved Working Capital to fund the Water Fund portion of the Emergency Power Supply needs. To date, the City has expended approximately $500,000 toward generator rentals, procurement of two portable generators, and installation of a temporary transfer switch to enable the connection of a backup generator, and other components that enable a future permanent connection at the WTP. In early November, the City Manager approved a Change Order with PG&E and an extension of the August 2018 Work Order until February 28, 2020. This Work Order also included the design of the WTP permanent generator as part of this Project. A portion of the remaining funding approved on August 20, 2019 is proposed to be used for the procurement and installation of a permanent transfer switch and generator to power the WTP. The IGA had looked at providing limited backup power at the WTP’s Transfer Pump Station. However, due to the potential for PSPS events, staff identified the need for broader backup power for all WTP treatment processes. Ground Lease Agreement. City and Cal Poly staff prepared a draft, no-cost, 50-year ground lease for approximately one half-acre, undeveloped land owned by the State of California (Cal Poly) located near the entrance to the WTP on Stenner Creek Road. Staff recommends the City Council approve the attached Resolution authorizing the City Manager to execute the Ground Lease Agreement (Attachment D). The area is proposed for construction staging and will be considered for future on-site solar installation during the Project’s Resiliency Phase. Project Financing Strategy The 2019-21 Financial Plan identified a budget of $14.3 million for the Project; other components are described in Table 2. Staff is requesting using the remaining $1,700,000 budget from the Emergency Power Supply for this project. The Work Order with PG&E will cost Temporary Water Treatment Plant Generator. Item 14 Packet Page 160 $13,999,644 and is proposed to be debt financed. Staff is anticipating future savings in operational and energy costs that will be accounted for in future budget planning. On May 21, 2019, the City Council approved Resolution 11011 authorizing the Utilities Director to enter into a financing agreement with the Infrastructure Bank (IBank). IBank offers a 20-year loan at 3.21 percent where the annual debt service is projected to be approximately $980,000 per year with payments starting in 2020. As private financing may offer more favorable terms for the Project (US Bancorp has offered the City 2.75 percent for a 15-year term), staff is still exploring various alternatives with its financial advisors at this time. Staff recommends Council approve a Resolution (Attachment C) authorizing the Director of Finance and/or the Utilities Director to execute and deliver any and all certificates, contracts and other documents that would be necessary or appropriate to finance the Project. Staff is requesting use of Water Fund Unreserved Working Capital to ensure the City has adequate cash flow for the Project. After the City approves a pay estimate, it is obligated to make the payment within 30 days. While the City has a plan for project financing, it may tak e up to 90 days after the City requests reimbursement to receive funds. Utilizing Water Fund Unreserved Working Capital will allow the City to pay the contractor while it waits for reimbursement and keep the Project moving. There is approximately $18 million (unaudited financials) in Unreserved Working Capital in the Water Fund to manage Project cashflow. Table 2: Project Budget Water Energy Efficiency Project (Specification No. 91566) PG&E Contract/Work Order $13,999,644 SCADA Integration Services, Hardware, and Software $185,000 WTP Generator (2020 Rental and Permanent) $1,700,000 Project Total 15,984,644 Available Balance from Emergency Power Supply $1,700,000 I-Bank or Alternate Financing $14,300,000 Total Project Budget $16,000,000 Previous Council Actions On April 4, 2018, the City Council adopted Resolution 10878 approving the continued participation in the SST program and authorized the City Manager to enter into a service agreement, for the Project pursuant to Government Code section 4217.10 et seq. On August 18, 2018, the City Manager executed a Work Order with PG&E to complete the Investment Grade Audit for an amount not to exceed $860,000. On May 21, 2019, the City Council approved Resolution 11011 authorizing the Utilities Director to enter into a financing agreement with the Infrastructure Bank (IBank). Item 14 Packet Page 161 On August 20, 2019, the City Council authorized the use of up to $2 million including design, equipment acquisition, construction costs and contingencies from Water Fund, Unreserved Working Capital to fund the Water Fund portion of the Emergency Power Supply needs. Policy Context Policies that support the City’s participation in the SST Program include the Major City Goal on Climate Action, the Climate Action Plan, and the Conservation and Open Space Element of the City’s General Plan. Public Outreach Climate action is a Major City Goal for the financial planning period (2019 -21), with attention to reducing the City’s carbon footprint in City operations. The Water Energy Efficiency Project focuses on the City’s Water Treatment Plant operations to reduce energy consumption and optimize the control of energy-consuming systems. CONCURRENCES The Finance Department concurs with the funding approach recommended in this report. The Public Works Department concurs with the recommendation to implement the Project. ENVIRONMENTAL REVIEW The City has determined the Project is categorically exempt from the California Environmental Quality Act pursuant to CEQA Guidelines section 15301, Class 1 – Existing Facilities and 15328, Class 28 - Small Hydroelectric Projects at Existing Facilities (Attachment F). The exemption was filed with the State Clearinghouse on January 24, 2019. FISCAL IMPACT Budgeted: Yes Budget Year: 2019-20 Funding Identified: Yes Fiscal Analysis: Funding Sources Current FY Cost Annualized On-going Cost Total Project Cost General Fund State Federal Fees Other: Water Fund $16,000,000 0 $16,038,770 Total $16,000,000 0 $16,038,770 Staff anticipates an overall reduction in ongoing annual maintenance costs with the new ozone system and other equipment included in the Project. These annual maintenance costs are part of the WTP operating budget projected in the Water Fund. Item 14 Packet Page 162 ALTERNATIVES Do Not Authorize Execution of the Work Order with PG&E (Attachment B). Council should only select this alternative if it feels this public/private partnership with PG&E will not provide a quality, cost effective project and is not in the best interest of the community. Attachments: a - COUNCIL READING FILE - Investment Grade Audit Report b - PGE Implementation Work Order with City of SLO c - Resolution Authorizing Use Water Fund Unreserved Working Capital d - Ground Lease Between Cal Poly and City for WTP e - COUNCIL READING FILE - Resolution 10878 f - Water Energy Efficiency Project_Notice of Exemption Item 14 Packet Page 163 Page 1 of 15 CITY OF SAN LUIS OBISPO WATER TREATMENT PLANT SUSTAINABLE SERVICES TURNKEY IMPLEMENTATION PROJECT WORK ORDER This WORK ORDER (“Work Order”), effective as of the date of the latest signature executing this agreement (“Work Order Effective Date”) is made and entered into by and between City of San Luis Obispo (“Customer”) and Pacific Gas and Electric Company (“PG&E”). This Work Order is subject to the terms and conditions of the PG&E Master Services Agreement, Contract # 21007 between Customer and PG&E dated 09/18/2018 (“Services Agreement”). Customer and PG&E are referred to collectively as the “Parties.” In accordance with the provisions of the Services Agreement, the Customer wishes to engage PG&E to provide the Implementation Work on the following Project: PROJECT NAME: San Luis Obispo SST Water Treatment Plant Upgrades CONTRACT No.: 21007 WORK ORDER AMOUNT $13,999,644 1. SCOPE OF WORK 1.1 PG&E will procure equipment for, construct, implement and deliver to Customer those measures described in the Scope of Work (“SOW”) at Customer’s Water Treatment Plant, located at 1900 Stenner Creek Road, San Luis Obispo, CA 93405 facility described in the SOW (each facility a “Site” and collectively the “Sites”). The SOW is attached hereto as Exhibit A and incorporated by reference herein. The services to be performed under this Work Order shall be referred to hereinafter as the “Implementation Work”. PG&E shall have no obligations to perform any Implementation Work under this Work Order unless and until PG&E and Customer have signed this Work Order. The issuance of this Work Order does not commit PG&E to perform any future work for Customer. 1.2 Subcontractors. PG&E reserves the right to engage third party subcontractors (“Subcontractors”) to perform some or a portion of the Implementation Work. PG&E agrees that, as between PG&E and Customer, PG&E shall be solely responsible for the Subcontractors performance of the Implementation Work under this Work Order. In addition, unless otherwise set forth in this Work Order, the fees and costs billed to Customer shall be inclusive of any, and all, fees and compensation due to any Subcontractors. PG&E shall be responsible for the payment of any compensation, monies, wages or other payment due or allegedly due Subcontractors, including prevailing wages. For purposes of this Agreement, PG&E and its Subcontractors shall be collectively referred to as “PG&E”. 1.3 Term of Work Order. This Work Order shall commence upon the Work Order Effective Date and shall continue until all the Implementation Work is complete; unless sooner terminated or Item 14 Packet Page 164 Page 2 of 15 extended as permitted under the Services Agreement (the “Work Order Term”). PG&E shall complete the Implementation Work in accordance with the milestone dates described in the project schedule attached hereto as Exhibit B and incorporated by reference herein. 2. PERFORMANCE OF THE IMPLEMENTATION WORK 2.1 Project Construction 2.1.1 PG&E’s Responsibilities. 2.1.1.1. Upon execution of this Work Order by Customer and approval of project financing, PG&E shall commence and complete construction and implementation of the Project in accordance with the Services Agreement, this Work Order, the attached SOW and any applicable Work Order modifications. PG&E will provide all professional and other services, labor, materials, equipment, tools, transportation and other services necessary for the proper performance and completion of the Implementation Work per the City stamped plans and specifications approved for construction, and in accordance with Customer applicable codes, regulations, and the 2018 Standard Specifications and Engineering Standards. PG&E will be responsible for the means, methods, techniques, sequences and procedures to implement the Project, and shall oversee Project construction including construction management, and inspection testing per the plans and specifications approved for construction. 2.1.1.2. PG&E will use commercially reasonable efforts to minimize disruption to Customer’s use and operations at the Site. PG&E will provide at least ten (10) calendar days written notice to Customer of any planned power or other utilities outages that will be necessary for the Implementation Work. Customer will cooperate with PG&E in scheduling such outages, and Customer agrees to provide its reasonable approval of any scheduled outage. 2.1.1.3. Customer has first rights to all equipment being removed during demolition. PG&E will coordinate with Customer to identify all items to be turned over to Customer prior to start of demolition. At least five (5) days prior to commencement of demolition, Customer shall provide to PG&E a written list of all equipment to be returned to Customer prior to completion of demolition. PG&E will provide legal offsite disposal for all items not returned to the Customer. Customer is responsible for all labor, equipment, rigging and transportation necessary to remove demolished items from the jobsite and transport them to their final location. 2.1.2 Customer's Responsibilities. 2.1.2.1. Customer will take reasonable measures to provide PG&E, its personnel and Subcontractors with site access, suitable office space and other reasonable accommodations and facilities necessary to permit PG&E personnel and its Subcontractors to perform the Implementation Work on this Item 14 Packet Page 165 Page 3 of 15 Project. While working on the Site, if requested by Customer, the PG&E Project team personnel will be in an area adjacent to Customer's subject matter experts and technical personnel, and all necessary security badges and clearance will be provided for access to this area, all in accordance with Customer’s vendor policies. Additionally, upon request Customer will provide to PG&E and its Subcontractors relevant site information or documents necessary to perform the Implementation Work, including but not limited to a copy of this Work Order, all Work Order modifications, the Services Agreement, a copy of relevant drawings, specifications, operation and maintenance manuals for equipment at the Site, and other pertinent documents. 2.1.2.2. Customer will arrange for a temporary staging area for the storage and assembly of equipment for completion of the Implementation Work, if needed. 2.1.2.3. Customer will coordinate the Implementation Work to be performed by PG&E with the Customer’s operations and other activities and with any other construction project that is ongoing at or around the Site. 2.2 Training and Commissioning Services. PG&E shall provide training to Customer on equipment that PG&E installs in accordance with the terms of this Work Order, and as described in the SOW. PG&E shall perform start up, testing, and commissioning services in accordance with the equipment manufacturers’ startup and commissioning recommendations and the Project Schedule. Customer reserves the right to contract a third-party inspection company to spot-check the work performed by PG&E under this agreement at any time during the construction phase. 2.3 Certificate of Substantial Completion. Promptly upon substantial completion of each Project measure, PG&E will submit a Certificate of Substantial Completion to Customer for such measure. Upon receipt of such certificate, Customer may inspect the Implementation Work and meet with PG&E’s Project Manager to determine if the Project measure has achieved substantial completion. Customer shall, within ten (10) business days of receipt of the Certificate of Substantial Completion, inform PG&E if Customer agrees that the Project measure has achieved substantial completion. If Customer disagrees that the Project measure has achieved substantial completion, Customer will specify in detail and in writing the deficiencies requiring correction in order to achieve substantial completion. When substantial completion has been achieved, Customer will file a Notice of Completion (NOC) with the County Recorder’s Office, and return the NOC with a Certificate of Substantial Completion to PG&E stating that: (i) the Project measure has achieved substantial completion and the date on which it did so, and (ii) that on and after that date Customer will assume responsibility for the Project measure’s operation, maintenance and repair, for damage to or destruction of the Project measure, and for the Project measure’s security and insurance coverage. Title to the Project measure materials and equipment installed pursuant to this Work Order shall pass to Customer on the date of substantial completion together with equipment warranties. Item 14 Packet Page 166 Page 4 of 15 2.4 Close-Out Documentation. Within thirty (30) days after each Certificate of Substantial Completion has been executed by Customer and received by PG&E, PG&E shall provide Customer with (a) any applicable governmental approvals, permits, and sign-offs, (b) all equipment specifications and ratings, (c) any applicable test data and reports, (d) CAD drawings and PDFs of final as-built and shop drawings, (e) operating instructions, operations and maintenance manuals and schedules, recommended spare parts lists, and all other written information relating to the Project measure, and (f) equipment warranties. 2.5 Final Completion. Promptly after PG&E reasonably believes that Final Completion has occurred, PG&E shall issue to Customer a Notice of Final Completion (defined below in Section 2.5.1). Thereafter, Customer shall, within fourteen (14) business days, deliver its acknowledgment that Final Completion has been achieved. The date of Final Completion shall be the date of Customer’s written acceptance of PG&E’s Notice of Final Completion. Customer’s failure to respond within the thirty (30) day notice period shall be deemed acceptance that Final Completion has occurred. 2.5.1 For purposes of this Work Order, the term “Final Completion” means the date when all of the following have been accomplished: (a) each Project measure has achieved Substantial Completion, (b) all “punch list” items have been completed, (c) all Close-out documentation has been delivered to Customer, (d) PG&E has delivered to Customer: (i) a release of all lien rights, (ii) certification that all claims for payment for labor and equipment for which PG&E is responsible have been paid or satisfied, (iii) copies of waivers/releases of lien rights by Subcontractors that have furnished more than twenty-five thousand dollars ($25,000) of goods, services or both for the Project, (iv) notice of all outstanding claims of PG&E, any Subcontractor or equipment or materials supplier or distributor that may affect Customer, PG&E or the Project, (v) a letter of indemnification regarding claims not addressed by waivers/releases, and (vi) removal of all of PG&E and Subcontractors’ personnel, supplies, equipment, waste materials, rubbish, and temporary facilities from the Site. 2.6 PG&E shall not be liable for any claims, liabilities, or losses arising out of, resulting from, or in any way connected with, Customer’s: (a) neglect, misuse or abuse of the equipment; (b) use of unauthorized parts, or removal of any parts; (c) repair, modification or alteration of equipment by anyone other than authorized representatives as described in the warranties covering the equipment; (d) relocation of the equipment. 3. MODIFICATIONS If a modification to this Work Order is necessary, the Parties agree to follow the modification process set forth in Section 4.2. of the Services Agreement. Item 14 Packet Page 167 Page 5 of 15 4. PAYMENT 4.1 PG&E will submit invoices, certified payrolls (redacted and unredacted), and daily inspection reports on a monthly basis to Customer based upon the agreed-upon Bid Schedule, which is attached hereto as Exhibit C and incorporated by reference herein. Prior to the first application for payment a baseline schedule, and schedule of values detailing labor, equipment, and materials shall be approved by the City. A 5% retention will be applied to the monthly progress payment in accordance with Public Contract Code Section 22300 and Customer’s 2018 Engineering Standards and Specifications. Final release of the payment retention shall be conducted in accordance with the City requirements as specified in the 2018 Engineering Standards and Specifications. Proof of insurance, performance bonds, and payment bonds shall be executed and submitted to Customer within 10 working days after Notice of Award (NOA). A Notice to Proceed (NTP) will be issued after all bonds and insurance documents have been approved by Customer. 4.2 Each PG&E invoice will reference this Work Order and be submitted to Customer’s billing address. Customer shall instruct its financial institution or Project financier to render all payments to PG&E within thirty (30) days from the invoice date and when Customer has received a complete application for payment per Section 4.1. Each payment made by Customer or its third-party designee must reference this Work Order and invoice number and be mailed to: PACIFIC GAS AND ELECTRIC COMPANY Attn: Sales and Service Manager, Business Development P.O. Box 770000, Mail code: N10D San Francisco, CA 94177 5. ORDER OF PRECEDENCE In the event of a conflict between the provisions of the Work Order, any modification to the Work Order, and the Services Agreement, the following order of precedence shall apply (in descending order): (a) the modification to this Work Order, (b) the Work Order, and (c) the Services Agreement. 6. NOTIFICATIONS AND INTERFACE Both Parties shall contact and/or deliver written notices (email is allowed) to the business contacts below in the normal course of business, and in the event of any problems which may significantly affect the performance of the Implementation Work under this Work Order. Item 14 Packet Page 168 Page 6 of 15 BUSINESS CONTACTS CUSTOMER REPRESENTATIVE PG&E REPRESENTATIVE Name Name Brent Patera Title Title Business Development Manager Address Address 245 Market Street, Mail Code N10D San Francisco, CA 94105 Telephone Telephone 415-973-5335 Email Email Brent.Patera@PGE.com 7. AUTHORITY Each Party represents and warrants that the individual signing below, as well as any Work Order Modifications and approvals hereunder, has and shall have all requisite power and legal authority to bind the Party on whose behalf he/she is signing to that Party’s obligations hereunder. IN WITNESS THEREOF, the parties agree to be bound by this Work Order as of the date first set forth above. CITY OF SAN LUIS OBISPO PACIFIC GAS AND ELECTRIC COMPANY Signature: Signature: Print Name: Print Name: Title: Title: Date: Date: Item 14 Packet Page 169 Page 7 of 15 EXHIBIT A SCOPE OF WORK Scope of Work Overview PG&E will implement energy conservation measures (“ECMs”) at the Customer’s Water Treatment Plant (“WTP”). The ECMs are described generally below, and more specifically in the Investment Grade Audit Report, dated 10/18/19 (“IGA Report”). The IGA Report is attached hereto as Attachment 1 and is incorporated herein. The Scope of Work (“SOW”) to be included in the Work order as outlined in the IGA includes: ECM # ECM Name 2 Ozone System Upgrade 4 Transfer Pump Station Upgrades 9 Plant Service Water System Upgrades 11 SCADA /Controls Upgrades ECM # 2 –Ozone System Upgrade The focus of this measure is the removal and replacement of the existing ozone water treatment system with a new system that offers improved reliability, functionality and uses less energy to operate when compared to the existing system. The SOW includes the removal and proper disposal of the existing ozone system in its entirety with a new turnkey system which will include all components necessary for a complete functioning system. The new ozone generators will be a modular design system by Primozone, a Pureflow Ozone Division. The new generators will be fed by new LOx storage and delivery systems. As this is a replacement of a critical system in an operating plant, careful consideration was given to the planned approach. It is understood that the WTP must always remain in operation during construction. The construction shall be accomplished in four phases: Phase 1 Demolition; Phase 2 Construction, Phase 3 Demolition; and Phase 4 Construction. Ozone generators #1 and #2 and destruct Unit #2 shall remain fully operable during Phase 1 until the new system is online and accepted by the owner. For the construction phase, a written schedule outlining the proposed phasing and sequence of the work will be developed by PG&E and the Customer to ensure that the WTP remains in operation during the duration of the construction. Item 14 Packet Page 170 Page 8 of 15 ECM # 4 – Transfer Pump Station Upgrades This measure includes the addition of Variable Frequency Drives (“VFDs”) to each of the four existing transfer pumps. The VFDs will improve overall system efficiency and controllability by providing Customer with the ability to slowly ramp up each pump when the transfer pumps are brought online. Consequently, Customer will more easily be able to eliminate pressure spikes, and will have the ability to continually modulate the pump speed to meet varied demands of the high-pressure system. This ECM will include the following SOW: • Install a wall-mounted Allen Bradley VFDs for each of the four existing transfer pumps and integrate the VFDs into the Supervisory Control and Data Acquisition (“SCADA”) system. Each VFD will be configured with a bypass, disconnect switch, line reactor and communication interface compatible with Allen Bradley CompactLogix controllers. • Modify the existing hardwired controls for the transfer pumps and their discharge valves to function with the new VFDs. • Integrate the existing tank level sensor at the Bishop Storage tank to monitor the high-pressure system. • Add sequence of operation in the SCADA system to allow for automatic operation of the Transfer pumps to directly serve the high-pressure system when Reservoir-2 is out-of-service or disconnected from the system. • Add programming to the Throttle Position Sensor (“TPS”) control system with logic to optimize the operation of the pumps when serving Reservoir-2 based on Clearwell Levels, Reservoir-2 levels and Time-of-Use (“TOU”) electric rates. ECM # 9 – Plant Service Water System Upgrades This ECM will include the following SOW: This measure includes the replacement of the existing booster pump system (“BPS”) with a new packaged system that is sized for the flow rates that will occur after PG&E completes ECM 2 by replacing the ozone system. The new BPS will utilize variable speed pumps to efficiently maintain the required system discharge pressure. The BPS system will include a pressurized diaphragm tank that discharges water to the plant service water system when the pumps shut off during low-demand conditions. The proposed BPS is manufactured by Grundfos. The factory-assembled system includes three variable speed, Item 14 Packet Page 171 Page 9 of 15 multistage vertical inline pumps with integrated motor/VFD rated for 80 GPM each, suction and discharge piping, and a control panel. The SOW includes: • Removal and disposal of the existing BPS and control panel. • Furnishing, installing, start-up and commissioning the new BPS and diaphragm tank. • Provision of temporary BPS for the PSWS during demolition of the existing system and installation of the new system. ECM # 11 – SCADA/Controls Upgrades The objective of this measure is to improve the existing WTP SCADA system by upgrading the existing controllers to a platform that is compatible with the recently-installed system on the water distribution system. This measure includes the replacement of the existing Bristol Babcock controllers with CompactLogix and/or ControlLogix Programmable Logic Controllers (“PLCs”) by Allen-Bradley. Compact Logix and Control Logix represent small and large PLCs from the same family of controllers. Compact Logix and Control Logix PLCs are fully compatible with each other and use the same programming software. The system replacements/upgrades are described below. • At the Ozone building CSP-1 and CSP-7: o PG&E will remove the existing controllers and infrastructure. One new integrated Ozone controller will be provided and installed in conjunction with the Ozone system upgrade described in ECM 2. This new controller will be provided with the following: ▪ Provide a new cabinet and custom back panel ▪ The new integrated Ozone controller will be an Allen Bradley PLC ▪ Add a new power supply and uninterruptable power supply ▪ Provide new Ethernet switch ▪ Provide new terminal blocks, Relays, Fuses as required Item 14 Packet Page 172 Page 10 of 15 • At the Ozone contact basin CSP-2: o PG&E will remove this existing controller and associated wiring as it will no longer be needed for the new Ozone system upgrade installed as part of ECM 2 • At the Filter Building CSP–3 and CSP-4: o Provide a new custom back panel for installation in the existing PLC cabinet o Replace existing controllers with a new Allen Bradley PLC o Add a new power supply and uninterruptable power supply o Provide new Ethernet switch o Provide new terminal blocks, Relays, Fuses as required • At the Chemical Building CSP-5: o Replace with new PLC in the existing cabinet and location o Provide a new custom back panel for installation in the existing PLC cabinet o Replace existing controllers with a new Allen Bradley PLC o Add a new power supply and uninterruptable power supply o Provide new Ethernet switch o Provide new terminal blocks, Relays, Fuses as required • At the Plant Water Service Pump Station CSP-6: o Provide a new custom back panel for installation in the existing PLC cabinet o Replace existing controllers with a new Allen Bradley PLC o Add a new power supply and uninterruptable power supply o Provide new Ethernet switch o Provide new terminal blocks, Relays, Fuses as required Item 14 Packet Page 173 Page 11 of 15 • At the TPS CSP-8: o Provide a new custom back panel for installation in the existing PLC cabinet o Replace existing controllers with a new Allen Bradley PLC o Add a new power supply and uninterruptable power supply o Provide new Ethernet switch o Provide new terminal blocks, relays, and fuses as required • Reprogramming Services. PG&E will reprogram the upgraded PLCs listed above with existing sequences, alarms and trending • Portable computer tablets. PG&E will provide two (2) portable computer tablets (Apple iPad or equal) with Graphic interface software to optimize operator interface Item 14 Packet Page 174 Page 12 of 15 EXHIBIT B ESTIMATED PROJECT SCHEDULE Below is the estimated project schedule. PG&E will submit a detailed schedule following the kick-off meeting. Duration Assumed Start Assumed Finish Preconstruction 241 days 12/02/19 11/02/20 Receive NTP 1 day 12/02/19 12/02/19 Bond and Insurance 5 days 12/01/19 12/16/19 Write Subcontracts 5 days 12/17/19 12/23/19 Cushman Precon 190 days 12/24/19 09/14/20 Design Drawings 4 months 12/24/19 04/13/20 Submittal Review Process Ozone Equipment 8 weeks 12/24/19 02/17/20 Submittal Review Process Concrete Rebar Pip 8 weeks 12/24/19 02/17/20 Submittal Review Process Electrical and Pumps 8 weeks 04/14/20 06/08/20 Release electrical 1 day 06/09/20 06/09/20 Release ozone equipment 1 day 02/18/20 02/18/20 Ozone equipment lead time 14 weeks 02/18/20 05/25/20 Procure miscellaneous material 4 weeks 02/19/20 03/17/20 Procure electrical and pumps 14 weeks 06/09/20 09/14/20 SCADA Precon 225 days 12/24/19 11/02/20 Engineering and Submittals 180 days 12/24/19 08/31/20 Materials Procurement 45 days 09/01/20 11/02/20 Hazmat layout and testing 6 days 04/14/20 04/21/20 Permits 5 days 04/14/20 04/20/20 Construction 305 days 03/18/20 05/18/21 Ozone 275 days 03/18/20 04/06/21 Mobilize CCC 5 days Wed 3/18/20 Tue 3/24/20 LOX Excavate for Tank pad and LOX receiving 4 weeks Wed 3/25/20 Tue 4/21/20 LOX Form pour Strip LOX tank pad and LOX receiving 6 weeks Wed 4/22/20 Tue 6/2/20 LOX excavate Lay Backfill LOX Yard Pipe 4 weeks Wed 6/3/20 Tue 6/30/20 LOX set and connect LOX tank and Evaporators 1 weeks. Wed 7/1/20 Tue 7/7/20 Phase 1 Ozone Demo 7 weeks Wed 4/22/20 Tue 6/9/20 Phase 1 Concrete 3 weeks Wed 6/10/20 Tue 6/30/20 Item 14 Packet Page 175 Page 13 of 15 Phase 1 Equipment 4 weeks Wed 7/1/20 Tue 7/28/20 Phase 1 Mechanical 6 weeks Wed 7/29/20 Tue 9/8/20 Phase 1 Electrical 8 weeks Wed 8/26/20 Tue 10/20/20 Ozone Phase 1 Training 5 days Wed 10/21/20 Tue 10/27/20 Phase 1 Startup and Test 5 weeks Wed 10/21/20 Tue 11/24/20 Phase 2 Demo 4 weeks Wed 11/25/20 Tue 12/22/20 Phase 2 Concrete/Tile 2 weeks Wed 12/23/20 Tue 1/5/21 Phase 2 Mechanical 4 weeks Wed 1/6/21 Tue 2/2/21 Phase 2 Electrical 6 weeks Wed 1/20/21 Tue 3/2/21 Ozone Phase 2 Training 5 days Wed 3/3/21 Tue 3/9/21 Phase 2 Startup and Test 5 weeks Wed 3/3/21 Tue 4/6/21 Plant Service Water Upgrade 41 days Tue 9/15/20 Tue 11/10/20 Mobilize CCC 1 day Tue 9/15/20 Tue 9/15/20 Demo and set up bypass 2 weeks Wed 9/16/20 Tue 9/29/20 Install new pumps and mechanical 3 weeks Wed 9/30/20 Tue 10/20/20 Install new Electrical 1 week Wed 10/21/20 Tue 10/27/20 Training 5 days Wed 10/28/20 Tue 11/3/20 Startup and Test 1 week Wed 11/4/20 Tue 11/10/20 Transfer Pump Station Upgrades 26 days Wed 11/11/20 Wed 12/16/20 Mobilize CCC 1 day Wed 11/11/20 Wed 11/11/20 Install TPS VFD's 3 weeks Thu 11/12/20 Wed 12/2/20 Training 5 days Thu 12/3/20 Wed 12/9/20 Startup and Test 1 week Thu 12/10/20 Wed 12/16/20 SCADA Upgrades 218 days Mon 7/6/20 Wed 5/5/21 Mobilize TESCO 2 days Mon 7/6/20 Tue 7/7/20 Site Installation Work 150 days Wed 7/8/20 Tue 2/2/21 Training 5 days Wed 2/3/21 Tue 2/9/21 System Implementation and startup 61 days Wed 2/10/21 Wed 5/5/21 Closeout 30 days Wed 4/7/21 Tue 5/18/21 TOTALS 382 days 12/2/19 05/18/21 Item 14 Packet Page 176 Page 14 of 15 EXHIBIT C BID SCHEDULE Item 14 Packet Page 177 Page 15 of 15 ATTACHMENT 1 INVESTMENT GRADE AUDIT REPORT Item 14 Packet Page 178 R ______ RESOLUTION NO. _____ (2019 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AUTHORIZING USE OF WATER FUND UNRESERVED WORKING CAPITAL FOR THE WATER ENERGY EFFICIENCY PROJECT WHEREAS, on April 4, 2018, the City Council adopted Resolution 10878, reviewed the Preliminary Energy Assessment for the Water Energy Efficiency Project (Project) and voted in favor of proceeding to the Project’s Investment Grade Audit; and WHEREAS, on May 21, 2019, the City Council approved Resolution 11011 authorizing the Utilities Director to enter into a financing agreement with the Infrastructure Bank (IBank) to debt finance the Project. WHEREAS, in June 2019, the City Council approved 2019-21 Financial Plan, Capital Improvement Program, identified a Project budget of $14,300,000; and WHEREAS, On August 20, 2019, the City Council authorized the use of up to $2 million including design, equipment acquisition, construction costs and contingencies from Water Fund, Unreserved Working Capital to fund Emergency Power Supply needs and $1,700,000 is available to contribute for funding the Project; and WHEREAS, on November 1, 2019, the City Manager approved an extension and an amendment to the Work Order to include design for a permanent Water Treatment Plant generator in response to potential Public Safety Power Shutoff events; and WHEREAS, the total available budget for the Efficiency Phase of the Project is $16,000,000; and WHEREAS, private financing (US Bancorp, and others) is also being considered for the Project as it may offer the City more favorable financing terms; and WHEREAS, a balance of approximately $18 million (unaudited financials) is available from Water Fund, Unreserved Working Capital to fund the Efficiency Phase of the Project and manage cashflow. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. The Director of Finance and/or the Utilities Director is authorized to execute and deliver any and all certificates, contracts and other documents necessary or appropriate to finance the Project. Item 14 Packet Page 179 Resolution No. _____ (2019 Series) Page 2 R ______ SECTION 2. Environmental Review. Construction of this project is exempt from the California Environmental Quality Act (CEQA) 15301, Class 1 – Existing Facilities and 15328, Class 28 - Small Hydroelectric Projects at Existing Facilities. The Community Development Department issued a Notice of Exemption on January 24, 2019. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2019. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this ___________ day of ____________________, ___________. ____________________________________ Teresa Purrington City Clerk Item 14 Packet Page 180 12767-0008\2247544v1.doc GROUND LEASE by and between BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY and CITY OF SAN LUIS OBISPO for WATER TREATMENT PLANT HYDROGENERATION AND RENEWABLE ENERGY FACILITY SAN LUIS OBISPO, CALIFORNIA Dated Item 14 Packet Page 181 -1- 12767-0008\2247544v1.doc GROUND LEASE (Board of Trustees of the California State University/City of San Luis Obispo) Water Treatment Plant Hydrogeneration and Renewable Energy Facility San Luis Obispo, California THIS GROUND LEASE (“Lease”) is effective as of _____________, 2019 (“Effective Date”), by and between the Board of Trustees of the California State University, on behalf of California Polytechnic State University, San Luis Obispo (“University” or “Lessor”) and the City of San Luis Obispo, a municipal corporation (“City” or “Lessee”): RECITALS A. Lessor is the owner of certain real property consisting of an approximately 0.5-acre portion of the parcel identified as Assessor’s Parcel Number 073-271-001, legally described in Exhibit A and depicted in Exhibit B, attached hereto and made a part hereof by this reference (“Property”), located adjacent to the City’s Water Treatment Plant (“WTP”) on Stenner Creek Road in San Luis Obispo, California, and proximate to the existing 12-inch Nacimiento Water Project pipeline near the entrance to the WTP. B. Lessee wishes to construct and operate a Hydrogeneration and Renewable Energy Facility on the Property, including a turbine generating unit, photovoltaic arrays, and a backup generator (“Project”), in order to increase system reliability, reduce ut ility costs, reduce the consumption of fossil fuel based energy, and reduce greenhouse gas emissions, and Lessor wishes to lease the Property to Lessee for such purposes, which will benefit as water used to serve the University is treated at the City’s WTP. NOW THEREFORE, in consideration of the foregoing recitals which are incorporated by this reference and the covenants hereinafter contained, Lessor and Lessee agree as follows: ARTICLE 1. BASIC PROVISIONS 1.1 Description of Property. A legal description and map depiction of the Property are hereto attached as Exhibit “A”. Lessee accepts the property in its current “as-is” condition without any representations or warranties from Lessor as to its condition or suitability for the Project, or any associated City use. 1.2 Lease and Grant of Use. Lessor does lease to Lessee and Lessee does hereby lease from Lessor, upon the terms and conditions set forth herein, the Property described in Exhibit A and depicted in Exhibit B (“Premises”). Item 14 Packet Page 182 -2- 12767-0008\2247544v1.doc 1.3 Notices: LESSOR/UNIVERSITY: Cal Poly Strategic Business Services 1 Grand Avenue Building 1 Room 128 San Luis Obispo, CA 93407 Attn: Dru Zachmeyer, Assistant Vice President, Strategic Business Services Email: dzachmey@calpoly.edu LESSEE/CITY: City of San Luis Obispo 879 Morro Street San Luis Obispo, CA 93401-2710 Attn: Jennifer Metz, Utilities Project Manager Email: jmetz@slocity.org 1.4 Exhibits. The following exhibits are attached hereto and incorporated herein by this reference: Exhibit A – Legal Description of Property Exhibit B - Map Depicting Property ARTICLE 2. TERM 2.1 Term. Fifty (50) years commencing upon approval of this Lease by Lessee’s City Council (the “Commencement Date”) and terminating at midnight on the day before the fiftieth anniversary of the Commencement Date, subject to earlier termination as provided herein. The phrase “Term of this Lease” or “the Term hereof” as used in this Lease, or words of similar import, will refer to the initial term of this Lease together with any holdover or any option termed. 2.2 Holdover. If Lessee remains in possession of the Premises or any part thereof after the expiration of the Term of this Lease, such occupancy will be a tenancy which is terminable only upon 90 days written notice from Lessor or 30 days written notice from Lessee, and subject to all of the terms, covenants and conditions of this Lease. ARTICLE 3. RENT 3.1 Rent. The use of the Property will be gratis during the initial term, any option term, or holdover. Consideration for this Lease will be Lessor’s adherence to the terms and conditions of the Lease. Item 14 Packet Page 183 -3- 12767-0008\2247544v1.doc ARTICLE 4. USE 4.1 Permitted Use. Lessee will utilize the Property only for the development, construction, operation, and maintenance of the Project, including the installation, construction, operation, maintenance, repair, replacement, relocation, and reconstruction of the Project components and equipment and all fixtures or appurtenances incidental thereto (collectively, “Permitted Uses”). Fixtures and appurtenances used or useful in the operation of the Project may be constructed any distance either below or above the ground surface and may include security fencing. The Permitted Uses further include the removal of the Project components, fixtures, and appurtenances, and to remove objects interfering with the construction, operation and maintenance thereof. 4.2 Compliance with Law. Lessee will, at Lessee’s sole cost and expense, comply with all applicable statutes, laws, and regulations. Upon completion of construction, if any license, permit, or other governmental authorization is required for the lawful use or occupancy of the Property or any portion of the Property, Lessee will procure and maintain said authorization, at Lessee’s sole cost and expense, throughout the Term of this Lease. ARTICLE 5. DISCRETIONARY PERMITS 5.1 Applications. During the term of this Lease, Lessor will, promptly upon Lessee’s request, sign (as owner of the Property) and acknowledge any application to any governmental entity having jurisdiction over the Property for any of the discretionary permits necessary for construction and operation of the Project, provided that Lessor incurs no cost (other than the administrative and consulting cost necessary for review). No such signing by Lessor will be deemed to be Lessor’s commitment to satisfy, any condition (i) in or precedent to a discretionary permit or (ii) adversely affecting Lessor’s interest in the Property. ARTICLE 6. EASEMENTS 6.1 Utility Easements. Lessor will execute (as owner of the Property), acknowledge and deliver to Lessee for recording, any grant of easement (i) over, upon, across or under the Property or any portion thereto (ii) in favor of any governmental subdivision or any gas, electric, telephone or similar company and (iii) for the purpose of (a) widening any street, (b) transmitting potable water, storm water, sewage, gas, electricity, telephone or other communication, or (c) providing to the Property and the persons using and enjoying the Property such materials and services as are, from time to time, customarily understood to be “utilities.” ARTICLE 7. PROJECT CONSTRUCTION 7.1 Construction Scope. Lessee will provide all services necessary to construct the Project. Item 14 Packet Page 184 -4- 12767-0008\2247544v1.doc 7.2 Compliance with Laws. The Project will be constructed and all work on the Property will be performed in accordance with all applicable laws, ordinances, and regulations of all federal, state, county or local governmental agencies having jurisdiction over the Property, as amended from time to time. All work performed on the Property under this Lease will be done in a good and workmanlike manner. 7.3 Mechanics Liens. At all times during the term of this Lease, Lessee will make its best efforts to keep the Property and the Project now or hereafter located on the Property free and clear of all liens and claims of liens for labor, service, materials, supplies, or equipment performed on or furnished to the Property. 7.4 Ownership of Project. During the term of this Lease, and for any extended term or holdover period, and upon termination of this Lease, title to the Project and all components thereof, including all associated equipment, fixtures, and appurtenances, will be vested in Lessee. ARTICLE 8. MAINTENANCE, REPAIR, DAMAGE AND DESTRUCTION 8.1 Maintenance. Except as otherwise provided herein, at all times during the term of this Lease including any option term or holdover, Lessee will, at Lessee’s sole cost and expense, keep and maintain the Property and the Project in good order and repair, and in a safe condition. Lessor will have no obligation to alter, remodel, improve, or repair the Property or the Project. 8.2 Repair. At all times during the term of this Lease and for any extended term, Lessee will, at Lessee’s own cost and expense, do all of the following: 8.2.1 Make all alterations, additions or repairs to the Property or the Project required by any applicable law, ordinance, statute or regulation now or hereafter issued by any federal, state, county, local, or other governmental agency, as amended from time to time; and 8.2.2 Observe and comply with all applicable laws, ordinances, statutes, orders and regulations now or hereafter made respecting the Property or the Project by any federal, state, county, local, or other governmental agency. 8.3 Damage or Destruction. In the event of damage to, or destruction of all or any portion of the Project, Lessee will have the option to commence and proceed diligently to repair, reconstruct, and restore (collectively, “restore”) the Project to substantially the same condition as it existed immediately prior to the casualty, whether or not insurance proceeds are sufficient to verify the actual cost of restoration. This Lease will continue in full force and effect notwithstanding such damage or destruction; provided, however, that the Lessee may, at its option, demolish the Project and terminate the Lease. 8.4 Utilities. At all times during the term of this Lease, Lessee will pay the expenses of all utility services supplied to the Property, including but not limited to all electricity and gas units, together with any taxes thereon. Item 14 Packet Page 185 -5- 12767-0008\2247544v1.doc ARTICLE 9. INDEMNIFICATION AND INSURANCE During the term of this Agreement or as otherwise specified herein, the following indemnification and insurance requirements will be in effect. Either party, at its sole option, may elect to use a program of self-insurance, commercial insurance, or any combination thereof to satisfy its insurance requirements herein. 9.1 Indemnification. 9.1.1 The Lessor will indemnify, defend, and hold harmless Lessee, its elected and appointed officers, agents, and employees from and against any and all liability, loss, expense (including reasonable attorney’s fees), or claims for injury or damages arising out of the performance of this Lease, but only in proportion to and to the extent such liability, loss, expense, attorney’s fees, or claims for injury or damages are caused by or result from the negligent or intentional acts or omissions of Lessor, its trustees, officers, agents, employees, contractors, and/or consultants. 9.1.2 The Lessee will indemnify, defend and hold harmless Lessor, its trustees, officers, agents, and employees from and against any and all liability, loss, expense (including reasonable attorney’s fees), or claims for injury or damages arising out of the performance of this Lease, but only in proportion to and to the extent such liability, loss, expense, attorney’s fees, or claims for injury or damages are caused by or result from the negligent or intenti onal acts or omissions of Lessee, its trustees, officers, agents, employees, contractors, and/or consultants. 9.1.3 The indemnification provisions of this section will survive the expiration or termination of this agreement. 9.2 General Insurance - Lessee Requirements. Without limiting Lessee’s indemnification of Lessor and at its own expense, Lessee will provide and maintain the following programs of insurance. 9.2.1 General Liability insurance (providing scope of coverage equivalent to ISO policy form CG 00 01) with limits of not less than the following: General Aggregate: $2 million Each Occurrence: $1 million Such insurance will name Lessor, its trustees, officers, employees, agents, and volunteers as additional insureds. 9.2.2 Workers Compensation and Employers’ Liability insurance satisfying statutory requirements, which includes Employers’ Liability coverage with limits of not less than $1 million per accident. 9.2.3 Property insurance covering damage to Lessee-constructed improvements from perils covered by the Causes-of-Loss Special Form (ISO form CP 10 30), written for the full replacement cost of the property, and including a Waiver of Subrogation in favor of Lessor. Item 14 Packet Page 186 -6- 12767-0008\2247544v1.doc 9.2.4 Lessee Contractors. Throughout the period of any construction, Lessee will require its Contractors to provide and maintain, or Lessee will provide and maintain, types and limits of insurance coverage appropriate to the Project, at no cost to Lessor. All Contractor insurance will be primary to and not contributing with any other insurance or self-insurance programs maintained by Lessee or Lessor. Lessor and Lessee also will be named as additional insureds under all Contractor general liability coverage. 9.3 General Insurance - Lessor Requirements. Without limiting Lessor’s indemnification of Lessee and at its own expense, Lessor will provide and maintain the following programs of insurance. 9.3.1 General Liability insurance (providing scope of coverage equivalent to ISO policy form CG 00 01) with limits of not less than the following: General Aggregate: $2 million Each Occurrence: $1 million Such insurance will name Lessee, its officers, employees, agents, and volunteers as additional insureds. 9.3.2 Workers Compensation and Employers’ Liability insurance or qualified self-insurance satisfying statutory requirements, which includes Employers’ Liability coverage with limits of not less than $1 million per accident. 9.4 Review of Insurance Requirements. The types and limits of coverage required under this Agreement may be reviewed annually by Lessor and Lessee. Coverage types and limits will reflect the prevailing practice in the area for insuring similar property and casualty risks, and be subject to the mutual agreement of the parties. 9.5 Self Insurance. Notwithstanding the provisions of this Article 11, either Lessor or Lessee, at its sole option, may satisfy all or any part of the insurance requirement through the us e of program of self-insurance. Certificate evidencing coverage or letter evidencing self-insurance will be provided by the respective parties within sixty (60) days after the execution of this agreement. ARTICLE 10. DEFAULT AND REMEDIES 10.1 Lessor’s Default. Lessor will not be in default of any of its obligations under this Lease unless Lessor fails to perform such obligations within a reasonable time, but in no event less than thirty (30) days after written notice by Lessee to Lessor specifying wherein Lessor has failed to perform such obligations; provided however, that if the nature of Lessor’s default is such that more than thirty (30) days are required for its cure, Lessor will not be in default if Lessor commences such cure within such thirty (30) day period and thereafter diligently prosecutes the same to completion. 10.2 Lessee’s Remedies. In the event of any default by Lessor as described in Section 10.1 above, subject to all applicable laws that may restrict remedies against a California State Item 14 Packet Page 187 -7- 12767-0008\2247544v1.doc University, Lessee’s remedies under this Lease are to pursue Lessor for specific performance and/or actual damages, resulting from Lessee’s default. Lessee will have no rights as a result of any default by Lessor until Lessee gives thirty (30) days’ notice to Lessor, specifying the nature of the default. Lessor will then have the right to cure such default, and Lessor will not be deemed in default if Lessor cures such default within thirty (30) days after receipt of notice of the default, or within such longer period of time as may reasonably be necessary to cure the default, provided that Lessor commences such cure within such thirty (30) days. 10.3 Lessee’s Default. Lessee will not be in default of any of its obligations under this Lease unless Lessee fails to perform such obligations within a reasonable time, but in no event less than thirty (30) days after written notice by Lessor to Lessee specifying wherein Lessee has failed to perform such obligations; provided however, that if the nature of Lessee’s default is such that more than thirty (30) days are required for its cure, Lessee will not be in default if Lessee commences such cure within such thirty (30) day period and thereafter diligently prosecutes the same to completion. 10.4 Lessor Remedies. In the event of any default by Lessee as described in Section 10.3 above, subject to all applicable laws that may restrict remedies against a city, including, but not limited to, restrictions within the California Government Code, Lessor’s remedies under this Lease are to pursue Lessee for specific performance and/or actual damages resulting from Lessee’s default. Lessor will have no rights as a result of any default by Lessee until Lessor gives thirty (30) days’ notice to Lessee, specifying the nature of the default. Lessee will then have the right to cure such default, and Lessee will not be deemed in default if Lessee cures such default within thirty (30) days after receipt of notice of the default, or within such longer period of time as may reasonably be necessary to cure the default, provided that Lessee commences such cure within such thirty (30) days and thereafter diligently prosecutes the same to completion. ARTICLE 11. HAZARDOUS MATERIALS 11.1 Compliance. During the term of this Lease, Lessee, at its sole cost, will comply with all applicable laws, statutes, ordinances, codes regulations and orders relating to the receiving, handling, use, storage, transportation, discharge, release, and disposal of Hazardous Material (as defined below) in or about the Property or the Project. Lessee will not cause or permit any Hazardous Material to be brought upon, kept, or used in or about the Property or the Project by Lessee or Lessee’s agents in a manner or for a purpose prohibited by any federal, state, or local agency or authority. 11.2 Notice. Lessee will immediately provide Lessor with telephonic notice, which will promptly be confirmed by written notice, of any and all spillage, discharge, release, and disposal of Hazardous Material onto or within the Property or the Project, including the soils and subsurface waters thereof, where the spillage, discharge, release, or disposal by law must be reported to any federal, state, or local agency, and will also report to Lessor any injuries or damages resulting directly or indirectly therefrom. 11.3 Definition of Hazardous Material. As used herein, “Hazardous Materials” means any chemical, substance, material, controlled substance, object, condition, waste, living organism, Item 14 Packet Page 188 -8- 12767-0008\2247544v1.doc or combination thereof, whether solid, semi solid, liquid, or gaseous, which is or may be hazardous to human health or safety or to the environment due to its radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity, mutagenicity, phytotoxicity, infectiousness, or other harmful or potentially harmful properties or effects, including, without limitation, molds, toxic levels of bacteria, petroleum and petroleum products, asbestos, radon, polychlorinated biphenyls (PCBs), refrigerants (including those substances defined in the Environmental Protection Agency’s “Refrigerant Recycling Rule,” as amended from time to time), and all of those chemicals, substances, materials, controlled substances, objects, conditions, wastes, living organisms or combinations thereof which are now or become in the future listed, defined or regulated in any manner by any Environmental Law based upon, directly or indirectly, such properties or effects. As used herein, “Environmental Laws” means any and all federal, state, or local environmental, health and/or safety-related laws, regulations, standards, decisions of courts, ordinances, rules, codes, orders, decrees, directives, guidelines, permits or permit conditions, currently existing and as amended, enacted, issued or adopted in the future which are or become applicable to Lessor, the Project, or the Property. ARTICLE 12. OPTION TO EXTEND 12.1 Option to Extend. On or prior to the date which is twelve (12) months before the expiration of the initial fifty (50) year term hereof, provided Lessee will not then be in material default (as defined herein) under the provisions of this Agreement, Lessee may notify Lessor of its request to exercise the Option to extend this Lease for up to three additional ten (10) year terms, each additional ten-year term being referenced herein as an “Extension Term,” by providing written notice to Lessor (“Option”). If Lessee fails to exercise its Option as provided for herein, this Lease will expire upon the 50th anniversary of the commencement date or upon the expiration of the exercised Extension Term, whichever is later, unless otherwise agreed by the parties. Upon receipt of a notice to exercise the Option, Lessor will extend the Term Expiration Date for the period of the Extension Term upon the same terms and conditions of this Lease. ARTICLE 13. QUIET ENJOYMENT AND RIGHT OF ENTRY 13.1 Quiet Enjoyment. Lessor covenants and agrees that it will not take any action to prevent Lessee’s quiet enjoyment of the Property during the Term of this Lease. 13.2 Right of Entry. Lessor reserves the right for any of its duly authorized representatives to enter the Property upon prior notice at any reasonable time for any reasonable actions, including but not limited to (i) inspecting the Property and (ii) posting in such places as Lessor may select notices of non-responsibility for works of construction, repair or improvement made by Lessee. In doing so, Lessor will not interfere with Lessee’s enjoyment and use of the Property and Project except in case of emergency improvements. Lessor acknowledges that the Project will include security fencing and that entry onto the Property will require coordination with Lessee. Item 14 Packet Page 189 -9- 12767-0008\2247544v1.doc ARTICLE 14. PROPERTY RECORDS 14.1 Property Records. Within thirty (30) days of the Effective Date of this Lease, Lessor will provide to the Lessee copies of all non-privileged or non-confidential books and records of Lessor with respect to the ownership, maintenance, and operation of the Property, including any appraisals, surveys, engineering, environmental, and other reports and analyses of the Property which are in Lessor’s possession. ARTICLE 15. EMINENT DOMAIN 15.1 Agreement Governs. In the event of any acquisition of all or any part of the Property, or any interest therein by eminent domain, whether by condemnation proceeding or transfer in avoidance of an exercise of the power of eminent domain or otherwise during the Term or any extension thereof the rights and obligations of the parties with respect to such appropriation will be as provided in this Article 15. 15.2 Termination of Agreement. This will terminate if the entire Property is permanently taken under the power of eminent domain or if a material part of the Property is taken such that the operation of the Project cannot feasibly continue on the remaining portion of the Property. If only part of the Property is permanently taken under the power of eminent domain and Lessee can reasonably continue to operate the Project, this Lease will not terminate and will remain in full force in effect with respect to the remaining portion of the Property. 15.3 Allocation of Condemnation Award. In the event of a permanent condemnation or taking of all or part of the Property at any point during the Term or any extension thereof, Lessor will be entitled to any award which may be made in such taking or con demnation to the extent such award relates to the fee title to the Property, and Lessee will be entitled to any award which may be made in such taking or condemnation to the extent it relates to the Project. Nothing contained in this Article 15 will be deemed to give Lessor any interest in or to require Lessee to assign to Lessor any separate awards designated by the condemning authority and Lessee will be able to retain any separate award as designated by the condemning authority made to Lessee for the taking of Lessee’s personal property, or the interruption of or damage to Lessee’s operations on the Property, except to the extent that the separate award includes damages for lost sublease rent, in which case Lessor will be entitled to its share of those damages. ARTICLE 16. TERMINATION 16.1 Termination by Lessor. This Lease may be terminated unilaterally by Lessor upon Lessee’s failure to commence construction of any portion of the Project within five (5) years of the effective date of this Lease, by providing prior written notice to Lessee one hundred and eighty (180) days prior to termination. 16.2 Termination by Lessee. This Lease may be terminated unilaterally by Lessee for convenience by providing prior written notice to Lessor one hundred and eighty (180) days prior to termination. Item 14 Packet Page 190 -10- 12767-0008\2247544v1.doc 16.3 Termination by Agreement of the Parties. Notwithstanding Sections 16.1 or 16.2, the Lease may be terminated by the mutual agreement of the parties at any time, upon terms and conditions agreed to by the parties. ARTICLE 17. GENERAL PROVISIONS 17.1 Waiver and Modification. No provision of this Lease may be modified, amended or added to except by an agreement in writing signed by all parties hereto. 17.2 Applicable Law. This Lease and all rights and obligations arising out of it will be construed in accordance with the laws of the State of California and without regard to any conflict of laws provisions. 17.3 Time. Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor. 17.4 Authority to Execute Lease. Lessor and Lessee each acknowledge that it has all necessary right, title, and authority to enter into and perform its obligations under this Lease, that this Lease is a binding obligation of such party and has been authorized by all requis ite action under the party’s governing instruments, that the individuals executing this Lease on behalf of such party are duly authorized and designated to do so, and that no other signatories are required to bind such party. 17.5 Consents. Whenever consent or approval of either party is required hereunder, that party will not unreasonably withhold or delay such consent or approval, except as may be expressly set forth to the contrary. 17.6 Entire Agreement. The terms of this Lease are intended by the parties as a final expression of their agreement with respect to the terms as are included herein and may not be contradicted by evidence of any prior or contemporaneous agreement 17.7 Severability. Any provision of this Lease which proves to be invalid, void, or illegal in no way affects, impairs, or invalidates any other provisions hereof, and such other provisions will remain in full force and effect. 17.8 Impartial Construction. The language in all parts of this Lease will be in all cases construed as a whole according to its fair meaning and not strictly for or against either Lessor or Lessee. 17.9 Notices. All notices, demands, and communications between Lessor and Lessee will be in writing and given by personal delivery, facsimile transmission, electronic mail, registered mail (return receipt requested with postage prepaid), Federal Express, or other reliable private express delivery, addressed to Lessor or Lessee at the addresses shown in Section 1.3 above. Either party may, by notice to the other given pursuant to this Section 17.9, specify additional or different addresses for notice purposes. Item 14 Packet Page 191 -11- 12767-0008\2247544v1.doc 17.10 Counterparts. This Lease may be executed in one or more counterparts, each of which will constitute an original. 17.11 Lessee Approval. Whenever this Lease calls for approval by Lessee of an action implementing the provisions of this Lease, the City Manager, or his or her designee, will have authority to grant such approval, without necessity of further authorization or approval of the City Council. 17.12 Lessor Approval. Whenever this Lease calls for approval by Lessor of an action implementing the provisions of this Lease, the ______________________ of the University, or his or her designee, will have authority to grant such approval, without necessity of further authorization or approval of the Board of Trustees of the University. [Remainder of this page left intentionally blank] Item 14 Packet Page 192 -12- 12767-0008\2247544v1.doc IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date first above written. LESSOR: BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY, On Behalf Of California Polytechnic State University, San Luis Obispo By: Date: APPROVED AS TO FORM: By: Date: LESSEE: CITY OF SAN LUIS OBISPO, a California municipal corporation By: Date: ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: By: J. Christine Dietrick Date: City Attorney Item 14 Packet Page 193 Exhibit A Page 1 of 1 12767-0008\2247544v1.doc EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Item 14 Packet Page 194 Exhibit B Page 1 of 1 12767-0008\2247544v1.doc EXHIBIT B MAP DEPICTING PROPERTY Item 14 Packet Page 195 Item 14 Packet Page 196