AVILA BEACH COMMUNITY SERVICES DISTRICT Post Office Box 309, Avila Beach, CA.93424 Meeting Room and Telephone (805) 595-2664 FAX (805)595-7623 e-mail: avilacsd@gmail.com REGULAR BOARD MEETING 1PM' Tuesday, November 12th, 2024 TELECONFERENCE AND/OR: ELECTRONICALLY.  Office- - 100 San Luis Street, Avilal Beach  STAFF. AND PUBLIC MAYI PARTICIPATE! IN THIS MEETING IN PERSON ATTHE ADDRESS ABOVE OR,VIA ZOOM MEETING: htps:/us02web.zom.s411787571 Meeting ID: 4111787571  Password: No Password Required. BY PHONE: 1-669-900-9128  In accordance with Government Code Section 54953(b), this agenda will be posted at the above teleconference  location and this location will be accessible to the public.  1. 2.  CALL TO ORDER: 1:00P.M. ROLL CALL: Board Members:  Petel Kelley, President Ara Najarian, Vice President Kristin Berry, Director Howie Kennett, Director John Janowicz, Director  3.  PUBLIC COMMENT  Members ofthej public wishing to comment or bring forward any items concerning District operations which do not appear on today's agenda may address the Board now. Please state youri name and address before addressing the Board and limit presentations to: 31 minutes. State law does not allow Board action on items  not appearing on1 the agenda.  4.  INFORMATION AND DISCUSSION ITEMS  County Reports  1. SLO County SheriffDepartment 2. CalFire/County Fire Department  Reports on Attended Conferences, Meetings, and General Communications ofDistrict Interest  5.  CONSENT ITEMS:  These items are approved with one motion. Directors may briefly discuss anyi item, or may pull any  item, which is then added to thel business agenda. A. Minutes of October 8th, 2024, Regular Board Meeting    B.  Monthly Financial Review for October 2024 C. General Manager and District Engineer Report D. Water and Wastewater Operations Reports for October 2024  6. 7. 8.  DISCUSSION OF PULLED CONSENT ITEMS PUBLIC COMMENT ON CLOSED SESSION ITEM  At this time, items pulled for discussion from the Consent Agenda, ifa any, will be heard.  CLOSED SESSION  A. CONFERENCE WITH LEGAL COUNSEL- ANTICIPATED LITIGATION: - Significant exposure to litigation pursuant to Government Code Section 54956.9(d)(2). Number of cases: One. REPORT ON CLOSED SESSION/ANNOUNCEMENT OF ACTION,I IFANY, TAKENI IN CLOSED  9. 10.  SESSION  BUSINESS ITEMS: Items where Board action is called for.  A. Discuss and Consider the New Solid Waste Rate Adjustment Methodology Report prepared by R3; the (Action Required: Consider approval oft the above documents and set the Prop 218 Hearing Date for B. Discuss and Consider an Engineering Services Proposal from Wallace Group for Preparing al Recycled Water Strategy and a Draft and Final Title 22 Recycled Water Engineering Report for Submission to the (Action Required: Consider approval oft the Wallace Group Engineering Services Proposal orl Provide  Prop 218 Hearing Notice, and Set thel Prop 218 Rate Hearing for. January 14, 2025.  January 14, 2025, or Provide Other Direction to Staff)  State Water Resources Control Board. Other Direction to Staff)  .E Election ofC Officers and Board Committee Appointments for 2025  (Action Required: Elect Board Officers and Committee Appointments for calendar year 2025)  11. COMMUNICATIONS CORRESFONDENCE  At this time, any Director, or Staff, may ask questions for clarification, make any announcements, or report briefly on any  activities or suggest items for future agendas.  12. ADJOURN  The next. Regular Board meeting is scheduled for Tuesday, January 14th, 2025, at 1:00 P.M. Any writing or document pertaining to an open sessioni item on this agenda whichi is distributed toa ai majority of the Board after thej posting of this agenda will be available for public inspection at the time the subject writing or document is distributed. The writing or document willl be available for public review in thel District Administration Office, 100 Sanl Luis Street, Avilal Beach, CA during normal business hours. Consistent with the Americans withl Disabilities Act and California Government Code Section 54954.21 requests for disability relatedi modification ora accommodation, including auxiliary aids ors services may be made by aj person witha a disability who requires thei modification or accommodation in order toj participate  att the: abovei referenced public meeting by contacting the District at 805-595-2664.    MINUTES OF BOARD OF DIRECTORS MEETING Avila Beach Community Services District Tuesday, October 8th, 2024 1:00 P.M.  1.  CALL TO ORDER  President Kelley called the meeting oft the Board of] Directors of the Avila Beach Community Services District, to order at 1:05 P.M. on the above date, in the Avila Beach Community Services District  Building, 100 San Luis Street, Avila Beach, California.  2.  ROLL CALL Board Members Present  Pete Kelley Howie Kennett John Janowicz Kristin Berry Ara Najarian None  Board Members Absent: StaffPresent: Operations: Legal Counsel: 3. 4.  Brad Hagemann, General Manager & District Engineer Kristi Dibbern, Office Manager Shawn Powell, Chief Plant Operator Craig Parton from Price, Postal, & Parma via Zoom  PUBLIC COMMENTS  INFORMATION AND DISCUSSION ITEMS  President Kelley noted that a "Town Hall" meeting will be hosted by Dawn Ortiz-Legg at 6 P.M. on October 15th, 2024 at the Civic Association. Please register ifyouj plan on attending.  A. County Reports  Sheriff's Report: Sheriff MacDonald reported 88 calls for service last month. Sixteen preventive patrol stops, 6 disturbances, and one suspicious circumstance were investigated. One vandalism took place in Pirate's Cove. One grand theft was reported, a cell phone was reported stolen. The Sheriff reported nine that enforcement stops were conducted in Avila this month. Cal Fire: ChiefLee was called away on a fire at the time oft the meeting. Nol Report.  5. NO COMMENTS. 6.  PUBLIC COMMENT ON CLOSED SESSION. ITEM  CLOSED SESSION  The Board convened to closed session at 1:30 PM to discuss the following items:    A. CONFERENCE WITHLEGAL COUNSEL-ANTICIPATEDLITIGATION  Significant exposure to litigation pursuant to Government Code Section 54956.9(d)(2). 8.F REPORT ON CLOSED SESSION/ANNOUNCEMENT OF ACTION, IF ANY, TAKEN IN  Number of cases: One.  CLOSED SESSION  The Board returned to regular session at 2:07 PM. No reportable action was taken by the Board of Directors.  7.CONSENT ITEMS  Director Janowicz made a motion to approve the Consent Items. It was seconded by Director Berry  and passed with ai roll call vote: 5-0.  AYES:  John Janowicz Kristin Berry Howie Kennett Ara Najarian Pete Kelley None  NOES: ABSENT: None  9.  DISCUSSION OF PULLED CONSENTI ITEMS: None  10. BUSINESS ITEMS:  A. Will Serve for 502 First Street APN 076-213-077  The owner oft thej property, Victor Montgomery,joined the meeting at 2:10 pm via Zoom. The applicant is requesting to remove the existing 3-bdrm SFR and replace it with a two-story mixed-use project that includes 928 SF ofcommercial space: 448 SF ADU and a 2052 SF 2-bdrm SFR. Staffestimates water may increase 20-25% over the 3-5 units for the existing 3-bedroom SFR. Director Janowicz made ai motion to grant a Preliminary Will Servet to 502 First Street, it was seconded by Director Berry and passed with ar roll  call vote 5-0. AYES:  John Janowicz Kristin Berry Howie Kennett Ara Najarian Pete Kelley None None  NOES: ABSENT:    B. Provide a Recommendation to the County Board of Supervisors for filling two, four-year positions on the District's Governing Board. Directors Kennett and Berry have indicated that they are willing to: fill the positions. Director Najarian made ai motion to recommend Directors! Howie Kennett and Kristin Berryt to thel Board of Supervisors to: fill ai four-year term. It was seconded' by Director. Janowicz  and passed with ai roll call vote 5-0.  AYES:  Ara Najarian John Janowicz Kristin Berry Howie Kennett Petel Kelley None  NOES: ABSENT: None  ADJOURNMENT: The meeting was adjourned at approximately 2:30 PM.  NEXT MEETING November 12th, 2024, at 1:00PM.  These minutes are not official nor a permanent part of the records until approved by the Board of  Directors at their next meeting. Respectfully submitted, Brad Hagemann, PE General Manager        AVILA BEACH  COMMUNITY SERVICES DISTRICT Post Office Box 309, Avila Beach, CA 93424  MEMORANDUM  TO: FROM: DATE:  Board of Directors  Brad Hagemann, General Manager November 12th, 2024  SUBJECT: Monthly Financial Review for October  Recommendation: Receive and filei report. Overall Monthly Summary expenses (cash basis).  During the month of October, the District deposited $124,868.53 and incurred $179,348.30 in Water and sewer revenue for the month of October was $89,656.67. County taxes were Detailed financial reports including the October 31, 2024, Balance Sheet, the October 1 to October 31st monthly Profit and Loss report, and the monthly Checks by Fund report are  deposited in the amount of $6,352.02.  provided as an attachment to this report.  Utility Service Billing  The District billed approximately $98,926.07 in water and sewer service charges in October. Customer Rate Assistance reduced billing charges to the District in the amount of $860.93 for  the month of October.    1:17 PM 11/07/24 Accrual Basis  Avila Beach Community Services District Profit & Loss by Month October 2024  TOTAL  Ordinary Income/Expense Income  4000 - Income Summary 4010 - Operating Revenue 4012 - Solid Waste Franchise Fee 4030 - County Taxes 4050 - Harbor Charges 4052 Front Street Lighting 4053 - WWTP 0&M Total 4050 - Harbor Charges 4100 . Misc Income 4600 - Interest Income Total 4000 - Income Summary  89,656.67 1,828.60 6,352.02 329.00 31,032.00 31,361.00 78.64 50,071.37 179,348.30 179,348.30 179,348.30  Total Income Gross Profit Expense 5100 - Merchant Credit Card Fees 5110- Amex 5120 . Chase Paymentech 5140- - Invoice Cloud Total 5100 Merchant Credit Card Fees 5200 Payroll Expenses 5210 - Gross Wages 5211 - Regular Pay 5212 Holiday Pay 5213 - Overtime Pay 5214 - Sick Pay 5216 - Vacation Pay Total 5210 - Gross Wages 5230 * Payroll Taxes 5240 - Health & Medical Exp. 5242 - Health Ins /Other Total 5240 - Health & Medical Exp.  41.62 170.40 599.62 811.64 15,860.05 0.00 374.40 93.60 249.60 16,577.65 236.97 7,047.57 7,047.57  Page 1    1:17 PM 11/07/24 Accrual Basis  Avila Beach Community Services District Profit & Loss by Month October 2024  TOTAL 884.98 399.78 19.31 1,304.07 117.28 25,283.54 2,764.13 6,926.00 6,755.50 460.00 7,215.50 113.13 312.75 425.88 860.93 20.00 222.95 249.00 18,684.39 2,139.57 2,085.00 10,720.00 11,040.00 121.77 77.06 6,025.00 6,102.06  5250 - PERS Company Pd Expense 5255 PERS Co Pd Shawn 5256 - PERS Co Pd Kristi  5250 - PERS Company Pd Expense - Other Total 5250 - PERS Company Pd Expense 5280 . Payroll Administration & Misc. Total 5200 - Payroll Expenses 6000 Administrative Overheads 6102  Accounting 6120 - Dues & Subscriptions 6135 Legal 6137 Lopez Lake ESA Litigation 6135 - Legal - Other Total 6135 - Legal  6140 - Office Supplies & Postage 6142 - Postage & Shipping 6143 - Supplies, Office Total 6140 - Office Supplies & Postage 6150 - Rate Assistance 6160 - Training 6167 - Uniforms 6170 - Website  Total 6000 - Administrative Overheads 6500 - Operating Expenses 6503 - Chemicals 6504  Admin Contract Services 6506 - Contract Labor GM 6507 - Contract Labor Civil Engineer 6518 - Equipment Expense 6520 - Equipment Repair & Maint. 6522 Equip. Rep. & Maint-Avila & HD 6524 Eqip. Rep. & Maint. Avila Only Total 6520 - Equipment Repair & Maint.  Page 2    1:17 PM 11/07/24 Accrual Basis  Avila Beach Community Services District Profit & Loss by Month October 2024  TOTAL 396.83 3,150.00 2,869.46 2,291.00 330.00 290.73 272.30 135.00 286.39 224.96 9,621.68 52,076.75 3,748.50 9,210.10 109,814.92 69,533.38  6528 - Gas & Oil 6530 - Generator Maintenance 6535 - Insurance P/L 6540 - Lab Tests 6542 - Maintenance 6550 - Operating Supplies 6565 - Regulatory Compliance 6567 - Repairs, Building 6575 * Small Tools 6585.1 Telephone/Internet: 6590 - Utilities Total 6500 - Operating Expenses 6900 - Yard improvements 6999 - Ask My Accountant Total Expense Net Ordinary Income Other income/Expense Other Income 7200 - Non-Operating Income 7220 * CIP Harbor Total 7200 * Non-Operating Income Total Other Income Other Expense  80,952.00 80,952.00 80,952.00  8200 - Non-Operating Expenses 8230 Capital Purchases in Prog Sani 8237 - WW-7 Misc. Wastewater Projects 8245 . WWTP Improvement Project 8245e WWTP Construction Total 8245 - WWTP improvement Project Total 8230 - Capital Purchases in Prog Sani Total 8200 - Non-Operating Expenses  15,155.11 17,901.62 17,901.62 33,056.73 33,056.73 33,056.73 47,895.27 117,428.65  Total Other Expense Net Other Income Net Income  Page 3        8    e 6 9 8 4    3:50 PM 11/05/24 Accrual Basis  Avila Beach Community Services District  Balance Sheet As of October 31, 2024  Oct31,24  ASSETS Current Assets Checking/Savings 1000 - Cash Summary 1005- Customer Cash 1008 - Petty Cash 1010 - Pacific Premier Checking 1015 Five Star Bank Checking 1017 - Five Star Bank MM 1050 - LAIF Total 1000 - Cash Summary Total Checking/Savings Accounts Receivable 1200 *Accounts Receivable Total Accounts Receivable Other Current Assets 1250 Receivables 1255. Interest Receivable 1270 Taxes Receivable 1280 Water & Sewer Billings 1282 Other 2 El Dorado Billings 1281 : Other 1 EI Dorado Billings 1280 - Water & Sewer Billings - Other Total 1280 Water & Sewer Billings Total 1250 - Receivables 1400 Prepaid Summary 1410 Prepaid Insurance Total 1400 - Prepaid Summary Total Other Current Assets Total Current Assets Fixed Assets 1670 Vehicles - Admin 1671 - 2023 Ford F150 Cost 1672 2023 Ford F150 Acc Depr 1670 - Vehicles - Admin - Other Total 1670 Vehicles Admin  333.30 65.72 145,822.65 718,565.44 210,281.73 4,202,736.28 5,277,805.12 5,277,805.12 234,422.64 234,422.64 7,280.62 57,104.14 -19,861.05 -4,154.42 120,169.08 96,153.61 160,538.37 -347.64 -347.64 160,190.73 5,672,418.49 53,960.62 -10,792.12 286.40 43,454.90  Page 1    3:50 PM 11/05/24 Accrual Basis  Avila Beach Community Services District  Balance Sheet As of October 31, 2024  Oct31,24  1600 Fixed Assets & Acc. Depr. 1605. Office Equipment 1606 Copier Samsung 2012 1609 Office Equipment Accum Depr Total 1605. Office Equipment 1610 . Fixed Asset -Office & Admin. 1612 Office Furniture cost 1614 Office Furniture Accum Dep. Total 1610  Fixed Asset -Office & Admin. 1620 - Fixed Assets - Sanitary 1622 . Land 1626 Collection Assets 1627 - Collection Assets Cost 1628 - Collect. Assets Accum Depr Total 1626 - Collection Assets 1630 - Disposal Equipment 1631 Disposal Equip Cost 1632 Disposal Equip Accum Depr Total 1630 - Disposal Equipment 1634 Other Equipment 1634a - Other Equipment Cost Total 1634 Other Equipment 1635 - Treatment Plant 1636 Treatment Plant Original 1637 - Treatment Plant Addition 1638 - Treatment Plant Accum Dep Total 1635 Treatment Plant 1642 Treatment Equipment 1643 Treatment Equip Cost 1644 . Treatment Equip Accum Depr 1642 - Treatment Equipment - Other Total 1642 Treatment Equipment Total 1620 - Fixed Assets - Sanitary  8,233.58 -16,373.00 -8,139.42 4,526.21 -4,526.21  0.00  60,334.10 1,517,267.58 -593,752.02 923,515.56 611,174.66 -376,478.88 234,695.78 6,973.40 6,973.40 105,000.00 2,049,098.30 1,519,694.40 634,403.90 1,087,410.54 -787,343.49 205,485.61 505,552.66 2,365,475.40  Page 2    3:50 PM 11/05/24 Accrual Basis  Avila Beach Community Services District  Balance Sheet As of October 31, 2024  Oct31,24 21,136.28 21,136.28  1650 Fixed Assets - Water 1652. Equipment 1653 Equipment Cost 1654. Equipment Accum Depr Total 1652 Equipment 1656 - Distribuation Assets 1657 Distribuation Assets Cost 1658 Dist Assets Accum Depr Total 1656 Distribuation Assets Total 1650 - Fixed Assets - Water 1680 . Structures - Fixed Asset 1681 - Structures GFAAG - Sani & FA 1682 - Gen/Fire Accum Dep Total 1680 - Structures - Fixed Asset 1690 - Construction in Progress Total 1600 . Fixed Assets & Acc. Depr.  0.00  1,270,572.25 -755,498.34 515,073.91 515,073.91 164,414.58 -109,252.42 55,162.16 2,220,035.96 5,147,608.01 5,191,062.91 28,724.00 28,724.00 10,892,205.40  Total Fixed Assets Other Assets Total Other Assets TOTAL ASSETS LIABILITIES & EQUITY Liabilities Current Liabilities Credit Cards  1800 Deferred Outflows of Resources  2140 - Five Star MC Control x0557 2141 FS MC BH x8624 2142-1 FS MCSP x6340 2143. - FS MCK KD x3018  59,827.52 26,112.44 702.20 -83,402.48 3,239.68 3,239.68  2140 - Five Star MC Control x0557 - Other Total 2140 - Five Star MC Control x0557  Total Credit Cards  Page 3    3:50 PM 11/05/24 Accrual Basis  Avila Beach Community Services District  Balance Sheet As of October 31, 2024  Oct31,24  Other Current Liabilities 2200 Payroll Liabilities 2240 Health Insurance 2241 - Employee Total 2240 - Health Insurance 2250 - PERS Liability 2255 Accrued Interest FB Auditor 2260 Vacation Payable 2262 - Sick Pay Accrued Total 2200 - Payroll Liabilities 2300 - Deposits Held 2303 - Water Deposits Held Total 2300 : Deposits Held Total Other Current Liabilities Total Current Liabilities Long Term Liabilities 2400 - Net Pension Liability 2450 U.S. Bank Loan WWTP 2500 Deferred Inflows of Resources 2999 - Unbalanced Classes Total Long Term Liabilities Total Liabilities Equity  8,400.00 8,400.00 1,348.46 71,347.50 5,441.96 12,335.12 98,873.04 7,640.00 7,640.00 106,513.04 109,752.72 92,927.00 2,402,549.03 86,221.00 3,637,745.91 1,056,048.88 -946,296.16 -17,611.15 11,707,591.71 148,521.00 11,838,501.56 10,892,205.40  3000 Opening Bal Equity 3900 - Retained Earnings Net Income Total Equity  TOTAL LIABILITIES & EQUITY  Page 4        AVILA BEACH  COMMUNITY SERVICES DISTRICT Post Office Box 309, Avila Beach, CA. 93424  MEMORANDUM  TO: FROM: DATE:  Board of Directors  Brad Hagemann, General Manager November 12, 2024  SUBJECT: General Manager Report  Zone 3Technical Advisory Committee (TAC) and Advisory Committee  The Zone 3 Technical Advisory Committee last met on Wednesday, October 9, 2024. The agenda packet for the October 9, TAC meeting agenda packet is provided as an attachment to this report. As of this writing (November 5, 2024), the Lopez reservoir is at 90% of capacity with 44,725 AF in storage. The weather pundits and forecasters are anticipating a "La Nina" cycle this year which normally (but not always) results in lower that average annual rainfall. With the previous two years of above average annual rainfall our local and state water supplies are in good shape for at least the next several years. Update on County wide water planning activities - Staff is continuing to participate a two county- wide water planning groups. They include the Countywide Water Action Team and the Desalination Executable Solution and Logistics (DESAL) Plan. The County is ini the process ofs selecting a consultant team to prepare the DESAL Development Plan. Excerpts from the County's Request for Proposals including the Scope of Services is provided as an attachment to this report. Funding for approximately 50% of the County study is being provided by the federal government under the Title XVI Grant Program. This phase of the DESAL plan is scheduled to be completed in 2028. Staff will provide  updates to the Board as the study progresses.  State Water shutdown and switch from chloramines to free chlorine disinfection  On November 4, 2024, the County Public Works Department sent out a Notice that they would be temporarily converting the Lopez Project water disinfection system from chloramines to free chlorine from November 13, through December 2, 2024. The County switches to free chlorine annually to help maintain the water distribution system. While some water customers may not notice any change, others might detect a taste or odor similar to that of a swimming pool. The County Notice is provided as an  attachment to this staffreport.  ABCSD Water Tank Cleaning and Inspection  Staff has scheduled Advanced Technical Services to conduct the inspection and cleaning oft the District water tanks during the second week in December. The District has used ATS, a local small business, over the years to conduct this specialized work. The water tanks were last cleaned and inspected in 2017. ATS will generate a report of their findings and repair recommendations as part of their scope of  services.    CONTROLA AL  ZONE 31 Lopez Project  San Luis Obispo County Flood Control andWater Conservation District ZONE 3 TECHNICAL ADVISORY COMMITTEE  Agenda Wednesday October 9, 2024 9:00-1 11:00 am Meeting ID:261220685070 Passcode: pjuWGG Orcall in (audio only) 8129484202097 United States, Salinas Phone Conference ID: 420020900#  Join on your computer, mobile app or room device  1. Announcements  All David  2. General Operations and' Water Report Summary Notes - September Monthly Operations Report - September Lopez Storage Projections - September  3. Current Reservoir Conditions 4. Project Updates 5.AG-AG Gauge Fish Ladder 6.S State Water Shutdown 7. PFAS Testing 8. Future Agenda items Attachments:  David David David David David All  A. Meeting Minutes - September B. Lopez Monthly Operations Report - September C. Lopez Storage Projections Chart- = September D. Project Updates  Next Meeting Date: November 13, 2024    ZONE 3  TECHNICAL ADVISORY COMMITTEE WEDNESDAY September 11, 2024 (9:00-11:00. AM)  Via Microsoft Teams SUMMARY NOTES  Attendees vial Microsoft Teams: Gabriel Munoz-Morris, Greg Ray and. Jim Garing, City of Grover Beach (GB), Tony Marraccino, Oceano CSD (OCSD), John Wallace (Agriculture Rep), Shane Taylor, City of Arroyo Grande (AG), Michael Steele, Northem Cities Management. Area (NCMA), Brandon Shea, City of Pismo Beach (PB), Brad Hagemann, Avila Beach CSD (ABCSD), Daniel Heimel & Nate Page, Confluence Engineering Solutions (CES), David Spiegel, Jeromy Caldera, Kyle. James, Laura Holder, Desiree Bravo & Darla Budge, District, Public Works (PW)  1. Announcements  Daniel Heimel - Representing City of Pismo Beach in water resource management discussions at Zone 3, SWP, and NCMA meetings on an interim basis in the absence of the PW Director. Also introduced associate Nate Page David Spiegel (PW), August Meeting Summary Notes (Attachment A) - Meeting was cancelled; informational packet was provided David Spiegel (PW) reviews the August Monthly Operations Report  2. General Operations and' Water Report  (Attachment B) Tracking normal.  Shane Taylor (AG) asks, looking at the lab results from the turnouts and at the Edna turnout we are getting some horrible plate count numbers. I talked to Faith, and they said they were going to replace that sample port, and I was wondering ift that had been done? David Spiegel (PW) responds Ij just spoke to. Jeromy at the Lopez WTP, and wel have not added that sample station yet. They were coming over to engineering to discuss how we were going to tapi the Main to put a new sample port in.  Ithas not been completed yet.  David Spiegel (PW) reviews the Lopez Storage Projections August (Attachment Lopez Storage Projection chart: we will start checking monthly for the projected rainfall. The long-range projection only projects a year for rainfall. Jim Garing (GB) asks, Is the projection at the very end saying no rain in the graph or is it accommodating the rainfall in the bottom of the graph? David Spiegel (PW) answers, it does include the rainfall at the bottom of Greg Ray asks, regarding the HCP challenge have you begun preparing another graph? David Spiegel (PW) responds, we have not, but we could try to take in to account the pulse flow information that they might want us to do. It might be a good idea to include the pulse flows. Greg Ray asks, What about the additional continuous flow. David Spiegel (PW) we are trying to stay within the safe yield of the reservoir. I have made it very clear that in some ofi the operations that they proposed we wouldn't be  C)  the graph.    doing that. Not sure how much time should be put into this boundary. Iwill talk to Desiree and bring her up to speed, sO that way if we need to David Spiegel (PW) The HCP litigation you must contact county council. There is a hearing on the 18+h in Federal Court. Brad Hagemann states the documents that have been filed are public information.  provide another graph we can.  3. Current Reservoir Conditions  Kyle James (PW) reports the following data: WTP 4.76 MGD SWP 0.7MGD Downstream releases 4.25 MGD. Current elevation 519.88 and 47,023. AF 95% Capacity  4. Capital Projects Update (Attachment D) Lopez Terminal Breach Repair Rob Reynolds Construction is currently repairing the location Budget $120,000 (FEMA) Firei fiow' Tank Replacement (No Change) - On Hold Final Design Plans are complete. -$500k in Zone 3 Funds Budget $1,400,000  Membrane Module Replacement (No Change)  Wait for additional budget for 2 more racks and then this will be complete.  Budget -$600,000  Spillway Assessment and investigation (No Change)  GEI with a couple of consultants did the ground penetrating radar on the spillway Piezometer Installed on the lake side of the Dam, these were all approved work Next steps we will bei taking some cores ini the Shute walls, scheduled in the next  slabs  efforts by DSOD for our investigation into the spillway Remainder of project - minimum of $300,000.  two weeks  Geotechnical Testing & Seismic Alternatives Study of Terminal Reservoir Dam Submitting to DSOD for review. Factor of safety at the reservoir was at the ragged limit of what DSOD allows. We are waiting to see what they say or if  (No Change)  additional analysis is needed. Geotechnical Engineering Report Complete. Cathodic Protection Repair Project    Construction complete. Budget -$449,933  Break in continuity investigation ongoing System working well, additional testing DAF Building Repairs (No change) Need additional Quote -95,000  DAF building has rust damage in multiple girders and roll up doors. Rafters supports safety tether for maintenance of DAF equipment.  Completed Projects  Sludge Bed Curtain Wall Rehab Chemical Tank Replacement Spillway Flip bucket Repair (FEMA) Bathymetric Study CO2 Injection System 5. AG-AG Gauge Fish Ladder  Zone 3 AC did approve a grant to fund this project. The AC did request additional outreach int the future when there is money requested. They would like reminders sO that the AC members can talk to their TAC members before any future money Steph Wald of Creeklands gave an update, preconstruction meeting scheduled for They have already done their phase 1. All vegetation has been cleared. They have done their frog monitoring and did their fish relocation this last Monday and Tuesday. They started dewatering and removing fish. Stillwater Science is doing the The sitei is closed to visitors if anybody wants to go down there, they are requesting a 24/48-hour notice. Ifyou are interested, David Spiegel will get you in contact with The date for any new gauging equipment is still "TBD" pending how construction Brad Hagemann (ABCSD) Is this a positive for the lawsuit? David Spiegel (PW) responds Yes, the AGIAG gauge has been listed as a barrier in the creek which is one of 9 listed in the complaint. This is one oft the barriers getting removed. Iti is a positive thing for us and the project. Jim Garing (GB) asks, is your office providing inspection services out there? David Spiegel (PW) responds we are not; we are solely a grant administrator. We have asked for construction updates once construction begins. CCWA will shut down the pipeline October 26 - November 10th  requests. the 9/18/2024.  relocations.  Steph Wald to get you access.  goes.  6. State Water Shutdown    We will be turned off for an extended amount of time. We currently have stored State Water that we willl be able to deliver during the shutdown. We will perform chlorine burns ont the pipeline during this time  Shane Taylor (AG) asks, are you going to go to free chlorine during that period for flushing? David Spiegel (PW) responds, for the burn yes. Shane Taylor (AG) Solcan schedule our flushing during November? David Spiegel responds yes and Jeromy Caldera's email states that the Aqueous Ammonia will shut down on November 13th and convert the CWR to free chlorine. During the burn we advise. Zone 3 agencies to  reschedule their THM/HAAF samples.  7. HCP Litigation 8. Future Agenda items  Please refer to Lopez Storage Projections for discussion on HCP Litigation.  Update on HCP status Lopez Projection chart update AG Gauge Project status  Next Meeting Wednesday: October 9, 2024    44444  3835355  466455  644  668666  AAE  8855 eo 4445 9  55564    Szoz/t/zT SZOZ/T/IT SZOZ/T/OT Szoz/T/6 Szoz/T/8 SZOZ/T/L SzoZ/T/9 Szoz/T/S Szoz/T/t SZOZ/T/E Szoz/t/z SzoZ/T/T 4zoz/T/zT VZOZ/T/IT vZo2/T/OT 4ZOZ/T/6 4ZOZ/T/8 UZOZ/T/L tzoz/T/9 VzOZ/T/S vzoz/T/v VZOZ/T/E VzoZ/T/Z vzoz/t/T  EZOZ/T/ZT EZOZ/T/TT EZOZ/T/OT EZOZ/T/6 EZOZ/T/8 EZOZ/T/L EZOZ/T/9 EZOZ/T/S EZOZ/T/V EZOZ/T/E EZOZ/T/Z EZOZ/T/T ZzOZ/T/ZT - Zzoz/T/T ZzoZ/T/OT 2zoz/T/6 zzoz/T/8 2ZOZ/T/L 2ZoZ/T/9  (v) aBeJoas    TONTROL AND  ZONE 3Lopez Project  San Luis Obispo County Flood Control and Water Conservation District  TO: FROM: DATE:  Zone 3 Technical Advisory Committee David Spiegel, PE, Utilities Engineer  October 9, 2024  SUBJECT: Zone 3 Projects Update  Project Updates:  Lopez Terminal Breach Repair - Complete Budget-$120,000 (FEMA) Fireflow Tank Replacement (No Change) - On Hold Final Design Plans are complete -$500k in Zone 3 Funds Budget -$1,400,000  Rob Reynolds Construction is currently repairing the location  Membrane Module Replacement (No Change)  2 racks more racks have been replaced and are operational  Budget -$600,000 Spillway Assessment and Investigation Installing P2 Data Logger  Remainder of project - minimum of $300,000  Geotechnical Testing & Seismic Alternatives Study of Terminal Reservoir Dam  (No Change)  Submitted to DSOD for Review Geotechnical Engineering Report Complete Budget -$500,000 Cathodic Protection Repair Project (No Change) Construction complete Break in continuity investigation ongoing System working well Budget -$449,933 DAF Building Repairs (No Change)  DAF building has rust damage in multiple girders and roll up doors Rafters support safety tether for maintenance of DAF equipment  -$95,000    CONTROL  ZONE 3Lopez Project  San Luis Obispo County Flood Control andl Water Conservation District  Completed Projects  Perimeter Channel Repair Sludge Bed Curtain Wall Rehab Chemical Tank Replacement Spillway Flipbucket Repair (FEMA) Bathymetric Study CO2 Injection System    COUNTY OF SAN LUIS OBISPO CENTRAL SERVICES DEPARTMENT Christopher Lopez Director  COUNTY SSANLUIS OBISPO  REQUEST FOR PROPOSAL #1851  DESALINATION EXECUTABLE SOLUTION. AND LOGISTICS (DESAL) PLAN  August 16, 2024  The County of San Luis Obispo (County) is currently soliciting proposals for professional services Each proposal shall specify each and every item as set forth in the attached specifications. Any and all exceptions must be clearly stated in the proposal. Failure to set forth any item in the specifications without taking exception may be grounds for rejection. The County reserves the right to reject any and all proposals and to waive any irregularity or informality in any proposal or int the RFP process, as long as, in the judgment of the County, such action will not negate fair competition and will permit proper comparative evaluation of the proposals submitted.  for a Desalination Executable Solution and Logistics (DESAL) Plan.  This RFP is posted on the County's Purchasing website at:  htp/www.slocountycaso/Deparments/Centralsenvtesenvices/senvicesBi: Any changes, additions, or deletions to this RFP will be in the form of written addenda issued by the County. Any addenda will be posted on the website. Prospective proposers must check the website for addenda or other relevant new information during the response period. The County isnotr responsible for the failure of any prospective proposertor receives suchaddenda. All addenda If your firm is interested and qualified, please submit two (2) separate Adobe Acrobat Portable Data Format (.pdf) files, one (1)technical proposal and one (1)cost proposal, through the County's Purchasing website at the address listed above, by 3:00 p.m. on September 16, 2024. Ifyou have any questions about the proposal process, please contact the Buyer directly.  EP-opportunitesaspX  sO issued shall become a part of this RFP.  MISSYVILES myleseco.sio.ca.us  Buyer II- Central Services Purchasing    County of San Luis Obispo  RFP#1851  August 16, 2024  Page 2  DESALINATION XECUTABLESOLUTION AND LOGISTICS (DESAL) PLAN  Table of Contents  I.  INTRODUCTION. A. PURPOSE.. B. BACKGROUND II. SCHEDULE AND SUBMITTAL A. RFP SCHEDULE B. QUESTIONS. C. PROPOSAL SUBMITTAL, D. PRE-PROPOSAL CONFERENCE III. GENERAL INSTRUCTIONS. A. COUNTY RIGHTS & OPTIONS. B. FEDERAL REQUIREMENTS C. PREVAILING WAGE. D. CHANGES TO THE RFP. E. COMMUNICATIONS. F. INSURANCE. G. EXCEPTIONS & DEVIATIONS. H. AWARD AND STANDARD AGREEMENT IV. PROPOSAL FORMAT..  3 3  10 11 12 12 13 13 13 15 .16 ..18 .20 21 23 26 27 28  V. PROPOSAL SELECTION & CONTRACT AWARD  A. SELECTION PROCEDURES B. SELECTION CRITERIA. C. FINAL SELECTION. D. CONTRACT AWARD AND EXECUTION. E. PROTEST OF AWARD. VI. DEFINITIONS  APPENDIX. A-S SCOPE OF SERVICES. APPENDIX B - SAMPLE CONTRACT.  APPENDIX C- CERTIFICATION REGARDING LOBBYING FOR CONTRACTS, GRANTS,  LOANS, AND COOPERATIVE AGREEMENTS APPENDIX D - RISK ASSESSMENT QUESTIONNAIRE APPENDIXE- COUNTY TRAVEL POLICY APPENDIXG-PROPOSER CHECKLIST  APPENDIXF- DESIGNATION OF SUBCONTRACTORS FORM.    County of San Luis Obispo  RFP # 1851  August 16, 2024  Page3  DESALINATION EXECUTABLESOLUTION AND LOGISTICS (DESAL) PLAN  .  NTRODUCTION  A. PURPOSE  The purpose of this Request for Proposal (RFP) is to solicit offers from qualified firms to establish a consultant contract for desalination project planning. The consultant contract is planned tol be an on-call, task-order based contract. A detailed scope of worki is provided in  Appendix A. B. BACKGROUND  Desalination is a drought proof solution for current and projected water supply imbalances caused by strained alternative supplies, increased demand and could be scalable such that Desalination projects take time to plan, permit, and construct. Factors that contribute to the feasibility of a desalination project include, but are not limited to, permitting, funding, community support, and environmental protection. As depicted in the graphic below, the District has coordinated with the Countywide Water Action Team (CWAT), an informal working group of staff from entities across the county with water supply planning responsibilities, to create a 5-phase approach and potential timeline to develop a desalination project. The District has completed Phase 1: DESAL Plan Agreement Phase, getting Board direction to proceed on path to desal, obtain resolutions from agencies agreeing to be evaluated in the DESAL Plan, developing/vetings this scope of work, establishing a preliminary stakeholder and public engagement process, and: seeking/pursuing grant opportunities. This RFP marks the start of Phase 2: DESAL Plan Development, which is anticipated toi include a preliminary studyandas subsequent detailed study. DESAL Plan development involves engaging consultant(s) to work with the District, participating agencies, the public, and various stakeholders (e.g., permitting agencies) to identify the most optimal desalination project and  its capacity could be expanded as future needs increase.  next steps for making ita a reality.  Phase1: DESAL Plan Agrmt. Phase  Phase 3: Project Developm enti Agrmt. Phase  Phases: Project Governance. Agrmt &Construction 2040 2041  2022 2023 2024 2025 2026 2027 2028 2029 2030 2031  2045  Phase 2: DESAL Plan Development  Phase4: Project Deveiopment  Draft Desalination Project Approach & Timeline    County of San Luis Obispo  RFP #: 1851  August 16, 2024  Page 4  DESALINATION EXECUTABLE SOLUTION AND LOGISTICS (DESAL) PLAN  Il.  SCHEDULE AND SUBMITTAL  A. RFP SCHEDULE  The following represents the tentative schedule for this RFP. Any change in the scheduled dates for the Pre-Proposal Conference, Deadline for Final Questions, Proposal Submission Deadline, and/or Interviews will be advertised ini the form of an addendum to this RFP. The  schedule for other milestones dates may be adjusted without notice.  RFP Schedule Issued  Date August 16, 2024 August 29, 2024 September 9, 2024 September 16, 2024 October 15, 2024 October 28, 29,30, 2024 November 6, 2024 November 15, 2024 December 17, 2024  Pre-Proposal Conference Deadline for Final Questions Proposal Submission Date Evaluation of Proposals Interviews (ifr needed) Contract Negotiations Intent to Award Issued Notice to Proceed  Award by Board of Supervisors December 10, 2024  B. QUESTIONS  All questions (requests for interpretations or corrections) pertaining to the content of this RFP must be made in writing through the County's Purchasing website by 3:00 p.m. on September 9, 2024. Requests submitted after said date may not be considered. The County will make every effort to respond to questions within five (5) business days. Questions and responses willl be posted (anonymously) on the Purchasing website and can be viewed by accessing the RFP. The County reserves the right to determine the appropriateness of comments/questions that will be posted on the website.  C.F PROPOSAL SUBMITTAL  Ify your firm is interested and qualified, please submit two (2) separate Adobe Acrobat Portable Data Format (.pdf) files, one (1) technical proposal and one (1) cost proposal, through the County's Purchasingwebsite at the address listed on the title pageb by3 3:00 p.m.  on September 16, 2024.  D.F PRE-PROPOSAL CONFERENCE  A virtual pre-proposal conference will be held on August 29, 2024 at 2:00 pm via Zoom or similar platform. Interested consultants must RSVP for this meeting to Joey Steil via email    County of San Luis Obispo  RFP#1851  August 16, 2024  Page 18  DESALINATION EXECUTABLE SOLUTION AND LOGISTICS (DESAL) PLAN  APPENDIX, A- SCOPE OF SERVICES  Project Goals (Project Description) accordance with findings at each milestone:  The DESAL Plan has the following goals, which are anticipated to evolve as the project proceeds in 1. Establish a stakeholder engagement process that provides for a range of inputs and  viewpoints  2. Identify, vet and analyze concept alternatives 3. Rank and select optimal desalination project 4. Develop scope for Project Development Phases  Preliminary Scope of Work  The following reflects the District's initial understanding oft the tasks needed to accomplish the project goals. Each task may result in a refinement of the next tasks, therefore, it is anticipated that the qualified consultant and the District will refine the approach as needed during contract negotiations, and that notices to proceed will be issued prior to each task. The project must be responsive to the commitments and deadlines in any relevant grant agreement and the negotiated contract for this work  will include relevant grant agreement terms. Task 1- Project Management  This task involves coordination with District staff and other administrative efforts associated with the  project.  Task 2 - Stakeholder Engagement  Thist taski involves developingandir impementingadetaled stakeholder engagement plan. Thisincludes, but is not limited to, periodic meetings with District staff, the CWAT working group, DESAL Plan participants and/or Regulatory. Agencies engaged to provide input tot the project at key milestones. This task also includes presentations on project progress at key milestones during consultations with the executive team and regulators, and during public meetings of the District's Water Resources Advisory Committee, Board of Supervisors, agencies' Boards/Councis. and otherappropriate organizations (local advisory bodies, environmental agencies, permitting agencies, unions, interest groups, etc.).  Task3-P Preliminary Planning and Feasibility Study Task 3.a-1 Identify concept alternatives  This task involves identifying and engaging the stakeholders who may participate in development of a desalination project, including those who may directly or indirectly benefit, those who may be impacted, and those with a role in reviewing, permitting, approving and/or funding a project in order to develop and describe concept alternatives. Alternatives include,  but are not limited to:  Direct delivery to near-coastal communities only  Direct delivery to near-coastal communities withi inland investors (e.g. Nacimiento, State Water Coastal Branch, Lopez participants; G5As/groundwater users) in order to free up  existing supplies currently going to near-coastal communities  Onshore and offshore facility options Co-located facility and new site options    County of San Luis Obispo  RFP#: 1851  August 16, 2024  Page 19  DESALINATION EXECUTABLE SOLUTION AND LOGISTICS (DESAL) PLAN  Thist taski includes reviewing studies, reports and collecting information and datai to understand available technologies, alternatives, opportunities, and constraints. Descriptions of concept alternatives will include, but not be limited to, needs to be met, alternatives considered, locations, partnerships, institutional and financial arrangements, energy access, technology options and mitigation considerations. This task will include a rough screening analysis to identify which options are most feasible to be carried forward for more detailed evaluation. Thist taski includes coordination with the District, DESAL Plan participants, and others as needed (e.g., executive team, regulatory agencies, etc.) to establish criteria that will be used to analyze, vet and rank the concept alternatives that made it through rough screening. Criteria will be based on feasibility and technical, environmental, economic, and institutional requirements, as well as public acceptance, reliability, multi-benefit and grant potential, etc. The criteria and method will be developed to meet USBR Feasibility Study requirements to qualify for funding  Task 3.b - Develop vetting and ranking criteria and method  beyond DESAL Plan.  Task 3.c-1 Vetting, ranking and selection of preferred project(s)  This taski includes coordination with the District, DESAL Plan participants, and others as needed (e.g., executive team, regulatory agencies, etc.) to vet the concept alternatives against the criteria in accordance with the method developed. Because projects will likely involve partnerships, it is anticipated that this process will be iterative in nature and negotiations may result in modifications to the initial method for selecting preferred project(s).  Task 3.d- Preliminary Feasibility Study  This taski includes preparing al Feasibility Study that documents the DESAL Planv work conducted under Tasks 1-3 and is aligned with Feasibility Study requirements of Reclamation Manual Directives and Standards CMP 09-02 nttps/www.sbr.gvrecmancmpcmp/cmpusuzpdr, This task also includes completing Reclamation's Feasibility Study Review Checkist/crosswak Both the Feasibility Study and Feasibility Study Review Checklist shall be completed and submitted  to USBR.  Task 4-1 Develop scope forsubsequent desalination planning steps  This task includes developing the scope, schedule and budget for completing and implementing the DESAL Plan. Tasks likely include those described in optional Task 5 (below), establishing a desalination pilot program, engineering design, environmental impact studies and permitting, etc.  Task! 5-1 Detailed Planning and Feasibility Study (OPTIONAL)  This task involves carrying out the scope developed in Task 41 to complete the DESAL Plan. While Tasks 1-4 include efforts to identify, analyze, score and rank project concepts to establish a' "short-list" oft the most preferred project(s), this Task 5 includes the detailed analysis of the short-listed projects and  feasibility study required to select/recommend the optimal desalination project.    COUNTY SSANLUIS OBISPO  COUNTY OF SAN LUIS OBISPO DEPARTMENT OF PUBLIC WORKS  FOR IMMEDIATE RELEASE  Date: Contact:  November 4, 2024  Jeromy Caldera, Chief Plant Operator, (805)473-7177 Faith Zenker, Water Quality Lab Manager, (805)781-5111  Conversion of Drinking Water Disinfectant to Free Chlorine for the  Five-Cities Area  FIVE-CITIES - The San Luis Obispo Department of Public Works will be changing the disinfectant in the Lopez Project distribution system from November 13 through December 2, 2024. During this period, the disinfectant will be switched to free chlorine. This change will impact the water supply for the cities of Arroyo Grande, Pismo Beach, Grover Beach, Oceano, Avila Beach, and Port San Luis, as these areas may also be The County uses a blended chlorine treatment for disinfection; however, free chlorine isa a more effective disinfectant. Switching to free chlorine each year helps maintain water mains free of potentially harmful bacteria, aligning with best management practices int the Individualsmay" have varying sensitivitytot thet taste or smell of chlorine in water. While: some maynotr notice any change, others might detect at taste or odor similar to that ofaswimming pool. To reduce or remove free chlorine, you can boil the water, use a carbon filter, or let Chlorination is the most widely used method for disinfecting drinking water. For most consumers, no special precautions are necessary, as the water meets Federal and State drinking water standards. Ifyou have any questions or concerns abouty your drinking water,  converted to free chlorine.  water industry.  the water sit uncovered overnight to allow the chlorine to dissipate.  feel free to contact your local water provider.  ###  County of San Luis Obispo Department of Public Works  County Govt Center, Room 206 I San Luis Obispo, CA 93408 I( (P)805-781-5252 I (P)805-781-1229  pwd@co.slo.ca.us I slocounty.ca.gov        AVILA BEACH  COMMUNITY SERVICES DISTRICT  ESTABLISHED FEB.1997  SUBJECT: October 2024 Operations and Maintenance Report  Compliance  There were no compliance issues for the month of October.  The monthly Self-Monitoring Report and associated data tables and graphs for October were: not ready at the time of the Board packet publication. The report and data tables/graphs will be  available at the Board meeting. Wastewater Treatment Plant  Staff performed the quarterly inspections of critical electrical components at the WWTP. Everything appears tol bei in good working order. With contractor assistance, staffinstalled. ai new valve ini thej piping that connects the original plant andi the MBR unit. Installation ofthe valve will During the annual influent lift station inspection, staffdetected a failed seal on the influent pump #2 motor. The failed seal did not incapacitate the operation of the pump, but it is something that should be repaired as soon as feasible. In October, the pump was preemptively pulled, and its backup was puti into service. The pump was taken tol Perry's for diagnosis andi rebuild,ifpossible. Semi-annual effluent samples were collectedi in October. Staffcontinues to work with Cloacinaon  provide staff with more operational flexibility.  final punch list items for the MBR Warranty. Wastewater Collection System  The quarterly inspection was performed at the lift station, which found everything to be in good  working order. Water System  Staff continues to monitor the chloramine residual in the water tank to minimize nitrification. Quarterly Disinfection By-Product sampleswerecollected: in Octoberandi results willl be submitted  to the State Water Resources Control Board staff.        AVILA BEACH  COMMUNITY SERVICES DISTRICT Post Office Box 309, Avila Beach, CA. 93424  MEMORANDUM  TO: FROM: DATE:  Board of] Directors  Brad Hagemann, General Manager November 12, 2024  SUBJECT: Discuss and Consider Approval the South County Sanitary Services Solid Waste  Rate Adjustment Methodology and Proposed 2025 Rate Report; Approve thel Draft Prop 218 Hearing Notice; and Direct Staff to Initiate a Proposition 218 Process,  Setting the Hearing Date for. January 14, 2025  Recommendation:  Approve final draft ofthe South County Sanitary Service rate study report and direct stafftoi initiate al Proposition 218 process and setting the public hearing date for. January 14, 2025.  Background  South County Sanitary Services (SCSS) provides solid waste collection, recycling, and green waste: services within the. Avila Beach Community Services District ("District") service area under al Franchise. Agreement ("Agreement"). SCSS iss seeking a rate adjustment to coveri increased costs associated with cost-of-living adjustment for collection operations, increased costs associated with Annual adjustments to SCSS' solid wastei rates havel historicallybeen: reviewed in accordance with the "City of San Luis Obispo Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates" which was originally established in 1994 (1994 Rate Manual). The 1994 Rate Manual allows for a cost-based rate adjustment every three years and interim rate adjustments in the other two years. In interim rate periods, SCSS is limited to adjustments based on inflation, tipping fee adjustments, and franchise or regulatory fee changes. During cost-based rate adjustment years, SCSS can request adjustments due to changes in other operational costs as SCSS and other agencies in San Luis Obispo County have, for several years, intended to update the annal rate adjustment: methodology. The City of San Luis Obispo has been working with Waste Connections, SCSS's parent company, to develop and implement a new rate adjustment methodology to replace the 30-year-old Rate Manual. Thel key objectives for a newi rate adjustment methodology are to enhance rate stability, predictability, fairness, transparency, ease of administration, and cost-eftectiveness. The City ofSan Luis Obispo contracted with R3 Consulting Group, Inc. (R3) to support development and negotiation ofa new rate adjustment methodology. The new: rate adjustment methodology is available for consideration by other public agencies in San Luis Obispo County. The District has been following the development of the new rate  the organics digester facility and landfilling.  set forth ini the 1994 Rate Manual.    adjustment methodology, which willl bej presented to the Board as an amendment to the Agreement with SCSS in association with the January 14, 2025 public hearing regarding the 2025 rate The City of San Luis Obispo also contracted with R3 to conduct a detailed review of the 2025 cost-based rate applications submitted by Waste Connections to ten agencies in San Luis Obispo County, including the District. The District received an initial rate adjustment: request from SCSS for an adjustment to the District's solid waste rates of3.97% effective. January 1,2025. After R3's review, adjustments necessary for effectuation of the new rate methodology and new regional  adjustment.  service enhancements, the recommended 2025 rate adjustment is 4.60%.  Discussion:  Cost-Based Rate Adjustment  R3 completed a thorough review of SCSS' 2025 cost-based rate adjustment application and adjustments necessary for the new recommended rate adjustment methodology. After careful review of the rate adjustment request, and the outcomes of negotiations ofai new rate adjustment methodology between the City of San Luis Obispo and Waste Connections, R3 completed ai report evaluating the 2025 rate adjustment request and the new rate methodology (Attachment A). R3's review suggests that the original 3.97% adjustment effective January 1, 2025, is justifiable in accordance with the 1994 Rate Manual and may be accepted by the District in the event that the R3's report further recommends the new rate adjustment: methodology and the corresponding rate adjustment of 4.60%, which will provide key benefits to the District ini terms ofr rate predictability and stability and new enhanced services. The tablel below shows the current andj proposed monthly residential solid waste and recycling rates given the recommended 4.60% adjustment. Note that SCSS will pro-rate thei rate adjustment given that Board authorization ofrate adjustment would be  District does not adopt the new: rate: adjustment methodology.  after. January 1, 2025.  Table 1. Proposed Single Family Residential Monthly Rates  Current Charges $28.31 $46.78 $65.24  2024 Monthly Rates Proposed 2025 $29.61 $48.93 $68.24  Container Size 32 Gallons 64 Gallons 96 Gallons  Increase $1.30 $2.15 $3.00  New Rate. Adjustment Methodology  The City of San Luis Obispo, in its capacity as the lead agency on the solid waste rate adjustment methodology update process, and inj partnership with Los Osos Community Services District and Waste Connections, completed negotiations and arrived at tentative agreement with Waste Connections regarding the terms and conditions of a new rate adjustment methodology. The outcome was the result of extensive good faith negotiations between the City of San Luis Obispo and Waste Connections, with due consideration to input provided by other public agency  stakeholders, including Avila Beach Community Services District.    Pending Board approval, the newi rate adjustment methodology will replace the 19941 Ratel Manual and will regulate annual rate adjustments for the District's solid waste: rates starting in 2026. The new methodology fulfills key objectives including rate stability, predictability, fairness, transparency, ease ofadministration, and cost-effectiveness. Additionally, the new methodology can be applied on a regional scale and is available as recommended alternative to the 1994 Rate Manual for all agencies, including the District. The key features oft the new methodology include:  Capped CPI Adjustments: Starting in 2026, rate adjustments will be based on the Garbage and Trash CPI, with a floor of 2% and a cap of 5%. Amounts under 2% or over 5% will carry forward. The CPI adjustment will apply to Waste Connections' Revenue Balancing Mechanism: Starting in 2027, adjustments to rates will account for shortfalls or surpluses in' Waste Connections' actual revenues compared toj projected revenues from prior years. For example, ifWaste Connections' 2025 revenues exceed projections, the amount of surplus revenues will be credited to the rates in 2027 (and vice versa), achieving fairness in compensation and rates for the company and for ratepayers. Such adjustments would take place annually and willl bei independent ofthe CPI cap and floor noted above. It should be noted that SCSS's2023 net income was such that, were a revenue balancing mechanism inj place at the time, surplus revenues would have been carried forward to the 2025 rate year and would have offset the Less Frequent Cost-Based Adjustments: Currently, solid waste rates are adjusted based on the 1994 Rate Manual every three years on Waste Connections' costs. Via the newi methodology, cost-based adjustments would occur ai maximum ofevery fiveyears, and only ifrequested by Waste Connections or the District. The first opportunity fora a cost-based adjustment will be for the 2030 rate year. Ifneither Waste Connections nor the District request a cost-based adjustment, then the CPI adjustment approach will be applied. Cost-based adjustments will be based on Waste Connections' consolidated audited financial statements for the region. Timeframes for cost-based adjustment application and review process will be ample, such that the District will have sufficient time for review and approval processes and such that the potential for delay in Updated Depreciation Lifespan for Trucks: The 1994 Rate Manual set a 7-year depreciation schedule for solid waste collection trucks. Modern solid waste collection trucks! havea 10-year lifespan, and the depreciation schedule was adjusted accordingly. Updated Profit Allowance: The 2025 rate adjustment will include a 9% profit allowance of projected collection costs and in 2026 and thereafter the profit allowance will be 10%. The updated profit allowance is in-keeping with industry standards for solid waste services. For context, the 2025 profit allowance is approximately 5% of revenues and R3 estimates that the 2026 profit allowance will be approximately 5.5% Removed Limitation on Corporate Overhead: The 1994 Rate Manual placed a limitation on corporate overhead costs. Today, corporateoverhead costs fund legal, tax, payroll, human resources, engineering, compliance, IT, training and recruiting  collection and post-collection cost centers.  forthcoming rate adjustment.  implementation is minimized.  ofrevenues.    programs. The prior limitation is recommended for removal in order to fund these services. Compensation to Waste Connections for corporate overhead will be capped via the CPI adjustment through 2029 and may be cost-adjusted in 2030 and subject to Extraordinary Adjustments: The California Air Resources Board (CARB). Advanced Clean Fleets (ACF) regulation is requiring all solid waste collection trucks to be zero emissions in 2042. This includes aj phased in plan to get the percentage oft the fleet to be zero emission vehicle (ZEV) with 10% by 2030, 25% by 2033, 50% by 2036,75% by 2039 and 100% by 2042. During CPIA Adjustment years, Waste Connections may request extraordinary rate adjustments due to changes in law affecting collection operations, including for compliance with CARBS's ACF electrification mandate (which may necessitate change to depreciation schedules). The District may, but is not obligated to, consider requests for extraordinary rate adjustments due to changes in law affective post-collection operations. Requests for extraordinary change are subject to good faith meet and confer negotiations between the District and Waste Connections. Customer. Assistance Program: 20%1 low-income discount provided to residential customers using 32-gallon cart service, using existing jurisdictional practices on low-income relief for their offered utility type services with evidence ofqualifying Free Bulky Waste Collections: Collection of a bulky waste item twice annually from residential accounts at no cost via bi-annual voucher program. Annual Cart Exchange: Once annual exchange of a residential solid waste,  justification and potential adjustment orl limitation at that time.  Regional Service Enhancements:  financial hardship.  recycling, or organics cart per customer account.  Per R3's report, thel key factors affecting the 2025: rate adjustment are summarized as follows:  A doubling of] post-collection costs for organics processing since 2022 due to updated costs for processing infrastructure to: meet the requirements of Senate Bill (SB) 1383. Market rate adjustment of post-collection costs for landfill disposal, which have remained flat since 2016. Landfill disposal costs have been below market at $41 per ton since 2016 and will increase to a fair market cost of$70 per ton in 2025. Cost-of-living changes in collection costs, which include labor, capital, operating expenses, insurance, and overhead costs, for 2025 increases over 2024 amounting to Additional costs for regional service enhancements, described above, which add 0.19%  approximately 4.21%. to the 2025 rate adjustment.    Taken altogether, and including appropriate adjustments to SCSS' original request to achieve the objectives ofthe new: rate methodology, the 2025 rate adjustment effective. January 1,i is 4.60% as  shown in the table below:  Original Adjustment per 1994 Rate Manual Revised Depreciation Schedule Remove Limitation on Corporate Overhead Regional Service Enhancements Updated Profit Allowance Recalculated Franchise Fee  3.97% -1.33% 1.51% 0.19% 0.20% 0.06% 4.60%  Revised Adjustment for New Methodology  Staffrecommends setting the date for a Public Hearing on January 14, 2025. Rates for solid waste collections are addressed in thel District's Ordinance. Thel Public Hearing would bel held concurrent with your Regular Board Meeting wherein staff would tally all protest votes received and determine whether a majority protest exists. If there is not a majority protest, the Board may authorize the new rates effective January 1, 2025 (SCSS will prorate customer bills back to that  date).  Recommendation  Staffrecommends the Board approve the ratei review: report, direct staff toi initiate the Proposition  218 process, and set January 14, 2025 as the Public Hearing date.  ATTACHMENT  A. R3 Consulting Group, Inc. Rate Report B. Draft ABCSD Proposition 218 Notice    Notice of Public Hearing Regarding Proposed Solid Waste Rate Adjustments  Property Owners and Tenants - Customers:  This notice is intended to inform you that the Avila Beach Community Services CSD (the "CSD") will hold a special meeting regarding rate adjustments (the "Proposed Rate Adjustments") proposed by South County Sanitary Service (the "Garbage Company") for properties and customers receiving solid waste, recycling, and green waste services within the CSD. The Proposed Rate Adjustments will be considered by the CSD at the date, time, and location specified below. Consistent with the requirements of Proposition 218, this notice also  provides you with the following information:  The Date, Time, and Place oft thel Public Hearing; The Reason for the Proposed Rate Adjustments; The Effective date of the Proposed Rate Adjustment; The Basis for the Proposed Rate Adjustments; and The Majority Protest Procedures.  NOTICE OF PUBLIC HEARING  The Public Hearing for the Proposed Rate Adjustments within the CSD limits will be held on: Place: Avila Beach CSD Boardroom located at 100 San Luis Street, Avila Beach, CA  Date: January 14, 2025  Time: 1:00PM  At the Public Hearing, the Avila Beach CSD will consider all public comment in support of and in opposition to the Proposed Rate Adjustments and whether or not a Majority Protest exists pursuant to the California Constitution (as described below). If approved, the Proposed 2025 Rate Adjustment would become effective on January 1, 2025 and annual adjustments would be effective each January: 1 of2 2026, 2027, 2028 and 2029.  Reason Forand Basis of the Proposed Rate Adjustments  The Proposed Rate Adjustment for 2025 is based on the Garbage Company's documented cost of providing solid waste services and is a 4.60% increase above current solid waste rates. This cost-based adjustment is necessary for the Garbage Company to continue to provide safe, environmentally sound and reliable solid waste removal, transportation and disposal services to the residents and businesses of the CSD. The  adjustments are requested due to:  Increases in organics processing costs - Third-party costs for the organic waste post-collection processing facility operated by the company formerly named Hitachi Zosen INOVA, and which are not within the Garbage Company's control, have doubled since 2022. The change in cost is Increases in landfill disposal costs - Related party costs for landfill waste disposal at Cold Canyon have remained flat since 2016. The 2025 rate adjustment reflects a market adjustment to these costs, from a per ton tipping fee of $41 per ton (in place since 2016) to a per ton tipping fee of $70. The Garbage Company provided market comparison demonstrating the  the result of changes in facility capital and operating costs.  applicability of the $70 per ton market tipping fee.    Collection costs including labor, vehicles, operating expenses and overhead - These costs are Adjustments necessary for moving to a new methodology for annual rate adjustments that provides for increased rate stability, predictability, fairness, transparency, ease of administration, and cost-effectiveness. These include updated depreciation lifespans for solid waste collection vehicles, removal of a limitation on corporate overhead costs for legal, tax, payroll, human resources, engineering, compliance, IT, training and recruiting programs, and Adjustments for new service enhancements, including the ability for residents to exchange a solid waste collection cart once annually at no additional cost, no charge collection for one bulky item twice annually via clean-up weeks, and a rate assistance program providing a 20% low-income discount provided to residential customers using 32-gallon cart service (using existingjurisdictional practices on low-income relief for their offered utility type services).  increasing approximately 4.21% in 2025.  updated profit allowance in-keeping with industry standards.  The Proposed Rate Adjustments for 2025 applicable to residential solid waste customers are shown in the  table below.  Garbage Container Size 32-gallon 64-gallon 96-gallon  Changei in Monthly Rate $1.30 $2.15 $3.00  2024 $28.31 $46.78 $65.24  2025 $29.61 $48.93 $68.24  Ina addition, commencing each. January 1of2026, 2027, 2028 and 2029 solid waste rates will be adjusted based  on the following:  Annual change in the Bureau of Labor Statistics' Consumer Price Index (CPI) for Garbage and Trash Collection in the U.S all city average, with a minimum 2% adjustment and a maximum 5% adjustment. Amounts below the minimum or above the maximum will carry forward to the Calculation of a 10% profit allowance starting in 2026 (estimated at additional 0.67% to 0.69% Addition of a revenue balancing mechanism starting in 2027, wherein actual revenues from solid waste rates over or under projections carry forward as additions to, or offsets against, the Rate adjustments for. January 1, 2026, 2027, 2028 and 2029 are not expected to exceed 7%.  following year. adjustment in 2026). annual CPI adjustment.  The Proposed Rate Adjustments have been independently reviewed for consistency with the City of San Luis Obispo Rate Setting Process and Methodology Manual for Integrated Solid Waste Management dated June 1994 and in accordance with the provisions of the CSD's Franchise Agreement with the Garbage Company, as amended, governing solid waste service within the boundaries of the CSD. The Proposed Rate Adjustments contemplate implementation of a new methodology for annual rate adjustments which is described in New Solid Waste Rate Adjustment Methodology and 2025 Rates report authored by independent reviewer, R3 Consulting Group, Inc. The consultant's report and the complete set of proposed 2025 solid waste rates is  available at the Avila Beach CSD Boardroom located at 100 San Luis St. Avila Beach, CA.    How DolProtest the Proposed Rate Adjustments?  Pursuant to Section 6 of Article XIII D of the California Constitution, the following persons may submit a written protest against the Proposed Rate Adjustments to the Clerk of the Board before the close of the Public  Hearing referenced above.  An owner(s) of property (parcel(s)) receiving solid waste, recycling, and green waste services within the CSD limits. If the person(s) signing the protest, as an owner, is not shown on the last equalized assessment roll as the owner of the parcel(s) then the protest must contain or be accompanied by written evidence that such person signing the protest is the owner of the parcel(s) receiving Atenant(s) whose name appears on the Garbage Company's records as the customer of record for the corresponding parcel receiving solid waste, recycling, and green waste services within the CSD  services; or  limits tenant-customer).  Avalid written protest must contain a statement that you protest the Proposed Rate Adjustments, the address or Assessor's Parcel Number (APN) of the parcel or parcels which receive solid waste, recycling, and green waste services, and a signature by either the owner or the tenant-customer of the parcel or parcels. One written protest per parcel shall be counted in calculating a majority protest to the Proposed Rate Adjustments subject to the requirements of Section 6 of Article XIII D of the California Constitution. Written protests will not be accepted by e-mail or by facsimile. Verbal protests will not be counted in determining the existence of a majority protest. To be counted, a protest must be received in writing by the Clerk of the Board before the  close of the Public Hearing referenced above.  Written protests regarding the solid waste rate adjustments may be mailed to:  Avila Beach CSD Attn: Clerk of the Board P.O. Box 309 Avila Beach, CA 93424  Written protests may also be personally delivered to the Clerk of the Board at Avila Beach CSD Boardroom Ifvalid written protests are presented by a majority of owners and/or tenants-customers of parcels receiving solid waste, recycling, and green waste services within the CSD limits, then the CSD will not adjust the rates for  located at 100 San Luis St. Avila Beach, CA.  the services.    SOUTH COUNTY SANITARY SERVICES, INC. EFFECTIVE JANUARY 1, 2025 AVILA BEACHC CSD  Monthly Proposed Monthly  Rate 1/1/2024  Rate Effective 1/1/2025  Service Description  Pickups Per Week Effective  Rate Increase  RESIDENTIAL SINGLE FAMILY DWELLING AND MULTI-UNIT (4 UNITS OR LESS):  32 Gallon Waste Wheeler 64 Gallon Waste Wheeler 96 Gallon Waste Wheeler  1 1 1  $28.31 $46.78 $65.24  1.30 2.15 3.00  $29.61 $48.93 $68.24  Residential customers must use the waste wheelers provided by the garbage company. This solid service fee for residential trash collections (container with black or gray lid) includes once a week pick-up of one greenwastelorganics container (green lid), and one recycling container (blue lid). Rates are the same as commercial dumpsters and waste wheeler rates (below).  MULTI-FAMILY (5 or MORE)  COMMERCIAL DUMPSTERS  ALL AREAS:  1y yd dumpster 1y yd dumpster 1yd dumpster 1yd dumpster 1 yd dumpster 1y yd dumpster 1yd dumpster 1.5y yd dumpster 1.5y yd dumpster 1.5 yd dumpster 1.5y yd dumpster 1.5y yd dumpster 1.5y yd dumpster 1.5 yd dumpster 2yd dumpster 2yd dumpster 2yd dumpster  1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3  $137.55 $197.90 $261.49 $321.84 $388.84 $452.57 $603.36 $164.26 $251.27 $338.65 $472.63 $576.54 $687.19 $908.51 $177.68 $291.58 $415.52  6.33 9.10 12.03 14.80 17.89 20.82 27.75 7.56 11.56 15.58 21.74 26.52 31.61 41.79 8.17 13.41 19.11  $143.88 $207.00 $273.52 $336.64 $406.73 $473.39 $631.11 $171.82 $262.83 $354.23 $494.37 $603.06 $718.80 $950.30 $185.85 $304.99 $434.63    SOUTH COUNTY SANITARY SERVICES, INC. EFFECTIVE. JANUARY 1, 2025 AVILA BEACH CSD  Monthly Proposed Monthly  Rate 1/1/2024 $606.81 $744.34 $888.34 $1,216.77 $211.14 $395.45 $553.09 $985.40 $1,169.88 $1,367.58 $1,883.79 $304.97 $459.36 $660.32 $1,035.86 $1,283.75 $1,458.20 $2,265.99  Rate Effective 1/1/2025 $634.72 $778.58 $929.20 $220.85 $413.64 $578.53  Service Description 2 yd dumpster 2 yd dumpster 2yd dumpster 2yd dumpster 3yd dumpster 3 yd dumpster 3yd dumpster 3yd dumpster 3 yd dumpster 3 yd dumpster 3 yd dumpster 4yd dumpster 4 yd dumpster 4 yd dumpster 4 yd dumpster 4 yd dumpster 4 yd dumpster 4 yd dumpster  Pickups Per Week Effective  Rate Increase 27.91 34.24 40.86 55.97 $1,272.74 9.71 18.19 25.44 45.33 $1,030.73 53.81 $1,223.69 62.91 $1,430.49 86.65 $1,970.44 14.03 21.13 30.37 47.65 $1,083.51 59.05 $1,342.80 67.08 $1,525.28 104.24 $2,370.23  4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7  $319.00 $480.49 $690.69  The rates shown above include the monthly container rental fee and a semi-annual dumpster cleaning.  COMMERCIAL- OTHER CHARGES:  Rates for all commercial customers include recycling or greenwastelorganics pickup once per week, included with the garbage service rate. Customers can choose from a 64 or 96 gallon blue commingled recycle waste wheeler or a 32 or 64 gallon organics waste wheeler included with the garbage service rate (96 gallon waste wheelers can only be used with green waste due to weight). Ify you need al bin for recycling there is a charge (see below). Ify you need more frequent recycling, including organicsgreenwaste service, it can be provided at a 50% discount from the garbage service rates for the specified level of service required.  COMMERCIAL GARBAGE CANS - ALL AREAS:  32 Gallon Waste' Wheeler 32 Gallon Waste Wheeler  1 2  $39.66 $56.10  1.82 2.58  $41.48 $58.68    SOUTH COUNTY SANITARY SERVICES, INC. EFFECTIVE JANUARY 1, 2025 AVILA BEACH CSD  Monthly Proposed Monthly Rate 1/1/2024 Increase $66.38 $106.29 $82.60 $118.81 $7.56 $8.74 $3.80 $18.88 $8.74 $4.37 $28.17 $18.89 $45.41 $45.41 $54.16 $44.31 $62.49 $15.95 $43.99 $54.16 $94.57 $93.10 $10.52  Rate Effective 1/1/2025 $69.43 $111.18 $86.40 $124.28 $7.91 $9.14 $3.97 $19.75 $9.14 $4.57 $29.47 $19.76 $47.50 $47.50 $56.65 $46.35 $65.36 $16.68 $46.01 $56.65 $98.92 $97.38 $11.00  Service Description 64 Gallon Waste Wheeler 64 Gallon Waste Wheeler 96 Gallon Waste Wheeler 96 Gallon Waste Wheeler  Pickups Per Week Effective  Rate  1 2 1 2 each each each per month per month per month each time each time each time each time each time each each per yard per yard each time per month per hour per month  3.05 4.89 3.80 5.47 0.35 0.40 0.17 0.87 0.40 0.20 1.30 0.87 2.09 2.09 2.49 2.04 2.87 0.73 2.02 2.49 4.35 4.28 0.48  MISCELLANEOUS CHARGES - ALL CUSTOMERS: Overstacked Garbage & extral bags Minimum/unit Overstacked Greenwaste & extra bags Overstacked Blue Bin & extra bags Minimum/unit Iny yard service (per can or commodity) IN ADDITION TO STANDARD GARBAGE RATES Monthly charge for additional 96-gallon green waste Monthly charge for additional 32, 64 or 96-gallon  Minimum/unit  service recycle service Waste wheeler cleaning Trip charge  Non-payment downsize service Non-payment redeliver waste wheeler Non-payment reconnect service Small item pickup (TV, toilet) Appliance pickup-residential  Garbage extras on your scheduled pickup day Garbage extras -NOT ON YOUR SCHEDULED Re-deliver bin on stopped acct Sunday Service (in additional to garbage service level) Stand by time Lock Charges  PICKUP DAY    SOUTH COUNTY SANITARY SERVICES, INC. EFFECTIVE JANUARY 1, 2025 AVILA BEACH CSD  Monthly Rate 1/1/2024 $16.44 $84.51  Monthly Rate Effective 1/1/2025 $17.20 $88.40  Proposed Rate Increase 0.76 3.89  Service Description  Pickups Per Week Effective  Clean Up Week Extral bin cleaning  per item Replacementrepair at market price By quote only  Damage/Destruction of bins or waste wheelers Larger than residential appliance or glass, glass  doors, or plate glass Short Term Dumpsters: Delivery & Pickup-Bin Delivery & Pickup-Waste Wheeler  $54.16 $18.89 $4.01 $43.99 $7.56 $3.11 $8.77 $24.59 $24.59 $24.59 $24.59  2.49 0.87 0.18 2.02 0.35 0.14 0.40 1.13 1.13 1.13 1.13  $56.65 $19.76 $4.19 $46.01 $7.91 $3.25 $9.17 $25.72 $25.72 $25.72 $25.72  Rental Empties Empties (Garbage) Empties (Recycle) Empties (Green Waste) Mattress: Twin Double Queen King  Per Day Per Yard Per 32 Gal Per 32 Gal Per 32 Gal Each Each Each Each  ADDITIONAL INFORMATION ALL CUSTOMERS: Styrofoam packing peanuts before placing in trash container.  1. Customers requesting Temporary Bins or Roll-off Box Service can call the office for current rates 2. Polystyrene (Styrofoam, Plastic #6)i is not collected for recycling and should be thrown away as trash. Pleasel bag 3. Itise encouraged tol bag your trashi int the garbage container but do not bag your recyclables or green wastei int their 4. Recycling, Greenwaste/Organcs and Garbage containers should spaced 31 feet apart away from any obstacles (i.e 5. Thei fees schedule above only includes the Garbage Company rates and does noti include IWMA fees, which are. separately 7. Late Fees are imposed for residential customers over 30 days delinquent. The feei is 1.5% per month oft the outstanding charge, with a minimum fee of $5.00. No prior notice is required, as this late fee policy is stated at the bottom of every bill. 8. Customers can be charged for contamination fees ini thet trash, recycling and/or the greenwaste/organics containers.  respective containers and! keepi it loose.  mailboxes, cars, etc) before 6:00am on collection service day. 6. Cleaning fees willl be billed on a time andi materials basis  noted oni thel billings.  Any additional recycling services are charged out at 50% of the garbage rate.    REPORT  City of San Luis Obispo and Participating Agencies  New Solid Waste Rate Adjustment  Methodology and 2025 Rates  Submitted electronically: November 1, 2024  CONSULTING GROUP, INC. RESOURCES-RESPECT-RESPONSIBITY  R3    2 a CONSULTING GROUP, INC.  RESOURCES-RESPECT-RESPONSIBILITY  November 1, 2024 Ms. Meg Buckingham Solid' Waste and Recycling Coordinator Public Utilities 879 Morro, San Luis Obispo, CA 93401 submitted via email: mbuckin@slocty.org  SUBJECT: New Solid' Waste Rate Adjustment Methodology and 2025 Rates  Dear Ms. Buckingham and Participating Agencies,  R3 Consulting Group, Inc. (R3) was engaged byt the City of San Luis Obispo (City) to provide solid waste consulting services viai two engagements supporting the City's negotiations ofa a new: solid waste services agreement with Waste Connections, the solid waste hauler. R3 was originally engaged by the City to work in collaboration with Los Osos Community Services District and' Waste Connections to update the methodology for annual adjustments to the solid waste rates charged by Waste Connections. The key objectives for updating the rate adjustment methodology were to enhance rate stability, predictability, fairness, transparency, ease of administration, and cost- Ast that engagement proceeded, eight other agencies in San Luis Obispo County (the City of Arroyo Grande, the City of Grover Beach, the City of Pismo Beach, Avilal Beach Community Services District, Cambria Community Services District, Cayucos Sanitary District, Nipomo Community Services District, and Oceano Community Services District-a altogether "Participating Agencies" or "Agencies") were included as stakeholder participants int the development of new rate adjustment methodology. With thei inclusion of these additional Agencies, objectives for the engagement were updated to include regional scale applicability of the new rate adjustment methodology. R3 was then engaged by the City to review Waste Connections' rate adjustment requests for the 2025 rate year on behalf of all ten Agencies with the objective of determining 2025 solid waste rates that would an appropriate starting point for a newr rate adjustment methodology starting in 2026. The City of San Luis Obispo served as the lead contracting agency for both engagements, providing primary oversight and direction of R3's work. Input and feedback were also sought from the other nine Agencies, and the results reflect their stakeholder input. Ultimately, the outcomes of both engagements are the conclusion of good faith contract negotiations between the City and' Waste Connections. In summary, the City and' Waste Connections have tentatively agreed to updated terms and conditions for annual rate adjustment which fulfill key objectives while also securing enhanced services that willp protect lowi income households, prevent illegal dumping, and clean solid waste collection containers. The new rate adjustment methodology and enhanced services also The Cityi intends to recommend a new: agreement with' Waste Connections to the City Council that will include the new rate adjustment methodology and enhanced serviçes along with the 2025 adjustments to solid waste rates. In keeping with the objective for the results tol be applicable on a regional scale, Waste Connections is willing to offer the new rate adjustment methodology and 1512 Eureka Road, Suite 220, Roseville, CA 95661 p 916.782.7821 I f916.782.7824 I www.r3cgi.com  effectiveness.  resulted in updated adjustments to solid waste rates for 2025.    select enhanced services tot the other nine Agencies at the updated. 2025 adjustments to solid waste R3 would like to recognize that this has been a significant undertaking, and we'd like to thank the City of San Luis Obispo, Waste Connections, Los Osos Community Services District, and Participating Agencies fory your involvement in providing feedback during this process. In closing, R3 recommends City and stakeholder consideration of the revised 2025 rates and the new rate adjustment methodology as a means of achieving shared rate fairness, stability, and predictability objectives. Here's what Waste  rates.  Connections has shared regarding the outcomes:  "San Luis Garbage (SLG) had the opportunity to negotiate with the City of San Luis Obispo on the re-write of the 1994 rate-making manual. The goal of this endeavor was to simplify and streamline the rate-making process for all parties and provide an improved model going forward for potential refuse collection rate changes. The process included. a considerable amount of discussion and analysis and although arduous at times, SLG feels the negotiations were performed. in good faith, were collaborative in nature and carried out with mutual respect. In addition to updating the rate-making methodology, both parties took the opportunity to establish some new: service enhancements that will discourage. illegal dumping, provide cart cleaning exchanges, and offer rate relieft for low-income customers. SLG believes the outcome oft the negotiation has provided a much-improved: rate-review process for the City of San Luis Obispo and other cities currently under the old rate-making methodology which will ultimately allow for an  easier path toi fair andi reasonable rates for all customers."  We appreciate the opportunity to be of service to the City and would like to thank the City and the Participating Agencies for their involvement and feedback. We would also like to recognize Waste Connections staff for being communicative and responsive to requests fori information during the  process. Sincerely, BAsu Garth Schultz Principal R3 Consulting Group, Inc. 510.292.0853/9schutz@r3cg.com  1512E Eureka Road, Suite 220, Roseville, CA 95661 I P 916.782.7821 I f916.782.7824 I www.r3cgi.com    TABLE OF CONTENTS  1. Executive Summary  page 1  2. Background page 4  3. New Solid Waste Rate Adjustment Methodology and 2025 Rates  page 10  Attachments  1 Summary of Original 2025 Base Year Rate. Adjustments Example Rate Calculations for 20261 through 2029  2 Revised 2025 Rate Adjustments 3 CPI-U for Garbage and Trash  City of Sank Luis Obispol New Solid Waste Rate Adjustment Methodology and 2025 Rates  TOC R3    1. EXECUTIVE SUMMARY  New Rate Adjustment Methodology  The City of San Luis Obispo, ini its capacity as the lead agency on the solid waste rate adjustment methodology update process, and in partnership with Los Osos Community Services District and Waste Connections, completed negotiations and arrived at tentative agreement with Waste Connections regarding the terms and conditions of a new methodology. The outcome was the result of extensive good faith negotiations between the City and Waste Connections, with due consideration to input provided by Pending City Council approvals, the new methodology will replace the 1994 Rate Setting Process and Methodology Manual for Integrated Solid Waste Management Rates (1994 Rate Manual) and will regulate annual rate adjustments for the City's solid waste rates starting in 2026. The newr methodology fulfills key objectives established by the City and' Waste Connections, including rate stability, predictability, fairness, transparency, ease of administration, and cost-effectiveness. Additionally, in response to requests by other Agencies that contract with Waste Connections in San Luis Obispo County, the new methodology can be applied on a regional-scale andi is available as recommended alternative to the 1994 Rate Adjustment Manual for those. Agencies.  other public agency stakeholders.  Thel key features of the new methodology include:  CPI Adjustments: Starting in 2026, rate adjustments willl be based on the Garbage and' Trash CPI, with ai floor of 2% and a cap of 5%. Amounts under 2% or over 5% will carry forward. The CPI adjustment will apply to' Waste Connections' collection and post-collection cost centers. Revenue Balancing Mechanism: Starting in 2027, adjustments to rates will account for shortfalls or surpluses in' Waste Connections' actual revenues compared to projected revenues from prior years. For example, if Waste Connections' 2025 revenues exceed projections, the amount of surplus revenues will be credited tot the rates in 2027 (and vice versa), achieving fairness in compensation and rates for the company and for ratepayers. Such adjustments would take place annually and will bei independent of the CPI cap andi floor noted above (there is no cap Less Frequent Cost-Based Adjustments: Currently, solid waste rates are adjusted based on the 1994 Rate Adjustment Manual every three years on Waste Connections' costs. Via the new methodology, cost-based adjustments would occur a maximum of every five years, and only if requested by Waste Connections or the City. Thet first opportunity for a cost-based. adjustment willl be for the 2030 rate year. If neither Waste Connections nor the City request a cost-based adjustment, then the CPI adjustment approach will be applied. Cost-based adjustments willl be based on' Waste Connections' consolidated audited financial statements for the region. Timeframes for cost-based adjustment application and review process will be ample, such that the City will have sufficient time for review and approval processes and such that the potential for delayi in implementation is minimized. These timeframes will be delineated ini thet forthcoming Updated Depreciation Lifespan for Trucks: The 1994 Rate Manual set a 7-year depreciation schedule for solid waste collection trucks. Modern solid waste collection trucks have a 10-year Updated Profit Allowance: The 2025 rate adjustment will include a 9% profit allowance of projected collection costs and in 2026 and thereafter the profit allowance willl be 10%. The updated profit allowance is in-keeping with industry standard ranges for solid waste services, For  on these amounts).  amendment to the agreement with Waste Connections.  lifespan, and the depreciation schedule was adjusted accordingly.  City of Sanl Luis Obispol New Solid Waste Rate Adjustment Methodology and: 2025 Rates  10f19 R3    Executive Summary  context, the 2025 profit allowance is approximately 5% of revenues and we estimate that the 2026 profit allowance willl be approximately 5.5% of revenues. Profit will not be allowed on post- Removed Limitation on Corporate Overhead: The 1994 Rate Manual placed al limitation on corporate overhead costs. Today, corporate overhead costs fund legal, tax, payroll, human resources, engineering, compliance, IT, training and recruiting programs. The City and' Waste Connections agreed to remove the prior limitation in orderi to fund these services. Int the near- term, compensation to Waste Connections for corporate overhead will be limited by the CPI adjustment noted above. Cost-based adjustments to corporate overhead are possible in 2030, and willl be subject to review, justification, and potential limitation at that time. Extraordinary Adjustments: The California Air Resources Board (CARB). Advanced Clean Fleets (ACF)regulation is requiring all solid waste collection trucks tol have zero emissions by 2042. This includes ap phased in plan to get the percentage of the fleet to be: zero emission vehicle (ZEV) with 10% by 2030, 25% by 2033, 50% by 2036,75% by 2039 and 100% by 2042. During CPI Adjustment; years, Waste Connections may request extraordinary rate adjustments due to changes in law affecting collection operations, including for compliance with CARB's ACF zero emission mandate (which may necessitate change to depreciation schedules). The City may, buti is not obligated to, consider requests for extraordinary rate adjustments due to changes in law affecting post-collection operations. Requests for extraordinary change are: subject to good  collection costs.  faith negotiations between City and Waste Connections.  New Service Enhancements  During negotiations, the City and' Waste Connections also took the opportunity to establish new service enhancements that will discourage illegal dumping, provide cart cleaning exchanges, and offer rate relief forl low-income customers. The below service enhancements are available to the other Agencies that approve the new rate adjustment methodology in association with adjusted 2025 solid waste rates: Customer Assistance Program: 20% low-income discount provided to residential customers using 32-gallon cart service, using existing. jurisdictional practices on low-income relief for their Free Bulky' Waste Collections: Collection of al bulky waste item twice annually from residential accounts at no separate cost, via clean-up week or voucher program depending on existing Annual Cart Exchange: Once annual exchange of a residential solid waste, recycling, or  offered utility type services with evidence of qualifying financiall hardship.  program.  organics cart per customer account. 2025 Rate Adjustments  As a result of the above, Waste Connections' 2025 rate adjustment request was revised from a 9.29% increase to a 9.89% increase in solid waste rates, effective January 1, 2025 (and prior to other rate structure adjustments that the City and' Waste Connections may enact). When the new rate methodology changes and service enhancements are equally applied to the other regional Agencies, the results are as shown in' Table 1 on the following page. Additional details are included in Section 3 of this report.  City of Sanl Luis Obispo New SolidV Waste Rate Adjustment Methodology and 2025 Rates  2of19 R3    Executive Summary  Table 1: 2025 Rate Adjustments  Agency City of San Luis Obispo City of Arroyo Grande Los Osos CSD City of Pismo Beach Cambria CSD City of Grover Beach Nipomo CSD Oceano CSD Cayucos SD Avila Beach CSD  Original 9.29% 3.97% 12.47% 3.97% 12.78% 3.97% 3.23% 3.76% 12.47% 3.97%  Revised 9.89% 4.92% 13.18% 4.82% 12.59% 5.02% 5.04% 4.98% 14.32% 4.60%  City of Sanl Luis Obispol New Solid Waste Rate Adjustment Methodologya and 2025 Rates  3of19 R3    2. BACKGROUND  1994 Rate Manual  The 1994 Rate Manual is a 120-page document that provides step-by-step directives regarding annual adjustments to solid waste rates int the City. Though the 1994 Rate Manual specifically references the City of San Luis Obispo, other agencies in San Luis Obispo County (including the nine Agencies referencedi in this report) also follow the 1994 Rate Manual for annual adjustments to solid waste rates. The 1994 Rate Manual established at three-year cycle for adjustments to solid waste rates. Thei first year ofe each three-year cycle (called a "base year") adjusted rates based on the documented costs of providing solid waste services. In the second andi third years, solid waste rates were adjusted in accordance with external indicators, such as the Consumer Price Index (CPI). While the 1994 Rate Manual was an appropriate approach to annually adjusting solid waste rates at the time, changing regulatory conditions and modern best practices in solid waste rate setting indicate that the prior approach has outlived its usefulness. In particular, cost-based adjustments on a fixed three-year cycle are no longer the industry norm. Most solid waste rate adjustment methodologies in California today either do noti include regular cost-based adjustments or do so less frequently. When allowed, cost-based adjustments are typically the result of extraordinary changes in cost due to factors like changes in law or other uncontrollable factors (such as China's National Sword Policy in 2017 and the COVID pandemic in 2020). Additionally, step-by-step instructions and timelines in the 1994 Rate Manual are outdated and do not contemplate current approaches to public noticing, public hearings, and review timelines for  authorizing rate adjustments.  RFQ for New Rate Adjustment Methodology  Recognizing the limitations oft the 1994 Rate Manual, the City andI Los Osos Community Services District issued a request for quotes (RFQ) in early 2024 seeking a consultant to develop a new rate adjustment methodology. Pursuant to the RFQ process, R3 was awarded an agreement to provide supporti in  developing a new rate adjustment methodology. Rate Adjustment History  Rate adjustments experienced by the City and participating Agencies have varied significantly ini the prior ten years from 2015 through 2014, as shown in Table 2, on the following page. As shown ini thet table, rate adjustments by agency have varied from 0% (most Agencies in 2015) to over 20% (most. Agencies in There are important reasons for these variances, primarily related to the unfunded State mandates of SB 1383 (Short-lived Climate Pollutants Act) which required all agencies in California to implement programs to recover and recycle organic waste to reduce methane emissions from landfills. While rate adjustments were necessary to fund the required SB 1383 programs, the combination of new costs with the three-year cost-based adjustment approach in the 1994 Rate Manual resulted in rate adjustment spikes in 2016, 2019, and 2022. Overall, across the Agencies, the average annual rate adjustment from 2015t through One important objective of the new rate adjustment methodology is to minimize the recurrence of such spikes by reducing thet frequency of cost-based rate adjustments. From R3's experience implanting new rate methodologies with other clients, the result has been stable and predictable annual rate adjustments.  2022).  2024 has been 6.76%.  City of Sanl Luis Obispo New Solidy Waste Rate Adjustment Methodology and2 2025 Rates  40f19 R3    Background  Table 2: 2015-2024 Rate Adjustments by Agency  Agency Cityo of San! Luis Obispo CityofA Arroyo Grande Los Osos CSD  2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.00% 5.25% 1.00% 1.60% 13.70% 1.70% 0.70% 17.75% 9.10% 3.00% 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 22.19% 9.10% 3.00% 2.00% 10.37% 1.00% 1.60% 25.74% 1.70% 0.70% 41.87% 7.70% 2.70%  CityofPismo Beach 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 22.19% 9.10% 3.00%  Cambria CSD CityofG Grover Beach Nipomo CSD Oceano CSD Cayucos SD Avilal Beach CSD  1.92% 9.93% 1.00% 1.60% 25.32% 1.70% 0.70% 41.50% 9.10% 3.00% 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 22.19% 9.10% 3.00% 0.00% 0.00% 1.00% 1.60% 15.08% 1.70% 0.70% 21.27% 9.10% 3.00% 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 21.03% 9.10% 3.00% 2.00% 27.39% 1.00% 1.60% 26.43% 1.70% 0.70% 43.30% 9.10% 3.00% 0.00% 3.25% 1.00% 1.60% 10.06% 1.70% 0.70% 22.19% 9.10% 3.00%  Financial Statement History  There are three Waste Connections business units serving the ten participating Agencies (San Luis Garbage, Mission Country Disposal, and South County Sanitary Service). Each business unit prepares annual audited financial statements which are used as thel basis for base year rate applications to the Agencies. R3 analyzed Waste Connections' audited financial statements for the six years from 2018 through 2023 to evaluate profit achievement, with the results summarized in Table 3, below. Table 3 also includes estimated profit achievement in 2024 (still underway) and for 2025 (prior to 2025 rate  adjustments).  Table 3: 2018 - 2023 Profit Achievement  Business Unit San Luis Garbage Mission Country Disposal  2018 2019 2020 2021 2022 2023 2024 2025 -13.84% -16.84% -9.66% -3.41% 12.47% 6.30% -0.64% -6.62% -19.26% -30.77% -9.28% -19.84% -10.21% 2.47% -4.09% -8.95% -7.22% -12.45% -5.22% -7.88% 4.66% 9.67% 2.61% -3.16%  South County Sanitary Service 5.38% 1.40% 0.25% -5.56% 5.93% 15.85% 8.43% 2.38%  Overall  City of Sanl Luis Obispol New Solid Waste Rate Adjustment Methodology and 2025F Rates  5of19 R3    Background  As shown in Table 3, in total across all three business units, Waste Connections operated without any net income between 2018 and 2021, with net positive profitability being achieved in 2022 and 2023. Profit achievement varied by business unit, with South County Sanitary Service consistently experiencing greater profit achievement and Mission Country Disposal consistently experiencing lesser or no profit achievement. This is one of the key reasons that rate adjustments for the Agencies served by Mission Country Disposal (Cambria Community Services District, Cayucos Sanitary District, and Los Osos Community Services District) were higher than the other Agencies in 2019 and 2022. Table 3 also shows that projected profit achievement in 2024 will be lower than 2023, which is primarily the result of Waste Connections incurring increased landfill disposal costs (provided by a related party) and increased organics processing costs (provided by a non-affiliated third party processor). Projected profit achievement for 2025 - which, importantly, is prior to 2025 adjustments to solid waste rates - demonstrates no net profit for San Luis Garbage and Mission County Disposal and low net income for South County Sanitary Service. Overall, without adjustments to rates, Waste Connections service to the Itshould be noted that Waste Connections allocates costs between business units based on allocation metrics that include vehicle operating hours, number of solid waste containers, and number of customer accounts. While such metrics are useful means of allocating costs, they do notr necessarily represent the  Agencies in 2025 will not yield neti income.  exact cost of providing service within a given business unit.  Rate Comparison  R3 compared current 2024 solid waste rates for the Agencies to rates in other jurisdictions in San Luis Obispo County, Santa Barbara County, and Monterey County. The results are shown in Table 4, below and on the following page, and are organized in ascending order by 32-gallon monthly rate (common  residential subscription level).  Table 4: Regional Comparison of Monthly Rates  2Cubic  Agency  20 Gallon 32 Gallon 64 Gallon 96 Gallon Yards  Oceano CSD San Luis Obispo Pismo Beach Grover Beach Arroyo Grande Nipomo CSD Avila Beach CSD Santa Barbara County Zone 4 Lompoc Cayucos SD Santa Barbara County Zone 5 City of Atascadero San Miguel City of Morro Bay Solvang  N/A $14.74 N/A N/A NIA N/A N/A N/A N/A N/A N/A N/A N/A $22.21 N/A  $20.37 $23.53 $23.76 $24.23 $27.33 $27.57 $28.31 $31.41 $32.60 $33.03 $33.67 $34.13 $34.33 $35.54 $36.28  $29.31 $47.06 $35.52 $39.52 $46.78 $36.13 $38.52 $37.84 $52.80 $53.80 $42.62 $45.20  $57.39 $128.75 $70.59 $185.21 $43.73 $167.65 $51.81 $136.62 $65.24 $177.68 $40.70 $179.98 $44.48 $184.32 $42.46 $192.87 $66.35 $172.24 $72.88 $124.12 $50.77 $254.11 $54.69 $256.55  $47.56 $71.33 $166.02 $32.74 $41.23 $147.95  Santa Barbara County Zone 4 Santa Ynez  $71.07 $106.63 $265.30  City of Sanl Luis Obispol New Solid Waste Rate Adjustment Methodology and 2025 Rates  6of19 R3    Background  2Cubic  Agency  20 Gallon 32 Gallon 64 Gallon 96 Gallon Yards  Goleta Templeton Los Osos CSD Buellton Cambria CSD King City Santa Barbara County Zone 2 City of Paso Robles Santa Barbara County Zone 3 MRWMD City of Santa Barbara WM Area (Formerly Mid-State) Santa Barbara County Zone 1 Santa Maria  N/A NIA $27.74 N/A N/A $32.43 N/A $38.15 N/A $38.28 N/A N/A N/A N/A  $37.39 $38.73 $39.45 $40.51 $41.52 $42.83 $43.25 $43.32 $45.22 $46.54 $48.26 $48.72 $56.60 N/A  $41.88 $54.63 $60.57 $48.40 $53.68 $54.66 $57.42 $51.52 $72.92 $59.82 $71.31 $62.86 $38.74  $48.35 $240.10 $60.41 $149.58 $64.96 $228.72 $56.38 $281.13 $63.52 $288.00 $65.92 $259.61 $63.59 $188.36 $57.75 $215.72 $91.20 $277.20 $71.38 $277.66 $93.84 $214.46 $69.25 $256.74 $47.87 $166.72  $83.03 $124.55 $201.94  Table 4 demonstrates that solid waste rates for the City and other Participating Agencies compare favorably to others in the region. Charts 11 through 4, below and on the following pages, show the  information from Table 41 in graphical format.  Chart 1: Regional Comparison of Monthly 32-gallon Cart Rates  $60 $50 $40 $30 $20 $10 $0  Chart 1, which is organized in ascending order of 32-gallon monthly rate, demonstrates that the rates for 32-gallon monthly service (the most subscribed residential service level) for all Participating Agencies  City of Sanl Luis Obispo New Solid Waste Rate Adjustment Methodology: and 20251 Rates  7of19 R3    Background  other than Cambria Community Services District, Cayucos Sanitary District, and Los Osos Community Services District are thel lowesti in the region. Chart 2 shows how 64-gallon monthly rates compare.  Chart 2: Regional Comparison of Monthly 64-gallon Cart Rates  $90 $80 $70 $60 $50 $40 $30 $20 $10 $0  Chart 3: Regional Comparison of Monthly 96-gallon Cart Rates  $140 $120 $100 $80 $60 $40 $20 $0  City of Sanl Luis Obispol New Solidy Waste Rate Adjustment Methodology and 2025 Rates  8of19 R3    Background  Charts 3 and 41 keep the same ordering as Charts 1 and 2 and show howl larger residential 96-gallon service and commercial two (2) cubic yard bin service compare with the region. Overall, while exceptions exist, rates for solid waste service for the City and the Participating Agencies are among the lowest in the region, including San Luis Obispo County, Santa Barbara County, and Monterey County.  Chart 4: Regional Comparison of Monthly 2 Cubic Yard Rates  $350 $300 $250 $200 $150 $100 $50 $0  City of San Luis Obispol |New Solid Wastel Rate Adjustment Methodology and 2025 Rates  90f19 R3    3. NEW RATE ADJUSTMENT METHODOLOGY  AND 2025 RATES  2025 Base Year Rate Adjustments  Waste Connections submitted base year rate applications to the Agencies for rates effective January 1, 2025.'Those rate applications were prepared in accordance with the 1994 Rate Manual, with modification for an effectiveness date of. January 1, 2025, instead of the October 1, 2024 date that otherwise would have been the effective date given strict adherence to the 1994 Rate Manual. In simple terms, the applications project future 2025 costs for providing solid waste services based ont the actual Actual results for the most recently completed year (2023), which are based on the audited Projected results fort the current year (2024), which are to be based on year-to-date information  costs of providing services as follows: finançial statements.  available at the time the application is submitted. Projected results for the next year (2025).  Adjustments to solid waste rates are then calculated based on the projected 2025 revenue requirement,  which is the sum of: Allowed costs. Allowable operating profit. Pass through costs.  Inr reviewing the 2025 base year rate applications for the Agencies, R3: Checked calculations for mathematical accuracy and consistency. Tied projected costs back to the 2023 audited financial statements.  Evaluated the root causes of extraordinary changes in costi for landfilling and organics Reviewed 2024 revenues year to date to determine accuracy of projected revenues at current Proposed adjustments to solid waste collection vehicle depreciation lifetimes. A summary of Waste Connections' original 2025 base year rate adjustments per the applications Its should be noted that Waste Connections' base year rate applications are made at the business unit level (San Luis Garbage, Mission Country Disposal, and South County Sanitary Service) with no allocation of projected costs to individual Agencies served by those business units. Rather, the base year rate adjustment applications use total costs and revenues for those business units to calculate rate adjustments for the individual Agencies. For the purposes of our analysis, and as documented in Attachment 1, R3 allocated projected expenses by agency in accordance with proportion of revenues - this allocation approach is what thel base year rate application achieve in practice, and the result is an exact match to the rate adjustment calculations included in the base year rate applications for each  processing. rates for 2025.  submitted to the Agencies isi included as Attachment 1.  agency.  Authorization of the. January 1, 2025 rate adjustments are expected to occur after that date. Waste Connections will prorate adjustment amounts on customer bills to account fort thei timing difference.  City of Sanl Luis Obispo] New Solid Waste Rate Adjustment Methodology and: 2025 Rates  100f193    New Rate Adjustment Methodology and 2025 Rates  R31 thoroughly reviewed thet figures included in the 2025 rate adjustment calculations, as well as supporting documentation requested of Waste Connections during the review process and found that Waste Connections' rate applications were accurate and in accordance with the 1994 Rate Manual. The rate adjustments shown in Table 5 on the following page are the correct rate adjustments per the 1994 Rate Manual and are the default rate adjustments effective. January 1, 2025, if the City and the Participating Agencies do not move forward with revisions tot the 2025 rates in accordance with the new  rate adjustment methodology.  Table 5: 2025 Rate Adjustments Per 1994 Rate Manual  January 1, 2025, Default Rate Adjustment 9.29% 3.97% 12.47% 3.97% 12.78% 3.97% 3.23% 3.97% 12.47% 3.97%  Agency City of San Luis Obispo City of Arroyo Grande Los Osos CSD City of Pismo Beach Cambria CSD City of Grover Beach Nipomo CSD Oceano CSD Cayucos SD Avila Beach CSD  Revisions for New Rate Adjustment Methodology Ini negotiating the terms and conditions of a new rate adjustment methodology starting in 2026, the City and' Waste Connections made thet following revisions to the 20251 base year rate adjustments:  Updated Depreciation Lifespan for Trucks  The 1994 Rate Manual seta a 7-year depreciation schedule for solid waste collection trucks. Modern solid waste collection trucks have a 10-year lifespan, and the depreciation schedule was adjusted by Waste Connections açcordingly. Table 6, on thet following page, shows the dollar magnitude of this change and the effect on the 2025 rate adjustment, with the effect being a reduction int the rate adjustment calculation ranging from 1.33% to 1.62%, depending on agency- Differences in effect by agency are the result of  business unit allocations described earlier in this report.  City of Sanl Luis Obispo New Solid Wastel Rate Adjustment Methodology and 2025 Rates  fid1R3    New Rate Adjustment Methodology and 2025 Rates  Table 6: Change in Depreciation Lifespan  Original Revised Change in Effect on Rate Adjustment  Depreciation $1,338,367 $376,989 $295,515 $131,502 $398,063 $316,350 $236,919 $225,376 $114,616 $26,441 Depreciation 1,125,720 317,545 248,918 110,766 336,460 267,393 200,254 190,498 96,879 22,349 Calculations (212,647) (59,444) (46,597) (20,735) (61,603) (48,957) (36,665) (34,878) (17,737) (4,092)  -1.47% -1.62% -1.62% -1.62% -1.33% -1.33% -1.33% -1.33% -1.33% -1.33%  Removed Limitation on Corporate Overhead  The 1994 Rate Manual placed al limitation on corporate overhead costs. Today, corporate overhead costs fund legal, tax, payroll, human resources, engineering, compliance, IT, training and recruiting programs. The City and' Waste Connections agreed to remove the prior limitation in order tot fund these services. Table 7, below, shows the effect of removing the prior limitation on corporate overhead. Differences in effect by agency are the result of different original proportionate amounts of corporate overhead between Agencies. In the near-term, compensation to Waste Connections for corporate overhead willl bel limited by the CPI adjustment noted above. Cost-based adjustments to corporate overhead are possible in 2030,  and will be subject to review, justification, and potential limitation at thatt time.  Table 7: Change in Corporate Overhead  Original Corporate Overhead Revised Corporate Overhead Change in Calculations Adjustment  $246,296 $46,213 $36,226 $16,120 $93,625 $74,406 $55,724 $53,009 $26,958 $6,219 430,378 80,753 63,301 28,168 163,600 130,017 97,371 92,627 47,106 10,867 184,082 34,540 27,075 12,048 69,975 55,611 41,648 39,619 20,148 4,648  Effect on Rate 1.28% 0.94% 0.94% 0.94% 1.51% 1.51% 1.51% 1.51% 1.51% 1.51%  City of Sant Luis Obispo New Solid Waste Rate Adjustment Methodology and 2025 Rates  120f19R3    New Rate Adjustment Methodology and 2025 Rates  50% Cost Share for Regional Service Enhancements  Waste Connections is offering new service enhancement to the benefit of the City and the Agencies  including:  Collection of al bulky waste item twice annually from residential accounts at no cost, via clean-up Once annual exchange ofa a residential solid waste, recycling, or organics cart per customer Waste Connections has estimated the annual cost of offering these service regionally and is proposing recovery of 50% of the projected costs viat the 2025 rate adjustment. The City and' Waste Connections havei tentatively agreed to this cost sharing as part of the new agreement and fori inclusion ini the 2025 rates. Waste Connections is proposing the lowi income discount customer assistance program without: a Table 8, below, shows the effect of including the 50% cost sharing for these two service enhancements into the 2025 rate adjustment. Cost allocations arel by percentage of accounts by agency, which is the  week or voucher program depending on existing program.  account.  change in rate adjustment.  reason for differences int the effect of rate adjustment by agency.  Table 8: 50% Cost Share for Service Enhancements  New Annual Cart Exchange Enhancements Change in Calculations Adjustment  $26,376 $9,889 $7,223 $3,623 $11,445 $7,566 $8,179 $7,987 $3,681 $320  Bulky Clean-up 21,091 7,908 5,776 2,897 9,152 6,050 6,540 6,386 2,944  256 576  47,467 17,797 12,999 6,520 20,597 13,616 14,719 14,373 6,625  Effect on Rate 0.33% 0.48% 0.45% 0.51% 0.45% 0.37% 0.54% 0.55% 0.50% 0.19%  Corrections to AB 939 Fees  Agency fees, which include AB 939 Fees and Franchise Fees, are included as estimates in rate adjustment applications. Because the rate applications are at the company business unit level, and not at the individual agency level, AB 939 fees int the application are: allocated to the Agencies in proportion to revenues. However, only the City of San Luis Obispo and Cayucos Sanitary District receive AB 939 Fees - therefore this was corrected in the revised 2025 rate adjustments as shown in Table 9, on thet following page. Note that the values for the City of San Luis Obispo also include a correction to Franchise Fee  revenues.2  2Specifically, tor remove the 1994 Ratel Manual's approach to' grossing up" the calculated rate adjustment to account fori the Franchise Feel byi including the projected Franchise Fee payment amounts int the rate adjustment calculation itself. This approach is also recommended for the other Agencies starting with the 2026r rate adjustment.  City of San! Luis Obispo New Solid Waste Rate Adjustment Methodology and 2025 Rates  130f193    New Rate Adjustment Methodology and 2025 Rates  Table 9: Corrections to AB 939 Fees  Original Agency Fees Revised Agency Fees Change in Calculations Adjustment  $362,140 $5,226 $4,097 $1,823  $-  $-  $-  439,411  12,754  77,271 (5,226) (4,097) 10,931  Effect on Rate 0.54% -0.14% -0.14% 0.85% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%  Updated Profit Allowance  The 1994 Rate Manual, along with the Agencies agreements with Waste Connections, limits allowable profit based on an "operating ratio" of 92% or 93% of allowable collection expenses (not including post- collection disposal, processing or recycling expenses nor agency fees) depending on the agency. AS 93% operating ratioi is the equivalent of a7.53% profit margin, and a 92% operating ratio is the equivalent of Al key negotiation point between the City and' Waste Connections was a change to the profit allowance. Ultimately, after much discussion and negotiation, the City and' Waste Connections agreed that the 2025 rate adjustment willi include a 9% profit allowance of projected allowable collection costs andi in 2026 and thereafter the profit allowance will be 10%. The updated profit allowance is in-keeping with industry For context, the 2025 profit allowance is approximately 5% of revenues and we estimate that the 2026 profit allowance will be approximately 5.5% of revenues. Table 10, on the following page, shows the effect of changing the profit allowance to 9% of collection costs for all Agencies for the 2025 rate adjustments. Differences in the effect on rate adjustment are due to differences in existing profit allowances by agency, as well as differences in the depreciation, corporate overhead and new: service  an 8.7% profit margin.  standards for solid waste services.  enhancements shown ine earlier tables.  31 Includes adjustment to Franchise Fee to remove "grossing up" method from City's 2025 rate adjustment  calculations.  City of San Luis Obispol New Solid Waste Rate Adjustment Methodology and 2025 Rates  140f19R3    New Rate Adjustment Methodology and 2025 Rates  Table 10: 9% Profit Allowance on Allowable Collection Costs  Original Profit $641,302 $188,392 $170,609 $65,715 $227,094 $180,477 $135,161 $111,295 $65,388 $15,085 Revised Profit 768,515 224,623 175,993 78,382 237,649 188,618 141,665 134,797 68,490 15,714  Allowance Allowance Change in Calculations Adjustment  127,213 36,231 5,384 12,667 10,555 8,141 6,504 23,502 3,102  629  Effect on Rate 0.88% 0.99% 0.19% 0.99% 0.23% 0.22% 0.24% 0.90% 0.23% 0.20%  Total Revisions for New Rate Adjustment Methodology  Taken altogether, the revisions to the 2025 rate adjustment result in smalli increases to the original 2025 rate adjustment calculations. These are: shown in Table 11, on the following page, and are also shown in  Attachment 2.  City of Sanl Luis Obispo |New Solid Wastel Rate Adjustment Methodology and 2025 Rates  15df193    New Rate Adjustment Methodology and 2025 Rates  Table 11: Overall Revisions to 2025 Rate Adjustments  Original 2025 Revenue Calculation Change in Depreciation Change in Corporate Overhead Enhanced Services Allowance AB 939 Fees Revised 2025 Revenue Calculation Current Rates Shortfall Revised 2025 Rate Adjustment  $15,640,734 $4,089,595 $3,228,699 $1,426,540 $4,786,646 $3,804,059 $2,848,911 $2,692,832 $1,378,241 $317,951 (212,647) (59,444) (46,597) (20,735) (61,603) (48,957) (36,665) (34,878) (17,737) (4,092)  184,082 34,540 27,075 47,467 17,797  12,048 69,975 55,611  41,648 39,619 20,148 14,719 14,373 6,504  4,648 576 629  12,999 5,384  6,520 12,667 10,555 10,931  20,597  13,616 8,141  6,625 3,102  Updated Profit 127,213 36,231  23,502  Corrections to 77,271 (5,226) (4,097)  15,864,119 4,113,493 3,223,463 1,447,971 4,826,170 3,832,470 2,875,118 2,735,447 1,390,379 319,712  Revenues at 14,435,726 3,677,194 2,882,493 1,282,686 4,621,616 3,672,906 2,750,690 2,616,676 1,330,724 306,989  (1,428,393) (436,299) (340,970) (165,285) (204,554) (159,564) (124,428) (118,771) (59,655) (12,724) 9.89% 13.18% 12.59% 14.32% 4.92% 4.82% 5.02% 5.04% 4.98% 4,60%  Proportionality in Cost of Service  R3a analyzed the 2025 rate adjustments for adequacy with respect to the cost-of-service requirements of Proposition 218. Because the base year rate adjustment methodology is based on the documented cost of provided solid waste services as expressed. in' Waste Connections' audited financial statements, we find that the current and proposed solid waste service rates will generate revenues sufficient to cover the cost-of-providing: service plus a reasonable profit allowance commensurate with normal expectations in R3 also analyzed the proposed solid waste service rates for adequacy with respect to proportionate allocation of costs among solid waste service customers. R3 found that the current (and thus also  the solid waste industry.  4Rate adjustments shown include grossing up for franchise fees per 19941 Rate Manual methodology, except for San  Luis Obispo.  City of Sanl Luis Obispo INew Solid Waste Rate Adjustment Methodology and 2025 Rates  160f19R3    New Rate Adjustment Methodology and 2025 Rates  proposed) solid waste rate structure proportionately allocates costs to service types and container sizes based on the relative differences in cost associated with the types of services provided to customers. For example, for customers subscribing to 60- or 90-gallon cart solid waste service, the per-gallon cost-of- service for those subscribed to the larger container size (90-gallons)i is proportionately less than those subscribed to the smaller container size (60-gallons). This is because solid waste service is comprised of both fixed and variable costs, with thet fixed cost portion being for the cost of collection (labor, fuel, capital equipment, and other shared costs) as well as the costs related to post-collection disposal, processing, recycling and composting. Thus, the cost-of-service for the larger container size (90-gallons) has al lesser proportion oft fixed costs to variable costs compared to the smaller (60-gallon) container size.  Factors Affecting 2025 Rate Adjustments  Overall, for the Agencies and thet three Waste Connections business units, the 2025 rate adjustments reflect an 8.12% increase in revenues to meet increased costs and revised profit allowances. The largest Increases in organics processing costs - Third-party costs for the organic waste post- collection processing facility operated by the company formerly named Hitachi Zosen INOVA, and which are not within Waste Connections' control, have doubled since 2022. The change in costi is Increases in landfill disposal costs - Related party costs for landfill waste disposal at Cold Canyon have remained flat since 2016. The 2025 rate adjustment reflects a market adjustment to these costs, from a per toni tipping fee of $41 per ton (in place since 2016) to a per ton tipping fee of $70. Waste Connections provided market comparison demonstrating the applicability of the  contributors to the overall increase are:  the result of changes int facility capital and operating costs.  $70 per ton market tipping fee.  Other factors play minor roles int the 2025 rate adjustment:  Collection costs including labor, vehicles, operating expenses and overhead - These costs are increasing in proportion to the Consumer Price Index and are projected to increase by 3.20% Agency fees - These costs are mostly proportionate to changes in rates and are projected to Overall, collection services comprise the single largest component overall rate funded expenses, at 56% of total rate revenues. Post-collection services are the next largest component of rate funding, at 29% of total rate revenues. Agency fees comprise 10% of rate revenues and profit allowance comprises 5% of  in 2024 and 4.21% for 2025.  increase by 2.22% in 2024 and 3.30% in 2025.  rate revenues. This is demonstrated in Chart 5, on thet following page.  City of Sanl Luis Obispo New Solid Waste RateA Adjustment Methodology and 2025F Rates  17of193    New Rate Adjustment Methodology and 2025 Rates  Chart 5: Summary Components of 2025 Rate Revenues  Profit Allowance 5%  Agency Fees 10%  Collection Services 56%  Post- Collection Services 29%  New Rate Adjustment Methodology  The City and' Waste Connections negotiated a new methodology for adjusting rates starting in 2026, which are: summarized below. R3 is preparing an exhibit to the City's new agreement with Waste Connections that will further detail the terms and conditions of the new methodology in accordance with thei following points, which have been tentatively agreed tol by the parties. The exhibit will be finalized and ready for distribution to the Agencies on or around November 18, 2024. Iti is recommended that the Agencies bring forward the exhibit as an amendment to their agreements with Waste Connections when considering the 2025 rate adjustments, which is anticipated to occur in January 2025.  The features of the new methodology include:  CPI Adjustments: Starting in 2026, rate adjustments will be based on the Garbage and Trash CPI, with a floor of 2% and a cap of 5%. Amounts under 2% or over 5% will carry forward. The CPI adjustment will apply to' Waste Connections' collection and post-collection cost centers. The proposed CPIi is the Consumer Price Index for all Urban Consumers for Garbage and Trash in the United States, all City average. Details and prior results fort this CPI are included in Attachment 3. This is the same CPI used by' Waste Connections in preparing its 2025 base year application. Updated Profit Allowance: As stated previously, the 2025 rate adjustment includes a 9% profit allowance of projected collection costs. The City and' Waste Connections have tentatively agreed that, in 2026 and thereafter, the profit allowance will be 10% of collection costs. Revenue Balancing Mechanism: Starting in 2027, adjustments to rates will account for shortfalls or surpluses in' Waste Connections' actual revenues compared to projected revenues from prior years. For example, if Waste Connections' 2025 revenues exceed projections, the amount of surplus revenues will be credited tot the rates in 2027 (and vice versa), achieving fairness in compensation and rates for the company and for ratepayers. Such adjustments would take place annually and willl be independent of the CPI cap and floor noted above. Less Frequent Cost-Based Adjustments: Currently, solid waste rates are adjusted based on the 1994 Rate Manual every three years on' Waste Connections' costs. Via the newr methodology,  City of Sanl Luis Obispol New Solid Waste Rate Adjustment Methodology and 2025F Rates  18df193    New Rate Adjustment Methodology and 2025 Rates  cost-based adjustments would occur ar maximum of every five years, and only if requested by Waste Connections or the City. Thei first opportunity for a cost-based adjustment will be for the 2030 rate year. If neither Waste Connections nor the City request a cost-based adjustment, then the CPI adjustment approach willl be applied. Cost-based adjustments will be based on' Waste Connections' consolidated audited financial statements for the region. Timeframes for cost-based adjustment application and review process will be ample, such that the City willl have sufficient time for review and approval processes and such that the potential for delay ini implementation is Extraordinary Adjustments: The California Air Resources Board (CARB). Advanced Clean Fleets (ACF) regulation is requiring all solid waste collection trucks to be: zero emissions in 2042. This includes a phased in plan to get the percentage of thet fleet to be zero emission vehicle (ZEV) with 10% by 2030, 25% by 2033, 50% by 2036,75% by 2039 and100% by 2042. During CPI Adjustment years, Waste Connections may request extraordinary rate adjustments due to changes in law affecting collection operations, including for compliance with CARB's ACF: zero emission mandate (which may necessitate change to depreciation schedules). The City may, but is not obligated to, consider requests for extraordinary rate adjustments due to changes in law affective post-collection operations. Requests for extraordinary change are subject to good faith  minimized.  meet and confer negotiations between City and' Waste Connections. Example Calculations for 2026 through 2029  R31 has prepared example calculations of projected rate adjustments for 2026 through 2029 based on the tentatively agreed to terms and conditions outlined above (including adjustment to 10% profit allowance on collection services starting in 2026). Table 12, below, demonstrates this example for the City of San Luis Obispo, and Attachment 4 provides examples for all Agencies. Note that the example in Table 12 CPI at the 5% cap (note that CPI below the 5% cap will result in lower rate adjustments) Revenue reconciliation at 1% below annual rate revenue projections (note that amounts above rate revenue projections will offset rate adjustments, not add toi them). Discontinuance of the prior Franchise Fee grossing method on rate adjustment for all Agencies Table 12: Example Calculation of New Rate Methodology for the City of San Luis Obispo  and Attachment 41 includes thet following assumptions:  starting in 2026.  2025 $8,539,055 768,515 4,602,096 1,586,412 368,041 N/A 15,864,119  2026 $8,966,008 896,601 4,832,201 1,675,695 386,443 N/A 16,756,947 5.63%  2027 $9,414,308 941,431 5,073,811 1,777,106 405,765 158,641 17,771,062 6.05%  2028 $9,885,024 $10,379,275 988,502 5,327,501 1,866,072 426,053 167,569 18,660,722 5.01%  2029 1,037,927 5,593,876 1,959,572 447,356 177,711 19,595,717 5.01%  Collection Services Profit Allowance Post-Collection Services Franchise Fee AB 939 Fee Revenue Reconciliation Example Total Revenues Indexed Rate Adjustment  City of Sanl Luis Obispo New Solid Waste Rate Adjustment Methodology and 2025 Rates  190f19R3        AVILA BEACH  COMMUNITY SERVICES DISTRICT Post Office Box 309, Avila Beach, CA. 93424  MEMORANDUM  TO: FROM: DATE:  Board of Directors  Brad Hagemann, General Manager November 12, 2024  SUBJECT: Award Contract to Wallace Group for Engineering Services for Preparation of  aRecycle Water Strategy and Associated Title 22 Engineering Report  Recommendation:  Receive thiss staffreport, and direct stafftos sign an Engineering Services Contract with Wallace Group for Preparation ofal Recycle Water Strategy and. Associated' Title 22 Engineering Report  Consistent with Their October 16, 2024, Proposal.  Discussion:  Ina accordance with the Board's direction, staff has been discussing options to recycle the treated wastewater from the District's recently upgraded WWTP. Staff has had initial meetings with regulatory agencies, including the State Water Resources Control Board staff and the Regional Water Quality Control Board staff. In addition, staff has had preliminary discussions with the Avila Beach Golf Resort regarding their interest in utilizing recycled wastewater on their nearby golf course. The Regulatory agencies and the Golf Resort expressed support and encouraged District staff to move forward with preparing a recycled water strategy and the preparation of a Title 22 Engineering Report for submittal to the Staffs selected Wallace Group toj prepare an Engineering Services Proposal for the work based on their familiarity and expertise with the District WWTP, their previous experience in preparing Title 22 Reports and their familiarity with the Avila Valley wastewater and recycled water opportunities. The Wallace Group proposal is provided as an attachment to this Staff Staff recommends the Board approve the proposal and direct staff to prepare and sign an Engineering Services Agreement with Wallace Group for an amount not to exceed $30,000.  regulatory agencies.  Report.  Attachment: Wallace Group Proposal dated October 16, 2024    October 16, 2024 Brad Hagemann Avila Beach Community Service District 100 San Luis Street Avila Beach, California 93424 Subject: Recycled Water Permitting Dear Brad Hagemann: for your consideration: PROJECT UNDERSTANDING  SCATIONTOS Se  WALLACE GROUP 1984-2024 CIVILAND TRANSPORTATION ENGINEERING LANDSCAPE. ARCHITECTURE MECHANICAL ENGINEERING PUBLICV ADMINISTRATION WORKS WATER RESOURCES  Wallace Group appreciates the opportunity to provide you with our proposal for engineering  services for the above referenced project. The following Scope of Services has been prepared CONSTRUCTION MANAGEMENT  Avila Beach CSD's (ABCSD) current wastewater treatment process includes the ocean discharge of up to 200,000 GPD of tertiary treated, disinfected Title 22 quality effluent. The PLANNING District would like tol beneficially utilize this water resource fori irrigation purposes on the As part of the Regional Board and Division of Drinking Water requirements for enrollment in SURVEYING/. the Recycled Water General Order, a Title 22 Engineering Report is required. Wallace Group GIS SOLUTIONS  adjacent golf course.  has been asked to provide this report to the District.  SCOPE OF SERVICES Task 1- Recycled Water Strategy  Wallace group will work with ABCSD and Avila Beach Golf Course staff to determine the physical improvements required to implement a recycled water strategy for the golf course irrigation. These improvements are expected to include a potential upgrade to UV disinfection, storage pond improvements at the golf course, transmission piping from the wastewater treatment plant to the storage pond, and miscellaneous improvements to the golf course irrigation system to adhere to Title 22 regulations for recycled water use. Wallace Group will draft a brief summary memorandum describing the improvements required, as well as their capital and operations costs, and meet with ABCSD and Avila Beach Golf Course teams to review the findings. Once both parties have come to an agreement on the overall recycled water irrigation strategy, Wallace Group can summarize the strategy as part of the Title 22  Engineering Report in the next task. Deliverables: Technical memorandum Task 2- Title 22 Engineering Report  Wallace Group will prepare the Title 22 Engineering Report based on California Dept of Public Health, Division of Drinking Water, Recycled Water Unit's published guidelines, titled, "Guidelines for the Preparation of an Engineering Report for the Production, Distribution and Use of Recycled Water". The report will include details regarding every aspect of the project, ranging from key personnel to influent flows and quality, to usage area descriptions, and operational rules and regulations to be implemented at site. Wallace Group will work closely with ABCSD to gather the relevant information required for the report.  WALLACE ACalifornia Corporation GROUP 612 CLARION CT SAN LUIS OBISPO CALIFORNIA 93401 T805 544-4011 F805 544-4294 www.wallacegroup.us  Deliverables: Draft Title 22 Report Final Title 22 Report    Exhibit A Standard Billing Rates  Engineering, Design & Support Services: Assistant Designer/Techniclan Designer/Technician I-I IV. Senior Designer/Technician I-II. GIS Technical Specialist. Senior GIS Technical Specialist Associate Engineer I- III Engineer I- IV.. Senior Engineerl-III. Director. Principal  $120 5125/5135/5145/5155 $165/S172/S179 $160 $170 $135/9145/9155 5170/5175/5180/5185 $200/S205/S210 $220 $245 $270 $140/$155 $160 $180 $115/5125/5135 $165/$170 $175/5180/S185 $195 $220 $245 $270 $110 $120/S125/5135  WALLACE GROUPe  Principal Engineer/Consulting Engineer Construction Management /Field Inspection Services: Construction Inspector I-IL... Senior Construction Inspector. Construction Inspector (*Prevailing Wage). Construction Office Tech I-III. Assistant Resident Engineer I-II.. Resident Engineerl- III Senior Resident Engineer Director. Principal Construction Manager. Principal Support Services: Office Assistant. Project Assistant I- III.. *Prevailing Wage: Right to Revisions:  State established prevailing wage rates will apply to some services based on state law, prevailing Wallace Group reserves the right to revise our standard billing rates on an annual basis, personnel Fees for expert witness preparation, testimony, court appearances, or depositions will be billed at the rate of $400 an hour. If required to meet schedule requests, overtime on a project will be billed Direct expenses will be invoiced to the client and al handling charge of 15% may be added.  wage rates are: subject to change over time and geographic location.  classifications may be added as necessary. Additional Professional Services:  at 1.5 times the employee's typical hourly rate.  Direct Expenses:  Sample direct expenses include, but are not limited to the following:  travel expenses delivery/copy services Invoicing and Interest Charges:  sub-consultant services mileage (per IRS rates)  agency fees other direct expenses  Invoices are submitted monthly on an accrued cost basis. A finance charge of 1.5% per month may  be assessed on all balances that are thirty days past due.  WALLACE GROUP 2024 Standard Billing Rates    1.8 Timeliness of Performance  The CLIENT and CONSULTANT are aware that many factors outside the CONSULTANT'S control may affect the CONSULTANT'S ability to complete the services to be provided under this Agreement. The CONSULTANT will perform these services with Anyt term or provision of this Agreement found to be invalid under any applicable statute or rule of law shall be deemed Notwithstanding completion or termination of this Agreement for any reason, all rights, duties and obligations of the parties to this Agreement shail survive such completion or termination and remain in1 full force and effect until fulfilled. ALL legal causes of action between the parties to this Agreement shall accrue and any applicable statutes of repose or limitation shall begin to run not later than the date of Substantial Completion. If the act or failure to act complained of occurs after the date of Substantial Completion, then the date of final completion shall be used, but in no event shall any statute of repose or limitation begin to run any! later than the date the CONSULTANT'S services are completed or terminated. The CLIENT shall promptly report to the CONSULTANT any defects or suspected defects in the CONSULTANT'S services of which the CLIENT becomes aware, so that the CONSULTANT may take measures to minimize the consequences of sucha a defect. The CLIENT further agrees toi impose a similar notification requirement on all Contractors ini its CLIENT/Contractor contract and shall require all subcontracts at any! level to contain al like requirement. Failure by the CLIENT and the CLIENT'S Contractors or Subcontractors to notify the CONSULTANT shall relieve the CONSULTANT of the costs or remedying the defects above the sum such remedy would have cost had prompt notification been given when such defects were first discovered. Neither the professional activities of the CONSULTANT, nor the presence of the CONSULTANT or its employees or Subconsultants at a construction/project site, shall relieve the General Contractor of its obligations, duties and responsibilities including, but not limited to, constructions means, methods, sequence, techniques or procedures necessary for performing, superintending and coordinating the Worki in accordance with contract documents and any health or safety precautions required by any regulatory agencies. The CONSULTANT andi its personnel have no authority to exercise any control over any construction Contractor or its employees in connection with their work or any health or safety programs or procedures. The CLIENT agrees that the General Contractor shall be solely responsible for jobsite safety, and warrants that this intent shall be carried out int the CLIENT'S contract with the General Contractor. The CLIENT also agrees that the CLIENT, the CONSULTANT and the CONSULTANT'S! Subconsultants shall be indemnified by the General Contractor and shall be made Neither CLIENT nor CONSULTANT shall assign its interest int this agreement without the written consent of the other. CONSULTANT may not subcontract any portion of the work to be performed hereunder without such consent. Any delay or default in the performance of any obligation of CONSULTANT under this agreement resulting from any cause(s) beyond CONSULTANTS reasonable control shall not be deemed a breach of this agreement. The occurrence of any such event shall suspend the obligations of CONSULTANT as long as performance is delayed or prevented thereby, and the fees due (a) Not withstanding any other provision of this Agreement ande except for the provisions of (b) and (c), ifa dispute arises regarding CONSULTANTS fees pursuant to this contract, andi if the fee dispute cannot be settled by discussions between CLIENT and CONSULTANT, both the CLIENT and CONSULTANT agree to attempt to settle the fee dispute by mediation through the American Arbitration. Association (or other mediation service) before recourse to arbitration. If mediation does not resolve the fee dispute, such dispute shall be: settled by binding arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered byt the Arbitrator(s) may! be (b) Subdivision (a) does not preclude or limit CONSULTANT'S right to elect tot file an action for collection of fees if the (c) Subdivision (a) does not preclude or limit CONSULTANT'S right to elect to perfect or enforce applicable mechanics lien  reasonable diligence and expediency consistent with sound professional practices. omitted and the remainder of this Agreement shall remain int full force and effect.  1.9 Severability 1.10 Survival  1.11Statutes of Repose and Limitation  1.12 Defects in Service  1.13, Jobsite Safety  additional insured under the General Contractor's policies of general liability insurance.  1.14 Assignment:. Subcontracting 1.15 Force Majeure  hereunder shall be equitably adjusted.  1.16 Disputes  entered in any court having jurisdiction thereof.  amount in dispute is within the jurisdiction of the small claims court.  remedies.  WALIACEGROUP  Page 2 of6    3.7 Disputed Invoices  Ifthe CLIENT objects to any portion of any invoice, the CLIENT shall 50 notifyt the CONSULTANT in writing within ten (10) days of receipt of the invoice. The CLIENT: shall identify in writing the specific cause of the disagreement and the amount in dispute and: shall pay that portion of thei invoice not in dispute in accordance with the other payment terms of this Agreement. Any dispute over invoiced amounts due which cannot be resolved within thirty (30) calendar days after presentation ofi invoice by direct negotiation between the parties shall be resolved within forty-five (45) calendar days in accordance with the Dispute Resolution provision of this Agreement. Interest as stated above shall be paid by the CLIENT on all disputed invoice amounts that are subsequently resolved int the CONSULTANT'S favor and shall be calculated on the unpaid Payments to the CONSULTANT shall not be withheld, postponed or made contingent on the construction, completion or success of the project or upon receipt by the CLIENT of offsetting reimbursement or credit from other parties who may have caused additional services ore expenses. No withholdings, deductions or offsets shall be made from the CONSULTANT'S compensation for any reason unless the CONSULTANT has been found to be legally liable for such amounts. CONSULTANT reserves the right to require payment in advance for work estimated to be done during a given billing period. CONSULTANT, without any liability to CLIENT, reserves the right to withhold any services and work products herein contemplated pending payment of CLIENTS outstanding indebtedness or advance payment as required by CONSULTANT. Where work is performed on a reimbursable basis, budget may be increased by amendment to complete the Scope of Services. CONSULTANT is not obligated to provide services ine excess of the authorized budget.  balance from the invoice date. 3.8 Payments to the CONSULTANT  3.9Advance Payment: Withholding Work Product  ARTICLE 4. SERVICES, ADDITIONAL SERVICES, AND AMENDMENTS  4.1Definitions  Services and work products not expressly included with those specified in this agreement, as determined by CONSULTANT, are not covered by this agreement. Such services and work products will be provided only upon compliance with the Any construction inspection or testing provided by CONSULTANT is for the purpose of determining the Contractor's compliance with the functional provisions of the project specifications only. CONSULTANT in no way guarantees or insures Contractor's work nor assumes responsibility for methods or appliances used by the Contractor forj job site safety or for Contractor's compliance with laws and regulations. CLIENT agrees that in accordance with generally accepted construction practices the construction Contractor will be required to assume sole and complete responsibility for job site conditions during the course of construction of the project including safety of all persons and property and that this responsibility shall CONSULTANT makes no representations concerning soil conditions, andi is not responsible for any liability that may arise out oft the making or failure to make soil surveys, or sub-surface soil tests, or general soil testing. Iti is the CLIENT'S responsibility In providing opinions of probable construction cost, the CLIENT understands that the CONSULTANT has no control over cost or availability of labor, equipment or materials, or over market conditions or the Contractor's method of pricing, and that the CONSULTANT'S opinions of probable construction costs are made on the basis of the CONSULTANT'S professional judgment and experience. CONSULTANT makes no warranty, express or implied, that bids or negotiated cost of the Work will not vary Additional services or work products requiring an adjustment of CONSULTANTS original estimated budget or fixed fee will be provided at CLIENT'S request upon execution of a written amendment to this agreement expressly referring to the same and  procedures set forthi in Article 4.5 of this Agreement. 4.2 Services During Construction  be continuous and not be limited to normal working hours.  4.3 Soil Testing  to obtain a soils report upon which report CONSULTANT can rely. 4.4 Opinion of Probable Construction Costs  from the CONSULTANT'S opinion of probable construction cost.  4.5Additiona!: Services signed byl both parties. 5.1 Due to Default 5.2Without Cause that the project is abandoned.  ARTICLE! 5. TERMINATION OF AGREEMENT  This agreement may be terminated by either party upon seven (7) days written notice should the other party fail to substantially perform in accordance with this agreement through no fault of the party initiating the termination. This agreement may be terminated by CLIENT upon at least fourteen (14) days written notice to CONSULTANT in the event  WALLACE GROUP  Page 4 of6    ARTICLE7 7. HAZARDOUS WASTE MATERIALS  7.1 Liability  CONSULTANT hereby states and CLIENT hereby acknowledges that CONSULTANT has no professional liability insurance for claims arising out of the performance of or failure to perform professional services, including, but not limited to the preparation of reports, designs, drawings and specifications, related to the investigation, detection, abatement, replacement, use or specification, or removal of products, materials or processes containing substances including, but not limited to asbestos, toxic or hazardous waste, PCBs, combustible gases and materials, petroleum or radioactive materials (as each of these is definedi in applicable federal statues) or any other substances under any conditions and in: such quantities as would pose as substantial danger to persons or property exposed to such substances at or near the Project site. Accordingly, the CLIENT hereby agrees to bring no claim for negligence, breach of contract indemnity or otherwise against the CONSULTANT, its principals, employees, and agents if such claim, in any way, wouldi involve the CONSULTANT'S services for thei investigation, detection, abatement, replacement, use or specification, or removal of products, materials or processes containing asbestos, asbestos cement pipe, and/or hazardous waste materials. CLIENT further agrees to defend, indemnify and! hold harmless CONSULTANT, its officers, directors, principals, employees and agents from any asbestos and/or hazardous waste material related claims that may be brought by third parties as a result of the services provided by the CONSULTANT pursuant to this agreement except claims caused by the sole negligence or willful misconduct of the CONSULTANT.  ARTICLE 8. OWNERSHIP ANDI REUSE OF DOCUMENTS  8.1 CONSULTANT Ownership  All original papers, documents, drawings, electronic media and other work product of CONSULTANT, and copies thereof, produced by CONSULTANT pursuant tot this agreement shall remain the property of CONSULTANT and may! be used by CONSULTANT without the consent of CLIENT. Upon request and payment of the costs involved, CLIENT is entitled to a copy of In the event the CLIENT, the CLIENT'S Contractors or Subcontractors, or anyone for whom the CLIENT is legally liable makes or permits tol be made any changes to any reports, plans specifications or other construction documents prepared! by the CONSULTANT without obtaining the CONSULTANT'S prior written consent, the CLIENT shall assume full responsibility for the results of such changes. Therefore the CLIENT agrees to waive any claim against the CONSULTANT and to release the CONSULTANT from any liability arising directly or indirectly from such changes. In addition, the CLIENT agrees, to thet fullest extent permitted by! law, toi indemnify and hold harmless the CONSULTANT from any damages, liabilities or costs, including reasonable attorneys' fees and costs of defense, arising from such changes. In addition, the CLIENT agrees toi include in any contracts for construction appropriate language that prohibits the Contractor or any! Subcontractors of anyt tier from making any changes or modifications to the CONSULTANT'S construction documents without the prior written approval of the CONSULTANT and further requires the Contractor to indemnify both the CONSULTANT andt the CLIENT from any liability or Because CADD information stored in electronic form can be modified by other parties, intentionally or otherwise, without notice ori indication of said modifications, CONSULTANT reserves the right to remove all indicia of its ownership and/or involvement in the material from each electronic medium not held in its possession. CLIENT shall retain copies of the work performed by CONSULTANT in CADD1 form only fori information and use by CLIENT for the specific purpose for which CONSULTANT was engaged. Said materials shall not be used by CLIENT, or transferred to any other party, for use in other projects, additions to the current project, or any other purpose for which the material was not strictly intended by CONSULTANT without CONSULTANTS express written permission. Unauthorized modification or reuse of the materials shall be at CLIENT'S sole risk, and CLIENT agrees to defend, indemnify, and hold CONSULTANT harmless, from all claims, injuries, damages, losses, expenses, and attorney's fees arising out of the unauthorized modification or use of these materials.  all papers, documents and drawings provided CLIENT'S account is paid current.  8.2 Document Reuse  cost arising from such changes made without proper authorization. 8.3 Electronic Media Alteration and Reuse  WALIACEGROUP  Page 6 of 6    AVILA BEACH  COMMUNITY SERVICES DISTRICT Post Office Box 309, Avila Beach, CA. 93424  MEMORANDUM  TO: FROM: DATE:  Board of Directors  Brad Hagemann, General Manager November 12, 2024  SUBJECT: Election of] Board Officers for Calendar Year 2025  Director Appointments to Committees  Recommendation:  Elect officers for the calendar year 2025; appoint Directors to standing committees.  Discussion:  At the end ofe each calendar year, it is customary to elect the officers oft the Board and to appoint  committee membership for the upcoming year.  1.  Election of Officers  At this time, it would be appropriate to elect offices for the positions ofl Board President and Vice  President.  The officers for the calendar year of 2024 were as follows:  President Vice President  Pete Kelley Ara Najarian  Nominations should first be taken from the floor for the office of President; nominations do not require a second. After there are no further nominations, a motion should bei made and seconded to close nominations. A vote is then taken for each candidate. The candidate receiving the most votes, and a majority of votes of the quorum present, is elected to office. The office of Vice  President should be elected in the same manner as President.    2.  Committee. Appointments  At the beginning of the calendar year, it is customary to appoint members oft the Board to Listed below are the CSD standing committees for the 2024 calendar year; additionally, Ad-Hoc  committees for the coming year.  committees may be designated, as necessary.  Standing Committees  Finance: Personnel: Facilities: Drought:  Directors Kristin Berry, Ara Najarian Directors Pete Kelley, John Janowicz Directors Petel Kelley, Howie Kennett Directors Ara Najarian, John Janowicz