HomeMy WebLinkAbout11/14/2023 Item 6b, McDonald - Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: November 14, 2023
TO: Mayor and Council
FROM: Whitney McDonald, Assistant City Manager
VIA: Derek Johnson, City Manager
SUBJECT: ITEM 6B – APPROVE THE PURCHASE OF 1166 HIGUERA STREET AND
AUTHORIZE THE EXECUTION OF THE PURCHASE AND SALE
AGREEMENT
Staff received the following questions, regarding the Purchase of 1166 Higuera Street.
The questions are below with staff’s response shown in italics:
1) How did we come to the estimate of $60,800 revenue from the 1166 lot for 24-
25, but $71,000 for subsequent years? And what are the parking utilization
rates of meters already in that area of town?
Response: The revenue estimation of $60,800 in FY 24-25 is based on
surrounding on-street metered parking collected between July 2022 and
December 2022 and paid citations issued in existing surface parking lots between
January 2023 and June 2023. The revenue estimation of $71,100 for FY 25-26
and beyond for the specific 1166 Higuera line item is based on the same data but
adjusted for a previously approved hourly rate increase. However, while the entire
LTF does include the previously approved July 1, 2025 rate increase, this specific
line item was missed in the update of the LTF. As staff plans to come back to
Council with an ordinance amendment to remove the rate increase in 2025, a
revised LTF is included in this agenda correspondence to remove the additional
revenue mistakenly included beginning in FY 25-26.
2) Where does the other estimated $85,000 in revenue come from? (fifth line
down in the table)
Response: The Other Revenues line item consists of revenue from monthly
parking structure fees for approximately 92 City employees (General Fund
employee parking programs are paid for from the employee’s respective division),
reimbursements for damage to Parking Fund owned property, and miscellaneous
revenues.
Approve the Purchase of 1166 Higuera Street Page 2
3) Am I correct that if we were to decline purchase of the lot, we would add an
estimated $176,000 annually back to the Parking Fund that is not available in
this chart? That could be used for other rate adjustments, programs,
technology or communication improvements, etc. or to cover some of what
we provided already last week?
Response: Correct; however, any additional adjustments using the funds identified
for the purchase of 1166 Higuera would be subject to the same considerations
regarding the long-term fund balance as discussed on November 7, 2023.
4) What would be the impact on parking staff of adding this parking lot to your
land portfolio? Would it cause delay of other projects/existing work program
items and if so, what would be postponed to get this lot online and monitor
ongoing?
Response: The addition of a City parking lot at 1166 Higuera would have minimal
impact to current Parking operations and enforcement. New signage, pay stations,
and minor site improvements at to facilitate public parking at 1166 Higuera will be
able to be completed with minimal staff time and the use of new pay stations that
were purchased for the anticipated expansion of paid parking in the Upper
Monterey Street area.
Additionally, as much of this area is already paid on-street parking, enforcement
officers are already in the vicinity of 1166 Higuera, so additional enforcement time
is negligible.
5) What is the impact on the IIF of “lending” the balance needed for this
purchase to the parking fund? Isn’t this money earmarked for other priority
infrastructure like the Prado Overpass and Public Safety Center and would
it delay this project further?
Response: Funding in the IIF is currently planned to be used to help fund the Prado
Road Bridge & Road Widening and Prado Road Interchange in FY 2024-25 and
FY 2025-26, as shown in the table below:
Project FY 2024-25 FY 2025-26 Total
Prado Road Bridge & Road
Widening
$10,000,000 $0 $10,000,000
Prado Road Interchange $2,750,000 $1,150,000 $3,900,000
Total $12,750,000 $1,150,000 $13,900,000
At this time, it is expected that funding for these projects will be needed starting in
the first quarter of FY 2025-26. As a part of the FY 2023-24 Mid-Year Budget
Report, staff plans to recommend that a portion of the FY 2022-23 General Fund
unassigned fund balance be used to repay the IIF for the use of funding for the
1166 Higuera acquisition. Assuming approval of that recommendation, use of IIF
for the property acquisition should not impact the timing of both projects noted
above.
Approve the Purchase of 1166 Higuera Street Page 3
6) Also, since storm damage is estimated to cost approximately $35M, is it our
intention to use IIF to cover the portion of these costs that FEMA does not
cover?
Response: IIF is not currently planned to be used to fund storm damage repair
work. Funding that is contemplated to be used to repay the IIF is the FY 2022-23
General Fund unassigned fund balance, which has also been contemplated to be
used to fund storm damage repair projects and other infrastructure needs. IIF
repayment needs are not required until after the 2025-27 Financial Plan, when
repayment needs of the IIF can be addressed in the context of the larger Capital
Improvement Plan Budget. Funding would be required to be allocated to the IIF to
offset this expenditure from the 2025-27 Financial Plan if not addressed with FY
2022-23 General Fund unassigned fund balance.
Long Term Forecast With Changes to CIP and No Rate Reductions
PARKING FUND LONG-TERM FORECAST
UNAUDITED ACTUAL ADOPTED
BUDGET
REVISED PROJECTED
BUDGET BUDGETED PROJECTED PROJECTED PROJECTED PROJECTED PROJECTED
2022-23 2023-24 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
REVENUES
Service Charges
Potential Acquisition of Surface Lot - 30,400 60,800 60,800 60,800 60,800 60,800 60,800
First Hour Free - (830,000) (1,420,000) (1,420,000) (1,420,000) (1,420,000) (1,420,000) (1,420,000)
Free Parking Sunday (96,000) (163,000) (163,000) (163,000) (163,000) (163,000) (163,000)
Other Revenues 829,710 37,800 80,460 85,000 85,000 85,000 85,000 85,000 85,000
TOTAL REVENUES 7,965,182 10,203,324 9,867,163 9,395,434 9,355,034 9,811,987 9,831,306 9,601,101 9,613,340
Proceeds from Debt Financing 46,315,169 47,427,585
TOTAL REVENUES INCL. DEBT FINANCING 7,965,182 56,518,493 57,294,748 9,395,434 9,355,034 9,811,987 9,831,306 9,601,101 9,613,340
EXPENDITURES
Staffing 1,690,052 1,922,948 2,088,629 2,197,468 2,262,973 2,332,493 2,429,976 2,532,079 2,638,989
Contract Services 829,932 950,946 950,946 632,861 646,015 659,463 673,210 687,266 701,638
Other Operating Expenditures 733,292 695,046 667,660 694,888 738,601 799,681 867,973 944,469 1,030,308
General Government (CAP)872,976 1,019,048 1,019,048 1,049,619 1,102,100 1,157,205 1,215,066 1,275,819 1,339,610
Operating Transfers Out 390,646 368,233 368,233 372,223 376,333 380,566 384,926 154,183 158,809
Total Operating Expenditures 4,516,898 4,956,220 5,094,516 4,947,060 5,126,022 5,329,408 5,571,151 5,593,816 5,869,353
Potential Acquisition of Surface Lot Improvements - 125,000 - - - - - -
Total Capital Expenditures 1,936,247 48,594,961 58,989,800 882,467 631,665 1,102,292 507,612 998,814 1,209,136
Potential Acquisition of Surface Lot Loan Repayment - - 118,500 237,100 237,100 237,100 237,100 237,100 237,100
Total Debt Service 819,617 4,195,421 2,565,990 3,928,434 3,933,635 3,830,590 3,826,182 3,827,455 3,826,080
TOTAL EXPENDITURES 7,272,762 57,746,602 66,650,306 9,757,960 9,691,322 10,262,290 9,904,944 10,420,085 10,904,570
CHANGES IN FINANCIAL POSITION
BEGINNING FUND BALANCE 13,129,005 13,210,257 13,210,257 3,793,696 3,370,167 2,972,876 2,461,570 2,326,929 1,446,942
Revenue Over/(Under) Expenses $692,420 (1,228,109)($9,355,558) (362,526) (336,288) (450,303) (73,638) (818,984) (1,291,229)
ENDING FUND BALANCE W/O CALPERS DOWN PAYMENT 13,821,425 11,982,148 3,854,699 3,431,170 3,033,879 2,522,573 2,387,932 1,507,945 155,713
Cal PERS Additional Discretionary Payment (ADP) 61,003 61,003 61,003 61,003 61,003 61,003 61,003 61,003
ENDING FUND BALANCE 13,210,257 11,921,145 3,793,696 3,370,167 2,972,876 2,461,570 2,326,929 1,446,942 94,710
Policy Reserve Level - 20%896,927 1,000,202 1,027,900 997,356 1,032,104 1,071,705 1,118,945 1,169,383 1,223,314
CalPERS Trust Fund 64,896 64,896 64,896 64,896 64,896 64,896 64,896 64,896 64,896
UNRESERVED FUND BALANCE 12,248,434 10,856,047 2,700,900 2,307,915 1,875,877 1,324,969 1,143,088 212,664 (1,193,500)
2023-2025 FINANCIAL PLAN