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HomeMy WebLinkAbout6/7/2022 Item 6a, Harnett / Horn - Staff CorrespondenceCity of San Luis Obispo, Council Memorandum City of San Luis Obispo Council Agenda Correspondence DATE: June 7, 2022 TO: Mayor and Council FROM: Natalie Harnett, Principal Budget Analyst Matt Horn, Director of Public Works VIA: Derek Johnson, City Manager SUBJECT: Staff Agenda Correspondence Item 6a – 2022-23 SUPPLEMENTAL BUDGET The purpose of this agenda correspondence is to answer questions that staff received and correct a clerical error in one of the tables included in Attachment A – 2022-23 Supplemental Budget. Response to Non- Parking Related Question: 1. Why is Climate Action Major City Goal Task 4.3f labeled as “Removed”? (Packet Pg. 612; Budget Document Pg 135, line 253) “Update the existing Cerro San Luis Natural Reserve Conservation Plan (2005), including a contemporary natural resources inventory, mapping, policy review, and identification of land stewardship needs and priorities” Staff response: Staff originally planned to update the Conservation Plan to address any potential inconsistencies between the Council's Winter Evening Hours of Use program (i.e., night hiking) but upon further review, the existing Conservation Plan does not address hours of use or other day-to-day operational matters. Correction to Attachment A – 2022-23 Supplemental Budget The table on Budget Document Page 72 has an error. As outlined on Budget Document pages 69 and 85, staff recommend deferring the budget for Project# 90742 – Storm Drain Replacement – Woodbridge Runoff ($175,000). The table in the Local Revenue Measure section shows the $175,000 being removed from the wrong project. The final budget document published on the City’s website will be updated to reflect the changes. Existing “Local Revenue Measure Table – Lines 32 & 33” (Budget Document Pg. 72): Staff Correspondence – FY2022-23 Supplemental Budget Page 2 Corrected “Local Revenue Measure Table – Lines 32 & 33” (Budget Document Pg. 72): CORRECTION to Memo on Item 6a Staff noted the second table on Page 3 of the Friday, June 3, 2022 Memo on Item 6a should be corrected to more accurately reflect changes from the 2021 -23 Financial Plan then proposed rates to the currently proposed rates. Below this table better illustrates the proposed changes to the projected change. Parking Rate 2021-23 Financial Plan then Proposed Rates to be Effective July 1, 2023 Currently Proposed Rates to be effective Jan. 2, 2023 Currently Proposed Rates to be effective July 1, 2023 2021-23 Financial Plan then Proposed Rates to be Effective July 1, 2025 Currently Proposed 2022-23 Rates to be effective July 1, 2025 On-Street and Lots Tier 1 $2.50 $2.00 $4.00 $3.00 $5.00 Tier 2 $2.50 $2.00 $4.00 $3.00 $5.00 Tier 3 $1.50 $1.50 $3.00 $2.00 $3.00 Parking Structures Hourly/ Daily Max $1.75/$7.00 $1.50/$6.00 $3.00/$12.00 $2.00/$8.00 $3.00/$12.00 Response to further Parking Fund Questions. 1. I am concerned about the parking fund’s financial situation. On page 48 the statement is made that “Without these rate increases, the parking Fund will not be able to build the new Cultural Arts District Parking Structure.” Is this literally true? Are there no options to rubber stamping all of these rate increases? To be more precise, the statement should have read, without additional revenues, the Parking Fund will be unable to meet the debt ratio requirements, maintenance of existing and new assets (all four structures and their infrastructure), and operational expenditures at the required levels to finance the new structure. Without a healthy fund with revenues in excess of expenditures (to meet future maintenance needs) the City will not be able to debt finance the structure. One other issue to note, the General Plan requires the Parking Fund to be self-sufficient and not a drain on the General Fund See General Plan Policy 13.1.2. Furthermore, the Council’s adopted Fiscal Policies, page 544 of the 2021-23 Financial Plan, Section A states: Staff Correspondence – FY2022-23 Supplemental Budget Page 3 Water, Sewer, and Parking. The City will set fees and rates at levels which fully cover the total direct and indirect costs – including operations, capital outlay, and debt service of the following enterprise programs: water, sewer, and parking. 2. What impact does slowing down the construction timeline for the Cultural Arts District Parking Structure have? It will most likely increase costs, negatively impact the SLO Rep project, and the nine unit housing complex commonly referred to as the liner building. All projects will be delayed, and costs will increase for all projects. 3. What is the dollar amount that would be gained by eliminating the free first hour? Council’s approval of the elimination of the free hour of parking with the adoption of the 2021-23 Financial Plan results in approximately $700,000 in added revenues in 2022 -23 and $1.45 million ongoing when the parking rates are increased in 2023 -24. 4. How much revenues would be gained by charging for parking on Sunday mornings? Expanding paid parking options on Sundays which currently begin at 1:00 pm to start charging at 9:00 am would currently generate $31,000 annually. This would increase to $62,000 in 2023 if the proposed rate structure is adopted. 5. What aspects of the parking structure construction could be funded by non- parking fund resources? As noted above the City’s General Plan polices provide that the Parking Fund should be self-sufficient. The City could monetize the liner building, the affordable housing site, and recover proceeds to offset debt, but at this time it is unknown what the number would be, and the margins are anticipated to be small. 6. Could the General Fund assume the debt for the new structure as it did for 919 Palm? (p 56). The General Fund only pays for the non-parking fund portion of the 919 Palm debt, which associated with the Community Development and Public Works departments office space. The rest is paid for by the Parking Fund. Staff Correspondence – FY2022-23 Supplemental Budget Page 4 7. Could CIP capital reserves (such as from the deferred Taft roundabout, etc.) be used to fund any aspect of the new parking garage so as to reduce the construction loan amount? Using General Fund dollars to subsidize Parking Fund debt would be a change fr om past precedent and would be inconsistent with the General Plan and adopted Fiscal Policies noted above. In the case of the Taft Roundabout, it is deferred for 2023-24 and further deferral of that project would impact traffic safety. 8. What is the dollar amount the Parking Fund lost due to COVID related impacts? Approximately $4 million. 9. Could some of the $9.9 ARPA money in the Infrastructure Investment Fund be used to reimburse the Parking Fund for COVID related revenue losses and then be devoted to construction of the new parking structure? Yes. All or a portion of the funds could be used. The majority of the funding has been appropriated to the Prado Road Bridge which is a mitigation project and the funds would need to be backfilled and would likely mean, based on the funding of projects to meet mitigations and other City commitments, that park, bicycle, and pedestrian projects that are more discretionary would need to be deferred or the City would need to roll in additional debt into the Prado Road Overpass, thus inflating the debt service costs and otherwise reducing annual available funding for discretionary projects. The most logical source would be to use all or a portion of the ARPA funding with recommendations from the Ad-Hoc committee ($1.54 million).