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HomeMy WebLinkAboutItem 19 - Investment in Economic Development Efforts and Homeless ServicesItem 19 GtT Y O fiCouncil Agenda Report ti Department Name: Community Services Cost Center: For Agenda of: Placement: Estimated Time: FROM: Derek Johnson, City Manager Prepared By: Shelly Stanwyck, Assistant City Manager Greg Hermann, Deputy City Manager Ryan Betz, Assistant to the City Manager 1009 December 8, 2020 Business 30 minutes SUBJECT: IMMEDIATE INVESTMENT IN ECONOMIC DEVELOPMENT EFFORTS & HOMELESS SERVICES RECOMMENDATION 1. Authorize the City Manager, per Resolution No. 11117 (2020 Series), to utilize FY 18-19 General Fund unassigned fund balance, in the amount of $3,425,000 for economic recovery efforts, capital projects in the Downtown, and to hire a full-time, contract position to coordinate City efforts to address public health and safety related to homelessness in response to the immediate and long-term impacts of the COVID-19 Pandemic. 2. Appropriate $3,425,000 in unbudgeted Local Revenue Measure funds for the 2020-21 fiscal year resulting from the passage of Measure G-20 to replenish the General Fund unassigned fund balance for the efforts described above, subject to concurrence of the Revenue Enhancement Oversight Commission. DISCUSSION Background On March 17, 2020, in response to the COVID-19 health emergency and declarations of a State of Emergency by the President of the United States, the Governor of the State of California, and San Luis Obispo County, the City Council adopted Resolution No. 11116 proclaiming a local emergency. At that same meeting, the Council adopted Resolution No. 11117, authorizing the City Manager to use FY 2018-19 General Fund unassigned fund balance of approximately $5.8 million above required reserve levels, in order to ensure public health and safety and to address and mitigate the long-term ramifications due to the COVID-19 health emergency. Approximately $5.4 million of this amount remains. Since that time, the community and business impacts of the COVID-19 pandemic have continued and with the County of San Luis Obispo's recent transition from Tier 2 (Substantial) to Tier 1 (Widespread), there is an immediate need to invest in additional economic development efforts to support businesses and for homeless services to support the community's most vulnerable. Packet Page 459 Item 19 Investment in Economic Development Efforts and Homeless Services The City's top priority (Meta Goal) for 2020-21 is San Luis Obispo's economic stability, recovery, and resiliency. This priority, adopted by the City Council as part of the 2020-21 Supplemental Budget, provides the structure and focus for the City of San Luis Obispo to continue to respond to, and recover from, COVID-19's public health, economic, and social impacts to the City of San Luis Obispo' s residents, businesses, and community partners. To support this effort, the Meta Goal identifies ten specific strategies: 1. Community. City residents and community members are encouraged to be engaged in the reopening of the City, the support of local businesses, the continued spirit of community, and the return to San Luis Obispo' s high quality of life. 2. Businesses. City departments, staff, and programs will assist local businesses to re -open, stay open, thrive, and grow. 3. City Organization. All City Departments will prioritize economic response, recovery, reopening, reinvention, and resiliency activities. 4. Impacted Industries and Business Neighborhoods. City staff will provide focused support to the most impacted business sectors and business neighborhoods. 5. Infrastructure and Capital Projects. Capital improvement projects will be prioritized to address public health and safety, maintenance of existing facilities, and support of Economic Recovery with a focus on projects that advance local business recovery, sustainability, and community vibrancy. 6. Downtown. City departments and staff will work with businesses and community partners to return Downtown San Luis Obispo, the historic, cultural, and social center of the City, to its vibrant and vital state. 7. Cal Poly. City staff will collaborate with and support Cal Poly during its reopening, strengthen existing partnerships, support students living and working in the City, and collaborate to retain knowledge and innovation generators to ensure a resilient future. 8. Community Partners. City staff will work together with existing and new local and regional economic development, arts, cultural, entertainment, and nonprofit partners with clear roles and responsibilities to maximize economic recovery efforts in the City. 9. Quality of Life. Staff will partner with the community for the continued support, preservation, and recovery of the "SLO Life". The City as a dynamic and safe community with its natural beauty, quality recreational, arts and cultural activities will be nurtured and advanced. 10. Resiliency. During the phases of relief, recovery, and reinvention City staff and programs will begin to identify ways to build both City and businesses' resiliency In alignment with the Meta Goal and to support the local economy suffering from the impacts of the COVID-19 pandemic, immediate, additional investment in several economic development efforts as well as homeless services coordination is needed to retain businesses and continue efforts towards economic recovery including: Packet Page 460 Item 19 1. Create Grant Funding Opportunities for Tenant Improvements (TIs) ($2,000,000) One of the keys to the economic recovery is facilitating the re -tenanting of vacant spaces. In addition to the process improvements related to TIs the City has already implemented, a joint City/Downtown SLO vacancy task force and other stakeholders recommend that reducing the financial impact of completing a TI would be of significant benefit. The general concept of this program is to locally invest $2,000,000 in short term Certificates of Deposit to generate interest and use that interest for a grant program to help offset the cost of a TI permit. The principal amount would be budgeted to be spent on projects and services as a part of the 2021-23 Financial Plan. 2. Expand the SLO City Small Business Relief Grant Program ($500,000) First launched in August 2020, the program is a partnership between the City, nonprofit, and business community that provided a total of $250,000 to 52 business. The new grant program would be for $500,000 with additional priority given to the sectors most impacted by the State's "Blueprint for a Safer Economy." 3. Increase Efforts to Support Downtown Vitality ($425,000) The City has allocated significant resources to programs in the Downtown like Open SLO parklets, Mission Plaza Dining and the Light Up Downtown holiday activation. This funding would provide for the expansion and improvement of those programs along with funding for new, similar programs that will be needed as the City continues to respond to the challenges associated with pandemic and recovery of the Downtown. 4. Implement an Economic Development Shop Local Incentive ($200,000) Similar to the successful "Rainy Day" promotion that the TBID has executed in past years, the goal is to incentivize individuals to shop locally and directly support the local business community at the same time. The final program is still being developed, but the general concept is that individuals would be rewarded, through gift cards, for spending money at local brick and mortar locations and the gift cards would then generate additional spending at local businesses. 5. Homeless Services Support and Coordination ($300 000) The County of San Luis Obispo is an extension of the State of California that provides health and human services (and, unlike the City, receives funding for said services). For many years, consistent with our community values of caring for others, the City of San Luis Obispo has dedicated General Fund resources toward homeless services. Focused activities include the operational support of the 40 Prado Homeless Services Center, the City's Community Action Team (which is comprised of police officers and a mental health professional), coordination of the Community Development Block Grant funding (which has addressing homelessness as a top priority), and the cross departmental collaboration of all departments focused on the clean-up of abandoned property and trash in parks, creeks, and open space associated with illegal camping. Packet Page 461 Item 19 During the pandemic the City has continued to direct funds to provide additive homeless services in the City which have included a safe parking pilot program and significant outreach by staff to connect the unsheltered with services so that they may be housed during this unprecedented time. This work has been accomplished, as have most work efforts during the pandemic, by adding workload to existing staff resources; while it is not a direct part of the Meta Goal, it is certainly connected and supportive of that focused effort. This distributed work by staff who are also providing core services and emergency response during the COVID-19 pandemic is not a sustainable staffing approach, and there is much work to be done in this topic area in the coming year given the existing unsheltered and mental health crisis. Beginning in 2021, the County of San Luis Obispo will be coordinating an enhanced regional effort to address the increased impacts of homelessness on the unsheltered, local residents, visitors, and businesses. The objective is to better address this issue in a collaborative and coordinated fashion to allocate limited resources and create efficiencies of service to the unsheltered in the County and all of its cities. Anticipated outcomes of this regional coordination are: a common governance structure; clear roles and responsibilities amongst agencies, cities and non-profit partners; efficiencies in operations and service provision (and identification of unnecessary redundancies); and, funding to address the issue in the short- and long-term. To best leverage the outcomes of this regional effort and maximize the use of internal resources, staff recommends hiring a full-time, contract employee through the end of the 2022-23 fiscal year. Short term objectives include coordinated, focused efforts to address issues in highest priority areas of the City, developing a Homelessness Strategic Plan for the City, building upon existing relationships with the County, cities, other regional partners and nonprofits to maximize services available and the determination of long- term resource needs for the preparation of the 2023-25 Financial Plan. The position would be embedded in the Community Services Group in recognition of its external and service orientation and most likely would serve in the Community Development Department given the significant policy linkage with its existing Housing Program. Staff is proposing the allocation of approximately $300,000 to accomplish this multi -year work effort to hire a management level professional skilled at community building, policy development, and budgeting. Previous Council or Advisory Body Action • On June 2, 2020, as part of the Supplemental Budget, the Council adopted a unified Meta Goal to focus efforts on San Luis Obispo's economic stability, recovery, and resiliency. • The Revenue Enhancement Oversight Commission is scheduled to consider this recommendation on December 3ra Packet Page 462 Item 19 Policy Context The proposed actions are consistent with Measure G-20 as it is a general-purpose measure and priorities in the ballot language including retention of local businesses, keeping public areas clean/safe, and addressing homelessness. The proposed actions are also consistent with the City's 2020-21 Meta Goal of San Luis Obispo's stability, resiliency, and recovery. Section 804 of the City's Charter provides that ... "At any meeting after the adoption of the budget, the Council may amend or supplement the budget by motion adopted by a majority vote of the Council." Section 2.24.090 of the Municipal Code provides: "Any expenditures made in connection with emergency activities, including mutual -aid activities, shall be deemed conclusively to be for the direct protection and benefit of the inhabitants and property of the city." Financial Plan Policies The City's Budget Policies under Financial Reporting and Budget Administration section C reiterate that: "As set forth in the City Charter, the Council may amend or supplement the budget at any time after its adoption by majority vote of the Council members. The City Manager has the authority to make administrative adjustments to the budget as long as those changes will not have a significant policy impact nor affect budgeted year-end fund balances." Public Engagement At the November 17, 2020 Council meeting, the City Manager introduced the ideas recommended in this report dependent on Council action and the Revenue Enhancement Oversight Commission is scheduled to consider this recommendation on December 3rd. All meetings will follow required notifications and postings and the public is able to provide comments before and during the meeting. CONCURRENCE Community Services and the Human Resources Department concurs with this 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 Packet Page 463 Item 19 Fiscal Analysis: Funding Sources Current FY Cost Annualized On -going Cost Total Project Cost* General Fund $3,425,000 $130,000 $3,425,000 State Federal Fees Other: Total $3,425,000 $130, 000 $3,425,000 * Two and a quarter year Contract Homeless position ALTERNATIVES The City Council may decide to not move forward with the proposed actions. This is not recommended as businesses are experiencing significant financial distress from the COVID-19 pandemic and immediate action is required to support the local economy. Delayed action will likely cause greater damage and these actions will likely help mitigate the impacts to the overall health of our community. Attachments: a - Draft Resolution Packet Page 464 Item 19 RESOLUTION NO. (2020 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, TO APPROPRIATE $3,425,000 IN FY 2018-19 GENERAL FUND UNASSIGNED FUND BALANCE FOR IMMEDIATE INVESTMENT IN ECONOMIC DEVELOPMENT EFFORTS AND HOMELESS SERVICES AND TO REPLENISH THE APPROPRIATION WITH UNBUDGETED LOCAL REVENUE MEASURE FUNDS RESULTING FROM THE PASSAGE OF MEASURE G-20 FOR FISCAL YEAR 2020-21 WHEREAS, on March 17, 2020, the City Council adopted Resolution No. 11117, authorizing the City Manager to utilize fiscal year 2018-19 undesignated General Fund balance for one-time budget allocations related to the COVID-19 health emergency; and WHEREAS, since that time, the community and business impacts of the COVID-19 pandemic have continued and with the County of San Luis Obispo's recent transition from Tier 2 (Substantial) to Tier 1 (Widespread), there is an immediate need to invest in additional economic development efforts to support businesses and for homeless services to support the community's most vulnerable; and WHEREAS, the City's top priority for fiscal year 2020-21 is San Luis Obispo's economic stability, recovery and resiliency. This priority, adopted by the City Council as part of the 2020- 21 Supplemental Budget, provides the structure and focus for the City of San Luis Obispo to continue to respond to, and recover from, COVID-19's public health, economic, and social impacts to the City of San Luis Obispo's residents, businesses, and community partners; and WHEREAS, on November 3, 2020, the San Luis Obispo voters approved a local transaction and use tax measure that will begin collecting applicable tax on April 1, 2021 through the California Department of Tax and Fee Administration; and WHEREAS, the fourth quarter tax revenue is anticipated to produce $3.8 million in transaction and use tax revenue to the City's General Fund; and WHEREAS, the City needs to invest in economic development to assist the business community with the ongoing effects from the COVID-19 pandemic; and WHEREAS, the City Manager requested the use of $3,425,000 in undesignated fiscal year 2018-19 General Fund balance at the City Council meeting on December 8, 2020 for economic development and homeless services. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: 17 Packet Page 465 Resolution No. (2020 Series) Item 19 Page 2 SECTION 1. With the approval of $3,425,000 for immediate economic development efforts and homeless services, the City Council directs staff to utilize the revenue from the first quarter collection of the local transaction and use tax to replenish the undesignated General Fund balance. SECTION 2. The undesignated fiscal year 2018-19 General Fund balance will be used for one-time additional payments to the City's pension system Ca1PERS to pay down the unfunded pension liability. The amount shall be no less than $4.2 million and up to $7.2 million based on available undesignated fund balance at the time of the 2019-20 audit and City's Comprehensive Annual Financial Report. Upon motion of and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this ATTEST: Teresa Purrington City Clerk APPROVED AS TO FORM: J. Christine Dietrick City Attorney seconded by day of Mayor Heidi Harmon 2020 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 17 Packet Page 466 jrM1 ��. -'S.� _ • , 1 ;.� •�►. _ _t {fir . ..x, r, !! r� £f^l'•�'�; •�. + i ,r f: r�. .�� �•�j' Tip - .i, •, ,�� .r C5) CITY OF SHR DELIS OBISPO Recommendation 1. Adopt a Resolution entitled, "A Resolution of the City Council of the City of San Luis Obispo, California, to appropriate $3,425,000 in FY 2018-19 General Fund Unassigned Fund Balance for immediate investment in economic development efforts and homeless services and to replenish the appropriation with unbudgeted Local Revenue Measure Funds resulting from the passage of Measure G-20 for Fiscal Year 2020-21" to address public health and safety related to homelessness in response to the immediate and long-term impacts of the Covid-19 Pandemic; and 2. Authorize the City Manager, per Resolution No. 11117 (2020 Series), to appropriate $3,425,000 in unbudgeted Local Revenue Measure Funds for the 2020-21 Fiscal Year to replenish the General Fund Unassigned Fund Balance for the efforts described above, subject to concurrence of the Revenue Enhancement Oversight Commission. Background ■ March 17, 2020 ■ City proclaims a local emergency in response to the COVID-19 health emergency ■ November 16, 2020 ■ County of San Luis Obispo transitions backwards from Tier 2 (Substantial) to Tier 1 (Widespread) ■ December 3, 2020 ■ Governor announces new Regional Stay Home Order. Counties in the region will be subject to new restrictions. 10 Strategies 73 total Actions Ongoing Completed 75% complete MW 25% complete 10% complete N Not Started Meta Goal Action Status Update 0 5 10 15 20 25 30 35 40 45 Number of Actions ff pqo L.4 - w.- AL J IAM . Jq FAXNKNTM SL-"w nmxnwry W-ld resdww" m the mmnber une " fcw Mw CAy ut San Lm Obispo- Business Amb3ssador H(Atro M517E rlocft-prrVcvvidl9 Proposed Continued Investment in Economic Development Efforts ■Expand the SLO City Small Business Relief Grant Program ($500,000) ■Implement an Economic Development Shop Local Incentive ($200,000) Proposed Continued Investment in Economic Development Efforts ■ Create Grant Funding Opportunities for Tenant Improvements (Tis) ($2,000,000) ■ Continued Efforts to Support Open SLO including Downtown Vitality ($425,000) Proposed Continued Investment Homelessness Services ■ SLO is a Caring Community and provides significant General Fund support to Homeless Services ■ Health and Social Services is a Country responsibility, and they receive funding for that. ■ Cities do not receive direct funding for these services. ■ Cities do not have staff whose primary mission is to focus on this issue — many of our staff are pulled in on today ■ The problem is acute, growing, impactful on the unsheltered, residents, neighborhoods and businesses. ■ 2-Year Contract Resource (Homelessness Response Manager) to focus on the City's role in the region, identify funding and grants, coordinate communications, partnerships, roles and responsibilities, and address the crisis with current staff ■ Homeless Services Support and Coordination ($300,000) Recommendation by the Revenue Enhancement Oversight Commission ■ Thursday, December 3, 2020: The Revenue Enhancement Oversight Commission (REOC), voted 5-0, to recommend to the City Council to appropriate $3,425,000 in unbudgeted Local Revenue Measure Funds for the 2020-21 Fiscal Year for immediate investment in economic development efforts and homeless services. Recommendation 1. Adopt a Resolution entitled, "A Resolution of the City Council of the City of San Luis Obispo, California, to appropriate $3,425,000 in FY 2018-19 General Fund Unassigned Fund Balance for immediate investment in economic development efforts and homeless services and to replenish the appropriation with unbudgeted Local Revenue Measure Funds resulting from the passage of Measure G-20 for Fiscal Year 2020-21" to address public health and safety related to homelessness in response to the immediate and long-term impacts of the Covid-19 Pandemic; and 2. Authorize the City Manager, per Resolution No. 11117 (2020 Series), to appropriate $3,425,000 in unbudgeted Local Revenue Measure Funds for the 2020-21 Fiscal Year to replenish the General Fund Unassigned Fund Balance for the efforts described above, subject to concurrence of the Revenue Enhancement Oversight Commission.