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Home My WebLink About06-01-2017 Agenda Packet Thursday, June 1, 2017 5:00 PM SPECIAL MEETING Council Chamber 990 Palm Street San Luis Obispo Page 1 CALL TO ORDER: Mayor Heidi Harmon ROLL CALL: Council Members Carlyn Christianson, Aaron Gomez, Andy Pease, Vice Mayor Dan Rivoire and Mayor Heidi Harmon PLEDGE OF ALLEGIANCE: Council Member Carlyn Christianson BUSINESS ITEM/BUDGET WORKSHOP 1. PRELIMINARY 2017-19 FINANCIAL PLAN (LICHTIG/BRADFORD/STECK – 120 MINUTES) Overview of financial highlights, Preliminary 2017-19 Financial Plan budget overview, and key budget changes since Strategic Budget Direction. PUBLIC COMMENT ON AGENDA ITEM ONLY You may address the Council on any item described in this agenda by completing a speaker slip and giving it to the City Clerk prior to the agenda item. The Mayor will invite public comments before the Council considers each item (Gov. Code Sec. 54954(A)). Your speaking time is limited to three (3) minutes (CC&P Sec. 1.3.7). ADJOURNMENT The next Regular City Council Meeting is scheduled for Tuesday, June 6, 2017 at 6:00 p.m., in the Council Chamber, 990 Palm Street, San Luis Obispo, California. Packet Pg 1 San Luis Obispo City Council Agenda June 1, 2017 Page 2 LISTENING ASSISTIVE DEVICES are available for the hearing impaired--please see City Clerk. The City of San Luis Obispo wishes to make all of its public meetings accessible to the public. Upon request, this agenda will be made available in appropriate alternative formats to persons with disabilities. Any person with a disability who requires a modification or accommodation in order to participate in a meeting should direct such request to the City Clerk’s Office at (805) 781-7100 at least 48 hours before the meeting, if possible. Telecommunications Device for the Deaf (805) 781-7107. City Council regular meetings are televised live on Charter Channel 20. Agenda related writings or documents provided to the City Council are available for public i nspection in the City Clerk’s Office located at 990 Palm Street, San Luis Obispo, California during normal business hours, and on the City’s website www.slocity.org. Persons with questions concerning any agenda item may call the City Clerk’s Office at (805) 781-7100. Packet Pg 2 Meeting Date: 6/1/2017 FROM: Katie Lichtig, City Manager Prepared By: Xenia Bradford, Interim Finance Director Courtney Steck, Contract Budget Manager SUBJECT: PRELIMINARY 2017-19 FINANCIAL PLAN RECOMMENDATION Review and consider the Preliminary 2017-19 Financial Plan at the budget workshops and public hearings scheduled for June 1 and 6, 2017, and consider adoption of the budget at the June 20, 2017 City Council meeting. REPORT-IN-BRIEF The Preliminary Financial Plan identifies and funds vital services important to the community, enables the implementation of the four Major City Goals and one Other Important Objective outlined by Council, reinvests in infrastructure and deferred maintenance, and provides City staff with the tools and equipment to deliver services in the most effective way. The Preliminary Financial Plan reflects the priorities of the Council, residents and the other members of the community. Importantly, the proposed plan represents a balanced approach to the provision of essential services with the resources available. All of this affirms the City’s on-going commitment to delivering a high level of municipal services to our community in a fiscally prudent manner. The 2017-19 Financial Plan:  Ensures the policy of maintaining an appropriate reserve or working capital amount in the General and Enterprise Funds;  Is based on Fiscal Health Contingency Plan, maintaining base budget recommendations at 2016-17 Financial Plan  Invests in the future by funding maintenance and improvements to City essential infrastructure, fleet, existing facilities, and information technology; and  Honors and implements Local Revenue Measure priorities, the ½-cent local sales tax approved by voters in 2014. There are changes included in the Preliminary Financial Plan based on the guidance of City Council from the April 18 Strategic Budget Direction Hearing. They include modi fications are primarily to the Capital Improvement Program as discussed in detail later in this report. Packet Pg 3 1 Adoption of the Preliminary 2017-19 Financial Plan is scheduled for Tuesday, June 20, 2017. Continuation of adoption of the Preliminary 2017-19 Financial Plan is scheduled for Tuesday, June 27, 2017, if needed. Each of these areas is covered in the body of this report. DISCUSSION Financial Plan Introduction and Summary Enclosed for City Council review and consideration is the City of San Luis Obispo’s Preliminary 2017-19 Financial Plan, and 2017-18 budget. The Preliminary Financial Plan identifies the funding and work programs needed to provide municipal services to City residents, and achieve the Council’s Major City Goals. The proposed 2017-19 Financial Plan is developed within the context of Expenditures Outpacing Revenue Growth. The Financial Plan proposes work programs and steps to close the budget gap due to rapid growth in pension costs coupled with slowing down growth in revenues. As shown in the following table, total proposed appropriations for 2017-18 are $142 million. Packet Pg 4 1 Expenditure Type 2017-18 Operating Programs 99,480,759 Capital Improvement Plan 34,574,100 Debt Service 7,969,872 TOTAL $ 142,024,731 Revenues Operating revenues are equal to or greater than operating expenditures for 2017-18, including debt service, across all City funds in the first fiscal year of the plan. The City’s top five General Fund revenue sources are all projected to increase at a modest rate during the 2017 -19 Financial Plan period; however, expenditures begin to outpace in the second year of the Financial Plan. Further detail can be referenced in Section A of the Preliminary Financial Plan. Expenditures The General Fund comprises approximately 48% of the City’s total 2017-18 expenditures. The City also has enterprise funds for Water, Sewer, Transit, and Parking operations. These four enterprise funds comprise approximately 45% of the City’s 2017-18 expenditure budget, as depicted in the chart below. Packet Pg 5 1 Staffing An important part of meeting the City’s obligations to the community for maintaining and/or expanding levels of service involves staffing. The table, below, shows the City’s authorized full- time equivalent staff, by Department. Reductions in the Community Development Department are attributable to the discontinuation of the Rental Housing Program. DEPARTMENT & PROGRAM 2016-17 2017-18 2018-19 City Administration* 27.25 27.25 27.25 City Attorney’s Office 3.00 3.00 3.00 Community Development 36.00 32.40 31.90 Finance 12.50 12.50 12.50 Fire 57.00 57.00 57.00 Human Resources 5.00 5.00 5.00 Parks & Recreation 18.00 18.00 18.00 Police 86.50 85.50 85.50 Public Works 80.15 80.15 80.15 Utilities 71.00 71.00 71.00 TOTAL 396.40 391.80 391.30 *Includes Information Technology Programs, formerly considered part of the Finance Department Updates After Strategic Budget Direction Meeting (April 18, 2017) There are changes included in the Preliminary Financial Plan based on the guidance of City Council from the April 18th Strategic Budget Direction Hearing. These updates include: Packet Pg 6 1 Added Operating Expenses for 2017-19  Update of the City’s Parks & Recreation Element: $160,000 (one-time, Parkland Development Funds will be transferred to the General Fund in 2017-18) Added Capital Projects for 2017-19  Safe Routes to School: Foothill Crossing (Bishop Peak/Pacheco School): $300,000 (one- time, Parkland Development Funds will be transferred to the General Fund in 2017-18)  Broad Street Bike Boulevard: $180,000 (one-time, Parkland Development Funds will be transferred to the General Fund in 2017-18)  Laguna Lake Dredging: $240,000 (Local Revenue Measure Funding)  Neighborhood Traffic Management: $150,000 (Local Revenue Measure Funding) Policy Changes Reflected in Financial Plan Policy changes proposed in the Preliminary 2017-19 Financial Plan include the following: 1) Long-Term Liabilities and Maintenance of Infrastructure, 2) Land Based Financing, 3) Excess Liability Insurance fund requirement 4) Fleet and information technology replacement funds policy. Preliminary Financial Plan – Budget Book Structure PREFACE  About the City  Organizational Chart  Mission Statement  Organizational Values SECTION A – Budget Summary  City Manager’s Budget Message  Financial Highlights  Funding Summaries for Local Revenue Measure, Major City Goals/Other Important Objectives, and Significant Operating Program Changes  Revenue & Expenditure Summaries  Authorized Full-Time Equivalent Schedule SECTION B – Policies  Budget and Fiscal Policies SECTION C – Goals & Local Revenue Measure  Major City Goals/Other Important Objectives Programs  Local Revenue Measure Operating and Capital Expenditure Detail Packet Pg 7 1 SECTION D – Operating Department Budgets  Department Operating Budget Summaries  Performance & Workload Measures, by Department  Program Narratives SECTION E – Capital Improvement Plan (CIP)  CIP Highlights  Funding and Function Summaries  CIP Write-Ups SECTION F – Debt Service  Debt Summary  Annual Payments SECTION G – Reference Materials  Changes in Financial Position  Pension Obligation Cost Trends  Retiree Health Care Obligations  Appropriations Limit History Attachments: a - Council Reading File - 2017-19 Preliminary Financial Plan Packet Pg 8 1