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HomeMy WebLinkAboutItem 9 - Introduce an Ordinance amending Chapter 2.14 (REOC) of the Municipal CodeItem 9 �t�x ofi Council- d. Report ti ttjs o Department Name: City Administration Cost Center: 1001 For Agenda of: September 1, 2020 Placement: Public Hearing Estimated Time: 20 minutes FROM: Greg Hermann, Deputy City Manager Prepared By: Ryan Betz, Assistant to the City Manager SUBJECT: INTRODUCE AN ORDINANCE AMENDING CHAPTER 2.14, REVENUE ENHANCEMENT OVERSIGHT COMMISSION, OF THE MUNICIPAL CODE RECOMMENDATION 1. Introduce an Ordinance (Attachment A) amending Chapter 2.14, Revenue Enhancement Oversight Commission, of the Municipal Code; and 2. Direct staff to return to the City Council for the second reading of the ordinance as part of the certification of results of the General Municipal Election of November 3, 2020. DISCUSSION Background On July 21, 2020, the City Council approved the placement of a ballot measure question to the voters whether to amend Chapter 3.15 of the Municipal Code with a Community Services and Investment Local Transactions (Sales) and Use Tax on the November 3, 2020 ballot. At that meeting, the Council directed staff to return with proposed amendments to Chapter 2.14, Revenue Enhancement Oversight Commission, of the Municipal Code. That chapter established a five -member citizen advisory body, the Revenue Enhancement Oversight Commission (REOC), to review, report, and make recommendations to the City Council on the use of the half -cent, local general sales tax. The REOC is also responsible for reviewing an audit report of the use of the funds, approving the annual community report and report in brief before it is distributed to every household within the City, and holding an annual citizen oversight meeting to gather input from the community on the use of the funds prior to making recommendations to the City Council as part of the budget process. Every two years, as part of the Financial Plan process, the REOC joins the City Council as part of the Community Forum to receive input on the community's top priorities and use of the Local Revenue Measure. Annual reports showing the audited expenditures for the Local Revenue Measure can be found on the City's website. The REOC plays an important role of citizen oversight, input, and accountability and is a best practice commonly found in other cities with a local revenue measure. Packet Page 133 Item 9 Proposed Amendments to Chapter 2.14 Based on Council direction, the intent of the proposed amendments to Chapter 2.14 is to broaden community member representation on the REOC and to build in additional accountability and community engagement opportunities to ensure spending priorities align with the community's and City Council's vision for long-term investment. Specifically, the proposed amendments cover several sections of Chapter 2.14, Revenue Enhancement Oversight Commission, of the Municipal Code (Attachment A). Section 2.14.020 adds language to the desired experience for residents being considered by the City Council to be appointed to the REOC. The following amendment is proposed: 2.14.020 Members and appointment The REOC shall consist of five members who are residents of the city. Members shall be appointed by the whole city council through a public application and appointment process. When recruiting members, the city will seek members who have experience with finance, budgeting, municipal accounting or represent a sales tax generating business. The next proposed amendment, in section 2.14.040, adds a section directing the REOC to recommend long-term community service and investment priorities to the City Council every eight years. The following amendment is proposed: 2.14.040 Powers and duties G. Long -Term Priority Setting. Every eight years, the City will incorporate a long-term priority setting exercise into the Financial Plan development process to determine the long-term community services and investment priorities for the use of Local Revenue Measure funds. This exercise shall include receiving input from residents, community members, and the REOC regarding spending priorities with priorities being set by the City Council as a part of the development of the Financial Plan. The remaining proposed amendments are administrative in nature and will not go into effect unless the ballot measure is approved by the voters as part of the November 3, 2020 general election. Previous Council or Advisory Body Action 1. July 21, 2020 City Council Meeting Policy Context The recommended amendment to 2.14.020, Members and appointment, is consistent with the language in the City of San Luis Obispo's Advisory Body Handbook (Section 1(C)) regarding membership qualifications and the appointment process. The language states the City of San Luis Obispo encourages participation of a wide variety of its citizens through service on an advisory body. Additionally, the recommended amendment to 2.14.040, Powers and duties, is consistent with language in the adopted Fiscal Responsibility Philosophy (Resolution No. 10546 (2014 Series)) regarding community input and aligning investment in the community.' 1 2014, Fiscal Responsibility Philosophy Section 2 — Definition. Fiscal responsibility is the balanced approach to providing the infrastructure maintenance and services that preserve and enhance the quality of life in our community as identified and prioritized through community input. Packet Page 134 Item 9 Public Engagement This item is on the agenda for the September 1, 2020 City Council meeting and will follow all required postings and notifications. The public may have an opportunity to comment on this item at or before the meeting. CONCURRENCE The City Attorney and Director of Finance concur with the staff recommendation. ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a "Project" under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: Yes Budget Year: 2020-21 Funding Identified: Yes Fiscal Analysis: Funding Sources Current FY Cost Annualized On -going Cost Total Project Cost General Fund N/A State Federal Fees Other: Total $0 This item does not have any direct costs, however, should the ballot measure be approved by the voters as part of the November 3, 2020 general election, the measure is projected to provide approximately $21,600,000 annually in revenue and could be used for general community services and infrastructure needs. Section 3 (D) — Aligned Investments. The City shall allocate resources in alignment with community needs and priorities for maintaining and/or adding capital projects, assets, or services. Packet Page 135 Item 9 ALTERNATIVES 1. The Council may choose to deny the proposed amendments. Staff does not recommend this based upon a desire to broaden community member representation on the REOC and to build in additional accountability and community engagement opportunities to ensure the spending priorities align with the community and City Council's vision for long-term investment. 2. The Council may choose to modify the proposed amendments. Should the Council choose to modify the proposed amendments, staff requests direction on the specific language to be modified. Attachments: a - Draft Ordinanance Packet Page 136 Item 9 ORDINANCE NO. (2020 SERIES) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AMENDING SECTIONS 2.14.010, 2.14.020, and 2.14.040 OF THE SAN LUIS OBISPO MUNICIPAL CODE CHAPTER 2.14 REVENUE ENHANCEMENT OVERSIGHT COMMISSION WHEREAS, the City of San Luis Obispo (City) is a municipal corporation duly organized under the California Constitution and laws of the State of California; and WHEREAS, on July 21, 2020, the City Council adopted Resolution No. 11145, submitting to the voters a question whether to extend the existing, voter -approved local transaction (sales) and use tax at a 1.50 rate, until ended by voters. The resolution also stated that any extension and enhancement of existing, voter -approved funding will continue to require a citizen revenue enhancement oversight commission (REOC) to ensure funds are spent consistent with the community's priorities; and WHEREAS, the REOC reviews revenues and expenditures from the local transaction (sales) and use tax, reports to the community and the City Council about the City's stewardship of these revenues, and recommends expenditures to the City Council that are consistent with the purpose of the general purpose tax and the preferences of the City residents; and WHEREAS, the City Council desires to expand the qualifications of candidates to be appointed on the REOC to broaden the views and representation of the community; and WHEREAS, the City's voter -approved local transaction (sales) and use tax includes substantial accountability measures including: requirements for independent annual financial audits; integration of use of funds into the City's budget and goal -setting process; annual community reports; and annual citizen engagement meetings; and WHEREAS, the City recognizes the importance of periodically reviewing the long-term community services and investment priorities to align with the community's priorities; and NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo, as follows: SECTION 1. Chapter 2.14 of the City's Municipal Code is hereby amended and re-enacted in full to read as follows: X Packet Page 137 Item 9 Ordinance No. (2020 Series) Page 2 Chapter 2.14 REVENUE ENHANCEMENT OVERSIGHT COMMISSION 2.14.010 Commission established and purpose. The rRevenue eEnhancement eoversight ECommission (REOC) is hereby established to review, report, and make recommendations regarding the use of revenues collected through the city's voter -approved general purpose, one and a half -percent sales tax authorized by Chapter 3.15. The REOC is authorized to review these tax revenues and expenditures, report on the city's stewardship of this general purpose tax and provide recommendations directly to the ECity ECouncil regarding expenditures of these tax revenues as an integral part of the budget process. The establishment of the REOC shall be effective upon voter approval of a revenue enhancement measure to be proposed in November 204-420 and shall continue in existence as long as Chapter 3.15, adopted by such measure, is in effect. 2.14.020 Membership and appointment. The REOC shall consist of five members who are residents of the city. Members shall be appointed by the whole city council through a public application and appointment process. When recruiting members, the city will seek members that have experience with finance, budgeting, municipal accounting or represent a sales tax generating business. 2.14.030 Term of office and compensation. A. Terms. Of the members first appointed, three shall be appointed for the term of three years, and two shall be appointed for two-year terms. Subsequent appointments to the REOC shall be for three years. Vacancies during the term shall be filled by the city council for the unexpired portion of the term. Members may be removed by the city council with or without cause by a majority vote of the city council. 2.14.040 Powers and duties. The REOC shall meet a minimum of four times per year to perform its duties, as follows: A. Generally. The REOC shall have the authority to conduct public hearings as directed by the city council or city policy. The REOC shall exercise the duties conferred upon it by this chapter, and as necessary to achieve its purpose. B. Annual Community Report. The REOC shall conduct a public hearing annually to review and take public testimony on the essential community services and investment measure annual report. C. Annual Audit. The REOC shall meet annually to review the audited financial statements contained in the comprehensive annual financial report for the essential community services and investment measure. 3 Packet Page 138 Item 9 Ordinance No. (2020 Series) Page 3 D. Annual Citizen Oversight Meeting. The REOC shall hold an annual essen4ial community services and investment measure community forum for the purpose of taking input from residents and community members on preferences for the use of the revenues generated by the essen4ial community services and investment tax. E. Budget Recommendations. The REOC shall meet for the purpose of making recommendations to the city council regarding the uses of revenue generated by the essen4ial community services and investment measure. The REOC shall take into consideration the input provided by residents and community members during the annual citizen oversight meeting, the purpose of the essen4ial community services and investment, the major city goals established by the city council, and the amount of revenue available from past fiscal years, and projected to be available during the next fiscal year, in making its budget recommendations to the council. F. Outreach and Education. The REOC shall be authorized to perform outreach and educational activities so that residents and community members are informed about the costs and benefits associated with the collection and use of revenue generated by the essential community services and investment. 3 Packet Page 139 Item 9 Ordinance No. (2020 Series) Page 4 G. Long -Term Community Services and Investment Priorities. Every eight years, the City will incorporate a long-term priority setting exercise into the Financial Plan development process to determine the long-term community services and investment priorities for the use of Local Revenue Measure funds. This exercise shall include receiving input from residents, community members, and the REOC regarding spending priorities with priorities being set by the City Council as a part of the development of the Financial Plan. INTRODUCED on the day of 2020 AND FINALLY ADOPTED on the day of 2020 by the Council of the City of San Luis Obispo on the following vote: AYES: NOES: ABSENT: Mayor Heidi Harmon ATTEST: Teresa Purrington City Clerk APPROVED AS TO FORM: J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on Teresa Purrington City Clerk X Packet Page 140 0 M4 :10 MCI % tz Ak AwVol soli' �a , CITY OF SHP. DELIS OBISPO j JA Recommendation 1. Introduce an Ordinance (Attachment A) amending Chapter 2.14, Revenue Enhancement Oversight Commission, of the Municipal Code; and 2. Direct staff to return to the City Council for the second reading of the ordinance as part of the certification of results of the General Municipal Election of November 3, 2020. Background ■ July 21, 2020 — Council approved the placement of Measure G-20 on the November 3, 2020 ballot. ■ Directed staff to return with proposed amendments to Chapter. 2.14 - Revenue Enhancement Oversight Commission, of the Municipal Code. Role of the REOC ■ Five -member citizen advisory body ■ Makes recommendations to the City Council on the use of the local general sales tax. ■ Reviews the annual audit, approves the community report & report -in -brief. :REVENUE °ME SURE LOCAL REVENUE MEASURE ANNUAL COMMUNITY REPORT Fiscal Year 2G18-19 -- HOW DID WE SPEND REVENUES? LAUREL LANE COMPLETE STREETS PAGE i Read aL, _v: LG,.V fievenue Measure Turtle •Here sF ,;'i'9 -'4. ■ Holds an annual citizen oversight meeting to receive feedback on funding priorities. Proposed Amendments to Chapter 2.14 2.14.020 Members and appointment The REOC shall consist of five members who are residents of the city. Members shall be appointed by the city council through a public application and appointment process. When recruiting members, the city will seek members who have experience with finance, budgeting, municipal accounting or represent a sales tax generating business. ;;a Proposed Amendments to Chapter 2.14 2.14.040 Powers and duties G. Long -Term Priority Setting. Every eight years, the City will incorporate a long-term priority setting exercise into the Financial Plan development process to determine the long- term community services and investment priorities for the use of Local Revenue Measure funds. This exercise shall include receiving input from residents, community members, and the REOC regarding spending priorities with priorities being set by the City Council as a part of the development of the Financial Plan. Proposed Timeline for 2021-23 Financial Plan December Present recommended spending priorities to the REOC • • February Council Goal - Setting Exercise January Community Engagement with Council & REOC April Present Preliminary Financial Plan to the Council March Present Preliminary Budget to the REOC I • June Financial Plan Adoption on 7 Recommendation 1. Introduce an Ordinance (Attachment A) amending Chapter 2.14, Revenue Enhancement Oversight Commission, of the Municipal Code; and 2. Direct staff to return to the City Council for the second reading of the ordinance as part of the certification of results of the General Municipal Election of November 3, 2020. Y 40 'L,,%M-fjr s 0 4gi -7511: A`j soli' CITY OF SHR DELIS OBISPO JA