HomeMy WebLinkAbout201920 Year End Report
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Fiscal Year 2019-2020 Year End Report
Report Contents (linked within document):
Page Page
2 General Fund Overview
Department Reviews: Utilities
6 Admin & IT 31 Water Fund
8 City Attorney 34 Sewer Fund
10 Finance 37 Whale Rock
12 Human Resources 38 Solid Waste (AB939 General Fund)
14 Community Development 39 Transit Fund
18 Public Works 42 Parking Fund
20 Parks & Recreation Special Revenue
23 Police Department 45 TBID
26 Fire Department 46 Downtown BID
30 Insurance Fund 47 Major City Goal and CIP Year End Updates
_____________________________________________________________________________________
Prepared by:
Brigitte Elke, Finance Director
Natalie Harnett, Principal Budget Analyst
Victoria Tonikian, Executive Asst to City Manager
Brittani Roltgen, Human Resources Analyst
Cori Ryan, Administrative Analyst
Kelly White, Legal Assistant/Paralegal
Nanika Kala, Administrative Analyst
Aleah Bergam, Administrative Analyst
James Blattler, Administrative Analyst
Melissa Ellsworth, Senior Administrative Analyst
Lynn Wilwand, Administrative Analyst
Alex Fuchs, Parking Manager
Gamaliel Anguiano, Transit Manager
Kelley Mattos, Administrative Analyst
Jennifer Thompson, Utilities Business Manager
Jacob Nunez, Revenue Specialist
Brian Nelson, Supervising Civil Engineer
Debbie Malicoat, Accounting Manager
General Fund Overview
2
General Fund Overview
General Fund Expenditures
Overall, the General Fund experienced significant savings in FY19-20. This can be attributed to both the effectiveness
of the second year of the Fiscal Health Response Plan and the immediate activation of the Fiscal Health Contingency
Plan in March due to the Covid-19 pandemic. These efforts greatly reduced staffing costs, the City’s top expenditure
category. The departments with the largest saving were Fire and Public Works.
Note: the large discrepancy in Human Resources between FY19 and FY20 is due to the move of insurance related
budget to the Insurance Fund.
The graph below demonstrates that the General Fund was able to reduce its expenditures in FY19 -20 to below 17-
18 actuals. 18-19 actuals are particularly high, due to a one-time payment to CalPERS of $4.2 million that was
postponed in FY19-20.
*18-19 Actuals include the one-time payment to CalPERs of $4.2 million.
2018-19
Actual Budget*Actual Variance % Variance
1 Administration 6,881,628$ 8,348,565$ 7,577,803$ 770,762$ 9%
2 City Attorney 883,895$ 1,001,663$ 968,975$ 32,688$ 3%
3 Community Development 6,015,701$ 6,484,328$ 5,593,342$ 890,986$ 14%
4 Finance 2,422,200$ 2,043,812$ 1,765,277$ 278,534$ 14%
5 Fire 13,771,167$ 13,606,794$ 12,383,242$ 1,223,552$ 9%
6 Human Resources 5,381,208$ 1,501,460$ 1,213,973$ 287,488$ 19%
7 Non-Departmental/Support Services 456,684$ 885,416$ 605,755$ 279,661$ 32%
8 Parks and Recreation 4,160,211$ 4,453,364$ 3,745,956$ 707,408$ 16%
9 Police 17,946,936$ 18,245,345$ 17,301,910$ 943,435$ 5%
10 Public Works 13,004,131$ 13,967,015$ 12,590,944$ 1,376,071$ 10%
11 Utilities - Solid Waste -$ 173,541$ 86,619$ 86,923$ 50%
12 Encumbrance Carry Forward (Open POs)1,555,777$ 1,555,777$ -$
13 Public Safety Equipment Project (Restricted for Carryover)1,196,606$ 100,391$ 1,096,215$
TOTAL 70,923,760$ 73,463,685$ 65,489,962$ 7,973,723$ 11%
*Budget includes encumbrances from 18-19 and any other approved budget adjustments made throughout the year. IndexTable 1: Expenditures by Department 2019-20
General Fund Overview
3
While there was significant savings in operating expenditures, there was a significant shortfall in revenues. The table
below illustrates the variance between revenue and expenditure actuals based on unaudited numbers. Including the
requested carryover, this amount is within a very small margin (.3%) of the total budget. Actuals for FY20 continue
to change until the final audit is completed by December 31, 2020. Any negative variance can and will have to be
covered by the remaining balance from FY 18-19.
Overall, the final numbers are more favorable than forecasted largely due to Sales Tax revenue (detailed in next
section). While it maintains a healthy fund balance, the City had a goal of paying a combined total of $7.3 million
towards CalPERs unfunded liability in FY 19-20 and FY 20-21. Those payments are postponed due to economic
uncertainties. The economic effects of COVID19 are just beginning and the City must keep long -term sustainability
in mind.
Covid-19 Expenditures and Reimbursements
It is also important to note that the expenditure numbers above include $243,928 in Covid-19 related purchases; a
portion of which will be recovered through the CARES act funding in 2020-21. The City has also applied for
reimbursement through FEMA, but it is unknown whether any will be received.
Though the City continues to experience Covid-19 related expenditures, the bulk occurred during the “Shelter at
Home” directive and physical distancing mandates. The City immediately implemented a tracking mechanism to
account for staffing and material expenditures related to the health emergency. The first request was submitted to
FEMA in May 2020.
CARES Act
On June 2, 2020, the City Council approved the recommended initiatives for the CARES Act funding the City will
receive from the State. A total of $566,680 was approved. To date the City has received two installments in the
amount of $188,893. Staff is preparing to submit the required report to the Department of Finance via the reporting
portal by September 4 and October 7, 2020 with the final report due on January 6, 2021.
General Fund Overview
4
General Fund Revenues
Sales and Use Tax Revenue: As with most California cities, actual sales tax revenues came in higher than initial
projections to the surprise of all. This was largely due to an increase in the state and county pool allocation which
helped offset the decrease in tax revenue from general consumer goods and other negatively affected industries.
Online sales are the largest contributor to the countywide poo l allocation. The graph below shows a year over year
quarterly comparison of Bradley Burns sales tax for the City by industry:
Property Tax: Property Tax came in at an all-time high in FY20 and above the County Assessor’s forecast. The main
reason for growth is the transfer of ownership and increase in the Taxable Assessed Value of homes in our
2017-18 2018-19
Table 3: General Fund Revenue Detail Actual Actual
Tax & Franchise Revenue
Sales & Use Tax 17,055,085 18,119,000 17,675,000 16,571,064$ (1,103,936)$ -6%
Local Revenue Measure G *7,504,485 8,325,000 7,840,000 7,554,375$ (285,625)$ -4%
Safety Prop 172 397,488 385,000 416,459$ 31,459$ 8%
Property Tax 16,534,689 17,473,000 17,940,101 18,475,730$ 535,629$ 3%
Transient Occupancy Tax 7,499,051 8,061,000 8,033,000 6,275,332$ (1,757,668)$ -22%
Utility User Tax 5,627,356 4,920,000 5,854,000 5,439,144$ (414,856)$ -7%
Franchise Fees 1,597,655 1,428,000 1,558,000 1,887,836$ 329,836$ 21%
Business Tax 2,663,686 2,630,000 2,942,000 2,913,585$ (28,415)$ -1%
Gas Tax (SB1)*722,436 818,000 1,014,780$ 196,780$ 24%
Cannabis Tax 64,400 81,599$ 17,199$ 27%
Total Tax/Franchise 58,879,495$ 61,678,436$ 63,109,501$ 60,629,903$ (2,479,598)$ -4%
* Special Revenue Funds
Total Fines and Forfeitures 199,374$ 186,263$ 147,600$ 159,081$ 11,481$ 8%
Total Investment & Property 518,752$ 361,748$ 381,716$ 755,618$ 373,902$ 98%
Total General Government 616,904$ 792,495$ 873,235$ 1,102,359$ 213,530$ 24%
Subventions & Grants 10,414$ 1,098,145$ 2,720,000$ 2,936,458$ 216,458$ 8%
Fees for Service
Total Police Services 630,167$ 655,371$ 605,347$ 916,349$ 311,002$ 51%
Total Fire Services 1,442,973$ 1,453,435$ 1,416,913$ 1,434,688$ 17,775$ 1%
Total Development Review*6,088,445$ 5,881,785$ 6,963,000$ 6,464,554$ (498,446)$ -7%
Total Parks and Recreation 1,679,974$ 1,871,996$ 1,762,929$ 1,127,994$ (634,935)$ -36%
Total Fees & Other 11,187,003 12,301,239 14,870,740 14,897,101 26,361 0%
Total General Fund Revenue 70,066,498 73,979,675 77,980,241 75,527,004 (2,453,237) -3%
* Excluding Development Services Designation (see pg 16 for detail)
Variance
Revenue
Forecast
(mid year)
Actual YTD (Data
ran 8/4/20)
%
Variance
FY 19-20
General Fund Overview
5
community. San Luis Obispo experienced a 6% increase in Net Value from FY18-19, the second largest growth within
the County. This factor along with Proposition 13 adjustment, Prop 8 value restoration, and new construction led to
an overall growth of 4.5% from FY19. The City expects the potential economic effects of COVID19 to affect Property
Tax beginning in FY 21-22 due to an 18-month lag in revenue. It is still unclear the true impacts of the pandemic on
property tax as market values remain high but commercial real estate could still see some hard times ahead.
Transient Occupancy Tax (TOT): TOT is the City’s third largest source of revenue and represents one of the industries
hit hardest by the pandemic and shelter-in-place orders. Hotels hovered around only 15% occupancy during April
and May. With dropping occupancy, the average daily rate had to be adjusted downward, creating a double impact
on revenue. Occupancy increased once orders were loosened, but we can expect that travel will continue to remain
at all-time lows until a vaccine is released. In addition to decreased leisure travel, the City expects business travel to
plummet, especially due to Cal Poly’s virtual landscape for the fall. Career fairs and educational conferences bring
thousands of guests and participants to the City each year. Staff estimates that about 16% of TOT is generated by
Cal Poly (directly and indirectly). The impact on travel can also be seen at the airport where passenger flight
frequency has diminished to 29% of pre-Covid 19 activity dropped by 71% from March through July 2020. All in all,
TOT FY20 actuals ended very close to the adjusted projections done in May 2020.
Business Tax: Business Tax was largely collected at the beginning of the fiscal year; therefore, it was unaffected by
COVID19. Because of the 12-month lag period, the City expects to see the impact in the current year related to
business closures and future years due to the three-month closure and diminished business activities throughout
the partial shut-down. FY 19-20 actuals were very close to the original forecast.
Fees for Service: Non-tax revenues are less impacted by economic trends and in FY 19-20 there was a favorable
variance in this revenue. The main cause was high development activity and fees associated with building permits
and development review activities, though a portion of this revenue will go the development designation for contract
work related to development review. The department-specific revenues are explained in detail in the following
sections. Keep in mind that some of these revenue lines include reimbursements or unbudgeted grants that the City
received during the year. These revenues are offset by an increase to expenditure budgets, leading to a net zero
impact to fund balance.
Budget Carryover: Operating Programs
Under the City’s Financial Plan policies, operating program appropriations not spent during the first year may be
carried over for specific purposes into the second year with the approval of the City Manager. The departments
requested a total of $2.2 million in general fund money to be carried over for specific purposes. Due to economic
uncertainty, requests were prioritized and a total of $1.52 was approved. Of that, $1.3 million will be distribution
directly into specified expenditure accounts and $391,000 was allocated into a contingency account to use on an
as needed basis for projects aiding in economic recovery or advancing a major city goal. The table below breaks
down the approved carryover by fund:
Table 4: Approved Carryover
Fund Amount
General Fund $1,518,208
Water Fund $290,750
Sewer Fund $53,530
Boysen Ranch Fund $7,500
Administration & IT
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Administration and Information Technology Department
The Administration and Information Technology Department not only met but exceed Fiscal Health Response Plan
goals and ended FY20 with a savings of 10% across the Department. Overall, a total of $771k in savings was achieved,
however of that amount, approximately $207,900 will be requested to carryover to FY21 for specific work program
items that further the advancement of the Meta Major City Goal. The savings was distributed across Contract
Services, Operating Expenses, and Salaries and Benefits and can be attributed to a variety of factors including vacant
positions, filling vacancies with employees at lower steps, reducing spending due to COVID-19, and deferring projects
and tasks to meet the needs of the organization in addressing COVID -19. The biggest challenge for the department
in FY20 were associated with managing multiple emergencies at the same time. Despite these hurdles and the
increase in unexpected workload, the department met key objectives and has thoughtfully crafted a workplan for
FY21 that meets the needs of the organization.
Effects of COVID-19 on Department Operations
The Department deferred numerous workplan and Major City Goal tasks due to the priorities and needs of
addressing COVID-19. Administration projects were delayed as staff adjusted workloads to address emerging
priorities related to the COVID-19 response including providing organizational support related to the Emergency
Operations Center such as leadership, communications, economic recovery, and business support. IT Projects were
delayed as staff adjusted workload to provide citywide COVID-19 support for City staff to work remotely. Staff
resources and workload were redirected to set-up virtual Council Meetings and remote payment systems, virtual
Skype meetings, increased VPN capacity, and provided laptops for work from home.
As a result of COVID-19, departments were asked to rollback FY21 budgets to the FY20 level, resulting in an overall
Department reduction of $230,841. This was primarily accomplished through salary true-ups and contract services
reductions.
Key Objectives
• Support the City organization by completing tasks related to the FY21 META Major City Goal of Economic
Stability, Recovery and Resiliency.
• Support technology projects citywide and continue to enhance remote working opportunities.
• Continue to lead the new cannabis-based business program, including land use, licensing, and compliance
issues.
• Administer procedures for the 2020 City elections for elective offices, initiatives, referendum and recalls.
Conduct elections that conform to the State Elections Code and the City’s campaign regulations.
• Provide GIS, mapping and enterprise database support for the organization.
* Due to the COVID‐19 pandemic, staff has implemented a new performance measure for FY21 that is in‐ line with Economic Recovery efforts.
Performance Measures Target Result
Maintain City Network Reliability Uptime Status 99.9% 99.9%
Open City Hall Participant Satisfaction Rating 90% 93%
Sales and Transient Occupancy Tax Revenue* $33,932,000 $30,401,121
Administration & IT
7
Variance Analysis
Contract Services
The Administration and IT Department was able to achieve savings in Contract Services accounts for FY2020. The
most significant driver of savings was related to deferring many workplan tasks and SOBCs from the 19 -21 Financial
Plan due to the impacts and needs of addressing COVID -19. Of the $314k in savings in Contract Services, $170k is
being requested below as carryover for specific projects: Economic Recovery, Economic Development Strategic Plan,
and Building Electrification Program. Overall, these savings are expected to be one-time as the Department critically
analyzed workplan tasks during the Supplemental Budget Process and derived the budget according to those
priorities and commitments.
Other Operating Expenses
The savings in Other Operating Expenses can be associated with the Fiscal Year Health Contingency Plan guidelines
surrounding spending along with staff working remotely. Professional development and training opportunities were
either canceled or switched to on-line trainings, which were less expensive in nature due to the absence of travel
costs. Additionally, due to the stay at home order and having staff work remotely, the department did not utilize
numerous budgets associated with being in the office such as office supplies, furniture and fixtures, etc. These
savings are expected to be one-time as the impacts of COVID-19 influenced spending in FY20 as it related to in-
person events.
Staffing
The savings in Staffing can be attributed to a variety of factors across the Department including hiring new employees
at lower steps than budgeted for and positions being vacant for a major part of the year. These savings are expected
to be one-time as the Department conducted a staffing expenditure true-up for the formation of the 2020-21
Supplement.
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 2,246,418$ 3,022,819$ 2,708,061$ 314,758$ 2,410,076$
Other Operating Expenses 701,390$ 724,006$ 616,795$ 107,211$ 687,349$
Salaries and Benefits 3,585,692$ 4,270,520$ 3,929,286$ 341,234$ 4,679,557$
Utilities 348,127$ 331,220$ 323,661$ 7,559$ 325,797$
TOTAL 6,881,628$ 8,348,565$ 7,577,803$ 770,762$ 8,102,779$
Administration 2019-20
City Attorney
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City Attorney
The City Attorney Department ended the year with about 3% of its total budget in surplus. Various overages were
counterbalanced by savings which are detailed below, but the main savings were from Education and Training (since
COVID-19 suspended in-person conferences) and Contract Services (since Oracle processe s were still being learned
and understood, which lead to a conservative forecast of funds available). Department budget reductions made for
the Fiscal Health Response Plan were adhered to. The department has two performance measures : one of which
was met (turnaround time for administrative citation appeals) and one which was missed marginally due to the
recent receipt of a new lawsuit.
The department is implementing an intake form in the hopes of streamlining requests for assistance from City staff
and increasing the efficiency of task delegation and management. Looking ahead , the department is also considering
the following steps/improvements:
• Hiring of a temporary records analyst to work jointly for the City Clerk’s Office and City Attorney
Department
• Possibility of implementing records review software to streamline the current, mostly manual, process of
document review
• Hiring for the Legal Assistant position left vacant since June 2020
• Looking to the October Revise to request permanent, rather than temporary, staffing resources given the
longstanding and apparently escalating need.
Some of the department workload described at mid-year is on-going (California Voting Rights Act demand letter and
potential litigation; Cannabis program implementation and defens e against litigation; Development Agreement
implementation (San Luis Ranch and Avila Ranch)) and new issues such as COVID-19; protests and potentially related
lawsuits; elections and revenue measure advice; significant records request volume; and additional lawsuits have
been added.
Effects of Covid-19 on Department Operations
The City Attorney Department experienced increased staffing expenses due to COVID -19. The pandemic coincided
with the resignation of the Assistant City Attorney, which meant temporary staff members were called on to help
with an increased workload by increasing their weekly hours. The fourth quarter, after the stay -at-home order was
implemented, also included the receipt of an extreme increase in administrative citation appeals due to double fines-
in April 2020 the City received twice as many appeals as the same month in 2019, and May/June 2020 each had a
more than 500% increase year-over-year. Thankfully, the spike in appeals has fallen back towards normal and the
confluence of events that lead to the increase is not foreseen as occurring again in the new fiscal year.
Overall, the ongoing workload and resource demand on the department is anticipated to remain high and potentially
escalate following elections, protests and anticipated increases in claims and litigation activity that can be associated
with economic downturns. Those issues will be addressed via an ongoing staffing request as mentioned in the above
section.
Key Objectives
• Develop and maintain a high level of legal support to City government
• Provide prompt, thorough legal advice in response to inquiries, with emphasis on legal options
• Minimize liability exposure of City through the practice of preventative law
• Apprise City Council on pending litigation, legislation, and other significant legal matters
• Strengthen Municipal Code enforcement practices
City Attorney
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Variance Analysis
Contract Services
Because of a delay in the carryover of POs and the release of unused PO balance in the financial reporting system,
the department believed it had a different balance available than that shown at year -end. Funds would have been
put towards contract obligations had the balance been identified sooner. This is a one-time savings and the
department is requesting to allow carryover to into FY2021 for active contract obligations.
Other Operating Expenses
Education and Training: For various reasons, department staff were not able to attend trainings they would have in
a regular year, leading to a savings in Education and Training. The department is requesting to carry this forward
(detailed in Carryover section).
Publications and Subscriptions: During the year (October and January), the department added two temporary, part -
time Assistant City Attorneys (one previously contracted for services via a firm) who needed access to the
department’s contracted online legal research software. The department knew the overage would be balanced by
savings elsewhere so did not bother with a Budget Amendment. For the current fiscal year, this ongoing need is
budgeted.
Staffing
The negative balance for staffing is mostly impacted by two things :
1. When the need for overtime arises, the expense is offset by the department's Temporary Salaries budget.
This year, with the delay in getting staffing costs posted to Oracle, it was more difficult to keep these two
pieces in alignment while temporary staff increased their hours in the Spring to assist with COVID -19 and
other issues that arose during the transition in the regular Assistant City Attorney ("ACA") position. With
the Oracle posting issue fixed, the expectation is that overtime will be accurately covered going forward.
2. Throughout the fiscal year the Regular Salaries line trended higher than budgeted. This was due to incorrect
salary modifiers within the Questica budget module (which was used to calculate the base budget for the
2019-21 Financial Plan) that went undetected by department staff. In creating the budget for FY 2020-21
calculations were done manually and verified for each position.
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 178,545$ 205,611$ 172,537$ 33,074$ 22,000$
Other Operating Expenses 15,983$ 16,986$ 12,199$ 4,787$ 13,600$
Salaries and Benefits 689,367$ 779,065$ 784,239$ (5,174)$ 742,567$
TOTAL 883,895$ 1,001,663$ 968,975$ 32,688$ 778,167$
City Attorney 2019-20
Performance Measures Target Result
Citation Appeal Process Completed Within 70 Days 70% 81%
Claims Against the City Received that Resulted in Litigation <5% 5.9%
Finance
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Finance Department
The Finance Department ended the year with some savings due to vacancies but no significant variances in other
categories. The department not only met Fiscal Health Response Plan goals but exceeded the planned savings due to
filling vacancies with employees at lower steps and enrolled in PEPRA. The biggest challenge for the department in
FY20 was the continued implementation of the new ERP and HCM system and configuring the system to meet the
City’s needs. Additionally, there was increased workload associated with forecasting, planning, and funding needs for
COVID19 and the tremendous increase in administrative citations that the department invoices for (see Attorney
write-up).
Effects of Covid-19 on Finance Operations
The Finance department experienced increased workload associated with forecasting, planning, and funding needs
for COVID19. The department was also in charge of tracking all expenditures, establishing the reporting mechanisms,
and submitting funding requests to FEMA. Despite the hurdles, all the key objectives were met, and the department
has specific plans to continue improving reporting mechanisms and operation efficiencies in FY 20-21.
Key Objectives
• Work closely with the operating departments in developing and implementing funding plans and programs
in achieving their goals and objectives.
• Evaluate, monitor, and produce reports documenting the City's financial progress for internal customers
and for presentation to the City Council every three months.
• Monitor receipts of local revenues and initiate effective collection strategies to ensure that revenues and
taxes are paid by those who are obligated to pay them.
• Oversee City purchasing and ensure compliance with all applicable laws, regulations, and policies.
• Provide accurate and timely financial reports to internal and external stakeholders.
Variance Analysis
Contract Services: Slight variances in the Contract Services category were due to fluctuations in contract amounts,
usually due to changes in vendors or agreements.
Salaries: The savings were due to several vacancies, interim assignments, and filling positions with employees at entry
level. Staffing budgets were trued-up as part of the FY21 Supplemental Budget and these savings will not be ongoing.
The department was allocated contract resources as part of the 19-21 Financial Plan to help with implementation of
Oracle. For the upcoming Financial Plan, these additional resources will have to be evaluated as the system is still in
its infancy and requiring additional efforts beyond current FTE levels. The department used salary savings to hire
temporary staff and retired annuitants to assist with workload.
Variance Analysis: Support Services and Non-Departmental Cost Centers
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 439,134$ 308,987$ 269,416$ 39,571$ 354,070$
Other Operating Expenses 44,842$ 50,764$ 35,035$ 15,729$ 50,400$
Salaries and Benefits 1,938,224$ 1,684,061$ 1,460,827$ 223,234$ 1,649,954$
TOTAL 2,422,200$ 2,043,812$ 1,765,277$ 278,534$ 2,054,424$
Finance 2019-20
Performance Measures Target Result
Receive the GFOA Distinguished Budget and CAFR Award Yes Yes
Meet Budget and Fiscal Policy Fund Balance Requirements 100% 100%
Meet all Federal, State, and City Charter Reporting Requirements 100% 100%
Finance
11
Support Services – Citywide
The overage in this cost center is due to citywide expenditures associated with COVID19 that were not originally
budgeted for. To maintain consistency for reporting requirements to FEMA, all COVID19 related expenditures were
costed to Finance Support Services – Other Operating Expenses.
Staff submitted reimbursement requests to FEMA and is hopeful to see some cost recovery, but the c laims continue
to be scrutinized and additional information and supporting material is being submitted. The Council also allocated
$236k of CARES act funding for Covid-19 expenditures. However, due to the receipt of this funding, it will be allocated
to FY21.
Non-Departmental Allocations
Other Expenses: The non-departmental expenditures were for credit card and bank fees that were inadvertently left
out of the budget. It should be noted that bank charges are usually covered by the interest the account earn s. In a
low interest environment, this was not achieved in FY20. These expenses had historically been recorded as negative
revenues but per accounting best practices, the City changed its accounting process for them in FY20. Budget for
these fees has been added in FY21. Staff is also working on different processes to receive improved terms such as
Single-Use payment options that provide a “kick back” to the City.
Salaries: Non-departmental salary budget is comprised of contingency budget for organization-wide staffing line
items. This budget is activated when a department is faced with unexpected staffing costs due to bargaining results
or payouts of vacation leave. It was not expended in FY20 but the portion pertaining to ongoing negotiations will be
carried over to FY 20-21.
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 56,990$ 51,000$ 44,312$ 6,688$ 208,842$
Other Operating Expenses 126,360$ 183,880$ 394,444$ (210,564)$ 124,347$
TOTAL 183,350$ 238,876$ 446,876$ (208,000)$ 333,189$
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 4,956$ -$ -$ -$
Other Operating Expenses 210,500$ -$ 161,317$ (161,317)$ 70,000$
Salaries and Benefits 57,877$ 650,536$ 5,682$ 644,854$ 541,285$
TOTAL 273,334$ 650,536$ 166,998$ 483,537$ 611,285$
Finance: Support Services 2019-20
Finance: Non Departmental 2019-20
Human Resources
12
Human Resources Department
The Human Resources Department ended the fiscal year with positive variances in Contract Services and Other
Operating Expenses due to shifting priorities as well as an inability to host in -person events because of COVID-19.
The department met its Fiscal Health Response Plan goals and exceeded the expected savings through underfilling
positions and utilizing supplemental staff. The biggest challenges for the department this fiscal year were continued
implementation of the HCM system, extended labor negotiations, staff vacancies, and responding to COVID -19.
Despite these challenges, the Human Resources Department was able to meet many of its key objectives and
remained under budget across all programs. Two out of three performance measure goals were met (percentage of
internal promotions and reduction in liability and worker’s compensation claims), while concurrently realizing a 32%
increase in labor relations activity and a 300% increase in classification, compensation, and benefits activity over the
previous fiscal year. The increase in classification, compensation , and benefits activity can be partially attributed to
a shift in workload from Payroll staff to Human Resources staff through the transition to the Oracle Human Capital
Management system. The Department plans to continue implementation of the Talent Manag ement module in
Oracle during the 2020-21 fiscal year, which should increase the percentage of on -time employee performance
evaluations (the third performance measure). Additionally, the Department plans to implement the self -service
feature of the Benefits module in Oracle to allow for paperless benefit enrollments and changes. This is anticipated
to be completed in time for the 2021 Open Enrollment period.
Effects of Covid-19 on Department Operations
Human Resources Department operations were heavily affe cted because of the COVID-19 pandemic. The initial
decrease in recruitments was replaced with an immediate need to determine how to support employees, interpret
and implement the laws passed by Congress, and provide clear communication to employees on safe ty policies and
practices. While some of the initial activities have subsided as the pace of new legislation has slowed, Department
operations were still significantly impacted through the end of the fiscal year. Due to the necessary shift to remote
work, the Department transitioned to electronic forms wherever possible. As a result, the Department has seen
increased efficiencies in the processes that have transitioned to electronic forms and processing.
Additionally, the Department saw a large drop in recruitment-related work as well as training opportunities during
the last quarter of the fiscal year due to the inability to gather in person. However, during the month of June the
need to recruit and train started to increase, and the Department shifted its focus on how to perform these functions
remotely.
Key Objectives
• Maintain compliance with State and Federal laws related to employment practices.
• Continue to develop and implement a comprehensive training and development program, including
succession planning efforts.
• Continue to improve marketing the City to draw well-qualified applicants.
Performance Measures Target Result
Percentage of On-Time Employee Performance Evaluations 95% 81%
Percentage of Internal Promotions 40% 51%
Reduction in Liability and Workers’ Compensation Claims -7% -13%
Human Resources
13
Variance Analysis
Contract Services: The Department primarily utilizes Contract Services for recruitment, pre -employment physicals,
training and development, and labor relations legal support. As a result of the pandemic, the ability to hire and train
significantly dropped in the last quarter of the year, which is what led to a large part of the variance in Contract
Services. Another significant portion of the variance can be attributed to an ongoing contract with a classification and
compensation consultant, which was not used this year, again due to the pandemic and economic impacts that lead
to postponement of a planned market compensation study. The Department plans to utilize this funding in the future
for classification and/or compensation analysis as appropriate to support the organizational efforts. Additionally, staff
requested funding for a diversity consultant as well as an office reorganization that were not utilized this year due to
competing priorities and utilizing an intern to do some preliminary work.
Other Operating Expenses: There are two main reasons for the variance in Other Operating Expenses. The first is the
Education and Training budget, where the Department did not expend funds for professional conferences due to staff
vacancies and competing priorities. The second is the Wellness equipment budget that went unspent, due to
challenges convening the wellness committee to select appropriate equipment.
Staffing: The Department realized savings through underfilling positions and retaining supplemental staff who receive
lower benefit packages than full-time contract or permanent staff.
2018-19 2020-21
Actual *Budget Actual Variance Budget
Contract Services 354,117$ 443,892$ 282,107$ 161,785$ 258,811$
Other Operating Expenses 29,890$ 34,123$ 19,948$ 14,175$ 29,300$
Salaries and Benefits 973,397$ 1,023,445$ 911,917$ 111,528$ 1,062,475$
TOTAL 1,357,403$ 1,501,460$ 1,213,973$ 287,488$ 1,350,586$
Human Resources 2019-20
*For the purposes of variance analysis, liability insurance costs have been removed and added to the "Insurance Fund" section. A new fund was created
for these costs in FY19-20
Community Development Department
14
Community Development Department
The Community Development saw an overall savings of $890,986. The department over-realized $1,090,163.78 in
revenues. Subtracting the estimate for credit card fees of $111,672,000 from over-realized revenues, the
department will be requesting to carryover 75% of the remaining over-realized revenue, which amounts to $733,869.
The over-realized revenue was calculated by using the revenue budget from Fiscal Year 19 as a base budget and then
applying a 5% increase in projected revenue for FY 20. With the base budget established, the budget policy for
development services revenues is applied to calculate the over-realized amount. This method for calculating over-
realized revenue was directed by Finance in consultation with Community Development following the Council
approved appropriation and budget adjustment that occurred as part of the mid-year budget review. Since the
simultaneous budget adjustment and revenue increase did not include authorization for additional expenditures to
address the resulting workload from increased fee revenue, this method helps to ensure that the fee r evenues
collected are appropriately allocated to Development Services activities to meet customer service expectations.
The implementation of the Fiscal Health Contingency Plan resulted in salary savings for the department. The plan
required Community Development Department to postpone the filling of vacancies within the Building & Safety
program such as Building Inspectors and Permit Technicians, which was the most significant of the savings. In
addition, several key positions were frozen (Deputy Director, Chief Building Official) with the work being
accomplished in a different way. For example, the Chief Building Official (CBO) position was filled by a new position,
Fire Marshall/CBO, which is shared by the Fire Department and Community Development Depart ment resulting in a
reduction of an FTE between the two departments.
The State of California deemed construction activities essential services during Co vid-19, including construction,
inspection, and maintenance of construction projects. Before Covid-19, the Community Development front counter
was open Monday through Friday from 8am to 3pm, however the front counter has been closed temporarily until
further notice with in-person service by appointment only. The temporary closure has afforded staff the opportunity
to create processes that decrease the level of exposure, while still providing customer services such as the processing
of applications and responding to inquiries from customers and the public. These processes include:
• Digital submittals –applicants are encouraged to submit online to streamline the application process.
• Mail-in submittals –Mail-in submittals are also accepted and suited to more complex project types.
• Online Payments – staff was able to accelerate the implementation of an online payment system to serve
customers while the office was closed during the pandemic.
About 50% of Community Development Department staff are working remotely with staff supporting essential
construction services work on-site and in the field in compliance with CDC guidelines. In spite of the global pandemic
and shelter in place orders, Community Development staff has done an exceptional job adapting and processing
planning applications, building permits, and performing building inspections at the same, if not increased, rate as
they had been before the pandemic. Code Enforcement, however, initially limited inspections to only immediate
health and safety issues and evaluated complaints on a case by case basis working predominantly remotely. Because
of the effectiveness of the procedures set in place in each program, the department has not seen a drastic decline
in overall revenues and the “customers” of these services have continued to proceed with development.
Key Objectives
• Support the Housing and Climate Action Major City Goals.
• Implement proactive public engagement tools for projects.
• Forecast future conditions, needs, and strategies to implement the City’s land use policies and programs.
Community Development Department
15
• Assist in achieving desired development in conformance with established policies, guidelines, standards,
and acceptable timeframes and provide timely processing of applications consistent with State and local
laws and policies.
• Preserve neighborhood wellness by coordinating code enforcement activities and timely compliance with
a variety of regulatory programs city wide.
• Award grant funding to private, nonprofit agencies serving the Human Services needs of residents.
1 In fiscal year 2019-2020, Energov recorded 450 code enforcement requests. Of the 450 requests, 21 requests received responses
outside of the established timelines. Due to Covid-19, code cases are taking longer to fully resolve than in the past. This is due to
fewer hours worked by Code Enforcement Officers due to childcare requirements and health concerns, and due to Covid-19
assignments in support of business reopening.
Variance Analysis
Contract Services: Building and Safety Contract services did not end the year with a significant variance however,
the original budget was augmented significantly and warrants further explanation. Contract services are used to
provide building plan check services to support the Building Permit process. Due to high volumes and the complexity
of building permit applications and the contracts the City has in place with on-call consultants, the Department made
a shift to send almost all of its building plan check to consultants for review. The City Council has approved a new
policy that allows for these consultant services to be paid for direct ly from the fees collected for the service. The
budget was augmented with these revenues throughout the year to cover t he cost. For other contract services,
including Assistant CBO services and building inspectors, the budget was augmented from the balance of the
Development Services Designation.
There is also an outstanding invoice of $9,772 that is to be paid through a combination of Plan Check Revenues and
Admin Education & Training account and will be addressed through the Accounts Payable Accrual. The cost of
building plan check consultants is 65% of Plan Check Fees for up to three reviews. Therefore, all contract cos t for
plan checks that do not require more than three reviews are offset by revenue. A policy was adopted with the 19-
21 Financial Plan to use Contract Services for all Building Plan Check and Revenues and Expenditures have been
budgeted to reflect policy change.
Other Operating Expenses: Credit Card expenses were historically unbudgeted and reported as negative revenues.
This has been corrected in Fiscal Year 21 and has been included as a budget line item. The total credit card
merchant fees in FY19-20 were $111,672
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 1,248,831$ 1,674,276$ 1,541,565$ 132,710$ 917,000$
Other Operating Expenses 264,900$ 113,971$ 184,644$ (70,673)$ 222,055$
Salaries and Benefits 4,501,971$ 4,696,082$ 3,867,133$ 828,949$ 4,186,756$
TOTAL 6,015,701$ 6,484,328$ 5,593,342$ 890,986$ 5,325,811$
Community Development 2019-20
Performance Measures Target Result
Development Review activities completed within established cycle times 75% 80%
Affordable Housing Units Constructed 34 40
Code Enforcement Response Within Established Timelines 80% 96%1
Community Development Department
16
Staffing: Savings came predominantly from three vacant positions in the Building & Safety and Development
Review programs equaling $105,000. In Q3 of FY20 the Fire Marshal and Chief Building Official positions were
consolidated into a single position resulting in 50% savings for the budgeted Chief Building Official position. Two
Building Inspector positions and a Deputy Director position remained vacant throughout the fiscal year.
Revenues
The Development Review Fee Revenue will continue to be closely monitored due to Covid19. Going forward
beginning FY2021, CDD will be implementing a new base budget revenue forecast model.
Building Permits: Following the workflow in the pipeline, CDD projected building permit revenue of $2,263,000.
However, Building Permit activity was high in the first half of the year and resulted in increased revenues and
building permit revenues ended 11% over what was originally budgeted.
Planning & Zoning: FY 19-20 Planning & Zoning budget was originally forecasted at $480,000 and adjusted up to
$624,000 during the mid-year budget review since revenues were being realized at a higher rate than forecast.
Application activity was higher in the first half of the year which resulted in increased revenues 43% over what was
originally budgeted.
Encroachment Permits: FY 19-20 Encroachment Permits budget was forecasted at $305,000 and was not adjusted
during the mid-year budget review because at the time we were on track to meet the forecast. Post-Covid, the
number of encroachment permits was reduced, and in total the City saw a 6% reduction in encroachment permits
issued between 2018-19 and 2019-20. Encroachment permits are issued for construction work within City right-of-
way to contractors for private projects and also issued for City capital projects. In 2019-20, City encroachment
permits represented 4% of the total number of permits issued (889).
Development Services Designation:
Over-realized revenue requested for restriction - $733,869
Resolution No. 10539 authorizes the City Manager to approve the appropriation and carryover of up to 75% of the
over realized development services revenue to cover the additional funds needed for development projects. The
over-realized revenue was calculated by using the revenue budget from Fiscal Year 18-19 as a base budget and then
applying a 5% increase in projected revenue for FY 19 -20 (as shown in the revenue table above). The department’s
original budget projections allow up to $923,000 to be allocated to the development services designation . After
reassessment, the original projections were determined to be too conservative; therefore, the department will only
be requesting $733,869. This funding is vital to fund resources needed to achieve major city goals and department
objectives. Many multi-year projects require resources that lag significantly from the revenue collection to the
2017-18 2018-19
Actual Actual
*Planning & Zoning Fee 631,786$ 488,078$ 480,000$ 624,000$ 682,487$ 202,487$
*Development Review Fees 621,955$ 360,726$ 166,000$ 269,000$ 440,718$ 274,718$
*Building Permits 1,827,689$ 2,328,194$ 2,263,000$ 2,263,000$ 2,518,404$ 255,404$
*Code Enforcement Fees 9,850$ 83,372$ 82,000$ 82,000$ 93,162$ 11,162$
*Fire Plan Check (also listed under Fire)393,704$ 379,622$ 399,000$ 399,000$ 300,833$ (98,167)$
Plan Check Fees 978,630$ 1,033,350$ 994,000$ 1,500,000$ 1,420,723$ 426,723$
*Infrastructure Plan Check 1,474,151$ 1,168,976$ 923,000$ 1,800,000$ 1,638,456$ 715,456$
*Encroachment Permits 327,535$ 290,915$ 305,000$ 305,000$ 261,787$ (43,213)$
*Engineering Dev Rev Fees 216,848$ 128,174$ 120,000$ 120,000$ 111,007$ (8,993)$
TOTAL 6,482,149$ 6,261,407$ 5,732,000$ 7,362,000$ 7,467,577$ 1,735,577$
* Eligible for Development Services Designation TOTAL 1,459,227$
Original Budget Variance from
Original Budget
FY 19-20
CDD Table 2: Development Services
Revenue
Reforecasted at
Mid-year based
on actuals
Actual YTD
Community Development Department
17
services being rendered, so maintaining a healthy balance in the designation is important, especially during uncertain
economic times when “normal” revenue streams may diminish.
Going forward, the designation will likely be used to fund a variety of resources including additional plans examiners,
permit technicians, planners, and engineers, including the use of on-call consultants to address workload demands.
Note CDD does not have any carryover requests for the Department’s overall operating expenditure savings of
$890k.
19-20 Consumption Purposes: Contract Interim CBO, Development Review Special Projects Manager, Laserfiche
Licenses, Permit Technician, Fire Department MobileEyes Software, Public Works Transportation Staffing LOA
Backfill, Clean Energy Choice Consultants, and CFD Training (CS departments).
Eligible over-realized revenue (blue variances in CDD table 2)1,459,227$
Available for appropriation (75%)1,094,420$
- Credit Card Charges (111,000)$
Total available for designation 983,420$
Requested based on re-assessment 733,869$
CDD Table 3: Development Services Designation Calculation
19-20 Beginning Balance 531,021$
19-20 Consumption (see below for detail)(365,613)$
Approved for Carryover at Mid-year 179,910$
Remaining amount requested for Carryover 553,959$
FY19-20 Ending Balance 899,277$
733,869$
Combined
appropriation
for FY19-20
CDD Table 4: Development Services Designation Balance
Public Works
18
Public Works Department
The Public Works Department ended the year with significant variances predominantly from salary savings.
The department exceeded Fiscal Health Response Plan goals due to salary savings. The department held positions
vacant to carefully consider needs and those positions recommended to be filled, were filled either by existing staff
assuming acting roles, using contract staffing, or by filling vacancies with entry level staff.
The department faced challenges and varying workloads in FY20 as result of COVID-19, social unrest, and dynamic
economic conditions. Despite these challenges, the department was able to meet or exceed two of three of the
department’s performance measures objectives. The performance measure objective related to Capital Improvement
Plan projects was delayed primarily due to dynamic economic conditions. During the first two quarters of FY20
construction cost escalated dramatically. To address this change, the department analyzed the City’s Capital
Improvement Plan and developed recommendations to shift resources to deliver the maximum number of impactful
projects for the mid-year budget. The economic impacts of COVID-19 required the re-analysis of this work to maximize
funding available and deliver only those projects that provided economic recovery, reduced future cost, or largely
addressed major city goals. These economic changes and necessary budget planning delayed project implementation
and achieving this performance measure.
Effects of Covid-19 on Department Operations
The department provides essential services to the community and played an important role in City’s response to
COVID-19. The department was able to maintain all service levels provided to the community, as well as expand
service levels to support Incident Action Plan objectives. Those objectives include:
• Increased frequency of janitorial services for public facilities.
• Implementation of a disinfection program for the downtown and park facilities.
• Developing and implementation public counter information, staging, screening, and shielding protection to
better protect front counter staff and the community.
• Assisting with the Open SLO program and implementation of parklets in the right-of-way, traffic control, and
Higuera Street roadway striping revisions.
• Adjusting service levels and fees in parking and transit service discussed in those fund sections of this report.
The department also assisted with the City’s response to social unrest by providing traffic control services and other
resources, as necessary.
Key Objectives
• Enhance accessible regional transit, bicycle, and pedestrian mobility
• Deliver the City’s capital construction program in a timely and cost-effective manner
• Maintain a safe and reliable city fleet to enable efficient operations and emergency response
• Maintain City facilities in a clean, safe, and efficient manner
• Provide a sustainable urban and community forest to accomplish several city goals, including neighborhood
wellness, climate change initiatives, aesthetic quality, and mobility safety
Performance Measures Target Result
Increase the number of work orders for proactive preventive
maintenance of city assets
5% 7%
Enhance traffic safety for all modes of transportation 2%-3% 6.6%
Percentage of budgeted capital projects constructed in the budgeted year 85% 70%
Public Works
19
Variance Analysis
Contract Services – The cumulative Contract Services variance in the department results in significant savings at the
end of the year. The largest savings were predominately in the Parks Maintenance, Facilities Maintenance, and
Transportation Planning & Engineering programs. Most of these savings can be attributed to the implementat ion of
the Fiscal Health Response Plan efforts to reduce expenditures and the deferred maintenance or replacement of non-
critical assets. This is one-time savings.
Other Operating Expenses – Savings are predominately due to staff’s efforts to reduce spending in response to the
COVID-19 pandemic.
Salaries and Benefits – The cumulative Salaries and Benefits variance in the department results in significant savings
at the end of the year. The largest savings were predominately from vacancies in the department’s Administration,
Streets Maintenance, Urban Forest, and the Parks Maintenance programs. Holding the Public Works Director position
vacant results in the largest single savings. Staff turnover and the reduced use of Supplement Staff in Streets
Maintenance and Parks Maintenance resulted in savings. Savings in Urban Forest Services is due to one-time funding
for Supplemental Staff due to Staff injuries. This is one-time savings.
Utilities – The cumulative Utilities variance in the department results in a significant savings. This savings is
predominately due to conservation efforts and historically underspent budgets. Public Works Utilities budgets were
reduced as part of the Fiscal Health Response Plan and continue to be mo nitored for further adjustments. Program
utilities budgets were adjusted in 20/21 Supplement to include the postponed water and sewer rate increases and a
significant increase for electric service due to peak hour tier adjustments. This is expected to be a one-time savings
due to future rate increases.
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 1,529,961$ 1,878,628$ 1,424,517$ 454,111$ 1,276,119$
Other Operating Expenses 1,285,585$ 1,452,652$ 1,385,006$ 67,646$ 1,384,431$
Salaries and Benefits 8,430,715$ 8,950,828$ 8,303,188$ 647,640$ 8,665,864$
Utilities 1,757,870$ 1,684,907$ 1,478,232$ 206,675$ 1,870,045$
TOTAL 13,004,131$ 13,967,015$ 12,590,944$ 1,376,071$ 13,196,459$
Public Works 2019-20
Parks & Recreation
20
Parks and Recreation Department
The Parks and Recreation Department has ended the year with significant variances in both revenues and
expenditures which are all tied to program and facility closures resulting from the COVID-19 pandemic. As most of
the Department’s programming consists of group activities, all programs were suspended with the Shelter in place
directive on March 19, 2020 and only Child Care Summer Camp reopened before the end of the 2019 -2020 Fiscal
Year. Program reopening has been and will con tinue to be consistent with State and County orders surrounding
reopening guidelines. The $627,736 revenue shortfall (-36% variance) is offset by expenditure savings ($707,408)
due to staff furloughs and decreased operating expenditures due to program clos ures.
As the shutdown occurred later in the Fiscal Year, staff were still able to achieve all the performance measures listed
below as well as achieve the Department’s key objectives.
Effects of Covid-19 on Department Operations
Staff opened modified Aquatics and Golf programming in July 2020 alongside concurrent Youth Services
programming. Simultaneously, Parks and Recreation has played a role in the Open SLO program utilizing Facility
Program Temporary staffing budget to maintain the outdoor tables and chairs, clean them, and staff the Mission
Plaza daily. In addition, the Department has been involved in design and wrapping in public art the Open SLO Parklet
barricades and have managed the installation of a few key Public Art pieces since th e shelter in place order. There
are still uncertainties surrounding timeline for Facility, Adult and Youth Sports, Special Events and Contract Class
program reopening schedules based on the variances of the County and State orders in response to health trends.
Program Managers have spent extensive time re-envisioning modified programming to maintain health standards
and protocols published by the CDC, State, and County. Currently, staff have analyzed the fiscal impact of re-opening
programming and followed existing cost recovery policy goals approved by Council in the FY 19-21 Financial Plan.
Given the overall revenue shortages to the City’s General Fund arising from the ongoing pandemic, staff anticipate
the potential need to reexamine those policies and their application during the economic recovery period
surrounding Covid-19. Staff have worked hard to maintain cost recovery while also maintaining capacity restrictions
and implementation of Covid-19 mitigation requirements. Budgeting and planning for FY 20-21 has proven to be a
challenge as reopening guidelines for specifically Facilities, Adult and Youth Sports, Special Events and Contract
Classes are hard to predict and at this time these programs are “suspended”. Staff is challenged with the task of
budgeting revenues and expenditures with the additional potential for tightened program restrictions due to
increased community-wide Covid-19 cases. In terms of non-revenue generating Divisions (Ranger Service and Rec
Admin), Covid-19 has led to increased staff workload associated with essential city worker roles and responsibilities
as well as supporting the META Goal, Open SLO, and revising programs in response to Covid-19. Additionally, Open
Space usage has increased by 40% and so the demands on Ranger Service staff remains high.
At the time the FY 20-21 budget supplement was adopted uncertainty surrounding program reopening guidelines
led staff to cut revenue budgets by 20-50% depending on the program with the anticipation that programs would
be suspended in the summer but resume in the fall. Currently, that doesn’t look to be the case and revenue budgets
will need to be adjusted with deeper analysis at the October revise (by both estimated program reopening
timeframes and estimated revenue decreases due to capacity limitations tied to reo pening restrictions).
Key Objectives
• Support Downtown Vitality and Climate Action Major City Goals
• Implement Public Art Master Plan
• Update the Parks and Recreation Element
• Ensure childcare needs are prioritized and addressed within licensing and budgetary limits
• Maintain the Open Space consistent with the adopted Maintenance Plan
Parks & Recreation
21
• Maintain a clean, accessible, and safe Aquatics facility as paramount to the prevention of incidents and
injury
• Maintenance of 26-acre, 10-Hole Executive Golf Course
Variance Analysis
Contract Services
The significant savings in Contract Services is tied to the Org of the Future SOBC that was budgeted within Recreation
Administration. The SOBC balance was intended to cover the salary of the new Business Manager position and the
Maintenance Operations Manager position starting in Spring 2020, but due to COVID-19, the recruitment for the
Business Manager was pushed out and the funding needed for the Maintenance Operations Manager ended up being
less than originally anticipated due to an internal interim appointment. In addition, due to the TRI cancellation and
contract class program closure, there was significant Community Services Contract Service savings. Most of the
Contract Service budget is for the SLO Triathlon and Contract Labor. This also includes money for banner installation
($30K) that had been loaded into P&R budget unknowingly. The remaining savings can be explained by program
closures from March 19, 2020 through June 30, 2020 for all programs.
Other Operating Expenses
The significant savings in Other Operating Expenses is explained by program closures in March through the end of the
Fiscal Year and the Fiscal Health Contingency Plan guidelines surrounding mandatory spending. Only purchases related
to maintenance were approved and carried forth. In addition, Trips and Meetings and Education and Training accounts
were not fully expended due to COVID-19 restrictions on travel and professional development opportunities. Staff still
registered for trainings, but they were on-line and less expensive in nature due to no travel costs. In addition, the TRI
is a large percentage of the Community Services Misc. Materials and Supplies Budget and the cancellation of the TRI
produced significant savings for Community Services.
Staffing
Staff savings is predominately in Temporary Staffing due to program closures and staff furloughs. There were
additional staffing savings realized in Recreation Administration Regular Salaries from a staff vacancy and temporary
salary savings in Ranger Service also due to staff vacancies. In addition, a Regular Ranger employee took an extended
leave of absence which resulted in unanticipated regular salary savings.
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 308,150$ 445,454$ 275,345$ 170,109$ 281,225$
Other Operating Expenses 383,325$ 362,464$ 241,806$ 120,658$ 411,490$
Salaries and Benefits 3,362,991$ 3,517,812$ 3,133,476$ 384,336$ 3,453,952$
Utilities 105,745$ 127,634$ 95,329$ 32,305$ 127,634$
TOTAL 4,160,211$ 4,453,364$ 3,745,956$ 707,408$ 4,274,301$
Parks & Recreation 2019-20
Performance Measures Target Result
Pop up Events to Activate our Parks and Facilities 12 Events 17 Events
Increased Community Awareness of Recreational Activities 10% 30%
Miles of Trails/Roads Maintained in the City Open Space 57 Miles 57 Miles
Parks & Recreation
22
Utilities
Utilities savings is directly related to Golf Course operations and course closure from March 19, 2020 through June
30, 2020. Staff was diligent to fix any irrigation leaks throughout the year and so there was not an over -expended
water budget which has historically happened due to irrigation leaks.
Parks & Recreation Revenues
Facilities: Due to Spring and Summer program cancellations surrounding the Covid-19 pandemic, Facilities revenues
did not meet projected targets. Most of the revenue for the summer months is collected in spring and the largest
revenue budget is Outdoor Rentals which took the largest hit. Last year Facilities met each of its revenue targets for
Library, Indoor and Outdoor Rental Usage fees. Staff anticipates revenue targets would have been met without the
impacts of Covid-19.
Youth Services: Youth Services revenues also did not meet projected targets due to Spring program closures and the
opening of a modified summer camp (lower participant number based on COVID protocols) that lead to lower
revenues. Last year, Youth Services surpassed their revenue target.
Community Services: Community Services revenues consist of City Sponsored Special Events, Special Event –
Applications/Permit, Contract Classes and Youth and Adult Athletics. All programs strongly tied to group activity and
greatly impacted by the shelter-in place directive. The Department cancelled the SLO Tri which is the main revenue
generating event that accounts for the revenue target for City Sponsored Special Events. Last year, the Division was
able to meet revenue targets for all categories except for Special Events.
Aquatics: The SLO Swim Center was closed after the March 19,2020 shelter-in place directive and the pool did not
reopen until July 2020. The main revenue shortfalls are in Swim Instruction Fees and Daily Use Fees which account
for swim lesson payments and registration occurring largely in the Spring for the summer season. Last FY, the division
either met or almost met their revenue targets (a $3,000 - $15,000 variance). When comparing Period February
2019 balances to FY 19-20 Year End numbers, Aquatics revenues were up.
Golf: The Golf course was closed after the March 19, 2020 shelter-in place directive and did not reopen until July
2020, accounting for roughly a -42% to -46% revenue variance. A significant part of the revenue budget occurs during
spring. Note that the program did not hit revenue targets last FY but when comparing February 2019 period balances
to FY 19-20 Year End numbers, Golf revenues were up by approximately $15,000. Staff has been working on
alternative programming to increase Golf course revenue and will continue to do so. When looking at Food Sal es,
the program made more in eight months than the program made during FY 18-19.
2017-18 2018-19
Actual Actual
Recreation Administration (Misc Rev)190$ 4,039$ 3,378$ 2,013$ (1,365)$
Recreation Facilities 151,533$ 206,783$ 181,846$ 119,307$ (62,539)$
Youth Services 705,352$ 803,140$ 662,000$ 511,629$ (150,371)$
Community Services 316,741$ 347,112$ 349,804$ 189,473$ (160,331)$
Aquatics 257,384$ 283,320$ 277,779$ 145,656$ (132,123)$
Golf Course 248,774$ 227,602$ 288,122$ 167,116$ (121,006)$
TOTAL 1,679,974$ 1,871,996$ 1,762,929$ 1,135,193$ (627,736)$
FY 19-20
Revenue Forecast Actual YTD Variance Parks & Rec Revenue
Police Department
23
Police Department
The Police Department ended the fiscal year with significant positive variances in both revenues and expenditures.
The expenditure savings were mostly attributed to staffing savings; total savings at year end was $943,435 or 5.2%
of total department budget. Total revenues received were more than projected for the year, this was related to an
increase in Administrative Citation revenue and Alarm permit revenue.
Fiscal Health Response Plan: The Police Department made several operating budget reductions as part of the three-
year fiscal health response plan. Specifically, reductions in non-staffing accounts totaled $34,450 per year. These
reductions were made to contract services, operating materials and supplies, and equipment maintenance. While
these reductions were impactful, the department was still able to achieve goals and continue to provide ongoing
service to the community.
Effects of Covid-19 on Department Operations
The Police Department provides emergency response to the City of San Luis Obispo and as such, the department has
played an important role in response to the pandemic. Officers responding to calls for service are now required to
follow policy regarding COVID-19 safety recommendations. The Police Chief and Captains were assigned to the City’s
EOC (Emergency Operations Center) as the Deputy Operations Chief and the Law En forcement Branch Leader. As a
result of increased commitments associated with COVID-19 public safety planning and response, the availability to
work on department projects or new initiatives was limited. Other department staff have also been tasked with
managing PPE (Personal Protective Equipment) inventories to ensure that officers have proper safety equipment
available daily.
As a result of COVID-19 impacts to the City’s budget, departments were asked to essentially “roll back” FY 20 -21
budget projections to FY 19-20 to help bridge the gap for revenue shortfalls. Fortunately, the Police Department
was not only able to meet this request but was able to achieve additional savings as a result of updating staffing
costs. Salary and benefits were less than projected due to new employees hired at lower steps than their
predecessors.
Key Objectives
• Police Administration - Develop goals and objectives to extend the current strategic plan for 2 additional
years.
• Investigations – Conduct pro-active investigations in crime to reduce victimization
• Support Services – Succession planning for key positions that provide critical needs to the department.
• Patrol - Continue to address adverse behavior and homeless issues within the downtown and explore
ways to manage and address homeless related issues that negatively impact our community.
• Neighborhood Services – Collaborate with patrol to improve the public outreach relating to crime trends
including but not limited to web/social media outreach, in -person presentations, media releases and
videos.
• Crime and traffic collision reduction – Continue conducting enforcement and education in the City’s most
hazardous intersections and roadways focusing on reducing collisions involving bicycles and pedestrians
and utilizing resources in the most effective way to reduce and prevent crime.
Police Department
24
Variance Analysis
Contract Services – The County’s intent to start building a new animal shelter has been delayed, most likely due to
COVID-19 and County budgetary concerns. As a result, the department did not pay the County for the City’s share of
construction costs related to the new Animal Shelter. Additionally, during the fiscal year, the City received payments
from the other cities involved in the Citygate Dispatch Feasibility Study, since we were paying on their behalf. These
funds (over $50K) were put back into the department’s operating budget (the original Purchase Order was created in
FY 18-19 and we anticipated the other cities to make payments much quicker, which did not happen). During the
fiscal year, there was a decrease in special advertising campaigns, due to impacts of COVID-19. Lastly, there were
savings in Traffic and Patrol related to equipment maintenance and the cancellation of the Bike Rodeo also due to
COVID-19.
Other Operating Expenses - The Training Chill (due to COVID and the Fiscal Health Response Plan) resulted in savings
in Education and Training accounts. A one-time SOBC for equipment purchases related to the Cannabis Detective
position did not get fully expended due to the program getting off to a slow start.
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 543,144$ 869,817$ 582,999$ 286,817$ 638,165$
Other Operating Expenses 365,188$ 329,665$ 267,324$ 62,342$ 311,940$
Salaries and Benefits 16,900,342$ 16,901,351$ 16,319,994$ 581,357$ 16,708,245$
Utilities 138,261$ 144,512$ 131,592$ 12,920$ 144,512$
Equipment Replacement Project 191,929$ 100,391$ 91,538$ 91,538$
TOTAL 17,946,936$ 18,245,345$ 17,301,910$ 943,435$ 17,802,862$
*Restricted for carryover and not included in total budget or variance amount
Police 2019-20
Performance Measures 19-20
Target
Result
Crime Reduction
The Police Department will work to reduce Part 1 Crime (defined as UCR reportable
crimes) by 5% as compared to FY 2018-19. Methods for reaching this goal include
utilizing a crime analyst position, rapid deployment of resources, increased social
media, lowest level problem solving tactics and accountability, and utilizing
intelligence led policing.
-5% -4%
Calendar
Year 2019
Increase Engagement on Internal Wellness and Employee Health
The Police Department will continue to invest in the peer counseling team and
explore the possibility of offering professional emotional and psychological support
annually. The Department will begin tracking the number of Peer Support contacts
handled by the team and look for opportunities to increase engagement with our
Employees by 5% and 10% respectively over the next two years.
5% 15%
Reduce Homelessness and Mental Health Disorders calls
Reduce calls for service within the downtown that are related to homelessness
and/or mental health disorders by 5% each year with a focus on ensuring 100% of
our staff is trained in Crisis Intervention Training (CIT) and work towards getting some
officer and supervisor trained in the 80-hour hostage negotiation training, to address
the growing needs surrounding homelessness and mental health issues within
downtown.
-2.5% -7.36%
Calendar
Year 2019
Police Department
25
Staffing – Savings in staffing accounted for most of the Department’s overall yearend savings. Keeping a close eye on
overtime hours prior to June helped contribute to savings. According to year -end unaudited financials, the
department’s total overtime expenditures were approximately $975K. In comparison, FY 18 -19 overtime
expenditures were about $1,188,760. Regular salary savings was accrued in Patrol due to hiring several officers at
much lower rates (Step 1 and/or 2) compared to their predecessors who were budgeted at higher steps. During the
hiring process, the positions were vacant due to the background and testing process, which also contributed to
savings. There were also savings from Temporary Salaries for SNAP employees due to COVID-19. Support Services
also had savings due to some vacancies during the year; a Records Clerk position for over two months and a
Communications Technician Supervisor for about four and a half months and hiring the position at entry leve l.
Notable savings in benefits were related to Retiree Healthcare and Employee Group Insurance – Finance will be
addressing variances related to these benefits.
Utilities – The department achieved savings in Electricity. Usage and some minor rate changes may have contributed
to savings. Additionally, savings from this account helped offset minor overages with Sewer and Gas expenditures.
Staff will continue to monitor accounts and adjust budgeting as needed.
Equipment Replacement Fund - The new police equipment replacement project was set up using one-time funding
from the adopted 19-21 Financial Plan. This funding is tracked in a project account and the balance will be
automatically carried forward from year to year.
Police Revenue
The Police Department exceeded FY2020 revenue forecasts by $295K. Administrative Citations had a significant
variance at year end, revenue exceeded projections by about $93K; this was due to an increase in the number of
citations issued during the year. Overall, administrative cites increased by about 57% compared to FY 18-19. Most
notable were citations related to noise/party and drinking alcohol in public. Revenues related to Alarm Permits
exceeded projections for the year by about $70K; this was more in line with actuals from 2017-18. Since there was
not a significant increase in the number of false alarms from last fiscal year, the revenue increase is related to
permits/renewals and ensuring that all businesses adhere to permit regulations.
The “Other Police Revenue” account is showing revenue exceeded projections by $136K. This account also acts as
an account for expense reimbursements and some revenue collected is offset by corresponding expenditure account
through the budget amendment request process. Types of revenue collected in the account include reimbursement
from the school district for the School Resource Officer position, reimbursement from other agencies for events
worked by SLOPD, reimbursement from other cities for their potion of costs for the dispatch feasibility study
conducted by Citygate, etc.
2017-18 2018-19
Actual Actual
Accident reports 3,434$ 2,423$ 3,400$ 3,225$ (175)$
Collision Investigation 4,723$ 5,320$ 8,000$ 3,393$ (4,607)$
Alarm Permits (Contract)162,009$ 111,505$ 100,000$ 170,786$ 70,786$
DUI Cost Recovery 29,791$ 48,976$ 34,000$ 22,359$ (11,641)$
Witness Fees 3,850$ 6,325$ 3,000$ 3,880$ 880$
Police Dept Permits 7,608$ 7,183$ 7,000$ 4,610$ (2,390)$
Property Release Fee 1,028$ 839$ 200$ 733$ 533$
Tow Release Fee 14,474$ 12,243$ 11,000$ 9,675$ (1,325)$
Second Response 931$ 779$ 1,071$ 628$ (443)$
Tobacco Permits 27,136$ 30,577$ 21,417$ 27,998$ 6,581$
Administrative Citations 147,461$ 126,085$ 152,833$ 245,963$ 93,130$
Parking Citation-Pd Issu 66,534$ 74,743$ 75,000$ 83,179$ 8,179$
Other Police Revenue 161,189$ 228,373$ 188,426$ 324,540$ 136,114$
TOTAL 630,167$ 655,371$ 605,347$ 900,968$ 295,621$
FY 19-20
Police Revenue Revenue Forecast Actual YTD Variance
Fire Department
26
Fire Department
The Fire Department ended FY 2020 with significant savings. Overall, a total of $1,223,552 in savings was achieved,
not including the amount of approximately $1.0 million which will be carrying over to FY 2021 as part of a liability
fund encumbrance that was authorized by City Council to carry over year over year. The $1.23 million in savings was
achieved primarily due to staffing savings, as the Fire Department’s operating budget is 94% staffing costs. Additional
details regarding this significant budgetary variance is discussed below in “Variance Analysis”.
The Fire Department made several operating budget reductions as part of the three-year fiscal health response plan
in the City’s effort to reduce the unfunded liability associated with increasing employee pension costs. In FY 2021
the Fire Department reduced a total of $29,200 which includes training, operating suppl ies and utility budget
adjustments based on actuals. The department was successful in achieving these reductions last year but
maintaining the reductions in training will be difficult in the long-term. Employee development is becoming
increasingly difficult under the current training budget constraints for non-suppression personnel. These reductions
represent 40% of the total Fire Department Fiscal Health Response Plan operating budget reductions.
The Fire Department is working to make process improvement s to increase performance measures and objectives
including Total Response Time, completing development reviews within published cycle times. Additionally, the
department is working to complete a self-assessment to analyze strengths, weaknesses, opportunities, and threats
to proving a high level of service to our growing community. The self -assessment will provide framework for an
update to the department’s strategic plan and provide guidance for long-term planning efforts and budgetary needs.
Effects of Covid-19 on Department Operations
As an emergency medical services provider to the community, Fire Department staff has been on the front lines of
the pandemic and has played a large role in assisting with the City’s response. Upon activation of the City’s EOC, the
Fire Department has provided staff to fill several positions including Operations Section Coordinator, Operations Fire
Branch, Safety Officer, Media Contact for the Public Information Officer, Resource Unit Leader, and Planning Section
Deputy. While the ongoing support has been a tremendous accomplishment for staff, other projects and initiatives
have been delayed due to lack of staff time and capacity. As the City moves into a more operational status during
the pandemic, staff anticipates having increased capacity to make progress on important Fire Department projects.
The Fiscal Health Contingency Plan enacted due to lost revenues during the pandemic required the Fire Department
to eliminate all non-essential spending and travel as well as freeze non-essential vacant positions. The most
significant savings occurred in “Other Operating Expenses” which includes training, travel, and operating supplies.
The fire department did not see significant salary savings from the hiring chill due to the lack of non-essential
vacancies during the fiscal year.
In preparation for the FY20-21 supplement, the department was able to do a drastic budgetary reduction from the
original FY20-21 budget proposed in the two-year Financial Plan. An audit and true up of staffing budgets resulted
in a budgetary savings of $855,632 for FY 2021. These reductions helped the City achieve the forecasted savings
needed to bridge continued revenue shortfalls due to the pandemic.
Key Objectives
The Fire Department focused on three primary key objectives to analyze performance for FY2020: Total Response
Time (TRT), Development Plan Review Cycles and Emergency Response Training. Overall, the department has
identified room for improvement for both TRT and development review cycles. Staff is working towards completing
root cause analysis on changes in TRT to identify ways to make improvements moving forward and achieving the
90% target. The analysis will assist in identifying items that are in the immediate control of staff or help inform long-
range citywide planning needs. Additionally, the Department has identified process improvements in other areas to
Fire Department
27
assist in increased capacity to meet published development review cycles. The improvements include new mobile
inspection software and utilizing contract fire plan check services, and potentially updating review cycles times to
reflect more realistic review timelines.
Average Training hours for emergency response personnel was significantly higher than the target due to the
required training hours for the seven recently hired firefighters. The department will assess the impacts of average
training hours for personnel during COVID-19 travel restrictions and the City’s travel chill. Training remains a top
priority for the fire department and is often mandatory to maintain certification levels and licenses.
Variance Analysis
Contract Services: The Fire Department was able to achieve savings in Contract Services accounts for FY 2020. The
most significant driver of savings was related to un-utilized budget designated for contracted fire plan reviews due to
a reduced demand in FY2020. The funding for these services comes from development revenue and the budget was
based on previous year’s annual actuals, however, a lower number of contracted reviews were required over the
course of the fiscal year. The ongoing budget will be adjusted based on the new actuals. Additional savings was
achieved due to the lack of a recruit academy in FY20. Recruit Academy savings will be requested to carryover for
FY21.
Other Operating Expenses: The largest driver of savings in the “Other Operating Expense” accounts for FY 2020 came
from the fiscal health contingency plan spending freeze. Additional savings was achieved due to the lack of a recruit
academy in FY2020. Recruit Academy savings will be requested to carryover for FY21.
Staffing: The Fire Department achieved savings in staffing accounts for FY 2020 for several major reasons. The Fire
Department’s Operating Budget is 94% staffing related and savings in staffing can lead to significant overall savings
for the department, which was observed in FY20. Across the entire department there was saving in “Retiree
Healthcare” in each staffed cost center. These savings were unanticipated and are not budgeted by fire department
staff. Additionally, the salary and benefit budgets were higher than necessary likely due to incorrect modifiers used in
the budgeting platform which dictates employee salary step levels, retirement costs and actual healthcare benefits.
An example of this includes the seven newly hired firefighters who were budgeted to beg in employment at Step 2
with selected “Employee + 2” health insurance coverage. In actuality, the seven firefighters were hired at Step 1
1 Total Response Time is 7/1/2019 to 4/23/2020. Unable to secure statistics through 6/30/2020 due to staff commitments to
extended mutual aid incidents during the 2020 California Lightning Fire Siege.
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 223,877$ 404,757$ 233,841$ 170,916$ 192,354$
Other Operating Expenses 409,803$ 477,584$ 363,460$ 114,123$ 384,701$
Salaries and Benefits 13,040,899$ 12,621,303$ 11,697,939$ 923,365$ 11,925,573$
Utilities 96,588$ 103,150$ 88,003$ 15,147$ 113,150$
Equipment Replacement Project 1,004,677$ 1,004,677$ 1,004,677$
TOTAL 13,771,167$ 13,606,794$ 12,383,242$ 1,223,552$ 12,615,778$
*Restricted for carryover and not included in total budget or variance amount
Fire Department 2019-20
Performance Measures Target Result
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%1
Percentage of Fire Department Development Review activities completed
within published cycle times.
80% 63%
Emergency Response Average Annual Training Hours Per Employee 175 236
Fire Department
28
without families and did not require the more costly health insurance coverage. Adjustments were made for FY 2021
to ensure budgets more accurately reflect actual budgetary needs and resulted in a substantially lower staffing
budget. Additional Cost Center specific significant variance drivers have been summarized below:
1. Fire Administration:
a. Vacancy – The Deputy Fire Chief Position was vacant for the first two months of the fiscal year.
2. Emergency Response
a. Vacancies – One firefighter position remained vacant the entire fiscal year after the retirement of a
Battalion Chief at the end of FY19. There was an additional firefighter vacancy starting halfway
through the fiscal year.
b. Budgeting – Over $103,000 was budgeted for mutual aid response contract employees in FY19
continued in FY2020. This budget was not required for FY20 due to the lack of mutual aid contract
employees during the fiscal year and the budget should have been eliminated. Additionally, the new
2020-2024 California Fire Assistance Agreement does not allow for the reimbursement of such
employees as it had allowed in the previous agreement. Staff has ensured that the FY21 budget has
been updated appropriately and does not include budget for these types of positions.
3. Fire Prevention:
a. Position Consolidation – In Quarter 3 of FY20 the Fire Marshal and Chief Building Official positions
consolidated into a single position resulting in 50% savings for the budgeted Fire Marshal Position
for the remainder of the fiscal year.
4. Fire Apparatus Services:
a. Vacancy – The Fire Mechanic Helper was assigned to Public Works Fleet division for several months
to assist with vacancies and staff injuries. The Mechanic Helper eventually filled one of the vacant
positions at the end of the Fiscal Year resulting in some additional savings.
Utilities: The Fire Department achieved savings in all utility accounts, the most significant savings was in Electricity.
Staff will continue to assess actuals when budgeting for utilities and adjust as necessary to ensure appropriate
budgeting levels. $5,000 in electricity savings was also utilized to offset overages in Emergency Response operating
supply, PPE and medical accounts.
Fire Revenue
The Fire Department exceeded FY2020 revenue forecasts by approximately 1.6%. Hazard Prevention Revenue saw
the greatest variances from the forecasts as there was a significant decrease in the number of fire plan checks, which
was offset by an increase in inspection activity and permit related fees. The Fire Department will continue to monitor
fire prevention activity and make revenue forecast updates accordingly.
Additionally, the Fire Department secured over $433,000 in gross revenue as part of mutual -aid responses to fires
and disasters occurring throughout the state. The Fire Department is reimbursed for staffing and travel costs
2017-18 2018-19
Actual Actual
Cal Poly Fire Services 284,408$ 296,090$ 314,937$ 318,058$ 3,121$
Medical Er Recovery 181,133$ 188,198$ 194,409$ 194,409$ -$
R1 Inspection Fees 284,169$ 306,242$ 260,000$ 299,566$ 39,566$
Other Fire Dept. Revenue 11,228$ 7,060$ 5,890$ 34,809$ 28,919$
Fire Dept Permit Fees 103,777$ 111,885$ 100,000$ 107,430$ 7,430$
Fire Plan Check 393,704$ 379,622$ 399,000$ 300,833$ (98,167)$
Fire Alarm Permits 7,113$ 1,541$ 2,677$ 10,451$ 7,774$
Cupa Inspection Fees 177,442$ 162,797$ 140,000$ 173,984$ 33,984$
Mutual Aid -$ 433,254$ 433,254$
TOTAL 1,442,973$ 1,453,435$ 1,416,913$ 1,872,794$ 455,881$
Fire Revenue Revenue Forecast Actual YTD Variance
FY 19-20
Fire Department
29
associated with these responses and recover an additional administrative fee for the staff time required to manage
the participation in the mutual aid system. Of the $433,000 in gross mutual aid revenue $329,500 was utilized to
offset costs incurred by the department. The remaining approximate $100,000 is net revenue for the general fund.
Insurance Fund
30
Insurance Fund
The City is a member of the California Joint Powers Insurance Authority (CJPIA) for liability and workers’
compensation insurance coverage. Two different approaches are used to manage these programs. The City
participates in a self-insured retention (SIR) program for liability claims that allows the City to pay the direct cost of
liability claims, with the security of excess insurance should a large claim occur. Risk is pooled among member
agencies for the purposes of workers’ compensation claims. Since FY2016, there has been a concerted effort to
reduce the number and cost of liability and workers’ compensation claims by 30% over a three-year period.
Approximately $4.4 million was transferred from Human Resources Administration to the Insurance Fund at th e
beginning of Fiscal year 2019-20 to better track and manage the costs associated with liability, workers
compensation, and other ancillary insurances such as property, crime, and pollution. Insurance premiums, required
annual deposits, and estimated liability claims expenditures are now all budgeted in this fund.
The starting benchmark for annual cost of liability claims paid was $465k and the end goal was to achieve a maximum
annual amount for claims paid of $325k by the end of FY2018-19. While there were fluctuations from year to year,
the end goal of this effort was achieved. Liability claims paid for FY2019 -20 total $213k to date and even if all
outstanding claims are settled at their reserve values, the year-end total expenditures will fall below that of the
previous year. During FY2019-20 there were noteworthy reductions in three of the most frequent and costly types
of incidents: vehicle-related accidents, potholes, and slip/trips on public property.
The number of workers’ compensation claims has been consistently around 60 claims per year while the severity of
the claims has fluctuated over the last four years, sometimes exceeding targeted annual cost reductions . Overall,
since FY2016-17 the cost of claims has been trending in a downward direction, with FY2019-20 having the lowest
expenditures and reserves for outstanding claims. Comparable to years past there were 62 claims, but the average
cost per claim was substantially less, thus reducing overall costs to below targeted levels.
For fiscal year 2020-21 the Department is improving the liability and workers’ compensation claims processes by
utilizing claims assessment tools to identify root causes, budget for remedies strategically and proactively, ensure
there are adequate yet not excessive reserves in the Insurance Fund, and evaluate the efficiency of associated
administrative fees.
Effects of Covid-19 on the Insurance Fund
The decrease in the number of liability claims paid may be attributable in part to the reduction in vehicles on the
roadways and decrease in pedestrian activity since the onset of the Coronavirus in the last quarter of the fiscal year.
Due to the City’s proactive adherence to the Center for Disease Control (CDC) and local health guidelines,
procurement of personal protective equipment (PPE), and remote work, to date there have been minimal work-
related confirmed exposures to COVID-19; however, the City’s many essential workers remain at risk of exposure
and the City will continue to facilitate expedited testing, provide PPE as needed, and encourage remote work where
practical to minimize the potential for spread of infection.
Variance Analysis
Liability Insurance
Half of the variance can be attributed to the primary deposit for liability insurance being lower than budgeted. The
other half of the variance can be attributed to claims that have been incurred but have not been settled yet.
2018-19 2020-21
Actual*Budget Actual Variance Budget
Contract Services 4,023,805$ 4,410,000$ 4,317,957$ 92,043$ 3,818,617$
TOTAL 4,023,805$ 4,410,000$ 4,317,957$ 92,043$ 3,818,617$
*These costs were budgeted for within the HR departmental budget. Actuals added here to demonstrate variance.
Insurance Fund 2019-20
Water Fund
31
UTILITIES DEPARTMENT
Water Fund
The Water fund ended fiscal year 2020 with revenues 15% above total budget, and operating expenditures 6% below
budget. The Utilities Department is requesting that the net increase to the fund be used for specific carryover requests
and the remaining balance be returned to unreserved working capital.
Budget Actual Difference Over/Under Budget
Revenue 22,482,6072 25,855,205 3,372,598 +15%
Expenditures 17,858,744 16,730,557 1,128,187 -6%
Year-End Net Increase 4,500,785
Carryover Requests -290,750
Return to Unreserved Working Capital 4,210,035
Revenue
Water revenue was $2.12 million less than budget but this was due to timing of project reimbursement. Proceeds
from debt was expected to be $5.5 million but the first reimbursement was not received until August 2020 (fiscal year
2021). If proceeds from debt is excluded, water revenue exceeded budget by $3.37 million. This is largely the result
of higher than budgeted impact fees. Water impact fees exceeded budget by approximately $2.9 million. Water
Development Impact fees are typically budgeted very conservatively because they are not guaranteed so actual
revenue usually exceeds budget. It is also important to note that, des pite the Covid-19 economic downturn, water
service charges exceeded budget by approximately $140,000.
Operating Expenditures
The Utilities Department Water Division ended the year with approximately 6% total savings. A significant portion
of year end savings are reflected in Salaries and Benefits, Contract Services, and Utilities expenditures.
Variance Analysis
2 Budgeted figure excludes Proceeds from Debt to better demonstrate operating revenue compar ed to actual
operating expenditures.
2018-19
Actual
Investment and Property Revenue*914,697$ 50,000$ 261,756$ 211,756$
Water Service Charges and Base Fee 19,889,233$ 21,237,107$ 21,377,074$ 139,967$
Development Impact Fees 3,745,666$ 800,000$ 3,723,460$ 2,923,460$
Other Revenue 583,091$ 395,000$ 492,916$ 97,416$
Debt Proceeds -$ 5,500,000$ -$ (5,500,000)$
TOTAL 25,132,687$ 27,982,607$ 25,855,205$ (2,127,401)$
Water Revenue Revenue Forecast Actual Variance
FY 19-20
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 9,046,449$ 11,456,982$ 11,063,694$ 393,289$ 10,904,439$
Other Operating Expenses 776,304$ 882,668$ 711,690$ 170,977$ 964,612$
Salaries and Benefits 4,315,376$ 4,143,825$ 3,757,948$ 385,877$ 4,402,502$
Utilities 451,149$ 633,760$ 506,058$ 127,702$ 656,700$
TOTAL 14,589,277$ 17,117,235$ 16,039,390$ 1,077,846$ 16,928,253$
Water 2019-20
Water Fund
32
Contract Services: Savings in contract services are largely the result of funds for Water Rights legal consulting services
not spent in FY20 that will be carried over into FY21, and vacant positions throughout the year contributed to
anticipated program contracts not being fully expended in Water Resources and Water Distribution.
Other Operating Expenses: Savings from education, training, and travel because of conferences and on-site training
being cancelled due to the pandemic. Significant savings in chemical expenses were due to the Nacimiento Reservoir
being down for seven months of FY20 for pipeline repair. The water from this reservoir requires more chemicals to
treat and requires a higher level of electricity to pump water than the other two reservoirs due to distance and water
quality of Nacimiento.
Staffing: Position vacancies in Water Distribution and Water Resources contributed to savings in salaries and benefits
expenses.
Utilities: The Nacimiento pipeline being down for several months resulted in significant savings in pumping electricity.
Effects of Covid-19 on Department Operations and Revenue
Operating: The Water Division continued to provide uninterrupted essential water delivery and treatment services to
the community throughout the fiscal year even with changes in operations due to COVID 19. Changes were made to
shift assignments to allow for social distancing, and additional health and safety measures were put in place.
Capital: The Division also maintained targeted capital improvement project timelines. Further safety measures were
taken to avoid delays in construction and capital improvement project schedules.
Revenue : Despite the economic downturn, service charge revenue exceeded budget by $140,000, or .6%. When the
shelter at home order was enacted in March, the Utilities department spent significant time and energy attempting
to forecast the impacts to the Water fund. Based on the information available at the time, it was assumed that service
charge revenue would be less than budget by approximately 6%. After closely monitoring water consumption and
revenue over the past five months it has become apparent that, although commercial accounts have been using less
water because many businesses were and continue to be closed, residential accounts have been using more water
because residents have been spending more time at home. We will continue to clos ely monitor consumption and
revenue data as it becomes available.
$-
$200,000.00
$400,000.00
$600,000.00
$800,000.00
$1,000,000.00
$1,200,000.00
$1,400,000.00
$1,600,000.00
Monthly Water Revenue
Water - Normal Water Base Water - Recycled Water - Cal Poly
Water Fund
33
The red line identifies the beginning of the stay at home order.
A remaining concern is the ability of customers to pay their bills. The Governor placed a moratorium on shutting water
off for non-payment, so the Utilities Department does not have its usual ability to shut off water to customers who
do not pay. There is also a high level of unemployment which may mean that some customers simply do not have the
income to pay. As of June 30th, there was approximately $150,000 in past-due water bills. This amount has cycled up
and down since the stay-at-home order but has averaged about this same amount since April. Before Covid -19, past
due balances averaged approximately $90,000. The Utilitie s Department will resume shutting off water for non -
payment when the moratorium is lifted and after a period of time that allows the department to notify customers of
the upcoming shut-off and allows them time to pay their balance or set-up a payment plan.
Water Division Key Objectives
• Deliver raw water supplies to the City’s Water Treatment Plant in a reliable, cost -effective manner.
• Protect public health, maintain compliance with all applicable regulations and continue to provide
uninterrupted supply of high-quality water to customers through the distribution system.
• Continue water distribution system improvements in accordance with the Capital Improvement Plan.
• Coordinate the planning, development, implementation, and regulatory reporting for programs and
services related to recycled water, water conservation, and groundwater pumping.
• Manage the Water Enterprise Fund financial operations and recommend rates and revenues needed to
support program and service objectives.
• Continue implementation and tracking of strategic planning activities.
• Continue safety assessments and ensure compliance with safety regulations.
• Implement and monitor the Fiscal Health Response Plan for the water fund
Performance Measures Target Result
Drinking Water Treatment Compliance Rate 100% 100%
Prevention and Reduction of Safety Incidents 0 Incidents 8
Capital Improvement Projects Completion 100% 95%
Sewer Fund
34
Sewer Fund
The Sewer fund ended fiscal year 2020 with revenues 11% above budget, and operating expenditures 13% below
budget. The Utilities Department is requesting that the net increase to the fund be used for specific carryover
requests and then the remaining balance be returned to unreserved working capital.
Sewer Fund Budget Actual Difference Over/Under Budget
Revenue 17,442,5003 19,393,338 1,950,888 11%
Expenditures 7,715,421 6,717,157 735,829 -13%
Year-End Net Increase 2,686,717
Carryover Requests -52,350
Return to Unreserved Working Capital 2,634,637
Revenues
Sewer revenue was $47.5 million less than budget but this was due to timing of project reimbursements. Proceeds
from debt was expected to be $64.3 million but was only $14.8 million. The difference will be received in FY21. If
proceeds from debt is excluded, sewer revenue exceeded budget by $1.9 million. This is largely the result of higher
than budgeted impact fees. Sewer impact fees exceeded budget by approximately $1.7 million. Sewer Development
Impact fees are typically budgeted very conservatively because they are not guaranteed so actual revenue usually
exceeds budget. Sewer service charges were down $200,000. This is largely due to lower than budgeted sewer
revenue from the Cal Poly campus being closed.
Operating Expenditures
The Utilities Department Sewer Division ended the year with approximately 6% total savings. A significant portion
of year end savings are reflected in Salaries and Benefits, Contract Services, and Utilities expenditures.
Variance Analysis
3 Budget figure excludes Proceeds from Debt to better demonstrate operating revenue compared to actual
operating expenditures.
2018-19
Actual
Investment and Property Revenue*1,023,930$ 50,000$ 354,467$ 304,467$
Water Service Charges and Base Fee 16,536,037$ 16,612,500$ 16,407,195$ (205,305)$
Development Impact Fees 1,589,771$ 300,000$ 2,031,476$ 1,731,476$
Other Revenue 723,061$ 480,000$ 600,249$ 120,249$
Debt Proceeds -$ 64,310,573$ 14,845,739$ (49,464,834)$
TOTAL 18,848,869$ 81,753,073$ 34,239,127$ (47,513,946)$
FY 19-20
Sewer Revenue Revenue Forecast Actual Variance
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 1,003,759$ 1,134,522$ 904,739$ 229,783$ 1,065,092$
Other Operating Expenses 1,125,592$ 1,211,769$ 1,120,836$ 90,933$ 1,348,981$
Salaries and Benefits 4,375,424$ 4,335,683$ 3,903,566$ 432,117$ 4,668,962$
Utilities 547,455$ 667,450$ 588,697$ 78,753$ 758,100$
TOTAL 7,052,230$ 7,349,424$ 6,517,837$ 831,586$ 7,841,135$
Sewer 2019-20
Sewer Fund
35
Contract Services-National Pollutant Discharge Elimination System (NPDES) permit requirements for the WRRF were
postponed, and expenses for laboratory accreditation process changes were not implemented in FY20 as
anticipated.
Other Operating Expenses-Savings from education, training, and travel because of conferences and on-site training
being cancelled due to the pandemic. Additional postage expenses were a result of unanticipated, required
communication distribution to clients for the Water Shutoff Protection Act-SB998 notifications and mailings.
Staffing-Position vacancies Environmental Programs, Utilities Revenue, and the Water Quality Lab contributed to
savings in Salaries and Benefits.
Utilities- COVID-19 also reduced the need for chemical load deliveries to the WRRF, resulting in lower corresponding
energy costs.
Effects of Covid-19 on Department Operations and Revenue
Operating - The Sewer Division continued to provide uninterrupted essential recycled water delivery and
treatment services to the community throughout the fiscal year even with changes in operations due to COVID 19.
Changes were made to shift assignments to allow for social distancing, and additional sanitation measures were
put in place.
Capital - The Division also maintained targeted capital improvement project timelines. Further safety measures
were taken to avoid delays in construction and capital improvement project schedules.
Revenue – Service charge revenue was down $200,000, 1.2% from budget, because Cal Poly was closed. When the
shelter at home order was enacted in March, the Utilities Department spent significant time and energy
attempting to forecast the impacts to the Sewer fund. Based on the information available at the time, it was
assumed that service charge revenue would be less than budget by approximately 6%. After closely monitoring
water consumption and revenue over the past five months it has beco me apparent that, the largest impact to the
sewer fund resulted from lower wastewater flows on the Cal Poly campus. The campus continued to irrigate so we
did not see the same impact to the water fund. We will continue to closely monitor consumption and re venue data
as it becomes available.
The redline identifies the beginning of the stay at home order.
$-
$200,000.00
$400,000.00
$600,000.00
$800,000.00
$1,000,000.00
$1,200,000.00
Monthly Sewer Revenue
Sewer - Normal Sewer Base Sewer - Cal Poly
Sewer Fund
36
A remaining concern is the ability of customers to pay their bills. The Governor placed a moratorium on shutting
water off for non-payment, so the Utilities Department does not have its usual ability to shut off water to customers
who do not pay. There is also a high level of unemployment which may mean that some customers simply do not
have the income to pay. As of June 30th, there was approximately $150,000 in past-due sewer bills. This amount has
cycled up and down since the stay-at-home order but has averaged about this same amount since April. Before
Covid-19, past due balances averaged approximately $90,000. The Utilities Department will resume shutting off
water for non-payment when the moratorium is lifted and after a period of time that allows the department to
notify customers of the upcoming shut-off and allows them time to pay their balance or set-up a payment plan.
Wastewater Division Key Objectives
• Transport wastewater from its various sources to the Water Resource Recovery Facility (WRRF).
• Comply with non-domestic wastewater and various stormwater aspects of the Clean Water Act.
• Receive and treat millions of gallons of wastewater per day.
• Begin construction of the Water Resource Recovery Facility (WRRF) Project and the Calle San Joaquin Lift
Station.
• Provide accurate and timely collection of revenues that support the City’s water and wastewater
programs.
• Perform sampling and analyses to support wastewater, recycled water, groundwater, drinking water, San
Luis Obispo Creek watershed to project public health.
• Monitor sewer enterprise fund financial operations and recommend rates and revenues needed to
support program and service objectives.
• Continue implementation and tracking of strategic activities.
• Continue safety assessments and ensure compliance with safety regulations.
• Implement and monitor the Fiscal Health Response Plan for the wastewater fund.
4 Major maintenance of cogen which only occurs every five years.
Performance Measures Target Result
Wastewater Treatment Compliance Rate 100% 97%
Prevention and Reduction of Safety Incidents 0 Incidents 8
Self-Generated Electricity at WRRF 5% 0%4
Capital Improvement Projects Completion 100% 98%
Whale Rock Fund
37
Whale Rock Fund
The Whale Rock fund ended fiscal year 2020 with total operating expenditures 20% below budget with savings in
staffing, contract services and electric expenses. Contract Services had significant savings due to vendor expenses
being lower than originally anticipated.
Variance Analysis
Other Operating Expenses- - Savings in Construction Supplies and materials were due to unanticipated reduction of
prices for smaller tools and other related items.
Staffing-Savings from previous Operator being budgeted and paid at a higher level than current employee in the
position.
Utilities- Electrical services came in lower than budgeted. This budget line item is based on pumping needs and can
vary significantly from year to year. It is therefore budgeted conservatively but is invoiced to the partners at actual
cost.
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 302,626$ 115,587$ 54,238$ 61,349$ 174,700$
Other Operating Expenses 43,293$ 60,562$ 32,323$ 28,238$ 61,200$
Salaries and Benefits 563,002$ 608,779$ 539,902$ 68,877$ 634,497$
Utilities 226,113$ 370,500$ 250,477$ 120,023$ 226,113$
TOTAL 1,135,034$ 1,155,428$ 876,941$ 278,487$ 1,096,510$
Whale Rock 2019-20
Solid Waste – AB939 General Fund
38
Solid Waste -AB939 General Fund
The Solid Waste program is paid for by AB939 funding collected through the solid waste bills. AB939 funds may only
be used to pay for activities that divert waste from the landfill so any funds remaining at the end of the year must
remain within the Solid Waste program budget. 2019-20 was the first fiscal year that this funding was tracked
separately, and the program was not staffed until October 2019. As a result, there were significant savings in 2019-
20.
Budget Actual Difference Over/Under Budget
Revenue – AB939 173,541 169,643 (3,898) -3%
Expenditures 173,541 86,491 87,050 -50%
Year-End Net Increase $83,152
Carryover Requests $83,152
Operating Expenditures
Variance Analysis
Savings in Salaries and Benefits, Contract Services, and Operating Expenses were all because the Solid Waste
program is a new program to the City and was not staffed until October 2019. All remaining budget will be carried
over to FY 20-21 as AB939 revenue is required to fund waste diversion activities only.
Key Objectives
• Promote reuse and the avoidance of solid waste production.
• Increase organics recycling to reduce greenhouse gas emissions.
• Promote the use of reusable items to reduce solid waste generation and embedded energy costs of material
production and transportation.
• Partner with the Integrated Waste Management Authority to provide Household Hazardous Waste, Motor Oil
disposal, school education, and other community programs.
• Ensure adequate and efficient solid waste recycling services are provided to business and residents within the
City of San Luis Obispo
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 302,626$ 27,000$ 9,184$ 17,816$ 28,000$
Other Operating Expenses 43,293$ 18,510$ 4,248$ 14,262$ 18,510$
Salaries and Benefits 563,002$ 128,031$ 73,187$ 54,845$ 112,808$
TOTAL 908,921$ 173,541$ 86,619$ 86,923$ 159,318$
Solid Waste - AB939 General Fund 2019-20
Transit Fund
39
Transit Fund
The Transit Enterprise Fund ended the year with significant variances in both the anticipated expenditures and
forecasted revenues as a direct result of the COVID-19 pandemic. Specifically, while the pandemic had negative
impacts on ridership and fare revenue, there were also r educed expenditures from decreased transit service and
transit service needs. Further, the availability of CARES Act funds will supplement the Transit Fund, paying for 100%
of the operating costs of the program's services, including PPE procurements, and losses in revenue between
February 1, 2020 and June 30, 2020. Using CARES Act to fund operational costs in FY 2019 -20, will allow the Transit
Fund to use any unused balance of both State and Federal funds in later years once all CARES Act funds have been
expended.
Despite the negative impacts of the COVID-19 pandemic, the Transit Fund is stable largely due to the infusion of
CARES Act supplemental funding. Further, the reduction in service demand and provided service levels during the
pandemic have resulted in cost savings that help to offset current losses in revenues. Moving forward CARES Act
funds will be prioritized and the primary revenue source for the Transit Fund for FY 2020 -21. The unused balance of
typical FY 2020-21 annual allocations of Federal 5307 and State Transit Development Act (TDA) Funds will then be
deferred for future use in FY 2021-22. This will help build up a healthy reserve of federal and state assistance funds
to support the program in later years. Transit service levels will be monitored closely and will be programmed to
align with ridership demands so that community members have this transportation option.
Despite the unanticipated need to purchase PPE for staff and drivers, those costs were more than offset by cost
savings in contract services, salary savings and other line items resulting in the Transit Fund remaining in a good
financial position. These variances are elaborated upon later in this report. Overall, the Transit Fund met Fiscal
Health Response Plan goals largely due to aligning service levels to demand resulting in cost savings.
Effects of Covid-19 on Department Operations
Below is a summary of the impacts and changes in Transit operations in response to COVID-19.
1. Significant Decrease in Ridership. In direct response to the COVID-19 pandemic and the Shelter-In-Place
order issued on March 20, 2020, transit ridership initially decreased by as much as 80%. Ridership has only
partially rebounded since then. Transit services were reduced to match demand.
2. Reduced Transit Service Levels. Since March 20, 2020, and consistent with other regional transit providers,
service levels were adjusted down to match ridership demand. The City’s transit system moved from its
more robust “Academic Schedule” to bare minimum “Weekend S ervice” levels.
3. Cal Poly. Given Cal Poly’s uncertain needs for Transit services, a long-term agreement was delayed in favor
of a short-term agreement extension. The extension reflects a tiered contribution approach whereby Cal
Poly funds service based upon ridership. A flat fee of $150,000 is required at the beginning of the 1st
Quarter of FY 2020-21. Subsequent payments will be due quarterly based on ridership. Ridership will be
monitored via the transit vehicle farebox system. The City will provide rider ship numbers multiplied by
applicable per ride cost based on the table above. The costs include a prorated share for basic service as
well as cost of use. This approach provides a reasonable solution for both organizations. And again, the
infusion of CARES Act funds make the Transit Fund whole for any losses in revenue making the fund less
reliant on these revenues.
4. Health and Safety. Transit operational procedures were put in place to help protect passengers and drivers
from virus transmission. These measures include passenger rear-door entry only, marking off seats so that
there is some space between passengers, providing appropriate transit service frequency so that buses do
Transit Fund
40
not exceed 15 passengers at any given time, providing Public Service Announcements (PSA) to riders
consistent with County of San Luis Obispo recommendations.
Transit Services also implemented fare-free trips. This is an industry best practice, to aid the community
during emergencies and reduces contact points with drivers and customers. To reduce driver exposure risk
drivers were provided with PPE including cleaning and sterilizing solutions, nitrile gloves, HEPA filters, face
masks, driver partitions. The transit vehicles air conditioning mounted UV lights are used to enhance
disinfection.
Key Objectives
• Continue to implement Health and Safety measures in compliance with CDC guidelines.
• Continue to provide essential transit service corresponding to ridership levels.
• Obtain and maximize the use of grant funds to maintain and expand transit services
• Negotiated a new long-term fee for service agreement with Cal Poly.
• Negotiated a new fund distribution methodology with SLOCOG.
Variance Analysis
The Transit Fund operating costs are typically split equally between state and federal funding sources after deducting
the 20% farebox recovery. The state provides TDA funds based on the adopted budget and federal funds are based
upon actual costs. When the Transit Fund has savings there will be reduced federal funds being reimbursed or less
revenue.
Contract Services
The cumulative Contract Services variance results in significant savings at year end. The savings are largely related
to reduced purchased transportation cost since the level of service was reduced to “Weekend Service”. The Transit
Fund is largely subsidized for direct cost by State and Federal Funds. Th is is one-time savings and likely to be offset
by reduced revenue.
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 2,488,824$ 3,221,683$ 2,852,873$ 368,810$ 3,139,033$
Other Operating Expenses 362,677$ 295,286$ 292,421$ 2,865$ 376,800$
Salaries and Benefits 361,409$ 342,360$ 294,985$ 47,375$ 327,181$
TOTAL 3,212,910$ 3,859,329$ 3,440,279$ 419,050$ 3,843,015$
Transit 2019-20
Performance Measures Target Result
Provide service levels to meet “essential trips”
demand
450,000
annual trips
Adequate transit service levels
Procure and put into service two electric buses Fall 2021
33%
Service alignment with Sustainable
Transportation Major City goals
Enter into new long-term agreement with Cal
Poly
June 2022
25%
Increase financial support for the
program
Transit Fund
41
Other Operating Expenses
The cumulative Other Operating Expenses results in minor savings at year end. The savings are largely related to
reduced fuel cost, reduced training availability, and reduced purchases of materials and supplies. The is one -time
savings and likely to be offset by reduced revenue.
Salaries and Benefits
The cumulative Salaries and Benefits variance results in minor savings at year end. The savings are largely related
to the temporary vacancy of the Transit Assistant position and finally being filled at a reduced cost. The is one-time
savings and likely to be offset by reduced revenue.
Transit Revenues
In direct response to the pandemic SLO Transit went “Fare -Free” from March 26, 2020 until the end of the fiscal year
(June 30). Historically that loss in revenue for this time period is approximately $50,000, but FY 2019-20 revenue
would have been largely reduced if fares were charged. A similar amount of revenue reduction is expected due to
the existing revenue sharing agreement with SLO RTA. S LO RTA went “Fare-Free” as well and SLO RTA provides
revenue to the Transit Fund for regional pass use. An additional revenue reduction of $99,964 is due to Cal Poly’s
reduction of payment due to reduced service levels.
A new short-term revenue for the Transit Fund is the Coronavirus Aid, Relief, and Economic Security (CARES) Act
that provides up to $4,196,099 in direct response to pandemic operating and capital costs. $1,350,230 of those
funds will reimburse (pay for) 100% the FY 2019 -20 operations costs and losses in revenue from February 1 to June
30, 2020. The remaining amount of CARES Act funds will reimburse FY 2020 -21 costs. Due to the CARES Act
reimbursement, the unused balance of traditional State and Federal funds will be used to support Transit Services
in later years once all CARES Act funds have been expended. Both funding sources are provided on a reimbursement
process after the close of the fiscal year. These funds will be accrued to FY 19-20 once they are received.
Fund Balance - The budgeted projection presented at the 2020-21 Budget Supplement showed an anticipated fund
balance of $2.2 Million at the end of FY20. The fund balance will assist in sustaining cash flow needs until Federal
Funds are received in the Fall.
2018-19
Actual
State/Federal Funding 4,853,027$ 4,843,856$ 4,634,017$ (209,839)$
Bus Fare Revenue 759,450$ 814,491$ 630,080$ (184,411)$
Other Revenue 44,300$ 8,500$ 19,170$ 10,670$
5,656,777$ 5,666,847$ 5,283,266$ (383,581)$
FY 19-20
Transit Revenue Revenue Forecast Actual Variance
Parking Fund
42
Parking Fund
The Parking Fund finished FY 2019-20 in a stronger position than anticipated at the onset of the COVID-19 pandemic.
Parking Services was able to reduce operating expenditures, which contributed to the City’s Fiscal Health Response
Plan goals. The Parking Fund did, however, expend more than originally anticipated due to the need to increase the
Palm-Nipomo parking structure budget by $325,000, as recommended by staff and approved by Co uncil. The Year-
End net difference of approximately $1.67 million is funded by the Parking Fund’s unreserved Working Capital.
Parking Services has shown community leadership assisting with economic recovery efforts and enhancing parking
facilities with public art and restoration projects. This work has improved City infrastructure, improved customers’
experience, and has been well received by the community.
Parking Services also finalized and completed all elements of the PARCs installation at the parking structures and
Parking Services office. Parking Services continues to review the use of the equipment and how it can better suit the
needs of the community and local businesses. The use of existing equipment and staffing reassignments have been
designed to meet the current needs of the community, while work is underway to implement gateless and limited
contact parking operations in the structures and at metered spaces. Planned improvements for FY 2020 -21 include
the transition to multi-space pay-stations and the addition of mobile payment methods (Mobile Apps).
Effects of Covid-19 on Department Operations
The COVID-19 pandemic has significantly affected program operations as most fee services were suspended during
the initial order to shelter-at-home and are gradually being reimplemented to match demand. Parking Services
continue to adjust operations to facilitate social distancing measures by pursuing new technologies that limit person -
to-person interactions.
Parking Services supported the community and downtown businesses during the pandemic by establishing curbside
pickup and drop-off spaces throughout the downtown area enhancing community convenience making food and retail
businesses more accessible. Parking Services was a key member of the City’s Open SLO project and completed the
following tasks in support of the City’s overall economic response:
• Assisted Transportation Engineering to meet with downtown stakeholders and determine the appropriate
location and size of downtown parklets
• Meet with Downtown SLO frequently to ensure the Open SLO program and downtown parking changes
facilitated downtown business needs
• Created programs to incentivize the reopening of downtown businesses
• Coordinated closure and removal of metered spaces for parklet installation and road closures
• Responded to questions and concerns posed by businesses
• Provided community outreach at the beginning stages of the Open SLO implementation to ensure success of
the pilot programs
• Developed marketing and communication plan to inform the public about changes in downtown parking and
access
In the 2020-21 Budget Supplement, the Parking Fund Model was adjusted to estimate revised revenues and
expenditure for FY 2019-20 due to the economic impacts of COVID-19. Year-end operating costs were under the
projected amounts while revenues outperformed projections. These are both positive indicators of a stable Parking
Fund moving into the new fiscal year.
For FY 2020-21, staff continued to use conservative revenue projections that considered a gradual recovery of parking
demand. Parking Services implemented significant operating reductions in contracted services by redirecting staff to
complete maintenance services, holding several positions vacant, and decreasing Supplemental Staff costs in parking
structures by focusing on automating parking structure operations to the extent possible with existing equipment.
Parking Fund
43
Several Capital Improvement Plan (CIP) projects were also deferred, and the construction of the Palm -Nipomo parking
structure was delayed until Parking Fund revenues and fund balance are normalized and parking demand has
returned.
Key Objectives
The key objectives identified in the 2019-21 Financial Plan are as follows:
• Promote economic and social vitality in the downtown core
• Implement the Conceptual Physical Plan for the City’s Center
• Provide enough parking in the commercial core for visitors and employees
• Reduce parking demand
• Implement the transportation strategy presented in the General Plan Circulation Element
*Rate increases deferred due to COVID-19 pandemic.
Variance Analysis
Contract Services – The Contract Services variance in the Parking Fund is primarily due to base budget discrepancies
during original budget preparation. When the 19-21 Financial plan was created in FY17-18, the base budget assumed
that a one-time project for archeological services ($149,000) was an on-going need. This was corrected as part the of
the 2020-21 Budget Supplement.
Other Operating Expenses – The savings in this category are a direct result of the City’s implementation of the Fiscal
Health Contingency Plan and the City’s response to COVID-19 that matched services provided to parking demand.
This allowed reduced need for operating materials and supplies as well as reduced in person training needs. This is
one-time savings.
Salaries and Benefits –This variance was primarily due to matching service levels to reduced parking demands as a
result of COVID-19, resulting in the deactivation of Supplemental Staff and holding two full-time positions open. This
is one-time savings.
Utilities –This savings is predominately due to citywide postponed water and sewer rate increases. This is a one-time
savings; significant rate increases have been programmed into FY 2020-21 to address increased electric utility costs.
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 836,243$ 885,476$ 635,576$ 249,899$ 801,465$
Other Operating Expenses 269,232$ 338,220$ 243,891$ 94,329$ 234,300$
Salaries and Benefits 1,342,233$ 1,291,185$ 1,218,617$ 72,568$ 1,177,211$
Utilities 174,295$ 171,992$ 143,858$ 28,133$ 201,178$
TOTAL 2,622,003$ 2,686,872$ 2,241,943$ 444,929$ 2,414,155$
Parking 2019-20
Performance Measures Target Result
Replace existing credit card capable parking meters with new
technology that improves on-street parking management 50% 25%
Implement system-wide rate increases 100% 0%*
Partially fund CIP Engineering position to assist with Parking Fund
maintenance projects 100% 100%
Add overnight security for all parking structures 100% 100%
Parking Fund
44
Revenues – Due to the economic impacts of COVID-19 and reduced parking demand, the Parking Fund revenue
variance results in significant decrease than forecasted. The Parking Fund forecasted that no revenue collection would
occur from March 2020 through the end of the fiscal year due to the COVID -19 pandemic and shutdown of the
economy that followed it. Since that time, some revenue has been collected as parking programs have been slowly
brought back to match demand. Parking Services is cautiously optimistic that revenues will outperform forecasts for
FY 2020-21.
Parking Fund Revenues Budget Actual Variance
Interest on Investments $64,400 $211,091 $146,691
Fines and Forfeitures $631,700 $602,409 -$29,291
Parking Meters $2,100,357 $1,135,811 -$957,689
Parking Structures $1,473,600 $857,404 -$616,196
Long-Term Parking $890,000 $601,496 -$288,504
Lease Revenues $283,100 $481,825 $198,725
Parking In-Lieu Fees $20,600 $15,405 -$5,195
City Employee Parking $0 $65,280 $65,280
Miscellaneous Revenue $25,241 -$689 -$25,930
Total $5,488,998 $3,970,032 -$1,512,109
Fund Balance - The Parking Fund is also responsible for debt service payments, CIP projects that add, maintain, or
improve Parking Fund assets, and General Fund transfers in addition to the operating costs listed above. General Fund
transfers include direct/indirect cost allocations, funding of two Police positions, and partial funding of CIP Engineering
position. The budgeted projection presented at the 2020-21 Budget Supplement outlined a $3.3M Shortall for FY
2019-20; however, revenues were higher than projected resulting in an improved financial position. The Parking Fund
will require approximately $1.67M of unreserved working capital to fund these costs, which is substantially lower than
the initial request at 2020-21 Budget Supplement.
Budget Actual Difference Over/Under Budget
Revenue $5,488,998 $3,970,032 -$1,512,019 -28%
Expenditures * $5,376,509 $5,538,954 -$162,445 +3%
Carryover Requests $0
Year-End Net Difference -$1,674,464
Unreserved Working Capital $12,028,000 $10,353,536 $1,674,464
*Including debt payment
Tourism Business Improvement District
45
Tourism Business Improvement District
The Tourism Business Improvement District (TBID) assessment is set at 2% of the lodging industry’s gross receipts.
The program sets an operating budget to match its anticipated yearly revenues. Due to the severe and immediate
impact of COVID-19 on the tourism industry and based on the Council approved revenue forecast adjustments, the
TBID anticipated a decline in previously forecasted revenue of approximately $500,000 in FY20. To account for the
loss in revenue, the TBID Board reduced expenses where feasible however, at year-end, a deficit between the
adjusted revenues and expenses remained. Due to the fiscal prudence of the TBID Board, the TBID Fund had a fund
balance sufficient to cover the deficit. The TBID program will be an essential piece to economic recovery once travel
restrictions will be lifted. However, in a fiscally conservative approach the City has planned for a slow recovery in
tourism in FY21. In response the TBID has further reduced expenditures primarily in Contract Services and
Promotions/Public Relations which includes a Marketing Service contract, strategic partnership commitments and
special event sponsorships to account for the budget reduction.
Effects of Covid-19 on Department Operations
In response to the pandemic, the TBID Board adopted a COVID-19 Marketing Plan in March 2020 including
preparation for large-scale outbreaks or a citywide shutdown, and a recovery plan. Following the activation of the
City’s Fiscal Health Contingency Plan, the TBID began instituting budget reductions i n the form of contract reductions
and a purchasing chill. Prior to COVID-19, the projected revenue for the TBID assessment in 2019-20 was $1.6 million
however was adjusted downward by approximately $500,000 to $1.1 million in spring to account for the fiscal
impacts resulting from COVID-19. As shown in the table below, the year-end result shows a revenue loss of almost
$458,000.
Key Objectives
• Continue the diverse marketing efforts to promote overnight stays in San Luis Obispo in alignment with
local and statewide emergency orders.
• Support the economic recovery and resiliency of San Luis Obispo through focused staff resources on
delivering a safe and appropriate visitor experience communicated through tourism marketing.
• Actively participate in local, regional, and state Visit SLO CAL, Central Coast Tourism Council, Downtown
SLO and other tourism organizations.
TBID Variance Analysis
Contract Services- Variances in the Contract Services category were due to the TBID Board instituting budget
reductions in the form of contract reductions and the implementation of the purchasing chill in the FHRP.
Other Operating Expenses- Variances in the Other Operating Expenses category were due to the TBID Board instituting
budget reductions in the form a purchasing chill under the FHRP.
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 1,301,636$ 1,370,484$ 1,126,515$ 243,970$ 978,000$
Other Operating Expenses 44,243$ 88,405$ 55,568$ 32,838$ 34,100$
Salaries and Benefits 199,721$ 203,800$ 199,314$ 4,486$ 213,320$
TOTAL 1,545,600$ 1,662,689$ 1,381,396$ 281,293$ 1,225,420$
TBID Revenues
TBID Assessment Revenue 1,598,067 1,606,000$ 1,142,523$ (463,477)$ 1,253,400$
TBID Interest on Investment 17,615 1,400$ 6,996$ 5,596$ 1,400$
TOTAL 1,615,682$ 1,607,400$ 1,149,520$ (457,880)$ 1,254,800$
TBID Expenditures 2019-20
Downtown Business Improvement District
46
Downtown SLO Business Improvement District
The Downtown Business Improvement District (DBID) was established in 1975 as a parking and promotions district for
the downtown area. As a special fee district, fees are collected from business license holders operating within a
designated area and revenue supports the operations of Downtown SLO. The City and Downtown SLO (DSLO) agreed
by contract that DSLO would provide various services for the economic, social, cultural, and environmental vitality and
beautification of downtown San Luis Obispo. The assessment is a special revenue and is administered in its separate
and distinct fund. Expenditures will always be equal to expenditures because all of the downtown assessment revenue
is remitted to the Downtown Association.
Effects of Covid-19
The Downtown Assessment is collected on the business license. Business licenses are renewed in the beginning of
each fiscal year; therefore, COVID19 had no impact on the downtown assessment for FY19-20. As businesses begin
to close and lose income due to shelter at home orders, staff expects this revenue to decrease in the coming years.
2018-19 2020-21
Actual Budget Actual Variance Budget
Contract Services 204,772$ 260,400$ 272,165$ 11,765$ 252,588$
TOTAL 204,772$ 260,400$ 272,165$ 11,765$ 252,588$
Downtown BID Revenues
Downtown Association Assessment 276,769 260,400$ 272,165$ 11,315$ 252,588$
TOTAL 276,769$ 260,400$ 272,165$ 11,315$ 252,588$
Downtown BID Expenditures 2019-20
FY 19-20
Major City Goal Update
47
2019-20 Major City Goal Update: Below is an update to all Major City Goal Tasks scheduled for
completion in FY 2019-20 (does not include ongoing tasks)
Complete an Affordable Housing Nexus Study in
alignment with HE 2.15 and HE 4.6*
CDD; All Departments; Affordable
housing & market-rate developers;
San Luis Obispo County Housing Trust
Fund
Fall 2019 Completed
Continue the Affordable Housing Monitoring
Program*CDD; Attorney Fall 2020 In progress
Complete University Transit Service Agreement
with CalPoly Public Works & CalPoly May 2021 New long-term agreement in development
Enhance Transit marketing to seniors, K-12
students, and working commuters; and with Cal
Poly, to increase ridership 5%
Public Works Fall 2020 COVID appropriate media in development
Investigate “Open Streets” events with LA CicLAvia Public Works, SLO County, SLOCOG June 2020
ON HOLD. Began discussions with SLOCOG to
partner on an a CicLAvia style Open Streets event,
but plans put on hold for forseeable future due to
COVID restrictions on large gatherings. City was
able to test smaller Open Street concept as part of
Open SLO program, which provided useful
experience towards potential future CicLAvia style
event.
Complete and Adopt Climate Action Plan Admin/All Departments April 2020 The City Council adopted the Climate Action Plan
at the August 18, 2020 City Council Meeting.
Support SLO Green Business Network and Certify
City Hall as a Green Business Admin March 2020
The SLO Green Business Network received fiscal
sponsorship through ECOSLO. Certification for City
Hall deferred due to COVID-19 impacts.
Transportation Electrification Strategic Plan PW/Admin Dec 2020 Deferred due to COVID-19 impacts.
California Re-Leaf Grant Implementation Admin/PW Dec 2019 Completed
Stormwater Business Plan Admin / Utilities June 2020 This project was deferred due to COVID-19.
Establish a 115 Pension Trust Fund, related
funding levels, and use policy. Provide monitoring
through the Investment Oversight Committee.
Finance Feb 2020
Council has approved that this funding remain in
fund balance until the effects of COVID19 are
realized. The City projects reduced revenue and
cash flow for the remainder of FY20.
Hire an additional police officer to backfill for a
school district funded School Resource Officer Police June 2020 Completed
Fund a new Cannabis Detective Position using
Cannabis Fees Police July 2019 Completed
Purchase specific equipment related to Cannabis
Detective Police 2020 Completed
Fund Police field service technician and a
Downtown Sergeant with hotel land lease revenues Police July 2019 Completed
Fully implement MOTION ERP, HCM, and Budget
modules. Develop dashboards regarding
organizational effectiveness including diversity
metrics.
Human Resources, Finance Feb 2020
Completed. Staff has decided to cancel the
implementation of the Oracle Budget Module and
re-implement it's previous budget software,
Questica. More work in progress to fully
implement HCM modules and develop useful
dashboards.
Update the EDSP to include business-based
strategies to address emergency preparedness,
climate action, etc., will cost $50,000 in contract
services and is estimated to take 20% of the
Economic Development Manager’s time.
Administration Feb 2020
The focus is currently on supporting Economic
Recovery and Resiliency efforts, but a full update
of Economic Development Strategic Plan is
targeted for mid to late 2021.
SLO Forward Initiative (funding included in
previous budget)Administration Spring 2020
At the July 21, 2020 City Council Meeting, staff
provided a recommendation to the City Council to
consider placing a General Sales Tax Measure on
the November 3, 2020 Ballot. The City Council
approved this recommendation and staff is now
continuing to work on public education.
Sustainable Transportation
Housing
Task Update
Climate Action
PROGRAMS/PROJECTS
Major Task Resp Department
Planned
Completion
Date
Fiscal Sustainability
Major City Goal Update
48
Fund Police Field Service Technician and a
Downtown Sergeant with hotel land lease revenues Police July 2019 Completed
Downtown Security Project Public Works June 2020 Deferred due to COVID-19 impacts.
Install security cameras in Mission Plaza Police, IT, PW Feb 2020 Completed
Downtown Renewal Project Public Works Spring 2020 Completed
Support Downtown SLO tree lighting and street
banner programs Administration Dec 2019 Completed
Work with Downtown SLO to update downtown tile
maps Administration Aug 2019 Completed
Continue to Implement the Mission Plaza Master
Plan including the completion of the preliminary
design for the restroom replacement project
Community Development, Public
Works, Parks & Recreation Feb 2020
Completed. A Council Study Session for the
preliminary design was completed at the February
18, 2020 Council Meeting. Council was supportive
of the design. Design and environmental work
continues.
Support the implementation of a Property-Based
Business Improvement District (also included in
Fiscal Health and Sustainability Major City Goal)
Administration Sept 2019 Completed
Create a Park & Walk informational campaign in
coordination with Downtown SLO Public Works, Administration March 2020 Completed
Downtown Vitality
CIP Update
49
Capital Improvement Plan Update:
Status*:
Completed and
Ongoing (July 2019 -
Present)
1 Fire Station 3 Painting Completed in August
2 Sewer Lining 2016 Completed in August
3 Pickleball Courts Completed in September
4 Osos-Leff-Santa Barbara Sewer Replacement Completed in September
5 Swim Center Therapy Pool Re-Plaster Completed in September
6 Fire Station 4 Emergency Backup Generator Completed in September
7 City Hall Painting Completed in September
8 South Broad Street Pavement Improvements Completed in October
9 Dispatch HVAC Replacement Completed in October
10 Silt Removal 2019 Completed in October
11 Sewer Lining 2019 Completed in October
12 Foothill Pipe Bursting Completed in November
13 Water Treatment Plant Wash Water Tank Recoat Completed in December
14 El Capitan Pedestrian Bridge Replacement Completed in December
15 SRTS Foothill Crossing Completed in December
16 Mission Plaza Railing Upgrade Completed in December
17 Stafford-Kentucky-Taft Sewer Replacement Completed in December
18 Mission Plaza Security Camera Installations Completed in March
19 Council Chamber Audio / Video Replacement Completed in March
20 Downtown Renewal: 858 Higuera Sidewalk Replacement Completed in April
21 Meadow Park Pedestrian Bridge Replacement Completed in April
22 Bridge Maintenance 2021 Completed in July
23 City Hall EV Charging Station Completed in July
24 City Hall Fire Department Connection Ongoing
25 Casa/Murray Waterline Replacements Ongoing
26 Roadway Sealing 2020 Ongoing
27 405 Foothill Stormdrain Repair Ongoing
28 Fire Station 1 HVAC Replacement Ongoing
29 South Hills Radio Site Upgrade Ongoing
30 Islay Hill Park Playground Replacement Ongoing
31 Marsh Street Bridge Replacement Ongoing
32 TTHM and Pipe Gallery Ongoing
33 RRST Taft to Pepper Award Phase
34 Swim Center Bath House Roof Award Phase
*Reflects completion of construction. Project closeout dates vary.
Completed & Ongoing Capital Projects (as of 7/23/20)
Project ID#