Joint Sand City Council and Successor Agency of the Redevelopment Agency

Joint Sand City and Successor Agency of the Redevelopment Agency 12.21.21 Council Meeting Minutes _________________________ MINUTES JOINT SAND CITY COUNCIL AND SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY Regular Meeting - Tuesday, December 21, 2021 5:30 PM As allowed per Assembly Bill (AB361), this meeting was conducted in person and by teleconference Mayor Carbone opened the meeting at 5:31 p.m. AGENDA ITEM 1, ROLL CALL Present: Mayor Mary Ann Carbone Council Member Cruz (virtual attendance) Council Member Sofer (virtual attendance) Council Member Hawthorne {excused absence} Council Member Blackwelder (virtual attendance) Staff: Vibeke Norgaard, Acting City Manager Connie Horca, City Clerk (virtual attendance) Charles Pooler, City Planner Brian Ferrante, Chief of Police Devon Lazzarino, Accounting Specialist AGENDA ITEM 2, PLEDGE OF ALLEGIANCE The pledge of allegiance was led by City Planner Pooler. AGENDA ITEM 3, INVOCATION The invocation was led by Reverend Robert Hellam. AGENDA ITEM 4, ANNOUNCEMENT BY MAYOR, CITY ATTORNEY, & CITY STAFF Acting City Manager/City Attorney Norgaard reported on the status of the City phone lines, internet connection, City manager recruitment, scheduled water shut-off, conclusion of the Art Park cornhole event, grand opening of Total Wine, and success of the Santa-Con event. Mayor Carbone reported on the Central Coast Community Energy increase to begin January 2022, victim training provided by the Restorative Justice Commission, the AMBAG-RHNA numbers, young professionals event, her attendance at the Total Wine soft opening, the Monterey Fire Departments Christmas Toy Drive, and the Red Kettle Luncheon hosted by the Salvation Army. AGENDA ITEM 5, COMMUNICATIONS 5:43 P.M. Floor opened for Public Comment.

Joint Sand City and Successor Agency of the Redevelopment Agency 12.21.21 Council Meeting Minutes _________________________ Mr. Todd Sheller, Vice President of Lyles Diversified Inc., provided an update on the South of Tioga project and the water main on Sabu Shake Way. Sand City resident Tom McCullough, who also serves as a Board Member of Monterey Bay racing suggested a racing program within the City. He was informed to contact the Acting City Manager and City Planner. 5:46 P.M. Floor closed to Public Comment. AGENDA ITEM 6, CONSENT CALENDAR 6A. There was no discussion of the Sand City Council Meeting Minutes of November 23, 2021 Special City Council Meeting and the December 7, 2021 Regular Council Meeting. 6B. There was no discussion of the City Resolution Updating Schedule M, City Clerk Fees and Charges related to Administrative Department Fees 6C. There was no discussion of the City RESOLUTION Authorizing Continued Banking Services Agreement with Mechanics Bank 6D. There was no discussion of the City RESOLUTION Recognizing Mayor Mary Ann Carbone for 30 years of Exemplary Service to the City of Sand City 6E. There was no discussion of the City Donation/Contribution to Jacobs Heart Children's Cancer Services for $250. 5:47 P.M. Floor opened for Public Comment. There were no comments from the Public in person, via writing or through telecommunications. 5:47 P.M. Floor closed to Public Comment. Motion to approve the Consent Calendar was made by Council Member Blackwelder, seconded by Council Member Sofer. Roll call Vote AYES: Council Members Blackwelder, Carbone, Cruz, Sofer. NOES: None. ABSENT: Council Member Hawthorne. ABSTAIN: None. Motion carried. AGENDA ITEM 7, CONSIDERATION OF ITEMS PULLED FROM CONSENT CALENDAR There were no items pulled from the Consent Calendar. AGENDA ITEM 8, ORDER OF BUSINESS {Council Member Cruz recused from the meeting due to a possible conflict by residing within 500’ of the subject property} 8A. Consideration of City RESOLUTION Approving a Memorandum of Understanding (MOU) between the City of Sand City and DBO Development

Joint Sand City and Successor Agency of the Redevelopment Agency 12.21.21 Council Meeting Minutes _________________________ No. 30, LLC regarding South of Tioga Public Improvements and Fund for the Edgewater Habitat Restoration Acting City Manager Norgaard presented the Memorandum of Understanding (MOU) regarding the South of Tioga Public Improvements and Fund for the Edgewater Habitat restoration. She reported that the agreement ensures that promised funds to the habitat is established, provides for details regarding public improvements for the remaining portions of California Avenue, and outlined the details of annual payments to be made for the habitat. Approval of the MOU will result in a positive fiscal impact of $110,000 over a five-year period dedicated to funding the City’s maintenance of the North of Playa Habitat area. Staff recommends approval of the attached resolution. 5:51 P.M. Floor opened for Public Comment. Todd Sheller, Vice President of Lyles Diversified Inc. commented on the hard work placed in the creation of the MOU and expressed his pleasure in working with Ms. Norgaard and the former City Manager Blair. 5:57 P.M. Floor closed to Public Comment. Motion to approve the City Resolution approving a Memorandum of Understanding (MOU) between the City of Sand City and DBO Development No. 30, LLC regarding South of Tioga Public Improvements and Fund for the Edgewater Habitat Restoration was made by Council Member Blackwelder, seconded by Council Member Sofer. Roll call Vote AYES: Council Members Blackwelder, Carbone, Sofer. NOES: None. ABSENT: Council Member Hawthorne. ABSTAIN: Council Member Cruz. Motion carried. AGENDA ITEM 9, PUBLIC HEARING 9A. Second Reading of ORDINANCE of the City Council of the City of Sand City approving the First Amendment to the Development Agreement by and between DBO Development No. 30, LLC and the City of Sand City relating to the development commonly known as the South of Tioga Project Acting City Manager/City Attorney Norgaard presented the second reading of the Ordinance. She reported that the Council approved the first reading at the December 7, 2021 Council meeting and highlighted the amendments to the Development Agreement that included replacement of the Consumer Price Index used to calculate the CFD tax payment, the limited temporary tax credit, amendment of the VTM for public parks, and construction of the remaining portions of California Avenue. Staff recommends approval of the second reading of the Ordinance approving the First Amendment to the Development Agreement. 5:57 P.M. Floor opened for Public Comment. There were no comments from the Public in person, via writing or through telecommunications.

Joint Sand City and Successor Agency of the Redevelopment Agency 12.21.21 Council Meeting Minutes _________________________ 5:57 P.M. Floor closed to Public Comment. Motion to waive full reading of the City Ordinance approving the First Amendment to the Development Agreement by and between DBO Development No. 30, LLC and the City of Sand City relating to the development commonly known as the South of Tioga Project was made by Council Member Blackwelder, seconded by Council Member Sofer. Roll call Vote AYES: Council Members Blackwelder, Carbone, Sofer. NOES: None. ABSENT: Council Member Hawthorne. ABSTAIN: Council Member Cruz. Motion carried. Motion to approve the Second Reading by title only, of the City Ordinance approving the First Amendment to the Development Agreement by and between DBO Development No. 30, LLC and the City of Sand City relating to the development commonly known as the South of Tioga Project was made by Council Member Blackwelder, seconded by Council Member Sofer. Roll call Vote AYES: Council Members Blackwelder, Carbone, Sofer. NOES: None. ABSENT: Council Member Hawthorne. ABSTAIN: Council Member Cruz. Motion carried. 9B. Consideration and Approval of City RESOLUTION to Establish Community Facilities District No. 2021-1 (South of Tioga Project and to Authorize the Levy of Special Taxes Acting City Manager/City Attorney Norgaard reported that she has been working with Sara Mares of NBS Consulting on the establishment of a Community Facilities District (CFD) for the South of Tioga project. Ms. Norgaard provided information on the resolution of intention and noted that a CFD involves a special financing agreement required to offset the cost of the development. She introduced Sara Mares who provided additional information regarding what would be required for the formation of a CFD, background information on Prop 13 which changed the way cities can raise revenue, and details on the timeline for the formation of the CFD. A first and second reading to form the district would occur as well as resolutions that will need to come before the Council for approval. A boundary map will need to be recorded, ballot mailed, and notices published prior to the public hearing date. Sara Mares responded to questions regarding how the CFD election will be conducted, and that the City should see the funds once the first certificate of occupancy is established. Mr. Sheller mentioned that the hotel is ready to construct, and reported on the progress of Phase 1. Ms. Mares also provided information regarding the petition process, calling of election, and canvassing of votes for the formation of the CFD. 6:15 P.M. Floor opened for Public Comment.

Joint Sand City and Successor Agency of the Redevelopment Agency 12.21.21 Council Meeting Minutes _________________________ There were no comments from the Public in person, via writing or through telecommunications. 6:15 P.M. Floor closed to Public Comment. Motion to approve the City Resolution to establish Community Facilities District No. 2021-1 (South of Tioga Project and to Authorize the Levy of Special Taxes was made by Council Member Sofer, seconded by Council Member Blackwelder. Roll call Vote AYES: Council Members Blackwelder, Carbone, Sofer. NOES: None. ABSENT: Council Member Hawthorne. ABSTAIN: Council Member Cruz. Motion carried. {Council Member Cruz returned to the meeting} 9C. Consideration of City RESOLUTIONS regarding the Sand City Sustainable Transportation Plan 1) Approval of City Resolution Adopting a Negative Declaration regarding the Sand City Sustainable Transportation Plan 2) Approval of City Resolution Adopting the Sand City Sustainable Transportation Plan 3) Approval of City Resolution to Approve a Mitigation Monitoring Program for the Sand City Sustainable Transportation Plan City Planner Charles Pooler reported that the first draft of the Sustainable Transportation Plan was presented to the Council on October 5, 2021 and is being presented for final adoption in addition to adoption of a mitigated negative declaration and Mitigation Monitoring and Reporting Program. He introduced Mr. Richard James of EMC Planning Group who will be giving the presentation. Mr. James provided the background regarding the SB 1 Sustainable Communities Grant from Caltrans for the preparation of a City-wide Sustainable Transportation Plan in order to coordinate future improvements for pedestrian, bicyclist, and the mobility challenged. He presented the plan description, and an overview map of specific locations within the City that would be addressed. The plan would take into consideration the railroad corridor trail improvements, ADA access at the shopping center, scenic trail interim improvements behind HomeGoods, West End-East Dunes route, and also provided an illustration of the second changes to the 1st draft. Mr. James also presented the results of the prioritization survey with the railroad corridor ranking first and the bicycle tail connection at California Avenue to Seaside High School second. Mr. James recommended that the Council consider adoption of the mitigated negative declaration, approval of the Sustainable Transportation Plan, and adoption of the Mitigated Monitoring Program. City Planner Pooler added that new designs were presented to incorporate aspects of the plan, and suggested that the Council establish priorities of which improvements would occur foremost when updating the Capital Improvement Plan (CIP).

Joint Sand City and Successor Agency of the Redevelopment Agency 12.21.21 Council Meeting Minutes _________________________ Mr. Pooler addressed Council Member Blackwelder’s inquiry regarding the ADA access form McDonalds, and noted that the plan involves making the area safer by identifying vehicles and people walking. 6:40 P.M. Floor opened for Public Comment. There were no comments from the Public in person, via writing or through Telecommunications. 6:40 P.M. Floor closed to Public Comment. 1) Motion to approve the City Resolution adopting a Negative Declaration regarding the Sand City Sustainable Transportation Plan was made by Council Member Sofer, seconded by Council Member Blackwelder. Roll call Vote AYES: Council Members Blackwelder, Carbone, Cruz, Sofer. NOES: None. ABSENT: Council Member Hawthorne. ABSTAIN: None. Motion carried. 2) Motion to approve the City Resolution adopting the Sand City Sustainable Transportation Plan was made by Council Member Sofer, seconded by Council Member Blackwelder. Roll call Vote AYES: Council Members Blackwelder, Carbone, Cruz, Sofer. NOES: None. ABSENT: Council Member Hawthorne. ABSTAIN: None. Motion carried. 3) Motion to approve the City Resolution to Approve a Mitigation Monitoring Program for the Sand City Sustainable Transportation Plan was made by Council Member Blackwelder, seconded by Council Member Sofer. Roll call Vote AYES: Council Members Blackwelder, Carbone, Cruz, Sofer. NOES: None. ABSENT: Council Member Hawthorne. ABSTAIN: None. Motion carried. AGENDA ITEM 10, NEW BUSINESS 10A. Consideration of City RESOLUTION Approving a Service Agreement with SLV Management (Stephen Vagnini) for the 2022 West End Celebration (WEC) Acting City Manager/City Attorney Norgaard reported that Staff seeks approval of the attached contract for the 2022 West End Celebration. The contract is the same as the previous year, will be expensed over two fiscal years, is budgeted for $80,000, with $27,500 allocated for Mr. Vagnini’s services. The proposed budgets from last year and 2022 are attached for comparison. Staff recommends the Council approve the attached resolution approving a service agreement for the 2022 West End Celebration. There was Council discussion regarding provisions in the event of cancellation. Ms. Norgaard pointed out that provisions are provided for on page 670 of the agenda packet that allows the Council to reserve the right to cancel, and that Vagnini is required to ensure that any sub-agreements entered into will allow for full reimbursement to the extent it is feasible.

Joint Sand City and Successor Agency of the Redevelopment Agency 12.21.21 Council Meeting Minutes _________________________ 6:52 P.M. Floor opened for Public Comment. Mr. Vagnini reported on the 2020 event that did not happen, the successful event that was held in 2021, safety concerns, the ability to cancel, and anticipation that Covid cases will decrease by the summer to provide for a wonderful 2022 celebration. 6:53 P.M. Floor closed to Public Comment. Motion to approve the City Resolution approving a Service Agreement with SLV Management (Stephen Vagnini) for the 2022 West End Celebration (WEC) was made by Council Member Blackwelder, seconded by Council Member Sofer. Roll call Vote AYES: Council Members Blackwelder, Carbone, Cruz, Sofer. NOES: None. ABSENT: Council Member Hawthorne. ABSTAIN: None. Motion carried. 10B. Presentation on and Consideration of the Audited Financial Statements for the Year ended June 30, 2021 and Independent Auditors Report by Therese Courtney and Mike Nolan of Hayashi and Wayland, LLC 1) Approval of City RESOLUTION Accepting the Audited Financial Statements for the Year ended June 30, 2021 and Independent Auditor's Report Mayor Carbone welcomed Mike Nolan from Hayashi and Wayland, LLC who will be providing the presentation on the audited financial statements for year ended June 30, 2021. Mr. Nolan reported that staff met with the Budget Committee on November 9, 2021 to review the draft audited financial statements. The final audited financial statements represent the auditors clean unmodified opinion in all respects. He reported that the City’s assets exceeded its liabilities resulting in a net position of $1.25M, depreciation of capital assets, increase in pension liabilities, and property and sales tax transactions. The decrease in expenses throughout all departments added to the positive net change. There were no significant or unusual transactions, issues discussed, and disagreement with management. The audit process went well, and all adjustments were made, with no significant difficulties in performing the audit. It is recommended that the Council approve the attached resolution accepting the audited financial statements for the year ended June 30, 2021. Council Member Cruz noted that Staff took proactive actions that resulted in a positive ending, such as a hiring freeze and decreased spending during the pandemic. Council Member Sofer expressed her appreciation and approved the recommendation. Mayor Carbone thanked the Staff for their efforts.

Joint Sand City and Successor Agency of the Redevelopment Agency 12.21.21 Council Meeting Minutes _________________________ 7:30 P.M. Floor opened for Public Comment. There were no comments from the Public in person, via writing or through telecommunications. 7:30 P.M. Floor closed to Public Comment. Motion to approve the City Resolution accepting the Audited Financial Statements for the Year ended June 30, 2021 and Independent Auditor's Report was made by Council Member Cruz, seconded by Council Member Sofer. Roll call Vote AYES: Council Members Blackwelder, Carbone, Cruz, Sofer. NOES: None. ABSENT: Council Member Hawthorne. ABSTAIN: None. Motion carried. Mayor Carbone thanked Mr. Nolan, Ms. Courtney, and Ms. Lazzarino for being proactive and cutting back expenses. She mentioned the future lease payments that will cease that would create a drastic change in revenue. 10C. Consideration of Successor Agency RESOLUTION Confirming Reinstatement of a Loan Agreement between the City of Sand City and the Former Sand City Redevelopment Agency, Finding the Loan is an Enforceable Obligation within the meaning of Health and Safety Code Sections 34171(d)(2) and 34191.4(b)(2) and Approving Adjustments to the Repayment Schedule as Approved by Resolution SA 21-02 Acting City Manager/City Attorney Norgaard reported that the item presented is regarding the loan the City made to the former Redevelopment Agency prior to its dissolution, and funds to be repaid. She mentioned a correction to page 3 of the staff report indicating that it should read SA 21-02, and introduced Special Counsel Barbara Leibold of Leibold, McClendon & Mann. Ms. Leibold provided background on the Seaside Loan and Costco Agreement that were entered into in 1989, in which the City agreed to financially assist the former Redevelopment Agency (RDA) by loaning the City sales and use taxes generated by the Redevelopment Project area on an “as needed” basis pursuant to an agreement. Under the terms of the loan agreement the former RDA agreed to repay the City from future property tax increment funds, which the former RDA made prior to dissolution. The payment is listed on the recognized obligation payment schedule. The Oversight Board approved the reinstatement of the Loan Agreement on September 16, 2021; however, on October 28, 2021, the Department of Finance sent a letter to the Successor Agency and the Oversight Board determining that the Loan Agreement did not meet the definition of an “enforceable obligation” under Health and Safety Code section 34191.4(b)(2)(A). Ms. Leibold explained the Dissolution Act, and that both loan agreements met the criteria as outlined in Health and Safety Code sections 34171(d) and section 34191.4 (b)(2)(A). She further explained the City loan terms, the recalculated percentage, and outstanding unpaid balance as of June 30, 2022. Staff recommends approval of the attached resolution.

Joint Sand City and Successor Agency of the Redevelopment Agency 12.21.21 Council Meeting Minutes _________________________ Ms. Leibold responded to Council Member Blackwelder’s inquiry that other cities have dealt with this as well, and that some loans are approved while others are not. 7:30 P.M. Floor opened for Public Comment. There were no comments from the Public in person, via writing or through telecommunications. 7:30 P.M. Floor closed to Public Comment. Motion to approve the Successor Agency Resolution confirming Reinstatement of a Loan Agreement between the City of Sand City and the Former Sand City Redevelopment Agency, Finding the Loan is an Enforceable Obligation within the meaning of Health and Safety Code Sections 34171(d)(2) and 34191.4(b)(2) and Approving Adjustments to the Repayment Schedule as Approved by Resolution SA 21-02 was made by Agency Member Blackwelder, seconded by Agency Member Sofer. Roll call Vote AYES: Agency Members Blackwelder, Carbone, Cruz, Sofer. NOES: None. ABSENT: Agency Member Hawthorne. ABSTAIN: None. Motion carried. 10D. Consideration of Successor Agency RESOLUTION Approving the Recognized Obligation Payment Schedule (ROPS 22-23) and Administrative Budget for the period July 1, 2022 through June 30, 2023 Barbara Leibold of Leibold, McClendon & Mann reported that the attached item is the Recognized Obligation Payment Schedule (ROPS 22-23), and Successor Agency administrative budget. The ROPS includes the $500,000 repayment of the City loan, there were no new enforceable obligations not previously listed, includes the $1,975,068 plus $275,500 for bond payments, and $250,000 for administrative costs. Ms. Norgaard added that the increase to the Administrative Budget for the fiscal year is for legal expenses associated with potential litigation of the Loan Agreement. 7:36 P.M. Floor opened for Public Comment. There were no comments from the Public in person, via writing or through telecommunications. 7:37 P.M. Floor closed to Public Comment. Motion to approve the Successor Agency Resolution approving the Recognized Obligation Payment Schedule (ROS 22-23) and Administrative Budget for the period July 1, 2022 through June 30, 2023 was made by Agency Member Sofer, seconded by Agency Member Blackwelder. Roll call Vote AYES: Agency Members Blackwelder, Carbone, Cruz, Sofer. NOES: None. ABSENT: Agency Member Hawthorne. ABSTAIN: None. Motion carried.

Joint Sand City and Successor Agency of the Redevelopment Agency 12.21.21 Council Meeting Minutes _________________________ 10E. Comments by Council Members on Items of Interest to Sand City City Planner Pooler provided an update for Council Member Blackwleder regarding SB 1383 and mentioned that GreenWaste Recovery is in the midst of gearing up for the implementation of SB 1383, and expects full enforcement to implemented by 2024. 10F. Upcoming Meetings/Events There were no upcoming events and meetings. The Mayor reminded the Council that the January 4, 2022 Council meeting has been cancelled. She wished everyone a Happy Holiday, New Year, and continued safety. AGENDA ITEM 11, ADJOURNMENT There was consensus of the City Council to adjourn the meeting at 7:42 p.m. to the next regularly scheduled Council meeting on Tuesday, January 18, 2021 at 5:30 p.m. _______________________________ Connie Horca, City Clerk

REGULAR MEETING JOINT SAND CITY COUNCIL AND SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY TUESDAY, DECEMBER 21, 2021 5:30 PM 1

1. ROLL CALL 2. PLEDGE OF ALLEGIANCE 3. INVOCATION 4. ANNOUNCEMENT BY MAYOR, CITY ATTORNEY, & CITY STAFF AGENDA JOINT SAND CITY COUNCIL AND SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY Regular Meeting - Tuesday, December 21, 2021 5:30 PM THIS MEETING WILL BE HELD VIRTUALLY AND IS COMPLIANT WITH THE GOVERNOR’S EXECUTIVE ORDER N-29-20 ALLOWING FOR A DEVIATION OF TELECONFERENCE RULES REQUIRED BY THE BROWN ACT. TO PARTICIPATE IN THE ZOOM COUNCIL MEETING LIVE: https://us02web.zoom.us/j/4614728829 Meeting ID: 461 472 8829 To participate telephonically by calling the number below: (669) 900-6833 Meeting ID: 461 472 8829# If prompted to enter a participant ID, press # How to submit written Public Comments: If any member of the public would like to provide written comments at the meeting, please do as set forth below. Written: All comments received before 8:00 am the day of the meeting will be posted on the City’s website as “Correspondence” under the relevant agenda item and provided to the City Council members at the meeting. Please email your comments to: connie@sandcityca.org. Read Aloud During the Meeting: Email your comments to connie@sandcityca.org when the Mayor opens the public comment period for the relevant agenda item; please indicate the agenda item and title in your email subject line. If you want your comment read aloud, prominently write “Read Aloud at Meeting” at the top of the email and your comments will be read into the record (not to exceed three minutes at staff’s cadence). DURING EACH MEETING, members of the public may participate by calling and speaking live during the designated time(s), subject to time limits that may be imposed pursuant to the Brown Act at the number provided above. 2

5. COMMUNICATIONS Members of the public may address the City Council/Successor Agency on matters not appearing on the City Council/Successor Agency Agenda at this time for up to three minutes. In order that the City Clerk may later identify the speaker in the minutes of the meeting, it is helpful if speakers state their names. Public comments regarding items on the scheduled agenda will be heard at the time the item is being considered by the City Council/Successor Agency. The City Council Chambers podium is equipped with a portable microphone for anyone unable to come to the podium. If you need assistance, please advise the City Clerk as to which item you would like to comment on and the microphone will be brought to you. 6. CONSENT CALENDAR The Consent Agenda consists of routine items for which City Council approval can be taken with a single motion and vote. A Council member may request that any item be placed on the Regular Agenda for separate consideration. 6A. Approval of Sand City Council Meeting Minutes: 1) November 23, 2021 Special City Council Meeting 2) December 7, 2021 Regular Council Meeting 11.23.21 Special Meeting Minutes.pdf 12.07.21 Minutes.pdf 6B. Approval of City RESOLUTION Updating Schedule M, City Clerk Fees and Charges related to Administrative Department Fees Staff Report.Update Schedule M. City Clerk Fee Schedule.pdf Resolution.Update City Clerk Fees.pdf 6C. Approval of City RESOLUTION Authorizing Continued Banking Services Agreement with Mechanics Bank Staff Report. Continued Banking Services with Mechanics Bank.pdf Resolution. Mechanics Bank 2021.pdf 6D. Approval of City RESOLUTION Recognizing Mayor Mary Ann Carbone for 30 years of Exemplary Service to the City of Sand City Resolution. Recognizing Mayor Carbone.pdf 6E. Approval of City Donation/Contribution 1) Jacobs Heart Children's Cancer Services - $250 Donation.Contribution Memo.pdf 7. CONSIDERATION OF ITEMS PULLED FROM CONSENT CALENDAR 8. ORDER OF BUSINESS 8A. Consideration of City RESOLUTION Approving a Memorandum of Understanding (MOU) between the City of Sand City and DBO Development No. 30, LLC regarding South of Tioga Public Improvements and Fund for the Edgewater Habitat Restoration 3

Staff Report. Approving Memorandum of Understanding between DBO and City of Sand City.pdf Resolution.Authorizing the Mayor and City Manager to enter into a MOU.pdf MAP.Exhibit A- California Ave_2020-10-19.pdf 9. PUBLIC HEARING 9A. Second Reading of ORDINANCE of the City Council of the City of Sand City approving the First Amendment to the Development Agreement by and between DBO Development No. 30, LLC and the City of Sand City relating to the development commonly known as the South of Tioga Project Staff Report. 2nd Reading DA Amendment.pdf Exhibit A. Ordinance Approving First Amendment to the DA.pdf Exhibit B.Staff Report. December 7, 2021 Council Meeting.pdf 9B. Consideration and Approval of City RESOLUTION to Establish Community Facilities District No. 2021-1 (South of Tioga Project and to Authorize the Levy of Special Taxes Staff Report.South of Tioga Project. To Establish CFD..pdf Attachment A. CFD Petition 2021-12-16 FE.pdf Attachment B. South of Tioga Fiscal Impact Analysis.pdf Attachment C. Resolution. To Establish a Community Facility District.pdf 9C. Consideration of City RESOLUTIONS regarding the Sand City Sustainable Transportation Plan 1) Approval of City Resolution Adopting a Negative Declaration regarding the Sand City Sustainable Transportation Plan 2) Approval of City Resolution Adopting the Sand City Sustainable Transportation Plan 3) Approval of City Resolution to Approve a Mitigation Monitoring Program for the Sand City Sustainable Transportation Plan Staff Report.pdf Report Exhibit A - Sustainable Transport Plan.pdf Report Exhibit B - Survey.pdf Report Exhibit C - Initial Study.pdf Report Exhibit D - Response to Comments.pdf Resolution (Attach 1) Neg Dec Adopt.pdf Resolution (Attach2) Adopt the Plan.pdf Resolution (Attach3) Adopt Monitoring program.pdf 10. NEW BUSINESS 10A. Consideration of City RESOLUTION Approving a Service Agreement with SLV Management (Stephen Vagnini) for the 2022 West End Celebration (WEC) Staff Report. 2022 West End Celebration contract.pdf 4

Exhibit A.2021 WEC Budget.pdf Exhibit B.2022 WEC Budget.pdf Exhibit C. Resolution & Contract Approving 2022 WEC Service Agreement.pdf 10B. Presentation on and Consideration of the Audited Financial Statements for the Year ended June 30, 2021 and Independent Auditors Report by Therese Courtney and Mike Nolan of Hayashi and Wayland, LLC 1) Approval of City RESOLUTION Accepting the Audited Financial Statements for the Year ended June 30, 2021 and Independent Auditor's Report Staff Report.20-21 Final Audit.pdf Resolution. Approving the Final Audit for Year ended June 30, 2021.pdf Audit Letters.pdf Audited Financial Statements FY 20-21.pdf 10C. Consideration of Successor Agency RESOLUTION Confirming Reinstatement of a Loan Agreement between the City of Sand city and the Former Sand City Redevelopment Agency, Finding the Loan is an Enforceable Obligation within the meaning of Health and Safety Code Sections 34171(d)(2) and 34191.4(b)(2) and Approving Adjustments to the Repayment Schedule as Approved by Resolution SA 21-02 SA Staff Report 1989 Loan Agreement Enforceable Obligation.121521.pdf Attachment 1. SA Resolution. Confirming Reinstatement of Loan Agreement.pdf Attachment 2 - Finding of Completion.pdf Attachment 3 - OB Memo 1989 Loan Agreement Enforceable Obligation082721.2docx.pdf Attachment 4 - OB Resolution approving Seaside Loan.pdf 10D. Consideration of Successor Agency RESOLUTION Approving the Recognized Obligation Payment Schedule (ROS 22-23) and Administrative Budget for the period July 1, 2022 through June 30, 2023 Staff Report. Successor Agency ROPS 22-23.pdf Attachment 1. Resolution ROPS 22-23.pdf Attachment 2. Proposed Sand City ROPS 22-23.pdf Attachment 3. Successor Admin Budget 22-23.pdf 10E. Comments by Council Members on Items of Interest to Sand City 10F. Upcoming Meetings/Events 11. ADJOURNMENT REMINDER: The January 4, 2022 Sand City Council meeting is Cancelled. The current agenda is available in PDF format on our website at: www.sandcity.org If you have a request for a disability-related modification or accommodation, including auxiliary aids or services, which will allow you to participate in a Sand City public meeting, please call the City Clerk at (831) 394-3054 extension 220, or give your written request to the City Clerk at 1 Pendergrass Way, Sand City, CA 5

93955 at least 48 hours prior to the scheduled meeting to allow the City Clerk time to arrange for the requested modification or accommodation. 6

REGULAR MEETING JOINT SAND CITY COUNCIL AND SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY TUESDAY, DECEMBER 21, 2021 5:30 PM 1

1. ROLL CALL 2. PLEDGE OF ALLEGIANCE 3. INVOCATION 4. ANNOUNCEMENT BY MAYOR, CITY ATTORNEY, & CITY STAFF AGENDA JOINT SAND CITY COUNCIL AND SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY Regular Meeting - Tuesday, December 21, 2021 5:30 PM THIS MEETING WILL BE HELD VIRTUALLY AND IS COMPLIANT WITH THE GOVERNOR’S EXECUTIVE ORDER N-29-20 ALLOWING FOR A DEVIATION OF TELECONFERENCE RULES REQUIRED BY THE BROWN ACT. TO PARTICIPATE IN THE ZOOM COUNCIL MEETING LIVE: https://us02web.zoom.us/j/4614728829 Meeting ID: 461 472 8829 To participate telephonically by calling the number below: (669) 900-6833 Meeting ID: 461 472 8829# If prompted to enter a participant ID, press # How to submit written Public Comments: If any member of the public would like to provide written comments at the meeting, please do as set forth below. Written: All comments received before 8:00 am the day of the meeting will be posted on the City’s website as “Correspondence” under the relevant agenda item and provided to the City Council members at the meeting. Please email your comments to: connie@sandcityca.org. Read Aloud During the Meeting: Email your comments to connie@sandcityca.org when the Mayor opens the public comment period for the relevant agenda item; please indicate the agenda item and title in your email subject line. If you want your comment read aloud, prominently write “Read Aloud at Meeting” at the top of the email and your comments will be read into the record (not to exceed three minutes at staff’s cadence). DURING EACH MEETING, members of the public may participate by calling and speaking live during the designated time(s), subject to time limits that may be imposed pursuant to the Brown Act at the number provided above. 2

5. COMMUNICATIONS Members of the public may address the City Council/Successor Agency on matters not appearing on the City Council/Successor Agency Agenda at this time for up to three minutes. In order that the City Clerk may later identify the speaker in the minutes of the meeting, it is helpful if speakers state their names. Public comments regarding items on the scheduled agenda will be heard at the time the item is being considered by the City Council/Successor Agency. The City Council Chambers podium is equipped with a portable microphone for anyone unable to come to the podium. If you need assistance, please advise the City Clerk as to which item you would like to comment on and the microphone will be brought to you. 6. CONSENT CALENDAR The Consent Agenda consists of routine items for which City Council approval can be taken with a single motion and vote. A Council member may request that any item be placed on the Regular Agenda for separate consideration. 6A. Approval of Sand City Council Meeting Minutes: 1) November 23, 2021 Special City Council Meeting 2) December 7, 2021 Regular Council Meeting 11.23.21 Special Meeting Minutes.pdf 12.07.21 Minutes.pdf 6B. Approval of City RESOLUTION Updating Schedule M, City Clerk Fees and Charges related to Administrative Department Fees Staff Report.Update Schedule M. City Clerk Fee Schedule.pdf Resolution.Update City Clerk Fees.pdf 6C. Approval of City RESOLUTION Authorizing Continued Banking Services Agreement with Mechanics Bank Staff Report. Continued Banking Services with Mechanics Bank.pdf Resolution. Mechanics Bank 2021.pdf 6D. Approval of City RESOLUTION Recognizing Mayor Mary Ann Carbone for 30 years of Exemplary Service to the City of Sand City Resolution. Recognizing Mayor Carbone.pdf 6E. Approval of City Donation/Contribution 1) Jacobs Heart Children's Cancer Services - $250 Donation.Contribution Memo.pdf 7. CONSIDERATION OF ITEMS PULLED FROM CONSENT CALENDAR 8. ORDER OF BUSINESS 8A. Consideration of City RESOLUTION Approving a Memorandum of Understanding (MOU) between the City of Sand City and DBO Development No. 30, LLC regarding South of Tioga Public Improvements and Fund for the Edgewater Habitat Restoration 3

Staff Report. Approving Memorandum of Understanding between DBO and City of Sand City.pdf Resolution.Authorizing the Mayor and City Manager to enter into a MOU.pdf MAP.Exhibit A- California Ave_2020-10-19.pdf 9. PUBLIC HEARING 9A. Second Reading of ORDINANCE of the City Council of the City of Sand City approving the First Amendment to the Development Agreement by and between DBO Development No. 30, LLC and the City of Sand City relating to the development commonly known as the South of Tioga Project Staff Report. 2nd Reading DA Amendment.pdf Exhibit A. Ordinance Approving First Amendment to the DA.pdf Exhibit B.Staff Report. December 7, 2021 Council Meeting.pdf 9B. Consideration and Approval of City RESOLUTION to Establish Community Facilities District No. 2021-1 (South of Tioga Project and to Authorize the Levy of Special Taxes Staff Report.South of Tioga Project. To Establish CFD..pdf Attachment A. CFD Petition 2021-12-16 FE.pdf Attachment B. South of Tioga Fiscal Impact Analysis.pdf Attachment C. Resolution. To Establish a Community Facility District.pdf 9C. Consideration of City RESOLUTIONS regarding the Sand City Sustainable Transportation Plan 1) Approval of City Resolution Adopting a Negative Declaration regarding the Sand City Sustainable Transportation Plan 2) Approval of City Resolution Adopting the Sand City Sustainable Transportation Plan 3) Approval of City Resolution to Approve a Mitigation Monitoring Program for the Sand City Sustainable Transportation Plan Staff Report.pdf Report Exhibit A - Sustainable Transport Plan.pdf Report Exhibit B - Survey.pdf Report Exhibit C - Initial Study.pdf Report Exhibit D - Response to Comments.pdf Resolution (Attach 1) Neg Dec Adopt.pdf Resolution (Attach2) Adopt the Plan.pdf Resolution (Attach3) Adopt Monitoring program.pdf 10. NEW BUSINESS 10A. Consideration of City RESOLUTION Approving a Service Agreement with SLV Management (Stephen Vagnini) for the 2022 West End Celebration (WEC) Staff Report. 2022 West End Celebration contract.pdf 4

Exhibit A.2021 WEC Budget.pdf Exhibit B.2022 WEC Budget.pdf Exhibit C. Resolution & Contract Approving 2022 WEC Service Agreement.pdf 10B. Presentation on and Consideration of the Audited Financial Statements for the Year ended June 30, 2021 and Independent Auditors Report by Therese Courtney and Mike Nolan of Hayashi and Wayland, LLC 1) Approval of City RESOLUTION Accepting the Audited Financial Statements for the Year ended June 30, 2021 and Independent Auditor's Report Staff Report.20-21 Final Audit.pdf Resolution. Approving the Final Audit for Year ended June 30, 2021.pdf Audit Letters.pdf Audited Financial Statements FY 20-21.pdf 10C. Consideration of Successor Agency RESOLUTION Confirming Reinstatement of a Loan Agreement between the City of Sand city and the Former Sand City Redevelopment Agency, Finding the Loan is an Enforceable Obligation within the meaning of Health and Safety Code Sections 34171(d)(2) and 34191.4(b)(2) and Approving Adjustments to the Repayment Schedule as Approved by Resolution SA 21-02 SA Staff Report 1989 Loan Agreement Enforceable Obligation.121521.pdf Attachment 1. SA Resolution. Confirming Reinstatement of Loan Agreement.pdf Attachment 2 - Finding of Completion.pdf Attachment 3 - OB Memo 1989 Loan Agreement Enforceable Obligation082721.2docx.pdf Attachment 4 - OB Resolution approving Seaside Loan.pdf 10D. Consideration of Successor Agency RESOLUTION Approving the Recognized Obligation Payment Schedule (ROS 22-23) and Administrative Budget for the period July 1, 2022 through June 30, 2023 Staff Report. Successor Agency ROPS 22-23.pdf Attachment 1. Resolution ROPS 22-23.pdf Attachment 2. Proposed Sand City ROPS 22-23.pdf Attachment 3. Successor Admin Budget 22-23.pdf 10E. Comments by Council Members on Items of Interest to Sand City 10F. Upcoming Meetings/Events 11. ADJOURNMENT REMINDER: The January 4, 2022 Sand City Council meeting is Cancelled. The current agenda is available in PDF format on our website at: www.sandcity.org If you have a request for a disability-related modification or accommodation, including auxiliary aids or services, which will allow you to participate in a Sand City public meeting, please call the City Clerk at (831) 394-3054 extension 220, or give your written request to the City Clerk at 1 Pendergrass Way, Sand City, CA 5

93955 at least 48 hours prior to the scheduled meeting to allow the City Clerk time to arrange for the requested modification or accommodation. 6

AGENDA ITEM 6A. Approval of Sand City Council Meeting Minutes: 1) November 23, 2021 Special City Council Meeting 2) December 7, 2021 Regular Council Meeting 7

Joint Sand City Council and Successor Agency of the Redevelopment Agency Minutes 11.23.21 Special Meeting MINUTES JOINT SAND CITY COUNCIL AND SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY Special Meeting - Tuesday, November 23, 2021 1:00 PM As allowed per Assembly Bill (AB361), this meeting was conducted in person and by teleconference Mayor Carbone opened the Special City Council meeting at 1:00 p.m. AGENDA ITEM 1, ROLL CALL Present: Mayor Mary Ann Carbone Council Member Blackwelder (virtual attendance) Councilmember Cruz (virtual attendance) Councilmember Hawthorne (absent) Councilmember Sofer Staff: Vibeke Norgaard, City Attorney Connie Horca, City Clerk AGENDA ITEM 2, PLEDGE OF ALLEGIANCE The Pledge of Allegiance was led by City Attorney Norgaard. AGENDA ITEM 3, COMMUNICATIONS 1:05 P.M. Floor opened for Public Comment. There were no comments from the Public in person, via writing or through telecommunications. 1:05 P.M. Floor closed to Public Comment. AGENDA ITEM 4, NEW BUSINESS 4A. Consideration and Approval of City RESOLUTION Rescinding Resolution SC 21-70, 2021 and Approving the Appointment of City Attorney Vibeke Norgaard as Acting City Manager effective midnight November 26, 2021 City Clerk Horca presented the staff report and noted that City Manager Blair's employment will end on midnight, November 26, 2021. The City Council adopted a Resolution SC 21-70, 2021 approving the appointment of interim City Manager Jeffrey Durbin at the November 26, 2021 Council meeting and on Friday, November 19, 2021 Mr. Durbin informed the City that that he has accepted a permanent position with another organization. The City's Municipal code provides that the Council may authorize an Assistant City Manager to perform some or all of the 8

Joint Sand City Council and Successor Agency of the Redevelopment Agency Minutes 11.23.21 Special Meeting responsibilities of the City Manager. Since the City does not have an Assistant City Manager, the City Attorney, Vibeke Norgaard would be the ideal candidate to serve as Acting City Manager due to her extensive knowledge and experience regarding City projects. Staff recommends that the Council approve the attached resolution rescinding Resolution SC 21-70, 2021 and approve the appointment of City Attorney Vibeke Norgaard as Acting City Manager effective midnight November 26, 2021. There was discussion regarding compensation, possibility of outsourcing legal work, and the length of time for the recruitment of a City Manager. City Clerk Horca read into the record an email from City Manager Blair reiterating his support for Vibeke as Acting City Manager, his belief that she will do a good job as she has been highly involved in most of the key activities pertaining to the City, and would represent the best interest of the City. 1:14 P.M. Floor opened for Public Comment. There were no comments from the Public in person, via writing or through telecommunications 1:14 P.M. Floor closed to Public Comment. Motion to approve the City Resolution rescinding Resolution SC 21-70, 2021 and Approving the Appointment of City Attorney Vibeke Norgaard as Acting City Manager effective midnight November 26, 2021 was made by Council Member Sofer, seconded by Council Member Cruz. Roll call Vote AYES: Council Members Blackwelder, Carbone, Cruz, Sofer. NOES: None. ABSENT: Council Member Hawthorne. ABSTAIN: None. Motion carried. AGENDA ITEM 5, ADJOURNMENT There was consensus of the Council to adjourn the meeting at 1:15 p.m. to the next regularly scheduled Council meeting on Tuesday, December 7, 2021 at 5:30 p.m. _______________________________ Connie Horca, City Clerk 9

_____________________________________________________________________________________________ Joint Sand City Council and Successor Agency of the Redevelopment Agency Minutes 12.07.21 Regular Meeting MINUTES JOINT SAND CITY COUNCIL AND SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY Regular Meeting - Tuesday, December 7, 2021 5:30 PM As allowed per Assembly Bill (AB361), this meeting was conducted in person and by teleconference Mayor Carbone opened the meeting at 5:31 p.m. AGENDA ITEM 1, ROLL CALL Present: Mayor Mary Ann Carbone Council Member Cruz (virtual attendance) Council Member Sofer (virtual attendance) Council Member Hawthorne {arrived 5:39 p.m.} Council Member Blackwelder (virtual attendance) Staff: Vibeke Norgaard, Acting City Manager/City Attorney Connie Horca, City Clerk Charles Pooler, City Planner (virtual attendance) Brian Ferrante, Chief of Police AGENDA ITEM 2, ANNOUNCEMENTS BY MAYOR, CITY ATTORNEY, AND CITY STAFF Mayor Carbone announced that the City Manager’s report was distributed via email. Acting City Manager/ City Attorney Norgaard reported on her meeting with City Engineer Gomez, the success of the Tree Lighting ceremony, exceptional attendance at the Art Park’s First Friday event, Shelby Gorman’s hard work on the event, and the scheduled grand opening of the new Total Wine store at the shopping center. AGENDA ITEM 3, COMMUNICATIONS 5:36 P.M. Floor opened for Public Comment. There were no comments from the Public in person, via writing or through telecommunications 5:36 P.M. Floor closed to Public Comment. AGENDA ITEM 4, CONSENT CALENDAR 4A. There was no discussion of the Sand City Council Meeting Minutes for November 12, 2021 Special Council Meeting, November 16, 2021 Regular Council Meeting, November 18, 2021 Special Council Meeting. 10

_____________________________________________________________________________________________ Joint Sand City Council and Successor Agency of the Redevelopment Agency Minutes 12.07.21 Regular Meeting 4B. There was no discussion of the City Resolution making Re-Appointments to the Design Review Committee (Paul Davis, Elizabeth Sofer, & Chris Barlow). 4C. There was no discussion of the City Resolution authorizing the Extension of Remote Teleconference Meeting of the City Council and Boards, Commissions, and Committees for the period of December 19, 2021 through January 18, 2022 pursuant to AB 361 and Ralph M. Brown Act Provisions. 4D. There was no discussion of the City Donation/Contribution to the Salvation Army 2021 Adopt a Family for $250. Motion to approve the Consent Calendar items was made by was made by Council Member Blackwelder, seconded by Council Member Sofer. Roll call Vote AYES: Council Members Blackwelder, Carbone, Cruz, Sofer. NOES: None. ABSENT: Council Member Hawthorne. ABSTAIN: None. Motion carried. AGENDA ITEM 5, CONSIDERATION OF ITEMS PULLED FROM CONSENT CALENDAR There were no items pulled from the Consent Calendar. AGENDA ITEM 6, PRESENTATION 6A. Presentation of Certificates by Stephen Vagnini to Volunteers/Supporters of the 2021 West End Celebration West End Event Coordinator Stephen Vagnini reported on the success of the event despite the pandemic, safety measures taken, attendance totals, the new footprint, donations received, volunteers who contributed their time, and Sand City businesses who made the event possible. He thanked Paul Tran for his hard work, Colida Johnson of Greenwaste, Kimberly Herring of MST, Ronald Brown for preparing food and barbeque for the volunteers, Sand City staff, public works, the police department, and other individuals who contributed to make the event successful. He also mentioned that the event was voted as one of the top 5 events on the Peninsula by the Carmel Pine Cone. 5:39 p.m. {Council Member Hawthorne arrived at the meeting} Members of the Council expressed gratitude that the event moved forward, its positive impact to the community, the great idea of incorporating it with the mural festival, and commended Mr. Vagnini for his efforts and organization of the event. 5:51 p.m. The Mayor opened the floor for public comment, and seeing none, closed the floor to public comment. 11

_____________________________________________________________________________________________ Joint Sand City Council and Successor Agency of the Redevelopment Agency Minutes 12.07.21 Regular Meeting The Mayor presented certificates of appreciation to City staff that were in attendance and thanked Mr. Vagnini for his hard work in coordinating the event. AGENDA ITEM 7, PUBLIC HEARING {Council Member Cruz recused from the meeting due to a possible conflict of interest by residing within 500’ of the subject property} 7A. Ordinance of the City Council of the City of Sand City approving the First Amendment to the Development Agreement by and between DBO Development No. 30, LLC and the City of Sand City relating to the development commonly known as the South of Tioga Project Acting City Manager/City Attorney Norgaard presented the history of the Development Agreement (DA) that was originally approved in October of 2020. The DA contemplated that a subsequent amendment would occur once the developer obtained all the land within the project boundary which it has now done. The amendment to the development agreement is necessary to address several additional changes. She reported on the amendments to the DA included in the First Amendment that includes replacement of the Consumer Price Index (CPI) used to calculate the Community Facilities District (CFD) tax, that the limited temporary tax credit described in the DA be in place until December 31, 2030, instead of the length of the term of the DA; that a new subsection provides a permanent credit for half of the Hotel’s CFD tax payment if a certain TOT threshold is reached on the Project; amends the VTM Condition of Approval to provide that the public park between the residential parcels be maintained by the City and not by the Developer, and also amends the VTM Condition of Approval requiring the Developer to construct improvements on the entire width of California Avenue to the East side of the City’s right of way instead of merely to centerline. The Developer also agreed in return for the increased value to it of credits for TOT to establish a fund of $110,000 to help finance a land manager and costs related to the Edgewater Shopping Center’s Habitat Preserve. Staff recommends approval of the attached Ordinance approving the first amendment to the Development Agreement by and between the City of Sand City and DBO Development, LLC. 6:08 P.M. Floor opened for Public Comment. Todd Sheller of Lyles Diversified expressed his excitement for the project, its benefits to the City and Developer, the community facilities district improvements, and the open communication between both parties. 6:09 P.M. Floor closed to Public Comment. Motion to waive full reading and approve the Ordinance by title only, approving the First Amendment to the Development Agreement by and between DBO Development No. 30, LLC and the City of Sand City relating to the development commonly known as the South of Tioga Project was made by Council Member Hawthorne, seconded by Council Member Sofer. Roll call Vote AYES: Council 12

_____________________________________________________________________________________________ Joint Sand City Council and Successor Agency of the Redevelopment Agency Minutes 12.07.21 Regular Meeting Members Blackwelder, Carbone, Hawthorne, Sofer. NOES: None. ABSENT: None. ABSTAIN: Council Member Cruz. Motion carried. Motion to approve the First Reading of the Ordinance by title only, approving the First Amendment to the Development Agreement by and between DBO Development No. 30, LLC and the City of Sand City relating to the development commonly known as the South of Tioga Project was made by Council Member Hawthorne, seconded by Council Member Blackwelder. Roll call Vote AYES: Council Members Blackwelder, Carbone, Hawthorne, Sofer. NOES: None. ABSENT: None. ABSTAIN: Council Member Cruz. Motion carried. {Council Member Cruz returned to the meeting} AGENDA ITEM 8, NEW BUSINESS 8A. Consideration of City RESOLUTION Authorizing the City Manager to Enter into a Memorandum of Understanding between the City of Sand City and California American Water regarding the Installation of Production and Monitoring Wells Acting City Manager/City Attorney Norgaard presented the history of the desalination plant, its design to produce 300 acre-feet of water annually, and its operation and maintenance by California-American Water (Cal-Am). In 2009 an amended and restated agreement was entered into and it required Cal-Am, at its own expense, to keep and maintain the leased property including additional equipment, structures and other improvements. Ms. Norgaard reported that the lease required that the expense of building new wells would be prorated based on a formula which would requires the City to pay a portion under the terms of the lease. Council had directed her and the former City manager in closed session to enter into an MOU with Cal Am which provided that Cal Am instead pay the entire cost of the wells even if it meant that they own the wells at the end of the lease term. She reported on the increased salinity that has prevented the desalination plant from producing at its full capacity , and the need for new intake wells. The memorandum of understanding negotiated between Cal-Am and the City would allow for the construction of one new well and up to two additional wells at Cal-Am’s expense. The City will be responsible to provide all the easements on any City-owned rights of way along Sand Dunes Drive for the installation and operation of the well(s) and any associated infrastructure. She showed Council the approximate location of the new wells along Sand Dines drive. She also noted that a letter received from the Monterey Peninsula Water Management District (MPWMD) indicates that the City’s water entitlement would not be affected, and in November, the California Public Utilities Commission issued a decision authorizing Cal-Am to recover costs associated with drilling a new well. Ms. Norgaard added that the Coastal Commission’s environmental review and subsequent approval indicated that the City does not need to take action for further CEQA review, and that no negative fiscal impact is anticipated. Staff recommends approval of the attached MOU. 13

_____________________________________________________________________________________________ Joint Sand City Council and Successor Agency of the Redevelopment Agency Minutes 12.07.21 Regular Meeting Chris Cook from Cal-Am water mentioned that at a previous meeting he presented the critical state of the water supply on the Peninsula, and the reversal of the CPUC’s decision. Tim O’Halloran reported that the proposed site location of the new wells is south of Bay Avenue and should take approximately one year to complete. Mayor Carbone received additional information regarding the well site and whether Cal-Am worked with a consultant to determine the best location for the new wells. 6:23 P.M. Floor opened for Public Comment. In response to Sand City resident Brian Clark’s inquiry whether a bigger plant would benefit Sand City, Mr. Pooler noted that permits would be required from several agencies, general plan amendments would need to occur, and that it would need to go before the Coastal Commission for amendment approvals. 6:27 P.M. Floor closed to Public Comment. Acting City Manager/City Attorney Norgaard suggested a change to the title of the resolution and the