HomeMy WebLinkAboutItem 7a. FY 2022-23 Year End Budget Review (Unaudited) and approve authority to collect AB939 and SB1383 fees Item 7a
Department: Finance
Cost Center: 2002
For Agenda of: 10/3/2023
Placement: Business
Estimated Time: 30 Minutes
FROM: Derek Johnson, City Manager
Emily Jackson, Finance Director
Prepared By: Natalie Harnett, Principal Budget Analyst
SUBJECT: FY 2022-23 YEAR END BUDGET REVIEW (UNAUDITED)
RECOMMENDATION
1. Receive and file the Fiscal Year 2022-23 Year End Budget report; and
2. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San
Luis Obispo, California, to delegate appropriation authority to the City Manager for
California Integrated Waste Management Act of 1989 (AB939) and Senate Bill 1383
(SB1383) fees” compliant with the Fund Balance & Reserve Policy and corresponding
legislation.
POLICY CONTEXT
Development and presentation of the quarterly reports conforms with the following
adopted Budget Policies:
Financial Plan Purpose and Organization- Goal Status Reports which
requires that the status of major program objectives be formally reported to the
Council on an ongoing, periodic basis.
Financial Reporting and Budget Administration- Interim Reporting which
requires the City to prepare and issue timely interim rep orts on the City’s fiscal
status to the Council and staff.
DISCUSSION
2022-23 Year End Report
The 2022-23 Year-End Budget Report (Attachment A) shows that all funds ended the
year in good financial standing. Major tax revenue sources exceeded projectio ns and
actual expenditures came in below budget for the General Fund. The report includes a
year-end budget and performance analysis for each of the City’s ten departments. All
departments ended the year within their budget s and had many accomplishments
associated with Major City Goals and department goals. O perating budget savings were
realized due to staffing vacancies and the activation of the City’s Fiscal Health
Contingency Plan to reduce spending.
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Item 7a
Although there were savings in the City’s normal operational budget, there were over $5.5
million in emergency storm-related expenditures that were paid for out of the City’s
reserves1. Due to the operating budget savings and higher than anticipated revenue, the
City will be able to replenish the reserve and bring it back to the policy target of 20% for
FY 2023-24, a year earlier than forecasted in the 2023-25 Financial Plan.
Overall, the General Fund ended the year with an estimated $1.6 million in unassigned
fund balance. The Local Revenue Measure ended the year with an estimated $3.6 million
in unassigned fund balance. These figures are unaudited and subject to change until the
audited financials are published in December 2023. Staff will make a recommendation to
Council at mid-year (February 2024) on how to appropriate the unassigned fund
balances. Given the extraordinary storm damage repairs necessary and overall project
cost escalations, staff will likely return to Council with a recommendation to use any
available balance on infrastructure projects. These recommendations will likely include
funding for storm damage repair projects as well as completing additional roadway paving
work. The Revenue Enhancement Oversight Commission will be given an opportunity to
review the recommendation before it is presented to Council.
The City also made significant progress on its Capital Improvement Plan and Major City
Goals (MCGs) during FY 2022-23. Several major projects such as the Orcutt Tank Farm
Roundabout and the 2022 Roadway Sealing project were completed. However, some
projects were slowed or postponed while staff responded to emergency creek and
infrastructure repairs due to the unprecedented winter storms. On the Major City Goal
side, 17 tasks were completed in the fourth quarter alone and many of the ongoing efforts
continue into the 2023-25 Financial Plan. See Sections 2 and 3 of the report for more
information on projects and MCGs.
City Manager Authorization to Appropriate AB 939/SB 1383 Fees
The only action recommendation in this item is for Council to adopt a resolution
(Attachment B) authorizing the City Manager to appropriate unspent AB 939 and SB 1383
fee revenue held in the General Fund assigned fund balance2.
The City’s Solid Waste & Recycling program is funded by AB 939/SB 1383 revenue,
collected through the solid waste bills. The Solid Waste & Recycling program coordinates
the planning, development, and implementation of programs and services related to solid
waste, recycling, organics recycling, zero waste, and other waste diversion programs.
The revenue collected must only be used to pay for activities that help divert waste from
the landfill.
1 R-11391 SECTION 5. The City Manager shall have authority to use General Fund Reserve balance to
pay for operating and capital expenditures related to the January 2023 storm events and any revenue over
expenditures at the end of FY 2022-23 will be used to build back the reserve.
2 Assigned Fund Balance. Intended use established by highest level of decision making by a body
designated for that purpose or by an official designated for that purpose (delegated by the City Council to
the City Manager).
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Item 7a
Because of staff vacancies and program delays, the revenue is not always entirely spent
in the year that it was collected; therefore, a designated account was created to carry
over and hold any unspent balance between fiscal years. The creation of this account
facilitates transparent accounting and reporting of these funds. The current balance in the
fund is about $280,000.
Per the City’s Fund Balance and Reserve Policy, the City Manager has been delegated
the authority to move the funds from the designation account into undesignated fund
balance, but is not able to appropriate the funds to expend them without prior Council
authority. Delegating appropriation authority to the City Manager of the AB939/SB1383
Fees after being moved from the designation account will allow staff to be nimble in
responding to expenditure needs outside of the City’s usual budgeting cycles. These
activities include, but are not limited to, waste characterization studies, rate analyses, or
outreach as mandated by State initiatives.
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 2022-23 Year End Budget Report (Attachment A) will be posted on the City’s website
for public review.
CONCURRENCE
Operating departments review and monitor financial results on a regular basis. The
writeups and variance analyses provided in the report were prepared by the departments
and reviewed by Department Heads, the Finance Director, and the City Manager.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to the recommended
action in this report, because the action does not constitute a “Project” under CEQA
Guidelines Sec. 15378.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2022-23
Funding Identified: Yes
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Item 7a
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund N/A N/A N/A N/A
State
Federal
Fees
Other:
Total N/A N/A N/A N/A
The quarterly budget review reports on current revenue and expenditure trends to keep
the Council and the community informed about the City’s fiscal picture and program
efforts as adopted with the annual budget appropriation.
There is no fiscal impact in the recommendation for Council to authorize the City Manager
to appropriate AB939 funds because these funds are already designated for this purpose
within the General Fund assigned fund balance.
ALTERNATIVES
Council could decide not to adopt a resolution to delegate appropriation authority
to the City Manager for AB939 fees. This is not recommended because it would require
staff to return to Council before using any of this funding, which would slow the City’s
efforts in waste characterization studies, rate analyses, or outreach as mandated by State
initiatives.
ATTACHMENTS
A - FY 2022-23 Year End Budget Report (Unaudited)
B - Draft Resolution adopting authority for the City Manager to appropriate AB 939 and
SB 1383 fees
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Attachment A
Fourth Quarter Financial Report (Year-End)
Fiscal Year 2022-23
Introduction
The fourth quarter and year-end report provides an overview of the City’s financial position through the
fourth quarter of FY 2022-23 (July 1, 2022 – June 30, 2023) for the General Fund and the City’s four
enterprise funds. Note: The values within this report are unaudited and are subject to change until the
City’s audit is complete and the 2022-23 Annual Comprehensive Financial Report is published in December
2023 and presen ted to the City Council in January/February 2024.
Table of Contents
General Fund Overview...................................2
General Fund Expenditures Overview ..........2
General Fund Revenues...............................5
General Fund Ending Position ......................9
Administration and Information Technology .. 11
City Attorney ................................................ 15
Finance Department ..................................... 18
Non-Departmental, Support Services ............. 21
Human Resources Department...................... 22
Insurance Fund (Managed by Human
Resources) ................................................ 25
Fire Department ........................................... 26
Police Department........................................ 31
Community Services Group (CSG) .................. 36
Community Development Department .......... 38
Parks & Recreation Department .................... 50
Public Works Department ............................. 56
Parking Fund ............................................ 61
Transit Fund ............................................. 65
Utilities Department ..................................... 68
Water Fund .............................................. 74
Sewer Fund .............................................. 78
Solid Waste – AB 939 General Fund ........... 81
Tourism Business Improvement District ......... 84
Downtown SLO Business Improvement District
.................................................................... 85
2022-23 Capital Improvement Plan in Review. 86
Major City Goal Update ................................. 95
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General Fund Overview
General Fund Overview
General Fund Expenditures Overview
Overall, the General Fund finished the year in a positive position and experienced about 6% in net
expenditure budget savings (excluding storm expenditures). The savings can be associated mainly with
staffing vacancies and slightly reduced expenditures in the second half of the year due to activation of the
Fiscal Health Contingency Plan. These savings will help the City replenish its reserves that funded over $5
million of storm expenditures in FY 2022-23.
Detailed department information and variance explanations can be found starting on Page 11 of the
report, but overall, every department ended the year within the allocated budget.
Table 1: Expenditure Overview by Department
* Shown separately in order to reflect a more accurate year-over-year comparison for departments. Line 17 includes the FY
2021-22 one-time $10.2 million additional down payment to CalPERS from the General Fund (R -11307). This cost is distributed
annually between the departments based on calculated weights.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
1 Internal Services
2 Administration/IT 8,045,325$ 11,695,913$ 11,325,921$ 369,991$ 3%10,083,778$
3 City Attorney 1,078,846$ 1,504,532$ 1,474,278$ 30,253$ 2%1,247,202$
4 Finance 1,803,610$ 2,246,817$ 2,109,529$ 137,288$ 6%2,196,074$
5 Non-dept, Support Services 653,721$ 1,105,171$ 399,194$ 705,977$ 64%1,432,583$
6 Human Resources 1,511,305$ 2,012,680$ 1,896,008$ 116,672$ 6%1,953,467$
7 Public Safey
8 Fire 12,053,617$ 12,216,993$ 12,042,091$ 174,902$ 1%12,503,730$
9 Police 15,072,783$ 16,889,261$ 16,260,719$ 628,541$ 4%17,844,283$
10 Community Services Group (CSG)
11 CSG Administration 501,896$ 710,820$ 624,775$ 86,045$ 12%642,674$
12 Community Development 6,234,270$ 7,877,995$ 6,936,859$ 941,136$ 12%7,460,625$
13 Parks & Recreation 4,110,700$ 5,021,865$ 4,497,028$ 524,837$ 10%5,227,462$
14 Public Works 12,722,187$ 16,669,102$ 15,347,872$ 1,321,230$ 8%16,299,915$
15 Solid Waste (Utilities)162,676$ 425,624$ 301,741$ 123,883$ 29%303,210$
16 Total 63,950,936$ 78,376,772$ 73,216,015$ 5,160,757$ 7%77,195,002$
17 CalPERs Unfunded Liability*20,837,422$ 13,916,694$ 13,916,694$ 0$ 0%11,132,870$
18 Total 84,788,358$ 92,293,466$ 87,132,709$ 5,160,757$ 6%88,327,872$ IndexDepartment
FY 2022-23
How to read the budget tables in this report
Budget: Adopted budget plus any encumbrances from prior year(s) or approved budget adjustments made throughout
the year.
Actual: Actual expenditures plus any encumbrances or obligated funds that were carried forward to FY 2023-24. Data is
as of 8/30/2023.
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General Fund Overview
Table 2: Expenditure Overview by Type (Category)
Detaile d expenditure information for each department starts on page 11 of the report, but unsurprisingly,
most of the savings were in Staffing. Actual staffing expenditures vary greatly based on the amount of
turnover throughout the year, position reclassifications, and employee health benefit options. Over the
last six years, annual salary savings ranged from 3% to 7%; therefore, the City assum es a conservative 3%
savings in the General Fund forecast. After considering the assumed salary savings programmed in the
fiscal forecast, there was an additional $2.2 M (2.5%) in savings.
Table 3: FY 2022-23 Salary Savings
2022-23 Staffing Budget 2022-23 Actual Funds Available (or "Savings")
a $69,393,719 $65,560,028 $ 3,803,691
b Assumed salary savings (3% of initial budget) $ 1,6 32,000
c Additional salary savings (a -b) = 2.5% $ 2,171,803
The City’s Contract Services accounts broadly include budget for annual service contracts , one -time
consultant services, and Major City Goal tasks. Variances are more granularly explained the departmental
sections, but the majority of the savings in FY 2022-23 can be associated with Fiscal Health Contingency
Plan savings or with strategic goal related efforts that were either not completed or came in below
budget1. The Utilities category was on track with budget. There were some overages due to the natural
gas rate spikes seen over the winter, but they were offset by some savings in electricity costs from the
City’s switch to the 3 Central Coast Community Energy (CCCE) program .
1 Often times budget allocations for Major City Goal initiatives are based off estimates .
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
1 Staffing 67,638,979$ 69,363,719$ 65,560,028$ 3,803,691$ 5%69,137,153$
2 Contract Services 9,778,408$ 14,536,567$ 13,554,492$ 982,075$ 7%10,725,560$
3 Other Operating Expenditures 4,609,947$ 5,246,239$ 4,944,824$ 301,415$ 6%5,163,024$
4 Utilities 2,761,025$ 3,146,941$ 3,073,365$ 73,576$ 2%3,302,135$
5 Total 84,788,358$ 92,293,466$ 87,132,709$ 5,160,757$ 6%88,327,872$ IndexExpenditure Type
FY 2022-23
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General Fund Overview
Figure 1: Year-over-year Expenditures by Type
*Operating expenditures only. Excludes insurance, debt, capital, and CalPERS additional down payments (ADP) made in FY 2018-
19 and FY 2021-22.
Considering the higher than usual inflation over the last five years, the General Fund budget has only
increased modestly, with most of the growth in Staffing (Salaries and Benefits). Staffing increased because
of three major factors:
1. The addition of over 60 FTEs to support growing community needs .
2. Equity adjustments needed to keep the City a competitive employer.
3. Increases in health insurance and other employee benefit costs.
General Fund – Storm Expenditures
The City’s winter storms resulted in two separate emergency declarations at the Federal, State and local
level . The City is eligible for reimbursement of most costs related to the storms. As of the end of the fiscal
year, the City had spent about $3.6 million for operating costs in response to the storms, including
supplies, emergency protective measures, debris remo val, and minor repairs. Approximately $275,000
was spent on capital expenditures for immediate repair of damages to City infrastructure, and an
additional $7 million remains on purchase orders for future planned expenditures. Though the numbers
continue to shift, the overall cost of damages to the City is now expected to exceed $28 million; however,
staff are still working to prioritize the repairs and identify which projects will be eligible for the highest
reimbursement. For more information on storm related capital project, see page 86.
All FY 2022-23 costs were temporarily paid for using the City’s designated reserve account2 . The reserve
will be replenished as FEMA or California Disaster Assistance Act (CDAA) reimbursement revenue is
received or by using any available revenues over expenditures at year end (see
2 Per the City’s Fund Balance and Reserve Policy , it maintains a reserve of 20% of the General Fund operating
budget. On February 7, 2023 Council authorized the City Manager to use General Fund Reserve balance to pay for
storm costs (R-11391).
$-
$10
$20
$30
$40
$50
$60
$70
2017-18 2018-19 2019-20 2020-21 2021-22 2022-23MillionsYear-over-year General Fund Expenditures, by Category
Salaries and Benefits Contract Services Other Operating Expenses Utilities
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General Fund Overview
General Fund Ending Position ).
Table 4: FY 2022-23 Storm Expenditures and Use of Reserves Line 2022-23
Actual
2023-24
Projected
2024-25
Projected Total
1 Storm Expenditures Utilizing Reserves $(3,899,843) ($5,100,157) ($9,000,000)
2 Reimbursement Revenue (93.5%) $3,646,354 $4,768,646 $8,415,000
3 Net Total/Impact on General Fund $(3,899,843) $(1,453,803) $4,768,646 $(585,000)
General Fund Revenues
The table below shows an overview of the General Fund revenue for FY 2022-23. More detail about fee
revenue can be found within the respective department write -ups .
Table 5: General Fund Revenue Overview
*Special Revenue Funds or sub-funds of the General Fund
Sales and Use Tax Revenue: Despite ongoing threats of an economic downturn , sales tax revenue
remained incredibly strong through FY 2022-23. There is evidence of a cooling, but this was programmed
into the budget. Both the Bradley Burns sales tax and the l ocal transaction tax exceeded projections by
about 2%. Measure G-20 saw modest declines in Q3 building materials, services stations , and new-used
vehicles; however, some of this could have been due to the storms that hit the areas during that time.
Although the categorical data has not been released by the CDFTA, the City received its final payment for
June 2023 and Q4 results show an overall decrease of 0.2% compared to the previous year. It is important
to note that FY 2021-22 Q4 revenue was an all -time high, so this decline is not too alarming.
Note : The Bradley Burns budget assumption includes a negative $600,000 adjustment to account for a
misallocation of revenue by the California Department of Tax and Fee Administration (CDTFA) that should
FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Projection
1 Tax and Franchise Revenue 96,490,763$ 98,267,347$ 100,611,346$ 2,344,000$ 2%100,527,765$
2 Local Revenue Measure G*29,172,258$ 30,141,532$ 30,405,434$ 263,902$ 1%30,262,098$
3 Sales Tax (Bradley Burns)22,201,225$ 21,524,304$ 21,893,989$ 369,685$ 2%22,578,995$
4 Property Tax 20,970,984$ 21,473,397$ 21,810,144$ 336,747$ 2%21,999,786$
5 Transient Occupancy Tax 10,650,762$ 10,704,000$ 10,882,091$ 178,091$ 2%10,704,000$
6 Utility User Tax 5,085,292$ 5,544,000$ 6,265,673$ 721,673$ 13%5,710,320$
7 Business Tax 2,861,863$ 3,157,566$ 3,248,552$ 90,986$ 3%3,252,293$
8 Cannabis Tax 998,875$ 1,100,000$ 1,127,295$ 27,295$ 2%1,100,000$
9 Franchise Fees 1,978,295$ 1,800,000$ 2,131,191$ 331,191$ 18%1,854,000$
10 Gas Tax*1,130,063$ 1,305,634$ 1,239,701$ (65,933)$ -5%1,389,292$
11 Gas Tax (SB1)*911,849$ 1,019,914$ 1,062,584$ 42,670$ 4%1,177,994$
12 Safety Prop 172 529,299$ 497,000$ 544,692$ 47,692$ 10%498,988$
13 Fees for Service and Other Revenue 11,917,323$ 12,338,611$ 14,810,795$ 2,472,184$ 20%13,064,546$
14 Development Review 5,970,996$ 6,653,370$ 6,424,716$ (228,653)$ -3%6,275,536$
15 Parks & Recreation 1,694,241$ 1,997,305$ 1,791,196$ (206,109)$ -10%2,021,599$
16 Fire 1,502,356$ 1,602,212$ 1,605,535$ 3,323$ 0%1,577,836$
17 Police 561,909$ 642,248$ 753,345$ 111,097$ 17%611,917$
18 General Government 2,187,820$ 1,443,477$ 4,236,002$ 2,792,526$ 193%2,577,658$
21 TOTAL 108,408,086$ 110,605,958$ 115,422,141$ 4,816,183$ 4%113,592,311$
FY 2022-23
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General Fund Overview
have been allocated to another County agency. Unfortunately, this adjustment has not yet been made;
however, is expected to hit in the fall of 2023. To ensure that FY 2023-24 revenue is not negatively
impacted, staff manually removed $600,000 from the actuals above and will set aside this amount to
offset the future adjustment.
The graph below shows the change in sales tax by major business group for the first quarter of the calendar
year (January-March 2023). For the full report, visit slocity.org/finance .
Table 6: Year-over-year Sales Tax Comparison – FY 2022-23 Q3 (Bradley Burns)
Property Tax: Pending a major housing crash, property tax revenue continues to grow steadily and
remains the City’s most stable revenue source. The City recorded an all‐time high in FY 2022‐23, nearly
4% higher than the prior year due to an attractive and flourishing real estate market. The main reason for
growth is the transfer of ownership and the increase in Taxable Assessed Value of homes in the
community. Although the days of record‐low mortgage rates are over and the market has cooled, home
prices remain sticky because inventory is so low. Data shows that number of home sales was down 9.5%
in July 2023 compared to July 2022, but the median sale price was down only 3.1%3 . Based on the latest
estimates from the County Assessor’s Office , there will be 4% growth in FY 2023-24.
Transient Occupancy Tax (TOT): At the third quarter review, staff had indicated it was likely that TOT
revenue wouldn’t reach projections due to storm impacts; however, an incredibly strong fourth quarter
turned that around. The average occupancy rate was about 67% which is slightly higher than last fiscal
year; however, the average daily rate (ADR) for the year was lower by about 4%. The tourism promotion
for the city is led by the work of the City’s Tourism Business Improvement District, known as Visit San Luis
Obispo. Staff do not anticipate any mid-year changes to the FY 2023-24 TOT budget.
Utility User Tax (UUT): The FY 2022-23 UUT projection was notably conservative because of the volatility
seen in UUT over the last four years ; however, the actuals exceeding projections by over 13% is higher
than anticipated. After a closer analysis, this is due to several factors related to utility rate spikes
experienced over the last year:
3 ‘San Luis Obispo County Housing Market.” Redfin, 23 Aug. 2023, https://www.redfin.com/city/17464/CA/San -
Luis -Obispo/housing-market
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General Fund Overview
1. An approximate 7% increase in UUT from e lectricity. Electricity makes up just over 40% of total
UUT revenue.
2. An approximate 51% increase in UUT from natural gas. Natural gas makes up 20% of total UUT
revenue.
3. An approximate 5% increase in UUT from telecommunications, cable, and water. These categories
make up the remaining 40% of revenues.
Staff are working with the City’s UUT consultant, HdL, to better understand the impacts and will likely
make a recommendation to increase the FY 2023-24 budget at mid-year.
Business Tax: Business taxes are collected at the beginning of the fiscal year and are based on the gross
receipts of the previous calendar year. To no surprise the FY 2022-23 revenues , based on calendar year
2021, were significantly higher than FY 2021-22, based on the heavy-hit Covid year 2020. Despite adjusting
the budget upward in expectation of that, actual revenue s still slightly exceeded projections . Since the
City will receive most of its current year (FY 2023-24) business tax revenue before the mid -year review in
February 2024, the budget will be adjusted based on actuals , likely above the current projection. Multiple
years of post-covid data will help staff identify trends and improve long -term forecasting for th is revenue
source.
Cannabis Tax: For the first time since cannabis became legal in the City , cannabis tax revenue exceeded
projections; however, the budget was significantly lowered by $300,000 at the FY 2022-23 mid-year
review. Looking back at the City’s original cannabis tax projections (from 2019), the annual revenue was
expected to exceed $1.5 million by this time; however, delays in businesses opening and lower-than-
anticipated demand have shifted the forecast . Across the state, the cannabis market has fallen short of
what economists expected since the sale of recreational cannabis became legal in 2018. On a positive
note, monthly cannabis tax revenue has stayed very consistent since the second retail location opened in
April 2021, thus making planning and revenue forecasting easier moving forward .
Franchise Fees: Like UUT revenue , franchise fee revenue was particularly high because the franchise
agreements are based on the utility providers’ gross receipts, which spiked in FY 2022-23 due to rate
increases. The City’s top franchise s’ annual remittal fees increased by approximately 25%.
Gas Tax: Gas tax revenue is split into two unique funds. The main “Gas Tax” revenue (line 10) comes from
the Highway Users Tax Account (HUTA), which is a per gallon “gasoline tax”, while SB1 (line 11) or the
Road Maintenance and Rehabilitation Account (RMRA) is a per gallon flat fee. The City receives its revenue
projections from the California Local Government Finance Almanac. FY 2022-23 revenues were very close
to projections. The reason that the growth between the two is often different is because under SB1,
various fixed-amount statutory allocations are made from the SB1 tax rates prior to the cit y and county
allocations. Additionally, an individual city’s allocations are affected by change in the city’s population
relative to the change in state population. Both revenues are collected in “special revenue” funds because
they must be used to support transportation services or infrastructure. Looking forward, the City expects
stable, modest year over year growth. While fuel consumption may remain flat or in slight decline, annual
cost of living adjustments will help to maintain revenues.
General Government: General Government revenue includes all the City’s non‐departmental revenue
such as business license permit fees, interest earning, rent, and other miscellaneous revenue. It also
includes grant and subvention revenue which fluctuates significantly from year to year. The most notable
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General Fund Overview
variance contributing to the over budgeted revenue was positive $1.2 million investment earnings or Fair
Market Value (FMV) adjustments. The FMV adjustment is essentially an accounting pro cess that makes it
possible to reassess the fair value of the City’s assets when there is a considerable difference between the
market and the current book value of the City’s monetary assets. Interest earnings and FMV adjustments
swing widely between fis cal years based on the market and are almost impossible to forecast. The table
below shows the last four years of actuals. Due to the huge negative adjustment in FY 2021-22, the City
adjusted its budget for FY 2022-23 in preparation for another hard -hit ye ar.
Table 7: Year-over-year Interest on Investment Earnings and Fair Market Value Adjustments
FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 23-24 Forecast
Budget $230,000 $230,000 $230,000 $(1,270,000) $230,000
Actual $1,113,062 $54,360 $(1,501,692) $1,192,259 -
Variance $883,062 $(175,640) $(1,731,692) $2,462,259 -
More detail about fee revenue can be found within the respective department write-ups.
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General Fund Overview
General Fund Ending Position
The table below shows the ending net position of the general fund and the estimated fund balance at year
end. While these numbers are still unaudited, they show that the fund ended with revenue under
expenditures (see footnote) and an undesignated fund balance of about $1.6 million. In line with best
practices and consistent with the City’s usual process, this balance should not be appropriated until after
the formal audit is complete. After the audited financials are published in December 2023, staff will make
a recommendation to Cou ncil at mid-year (February 2024) on how to appropriate the unassigned fund
balance. The City’s Fiscal Policies provide a framework for using fund balance :
1. Reserve P olicy: Revenues in excess of expenditures at the end of the fiscal year shall be used to
first satisfy committed reserve requirements before appropriating for other uses.
2. Fiscal Policy Section 8 ‐ CalPERs and Unfunded Liabilities : The City sets the following
prioritization of unassigned General Fund balance:
a. Additional discretionary payments to CalPERS
b. Infrastructure investments
c. Emerging Health and Safety needs of th e community
Table 8: General Fund Ending Position
General Fund Ending Position4 (UNAUDITED)
1 A. Beginning Balance $ 40,745,506
2 (+) Revenue $ 134,762,075
3 (-) Expenditures $ (137,675,119)
4 B. Revenue Over/(under) Expenditures5 $ (2,913,045)
5 C. Ending Fund Balance (A+B) $ 37,832,461
6 Committed to:
7 Policy Reserve Level - 20% of operating budget $ 13,727,000
8 Local Revenue Measure Balance (see Table 9 on next page) $ 4,979,120
9 Insurance Fund Balance (see page 25) $ 585,456
10 Assigned to:
11 Encumbrances $ 2,638,965
12 115 Pension Trust Fund $ 2,000,000
13 CalPERS ADP (April 2024 payment) $ 2,000,000
14 Revenue Stabilization Reserve $ 2,000,000
15 Development Services Designation $ 464,136
16 Solid Waste AB939 $ 281,000
17 Other Restricted $ 35,487
18 SLO REP $ 3,940,000
19 Economic Development Opportunities $ 1,400,000
20 D. Undesignated Fund Balance [C-(Lines 7-19)] $ 3,781,296
21 E. Required to maintain reserve levels and fund previously
approved one-time expenditures in FY 2023-24 $ 2,144,570
22 F. Estimated Year End Balance for Future Appropriation (D-E) $ 1,636,726
4 Includes Local Revenue Measure and Insurance sub -funds.
5 This value is negative because FY 2023 -24 expenditures includes one-time expenditures that used prior year fund
balance.
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General Fund Overview
Local Revenue Measure Ending Position
The table below shows the ending net position of the Local Revenue Measure (LRM). Because LRM is a
sub-fund of the general fund and a general -purpose tax, it can be used to fulfill the City’s fiscal policy
guidelines (referenced in the previous section) if necessary. Based on unaudited numbers, there will be
sufficient non-LRM balance to replenish reserves and make an additional payment to CalPERs ; therefore,
LRM can be used to provide one -time funding for community services and infrastructure investments.
Given the extraordinary storm damage repairs necessary and overall project cost escalations, staff will
likely return to Council with a recommendation to use any available balance on infrastructure projects.
These recommendations will likely include funding for storm damage repair projects as well a s completing
additional roadway paving work. The Revenue Enhancement Oversight Commission will be given an
opportunity to review the recommendation before it is presented to Council.
Table 9: Local Revenue Measure Ending Position
Local Revenue Measure Ending Position (UNAUDITED)
A. Beginning Balance $ 5,696,864
(+) Revenue $ 30,405,434
(-) Expenditures $ (32,340,558)
B. Revenue Over/(under) Expenditures $ (1,935,123)
C. Unassigned LRM Fund Balance (A+B) $ 3,761,741
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Administration and IT
Administration and Information Technology
Office of the City Manager - The Office of the City Manager continued to provide information and
recommendations to the City Council, implement ed Council policies and programs and managed the day-
to-day operations of the City including the completion of Major City Goal (MCG) tasks.
The Office of the City Manager operates the City Communications Program, which focused on improving
City processes and procedures, and putting new systems in place, to allow for frequent and consistent
communications across all City departments. This program supports all City departments and assists City
staff in working with on -call marketing and public relations consul tants to improve community
engagement. The Public Engagement and Noticing Manual was updated in partnership with the
community and the Office of Diversity, Equity and Inclusion. The updates focused on creating greater
equity to increase diverse participati on in City government. Through this program, staff reached and
engaged with more people in San Luis Obispo than ever before. The City published 14 topics on its “Open
City Hall” platform and received 4,668 responses equating to a total of 233.8 hours of pu blic comment.
The City’s audience on social media grew by 26.4% to 93,157 followers and subscribers and the City’s
social media content across all pages were shown to people more than 16 million times (impressions).
The rate at which social media users eng aged with the City’s content also increased by 23.3% (for an
average engagement rate of 8.8% and 1.4 million engagements, including comments, reactions, likes,
clicks, shares, etc.). More people visited the City’s website than ever before and pageviews mor e than
doubled compared to the previous year (nearly 3.5 million pageviews in FY 2022 -23).
The Office also continued to manage the City’s Legislative Program including the development of an
updated Legislative Platform and advocacy to the State on issues a ffecting the City as well as the City’s
Grant Application Program which has netted over $30 million in funding for the organization since
inception.
Office of Economic Development and Tourism – The Economic Development program was a major
contributor to the Economic Recovery, Resiliency & Fiscal Sustainability Major City Goal. All the Office’s
tasks and goals were completed on or ahead of schedule. The use of the of the $250,000 that was allocated
to fund programs to aid in economic recovery and resiliency that were “to be determined” during the
budget process were used to support various programs including the Downtown activation programs,
return of the Buy Local Bonus program, a new Eat Local Bonus program, additional childcare grants,
employee recruitment support and other smaller initiatives. The Office also assisted the Office of
Diversity, Equity, and Inclusion in the roll out of the DEI Business grant program. The update of the
Economic Development Strategic plan was completed and the plan to reorganize the Office of Economic
Development and Tourism was approved in June of 2023 as part of adoption of the 2023-25 Financial Plan.
To accompany this work, the Community Promotions programs though the Promotional Coordinating
Committee (PCC), and the tourism marketing through the Tourism Business Improvement District (TBID)
enhanced the reach of the Economic Development program this ye ar. Tourism in the city remained strong,
resulting in $10.8 million in transient occupancy tax (TOT) contributed to the general fund and
outperforming the budget by 22%. Tourism promotion continued to be led by the City’s TBID. Through
the PCC the City awarded $200,000 in grant funding to local non -profit organizations through two grant
opportunities in the fiscal year, the Arts & Culture Recovery Grant (ACRG) and the Cultural Grants -In-Aid
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Administration and IT
(GIA) program. The PCC also expanded the work to promote Public Art in San Luis Obispo by establishing
a consistent brand and implementing a 10-month promotional plan. In collaboration, the TBID and PCC
rolled out a new neighborhood identity program featured on VisitSLO.com, funded through Economic
Development and managed by the PCC.
Office of Sustainability and Natural Resources - In coordination with other departments, staff focused this
year on the delivery of the Climate Action, Open Space, and Sustainable Transportation MCG work
program. Major highlights included the implementation of Climate Action Plan across each of its six pillars,
as well as implementation of the Lead by Example Municipal Operations Carbon Neutrality Plan. City
Council adopted the Climate Action Plan Volume 3 work program for 2023 -2027, the Cli mate Adaptation
and Safety Element of the City’s General Plan, the Community Forest Plan, and the Righetti Hill Open
Space Conservation Plan. At the same time, staff remain ed adherent to its mantra of both planning and
doing and significant implementation in each of these program areas was achieved. Lastly, staff played a
role in the January through March flood recovery response and subsequent emergency creek repair
projects.
Office of the City Clerk - This year the City Clerk’s Office processed agenda packets for 39 City Council
meetings; 24 of those meetings were between January and June of 2023. The Clerk’s Office also managed
the remodel of the Council Hearing Room and upstairs breakroom . With the help of IT, the Council
Chambers and Council Hearing Room were updated with an automated audio and video system that
enables the City to host hybrid meetings for City Council. In addition, Clerk’s Office staff led the effort to
have 100% completion of the annual Conflict of Interest filing by mid -April.
Office of Diversity, Equity and Inclusion - This year, the Office of Diversity, Equity, and Inclusion
implemented key components of the 2021-23 Financial Plan that build the foundation for upcoming years,
which include the presentation of the DEI Strategic Plan Framework before Council on May 2, 2023, the l
execution of the first round of Human Services Grants (HSG), and the DEI SLO Business Grant, which is a
shared goal between the Office of Economic Development & Tourism, and the Office of DEI. Additionally,
the Office of DEI completed the search and executed the contract for a consultant who will support the
development of the DEI Strategic Plan that is slated to be presented before Council by Winter of 2024.
The Office of DEI also executed a contract with Cal Poly, which is designed to create Multicultural
Programming in an effort to create and further learning spaces in the community by focusing on critical
topics that build community belonging and acceptance.
Information Technology Network Services – This year Network Services produced the City's first Broadband
Plan funded through the Local Agency Technology Assistance (LATA) grant administered by the California
Public Utility Commission. A Request for Proposals to identify a partner for conceptual network design is
underway and will advance the project in the coming year. Construction on the KVEC Tower is nearing
completion with the permanent tower erected, and final construction is expected to wrap up this Fall.
Control Systems Administrators completed the Water Treatment Plant upgrade and have continued to
support the installation and programming of the Supervis ory Access and Data Acquisition (SCADA)
systems at the Water Resource Recovery Facility (WRRF). These systems are part of the ongoing WRRF
CIP project. Control Systems Administrators are also working with Utilities on the construction of a new
lift station at Calle Joaquin by overseeing the design, installation, and commissioning of SCADA systems
at that facility. IT support services resolved 3,244 support tickets over the year, covering a range of support
activities including hardware and software installa tion, upgrades, and troubleshooting.
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Administration and IT
Information Technology Information Services – The Information Services, Geographic Information System
(GIS) Team played an important role in storm response and recovery efforts this Winter and Spring by
creating a mobil e application to collect the field data and creat e a situational status dashboard to
disseminate authoritative information for users to make informed decisions. The Database Administrator
and System Application Specialist completed Power Business Intellig ence (BI) reports measuring key
performance indicators in support of the City’s Transparency and Open Government efforts. GIS Team
updated all maps in the Climate Adaptation and Safety Element. The Information System (IS) staff also
revamped the Homeless Camp application that supports interagency workflows.
The Oracle project portfolio management (PPM) reconfiguration was completed in March 2023. The
program team is currently working on the Overtime and Dual Calculation (ODC) which will automate the
overtime base rates calculation and enable comparison of Memorandums of Understanding (MOU) and
Fair Labor Standards Act (FLSA ) within Oracle to facilitate payment of the higher of the two without the
need to extract and reimport values. Additionally, IT continuously produces step -by-step interactive user
guides, called Oracle Guided Learning (OGL). There are 150 OGLs in production, and many more are in
development.
Table 10 - Administration and IT Performance Measures
Objective Measur e 2022-23
Target
2022-23
Actual
Provides City-wide
communications to the
community.
Strategic Goal: Citywide
Communications
Open City Hall Participant Satisfaction Rating 90% 94%
# of City News Releases 175 6716
Provides reliable IT resources to
the organization and community.
Strategic Goal: Information
Technology
Maintain City Network Reliability Uptime Status 99.9% 99.9%
Data backed -up in Gigabytes 173,000 173,000
Number of GIS layers maintained 915 915
Economic Stability
Strategic Goal: Economic Recovery
and Stability
Contacts with businesses regarding starting, expanding,
and/or staying in the City 75 99
One -time funds used for direct aid to local businesses and
non -profits $250,000 $495,0007
Supports our commitment to
sustainability and provides open
space resources to the
community.
Strategic Goal: Climate Action,
Open Space, and Sustainable
Transportation
# of Green Team Meetings 10 10
# 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
# of City-wide DEI Trainings Offered 10 38
6 Total number of e-notifications sent out, including public notices and news / announcements. The City no longer
sends traditional news releases and instead sends e-notifications to the community, encouraging local reporters to
subscribe for news and annou ncements.
7 One-time DEI Business Grants expanded direct aid administered to the community.
8 Due to staff turnover in the Office of DEI there were fewer trainings offered this fiscal year.
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Administration and IT
Objective Measur e 2022-23
Target
2022-23
Actual
Strengthens the City’s
commitment to advancing
Diversity, Equity and Inclusion
Strategic Goal: DEI
Funds for High -Impact DEI Grants Awarded $150,000 $300,0009
Table 11 - Administration/IT Budget Variance Analysis
Staffing – The department ended the year with 3% savings, aligned with the City’s assumed salary savings
rate. Over the course of the year a portion of salary savings generated from vacant positions, such as the
Technology Project Manager, were redirected to contract services to continue momentum on sensitive
projects.
Contract Services – The contract services budget was used to deliver on the objectives and commitments
outlined in the Major City Goals. This included DEI Business Grants, DEI High Impact Grants, Huma n
Services Grants, contract services for Downtown, IT infrastructure maintenance and more.
Other Operating Expenses – The department ended the year with some savings in other operating
expenses. Most of the savings were tied to expenses related to vacant positions and associated training
and start-up costs.
Utilities – Communication services drove the Utilities line over budget this year. Communication services
are numerous and include phone services, air cards, and connectivity for public safety vehicl es, among
other things. There is an increased demand from workforce and programs for data plans in the form of
cell phones, tablets, air cards, and machine to machine readers. These costs will now be accounted for
when positions are added to avoid overages and large true ups with new budgets.
9 FY 2022-23 DEI High Impact Grants include $150,000 from the mi ssed grant cycle in FY 2021 -22.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing 5,554,182$ 6,076,047$ 5,892,994$ 183,054$ 3%6,073,599$
Contract Services 2,950,324$ 5,392,285$ 5,268,132$ 124,153$ 2%3,628,317$
Other Operating Expenditures 762,644$ 886,919$ 805,066$ 81,852$ 9%820,503$
Utilities 327,771$ 347,342$ 366,410$ (19,068)$ -5%327,412$
TOTAL 9,594,922$ 12,702,593$ 12,332,602$ 369,991$ 3%10,849,831$
Administration/IT
FY 2022-23
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City Attorney
City Attorney
A Year In Review
The first few months of the year were turbulent as staff oversaw the work needed to configure a new
office space for the department and trained three new employees while preparing to hire a fourth. That
fourth new hire was the first ever Deputy City Attorn ey who had her first day just as the Assistant City
Attorney began a leave. Department staff pulled together, supplemented by contract attorneys, to
continue meeting deadlines and producing quality work -product for Council and City staff throughout the
year, but the Department continues to experience staff turnover, recently filling one support staff vacancy
and preparing to launch a recruitment for a second vacancy.
Accomplishments and Strategic Goal Updates
Staff attorneys have been able to provide leg al advice and support to Council, Planning Commission, and
staff throughout the organization to help advance, or bring to completion, dozens of important projects,
including:
1. Final closure of various, high -profile litigation including Natural Healing Center’s dispute of the
revocation of their Cannabis Business Operating Permit and the writ filed by a group, calling itself
SLAP, contesting the City’s environmental determination for a mixed -use development at the
corner of Marsh and Nipomo.
2. Continued management and negotiation of several high -profile legal or litigation matters
including homelessness litigation and evolving caselaw, two consecutive California Voting Rights
Act (“CVRA”) district election demands, litigation arising out of the murder of De tective Luca
Benedetti, and ongoing analysis and City response to a federal court decision implicating the City’s
electric building regulations.
3. Successfully onboarded new Deputy City Attorney who has assumed complex caseload well ahead
of anticipated trai ning schedule.
4. Advised on the collection and completed the review and production of voluminous records in
response to discovery and Public Records Act requests with legal implications.
5. Legal and negotiations support for implementation and dispute resolutio n regarding the City’s
development agreements for Avila Ranch and San Luis Ranch housing developments, and
provided legal advice and support on development review and Capital Improvement Project
processing and legal compliance.
6. Assisted with drafting and review of the Subdivision Regulations Update
7. Participated in the EOC response to the 2023 Winter storms and flooding
8. Filed for a receivership for the hazardous property at 48 Prado.
9. Assisted with transaction of the Anderson Hotel affordable housing project .
10. Advised on update of the Cannabis Regulations.
11. Advised on drafting and implementation of the CAMP Standards (Compassionate Assistance,
Mitigation and Prevention) for interactions with unhoused community members.
Challenges
Staffing issues from mid -year until June pulled attention away from completion of process improvement,
service efficiency and file and document management projects. Additional guidance and re -training were
provided for the support staff hired earlier in the year but, for various reason s, all positions were either
Page 51 of 182
City Attorney
vacant or held by a new employee by June. This meant remaining staff were taking on additional workload
or onboarding new staff on a continuous basis.
There were several ongoing, time-consuming legal matters requiring intensive legal analysis and support,
including the receipt of a second CVRA demand letter a few months after the first was settled; the
collection of voluminous records for discovery in Langley v City (allegations of civil rights violations by
unhoused community members); ongoing development agreement negotiations; and unanticipated City
project, public/private infrastructure delivery, and real property acquisition matters that have consumed
significant legal resources and hindered focused staff training and deve lopment and process improvement
work at the level needed and anticipated.
Table 12 - City Attorney Performance Measures
Strategic Goals Measure 2022-23
Target
2022-23
Actual
Timely and Responsive
legal advice and support
Strategic Goal:
Department Objectives
Administrative Citation Appeals Received by the City 120 110
Appeals closed without need of a hearing 10 25 23
City assisted corrections to defective appeals to allow
access to hearing 15 6
City facilitated hearings on the record without need
for personal appearance by Appellant 40 35
# of hearing days scheduled 7 1811
Legal Training &
Compliance
Strategic Goal:
Department Objectives
# of Council, Staff, and Advisory Body legal trainings,
legal updates, and compliance advisory sessions 12 812
Municipal Litigation &
Prosecution Management
Strategic Goal:
Department Objectives
Percentage of Claims Resulting in Litigation <5% 7.8%13
Liability Claims Against the City Reviewed/Managed 70 77
10 Closed in some way that did not include a decision being issued (e.g. withdrawn by appellant, dismissed for
untimely filing, voided by the issuing department)
11 A hearing officer’s preference for less appeals heard on a si ngle day led to more overall hearing days needing to
be scheduled.
12 Onboarding of multiple staff members and an extended leave of absence made it difficult to prioritize time for
the preparation of training materials.
13 Of the six claims that went to liti gation, one is a private matter in which the City was named due to plaintiff’s
misunderstanding of HASLO and will be dismissed soon; for two the City is indemnified under terms of either an
event permit or a construction contract; the others are a personnel matter, a trip and fall at a City park, and an
allegation that code enforcement reduced the sale price of a homeowner’s property, which the City assesses as
meritless.
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City Attorney
Table 13 - City Attorney Budget Variance Analysis
Staffing – Staff turnover and an extended leave of absence during the course of the year contributed to
savings at year end. A portion of the savings was transferred to Legal Services and used to fund an increas e
in the contract to defend the City against the CVRA demand letter received in February.
Contract Services – The Contract Services budget line ended the year under budget but, considered here
with Legal Services, the category appears overspent. Staff wil l adjust their process for tracking budget
going forward to avoid this misrepresentation.
Other Operating Expenses – The department funded the physical transition of its offices and managed
the defense of the City in various matters while staying within b udget.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing 1,146,056$ 1,167,045$ 1,137,918$ 29,126$ 2%1,329,184$
Contract Services 207,765$ 517,757$ 519,073$ (1,316)$ 0%50,500$
Other Operating Expenditures 20,884$ 28,424$ 25,981$ 2,443$ 9%45,360$
TOTAL 1,374,705$ 1,713,226$ 1,682,973$ 30,253$ 2%1,425,044$
City Attorney
FY 2022-23
Page 53 of 182
Finance Department
Finance Department
The Year In Review
The Finance Department ended the year with about 5% overall budget savings and was able to deliver on
its goals. The Department continued to monitor the City’s unfunded liabilities for the p ension and retiree
health plan and contracted with an actuarial to get an updated funded status and long -term forecast. In
coordination with IT and HR, the Department also continued to make enhancements in the Oracle system
that will benefit the organizati on in the long run.
Because FY 2022-23 was a financial planning year, the Department spent significant time updating its fiscal
forecasts and working with departments and Council on the development of the 2023 -25 Financial Plan.
As of a result of the 2023 storms, Finance staff were activated in the Emergency Operations Center. They
played a key role in tracking expenditures and ensuring that employees were submitting the required
documentation in order to maximize the possibility of reimbursement through FEMA and CalOES via the
California Disaster Assistance Act (CDAA). The Department is also responsible for ongoing reporting to the
US Treasury related to the use of $13.6 million in State and Local Fiscal Recovery Funds provided to
address the fiscal impacts of the COVID-19 pandemic.
Lastly, the Department welcomed a new Finance Director in December 2022. Based on the department -
specific results of the Citywide Employee Engagement Survey conducted in January 2023, the Finance
Department began work with HR on an organizational assessment in the Spring of 2023. The assessment
is still underway and is intended to: update job descriptions to more accurately reflect the work performed
by staff, assure that reporting relationships are appropriate, and that sta ff throughout the Department
have “career ladders” to support their growth and development.
Accomplishments and Strategic Goal Updates
1. Made an additional $2 million payment to CalPERs to help fund pension liabilities and further its
Fiscal Health Response Plan.
2. Continued enhancements to the Oracle Enterprise Resource Planning (ERP) and Human Capital
Management (HCM) systems in coordination with HR and IT.
3. Reconfigured the Project Portf olio Management (PPM) module to enable more accurate tracking
of project budgets.
4. Built out the City’s external budget portal: OpenBook.
5. Established a Section 115 Trust Fund with the California Employe rs’ Pension Prefunding Trust.
6. Updated the City’s debt management policy .
7. Received the GFOA Distinguished Budget Presentation Award for the 2023 -25 Financial Plan.
8. Received over $50,000 in FEMA reimbursement payments for the City’s COVID expenses and
expects more in the future.
9. Developed a stand-alone “CalPERS and Unfunded Liabilities” policy to help guide the City’s long-
term commitment to payment of unfunded liabil ities.
10. Incorporated a DEI questionnaire into the annual business license renewal process to gather
information to help further initiatives under the City’s DEI Major City Goal.
11. Coordinated Citywide efforts to track, document and report on storm expenditure s to maximize
reimbursement.
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Finance Department
12. Made significant progress on securing approximately $47 million in Lease Revenue Bond financing
to support construction of the Cultural Arts District Parking Structure (CADPS). This effort is
expected to wrap up in early Septe mber 2023 so that the City can award a construction contract
within 60 days of construction bid opening.
13. Supported the continued transition of the Infrastructure Financing Program to the Community
Services Group and advised on the fiscal and budgetary comp onents of administration of the Avila
Ranch and San Luis Ranch Community Facilities Districts (CFDs).
Challenges
The Finance Department’s biggest challenges in FY 2022-23 were surrounding retirements, staff turnover
and response to the fiscal ramification s of the major storms experienced over the winter. In addition to
performing regular duties, the Purchasing Analyst has been coordinating Citywide efforts do document
storm related work and expenditures and has been working with FEMA and CalOES to seek
rei mbursement for eligible storm related costs. All of this has been done despite a vacancy in the
Purchasing Specialist position, but a recruitment to fill this position is currently underway.
After the only payroll position, the Payroll Specialist, beca me vacant in beginning of the fiscal year, the
Department determined that the payroll function required an additional employee. To address the issue
without impacting the Department’s budget, the vacant Finance Administrative Assistant position was
reclassified to a Payroll Analyst and the FTE was moved to Payroll. This was vital for the payroll operations
but ultimately left the administrative duties spread between others in the Department.
The Department also struggled with turnover in the Revenue divis ion, which includes three critical
positions that help with customer service. The department has had difficulty filling the Accountant
Assistant positions in the past and the last two incumbents (who were in the roles for less than six months)
gave feedback that positions were not as expected based on the job description. Additionally, internal
process improvements made over the last five years have changed the scope of the positions. Given that
the positions are currently vacant, the Finance Department too k this opportunity to work with Human
Resources and a third -party consultant to evaluate the job classifications. This evaluation is in progress,
but a new Finance Cashier position has been created and a recruitment to fill that position with a
permanent e mployee will begin in September 2023.
As of January 2023, the median tenure of Finance Department staff was 1.38 years. In the Spring of 2023,
the Department began a formal organizational assessment to make sure the current Finance Department
structure meets the City organization’s needs. It is expected that the organizational assessment will be
complete toward the middle of FY 2023-24.
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Finance Department
Table 14 - Finance Department Performance Measures
Objective Measure 2022-23
Target 2022-23 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 & 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 direct annual debt per capita (General Fund) $43 $43
Twelve -month total rate of return/City portfolio 3% 1.9%
Table 15 - Finance Department Budget Variance Analysis
Staffing – The department experienced turnover throughout the year, specifically in the Revenue Division.
The Department carried an average vacancy of approximately 2.5 FTE over the course of the fiscal year.
Savings due to these vacancies were partially offset by significant leave payouts for two employees that
retired during the year. Without the vacancies, the Department would have been over -budget.
Contract Services – There were no significant variances in the Department’s contract services budget. The
increase in budget for FY 2023-24 is due to a one -time line item for a City-wide fee study.
Other Operating Expenses – Consistent with trends across the organization, Finance had savings in its
education and training budget mainly due to the Fiscal Health Continge ncy Plan activation in the second
half of the year. There were also savings in printing, office supplies, and postage. Expenses in this category
can vary year over year depending on what equipment needs to be purchased and how many new
employes come on board.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing 2,001,911$ 2,072,644$ 1,965,155$ 107,489$ 5%1,884,921$
Contract Services 354,677$ 477,115$ 470,882$ 6,233$ 1%510,720$
Other Operating Expenditures 28,146$ 56,617$ 33,050$ 23,567$ 42%52,440$
TOTAL 2,384,733$ 2,606,375$ 2,469,087$ 137,288$ 5%2,448,081$
Finance
FY 2022-23
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Finance Department
Non-Departmental, Support Services
The Non-Departmental and Support Services cost centers are managed by the Finance Department but
are used for expenditures that are not specific to an individual department.
Table 16 - Non-Departmental/Support Services Budget Variance Analysis
Staffing Contingencies – These budget lines are only activated when a department is faced with salary
cost increases due to bargaining results, minimum wage increases, or unexpected vacation buyouts that
cannot be absorbed within the department’s appropriated budget. Generally, departments can withstand
these costs increases due to savings from vacancies throughout the year, which was the case in FY 2022 -
23. Budgeting for these contingencies also helps the City achieve its 3% salary savings 14 assumption in a
situation where departments do not have intermittent vacancies. Staffing contingencies also include
budget for things like u nemployment insurance costs , which fluctuate on an annual basis. During the
pandemic, the annual cost was over $100,000 but in FY 2021-22, costs decreas ed to $17,000.
Other Operating Expenditures – This category includes budget for expenditures like postage, membership
costs for the League of California Cities, print and reproduction, and miscellaneous materials and supplies.
The majority of the savings were due to reduced need for printing and postage as the City continues to
transition its materials online. These savings were partially offset by increases in postage rates and
material costs.
Bank/Merchant Fees - The negative balance in this category was caused by bank fees that were
historically not budgeted; however, were offset by interest earnings. In FY 2022 -23, the General Fund
alone generated over $1 million in interest earnings.
14 The General Fund assumes an annual 3% salary savings in its fiscal forecast due to i ntermittent vacancies and
hiring new employees at lower steps. This assumption is based on historical actuals for the last ten years.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing Contingencies 48,037$ 904,334$ 61,497$ 842,837$ 93%1,000,883$
Other Operating Expenditures 365,424$ 120,836$ 115,455$ 5,381$ 4%331,700$
Bank/Merchant Fees 240,261$ 80,000$ 222,242$ (142,242)$ -178%100,000$
TOTAL 653,721$ 1,105,171$ 399,194$ 705,977$ 64%1,432,583$
Category
FY 2022-23
Page 57 of 182
Human Resources
Human Resources Department
A Year In Review
This was a year of significant transition, with more than half of the Human Resources Department (HR)
either newly hired or promoted. The team continued supporting the growing and changing organization
while also striving to establish stability wit hin the department.
Approximately 178 total recruitments were coordinated by HR in the last year. Of those, 45% were
promotions and there were a total of 120 employees hired into regular positions. Additionally, the HR
team coordinated four department head assessment centers, each being an extensive process that ended
successfully. Changes were made to enhance the recruitment process, including steps to utilize the
applicant tracking system more fully. Further work is in progress, but the improvements to d ate have
yielded positive results, saving time and increasing bandwidth for the recruitment team.
Associated with the high volume of recruitments and number of employees new to the organization, is a
need for added training and development support. An emp loyee engagement survey was completed in
January 2023 to gain insight into how the City can best support employees and foster a positive and
engaged workforce. The results of the survey emphasized a need for workforce transition and
development initiatives , including enhanced onboarding experiences, learning opportunities and a
strategic focus on knowledge management and transfer. With the median tenure across all employees
being just over five years, further emphasizing this need, the HR team prioritized a comprehensive training
plan with an emphasis on getting back to basics. In the past year, 27 training and development
opportunities were offered to employees, and tailored resources were provided to new supervisors to
ensure they have the tools to be effe ctive in their roles.
Work efforts also included enhancements to the City’s Human Capital Management System (Oracle) to
improve functionality for end users, such as manager self -service for terminations and step by step
instructions for employees using Oracle Guided Learning. These efforts are aimed at automating
processes, reducing manual work effort and adding additional controls to ensure accuracy. Further, the
HR team began the process of transitioning to electronic personnel files that will be stored within Oracle
for a one stop shop related to personnel records. All of these advanced objectives for the major city goal
of Economic Resiliency, Cultural Vitality and Fiscal Sustainability.
This was also a busy year for labor relations. After going through factfinding, an agreement was reached
with the City’s largest bargaining unit, the San Luis Obispo City Employees’ Association. Additionally,
timely agreement was reached with the police management bargaining unit. HR continues to have strong
positive relationships with all public safety bargaining units and strives to enhance and streamline its labor
relations processes overall.
Accomplishments and Strategic Goal Updates
The Department met its goals set in the 2021-23 Financial Plan by:
1. Continuing to provide high-quality integrated human resources.
2. Providing tools and opportunities to employees to reach their full potential through leadership
training and opportunities for internal promotions.
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Human Resources
3. Promoting a high -performing and self-sufficient employee organization that is connected to the
community through shared organizational values and goals by providing educational
opportunities as required for their respective positions and for general awareness in the
workplace.
Challenges
The key challenges that Department faced include:
1. Continuing high volume of recruitments, onboarding, and training needs. Part time contract staff
were hired using salary savings to assist with this workload.
2. Higher than average expenses associated with liability claims. Since the undesignated insurance
fund balance was sufficient to pay for these expenses, allocations were made from the fund to
cover the unbudgeted expenses.
3. Unusually challenging contract negotiations with one employee group as well as disciplinary
issues that resulted in a need for unbudgeted legal assistance.
4. The majority of the HR team being new to their role, and the resignation of HR Manager during
an exceptionally busy year.
Table 17 - Human Resources Performance Measures
Objective Measure 2022-23
Target
2022-23
Actual
Integrated HR Services
Average days between injury and Workers’ Compensation claim
filed. 3 2
Achieved lower severity of Workers’ Compensation claims than the
risk pool Yes Yes
Annual liability claims payment under the Self-Insured Retention
amount. Yes No
Employee
Development &
Growth
Percentage of On -Time Employee Performance Evaluations 95% 92%
Percentage of Internal Promotions 40% 41%
Training Sessions Coordinated 35 32
Engaged and Aware
Culture
Number of Policies Communicated 5 8
Informational Sessions Coordinated 90 94
Table 18- Human Resources Budget Variance Analysis
Staffing – The Staffing of full -time staff were marginally less than budgeted, and although vacancies
occurred throughout the year, these salary savings were used to hire consultant services and temporary
staffing to meet the high demand for services during the course of the yea r.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing 1,400,484$ 1,468,859$ 1,404,813$ 64,047$ 4%1,451,978$
Contract Services 459,330$ 737,006$ 657,653$ 79,353$ 11%628,207$
Other Operating Expenditures 42,093$ 54,300$ 81,028$ (26,728)$ -49%61,000$
TOTAL 1,901,906$ 2,260,165$ 2,143,493$ 116,672$ 5%2,141,185$
Human Resources
FY 2022-23
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Human Resources
Contract Services – A large portion of the Department’s budget consists of contract services for a variety
of purposes. The only significant variance was due to legal support funding that was not utilized due to a
hearing being postponed into the next fiscal year.
Other Operating Expenses – Several expenses were inadvertently charged to the incorrect accounts,
resulting in an overage in certain accounts and other accounts being underspent. Overall, the cost center
had savings, and training has been provided to ensure expenses are documented correctly in the future.
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Insurance Fund – Managed by Human Resources
Insurance Fund (Managed by Human Resources)
The City is a member of the California Joint Powers Insurance Authority (CJPIA) which provides coverage
for general liabil ity and workers’ compensation through pooling of losses among its members and
coordinates oversight and management of claims administration. In 2016, the City joined the excess
program for liability, taking on a $500,000 self -insured retention level, and e ntered into an agreement
with CJPIA and Carl Warren, a third -party administrator, to manage its liability claims. Carl Warren
provides intake of claims, legal counsel, investigation of claims, and represents the City in mediations and
court cases. For work ers’ compensation claims, the City is in the primary program, meaning that CJPIA
covers the costs from the first dollar. The third -party administrator for workers’ compensation is Athens
Administrators. The consolidation of all insurance -related expenses i nto one Insurance Fund has made it
easier to oversee and manage them. The City strives to maintain a reserve sufficient to guard against
substantial claims, which is determined based on annual actuarial report information. In addition to the
CJPIA member contributions for liability and workers’ compensation, the Fund also covers premiums for
ancillary insurances such as property, crime, pollution, volunteers, and special events.
Table 19- Insurance Fund Budget Variance Analysis
Table 20 - Insurance Fund Balance
FY 2022-23 Ending Fund Balance
a. Beginning Fund Balance $1,845,935
b. Transfers In $4,450,000
c. Expenditures ($5,710,479)
d. FY 2022-23 Year End Balance (a+b+c) $585,456
e. FY 2023-24 Transfer In $6,000,000
f. FY 2023-24 Projected Year End Balance $1,029,983
Allocations were made from undesignated fund balance to cover estimated costs for liability claims during
an unusually expensive year. It is difficult to predict the exact timing of claim settlement or clo sure as
there are variables outside the City’s control. Therefore, the remaining balance will return to fund balance
and be utilized to pay claims costs in future years.
Reserves/Fund Balance: To meet the City’s definition of a 75% confidence level per policy (150% of the
average 5-year claims cost), the City should have a reserve of $750,758 in the insurance fund. To meet
actuarial recommendations for a 75% confidence level (meaning, the specified funding level will be
sufficient to cover claim costs 75% of the time ), the City needs to achieve a reserve of $3,500,000. General
fund transfers in are being ramped up over the next five years to increase the available reserve.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Worker's Comp Insurance 2,181,044$ 2,844,913$ 2,844,913$ -$ 0%2,516,607$
Liability Insurance 1,627,589$ 2,527,911$ 2,347,755$ 180,156$ 7%2,431,373$
Other Insurance 442,439$ 522,747$ 517,810$ 4,937$ 1%607,493$
TOTAL 4,251,072$ 5,895,571$ 5,710,479$ 185,093$ 3%5,555,473$
Insurance Fund Expenditures
FY 2022-23
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Fire Department
Fire Department
A Year i n Review
In FY 2022-23 Fire Department staff made significant progress on work efforts impacting every program
within the Department budget. In FY 2022-23, the department welcomed both a new Chief and Deputy
Chief. Administrative staff provided Department le adership, public information, personnel management,
fiscal and contract management, strategic coordination, and grant management. Emergency Response
personnel focused on providing premier service to the community through all -risk response and training.
The Department’s Fire Prevention Program helped protect the life, property, and environment of the
community through its fire & life safety inspection programs, fire plan reviews, and publication education
efforts. The Department continued its rollout of the self -inspection program which allows low-risk
occupancies to conduct inspections through a self -service option. The new Emergency Manager position
added in late FY 2021-22 was instrumental in managing and coordinating response to the winter storms.
Throughout the year the Department’s fire apparatus services staff ensured the fire fleet (including both
heavy apparatus equipment and fleet vehicles) remained in proper working order to ensure continuous
service delivery to the community. Finally, the Mobile Crisis Unit, which successfully became operational
in late FY 2021-22 provided crisis support services to community members to improve the availability of
local programs and help alleviate calls for service traditionally provided by public safety sta ff by handling
low-acuity calls. Maintaining staffing levels remained a focus for the Fire Department in FY 2022-23. The
Department filled 10.5 FTE positions (nearly 17% of the department's workforce ) and conducted
promotional exams for newly promoted engi neers and conducted an academy for seven new firefighters.
Accomplishments and Strategic Goal Updates
1. Diversity, Equity, and Inclusion: The department filled eight positions and made six promotional
placements including new a new Chief and Deputy Chief, Battalion Chief, three Captains and one
Fire Engineer as well as seven new firefighters, including two lateral hire paramedics. This also
included the Department’s first female firefighter in several decades, a significant milestone for
gender diversity and inclusion within the Department. The Fire Intern program continues to be
successful at increasing inclusivity by offering individuals from a variety of backgrounds the
opportunity to learn more about the fire service. Human Resources was a critical part ner in the
success of these hirings. Public Works staff continue to work towards completing a plan to
improve the inclusivity of the fire station living quarters at Fire Stations 3 and 4. The anticipated
completion date of that work effort is toward the en d of FY 2023-24.
2. Housing and Homelessness - The Mobile Crisis Unit competed one year of operation in June of
2023. This Unit is staffed by a Firefighter/EMT and a contracted Case Worker to respond to
behavioral health and substance abuse crises to help co nnect community members with existing
services and reduce the calls for service that historically have been handled by Fire Paramedic and
Law Enforcement response, which typically are ill -equipped to provide care for these types of
incidents. The MCU made 3,081 total contacts since July of 2022 and coordinated 28
reunifications for individuals to out of the area family. Each contact by the MCU keeps traditional
emergency response available for other calls.
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Fire Department
3. Other Department Objectives - T Fire Department Staff continued to work through carrying out
strategic directions found in the Department’s strategic plan. Some major work efforts include d
securing an Assistance to Firefighter Grant (AFG) to send two firefighters to local paramedic
school totaling $97,856. This grant will cover their education costs as well as the cost of backfill
needed while they are off work for class. Increasing the number of paramedics on staff enhances
emergency response capabilities and increases comprehensive emergency care. The Department
also accelerated the replacement of Engine 4 after repairs became too costly and the wildland
engine was replaced on schedule this year when it reached its end of life. Other major work efforts
include d updating the fire coverage agreement with Cal Poly, open space fuel reduction hazard
mitigation efforts, Department policy streamlining and improvements, and expanded suppression
training programs.
Challenges
The most significant challenge during FY 2022-23 was related to staff turnover. As pre viously discussed,
the Department conducted recruitments to fill eight positions and filled an additional six positions through
promotion of existing staff. The staff time required to facilitate these recruitments, placements, and
subsequent training and o nboarding impacted Department productivity. Administration saw a large
turnover with the retirement of both the Chief and Deputy Chief within months of each other, plus the
movement of the Senior Analyst to Emergency Manager leaving the Analyst position va cant. The Fire
Marshall plans to retire in early Winter of 2023, in anticipation of the retirement an evaluation of the fire
prevention division is being conducted to determine the optimal structure moving forward.
Fiscally, overtime and general cost inf lation were the Department’s largest challenges. Multiple vacancies
drove the overtime up early in the fiscal year. Newly hired firefighters didn’t begin their duty until Spring
of 2023 at which point the Department was able to reduce the need for overtime backfill. The Winter
storms created a need for heightened response which also led to an increase in overtime. Inflation also
had a substantial impact on the cost of essential items ranging from parts for apparatus to Personal
Protective Equipment (PPE). A s the costs climb, the budget for maintenance and repairs faced growing
strain. Additionally, the escalating prices of critical PPE such as helmets, turnout gear and respiratory
equipment have made it increasingly challenging to balance the need for necess ary safety equipment with
fiscal responsibility. Challenges from inflation have been addressed in the upcoming 2023 -24 budget cycle
with increases in corresponding budget areas.
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Fire Department
Table 21 - Fire Department Performance Measures
Table 22 - Fire Department Budget Variance Analysis
Staffing – The largest driver for the negative variance in staffing was vacancy-related overtime/backfill
costs in the Emergency Response program. While a lot of this was offset by the savings due to the vacant
positions, the cost of overtime is higher than the cost of normal staffing so it does not always offset the
15 While the Fire Department did not meet the response time performance targets in FY 2022-23, the target remains
unchanged in FY 2023-24 due to National Fire Protection Association recommended standards. The fire department
successfully worked to implement process improvements based on data analysis and turnout times were improved
by 40 seconds year over year. Travel time is the most difficult time to improve in the short term as they are impacted
by road construction, traffic, roadway design changes and expanded response zones due to annexations in the
southern end of the City, some locations which generate a large proportion of calls further increase travel time stats.
2 Fire Prevention staff encountered challenges early in the year resulting from illness impacting productivity. The
department’s performance has increased and as of August 24, 2023, staff is completing 81% of development review
activities within published cycle times.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing 16,114,559$ 14,402,591$ 14,417,808$ (15,217)$ 0%14,143,415$
Contract Services 344,372$ 451,360$ 354,131$ 97,229$ 22%400,579$
Other Operating Expenditures 531,304$ 616,272$ 527,399$ 88,873$ 14%582,556$
Utilities 95,985$ 123,874$ 119,857$ 4,017$ 3%142,229$
TOTAL 17,086,220$ 15,594,097$ 15,419,195$ 174,902$ 1%15,268,779$
Fire
FY 2022-23
Objective Metric 2022-23
Target
2022-23
Actual
Deliver Timely Effective
Response to ensure rapid
care and hazard
mitigation. 15
Strategic Goal: Other
Department Objectives
Meet the Total Response Time (TRT) goal of 7 minutes or less
to 90% of all lights -a nd-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 8:48
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 1:35
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 2:21
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 5:54
Provide timely service to
the development
community.2
Strategic
Goal: Housing
% of Fire Department Development Review activities
completed within published cycle times. 80% 64%
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Fire Department
budget. Several staff remained out on long term injury absence and there were two medical related
retirements resulting in more vacancies requiring shift coverage with overtime. Staff response to the
winter storms also generated unbudgeted overtime. Staff does not expect this lev el of variance in FY
2022-23 as the staffing levels improved and the department is currently at full staffing.
Contract Services – The majority of the savings in contract services were resulting from a several month
vacancy of the case manager of the Mobile Crisis Unit. Staff budgeted for a full year of services, however,
due to an unexpected resignation, the position remained vacant resulting in savings. Facilities
Maintenance was able to postpone replacement parts for Automat ic External Defibrillators (AEDs) due to
the devices reaching replacement age. New devices were purchased using the Equipment Replacement
Fund eliminating the need for replacement parts and creating a savings. The budget for FY 2023 -24 was
reduced based on the purchase s made in FY 2022-23. Several other cost centers had smaller unexpected
savings that when combined contributed to a more substantial overall cost reduction for the Department .
Other Operating Expenses – The majority of the savings observed in Operating Expenses came from
Training Services, Fire Station Facilities and the Mobile Crisis Unit. The need to backfill vacancies
prevented staff from attending as much training as budgeted leaving a savings in Training Services. The
Mobile Crisis Uni t generated the largest savings in operating expenditures, due to a several month staff
vacancy that prevented full operation of the MCU and generated savings as a result. The MCU is a new
program and staff is slowly learning the most effective ways to use funds resulting in account savings.
Facilities Services was able to delay maintenance and some purchases that created additional savings.
Utilities – Electricity cost savings was the primary driver for the positive variance related to utilit y costs.
Th e 16% savings for electricity is due to recent fire station lighting upgrades to more efficient lighting
systems, paired with lower energy rates achieved through the Central Coast Community Energy (CCCE)
program. The Department experienced slight savings i n water and sewer services. Natural Gas prices
surged during winter pushing costs over budget, but prices seem to have since stabilized. Staff will
continue to use actual costs to inform any needed budgetary adjustments for the upcoming fiscal year.
Fire Department Revenue
Table 23 - Fire Department Revenue
The largest contributor to the Fire Department’s revenue variance was related to the CUPA Inspection
program which charges fees for service due to increased inspection activity. Medical ER recovery is based
FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
Cal Poly Fire Services 273,567$ 361,684$ 362,109$ 425$ 0%361,684$
CUPA Inspection Fees 187,019$ 174,265$ 211,373$ 37,108$ 21%172,800$
Fire Alarm Permits 10,994$ 10,010$ 4,743$ (5,267)$ -53%10,010$
Fire Department Permits 98,529$ 108,000$ 99,591$ (8,409)$ -8%108,000$
Fire Plan Check & Inspection 379,865$ 366,000$ 363,875$ (2,125)$ -1%350,000$
Medical ER Recovery 201,991$ 216,938$ 209,566$ (7,372)$ -3%218,452$
Other Fire Department Revenue 21,195$ 7,790$ (430)$ (8,220)$ -106%5,890$
R1 Inspection Fees 329,197$ 357,525$ 354,708$ (2,817)$ -1%351,000$
TOTAL 1,502,356$ 1,602,212$ 1,605,535$ 3,323$ 0%1,577,836$
Fire Department Revenue FY 2022-23
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Fire Department
on a contract negotiated by the County. It was budgeted with a 7% increase before the contract was
finalized, but the actual was 5% creating a slight shortfall in actual revenue. Other Fire Department
Revenue had an item from the previous fiscal year go to collections resulting in a negative budget line.
Other account variances are reliant on external factors and can be unpredictable. Overall, the variance
for Fire Department revenue was nominal .
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Police Department
Police Department
A Year In Review
Over the last year, the Department focused on maintaining service levels and response times with reduced
staffing levels, hiring and recruitment challenges, unanticipated storm response needs, developing a 5 -
year strategic plan, and purchasing a new buildi ng for Police and City use.
In response to the winter storms, officers worked over 150 hours of overtime to provide assistance with
evacuations, rescues and road closures, and ensure overall safety of the community. Police staff also
provided drone support for intelligence gathering for the Emergency Operations Center (EOC) and field
staff. Responding to these storms only aggravated a pre -existing staffing shortage since there were
vacancies in Patrol. Although officers were burnt out from working incre ased overtime, they continued to
protect and serve the community.
In the fall of 2022 the Department released a Request for Proposals seeking a consultant to lead the
development of a five -year Department strategic plan. Jacob Greene and Associates was chosen as the
consultant and over the past few months their team has met with various internal and external
stakeholders, distributed surveys, met with internal personnel, analyzed data, and prepped for a staff
retreat. Once complete, the strategic plan w ill be a comprehensive road map for the Department over
the next five years.
In November 2022, City staff entered into a purchase agreement to buy real estate located at 1106 Walnut
Street. The interest in purchasing the building was multi -faceted as the City could utilize the building as
temporary over flow office space when needed, the site could be used as a meeting location for any City
staff, or the ground level could be used as an emergency operations center during disasters. The idea of
moving some Police personnel to the new building is to alleviate some of the pressure points related to
office space until a new public safety building has been approved. The Department will continue to
collaborate with other City staff to ensure the move is well -organized and efficient.
Accomplishments and Strategic Goal Updates
Economic Recovery and Housing:
1. Despite ongoing staffing challenges in Patrol, the police department continued to provide a public
safety presence in the downtown during day and night hours.
2. The department continued to work with Transitions Mental Health Association (TMHA) to hire a
Mental Health Clinician (or Case Worker) for the Community Action Team (CAT). Unfortunately,
there have been continued ch allenges with hiring this position, but Police Department staff
remains committed to supporting TMHA with hiring efforts.
3. The Department has continued to staff one CAT officer in the field partnered with a part -time
TMHA resource to provide ongoing homeless outreach services. As the department continues to
fill vacant officer positions, and new hires are finally able to work independently, the second CAT
officer will be able to join the CAT Team.
Climate Action:
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Police Department
1. The Department worked to address traffic sa fety issues by conducting numerous operations
under the FY 2022-23 Office of Traffic Safety Grant. These included DUI checkpoints, traffic
enforcement operations, distracted driving operations and pedestrian/bicycle enforcement.
2. Staff continues to use social media to encourage and educate the community on safe driving
behavior.
Department Specific Accomplishments :
1. The Department fully implemented the use of SPIDR software. This software is a community
engagement tool used to collect relevant feedback fro m those using police services. At this
time, the Department’s average satisfactory rate is 4.5 out of 5 and the police officer satisfaction
rates are 4.8 out of 5. The Department will continue to use this tool to identify areas of
improvement that may be needed when providing police services to our community.
2. The Emergency Communications Center underwent a re -organization. The Communications
Manager position was temporarily replaced with a lieutenant; this pilot program was successful
in improving moral e, raising accountability and providing a more direct link between
management and line -level staff. The Department was able to convert the lieutenant to a
permanent position in the Communications Center.
3. The purchase of 1106 Walnut Street was an accompli shment this past year, as it will provide
much needed office space for the Department’s administrative staff.
4. Luca Benedetti Memorial Highway dedication
5. The Department held a very successful Gun Buyback Event in October 2022. The purpose of this
event was to provide a resource for the community to turn in firearms that they no longer
wanted. Turning in guns helps reduce the risk of gun violence, gun theft, accidental discharges,
and suicide in the community. The Department provided grocery gift cards in exchange for the
guns; in total around 256 guns were collected.
Challenges
In FY 2022-23, there were23 positions that became vacant, equivalent to 25% of the department’s total
staffing. The vacant positions included: eight dispatchers, ten police officers and five civilian staff. The
vacancies were related to retirements, relocating to other areas, medic al retirements, or returning to
previous agencies. The department was able to fill a total of 19 positions during the fiscal year.
In the Dispatch Center, the eight vacancies were due to retirement, employees returning to their previous
agency or resigni ng from the profession. There were 10 police officer vacancies which were attributed to
retirements, medical retirements, or transferring to another agency for personal reasons. A number of
these vacancies have since been filled, but it’s been extremely difficult to recruit qualified applicants.
Agencies across the nation are facing similar challenges with staffing; the City’s new hiring incentive
programs are helping but it has continued to be a struggle to fill positions.
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Police Department
Table 24 - Police Department Performance Measures
Objective Measure 2022-23
Target
2022-23
Actual
Reduce Crime
Strategic Goal: Economic
Recovery, Department
Mission
# of total Part I Crime by year.16 2,050 2,011
Provide safe roadways
for pedestrians, vehicles,
and bicyclists.
Strategic Goal: Patrol
Objectives, Department
Mission
# of total traffic collisions 17
Vehicle: 450 435
Pedestrian: 25 36
B icycle: 35 35
# of targeted enforcement operations
conducted under the Office of Traffic
Safety Grant per year18
DUI Checkpoints: 2 2
Saturation Patrols: 24 28
Traffic Enforcement Ops: 12 13
Distracted Driving
Enforcement: 10 5
Bicycle & Pedestrian
Enforcement: 6 9
Reduce Homeless related
Calls for Service through
proactive engagement.
Strategic Goal: Economic
Recovery, Department
Mission, Patrol Objective
# calls related to homelessness 19 7,000 6,699
# of unique individuals contacted by CAT 600 437
# of Family & Agency Reunification 35 6
# of Local Permanent Housing 31 11
# of major camp cleanups 20 12
Data
provided
by Public
Works: 134
camps
# of Mental Health/Substance Abuse Treatment Referrals 130 215
Table 25 - Police Department Budget Analysis
Staffing – The Department ended the fiscal year with a savings of $455,169 in total staffing. The savings
was attributed to numerous positions that were vacant for a portion of the fiscal year; these vacancies
16 Part 1 Crimes include: homicide, forcible rape, robbery, aggravated assault, burglary, and motor vehicle theft. Figures show n
represent calendar year for 2022.
17 Data for Traffic Collisions represent calendar year 2022.
18 Numbers are from Grant Objectives and may vary from target and actuals based on final grant agreement.
19 Calls related to homelessness represent calendar year 2022.
20 Camp Clean Ups are coordinated and managed by Public Works and Parks & Recreation staff.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing 21,261,551$ 20,432,276$ 19,977,107$ 455,169$ 2%20,677,715$
Contract Services 740,502$ 1,095,787$ 885,954$ 209,833$ 19%882,692$
Other Operating Expenditures 431,546$ 459,769$ 510,183$ (50,414)$ -11%377,240$
Utilities 130,184$ 145,650$ 131,697$ 13,953$ 10%148,406$
TOTAL 22,563,783$ 22,133,482$ 21,504,941$ 628,541$ 3%22,086,053$
Police
FY 2022-23
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Police Department
included eight dispatch positions, nine sworn positions, and six other staff positions. In total, 23 po sitions
became vacant at some point during the year; these vacancies were attributed to career retirements,
medical -related retirements, returning to previous agencies, and moving out of the area. Hiring to fill
behind these positions was difficult due to low interest levels in law enforcement careers, which seems
to be a common challenge throughout the nation. The Department was able to hire three cadets early
to mid-way through the fiscal year; however, the training and onboarding is prolonged due to t he
academy and field training after academy graduation. Another two cadets were hired in late June and
are still in the academy. Additionally, the Department was able to hire three dispatchers which are all
still in training and cannot work shifts inde pendently.
As shown in the charts below, total overtime expended for the year was $1.5 million, which was about
15% more from last fiscal year. Overtime related to Shift Coverage increased due to vacancies in both
Patrol and Dispatch, as staff filled these scheduling gaps with overtime. The Patrol and Dispatch schedules
are completed in advance and anytime an employee is out unexpectantly (sick leave, WC leave, quits, etc.)
the schedule must be adjusted to cover the shift which results in overtime.
Table 26 - Overtime Analysis
A. Total Overtime Hours by FY
FY 20 -21 FY 21-22 FY 22 -23 % Increase from last FY
14,907 15,792 19,115 21%
B. Total Overtime Expenditures by FY
FY 20-21 FY 21-22 FY 22-23 % Increase from last FY
$1.1M $1.3M $1.5M 15%
Contract Services – The Administration and Investigations programs realized the majority of the savings
in Contract Services. The Department budgeted for a second mental health case worker and THMA has
been unsuccessful in filling the position. Additionally, the Department entered into a contract with a social
worker in April 2023, but in May the employee the position which resulted in savings from contract. With
the 2019-21 Financial Plan, there was a Significant Operating Budget Change approved to cover
anticipated police department costs related to Cannabis. Because the specific costs had n ot been
identified, the funding was put into “Other Contract Services”. This has remained partly unexpended for
the last several years because all the investigative work related to cannabis has been done in house
(through regular staffing budget). With the 2023-25 Financial Plan, staff moved this budget into staffing
to more accurately reflect where the expenditures were hitting.
Other Operating Expenses – The Department ended the year over expended in Other Operating Expenses
due to higher than anticipate d material and supply costs. In Patrol, the Department over expended Safety
Materials and Supplies by about $15,000. This was attributed to adding three new SWAT operators and
purchasing the related equipment (SWAT vests and uniforms which average about $3,500 per operator).
The Department also purchased duty vests for the Chaplain and two Community Services Officers, which
were not budgeted for. Due to savings in other non -staffing accounts, the Department was able to
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Police Department
purchase much needed items such as a ballistic shield for the detective unit, replace broken technology
at the dispatch center and laptops for sergeants (replacing desk top computers).
Utilities – The Department had savings in Utilities mainly attributed to an overestimation for PG&E ele ctric
costs. However, this was partially offset by Natural Gas being more expensive than anticipated. The
budget for FY 2023-24 has been adjusted to reflect actuals with projected increases included.
Police Department Revenue
Table 27 - Police Department Revenue
Overall Department revenue ended the year 17% higher more than budgeted. Staff made conservative
adjustments at mid-year based on total revenue received from July to November and some revenue
accounts were lower than expected. Alarm revenue increased from FY 2021 -22 which is likely due to
businesses coming back from the impacts of COVID and affording to pay for permits and false alarms. In
addition, in July 2022 the Department started contracting with a new vendor for alarm tracking services
and outreach for billing has been more consistent which contributes t o increased revenue. Police Issued
Parking fines were lower than anticipated which was partly related to SNAP being unable to enforce
neighborhood districts in September (which is typically a busy timeframe) due to a parking system delay
in issuing permit renewals.
FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
1 Accident Reports 4,333$ 3,400$ 4,884$ 1,484$ 44%3,400$
2 Administrative Citations - Safety 95,204$ 152,833$ 148,616$ (4,217)$ -3%125,833$
3 Alarm Permits - Contract (Police)80,204$ 90,000$ 180,790$ 90,790$ 101%90,000$
4 Collision Investigation 1,139$ 3,000$ 972$ (2,028)$ -68%3,000$
5 DUI Cost Recovery 25,622$ 20,000$ 28,138$ 8,138$ 41%20,417$
6 Miscellaneous Revenue 6,417$ -$ 10,031$ 10,031$ -$
7 Other Police Revenue 212,914$ 254,109$ 262,032$ 7,923$ 3%250,000$
8 Police Department Permits 5,027$ 5,100$ 3,826$ (1,274)$ -25%4,011$
9 Police Issued Parking Fines 80,969$ 70,000$ 53,115$ (16,885)$ -24%70,000$
10 Property Release Fees -$ -$ 1,181$ 1,181$ -$
11 Second Response Fees 1,437$ 1,200$ 482$ (718)$ -60%1,200$
12 Tobacco Permits 28,421$ 29,000$ 32,339$ 3,339$ 12%30,450$
13 Tow Release Fees 15,824$ 12,000$ 21,974$ 9,974$ 83%12,000$
14 Witness Fees 4,400$ 1,606$ 4,965$ 3,359$ 209%1,606$
15 TOTAL 561,909$ 642,248$ 753,345$ 111,097$ 17%611,917$
Police Revenue FY 2022-23
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Community Services Group Administration
Community Services Group (CSG)
Community Development • Parks & Recreation • Public Works • Utilities
The Community Services Group is comprised of the City’s four public -facing, service departments. The
administrative costs listed below are not specific to a department but benefit each department.
A Year-In Review and Accomplishments
The Community Services Group (CSG) focused on the production of core services, advancement of key
Major City Goals and objectives, identification of new departmental efficiencies, communication with the
public, policy research, and City staffing transitions, including multiple key leadership positions and
preparation and knowledge transfer. The CSG Ad ministration (CSG Admin) team consists of the Assistant
City Manager, the Business Services and Administrative Manager, and a part -time Administrative
Assistant. The CSG Admin team oversees the Analysts in the CSG Departments as well as the Infrastructure
Investment Program. The Infrastructure Investment Program and Analyst were moved from the Finance
Department to CSG in FY 2022-23 as the position collaborates closely with all the departments within
CSG related to development agreements and impact fee fund s that affect the group.
In FY 2022-23, the CSG onboarded and hired three new department analysts, as a result of internal
promotions of the previous incumbents. It also hired an Infrastructure Investment Financial Analyst and
completed the reclassification of the “Administrative Analyst” positions to “Business Analysts” to better
represent the job duties. As the CSG Analyst Team has begun to re -form, so have opportunities for
efficiency, communication, and collaboration among the four departments. The Analyst Team has been
working primarily on budgetary support as Fiscal Officers for their respective departments, but also
regularly partner work on CSG efficiencies and needs across departments. This has included: the creation
and presentation of a Budget 101 guide for CSG managers and supervisors to understand the basics of
how the city budgets, and a guide to reference and track their budgets; a strong focus on orientation and
onboarding materials and structure; policy work, such as the continued Abandoned Shopping Cart
Ordinance compliance and partnerships with local businesses; and analysis of processes and procedures
for tracking specialized budgets including the four Enterpri se Funds, Impact Fees, and Development
Services Designation.
CSG Admin also implemented a centralized resident engagement platform, now known as Ask SLO, to
organize and streamline public requests and inquiries to reduce the prior manual process; respond to the
community more effectively and efficiently; enhance the way citizen issues are identified, responded to,
and tracked (both internally and externally); and generate reports and data on requests, historical
responses, and response timeliness. This too l has been used most often by the CSG departments and helps
with efficiency and effectiveness in public communication and engagement with issues and was
instrumental in support with storm response. The team will focus on improvements and new ways of
utilizing the tool in the 2023-25 Financial Plan.
Additionally, CSG Admin began efforts to complete the Citywide User and Impact Fee Study that is
completed on a five-year basis. The last Citywide user fee and rate study was completed in 2017. During
FY 2022-23, the Business Services and Administrative Manager and an interdepartmental team completed
an extensive RFP process to select a consultant and began the kick -off of the study efforts. The study is
anticipated to be completed in FY 2023-24.
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Community Services Group Administration
CSG Admin also managed and guided the capital improvement planning process for the 2023-25 Financial
Plan, after significant efforts have focused on right sizing staff, changing some positions to better reflect
the services needed, and creating new processes so that collaboration can occur cross departmentally.
With all of the accomplishments of the CSG in FY 2022-23, the core focus of CSG remains to seam
Community Development, Parks and Recreation, Public Works, and Utilities together through policy,
fiscal, and col laborative support efforts to provide quality service to the community.
Table 28- CSG Administration Budget Variance Analysis
Staffing – This category had only minor variances on the individual line items and ended the year with
about 2% savings. The FY 2023-24 budget was increased to account for the transfer of the Infrastructure
Investment Financial Analyst budget from Finance to CSG. This position was costed out of CSG for only
part of FY 2022-23.
Contract Services – Contract Services expenditures were under budget by approximately $70,000 due to
the Community Workforce Agreement project needing less legal support than anticipated and project
delays (originally budgeted for $105,000 as a part of the 2021-23 Financial Plan’s Economic Recovery and
Resiliency Major City Goal). This budget also helped fund the Centralized Resident Engagement Platform,
Ask SLO and the Shopping Cart Containment Program. Economic Development provided funding for a
$60,000 incentive grant program rel ated to the Shopping Cart Ordinance for the first 12 businesses to
submit complete Abandoned Shopping Cart Prevention & Retrieval Plans, to be used toward physical or
electronic containment systems, in which all grants were given.
Other Operating Expendi tures – Expenses for the category were not significantly under budget, but the
remaining funds are mainly a result of having fewer expenses in staff parking and Education & Training
than budgeted.
FY 2021-22 FY 2023-24
Actual Budget Actual
Funds
Available % Budget
Staffing 614,821$ 599,179$ 588,627$ 10,552$ 2%687,514$
Contract Services 32,735$ 191,053$ 117,751$ 73,302$ 38%40,000$
Other Operating Expenses 7,332$ 13,021$ 10,829$ 2,191$ 17%13,020$
TOTAL 654,889$ 803,252$ 717,207$ 86,045$ 11%740,534$
CSG Administration
FY 2022-23
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Community Services Group - Community Development Department
Community Development Department
A Year -In-Review
During the second year of the 2021-23 Financial Plan, the Community Development Department (CDD)
made substantial progress in implementing its work programs and hiring and training staff under a new
organizational structure to support the community's economic success. Housing production continues
progressing and the department continues to facilitate large development projects . While the economy
has experienced turbulence and inflation, housing production and other permit activity remain strong.
After reassessing last year's deficit, this year, CDD’s total revenue anticipated was within 5% of
projections, equating to approximately $229,000 less than expected. As a result, the Department revenue
projections in FY 2023-24 are slightly less than was projected for FY 2022-23. The Department operated
under budget by 10%, equaling $920,885 of savings.
The CDD Administration team continues to provide process management and support for all the divisions
within the Community Development Department. The division also supports the department’s advisory
bodies and Major City Goal work programs. In addition to custome r service support via phone, an online
building inspection platform was launched to increase customer satisfaction and expedite the inspection
process. The platform is integrated into the Department’s Citizen Self -Service Portal and allows customers
to schedule inspections at any time while not being limited to the department’s hours of operation. The
division experienced recruitment challenges for the Supervising Administrative Assistant position since
last fiscal year. However, the position was filled and helps oversee the staff and projects within the
Administration division, such as digitizing a backlog of permitting documents for easier access to the City’s
customers in the future.
The Planning Division continues to receive high work volumes associated with planning entitlement and
building permit application reviews as well as the work related to homelessness. Significant Municipal
Code updates have been completed including an update to the Inclusionary Housing Ordinance, Objective
Design Standards for ministerial review of qualified projects, the Downtown Flexible Density Program
providing incentives for units under 600 square feet in size , and updates to the Cannabis and Subdivision
Regulations. Staff also implemented several state legislative programs that support “missing middle”
housing, including updates to the Accessory Dwelling Unit regulations, H.O.M.E Act (SB9), and the
Affordable Housing and High Road Jobs Act (AB 2011). Importantly, staff continued the processing of
affordable housing projects, which has led to a total of 148 new affordable units that were either entitled
or constructed in FY 2022-23. A majority of these efforts support the Housing and Homelessness Major
City Goal and additional accomplishments are outlined in the Acco mplishments section below .
The Engineering Division has played a major role in facilitating housing production in the City and supports
the Housing and Homelessness Major City Goal by providing plan check and mapping services for projects
such as the Orcutt Area subdivisions, Froom Ranch, and Avila Ranch. The Division has experienced
significant staff turnover, with the retirement of the Supervising Civil Engineer and vacancies of a Senior
Civil Engineer and Engineering Technician. A new Supervising Civil Engineer was hired in late February and
overlapped with the outgoing supervisor who retired at the end of March.
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Community Services Group - Community Development Department
The number of Building inspection requests have remained high, with over 6,600 inspections conducted
throughout the fiscal year. The team has become efficient in providing timely inspections due to effective
use of technology upgrades. The building inspect ion team was fully staffed until one inspector was
promoted into the Plans Examiner position in October 2022, and the team was supplemented by a
consultant inspector stationed at and funded by the San Luis Ranch Development. The Building Inspector
position remained vacant until the position was filled in June 2023. During this transition, the Building
and Safety Division utilized the recently promoted Plans Examiner to assist with inspection requests on an
as-needed basis. Additionally, the Building Inspection team had one Stormwater Code Enforcement
Officer who conducted over 1,100 active construction project inspections throughout the fiscal year to
help ensure the City’s ongoing compliance with the State’s stormwater regulations. Permit Counter staff
successfully integrated SolarAPP+ plan reviews into the City’s regular business process. This review service
allows residential solar project applicants to obtain instant, automated permits through the City’s online
self -service portal. Community Development received a $40,000 grant from the State of California to
implement this program and, since the start of the program on August 5, 2022, 268 automated solar
permits have been issued.
Accomplishments and Strategic Goal Updates
The Community Development Department continues to complete a number of work plan items that
directly support Major City Goals adopted by the City Council. The Department's strategic priorities for
the 2021-23 Financial Plan are to help advance the City’s overall goals tied to the Major City Goals,
Department Strategic Plans, and other priorities as they may arise.
Community Development Department Strategic Goals include:
1. Lead the implementation of the Housing and Homelessness Major City Goal
2. Support the implementation of the Climate Action and Economic Recovery Major City Goals
3. Provide excellent customer service to internal and external customers, and advisory body
members, in the processing of permit applications
4. Ensure a safe community by implementing Building and Safety Division programs, including Code
Enforcement
5. Monitor Growth, and support and update the General Plan policies and Zoning Regulation
standards to ensure coordination with all City Departments that provide municipal services for
the community.
Economic Recovery, Resiliency & Fiscal Sustainability :
By facilitating development projects and crafting and implementing certain policies, the Community
Development Department directly impacts the economic resiliency of the community and has contr ibuted
to the economic recovery efforts that are ongoing. Further, through the implementation of Development
Agreements and imposition of fees, the Department contributes to fiscal sustainability and ensures that
development “pays its own way.” The follow ing accomplishments are related to economic recovery,
resiliency, and fiscal sustainability:
1. Update of the Cannabis retail storefront operations and business overlay zones
2. Continued Processing and Permitting of Avila Ranch, San Luis Ranch, and Orcutt Area Specific
Plans
3. Intake and Plan Checking of Froom Ranch Improvement Plans
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Community Services Group - Community Development Department
4. Department KPI’s for processing cycle times exceeded targets, ensuring that the Department
continues to provide excellent customer service and does not impede development projects
5. Ef fective engagement with the Los Angeles –San Diego – San Luis Obispo rail corridor (LOSSAN)
and CalTrans on their projects within city limits
6. Changes approved to the Zoning Regulations in support of housing production and economic
development to allow certain projects to move forward with a more timely and streamlined
review of entitlements
7. Successful completion of the Tenant Improvement Permit Processing program designed to assist
businesses and property owners with reopening in response to the COVID pandemic
8. Collaboration with Administration on the recently adopted Economic Strategic Plan
9. Transparency Reporting dashboard added to the city website to enhance public awareness and
information related to processing times
10. Process improvements to the Department’s role in the stormwater program addressing
deficiencies identified by the Regional Water Quality Control Board
Diversity, Equity, Inclusion (DEI):
A number of the housing and homelessness related policy improvements and pla ns that the Department
is creating and implementing contribute to DEI efforts. By facilitating the development of a variety of
housing types, including “missing middle” housing, mixed use units, deed restricted units, and transitional
and supportive housi ng, the City is providing a variety of housing options for all members of the
community, as well as providing additional housing capacity to welcome new community members. The
following accomplishments are associated with this work:
1. The adoption of the Downtown Flexible Density Ordinance that expands housing opportunities
downtown by providing incentives for the development of units under 600 square feet in size.
2. General Plan Housing Element policy implementation that ensures that both market -rate and
af fordable housing units are intermixed within a development and promote equal housing
opportunities for persons of all economic segments as new housing projects are developed.
3. Ongoing regional planning policy/coordination efforts with agencies to ensure DEI is considered
in regional planning decisions .
4. DEI internal departmental coordination considerations
5. Facilitation of the sale and rental of affordable housing units through the use of the City’s Below
Market Rate Housing Administrator (Housekeys) to conti nue to ensure compliance with fair
housing laws in the affordable housing program .
Housing and Homelessness:
Community Development is the lead on implementing the Housing and Homelessness Major City Goal, as
the Department is home to the Housing Policy and Programs Manager and the Homelessness Response
Manager. In addition, the work of all of the divisions within the Department is directly related to the
facilitation of new housing or housing supporting infrastructure, the creation and implementation of
policies and plans related to housing, and the ongoing maintenance of community standards related to
safe housing. Some key accomplishments related to housing and homelessness are as follows:
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Community Services Group - Community Development Department
1. Update of the Inclusionary Housing Ordinance that increases the amount of affordable housing
units throughout the City through new development.
2. Issued building permits for 562 new housing units during the cale ndar year 2022.
3. Adoption of the City’s first Homelessness Strategic Plan that includes strategies for prevention
and connection to shelter through a housing continuum .
4. Adoption of an update to the Subdivision Regulations that provides flexibility for lot d esign that
will help increase homeownership opportunities.
5. Continued onboarding with the City’s Below Market Rate Housing Administrator (Housekeys) to
update and streamline affordable housing standards, guidelines, and procurement processes and
assisted in placing eligible applicants into rental and for sale units .
6. In the two-year financial plan cycle approved five new affordable housing projects that will
provide for a total of 257 new affordable homes. Allocation of $5.5M in Affordable Housing Fund
awards to support several important affordable housing projects .
7. Funded and permitted HASLO’s Anderson Hotel project that officially closed escrow and is under
construction that provides 68 low and very -low-income housing units and ensures the historical
preservation of this signature Downtown housing project .
8. Updated Homelessness Response team service agreement, Compassionate Assistance, Mitigation
and Prevention (CAMP) Standards and operationalized the standards through a survey 1,2,3 App
that is used in the field and allows for coordinated field team data tracking .
9. Reviewed and implemented legislation that has helped in addressing “Missing Middle” housing
within single-family neighborhoods through legislative updates to Accessory Dwelling Units and
Junior Accessory Dwelling Units State Laws, and implementation of the H.O.M.E Act (SB 9) and
the Affordable Housing and High Road Jobs Act (AB 2011).
10. Developed, piloted, and reset the Railroad Safe Parking Program .
11. Supported County application for a $13M Encam pment Resolution Grant for the Welcome Home
Village at the Department of Social Services site .
12. Kicked-off effort to establish a rotating safe parking program with community partners .
13. The annual strategic housing performance measure for affordable housing unit production
secured through entitlement or construction is set at 50, and CDD exceeded this target with an
actual of 148 units.
Climate Action, Open Space, and Sustainable Transportation:
CDD supports implementing the Climate Action and Economic Recovery Major City goals. The Department
facilitates the development of infill projects and has worked on policy changes to encourage the wise use
of resources and land. Several key accomplishments are highlighted below:
1. Adoption of the Climate Adaptation and Safety Element that provides for increased safety and
resiliency for SLO residents in the face of natural hazards and changing climate.
2. Implementation of the tree regulations and liaison work on the Tree Committee
3. Historic preservation monitoring and continued programing efforts by the City’s planners
4. Environmental project coordination, mitigation planning efforts, and monitoring
5. Update of the local Building Construction and Fire Prevention code to reference the 2022
California Building Standards
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Community Services Group - Community Development Department
6. Implementation of an automated, instant permit issuance business process for SolarApp+
applications (residential solar projects).
Figure 2- Total number of Solar Permits issued in FY 2022-23.
Challenges
The most significant challenge experienced by CDD during FY 2022-23 was staffing. The department
continues to monitor the increased scale of development that the City is experiencing and will continue
to focus on the recruitment of new staff, staff retention, and onboarding re cently hired staff.
Unfortunately, in some cases, these positions remain unfilled after multiple recruitments because
qualified individuals were not identified or did not accept offers. Although the department successfully
filled multiple retirement vacancies in FY 2022-23, such as the Community Development Director position,
the department is still experiencing an increase in vacancies which may necessitate the use of consultants
if recruitments are not successful for key positions for Planning and CDD Eng ineering. Currently, the
department has ten vacancies.
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Community Services Group - Community Development Department
Table 29- Challenges resulting from vacancies are summarized in the following table :
Vacancy Impact
Cannabis
Business
Coordinator
The Senior Planner was required to reprioritize work on the Subdivision Regulations Update in
order to accommodate cannabis related work.
Building Permit
Technician
The permit technician position was vacant through March of FY23, and resulted in delays in
responding to public inquiries, and delays in processing permit applications for review.
Building
Inspector II
The City is staffed with one fulltime Building Inspection Supervisor and three regular fulltime
building inspectors. The vacancy on the team made it difficult to manage time off requests and
required the supervisor to fill -in more than usual.
Plans Examiner
The lack of a full -time, in-house plans examiner caused the City to send more plan checks to
consultants. In some cases, this caused delays in getting minor modifications accomplished. The
vacancy also required the hiring of a consultant to work as the in -house plan's examiner during
open counter hours.
Associate
Planner (3)
There were three vacant Associate Planner positions for most of the fiscal year. This required
Senior Planners to perform more Development Review activities and has resulted in delays in
the delivery of policy projects, such as Missing Middle Housing.
Code
Enforcement
Technician
There have been two vacant Code Enforcement technician positions since January of FY23. This
has resulted in delayed responses to complaints from the public, fewer cases being closed, a nd
lower revenues associated with code enforcement fines.
Senior
Administrative
Analyst
This position was vacant for most of FY23. The Community Service Group obtained analyst
assistance from Parks and Recreation and Utilities; these duties were performed in addition to
their own department work.
Senior Civil
Engineer (2)
The position’s duties include review of subdivision maps and improvement plans, preparation
of Council Agenda Reports for approval of final maps and acceptance of subdivision
improvements, coordinating review and processing of as -built record drawings, man aging the
Division’s responsibilities within the City’s Stormwater Management Program, and performing
the duties of the Floodplain Administrator. Vacancies in these positions result in a decrease in
the level of service, and potential use of consultants to complete the work.
Engineer 1
The position’s duties include reviewing encroachment and building permits, planning
applications, and managing stormwater post-construction requirements during plan review and
ongoing monitoring of O&M self-certifications. Vacancy of this position results in challenges
related to timely review of applications and the provision of a high level of customer service.
Permit
Technician
The position’s duties include oversight of the front counter and main phone line representing
Public Works and the Engineering Division of CDD. The position reviews and issues
encroachment permits, transportation permits, parking meter bags, as well as initiating reviews
of public improvement plans, subdivision maps, and building permit routings. The position
coordinates meetings requested by applicants, and calculates and collects fees for plan reviews,
inspections, and development impact fees. Vacancy of this position results in customer service
challenges, and increased workload for others at the public counter.
Administrative
Specialist
(Homelessness)
This position was vacant for most of FY 23. The Homelessness Response Manager was required
to reprioritize work in order to accommodate Administrative Specialist related work program
tasks.
Homelessness
Response
Manager
This position was vacant for a portion of FY 23. The Housing Policy & Programs Manager was
required to reprioritize work on housing initiatives in order to accommodate homelessness
related work, including the development of th e Homelessness Response Strategic Plan.
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Community Services Group - Community Development Department
While hiring has been difficult, the following positions were filled in FY 2022 -23: the Plans Examiner,
Building Inspector I, Building Permit Technician I, Senior Administrative Analyst, Homelessness Response
Manager, one Associate Planner, Engineer I, and Permit Technician. Going into FY 2023-24, CDD has 40
approved regular positions and 31 positions were filled. T he hiring environment is unstable, and CDD
aims to fill key positions, such as two Senior Civil Engineers, the Assistant and Associate Planners, the
Cannabis Business Coordinator, the Urban Forest Program Coordinator/City Arborist (a new position to
CDD), and the Administrative Specialist. Community Development accounts for 8% o f staffing citywide.
Filling these positions will result in immediate improvements to customer service and project processing
times.
Table 30 - Community Development Department Performance Measures
Objective Measure 2022-23
Target
2022-23
Actual
Affordable housing production
Strategic Goal:
Housing
Number of affordable housing units secured
through entitlements or construction 50 148
Provide Excellent Customer Service
Strategic Goal:
Other Department Objectives
Customer survey response positivity rate 80% 83%
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% 86%
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% 77%
Building Inspections
Strategic Goal:
Economic Stability
Percent of inspections performed the next
working day 85% 99%
CDD’s performance measures are outlined in the table above. Despite the staffing challenges experienced
over the last year, the Department has met or exceeded the target for all performance measures due in
large part to dedicated and efficient staff, as we ll as technology and process improvements. In addition,
staff continues to work on efficiencies that will improve actual outcomes into the coming year. Hiring and
retaining staff into the next fiscal year will be crucial to continuing an upward trajector y on performance
measures.
CDD is committed to increased customer satisfaction and finding ways to streamline processes, allow for
online anytime building inspection scheduling, and increasing performance transparency. Increased
transparency and performance tracking is provided through online reporting of Key Performance
Indicators. The Department has created Dashboards that provide a ccurate expectations with the City’s
customers for permit processing timelines, code enforcement responses, and customer service results
including planning cycle times, average review times, and division statistics. In addition, the department
provides customers with the opportunity to complete a customer satisfaction survey, which is tied to
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Community Services Group - Community Development Department
performance measures. Additional internal efficiencies have materialized due to the performance data
collected, such as a commitment to data-driven decision-making, assessing workloads, setting realistic
expectations, and incorporating performance-based reporting and analysis for current and future budget
decisions.
With the recent technology upgrades, Building Inspection staff has been able to receive inspection
re quests through the online citizen self -serve portal. This new system has effectively managed inspection
requests, and as a result, staff implemented a new Key Performance Indicator (KPI) for the 2023 -25
Financial Plan. This new KPI includes the target goal for building development plan reviews to be
completed by predetermined due dates for at least 75% of all building permit reviews. The due dates and
cycle times vary depending on the type of project and the round of review. This new KPI measures a more
complex and resource -intensive part of CDD’s development review activities.
Table 31 - CDD Budget Variance Analysis
Staffing – Recruitment continues to be an issue , and the department had numerous vacancies throughout
the duration of the fiscal year (explained in depth in the “Challenges” section above). Every division
experienced staff vacancies, with the most affected divisions being CDD Engineering and Planning.
Community Development experienced a 10% salary savings due to vacancies in FY 2022-23. CDD used the
salary savings to hire on -call consultants or temporary/contract staff to perform the work wherever
possible to minimize disruptions or delays to customers due to staffing shortages.
Contract Services – Most divisions in the department had savings in contract services. Building & Safety
which was slightly over budget due to the transparency efforts that required additional information
technology consultants. The Engineering division was also slightly over budget because it had to hire on -
call engineering consultants to manage workload. It is also important to note that consultants were more
expensive than in previous years due to inflation and the high demand for these services. Over -budget
divisions were offset by savings due to completing key Housing Element Programs (Flexible Density
Ordinance, Subdivision Regulations Update) and the Homelessness Strategic Plan in-house.
While most of last year’s Housing & Homelessness Major City Goal work program items have been
accomplished in FY 2022-23, the Missing Middle Housing program has been phased. Staff has focused on
recent state legislation that impact the Missing Middle Program, including the H.O.M.E Act (SB9) and the
Affordable Housing and High Road Act (AB2011), in addition to revised ADU laws and implemented
programs to diversify housing types and opportunities through the Downtown Flexible Density Program,
the Subdivi sion Regulations update, and developing and partnering on programs for transitional and
permanent supportive housing opportunities. Additional Missing Middle incentives will be considered in
the development of a parking regulations scope of work to reduce barriers to housing construction, as
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing 5,193,982$ 6,099,171$ 5,477,787$ 621,384$ 10%5,853,933$
Contract Services 2,433,805$ 2,467,763$ 2,253,945$ 213,818$ 9%2,051,118$
Other Operating Expenditures 153,217$ 295,221$ 189,287$ 105,934$ 36%307,660$
TOTAL 7,781,004$ 8,862,156$ 7,921,020$ 941,136$ 11%8,212,711$
Community Development
Department
FY 2022-23
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Community Services Group - Community Development Department
well as with the Margarita Area and Airport Area Specific Plan updates. A specific Missing Middle
ordinance will be a final phase that will build upon previous work accomplished through a partnership
with a Cal Poly professor, Dave Amos, who used the Missing Middle Housing project as the basis for
instructing a fourth-year planning studio (CRP -411).
Other Operating Expenditures – Due to inclement weather, the City’s Fiscal Health Contingency Plan
policies, and numerous vacancies in the department, training budgets were not fully utilized . There were
also significant savings in credit card merchant fees due to the front counter being open to the public and
customers using checks instead of credit cards for their transactions.
Development Services Revenue
The actual revenue realized from the City’s Development Review programs was 5% below projections for
FY 2022-23. Development Services related fees produced over $6 million in General Fund revenue for
various activities supporting development, including planning, infrastructure plan check, subdivision map
checks, and building permits. The table below illustrates that the variance between the budget and actual
Development Review Fees totaled $228,658. FY 2023-24 revenue projections have been revised slightly
downward by approximately $378,000 taking into consideration this year’s slight shortfall. While actual
revenues were over-realized in half of the fee categories depicted in the chart below, CDD underrealized
Building permits, Code Enforcement fines, Development Review Fees, and Infrastructure Plan Check &
Inspections.
Table 32 - Development Review Revenue
Building Permits: Building permit fees collected were approximately 14% below projectio ns for the year.
This is attributed to factors such as inclement weather due to rainstorms, supply chain issues, inflation,
and increased interest rates that are impacting potential development projects. This shortfall resulted in
a reduction in actual re venue of approximately $416,000 this year. CDD anticipates a slight increase in
FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
1 Building Permits 3,165,038$ 2,921,700$ 2,505,378$ (416,322)$ -14%2,561,860$
2 Code Enforcement Fines 61,695$ 60,000$ 46,560$ (13,440)$ -22%79,617$
3 Development Review Fees 363,396$ 341,228$ 330,002$ (11,226)$ -3%387,008$
4 Encroachment Permits 295,643$ 323,340$ 418,019$ 94,679$ 29%324,437$
5 Engineering Development Review Fees 136,274$ 123,803$ 153,878$ 30,075$ 24%160,058$
6 Infrastructure Plan Check & Inspection 408,035$ 1,432,352$ 927,550$ (504,802)$ -35%970,693$
7 Plan Check Fees 1,280,615$ 1,116,311$ 1,371,473$ 255,163$ 23%1,180,266$
8 Planning & Zoning Fee 470,462$ 416,195$ 744,868$ 328,673$ 79%611,597$
9 TIPP- Contra Revenue Account (210,161)$ (81,559)$ (73,012)$ 8,547$ -10%-$
10 TOTAL 5,970,996$ 6,653,370$ 6,424,716$ (228,653)$ -3%6,275,536$
Development Review Fees FY 2022-23
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Building Permit revenue in FY 2023-24 due to approximately four projects pending building submittals, 29
projects in building review, and 22 projects currently under constructi on. Although revenues swing greatly
month-to-month, the Building and Safety Division ended the fiscal year strong and saw increased activity
in the summer months of May and June. Although not currently assumed in the forecast , staff is
monitoring the potential for a major revenue disruption due to a possible recession by tracking permit
applications. If necessary, adjustments will be recommended at mid -year.
Figure 3 - Building Permit Revenue by Month
Code Enforcement Fines: Revenues from Code Enforcement Fines were approximately 22% below
projections. In FY 2021-22, the City realized approximately $61,695, so the total budget for FY 2022 -23
was lowered to $60,000. However, only $46,560 of this projection was realized this fiscal y ear. This change
is largely due to two Code Enforcement Technician vacancies. Technicians typically issue citations for
violations identified through proactive enforcement. Code Enforcement Officers are resolving
neighborhood services violations only ident ified through complaints, taking them away from being able
to work on more complicated cases. In addition, because of a change in the law regarding how fees can
be administered, past -due citations are now sent to a collections agency instead of being place d as
property liens. This method has proven to be a less effective in recovering delinquent fines, especially
when citations are for small dollar amounts (as is the case with most of the City’s code enforcement
related fees). Finally, totals also reflect t he compliance with corrective notices sent by Code Enforcement
Officers that did not materialize into violations and fees.
Development Review and Engineering Development Fees: Development review fees were consistent
throughout the fiscal year and only 3% below the projection for the year. Similar to the building permit
submittals, there was an increase in Development Reviews in the month of June. These fees are collected
when projects with an entitlement go through the building permit process. The fees ref lect staff time
spent ensuring the building permit complies with the previously approved entitlement. Revenue from
Development Review fees is expected to be slightly higher next year due to significant updates to
municipal codes that resulted in a more str eamlined development review processing, allowing more
projects to be reviewed. Engineering Development Review fees are associated with the engineering
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Community Services Group - Community Development Department
team’s review of development projects. The team processed 211 reviews, equating to $153,878 in
revenue.
Encroachment Fees: Encroachment permits are issued for work in the City’s right -of-way by private
development. Encroachments are required for all curb, gutter, sidewalk, and utilities work in the right -of-
way. Encroachment Permits had a record -high earni ng months in May and June, equating to 29% more
revenue than was projected due to development tract projects. This fee is directly correlated with building
permits. .Figure 4 - Monthly Encroachment Permit Revenue
Infrastructure Plan Check and Inspection Fees: The most significant gap in the revenue projections for FY
2022-23 relates to infrastructure plan check and inspection fees. Although staff had identified projects in
progress that would generate revenue, some of those proje cts did not complete the plan review process
during FY 2022-23. This resulted in CDD receiving 65 percent of expected revenues or $927,550 in FY
2022-23. In addition, infrastructure plan check is a difficult fee to estimate, as it can be unevenly
distributed among a smaller number of large projects. If a few of these larger projects lag, or do not
materialize, this can have a large impact on realized revenues. Some projects are taking longer than
anticipated and will go into the next fiscal year(s). The number of new large projects coming in compared
to recent record years is being tracked and monitored to help anticipate future declines . Staff is aware of
the underrealized revenue for these fees and will reassess the projected revenue amounts in the futu re.
Plan Check Fees: Plan checks brought in more revenue than projected and high activity at the beginning
and end of the fiscal year explains the almost $1.4 million collected, which equated to 23% more revenue
than anticipated. The implementation of Sola rApp+ an automated, instant permit issuance business
process for residential solar projects, also boosted revenue. The App also reduced costs of consultant
services for solar related reviews in FY 2022-23 by roughly $33,000. Plan check services will be fully
budgeted at the beginning of the year instead of adjusting the budget as revenue is received. These
services are 100% cost recovered, and the administrative change has no fiscal impact on the budget.
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Community Services Group - Community Development Department
Figure 5 - Monthly Plan Check Revenue
Planning & Zoning Fees: Planning and Zoning fees collected were 79% higher than projected in FY 2022-
23 due to five months of high activity at the beginning of the fiscal year . Changes approved to the Zoning
Regulations in support of housing production and economic development allow certain projects to move
forward with a timelier review of entitlements. Fewer projects go to the Planning Commission and
Architectural Review Commission than have in the recent past. Projections of $416,195 in revenue for
Planning and Zoning fees materialized to $744,868, this fiscal year. Next fiscal year the Department is
estimating $611,597 in Planning and Zoning fees, in anticipation of a projecte d slow-down in the number
of applications submitted, likely due to continued elevated interest rates and economists' mentions of
recessionary concerns.
Development Services Designation
Resolution No. 10539 authorizes the City Manager to approve the appro priation and carryover of up to
75% of the over-realized development services revenue. This ensured that 100% of the department’s
operating costs related to development review were covered and promoted timely processing of
development permit applications t hroughout the life of applicable projects. Due to no over-realization of
development services revenue in FY 2022-23, there will be no revenue added to the Development Services
Designation balance.
Because a new Plan Review Policy was established that ensu res 100% cost recovery and allows the Finance
Director to directly appropriate revenues to pay for costs directly from the fee revenue collected, this
designation policy was eliminated with the 2023-25 Financial Plan. A balance of $464,136 remains in the
assigned designation account for use on the intended purpose; however, once drawn down, the account
will be eliminated.
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Community Services Group – Parks and Recreation
Parks & Recreation Department
A Year In Review
In order to support th e City-wide effort to reduce expenditures under the Fiscal Health Contingency Plan
that was activated in January 2023, the Parks & Recreation Department reduced spending in a variety of
areas, held some vacancies open to maintain salary savings, and paused spending on non -essential
purchases. While the Department ended the year with slightly lower -than-targeted revenue (which was
expected due to the winter storms), expenditure budget savings more than offset the overall impact on
the General Fund. It is imp ortant to note that FY 2022-23 expenditures do not reflect normal spending
levels for the Department.
The Community Services Division brought the community together with popular pop -up events like the
Jack House & Gardens Spring Concert Series and Monday Meet-Ups. The September Scramble returned
with more than 650 participants, and the Spring Fling and Boo Bash events offered seasonal fun and
festivities to local families. Senior programming reached new heights with popular events like Around the
Town, Senior Trivia, local excursion events, and hiking groups. Staff expanded Youth Sport Clinic offerings,
holding clinics from September through May. The City partnered again with YMCA on the youth basketball
league, expanding participation to 65 teams; the futs al league returned to pre -pandemic numbers with
30 teams this year; and Junior Giants baseball league participation exceeded initial capacity with over 240
participants, thanks to the support of over 40 volunteer coaches. Adult softball continued to run wi th
three seasons and averaged 55 teams per season, and the monster Skate Series held a huge finale for our
local “shredders” at the SLO Skate Park in May. The Department hired its first -ever full -time Volunteer
Coordinator in January to oversee and grow th e City-wide volunteer program. In May, the City Council
approved the conversion of this role from contract to regular full -time, ensuring the future success of this
important community need.
Youth Services provided quality childcare to the community at a ll five (5) elementary school sites located
within the City (C.L. Smith, Hawthorne, Pacheco, Sinsheimer, and Bishop’s Peak). Staff expanded
programming to include a new TK/Kinder program during the school year in support of the new school
district format, a summer Kinder program, and tailored afternoon summer programming to meet the
needs of the community and school district. In addition, a new three -week summer sports camp provided
childcare to over 100 participants during the weeks when Youth Services pro gramming was not in session.
Working in partnership with San Luis Obispo Museum of Art (SLOMA), the Department commissioned two
murals and two temporary sculpture exhibits; repaired and reinstalled the Flames of Knowledge sculpture
at Emerson Park; and se cured a new sculpture for the Tank Farm/Orcutt Roundabout.
Facilities continued to support the Downtown Dining program in Mission Plaza by setting up daily outdoor
dining opportunities to the community.
Aquatics offered consistent summer programming, i ncluding its wildly popular Super Rec Saturdays –
expanded recreational swim days for the community. Staff updated safety equipment, added new
inflatable features, and continued to be the main SLO County provider of lifeguard training sessions to
residents countywide.
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Golf staff maintained the 26-acre, 10-hole Laguna Lake Golf Course, offering regular programming outside
of the storm-related closures in the winter, and continued its remediation of the on -site Pro Shop. Updates
to the course included new course signage a nd new golf carts.
Ranger Service constructed new trails at Righetti Hills Open Space and Irish Hills Open Space and
continued to grow its educational programming with environmental outreach events, three sessions of
Junior Ranger camp, and Ranger-led i nterpretive hikes, including the City’s first Ranger -led bilingual hike
in May. The division also continues to dedicate resources for fire fuel management and to clean up trash
and debris in the City’s Open Spaces and creeks.
Park planning for the Righe tti Ranch Parks system kicked off with a Community Forum in April along with
a community-wide survey that advised the initial design of a neighborhood park, linear park and pocket
park. Additionally, the initial surveying and design process for Emerson Par k Prop 68 State Grant
commenced in the spring.
Accomplishments and Strategic Goal Updates
1. Expanded childcare services at five elementary school sites located within the City limits (C.L.
Smith, Hawthorne, Pacheco, Sinsheimer, and Bishop’s Peak), collabora ting closely with San Luis
Coastal Unified School District (SLCUSD); and offered Teacher Workday camps at the five sites to
accommodate more children.
2. Expanded summer Youth Services programming to meet community and school district needs
with additional camp options, including a new Kinder summer program with 60 daily participants;
and augmented Summer Fun Day Camp to accommodate 300 participants per week (up from 120)
3. Added two new trails (Quarry Trail at Righetti Hill, and Bog Thistle Extension at Irish Hills) and
maintained 64 miles of trails and trailheads throughout the City’s Open Space
4. Hosted more than 30 environmental education events
5. Continued the popular Downtown Dining program in Mission Plaza, offering outdoor dining
opportunities to the communi ty to support economic recovery
6. Oversaw increasingly popular Youth Sports Leagues (Basketball and Futsal), the largest -to-date
Junior Giants league participation, and expanded Youth Sports Clinics, including a three -week
Summer Sports Camp
7. Offered 43 new s enior events, including Around the Town, Senior Trivia, local excursion events,
and guided hikes
8. Held 20 Community Events, including: Monday Meet -Ups, Spring Concert Series, Boo Bash, Spring
Fling / Egg Hunt, Leprechaun Lost, September Scramble, and Outdoo r Movie Night
9. Oversaw an increase in permitted special events from the prior year and the return of rentals to
the Ludwick Community Center after an extended closure of the space
10. Renovated Hole 9 of the Laguna Lake Golf Course, and added new carts to the c ourse
Challenges
Recruitment and staffing posed the greatest challenges for the Parks & Recreation Department. Although
hiring has gotten easier since the height of the pandemic, a national lifeguard shortage, the City’s ability
to provide competitive wages, and overall labor market issues have continued to impact recruitment and
retention at the SLO Swim Center. The recruitment difficulties in the first half of the year for the Aquatics
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Community Services Group – Parks and Recreation
Specialist position posed additional challenges to programming and p roviding critical administrative
functions; however, the division was still able to optimize its programming to meet community needs.
Youth Services experienced recruitment and retention challenges and space limitations at program sites.
Community Services struggled to ensure sufficient staffing for youth and adult sports, and the absence of
a recreation coordinator in late spring amplified these challenges. A restructuring of the Recreation
Coordinator position to focus primarily on sports, and the move to more universal recreation leader
supplemental positions are anticipated to provide greater stability in FY 2023 -24. The Ranger Service
division completed the reclassification process to move to a Skill -Based Pay model beginning July 2023 to
better retain qualified staff and incentivize training skills for performance.
Winter storms forced the Laguna Lake Golf Course to close a total of 53 days from January through April
and caused damage to the bridge which connects the course. The course also experienced countless
irrigation leaks due to its aging infrastructure. Infrastructure improvements are being considered for
future capital improvement plans. The Pro Shop facility is currently being remediated due to flood damage
from December 2021, and is operating out of a temporary on-site office trailer; it is set to reopen in FY
2023-24. The Golf Course struggled with cash -only payments for the first quarter and a half of the year
but began accepting credit cards through a City -approved vendor in October 2022.
Table 33 - Parks and Recreation Performance Measures
Objective Measure 2022-23
Target
2022-23
Actual
Provide inclusive, accessible
programming that serves the whole
community.
Strategic Goal: Programming is Directed
to Diverse Users (P&R Strategic Plan
Goal), DEI and Economic Vitality MCGs
# of Department Community Events 20 22
# of non -profit permitted Facility Uses 120 290
# of program registrations 3,500 5,371
# of program offerings 320 480
# of childcare spots filled/offered 1,100/1,100 1,834/1,834
# of children receiving subsidy
51 CAPSLO
27 City
Scholarship
64 CAPSLO
27 City
Scholarship
In Coordination with Public Works,
engage the public to prioritize new and
revitalized Recreational Amenities
Strategic Goal: Expand Parks & Facilities
(P&R Strategic Plan Goal), MCG
Economic Stability
# of public outreach meetings 6 221
# of updated or new parks and amenities in
process 5 9
Creates and fosters a sense of
community through citizen involvement
Strategic Goal: Maximize Community
Resources & Collaborations (P&R
Strategic Plan Goal)
# of volunteers/hours 400/1200hrs 346/1266hrs
# of temporary Public Art or Cultural Art Events 5 5
Leverage technology to engage the
community and promote program
offerings
# of Instagram followers 7,900 7,015
# of Facebook followers 5,200 5,577
21 Public outreach meetings are focused on the development of new parks. Capital Improvement Project delays
resulted in the occurrence of only two public outreach meetings during 2022 -23.
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Community Services Group – Parks and Recreation
Objective Measure 2022-23
Target
2022-23
Actual
Strategic Goal: Programming is Directed
to Diverse Users (P&R Strategic Plan
Goal)
Open Space Preservation and
Enhancement
Strategic Goal: Nurture Open Space (P&R
Strategic Plan Goal), Climate Action MCG
# of miles of Open Space trails maintained 61.75 64
# of staff hours dedicated to fuel reduction 2,500 3,875
# of encampment site clean-ups removed from
Open Spaces
60
84
Variance Analysis
Table 34: Parks & Recreation Expenditures
Staffing – The Facilities division experienced salary savings of $23,000 due to fewer indoor rentals and the
vacancy of a Facilities Specialist from May to June. In Youth Services, temporary salaries were lower than
usual (nearly $127,000) because the division was not operating at full staff capacity due to recruitment
and retention challenges. Short-term vacancies in the Program Assistant role and with a school Site
Director role resulted in a salary savings of nearly $36,000. In Community Services, the delayed requisition
of the Volunteer Coordinator contract position (now a regular FTE) that was budgeted during the FY 2021 -
2022 Mid-Year Review generated nearly $33,000 of savings, and the temporary vacancy of a Recreation
Coordinator for the end of May and part of June ($13,000 in savings) led to the need for additional
supplemental hours ($4,000 over budget). Two full -time Ranger vacancies for part of the year (totaling
$67,000), and a surplus in the Open Space technician budget due to a technical error in the City’s
budgeting software ($22,000) contributed as well to the Department salary savings.
Contract Services – While increased field trip bussing costs drove up Contract Services costs in Youth
Services ($18,000 over budget), savings in Community Services ($45,000) with many smaller -scale, lower
cost events, and other divisional savings throughout the Department allowed for a total surplus of over
$48,000. Since the school district required summer camp to be relocated and local transit services were
not available, the City was required to charter a bus multiple times a week to transport campers on field
trips. The Department has adjusted its budgets appropriately for FY 2023 -24 to help account for future
unexpected exp enditures.
Other Operating Expenses – Youth Services ended the year with savings of $11,000 for childcare site
furniture and fixtures, as no furniture or furnishings required immediate replacement. The Golf Course
had savings on Chemicals ($13,000) and C onstruction Materials (nearly $5,000) as it was able to meet
immediate needs with existing supplies. Community Services had savings on facility rental costs ($8,000)
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing 4,229,104$ 4,659,642$ 4,233,128$ 426,514$ 9%4,744,608$
Contract Services 283,723$ 362,619$ 300,629$ 61,991$ 17%359,747$
Other Operating Expenditures 439,675$ 474,559$ 423,175$ 51,384$ 11%422,165$
Utilities 154,331$ 119,895$ 134,947$ (15,052)$ -13%149,086$
TOTAL 5,106,833$ 5,616,716$ 5,091,878$ 524,837$ 9%5,675,606$
Parks & Recreation
FY 2022-23
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Community Services Group – Parks and Recreation
as usage needs fluctuate, and savings on program supplies ($8,500) as fewer supplies neede d replacement
than expected. These accounts make up most of the savings in Other Operating Expenses for the
Department.
Utilities – Due to the aging irrigation infrastructure at the Laguna Lake Golf Course, the necessary repair
of numerous water leaks and significant pipe and sprinkler mechanism replacement over the fiscal year
created unforeseen overages in overall water use. With every repair, thousands of gallons of water must
be drained from the system to reduce pressure. In all, water expenditures exc eeded budget by more than
$20,000. This was partially offset by limited use of well water for the Golf Course, which draws from
Electric Service, in addition to the limited use of irrigation between January and March due to the storms.
Parks & Recreation Revenue
Table 35: Parks & Recreation Revenue
FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
1 Facilities
2 Indoor Rental & Use Fees 30,115$ 65,100$ 39,981$ (25,119)$ -39%65,100$
3 Library Rental 4,780$ 16,290$ 3,422$ (12,868)$ -79%6,500$
4 Special Events Insurance 7,877$ 10,000$ 10,478$ 478$ 5%12,000$
5 Outdoor Rental & Use Fees 66,494$ 129,960$ 103,606$ (26,354)$ -20%135,003$
6 Special Events App/Permit 30,653$ 33,293$ 33,186$ (107)$ 0%30,000$
7 Youth Services
8 Youth Services Camps 167,010$ 154,275$ 94,851$ (59,424)$ -39%155,980$
9 Youth Services Childcare 630,369$ 639,806$ 700,427$ 60,621$ 9%663,616$
10 Community Services
11 Adult Athletic Fees 103,148$ 154,362$ 100,508$ (53,854)$ -35%161,598$
12 Youth Athletic Fees 63,619$ 55,000$ 93,134$ 38,134$ 69%57,750$
13 Special Events - City Sponsered 149$ 13,583$ 1,345$ (12,238)$ -90%3,400$
14 Instruction Fees 84,501$ 97,830$ 76,158$ (21,672)$ -22%102,722$
15 Aquatics
16 Swim Instruction Fees 86,617$ 75,108$ 102,562$ 27,454$ 37%82,700$
17 Aquatics Daily Use Fees 89,743$ 115,175$ 86,050$ (29,125)$ -25%121,000$
18 Multi Day Swim Passes 59,898$ 44,383$ 66,559$ 22,176$ 50%55,000$
19 Therapy Pool Fees 3,642$ 16,304$ 5,270$ (11,034)$ -68%16,000$
20 Golf
21 Golf Greens Fees 178,024$ 235,180$ 167,997$ (67,183)$ -29%220,000$
22 Golf Lesson Fees 159$ -$ 699$ 699$ -$
23 Golf Rental Fees 6,070$ 11,232$ 5,140$ (6,092)$ -54%6,000$
24 Driving Range Fees 8,860$ 12,900$ 10,901$ (1,999)$ -15%13,000$
25 Golf Cart Rentals 14,050$ 29,675$ 19,424$ (10,251)$ -35%25,000$
26 Other Revenue
27 Sales Taxable 11,852$ 10,000$ 7,242$ (2,758)$ -28%10,000$
28 Other Revenue 40,804$ 72,867$ 56,539$ (16,327)$ -22%74,000$
29 Junior Ranger Camps 5,808$ 4,982$ 8,361$ 3,379$ 68%5,230$
30 TOTAL 1,694,241$ 1,997,305$ 1,793,843$ (203,462)$ -10%2,021,599$
Parks & Recreation Revenue FY 2022-23
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Community Services Group – Parks and Recreation
Facilities: Permitted event revenue was evenly aligned with target revenue. However, Indoor Rentals and
Library Community Room Rentals have still not recovered to pre -pandemic levels, and outdoor rental
reservations were impacted by the winter storms in January to Ma rch. Prior to the pandemic, many
outside groups held regular events at the City’s indoor facilities. The Department has noticed that majority
of these groups found alternative venues post -pandemic. The department is working with the
Communications division to actively market its indoor facilities to bring these back to pre -pandemic levels.
Additionally, facilities were often booked by the City, the County or other governmental agencies, at no
cost.
Youth Services: Youth Services Childcare revenue during th e school year exceeded its target by over
$60,000 as enrollment was at capacity throughout the year, and year -over-year revenue budget increases
were conservative due to the uncertainty of potential facility use and the impact of SLCUSD’s program
structural changes from FY 2021-22 to FY 2022-23. At the same time, Youth Services Camps revenue was
$60,000 under its target as July summer camp registration revenue was managed through SLCUSD in July
and reimbursed to the City; previously it had been collected th rough the standard City registration process
in June. This variance is due to a timing issue, and the revenue will be reflected in FY 2023 -24. It should
not lead to any variances moving forward unless the process changes again.
Community Services: While adult athletic fees were not particularly low when looking at historical actuals,
they are low compared to the budget projections because of planned additional and expanded adult
athletic programming. Unfortunately, staff did not have the bandwidth to activ ate these, along with a
shift of priorities to support other community programs, leading to a shortfall of nearly $54,000. At the
same time, a very strong year for youth sports ($38,000 over target) based on high attendance for youth
basketball, futsal and sports clinics made up for much of this deficit. Instruction Fees (contract class
registrations) were heavily impacted by the winter storms (January – March), and summer enrollment
was down due to the free summer programming provided by SLCUSD. Unfortunat ely, the Department
was not informed of this change until January 2023, after the approval of FY 2023 budget adjustments at
Mid-Year. City-Sponsored Special Event revenue missed targets as the only fee -based event offered was
the September Scramble (other events offered to the community were free).
Aquatics: Daily Use Fees and Multi Day Swim Passes landed slightly ($7,000) below targets, but at -capacity
swim instruction enrollment pushed Swim Instruction Fee revenue ($27,000) over target. At the same
time, Other Pool Revenue shortfalls from fewer pool rentals, and fall staffing -related closures and winter
storm closures impacts resulted in an $11,000 shortfall in Therapy Pool revenue.
Golf: Despite a busy and profitable spring and early summer, Golf Course r evenue was severely impacted
by 53 days of storm-related closures between January and April. Additionally, the Pro Shop was closed for
construction due to flooding and remediation efforts, which limited sales, and the absence of a credit card
processing system until October also impacted revenue.
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Community Services Group – Public Works
Public Works Department
A Year In Review
In order to support the City -wide effort to reduce expenditures under the Fiscal Health Contingency Plan
that was activated in January 2023, the Public Works Department reduced spending in a variety of areas,
held some vacancies open to ensure salary savings, and paused spending on non -essential purchases. The
Department ended the year with expenditure budget savings of about 7%. Departmental efforts were
focused on achieving key objectives with emphasis on safety and economic resiliency, following multiple
pandemic years. Inflation rates and supply chain issues have significantly impacted operating and capital
costs.
The Public Works Department continued to provide core services to the community by maintaining the
City’s parks system, community facilities, roadways, maintaining and replacing critical infrastructure,
enhancing pedestrian safety and mobility, and maintai ning the City’s urban forest. The Department’s need
to pivot towards emergency storm response overwhelmed overall workload and operations by having to
continue managing and responding to both. Beginning in January 2023, storm cleanup efforts distressed
administrative and maintenance staff’s regular operations workloads. The City’s engineering resources
were also redirected to storm projects. This remained a challenge through the end of the fiscal year and
will continue into the 2023-25 Financial Plan.
The City launched the Ask SLO platform in September of 2022, which allows community members to
submit requests online for suggested improvement within the city. This heavily impacted the Public
Works Department’s workload; on average, 60% of the requests sub mitted through AskSLO are assigned
to the Public Works Department to address.
Following the completion of several organizational studies related to Urban Forest Services and CIP
Engineering, the Department has implemented portions of the recommended proc ess improvements in
staffing, performance tracking, financial management, and delivery of services. These changes resulted in
more efficient operations and better overall interdepartmental workability. This work is not complete
and will continue into the next fiscal year.
Accomplishments and Strategic Goal Updates
The Department continued to address Major City Goals as outlined in the 2021‐23 Financial Plan. The
Department sustained efforts to address and invest in critical infrastructure through the City’s Capital
Improvement Plan (CIP) by allocating nearly $69 mi llion toward the maintenance and preservation of City
assets across all funding sources. The CIP Engineering program also made strides following an
organizational assessment for process improvements and programmatic efficiencies. In addition, the
Transportation and Planning Program successfully implemented the objectives from the Active
Transportation Plan, including pedestrian and bicycle improvements and street enhancements to improve
traffic safety.
During FY 2022-23, several major projects were completed. It is important to note that although some
capital projects are highly visible to the community, others are not, including water and wastewater
system improvements, open space maintenance, silt remo val, information technology maintenance,
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Community Services Group – Public Works
facilities maintenance, and fleet procurement. The list below highlights some of the major
accomplishments in the CIP during the fiscal year:
1. Orcutt Tank Farm Roundabout
2. Roadway Sealing 2022
3. Curb Ramp Improvements in Laguna Lake and Foothill/Chorro neighborhoods (Pavement Area 6
and 7)
4. Electric Bus Procurements
5. Parks and Recreation Interior Office Rehabilitation
6. Pedestrian Crosswalk Beacon at Ramona
7. 40 Prado Road Bus Shelter Relocation
The Urban Forest Program continued to place focus on the preservation, maintenance, and enhancement
of the City’s urban forest. In 2022, the department implemented the City’s first preventative maintenance
pruning schedule in many years, which has been operating with great success. Maintaining trees from a
preventative standpoint is critical for safety and reducing risk during wind and rain events, which were
prevalent in the past fiscal year.
The Department continued to deliver core services by enhancing community and downtown clea nliness
through sidewalk scrubbing, street sweeping, parklet maintenance, and ongoing maintenance of parks
and facilities utilized by all residents, businesses, and visitors. An important highlight this year was the
installation of new “big belly” smart trash receptacles that assists with the trash collection and trash
containment process making the downtown area cleaner.
Challenges
The Department experienced challenges in the areas of staffing, cost escalation, supply chain issues, and
keeping up with maintenance of aging infrastructure. Staffing proved to be a challenge over the fiscal year
both in maintenance operations as well as the capital improvement engineering programs. In many
instances, staff relied on contract services and consultants to ensur e adequate service levels to meet City
goals and to deliver key projects. This past year, nearly all programs experienced multiple prolonged
staffing vacancies that were a result of retirements, promotions, and resignations. Filling these vacancies
has be en challenging as there are limited candidates that apply for these positions. This has resulted in a
higher level of contract services needed to manage workload over the last fiscal year and will likely
continue into the next year. It should also be not ed that hired contract services vendors are often facing
similar staffing issues or larger than typical workload demands which limits responsiveness.
Project and core service delivery came with major challenges in the areas of cost escalation and supply
chain shortages. The City experienced major increases in the price of fuel for the City’s fleet, the cost of
natural gas tripled from December 2022 to January 2023, electricity costs increased 3.5% from March
2022 to January 2023, and chemicals used for mai ntaining the fleet and swim center have shown varying
increases. Metal prices have increased 5-15% within the last fiscal year affecting many purchases,
including items to maintain streetlights and signals, fleet parts and vehicles prices, electric vehicle
charging infrastructure for the City transit program, and maintenance parts for buildings and parking
structures.
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Community Services Group – Public Works
Homelessness has affected the entire nation including the City, including the Public Works Department
specifically in the Parks Maintenance and Streets Maintenance programs due to their increased response
required to address uncleanliness in the City’s Parks and downtown core. The Department receives a high
volume of requests through the AskSLO platform that are tied to cleaning up homeless e ncampments in
creeks, parks, streets, and public bathrooms. The contract services budget for many programs within the
department has increased costs as a result of this work effort associated with cleanup work, replacement
of damaged infrastructure, as wel l as implementing infrastructure improvements that are more robust
and could reduce the likelihood of future of homelessness related vandalism.
Damage to City property impacts the Department annually; however, in the past fiscal year, the non -
recoverable cost associated with property damage has resulted in large expenditures in many programs,
including Signals and Street Lighting, Parks Maintenance, and Facilities Maintenance programs. Often, the
responsible party that damaged the property is not found, wh ich results in substantial impacts to the
operational budget, which is predominantly intended for preventative maintenance and standard
operations and not asset replacement.
The City received historic precipitation totals from the 2022-2023 winter storms , resulting in flooding
around the City. In January 2023, the City declared a “State of Emergency” and activated its Emergency
Operations Center (EOC) and Department Operations Center (DOC) to respond to the impacts from the
storms. These storms presented risks to the community and were managed by the City’s storm response
efforts that operated 24 hours a day to reduce impacts to life and property. The cost of the storms had an
impact to many programs that incurred unanticipated costs for materials and over time. These additional
costs are subject to possible future FEMA reimbursement.
Table 36 - Public Works Department Performance Measures
Objective Measure 2022-23 Target 2022-23 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 76
Bicycle network in total
miles (Class I/II/III/IV) 14.7/31.0/24.8/4.0 14.5/31.3/25.3/1.5
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 12,970 12,970
Total acreage of park
inventory 583 58422
22 The 2023-24 park acreage inventory includes the addition of North Broad Street Park and Parks A, B, and C in Avila
Ranch.
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Community Services Group – Public Works
Objective Measure 2022-23 Target 2022-23 Actual
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 23 $65M $97M24
Table 37 - Public Works Operating Budget Variance Analysis
Staffing – There were 9% savings in the staffing category due to vacancies following the FY 2022 -23 hiring
chill, normal turn over, and retirements. As a result of continued program organizational studi es (CIP,
Urban Forestry), the Department continued to fill new positions approved during the 2021 -23 Financial
Plan; however, as these studies were conducted there was a lag period in hiring that led to savings. While
the Department experienced vacancies, there was an increased need to utilize contractors or consultants
to deliver a variety of services.
Contract Services – There were minimal savings realized in contract services with the Department
expending approximately 97% of its contract services budg et. Some programs with excess spending in
contract services were offset by reduced spending in other operating programs. The Signals and Lighting
Program was over budget by $50,020 largely due to damage to City property by vehicle accidents and this
overage was offset by the Swim Center, Parks Maintenance, and Public Works Administration programs
having savings within their cost centers accumulating just over $70,000.
Other Operating Expenses – The Department expended approximately 93% of its other operating
expenses. Throughout the Department, other operating expenses fluctuated drastically over the year
primarily due to cost escalation and modified operations as a result of storm response. Some programs,
including Fleet, experienced major increases in fuel costs while the department, as a whole, realized cost
savings in other areas to offset cost escalation.
Utilities – Utility expenditures vary considerably year-over-year and the budget is based on estimated
usage and projected rates for the year. A 4% variance is very minimal for this category. The unanticipated
natural gas price spikes in FY 2022-23 caused that budget line to go over, but lower electricity rates
23 Includes all CIP projects and funding including Utilities, Transit, Parking, Public Works and IT, among othe rs.
24 Accounts for all CIP funds managed. In FY 2022-23 large expenses were seen in the Sewer Fund estimated at $28 million,
largely due to the Water Resource Recovery Facility Upgrade project.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing 9,916,115$ 11,185,877$ 10,187,359$ 998,519$ 9%11,013,029$
Contract Services 1,946,852$ 2,715,734$ 2,633,518$ 82,216$ 3%2,133,180$
Other Operating Expenditures 1,584,039$ 2,133,791$ 1,983,022$ 150,770$ 7%2,026,836$
Utilities 2,052,754$ 2,410,180$ 2,320,454$ 89,725$ 4%2,535,002$
TOTAL 15,499,759$ 18,445,583$ 17,124,353$ 1,321,230$ 7%17,708,046$
Public Works
FY 2022-23
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Community Services Group – Public Works
achi eved through the Central Coast Community Energy (CCCE) program helped offset the overages. The
FY 2023-24 budget has been adjusted to reflect new rate assumptions and usage estimates .
Page 96 of 182
Parking Fund
Parking Fund
A Year In Review
Parking Services continued its modernization efforts over the last fiscal year by replacing outdated coin-
only parking meters with credit card capable meters in the lower tier rate zone along the periphery of
downtown and replacing single space meters with multi -space pay stations in the downtown core. The
Program also worked in coordination with other staff and contractors to put the Cultural Arts District
Parking Structure (CADPS) project out to bid. The Parking Fund ended the fiscal year with revenue above
projections and expenditures below budg et putting it in a better financial position in advance of bonding
for the new CADPS construction costs. The Parking Fund did receive $700,000 of one -time American
Rescue Plan Act (ARPA) funding to offset the limited continuation of the first -hour free parking in the City’s
three existing parking structures during fiscal year. This benefit was discontinued on June 30, 2023, and
replaced with the Park Local Pilot Program, which is spe cifically designed to benefit local community
members.
Accomplishments and Strategic Goal Updates
Parking Services and the Finance Department continue to lead the effort to secure long -term debt
financing for the new CADPS. Site preparation began in Spri ng 2023 with the demolition of three
residential structures located on the project site. The project represents a significant investment in the
downtown area and will support the SLO Repertory Theatre, adjacent businesses, Mission College
Preparatory High School, and visitors alike.
Parking Services developed and received approval to implement a local parking incentive program
branded the ‘Park Local Pilot Project’ which extends the first hour free in the parking structures to County
residents that register with the City. The Parking Services Program also implemented a gateless parking
system in the 842 Palm Street parking structure, which went live in July 2023. Staff continues to work with
vendors and other City staff to fine -tune the system. Once the 842 Palm gateless parking structure is
operating as intended and meeting community needs, gateless installations will be implemented at the
City’s two other parking structures.
The Program was also able to update the Access and Parking Management Plan, whi ch is the City’s guiding
document regarding parking and curb access. The last comprehensive update occurred in 2001 and no
longer aligned with the City’s goals and objectives for access and demand management in the downtown
and residential areas.
The Parking Services Program also transitioned to a new parking enforcement and digital permit vendor
during this past fiscal year, which allows the program greater resources and provides a better customer
experience. The Program also led efforts and communication around the free holiday parking that
encourages downtown activity and commerce during the holiday season. Staff also coordinated efforts
with the transition of office space from Parking Services to the Mobility Services Office.
Throughout the fiscal year, staff have supported many efforts associated with the Safe Parking Program
at its current location at Railroad Square and the transition to a new temporary location, potentially at
Palm Street near the Veterans Hall. Staff have also worked closely with residents and businesses to
address camping and vehicle abandonment issues throughout the community.
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Parking Fund
Challenges
Communication and project delivery were the biggest challenges faced by Parking this last fiscal year.
Parking Services is three years into it s modernization efforts and communication with the community
throughout the process has required a significant work effort. Projects like the single space meter
conversion and transition to a gateless parking system in the structures have taken longer than
anticipated. Adjusting the technology used by the Parking Services Program to align with community
needs and expectations has caused some integration issues amongst the various vendors used to
administer and enforce the different parking options, but staf f continue to be dedicated to ensuring
success.
Parking Fund Expenditures
Table 38 - Parking Fund Operating Expenditures
Staffing – Turnover in multiple full -time positions resulted in staffing savings. The Parking Services
Supervisor position was vacant for over half of the year, the Parking Meter Repair Worker position was
vacant for half of the year, the Parking Enforcement Officer II position was vacant for 10 months, and one
of the Maintenance Worker positions was vacant for two months. The Fund was over budget in temporary
salaries due to an increased need for part -time staffing to maintain workload. The Fund assumed gateless
operation of the parking structures would occur at the beginning of FY 2022-23 and would result in a
reduction in part-time positions; however, the roll out of gateless operations was delayed. Part -time
Parking Enforcement staff needs also increased over the h oliday period to provide night-time security in
the parking structures while an agreement for contracted security services was negotiated.
Contract Services – Parking was slightly over budget for Contract Services due to an increase in
communication servi ces and outreach efforts for various projects and programs mentioned in the above
sections.
Other Operating Expenses – Parking was significantly over budget in credit card merchant fees due to the
high adoption rate of the pay stations and mobile applicat ions. Pay stations collect over 90% of revenue
from credit cards compared to about 60% with single space parking meters. The credit card merchant fees
budget increases slightly in FY 2023-24 but may need to be adjusted at Mid -Year. Staff will monitor the
credit card adoption rate and make recommended changes as needed. Parking also over expended its
Print and Reproduction budget due to increased outreach efforts. Parking did have savings in the
FY 2021-22 FY 2023-24
Actual Budget Actual
Funds
Available % Budget
Staffing 1,574,054$ 1,865,400$ 1,667,902$ 197,498$ 11%1,922,947$
Contract Services 709,433$ 962,592$ 969,815$ (7,223)$ -1%930,946$
Other Operating Expenditures 377,531$ 429,397$ 520,179$ (90,782)$ -21%403,488$
Transfers Out to GF 1,105,120$ 1,263,622$ 1,263,622$ -$ 0%1,387,281$
Utilities 170,905$ 221,933$ 197,701$ 24,232$ 11%264,172$
Debt Service 823,481$ 851,577$ 843,342$ 8,235$ 1%852,116$
TOTAL 4,760,523$ 5,594,521$ 5,462,561$ 131,960$ 2%5,760,950$
Parking Fund Operating
Expenditures
FY 2022-23
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Parking Fund
Advertising and Public Outreach line item which can be used to supplement Print and Reproduction costs
if additional outreach is needed in future years.
Utilities – Electricity, which makes up most of the utilities expenses, came in below budget. This is a result
of several electric vehicle charging stations being ou t of service. The manufacturer is aware of the out of
service stations and is working with Parking staff to repair or replace damaged parts covered under the
existing warranty. Maintenance staff is collecting and comparing quotes for repairs needed that ar e not
covered under the manufacturer’s warranty.
Transfers – There were no variances in Transfers.
Parking Revenues
Table 39 - Parking Fund Revenue
Parking Meters – Parking realized 12% more revenue from parking meters than anticip ated. On-street
parking occupancy was higher this past fiscal year than in previous years and the public has adjusted to
use of the new multi -space pay stations. Parking meter revenue assumptions for FY 2023-24 increased to
account for both rate increases as well as the higher occupancy rates.
Parking Fines – Parking fine revenue is difficult to estimate. With full staffing throughout the year, except
for the Parking Enforcement II position and increased focus on the timed parking areas, especially those
around Cal Poly, 73% more revenue from parking fines were generated than expected.
Parking Structures – Limited availability of supplemental staff members and equipment issues led to
parking structure revenue below projections by about 8%. Parking structures are fully staffed but
equipment issues persist. It is taking longer than anticipated to implement the gateless parking system at
842 Palm which may impact the fund’s ability to fully realize the anticipated structure revenue. Staff is
working diligently to integrate the gateless operations with the permittin g, mobile payment, and
enforcement applications.
Long-term Parking – Long term parking revenues were 17% lower than budgeted and have not rebounded
to pre -pandemic rates as anticipated. Long term parking revenues were impacted by decreased usages
in the proxcard program, fewer 10-hour monthly permits sold, and significant reduction in construction
meter bag sales compared to previous years. Staff will continue to monitor this trend and pricing will be
reviewed during the upcoming parking fee study to en sure the right balance of cost is distributed to each
parking program offered.
Other Rent and Lease Revenue – The forecast assumed termination of Railroad Square lease payments
and implementation of hourly paid parking beginning July 2022. However, paid parking was not installed,
FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
Federal Stimulus Grants -$ 700,000$ 700,000$ -$ 0%-$
Long Term Parking 623,639$ 844,900$ 700,873$ (144,027)$ -17%695,300.00$
Parking Fines 928,610$ 793,500$ 1,369,398$ 575,898$ 73%852,100.00$
Parking Meters 2,210,191$ 2,268,500$ 2,543,994$ 275,494$ 12%4,876,000.00$
Parking Structures 1,013,028$ 1,328,450$ 1,224,458$ (103,992)$ -8%3,242,100.00$
Other Revenue/ Interest Revenue 260,662$ 637,690$ 820,440$ 182,750$ 29%537,824.00$
Grand Total 5,036,131$ 6,573,040$ 7,359,163$ 786,123$ 12%10,203,324$
Parking Revenue FY 2022-23
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Parking Fund
so lease payments continued. Staff is working to execute new Railroad Square lease ag reements in FY
2023-24 with updated pricing based on maintenance and operation of the Railroad Square lots. The rent
and lease revenue budget will be adjusted at Mid -Year once new lease agreements are executed to reflect
the new negotiated terms.
Unaudited Ending Fund Balance
Based on unaudited financials, the Parking Fund will return nearly $1.9 million to working capital. The
revised budget for FY 2022-23 anticipated returning $1.3 million to working capital. The difference is a
result of over realized revenue from parking fines and parking meters.
Page 100 of 182
Transit Fund
Transit Fund
A Year In Review
The Transit Fund ended the fiscal year with both staffing and non -staffing operating savings. SLO Transit
is still recovering from the COVID-19 pandemic and con tinues to have difficulty hiring and retaining
drivers. Ridership increased from 453,500 in FY 2021-22 to 502,200 in FY 2022-23; however, this is still
significantly lower than annual pre -pandemic ridership, which saw over one million rides a year. SLO
Transit continues to take meaningful steps forward to modernize its fleet and operations to help in the
recovery effort.
Accomplishments and Strategic Goal Updates .
SLO Transit received the first two fully electric buses at the beginning of calendar year of 2023. One was
put into service in August 2023 with the second to follow shortly once it is outfitted with the required
third-party components. The Transit Program, in coordination with the CIP Engineering Program, is
installing the necessary charging infrastructure for the new electric buses. Two permanent charging
stations will replace two temporary charging stations by the end of September 2023, with additional
charging stations coming at a later date to support additional zero emission buses (ZEBs). This represents
a major step forward in meeting the City’s zero emission goal as well as putting the City on schedule to
meet the State’s zero emission bus mandates.
Staff continues to engage internal and external stakeholders in the development of the first Transit
Innovations Study which is anticipated to be presented to Council for review in November 2023. The
request for proposals (RFP) for the joint Short Range Transit Plan update between SLO Transit and San
Luis Obispo Regional Transit Authority (SLORTA) was released in June 2023 and contract award is
anticipated for early September 2023. This effort will provide a 5-year strategic plan to help SLO Transit
meet the community’s transportation needs and accelerate the return to pre -pandemic ridership levels .
The Transit program was also part of a department reorganization which moved Transit under the Mobility
Services Division. The reorganization included a reclassification of the Transit Manager position into the
Mobility Services Business Manager which was filled in June 2023. The establishment of the new Mobility
Services Division will help align active transportation planning and infrastructure installations, parking
programs and services, and transit services to provide a more complete and robust tran sportation
network for community members and visitors alike.
Challenges
Hiring and retaining drivers continues to be the biggest challenge for returning to a full service schedule.
SLO Transit is working with its contracted operations service provider to implement hiring incentives that
make SLO Transit a more competitive employer. If the hiring incentives are successful, then staff
anticipates a return to a full service s chedule by Fall 2024.
Timely fleet replacement continues to be a challenge. In July 2023, Council approved the purchase of six
additional electric buses and those new buses should be in service in the next 18 to 24 months, as it takes
a minimum of 18 months to produce the bus, train on the new equipment, and register the bus with
Department of Motor Vehicles. As the City continues to replace older buses with new electric buses, future
maintenance costs reduce. At this time based upon the age of the transi t fleet, maintenance costs are
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Transit Fund
likely continue to increase until a majority, if not all, of the older buses can be retired from service. Fuel
prices will also likely remain high for the next two or more quarters as the Organization of the Petroleum
Exporting Countries (OPEC) continue to forecast decreased production rates through the Spring of 2024
thereby decreasing petroleum supplies.
Staff successfully applied and was awarded American Rescue Plan Act (ARPA) Discretionary funding to
help cover operating costs for the next three fiscal years; however, long -term fund health is dependent
on securing grants to fund operating and capital costs. Staff will continue to pursue discretionary grants
to fund additional bus replacements and to rehabilitate the Downtown Transit Center which is identified
in the Capital Improvement Plan.
Transit Fund Expenditures
Table 40- Transit Fund Operating Expenditures
Staffing – SLO Transit realized salary and benefits savings due to the vacant Transit Manager position,
which has been back -filled by a part-time Retired Annuitant since July 2021. This position has now been
filled and future Staffing savings in the program are unli kely.
Contract Services – SLO Transit realized a savings in Purchased Transportation, contracted transit
operations services, due to continued operation of a reduced service schedule. The reduction in services
is a result of driver shortages throughout the transportation industry, which has experienced a slower
return to pre -pandemic normal when compared to other economic sectors. Staff anticipates a return to
full academic schedule between winter and spring 2024 which is reflected in the FY 2023 -24 budget.
Other Operating Expenses – Fuel costs were $52,000 (16%) higher than anticipated and prices are
expected to remain high throughout the entire year as global uncertainties affect the stability of the oil
market. Fuel budget was increased in the 2023-25 Financial Plan by more than 9% to account for the
inflated fuel prices. Reduced services have provided reduced cost in miscellaneous materials and supplies
and printing since minimal changes in services have occurred over the past year. These minor cost savings
in materials and supplies and printing were not large enough to offset the additional fuel cost.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing 334,738$ 312,254$ 187,250$ 125,004$ 40%457,758$
Contract Services 2,658,865$ 3,647,517$ 3,085,689$ 561,828$ 15%4,362,400$
Other Operating Expenditures 335,265$ 379,562$ 405,112$ (25,551)$ -7%410,713$
Transfers 226,183$ 365,544$ 365,544$ -$ 0%463,491$
TOTAL 3,555,050$ 4,704,876$ 4,043,595$ 661,281$ 2%5,694,361$
Transit Fund Operating
Expenditures
FY 2022-23
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Transit Fund
Transit Revenues
Table 41 - Transit Fund Revenue
Federal Revenue – Federal Transit Administration (FTA) 5307 is a reimbursement grant and that funding is
obligated for the procurement of six additional battery electric buses. Delivery of the buses is scheduled
for Spring 2025. Transit was also awarded an ARPA grant of $12.3 million for operating assistance. FY
2022-23 was the first drawdown year of that grant, which totaled $2.74 million. The unused grant funds
will rollover to future fiscal years.
Local (Bus Fare) Revenue – Bus fares were 7% lower than budgeted because SLO Transit continues to
operate at reduced serv ice levels due to a driver shortage following the COVID -19 pandemic.
Other Revenue – The Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) program
provides discounts for the costs of new hybrid and zero emission bus procurement. Vouc her payment is
received by the manufacturer while the purchaser (City) pays a discounted cost at the time of purchase.
The voucher amount of $138,000 for new battery electric bus purchase was incorrectly accounted for as
a revenue source in this fund, even though it is applied to the purchase price at time of order. Other
Revenue also includes an Air Pollution Control District (APCD) grant for the installation of electric vehicle
charging station infrastructure at the bus yard to support the new battery ele ctric buses. The APCD
requires the equipment installation and issuance of a building permit before submittal for reimbursement
can occur. The project is anticipated to be completed by the end of September 2023. The HVIP voucher
being applied to the purchas e price and not realizing revenue associated with the voucher offset each
other. The delay in APCD grant reimbursement means the Transit Fund will realize the grant revenue in
the following fiscal year but does not have an impact on the Fund’s solvency nor does it jeopardize other
Transit funded capital projects.
State Revenue – The Transit Fund received more Local Transportation Fund (LTD) and more State
Transportation Act (STA) funding based on regional apportionment than budgeted.
Unaudited Ending Fund Balance
Based on unaudited financials, the Transit Fund will return approximately $2.2 million to working
capital.
FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
Federal 1,877,362$ 11,547,838$ 1,934,329$ (9,613,509)$ -83%7,571,830.00$
Local (Bus Fare)710,457$ 850,000$ 790,223$ (59,777)$ -7%990,000.00$
Other Revenue/ Interest Revenue (131,372)$ 982,173$ 421,260$ (560,913)$ -57%13,579.00$
State 1,324,408$ 2,663,080$ 3,087,209$ 424,129$ 16%3,179,564.00$
Grand Total 3,780,855$ 16,043,091$ 6,233,021$ (9,810,070)$ -61%11,754,973$
Transit Revenue FY 2022-23
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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 A gency Fund, which is overseen by the Whale Rock Commission. The City’s share of
operational e xpenses and CIP contributions for Whale Rock operations are budgeted for in the Water
Fund’s Source of Supply budget.
Table 42 - Utilities 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 all
costs for operations, maintenance,
infrastructure repla cement, 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 all
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 2022-23 with significant expenditure savings in both the
Water and Sewer Funds. The Water Fund expenditures were $3.1 million under budget, primarily due to
credits and savings in the water supply account. The Sewer Fund expenditures were $1.3 under budget,
primarily due to staff vacancies, staff turnover at lower steps, and deferred or delayed work related to the
implementation of the new Water Resource Recovery Facility.
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Utilities Department
The Water Fund revenues were $352,00025 under budget, primarily due to a 9% reduction in water
consumption compared to FY 2021-22. The Sewer Fund revenues were over budget by $879,00026
primarily due to an expanding customer base for corresponding sewer services. Sewer service charges are
likely to reflect lower returns in FY 2023-24 as the Department implements the sewer cap 27 based on an
uncharacteristically wet winter. These variances are discussed in detail in the next sections.
The Utilities Department concluded FY 2022-23 having provided hi gh-quality services with limited service
interruptions while navigating severe weather events. The Utilities Department remains in good financial
condition but continues to experience above -inflation increases in industry -specific commodities like
chemicals, electricity, and construction materials and services. Due to these significant increases in
operational costs in areas such as water treatment chemicals and electricity, the City Council approved
rate increases to maintain needed revenues to support the Water and Sewer Funds.
The Department continues to complete several work plan items that directly 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.
Accomplishments and Strategic Goal Updates
1. Substantial completion of the Water Treatment Energy Efficiency Project. MCG: Climate Action
2. Completed the installation of th e Tesla Battery Pack at the Water Treatment Plant. MCG: Climate
Action
3. Awarded a contract for the development of the Water Treatment Plant Infrastructure Renewal
Strategy.
4. Completed the design of the Johnson Waterline Replacement Project.
5. Completed a major update to the water distribution model to reflect new development.
6. Developed plans and went out to bid for the Reservoir 2 Cover Replacement Project.
7. Obtained approval for the creation of a third Water Resources Technician position.
8. Completed the study phase of the Tetrachloroethylene (PCE) Groundwater Contamination
Project.
9. Awarded a $5.9 million grant for groundwater contamination cleanup. MCGs: Climate Action and
Economic Resiliency
10. Received approval of the Groundwater Sustainability Plan.
11. Implemented GIS and Cityworks at the Whale Rock Reservoir.
12. Advertised and awarded the Spillway Underdrain Repair Project at Whale Rock Reservoir.
25 Excludes budgets and actuals related to debt proceeds. These accounts are dependent on capital project
schedules and are offset by capital costs and future debt payments.
26 Excludes budgets and actuals related to debt proceeds. These accounts are dependent on capital project
schedules and are offset by capital co sts and future debt payments.
27 While the City measures all water consumption by metering the water that is delivered to each property, the
City is unable to meter the wastewater or sewer that is collected through the drains in your sinks, toilets and
showers. To prevent charging residents for sewer usage for water that is used outdoors, the City caps units of
sewer that can be charged based on consumption during December, January, and February, when outdoor water
use is minimal.
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Utilities Department
13. Completed a major milestone by attaining regulatory compliance for nitrates and
trihalomethanes at the Water Resource Recov ery Facility (WRRF).
14. Began building out the WRRF’s software databases for the new facility, including the adoption of
Cityworks as its new computerized maintenance management system (CMMS).
15. Commissioned a new sewer lift station at the Avila Ranch housing d evelopment.
16. Nearing completion of an upgrade to the Calle Joaquin lift station.
17. Adapted Wastewater Collections to a new State -wide Sanitary Sewer Systems General Order.
18. Began the Wastewater Collections Infrastructure Renewal Strategy project. This will inc lude
updated system modeling and a flow study to determine the effectiveness of private sewer lateral
offset and rebate programs.
19. Completed a program audit of the City’s Sanitary Sewer Management Plan (SSMP).
20. Adopted new software that will increase pretrea tment inspection efficiency and effectiveness.
21. Overhauled the City’s Stormwater program Memorandum of Agreement (MOA).
22. Completed a digital transformation of various paper -based systems and adapted the Water
Quality Lab program to comply with new program re quirements identified by The NELAC Institute
(TNI).
23. Began updates to Confined Space Entry and Electrical Safety programs.
Challenges
The challenges that the Utilities Department experienced in FY 2022-23 can broadly be summarized as
storm response, operating cost increases, capital project delivery, and increasing regulatory
requirements. These are explained in detail below.
Storm Response - In addition to operational challenges, the Utilities Dep artment remained resilient
through the storms that occurred in January and March of 2023, driving the City to enact a Fiscal Health
Contingency Plan on January 27, 2023. Additional capital costs were incurred due to the storm. These
increases in capital costs resulted in compressed operating budgets, which ultimately impacted
operations and staffing.
The storms also had positive and negative impacts on the City’s source water supplies. The copious rainfall
allowed for all the surface water reservoirs t o be filled. Of special note, Whale Rock Reservoir is now near
100% capacity, which has not occurred since 2006. Conversely, small landslides and higher river levels
associated with the storms had negative impacts on the City’s water infrastructure. Pip elines were
exposed and required repair to adjacent hillsides, and the Nacimiento pipeline was damaged and is
undergoing temporary repairs to deliver water while a long -term strategy for a permanent repair is
completed.
Operating Cost Increases - While i nflation has been less severe in FY 2022-23, inflation on industry-specific
commodities like chemicals and electricity remain high. For chemicals, it is typical to see five to ten percent
price increases on an annual basis. In FY 2022-23, several chemicals exceeded the typical price increase—
the highest being 106 percent of budget. Given the uncharacteristically high increase in chemical prices,
the City restricted the use of funds in other accounts to offset the increases where possible.
Page 106 of 182
Utilities Department
Table 43 - Chemical Price Increases
Chemical 2021-22
Contract
2022-23
Contract 28
%
Increase
Alum $336 ton $450 ton +34%
Fluoride $1,760 ton $3,211.40 ton +82%
Chlorine (Cl2) $0.68 gal $1.40 gal +106%
Sodium Hydroxide (NaOH) $0.76 gal $1.28 gal +68%
Polymer $0.68 lb. $0.95 lb. +40%
Liquid Oxygen (Lox) $1.28 gal $1.30 gal +2%
Similarly, electricity costs are set to
have a phased increase of about
40% between January 2023 and
September 2023. While these cost
escalations have been partially
offset by data-centric operational
strategies and energy efficiency
projects (i.e., Tesla Battery and the
WTP Energy Efficiency Project), the
magnitude of the rate increases
have impacted the department’s
ongoing operational expenses
substantially.
While several indices indicate
slowing inflation, the fallout of extreme inflation in FY 2020-21 and FY 2021-22 have ongoing impacts on
operations and capital costs. The Consumer Price Index, for al l items, reflects a 12-month increase of
4.06% in May 2023. The Municipal Cost Index reflects a 12-month increase of 0.62% in May 2023.
28 One year contract with option to re-negotiate in 6 months due to volatile market.
$-
$200,000.00
$400,000.00
$600,000.00
$800,000.00
$1,000,000.00
$1,200,000.00
$1,400,000.00
$1,600,000.00
FY 2021 FY 2022 FY 2023
Chemical YoY Expenditures
Figure 6 - Chemical YoY Expenditures
Page 107 of 182
Utilities Department
Figure 7 - Municipal Cost Index Changes
Capital Project Delivery - Capital project costs con tinue to exceed available budgets, resulting in the need
for higher-than-average rate increases. As project costs increase, the Utilities Department has addressed
cost increases by trimming project scopes, deferring project delivery, and using alternative funding
sources such as savings from projects that were underbudget and undesignated working capital.
Table 44 - Escalating Project Costs
Project Original
Estimate
Current Cost
Estimate
%
increase
Reservoir 2 Cover Replacement $960,000 ~$3,000,000 +213%
Johnson Waterline Replacement $3,480,000 $5,010,000 +44%
Replacement of Actiflo Mixer Gearboxes $245,000 $416,322 +70%
Water Treatment Plant Facility Infrastructure
Renewal Strategy
$150,000 $451,111 +201%
These cost increases are reflected in various indices. One example is the year over year (YoY) increase in
the Producer Price Index for plastic sewer, storm drain, and water main pipe.
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2019 2020 2021 2022 2023
May YoY % Index Change by Year
Construction Cost Index Consumer Price Index Municipal Cost Index Producer Price Index
5‐year increase: 149% Page 108 of 182
Utilities Department
Figure 8 - Year-over-year Producer Price Index
Continued project deferrals and delays may cause issues in future years, when other high -value projects
must be delayed.
Increasing Regulatory Requirements - Regulatory requirements for water conservation, groundwater
management, and water and wastewater operations are often drivers of new or increased spending. For
example, some of the following major expenses are directly tied to increased regulatory requirements:
a) The Water Resource Recovery Facility upgrade
b) Creation of a third Water Resources Technician position
c) New permits and associated operating costs (i.e., MS4, NPDES, UCMR5)
d) As regulatory requirements increase, the costs and operational complexities of providing water
and wastewater services will also increase.
Table 45 - Utilities Department Performance Measures
Objective Measure 2022-23
Target
2022-23
Actual
Manage Assets Responsibly &
Transparently
Utilities Strategic Goal: Public
Stewardship
Grant and partnership dollars to be obtained to
offset rates $1,395,000 $1,658,716
Minimize number of Customers Shut-Off for
Nonpayment <450 352
Average Infrastructure Asset Age (years)29 19.92 21.45
# Unplanned Service Interruptions 30 0 8
29 Average asset age from City fixed assets data. This should decrease each year as assets are replaced.
30 This performance measure includes water main and service line outages, and sanitary sewer o verflows. While
the Department aims to minimize service interruptions, service interruptions are a byproduct of aging
0
50
100
150
200
250
300
2018 2019 2020 2021 2022
December YoY PPI Index
Commodity:Plastics sewer, stormdrain, and water main pipe
Source:U.S. Bureau of Labor Statistics PPI Detailed report
Page 109 of 182
Utilities Department
Objective Measure 2022-23
Target
2022-23
Actual
Connecting the Community to
High Quality & Reliable Service
Utilities Strategic Goal: Public
Service
# of Sewer Lateral Replacements including
Offsets 100 95
Recycled Water Delivered (AF) 325 23631
Foster Leadership,
productivity, and opportunity
for personal and professional
growth.
Utilities Strategic Goal:
Workforce
% of new/transferred employees who completed
safety trainings, assigned through CJPIA, within
30 days of hiring
100% 100%
Provide Coworkers and the
Community with Information &
Opportunities to Participate in
Decisions that Impact them.
Utilities Strategic Goal:
Communication
Public Outreach: # of Communications with the
Community32 200 196
Water Fund
Table 46 - Water Fund Operating Expenditure Analysis
Staffing – Salaries and benefits within the Water Fund were underspent by approximately $485,000 or 9%
during FY 2022-23. These savings were largely the result of vacancies and substantial staff turnover at
lower steps for the Water Treatment Plant, Water Distribution, Water Resources, and Administration and
Engineering teams. The Water Treatment Plant also underspent its overtime budget, which had been
infrastructure. In an average year the City sees 60 -80 unplanned interruptions. Most of these interruptions are
related to water service l ine leaks, which only impact a single customer.
31 Currently, recycled water is exclusively used for landscape irrigation. An extremely wet winter resulted in less
water demand for landscape irrigation.
32 Includes Facebook posts, blog posts, email bulletins , groundbreaking event, quarterly project reports, the
Resource, website news articles, and bill inserts.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing 5,174,679$ 5,484,670$ 4,999,216$ 485,454$ 9%5,502,576$
Contract Services 9,921,661$ 11,960,958$ 9,866,973$ 2,093,985$ 18%966,840$
Other Operating Expenditures 955,013$ 1,534,093$ 1,186,567$ 347,526$ 23%1,589,739$
Transfers Out 2,517,178$ 2,311,753$ 2,311,753$ -$ 0%2,826,143$
Utilities 526,965$ 698,125$ 657,998$ 40,127$ 6%1,033,139$
Debt Service 2,307,374$ 2,442,558$ 2,300,546$ 142,012$ 6%1,870,392$
TOTAL 21,402,870$ 24,432,158$ 21,323,053$ 3,109,105$ 13%13,788,829$
Water Fund Operating
Expenditures
FY 2022-23
Page 110 of 182
Utilities Department – Water Fund
inflated in comparison with prior years to account for anticipated overtime associated with the Water
Treatment Plant Energy Efficiency Project.
Contract Services – Approximately $1.8 million of the approximately $2.1 million unspent in the contract
services budget can be attributed to the City’s water supply account. This account funds costs related to
the Salinas, Nacimiento, and Whale Rock Reservoirs. The water supply account represents about half of
the entire Water Fund's operational spending, exceeding $11 million annually. The entirety of the amount
unspent in the water supply account is tied to variable electric ity and operating costs for the Nacimiento
Reservoir. This discrepancy can be summarized by the following:
1. $915,000 was credited to the City by the County in what is known as the "Nacimiento True Up
Payment" where the City is refunded for Nacimiento operat ing costs by the County of San Luis
Obispo based on actual expenditures compared to budgeted expenditures from the prior fiscal
year.
2. $580,000 was a result of Nacimiento electrical pumping charges ending the year under budget.
Nacimiento pumping charges are variable in nature and impacted by time-of -day delivery and the
City’s overall source water strategy. Due to the winter storms, the Nacimiento pipeline was down
for 5 months in FY 2022-23, which reduced actual costs associated with pumping.
3. $247,000 was carried over from FY 2021-22 for Nacimiento electrical pumping costs. This funding
was not utilized in FY 2022-23.
In addition to the unspent funding outlined above, the Water Fund did not spend approximately $209,000
in miscellaneous consulting services. Most of the funding in this account is used for engineering, legal, or
other related professional services. About $88,000 was underspent in Advertising and Public Outreach.
Following a dry FY 2021-22 and an executive order from the Governor of California i n March 2022, the
City had increased Advertising and Public Outreach to meet requirements that the City implement
measures associated with Stage 2 requirements of the City’s Water Shortage Contingency Plan. A wet
winter in FY 2022-23 alleviated ongoing dro ught concerns and resulted in the City removing many
temporary water conservation requirements associated with Stage 2 of the City’s Water Shortage
Contingency Plan, reducing the need for conservation -related outreach and its associated costs.
Other Operating Expenditures – Approximately $195,000 of the $350,000 unspent in other operating
expenditures can be attributed to the chemical account. While chemical prices have risen sharply,
chemical demand in FY 2022-23 was lower for the following reasons:
1. The City utilized more water from the Whale Rock Reservoir, which requires substantially less
chemical treatment. The City used more water from the Whale Rock Reservoir, because:
a. Nacimiento pipeline was damaged for 5 months in FY 2022-23, which forced the use of
alternative water sources.
b. The extremely wet weather in the winter of FY 2022-23 led to the Whale Rock Reservoir
spilling for four months, which meant the City could utilize this water supply without
drawing down reservoir levels.
2. The overall volume of water treated at the Water Treatment Plant was 6% lower in FY 2022-23
then FY 2021-22. This overall decrease results in less chemical demand.
In addition to the unspent funding outlined above, the Water Fund had $155,000 savings in the
miscellaneous materials and supplies, safety materials and supplies, postage, construction materials and
Page 111 of 182
Utilities Department – Water Fund
supplies, and education and training. The reasons for savings in these accounts are varied. Some of the
more substantial savings are listed below:
1. One -time costs for self-contained breathing apparatuses (SCBAs) were 70% less expensive than
previously anticipated. This resulted in $28,000 in savings.
2. $34,000 in savings on miscellaneous materials and supplies, such as maintenance supplies for
valves, vaults, and pipes. This was due to a reduction in water mainline leaks in the second half of
FY 2023.
3. Approximately, $37,000 in savings on postage due to the deferral of the Utilities Resource
Newsletter and an increasingly computer savvy customer base transitioning to electro nic billing.
Utilities – 68% (or $27,000) of the savings in this account are for electric service for the conveyance and
treatment of water. In all, the $27,000 in savings for the electric service account, accounts for about 4%
of the $656,000 budget in F Y 2022-23. The remaining savings in the utilities budget are mostly for
communications services. There was a carryover amount of $2,100 from FY 2021 -22, which partially
explains the savings. The communications services account will be monitored in FY 2023 -24 for a possible
midyear and budget supplement reductions.
Transfers out to General Fund – The transfers category represents transfers from the Water Fund to the
General Fund for contributions to internal services and auxiliary services such as Human Res ources, City
Clerk, Information Technology, Public Works, etc. This is paid in arrears and calculated based on the
previous fiscal year’s actuals; in this case FY 2021-22. There is no variance in this cost category.
Debt Service – The debt service category represents debt the Water Fund holds for financing capital
projects. There is a $142,000 savings in the debt interest account due to amortization of bond premiums,
discounts, and deferred amounts on refunding.
Table 47 - Water Fund Revenue
Water Fund revenues were $1.1 million less than budgeted. The primary reasons that Water Fund
revenues were under budget are:
1. $750,000 under budget in long term debt proceeds due to capital project schedules and
corresponding disbursements for the Water Treatment Energy Efficiency Project.
FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
1 Service Charges and Base Fees 24,074,968$ 24,123,079$ 23,297,077$ (826,002)$ -3%26,146,099$
2 Development Impact Fees 5,162,275$ 3,058,532$ 3,614,800$ 556,268$ 18%800,000$
3 COVID Rate Relief Program (225,016)$ -$ (53,940)$ (53,940)$ -$
4 Other Revenue 461,096$ 235,521$ 466,983$ 231,462$ 98%139,000$
5 State Grants 1,621,599$ 963,449$ 371,201$ (592,247)$ -61%697,500$
6 Other Grants/Subventions 226,994$ -$ 53,940$ 53,940$ -$
7 Cal Poly Capacity & Resilience 114,317$ 259,490$ 233,025$ (26,465)$ -10%251,072$
8 Investment and Property Revenue (749,398)$ 50,000$ 355,331$ 305,331$ 611%50,000$
9 Long Term Debt Proceeds 2,397,475$ 872,574$ 122,214$ (750,360)$ -86%872,574$
10 Total 33,084,310$ 29,562,644$ 28,460,631$ (1,102,014)$ -4%28,956,246$
Water Fund Revenue FY 2022-23
Page 112 of 182
Utilities Department – Water Fund
2. $592,000 under budget in state grants due to capital project schedules and corresponding
disbursements for the Water Treatment Generator project and disbursements through California
Office of Emergency Services (Cal OES).
3. $826,000 under budget in service charges and base fees due to a 9% reduction in water
consumption.
Impact fees were $556,000 over budget, reflective of continued development in the City and unknowns
associated with development construction timelines. Staff continues to refine the methodology behind
development impact fee projections.
The investment and property revenue budget was reverted to a flat $50,000 due to market volatility and
poor performance in FY 2021-22. In this business cycle, revenues exceeded this mark by $219,000. An
additional fair market value adjustment amounted to $87,000 increase in investment and property
revenue actuals for the Water Fund on existing investments. B udgets continue to reflect a cautious
outlook in FY 2023-24 until the economy returns to a normal business cycle.
Cal Poly Capacity and Resilience revenue was underbudget because a $21,000 invoice for pumping charges
was realized in FY 2021-22. In addition, Water Fund other revenue was over budget by $231,000 due to a
combination of the following:
1. $84,000 overbudget for the low -income subsidy account. The Water Fund budgets -$100,000 in
revenues for financial assistance administered through the Customer As sistance Program (CAP),
which gives eligible customers a 15% discount. In FY 2022-23, the department administered
$16,000 in financial assistance to 160 customers through the CAP. This resulted in $84,000 in
budgeted revenues losses that were never realized. The Utilities Department will continue to look
for opportunities to expand awareness of this program.
2. $54,000 overbudget in other grants/subventions for financial assistance for customers obtained
through the Low -Income Households Water Assistance Pro gram (LIHWAP).
3. $72,000 overbudget through EnelX, which compensates the Water Treatment Plant for ceasing
electric consumption during extremely high peak demand periods.
4. $24,000 overbudget in utilities set-up fees due to an expanding customer base.
5. $51,000 overbudget in non-recurring citations, penalties, and other miscellaneous revenues 33.
FY 2022-23 Unaudited Ending Fund Balance 34
Based on unaudited financials, the Water Fund will return $4,463,190 to working capital.
Figure 9 - FY 2022-23 Water Fund Summary
Water Fund Summary FY 2022-23 Amount
a) Revenue $ 28,460,631
b) Total Expenditures (c+d+e) $ 23,928,935
c) Operating Expenditures $ 19,022,507
33 These revenues include cost recovery for damage to City property, sale of scrap metal, citations, and other types
of revenues that cannot reliably b e accounted for on an annual basis.
34 These numbers are accurate as of August 17, 2023. When compared to audited financials values may vary based
on any journal entries that may have been posted after this date.
Page 113 of 182
Utilities Department – Water Fund
d) Capital Expenditures $ 2,605,882
e) Debt $ 2,300,546
Year-End Net Increase return to Working Capital (a-b) $ 4,531,696
Sewer Fund
Table 48 - Sewer Fund Operating Expenditure Analysis
Staffing – Salaries and benefits in the Sewer Fund were underspent by $540,000 (or 10%). $158,000 of
the cost savings were due to a later than anticipated hire of a contract Wastewater Collection Operator
and deferred hire of a WRRF Operator Intern. There was an addi tional $103,000 in the contingency
expense account for salary negotiations, that was not adjusted when salary negotiations were completed.
The remaining savings were largely the result of vacancies and substantial staff turnover at lower steps
for the Wastewater Collection, Water Resource Recovery Facility, Administration and Engineering, and
Water Quality Lab teams.
Contract Services – Approximately $330,000 of the $446,000 underspent in the Sewer Fund’s Contract
Services budget is due to delays in receivi ng the WRRF’s new National Pollutant Discharge Elimination
(NPDES) permit. This permit was delayed due to external factors, not under the City’s control, including
the new permit review and approval process. Staff utilize outside consultants during the le ngthy
negotiation process of being issued new NPDES permits to ensure appropriate levels of regulatory
compliance requirements. The reasons for the remaining $116,000 cost savings are varied. Some of the
more substantial savings are listed below:
1. $20,000 delayed and reduced work related to wastewater collection system modeling.
2. $67,000 is tied to strategic underspending of advertising and public outreach as a contingency for
potential electric service and chemical cost escalation.
3. $31,000 for deferred work with a contractor for pretreatment inspections of breweries.
4. $37,000 for deferred maintenance of assets that may be decommissioned or repurposed when
the WRRF upgrade is completed.
Other Operating Expenditures – While the other operating expenditures accounts are mostly balanced,
there was some strategic underspending that occurred to balance unanticipated overspending. The two
primary accounts that were overspent are:
FY 2021-22 FY 2023-24
Actual Budget Actual
Funds
Available % Budget
Staffing 5,183,631$ 5,470,802$ 4,930,396$ 540,406$ 10%5,491,135$
Contract Services 684,637$ 1,500,542$ 1,053,766$ 446,776$ 30%1,103,229$
Other Operating Expenditures 1,445,312$ 1,690,614$ 1,572,907$ 117,707$ 7%1,528,601$
Transfers Out 2,368,064$ 2,573,783$ 2,573,783$ -$ 0%3,104,155$
Utilities 541,456$ 942,423$ 773,208$ 169,215$ 18%1,062,892$
Debt Service 1,379,997$ 1,380,938$ 1,376,380$ 4,558$ 0%1,382,346$
TOTAL 11,603,097$ 13,559,102$ 12,280,440$ 1,278,662$ 9%13,672,358$
Sewer Fund Operating
Expenditures
FY 2022-23
Page 114 of 182
Utilities Department – Sewer Fund
1. $71,000 over budget for regulatory fees. This was due to nitrate and disinfection by product
violations. The WRRF Upgrades have addressed this issue and it should not recur going forward.
2. $11,000 over budget for chemicals. The liquids phase 1 stage of the WRRF upgrade was delayed
by four months. Consequently, staff spent four months longer using the less chemical -efficient
facility.
These over budget accounts were offset by electric service accounts, which were also under budget for
the same delay as part of the WRRF upgrade. There were additional cost savings in deferred equipment
maintenance supplies due to assets that may be decommissioned or repurposed when the WRRF upgrade
is completed.
Utilities – In anticipation of the new Water Resource Recovery Facility coming online, the City began
budgeting more for electric services. The new faci lity will utilize ultraviolet light to treat wastewater,
increasing electricity needs but significantly reducing, and in some cases eliminating, certain chemical
needs. Due to a modified construction schedule, the commissioning of new systems (overlapping with
existing system operations) had been delayed. These savings were used to offset increases in chemical
prices this year but will be needed when the new facility is commissioned.
Transfers out to General Fund – The transfers category represents transfers from the Sewer Fund to the
General Fund for contributions to internal services and auxiliary services like Human Resources, City Clerk,
Information Technology, Public Works, etc. This is paid in arrears and calculated based on the previous
fiscal year’s actuals; in this case FY 2021-22. There is no variance in this cost category.
Debt Service – The debt service category represents debt the Sewer Fund holds for financing capital
projects. There is $4,600 savings in the debt interest account due to amorti zation of bond premiums,
discounts, and deferred amounts on refunding.
Table 49 - Sewer Fund Revenue
Sewer Fund revenues were under budget by $8.9 million. This variance can be explained by underrealized
revenues in long term debt proceeds and grants, which are contingent upon capital project schedules and
corresponding disbursements.
Long term debt proceeds were $9.7 million under budget because of shifting capital project schedules for
the WRRF upgrade and associated disbursemen ts. Last fiscal year, the Sewer Fund was $22.6 million
overbudget in debt proceeds. With the WRRF upgrade project potentially reaching substantial c ompletion
in FY 2023-24, the budget will be adjusted at midyear to reflect actual costs of project delivery and
FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
1 Service Charges and Base Fees 19,381,278$ 18,634,189$ 19,483,177$ 848,988$ 5%19,324,641$
2 Development Impact Fees 3,825,751$ 2,226,361$ 1,968,592$ (257,769)$ -12%600,000$
3 Other Revenue 605,981$ 291,000$ 319,724$ 28,724$ 10%224,000$
4 State Grants 95,308$ 1,386,153$ 1,275,831$ (110,321)$ -8%1,386,153$
5 Federal Stimulus Grants -$ -$ (42,256)$ (42,256)$ -$
6 Cal Poly Capacity & Resilience 243,568$ 243,568$ 243,568$ -$ 0%472,534$
7 Investment and Property Revenue (1,035,754)$ 50,000$ 461,201$ 411,201$ 822%50,000$
8 Long Term Debt Proceeds 46,555,923$ 31,132,364$ 21,384,848$ (9,747,516)$ -31%31,132,364$
9 Total 69,672,054$ 53,963,635$ 45,094,684$ (8,868,951)$ -16%53,189,691$
Sewer Fund Revenue FY 2022-23
Page 115 of 182
Utilities Department – Sewer Fund
corresponding loan disbursements. Simultaneously, Federal Stimulus Grants were underbudget by
$42,000 because the City had to return an overpaym ent tied to the COVID-19 wastewater arrearage
program from October 2022. Additionally, state grants were $110,000 underbudget due to the project
delivery timing for the WRRF upgrade and corresponding disbursements from Integrated Regional Water
Management (IRWM) and Cal OES.
Sewer development impact fees were under budget by approximately $258,000, reflective of continued
development in the City and unknowns associated with construction timelines. Sewer service charges and
base fees were more than budgeted by $849,000. Sewer service charges are likely to reflect lower returns
in FY23-24 as the City implements the sewer cap based on an uncharacteristically wet winter.
The investment and property revenue budget was reverted to a flat $50,000 due to market vo latility and
poor performance in FY 2021-22. In this business cycle, the Department exceeded this mark by $339,000.
An additional fair market value adjustment amounted to a $72,000 increase in investment and property
revenue actuals for the Sewer Fund on e xisting investments. Budgets continue to reflect a conservative
outlook in FY 2023-24 until the economy returns to a normal business cycle.
FY 2022-23 Unaudited Ending Fund Balance35
Based on unaudited financials, the Sewer Fund will return $1,290,011 to working capital.
Table 50 - FY 2022-23 Sewer Fund Summary
Sewer Fund Summary FY 2022-23 Amount
a) Revenue $ 45,094,684
b) Total Expenditures (c+d+e) $ 43,804,673
c) Operating Expenditures $ 10,904,060
d) Capital Expenditures $ 31,524,233
e) Debt $ 1,376,380
Year-End Net Increase return to Working Capital (a-b) $ 1,290,011
35 These numbers are accurate as of August 17 , 2023. When compared to audited financials values may vary based
on any journal entries that may have been posted after this date.
Page 116 of 182
Utilities Department – Solid Waste Division (General Fund)
Solid Waste – AB 939 General Fund
The Solid Waste program is funded by AB 939 funding, collected through the solid waste bills.
A Year In Review
The Solid Waste and Recycling Program (Program) successfully established core funding, staffing support,
and program objectives over the past fiscal year. In accordance with SB 1383 requirements, the State’s
most expansive solid waste legislation in over 30 years, the Program made significant progress in
compliance efforts while its key external partner, the Integrated Waste Management Authority (IWMA),
onboarded new executive leadership.
The City continues to grow its solid waste management program to ad minister new and existing regulatory
programs like those required by SB 1383 and AB 1826. Since the Program’s establishment in 2019, it had
been staffed by only one Solid Waste and Recycling Coordinator. To more effectively lead the regulatory
programs necessary for compliance with State and regional law, the City added a Solid Waste and
Recycling Program Manager position in FY 2022-23 that was approved through the supplemental budget
and considered in the rate setting process.
Since securing funding for a second full -time City staff member as a part of the rate setting process, the
Program hired a Solid Waste and Recycling Program Manager in November 2022 and hired a Solid Waste
and Recycling Coordinator from a vacancy at the end of the fiscal year. With t he new staffing, the Program
has plans to achieve a high level of public outreach, complete large -scale and challenging projects, and
work towards achieving Program related Climate Action Plan goals.
Accomplishments and Strategic Goal Updates
1. Compliance Efforts
a. AB 341: Mandatory Commercial Recycling - 100% compliance 36
b. AB 1826: Mandatory Commercial Organics Recycling – 100% compliance
c. SB 1383: Short-Lived Climate Pollutants (Organics) – 99% compliance
2. Obtained a competitive Cal Recycle Beverage Container Recycling Grant for $236,531 to order
and install 30 dual stream Big Belly units (trash and recycling) with Wi -Fi and trash compacting
capabilities for the downtown area.
3. Processed 640 construction and demolition waste management plans.
4. Secured 36 tons of compost for City use and to be made available to community members.
5. Utilized the preliminary work of developing a Municipal Operations Zero Waste Plan done by a
CivicSpark Fellow in FY 2021-22 and selected a vendor for a Waste Characterization and
Generation Study to determine baseline diversion and generation data at City facilities.
6. Ordered and installed organics recycling containers at highly rented and utilized indoor City
facilities.
7. Conducted Summer Clean Up Week in partnership with San Luis Garbage and Cal Poly, removing
143 tons of materials from curbs and the public right of way.
36 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.
Page 117 of 182
Utilities Department – Solid Waste Division (General Fund)
8. Facilitated a Storm Debris Drop -Off Program for residents to dispose of their storm -damaged
debris from private property at no cost, resulting in a collection of over 19 tons.
Challenges
In FY 2022-23, the predominant challenges the Program experienced were staff recruitment and
uncertainties with Integrated Waste Management Authority (IWMA) membership from other agencies.
The Solid Waste and Recycling Program Manager was hired in November 2022; however, the Solid Waste
and Recycling Coordinator position was vacant for the remainder of the fiscal year, with a 0.75 FTE
contract Coordinator providing assistance to the program. By the end of the fiscal year, a new, permanent
coordinator had been hired.
The County’s withdrawal from the IWMA in November 2021 and leadership turnover led to increased City
staff involvement in regional agency coordination and planning efforts. Fortunately, the Executive
Director and Deputy Direct or roles at the IWMA were filled with permanent employees and greater
agency efficiencies were identified. These efficiencies led to a one percent temporary decrease in the
IWMA Solid Waste Management Fee for the upcoming fiscal-year. The County of San Lui s Obispo officially
showed intent to rejoin the IWMA, which could result in additional changes to the fee and an amendment
to the Joint Powers Agreements adding the County back as a member agency.
Table 51 - Solid Waste Program Budget Variance Analysis
Staffing – The Solid Waste and Recycling Program Manager position was vacant for five months at the
beginning of the fiscal year, and the Solid Waste and Recycling Coordinator position was vacant the entire
fiscal year. A contract coordinator working 0.75 FTE fille d the vacancy for the permanent coordinator, who
was hired in July 2023. Substantial salary savings were realized for both the manager and coordinator
positions.
Contract Services – The primary focus of the Program in FY 2022-23 was to maintain compliance with
State recycling and organics legislation, such as SB 1383, and continue to complete large -scale projects.
Due to the vacancies, some projects were paused to be completed in the next fiscal year. Execution of
time sensitive work efforts and training of backfill staff and new management meant that otherwise
anticipated expenditures were delayed.
Despite the vacancies, the new program manager and contract coordinator completed or began
numerous compliance and strategic goal objectives from budgeted and carry over funds. These include
hiring a consultant for a City facility Waste Characterization and Generation Study to create a benchmark
for the zero-waste component of the Lead by Example Plan, securing funds for targeted video
advertisements for proper source separation, ordering professional trash, recycling, and organics
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing 158,177$ 296,053$ 215,836$ 80,217$ 27%276,375$
Contract Services 24,324$ 128,088$ 92,824$ 35,264$ 28%40,500$
Other Operating Expenditures 3,381$ 26,510$ 18,109$ 8,401$ 32%22,544$
TOTAL 185,882$ 450,651$ 326,768$ 123,883$ 27%339,419$
Solid Waste
FY 2022-23
Page 118 of 182
Utilities Department – Solid Waste Division (General Fund)
containers for highly utilized indoor City rental facilities, and procurement of additional basic Big Belly
trash and recycling units installed in the downtown core.
Other Operating Expenditures – Other operating expenditures includes a substantial amount of unspent
postage and office supplies budget as many outreach efforts were completed primarily via social media.
Advertising budget was used to increase outreach at public events w ith giveaway items, social media and
radio ads for Clean Up Week and organics recycling, composting signage at the Emerson Park Community
Gardens, and the development of Citywide recycling videos. Similar robust outreach efforts are
anticipated for the nex t fiscal year.
Table 52 – Year-over-year carryover of AB 939 Revenue
Revenue Expenditures Carryover
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
Total $280,896
AB 939 revenue may only be used to pay for activities that divert waste from the landfill; therefore, any
funds remaining at the end of the year are put into the General Fund "assigned” fund balance for this
purpose. The table above identifies the unspent funds from prior fiscal years that will be allocated to the
assigned designation account for eligible expenditures under AB 939 requirements.
Page 119 of 182
TBID and Downtown Association
Tourism Business Improvement District
The Tourism Business Improvement District (TBID) was established in 2008 in the City of San Luis Obispo
at the request of the local lodging industry. The assessment is set at 2% of the lodging industry’s gross
receipts and is used to defray the costs of services, activities and programs promoting tourism which
benefit the operators of lodging establishments in the district through the promotion of scenic,
recreational, cultural, and other attractions in the district as a tourist destination. Annually, the program
sets an operating budget to match its forecasted yearly revenues.
A Year In Review
Tourism in the City remained strong in FY 2022-23, resulting in $10.8 million in Transient Occupancy Tax
contribution into the general fund and outperforming the budget by 2%. The growth in occupancy at local
hotels achieved a modest increase of 1% compare d to last fiscal year but continues to show the positive
signs of tourism recovery. The tourism promotion for the city continued to be led by the work of the City’s
Tourism Business Improvement District, known as Visit San Luis Obispo. This year the compre hensive
tourism marketing efforts focused on the first year of implementation of the 2022-24 TBID Strategic
Marketing & Business Plan . To achieve this work, the TBI D made greater investments with various
marketing contractors, commitments in new partnerships like hosting the Luxury Forum with Visit SLO
CAL, enhanced programs like funding for Keys for Trees with EcoSLO and the Office of Sustainability &
Natural Resources, and continued promotions like The Midweekend. During the fiscal year, a support
position of a Tourism Analyst was created for the TBID and funded through salary savings; however long -
term staffing for the TBID will be adjusted as a component of the pl an to reorganize the Office of Economic
Development and Tourism which was approved in June of 2023 as part of the financial plan process. Under
this reorganization, the office will have an Economic Development & Tourism Manager, Tourism &
Community Promoti ons Manager, and Economic Development Analyst.
Table 53 - TBID Revenue and Expenditure Budget Variance Analysis
Staffing – The program ended the year with 19% savings due to the vacancy of the Tourism Coordinator
position. Over the course of the year, that position was reclassified as Tourism Analyst and filled in March.
Contract Services – 93% of the contract services budget was used delivering on the objectives and
commitments outlined in the TBID Strategic Marketing and B usiness Plan.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing 225,734$ 226,463$ 184,415$ 42,048$ 19%276,698$
Contract Services 1,243,485$ 1,878,884$ 1,751,856$ 127,028$ 7%1,775,784$
Other Operating Expenditures 11,559$ 34,100$ 28,961$ 5,139$ 15%34,100$
Transfers 37,887$ 34,544$ 38,279$ (3,734)$ -11%42,816$
TOTAL 1,518,666$ 2,173,991$ 2,003,510$ 170,481$ 8%2,129,398$
TBID Revenue Actual Budget Actual Variance Projection
TOTAL 2,111,688$ 2,122,800$ 2,153,631$ 30,831$ 1%2,140,800$
TBID Expenditures
FY 2022-23
Page 120 of 182
TBID and Downtown Association
Other Operating Expenses – The program ended with a 15% savings due to the cost savings with various
programs like tradeshow partnerships, and media hosting expenses.
Transfers- The 11% difference in transfers, accounts for the additiona l 2% service fee transfer out of the
TBID operating budget as TBID revenues exceed the budgeted amount.
Downtown SLO Business Improvement District
The Downtown Business Improvement District (DBID) was established in 1975 as a parking and
promotions distri ct for the downtown area. As a special fee district, fees are collected from business
license holders operating within a designated area and revenue supports the operations of Downtown
SLO. The City and Downtown SLO (DSLO) agreed by contract that DSLO woul d provide various services for
the economic, social, cultural, and environmental vitality and beautification of downtown San Luis Obispo.
The assessment is a special revenue and is administered in its separate and distinct fund. Actual
e xpenditures will al ways be near equal to revenues because all of the collected downtown assessment is
remitted to Downtown SLO. Slight variances may occur due to the timing of revenue remittals.
Table 54 - Downtown Association Revenue and Expenditure B udget Variance Analysis
FY 2021-22 FY 2023-24
Actual Budget Actual
Funds
Available % Budget
Pass-through Payments 222,141$ 275,000$ 271,977$ (3,023)$ -1%275,400$
TOTAL 222,141$ 275,000$ 271,977$ (3,023)$ -1%275,000$
Revenue Actual Budget Actual Variance % Projection
TOTAL 227,202$ 275,000$ 269,523$ (5,477)$ -2%275,400$
Downtown Association
FY 2022-23
Page 121 of 182
2022-23 Capital Improvement Plan in Review
Major Completed Projects
During Fiscal Year 2022-23, several major projects were completed. It is important to note that although
some capital projects are highly visible to the community, others are not, including water and wastewater
system improvements, open space maintenance, silt removal, information technology maintenance,
facilities maintenance, and fleet procurement. The list below highli ghts some of the major
accomplishments in the Capital Improvement Program (CIP) during the fiscal year:
1. Orcutt Tank Farm Roundabout
2. Roadway Sealing 2022
3. Curb Ramp Improvements in Laguna Lake and Foothill/Chorro neighborhoods (Pavement Area 6
and 7)
4. Electric Bus Procurements
5. Parks and Recreation Interior Office Rehabilitation
6. Water Treatment Plan Power Storage Units with Tesla Battery Grant
7. Pedestrian Crosswalk Beacon at Ramona
8. WRRF Telemetry and Server Upgrade
9. 40 Prado Road Bus Shelter Relocation
Fol lowing project completion, staff will complete a financial closeout process to ensure all payments have
been made and all invoices have been captured. This process will also return any remaining funds back to
the appropriate account or fund balance where applicable.
Storm Projects
The City has made substantial progress but is still working to address the creek and infrastructure impacts
from the 2023 winter storms. This work includes storm drain repairs, creek erosion repair and protection,
water and waste water system repairs, debris removal, and roadway pothole repairs, among other capital
assets. There remains uncertainty to the best and most financially viable long -term solution as staff begin
the design and engineering process , with considerations aroun d reimbursement eligibility with the
Federal Emergency Management Agency (FEMA). Alongside the engineering and construction work is
continued efforts by staff to identify and document storm related work to ensure FEMA reimbursement
where possible , while continuing to meet the significant expectations of the community in delivering vital
and meaningful infrastructure projects.
Following the storms, 204 public sites were identified for repair, rehabilitation, or debris removal. A large
majority, or 180 of the 204 sites, have been addressed. 9 of the remaining projects are being managed by
operating programs and 15 sites that requ ire Capital Improvement Plan Engineering support.
Current estimates from storm damage alone ranges from $15 million to $27 million in repair costs, with
costs able to be further refined as project scope, design and timing are solidified.
Upcoming Projects
The map below presents some of the active and ongoing capital projects which were identified during
the financial planning processes , with activity taking place during the current fiscal year. In FY 2023-24,
the City has programmed over $116 million in capital projects supporting all departments and services
across the City.
Page 122 of 182
Figure 10 - 2023-25 Major Projects
Project Carryover Balances
Capital projects often span over multiple years and even across financial plans. Due to the nature of capital
projects, funding is carried over from year to year, with project close out activities taking place upon
project completion. This may result in funding being made available for other uses if a project is completed
under budget. Staff sched ule delivery of the CIP based upon the resources available (staffing and funding)
and, in some instances, the most appropriate time of the year for construction activities (such as paving
in summer). With the adoption of the 2023-25 Financial Plan, many active and ongoing capital projects
remain that were identified and funded for work during prior fiscal years. The tables below highlight the
project carry over balances, or remaining funding for a given project that has been allocated with the
adoption of p rior budget documents. The tables below are organized based on project status or project
progress, based on the following indicators:
Complete (Pending Close)
Construction
Ready to Construct
Ongoing – these are annual asset projects that provide funding support for other CIP’s or have
several subprojects in different phases of delivery.
Project Design
Project Identification & Budgeting
Page 123 of 182
Figure 11 - Project Carryover Balances by Status
Page 124 of 182
Table 55 - Project Balances - Completed
Ref # Complete (Pending Close*) Carryover Balance
1 Project & Totals $1,774,281
2 Marsh at Santa Rosa Bridge Replacement [90480] $288,290
3 Railroad Safety Trail Taft to Pepper - 2018 [91375] $265,316
4 Monterey at Santa Rosa Paving and Signal Project [1000559] $262,511
5 Open SLO [1000155] $143,689
6 CIP Project Delivery Augmentation [1000500] $133,612
7 Orcutt/Tank Farm Roundabout Construction [1000164] $115,056
8 ERP Acquisition [91534] $114,724
9 Roadway Sealing 2022 [1000560] $87,725
10 Pedestrian Crossing Improvements [1000069] $81,266
11 Downtown Renewal [91320] $73,342
12 Edna Tank Maintenance [91152] $40,005
13 Council Hearing Room Improvements [1000055] $31,636
14 40 Prado Rd. Bus Shelter Relocation [1000566] $29,939
15 WRRF Telemetry and Server Upgrade [91726] $21,959
16 Meinecke Murray Easement [91735] $17,860
17 Parks and Recreation Interior Office Rehabilitation [91562] $14,485
18 WTP Power Storage Units Tesla Battery Grant [1000541] $13,933
19 Water Distribution System Hydraulic Model Update [1000540] $13,498
20 WRRF California Resiliency Challenge [1000169] $10,000
21 Fleet Replacement: CDD [1000518] $6,284
22 New Bicycle Facilities [99615] $5,437
23 WTP Chemical System Maintenance [91731] $2,341
24 Infrastructure Renewal [91736] $1,228
25 Corporation Yard Fuel Island Siding [91632] $146
26 Laguna Lake Dredging [99110] $0
27 WTP Ozone System Maintenance [91730] $0
28 Pedestrian Crosswalk Beacon on Ramona [1000161] $0
29 Pavement Area 6 and 7 Curb Ramps [1000558] $0
30 Madonna Road Bike Path Landscaping Design [1000567] $0
31 Anholm Neighborhood Greenway Plan - Phase 1 [91619] $0
32 Urban Forest: Operating [91527] $0
*These are projects that are complete and pending close; however, there may be some final payments
or minor work that still needs to occur, which explains some of the remaining balance.
Page 125 of 182
Table 56- Project Balances - Construction
Table 57 - Project Balances - Ready to Construct
Ref #Construction Carryover Balance
1 Project & Totals 18,960,758$
2 WRRF Facility Upgrade [91219]10,415,588$
3 Calle Joaquin Sewer Lift Station and Siphon Replacement [91118]2,160,133$
4 Whale Rock Major Maintenance [91335]1,210,046$
5 Anholm Neighborhood Greenway - Phase 2 [1000036]1,199,812$
6 Public Safety Power Shutoffs - Emergency Power [1000126]934,515$
7 North Broad Street Neighborhood Park [91683]725,283$
8 Transit Facility EV Charging Infrastructure [1000535]630,214$
9 Bus Yard Parking Lot Maintenance [1000102]500,000$
10 Buckley Sewer Lift Station [1000083]377,234$
11 2023 Streets Reconstruction & Resurfacing - Arterials 218,341$
12 2022 Street Reconstruction and Resurfacing [90346]198,509$
13 Water TTHM Byproduct Reduction Project [1000044]164,589$
14 San Luis Creek Bank Stabilization near Pismo, Johnson [1000035]142,609$
15 Parking Enforcement Equipment at Gate Entry [1000525]83,181$
16 WTP Energy Efficiency [91566]705$
Ref #Ready to Construct Carryover Balance
1 Project & Totals 13,813,111.40$
2 1106-1120 Walnut Street Real Property Acquisition [1000577]5,768,778.00$
3 Cultural Arts District Parking Structure [90435]4,927,305.06$
4 Parking Structure Maintenance [1000049]3,090,260.53$
5 Whale Rock Auto Control Valves [91718]26,767.81$
Page 126 of 182
Table 58 - Project Balances - Ongoing
Ref #Ongoing Carryover Balance
1 Project & Totals 14,724,937$
2 Open Space Acquisition [99837]2,929,604$
3 Development Agreements [1000056]1,652,750$
4 Major Facilities Maintenance [1000075]1,234,489$
5 Parks Major Maintenance [91385]1,022,262$
6 Fleet Replacement: Public Works [1000520]982,548$
7 Public Safety IT Replacements [1000074]976,380$
8 WRRF Major Equipment Maintenance [1000077]536,496$
9 Whale Rock Pipe Assessment and Repairs [91617]524,950$
10 Fleet Replacement: Police [1000553]438,698$
11 Fleet Replacement: Fire [1000554]436,996$
12 Sidewalk Maintenance [90849]323,216$
13 Public Art Installation [1000510]322,822$
14 WTP Major Equipment Maintenance [99653]250,205$
15 Parking Lot Maintenance [1000031]246,713$
16 Neighborhood Traffic Improvements [91612]227,976$
17 Downtown Safety Enhancements [1000511]218,278$
18 Fleet Replacement: Utilities [1000521]206,977$
19 WTP Major Facility Maintenance [1000542]198,390$
20 Public Art Maintenance [1000503]195,609$
21 Traffic Safety Report Improvements [91607]157,783$
22 WRRF Asset Maintenance Management [1000077]149,946$
23 Playground Equipment Replacement [1000033]149,190$
24 Water Distribution Point Repairs [1000065]147,574$
25 Open Space Maintenance [91397]128,488$
26 Network IT Replacements [1000074]128,014$
27 Silt Removal [1000198]115,882$
28 Fleet Replacements - Citywide [1000047]113,075$
29 Fleet Replacement: Parks and Recreation [1000519]88,500$
30 Urban Forest Maintenance [1000027]87,974$
31 Banner Arms, Bench Rests, Signs [1000157]85,460$
32 Water Distribution Meters and Boxes [1000062]66,637$
33 Traffic Model Update [90949]60,621$
34 Street Lights [91616]56,425$
35 Vision Zero Program Implementation [1000073]47,147$
36 Sewer Lift Station Repairs [91628]34,401$
37 Sewer Utility Trench Repair [91740]30,021$
38 Utilities IT Replacements [1000074]27,540$
39 Traffic Signs and Striping Maintenance [90943]25,700$
40 Water Distribution Utility Trench Repair [91147]25,031$
41 LOVR Interchange Offsite Mitigation Agreement [1000182]15,924$
42 Enterprise IT Replacements [1000074]14,168$
43 Bridge Maintenance [1000029]13,432$
44 Fleet Services Vehicle Lift [1000181]9,283$
45 LAN Tablet System [91717]8,092$
46 Pedestrian and Bicycle Pathway [1000032]5,775$
47 Wastewater Collections System - Point Repairs [1000527]5,417$
48 Major Facility Replacements [1000522]5,293$
49 Water Distribution Fire Hydrants [1000063]2,562$
50 Active Transportation Plan Implementation [1000502]2,530$
51 Sewer Maintenance Hole Cover Adjustments [1000084]800$
52 City Facility Energy Infrastructure Plan [1000507]0$
53 Storm Drains [90742]0$
Page 127 of 182
Table 59 - Project Balances - Project Design
Ref #Project Design Carryover Balance
1 Project & Totals 33,199,885$
2 Prado Road Bridge Widening [91252]5,016,074$
3 Development Related Parks Improvements [1000057]4,866,599$
4 Prado Road Interchange [91613]2,783,734$
5 Water Storage Tank Maintenance [1000034]2,574,748$
6 Emerson Park Amenity Upgrades and Beautification [1000514]2,435,159$
7 Foothill Sewer Lift Station Replacement [91224]2,338,958$
8 Airport Sewer Lift Station Replacement [91369]1,965,918$
9 Waterline Replacements : California Ave - Stafford to Mill [1000545]1,715,976$
10 Prado Road Extension Reimbursement [1000195]1,698,184$
11 Groundwater Well Development Program [91506]1,142,579$
12 Parking Pay Station Installation [1000574]988,000$
13 Mission Plaza Restroom Improvements [91439]933,981$
14 Higuera Widening at 50 Higuera [91294]768,115$
15 Broadband Plan 562,650$
16 WRRF And Wastewater Collection Shop [1000550]426,946$
17 California & Foothill Railroad Crossing Upgrade [91293]313,911$
18 SGMA GSP (Groundwater Basin Management) [1000150]295,352$
19 Parks and Rec General Plan Implementation [1000526]284,393$
20 Higuera Street Widening to Elks [91610]282,953$
21 Sewer Replacement: Chorro & Murray [91639]258,827$
22 KVEC Tower [1000113]257,589$
23 Verde, Luneta, Ramona Wastewater collections System Improvements [1000091]254,775$
24 Electric Vehicle Charging Station at Various Facilities [1000513]232,482$
25 Mitchell Park Picketball Courts [1000188]196,254$
26 California Taft Roundabout [91503]143,384$
27 Reservoir No 2 Replacement [91368]111,991$
28 Transportation Impact Fee Program Update [1000165]100,000$
29 Multisite Energy Management [91574]71,870$
30 Mission Plaza Maintenance Improvements [1000562]62,954$
31 Mid-Higuera Bypass [90649]44,900$
32 Public Safety Center [91365]35,377$
33 Railroad Safety Trail Implementation [1000502]25,000$
34 City Hall Landing Repair [91532]8,580$
35 South Street Median Landscaping [1000037]852$
36 Transit Yard Solar [1000144]817$
37 Johnson - Iris to Bishop Pipeline Replacement [1000578]2$
Page 128 of 182
Table 60 - Project Balances - Project Identification & Budgeting
Funding Source Expenditure Summary
The Capital Improvement Program is supported by a variety of funding sources including the Local
Revenue Measure, special funds, enterprise funds, grants, and more traditional government funds. Each
fund or funding source serves different purposes, and, at times, comes with limitations and restrictions
for eligible uses or expenses. Like the Project Carryover Balances section above, the table below outlines
simi lar information but presented by funding source. As highlighted, the use of the Local Revenue
Measure is a primary revenue source in supporting the delivery of capital projects.
Ref #Project Identification & Budgeting Carryover Balance
1 Project & Totals 16,462,548$
2 Fleet Replacement: Transit 6 Gillig buses [1000505]6,632,843$
3 Islay, Henry, Sierra Way Wastewater Collections System Improvements [1000539]1,830,535$
4 Morro, Mill, Santa Rosa Wastewater Collections Systems Improvements [1000561]1,515,285$
5 Bob Jones Trail and RRST Solar Lighting [1000501]1,449,941$
6 Recycled Water Broad Street - Tank Farm to Aerovista [1000528]1,061,031$
7 City Facility Enhancements [1000575]773,070$
8 Fleet Replacement Transit -Protera/New Flyer Buses [1000058]458,253$
9 Bus Wash Replacement [1000053]450,000$
10 WRRF Safety Perimeter Fencing 347,500$
11 Recycled Water Tank [1000530]340,249$
12 City Security Project [1000152]282,527$
13 Downtown Zig-Zag Lighting [1000512]250,000$
14 Whale Rock Intake Valve Replacement [1000176]200,000$
15 Recycled Water Systems Retrofits [1000573]172,647$
16 Buchon & Santa Rosa Intersection Improvements [1000052]150,000$
17 Sewer Inflow and Infiltration Reduction [91739]131,915$
18 Fire Station 3&4 Remodel Space Study and Design [1000516]100,000$
19 WRRF Power Cogeneration Upgrade [1000551]100,000$
20 Transit Supervisor ADA EV Van [1000536]70,000$
21 Golf Course Pro Shop Flood Damage Repairs [1000568]50,181$
22 Laguna Lake Golf Course Irrigation System Maintenance [1000030]31,570$
23 Taft, Hathaway, Phillips, Buena Vista, Loomis Wastewaster Collections System Improvements [1000570]25,000$
24 San Jose, Ramona, Monte Vista, California Wastewaster Collections System Improvements [1000571]25,000$
25 Transit Vault Room Addition Design Study [1000538]15,000$
Page 129 of 182
Table 61 - Project Carryover by Funding Source
Use of Capital Reserve
In recent months, the City has worked to navigate unique economic conditions, including cost escalation
and supply chain delays, which have impacted the City’s ability to deliver capital projects within budget
and schedule. While the CIP bu dget has tripled due to the voters’ passage of Measure G20 (the City’s
local sales tax measure), the increased revenues have proven invaluable for adapting to variable market
conditions in recent years.
As a result, the City has established a Capital Projects Reserve Fund37 to account for unanticipated needs,
project cost increases, or an urgent need (an emergency repair, for example). Per City Policy, a goal has
bee n established that the amount of reserve fund equates to 20% of the LRM portion of the programmed
CIP. This results in an approximate reserve of $4 million, which is set aside with a given budget cycle. The
table below presents the use of the CIP Reserve d uring FY 2022-23.
Table 62 - Capital Reserve Balance
37 The City will maintain a committed reserve of 20% of capital improvement plan budget from the Local Revenue Measure for
the purposes of offs etting unanticipated cost increases, unforeseen conditions, and urgent unanticipated projects to provide
continued investment in infrastructure maintenance and enhancement. Use and allocations of funds from the Capital Projects
Reserve Fund will be made to Capital Projects including Major Facility Replacement upon Council approval as necessary during
any fiscal year.
Fund Source Carryover Balance
Local Revenue Measure 15,996,708$
Capital Outlay 14,757,134$
Grants 11,322,644$
Parking Fund 9,254,332$
Transit Fund 1,707,212$
Water Fund 9,797,597$
Sewer Fund 23,307,620$
Whale Rock Fund 1,980,609$
Impact Fee Funds 12,385,854$
Total 100,509,709$
Ref #Project Amount
1 Balance as of July 1, 2022 4,008,708$
2 Cerro San Luis Neighborhood Greenway (1,000,000)$
3 Cheng Park Revitalization Project (200,000)$
4 City Hall Meeting Room Tenant Improvements (160,000)$
5 Fire Station 1 Roof Replacement (350,000)$
6 Railroad Safety Trail (380,000)$
7 SLO Creek Bank Repair Project (1,500,000)$
8 North Broad Street Neighborhood Park (200,000)$
9
North Chorro Neighborhood Greenway (Previously Cerro San Luis
Neighborhood Greenway)(218,708)$
10 Ending Balance -$
11
12 Balance as of July 1, 2023 4,000,000$
Page 130 of 182
Strategy Major City Goal Update
The table below shows the Major City Goal tasks that were scheduled to be completed in the fourth quarter. In total, 17 tasks were completed. Because
the 2023‐25 Major City Goals are the same, many of these efforts are ongoing and included in the 2023‐25 Financial Plan.
On track Problems emerged with no solution yet
Task delayed or potential setbacks with workable solutions
Task Status Completion
Date
Updated
Completion
Date
Comments (if applicable)
Economic Recovery, Resiliency & Fiscal Sustainability
1.1 h. Update the City's Economic Development Strategic plan
FY23 Q4 Complete
1.1 i. Review the Economic Development program structure based on
the outcome of the EDSP update.
FY23 Q4 Complete New structure approved in 2023‐25 Financial Flan. Changes to
be implemented FY 2023‐24 Q2
1.1 c. Evaluate and potentially establish a City Leadership/Chamber
of Commerce / Minority Business Owners’ roundtable.
FY23 Q4
Complete Reviewed the value and feasibility with potential partners and
determined there were much higher priority initiatives.
1.1
d. Research, explore and potentially utilize innovative practices
such as micro‐loans, targeted‐sector recruiting and promotion,
City facilitated lending, grants, private support and crowdfunding
to support businesses owned by or serving
underserved/underr epresented communities. The City will also
leverage its partner network, including the Chamber, Downtown
SLO, REACH and others to support the DEI initiatives as they
relate to economic development including creation, retention and
attraction efforts.
FY23 Q4
Complete
1.2
b‐4. Improve efficiency and transparency in the permitting
process through implementation of paperless permitting,
performance management reporting, and enhanced customer
transparency tools.
FY23 Q4
Ongoing
Carried over into 2023‐25 Major City Goals.
1.4 d‐8. Expansion to gateless parking structure to improve the
customer access and experience when visiting downtown.
FY23 Q4
Ongoing
842 Palm has been transitioned. Work effort to integrate Park
Local Program continues. Marsh and 919 Palm to follow once
CIP staff are assigned.
Diversity, Equity, Inclusion
2.1 i. Consultant ‐ DEI SME ‐ 360 total hours
FY23 Q4 Complete
2.2
c. Present comprehensive plan to City Council for Adoption
FY23 Q4 FY24 Q3 DEI Strategic Plan under development to be presented to
Council in FY 2023‐24 Q3.
Page 131 of 182
Strategy
Task Status Completion
Date
Updated
Completion
Date
Comments (if applicable)
2.2
a. Conduct needs, priority, and resource assessments. Create
comprehensive DEI initiatives and programming for the
organization and community.
FY23 Q4
Ongoing Ongoing effort to address City needs and impact in the
community.
2.2
d. Create project designs and implementation plans. Identify
applicable qualitative and quantitative metrics to measure impact
of DEI projects and overall DEI program
FY23 Q4
Ongoing
Completed development of performance outcome measures,
which continue to be ongoing efforts to determine success
and address needs.
2.4
j. Complete a planning study for gender‐inclusive restroom and
sleeping facilities for Fire Stations 3 and 4. Proceed with design
work pending results of study.
FY23 Q4
FY26 Q3
Design work is underway for the Fire Station 3 & 4 dorm
remodel. The estimated completion date of the project
construction is FY 2025‐26 Q3.
2.7
e. Support feasibility study for Multicultural Center; provide City
liaison/staff support
FY23 Q4 Complete Use of funding to execute a Multicultural Programming
contract with Cal Poly.
2.7
f. Contribute to planning / feasibility study
FY23 Q4 Complete Use of funding to execute a Multicultural Programming
contract with Cal Poly.
2.7
j. Community Academy – second stage, longer program. Partner
with Chamber, others. Test demand, develop.
FY23 Q4 Complete
2.7
k. Develop “Undocu‐Friendly” logo for City documents, as
allowable by law (cost of internal resources)
FY23 Q4 Complete
2.9
c.Establish a City Leadership/Chamber of Commerce / Minority
Business Owners’ roundtable.
FY23 Q4
Complete Reviewed the value and feasibility with potential partners and
determined there were much higher priority initiatives.
2.9
d. Research, explore and potentially utilize innovative practices
such as micro‐loans, targeted‐sector recruiting and promotion,
City‐facilitated lending, grants, private support and crowdfunding
to support underserved/underrepresented communities.
Leverage City's partner network, including the Chamber,
Downtown SLO, REACH and others to support the DEI initiatives
as they relate to economic development including creation,
retention and attraction efforts.
FY23 Q4
Complete
Housing and Homelessness
3.1 e. Subdivision Regulations Update (HE 6.20)
Complete
Climate Action, Open Space and Sustainable Transportation
4.3
m. Complete installation of adopted trail systems at the Waddell
Ranch addition to the Irish Hills Natural Reserve.
FY23 Q4
Ongoing
The core trail network through Waddell Ranch is complete.
Additional trails will also be installed during the 2023‐25
Financial Plan and thereafter.
Page 132 of 182
Strategy
Task Status Completion
Date
Updated
Completion
Date
Comments (if applicable)
4.3
b. Complete an Urban Forest Master Plan including a
comprehensive update of tree inventory update, assessment of
tree canopy coverage, and implementation of an ongoing tracking
system, as called for by CAP Natural Solutions task 2.1.
FY23 Q4
Complete
4.3
j. Create the Righetti Hill Open Space Conservation Plan in order
to guide the long‐term protection and appropriate public use of
this new City Open Space property.
FY23 Q4
Complete
4.3
k. Implement priority projects at Righetti Hill Open Space
consistent with the Conservation Plan.
FY23 Q4
Complete
Conservation Plan was adopted in June of 2023 and priority
projects are now in process (initial summit trail and lower
loop trail).
4.3
l. Complete installation of adopted trail systems and establish
regular Ranger Service patrol at Miossi Open Space.
FY23 Q4
Complete
The core trail network through Miossi Open Space is
complete, including the connection to Poly Canyon.
Additional trails will also be installed in 2023‐25 and
thereafter.
4.3
h. Update the existing South Hills Natural Reserve Conservation
Plan (2007), including a contemporary natural resources
inventory, mapping, policy review, and identification of land
stewardship needs and priorities.
FY23 Q4
Not Complete
The existing conservation plan is sufficient to achieve
conservation objectives as it includes the recent addition of
71 acres that were dedicated from Tract 2428.
4.4
b. Prepare a Mobility as a Service Study to guide potential
implementation of programs and software tools to create an
integrated platform linking access to transit, future bikeshare and
ridesharing services, as called for in CAP Connected Communities
task 1.2.
FY23 Q4
FY24 Q1
The study has been included in the Transit Innovation Study
(4.4.c).
4.4
c. Prepare a Transit Innovation Study to provide a blueprint to
guide the transition to increased service frequency, electrification
and feasibility of no‐fare service for students, seniors, and others
as called for in CAP Connected Communities tasks 4.2, 4.3, and
4.4.
FY23 Q4
FY24 Q1
The study is planned to be presented to Council in November
of 2023.
Page 133 of 182
Strategy Strategy
Task Status Completion
Date
Updated
Completion
Date
Comments (if applicable)
4.4
x. Development Agreements: Fund the City's share of costs
associated with public infrastructure to be constructed by private
development projects per reimbursement agreements for the
following projects:
‐ Avila Ranch ‐‐ City share of Buckley Road Extension Class I Path
‐ 600 Tank Farm ‐‐ City share of Tank Farm/Santa Fe Roundabout,
Santa Fe Road Extension, and Design & Right‐of‐Way for Tank
Farm Class I Path
FY23 Q4
FY26 Q1
City share of Avila Ranch (Buckley Extension Class I Path) and
initial share of 600 Tank Farm (Tank Farm/Santa Fe
Roundabout; Tank Farm Class I Path Design) fully funded
based on initial cost estimates. However, additional funding
appropriations will be needed for fully fund City's share of
Tank Farm/Santa Fe Roundabout due to increased costs
identified through final design. This additional appropriation
is planned for FY25‐27.
4.4
j. Complete construction of the California/Taft Roundabout,
reducing congestion and auto emissions and improving access
and safety for bicycles, pedestrians and drivers.
FY23 Q4
FY26 Q4
Final design and right‐of‐way phases funded and in progress.
Construction funding not programmed until 2025‐27 Financial
Plan.
4.5
d. Replace or repair Open Space fencing that is currently in
disrepair at Cerro San Luis Natural Reserve, Irish Hills Natural
Reserve, Bowden Ranch Open Space, and the Bob Jones Trail.
(Includes existing Creek and Flood Protection Staffing resources)
FY23 Q4
Complete
4.5
f. Conduct a microgrid feasibility assessment to identify City
properties that could add solar, battery storage, and controls to
allow operation during times of electrical grid outages as an
uninterruptable power supply.
FY23 Q4
Complete
Page 134 of 182
R _____
RESOLUTION NO. _____ (2023 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, TO DELEGATE APPROPRIATION AUTHORITY
TO THE CITY MANAGER FOR CALIFORNIA INTEGRATED WASTE
MANAGEMENT ACT OF 1989 (AB939) AND SENATE BILL 1383 FEES
WHEREAS, the City Council adopted the 2023-25 Financial Plan on June 6, 2023,
which established comprehensive financial and policy guidelines for Fiscal Years 2023-
24 and 2024-25; and
WHEREAS, the California Integrated Waste Management Act of 1989 (AB939)
and Senate Bill 1383 (SB1383) Short-Lived Climate Pollutants state that any
AB939/SB1383 fees collected from the solid waste franchised hauler must be used
exclusively to pay for state-mandated activities that reduce the amount of waste sent to
the landfill (waste diversion); and
WHEREAS, the 2023-25 Financial Plan includes the Fund Balance & Reserve
Policy, which delegates authority to the City Manager to transfer assigned fund balance
into unassigned fund balance, such as between designation accounts, but does not
delegate authority to the City Manager to appropriate the unassigned fund balance; and
WHEREAS , the Solid Waste and Recycling Program is a General Fund program,
but is funded by AB939/SB1383 fees; and
WHEREAS, a designation account was created to maintain proper accounting and
monitoring of unspent AB939/SB1383 fees; and
WHEREAS, the State of California’s aggressive waste diversion goals of 75
percent organic waste diversion by 2025 and increased regulatory scrutiny make waste
diversion activities difficult to predictably budget as part of the City’s usual budgetary
practices; and
WHEREAS, necessary projects generated from unfunded mandates can be
unexpected and urgent so City Manager approvals for use from the designation account
allow timeliness of performing these unanticipated waste diversion tasks.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
Page 135 of 182
Resolution No. _____ (2023 Series) Page 2
R _____
1. That the above recitals are true and correct.
2. The City Manager is delegated authority to appropriate AB939 /SB1383 fees
from the undesignated fund balance, after transferring from the assigned fund
balance, compliant with the Fund Balance & Reserve Policy and corresponding
legislation.
3. That the Director of Finance shall take all necessary steps to implement these
actions as soon as practical
Upon motion of Council Member ___________, seconded by Council Member
___________, and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _______________ 202 3.
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
Page 136 of 182
The 2nd year of the two-year financial plan
1.Receive and file the Fiscal Year 2022-23 Year End Budget report; and
2.Adopt a resolution entitled “A resolution of the City Council of the City of
San Luis Obispo, California, to delegate appropriation authority to the City
Manager for AB939 & SB1383 fees” compliant with the Fund Balance &
Reserve Policy and corresponding legislation.
What’s in the year-end report?
✓Major Fund Overviews
✓Departmental Performance Measure and Programmatic Updates
✓Major City Goal Updates
✓A comprehensive CIP update
Financial Policy:
Interim Reporting
Applicable
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
FY 2022-23
Year End
The fourth quarter and year-end report provides an overview of the City’s unaudited financial position through
the fourth quarter of FY 2022-23 (July 1, 2022 – June 30, 2023)
2021-23 Financial Plan Timeline 4
2021-23
Financial
Plan
Adoption
Community Input/ Major City
Goals
Forecasted COVID-19
Economic & Financial
Impacts
Incorporation of new
revenue from Measure
G-20
2022-23
Supplemental
Budget
Opportunities at 21-22 Mid-Year
CalPERS payments
Improved economic outlook provides
opportunity to address labor market
challenges and address community
needs
Commitment to pay down
CalPERS
Continuation of basic
community service levels
Q1
Review
Q2
Review
Q4
Review
Q3
Review
FY 2021-22
Q1
Review
Q2
Review
Q4
Review
Q3
Review
FY 2022-23
Activity during FY 22-23
Adjustments to revenue forecast
Storm impacts immediate and long-term
fiscal outlook
Minor expenditure budget changes
FY 2021-22 FY 2022-23 FY 2023-24
Actual Budget Actual Variance % Projection
Tax and Franchise Revenue $ 96,490,763 $ 98,267,347 $ 100,611,346 $ 2,344,000 2%$ 100,527,765
Fees for Service and Other Revenue $ 11,917,323 $ 12,338,611 $ 14,810,795 $ 2,472,184 20%$ 13,064,546
TOTAL $ 108,408,086 $ 110,605,958 $ 115,422,141 $ 4,816,183 4%$ 113,592,311
1.All tax revenues slightly outperformed targets
2.Significant positive variances in Utility Users Tax and Franchise Fees due to utility rate increases and
high utility usage
3.Parks and Rec, CDD Fee Revenue marginally below target
4.Variances in interest earnings/ fair market value adjustments, account for over $2.5 million of variance
5.In most cases, forecast was already adjusted as part of the 2023-25 Financial Plan, but some
adjustments may be needed at mid-year
1.Overall, 6% in net expenditure savings, $5.1 million
a)Salaries & Benefits: Staffing vacancies
b)Activation of Fiscal Health Contingency in February 2023
2.Volatility in the utility sector
a)Natural gas expenditures over budget
b)Savings in PG&E and Water Services due to heavy rainfall year
3. All departments finished the year within budget
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
1 Staffing 67,638,979$ 69,363,719$ 65,560,028$ 3,803,691$ 5%69,137,153$
2 Contract Services 9,778,408$ 14,536,567$ 13,554,492$ 982,075$ 7%10,725,560$
3 Other Operating Expenditures 4,609,947$ 5,246,239$ 4,944,824$ 301,415$ 6%5,163,024$
4 Utilities 2,761,025$ 3,146,941$ 3,073,365$ 73,576$ 2%3,302,135$
5 Total 84,788,358$ 92,293,466$ 87,132,709$ 5,160,757$ 6%88,327,872$ IndexExpenditure Type
FY 2022-23
Line2022-23
Actual
2023-24
Projected
2024-25
Projected Total
1 Storm Expenditures Utilizing Reserves $ (3,899,843)$($5,100,157)$ ($9,000,000)
2 Reimbursement Revenue (93.75%)$3,646,354 $4,768,646 $8,415,000
3 Net Total/Impact on General Fund $ (3,899,843)$ (1,453,803)$ 4,768,646 $ (585,000)
•Approximately $4 million in expenditures in FY 2022-23, mostly operating and debris removal.
•Significant projects underway and overall cost of damages expected to exceed $28 million
•204 public sites were identified for repair, rehabilitation, or debris removal.
•180 of the 204 sites have been addressed.
•9 of the remaining projects are being managed by operating programs
•15 sites require Capital Improvement Plan Engineering support
•All FY 2022-23 expenditures paid for out of the reserve which will be fully replenished based on the
City’s year end position (next slide) and as reimbursement is received
General Fund Ending Position (UNAUDITED)
A. Beginning Balance $ 40,745,506
(+) Revenue $ 134,762,075
(-) Expenditures $ (137,675,119)
B. Revenue Over/(under) Expenditures $ (2,913,045)
$ -
C. Ending Fund Balance (A-B)$ 37,832,461
D. Committed or Assigned $ 34,051,165
E. Undesignated Fund Balance (C-D)$ 3,781,296
F. Required to maintain reserve levels and fund one-time expenditures in FY 2023-24 $ 2,144,570
G. Estimated Year End Balance for Future Appropriation $ 1,636,726*
•One-time unassigned fund balance will fully replenish reserves and ensure that all one-time expenditures
planned in FY 2023-24 can be made
•Staff to make recommendation to Council at mid-year on remaining balance based on established policy
framework
* Based on adopted forecast assumptions for FEMA reimbursement timing.
•The 2022-23 LRM year-end financials were reviewed with the Citizens’ Revenue Enhancement
Oversight Commission (REOC) on September 11, 2023
Local Revenue Measure Ending Position (UNAUDITED)
1 Beginning Balance $ 5,696,864
2 Revenue $ 30,405,434
3 Expenditures $ (32,340,558)
4 Revenue Over/(under) Expenditures $ (1,935,123)
5 Unassigned LRM Fund Balance $ 3,761,741
Expenditures
FY 2022-23
Budget Actual Funds Available %
Water $24,432,158 $21,323,053 $3,109,105 13%
Sewer $13,559,102 $12,280,440 $1,278,662 9%
Revenues*
FY 2022-23
Budget Actual Variance %
Water $ 28,690,070 $ 28,338,417 $ (351,654)-1.2%
Sewer $ 22,831,271 $ 23,709,836 $ 878,566 3.8%
*Excludes debt proceeds
Expenditures FY 2022-23
Budget Actual Funds Available %
Parking $5,594,521 $5,462,561 $131,960 2%
Revenues FY 2022-23
Budget Actual Variance %
Parking $6,573,040 $7,359,163 $786,123 12%
FY 2022-23 helped put the fund in a good financial position in advance of bonding for CADPS
ARPA funds supported the continuation of 1 hour free, now replaced by Park Local Pilot Program
Updated Access & Parking Management Plan
Challenges included adjusting to new technology, communications, and community needs
Expenditures FY 2022-23
Budget Actual Funds Available %
Transit $4,704,876 $4,043,595 $661,281 2%
Revenues FY 2022-23
Budget Actual Variance %
Transit $16,043,091 $6,233,021 $ (9,810,070)*-61%
FY 2022-23 ridership increased 10% but still below pre-Covid norms
Received first two fully electric busses, additional six to be funded through FTA 5307 reimbursement grant
FY 2022-23 was first drawdown year of ARPA grant. $2.7 million drawn, $12.3 million allocated
Challenges continue around hiring drivers and being able to return to a full-service schedule
*Negative because of timing of reimbursement grants related to budget, not an under-realized revenue
•
•
•
•
•
18
20
24
10
58
53
51
37
CLIMATE ACTION, OPEN SPACE AND SUSTAINABLE TRANSPORTATION
DIVERSITY, EQUITY, INCLUSION
ECONOMIC RECOVERY, RESILIENCY & FISCAL SUSTAINABILITY
HOUSING AND HOMELESSNESS
MAJOR CITY GOAL PROGRESS OVER 2021 -23
Completed Ongoing
Major accomplishments in FY 2022-23:
1.Orcutt Tank Farm Roundabout
2.Roadway Sealing 2022
3.Curb Ramp Improvements in Laguna Lake and
Foothill/Chorro neighborhoods (Pavement Area 6&7)
4.Electric Bus Procurements
5.Parks and Recreation Interior Office Rehabilitation
6.WTP Power Storage Units with Tesla Battery Grant
7.Pedestrian Crosswalk Beacon at Ramona
8.WRRF Telemetry and Server Upgrade
9.40 Prado Road Bus Shelter Relocation
•Request to authorize the City Manager to appropriate unspent AB 939 and SB 1383 fee
revenue.
•Increased efficiency and ability to accelerate programs (waste characterization studies, rate
analyses, or outreach as mandated by State initiatives)
Funds the City’s
Solid Waste and
Recycling program
Collected on solid
waste bill and
distributed to the
City
Must be spent on
intended purpose:
diversion of waste
from landfill
What are AB939 &
SB 1383 Fees?
Purpose of resolution?
•City of SLO awarded Distinguished budget presentation award for the
2023-25 Financial Plan.
•Received “outstanding” ratings in many categories including the
strategic goals/priorities, the capital program, and the department
performance measures.
1.Receive and file the Fiscal Year 2022-23 Year End Budget report; and
2.Adopt a resolution entitled “A resolution of the City Council of the City of
San Luis Obispo, California, to delegate appropriation authority to the City
Manager for AB939 & SB 1383 fees” compliant with the Fund Balance &
Reserve Policy and corresponding legislation.