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Item 17 - COUNCIL READING FILE_a_FY 20-21 Mid-Year Report
Mid-Year Budget Review 2019- 21 Financial Plan FISCAL YEAR 2020-21 1 2019-21 Financial Plan MID-YEAR BUDGET REVIEW: 2020-21 February 2021 HEIDI HARMON, MAYOR ERICA A. STEWART, VICE MAYOR CARLYN CHRISTIANSON, COUNCIL MEMBER ANDY PEASE, COUNCIL MEMBER JAN MARX, COUNCIL MEMBER DEREK JOHNSON, CITY MANAGER Prepared by the Department of Finance Brigitte Elke, Director of Finance Natalie Harnett, Principal Budget Analyst 2 TABLE OF CONTENTS TABLE OF CONTENTS (linked) A.Mid-Year Budget Overview A-1: Overview 5 A-2: General Fund Summary - Revenues 5 A-3: General Fund Summary - Expenditures 7 A-4: Water Fund Summary 10 A-5: Sewer Fund Summary 11 A-6: Parking Summary 11 A-7: Transit Summary 12 A-8: Conclusion 13 B. Financial Condition Summaries B-1: Consolidated Financials 15 B-2: General Fund Revenue Detail 17 B-3: Enterprise Fund Revenue Detail 19 B-4: Operating Expenditure Details 21 B-5: Updated Five Year Forecasts 22 C.Work Program Evaluations Summary 29 Administration 31 City Attorney 36 Community Development Department 38 Finance Department 39 Fire Department 41 Human Resources 45 Parks and Recreation 47 Police Department 50 Public Works 53 Transit & Parking 57 Utilities 58 D. Status of Meta City Goal 63 E. Recent Financial and Revenue Reports 64 3 Section A: MID-YEAR BUDGET OVERVIEW 4 Mid-Year Budget Review Fiscal Year 2020-21 SECTION A A-1: OVERVIEW__________________________________________________________________________ The City’s Budget and Fiscal Policies (Financial Plan Purpose and Organization Item G) calls for a formal financial status report to the Council based on the first six months after the beginning of each fiscal year. The Mid-Year Budget Review fulfills this requirement and allows the Council to take a broader look at the City’s financial picture at the mid-point of the fiscal year. This report focuses on the current fiscal year and provides an analysis of adopted budget revenues and expenditure appropriations. It also outlines the achievements and the challenges for each department and the City organization as a whole and provides an update for the adopted City Meta Goal. Based on the review and accompanying analysis, the City remains financially sound and within budgeted allocations. The report provides: 1. An analysis of revenue and expenditure trends since the adoption of the 2020-21 Budget in June 2020 and recommended revisions to revenue and expenditures assumptions (changes to financial position) where appropriate. 2. Updated five-year forecast for all five major funds. 3. An update on performance measures and work programs for each department. 4. An update on the adopted City Meta Goal. 5. An update on current Capital Improvement Plan (CIP) projects. A long-term capital outlook was provided on January 12, 2021 as part of the Budget Foundation materials (linked here). Unless otherwise noted, the actual revenues or expenditures listed in this report are as of November 30, 2020. Due to the timing of the mid-year review and holiday closures, staff began mid-year work in early December and based their analysis on the first five months of the year. Prior to publishing this report, variances were analyzed as of December 31, 2020, and there were no notable variances. A-2: GENERAL FUND SUMMARY – REVENUES_____________________________________________________ COVID19 General Fund revenues were significantly lowered during the supplemental budget preparation that occurred in Spring 2020. At that time, the world was entering its first wave of the COVID-19 pandemic and the economic forecast looked bleak. Fortunately, the City experienced a much smaller reduction in its top revenue, Sales Tax, over the last six months than originally anticipated with the fourth quarter shutdown of the economy. This is largely due to people migrating to online shopping, accelerating this trend and making up much of the losses of brick-and-mortar stores. However, Transient Occupancy Tax and several other revenue streams, such a Parks & Recreation fees, remain significantly lower as the renewed shelter-at-home directives stifle the economic rebound. Based on this Mid-Year status review, the following are anticipated changes over previously projected figures in the 2020-21 Financial Plan Supplement. 5 A. Sales Tax. Based on the latest forecast from HdL (the City’s Sales Tax consultant) in October 2020, the City is expecting a 2.1% sales tax growth in FY 2020-21. This projection is significantly higher than original forecasts received in April 2020 that did not foresee the tremendous increase in online shopping. Staff is cautiously optimistic about the forecast, especially given the latest shelter at home order. Based on data from the last two quarters, it appears that the more favorable results are a change in consumer trends and behavior – while certain industries have been hit hard, others have seen in uptick in sales (ex: home improvement stores, durable goods, cannabis). Based on these trends and the updated forecast, staff recommends increasing Sales Tax projections by $1.25 million for Bradley-Burns, which brings the anticipated revenue to FY 2019-20 levels. Additionally, Local Revenue Measure projections is being increased by $4.1 million to account for the more favorable trends and to include the additional local sales tax measure allocation that the City will receive in the 4th quarter. The measure approved by the City’s voters in November 2020 will go into effect on April 1, 2021. B. Property Tax. Based on an updated forecast from the County Assessor’s office, property tax projections were increased by $1.2 million. This is an 8.3% increase over 2019-20 actuals. The main reason for this is significant growth in the median sales price of homes in the City and a very active real estate market. C. Subventions and Grants – Mutual Aid: Due to the nature of this revenue, Mutual Aid reimbursements are not budgeted in the initial budget but adjusted after the City is informed how much it will receive from Cal OES for assistance to fight major fires in and around the state. The reimbursements include the City’s incurred expenses as well as overhead and administration. The revised budget is the net revenue after the $1,050,000 in Mutual Aid related expenses are deducted from the gross revenue of $1,731,000. D. Parks and Recreation Services. These revenues were significantly lowered as part of the original budget preparation because of continued COVID-19 restrictions and expected cancellations of events and programs in the first few months of the fiscal year. Because of the extended public health guidelines that limit program capacity and restrict organized sports leagues, the department is lowering its projections by an additional $355,951. Some of the losses are partially offset by an increase in childcare revenue and reduction in staffing expenditures for cancelled programs impacted by COVID-19 restrictions. Many Parks and Recreation resources have been repurposed to help with OpenSLO operational needs such as Facilities supplemental staff working Open SLO downtown dining. E. Police Services. Police has revised revenue estimates downwards by $43,300. This adjustment is driven by the actual trends during the first half of the year. Specifically, staff has noticed that because so many people have been working from home and business hours have been modified or businesses remain closed, alarm permit fees have been significantly lower. These are fees collected from a contracted alarm company for each time Graph A1: Sales Tax – 3Q19 compared to 3Q20 6 an alarm goes off and is investigated. In total, Police service fees account for less than 1% of the City’s total revenue and this change is neither significant nor expected to be an ongoing trend. F. Other Revenue. Minor administrative adjustments have been made to several revenue account projections. These include a reduction in the annual Cal Poly Fire services amount, a reduction in general government revenue associated with special events insurance, and minor increases to fire service fees due to CPI adjustments. The net impact is a reduction of $7,521. G. Development Services. While development review revenue is trending high, it is directly tied to increased development activity. The over-realized revenue is used to offset the additional resources needed to process development activity within committed timeframes. The department budgets at a base level to run day-to- day programmatic operations and any addition fee revenue is eligible for allocation in the Development Services Designation within the General Fund (see policy language below). Financial Policy for Development Services Revenue: On June 17, 2014, the City Council revised the fiscal policies to provide for the City Manager to allocate up to 75% of Development Services over-realized revenues to acquire temporary resources for the timely processing of development applications and other permit processing activities. The policy calls for the allocated revenues to be reported to the City Council on a semi- annual basis as part of the mid-year and annual budget presentations. Based on 2019-20 audited financials and usage during the current fiscal year, the following table shows the current balance of the development services designation: Table A1: Development Services Designation 20-21 Beginning Balance $ 899,337 PW Engineering Inspectors $ (150,000) CDD Plans Examiner $ (66,101) Current Balance $ 683,236 A-3: GENERAL FUND SUMMARY – EXPENDITURES__________________________________________________ There are no significant expenditure variances impacting projected fund balances based on data for the first half of the year. The second- and third-year reductions from the City’s Fiscal Health Response Plan (FHRP) were included in the adopted 2019-21 Financial Plan and are on track based on the expenditure review. In response to expected revenue losses associated with the pandemic, the City activated its Fiscal Health Contingency Plan which immediately establish purchasing, travel, and hiring chills to slow spending. To address anticipated losses in revenue, the 2020-21 budget froze appropriations at 2019-20 levels. The Department overviews included in Section B provide details on how operations are maintaining within allocated resources and address potential challenges. COVID-19: It is important to note that as part of the 2020-21 Supplemental Budget development, there was no operating budget allocation for costs associated with COVID-19 response efforts. The City Council therefore authorized the City Manager to use General Fund unassigned fund balance for pandemic and economic recovery related efforts. The table below outlines the current fiscal year COVID-19 related expenditures: 7 Table A2: COVID19 Expenditures and Funding Sources General Fund Balance per June 30, 2020 Based on the City’s audit and Comprehensive Annual Financial Report (CAFR), the General Fund ended fiscal year 2019-20 with a fund balance of $33.6 million. Of this total fund balance, $7.1 million is unassigned and remains available for any effort that requires one-time funding. This amount includes the $5.9 million unassigned fund balance from FY 2018-19 for which Council gave authority to the City Manager to use for emergency measures in response to COVID-19 including economic recovery. Currently, staff recommends retaining the unassigned fund balance for the time being to continue mitigating the effects of the pandemic. If the more favorable revenue trends continue through FY 2020-21, staff recommends making the anticipated additional payments to CalPERS to reduce the City’s unfunded liability principal. The City had originally anticipated paying $7.2 million from 2018-19 and 2019-20 fiscal year fund balance. Table A2-2: See CAFR page xiv Significant Operating Budget Changes: Section B includes an overview of the requested changes in operating program budgets. Below are descriptions of the four operating budget changes recommended at this time. The overall change to General Fund operating budget is an increase of $279,800. It is anticipated that these additional costs can be covered by the increased revenue projections for FY 2020-21 and will not have a significant effect on the fund balance of the General Fund at year end. 2019-20 General Fund Operating Costs (Cleaning, PPE, etc)299,482$ 2020-21 General Fund Operating Costs (Cleaning, PPE, etc)351,721$ Open SLO Project (Light Up Downtown, Parklets)631,100$ Communication Support 60,000$ Downtown Retail Strategy/ Future Forum 29,400$ Childcare Amendments 20,000$ Expand SLO Small Business Relief Program 700,000$ Increase Efforts to Support DT Vitality 425,000$ Implement Shop Local Incentive 200,000$ Homeless Services Support/ Coordination 355,000$ Grant Funding Opportunities for Tenant Improvements 2,000,000$ Total Costs or Investments 5,071,703$ COVID-19 Expenditures and Allocations towards Economic Recovery 2018-19 Unassigned Fund Balance (R-11117)5,991,692$ CARES Act Funding 566,680$ Unbudgeted LRM Funds for FY 20-21 3,425,000$ FEMA Reimbursments* Total 9,983,372$ Funding Sources Available For COVID Costs * COVID expenditures are submitted to FEMA on an ongoing basis. The amount that the City will be reimbursed is still unknown. 8 Table A3: General Fund (& sub-fund) SOBC Requests Communications and Public Engagement Manager (No fiscal impact in current year) Adoption of 1 FTE The City formalized its approach for proactive, effective, and meaningful communicatio n and public engagement in 2016 with the additional contract services to support and maintain Citywide communications. This work, overseen by the City Administration and IT Department, is provided by a combination of contract services and staff support. The demand for additional communication has further increased with the City's response to the COVID-19 pandemic, resulting in additional workload spread across multiple departments. As a result, staff has analyzed the most efficient and effective way to continue to provide the level of communication service needed by the community. The current, ongoing contract services funding provides approximately 57 hours per month of contractor work, compared to the approximately 160 hours of monthly availability prov ided by a regular, full-time position. To continue meeting the day-to-day needs for press releases, City News items, social media management, media preparation, light des ign/video production and to work with City departments to address other communications requests, a dedicated internal resource is needed, and a regular, full-time position is proposed to be added to the current budget. The cost of the proposed position for FY 20-21 is $59,000 and the ongoing, annual cost is $118,000. The Administration and IT Department currently has a budget of $120,000 for ongoing communications contract services and no additional funding is being requested for the position. Staff will be requesting some additional communication contract services (design, video, printing), as part of the 2021-23 Financial Plan, as that ongoing budget item was reduced as a part of the City’s initial financial response to COVID-19 and commensurate with the needs/requests of a full communication program. The ongoing, annual cost of the position would also be included in the 2021-23 Financial Plan. Unemployment Insurance $250,000 As part of the 2019-21 Financial Plan, the rate of unemployment insurance was not budgeted for related to COVID-19-19. Historically, the actual cost is distributed annually at year end and is typically low enough be covered by annual salary savings. Due to a tighter budgeting process for 2020-21 and an increased demand for unemployment insurance due to the pandemic, staff recommends augmenting the budget by $250,000 to cover an estimated quarterly cost of $62,500. Historically, these costs are around $50-$70k annually, but the quarterly cost for April-June 2020 was $93k and July-Sept 2020 was $108k. This number is expected to decrease as unemployment drops but is still significantly higher than normal years. PERS Unfunded Liability Correction $29,800 Due to clerical error in the budget upload, unfunded liability budget was underbudgeted by $29,800 in the Fire Apparatus cost center. Allocation from Insurance Fund Balance (no effect on General Fund unassigned fund balance) $150,000 Human Resources staff requests a transfer of $150,000 from the Insurance Fund unassigned balance into Self-insured Retention (SIR) operating budget for the purpose of covering anticipated claims cost for remainder of FY2020-21. Prior to adoption of the previous budget, administrative fees for Excess Insurance administration were being negotiated and were not included in the SIR allocation request for FY2020-21. In addition, a significant three-year old claim was settled and is now due in this fiscal year. As such, the initial deposit of $400,000 into the SIR was insufficient to cover the sum total of these costs as well as anticipated claims costs for the remainder of t he year. The Insurance Fund currently has a fund balance of $1.4 million to cover the requested amount. 9 Enterprise Funds The City’s financial structure is separated into governmental funds and business activities or Enterprise funds. Business activities are distinguished from governmental funds by their similarity to private sector enterprises and are financed solely through user service charges. The City has four unique funds that fall into this category: A-4: WATER FUND SUMMARY___________ _______________________________________________________ Revenue The initial impacts of the Covid-19 pandemic resulted in a decrease in revenue from the commercial / industrial sectors, while at the same time experienced an increase in consumption in the residential sectors. These two trends served to negate each other and resulted in the Water Fund revenue tracking with budget projections. However, this initial trend changed during the months of November and December when an overall decrease in water consumption across all customer sectors was seen. The Utilities Department will continue to closely monitor water consumption and revenue. The Covid-19 pandemic and resulting California State water shut-off moratorium has resulted in an increase in past due water accounts. As of January 19, 2021, there were approximately $345,000 in past due water balances. This is approximately $145,000 more than the same time last year. These past due accounts range from 30 days past due to over 120 days past due with the largest number being between 30 and 60 days past due and a fair number over 120 days past due. This indicates that some customers are paying later than usual (those accounts 30 to 60 days past due) and some customers are not paying at all (those whose balances are greater than 120 days past due). Unpaid balances will be sent to a collection agency under the customer’s name. The Utilities Department is currently working with its rate consultant to confirm the rate increase projections established with the last comprehensive rate study in 2018. This analysis will also include the impacts of the deferred rate increases associated with the pandemic. Previously approved rate increases were postponed from July 2020 to February 2021. The Utilities Department will return to the City Council with the results of the rate confirmation study in June with the 2021-23 Financial Plan. Projections for water development impact fees, which are budgeted conservatively, are being increased from $800,000 to $3 million to reflect revenue received through December 2020 that is inherently related to increased and elevated levels of building and construction activities. Projections for debt proceeds are being increased from $8.8 million to $14.3 million in 2020-21. This is an administrative change to correct for the timing of debt proceeds received for the energy efficiency project currently under construction at the Water Treatment Plant. Originally $5.5 million was budgeted in 2019 -20 and $8.8 million was budgeted in 2020-21. We now expect to receive most of the debt financing in 2020-21 which is offset by the cost of construction. Construction costs were incurred in 2019-21 and will continue into the beginning of 21-22. Water Sewer Parking Transit 10 Operating Expenses Operating expenses are on track with budget projections. No changes are being recommended to Water Fund operating budgets other than an administrative change listed below: Table A4: Water Fund SOBC Requests PERS Unfunded Liability Correction $29,794 Due to clerical error in the budget upload, unfunded liability budget was underbudgeted by $29,784. A-5: SEWER FUND SUMMARY___________ _______________________________________________________ Revenue Like the Water Fund, the Sewer Fund revenue for service was initially tracking with budget projections. Lower consumption in November and December may indicate a shift in this trend but the Utilities department will continue to closely monitor Sewer Fund consumption and revenue. The Utilities Department is currently working with a contracted rate consultant to confirm the rate increase projections established with the last comprehensive rate study in 2018. The Utilities Department will return to the City Council with the results of the rate confirmation study in June with the 2021-23 Financial Plan. The Covid-19 pandemic and resulting California State water shut-off moratorium has resulted in an increase in past due sewer accounts. As of January 19, 2021, there were approximately $345,000 in past due sewer balances. This is approximately $145,000 more than the same time last year. These past due accounts range from 30 days past due to over 120 days past due with the largest amount being between 30 and 60 days past due or over 120 days past due. This indicates that some customers are paying later than usual (those accounts 30 to 60 days past due) and some customers are not paying at all (those whose balances are greater than 120 days past due). Unpaid balances will be sent to a collection agency under the customer’s name. Projections for sewer development impact fees, which are budgeted conservatively, are being increased from $300,000 to $2.3 million to reflect revenue received through December 2020. Operating Expenditures Other than one recommended Significant Operating Budget Change (SOBC), the Sewer Fund operating expenditures are on track with budget projections. The Sewer Fund is recommending one SOBC of $21,000 to accommodate several emergency repairs in the Wastewater Collections system as outlined below: Table A5: Sewer Fund SOBC Requests Emergency Repairs $21,000 During the first six months of the fiscal year, the Wastewater Collections Division had to conduct three emergency repairs: two on lift stations and one on the Madonna Inn wastewater flow meter. This number of repairs in very unusual so the Wastewater Collections contract services budget will not have sufficient funding for the expenses incurred, and concurrently maintain adequate funding for the remainder of the year. A-6: PARKING FUND SUMMARY___________ _____________________________________________________ The Parking Fund has seen substantial impacts to revenues as a direct result of its support of economic recovery efforts in the Downtown. Those efforts include conversion of meter spaces to parklets, waiving of fees at the meters and structures and the new tiered parking rates (free with limited charging) in response to the stay-at- home orders associated with the pandemic. There were also several delays and deferrals of rent collection and fee increases that affected the performance of the Fund’s revenues this fiscal year. These efforts while beneficial 11 to business, residents, and employees working in the downtown are much more impactful to the Parking Fund’s revenues than initially anticipated. There are lost revenues due to changes to metered spaces (these are the most profitable spaces) as well as precipitous drop off to the parking structure revenues. Parking usage during this time increased (until the latest stay at home order) and required the return of staffing to provide service to the community. As a result of these revenue shortfalls, the Parking Fund has had to draw on working capital (i.e. reserves) to meet expenses. Even with reductions to its operating budget, there will be a shortfall because parking programs had to be developed, adjusted and managed throughout the pandemic and parking assets had to be maintained. With current long-term projections, including rate increases, the fund will not be able to meet debt service requirements as anticipated for the Palm-Nipomo parking garage. Initial costs of the project as presented in the last financial plan were about half of current updated projections. Staff is monitoring this situation and will present a series of options to Council at Strategic Budget Direction. Given the fund’s ongoing support to businesses, residents, and visitors, and its position in a COVID valley, an infusion of capital funding from the General Fund or Measure G20 could be an option to help the fund reach long-term financial stability and continue assisting in the long-term economic vitality of the Downtown. The Fund anticipates that revenue will not return to pre-pandemic levels until FY 2023-24. Revenues in the Parking Fund will need to be sufficient to cover debt service costs associated with the construction and operation of the Palm-Nipomo parking structure. Because the fund will need to replenish its working capital, the earliest construction can begin on the structure will be 2023-24 absent an inject of one-time capital or new revenue sources. Options will be developed and challenging decisions will need to be made to ensure that the proposed parking structure does not lag behind parking demand that it impedes recovery or redevelopment project. A misalignment between recovered parking demand and supply (i.e. parklets) could frustrate short and long term Downtown objectives. Operating Expenditures Parking Services reduced many of its contracted services, froze two FTE positions for the fiscal year and reduced many supplemental staff positions to ensure that the Fund could absorb the projected financial impacts caused by the pandemic. The Fund also suspended several capital improvement projects that were not mandatory to maintain the health of current Parking resources and opted not to pursue a property acquisition. Parking Service is requesting one SOBC in the amount of $100,000 to address the need for an updated Parking and Access Management Plan (PAMP): Parking Fund SOBC Requests Parking and Access Management Plan Update $100,000 The Parking Division's Parking and Access Management Plan (PAMP), which is the Division's guiding document for policies and action items to manage parking demands throughout the City but primarily focused on the downtown area. The PAMP went through a minor update in 2011 to include policies for downtown residents but has largely remained unchanged since the last major update in 2001. There have been significant changes to parking habits, technologies, and related City plans for the community that render the current PAMP outdated. A major update to the Plan is necessary to ensure best parking and access practices to ensure that the current and future needs of the City are incorporated into the document. Staff is requesting that $100,000 be allocated to contract with a consulting firm for the plan update. Parking will continue to monitor financial impacts from the pandemic and assess the Palm/Nipomo Parking Structure in the next Financial Plan. Palm/Nipomo design elements are being finalized and have been programmed in this financial plan. 12 A-7: TRANSIT FUND SUMMARY___________ ______________________________________________________ The Transit fund continues to operate as anticipated with revenues and expenditures occurring as revised for the Financial Plan Supplement. Revenue Coronavirus Aid, Relief, and Economic Security (CARES) Act allocations will be the primary funding source for supporting the transit fund’s operational costs. This will leave an unused balance of Federal 5307, State of CA TDA funds and locally generated farebox revenue which the program can use to support transit operations in future years and/or to help with the much-needed fleet replacement. Operating Expenditures The Transit program has enacted temporary service reductions to right size the program to the current ridership demands. This is resulting in cost savings for the program in Purchase Transportation costs paid to the contractor per revenue mile, fuel, and in other support line items. No SOBCs are requested at this time. Transit will continue to monitor operations and match expenditures to revenues and take a conservative approach to managing the fund. Long Term Forecasts There are several large pending items looming in the Transit Program’s future that could have a significant impact to the fund. Currently staff is in negotiations with Cal Poly University for a new long-term Transit Service Agreement reflective of all operational costs. The Transit Program outsources its Operations & Maintenance to a third-party vendor and the current contract extension ends in the next two years. Prior to that, staff will pursue a new Request for Proposal and service costs will be updated upon that contract adoption. The Transit fleet has six buses at the end of their useful life and the program is focused with “electrifying them”. The necessary transition to an electric fleet adds an additional cost hurdle the transit program is seeking to solve with grants and/or other funding sources. A-8: CONCLUSION_____________________________________________________________________________ The 2020-21 mid-year review indicates that the City is tracking with its expenditure budgets and only a few changes are being recommended. Staff continues to closely monitor its major tax revenue trends, but at mid-year it showed a modest increase over budget projections. An update on trends and recommended changes to projections (if any) will be presented with the third-quarter Financial Report on May 15, 2021. The Financial Plan Steering Committee and Department Heads will be prepared to respond to any questions the Council may have regarding this report at the February 2, 2021, Council meeting. If you have any questions in the interim, or require additional information, please do not hesitate to contact the Finance Director, Brigitte Elke, at 805-781-7125 or the City’s Principal Budget Analyst Natalie Harnett at 805-781-7128. 13 Section B: Financial Condition Summaries 14 Section B-1: Consolidated Financials Table B1 Total Funding Sources - All Funds Combined (in thousands) Total Budget* Actual Year-to-date (11.30.20) % Received Revised Projection Mid-Year Projection Variance Tax & Franchise Revenue 57,902$ 24,881$ 43%64,461$ 6,559$ Service Charges General Fund 12,212$ 5,890$ 48%12,478$ 266$ Water Service Charges 22,890$ 8,899$ 39%23,197$ 307$ Sewer Service Charges 15,895$ 6,111$ 38%16,127$ 232$ Parking Service Charges 2,798$ 1,039$ 37%2,296$ (502)$ Transit Revenue 4,808$ 1,205$ 25%4,808$ -$ Assessment Revenue 1,507$ 714$ 47%1,507$ -$ Proceeds from Debt Financing Water Fund 8,800$ 7,674$ 87%14,300$ 5,500$ Sewer Fund 43,100$ 3,496$ 8%43,100$ -$ Total 169,913$ 59,909$ 35%182,275$ 12,362$ * Includes expenditure offsetting budget amendments from Q1 & Q2 Fiscal Year 2020-21 Table B2 Operating Expenditures Combined (in thousands) - excluding capital & transfers FootnoteAdopted Budget Budget Adjustments*Total Budget Year-to-date Consumption** (11.30.20) % Consumed Revised Budget Mid-Year Amendments General Fund 1 73,183$ 5,390$ 78,572$ 30,065$ 38%79,002$ 430$ Business Activities Water Fund 18,943$ 1,165$ 20,108$ 12,194$ 61%20,137$ 30$ Sewer Fund 9,230$ 592$ 9,822$ 4,575$ 47%9,843$ 21$ Parking Fund 3,270$ 128$ 3,397$ 1,546$ 46%3,497$ 100$ Transit Fund 3,843$ 271$ 4,114$ 3,620$ 88%4,114$ -$ Special Revenue Tourism Assessment 1,225$ 34$ 1,260$ 646$ 51%1,260$ -$ Downtown SLO 2 253$ -$ 253$ 242$ 96%253$ -$ Total 109,946$ 7,579$ 117,525$ 52,887$ 45%118,106$ 581 * Budget adjustments include: encumbrances from FY19-20, CM approved carryover, revenue offsetting budget amendments, CM approved use of 18-19 undesginated fund balance ** Consumption = expenditures and commitments 1 - General fund includes Insurance ISF sub-fund and Debt Service sub-fund 2 - Downtown Assessment revenue is collected by the City upon business license renewal and paid to the Downtown Association. Almost all revenue was collected in July during the renewal period, so 96% is not a significant variance, but is slightly low due to business closures during the pandemic. Fiscal Year 2020-21 15 Table B3 Expenditures by Type (in thousands)FootnoteAdopted Budget Budget Adjustments*Total Budget Year-to-date Consumption** (11.30.20) % Consumed Revised Budget Mid-Year Amendments Operating Staffing 66,556$ 1,482$ 68,038$ 22,611$ 33%68,358$ 310$ Contract Services 29,705$ 4,304$ 34,010$ 23,236$ 68%34,281$ 271$ Other Operating Expenditures 6,667$ 1,774$ 8,441$ 4,201$ 50%8,441$ -$ COVID19 Expenditures -$ 19$ 19$ 416$ 2224%19$ -$ Debt 7,018$ -$ 7,018$ 2,423$ 35%7,018$ -$ Total Operating 109,946$ 7,579$ 117,525$ 52,887$ 45%118,116$ 581$ Capital Investment 1 General Fund 2 6,321$ 26,877$ 33,281$ 13,068$ 39%33,281$ -$ Water 13,188$ 9,594$ 22,782$ 8,182$ 36%22,782$ -$ Sewer 45,812$ 59,521$ 105,334$ 63,382$ 60%105,334$ -$ Parking 565$ 3,243$ 3,808$ 123$ 3%3,808$ -$ Transit 432$ 628$ 1,061$ 29$ 3%1,061$ -$ Total Capital 66,318$ 99,864$ 166,266$ 84,785$ 51%166,266$ -$ Fiscal Year 2020-21 * Budget adjustments include: encumbrances from FY19-20, CM approved carryover, revenue offsetting budget amendments, CM approved use of 18-19 undesginated fund balance ** Consumption = expenditures and commitments 1 - Budget adjustments include project budget carryover from prior years 2 - General Fund includes: Gen Capital Outlay, LRM, Fleet Replacement, Major Facility Maintenance and IT Replacement 16 Section B-2: General Fund Revenue Details - Table B4: General Fund Total Budget* Actual Year-to-date (11.30.20) % Received Mid-Year Revised Budget Variance Tax & Franchise Revenue 57,902,426$ 24,881,112$ 43%64,461,461$ 6,559,035$ 41201-Sales and Use Tax (July-Oct only)15,320,620$ 6,636,795$ 43%16,571,000$ 1,250,380$ 41201-Sales and Use Tax - LRM (July-Oct only)7,218,000$ 2,860,057$ 40%11,392,000$ 4,174,000$ 41202-Safety Prop 172 315,163$ 174,475$ 55%315,163$ -$ 41101-Property Taxes - Current Secured 12,746,023$ 5,835,400$ 46%12,957,910$ 211,887$ 41102-Property Taxes - Current Unsecured 426,561$ 461,071$ 461,071$ 41103-Property Taxes - Prior Secured 10,020$ -$ -$ 41104-Property Taxes - Prior Unsecured -$ -$ 41105-Property Tax In Lieu of Vehicle License Fee (VLF)5,165,280$ -$ 0%5,626,977$ 461,697$ 41106-Other Property Taxes 387,600$ 209,020$ 54%387,600$ -$ 41107-City Housing Authority Property Tax In Lieu 45,000$ 0%45,000$ -$ 41108-Homeowner Property Tax Relief 75,000$ 11,604$ 15%75,000$ -$ 41402-Transient Occupancy Tax 6,267,000$ 2,739,492$ 44%6,267,000$ -$ 41401-Utility User Tax 5,565,000$ 2,272,926$ 41%5,565,000$ -$ 41403-Business Tax 2,853,740$ 2,919,243$ 102%2,853,740$ -$ 41404-Cannabis Tax 400,000$ 295,218$ 74%400,000$ -$ 42106-Franchise Fees 1,544,000$ 490,300$ 32%1,544,000$ -$ General Government Revenue 1,214,802$ 936,392$ 77%1,210,002$ (4,800)$ 42101-Business Licenses 414,300$ 420,501$ 101%414,300$ -$ 42102-Cannabis Operator License 320,937$ 188,653$ 59%320,937$ -$ 42112-Other City Licenses & Permits (1,664)$ -$ -$ 44301-Sale of Surplus Property 3,953$ -$ -$ 44302-Disability Insurance Reimbursement 19,100$ -$ 0%19,100$ -$ 44303-Special Events Insurance 4,800$ (286)$ -6%-$ (4,800)$ 44305-Damage to City Property 6,593$ -$ -$ 44306-Credit Collections 2,803$ -$ -$ 44310-Miscellaneous Revenue 455,665$ 229,537$ 50%455,665$ -$ 46709-Other Utilities Charges 16,562$ -$ -$ 46901-Miscellaneous Service Charges - Citywide 10,000$ -$ -$ 46902-SLO County TMD Administration Fee 5,967$ -$ -$ 47201-Impact Fees 53,772$ -$ -$ Fines & Forfietures 154,578$ 40,456$ 26%154,578$ -$ 43101-Motor Vehicle Fines 117,357$ 15,463$ 13%117,357$ -$ 43102-Misdemeanors & Infractions 34,229$ 2,256$ 7%34,229$ -$ 43201-Miscellaneous Penalties 1,977$ 4,637$ 235%1,977$ -$ 43302-Administrative Citations - General 1,015$ 1,400$ 138%1,015$ -$ 43303-Administrative Citations - Utilties 16,700$ -$ -$ Investment & Property Revenue 381,716$ 51,148$ 13%381,716$ -$ 44101-Interest on Investment 230,000$ 892$ 0%230,000$ -$ 44109-Interest Bank Charges 8,569$ -$ -$ 44204-Other Rent & Lease Revenue 151,716$ 41,687$ 27%151,716$ -$ Subventions and Grants 1,315,522$ 740,069$ 56%1,987,992$ 672,470$ 45101-Zone 9 Streambed Clearance 8,067$ -$ -$ 45203-Law Enforcement SB229 Grant (COPS SLESF)79,727$ -$ -$ 45210-AB939 Reimbursement 72,906$ -$ -$ 45211-Other State Grants 1,207,992$ -$ 0%1,207,992$ -$ 45307-Federal Stimulus Grants 100,000$ 566,680$ 567%100,000$ -$ 45401-Mutual Aid Reimbursements 7,530$ 12,689$ 169%680,000$ 672,470$ 17 Table B4: General Fund (continued) Total Budget* Actual Year-to-date (11.30.20) % Received Mid-Year Revised Budget Variance Development Services 5,809,996$ 2,956,511$ 51%5,809,996$ -$ 42103-Building Permits 2,200,000$ 1,420,936$ 65%2,200,000$ -$ 42104-Encroachment Permits 305,000$ 99,980$ 33%305,000$ -$ 43202-Code Enforcement Fines 50,000$ 39,184$ 78%50,000$ -$ 46101-Planning & Zoning Fee 600,000$ 228,804$ 38%600,000$ -$ 46102-Development Review Fees 248,000$ 220,419$ 89%248,000$ -$ 46103-Plan Check Fees 1,086,996$ 387,577$ 36%1,086,996$ -$ 46105-Infrastructure Plan Check & Inspection 1,200,000$ 498,096$ 42%1,200,000$ -$ 46107-Engineering Development Review Fees 120,000$ 61,515$ 51%120,000$ -$ Fire Services 1,327,676$ 504,770$ 38%1,324,955$ (2,721)$ 42109-Fire Department Permits 100,000$ 103,044$ 103%103,044$ 3,044$ 42110-Fire Alarm Permits 2,677$ 71$ 3%2,677$ -$ 46106-Fire Plan Check & Inspection 300,000$ 146,448$ 49%300,000$ -$ 46301-Medical ER Recovery 194,409$ 48,602$ 25%198,103$ 3,694$ 46302-R1 Inspection Fees 260,000$ 48,985$ 19%260,000$ -$ 46303-Cal Poly Fire Services 324,700$ 157,621$ 49%315,241$ (9,459)$ 46304-CUPA Inspection Fees 140,000$ -$ 0%140,000$ -$ 46306-Other Fire Department Revenue 5,890$ -$ 0%5,890$ -$ Parks & Recreation Services 1,411,896$ 492,314$ 35%1,055,955$ (355,941)$ 44201-Library Rental 17,802$ -$ 0%-$ (17,802)$ 44202-Indoor Rental & Use Fees 52,831$ 19,857$ 38%20,000$ (32,831)$ 44203-Outdoor Rental & Use Fees 103,052$ 16,016$ 16%29,319$ (73,733)$ 44308-Sales Non-Taxable 359$ -$ -$ 44309-Sales Taxable 7,481$ 4,819$ 64%7,481$ -$ 46201-Adult Athletic Fees 104,040$ (20,442)$ -20%-$ (104,040)$ 46202-Youth Athletic Fees 32,903$ 7,283$ 22%14,000$ (18,903)$ 46203-Instruction Fees 69,360$ 7,670$ 11%10,000$ (59,360)$ 46204-Special Event Fees - App/Permit 15,300$ 137$ 1%-$ (15,300)$ 46205-Youth Services Childcare 570,696$ 284,739$ 50%679,939$ 109,243$ 46206-Youth Services Camps 39,389$ -$ -$ 46208-Aquatics Daily Use Fees 92,837$ 21,316$ 23%42,308$ (50,529)$ 46209-Swim Instruction Fees 20,673$ 5,356$ 26%20,673$ -$ 46210-Multi Day Swim Passes 27,032$ 19,768$ 73%35,000$ 7,968$ 46211-Therapy Pool Fees 8,327$ 4,145$ 50%8,327$ -$ 46212-Driving Range Fees 9,031$ 3,626$ 40%7,252$ (1,779)$ 46213-Golf Greens Fees 151,470$ 57,818$ 38%151,470$ -$ 46214-Golf Lesson Fees 140$ -$ 0%140$ -$ 46215-Golf Rental Fees 5,363$ 1,842$ 34%5,363$ -$ 46217-Other Parks & Recreation Revenue 61,833$ 12,066$ 20%18,708$ (43,125)$ 46218-Special Events - City Sponsored 41,748$ 3,564$ 9%-$ (41,748)$ 46219-Golf Cart Rentals 19,976$ 2,987$ 15%5,975$ (14,001)$ 18 Section B-3: Enterprise Fund Revenue Details Table B4: General Fund (continued) Total Budget* Actual Year-to-date (11.30.20) % Received Mid-Year Revised Budget Variance Police Services 596,192$ 168,209$ 28%552,892$ (43,300)$ 42107-Police Department Permits 6,000$ 1,115$ 19%3,000$ (3,000)$ 42108-Tobacco Permits 21,417$ 317$ 1%21,417$ -$ 42111-Alarm Permits - Contract (Police)100,000$ 20,603$ 21%65,000$ (35,000)$ 43104-Police Issued Parking Fines 75,000$ -$ 0%75,000$ -$ 43301-Administrative Citations - Safety 152,833$ 76,573$ 50%152,833$ -$ 46501-Accident Reports 3,400$ 865$ 25%3,400$ -$ 46502-Collision Investigation 6,000$ 364$ 6%3,000$ (3,000)$ 46503-Witness Fees 2,500$ 275$ 11%2,500$ -$ 46504-Property Release Fees 800$ 33$ 4%500$ (300)$ 46505-Tow Release Fees 11,000$ 2,839$ 26%9,000$ (2,000)$ 46506-Second Response Fees 1,000$ -$ 0%1,000$ -$ 46507-DUI Cost Recovery 23,400$ 7,066$ 30%23,400$ -$ 46508-Other Police Revenue 192,842$ 58,158$ 30%192,842$ -$ Transfers 10,488,402$ 6,206,784$ 59%10,488,402$ -$ 49001-Transfers - In 3,540,069$ 2,732,617$ 77%3,540,069$ -$ 49002-Reimbursement Transfer In 4,578,402$ 2,289,201$ 50%4,578,402$ -$ 49003-Local Revenue Measure Transfer In 2,369,931$ 1,184,966$ 50%2,369,931$ -$ Grand Total 80,603,206$ 36,977,765$ 46%87,427,949$ 6,824,743$ Table B5: Enterprise Fund Revenue Total Budget* Actual Year-to-date (11.30.20) % Received Mid-Year Revised Budget Variance Water 31,689,885$ 17,931,844$ 57%37,496,885$ 5,807,000$ 42112-Other City Licenses & Permits 16,380$ -$ -$ 43201-Miscellaneous Penalties 101,000$ 54,606$ 54%101,000$ -$ 44101-Interest on Investment 200,000$ 39,325$ 20%200,000$ -$ 44102-MV Gain/Loss (150,000)$ 0%(150,000)$ -$ 44305-Damage to City Property (1,436)$ -$ -$ 44306-Credit Collections 10,000$ 3,382$ 34%10,000$ -$ 44310-Miscellaneous Revenue 20,000$ 4,956$ 25%20,000$ -$ 45211-Other State Grants 1,996,575$ 0%1,996,575$ -$ 46102-Development Review Fees 26,010$ 14,401$ 55%26,010$ -$ 46701-Sales to Cal Poly 906,300$ 332,120$ 37%919,900$ 13,600$ 46702-Water Sales 13,581,400$ 6,100,578$ 45%13,785,100$ 203,700$ 46703-Utilities Base Charges 5,091,600$ 1,787,723$ 35%5,167,900$ 76,300$ 46704-Reclaimed Water Sales 897,000$ 470,423$ 52%910,400$ 13,400$ 46708-Utilities Set-up Fees 210,000$ 76,398$ 36%210,000$ -$ 47201-Impact Fees -$ -$ -$ 48002-Long-Term Debt Proceeds 1 8,800,000$ 7,673,668$ 87%14,300,000$ 5,500,000$ 49001-Transfers - In 1,359,320$ -$ -$ 1 - Carryover of Debt Proceeds budgeted in FY 19-20 that were not received 19 Table B5: Enterprise Fund Revenue (continued) Total Budget* Actual Year-to-date (11.30.20) % Received Mid-Year Revised Budget Variance Sewer 58,994,725$ 10,489,485$ 18%59,226,729$ 232,004$ 41401-Utility User Tax -$ -$ -$ 42105-Industrial User Permits 6,000$ 8,472$ 141%6,000$ -$ 43201-Miscellaneous Penalties 101,000$ 54,607$ 54%101,000$ -$ 43302-Administrative Citations - General 900$ -$ -$ 44101-Interest on Investment 200,000$ -$ 0%200,000$ -$ 44102-MV Gain/Loss (150,000)$ 0%(150,000)$ -$ 44306-Credit Collections 10,000$ 3,382$ 34%10,000$ -$ 44307-WRRF Energy Projects Rebate 36,532$ -$ -$ 44310-Miscellaneous Revenue 20,000$ 666$ 3%20,000$ -$ 46102-Development Review Fees 26,010$ 14,135$ 54%26,010$ -$ 46104-Waterways Management Plan Fees 4,356$ -$ -$ 46701-Sales to Cal Poly 500,000$ 170,002$ 34%507,500$ 7,500$ 46703-Utilities Base Charges 4,281,396$ 1,559,703$ 36%4,345,600$ 64,204$ 46705-Sewer Service Charges 10,690,500$ 4,176,536$ 39%10,850,800$ 160,300$ 46708-Utilities Set-up Fees 210,000$ 76,664$ 37%210,000$ -$ 46709-Other Utilities Charges 4,585$ -$ -$ 47201-Impact Fees 12,239$ -$ -$ 48002-Long-Term Debt Proceeds 43,099,819$ 3,496,283$ 8%43,099,819$ -$ 49001-Transfers - In 870,424$ -$ -$ Parking 2,798,191$ 1,039,067$ 37%2,296,291$ (501,900)$ 43103-Parking Fines 331,700$ 141,669$ 43%331,700$ -$ 43104-Police Issued Parking Fines (34,400)$ -$ 0%(34,400)$ -$ 44101-Interest on Investment 78,500$ -$ 0%78,500$ -$ 44204-Other Rent & Lease Revenue 363,233$ 338,595$ 93%363,233$ -$ 44310-Miscellaneous Revenue 7,400$ 2,249$ 30%7,400$ -$ 46010-Recreation Services (25)$ -$ -$ 46016-Parking Fees (278)$ -$ -$ 46103-Plan Check Fees (40)$ -$ -$ 46401-Parking Meters - Lots 76,658$ 35,383$ 46%76,658$ -$ 46402-Parking Meters - Streets 821,300$ 390,387$ 48%821,300$ -$ 46403-Parking Structures 1 701,900$ 8,678$ 1%200,000$ (501,900)$ 46404-Long Term Parking 2 431,300$ 117,295$ 27%431,300$ -$ 46405-Parking in-Lieu 20,600$ 5,155$ 25%20,600$ -$ Transit 4,808,075$ 1,205,134$ 25%4,808,075$ -$ 44101-Interest on Investment 5,800$ -$ 0%5,800$ -$ 44310-Miscellaneous Revenue 847$ (133,285)$ -15736%847$ -$ 45208-TDA Revenue 735,937$ 752,945$ 102%735,937$ -$ 45209-STA Revenue 122,477$ 0%122,477$ -$ 45211-Other State Grants 256,731$ -$ -$ 45303-FTA 5307 (Preventative Maintenance)(1)$ -$ -$ 45304-FTA 5307 (Operating)3,477,321$ 1$ 0%3,477,321$ -$ 45307-Federal Stimulus Grants 8$ -$ -$ 46601-Bus Fare 465,693$ 328,734$ 71%465,693$ -$ 1 - As of January 25, 2021 Parking Structure actual revenue was about $85,000 2 - Long-term parking revenues (prox cards, 10-hour meter passes) were significantly impacted by the COVID19 directives. Depending on state directives over the next six month, long-term parking revenue may or may not bounce back significantly enough to make up the shortfall. 20 Section B-4: Operating Expenditure Detail Based on actuals as of November 30th, 2020 department operating expenditures are generally on target. In a linear fashion, expenditures should track at 42% at this point, but this is often not the case. Operating expenses related to contracts are often committed at the beginning of the fiscal year. For example, a department budget could go from 5% expended to 60% expended after one large annual contractual obligation. Additionally, the staffing “actuals” listed below account for 8.5 pay periods which is only about 32.7% of total for the year. Table B6: General Fund OpEx Original Budget Budget Adjustments Total Budget Total Consumption % Consumed Revised Mid- Year Budget Mid-year Amendments Administration & IT 8,102,779$ 812,263$ 8,915,042$ 3,545,128$ 40%8,915,042$ Staffing 4,679,557$ 23,181$ 4,702,738$ 1,415,844$ 30%4,702,738$ Contract Services 2,735,873$ 643,261$ 3,379,134$ 1,777,497$ 53%3,379,134$ Other Operating Expenses 687,349$ 145,821$ 833,170$ 351,786$ 42%833,170$ City Attorney 778,167$ 344,069$ 1,122,236$ 456,147$ 41%1,122,236$ Staffing 742,567$ 152,219$ 894,786$ 280,569$ 31%894,786$ Contract Services 22,000$ 188,836$ 210,836$ 167,383$ 79%210,836$ Other Operating Expenses 13,600$ 3,014$ 16,614$ 8,195$ 49%16,614$ Community Development 5,325,811$ 894,820$ 6,220,632$ 2,297,879$ 37%6,220,632$ Staffing 4,186,756$ 170,540$ 4,357,296$ 1,312,341$ 30%4,357,296$ Contract Services 917,000$ 723,306$ 1,640,306$ 942,145$ 57%1,640,306$ Other Operating Expenses 222,055$ 975$ 223,030$ 43,393$ 19%223,030$ Finance 2,998,897$ 753,827$ 3,752,724$ 1,215,294$ 32%4,002,724$ 250,000$ Staffing 2,191,238$ 531,857$ 2,723,095$ 482,069$ 18%2,973,095$ 250,000$ Contract Services 562,912$ 218,771$ 781,683$ 244,707$ 31%781,683$ Other Operating Expenses 244,747$ 1,520$ 246,267$ 141,515$ 57%246,267$ COVID Expenses -$ 1,679$ 1,679$ 351,721$ 20668%1,679$ Fire 12,615,778$ 1,213,765$ 13,829,544$ 5,200,015$ 38%13,859,344$ 29,800$ Staffing 11,925,573$ 11,925,573$ 4,679,569$ 39%11,955,373$ 29,800$ Contract Services 305,504$ 180,418$ 485,922$ 200,278$ 41%485,922$ Other Operating Expenses 384,701$ 1,033,348$ 1,418,049$ 320,168$ 23%1,418,049$ Human Resources 1,350,586$ 123,246$ 1,473,832$ 608,584$ 41%1,473,832$ Staffing 1,062,475$ 1,062,475$ 322,451$ 30%1,062,475$ Contract Services 258,811$ 122,681$ 381,492$ 259,995$ 68%381,492$ Other Operating Expenses 29,300$ 565$ 29,865$ 26,138$ 88%29,865$ Parks & Rec 4,274,301$ 175,049$ 4,449,350$ 1,364,234$ 31%4,449,350$ Staffing 3,453,952$ 21,656$ 3,475,608$ 1,059,444$ 30%3,475,608$ Contract Services 408,859$ 101,583$ 510,442$ 205,630$ 40%510,442$ Other Operating Expenses 411,490$ 51,811$ 463,301$ 99,160$ 21%463,301$ Police 17,802,862$ 172,247$ 17,975,109$ 5,639,668$ 31%17,975,109$ Staffing 16,708,245$ 16,708,245$ 5,117,331$ 31%16,708,245$ Contract Services 782,677$ 67,147$ 849,824$ 397,944$ 47%849,824$ Other Operating Expenses 311,940$ 105,100$ 417,040$ 124,393$ 30%417,040$ Public Works 13,196,459$ 830,880$ 14,027,339$ 5,285,944$ 38%14,027,339$ Staffing 8,665,864$ 320,525$ 8,986,389$ 2,725,343$ 30%8,986,389$ Contract Services 3,146,164$ 419,603$ 3,565,767$ 1,745,817$ 49%3,565,767$ Other Operating Expenses 1,384,431$ 90,752$ 1,475,183$ 811,776$ 55%1,475,183$ Utilities - Solid Waste (Gen Fund) $ 159,318 $ 69,351 $ 228,669 $ 5,052 2% $ 228,669 Staffing 112,808$ (13,801)$ 99,007$ 1,651$ 2%99,007$ Contract Services 28,000$ 83,152$ 111,152$ 2,916$ 3%111,152$ Other Operating Expenses 18,510$ 18,510$ 485$ 3%18,510$ General Fund 66,604,959$ 5,389,518$ 71,994,477$ 25,619,653$ 36%72,274,277$ 279,800$ 21 Table B7: Enterprise Fund OpEx Original Budget Budget Adjustments Total Budget Total Consumption % Consumed Revised Mid- Year Budget Mid-year Amendments Water Fund 16,928,253$ 1,164,834$ 18,093,087$ 11,925,475$ 66%18,122,881$ 29,794$ Staffing 4,402,502$ 136,803$ 4,539,305$ 1,277,880$ 28%4,569,099$ 29,794$ Contract Services 1 11,561,139$ 916,703$ 12,477,842$ 10,004,741$ 80%12,477,842$ Other Operating Expenses 1 964,612$ 111,328$ 1,075,940$ 642,854$ 60%1,075,940$ Sewer Fund 7,841,135$ 592,111$ 8,433,246$ 3,750,492$ 44%8,454,246$ 21,000$ Staffing 4,668,962$ 139,163$ 4,808,125$ 1,377,471$ 29%4,808,125$ Contract Services 1 1,823,192$ 299,682$ 2,122,874$ 1,166,402$ 55%2,143,874$ 21,000$ Other Operating Expenses 1 1,348,981$ 152,231$ 1,501,212$ 1,170,750$ 78%1,501,212$ COVID Expenses -$ 1,034$ 1,034$ 35,869$ 3468%1,034$ Parking Fund 2,414,155$ 127,523$ 2,541,678$ 1,181,463$ 46%2,641,678$ 100,000$ Staffing 1,177,211$ 350$ 1,177,561$ 352,160$ 30%1,177,561$ Contract Services 1 1,002,644$ 121,119$ 1,123,763$ 769,292$ 68%1,223,763$ 100,000$ Other Operating Expenses 234,300$ 6,054$ 240,354$ 60,010$ 25%240,354$ Transit Fund 3,843,015$ 271,197$ 4,114,211$ 3,619,704$ 88%4,114,211$ Staffing 327,181$ 327,181$ 103,826$ 32%327,181$ Contract Services 1 3,139,033$ 186,919$ 3,325,952$ 3,094,090$ 93%3,325,952$ Other Operating Expenses 1 376,800$ 68,278$ 445,078$ 393,234$ 88%445,078$ COVID Expenses -$ 16,000$ 16,000$ 28,554$ 178%16,000$ Total Enterprise Funds 31,026,558$ 2,155,665$ 33,182,222$ 20,477,133$ 62%33,333,016$ 150,794$ 1 - Total consumption includes annual contract amounts which are committed at the beginning of the fiscal year. Spending is on track for all funds as of mid-year. Table B8: Special Revenue and Other Funds Original Budget Budget Adjustments Total Budget Total Consumption % Consumed Revised Mid- Year Budget Mid-year Amendments Tourism Bid Fund (TBID)1,225,420$ 34,137$ 1,259,557$ 646,254$ 51%1,259,557$ Staffing 213,320$ 213,320$ 65,921$ 31%213,320$ Contract Services 1 978,000$ 31,117$ 1,009,117$ 573,683$ 57%1,009,117$ Other Operating Expenses 34,100$ 3,020$ 37,120$ 6,650$ 18%37,120$ Downtown SLO 252,588$ 252,588$ 241,828$ 96%252,588$ Contract Services 2 252,588$ 252,588$ 241,828$ 96%252,588$ Boysen Ranch Conserv Easemt Fund 7,500$ 7,500$ 15,000$ -$ 0%15,000$ Contract Services 7,500$ 7,500$ 15,000$ -$ 0%15,000$ Insurance ISF Fund 3,818,617$ 3,818,617$ 3,479,450$ 91%3,968,617$ 150,000$ Workers Comp Insurance 2,037,611$ 2,037,611$ 2,037,611$ 100%2,037,611$ Liability Insurance 1,781,006$ 1,781,006$ 1,441,839$ 81%1,931,006$ 150,000$ Total Other Funds 5,304,125$ 41,637$ 5,345,762$ 4,367,532$ 82%5,495,762$ 150,000$ 1 - TBID expenditures budgets are based off annual revenue projections. These costs will be monitored based on the continued COVID directives and effects on tourism. 2 - The downtown Business Improvement District assessment is collected annually with the Business Tax renewal from businesses located within the geographical boundary of the Downtown District. Business tax certificates are renewed at the beginning of each fiscal year based on the prior calendar year. The revenue is paid directly to Downtown SLO out of the Contract Services line. The shortfall of about $10,000 is largely due to closed businesses from FY 19-20 who did not renew. 22 Section B-5: Updated Five-Year Forecasts Long-term Forecast Footnotes: 1 - A portion of over-realized Development Review fee revenue is eligible for development services designation. 2 - Includes a $380 transfer from the Capital Reserve into the Capital Budget 3 - FY21 beginning balance includes prior-period adjustment to audited financials. The insurance fund balance is now included within the General Fund for purposes of financial reporting. 23 In Thousands 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Actual Budget Forecast Forecast Forecast Forecast REVENUES BY TYPE 1 Water Services Charges 14,364 13,785 15,243 15,700 16,171 16,495 2 Base Fee Revenue 5,052 5,167 5,372 5,533 5,699 5,813 3 Cal Poly Sales 966 919 1,017 1,048 1,079 1,101 4 Recycled Water 898 910 668 688 708 723 5 Development Impact Fees 3,723 3,000 800 800 800 800 6 Investment & Property Revenue 663 50 50 50 50 50 7 Proceeds from Debt - 14,300 - - 6,500 7,300 8 Miscellaneous Revenue 563 367 300 300 301 301 9 Water Sales - FHRP (start FY19)100 100 - - - - 10 TOTAL 26,329$ 38,598$ 23,449$ 24,119$ 31,308$ 32,582$ EXPENDITURE BY CATEGORY 11 Salaries & Benefits 4,639 4,435 4,827 5,071 5,351 5,606 12 Operating Expenditures 12,490 12,525 11,713 11,821 11,930 12,035 13 Operating Carryover 751 14 Capital Outlay 10,208 14,325 2,858 3,375 8,681 9,085 15 Capital Carryover 2,590 16 Debt Service 4,412 2,431 2,421 2,828 2,256 2,667 17 Transfers Out 2,536 2,672 2,769 2,837 2,909 2,981 18 TOTAL 34,285$ 39,729$ 24,589$ 25,932$ 31,127$ 32,375$ EXPENDITURE BY FUNCTION 19 Operating Carryover 751 20 Capital Carryover 2,590 21 General Government 2,536 2,701 2,769 2,837 2,909 2,981 22 Water Source of Supply 14,140 12,822 9,979 10,060 10,143 10,220 23 Water Treatment 11,604 14,478 6,509 7,650 12,737 14,074 24 Water Distribution 4,051 4,989 4,072 4,061 4,026 3,762 25 Utilities Services 243 402 417 427 439 450 26 Water Administration 1,711 996 842 897 873 887 27 TOTAL 34,285$ 39,729$ 24,589$ 25,932$ 31,127$ 32,375$ CHANGES IN FINANCIAL POSITION 28 Working Capital - Beginning 30,549 22,593$ 21,462 20,322 18,509 18,690 29 Revenues over (under) Expenditure (7,956) (1,131) (1,139) (1,813) 181 207 30 Working Capital - Year End 22,593$ 21,462$ 20,322$ 18,509$ 18,690$ 18,897$ 31 Operating Reserve 4,815 4,413 4,346 4,511 4,489 4,658 32 Rate Stabilization 2,038 1,987 2,163 2,228 2,295 2,341 33 CALPERS Down Payment 252 180 180 180 120 120 34 UFL Trust Fund 120 120 120 120 96 72 35 Unreserved Working Capital - Year End 15,366$ 14,761$ 13,512$ 11,469$ 11,690$ 11,706$ Table B-10: Water Fund Long-Term Forecast Line24 In Thousands 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Actual Budget Forecast Forecast Forecast Forecast REVENUES BY TYPE 1 Sewer Service Charges 11,179 10,850 11,385 12,125 12,489 12,864 2 Base Fee Revenue 4,412 4,345 4,560 4,856 5,002 5,152 3 Cal Poly Sales 819 507 1,072 1,141 1,175 1,211 4 Development Impact Fees 2,031 2,300 600 600 600 600 5 Industrial User Charges 77 6 85 85 85 85 6 Investment & Property Revenue 1,182 50 50 50 50 50 7 Proceeds from Debt Financing 14,846 43,100 64,100 15,921 427 - 8 Miscellaneous Revenue 603 367 304 310 316 323 9 TOTAL 35,149$ 61,525$ 82,156$ 35,088$ 20,144$ 20,284$ EXPENDITURE BY CATEGORY 10 Salaries & Benefits 4,870 4,704 4,747 4,882 5,025 5,172 11 Operating Expenditures 2,658 3,050 3,200 3,248 3,297 3,346 12 Operating Carryover 479 13 Capital Outlay 16,536 45,770 22,867 3,576 1,275 6,590 14 Capital Carryover 61,292 15 Debt Service 1,381 1,388 4,307 4,304 7,259 7,074 16 Transfers Out 2,430 2,401 2,479 2,526 2,575 2,625 17 TOTAL 27,875$ 57,792$ 98,892$ 18,536$ 19,430$ 24,806$ 18 EXPENDITURE BY FUNCTION 19 Operating Carryover 479 20 Capital Carryover 61,292 21 General Government 2,430 2,433 2,479 2,526 2,575 2,625 22 Wastewater Collection 4,572 5,023 8,664 4,745 2,869 8,131 23 Environmental Compliance 141 270 295 303 311 319 24 Water Resource Recovery 17,160 48,011 23,660 8,438 11,216 11,220 25 Utilities Revenue 529 526 513 523 533 544 26 Water Quality Lab 581 932 835 856 878 900 28 Wastewater Administration 2,462 941 1,154 1,145 1,049 1,068 29 TOTAL 27,875$ 58,615$ 98,892$ 18,536$ 19,430$ 24,806$ CHANGES IN FINANCIAL POSITION 30 Working Capital - Beginning 32,841 40,115 43,848 27,112 43,664 44,378 31 Revenues over (under) Expenditures 7,274 3,733 (16,736) 16,552 714 (4,522) 32 Working Capital - Year End 40,115$ 43,848$ 27,112$ 43,664$ 44,378$ 39,856$ 33 Operating Reserve 2,268 2,309 2,947 2,992 3,631 3,643 34 Rate Stabilization 821 785 851 906 933 961 35 CALPers Down Payment 252 180 180 120 120 120 36 UFL Trust Fund 120 120 120 120 96 72 37 Unreserved Working Capital - Year End 36,656$ 40,455$ 23,015$ 39,526$ 39,598$ 35,060$ Table B-11: Sewer Fund Long-Term Forecast Line25 Actuals Budget Forecast Forecast Forecast Forecast 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 Revenues 1 Service Charges 2 Parking Meter Collections 3 Lots 106 60 87 101 106 115 4 Streets 1,030 821 1,232 1,437 1,511 1,642 5 Parking Structure Collections 858 200 1,052 1,228 1,291 1,403 6 Long-Term Parking Revenues 603 431 647 755 793 862 7 Lease Revenues 482 363 427 459 471 491 8 Parking In-Lieu Fees*15 21 21 21 21 21 9 Other Service Charges 66 (48) (72) (84) (88) (96) 10 Total Service Charges 3,159 1,848 3,395 3,917 4,106 4,440 11 Investment and Property Revenues 495 79 61 49 44 42 12 Fines and Forfeitures 602 297 446 520 547 595 13 Other Revenues 14 25 28 30 31 32 14 Total Revenues 4,270$ 2,248$ 3,930$ 4,517$ 4,728$ 5,108$ 15 Expenditures 16 Operating Programs 17 Operating Expenses 2,543 2,030 2,064 2,133 2,204 2,279 18 General Government (CAP)537 710 710 710 710 710 19 Total Operating Programs 3,081 2,740 2,774 2,843 2,914 2,989 20 Capital Improvement Plan Projects 799 1,162 1,002 1,037 1,033 506 21 Debt Service 857 856 855 852 852 851 22 Carryover 128 23 Total Expenditures 4,736$ 4,885$ 4,631$ 4,731$ 4,799$ 4,345$ 24 Other Sources (Uses) 25 Operating Transfers In - - - - - - 26 Operating Transfers Out (228) (281) (281) (281) (281) (281) 27 Proceeds from Debt Financing - - - - - - 28 Total Other Sources (Uses)(228) (281) (281) (281) (281) (281) 29 Revenues Over/(Under) Expenses (694) (2,918) (982) (495) (352) 483 30 Working Capital, Beginning of Year 15,695 15,002 12,084 11,101 10,606 10,254 31 Working Capital, End of Year (CAFR)15,002$ 12,084$ 11,101$ 10,606$ 10,254$ 10,737$ 32 Reserve 564 548 555 569 583 598 33 PERS Down Payment - - 58 39 39 39 34 Section 115 Trust Fund - - 39 39 31 31 35 Unreserved Working Capital 14,438$ 11,536$ 10,449$ 9,960$ 9,602$ 10,069$ *Parking In-Lieu Fees used for parking structure debt service Table B-12: PARKING FUND LONG-TERM FORECAST In Thousands Line26 LineIn Thousands 2019-20 Actuals 2020-21 Budget Forecast 2021-22 Forecast 2022-23 Forecast 2023-24 Forecast 2024-25 Forecast 2025-26 1 Operating Revenues 2 FTA Grants*917 - 1,458 1,372 1,413 1,427 1,441 3 TDA Revenues (LTF)780 799 1,535 1,688 1,705 1,722 1,740 4 TDA Revenues (STA)104 110 115 127 139 141 5 CARES Act*1,390 2,806 - - - - - 6 Service Charges**630 467 481 485 490 495 500 7 Investment and Property Revenues 48.9 5.8 5.9 5.9 6.0 6.0 6.1 8 TOTAL REVENUES 3,766$ 4,182$ 3,589$ 3,667$ 3,741$ 3,790$ 3,828$ Operating Expenditures 9 Purchased Transportation 2,630 2,781 2,808 2,836 2,865 2,893 2,922 10 General Government/Admin 641 568 574 579 585 591 591 11 Cost Allocation 442 322 325 328 331 335 338 12 TOTAL EXPENDITURES 3,713$ 3,670$ 3,707$ 3,744$ 3,781$ 3,819$ 3,852$ Changes in Financial Position 13 Working Capital, Beginning of Year 2,644 2,697 3,209 3,091 3,014 2,973 2,944 14 Over / Under Expenditures 53 511 (118) (77) (41) (30) (24) 15 Working Capital, Year End 2,697 3,209 3,091 3,014 2,973 2,944 2,920 16 Reserve (20% of operating)743 734 741 749 756 764 770 17 Designated Working Capital - - 181 - - - - 18 CIP Designated Working Capital 1,546 530 - - - - - 19 CalPERS Downpayment 51 51 51 51 51 20 Unreserved Working Capital 409$ 1,944$ 2,118$ 2,214$ 2,166$ 2,129$ 2,099$ * Federal funds are provided on a reimbursement (accrued) basis and come in after the end of the fiscal year. Table B-13: Transit Fund Long-Term Forecast ** This includes CalPoly Service Agreement 27 Section C: Work Program Evaluations 28 Section C-1: Work Program Evaluation Summary Fiscal Year 2020-21 marks the third year of the Fiscal Health Response Plan (FHRP). The framework was implemented to respond to the long-term fiscal impacts of the significant increases in required pension contributions to the CalPERS retirement system. COVID-19 Considerations: On top of FHRP budget reductions, departments were also asked to keep budgets for the current fiscal year at 2019-20 levels to combat the expected revenue losses associated with the pandemic. All departments felt the effects of the pandemic in some way. Many of the departments saw an increase in workload activity or a change in programmatic demands. During this period, departments have been critically evaluating their resources and workload needs to highlight areas of concern and to understand whether they are long term concerns or short-term strains due to the pandemic. These concerns are highlighted within the department evaluations. Departments constantly operate in an environment of knowns and unknowns and the budget preparation considers that type of environment. Most day-to-day tasks fall into the category of known tasks with known workload associated. In addition to day-to-day activities, departments expect and budget for some level of unknown. When unexpected projects with unknown associated workload emerge, divisions may experience a resource imbalance. The pandemic has greatly increased the number of unknowns while requiring immediate action to respond to the community’s needs. As part of the mid-year review, departments evaluated the core objectives of each program’s performance on the following scale: Green indicates that the program is managing workload with the appropriated budget for current work program tasks. Yellow indicates that a program is managing workload with the appropriated resources but may need additional resources or objective recalibration in the future to maintain long-term work programs. This could be due to higher-than-normal activity and does not necessarily indicate ongoing need. These programs will be monitored closely over the next quarter. Red indicates that a program is not currently meeting objectives and needs either additional resources or recalibration to manage workload. This could be due to higher-than-normal activity or may indicate ongoing need. Solutions are provided for each of these programs. “M” – Programs notated with an “M” have significantly modified operations in response to the pandemic. Details are described in the narratives. 29 The pie graph above shows that most programs are operating well within the appropriated resources. Of the 72 operating programs within the City, one has been categorized as needing additional resources or recalibration. The department sections on the following pages go into detail on each of the programs. Operating Program Highlights In addition to normal workload, City operating programs have accomplished many projects and objectives over the last six months. Some of these highlights include: • City Council Adoption of the 2020-2028 Housing Element • Issued Building Permits and Inspected Construction on 389 New Homes • Revised Summer Fun Day Camp and fall SPARK to support families during distanced learning. • Creation of numerous Virtual holiday activities (October-December) to lift community spirits. • Public Art with the downtown parklet decorations and the recent greenway art projects • Implemented a new eBike program, expanding open space rescue and care capabilities (Fire). • Implemented new strategic two-year training plan for suppression staff (Fire). • Continued implementation of injury prevention program which included financial support from CJPIA for functional movement training and screening of all members for a net reduction of injuries over the first year. • Completed construction of the Marsh Street Bridge ahead of schedule and under budget. • Completed construction of the 2020 Roadway Sealing Project that included Complete Street Elements and Public Art • Police CAT team contacted 284 homeless individuals and assisted 21 with successful reunifications • Installed a new energy efficient water disinfection system at the Water Treatment Plant. (Utilities) • Continued with construction of $110 million WRRF upgrade through pandemic and employed approximately 75% of the total labor force from the local community. (Utilities) • Creation and implementation of the Small Business Relief Grant program. • Creation and implementation of the Buy Local Bonus Program. 30 Administration Department Performance Measure Update Target FY21 FY21 Mid-year Update Maintain the City Network Reliability Uptime Status 99.9% 99.9% The indicator is expressed as the percent of time each year that the City's core network is online and available 99.9% of the time (no more than eight hours per year of unscheduled and uncontrollable downtime). So far, the department is meeting its performance measure target. Open City Hall Participant Satisfaction Rating 90% 94% Open City Hall is the City's main online platform for civic engagement. A variety of topics are regularly posted, and each member of the public is asked to complete a brief satisfaction survey regarding their experience using the tool. Regular use of Open City Hall by both, staff and public, is a cost-effective way to increase engagement. Currently, the City has a 94% overall satisfaction rating from participants of Open City Hall. Economic Recovery & Resiliency Plan Implementation 100% 90% On time implementation of the Economic Development and Tourism work plan items from the Recovery Phase of the Strategic Roadmap to recover from COVID-19’s economic impact on the City. Workload Measure 2020-21 Target As of Dec 31, 2020 City facilities receiving IT support 31 31 Data backed-up in Gigabytes (minimum) 140,395 173,000 Number of GIS layers maintained 905 905 Contacts with businesses regarding starting, expanding, and staying in the City 75 3001 Promotional contracts administered 50 13 Regular and special Council Meetings held 24 16 City Manager Reports reviewed 150 112 Council agenda reports processed 266 105 Public Records requests processed 300 159 Community partnership contracts administered 12 12 1 This workload measure is significantly higher than a typical year as the Department’s work programs for FY21 have shifted drastically to address the pandemic. The Department contacts businesses in a variety of ways including: direct contact, business emails, the Business Ambassador Program, and the Vacancy Task force. 31 Work Program Evaluations City Administration M The City Administration Program is categorized as yellow due to increasing demand for effective and meaningful communication and public engagement by the community and media due to the COVID- 19 pandemic. Staff has submitted a pending SOBC for an additional resource to manage the Communications program. In addition to responding to the on-going global pandemic, the program continues to maintain its service to the community through completion of core services such as management of the City’s Cannabis Business program and supporting the City’s Revenue Enhancement Oversight Committee. Most notably, in the first half of FY21, the Administration program supported the City’s Diversity, Equity and Inclusion Task Force and 2021-23 Financial Plan public engagement efforts. Cultural Activities The City has continued to support the City-County Library and the Performing Arts Center (PAC). The City provides an annual contribution to operating costs as well as various capital improvements for the library, including the remodel and roof project that was completed in the summer of 2018. The City is also a partner with Cal Poly and the Foundation for the Performing Arts (FPAC) in the operation of the Performing Arts Center. Operations are overseen by the Performing Arts Commission, with the Mayor and the City Manager serving as the City's representatives. Due to the impacts of COVID-19 on the PAC, the City Manager has been meeting regularly with the PAC’s Subcommittee on Finance to address these impacts. Economic Development M The Economic Development program has been actively supporting the City’s COVID-19 response. The key activities of the program have been in-line with the META Major City Goal and the Emergency Operations Center through the Incident Action Plan. The major portion of the program’s activities through the first half of the fiscal year has been supporting businesses through the Downtown Ambassador program, working with Downtown SLO on second year of the Clean and Safe Pilot program, Downtown activation as well as the Vacancy Task Force. The team has also supported the Open SLO program and the businesses through the grant process, promotional activities, and various communication efforts. Our partners such as the Chamber, DTSLO and the HotHouse were also engaged to help support the business community during these challenging times. Office of Sustainability M The Office of Sustainability has been active with implementation of the Climate Action Major City Goal and the updated “meta-goal”. Key accomplishments include adoption of the Clean Energy Choice Program for New Buildings and the Climate Action Plan for Community Recovery. Staff, which includes a CivicSpark Fellow, continued to support ongoing initiatives, Central Coast Community Energy and as staff liaison to the Climate Coalition. Staff initiated the first phases of Lead by Example (a program to achieve municipal operations carbon neutrality by 2030) and Better Buildings SLO (a program to review the city’s building stock and identify a pathway to reducing emissions in existing buildings) and made substantial progress on updating the community greenhouse gas emissions inventory. Staff also supported Community Development with ongoing project support for Resilient SLO (an effort that will identify the community’s vulnerabilities to the impacts of climate change and update the City’s Safety Element of the General Plan). Due to budget constraints associated with COVID-19, the carbon sequestration study and pilot project was put on hold but has since been reinitiated and will likely extend into fiscal year 2021-22. The Electric Vehicle Readiness Roadmap is also on hold; however, the Climate Coalition has agreed to complete the components of the scope that are within their technical capabilities, likely by end of calendar year 2021. 32 The City’s new Miossi Open Space property is poised for opening in early 2021, while staff remain active with the purchase of a conservation easement that will protect most of the balance of the ranch as a “phase II” project. Office of Sustainability staff also remain active with numerous community partners such as San Luis Obispo Repertory Theatre, San Luis Obispo Museum of Art, and with City Farm SLO. In addition, staff continue to coordinate implementation of open space fuel reduction for wildfire safety, as well as flood control efforts throughout the City’s creeks and riparian areas. Community Promotion M The Community Promotions program, through the work of the Promotional Coordinating Committee has been active in accomplishing work efforts to support economic recovery and enhancing quality of life for our residents and visitors. The PCC has adjusted usual programs, timelines, and policies to respond to the immediate needs within the committee’s purview. Since July 2020, the PCC has implemented the Support Local program. The program consists of multiple micro advertising campaigns and promotional campaigns that promote local business support in response to COVID-19. The first micro advertising campaign was “#SLOready” aimed at welcoming patrons back to SLO businesses through promoting safe practices. This campaign achieved over 350,000 impressions between August and September. The second micro advertising campaign was “SLObright” which ran between November and December and was targeted to regional and local shoppers to support SLO businesses during the holiday season. In addition to the micro advertising campaigns, the PCC maintains ongoing business promotional content campaigns including Ticket Tuesday giveaways showcasing local businesses weekly on Instagram, as well as the SLO Business Insider program that every other week features a different SLO business through a Q+A interview style blog that is shared are social media. In addition, the PCC reimaged the Cultural grants-in-aid program and in October opened an on-going grant cycle to support non-profit events and activities. To date seven of the 40 available grants have been awarded. To align with the City’s DEI efforts, the PCC expanded on the cultural holiday banner program with the addition of a banner design for Christmas, plus they created educational opportunities by creating printable coloring pages that were shared through virtual Parks and Recreation offerings and by placing QR code stickers throughout downtown to learn more about the holidays represented on the banners like Hanukkah, Kwanzaa and Lunar New Year. The PCC is continuing their work in the second half of the 20-21 FY on all the programs mentioned. Tourism and BID Promotion M The TBID has been actively responding to the industry impacts resulting from the COVID-19 pandemic. Since July, the TBID has established a COVID-19 response plan through the work of their new marketing agency. The COVID-19 response plan outlines the various stages of promotional efforts based on the current restrictions in place for travel and businesses as well as the health orders. In preparation for the hopeful recovery, the TBID approved a marketing plan for the 20-21 FY as well. In October, the TBID began limited advertising efforts within California drive markets, however that effort was suspended in December based on the Regional Stay at Home Order. The TBID has continued to align with key strategic partners to help support the promotion and recovery of tourism and other community businesses. In addition, the TBID began the proactive planning efforts to amend the TBID Strategic Plan based on the severe changes to their industry. The revised plan was approved in December and among other priorities it outlines the intention of sustainability as achieved through destination stewardship work efforts. The plan also includes a new imperative of “Foster Destination Resilience” which expands the previously approved initiatives of “develop an organizational resilience plan” into a higher priority work effort with an expanded scope. 33 Downtown SLO BID Administration The Downtown Business Improvement District (DBID) has provided the resources to the Downtown SLO to host a adapt to the impacts of COVID-19 on the business community. The resources also help support downtown maintenance & beautification efforts, economic development and sustaining Downtown SLO as an organization. City Clerk The City Clerk’s office has been active throughout the first half of FY 20-21 with the 2020 Municipal Election, agenda preparation, and an uptick in public records requests. The Clerk’s office has continued to adapt to the COVID-19 by providing various opportunities for the community to participate in public meetings and adapting processes to respond to the pandemic. During the first half of the fiscal year, the Clerk’s office prepared the agenda for 16 City Council/Disaster Council meetings and processed 105 Council Agenda Reports. Additionally, the program continues to see an increase in the number of public records requests; since July 1 the City has received and responded to 159 records requests. While this number is slightly down from previous years, the complexity and volume of records that need to be reviewed has increased due to more requests for emails searches of records. The City Clerk’s office has also taken on supporting more of the Advisory Bodies with virtual public meetings. IT - Network Services This program is categorized as yellow due to increased workload for supporting work from home efforts and virtual public meetings. Additionally, Network Services has not filled a budgeted part- time temporary position due to COVID-19. Network services completed the first phase of the VM Infrastructure project and the first phase of the Radio Handheld project (purchase and programming) and will begin distribution in early 2021. As part of the Network Security project, a pilot Two-Factor Authentication project was implemented for staff, for a planned rollout in early 2021. Also, Cloud backups were implemented for all City systems as part of the Network Security Project. The rese arch, testing, and contracting has been completed for the MDC Replacement project, and the Council Agenda Report has been submitted for award approval in January. Due to the COVID-19 pandemic, Network Services has postponed or re-prioritized projects in order to focus on helping shift staff to the Work-From-Home environment and other remote access priorities. This has involved heavily supporting the Clerk’s office with online public meetings, implementing additional VPN access infrastructure, and accelerating the roll-out of online collaboration tools like Microsoft Teams. IT Support Services handled 1,804 support tickets for the 6-month period. Year-over- year tickets are up 28%. Services include helping staff to work remotely and continuing this effort. The tickets covered the entire range of our support activities, including hardware and software installation, upgrades, and troubleshooting. Support services included creation of new Laserfiche workflows to enable users to be more efficient with their workload. The Help Desk has been able to keep up with the workload with the help of IT Systems Engineers in the Network Services Division. Control Systems Administrators have been busy with the two major Utilities construction projects that are in progress: the Water Resource Recovery Facility upgrade and the Water Treatment Plant upgrade. IT - Information Services This program is categorized as yellow because staff continue to experience higher than normal workload due to the implementation of the Motion Project, system upgrades, and work-from-home support. It would not be possible to maintain the current level of service without the temporary GIS Tech and student intern which are approved through June 30, 2021. 34 Information Services staff worked remotely from home during the last six months. Staff has fully adjusted to working from home, and the same level of service has been maintained except for the “walk-in” requests. The IS team was involved in developing and maintaining several applications related to economic recovery and tracking COVID-19 related work hours. The team added over a thousand assets in the major development areas such as Righetti Ranch and San Luis Ranch to Cityworks. Vital information was provided for FEMA’s Community Rating System report and Active Transportation Plan. There was significant progress on the Socrata project that is related to Open Data/Open Government initiatives. The IS team also used interns in the summer to create the residential parking block GIS layers to automate making over 100 maps in a matter of minutes. The Motion Core Team continues to work on system issues and enhancements that were identified post-implementation. The Motion Project Manager left in November and an interim plan is in place until the position can be filled, in addition to working with an outside consultant to finalize the ERP Governance structure to facilitate the transition from system implementation to long term program management. 35 Community Development Department Performance Measure Update Target FY21 FY21 Mid- year Update Development Review activities completed within established cycle times 75% 82% Established cycle times have been met 82% of the time during the first half of this fiscal year. The City has been able to develop some efficiencies during the Covid-19 closure, including online applications and payments, which have helped with timely processing of applications. Affordable Housing Units Constructed 40 Units 9 Units In the first half of this fiscal year, 9 affordable units have been constructed. Courtyard at the Meadows, a new 36-unit 100% affordable housing project is expected to be completed in early 2021, which will achieve and exceed the FY21 Target of 40 units. Code Enforcement Response Within Established Timelines 80% 85% This performance measure assesses the performance of the Code Enforcement Division with respect to the average response time for all complaints received. The standards are: First Tier - 24 Hours, Second Tier - 2 Days, and Third Tier - 3-5 Days. Workload Measure 2020-21 Target As of November 30th, 2020 Number of Development Review Applications Processed 362 332 Engineering Development Review Applications Processed 25 23 Building Permit Applications Processed 750 469 Inspections Conducted 4,600 3,496 Enforcement Cases Reported 800 207 Affordable Housing Units Constructed 40 9 Work Program Evaluations Administration The Administration program team provides management and support for the Planning & Engineering and Building & Safety divisions of the Community Development Department, and the City Council, Planning Commission, Architectural Review Commission, Cultural Heritage Committee and Human Relations Commission. The program also supports the Housing and Climate Action Major City Goals, as well as implementing proactive public engagement tools for projects and The City's Fiscal Responsibility Philosophy by "right-sizing" resources with a focus on the reduction of unfunded liabilities. Planning and Engineering This division is categorized as red because an analysis of workload to FTE was conducted and the results showed that the there is a 5 FTE gap between workload and current staffing. Temporary resources to fill the FTW gaps are being provided through the Development Services Designation. Staff is working to begin recruitments to meet current workload requirements. Ongoing workload is being analyzed and additional resources will be requested during the next financial plan process. This division reflects a consolidation of budgets from prior program activities including Long Range Planning, 36 Engineering – Development Review, and Planning – Development Review. The engineering group has completed 23 applications. Building and Safety This division is categorized as yellow because the increase in building permit application volume and staffing vacancies have hindered the ability to meet next day inspection goals. This division implements the adopted construction codes and other state and local laws that regulate building construction, use, and maintenance, including disabled access regulations. As of mid-year, there have been 3,496 building inspections, which is 76% of the target goal of 4,600 for the entire fiscal year. Currently there is one vacant FTE Building Inspector due to a retirement (workload being temporarily covered using a consultant Building Inspector). While one round of recruitments was held; the division was unsuccessful in filling the position. It will be conducting a second round of recruitment for the position. Code Enforcement Officers and the Code Enforcement Technician focus on promoting health and safety neighborhoods and increasing awareness about City policies and municipal codes. Code Enforcement staff investigate building code and land use violations in response to citizen complaints and actively patrol for violations of property maintenance standards. Additionally, Code Enforcement continues to work with the Police department and the County in enforcing the Emergency Orders and educating the community in regard to COVID-19. From July 1 to November 30, 2020, Code Enforcement Staff responded to 210 requests for investigation and opened 207 new code enforcement cases, while managing approximately 223 active cases. In additional to “normal” code cases, an additional 402 COVID calls were logged. Human Relations The Human Relations Program provides funding for the activities of the Human Relations Commission, which serves as an advisory body to the Council on issues relating to human and social services. This program was able to award grant money to support the production and preservation of affordable housing and non-profit anciencies serving the Human Services needs of residents. 37 City Attorney Performance Measure Update Target FY21 FY21 Mid-year Update Citation Appeal Process Completed Within 70 Days 70% 88% Even with an increased volume of appeals, staff was able to timely process those received (whether rejected, dismissed, or brought to hearing) at a rate higher than targeted. Previous analysis had only considered appeals brought to hearing, which disregarded the effort and time needed to process a large portion of appeals. This shift, to looking at the complete work effort, was noted in the previous budget report. Claims Against the City Received that Resulted in Litigation <5% 0% No tort claims against the City have required litigation so far this fiscal year, but one new writ action was filed during that time (related to a City Council development application approval). Workload Measure 2020-21 Forecast As of Nov 30, 2020 Liability Claims Against the City Reviewed 70 29 Resolutions/Ordinances Reviewed 130 60 Regular & Special Council Meetings 24 12 Planning Commission Meetings 18 9 Administrative Citation Appeals Received by the City 150 146* *Since the beginning of enforcement of COVID-19 Emergency Orders in Spring 2020 the volume of appeals received by the City has increased exponentially. Recent City Manager approval of increased temporary salaries funds allowed temporary staff to work additional hours and manage this workload. Work Program Evaluations City Attorney As the department’s only program, servicing all the legal needs of the City Council, departments, and advisory bodies, while also providing legal advice and support to the implementation of very ambitious, multi-departmental work programs, staff are often overwhelmed by the demands on their time. The program is coded yellow as recent requests for additional temporary staffing funds were approved, but long-term staffing needs are still being evaluated. The additional temporary staff brought onboard in December 2020 have allowed regular staff to begin focusing on planning and process efficiencies, but it appears too late to complete the large-scale department workload analysis that had been advised prior to submission of an SOBC to increase the number of regular department staff for year one of the 2021-23 Financial Plan. Staff are re-working the timeline and evaluating options for presentation to Council. An RFP for the workload analysis will go out in January 2021, with the results expected back from the selected vendor in May/June 2021. 38 Finance Department Performance Measure Update Target FY20 FY20 Mid-year Update Receive the Government Finance Officers Association Distinguished Budget and CAFR Award Yes Yes The finance department was recently awarded the GFOA Distinguished Budget award for its 2019-21 Financial Plan as well as the Comprehensive Annual Financial Report award for the 2018-19 audit. Meet Budget and Fiscal Policy Fund Requirements 100% 100% The City has maintained all budget and fiscal policy adopted fund balance requirements. In addition to the mid-year report, a first quarter status report was presented to Council in November 2020. Meet all Federal, State, and City Charter Reporting Requirements 100% 100% As of December 31, 2020, the City has provided accurate and timely financial reports as required to federal and state entities as well as the City Council. Workload Measures 2020-21 Target As of Nov 30, 2020 Business License and Tax Certificates Issued 2 8,100 7,633 Accounts Payable Checks issued 8,000 3,021 W2s Issued (Issued annually in January) 800 0 Purchase Orders Created 4,000 1,845 Requests for Proposals Issued 45 7 Contracts Electronically Routed3 300 421 Work Program Evaluations Finance Administration This three-member division is responsible for the management and administration of the City’s finance operations and infrastructure financing. The implementation of Oracle has led to many procedural changes. This division is instrumental in informing the organization about these changes and improving operational effectiveness. Current resources meet the division’s needs. Since November 2019, the division includes the Infrastructure Financing Analyst who is responsible for the administration of Community Facilities Districts, Development related agreements, and AB1600 related deliverables. Budget The budget division has successfully delivered on its quarterly status reports to Council and has remained nimble in response to the fiscal challenges of the pandemic. The budget division officially abandoned the implementation of the Oracle-based budget module, the third and final phase of the Oracle implementation. During implementation, it became clear that the system was unable to meet the City’s needs and the cost to continue the implementation outweighed the benefits. The City decided 2 About 300 businesses closed during FY 19-20 Q4 (the first 3 months of the pandemic). While there were some new businesses that replaced them during those months, they are not counted in th e 20-21 measure. There are also approximately 100 businesses that still need to renew. 3 Management changes and the COVID emergency caused contracts' electronic routing to increase in the first half of FY2020 significantly. 39 to return to its previous budget software provider, Questica, that has a reputable history with the public sector and can integrate with Oracle. Questica will be ready for the 2021-23 financial plan development. Overall, the division has the resources needed and plans to continue to make improvements to the budget process and related deliverables. Revenue Management The division budget can meet its objectives, but the workload associated with new cannabis businesses and enforcements of short-term vacation rentals may require additional resources in the future. The Division overcame a lot of change in the first six months of FY 2020-21. The division adjusted its normal billing schedule for many tax and fee remittals to help aid customers and support the local economy during the pandemic. The division also contracted with a new Utility Users’ Tax (UUT) consultant, HdL. UUT is the City’s fourth largest tax revenue and HdL’s specialized knowledge of tax revenue and enforcement strategies will come at a net gain for the City. Purchasing Building on fiscal year 2019 initiatives, purchasing procedures to standardize operations have expanded across all departments. The increased use of open purchase orders (when applicable policy is followed) has reduced credit card transactions, reduced administrative costs associated with processing expenses, and increased attention to budgeting for expenses before incurring them. Purchasing, in coordination with the City's Sustainability Office and Public Works, introduced new sustainability criteria in the City's RFP templates for Janitorial Services and Landscape Services, two of its largest contracts which should help the City achieve its Climate Action goals both directly and indirectly. Internal services divisions have coordinated with Purchasing to open DocuSign accounts and train end users on electronic routing. In addition to staff satisfaction and increased operational efficiency, the City has realized significant environmental savings from electronic routing – year to date six trees; 21,000 liters of water; 2,000kg of carbon; and 143kg of waste have been diverted and saved. The purchasing division is comprised of two full-time positions. Due to a promotion, there is currently a vacant Financial Specialist – Procurement position. The Financial Specialist duties are currently absorbed by the Purchasing Analyst and the position will be re-evaluated and remain unfilled until the City has a clearer understanding of the COVID19 economic impacts. Accounting The Accounting division is categorized as yellow because of unexpected hurdles it is facing with the implementation of the new financial system. The organization struggled with the Human Capital Management module implementation and is continuing with efforts to improve the system. The division has needed additional resources in FY 2020-21 for both payroll and accounts payable processing, as well as bank reconciliations; these are very likely ongoing needs to be addressed. Full efficiency from implementing a new ERP system can take years and ultimate staffing levels will need to be evaluated. Support Services & Non-Departmental Expenses The Support Services program in place to help effectively budget and account for Citywide costs not associated with a specific operating program or project. Both elements are appropriately budgeted for the City’s current needs. 40 Fire Department Performance Measure Update Target FY21 FY21 Mid-year Update Meet the Total Response Time (TRT) goal as defined by General Plan Safety Element of 7 minutes or less to 90% of all lights-and-siren emergencies in the City. 90% 71% Total Response Time is calculated from the time of 911 pick-up in the City's Emergency Communication Center until arrival of the first Fire Department personnel at the scene. For serious medical emergencies and fires of all types, rapid arrival at the scene impacts outcomes. The time standard established in the General Plan Safety Element are reflective of the guidance standards of the National Fire Protection Association (NFPA). The Department continues to make improvements towards achieving the 90% level, however, increased development and population present challenges that are not in the immediate control of the department. Staff is also working to improve times that are in the immediate control of the department. For example, the Deputy Chief is currently working with the shift Battalion Chiefs to identify and eliminate response inefficiencies to help improve turnout times (the time between notification of the alarm and the time the apparatus starts driving). For the next financial plan, the Fire Department is planning on dividing up the different time categories within TRT to better analyze areas that can be improved Percentage of Fire Department Development Review activities completed within published cycle times. 80% 64% The target goal of meeting cycle times on 80% of all internal development review activities is based on assumptions that some projects will be more complex, development review activities will be extremely high, and resources will be limited. In FY 2020‐21 performance has been down primarily due to the resumption of on-site annual fire and safety inspections that were delayed during the Shelter-at-Home orders during the spring and early summer of 2020. Fire Inspectors have been working to balance the demand of completing review activities within published cycle times and completing delayed inspections. Workload Measures 2020-21 Target As of Nov 30, 2020 Fire Incidents (National Fire Incident Reporting System (NFIRS) 100 series) 159 77 Rescue and Medical Services (NFIRS 300 series) 3,753 1,500 Total Fire Responses 6,255 2,363 Fire and Safety Inspections 3,650 267 Building Plan and Development Plan Reviews 650 407 Emergency Response Personnel Average Training Hours 185 89 41 Work Program Evaluations Fire Administration This program is categorized as yellow because additional department resources may be needed in the future to continue meeting other department program objectives and priorities. The reallocation of staff time and resources to unplanned priorities have required deferring Administration program objectives such as the implementation of several strategies in the department's strategic plan objectives including strategies in Strategic Objective (SO) 2.3 “Enhance and engage staff professional development”, SO 2.4 “Assess and implement internal process improvement” and SO 4.1 “Establish an open, respectful, inclusive and healthy work environment throughout the entire department”. Specifically, the Deputy Chief has been dedicated to overseeing the training program management and the Fire Chief, Senior Administrative Analyst and Administrative Assistant have been dedicating significant resources to addressing the Disaster Preparedness and Assistance program objectives. Staff plans to overcome these shortfalls through ongoing staffing requests starting in the next financial plan: (1) Training/Safety Captain and (1) Emergency Manager. Additionally, while COVID-19 has limited the Department’s ability to utilize training funding and therefore resulted in training budget savings, the program amount is insufficient during non-COVID-19 limitations due to budget reductions from the Fiscal Health Response Plan (FHRP) and staff may need to increase Education and Training budget to meet department needs in the next financial plan. The fire administration training budget went from $7,400 to $3,000 after the FHRP. This reduction essentially eliminated the training budget for the Senior Administrative Analyst and Administrative Assistant. To ensure adequate employee development, the 60% reduction is not sustainable long-term. Fire Administration consists of four FTEs and plans, directs, and evaluates all Fire Department programs and their activities. In the first half of FY21 The Department’s Administrative Analyst was reclassified as a Senior Administrative Analyst in November of 2020 and the department is utilizing salary savings from the vacant Mechanic Helper position staffed under the Fire Apparatus Services program to fund the addition salary associated with the reclassification. Emergency Response The program is categorized as yellow due to its underperformance in meeting the Total Response Time (TRT) Performance Measure goal, which as been the case for the department since it adopted the goal. To meet the target TRT goal, the department would require a significant investment in additional resources, such as adding a strategically placed 5th fire station, which will reduce the drive time of TRT by shrinking the primary response areas for each station. Drive time is the most variable and time-consuming portion of TRT. Currently, a 5th fire station is planned to be added in the Southwest side of the City once the Avila Ranch development project reaches 80% occupancy levels. Some efficiency improvements are currently being explored to help make improvements to TRT, however eliminating these inefficiencies will not be adequate to reach the current goal. Additionally, the department is currently undergoing a self-assessment which will prove assistance in identifying ways to make response improvements and may help identify implications of failing to meet this goal. The 45 FTE staffed Emergency Response Program is responsible for protecting life, the environment, and property by responding to a wide variety of emergencies, including, but not limited to: medical emergencies, structure fires, vegetation fires, hazardous materials incidents, vehicle fires/accidents, flooding, utility emergencies, and a wide range of urgent public assists. Since the implementation of the over-hire program at the end of the FY19, the department continues to observe a reduction in overtime related costs. Hazard Prevention -- - M 42 This program is categorized as yellow because, although it has enough budget to continue operations at the current level, it has not been able to fully meet its development review performance target in FY21. Additionally, COVID-19 health restrictions have limited the number of on-site fire and safety inspections and ceased company engine inspections. The department anticipates that performance will improve significantly starting in January of 2021 when the department rolls out the self-inspection program and a new field inspection software, which is replacing a software system that did not meet the needs of the department. The new software program will help streamline field fire inspections and increase program capacity to meet program and performance objectives. Training Services This program is categorized as yellow because there may be a need for additional funding to fully accommodate the extensive two-year training plan for emergency response staff which was developed by the Deputy Fire Chief. Additionally, a dedicated training officer will likely be needed to manage the required training program for emergency response staff and allow for the Deputy Fire Chief to effectively run Fire Administration objectives related to that position. The non-staffed Fire Training Program schedules, coordinates, and documents both in-house and outside training and certification for fire department staff. The program also works to maintain and improve the health and fitness of fire department employees. The overall program goal is to provide and support highly qualified, well trained, safe, healthy and fit employees. The Training Services program has been utilizing $18,000 available in FY21 to implement an injury reduction program for emergency response staff. This has included training staff to conduct functional movement screening, equipment purchases and contracted functional movement training and the department has observed a decrease in the frequency of on-the-job injuries in the short term. Recruit Academy The non-staffed Recruit Academy Program is responsible for coordinating and completing the training of new hire firefighters. The Fire Department does not have current plans to host a recruit academy in FY21 due to the current number of firefighter vacancies and the inefficiency of hosting an academy with 2 recruits. Fire Apparatus Services The 2 FTE staffed Fire Apparatus Program performs fire apparatus services, maintenance and repair of light and heavy fire apparatus and vehicles. In the first half of FY21 the program has had to shift from a proactive maintenance strategy to a reactive strategy due to an ongoing Mechanic Helper vacancy which the Department hopes to fill in early 2021. Although the program has felt the training budget reductions from the Fiscal Health Response Plan the overall budget is currently enough to meet the overall program objectives of performing all required maintenance on light and heavy-duty fire vehicle apparatus and related equipment. Salary Savings from the Mechanic Helper Position is helping offset the cost of reclassifying the Department’s Administrative Analyst as a Senior Administrative Analyst. Fire Station Facilities Support The non-staffed Fire Stations Facilities Support Program manages and maintains the City's four fire station facilities, their grounds and miscellaneous related equipment, appliances, and furnishings. The budget is currently enough to meet the overall program objectives and activities. Disaster Preparedness and Assistance -- - M This program is categorized as yellow because the budget is currently sufficient to meet the overall program objectives and activities only through the support provided by Fire Administration Staff including the Fire Chief, Senior Administrative Analyst and Administrative Assistant and temporary contract emergency management funding that is set to expire at the end of FY21. The growing need for both City and Community disaster preparedness in recent years has outpaced the department’s capacity previously built within this program. Without the temporary contract emergency 43 management funding that was added for the 2019-21 Financial Plan, the cost center contains minimal budget that is used to update existing City policies and host an annual open house. Additionally, COVID-19 health and safety concerns have delayed several scheduled trainings for both City staff and the Community. The non-staffed Disaster Preparedness and Assistance Program has three areas of focus: 1) ensures that City personnel can provide appropriate rescue and relief services following a major disaster such as earthquake, flood, nuclear power accident, hazardous material spill, and wildland fire: 2) provides information and education on disaster preparedness, and fire safety to the general public: and 3) provides assistance to communities outside of the City of San Luis Obispo as part of the State's Mutual Aid system. As part of the 2019-21 Financial Plan, the department is utilizing funding to contract disaster preparedness services as well as utilizing light-duty staff to increase disaster preparedness demands for the Community. Absent of COVID-19 restrictions and with this temporary funding, the program can meet objectives, however, when funding expires the department will likely need to look at additional resources including the request of a FTE Emergency Manager. 44 Human Resources Department Performance Measure Update Target FY21 FY21 Mid-Year Update Percentage of On-Time Employee Performance Evaluations 95% 91% On time performance evaluations are currently close to the target goal, which is a significant improvement from the beginning of the fiscal year. This improvement is largely due to the reminders Human Resources staff is providing Department Heads and supervisors on a regular basis. Departments receive reminders every two weeks, and they are encouraged to be a part of the review process to ensure accuracy and timely evaluations. The information is also provided to the Leadership Team monthly. Percentage of Internal Promotions 40% 70% Human Resources staff has continued to encourage departments to provide development opportunities for their staff to work out of classification or on temporary assignment and continued the City’s commitment to training and development. The combination of these efforts has resulted in seventy percent of recruitments resulting in internal promotions. Reduction in Liability and Workers’ Compensation Claims* -6% -5% During the first six months of the fiscal year, the dollar amount of claims that have been filed and settled have been unusually low. If the trend continues throughout the year and if all claims that are currently open are paid out at the claim reserve the program will exceed the expected reduction. As of November 30th, 2020, a total of 21 liability claims were filed, significantly less than the anticipated number o f claims. There have been 22 Workers’ Compensation Claims filed during this period. If the trend continues for the rest of the fiscal year, the department will achieve the objective for both Liability and Worker’s Compensation Claims. *This performance measure will only consider liability claims that incurred monetary losses Workload Measure 2020-21 Target As of Nov 30, 2020 Recruitments - Regular and Supplemental 100 23 Labor relations activity 45 15 Applications screened 3,000 690 Training sessions coordinated 35 22 Classification, compensation, and benefit analysis 75 645 Liability Claims Filed 56 21 Workers Compensation Claims Filed 55 22 Work Program Evaluations Human Resources Administration This program is now yellow because current staffing levels are strained responding to competing demands. The Human Resources Administration program provides support to all City departments in attracting and retaining highly qualified employees. This program includes benefits administration, classification and compensation, recruitment, labor relations, performance management, and legal compliance. With the implementation of the Oracle HCM system, many procedures within the department have changed, and responsibilities have shifted from the Accounting program in Finance to this program. Full efficiency from implementing a new HRIS system can take years to come to fruition and ultimate staffing levels are still being evaluated. Further, there are many modules within 45 Oracle HCM that have not yet been fully implemented. With the Organization of the Future Initiative, staff have been actively working with the Community Services Group to identify areas for efficiencies, recommend reclassifications, and recruit appropriately. Additionally, staff within this program has spent significant time this year responding to COVID-19, including creating, updating, and administering several policies to support employees working remotely, and providing paid leave to employees, administering a Voluntary Retirement Incentive Program, and formed a cross-departmental committee to boost and sustain employee morale. Risk Management This program is now yellow due to the temporary increase in workload due to COVID-19 response. The Risk Management program aims at reducing the risk of employee injuries and accidents and protects City assets from liability. In the first half of FY 2021, staff has been focused on supporting employee and public health and safety related to the COVID-19 pandemic. Staff has provided guidelines and policies for COVID-19 exposure reports, expedited testing for critical infrastructure workers, supervisor guidance, and health screening. Staff continues to support the Fire Department in implementing functional movement efforts to reduce injuries on the job. Also, staff continues to review contracts to reduce City liability and analyze the liability and worker’s compensation claims that are received for root cause analysis. Wellness The Wellness program supplements the Risk Management program by providing employees tools and education to improve their physical and emotional well-being, thus enhancing employee productivity and performance. Due to workload related to the Human Resources Administration program, there are currently fewer resources dedicated to this program. However, a Benefits Guide for employees was completed in September that includes educational information about wellness activities, such as the Wellness Room and discounts on health and wellness resources. Additionally, a committee led by Human Resources staff is supporting employee wellness and morale in response to and for the duration of the COVID-19 pandemic. 46 Parks and Recreation Department Performance Measure Update Target FY21 FY21 Mid-year Update Pop up Events to Activate our Parks & Facilities 13 events 4 Events Parks and Rec staff have creatively planned and executed pop up events to activate the City’s parks and facilities while maintaining social distancing and COVID-19 restrictions. In December, staff developed a Holiday Hike Challenge, an Ugly Sweater Contest at the Skate Park, and a Hunt for Holidays Around the World in which community members search and find colorful posters hidden at parks representing holiday celebrations around the world. Staff also created a Ghostly Ghoul Hunt in October where community members search and find hidden ghouls at City parks. Increased Community Awareness of Recreational Activities 10% 6% Parks and Recreation continues to use social media channels to market the department’s events, program offerings, and public engagement opportunities surrounding the Parks and Recreation Master Plan and General Element update. From July 2020-December 2020, the Department Facebook page has 186 new followers (4,408 total followers, 4% growth) and 365 new followers on Instagram (5,220 total followers, an 8% growth in followers). In addition, the Department started a Virtual Rec webpage to provide virtual recreation opportunities to the community amidst COVID-19 recreational restrictions. Miles of Trails/Roads Maintained in the City Open Space 60 Miles 61.25 Miles Ranger staff built an additional 2.75 miles of trail at Whale Rock Reservoir which is now open to the public. The team has been working diligently to prepare the recently acquired Miossi open space for public access. Staff has installed 3 gate systems, repaired and improved roads and access points and built approximately one mile of new trail. Staff will begin to maintain approximately 1.5 miles of road at Miossi open space. Due to fire in September at South Hills, staff repaired the south-west trail due to fire vehicle access. Workload Measure 2020-21 Target As of Dec 1, 2020 Youth Service Participants 1,195 200** Adult Sports Teams Registered 250 0* Youth Sports Participants 1,000 137* Triathlon Participants 800 0* Golf Rounds Played 25,000 8,459* Contract Class Participants 800 138* SLO Swim Center Uses 80,000 14,775* Facility Permits Processed 900 41* Special Events Permitted 75 0* Senior Center Members 300 315 Jack House & PRC Meetings 18 5* *indicates workload measures have been significantly impacted by COVID-19 restrictions and regulations **due to COVID, tracking reflects differently as the program registration has been shifted from drop in program to package program, resulting in significantly less children served. Childcare hours provided: 93,150. Program enrollments: 2110. 47 Work Program Evaluations Recreation Administration -M The Recreation Administration Program has been working with consultants on a draft Parks and Recreation Master Plan and General Element update. Staff anticipates having a completed Master Plan by spring of 2021 and will begin planning for implementation in FY 21-23. This year, the Department completed its five-year Strategic Plan and will begin initial planning steps for the next five-year Strategic Plan. The Public Art Program will continue to support the Economic Recovery and Resiliency Meta-Goal through the lens of Diversity, Equity and Inclusion. The Bike and Greenway street art project is near completion. Parks and Recreation is working closely with other departments on the completion of new park projects and new and updated park amenities. Currently, the division has the resources that it needs to achieve all major objectives. The current registration software has some limited capabilities and staff anticipates requesting funding for start-up costs to transition to a new software in the next financial plan. Facilities -M The Facilities Division is categorized as yellow because Facilities supplemental staff have been reassigned to work the Open SLO program through set-up, and clean-up of the Mission Plaza Downtown Dining tables, chairs and umbrellas. If normal programming resumes alongside the Mission Plaza Downtown Dinin g, additional staffing budget will be needed. Facilities programming have been impacted by COVID-19 restrictions and staff is only permitting outdoor diamond and turf fields for organized youth sports clinics run by leagues. Typically, the program manages permits for City indoor facilities and BBQ locations but is unable to do so currently with public health restrictions. Staff normally provide parking enforcement during high impact uses at Damon-Garcia Sports Complex and on-site support during weddings and events at the Jack House Gardens but do not intend to offer those services until further restrictions are lifted. The Facility Division manages insurance requirements for permits, organizations, and events for the Department, but this has also been impacted. The City/County library community room is currently being utilized for county contract tracing and is not available for public rental use. Youth Services -M This division is categorized as yellow because of staffing challenges associate d with recruitment and retention. Staff is experiencing recruitment challenges due to the nature of Youth Services staff and their interaction with children and higher exposure risk to sickness during a pandemic. In addition, many Youth Services staff are Cal Poly students and with scheduling challenges surrounding academic calendars, staffing program times is challenging. With childcare at the center of the community’s economic recovery, Youth Services staff have re-envisioned programming in an effort to help meet some of the childcare needs of the community. Youth Services has modified programming amidst the COVID-19 pandemic and is offering full- day, and part-day childcare during the SLCUSD distance learning announcement. California state Licensed facilities are currently provided on three SLCUSD school sites. Youth Services staff continues to look for creative solutions to accommodate as many children as possible to allow more children into the program off current waitlists. Children with Special Needs are accommodated at all school sites and programs. Ongoing professional development is provided to Youth Services staff, including mandated Child Abuse reporting, First Aid and CPR, program and curriculum development, positive guidance strategies and inclusive programming, safety, and large group management. Community Services -M In a typical year, the Community Services Division hosts a variety of community-based events such as the SLO Triathlon, manages youth and adult athletics leagues and recreational activities, promotes healthy lifestyles and social interactions, coordinates city-wide volunteer opportunities, city-wide special event permits, and serves as liaison to the Jack House Advisory Committee and Senior Center Board. Amidst the COVID-19 48 pandemic, community services programs have been greatly impacted as programming is typically centered on big group activities. Events have been modified to meet virtual and social distancing requirements such as scavenger hunts in parks and the development of a virtual recreation resources page. Staff have not been able to run youth or adult sports leagues but are running youth sport clinics and providing contract classes to the community on a smaller scale. Due to program limitations, Community Services staff have provided staff support to childcare programming and other essential services. In addition, the Community Services Division has lent a hand to help support the economic vitality of local fitness and wellness businesses in coordinating the Fitness in the Park Program. Ranger Service This division is categorized as yellow as additional staffing is required to maintain and patrol the City’s open space due to anticipated increased public access, increased encampments in the open space, and increased open space usage due to COVID-19. The Ranger Service program achieved Maintenance Plan objectives such as flood reduction at the Bob Jones trail. Staff built trails at both Whale Rock Reservoir and began building new trails at Miossi open space to prepare Miossi for public access. The Ranger Service division continues to dedicate resources to clean up trash and debris in the City’s Open Spaces and creeks. To effectively maintain and manage the City’s Open Space, a ratio of 1 full-time field Ranger is needed per 1,000 acres of City Open Space. Additional staffing resources and fleet will be requested in the next Financial Plan to maintain this ratio as the Miossi open space is anticipated to be open for public use before the end of the current FY. Aquatics -M The Aquatic program is categorized as yellow as supplemental staffing costs have increased due to additional requirements for cleaning due to public health guidelines on operating a Public Pool in a pandemic. The program continues to provide diverse programming to the community while ensuring social distancing and implementing State and County Health Guidelines surrounding operating a public pool amidst a pandemic. Programming is limited to lap swim, therapy pool classes, and private swim lessons. Staff was able to expand private swim lesson programming and recently began running modified Family Rec Swim. Management of the SLO Swim Center continues to provide training to its staff including First Aid, CPR, water rescue techniques, and implemented inclusivity and diversity trainings. Golf Course -M The Laguna Lake Golf Course (LLGC) continues to offer award winning golf to the SLO County community and has seen over 1,000 new golfers utilize the course since July 2020. As the only municipal course in SLO County, the course was closed at the onset of the State’s initial shelter at home order on March 13. Based on the evolution of the pandemic, the LLGC was able to reopen under modified operations the first week of July. Operational hours were reduced to 50 hours per week (regular programming is 84 hours) as all supplemental staff had been furloughed and daily operations were managed by full-time staff. Rentals, including golf and push carts, were not rented out as proper sanitation could not be maintained. In October 2020, the course expanded operational hours back to 80 hours/week to accommodate the needs of the community, with rentals resuming. The staff continues to make improvements to the course that improve the golfer experience. Management at the golf course have introduced new and creative programming to boost awareness and introduce new community members through Night Disc Golf, weekly Night Golf and are hosting the Youth Sports Golf Clinics. 49 Police Department Performance Measure Update Target FY20-21 FY21 Mid-year Update Crime Reduction -2% -0.3% Crime statistics for Part 1 Crime (defined as crimes against persons) for the timeframe of July 1, 2020 to September 30, 2020 totaled 544. Comparing this to the same timeframe in 2019 there was a 0.3% reduction. The overall goal for the department is to achieve a 2% reduction in Part 1 from FY 19-20. Based on analysis of results thus far, staff forecasts that the goal of 2% may still be attainable. Unfor tunately, these statistics are only reflective of three months (July – September) therefore there are nine more months of this fiscal year that may greatly impact the crime statistic goal. Increase Engagement on Internal Wellness and Employee Health 20% 6.7% Employee wellness cannot be quantified in numeric values but rather in the innovative services, programs, and outreach conducted by the department’s Peer Support Team, which is documented below. Staff intends to discuss options on how to better quantify data for this performance measure. As part of the 19-21 Financial Plan, the Police department has continued to invest in the peer counseling team and explore ways to offer professional emotional and psychological support to its employees. The Department tracks the number of Peer Support contacts handled by the team and has a goal to increase engagement with Employees by 5% and 10% respectively over the Financial Plan years. In the first five months of FY 20-21, six (6) out of the 90 employees in the department have officially utilized the Peer Support Team services. In addition to counseling support, the team was able to provide an employee scholarship to a retreat designed to help individuals deal with the effects of trauma (at no cost to the department). Additionally, it helped facilitate an eight-week counseling program for two (2) employees and hosted a critical incident debriefing for the county’s regional SWAT team. All three programs yielded extremely positive results and feedback from attendees. In fact, the regional SWAT Team debrief was so successful that the team has now constructed an official debrief team that can be utilized throughout the county. In addition to “official” contacts (measurable), there are employees routinely utilizing the Peer Support program in an unofficial capacity through informal conversations with Peer members and check-ins after critical incidents, both on and off-duty. The focus of the Peer Team in 2021 is strictly the wellness of department employees and keeping everyone healthy. COVID-19 has restricted some of the in-person contact, but the team is actively coming up with innovative ways to reach out to everyone. The Peer Support Team continues to disseminate a monthly newsletter with helpful tips on wellness, also continues to perform regular check-ins with employees that are sick or injured at home. Reduce Homelessness and Mental Health Disorder Calls -5% -6.2% In comparison to the same timeframe last year, there has been a reduction in calls for service related to Homelessness and Mental Health Disorders by about 6.2%. The department continues to ensure that its staff receive Crisis Intervention Training (CIT) and have the tools needed to deal with the growing needs surrounding homeless and mental health issues within the City. The small reduction in calls seen is likely due to COVID restrictions that have caused a decrease in activity Downtown, where a significant number of homeless and mental illness calls originate. The Department also filled a second CAT Officer position in the past 6 months, (the position was unfilled due to staffing vacancies) in an effort to dedicate further resources to providing services to homeless and the mentally ill. 50 Workload Measure 2020-21 Target As of 11/30/20 Part 1 Crime (Property/Violent)* 1,906 544* Homeless Calls for Service 7,609 2,841 Traffic Collisions (All) 605 138 All Noise Complaints Received by Dispatch 1,771 1,017 Citations and Warnings Issued 9,300 2,265 DUI Arrests 250 54 Calls for Service – Police 32,200 15,510 Delayed Response (due to Officer unavailability) 1,000 241 Total Arrests 2,245 373 Calls received in the Communications Center 109,500 44,813 Property / Evidence Booked 7,630 2,948 Body Worn Camera and In-Car Video Uploads 66,957 23,238 Public Records Requests Filled & Subpoena Duces Tecum 93 55 Cases assigned to Detectives 357 128 *Part 1 Crime Statistics for mid-year only represent July 1, 2020 – September 30, 2020. Work Program Evaluations Police Administration The Administration division is continuing to meet program objectives despite the Chief’s departure in late September. The Administrative Captain is now the Interim Chief, and a Lieutenant is currently acting as Administrative Captain. Until the department hires a new Police Chief and returns to having two full-time Captains, it is focused on maintaining existing services and limiting new projects that may require additional resources. The department’s five-year Strategic Plan developed in 2015 has been completed, but the development of a new Strategic Plan is currently on hold until a new Chief is selected. Patrol To protect the health of the community from COVID19, the Patrol division has tried to minimize face to face contact with the public when possible. As a result, Patrol has not been able to increase enforcement of traffic laws and violations as much as it had intended to (one of the division’s main objectives). Although this has not impacted the department’s budget, it is for this reason that Patrol is categorized as yellow. The department is continuing to hold weekly meetings to analyze crime trends and determine the best strategies for response. Deployment of the Community Action Team (CAT) and the Downtown Bike Unit continues with focused efforts to address adverse behaviors in the Downtown area. To aid in this effort, a second officer has been assigned to the CAT which has provided help for enforcement and response. In general, the department’s overtime expenditures are trending high which is mainly due to protests. Staff continues to keep an eye on overtime and the department should have salary savings to help offset the overages at year end. Investigations The Investigations work program has not been able to meet objectives related to providing both internal and external training opportunities due to COVID-19 restrictions. These restrictions in training opportunities have not had an adverse effect on the department’s budget. Many training classes for 51 detectives, typically available through POST or other sectors, have been canceled or postponed. Additionally, the ability to provide the community training opportunities to reduce victimization have halted. Despite setbacks, there continues to be an effort to work with outside organizations to discuss sexual assault prevention and investigative efforts through partnerships with Cal Poly and RISE. The Special Enforcement Team has been active identifying crime trends, investigating illegal marijuana markets, and working closely with the state auto task force team for vehicle theft investigations. Support Services The Support Services program, which includes both the Records Division and Dispatch, is categorized as yellow because the objectives related to staff development and training are not currently met. The limitations in training opportunities have not had an adverse effect on the department’s budget. Most training classes for staff have either been canceled or postponed due to COVID-19. Additionally, the objectives to re-establish the “9-1-1 for Kids” education program and provide Elder Outreach have been put on hold due to staffing shortages and public health concerns. On a positive note, the department’s electronic reporting (officer’s submittal of reports electronically) and online reporting (community web-based reporting tool) are currently being utilized and the objective to finish outfitting the mobile command trailer is close to completion. Neighborhood Services The Neighborhood Services Division is meeting all objectives. The department has increased it’s social media presence in order to enhance community outreach and will continue to identify ways to improve communication. Additionally, there has been a downward trend in calls for service related to noise complaints over the last ten years. Traffic Safety Most components of the Traffic Safety’s objectives are being met, but due to limited resources and COVID-19 restrictions, participation in events such as Every 15 Minutes, Bicycle Rodeo, MADD and community presentations have not occurred this fiscal year. Staffing resources are limited because one traffic officer has been out on long term injury and another traffic officer position remains unfilled due to staffing shortages in Patrol. 52 Public Works Performance Measure Update Target 2020-21 Mid-year Update Increase the proactive preventive maintenance of city assets 5% 6% Preventive maintenance completed in parks, city facilities, and streets prolongs the City’s existing infrastructure and assets while reducing the risk of larger, more expensive maintenance or reconstruction projects in the future. This is measured by an increase in Work Orders for Preventative Maintenance. This year Public Works is on track to increase preventive maintenance efforts 7% from last fiscal year. Preventative maintenance includes items such as trimming trees or replacing aged irrigation systems prior to failure, fixing sidewalk trip and fall hazards during routine inspections, and servicing mechanical equipment in buildings keeping them functioning efficiently. Enhance traffic safety for all modes of transportation 2% - 3% reduction* 3.0% reduction* Implementation of the Traffic Safety Program included several signing/striping improvements, traffic signal enhancements (i.e. Lead Pedestrian Intervals), and continued progress on more complex/costly capital projects, such as the California/Taft Roundabout and Railroad Safety Trail (Taft to Pepper). Based on the most current available collision data, citywide collisions have been reduced by 3.0% in the past year (using a running three-year average). * Collision reduction Percentage of capital projects constructed in the budgeted year 85% 85% Approximately 85% of projects funded for construction within the FY20/21 fiscal year are expected to begin work by the end of June. Examples of projects that have met their delivery schedules include South Hills Radio Site Upgrades, Bullock Lane CMP Replacement, Swim Center Shower Repair, Islay Hill Park Playground Replacement, and Areas 4 & 5 Roadway Sealing project, among others. Public Works staff achieved 85% project delivery in part through a filling a vacant engineering staff position and receiving additional funding at the FY20/21 budget supplement to support critical infrastructure projects. Staff continue to manage complex projects including the Prado Road Interchange, Prado Road Bridge Replacement, and the Palm / Nipomo Parking structure, in addition to routine maintenance projects. Workload Measure 2020-21 Target As of Nov 30, 2020 Total acreage of park inventory 530 530 Street miles maintained 134 134 Total transit riders 1,138,235 351,133 Total number of public parking spaces in the Downtown core 2,466 2,315 Square feet of City facilities 221,176 221,176 City fleet 340 340 Pavement Condition Index 72 72 Total trench repairs 78 48 Bicycle Network in total miles (Class I/II/III/IV) 10.8/32.2/24.6/1.4 8.0/31.2/24.6/0 Total trees in the Urban Forest 20,000 20,000 Corrugated Metal Pipe in Storm System 14% 14% 53 Work Program Evaluations Public Works Administration Over the past six months, staff has continued analyzing the departmental structure in the context of the Organization of the Future to ensure the most efficient delivery of Public Work’s functions to the community. Included in this analysis is the support work that is needed given some of the operational changes arising from new software. The division anticipates significant salary savings due to prolonged vacancies and use of interim backfills. Some savings will be offset by cost in temporary staffing and Other Contract Services for providing resources to deliver on service level expectations. Parks Maintenance Parks Maintenance has been working to provide safe and reliable parks facilities for appropriate use by the community through daily park site inspections, maintenance and infrastructure repair. Increased vandalism in the parks systems has caused unexpected maintenance and continue to take time away from the routine maintenance of our parks. Parks Maintenance is currently fully staffed and is working closely with the Parks and Recreation Department to provide recreational programming for Fitness in the Parks. Park turf renovation has been delayed due to increase use of the parks and the community’s reliance on the parks for business and social activities. Swim Center Maintenance This program is categorized as yellow due to rising chemical costs, CDC recommendations for sanitization levels, and increased reliance on electrical energy due to the failure of a natural gas co- generation equipment that is planned to be replaced with solar panels. The operating budget will need to be increased during the next financial plan to address the rising cost of operations. The Swim Center is anticipated to finish the year over budget and will have to rely on reallocated funding from other Public Works operating programs to avoid service level impacts. Resources allocated to the swim center will continue to be monitored and additional resource needs will be assessed and presented with the 2021-23 Financial Plan. Urban Forest Services The City Arborist/Urban Forest Supervisor recently retired and one of the Urban Foresters has stepped into the supervisor role on an interim basis while the City evaluates the direction of the program. This program has completed all clearance pruning work this past summer for the slurry seal road maintenance project, as well as area pruning, and responding to service requests. The program is keeping up with the workload by utilizing additional contract funding allocated from Fiscal Year 2018- 19 carry over. Facilities Maintenance Facilities Maintenance is currently down one staff member which equates to a 25% reduction in this program operating costs. The program supervisor is the Acting Maintenance Operations Manager, and the recruitment for a contract technician was unsuccessful. Currently the program is outsourcing more work to contractors to manage workload. As facility square footage, complexity of building systems, and work requests increase, response times and preventative maintenance must be adjusted given static resources. The Facilities Maintenance team was heavily impacted this year by COVID and did a large amount of work to improve the facilities to protect employees and community members against the virus. The program maintains approximately 230,000 square feet of buildings with four technicians in the program under regular staffing levels. Streets & Sidewalk Maintenance 54 Streets Maintenance is currently working in pavement zone 7, with the expectation of having all work completed by end of 2021. This work includes asphalt patching, sidewalk repair, sign replacement, and curb painting. As of November 2020, Streets completed all work in pavement zone 6 in addition to annual storm prep work (cleaning of rock guards, delivering sandbag piles, etc). During rain events, the Streets Maintenance Program performs storm patrol and responds to numerous service requests. Additionally, the program also completes trash and green waste management for the corporation yard and manages the metal recycling program. The Streets Maintenance Program has also provided traffic control support for numerous demonstration this year and enhanced downtown maintenance and cleaning in support of the City’s Meta Goal resulting in increased overtime expenditures. This program will likely exceed the budgeted amount for overtime but will reduce expenditures in other areas to keep work efforts in alignment with program budgets. Traffic Signals & Lighting Safe and efficient traffic signal operations have been maintained through regular preventative maintenance, repairs to damaged traffic signal equipment, and ongoing refinements to traffic signal timings and equipment, including ADA upgrades for pedestrian push buttons. Six additional streetlights were installed this year and two pilot solar installations have been installed at locations where existing electrical connections were damaged. The department has plans to proceed with pilot solar installations for two upcoming capital projects in 2021. Fleet Maintenance This program is responsible for purchasing, outfitting, maintenance, and repair of the 340 City owned assets. Other responsibilities include emissions reporting, maintenance of the Corp Yard fuel pumps and car wash, hazardous waste handling and disposal, and parts inventory. This division is categorized as yellow because Fleet continues to experience a backlog of work due to prolonged staff vacancies, and an increase in vehicle breakdowns and accidents. Fleet Maintenance is now fully staffed with the exception for the Fire Department Mechanic’s Helper position who spends 20% of their time working in the PW Fleet program. Staff performs on average 45-60 preventative work orders each month, along with repairing assets that are a result of unscheduled breakdowns. However preventative maintenance work on low-use vehicles and trailers is often deferred to keep up with the maintenance and repair of critical assets like police and specialty vehicles. Outside vendors and overtime work is assisting the program keeping up with the current demand, which is why the program was identified with the yellow designation. Fleet Maintenance has recently purchased 6 new hybrid SUV police patrol vehicles. The first is near completion, which has taken longer than expected due to the change in design associated with the new hybrid model. CIP Engineering The CIP Engineering Program continues to deliver the FY 19-20 Capital projects funded for construction. Several time sensitive projects have recently been completed, including the Marsh Street Bridge Replacement Project, City Facilities and Fire Station 1 HVAC replacements, South Hills Radio Side Upgrades and the Bullock Lane CMP Replacement. Staff continue to review and inspect private development and encroachment permitted projects for conformance to City Standards, including San Luis Ranch, Righetti Ranch, and other development projects as development activity reaches unprecedented highs. The program had three retirements and a resignation in December 2020. To address these vacancies, contract services has been activated while recruitments are under way and anticipates being fully staffed by February 2021. Also, an approved additional contract employee (funded by Development Services revenue) will further enhance the program’s ability to meet its performance measures. 55 Transportation Planning & Engineering The Transportation Planning & Engineering Program has continued progress on enhancing accessible crosstown traffic circulation, while tackling a myriad of new challenges as part of the City’s COVID-19 response effort. As part of the City’s “Open SLO” program, the Transportation Program led efforts to repurpose public street and sidewalk space to facilitate the expansion of outdoor restaurant service and other business activities. Staff has facilitated installation of 40 temporary parklets and numerous sidewalk dining areas, with approximately 40 parklet locations upgraded to a semi-permanent design. Significant progress has been made with several key transportation projects in the first half of the 2020- 21 fiscal year, including breaking ground on the Railroad Safety Trail (Taft to Pepper) project, completing design work for the Tank Farm/Orcutt Roundabout project, implementing several complete street and neighborhood traffic calming elements as part of the 2020 roadway sealing project, development of the City’s first Active Transportation Plan, and numerous efforts to support planning and infrastructure review for private development. While the Program has made significant progress on many fronts and is fully staffed with full-time staff, the team currently has two intern vacancies and one vacant part-time contract position. These positions have not been filled due to the limited number of staff that are currently able to work from City offices. These intern and contract staffing typically completes traffic data collection, red curb permits, and neighborhood traffic studies. To address this required work, staff will use on-call consultant support funded by salary savings from these vacancies. Stormwater & Flood Control The Wastewater Collections Program in the Utilities Department is fully staffed and is able to clean the storm drain network to ensure that water is conveyed to the creek or other drainage areas and is not backing up and flooding City streets. The downtown core is the priority and to ensure this area has the storm drain system fully cleaned staff began storm drain system maintenance work in August. Working in the downtown core requires additional time and logistics due to the number of parked cars that typically access to the storm drain system. Street sweeping is an effective way to reduce the amount of pollution moving through the storm drain system. Street sweeping in the downtown occurs five days a week, with the remainder part of the City being swept once a month. Additionally, implementation of trash capture devices in the City’s storm drain network, as required by the Regional Water Quality Control Board is underway. 56 Transit Division (Public Works Department) Parking Division (Public Works Department) Work Program Evaluation Parking The Parking Fund continues to soundly operate and fund adjustments are recommended in this report to. The fund has been able to make the necessary adjustments to meet the goals set forth at Supplement, while adjusting practices during the pandemic to help incentivize customers and the employee base to return to the downtown. Revitalization efforts have greatly impacted the Parking Fund, which will look to other methods to rebolster the working capital the fund had available pre- pandemic. Design elements for the Palm Nipomo Parking Structure are being finalized and staff continue to monitor the financial feasibility and the timetable to launch the project. Increased construction costs will require additional debt financing. Staff are working to present these updated figures as part of the next Financial Plan. CIP projects to upgrade and improve on-street meters have transitioned to replacement of the meters with pay-stations that will open the sidewalks, creating additional mobility for pedestrians. Planned improvements to the elevator at the Marsh Street Structure will begin in February, with structural maintenance improvements to all three structures beginning by the summer of 2021. Parking Services will also look to launch mobile based payment application for on-street parking in the spring and will initiate a pilot test of gateless parking at the New Palm Parking Structure (919 Palm Street). Virtual Residential, PROX and DROP permits will also be evaluated over the summer for possible launch in Fall of 2021. Work Program Evaluation Transit Operations and Maintenance The Transit fund is largely operating as expected. There are however several significant impacts looming in the second year of the financial plan that will affect the program. First, staff is working to wrap up negotiations on the first of three possible extensions with First Transit. Early indications point to a difference of approximately $40,000 to 60,000 than what was originally budgeted. Secondly, staff is also working to wrap up negotiations with Cal Poly for a new long-term transit subsidy agreement. Early indications point to additional funding for more transit service. Finally, staff is working on the transition of the City’s diesel transit fleet to electric transit buses. Given costs of electric buses, the program will likely need to use unappropriated transit fund balance. 57 Utilities Department Performance Measure Update Target FY-21 FY21 Mid-Year Update Drinking Water and Wastewater Treatment Compliance Rate 100% Drinking Water Treatment: 100% Wastewater Treatment: 90% The Water Treatment Plant has remained in compliance with all State and Federal Drinking Water Standards which is the goal for this measure. The WRRF followed effluent and receiving water requirements for 90 percent of the first six months of fiscal year 2021. Non-compliance resulted from exceedances of salts or disinfection by-products and because of COVID related impacts that have been resolved but remain under investigation. The salt and disinfection by-products violations will be addressed by the WRRF upgrade. Most water quality objectives were met during this time, including the annual toxicity test which measures the impact of the WRRF’s effluent on San Luis Obispo Creek. There have been no visible or otherwise quantifiable impacts on receiving water quality. Safety – Incident Free Operations 0 5 Utilities has had a total of five incidents in the previous six months. Three of the injuries resulted in first aid by a medical professional. One incident was a motor vehicle accident where a citizen struck the operators vehicle, resulting in no injuries. The fifth incident resulted in restricted duty for the operator, due to a fall. While the goal is to have zero incidents, the Department will be reviewing this performance measure to possibly identify a more realistic figure in the next Financial Plan. Self-Generated Electricity at the WRRF 5% increase 3 % decrease The Water Resource Recovery Facility utilizes an on-site cogeneration unit to create electricity for the plant. Currently, over one Gigawatt of electricity is created by this process. Staff is investigating process improvement and expansion strategies to increase onsite electricity generation. The goal for this measure is an annual increase in amount of energy produced over 2019-20 base year. Energy produced onsite in 2020 is projected to be 1.0 Gigawatts, which represents a three percent reduction over 2019. This decrease is primarily related to COVID-19 related plant loading changes. There was also a (five year) major maintenance event, which required two weeks of system down time. Capital Improvement Projects Completion 100% On Target The Engineering and Planning Section includes a three-member team and are responsible for managing the Capital Improvement Projects for the Department. Utilities performance measures in the approved capital improvement workplan is expressed in the number of projects on schedule during the 2019-21 Financial Plan. Utilities is on target to meet this measure, with 98% of the capital improvement projects listed on the Financial plan on schedule, and approximately $107 Million in cumulative executed purchase orders from the Water, Wastewater, and Whale Rock Funds. Workload Measure 2020-21 Target As of Dec 30, 2020 Public Education tours/events 111 15 Safety Trainings 175 38 Water delivered (acre feet) 6,050 2,975 58 Work Program Evaluations Water Administration The Water Administration division is responsible for overall management of the City’s drinking water program. This section is comprised of administrative, planning, engineering, and support staff that work together with operations staff to ensure safe drinking water is provided to the community. In addition, this section is responsible for planning efforts designed to ensure adequate water supplies are available for the current and future needs of the City. Major work efforts of this section are currently centered around the development of a Groundwater Management Plan, continued work to transition from surface water permit to surface water license at Whale Rock and Salinas reservoirs, and the development and execution of large CIP projects at the City’s water treatment plant and within the water distribution system. Water Source of Supply The Source of Supply budget within the Water Division exists to fund programs related to the City’s surface water sources, groundwater, and recycled water. This budget is administered by staff at the water treatment plant, Whale Rock Reservoir, the Water Quality Lab, and Water Resources. Most of the Source of Supply budget is utilized to fund the delivery of raw water to the City’s water treatment plant and to fund associated capital repairs and projects at the City’s three surface water reservoirs and groundwater program. Reservoir Operations This three-member section is responsible for maintenance and operation of Whale Rock Reservoir, 18 miles of raw water pipeline, and two pump stations that deliver untreated water to the Water Treatment Plant. CIP projects are planned to maintain, replace, or upgrade infrastructure to meet the goals of source water quality and consistent water delivery. At the request of the Division of Safety of Dams; Plans and Specifications for Spillway Underdrain Repairs are being produced and the first draft of the Emergency Action Plan update for Whale Rock Dam has been drafted. This plan is being reviewed internally by staff. Ongoing CIP aimed at maintaining infrastructure safety and reliability includes replacement pressure relief valves for Pump Station B and 2,000 feet of fence- line replacement around the reservoir which began December 2020. Water Treatment This 10-member section of the Utilities Department is responsible for the operation and maintenance of the City’s drinking water plant. In the first half the current fiscal year, the water treatment plant has provided the City’s consumers and Cal Poly with over 2,975 acre-feet of safe, reliable, potable drinking water. The water treatment plant is in construction on the Water Energy Efficient Project. Reflecting the City’s fiscal, social and environmental commitment to sustainability; the Water Energy Efficiency Project is an exciting combination of necessary water treatment plant infrastructure upgrades with energy efficiency and energy savings. The water treatment plant’s Ozone disinfection system, Supervisory Control and Data Acquisition (SCADA) system, Plant Water Pump Station are being replaced and Variable Frequency Drives are being added to the Transfer Pump Station. Construction is scheduled to be completed in August 2021. Water Distribution Water Distribution is currently a 9-person crew responsible for the operation and maintenance of the City’s Water Distribution system. This network of pipes, tanks, pumps, valves, meters, and hydrants convey the City’s water from the Water Treatment Plant throughout the City to be used for fire protection and domestic use. This system is currently expanding due to new development. A Capital Improvement Project is scheduled to begin in January 2021 which will improve water delivery and quality to the Terrace Hill pressure zone. In the first half of the year the crew has performed 3 water main repairs, 22 service line repairs, performed 3,266 work orders related to establishing water service for new customers, and replaced 525 aging water meters. 59 Water Resources The Water Resources division (3 FTEs) was largely vacant for most of the first half of the fiscal year due to recent promotions by the program’s two Water Resources Technicians and the Water Resources Program Manager. The division filled the Water Resources Program Manager position successfully in November 2020 and will fill the two vacant Water Resources Technician positions during the first quarter of 2021. This newly assembled team will focus its efforts on development o f local groundwater resources, expansion of the City’s use of Recycled Water, and expansion of the City’s Water Conservation programs. The team will also be instrumental in drafting the 2020 Urban Water Management Plan which is scheduled for council review and adoption in June 2021. The department recently finalized the separation of solid waste related work from the Water Resources section by converting a vacant Water Resources Technician position into a Solid Waste and Recycling Coordinator position – this position will still function within the Utilities Department but is funded by solid waste related AB939 fees. This organizational change and alignment of resources was done to better prepare the City to address environmental, regulatory, and service level considerations that have emerged over the past few years and are expected to continue. Wastewater Administration/Engineering The Wastewater Administration/Engineering program leads, evaluates, and provides guidance and direction for effective water resource management for the various wastewater programs. It provides strategic and long-term planning and engineering for the wastewater and recycled water production. Major work efforts of this section are currently centered around the upgrade of the Wat er Resource Recovery Facility, the sewer lateral rebate program, and completing the transition of Citywide Stormwater coordination to the Environmental Programs section. Wastewater Collection This nine-member division of the Utilities Department is responsible for the operation and on-going maintenance of the City’s wastewater collection system, with two staff members dedicated to the maintenance of the City’s storm drain systems. In its first year of operation, the lateral rebate program has provided financial assistance to homeowners who chose to replace their sewer lateral, providing rebates between $2,000 and $3,000. In total, over 119 lateral replacements within the collections systems were made as part of this program. The sewer lateral inspections upon sale or transfer ownership requirements have resulted in the disclosure of sewer lateral conditions between buyers and sellers prior to escrow closing, which has resulted in more private sewer lateral replacements than anticipated. These programs contribute to reduced weather flow into the wastewater collection system, meet regulatory requirements, protect human health, and preserve capacity. Environmental Programs Environmental Programs oversees Pretreatment Industrial Compliance for about 300 industrial users within the City, including six Significant Industrial Users. The Program is also responsible for much of the City’s Stormwater Program and took over coordination duties from Administration in the Fall of 2020. This 3-member Program underwent significant staffing changes in the past year – it permanently hired an Environmental Programs Manager in July 2020 and two new Environmental Compliance Inspectors, one in March and one in December of 2020. Major work efforts center around da tabase updates for both stormwater and pretreatment; evaluating compliance pathways for Pathogen Total Maximum Daily Load (TMDL) reduction in San Luis Obispo Creek; working with Public Works and Community Development on achieving compliance for stormwater construction inspection reporting and site inventories; and finalizing the transition of stormwater program coordination duties to Utilities. Environmental Programs is preparing to implement new pretreatment software in the coming fiscal year. Water Resource Recovery Facility This 13-member section of the Utilities Department is responsible for the operations and maintenance of the City’s Water Resource Recovery Facility (WRRF) and recycled water production. The WRRF is in 60 the second year of a three-and-a-half-year-long construction project to address new state regulatory requirements, aging infrastructure, additional capacity to meet the City’s General Plan, and provide a community asset. The Facility has completed an energy audit which will assist in reducing energy demands of the new treatment processes. The WRRF continues to collaborate and support Cal Poly’s on-site research facility. Utilities Revenue Utilities Revenue is staffed with two full-time positions and provides support to 15,887 service connections. This includes billing, payment collection, past due processing, and customer service. During the first six months of the fiscal year, this division spent much of its time accommodating customers impacted by the Covid-19 economic downturn. This included implementing new temporary policies such as waiving more late charges, suspending shut-offs for non-payment, and suspending sending closed accounts to collections. Utilities Revenue is also preparing to upgrade to the most current version of our Utility Billing Software in the new calendar year. Water Quality Lab The 5-member Water Quality Laboratory (WQL) is an Environmental Laboratory Accreditation Program (ELAP) State Certified Laboratory which performs sampling and/or analyses in support of City services including wastewater, recycled water, groundwater, drinking water, San Luis Obispo Creek watershed, protecting public health and biosolids. The WQL operates under regulations ensuring compliance with Federal, State, local regulations, and ELAP. The WQL is in the process of recruiting a Laboratory Analyst with an expected hire date of early 2021. The WQL has expanded service to the City by taking on the weekly routing Drinking Water sampling and leading the sampling and monitoring of San Luis Obispo Creek to meet the Waste load Allocation and Attainment Program (WAAP) requirements. As part of the Covid-19 response, the WQL has been active in procurement of Citywide personal protective supplies and the onsite production of hand sanitizer. Solid Waste Recycling This Program was created in July 2019 to manage the City’s solid waste program and associated budget. The program will ensure compliance with Senate Bill 1383, Assembly Bill 939, and other emerging solid waste regulations. The section also manages the solid waste contract, public outreach, and relationships with external partners such as San Luis Garbage and the IWMA. The section is managed by a newly established Solid Waste and Recycling Coordinator and supervised by the Utilities Business Manager. Over the past year, the section established a permanent Coordinator position, adapted to remote management of the construction and demolition waste management program, participated in Green Team and Climate Action Plan planning, became a participating member of the IWMA Local Task Force, and continues to be the liaison to the community and Council for questions regarding solid waste and recycling. The use of AB 939 fees is restricted to recycling and waste diversion related work and outreach provided to the residents of San Luis Obispo. Facets of the program not directly related to diversion should not be funded by AB 939 fees and will be paid for by the General Fund from solid waste franchise fees. Safety The Utilities and PW safety training program for 2020 was disrupted by COVID-19 in several ways. Ten in person CJPIA trainings were cancelled, CPR/First Aid training for WTP and the WRRF are postponed until 2021, and contact hours for Operator re-certification programs were minimized. The Utilities and PW departments were able to accomplish required training online such as annual OSHA trainings. Within the past 5 months, 217 required annual online trainings in total have been completed virtually. New hire trainings continued in a one-on-one format, with social distancing practices in place. Weekly COVID-19 protocol trainings for UT facilities occurred in person and virtually. 61 Section D: Meta City Goal Update 62 Meta Goal Update As part of the Supplemental Budget adoption, the Council concluded that the City’s top priority for 2020- 21 is to protect the public health of San Luis Obispo, provide essential services, and assist the community in economic recovery via a Meta City Goal. To provide Council with meaningful updates on the goal, staff implemented a detailed tracking mechanism to monitor Meta Goal actions. In addition to the quarterly reviews, staff is now providing Council with detailed monthly Major City Goal updates. To see all the ways that the City is supporting economic recovery and resiliency, visit here. Below are just some of the accomplishments over the last six months. •Open SLO Project •Sidewalk Dining •Temporary Parklets •Downtown Vacancy Taskforce •TIPP-FAST •Additional Cleaning for Health Safety •Business Ambassador Program •Work on Open Space Improvements •Fitness in the Parks •Community Hotline •Enhanced Police Support •Partnership Programs •Grant Programs •Fee and Tax Deferrals •Parking Modifications •Shop Local Promotions •Adjusted Childcare Options •Parks & Rec Programs •Wastewater Sampling with Cal Poly •Virtual Holiday Activities •Fitness Clinics to Community •Small Business Relief Funds 63 Section E: Recent Financial and Revenue Reports 64 CALIFORNIA FORECAST SALES TAX TRENDS AND ECONOMIC DRIVERS DECEMBER 2020 888.861.0220 | solutions@hdlcompanies.com | hdlcompanies.com Delivering Revenue, Insight and Efficiency to Local Government Since 1983 HdL provides relevant information and analyses on the economic forces affecting California’s local government agencies. In addition, HdL’s Revenue Enhancement and Economic Development Services help clients to maximize revenues. Lake Tahoe, CA HDL CONSENSUS FORECAST – DECEMBER 2020STATEWIDE SALES TAX TRENDS Autos/Transportation 5.9% | 3.0% The retail auto industry bounced back this summer and completed a V-shaped recovery by posting positive results for the first time since the beginning of the pandemic. Higher income households bankrolled the unexpectedly rapid comeback with savings that have accumulated over the last year. Record low interest rates, a recovering economy and contagion fears surrounding ridesharing and mass transit are expected to support the market in the near-term. Vehicle prices are also rising with the ongoing shift in buyer preference toward larger vehicles compounded by the scarcity of many popular models. RV, boat and niche vehicle sales are all exceptionally strong. Fleet sales, however, remain depressed and will take longer to recover. Building/Construction 2.9% | 3.5% Spending for home improvement projects increased again as previously postponed remodeling jobs got underway. The Bay Area grew 2% overall as the region bounced back from having projects shutdown at the onset of the pandemic. Central and Northern California reported steady activity while Southern California saw a positive trend. Looking ahead, the forecast sees growth as employment migration gains momentum from remote workers seeking cheaper housing options. This will lower Bay Area construction as commercial project levels have declined already. Construction in Southern California is expected to remain steady as existing projects move toward completion. The statewide trend of declining construction permit issuance is expected to begin a reversal within two years. Business/Industry -4.0% | 6.7% The new order index is moving upward but manufacturers report that COVID-19 related absenteeism, qualified worker shortages, sanitization protocols, inventory and imported parts delivery issues collectively reduced production capacity. Full recovery is not anticipated to begin until the second half of 2020-21 when vaccines become widely available. Recent surges in computers and communication equipment to facilitate work-at- home initiatives are expected to level off with further declines from industrial machinery/equipment, fabricated metal products, manufacturers serving food processing, printing/publishing and petroleum industries. Some improvements are projected from companies serving the logistics, construction, transportation and agriculture segments. Each jurisdiction’s experience will differ with the specific character and size of its individual business/ industrial tax base. Food/Drugs 6.8% | 3.0% Improvement over the past year in this group’s tax revenues is largely twofold. People ate more at home due to limited dining out accessibility and venue options, thus, convenience stores and grocers reported strong activity. Also, cannabis operators expended the number of permitted locations and functioned as essential businesses while demand for their products continues to climb. Short term, these segment specific trends are expected to trigger strong sales. By mid next year, increases moderate as retailers and eateries reopen their doors to expectant customers. Fuel/Service Stations -9.3% | 16.5% While crude barrel prices and the cost of a gallon of gas have begun to slowly rise, recent COVID-19 cases continued to trend up which has weakened retail demand and gallons sold. Prices at the pump are still more than a dollar less per gallon than the same quarter last year. Vehicle and air travel have stagnated. A combination of lower fuel prices, downward pressure on consumption (tied to less vacations and road trips), along with additional shelter in place restrictions through 2020 yields a forecast reduction in sales tax for this category in the coming two quarters. The anticipated roll out of the vaccine will increase consumer and business travel by next spring with effective deployment leading to solid growth for this segment in the second half of 2021. General Consumer Goods 1.4% | 6.9% Core retail segments continue to show large contractions in sales. Apparel heavy categories accounted for the brunt of declines making up roughly 75% of the group’s total variation from prior year third quarter collections. Tax volumes from discount department stores expanded as consumers opted for fewer stops to shop across multiple product lines. Diminished foot traffic, continued in-store limitations and an accelerated shift to digital shopping puts more pressure on brick-and-mortar retailers. The pandemic altered habits in ways that demonstrate permanent repercussions on shopping behavior as the economy recovers. Recent regional stay-at-home orders are prompting additional negative impacts on physical stores, dampening the outlook. Our forecast anticipates a rebound in fiscal year 2021-22 following a wide distribution of vaccines which prompts a return to more normalized in-store shopping experiences. Local tax receipts are not expected to return to pre-pandemic peaks until fiscal year 2022-23. 2020/21 | 2021/22 HdL Companies | hdlcompanies.com TOTAL 2.1% | 7.5%2020/21 | 2021/22 2020/21 | 2021/22 Restaurants/Hotels -15.% | 26.5% The ever-changing health regulations over the past nine months have created overwhelming challenges for the hospitality industry. The late December restriction orders could mean more restaurants closing their doors permanently. Quick service continues to fair better than traditional sit-down dining establishments. Outdoor options could be returning sooner rather than later due to a successful challenge of those restrictions by the California Restaurant Association. The forecast assumes some restaurants and hotels will not survive this second round of forced hibernation. An uptick in travel is not expected to begin until spring and will take years to reach 2019 pre-pandemic levels. HDL CONSENSUS FORECAST – DECEMBER 2020STATEWIDE SALES TAX TRENDS TOTAL 2.1% | 7.5%2020/21 | 2021/22 HdL Companies | hdlcompanies.com 2020/21 | 2021/22 Proposition 172 projections vary from statewide Bradley-Burns calculations due to the state’s utilization of differing collection periods in its allocation to counties. HdL forecasts a statewide increase of 0.80% for Fiscal Year 20/21 and 8.89% for 2021/2022. State and County Pools 19.3% | 3.1% Recent data showed staggering tax escalations into the pools during the last four quarters, a confluence of full deployment of Wayfair’s marketplace facilitator AB147 compliance, accelerated movement to online spending linked to COVID-19 store closures and use of federal stimulus for at-home needs. Thus, a new baseline of pool’s taxes is now in place for future projections. Early holiday results demonstrated sizeable growth in ecommerce activity during the Thanksgiving weekend. Sheltering directives happening in most parts of California are intensifying more shopping by way of computers and mobile devices. Trends in our forecast note many household spending patterns dating back to the pandemic arrival are now permanent, however, future pools gains are expected to subside to levels a bit higher than pre-Wayfair historical outcomes. 2020/21 | 2021/22 NATIONAL AND STATEWIDEECONOMIC DRIVERS Beacon Economics | BeaconEcon.com U.S. Real GDP Growth 12.0% | 3.4% The U.S. economy’s record-breaking expansion peaked in February 2020, and with the emergence of the COVID-19 pandemic, the economy hit rock bottom in April. This two-month pandemic-driven downturn was the shortest in American history. Even though the economy hasn’t returned to its pre-pandemic trend, this has been the fastest recovery in history with over 33% real GDP growth in the third quarter of this year. Consumer spending drove most of the growth in the third quarter, and solid expansion occurred throughout the economy with the exceptions of investment in nonresidential structures and government spending. As of the third quarter, the economy was only 4% below long-run growth trends having recovered three-quarters of the output it lost from February to April. A genuine return to pre-COVID consumer demand cannot occur until the spread of the virus is controlled. There is downside risk in the short-term due to the continued spread of the coronavirus, but the expansion of the economy will pick up speed in the spring as millions of people are vaccinated and a semblance of normality returns to consumer behavior. U.S. Unemployment Rate 6.8% | 4.9% Following the economic downturn in March and April, the performance of the labor market has been the weakest aspect of the economic recovery. As of November 2020, there were 9 million fewer workers employed in the US compared to February 2020 and commensurate increase in the unemployment rate from 3.5% to 6.7%. While the current unemployment rate is a great improvement since the highs reached in April (14.7%), the current figure has been aided by the exodus of 4 million workers from the labor force. The labor market recovery should gather momentum in the spring as the worst effects of COVID-19 are behind us. This job creation will place downward pressure on the unemployment rate, although the return of workers to the labor force will slow this trend. CA Total Nonfarm Employment Growth -3.8% | 5.5% Since the record drop in employment in April, California’s labor market has underperformed compared to the U.S. labor market. The number of jobs contracted by 6.5% nationally since February while in California the number of jobs fell by 8%, and only 46% of the jobs lost by April have been recovered in the state. As of November, there were 1.4 million fewer workers employed in the state than there were in February. One key feature of the labor market recovery has been the extent to which job losses have disproportionately impacted low-income workers. Employment in jobs that pay more than $60,000 per year have shrunk just 1.3% in the state, but middle-wage jobs (with annual wages ranging from $27,000 to $60,000) and low-wage jobs (less than $27,000 per year) have been hit much harder. Middle-income jobs declined by 8.1% between January and November whereas low-wage jobs fell by 28.1%. Because the recovery in California has lagged the national economy to this point, this should mean that, once a vaccine is widely distributed and some normality resumes in 2021, employment growth in California will outpace the growth in the national economy. CA Unemployment Rate 8.8% | 5.7% California’s unemployment rate fell to 8.2% in November – down from 9.0% in the previous month and a peak of 16.4% in May – but remains elevated relative to the 6.7% rate in the U.S. overall. This decline is a positive sign but is as much due to a contracting labor force as it is to employment gains. In November, there were 630,000 fewer people looking for work in the state compared to February 2020. Under normal circumstances, the state’s labor force would have expanded over this period. The very short-term outlook (through February 2021) is not positive as the significant spread of the coronavirus in the state and resulting restrictions on businesses place downward pressure on job creation. But as the vaccine rollout picks up speed in the spring, the unemployment rate should fall significantly as the year progresses. CA Median Existing Home Price $583,320 | $618,930 The state’s housing market has been by far the brightest spot of the 2020 economy. Single family home prices have surged compared to last year, growing by 13% percent from Q3 2019 to Q3 2020. As of Q3 2020, year-to-date sales of new and existing homes were around 10,000 units lower compared to the same point in 2019, though figures from Q4 will likely reveal that more homes have will have sold in 2020 than in 2019. This is an extraordinary feat given the performance of the state’s labor market this year. The strong performance of the state’s housing market is likely driven by two factors. First, typical homebuyers (higher income earners) have been less affected by the labor market fallout. Second, mortgage rates are at historically low levels, spurring purchasing activity. That said, the growth in home prices this year is unsustainable so expect interest rates to tick up at some point in 2021. CA Residential Building Permits 111,780 | 117,780 The increase in home prices this year have once again brought California’s housing shortage to the fore. Until the supply of housing picks up considerably, there will be upward pressure on home prices in the state. As of September, around 7,500 fewer permits were issued in the state compared to the same point in 2019. This will do little to help the state’s chronic housing shortage, but the expectation is that housing permits will rebound in 2021 as the economy continues to recover. 2020/21 | 2021/22 2020/21 | 2021/22 Beacon Economics LLC 5777 West Century Boulevard, Suite 895 Los Angeles, CA 90045 Telephone: 310.571.3399 Fax: 424.646.4660 Beacon Economics has proven to be one of the most thorough and accurate economic research/analytical forecasting firms in the country. Their evaluation of the key drivers impacting local economies and tax revenues provides additional perspective to HdL’s quarterly consensus updates. The collaboration and sharing of information between Beacon and HdL helps both companies enhance the accuracy of the work that they perform for their respective clients. HdL Companies 120 S. State College Blvd., Suite 200 Brea, CA 92821 Telephone: 714.879.5000 • 888.861.0220 Fax: 909.861.7726 California’s allocation data trails actual sales activity by three to six months. HdL compensates for the lack of current information by reviewing the latest reports, statistics and perspectives from fifty or more economists, analysts and trade associations to reach a consensus on probable trends for coming quarters. The forecast is used to help project revenues based on statewide formulas and for reference in tailoring sales tax estimates appropriate to each client’s specific demographics, tax base and regional trends. 714.879.5000 | hdlcompanies.com Performance by Community OCC ADR RevPAR Supply Rooms Sold Room Revenue San Luis Obispo $5,226,46336,03072,270$72.32$145.0649.9% Lodging Performance San Luis Obispo, November 2020 % chg YOY ▼ -24.1% ▼ -23.5%▲ 2.8% ▼ -26.1% ▼ -0.8% ▼ -25.5% OCC ADR RevPAR 2016 2017 2018 2019 2020 $80 $93 $92 $85 $84 $155 $146 $145 $138 $135 51.6% 63.4% 63.9% 61.9% 62.4% Five-Year Trend November, SLO County 2014 2016 2018 2020 2022 $0 $500,000 $1,000,000 12-Month Movin..$456,314 $430,594 $238,907 $39,198 $252,672 $69,677 $850,775$857,422 Transient Occupancy Tax 12-month moving average, July 2011 to October 2020 Arroyo Grande Atascadero Grover Beach Morro Bay Paso Robles Pismo Beach San Luis Obispo Unincorporated OCC ADR RevP.. AtascaderoCambriaFive CitiesMorro BayNorth Coast North CountyPaso RoblesPismo BeachSan Luis ObispoSan SimeonSLO CountySouth County $85$80$52$72$108$74$69$83$67$96$111$56 $164$155$127$145$193$136$132$166$138$180$193$121 51.8%51.6%41.1%49.9%55.9%54.7%52.4%50.3%48.8%53.6%57.5%46.2% Performance by Community November 2020 5% San Simeon 24% San Luis Obispo 30% Pismo Beach 16% Paso Robles 8% Morro Bay 11% Cambria 5% Atascadero © 2020 Mapbox © OpenStreetMap Hotel Room Revenue % share of total revenue, November 2020 Los Angeles Fresno/Visalia San Francisco/Oakland/San Jose Bakersfield Monterey/Salinas Sacramento/Stockton/Modesto Santa Barbara/Santa Maria/San Luis O.. San Diego NA Chico/Redding 26% 24% 16% 10% 8% 6% 5% 3% 1% 0% Top-10 Origin Markets % share of tracked visits to San Luis Obispo County, November 2020 San Luis ObispoPismo Beach & Shell BeachPaso RoblesMorro Bay46 West Paso Wine CountryCambriaGrover BeachAvila BeachArroyo Grande46 East Paso Wine CountryAtascaderoCayucosOceanoTempletonLos Osos & Baywood ParkNipomoMontana de OroSLO CAL Regional AirportSan SimeonEdna ValleyHarmonySanta MargaritaCrestonCholameRagged PointSan MiguelShandon 0.0%0.1% 0.1%0.1%0.1%0.2% 0.3%0.5%0.7%0.8% 0.9%1.2%2.0%2.5% 2.5%3.2%3.8% 4.2%4.7%4.8%5.3%5.5%5.9%9.5%11.9% 14.4%14.9% Primary Destination (click on a destination to see cross visitation) % share of visitor arrivals to San Luis Obispo County, November 2020 San Luis ObispoPismo Beach & Shell Beach Morro Bay Paso Robles Grover Beach Avila Beach Arroyo Grande Cambria 46 West Paso Wine Country Los Osos & Baywood Park Atascadero Cayucos Oceano SLO CAL Regional Airport 46 East Paso Wine Country Templeton Nipomo Montana de Oro Edna Valley Santa Margarita Harmony San Simeon San Luis Obispo 0.1% 0.1% 0.4% 1.0% 1.4% 1.6% 2.2% 2.2% 2.5% 2.7% 2.9% 4.1% 4.2% 5.1% 5.3% 6.0% 6.7% 6.8% 9.8% 12.7% 22.3% Year 2020 Month November Location San Luis Obispo Source: STR, Arrivalist, and Visit SLO CAL.Curated by San Luis Obispo County | Calendar Year Performance Pismo Beach & Shell BeachSan Luis ObispoMorro BayPaso RoblesAvila BeachGrover BeachCambriaCayucosArroyo GrandeAtascadero46 West Paso Wine Country46 East Paso Wine CountryOceanoLos Osos & Baywood ParkTempletonNipomoMontana de OroEdna ValleySLO CAL Regional AirportSan MiguelSan SimeonCrestonHarmonySanta MargaritaShandonRagged PointCholameCalifornia Valley 0.0%0.0% 0.1% 0.1% 0.1%0.1% 0.1% 0.2% 0.2%0.3% 0.5% 0.8% 1.1%1.2%1.4% 2.2%2.3% 3.0% 3.4%3.9% 4.5% 5.0% 5.2%5.8% 10.4% 13.1% 16.2%18.5% Visitor Arrivals by POI % share of tracked arrivals, Q3 2020 0M 10M 20M 30M 40M 50M 60M RESTAURANTS/QSRs RETAIL LODGING SUPERMARKETS OIL/GAS OTHER TRAVEL & ENTERTAINM WHOLESALE CLUBS MISC. SPECIALTY RETAIL DISCOUNT STORES HEALTH CARE 27.1% 20.7% 16.4% 8.0% 7.9% 5.5% 3.4% 1.9% 1.7% 1.5% Domestic Visitor Spending Trends Visa Card Spending, Q3 2020 OCC Average Daily Rate RevPAR Supply Rooms Sold Room Revenue $106,030,175576,836909,259$116.61$183.8163.4% Hotel Performance San Luis Obispo County, Q3 2020 Q3 Q3 66% 34% 1.9M 100% 0% 1.9M Total Visitation % of total visits, Q3 2020 Day Overnight International Domestic Fresno/Visalia Los Angeles San Francisco/Oakland/.. Bakersfield Monterey/Salinas Sacramento/Stockton/M.. Santa Barbara/Santa Ma.. San Diego Palm Springs Chico/Redding 30% 25% 13% 12% 6% 5% 5% 3% 0% 0% Top-10 Origin Markets % share of tracked visits, Q3 2020 Phoenix/Mesa Seattle/Everett Denver Dallas/Ft. Worth San Francisco Bay Area New York/Newark Los Angeles Basin Washington/Baltimore Portland, OR Chicago 20.1% 18.1% 14.1% 9.8% 7.1% 6.6% 6.3% 6.2% 5.8% 5.7% Top-10 Origin Markets by Air by origin & destination passengers, 2020 62,248 Enplanements & Deplanements Q3 2020 49.9% Deplanements 50.1% Enplanements $14,338,692 TOT Revenue San Luis Obispo County Year 2020 Quarter Q3 Note: filters represents available data to date. Source: Arrivalist, STR, VisaVue, Visit SLO CAL, Volaire, San Luis Obispo County Regional Airport, and Tourism Economics. Curated by Hotel Performance TOT Revenue Visitor Arrivals Previous Quarter After six months of expansion, room nights sold declined to 155K in November. This was 23% down from October and 16.9% below prior year. Hotel occupancy (51.6%) was hampered further by a 2.1% increase in supply relative to 2019. Despite the slowdown in demand, the $155 ADR was a 6.3% increase over prior year. This was the fourth consecutive month of YOY growth in ADR, bringing room revenue YTD to 22% below prior year. San Luis Obispo County hotels generated $4.2M in hotel occupancy tax in October, bringing the calendar year total to $30.2M – 19% below prior year. While all communities experienced YOY declines, the coastal cities continue to outperform other areas of San Luis Obispo County. With 76% of visitors to San Luis Obispo County traveling from within a 250-mile radius, regional travelers continue to generate the majority of travel demand. However, the share of visitors traveling from 250-500 miles increased from 6% in 2019 to 17% in 2020 indicating growth in regional fly-markets and that the drive market is expanding. The $209.5M Visa Card spending from domestic visitors in 2020Q3 (calendar year) was flat YOY, with 64% of the spending going towards restaurants, retail, and lodging. Pismo Beach increased its share in visitors to San Luis Obispo County from 17% in 2019 to 18.5% in 2020. Morro Bay and Grover Beach also registered notable increases in visitor share relative to Q3 prior year. In Q3 2020 (calendar year), San Luis Obispo County welcomed 1.9 million visitors – a doubling over Q2 but 12% below prior year. Domestic travel recovered to 10% below 2019 while international visitation continues to be suppressed at 97% YOY. Key Highlights While demand declined for the first time in six months, the average daily rate (ADR) increased 6.3% year-over-year (YOY). Nearly 2/3 of visitors stayed overnight this month, a slight decline from the 69% registered prior year with Thursday-Saturday arrivals seeing the most notable decrease YOY. Nine in ten visitors this month traveled less than 500-miles; however, an increase in share of visits from the 250-500-mile radius indicates that the drive-market is expanding. The number of travelers arriving through the airport increased by 45% over October but still significantly behind prior year (-47%). Summary Month November Year 2020 Sales Tax Update In Brief Top 25 producers In AlphAbetIcAl Order www.hdlcompanies.com | 888.861.0220 Q22020 San Luis Obispo San Luis Obispo’s receipts from April through June were 3.2% below the second sales period in 2019. Ex- cluding reporting aberrations, actual sales were down 19.0%.Double payments from business- es that had missing/partial pay- ments in 1Q20 was the main cause of the variance between cash re- ceipts and actual sales. Actual sales in all industry groups declined due to Covid-19 impacts, although loss- es were less than expected and again partially offset by continued robust growth from the countywide pool resulting from the Wayfair de- cision that required additional out of state companies to collect sales tax. The City’s allocation from the county pool increased 35.8%.The biggest hit to actual receipts came from a 33.2% drop in gener- al retail sales. Lower sales from all dining and hospitality categories depressed restaurants and hotels 45.5%. Fuel sales were off 48.5%, consistent with statewide trends. Business and industry lost 30.7%. New motor vehicle sales performed better than trends, dropping 4.2%.The Measure G transaction tax generated an additional $1,529,899, down 24.6% from the prior year.Net of aberrations, taxable sales for all of San Luis Obispo County declined 15.8% over the compara- ble time period; the Central Coast region was down 17.8%. San Luis Obispo Third Quarter Receipts for Second Quarter Sales (April - June 2020) Published by HdL Companies in Fall 2020 Air Vol Block Alfano Motorcars Mercedes Benz Chevrolet Coast BMW Nissan Cole Chrysler Dodge Jeep Cole Mazda Conserv Fuel Consolidated Electrical Distributors Costco Ferguson Enterprises Hayward Lumber Home Depot Hotel SLO JB Dewar Exxon Distributor Mccarthys Miners Ace Hardware Perry Ford Lincoln Volkswagen Ralphs Marketplace Rancho Grande Motors Buick Gmc Hyundai Subaru San Luis Obispo County Farm Smith Volvo Sunset Honda Tackle Warehouse Target Toyota San Luis Obispo Union Asphalt Vons $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 SALES TAX BY MAJOR BUSINESS GROUP 2nd Quarter 2019* 2nd Quarter 2020* Autos and Transportation General Consumer Goods County and State Pools Building and Construction Restaurants and Hotels Food and Drugs Business and Industry Fuel and Service Stations *Allocation aberrations have been adjusted to reflect sales activity $16,752,953 $18,083,198 7,225 7,885 2,691,614 2,261,477 $14,054,114 $15,813,837 2019-202018-19 Point-of-Sale County Pool State Pool Gross Receipts REVENUE COMPARISON Four Quarters – Fiscal Year To Date (Q3 to Q2) Measure G $8,485,460 $7,639,344 NOTESSales Tax Update2Q 2020 San Luis Obispo $0 $2,000 $4,000 $6,000 $8,000 SALES PER CAPITA * San Luis Obispo Q2 17 Q2 20 Q2 18 Q2 19 County California *Allocation aberrations have been adjusted to reflect sales activity 22% Autos/Trans. 22% Cons.Goods 19% Pools 12% Building 9% Restaurants 6% Food/Drug6% Bus./Ind.5% Fuel San Luis Obispo This Quarter*REVENUE BY BUSINESS GROUP *Allocation aberrations have been adjusted to reflect sales activity Q2 '20* San Luis Obispo SAN LUIS OBISPO TOP 15 BUSINESS TYPES** Business Type Change Change Change County HdL State*In thousands of dollars -10.5%-9.2%-9.9% 43.9 Auto Lease 3.9%7.0%15.9% 224.6 Building Materials -53.1%-53.2%-49.8% 148.5 Casual Dining -4.6%-12.2%8.7% 97.3 Contractors -15.3%-6.3%-12.1% 330.7 Discount Dept Stores — CONFIDENTIAL — -49.5%-50.8%-30.0% 70.4 Electronics/Appliance Stores -30.5%-30.2%-24.8% 58.2 Fast-Casual Restaurants 1.3%3.5%4.9% 53.2 Garden/Agricultural Supplies -3.8%7.8%8.5% 122.2 Grocery Stores -52.8%-41.7%-40.7% 46.3 Home Furnishings -4.2%-15.8%-2.3% 619.0 New Motor Vehicle Dealers -12.4%-15.8%-10.7% 102.4 Plumbing/Electrical Supplies -37.3%-22.0%-18.7% 57.7 Quick-Service Restaurants -49.8%-45.2%-43.5% 131.2 Service Stations 1.1%-11.0%3.2% 155.8 Sporting Goods/Bike Stores -24.0%-21.9%-25.9% 35.7% -19.0% 2,861.4 662.7 3,524.1 Total All Accounts County & State Pool Allocation Gross Receipts 29.4%28.9% -15.8%-16.3% ** Accounting aberrations such as late payments, fund transfers, and audit adjustments have been adjusted to reflect the quarter in which the sales occurred. Statewide Results Local sales and use tax receipts from April through June sales were 16.3% lower than the same quarter of 2019 after factoring for accounting anomalies and back pay- ments from previous quarters. This was the largest quarter to quarter de- cline since 2009. The drops were deepest in the San Francisco Bay Area, Central Coast and Southern California where de- clines in revenues from fuel, automobiles, general consumer goods and restaurants/ hotels were the most severe. However, despite a 14.9% unemployment rate that eclipsed the previous high of 12.3% during the great recession of 2010 and temporary business closures, the drop in sales was less than previously projected by most analysts including HdL. The high second quarter unemployment rates primarily affected lower wage service sectors which generate a smaller share of sales tax revenues. Internet connected knowledge workers continued to work but locked at home, found that they had extra cash to spend because of reduced commute and work-related expenses and few entertainment or travel options. Ad- ditionally, though much of the quarter’s government relief payments were spent largely on rents, utilities and necessities, the money was not distributed propor- tionally to income losses thereby adding temporary discretionary income gains for some recipients. Low interest rates and longer term lend- ing practices allowed the extra money to be spent on previously delayed purchases such as autos and home improvements. New car registrations dropped 48.9% in the second quarter, but sales tax re- ceipts dropped only 15.8% as buyers who did purchase, opted for more expensive SUV’s, trucks and luxury vehicles. As cabin fever set in, sales of RV’s, boats and Motorcycles also began to rise. With restaurants and many brick and mortar stores closed or restricted to lim- ited occupancy, buyers shifted to online shopping with tax revenues from in-state fulfillment centers rising 142.7% over the second quarter of 2019 and county pools where tax receipts from out-of-state goods are allocated, rising 28.9%. Online sales accounted for 52.0% of this quarter’s tax revenues from the general consumer goods group. Working at home eventually morphed into working on home thereby boosting related improvement purchases. Grocers, cannabis, liquor and sporting goods fur- ther helped offset losses in other segments. Strong demand for warehouse and ship- ping technology, equipment and supplies to accommodate the increase in online shopping as well as home offices and virtual classrooms helped offset declines in the business/industrial group. Un- anticipated gains in agriculture related purchases and transit spending further added to the offset. Pandemic uncertainties, fires, childcare issues and bankruptcies are expected to result in uneven gains through 2020-21 with each jurisdiction’s experience differ- ing according to the scope and character of their individual tax bases. Overall recovery and improvement in statewide receipts is not expected to begin until 2021-22.