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Copies of the staff reports or other documentation relating to each item of business referred to on the Agenda
are on file in the office of the City Clerk and are available for public inspection on our website,
www.atascadero.org. Contracts, Resolutions and Ordinances will be allocated a number once they are
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be noted in the Minutes and available for review by contacting the City Clerk's office. All documents will be
available for public inspection by appointment during City Hall business hours.
CITY OF ATASCADERO CITY COUNCIL AGENDA
MEETING INFORMATION:
The City Council meeting will be held in the City Council Chambers and in-person attendance will be available
at that location.
HOW TO OBSERVE THE MEETING REMOTELY:
To observe remotely, residents can livestream the meeting on Zoom, and listen live on KPRL Radio 1230AM and
99.3FM. The video recording of the meeting will be available through the City’s website and on the City’s YouTube
Channel. To observe remotely using the Zoom platform please visit:
HOW TO SUBMIT PUBLIC COMMENT:
Public comment may be provided in-person.
Written public comments are accepted at cityclerk@atascadero.org. Comments should identify the Agenda Item
Number in the subject line of the email. Such comments will be forwarded to the City Council and made a part of the
administrative record. To ensure distribution to the City Council before consideration of an item, please submit
comments not later than 12:00 p.m. the day of the meeting. All correspondence will be distributed to the City Council,
posted on the City’s website, and be made part of the official public record of the meeting. Please note, comments will not
be read into the record. Please be aware that communications sent to the City Council are public records and are subject
to disclosure pursuant to the California Public Records Act and Brown Act unless exempt from disclosure under applicable
law. Communications will not be edited for redactions and will be printed/posted as submitted.
AMERICANS WITH DISABILITIES ACT ACCOMMODATIONS:
Any member of the public who needs accommodations should contact the City Clerk’s Office at
cityclerk@atascadero.org or by calling 805-470-3400 at least 48 hours prior to the meeting or time when
services are needed. The City will use their best efforts to provide reasonable accommodations to afford as
much accessibility as possible while also maintaining public safety in accordance with the City procedure for
resolving reasonable accommodation requests.
DISCLOSURE OF CAMPAIGN CONTRIBUTIONS:
California Government Code section 84308 (“Levine Act”) requires a party to or participant in a proceeding
involving a license, permit, or other entitlement, including all contracts other than competitively bid, labor, or
personal employment contracts, to disclose any contribution of more than $500 that the party or participant (or
their agent) has made to a member of the City Council within the prior 12 months. The City Council Member(s)
who receive such a contribution are disqualified and not able to participate in the proceedings and are also
required to disclose that fact for the official record of the subject proceedings. Disclosures must include the
amount of the campaign contribution and identify the recipient City Council Member and may be made either
in writing to the City Clerk before the agenda item or by verbal disclosure during consideration. The Levine Act
also prohibits, during the proceeding and for 12 months following a final decision, a party to or participant in
(or their agent) a proceeding involving a license, permit, or other entitlement, including all contracts other than
competitively bid, labor, or personal employment contracts, from making a contribution of more than $500 to
any member of the City Council or anyone running for City Council.
City Council agendas and minutes may be viewed on the City's website:
www.atascadero.org/agendas
CITY OF ATASCADERO
REGULAR CITY COUNCIL MEETING
AGENDA
Wednesday, November 12, 2025, 5:00 p.m.
Wednesday, November 12, 2025, 6:00 p.m.
City Hall Council Chambers, Fourth Floor
6500 Palma Avenue, Atascadero, California
Pages
A.CLOSED SESSION (5:00 p.m.)
1.ROLL CALL
Mayor Bourbeau
Mayor Pro Tem Dariz
Council Member Funk
Council Member Newsom
Council Member Peek
2.CLOSED SESSION - PUBLIC COMMENT
3.COUNCIL LEAVES CHAMBERS TO BEGIN CLOSED SESSION
4.CLOSED SESSION - CALL TO ORDER
a.Conference with Real Property Negotiators
Government Code Sec 54956.8
Real Property: 6105 Olmeda Avenue (APN 029-091-001 - State
of California Property), Atascadero, CA 93422
Agency Negotiator: James R. Lewis, City Manager
Negotiating Parties: State of California
Subject of Negotiations: Purchase price and/or terms of
payment
b.Conference with Real Property Negotiators
Government Code Sec 54956.8
Real Property: Capistrano Avenue (APN is 029-105-014 - Sean
Knoph property), Atascadero, CA 93422
Agency Negotiator: James R. Lewis, City Manager
Negotiating Parties: Sean Knoph
Subject of Negotiations: Purchase price and/or terms of
payment
c.Conference with Legal Counsel - Initiation of Litigation
Government Code Sec. 54956.9(d)(4): 1 potential case
5.CLOSED SESSION - ADJOURNMENT
6.CLOSED SESSION REPORT
B.REGULAR SESSION - CALL TO ORDER
C.PLEDGE OF ALLEGIANCE
Council Member Peek
D.CONSENT CALENDAR
(All items on the consent calendar are considered routine and non-controversial
by City staff and will be acted upon by a single action of the City Council unless
otherwise requested by an individual Council Member for separate
consideration. Public comment on Consent Calendar items will be invited prior
to action on the Calendar.)
1.City Council Draft Minutes - October 28, 2025 5
Recommendation: Council approve the October 28, 2025, City Council
Regular Meeting Minutes [City Clerk]
2.Design Award for 2026 Measure F-14 Pavement Rehabilitation Project 9
Fiscal Impact: Estimated expenditures of $121,440 from Sales Tax
Measure F-14 Funds for the design phase of the 2026 F-14 Project. The
adopted budget includes $50,000 in fiscal year 24/25, $150,000 in fiscal
year 25/26, and $1,610,000 in fiscal year 26/27, for a total project budget
of $1,810,000..
Recommendation: Council award a professional services agreement to
Rick Engineering Company for $121,440 to provide design engineering
and prepare bidding documents for the 2026 Measure F-14 Pavement
Rehabilitation Project (City Project No. C2025R01) [Public Works]
3.Appropriation of Tree Plant Fund for Installation of the Monarch &
Pollinator Native Garden Corridor Project
13
Fiscal Impact: Approval of this recommendation will result in the
appropriation of $88,000 from the Tree Plant Fund toward the installation
of the Monarch & Pollinator Native Garden Corridor Project.
Recommendation: Council authorize the Director of Administrative
Services to appropriate $88,000 in Tree Plant Funds for installation of the
Monarch & Pollinator Native Garden Corridor Project for Fiscal Year
2025/2026. [Community Services and Promotions]
4.Authorization to Execute Loan Documentation 15
Fiscal Impact: All funds associated with the loans shall be appropriated
from the City’s In Lieu Low/Moderate in the form of soft loans. The
$400,000 loan will be for a term of 55 years and the $527,573 will be for
a term of 22 years. Both loans would be issued with a simple interest rate
of 3%.
Recommendation: Council adopt Draft Resolution authorizing the City
Manager to execute necessary loan contracts on behalf of the City for the
People’s Self-Help Housing Del Rio Ridge Affordable Housing Project in
substantially the form presented. [Community Development]
E.UPDATES FROM THE CITY MANAGER
(The City Manager will give an oral report on any current issues of concern to
the City Council.)
F.COMMUNITY FORUM
(This portion of the meeting is reserved for persons wanting to address the
Council on any matter not on this agenda and over which the Council has
Page 2 of 77
jurisdiction. Speakers are limited to three minutes. Please state your name for
the record before making your presentation. Comments made during
Community Forum will not be a subject of discussion. A maximum of 30 minutes
will be allowed for Community Forum, unless changed by the Council. Any
members of the public who have questions or need information may contact the
City Clerk’s Office, between the hours of 8:30 a.m. and 5:00 p.m. at (805) 470-
3400, or cityclerk@atascadero.org.)
G.PUBLIC HEARINGS
1.Order to Vacate a Portion of Public Right-of-Way at 11285 San Marcos
Road
54
Fiscal Impact: None
Recommendation: Council adopt Draft Resolution ordering the vacation
of a portion of public right-of-way at 11285 San Marcos Road based upon
findings consistent with the State of California Streets and Highways
Code. [Public Works]
2.2026 Community Development Block Grant Draft Recommendations 61
Fiscal Impact: Approval of Atascadero’s total 2026 CDBG allocation
would result in the estimated revenue and expenditure of $176,247 of
CDBG funds.
Recommendation: Council develop and adopt draft recommendations for
the 2026 Community Development Block Grant (CDBG) funding cycle.
[Public Works]
H.MANAGEMENT REPORTS
1.City Manager’s Task Force on Wastewater Report and WWTP Project
Update
66
Fiscal Impact: The recommendation for Council associated with this
report does not have a direct fiscal impact.
Recommendation: Council review and file report. [Public Works]
2.Wastewater Treatment Plant Design Engineering Contract Award 73
Fiscal Impact: Adopting staff recommendations will result in the
expenditure of $520,840 from budgeted Wastewater Funds, and potential
future expenditures up to $9,228,651 as approved by Council for future
phases of design work. The adopted FY2025-2027 budget includes
$2,000,000 in FY2025/2026 and $4,000,000 in FY2026/2027 from the
Wastewater Fund for this project.
Recommendation: Council:
1. Award a professional services agreement for up to $9,749,491 to
Black & Veatch for Design Engineering for the Atascadero Water
Reclamation Facility Replacement Project (City Project No. C2020W03)..
2. Authorize Black & Veatch to proceed with Phase 1 work (Process
Selection and Preliminary Cost Estimate) for the Atascadero Water
Reclamation Facility Replacement Project for $520,840.[Public Works]
I.COUNCIL ANNOUNCEMENTS AND COMMITTEE REPORTS
(On their own initiative, Council Members may make a brief announcement or a
brief report on their own activities. The following represent standing committees.
Informative status reports will be given, as felt necessary):
Page 3 of 77
Mayor Bourbeau
1. City Selection Committee
2. County Mayor’s Round Table
3. Integrated Waste Management Authority (IWMA)
4. Central Coast Community Energy (3CE)
Mayor Pro Tem Dariz
1. Air Pollution Control District
2. California Joint Powers Insurance Authority (CJPIA) Board
3. Community Action Partnership of San Luis Obispo (CAPSLO)
4. Visit SLO CAL Advisory Committee
Council Member Funk
1. Atascadero Basin Ground Water Sustainability Agency (GSA)
2. Design Review Committee
3. Homeless Services Oversight Council
4. REACH SLO Advisory Commission
Council Member Newsom
1. City of Atascadero Finance Committee
2. City / Schools Committee
3. League of California Cities – Council Liaison
4. SLO Council of Governments (SLOCOG)
5. SLO Regional Transit Authority (RTA)
Council Member Peek
1. City of Atascadero Finance Committee
2. City/Schools Committee
3. Design Review Committee
4. SLO County Water Resources Advisory Committee (WRAC)
J.INDIVIDUAL DETERMINATION AND / OR ACTION:
(Council Members may ask a question for clarification, make a referral to staff or
take action to have staff place a matter of business on a future agenda. The
Council may take action on items listed on the Agenda.)
1. City Council
2. City Clerk
3. City Treasurer
4. City Attorney
5. City Manager
K.ADJOURNMENT
Page 4 of 77
11/12/25 | Item D1
Atascadero City Council
October 28, 2025
Page 1 of 4
CITY OF ATASCADERO
CITY COUNCIL MEETING
DRAFT MINUTES
October 28, 2025, 6:00 p.m.
City Hall Council Chambers, Fourth Floor
6500 Palma Avenue, Atascadero, California
_____________________________________________________________________
A. REGULAR SESSION - CALL TO ORDER
Mayor Bourbeau called the meeting to order at 6:00 p.m.
B. PLEDGE OF ALLEGIANCE
Mayor Bourbeau led the Pledge of Allegiance.
C. ROLL CALL
Present: Mayor Bourbeau, Mayor Pro Tem Dariz, Council Member Funk,
Council Member Newsom (6:04 pm), Council Member Peek
Absent: None
Staff Present:
Assistant City Manager/City Clerk Lara Christensen, City
Attorney Dave Fleishman, Deputy Director of Administrative
Services Cindy Chavez, Public Works Director Nick DeBar,
Community Development Director Phil Dunsmore, Fire Battalion
Chief Dave Van Son, Police Chief Dan Suttles, Deputy City
Manager - IT Luke Knight, Deputy City Clerk Alyssa Slater,
Community Services and Promotions Director Terrie Banish,
Planning Manager Kelly Gleason
D. CONSENT CALENDAR
(All items on the consent calendar are considered routine and non-controversial
by City staff and will be acted upon by a single action of the City Council unless
otherwise requested by an individual Council Member for separate consideration.
Public comment on Consent Calendar items will be invited prior to action on the
Calendar.)
Page 5 of 77
11/12/25 | Item D1
Atascadero City Council
October 28, 2025
Page 2 of 4
1. City Council Draft Minutes - October 14, 2025 Regular Meeting
Recommendation: Council approve the October 14, 2025, City Council
Draft Regular Meeting Minutes. [City Clerk]
2. September 2025 Accounts Payable and Payroll
Fiscal Impact: $6,059,350.06
Recommendation: Council approve certified City accounts payable, payroll
and payroll vendor checks for September 2025. [Administrative Services]
3. Conflict of Interest Code – Biennial Review
Fiscal Impact: None
Recommendation: Council adopt Draft Resolution, updating and amending
the Conflict of Interest Code for the City of Atascadero. [City Clerk]
4. Update Salary Schedule and Staff Title
Fiscal Impact: The staffing adjustment in Public Works will have a financial
impact of an additional $11,000 -$13,000 per year. The department can
use salary and other budget savings to cover the additional costs.
Recommendation: Council
1. Authorize the City Manager to reclassify employee into appropriate
title classification of Economic Development Manager.
2. Authorize the City Manager to hire a Public Works Supervisor - Parks,
while having an extra Maintenance Worker II.
3. Amend the fiscal year 2025-2026 and 2026-2027 monthly salary
schedules to correct existing positions.
4. Adopt Draft Resolution for Non-Represented Professional and
Management Workers and Confidential Employees. [Human Resources]
Mayor Bourbeau opened the Public Comment period.
Mayor Bourbeau closed the Public Comment period.
Motion by Funk
Second by Dariz
1. Approve Consent Calendar (#D3: Resolution No. 2025-062) (#D4
Resolution No. 2025-063)
AYES (4): Mayor Bourbeau, Mayor Pro Tem Dariz, Council Member Funk, and
Council Member Peek
ABSENT (1): Council Member Newsom
Motion Passed (4 to 0)
Page 6 of 77
11/12/25 | Item D1
Atascadero City Council
October 28, 2025
Page 3 of 4
E. UPDATES FROM THE CITY MANAGER
Assistant City Manager/City Clerk Christensen gave an update on projects and
issues within the City.
F. COMMUNITY FORUM
The following persons spoke: Jennifer Adams (Lumina Alliance CEO), Linda
Acaida (exhibit A), Jeannine Jacobs, Geoff Auslen
G. MANAGEMENT REPORTS
1. Draft 2045 Atascadero General Plan
Fiscal Impact: The Draft Plan will be analyzed for fiscal impact based on
the preferred land use alternative and guiding policies. A draft and final
analysis will be presented during the public review period and prior to Plan
adoption.
Recommendation: Council receive an overview of the Draft 2045 General
Plan, provide comments on the Draft Plan, and receive an overview of
next steps. [Community Development]
Community Development Director Dunsmore presented this item. Director
Dunsmore, and Planning Manager Gleason answered questions from the
Council.
PUBLIC COMMENT:
Mayor Bourbeau opened the Public Comment period.
The following persons spoke on this item: Maddie Payne, Jeff Snyder, Jean Collins,
Deborah Hintergard, Sally Salino
Mayor Bourbeau closed the Public Comment period.
Mayor Bourbeau recessed the Meeting at 8:22 P.M.
Mayor Bourbeau reconvened the Meeting with all present at 8:30 P.M.
Council Member Newsom provided comments on the Draft 2045 General Plan and
left the meeting at 8:32 pm
Council received an overview of the Draft 2045 General Plan, provided comments
on the Draft Plan, and received an overview of next steps.
Page 7 of 77
11/12/25 | Item D1
Atascadero City Council
October 28, 2025
Page 4 of 4
H. COUNCIL ANNOUNCEMENTS AND COMMITTEE REPORTS
The following Council Members gave brief update reports on their committees
since their last Council meeting:
Mayor Bourbeau
1. County Mayor’s Round Table
2. Integrated Waste Management Authority (IWMA)
3. Central Coast Community Energy (3CE)
4. Garbage truck ride-along
Council Member Peek
1. City/Schools Committee – met with Council Member Newsom and
Superintendent Bennett ahead of next meeting.
I. INDIVIDUAL DETERMINATION AND / OR ACTION:
None
J. ADJOURNMENT
Mayor Bourbeau adjourned the meeting at 9:38 p.m.
MINUTES PREPARED BY:
______________________________________
Alyssa Slater
Deputy City Clerk
APPROVED: 10/28/2025
Exhibit A: Children’s Health Defense Article
Page 8 of 77
CITY OF ATASCADERO
CITY COUNCIL STAFF REPORT Item D2
Department: Public Works
Date: 11/12/25
Placement: Consent
TO: JAMES R. LEWIS, CITY MANAGER
FROM: NICK DE BAR, DIRECTOR OF PUBLIC WORKS/CITY ENGINEER
PREPARED BY: JOE MURPHY, ASSOCIATE CIVIL ENGINEER
SUBJECT: Design Award for 2026 Measure F-14 Pavement Rehabilitation Project
RECOMMENDATION:
Council award a professional services agreement to Rick Engineering Company for $121,440 to
provide design engineering and prepare bidding documents for the 2026 Measure F-14 Pavement
Rehabilitation Project (City Proj. No. C2025R01)
DISCUSSION:
BACKGROUND
Sales Tax Measure F-14 was approved by voters in November 2014 to fund the repair,
maintenance, and rehabilitation of City-maintained local roadways with a one-half cent sales tax
over twelve years. A list of projects to be funded with Measure F-14 revenue is developed each
budget cycle by employing the Critical Point Management technique with the City’s Pavement
Management Program. The below list of roadway segments were selected by this process and
included with the 2026 Measure F-14 Pavement Rehabilitation Project (2026 F-14 Project). A
project map is also attached for reference.
Road Segments in 2026 Measure F-14 Pavement Rehabilitation Project
Road Name Beginning Location Ending Location Length (ft) Area (sq ft) 2024 PCI
Andrita Rd Casanova Ave Sierra Vista Rd 1,250 27,500 45
Monterey Ct Monterey Rd End 575 20,125 43
Ramage Dr Portola Rd End 370 11,470 30
Santa Ynez Ave Atascadero Ave San Andres Ave 1,235 30,875 39
Venado Ave Ardilla Ave Chauplin St 835 17,535 38
All segments in the above list are in the western portion of the City, part in the central-west and
part in the northern-west. Venado Avenue and Andrita Road are rural road segments that are
narrow, hilly, and have little or no edge improvements or ADA features. Santa Ynez Avenue is a
longer suburban residential street with no edge improvements. Monterey Court and Ramage
Drive are short, dead-end residential streets with edge improvements on both sides, and Ramage
Drive will most likely need ADA ramps installed at its intersection with Portola Road to be brought
into compliance with current ADA requirements.
Page 9 of 77
11/12/25 | Item D2 | Staff Report
ANALYSIS
A Request for Proposals (RFP) was issued for the design phase of the 2026 F-14 Project in October
2025 with a work scope that includes topographic surveying, survey monument research,
pavement engineering analysis, preparation of construction plans, specifications, cost estimates
(Plans, Specifications, and Estimates), and providing engineering assistance during the bid
process. Five proposals were received from Rick Engineering Company (Rick), AKA Engineering
(AKA), North Coast Engineering (NCE), Wallace Group (WF), and Above Grade Engineering (AGE),
all with local offices in San Luis Obispo County. All five are qualified consultants with experience
on similar projects.
A technical selection committee independently reviewed and scored each proposal considering
experience with similar projects, responsiveness to City needs, experience of key personnel, and
other factors. All proposals demonstrated the ability to complete the work, but Rick Engineering
provided the best overall proposal for this project and is being recommended by the Public Works
Director/City Engineer. Rick Engineering has a successful track record with the City, including
completing design work for roughly half of the previous F-14 projects, including the 2025 F-14
Project. A detailed fee estimate worksheet was submitted with Rick Engineering’s proposal, and
staff believes Rick Engineering’s fee is reasonable considering the extensive pavement testing,
topographic surveying and intersection design that is needed. If awarded, Rick Engineering’s
compensation will be based upon actual labor hours worked plus reimbursable expenses and
subconsultant fees.
Design work is anticipated to take approximately six months to complete. Staff anticipates a
public bid around May 2026 with construction occurring in the June through November 2026
timeframe.
FISCAL IMPACT:
Approving staff’s recommendations in this report will result in estimated expenditures of
$121,440 from Sales Tax Measure F-14 Funds for the design phase of the 2026 F-14 Project. The
adopted budget includes $50,000 in fiscal year 24/25, $150,000 in fiscal year 25/26, and
$1,610,000 in fiscal year 26/27, for a total project budget of $1,810,000.
ESTIMATED EXPENDITURES
Project Design (Rick Engineering, PEI, and JHLS) & Staff Time $185,000
Construction Contract $1,250,000
Construction Inspection, Coordination, and Support @ 10% $125,000
Construction Contingency @20% $250,000
Total: $1,810,000
PROPOSED FUNDING
Sales Tax Measure F-14 Fund: 2026 Pavement Rehab. Project $1,810,000
Total: $1,810,000
Page 10 of 77
11/12/25 | Item D2 | Staff Report
ALTERNATIVES TO THE STAFF RECOMMENDATION
Council can direct staff to resolicit for design engineering services for the project, but staff does
not recommend this alternative since the top proposals received were highly qualified and were
very competitive.
REVIEWED BY OTHERS:
This item has been reviewed by the Administrative Services Director.
REVIEWED AND APPROVED FOR COUNCIL AGENDA
James R. Lewis, City Manager
ATTACHMENT:
1. 2026 F-14 Project Location Map
Page 11 of 77
2026 F-14 PMP PROJECT
EXHIBIT
ROADWAY REPAIR LOCATIONS
DRAWN BY:
DATE:
SCALE:
PAGE NO:1
1" = 2000'
10/2/2025
J. MURPHY
OF 1
LEGEND:
2026 REHABILITATION SEGMENT
VENADO AVE
RAMAGE DR
MONTEREY CT
SANTA YNEZ AVE
ANDRITA RD
10/28/25 | Item D2 | Attachment 1
Page 12 of 77
CITY OF ATASCADERO
CITY COUNCIL STAFF REPORT Item D3
TO: JAMES R. LEWIS, CITY MANAGER
FROM: TERRIE BANISH, DIRECTOR COMMUNITY SERVICES & PROMOTIONS
PREPARED BY: TERRIE BANISH, DIRECTOR COMMUNITY SERVICES & PROMOTIONS
SUBJECT: Appropriation of Tree Plant Fund for Installation of the Monarch &
Pollinator Native Garden Corridor Project
RECOMMENDATION:
Council authorize the Director of Administrative Services to appropriate $88,000 in Tree Plant
Funds for installation of the Monarch & Pollinator Native Garden Corridor Project for Fiscal Year
2025/2026.
DISCUSSION:
Over the past two years, the City and the Central Coast Zoo Atascadero have been working on a
variety of conservation efforts which include support and recovery of the Monarch butterflies and
pollinator populations. These conservation efforts are a key part of maintaining status as an AZA
credentialed institution. One such opportunity has been identified at “the Oasis,” the area
between Highway 41 southbound off-ramp and the Chevron station. This site has been selected for
the Monarch & Pollinator Native Garden Corridor Project due to its visibility, accessibility, and ideal
location approximately halfway between Monterey and Pismo Beach, serving as an important “rest
stop” for migrating Monarchs and other pollinators.
In addition to its ecological benefits, the project will contribute to beautification of a main corridor
area in the City, enhance the appearance of nearby neighborhoods and businesses, and create a
more inviting and walkable environment. Additionally, the project will also serve as a
demonstration garden with signage and native trees and plants modeling for residents what a
native tree and plant habitat could look like on their own property. Such a demonstration garden
exists outside of the Pavilion though it is much smaller in scope. The project also aligns with the
City’s ongoing efforts to promote the Central Coast Zoo Atascadero and strengthen our
community’s identity as a destination committed to sustainability and environmental stewardship.
Department: Community
Services &
Promotions
Date: 11/12/25
Placement: Consent
Page 13 of 77
11/12/25 | Item D3 | Staff Report
To bring this project to life, the City has worked to obtain bids from local landscape companies
including Armet’s Landscape, Madrone Landscapes and Rainscape SLO. Madrone Landscapes came
in with the lowest bid and worked with staff on a comprehensive program to install the pollinator
garden with a sponsorship component including promotional signage, in turn for a five-year
maintenance plan from the landscape company to ensure the area remains vibrant and well-
maintained. In addition, the Master Gardeners volunteer organization that works closely with the
Zoo have provided a complementary concept plan. This plan features native shrubs, grasses, and
pollinator-friendly plants, along with boulders, ornamental fencing, and decorative mulch. The
location will also include directional signage for the Central Coast Zoo Atascadero as well as
promotional signage highlighting Madrone Landscapes.
Importantly, this project will also improve public visibility and maintenance of the site, helping
deter future unauthorized encampments or debris accumulation in the area. By transforming this
corridor into an active, well-landscaped, and regularly maintained space, the City will both enhance
safety and create a welcoming, environmentally responsible gateway along Highway 41.
If approved, implementation of the Monarch & Pollinator Native Garden is expected to begin within
the next month. The total project cost of $88,000 includes site preparation and installation of
plants, mulch, boulders, fencing, irrigation, and necessary signage. The concept plan, which
outlines plant selection and layout, was generously provided at no cost by the Master Gardeners.
Additionally, a 5-year maintenance plan is included through the Madrone Landscape sponsorship
program.
FISCAL IMPACT:
Approval of this recommendation will result in the appropriation of $88,000 from the Tree Plant
Fund toward the installation of the Monarch & Pollinator Native Garden Corridor Project. As the
project will also serve as a demonstration garden for native trees and plants and preserves a natural
habitat and tree planting area, use of Tree Plant Funds are appropriate.
REVIEWED BY OTHERS:
This item has been reviewed by Director Administrative Services.
REVIEWED AND APPROVED FOR COUNCIL AGENDA
James R. Lewis, City Manager
ATTACHMENT(S):
None.
Page 14 of 77
CITY OF ATASCADERO
CITY COUNCIL STAFF REPORT Item D4
Department: Community
Development
Date: 11/12/2025
Placement: Consent
TO: JAMES R. LEWIS, CITY MANAGER
FROM: PHIL DUNSMORE, COMMUNITY DEVELOPMENT DIRECTOR
PREPARED BY: ERICK GOMEZ, ASSOCIATE PLANNER
SUBJECT: Authorization to Execute Loan Documentation
RECOMMENDATION:
Council adopt Draft Resolution authorizing the City Manager to execute necessary loan contracts
on behalf of the City for the People’s Self-Help Housing Del Rio Ridge Affordable Housing Project
in substantially the form presented.
REPORT IN BRIEF:
The Del Rio Ridge Affordable Housing Project is an approved apartment complex comprised of
forty-one (41) deed-restricted affordable apartment units, one (1) caretaker unit, and a
community building that will be constructed on a vacant 1.95-ac property located at 2433 El
Camino Real (049-151-056). The City has committed to appropriate $927,573 from the City’s In
Lieu Low/Moderate Income Housing Fund for the project over two separate loans. City Staff has
coordinated with People’s Self-Help Housing Corporation on developing the attached associated
documents for review and approval by City Council and execution by the City Manager’s Office
and the Developer. In that the forms may be subject to change as the project moves closer to
funding and construction, the approval sought from Council is for approval of the loan documents
substantially in the form presented tonight. The overall loan amount would not change, but there
may be other document changes necessary to ensure timely funding of the project by other
funding sources. If, in the opinion of staff, such changes are not material and do not otherwise
conflict with the policy direction given by Council, staff would like to be able to approve the
changes without returning to Council.
BACKGROUND
The Project was reviewed and endorsed by the Design Review Committee on September 25, 2019.
At their May 26, 2020 meeting, the Council approved allocation of funds via $400,000 loan with
a 55-year term to be used towards general development costs associated with the project. At
their October 14, 2025 meeting, the Council approved allocation of an additional $527,573 loan
with a 22-year term to be used towards Development Impact Fees. In the alternative, PSHH has
indicated that it may use the $527,573 loan for construction costs, and pay the impact fees at the
time the certificate of occupancy issues for the project out of its construction loan financing to
save on interest costs during the course of construction. This would not affect the City’s security
in the property or the loans, but it is slightly different in terms of the arrangement presented to
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Council on October 14. The loan term would still be 22 years for that portion of the loan, however.
Both loans will have a 3% interest rate. City Staff has coordinated with Peoples’ Self-Help Housing
Corporation on developing the attached loan agreements for review and approval by City Council
and execution by the City Manager’s Office and the Developer. The City has approved Construction
Documents for the Project in October 2025. Project financing is anticipated to be finalized by
December 19, 2025, and construction is expected to begin by January 13, 2026.
The final affordability rates for the apartment units are described in the following table:
UNIT TYPE Very Low & Extremely Low Income Low Income* TOTAL UNITS
30% AMI 45% AMI 50% AMI 55% AMI 60% AMI
1 Bedroom 6 0 0 0 0 6
2 Bedroom 3 9 0 4 8 24
3 Bedroom 4 0 3 1 3 11
Manager’s Unit - - - - - 1
TOTAL UNITS 13 9 3 5 11 42
*Low-income is defined as 80% of AMI. Units listed at 60% of AMI will count as low-income units for the city’s RHNA.
ALTERNATIVE:
Council may refer the item back to staff for additional review and analysis.
FISCAL IMPACT:
All funds associated with the loans shall be appropriated from the City’s In Lieu Low/Moderate in
the form of soft loans. The $400,000 loan will be for a term of 55 years and the $527,573 loan will
be for a term of 22 years. Both loans would be issued with a simple interest rate of 3%.
REVIEWED BY OTHERS:
This item has been reviewed by the City Attorney, Community Development Director, and
Administrative Services Director.
REVIEWED AND APPROVED FOR COUNCIL AGENDA
____________________________________
James R. Lewis, City Manager
ATTACHMENT(S):
1. Loan Agreement
2. Affordable Housing Regulatory Agreement
3. General Loan Promissory Note
4. Impact Fee Loan Promissory Note
5. Deed of Trust
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Development Loan Agreement
LOAN AGREEMENT
THIS LOAN AGREEMENT (“Agreement”) is made and entered into on ____________, 2025 by
Del Rio Ridge, L.P., a California limited partnership (hereinafter referred to as the “Owner”), and the CITY
OF ATASCADERO, a California general law city (hereinafter referred to as the “City”).
WITNESSETH:
WHEREAS, the City operates a revolving loan fund for the purpose of increasing the supply of
affordable housing for very low, low and moderate income residents of the City;
WHEREAS, the Loan (defined below) will be funded using the City’s affordable housing funds;
WHEREAS, City has agreed to provide Owner a loan in the aggregate amount of NINE HUNDRED
TWENTY-SEVEN THOUSAND FIVE HUNDRED SEVENTY-THREE DOLLARS AND NO
CENTS ($927,573.00) (the “Loan”) consisting of the following two tranches (i) $400,000.00 in cash (the
“Housing Loan Proceeds”) and (ii) $527,573.00 for payment of construction costs (the “Construction
Proceeds”) (collectively “Loan Proceeds”) to finance development of real property located at 2433 El
Camino Real, Atascadero, California, 93422, in the County of San Luis Obispo (APN 049-151-056), as
more particularly described in Exhibit A (the “Property”) as a housing project for low income households
in the City of Atascadero;
WHEREAS, the Owner will construct a residential project with forty-two (42) multi-family rental
apartment units consisting of forty-one units affordable to Extremely Low, Very Low and Low Income
Households, plus one manager’s unit (the “Project”) on the Property;
WHEREAS, the Loan Proceeds will be disbursed upon the date of this Agreement for the
development and construction of the Project (the “Funding Date”);
WHEREAS, in addition to this Agreement, the Loan will be evidenced by two promissory notes of
even date herewith, secured by deed of trusts and include a regulatory agreement recorded against the
Property, (all of which documents collectively are the “Loan Documents”);
NOW, therefore, in consideration of the mutual promises, recitals and other provisions hereof, the
parties agree as follows:
1. Scope of Activities.
a. Within 24 months after execution of this Agreement, subject to force majeure
delays, the Owner shall complete construction of the Project and obtain final permit approval allowing
occupancy of all apartment units. The Project shall be constructed in material compliance with the approved
development permit and construction permits.
b. This completion schedule may be amended upon written agreement between the
parties. The date on which construction is completed and final approval has been granted for occupancy of
the final apartment unit shall be the Completion Date. There shall be no default for construction delays
beyond the reasonable control of Owner, provided that such delays do not exceed one hundred eighty (180)
days, or such longer period of time as may be specified in the Loan Documents.
c. During the term of this Agreement, the Owner shall retain legal fee ownership of
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the Property and Project and of all rights, royalties, profits and proceeds generated or caused by the
residential units of the Project, except that the Owner may transfer the Property and/or Project as permitted
in the Deed of Trust.
d. Owner hereby covenants and agrees to maintain a minimum of twenty (20) units
in the Project as affordable rental units, in accordance with the Affordability Schedule attached as Exhibit
B hereto.
2. Term of Agreement. The term of this Agreement shall commence on the date first above
written and shall terminate fifty-five (55) years from the Conversion Date, as that term is defined under the
Note, unless sooner terminated as hereinafter provided.
3. Loan. Subject to the terms and conditions of this Agreement, the City shall fund the Loan
Proceeds on the Funding Date. The Owner shall not obligate or expend the funds for any purpose other than
for the development and construction of the Project. The Owner shall execute two promissory notes in the
amount of (i) $400,000 (the “Loan Proceeds Note”) with a fifty-five (55) year maturity term; and (ii)
$527,573.00 .00 (the “Construction Fees Note”) with a twenty (22) year maturity term, both of which notes
are collectively referred to herein as the “Note”), deeds of trust and a regulatory agreement in favor of the
City. Prior to the City funding the Loan Proceeds to the Owner, (i) the Note shall be executed and delivered
to City, and each of the deeds of trust and regulatory agreement shall be executed and recorded, and (ii) the
title insurance company shall provide City with an ALTA lender’s policy of title insurance insuring City’s
lien in first lien position, with a liability amount equal to the amount of the Loan, at Owner’s cost and
expense. The City agrees to subordinate its lien position to any commercial construction financing obtained
by Owner in connection with the development of the Project.
4. Termination of Agreement for Cause. If the City determines that the Owner has incurred
obligations or made expenditures for purposes which are not permitted or are prohibited under the terms
and provisions of this Agreement, or if the City determines that the Owner has failed to fulfill its obligations
under this Agreement in a timely and professional manner, or if the Owner is in violation of any of the
terms or provisions of the Loan Documents, or if the Owner should be adjudged to be bankrupt, or if the
Owner makes a general assignment for the benefit of the Owner's creditors, or if a receiver should be
appointed in the event of the Owner's insolvency, or if an event of default has occurred under the Loan
Documents or any other deed of trust or regulatory agreement evidencing or securing a loan to the Owner
and has continued beyond expiration of applicable notice and cure periods, then the City shall have the right
to terminate this Agreement upon giving written notice thereof to the Owner and to Owner’s limited partner,
and giving thirty (30) days to cure such default and such additional time if the default cannot reasonably be
cured in thirty (30) days provided the Owner has commenced to cure during the 30 day cure and is pursuing
the cure to completion. A cure by the limited partner of Owner will be deemed a cure by the Owner. Owner’s
Limited Partner may remove and replace Owner’s general partner(s) in furtherance of a cure and shall have
a reasonable period of time thereafter to effect a cure. Termination shall have no effect upon the rights and
obligations of the parties arising out of any transaction occurring prior to effective date of such termination.
If the City's termination of Agreement for cause is defective for any reason, including but not limited to the
City's reliance on erroneous facts concerning the Owner’s performance, or any defect in the notice thereof,
the City's maximum liability shall not exceed the amount payable to the Owner under paragraph 3 of this
Agreement.
5. Employment Status. The Owner shall, during the entire term of this Agreement, be
construed as a contractor, and nothing in this Agreement is intended nor shall be construed to create an
employer-employee relationship or a joint venture relationship. Neither the Owner nor any of the Owner's
agents, employees or contractors are or shall be considered to be agents or employees of the City in
connection with the performance of the Owner's obligations under this Agreement.
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6. Inspections/Signs. The City reserves the right to inspect any work performed hereunder to
ensure that the Project is being and has been constructed, managed and operated in accordance with the
applicable federal, state and/or local requirements, and this Agreement at all reasonable times and upon
reasonable notice. The Owner agrees that all work found by such inspections not to materially conform to
the applicable requirements shall be corrected promptly. The City’s failure to inspect any work performed
hereunder shall not be construed as a waiver of its right to require corrections to defective work or to enforce
any other provisions of this Agreement. If assistance is provided as a secured development loan, any signs
placed on the property during construction which identifies the Project, or lenders to, the Project shall
include the City as one of the entities providing financing to the Project. During the construction period,
the City may place one or more signs on the property stating that it is providing financing for the Project.
7. Records. All records, accounts, documentation and all other materials relevant to a fiscal
audit or examination shall be retained by the Owner for a period of not less than three (3) years from the
date of Owner’s final payment under this Agreement.
8. Audit. All records, accounts, documentation and other materials deemed to be relevant to
the Project by the City shall be accessible at any time to the authorized representatives of the City on
reasonable prior notice, for the purpose of examination or audit. The Owner agrees that it shall provide City
with copies of all annual audits, performance and/or occupancy reports that it submits to the California Tax
Credit Allocation Committee. The Owner further agrees to provide City an annual accounting of Owner’s
residual receipts for the Project. As used herein, “residual receipts” shall have the same meaning as set
forth in the Loan Documents.
9. Indemnification. The Owner agrees to accept responsibility for loss or damage to any
person or entity, and shall defend, indemnify and hold harmless the City, its officers, employees, volunteers
and agents from any and all claims and demands, damages, costs, expenses, judgments, attorney fees or
liability that may be asserted by any person or entity, including the Owner, to the extent arising out of or in
connection with the performance by the Owner hereunder. The obligation to indemnify shall be effective
and shall extend to all such claims and losses, in their entirety, even when such claims or losses are brought
about in part by the comparative passive negligence of the City, its officers and employees. However, this
indemnity will not extend to any claims or losses arising out of the sole negligence or willful misconduct
of the City, its officers, employees, volunteers and agents.
The preceding paragraph applies to any theory of recovery relating to said act or omission, including,
but not limited to the following:
a. Violation of statute, ordinance, or regulation.
b. Professional malpractice.
c. Willful, intentional or other wrongful act(s), or failures to act.
d. Negligence or recklessness.
e. Furnishing of defective or dangerous products.
f. Premises liability.
g. Strict Liability.
h. Inverse condemnation.
i. Violation of civil rights.
j. Violation of any federal or state statute, regulation, or ruling resulting in a
determination by the Internal Revenue Service, California Franchise Tax Board, or any other California
public entity responsible for collecting payroll taxes, when the Owner is not an independent contractor.
It is the intent of the parties to provide the City the fullest indemnification, defense, and “hold
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harmless” rights allowed under the law. If any word(s) contained herein are deemed by a court to be in
contravention of applicable law, said word(s) shall be severed from this contract and the remaining language
shall be given full force and effect.
10. Insurance. The Owner, at its sole cost, shall purchase and maintain the insurance policies
set forth below on all of its operations under this Agreement. All of the insurance companies providing
insurance for Owner shall have, and provide evidence of an A.M. Best & Co. rating of A:VII or above,
unless exception is granted by the City’s Risk Manager. Furthermore, all policies shall be maintained for
the full term of this Agreement and related warranty period if applicable. Any failure to comply with
reporting provision(s) of the policies referred to above shall not affect coverage provided to the City, its
officers, employees, volunteers and agents. For purposes of the insurance policies required hereunder, the
term “City” shall include officers, employees, volunteers and agents of the City of Atascadero, individually
or collectively.
a. Scope and Limits of Required Insurance Policies. The following policies shall be
maintained with insurers authorized to do business in the State of California and shall be issued under forms
of policies satisfactory to the City:
i. Commercial General Liability: Policy shall include coverage at least as broad as
set forth in Insurance Services Office Commercial General Liability Coverage (CG
0001) with policy limits of not less than $1 million combined single limit per
occurrence. Policy shall be endorsed with the following specific language or
contain equivalent language in the policy:
1. The City of Atascadero, its officers, employees, volunteers and agents are
named as an additional insured for all liability arising out of the operations
by or on behalf of the named insured in the performance of this
Agreement.
2. The insurance provided herein shall be considered primary coverage to the
City with respect to any insurance or self-insured retention maintained by
the City. Further, the City’s insurance shall be considered excess insurance
only and shall not be called upon to contribute to this insurance.
3. The policy shall not be cancelled or materially changed without first giving
thirty days prior written notice to the City.
ii. Business Automobile Liability: If Borrower owns any motor vehicles, it shall hold
a Policy that shall include coverage at least as broad as set forth in the liability
section of Insurance Services Office Business Auto Coverage (CA 0001) with
policy limits of no less than $1 million combined single limit for each occurrence.
Said insurance shall include coverage for owned, non-owned, and hired vehicles.
Policy shall be endorsed with the following specific language or contain equivalent
language in the policy:
1. The City, its officers, employees, volunteers and agents are named as an
additional insured for all liability arising out of the operations by or on
behalf of the named insured in the performance of this Agreement.
2. The policy shall not be cancelled or materially changed without first giving
thirty days prior written notice to the City.
iii. Workers’ Compensation/Employer’s Liability Insurance: Workers’
Compensation: policy shall provide statutory limits as required by State of
California. Policy shall be endorsed with the following specific language or
contain equivalent language in the policy:
1. Owner and its insurer shall waive all rights of subrogation against the City,
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its officers, employees, volunteers and agents for workers’ compensation
losses arising out of this Agreement.
2. The policy shall not be cancelled or materially changed without first giving
thirty days prior written notice to the City.
iv. Employer’s Liability: Policy shall provide $1 million per accident for bodily injury
or disease.
b. Deductibles and Self-Insurance Retentions: All deductibles and/or self-insured
retentions which apply to any of the insurance policies required herein shall be declared in writing by the
Owner and approved by the City prior to commencement of this Agreement.
c. Documentation: Prior to commencement of work under this Agreement and
annually thereafter for the term of this Agreement, the Owner will provide to the City properly executed
certificates of insurance clearly evidencing the coverage, limits, and endorsements specified in this
Agreement. Further, at the City’s request, the Owner shall provide certified copies of the insurance policies
within thirty days of request. The certificate(s) of insurance and coverage verification and all other notices
related to cancellation or non-renewal shall be mailed to:
City of Atascadero
6500 Palma Avenue
Atascadero, California, 93422
Attn: Community Development Director
No cancellation or non-renewal of any required insurance policy, or reduction of coverage afforded
under the policy, shall be effective until written notice has been given at least thirty (30) days prior to the
effective date of such reduction or cancellation to City.
d. Absence of Insurance Coverage: City may direct the Owner to immediately cease
all activities with respect to this Agreement if it determines that the Owner fails to carry, in full force and
effect, all insurance policies with coverage levels at or above the limits specified in this Agreement. Any
delays or expense caused due to stopping of work and change of insurance shall be considered the Owner’s
delay and expense. At the City's discretion, under conditions of lapse, the City may purchase appropriate
insurance and charge all costs related to such policy to the Owner.
e. Change in Insurance Limits. City reserves the right to review the insurance limits
required under this Agreement and may require the Owner to obtain higher limits of coverage if, in the City
Attorney's reasonable judgment, such higher limits are necessary due to changes in circumstances,
increased risk exposure, or changes in City’s standard insurance requirements. The Owner shall comply
with any such requirement within ninety (90) days of written notice from City.
11. Hazardous Materials.
a. Owner shall comply with all environmental laws applicable to the Property. Owner
shall not cause or permit any of the following (each, a “Prohibited Activity or Condition”): (i) the presence,
use, generation, release, treatment, processing, storage handling, or disposal of any Hazardous Materials on
or under the Property; (ii) the transportation of any Hazardous Materials to, from, or across the Property;
(iii) any occurrence or condition on the Property, which occurrence or condition is or may be in violation
of applicable environmental laws; or (iv) the imposition of any environmental lien against the Property.
Owner shall pay the cost of any investigation, site monitoring, containment, clean-up, restoration or other
remedial work necessary to comply with or cure a violation of any environmental law or order of any
governmental authority that has or acquires jurisdiction over the Property or the use, operation or
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improvement of the Property, or is otherwise reasonably required by City as a consequence of any
Prohibited Activity or Condition or to prevent the occurrence of a Prohibited Activity or Condition.
“Hazardous Materials” means petroleum and petroleum products and compounds containing them,
including gasoline, diesel fuel and oil; explosives; flammable materials; radioactive materials;
polychlorinated biphenyls (“PCBs”) and compounds containing them; lead and lead-based paint; asbestos
or asbestos-containing materials in any form that is or could become friable; underground or above-ground
storage tanks, whether empty or containing any substance; radon; mold; toxic or mycotoxin spores; any
substance the presence of which on the Property is prohibited by any federal, state or local authority; any
substance that requires special handling; and any other material or substance (whether or not naturally
occurring) now or in the future that (x) is defined as a “hazardous substance,” “hazardous material,”
“hazardous waste,” “toxic substance,” “toxic pollutant,” “solid waste”, “pesticide”, “contaminant,” or
“pollutant”, or otherwise classified as hazardous or toxic by or within the meaning of any environmental
law, or (y) is regulated in any way by or within the meaning of any environmental law. The term “Hazardous
Materials” shall exclude those materials commonly used in the construction, operation and maintenance of
residential apartment buildings.
b. Owner shall indemnify, hold harmless and defend City and its officers, employees,
volunteers and agents (collectively, the “Indemnitees”) from and against all losses, proceedings, claims,
damages, penalties and costs (whether initiated or sought by governmental authorities or private parties),
including, without limitation, fees and out-of-pocket expenses of attorneys and expert witnesses,
engineering fees, environmental consultant fees, investigatory fees, and remediation costs, and any other
liabilities of whatever kind and whatever nature, whether incurred in connection with any judicial or
administrative process or otherwise, arising directly or indirectly from any of the following:
i. any breach of any representation or warranty of Owner in this Section 11;
ii. any failure by Owner to perform any of its obligations under this Section 11;
iii. the existence or alleged existence of any Prohibited Activity or Condition;
iv. the presence or alleged presence of Hazardous Materials on or under the Property
(whether as a result of activities on the Property or on surrounding properties) or
in any of the improvements; or
v. the actual or alleged violation of any applicable environmental law.
Notwithstanding anything herein to the contrary, (i) Owner shall have no obligation hereunder to
indemnify any Indemnitee for any liability under this Section 11 to the extent that the Prohibited Activity
or Condition giving rise to such liability resulted solely from the gross negligence or willful misconduct of
such Indemnitee, and (ii) Owner’s liability under this Section 11 shall not extend to cover the violation of
any environmental laws or Prohibited Conditions that first arise, commence or occur as a result of actions
of City, its successors, assigns or designees, after the satisfaction, discharge, release, assignment,
termination or cancellation of the Loan following the payment in full of the Note and all other sums payable
under the Loan Documents or after the actual dispossession from the Property of Owner and all entities
which control, are controlled by, or are under common control with Owner following foreclosure of the
Deed of Trust or acquisition of the Property by a deed in lieu of foreclosure.
12. Equal Employment Opportunity. During the performance of this Agreement, the Owner
agrees that it will not discriminate against any employee or applicant for employment because of race,
religion, sex, national origin, disability or familial status (i.e., family size), or on any other basis protected
under California or federal law.
13. Casualty, Condemnation. In the event of any fire or other casualty to the Project or eminent
domain proceedings resulting in condemnation of the Project or any part thereof, Owner shall have the right
to rebuild the Project, and to use all available insurance or condemnation proceeds therefor, provided that
no material default then exists under the Loan Documents.
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14. Compliance with Laws and Regulations. The Owner agrees to comply with all applicable
county, state and federal laws and regulations that pertain to construction, health and safety, labor, fair
employment practices, equal opportunity and all other matters applicable to the Owner, its subcontractors,
the Property and/or the Project. Owner and City acknowledge that the Loan, in and of itself, will not cause
the Project to become subject to either state prevailing wage laws or Davis-Bacon wages.
15. Permitted Transfers and Assignments. Owner may not cause or permit any voluntary
transfer, assignment or encumbrance of its interest in the Property or Project or of any ownership interests
in Owner, or lease or permit a sublease on all or any part of the Project, other than: (a) leases, subleases or
occupancy agreements to occupants of Units in the Project; or (b) security interests for the benefit of lenders
securing loans for the Project as approved by the City on terms and in amounts as approved by City in its
reasonable discretion; (c) transfers from Owner to a limited partnership formed for the syndication of the
Project, where Owner or an affiliated nonprofit public benefit corporation is the sole general partner or
manager of that entity or is the manager of a limited liability company that is the sole general partner or
manager of that entity; (d) transfers of the general partnership or manager's interest in Owner to a nonprofit
public benefit corporation approved in advance by the City; (e) transfers of any limited partnership interest
in Owner to an investor pursuant to the syndication of the Project; or (f) the grant or exercise of an option
agreement between a successor limited partnership as Owner and such limited partnership's general partner
or any of its affiliates in connection with the tax credit syndication of the Project; or (g) to remove or replace
the General Partner in accordance with the terms of any City-approved partnership agreement, a transfer of
any general partnership interest to a new general partner approved in advance by the City. Any other
transfer, assignment, encumbrance or lease without the City's prior written consent will be voidable and, at
the City's election, constitute an Event of Default under this Agreement. The City's consent to any specific
assignment, encumbrance, lease or other transfer will not constitute its consent to any subsequent transfer
or a waiver of any of the City's rights under this Agreement.
16. Law Governing and Forum Selection. This Agreement has been executed and delivered in
the State of California, and the validity, enforceability and interpretation of any of the clauses of this
Agreement shall be determined and governed by the laws of the State of California. All duties and
obligations of the parties created hereunder are performable in San Luis Obispo County, and a state court
in the State of California and in the County shall be that forum for any action, or proceeding that may be
brought, or arise out of this Agreement, or be in connection with or be caused by reason of this Agreement.
17. Severability. If any term, covenant, condition or provision of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions hereof
shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby.
18. Binding on Successors in Interest. All provisions of this Agreement shall be binding on the
parties and their heirs, assigns and successors in interest.
19. Effect of Waiver. City's waiver or breach of any one term, covenant or other provision of
this Agreement shall not be a waiver of a subsequent breach of the same term, covenant or provision of this
Agreement or of the breach of any other term, covenant or provision of this Agreement.
20. Notices. Unless otherwise provided, all notices herein required shall be in writing, and
delivered in person or sent by United States first class mail, postage prepaid. Notices required to be given
to City shall be addressed as follows: the City of Atascadero, 6500 Palma Avenue, Atascadero, California,
93422. Notices required to be given to the Owner shall be addressed as follows:
People’s Self-Help Housing Corporation
1060 Kendall Road,
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provided that any party may change such address by notice in writing to the other parties and thereafter
notices shall be transmitted to the new address. Provided further, that City agrees to provide notice to any
future limited partner of limited partnership formed for the tax credit syndication of the Project, where
Owner or an affiliated nonprofit public benefit corporation is the sole general partner or manager of that
entity or is the manager of a limited liability company that is the sole general partner or manager of that
entity.
21. Partial Subordination to Other Regulatory Agreements. City acknowledges that Owner and
other funding entities have entered or intend to enter into, a separate regulatory agreement, which
constitutes the extended low-income housing commitment described in Section 42(h)(6)(B) of the Internal
Revenue Code, as amended (the “Code”). City acknowledges and agrees that, in the event of a foreclosure
of its interest under the Deed of Trust or delivery by the Partnership of a deed in lieu thereof (collectively,
a “Foreclosure”), the following rule contained in Section 42(h)(6)(E)(ii) of the Code shall apply: For a
period of three (3) years from the date of Foreclosure, with respect to any unit that had been regulated by
the regulatory agreement with another funding entity, (i) none of the eligible tenants occupying those units
at the time of Foreclosure may be evicted or their tenancy terminated (other than for good cause, including
but not limited to, the tenants’ ineligibility pursuant to Section 42 of the Code), (ii) nor may any rent be
increased except as otherwise permitted under Section 42 of the Code.
22. Non-Recourse Obligation. The Owner's obligation to pay principal and interest on the sums
advanced hereunder shall be a non-recourse obligation, and the sole recourse of City for repayment shall
be the exercise of City’s rights against the Property covered by the Deed of Trust.
23. Entire Agreement and Modification. This Agreement sets forth the full and entire
understanding of the parties regarding the matter set forth herein, and any other prior or existing
understandings or agreement by the parties, whether formal or informal, regarding any matters are hereby
superseded or terminated in their entirety. No changes, amendments, or alterations shall be effective unless
in writing and signed by all parties hereto. The Owner specifically acknowledges that in entering into and
executing this Agreement, the Owner relies solely upon the provisions contained in this Agreement and no
others.
[Remainder of Page Left Intentionally Blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first above written.
Owner:
DEL RIO RIDGE, L.P.,
a California limited partnership
By: Del Rio Ridge LLC,
a California limited liability company,
its general partner
By: People’s Self-Help Housing Corporation,
a California nonprofit public benefit corporation,
its sole member/manager
By: ________________________
Kenneth Trigueiro,
CEO & President
City
City of Atascadero,
a California general law city
By:
Name:
Title:
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EXHIBIT “A”
LEGAL DESCRIPTION
Real property in the City of Atascadero, County of San Luis Obispo, State of California, described as
follows:
Those portions of Lots 11 and 12 in Block 22 of ATASCADERO COLONY in the City of Atascadero,
County of San Luis Obispo, State of California, according to map recorded October 21, 1914 in Book 3,
Page 25 of Maps, described as follows:
Beginning at a point on the Southeasterly line of the land described in the deed dated October 29, 1946 and
recorded in Book 426 Page 370 of Official Records, said point bearing South 59° 52' 37" West (South 59°
52' 00" West record) 473.13 feet from the most Easterly corner of said land; thence leaving said line South
30° 06' 38" East, 163.43 feet to the most Northerly corner of the land described in the deed dated July 26,
1919 and recorded in Book 129 Page 149 of Deeds; thence along the Northwesterly line of said land South
59° 53' 22" West 517.49 feet to the Northeasterly right-of-way of El Camino Real said right of way being
50.00 feet Northeasterly of and parallel with the centerline of El Camino Real; thence along said right of
way North 26° 39' 24" West 175.13 feet the Southeasterly line of said land described in the deed dated
October 29, 1946; thence along said Southeasterly line North 59° 47' 58" East 215.67 feet to an angle point
in said line; thence South 29° 56' 55" East 11.79 feet to an angle point in said line; thence North 59° 52' 37"
East 291.30 feet to the Point of Beginning.
APN: 049-151-056
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Peoples’ Self-Help Housing Corporation
Development Loan Agreement
EXHIBIT “B”
AFFORDABILITY SCHEDULE
Owner agrees to maintain the following affordability schedule pursuant to this agreement
throughout the Term of this Agreement:
Number of Units Affordability Level
XX Up to 30% of AMI
XX Between 30% and 60% of AMI
1 Unrestricted Manager’s Unit
The parties to this Agreement acknowledge that upon entering the regulatory agreement with the
California Tax Credit Allocation Committee, a total of forty-one (41) dwelling units in the Project will be
deed restricted by the Owner to be affordable to and occupied by households with the following income
levels for at least 55 years:
Number of Units Affordability Level
XX Up to 30% of AMI
XX Between 30% and 60% of AMI
1 Unrestricted Manager’s Unit
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People’s Self-Help Housing Corporation
Affordable Housing Regulatory Agreement 1
RECORDING REQUESTED BY:
WHEN RECORDED MAIL TO:
City of Atascadero
6500 Palma Avenue
Atascadero, California, 93422
APN: (Space above for Recorder’s use only)
AFFORDABLE HOUSING REGULATORY AGREEMENT
This Affordable Housing Regulatory Agreement (the “Agreement”) is made this ____ day of ___________,
2025 (“Effective Date”), by and between the City of Atascadero, a California general law city (the
“Lender”), and Del Rio Ridge, L.P., a California limited partnership (the “Owner”).
RECITALS
A. The Owner is developing real property in the city of Atascadero, in the County of San Luis Obispo,
as more particularly described in Exhibit A (the “Property”).
B. The Owner intends to operate the Property as an affordable housing project for low income
households.
C. Lender has agreed to provide Owner a loan in the aggregate amount of NINE HUNDRED
TWENTY-SEVEN THOUSAND FIVE HUNDRED SEVENTY-THREE ($927,573.00),
consisting of two funding tranches in the amount of (i) FOUR HUNDRED THOUSAND AND
No/100 DOLLARS ($400,000) (the “Housing Loan Proceeds”) for project acquisition and
development, and (ii) FIVE HUNDRED TWENTY-SEVEN FIVE HUNDRED SEVENTY-THREE
AND No/100 dollars ($527,573.00) for payment of Impact Fees (the “Impact Fee Proceeds”),
collectively, the “Loan”) to finance the construction of a forty-two (42) unit housing project (the
“Project”) consisting of forty-one (41) units for Low Income, Very Low Income and Extremely Low
Income Households and one (1) manager’s unit, located on the Property to benefit low income
households in the city of Atascadero.
D. As consideration for Lender’s agreement to fund the Loan, Owner has agreed to operate the Property
and the Project as affordable housing to low income tenants for a minimum of 55 years, subject to
the restrictions contained herein.
E. As further consideration for Lender’s agreement to provide the Loan, and to further the interests of
the Lender, the Owner has agreed to enter into and record this Agreement. The purpose of this
Agreement is to regulate and restrict the occupancy, rents, operation, ownership, and management of
the Property and the Project for affordable housing and related uses. The covenants in this Agreement
are intended to run with the land and be binding on the Owner and its successors and assigns in the
Property.
NOW THEREFORE, IN CONSIDERATION of the mutual agreements, obligations, and representations,
and in further consideration for the aforementioned funding of the Loan, the Owner and the Lender hereby
agree as follows:
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People’s Self-Help Housing Corporation
Affordable Housing Regulatory Agreement 2
DEFINITIONS
The following terms have the meanings and content set forth in this section wherever used in this Agreement
or attached exhibits.
“AFFORDABLE RENT” means the total charges for rent and utilities to each Qualifying Household as
allowed based on household size, income level and unit size pursuant to Fair Market Rents and Income
Limits published annually in the San Luis Obispo County Affordable Housing Standards.
“DEED OF TRUST” means those certain Deeds of Trust with Assignment of Rents recorded on the
Property as security for the Loan, with the Owner as Trustor and the Lender as Beneficiary, as well as any
amendments to, modifications of, and restatements of said Deeds of Trust.
“IMPACT FEE NOTE” means the promissory note executed by the Owner in favor of the Lender in the
amount of FIVE HUNDRED TWENTY-SEVEN FIVE HUNDRED SEVENTY-THREE AND No/100
dollars ($527,573.00) to evidence the Loan, which is secured by the Deed of Trust, as well as any
amendments to, modifications of, or restatements of said promissory note.
“EXTREMELY LOW INCOME HOUSEHOLD” means a household whose annual income does not
exceed thirty percent (30%) of the Area Median Income for the San Luis Obispo Metropolitan Statistical
Area as published annually by the U.S. Department of Housing & Urban Development (“HUD”) and
adjusted for household size.
“LENDER” is the City of Atascadero, a California general law city incorporated under the laws of the State
of California, and its officers, officials, directors, employees, agents and authorized representatives.
“LOAN” means the Loan made by the Lender to the Owner for development of the Project pursuant to the
Loan Agreement, and the Impact Fee Note and Loan Proceeds Note, which notes are collectively referred
to herein as the “Notes.”
“LOAN AGREEMENT” is the Loan Agreement executed by and between the Owner and the Lender,
setting forth the terms and conditions governing the Loan.
“LOAN DOCUMENTS” are collectively the Loan Agreement, the Notes evidencing the Loan, the Deeds
of Trust securing the Notes, and this Agreement as they may be amended, modified, or restated from time
to time, along with all exhibits and attachments to these documents.
“LOW INCOME HOUSEHOLD” means a household whose annual income does not exceed eighty percent
(80%) of the Area Median Income for the San Luis Obispo Metropolitan Statistical Area as published
annually by the U.S. Department of Housing & Urban Development (“HUD”) and adjusted for household
size. Low Income Household includes Extremely Low Income Households.
“LOAN PROCEEDS NOTE” means the promissory note executed by the Owner in favor of the Lender in
the amount of FOUR HUNDRED THOUSAND AND NO/100 DOLLARS ($400,000) to evidence the
Loan, which is secured by the Deed of Trust, as well as any amendments to, modifications of, or
restatements of said promissory note.
“OWNER” means Peoples’ Self-Help Housing Corporation, a California nonprofit public benefit
corporation formed under the laws of the State of California, and its officers, officials, directors, employees,
agents and authorized representatives, or a successor limited partnership formed for the tax credit
syndication of the Project, where Borrower or an affiliated nonprofit public benefit corporation is the sole
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People’s Self-Help Housing Corporation
Affordable Housing Regulatory Agreement 3
general partner or manager of that entity or is the manager of a limited liability company that is the sole
general partner or manager of that entity.
“PROJECT” means the Units on the Property and any supportive services and programs provided to tenants
of the Property.
“PROPERTY” means the real property described in Exhibit A attached hereto and incorporated herein,
including all parking, landscaping, and other improvements appurtenant thereto.
“QUALIFYING HOUSEHOLD” means a household that qualifies as either a Low Income Household or
Extremely Low Income Household.
“SLO COUNTY AFFORDABLE HOUSING STANDARDS” means the annual bulletin published by the
County of San Luis Obispo Department of Planning and Building County's establishing maximum
household incomes, home purchase prices, and rental prices for affordable housing units.
“TERM” means the term of this Agreement described herein.
“UNIT” means any one of the units in the Project.
“VERY LOW INCOME HOUSEHOLD” means a household whose annual income does not exceed fifty
percent (50%) of the Area Median Income for the San Luis Obispo Metropolitan Statistical Area as
published annually by the U.S. Department of Housing & Urban Development (“HUD”) and adjusted for
household size.
THE OWNER'S OBLIGATIONS
1. COMPLIANCE WITH LOAN DOCMENTS. The Owner's actions with respect to the Property and
the use of funds from the Loan shall at all times be in full conformity with all of the requirements of
the Loan Documents, including but not limited to the insurance requirements contained therein.
2. USE FOR AFFORDABLE HOUSING. The Owner agrees that, at all times during the Term of this
Agreement, a minimum of twenty (20) units in the Project will be used as affordable housing for
Extremely Low, Very Low and Low Income Households. Owner shall not convert the residential
units in the Project to condominium or cooperative ownership or sell condominium or cooperative
rights to the Project or any part thereof during the term of this Agreement.
3. TERM OF AGREEMENT. This Agreement shall commence upon the Effective Date and shall
remain in full force and effect for a period of fifty-five (55) years.
OCCUPANCY AND RENTS
4. OCCUPANCY OF UNITS. During the term of this Agreement, a minimum of twenty (20) units in
the Project will be used as affordable housing for Extremely Low, Very Low and Low Income
Households.
5. TENANT SELECTION. The Owner shall adopt written tenant selection policies for at least the
assisted units that: (a) are reasonably related to program eligibility and the applicant’s ability to
perform the obligations of the lease; (b) are consistent with the purpose of providing housing for Low
Income Households and Extremely Low Income Households; and (c) give prompt written notification
to any rejected applicant of the grounds for rejection.
6. NONDISCRIMINATION. The Owner shall not discriminate or segregate in the use, enjoyment,
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People’s Self-Help Housing Corporation
Affordable Housing Regulatory Agreement 4
occupancy, conveyance, lease, sublease, or rental of any units in the Project on the basis of race,
color, ancestry, national origin, religion, sex, sexual preference, age, marital status, family status,
source of income, physical or mental disability, Acquired Immune Deficiency Syndrome (AIDS) or
AIDS-related conditions (ARC), or any other arbitrary basis or basis protected by applicable law.
The Owner shall include a statement in all advertisements, notices and signs for the availability of
units for rent to the effect that the Owner is an Equal Housing Opportunity Provider.
7. INCOME CERTIFICATION AND INCREASES IN TENANT INCOME. The Owner shall certify
the incomes of all prospective tenants in the Project prior to their initial occupancy of a unit and shall
recertify their incomes annually. If upon recertification, a tenant’s income exceeds the maximum
designated for a Low Income Household, the Owner may increase the monthly rent for such tenants
to no more than one-twelfth of 30% of the tenant’s annual income and the tenant may be permitted
to continue to occupy a unit in the Project. Owner shall rent the next available unit to a tenant whose
household income does not exceed the income of a Low Income Household in order to achieve the
affordability requirements of this Agreement. Owner shall provide Lender an annual report on the
income recertification evidencing that Project occupants meet the requirements of qualified
households.
8. RENTAL CHARGES. Total charges for rent, utilities and related services for each unit in the Project
shall not exceed the Affordable Rent for that unit. If upon recertification, a tenant’s income exceeds
the Low Income Household limit, Owner may increase the rent for such tenants to no more than 30%
of the tenant’s income.
PROPERTY MANAGEMENT
9. MANAGEMENT RESPONSIBILITIES. The Owner is responsible for all management functions
with respect to the Project, including without limitation the selection of tenants, certification and
recertification of household size and income, evictions, collection of rents and deposits, maintenance,
landscaping, routine and extraordinary repairs, replacement of capital items, and security. The Lender
shall have no responsibility over management of the Property or the Project. Throughout the term of
this Agreement, Owner shall at its own expense, maintain the Property and the Project in good
physical condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living
conditions in conformity with all applicable state, federal, and local laws, ordinances, codes, and
regulations. Without limiting the foregoing, Owner agrees to maintain the Project and the Property
(including without limitation, the residential units, common areas, meeting rooms, landscaping,
driveways, parking areas and walkways) in a condition free of all waste, nuisance, debris,
unmaintained landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal activity, and
shall take all reasonable steps to prevent the same from occurring on the Property or at the Project.
Owner shall prevent and/or rectify any physical deterioration of the Property and the Project and shall
make all repairs, renewals and replacements necessary to keep the Property and the improvements
located thereon in good condition and repair. Owner shall provide adequate security services for
occupants of the Project. In the event that Owner breaches any of the covenants regarding
maintenance and landscaping in this Section 9, and such default continues for a period of ten (10)
days after written notice from Lender (with respect to graffiti, debris, and waste material) or thirty
(30) days after written notice from Lender (with respect to landscaping, building improvements and
general maintenance), then Lender, in addition to any other remedy it may have under this Agreement
or at law or in equity, shall have the right, but not the obligation, to enter upon the Property and
perform all acts and work necessary to protect, maintain, and preserve the improvements and the
landscaped areas on the Property. All costs expended by Lender in connection with the foregoing,
shall constitute an indebtedness secured by the Deed of Trust, and shall be paid by Owner to Lender
upon demand. All such sums remaining unpaid thirty (30) days following delivery of Lender’s
invoice therefor shall bear interest at the lesser of 10% per annum or the highest rate permitted by
applicable law.
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People’s Self-Help Housing Corporation
Affordable Housing Regulatory Agreement 5
10. REVIEW OF MANAGEMENT POLICIES. The Owner shall submit its written management policies
with respect to the Project and Program to the Lender for its review not less than annually or earlier
if amended, and shall amend such policies in any way necessary to insure that such policies comply
with the provisions of this Agreement and the requirements of all lenders providing financing for the
Property and/or the Project.
11. INSPECTION AND RECORDS. The Owner shall maintain records that clearly document the
Owner's performance of its obligations to operate the Property under the terms of this Agreement.
The Owner shall submit any records to the Lender within ten (10) business days of the Lender's
request. The Owner shall permit the Lender to enter and inspect the Project for compliance with
obligations under this Agreement upon twenty-four (24) hours advance notice of such visit by the
Lender to the Owner or the Owner's management agent and to tenants of any Units.
12. ANNUAL REPORT. The Owner shall submit to the Lender each year, on or prior to the date such
report is required to be submitted to the California Department of Housing and Community
Development, a report for the preceding calendar year showing the necessary information to allow
the Lender to determine the Owner's compliance with this Agreement, and within thirty (30) days
after receipt of a written request, any other information or completed forms requested by the Lender
in order to comply with reporting requirements of the Lender.
13. FEES, TAXES, AND OTHER LEVIES. Owner shall be responsible for payment of all fees,
assessments, taxes, charges, liens and levies applicable to the Property or the Project, including
without limitation possessory interest taxes, if applicable, imposed by any public entity, and shall pay
such charges prior to delinquency. However, Owner shall not be required to pay any such charge so
long as (a) Owner is contesting such charge in good faith and by appropriate proceedings, (b) Owner
maintains reserves adequate to pay any contested liabilities, and (c) on final determination of the
proceeding or contest, Owner immediately pays or discharges any decision or judgment rendered
against it, together with all costs, charges and interest. Nothing in this Section 13 is intended to
prohibit Owner from applying for any exemption from property taxes and fees that may be available
to the owners of low-income housing.
GENERAL PROVISIONS
14. SUBORDINATION. This Agreement shall be subordinated in priority to the lien to any commercial
lender’s deed of trust, deed in lieu or other security agreements to be made by Owner, provided that
the instruments effecting such subordination include reasonable protections to the Lender in the event
of default, including without limitation, extended notice and cure rights. Owner agrees to use best
efforts to ensure that all deeds of trust or other security instruments and any applicable subordination
agreement recorded against the Property, the Project or part thereof for the benefit of a lender other
than City (“Third-Party Lender”) shall contain each of the following provisions: (i) Third-Party
Lender shall use its best efforts to provide to Lender a copy of any notice of default issued to Owner
concurrently with provision of such notice to Owner; (ii) Lender shall have the reasonable right, but
not the obligation, to cure any default by Owner within the same period of time provided to Owner
for such cure; and (iii) (iv) following the tax credit compliance period, Lender shall have the right to
transfer the Project without acceleration of Third-Party Lender’s debt to a nonprofit corporation or
other entity which shall own and operate the Project as an affordable rental housing Project, subject
to the prior written consent of the Third-Party Lender. Owner agrees to provide to Lender a copy of
any notice of default Owner receives from any Third-Party Lender within three (3) business days
following Owner’s receipt thereof.
15. DAMAGE/INSURANCE. If any part of the Project is damaged or destroyed, Owner shall repair or
restore the same, consistent with the occupancy and rent restriction requirements set forth in this
Agreement. Such work shall be commenced as soon as reasonably practicable after the damage or
loss occurs and shall be completed within one year thereafter or as soon as reasonably practicable,
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People’s Self-Help Housing Corporation
Affordable Housing Regulatory Agreement 6
provided that insurance proceeds are available to be applied to such repairs or restoration within such
period and the repair or restoration is financially feasible. During such time that lenders or low-
income housing tax credit investors providing financing for the Project impose requirements that
differ from the requirements of this Section the requirements of such lenders and investors shall
prevail. Throughout the term of this Agreement Owner shall comply with the insurance
requirements set forth in the Loan Agreement and shall, at Owner’s expense, maintain in full force
and effect such insurance coverage.
16. DEFAULT AND REMEDIES. In the event of any breach of any agreement or obligation under this
Agreement by the Owner, the Lender shall provide written notice to the Owner of such breach. The
Owner shall have an opportunity to cure such breach within thirty (30) days from the Owner's receipt
of such written notice or such longer period of time as the Lender determines is necessary to cure the
breach if the Owner diligently undertakes to cure such breach. If the Owner fails to perform a timely
cure of the specified breach, the Lender may (i) proceed with any remedy provided under the Loan
Agreement, (ii) bring an action for equitable relief seeking the specific performance of the terms and
conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms
and conditions, and/or seeking declaratory relief, (iii) accelerate and declare the balance of the Notes
and interest accrued thereon immediately due and payable and proceed with foreclosure under the
Deed of Trust, (iv) For violations of obligations with respect to affordable rents for Units, impose as
liquidated damages a charge in an amount equal to the actual amount collected in excess of the
Affordable Rent, or (v) pursue any other remedy allowed by law to enforce the terms and conditions
of this Agreement. A cure by Owner’s limited partners shall be accepted or rejected on the same basis
as if made or tendered by Owner.
17. NON-LIABILITY OF OFFICIALS, EMPLOYEES AND AGENTS. No officers, directors,
employees and agents of the Lender shall be personally liable to the Owner for any obligation created
under the terms of this Agreement.
18. INDEMNITY. The Owner shall defend, indemnify and hold the Lender free and harmless against
any losses, damages, liabilities, claims, demands, judgments, actions, court costs, and legal or other
expenses (including reasonable attorneys' fees) which the Lender may incur as a direct or indirect
consequence of the Owner's failure to perform any obligations as and when required by this
Agreement. This indemnity obligation shall not extend to any claim arising solely from the gross
negligence or willful misconduct of the Lender, its agents, and its employees. The Owner's duty to
indemnify the Lender shall survive the term of this Agreement. It is further agreed that Lender does
not and shall not waive any rights against Owner that it may have by reason of this indemnity and
hold harmless agreement because of the acceptance by Lender, or the deposit with Lender by Owner,
of any of the insurance policies described in this Agreement or the Loan Agreement.
19. GOVERNING LAW. This Agreement shall be interpreted under and be governed by the laws of the
State of California, except for those provisions relating to choice of law and those provisions
preempted by federal law.
20. AGREEMENT CONTROLS. Notwithstanding any provisions of the Loan Agreement, in the event
that any provisions of this Agreement and any Loan Document irreconcilably conflict, the terms of
this Agreement shall control.
21. ATTORNEYS' FEES AND COSTS. In the event that any legal or administrative action or proceeding
is commenced between the parties hereto to interpret or to enforce the terms of this Agreement, the
prevailing party in any such action shall be entitled to recover all reasonable attorneys' fees and costs
incurred in such action.
22. CONSENTS AND APPROVALS. Any consent or approval of the Lender required under this
Agreement shall not be unreasonably withheld. Any approval must be in writing and executed by an
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People’s Self-Help Housing Corporation
Affordable Housing Regulatory Agreement 7
authorized representative of the Lender.
23. NOTICES, DEMANDS AND COMMUNICATIONS. Formal notices, demands and
communications between the Owner and the Lender shall be sufficiently given and shall not be
deemed given unless dispatched by registered or certified mail, postage prepaid, return receipt
requested, or delivered personally, to the principal offices of the Owner and the Lender as follows:
Lender:
City of Atascadero
6500 Palma Avenue
Atascadero, California 93422
Attention:
Community Development Director
Owner:
Del Rio Ridge, L.P.
People’s Self-Help Housing Corporation,
1060 Kendall Rd
San Luis Obispo, California 93401
Attention: Executive Director
24. BINDING UPON SUCCESSORS. All provisions of this Agreement shall be binding upon and inure
to the benefit of the heirs, administrators, executors, successors-in-interest, transferee, and assigns of
the Owner, and the Lender, and shall run with the land for the full term of this Agreement, regardless
of any assignment, payment, prepayment, expiration, extinguishment of the Loan or Notes, any
reconveyance of the Deed of Trust, or any conveyance or transfer of the Property or portion thereof.
25. RELATIONSHIP OF PARTIES. The relationship of the Owner and the Lender during the term of
this Agreement is solely that of lender and owner shall not be construed as a joint venture, equity
venture, or partnership.
26. WAIVER. Any waiver by the Lender of any obligation in this Agreement must be in writing. No
waiver will be implied from any delay or failure by the Lender to take action on any breach or default
of the Owner or to pursue any remedy allowed under this Agreement, the Loan Documents, or
applicable law. Any extension of time granted to the Owner to perform any obligation under this
Agreement shall not operate as a waiver or release from any of its obligations under this Agreement.
Consent by the Lender to any act or omission by the Owner shall not be construed to be consent to
any other or subsequent act or omission or to waive the requirement for the Lender's written consent
to future waivers.
27. INTEGRATION/AMENDMENTS AND MODIFICATIONS. This Agreement, together with the
Loan Agreement, the Notes, the Deeds of Trust, and the other Loan Documents contains the entire
agreement of Parties with respect to the subject matter hereof, and supersedes all prior oral or written
agreements between the Parties with respect thereto. Any amendments or modifications to this
Agreement must be in writing, and shall be made only if executed by both the Owner and the Lender.
This Agreement and any amendments or modifications may be executed in multiple counterparts,
each of which shall be an original and all of which together shall constitute one agreement.
28. SEVERABILITY. Every provision of this Agreement is intended to be severable. If any provision of
this Agreement shall be held invalid, illegal, or unenforceable by a court of competent jurisdiction,
the validity, legality, and enforceability of the remaining provisions shall not in any way be affected
or impaired.
IN WITNESS WHEREOF, Lender and Owner have caused this Regulatory Agreement to be
executed by their duly authorized representatives.
Lender:
Owner:
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People’s Self-Help Housing Corporation
Affordable Housing Regulatory Agreement 8
City of Atascadero,
a California general law city
By: ____________________________
James R. Lewis
City Manager
DEL RIO RIDGE, L.P.,
a California limited partnership
By: Del Rio Ridge LLC,
a California limited liability
company,
its general partner
By: People’s Self-Help Housing
Corporation,
a California nonprofit public
benefit corporation,
its sole member/manager
By:
________________________
Kenneth Trigueiro,
CEO & President
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People’s Self-Help Housing Corporation
Affordable Housing Regulatory Agreement 9
A notary public or other officer completing this certificate verifies only the identity of the individual who signed
the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that
document.
State of California )
County of __________________)
On_____________ before me, __________________, Notary Public, personally appeared,
______, who proved to me the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her their authorized capacity(ies), and that by his/her/their signature (s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature_____________________________
A notary public or other officer completing this certificate verifies only the identity of the individual who signed
the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that
document.
State of California )
County of __________________)
On_____________ before me, __________________, Notary Public, personally appeared,
______, who proved to me the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her their authorized capacity(ies), and that by his/her/their signature (s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature_____________________________
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Affordable Housing Regulatory Agreement 10
EXHIBIT “A”
Legal Description
Real property in the County of San Luis Obispo, State of California, described as follows:
Real property in the City of Atascadero, County of San Luis Obispo, State of California, described as follows:
Those portions of Lots 11 and 12 in Block 22 of ATASCADERO COLONY in the City of Atascadero, County of
San Luis Obispo, State of California, according to map recorded October 21, 1914 in Book 3, Page 25 of Maps,
described as follows:
Beginning at a point on the Southeasterly line of the land described in the deed dated October 29, 1946 and recorded
in Book 426 Page 370 of Official Records, said point bearing South 59° 52' 37" West (South 59° 52' 00" West
record) 473.13 feet from the most Easterly corner of said land; thence leaving said line South 30° 06' 38" East,
163.43 feet to the most Northerly corner of the land described in the deed dated July 26, 1919 and recorded in Book
129 Page 149 of Deeds; thence along the Northwesterly line of said land South 59° 53' 22" West 517.49 feet to the
Northeasterly right-of-way of El Camino Real said right of way being 50.00 feet Northeasterly of and parallel with
the centerline of El Camino Real; thence along said right of way North 26° 39' 24" West 175.13 feet the
Southeasterly line of said land described in the deed dated October 29, 1946; thence along said Southeasterly line
North 59° 47' 58" East 215.67 feet to an angle point in said line; thence South 29° 56' 55" East 11.79 feet to an angle
point in said line; thence North 59° 52' 37" East 291.30 feet to the Point of Beginning.
APN: 049-151-056
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Peoples’ Self-Help Housing Corporation
Promissory Note 1
Promissory Note
Secured by Deed of Trust
(Loan Proceeds Note)
Principal Amount: $400,000 ____, 2025
FOR VALUE RECEIVED, Del Rio Ridge, L.P., a California limited partnership (“Maker”)
promises to pay the City of Atascadero, a California general law city (“Holder”) the amount of Four
Hundred Thousand and no/100 Dollars ($400,000) (the “Loan Proceeds”). The Loan Proceeds may be
referred to herein as the Loan.
1. SECURITY. This Note shall be secured by a deed of trust (the “Deed of Trust”) recorded against
Maker’s interest in that certain real property located in Atascadero, California, as more particularly
described in the Deed of Trust (the “Property”).
2. MATURITY DATE. The maturity date for the Loan Proceeds shall be the date which is fifty-five
(55) years from the Conversion Date, as defined below (the “Maturity Date”).
3. REPAYMENT OF LOAN PROCEEDS. This Note shall be repaid with interest as follows:
(a) Interest. The outstanding principal balance of the Loan shall bear simple interest at the rate
of three percent (3%) per annum.
(b) Payments – Construction Period. All principal and interest payments will be deferred
during the Construction Period.
(c) Payments – Permanent Period. Commencing on the one-year anniversary from date that
Maker converts from construction to permanent financing (the “Conversion Date”), and on each
anniversary of such date thereafter, Maker shall submit an annual payment on this Note to Holder in an
amount equal to the City’s proportionate share of 50% of the Residual Receipts as defined below. Maker
shall provide Holder written notification that Maker has converted from construction to permanent
financing not later than ten (10) days following such conversion, specifying the effective date of the
conversion. The entire outstanding principal balance plus interest accrued thereon shall be due and payable
on the Maturity Date.
“Residual Receipts” is defined as the excess (if any) of (a) all rental income actually received by
Maker during the calendar year immediately prior to the applicable payment date in connection with the
operation of the Project, over (b) the sum of (i) all fees, costs and expenses incurred by Maker during such
calendar year in connection with the ownership, operation, leasing, management, maintenance, repair and
replacement of the Project, including but not limited to fees and expenses associated with property
management, resident services, and social service reimbursement fees, if any; (ii) all mandatory debt
payments and other amounts paid by Maker during such calendar year by Maker, not otherwise payable
from cash flow, under any loans superior to City’s Loan, (iii) all amounts deposited by Maker during such
calendar year into reserve accounts for the Project as required by lenders and/or Maker's limited partner, if
any, (iv) all payments of developer fees, (v) all partnership management fees and limited partner asset
management fees paid by Maker during such calendar year, in an amount not to exceed $40,887 in the
aggregate, increasing each year by 3.5%, and (vi) all operating and construction deficit loans payments and
all payments made by Maker during such calendar year on all loans received by Maker from the Maker’s
limited partner.
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Promissory Note 2
(d) Payment of Principal upon Event of Default or Sale. In the event the Property is sold
(except as permitted under the terms of the Loan Documents (as defined herein)) or upon an Event of
Default, which continues beyond expiration of applicable notice and cure periods, payment of the
outstanding principal balance of the Loan and accrued interest shall be due and payable.
(e) The indebtedness evidenced by this Note may be subordinated in right of payment to the
prior payment in full of all amounts then due and payable (including, but not limited to, all amounts due
and payable by virtue of any default or acceleration or upon maturity) with respect to any construction loan
made by a commercial lender (“Senior Lender”) to the extent and in the manner provided in any
subordination agreements entered into in connection therewith (the “Subordination Agreement”). The rights
and remedies of the payee and each subsequent holder of this Note shall be deemed, by virtue of such
holder’s acquisition of this Note, to have agreed to perform and observe all of the terms, covenants and
conditions to be performed or observed by the “Subordinate Lender” under the Subordination Agreement.
(f) Prepayment. This Note may be prepaid in whole or part at any time and from time to time
without penalty, fee or premium.
(g) Place of Payment. Any payment required under this Note shall be made payable to The
City of Atascadero, 6500 Palma Avenue, Atascadero, California, 93422, Attention: Affordable Housing.
The place of payment may be changed from time to time as Holder may from time to time designate in
writing. Payments shall be in lawful money of the United States of America.
4. COLLECTION. This Note evidences the Loan and is secured by the Deed of Trust recorded against
the Property. The terms of the Deed of Trust are incorporated herein by this reference. Maker agrees to pay
all the collection and enforcement costs, expenses and attorneys’ fees paid or incurred by the holder of this
Note or adjudged by a court in any litigation or controversy connected with this Note, or security for it,
including but not limited to actions for declaratory relief that any such holder is required to prosecute or
defend and actions for relief based on rescission, or actions to cancel this Note that any such holder is
required to defend.
5. DEFAULT.
(a) The occurrence of any of the following shall constitute an “Event of Default” under this
Note: (i) Maker fails to pay to Holder any amount due hereunder within ten (10) days of notice from Holder
that such payments is due; (ii) any default by Maker of any other covenant under this Note; (iii) any default
by Maker under the Deed of Trust or any other document evidencing or securing the Loan; (iv) Maker fails
to pay any taxes or assessments due on the Property when due (subject to Maker’s right to contest the same
in good faith); or (v) Maker’s bankruptcy, whether voluntary or involuntary that is not dismissed within
ninety (90) days.
(b) Upon the occurrence of any Event of Default which continues beyond expiration of
applicable notice and cure periods, or at any time thereafter, at the option of Holder hereof and without
notice, the entire unpaid principal and interest owing on this Note shall become immediately due and
payable. This option may be exercised at any time following any such event, and the acceptance of one or
more installments thereafter shall not constitute a waiver of Holder’s option. Holder’s failure to exercise
such option shall not constitute a waiver of such option with respect to any subsequent event. Holder’s
failure in the exercise of any other right or remedy hereunder or under any agreement which secures the
indebtedness or is related thereto shall not affect any right or remedy and no single or partial exercise of
any such right or remedy shall preclude any further exercise thereof.
(c) Notwithstanding anything to the contrary in this Note, that certain Affordable Housing
Regulatory Agreement or the Deed of Trust (collectively, the “Loan Documents”) and except with respect
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Promissory Note 3
to any obligation to make payments to Holder, Maker shall have the right to cure any defaults under the
Loan Documents and Holder agrees to accept cures tendered by Maker within thirty (30) days of written
notice to Maker of such default, plus such additional time as is reasonably necessary to cure the default
provided Maker has commenced the cure within such thirty (30) day period and is diligently prosecuting
the cure to completion.
(d) Notwithstanding anything to the contrary in the Loan Documents, the limited partner(s) of
Maker (collectively, the “Limited Partner”) shall have the right, but not the obligation, to cure any defaults
of Maker hereunder, and Holder agrees to accept cures tendered by the Limited Partner on behalf of Maker
within the cure periods described in this Section 5. The Limited Partner may replace Borrower’s general
partner(s) in furtherance of a cure and shall have a reasonable period of time thereafter to effect a cure.
(e) The Note is a nonrecourse obligation of Maker and its partners. Neither Maker nor any of
its partners nor any other party shall have any personal liability for repayment of this Note. The sole
recourse of the Holder under the Loan Documents for repayment of the Note shall be the exercise of its
rights against the Property.
6. WAIVER. Maker and any endorsers hereof and all others who may become liable for all or any
part of this obligation, severally waive presentment for payment, demand and protest and notice of protest,
and of dishonor and nonpayment of this Note, and expressly consent to any extension of the time of payment
hereof or of any installment hereof, to the release of any party liable for this obligation, and any such
extension or release may be made without notice to any of said parties and without any way affecting or
discharging this liability.
7. ATTORNEY FEES. Maker agrees to pay immediately upon demand all costs and expenses of
Holder, including reasonable attorneys’ fees, (i) after an Event of Default this Note be placed in the hands
of an attorney or attorneys for collection, (ii) if after an Event of Default hereunder or under the Deed of
Trust, Holder finds it necessary or desirable to secure the services or advice of one or more attorneys with
regard to collection of this Note against Maker, any guarantor or any other party liable therefore or to the
protection of its rights under the Loan Documents, or (iii) if Holder seeks to have the Property abandoned
by or reclaimed from any estate in bankruptcy, or attempts to have any stay or injunction prohibiting the
enforcement or collection of the Note or prohibiting the enforcement of the Loan Documents or any other
agreement evidencing or securing this Note lifted by any bankruptcy or other courts.
8. INTEGRATION. This Note, the Deed of Trust and the other loan documents relating to this Note,
embody the agreement between Holder and Maker for the Loan and its terms and conditions.
9. AMENDMENTS. This Note may not be modified or amended except by an instrument in writing
executed by the parties sought to be bound thereby.
10. GOVERNING LAW. This Note shall be governed by and construed in accordance with the laws
of the State of California.
[SIGNATURE ON FOLLOWING PAGE]
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Peoples’ Self-Help Housing Corporation
Promissory Note 4
Executed as of the date first written above.
DEL RIO RIDGE, L.P.,
a California limited partnership
By: Del Rio Ridge LLC,
a California limited liability company,
its general partner
By: People’s Self-Help Housing Corporation,
a California nonprofit public benefit corporation,
its sole member/manager
By: ________________________
Kenneth Trigueiro,
CEO & President
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Peoples’ Self-Help Housing Corporation
Promissory Note 1
Promissory Note
Secured by Deed of Trust
(Construction Proceeds Note)
Principal Amount: $527,573.00 ____, 2025
FOR VALUE RECEIVED, Del Rio Ridge, L.P., a California limited partnership (“Maker”)
promises to pay the City of Atascadero, a California general law city (“Holder”) the amount of FIVE
HUNDRED TWENTY-SEVEN FIVE HUNDRED SEVENTY-THREE AND No/100 DOLLARS
($527,573.00.00) (the “Loan Proceeds”). The Loan Proceeds may be referred to herein as the Loan.
1. SECURITY. This Note shall be secured by a deed of trust (the “Deed of Trust”) recorded against
Maker’s interest in that certain real property located in Atascadero, California, as more particularly
described in the Deed of Trust (the “Property”).
2. MATURITY DATE. The maturity date for the Loan Proceeds shall be the date which is twenty-
two (22) years from the Conversion Date, as defined below (the “Maturity Date”).
3. REPAYMENT OF LOAN PROCEEDS. This Note shall be repaid with interest as follows:
(a) Interest. The outstanding principal balance of the Loan shall bear simple interest at the rate
of three percent (3%) per annum.
(b) Payments – Construction Period. All principal and interest payments will be deferred
during the Construction Period.
(c) Payments – Permanent Period. Commencing on the one-year anniversary from date that
Maker converts from construction to permanent financing (the “Conversion Date”), and on each
anniversary of such date thereafter, Maker shall submit an annual payment on this Note to Holder in an
amount equal to the City’s proportionate share of 50% of the Residual Receipts as defined below. Maker
shall provider Holder written notification that Maker has converted from construction to permanent
financing not later than ten (10) days following such conversion, specifying the effective date of the
conversion. The entire outstanding principal balance plus interest accrued thereon shall be due and payable
on the Maturity Date.
“Residual Receipts” is defined as the excess (if any) of (a) all rental income actually received by
Maker during the calendar year immediately prior to the applicable payment date in connection with the
operation of the Project, over (b) the sum of (i) all fees, costs and expenses incurred by Maker during such
calendar year in connection with the ownership, operation, leasing, management, maintenance, repair and
replacement of the Project, including but not limited to fees and expenses associated with property
management, resident services, and social service reimbursement fees, if any; (ii) all mandatory debt
payments and other amounts paid by Maker during such calendar year by Maker, not otherwise payable
from cash flow, under any loans superior to City’s Loan, (iii) all amounts deposited by Maker during such
calendar year into reserve accounts for the Project as required by lenders and/or Maker's limited partner, if
any, (iv) all payments of developer fees, (v) all partnership management fees and limited partner asset
management fees paid by Maker during such calendar year, in an amount not to exceed $40,887 in the
aggregate, increasing each year by 3.5%, and (vi) all operating and construction deficit loan payments and
all payments made by Maker during such calendar year on all loans received by Maker from the Maker’s
limited partner.
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Promissory Note 2
(d) Payment of Principal upon Event of Default or Sale. In the event the Property is sold
(except as permitted under the terms of the Loan Documents (as defined herein)) or upon an Event of
Default, which continues beyond expiration of applicable notice and cure periods, payment of the
outstanding principal balance of the Loan and accrued interest shall be due and payable.
(e) The indebtedness evidenced by this Note may be subordinated in right of payment to the
prior payment in full of all amounts then due and payable (including, but not limited to, all amounts due
and payable by virtue of any default or acceleration or upon maturity) with respect to any construction loan
made by a commercial lender (“Senior Lender”) to the extent and in the manner provided in any
subordination agreements entered into in connection therewith (the “Subordination Agreement”). The rights
and remedies of the payee and each subsequent holder of this Note shall be deemed, by virtue of such
holder’s acquisition of this Note, to have agreed to perform and observe all of the terms, covenants and
conditions to be performed or observed by the “Subordinate Lender” under the Subordination Agreement.
(f) Prepayment. This Note may be prepaid in whole or part at any time and from time to time
without penalty, fee or premium.
(g) Place of Payment. Any payment required under this Note shall be made payable to The
City of Atascadero, 6500 Palma Avenue, Atascadero, California, 93422, Attention: Affordable Housing.
The place of payment may be changed from time to time as Holder may from time to time designate in
writing. Payments shall be in lawful money of the United States of America.
4. COLLECTION. This Note evidences the Loan and is secured by the Deed of Trust recorded against
the Property. The terms of the Deed of Trust are incorporated herein by this reference. Maker agrees to pay
all the collection and enforcement costs, expenses and attorneys’ fees paid or incurred by the holder of this
Note or adjudged by a court in any litigation or controversy connected with this Note, or security for it,
including but not limited to actions for declaratory relief that any such holder is required to prosecute or
defend and actions for relief based on rescission, or actions to cancel this Note that any such holder is
required to defend.
5. DEFAULT.
(a) The occurrence of any of the following shall constitute an “Event of Default” under this
Note: (i) Maker fails to pay to Holder any amount due hereunder within ten (10) days of notice from Holder
that such payments is due; (ii) any default by Maker of any other covenant under this Note; (iii) any default
by Maker under the Deed of Trust or any other document evidencing or securing the Loan; (iv) Maker fails
to pay any taxes or assessments due on the Property when due (subject to Maker’s right to contest the same
in good faith); or (v) Maker’s bankruptcy, whether voluntary or involuntary that is not dismissed within
ninety (90) days.
(b) Upon the occurrence of any Event of Default which continues beyond expiration of
applicable notice and cure periods, or at any time thereafter, at the option of Holder hereof and without
notice, the entire unpaid principal and interest owing on this Note shall become immediately due and
payable. This option may be exercised at any time following any such event, and the acceptance of one or
more installments thereafter shall not constitute a waiver of Holder’s option. Holder’s failure to exercise
such option shall not constitute a waiver of such option with respect to any subsequent event. Holder’s
failure in the exercise of any other right or remedy hereunder or under any agreement which secures the
indebtedness or is related thereto shall not affect any right or remedy and no single or partial exercise of
any such right or remedy shall preclude any further exercise thereof.
(c) Notwithstanding anything to the contrary in this Note, that certain Affordable Housing
Regulatory Agreement or the Deed of Trust (collectively, the “Loan Documents”) and except with respect
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Peoples’ Self-Help Housing Corporation
Promissory Note 3
to any obligation to make payments to Holder, Maker shall have the right to cure any defaults under the
Loan Documents and Holder agrees to accept cures tendered by Maker within thirty (30) days of written
notice to Maker of such default, plus such additional time as is reasonably necessary to cure the default
provided Maker has commenced the cure within such thirty (30) day period and is diligently prosecuting
the cure to completion.
(d) Notwithstanding anything to the contrary in the Loan Documents, the limited partner(s) of
Maker (collectively, the “Limited Partner”) shall have the right, but not the obligation, to cure any defaults
of Maker hereunder, and Holder agrees to accept cures tendered by the Limited Partner on behalf of Maker
within the cure periods described in this Section 5. The Limited Partner may replace Borrower’s general
partner(s) in furtherance of a cure and shall have a reasonable period of time thereafter to effect a cure.
(e) The Note is a nonrecourse obligation of Maker and its partners. Neither Maker nor any of
its partners nor any other party shall have any personal liability for repayment of this Note. The sole
recourse of the Holder under the Loan Documents for repayment of the Note shall be the exercise of its
rights against the Property.
6. WAIVER. Maker and any endorsers hereof and all others who may become liable for all or any
part of this obligation, severally waive presentment for payment, demand and protest and notice of protest,
and of dishonor and nonpayment of this Note, and expressly consent to any extension of the time of payment
hereof or of any installment hereof, to the release of any party liable for this obligation, and any such
extension or release may be made without notice to any of said parties and without any way affecting or
discharging this liability.
7. ATTORNEY FEES. Maker agrees to pay immediately upon demand all costs and expenses of
Holder, including reasonable attorneys’ fees, (i) after an Event of Default this Note be placed in the hands
of an attorney or attorneys for collection, (ii) if after an Event of Default hereunder or under the Deed of
Trust, Holder finds it necessary or desirable to secure the services or advice of one or more attorneys with
regard to collection of this Note against Maker, any guarantor or any other party liable therefore or to the
protection of its rights under the Loan Documents, or (iii) if Holder seeks to have the Property abandoned
by or reclaimed from any estate in bankruptcy, or attempts to have any stay or injunction prohibiting the
enforcement or collection of the Note or prohibiting the enforcement of the Loan Documents or any other
agreement evidencing or securing this Note lifted by any bankruptcy or other courts.
8. INTEGRATION. This Note, the Deed of Trust and the other loan documents relating to this Note,
embody the agreement between Holder and Maker for the Loan and its terms and conditions.
9. AMENDMENTS. This Note may not be modified or amended except by an instrument in writing
executed by the parties sought to be bound thereby.
10. GOVERNING LAW. This Note shall be governed by and construed in accordance with the laws
of the State of California.
[SIGNATURE ON FOLLOWING PAGE]
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Peoples’ Self-Help Housing Corporation
Promissory Note 4
Executed as of the date first written above.
DEL RIO RIDGE, L.P.,
a California limited partnership
By: Del Rio Ridge LLC,
a California limited liability company,
its general partner
By: People’s Self-Help Housing Corporation,
a California nonprofit public benefit corporation,
its sole member/manager
By: ________________________
Kenneth Trigueiro,
CEO & President
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People’s Self-Help Housing Corporation
Deed of Trust 1
When recorded mail to:
City of Atascadero
6500 Palma Avenue
Atascadero, California, 93422
Attn: Community Development Director
This Instrument is exempt from recording
Fees pursuant to Government Code
Sections 27383 and 27388.1
DEED OF TRUST WITH ASSIGNMENT OF RENTS
This DEED OF TRUST WITH ASSIGNMENT OF RENTS, made as of the ____ day of
___________, 2025, between
Del Rio Ridge, L.P., a California limited partnership, herein called “TRUSTOR”, whose
address is 1060 Kendall Road, San Luis Obispo, California 93401, and
First American Title Company, herein called “TRUSTEE”, and
City of Atascadero, a California general law city, herein called “BENEFICIARY”
Trustor irrevocably grants, transfers and assigns to Trustee in Trust, with Power of Sale that
property in the City of Atascadero, County of SAN LUIS OBISPO, State of CALIFORNIA,
described as follows:
SEE EXHIBIT A ATTACHED
Together with the rents, issues and profits thereof, subject, however, to the right, power and
authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents,
issues and profits.
FOR THE PURPOSE OF SECURING (1) payment of the sum of FOUR HUNDRED
THOUSAND DOLLARS AND NO CENTS ($400,000) with interest thereon according to the
terms of a promissory note of even date herewith made by TRUSTOR, payable to order of
BENEFICIARY, and extensions or renewals thereof (“General Note”); (2) payment of the sum of
FIVE HUNDRED TWENTY-SEVEN FIVE HUNDRED SEVENTY-THREE DOLLARS
AND NO CENTS ($527,573.00) with interest thereon according to the terms of a promissory note
of even date herewith made by TRUSTOR, payable to order of BENEFICIARY, and extensions
or renewals thereof (“Impact Fees Note”); (3) the performance of each agreement of TRUSTOR
incorporated by reference or contained herein or reciting it is so secured; (4) payment of additional
sums and interest thereon which may hereafter be loaned to Trustor, or his or her successors or
assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed
of Trust.
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Deed of Trust 2
To protect the security of this Deed of Trust, and with respect to the property above described,
Trustor agrees:
(1) To keep said property in good condition and repair, ordinary wear and tear excepted; not
to remove or demolish any building thereon; to complete or restore promptly and in good and
workmanlike manner any building which may be constructed, damaged or destroyed thereon and
to pay when due all claims for labor performed and materials furnished therefor (or to bond over
any liens to Beneficiary’s reasonable satisfaction); to comply with all laws affecting said property
or requiring any alterations or improvements to be made thereon; not to commit or permit waste
thereof; not to commit, suffer or permit any act upon said property in violation of the law; to
cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use
of said property may be reasonably necessary, the specific enumerations herein not excluding the
general; and to observe and perform all of the covenants and agreements of the Affordable Housing
Regulatory Agreement of even date herewith made by Trustor, the Note, and this Deed of Trust.
(2) To provide, maintain and deliver to Beneficiary insurance satisfactory to and with loss
payable to Beneficiary. The amount collected under any fire or other insurance policy may be
applied by Beneficiary upon any indebtedness secured hereby and in such order as beneficiary
may determine, or at option of Beneficiary the entire amount so collected or any part thereof may
be released to Trustor. Such application or release shall not cure or waive any default or notice of
default hereunder or invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to affect the security hereof
or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost
of evidence of title and attorney’s fees in a reasonable sum, in any action or proceeding in which
Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed
of Trust.
(4) To pay: at least ten days before delinquency all taxes and assessments affecting said
property, including assessments on appurtenant water stock; when due, all encumbrances, charges
and liens, with interest, on said property or any part thereof, which appear to be prior or superior
hereto; all costs, fees and expenses of this Trust. Should Trustor fail to make any payment or to do
any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without
notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may:
make or do the same in such manner and to such extent as either may deem necessary to protect
the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such
purposes; appear in and defend any action or proceeding purporting to affect the security hereof
or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any
encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto;
and, in exercising any such powers, pay necessary expenses, employ counsel and pay his or her
reasonable fees.
(5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee,
with interest from date of expenditure at the amount allowed by law in effect at the date hereof,
and to pay for any statement provided for by law in effect at the date hereof regarding the obligatio n
secured hereby, any amount demanded by the Beneficiary not to exceed the maximum allowed by
law at the time when said statement is demanded.
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Deed of Trust 3
(6) That any award of damages in connection with any condemnation for public use of or injury
to said property or any part thereof is hereby assigned and shall be paid to Beneficiary who may
apply or release such moneys received by him or her in the same manner and with the same effect
as above provided for disposition or proceeds of insurance.
(7) That by accepting payment of any sum secured hereby after its due date, Beneficiary does
not waive his or her right either to require prompt payment when due of all other sums so secured
or to declare default for failure so to pay.
(8) That at any time or from time to time, without liability therefor and without notice, upon
written request of Beneficiary and presentation of this Deed and said note for endorsement, and
without affecting the personal liability or any person for payment of the indebtedness secured
hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat
thereof; join in granting any easement thereon; or join in any extension agreement or any
agreement subordinating the lien or charge hereof.
(9) That upon written request of Beneficiary stating that all sums secured hereby have been
paid, and upon surrender of this Deed and said note to Trustee for cancellation and retention or
other disposition as Trustee in its sole discretion may choose and upon payment of its fees, Trustee
shall reconvey, without warranty, the property then held hereunder. The recitals in such
reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The
Grantee in such reconveyance may be described as the person or persons legally entitled thereto.
(10) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right,
power and authority, during the continuance of these Trusts, to collect the rents, issues and profits
of said property, reserving unto Trustor the right, prior to any default by Trustor in payment of any
indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain
such rents, issues and profits as they become due and payable. Upon any such default, Beneficiary
may at any time without notice, either in person, by agent, or by a receiver to be appointed by a
court, and without regard to the adequacy of any security for the indebtedness hereby secured,
enter upon and take possession of said property or any part thereof, in his or her own name sue for
or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply
the same, less costs and expenses of operation and collection, including reasonable attorney’s fees,
upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The
entering upon and taking possession of said property, the collection of such rents, issues and profits
and the application thereof as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice.
(11) That upon default by Trustor in payment of any indebtedness secured hereby or in
performance of any agreement hereunder beyond any applicable notice or cure period, Beneficiary
may declare all sums secured hereby immediately due and payable by delivery to Trustee of written
declaration of default and demand for sale and of written notice of default and of election to cause
to be sold said property, which notice Trustee shall cause to be filed for record. Beneficiary also
shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured
hereby.
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Deed of Trust 4
After the lapse of such time as may then be required by law following the recordation of said notice
of default, and notice of sale having been given as then required by law, Trustee without demand
on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as
a whole or in separate parcels, and in such order as it may determine, at public auction to the
highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may
postpone sale of all or any portion of said property by public announcement at such time and place
of sale, and from time to time thereafter may postpone such sale by public announcement at the
time fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed
conveying the property so sold, but without any covenant or warranty, express or implied. The
recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof.
Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at
such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence
of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums
expended under the terms hereof, not then repaid, with accrued interest at the amount allowed by
law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to
the person or persons legally entitled thereto.
(12) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from
time to time, by instrument in writing, substitute a successor of successors to any Trustee named
herein or acting hereunder, which instrument, executed by the Beneficiary and duly acknowledged
and recorded in the office of the recorder of the county or counties where said property is situated,
shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall,
without conveyance from the Trustee predecessor, succeed to all its title, estate, rights, powers and
duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary
hereunder, the book and page where this Deed is recorded and the name and address of the new
Trustee.
(13) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs,
legatees, devisees, administrators, executors, successors, and assigns. The term Beneficiary shall
mean the owner and holder, including pledgees, of the note secured hereby, whether or not named
as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender
includes the feminine and/or the neuter, and the singular number includes the plural. Personal
liability for the indebtedness secured hereby shall be limited as set forth in the other documents
evidencing and/or securing such indebtedness.
(14) The Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made
a public record as provided by law. Trustee is not obliged to notify any party hereto of pending
sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or
Trustee shall be a party unless brought by Trustee. Beneficiary may charge for a statement
regarding the obligation secured hereby, provided the charge thereof does not exceed the
maximum allowed by law.
(15) Upon request by such lender, this Deed of Trust will be subordinated in lien priority,
through a separately recorded subordination agreement, to any commercial lender’s deed of trust
or deed in lieu provided as security for a construction loan for the development of the Project.
Page 49 of 77
11/12/25 | Item D4 | Attachment 5
People’s Self-Help Housing Corporation
Deed of Trust 5
Additionally, Beneficiary agrees that, upon request, it shall subordinate this Deed of Trust and the
loans secured hereby to the interests of the California Department of Housing and Community
Development pursuant to its permanent financing for the Project.
Page 50 of 77
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People’s Self-Help Housing Corporation
Deed of Trust 6
The undersigned Trustor, requests that a copy of any notice of default and any notice of sale
hereunder be mailed to him or her at his or her address hereinbefore set forth.
Trustor:
Del Rio Ridge, L.P.,
a California limited partnership
By: Del Rio Ridge LLC,
a California limited liability company,
its general partner
By: People’s Self-Help Housing Corporation,
a California nonprofit public benefit corporation,
its sole member/manager
By: ________________________
Kenneth Trigueiro,
CEO & President
Page 51 of 77
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People’s Self-Help Housing Corporation
Deed of Trust 7
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Atascadero, County of San Luis Obispo, State of California, described as
follows:
Those portions of Lots 11 and 12 in Block 22 of ATASCADERO COLONY in the City of Atascadero,
County of San Luis Obispo, State of California, according to map recorded October 21, 1914 in Book 3,
Page 25 of Maps, described as follows:
Beginning at a point on the Southeasterly line of the land described in the deed dated October 29, 1946
and recorded in Book 426 Page 370 of Official Records, said point bearing South 59° 52' 37" West (South
59° 52' 00" West record) 473.13 feet from the most Easterly corner of said land; thence leaving said line
South 30° 06' 38" East, 163.43 feet to the most Northerly corner of the land described in the deed dated
July 26, 1919 and recorded in Book 129 Page 149 of Deeds; thence along the Northwesterly line of said
land South 59° 53' 22" West 517.49 feet to the Northeasterly right-of-way of El Camino Real said right of
way being 50.00 feet Northeasterly of and parallel with the centerline of El Camino Real; thence along
said right of way North 26° 39' 24" West 175.13 feet the Southeasterly line of said land described in the
deed dated October 29, 1946; thence along said Southeasterly line North 59° 47' 58" East 215.67 feet to
an angle point in said line; thence South 29° 56' 55" East 11.79 feet to an angle point in said line; thence
North 59° 52' 37" East 291.30 feet to the Point of Beginning.
APN: 049-151-056
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A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
State of California )
County of __________________)
On_____________ before me, __________________, Notary Public, personally appeared,
______, who proved to me the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her their authorized capacity(ies),
and that by his/her/their signature (s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under penalty of perjury under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature_____________________________
Page 53 of 77
CITY OF ATASCADERO
CITY COUNCIL STAFF REPORT Item G1
Department: Public Works
Date: 11/12/25
Placement: Public Hearing
TO: JAMES R. LEWIS, CITY MANAGER
FROM: NICK DE BAR, DIRECTOR OF PUBLIC WORKS/CITY ENGINEER
PREPARED BY: RYAN HAYES, DEPUTY DIRECTOR OF PUBLIC WORKS
SUBJECT: Order to Vacate a Portion of Public Right-of-Way at 11285 San Marcos
Road
RECOMMENDATION:
Council adopt Draft Resolution ordering the vacation of a portion of public right-of-way at 11285
San Marcos Road based upon findings consistent with the State of California Streets and Highways
Code.
DISCUSSION:
BACKGROUND
As a result of the January 2023 storms, a FHWA-funded soldier pile retaining wall and roadway
reconstruction project was completed in late 2023. City staff have been in discussions with the
owners of the adjacent 11285 San Marcos Road property to adjust the right-of-way to reflect the
roadway alignment and allow for future access to and maintenance of the retaining wall. The
right-of-way adjustment includes abandonment of approximately 1,265 square feet of existing
unused right-of-way to the property owner, in exchange for dedication of an approximately 1,190
square foot permanent access easement. A vicinity map of this site is shown below.
Page 54 of 77
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ANALYSIS
Pursuant to the Streets and Highways Code Sections 8320 et sq., the City initiated proceedings to
vacate excess right-of-way through a resolution adopted by City Council on October 14, 2025,
declaring its intention to order to vacation of the right-of-way and establishing a public hearing
for November 12, 2025, for the proposed street vacation. Public notice for this hearing was
published twice on October 30, 2025, and November 6, 2025.
Working with the owners of 11285 San Marcos Road, staff has identified a portion of right-of-way
that will not restrict public access or future improvements if relinquished, and a portion of the
private parcel over which a permanent easement will be established. These approximate areas
are shown in the exhibit below.
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The portion of San Marcos Road to be vacated (1,265 sq. ft.) would become part of the adjacent
property of 11285 San Marcos Road. In exchange, the City would receive an easement from
11285 San Marcos Road (1,190 sq. ft.) that is needed to gain access to the downgradient side
(opposite from street) of the soldier pile wall for inspection and maintenance purposes. This
easement will also prevent any private grading or excavating work adjacent to the wall that could
undermine the wall. There is sufficient right-of-way width at the proposed vacation, and no public
utilities exist or need this excess right-of-way. Furthermore, the Fire Department has no objection
to the right-of-way abandonment and does not consider this right-of-way to be necessary for
current or future evacuation needs.
ALTERNATIVES TO THE STAFF RECOMMENDATION:
Council may decide not to vacate this portion of San Marcos Road right-of-way, but it is likely that
the adjacent property owner may not grant the City the easement adjacent to the soldier pile
wall. Staff does not recommend this alternative since the right-of-way being considered for
vacation is excess and not needed for existing roadway improvements and public utilities, and
vacating it will allow the City to obtain the easement needed for inspecting and maintaining the
soldier pile wall.
FISCAL IMPACT:
None
REVIEWED BY OTHERS:
This item has been reviewed by the City Attorney and City Clerk.
REVIEWED AND APPROVED FOR COUNCIL AGENDA
James R. Lewis, City Manager
ATTACHMENT:
1. Draft Resolution
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11/12/25 | Item G1 | Attachment 1
DRAFT RESOLUTION
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ATASCADERO, CALIFORNIA, ORDERING THE VACATION OF A
PORTION OF PUBLIC RIGHT-OF-WAY AT 11285 SAN MARCOS ROAD
WHEREAS, the subdivision map recorded in San Luis Obispo County Book of Maps
3AC, Page 86 dedicated San Marcos Road as a 40-foot-wide public right-of-way, which right-of-
way was assumed by the City of Atascadero upon incorporation; and
WHEREAS, since the dedication of San Marcos Road, geologic conditions have
necessitated a realignment of a portion of the roadway; and
WHEREAS, to complete the realignment, the City will obtain an easement for public
right-of-way from a private property owner at 11285 San Marcos Road comprising approximately
1,190 square feet in exchange for the City’s vacation of a portion of its right-of-way comprising
approximately 1,265 square feet adjacent to said property; and
WHEREAS, pursuant to Streets and Highways Code Sections 8320 et sq., the City Council
adopted Resolution 2025-060 on October 14, 2025, declaring its intent to order the vacation of a
portion of public right-of-way at 11285 San Marcos Road and setting a public hearing for
November 12, 2025, for the order to vacate the public right-of-way; and
WHEREAS, the City Council conducted a duly noticed public hearing on November 12,
2025, as required by Streets and Highways Code Section 8322 on the proposed street vacation and
all persons interested in the vacation were invited to attend and give testimony, if desired, on the
proposed street vacation; and
WHEREAS, the City Engineer has confirmed no City utility facilities currently exist
within the portion of San Marcos Road to be vacated; and
WHEREAS, the proposed vacation is categorically exempt from environmental review
under the California Environmental Quality Act (CEQA) in accordance with Section 15061(b)(3)
of the CEQA Guidelines as it can be seen with certainty that there is no possibility that the activity
in question may have a significant effect on the environment; and
WHEREAS, pursuant to Government Code Section 65402(a), the vacation of the proposed
vacated area is required to facilitate a realignment of San Marcos Road that is minor in nature, and
as such, referral of the vacation to the City’s planning commission pursuant to Section 65402(a)
shall not be required, as the proposed vacation is consistent with the City’s general plan; and
WHEREAS, the area proposed for vacation is no longer needed for public right-of-way
purposes, and the vacation is in the public interest.
NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of
Atascadero:
SECTION 1. The above recitals are true and correct.
Page 57 of 77
11/12/25 | Item G1 | Attachment 1
SECTION 2. A portion public right-of-way at 11285 San Marcos Road is declared to be
unnecessary for present or prospective public street purposes and the City Council orders its
vacation, which is legally described in Exhibit A and shown on Exhibit B, attached hereto and
incorporated by reference.
SECTION 3. The order to vacate a portion of San Marcos Road in Section 2 is subject to
recordation of a right-of-way easement in favor of the City for the approximate 1,190 square foot
area shown on Exhibit B.
SECTION 4. The Director of Public Works is directed and authorized to accept the right-
of-way easement described in Section 3 on behalf of the City.
PASSED AND ADOPTED at a regular meeting of the City Council held on the ____ day of
_____ _, 2025.
On motion by Council Member _________ and seconded by Council Member _______,
the foregoing Resolution is hereby adopted in its entirety on the following roll call vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
CITY OF ATASCADERO
_______________ ____________________
Charles Bourbeau, Mayor
ATTEST:
___________________________________
Lara K. Christensen, City Clerk
Page 58 of 77
EXHIBIT "A"
Legal Description
A portion of San Marcos Road lying easterly of Lot 9 in Block 60, of the Atascadero
Colony, in the City of Atascadero, County of San Luis Obispo, State of California, as
shown the map recorded in Book 3AC, at Page 86 of Maps, in the Office of the
Recorder of said County, described as follows:
All that portion of said Road lying westerly of the following described line:
Commencing at a 1/2 inch rebar with the remains of a yellow plastic cap marking the
northerly terminus of that certain course in the centerline of San Marco Road shown on
the map recorded in Book 50, at Page 3 of Records of Surveys, in the Office of the
Recorder of said County, noted to be N 28˚13’11” E 98.67’ feet;
thence, along said centerline, S 28˚19’16” W 98.59 feet to 1/2 inch rebar, with the
remains of a yellow plastic cap, per said Record of Survey, said rebar marking the
intersection of said centerline with the prolongation southeasterly of the southwest line
of said Lot 9;
thence, leaving said centerline, along said prolongation of said lot line,
N 44˚50’39” W 20.90 feet to the westerly right-of-way of San Marcos Road;
thence, along said westerly right-of-way, N 28˚19’16” E 21.13 feet to the True Point of
Beginning;
thence, leaving said right-of-way, N 21˚22’23” E 64.23 feet to the beginning of a curve
concave westerly, having a radius of 434.00 feet;
thence, along said curve, through a central angle of 15˚36’24” a distance of 118.22 feet;
thence N 5˚45’59 E 19.44 feet to the beginning of a curve concave easterly, having a
radius of 166.00 feet;
thence, along said curve, through a central angle of 35˚44’24” a distance of 103.55 feet;
thence N 41˚30’23” E 4.74 feet to the prolongation southeasterly of the northeast line of
said Lot 9, distant thereon N 59˚49’27” W 12.98 feet from a 1/2 inch rebar with the
remains of a yellow plastic cap per said Record of Survey.
End of description.
___________________
JoAnn B. Head
11/12/25 | Item G1 | Attachment 1| Exhibit A
Page 59 of 77
11/12/25 | Item G1 | Attachment 1| Exhibit B
Page 60 of 77
CITY OF ATASCADERO
CITY COUNCIL STAFF REPORT Item G2
Department: Public Works
Date: 11/12/25
Placement: Public Hearing
TO: JAMES R. LEWIS, CITY MANAGER
FROM: NICK DE BAR, PUBLIC WORKS DIRECTOR/CITY ENGINEER
PREPARED BY: RYAN BETZ, PUBLIC WORKS ANALYST
SUBJECT: 2026 Community Development Block Grant Draft Recommendations
RECOMMENDATION:
Council develop and adopt draft recommendations for the 2026 Community Development Block
Grant (CDBG) funding cycle.
REPORT IN BRIEF:
This report discusses the 2026 CDBG grant funding cycle and the applications received for Council
consideration for draft award recommendations.
DISCUSSION:
BACKGROUND
The award process for the 2026 cycle of Community Development Block Grants (CDBG) began in
the fall of 2025. Workshops were held throughout the County to solicit public comment on
community needs. The County published a request for CDBG proposals and the City received four
applications. The City of Atascadero’s total available funding for the 2026 cycle, based on previous
levels, is anticipated to be approximately $176,247. Final funding amounts are anticipated to be
released by the Department of Housing and Community Development (HUD) in Spring 2026.
CDBG funds are available for community development activities, which meet at least one of the
three national objectives:
1. A benefit to low and moderate-income persons;
2. Aid in the prevention or elimination of blight;
3. Address urgent needs that pose a serious and immediate threat to the health or welfare
of the community.
In order for a program to qualify under the low- and moderate-income objective, at least 51% of
the persons benefiting from the project or program must earn no more than 80% of the area
median. Additionally, at least 70% of the CDBG funds must be spent toward this objective. The
following criteria should also be used to guide selection of CDBG programs:
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1. The proposal is consistent with the national objectives and eligibility criteria of the HUD
CDBG program;
2. The proposal is consistent with the Urban County Consolidated Plan;
3. The proposal is consistent with the General Plan and other City codes/ordinances.
4. The proposal will achieve multiple community development objectives;
5. The proposal can be implemented in a timely manner, without significant environmental,
policy, procedural, legal, or fiscal obstacles to overcome; and
6. The project is not financially feasible without CDBG funding.
CDBG funding is broken into three categories: Public Facilities and Housing Projects, Public
Services, and Administration. Award allocations for Public Services and Administration cannot
exceed 15% and 20%, respectively, of the total CDBG funding amount. The Public Facilities and
Housing Projects category does not have any cap limitations. Council may increase CDBG funding
to Public Facilities and Housing Projects while reducing the funding to Public Services and/or
Administration to an amount less than the category cap limits. It should be noted that the County
Administrative costs are set to 13% of the total CDBG amount to cover their estimated costs to
administer the program.
There is a minimum award threshold of $8,000 per project (application), meaning the City can
allocate less than $8,000 for a particular public service activity if another agency in the County
commits to programming the remainder to equal a Countywide cumulative total of at least
$8,000. Furthermore, Council may recommend a CDBG award more than or less than the
amounts requested on the applications. Council can only make award recommendations to those
applications received for the funding cycle.
ANALYSIS
The City received the following applications for the 2026 CDBG funding cycle:
Public Facilities (PF) and Housing Projects (HP) Category (65% Min.) - Est. $114,561
1. City of Atascadero – Viejo Camino Sidewalk and Accessibility Improvements $116,000
2. Community Action Partnership of San Luis Obispo (CAPSLO) – Minor Home
Repair
32,950
Public Services Category (15% Max.) - Est. $26,437
1. City of Atascadero – Youth Activity Scholarships 13,500
2. El Camino Homeless Organization (ECHO) – Operation of Homeless Shelter 26,437
Administration (20% Max.) - Est. $35,249
1. SLO County – Program Administration (13%) 22,912
2. City of Atascadero – Program Administration (7%) 12,337
Total Funds Requested $224,136
Estimated Funds Available $176,247
Net Difference ($47,889)
Two applications were received for the Public Facilities/Housing Projects category totaling
$148,950, which exceeds the estimated category allocation of $114,561 by $34,389. Two
applications were received for the Public Services category totaling $39,937 which exceeds the
estimated category allocation of $26,437 by $13,500. As part of the CDBG process, Council must
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develop a draft recommendation for the 2026 grant year that meets the funding criteria while
adhering to the categorical limits.
The following is a brief explanation of the funding groups and applications within each.
PUBLIC FACILITIES (PF) & HOUSING PROJECTS (HP) CATEGORY - Est. Available Funds: $114,561
Public Facilities are defined as activities relating to real property, including the acquisition,
construction, rehabilitation or installation of public improvements.
1. City of Atascadero – Viejo Camino Sidewalk and Accessibility Improvements
Funds Requested: $116,000
The City of Atascadero submitted a CDBG application for the Viejo Camino Sidewalk Accessibility
Project. This project proposes to construct approximately 450 linear feet of new ADA compliant
sidewalk, and curb ramps at two locations on Viejo Camino between El Camino Real and Halcon
Road. The sidewalk infill will also provide connection to a regional bus stop which will provide a
new bench and shelter for riders. In addition, a crosswalk with enhanced crossing signs is being
proposed across Viejo Camino at Bocina Lane (Bordeaux House entrance). This crosswalk will be
located mid-block and will provide a direct connection to the RTA transit stop which is frequently
used by nearby residents, thereby preventing crossings at the El Camino Real intersection that
cannot meet ADA requirements due to slope issues.
RTA has provided a letter of support for this project. This project warrants improvements to
increase accessibility for the traveling public due to its dilapidated and non-compliant condition.
The infrastructure improvements providing wheelchair ramps and ADA compliant sidewalks will
aid those with mobility impairments. Council has previously awarded a total of $268,193 in prior
CDBG funding cycles ($68,683 in 2021, $91,442 in 2024, $108,068 in 2025) toward this project,
which has an estimated cost between $400,000 and $650,000, depending on the inclusion of an
enhanced crosswalk to the project improvements. To help offset the cost of the project, staff will
be preparing the engineering design and specifications, with the exception of the electrical design
element.
2. Community Action Partnership of San Luis Obispo County (CAPSLO) – Addresses the unmet
needs of low-income and vulnerable individuals and families.
Funds Requested: $32,950
The project involves the completion of minor home repairs and accessibility improvements in
homes occupied by low and very low-income members within San Luis Obispo County. CAPSLO
will perform outreach and work with its partners to identify households that qualify for the
assistance and have needs that can be met through the program. Once projects are identified,
the program will develop a project description and cost estimate for each project and submit that
information to County staff for review and approval. Approved projects will then be scheduled
for work to be completed by CAPSLO staff. The outcome is to help vulnerable members of San
Luis Obispo remain safely in their own homes, improving their self-sufficiency and independence
and thereby reducing homelessness and dependency.
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PUBLIC SERVICES CATEGORY - Est. Available Funds: $26,437
CDBG regulations allow for a wide range of public service activities, including, but not limited to:
employment services, crime prevention, childcare, health services, substance abuse services, fair
housing counseling and recreational services.
1. City of Atascadero – Youth Activity Scholarship Fund
Funds Requested: $13,500
The City administers the Youth Activity Scholarship Fund to allow the children of low income
families to participate in organized recreation, social and cultural activities, to keep children active
and engaged. The population served would be otherwise unable to afford the activity fees to
participate in the activities of choice without the scholarship. Because this program is limited to
extremely low to moderately low income families, the benefit criteria will be met.
2. El Camino Homeless Organization (ECHO) Navigation Centers – Operation of Homeless Shelter
and Meals
Funds Requested: $26,437
ECHO operates two Navigation Centers, ECHO Atascadero and ECHO Paso Robles, each with
comprehensive services for San Luis Obispo County residents experiencing homelessness and
those in danger of becoming homeless. ECHO also works to meet the needs of unsheltered
residents who have not yet sought emergency shelter through street outreach services and the
needs of residents who are housed but in danger of losing their housing through homeless
prevention services. Requested funds will support the operations of both Navigation Centers
including shelter operations, shelter and outreach case management, shelter coordination,
outreach services including shower and meal programs, rapid rehousing case management and
housing assistance funds, volunteer coordination, staff supervision, and administration costs.
With this support, 1,330 people per year are expected to access services. ECHO leverages
volunteers, partners, and community support to serve and house a large number of people with
a small operating budget.
ADMINISTRATION – Est. Available Funds: $35,249
1. County of San Luis Obispo – CDBG Program Administration- (13%)
Allocated Funds: $22,912
Due to the complexity of grant administration responsibilities and the consequences of non-
compliance, HUD recommends that the County provide all monitoring and oversight for all CDBG
grants. The County assumes the duties of project oversight and receives a required 13% of the
total grant funds for administration services for Atascadero in the amount of $22,912.
2. City of Atascadero – CDBG Program Administration - (7%)
Allocated Funds: $12,337
Significant City staff time from Public Works and Administrative Services is required for CDBG
administration and coordination with County Planning staff. The City’s administrative portion of
the funding cannot exceed 7%, or $12,337 of the total administrative grant amount.
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CONCLUSION
The City received funding requests for approximately $47,889 more than the anticipated 2026
available CDBG funding. In addition, there are limits related to categories of funding for Public
Services and Administration. As part of the CDBG process, Council must develop a draft
recommendation for the 2026 grant year that meets the funding criteria while adhering to the
category limits.
Upon approval, the draft funding recommendations will be forwarded to the County for
publishing along with recommendations from all participating agencies. A minimum of 30 days
after publication, a second workshop will be held to allow questions from applicants regarding
the draft recommendations, after which the draft allocations will be forwarded to City Council,
with comments from the workshop, for final approval and forwarded to the County Board of
Supervisors. A final recommendation will be made by Council in February 2026.
ALTERNATIVES TO THE STAFF RECOMMENDATION:
None.
FISCAL IMPACT:
Approval of Atascadero’s total 2026 CDBG allocation would result in the estimated revenue and
expenditure of $176,247 of CDBG funds.
REVIEWED BY OTHERS:
This item has been reviewed by the Administrative Services Director.
REVIEWED AND APPROVED FOR COUNCIL AGENDA
James R. Lewis, City Manager
ATTACHMENTS:
2026 CDBG Applications are available to view online at the following link:
2026 CDBG Applications
Page 65 of 77
CITY OF ATASCADERO
CITY COUNCIL STAFF REPORT Item H1
Department: Public Works
Date: 11/12/25
Placement: Management
Report
TO: JAMES R. LEWIS, CITY MANAGER
FROM: NICK DE BAR, DIRECTOR OF PUBLIC WORKS/CITY ENGINEER
PREPARED BY: RYAN HAYES, DEPUTY DIRECTOR OF PUBLIC WORKS
SUBJECT: City Manager’s Task Force on Wastewater Report and WWTP Project Update
RECOMMENDATION:
Council review and file report.
REPORT IN BRIEF:
This report discusses activities of the City Manager’s Task Force on Wastewater and a progress update
for the Wastewater Treatment Plant (WWTP) Project including proposed next steps and timelines.
DISCUSSION:
BACKGROUND
The City of Atascadero provides wastewater collection and treatment service for nearly all commercial
and industrial properties, as well as a portion of the City’s residential population. Sewered parcels are
generally within the more urban core of Atascadero, with approximately 2,000 acres of the roughly
15,000 acres within the City boundary connected to the sewer system. Within this area, there are
approximately 5,500 parcels, with the remainder of the City’s population served by private on-site septic
systems. Wastewater services are considered a community investment that helps ensure public health
and safety, economic prosperity, and maximizes land use potential and reasonable development and
expansion for businesses, residents and other community buildings. The City of Atascadero assumed
ownership and operation of the wastewater collection and treatment system from the Atascadero
County Sanitation District in 1982 shortly after incorporation (1979). While there have been upgrades,
modifications, and additions to wastewater treatment facilities, the overall process has not changed
significantly since 1982 and is considered a stabilization pond treatment system.
New regulatory requirements were adopted on September 25, 2020, by the Central Coast Regional
Water Quality Control Board (RWQCB) as the General Waste Discharge Requirements (WDR) Order No.
R3-2020-0020 for Discharges from Domestic Wastewater Systems with Flows Greater than 100,000
Gallons per Day (WDR General Permit). The City applied for enrollment in the new General Permit in
December 2021 and became formally enrolled in the new permit on June 6, 2023. The General Permit
adopts stringent effluent discharge requirements for discharge of treated effluent to land, effectively
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prohibiting the continued use of stabilized pond treatment systems and requiring that the City construct
a new wastewater treatment facility. At a minimum, the secondary treatment process of removing
nitrogen and organics from the waste stream will involve replacing the existing secondary treatment
process of stabilization ponds with a more robust mechanical process for reducing organics from the
wastewater influent.
In addition to the new regulatory requirements, the WWTP is also capacity constrained, with current
average daily flows effectively at 100% of treatment capacity. With a number of significant
developments slated to come online in the next several years and Atascadero State Hospital in
negotiations with the City to become a customer as well, it is expected that the WWTP will be unable to
treat average and wet weather flows within the very near future.
Although the capacity challenges had been identified as an ongoing issue for decades, the focus on water
conservation over the past twenty years kept wastewater influent flows at a manageable level and
allowed the existing plant to continue operating. However, the growth and densification of the City over
the last several years, combined with the new regulatory requirements, resulted in the recognition in
2020 that constructing a new WWTP was imperative and the time to do so was limited. City staff has
subsequently spent the ensuing years evaluating alternatives and charting a viable pathway forward for
major improvements to and investment in the WWTP.
Unfortunately, while it has been recognized since the early 2000’s that a new WWTP would be necessary
at some point, the magnitude of the project was not understood until the last few years. The increase
in project scope from new regulations, coupled with the rapid escalation of construction costs since
2020, have resulted in the anticipated construction costs for the project rising from an estimated $30
million in 2016 to approximately $125 million today. Financing the project is the most critical challenge
at this time, given that historic underfunding (wastewater service rates and capacity charges were not
raised for 25 years between 1994 and 2019) left the City with minimal reserves with which to pay for
these improvements. As such, much of staff’s efforts in 2025 have been focused on completing a
wastewater rate study, facilitating a wastewater task force, pushing back on new regulations, and
advertising for and selecting an engineering design consultant for the secondary treatment
improvements and upgrades.
WASTEWATER TASK FORCE
As part of the discussion for the wastewater rate increase at the Council meeting on June 10, 2025, staff was
tasked with three significant efforts intended to provide clarity and direction as the City moves into WWTP
design. These efforts include completing a wastewater user classification study and volumetric analysis,
conducting an Inflow and Infiltration (I/I) Study to determine if there are high benefit/cost collection system
improvement projects that would reduce the needed WWTP size and cost, and facilitating a wastewater task
force intended to gather public input and build consensus. The first two tasks are currently underway, with
results expected to be presented to Council in summer 2026. A summary of the wastewater task force
participants, meeting dates and topics, and key findings are discussed in greater detail below.
The intention of the City Manager’s Task Force on Wastewater was to gather together a cross-section of
stakeholders willing to learn about the wastewater system in depth and provide recommendations for a path
forward. The following are objectives and desired outcomes from the task force:
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1. To understand the importance of the wastewater systems and operations;
2. To understand the various challenges the City is facing with wastewater;
3. To understand how we got here and how we get out;
4. To understand potential solutions and paths forward; and
5. To provide feedback and advise.
The task force was assembled with the intention of providing a voice for a broad range of residents, business
owners, and developers. The City truly wishes to thank the wastewater task force members listed below,
who gave a significant amount of time and energy to participate in this important effort:
Name Role Other wastewater qualifications
Barbara Lynch City Resident Retired City Engineer for San Luis Obispo
Derek Stoltzfus Business Owner - Laundromat
Greg Squires
Business Owner - Parable Group/Story
Labs Co-Op/Resident
Grigger Jones City Resident AMWC Board Member
Joey Ferrell Atascadero Chamber of Commerce Board
Chairperson
John Neil AMWC General Manager Licensed Civil Engineer
Judy Hemenway Resident/Senior Center Board Retired Engineer
Marcus Henderson Resident Cal Poly Water Resources Manager
Mark Marshall Business Owner (Construction)
Max Zappas Resident/Builder/Commercial and Multi-
Family Residential Property Owner
Mike Zappas Resident/Builder/Commercial and Multi-
Family Residential Property Owner
Seth Peek Council Member
Straith Smith-
Zanartu
Resident/Retired SLO County Finance
Division Manager Experience with Los Osos sewer project
Susan Funk Council Member
The task force calendar was comprised of four meetings, structured to provide a detailed background of the
history of the Atascadero collection and treatment systems, the regulatory changes and capacity issues
driving the need for wastewater upgrades, an overview of available treatment alternatives and estimated
costs, and a discussion on funding alternatives, wastewater services rates and capacity charges. The meeting
dates and topics were as follows:
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Meeting 1: Wednesday, July 30, 2025 4:00 PM – 5:30 PM
Meeting 2: Tuesday, August 12, 2025 11:00 AM – 12:30 PM
Meeting 3: Wed., September 3, 2025 10:00 AM – 11:30 AM
Meeting 4: Friday, September 26, 2025 9:30 AM – 11:00 AM
The 90-minute meetings were structured to begin with introductions (Meeting 1) and prior meeting recap
(Meetings 2-4), followed by staff topic presentation, and ending with questions/answers and discussion. The
task force was asked a number of questions during the first three meetings that had impacts to alternatives
and solutions, and how the City approaches the next steps. Robust discussions occurred at each meeting
and a variety of questions were answered, concerns were aired and solutions were discussed.
At the last meeting, alternatives for addressing the current wastewater challenges were discussed by the
group. A large consensus was made on several points. The task force endorsed the following statements
listed below:
1. We desire that the City continue to operate the WWTP and not sell it to a private or third party.
2. We do not want to impede future City growth and development, however, development should pay
its full share of costs.
3. We do not intend to treat salts at the new RWQCB effluent limits based on data points that are
questionable, and will push back on requirements to do so.
4. We understand serving ASH spreads out costs of the system, however, all costs and impacts of the
ASH connection shall be borne by ASH.
5. We will actively pursue partnerships with other nearby agencies.
6. We want to perform a new volumetric analysis and study for customer user classification and rate
schedules, including consideration of consumption, distance, and other metrics for methods of
calculating contribution.
7. Continue to pursue and advocate for additional State and Federal funding sources.
These items provide staff a clear pathway forward with regard to design and construction of the new WWTP,
as well as areas of focus for coordination with other nearby agencies and ASH. Funding of the WWTP and
near-term necessary collection system improvements remain the largest unknowns, but staff is moving
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forward with the volumetric analysis and customer user classification with the intention of establishing the
most transparent and equitable method possible for allocation of future costs. It is expected that the
wastewater task force will be reconvened in the spring or summer of 2026 to review and provide input on
the draft customer user classification study.
It is important to note that the current wastewater rate study adopted in June 2025 only accounts for the
interim and secondary wastewater treatment improvement costs (est. $130M) and does not include costs
to meet the salts regulatory requirement (est. $30-40M). Furthermore, only a small fraction ($10M) of the
total collection system improvements identified in the 2025 Collection System Master Plan ($110M) were
included in the 2025 Rate Study to keep rates at a manageable level. These collection system improvements
are necessary to accommodate existing and future flows identified with the 2045 General Plan Update. The
following table summarizes the complete 10-Year Wastewater Program costs if all costs were included.
NEXT STEPS AND SCHEDULE
WWTP Project
Should Council authorize staff to move forward with the design engineering contract with Black & Veatch, it
is anticipated project will follow baseline schedule below:
The schedule above was initially developed for the Time Schedule Compliance Plan (TSCP), as required by
the WDR General Permit. In order for the City to remain in compliance with the General Permit, replacement
of the WWTP will need to continue to track with these dates to the greatest extent possible. The design
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engineering contract is structured to allow for Council input and approval at critical points along the way.
These decision points will be at process selection, preliminary design recommendation, final design, and
construction award.
Public Engagement and Outreach (ongoing)
Ongoing efforts with a focus on State requirements for WWTP project, community benefits, and
opportunities to lessen impact to rate payers. City Manager’s Task Force on Wastewater to reconvene as
needed.
Regional Partnerships (now – late 2026)
Explore regional partnerships with nearby jurisdictions with the goal of lessening impact on rate payers by
spreading costs while meeting State requirements. Potential partners include ASH, AMWC, Templeton CSD,
and Santa Margarita.
Customer User Classification Study (now – October 2026)
Study to update customer user classification and rate schedule to better reflect rates and customer
contributions to wastewater system, including consideration of consumption, distance, and other metrics
for methods of calculating contribution. A request for proposals is currently out for solicitation and staff
anticipates Council award to successful consultant at regular meeting on December 9, 2025.
Rate Adjustments and Studies (now – March 2027)
Sewer capacity charge increase from $6,769 to $8,856/EDU approved by Council on 10/14/25 with new
rates effective 12/14/2025.
Consider FY26/27 sewer service charge increase in March to June 2026.
Prepare updated wastewater rate study from October 2026 to March 2027 that incorporates:
o New customer user classification schedule
o Detailed preliminary costs estimates for WWTP project
o Potential regional partnerships
o Funding options
FISCAL IMPACT:
The recommendation for Council associated with this report does not have a direct fiscal impact.
ALTERNATIVES:
Council may direct staff to seek additional public input prior to initiating preliminary design engineering.
This alternative is not recommended since the wastewater task force provided an excellent cross-section
of affected Atascadero citizens and additional public outreach events are not expected to provide
significant benefit.
REVIEWED BY OTHERS:
This item has been reviewed by the Administrative Services Director.
REVIEWED AND APPROVED FOR COUNCIL AGENDA
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James R. Lewis, City Manager
ATTACHMENT(S):
None
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CITY OF ATASCADERO
CITY COUNCIL STAFF REPORT Item H2
Department: Public Works
Date: 11/12/25
Placement: Management
Report
TO: JAMES R. LEWIS, CITY MANAGER
FROM: NICK DE BAR, DIRECTOR OF PUBLIC WORKS/CITY ENGINEER
PREPARED BY: RYAN HAYES, DEPUTY DIRECTOR OF PUBLIC WORKS
SUBJECT: Wastewater Treatment Plant Design Engineering Contract Award
RECOMMENDATIONS:
Council:
1. Award a professional services agreement for up to $9,749,491 to Black & Veatch for Design
Engineering for the Atascadero Water Reclamation Facility Replacement Project (City Proj. No.
C2020W03).
2. Authorize Black & Veatch to proceed with Phase 1 work (Process Selection and Preliminary Cost
Estimate) for the Atascadero Water Reclamation Facility Replacement Project for $520,840.
DISCUSSION:
BACKGROUND
City staff has spent the last five years evaluating alternatives and charting a viable pathway forward for
major improvements and modifications to the Wastewater Treatment Plant (WWTP). These
improvements are required to comply with new regulatory requirements and discharge limitations for
the plant, and to increase treatment capacity to accommodate future growth in the City and expansion
of the wastewater collection system.
New regulatory requirements were adopted on September 25, 2020, by the Central Coast Regional
Water Quality Control Board (RWQCB) as the General Waste Discharge Requirements (WDR) Order No.
R3-2020-0020 for Discharges from Domestic Wastewater Systems with Flows Greater than 100,000
Gallons per Day (WDR General Permit). The City applied for enrollment in the new General Permit in
December 2021 and became formally enrolled in the new permit on June 6, 2023. The General Permit
adopts stringent effluent discharge requirements for discharge of treated effluent to land, effectively
prohibiting the continued use of the existing lagoon treatment type and requiring that the City construct
a new wastewater treatment facility. At a minimum, the secondary treatment process of removing
nitrogen and organics from the waste stream will involve replacing the existing secondary treatment
process of stabilization ponds with a more robust mechanical process for reducing organics in the
wastewater influent.
Enrollment in the General Permit in 2023 initiated a series of required reports, as well as officially started
the timeline for compliance with the new permit effluent limits. Given the time limitations of City staff
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and the extensive workload associated with a full replacement of the WWTP, the City contracted in
January 2024 with Water Systems Consulting (WSC) to provide program management services for the
project. WSC effectively functions as an extension of staff and solely on the City’s behalf, so was
restricted from providing design engineering services.
In order to remain in compliance with the General Permit, the City was required to submit a Time
Schedule Compliance Plan (TSCP) with a schedule for coming into compliance with the new effluent
limits. Bringing on a design engineer at this time is critical to staying on track for completing construction
of a new secondary treatment WWTP facility by 2030 as identified in the TSCP. The schedule below
reflects the major project milestones to date, along with the staff’s best estimate of the timing of future
events.
9/2020 Central Coast Regional Water Quality Control Board adopts General Waste
Discharge Requirements Order No. R3-2020-0020 (General Permit)
1/2021 City hires WSC to prepare Alternatives Analysis
2/2023 WSC completes Alternatives Analysis
6/2023 City receives notice of formal enrollment in WDR General Permit
1/2024 City hires WSC for Program Management Services
7/2025-9/2025 City staff holds City Manager’s Wastewater Task Force meetings
9/2025 Public Works staff advertises RFP for Design Engineering Services, and tentatively
selects Black & Veatch as the most qualified consultant.
11/12/2025 Council consider authorizing Phase I, “Process Selection and Preliminary Cost
Estimate,” of contract with Black & Veatch
Winter 2025-
Spring 2026
Evaluate alternatives and select cost-effective, robust and adaptable treatment
process and prepare preliminary cost estimate.
Conduct Collection System Inflow & Infiltration Study (Carollo)
Initiate Customer User Classification Study (Consultant TBD)
Spring 2026 Council consider authorizing Phase II, “Preliminary Design,” of contract with Black
& Veatch
Spring 2026-Fall
2026
Develop preliminary design report for WWTP upgrade, complete building facilities
analysis, and complete Class 4 Opinion of Probable Cost
Initiate Wastewater Rate Study based on refined WWTP cost estimate (Consultant TBD)
Fall 2026 Council consider authorizing Phase III, “Detailed Design,” of contract with Black &
Veatch
Fall 2026-Spring
2028 Preparation of Final Engineering Plans, Specifications and Estimates.
Spring 2028
Council consider awarding necessary construction contracts, and consider
authorizing Phase IV, “Bid Phase and Engineering Services During Construction,” of
contract with Black & Veatch
Summer 2028-Fall
2030 WWTP Construction
ANALYSIS
Staff prepared a Request for Proposal (RFP) and solicited proposals in July 2025 from qualified consultants to
provide design services and prepare construction plans and specifications for the project. Services to be
provided by the consultant are extensive, but are split into the following four phases:
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Phase 1 – Process Selection and Preliminary Cost Estimate
Phase 2 – Preliminary Design
Phase 3 – Detailed Design
Phase 4 – Engineering Services During Construction
Splitting the work scope into four phases both allows the City to better manage the limited wastewater
fund reserves and provides logical break points at which to assess progress and decisions made, and
engage Council and other stakeholders.
WSC reached out to multiple engineering firms ahead of RFP issuance, but ultimately staff received
proposals from two very qualified consultants: Black & Veatch and Carollo. Proposals were individually
reviewed and scored by a technical selection committee comprised of six members, who considered
experience with similar projects, responsiveness to City needs, experience of key personnel, wastewater
design expertise and other factors. Of particular importance to staff on this project is that the selected
consultant understands the financial constraints and be experienced in exploring a broad range of
solutions to provide a new WWTP that is robust, O&M friendly, adaptable, and cost-effective. After
initial review of the proposals, City staff held interviews with both consultants to allow for further
evaluation of their project team members and anticipated project approach. The City was fortunate to
receive excellent proposals from Black & Veatch and Carollo, and following evaluation of the proposals
and the interviews, the selection committee unanimously agreed that Black & Veatch was the most
qualified consultant for the Wastewater Treatment Plant Replacement Project.
Black & Veatch provided a detailed fee estimate worksheet with their proposal that included labor
hours/costs, reimbursable expenses, and subconsultant fees for the work scope identified in the City’s
request for proposals. City staff and WSC reviewed Black & Veatch’s work scope and fee and have
determined that it is reasonable. Since the secondary treatment process will not be selected until the
completion of Phase 1 work, fees for Phase 2 through 4 are conservatively estimated based upon
selection of a Membrane Bioreactor (MBR) treatment process - which is anticipated to require the most
amount of work to design. After selection of a secondary treatment process (Phase 1), staff will work
with Black & Veatch to determine if initial proposal fees are appropriate for following phases or will need
to be adjusted.
Staff is recommending that Council award a single contract to Black & Veatch for all phases of work (up
to $9,749,491) but only authorize proceeding with Phase 1 work (Process Selection and Preliminary Cost
Estimate for $520,840. By phasing the contract in this manner, the City has an opportunity to assess
financial constraints on the project and additional information obtained after each phase, rather than
committing to the entire scope of work at the outset. Upon completion of this work, staff will prepare
a staff report for Council to review Phase 1 work and the secondary treatment process being
recommended and consider authorizing proceeding with Phase 2 work. Any credit adjustments from
the initial proposal fees related to Phase 1 will be documented through a change order process.
Compensation in the professional services agreement is based upon actual hours worked by class rate
plus reimbursable expenses and subconsultant fees. Furthermore, the City may terminate the
agreement, without clause, at any time provided a written 30-day notice is provided.
FISCAL IMPACT:
Adopting staff recommendations will result in the expenditure of $520,840 from budgeted Wastewater
Funds, and potential future expenditures up to $9,228,651 as approved by Council for future phases of
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design work. The adopted FY2025-2027 budget includes $2,000,000 in FY2025/2026 and $4,000,000 in
FY2026/2027 from the Wastewater Fund for this project. Staff anticipate these amounts will be adequate
to cover Black & Veatch fees projected during the current budget cycle for Phases 1 and 2 ($1,130,536
combined) and roughly half of Phase 3 ($3,000,000). Furthermore, Phases 2 through 4 fees shown below
may be adjusted based upon secondary treatment process type selected and any other additional
information developed during Phase 1.
Future funding totaling $6,000,000 will be needed in the next two budget cycles to complete design work
and provide engineering design support during project construction. Of this amount, roughly $4,000,000
will be required to make the project “shovel ready”. Staff is currently working on seeking grants,
partnerships, rate increases, and other means to complete design work and fund the estimated $100+
million construction cost for treatment plant improvements. Outcomes from these efforts will be better
known at the time of future budget cycles.
The following tables summarize estimated expenditures, budgeted funding, and future funding needs
described above.
ESTIMATED EXPENDITURES
Program Management (WSC) and administration (FY25/26-FY30/31) $2,000,000
City staff time, admin., legal, etc. 250,509
Black & Veatch
Phase 1 – Process Selection & Preliminary Cost Estimate (FY25/26) 520,840
Phase 2 – Preliminary Design Report* (FY25/26-FY26/27) 609,696
Phase 3 – Detailed Design* (FY26/27-FY27/28) 6,532,523
Phase 4 – Engineering Services During Construction* (FY28/29-FY30/31) 2,086,432
*requires future Council authorization
Total Estimated Expenditures: $12,000,000
BUDGETED FUNDING
Wastewater Funds (FY 2025-2027 Budget) $6,000,000
Total Budgeted Funding $6,000,000
FUTURE FUNDING NEEDS (DESIGN)
Wastewater Funds (FY 2027-2029 Budget) $5,000,000
Wastewater Funds (FY 2029-2031 Budget) 1,000,000
Total Future Funding $6,000,000
ALTERNATIVES:
Council may direct staff to resolicit for design engineering services for the project, but staff does not
recommend this since the two proposals received were from highly qualified firms and very competitive.
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REVIEWED BY OTHERS:
This item has been reviewed by the Administrative Services Director.
REVIEWED AND APPROVED FOR COUNCIL AGENDA
James R. Lewis, City Manager
ATTACHMENT(S):
None
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