HomeMy WebLinkAboutItem 11 - 4th Quarter Budget ReviewItem 11
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Council- d. Report
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Department Name:
Cost Center:
For Agenda of:
Placement:
Estimated Time:
FROM: Brigitte Elke, Finance Director
Prepared By: Natalie Harnett, Principal Budget Analyst
SUBJECT: 4TH QUARTER BUDGET REVIEW
RECOMMENDATION
Finance
2002
October 20, 2020
Business Item
60 minutes
1. Review FY 2019-20 unaudited year end actuals (Attachment A) and FY 2020-21 fiscal
outlook; and
2. Approve a Resolution (Attachment B) adopting changes to the FY 2020-21 Water and Sewer
budgets; and
3. Approve the goal setting process and timetable for development of the 2021-23 Financial
Plan (Attachment C); and
4. Approve a Resolution (Attachment D) authorizing staff to pursue the Proposition 68 Per
Capita Grant Program, with the California Department of Parks and Recreation Office of
Grants and Local Services; and
5. Authorize the Assistant City Manager to execute the necessary grant documents and
appropriate the grant amount into the Parks and Recreation Department's budget upon grant
award.
DISCUSSION
The City's budget policies' require that City Council review the City's budget and financial
condition through periodic reports. Provided the uncertainty around COVIDI9 during the 2020-
21 Supplemental budget preparation, the October budget review is designed to achieve two
objectives:
1. Update the assessment and status of the City's current revenue assumptions and financial
outlook based on the actual unaudited revenues and expenditures for FY 2019-20
(Attachment A).
2. Inform the beginning stages of the 2021-23 Financial Plan preparation.
1 Pg.20, 2019-20 Financial Plan: Interim Reporting 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 Department
Heads; mid -year budget reviews; and interim annual reports.
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2019-21 Financial Plan and the Fiscal Health Response Plan
The 2019-21 Financial Plan was guided by the second and third (final) year of Fiscal Health
Response Plan (FHRP). The purpose of the FHRP is to establish a fiscal framework to respond to
the long-term impacts of the significant increases in required pension contributions to the
Ca1PERS retirement system over three fiscal years (2018-21). It consists of three components: 1)
new revenues, 2) operating reductions/finding new ways of doing business, and 3) employee
concessions. In addition to the FHRP objectives, the 2019-21 Financial Plan had an ambitious,
visionary, and versatile work program set out with many areas of enhanced service to the
community.
In fiscal year 2018-19 the City was able to accomplish the FHRP goals with an undesignated
fund balance to make additional Ca1PERS payments as the FHRP had envisioned. There were
clear setbacks in 2019-20 due to COVID-19 but fortunately there were realized savings from
additional employee contributions to Ca1PERS and hiring new staff under the PEPRA retirement
plan that limited the impact of the revenue shortfall.
The uncertainty at the onset of the pandemic lead the Council to set aside the undesignated fund
balance (i.e. $6.0 million) and postpone the anticipated one-time payment to Ca1PERS until the
impacts from the "shelter at home" order could be better assessed. The Council through its action
also authorized the City Manager to use the undesignated fund balance for Covid-19 related
expenditures including economic recovery. This action remains in effect. The table below shows
the status of the planned payments to Ca1PERS.
Table 1:
CalPER5 Uownpayrnrnts $4.2 mil- Paid
115 Pension Trust Fund
'F 3018.10 F.W 8 A.-
$41 mil* - I inpaid — in $3.0 mil — payment to
Undesignated Fund Balance he determined
$1.4 mil— In Reserve $2.0 — allocation to he
determined
2019-20 Year End Review/ COVID-19
Despite operating under Emergency Orders associated with the COVID-19 Global Pandemic for
the last quarter of the fiscal year, the City achieved many goals in 2019-20 and was able to
adequately reduce expenditures to match revenue shortfalls across all funds. The activation of the
Fiscal Health Contingency Plan slowed expenditures and achieved significant savings in the
largest budget category — salaries. These savings are largely a direct result from the FHRP's
concessions and the PEPRA pension reform as well as prudent hiring practices applied during
the height of the "shut down" that continue into 2020-21.The 2019-20 year-end report
(attachment A) goes into detail on each department work program and budget results. While still
unaudited, year-end numbers show that the General Fund achieved a balanced budget.
In May 2020, staff reviewed forecasts for fiscal year 2019-20 and predicted expenditures would
exceed revenues by almost $1.4 million. Actual results were more favorable than forecasted with
revenues exceeding expenditures by nearly $1.8 million.
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This was largely due to Sales Tax revenue being less impacted than previously assumed and
Property Tax ending the year stronger than anticipated. Of the $1.8 million, $1.5 million will be
carried over to the next fiscal year to fund specific multi -year initiatives or commitments that
were not accomplished due to timing constraints in accordance with the City's budget policies.
The table below shows the City's unaudited ending position for the General Fund:
Table 2:
Table 2: Year End Variance
Adopted Budget
COVID Forecasts
FY 19-20Actuals
(May 2020)
Total Operating Expenditures
$
(67,612,000)
$
(64,878,000)
$
(65,489,962)
Total Other Expenditures (CIP, Debt, Transfers)
$
(12,365,615)
$
(12,365,615)
$
(12,558,115)
Cost Allocation Plan
$
4,281,000
$
4,281,000
$
4,281,000
Total Expenditures
$
(75,696,615)
$
(72,962,615)
$
(73,767,077)
Total Revenue
$
77,337,000
$
71,588,000
$
75,527,004
Revenue Over/ (Under) Expenditure
$
1,640,385
$
(1,374,615)
$
1,759,927
Carryover to FY20-21
Year End Variance w/ Carryover
$ (1,518,208)
$ 241,719
While the City ended the year with a balanced budget and maintains a healthy fund balance, the
adopted financial plan had a goal of paying a combined total of $7.2 million towards CalPERS
unfunded liability in FY 19-20 and FY 20-21. Those payments were postponed due to economic
uncertainties that continue into the foreseeable future and likely through the end of this current
fiscal year. The intention is that should the remaining amount of the COVID-19 funding set
aside in March 2020 not be used, it will be applied at a future point to pay down the City's
unfunded pension liabilities as originally envisioned.
2020-21 Fiscal Outlook
In proposing the October Review in the Supplemental Budget adoption on June 6, 2020, staff
expected that there would be more refined national, regional and local projections which would
yield more accuracy about the economic outlook. Based on 2019-20 results, the fiscal outlook
seems to have improved from original projections, but there is still not enough data to know what
will happen in the next nine months. The first five months of the pandemic were largely aided by
government stimulus, which is not likely to continue. Staff expects many of the COVID-19
related impacts to lag behind the initial shock of the pandemic. With Cal Poly teaching mostly
online classes and major events being cancelled, the impact on two of the three major income
streams (i.e. sales and transient occupancy tax) remains uncertain. As these tax payments lag,
only two months had been fully collected at the time that this report was released. Staff continues
to track remittances closely through the City's Revenue division.
However, at this time, staff feels confident in its General Fund forecast and appropriated budget
in the adopted 2020-21 Supplemental Budget and there are no indications with the limited data
sets and preliminary forecasts that any immediate budget revisions are warranted. Staff will
continue to monitor revenues and expenditures and evaluate the economic environment and
recommend any needed changes at the mid -year budget review. The Fiscal Health Contingency
Plan remains in full effect with hiring, purchasing, and travel chills.
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Parking Fund
Parking Fund finished FY 2019-20 in a stronger position than anticipated at the onset of the
COVID-19 pandemic, but still in a negative position. The fund ended the year with expenditures
exceeding revenues by about $1.6 million. This variance will be covered by the fund's
unreserved working capital which does have the impact of reducing the available capital to apply
to the Palm/Nipomo Parking Garage. The variance is largely a result of reduced demand
combined with the waiver of parking fees.
The pandemic significantly affected program operations and many fee services were suspended
or reduced. The parking division continues to adjust operations to facilitate social distancing
measures by pursuing new technologies that limit person -to -person interactions.
Parking Services was a key member of the City's Open SLO project and supported the
community by establishing curbside pickup and drop-off spaces throughout the downtown area
enhancing community convenience making food and retail businesses more accessible.
Transit Fund
The Transit Enterprise Fund ended the year with significant variances in both the anticipated
expenditures and forecasted revenues as a direct result of the COVID-19 pandemic. Fortunately,
the availability of CARES Act funds will supplement the Transit Fund, paying for 100% of the
operating costs of the program's services, including PPE procurements, and losses in revenue
between February 1, 2020 and June 30, 2020. Additionally, the reduction in service demand
during the pandemic has resulted in cost savings that help to offset losses in revenues.
Water and Sewer Budget Changes
Revenue Changes: During the FY 2020-21 budget planning process, the impact of COVID-19 on
the Utilities Department was unknown. Staff forecasted significant revenue declines and took
steps to respond to the reductions in water and sewer service charges, such as freezing positions
and utilizing unreserved working capital. In preparation for the October review, the Utilities
Department analyzed FY 2019-20 results, reviewed upcoming operational and capital needs to
re -assess the financial position of both enterprise funds. Based on results, staff recommends
increasing the water revenue forecast to be closer to what was forecasted in the financial plan
and decreasing the sewer revenue to account for the extended Cal Poly closure.
Frozen Positions: To address the unknown economic impacts of COVID 19 to the Water and
Sewer funds, the utilities department froze two positions that were vacant during budget
preparation. With the long-term economic impacts looking less severe than originally projected,
the department recommends unfreezing these positions. As detailed in Attachment B—"Exhibit
A", both positions play an important role in core services. The water distribution team has been
able to take on the increased workload on a short-term basis, but it has proven unsustainable.
With several major housing developments under construction and new required laboratory
activities, workload has increased, and the utilities team needs these positions filled as soon as
possible.
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Rate Increases: the FY 2020-21 supplemental budget was adopted in June 2020, Council
approved a strategy of deferring the scheduled 2020-21 water and sewer rate increases until the
impacts of COVID-19 could be further analyzed. Staff was directed to return to Council with a
rate increase recommendation at the October budget Council meeting. The deferment was meant
to accommodate community members who have been negatively impacted by the COVID-19
related economic downturn. Staff will continue to analyze the need for a rate increase and will
return to Council with a final recommendation in December.
2020-23 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 2021-23 Financial Plan. As in previous
budget processes, staff will provide important information to Council during two meetings in
November and January regarding 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
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
optimize the allocation of financial resources to achieve the desired results." Staff is working on
ensuring this process while adhering to the health and safety guidelines for Covid-19. Below is a
list of proposed key Council meeting dates:
Table 3:
October 20, 2020
Table 3: Key Council Dates
Approval of 2021-23 Financial Plan Schedule
November 17, 2020
Setting the Stage Workshop
January 12, 2021
Budget Foundation
End of January 2021
Community Engagement (format to be determined due to COVID)
February 2, 2021
Mid -Year report, long-term fiscal forecast, and Guiding Principles
February 6, 2021
Council Goal -Setting Workshop
April 20, 2021
Major City Goal Work Programs & Strategic Budget Direction
June 1, 2021
Preliminary Budget Review
June 15, 2021
Financial Plan Review/ Adoption
Proposition 68 Per Capita Grant Program
The California Department of Parks and Recreation (DPR) is providing nearly $200 million for
more than 700 agencies under the Proposition 68 Per Capita Grant Program. This non-
competitive grant program provides funding to local government agencies to support the
rehabilitation, creation, and improvement of local parks and to address deficiencies in
neighborhoods lacking access to outdoor recreation facilities. In 2018, the State of California
invested in the largest grant funding for critically underserved communities with the passage of
Proposition 68: California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor
Access for All Act. Recognizing the need for underserved communities to have equitable access
to outdoor recreation facilities, the bond also provides funds for new parks that will help attract
new and diverse visitors.
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Grant recipients are required to submit project proposals describing how the grant funds will be
spent. The City was allocated $177,952 through the per capita grant program. Per the City's
fiscal policies, these funds need to be accepted by Council and appropriated into the capital
budget to fund Pickleball Court construction at Mitchell Park. In addition, the project proposal
guidelines require a signed Resolution from the governing body of the receiving agency.
This action is separate from the competitive grant opportunity that the City Council will be
considering for the Emerson Neighborhood Park project.
Previous Council or Advisory Body Action
On June 4, 2019, the City adopted a two-year Financial Plan and the budget appropriations for
2019-20. Council adopted the supplemental budget for the 2020-21 fiscal year on June 2, 2020
(Resolution no. 11126).
Policy Context
City Charter Section 804 allows the City Council to amend or supplement the budget by motion
of adopted majority vote of the Council. In this case, the Water and Sewer Funds are requesting
amendments.
In July 2018, the City Council approved two years of water and sewer rate increases. The
adoption of these increases followed the legally required notification and public hearing set forth
by Proposition 218. Proposition 218 allows water and sewer utilities to implement rate increases
up -to the percent increase announced in the legal notification.
Public Engagement
The item will be presented at the City Council's public meeting on October 20, 2020. The public
has the opportunity to comment in writing prior to the meeting or submit public comment prior
or during the meeting.
CONCURRENCE
The Financial Plan Steering Committee concurs with the recommendations included in this
report.
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: 2020-21
Funding Identified: Yes
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Fiscal Analysis:
Funding Sources
Current FY Cost
Annualized
On -going Cost
Total Project
Cost
General Fund
N/A
N/A
N/A
State
Federal
Fees
Other:
Total
N/A
N/A
N/A
As part of the City's Fiscal Sustainability and Responsibility Major City Goal, $10,000 was
allocated for the ongoing staffing expenses involved with implementing quarterly financial
reports. The attached report (Attachment A) provides an overview of the City's unaudited
financial position at June 30, 2020. No general fund, transit, or parking budget changes are
proposed at this time.
Water and Sewer Fund Fiscal Impacts:
Revenue Budgets
Current Budget
Budget Increase
Budget Decrease
New Budget
Water Sales
$20,174,300
$302,000
$20,476,300
Sewer Sales
$15,872,596
$ 400,700
$15,471,896
Total
$36,046,896
$302,000
$(400,700)
$35,948,196
Operating Expenditure
Budgets
Current
ud et
Proposed Budget
Changes
New Budget
Water
$26,757,319
$59,700
$26,817,019
Sewer
$11,374,588
$60,000
$11,434,588
Total
$38,131,907
$119,7001
$38,251,607
The water fund changes outlined in Attachment B — "Exhibit A" equate to a $302,000 increase to
the revenue budget and a $59,700 increase to the staffing budget appropriation. The sewer fund
changes outlined in Attachment B — "Exhibit A" equate to a $400,700 decrease to the revenue
budget and a $60,000 increase to the staffing budget appropriation
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ALTERNATIVES
1. The Council could direct staff not to adopt the Water and Sewer budget changes. Should
the adjustments not be approved, the budget will remain unchanged from the adopted 2020-
21 Supplemental Budget. This is not recommended because these positions play an important
role in the operations of the Utilities Department and they can be adequately funded based on
the updated revenue forecast.
2. The Council could not approve a Resolution authorizing staff to pursue the Proposition 68
Per Capita Grant Program, with the California Department of Parks and Recreation
Office of Grants and Local Services. This is not recommended because this is a non-
competitive grant that would provide much needed funding to the Parks and Recreation
Department for Pickleball Courts at Mitchell Park.
Attachments:
a - COUNCIL READING FILE - FY 2019-20 Year End Report
b - Draft Resolution - Water/Sewer Fund Budget Appropriation Changes
c - Budget Calendar for 21-23 Financial Plan
d - Draft Resolution - Application for Per Capita Grant Funds
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RESOLUTION NO. (2020 SERIES)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING WATER AND SEWER RATE
INCREASES AND APPROVING REVISIONS TO THE ADOPTED 2020-21
WATER AND SEWER FUND BUDGET APPROPRIATIONS
WHEREAS, the City Council adopted the 2019-21 Financial Plan on June 4, 2019 and
appropriated the budget for 2019-20; and
WHEREAS, City staff prepared the 2020-21 budget with appropriate revisions and
adjustments from the adopted budget to address changes in revenue assumptions, work program
needs, and community priorities; and
WHEREAS, Utilities staff froze funding for two full-time equivalent positions in the
2020-21 budget; and
WHEREAS, City staff prepared the 2020-21 budget review to evaluate whether the 2020-
21 revenue budget assumptions are still accurate and to make appropriate corrections; and
WHEREAS, the 2020-21 October Budget revisions are now ready for consideration and
appropriation as set forth in the attached "Exhibit A": and
NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of San Luis
Obispo as follows:
SECTION 1. The City Council approves funding the two frozen full-time equivalent
positions.
SECTION 2. The City Council approves increasing the Water Fund Recycled Water
revenue budget by $302,000.
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Item 11
Resolution No. (2020 Series) Page 2
SECTION 3. The City Council approves decreasing the Sewer Fund Cal Poly Sales
revenue budget by $400,700.
Upon motion of Council Member
, and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this
ATTEST:
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
J. Christine Dietrick
City Attorney
day of
seconded by City Council Member
Mayor Heidi Harmon
2020.
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
I7
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EXHIBIT A
AOctober Budget Revisions to Adopted 2020-21 Supplemental Budget
' Water and Sewer Funds
Recommendations
1. Decrease the Sewer fund Cal Poly revenue budget by $400,700.
2. Increase the Water Fund recycled water revenue budget by $302,000.
3. Unfreeze the Water Quality Laboratory Analyst position.
4. Unfreeze the Water Distribution Operator position.
Summary
During the 2020-21 budget planning process, the City did not know how COVID19 would affect the utilities
department. Staff forecasted significant revenue declines and took steps to respond to the reductions,
such as freezing positions and utilizing unreserved working capital. In preparation for the October review,
the Utilities Department analyzed 2019-20 results, reviewed upcoming operational and capital needs, and
current and future debt obligations to re -assess the financial position of each of the Water and Sewer
funds. Because of the results, staff is forecasting higher revenues and is recommending unfreezing two
essential positions.
Additionally, when the 2020-21 budget was adopted in June, Council approved a strategy of deferring the
scheduled 2020-21 water and sewer rate increases until the impacts of Covid-19 could be further
analyzed. Staff was directed to return to Council with a rate increase recommendation at the October
budget Council meeting. The deferment was meant to accommodate community members who have
been negatively impacted by the Covid-19 related economic downturn. Staff will continue to analyze the
funds and return to Council with a final recommendation in December.
2019-20 Revenue
At the onset of the Covid-19 pandemic, the Utilities Department did not know how business and school
closures and the stay-at-home orders would impact water and sewer sales. Six months into the Covid-19
pandemic, the economic impacts to the water and sewer funds are now better understood, though there
are some remaining unknowns. From March
through September there was decreased water Residential and Landscape
consumption at businesses and schools, resulting in Consumption
a correlated decrease in revenue. However, there Business and Schools
has been a corresponding increase in residential Consumption
and landscaae water consumption and revenue.
Due to both an increase in one area and a decrease in another, the effect of this change in typical usage
patterns still resulted in 2019-20 water and sewer sales revenue ending the year very near to the original
2019-20 budget amounts. 2019-20 water sales revenue was 102% of budget and 2019-20 sewer sales
revenue was 99% of budget.
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EXHIBIT A
2019-20 Budget v. Actual Budget
Water $21,137,107 $21,468,339 $331,232
102%
Sewer $16,612,500 $16,448,856 $(163,644)
99%
2020-21 Revenue
During the 2020-21 Financial Plan Supplement process in June, the Utilities Department maintained a
cautionary strategy related to the impacts of Covid-19 to water and sewer use. At that time, it was
assumed that water consumption would decrease by 6% in 2020-21. For the most part, this decrease has
not materialized. Year-to-date (YTD) water revenue is 125% of what we expected to see by September
and YTD sewer revenue is 103% of expected. However, we are only three months into the year and there
are still many unknowns. Many customers have a higher than normal past due balance because Utilities
has not been shutting off water for non-payment or sending accounts to collections. There is a risk that
some of these past due balances will never be collected. In addition, it is still not clear how many
businesses will permanently close because of the economic downturn. Staff continue to monitor water
consumption and sales revenue and, if necessary, adjustments may be necessary at Mid -Year.
Budget Changes
Cal Poly Sewer Revenue: Due to Cal Poly's transition to virtual learning from COVIDI9, there has been a
clear decrease in revenue is Cal Poly sewer. When the Cal Poly campus closed in March, Cal Poly sewer
flows declined dramatically. This trend has continued with a below average flow when the Fall quarter
started. During the Fall quarter only 13% of classes are in -person and on -campus housing is only at 70%
occupancy. Cal Poly has indicated that the Winter semester will also be mostlyvirtual. Cal Poly sewer flows
are not expected to return to normal until the campus and campus housing fully reopen. Staff is
recommending reducing the 2020-21 Cal Poly sewer revenue budget from $900,700 to $500,000 to reflect
this decrease in campus wastewater flow.
Cal Poly 2020-21 Sewer Revenue Budget
Current $900,700
Recommended
$500,000
Difference
$(400,700)
Recycled Water: In July 2018, the rate for recycled water increased from $6.54 to $9.01 per unit of water
used but the budget was not increased. As a result, since 2018, the actual amount of recycled water
revenue collected has far exceeded budget. The Utilities Department is recommending that the 2020-21
recycled water budget be increased from $595,000 to $897,000 to address this.
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EXHIBIT A
2020-21 Recycled Water Revenue Budget
• 111
Recommended 0 off
1 111
Frozen Positions
Two Utilities Department positions, a Water Distribution Operator, and a Water Quality Lab Analyst, were
frozen as a part of the 2020-21 financial plan supplement. The positions were held vacant to create
operating expenditure savings if the Covid-19 economic downturn had a significant impact to the water
and sewer funds.
Water Distribution Operator: Water fund revenue has not been impacted, as initially anticipated, by the
economic downturn, so it is recommended that the Water Distribution Operator position be "unfrozen".
The Water Distribution section is responsible for maintaining 200 miles of underground water mains,
15,600 water meters and service lines, and various water storage tanks and pump stations. This section is
currently understaffed by two positions due to one water distribution full-time equivalent (FTE) being
utilized at the City's Water Treatment Plant during the Sustainable Solutions Turnkey (SST) Project
construction and another being frozen until the October budget review. The position was frozen to
mitigate the, at the time unknown, impacts of the Covid-19 economic downturn to the water fund.
Concurrently, the Orcutt area developments, San Luis Ranch, and Avila Ranch are all being constructed,
causing a substantial increased workload for the water distribution team. The section is currently reducing
maintenance to infrastructure on a short-term basis to accommodate the staffing vacancy and WTP
project assistance, but this can only be continued on a short-term basis without significant impacts to
operations and possibly service levels. Hiring this position will allow for the section to resume its planned
operations and invest in adequate levels of training for its other three newly hired operators.
Water Quality Laboratory Analyst: Sewer fund revenue has not been impacted as initially anticipated by
the economic downturn, so it is recommended that the Water Quality Laboratory Analyst position be
"unfrozen". The need for an additional analyst position for the Water Quality Laboratory was identified in
a 2019 staffing analysis and will allow complete 7-day coverage of necessary and required laboratory
activities. These activities include the current regulatory and process sampling for water, wastewater, and
the recent additions of sample collection for the Water Treatment Plant, training, accreditation to newly
adopted State laboratory standards and the ongoing support for the stormwater program's creek
sampling and monitoring plan. Other activities include increased laboratory support for development
activities throughout the City, additional sampling and analysis required for the newly upgraded WRRF
along with the anticipated reissuance of the WRRF's State -issued discharge permit and City stormwater
permit. Hiring this position will allow for the section to resume its planned operations.
Overall Fiscal Impact
The net impact of these changes to the water fund is a $302,000 increase to the revenue budget and a
$59,700 increase to the staffing budget.
The net impact of these changes to the sewer fund is a $400,700 decrease to the revenue budget and a
$60,000 increase to the staffing budget.
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EXHIBIT A
Revenue Budgets Current Budget.•Budget Decrease
Water Sales $20,174,300 $302,000
New Budget
$20,476,300
Sewer Sales $15,872,596 $(400,700)
$15,471,896
Total $36,046,896 $302,000 $(400,700)
$35,948,196
Operating Expenditure
Budgets
Current
Budget
Budget
Increase
Budget
Decrease
New Budget
Water
$26,757,319
$59,700
$26,817,019
Sewer
$11,374,588
$60,000
$11,434,588
Total
$38,131,907
$119,700
$38,251,607
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2021-23 Financial Plan Schedule
The Financial Plan schedule outlines the process and dates that provide the foundation for the
preparation of the City's two-year Financial Plan and budget. It includes a variety of
opportunities to provide input to the City Council to enable Council members to establish
Major City Goals with the community's interest and priorities in mind. These opportunities are
highlighted on the following chart and also listed by date at the bottom of this document.
Goal -Setting & the Budget Process
2021-23 Financial Plan
Mn
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COMMUNRY Involvement
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1. "Setting the Stage" A regular meeting on Tuesday, November 17, 2020 will be devoted to a
comprehensive review of the City's current status. 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 fiscal outlook. Accordingly, staff plans to present
reports on the following:
a. FY20-211" Quarter Review Staff will present a brief overview of the City's current financial
position as compared with the adopted 20-21 Supplemental Budget. It is important to critically
evaluate how the City's major tax revenues are tracking during the COVID 19 pandemic. This
review will also include Enterprise Fund update.
b. Major City Goal/META Goal Status Update As part of the 20-21 Supplemental Budget
adoption, Council approved the creation of a new "Meta City Goal". The purpose of this
was to consolidate the ambitious Major City Goal work programs and prioritize tasks that
would also help with the economic recovery from the pandemic. Most major city goal tasks
were scheduled to continue in some capacity. This meeting will provide an opportunity for
staff to give an update on the meta -goal actions.
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Item 11
c. Strategic Scan/Setting the Stage Staff will provide a brief overview of important statistical
information 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 21-23 financial planning
process.
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.
e. Pension Update
2. "Budget Foundation" Workshop. This regular meeting on Tuesday, January 12, 2021 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. Due to
COVID 19 there may be format limitations.
b. Review of Financial Plan policies contained in the 2019-21 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 long-term economic forecast
d. Review the current and long-term capital improvement plan.
e. Hold initial discussion on the considered options 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
2020.
3. Community Forum. The Community Forum is typically a public event where the community
can come solicit and discuss suggested goals and work programs from Council advisory bodies,
community groups and interested individuals. Advisory Body goals will be developed during the
fall of 2020 and submitted to staff in final form by mid December 2020. Due to COVIDI9
uncertainties and social distancing requirements, a traditional "forum" may not be viable, but
other options will be explored and presented at the Budget Foundation in January 2021.
Packet Page 118
Item 11
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, SLO City News, 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 a Community Budget Bulletin in all utility bills inviting the public
to participate in the goal -setting and budget process and soliciting comments on the "three to five
most important things for the City to do in the next two years." 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 Five -Year Forecast scheduled for Tuesday, February 2, 2021, 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 2021-23 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
6, 2021 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. As in the past, staff recommends the use of a professional
facilitator to assist in prioritizing input into three categories, Major City Goals, Other Council
Objectives, and Address as Resources Permit. 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 20,
2021, 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.
Packet Page 119
Item 11
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 to accomplish? (This will be based on the objective adopted by the
Council at the February 6th 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 two consecutive meeting
days in June. This will allow for a special meeting to be added for the approval of the 2021-23
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 2021-23. Staff
has provided advisory body members with background materials outlining their important role in
this process. Additionally, staff liaisons are already beginning to work with Advisory Body Chairs
in scheduling time for this purpose at upcoming advisory body meetings.
Packet Page 120
Item 11
Budget Calendar Important Dates:
Item #
Date
Responsible
Action
I
September 15, 2020
Finance
Release of goal template and instructions to
advisory body liaisons.
2
October 20, 2020
Council
Approved 2021-23 Financial Plan Schedule
3
October 23, 2020
Finance
Community Survey Release
4
October 28, 2020
Council
Quarterly Mayor / Advisory Body Chairs
Meeting
5
November 17, 2020
Council
Setting the Stage workshop on the status of
programs, CIP, current Major City Goals
Receives written comments from community
6
December 15, 2020
Finance
groups and interested individuals, and goals from
advisory bodies
Budget Foundation: Finalizes goal setting process
7
January 12, 2021
Council
and plans for public outreach. Review and provides
guidance regarding Financial and Budget policies.
Council Agenda Report release in December.
8
January 19, 2021
Council
Audit 2019-20 - Comprehensive Annual
Financial Report review and acceptance
9
End of January 2021
Community Outreach Forum — Format TBD
10
February 2, 2021
Council
2020-21 Mid -Year review
11
February 6, 2021
Council
Saturday Goal Setting Workshop — all day
Approves detailed work programs for 2021-23
12
April 20, 2021
Council
Major City Goals Sets strategic budget direction
for preparation of the Preliminary Financial Plan
13
May 13, 2021
City Manager
Finalized budget recommendations and issues
preliminary two-year financial plan
14
May 12, 2021
Planning
Reviews Capital Improvement Plan for consistency
Commission
with General Plan
Evening workshops during regular Council
15
June 1, 2021
Council
meeting to review and discuss Preliminary Budget
including General Fund and Enterprise Funds
programs, CIP projects, and rates
Continued Financial Plan Review and adoption
16
June 15, 2021
Council
of the Financial Plan and 2021-22 budget and
service rates
17
June 22, 2021
Council
If required, special meeting to continue to review
and adopt Financial Plan.
Packet Page 121
Item 11
RESOLUTION NO. (2020 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING THE APPLICATION FOR PER
CAPITA GRANT FUNDS
WHEREAS, the State Department of Parks and Recreation has been delegated the
responsibility by the Legislature of the State of California for the administration of the Per Capita
Grant Program, setting up necessary procedures governing the application; and
WHEREAS, said procedures established by the State Department of Parks and Recreation
require the Applicant to certify by resolution the approval of the project application before
submission of said application to the State; and
WHEREAS, the grantee will enter into a contract with the State of California to complete
project;
NOW, THEREFORE, BE IT RESOLVED that the Council of the City of San Luis
Obispo hereby:
SECTION 1. Approves the filing of project application for per capita program grant
project; and
SECTION 2. Certifies that said grantee has or will have available, prior to
commencement of project work utilizing Per Capita funding, the sufficient funds to complete the
project; and
SECTION 3. Certifies that the grantee has or will have sufficient funds to operate and
maintain the project, and
SECTION 4. Certifies that all projects proposed will be consistent with the park and
recreation element of the City's general or recreation plan (PRC §80063(a)), and
SECTION 5. Certifies that these funds will be used to supplement, not supplant, local
revenues in existence as of June 5, 2018 (PRC §80062(d)), and
SECTION 6. Certifies that it will comply with the provisions of Section1771.5 of the
California Labor Code, and
SECTION 7. (PRC §80001(b)(8)(A-G)) Considers, to the extent practicable, as identified
in the "Presidential Memorandum --Promoting Diversity and Inclusion in Our National Parks,
National Forests, and Other Public Lands and Waters," dated January 12, 2017, a range of actions
that include, but are not limited to, the following:
Packet Page 122
Item 11
Resolution No. (2020 Series) Page 2
A. Conducting active outreach to diverse populations, particularly minority, low income,
and disabled populations and tribal communities, to increase awareness within those
communities and the public generally about specific programs and opportunities.
B. Mentoring new environmental, outdoor recreation, and conservation leaders to increase
diverse representation across these areas.
C. Creating new partnerships with state, local, tribal, private, and nonprofit organizations
to expand access for diverse populations.
D. Identifying and implementing improvements to existing programs to increase visitation
and access by diverse populations, particularly minority, low-income, and disabled
populations and tribal communities.
E. Expanding the use of multilingual and culturally appropriate materials in public
communications and educational strategies, including through social media strategies,
as appropriate, that target diverse populations.
F. Developing or expanding coordinated efforts to promote youth engagement and
empowerment, including fostering new partnerships with diversity -serving and youth -
serving organizations, urban areas, and programs.
G. Identifying possible staff liaisons to diverse populations.
SECTION 8. Agrees that to the extent practicable, the project will provide workforce
education and training, contractor, and job opportunities for disadvantaged communities (PRC
§80001(b)(5)).
SECTION 9. Certifies that the grantee shall not reduce the amount of funding otherwise
available to be spent on parks or other projects eligible for funds under this division in its
jurisdiction. A one-time allocation of other funding that has been expended for parks or other
projects, but which is not available on an ongoing basis, shall not be considered when calculating
a recipient's annual expenditures. (PRC §80062(d)).
SECTION 10. Certifies that the grantee has reviewed, understands, and agrees to the
General Provisions contained in the contract shown in the Procedural Guide; and
SECTION 11. Delegates the authority to the Assistant City Manager, or designee to
conduct all negotiations, sign and submit all documents, including, but not limited to applications,
agreements, amendments, and payment requests, which may be necessary for the completion of
the grant scope(s); and
Packet Page 123
Item 11
Resolution No. (2020 Series) Page 3
SECTION 12. Agrees to comply with all applicable federal, state and local laws,
ordinances, rules, regulations and guidelines.
Upon motion of Council Member seconded by Council Member
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this day of
Mayor Heidi Harmon
ATTEST:
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
J. Christine Dietrick
City Attorney
2020.
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
Packet Page 124
Orel no . ' Mfm Me's a knfaTirwak
.i VIA
CITY 4F SqR LUIS OBISPO 1
L�Ig 04
Recommendations
1. Review FY 2019-20 unaudited year end actuals (Attachment A) and FY 2020-
21 fiscal outlook
2. Approve a Resolution (Attachment B) adopting changes to the FY 2020-21
Water and Sewer budgets
3. Approve the goal setting process and timetable for development of the 2021-23
Financial Plan (Attachment C)
4. Approve a Resolution (Attachment D) authorizing staff to pursue the
Proposition 68 Per Capita Grant Program, with the California Department of
Parks and Recreation Office of Grants and Local Services; and
5. Authorize the Assistant City Manager to execute the necessary grant
documents and appropriate the grant amount into the Parks and Recreation
Department's budget upon grant award.
6. Approve the appropriation of $20,000 from unassigned FY 18-19 fund balance
to fund the necessary work to accomplish the needed specific plan
amendments to the Airport Area and Margarita Area Specific Plans
From October Revise to Review
Prepare
• With uncertainty about the
health emergency,
potential budget
adjustments needed early
in fiscal year.
Review
HN15
Monitor
no
• Status: tracking in line
with forecasts
• Hold budget as is
• Many accomplishments in
economic recovery
• Possible economic shifts
• Volatility, uncertainty with
winter season,
unemployment, consumer
confidence, GDP
Slide 3
HN14 we could eliminate the bullet points to simplify this
Harnett, Natalie, 10/16/2020
HN15 [@Johnson, Derek] What do you think of this?
Harnett, Natalie, 10/19/2020
Steady Economic Growth "hit a wall" in
March 2020
nnianing Himilpq fnr I nral GnvPrnmPntr,
How the City Responded (financially)
March 2020
1. Activated Fiscal Health
Contingency Plan(hiring &
purchasing chill)
2. Retained 18-19 General Fund
Balance and postponed one-time
budget allocations, including
CalPERS $4.2 million payment*
June 2020
1. Re -assessed the long-term
forecast
2. Presented a balanced FY20-21
Supplemental Budget by reducing
expenditures and re -budgeting CIP
The City's Strategy: Monitor and Stay Disciplined and Nimble
October 2020
For now,
hold General
Fund budget as
adopted.
Minor changes to
Water/Sewer
Review revenues and expenditures on a quarterly basis with Council and make
budget adjustments as needed to address additional shortfalls or more favorable
conditions.
*As adopted in the Fiscal Health Response Plan
Important Part of the Story
2019-20 Year -End Actuals
Table 2: Year End Variance
Adopted Budget
COVID Forecasts
FY 19-20Actuals
(May 2020)
Total Operating Expenditures
$
(67,612,000)
$
(64,878,000)
$
(65,489,962)
Total Other Expenditures (CIP, Debt, Transfers)
$
(12,365,615)
$
(12,365,615)
$
(12,558,115)
Cost Allocation Plan
$
4,281,000
$
4,281,000
$
4,281,000
Total Expenditures
$
(75,696,615)
$
(72,962,615)
$
(73,767,077)
Total Revenue
$
77,337,000
$
71,588,000
$
75,527,004
Revenue Over/ (Under) Expenditure
$
1,640,385
$
(1,374,615)
$
1,759,927
Carryover to FY20-21 $ (1,518,208)
Year End Variance $ 241,719
0
The Current Picture
The upside
• 19-20 revenues performed better than expected (this is true across the State)
• Realized significant savings from negotiated additional contributions to CalPERS 116
and hiring new staff under the PEPRA retirement Plan —a direct outcome of the
FHRP and pension reform.
The downside
• Still too many unknowns: availability of a vaccination, elections, additional API
stimulus, financial market stability, tourism & event industry, consumer
confidence
• Universities remaining mainly virtual
• Business closures, online shopping
• Re -opening fluctuations
• Budget balancing solutions not sustainable
The financial gap is not getting wider at this time, but
an extended economic downturn could put the City in
a negative position requiring further action.
��.. s•._
. OFF
- -
3Y
Budget Guided by the FHRP
2018-19 Results: Revenue goals met, except for Cannabis revenues
2019-20 Results: Realized savings from employees paying more towards
retirement, additional contributions to CalPERS and hiring new staff under the
PEPRA retirement plan. CalPERS down payment not paid.
$6.0 million Retain for anticipated revenue
One-time money in undesignated shortfalls and economic recovery.
fund balance as of June 2019. Re -visit in October 2020
CaIPERS Downpayments
115 Pension Trust Fund
•Fmm 2018-19 F1md Balance
$4.2 mil - Paid $4.2 mil* - Unpaid — in
Undesignated Fund Balance
S1.4 mil — In Reserve
$3.0 mil — payment to
he determined,
$2.0 — allocation to be
determined
Based on unaudited
financials, FY 19-20
revenues exceeded
expenditures by only
$242k; therefore
this goal will not be
met
The Long-term Picture
COVID19 Impact on General Fund Forecast*
LM
CC
U1 �
C
$ .0 m SSA iu 56.0 Fn 54.6 iia S2.6 m
$57, OW
$f340M
2018 2019 2020 2021 2022 2023 2024 2025
(Actual) (,Actual) (,Actual)
Expenditures — — — Or igina l Revenue Projection — COVI D19 Revised Project ion
* Expenditure projections (2021-2025) are based on the 19-21 Financial Plan long term forecast.
Long term expenditure reductions will be necessary during the 21-23 financial planning process in
order to match revenue shortfalls and create a balanced budget
2020-21: How did we balance the shortfall?
(General Fund)
Sales Tax $3.41 m
Transient Occupancy Tax $1.87 m
Other Taxes $2.0
Fees for Service $1.31 m
TOTAL $8.62
Balanced Budget — —
Original Budget
$78.89
Staffing
Insurance Expenses
CIP
Other
TOTAL
Original Budget
Revenues Expenditures
Budget Changes due to COVID19 (in millions)
$2.96 m
$1.06 m
$1.76 m
$0.07 m
$5.85
Original
Budget
assumed $3
million surplus
for CalPER5
2020-21: Budget -in -Brief: General Fund
GENERAL FUND EXPENDITURES
Contract
Services
7%
Staffing
71%
Debt
4%
Other
Operating
Expenses
10%
GENERAL FUND REVENUE
Fees for Service
18%
Tax &
Franchise
Revenue
82%
Re -cap: 20-21 Expenditures by Fund
Expenditures Combined - By Fund
19 Cinancial PI
General Fund
Business Activities
Water Fund
Sewer Fund
Parking Fund
Transit Fund
Revenue
Tourism Assesssment
Downtown Association
74,006
75,697
75,412
69,566
(5,846)
-8%
22,735
37,998
32,069
34,215
2,146
7%
18,372
77,098
57,243
57,983
740
1%
6, 057
5,572
34,002
4,758
(29, 244)
-86%
3,562
4,099
4,164
3,670
(494)
-12%
1,577
1,565
1,585
1,251
(334)
-21%
205
260
260
253
(7)
-3%
* Includes Debt Service in FY19-20 and FY20-2I. The Parking Fund dE{-- . u�uc
budget.
Re -cap: 20-21 Revenues by Category
Total Funding Sources - All Funds Combined
Iw 19-2.L . -*„I v
Tax & Franchise Revenue
60,956
62,856
65,097
57,782
(7,315)
-11%
Service Charges
WeW=12,479eWee
eW
=-9%0
General Fund
13,024
14,480
13,787
(1,308)
Water Service Charges
25,133
24,886
23,549
21,391
(2,158)
-9%
Sewer Service Charges
19,873
17,479
18,518
16,896
(1,622)
-9%
Parking Service Charges
5,347
5,343
6,045
2,798
(3,247)
-54%
Transit Revenue
3,806
4,116
4,188
4,808
620
15%
Assessment Revenue
1,892
1,866
1,886
1,507
(379)
-20%
Proceeds from Debt Financing
Water Fund
5,500
_8,_800_
_8,8_00_ W
-
00/0
Sewer Fund����WW�WWWWW�WWWWW�WWWWWW�����64,311W
............... ........................... ............................... .......................... ....................
..-... ... ... ... ... .................................................
..--.-...............................
43,100 ..... .......................................
43,100 ... -
-��
...................6........................................
D'��
Parking Fund
20,000
(20,000}
-IM/O
Update: Water and Sewer Funds
00o Response to COVID: freeze positions, defer approved rate increase, monitor
consumption
C� Utilize unreserved working capital if needed
Long-term concerns due to COVID: University consumption, consequences of rate
deferral, bond ratings, delinquent accounts, infrastructure needs.
COVID-19 Impact on Consumption
Residential and Landscape
Consumption
Business and Schools
Consumption
Rate Increase
July 2020
Re -visit in
December
20-21 Water/Sewer Budget Changes
R
on
Recommendation: Why'
• Important roles in core services and City goals
Unfreeze two positions Support State laboratory standards
• Current distribution of workload is unsustainable
Long term COVID impacts projected to be less severe
Fiscal Impact: $119,700
Parking Fund: 20-21 Revenue Shortfalls
$7,050
$6,050
$5,050
$4,050
$3,050
$2,050
$1,050
$50
Original Budget
$6,042
2020-21 Parking Revenues
(thousands)
Deferred Rate Increase -$727
Reduced Enforcement -$334
Waived Metered Parking
Reduced Structure Usage -$772
Other Shortfalls -$357
TOTAL-$3,292
4 months of
pandemic
environment
Perspective-
2019-20 Budget Shortfall:
-$1.67 million
Transit
• Significant decrease in ridership
CARES
The Coronavirus Aid, Relief, and Economic Security Act
00
• Cha d��ons —urs, Cal Poly service i istance
MMr
r
nding through CARES act will fully offset revenue shortfalls ana
erational costs for FY 20 and FY 21
Revenues
Expenditures
Working Capital
Unreserved Working Capital
$4,188
$4,164
JL $2,829
$1,945
$4,182
$3,670
$3,489
$2,225
-$6
-$494
$660
$280
Retirement Incentive Update
>> Purpose: Replace retirees with employees at
lower salary and retirement tiers
>> Status: Results drew fewer applicants than
anticipated, but still significant savings
Cost of program
One-time savings
Ongoing Savings (year one — 6 months)
Net savings in year one:
12 utilized incentive to date
$150,000
$183,000
$92,000
$125,000
Fiscal Outlook as of October 2020
ii
• More favorable tax and franchise revenue will hopefully offset losses in
fee programs due to extended closures
• Updated County property tax forecasts show continued growth in FY21
• Tourism and hospitality remain a top concern
• Responsibility to paydown unfunded liability remains on the forefront
• Continued deferral of CIP projects
• Updated forecast to be presented to Council at mid -year
How has the City supported the local
economy?
„o
k
3
rA
% ; r�
'ram
dab
Economic stability, recovery and
resiliency is the number one goal for
the City of San Luis Obis^r,
Business Ambassador HoUlne {805)783-7835 slocity.0rutcovid18
Funding for Childcare Amendments
Council Agenda Correspondence — 10.19.20
0
n
o-
o M
0
0
Allocate $20,000 to updating zoning regulations to rT
o.
allow for childcare centers in Airport Area
m,
• Based on the needed scope of land use changes
to expand childcare opportunities and the -
public benefits realized to the entire
community
21
City of San Luis Obispo
Zoning Map
Prop 68 Per Capita Grant Program
• The California Department of Parks and Recreation (DPR)
is providing nearly $200 million for more than 700 agencies
under the Proposition 68 Per Capita Grant Program.
• Non-competitive
• Signed Resolution required
City of SLO allocation:
$177,952
2020-23 Financial Plan Schedule
2021-23 Financial Plan
Community
COMMUNITY L21
«7) Involvement
SURVEYS (format TRO due
ro Covro)
ADVISORY
BODIES
LETTERS FROM
COMMUNITY
ORCUPS '
GOAL -SETTING
INPUT
CURRENT 1
2-YEAR
OOALS*
LETTERS FROM FISCAL
IRDIViDUALS FORECAST'
Ci
LONG -TER
GOALS & POLICIES
RNANCIAL PLANNING
In
Recommendations
1. Review FY 2019-20 unaudited year end actuals (Attachment A) and FY 2020-
21 fiscal outlook
2. Approve a Resolution (Attachment B) adopting changes to the FY 2020-21
Water and Sewer budgets
3. Approve the goal setting process and timetable for development of the 2021-23
Financial Plan (Attachment C)
4. Approve a Resolution (Attachment D) authorizing staff to pursue the
Proposition 68 Per Capita Grant Program, with the California Department of
Parks and Recreation Office of Grants and Local Services; and
5. Authorize the Assistant City Manager to execute the necessary grant
documents and appropriate the grant amount into the Parks and Recreation
Department's budget upon grant award.
6. Approve the appropriation of $20,000 from unassigned FY 18-19 fund balance
to fund the necessary work to accomplish the needed specific
plan amendments to the Airport Area and Margarita Area Specific Plans