HomeMy WebLinkAboutItem 6a. FY 21-22 Unaudited Year End Report and Review of the 23-25 Financial Plan Calendar Item 6a
Department: Finance
Cost Center: 2002
For Agenda of: 10/4/2022
Placement: Business
Estimated Time: 60
FROM: Brigitte Elke, Finance Director
Prepared By: Natalie Harnett, Principal Budget Analyst
SUBJECT: FY 2021-22 UNAUDITED YEAR-END REPORT AND REVIEW OF THE
2023-25 FINANCIAL PLAN CALENDAR
RECOMMENDATION
1. Receive and file the FY 2021-22 Year-End Budget Report and unaudited year-end
results; and
2. Adopt a Draft Resolution entitled “A Resolution of the City Council of San Luis Obispo,
California, approving amendments to the 2022-23 Budget Appropriations.
3. Receive and discuss the 2023-25 Financial Plan calendar in preparation for the 2023-
25 goal-setting process.
POLICY CONTEXT
The City’s budget policies1 require that City Council review the City’s budget and financial
condition through periodic reports. Some appropriated expenses consistent with Major
City Goals have been carried over into the 2022 -2023 fiscal year as they were not
completed last fiscal year2. Additionally, this item recommends allocation of unassigned
fund balance and the creation of a new capital improvement project, both of which require
Council approval.
REPORT-IN-BRIEF
The 2021-22 Year-End Budget Report (Attachment A) provides an overview of the City’s
unaudited financial position through the fourth quarter of FY 2021-22 (July 1, 2021 – June
30, 2022). Based on the favorable year end results shown in the report, staff recommend
making three budget amendments including (1) Creation of a Capital Project for City
Facility Remodels (2) Revitalization of the Revenue Stabilization Reserve and (3)
Appropriation of Local Revenue Measure Unassigned Fund Balance .
1 Pg.23, 2021-23 Financial Plan: Interim Reporting Policy “B” The City will prepare and issue timely interim reports
on the City’s fiscal status to the Council and staff. This includes online access to the City’s financial management
system by City staff; monthly reports to program managers; more formal quarterly reports to the Council and
Departments heads, mid-year budget reviews; and interim annual reports.
222Pg 21, 2021-23 Financial Plan: Financial Plan Purpose and Organization Policy “E”
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Item 6a
DISCUSSION
2021-22 Year End Report
The 2021-22 Year-End Budget Report (Attachment A) shows that all funds ended the
year in good financial standing. Major tax revenue sources exceeded projections and
actual expenditures came in below budget for the General Fund.
The Parking Fund ended the year with revenues exceeding projections by about 13% due
to parking programs returning to pre-COVID activity levels quicker than anticipated. The
Water and Sewer Funds also ended the year in a positive position with revenues higher
than anticipated mainly due to higher irrigation demand associated with a dry winter.
Despite some one-time over-realized revenue, all three of these enterprise funds are
facing the realities of inflation and supply chain shortages in their operations that may
draw on reserves. The Transit Fund (Transit) ended the year with a negative variance in
forecasted revenues, primarily due to modified operations following the peak of the
COVID-19 pandemic and labor shortages. Fortunately, this was partially offset by reduced
operating expenditures due to continued reduced service levels.
Since the City Council adopts a two-year budget, the City’s Financial Plan policies3
stipulate that operating program appropriations not spent during the first year may be
carried over into the second year for specific purposes and with the approval of the City
Manager. The approved reappropriations are listed in Attachment A. Included in the report
are also an update on Departmental Performance Measures and Major City Goals.
Recommendation – Creation of a Capital Project for City Facility Remodels
The City approved 65 new positions with the 2021-23 Financial Plan. While remote work
flexibility has allowed the City to bring on many of these new employees, the current City
Facilities are not designed to seat the number of staff they need to accommodate on an
ongoing basis. With the 2021-23 Financial Plan, the Council appropriated $220,000 to
create additional workstations for staff located at 919 Palm Street. Additionally, one of the
recommendations for 2021-22 carryover balance is to fund a remodel and optimization of
space in City Hall’s lower-level Finance/IT Office area (990 Palm Street). This project will
maximize existing square footage to create the space for the Information Services Team
to unite with Network Services in City Hall and outfit the Finance Department with
workstations to balance with staffing levels. The downstairs remodel plays into the larger
City-wide space planning efforts and the overall need to create spaces that serve the
public and enhance organizational wellbeing.
3 Pg 21, 2021-23 Financial Plan: Financial Plan Purpose and Organization Poli cy “E”
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Item 6a
The budget for the 919 Palm Street remodel was originally placed in the General Fund
Operating Budget. Given the order of magnitude of the project4 and the unknown duration
of the remodel, staff recommend transferring the remaining budget as well as an
additional $600,000 for the 990 Palm Street remodel into the Capital Budget (Attachment
B - Section 1). Capital Budget remains allocated to the project throughout the life of the
project and allows for better tracking and control of expenditures pertaining to the overall
effort.
Recommendation – Revitalization of the Revenue Stabilization Reserve
A stabilization reserve is a mechanism to insulate the City from large fluctuations in tax
revenue. It will allow the City to manage a potential economic downturn without
immediately utilizing the operating reserve or reducing operating budgets curtailing
services to the community. The City maintained a Revenue Stabilization Reserve through
the Fiscal Health Response Plan, but eliminated it with the 2021-23 Financial Plan
Supplement. Given the economic uncertainty due to high inflation, diminishing consumer
confidence and ongoing labor market and supply shortages, staff recommend re-
establishing the reserve, especially as the City grows more reliant on sales related taxes
that are the most heavily impacted by economic downturns. Given that the one -time over-
realization of 2021-22 revenue were from tax resources, staff recommend assigning some
of the funding to re-establish the reserve (Attachment B – Section 2). The Water and
Sewer Enterprise Funds maintain a similar reserve called the “Rate Stabilization Reserve”
which have greatly assisted in maintaining operating levels during revenue downturns
due to circumstances such as droughts.
Table 1: Establishment of Revenue Stabilization Reserve Amount
Appropriation of Tax Revenue Above Projections $ 2,000,0005
Recommendation - Appropriation of Local Revenue Measure Unassigned Fund
Balance
The Local Revenue Measure (LRM) Fund is a sub-fund of the General Fund to account
for the local transaction tax from Measure G-20. The revenue measure helps protect and
maintain services and public infrastructure identified by the community such as
community safety, creek protection, addressing homelessness, keeping public areas safe
and clean, retaining local businesses, youth/senior services, streets, open space/natural
areas and other vital services and facilities.
4 Construction projects and equipment purchases which cost $25,000 or more will be included in the CIP and are
accounted for in the Capital Outlay Fund. Minor capital outlays of less than $25,000 will be included with the
operating program budgets.
5 This amount is intended to be deposited into the 115 Trust Fund as it will generate the highest yield. If it is needed
as a revenue reserve, the City will pay its budgeted unfunded liability costs out of the 115 trust. If it is not needed, the
funds will remain in the 115 Trust and advance the City’s policy priority of allocating one time funding to pay down the
City’s unfunded pension liability.
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Item 6a
As previously presented in the adopted 2022-23 Budget6, $907,000 of FY 2021-22 LRM
ending fund balance (due to revenues exceeding expenditures) will be transferred to the
capital reserve to maintain the policy level of 20% of the Capital Improvement Plan
Budget7. Additionally, given the record high sales tax remittances in FY 2021-22, staff
recommend allocating a portion of the unassigned year-end balance towards additional
requests that are ready to move forward now and align with the funding intent of the
measure. (Attachment B – Section 3). The remaining unassigned fund balance will be
considered with the FY 2022-23 mid-year review in February 2023.
ID# Table 2: Use of Local Revenue Measure (LRM) Fund Balance Amount
Unaudited 2021-22 LRM Year-End Unassigned Fund Balance $ 3,830,767
1 Transfer to Reserve (per supplemental budget) $ 907,000
2 Type 3 Wildland Engine Replacement Additional Funding $ 85,000
$415,000 is budgeted for CIP ID#46 (Project #1000554) "Fire Heavy Duty Truck (Type 3 Wildland)
in FY 2022-23. Due to inflation from the rising costs of commodities and the vehicle market, the
existing budget is not sufficient to purchase the specifications needed to replace the current Type
3 fire engine, "Engine 6". An additional $85,000 is needed for a total budget of $500,000 to
complete the replacement project.
3 Fire Recruit Academy to Address Paramedic Shortage $ 110,000
Funding to support a previously unplanned recruit academy needed to be held to fill existing
firefighter paramedic vacancies. Presently the department has four vacancies and anticipates two
additional for a total of six firefighter openings by January 1st, 2023. In addition, a grievance filed
by the labor group in accordance with Article 44 Staffing compels hiring minimum 4 firefighter
paramedics as part of the resolution process identified by the fire labor/management and HR.
4 Accelerate Fire Pumper (Engine 4) Replacement $ 900,000
The funding request will accelerate Engine 4 Replacement to ensure a sustainable reserve engine
fleet. The replacement is currently scheduled in FY 2024-25; however, the aged reserve engine has
been encountering more than an expected amount of mechanical issues and may not be a reliable
reserve apparatus over the next several years. The current budgeted amount for the replacement
project is $780,000 for FY 2024-25. Due to current market conditions, the specifications used to
build the most recent Engine replacement (Engine 3) is now expected to cost $900,000. Staff can
quickly move on this project to ensure funds get utilized in FY 2022-23. Alternative would be to
pursue debt financing to reduce the amount of cash needed in FY 2022-23.
5 Public Works - Contract Coordinator $ 65,846
This funding is being requested to fund a contract staff position of a Public Works Maintenance
Contract Coordinator following discussion with the Homeless Steering Committee. This position
would assist the department with homeless encampment cleanups and the management of
maintenance contracts and CIP projects that do not require engineering support. This position
would be funded through 6/30/23. (9-month contract)
TOTAL (lines 1-5) $ 2,067,846
Remaining LRM Fund Unassigned Fund Balance $ 1,762,921
6 2022-23 Supplemental Budget Pg. 102.
https://www.slocity.org/home/showpublisheddocument/32355/637904651318570000
7 2021-23 Fiscal Policy Section 7 – “L”
https://www.slocity.org/home/showpublisheddocument/30516/637957256176570000
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Item 6a
2023-25 Financial Plan Schedule
The attached schedule (Attachment C) sets forth the proposed Council goal setting
process and detailed schedule for the development of the City's 202 3-25 Financial Plan.
As in previous budget processes, staff will provide important information to Council during
two meetings in November and January regarding the City’s fiscal outlook, established
short- and long-range plans, and economic trends. Staff has begun the process of
seeking input from advisory bodies and the public and is evaluating the format of the
community forum for the goal setting process. The City’s extensive public input process
has been a successful approach in the past and assures the achievement of the
fundamental purpose of the City's budgetary process which is “Linking, through public
engagement and decision-making processes, the interests of the community to the
allocation of financial resources to optimize and achieve the desired results." Below is a
list of proposed key Council meeting dates:
Table 3: Key Council Dates
October 4, 2022 Approval of 2023-25 Financial Plan Schedule
November 15, 2022 Setting the Stage Workshop & The Strategic Scan
January 10, 2023 Budget Foundation Workshop
January 26, 2023 Community Forum
February 7, 2023 Mid-Year report, updated long-term fiscal forecast and Guiding
Principles for goal setting
February 11, 2023 Council Goal-Setting Workshop
April 18, 2023 Major City Goal Work Programs & Strategic Budget Direction
June 6, 2023 Preliminary Budget Review (and adoption if ready)
June 20, 2023 Financial Plan Review/ Adoption
Previous Council or Advisory Body Action
The 2021-23 Financial Plan was adopted by Council on June 1, 2021, and Mid -year
changes were approved by Council on February 15, 2022. The Revenue Enhancement
Oversight Commission (REOC) met on September 22, 2022, to review the proposed uses
of LRM Unassigned Fund Balance. The REOC supports the proposed budget changes
as they remain in line with the LRM priorities.
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
Fourth Quarter Financial Report for 2021-22 (Attachment A) will also be posted to the
City’s website for public review.
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Item 6a
CONCURRENCE
Operating departments were provided the fourth quarter financial results before the
preparation of this report. The respective fiscal officers and department analysts reviewed
the numbers and have provided department evaluations and review summaries within the
report (Attachment A). The REOC met on September 22, 2022, to review the Local
Revenue Measure (LRM) year-end financials and concurs that the recommended uses
of LRM funding in this report are consistent with the adopted ballot language.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act 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
Fiscal Analysis:
Table 4: General Fund Ending Position* (UNAUDITED)
1 A. Beginning Balance $ 47,118,071
2 (+) Revenue/ Transfers In $ 126,099,555
3 (-) Expenditures/Transfers out 8 $ (132,696,399)
4 B. Revenue Over/(under) Expenditures $ (6,596,844)
5 C. Ending Fund Balance (A + B) $ 40,521,227
6 Non-Spendable $ 90,617
7 Committed
8 Policy Reserve Level - 20% of Operating Budget $ 12,014,000
9 Local Revenue Measure Balance (See table 6-a below) $ 5,789,679
10 Insurance Fund Balance $ 1,845,935
11 Assigned to:
12 Encumbrances $ 2,541,892
13 115 Pension Trust Fund $ 2,000,000
14 CalPERS Additional Down-payment (ADP) $ 2,000,000
15 Development Services Designation $ 530,657
16 Other restricted $ 28,637
17 SLO REP $ 3,940,000
8 This amount includes over $14 million in one-time budget appropriations from FY 2020-21 unassigned fund balance
(R-11307: FY 2021-22 Mid-year Review).
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18 Economic Development Opportunities9 $ 1,416,441
19 D. Unassigned Fund Balance Before Carryover [C - (Lines 6-18)] $ 8,323,370
22 Approved City Manager Carryover Budget Per Council Policies $ 2,573,600
23 Carryover Utilizing Economic Development Funding (see line 18) $ 283,559
24 Proposed Revenue Stabilization Reserve (Recommendation) $ 2,000,000
25 E. Unaudited Year End Fund Balance (D – (Lines 22-24)] $ 3,466,211
26 F. Projected Year End Fund Balance (required for balanced forecast) $ 2,095,000
27 G. Variance from Forecast (E – F)
$
1,371,21110
* Includes Local Revenue Measure and Insurance sub-funds
Table 5: Local Revenue Measure Ending Position (UNAUDITED)
1 A. Beginning Balance $ 9,299,971
2 (+) Revenue $ 28,914,503
3 (-) Expenditures (not including encumbrances) $ (32,424,795)
4 B. Revenue Over/(under) Expenditures $ (3,510,292)
5 C. Ending Fund Balance (A + B) $ 5,789,679
6 Assigned to Projects (encumbrances) $ 1,958,912
7 Transfer to Capital Reserve (per supplemental budget) $ 907,000
8 D. Unassigned LRM Fund Balance [C – (Lines 6-7)] $ 2,923,767
9 E. Allocation of Fund Balance (Recommendation) $ 1,160,846
10 F. Unaudited LRM Year End Fund Balance (D- E) $ 1,762,921 11
ALTERNATIVES
1. The Council could direct staff not to adopt the budget changes for FY 2022-23.
Should the adjustments not be approved, the budget will remain unchanged from the
adopted 2022-23 Supplemental Budget. This is not recommended because there is
immediate need for this funding and there is adequate funding based on the actual
revenue from FY 2021-22.
9 Per Resolution 11203, $2.0 million of undesignated fiscal year 2018‐19 General Fund Balance was allocated towards
local investment into short term Certificates of Deposit to generate interest for a grant program to help offset the cost
of a Tenant Improvement permit. Due to the low interest rate environment that began shortly after, the City’s RFP for
the program was not successful and the City did not make these investments. Instead, it appropriated over $250,000
to directly offer credits for TI permits through the TIPP-Fast 2.0 permitting program and continues to seek opportunities
to optimize the use of this assigned fund balance. At the end of FY 2021-22, $1.7 million remained in the balance. Staff
recommend utilizing some of it to fund carryover requests directly related to Economic Development (See Line 23). .
10 It is recommended that these funds remain unappropriated until the final audit numbers are presented in January
2023. Once the final variance from forecast is finalized, staff will likely recommend that these funds be set aside to
make an additional one-time payment towards CalPERS which will help offset the 6.1% investment loss announced
in July 2022.
11 It is recommended that these funds remain unappropriated until the final audit numbers are presented
in January 2023. Once the final variance from forecast is finalized, staff will likely recommend that these
funds be set aside to bridge the funding gap for arterial road improvements that are currently
approximately $3.5 million short for the 2023-24 project. The arterial roads that are scheduled per the
Councils pavement management plan for repaving are Johnson Avenue and Monterey Street.
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Item 6a
2. The Council could recommend changes to the proposed 2023-25 Financial Plan
Budget Calendar. Staff would return on November 15, 2022, with an updated
calendar based on Council feedback.
ATTACHMENTS
A – FY 2021-22 Unaudited Year-End Budget Report
B – Draft Resolution amending the FY 2022-23 Budget Allocation
C – Proposed Budget Calendar for the 2023-25 Financial Plan
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Attachment A
Fourth Quarter Financial Report (Year-End)
Fiscal Year 2021-22
Introduction
The fourth quarter and year-end report provides an overview of the City’s financial position through the
fourth quarter of FY 2021-22 (July 1, 2021 – June 30, 2022) 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 2021-22 Annual Comprehensive Financial Report is published in December
2022.
Contents
General Fund Overview ..................................... 2
General Fund Expenditures............................ 2
General Fund Revenues ................................. 5
General Fund Ending Position ........................ 8
Budget Carryover: Operating Programs....... 10
Other Year-End Recommendations ............. 12
Administration and Information Technology... 14
City Attorney .................................................... 18
Finance Department ........................................ 21
Non-Departmental, Support Services .............. 23
Human Resources Department ........................ 25
Community Services Group (CSG) .................... 28
Community Development Department ........... 29
Parks & Recreation Department ...................... 38
Public Works Department ................................ 42
Solid Waste – AB 939 General Fund ................ 46
Fire Department ............................................... 49
Police Department ........................................... 54
Utilities Department ........................................ 59
A Year in Review ...................................... 59
Accomplishments and Strategic Goal
Updates .................................................... 60
Challenges ................................................ 60
Performance Measures ........................... 63
Water Fund .............................................. 64
Sewer Fund .............................................. 66
Parking Fund .................................................... 69
Transit Fund ..................................................... 72
Tourism Business Improvement District (TBID)
......................................................................... 75
Downtown SLO Business Improvement District
......................................................................... 75
Insurance Fund ................................................ 77
Debt Service ..................................................... 79
Major City Goal Updates (FY 2021-22 Tasks
Only) ................................................................ 80
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General Fund Overview
General Fund Overview
General Fund Expenditures
Overall, the General Fund finished the year in a positive position and experienced about 8% in net
expenditure budget savings. The savings can be associated mainly with staffing vacancies. In addition to
the increased turnover due to labor market trends, the City also approved over 60 new positions with the
2021-23 Financial Plan. While most of these new positions were approved to hire on July 1st, 2021, in
reality, many were not hired until much later in the year due to the time required for classification analysis,
recruitment, interviews, and applicant selection. In some cases, the salary savings were re-purposed to
hire temporary or consultant staffing to assist with the workload in the interim. FY 2021-22 also included
a very ambitious Major City Goal work plan, and many efforts were not fully achieved by year-end due to
the staffing vacancies and competing priorities.
Table 1: Expenditure Overview by Department
Detailed department information and variances explanations can be found in Section 2 of the report, but
overall, every department ended the year within the allocated budget. As mentioned above, many
departments had significant savings due to vacancies. Both of the Public Safety Departments ended the
year within less than 1% of their budgets. This was due to overtime costs and staffing cost increases from
labor agreements that were finalized after the financial plan development.
* Shown separately in order to reflect a more accurate year-over-year comparison for departments. Line 17 includes the FY
2021-22 one-time $10.2 million additional down payment to CalPERS from the General Fund (R-11307). This cost is distributed
annually between the departments based on calculated weights.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
1 Internal Services
2 Administration/IT 7,060,343$ 9,758,782$ 8,720,808$ 1,037,974$ 11%9,620,216$
3 City Attorney 897,198$ 1,395,133$ 1,356,529$ 38,604$ 3%1,132,935$
4 Finance 1,533,386$ 1,999,107$ 1,878,681$ 120,426$ 6%2,010,387$
5 Non-dept, Support Services 1,528,100$ 1,689,430$ 622,568$ 1,066,863$ 63%2,912,928$
6 Human Resources 1,215,799$ 1,620,810$ 1,608,917$ 11,894$ 1%1,480,118$
7 Public Safey
8 Fire 11,621,200$ 12,192,029$ 12,082,748$ 109,281$ 1%11,585,358$
9 Police 13,902,407$ 15,394,812$ 15,232,560$ 162,252$ 1%16,324,782$
10 Community Services Group (CSG)
11 CSG Administration 321,209$ 698,691$ 585,736$ 112,955$ 16%496,566$
12 Community Development 5,941,116$ 7,596,883$ 6,654,625$ 942,258$ 12%5,968,524$
13 Parks & Recreation 3,653,727$ 4,801,044$ 4,144,886$ 656,158$ 14%4,758,728$
14 Public Works 11,359,789$ 14,435,959$ 13,428,687$ 1,007,273$ 7%14,662,503$
15 Solid Waste (Utilities)117,439$ 332,271$ 170,497$ 161,774$ 49%282,743$
16 Total 59,151,714$ 71,914,951$ 66,487,241$ 5,427,711$ 8%71,235,788$
17 CalPERs Unfunded Liability*9,586,928$ 20,837,422$ 20,837,422$ 0%11,815,513$
18 Total 68,738,643$ 92,752,374$ 87,324,663$ 5,427,711$ 6%83,051,301$ IndexDepartment FY 2021-22
* Shown seperately in order to reflect a more accurate year-over-year comparision for departments. Line 17 includes the FY 2021-22 one-
time $10 million additional downpayment to CalPERs from the General Fund (R-11307). This cost is distributed annually between the
departments based on calculated weights.
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 2022-23.
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General Fund Overview
Table 2: Expenditure Overview by Type (Category)
Detailed expenditure variances information for each department can be found in Section 2 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, actual annual salary savings ranged from 3% to 7%; therefore, the City
assumes a conservative 3% savings in the General Fund forecast. Considering the staffing savings
assumptions incorporated in the long-term fiscal forecast, only $1.6 M (2.2%) are actual savings from
approved overall General Fund budget.
Table 3: FY 2021-22 Salary Savings
2021-22 Salary Budget 2021-22 Actual Funds Available (or "Savings")
a $70,982,840 $67,684,803 $ 3,298,037
b Assumed salary savings (3% of initial budget) $ 1,697,000
c Additional salary savings (a-b) = 2.2% $ 1,601,037
The City’s Contract Services account broadly includes budget for annual service contracts and one-time
consultant services, along with Major City Goal tasks that may not have been entirely scoped out at budget
development. The majority of the savings in FY 2021-22 can be associated with Major City Goals or
Departmental strategic goals that were not completed in the first year of the Financial Plan. Because the
City follows a two-year Financial Plan, the City Manager can approve the carryover of these budgets if the
City’s year-end financial condition allows. This year, departments requested about $1.25 million in
carryover of specific budget items that were not achieved in FY 2022-23.
Overages in Utilities are mainly due to increased use of water throughout the City’s parks and landscaped
areas triggered by the drought. As a whole, the General Fund water budget was over budget by about
$215,000; fortunately, this was offset by savings in electricity. Electricity savings were mainly realized in
the Parks Maintenance division due to a reduced level of outdoor programming with COVID restrictions,
especially around peak hours.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing 53,636,450$ 70,982,840$ 67,673,758$ 3,309,082$ 5%66,198,097$
Contract Services 6,503,545$ 11,306,192$ 9,586,014$ 1,720,179$ 15%7,816,094$
Other Operating Expenses 4,977,807$ 7,597,348$ 6,872,261$ 725,087$ 10%6,073,382$
Utilities 2,529,179$ 2,865,838$ 2,923,238$ (57,400)$ -2%2,963,728$
Covid-19 1,091,661$ 155$ 269,393$ (269,237)$ -$
TOTAL 68,738,643$ 92,752,374$ 87,324,663$ 5,427,711$ 6%83,051,301$
Expenditure Type FY 2021-22
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General Fund Overview
Graph A: 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.
While many factors account for annual budget fluctuations, this graph provides a high-level illustration of
the year-over-year growth in the General Fund Operating Expenditures. Prior to FY 2021-22, average
operating budget growth hovered around 2.9% per year which was about 2.3% lower than the average
annual CPI (Los Angeles Riverside) for the same period (5.2%). Growth spiked in FY 2021-22 due to a
number of factors discussed below, thus increasing the six-year average to 4.8%.
1. The passage of Measure G-20 increased the local transaction tax by 150%. The local sales tax
measure was recommended in order to help offset increasing costs and the infrastructure needs
of a growing city. While most of this new funding was allocated to the Capital Improvement Plan,
there are also needs on the operating side in order to deliver the CIP and maintain the City’s
growing infrastructure and deliver a multitude of services throughout the community.
2. A “catch-up” on costs of services. Over the 12 months ended June 2022, the Consumer Price Index
for All Urban Consumers increased 9.1%. The 9.1% increase index was the largest 12-month
increase since the 12-month period ending November 1981. FY 2021-22 includes some of these
increases, but the base budget will increase even more significantly with the 2022-23 Budget.
In many ways, the FY 2021-22 marked a transition year for the City
organization. It restored the work postponed by the pandemic and
allowed the City to reinvest in its core services and important Major
City Goal efforts and strategic initiatives. The next several years will
concentrate on transforming the City’s role in finding a balance
between the delivery of service and programs and capital programs
while remaining an attractive employer in a rapidly changing labor
market.
Economic
Growth
Tax RevenueCity
Expenditures
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General Fund Overview
General Fund Revenues
Table 4: General Fund Revenue Overview
The table below shows an overview of the General Fund revenue. More detail about fee revenue can be
found within the respective department write-up in Section 2
*Special Revenue Funds
Sales and Use Tax Revenue: Sales and use tax revenue far exceeded the City’s (and its Sales Tax
Consultants) projections for the year. This is consistent with trends across the state. High consumer
spending accelerated by savings accumulation and pent-up demand continued with the gradual opening
of the economy, the return of students to in-class sessions, and renewed travel activity. High inflation
through labor and supply chain issues intertwined with Fed monetary policy to counteract inflation and a
war driving gas prices to all-time highs, all greatly impacted sales tax. A highly vulnerable revenue stream,
sales tax remains a cautionary tale. Although unemployment rates remain low, fuel price instability, stock
market woes, and rising consumer prices (as raw materials and components are more expensive) could
further weaken consumer confidence and households will likely pull back on discretionary purchases as
2023 arrives. International supply chain issues show a steady recovery, but employee costs and labor
shortages may impact future spending patterns, especially in the City’s tourism realm as household
income realities catch up with pent-up demand from the pandemic lock-down.
Table 5: Year-over-year Sales Tax Comparison – FY 2021-22 Q3 (Bradley Burns)
The graph below shows the change in sales tax by major business group for Q1 2022 (January-March
2022). For the full report, visit slocity.org/finance.
2019-20 Actual 2020-21
Actual Budget Actual Variance %
1 Tax and Franchise Revenue 61,858,227$ 72,785,610$ 89,230,869$ 96,334,907$ 7,104,038$ 8.0%
2 Local Revenue Measure G 7,554,375$ 12,779,713$ 25,810,000$ 28,914,503$ 3,104,503$ 12.0%
3 Sales Tax (Bradley Burns)16,571,064$ 20,067,740$ 20,790,779$ 22,228,537$ 1,437,758$ 6.9%
4 Property Tax 18,591,951$ 19,858,530$ 20,157,153$ 21,026,460$ 869,307$ 4.3%
5 Transient Occupancy Tax 6,325,841$ 6,960,035$ 9,051,000$ 10,650,762$ 1,599,762$ 17.7%
6 Utility User Tax 5,439,144$ 5,225,979$ 5,383,000$ 5,248,478$ (134,522)$ -2.5%
7 Business Tax 2,913,665$ 2,937,176$ 2,832,000$ 2,861,863$ 29,863$ 1.1%
8 Franchise Fees 1,888,414$ 1,796,829$ 1,575,000$ 1,874,569$ 299,569$ 19.0%
9 Gas Tax *1,047,225$ 1,038,124$ 1,223,937$ 1,130,063$ (93,874)$ -7.7%
10 Cannabis Tax 81,599$ 844,939$ 1,000,000$ 998,839$ (1,161)$ -0.1%
11 Gas Tax (SB1) *1,028,491$ 851,408$ 915,000$ 914,747$ (253)$ 0.0%
12 Safety Prop 172 416,459$ 425,136$ 493,000$ 486,087$ (6,913)$ -1.4%
13 Fees for Service and Other Revenue 14,930,510$ 15,897,980$ 13,695,038$ 12,717,128$ (977,910)$ -7.1%
14 Development Review 7,257,859$ 7,089,762$ 6,971,140$ 5,970,996$ (1,000,144)$ -14.3%
15 Parks & Recreation 1,099,892$ 1,616,445$ 1,626,151$ 1,694,241$ 68,090$ 4.2%
16 Fire Services 1,442,456$ 1,500,759$ 1,443,440$ 1,494,447$ 51,008$ 3.5%
18 Police Services 916,344$ 600,406$ 619,744$ 561,909$ (57,835)$ -9.3%
17 General Government 4,213,959$ 5,090,608$ 3,034,562$ 2,995,535$ (39,027)$ -1.3%
19 TOTAL 76,788,737$ 88,683,590$ 102,925,906$ 109,052,035$ 6,126,128$ 6.0%
2021-22
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General Fund Overview
Local Transaction Tax (G-20): The local transaction tax largely mirrors the sales tax trends. FY 2021-22
marks the first full year that the City collected the additional 1% tax from Measure G-20. As a result, annual
collection increased to about $21 million from this revenue source, making it the largest tax revenue for
the City.
Property Tax: Property tax revenue continues to increase, and the City recorded an all-time high in FY
2021-22, 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 largely supported by record-low mortgage rates in 2021. As rates now increase, the
housing market is beginning to cool, and sales prices begin to plateau. Data shows that number of home
sales were down 30.3% in July 2022 compared to July 2021, but the median sale price was up 13.3%1 . The
County Assessor’s Office anticipates an additional 4% growth in 2022-23 based on Proposition 13
increases and assessed valuations of homes.
Transient Occupancy Tax (TOT): Tourism along the central coast made a strong comeback in FY 2021-22
as the region reopened and benefited from being a drive-to destination. Monthly TOT receipts reached
all-time highs largely driven by high room rates. The City received about $1.6 million more than its revenue
projections for the year. However, as inflation and gas prices increase and pent-up demand declines, the
City’s tourism program together with the countywide tourism office expect to see a growth plateau and
a possible decline in FY 2022-23.
Utility User Tax (UUT): UUT was slightly below the budgeted amount in FY 2021-22. Utility User Taxes
have historically been considered a stable tax revenue source for local governments; however, that
changed in 2017, when the Federal Communications Commission reclassified broadband internet,
voicemail, and text messaging to a nontaxable classification of communication. The result has been
declining or stagnant UUT revenue for telecommunications for most local governments. Increased taxes
due to increased energy costs (particularly over the last year) have helped offset the decline in
telecommunications taxes. As a result, the City collected nearly $200,000 more than what was collected
in the previous year. The City has further benefited from its UUT Administration contract with a third-
1 “San Luis Obispo County Housing Market.” Redfin, 20 Aug. 2022, https://redfin.com/county/342/CA/San-Luis-
Obispo-County/housing-market.
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General Fund Overview
party vendor. Staff time has been reduced nearly tenfold on collection, enforcement, and other
administrative duties required of this tax. Additionally, the vendor helped collect over $25,000 in penalties
from delinquent businesses over the last fiscal year, neutralizing the cost of the contract.
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. FY 2021-22 revenues were lower than the previous fiscal year
because businesses remitted payment based on their 2020 gross receipts, the year most impacted by
Covid-19 and the economic shutdown. Staff had anticipated the decline in revenue and the year-end result
slightly surpassed the budgeted forecast.
Cannabis Tax: Cannabis tax revenues stabilized in FY 2021-22 now that two retail locations are operating
in the City, Cal Poly is fully open, and tourism is returning to pre-pandemic levels. Interestingly, the
monthly remittal amounts were nearly the same across the entire fiscal year, unlike sales and transient
occupancy taxes which fluctuate seasonally. Staff will closely monitor this revenue during the next fiscal
year to determine how variables such as new operators entering the market will impact total cannabis
sales within the City.
General Government: General Government revenue includes all of the City’s non-departmental revenue
such as business licenses, interest earning, and rent revenue. It also includes grant and subvention
revenue which often fluctuates significantly from year to year. For example, in 2021-22 the City received
over $1.0 million in Mutual Aid reimbursement. This revenue offsets the Fire Department’s overtime
expenditures incurred from sending aid to multiple fires throughout the state. The most notable variance
in this category was a negative $1.7 million Fair Market Value (FMV) adjustment. The FMV adjustment is
essentially an accounting process 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.
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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 $3.5 million.
Table 6: General Fund Ending Position
Table 4: General Fund Ending Position* (UNAUDITED)
1 A. Beginning Balance $ 47,118,071
2 (+) Revenue/ Transfers In $ 126,099,555
3 (-) Expenditures/Transfers out 2 $ (132,696,399)
4 B. Revenue Over/(under) Expenditures $ (6,596,844)
5 C. Ending Fund Balance (A + B) $ 40,521,227
6 Non-Spendable $ 90,617
7 Committed*
8 Policy Reserve Level - 20% of Operating Budget $ 12,014,000
9 Local Revenue Measure Balance (See table 6-a below) $ 5,789,679
10 Insurance Fund Balance $ 1,845,935
11 Assigned to:
12 Encumbrances $ 2,541,892
13 115 Pension Trust Fund $ 2,000,000
14 CalPERS Additional Down-payment (ADP) $ 2,000,000
15 Development Services Designation $ 530,657
16 Other restricted $ 28,637
17 SLO REP $ 3,940,000
18 Economic Development Opportunities $ 1,416,441
19 D. Unassigned Fund Balance Before Carryover (C – (Lines 6-18) $ 8,323,370
22 Approved City Manager Carryover Budget Per Council Policies $ 2,573,600
23 Carryover Utilizing Economic Development Funding (see line 18) $ 283,559
24 Proposed Revenue Stabilization Reserve (Recommendation) $ 2,000,000
25 E. Unaudited Year End Fund Balance (D – (Lines 22-24) $ 3,466,211
26 F. Projected Year-End Fund Balance (required amount for balanced
forecast) $ 2,095,000
27 G. Variance from Forecast (E-F) $ 1,371,2113
* Includes Local Revenue Measure and Insurance sub-funds
2 This amount includes over $14 million in one-time budget appropriations from FY 2020-21 unassigned
fund balance (R-11307: FY 2021-22 Mid-year Review).
3 It is recommended that these funds remain unappropriated until the final audit numbers are presented in
January 2023. Once the final variance from forecast is finalized, staff will likely recommend that these
funds be set aside to bridge the funding gap for arterial road improvements that are currently
approximately $3.5 million short for the 2023-24 project. The arterial roads that are scheduled per the
Councils pavement management plan for repaving are Johnson Avenue and Monterey Street.
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General Fund Overview
Table 6-a: Local Revenue Measure (LRM) Ending Position
Local Revenue Measure Ending Position (UNAUDITED)
1 A. Beginning Balance $ 9,299,971
2 (+) Revenue $ 28,914,503
3 (-) Expenditures (not including encumbrances) $ (32,424,795)
4 B. Revenue Over/(under) Expenditures $ (3,510,292)
5 C. Ending Fund Balance (A + B) $ 5,789,679
6 Assigned to Projects $ 1,958,912
7 Transfer to Capital Reserve (per supplemental budget) $ 907,000
8 D. Unassigned LRM Fund Balance (C – (Lines 6-7)) $ 2,923,767
9 E. Allocation of Fund Balance (see next section) $ 1,160,846
10 F. Unaudited LRM Year End Fund Balance (D-E) $ 1,762,921
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General Fund Overview
Budget Carryover: Operating Programs
(Financial Management Manual Section 550-A)
Under the City's Financial Plan policies, operating program appropriations not spent during the first
year may be carried over for specific purposes into the second year with the approval of the City
Manager. The purpose of the following procedures is to set forth the administrative framework for
implementing this aspect of the City’s two-year Financial Plan.
Determining Balances Available for Carryover into the Second Year
The total of all favorable non-staffing variances (supplies, services, or minor capital) are available for
carryover with the approval of the City Manager, and will be generally aggregated by department
at the fund level. Under this approach, program overages within the department may be offset by
program underages. However, in no case may departmental overages in one fund be offset by
departmental savings in another.
The total amount of carryover can never be greater than the net amount that the actual ending fund
balance or working capital was greater than projected. This means that the amount available
for carryover by each department may be reduced by any amount that revenues or other financing
sources (uses) were less than projected, including any departmental budget overages.
After adjusting for encumbrances and any resource shortfalls or departmental budget overages, the
prioritization of requests will be: 1. Health and Safety 2. Specific Carryover 3. General Carryover (all
requests will still be reviewed on a case-by-case basis and exceptions may apply.)
City Manager Authority
The City Manager is authorized to program carryover balances for reappropriation except under the
following conditions, for which Council approval is required:
1. Funding a new CIP project.
2. Authorizing increases in regular staffing.
3. Implementing new programs that have significant ongoing budget implications.
Any purchases using carryover balances are subject to the City's standard purchasing policies and
procedures. This may result in the need for subsequent Council approval from a purchasing— not
budgetary—perspective.
Table C-1 Carryover available for reappropriation:
Carryover
Operating Budget Appropriation $ 92,752,374
Actual Expenditures (including encumbrances) $ (87,324,663)
Year-end (over)/under budget $ 5,427,711
Assumed Salary Savings $ (1,697,000)
Available for Carryover $ 3,730,711
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General Fund Overview
ID Table C-2: City Manager Approved 2021-22 Carryover Requests Amount
1 Arts & Cultural Recovery Grant Funding $ 50,000
2 Cultural Grants In Aid Funding $ 12,000
6 SLO Onboarding Assistance Resources (SOAR) Program $ 30,000
9 Permit Processing Improvements $ 50,000
10 990 Palm IT/Finance Office Space Reconfiguration (C) $ 600,000
11 DEI Grant Program $ 150,000
12 DEI Strategic Plan $ 35,000
13 Feasibility Study for Multicultural Center $ 40,000
14 PEN Manual Update (DEI Focus) $ 15,000
15 Homelessness Strategic Plan $ 35,000
16 919 Palm Office Reconfiguration (C) $ 144,978
17 Housing Element Program Implementation $ 35,000
18 Building and Safety Transparency Reporting $ 125,000
20 Affordable Housing Legal Counsel $ 30,000
21 San Luis Garbage $ 6,500
23 GOGov - Centralized Resident Engagement Platform $ 10,000
24 Community Workforce Agreement Study $ 42,607
26 Vacation Buyout Contingency - Retirements $ 30,000
27 Recruitment Costs - Finance Director, Fire Chief $ 24,000
29 ImageTrend Software Enhancements - Reporting and Inspections $ 11,765
32 Additional Fuel Budget - Fire Department $ 18,000
33 AB 939 Restricted Funding $ 100,065
34 COVID Policy Implementation, Case Management, and Rapid Tests $ 15,000
35 Furnishings and Technology $ 13,000
36 Contract Services - Personnel Matters $ 30,000
37 Classification and Compensation Support $ 43,500
38 Centre for Organization Effectiveness $ 40,000
39 Strategic Plan Consultant $ 60,000
40 Hotel/housing Voucher Program $ 25,000
41 Two Contract Field Service Technician Positions $ 154,525
42 Additional Tree Watering - Urban Forest (drought related) * $ 40,000
43 Maintenance Contract Increases - CPI Related * $ 45,000
44 Downtown Trash Cans - Streets $ 30,000
45 Fuel Cost Increases - Fleet * $ 150,000
46 HR Office Maintenance - Facilities * $ 8,500
47 Plant Material and Supplies - Parks Beautification Gardener * $ 25,000
48 Increased Trash Services $ 40,000
49 Portable Toilets Rental (Operationalizing Covid-19 Expenses) * $ 9,000
50 Stormdrain System Maintenance Program $ 45,160
52 Employee Appreciation Leave 2022 $ 205,000
Total General Fund Budget Carryover $ 2,573,600
*One-time requests but will be considered in the 2023-35 Financial Planning process as an ongoing need.
(C) - Require Council Approval. Recommended in October 4, 2022 Council Agenda Report – Attachment B
(Draft Resolution)
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General Fund Overview
Table C-3: City Manager Approved Carryover Requests – Reappropriation of Assigned Economic
Development Funding
Per Resolution 11203 and the Council Agenda Item #19 from December 14th, 2020, $3.4 million of
undesignated fiscal year 2018‐19 General Fund Balance was allocated towards economic development
efforts and homeless services. One of the recommendations included local investment into short term
Certificates of Deposit to generate interest for a grant program to help offset the cost of a Tenant
Improvement permit. Due to the low interest rate environment that began shortly after, the City did not
make these investments. Instead, it appropriated over $250,000 to directly offer credits for TI permits
through the TIPP-Fast 2.0 permitting program and continues to seek opportunities to optimize the use of
this assigned fund balance. At the end of FY 2021-22, $1.7 million remained in the balance. Staff
recommend utilizing some of this to fund carryover requests directly related to Economic Development,
thus freeing up unassigned general fund balance (see Table 6 line 180).
ID Table C-3: 2021-22 City Manager Approved Carryover Budget Amount
Beginning Balance: Assigned Economic Development Funding $ 1,700,000
3 Economic Development Branding $ 30,000
4 Economic Development Resources $ 44,000
5 Scorecard to Track Economic Development $ 5,000
7 Downtown Improvements (Mission Plaza, Lighting) $ 63,000
19 TIPP Fast 2.0 (Remaining Balance) $ 81,559
22 Shopping Cart Containment Program - City Grant Funding $ 60,000
Total Carryover Requests Using Economic Development Funding $ 283,559
Remaining Balance: Assigned Economic Development Funding $ 1,416,441
Other Year-End Recommendations
Revenue Stabilization Reserve
A stabilization reserve is a mechanism to insulate the City from large fluctuations in tax revenue. It will
allow City to manage a potential economic downturn without immediately utilizing the operating reserve.
The City maintained a Revenue Stabilization Reserve through the Fiscal Health Response Plan but
eliminated it with the 2021-23 Financial Plan. Given the economic unknowns, staff recommend re-
establishing the reserve, especially as the City grows more reliant on taxes that are the most heavily
impacted by economic downturns. Given that the one-time over-realization of 2021-22 revenue was from
taxes, it makes sense to assign this funding now. The Enterprise Funds maintain something similar called
the “Rate Stabilization Reserve”.
Table C-4: Establishment of Revenue Stabilization Reserve Amount
Appropriation of Tax Revenue Above Projections $ 2,000,000
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General Fund Overview
Reappropriation of Local Revenue Measure Unassigned Fund Balance
The Local Revenue Measure Fund is a sub-fund of the General Fund and is used to track revenue and
expenditures related to Local Revenue Measure G-20. It helps protect and maintain services and public
infrastructure identified by the community such as community safety, creek protection, addressing
homelessness, keeping public areas safe and clean, retaining local businesses, youth/senior services,
streets, open space/natural areas and other vital services and facilities.
As previously presented in the 2022-23 Adopted Budget , $907,000 of FY 2021-22 LRM ending fund
balance (due to revenues exceeding expenditures) will be transferred to the reserve in order to maintain
a committed reserve of 20% of the Capital Improvement Plan Budget . Additionally, given the record high
sales tax remittals in FY 2021-22, staff recommend allocating some of the unassigned year-end balance
towards budget requests that are ready to execute now. The remaining unassigned fund balance will be
reviewed at the mid-year review.
ID Table C-5: Use of Local Revenue Measure (LRM) Fund Balance Amount
Unaudited 2021-22 LRM Year End Unassigned Fund Balance $ 2,923,767
28 Type 3 Wildland Engine Replacement Additional Funding $ 85,000
$415,000 is budgeted for CIP ID#46 (Project #1000554) "Fire Heavy Duty Truck (Type 3 Wildland)
in FY 2023. Due to inflation from the rising costs of commodities and the vehicle market, the
existing budget is not sufficient to purchase the specifications needed to replace the current Type
3 fire engine, "Engine 6". An additional $85,000 is needed for a total budget of $500,000 to
complete the replacement project.
30 Fire Recruit Academy to Address Paramedic Shortage $ 110,000
Funding to support a previously unplanned recruit academy needed to be held to fill existing
firefighter paramedic vacancies. Presently the department has four vacancies and anticipates two
additional for a total of six (6) firefighter openings by January 1st, 2023. In addition, a grievance
filed by the labor group in accordance with Article 44 Staffing compels hiring minimum 4 firefighter
paramedics as part of the resolution process identified by the fire labor/management and HR.
31 Accelerate Fire Pumper (Engine 4) Replacement $ 900,000
Accelerate Engine 4 Replacement to ensure a sustainable reserve engine fleet. The replacement is
currently scheduled in FY 2024-25; however, the aged reserve engine has been encountering more
than an expected amount of mechanical issues and may not be a reliable reserve apparatus over
the next several years. The current budgeted amount for the replacement project is $780,000 for
FY 2024-25. Due to current market conditions, the specifications used to build the most recent
Engine replacement (Engine 3) is now expected to cost $900,000. Staff can quickly move on this
project to ensure funds get utilized in FY 2022-23. Alternative would be to pursue debt financing to
reduce the amount of cash needed in FY 2022-23.
51 Public Works - Contract Coordinator $ 65,846
This funding is being requested to fund a contract staff position of a Public Works Maintenance
Contract Coordinator following discussion with the Homeless Steering Committee. This position
would assist the department with homeless encampment cleanups and the management of
maintenance contracts and CIP projects that do not require engineering support. This position
would be funded through 6/30/23. (9 month contract)
$ 1,160,846
Remaining LRM Fund Unassigned Fund Balance $ 1,762,921
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Administration and IT
Administration and Information Technology
A Year In Review
Amidst the difficult recruiting environment, Administration welcomed new employees filling the positions of Diversity,
Equity, and Inclusion Manager, Sustainability and Natural Resources Analyst and various vital roles throughout the
Department. Working to rebound from the impacts of the pandemic, economic recovery, resilience, and fiscal
sustainability goals were advanced establishing new programs like the childcare startup support program which
partnered with local agencies to implement. Grant funding secured this fiscal year will further sustainable
transportation goals in the coming fiscal year. While initially delayed due to the vacancy, Diversity, Equity, and
Inclusion goals launched into motion transitioning the Human Relations Commission to the Offic e of DEI and
establishing a workplan with an emphasis on DEI efforts.
Accomplishments and Strategic Goal Updates
Office of the City Manager - The City’s communications program has grown from one to 2.5 FTE, which has enhanced
communications and outreach activities across all City departments to keep the public and stakeholder groups
informed and engaged throughout the year. This fiscal year, public communications coordination for the CSG
departments was brought under the City Administration roof, with the Communications Coordinator position now
reporting to the City’s Public Communications Manager. The communications team started regular Council Meeting
recaps, which are posted to the City’s website and sent to email subscribers, to provide the public with a brief
summary of Council’s decisions after each meeting. The communications team has also diversified how information
is provided to the public, which has resulted in fewer traditional news releases than we would normally send out but
has also resulted in a significant amount of media coverage. The team also started a significant project to update the
City’s website design, clean up the content, and provide a more accessible website for all. The new design w ent live
in September 2022.
During FY 2021-22 the City hired a new Assistant to the City Manager and that position has taken over the
management of the City’s Legislative Advocacy Platform from the City Attorney's Office. The Legislative Platform was
updated and the City has been active in taking stances on State legislation of interest to our community.
The Office of the City Manager also led the implementation of a new Community Academy program leading over 20
participants through six weeks of educational session and tours to increase overall civic literacy and awareness of
opportunities for further involvement in the City.
Office of Economic Development and Tourism - In addition to the traditional economic development activities, the
department was active in the recovery from the pandemic. This included the downtown activations like Light Up
Downtown and various activations in Mission Plaza. Local businesses were also supported directly through efforts like
the “Buy Local Bonus” and the cooperation with the TBID on the “Mid-Weekend” promotion. Systemic long-term
issues that impact the economy were also addressed including support for childcare start-ups and the initial work on
Diversity Equity and Inclusion. Due to the delayed return to normalcy and some staffing vacancies, several initiatives
were slightly postponed including the update of the Economic Development Strategic Plan and permit processing
improvements.
Office of Sustainability and Natural Resources - This past year has seen significant progress in each of the topical areas
outlined in the Major City Goal, Climate Action, Open Space Preservation, and Sustainable Transportation. For Strategy
4.1 - “Provide capacity to achieve Council’s adopted goals” staff welcomed Lucia Pohlman, Sustainability & Natural
Resources Analyst, in November 2021 and also hired two interns in order to build additional capacity. Key
relationships across City departments, as well as with non -profits and community partners, also remain robust. For
Strategy 4.2 - “Continue to update and implement the Climate Action Plan for carbon neutrality” the Office continued
its model of planning and doing; staff prepared the all-electric new buildings ordinances that were adopted by City
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Administration and IT
Council, further developed the Better Building SLO program for energy efficient retrofits in existing buildings, and also
conducted all of the technical stakeholder workshops, culminating in the recent Climate Party at Sinsheimer Park, in
preparation for bringing the Climate Action Plan 2023-2027 work plan to City Council in January 2023. An unplanned
addition to this part of the work plan was the recent Request for Proposals for community-based electric vehicle (EV)
fast-charging infrastructure at City-owned parking locations due to the rapid uptake of EVs and surging gas prices. For
Strategy 4.3 - “Preserve and enhance open space and the urban forest” primary activity was centered around
advancing three separate conservation easement projects (Miossi La Cuesta Ranch, Tank Farm Wetlands, and Froom
Ranch Specific Plan) as well as opening the City’s recent Miossi Open Space property to the public along new trails
including a connection to Poly Canyon in partnership with Cal Poly SLO. A comprehensive program analysis for the
City’s Urban Forestry Division was also completed, along significant work towards the preparation of the Urban Forest
Master Plan; a study session to discuss findings and preliminary recommendations with City Council is scheduled in
January 2023. Strategy 4.4 - “Alternative and sustainable transportation” was led by the City Public Works Department
and saw the completion and opening of the Railroad Safety Trail bridge overcrossing, significant pedestrian and bicycle
safety upgrades with area pavement plans throughout the City, and plans and specifications for the forthcoming North
Chorro Neighborhood Greenway. The City is also rapidly transitioning its fleet to EVs, including two transit buses
anticipated by the end of the summer. For Strategy 4.5 - “Planning and implementation for resilience” - staff have
been active with the Resilient SLO planning and community engagement process in partnership with t he Community
Development Department that will culminate with City Council’s consideration of the Climate Adaptation and Safety
Element (CASE) in October 2022. Staff remained diligent with flood control and open space fuel reduction efforts,
while also expanding our relationships with the Zone 9 Water Conservation and Flood Control District and with the
SLO County FireSafe Council.
Community Promotion - This fiscal year the Community Promotions program, led by the Promotional Coordinating
Committee (PCC) advanced several projects and programs related to the economic recovery and quality of life for the
community and visitors. To name a few, the PCC awarded 22 grants to arts, cultural or recreation based non-profit
organizations in the community. They developed and funded the second-year programming of the Think Differently
educational series, this year focusing on sustainability and DEI within events that garnered participation from over
350 community members. They led the Support Local work program aimed at promoting local businesses in SLO,
which include the DEI focused Business Insider Series on social media, robust media campaign promoting shopping
local, public relations focus, and a seasonal promotion called Buy Local Bonus during the holidays. Lastly this year , a
record-breaking result as over 100,000 people were served through the financial partnership with the SLO Chamber
for the operation of the Visitor Center.
Office of the City Clerk - The Office of the City Clerk completed the implementation of new agenda management
system creating significant efficiencies and time savings for staff. The agenda packet process for City Council along
with seven of the Advisory Bodies are all completed using the system. 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 - The Office of DEI was successfully established with the hiring of the City’s
inaugural DEI manager and DEI Management Fellow. In the first six months of staffing, the office developed and
executed a Diversity speaker series for the public, incorporated a new DEI section in the City’s Legislative Platform,
successfully transitioned the Human Relations Commission (HRC) from the Community Development Department to
the Administration and IT Department and implemented a workplan for the commissioners with a particular emphasis
on DEI efforts within the City. Additionally, staff executed a MOU with Cal Poly which outlines efforts to align and
collaborate on DEI initiatives in the City and across campus. The Office of DEI also worked internally with various
departments to provide consulting and aid in embedding DEI into hiring, recruitment, promotional and onboarding
practices along with several other City projects and initiatives. This included the ongoing development and
management of the internal DEI committee. Currently the Office of DEI is also managing the HRC GIA grant program
for FY2022-23 and the launch of the FY2022-23 DEI High Impact grant program for local organizations which has a
total of $300,000 in available funding.
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Administration and IT
Information Technology Network Services – Network Services brought the radio backend replacement project across
the finish line, upgrading all six radio sites with a simplified system leading to reduced maintenance for the City and
consolidated vendor contracts. Progress was made on the KVEC Hill Radio Tower and Shelter with 100% construction
plans completed, ready to break ground in the coming fiscal year. Control Systems Administrators remain heavily
involved with the two major Utilities construction projects in process: the Water Resource Recovery Facility upgrade
and the Water Treatment Plant upgrade. IT support services handled 3,931 support tickets over the year covering the
entire range of support activities including hardware and software installation, upgrades, and troubleshooting.
Information Technology Information Services – Information Services completed an integration with the existing asset
management platform (CityWorks) bringing uniformity to asset management programs and setting the template for
future integrations. Information Services conducted three successful recruitments filling resource needs for the City’s
Enterprise Systems and Geographic Information Systems.
Challenges
The difficult recruiting environment presented challenges to the Department delaying some initiatives planned for
the fiscal year. While many of the positions were filled through extensive recruitments, an RFP was released to secure
Technology Project Management Services due to the repeated unsuccessful recruitment attempts. Throughout the
year constraints in the supply chain were experienced triggering the need to extend hardware warranties to secure
support in the interim. Information Technology staff adapted to the struggles by placing orders in advance of project
timelines to accommodate the extended delivery times and keep technology projects on schedule.
Performance Measures
Table 7: Administration and Information Technology Performance Measures
Objective Measure 2021-22
Target
2021-22
Actual
Provides City-wide
communications to the
community.
Open City Hall Participant Satisfaction Rating 90% 94%
# of City News Releases 150 148
Provides reliable IT resources to
the organization and community.
Maintain City Network Reliability Uptime Status 99.9% 99.95%
Data backed-up in Gigabytes 173,000 185,448
Number of GIS layers maintained 905 915
Economic Stability
Contacts with businesses regarding starting, expanding,
and/or staying in the City 75 85
One-time funds used for direct aid to local businesses
and non-profits4 $500,000 $320,000
Supports our commitment to
sustainability and provides open
space resources to the
community.
# of Green Team5 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 06
Strengthens the City’s
commitment to advancing
Diversity, Equity and Inclusion
# of City-wide DEI Trainings Offered 10 21
Funds for High-Impact DEI Grants Awarded $150,000 $07
4 The spending has been postponed due to the delayed return to normalcy from the pandemic, but is requested to
carryover and be completed in the 2022-23 fiscal year.
2The Green Team is a cross-departmental collaborative body that helps guide the approach of the CAP Pill ar ‘Lead
by Example: Carbon Neutral City Operations’. As noted in the Major City Goal Work Program, in 2021 -23, the
Green Team will focus on implementing the carbon neutral municipal operations plan, completing the Resilient
SLO project, and facilitating all-staff sustainability training.
6 Two Conservation Plans are anticipated to be completed in 2022-23 (Righetti Hill and South Hills).
7 FY 2022-23 DEI high impact grants will have an extended grant amount of $300,000 to account for the missed
grant cycle in FY 2021-22.
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Administration and IT
Variance Analysis
Table 8: Administration and Information Technology Variance Analysis
Salaries and Benefits – The savings experienced in staffing came from vacant positions during the windows of
recruitment. The difficult recruiting environment prolonged recruitments causing savings to accumulate; some of the
savings were partially offset to fund supplemental positions to support vacancies and for recruitment resources.
Contract Services – The 19% savings in contract services correlate with the aforementioned vacancies and delay with
filling positions. The DEI Manager position was onboarded later than projected d elaying initiatives set forward for
fiscal year 2021-22. Several tasks supporting the Diversity, Equity and Inclusion Major City Goal planned for fiscal year
2021-22 will advance in fiscal year 2022-23 including developing a strategic plan for the Office of DEI, supporting a
feasibility study for a community based multicultural center, updates to the public engagement and noticing manual,
and DEI high impact grants. Additional savings are associated with the Economic Development program, with efforts
currently in progress, but not yet expended. The Arts and Cultural recovery grant funding is underway with grants to
be awarded in the first quarter of fiscal year 2022-23 as well as funding for other activities related to economic
recovery, resiliency and fiscal sustainability.
Other Operating Expenses – A majority of the 6% savings realized in other operating expenses are related to program
expenditures that were delayed or implemented differently than planned for the Office of DEI and the limited use of
training funds in certain programs due to the pandemic.
Utilities – Utilities inclusive of electric service and communication services ended the year slightly over budget at 101%
consumption. Overages are attributed to the rate increase by PG&E on electricity which powers the South Hills
transmitter site critical to the City’s network communications. The growth in the City’s workforce also pushed
communication services over budget acquiring additional phonelines and workgroup licenses to resource staff
appropriately.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing 3,471,388$ 4,285,379$ 4,004,586$ 280,793$ 7%4,757,346$
Contract Services 1,962,650$ 3,381,041$ 2,724,922$ 656,119$ 19%2,910,732$
Other Operating Expenses 1,300,938$ 1,766,316$ 1,663,496$ 102,820$ 6%1,625,829$
Utilities 325,368$ 326,046$ 327,804$ (1,758)$ -1%326,309$
TOTAL 7,060,343$ 9,758,782$ 8,720,808$ 1,037,974$ 11%9,620,216$
Administration/IT FY 2021-22
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City Attorney
City Attorney
A Year In Review
This first year of the 2021-23 Financial Plan was designed to keep the department staffed in a manner sufficient to
maintain the necessary level of service delivery while launching, participating in, and concluding a department
organizational assessment. Course corrections were made throughout the year including contracting out code
enforcement legal support to a local law firm via an informal request for proposals and postponing the hiring of a
deputy City Attorney until the position was made permanent. By year end, the organizational assessment was
completed by the consultant, staff had recruited and hired two new regular employees, and the department was
prepared to transition to a new office space large enough to comfortably house its increased work force.
Accomplishments and Strategic Goal Updates
Staff attorneys have been able to provide legal advice and support to Council, Planning Commission, and staff
throughout the organization to help advance, or bring to completion, dozens of important projects, including:
The implementation of SB 1383’s solid waste mandates and reorganization of the Integrated Waste
Management Authority, which required the drafting and review of the joint powers agreements, ordinances,
franchise agreement amendments, and rate setting documents.
Negotiation with the County regarding satisfaction of RTA’s conditions of approval related to futu re
construction of the Elks Lane realignment.
Reached a significant milestone in the Citywide Contract Templates project by drafting and updating seven
new contract templates to be used Citywide, developing staff training materials, and creating a Contra cts
SharePoint site where all City staff can access approved templates and training materials.
Drafted and negotiated the agreement for the City’s nearly $4 million grant to the SLO Reparatory Theatre
to assist in the construction of SLO Rep’s new facility.
Assisted Planning staff with completing the City’s 6th Cycle Housing Element.
Amendments to the City’s cannabis regulations.
Assisted the Homelessness Response Manager in drafting the City’s Compassionate Assistance, Mitigation
and Prevention Standards.
Assisted Public Works and Community Development staff in drafting the permanent Parklet ordinance.
Assisted Planning staff with drafting the Inclusionary Housing Ordinance update.
Managed and defended the City and its employees in several significant litigation matters, including federal
civil rights actions, challenges to cannabis permitting actions, a California Voting Rights Act demand,
development permitting and CEQA challenges, as well as more routine trip and fall actions.
Challenges
The department organizational assessment, which began promptly in July 2021, unfortunately dragged on months
past its estimated completion date and required significant oversight by the Legal Analyst, Assistant City Attorney and
City Attorney. This meant the attention of existing staff was pulled away from other projects for longer than expected,
and the hiring of new staff and implementation of recommended process changes was significantly delayed. Staff
managed this issue by reprioritizing projects and dropping from the fiscal year those projects which could be pushed
without detrimental effect on City goals, objectives, and service delivery.
Litigation and claims intensified during the year, including challenges to housing development approvals, cannabis
regulatory actions, and police civil rights actions. Despite overwhelming success in defending the City against a variety
of meritless cases, the management and support for the City’s defense demanded an unfortunately disproportionate
level of staff and attorney time, and public financial resources. Due to the nature of litigation, complete avoidance is
improbable and the City’s efforts to mitigate issues via property maintenance, staff training, risk analysis and
negotiation with complaining parties never fully eliminate the risks. As with the organization assessment delays, staff
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City Attorney
assessed the increased attention demanded this year by litigation and either found qualified outside counsel to
represent the City or reprioritized workload to allow staff sufficient time to focus on the litigation matters.
Performance Measures
Table 9: City Attorney Performance Measures
Strategic Goals Measure
2021-22 Target/
Expected
Volume
2021-22
Actual
Timely and Responsive legal
advice and support
Strategic Goal: Department
Objectives
Administrative Citation Appeals received by the City 150 122
Appeals closed without need of a hearing8 25 39
City assisted corrections to defective appeals to
allow access to hearing 15 18
City facilitated hearings on the record without need
for personal appearance by Appellant 50 29
# of hearing days scheduled 7 14
Legal Training & Compliance
Strategic Goal: Department
Objectives
# of Council, Staff, and Advisory Body legal
trainings, legal updates, and compliance advisory
sessions
12 69
Municipal Litigation &
Prosecution Management
Strategic Goal: Department
Objectives
Percentage of Claims Resulting in Litigation <5% 14%10
Liability Claims Against the City Reviewed/Managed 70 67
Variance Analysis
Table 10: City Attorney Variance Analysis
Salaries and Benefits – Over the course of the fiscal year, City policy and department hiring decisions were made that
varied from the original assumptions of the Financial Plan, but combined they had a result of leaving an amount in
excess of the 3% assumed salary savings. Among other things, a COLA in July 2021 and an additional 40 hours of
8 Closed in some way that did not include a decision being issued (e.g. withdrawn by appellant, untimely filed, voided by the
issuing department)
9 The ongoing time and attention demanded by the organizational assessment and the delay in bringing that effort to a close
(so its staffing and other recommendations could be implemented) has reduced the amount of time available for planning and
presenting these legal training sessions.
10 This high percentage is from nine cases. Eight of those are: a person injured during after-hours, reckless use of a City park; an
unfair labor practices charge; a writ petition to force the City to permit a disqualified cannabis business applicant; damage done
to a gas main during a contractor’s work for the City; a writ to force the issuance of a permit for a yard structure built in
violation of the building code; injuries due to a trip and fall on private property near a City sidewalk; a bicyclist fatality; and
injuries due to a limb falling from a privately owned tree. The eighth lawsuit was known to not involve the City but was filed to
include it anyway out of the plaintiff’s abundance of caution. The City was eventually dismissed from the case following
production of discovery responses that supported its non-involvement.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing 770,049$ 888,039$ 849,608$ 38,431$ 4%1,045,075$
Contract Services 29,185$ 116,299$ 116,212$ 87$ 0%63,395$
Other Operating Expenses 97,965$ 390,794$ 390,708$ 86$ 0%24,465$
TOTAL 897,198$ 1,395,133$ 1,356,529$ 38,604$ 3%1,132,935$
City Attorney FY 2021-22
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City Attorney
vacation sellback related to COVID in December drove costs higher, but a decision to hold off hiring a deputy City
Attorney, until a regular, permanent position was created, generated savings. Ne ar the end of the fiscal year, City
Manager approval was given to utilize the savings toward the department office space transition and several contracts
for outside counsel.
Contract Services – In addition to the funds transferred near year end to use towards electrical, furniture, and other
work/purchases needed for the department to transition into its new office space, the budget was used towards code
enforcement and other contract outside counsel needs identified by staff.
Other Operating Expenses – Due to the department office space transition, more than predicted was spent on office
supplies but this was a one-time occurrence and was offset by savings in other budget lines. Overall, Contract Services
an Other Operating Expenditure Budgets were significantly higher in FY 2021-22 than in FY 2022-23 because not all
approved staff were on board and budget was moved to these accounts in order to pay for contractual legal services
in order to keep up with workload.
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Finance Department
Finance Department
The Year In Review
The Finance department added two positions with the 2021-23 Financial Plan to help right-size the fiscal operations
with the City’s growth and the workload associated with protecting the City's financial stability. The new positions
have allowed the department to implement significant efficiencies and workload distribution in several divisions.
Consistent with current labor trends across the nation, the department experienced its share of turnover and
prolonged vacancies. While posing some difficulties, the employee transitions nurtured additional cross-division
training and strengthened internal procedures manuals – both of which will make the team more resilient in the long
run.
With the economic reopening over the last year, the Revenue and Budget divisions closely monitored major economic
trends and considered implications to the City’s long-term forecast. In an unusual circumstance, staff brought forward
a revised mid-year report that exponentially increased the forecast presented in the original Financial Plan and
allowed an opportunity for immediate investment into the community and addressing of emergent needs. The
department has also been at the forefront of the State and Local Fiscal Recovery funding through the American Rescue
Plan Act and applicable use in accordance with the U.S. Treasury’s Final Rule.
Accomplishments and Strategic Goal Updates
One of the great accomplishments for the department was the send-off of the planned $12.4 million additional down
payment to CalPERS in April 2022. This payment caught up three years of planned additional contributions to keep
track with the Fiscal Health Response Plan deliverables. The prudent fiscal approach during the pandemic years
allowed for this payment to be realized. It will help achieve the City Council goal to reduce the unfunded pension
liability and increase financial stability. As an internal service department, many of team’s accomplishments are the
incremental improvements made on a daily basis to maximize revenue collection, ensure adherence to appropriate
procurement and expenditure administration, and organization-wide support services.
Enhanced business license and tax management program and compliance enforcement
Realized efficiencies through the new Utility Users’ tax collection program
Improvements to managing contractual third-party risk transfer and certificate of insurance tracking
Important modifications to the Capital Projects module
Adoption of an update to the City’s Purchasing Policy including considerations for a Local Preference and
Sustainability in procurement
Improved audit preparedness and timely transaction for year-end financial report deliverables.
Revised and automated procedures for managing infrastructure related agreements
Re-launch of the Finance website for easy access to financial information including voluntary disclosures.
Challenges
The fact of the matter is the Finance Department is still adapting to the Oracle ERP system and all of its customizable
configurations. Much like a relationship, staff are learning new things about Oracle every day and finding new ways
to do things that best fit the organizational needs. While at times challenging today, staff are laying a foundation for
an optimized system in the future. The accounting division also implemented additional quality control measures that
ensure accurate and timely financial management until the needed reconfigurations are done. With the help of IT and
Oracle Consulting Services (OCS), the division has a planned path forward to achieve system optimization.
An upcoming challenge will be the recruitment of a new Finance Director as the current department head announced
her retirement for the end of December. In coordination with HR, the Department will be launching a national
recruitment in parallel with the Fire Chief recruitment. In addition, the City’s only Payroll Specialist took a promotional
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Finance Department
position as the Fire Department analyst and filling the resulting vacancy will be critical. However, staff also took this
as an opportunity to advance some of its strategic evaluation work for the optimization of the Finance operations.
Additionally, continued economic uncertainty will require constant vigilance, analysis, and modeling of revenue and
expenditure trends to ensure the City’s fiscal sustainability and successful delivery of programs and services.
Performance Measures
Table 11: Finance Performance Measures
Objective Measure 2021-22
Target
2021-22
Actual
Enables & enhances transparency,
accountability & integrity.
Strategic Goal: Fiscal Policies
# of calendar days following year-end until ACFR is issued 170 180
# 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 debt per capita (General Fund) based on
annual debt payment $44 $43
Twelve-month total rate of return/City portfolio11 3% -3.66%
Variance Analysis
Table 12: Finance Variance Analysis
Staffing – The department ended the year with about 2% savings which is slightly below the City’s assumed salary
savings rate (3%) due to the normal ebb and flow from vacancies. The two longest term vacancies were for the
Purchasing Specialist and the AP Accounting Assistant positions. The department transferred some of these savings
into the Contract Services budget to hire temporary staff through a staf fing agency; this allowed the department to
continue operating at full capacity.
Contract Services – The majority of the savings in the Contract Services category were due to the budgeted cannabis
audits that were not finished by the consultant in FY 2021-22. The audits are underway and going slower than
expected due to the newness of the process and the Cannabis Manager vacancy. Ultimately, the audits will be paid
for using FY 2022-23 Budget and with a new Cannabis Manager on board, staff will continue to work with its cannabis
11 Based on the June 2022 Investment Report. While ultimately the City aims for a long -term rate of return of 3%,
market volatility can cause swings from year to year. This was especially true during the pandemic years due to the
Fed’s monetary policy to assist economic activity and recovery. The 0 -5 Treasury Index measured a twelve-month
rate of return of -3.68%; therefore, the City’s portfolio is performing slightly better than the index. As a government
entity, the City’s primary investment objective is to achieve a reasonable rate of return on public funds rather than
the maximum generation of income, which could expose the City to unacceptable level s of risk. Unfortunately, the
City was not immune to the large market value adjustments that were triggered by the Fed’s interest rate increases.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing 1,250,525$ 1,450,212$ 1,420,787$ 29,425$ 2%1,584,517$
Contract Services 264,923$ 494,877$ 428,577$ 66,300$ 13%371,970$
Other Operating Expenses 17,938$ 54,018$ 29,318$ 24,701$ 46%53,900$
TOTAL 1,533,386$ 1,999,107$ 1,878,681$ 120,426$ 6%2,010,387$
Finance FY 2021-22
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Finance Department
auditor (HdL) to speed up the process for timely completion in the future. There were also savings in various small
contracts and staff were able to bring some services like the annual LRM reports in house achieving efficiencies an d
monetary savings.
Other Operating Expenses – Consistent with many other departments, Finance had savings in its education and training
budget. However, staff did take advantage of many training opportunities and conferences, all of them offered online
without related travel cost. There were also reduced printing and mailing costs due to the continued effort to move
financial documents online and staff encouraging customers to use its online business license renewal portal as
opposed to the paper renewals.
Non-Departmental, Support Services
The Non-Departmental and Support Services cost centers are managed by the Finance Department but are used for
expenditures with citywide benefits.
Table 13: Non Departmental, Support Services
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 are able to withstand these costs increases due to
savings from vacancies throughout the year and FY 2021-22 was not different. The 2021-22 contingency budget
shown above includes Council approved parameter amounts for all bargaining units that had not been negotiated
at the time the budget was created (April 2021). The remaining balance will fall to fund balance and be considered
part of the General Fund’s overall salary savings amount.
Unemployment Insurance – Unemployment insurance costs have dramatically decreased since the onset of the
pandemic. The average quarterly cost dropped from over $25,000 during the height of the pandemic to less than
$5,000 based on the latest payment. The City reduced the budget significantly for FY 2022-23 based on this
normalized trend.
Other Operating Expenditures – This line includes budget for expenditures like postage, membership costs for the
League of California Cities, print and reproduction, and miscellaneous materials and supplies. The majority of the
savings were due to reduced need for printing and postage as the City continues to transition its materials online.
Moving forward, these savings will be partially offset by the increase in postage and material costs.
Covid-19 Expenditures – The COVID-19 account was created as a centralized way to track and record unbudgeted
costs associated with the COVID-19 health emergency (PPE, enhanced cleaning, porta potties, etc.). These costs have
significantly decreased over the last 12 months. This account was deactivated for the 2022-23 budget and
departments have been asked to “operationalize” any ongoing cost associated with COVID-19 as most efforts have
now become standard operating procedure.
Bank/Merchant Fees - The negative balance in this category was caused by bank fees that were historically not
budgeted for. Generally, these charges are covered by the interest earnings on the accounts. In the recent low
interest rate environment, applicable rates-of-return have not been sufficient to cover the cost of doing business. It
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing Contingencies -$ 1,336,815$ -$ 1,336,815$ 100%2,429,000$
Unemployment Insurance 101,575$ 120,000$ 20,000$ 100,000$ 83%40,000$
Other Operating Expenditures 144,214$ 162,460$ 126,584$ 35,876$ 22%363,928$
Covid-19 Expenditures 1,091,661$ 155$ 269,393$ (269,237)$ -173478%-$
Bank/Merchant Fees 190,650$ 70,000$ 226,591$ (156,591)$ -224%80,000$
Total Non-Dept/Support Services 1,528,100$ 1,689,430$ 642,568$ 1,046,863$ 62%2,912,928$
Category FY 2021-22
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Finance Department
is important to note that this line includes bank fees for all funds, which will be distributed to the respective
Enterprise Funds with the annual Cost Allocation Plan.
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Human Resources
Human Resources Department
A Year In Review
The year ended with many accomplishments along with some unexpected challenges, particularly an unprecedented
demand for recruitment and onboarding of staff; the City added 65 FTEs as part of the 2021-23 Financial Plan and
the Great Resignation/Reshuffle which increased staff turnover to 15%, previously trending at an average of 12% in
the last five years.
The Department completed a Benchmark Compensation Study that was presented in February 2022 as part of its
commitment to the public and labor partners, which found that many of the jobs at the City are not receiving
competitive salaries, compared to similar communities. In fact, most of the positions that were evaluated were
below the market median salary compared to similar communities (i.e. size, servic es, complexity, etc.) locally and
across California. The purpose of the study was to provide objectively verifiable data to help guide contract
negotiations with the City’s largest employee group, the San Luis Obispo City Employees’ Association (SLOCEA), and
conversations with Unrepresented Management and Confidential groups. Council approved a three-year successor
resolution for the unrepresented groups in April 2022 which incorporates adjustments based on the study, and the
City is still actively in negotiations with SLOCEA, hoping to reach agreement soon as their contract expired on June
30, 2022.
Even with the results from the Compensation Study, the Human Resources Department successfully recruited and
onboarded 37% of the City’s workforce, between new hires and promotions, to enable all departments to continue
to provide high quality services to the community. It developed a Supervisor’s toolkit that provides a wealth of
information about onboarding and guidance to set up the supervisors and new employees for success. While
experiencing vacancies and turnover of its own, the vacancies within HR were filled by individuals at lower wages
and the vacancies themselves provided savings which supported temporary consultan t services to supplement
existing staff to meet new demands.
As the COVID-19 pandemic continued to surge and the CDC and County Health guidance changed, staff
communicated with employees and their supervisors to promote use of best practices and provided resources for
their health and safety in compliance with Cal/OSHA’s Emergency Temporary Standards and public health guidance.
This included purchasing an ample supply of rapid tests for use at work or at home to reduce the risk of spreading
COVID-19 in the workplace. Staff also relied on the best available technology to hold online meetings, trainings, and
interviews that previously were in-person events.
The Human Resources and Utilities Departments collaborated on a reorganization of the Ris k Management and
Safety roles to promote an integrated safety program and foster a culture of safety with targeted safety compliance
within the Utilities Department. A new Safety Officer and Risk Manager were recently hired and will be working
together in the Human Resources Department. Following the May 2021 officer fatality within the Police Department,
the City started providing preventative mental health services to City employees and will continue to partner with
the Police and Fire Departments to continue this program. In addition to bolstering employee wellbeing, this
program appears to be preventing workers’ compensation claims.
Human Resources staff, in partnership with staff in Information Technology and Finance, continued to enhance the
City’s Human Capital Management System. Over the past year, staff implemented the City’s first employee self -
service Open Enrollment, and progression grade ladders, which reduced manual data entry for these areas by 50%,
thus reducing the chance for human error while increasing efficiency.
At the end of the fiscal year, the Department maximized the remainder of its budget to locate to a larger fa cility as
part of an overarching space plan for departmental offices. This move was not anticipated when the previous budget
was established and Facilities Maintenance, Information Technology, and Administration staff all contributed to this
effort.
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Human Resources
Accomplishments and Strategic Goal Updates
The Department met its goals set in the FY21-23 Financial plan by:
1. Continuing to provide high-quality integrated human resources with the resources available, both in terms
of budget and in staffing.
2. Providing tools and opportunities to employees to reach their full potential through leadership training and
first opportunities for internal promotions. The Supervisor’s Toolkit provided lots of excellent information
about opportunities for education and information for success in the workplace.
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 were due to unexpected events including:
o Increased demand for recruitments and onboarding. Costs associated with this increase included physical
exams, fingerprinting services, advertising, and other onboarding costs so cutbacks in other areas offset these
expenses to ensure priority needs were met.
o New COVID-19 strains, guidance, and legal requirements for protecting the health and safety of staff and loved
ones; while Ventures and Contingencies paid for the supply of rapid tests, the HR budget absorbed some costs
to implement protocols such as producing signage for buildings, and the cost of publications and webinars to
inform the process, for example.
o Higher than average liability claims and associated expenses. Since the undesignated insurance fund balance
was sufficient to pay for these expenses, an allocation was made from the fund to the budget to cover the
unbudgeted expenses.
o Generally making sure available funds were targeted for the most important strategic goals for benefit of the
departments and City as a whole. The Department managed these unexpected challenges and changes by
positioning staff in roles which were best suited to their talents to address immediate and long-term needs of
City employees. Members of the Department were resourceful and resilient as they adapted to these changing
conditions, and all contributed to achieving the major city goals for the Department throughout this t ime.
Performance Measures
Objective Measure 2021-22
Target
2021-22
Actual
Integrated HR
Services
Average days between injury and workers’ compensation claim filed. 4 5
Achieved lower severity of workers’ comp claims than the risk pool Yes Yes
Liability claims payments under the Self-Insured Retention amount Yes No12
Employee
Development &
Growth
Percentage of on-time employee performance evaluations 95% 86%
Percentage of internal promotions 40% 49%
Training sessions coordinated 35 56
Engaged and Aware
Culture
Number of policies communicated 5 44
Informational sessions coordinated 80 35713
12 As detailed in the Insurance Fund summary, the cost of claims this year exceeded the appropriated budget for payments and
an allocation from the undesignated insurance fund was authorized to cover these costs; however, not all of this allocation was
needed, and the unexpended amount will be returned to fund balance.
13 Human Resources staff have communicated more policies and held significantly more informational sessions this year,
primarily due to the changing conditions associated with the pandemic as well as increased recruitment.
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Human Resources
Variance Analysis
Table 15: Human Resources Variance Analysis
Salaries and Benefits –The salaries and benefits 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 year.
Contract Services – A large portion of the Department’s budget consists of contract services for a variety of purposes.
At the end of the year, there are no significant variances to report.
Other Operating Expenses – There were additional unanticipated furnishings and supplies needed to set up the new
office space to function properly which resulted in additional expenditures. These expenses were one -time in nature
and will not occur on an ongoing basis.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing 884,783$ 1,025,273$ 1,009,882$ 15,391$ 2%1,105,024$
Contract Services 279,659$ 542,975$ 541,922$ 1,053$ 0%323,794$
Other Operating Expenses 51,357$ 52,563$ 57,112$ (4,550)$ -9%51,300$
TOTAL 1,215,799$ 1,620,810$ 1,608,917$ 11,894$ 1%1,480,118$
Human Resources FY 2021-22
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Community Services Group – Administration
Community Services Group (CSG)
Community Development • Parks & Rec • 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, and City staffing transitions. The CSG onboarded and hired all four department analysts, a Business
Manager, and an Administrative Assistant in FY 2021-22 As the CSG Analyst Team has begun to form, so
have opportunities for efficiency, communication, and collaboration among the four departments. The
team has been working primarily on budgetary support as Fiscal Officers for their respective departments,
but also regularly partner to support department needs. This has included: the start of a budget and Oracle
101 guide for CSG managers and supervisors to reference and track their budgets; a streamlined City
Manager Report routing system; an Administrative Support Training for onboarding new admin
professionals; policy work such as an Abandoned Shopping Cart Ordinance requiring business compliance
with State laws; and analysis on processes and procedures on tracking specialized budgets including the
four Enterprise Funds, Impact Fees, and Development Services Designation.
Additionally, a year-long effort began on the feasibility of implementing a centralized resident
engagement platform that would replace the "Report an Issue" page on the City website in order to:
organize and streamline public requests and inquiries to reduce the current 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. A vendor was selected and implementation of the system citywide
will occur in FY 2022-23.
With all of the accomplishments of the CSG in FY 2021-22, the core focus of CSG remains to seam
Community Development, Parks and Recreation, Public Works, and Utilities together through policy, fiscal
and collaborative support efforts to provide quality service to the community.
Finally, CSG Admin has also managed and guided the completion of a CIP Process Improvement study and
the hiring of a CIP Process Improvement Manager to implement the 52 recommendations in the study.
Significant efforts have focused initially on right sizing the staffing to produce the City’s CIP Program
(which tripled with Measure G-20 adoption), changing some jobs to better reflect the services needed,
and creating new policy so that efficiencies and collaboration cross departmentally can occur.
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Community Services Group – Administration
Variance Analysis
Table 16: CSG Variance Analysis
Salaries and Benefits – The Community Services Group experienced changes in vacancies and hiring in FY
2021-22. The CSG Part-Time Administrative Assistant and the Communications Coordinator were
converted from contract to permanent positions. Ultimately, the Communications Coordinator became
vacant in February of 2022, and was moved under the Administration Department in the hopes to
centralize City communications and oversight with the Communications Manager position. Additionally,
the CSG Business Services Manager was reclassified to a Business Services and Administrative Manager,
resulting in the overage.
Contract Services – Contract Services was significantly under budget due to projects continuing into FY
2022-23. Specific to the Community Workforce Agreement Study efforts, approximately $20,000 was
spent, and the remaining purchase order balance amounts were rolled and $42,607 in unencumbered
funds are requested to continue to FY 2022-23 to continue the ongoing project efforts and in anticipation
of further consultant services possibly needed since no Work Force Agreements are in place as of yet .
During Mid-Year, $40,000 budgeted for the Centralized Resident Engagement Platform, the cost for Year
1 was under budget, at approximately $29,500. Lastly, Economic Development provided funding for a
$60,000 incentive grant program related 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, which is also being requested to carry over into FY 22-23.
Other Operating Expenditures – Expenses for the category were not significantly under budget, but
remaining funds are mainly a result of the ongoing impacts of COVID and staffing shortages and having
fewer expenses in Education & Training and Trips & Meetings than budgeted.
Community Development Department
A Year-In Review
During the first year of the 2021-23 Financial Plan, the Community Development Department (CDD) made
substantial progress in implementing its work program and scaling up under a new organizational
structure to support the economic success of the community. Housing production continues to move
forward with 614 units constructed during calendar year 2021. While the overall economy has
experienced some headwinds, housing production and other permit activity remain strong, although total
revenue was approximately $1.3 million less than the high experienced during Fiscal Year 2020 As a result,
the City underrealized revenue relative to its projections in FY 2022 and is projecting lower total revenue
for Fiscal Year 2023.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing 300,686$ 457,331$ 470,056$ (12,725)$ -3%440,712$
Contract Services 16,969$ 228,948$ 107,916$ 121,032$ 53%42,833$
Other Operating Expenses 3,554$ 12,413$ 7,764$ 4,648$ 37%13,021$
TOTAL 321,209$ 698,691$ 585,736$ 112,955$ 16%496,566$
CSG Administration FY 2021-22
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Community Services Group – CDD
On the policy front, CDD accomplished three critical Housing Element changes during the past year. These
include an update to the Zoning Regulations that accomplished the following.
1. Allowed mixed-use development by right in the City’s Services and Manufacturing areas.
2. Updated the development review process to lower the threshold for discretionary review
of housing projects.
3. Implemented AB 2162 and AB 101 by streamlining supportive housing projects and low
barrier navigation centers, allowing them by right in most cases.
Second, the City adopted Objective Design Standards to ensure that projects allowed by right are designed
in a manner that is compatible with the project site and surroundings. Finally, the City adopted a new
Inclusionary Housing Ordinance to ensure increased affordable housing production.
All of these projects were required by the State Department of Housing and Community Development
(HCD) to be implemented within one year of adoption of the City’s Housing Element and this timeframe
was met.
In addition to these important policy projects, CDD supported progress on the Climate Action Major City
Goal with implementation of new requirements for all-electric buildings, onboarded and supported the
success of a new Homelessness Response Manager, and began to oversee administration of the City’s
cannabis business permitting program.
Accomplishments and Strategic Goal Updates
1) Lead the implementation of the Housing and Homelessness Major City Goal
a) Three major Housing Element programs were implemented that are consistent with HCD
requirements.
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Community Services Group – CDD
b) Housing production continues to be consistent with the City’s one percent growth
objectives.
c) Homelessness Response has included onboarding of a Homelessness Response Manager
who has supported significant work program tasks such as implementation of Community
Action Team expansion and the creation of the Mobile Crisis Unit.
d) The Homelessness Response Manager served on the County-wide steering committee for
the new 5-Year Strategic Plan. A study session was conducted with the City Council on the
City’s strategic plan and made substantial progress on that effort.
e) Internal coordination has improved regarding Homelessness Response that has resulted
in more effective outreach to unhoused individuals and better coordination within the
City and with non-profit partners.
2) Support the implementation of the Climate Action and Economic Recovery Major City Goals
a) CDD has implemented the Climate Action Plan standards by applying requirements to
private development projects through the entitlement process.
b) The department supported the project to ban the use of natural gas in new buildings with
some exceptions.
c) Electric bikes were provided to building inspectors who have been making great use of
this new resource and reduced the number of miles traveled by vehicle.
d) The TIPP-FAST project was implemented to help “re-tenant” buildings vacated during the
pandemic more quickly.
e) Credits totaling $250,000 were approved to offset the cost of permits for new tenant
improvement permits to facilitate economic recovery.
3) Provide excellent customer service to internal and external customers, and advisory body
members in the processing of permit applications
a) Improvements to the Energov permitting system were made and staffing challenges were
resolved to ensure next-day availability of building inspections.
b) An online scheduling system for building inspections was in the final stages of design and
then implemented.
c) A new satisfaction survey was initiated that is emailed to customers.
4) Ensure a safe community through implementation of Building and Safety division programs,
including Code Enforcement
a) A new Safe Housing Outreach and Education program was onboarded to increase
awareness around tenant/landlord rights and responsibilities.
b) CDD continued to implement City Council priorities for code enforcement and managed
cases consistent with department Key Performance Indicators.
5) Monitor growth, and support and update General Plan policies and Zoning Regulations standards
to ensure coordination with all City Departments that provide municipal services for the
community
a) As detailed in the 2021 General Plan Annual Report, the Community Development
Department is responsible for managing and tracking community growth and
coordinating with all the City’s service departments. In FY2021-22, these efforts
continued.
Challenges
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Community Services Group – CDD
The most significant challenge experienced by CDD during FY 2021-22 was staffing. The department added
new positions to address the increased scale of development that the City is experiencing, and it has taken
time to write job descriptions, recruit, hire and onboard new staff members. Impacted positions included
Permit Technician, Plans Examiner, Associate Planner (3), Deputy Building Official, Cannabis Business
Coordinator, Code Enforcement Officer, Supervising Administrative Assistant and Housing Coordinator. In
each case, these positions remained unfilled after multiple recruitments. The challenges are summarized
in the following table.
Table 17: Community Development Challenges
Vacancy Impact
Cannabis Business
Coordinator
Senior Planner was forced to reprioritize work on the Subdivision Regulations
Update and SB9 project.
Building Permit
Technician
Vacancies in this position caused delays in routing plans that are submitted for
a building permit.
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.
Associate Planner There were three vacant Associate Planner positions for most of the fiscal year.
This forced Senior Planners to perform more Development Review activities and
has resulted in delays in delivery of policy projects, such as Missing Middle
Housing.
Code Enforcement
Officer
The vacant Code Enforcement Officer position resulted in fewer cases being
closed and lower revenues associated with fines.
Supervising
Administrative
Assistant
The vacancy experienced for much of the fiscal year in this position shifted work
to the department’s Administrative Analyst, including supervision of the
Administrative Assistant II, Administrative Assistant III and contract
Administrative Assistant II. This position is responsible for coordinating
department-wide meetings, website content updates, and employee
recognition activities all of which were reduced in number and scope during the
past year.
Just in the last few months, key positions were successfully filled and the Plans Examiner, Permit
Technician, Supervising Administrative Assistant, Homelessness Response Specialist, and Associate
Planner positions are in the recruitment process. Going into FY 2022-23, CDD still has six vacancies in the
Administration, Planning and Building and Safety divisions, however, the hiring environment is improving
and key positions, such as the Deputy Building Official, have been filled. The filling of these positions has
resulted in immediate improvements to customer service and project processing times.
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Community Services Group – CDD
Performance Measures
Table 18: Community Development Performance Measures
Objective Measure 2021-22
Target
2021-22
Actual
Affordable
housing
production
Number of affordable housing units secured through entitlements
or construction 50 11214
Provide Excellent
Customer Service Customer survey response positivity rate 95% 88%15
Ensure a Safe
Community
Percent of Code Enforcement cases investigated on -time: First Tier
- 24 Hours, Second
Tier - 2 Days, and Third Tier - 3-5 Days
85% 84%16
Development
Review activities
The target goal of meeting cycle times 75% of the time reflects an
increase in more complex and resource intensive development
review activities.
75% 78%
Building
Inspections Percent of inspections performed the next working day 85% 96%
Variance Analysis
Due to the staffing challenges described above, CDD has variances (savings) in staffing, contract services,
and several other operating expenditures. Wherever possible, CDD used salary savings from vacant
positions to hire on-call consultants or temporary/contract staff to perform the work. This includes work
in the area of planning, building permit plan check, building permit inspections, building permit
technicians, and even Building Official work. There was also savings realized in contract services, which is
also tied to staffing because certain projects, some supporting the Housing and Homelessness Major City
Goal, were not able to be implemented with the staffing levels experienced for most of the year. Carryover
requests will be made for projects that staff will complete in FY 2022-23.
Table 19: Community Development Variance Analysis
Salaries and Benefits –
Recruitment continues to be an issue and the department had numerous vacancies throughout the
duration of the fiscal year. Every division experienced staff vacancies, with the most affected divisions
14 The number of affordable housing units that have been secured is higher than anticipated due to the sporadic
timing in the entitlement process that is hard to project. 94 of these units are from a single development project
that received a land dedication to produce 100 percent affordable housing units and a density bonus.
15 Target for FY2022-2023 reduced to 80 percent due to a discrepancy with the initial target and changing to be in
line with the Customer Satisfaction Score (CSAT) standard.
16 Response rate to code enforcement cases was impacted due to staff vacancies since October 2021.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing 3,522,347$ 3,962,973$ 3,646,833$ 316,140$ 8%4,673,373$
Contract Services 1,730,545$ 2,506,727$ 2,066,359$ 440,368$ 18%920,097$
Other Operating Expenses 688,224$ 1,127,183$ 941,433$ 185,750$ 16%375,054$
TOTAL 5,941,116$ 7,596,883$ 6,654,625$ 942,258$ 12%5,968,524$
Community Development FY 2021-22
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Community Services Group – CDD
being Building and Safety, and Planning. The Engineering division was over-spent in Regular salaries due
to staff leaving and collecting vacation leave as well as the reclassification of Permit Technician II to Permit
Technician III.
Contract Services –
Almost every division in the department had savings in contract services. Areas of savings were due to a
delay in projects, most of which are anticipated to be completed in FY 2022-23. Some of these projects
include addressing shared cubicles from existing staffing, as well as the need to increase the number of
workstations for new staff resulting from the increasing number of staff in the department,
implementation of the Housing Element Program, and the Homelessness Strategic Plan. The space
planning project in particular was delayed due to modifying other department workspaces in addition to
Community Development. For example, to create more room in 919 Palm for additional Public Works and
Community Development staff, the GIS Division of Admin/IT is being relocated from 919 Palm to City Hall.
Once GIS is relocated (August 2022), the space planning project in 919 can move forward.
While most of these projects will be accomplished in FY 2022-23, one major project, Missing Middle
Housing, will be delayed. Staff did begin to make progress on this effort in FY 2021-22. Specifically, the
City worked with a Cal Poly professor, Dave Amos, who used the Missing Middle Housing project as the
basis for instruction of a fourth-year planning studio (CRP-411). The final report produced through this
effort will be very helpful to the project. However, resource constraints in CDD due to vacancies, combined
with the recognition that a much more substantial outreach and engagement effort through the lens of
Diversity, Equity, and Inclusion is needed to successfully bring this project forward. As a result, $100,000
of funding previously allocated to the project will not be requested for carry-over, and staff will “rescope”
the project and bring it forward for consideration as part of the budget process for the 2023-25 Financial
Plan.
The Housing Policy and Homelessness Programs division was the only division over budget due to large
costs associated with implementing homelessness programs that were budgeted FY 2020-21, specifically
the CAPSLO Safe Parking Program. Encumbrances were not established and invoices from CAPSLO did not
come in until the current fiscal year resulting in the over expenditure. Additionally, unanticipated
expenses arose with the start of pilot homeless programs including garbage fees for waste collection at
the safe parking location.
Other Operating Expenses –
Due to the numerous vacancies in the department, training budgets were not fully utilized, which provided
cost savings. There was significant savings in credit card merchant fees due to the front counter being
open to the public and people using checks instead of credit cards for their transactions.
CDD Revenue Review
The City’s Development Review programs underrealized revenues during FY 2021-22. In total,
Development Services related fees produced $6,181,157 of revenue for a variety of activities in support
of development, including planning, infrastructure plan check, subdivision map checks, and building
permits. As a result, the variance between budget and actual for Development Review Fees totaled
$1,081,704, as illustrated in the following table. Revenue projections for FY 2022-23 have been revised
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Community Services Group – CDD
downward to reflect the City’s experience with a slower pace of development than was realized during
the pre-pandemic peak in FY 2019-20. While actual revenues were below projections across the board,
the most significant factor was due to Infrastructure Plan Check and Inspection Fees, which account for
73 percent of the shortfall.
Table 20: Community Development Revenue Review
Building Permits: Building permits were approximately 10 percent below projections, although the $3.165
million that was collected represents the second highest total for building permits in the City’s history,
with the highest total being in the prior year. Based on the strong performance of building permits in FY
2020-21 and the expectation of a post-Covid rebound - while also taking into consideration expected
projects that were progressing through the permit process - the City projected building permit revenue
to be the same in FY 2021-22 as in FY 2020-21. However, the beginnings of a slow-down period associated
with supply chain issues, inflation and increased interest rates were resulted in a reduction in actual
revenue of approximately $419,000 from the prior year. The FY 2022-23 forecasted budget for Building
Permits is projected to continue a slight downward trend. The potential for a major disruption in revenues
due to a possible recession will be tracked closely and adjustments will be recommended at mid-year if
revenues are lower than expected.
Code Enforcement Fines: Revenues from Code Enforcement Fines were approximately 31 percent below
projections. In FY 2020-21, the City realized approximately $90,000 of code enforcement related revenue
and projected to recover the same in FY 2021-22. However, only 68.5 percent ($61,695) of this projection
was realized. This change is largely due to a retirement and a promotional opportunity that created
vacancies for a portion of the fiscal year. In addition, the City has shifted to collections instead of property
liens as a method for collecting delinquent fines due to a change in the law regarding property liens.
Collections has proved to be a less effective way of recovering delinquent fines, especially when those
fines are for small dollar amounts as is the case with most of the City’s code enforcement related fines.
Development Review Fees: These fees are collected when projects that have had an entitlement go
through the building permit process. The fees reflect staff time spent ensuring that the building permit
complies with the previously approved entitlement. These fees were projected to be lower in FY 2021-22
since changes to the Zoning Regulations mean fewer projects are going through the entitlement process
and would be subject to this fee during the building permit process. Staff’s projection was $400,000 in
Adopted Budget Adjustments Total Budget Actuals Variance %
Building Permits 3,583,995$ 3,510,000$ -$ 3,510,000$ 3,165,038$ (344,962)$ 90%2,921,700$
Infrastructure Plan Check & Insp 829,252$ 1,200,000$ -$ 1,200,000$ 408,035$ (791,965)$ 34%1,432,352$
Plan Check Fees 1,140,509$ 355,000$ 667,861$ 1,022,861$ 1,280,615$ 257,754$ 125%299,000$
Planning & Zoning Fee 500,989$ 600,000$ -$ 600,000$ 470,462$ (129,538)$ 78%416,195$
Development Review Fees 508,373$ 400,000$ -$ 400,000$ 363,396$ (36,604)$ 91%341,228$
Encroachment Permits 327,948$ 305,000$ -$ 305,000$ 295,643$ (9,357)$ 97%323,340$
Engineering Dev Rev Fees 116,097$ 135,000$ -$ 135,000$ 136,274$ 1,274$ 101%123,803$
Code Enforcement Fines 90,879$ 90,000$ -$ 90,000$ 61,695$ (28,305)$ 69%60,000$
Total Revenue Earned 7,098,041$ 6,595,000$ 667,861$ 7,262,861$ 6,181,157$ (1,081,704)$ 85%5,917,618$
TIPP- Contra Revenue Account**(8,279)$ (291,721)$ -$ (291,721)$ (210,161)$ 81,559$ 72%-$
Total Revenue Received 7,089,762$ 6,303,279$ 667,861$ 6,971,140$ 5,970,996$ (1,000,144)$ 157%5,917,618$
* The Plan Check Budget increased throughout the year as the City realized revenue for Building Permit Plan Check and, consistent with Budget Policy, utilized those
revenues to pay for consultants that performed the plan check services. Fees for these services are established based on a policy of 100 percent cost recovery.
* The TIPP‐FAST program provides expedited Tenant Improvement permits for new businesses. The City offered these permits free of charge for a limited period. Per
Resolution No. 11203, $3,425,000 in undesignated fiscal year 2018‐19 General Fund Balance was allocated towards economic development and homeless services. $2
million of this funding was assigned to locally invest in short term Certificates of Deposit to generate interest for a grant program to help offset the cost of a TI permit.
One of the recommended SOBCs for the 21‐23 Financial Plan was to utilize $250,000 of this principal to continue funding the TIPP‐fast permitting program in FY 21‐22.
Development Review Fees FY 21 Actual FY 23 Forecasted
Budget
FY 2021-2022
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Community Services Group – CDD
revenue after realizing approximately $500,000 in the previous fiscal year. 90 percent of this total, or
$363,396 was collected. Revenue from Development Review fees is expected to be slightly lower in FY
2022-23, at $341,228.
Encroachment Fees: Encroachment permits are issued for work in the City’s right-of-way performed by
private development. Encroachments are required for all curb, gutter, sidewalk and utilities work in the
right-of-way. Almost 97 percent of the projected revenue was collected in FY 2021-22 ($295,643).
Infrastructure Plan Check and Inspection: The most significant gap in the revenue projections for FY 2021-
22 relate to infrastructure plan check and inspection. Although staff had identified projects in progress
that would generate additional revenue, those projects did not complete the plan review process during
FY 2021-22. In addition, there is approximately $1 million of fees associated with future phases of the
Avila Ranch project that were not submitted in FY 2021-22 and are now expected to come forward in FY
2022-23. As a result of slower than expected development, the City only realized 34 percent of the
projected revenues in this category, or $408,035, accounting for 73 percent of the total gap between
actual versus projected revenue. Infrastructure plan check is considered “lumpy” because it consists of a
smaller number of large projects (primarily subdivisions and new neighborhoods). In addition, the City
only collects revenues at the end of the process, when permits are issued. Going forward, staff will work
to modify its fee schedule to require deposits and progress payments to ensure that work performed
during a fiscal year is covered by revenues collected during that fiscal year. Based on the number of
projects that have planning entitlements and the proposed changes in billing practice, staff is projecting
revenue of approximately $1.4 million for FY 2022-23.
Plan Check Fees: Plan check fees are associated with building permit applications and are administered
under a budget policy that allows the City to use collected revenues to pay for the consultant services that
are used to complete this work. The City’s contracts with plan check consultants provide for consultants
to collect up to 65 percent of the City’s plan check fee. The City uses the remaining 35 percent for
administrative overhead, revisions and plan checks that are performed in-house instead of being sent to
a consultant. In FY 2021-22, the City collected $1,280,615 in revenue from plan check, which was slightly
higher than the FY 2020-21 total. Going forward, Community Development and Finance will work together
to fine tune the policy around Plan Check fees to ensure more accurate forecasting. Currently, the policy
does not require staff to project expenditures since the policy ensures that a percentage of revenues
collected for Building Plan Check pays for the consultants that provide the review and the revenue budget
increases as expenditures are utilized to pay for these services. At the 2023-25 Financial Plan, staff will
re-evaluate the policy and potentially propose a change that allows staff to begin the year with the full
revenue and expenditure budget projection. This will eliminate the continuously increasing budgets as
revenue is collected throughout the year.
Planning & Zoning Fees: Similar to Development Review fees, Planning and Zoning fees were lower in FY
2021-22 than the prior year. Changes approved to the Zoning Regulations in support of housing
production and economic development allow certain projects to move forward with more timely review
of entitlements. Fewer projects go to the Planning Commission and Architectural Review Commission than
in the recent past. Staff projected $600,000 in revenue in this area and realized 78 percent of that total,
or $470,462. Future projections for this item are projected to be lower still, at $416,195, in consideration
of additional streamlining of the development review and entitlement process that occurred in FY 2021-
22 and due to a slow-down in the number of applications submitted, likely due to recessionary concerns.
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Community Services Group – CDD
Development Services Designation
Table 21: Development Services Designation Balance
Resolution No. 10539 authorizes the City Manager to approve the appropriation and carryover of up to
75 percent of the over-realized development services revenue to cover the additional funds needed for
development projects. This funding is vital to fund resources needed to achieve Major City Goals and
department objectives. Many multi-year projects require resources that lag significantly from the revenue
collection to the services being rendered. There will be no additions to the Development Services
Designation (Designation) balance from FY 2021-22 due to no over-realization of development services
revenue. This policy will be evaluated with the 2023-25 Financial Plan to determine if it needs to continue
or should be modified given the approved staffing increases that were approved to sufficiently cover the
required service and right-size the department staffing levels
Table 21: Development Services Designation Balance
2021-22 Beginning Balance $ 710,657
2021-22 Consumption $ (180,000)
2021-22 Remaining Balance $ 530,657
In FY 2021-22, the Designation was utilized for two development review-related needs:
Two Contract Engineering Inspectors ($150,000) – Two contract engineering inspector positions were
approved to support the anticipated influx of private development projects requiring engineering
inspections.
Contract/Temporary Administrative Assistants ($30,000) – Contract/temporary admin were hired to
assist with answering the building inspection phone line dedicated to scheduling and managing building
inspections.
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Community Services Group - Parks and Recreation
Parks & Recreation Department
A Year In Review
The Parks & Recreation Department ended the year with positive variances in both revenue and expenditures. The
Community Services Division brought the community together with popular pop -up events like the Jack House &
Gardens Spring Concert Series and Monday Meetups. Working in partnership with San Luis Obispo Museum of Art,
the Department commissioned two murals and two temporary sculpture exhibits, repaired, and reinstalled the
Flames of Knowledge sculpture at Emerson Park and secured a new sculpture for the Tank Farm/Orcutt Roundabout.
The Department opened a state-of-the-art new outdoor fitness court at Emerson Park, and Facilities continued to
offer outdoor dining opportunities to the community, supporting the Downtown Dining program in Mission Plaza.
Youth Services provided quality childcare to the community at all five (5) elementary school sites located within the
City (C.L. Smith, Hawthorne, Pacheco, Sinsheimer, and Bishop’s Peak), and expanded summer camp programming
to assist in fulfilling community needs. Aquatics returned to standard summer programming while introducing new
programming including Super Rec Saturdays, an expanded recreational swim for the community. Staff maintained
the 26-acre, 10-hole Laguna Lake Golf Course, offering regular programming de spite the closure of the Golf Pro Shop
due to flooding and recurring challenges with the aging irrigation infrastructure. Ranger Service has expanded its
educational programming with more environmental education videos, Ranger -led interpretive hikes, and adding a
third session of the popular Junior Ranger camp. After months of coordination with the Office of Natural Resources,
Ranger Service officially opened the Miossi Open Space, adding new trails, including the Cal Poly connector, as well
as upgrades to existing trails throughout the City’s Open Spaces, including Irish Hills. 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.
To meet the growing needs of the community, Recreation Administration hired a full-time Administrative Assistant
III, which was vacant for a few months due to a promotion, to assist with its supplemental hiring, compliance,
communications needs, and supporting the growing department. Youth Services filled six new full -time positions,
offering consistency and support at all five City school sites and expanded summer camp opt ions. Community
Services hired a full-time Community Services Coordinator position to oversee Senior programming, Community
Gardens program, manage the expanding Contract Class program, and support the Community Services division.
Accomplishments and Strategic Goal Updates
1. Received Council endorsement of the Parks & Recreation Blueprint for the Future, a new 20-year master plan
and general plan element update
2. Expanded childcare services to serve five (5) elementary school sites located within the City limits (C.L. Smith,
Hawthorne, Pacheco, Sinsheimer, and Bishop’s Peak), collaborating closely with SLCUSD
3. Expanded summer Youth Services programming to meet community needs with additional camp options
4. Opened the Miossi Open Space and upgraded existing trails throughout the City’s Open Space
5. Completed an outdoor fitness court at Emerson Park as part of a National Fitness Campaign grant
6. Continued the popular Downtown Dining program in Mission Plaza, offering outdoor dining opportunities to
the community to support economic recovery
7. Implemented a first-ever, five-week Summer Sports Camp to off-set childcare needs within the community
8. Oversaw the safe, post-pandemic return of Youth Sports Leagues (Basketball and Futsal) and expanded Youth
Sports Clinics and camps
9. Held 13 Community Events: Monday Meet-Ups, Spring Concert Series, Haunted Walk, Egg Hunt, Leprechaun
Lost
10. Finalized a new agreement for a new concessionaire for the Laguna Lake Golf Course
Challenges
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Community Services Group - Parks and Recreation
Recruitment and staffing posed the greatest challenges for the Parks & Recreation Department. A national lifeguard
shortage made it difficult to recruit lifeguards, and COVID continued to impact staffing; however, the division was able
to optimize its programming to meet community needs. Youth Services experienced staffing challenges and space
limitations at program sites, and youth and adult sports encountered staffing challenges. Over the course of FY 2021-
22, the Laguna Lake Golf Course experienced countless irrigation leaks due to its aging infrastructure. While
infrastructure improvements are being considered for future capital improvement plans, the Golf Division invested in
a hydro excavator to reduce downtime on leak repairs. Additionally, in the month of December, flood damage forced
staff to close the Golf Pro Shop and relocated operations to a temporary on-site office trailer. The Pro Shop facility is
currently being remediated as part of a Mid-Year budget increase and will reopen in FY 2022-23. The Golf Course
struggled with cash-only payments for most of the year as it continues to work towards a partnership with a new
credit card merchant that aligns with City financial controls.
Performance Measures
Table 22: Parks and Recreation Performance Measures
Objective Measure 2021-22
Target
2021-22
Actual
Provide inclusive, accessible
programming that serves the whole
community.
# of Department Community Events 20 13
# of non-profit permitted Facility Uses 120 92
# of program registrations 3,200 4,866
# of program offerings 300 584
# of childcare spots filled/offered 1085 /1085 1,131
# of children receiving subsidy
51 CAPSLO
27 City
scholarship
61 CAPSLO
45 City
Scholarship
In Coordination with Public Works,
engage the public to prioritize new
and revitalized Recreational Amenities
# of public outreach meetings 6 3
# of updated or new parks and amenities in process 4 4
Creates and fosters a sense of
community through citizen
involvement
# of volunteers/hours 100/400hrs 79/1495
hours
# of temporary Public Art or Cultural Art Events 5 4
Leverage technology to engage the
community and promote program
offerings
# of Instagram followers 6,700 6,295
# of Facebook followers 4,890 3,920
# of Virtual Program Offerings 15 4
Open Space Preservation and
Enhancement
# of miles of Open Space trails maintained 61 62
# of staff hours dedicated to fuel reduction 2,500 1,68717
# of encampment site clean-ups removed from Open
Spaces 60 85
Variance Analysis
Table 23: Parks and Recreation Variance Analysis
17 The hiring of the newly created open space technician supplemental positions experienced both delays and
recruitment challenges, leading to fewer staff hours dedicated to fuel reduction.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing 3,050,597$ 3,801,285$ 3,229,844$ 571,441$ 15%3,863,441$
Contract Services 247,637$ 293,958$ 278,371$ 15,587$ 5%249,367$
Other Operating Expenses 256,934$ 577,888$ 482,339$ 95,548$ 17%526,025$
Utilities 98,559$ 127,913$ 154,331$ (26,418)$ -21%119,895$
TOTAL 3,653,727$ 4,801,044$ 4,144,886$ 656,158$ 14%4,758,728$
Parks & Recreation FY 2021-22
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Community Services Group - Parks and Recreation
Salaries and Benefits – The Facilities division experienced temporary salary savings of $23,000 due to fewer indoor
rentals and the pausing of Downtown Dining in the Mission Plaza (resulting from holiday activations). In Youth
Services, temporary salaries were lower than usual (nearly $71,000 remaining) because the division was not operating
at full staff capacity. In Community Services, the delayed requisition of the Volunteer Coordinator contract position
that was budgeted during the Mid-Year Review left nearly $33,000, and the cancellation of the SLO Triathlon left
$62,000 in temporary salary savings. In Ranger Service, the conversion of four limited benefit temporary (LBT)
employees to full-time (FTE) occurred in August but was budgeted in July, and the hiring of the newly created open
space technician positions experienced both delays and recruitment challenges, leading to savings of $142,000. In
Aquatics, hiring challenges and program cancellations due to staffing, as well as mechanical issues related to the
heating system for the Therapy Pool resulted in salary savings of more than $110,000. At the Laguna Lake Golf Course,
supplemental staff was increased during opening and closing shifts for safety reasons , countering some of the salary
savings department-wide by approximately $6,000.
Contract Services – A significant portion of contract services in the Community Services Division was not spent due to
the cancellation of the SLO Triathlon. This event was cancelled due to declining participation and limited community-
wide benefit. Discontinuation of the SLO Triathlon allowed Community Services staff to reallocate $4,000 in contract
services toward the implementation of recommendations outlined in the Parks + Recreation Blueprint for the Future
and to enhance the City’s community building program opportunities, with fewer expenditures. Additionally, the
Department shifted over $7,000 to contract services in the Ranger Services Division due to built -up demand for
encampment cleanups.
Other Operating Expenses – The Community Services Division experienced combined savings of more than $32,000 in
Advertising & Public Outreach, Materials and Supplies due to the cancellation of the SLO Triathlon. Minimal
expenditures at the Jack House also left savings of nearly $7,600 in this account, and staff shortages in
Communications reduced paid social media marketing efforts.
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 exceeded budget by more than $43,000. This was partially offset by limited
use of well water for the Golf Course, which draws from Electric Service.
Parks & Recreation Revenues
Table 24: Parks and Recreation Revenues
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Community Services Group - Parks and Recreation
Facilities: The closure of the assembly room and kitchen of the Ludwick Community Center for use by the Parks &
Recreation Department staff as their temporary office for Q3 and Q4 limited indoor rental use. Additionally,
reservations for outdoor BBQ and other summer rentals (birthdays, weddings) were less than estimated as the
community transitioned out of COVID restrictions. Special event permits exceeded projections, although they were
not at pre-pandemic levels.
Youth Services: Childcare Services continued to exceed targets as sites remained at capacity throughout the fiscal year
and a high demand for summer day camps.
Community Services: The cancellation of the Triathlon accounted for a loss of an estimated $50,000 in revenue as well
as a reduction in expenditures. More revenue than anticipated in contract classes and youth athletic fees further
balanced out this loss of special event revenue with expanded program offerings.
Aquatics: Aquatics revenue exceeded projections with the return of traditional swim lessons format and expanded lap
swim times, despite therapy pool closures and temporary modifications to existing contracts.
Golf: Golf revenue was impacted by several factors including, the absence of a credit card processing system for much
of FY 2022, the closure of the Pro Shop since mid -December due to flooding and remediation efforts, and staffing
challenges. As a result, golf revenue decreased by nearly $27,000 (11%) year-over-year.
Budget Actuals Variance %
Youth Services Childcare 849,552$ 611,785$ 599,357$ (12,428)$ 98.0%639,806$
Golf Greens Fees 198,058$ 200,000$ 178,024$ (21,976)$ 89.0%235,180$
Adult Athletic Fees 46,307$ 122,400$ 103,111$ (21,560)$ 84.2%154,362$
Youth Services Camps 86,776$ 106,650$ 163,897$ 57,247$ 153.7%154,275$
Outdoor Rental & Use Fees 61,033$ 88,867$ 65,813$ (23,054)$ 74.1%129,960$
Aquatics Daily Use Fees 50,361$ 73,075$ 89,322$ 16,247$ 122.2%115,175$
Instruction Fees 56,152$ 61,400$ 79,690$ 18,290$ 129.8%97,830$
Other Parks & Recreation Revenue 41,780$ 54,282$ 40,579$ (13,703)$ 74.8%58,482$
Special Events - City Sponsored 3,564$ 50,149$ 149$ (50,000)$ 0.3%13,583$
Youth Athletic Fees 36,071$ 48,000$ 62,289$ 14,289$ 129.8%55,000$
Multi Day Swim Passes 56,387$ 41,753$ 58,714$ 16,961$ 140.6%44,383$
Indoor Rental & Use Fees 12,201$ 39,532$ 29,405$ (10,127)$ 74.4%65,100$
Golf Cart Rentals 12,429$ 28,262$ 14,050$ (14,213)$ 49.7%29,675$
Swim Instruction Fees 49,997$ 20,923$ 40,803$ 19,880$ 195.0%75,108$
Special Events App/Permit 4,333$ 20,000$ 30,653$ 10,653$ 153.3%33,293$
Driving Range Fees 12,561$ 11,715$ 8,860$ (2,855)$ 75.6%12,900$
Golf Rental Fees 7,889$ 10,566$ 6,070$ (4,496)$ 57.4%11,232$
Sales Taxable 14,741$ 10,000$ 11,852$ 1,852$ 118.5%10,000$
Therapy Pool Fees 9,553$ 8,627$ 3,642$ (4,985)$ 42.2%16,304$
Special Events Insurance 2,484$ 7,165$ 7,426$ 261$ 103.6%6,000$
Library Rental -$ 6,500$ 4,780$ (1,720)$ 73.5%16,290$
Junior Ranger Camps 4,210$ 4,500$ 5,808$ 1,308$ 129.1%4,982$
Golf Lesson Fees 8$ -$ 159$ 159$ -$
Total 1,616,445$ 1,626,151$ 1,604,453$ (23,969)$ 99%1,978,920$
Parks & Recreation Revenue FY 21 Actuals FY 2021-2022 FY 23 Forecasted
Budget
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Community Services Group - Public Works
Public Works Department
A Year In Review
The Public Works Department (Department) continued to provide core services to the community by maintaining the
City’s park system, community facilities, roadways, maintaining and replacing critical infrastructure, enhancing
pedestrian safety and mobility, and maintaining the City’s urban forest. Modified operating standards following
COVID-19 has shown to be impactful on the department’s workload and allocation of resources throughout FY 2021-
22. Efforts were focused on achieving key objectives with an emphasis on health and safety as well as economic
resiliency much like recent pandemic years. Cost escalation and supply chain issues have significantly impacted
operational costs over the fiscal year, in addition to construction costs in the Capital Improvement Plan (CIP) program.
While the Department did not achieve its target of a 10% annual reduction in traffic collisions (actual reduction
achieved = 6%) compared to the previous year, this is largely due to a significant decrease in collisions in 2020 (17%
total reduction in 2020), likely due to an overall decrease in driving due to the COVID-19 pandemic. Compared to
2019, there has been a 23% reduction in total collisions in 2021. Staff were diligent in continuing ongoing
implementation of traffic safety and complete street improvements and program, including completion of the
Railroad Safety Trail (Taft to Pepper) project, completion of several new protected/separated bikeways, and made
significant progress with construction of the Tank Farm/Orcutt Roundabout.
Efforts continued with implementation of the Open SLO program, facilitating continuation of temporary parklet and
outdoor dining installations. Staff recently completed development and Council adoption of a new permanent parklet
program, allowing a transition away from the temporary pilot Open SLO activities. This effort necessitated several
street and traffic safety measures, as well as increased maintenance and sanitation efforts in the downtown corridor.
In addition to Open SLO program support, staff continued to be proactive in preventative maintenance efforts for City
assets, increasing the number of preventative work orders from FY 2020-21.
The department has made progress to fill vacant positions following the completion of several organizational studies.
The recommendations provided in these studies are now in the implementation phases, and will address significant
process improvements in staffing, performance tracking, financial management, and delivery of services. Short
staffing (further explained in next sections) in the CIP program paired with dynamic economic conditions that
escalated construction costs precluded the department from constructing all CIP projects in the year they were
budgeted.
Accomplishments and Strategic Goal Updates
The Department continued to address Major City and Department 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 $55M toward the maintenance and preservation of City assets across all
funding sources. The CIP Engineering program also has 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. Major milestones include completion of the
Railroad Safety Trail (Taft to Pepper) project, facilitating completion of the Madonna Shared -Use Path and Madonna
& LOVR protected intersections as part of San Luis Ranch development, completion of construction documents for
the 2022 Pedestrian Crossing Improvements project, facilitation of new protected bikeways and pedestrian crossings
downtown on Marsh and Higuera Streets as part of 2021 and 2022 Paving Projects, and made significant progress
with the construction of the Tank Farm/Orcutt Roundabout.
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Community Services Group - Public Works
Following the passage of the Local Revenue Measure (Measure G-20) in 2020, which increased the local sales tax rate
from 0.5% to 1.5% beginning in April 2021, the City has placed major emphasis on addressing infrastructure. The
following notable capital projects were complete or largely complete during FY 2021-22, among others:
1. Fire Station 1 HVAC Replacement
2. Sinsheimer Park Irrigation and Stadium Drainage
3. Broad Street/Woodbridge Pedestrian Hybrid Beacon
4. Meadow Park Pathway Maintenance
5. 2021 Downtown Pavement Improvements
6. Mission Plaza Railing Upgrades
7. Laguna Lake 2021 Maintenance Dredging Project
8. Swim Center Therapy Pool Boiler Replacement
9. Railroad Safety Trail Taft to Pepper
10. Sinsheimer Park Hardscape Replacement
11. Storm Drain Culvert Repairs at Broad and Leff
12. Parks and Recreation Interior Office Rehabilitation
13. French Park Parking Lot Maintenance
14. Emerson Park Fitness Court
The Urban Forest Program continued to place focus on the preservation, maintenance, and enhancement of the City’s
urban forest. Some notable work over the past year was the completion of the organizational assessment and the
tree inventory, which revealed a more accurate inventory of the City’s urban forest. The Department also
implemented the City’s first preventive maintenance pruning schedule which is underway by a contractor that
specializes in municipal urban forestry maintenance. The Department continued to ensure delivery of its core services
by enhancing community and downtown cleanliness through sidewalk scrubbing, street sweeping and clean up, and
ongoing maintenance of parks and facilities utilized by all residents, businesses, and visitors.
Challenges
The Department experienced challenges in the areas of staffing, cost escalation, supply chain issues, and keeping up
with maintenance of aging infrastructure. In many ways it has had to modify day-to-day operations in order to
continue delivering core services following the COVID-19 pandemic. 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 ensure 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, creating a knowledge gap for staff assuming these roles. This will likely
result in a higher level of contract services needed over the next year, as newer staff’s technical experience increases.
Within the Capital Improvement Plan Engineering (17 FTE) and Transportation Planning and Engineering programs (7
FTE), staff delivered projects while seeing staffing vacancies. Peak vacancies reached eight full time employee
positions in CIP Engineering, impacting progress on many projects which required a project prioritization effort and
funding deferrals as part of the 2021-23 Financial Plan Budget Supplement. These programs have engaged in
continuous recruitments since March 2022 to fill positions of which two vacancies remain.
The department was able to address several services and improvements that were deferred in years past due to
staffing shortages, revenue shortfalls, or in response to the COVID -19 pandemic, such as preventative maintenance
to City facilities, fleet assets, and the urban forest. However, project and core service delivery came with major
challenges in the areas of cost escalation and supply chain shortages. The City experienced major cost increases in the
price of fuel for the City’s fleet, water costs for the City’s parks due to limited rain fall, and in many instances
experienced delays in receiving materials and supplies required to keep up with the day-to-day delivery of core
services. Fortunately, the City has begun its transition to Electric Vehicles and anticipates a reduction in fuel
consumption in the coming years.
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Community Services Group - Public Works
Modified operations of core services continue to be a challenge for Public Works. Following the limitations and lifting
of restrictions of COVID-19, staff saw an increased use of many outdoor public facilities. This has resulted in a greater
need for maintenance and trash collection in the parks. This increased demand coupled with the increased num bers
of staff being personally affected by the pandemic, resulted in an on-going need for additional contract services
funding. The department secured funding for FY 2021-22 to supplement the increased need for solid waste service
and for an increased use of contract services to react to the continued absences as staff due to the ongoing pandemic.
Performance Measures
Table 25: Public Works Performance Measures
Objective Measure FY 21-22 Target FY 21-22 Actual
Proactively enhances traffic safety by providing a system
of safe, reliable, and well-maintained roadways, sidewalks,
traffic signals and streetlights.
Pavement Condition
Index 74 7218
Bicycle network in total
miles (Class I/II/III/IV) 12.4/28.9/24.6/2.1 12.1/29.3/25.0/1.2
Street miles maintained 135 135
Enhance the City’s Urban Forest and maintains visually
appealing public spaces.
# of trees maintained 20,250 12,97019
Total acreage of park
inventory 583 58320
Provide high quality services to the community through
efficient and effective delivery of capital improvement
projects and management of the City’s infrastructure.
Total value of CIP
Managed $59M $55M
Variance Analysis
Table 26: Public Works Variance Analysis
Salaries and Benefits – There were significant savings in staffing budgets in the department, largely due to vacancies
following the FY2020-21 hiring chill and the staffing impacts of COVID 19 including turn over and retirements. The
department began to fill vacant positions following the completion of several organizational studies and carried out
services during the fiscal year with limited staffing capacity, resulting in personnel related savings as outlined in the
table above. While the department experienced vacancies, there was an increased need to utilize contractors or
consultants to deliver a variety of services.
Contract Services – Department-wide there were savings realized in contract services with the department expending
approximately 96% of its contract services budget. Some programs with excess spending in contract services were
18 Decline in Pavement Condition due to pavement age. Pavement management projects included in the CIP are budgeted to
maintain pavement condition near the targeted PCI; however, and pavement condition will still fluctuate year to year.
19 The Urban Forest Services Program recently complete an inventory of trees located within the public rights-of-way, parks,
facilities. The urban forest number of managed trees has been aligned with maintenance program scope of service. Many trees
in the City’s open space and riparian zones have been removed from the Urban Forest Services maintenance metrics as these
trees are maintained by the Parks and Recreation Department Ranger Services Program or Natural Resources.
20 The total acres of Park inventory are 583, with 106 acres being improved with landscaping, play equipment, or turf.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing 6,919,048$ 7,902,660$ 7,135,851$ 766,809$ 11%8,696,449$
Contract Services 1,281,000$ 2,402,169$ 2,314,026$ 88,143$ 4%1,818,050$
Other Operating Expenses 1,268,213$ 1,984,488$ 1,763,876$ 220,612$ 13%1,900,004$
Utilities 1,891,528$ 2,146,642$ 2,214,933$ (68,292)$ -3%2,248,000$
TOTAL 11,359,789$ 14,435,959$ 13,428,687$ 1,007,273$ 7%14,662,503$
Public Works FY 2021-22
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Community Services Group - Public Works
offset by reduced spending on other operating expenses. Parks Maintenance experienced spending beyond budget
to address lighting improvements in Mission Plaza while Fleet reduced its overall expenses in contract services to
account for a major increase in the fuel budget item. As a result of limited staff, there was a need throughout the year
to rely on contract services to deliver services and complete projects.
Other Operating Expenses – There were savings realized in other operating expenses while the department expended
approximately 89% of this budget category. Throughout the department, other operating expenses fluctuated
drastically over the year primarily due to cost escalation and m odified operations. Some programs, including Fleet,
experienced major increases such as fuel costs while the department realized cost savings in other operating expenses
to offset cost escalation. Across the department, realized savings were captured in co nstruction materials and
supplies, equipment maintenance supplies, miscellaneous materials and supplies, and education and training.
Utilities – Water, sewer, electricity, and solid waste utility services varied considerably across all programs. Public
Works expended 103% of its utility budget in Fiscal Year 2021-22. The primary driver of the utilities budget amount
was due to Parks Maintenance water expenses, associated with limited rain fall during the year. The Department also
experienced cost increase in the areas of natural gas due to a recent spike in gas prices, while savings were realized
in solid waste services and electricity.
Page 177 of 364
Community Services Group – Solid Waste Program
Solid Waste – AB 939 General Fund
The Solid Waste program is funded by AB 939 funding collected through the solid waste bills. AB 939 funds may only
be used to pay for activities that divert waste from the landfill. Any funds remaining at the end of the year must remain
within the Solid Waste program budget.
A Year In Review
The Solid Waste and Recycling Program (Program) successfully established funding, staffing support, and program
objectives over the past fiscal year which have been key in completion of some large-scale and challenging projects.
In accordance with the requirements of SB 1383, the State’s most expansive solid waste legislation in over 30 years,
the Program completed updates to the Municipal Code and long-term franchise agreements, and managed citizen
participation in the curbside organic waste program. As a result of SB 1383 and inflation, the Program navigated a
difficult solid waste rate increase with a successful Council adoption, including the administration of a third-party solid
waste rate study. The Program also played an integral role in making progress in compliance efforts while key external
partner, the Integrated Waste Management Authority (IWMA), underwent unexpected changes in executive
leadership and membership. Since securing funding for a second full-time City staff member as a part of the rate
setting process, the Program anticipates achieving a far greater volume of public outreach and internal facility
improvements over the next fiscal year.
Accomplishments and Strategic Goal Updates
1. (4.1.e) Hired a CivicSpark Fellow to jumpstart development of a Municipal Operations Zero Waste
Plan aimed at reducing waste generated by City operations by 90%.
2. Renewed membership with the Integrated Waste Management Authority through JPA amendment.
3. (4.2.g) Ensured 96% of major organic waste generators are subscribed to or exempt from organic
waste services (in accordance with AB 1826).
4. Processed 1,361 construction and demolition waste management plans.
5. Secured 100 tons of compost to be made available to the City and community members thr ough
negotiation of the City’s franchised waste hauling agreements.
6. Updated Municipal Code and 20-year franchise agreements to be compliant with SB 1383.
7. Administered rate study RFP and contract to enlist third-party agency to ensure justifiable and
accurate rate evaluation during base year solid waste rate increase, and successfully completed a rate
setting process.
Challenges
In FY 2021-22, the three predominant challenges that Solid Waste experienced were understaffing, uncertainties with
a critical partner agency, and complexities with rate setting.
The City continues to grow its solid waste management program to administer new and existing regulatory programs
like those required by SB 1383 and AB 1826. Since establishment of the Program in 2020, Solid Waste had been staffed
by one FTE. To more effectively lead the regulatory programs necessary for compliance with State and regional law,
the City added another position in FY 2022-23 that was approved through the supplemental budget and considered
in the rate setting process.
The County’s withdrawal from the IWMA and an Executive Director turnover within the past year led to increased City
staff involvement in regional agency coordination and planning efforts. Fortunately, the Executive Director role has
again been filled, a rate increase supportive of the agency’s defined objectives has been adopted, the County’s
withdrawal from the IWMA has been completed, and the remaining members have recently signed amended Joint
Powers Agreements ensuring increased stability for the organization in the next fiscal year.
The solid waste base year rate setting also required significant attention from staff and management who oversaw a
rate study contract and navigated the largest rate increase in the City’s history. Staff is working on an update to the
1994 Rate Setting Manual which should result in a more efficient rate setting process once adopted.
Variance Analysis
Table 27: Solid Waste Variance Analysis
Page 178 of 364
Community Services Group – Solid Waste Program
Table 28: Solid Waste Overview
Solid Waste AB 939 Overview Budget Actual Variance % Over/Under
a) FY21-22 Revenue - AB939 - 190,196
b) FY21-22 Expenditures 355,478 193,703 161,775 -46%
c) FY21-22 Year-End Net Revenue Over Exp (a-c) (3,507)
d) FY20-21 Carryover 103,572
Total Carryover Request (c+d) 100,065
Staffing
One additional full-time Coordinator was budgeted to cover a planned leave of absence. Challenges recruiting for the
position led to a vacancy in the position up until two weeks prior to the absence. Two and a half months of anticipated
salary and benefits remained. The chosen interim candidate was hired as a 0.75 FTE, resulting in a 25% cost savings
in the salary and benefits paid out to the contract employee once hired. Additional salary savings were realized in the
absence of the FTE Coordinator from November 25 to February 15 due to maternity leave.
Contract Services
The primary focus of the Solid Waste and Recycling Program over FY 2021-22 was to bring the City into compliance
with SB 1383 requirements which led to a high volume of in-house workload including updates to the Municipal Code,
franchise agreements, and IWMA Joint Powers Agreement. Execution of time sensitive work efforts and training of
backfill staff and new management meant that otherwise anticipated expenditures were delayed.
In an attempt to better prepare for the temporary absence of the Coordinator, a part -time contract Administrative
Assistant was budgeted in FY 2021-22. After difficulties in recruiting and ultimately hiring a contract employee to fulfill
the scope of work assigned, the Program decided to end the contract term early which created approximately $23,000
in savings.
Workload analysis conducted during FY 2021-22 demonstrated that additional staffing was required to move Program
initiatives forward. Therefore, during budget supplement, budget was approved for a second permanent staff position
in the Solid Waste Program. With the addition of a second permanent position, the Program can plan several new
outreach and compliance efforts not previously feasible.
Budgeted and carryover funds in the Contract services account will be used in FY 2022 -23 to execute three major
projects planned in the previous fiscal year. Some of the funding will be used to hire a consultant to develop an
organics procurement strategy to meet targets set by the State of California. Projects under the scope of work may
include designing Direct Service Provider Agreements, drafting a land application ordinance, costing out the purchase,
transport, storage, and/or land application of procured materials, and developing regulations for new development
to incorporate locally recycled organics in their landscape designs.
The program will also leverage a consultative approach to expanding waste reduction and diversion efforts in the
community. A contractor will be sourced to conduct a City-wide waste characterization study. Data generated from
the characterization will be used for emission calculations, bin enclosure and building design, waste generation
Page 179 of 364
Community Services Group – Solid Waste Program
calculation, and most importantly will create a baseline for measuring the success of the City and IWMA outreach
efforts. Findings from the Municipal Zero Waste Plan started in FY 2021-22 under the CivicSpark program will dictate
needed signage and educational resources for internal use. As a result, a contractor will be hired to design educational
media and print materials to help meet a 90% reduction in the amount of waste generated by municipal operations.
Other Operating Expenditures
Other operating expenditures includes a substantial amount of unspent Public Outreach and Advertising funds. Most
public events were canceled in FY 2021-22 as COVID continued to impact social activities within the County. COVID
also delayed waste-related infrastructure improvements within City facilities. Wit h City offices again occupied, staff
can complete accurate waste characterizations and purchase necessary equipment to ensure City facilities are in
compliance with SB 1383 (bin systems, signage, instructional videos). FY 2022-23 funds are already being utilized to
increase outreach at public events including recent purchases of trash related table games, giveaways made of post-
consumer recycled content, improvements to public education booth, and permanent posters and signage for City
facilities and events.
Additionally, printing and reproduction efforts such as the Utilities Resource magazine and Utility bill insert activities
were forecasted but not published in the last fiscal year. These activities will resume in FY 2022 -23 and the costs are
again applicable to the fund.
The Data Processing Services account includes funds for a construction and demolition waste tracking software called
Green Halo. The City’s contract with Green Halo was terminated in May 2022 after failed attempts to integrate th e
software with the existing Energov platform, thereby making the software ineffective.
Page 180 of 364
Public Safety – Fire
Fire Department
A Year In Review
In FY 2021-22 the Fire Department staff made significant progress on work efforts impacting every program within
the department and finished the fiscal year $109,000, or 0.89%, under budget. In Administration, staff continued to
provide planning, directing, and evaluation of all program activities through department leadership, public
information, personnel management, fiscal and contract management, strategic coordination, and grant efforts.
Emergency Response program personnel continued to focus on providing premier service to the community through
all-risk response and training, which received significant improvement with the addition of the Fire Training Captain
position early in the fiscal year. 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. These efforts were helped with the continued rollout of the self-inspection program allowing low-
risk occupancies to conduct inspections through a self -service option. Additionally, the Department significantly
bolstered its ability to provide emergency management services to the City and community by adding a new full-
time Emergency Manager position to help improve the City and community’s readiness for a major emergency or
disaster, manage critical planning efforts, and oversee hazard mitigation efforts. Additi onally, the Fire Department
coordinated several emergency management -related training offerings for City staff. 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 department implemented a new service program, the Mobile Crisis Unit, which successfully became operational
in Quarter 4 of FY 2021-22. The Mobile Crisis Unit provides crisis support services to community members to improve
the availability of local programs and help alleviate calls for service traditionally provided by public safety staff by
handling low-acuity calls. Staffing remained a focus for the Fire Department in FY 2021-2022 as the staff filled 17
positions which represent nearly 27% of the department's workforce and conducted three promotional exams for
newly promoted engineers, captains, and a battalion chief.
Accomplishments and Strategic Goal Updates
Diversity, Equity, and Inclusion: In coordination with Public Works and Human Resources, continue to
enhance the department’s diversity, equity, and inclusion through improvements to fire station facilities,
firefighter recruitment and train ing. The department filled 17 positions and 11 promotional placements
including one Battalion Chief, five Fire Captains, and five Fire Engineers. Of the 17 positions filled, four were
filled by internal department staff and 13 were external department hires. Two of these positions were the
new Fire Intern program which has a goal of improving department diversity by offering individuals an
opportunity to learn more about a career in the fire service at an early age. This provided a great
opportunity to improve the diversity of department staff which was successful. Human Resources was a
critical partner in the success of these hirings. Public Works staff continue to work towards completing a
study and plan development to improve the inclusivity of the fire s tation living quarters at Fire Stations 3
and 4. The anticipated completion date of that work effort is Quarter 4 of FY 2023 -24.
Climate Action: In coordination with the Office of Sustainability, continue to reduce the department’s
carbon footprint to support Climate Action through best practices and thoughtful replacement of
department apparatus resources. Staff continues to seek opportunities to electrify operations to help
reduce the carbon footprint left by the department’s operations. In FY 2021 -22 staff was able to replace
natural gas-powered ovens with electric units and purchase an e-bike for administrative staff to utilize for
inner City meetings and travel. Staff also participates on the City’s Green team to help ensure the City can
meet the current carbon neutrality goals. In FY 2022-23 staff will seek to replace apparatus and equipment
that provides a lower carbon footprint than the replaced units.
Housing and Homelessness: In coordination with Community Development and Administration,
implement mobile health care response model to connect services to unhoused residents and visitors in
the City. Staff successfully rolled out the Mobile Crisis Unit in June 2022. This Unit functions is staffed by an
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Public Safety – Fire
Emergency Medical Technician and contracted Mental Health Case Worker to respond to behavioral health
and substance abuse crises to (1) help connect community members with existing services and (2) reduce
the calls for service that historically have been handled by Fire Paramedic and Law Enforcement respon se,
which typically is ill-suited to provide care for these types of incidents. In FY2022-23 staff will use response
data to adjust the program as needed and work to partner with the County of San Luis Obispo to expand
the program.
Other Department Objectives: Continue the implementation of the five strategic directions identified in
the Department’s Annual Operational Plan as part of the 5‐Year Strategic Plan by connecting with our
community, continuously evaluate programs and service delivery, analyze relevant data to inform
decision making, improve organizational culture, sustainability, and health, and support fiscal
sustainability in department operation. Fire Department Staff continued to work through carrying out
strategic directions found in the Department’s strategic plan. Some of the major work efforts and
accomplishments in FY2022 included partnering with City Administration, and Parks & Recreation to bolster
open space fuel reduction hazard mitigation efforts, improving the fire and life safety self-inspection
program, improved cross training with dispatch and emergency response personnel, department policy
streamlining and improvements, and expanded suppression training programs.
Challenges
The most significant challenge over FY 2021-22 was related to the staffing turnover. As previously discussed, the
department conducted 17 position recruitments and filled an additional 11 promotional positions making up over
44% of the department’s staff. The staff time and attention required to facilitate the se recruitments, placements,
and subsequent training and onboarding impacted department productivity, most significantly related to finalizing
the development of an updated department five-year Strategic Plan. Currently, the only vacancies within the
department are related to firefighter positions within Emergency Response which will be addressed through a recruit
academy to be held in FY 2022-23. At the completion of this Recruit Academy, staff anticipates the department to
be fully staffed. Additionally, the current Fire Chief is retiring in the Fall of 2022, and onboarding the new Chief will
be a focus for staff. The FY 2021-22 challenges related to staffing are not expected to continue in FY 2022-23,
however, succession planning will be an essential focus to improve department resiliency through future turnover.
Another challenge staff encountered in FY 2021-22 was related to the activation of the Mobile Crisis Unit. Staff had
originally hoped to have the program rolled out early in the fiscal year, howe ver, encountered several challenges
that delayed the commencement of the new service. Some obstacles included job description meet and confer
obligations with the impacted labor group, securing the program vehicle, completing a request for proposal for
contracted mental health services and securing a subsequent agreement with Transitions-Mental Health Association
(TMHA), and finally the recruitment and hiring of the Mobile Crisis Unit Case Manager through the THMA agreement.
These challenges were overcome by June 2022 and the Unit began responding in mid-June.
Fiscally, the biggest challenges came from two areas, which are further discussed in the variance analysis section
below. The first challenge area was related contract services for the servicing of th e department’s “Plymovent”
system which expels diesel exhaust at fire stations that are generated by the fire apparatus. The service and
maintenance costs substantially exceeded the allocated budget. Much of these costs are not expected to continue
in FY 2022-23, however, the current budget is likely still underfunded, and staff will address as needed for the 2023-
25 Financial Plan. Secondly, fuel costs increased at historic levels following the Russian invasion of Ukraine in
February 2022 and impacted the department’s fuel budget which ended the year at 26% over budget. While down
from the peak in July, the increase in fuel cost is expected to continue through FY 2022 -23 and staff has requested
carryover funding to address the anticipated budget shortfall.
Performance Measures
Table 29: Fire Performance Measures
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Public Safety – Fire
Objective Measure 2021-22
Target
2021-22
Actual
Deliver Timely Emergency
Response to ensure rapid
care and hazard mitigation.21
Meet the Response Time objective as defined by General
Plan
Safety Element of 4 minutes to 95% of all lights-and-siren
emergencies in the City.
4:00 6:02
Meet the Total Response Time (TRT) goal
of 7 minutes or less to 90% of all lights-and-siren
emergencies in the City as defined by the Department’s
Master Plan. TRT Includes Call Processing Time, Turnout
Time, and Travel Time.
7:00 8:44
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 1:37
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 3:00
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 5:34
Provide timely service to the
development community.
% of Fire Department Development Review activities
completed within published cycle times. 80% 61%22
Variance Analysis
Overall, the department was able to finish the year was minimal savings of less than 1%. The primary drivers of
these savings are listed in the descriptions below for the four different expenditure categories.
Table 30: Fire Variance Analysis
21 While the Fire Department did not meet the response time performance targets in 2021 -22, the target remains
unchanged in 2022-23 due to National Fire Protection Association recommended standards. The fire department is
working to implement process improvements based on data analysis to help improve turnout times. Additionally,
COVID-19 call screening and additional PPE requirements have impacted the speed of both call processing times
and turnout times. Fire department staff will continue to work with Police Department staff to help improve call
processing time. 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.
22 Fire Prevention staff encountered significant staffing challenges that impacted productivity levels related to
timely development plan review. The Department’s most senior Fire Inspector retired in Dece mber 2021 and the
position was filled two months later with an entry-level inspector who had previously been the program’s
Administrative Assistant. The Administrative Assistant vacancy was filled at the End of March. Onboarding and
outside state fire marshal course training new Inspectors, CUPA and Inspector 1, also impacted review and
inspection activity. Even while fully staffed the department struggled to meet the performance measure of 80%
and was authorized to hire a half-time fire inspector to assist with workload capacity. The ½ time inspector began
in July 2022. Since the hiring, the department’s performance has increased significantly. As of August 18, 2022, the
staff is at completing 93% of development review activities within published cycle tim es.
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Public Safety – Fire
Salaries and Benefits – Several factors led to the negative variance related to Staffing and Benefits for the Fire
Department in FY 2021-22. The largest driver occurred in the Emergency Response program, which absorbs nearly
80% of the department’s annual operating budget. The overage in emergency response had been offset by salary
savings experienced in other department cost centers. The variance was driven by negotiated cost of living and
equity adjustments provided to staff after the FY 2021-22 budget was set. Fortunately, the City included a
contingency budget for this increase within the Finance Non-Departmental budget which will offset any overages.
Additionally, departments did not budget for the increases related to the employee appreciation leave ti me that was
granted to all employees in December 2021. In emergency response, this leave generated a cost due to the overtime
required to backfill employees who utilized the leave benefit and cash out cost for employees who were not able to
utilize the leave time before June 2022. Other drivers included workers’ compensation and vacancy-related overtime
backfill cost. Staff does not expect this level of variance in FY2022-23 as the current budget incorporated the
negotiated wage increases and staffing levels have improved.
Contract Services – The primary driver for savings in contract services was related to saving in the Mobile Crisis Unit
mental health case manager agreement. Staff had budgeted for a full year of services, however, due to delays in
program implementation, the contracted case manager did not begin until June 2022 resulting in significant savings.
These savings helped offset some contract services overages in different programs including Fire Administration
which incurred an unbudgeted one-time cost to support the County Fire Chief’s Association’s effort to complete a
ground ambulance feasibility study, and the Fire Station Facilities Support cost center which encountered a
significant overage in the fire station exhaust removal (Plymovent) system due to unanticipated maintenance and
servicing costs. While the feasibility study fee was a one-time cost and not expected to continue staff anticipates
that the plymovent system will require a budget increase and will monitor and adjust as needed fo r the 2023-25
Financial Plan.
Other Operating Expenses – Moderate savings were observed in most cost centers’ “Other Operating Expenses”
with significant savings coming from the Mobile Crisis Unit program which was encountered due to the delayed
program implementation. The Mobile Crisis Unit budget was developed for a full year of service and the program
did not fully roll out until June of 2022. Other savings can be attributed to training for Emergency Response personnel
due to specialized team personnel being out on workers’ compensation leave and unable to attend training.
Additionally, due to low staffing levels encountered in the first two quarters of the fiscal year, volunteer training
opportunities were prevented due to the department's minimum available staffing policies. Department staff does
not anticipate significant Other Operating Expenses savings in FY 2022-23 but will continue to monitor activity and
adjust as needed for the 2023-25 Financial Plan.
Utilities – Electric Service savings was the primary driver for the positive variance related to Fire Department utilities.
Staff observed 30% savings in that account due to recent fire station lighting upgrades to more efficient sighting
systems and paired with lower energy rates achieved through the Central Coast Community Energy (CCCE) program.
The department experienced slight savings in sewer services and slight overages in water and natural gas services.
Staff will continue to use actual costs to inform any needed budgetary adjustments for th e 2023-25 financial plan.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing 10,783,935$ 10,950,943$ 11,081,955$ (131,012)$ -1%10,541,887$
Contract Services 129,077$ 310,928$ 214,357$ 96,572$ 31%267,662$
Other Operating Expenses 610,500$ 812,470$ 690,450$ 122,020$ 15%651,935$
Utilities 97,687$ 117,687$ 95,985$ 21,702$ 18%123,874$
TOTAL 11,621,200$ 12,192,029$ 12,082,748$ 109,281$ 1%11,585,358$
Fire FY 2021-22
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Public Safety – Fire
Fire Department Revenue
Table 31: 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. Additionally, staff encountered several
underground storage tank replacements that occurred at fuel stations throughout the City which incur an
additional fee within the CUPA program. Fire Prevention staff inspection activity also was higher than forecasted
which resulted in additional Fire Plan Check & Inspection fee revenue. Finally, the department was able to secure
funding through the County of San Luis Obispo’s Nuclear Power Program to offset increases in expenditure budget
used to purchase Emergency Operations Center Equipment. This revenue was added to the “Other Fire
Department Revenue” account which caused a significant variance at that account level due to the originally
forecasted revenue.
Budget Actual Variance %
Fire Plan Check & Inspection 361,415$ 368,800$ 379,865$ 11,065$ 103.0%350,000$
R1 Inspection Fees 327,088$ 320,000$ 325,663$ 5,663$ 101.8%351,000$
Cal Poly Fire Services 315,241$ 273,567$ 273,567$ -$ 100.0%361,684$
Medical ER Recovery 198,103$ 201,993$ 201,991$ (2)$ 100.0%216,938$
CUPA Inspection Fees 146,953$ 160,000$ 182,644$ 22,644$ 114.2%172,800$
Fire Department Permits 101,572$ 100,000$ 98,529$ (1,471)$ 98.5%108,000$
Fire Alarm Permits 8,962$ 11,932$ 10,994$ (938)$ 92.1%10,010$
Other Fire Department Revenue 41,426$ 7,148$ 21,195$ 14,047$ 296.5%5,890$
Total 1,500,759$ 1,443,440$ 1,494,447$ 51,008$ 104%1,576,322$
Fire Department Revenue FY 21 Actual FY 2021-2022
FY 23
Forecasted
Budget
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Public Safety – Police
Police Department
A Year In Review
Over the past year, the department focused on the following main areas: enhanced recruitment, maintaining COVID-
19 health and safety, employee wellness, and community partnerships. In FY 2021-22, a total of twelve employees
left the department, 75% of these vacancies were police officer positions. As a response, the department revamped
recruitment efforts to attract the best candidates available, and as a result twelve positions were filled (this includes
sworn and civilian positions).
The department also focused efforts on maintaining employee health during COVID -19. The priority was keeping
employees healthy and staffing shifts appropriate; however, this was not always possible as employees contracted
COVID-19. With officers unable to work due to being sick and/or quarantining, this required increased overtime and
contributed to officer fatigue.
Department staff has also worked to bolster efforts with employee wellness and peer support after the tragic murder
of Detective Benedetti. The Peer Support Team provided several resources to employees, staff encouraged others to
seek professional services, and many employees are still actively benefitting from these services.
In addition, the department has continued to enhance community relationships by strengthening programs such as
the PAC (Police Advisory Committee) and the Police Roundtable. Integrating members of the community in these
programs helps foster mutual respect and understanding, it also provides an opportunity for open communication
and feedback.
Lastly, the department worked closely with the City Homelessness Response Manager, other City departments,
Transitions Mental Health, County Behavioral Health, and the Sheriff’s department to address ongoing concerns with
homelessness and the resulting impacts on the community.
Accomplishments and Strategic Goal Updates
Economic Stability:
o Despite staffing challenges, the police department continued to provide a public safety presence in
the downtown during daytime hours. Nighttime coverage was limited due to minimum staffing
needs in patrol.
o The department continued to work with Transitions Mental Health (TMHA) to hire two Mental
Health Clinicians for its Community Action Team (CAT).. A new contract position was created in the
Police Department titled “Homeless Outreach Services Coordinator”, to help with training and
oversight of the CAT mental health clinicians and streamline communication between TMHA and
the police department.
Housing:
o A contract was awarded to TMHA for a second Mental Health Clinician position. THMA is currently
working to identify qualified candidates; the initial interviews were unsuccessful.
o 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.
Climate Action:
o The department worked to address traffic safety issues by conducting numerous operations under
the FY 2021-22 Office of Traffic Safety Grant.
o Staff utilized social media to encourage and educate the community on safe driving behavior.
Other Accomplishments:
o The Racial and Identity Profiling ACT (RIPA) was formed as part of AB953. The goal of RIPA is to
eliminate racial profiling and improve diversity and racial and identity sensitivity in law enforcement.
Law enforcement agencies are required to report data to the Department of Justice on an annual
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Public Safety – Police
basis. The department started data collection in January 2022 and the first reporting period will be
available for review in spring of 2023.
o With the help of funding from the Office of Traffic Safety Grant, staff started the implementation of
electronic citation and collision data collection (E-Citation and E-Collision). Currently, all officers are
using the E-Collision software and patrol will be utilizing E-Citation in the future. The benefits of
using E-Citation software are increasing officer productivity and accuracy, fewer citations are
dismissed for errors, and decreases data entry time for Records Clerks.
o A Records Lead position was created to provide a backup for the Records Supervisor position and
create more efficiencies in the Records Division.
o The department successfully navigated COVID-19 without compromising service to the community.
o The department purchased and is implementing a community engagement tool called Spydr
Technology which provides automated customer service and survey tools for community members.
The value of Spydr is this will allow the department to collect and analyze real and timely feedback
from those using police services at the time the service is rendered. The software is stil l in the
implementation phase, but data should be available in the coming months.
Challenges
Over the last twelve months, the Police Department experienced staffing challenges which adversely affected
scheduling in both patrol and dispatch. The vacancies were a result of medical retirements, employees relocating,
career retirements, and employees out due to injuries. The department hired nine police officers and two dispatchers
during FY 2021-22.
Over the last year, out of a total of 60 sworn positions, the department lost the equivalent of twelve fulltime officers
in leave time (including sick, workers’ compensation leave, vacation) and an additional six officers in vacant positions.
This is about 30% of the department's sworn workforce and presented a significant challenge in providing public safety
services to the community while still maintaining employee health and resiliency. Like the City of San Luis Obispo,
agencies across the nation are struggling to fill positions in law enforcement and have st arted using hiring incentives
to try and attract qualified candidates. Staff is committed to recruiting and retaining qualified candidates that share
a common vision with the department and City as a whole.
Performance Measures
Table 32: Police Performance Measures
Objective Measure 2021-22 Target 2021-22 Actual
Reduce Crime # of total Part I Crime by year.23 1,825 2,069
Provide safe
roadways for
pedestrians,
vehicles, and
bicyclists.
# of total traffic collisions.24
Vehicle: 500 399
Pedestrian: 30 32
Bicycle: 42 36
# of targeted enforcement operations
conducted under the Office of Traffic
Safety Grant25
DUI Checkpoints: 2 2
DUI Saturation Patrols:
30 28
23 Part 1 Crimes include: homicide, forcible rape, robbery, aggravated assault, burglary, and motor vehicle theft. Figures shown
represent calendar year 2021.
24 Traffic Collision data is shown by calendar year.
25 Office of Traffic Safety grant is on a federal fiscal year (Oct – Sept). Target figures for FY 21-22 were based on the previous
year’s grant. Staff completed all grant objectives for the current OTS grant.
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Public Safety – Police
Objective Measure 2021-22 Target 2021-22 Actual
Traffic Enforcement
Operations: 15 8
Distracted Driving: 7 7
Bicycle & Pedestrian
Enforcement: 6 5
Reduce Homeless
related Calls for
Service through
proactive
engagement.
# calls related to homelessness26 7200 7441
# of unique individuals contacted by
CAT 600 578
# of Family & Agency Reunification27 60 17
# of Local Permanent Housing28 28 3
# of major camp cleanups 10 13
# of Mental Health/Substance Abuse
Treatment Referrals 160 127
Variance Analysis
Table 33: Police Variance Analysis
Salaries and Benefits –
As reflected in the chart above, expenditures for total staffing ended the fiscal year over budget (101%). Historically,
over the past 20 years, the department has not exceeded its total staffing budgeted amounts, but there were
unprecedented circumstances that contributed to the overage in FY 2021-22. The department experienced the death
of Luca Benedetti in May 2021, only months before the department started FY 2021-22. Department staff did their
best to cope with all the challenges related to this loss; unfortunately, many officers experienced challenges returning
to work. As a result, in FY 2021-22, Workers’ Compensation Leave increased 58% from the previous year.
During the year, there were 16 police officers out on Workers’ Compensation (WC) Leave, some were out all year
while others were out sporadically. This totaled over 11,700 hours in WC leave which was a significant increase from
prior years and because of this, staff had to fill scheduling gaps with overtime. The Patrol schedule is completed in
advance and anytime an officer is out unexpectantly (sick leave, WC leave, etc.) the schedule must be adjusted to
cover the shift which normally results in overtime. Overtime hours worked related to shift coverage increased 18%
compared to last fiscal year.
26 All stats related to homelessness are based on calendar year.
27 & 6 Actuals for Family Reunification and Local Permanent Housing were lower than expected. Impacts of COVID were still
being experienced in the community; there was a decrease in permanent housing available as well as fewer homeless
individuals interested in reunification. Due to staffing shortages in patrol, there was only one CAT officer working during the
last part of the fiscal year, in addition, the Mental Health Clinician resigned in early April 2022.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing 12,885,932$ 13,717,392$ 13,821,611$ (104,219)$ -1%14,925,298$
Contract Services 561,899$ 936,966$ 763,754$ 173,211$ 18%838,194$
Other Operating Expenses 338,538$ 592,904$ 517,011$ 75,893$ 13%415,640$
Utilities 116,037$ 147,550$ 130,184$ 17,366$ 12%145,650$
TOTAL 13,902,407$ 15,394,812$ 15,232,560$ 162,252$ 1%16,324,782$
Police FY 2021-22
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Public Safety – Police
Table 34: Workers Compensation Leave Hours by FY
Worker’s Compensation Leave Hours by FY
FY 2019-20 FY 20-21 FY 21-22 % Increase from last FY
3,452 7,439 11,722 58%
Table 35: Overtime Hours for Shift Coverage by FY
Overtime Hours for Shift Coverage by FY
FY 2019-20 FY 20-21 FY 21-22 % Increase from last FY
3,338 5,605 6,613 18%
Total overtime expended for the year was $1.3M, which was about $600K over budget and 13.5% higher than the
previous year. In addition to more overtime hours worked, there was a 5% salary increase to all Police Officer
Association members that was not included in the department budget. Fortunately, the City included a contingency
budget for this increase within the Finance Non-Departmental budget which will offset the Police Department
overage.
Table 36: Total Overtime Expenditures by FY
Total Overtime Expenditures by FY
FY 2019-20 FY 20-21 FY 21-22 % Increase from last FY
$994,462 $1,150,966 $1,307,379 13.5%
Other factors that impacted staffing costs included the approval of two officer over -hire positions. The over-hire
positions were to help offset vacancies from officers out on WC leave and to fill shifts that the department was
desperately trying to fill. Existing officers filling shifts were feeling overworked and fatigued as overtime increased.
In addition to officers out on leave, there were vacant positions as well. During FY 2021-22, there were a total of nine
officer positions hired. Hiring of lateral officers and cadets occurred at a very fast pace, which resulted in very minimal
salary savings. Patrol positions remained unfilled after hiring due to field training which typically takes about four to
six months to complete before an officer can work independently on a shift. Cadet hires took longer to onboard and
fill patrol shifts due to attending the academy.
Lastly, costs associated with hiring incentives were covered within the department’s existing salary budget, due to
saving created by vacancies. For the police department, this totaled over $68,000. This included incentives for new
dispatchers and police officers hired during the fiscal year.
Contract Services –
The Administration and Investigations divisions ended the year with savings in Contract Services. The department
budgeted to hire a second mental health clinician (through an agreement with TMHA) to join the Community Action
Team; however, Transitions Mental Health has had challenges hiring and therefore the position continues to be
unfilled. In addition, there was a Significant Operating Budget Change submitted by City Administration to cover police
staffing costs related to Cannabis. The funding was put into a non-staffing account (Other Contract Services);
however, because the funds were intended to cover staff time, the department will request that this funding be
moved to a more appropriate staffing account instead.
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Public Safety – Police
Other Operating Expenses –
Savings in the Other Operating Expenses category were from various cost centers. In late February, the department
received City Manager approval for a hotel voucher program to be overseen by the Homelessness Response Manager.
The program has not yet been implemented therefore savings were incurred. Because of this savings, the department
will request carry over in anticipation of the program (or a similar program) to start in the new fiscal year. The
department budgeted to purchase replacement bicycles for the downtown bike team; however, staff used existing
budget and also funding from Ventures and Contingencies to purchase five electric bicycles instead. Department staff
worked with the City’s Sustainability Manager to submit for reimbursement for the E-Bikes through the Central Coast
Community Energy program, unfortunately the request was denied. Lastly, the department realized savings in data
processing services related to the County’s Criminal Justice Information System. Actual costs for the year were le ss
than anticipated; rates are determined by the County and rates per user decreased.
Utilities –
The department had savings in Utilities mainly due to PG&E charges. Other utilities such as sewer and water were
slightly over expended, so electric service savings helped offset these overages. It is challenging to budget accurately
for utilities, but staff will monitor expenditures and adjust the budget accordingly next fiscal year.
Police Department Revenue
Table 37: Police Department Revenue
Overall department revenue fell short about 9%. The department’s Other Police Revenue account often acts as a
pass through for miscellaneous revenue; actuals received are more in line with last fiscal year so staff’s initial budget
projection may have been too high. This will be adjusted for FY 2022-23 at the mid-year review. Administrative
Citation revenue was less than projected due to a decrease in the amount of noise related administrative citations
issued which directly correlates to the reduction in Noise calls for the year. Revenue related to Alarms were low as
some companies were still dealing with the effects of COVID; companies went out of business or could not afford to
pay false alarm or permit fees which were sent to collections. Permit revenue was also lower than expected but is
slowly starting to climb back to pre-COVID amounts; revenue received in FY 21-22 doubled from the previous year.
Budget Actual Variance %
Other Police Revenue 217,369$ 259,639$ 212,914$ (46,725)$ 82.0%250,000$
Administrative Citations - Safety 136,627$ 125,000$ 95,204$ (29,796)$ 76.2%152,833$
Alarm Permits - Contract (Police)107,717$ 90,000$ 80,204$ (9,796)$ 89.1%90,000$
Police Issued Parking Fines 61,057$ 75,000$ 80,969$ 5,969$ 108.0%70,000$
Tobacco Permits 29,247$ 29,000$ 28,421$ (579)$ 98.0%29,000$
DUI Cost Recovery 18,968$ 16,417$ 25,622$ 9,205$ 156.1%16,417$
Tow Release Fees 7,441$ 9,000$ 15,824$ 6,824$ 175.8%9,000$
Police Department Permits 2,635$ 7,511$ 5,027$ (2,484)$ 66.9%7,511$
Collision Investigation 1,848$ 3,000$ 1,139$ (1,861)$ 38.0%3,000$
Accident Reports 1,977$ 2,000$ 4,333$ 2,333$ 216.6%3,400$
Witness Fees 1,650$ 1,606$ 4,400$ 2,794$ 274.0%1,606$
Second Response Fees -$ 1,071$ 1,437$ 366$ 134.1%1,200$
Property Release Fees 33$ 500$ -$ (500)$ 0.0%(1,642)$
Miscellaneous Revenue 13,837$ -$ 6,417$ 6,417$ -$
Total 600,406$ 619,744$ 561,909$ (57,835)$ 91%632,325$
Police Department Revenue FY 21 Actual FY 2021-2022 FY 23 Forecasted
Budget
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Utilities – Water and Sewer Funds
59
Utilities Department
The Utilities Department oversees two Enterprise Funds, an Agency Fund, and the Solid Waste and Recycling
program in the General Fund. The Solid Waste and Recycling budget, while managed by the Utilities Department, is
a General Fund program, funded by AB 939 and Franchise Fee funding (see Solid Waste write-up). In addition to the
Water and Sewer Funds, the Utilities Department also manages the Whale Rock Fund, an agency fund, which is
overseen by the Whale Rock Commission. The City’s share of operational expenses and CIP contributions for Whale
Rock operations are budgeted for in the Water Fund’s Source of Supply budget.
Table 38: Utilities Funding and Programs
Fund Type of Fund 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 replacement, and debt service.
Taxes, including utility user taxes, do not
support these services.
Sewer
Fund Enterprise Fund
Administration and Engineering
Wastewater Collection
Environmental Programs
Water Resource Recovery
Water Quality Lab
Utility Billing
The City’s sewer operations are paid for by
sewer service rate revenues and cover 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
(AB939)
General Fund Solid Waste and Recycling
The Solid Waste program is paid for by AB939
and Franchise fee funding.. AB939 funds may
only be used to pay for activities that divert
waste from the landfill so any funds remaining
at the end of the year must remain within the
Solid Waste program budget.
A Year in Review
The Department’s Enterprise Funds ended FY 2021-22 with significant expenditure variances under budget and
revenue variances over budget. Revenues in both Water and Sewer were higher than anticipated due to higher
irrigation demand associated with a dry winter and development impact fees coming in higher than anticipated.
During FY 2021-22 water consumption increased by 5.56% compared to FY 2020-21. Operating expenditures were
also underspent in both Funds. The Water Fund was $1.9 million under budget, and the Sewer Fund was $1.2 million
under budget. Further details on these variances are discussed below.
The Utilities Department concluded FY 2021-22 having provided high-quality services with limited interruption while
navigating post-pandemic normalization, inflation and supply chain disruptions, and drought-related challenges. The
energy efficiency upgrades at the Water Treatment Plant have been completed, and the Water Resource Recovery
Facility upgrade is scheduled to be substantially completed by December 2023. The Utilities Department remains in
good financial condition, but due to high inflation and above-inflation-rate increases in the chemical and electricity
markets, the Department anticipates the need for more substantial rate increases in the next Financial Plan. At the
WTP the energy efficiency improvements were offset by a 20% PGE rate increase. These WTP energy efficiency
improvements do not offset the 20% increase that we also saw to our source water pumping which is far more
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Utilities – Water and Sewer Funds
60
expensive than WTP energy use. Lastly, once the new systems at the Water Resource Recovery Facility (WRRF) are
commissioned and a new baseline has been established, staff will better understand how the electrical rate increases
will impact the operating budget moving forward . While chemical demands at the new WRRF will be significantly
reduced, staff anticipate increased electrical demands with the new regulatory-driven process improvements.
Accomplishments and Strategic Goal Updates
Accomplishments
1. Completed installation of a Tesla backup battery at the Water Treatment Plant.
2. Finalized drafting of Groundwater Sustainability Plan and submitted to State Water Board for review.
3. Replaced Reservoir 1 (treated water storage tank) floating cover.
4. Replaced Terrace Hill Tank with a low-cost Pressure Reducing Station.
5. Completed water treatment plant energy efficiency and ozone system upgrade project.
6. Significant progress of the SLO Water Plus project, located at the WRRF, including the new membrane
bioreactor and ultraviolet disinfection system, and a successful cutover to the new facility PG&E power
service line.
7. Completed construction of sewer and water pipeline system upgrades to serve San Luis Ranch.
8. Completed construction of site infrastructure and sewer lift station needed to develop Avila Ranch.
9. Completed Phase 1 (study phase) of Prop 1 Groundwater Contamination Study.
10. Application started for the Prop 1 Groundwater Grant Program for additional funding ($5,877,765) for PCE
Plume Characterization
11. Staff applied for and received funding from the State for past due water and wastewater bills during the state
moratorium in which cities were unable to shutoff water due to nonpayment. Approximately $221,000 was
received from the state for past-due water bills in FY 21-22 and $146,000 was received from the state for
past-due wastewater bills and will be recorded and applied to customer accounts in FY 2022-23.
12. 277 acre-feet of recycled water delivered (5.5% of total City water use).
13. 81 events staffed for outreach and community engagement, including facility tours, educational visits at local
schools, and farmers markets.
14. 69 shutoffs for non-payment April – June 2022, when the Department returned to shutoffs once the state
moratorium was lifted (less than 0.5% of all water/wastewater customers)
15. 5+ years of water supply available, based on FY 2021-22 consumption
16. Met/exceeded human health requirement of San Luis Obispo Creek monitoring program due to successful
implementation of new and ongoing best management practices.
17. Expanded partnership with California Polytechnic University’s Sustainable Utilities Research and Education
program at the WRRF, including an award-winning National Science Foundation funded research pilot led by
staff from the State University of New York.
18. Completion of a near real-time, Department-wide energy dashboard designed to reduce demand and
demand/time of use electricity charges.
Challenges
The challenges that the Utilities Department experienced in FY 2021-22 can broadly be summarized as
staffing shortages and transitions, post-pandemic normalization, inflation, supply chain disruptions, and
drought-related challenges.
Post-pandemic normalization including staffing transitions
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There are three predominant ways in which Utilities operations have normalized in FY 2021-22 as the City eases out
of the COVID-19 pandemic.
1. The distribution of water use amongst customer classes has returned to a pre-pandemic norm as businesses
have reopened, remote work has decreased, schools have opened, and Cal Poly has resumed in -person
classes.
2. The California State moratorium on water shutoffs for non-payment expired on December 31, 2021.
3. The Utilities Department and its contractors struggled to recruit qualified candidates to address employee
turnover during the pandemic. Recruitment and hiring have largely returned to pre-pandemic norms.
The first two items resulted in uncertainty around revenues and substantial work efforts around tracking and adjusting
revenue projections. As the City continues to ease out of the COVID-19 pandemic, the Utilities Department anticipates
that revenues will stabilize to pre-pandemic norms. The most notable impacts of the third item were to the City’s
contract meter reading operations, where inadequate staffing levels resulted in meters not being read on time during
multiple billing periods in FY 2021-22. Additionally, the Utilities Department had 20 new hires or promotions (28% of
department staff) in FY 2021-22. Consequently, Utilities had to operate significant portions of the year below planned
staffing levels. This resulted in more work hours in call back, overtime, and more management time dedicated to staff
training to ensure adequate staffing coverage and job skills to fulfill program requirements. Recruitment issues appear
to have lessened since the start of the pandemic for the Utilities Department and its contractors.
Inflation and Supply Chain Interruptions
During FY 2021-22, there were substantial increases in the cost of operations that were mostly tied to rising material
costs, supply chain disruptions, and inflation.
The most substantial increases in operating costs were chemical and electricity service cost increases. For chemicals,
it is typical to see five to ten percent price increases on an annual basis. In FY 2021-22, several chemicals exceeded
the aforementioned 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.
Table 39: Chemical Price Increases
Chemical 2021-22 Contract 2021-22 Mid-Year Increase 2022-23 Contract* % Increase
Alum $336 ton $425 ton $450 ton +34%
Fluoride $1,760 ton $3,211.40 ton +82%
Chlorine (Cl2) $0.68 gal $1.13 gal $1.40 gal +106%
Sodium Hydroxide (NaOH) $0.76 gal $1.20 gal $1.28 gal +68%
Polymer $0.68 lb $0.95 lb +40%
Liquid Oxygen (Lox) $1.28 gal $1.30 gal +2%
*One year contract with option to re-negotiate in 6 months due to volatile market.
Similarly, the City’s non-Community Choice Energy operations (facilities located outside of City limits) had a 20 percent
or higher increase in electricity service costs. Fortunately, these increases were phased in, and were able to be
accommodated due to conservative budgeting, staff’s agile and data-centric operational strategies, and cost savings
from recent energy efficiency improvements at the Water Treatment Plant.
Several indices corroborate what the Utilities Department is seeing reflected in the cost of operations. The Consumer
Price Index, for all items, reflects a 12-month increase of 8.54% increase in May 2022. However, the Municipal Cost
Index is likely more indicative of true cost increases and reflects a 12-month increase of 12.45% in May 2022.
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Table 39b: Index Comparison
Index 12-month % change
(as of May 2022)
12-month % change
(3-year average from 2019-2021)
Construction Cost Index 10.46% 3.23%
Consumer Price Index 8.54% 2.36%
Municipal Cost Index 12.45% 3.04%
Producer Price Index 21.75% 3.88%
Drought-Related Challenges
On March 28, 2022, Governor Newsom issued an executive order on statewide drought conditions requiring that
California’s urban water suppliers implement the water saving measures outlined in Level 2 of their Water Shortage
Contingency Plans. Examples of Level 2 actions for the City include but are not limited to:
1. Prohibiting irrigation between 7:00 AM and 7:00 PM
2. Increasing water waste patrols
3. Implementing rebate programs
4. Hosting workshops on effective irrigation practices
5. Conducting water use surveys
In anticipation of these required actions, the City began ramping up water conservation-related work. Impacts to
Water and Sewer as a result of drought related actions include:
1. A reduction in water sales revenue as the community curtails consumption
2. An increase in wastewater treatment and conveyance costs as the concentration of waste in the wastewater
increases
3. Costs associated with increased public outreach around water conservation and drought
4. The hiring of additional supplemental staff, which was approved as part of the budget supplement, to support
increased workloads
Subsequent to the 2012-2015 drought, the City adopted water and sewer rate structures to include higher base fees
to minimize fluctuations in revenue due to year-to-year variability in water consumption. Interestingly, water
consumption never returned to levels experienced before 2012, as many of the conservation efforts seen during that
time period were more permanent in nature, including changes to landscape. In conjunction with water conservation
efforts approved in the FY22-23 Adopted Supplemental Budget, and a statewide ban on the irrigation of “non-
functional turf” for commercial, industrial, and institutional customers, the above actions are a summary of the City’s
drought response.
The financial impacts of the drought were not fully realized in FY 2021-22 and are anticipated to continue to impact
operations in FY 2022-23. Should the drought worsen, or the State implement additional conservation measures,
revenues could be further reduced and require reductions in capital spending, operational reductions, or rate
increases to offset lost revenues.
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Performance Measures
Table 40: Performance Measures
Objective Measure 2021-22
Target
2021-22 Actuals
Manage Assets Responsibly &
Transparently
Grant and partnership dollars to be obtained to
offset rates29 $4,454,168 $2,303,891
Minimize number of Customers Shut-Off for
Nonpayment30 500 69
Average Infrastructure Asset Age (years)31 20.42 20.35
Connecting the Community to
High Quality & Reliable Service
# Unplanned Service Interruptions32 0 84
# of Sewer Lateral Replacements including Offsets 100 135
Recycled Water Delivered (AF) 300 277
Foster Leadership, productivity,
and opportunity for personal and
professional growth.
% of New Hire Safety Trainings Conducted 100%33 100%
Provide Coworkers and the
Community with Information &
Opportunities to Participate in
Decisions that Impact them
Public Outreach: # of Communications with the
Community34 170 287
Table 40-a: Utilities - City Manager Approved Carryover Budget
Sewer Fund: 2021-22 Carryover Budget Amount
Temporary Salaries (Water Resource Recovery Operator) $ 16,394
National Pollutant Discharges Elimination System Permit $ 90,000
Contract Wastewater Collection System Operator $ 90,000
Total $ 196,394
Water Fund: 2021-22 Carryover Budget Amount
Legal Services – Water Rights Licensing $ 19,600
Other Contract Services – Recycled Water Program/Groundwater Expansion $ 41,527
Total $ 61,127
29 Based on reimbursement of actual project costs as of August 2022. $4,454,168 was initially expected in FY 2021-
22 but due to project timing the shortfall is expected to be captured in FY 2022 -23.
30 The state moratorium on shut-offs was lifted in December 2021. In 2018-2019 (a typical year), there were 533
shut-offs for non-payment.
31 Average asset age from City fixed assets data. This should decrease each year as assets are replaced.
32 Includes water main and service line outages, and sanitary sewer overflows. While the goal is to have zero
unplanned service interruptions, the City sees 60-80 unplanned interruptions each year do to aging infrastructure.
Most of these interruptions are related to water service line leaks which only impact a single customer.
33 Goal is to have all safety trainings conducted for all new employees within their first three months of
employment.
34 Includes Facebook posts, blog posts, email bulletins, groundbreaking events, quarterly project reports, the
Resource, website news articles, and bill inserts.
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Water Fund
Water Fund - Expenditure Analysis
Table 41: Water Fund - Expenditure Summary
Salaries and Benefits –Salaries and benefits within the Water Fund were underspent by approximately $345,000 or 6%
during FY 2021-22. These savings were largely the result of vacancies at the City’s Water Treatment Plant and within
administrative functions of the Utilities Department. The Water Treatment Plant also underspent its overtime budget,
which had been inflated in comparison with prior years in order to account for anticipated overtime related to the
Water Treatment Plant Energy Efficiency Project. The addition of a Water Treatment Plant Operator FTE part way
through the Fiscal Year also assisted in reduced shift coverage and overtime expenses.
Contract Services – Contract Services Budget is set aside for miscellaneous consulting services, ongoing contracts, and
specialized professional services. Most of the funding in this account is used for engineering, legal, or other related
professional services for unplanned issues that may arise during the year. These services were not required in the
volume anticipated this year and were not fully utilized.
Other Operating Expenses –Approximately $1 million of the $1.38 million unspent in the other operating expenses
accounts 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 $10 million annually. The entirety of the amount unspent in the water supply account
is tied to variable electricity costs for the Nacimiento Reservoir. This discrepancy can be summarized by the following:
1. $500,000 was carried over from FY 2020-21 for Nacimiento electrical pumping costs when the Nacimiento
pipeline was offline for 4.5 months. This funding was not utilized in FY 2021-22.
2. $250,000 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 operating costs by the County of San Luis Obispo based on actual
expenditures compared to budgeted expenditures within the prior fiscal year.
3. $250,000 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. While the City was able to utilize Nacimiento for most of its source water, the total annual
pumping cost was less than originally projected.
In addition to the unspent funding outlined above, the water fund did not spend approximately $73,000 in public
outreach funding. This was partially due to the vacancy of the Community Services Group Communication Coordinator
for three quarters of the fiscal year and the department strategically setting this funding aside as a c ontingency in
case of continued escalation in chemical prices. This funding was not ultimately required to offset chemical price
increases and the water fund saved an additional $79,000 in projected chemical costs through optimization of
treatment processes at the City’s Water Treatment Plant and within the recycled water portion of the Water
Resources Recovery Facility.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing *4,142,776$ 5,551,424$ 5,204,820$ 346,604$ 7%4,961,606$
Contract Services 391,237$ 765,881$ 704,427$ 61,454$ 9%665,420$
Other Operating Expenses 10,312,986$ 12,138,663$ 10,759,699$ 1,378,964$ 13%12,175,243$
Utilities 564,395$ 679,072$ 534,005$ 145,066$ 691,085$
Transfers to General Fund 2,672,968$ 2,517,178$ 2,517,178$ -$ 0%2,311,753$
TOTAL 18,084,362$ 21,652,217$ 19,720,128$ 1,932,088$ 9%20,805,107$
* Includes one-time CalPERs downpayment in FY 22
Water Fund FY 2021-22
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Additional savings exceeding $30,000 in FY 2021-22 can be attributed to a reduction in legal services costs and a
reduction in spending in education and training. Legal service costs vary year-to-year and were underspent in FY 2021-
22 due to the lack of need for outside legal counsel. Education and training costs were reduced due to staff limiting
out-of-town travel and utilizing less expensive digital training opportunities due to COVID-19.
Utilities – The Water Fund underspent electric budgets for Water Treatment and Recycled Water Treatment in 2021-
22. The underspent budget, approximating $153,000 was largely due to energy efficiency improvements at these
facilities. Most notable is the installation of new ozone treatment technology at the Water Treatment Plant.
Transfers – This is the amount transferred into the General Fund based on the calculations from the annual Cost
Allocation Plan. Because the Cost Allocation Plan is performed based on the prior year actuals, the FY 2021-22 budget
represents the Water Fund’s shared cost of the General Fund programs from FY 2019-20.
Water Fund - Revenue Analysis
Table 42: Water Fund Revenue Analysis
Water Revenue was $5.5 million more than budgeted primarily due to development impact fees exceeding budget by
approximately $3.6 million, reflective of continued development in the City an d unknowns associated with
development construction timelines. Staff continues to refine the methodology behind development impact fee
projections; but there are many unknowns which makes forecasting challenging. Water service charges were more
than budgeted by $859,467 due to a dry winter which resulted in additional irrigation within the community.
Additionally, staff had budgeted conservatively for water service charges in FY 2021-22 to account for unknowns
associated with continued COVID-19 impacts.
Debt proceeds exceeded budget by $698,730 due to construction timing of the Water Treatment plant upgrade.
Simultaneously, State Grants were $1.4M overbudget primarily due to the time extension for the Prop 1B PCE Plume
project and expenses accrued in FY 2021-22 instead of the prior fiscal year.
The investment and property revenue budget was calculated based on 2% of the prior year’s working capital. Due to
a volatile business cycle and the Feds monetary policy to counteract inflation, the investment and property actuals
were adjusted to ’reflect the fair value of Utilities’ investments more accurately. This fair market value adjustment
amounted to $675,550 reduction in investment and property revenue actuals for the Water Fund. Budgets have been
adjusted to an even more conservative outlook in FY 2022-23 until the economy returns to a normal business cycle.
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Cal Poly Capacity & Resilience revenue was underbudget due to an invoice associated with Whale Rock being off -line
in FY 2020-21 that was refunded in FY 2021-22. In addition, Water Fund “Other Revenue” was under budget due to a
reduction in the Utilities set-up fee. Set-up fees had been reevaluated and adjusted down to account for efficiencies
from technology and the budget was not updated accordingly. This has been addressed in FY 2022-23.
2021-22 Fund Summary
Based on unaudited financials, the Water Fund will return $6.5M to working capital.
Table 43: Water Fund Summary FY21-22
Table XX: Water Fund Summary FY21-22 Amount
a) Revenue $ 33,235,095
b) Total Expenditures (c+d+e) $ 26,723,126
c) Operating Expenditures $ 19,720,128
d) Capital Expenditures $ 4,695,624
e) Debt $ 2,307,374
Year-End Net Increase return to Working Capital (a-b) $ 6,511,969
Sewer Fund
Water Fund - Expenditure Analysis
Table 44: Sewer Fund - Expenditure Summary
Salaries and Benefits – Salaries and benefits in the Sewer Fund were underspent by $539,488 (or 9%). These savings
were largely due to staff turnover (new staff hired at lower skills -based pay steps) and vacancies for the Wastewater
Collection, Water Resource Recovery Facility, Administration and Engineering, and W ater Quality Lab teams.
Additionally, there were contract and temporary positions for the Water Resource Recovery team that were added in
anticipation of short staffing which were never fully realized due to being fully staffed and adding positions later than
anticipated. The Water Resource Recovery contract and temporary accounts resulted in about $50,000 underspend.
Contract Services – Approximately $60,000 of the $291,016 underspend in the Sewer Fund’s Contract Services is due
to delays in receiving the new WRRF NPDES permit. NPDES permit amendments were delayed due to external factors
under the Regional Water Quality Control Board’s control. There were also substantial cost savings realized (about
$50,000) by leveraging Cal Poly for COVID wastewater surveillance analysis. Additionally, the fund was able to realize
cost savings (about $20,000) by shifting vendors for environmental compliance monitoring.
The remaining underspend can be attributed to minor-maintenance projects that were deferred due to concurrent
construction at the WRRF. These projects are dependent on various SLO Water Plus construction schedules and must
be coordinated with other work on site.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing*4,424,073$ 5,775,389$ 5,235,901$ 539,488$ 10%4,889,494$
Contract Services 686,709$ 1,081,706$ 790,690$ 291,016$ 37%863,361$
Other Operating Expenditures 1,354,878$ 1,942,632$ 1,830,631$ 112,001$ 6%1,741,111$
Utilities 540,553$ 793,027$ 546,169$ 246,858$ 45%937,710$
Transfers to General Fund 2,401,729$ 2,368,064$ 2,368,064$ -$ 2,573,783$
TOTAL 9,407,942$ 11,960,818$ 10,771,456$ 1,189,363$ 10%11,005,459$
* Includes one-time CalPERs downpayment in FY 22
Sewer Fund FY 2021-22
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Other Operating Expenses – For the Sewer Fund, significant balances in some accounts were intentionally set aside to
address unpredictable increases in chemical prices. The chemicals cost at the WRRF ended up being $254,838 over
budget. In anticipation of the chemical costs increases, Utilities curtailed spending in public outreach, but chemical
costs increases were predominantly offset by electrical service savings. This electrical account surplus was due to
modified SLO Water Plus schedules, and operational efficiency measures that staff exercised at the WRRF. The public
outreach accounts for approximately $70,000 of the $112,001 underspent in other operating expenses.
Utilities – In anticipation of the new Water Resource Recovery Facility coming online, the City began budgeting more
for electric services. The new facility 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) has been delayed. Consequently,
$240,459 of the $246,858 underspend stems from the Water Resource Recovery Facility budget. These savings were
used to offset increases in chemical prices this year but the full budget will be needed when the new facility is
commissioned.
Transfers – This is the amount transferred into the General Fund based on the calculations from the annual Cost
Allocation Plan. Because the Cost Allocation Plan is performed based on the prior year actuals, the FY 2021-22 budget
represents the Sewer Fund’s shared cost of the General Fund programs from FY 2019-20.
Sewer Fund - Revenue Analysis
Table 46: Sewer Fund – Revenue Analysis
Sewer Revenue was $20.7 million more than budgeted due to the timing of debt proceeds received for the WRRF
project reimbursements. Last fiscal year, Sewer was $22.8 million underbudget in Debt Proceeds due to delays in
funding related to the construction timeline and project costs carrying over to FY 2021-22. Debt Proceeds have been
adjusted to reflect the expected project reimbursements in the FY 2022-23 budget. Simultaneously, State Grants was
$4.7M underbudget primarily due to the timing of WRRF construction and reimbursement requests associated with
grant awards.
Sewer development impact fees exceeded budget by approximately $2.3 million, reflective of continued development
in the City and unknowns associated with construction timelines. Sewer service charges and base fees were more
than budgeted by $1.4 million. Staff budgeted conservatively for Sewer service charges in FY 2021-22, as there were
still unknowns associated with COVID-19 continued impacts and the moratorium for service shut-off due to non-
payment was not lifted until December 2021.
The investment and property revenue budget was calculated based on 2% of the prior year’s working capital. Due to
a volatile business cycle and the Feds monetary policy to address inflation, the investment and property actuals were
adjusted to reflect the fair value of Utilities’ investments more accurately. This fair market value adjustment amounted
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to $868,654 reduction in investment and property revenue actuals for the Sewer Fund. Budgets have been adjusted
to a more conservative outlook in FY 2022-23 until the economy returns to a normal business cycle.
2021-2022 Fund Summary
The Sewer Fund will return $19.3M to working capital.
Table 47: Sewer Fund Summary
Table XX: Sewer Fund Summary FY21-22 Amount
a) Revenue $ 69,780,885
b) Total Expenditures (c+d+e) $ 50,504,258
c) Operating Expenditures $ 10,771,456
d) Capital Expenditures $ 38,352,806
e) Debt $ 1,379,996
Year-End Net Increase return to Working Capital (a-b) $ 19,276,627
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Parking Fund
A Year In Review
Throughout FY 2021-22, Parking Services (Parking) was able to carry out many of its operations and programs that
were limited over the past few years due to the COVID-19 Pandemic. Parking was successful in assisting with economic
recovery efforts and in managing parking services for residents, business owners, and visitors. In years past, capital
projects were deferred to account for anticipated revenue shortfalls. However, substantial progress was made over
the last year related to the implementation of virtual permits for permitted residential areas and parking districts and
the addition of mobile payment methods (Mobile Apps) where pay stations are located.
Parking continues to improve the customers’ experience by modernizing a 50-year-old operational system and
equipment, to better suit the needs of the community. The use of existing equipment and staffing resources have
been designed to meet the current needs of the community, while work is underway to implement gateless and
limited contact parking operations in the structures and at metered spaces. Planned improvements for FY 2022-23
include the roll out of gateless parking operation in the 842 Palm Street parking structure, the groundbreaking on the
Cultural Arts District Parking Structure, continued expansion of multi -space pay stations and credit card capable
meters, expansion of paid parking in the Upper Monterey and Railroad Square areas, and the update to the Access
and Parking Management Plan (APMP).
Accomplishments and Strategic Goal Updates
Parking continues to be actively engaged in the economic recovery effort of the community. Across the year, Parking
addressed economic recovery and operational goals through the following actions:
1. Waived parking structure fees on the weekends between the Thanksgiving and New Year holidays
2. Expanded Passenger Loading Zones and Commercial Loading Zones in the downtown area
3. Reduced on-street metered spaces to provide space for businesses to operate in the Open SLO Program
4. Implemented mobile parking applications, which represents roughly 20% of daily transactions
5. Implemented the Conceptual Physical Plan for the City’s Center
6. Provided well-managed access to parking in the downtown area for visitors and employees through
appropriately priced daily and monthly parking programs
7. Continued promotion of other transportation methods such as SLO Transit’s Downtown Access Pass
8. Implemented the transportation strategy presented in the General Plan Circulation Element
Challenges
Parking, like many other programs across the City, experienced challenges, and impacts in the areas of staffing,
materials cost escalation, supply chain issues, infrastructure failures, and in many ways had to modify day -to-day
operations in delivering core services. Most notably, cost escalation for the Cultural Arts District – Parking Structure
has required staff to make significant recommendations to increase revenue sources to ensure that funding can be
secured. Staffing is and will continue to be a challenge in the Parking program due to the nature of the work and
staffing structure. This past year Parking Services faced staffing issues with Parking Enforcement Officers, Parking
Ambassadors, and Maintenance Worker positions. Staffing shortages had significant financial impacts on the Parking
Fund through unrealized meter, structure, and citation revenue in addition to expanded contract needs beyond initial
projections.
Parking was able to reprioritize several programmatic improvements and upgrades that were deferred in years past
due to revenue shortfalls. However, this came with major challenges in the areas of cost escalation and supply chain
shortages related to equipment maintenance and improvements. Staff experienced major cost increases in structure
pay station installations, and in many instances experienced delays in receiving materials and supplies required to
keep aging infrastructure operable.
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Parking Services has made numerous efforts to upgrade the parking infrastructure, programs , and parking systems.
While implementing new and improved technology, the program is still in a position where reliance on older
infrastructure is necessary. For example, the program experienced gate failures at parking structures, resulting in lost
revenue. In addition, staff were informed that single space coin -operated parking meters were no longer supported
by the manufacturer and could not receive additional programing updates. Throughout the year, staff were required
to address multiple maintenance issues, diverting time and attention from system improvements.
Modified operations of core services continue to be a challenge for the Parking Services Program. Operations staff
addressed almost daily impacts of transient activities in the structures including vandalism, graffiti, and debris left
behind. Recruitment and retention of the Parking Ambassadors positions has been a challenge since the pandemic
began and continues currently. Limited staffing has required parking structure gates to be up more than anticipate d
during peak evening times. Gating system failure at varying times of the day has led to confusion amongst customers
and a significant reduction in revenue. Approved plans to convert the structures to a gateless operation using license
plate recognition for payment verification in Q3 of FY 2022-23 will resolve these issues.
Expenditures
Table 48: Parking Fund Expenditures
Salaries and Benefits – There were significant savings in salaries and benefits in the parking fund, largely due to staffing
vacancies. Parking only utilized approximately 78 percent of its salaries and benefits budget. The program made
ongoing efforts to meet staffing needs and to ensure shift coverage. The use of regular, temporary and contract
employees was utilized, however, the parking program did not experience full time staffing levels at any point
throughout the year. Staffing shortages had significant financial impacts on the Parking Fund through unrealized
revenues and will continue to be a major effort of building out appropriate staffing in combination with new
technologies.
Contract Services – The Parking Program experienced excess spending in contract services, expending 111 percent of
its budget. This is primarily due to deferred maintenan ce leading to repairs and infrastructure failures, in addition to
cost escalation and supply chain issues. In many ways the program had to modify day-to-day operations in delivering
core services. Excess costs were also seen due to contracting increases for parking enforcement around citation
issuance and extending maintenance operations while working through staffing issues.
Other Operating Expenses – The Parking Program experienced excess spending in contract services, expending 109
percent of its budget. This is primarily due to unanticipated increases in credit card merchant fees around payment
transactions, print and reproduction materials for citation and parking receipts, as well as materials and supplies for
day-to-day activities. The program also had to address daily impacts of transient activities in the structures including
vandalism, graffiti, and debris left behind.
Utilities – The Parking Fund expended approximately 81 percent of anticipated utility costs. Although utility costs did
not exceed the budgeted amounts, utility costs, including water, sewer, electric services, and solid waste services
were beyond prior year actuals.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing*1,126,434$ 2,022,327$ 1,574,928$ 447,399$ 28%1,917,920$
Contract Services 684,899$ 751,806$ 835,453$ (83,647)$ -10%584,065$
Other Operating Expenditures 208,265$ 365,917$ 400,266$ (34,350)$ -9%401,525$
Utilities 117,581$ 211,301$ 170,905$ 40,396$ 24%221,933$
Transfers 990,911$ 1,105,120$ 1,105,120$ -$ 0%-$
TOTAL 3,128,091$ 4,456,471$ 4,086,672$ 369,799$ 8%3,125,444$
* Includes one-time CalPERs downpayment in FY 22
Parking Fund FY 2021-22
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Transfers – This is the amount transferred into the General Fund based on the calculations from the annual Cost
Allocation Plan. Because the Cost Allocation Plan is performed based on the prior year actuals, the FY 2021-22 budget
represents the Parking Fund’s shared cost of the General Fund programs from FY 2019 -20.
Parking Revenues
Table 49: Parking Revenues
As part of the mid-year budget process, the Parking Fund forecast was adjusted to estimate revised revenues for FY
2021-22 due to the economic impacts and parking activities following the height of COVID-19, and adjustments in
parking operations. When preparing budget adjustments, staff used a conservative approach considering the
limitations COVID-19 may have on parking revenue.
Parking programs returned to pre-COVID activity levels quicker than anticipated and revenue actuals exceeded the
revised projections by year-end by 13 percent. On-street parking revenue in June 2021 was nearly identical to
revenue received in February 2020 prior to the COVID pandemic. Similarly, parking structure usage quickly returned
to pre-COVID levels beginning in May 2021 when the Farmer’s Market was reestablished and non -city staff who
work in the downtown area began to utilize the long-term parking program. These are positive indicators of a
Parking Fund moving toward fiscal sustainability into the new fiscal year.
Table 49-b: Parking Fund City Manager Approved Budget Carryover
Parking Fund: 2021-22 Carryover Budget Amount
Funding for the Access and Parking Management Plan (APMP) $ 100,000
Funding to support agreement with IPS parking enforcement contract $ 11,500
Budget Actuals Variance %
Parking Meters 1,265,085$ 1,940,863$ 2,210,191$ 269,328$ 113.9%2,268,500$
Parking Fines 654,284$ 657,606$ 928,610$ 271,004$ 141.2%793,500$
Parking Structures 346,300$ 835,294$ 1,013,028$ 177,734$ 121.3%1,328,450$
Long Term Parking 422,381$ 547,795$ 712,634$ 164,839$ 130.1%844,900$
Other Revenue 380,778$ 569,578$ 263,362$ (306,216)$ 46.2%595,400$
Total 3,068,827$ 4,551,136$ 5,127,825$ 576,689$ 113%5,830,750$
FY 2021-2022 FY 23 Forecasted
BudgetFY 21 ActualsParking Fund Revenue
Page 203 of 364
Public Works – Transit Fund
72
Transit Fund
A Year In Review
The Transit Fund (Transit) ended the year with significant variances in both anticipated expenditures and forecasted
revenues, primarily due to modified operations following the peak of the COVID -19 pandemic. The pandemic proved
to have a negative impact on ridership and fare revenue in years past and this trend continued through FY 2021 -22.
Reduced revenues were offset by reduced expenditures in service levels, maintenance, and supplies.
Ridership is a critical component of the on-going health of the Transit Fund. Necessary to secure State Transit
Development Act (TDA) funds is a requirement that 20 percent of the programs’ operating budget be generated
from local revenue – fares, bus passes, and payment for Cal Poly. For FY 2021-22, the fare box percentage was 36%.
During FY 2021-22, the Transit Program experienced a dramatic increase in ridership from the year prior, which is a
major step forward in meeting fare box ratio requirement. The table below outlines ridership levels across the past
four years.
Table 50: Transit Fund Overview
In FY 2021-22, the Transit Program looked to the Federal Urbanized Area Grant Funding program (5307 funds) to
supplement the Transit Fund, paying for 50 percent of the operating costs while the remaining funds were Stat e
transit funds (TDA). The City secured grant funding from the American Rescue Plan Act (ARPA) for 100 percent of
operational costs beginning in FY 2022-23 for three fiscal years, and will address driver wages, allow for the purchase
of additional zero emission buses, and support other capital projects. The reduction in service levels resulted in cost
savings that helped to offset lost revenues. The unused balance of typical annual allocations of Federal 5307 and
TDA Funds have been deferred for future use in FY 2022-23.
The Transit Program continued to provide services to the community as well as Cal Poly students, faculty, and staff.
At the beginning of FY 2021-22, the Transit Program was servicing four (4) routes, to provide basic transit services
to the community, which remained relatively consistent across the year. During the Fiscal Year, Transit staff worked
to modify the operating agreement with Cal Poly (adopted in June of 2022) to continue service delivery for two years
with the understanding to develop a more sustainable agreement structure.
Accomplishments and Strategic Goal Updates.
Although the Transit Fund has faced many challenges in operations and fare revenues over the past few years, the
program has been successful in obtaining funding from various state and federal programs. In FY 2021-22, the Transit
Program successfully secured funding beyond its originally anticipated Federal Transit Administration (FTA) and
Transportation Development Act (TDA) formula-based grant funding. $12.3 million in American Rescue Plan Act
(ARPA) funding from the FTA was secured to support operations for the next three fiscal years. As a result, funding
will be utilized for operational support and allow other funding to be utilized for electric bus purchases. In addition,
Transit secured $285,000 in Low Carbon Transportation Operations Program grant funding that will be used for
infrastructure costs related to the purchase and installation of electric bus charging units.
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Public Works – Transit Fund
73
During FY 2021-22, in coordination with consultants, staff received the completed Transit Program Analysis and
Assessment. Overall, the final report outlined that SLO Transit is delivering a quality program while maintaining fiscal
responsibility and is performing above key indicators in the county. Recommendations from this study included the
annual review of fare structure relative to ridership, an appropriate agreement with Cal Poly, utilizing FTA funds to
the greatest extent, and to work with regional transit stakeholders including SLOCOG an d RTA.
Consistent with the Major City Goal of Climate Action, two electric buses were purchased in FY 2 021-22 and will be
delivered in Winter of 2022. In addition, the City Council authorized a two-year extension of the operating agreement
with First Transit, which include a significant increase in costs tied to driver and operational staff. An important
modification to the operating agreement is intended to attract and retain transit drivers, which is critical in carrying
out services.
Challenges
Throughout the Fiscal Year, staffing and labor shortages have caused the Transit Program to shift to an alternative
and reduced schedule of routes. Although staffing and recruitment is carried out by a contracted service provider
(First Transit), City staff worked in collaboration with First Transit to address staffing shortages while maintaining
adequate service levels. Moving into FY 2022-23, staff is working with First Transit to extend the agreement which
is expected to adjust wages to attract and retain drivers in a tight and competitive job market.
Fuel costs have steadily risen in FY 2021-22, which could serve as an additional impediment to providing adequate
service levels, in addition to staffing challenges. Since the Transit program did not run at full route schedule service,
the Fund did not expend excess funding toward fuel this year . Staff will closely monitor the cost of fuel as it relates
to the level of service provided. Based on current fuel cost trends, it may be necessary to increase the fuel budget
by nearly 50 percent if the program is operating at full -service levels, but with the purchase of new electric vehicles,
this will be offset to some extent. The Transit Program is anticipating challenges in how to restore transit services in
a post pandemic environment considering ridership, cost of service and other factors. Staff will look to the Transit
Innovation Study to address these challenges in future years.
Expenditures
Table 51: Transit Fund Expenditures
The Transit Fund operating costs are typically split equally between state and federal funding sources after deducting
the mandated 20% farebox recovery. The state provides TDA funds based on the adopted budget and federal funds
are based upon actual costs. When the Transit Fun d has savings there will be a reduction in federal funds being
reimbursed which shows as a reduction in revenues.
Salaries and Benefits – The Transit Fund utilized 80 percent of budget related to salaries and benefits. Because the
Transit Manager position was vacant, Transit relied on an annuitant employee who is serving as the Interim Transit
Manager with a maximum of 960 hours per Fiscal Year for program oversight.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing*313,020$ 422,212$ 336,205$ 86,007$ 26%298,896$
Contract Services/ Purchased
Transportation 2,414,328$ 3,442,517$ 2,798,890$ 643,627$ 23%2,895,950$
Other Operating Expenditures 378,834$ 842,308$ 604,155$ 238,153$ 39%684,513$
Transfers 321,727$ 226,183$ 226,183$ -$ 365,544$
TOTAL 3,427,909$ 4,933,220$ 3,965,433$ 967,787$ 20%4,244,903$
* Includes one-time CalPERs downpayment in FY 22
Transit Fund FY 2021-22
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Public Works – Transit Fund
74
Contract Services – There were 19 percent savings in the contract services budget at year-end. The savings were
largely related to reduced purchased transportation cost since the level of service was reduced due to COVID impacts,
driver shortages, and the overall reduction in service level.
Other Operating Expenses – There were about 28 percent savings in the other operating expenses budget. The savings
were largely related to reduced services, reduced fuel consumption, reduced training availability, and a limited need
for materials and supplies.
Transit Revenues35
Table 52: Transit Revenues
In FY 2021-22, the Transit Program looked to the Urbanized Area Grant Funding program (5307 funds) to supplement
the Transit Fund, paying for 50 percent of the operating costs while the remaining funds were state and local transit
funds (TDA). The City secured grant funding from the American Rescue Plan Act (ARPA) for 100 percent of operational
costs beginning in FY 2022-23 for three fiscal years, and will address driver wages, allow for the purchase of additional
zero emission buses, and support other capital projects. The reduction in service levels resulted in cost savings that
helped to offset lost fare revenues. The unused balance of typical annual allocations of Federal 5307 and State Transit
Development Act (TDA) Funds have been deferred for future use in FY 2022-23. The variance in the above table is due
to both State and Federal grant disbursement timing where it is normal for full revenues to be realized in the Fall or
based on receipts of reimbursements.
Table 52-b: Transit Fund City Manager Approved Carryover Budget
Transit Fund: 2021-22 Carryover Budget Amount
Transit - Staffing Assessment $ 10,000
35 Revenues are not fully realized until time of receipt from various Federal and State programs. In years past,
revenues are not captured until January of the following year (January 2023). Although revenue actuals only read
40%, staff are confident that the budget amounts are within reason of anticipated actuals.
Budget Actuals Variance %
Interest Revenue 4,047$ 30,826$ (109,138)$ (139,964)$ -354.0%6,500$
State 351,998$ 2,743,064$ 2,389,841$ (1,395,415)$ 87.1%2,040,941$
Federal 2,805,689$ 4,093,659$ 149$ (4,093,510)$ 0.0%7,248,297$
Local (Bus Fare)328,184$ 687,500$ 710,457$ 22,957$ 103.3%850,000$
Total 3,489,918$ 7,555,049$ 2,991,309$ (5,605,931)$ 40%10,145,738$
Transit Fund Revenue FY 2020-21
Actuals
FY 2021-2022 FY 2022-23
Forecasted
Budget
Page 206 of 364
Special Revenue Funds – TBID & Downtown Association
75
Tourism Business Improvement District (TBID)
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
The TBID had a record-breaking year this fiscal year aiding in the collection of over $10 million in transient occupancy
tax revenue. Several work efforts supported this accomplishment including the development of a new brand
campaign, Say Hello to the SLO Life, that advertised San Luis Obispo and delivered over 30.9 million impressions. In
addition, the TBID launched a new promotion called The Midweekend which rewarded guests for staying 2 or more
nights midweek in San Luis Obispo to help attract visitation when the lodging properties need it most. In alignment
with the Major City Goals, the TBID partnered on a visitor Equity, Diversity, and Inclusion stu dy to inform the marketing
team on insights related to attracting diverse audiences to visit San Luis Obispo. This effort also led to the expansion
of diversity in marketing assets. This year the TBID piloted a new sustainability initiative, Keys For Trees, through which
1% of TBID revenue goes toward planting trees in the community in support of the City’s climate action goal of planting
10,000 trees by 2035 as part of carbon neutrality goal. The TBID also did significant brand development work including
visitor and resident perception studies and investment in a comprehensive brand book, all of which provide a strong
foundation for effective marketing in the future.
Variance Analysis – Revenues & Expenditures
Savings experienced in staffing are a result of a vacancy in the Tourism Coordinator position; savings were accrued
during the recruitment period for the role which spanned the course of three months. The timing of the Tourism
Coordinator position vacancy coincided with the Fall tradeshow season caus ing the travel and conference budgets
to be substantially underutilized for the fiscal year. Additionally, for much of the year Board Meetings continued to
be held virtually contributing to the overall savings in operating expenses.
Table 53: TBID Variance Analysis
Downtown SLO Business Improvement District
The Downtown Business Improvement District (DBID) was established in 1975 as a parking and promotions district for
the downtown area. As a special fee district, fees are collect ed from business license holders operating within a
designated area and revenue supports the operations of Downtown SLO. The City and Downtown SLO (DSLO) agreed
by contract that DSLO would provide various services for the economic, social, cultural, and environmental vitality and
beautification of downtown San Luis Obispo. The assessment is a special revenue and is administered in its separate
and distinct fund. Expenditures will always be equal to forecasted revenues because all of the collected downtown
assessment is remitted to Downtown SLO.
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing 203,149$ 268,258$ 225,734$ 42,524$ 16%219,993$
Contract Services 895,456$ 1,407,345$ 1,264,462$ 142,883$ 10%1,383,565$
Other Operating Expenditures 24,601$ 97,627$ 64,510$ 33,117$ 34%89,100$
Transfers 29,498$ 28,852$ 37,887$ (9,035)$ -31%34,544$
TOTAL 1,152,703$ 1,802,082$ 1,592,593$ 209,489$ 12%1,727,202$
Revenue Actual Budget Actual Variance % Projection
TOTAL 1,381,194$ 1,444,000$ 1,861,536$ 417,536$ 29%1,727,202$
TBID Operating Expenditures FY 2021-22
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Special Revenue Funds – TBID & Downtown Association
76
In additional to the normal activities carried out by DSLO, the organization was active in supporting the economic
recovery of the downtown. This included the expanded holiday and ongoing Mission Plaza activations. Additional
funding ($210,000) was also provided by the City from the General Fund for enhanced programs to promote a clean,
safe, and vibrant environment downtown.
Table 54: DBID Overview
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Pass-through Payments 249,074$ 245,000$ 222,141$ 22,859$ 9%275,000$
TOTAL 249,074$ 245,000$ 222,141$ 22,859$ 9%275,000$
Revenue Actual Budget Actual Variance % Projection
TOTAL 249,824$ 245,000$ 227,202$ (17,798)$ -7%275,000$
Downtown Association FY 2021-22
Page 208 of 364
Insurance Fund
77
Insurance Fund
The City is a member of the California Joint Powers Insurance Authority (CJPIA) which provides general liability and
workers’ compensation insurance coverage and coordinates oversight and management of claims administration. In
2016, the City entered 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 workers’ compensation claims, CJPIA covers the costs from the first dollar. The
consolidation of all insurance-related expenses into one Insurance Fund has made it easier to oversee and manage
them and allow the City to maintain a reserve at the 75% confidence level as required by policy. The Fund also covers
premiums for liability, workers’ compensation, and other ancillary insurances such as property, crime, pollution,
volunteers, and special events.
The number of liability claims filed in FY 2021-22 was below average compared to those in recent years; however,
what is distinctive about FY 2021-22 is there were more complex, higher value claims and the ongoing expenses and
required reserves for investigating and managing them has been higher than in previous years. Such claims have
taken up to three years to resolve and it is difficult to predict which current claims may be settled in favor of the City
and at what point in time. There were 56 non-COVID-19 claims that varied in severity, which is slightly below the
annual average of 60. There were also 11 COVID-19 related workers’ compensation claims this fiscal year.
The Insurance Fund was established to have sufficient funds to withstand fluctuations in claims costs and includes a
reserve of 75% confidence level based on recent actuarial information. The recommended target for the reserve for
FY 2021-22 was $1.5 million. Since the costs for claims and insurance were less than anticipated in some previous
years, the fund balance including the reserve grew to nearly $2 million; however, allocations into the Risk
Management budget to cover the costs of two large settlements in FY 2020-21 and FY 2021-22, as well as insurance
premiums for FY 2022-23 that exceeded budget appropriations , reduced the Insurance Fund to slightly below the
required $1.5 million reserve level; however, not all of the funds allocated were needed to satisfy claims costs in FY
2021-22, and the excess will be returned to the Insurance Fund so it once again meets the minimum balance.
The financial outcomes in FY 2022-23 should be carefully monitored during the fiscal year and when making budget
assumptions for the next Financial Plan. Because there are higher value claims pending, it will be important to make
sure there is a sufficient balance in the Insurance Fund based on current actuarial information, and that the budget
reflects adequate funds to cover claims-related expenses based on the average costs of claims over the previous five
years at a 75% confidence level as required in the City’s 2021 Fund Balance and Reserve Policy.
In early FY 2021-22, CJPIA analysts indicated that member cities may be billed separately for cyber security coverage
due to the increase in cybercrimes and associated expenses that typically have been absorbe d in general liability
coverage. While this change did not take place in FY 2021-22, it may occur in the future. In the upcoming Financial
Plan, costs for cyber security should be identified as early as possible for financial impacts, as well as adequacy of
coverage.
Variance Analysis
As noted, liability claims expenses exceeded appropriated budget due to unanticipated increases in claims costs in FY
2021-22 and insurance increases in FY 2022-23. While the City Council appropriated $150K from the City’s Insurance
Fund unassigned fund balance to cover anticipated claims and related expenses during the FY 2021-22 third quarter
budget review, the entire allocation was not needed, and the unexpended amount will be returned to the Insurance
Fund and will restore the required minimum balance. Costs for workers’ compensation were as expected, and
property insurance increased as a result of updated property valuations and additions to the insurance schedule.
Page 209 of 364
Insurance Fund
78
Table 55: Insurance Fund Variance Analysis
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Worker's Comp Insurance 2,037,611$ 2,181,044$ 2,181,044$ -$ 0%2,844,913$
Liability Insurance 962,461$ 1,717,347$ 1,627,589$ 89,758$ 5%1,677,911$
Other Insurance 361,363$ 434,712$ 449,981$ (15,269)$ -4%515,205$
TOTAL 3,361,435$ 4,333,103$ 4,258,614$ 74,489$ 2%5,038,029$
Insurance Fund Expenditures FY 2021-22
Page 210 of 364
Debt Service Payments
79
Debt Service
Table 56: Debt Service
FY 2021-22
Budget Actual Variance
General Fund
81001-Principal $ 1,453,459 $ 1,453,734 $ 275
81002-Interest $ 760,996 $ 760,792 $ (204)
Water Fund
81001-Principal $ 1,574,854 $ 1,574,854 $ 0
81002-Interest $ 873,992 $ 732,520 $ (141,472)
Sewer Fund
81001-Principal $ 991,973 $ 991,973 $ -
81002-Interest $ 392,496 $ 388,023 $ (4,472)
Parking Fund
81001-Principal $ 514,458 $ 550,486 $ 36,028
81002-Interest $ 341,042 $ 275,732 $ (65,310)
Total $ 6,903,270 $ 6,728,114 $ (175,157)
Page 211 of 364
Major City Goals
80
Major City Goal Updates (FY 2021-22 Tasks Only)
Strategy Task
Original
Completion
Date
Updated
Completion
Date
Comments (if applicable)
1.2 a-5. Evaluate the continuation and/or modification of the
Open SLO program Fitness in the Parks.Completed
Open SLO program continues with Dining in
the Plaza at Mission Plaza. The Fitness in
the Parks program concluded in August 2021
with the lessoning of COVID restrictions for
indoor gyms/wellness businesses.
1.2
a-6. Review transitioning the Business Ambassador
program from a COVID response action to an ongoing
program with an available hotline as well as an online
form option.
Completed Complete
1.4
a-4. Review, evaluate and execute on the outcomes from
the Downtown Future Forum ensuring the required public
participation and Council approval as needed.
Completed
Complete. All initiatives have been
reviewed and the relevant ones are being
managed by the appropriate departments.
1.4 e-9. Mission Plaza Railing Replacement FY22 Q2 Completed Construction was completed in November
2021.
1.4 e-8. Downtown safety enhancements - bollards FY22 Q4 Completed
16 Anti-vehicle barriers have been
purchased for Higuera entrances of the
Farmer's Martket. The barriers are being
wrapped with a decrotive design and will be
placed in service in February of 2022.
1.4 d-9. Assist with the continuation of Open SLO parklets and
courtesy curbside pick up locations FY22 Q2 Completed
Approximately 55 parking spaces are
currently occupied by parklets and limited
time loading zones (courtesy curbside
pickup locations). Council reviewed parklets
at the July 5th meeting. Parking will
continue to monitor and make adjustments
as the program changes and additional
location for parklets and pickup are
identified.
1.5 d. Complete benchmark compensation survey for SLOCEA,
Management, and Confidentials groups.Completed
1.7
b. Regional Transit Authority Analysis: The RTA is currently
building a Regional Transit HUB 800 feet from the City’s
SLO Transit Bus Yard. Much of the infrastructure that
supports SLO Transit is aged and nearing the end of its
lifespan. All transit providers are required to shift the
fleet of transit vehicles to zero emission vehicles.
This funding would support the analysis and review of SLO
Transit’s operations and infrastructure to determine if
there may be benefit to sharing infrastructure, equipment
or centralizing services to provide increased community
services at the same or reduced purchasing requirements,
alternative project delivery methods and other options to
support local businesses and employees. The Community
Services Group will be leading this effort.
FY22 Q4 FY 23 Q1 Complete. Scheduling Council Study
Session for October 2022.
Economic Recovery, Resiliency & Fiscal Sustainability
Page 212 of 364
Major City Goals
81
Strategy Task
Original
Completion
Date
Updated
Completion
Date
Comments (if applicable)
2.1 a. Design DEI Administration, Function, and Operations of Completed
2.1 b. Develop DEI Base Operating Budget Completed
2.1 d. Develop positions; Hire Staff Completed
2.1 e. Hire Diversity position - 1.0 FTE Completed Completed DEI manager was hired in February of 2022.
2.1 c. Identify and secure office space (2000/mo @ 7 mos Y1, FY22 Q2 Completed
2.1 g. Hire CivicSparks Fellow - Y2 - .75 FTE FY22 Q4 Completed A DEI management fellow was hired instead
of a Sparks fellow.
2.2 c. Present comprehensive plan to City Council for
Adoption FY22 Q2 FY23 Q4
Strategic planning process will begin in FY23
Q1 which will result in a comprehensive
plan for council.
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
FY22 Q2 FY23Q4 Metrics will be developed via the strategic
planning process.
2.2
a. Conduct needs, priority, and resource assessments.
Create comprehensive DEI initiatives and programming
for the organization and community.
FY22 Q4 FY23Q4 This will be completed via the strategic
planning process.
2.2
b. Utilize DEI Task Force Recommendations, Internal D&E
Audit as foundation; Cal Poly Experience report and other
documents as reference and for benchmarking
FY22 Q4 Completed
DEI Task Force recommendations were the
backbone of the DEI MCG workplan and
continue to guide implementation of DEI
initiatives.
2.3
g. Review, evaluate and implement findings of SLO County
Child Care Study (First 5’s analysis) of childcare for
working families, as applicable; 22-23 Supplemental Plan
as resources permit.
FY22 Q4 Ongoing
Ongoing project. Waiting for results from
First 5. Study is partially complete.
Partnerships with District, Poly continue.
2.5
d. Review new Police Station building program and
budget for opportunities to reduce costs to preserve
resources for community service investments
FY22 Q2
Facilities Maintenance is working with a
Contractor: Broawder Painting to revitilized
the entrance of the PD Building, new paint
on the font sign, wall and trim, sealed the
wooden bench near the entrance, clean the
concrete floor at the front sidewalk and
steps. This work is schedule to start on
04/08/2022 and the PD personnel has been
notified.
2.7
i. City 101 – first stage, short program, easy
access/commitment. Overview of City, how to access,
ways to be involved. Extensive outreach to
Underrepresented minorities, community-based sessions.
Design, pilot Y1
FY22 Q4 Completed
2.7 k. Develop “Undocu‐Friendly” logo for City documents, as
allowable by law (cost of internal resources)FY22 Q4 FY23 Q4
Working with local undocu organization to
identify best function of a logo and
appropriate City enagament in support for
the undocumented community.
2.7
m. Park major maintenance and repairs specific to Cheng
Park improvements and Mission Plaza railing
improvements.
FY22 Q4 FY 2023 Q2 In Process. Reviewing 90% Plans,
Specifications, and Estimate.
Diversity, Equity, Inclusion
Page 213 of 364
Major City Goals
82
Strategy Task
Original
Completion
Date
Updated
Completion
Date
Comments (if applicable)
3.1 c. Develop Objective Design Standards & Update
Development Review Process (HE 6.22 & 6.23)Completed
Objective Design Standards and
Development Review process has been
updated and complete
3.1 d. Zoning Regulations Update - Housing (HE 5.5, 8.18, 8.23,
2.17 and AB 2345)Completed Zoning Regulations updated
3.11 b. Support a 25% expansion of the number of beds at the
40 Prado Homeless Services Center.Completed Funding provided to non-profit for
expansion of beds at 40 Prado
3.10
a. Pair a crisis worker with an Emergency Medical
Technician (EMT) to provide non-emergency response
and care to unhoused community members.
FY22 Q4 Complete Mobile Crisis Unit began response in Mid-
June 2022.
4.1
a. To ensure consistent maintenance and adequate
oversight of City Open Space lands, add one net new
Ranger Maintenance Worker to maintain level of service
standards following recent Open Space acquisitions. The
City's level of service standard for Open Space is 1 Ranger
per 1,000 acres.
Completed Completed Hired 1 additional Ranger I position
4.1
b. To address Ranger Services staffing, recruitment, and
retention, convert 5 Ranger Specialist positions (currently
limited benefit temporary) to full-time regular permanent
positions.
Completed Completed
Successfully filled Ranger II positions by
elevating one LBT, converted four LBT
positions to Ranger I level
4.2
g. Provide support for community electric mobility work
being led by the SLO Climate Coalition, in support of CAP
Connected Communities task 3.1.
FY22 Q2 FY23 Q3
Caltrans provided SLOCOG and SBCAG a
$200,000 Caltrans grant to complete an
regional electric mobility roadmap. That
work is being completed with input forom
the City. Separately, the City also issued a
RFP for fast charging infrastructure at City
owned parking locations in order to help
catalyze the transition.
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.
FY22 Q2 FY 23 Q4
In coordination with Public Works, a study
session has been scheduled with City
Council in January 2023 so that staff may
gain Council input on key policy decisions.
The master plan will completed quickly
thereafter and brought back to Council for
its consideration of adoption.
4.3
a. Working with the Coastal San Luis Resource
Conservation District, complete existing planning efforts
and pilot program implementation at Johnson Ranch
Open Space and City Farm intended to improve soil
health and remove and store carbon, as called for at CAP
Natural Solutions task 1.1.
FY22 Q4 FY 23 Q2
The planning efforts are complete. The team
expects to apply compost for the first pilot
ahead of the 2022/23 rainy season.
Housing and Homelessness
Climate Action, Open Space and Sustainable Transportation
Page 214 of 364
Major City Goals
83
Strategy Task
Original
Completion
Date
Updated
Completion
Date
Comments (if applicable)
4.3
q. Implement Laguna Lake Dredging and Sediment
Management and Shoreline Stabilizations Projects in
order to begin restoration of the lake for recreation and
habitat improvement purposes
Completed
The capital project that entailed dredging
and dewatering of Laguna Lake was
complete in November 2021, the results will
be closely monitored by staff in the coming
months to determine if the desired
outcomes related to recreation and habitat
improvement materialize. Update
(8/18/22): Laguna Lake 2021 Maintenance
Dredging Project has been compelted. Staff
is working on additional surveys,
continuation of permitting, and beginning
design for the 2023 Maintenance Dredging
Project.
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.
FY22 Q4 FY 23 Q3
The Mobility as a Service study scope was
folded into the Transit Innovation Study,
which is currently being solicited for
vendors through a request for proposals
proces.
4.4 t. Preserve and repair pavement surface within SLO
Transit Bus Yard FY22 Q4 FY 2024 To be completed after EV Charging
Infrastructure.
4.4
h. Construct the Cerro San Luis Neighborhood Greenway
Phases 1B and 2, completing the priority bicycle and
pedestrian route between Foothill Boulevard and
Downtown SLO, including safety lighting and public
artwork at the US 101/Chorro Undercrossing
FY22 Q4 FY 2024
Final Design in progress. On Council Agenda
to advertise for construction July of 2022,
with construction start fall of 2022.
4.5
a. Complete the "Resilient SLO" planning project (Safety
Element Update and associated CEQA) to assess
community vulnerability to the impacts of climate change
and adopt a resilience policy framework in the City's
General Plan, as required by California Senate Bill 379.
FY22 Q4 FY23 Q2
The technical work and outreach
components of Resilient SLO are now
complete. The associated Climate
Adaptation and Safety Element of the
General Plan and related CEQA work are
currently being drafted and the Element is
expected to be presented to Council for
adoption in FY 23 Q2.
4.5
i. Expand Technical Rescue Team roster from 3 to 6
firefighters to improve the City's open space rescue
capabilities and improve self-sufficiency following the first
72 hours of a regional disaster such as earthquake or flood
where resources are often limited.
Completed Complete
The fire department has completed the
expansion of the department's technical
rescue team to 6 members.
4.5
n. Project: Laguna Lake Dredging - rerouting of Prefumo
Creek has increased sediment deposits into the lake. This
is a pilot project to ascertain if dredging is a viable
solution for Laguna Lake and could become a routine
maintenance activity.
Completed
This project was completed in summer 2021
and numerous valuable lessons were
learned about project scale, staging, and
dewatering activities that will inform future
routine maintenance dredging projects.
Climate Action, Open Space and Sustainable Transportation
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Page 216 of 364
R ______
RESOLUTION NO. _____ (2022 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING AMENDMENTS TO THE 2022-23
BUDGET APPROPRIATIONS
WHEREAS, on June 6, 2022, the Council approved and appropriated the 2022-23
Budget Supplement including operating expenditures, debt service, and capital
improvement plan (CIP) budget (R-11332); and
WHEREAS, under the City's Financial Plan policies, operating program
appropriations not spent during the first year may be carried over into the second year for
specific purposes with the approval of the City Manager; and
WHEREAS, under Section 8 of the City's Financial Plan policies, Construction
projects and equipment purchases which cost $25,000 or more will be included in the CIP
and are accounted for in the Capital Outlay Fund ; and
WHEREAS, the 2021-23 Financial Plan included $220,000 for 919 Palm Street
Office modifications to support a growing workforce; and
WHEREAS, under Section 7 of the City's Financial Plan policies, the City will
maintain a reserve for the purpose of offsetting unanticipated fluctuations in general fund
revenues to provide financial stability. The funding target for the Revenue Stabilization
Reserve will be $1,000,000 during the term of the adopted Fiscal Health Response Plan.
Use and allocations of funds of the Revenue Stabilization Fund will be made upon Council
approvals of the Financial Plan or as becomes necessary during any fiscal year; and,
WHEREAS, because the Fiscal Health Response Plan has ended, the current
General Fund forecast does not include a Revenue Stabilization Reserve , yet there
remain many economic uncertainties that could significantly impact the City’s tax revenue
base; and
WHEREAS, General Fund revenue for Fiscal Year 2021-22 exceeded projections
by approximately $6 million; and
WHEREAS, The Local Revenue Measure is a 1.5 percent local sales tax approved
by City voters in November 2020 to help protect and maintain services and public
infrastructure identified by the community such as community safety, creek protection,
addressing homelessness, keeping public areas safe and clean, retaini ng local
businesses, youth/senior services, streets, open space/natural areas and other vital
services and facilities; and
Page 217 of 364
Resolution No. _____ (2022 Series) Page 2
R ______
WHEREAS, based on unaudited financials presented in the 2021-22 Year-End
Budget Report, the Local Revenue Measure Fund has an unassigned fund balance of
approximately $3.8 million.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. The 2022-23 budget is hereby amended to transfer operating budget
for City facility remodels at 919 and 990 Palm Street into the Capital Outlay fund; and
SECTION 2. The 2022-23 budget is hereby amended to appropriate $2,000,000
of one-time over-realized revenue into a Revenue Stabilization Reserve; and
SECTION 3. The 2022-23 budget is hereby amended to appropriate $2,067,846
of unassigned Local Revenue Measure Fund Balance into the operating and capital
budgets as presented in the 2021-22 Year End Budget Report and in Table 1 below:
Table 1: Local Revenue Measure - Allocation of Unassigned Fund Balance
Type 3 Wildland Engine Replacement Additional Funding $ 85,000
Fire Recruit Academy to Address Paramedic Shortage $ 110,000
Accelerate Fire Pumper (Engine 4) Replacement $ 900,000
Public Works - Contract Coordinator $ 65,846
Allocation to Capital Reserve $ 907,000
TOTAL $ 2,067,846
Upon motion of _______________, seconded by _____________, and on the
following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2022.
___________________________
Mayor Erica A. Stewart
ATTEST:
________________________
Teresa Purrington
City Clerk
Page 218 of 364
Resolution No. _____ (2022 Series) Page 3
R ______
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 219 of 364
Page 220 of 364
2023-25 Financial Plan Schedule
There are a variety of possibilities to provide input to the City Council to enable them
to establish Major City Goals with the community’s interest in mind. These
opportunities are highlighted on the following chart and also listed by date at the
bottom of this document.
1. “Setting the Stage” Workshop and the Strategic Scan. A regular Council meeting
on Tuesday, November 15, 2022 will be devoted to a comprehensive review of the
status of current City plans, goals, policies, and programs. This is an especially
appropriate start as the Council goal-setting process should take into consideration the
City’s adopted long-term plans, current two-year goals, and an updated economic
outlook. Accordingly, staff plans to present reports on the following:
a. FY 2022-23 1st Quarter Review Staff will present a brief budget update of the
City's current financial position as compared with the adopted 2022-23
Supplemental Budget.
b. Strategic Scan/Setting the Stage Staff will provide an overview of important
statistical information that provides trends and patterns pertaining to social,
economic, and environmental factors. This will help set the stage for an overview
of the City's core services and how the budget is allocated. This will provide
important context for decision making through the 2023-25 financial planning
process.
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c. Status of Major City Goals This meeting will give an opportunity for staff to give
an update on Major City Goals.
d. Status of General Plan Programs As in past year, will present an overview of the
status of each General Plan program in each of the ten elements (over 400
programs in total). Organized by element, staff will provide a short summary of
each program, whether it has been completed, and if not, a high -level assessment
of how challenging it will be to complete.
2. “Budget Foundation” Workshop. This meeting on Tuesday, January 10, 2023 will
be dedicated to generating policy guidance from Council that will serve as the foundation
for the City’s budget and goal-setting process. Staff plans to cover the following topics
at this workshop:
a. Finalize plans for the Community Forum and Council Goal-Setting Workshop.
Staff will present a proposed approach for the forum and goal-setting workshop at
this meeting.
b. Review of Financial Plan policies contained in the 2021-23 Financial Plan and
update or recommend changes as appropriate. This may include proposed
changes to the existing fund balance targets for enterprise funds and the capital
replacement funds.
c. Review the organization of the Financial Plan and obtain Council guidance
regarding the style of presentation expected or preferred by Council.
d. Review the long-term economic forecast.1
e. Hold initial discussion on the considered options and policy framework for
paying down the unfunded liabilities. Based on Council feedback, staff would
return in February with the plan reflecting these options. Getting guiding principles
direction from the Council in February will be helpful in crafting the recommendations
contained when Strategic Budget Direction is sought in April 2023.
3. Community Forum. The Community Forum is typically an in person public event where
the community can come discuss suggested goals and work programs from Council
advisory bodies, community groups and individuals who completed the online
Community Priorities Survey. Advisory Body goals will be developed during the fall of
2022 and submitted to staff in final form by mid-December 2022. The Community
Priorities Survey will be released in mid-November and open for one month to allow for
ample time for residents to participate and for staff to review results. The survey will be
similar to prior surveys with one minor change that will allow participants the option to
keep current city goals. Staff has researched the use of digital technologies and plan to
use real-time data gathering tools at a community forum in early 2023, with options to
accommodate those who aren’t able or comfortable using the digital tools.
1 The five year forecast will incorporate audited 2021-22 year end results which will be presented to the City
Council on January 17, 2023.
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Other Community Outreach Efforts. Following Council approval of the budget
calendar, staff will mail notices to community groups, governmental agencies, media
organizations and interested individuals inviting them to participate in this process. In
addition to these notices, staff plans to place display ads in The Tribune, SLO Journal,,
and New Times and use social media in order to encourage the broadest possible
participation in this process. Information about the goal-setting and budget process will
also be placed on the City’s web site and City Hall.
Staff also intends to again insert an informational flyer in all utility bills (in English and
Spanish) inviting the public to participate in the online Community Priorities Survey, goal-
setting, and budget process. In the past, this approach has generated hundreds of
replies which were distributed to the Council along with a summary of the “top emerging
themes.”
4. Mid-Year Report and Guiding Principles for Allocation of Resources. The Mid-Year
Review and review of the updated Five-Year Forecast,scheduled for Tuesday,
February 7, 2023, will allow the Council an early opportunity to provide guiding
principles and direction for paying down unfunded liabilities and efficient allocation of
resources with the 2023-25 Financial Plan focusing on community priorities.
5. Council Goal-Setting Workshop. Following the receipt of written and oral comments
during the Community Forum, the Council goal-setting workshop will be held on
Saturday, February 11, 2023 in the Council Chambers. This will be an all-day workshop
to answer the question, “What are the most important, highest priority things for the City
to accomplish over the next two years?” Council will be asked to provide up to five goals
before the workshop which staff will organize and distribute prior to the workshop. Using
an independent facilitator allows all Council members to participate fully in the process;
and allows staff to devote their efforts to listening to the discussion. Moreover, the
facilitator can assist the Council ensuring that the number and scope of the goals
established are appropriate.
6. Major City Goal Work Programs and Strategic Budget Direction. On Tuesday, April
18, 2023, this workshop is a critical part of the budget process. It affords the City
Council an opportunity to review the draft work programs and associated financial
resources proposed to accomplish Major City Goals established by the City Council
in January. At this stage of the process the City Council provides direction on any
changes needed to refine these work programs and resource allocations to better
achieve the desired outcomes. Additionally, the City Council is asked to provide the
City Manager with the key policy direction needed to allocate resources in line with
Council’s expectations or to further amend budget or fiscal policies that align with
Council direction. This process is extremely helpful so that the Preliminary Financial
Plan that is presented to the City Council and community in May mirrors the Council’s
expectations as much as possible.
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At this meeting, staff will prepare detailed work programs for the Major City Goals in order
to:
a. Clearly define and scope the work program.
b. Ensure that there is a clear understanding of the means used in pursuing the goal.
c. Convert the general goal into specific action steps, so progress can be measured.
Each work program will provide the following information:
Objective. What is to be accomplished? (This will be based on the objective adopted
by the Council at the February 11th goal-setting workshop.)
Discussion. What are the factors driving the need for this goal? What actions have
already been taken in trying to resolve this problem area? What are the key
assumptions? What key challenges, constraints or obstacles can be expected in
achieving this goal? What concerns, or issues will remain unresolved even if the goal
is achieved? Who are the key stakeholders?
Action Plan. What specific tasks will need to be accomplished in order to achieve
the goal, and when will they be completed? These “action steps” are the fundamental
building blocks in defining and scoping the work program, and in monitoring the
progress in accomplishing the goal over the next two years.
Responsible Department. Who is accountable for getting it done?
Financial and Staff Resources Required to Achieve the Goal. What will it take to
achieve the goal? Will resources be needed (staffing, contract services, CIP project)
to do this?
Outcome: Final Work Product. What are the “deliverables?”
7. Budget Hearings and Budget Adoption. Budget hearings (also known as “Fund
Reviews” including the City’s four enterprise funds) are currently scheduled for June 6th
2and 20th. This will allow for a third meeting to be added for the approval of the 2023-25
Financial Plan, should the need arise.
Council Advisory Body Participation
Consistent with past Council direction, the advisory bodies will again play an important
role in the goal-setting process by providing the Council with their recommended goals
for 2023-25. Staff will provide advisory body members with background materials outlining
their important role in this process. An update on this process is also scheduled to be
presented at the next quarterly meeting with the Mayor and advisory body chairs in
October 2022. Lastly, staff liaisons are already beginning to work with Advisory Body
Chairs in scheduling time for this purpose at upcoming advisory body meetings.
2 Staff will work towards distributing the 2023-2025 Financial Plan two weeks prior to the June 6th meeting or by
May 23, 2023.
Page 224 of 364
Table 2: Budget Calendar Dates
Item # Date Responsible Action
1 September 15,
2022 Finance Release of goal template and instructions to
advisory body liaisons.
2 October 4, 2022 Council Approve the 2023-25 Financial Plan
Schedule
3 October 20,
2022 Council Quarterly Mayor/Advisory Body Chairs
Meeting
4 November 14,
2022 Finance/Admin Community Priorities Survey Release
5 November 15,
2022 Council
Setting the Stage & the Strategic Scan
workshop on the status of programs, CIP,
MCG
6 December 9,
2022 Finance
Receives written comments from community
groups and interested individuals, and goals
from advisory bodies
7 December 15,
2022 Finance/Admin Community Priorities Survey Closes
8 January 10,
2023 Council
Budget Foundation: Finalizes goal setting
process and plans for public outreach. Review
and provides guidance regarding Financial Plan
Policies. Release prior to holidays
9 January 17,
2023 Council Audit 2021-22 – Annual Comprehensive
Financial Report
10 January 26,
2023 Council/Staff Community Outreach Forum
11 February 7,
2023 Council FY 2022-23 Mid-Year review
12 February 11,
2023 Council Saturday Goal Setting Workshop
13 April 18, 2023 Council
Approves detailed work programs for Major City
Goals. Sets strategic budget direction in
preparation of the Preliminary Financial Plan
14 May 10, 2023 Planning
Commission
Reviews Capital Improvement Plan for
consistency with General Plan
15 May 23, 2023 City Manager Issue finalized budget recommendations and
issues preliminary budget
16 June 6, 2023 Council
Evening workshop to review and discuss
Preliminary Budget including General Fund and
Enterprise Funds programs, CIP projects, and
rates. Adopt budget if no changes are
recommended.
17 June 20, 2023 Council Holds continued Financial Plan Review and
adopts budget and rates (if necessary).
18 June 27, 2023 Council If required, special meeting to continue to
review and adopt budget.
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FY 2021-22 Unaudited Year-end Report and
Review of the 2023-25 Financial Plan Calendar
October 4, 2022
1.Receive and file the FY 2021-22 Year-End Budget
Report and unaudited year-end results; and
2.Adopt a Draft Resolution titled “A Resolution of the
City Council of San Luis Obispo, California,
approving amendments to the 2022-23 Budget
Appropriations.
3.Receive and discuss the 2023-25 Financial Plan
calendar in preparation for the 2023-25 goal-
setting process
Recommendations
FY 2021-22 Timeline 3
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 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
Year One of the 2021-23 Financial Plan
What’s in the year-end report?
✓Major Fund Overviews
✓Departmental Performance Measure and Programmatic Updates
✓Major City Goal Updates
✓A comprehensive CIP update was provided with the 2022-23
Budget Supplement in June
Financial Policy:
Interim Reporting
Financial Policy:
Operating Carryover
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
Operating program appropriations not spent during the first fiscal
year may be carried over for specific purposes into the second fiscal
year with the approval of the City Manager.
FY 2021-22
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 2021-22 (July 1, 2021 –June 30, 2022)
Year-end highlights: General Fund
Expenditures
1.Overall, 8% in net expenditure savings.
a)Salaries & Benefits: Staffing vacancies
b)Contract Services: Trickle down effect from vacancies →less
resources to execute MCG workplan →additional savings in one-
time MCG budgets
2.Overage in utilities due to drought-triggered water usage and increased
electric and gas rates
3.Operating expenditures grew by about 12.4% compared to prior year
a)Passage of Measure G-20
b)A “catch-up” on cost of services
c)Council approved wage and benefit changes for
management employees on April 19, 2022
Year-end highlights: General Fund
•Development Review Fees $1 M below projections:
o Slower pace of development than was realized during the pre-pandemic
peak in FY 2019-20
o Infrastructure Plan Check and Inspection Fees
•Negative $1.7 million Fair Market Value (FMV) adjustment
FY 2021-22
In thousands 2019-20
Actual
2020-21
Actual Budget Actual Variance %
Tax and Franchise Revenue $ 61,858 $ 72,785 $ 89,230 $ 96,334 $ 7,104 8.0%
Fees and Other Revenue $ 14,930 $ 15,897 $ 13,695 $ 12,717 $ (977)-7.1%
TOTAL $ 76,788 $ 88,683 $ 102,925 $ 109,052 $ 6,126 6.0%
Major tax revenue influenced by savings accumulation and pent-up
demand continued with the gradual opening of the economy, the return of
students to in-class sessions, and renewed travel activity.
Unaudited Ending Position
General Fund Ending Position* (UNAUDITED)
1 A. Beginning Balance $ 47,118,071
2 (+) Revenue/ Transfers In $ 126,099,555
3 (-) Expenditures/ Transfers Out $ 132,696,399
4 B. Revenue Over/(under) Expenditures $ (6,596,844)
5 C. Ending Fund Balance (A + B)$ 40,521,227
6 (-) Committed or Assigned $ 32,197,858
7
D. Undesignated Fund Balance $ 8,323,370
8 (-) Approved City Manager Carryover Budget per Council Policies $ 2,857,159
9 (-) Revenue Stabilization Reserve (Recommendation)$ 2,000,000
10 E. Unaudited Year End Fund Balance $ 3,466,211
11 F. Projected Year End Fund Balance (required for balanced budget)$ 2,095,000
12 G. Variance from Forecast (E -F)$ 1,371,211
* Includes Local Revenue Measure and Insurance sub-funds
Local Revenue Measure (LRM)
Unaudited Ending Position
Table 5: Local Revenue Measure Ending Position (UNAUDITED)
1 A. Beginning Balance $ 9,299,971
2 (+) Revenue $ 28,914,503
3 (-) Expenditures (not including encumbrances)$ (32,424,795)
4 B. Revenue Over/(under) Expenditures $ (3,510,292)
5 C. Ending Fund Balance (A + B)$ 5,789,679
6 Assigned to Projects (encumbrances)$ 1,958,912
7 Transfer to Capital Reserve (per supplemental budget)$ 907,000
8 D. Unassigned LRM Fund Balance [C –(Lines 6-7)]$ 2,923,767
9 E. Allocation of Fund Balance (Recommendation)$ 1,160,846
10 F. Unaudited LRM Year End Fund Balance (D-E)$ 1,762,921
As presented in the adopted 2022-23 Budget,$907,000 will be allocated to
the Capital Reserve in order to maintain the 20%policy level.
The 2021-22 LRM year-end financials were reviewed with the Citizens’ Revenue
Enhancement Oversight Commission (REOC) on September 22, 2022
LRM Recommendations
Use of one-time FY 2021-22 LRM unassigned fund balance as recommended
by the Citizens’ Revenue Enhancement Oversight Commission (REOC)*:
Local Revenue Measure -Allocation of Unassigned Fund Balance
Type 3 Wildland Engine Replacement Additional Funding $ 85,000
Fire Recruit Academy to Address Paramedic Shortage $ 110,000
Accelerate Fire Pumper (Engine 4) Replacement $ 900,000
Public Works -Contract Coordinator $ 65,846
Allocation to Capital Reserve $ 907,000
TOTAL $ 2,067,846
* Link to September 22, 2022, REOC Meeting Minutes
•Given record high sales tax remittances in FY 2021-22,staff recommend allocating a
portion of the unassigned year-end balance towards additional requests that are
ready to move forward now and align with the funding intent of the measure.
Other Recommendations
Creation of Capital Project for City Facility
Remodel
▪Current City Facilities are not designed to seat
the number of staff they need to accommodate
▪No fiscal impact
▪Given the order of magnitude, staff recommend
transferring to the Capital Outlay Fund.
▪Capital Budget remains allocated to the project
throughout the life of the project and allows for
better tracking and control of expenditures
pertaining to the overall effort.
Revitalization of Revenue Stabilization
Reserve
▪A stabilization reserve is a mechanism to
insulate the City from large fluctuations in tax
revenue.
▪The City maintained a Revenue Stabilization
Reserve through the Fiscal Health Response
Plan but eliminated it with the 2021-23 Financial
Plan Supplement
▪Given that the one-time over-realization of
2021-22 revenue were from tax resources, staff
recommend assigning some of the funding to
re-establish the reserve
General Fund Program Accomplishments
Programs
➢DEI Manager
➢SB1383 implementation
➢Contract Templates
➢BL&T compliance
➢Citywide Purchasing Policy
➢Mobile Crisis Unit
➢Community Action Team
➢TIPP Fast program
➢P&R Blueprint for the Future
➢Miossi Open Space
Projects
➢Sinsheimer Park Upgrade
➢Broad/Woodbridge Pedestrian
beacon
➢2021 Downtown Pavement
➢Laguna Lake 2021 Dredging
➢Railroad Safety Trail Taft to
Pepper
➢French Park Parking Lot
➢Emerson Fitness Court
➢Storm Drain Culvert Repairs
Year-end highlights: Water & Sewer Funds
•Revenues in both Water and Sewer were higher than anticipated due to higher
irrigation demand associated with a dry winter and development impact fees
coming in higher than anticipated.
•Operations have normalized as the City eases out of the pandemic
•Water consumption increased by 5.6% compared to FY 2020-21.
•Ramp up of water conservation-related work in anticipation of executive order
from the State.
•The energy efficiency upgrades at the Water Treatment Plant have been
completed, and the Water Resource Recovery Facility upgrade is scheduled to
be substantially completed by December 2023.
Challenges: staffing shortages and transitions, post-pandemic normalization,
inflation, supply chain disruptions, and drought-related challenges
Water Fund Summary FY21-22 Amount
a) Revenue **$ 33,235,095
b) Total Expenditures (c+d+e)$ 26,723,126
c) Operating Expenditures $ 19,720,128
d) Capital Expenditures $ 4,695,624
e) Debt $ 2,307,374
Year-End Net Increase return to Working Capital (a-b)$ 6,511,969
Sewer Fund Summary FY21-22 Amount
a) Revenue**$ 69,780,885
b) Total Expenditures (c+d+e)$ 50,504,258
c) Operating Expenditures $ 10,771,456
d) Capital Expenditures $ 38,352,806
e) Debt $ 1,379,996
Year-End Net Increase return to Working Capital (a-b)$ 19,276,627
** Includes Long Term Debt Proceeds received in FY 2021-22
Year-end highlights: Water & Sewer Funds
Year-end highlights: Parking
•Parking program usage began to return to pre-COVID activity levels quicker than
projected and revenue actuals exceeded the revised (downward) projections by
year-end by 13 percent.
•However, continued uncertainty associated with COVID and changes in the
economy have resulted in the program modifying day-to-day operations in
delivering core services.
•Focused on by modernizing a 50-year-old operational system and equipment;
implemented mobile parking applications
•Challenges: staffing, ongoing capital expenses and legacy
project coming,materials cost escalation, supply chain issues, infrastructure
failures, making systemic changes to a 50-year-old system while operating.
Parking Fund Summary FY21-22 Amount
a) Revenue**$5,127,825
b) Total Expenditures (c+d+e)$6,711,890
c) Operating Expenditures $4,086,672
d) Capital Appropriation $1,799,000
e) Debt $826,218
Year-End Net Increase return to Working Capital (a-b)$(1,584,065)
What does the FY 2021-22 Year End mean to the
rate structure and support of the debt financing for
the Cultural Arts District Parking Structure?
Year end highlights: Transit Funds
•Variances in both expenditures and fare revenue due to modified operations, but ridership is
returning to pre-covid levels
•Operational costs were funded by the Urbanized Area Grant Funding program (5307 funds)
and State transit funds (TDA).
•Staff worked to modify the operating agreement with Cal Poly (adopted in June of 2022) to
continue service delivery for two years with the understanding to develop a more sustainable
agreement structure.
•City staff worked in collaboration with First Transit to address staffing shortages and are
working with First Transit to extend the agreement which is expected to adjust wages to
attract and retain drivers in a tight and competitive job market.
•Increased fuel costs in FY 2021-22, but modified operations helped offset the increases
•Underwent a Transit Program Analysis and Assessment
•Purchased two electric buses
Major City Goal Update
38 Major City Goal tasks completed including:
➢Created a DEI Office/Program
➢Implemented Mobile Crisis Unit
➢Updated Housing Zoning Regulations (HE 5.5, 8.18, 8.23, 2.17 and
AB 2345)
➢Implemented Laguna Lake Dredging and Sediment Management
and Shoreline Stabilization Projects
➢Expanded Fire Technical Recruit Team
➢Operationalized the Business Ambassador Program
➢Mission Plaza Railing Replacement
➢Completed benchmark compensation study for SLOCEA,
Management, and Confidential Groups
➢And 168 Ongoing tasks
Community Survey and Forum
Online Community Survey Released: November 14th
Used to inform the City about what the community would
like as Major City Goals
Survey will include the same options as previous years
plus the option to share other ideas or keep the Major City
Goals the same.
Community Forum:January 26, 2023
In-person event at the Ludwick Center
Use the results of the Community Survey to invite the
community to suggest how the City could implement
suggested Major City Goals
Budget Calendar: Important Dates
Key Council Dates
October 4, 2022 Approval of 2023-25 Financial Plan Schedule
November 14, 2022 Release of Community Survey
November 15, 2022 Setting the Stage Workshop & The Strategic Scan
January 10, 2023 Budget Foundation Workshop
January 26, 2023 Community Forum
February 7, 2023 Mid-Year report, updated long-term fiscal forecast and Guiding Principles
for goal setting
February 11, 2023 Council Goal-Setting Workshop
April 18, 2023 Major City Goal Work Programs & Strategic Budget Direction
June 6, 2023 Preliminary Budget Review (and adoption if ready)
June 20, 2023 Financial Plan Review/ Adoption
Key Takeaways
“Continue to stay the course!”
➢Revenue reserve becoming prudent
➢Labor and supply chain shortages continuing
➢Consumer confidence continues to wean
➢Feds signaling continued bold action
➢Development slowing
➢Employee turn-over necessitating onboarding
training prolonging deliverables
More information on November 15th with Setting the Stage and Strategic Scan
New initiatives will require
trade-offs
1.Receive and file the FY 2021-22 Year-End Budget
Report and unaudited year-end results; and
2.Adopt a Draft Resolution titled “A Resolution of the
City Council of San Luis Obispo, California,
approving amendments to the 2022-23 Budget
Appropriations.
3.Receive and discuss the 2023-25 Financial Plan
calendar in preparation for the 2023-25 goal-
setting process
Recommendations