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Home My WebLink AboutItem 7c. FY 2023-23 Year End Budget Report Item 7c Department: Finance Cost Center: 2002 For Agenda of: 10/1/2024 Placement: Business Estimated Time: 90 minutes FROM: Emily Jackson, Finance Director Prepared By: Riley Kuhn, Principal Budget Analyst SUBJECT: FY 2023-24 YEAR END BUDGET REPORT RECOMMENDATION 1. Receive and file the FY 2023-24 Year End Budget Report; and 2. Receive and discuss the Revised Long-Term Forecast, 2025-27 Financial Plan calendar and community outreach survey in preparation for the 2025-27 financial planning process. POLICY CONTEXT The City’s budget policies require that the City Council review the City’s budget and financial condition through periodic reports. This year end report satisfies the requirement for the fourth of four quarterly budget updates to Council under Financial Management Manual Section 560. This report also includes information on the City Manager’s re - appropriations of unspent operating budgets to be carried over to the current fiscal year under Financial Management Manual Section 550 -A. DISCUSSION Background Discussion about the Year End Report and upcoming Financial Plan timeline and community outreach efforts is included in the following attachments to this report:  Attachment A: FY 2023-24 Year End Budget Report is based on unaudited results which are subject to change. These preliminary results show that all major funds ended the year in good financial standing. Major tax revenue sources exceeded projections and expenditures came in below budget for all funds , though the remaining balance for the General Fund has narrowed compared to prior years. The report also includes an update on those Major City Goal tasks scheduled for completion in FY 2023-24. Staff is not recommending appropriation of unassigned fund balance at this time , due to the FY 2023-24 audit not having been completed and in an effort to reduce the number of times that the budget is adjusted throughout the year. Staff will make Page 269 of 369 Item 6a recommendations for allocation of unassigned fund balance in February 2025, as part of the FY 2024-25 Mid-Year Budget Report. This timeline also aligns with Council’s direction to staff that $2.76 million of unassigned fund balance (if available) should be allocated to the Infrastructure Investment Fund to support the increased grant amount to be provided to the San Luis Obispo Repertory Theatre with the FY 2024-25 Mid-Year Budget Report.  Attachment B: General Fund Long-Term Forecast reflects one update to the General Fund forecast published with the June 4th Supplemental Budget hearing to incorporate Council action on July 2nd, 2024 to adopt new user fee rates. No other changes have been made to the forecast since it was presented to Council with the FY 2024-25 Supplemental Budget.  Attachment C: 2025-27 Financial Plan Calendar is the first document published as part of the financial planning process and will serve as a guide through budget adoption in June. The calendar provides an overview of key dates and summary of items to be discussed at each point along the way.  Attachment D: Draft Community Priorities Survey includes the questions that staff recommend be included in the survey to help guide resource allocation and major city goals for the next Financial Plan. Previous Council or Advisory Body Action The 2023-25 Financial Plan and FY 2023-24 Budget was adopted by Council on June 6th, 2023 and mid-year changes were approved by Council on February 6th, 2024. The Revenue Enhancement Oversight Commission (REOC) has concurred with all budgeted uses of Local Revenue Measure funds. Public Engagement Public comment on this item can be provided to the City Council through written correspondence prior to the meeting and through public testimony at the meeting. The FY 2023-24 Year End Budget Report will also be posted to the City’s website for public review. CONCURRENCE All departments were involved in the preparation of the year-end budget report. Department Heads and Fiscal Officers were given ample time to review their numbers and collaborate with the Finance Department to complete their sections and review the report as a whole. FISCAL IMPACT Budgeted: N/A Budget Year: 2023-24 Funding Identified: N/A Page 270 of 369 Item 6a Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $0 $0 $0 $0 State Federal Fees Other: Total $0 $0 $0 $0 The quarterly budget report provides important information on current revenue and expenditure trends to keep the Council and community informed about the City’s financial standing and program efforts as adopted with the annual budget appropriation. There is no fiscal impact associated with the recommendations to receive, file, and discuss the attachments including the FY 2023-24 Year-End Budget Report. ALTERNATIVES Council could direct staff to adjust financial planning dates. This action is not recommended by staff because these dates were carefully selected to allow for sufficient time to be spent on each step of the process. ATTACHMENTS A - FY 2023-24 Year-End Budget Report B - General Fund Long-Term Forecast C - Budget Calendar for 2025-27 Financial Plan D - Draft 2025-27 Community Priorities Survey Page 271 of 369 Page 272 of 369 Fourth Quarter Financial Report (Year‐End) Fiscal Year 2023‐24 Introduction The fourth quarter and year‐end report provides an overview of the City’s financial position and results as of and for the year ended June 30, 2024. This report includes the General Fund and the City’s four enterprise funds. These results are shared on a preliminary basis in the interest of transparency. All figures are subject to change until the audit is completed and the FY 2023‐24 Annual Comprehensive Financial Report is published in early 2025. Table of contents General Fund Overview………………………………………..2 General Fund Expenditures…………………………………..3 General Fund Carryover………………………………………. 4 Storm Update……………………………………………………….7 General Fund Revenue………………………………………… 9 Department Summaries and Updates………………… 11 Major City Goals Update……………………………………..79 1 Page 273 of 369 General Fund Overview The General Fund finished the year with operating budget savings and higher than budgeted revenues, resulting in an (unaudited) fund balance of $8.9M. When compared to prior years, these results represent a narrowing of the favorable gap between budgeted and actual results. The drivers of these variances are also changing. In recent years, cyclical revenue streams like Sales Tax and Transient Occupancy Tax have experienced sustained growth and driven favorable revenue variances. In FY 2023‐24, the major driver of revenue performance was Investment Income, which was driven largely by market interest rates and is not expected to persist. Expenditure savings also decreased compared to prior years, reflective of lower vacancy rates and a resulting decrease to staffing savings. The chart below compares revenue and expenditure variances to prior years. The General Fund finished the year with a positive variance of $8.9M compared to budget. The City Manager authorized $1.2M in carryover requests, leaving a fund balance available of $7.7M, as shown in the table below. Table 1. General Fund Summary $5.5M $10.9M $11.6M $10.0M $8.9M ($5M) $0M $5M $10M $15M FY 2019‐20 FY 2020‐21 FY 2021‐22 FY 2022‐23 FY 2023‐24 Year ‐end Variances Revenue Expenditures General Fund Summary Favorable Revenue Variance 4,309,913 Operating Budget Savings 4,608,011 (Less carryover)(1,182,357) Fund Balance Available 7,735,567 2 Page 274 of 369 Per Council direction on June 4th with adoption of the FY 2024‐25 Supplemental Budget, staff will recommend that $2.76M of the fund balance available be allocated to the Infrastructure Investment Fund with the FY 2024‐25 Mid‐Year Budget Report in February 2025 to fund the increased contribution to the San Luis Obispo Repertory Theatre. Staff will make recommendations for allocation of the remaining balance for one‐time purposes, consistent with Section 8 of the City’s Budget Policies in the 2023‐25 Financial Plan which calls for prioritization of additional discretionary payments to CalPERS, infrastructure investments, and addressing emerging health and safety needs of the community. General Fund Expenditures The General Fund finished the year with roughly 5% of its operating budget unspent, with savings in Staffing (4%), Contract Services (9%) and Other Operating Expenditures (10%). These results are in line with historical trends and are driven in part by disciplined financial management. These savings are especially important in light of expenditures incurred as a result of the Winter 2023 storms and uncertainty around reimbursement from state and federal agencies. Table 2. General Fund Expenditures by Department All departments finished the year under budget. For detailed analysis and commentary on individual departments’ results, please refer to the ‘Department Summaries and Updates’ section. Table 3. General Fund Expenditures by Type FY 2022‐23 FY 2023‐24 FY 2024‐25 General Fund Actual Budget Actual Funds Available %Budget Admin/IT 11,500,518$ 12,096,627$ 11,461,262$ 635,366$ 5% 11,389,425$ City Attorney 1,424,496 1,708,554 1,639,424 69,131 4% 1,514,049 Community Development 7,439,031 8,982,719 8,054,778 927,941 10% 8,779,002 CSG Admin 703,825 850,725 829,679 21,045 2% 658,925 Finance 2,378,451 2,536,415 2,327,980 208,435 8% 2,616,331 Fire 15,396,897 16,148,464 15,992,147 156,317 1% 16,737,567 Human Resources 2,126,740 2,307,223 2,203,843 103,380 4% 1,957,587 Non‐Dept/Support Services 385,440 1,139,968 407,737 732,231 64% 1,225,038 Parks & Recreation 5,092,322 5,741,071 5,420,484 320,587 6% 5,981,428 Police 21,430,400 23,477,525 23,302,899 174,626 1% 23,628,167 Public Works 16,710,736 18,382,411 17,172,090 1,210,321 7% 18,205,803 Utilities 261,605 492,085 443,453 48,632 10% 363,874 Total 84,850,462$ 93,863,787$ 89,255,776$ 4,608,011$ 5% 93,057,195$ FY 2022‐23 FY 2023‐24 FY 2024‐25 General Fund Actual Budget Actual Funds Available % Budget Staffing 65,543,634$ 71,267,436$ 68,759,814$ 2,507,621$ 4% 74,136,769$ Contract Services 11,641,737 13,895,745 12,679,382 1,216,363 9% 10,569,698 Other Operating Expenditures 7,665,092 8,700,605 7,816,579 884,026 10% 8,350,728 Total 84,850,462$ 93,863,787$ 89,255,776$ 4,608,011$ 5% 93,057,195$ 3 Page 275 of 369 Unspent budgets were primarily driven by staffing vacancies. Non‐staffing savings were seen across most departments and in many instances reflect budgeted projects that were not completed and will be funded in the current year with carryover. The table below compares actual staffing savings to the 3% of salary costs that staff assumed would be saved in FY 2023‐24. In total, staffing savings contributed $2.5M to fund balance available at year end. Table 4. Staffing Savings General Fund Carryover As allowed by Financial Management Manual Section 550‐A, operating program appropriations not spent during the first year of the Financial Plan may be carried over for specific purposes into the second year with the approval of the City Manager. Of the $4.6m in unspent operating budgets, $1.9m was requested for carryover to FY 2024‐25. The City Manager approved $1.2m of these requests after eliminating requests that would create ongoing funding obligations, had other available funding sources, or were otherwise not in line with policy. This marks a significant reduction from approved carryover amounts of $2.6m from FY 2021‐22 and $1.5m from FY 2019‐20. The reduced carryover prioritizes a year‐end contribution to the Infrastructure Investment Fund (IIF) to ensure availability of funding for the additional contribution to the San Luis Obispo Repertory Theatre approved by Council with adoption of the FY 2024‐ 25 Supplemental Budget, as well as other projects that rely on funding from the IIF. Detail on requests for carryover approved by the City Manager can be found on the following pages. Staffing Savings Total Staffing Savings 2,507,621$ (Less 3% vacancy assumption) 2,138,023 Additional Savings Beyond Assumption 369,598$ 4 Page 276 of 369 Table 5. Carryover Funding 5 Page 277 of 369 Table 5. Carryover Funding (continued) 6 Page 278 of 369 Table 5. Carryover Funding (continued) Storm Update As noted in prior budget reports, the winter storms in January and March 2023 caused significant damage to City infrastructure and resulted in emergency declarations at the Federal and State level, in addition to the Emergency Services Director’s local emergency proclamation. The City Council authorized use of up to $9 million from the City’s operating reserve in FY 2022‐23 and FY 2023‐24 to address unbudgeted storm costs, and with adoption of the 2023‐25 Financial Plan, the City Council also allocated $2.75 million in the CIP to fund projects to repair storm damages and mitigate against future damage. An additional $2.1 million was allocated to storm damage repair with adoption of the FY 2024‐25 Supplemental Budget. The Federal and State declarations enable the City to seek reimbursement for certain storm related costs. The 7 Page 279 of 369 maximum reimbursement for eligible costs is 93.75% (75% from the Federal Emergency Management Agency (FEMA) and 18.75% from the California Office of Emergency Services (CalOES), meaning that the City will pay a minimum of 6.25% for certain storm related costs. The FEMA reimbursement process continues to move slowly due to turnover in the FEMA Program Delivery Managers assigned to assist local agencies in submitting projects for reimbursement and a lack of clarity about the information required in order to submit projects. In addition, FEMA is currently in a holding pattern for new obligations as the federal Disaster Relief Fund which funds public assistance to impacted agencies is nearly expended due to a record number of costly disasters. This lack of funding is not expected to put the City’s projects in danger, but it may cause a delay in projects being obligated for funding, which may impact the timing of reimbursement. The timing of reimbursement is being closely tracked, as the City’s ability to pay back the operating reserve and fund future storm‐related projects is dependent on receiving reimbursement for incurred storm costs. The City has expended approximately $12.9 million on storm response to date, including debris removal, emergency protective measures, and projects to make permanent repairs to damaged facilities. Total expenditures have not changed significantly from the prior quarter due to the fact that many projects are in the design phase. As noted in prior updates, storm related cost estimates continue to shift as projects are scoped, designed and completed. Currently, the estimated total cost to repair all storm related damage is $48.4 million, which is an increase from the $35.2 million that was reported in the Third Quarter Financial Report. This is largely related to more developed project scopes and increased level of design. Up to this point, in order to expedite project delivery to mitigate storm damage, staff has used a streamlined procurement process, including the authorization of construction contracts and change orders by the City Manager where necessary and allowable to expedite work in order to protect community health and safety. As of the writing of this report, all storm‐related expenditures have been submitted to FEMA for reimbursement and are in various stages of FEMA’s review and evaluation process. Based upon staff delivery capacity, FEMA reimbursement timeframes, and the upcoming 2025‐27 Financial Plan process, staff continues to work on the highest priority storm damage projects in order to advance them for funding consideration with the 2025‐27 Financial Plan and will continue the process to obtain FEMA reimbursement during the delivery process. The projects that are shown in Table 6 below represent the highest priority projects for delivery at this time based upon the need to mitigate previously completed projects, protect existing infrastructure, and/or represent projects that must be completed. The Elks Lane Projects are included in this list due to previous easement agreements. 8 Page 280 of 369 Table 6. Storm Projects General Fund Revenue The table below provides an overview of actual General Fund revenue compared to budget for the last fiscal year. For additional detail on fees for service, please see the relevant department writeup. Table 7. General Fund Revenue Sales and Use Tax Revenue (Including Local Revenue Measure): This revenue stream finished on budget for the year. In recent years sales tax has benefited greatly from post‐pandemic economic trends. Spending on taxable goods increased rapidly when travel and experiences were limited and stimulus checks were distributed. The inflation that followed drove continued growth. As inflation has subsided and the economy has stabilized, this rate of growth is proving unsustainable. State‐wide taxable sales are seen returning to pre‐pandemic trends in the chart from the CDTFA below. FY 2022‐23 FY 2023‐24 FY 2024‐25 Actuals Budget Actual Variance ($) Variance (%)Budget 1 Tax and Franchise Revenue 101,074,041$ 101,032,448$ 101,605,256$ 572,809$ 1% 104,967,371$ 2 Local Revenue Measure G 30,508,731 30,262,098 30,597,288 335,190 1%31,855,000 3 Sales Tax (Bradley Burns) 21,865,468 22,578,995 22,285,972 (293,023) ‐1%23,962,099 4 Property Tax 22,216,031 22,863,770 23,261,942 398,172 2%23,446,385 5 Transient Occupancy Tax 11,037,037 10,704,000 10,995,912 291,912 3%10,586,256 6 Utility User Tax 6,904,194 6,332,000 6,301,505 (30,495) 0%6,622,639 7 Business Tax 3,281,010 3,252,293 2,942,425 (309,867) ‐10%3,317,338 8 Cannabis Tax 1,127,744 1,100,000 1,031,124 (68,876) ‐6%1,100,000 9 Franchise Fees 2,349,603 2,000,000 2,366,286 366,286 18%2,091,800 10 Gas Tax 1,239,701 1,389,292 1,341,857 (47,435) ‐3%1,419,353 11 Safety Prop 172 544,521 550,000 480,944 (69,056) ‐13%566,500 12 Fees and Other Revenue 15,356,185 14,522,524 18,259,629 3,737,105 26%13,500,769 13 Development Review 6,424,716 6,275,536 6,168,815 (106,721) ‐2%6,585,331 14 Parks & Recreation 1,813,831 2,030,077 2,413,314 383,237 19%2,068,787 15 Fire 1,612,981 1,694,542 1,762,336 67,794 4%1,577,836 16 Police 763,511 766,497 1,029,274 262,778 34%468,217 17 General Government 4,741,147 3,755,873 6,885,889 3,130,016 83%2,800,598 18 Total 116,430,226$ 115,554,972$ 119,864,885$ 4,309,913$ 4%118,468,140$ 9 Page 281 of 369 https://www.cdtfa.ca.gov/formspubs/pub443ppt‐2024Q2.pdf Property Tax: This revenue stream is generally stable year over year as forecasts are provided by the County Assessor’s office. While assessments on existing homes are generally limited to 2% increases each year, the City consistently sees higher growth rates in property tax revenue. This can be attributed to growth in the tax base from newly constructed homes and changes in ownership where Prop 13 kept taxable assessed values significantly below market values. Home prices in San Luis Obispo continued to increase during the fiscal year despite mortgage rates reaching 20+ year highs. Transient Occupancy Tax (TOT): TOT finished above budget and roughly flat year over year. After another wet winter dragged on occupancy and room rates, TOT in Q4 performed very well. Utility User Tax (UUT): UUT revenue slightly exceeded budget. Due to the volatility experienced in recent years, this revenue stream is conservatively forecasted. Business Tax: This revenue stream finished under budget as delinquent payments were not collected as expected. Outreach and enforcement activities will continue in an effort to collect taxes due. Cannabis Tax: Cannabis Tax revenue was just under budget and down year over year, in line with statewide trends. Franchise Fees: Similar to UUT, Franchise Fees are assessed against utilities companies and exceeded an intentionally conservative budget. General Government: This line item includes all of the City’s non‐departmental, non‐tax revenues including business license fees, investment income, rent, grants, and other miscellaneous revenue. The most notable variance in general government revenue was investment income, which continued to outperform a conservative budget. The City generally invests its cash in highly liquid, risk free or low risk short duration credit instruments which have benefited from exceptionally high yields in recent years. The Federal Reserve has indicated that their policy rates will decrease in the current fiscal year and the City’s investment income is expected to decrease accordingly. 10 Page 282 of 369 City Administration City AdministraƟon Department A Year in Review The Office of the City Manager conƟnued to provide informaƟon and recommendaƟons to the City Council, implemented Council policies and programs and managed the day‐to‐day operaƟons of the City including the compleƟon of many Major City Goal (MCG) tasks. The City CommunicaƟons Program team worked to support City departments and the City Council in communicaƟng effecƟvely with the community during FY 2023‐24. A signiﬁcant amount of effort went into supporƟng Community Development regarding housing and homelessness informaƟon, as well as in supporƟng Public Works and the Parking Services team to help communicate changes to parking in the downtown, including Council‐adopted changes based on community input. The Economic Development program was a major contributor to the Economic Resiliency, Cultural Vitality & Fiscal Sustainability Major City Goal and the tasks managed by the program were completed as planned, including an update of the Economic Development Strategic Plan and new placemaking acƟviƟes Downtown. The Office of Sustainability and Natural Resources helped manage the Climate AcƟon, Open Space, and Sustainable TransportaƟon Major City Goal, including a new ordinance for addiƟons and remodels of exisƟng residenƟal buildings along with other policy work. The Office of Diversity, Equity, & Inclusion embarked on various projects that further build the foundaƟon of DEI in the City and has meaningful impacts in the community, including adopƟon of the DEI Strategic Plan. InformaƟon Technology staff conƟnued to advance recommendaƟons outlined in the City’s Broadband Plan by issuing a Request for Proposals and contracƟng for design and engineering of the enƟrety of the Broadband Plan build out. The City also formalized a private‐public partnership for broadband services, leading closer to connecƟng underserved areas of the city and capitalizing on grant opportuniƟes with shovel ready projects. Network Services conƟnues to develop strategic partnerships with other local agencies to share resources resulƟng in increased services at a reduced cost. The Control System Administrators completed design, installaƟon and commissioning of the Supervisory Control Access and Data AcquisiƟon (SCADA) systems at the Calle Joaquin LiŌ facility and have conƟnued to support the installaƟon and programming of the SCADA systems at the Water Resource Recovery Facility (WRRF). The InformaƟon Services team (which includes Geographic InformaƟon Systems and enterprise applicaƟon support) established working relaƟonships with the Wildland Urban Interface Fire InsƟtute to share resources and knowledge between the agencies in our region. 11 Page 283 of 369 City Administration Va riance Analysis Table 8. AdministraƟon Department Results Staffing: The Department ended the year with 4% salary savings. The savings are aƩributed to brief staffing vacancies throughout the year, including the transiƟon of the City Manager in the Spring. In some cases, a porƟon of the salary savings were uƟlized for contract consultants to ensure conƟnuity on projects and service delivery. Contract Services: The contract services budget supported delivering on the objecƟves and commitments outlined in the Major City Goals. This included DEI High Impact grants, Human Services grants, Economic Development Strategic Plan implementaƟon, Buy and Eat Local Bonus incenƟves, IT infrastructure maintenance and more. The contract services budget was under budget by 7% or $321,108 primarily due to the following: Economic Development was under budget due to the Ɵming of projects that were delayed based on shiŌs in staffing prioriƟes, new team onboarding and the implementaƟon of projects beyond June 30 outside staff control. The variance in funding and program will be addressed by uƟlizing carryover for program implementaƟon within the current ﬁscal year. Office of the City Clerk was under budget because funding for elecƟon services was allocated and Fiscal Year 2023‐24 was not an elecƟon year. Other OperaƟng Expenditures: There were no signiﬁcant variances in the Department’s other operaƟng budget this ﬁscal year. Staff effecƟvely used the operaƟng budgets to deliver programs and services. Accomplishments & Challenges Office of the City Manager – The Office of the City Manager conƟnued to provide informaƟon and recommendaƟons to the City Council, implemented Council policies and programs and managed the day‐ to‐day operaƟons of the City including the compleƟon of many Major City Goal (MCG) tasks. The City CommunicaƟons Program team worked to support City departments and the City Council in communicaƟng effecƟvely with the community during FY 2023‐24. A signiﬁcant amount of effort went into supporƟng Community Development regarding housing and homelessness informaƟon, as well as in supporƟng Public Works and the Parking Services team in the past ﬁscal year to help communicate changes FY 2022‐23 FY 2023‐24 FY 2024‐25 Admin/IT Actual Budget Actual Funds Available % Budget Staffing 5,892,994$ 6,303,472$ 6,038,015$ 265,458$ 4% 6,454,682$ Contract Services 4,516,159 4,639,610 4,318,503 321,108 7% 3,807,060 Other Operating Expenditures 1,091,366 1,153,545 1,104,745 48,800 4% 1,127,682 Total 11,500,518$ 12,096,627$ 11,461,262$ 635,366$ 5% 11,389,425$ 12 Page 284 of 369 City Administration to parking in the Downtown, including Council‐adopted changes based on community input. This required the hiring and onboarding of a new temporary contract posiƟon‐ a full‐Ɵme CommunicaƟons Coordinator. The contract for this posiƟon has been extended through the end of the current ﬁscal year, and the posiƟon will transfer to the Mobility Services Division of the Public Works Department. The team supported the creaƟon and launch of the City’s new online portal for volunteers as well as Volunteer Month; the creaƟon and rollout of the Sustainable SLO program assets; and communicaƟons focusing on the City’s Public Art Program. The team provided City staff with important learning and training opportuniƟes, including media interview training, Public Engagement & NoƟcing training, crisis communicaƟons training, website content training, and more. The CommunicaƟons Team helped create, ﬁnalize and distribute more than 400 news stories and public noƟces on the City’s website and via e‐ noƟﬁcaƟons. The Office of the City Manager also completed a comprehensive update of the LegislaƟve Plaƞorm and submiƩed 23 advocacy leƩers to local, regional, state and federal policy makers on legislaƟve maƩers important to the City. The department hosted the bi‐annual Community Academy which gave 30 community members an opportunity to spend six three‐hour sessions learning about the City. The 2024 Academy had the best aƩendance to‐date with over 90% of the parƟcipants graduaƟng. Academy parƟcipants provided posiƟve feedback on the program such as “I leŌ every session feeling even more inspired and in love with our city!” Office of Economic Development and Tourism ‐ The Economic Development program was a major contributor to the Economic Resiliency, Cultural Vitality & Fiscal Sustainability Major City Goal and the tasks managed by the program were completed as planned. The addiƟonal program funding allocated through the Major City Goal supported programs that contributed to sense of place including the Downtown acƟvaƟons for the holidays, promoƟonal campaigns to drive business like the return of the Buy Local Bonus and Eat Local Bonus programs and the development of new campaigns like SLO Restaurant Week and Downtown Summer Spending program. Funding also supported childcare grants to support our local workforce, acquisiƟon of data for the employment and economic scorecard and other smaller iniƟaƟves. In July 2023, the update of the Economic Development Strategic plan was approved by City Council which set into place the reorganizaƟon of the Office of Economic Development and Tourism resulƟng in the hiring of the two program staff posiƟons ‐ the Economic Development & Tourism Manager and the Economic Development Analyst. AddiƟonally, the Community PromoƟons program though the PromoƟonal CoordinaƟng CommiƩee (PCC), and tourism markeƟng through the Tourism Business Improvement District (TBID) conƟnued to drive signiﬁcant economic impact to SLO. Through the PCC, the City awarded $100,000 in grant funding to local non‐proﬁt organizaƟons through two grant opportuniƟes in the FY2023‐24, the Cultural Grants‐in‐Aid (GIA) and the Cultural Arts & Community PromoƟons (CACP) grant programs. AddiƟonally, the PCC also developed the ARTober campaign honoring NaƟonal Arts & HumaniƟes month in October and supported the Lunar New Year Block Party by funding the drone show, as well as created a downtown light pole banner series to celebrate Independence Day. Tourism in the City remained strong, resulƟng in $10.9 million in transient occupancy tax (TOT). This contributed to the general fund and outperformed the budget by 2%, with addiƟonal revenue sƟll expected from remaining lodging properƟes. Tourism promoƟon conƟnued to be led by the City’s TBID through Visit San Luis Obispo. 13 Page 285 of 369 City Administration Office of Sustainability and Natural Resources – The Office of Sustainability and Natural Resources (OOSNR) helped manage the Climate AcƟon, Open Space, and Sustainable TransportaƟon Major City Goal. Following the pillars of the Climate AcƟon Plan, the OOSNR achieved the following:  Lead by Example – OOSNR staff conƟnued to implement Lead by Example tasks ranging from supporƟng electric vehicle procurement to processing federal rebates in support of electrifying City faciliƟes. Staff completed and presented to Council the 2024 Lead by Example Progress Report (May 21, 2024) and has iniƟated the 2025‐29 Lead by Example Plan Update.  Clean Energy ‐ OOSNR staff conƟnued to work closely with 3CE staff to ensure that programs such as “Electrify your Fleet” and “Electrify your Home” beneﬁt the community and the City’s Lead by Example Efforts and act as the City liaison to 3CE, including supporƟng City representaƟves on the OperaƟons and Policy Boards. Since 2018, the community and City organizaƟon have received $2,529,283 in rebates for building and vehicle electriﬁcaƟon projects with 55%, or $1,392,533, of those funds being received in Fiscal Year 2023‐24.  Green Buildings – AŌer the California Restaurant AssociaƟon v. City of Berkeley Ruling upended the City’s approach to all‐electric new buildings, staff developed an alternaƟve approach for lower emissions new buildings (adopted by Council in 2023). Staff subsequently conducted a study session on policy to support exisƟng building retroﬁts in December of 2023 and returned to Council with a major addiƟons and alteraƟons policy, which was adopted on month 2024. Staff also worked with the City of Santa Barbara to submit a Department of Energy grant that would support a Building Performance Standard program (grant award noƟﬁcaƟon is expected by Fall 2024). Regarding voluntary retroﬁt programs, the City applied for and received the Department of Energy Buildings Up Prize, which has provided funding to support CAPSLO’s deployment of energy efficiency and electriﬁcaƟon improvements in mobile homes and has led to the iniƟal pilot roll out of the SLO Green and Healthy Homes Helpline.  Connected Community – OOSNR staff supported transit and micromobility efforts including extensive support on the Transit InnovaƟon Study, which was presented to Council on January 23, 2024, and the release of a bike share program RFP following Council review on May 21, 2024.  Circular Economy – Staff from the OOSNR supported UƟliƟes in their municipal waste reducƟon efforts and SB 1383 implementaƟon.  Natural SoluƟons – OOSNR staff coordinated a cultural burn in partnership with the yak Ɵtyu Ɵtyu yak Ɵlhini Northern Chumash Tribe (yƩ) and CAL FIRE at Johnson Ranch Open Space. This burn was the ﬁrst indigenous led intenƟonal landscape ﬁre in living memory. The City was awarded over $200,000 for a riparian restoraƟon project at Johnson Ranch Open Space that includes the construcƟon of 30 beaver dam analogs with Nature’s Engineers, planƟng 300 trees with ECOSLO, and restoring naƟve grasses with the yƩ and the permiƫng process for these projects is underway. In addiƟon to the work menƟoned above, OOSNR staff have led the iniƟal Cal Poly College Corps cohort, which brought 9 college students for the Fiscal Year to support work in mulƟple departments including AdministraƟon, CDD, UƟliƟes, and Public Works. OOSNR staff also led the new and improved Green Team. AddiƟonally, OOSNR staff led the development and deployment of the Sustainable SLO graphic that has been added to the City’s various sustainability assets ranging from buses to vehicles to waste receptacles. To complement the physical branding, staff led an educaƟonal community campaign to highlight the City’s progress towards carbon neutral municipal operaƟons. 14 Page 286 of 369 City Administration Office of the City Clerk – The Office of the City Clerk processed and staffed 42 City Council meeƟng, which is a record number of meeƟngs in a ﬁscal year. Staff also conƟnued the implementaƟon of the agenda management system by training and supporƟng the staff liaisons of the Tree CommiƩee, ConstrucƟon Board of Appeals, Human RelaƟons CommiƩee, Tourism Business Improvement CommiƩee and PromoƟonal CoordinaƟng CommiƩee to create and post their agenda packets in the system. In addiƟon, Clerk’s Office prepared for the 2024 Municipal ElecƟon. Office of Diversity, Equity, and Inclusion ‐ The Office of Diversity, Equity, & Inclusion embarked on various projects that further build the foundaƟon of DEI in the City and has meaningful impacts in the community. The ﬁrst project was the 10‐month in‐depth development of the City’s ﬁrst Diversity, Equity, & Inclusion Strategic Plan (DEISP). The DEISP establishes the overarching goals that intenƟonally integrate DEI principles into the fabric of the City’s community and organizaƟonal culture. The plan will beneﬁt the City in providing clear direcƟon propelled by well‐deﬁned objecƟves and tacƟcs that carefully align with the City Council’s vision for the community, sets in moƟon realisƟc and ambiƟous iniƟaƟves that foster collecƟve responsibility and deep collaboraƟon with City Departments and community partners; and it sets the stage for the advancing innovaƟon through equitable and inclusive employment pracƟces, increased meaningful community outreach and engagement. The DEISP is spans for 5 years and it aims to build upon a strong foundaƟon to further DEI in the City. Another successful project was the 2‐year MulƟcultural Programming Agreement signed with the Cal Poly Office of University Diversity and Inclusion (OUDI). The intended purpose of this program is to primarily coordinate and implement comprehensive cultural and social engagement programs to celebrate diverse cultural contribuƟons by developing spaces for learning, challenging biases, and to promote unity and belonging in the enƟre community, while also idenƟfying the needed requirements and programmaƟc efforts that lead to successful mulƟcultural spaces. A series of events have taken place, which included ﬁlm screenings, panel discussions, and workshops solely dedicated to understanding the feasibility of a mulƟcultural space and its impact in the community. A total of eight (8) events are planned per ﬁscal year, with eight more planned for Fiscal Year 2024‐25. AddiƟonally, the Office of DEI is proud to have partnered with various City Departments in key projects, which include the following: 1) Police Department: review and provided feedback on their strategic plan, 2) Community Development Department: development and soon to be‐released Gender and Racial Equity Statements that are to be used to apply for state affordable housing funding. 3) Community Development Department: provided feedback to broaden the bylaws of the ConstrucƟon Board of Appeals (CBOA) membership requirements to increase diversity. 4) Fire Department: reviewed and provided feedback to the ﬁre internship program that resulted in a higher number and diverse background of applicants. In the month of January 2024, the DEI Management Fellow, the support staff member for the Office of DEI, reduced their hours to part Ɵme, which impacted projects and processes for the last two quarters of the ﬁscal year. The limited capacity to develop training modules, content, and the ability to proctor trainings, resulted in fewer trainings completed. It is expected that these trainings can resume when the program becomes fully staffed in late 2024. InformaƟon Technology 15 Page 287 of 369 City Administration Network Services Division InformaƟon Technology staff conƟnued to advance recommendaƟons outlined in the City’s Broadband Plan by issuing a Request for Proposals and contracƟng for design and engineering of the enƟrety of the Broadband Plan build out. The City also formalized a private‐public partnership for broadband services, leading closer to connecƟng underserved areas of the city and capitalizing on grant opportuniƟes with shovel ready projects. Network Services conƟnues to develop strategic partnerships with other local agencies to share resources resulƟng in increased services at a reduced cost. By partnering with the County of San Luis Obispo and California Polytechnic State University San Luis Obispo, the City of San Luis Obispo has access to geo‐ diverse ﬁber opƟc network links to our Water Treatment Plant and mulƟple radio repeater sites that offer beƩer coverage to the areas that City staff service. The Control System Administrators completed design, installaƟon and commissioning of the Supervisory Control Access and Data AcquisiƟon (SCADA) systems at the Calle Joaquin LiŌ facility and have conƟnued to support the installaƟon and programming of the SCADA systems at the Water Resource Recovery Facility (WRRF). These systems are part of the ongoing WRRF CIP project. Control Systems Staff conƟnue to work on the development of the IgniƟon SCADA plaƞorm to replace outdated iFix systems in Water DistribuƟon and Wastewater CollecƟons and is on schedule with that project. Network Services resolved 3,357 support Ɵckets over the year, covering a range of support acƟviƟes including hardware and soŌware installaƟon, upgrades, and troubleshooƟng. InformaƟon Services Division The Oracle support team conƟnues to support Human Resources and Finance processes, including Payroll. This year, the Oracle support team implemented over 80 change requests, with more than half focused on system improvements and new features. The Oracle project team also conƟnues to produce step‐by‐step interacƟve user guides, called Oracle Guided Learning (OGL), which ease the end‐user experience for staff. AddiƟonally, the team resolved over 600 user support Ɵckets. The InformaƟon Services team completed implemenƟng the new ArcGIS Enterprise 11.1 to maintain the resilient plaƞorm for criƟcal enterprise systems such as Enterprise Permiƫng and Licensing (EPL, formerly EnerGov), Cityworks, and the ArcGIS Portal. The InformaƟon Services team supported Broadband efforts by conƟnuously updaƟng and sharing the conduit data with other agencies as well as producing numerous maps for different phases of the Broadband Project. System ApplicaƟon Specialists overseeing GIS worked on a site suitability study for the ﬁŌh ﬁre staƟon. The project involved collaboraƟon with Cal Poly GIS students, Fire, CDD, and InformaƟon Services to use the Network Analysts GIS tool to determine the four‐minute response area from potenƟal ﬁre staƟon locaƟons. This project was presented at the ESRI InternaƟonal User Conference. The InformaƟon Services team implemented a new Contractor Coordinator workgroup in Cityworks, the City’s work order and asset management system. Investments in training allows the InformaƟon Services team to do this work in‐house, saving approximately $28,000. Other notable accomplishments are: 16 Page 288 of 369 City Administration  Launched eReview for the Building Division  Implemented Self‐service Open Enrollment in Oracle  Created 181 Oracle Guided Learning interactive guides  Completed mapping of Annexation 82 and open spaces near the Miossi Ranch  Completed asset mapping of San Luis Ranch and Avila Ranch developments  Supported Lizzie Fire with situational awareness and landslide preparation planning  Completed Transparency Reporting for Community Development  Supported Vision Zero initiative with a location‐based survey and analysis  Provided sustainable option for the Finance Plus reporting The IS team established working relaƟonships with the Wildland Urban Interface Fire InsƟtute to share resources and knowledge between the agencies in our region. Currently, the City’s Fire Intern and GIS staff members are working with Cal Poly’s Natural Resources Management and Environmental Sciences (NRES) Department and WUI Fire InsƟtute on using the Simtable for emergency management training and public outreach. Performance Measures: Table 9. AdministraƟon Performance Measures Objective Measure 2023‐24 Target 2023‐24 Actual Provides City‐wide communications to the community. Strategic Goal: Citywide Communications Open City Hall Participant Satisfaction Rating 93% 92% Number of pageviews for City News Pages 350,000 105,495 Number of news e‐mail subscribers 4,500 3,476 Provides reliable IT resources to the organization and community. Strategic Goal: Information Technology Maintain City Network Reliability Uptime Status 99.9% 99.8% Data backed‐up in Terabytes 173 160 Number of GIS layers maintained 920 920 Economic Stability Strategic Goal: Economic Recovery and Stability Contacts with businesses regarding starting, expanding and/or staying in the City 75 82 Onetime funds used for direct aid to local businesses and non‐profits $175,000 $300,000 Supports our commitment to sustainability and provides open space resources to the community. Strategic Goal: Climate Action, Open Space, and Sustainable Transportation Number of Green Team Meetings 10 10 Number of Open Space Conservation Plans that will guide the long‐term protection and stewardship of natural resource values while guiding appropriate public use 1 1 Strengthens the City’s commitment to advancing Diversity Equity and Inclusion Strategic Goal: DEI Number of Citywide DEI Trainings Offered 10 6 Number of DEI Newsletters for Staff 6 6 Funds for High‐Impact DEI Grants Awarded $150,000 $150,000 17 Page 289 of 369 City Administration Number of pageviews for City News Pages This number only reﬂects the data captured from January through June 2024. This is due to factors outside of the City’s control, namely Google AnalyƟcs changed the way it calculates metrics like pageviews when it had a complete system change in 2023. This metric will be revised accordingly in future budgets. Number of news e‐mail subscribers This number only includes the City’s e‐noƟﬁcaƟons. There are an addiƟonal 6,087 email subscribers for Parks and RecreaƟon email blasts. Maintain City Network Reliability UpƟme Status The City's Core network reliability metric was affected by two signiﬁcant service outages that were outside of the City's control. The ﬁrst was a county‐wide Verizon outage that disrupted access to some UƟlity telemetry networks and Public Safety vehicles for approximately eight hours. The second was the global CrowdStrike outage. The global CrowdStrike outage coincided with scheduled maintenance work, so Network Services staff were already on‐site and were able to start miƟgaƟon efforts within a short period of Ɵme, placing us well ahead of the curve during this incident resulƟng in approximately six hours of core network downƟme. Data Backed‐Up in Terabytes The actual data backed up was reduced due to the exclusion of legacy systems that no longer require the same quanƟty of archive copies in accordance with the City’s Records RetenƟon policies. This metric will be revised accordingly in future budgets. Number of City‐Wide DEI Trainings Offered The number of city‐wide DEI trainings offered were under target due to staffing issues. It is expected that these trainings can resume when the program becomes fully staffed in late 2024 18 Page 290 of 369 TBID Tourism Business Improvement District (TBID) A Year in Review Tourism is the city of San Luis Obispo stayed strong with just under $11 million in Transient Occupancy Tax (TOT) contribuƟon into the general fund, outperforming the budget by 1.85%. Occupancy saw a very slight increase of less than 1% compared to last ﬁscal year, with an average annual rate of 68%. The growth of the Average Daily Rate (ADR) in San Luis Obispo has slowed. In 2023‐24 the annual ADR was approximately $176 dollars, which on average is essenƟally ﬂat to the previous year, but sƟll $23 higher than the pre‐ pandemic year of 2018‐19 for comparison. The last key indicator used by the TBID to gauge impact is RevPAR, deﬁned as Revenue Per Available Room. In FY 2023‐24 the annual average RevPAR was very slightly up from the prior year at the rate of $121.77 on average. The Tourism Business Improvement District (TBID) known as Visit San Luis Obispo conƟnued to lead tourism work on behalf of the City. Fiscal year 2023‐24 was the second year of implementaƟon of the two‐ year TBID Strategic MarkeƟng & Business Plan. To achieve the laid‐out goals, the TBID made new commitments with partners like Kind Traveler, a responsible travel plaƞorm, to further amplify their Sustainable SLO program Keys for Trees. The TBID also conƟnued the MidWeekend PromoƟon incenƟvizing off‐season, midweek travel and delivering more than $93,000 in direct room bookings in February and March. Other posiƟve community impacts include the support of events such as the SLO InternaƟonal Film FesƟval and Gala’s Pride and Cultural Program. In Q3, the reorganizaƟon of the Office of Economic Development & Tourism was complete with the onboarding of an Economic Development Analyst, in addiƟon to the reclassiﬁed roles of Economic Development & Tourism Manager and Tourism & Community PromoƟons Manager. Variance Analysis Table 10. Department Results Staffing – The program ended the year with a 9% savings due to the Office of Economic Development & Tourism reorganizaƟon and adjustment of staff funding from TBID & PCC budgets for two FTE. Contract Services – The 8% savings can be aƩributed almost enƟrely to media hosƟng and general event promoƟon expenses. A porƟon of the variance is due to the Ɵming of funding commitments made by the TBID Board and while they were planned to be expended in FY 2023‐24 the actual commitments were delayed and accommodated in FY 2024‐25 budget. AddiƟonally, the TBID did not expend the full budget for cooperaƟve markeƟng programs that had been earmarked for use with partner organizaƟons due to the limited offerings made available in the ﬁscal year. In accordance with the City’s Municipal Code, 12.42.080, any funds remaining at the end of any TBID term may be used in subsequent years. FY 2022‐23 FY 2023‐24 FY 2024‐25 TBID Actual Budget Actual Funds Available %Budget Staffing 184,415$ 284,674$ 260,092$ 24,583$ 9% 269,700$ Contract Services 1,691,196 2,066,799 1,895,822 170,978 8% 1,800,144 Other Operating Expenditures 28,757 34,303 20,130 14,173 41% 34,100 Total 1,904,368$ 2,385,777$ 2,176,043$ 209,733$ 9% 2,103,944$ 19 Page 291 of 369 TBID Other OperaƟng Expenses – The 41% variance is due in large part to savings in various programs such as tradeshow partnerships and overall tourism program expenses. These savings are not expected to occur in future years. However, in accordance with the City’s Municipal Code, 12.42.080 any funds remaining at the end of any TBID term may be used in subsequent years. Accomplishments & Challenges This year’s budget saw a modest increase in revenue with key performance indicators, such as Occupancy, Average Daily Rate and Revenue Per Available Room, remaining essenƟally ﬂat. In a market and industry that has seen soŌening overall, this can be considered a win. The TBID conƟnues to remain vigilant in its goals to stand out amongst a crowded landscape and be a leader in desƟnaƟon stewardship. This strategy will conƟnue to guide Visit San Luis Obispo’s growing success, driving overnight stays and increasing economic impact for the community. 20 Page 292 of 369 City Attorney City AƩorney A Year in Review As reported to City Council throughout the year, staff in the City AƩorney’s Office have managed or assisted with mulƟple, complex liƟgaƟon maƩers, including the successful seƩlement of the Langley federal court case, which alleged misapplicaƟon of evolving laws surrounding occupaƟon of, and storage of private property in, public spaces by unhoused individuals. Staff are conƟnuing to support the City’s homelessness response, including the coordinaƟon of programs outlined in the Langley seƩlement. Various long‐ standing personnel maƩers were also brought to closure or progressed signiﬁcantly during FY 2023‐24, all while staff accomplished signiﬁcant code updates; supported capital improvement, private development review, and sustainability projects; produced documents for voluminous public record, subpoena, and discovery requests; and conƟnued negoƟaƟons related to a California VoƟng Rights Act demand that the City transiƟon to district‐based elecƟons, various development agreements implementaƟon maƩers, and community partnership agreements. Variance Analysis Table 11. City AƩorney Department Results Other OperaƟng Expenditures: The savings reﬂected here are a result of a training session being rescheduled. AddiƟonal EducaƟon and Training funding was approved for the City AƩorney to aƩend the second in a series of mediaƟon courses provided in the Spring of 2024 by Pepperdine University’s Straus InsƟtute for Dispute ResoluƟon. However, aŌer registering, the session was cancelled and is being rescheduled for early 2025. The approved funds are being requested as carryover. FY 2022‐23 FY 2023‐24 FY 2024‐25 City Attorney Actual Budget Actual Funds Available %Budget Staffing 1,137,918$ 1,291,787$ 1,232,227$ 59,560$ 5% 1,426,135$ Contract Services 265,696 376,507 371,151 5,356 1% 51,644 Other Operating Expenditures 20,881 40,260 36,045 4,215 10% 36,270 Total 1,424,496$ 1,708,554$ 1,639,424$ 69,131$ 4% 1,514,049$ 21 Page 293 of 369 City Attorney Performance Measures Table 12. City AƩorney Performance Measures Objective Measure 2023‐24 Target 2023‐24 Actual Timely and Responsive legal advice and support Strategic Goal: Department Objectives Administrative Citation Appeals Received by the City 120 113 Appeals closed without need of a hearing1 25 33 City assisted corrections to defective appeals to allow access to hearing 15 21 City facilitated hearings on the record without need for personal appearance by Appellant 30 40 # of hearing days scheduled2 12 19 Legal Training & Compliance Strategic Goal: Department Objectives # of Council, Staff, and Advisory Body legal trainings, legal updates, and compliance advisory sessions 12 7 Municipal Claims, Litigation & Prosecution Management Strategic Goal: Department Objectives Percentage of Claims Resulting in Litigation <5% 4.2% Liability Claims Against the City Reviewed/Managed3 70 72 Number of multi‐count complaints filed for misdemeanor municipal code violations4 35 33 Accomplishments & Challenges During the ﬁscal year, the City AƩorney’s Office successfully onboarded a new legal assistant (probaƟonary year ended August 2024) and conƟnued the onboarding of a new paralegal (currently nearing the end of his second quarter of employment with the City). Also, the Deputy City AƩorney (“DCA”), who ﬁnished her probaƟonary year in the fall of 2023, conƟnued to thrive in her posiƟon, further bolstering our team’s ability to deliver superior legal advice and support to City staff, Planning Commission, advisory bodies and the Council. The DCA was recently recognized as an Employee of the Year in light of her valuable contribuƟons to the City and the department. While the onboarding of new staff always, and righƞully, pulls Ɵme and resources away from other maƩers, the department was sƟll able to make signiﬁcant progress on internal document processing, and Ɵmely management of requests for public records and a signiﬁcant volume of discovery and subpoena responses. The department also provided legal, invesƟgaƟve, and advocacy support for the successful conclusion of several long‐standing labor and personnel maƩers, federal and state liƟgaƟon, and provided conƟnuing support for the implementaƟon of, and resoluƟon of issues related to, ongoing development projects, including Avila Ranch, 600 Tank Farm, San Luis Ranch, and Righeƫ Ranch. In the second half of the year, the City AƩorney’s Office created and began managing a municipal code prosecuƟon diversion 1 Closed in some way that did not include a decision being issued (e.g., withdrawn by appellant, untimely filed, voided by the issuing department) 2 If more than one hearing officer convened hearings on the same day, those are counted separately. 3 Number of claims per year is a forecast and not a goal. Each year the City receives and the department coordinates review of, and response to, about this number of Claims Against the City. 4 New measure being tracked due to rise of volume and importance to the community. 22 Page 294 of 369 City Attorney and fee waiver program for certain violaƟons of the City’s municipal code in alignment with seƩlement commitments related to the Langley liƟgaƟon related to the city’s management of encampments on public properƟes maƩer. AŌer training ﬁeld and other City staff on their roles, the program launched and has its ﬁrst parƟcipants working through the steps of pursuing services and housing access support in lieu of prosecuƟon of criminal charges. Staff in the department also conƟnue to work with their non‐proﬁt, County and jusƟce partners to connect those facing City misdemeanor criminal charges with services through the court process. The City AƩorney’s Office also supported the conclusion of the receivership for the private property located at 48 Prado Road; a major code update by UƟliƟes staff; provided legal support to City staff on various Capital Improvement, real property, affordable housing, and community partnership maƩers; managed liƟgaƟon in‐house and in partnership with contract counsel; and provided guidance and training to City staff on changing laws, conﬂicts of interest, ciƟzen complaints, and many other complex legal maƩers. Overall, the department workload volume and complexity remain high, resulƟng in challenges to maintain uninterrupted focus on strategic, structural and operaƟonal improvements. Those conƟnuous improvements remain high priority issues for the office, but have to be balanced in the context of conƟnuing efforts to recruit, train and retain highly skilled staff, and the conƟnually changing prioriƟes demanded by emerging, urgent or sensiƟve maƩers. Nonetheless, staff are pleased with ongoing progress and are looking forward to conƟnued successes and the enhanced service possibiliƟes afforded by a department staffed by such talented and dedicated employees. 23 Page 295 of 369 Finance Finance Department A Year in Review The Finance Department ended the year with 8% overall savings and was able to deliver on its goals. Staff turnover was the primary driver of these savings, but the department is pleased to have reached full staffing as of year‐end. During the ﬁscal year, the department completed and assisted with numerous projects to protect the City’s ﬁnancial stability and provide value to the community. These include compleƟon of the annual audit and the Annual Comprehensive Financial Report (ACFR), numerous budget updates to Council and adopƟon of the FY 2024‐25 Supplemental Budget, a favorable debt issuance for the Cultural Arts District Parking Structure, annual business license renewal process, compleƟon of the citywide user fee study, and ongoing payroll trainings across the organizaƟon. The department also conƟnued to lead ﬁscal recovery from the Winter 2023 storm events and is working closely with the Federal Emergency Management Agency (FEMA) and California Office of Emergency Services (Cal‐OES) to submit expenditures for consideraƟon of reimbursement. The Government Finance Officers AssociaƟon once again recognized the City for excellence in ﬁnancial reporƟng and budget presentaƟon as a result of the department’s work. These awards represent the department’s commitment to preparing transparent ﬁnancial documents of the highest quality. Variance Analysis Table 13. Finance Department Results Staffing: The department realized 6% salary savings, or $114k, higher than the 3% citywide assumpƟon for vacancies. This was largely driven by vacancies in the Purchasing and Budget programs which have since been ﬁlled; the department does not expect these savings to recur. Contract Services: $70k or 12% of this budget was not spent. The majority of the savings came from the AccounƟng program, as the division had anƟcipated addiƟonal audiƟng and actuarial services that ended up being less expensive than budgeted; the remainder was from the Finance AdministraƟon program due to a focus on unplanned high priority items. The savings in AccounƟng are not expected to recur in the current year due to the one‐Ɵme nature of the addiƟonal audiƟng services budgeted for implementaƟon of new Governmental AccounƟng Standards Board (GASB) pronouncements. Other OperaƟng Expenditures: The department ended the year with $24k or 48% of this budget unspent. This included savings from Revenue Management due to budgeted Other OperaƟng Expenditures being procured under Contract Services and driving offseƫng overages in that category. Finance AdministraƟon FY 2022‐23 FY 2023‐24 FY 2024‐25 Finance Actual Budget Actual Funds Available %Budget Staffing 1,965,155$ 1,895,372$ 1,780,850$ 114,522$ 6% 2,124,521$ Contract Services 378,599 590,643 520,828 69,815 12% 441,410 Other Operating Expenditures 34,697 50,400 26,302 24,098 48% 50,400 Total 2,378,451$ 2,536,415$ 2,327,980$ 208,435$ 8% 2,616,331$ 24 Page 296 of 369 Finance and Purchasing also had savings in this category driven largely by the prioriƟzaƟon of workstreams not requiring external resources. These variances are not expected to conƟnue in FY 2024‐25. Non‐Departmental Budgets The Non‐Departmental and Support Services cost centers are managed by the Finance Department but are used to support expenditures that are not speciﬁc to an individual department. Table 14. Non‐Departmental Budget Variance Analysis Staffing: The Staffing budget includes conƟngencies for labor negoƟaƟons and other similar charges not budgeted within departments, and were largely unexpended due to departments being able to absorb the cost of unbudgeted labor cost increases. Actual costs incurred were for reƟree beneﬁts only. Other OperaƟng Expenditures: Savings of 22% or $96k of budget were driven by underspending in credit card processing fees, postage, and the Ventures & ConƟngencies (V&C) account. V&C is an annual funding source for the City Manager to award to special projects throughout the year which cannot be funded out of exisƟng operaƟng budgets. Performance Measures Table 15. Finance Performance Measures Objective Measure 2023‐24 Target 2023‐24 Actual Enables & enhances transparency, accountability & integrity. Strategic Goal: Fiscal Policies # of calendar days following year‐end until ACFR is issued 170 170* # of audits/reviews conducted / # of additional agreed upon procedure audits performed 2/2 2/2* Protects and prudently manages its financial resources. Strategic Goal: Fiscal Policies # of funds within fund balance requirements / total funds with fund balance requirements 8/8 8/8* Net annual direct debt per capita (General Fund) $39 $55 Twelve‐month total rate of return for City investments 3% 4.62% *Results of FY 2022‐23 ACFR and audits completed in FY 2023‐24 The department achieved or exceeded four out of ﬁve of its Performance Measures for the year. The addiƟonal net annual direct debt per capita is a result of the City implementaƟon of two new GASB pronouncements related to leases and subscripƟon‐based informaƟon technology arrangements (SBITAs). The impacts of these pronouncements were not known when the budget and original performance FY 2022‐23 FY 2023‐24 FY 2024‐25 Non‐Departmental Actual Budget Actual Funds Available %Budget Staffing 61,497$ 694,368$ 58,103$ 636,265$ 92% 793,338$ Other Operating Expenditures 323,943 445,600 349,634 95,966 22% 431,700 Total 385,440$ 1,139,968$ 407,737$ 732,231$ 64% 1,225,038$ 25 Page 297 of 369 Finance measures were created. The department plans to update the target for net annual direct debt per capita as part of the 2025‐27 Financial Plan. Accomplishments & Challenges Finance AdministraƟon: The AdministraƟon Division successfully completed the issuance of lease revenue bonds to ﬁnance the construcƟon of the Cultural Arts District Parking Structure. Staff also began a comprehensive review of the City’s Financial Management Manual to ensure that ﬁnancial policies and procedures meet the needs of the current organizaƟon—this effort will conƟnue into FY 2024‐25. Staff in AdministraƟon and AccounƟng also took a lead role in compleƟng the Citywide User Fee Study which was previously being led by CSG. This was a signiﬁcant unplanned work effort, but resulted in successful compleƟon of the study, with new fees approved by Council in early July. At the beginning of the year, the department was the only without dedicated administraƟve support. During the year, the Department welcomed a part‐Ɵme administraƟve assistant shared with CSG AdministraƟon and the enƟre Department is beneﬁƫng from this support, enabling other staff to focus on their assigned duƟes. Budget: The Budget Division is staffed in enƟrety by the Principal Budget Analyst. This posiƟon was vacated in September 2023 when the previous employee accepted a posiƟon in AdministraƟon. The vacancy drove signiﬁcant salary savings unƟl the posiƟon was ﬁlled in January 2024, just in Ɵ me to develop the Q3 Budget Report and FY 2024‐25 Supplemental Budget and present both to Council. Staff has also been increasingly focused on providing training and support to departmental ﬁscal officers. Revenue Management: The Revenue Management Division reclassiﬁed two of its three posiƟons to allow team members to beƩer approach the demands of the division. Following the reclassiﬁcaƟons and two successful recruitments, the team was able to improve its ability to idenƟfy potenƟal customer misreporƟng of business tax income. This pracƟce has boosted customer service, by allowing team members to beƩer idenƟfy and then conﬁrm underpayments and overpayments. While staff is currently sƟll working through potenƟal reporƟng discrepancies, the team has so far idenƟﬁed over $60,000 in business tax payment discrepancies. As noted in the ‘General Fund Summary’ secƟon of the report, Business Tax receipts were 10% under budget in FY 2023‐24. This was due to the division not being fully staffed during the last business license renewal period, when those taxes are collected. Now that the division is fully staffed with permanent employees, it is expected that Business Tax collecƟons will come in closer to budget in future years. Purchasing: The Purchasing Division was heavily focused on working with the Federal Emergency Management Agency (FEMA) and California Office of Emergency Services (CalOES) to document and submit 2023 Winter Storm projects for consideraƟon of reimbursement. Despite this unplanned workload, the division has been able to conƟnue to meet internal customer service benchmarks for coordinaƟng the City’s RFP and contract administraƟon and maintain its standard turnaround Ɵ mes for issuance of Purchase Orders to support departments in procuring the goods and services they need in order to carry out their responsibiliƟes. AccounƟng: The AccounƟng Division implemented two complex new Governmental AccounƟng Standards Board (GASB) pronouncements and enhanced the way the City’s leases and subscripƟon‐based informaƟon technology arrangements (SBITAs) are tracked and accounted for. These changes will require ongoing monitoring and cooperaƟon with all departments to remain in compliance with the GASB rules. The Accounts Payable funcƟon reclassiﬁed the Financial Assistant posiƟon to beƩer reﬂect the work 26 Page 298 of 369 Finance performed and successfully recruited a new employee to the posiƟon. In addiƟon, the Payroll funcƟon within the division conƟnues to work with consultants and IT staff to implement the Oracle system and improve the automated aspects of a fully integrated Enterprise Resource Planning/Human Capital Management plaƞorm. Payroll has also been focused on providing Ɵmecard training to staff throughout the organizaƟon, which has helped to reduce payroll errors. 27 Page 299 of 369 Human Resources Human Resources A Year in Review The Human Resources Department conƟnued to support the growing and changing organizaƟon while also striving to establish staffing stability within the department. In addiƟon to ongoing tasks, there were mulƟple highly complex personnel and labor issues that demanded a great deal of staff Ɵme. Along with that came unanƟcipated expenses for outside aƩorneys to provide legal support. Despite these challenges, the department successfully completed a high volume of recruitments, provided an array of training opportuniƟes, updated policies and procedures to comply with new regulaƟons, and negoƟated Ɵmely successor agreements with the three public safety bargaining units. Variance Analysis Table 16. Human Resources Department Results Contract Services ‐ The Human Resources (HR) AdministraƟon cost center (3001) was over budget due to unbudgeted and/or unanƟcipated expenses for outside legal counsel and hearing officers. Further, the HR department is responsible for coordinaƟng programs which have remained unbudgeted or underbudgeted for several years. For example, the City’s Day of Welcome event to onboard new employees to the organizaƟon does not currently have an allocated budget. While this cost has been unbudgeted to date, it will be appropriately addressed with the next ﬁnancial plan. Staffing ‐ The Human Resources AdministraƟon cost center (3001) was under budget due to an HR Manager vacancy for the majority of the year, an HR Analyst vacancy for two months, and an HR Specialist vacancy for four months. While temporary administraƟve staff was hired to backﬁll some work, salary savings were sƟll aƩained. The HR Manager posiƟon remains vacant following three failed recruitments, so addiƟonal savings is expected in FY 2024‐25. FY 2022‐23 FY 2023‐24 FY 2024‐25 Human Resources Actual Budget Actual Funds Available %Budget Staffing 1,404,813$ 1,433,158$ 1,321,146$ 112,012$ 8% 1,567,596$ Contract Services 640,935 813,065 822,040 (8,975) ‐1% 148,491 Other Operating Expenditures 80,993 61,000 60,657 343 1% 241,500 Total 2,126,740$ 2,307,223$ 2,203,843$ 103,380$ 4% 1,957,587$ 28 Page 300 of 369 Human Resources Performance Measures Table 17. Human Resources Performance Measures Objective Measure 2023‐24 Target 2023‐24 Actual Integrated HR Services (Strategic Goal) Average days between injury and Workers’ Compensation claim filed. 3 3 Achieved lower severity of Workers’ Compensation claims than the risk pool Yes Yes Employee Development & Growth (Strategic Goal) Percentage of On‐Time Employee Performance Evaluations 95% 97% Percentage of Internal Promotions 40% 40% Training Sessions Coordinated 20 23 Engaged and Aware Culture (Strategic Goal) Number of Policies Communicated 75 110 Informational Sessions Coordinated 200 245 Accomplishments & Challenges Accomplishments Beneﬁts: Staff conƟnues to seek ways to enhance beneﬁt offerings while making efficient use of resources. Analyses of dental, life, and long‐term disability carriers was completed that resulted in a change of carrier for life and long‐term disability insurance as well as a cost savings on the premiums. The City’s Human Resources InformaƟon System, Oracle, has also been conﬁgured to allow addiƟonal employee self‐service for various life events, which will reduce the need for paper forms and staff Ɵme to administer changes to beneﬁt selecƟons. Recruitment, ClassiﬁcaƟon and CompensaƟon: A total of 142 recruitments were completed, of which 111 of were for regular posiƟons, 16 for limited‐term contract posiƟons, and 15 for supplemental posiƟons. Five of the recruitments were for Police and Fire department promoƟons, which are more robust processes. AddiƟonally, a naƟonwide search and extensive recruitment process was completed to ﬁll the City Manager posiƟon. To ensure we are opƟmizing departmental organizaƟonal structures, HR staff supported various departments with posiƟon classiﬁcaƟon and departmental structure analyses. Labor RelaƟons: Agreements for successor Memoranda of Understanding (MOU) were reached with the City’s three public safety bargaining groups. Police Management and Fire negoƟaƟons were completed without legal counsel present on either side, demonstraƟng a strong posiƟve relaƟonship and established trust. Agreement was reached with the Police Officers’ AssociaƟon in only four meeƟngs and in advance of the prior MOU expiraƟon date. AddiƟonally, staff built a citywide labor cosƟng model to have more accurate and efficient ways of cosƟng proposals for negoƟaƟons. Training and Development: A comprehensive training plan was created to ensure the City is offering training that meets employee and organizaƟon needs as idenƟﬁed in the 2023 Employee Engagement survey. Risk Management and Wellness: The City’s Paid Sick Leave Policy was updated and a new Workplace Violence PrevenƟon Plan was implemented to comply with new legislaƟon. A preventaƟve mental health 29 Page 301 of 369 Human Resources program through The Counseling Team InternaƟonal was implemented for use by all employees in the Police and Fire departments. Those departments have also uƟlized a funcƟonal movement program funded by the California Joint Powers Insurance Authority to help reduce the cost of work‐related injuries. Other: System enhancements in Oracle and Laserﬁche are being developed for the future implementaƟon of electronic personnel ﬁles and an enhanced ﬁrst day onboarding experience for new hires. Challenges Staffing: Following three failed recruitments, the HR manager posiƟon is being intenƟonally leŌ vacant unƟl approximately June 2025. The duƟes for that posiƟon have been temporarily reassigned to both exisƟng and temporary staff. However, there has been turnover even among the temporary staff, creaƟng addiƟonal instability. High Volume of Requests: The department conƟnues to experience a noƟceable increase in the volume of recruitments and complex personnel issues. AddiƟonally, there is an increased level of requests for classiﬁcaƟon review, leaves of absence, disability accommodaƟon, and beneﬁts changes. New legislaƟve mandates effecƟve January 1, 2024, July 1, 2024 and in coming years have necessitated policy development and new system conﬁguraƟons, compounding the department’s exisƟng workload. 30 Page 302 of 369 Insurance Fund Insurance Fund A Year in Review The City is a member of the California Joint Powers Insurance Authority (CJPIA) which provides coverage for general liability and workers’ compensaƟon through pooling of losses among its members and coordinates oversight and management of claims administraƟon. The City is a member of the excess program for both liability and workers’ compensaƟon, with a $500,000 self-insured retenƟon level. Claims are managed by third party administrators, Carl Warren for Liability and Athens for Workers’ CompensaƟon. The City strives to maintain a reserve sufficient to guard against unpredictable and substanƟal claims. The reserve amount is determined based on annual actuarial report informaƟon. In addiƟon to the CJPIA member contribuƟons for liability and workers’ compensaƟon, the Fund also covers premiums for ancillary insurances such as property, crime, polluƟon, volunteers, and special events. Variance Analysis Table 18. Insurance Fund Results The Workers’ CompensaƟon Insurance account is under budget because this was the City’s ﬁrst year in the Workers’ CompensaƟon excess program with CJPIA, so budgeted amounts were approximaƟons. It is difficult to predict actual claims expenses and the Ɵming that expenses will be incurred, as claim costs tend to develop over several years. Performance Measures Table 19. Insurance Fund Performance Measures Objective Measure 2023‐24 Target 2023‐24 Actual Integrated HR Services Annual liability claims payment under the Self- Insured Retention amount. Yes Yes Accomplishments & Challenges CJPIA member contribuƟons for both liability and workers’ compensaƟon were in line with expectaƟons for this ﬁscal year. This was the ﬁrst year parƟcipaƟng in the workers’ compensaƟon excess program, which resulted in signiﬁcant savings in the CJPIA member contribuƟon. It appears that actual claim expenses to date were far less than anƟcipated. However, workers’ compensaƟon costs tend to increase over the life of each claim, some spanning several years. Similarly, Liability claim costs are volaƟle and unpredictable. Therefore, it will be important to maintain an adequate reserve in the fund. 31 Page 303 of 369 Community Service Group – Community Development Department Community Services Group (CSG) A Year in Review The CSG AdministraƟve team, led by the Assistant City Manager and a Business Services and AdministraƟve Manager, oversees the Community Service Group Analysts, which support the smooth funcƟoning of the CSG and the City's operaƟng departments. The CSG Analyst cohort is comprised of a total of ﬁve analysts: three (3) Business Analysts assigned to support Community Development, Parks & RecreaƟon, and Public Works and two (2) Financial Analysts, one assigned to UƟliƟes and the other overseeing Infrastructure Finance for the enƟre City. All ﬁve Analysts support Finance by tracking ﬁnancial trends and reporƟng, and they serve as ﬁnancial department liaisons and ﬁscal officers. Due to recent vacancies of the CSG Business and AdministraƟve Manager and the Assistant City Manager of Community Services, the oversight funcƟon of the analysts has been returned to the individual departments they are assisƟng. The Infrastructure Finance ‐ Financial Analyst and one AdministraƟve Assistant are now reporƟng to the Finance Director. The analyst cohort sƟll coordinates and works together as much as possible as ﬁscal officers address similar issues across departments, suggest policy changes, and opƟmize and standardize processes. The City Manager and Department Heads will determine the future of CSG programs and staffing assignments in FY 2024‐25. Variance Analysis The costs listed below are not speciﬁc to a department but beneﬁt each CSG department and support the cost of some funcƟons currently assigned to the Finance Department. As noted in the table below, the CSG AdministraƟon did not overspend in any major areas of its budget. Table 20. CSG AdministraƟon Department Results Staffing—This category had only a minor variance and ended the year with approximately 2% savings. The AdministraƟve Assistant posiƟon was part‐Ɵme but became full‐Ɵme with half of their posiƟon assigned to the Finance Department. Contract Services – Contract Services expenditures were under budget by approximately 3%. This budget conƟnues to fund the Centralized Resident Engagement Plaƞorm, Ask SLO, and the Shopping Cart Containment Program. Other OperaƟng Expenditures – Expenses for this category were 21% under budget due to the vacancies of the Assistant City Manager and the CSG Business and AdministraƟve Manager, creaƟng fewer expenses in all expense accounts than budgeted. FY 2022‐23 FY 2023‐24 FY 2024‐25 CSG Admin Actual Budget Actual Funds Available %Budget Staffing 588,627$ 707,105$ 692,323$ 14,782$ 2% 605,905$ Contract Services 104,369 131,620 127,900 3,720 3% 41,020 Other Operating Expenditures 10,829 12,000 9,457 2,543 21% 12,000 Total 703,825$ 850,725$ 829,679$ 21,045$ 2% 658,925$ 32 Page 304 of 369 Community Service Group – Community Development Department Community Development Department A Year in Review During the ﬁrst year of the 2023‐25 Financial Plan, the Community Development Department (CDD) made substanƟal progress in implemenƟng its work programs and hiring and training staff under a new Director to support the community’s success. The department conƟnues facilitaƟng large development projects, and housing producƟon is progressing. Homelessness remains a major city goal, and CDD conƟnues to seek and secure grant funds to implement strategic plan efforts. Although the economy has experienced turbulence and inﬂaƟon, general permit and inspecƟon acƟvity remained strong through the ﬁscal year. Staff recruitment and retenƟon have proven difficult in the Planning and Engineering divisions, as turnover has been an issue again this year. However, the Building and Safety division has been able to train new staff and is responding to the demands for service more efficiently than last year. Public improvement projects and Code Enforcement inspecƟon acƟvity are increasing workload areas. Ask SLO requests increased, with June being the month with the highest number of requests in the fourth quarter. The city received property blight complaints, which led to two declaraƟons of public nuisance, which has not happened in SLO for over a decade. The CDD AdministraƟon team conƟnues to provide process management and support for all the divisions within the Community Development Department. The division conƟnues to support the department’s advisory bodies and Major City Goal work programs. All divisions have worked on updaƟng the user and regulatory fee study. This work has been a signiﬁcant effort for the divisions, resulƟng in fees aligned with the current cost of providing services to the public. The Department’s strategic prioriƟes for the 2023‐25 Financial Plan are to help advance the City’s overall goals Ɵed to Major City Goals, Department Strategic Plans, and other prioriƟes as they may arise. Variance Analysis Table 21. Community Development Department OperaƟng Expenditures The Department ended the year under budget by 10% or $927,941. Staffing—This category ended the year with approximately 7% salary and beneﬁt savings compared to last year’s 11%. While Community Development Department staff has generally stabilized in Building and Safety, the Engineering and the Planning Divisions conƟnue to experience staffing challenges. FY 2022‐23 FY 2023‐24 FY 2024‐25 Community Development Department Actual Budget Actual Funds Available %Budget Staffing 5,477,536$ 6,086,887$ 5,642,668$ 444,219$ 7% 6,484,865$ Contract Services 1,796,447 2,636,172 2,230,394 405,778 15% 2,029,577 Other Operating Expenditures 165,049 259,660 181,716 77,944 30% 264,560 Total 7,439,031$ 8,982,719$ 8,054,778$ 927,941$ 10% 8,779,002$ 33 Page 305 of 369 Community Service Group – Community Development Department Building and Safety was fully staffed for the enƟre second half of the ﬁscal year and was able to hire a Stormwater Code Enforcement Officer and a Building Inspector as part of the budget supplement. These addiƟonal staff members were criƟcal to ensure the conƟnued provision of key services to the Building and Safety Division. The Engineering Division experienced the departure of the Supervising Civil Engineer in April (this is the supervisor of the group) and has had several unsuccessful aƩempts at ﬁlling a vacant Senior Civil Engineer posiƟon, even aŌer aƩempƟng to underﬁll the posiƟon with lower‐level candidates. The Engineering Division is ensuring conƟnuity of operaƟons through the use of contract and temporary employees. The Planning Division experienced relaƟve stability; however, two planners leŌ during the ﬁscal year, which impacted the Housing secƟon speciﬁcally. The division successfully kept two Master Student Interns and recruited a new Housing Coordinator. Planning is currently recruiƟng for an Assistant Planner to ﬁll a recent vacancy and a Planning Technician to assist with the public counter. Despite the turnover, the Planning Division conƟnues to move forward with its work program items, which are crucial in advancing the Major City Goal of Housing and Homelessness. Contract Services— Community Development contract services funds are crucial in managing workload challenges and addressing the need to hire consultants when the development workload increases. Consultant expenses are unpredictable yearly and the department did not spend 15% of the FY 2023‐24 budget. The contract services budget conƟnues to fund large‐scale, mulƟ‐year projects. Other OperaƟng Expenditures—The 30% unspent funds in this category can be aƩributed to the Credit Card Merchant Fees and the EducaƟon and Training accounts. The department did not uƟlize the enƟrety of the EducaƟon and Training budgets for FY 2023‐24, spending only $30,000 of a $75,000 department budget. Credit Card Merchant Fees are a moving target. Last year, the Department spent only 57% of this budget, but this year, 73% was spent. Building permit applicaƟons are now all being processed online as of February this year, which explains the 16% increase in the usage of these funds as fewer checks are being processed in person. Even with this increase, there was $33,000 leŌ of a $120,000 budget for this expense. The percentage may increase as credit cards are the preferred payment method for smaller projects at the front counter. The department conƟnues to track this account and will make recommendaƟons in the next budget cycle for an educated projecƟon in this account. Development Services Revenue Development Services related fees produced over $6 million in General Fund revenue for various acƟviƟes supporƟng development, including planning, infrastructure plans check, subdivision map checks, and building permits. The table below illustrates that the variance between the budget and actual Development Review Fees totaled $106,721 and were within 2% of revenue projecƟons. While the department nearly met current year revenue projecƟons, it did not meet projecƟons in all areas. Building permits, encroachment permit acƟvity, and plan check acƟvity exceeded projecƟons, helping compensate for the shorƞall in other revenue categories. The Planning ApplicaƟons and Development Review Planning fees were down approximately 15%. These fees are directly correlated with Engineering Development Review fees, which were also down. CDD underrealized Code Enforcement Fines but this is common as the ﬁnes can vary yearly and are difficult to predict. Staff will recommend adjustments to this category in future budget years since it met only 35% of its projecƟons this year and any other categories at mid‐year. 34 Page 306 of 369 Community Service Group – Community Development Department Table 22. Community Development Department Revenue Drawing a comparison to last year in FY 2022‐23, the department under‐realized revenues by 3%. FY24 revenue projecƟons were then revised slightly downward by approximately $378,000. CDD was able to realize projected revenues within 2% this year. The Department’s revenue projecƟons for FY 2024‐25 are slightly higher than those for FY 2023‐24. CDD plans to make adjustments mid‐year if necessary, based on a close monitoring of individual revenue categories. Performance Measures Table 23. Community Development Performance Measures Objective Measure 2023‐24 Target 2023‐24 Actual Affordable housing production Strategic Goal: Housing Number of affordable housing units secured through entitlements or construction 50 160 Provide Excellent Customer Service Strategic Goal: Other Department Objective Customer survey response positivity rate 85% 90% Ensure a Safe Community Strategic Goal: Housing Percent of Code Enforcement cases investigated on‐ time: First Tier ‐ 24 Hours, Second Tier ‐ 2 Days, and Third Tier ‐ 3‐5 Days 85% 63% Development Review activities Strategic Goal: Other Department Objectives The target goal of meeting cycle times 75% of the time reflects an increase in more complex and resource‐intensive development review activities 75% 79% Building Permit Review activities Strategic Goal: Economic Stability Percent of building permit reviews completed within established cycle times 85% 50% CDD’s performance measures are outlined in the table above. Despite the staffing challenges experienced last year, the Department met three of the ﬁve targets. While the Building Permit review cycle Ɵme performance measure was not met, it did increase to 50% on Ɵme from 35% last year. The posiƟve results in our performance measures are largely due to dedicated and efficient staff, technology, process improvements, and E‐review implementaƟon. In addiƟon, staff conƟnues to work on efficiencies that will improve actual outcomes in the coming year. FY 2022‐23 FY 2023‐24 FY 2024‐25 CDD Actuals Budget Actual Variance ($) Variance (%)Budget Building Permits 2,505,378$ 2,561,860$ 2,787,384$ 225,524$ 9% 2,689,953$ Code Enforcement Fines 46,560 79,617 27,844 (51,773) ‐65%79,617 Development Review Fees 330,002 387,008 309,447 (77,561) ‐20% 406,358 Encroachment Permits 418,019 324,437 367,913 43,476 13% 340,659 Engineering Development Review 153,878 160,058 102,449 (57,609) ‐36% 168,061 Infrastructure Plan Check & Inspection 927,550 970,693 808,190 (162,503) ‐17% 1,019,227 Plan Check Fees 1,371,473 1,180,266 1,239,026 58,760 5% 1,239,279 Planning & Zoning Fee 744,868 611,597 526,563 (85,034) ‐14% 642,177 Total 6,497,729$ 6,275,536$ 6,168,815$ (106,721)$ ‐2% 6,585,331$ 35 Page 307 of 369 Community Service Group – Community Development Department CDD is commiƩed to increased customer saƟsfacƟon and ﬁnding ways to streamline processes, allow for online anyƟme building inspecƟon scheduling, and increase performance transparency. It now offers online e‐review processing of payments; in some cases, there is no need to make a trip to the office. The department provides increased transparency and performance tracking through online reporƟng of key performance indicators. The Department has created Dashboards that provide accurate expectaƟons for the City’s customers regarding permit processing Ɵmelines, code enforcement responses, and customer service results, including planning cycle Ɵmes, average review Ɵmes, and division staƟsƟcs. Due to the performance data collected, addiƟonal internal efficiencies have materialized, such as a commitment to data‐driven decision‐making, assessing workloads, seƫng realisƟc expectaƟons, and incorporaƟng performance‐based reporƟng and analysis for current and future budget decisions. With the recent technology upgrades, Building InspecƟon staff has been able to receive inspecƟon requests through the online ciƟzen self‐serve portal. In addiƟon, staff is working on an analysis of building permit review acƟviƟes to understand where there are boƩlenecks that can be addressed through technology or staff in order to increase the number of building permit reviews that are on Ɵme next year. AcƟons are also being taken to address the KPI related to code enforcement response Ɵ mes. The Code Enforcement team is now fully staffed and conƟnues to analyze the types and number of complaints received to beƩer understand where educaƟon and outreach could proacƟvely address issues. AddiƟonally, in an effort to address enforcement inconsistencies and efficiency issues, the Code Enforcement Supervisor has been assigned to create standard operaƟng procedures (SOPs) for enforcement processes. These SOPs will allow for staff to have a clearer understanding of how to approach each enforcement situaƟon to manage iniƟal response more efficiently. Accomplishments & Challenges Major highlights include the City being designated as a Pro‐housing JurisdicƟon by the State of California. The Housing staff conƟnues to work diligently as 160 affordable housing units were secured through enƟtlements or construcƟon this ﬁscal year. Several major construcƟon projects also moved forward including HASLO’s 31‐unit Bridge Street Family Apartments and 40‐unit Maxine Lewis Apartments. People’s Self Help Housing (PSHH) opened the 40‐unit Broad Street Place project; and state funding award for the 75‐unit Calle Joaquin Homekey Project and the 80‐unit transiƟonal and permanent supporƟve housing at the Welcome Home Village at the County Health Campus. The e‐review project has hit major milestones this year. Staff worked diligently to launch the CiƟzen Self‐ Service Portal called InfoSLO, an online portal which allows applicants to submit building permit applicaƟons online through a permit portal, search public records for permits, plans, inspecƟons, and code case history as well as pay invoices online. This portal is intended to be used to submit ﬁnal documents at permit issuance, revisions to permits that have already been “issued,” and upload documents required for ﬁnal inspecƟon on acƟve permits This has allowed the Department to streamline permit intake and issuance and move toward a paperless process. Paperless is a goal of the department and we plan to dedicate resources to a backlog of ﬁles that need to be digiƟzed making department ﬁles more accessible to staff and the public online. 36 Page 308 of 369 Community Service Group – Community Development Department In addiƟon, the Department conƟnues to facilitate the development of hundreds of housing units that are in the pipeline including units that are in Avila Ranch, San Luis Ranch, and the OrcuƩ Area Speciﬁc Plan. This work involves everyone in the division from enƟtlement to inspecƟon and issuance of CerƟﬁcates of Occupancy. The Department dedicated a signiﬁcant amount of Ɵme to the user fee study and update in FY 2023‐ 24. The majority of the user fees are located in Community Development, and staff worked closely with the project managers and the consultant to update the fees with the goal of simplifying and making fees more transparent to the public. Staff conƟnues to dedicate Ɵme and resources to the roll‐out of the updated fees in the Energov system. The most signiﬁcant challenge experienced by CDD during FY 2023‐24 was staffing. The department conƟnues to monitor the increased scale of development the City is experiencing. CDD will conƟnue to focus on recruiƟng new staff, staff retenƟon, and onboarding recently hired staff. Unfortunately, in some cases, these posiƟons remain unﬁlled aŌer mulƟple recruitments because qualiﬁed individuals were not idenƟﬁed or did not accept offers. The department is sƟll experiencing an increase in vacancies, which may necessitate consultants if recruitment is unsuccessful for key posiƟons in the Planning and CDD Engineering divisions. Currently, the department has six vacancies. Three engineers, two planners, and a Housing Policy and Homelessness Response Intern. Development Services DesignaƟon Account Due to a Policy Change that consolidated the Building Permit Plan Check and Development Services DesignaƟon Policies, the Development Services DesignaƟon was eliminated. A balance of $145,136.00 remains in the assigned designaƟon account. However, once drawn down, the account will be eliminated at the end of this ﬁscal year. Instead of using a designaƟon fund, a percentage of revenues collected are directly appropriated to the Building & Safety division, and funds are allocated annually for operaƟonal expenses associated with processing development permit applicaƟons. 37 Page 309 of 369 Public Works Ӝ Public Works A Year in Review The Public Works Department managed expenses under budget overall, ending the year with expenditure budget savings of about 7%. Staff effecƟvely delivered core services to the community and met its FY 2023‐ 24 goals in the face of rising material costs and staff vacancies. Staff vacancies in the Maintenance Division increased contracted maintenance costs in order to service parks, faciliƟes and ﬂeet at an effecƟve level. This leveled out much of the department’s staff savings and led to higher Other Contract Services costs across the department. Ask SLO, the City’s resident response plaƞorm, remains immensely popular among residents, and has created workload challenges for the Maintenance Division based on current staffing levels. Likewise, the addiƟon of new parks, roadways, and AcƟve Transporta Ɵon Plan (ATP) improvements due for compleƟon in FY 2024‐25, as well as the rising ﬂeet count, will create addiƟonal strain. A staffing resource assessment was completed for the Maintenance Division and will be considered as part of the 2025‐27 Financial Plan process. The CIP Engineering and Transporta Ɵon Planning & Engineering programs conƟnue to face staffing challenges, with an ongoing vacancy in the ConstrucƟon Engineering Manager posiƟon since the beginning of the calendar year and a recent vacancy in a Transporta Ɵon Planning/Engineering posiƟon. Despite this, several CIP engineering posiƟons have been ﬁlled over the last year and those staff have been making progress on project assignments despite the normal learning curves and Ɵme required to get up to speed on City processes. Over the last year, engineering resources redirected to storm projects have slowed progress on many current projects, but the recent Capital Improvement Plan true‐up that occurred within the FY 2024‐25 Supplemental Budget, wherein capital project funding was reallocated to the projects that will be ready to move forward in FY 2024‐25, allowed staff to re‐focus their aƩenƟon on these funded projects. Variance Analysis Table 24. Public Works Department Results Staffing: Staffing ended the year under budget as full‐Ɵme posiƟon vacancies throughout the year resulted in salary savings in many programs, including Streets & Sidewalk Maintenance, Signals & Streetlights, CIP Engineering, Urban Forest, FaciliƟes Maintenance, and Fleet Maintenance. Temporary (supplemental) posiƟon vacancies in Parks Maintenance, Swim Center Maintenance and Streets & Sidewalk Maintenance added to these savings. These vacancies resulted in addiƟonal, unbudgeted overƟme costs (parƟcularly during events like Farmers Market, and major storm events), as well as contracted maintenance support, FY 2022‐23 FY 2023‐24 FY 2024‐25 Public Works Actual Budget Actual Funds Available %Budget Staffing 10,187,359$ 11,248,480$ 10,632,237$ 616,242$ 5% 11,581,706$ Contract Services 2,397,458 2,692,183 2,557,380 134,803 5% 2,310,275 Other Operating Expenditures 4,125,920 4,441,748 3,982,606 459,142 10% 4,313,822 Total 16,710,736$ 18,382,411$ 17,172,223$ 1,210,187$ 7% 18,205,803$ 38 Page 310 of 369 Public Works Ӝ which draws from the Other Contract Services accounts. The CIP Engineering and Transporta Ɵon Planning and Engineering programs have likewise struggled to recruit and retain staff. As staff retenƟon conƟnues to be a recurring issue, staff is in the process of implemenƟng organizaƟonal changes, and considering other retenƟon strategies in the upcoming 2025‐27 Financial Plan. Other OperaƟng Expenditures: In our Maintenance Division, rising chemical and uƟlity prices, as well as facility repair costs due to aging infrastructure and newly‐added assets, drove other operaƟng costs. As these trends are unlikely to reverse, we will plan for them in the 2025‐27 Financial Plan. At the same Ɵme, Parks Maintenance electricity bills were signiﬁcantly below what was budgeted. This is due to inaccurate informaƟon previously provided by the uƟlity company for sport lighƟng cost increases caused by a change in Ɵme of use pricing. Also, the consolidaƟon of soŌware systems also offered signiﬁcant ongoing savings to help miƟgate these trends. Performance Measures Table 25. Department Performance Measures Objective Measure 2023‐24 Target 2023‐24 Actual Proactively enhances traffic safety by providing a system of safe, reliable, and well‐maintained roadways, sidewalks, traffic signals and streetlights. MCG: Climate Action Strategic Goal: Enhance Safe & Efficient Transportation (PW Strategic Plan) Pavement Condition Index 75 73 1 Bicycle network in total miles (Class I/II/III/IV) 14.6/31.0/2 5.1/2.8 14.6/31.0/2 5.1/2.8 Street miles maintained 135 143 Enhance the City’s Urban Forest and maintains visually appealing public spaces. MCG: Climate Action Strategic Goal: Proactively Manage Assets (PW Strategic Plan) # of trees maintained 13,080 13,414 Number of Parks maintained/Improved area of Parks2 584 27/115 acres 1 PCI change reﬂects recently completed pavement evaluation survey data provided by the City’s pavement assessment consultant. This survey data differs from the projections calculated by computer software projections. 2 This performance measurement changed in 2023-24 from total park acreage to a two-fold measurement of 1) number of parks maintained and 2) acres of improved surface within the parks. 39 Page 311 of 369 Public Works Ӝ Provide high quality services to the community through efficient and effective delivery of capital improvement projects and management of the City’s infrastructure. MCG: Economic Recovery Strategic Goal: Connect with our Community (PW Strategic Plan) Total value of CIP Managed $97M $83.6M 3 Accomplishments & Challenges The Department conƟnued to address Major City Goals as outlined in the 2023‐25 Financial Plan, while also delivering on core services. The Parks Maintenance program replenished the play surfacing at four playground locaƟons, installed new aluminum picnic tables at two locaƟons, upgraded several old drinking fountains with hydraƟon staƟons, and converted many non‐funcƟonal turf locaƟons throughout the City to drought‐tolerant landscaping. New efficiency upgrades implemented throughout the Swim Center will signiﬁcantly miƟgate rising chemical and uƟlity costs. The FaciliƟes Maintenance program oversaw criƟcal improvements to City Hall, the 1106 Walnut Street facility and the Senior Center. The Urban Forest program is making progress toward the City goal of planƟng 10,000 new trees by 2035, and implemented a citywide Urban Forestry Stakeholder CommiƩee to provide a cohesive approach to managing the City’s urban forest. The Streets & Sidewalk Maintenance conƟnued to address the City’s sidewalk and pavement needs, patrolled the City during storm events, provided traffic control services for City events and emergencies, and increased maintenance and cleaning in the downtown. The Tra ffic Signals & LighƟng program maintained safe and efficient traffic signal operaƟons through preventaƟve maintenance, repairs and upgrades, even despite the three‐month vacancy of a signal technician and the ongoing challenge of damages from hit‐and‐run accidents, some of which cost recovery was not obtainable. The Fleet Maintenance program conƟnued to advance the City’s ﬂeet electriﬁcaƟon goals with nine (9) new EV pickups and ﬁve (5) other EV vehicles, and by installing six (6) addiƟonal EV chargers at the CorporaƟon Yard. The CIP Engineering program made signiﬁcant progress in advancing Capital Improvement Plan projects, successfully compleƟng 23 projects through construcƟon and bringing 17 others into construcƟon during FY 2023‐24. These included emergency storm projects like the San Luis Drive and Prefumo Creek debris removal, San Luis Obispo Creek bank stabilizaƟon, and Old Garden Creek repairs. The Transporta Ɵon Planning & Engineering program partnered with CIP Engineering to advance some criƟcal traffic safety and acƟve transportaƟon projects, including construcƟon of the City’s Arterials Project, Railroad Safety Trail safety fencing, Santa Rosa/Monterey intersecƟon improvements, and the compleƟon of the Buchon Neighborhood Tra ffic Management project. Progress conƟnues on the planning and design of several high‐ 3 This total reflects the rescheduling of projects that resulted in transfers during FY 2024-25 Supplement, which is why it is lower than the target approved in the 2023-25 Financial Plan. 40 Page 312 of 369 Public Works Ӝ priority transportaƟon projects, including the Foothill/California Railroad Crossing Improvements, Higuera Widening (Bridge to Elks), Higuera Complete Street Project and South/King Crossing Improvement Project. The North Chorro Greenway and new North Broad Street Neighborhood Park are now complete, and the Cultural Arts District Parking Structure, which started construcƟon in November, is expected to be completed and operaƟonal in early calendar year 2026. This past year, Public Works has had to navigate many challenges, including staff vacancies and growing workload; a surge in adopƟon and use of Ask SLO applicaƟon; and an increase in construcƟon of new assets (parks, roadways, ﬂeet)—all coupled with rising material, labor and uƟlity costs, unrecoverable damage repair costs to Tra ffic Signal Infrastructure and the Ɵme‐sensiƟve need to complete many storm‐ related repair projects. The department is in the process of implemenƟng organizaƟonal changes in its Maintenance Division that were recommended as part of a staffing resource assessment to address the community’s changing infrastructure needs. The department transferred its City Arborist posiƟon to the Community Development Department to allow the Urban Forest staff to focus their efforts on city‐owned trees in the right‐of‐way, parks and bike paths. Staff is taking escalaƟng construcƟon costs into consideraƟon as it updates the Capital Improvement Plan in the coming year and is making progress on the FY 2024‐25 projects outlined in the Supplemental Budget. 41 Page 313 of 369 Parking Fund Parking Fund A Year in Review The Cultural Arts District Parking Structure broke ground in November and construcƟon is on schedule to be completed in early 2026. This highly anƟcipated structure, located at the corner of Nipomo and Palm, will add 397 spaces to the downtown core and will serve the current and future needs of the community. In addiƟon, the City purchased and put into operaƟon a new 44‐space surface parking lot at 1166 Higuera Street. StarƟng in November, the City worked closely with a consultant on a Parking Rate Study that recommended parking rates and policy changes, informed by updated revenue forecast modeling and extensive community feedback. This effort culminated in May, when the City Council approved changes to make parking more affordable for locals and visitors alike, while sƟll enabling the Parking Fund to remain ﬁnancially sustainable. Variance Analysis Table 26. Parking Fund Results Staffing: The vacancy of the Parking Program Manager from December to March, and the delayed hiring of an AdministraƟve Assistant posiƟon, funded the staffing cost of a contract Mobility Services CommunicaƟons Coordinator in FY 2023‐24, and provided addiƟonal salary savings. Staff turnover in full‐ Ɵme and supplemental posiƟons throughout the year resulted in further salary savings. Other OperaƟng Expenditures: Other operaƟng expenditures exceeded budget primarily due to increased credit card merchant fees. Digital payments now represent over 90% of revenue collected at on‐street and off‐street locaƟons. Parking Services’ operaƟng budget was adjusted at Budget Supplement to accurately reﬂect anƟcipated transacƟonal norms in FY 2024‐25. Revenue: Table 27. Parking Fund Revenue FY 2022‐23 FY 2023‐24 FY 2024‐25 Parking Actual Budget Actual Funds Available % Budget Staffing 1,690,052$ 2,086,286$ 1,991,075$ 95,212$ 5% 2,111,121$ Contract Services 906,613 969,370 941,233 28,137 3% 712,700 Other Operating Expenditures 733,262 841,622 961,585 (119,963) ‐14% 964,803 Total 3,329,927$ 3,897,278$ 3,893,893$ 3,385$ 0% 3,788,624$ FY 2022‐23 FY 2023‐24 Parking Actuals Budget Actual Variance % Long Term Parking 700,873$ 695,300$ 702,797$ 7,497$ 1% Parking Fines 1,369,398$ 1,050,010$ 1,222,354$ 172,344$ 16% Parking Meters 2,574,431$ 4,876,000$ 5,917,740$ 1,041,740$ 21% Parking Structures 1,224,458$ 2,316,100$ 1,757,776$ (558,324)$ ‐24% Other Revenue 1,396,024$ 763,584$ 2,679,305$ 1,915,721$ 251% Total 7,265,184$ 9,700,994$ 12,279,974$ 2,578,980$ 27% 42 Page 314 of 369 Parking Fund Parking Fines – Even though Parking Services has relaxed enforcement signiﬁcantly over the past year, Parking Fine revenue sƟll generated 16% more revenue than forecasted. Parking Services will conƟnue to focus on educaƟon and champion compliance as future technology improvements are implemented. Parking Meters – Parking Services realized 21% more revenue than anƟcipated from parking meters. Parking meter revenue (revenue received from single space meters and pay staƟons on street and in surface lots) was forecasted conservaƟvely due to lower observed occupancy at the beginning of the ﬁscal year. However, on‐street and surface lot parking usage remained consistent throughout the year and led to an over‐realizaƟon of parking meter revenue. AddiƟonally, gateless infrastructure was implemented at the 842 Palm Street Parking Structure, where a porƟon of those revenues are posted to parking meter revenue, accounƟng for an unanƟcipated increase in parking meter revenue and a complementary decrease in parking structure revenue. Revenue from 842 Palm will conƟnue to be comingled with parking meters unƟl new gaƟng and payment equipment is installed at this locaƟon. Revenue forecasts will be revised at Mid‐Year Budget Review to accurately reﬂect where funds are posƟng. Parking Structures – Parking Services realized 24% less revenue than anƟcipated from parking structures. In general, the structures experienced a reducƟon in usage in FY 2023‐24 from previous years. AddiƟonally, as previously stated, the 842 Palm Street Parking Structure revenue is comingled with parking meter revenue since the implementaƟon of a gateless parking system at this locaƟon. Revenue forecasts for 842 Palm will be revised at Mid‐Year Budget Review. Other Revenue and Lease Revenue – Parking Services yielded approximately $2 million in interest on investments. This was due to parking structure bond proceeds yielding around 5% interest prior to the required payments to the contractor construcƟng the new Cultural Arts District Parking Structure (CADPS). Interest from the bond proceeds is a one‐Ɵme in nature, as most of the bond proceeds will be expended in FY 2024‐25 as construcƟon of the parking structure conƟnues. Accomplishments & Challenges The newly established Mobility Services Division took root at the beginning of the ﬁscal year, unifying Parking Services, Transit and AcƟve Transporta Ɵon under one collaboraƟve division. This new division features a new Deputy Director and Mobility Services Business Manager, and the reconﬁguraƟon also included administraƟve support changes to opƟmize overall customer service. Staff onboarded a new Parking Program Manager in March, aŌer the posiƟon was leŌ vacant in December. When offering services to the community, communicaƟon and engagement is criƟcal. This ﬁscal year, the program completed and began implementaƟon of its Parking CommunicaƟons Plan to more effecƟvely engage with the community on issues ranging from construcƟon to policy development and implementaƟon. In February, the program onboarded a Mobility Services CommunicaƟons Coordinator to provide Ɵmely updates and to engage the community on parking speciﬁc issues. The Parking program provided 100% of the posiƟon’s funding in FY 2023‐24. For FY 2024‐25, the posiƟon’s focus is being expanded to include Transit and AcƟve Transporta Ɵon which will share the funding with the Parking program. The Mobility Services Division responded to community feedback and implemented many changes following the new rates that were effecƟve July 1, 2023. Acknowledging the community’s concerns and 43 Page 315 of 369 Parking Fund uncertainty about the future of downtown parking, the Mobility Services Division made community engagement, parƟcipaƟon and collaboraƟon a top priority as it worked toward feasible soluƟons. In November 2023, Council approved reestablishing the ﬁrst hour free and free Sunday parking in the City’s parking structures and authorized the release of an RFP to complete a parking rate study. Parking Services engaged a consultant to prepare a comprehensive Parking Rate Study that melded together ﬁnancial modeling and community feedback to develop opƟons for a new parking rate structure. The opƟon that the City Council ulƟmately selected in May 2024 garnered the support of both residents and the downtown business community. This opƟon included a 33% decrease in in‐structure parking rates, a 25% to 31% decrease in on‐street parking rates, a 47% decrease in the monthly parking structure permit rate, an increase in on‐street, downtown core parking Ɵme limits from two hours to three hours, and a 50% reducƟon in parking validaƟon costs for businesses. The City Council also supported improved user experience through several other changes, including a simpliﬁcaƟon of parking payment apps, an increase in parking permits issued, improved communicaƟons efforts, promoƟonal discounts for locals visiƟng downtown, grace periods for customers and the move to a more consistent gated system and payment model for all parking structures. Over the past year, Parking Services has faced technology challenges with downtown pay staƟons impacƟng revenue generaƟon and user experience. While the program conƟnues to navigate and overcome these challenges, it has also retained a consultant to prepare a Technology Roadmap to assist the City in troubleshooƟng these technology issues and to fully implement Parking Rate Study recommendaƟons. 44 Page 316 of 369 Transit Fund Transit Fund A Year in Review SLO Transit celebrated 50 years of service this past April and conƟnues to provide reliable transit service for more than 500,000 passenger trips across 8 ﬁxed routes, 1 tripper service, and 1 trolley service, using a ﬂeet of 19 vehicles. This ﬁscal year, SLO Transit added two new baƩery electric buses to its ﬂeet, purchased eight addiƟonal electric buses expected to be in operaƟon in 2026, and installed charging staƟons at the Transit Yard to support the City’s growing electric ﬂeet, in line with its Zero‐Emission Bus Rollout Plan approved by Council in March 2024. SLO Transit conƟnues to gradually restore services that were suspended during the pandemic to beƩer serve the community. This year, the program also renewed its transit operaƟons and maintenance agreement, extending the term through June 2025, and including hiring incenƟves (retenƟon bonus and hourly wage bonus) for transit workers. Transit also executed a new three‐year agreement with Cal Poly for transit services. Variance Analysis Table 28. Transit Fund Results Staffing: Staffing expenditures were slightly higher than budgeted because, under the new accounƟng rules speciﬁed by GASB 101, sick leave liability is now based on the probability that it will be used for Ɵme off or otherwise paid in cash, which results in a bigger liability for Transit than what was originally budgeted. Contract Services: Expenses were under budget due to Purchased Transporta Ɵon budget being split out from Other Contract Services in early FY 2023‐24, which resulted in a surplus of funds in Other Contract Services that remained in the FY 2023‐24 budget. These respecƟve accounts have been trued up in the FY 2024‐25 budget. Other OperaƟng Expenditures: Expenses were overbudget due to higher than normal diesel fuel prices during the ﬁrst six months of the ﬁscal year. FY 2022‐23 FY 2023‐24 FY 2024‐25 Transit Actual Budget Actual Funds Available % Budget Staffing 195,979$ 380,134$ 389,893$ (9,759)$ ‐3% 329,423$ Contract Services 2,986,398 4,487,341 3,664,831 822,510 18% 4,316,433 Other Operating Expenditures 397,917 410,200 431,255 (21,055) ‐5% 424,715 Total 3,580,294$ 5,277,675$ 4,485,980$ 791,695$ 15% 5,070,571$ 45 Page 317 of 369 Transit Fund Revenue: Table 29. Transit Fund Revenue Federal Revenue: Revenue from federal grants is reimbursed aŌer funds are expended. One capital project, the Electric Vehicle (EV) Charging Infrastructure project, was funded by federal grants and was drawn down this ﬁscal year. OperaƟng costs were also funded by federal grants and drawn down quarterly. Drawdowns typically occur quarterly to align with federally ﬁnancial reporƟng requirements as required by the respecƟve grant award. Budgeted revenue not received this ﬁscal year will be available next ﬁscal year for reimbursement. Other Revenue: Other Revenue is primarily made up of interest on investments, which varies based on market condiƟons, making it difficult to accurately forecast. Favorable interest rates resulted in higher revenue than forecasted. Table 30. Carryover Funding Accomplishments & Challenges In 2020, the City set an ambiƟous mode‐split objecƟve target for 12% of trips to occur on transit by 2035, while it simultaneously experienced a dramaƟc decline in transit ridership due to the COVID‐19 pandemic. To help reach its mode‐split objecƟve and ridership goals, SLO Transit worked with a consultant to prepare a comprehensive Transit InnovaƟon Plan. This plan, ﬁnalized in January 2024, recommends and prioriƟzes innovaƟons such as technology upgrades, fare program updates for low‐income, senior and youth populaƟons, enhanced ﬁxed‐route service and complementary alternaƟve mobility services, and infrastructure improvements. Staff has already begun implemenƟng recommendaƟons from the plan. FY 2022‐23 FY 2023‐24 FY 2024‐25 Transit Actuals Budget Actual Variance ($) Variance (%)Budget Federal 4,083,165$ 7,579,701$ 4,738,212$ (2,841,489)$ ‐37% 12,469,861$ Local (Bus Fare) 806,521 990,000 1,000,790 10,790 1% 976,000 Other Revenue 446,998 13,579 281,561 267,982 1974%‐ State 327,697 3,657,688 3,082,312 (575,376) ‐16% 3,613,325 Total 5,664,381$ 12,240,968$ 9,102,875$ (3,138,093)$ ‐26% 17,059,186$ Dept Request Title Description Amount Transit Fund Mobility Services Communications Coordinator (Contract FTE) TRANSIT PORTION (60%) ‐ Carry‐over funds will be used to provide a contract extension for the Mobility Services Comms Coordinator position, which was set to expire in August as part of the incumbent's contract. This position has proved invaluable and will be extended through FY25. 53,601$ Transit Fund Transit Intern (Intern IV)Carry‐over funding will be used to support a Transit Program Intern, as the program has utilized successfully in the past. 9,855 Transit Fund Transit Manager PERS Retiree Carry‐Over funding will be used to fund the part‐time Transit Manager position through FY25 as he c ontinues to transfer critical Transit knowledge and relationships to the Business Manager.54,612 Transit Fund Transit Hiring Incentives Council approved $233,140 in hiring incentives for FY24. Unfortunately, the negotiation with Transdev to provide the incentives took much longer than anticipated and the hiring incentives for FY24 have yet to be distributed. This funding will be carried over for use in the current fiscal year. 233,140 Total Transit Fund 351,208$ 46 Page 318 of 369 Transit Fund Compliance with federal and state guidelines is criƟcal to SLO Transit’s operaƟons, which are heavily subsidized by federal and state grants. This year, staff completed the Federal Transit AdministraƟon (FTA)’s triennial review for FY 2019‐20 to FY 2021‐22, and Transporta Ɵon Development Act (TDA)’s Triennial Performance Audit for FY 2020‐21 to FY 2022‐23. At the same Ɵme, SLO Transit staff applied for mulƟple federal and state grants for capital improvement projects aimed at modernizing the City’s transit infrastructure, and making traveling around San Luis Obispo easy, convenient and safe. The program received part‐Ɵme support from a PERS annuitant (ﬁlling the Transit Manager role) who has assisted in onboarding the Mobility Services Business Manager and with the Ɵme‐intensive process of applying for, securing, and complying with the requirements of grant funding. SLO Transit is in the process of updaƟng its Short‐Range Transit Plan (SRTP), through a joint effort with the San Luis Obispo Regional Transit Authority (RTA). This ﬁve‐year business plan will serve as a road map to help SLO Transit make important decisions about how to run their buses and improve their services. By addressing current challenges and idenƟfying future needs, the SRTP will create a more efficient, reliable, and sustainable transit system. The opportunity to bolster and improve SLO Transit is further strengthened by the City’s recent staffing and organizaƟonal changes. San Luis Obispo’s new Mobility Services Division, brings together Transit, AcƟve Tr ansporta Ɵon, and Parking Services to allow greater coordinaƟon between all forms of mobility the City oversees, including pedestrian, bike, car, and transit. As SLO Transit advances, it conƟnues to face recurring challenges. Driver shortages have hindered the program’s ability to fully restore services to pre‐pandemic levels. As part of the new amendment to its transit operaƟons and maintenance services agreement, SLO Transit received Council approval to implement hiring incenƟves that will assist with recruitment and retenƟon. The aging ﬂeet has resulted in higher maintenance costs and more down Ɵ me, while deferred maintenance at bus faciliƟes take Ɵ me and addiƟonal funding to restore them to City standards. Cost increases for zero‐emission buses and associated technologies conƟnue to outpace inﬂaƟon, making it more difficult to budget. Staff has reﬂected these maintenance needs in the FY 2024‐25 budget and will also address them in the 2025‐27 Financial Plan. 47 Page 319 of 369 Utilities Department Utilities Department Utilities Department The Utilities Department oversees two Enterprise Funds, an Agency Fund, and the Solid Waste and Recycling program in the General Fund. The Solid Waste and Recycling budget, while managed by the Utilities Department, is a General Fund program, funded by AB 939 and Franchise Fee funding (see Solid Waste write-up). In addition to the Water and Sewer Funds, the Utilities Department also manages the Whale Rock Fund, an Agency Fund, which is overseen by the Whale Rock Commission. The City’s share of operational expenses and CIP contributions for Whale Rock operations are budgeted for in the Water Fund’s Source of Supply budget. Table 31 ‐ UƟliƟes Department Programs Fund Fund Type Programs Funded Notes Water Fund Enterprise Fund Administration and Engineering Source of Supply Water Treatment Water Distribution Water Resources Utility Billing The City’s water operations are paid for by water service rate revenues and cover costs for operations, maintenance, infrastructure replacement, and debt service. Taxes, including utility user taxes, do not support these services. Sewer Fund Enterprise Fund Administration and Engineering Wastewater Collection Environmental Programs Water Resource Recovery Water Quality Lab Utility Billing The City’s sewer operations are paid for by sewer service rate revenues and cover costs for operations, maintenance, infrastructure replacement, and debt service. Taxes, including utility user taxes, do not support these services. Whale Rock Fund Agency Fund Reservoir Operations The Whale Rock Fund is overseen by the Whale Rock Commission. General Fund (AB 939) General Fund Solid Waste and Recycling The Solid Waste program is paid for by AB 939 and Franchise fee funding. AB 939 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 be designated for future activities related to solid waste diversion. A Year in Review The Department’s Enterprise Funds ended FY 2023-24 with expenditure savings in both the Water Fund and Sewer Fund. The Water Fund expenditures were $2.4m under budget, primarily due to credits and savings in the water supply account, coupled with multiple staff vacancies. The Sewer Fund expenditures were $26k under budget with the largest changes being time-sensitive, unique expenditures related to the WRRF upgrade project and revised Government Accounting Standards Board (GASB) 101 regulations. The Department continues to complete several work 48 Page 320 of 369 Utilities Department plan items that support the Major City Goals adopted by the City Council. The Department’s strategic priorities are to help advance the City’s overall goals tied to the Major City Goals, Department Strategic Plans, and other priorities as they arise. The Department’s Water Fund revenues show as $1.4m under budget due to a timing gap following standard billing and end-of-year reporting. The Sewer Fund revenues show as $259k over budget primarily due to investments outperforming conservative budget estimates. These variances are discussed in further detail in the next sections. Variance Analysis Water Fund Table 32. Water Fund Operating Expenditures1 1 These numbers are accurate as of August 20, 2024. When compared to audited ﬁnancials values may vary based on any journal entries that may have been posted after this date. Operating Expenditures- Savings in water fund operating expenditures can be largely attributed to savings in electricity budgets for source water pumping and water treatment plant operations. With the Nacimiento pipeline being offline for repair work during the entirety of FY 2023-24, raw water deliveries were made from Whale Rock Reservoir and Salinas Reservoir, which are closer to the City and thus more cost-effective to pump. Typically, the City prioritizes using water from Nacimiento Reservoir because it allows the city to preserve water in its other reservoirs for use during critical water shortage periods. The Department did not use Nacimiento reservoir to the level as anticipated, which resulted in expenditures being $1.8m under anticipated electrical pumping costs. Electrical savings of $347k were also seen at the water treatment plant, which can be attributed to the lower than anticipated PG&E price increases, use of the Tesla Battery Pack, which has reduced peak electricity use for plant operations, and an exceptionally wet winter resulting in a lower volume of water being treated and delivered throughout the community. Electrical pumping budgets for 2024-25 have been adjusted to reflect updated cost estimates. In addition to electrical savings, the water treatment plant also experienced savings on chemical purchases. The reduction in chemical expenditures is attributed to a normalization of chemical price increases and a reduction in overall chemical use. Water from Whale Rock reservoir requires lower volumes of chemicals in the treatment process, which resulted in significant savings on chemical purchases. Staffing Expenditures – The major driver behind underspent staffing-related funding in the Water Fund is related to vacancies in the Water Administration and Engineering, Water Distribution, Water Treatment, and Water Resources sections. All sections had extended vacancies during FY FY 2022‐23 FY 2023‐24 FY 2024‐25 Water Actual Budget Actual Funds Available % Budget Staffing 5,068,398$ 5,662,416$ 5,427,469$ 234,947$ 4% 5,918,223$ Contract Services 9,793,078 1,199,759 936,808 262,951 22% 1,083,894 Other Operating Expenditures 1,811,763 14,043,851 12,037,305 2,006,546 14% 15,362,717 Total 16,673,239$ 20,906,027$ 18,401,582$ 2,504,444$ 12% 22,364,834$ 49 Page 321 of 369 Utilities Department 2023-24, which resulted in staffing budgets being underspent when compared to initial projections. Table 33. Water Fund Revenue2 2 These numbers are accurate as of September 5, 2024. When compared to audited ﬁnancials, values may vary based on any journal entries that may have been posted after this date. Water Revenues show as $534k more than budgeted primarily due to Investment Property Revenue realization coupled with Other Revenues. Simultaneously, Grants and Subventions were $875k under budget due to the timing of the revenue being realized in the following Fiscal Year rather than FY 2023-24. The investment and property revenue budget was recently reverted to a flat $50,000 in order to budget conservatively for potential investment gains. In this business cycle, revenues exceeded this mark at $1.28m. An additional fair market value adjustment was completed for investment and property revenue actuals for the Water Fund on existing investments. Future budgets will continue to reflect a cautious outlook as investment revenue is strictly dependent on market conditions. The budget for forecasted years remains at the $50,000 mark due to the uncertainty of returns. Lastly, Water Fund “Other Revenue” was over budget by $288k due to an increase in Utilities Set- Up fees. Setup fees have recently been reevaluated and adjusted down to account for efficiencies in the technology that the division uses. Additional factors that contributed to the revenue variance are shifting capital project schedules and associated disbursements. Table 34. Operating Budget Carryover Dept Request Title Description Amount Water Fund Water Quality Measurement Devices Carry‐over funds will be used to purchase 3 Badger PQ‐200W water quality measuring devices to allow staff to sample for 23 water quality metrics. Devices come with 12‐ month subscription for consumables and will allow staff to sample water quality parameters on the fly that currently have to be sent to third party laboratories for processing. 18,629$ Total Water Fund 18,629$ 50 Page 322 of 369 Utilities Department Sewer Fund Table 35. Sewer Fund Expenditures3 3 These numbers are accurate as of August 20, 2024. When compared to audited ﬁnancials, values may vary based on any journal entries that may have been posted after this date. Operating Expenditures - The Sewer Fund encountered significant increases in material and contract services costs, leading to variances in both the Contract Services and Other Operating Expenses. Specifically, there were additional costs associated with several time-sensitive, unique expenditures related to the WRRF Upgrade Project and an equipment and personal safety project that evaluated and conditioned electrical arc-flash safety ratings as required per California state law. The time-sensitive expenditures related to the WRRF Upgrade Project are not reoccurring expenditures and were unique events associated with project complications. Specifically, the facility’s anaerobic digesters were cleaned in preparation for significant retrofit and the scope of the work and corresponding impacts on the larger facility were significantly more than what was anticipated. Expenditures included mitigation measures to reduce odor impacts on the community. Other Operational accounts are anticipated to be drawn down in the coming year as various regulatory permits are issued in the Fall of 2024, and additional outreach is conducted to support the recently adopted municipal code ordinance that included amendments to Title 12 (Stormwater) and Title 13 (Water and Sewer) and to support public outreach related to WRRF plant commissioning. Staff will continue to closely monitor expenses and inflationary pressures to optimize the scheduling of system maintenance and repairs. Staff aim to increase in-house repairs as much as possible to reduce contract labor expenses. Ultimately, the additional expenditures from these projects were offset by underspent staffing funds and underspending for compliance and surveillance monitoring of illicit discharges during FY 2023-24. After these adjustments, the fund’s closing balance was $26,311 under budget. While there was reduced spending on investigative sampling and monitoring for illicit discharges this fiscal year, it is important to have funds available to track the source and resolve the issue in the case of an illicit discharge. Funding for this work varies greatly from year to year, depending on the number of illicit discharges that require investigation. This work may also require sampling multiple sites for a variety of pollutants. Therefore, it is important that some funding remains in the budget from year to year. Lastly, Contract Services during FY 2023-24 includes services for contract laboratory analysis and associated permit fees, including funding administration of the Stormwater Program. FY 2022‐23 FY 2023‐24 FY 2024‐25 Sewer Actual Budget Actual Funds Available % Budget Staffing 4,965,671$ 5,655,554$ 5,467,874$ 187,680$ 3% 5,910,888$ Contract Services 921,169 1,291,283 1,394,113 (102,830) ‐8% 1,163,717 Other Operating Expenditures 2,312,738 2,662,951 2,721,490 (58,540) ‐2% 2,809,353 Total 8,199,578$ 9,609,788$ 9,583,477$ 26,311$ 0% 9,883,958$ 51 Page 323 of 369 Utilities Department Environmental Programs has since undergone a program reorganization, placing stormwater program management responsibilities under a newly assigned Stormwater Program Manager funded in part by the City’s General Fund. Additionally, the fiscal impact will result with a cost savings for the General Fund and a slight increase to the Utilities Department. As such, funding for stormwater monitoring is no longer necessary under this line item in Environmental Programs and will be addressed accordingly during FY 2024-25. Staffing Expenditures – The major driver behind underspent funding in the Wastewater Fund for staffing is related to vacancies throughout the Division. Both the Water and Sewer Funds realized vacancies in the Administration Cost Center for vacancies of the Business Manager and Utilities Engineer roles. Additional vacancies and absences in the WRRF, Wastewater Collections, and Environmental Programs sections also contributed to the underspend. Variances are projected to be reduced in future years as the department fills these vacancies. Table 36. Sewer Fund Revenue4 4 These numbers are accurate as of September 5, 2024. When compared to audited ﬁnancials, values may vary based on any journal entries that may have been posted after this date. Sewer Revenue was $1.6m more than budgeted due to the investment outcomes, and realization of other unanticipated revenues. The Sewer Fund realized additional revenues as noted in the “Other Revenues” line item. More specifically, Setup Fees, and Miscellaneous Penalties were the main contributors to the over realization in this line item. Combined, both of these accounts realized approximately 7% more revenue than what was anticipated. Additionally, the City took surplus assets to auction. The successful bidding process and sale of surplus assets left the Sewer Fund with additional revenues that were not included in the initial budget. Investment and Property Revenue budget is calculated based on prior year’s working capital. Due to a volatile business cycle and the federal government’s monetary policy to address inflation, the investment and property actuals were adjusted to reflect the fair value of Utilities investments more accurately. Budgets have been adjusted to a more conservative outlook in FY 2024-25 until the economy returns to normal business cycles. Cal Poly Capacity & Resilience revenues for the University’s portion of construction costs related to the WRRF upgrade project were deferred this fiscal year, as the City did not start paying off debt services this fiscal year due to project delays. The City will ultimately collect the same amount from Cal Poly, strictly a delay in timing. The charges will start in FY 2024-25. Simultaneously, State Grants was $613k under budget due to the timing of the WRRF construction and CalOES grant reimbursement requests associated with 52 Page 324 of 369 Utilities Department grant awards. The remaining anticipated grant funding is still expected to be awarded upon the completion of various milestones during FY 2024-25. Performance Measures Table 37. Utilities Performance Measures Objective Measure 2023-24 Target 2023-24 Actual Maintain and manage infrastructure, assets, and facilities responsibly and transparently Strategic Goal: Public Stewardship Sanitary Sewer Overflows per 100 miles of sewer main 0 0.68 Maintain and manage infrastructure, assets, and facilities responsibly and transparently Strategic Goal: Public Stewardship Breaks/leaks per 100 miles of water main <13.4 3.14 Provide the Community with High Quality and Reliable Service Strategic Goal: Public Service Recycled Water Delivered (AF) 300 250.31 Provide the Community with High Quality and Reliable Service Strategic Goal: Public Service Minimize Customer Shut‐Off for Nonpayment <450 268 KPI Variance Explanations:  The variance in Recycled Water Delivered (AF) KPI is attributable to the wet winter decreasing demand for additional Recycled Water.  The variance in Sanitary Sewer Overflows per 100 miles of sewer main is due to aged infrastructure with conditions that are exacerbated by climate change and consumer habits tied to restaurant activity. While the target remains zero, staff are optimistic that a recently adopted grease control ordinance, ongoing CIP, and expansion of remote monitoring systems will continue the trend of reducing SSOs that will maintain this KPI near zero. Accomplishments The Utilities Department completed a number of important work activities and initiatives during FY 2023-24. The most notable of these include: 1. Successful applications and payments were received from 116 customers under the Low- Income Household Water Assistance Program (LIWAP) and from 8 customers under the California Extended Water and Wastewater Arrearage Program. 2. During FY 2023-24, $37,028 were subsidized from late fee charges to bills for low-income customers through the Customer Assistance Program (CAP). 3. The Waste Water Collections (WWC) team cleaned 112 miles of the City's sewer collection system, an 8% increase from the number of miles cleaned in FY 2022-23. 4. The Calle Joaquin Sewer Lift Station was completed (January of 2024). 53 Page 325 of 369 Utilities Department 5. Staff initiated the WWC Infrastructure Renewal Strategy project, which will assess the capacity of the wastewater collection system and reassess current capacity to inform the sewer lateral offset program. The project started in late 2023 and is scheduled to be completed and presented to Council in early 2025. 6. Minimization of sewer spills has proven effective, resulting in only one spill during this period. The single spill was associated with the accumulation of grease in city mains in the downtown corridor. A new ordinance adopted in June 2024 will allow staff to address this challenge. 7. The Water Resource Recovery Facility (WRRF) completed the new Digester and brought the construction contract into an overall 90% completion. 8. The Water Resources Program’s Water Conservation Program was awarded Platinum status (the highest rating) by the Alliance for Water Efficiency. 9. Water Resources was awarded a Proposition 1 grant in the amount of $7 million to further the City’s groundwater development efforts. 10. Water Distribution staff collaborated with the Water Treatment Plant and other staff to successfully complete the replacement of the floating cover on Reservoir #2. 11. Water Distribution staff completed an in-house installation of a new pressure-reducing station which provides a secondary supply to the Patricia area pressure zone. 12. Staff received approval from Council to establish a Council subcommittee to develop proposed recycled water sales parameters and contracts. 13. Whale Rock maintenance improvements to the spillway were completed based on engineering evaluations and staff collaborations with Division of Safety of Dams (DSOD). Challenges The Utilities Department experienced a number of ongoing challenges in FY 2023-24. These challenges are summarized below. Hiring and Retention: Hiring and retention continue to be a major challenge for the Utilities Department. During FY 2023- 24 the department had a total of 17 vacant positions. While the water and wastewater industries have historically been highly competitive, the industry as a whole has had challenges in recruiting and retaining qualified staff in recent years. The high cost of living in San Luis Obispo County has made it more challenging to recruit qualified staff from areas across the state and country with lower living expenses or higher pay. Due to these challenges, the Utilities Department’s management team has focused on improving onboarding and training programs for new staff. Improvements to these programs have allowed the team to more effectively onboard staff who may have limited experience in the water and wastewater industry. The department has also continued to leverage internship programs to build a pool of qualified candidates that may be hired if fulltime positions become open. This year, the Water Treatment Plant hired its first two interns, one focusing on treatment plant operations, and another focusing on mapping the plant in ArcGIS. Capital Project Delivery: Like most water and wastewater providers, the Utilities Department continues to face challenges associated with the maintenance and replacement of aging infrastructure. Capital project delivery costs continue to exceed historic norms and have placed uncharacteristically high burdens on water and wastewater budgets. The department is addressing this issue by conducting an in- depth analysis of several critical facilities to improve the accuracy of CIP forecasts. Currently, the 54 Page 326 of 369 Utilities Department Water Treatment Plant is developing its first-ever Infrastructure Renewal Strategy (IRS), which will help assess the condition of major assets at the Water Treatment Plant, outline a phased approach to replacing aging assets, and define technological improvements that will assist operations staff with operating and maintaining the Water Treatment Plant. Staff are also completing an updated IRS for the City’s Wastewater Collection System, which will update staff’s understanding of sewer capacity limitations that guide the private sewer lateral offset program and prioritize capital replacement projects. Increasing Regulatory Requirements: Changing regulatory requirements continue to be a major driver for CIP project investment, staff training, and operational improvements. Regulatory changes have driven major work efforts, such as the WRRF upgrade and projects to inspect and conduct repairs on the Whale Rock spillway. Increasing regulatory requirements have also resulted in several structural changes to the Utilities department. Over the last year, the utilities department reclassified two water resources technician positions to specialist-level positions where they will focus on regulatory compliance for water conservation, recycled water, water loss, and cross-connection control programs. The City also reclassified an environmental compliance inspector into a stormwater program manager. The new stormwater program manager will focus on compliance with the City’s stormwater permit, coordinate the City’s larger program and budget, and evaluate potential mechanisms to fund the City’s overall stormwater management program The City also anticipates the delivery of a new municipal stormwater permit in the latter half of 2024, which will include trash capture requirements. Environmental programs staff will also coordinate the City’s response to a new Time Schedule Order (TSO) from the Regional Water Quality Control Board that requires the WRRF to reduce the amount of salts in the discharge of the plant (to San Luis Obispo Creek). 55 Page 327 of 369 Solid Waste & Recycling Solid Waste & Recycling (AB 939) A Year in Review The Solid Waste Program ended the year with expenditure savings. The Cost Center’s expenditures were $48,632 under budget, primarily due to staffing vacancies. The Program focused on maintaining compliance with state recycling and organics legislation, such as Senate Bill 1383, while continuing to complete large‐scale projects supporting the Council‐adopted Climate Action Major City Goal and Climate Action Plan. To achieve these goals, the program successfully established staffing support through the Cal Poly College Corps Fellowship Program to assist with implementing waste reduction initiatives and secured grant funding for infrastructure promoting waste diversion efforts. The San Luis Obispo County Integrated Waste Management Authority (IWMA) continues to be a key partner for the City, providing state‐mandated outreach to community members and reporting to the State of California. The City continues expanding its solid waste management program to administer new and existing initiatives, thereby advancing waste reduction and sustainability efforts that align with State laws and local goals. Variance Analysis Table 38. UƟliƟes Department Results Staffing and operaƟng expenditure accounts realized slight savings due to an extended leave during the ﬁscal year. The workload requirements from the temporary vacancy were offset with contract staffing and a College Corps Fellow. AB 939/SB 1383 Revenue Carryover AB 939/SB 1383 revenue is restricted funds only used for acƟviƟes that divert waste from the landﬁll; therefore, any unspent AB 939/SB 1383 funds are calculated and put in an assigned designaƟon account for eligible expenditures under AB 939/SB 1383 requirements. Table 39. Revenue Carryover AB 939/SB 1383 Revenue AB 939/SB 1383 Expenditures AB 939/SB 1383 Unspent Restricted Funds FY 19‐20 $169,642 $87,156 $82,486 FY 20‐21 $181,337 $119,369 $61,968 FY 21‐22 $190,196 $185,884 $4,312 FY 22‐23 $392,845 $260,715 $132,130 FY 23‐24 $351,096 $300,021 $51,075 FY 2022‐23 FY 2023‐24 FY 2024‐25 Solid Waste & Recycling Actual Budget Actual Funds Available % Budget Staffing 216,011$ 341,663$ 321,483$ 20,179$ 6% 307,790$ Contract Services 28,844 104,480 93,205 11,276 11% 31,500 Other Operating Expenditures 16,751 45,942 28,765 17,177 37% 24,584 Total 261,605$ 492,085$ 443,453$ 48,632$ 10% 363,874$ 56 Page 328 of 369 Solid Waste & Recycling Accomplishments & Challenges 1. State Compliance Efforts a. AB 341: Mandatory Commercial Recycling ‐ 100% compliance1 b. AB 1826: Mandatory Commercial Organics Recycling – 100% compliance c. SB 1383: Short‐Lived Climate Pollutants (Organics) – 100% compliance 2. Awarded the California Resource Recovery AssociaƟon’s 2024 Outstanding PracƟces in Venue/Event Resource Recovery Award. 3. Received a compeƟƟve IWMA Technical Assistance Grant to order and install 35 trash, recycling, and food waste containers in 13 high‐use and/or public City faciliƟes. 4. Secured 101 tons of compost used in City parks or made available to community members at the Emerson Park Community Garden. 5. Developed and began implementaƟon of a Municipal Waste ReducƟon Plan, outlining ke y iniƟaƟves to reduce municipally generated waste. 6. Completed a City facility Waste CharacterizaƟon and GeneraƟon Study to determine a municipal waste diversion baseline. 7. Developed a Recycle Right Volunteer Program with training resources to uƟlize volunteers for large City and permiƩed events. 8. Processed 392 illegal dumping requests and facilitated the removal of items in the public right‐of‐way. 9. In coordinaƟon with the Public Works Department, facilitated the procurement, wrapping, and installaƟon of 130 Big Belly units in the downtown area. 10. Developed and implemented special events sustainability guidelines to assist internal and external event organizers with City and State law compliance. Challenges: The most signiﬁcant challenge idenƟﬁed in the growing Solid Waste and Recycling Program is limited staff capacity to comply with State laws and implement the ambiƟous iniƟaƟves outlined in the City’s Climate AcƟon Plan and Municipal Waste ReducƟon Plan. Other large‐scale projects currently being completed include negoƟaƟons to renew the Solid Waste and Recycling Franchise Agreements and the development of a new methodology for Integrated Solid Waste Management rates. 1 Compliance efforts are monitored and measured through the SLO County Integrated Waste Management Authority and refers to the percentage of covered generators who are compliant with either a waiver or subscription to required services. 57 Page 329 of 369 Parks and Recreation Parks and RecreaƟon A Year in Review Over FY 2023‐2024, the department has achieved several key accomplishments while facing notable challenges. Signiﬁcant savings resulted from staffing vacancies across mulƟple divisions, including Youth Services, Community Services, Ranger Service, and Golf, leading to a posiƟon reclassiﬁcaƟon and the creaƟon of internal commiƩees aimed at improving employee retenƟon. EffecƟve budget management and resource allocaƟon also led to savings in Contract Services and Other OperaƟng Expenditures, although future expenditures are expected to align more closely with typical operaƟonal demands. FaciliƟes revenue exceeded expectaƟons due to improved collecƟon of overdue fees and increased special event permits, while Community Services saw higher‐than‐budgeted revenue from increased youth sports parƟcipaƟon. Golf operaƟons saw their most proﬁtable year since 2019, driven by consistent rounds played and improved course condiƟons. AquaƟcs expanded community programming with a strong focus on diversity, equity, and inclusion (DEI), alongside increased swim lesson offerings. Park projects were under construcƟon at North Broad Street, Cheng, and Mitchell parks with expected compleƟon in August 2024. However, challenges persist, including the need for ongoing equipment replacement, ﬂuctuaƟng uƟlity costs, and the unpredictable nature of encampments and related resource impacts. Staffing adjustments played a signiﬁcant role in budget outcomes: savings from full‐Ɵme vacancies helped offset the increased supplemental staff salaries, which were otherwise over budget. Despite these hurdles, the department's proacƟve strategies in managing resources and enhancing community services have driven notable progress and set a posiƟve outlook for the current ﬁscal year. Variance Analysis Table 40. Parks and RecreaƟon Expenditures Staffing – Salary savings from mulƟple vacancies of full‐Ɵme posiƟons throughout the year within the department, including substanƟal savings from Youth Services, Community Services, Ranger Service, and Golf, contribute to the total salary savings for the department. In FY 2023‐2024, Youth Services reclassiﬁed the vacant Program Assistant posiƟon to a Program Coordinator posiƟon using salary savings from two vacancies that persisted throughout the ﬁscal year. AddiƟonally, ﬁve supplemental staff were enrolled in PERS, with four conƟnuing to work for the City in FY 2024‐2025. While most of these posiƟons have since been ﬁlled, some posiƟons are sƟll in recruitment. The department created internal commiƩees, including onboarding and employee recogniƟon commiƩees, with the goal of improving employee retenƟon. Contract Services – The savings in Contract Services is primarily due to reduced contract class offerings and beƩer management of encampments and clean‐ups. The posiƟon responsible for oversight of contract classes was vacant for 6 months but has since been ﬁlled and staff are prioriƟzing revitalizing this program. FY 2022‐23 FY 2023‐24 FY 2024‐25 Parks & Recreation Actual Budget Actual Funds Available % Budget Staffing 4,233,128$ 4,772,572$ 4,548,190$ 224,382$ 5% 5,003,999$ Contract Services 309,930 371,003 306,639 64,364 17% 377,366 Other Operating Expenditures 549,263 597,496 565,655 31,841 5% 600,063 Total 5,092,322$ 5,741,071$ 5,420,484$ 320,587$ 6% 5,981,428$ 58 Page 330 of 369 Parks and Recreation Ranger Service increased enforcement presence in open space, which lead to reduced encampments in conjuncƟon with fuel reducƟon and management efforts along the Bob Jones Bike Trail, which was closed for longer than a month for a fence installaƟon. Although these savings were realized in FY 2023‐2024, the emphasis on increasing contract classes for the community is expected to reduce future savings in this area. AddiƟonally, while the Ranger Service cannot predict future encampments, having a budget available to address them remains essenƟal. Other OperaƟng Expenditures – Savings in a variety of accounts combined to create an overall savings in Other OperaƟng Expenditures throughout Parks and RecreaƟon. In FY 2022‐2023, Community Services strategically repurchased expensive, frequently used equipment for sports and programs to cover needs for FY 2023‐2024. As a result, the division avoided these costs last ﬁscal year, but will likely face them in FY 2024‐2025 as the equipment approaches the end of its useful life. AddiƟonally, the ample rainfall in Winter 2023 led to uƟlity savings at the Laguna Lake Golf Course, a beneﬁt not expected in future years. The vacancies in full‐Ɵme posiƟons also limited regular professional training opportuniƟes for new employees, but with most posiƟons now ﬁlled, staff are encouraged to take advantage of training opportuniƟes in the current ﬁscal year. This included Volunteer program coordinator, which was their ﬁrst year of program building with a dedicated budget and did not have the opportunity to aƩend trainings that had been budgeted for. In addiƟon, as the program expands, staff will uƟlize addiƟonal funds in the Adopt‐a‐Park program. Overall, the proacƟve budget and resource management in the previous ﬁscal year provided signiﬁcant savings and efficiencies, but as equipment reaches the end of its useful life and other variables like uƟlity costs and training needs come into play, future expenditures are expected to align more closely with typical operaƟonal demands. 59 Page 331 of 369 Parks and Recreation Table 41. Parks and RecreaƟon Revenues FaciliƟes revenue exceeded budget due to a combinaƟon of the collecƟon of overdue Outdoor Rental & Use Fee balances and the execuƟon of ﬁŌeen addiƟonal Special Events App/Permits. Staff turnover in the posiƟon responsible for collecƟng outstanding balances heavily impacted the collecƟon of the permit and facility fees on a ﬁscal year basis. However, this overage is not expected to be reoccurring as staff have created a system to avoid these shorƞalls in the future. AddiƟonally, the public is regaining momentum aŌer COVID and returning to hosƟng more events, driving special event applicaƟons and permits which is expected to conƟnue into the current ﬁscal year. Youth Services revenue was higher than budgeted due to the increase in summer childcare offerings in partnership with the school district. The District is funding the care for 200 children during the summer to supplement the summer school program, with funds received through grants. The District is paying these funds directly to the City based on the enrollment. Staff are not sure how long this program will remain funded by the District; however, because of staff savings in other areas, the Youth Services division had the resources this year to match the need. The school year programs also increased in revenue as the FY 2022‐23 FY 2023‐24 FY 2024‐25 Parks & Recreation Actual Budget Actual Variance % Budget Facilities Indoor Rental & Use Fees 40,251$ 65,100$ 64,704$ (396)$ ‐1% 65,100$ Library Rental 3,493 6,500 3,400 (3,100) ‐48% 6,816 Special Events Insurance 10,478 12,000 12,333 333 3% 12,000 Outdoor Rental & Use Fees 104,002 135,003 185,475 50,472 37% 140,253 Special Events App/Permit 33,841 30,000 51,394 21,394 71% 30,000 Youth Services Youth Services Camps 95,812 155,980 282,733 126,753 81% 163,202 Youth Services Childcare 708,004 663,616 743,247 79,631 12% 687,416 Community Services Adult Athletic Fees 102,428 138,000 135,895 (2,105) ‐2% 145,000 Youth Athletic Fees 94,054 76,000 112,232 36,232 48% 100,000 Special Events ‐ City Sponsored 1,345 4,037 4,037 ‐ 0% 4,000 Instruction Fees 76,827 92,722 66,904 (25,818) ‐28% 96,000 Aquatics Swim Instruction Fees 103,246 100,000 114,205 14,205 14% 105,000 Aquatics Daily Use Fees 86,573 130,000 105,403 (24,597) ‐19% 105,000 Multi Day Swim Passes 67,049 65,000 72,597 7,597 12% 71,000 Therapy Pool Fees 5,324 16,000 9,250 (6,750) ‐42% 10,000 Golf Golf Greens Fees 167,997 200,000 225,236 25,236 13% 210,000 Golf Lesson Fees 699 $‐ 782 782 1,000 Golf Rental Fees 5,140 6,000 6,406 406 7% 6,000 Driving Range Fees 10,901 13,000 13,672 672 5% 13,000 Golf Cart Rentals 19,424 25,000 25,139 139 1% 25,000 Other Revenue Sales Taxable 7,242 10,000 10,804 804 8% 10,000 Other Revenue 61,339 78,119 159,051 80,932 104% 55,000 Junior Ranger Camps 8,361 8,000 8,415 415 5% 8,000 Total 1,813,830$ 2,030,077$ 2,413,314$ 383,237$ 19% 2,068,787$ 60 Page 332 of 369 Parks and Recreation division conƟnued to ﬁnd creaƟve soluƟons to add new childcare spots with the ongoing demand for childcare in the community and in support of the Magor City Goal. Community Services revenue was higher than budgeted due to an increase in parƟcipant numbers for youth basketball and futsal leagues. AddiƟonally, a restructured community partnership agreement provided a higher percentage contribuƟon by the YMCA increased with expanded parƟcipant numbers in both sport camps and internal sport clinics. Staff have accounted for the increased parƟcipaƟon by increasing the budget for Youth AthleƟc Fees. AquaƟcs revenue was under budget and driven by over esƟmated revenue expectaƟons for AquaƟcs Daily Use Fees. As opposed to purchasing day passes as done in the past, the public showed more favorability to purchasing MulƟ Day Swim Passes in which the tenth swim is free. Both accounts were adjusted to reﬂect the new trend as it is foreseen to conƟnue in ﬁscal year 2024‐2025. Golf revenue was higher than budgeted due to consistent hours of operaƟon, fewer closure dates, and less comp and promoƟonal rounds increasing the proﬁts of Golf Green Fees signiﬁcantly. Golf revenue is highly dependent on weather condiƟons and staff are unable to foresee if condiƟons will remain; however, staff will conƟnue to provide fewer comp and promoƟonal rounds and have increased the budget for this account for ﬁscal year 2024‐2025. Other Revenue was over budget because Other Revenue includes deferred revenue, including CAPSLO sƟpends awarded to Youth Services. Although funding will conƟnue to roll over as deferred revenue, Parks & RecreaƟon cannot guarantee sƟpend funds regularly from CAPSLO and should not be an anƟcipated revenue going forward. Performance Measures Table 42. Parks and RecreaƟon Performance Measures Objective Measure 2023‐24 Target 2023‐24 Actual Provide inclusive, accessible programming that serves the whole community. # of Department Community Events 25 25 # of non‐profit permitted Facility Uses 120 125 # of program registrations 4,500 4,864 Strategic Goal: Programming is Directed to Diverse Users (P&R Strategic Plan Goal), DEI and Economic Vitality MCGs # of program offerings 400 637 # of childcare spots filled/offered 1500/1500 2357/2357 # of children receiving subsidy 60 CAPSLO 72 CAPSLO 50 City Sponsorships 26 City Sponsorships In Coordination with Public Works, engage the public to prioritize new and revitalized Recreational Amenities # of public outreach meetings 6 6 Strategic Goal: Expand Parks & Facilities (P&R Strategic Plan Goal), MCG Economic Stability # of updated or new parks and amenities in process 5 7 Creates and fosters a sense of community through citizen involvement # of recurring volunteers/total volunteer hours 380/4100 hours 115/5340 Strategic Goal: Maximize Community Resources & Collaborations (P&R Strategic Plan Goal) # of temporary Public Art or Cultural Art Events 5 5 61 Page 333 of 369 Parks and Recreation Leverage technology to engage the community and promote program offerings # of Instagram followers 7,800 7,942 Strategic Goal: Programming is Directed to Diverse Users (P&R Strategic Plan Goal) # of Facebook followers 5,000 5,700 Open Space Preservation and Enhancement # of miles of Open Space trails maintained 66.5 66.5 # of staff hours dedicated to fuel reduction 4,000 4,000 Strategic Goal: Nurture Open Space (P&R Strategic Plan Goal), Climate Action MCG # of encampment site clean‐ups removed from Open Spaces 110 70 # of Children Receiving Subsidy: Twenty‐six of the targeted 50 City sponsorships were granted to local children for childcare and aquaƟcs lessons. To help increase future awards to local children, the award amount was increased from $150 to $500 to families in Tier 2 eligibility and from $300 to $1,000 for Tier 1 eligible families. Staff recommended this increase when they recognized that the scholarship funding did not provide a signiﬁcant amount of support for families. At their previous award amounts, the scholarships equated to only 50 hours of one‐Ɵme care, or one and a half weeks of summer camp, when families may aƩend childcare for upwards of 23 hours per week during the school year and nine weeks of summer camp. Youth Services staff are markeƟng to provide more educaƟon to families about the scholarship opportuniƟes that the City offers. # of Recurring Volunteers/Total Volunteer Hours: The program has been rebuilt from the ground up under guidance of the new Volunteer Coordinator. During the transiƟon to a new tracking system, it is possible that not all recurring volunteers were captured. However, even with less actual volunteers, the amount of service has exceeded the performance measure. Moving forward, staff will recommend modifying this performance measure to capture "volunteers" rather than "recurring volunteers". # of Encampment Site Clean‐Ups Removed from Open Spaces: Staff removed roughly 70 encampments totaling over 15,000 lbs. of trash in FY 2023‐2024. The number of site clean‐ups decreased due to the Bob Jones Bike Trail closure for fence installaƟon and trail projects, including fuel reducƟon and management efforts, which lasted a over a month. Staff also increased presence with enforcement in open space, leading to reduced encampment opportuniƟes and will conƟnue to do so in FY 2024‐2025. Accomplishments & Challenges FaciliƟes The FaciliƟes Division conƟnued to manage both indoor and outdoor City recreaƟonal spaces, catering to internal and community reservaƟons. The Division effecƟvely maintained the Downtown Dining program in Mission Plaza, providing daily set‐up, maintenance, and clean‐up. City ﬁelds and courts were regularly used for youth and adult sports tournaments, leagues, and pracƟces. FaciliƟes such as the Library Conference and Community Rooms, Ludwick Community Center, Senior Center, and Meadow Park Building serve various community funcƟons, from social gatherings to meeƟngs. Recent upgrades include new chairs for events at the Jack House Gardens and a new projector in the Library Community Room, with support from the IT department. The Division also updated court rule signage at tennis faciliƟes and replaced damaged tables within the Downtown Dining Program to enhance the community experience. 62 Page 334 of 369 Parks and Recreation Despite these improvements, indoor rentals and Jack House Gardens bookings conƟnued to lag pre‐ pandemic levels. Many of the indoor reservaƟons for the Library Community Room and Ludwick Community Center were considered in‐house or comped due to uƟlizaƟon from City sponsored groups, resulƟng in reduced fee revenue collected. Staff have increased markeƟng efforts to reintroduce these venues to the community. Youth Services Youth Services conƟnued to provide accessible and quality childcare to the community at all ﬁve (5) elementary school sites located within the City (C.L. Smith, Hawthorne, Pacheco, Sinsheimer, and Bishop’s Peak), providing daily care to over 500 youth in the City program. Efforts to enroll more children off the waitlist have been successful, with 22 addiƟonal spots opened for children in February of 2024 due to strategic adjustments made by staff. Summer camp enrollment has more than doubled to over 350 through partnership with SLCUSD, accommodaƟng more children and ﬁlling a more diverse need for care. The division recruited dozens of supplemental staff and provided extensive training to ensure high‐quality care. AddiƟonally, the division‐maintained state licensing compliance and passed annual non‐scheduled licensing site checks. Community Services The Community Services Division conƟnued to foster community building with popular pop‐up events like the Jack House & Gardens Spring Concert Series and ﬁve Monday Meetup events. The September Scramble returned with more than 650 parƟcipants, and the Spring Fling Egg Hunt, Leprechaun Lost, and Boo Bash events offered seasonal fun and fesƟviƟes to local families. Senior programming has undergone signiﬁcant expansion, with the introducƟon of new acƟviƟes and events tailored to the interests and needs of older adults, including Senior walkers and hikers, mulƟ‐generaƟonal weekly trivia, Pet Week, holiday events, technology classes, and around‐the‐town excursions, enriching the lives of seniors and fostering social connecƟons within the community. Staff expanded Youth Sport Clinic offerings, holding clinics from September through May. The City partnered again with the YMCA on the youth basketball and futsal leagues, achieving record parƟcipaƟon numbers since the pandemic by expanding to 700 basketball parƟcipants with 71 teams, and 360 futsal parƟcipants with 40 teams this year. The annual free and award‐ winning youth Junior Giants sponsored program engaged over 250 parƟcipants with the assistance of 60 volunteer coaches. The Division also partnered with the local Central Coast Soccer group from August through May to provide adult soccer leagues and conƟnues to collaborate with local groups to offer a myriad of free, drop‐in acƟviƟes at various locaƟons, including UlƟmate, Pickleball, Volleyball, Dodgeball, Boomers SoŌball, basketball, and table tennis. Despite the staffing challenges of maintaining current services, programs, and events with two full‐Ɵme staffing posiƟons being vacant at different Ɵmes totally seven months, the Division managed to sustain its high level of service. Volunteer Program The Citywide Volunteer Program has made signiﬁcant strides under the guidance of the City’s full‐Ɵme Volunteer Coordinator. Over the past year, the Volunteer Program launched Engage SLO, a new web portal designed to adverƟse both new and ongoing volunteer opportuniƟes in support of City needs, as well as manage the tracking of volunteers. These opportuniƟes include iniƟaƟves such as Adopt‐a‐Park, Arbor Day, September Scramble, Boo Bash, Fall Creek Clean Up, Senior Center volunteers, Community Garden Service Saturdays, the Jack House Docent Program, and Ranger Workdays. Notably, the Adopt‐a‐Park 63 Page 335 of 369 Parks and Recreation program has expanded to encompass ﬁve City parks (from zero at the beginning of the ﬁscal year), demonstraƟng a growing commitment to community engagement. April is celebrated as Volunteer AppreciaƟon Month, recognizing the invaluable contribuƟons of regular and recurring volunteers, who collecƟvely provided over 3,330 hours of service since July 1, 2023. Public Art Program With the hire of a new Public Art Coordinator in January, the City’s Public Art program has been revitalized. Since January 2024, efforts have focused on engaging local arƟsts, assessing the City’s inventory, and collaboraƟng with agencies like the SLO County Arts Council and NAACP. The Program has renewed the popular Box Art Program, with plans to install 11 new boxes and has taken responsibility for the Chorro Street Underpass artwork installaƟon. In support of the Community Partnership Agreement with the SLO Museum of Art (SLOMA), a temporary sculpture at Mission Plaza lawn was replaced with a consigned piece by April Banks, and a new installaƟon by Warren Hamrick is planned for San Luis Ranch. AddiƟonally, SLOMA is working on a temporary art piece for Garden Street Alley. Notable accomplishments include commissioning an 8’x17’ interacƟve mural by Rebekah Tennesen, which debuted at the NAACP’s Juneteenth Event and has traveled to three of ﬁve Monday Meet Up events and directly interacƟng with 120 community members. The program also launched a monthly Art Talk Series with SLO County Arts, seeing a 38% aƩendance increase from June to July, with more events planned in the current ﬁscal year. AddiƟonally, an online system is being used to evaluate the maintenance needs of the City’s public art collecƟon, with a similar system in development for the Box Art Program. However, in April 2024, staff was informed of a CA State Licensing Board (CSLB) code interpretaƟon that hinders the commission, acquisiƟon, and maintenance of public art murals, including the Box Art Program. Staff have been working with Parks and RecreaƟon and other City departments to align pracƟces with the CSLB code, a Ɵme‐ consuming process affecƟng the Ɵmelines and process within the enƟre Public Art program. Ranger Service The Ranger Service diligently maintains and patrols the City’s 4,050 acres of open space across 12 City‐ managed properƟes, dedicaƟng resources to fuel management in the Wildland Urban Interface (WUI) and addressing trash and debris in the City’s open spaces and creeks. EffecƟve management has reduced the presence of unhoused populaƟons in these areas. The Ranger Service completed three new trail projects— Bog Thistle, King Trail Re‐Route, and the Righeƫ Hill Summit Trail—and ﬁnalized the design and layout for the Righeƫ Hill Lower Loop Trail. AddiƟonally, the Bob Jones Bike Trail temporarily closed for two months to facilitate ﬁre fuel miƟgaƟon and creek clean‐up, using goats from The Goat Girls for natural brush removal. The Ranger Service expanded its educaƟonal programming, offering more environmental web‐ based educaƟon videos, increasing social media presence, and providing Ranger‐led classroom presentaƟons and interpreƟve hikes. The Junior Ranger Camp sessions sold out and expanded to three one‐week sessions. Notable accomplishments include compleƟng phase 1 (Mt. Bike Loop trail and Kids Pump Track) of the Laguna Lake Bike Park using in ‐house resources; and regrading the main trails on Cerro San Luis Open Space to improve condiƟons aŌer erosion from increased rains and heavy usage over the past 10 years. However, the Ranger Service faced staffing challenges with a variety of vacancies over the year, including a signiﬁcant resource loss with the reƟrement of a Ranger who served for 19 years. Recruitment is currently underway resulƟng in one vacancy out of the six posiƟons. AquaƟcs 64 Page 336 of 369 Parks and Recreation The year‐round AquaƟc Division achieved stronger staffing retenƟon and recruitment this year through ongoing promoƟon of lifeguard training opportuniƟes and effecƟve forecasƟng of staffing levels for non‐ summer months. This enabled consistent operaƟonal hours for lap swimming and regular warm water programming surpassing pre‐pandemic operaƟonal hours. AddiƟonally, staff increased swim lesson offerings, including group and baby & me sessions, expanding from 195 to 268 lessons to provide more opportuniƟes for the community. Monthly staff trainings conƟnued, covering First Aid, CPR, water rescue techniques, customer service, and DEI discussions. The Division supported the year‐round aquaƟc teams of the SLO Seahawks Swim Club, local SCUBA shops, Mission Prep High School, and concluded a short‐term agreement with Atascadero High School as their pool construcƟon was completed. Staff focused on new promoƟonal strategies for community water safety, including videos, inter‐County aquaƟc meeƟngs, and focused in‐person trainings, while conƟnuing to offer public lifeguard training and instructor courses year‐ round. Notable accomplishments included offering new winter lessons and varied hours, transiƟoning private lessons to group sessions to enhance availability, and developing an online Water Safety Hub with community‐based safety videos and Ɵps. In May, the Division issued a proclamaƟon for Water Safety Month and received the Golden Hard Hat Award at the annual Employee RecogniƟon event for their commitment to safety. The Division partnered with local groups to meet diversity and inclusion goals, hosƟng Water Play Day with the Central Coast AuƟsm Spectrum Center, Splash Bash with SLO County Friday Night Live for middle school teens, and Swim with Pride with SLO GALA Pride and Diversity Center to celebrate the end of Pride Month. However, staff recruitment during the school year posed challenges, leading to operaƟonal changes for programs and public offerings. Golf Golf staff effecƟvely maintained the 26‐acre, 10‐hole Laguna Lake Golf Course, providing regular programming despite occasional storm‐related closures in the winter and ongoing remediaƟon of the on‐ site Pro Shop. The course enjoyed consistent round play throughout the year, including during the typically slower post‐Thanksgiving and winter period, due to ideal playing condiƟons. Staff expanded support for local community groups by hosƟng Cal Poly Kinesiology courses, Laguna Middle School PE courses, SLO High School courses, and free First Tee youth lessons. The course also saw a return of local tournament play. InnovaƟve watering techniques ensured a consistently green course from August to October while conserving water. The parking lot was restriped, and parking stops were added to improve traffic ﬂow and safety. Notable accomplishments include exceeding revenue goals through consistent operaƟon and proper staffing, providing upgraded golf carts for rentals, and resurfacing and repainƟng the parking lot to enhance traffic ﬂow. However, challenges include a bridge replacement project scheduled for Summer 2025, which required adjusƟng Hole #1 for safety reasons, ongoing irrigaƟon leaks due to an aging system, and the Pro Shop remaining out of service while staff work with a consultant on its rehabilitaƟon project resulƟng in operaƟons being conducted from a temporary office trailer. 65 Page 337 of 369 Police Police A Year in Review During FY 2023‐24, the Department focused on maintaining service levels, hiring and recruitment, ﬁnalizing the Department’s ﬁve‐year strategic plan, deploying new community‐policing soŌware, increasing community engagement, and working with Public Works staff on the 1106 Walnut tenant improvement project. Staffing conƟnued to be a challenge throughout the year which had an impact on the budget; the Department ended the ﬁscal year with a savings of $174,766, which is about 1% of the department’s total budget. Unfortunately, this savings was a direct result of vacant posiƟons, also uƟlized to cover the temporary CSO contract for downtown and overƟme overages due to ﬁlling vacant police shiŌs. As explained in more detail below, overƟme expenditures reached the highest point in over ten years. Total overƟme expenditures for the year were $1.9M, an increase of about 24% from the previous ﬁscal year and almost a 50% increase from FY 2021‐22. The department did not realize any salary savings despite having some vacancies throughout the year. Variance Analysis Table 43. Police Department Variance Analysis Staffing: The table above indicates the department ended the year within budget and without salary savings. However, in mid‐July 2023, Council adopted a Memorandum of Understanding between the City and the San Luis Obispo Police Staff Officer’s AssociaƟon. The impact of the labor agreement in FY 2023‐ 24 was an increase of approximately $463K, which was not budgeted due to Ɵming of negoƟaƟons. The department was able to absorb some of the increase, but also used $212,438 from the City’s MOU Adjustments/Staffing ConƟngency account to cover the remaining impact at year end. Increased overƟme also affected the Department’s budget. Paid overƟme hours totaled 22,266 for the ﬁscal year, an increase of about 7% from FY 2022‐23 and a 32% increase from FY 2021‐22. FY 2022‐23 FY 2023‐24 FY 2024‐25 Police Actual Budget Actual Funds Available % Budget Staffing 19,960,789$ 21,644,505$ 21,644,505$ 0$ 0% 21,979,903$ Contract Services 854,377 1,083,666 934,916 148,750 14% 1,063,082 Other Operating Expenditures 615,234 749,353 723,338 26,016 3% 585,182 Total 21,430,400$ 23,477,525$ 23,302,759$ 174,766$ 1% 23,628,167$ 66 Page 338 of 369 Police Overtime Hours & Expenditures 2021‐22 2022‐23 2023‐24 Paid OT Hours 16,843 20,838 22,266 OT Budget $708,187 $718,069 $858,334 Expended $1,307,379 $1,569,470 $1,952,924 Even prior to FY 2021‐22, department expenditures in overƟme have exceeded the overƟme budget. In these instances, the department was able to use salary savings to cover the overage, which sƟll resulted in some salary savings at year end. Because of this, the department has been unable to increase budgets related to overƟme. Increased overƟme has essenƟally been related to shiŌ coverage as the department has not been fully staffed for many years. The result has been to use the “savings” from vacant posiƟons to cover the overƟme which typically nets out at year end with some salary savings. Although the department had some vacancies this past ﬁscal year, there was not enough salary savings to cover the increase in staffing related costs and increased overƟme. The table below reﬂects overƟme hours by type over the past three ﬁscal years. The data is not inclusive of all types of overƟme, just those that have shown a considerable increase since FY 2021‐22. Overtime Hours by Type % increase in 2023‐24 OT Type FY 2021‐22 FY 2022‐23 FY 2023‐24 Compared to 21‐22 Compared to 22‐23 Shift Coverage 6,944 7,270 7,669 10.4% 5.4% Special Events 932 1,844 1,962 110% 6.4% SWAT Training & Call Outs 698 1,064 1,754 151% 65% Cal Poly 225 318 1,107 392% 248% Farmers’ Market 368 374 543 47% 45% Council Meeting 25 84 145 480% 72% More detail on the type of events worked in FY 2023‐24 related to “Special Events” and “Cal Poly” overƟme hours are shown in the tables below. The events and hours listed below do not include all events worked, just those that had signiﬁcant overƟme hours. Special Events – Example by Type FY 23‐24 Hours St. Patrick's Day/St. Fratty's 535 Halloween 334 Protest Related 206 Assist Other Agencies (AOA) 170 Honor Guard Related 152 Holiday Parade 110 Other Events (including, but not limited to Career Fairs, Cops N' Kids Day, National Night Out, Law Enforcement Night, City to Sea, Mission Plaza Events, etc.) 157 67 Page 339 of 369 Police OverƟme hours related to Special Events have conƟnued to increase over the past few years. Speciﬁcally, deployment for St. Patrick’s Day and Halloween have increased due to the crowds and popularity of the events. As shown in the table below, St. Patrick’s Day overƟme increased 13% from FY 2022‐23 and 400% from FY 2021‐22. Halloween hours increased 68% from FY 22‐23 and almost 200% from FY 2021‐22. Department staff conƟnues to work with Cal Poly to idenƟfy reasonable soluƟons that address student safety and the need for a public safety presence. Hours by Fiscal Year Event FY 21‐22 FY 22‐23 FY 23‐24 St. Patrick's Day/St. Fratty's 107 473 535 Halloween 112 199 334 Over the past few years, the Department has had an agreement with Cal Poly to provide staffing (as available) at preplanned events, such as football games or graduaƟon, based on a predetermined officer rate. This MOU expired in October 2023 and staff is working with Cal Poly to renew the agreement and update officer costs to beƩer reﬂect actuals. Not all overƟme hours are reimbursed by Cal Poly, just those that are requested through the MOU. For example, the hours shown in the chart below related to FY 2023‐24 GraduaƟon were reimbursed by Cal Poly; however, of the 673 hours worked related to the Start of School, only 35 hours were reimbursed for traffic control based on Cal Poly’s MOU request for officers. The table below shows overƟme hours related to Cal Poly. Not all hours are reﬂected, just those that have signiﬁcantly increased over the past few years. Hours by Fiscal Year Cal Poly – Example by Type FY 21‐22 FY 22‐23 FY 23‐24 Start of School 131 233 673 Protest Related 0 0 249 Graduation 35 49 111 Lastly, SWAT overƟme hours have signiﬁcantly increased since FY 2021‐22. This is due to the Regional SWAT team training twice per month as opposed to just one day per month in prior years. In FY 2023‐24, approximately 218 hours (12% of total SWAT hours) were aƩributed to actual call outs and all other hours were training related. Overtime Hours by Type % increase in 2023‐24 OT Type FY 2021‐22 FY 2022‐23 FY 2023‐24 Compared to 21‐22 Compared to 22‐23 SWAT Training & Call Outs 698 1,064 1,754 151% 65% 68 Page 340 of 369 Police Contract Services: The Department’s Contract Services accounts ended the year with a 14% savings. The majority of savings was from the AdministraƟon cost center due to being unable to hire the Social Worker posiƟon (part of the Community AcƟon Team). This posiƟon was funded by the City and contracted through Transi Ɵons Mental Health AssociaƟon (TMHA); department staff worked with TMHA throughout the year to hire a successful candidate, but unfortunately the posiƟon remained unﬁlled. In addiƟon, the department had a savings of about $31,100 that was supposed to be encumbered for sidewalk striping related to the 1106 Walnut Tenant Improvement project. Funding for the striping was not part of the original project budget, so the Police Department agreed to use $10,000 from this account along with approved Ventures and ConƟngencies in the amount of $20,000 for this project. The purchase order for this work was not completed in FY 2023‐2024, and a carry over request in the amount of $31,100 (the bid amount for the work) has been made to allow the work to be completed by the Public Works Department in ﬁscal year 2024‐2025. Lastly, the department did not use funds related to janitorial costs for the 1106 Walnut building that were approved as part of the Financial Plan. Due to several factors, including the tenant improvement schedule, staff has not been able to move into the new building. Savings in the amount of about $20,000 were realized as a result. Other OperaƟng: All other operaƟng accounts ended the year with a 3% savings. Some savings were aƩributed to officers not starƟng assignments in Bikes or Motors/Traffic during the year, and as a result the department did not purchase specialized equipment for the assignments. There were also savings in uƟliƟes accounts (PG&E) due to staff not occupying the 1106 Walnut building in the ﬁscal year. Police Revenue Table 44. Police Department Revenue FY 2022‐23 FY 2023‐24 FY 2024‐25 Police Actuals Budget Actual Variance ($) Variance (%)Budget Accident Reports 4,884$ 3,400$ 4,105$ 705$ 21% 3,400$ Administrative Citations ‐ Safety 148,616 155,833 281,074 125,241 80% 125,833 Alarm Permits ‐ Contract (Police)190,955 170,000 227,151 57,151 34% 90,000 Collision Investigation 972 1,000 1,272 272 27% 3,000 DUI Cost Recovery 28,138 45,000 73,098 28,098 62% 20,417 Miscellaneous Revenue 10,031 ‐ ‐ ‐ 0% Other Police Revenue 262,032 288,997 279,490 (9,507) ‐3% 250,000 Police Department Permits 3,826 4,011 6,875 2,864 71% 4,011 Police Issued Parking Fines 53,115 53,000 44,878 (8,122) ‐15% 70,000 Property Release Fees 1,181 ‐ 200 200 0%‐ Second Response Fees 482 1,200 1,581 381 32% 1,200 Tobacco Permits 32,339 30,450 32,685 2,235 7% 30,450 Tow Release Fees 21,974 12,000 20,858 8,858 74% 12,000 Witness Fees 4,965 1,606 2,750 1,144 71% 1,606 Total 763,511$ 766,497$ 976,018$ 209,521$ 27% 611,917$ 69 Page 341 of 369 Police Police revenue exceeded projecƟons which was mostly aƩributed to AdministraƟve CitaƟons, Alarm revenue and DUI Cost Recovery. 1. AdministraƟve CitaƟons: In FY 2023‐24 there was an increase of about 37% in the number of AdministraƟve CitaƟons wriƩen. A contributor was related to the Safety Enhancement Zones (SEZ) this past ﬁscal year which were for a longer period of Ɵme compared to FY 2022‐23 and there were more Ɵckets wriƩen, which were also set at a higher fee per the SEZ. See chart for citaƟons wriƩen related to noise and drinking alcohol in public. 2. Alarms: Alarm revenues exceeded projecƟons by about 34%. AŌer speaking with Finance staff, it was discovered that Fire Alarm revenue has also been included in this account when it was supposed to be transferred to the Fire revenue account throughout the year. Finance revenue staff indicated that revenue will be transferred to the proper accounts moving forward. Another reason why revenues increased is related to alarm permit renewals; the total renewals in FY 2023‐24 were much higher compared to the previous year. Permits are valid for 12 months and the renewal schedules are not all in synch; residenƟal renewals increased by about 98% from FY 2022‐23 and commercial renewals increased by about 56%. 3. DUI Cost Recovery: Revenues related to DUI Cost Recovery were 62% higher than projected. Included in the revenue for FY 2023‐24 were also some signiﬁcant amounts from the previous ﬁscal year which totaled about $13K that were booked in the incorrect year. Finance staff also indicated that some revenue in this account (about $6,500 in FY 2023‐24) also includes resƟtuƟon payments received from County probaƟon which are not necessarily related to DUI Cost Recovery. 70 Page 342 of 369 Police The actual number of DUI Cost Recovery invoices sent by Police to Finance were fairly similar from FY 2022‐23 (42 total) to FY 2023‐24 (37 total). Lastly, Finance staff also indicated that some revenues may be inﬂated due to “write‐offs” not being conducted during the ﬁscal year. Write ‐offs are reﬂected in the account by removing the expected invoice amount when payment is not made, and the amount is then sent to collecƟons, thus reducing actual revenues. Performance Measures Table 45. Police Performance Measures Objective Measure 2023‐24 Target 2023‐24 Actual Reduce Crime Strategic Goal: Economic Recovery, Department Mission # of total Part I Crime by year.1 2,010 1,516 Provide safe roadways for pedestrians, vehicles, and bicyclists. Strategic Goal: Patrol Objectives, Department Mission # of total traffic collisions.2 Vehicle: 420 Vehicle: 430 Pedestrian: 34 Pedestrian: 25 Bicycle: 32 Bicycle: 40 # of targeted enforcement operations conducted under the Office of Traffic Safety Grant per year3 DUI Checkpoints: 2 DUI Checkpoints: 1 DUI Saturation Patrols: 28 DUI Saturation Patrols: 15 Traffic Enforcement Operations: 14 Traffic Enforcement Operations: 8 Distracted Driving Enforcement: 5 Distracted Driving Enforcement: 4 Bicycle & Pedestrian Enforcement: 9 Bicycle & Pedestrian Enforcement: 4 Reduce Homeless related Calls for Service through proactive engagement. Strategic Goal: Economic Recovery, Department Mission, Patrol Objective # calls related to homelessness 6,300 8,716 # of unique individuals contacted by CAT 305 400 # of Family & Agency Reunification 8 6 # of Local Permanent Housing 12 2 # of Mental Health/Substance Abuse Treatment Referrals 100 202 1 Part 1 Crimes include: homicide, forcible rape, robbery, aggravated assault, burglary, and motor vehicle theft. Figures shown represent calendar year 2023. 2 Traffic Collision data is calendar year 2023. 3 Enforcement operations shown for the OTS Grant are only reflective of October 2023 (when the grant started) to June 30, 2024. The grant continues until September 30, 2024, so more operations are planned but are not reflected in the “actuals” since reporting for the fiscal year ended on June 30th. It is anticipated that staff will meet grant objectives. 71 Page 343 of 369 Police Performance Measure Variance ExplanaƟon: 1. The Target Number of Tra ffic Collisions are an esƟmate (typically based on the prior year) and actuals will vary depending on events that occur during the year. Unfortunately, actuals were higher than projected for vehicle and bicycle related collisions. Pedestrian collisions were lower than projected. 2. Total Number of Targeted Enforcement OperaƟons for the OTS Grant are only reﬂecƟve of October 2023 (when the grant started) to June 30, 2024. The grant conƟnues unƟl September 30, 2024, so more operaƟons are planned but are not reﬂected in the “actuals” since reporƟng for the ﬁscal year ended on June 30th. It is anƟcipated that staff will meet grant objecƟves. 3. The Number of Family & Agency ReuniﬁcaƟons were slightly lower than projected. Other outreach agencies such as Fire’s MCU and CAPSLO have now adopted this same type of program, so this service is now shared. The department’s total reuniﬁcaƟons were six for the ﬁscal year; however, there were also two addiƟonal reuniﬁcaƟons that were offered, but the individuals did not show up to ﬁnalize the process. 4. Total Number of Local Permanent Housing referrals were lower than projected. It’s important to note that the Department’s CAT team acts as a facilitator rather than a direct services provider. Their role is to guide and connect individuals to housing resources, but rely on the availability of those resources, including housing inventory, which may be limited. Factors that inﬂuence the complexity of housing referral process include housing availability, eligibility criteria, challenges with engagement, and various other external consideraƟons. Accomplishments & Challenges Department accomplishments during FY 2023‐24 include: 1. ReducƟon in crime: In 2023 the City experienced a 7% reducƟon in violent crime and a 27% decrease in property crime; this resulted in an overall reducƟon of 24% in Part 1 Crimes overall. 2. Five‐Year Strategic Plan: In the fall of 2023, the Department held a staff retreat to discuss and develop the vision and goals for the ﬁve‐year strategic plan. With the help of the consultant, staff focused on developing objecƟves based on department prioriƟes, concerns and expectaƟons. A robust plan was developed and ulƟmately adopted by Council in early April 2024. The goals include: a. Service to Community b. Community Engagement c. Diversity Equity & Inclusion d. Recruitment & RetenƟon e. Health & Wellness f. Improving Infrastructure, Equipment & Technology Staff have been assigned to each goal and objecƟve and progress is well underway. 3. Department Staffing: In FY 2023‐24, the department hired eighteen (18) employees to ﬁll vacancies. These posiƟons included 6 police officers, 2 police cadets, 5 communicaƟon technicians, 3 community service officers, a records clerk and a property & evidence technician. 72 Page 344 of 369 Police 4. Community Service Officers: In 2023, the department increased the number of civilian Community Service Officers from four to six. The CSO team has been extremely successful in supporƟng patrol by responding to non‐hazardous calls for service, providing traffic control when needed, and issuing citaƟons for non‐moving traffic violaƟons and enforcing other Municipal Code violaƟons. Increased visibility in the downtown core has made an impact and business owners have noƟced a posiƟve impact. 5. Staffing Study: In February 2024, the department released a Request for Proposal for consultant services to conduct a staffing assessment. The need for a staffing study was idenƟﬁed during the creaƟon of the department’s ﬁve‐year Strategic Plan as staffing numbers for sworn posiƟons remain the same over the past twenty years. Staff has already started working with the consultant and will be sharing results with Council when the study is complete. 6. New technology: The department is leveraging technology to increase community engagement by uƟlizing soŌware that automaƟcally sends one‐to‐one text messages, emails, and mobile surveys to crime vicƟms, reporƟng parƟes and other members of our community. The Police Department can use this insight from the surveys to keep a pulse on the quality of customer service provided to the community while providing a meaningful voice to those receiving direct services. In addiƟon, the department implemented soŌware to beƩer direct officer deployment based on crime data and daily calls for service. This soŌware has already proven successful in making patrol operaƟons more effecƟve across the city. Directed patrol assignments have ensured officers have been in the right place at the right Ɵme deterring crime and at Ɵmes on sighƟng crimes in progress. Challenges the department encountered over the past ﬁscal year: 1. Staffing: Although the department hired 18 employees during the year, staffing conƟnued to be a challenge. The department averaged a 10% vacancy rate each month throughout the year which impacted other employees and deployment strategies. Special assignments such as Tra ffic Safety was understaffed as well as the Community AcƟon Team and Downtown Bikes. It conƟnues to be difficult to recruit qualiﬁed applicants and retain good employees. Included in the Department’s Strategic Plan is an objecƟve to focus on Recruitment and RetenƟon. Staff is working to increase recruitment opportuniƟes and work to enhance the website and social media outlets related to staffing and hiring. 2. Community AcƟon Team Staffing: While the Department’s partnerships with County Behavioral Health and TMHA remain producƟve, 2023 presented challenges in ﬁlling the vacant social worker and case manager posiƟons. The County is now in discussions with the City’s Police and Fire Departments regarding Licensed Psych Tech posiƟons that will be contracted through the County to work with CAT and the Fire’s MCU. 73 Page 345 of 369 Fire Department Fire Department A Year in Review In FY 2023‐24, Fire Department staff made signiﬁcant progress on work efforts impacƟng every program within the Department budget and ﬁnished the year $156,317, or 1%, under budget. The savings came primarily from the Academy cost center 8505. Tradi Ɵonally the academy is scheduled every other year, however, due to extensive vacancies an extra academy was held in FY 2022‐23, negaƟng the need in FY 2023‐24. This allowed the department to realize $76,600 in savings. Apparatus repairs were an unexpected challenge in FY2023‐24. Increased repairs on Truck 1 drove expenditures over budget by $32,160. Truck 1 conƟnually needs repairs to remain operaƟonal as it is experiencing engine failure. The budget in FY 2024‐25 includes full refurbishment of Truck 1 and the hiring of an addiƟonal mechanic to complete the work, extending the life of Truck 1 to 2030. Staffing conƟnues to be a challenge with staff turnover and long‐term injury absences. OverƟme to backﬁll vacancies and upstaffing during unplanned emergencies caused Emergency Response overƟme to end $510,980.48 over budget. Variance Analysis Table 46. Fire Department Results Staffing: In January 2024, a new bargaining agreement was implemented between the City and the Local 3523, which represents nearly all of the City’s Fire Department staff members. This unbudgeted agreement included salary increases ranging from 4% to 10% depending on posiƟon. This increase affected not only wage costs but all related accounts as well, including reƟrement contribuƟons, Medicare and overƟme. The esƟmated increased cost of this agreement for the second half of the ﬁscal year totaled $262,524.00. The department saw the departure of both the Emergency Manager and Fire Marshal earlier this year; and, at the end of the year, the Community Resource Services Specialist, staffed on the Mobile Crisis Unit, departed. These vacancies allowed the Fire Department to realize some salary savings to help counter other increased salary costs. A conƟnuing challenge for the Emergency Response division is overƟme. FY2023‐24 overƟme for the division exceeded budget by $510,950.48, however, this was down from FY2022‐23 when Emergency Response overƟme exceeded budget by $1,115,234.00. The reducƟon came mainly from injury backﬁll and general overƟme where over 10,000 fewer hours of overƟme were worked. FY 2022‐23 FY 2023‐24 FY 2024‐25 Fire Actual Budget Actual Funds Available % Budget Staffing 14,417,808$ 14,848,067$ 14,848,067$ 0$ 0% 15,806,329$ Contract Services 348,924 456,795 396,426 60,369 13% 268,273 Other Operating Expenditures 630,166 843,601 747,654 95,947 11% 662,965 Total 15,396,897$ 16,148,464$ 15,992,147$ 156,317$ 1% 16,737,567$ 74 Page 346 of 369 Fire Department Overtime Hours and Expenditures 2023 2024 Decrease Overtime Budget $1,013,136 1,137,513 n/a Total Hours Worked 34,940 25,299 9,640 Total OT Paid 2,128,370 1,648,463 $479,907 The Emergency Response division was nearly fully staffed for the ﬁrst Ɵme since prior to COVID, greatly reducing the number of overƟme hours due to vacancies. While injury backﬁll conƟnued to affect overƟme hours, the combinaƟon of hiring new employees and enhanced case management by Risk Management in Human Resources greatly reduced the lost Ɵ me for long term injuries. It remains clear overƟme is under budgeted for the division and, in the coming 2025‐2027 Financial Plan cycle, overƟme will be carefully evaluated for increased accuracy in future budgets. Contract Services: The Fire Department realized 3% savings in contract services, for $12,276 budget remaining. This small budget savings is due to some budgeted maintenance not being necessary in FY 2023‐24. Several large Purchase Orders (PO) were opened in July 2023 for conƟnuous use throughout the ﬁscal year. At the end of the year those PO’s were closed and the unused funds were released as budget savings. The largest PO was for the case worker on the Mobile Crisis Unit. That posiƟon began the year as a posiƟon contracted with Transi Ɵons Mental Health AssociaƟon (TMHA) then became a City contract posiƟon beginning in late March, allowing some savings for the remainder of the year as the salary was less than the contract cost. Other OperaƟng: Apparatus equipment maintenance was over budget due to Truck 1’s high number of expensive repairs needed to remain operaƟonal. Since 2011 when Truck 1 was placed into service, it has responded to an unanƟcipated increase in annual call volume. These increased numbers have resulted in addiƟonal repairs to keep Truck 1 operaƟonal as it is beginning to experience engine failure. Truck 1 is scheduled to receive a full refurbishment that will include replacement of major parts, including the engine, in FY 2024‐25. Upon refurbishment compleƟon, Truck 1 is expected to extend its life to 2030. Public Safety Supplies exceeded budget by $18,519. These supplies are primarily medical supplies placed on apparatuses and used when responding to medical calls. While the budget was increased for this cycle, inﬂaƟon outpaced expectaƟons for the supplies. Secondly, an increase in the number of medical calls uƟlized more supplies than anƟcipated driving expenditures above the budget. Fire PrevenƟon implemented new inspecƟon soŌware that required an unforeseen upgrade of hardware, exceeding budget by 33%. These costs were oneƟme and have improved the ability of staff to complete inspecƟons. As previously discussed, a recruit academy was budgeted for this year but ulƟmately was determined to not be necessary aŌer three consecuƟve years of hiring ﬁreﬁghters and academies. The department is anƟcipaƟng a recruitment and subsequent academy in FY 2024‐25 and is requesƟng carryover for the funds from the academy cost center. 75 Page 347 of 369 Fire Department Fire Department Revenue Table 47. Fire Department Revenue CUPA InspecƟon Fees: Increased revenue is a result of mulƟple Underground Storage Tank (UST) fees. These fees occur when a business is either installing a new tank or repairing an old tank. They are unpredictable and therefore budgeted conservaƟvely. Fire Alarm Permits: Fire Alarm Permit revenue is down 96% with only $1,853 realized this ﬁscal year. In consultaƟon with Finance, Fire’s revenue was included with Police’s alarm permit revenue. The Police Department exceeded budget for alarm permit revenue. Finance revenue staff indicated revenue will be transferred to proper accounts moving forward. Fire Plan Check & InspecƟon: Revenue decreased 11% below budget due to cyclical nature of the construcƟon industry. Previous years saw annual increases and in FY2023‐24 plans submiƩed decreased. The reƟrement of the Fire Marshal in December 2023 also reduced staff capacity to complete plan review, forcing the department to send plans to a contracted vendor for review. R1 InspecƟon Fees: The compleƟon of several new hotels and apartment complexes have increased the inspecƟons staff completes resulƟng in a revenue increase of 7% for these inspecƟons. Cal Poly Fire Services and Medical ER Recovery: Both of these are contractual agreements. Medical ER Recovery increases with CPI and is announced in late fall, well aŌer the City’s budget is established. The increase is esƟmated and this year the actual was 1% higher than esƟmated. Table 48. Fire Department Performance Measures ObjecƟve Metric 2023‐24 Target 2023‐24 Actual Deliver Timely EffecƟve Response to ensure rapid care and hazard miƟgaƟon Strategic Goal: Other Department ObjecƟves Meet the Total Response Time (TRT) goal of 7 minutes or less to 90% of all lights‐and‐siren emergencies in the City as deﬁned by the Department’s Master Plan. TRT Includes Call Processing Time, Turnout Time, and Travel Time. 7:00 8:30 FY 2022‐23 FY 2023‐24 FY 2024‐25 Fire Actuals Budget Actual Variance ($) Variance (%)Budget Cal Poly Fire Services 362,109$ 466,287$ 466,187$ (100)$ 0% 361,684$ CUPA Inspection Fees 217,335 176,954 223,681 46,727 26% 172,800 Fire Alarm Permits 4,743 10,010 1,853 (8,157) ‐81% 10,010 Fire Department Permits 99,591 108,000 99,606 (8,394) ‐8% 108,000 Fire Plan Check & Inspection 363,875 360,000 319,802 (40,198) ‐11% 350,000 Medical ER R ecovery 209,566 217,817 220,342 2,525 1% 218,452 Other Fire Department Revenue (430) 16,074 56,713 40,640 253% 5,890 R1 Inspection Fees 356,192 351,000 374,150 23,150 7% 351,000 Total 1,612,981$ 1,706,142$ 1,762,336$ 56,194$ 3% 1,577,836$ 76 Page 348 of 369 Fire Department Meet the Call Processing Time goal of 1 minute or less to 90% of all lights‐and‐siren emergencies in the City as part of TRT. 1:00 1:32 Meet the Turnout Time goal of 2 minutes or less to 90% of all lights‐and‐siren emergencies in the City as part of TRT. 2:00 2:05 Meet the Travel Time goal of 4 minutes or less to 90% of all lights‐and‐ siren emergencies in the City as part of TRT. 4:00 5:45 Provide Ɵmely service to the development community. Strategic Goal: Housing % of Fire Department Development Review acƟviƟes completed within published cycle Ɵmes. 80% 58.2% Plan Review completed # 581 348 Occupancy InspecƟons* 1119 637 % of annual amount* N/A 56% State Mandated InspecƟons* 667 527 % of annual amount* N/A 79% Hazardous Materials InspecƟons (CUPA) N/A 334 Training Training Hours for all personnel N/A 19,528.25 *Tracked by calendar year – Occupancy InspecƟons should be at approximately 50% for end of the ﬁscal year. While the Fire Department did not meet the response Ɵme performance targets in FY 2023‐24, the target remains unchanged in FY 2024‐25 due to NaƟonal Fire ProtecƟon AssociaƟon recommended standards. The ﬁre department successfully worked to implement process improvements based on data analysis and turnout Ɵmes were improved by 15 seconds year over year. Travel Ɵme is the most difficult Ɵme to improve in the short term as they are impacted by road construcƟon, traffic, roadway design changes and expanded response zones due to annexaƟons in the southern end of the City. Some locaƟons which generate a large proporƟon of calls further increase travel Ɵme stats. The Homeless Services Center at 40 Prado Lane is outside the four‐minute response zone but is the locaƟon of over 400 calls the department responds to annually. This locaƟon and others like it increase overall travel Ɵme outside of performance measure targets. Fire PrevenƟon staff encountered challenges largely resulƟng from the reƟrement of the Fire Marshal in December 2023 that reduced staff capacity. As of July 2024, a new Fire Marshal joined the department, and the part Ɵme inspector was increased to full Ɵme. The Fire Marshal is quickly coming up to speed and 77 Page 349 of 369 Fire Department implemenƟng process improvements to Plan Review turnaround Ɵme and inspecƟon compleƟon. OccupaƟonal and state mandated inspecƟons are tracked on the calendar year. The goal by December 31, 2024, will be 100%; as of June 30, 2024, 50% compleƟon is the goal. Staff is steadily compleƟng occupancy inspecƟons and state mandated inspecƟons. These are both tracked and reported to Council on a calendar year. As of June 30 staff is more than 50% complete and they will be 100% complete by December 31. Accomplishments & Challenges In AdministraƟon, staff conƟnued to provide planning, direcƟng, and evaluaƟon of all program acƟviƟes through department leadership, public informaƟon, personnel management, ﬁscal and contract management, strategic coordinaƟon, and grant efforts. The Fire Department had a busy year serving the City of San Luis Obispo. The Lizzie Fire on October 31 burned 125 acres around the East side of the City, threatening houses, but the quick work of the ﬁreﬁghters prevented any structure loss or damage, resulƟng in nearly $10 million of averted property losses. In early June, the Legacy Fire destroyed three houses under construcƟon in San Luis Ranch development. No occupied structures were damaged. Just two weeks later, an apartment ﬁre leŌ one family unable to return home, but the ﬁre was quickly contained saving numerous other structures. The department successfully held an Engineer and Captain promoƟonal exam. Three ﬁreﬁghters have been promoted to Engineer. Staff anƟcipates several reƟrements in 2024 and the promoƟonal list is ready to ﬁll the vacancies. The department completed 19,528 hours of training in FY 2023‐24. Four ﬁreﬁghters were enrolled in paramedic school as a result of a grant award that funds educaƟon costs and backﬁll for students. One student has already completed the course and is working as a Paramedic. Challenges for training are the high costs of travel, making sending staff out for training difficult as one person can uƟlize a large porƟon of the budget. With a large porƟon of new staff members, training needs are higher than previous years. The department has determined that offering trainings in house can include a large amount of staff for a much lower cost. When comparing the cost for out‐of‐town training to hosƟng locally, the savings were nearly $90,000. The department held several trainings in house in FY 2023‐24 and plans to conƟnue in FY 2024‐25. The Mobile Crisis Unit (MCU) conƟnued outreach to the unhoused community and was able to complete nearly 100 reuniﬁcaƟons. The case worker began the year as a contracted posiƟon from Transi Ɵons Mental Health AssociaƟon to a City contract posiƟon with the job Ɵtle Community Resources Services Specialist (CRSS). The new bargaining agreement removed the department’s ability to mandate a Fireﬁghter/EMT to the MCU creaƟng salary savings, as the department backﬁlled the second posiƟon on the MCU with interns temporarily to prevent breaks in service to the community. The department is working on partnering with the County to place Licensed Psych Techs on the MCU for increased and consistent service to the unhoused and at‐risk community. The Emergency Manager departed the City in February. Prior to the departure, the Emergency Manager oversaw the reducƟon of several areas of high hazard vegetaƟve fuels and secured a grant to remove overgrown vegetaƟon in the creek area of San Luis Drive. Filling the posiƟon has been challenging as the recruitment was unsuccessful. 78 Page 350 of 369 Major City Goals Major City Goal Update The table below shows the Major City Goal tasks that were scheduled to be completed in FY 2023‐24. Of the 21 tasks expected to be completed by the end of the ﬁscal year, three are behind schedule. Updated Ɵmelines for each task are included in the table below and the writeups that follow include addiƟonal informaƟon on tasks that were not completed as expected. 79 Page 351 of 369 Major City Goals Table 49. Major City Goals 80 Page 352 of 369 Major City Goals Table 49. Major City Goals (ConƟnued) 81 Page 353 of 369 Major City Goals Table 49. Major City Goals (ConƟnued) 82 Page 354 of 369 Major City Goals Economic Resilience, Cultural Vitality, & Financial Stability Strategic Approach 1.5 (d): Implement a Development impact fee (AB1600) study and update. This task has been delayed with a new expected compleƟon date of FY 2025‐26 Q2. This delay is aƩributed to turnover of staff who were managing this project. In addiƟon, staff has idenƟﬁed mulƟple policy related items that are requiring addiƟonal review, analysis and decisions by the Leadership Team and further discussion with Council. Finally, it was determined that traffic modeling data to support Transporta Ɵon Impact Fees was also needed which required the City to contract with an outside consulƟng ﬁrm and has taken longer than iniƟally expected. Diversity, Equity, & Inclusion All DEI Major City Goal tasks have been completed or are on track to complete within their original expected compleƟon dates. Housing & Homelessness Strategic Approach 3.1 (f): Implement Below Market Rate Housing best pracƟces including leveraging affordable housing fund revenues, down payment assistance programs, streamlined processing of loan documents, and updated policies and procedures. This task was delayed due to focus and aƩenƟon required for other Ɵme sensiƟve projects with signiﬁcant grant funding and resources at stake, such as Homekey and Welcome Home Village. Staff has been working on several pieces of this work program, such as seeking a new Below Market Rate administrator, with an RFP released in September, and will begin addressing the remaining aspects as resources allow. In September, staff also brought forward an ordinance to further reﬁne the development impact fee deferral loan program for affordable units to provide greater certainty to developers in the community. Once a new Below Market Rate unit administrator is on‐board, staff intends to work with this administrator to begin to implement other best pracƟces for BMR units including reﬁning policies and procedures and improving processing Ɵmes for affordable renters and buyers. Climate AcƟon, Open Space, & Sustainable Transporta Ɵon Strategic Approach 4.4 (f): IniƟate the development of Wildland‐Urban‐Interface (WUI) Defensible Space and Home Hardening Program as called for in CASE program FI‐5.15. This task was originally scheduled for compleƟon in Q4 of FY 2023‐24. The work required to develop a WUI Defensible Space and Home Hardening program has begun but has not yet been presented to Council for consideraƟon. The WUI Defensible Space Program is codiﬁed in State codes and is under review by the Fire Department, Office of Sustainability and the City AƩorney’s office to ensure that the correct ordinances have been adopted in order to implement the program. It should be noted that the baseline parameters of the Fire Codes for a Defensible Space program only apply to Very High Fire Hazard Severity Zones in the City. At present, there are 22 properƟes that fall in this designaƟon under the exisƟng maps. The current Statewide maps are under review and local maps will be updated by ordinance in accordance with State Code within the next 12‐18 months. It is recommended that this task be completed aŌer the Statewide maps are updated during Fiscal Year 2025‐26. 83 Page 355 of 369 Page 356 of 369 ATTACHMENT B – GENERAL FUND LONG-TERM FORECAST Introduction The long-term forecast is an important planning tool for the City. While the City adopts annual budgets that must be balanced, the outer years of the forecast are presented to show the City’s financial condition and availability of resources into the future absent intervention. The forecast is generally updated twice annually and was last updated with the FY 2024-25 Supplemental Budget. This intervening update is intended to reflect Council action on July 2nd, 2024 to adopt new user fees, which is estimated to result in $500k of additional fee revenue in the current fiscal year, and $1m of additional revenue in future years. While the revised forecast below reflects these estimates, it is important to note that fee revenue is driven as much by the volume of services provided as it is by the fees themselves. The revised forecast is included in the Year End Budget Report to provide context for the Council’s review of the survey tool that will be used to gather community input as part of the upcoming public engagement process for development of the 2025-27 Financial Plan. As discussed during the Third Quarter Report and FY 2024-25 Supplemental Budget presentations, the long-term forecast for the General Fund projects deficits in the coming years. While staff does not expect that budget reductions will be necessary, it will be important that expenditure growth is limited in future years in order to incrementally reduce the forecasted budget deficits. The Council’s approval of updated user fees helps to reduce the forecasted deficit, but there are other considerations that are not currently included in the forecast, including macroeconomic impacts to revenue, upcoming labor negotiations, and expectation of service expansion over the coming years to serve our growing community (discussed in more detail below). All forecasts of future results are reliant on assumptions. Significant assumptions in this forecast include:  Continued Economic Growth: The City benefits from diversified revenue streams. However, many of these revenue streams rely on consumer spending and tourism and are therefore cyclical in nature. This forecast does not contemplate a recession or slowdown in spending.  3% cost of living adjustments: All staffing costs except pension costs are assumed to grow at three% per year. This is consistent with the forecast presented to Council with the FY 2024-25 Supplemental Budget, but represents an increase from the 2% inflator that was previously used.  Additional Discretionary Payments (ADPs) to CalPERS: We continue to forecast $2m per year in ADPs. This amount was established with the Fiscal Health Response Plan in 2018 and has not changed to reflect increased staffing costs due to a significant increase in employee headcount over the last several years. This means that progress in paying down our unfunded pension liabilities is projected to slow, and consideration should be given to whether or not the $2m ADP amount should be increased commensurate with increasing staffing costs. Other possible changes to be reflected in the future when more information is available include:  Revenue Forecasts: Our consultants provide forecasts for our major revenue streams annually. These forecasts updates reflect the constantly changing macroeconomic environment.  Labor Negotiations: The existing agreements and resolutions with the City’s three non-safety bargaining units (San Luis Obispo City Employees’ Association, Unrepresented Management, and Unrepresented Confidential Employees) will expire on June 30, 2025. Should additional adjustments be necessary to address salaries and benefits for these groups, additional costs will need to be factored into the forecast. For context, a 1% percent increase to budgeted General Fund salary and benefit costs for these three groups in FY 2024-25 is shown in the table below: Page 357 of 369 ATTACHMENT B – GENERAL FUND LONG-TERM FORECAST Bargaining Unit 1% of General Fund Cost CEA – City Employees’ Association $141,278 CONF – Confidential $10,549 MME – Management Employee $145,728  Costs to Support Growing Population: The costs to serve a growing population are expected to put significant pressure on the City’s finances. These costs are expected to include new capital investments like neighborhood parks and increased ongoing operating expenditures to operate and maintain those investments. Staff has begun an effort to identify and estimate those costs and whether population growth will deliver sufficient additional revenues to fund them.  Emergency Storm Expenditure Reimbursement: The City is eligible to receive a maximum of 93.75% of eligible costs incurred as a result of the Winter 2023 storms from state and federal agencies, and it is assumed that reimbursements will be received within 12 months of formally submitting the necessary filings. The first projects were initially submitted in October 2023 and we will soon be able to test this assumption. As noted in Attachment A, the Federal Emergency Management Agency (FEMA) is currently in a holding pattern due to the Disaster Relief Fund which supports FEMA’s public assistance program being nearly expended. While this is not expected to put the City’s projects at risk, it may delay obligation of funding for projects. While this updated forecast does show positive progress on closing the projected deficit, staff still expects expenditures to grow more quickly than revenues and some corrective action will be necessary. This forecast reflects only one change from the version presented with the Supplemental Budget, which is the addition of $500k in the current year and $1m annually going forward for the estimated impact of the new user fee rates adopted by Council in July. Staff will present more comprehensive updates to the forecast with the Financial Plan development process. Page 358 of 369 ATTACHMENT B – GENERAL FUND LONG-TERM FORECAST Table 1. Long-Term Forecast Page 359 of 369 Page 360 of 369 ATTACHMENT C – 2025-27 FINANCIAL PLAN SCHEDULE There are a number of opportunities to provide input to the City Council to establish Major City Goals with the community’s interest in mind. These opportunities are highlighted on the following chart and also listed by date at the bottom of this document. Any specific dates identified in this document are estimated and subject to change. *December 10th meeting subject to Council approval of an additional meeting date 1. Pre-work and Community Outreach: The initial phase of the Public Engagement process involves assessing the community's priorities prior to Council discussions scheduled for the following months. Compiling a preliminary list of relevant topics enables staff to refine the focus of the Community Forum and ensure that the appropriate subject-matter experts and information are available as the process progresses. The pre-work includes: a. Community Outreach Efforts. The City uses its Public Engagement and Noticing Manual as the guide for encouraging the broadest possible participation in the community engagement process. Staff plans to place display ads in The Tribune, SLO Journal, and New Times and use social media to promote participation. Information about the goal-setting and budget process will be placed on the City’s web site and at City Hall. There will also be an informational flyer in the November utility bills (in English and Spanish) inviting the public to participate in the online Community Priorities Survey, Community Forum, goal-setting, and budget process. b. The Community Priorities Survey (see Attachment D). The survey is an effective tool for collecting feedback from a substantial number of community members. The participation rate has increased with each Financial Plan, reaching over 1,300 responses for the 2023-25 survey. This survey will be accessible from November 12, 2024, to December 13, 2024. Feedback from previous surveys and broader research indicate that a duration of three to four weeks is optimal for a web-based survey. Furthermore, concluding the survey in mid-December enables staff to obtain community feedback prior to the holiday season, a period when many individuals may be less accessible. Page 361 of 369 ATTACHMENT C – 2025-27 FINANCIAL PLAN SCHEDULE c. Community Letters. The City mails notices to a comprehensive list of community partners, governmental agencies, media organizations and interested individuals inviting them to participate in the community engagement process. The letter includes a QR code linking to the survey and provides details regarding the financial planning process and the Community Forum. d. Advisory Body Input. Consistent with past Council direction, the advisory bodies will again play an important role in the goal-setting process by providing the Council with their recommended goals for 2025-27. Staff will provide advisory body members with background materials outlining their important role in this process. An update on this process is also scheduled to be presented at the next quarterly meeting with the Mayor and advisory body chairs in October 2024. Lastly, staff liaisons are already beginning to work with Advisory Body Chairs in scheduling time for this purpose at upcoming advisory body meetings. 2. “Setting the Stage” Workshop and the Strategic Scan. This meeting on Tuesday, December 10, 20241, will be devoted to a comprehensive review of the status of current City plans, goals, policies, and programs. This is an especially appropriate start as the Council goal-setting process should take into consideration the City’s adopted long-term plans, current two-year goals, and an updated economic outlook. Accordingly, staff plans to present reports on the following: a. FY 2024-25 1st Quarter Review. Staff will present a brief budget update of the City's current financial position as compared with the adopted FY 2024-25 Supplemental Budget. b. Strategic Scan/Setting the Stage. Staff will provide an overview of important statistical information that provides trends and patterns pertaining to social, economic, and environmental factors. This will help set the stage for an overview of the City's services and how the budget is allocated. This will provide important context for decision making through the 2025-27 financial planning process. c. Status of Major City Goals. Staff will provide an update on the status of existing Major City Goals. d. Status of General Plan Programs. As in past years, staff will present an overview of the status of each General Plan program in each of the ten elements (over 400 programs in total). Organized by element, staff will provide a short summary of each program, whether it has been completed, and if not, a high-level assessment of how challenging it will be to complete. 3. “Budget Foundation” Workshop. This meeting on Tuesday, January 14, 2025, will be dedicated to seeking policy guidance from Council that will serve as the foundation for the City’s budget and goal- setting process. Staff plans to cover the following topics at this workshop: a. Review survey responses and advisory body input. The report will include attachments containing the community survey responses and the advisory body input. These materials are intended to provide information to assist in the planning of the Community Forum; however, the responses will not be discussed in detail during the meeting. b. Finalize plans for the Community Forum and Council Goal-Setting Workshop. Staff will present a proposed approach for the forum and goal-setting workshop at this meeting. 1 Tentative date pending future Council action on Council meeting dates. Page 362 of 369 ATTACHMENT C – 2025-27 FINANCIAL PLAN SCHEDULE c. Review of Financial Plan policies contained in the 2023-25 Financial Plan and update or recommend changes as appropriate. This may include proposed changes to the existing fund balance targets for enterprise funds and the capital replacement funds. d. Review the organization of the Financial Plan and obtain Council guidance regarding the style of presentation expected or preferred by Council. e. Review the long-term economic forecast. f. Discuss additional discretionary payments (ADPs) to CalPERS intended to expedite paydown unfunded pension liabilities. This will include an overview of the City’s adopted plan to paying down pension debt and consideration of increasing the annual ADP to reflect increases to staffing costs over the last several years. g. Review Long-Range Capital Improvement Plan (CIP). The Long-Range CIP provides a look at future infrastructure needs as envisioned by the General Plan and other Council-adopted plans. The Long-Range CIP is presented to Council as part of the Budget Foundation discussion and Goal Setting Process to provide context for future capital needs. 4. Community Forum. The Community Forum is a public event held in person, designed for community members to engage in discussions regarding possible goals and feedback from the advisory bodies, community organizations, and individuals who participated in the online survey. The structure of this event will closely resemble that of the 2023-25 Community Forum, featuring a walk-through environment and interactive booths where attendees can interact with City staff and fellow community members. Participants will have the opportunity to scan a QR code using their mobile devices, or with assistance from staff, to rank various methods by which the City could achieve the potential Major City Goals. Attendees will be encouraged to submit additional suggestions or feedback that Council should consider that was not part of the ranking process. Community members can also email ideas to communityforum@slocity.org if they are unable to attend the forum in person. The Community Forum is a joint meeting of the City Council and Revenue Enhancement Oversight Commission (REOC). 5. Council Goal-Setting Workshop. Following collection of feedback during the Community Forum, the Council goal-setting workshop will be held on Saturday, February 8, 2025, in the Council Chambers. This will be an all-day workshop to answer the question, “What are the most important, highest priority things for the City to accomplish over the next two years?” Council will be asked to provide up to five goals before the workshop which staff will organize and distribute prior to the workshop. Use of an independent facilitator will allow all Council members to participate fully in the process; and allows staff to devote their efforts to listening to the discussion. Moreover, the facilitator can assist the Council to ensure that the number and scope of the goals established are appropriate. 6. Mid-Year Report and Guiding Principles for Allocation of Resources. The Mid-Year Review and review of the updated Five-Year Forecast, scheduled for Tuesday, February 18, 2025, will allow the Council an early opportunity to provide guiding principles and direction for paying down unfunded pension liabilities and efficient allocation of resources with the 2025-27 Financial Plan, focusing on community priorities. 7. Major City Goal Work Programs and Strategic Budget Direction. On Tuesday, April 15, 2025, staff will present the Major City Goal Work Programs developed out of the Goal-Setting Workshop and seek Page 363 of 369 ATTACHMENT C – 2025-27 FINANCIAL PLAN SCHEDULE strategic budget direction from Council on both the operating budget and Capital Improvement Plan. This process affords the City Council an opportunity to review the draft work programs and associated financial resources proposed to support existing services and accomplish Major City Goals established by the City Council in February. At this stage of the process, the City Council provides direction on any changes needed to refine these work programs and resource allocations to better achieve the desired outcomes. Additionally, the City Council is asked to provide the City Manager with the key policy direction needed to allocate resources in line with Council’s expectations or to further amend budget or fiscal policies that align with Council direction. This process is extremely helpful so that the Preliminary Financial Plan that is presented to the City Council and community in June accurately reflects the Council’s expectations. At this meeting, staff will present detailed work programs for the Major City Goals in order to: a. Clearly define and scope the work programs. b. Ensure that there is a clear understanding of the means used in pursuing the goal. c. Convert the general goal into specific action steps, so progress can be measured. Each work program will provide the following information: Objective. What is to be accomplished? (This will be based on the objective adopted by the Council at the goal-setting workshop.) Discussion. What are the factors driving the need for this goal? What actions have already been taken in trying to resolve this problem area? What are the key assumptions? What key challenges, constraints or obstacles can be expected in achieving this goal? What concerns, or issues will remain unresolved even if the goal is achieved? Who are the key stakeholders? Action Plan. What specific tasks will need to be accomplished in order to achieve the goal, and when will they be completed? These “action steps” are the fundamental building blocks in defining and scoping the work program, and in monitoring the progress in accomplishing the goal over the next two years. Responsible Department. Who is accountable for getting it done? Financial and Staff Resources Required to Achieve the Goal. What will it take to achieve the goal? Will resources be needed (staffing, contract services, CIP project) to do this? Outcome: Final Work Product. What are the “deliverables?” 8. Budget Hearing and Budget Adoption. The Budget Hearing is scheduled for Tuesday, June 3, 2025. State law requires that the City may not spend public funds without the authority to do so. The budget appropriates public funds, thereby providing the legal authorization from the governing body to expend these funds on operations and capital projects. Section 803 of the City Charter sets forth a requirement for a public hearing to consider adoption of the annual budget. The budget hearing is scheduled for the first meeting in June in order to hold time for the possibility of a second hearing, so that the budget can be adopted before the next fiscal year begins on July 1, 2025, pursuant to Section 804 of the City Charter. Budget Calendar Summary Page 364 of 369 ATTACHMENT C – 2025-27 FINANCIAL PLAN SCHEDULE Item # Tentative Dates Who Action 1 September 26, 2024 Finance Release of goal template and instructions to advisory body liaisons. 2 October 1, 2024 Council Review FY 2023-24 Year End Report and approve the 2025-27 Financial Plan schedule and survey tool 3 October 31, 2024 Council Quarterly Mayor/Advisory Body Chairs Meeting 4 November 12, 2024 Finance/Admin Release Community Priorities Survey 5 December 10, 2024 Council Hold Setting the Stage & the Strategic Scan workshop (Operating and CIP) 6 December 11, 2024 Finance Receive written comments from community groups and interested individuals, and goals from advisory bodies 7 December 13, 2024 Finance/Admin Community Priorities Survey closes 8 January 7 or 14, 2025 Council Review Budget Foundation report and provide guidance to staff on development of operating budget and CIP 9 January/February 2025 (exact date TBD) Council Receive FY 2023-24 Audit and Annual Comprehensive Financial Report (ACFR) 10 January 23, 2025 Council/REOC/ Staff Community Forum 11 February 8, 2025 Council Council Goal Setting Workshop (on Saturday) 12 February 18, 2025 Council Review FY 2024-25 Mid-Year Budget Report including allocation of FY 2023-24 unassigned fund balance 13 March, 2025 REOC Review Capital Improvement Plan for projects utilizing Local Revenue Measure funding 14 April 15, 2025 Council Review strategic budget direction report (including CIP) and provide direction to staff 15 April 15, 2025 Council Review Impact Fee Study and Capital projects associated with those impact fees and provide direction to staff. 16 May 14, 2025 Planning Commission Review Capital Improvement Plan for conformity with General Plan 17 May 20, 2025 Council Review FY 2024-25 Q3 Budget Report 18 May 23, 2025 City Manager Issue proposed budget 19 June 3, 2025 Council Budget Hearing and adoption of budget and CIP 20 June 17, 2025 Council Continued Budget Hearing and adoption of budget and CIP (if necessary) Page 365 of 369 Page 366 of 369 ATTACHMENT D - DRAFT COMMUNITY PRIORITIES SURVEY About the Community Survey: The City will conduct a survey as the first step in the process of gathering community feedback to support development of the 2025-27 Financial Plan. Results from the survey will help refine the focus areas for the Community Forum and the topics for Council to consider and discuss during the goal-setting process. The City uses an online civic engagement platform called Open City Hall to collect survey responses. The survey will be open to the public for four weeks, from November 12, 2024, to December 13, 2024. After the survey closes, the results will be sent to Council before the holidays as part of a package of materials to review for the “Budget Foundation” meeting in January (see Attachment C for more information). The City uses its Public Engagement and Noticing Manual as the guide for encouraging the broadest possible participation in the survey. Below is the proposed survey for the 2025-27 Financial Plan: What should the City Council consider as the City’s top priorities during the next two years? Every two years, the City hosts a community-based goal setting process to establish the top priorities to make San Luis Obispo an even better place to live, work, and play. Through its budget process, the City Council then matches the resources necessary to achieve these priorities while also balancing the need to continue to provide the services that the community requires. The adopted budget then enables the City to provide high quality services, programs, and projects with the community’s priorities in mind. The City Council adopted the following Major City Goals for the 2023-25 Financial Plan: Page 367 of 369 ATTACHMENT D - DRAFT COMMUNITY PRIORITIES SURVEY  Economic Resiliency, Cultural Vitality & Fiscal Sustainability  Diversity, Equity & Inclusion  Housing and Homelessness  Climate Action, Open Space & Sustainable Transportation The City of San Luis Obispo has a strong foundation of sound financial management and fiscal policies as well as diverse revenue sources (including the Local Revenue Measure). These policies and revenue sources have provided the City with several years of expanding financial resources. However, cities across the nation, including San Luis Obispo, are expected to face more financial constraints in the years ahead. This current position is a shift from prior budget cycles which have supported significant augmentations to City services. While the City does not expect to be able to significantly expand ongoing programming in the next few years, your input is essential in helping the City Council make decisions about our City’s future budget and how to best use existing resources to prioritize the services that our community wants to see. The City Council is seeking your input on what the City's Major City Goals should be for its 2025-27 Financial Plan. To learn more about the Financial Plan process, click here. (link to be added once published) Question Section 1: Which statement best describes you? Click all that apply I live in the City of San Luis Obispo. I work in the City of San Luis Obispo. I play (recreate, shop, eat, etc.) in the City of San Luis Obispo. Other Question Section 2: What should the City Council consider as the City’s top priorities during the next two years (select your highest five priorities)? The following are the priorities, listed in alphabetical order, that have been consistently identified by the community in the past. You may also add your own. Climate Action (e.g., implement the City’s Climate Action Plan for Community Recovery to reduce greenhouse gas emissions, prepare for the impacts of climate change, and develop the local green economy) Childcare (e.g., support policies, partnerships, and incentives to help expand childcare options) Cultural Vitality (e.g. preserve arts and culture, expand public art programs, and support community partnerships) Diversity, Equity, and Inclusion (e.g., focus on activities and initiatives that support marginalized racial, ethnic, and cultural groups) Page 368 of 369 ATTACHMENT D - DRAFT COMMUNITY PRIORITIES SURVEY Downtown Vitality (e.g., continue to improve safety and cleanliness, invest in infrastructure and maintenance in the Downtown) Fiscal Sustainability and Responsibility (e.g., continue to implement efficiencies, strategic economic development, and plans to address unfunded liabilities) Homelessness (e.g., partner with the County and community-based organizations to implement programs that prevent and support people experiencing homelessness, continue City Mobile Crisis Unit and Community Action Team efforts) Housing Supply and Affordability (e.g., facilitate increased production of all housing types designed to be economically accessible to the area workforce and to low and very low-income residents) Safe Housing and Neighborhood Wellness (e.g., promote safe housing and neighborhoods, expand renter protection programs, and support initiatives that foster community connection and inclusion among residents) Infrastructure Maintenance (e.g., maintenance of roads, sidewalks, parks, and other City infrastructure) Open Space (e.g., preserve and enhance open space and natural areas) Public Safety (e.g., expand Fire/Police services, response for emergencies and disaster preparedness) Sustainable and Multi-Modal Transportation (e.g., enhance accessible transit, bicycle, and pedestrian opportunities) Other Other Other Other Other If you selected the option "Other" as a response to the question above, please elaborate here. (Please use one line per "Other" selection). Question Section 3: Given the current fiscal constraints, new projects or services may require prioritization and potential trade-offs unless they can generate offsetting revenue. How might the City adjust current projects or services to accomplish any new priorities? Question Section 4: Thank you for participating in the Community Priorities Survey. Your responses will be used to help shape the future of the City of San Luis Obispo. If you would like to share your thoughts on how the City could implement the Major City Goals please come to the Community Forum at the Ludwick Community Center (864 Santa Rosa St, San Luis Obispo, CA 93401) on January 23, 2025 at 6:00pm. If you are unable to attend the Community Forum, please send your feedback to: CommunityForum@SLOCity.org. Page 369 of 369 FY 2023-24 Year-End Budget Report (Unaudited) Recommendations 2 1. Receive and file the FY 2023-24 Year End Budget Report; and 2. Receive and discuss the Revised Long-Term Forecast, 2025-27 Financial Plan calendar and community outreach survey in preparation for the 2025-27 financial planning process. Year one of the 2023-25 Financial Plan Financial Policy: Interim Reporting Policy Context The City will prepare and issue timely interim reports on the City’s fiscal status to the Council and staff. This includes quarterly reports to the Council Overview of the City’s unaudited financial results through the fourth quarter of FY 2023-24 (July 1, 2023 – June 30, 2024) including: •Revenue and operating expenditures •Comparison to budget and analysis of variances •Major City Goals progress update 3 FY 2032-24 Year End Financial Policy: Operating Carryover Operating program appropriations not spent during the first fiscal year may be carried over for specific purposes into the second fiscal year with the approval of the City Manager. Revenue By Fund Budget Actuals General Fund $115.6M $119.9M Water $27.9M $28.5M Sewer $21.6M $23.2M Parking $9.7M $12.3M Transit $12.2M $9.1M Operating Expenditures By Fund Budget Actuals General Fund $93.9M $89.3M Water $20.9M $18.4M Sewer $9.6M $9.6M Parking $3.9M $3.9M Transit $5.3M $4.5M General Fund Variance Trends $5.5M $10.9M $11.6M $10.0M $8.9M ($5M) $0M $5M $10M $15M FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 Revenue Expenditures Carryover $1.5M N/A $2.6M N/A $1.2M General Fund Revenue Budget Actuals Variance Taxes $101.0M $101.6M +$0.6M User Fees $10.8M $11.4M +$0.6M Other $3.8M $6.9M +$3.1M Total $115.6M $119.9M +$4.3M Source: CDTFA Tax Insights June 2024 Storm Update •The City has expended approximately $12.9m on storm response to date •The total cost to repair storm damage and mitigate against future damage is estimated at $48.4m •All past and planned expenditures have been submitted to FEMA for reimbursement •Disaster relief funds have been fully obligated nationwide; Feds working to secure additional funding Major City Goals Economic resilience, cultural vitality, & financial stability •5 tasks completed •1 task delayed •31 tasks ongoing Diversity, equity, & inclusion •2 tasks completed •All tasks on track •19 tasks ongoing Housing & homelessness •9 tasks completed •1 task delayed •1 task ongoing Climate action, open space, & sustainable transportation •2 tasks completed •1 task delayed •40 tasks ongoing Financial Plan Kickoff General Fund Forecast $110M $120M $130M $140M 2024-25 2025-26 2026-27 2027-28 2028-29 Revenue Expenditures Deficit Revenue $127.3M $122.3M $125.5M $128.6M $131.7M Expenditures $121.7M $122.4M $125.3M $130.1M $134.3M Variance +$5.6M ($0.1M)+$0.2M ($1.5M)($2.6M) Financial Planning Calendar Community Survey and Forum •Community Survey online and open to the public from November 12th – December 13th •Informs Council Goal Setting •Community Forum to be held January 23rd, 2025 •Opportunity for the public to engage with staff and Council •Focus points to be informed by Community Survey & Council discussion during Budget Foundation Recommendations 15 1. Receive and file the FY 2023-24 Year End Budget Report; and 2. Receive and discuss the Revised Long-Term Forecast, 2025-27 Financial Plan calendar and community outreach survey in preparation for the 2025-27 financial planning process. Community Survey Questions 1.What should the City Council consider as the City’s top priorities during the next two years? 2.How might the City adjust current projects or services to accomplish any new priorities? Appendix Community Survey Options •Climate Action •Childcare •Cultural Vitality •Diversity, Equity, and Inclusion •Downtown Vitality •Fiscal Sustainability & Responsibility •Homelessness •Housing Supply & Affordability •Safe Housing & Neighborhood Wellness •Infrastructure Maintenance •Open Space •Public Safety •Sustainable & Multi-Modal Transportation Potential Mid-Year Recommendations •$2M CalPERS ADP •$2.76M contribution to Infrastructure Investment Fund to backfill commitments to SLO Rep •Funding of Operating reserve