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Home My WebLink About10-20-2020 City Council PresentationsCity Council: Attendee Participation Open and close your control panel using the orange arrow Join audio: •Choose Computer Audio to use computer Mic &Speakers •Choose Telephone and dial using the information provided Your Participation •Please submit your name and Item #in the Questions panel •When Public Comment is opened for the Item your name will be called and your mic unmuted •Please do not use raise hand option. Public Comment City Council Regular Meeting October 20, 2020 •Verbal Public Comment ➢Participants of the webinar: •Submit a ‘question’that includes their name and item number (or public comment)for the item they would like to speak on. •Once public comment for the item is called,your microphone will be unmuted and you will have three minutes to speak. Item #1 PROCLAMATION 1.NATIONAL HOSPICE AND PALLIATIVE CARE MONTH PROCLAMATION ____________________________________________ Recommendation: Mayor Harmon will proclaim the month of November as “National Hospice and Palliative Care Month.” PUBLIC COMMENT FOR ITEMS NOT ON THE AGENDA •Verbal Public Comment ➢Participants of the webinar: •Submit a ‘question’that includes their item and number (or public comment) for the item they would like to speak on. •Once public comment for the item is called, your microphone will be unmuted, and you will have three minutes to speak. FOUNDATION REPAIR 679 MONTEREY . THE BELLO HOUSE Bill and Michelle Walter, Owners San Luis Obispo City Council Meeting 10-20-2020 CURRENT CONDITION •ORIGINAL CONDITION Items #2 –#9 CONSENT AGENDA Matters appearing on the Consent Calendar are expected to be non-controversial and will be acted upon at one time.A member of the public may request the Council to pull an item for discussion. Pulled items shall be heard at the close of the Consent Agenda unless a majority of the Council chooses another time.The public may comment on any and all items on the Consent Agenda within the three-minute time limit. 10.ANNUAL PUBLIC HEARING FOR THE TOURISM BUSINESS IMPROVEMENT DISTRICT _________________________________________________________________ Recommendation: 1.Conduct a public hearing to receive testimony regarding the City Council’s intention to continue the San Luis Obispo Tourism Business Improvement District and determine whether a legally sufficient protest is made;and 2.If no legally sufficient protest is made,adopt a Resolution entitled,“A Resolution of the City Council of the City Of San Luis Obispo,California,declaring the basis for and the levy of the assessment for the San Luis Obispo Tourism Business Improvement District and affirming the establishment of the district”setting forth the basis for the assessment, and levying the assessment upon hotels in the district for fiscal year 2020-21. Item #10 PUBLIC HEARING ITEM Staff Presentation By: Greg Hermann, Deputy City Manager Molly Cano, Tourism Manager City of San Luis Obispo Tourism Business Improvement District Annual Public Hearing Recommendations Conduct a public hearing to receive testimony regarding the intention to continue the San Luis Obispo Tourism Business Improvement District Determine whether a legally sufficient protest is made If no legally sufficient protest is made, adopt a resolution affirming the continuation of the San Luis Obispo Tourism Business Improvement District, setting forth the basis for the assessment, and levying the assessment upon hotels in the district for fiscal year 2020-21. Overview Status of Tourism in SLO Today 2020-21 Tourism Marketing Objectives Annual Protest Hearing Visit SLO CAL Community Dashboard Arrivalist Visitation SLO TBID 2020-21 Marketing Plan •MISSION –We share the abundance of SLO, driving the lodging economy and serving as the voice of our stakeholders. •VISION –A welcoming community with a vibrant economy that enriches the lives of visitors and residents alike. •VALUE PROPOSITION –San Luis Obispo is an authentic and inviting California community where you can play, taste, explore, relax, and recharge. MARKETING OBJECTIVES In FY 2020 -2021 our marketing objectives and efforts will align with the following strategic imperatives: –Elevate the SLO Brand and Experience –Deliver Smart Growth –Build Meaningful Partnerships FY 2020/2021 OPPORTUNITY -Heart of the City -Road Trip Must -Outdoor Paradise -Safe Relaxation TARGET AUDIENCES -DEMOGRAPHIC -GEOGRAPHIC -VISIT CALIFORNIA TRIP MOTIVATORS #SLOready Campaign Intent Groups -Culinary -Outdoor -Relaxation & Wellness -Family & Frequent Traveler #SLOready Campaign Video #SLOready Campaign Video Activating Across the Traveler’s Journey Recommendations Conduct a public hearing to receive testimony regarding the intention to continue the San Luis Obispo Tourism Business Improvement District Determine whether a legally sufficient protest is made If no legally sufficient protest is made, adopt a resolution affirming the continuation of the San Luis Obispo Tourism Business Improvement District, setting forth the basis for the assessment, and levying the assessment upon hotels in the district for fiscal year 2020-21. Tourism Business Improvement District Annual Public Hearing Recommendations Conduct a public hearing to receive testimony regarding the intention to continue the San Luis Obispo Tourism Business Improvement District Determine whether a legally sufficient protest is made If no legally sufficient protest is made, adopt a resolution affirming the continuation of the San Luis Obispo Tourism Business Improvement District, setting forth the basis for the assessment, and levying the assessment upon hotels in the district for fiscal year 2020-21. PUBLIC COMMENT FOR ITEM #10 •Verbal Public Comment ➢Participants of the webinar: •Submit a ‘question’that includes their name and item number (or public comment)for the item they would like to speak on. •Once public comment for the item is called,your microphone will be unmuted and you will have three minutes to speak. 11.4TH QUARTER BUDGET REVIEW ____________________________________________________________________ Recommendation: 1.Review FY 2019-20 unaudited year end actuals and FY 2020-21 fiscal outlook;and 2.Adopt a Resolution approving Water and Sewer Rate Increases and approving revisions to the adopted 2020-21 Water and Sewer Fund Budget Appropriations;and 3.Approve the goal setting process and timetable for development of the 2021-23 Financial Plan;and 4.Adopt a Resolution authorizing staff to pursue the Proposition 68 Per Capita Grant Program,with the California Department of Parks and Recreation Office of Grants and Local Services;and 5.Authorize the Assistant City Manager to execute the necessary grant documents and appropriate the grant amount into the Parks and Recreation Department’s budget upon grant award. Item #11 BUSINESS ITEM Staff Presentation By: Brigitte Elke, Finance Director Natalie Harnett, Budget Analyst October Budget Review 19-20 4th Quarter Review, 20-21 Outlook October 20, 2020 28 29 Recommendations 1.Review FY 2019-20 unaudited year end actuals (Attachment A) and FY 2020- 21 fiscal outlook 2.Approve a Resolution (Attachment B) adopting changes to the FY 2020-21 Water and Sewer budgets 3.Approve the goal setting process and timetable for development of the 2021-23 Financial Plan (Attachment C) 4.Approve a Resolution (Attachment D) authorizing staff to pursue the Proposition 68 Per Capita Grant Program, with the California Department of Parks and Recreation Office of Grants and Local Services; and 5.Authorize the Assistant City Manager to execute the necessary grant documents and appropriate the grant amount into the Parks and Recreation Department’s budget upon grant award. 6.Approve the appropriation of $20,000 from unassigned FY 18-19 fund balance to fund the necessary work to accomplish the needed specific plan amendments to the Airport Area and Margarita Area Specific Plans 30From October Revise to Review Review •Status: tracking in line with forecasts •Hold budget as is •Many accomplishments in economic recoveryPrepare •With uncertainty about the health emergency, potential budget adjustments needed early in fiscal year. Monitor •Possible economic shifts •Volatility, uncertainty with winter season, unemployment, consumer confidence, GDP Steady Economic Growth “hit a wall” in March 2020 COVID-19Financial Plan FHRP –2nd Year CIP •Economic uncertainty & recovery •Preservation of cash flow •Unfunded COVID costs •Recovery of major revenue sources after steep decline •Budget stress •Unknowns –short and long-term Ongoing Hurdles for Local Governments & SLO: 31 FY20 How the City Responded (financially) 1.Activated Fiscal Health Contingency Plan(hiring & purchasing chill) 2.Retained 18-19 General Fund Balance and postponed one-time budget allocations, including CalPERS $4.2 million payment* 1.Re-assessed the long-term forecast 2.Presented a balanced FY20-21 Supplemental Budget by reducing expenditures and re-budgeting CIP The City’s Strategy: Monitor and Stay Disciplined and Nimble Review revenues and expenditures on a quarterly basis with Council and make budget adjustments as needed to address additional shortfalls or more favorable conditions. March 2020 June 2020 *As adopted in the Fiscal Health Response Plan October 2020 For now, hold General Fund budget as adopted. Minor changes to Water/Sewer 32 33Important Part of the Story 2019-20 Year-End Actuals Table 2: Year End Variance Adopted Budget COVID Forecasts (May 2020)FY 19-20 Actuals Total Operating Expenditures (67,612,000)$ (64,878,000)$ (65,489,962)$ Total Other Expenditures (CIP, Debt, Transfers)(12,365,615)$ (12,365,615)$ (12,558,115)$ Cost Allocation Plan 4,281,000$ 4,281,000$ 4,281,000$ Total Expenditures (75,696,615)$ (72,962,615)$ (73,767,077)$ Total Revenue 77,337,000$ 71,588,000$ 75,527,004$ Revenue Over/ (Under) Expenditure 1,640,385$ (1,374,615)$ 1,759,927$ Carryover to FY 20-21 (1,518,208)$ Year End Variance w/ Carryover 241,719$ The Current Picture The upside •19-20 revenues performed better than expected (this is true across the State) •Realized significant savings from negotiated additional contributions to CalPERS and hiring new staff under the PEPRA retirement Plan –a direct outcome of the FHRP and pension reform. The downside •Still too many unknowns: availability of a vaccination, elections, additional stimulus, financial market stability, tourism & event industry, consumer confidence •Universities remaining mainly virtual •Business closures, online shopping •Re-opening fluctuations •Budget balancing solutions not sustainable The financial gap is not getting wider at this time, but an extended economic downturn could put the City in a negative position requiring further action. 34 2018-19 Results: Revenue goals met, except for Cannabis revenues 2019-20 Results: Realized savings from employees paying more towards retirement, additional contributions to CalPERS and hiring new staff under the PEPRA retirement plan. CalPERS down payment not paid. $6.0 million One-time money in undesignated fund balance as of June 2019. Retain for anticipated revenue shortfalls and economic recovery. Re-visit in October 2020 Budget Guided by the FHRP 35 Based on unaudited financials, FY 19-20 revenues exceeded expenditures by only $242k; therefore this goal will not be met The Long-term Picture Forecast does not include Measure G-20 * Expenditure projections (2021-2025) are based on the 19-21 Financial Plan long term forecast. Long term expenditure reductions will be necessary during the 21-23 financial planning process in order to match revenue shortfalls and create a balanced budget 36 $70.26 $69.57 $8.62 $5.85 Revenues Expenditures Shortfall ReductionBalanced Budget Revised Budget Original Budget $78.89 Original Budget $75.41 Revised Budget 2020-21: How did we balance the shortfall? (General Fund) Expenditure Reductions Staffing $2.96 m Insurance Expenses $1.06 m CIP $1.76 m Other $0.07 m TOTAL $5.85 Revenue Shortfalls Sales Tax $3.41 m Transient Occupancy Tax $1.87 m Other Taxes $2.03 m Fees for Service $1.31 m TOTAL $8.62 Budget Changes due to COVID19 (in millions) 37 Original Budget assumed $3 million surplus for CalPERS 382020-21: Budget-in-Brief: General Fund Contract Services 7% Capital 8% Debt 4% Other Operating Expenses 10% Staffing 71% Tax & Franchise Revenue 82% Fees for Service 18% GENERAL FUND REVENUE GENERAL FUND EXPENDITURES Re-cap: 20-21 Expenditures by Fund 39 Re-cap: 20-21 Revenues by Category 40 Update: Water and Sewer Funds Residential and Landscape Consumption Business and Schools Consumption COVID-19 Impact on Consumption 41 Response to COVID: freeze positions, defer approved rate increase, monitor consumption Utilize unreserved working capital if needed Long-term concerns due to COVID: University consumption, consequences of rate deferral, bond ratings, delinquent accounts, infrastructure needs. No negative impacts to utility customers at this time Re-visit in DecemberJuly 2020 Rate Increase 42 20-21 Water/Sewer Budget Changes Sewer ▪Cal Poly extended virtual learning ▪Decreased school consumption Water ▪Recycled water sales ▪Re-forecasted with updated rates Decrease 2.5% Increase 1.4% Revenue Forecast Changes Recommendation: Unfreeze two positions Why? •Important roles in core services and City goals •Support State laboratory standards •Current distribution of workload is unsustainable •Long term COVID impacts projected to be less severe Fiscal Impact: $119,700 +$302,000 -$400,700 Parking Fund: 20-21 Revenue Shortfalls $2,750 $3,292 $50 $1,050 $2,050 $3,050 $4,050 $5,050 $6,050 $7,050 Revised Projection Shortfall Original Budget $6,042 2020-21 Revenue Shortfall Projections (thousands) Deferred Rate Increase -$727 Reduced Enforcement -$334 Waived Metered Parking -$1,104 Reduced Structure Usage -$772 Other Shortfalls -$357 TOTAL -$3,292 2020-21 Parking Revenues (thousands) 2019-20 Budget Shortfall: -$1.67 million Impact to customers: No negative impacts at this time Deferral of needed capital infrastructure projects (Palm-Nipomo Parking Garage) 43 Perspective- 4 months of pandemic environment Transit In thousands Original FY21 Revised FY21 Variance Revenues $4,188 $4,182 -$6 Expenditures $4,164 $3,670 -$494 Working Capital $2,829 $3,489 $660 Unreserved Working Capital $1,945 $2,225 $280 •Significant decrease in ridership •Changes to operations –hours, Cal Poly services, community assistance •Funding through CARES act will fully offset revenue shortfalls and operational costs for FY 20 and FY 21 44 45 Retirement Incentive Update Year End Projection Cost of program $150,000 One-time savings $183,000 Ongoing Savings (year one –6 months)$92,000 Net savings in year one:$125,000 Purpose: Replace retirees with employees at lower salary and retirement tiers Status: Results drew fewer applicants than anticipated, but still significant savings 12 utilized incentive to date 46Fiscal Outlook as of October 2020 •More favorable tax and franchise revenue will hopefully offset losses in fee programs due to extended closures •Updated County property tax forecasts show continued growth in FY21 •Tourism and hospitality remain a top concern •Responsibility to paydown unfunded liability remains on the forefront •Continued deferral of CIP projects •Updated forecast to be presented to Council at mid-year 47 How has the City supported the local economy? Funding for Childcare Amendments Council Agenda Correspondence –10.19.20 48 •Allocate $20,000 to updating zoning regulations to allow for childcare centers in Airport Area •Based on the needed scope of land use changes to expand childcare opportunities and the public benefits realized to the entire community 49 Prop 68 Per Capita Grant Program •The California Department of Parks and Recreation (DPR) is providing nearly $200 million for more than 700 agencies under the Proposition 68 Per Capita Grant Program. •Non-competitive •Signed Resolution required City of SLO allocation: $177,952 502020-23 Financial Plan Schedule 51 Recommendations 1.Review FY 2019-20 unaudited year end actuals (Attachment A) and FY 2020- 21 fiscal outlook 2.Approve a Resolution (Attachment B) adopting changes to the FY 2020-21 Water and Sewer budgets 3.Approve the goal setting process and timetable for development of the 2021-23 Financial Plan (Attachment C) 4.Approve a Resolution (Attachment D) authorizing staff to pursue the Proposition 68 Per Capita Grant Program, with the California Department of Parks and Recreation Office of Grants and Local Services; and 5.Authorize the Assistant City Manager to execute the necessary grant documents and appropriate the grant amount into the Parks and Recreation Department’s budget upon grant award. 6.Approve the appropriation of $20,000 from unassigned FY 18-19 fund balance to fund the necessary work to accomplish the needed specific plan amendments to the Airport Area and Margarita Area Specific Plans PUBLIC COMMENT FOR ITEM #11 •Verbal Public Comment ➢Participants of the webinar: •Submit a ‘question’that includes their name and item number (or public comment)for the item they would like to speak on. •Once public comment for the item is called,your microphone will be unmuted and you will have three minutes to speak. LIAISON REPORTS AND COMMUNICATIONS Council Members report on conferences or other City activities.At this time,any Council Member or the City Manager may ask a question for clarification, make an announcement,or report briefly on his or her activities.In addition,subject to Council Policies and Procedures,they may provide a reference to staff or other resources for factual information, request staff to report back to the Council at a subsequent meeting concerning any matter,or take action to direct staff to place a matter of business on a future agenda.(Gov.Code Sec.54954.2) ADJOURNMENT The City Council will hold a Closed Session Meeting on Tuesday, November 10, 2020 at 5:00 p.m., via teleconference. The next Regular Meeting of the City Council is scheduled for Tuesday, November 17, 2020 at 6:00 p.m., via teleconference. Agendas for Council Meetings are published no later than 72 hours before the meeting date. Refer to the agenda for Webinar registration details and instructions for providing public comment. The Regular Meeting of the San Luis Obispo City Council will resume shortly *Recess in Progress*