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HomeMy WebLinkAbout06/11/1996, 1 - CONSIDERATION OF AND ACTION UPON OPEN SPACE FINANCING TASK FORCE REPORT AND RECOMMENDATIONS M` council �° "i - 9� j acEnaa aEpoat " C I T Y OF S AN L U IS O B I S P O FROM: John Dunn, City Administrative Officer Ken Hampian, Assistant City Administrative /Of,(fi�cer��— Prepared By: Neil Havlik, Natural Resources Manager SUBJECT: CONSIDERATION OF AND ACTION UPON OPEN SPACE FINANCING TASK FORCE REPORT AND RECOMMENDATIONS CAO RECOMMENDATION Direct staff to move forward with preparation of an advisory ballot measure for City residents regarding support for a community-wide assessment district to fund up to $1.5 annually for open space acquisition and park capital improvement projects as recommended by the Open Space Financing Task Force. DISCUSSION Overview Since their appointment by the City Council in January 1996, members of the Open Space Financing Task Force have worked diligently to research open space funding possibilities and prepare recommendations for Council consideration. At the time of Task Force members' appointments, the Council placed several specific charges upon the Task Force: (1) developing a broad funding base, (2) ensuring that said funding base is capable of meeting revenue requirements of the program, as determined by the Task Force, (3) being easily understood by the citizens, (4) providing the City with a funding source independent of outside agencies, and (5) being able to be implemented in a timely manner. The Task Force looked at a wide variety of funding options and possibilities. After researching the pros and cons of these sources, the Task Force ultimately settled on two main possibilities. These were (1) a City-wide assessment district, and (2) a combination of assessment district, utility tax increase, and transient occupancy tax (TOT) increase. These were presented at a public forum sponsored by the Task Force on April 29, 1996, and considerable feedback was received from the public on the matter. The Task Force considered this input, and prepared the accompanying final report and recommendations for Council consideration, recommending the creation of an assessment district capable of generating approximately $1.5 million per year. Such a district would necessitate an assessment of approximately $6.60 per month for single- family residences, $4.90 per month for multi-family residences including mobile homes, and $2.30 per month per 1,000 square feet of space for commercial, office, and industrial space. Council Agenda Repoit - Open Space Financing Task Force Report Page 2 Task Force members had many discussions regarding their charge and how best to implement them. Major points of discussion were held regarding issues such as (1) vote versus no vote, (2) majority versus supermajority, (3) pay-as-you-go versus borrowing up front, (4) whether to include park expenditures or not, and (5) what is a reasonable amount to be raised. Task Force members worked hard to develop consensus on all of these issues. For example, recognizing that an assessment district can be established by the Council, without any vote at all, the Task Force recommended having an advisory vote. Attempting to demonstrate fiscal responsibility in an open space program, the Task Force recommended a pay-as-you-go approach, with a full review after five years. Finally, the Task Force also recommended that up to 25% of the funds raised be allocated to parkland acquisition or capital improvement projects. The result of this consensus-building effort is the comprehensive final report of the Task Force, which is attached. The members have integrated the funding proposal into the other open space protection activities of the City with the goal of supporting those other activities or providing funding where such activities will not be successful. (Those activities include dedications associated with the granting of development entitlements, outright gifts, etc.) Potential Impact of the Richt to Vote Initiative This initiative, which would amend the State Constitution, has qualified for the November ballot. If adopted, it will have profound effects upon local government, particularly upon the rules governing assessment districts. Among the most critical of the are that (1)assessment districts by definition would be special,possibly meaning that any assessments would require a two-thirds affirmative vote to be effective; and (2) the method of voting would be by mail, with those ballots being returned constituting the vote. Staff is still researching the full implications of this measure upon the City's ability to undertake this or any other assessment district in the future. In the meantime, it is still considered appropriate to ask the electorate if it is willing to tax or assess itself in order to pursue the goal of permanent open space conservation. FISCAL IMPACT The annual revenue to be generated through the assessment district and the estimated impact on residents are fully detailed in the attached Task Force report. As currently envisioned by the Task Force and recommended to the City Council, the assessment proposal would not involve major impact to the City's General Fund. The Task Force has recommended that assessment district funds not be used to fund general staff costs, plans or studies, or the like; it was the Task Force's opinion that these items should be covered by the General Fund. Consequently, successful establishment of a long-term open space financing program would commit some level of General Fund monies toward staff support and certain other costs. These are unknown, but are not expected to be significantly beyond existing resources. A larger fiscal impact on the General Fund could be expected if the Council were to formally allocate some portion of future General Fund revenues to the open space program. This is /-2 Council Agenda Report - Open Space Financing Task Force Report Page 3 discussed further below under alternatives. ALTERNATIVES Due to the importance of the Task Force's work, the potential influence of the Right to Vote Initiative and Council member concerns over the issue of a special tax assessment, staff has researched several funding alternatives for comparison purposes by the Council, outlined below: 1. Bond issuance. One Task Force member was strongly in favor of this approach. This was on the basis that a bond measure was more straightforward than the assessment, and, if successful, would generate a large block of funding immediately. The argument was that the community would be supportive of this methodology by the sheer visionary scale that it represented. This struck a responsive chord with some Task Force and staff members, but the general concern was that obtaining the majority or supermajority necessary for success might simply prove impossible in the current political climate. It was also felt that, despite Task Force members' feeling of the program's value, there might be a large segment of the community that would be skeptical, and that a conservative initial approach would be more appropriate to the community. 2. Use of a broader funding base. Despite the general belief that the assessment district approach is reasonably broad, some Task Force members felt that it is not broad enough, and that it is questionable whether assessment costs could be passed on from landlord to tenant. This accounts for the attractiveness of the utility tax. It would undoubtedly be felt by everyone: landlords, tenants, students, and businesses. Thus the use of a utility tax increment (perhaps including a TOT increment as well) would include virtually every taxpayer in the City plus visitors who are attracted to the area partly by its scenic character. However, this approach was not recommended for three key reasons: revenues from these sources cannot be committed for a specific purpose without a supermajority; it was viewed as an overly complex approach; and while not as broad as these other two sources, there was consensus that the "assessment district only" approach still constituted a very broad funding base. 3. Use of existing General Fund monies. This concept also had some support among Task Force members. It was generally recognized that staff costs would constitute general fund support. However, there was some sentiment to go beyond this, although no specific figures were mentioned. This approach was intended to support the assessment district; however, to supplant the assessment district and allocate $141.5 million annually from the General Fund, in staffs view, is not possible without curtailing other necessary City services. 4. Creation of an assessment district without a vote. Under current State law, assessment districts can be created directly by City Councils and Boards of Supervisors without any vote at all. Given the fact that the Task Force recommendation includes review of the program after five years, and in light of the fact that staff has been approached by landowners in the greenbelt area who could clearly utilize three to four times the amount of money currently available, it has been suggested that the Council could create an assessment district on a temporary basis to pursue identified willing landowner acquisitions and demonstrate the program, and having an advisory vote on a permanent program at some future time. This would enable the City to complete a /-3 Council Agenda Report- Open Space Financing Task Force Report Page 4 number of key projects that could demonstrate the value and importance of the program. It is important to remember, however, that such a course of action was considered by the Task Force and an advisory vote was considered integral to the success of the program. 5. Defer action to a special election beyond November. The Task Force felt that a Citywide program might serve as a model, or as an inspiration, for a countywide open space program, funded perhaps with a sales tax increase. To that end, there was some discussion of delaying a vote on a Citywide effort, possibly with an accompanying effort to craft a countywide program with the assistance of other cities and the County itself. This remains an alternative, not only in terms of exploring a countywide effort, but also in view of the possibility of a generic antitax vote brought about by the appearance of the "Right to Vote" Initiative on the State ballot. However, the date to which such a vote would be deferred is a question, and such deferral may lead to the loss of momentum gained by the current effort. One advantage of some delay would be the increased opportunity for a community campaign explaining and promoting the benefits of the proposed assessment district. After careful consideration, it was the Task Force's conclusion that retention of the current momentum outweighed the added campaign time that would be possible with some delay. Furthermore, it was believed that a countywide effort would be more successful if there was a model clearly demonstrating the benefits of such a program. CONCLUSION The Task Force's recommendations were not easily arrived at, nor were they achieved without any disagreement. However, Task Force members worked hard to develop consensus on all of the issues they faced . Everyone recognized that taxation is not popular, regardless of the purpose, and that perhaps as the most recent tax proposal, this request may be the focus of much antitax sentiment. Nevertheless, one thing was very clear. All of the Task Force members -- as well as the disparate constituencies they represented -- felt that parks and open space were important contributors to the community's quality of life and, despite the generic criticism that could and probably would be leveled at the proposal, seeking to raise funds to preserve open space was the right thing to do. Staff supported the work of the Task Force, and lauds the Task Force members for their dedication and perseverance in this daunting endeavor. Staff feels that the present time remains the most appropriate in which to proceed with the effort to preserve quality of life for our citizens. The Council is urged to weigh carefully the opinions of the Task Force membership, and trust to the vision of those citizens to do what is best for the community. If it is determined to go forward, it is staffs understanding that the absolute last day to place an item on the ballot - - and this means ballot language, arguments, and everything -- is August . Taking action now will allow greater flexibility in preparing ballot language. If, on the other hand, it is the Council's decision to undertake further research into alternatives, there will still be a short window of opportunity in which this research effort can be done. �,y Council Agenda Report Open Space Financing Task Foce Repoit Page 5 Enclosures: Open Space Financing Task Force Final.'Report Technical appendix containing the minutes of Task Force meetings, all correspondence received by the Task Force,, and reports. prepared for the Task Force by the staff and background materials on the community forum held on April' 29, 1996. hAcouncil.rpt - - : �...AlAr- T � s. ~ �-� � mod' R+•aiw. y ►:mar i , T 4t� ar City of San Luis Obispo OPEN SPACE FINANCING TASK FORCE FINAL REPORT SAN LUIS OBISPO - A SPECIAL PLACE Why Protecting Open Space is an Important Community Goal San Luis Obispo's Mission was established in 1772, the fifth mission in the chain of 21 missions established by the Spanish Franciscan fathers. While San Luis Obispo grew very slowly in the nineteenth century, the coming of the Southern Pacific Railroad in 1894 opened up the area to the rest of California. The City's historical isolation from the major metropolitan areas to the north and south have allowed our area to retain its pastoral and natural image. This identity is a strong contribution to the quality of life for our residents, and acts as a strong attraction to visitors from other areas. In order for us to retain our quality of life, the greenspace and open areas -- and a strong visitor economy -- it is necessary that the City government and our citizens become stewards for preserving the best of what is left. Development pressures, a continuation of the trend for the past 30 years, will continue into the future. Now is the time to plan and act if the unique beauty of our area is to be saved for the enjoyment of future generations. SUMMARY OF RECOMMENDATIONS Following an extensive five -month period of analysis, the following is a summary of key recommendations by the Open Space Financing Task Force in funding open space preservation: ■ First and foremost, it is important to stress that the purchase of open space is only one component of a much more comprehensive open space protection program. Given limited fiscal resources, there are a number of other strategies discussed further in this report that must also be used in preserving open space. In short, direct purchase of open space should only be used when all other alternatives are unlikely to achieve the City's open space protection goals. ■ The open space financing program should initially be funded on a "pay-as-you-go" basis at an annual level of $1.5 million. This will result in a monthly cost for a single-family homeowner of about $6.50. ■ The funding program should be submitted for voter consideration as an advisory measure on the November 1996 ballot. ■ This program should be funded through a city-wide assessment district. After consideration of a wide range of funding alternatives, it was the overwhelming consensus of the Task Force that this is the best overall approach in balancing the goals of being straightforward, clear, broad -based, within the City's ability to control, and dedicated to a specific purpose with majority voter approval. -I- Open Space Financing Task Force - Final Report ■ While the focus of this funding program should be on open space, up to 25% of the new revenues may be used for parkland acquisition or development, with the specific exclusion of golf courses. ■ An oversight committee composed of interested community members should be formed to monitor on an on -going basis the fiscal status of this funding program, its progress in achieving open space goals, and the specific use of these funds. ■ While the recommended program will be subject to annual review as part of the assessment -setting process, a comprehensive evaluation of the program in meeting open space protection goals should be performed after five years. This evaluation should be performed by a community -based task force similar to the one the Council created to draft this initial program. BACKGROUND Purpose of the Task Force The Open Space Financing Task Force was created by the City Council on November 7, 1995, in order to develop recommendations for the City Council's consideration on the best strategy for long-term funding of open space purchases. Creation of the task force was preceded by a number of key planning steps in preserving the City's open spaces. The most important of these was the adoption of the Open Space Element of the General Plan by the Council in January of 1994. The Open Space Element was crafted over a four-year period of extensive community review and discussion. The resulting open space plan sets forth a clear vision of what types of open space areas we should protect and why we should protect them. It also identifies a number of strategies for achieving this vision, among them is the purchase of open space when other approaches will not be successful. Now that the City's open space objectives have been set, it is time to focus our efforts on specific implementation tasks. As noted above, one of these key implementation tasks has been assigned to the task force: developing a long-term funding program for consideration by the Council. Task Force Goals The Council specifically charged the task force with the following goals in preparing recommendations for a long-term open space funding program: ■ Broad funding base. Ensure that the recommended funding program is a broad -based one, so that no one sector of the community is singled out in funding this program. ■ Revenue requirements. Identify the amount of new revenue that should be generated annually for this purpose and ensure that the proposed funding program is reasonably capable of generating this amount. -2- Open Space Financing Task Force - Final Report ■ Clear, simple program. Place a higher priority on those funding sources that can be most clearly communicated to the public and easily administered by the City. In short, a simple funding program is preferable to a complicated one. ■ Fiscal independence. Focus on funding sources that are within the City's existing authority to implement without approval by other governmental agencies. This goal recognizes that the funding program must be "do -able", and this means that the City must be able to independently control its future to the maximum extent possible. ■ Timely. Complete work by the end of May so that any proposed strategy that requires voter approval (or where an advisory vote would be desirable) can be acted upon by the Council by June in order to meet deadlines for placement on the November 1996 ballot. Task Force Review Process Beginning in February of 1996, the task force met virtually every week in arriving at the findings and recommendations presented in this report. Over this period of time, the task force has intensively reviewed and considered a number of background materials and issues, including: ■ Open space element of the General Plan. ■ Comprehensive report on open space financing options prepared by Economics Research Associates (ERA) in 1993 as part of the open space element preparation process. ■ Results of the previous open space financing forum held in July of 1994. ■ Analyses of the other key strategies available to the City in protecting open space other than purchase of land or easements. ■ Status of the City's current open space protection efforts and existing funds available to purchase open space. ■ Findings of the report recently prepared by the SLO Land Conservancy on Saving Special Places which identifies high priority candidate properties for purchase based on their unique resource features and property owner interest. ■ Analyses of what other agencies have done to fund open space protection. ■ Comprehensive discussion of the protection strategies and funding options available to the City in preserving open space. This extensive review process resulted in the issuance of a preliminary task force report in April of 1996 that set forth a number of key assumptions, principles and initial recommendations. The purpose of issuing this preliminary report was two -fold: (1) to provide the community with an initial overview of the results of the task force's efforts to date and (2) to provide the task force with an opportunity to receive comments and feedback from the community before finalizing our recommendations to the Council. Comments were actively solicited in a number of ways. Individual task force members met with the various groups that they represented regarding findings of the preliminary report, and the report itself was mailed to over 100 interested groups and individuals. Press releases were issued, radio appearances were made by task force members, and feature articles were run in - 3.- Open Space Financing Task Force - Final Report several local newspapers. In addition, the task force held a widely -advertised community forum on our preliminary findings on the evening of Monday, April 29. The results of this forum are discussed in greater detail below. KEY ASSUMPTIONS AND PRINCIPLES The following summarizes the key assumptions and principles adopted by the task force which form the foundation for the specific recommendations set forth in this report: ■ Limited role of purchase in preserving open space. It is important to emphasize the limited role that direct purchase of properties can and should play in achieving the City's open space preservation goals. There are a broad range of other strategies as set forth in the City's open space element and the ERA study that must be used as well in protecting open space, including donations, conservation easements, resource protection ordinances, dedications through the development review process, cluster zoning, and transfers of development credits. In short, given the City's limited fiscal resources, purchase of open space -- whether an easement or in fee -- should only be used as a preservation strategy when other alternatives are unlikely to achieve the City's open space protection goals. ■ Opportunities for the use of funds. Because there are a number of strategies for preserving open space besides direct purchase of land, it is important to make the most effective use of limited funds. While clearly articulated policies are necessary in determining when purchase is appropriate over other open space preservation strategies (and these are set forth in the City's open space element), a specific listing of all the City's property purchase priorities is not necessary before implementing a funding program, nor perhaps even desirable in terms of assisting the City in conducting purchase negotiations with property owners. In these initial stages, the City is best served by using its limited funds in making strategic purchases based on the opportunities that will present themselves over time due to property owner interest and other circumstances. In short, the City should not wait to prepare a formal list of specifically identified propertics for purchase before implementing a funding program. ■ Conservation easements versus 'Yee title" Even in those cases where acquisition may be our best preservation strategy, outright purchase of properties (fee title) may not be necessary to achieve the City's protection goals. For example, in those cases where open space is currently in agricultural use, and retaining its agricultural use is desired, this may be achieved more cost-effectively by acquiring a "conservation easement" rather than purchase of the property itself. In such a case, use of the land under a conservation easement will be restricted in perpetuity solely to agricultural uses, and at a lower cost than if the property is purchased in "fee". In combination with the "non -financial" strategies discussed above, this approach will help the City achieve open space goals in the most cost-effective manner. In summary, whenever appropriate, purchases should be focused on conservation easements, leaving land in private ownership and farming; fee title ownership should be -4- Open Space Financing Task Force - Final Report reserved for areas with important natural resources or where public access is desired. ■ Annual amount to be raised With over 33,000 acres identified in the City's greenbelt, it is clear that even the most aggressive of funding programs would not be successful in protecting all open space areas through acquisition alone. In balancing the magnitude of the potential costs of acquisition with the use of other protection strategies, the task force believes that the funding program should raise between $1.0 millon and $2.0 million annually. Accordingly, the task force is recommending a funding program at the mid- point of this range: $1.5 million annually. ■ Initial pay-as-you-go program. There may be a role for the use of debt financing in the future as the program demonstrates its value to the community or opportunities arise that require more capital than can be generated in a short period of time from this funding program. However, the initial protection program should be funded on a "pay-as-you-go" basis. ■ Annual review. The financial status of the program, progress in achieving open space goals, and the need to continue the supplemental revenues implemented under this program should be reviewed by the Council annually. ■ Oversight committee. To assist the Council with this review, an oversight committee composed of interested community members should be established for this purpose. One of this committee's key responsibilities should be issuing a formal report annually to the Council and the community on the status of the program in achieving open space goals and the use of the funds generated under this funding program. ■ Working closely with non profit community -based groups. The City should continue to form partnerships and work closely with non-profit, community -based groups like the Land Conservancy of San Luis Obispo County in implementing open space protection programs. ■ Use of the funds. The primary focus of this funding program should be on protecting open spaces. However, the task force recommends that up to 25% of the new funds be allocated for parkland acquisition and development. Use of this funding for golf course acquisition and development should not be allowed. Further, only "hard costs" should be funded through this program; studies, plans and staffing costs should be excluded. ■ Maintenance of open space. After acquiring open space properties, it is important that the City be good stewards of the land, and care for the properties appropriately. Accordingly, over time, the funding program needs to set aside reasonable funds for the maintenance of the open space areas that will become the City's responsibility. It is important to stress that any funding for maintenance under this program should be restricted solely for open space; this funding program should not be used in maintaining developed park areas. -5- Open Space Financing Task Force - Final Report ■ County -wide approach needed in the long-term. The task force strongly believes that in the long-term, a county -wide approach will be necessary in preserving open space and that a sales tax measure would be the best way of funding this program. To this end, the City should take the initiative and begin working with the County and other cities on this approach. However, it will take time and significant efforts to bring this kind of program about on a county -wide basis. In the interim, one of the best strategies available to us is to implement an effective local program that can serve as a model for a broader, county -wide program. At such time that a serious county -wide proposal is before us, the City should be very supportive of this concept and be prepared to discontinue the local funding sources committed to this program in support of a county -wide sales tax for this purpose. Until this happens, however, the City should exercise its own initiative in funding open space. In short, while a more regional approach is desirable, it is probably not attainable in the near term; this is an area where the City will have to take a leadership role - and lead by example - if it wants to begin achieving its open space goals. ■ Ballot measure. The task force recommends that any new revenue sources for open space protection be placed on the ballot for voter consideration as an advisory measure. Additionally, because assessments will be paid by property owners, not all of whom are residents of the City, appropriate notice should be provided to property owners about the upcoming advisory measure. ■ Majority voter approval. The task force supports revenue sources that can be approved by majority voter approval or by the City Council. We are not supportive of revenue measures that require a super -majority (such as two-thirds voter approval that would be required for general obligation bonds or for tax increases formally restricted for special purposes). This would allow a very narrow segment of the population (less than 34% of the voters) to prevent a very large portion of the population (potentially up to 66%) from achieving agreed upon, high -priority community goals. ■ Broad funding base; clear simple program. In meeting the Council's goals in these areas, the task force has strived to present specific funding options that are broadly-based in their impact on the community and can be clearly communicated to the public. ■ Dedicated use. The task force believes that it will be much easier to generate community support for new revenue sources for open space if these new sources can be dedicated solely to this purpose. However, with the exception of the assessment district option as discussed below, none of the leading candidates can be formally earmarked without two- thirds voter approval. As discussed above, the task force is not supportive of new revenue sources that require this extraordinary level of approval. This leads to a dilemma in balancing these conflicting goals of majority voter approval, dedicated use of funds, and establishing as broad a funding base as possible. For these reasons, the task force initially narrowed the alternatives to two core options: -6- Open Space Financing Task Force - Final Report one which is a little less broadly-based but can be dedicated to a specific use and still implemented by majority voter approval; and another that is broader -based and can be approved by majority voter approval, but cannot be formally earmarked for this purpose. This second option asks the voters to trust that present and future Councils will be faithful to the underlying reasons behind why these new revenue sources were approved, without a formal legal requirement to do so. ■ Special accounting for funds. A separate, distinct fund should be established for this program in order to ensure full accountability for the use of these funds. In accordance with the City's existing financial policies, interest earnings on any cash balances should be credited to this fund. ■ Comprehensive program review after S years. While the recommended program will be subject to annual review as part of the assessment -setting process, a comprehensive evaluation of the program in meeting open space protection goals should be performed after five years. This evaluation should be performed by a community -based task force similar to the one the Council created to draft this initial program. ■ Continuing General Fund support. Even with this new funding program, the General Fund should continue to support open space acquisition and protection efforts at some level. This may be in the form of staff support or contracts with community -based groups in managing this program. ■ Right to vote act initiative. As the task force neared completion of its review of open space protection financing options and preparation of its final report to the Council, the "Right to Vote on Taxes Act Initiative" qualified for the November ballot. If this initiative is adopted by the voters, the current legal framework under which the task force reached its findings and recommendations would be significantly altered. In responding to this new development, the task force recommends that the Council strive to draft the ballot measure in such a manner that if this initiative passes, the new revenue sources would remain legally valid. If this is not possible, then the task force recommends that an advisory ballot measure continue to go forward as the best strategy available to us in ultimately establishing a funding source for open space preservation, whether or not the initiative is adopted. FUNDING OPTIONS The task force considered many possible funding options and combinations. However, in meeting the three key goals of being broad -based, under the City's control, and not subject to denial by a narrow segment of the community, only the following four funding sources emerged as leading candidates, which could be used in combination with each other: -7- Open Space Financing Task Force - Final Report ■ Assessment district ■ Transient occupancy tax ■ Utility users tax ■ Property transfer tax After extensive discussion, the task force eliminated the property transfer tax as one of our options, due primarily to the narrow focus of such a tax. Thus, in preparing our preliminary report, we narrowed our consideration to the following two basic options, which are further detailed in Exhibit A: Assessment District Only Advantages. This option could be implemented by the Council or majority voter approval, and could raise the annual target funding level recommended by the task force of between $1.0 to $2.0 million. It could also be dedicated for a specific purpose without two-thirds voter approval. There are many ways that the assessments can be allocated, and this is one of the strengths of this funding source: the ability of the Council to "tailor-make" the assessment spread to meet specific concerns while crafting a very simple, clear program to communicate in terms of its costs and impacts on residential and non-residential property owners. Disadvantages. Drawbacks to this option include its focus on property owners only and that assessment amounts would be fixed regardless of the value of the property or the income of the property owner. These concerns are partially offset by the fact that although it would only be applicable to property owners, this is still a very broad group of taxpayers and that the amounts to be paid are relatively modest, which helps to offset equity concerns with flat assessments. Additionally, while this approach only directly affects property owners, indirectly some of these costs will be passed on to renters and business tenants. Assumptions. As detailed in Exhibit A.l, this option is presented at the $1.0 million, $1.5 million, and $2.0 million levels, and is based on the following assumptions. (As noted above, these can be easily modified; they have been selected for illustrative purposes only.) ■ Assessments are allocated to developed properties only: 85% to residential and 15% to non-residential (commercial, office, industrial). ■ Of the portion allocated to residential, multi -family residential (MFR) rates are set at 75% of the rate for single-family residences (SFR). This is based on the population per household differences between SFR and MFR units based on the 1990 census. ■ The portion distributed to non-residential properties is allocated based on square footage. Combination of Sources This option implements a combination of three funding sources: assessment district, transient occupancy tax (TOT) and utility users tax. - 8 - Open Space Financing Task Force - Final Report Advantages. This provides a very broad funding base by directly affecting property owners, residents, businesses, renters and visitors, and could raise the annual funding target recommended by the task force of between $1.0 to $2.0 million. Since the portions paid from TOT and utility users tax would not be fixed but would vary based on utility usage or hotel occupancy, this option better addresses equity concerns than the "assessment district only" option. Disadvantages. Because it combines a number of sources, it may become more difficult to communicate this program to voters, especially since the impacts of the utility users tax can vary significantly from user to user. Additionally, 50% of the revenues from this option cannot be formally earmarked for specific purposes by the Council or by majority voter approval (although it would certainly be our policy intent to do so). This might also make it more difficult to communicate this option to the public and to gain their support. This concern may be ameliorated by the creation of an oversight committee as recommended above which will report annually on the use of these funds. Assumptions. As detailed in Exhibit A.2, this option is presented at the $1.0 million, $1.5 million, and $2.0 million levels and is based on the following assumptions (the assessment district component is based on the same assumptions presented above). Overall Funding Mix Percent Assessment district 50.0% Transient occupancy tax 12.5% Utility users tax 37.5% Impact of Options on the Typical Homeowner The following summarizes the cost impacts of the two options on a "typical" single family homeowner on a monthly basis as detailed in Exhibits A.1 and A.2: Range of Annual Revenues Estimated Monthlv Cost: Assessment District Estimated Monthly Cost: Combination of Sources $1.0 million $4.37 $3.54 $1.5 million 6.56 5.31 $2.0 million 8.74 7.08 RESULTS OF THE COMMUNITY FORUM As discussed previously, one of the key ways that the task force received community feedback on our preliminary report was through the public forum held on April 29. - 9 - Open Space Financing Task Force - Final Report This forum was very well -attended: there were over 65 participants at the forum, excluding task force members, Council members and City staff. Presentations were made by task force members at the forum on the background leading to the creation of the task force, the mission assigned to the task force by the Council, an overview of what other communities have done in preserving open space, the issues and options considered by the task force, and our preliminary findings and recommendations. These presentations were followed by a lively "question and answer" period. At the conclusion of the forum, participants were asked to complete a short survey on their preferences in funding open space protection, and the results of this survey are provided in Exhibit C. This was not a "scientific survey", and as such, it cannot be relied upon to necessarily reflect the opinion of a majority of residents. Nonetheless, we believe that the results are instructive, and many are reflected in this final report. For example, of the 56 survey respondents: ■ 61 % would vote for an increase in taxes to support an open space protection program. ■ Of those supportive of such a program, 62% would support a program that raises $1.5 million annually or more. ■ In answering the question "how much would you be willing to pay monthly for this program?", 54% of the 48 respondents to this question said "at least $5 to $10 per month." ■ The "assessment district only" option received the most support from those expressing an opinion, with 55% supporting this approach. RECOMMENDED FUNDING APPROACH After evaluating the "pros and cons" of each of these two funding options, the task force reached almost unanimous consensus that the "assessment district only" option is the best approach in balancing the goals of being straightforward, clear, broad -based, within the City's ability to control, and dedicated to a specific purpose with majority voter approval. At the $1.5 million annual funding level recommended by the task force, this will result in a monthly cost for single-family homeowners of about $6.50. This amount is consistent with the results of the community forum. CONCLUSION The task force believes that it has fully accomplished the work requested of us. Within the guidelines set by the Council, each of the key funding issues raised by the Council has been addressed by the task force in this report. Nonetheless, a number of details remain to be finalized before these recommendations can be implemented, such as the actual wording of the ballot measure and final determination of assessment allocations between various types of users. However, within the overall policy framework reflected in our recommendations, we believe that -10- Open Space Financing Task Force - Preliminary Findings these are administrative and legal issues best left to the Council and staff. Lastly, we recognize that our recommendations are advisory in nature, and that ultimately it is up to the Council to approve a funding program for open space protection that it believes will best serve the community, now and in the future. We hope that these recommendations will provide the Council with a sound foundation upon which to base its decision -making on this very important issue. EXHIBITS A. Summary of the two "finalist candidate" options considered by the task force 1. Assessment district only 2. Combination of sources B. Matrix of advantages and disadvantages of the leading funding candidates C. Survey results from the community forum held on April 29, 1996 D. Task force members TECHNICAL APPENDIX A detailed technical appendix is available upon request which provides additional information about the process used by the task force in arriving at the findings and recommendations set forth in this report. The appendix includes: minutes from each task force meeting; written correspondence received by task force and Council members; materials prepared for task force members during their review of financing options; and further information about the community forum held on April 29. 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W � ~ 'q w 0 q >, '...•A:Q •''Y `• :>:,� \� .Q p � 8 qq > ,� �• � � y V q ,p AI q p ':> ,o+. \ O � U b U �7 '^ 'O C � ta r V r V 6i j4 •^ g S 0 U• '^ �' p U U » � pp, �l L, '�v��\ -0 � Po y �+ � U q � y i� � yy •p w " � ^ r V� � r y >t � y a y ti U q •q I">:�i>^ U �.�:�>:�:;. : q � �� b U Po U U p U q, 0 Q U V ►. �^ � -0 C U � 4 -0 C ti � ti ` -0 y r U R 6i p #,•' iL 0i+• U ,� •U. 6i O ,p .O .�,0 i;::-;;> :•+•^ y -0 -0 •O '^ ;6r q "' q : .rye 4 -0 3i` y� :�::� '� N M of h �O l^ 00 O� O .� N M a:•,••.?,>';:`.; N M h �O I^ 00 O� O .� N M ,O 0 OPEN SPACE FINANCING TASK FORCE MEMBERS Exhibit D The Open Space Financing Task Force was created by the Council on November 7, 1995. Nominations for membership on the task force were solicited at that time from a broad range of environmental, business, neighborhood, and other community groups, with the goal of appointing members who would represent a wide spectrum of viewpoints. On January 23, 1996, the Council appointed the following 15 task force members (the group that nominated the member is noted in italics): ■ Lauren Brown, San Luis Obispo Association of Manufacturers and Distributors ■ Bill Coy, San Luis Obispo Chamber of Commerce ■ Joe Delucia, Downtown Business Improvement Association ■ Gary Felsman, Sierra Club ■ Carol Florence, San Luis Obispo Property Owners Association ■ Charlie Fruit, Building Industry Association of the Central Coast ■ Alan McVay, Central Coast Salmon Enhancement ■ Penny Rappa - Task Force Chair, League of Women Voters ■ Paul Ready, City of San Luis Obispo Planning Commission ■ Amy Shore, ECOSLO ■ David Smith, Land Conservancy of San Luis Obispo County ■ Sally Stoner, City of San Luis Obispo Parks & Recreation Commission ■ Marty Tangeman, Chorro Street Neighborhood Group ■ Pat Veesart, Sierra Club ■ Dan Williamson, Cal Poly City of San Luis Obispo — Open Space Financing Task Force COMMUNITY FORUM SURVEY RESULTS Exhibit C At the conclusion of the community forum on open space financing held on April 29, 1996, participants were asked to complete a short survey. The following summarizes the results from the 56 surveys that were completed: 0 Would you support an increase in taxes to support an open space protection program for San Luis Obispo'? Responses Percent 1 Yes 34. 61 % No 22 j 39% Total 561 100% © Would you be more or less willing to vote for an increase for open space protection if 25 % of the increase was set aside for the acquisition and/or development of parks? Responses I Percent More willing 151 31 % , Less willing 33 69% Total 48 100%? © Please indicate below the total annual revenue that you think should be raised for open space protection and/or parkland acquisition and development. $0.5 million Responses Percent 1 3% $1.0 million 12 35 % $1.5 million 10 29% $2.0 million 8 24% $3.0 million 2 6% $5.0 million 1 3% Total 34 ! 100% Note: 62% support $1.5 million or more Note: responses only include those that would support a tax increase 0 How much would you be willing to pay in additional taxes each month to support the annual revenue which you indicated in your answer to question no. 3? Less than $5 per month $5 to $10 per month $10 to $15 per month Total Responses Percent 22 46 % 18 38% 8 17% 48, 100% Note: 5595 support at least $5 to $10 Note: includes all responses to this question 0 The task force is considering different funding proposals. Please indicate below if you would support each one. If you would be willing to support more than one of the options, please indicate your order of preference: Support Do not support Total Raise All Funds from an an Assessment District Use Mix of Assessment District, UtWty Users Tax and Hotel Tax Responses Percent Responses Percent 21 17 55 % 45% 16 23 41 % 59% 38 100% 39 100% Note: 13 respondents supported other options such as development taxes, sales tax, assessment districts, transient occupancy taxes, property transfer taxes, andgrants, two respondents were opposed to some of these same sources. Ten respondents were in favor of no tax increase at all. City of San Luis Obispo OPEN SPACE FINANCING TASK FORCE TECHNICAL APPENDIX to the FINAL REPORT June 1996 City of San Luis Obispo Open Space Financing Task Force TECHNICAL APPI,.NDIX TO THE FINAL REPORT TABLE OF CONTENTS Introduction 1 Section A Minutes from Task Force Meetings ■ Meeting of May 23, 1996 3 ■ Meeting of May 9, 1966 4 ■ Meeting of April 29, 1996 6 ■ Meeting of April 25, 1996 8 ■ Meeting of April 4, 1996 9 ■ Meeting of March 28, 1996 10 ■ Meeting of March 21, 1996 12 ■ Meeting of March 14, 1996 14 ■ Meeting of March T. 1996 16 ■ Meeting of February 29, 1996 18 ■ Meeting of February 20, 1996 20 ■ Meeting of February 13, 1996 21 Section B Written Correspondence Received by the Task Force and Council Members ■ Memorandum from the Promotional Coordinating Committee dated May 30, 1996 23 ■ Letter and resolutions from the San Luis Obispo Chamber of Commerce dated May 26, 1996 24 ■ Letter from Lauren Brown (task force member) to the Telegram Tribune (appeared May 27, 1996) 27 ■ Letter from Diane Hull dated May 15, 1996 30 ■ Letter from Joseph E. DeLucia dated May 10, 1996 32 ■ Letter from Kenneth E. Schwartz dated April 30, 1996 34 ■ Letter from Lawrence Pennington dated April 28, 1996 37 ■ Letter from Residents for Quality Neighborhoods dated April 22, 1996 38 ■ Memorandum from Penny Rappa (task force chair) dated March 27, 1996 40 ■ Memorandum from David Smith (task force member) dated March 18, 1996 41 ■ Letter from Joseph E. DeLucia dated February 28, 1996 42 Section C Materials Prepared for the Task Force During Their Review of Financing Options ■ Memorandum from the Director of Finance on the qualification of the "Right to Vote Act" on the November ballot dated May 9, 1996 45 TABLE OF CONTENTS ■ Worksheets prepared by Lauren Brown for analyzing financing options dated March 20, 1996 47 ■ Memorandum from Director of Finance on transient occupancy taxes and assessed value dated March 18, 1996 57 ■ Report from the Department of Community Development on build -out and absorption comparisons 58 ■ Summary of open space financing options prepared by the Department of Finance 60 ■ Summary of what open space funding could buy prepared by the Department of Finance based on work performed by Economic Research Associates (ERA) 6.1 ■ Memorandum from the Director of Finance on revenue comparisons with other cities dated March 14, 1996 62 ■ Memorandum from the Natural Resources Manager on the Sonoma County voter campaign for a comprehensive county -wide greenbelt conservation program dated March 13, 1996 77 ■ Memorandum f -orn the Natural Resources Manager on the Sonoma County greenbelt program dated March 6, 1996 78 ■ Memorandum from the Natural Resources Manager on the status of the City's current open space preservation efforts dated March 6, 1996 79 ■ Information provided by the City of San Juan Capistrano on February 28, 1996 on their general obligation bond program for open space preservation 80 ■ Memorandum from the Natural Resources Manager on the role of open space financing as part of a comprehensive greenbelt preservation program dated February 13, 1996 92 ■ Memorandum from the Director of Finance on background materials on open space financing dated February 13, 1996 94 Section D Community Forum Background Materials ■ Letter sent to 134 groups and individuals informing them about the upcoming community forum and mailing list 119 ■ Notice that appeared in the Telegram Tribune and New Times advertising the forum 126 ■ Press release issued April 17 regarding the upcoming community forum 127 ■ Community forum agenda 129 ■ Questionnaire distributed at the forum with summary results 130 ■ Summary of questionnaire comments received 131 ■ Summary of speaker comments at the forum 132 ■ Summary report of preliminary task force findings prepared for the forum in April of 1996 134 ■ Report on preliminary tasks force findings issued in April of 1996 137 H:OSTFTECH.APX INTRODUCTION The purpose of this technical appendix is to provide a comprehensive summary of the process used by the Open Space Financing Task Force in arriving at the findings and recommendations set forth in its final report presented to the Council on June 11, 1996. This appendix is organized into the following four sections: ■ Section A Minutes from Task Force Meetings. The task force met twelve times over a four month period in arriving at the findings and recommendations included in their final report. The "action minutes" from each of these meetings is provided in this section. ■ Section B Written Correspondence Received by Task Force and Council Members. In responding to its initial discussions, preliminary report issued in April of 1996, and final report issued in June of 1996, task force and Council members received written correspondences from a number of community groups and individuals as well as from task force members. These letters and memorandums are provided in this section. ■ Section C Materials Prepared for the Task Force. During the course of its review, a wide range of supplemental background materials were prepared for the task force by the staff and by other task force members. These are provided in this section. ■ Section D Community Forum Background Materials. This section provides supplemental information about the community forum held by the task force on April 29, 1996. In addition to the supplemental background materials prepared for the task force during their review of financing options, the following key policy documents were also extensively reviewed and considered by task force members: ■ Open Space Element of the General Plan. Approved by the Council in January of 1994, this is the primary policy document of the City in setting forth a clear vision of what open space areas we should protect and why we should protect them. ■ Financial Analysis of Open Space Acquisition. This comprehensive report on open space financing options was prepared for the City by Economics Research Associates (ERA) in 1993 as an integral part of the open space element preparation process. ■ Saving Special Places. Prepared for the City by the San Luis Obispo County Land Conservancy in July of 1995, this report identifies high -priority candidate properties for purchase based on their unique resource features and property owner interest. For additional information about the Open Space Financing Task Force and their final report findings and recommendations to the City Council, please contact Neil Havlik, Natural Resources Manager, at 781-7211. 1 Section A MINUTES FROM TASK FORCE MEETINGS MINUTES Open Space Financing Task Force City of San Luis Obispo Thursday, May 23, 1996 7.00 am to 8:30 am Council Hearing Room ATTENDANCE Task Fome Members Present. Lauren Brown, Bill Coy, Gary Felsman, Carol Florence, Alan McVay, Penny Rappa, Paul Ready, David Smith, Sally Stoner, Marty Tangeman, Dan Williamson. Absent; Joe Delucia, Charlie Fruit, Amy Shore, Pat Veesart City Staff Present John Dunn, City Administrative Officer; Neil Havlik, Natural Resources Manager; Bill Statler, Director of Finance. ACTIONS ■ Reviewed and approved the final report (10-0) with the following changes: language will be added under 'Ballot measure" on page 6 recommending that appropriate notice be provided to property owners about the upcoming advisory measure; and the nominating group for Dan Williamson (Exhibit D) will be revised to "Cal Poly". ■ Appointed a sub -committee composed of the following members to prepare for the presentation of the final report to the Council at the June 11 meeting: Lauren Brown, Carol Florence, Penny Rappa and Pat Veesart. The task force adjourned its final meeting at 8:30 am. H:OSTFMIN.5/23 MINUTES Open Space Financing Task Force City of San Luis Obispo Thursday, May 9, 1996 7.00 am to 9:00 am Council Hearing Room ATTENDANCE Task Force Members Present. Lauren Brown, Joe Delucia, Gary Felsman, Carol Florence, Alan McVay, Penny Rappa, Paul Ready, Amy Shore, David Smith, Sally Stoner, Marty Tangeman, Pat Veesart, Dan Williamson. Absent. Bill Coy, Charlie Fruit. City Staff Present Ken Hampian, Assistant CAO; Neil Havlik, Natural Resources Manager; Paul LeSage, Director of Parks & Recreation; Bill Statler, Director of Finance. Others Present Scott Gregory, San Luis Obispo Chamber of Commerce (for Bill Coy). ACTIONS ■ Received initial comments on the task force's preliminary report from Scott Gregory representing the Legislative Affairs Committee of the Chamber. This group will be making its recommendations to the Chamber Board on May 16. They are generally supportive of the task force's preliminary findings. Specifically, they recommend the "assessment district only" approach; an initial annual funding level of $1.0 million; formation of the proposed oversight committee; and "sun -setting" of the program after five years. ■ Received a report from Paul LeSage supporting the use of up to 25% of program revenues for parkland acquisition and development. ■ Discussed the results of the open space financing community forum. n Approved the following provisions to be included in the final report to the Council, which is scheduled for June 11: 0 Open Space Financing Task Force Minutes May 9, 1996 Open Space Financing Task Force Page 2 By formal vote By consensus Retain the recommendation that up to 25% of program revenues may be used for parkland acquisition and development and that the recommended annual funding level be set at $1.5 million (see pages 2 and 5 of the draft final report). Approved: nine in favor; two opposed (Alan McVay, Joe Delucia voting no). Recommend the "assessment district only" funding approach (see pages 1 and 10 of the draft final report). Approved: ten in favor; one opposed (Joe Delucia voting no). General Fund support for open space protection should be continued at some level even if this program is adopted (see page 7 of the draft final report). The City should initiate efforts to establish a county -wide program funded through a 1/4 cent sales tax (see page 6 of the draft final report, first paragraph, second sentence). The program should be comprehensively re-evaluated after 5 years (see pages 2 and 7 of the draft final report). - A separate fund should be established and interest earned on any cash balances (see page 7 of the draft final report). - The City should form partnerships with non-profit, community -based groups whenever possible in implementing open space protection programs (see page 5 of the draft final report). ■ Received a briefing from Neil Havlik on the status of current open space acquisition efforts. ■ Received a briefing from Bill Statler on the qualification of the "right to vote on taxes act initiative" for placement on the November 1996 ballot. The draft final report includes the recommended approach in addressing this new development, which was distributed to task force members at the meeting (see page 7 of the draft final report). Adjourned at 9:00 am to their next meeting on Thursday, May 23 in the Planning Conference Room to review the final report to the Council. S MINUTES Open Space Financing Task Force City of San Luis Obispo Monday, April 29, 1996 6:45 pm to 10:00 pm City -County Library Community Room ATTENDANCE Task Force Members Present. Lauren Brown, Bill Coy, Joe deLucia, Carol Florence, Charlie Fruit, Penny Rappa, Sally Stoner, Marty Tangeman, Pat Veesart, Gary Felsman, Amy Shore, David Smith, Dan Williamson Absent. Paul Ready, Alan McVay City Staff Present John Dunn, City Administrative Officer; Ken Hampian, Assistant CAO; Neil Havlik, Natural Resources Manager; Bill Statler, Director of Finance; Linda Fitzgerald, Recreation Coordinator; Erik Hackmann, Park Ranger; Cindy Pilg, Administrative Secretary PRESENTATIONS ■ Penny Rappa - Chair Introduction of members of Task Force, City staff and councilmembers. Brief description of forum topic and the Task Force's role. ■ Marty Tangeman Key issues included: - Definition of "open space" and goals set by "Open Space Element." - Criteria established for open space designation. - Funding history and present available sources. - Identification and targeting of property for potential acquisition detailed in "Saving Special Places." - Purpose of Task Force and steps taken to achieve goals. 6 Public Forum Minutes Page 2 ■ Neil Havlik Slide presentation showing many examples of open space areas in Sonoma, Solano and Santa Clara Counties and alternative acquisition possibilities for the San Luis Obispo area. ■ Pat Veesart Issues raised by the Open Space Financing Task Force and options available for funding the project. The key principles and leading revenue and focused funding options were described. ■ Lauren Brown Detailed discussion of the two options envisioned by Task Force, delineating each annual revenue interval and the advantages and disadvantages involved with each scenario. PUBLIC INPUT/QUESTIONS Facilitator Penny Rappa responded to questions and/or directed to the pertinent Task Force member. (Adjourned at 9:15 p.m.) MINUTES Open Space Financing Task Force City of San Luis Obispo Thursday, April 25, 1996 7.00 am to 9:00 am Council Hearing Room ATTENDANCE Task Force Membeis Present. Joe Delucia, Gary Felsman, Carol Florence, Alan McVay, Penny Rappa, Amy Shore, David Smith, Sally Stoner, Marty Tangeman, Pat Veesart. Absent. Lauren Brown, Bill Coy, Charlie Fruit, Paul Ready, Dan Williamson. City Staff Present Neil Havlik, Natural Resources Manager; Bill Statler, Director of Finance ACTIONS ■ Reviewed final plans for the community forum scheduled for April 25. ■ Received reports from task force members on the results of constituent group briefings. ■ Adjourned at 8:00 am to their next meeting on Thursday, May 9, in the Council Hearing Room to review the results from the community forum and finalize task force recommendations. 11:0STRAINA/25 Eli MINUTES Open Space Financing Task Force City of San Luis Obispo Tlusrsday, April 4, 1996 7.00 am to 9:00 ant Planning Conference Room ATTENDANCE - Task Force Members Present. Lauren Brown, Bill Coy, Gary Felsman, Charlie Fruit, Alan McVay; Penny Rappa, Amy Shore, David Smith, Sally Stoner, Marty Tangeman, Pat Veesart, Dan Williamson Absent. Joe deLucia, Carol Florence, Paul Ready City Staff Present John Dunn, City Administrative Officer; Ken Hampian, Assistant CAO; Neil Havlik, Natural Resources Manager; Bill Statler, Director of Finance ACTIONS ■ Reviewed draft "preliminary findings report" and approved with changes. Key changes included: Conservation easements. Added section on the importance of conservation easements vs. direct purchase in protecting open space. Oi,ersight committee. Added issuance of an annual report to the committee's duties. Use of funds. Reaffirmed by vote (6 in favor; 4 opposed; 1 abstention) that up to 25% of the proceeds for the program could be used for park acquisition and development, but specifically excluding golf courses. Maintenance. Specifically excluding the use of program funds for the maintenance of developed parks. - Ballot measure. Finalized recommendation for an advisory ballot measure. ■ Reviewed and approved agenda for the April 29 community forum. ■ Formed media sub -committee composed of Lauren Brown, Penny Rappa, Marty Tangeman, and Pat Veesart to promote attendance at the April 29 community forum and help present the task force's preliminary findings. ■ Adjourned at 9:00 am to their next meeting on Thursday, April 25 at 7:00 am in the Council Hearing Room to finalize plans for the community forum. r� MINUTES Open Space Financing Task Force City of San Luis Obispo Thursday, March 28, 1996 7.00 am to 9:00 am Council Hearing Room ATTENDANCE Task Force Members Present. Lauren Brown, Bill Coy, Joe Delucia, Gary Felsman, Carol Florence, Charlie Fruit, Alan McVay, Penny Rappa, Amy Shore, David Smith, Paul Ready, Sally Stoner, Marty Tangeman (via telecommuting), Pat Veesart, Dan Williamson Absent. None City Staff Present Ken Hampian, Assistant CAO; Neil Havlik, Natural Resources Manager; Bill Statler, Director of Finance ACTIONS ■ Received information requested from staff at the March 21 meeting on advantages and disadvantages of various funding options. ■ Reaffirmed direction to only pursue funding options that can be approved by the Council or voter majority on the following vote (14-1): Ayes: Lauren Brown, Gary Felsman Carol Florence, Alan McVay, Penny Rappa, David Smith, Paul Ready, Sally Stoner, Marty Tangeman (via telecommuting), Dan Williamson Noes: Joe Delucia ■ Continued their discussion of financing options and methodologies and requested that the following summaries be prepared for the next meeting, at which time hopefully a consensus will be reached as to materials that should be prepared for meetings with representative groups and the forum planned for Monday, April 29: Impacts of assessment district funding as the sole funding source at $1.0 million, $1.5 million, and $2.0 million annual revenues, assuming that the costs are spread 85% residential/15% non-residential, and that multi -family assessments are set at 75% of the level of single-family residential. /O Open Space Financing Task Force Minutes March 28, I996 Impacts assuming a funding mix of 50% assessment district, 12.5% transient occupancy tax, and 37.5% utility users tax, using the same assumptions for annual revenues as above ($1.0 million, $1.5 million, and $2.0 million) and the same assessment spread assumptions. ■ Formed a sub -committee composed of Lauren Brown, Carol Florence, Penny Rappa and Amy Shore to plan for the open space financing forum scheduled for April 29. ■ Adjourned at 9:00 am to their next meeting on Thursday, April 4 at 7:00 am in the Council Hearing Room. H:OSTFMIN.328 MINUTES Open Space Financing Task Force City of San Luis Obispo Thursday, March 21, 1996 7.00 am to 9:00 am Council Hearing Room ATTENDANCE Task Foire Membeis .Present. Lauren Brown, Joe Delucia, Gary Felsman, Carol Florence, Alan McVay, Penny Rappa, Paul Ready, David Smith, Marty Tangeman, Dan Williamson Absent. Bill Coy, Charlie Fruit, Amy Shore, Sally Stoner, Pat Veesart City Staff Present John Dunn, City Administrative Officer, Ken Hampian, Assistant City Administrative Officer, Neil Havlik, Natural Resources Manager; Bill Statler, Finance Director Guests Councilmember Bill Roalman ACTIONS ■ Approved minutes of meeting (M/Williamson, S/Ready) of March 14, • 1996. ■ Received briefings on the following issues as requested from the March 14 meeting: Verbal report to the effect that the Guardino decision would not affect City fund-raising capabilities for as currently conceptualized for the project (Havlik). Report of assessed values within the City and how funding option would affect said values or be affected by them (Statler). Verbal report on fund-raising scenarios, for discussion by Task Force (Statler). ■ Continued discussion of financing options and methodologies, and took the following actions: Agreed to develop a draft funding package by the end of next meeting, then recess for one month while seeking public and constituent group input. Selected April 25 as a tentative date for a public workshop. Discussed amount of funding support that was appropriate to strive for. There was !Z interest in including park improvements as a component of the project. Motion was made (M/Ready, S/Tangeman) to target raising $2 million annually from a program requiring a majority vote, including $0.5 million for park capital improvements. Motion was approved unanimously. By consensus, agreed to formally drop idea of a sales tax within the city for the current project study as -it is not within the City's ability to independently control. Supported use of funds only for "hard" costs, such as open space acquisition and capital improvements, not studies or staff time (appraisals okay). Discussed time frame of funding program. Lauren Brown stated support for long-term funding program to challenge the citizenry. Motion (MBrown, S/Felsman) to support a 30 year funding program, with automatic sunset if substituted by Countywide program. Motion was amended (MBrown, S/Smith) to include replacement or reduction by Countywide program. Lengthy discussion of whether to go for 30 years or allow sunset and require re -authorization after 5-6 years. On the question, vote was five in favor, five opposed; motion failed. Lauren Brown made a presentation of how funding scenarios would work based upon different mixes of funding sources (assessment, utility tax, transient occupancy tax, and real estate transfer tax), and amount sought. Upon conclusion of presentation Task Force initiated discussion of pros and cons of each mechanism. ■ Requested staff to prepare a "polished" list of pros and cons of funding alternatives discussed so far. ■ Adjourned at 9:10 am to their next meeting on Thursday, March 28 at 7:00 am in the Council Hearing Room. H:OSTFMIN.714 MINUTES Open Space Financing Task Force City of San Luis Obispo Thursday, March 14, 1996 7.00amto9:00am Council Hearing Room ATTENDANCE Task Foire Members Present. Lauren Brown, Bill Coy, Joe Delucia, Gary Felsman, Carol Florence, Alan McVay, Penny Rappa, Paul Ready, Amy Shore, David Smith, Sally Stoner, Pat Veesart, Dan Williamson Absent. Charlie Fruit, Marty Tangeman City Staff Present John Dunn, City Administrative Officer, Ken Hampian, Assistant City Administrative Officer, Neil Havlik, Natural Resources Manager; Linda Asprion, Revenue Manager ACTIONS ■ Approved minutes of meetings (M/Ready, S/McVay) of February 29 and March 7, 1996. ■ Received briefings on the following issues as requested from the March 7 meeting: Additional background information on campaign to pass Sonoma County's open space financing program (Havlik). Briefing on park capital improvements possible under the program (Havlik). Additional background about revenue potential and impact from a property transfer tax, transient occupancy tax, and increase in utility user's tax (Asprion). ■ Continued their discussion of financing options and methodologies. - Bill Coy mentioned concern over commitment to allocate funds to open space program; business community would want assurances that such would be the case. Guidelines and some type of citizen oversight of funds would be essential. Lauren Brown stated concern over support from business community. He stated that we could use $200 million; Task Force's charter is to gear a program to the community's political will and capability. Pat Veesart felt that property transfer tax looked very attractive; Lauren Brown disagreed, feeling focus was on too narrow a segment of the community. M¢ Lauren Brown opposed bond, liked pay-as-you-go. Consensus that this was appropriate. - Amy Shore stated support for mix of funding sources. Vote would be for or against a package. Sally Stoner suggested an annual fundraising event such as a run or bikeathon, which would raise some money but would primarily be to raise awareness of the Open Space program. General consensus that this was an excellent idea. Dave Smith suggested Task Force formally drop idea of a sales tax within the city. Agreed, as City cannot impose a sales tax unilaterally and consideration of a Countywide measure could take years. Paul Ready stated support for sunset to program after 5-6 years unless extended by voters or superceded by Countywide program funded by a sales tax increment; having citizen oversight committee; using utility and transient occupancy tax as major sources. - Chair Penny Rappa suggested that staff and subcommittee (Rappa, Brown) put together a scenario and report back to Task Force. Agreed. She stated support for an assessment district and percentage of existing utility tax. Consensus of group was to seek to raise $1 - $1.5 million annually. ■ Requested the following information for their review at the next meeting: Additional information on assessed values and how they would work. Information on effect of Guardino decision on fundraising capabilities. Possible fundraising scenario. ■ Adjourned at 9:00 am to their next meeting on Thursday, March 21 at 7:00 am in the Council Hearing Room. H:OSTFMIN.314 /6, MINUTES Open Space Financing Task Force City of San Luis Obispo Thursday, March 7, 1996 7.00 am to 9:00 am Planning Conference Room ATTENDANCE Task Force Members Present. Lauren Brown (via telecommuting), Joe Delucia, Gary Felsman Carol Florence, Alan McVay, Penny Rappa, David Smith, Paul Ready, Sally Stoner, Marty Tangeman, Dan Williamson Absent. Bill Coy, Charlie Fruit, Amy Shore, Pat Veesart City Staff Present Neil Havlik, Natural Resources Manager; Bill Statler, Director of Finance Others Present Ray Belknap, SLO Land Conservancy ACTIONS ■ Deferred approval of minutes to the next meeting pending revisions as requested by David Smith. ■ Received briefings on the following issues as requested from the February 29 meeting: - Background information on Sonoma County's open space financing program (Havlik). - Overview of other open preservation strategies the City is currently using (Havlik). - Revenue potential and impact on residences and businesses from an assessment district and increases in utility users and transient occupancy taxes (Statler). - Status of current open space acquisition efforts by the SLO Land Conservancy on behalf of the City (Belknap). ■ Supported continuing with current City open space acquisition plans as previously authorized by the Council based on the Saving Special Places report on a formal motion as follows: Ayes: Lauren Brown (via telecommuting), Gary Felsman Carol Florence, Alan McVay, Penny Rappa, David Smith, Paul Ready, Sally Stoner, Marty Tangeman, Dan Williamson Noes: Joe Delucia 16 Open Space Financing Task Force Minutes March 7, 1996 ■ Continued their discussion of financing options and methodologies. ■ Requested the following information for their review at the next meeting: Voter education program developed in Sonoma County that led to passage of the open space sales tax. Utility user and transient occupancy tax rates levied by other California cities. ■ Adjourned at 9:00 am to their next meeting on Thursday, March 7 at 7:00 am in the Council Hearing Room. H:OSTFMIN.37 /7 MINUTES Open Space Financing Task Force City of San Luis Obispo Thursday, February 29, 1996 7.00 am to 9:00 am Council Hearing Room ATTENDANCE Task Force Members Present. Lauren Brown, Bill Coy, Joe Delucia, Carol Florence, Charlie Fruit, Alan McVay, Penny Rappa, David Smith, Paul Ready, Amy Shore, Sally Stoner, Marty Tangeman, Pat Veesart, Dan Williamson Absent Gary Felsman City Staff Present Ken Hampian, Assistant City Administrative Officer; Neil Havlik, Natural Resources Manager; Bill Statler, Director of Finance Others Present Ray Belknap, SLO Land Conservancy ACTIONS ■ Approved minutes from their February 20, 1996 meeting ■ Received a briefing from Ray Belknap on the SLO Land Conservancy's report Saving Special Places, and the data base and mapping information currently available on the City's greenbelt area as set forth in the open space element as result of their work to date. , ■ Continued their discussion of financing options and methodologies, and the status of current open space purchases. ■ Requested the following information for their review at the next meeting: Simple matrix of possible funding sources and revenue potential. Overview of other open preservation strategies the City is currently using. Background information on Sonoma County's open space preservation program. /0 ■ Agendized the following specific issues for consideration at the next meeting: Should current City open space acquisition plans as authorized by the Council based on the Saving Special Places report using the $1.4 million currently available for this purpose be deferred until the task force has completed its work? Should we conduct a scientific random sample survey of citizen opinions on the best way of funding open space purchases as an integral part of the task force's work? Two major "what" questions that should be resolved before proceeding to "how" questions include: Should we try to raise as large a fund as we think practical and then attempt to buy rights as opportunities arise? or should we identify rights we want to acquire now, determine their cost, and then raise that much money? Should we go for a money -raising plan that can be authorized by the Council (with or without an advisory or binding election)? or should we go for general obligation bonds that require two-thirds voter approval? ■ Adjourned at 9:00 am to their next meeting on Thursday, March 7 at 7:00 am in the Council Hearing Room. H:OSTFNGN.229 /f MINUTES Open Space Financing Task Force City of San Luis Obispo Tuesday, February 20, 1996 Noon to 1.30 pm Council Hearing Room ATTENDANCE Task Force Members Present Bill Coy, Joe Delucia, Gary Felsman, Carol Florence, Alan McVay, Penny Rappa, David Smith, Paul Ready, Sally Stoner, Marty Tangeman, Pat Veesart, Dan Williamson Absent. Lauren Brown, Charlie Fruit, Amy Shore City Staff Present Ken Hampian, Assistant City Administrative Officer; Neil Havlik, Natural Resources Manager; Bill Statler, Director of Finance ACTIONS ■ Approved minutes from their February 13, 1996 meeting ■ Selected Penny Rappa to serve as the task force Chair. ■ Set an ongoing schedule for task force meetings: Every Thursday 7:00 am to 9:00 am Council Hearing Room ■ Continued their discussion of financing options and methodologies, status of current open space purchases, role of the task force, and timeframes for completion of their work. ■ Requested that Ray Belknap attend the next meeting to further brief task force members on the findings of Land Conservancy's report - Saving Special Places - and the type and level of mapping and other data that the Land Conservancy has developed on the City's greenbelt area. ■ Adjourned at 1:30 pm to their next meeting on Thursday, February 29 at 7:00 am in the Council Hearing Room. MOSTSURCIGN ZD MINUTES Open Space Financing Task Force City of San Luis Obispo Tuesday, February 13, 1996 11.30 ant Council Hearing Room ATTENDANCE Task Force Members Present Bill Coy, Joe Delucia, Gary Felsman, Carol Florence, Charlie Fruit, Alan McVay, Penny Rappa, David Smith, Marty Tangeman, Pat Veesart, Dan Williamson Absent. Lauren Brown, Amy Shore, Sally Stoner, Paul Ready City Staff Present John Dunn, City Administrative Officer; Ken Hampian, Assistant CAO; Neil Havlik, Natural Resources Manager; Arnold Jonas, Director of Community Development; John Mandeville, Long -Range Planning Manager; Cindy Pilg, Administrative Secretary; Bill Statler, Director of Finance Others Present Bill Roalman, Council Member; Ray Belknap, Land Conservancy PRESENTATIONS City staff and Ray Belknap from the San Luis Obispo Land Conservancy briefed task force members on the following topics: ■ Overview of task force purpose and introduction of task force members ■ Open space program history ■ Task force mission as set forth by the Council and suggested timeframe for completion ■ Open space goals as set forth in the Open Space Element of the General Plan ■ Results of recent study performed by the Land Conservancy: Saving Special Places ■ Overview of possible financing methodologies ■ Brown Act requirements ■ Support role of City staff The following background materials were distributed to task force members: e Task force mission, roster and election time -line for placing measures on the November ballot ■ Brown Act informational brochure ■ History of open space planning efforts in San Luis Obispo 1 Z/ Open Space Financing Task Force Minutes February 13, 1996 ■ Open Space Element of the General Plan ■ Report prepared by the Land Conservancy: Saving Special Places ■ Report on funding open space preservation prepared by Economic Research Associates (ERA) ■ Background materials on open space financing ■ Excerpts from SLOCOG survey on sales tax options (1989) TASK FORCE ACTIONS The task force set the following dates for its next two meetings: ■ Tuesday, February 20 Noon to 1:30 pm Council Hearing Room ■ Thursday, February 29 7:00 am to 8:30 am Council Hearing Room Future meeting times beyond these dates will be decided at a subsequent meeting. ADJOURNMENT At 1:30 pm, the task force adjourned the meeting to Tuesday, February 20, at Noon in the Council Hearing Room. ROSTSURC.FIIY 2 22 Section B WRMEN CORRESPONDENCE evil W. rl I kil11 V(-Vl 0-9 No 73 VOf'M 9 MEMORANDUM May 30, 1996 TO: City Council FROM: Bill Pyper, Chairperson, City of San Luis Obispo Promotional Coordinating Committee e)r SUBJECT: Open Space Financing Task Force Report At its meeting of May 22, 1996, the Promotional Coordinating Committee (PCC) discussed the preliminary Open Space Financing Task Force Report. It is our understanding that out of the various possible funding sources, the Task Force will be recommending to the Council the formation of an assessment district pending approval from the community by an advisory vote. The PCC recognizes that a significant part of the City's tourism appeal comes from the beauty of its location within the semi -rural environment of San Luis Obispo County. Realizing the importance of maintaining this environment, and given the recommended funding source, the PCC supports the concept of acquiring open space as presented by the Task Force. However, the PCC would not be in support of any funding plan which would use the Transient Occupancy Tax as a source. 23 JSan Luis Obispo Chamber of Commerce 1039 Chorro Street • San Luis Obispo, California 93401-3278 (805) 781-2777 • FAX (805) 543-1255 e-mail: slo-chamber@slonet.org David E. Garth, Executive Director May 26,1996 Mayor Allen Settle and Members of the City Council City of San Luis Obispo 990 Palm Street San Luis Obispo, California 93401 Honorable Mayor and Council Members: The San Luis Obispo Chamber of Commerce would like to commend the City's Open Space Financing Task Force for developing a cogent and realistic plan for placing open space financing on the November 1996 ballot. The Chamber has supported protection of our open spaces for several years, and we are supportive of this advisory vote as a clear and appropriate manner to poll the populace of San Luis Obispo as to their desires on this important concept. On the whole, we feel that the Open Space Financing Task Force proposal represents a sound strategy for financing that portion of open space acquisition that cannot be accomplished by other means. We support the overall concept wholeheartedly. In addition, we would like to recommend several minor changes that we feel will increase the likelihood of the program's success both at the polls and over the long term. These recommendations are summarized in the enclosed resolutions, which were passed unanimously by our Board of Directors at its May 16 meeting. These resolutions demonstrate our clear support for open space acquisition, and include only those changes that we feel will increase the level of trust in the plan by members of the general public, promote accountability in open space financing over the long term, and increase the likelihood of a successful ballot initiative in November. We look forward to working with the City of San Luis Obispo in coming years to make this program a success, and commend your efforts to implement this progressive approach to environmental protection and economic health. Yours very truly, TEN YEARS /// Robert L. Gri n ACCREDITED President CHAMBER OF COMMERCE "1M ( ° =1 2g Adopted Resolution of San Luis Obispo Chamber of Commerce Board of Directors May 16, 1996 As a result of discussion on the City of San Luis Obispo's Open Space Financing Task Force and its efforts to develop a cogent financing plan to protect the natural resources of our area, and pursuant to recommendation by the Chamber's Land Use Task Force, the San Luis Obispo Chamber of Commerce hereby adopts the following resolution: WHEREAS more than 80% of the Chamber's membership has expressed a desire to implement an open space protection program, even if this program results in increased costs to themselves; and WHEREAS the Chamber of Commerce has been a driving force in the effort to protect open space around the City, and has been represented on the Open Space Financing Task Force; RESOLVED that the Chamber supports placing a plan for open space financing on the November 1996 ballot, as developed by the Open Space Financing Task Force, subject to the following concerns being addressed: • The City should place the assessment district only option rather than the combination plan onto the ballot. The assessment -only option is preferable because of its simplicity and flexibility. In addition, it avoids the double and triple taxation possible under the combination plan, and protects the TOT at current rates. • The assessment district proposal should include $1 million as its stated annual goal. It is better to strive for a smaller funding amount that can be increased after the program has proven successful than to attempt to immediately raise a larger amount and meet defeat on the advisory vote. Also, because purchase of land should be a last resort mechanism for acquisition, lesser funding levels are appropriate. • The City still needs to address the issue of maintenance of open space land. Under the current plan, maintenance costs would come from the open space financing budget. Given the desire to use certain open space lands for park -facilities, as well as the environmental monitoring costs for certain wetland areas and the like, it is possible that in future years it would be necessary to use the majority of funds raised to maintain previously acquired properties rather than acquire new ones; • The entire open space financing program should contain a five year sunset clause. At that time, if the program has been successful, consideration should be given to expanding it to a county -wide program. If the program has been unsuccessful, it should be disbanded. • A citizen -based oversight authority should be created that will ensure the program follows agreed - upon principles in the acquisition ofopen space, such as safeguarding open space acquisition funding for its intended use. This authority is vital in preserving public trust for the project. Motion H Res 25" Adopted Resolution of San Luis Obispo Chamber of Commerce Board of Directors May 16, 1996 The San Luis Obispo Chamber of Commerce Board of Directors adopted the following motion as an addendum to the Land Use Task Force recommendations outlined above. WHEREAS, members of the Land Use Planning Task Force were invited to attend a special meeting of the Tourism Council to discuss the City's proposed funding mechanisms for the Open Space Program. The Tourism Council was concerned with a preliminary recommendation that the transient occupancy tax be raised to fund open space; and WHEREAS, after hearing from Andrew Merriam, Bill Coy and Ken Hampian, the Tourism Council unanimously agreed to support the Land Use Task Force Recommendations to the Board regarding its May 8, 1996 Committee Meeting; RESOLVED, that the Tourism Council requested that the Board consider the following MOTION: Whereas parks add to the ambiance of the community and benefit local tourism, the city's primary industry, the Chamber supports the Land Use Financing Task Force's recommendation to support the Open Space Financing Task Force proposal, and that this resolution should include a recommendation that up to 25 percent of the open space financing budget be used for parks within the open space plan area. Motion was approved unanimously. Resp ectitt W. Dirntal Affairs 26 Lauren Brown 7 Chuparrosa Dr. San Luis Obispo, CA 93401 May 14, 1996 John Moore Editor, Telegram -Tribune San Luis Obispo, CA Dear John: I would be interested in having the following published as a response to Dick Nock's article which appeared in the Telegram -Tribune on May 3 following the Open Space Financing Task Force Public Hearing. I would prefer that it not be run as part of the continuing "Green View" series. This is an issue that I believe cuts across the spectrum of interests in our community. If it is too long as written I would be happy to have the assistance of your editorial staff in reducing it. My day -time telephone number at JBL Scientific is 544-8524 Sincerely yours, Lauren R. Brown Member, Open Space Financing Task Force 27 Open Space Protection - Another View In his regular column on May 3 Dick Nock voiced concerns regarding the Open Space Financing Task Force proposals as presented on April 23 at a public hearing. This Task Force was appointed by the SLO City Council last fall and charged with the responsibility to formulate a plan to help finance a more vigorous program to protect the `green belt' that still more or less surrounds the city of San Luis Obispo. As a member of this Task Force (representing the Association of Manufacturers and Distributors), I believe that some of Mr. Nock's objections are based on some misconceptions of the Task Force proposals. The following may help to clarify the situation. First, some facts: The Task Force has proposed that the city seek an advisory vote in the fall election to determine the willingness of the voters of the city of San Luis Obispo to support a revenue measure for financing the protection of the green belt. The annual revenue would be in the range of $1,000,000 to $2,000,000. Up to 25% of the funds could be used for capital projects for city parks. The City Council asked that the revenue source be broad -based. The Task Force had quite limited options for achieving breadth of impact but eventually focused on an `assessment district' which would result in an fee that would appear on the property tax bill for owners of developed property in the city. (Indirectly, renters and buyers of goods and services from a business impacted by the assessment would also be affected). The final recommendations of the Task Force will be submitted before the end of May to the City Council, which will then decide on the final content of the ballot measure. Now for some clarifications. In reality, only a small proportion of the green belt area surrounding San Luis Obispo could ever be protected using the funds raised by this program. At the rate of $ 1 million to $2 million annually it would take generations to acquire outright the 33,000 acres in the identified area, considering that the value of this land reaches many hundreds of millions of dollars. This program is only supplemental to other existing tools, including zoning restrictions and dedications in return for development rights, that are presently used by the city and the county in an effort to regulate the development of land. Nevertheless, even this relatively small program could make the difference in achieving long-term protection of certain key areas. Further, outright acquisition of land in the green belt is not a very cost-effective strategy for protecting open space. A strong consensus was reached on the Task Force that wherever possible that the city should purchase only the `development rights a fair value, but not make an outright purchase. This would prevent development from ever occurring on the land and would leave it in the hands of agriculturists who would continue to own, use and care for the land in the way that they always have, and maintain it that way for generations. Outright acquisition should be limited to a few cases where public access or actual city control is desired. It should be strongly emphasized that this proposed program is based on completely voluntary participation of landowners in this program. The city would negotiate with a landowner only if that person indicated a desire to have the city consider buying either the development rights or the entire property. With its overall intent, this is a strongly pro -agriculture program. ZJ? A few other communities have engaged in such a long-term program. Sonoma County has a long-term county -wide program that has been underway for several years and has been quite successful. In Boulder, Colorado, a substantial area around the city is protected open space. This includes many working ranches that sold developments rights to the city. In that case many of the ranchers were even willing to negotiate with the city to permit extension of hiking and biking trails through their property. Now, the Task Force is keenly aware of the burden of existing taxes and fees on most families. We therefore are proposing a program that could cost a typical honieoN ner as little as $3.54 per month ($43/yr.) and no more than $8.74 per month ($105 annually), depending on the final scope of the program. The program should only be implemented by the city council if a majority of voters agree that the long-term benefit to all of us warrants that added cost per year. Further, the whole program should be subject to periodic review by a special citizen committee to make sure that the public is getting the results that warrant continued support. I would like to conclude with an explanation of why I personally think the voters of San Luis Obispo should support the Open Space protection program. Like most others, I find San Luis Obispo to be a very special city in which to work, as well as to reside. Efforts on many fronts are needed to keep it that way. I believe that maintaining an extensive green belt around the city is certainly an important part of preserving this as a wonderful, small city for future generations. I must also add that proper planning in San Luis Obispo should include measures to assure the future economic viability of our city. Having served, as well, on the Economic Stability Task Force two years ago and having been part of a manufacturing company in SLO for many years, I am well aware that more land is also needed for commercial development to assure good job opportunities in the future with dynamic companies in our town. Consequently, I support the annexation of some land to the city, such as the airport area, as part of the long-range economic planning. Open space protection and annexation are two sides of the same coin: management of the land surrounding our city in a manner that brings lasting benefit to our residents. The key is to strike an acceptable balance between development and conservation. The Open Space protection program as proposed is one of the ways we could use to achieve that balance. I hope that voters will agree that the benefit for future generations is worth the pain of reaching into our own wallets now to help finance the program. In June the City Council will be reviewing the Task Force proposal. Be sure to let the Council know your opinions and help shape a ballot measure that can work for the whole city and gain majority approval. 29 April 29, 1996 Draft prepared by Diane Hull, CPA and SLO Resident Revised, May 15, 1996 Open Space Financing??? We cannot afford to purchase open space. Assumptions: Couple with two kids, household income of $37,500, recently purchased $140,000 house (with gift from Mom and Dad for down payment) $112,500 mortgage. Utilities Pacific Bell: Federal Local (City) Est avg monthly 1.25 1.30 PG&E SLO City 5% 2.00 (avg bill $40) The Gas Company SLO City 5% (avg bill $30) Water/Sewer SLO City 2.25 % Sonic Cable SLO City — 5% 1.50 2.00 1.21 Est annual 15.00 15.60 24.00 18.00 24.00 14.52 Other Property Taxes DMV Car Registration: State —2% of value 500.00 SLO County $4 per car 8.00 2 cars per household Real Property Taxes 1.3% X $140K 1,729.00 County personal property taxes Boats Satellite dishes Income Taxes Payroll Taxes Social Security 7.65% 2,869.00 SDI .8% 300.00 Income Tax (per tax projection, Fed & Cal) 3,000.00 Other Consumer Taxes Sales Tax assume avg spending per month $500 X 7.25% X 12 DRAFT copy PREUMINARY & TENTATIVE for DISCUSSION PURPOSES ONLY RECEIVED MAY 1 0 19�6 RenPTM COUNCIL 3D 435.00 FULL COUNCIL HAS REC€WD THIS DOCUMENT Gasoline Tax assume 12,000 miles driven per year, per car (2/household) 20 mpg = 1200 gallons per year Federal Tax 18.4 cents/gallon 220.80 State & Local 18.0 cents/gallon 216.00 Sales Tax 7.25% on avg $1.60/gall. 139.20 Alcohol and Cigarettes: Sales tax Other federal and state taxes Developer fees added to the cost of your home, increasing your property tax burden and debt service burden. SLO City Fees for a 1500 Square Foot Home: $17,295 Increase in monthly mortgage payment related to the fees (assuming 7-8% rate, 30 year loan) $120 x 12 = $1,440 per year Increase in annual property taxes related to increased 'value" $17,295 x 1.4% est prop tax rate = $242 (This hidden tax is already reflected in the property taxes) Total taxes paid by average family $10,968 Average Annual Household Income $37,500** Income left over ($2,211 per month) $26,532 After the mortgage of $825 per month, $1,386 is left each month for food and clothing, charitable giving, childcare, savings for college, vacations, replacing cars and appliances, etc... (No wonder consumer debt continues to rise!) Other hidden taxes: 1/3 of your medical insurance premiums pays for the uninsured. Part of your fire and car insurance premium (premium tax) pays for insurance companies who go bankrupt. All business taxes are passed through to the consumers. **Based upon UCSB Economic Forecast Report DRAFT COPY PRELIMINARY & TEPJ , ATWE for DISCUSSION PUT-, Y 31 Joseph E. DeLucia OPEN SPACE FINANCING TASK FORCE - MEMBER 1194 Pacific Street, Suite 203 San Luis Obispo, Ca. 93401 (805) 543-1502 May 10, 1996 TO: OPEN SPACE FINANCING TASK FORCE MEMBERS JOHN DUNN, BILL STATLER, KEN HAMPIAN, NEIL HAVLIK I urge you to reconsider the direction the Task Force is electing to proceed regarding the recommendation of establishing an "Assessment District" as the primary financing vehicle for the Open Space project. My personal opinion is that we need to "roll up their sleeves" and develop alternative financing options that would be more broadly acceptable and consistent with the original objectives defined by the City Council. The "Assessment District" approach is NOT ADEQUATELY BROAD BASED. However, it is simple expeditious, and most importantly easier to get "advisory voter consensus" and more difficult to overturn. The job of the task force was not to take the "easy" approach. Many of the task force members are disillusioned and mistaken of how this "tax" is adequately distributed. BELOW ARE JUST TWO LIMITED EXAMPLES: (There are many other concerns) 1. MANY PROPERTY AND/OR BUSINESS OWNERS ARE UNFAIRLY TREATED DUE TO THEIR INABILITY TO VOTE ON THE ASSESSMENT. Many "substantial" property owners have large commercial, industrial, residential, and apartment units which will be subject to this assessment but will not have the ability to "VOTE" on this issue due to the fact that they either live outside of the San Luis Obispo city limits or are corporate/institutional investors. These property owners in many cases will not even be aware of the process due to the fact that they will not be adequately noticed. 2. A POPULAR MISCONCEPTION IS THAT TENANTS/USERS WILL ULTIMATELY PAY AS THE OWNERS PASS ON THIS EXPENSE. Many business owners are subject to leases which clearly specify rental amounts and increases. Many, if not a major portion of these leases are NOT "Net Leases" (wherein the expenses are passed through to the tenant). Therefore, the owners are straddled with this added expense with no benefit or way to recover the cost. Apartment owners rent their units based on "market conditions". The fact that the owner is paying an additional $10 per month does not automatically mean that the rent will go from $ 550 to $ 560 per month. Currently, San Luis Obispo has more demand than supply which is favorable. However, that condition changes significantly based on Cal Poly. Additionally, normal operating expenses for such necessities as water, trash, utilities, maint., etc. take priority over open space. >2 Page Two Open Space Task Force May 10, 1996 I felt compelled to write this letter to the members with the hope that many members share similar view points but are unclear on how to proceed. Last time I looked, we are still part of a democratic society. Our task force is not unanimous on this issue and the city council and public need to be aware of this. The message I heard at the Public Forum, FROM THE PUBLIC, was "NO NEW TAXES". The message was very loud and resounding, not subtle and meek. Yet, rather than us utilizing the array of skills comprised through our task force members and achieve a "creative and visionary" solution, we settled on the assessment concept. We have the opportunity to establish ourselves as the innovator's of a "new" concept for fair and equitable financing of open space, thereby setting an example for other communities. It is no question that this will be hard work, but with the quality of intellect and diversity of opinion inherent in this committee, "the opportunity is NOW". Our committee should look at the fact that our goal is to establish a "long term" , "broad based" program. The fact that we do not meet the "deadline" for getting on the November ballot should not be compromising our objectives. I will be gone for our meeting scheduled May 23rd, so this is my last opportunity to contribute to the process prior to your final recommendation. However, if any members wish to discuss the above comments or advise me of any misunderstandings I may have, please feel free to contact me at the following location through JUNE 2, 1996. Joseph DeLucia c/o Papakea 3543 Lower Honoapiilani Hwy. Unit 302-J Lahaina, Maui Hawaii 96761 (808) 669-4848 Extension 7932 Very truly yours, Joseph E. DeLucia 33 April30, 1996 Penny Rappa, Chair, and Members of the Open Space Financing Task Force City of San Luis Obispo Dear Chairman Rappa and Task Force Members: This is a summary of some observations I made at the public forum your Task Force held last night at the City -County library on open space financing options. First, I want to congratulate the Task Force for its thoughtful work on this important assignment. When a broad based citizen's group can reach consensus on an issue as volatile as this, it shows a willingness of all to consider broad ranging points of view. It appears you have done your work well. Now for my observations and opinions ..... 1. The purpose of the meeting was to share your work and reasoning, present the most promising options and ask for participants' questions, comments and finally a "vote" on a "ballot" so as to get some sense of the options most favored by those in attendance. 2. The "ballot" was flawed and the results should probably be set aside as unreliable for these reasons: (a) The final decision regarding open space financing is a matter to be determined by voters living within the City of San Luis Obispo. (b) Some in attendance Monday night were from outside of the city. They were permitted to "vote" yet no distinction was made on the ballot which would allow your task force to tally the votes in a manner which would demonstrate the difference in feelings between city citizens and non -citizens. 3. I recommend that the Task Force limit its recommendation to the City Council to the Assessment District option for these reasons: (a) It is clear, clean and simple. Are citizens willing to pay for open space protection or not? (b) Both the Utility Users Tax and the Transient Occupancy Tax were adopted by prior City Councils as general purpose taxes to support the General Fund They are not nor should they ever (in my very strong opinion) be designated for specific purposes. There is a continuing belief amongst some members of the motel -hotel industry that the TOT was adopted to support tourism This simply is not the case. However, city councils for a number of years have earmarked some general fiimd moneys for promotion and does page 2 contract with the Chamber of Commerce for such services. Likewise, the Utility Users Tax was not adopted as a tax in support of utilities. Utilities in San Luis Obispo are run in a businesslike manner as "enterprise" operations and are expected to pay for themselves without general fund subsidies. (c) Key to public understanding of the need for taxes and fees is the clear designation of city deficiencies/needs through open hearings required by law before the Planning Commission and the City Council on the Capital Improvements Plan. If additional moneys are required for parks and their furnishings, then those needs should be identified in the CEP and those who desire these types of improvements should lobby before the PC and the Council in order to advance their cause. To include a parks component in the financing of open space will dilute and muddy the base idea of a greenbelt. 4. The meeting illustrated a great misunderstanding of various methods of taxation and who is the taxpayer; I offer some clarifications: (a) Property tax is a "user" tax. The owner of rental residential property often sees him/herself as the "taxpayer." Not so. Yes, the property owner writes the tax payment checks but it is the tenant (user) of the residential unit that pays the tax as a component of his/her rent. Any property owner who fails to include a property tax increment in his/her rental structure is a mighty poor businessperson. (b) In the final down and dirty analysis, property tax is paid only by people residing in a residential unit It doesn't matter whether they be the residence owner or renter. Taxes paid on all other properties be they agriculture, retail commercial, office, industry, etc. are paid by the consumer of the product produced or service rendered on the subject property. (c) The only people who do not pay property taxes are those that are domiciled in a publicly supported or tax exempt institution - examples of which would include Veterans' Homes, prisons, college dormortories, etc. And then there are the homeless. They do not pay property taxes except via the goods and services they may from time to time purchase. 5. I very much like your ideas regarding "majority voter approval" and an "oversight committee." 6. Some clean-up thoughts regarding questions that surfaced during the forum: (a) The Task Force should be clear on what assessment would be made on mobile homes. (b) If the Task Force believes that tourists should be included in the payment process, could it not include a per unit monthly assessment per motel/hotel room much like that proposed for multi -family residential? That would reduce the onus of the TOT. On the other hand, would, could, should motels/hotels be assessed like that proposed for other 55' Ib page 3 commercial properties? 7. What is happening across the street in the County Government Center that might impact on the City's Greenbelt Plan and its financing plan? (a) The County Planning Commission is in the final throes of completing work on an update of the County's Open Space Element of the General Plan now known as the "Agriculture and Open Space Plan." (b) In 1985 the update process came up to the Board of Supervisors for approval. The agriculture community convinced the then Board to give them a greater role in the r rewrite of the Element. Their argument, in simple terms, was that the existing Element impinged to an unacceptable degree on normal agriculture practices and that "open space" should not be the determining factor in decisions effecting ag uses. The Board directed planning staff to work directly with the Agricultural Liaison Board in preparing a rewrite. (c) After years of meetings and discussions, a public hearing draft was prepared and presented. It became quickly evident that the rewrite lacked balance between ag interests and open space requirements required by State law. Staff undertook a second rewrite and the Planning Commission has been holding hearings on this draft for well over a year. (d) The current hearing draft has attempted to balance both ag and open space needs. The PC has completed its hearings on the Ag section and is now in the midst of the Open Space section. Of particular interest to me is the stress that agriculture representatives have placed on the protection of "production agriculture" in SLO County. I think it would be highly desirable for the Task Force to acquaint themselves with the "tentative" decisions that have been taken by the PC on proposed Ag Goals and Ag Policies. Should these tentative decisions hold and be included in the PC's recommendation to the Board and should the Board concur after its public hearings, then there may be a somewhat different feeling amongst land owners who feel strongly about the preservation of production agriculture lands and the means that the city might offer to allow them to keep their lands preserved for that purpose. If ank ou fo consideration of these points K uieth E. Schwartz 2 Buena Vista San Luis Obispo, CA 93405 Copies: Mayor Settle and Councilmembers Roalman, Romero, Smith and Williams 3Co April 28, 1996 Open Space Financing Task Force / City Council, I am outraged by your proposal to confiscate more property and/or utility taxes to pay for "open space" as mentioned in the TT and New Times this past week. You deceptively break down the taxes to a mere $7.08 to $8.74 per month. You conveniently neglect to mention that the property tax is really $104.88 each year ... for ever... and that it is likely a percentage that will be increased each year with our county automatically increased assessment. OK, so the utility tax would be only $84.96 per year ... but you again fail to mention that a property owner who also happens to own a business as we do, will be taxed twice, or $169.92. When you present a tax to be only $749 a month, you paint a completely dishonest picture and you unleash the ill-informed voters who cannot imagine why anyone would object to a $7 tax. As property owners, it amounts to 2 pairs of shoes or four dinners out each year that you force us to give up ... or with the utility tax perhaps it is the shoes, and a couple of dinners, and a couple of movies, and a couple gallons of paint (to keep our house sightly for you, our neighbors) that you propose to steal from us. The. money has to come from somewhere. Multiply those shoes and dinners to come up with that $2 million you want each year and you better believe that those taxes will have an effect on business and sales tax revenues, and will likely worsen the inflationary and recessionary spiral we are already in. Let those who deem the "green belt" as necessary and desirable, pay for it themselves! - Give up this idea of more taxes because there are precious few of us that have a money tree on our property. (And there are those who wonder why there is no "affordable housing" in San Luis Obispo!) Sincerely, Tf -- Lawrence Pennington 761 Grove St. San Luis Obispo, CA 93401 546-0880 37 III Residents for Quality Neighborhoods P.O. Box 12604 • San Luis Obispo, CA 93406 April 22, 1996 S. Open Space Task Force City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 Dear Open Space Task Force, OR 2 519W 1519 We wish to commend the members of the task force for your efforts to preserve natural open space on behalf of the community. After reviewing the preliminary findings, we also appreciate the opportunity to comment specifically on the suggested funding sources for this effort. We agree with the stated goal that no one sector of the community should be singled out to fund the program. As resident owners of homes in San Luis Obispo, we believe that this goal can be better reached by having multiple funding sources, as you suggest. However, we believe that it would be equitable for the focus of these three sources to draw principally from three different sectors of the community. As now proposed, resident homeowners will be asked to heavily fund two of the three sources, an assessment district and utility users tax. Visitors to the community would contribute to the remaining source through a transient occupancy tax, which is projected to create up to 12.5% of the total funding. We do have some questions about the assessment proposal as now written. We note that a thousand square foot, single family home would be assessed more than a thousand square feet of commercial property. We would also note that the proposal states, "assessments are allocated to developed properties only". Since the proposal excludes undeveloped properties, does it follow that developed properties will carry all of the burden? Are undeveloped lands excluded from assessment districts by statute? Will these proposals for assessment districts be perceived as equitable by voters who are resident homeowners? We believe that a more equitable mix of funding sources for resident homeowners might include an assessment district fair to resident homeowners, a transient occupancy tax, and a property transfer tax, instead of a utility users tax. Unlike the utility user tax which would affect assessed resident homeowners a second time, the property transfer tax would not affect resident homeowners who continue to live in the City. It would affect resident homeowners only if they sold their homes. A property transfer tax also has the advantage of broadening the funding base, M all Residents for Quality Neighborhoods P.O. Box 12604 • San Luis Obispo, CA 93406 for it would include nonresidents who are buying and selling property within the city. This funding source also has the potential for creating significant funds if it is in place when large areas are annexed to the city. Why would the City forego this benefit from annexations? As it is the residents of San Luis Obispo who will decide this issue through their votes, we believe that the success of any ballot measure will depend on the perception that it is fair to residents. We hope that our contributions to the proposals early in the process will contribute to a final proposal which will be perceived as being fair to residents, and thus successful. We appreciate the opportunity to contribute to the success of the funding of open space. Sincerely, Larry Allen Batcheldor Secretary 39 March 27 1996 To: Open Space Task Force Members From: Chairperson Penny Rappa As we attempt to reach consensus, I ask you to consider the following: As Chairperson, I have conscientiously facilitated all points of view, knowing full well I had some very strong personal positions on a number of issues. As we move forward today, I ask each of you to consider the following as we formulate our council recommendations: 1. $2 Million dollars annually is a very lofty_ goal. To gather support from various segments of the community we will need to identify both active recreation projects and a very clear open space acquisition program; 2. Knowing political folks fairly well and how they really hate to raise rates for what some might consider pie -in -the -sky ideas, I support an assessment district combined with a General Fund contribution. This w111 allow the Council to use other revenue raising means for high profile budget areas ie; public safety, etc. would bet that there will be a number of other cities raising T.O.T., Utility or whatever to make ends meet. It is always much easier to follow than lead. 3. Non -Financial Thoughts: The Open Space Element needs revision. I believe we are sincere about providing money for "Open Space" not urban projects or programs as identified in the document. We need to emphasize a priority for alternatives with acquisition being the last resort. Our responsibility is to convey to the Council our feelings that this program will not succeed unless they initiate a countywide program. Penny Rappa You asked for 5 recommendations. I don't have any new ideas (I'm a Dole guy) so I put my rec's into the form of agenda items. Hope they help. Suggestions for the Agenda for March 24 meeting We've been condiucting a seminar now for several weeks. Tme to move ahead To start, Madame chairman, please rule that we'll talk about what the city can do, not what the county only can do 1. How much money do we want to raise annually? 15 minute discussion, then pick a number. 2. Allow 30 minutes to restate the pros and cons of schemes requiring a two thirds popular vote, and the pros and cons of schemes requiring council vote only. Then let's pick one. 3. Take another 30 minutes to restate the arguments: Pay as you go or issue debt iinstruments Then let's pick one or the other. 4. Allow 15 minutes. Let's pick a time frame for our recommended program 5 years, 30 years or ? 5. 1 1Is any money obtained to be used oWy for property aquisitions or is it for park development, personnel or what. We need to be clear on this as it's a question sure to asked by the citizens. Many of the other points we've talked about are derivatives of one of the foregoing issues and can be more productively discussed after the above are decided Dave Smith March 18, 1996 41 Joseph F DeLucia Commercial Real Estate Services 1194 Pacific St., Suite 203 San Luis Obispo, Ca. 93401 (805)543-1502 February 28, 1996 Mrs. Penny Rappa Chairperson Open Space Financing Task Force 3993 Hollyhock Way San Luis Obispo, Ca. 93401 RE: Agenda Request Dear Penny, SENT VIA FACSIMILE (805) 544-8852 Several issues have been raised by myself and are of concern with other members of the committee. I would like to request some information and, if appropriate, have our committee initiate a motion for clarification from the City Council. BACKGROUND: Having reviewed in detail the information provided and considering the "Open Space Element" as our primary guide, the following direction is needed in order for us to fulfill our objective relating to financing. 1. Nowhere in the document was there a "definitive" goal in the amount of open space desired to be achieved. The Land Conservancy document apparently identifies approx. 37,000 acres as a possibility. The LC document also indicates that 579% of the land is currently in some form of protection. This is a significant achievement already. In order for us to determine our long term capital requirements for both preservation and maintenance, we need the City's determination on a reasonable goal. 2. The City Staff is aggressively negotiating on several parcels. They indicate that their "marching orders" is to spend the $1,400,000 they have now, to set an example of what the program is achieving. Three things are of concern relating to the $1.4M. A. What has the $100,000 been used for in detail. B. Where is the interest income that should have been building in this account for the benefit of open space. Based on the time frame that the funds were set aside and assuming a reasonably conservative interest rate compounding of 6%, the current balance of the open space fund should be approx. S 1,973,191_ even allowing for the spending of the $100,000 to date. C. Our committee has not fully ascertained whether or not these funds may be instrumental in achieving our long term financing gcals. Page Two Penny Rappa February 28, 1996 Therefore, I would like to suggest the following as a rough outline for a three -fold motion to be presented for the City Council as follows: WHAT IS THE CITY COUNCILS REASONABLE GOAL OF ACHIEVEMENT RELATING TO THE IMPLEMENTATION OF THE OPEN SPACE ELEMENT AS IT RELATES TO EITHER A SPECIFIC PERCENT OR SPECIFIC PROPERTY TYPES? REQUEST THAT THE CITY COUNCIL DIRECT STAFF TO IMMEDIATELY DISCONTINUE NEGOTIATIONS FOR ANY OPEN SPACE ACQUISITIONS UNTIL SUCH TIME AS THE CITY COUNCIL HAS REVIEWED THIS COMMITTEE'S RECOMMENDATIONS AND THE CITY COUNCIL HAS APPROVED A PLAN FOR OPEN SPACE ACQUISITION AND/OR PRESERVATION!!! REQUEST THAT THE CITY COUNCIL CONSIDER REPLENISHING THE OPEN SPACE FUND WITH THE PROCEEDS FROM INVESTMENTS FOR THE PRINCIPAL AMOUNTS OF S 600,000 FROM 1989 AND S 900,000 FROM 1990 THAT OBVIOUSLY HAVE BEEN USED FOR SOME OTHER SOURCES. ALSO REQUEST THAT THE STAFF IMMEDIATELY PLACE THESE FUNDS IN A SEPARATE TRUST ACCOUNT OR SOME FORM OF PROTECTION TO INSURE THAT THESE FUNDS ARE NOT MISAPPROPRIATED IN THE FUTURE. Penny, in addition, I would like to request some time to distribute information regarding the San Juan Capistrano Bond measure and information that I obtained that would have a direct influence on our decision process. JED; ey Very truly yours, Joseph E. DeLucia 43 Section C MATERIALS PREPARED FOR THE TASK FORCE r Cl A il-Vt A rr AM tM f MM L IAIR IN MEMORANDUM May 9, 1996 TO: Open Space Financing Task Force FROM: Bill Statler, Director of Finance SUBJECT: QUALIFICATION OF THE "RIGHT TO VOTE ACT" CONSTITUTIONAL INITIATIVE FOR THE NOVEMBER BALLOT This initiative amending the State constitution has qualified for the November ballot. While this does not directly affect the task force's work to date (the provisions of the Act only become applicable if it is approved by the voters), it will have profound affects on local governments throughout the State if it is adopted. What Are the Impacts of the Initiative if Adopted? The provisions of the initiative are complex and far-reaching. As with other initiatives that address complicated issues, I believe that it will be a long time before all of the issues and ambiguities are addressed in a definitive way if this initiative is adopted. In short, while I would like to give you a clear, concise and definitive analysis of the impacts of this initiative if it is adopted (especially as it might affect the revenue issues before you at this time), this is simply not possible. However, a few facts about the initiative are clear: ■ If approved, it would apply to charter cities. ■ Its impacts would be very broad: it affects taxes, assessments and fees. ■ Of these three areas, the greatest change in current practice would be in the area of assessments. The "rules" for creating assessment districts would be radically altered. The most critical of these changes are: Assessments must be special - they must have a "particular and distinct benefit over and above general benefits conferred on real property located in the district or to the public at large." What does this mean exactly? Who knows .... - When assessments are proposed, a mailing to all affected property owners is required, which will include a ballot. If the number of ballots returned by the pubic hearing date in opposition to the assessment are greater than the number of ballots received in favor of the assessment, no assessment may be imposed. ■ In the wake of the "Guardino" decision, this initiative would have very little impact on taxes for general law cities: general purpose taxes would require majority voter approval, and special taxes would require two thirds voter approval. The primary change if this initiative is adopted is that it would make these provisions applicable to charter cities like the City of San Luis Obispo. What Options Are Available to the Task Fome? There are two basic options: ■ Go forward with your recommendations irrespective of the initiative. All of the recommendations currently under consideration by the Task Force are permissible under existing law. The initiative only affects your recommendations if it is adopted. In short, under this approach, there is no impact if the initiative fails. On the other hand, if the initiative passes, there would still be value in an advisory vote (assuming it is favorable) in providing a basis for the follow-up work that would be necessary in putting together a ftmding program in the "post -right to vote act" environment. ■ Strive to be consistent with the provisions of the initiative. This means crafting the City's ballot measure in such a way that if the initiative passes, the proposed funding source would still be valid. Conceptually, there is a lot of obvious merit to this option; however, the difficulty is that it is not clear at this time how we would do this. As such. if this option is desired, my suggestion is to provide a recommendation to the Council along the following lines: As the Task Force neared completion of its review of open space protection financing options and preparation of its final report to the Council, the "Right to Vote Act" initiative qualified for the November ballot. If this initiative is adopted by the voters, the current legal framework under which the Task Force reached its findings and recommendations would be significantly altered. In responding to this new and perplexing development, the Task Force recommends that the Council strive to draft the ballot measure is such a manner that if the "Right to Vote Act" passes, the new revenue sources would remain legally valid. If this is not possible, then the Task Force recommends that an advisory ballot measure continue to go forward as the best strategy available to us in ultimately establishing a funding source for open space preservation, whether or not the initiative is adopted. This approach would allow the Task Force to complete its "policy advice" work, and leave to the Council and -staff the responsibility for discerning the complexities of the initiative and the legal options available to the City. H:OSTFRTVA MEM 0 277 Granada Drive San Luis Obispo, California 93401-7396 USA J L TELEX II: 910-351-5809, JBL SALU Phone SCIEN IFIC, INC. 5-543-1531 FAX 805-543-1531 A Subsidiary of Gento, Inc. Mar. 20, 1996 To: Penny Rappa (Veil Havlik Bill Stadler Open Space Financing Task Force members From: Lauren Brown RE: Worksheets for analyzing financing options have prepared a set of worksheets to help us crystallize the evaluation of various financing options for the city's funding of an Open Space Protection program. Following is a summary of these worksheets. Page # Title Description 1,2 Ver. C & D These updates of my own cuts. Will contribute later. 3 Assess1 One variation of a Tax Assessment District plan 4 Assess2 Another variation of a Tax Assessment District plan 5 Assess3 Another variation of a Tax Assessment District plan 6 Util Plan for use of Utility Tax 7 TOT Plan using Transient Occupancy Plan 8 PropTrans Plan using Property Transfer Tax 9 Prop Plan using Property Tax 10 GenFund Plan using contributions from the General Fund 11 Trial Worksheet for each person to use to pick and choose among the various options for your own preference. I will have overheads of these sheets available and will have my computer available during the meeting to calculate any particular versions that we as a group would like to examine in more detail. The numbers used in calculations have been checked against Bill Stadler's numbers and hopefully are now accurate. Q? Assess1 Funding Source Target total annual fund-raising goal # of single family residences (SFR) SFR share of annual target # of multi -family residential (MFR) units ratio of MFR charge to SFR charge MFR share of annual target Commercial, office, industrial share tot. S.F. of all com./office/indus._space Assessment District 9750 50.00% 8600 0.75 33.08% 16.92% 8,000,000 $750,000 $1,000,000 $1,250,000 $1,500,000 % of total Annual Revenues from Assessment District ?..? :... as ->.�,•. .,ZJN:: N.vri�'}}}} }):: .? iYi;:3 '.ii?„�.£•;A, Y�ii2„ ",'v:'t- ..Sy C ...F.,+ ....�...:.,� ?...::..:. � ,S?,;: „... }.6id�i, v........ `iiia}?J�', i�?: `.J:•}:-}Y.,'T'S Y' . ... sti tarrrair• t} SFR annual charge`• .......:.i.::.., .......... ::: . $38.46 $51.28 $64.10 $76.92 MFR annual charge $28.85 $38.46 $48.08 $57.69 Business annual share per 10,000 S.F. $158.65 $211.54 $264.42 $317.31 `}?}:A;} �• y )y`z\"`?,?" 1.. „??i?ti�:?%y?�k?:?v jY�yyy,,,£.t����.�.. „�,x y �4�'J,?i,:-.'�4�ii7c,.,.(� {x/,??' ,?}�?}•{►}awl 5 } ?•:L y ???????{,{ ??#: , \, :{}�.4" a,;$ •},}??i??, - \ } S:t% f { ���{�OW r:•' i'j �Y - a:iiG:}}}.,,:,:r SFR annual charge x :i Y.cr}::a::. $34.62 $46.15 $57.69 $69.23 MFR annual charge $25.96 $34.62 $43.27 $51.92 Business annual share per 10,000 S.F. $142.79 $190.38 $237„.98i3 $285.58 V>}.. \+N}}w' ,??':}?'W.i???2????} ????? }?\•:n.;{?? ,?yy}}av?`J�??7.?Y�+.i ,V +} ..•„n,•},qy?Y,?.}}+,• f,,.,Vy„ ,.y{r}i ;}'�\,V,v„»y, }?}-v,,, .>,..ur�7!''.••.'i`'•i:}.,.ti};R:°?????????>i?`i`i`: z'} •:}.:.........::i??}y.h... }Y'{:: vi: a: ,i%.''„ .,?:{:: S,,Yt,`{. (�.,{zi:£. [� �:},. ?;i::: d'.},_$,{i.;; .{!?{2?!{{? {}?:: i~+'- v: •n\:?,- '?Sri "\:SSi3: \-}4}: }S ,�??' :{{-: }}'vC`:':i'?:i::'.%2?•`.;:?": {M1'•?%{.,•.i :Y: n, [/�j�(jp+ ?C?'f : 4� i �#?..::.,..wrr,a.r�r3iY:i.£?{SfTu�� .ri J:��hTSi43�`{Y'}?S??}??St%YiJY}�WJT£\4V}Yr:•:J•}r}r}}AN}h??S}}Wh:}nYr.�.^}}�iSIY>J3}J3.v\.}r`}?SS}ii$}}riTT� SFR annual charge .• $30.77 $41.03 $51.28 $61.54 MFR annual charge $23.08 $30.77 $38.46 $46.15 annual share per 10,000 S.F. $126.92 $169.23 $211.54 $253.85 yBusiness V ./Lj �15 y .......... ;?????i;?;?;!'i .i�bt.. ?v { C; {`mow}, t{.,,, �����,�� v{ MOM ybv-'ti:i::;}}J:}••+,} .,Ti, v`,.'V.,Yi$S$�i}r3}666Y}3`>Y`:.\7rxrr.liv}}}h3$$i3?T$:i••.i•).�iih•k?Yi}i-7T•}::U}::::}:}}: FR]2`}`U�rM%i3rr.. Y SFR annual charge $26.92 $35.90 $44.87 $53.85 MFR annual charge $20.19 $26.92 $33.65 $40.38 Business annual share per 10,000 S.F. $111.06 $148.08 $185.10 $222.12 �"?:•`?}i :�y n' y? �? \:?}n??� ????\ }} ,}?y:x,,:�, ;z}?��?, �?yav},.,vvv..::::..... �?y,xyx}„?}„}xY.?,? •.J„r,xN,vC,+wm?# v }Jx„yv,4` ����� }A\:t•:: ,,,x,??, ?$$ c, ,.nx v.,,v:y(��T7Y ��` ,:;r�Y+M ��-•• {z� �I'�;fY �ry{,(� 1!l�Y 4a)Y:i\Vr #.... �Y. � \,i-�r:}. r^S ryl:%JYw•OU»3\v,�????2 v�i,�.,T:�Q:4:n?'>.� SFR annual charge .. r:.0 :- ... A.Jv'?556R�i t\..:.: T�:::.:}}::--,., .., $23.08 $30.77 $38.46 $46.15 MFR annual charge $17.31 $23.08 $28.85 $34.62 Business annual share per 10,000 S.F. $95.19 $126.92 $158.65 $190.38 ,r, , V y, •: +:.v , '}+F:„+,'? y y:.�,.yx,,.. 'tp,,V }, zi?? z:; „r a 0,o- �r:....... .� '• a::+'r:-:.: SFR annual charge }eiaa{}YNi3ro6YA�•}'»}.:::::;::::.33Y.'�:rJSii?? $19.23 $25.64 $32.05 $38.46 MFR annual charge $14.42 $19.23 $24.04 $28.85 Business annual share per 10,000 S.F. $79.33 $105.77 $132.21 $158.65 v':A'{Ca:}i.{{•} \?{oM,4.,g' V`E . ..:..: ...v.....1, SFR annual charge \ $15.38 $20.51 $25.64 $30.77 MFR annual charge $11.54 $15.38 $19.23 $23.08 Business annual share per 10,000 S.F. $63.46 $84.62 $105.77 $126.92 ti2??..:.{�v` •nvi!v2v:#{-. ::.,?$;.,•.,•:±:'k?i'. LY \h v%?'S••Y}: .?\?r'#{}�''(��,,`�y`��w' .:\v{!:,a ��p1�� v`•.. ` J?: `}`#Y}:,,h,r.\Yi:J{Yri•:?:{•:'}:f',:'i"' ?`.?:? +. �;``}�'',{}v {{i?{�\ ...\v-,vv-�` �.�; ::'ry •#{i /( ...,•.#„•,}%•.w;.•.:v�??:v?::#::::T:--'i,:}:........v ,iA, .�.:'� .?. �S,�i �y:?. Y.:{T:T.?Y�!�.� '"vs�i.>.} Y};i;::i}}}}}::}%;.};•};•}fi:}Y}:.};.}:.}:..}}i.:}}rr::i::ii :?}•?•., SFR annual charge }3�^i"3JSSY:YJ....:.............:..iSJ;}YS',}}.,:.: $11.54 $15.38 $19.23 $23.08 MFR annual charge $8.65 $11.54 $14.42 $17.31 Business annual share per 10,000 S.F. $47.60 $63.46 $79.33 $95.19 SFR annual charge $7.69 $10.26 $12.82 $15.38 MFR annual charge $5.77 $7.69 $9.62 $11.54 Business annual share per 10,000 S.F. $31.73 $42.31 $52.88 $63.46 y z J::., yYyy.Y zy,}:,, ., �z•'•22 ?mYr> ., axz ,.} t .1v� ri .x,,, } ;r}•:. ;x ??:.< t ,,,, -}}?#:- -•,'.{<'?# , .i}a ?r. •,70:v?`:.:;?: #::.}?}cip{ny�4 .•:'i.l!{J•►f}~.,�s.aaa4Y.Y�i r# } :.... .' ... ....::.:•{4 r.•}}}:}:\:::::::::::::::::::::::::SS}}}SSSSSJJY}.•V...Jn+n-J}FiJY�J33}}YS,�`itiSiixw.,v SFRannualcharge ilV•� .. .N- $3.85 $5.13 $6.41 $7.69 MFR annual charge $2.88 $3.85 $4.81 $5.77 Business annual share per 10,000 S.F. $15.87 $21.15 $26.44 $31.73 Page 3 417 Assess2 Funding Source Target total annual fund-raising goal # of single family residences (SFR) SFR share of annual target # of multi -family residential (MFR) units ratio of MFR charge to SFR charge MFR share of annual target Commercial, office, industrial share tot. S.F. of all com./office/indus. space Assessment District 9750 45.00% 8600 0.80 31.75% 23.25% 8,000,000 $750,000 $1,000,000 $1,250,000 $1,500,000 % of total Annual Revenues from Assessment District }F{Ft� SFR annual charge i/tom af{ttt;�itattt, � \2iA�i�:,iavi,:i:}:i{ ala;:i�-. a,tx{riS<:.e.:: $34.62 $46.15 t,a •.:i::..:: $57.69 $69.23 MFR annual charge $27.69 $36.92 $46.15 $55.38 Business annual share per 10,000 S.F. $217.93 $290.58 $363.22 $435.87 � � � y r SFR annual charge $31.15 $41.54 $51.92 $62.31 MFR annual charge $24.92 $33.23 $41.54 $49.85 Business annual share per 10,000 S.F. $196.14 $261.52 $326.90 $392.28 :\'CYa:4;;:;:::�{;.\taws:<\t',,n�.acu .. .��tr\.\?�:•'`.�:,,ti-y�'-•.4;:%;i\:`:\�??,\. SFR annual charge m���tw�vC2:•''\.��.\�Q.>Q��:::<.;.��:E�u.Vx�.�:.;�!:���� $27.69 $36.92 $46.15 $55.38 MFR annual charge $22.15 $29.54 $36.92 $44.31 Business annual share per 10,000 S.F. $174.35 $232.46 $290.58 $348.69 •}y:t•:<atSL}:i::<a;{{a}:•:{it?tijjt;.}}:::t. ti.%••tr •.\iit: t\ 4' .. ram. ...{{{{ ... .v .`%{r fN'•r{.:<.: :.: .......:: ..: <,. ;. ,t, ,x „-:,:,} ; :..a,••: nva•.a:.1-\ w:.:f a •.,\, �}' • {iv. ..; . ,; .{:i::'`F:}.....�y�}►�/�„I.Y�.�{�.. \{� x,.' •ttt ,.,T}, U}t ,y�{,•, as -..:a:}• ,,, , }. } 4'::.y}, t2iir' y� �{}��;`�,a, i� �i:::�:{a�}: ;:{�,�VS]fiv :•}y� i`� �.�� a,8:{��L�RFv. ,a.�l�'�'flX::y .: n: : air}+i.�]S�St�i��T���]:n...n;..-�.-�i�:i}n-}ii:}}............rnn.....r}.n.]]].........::r:n�:::::..:::.... r:.,?i•}i]}i::.'r:.::::::} SFR annual charge $24.23 $32.31 $40.38 $48.46 MFR annual charge $19.38 $25.85 $32.31 $38.77 Business annual share per 10,000 S.F. $152.55 $203.40 $254.25 $305.11 }i` r� A ,I.•\., A ,y� S: {`:' .iE; ��cp��Y :a `.. i1i ,•�'�'?.•. � .:t. �..�:2., ' ��; �V�V0�`a, tti 4i�f!��l},+:;":�.. �,•:.,:,,,.:,�+i,»2'' .':F.....: ,;,::.: ,,,»., M SFR annual charge �•2;�£�#.. $20.77 $27.69 .,�,, 2•`.r••� $34.62 $41.54 MFR annual charge $16.62 $22.15 $27.69 $33.23 Business annual share per 10,000 S.F. $130.76 $174.35 $217.93 $261.52 •... i�'`:` j •.. ,+v �:{{xx{: r{{:{•: - {r{r{{;�r{:x ;.>,•{: ••rv•, .���}�,fa,` , ##: .:z3<#zz€n�z;a�z>�'��a zz?za;z�z�z� •>�zz;zz � ,�.. ��3 , r av:... •, Y }} •xt•.:+:,, }±}.....,,: ,........,,:`v-.... }r. Y}. tT}:•}}}. r�};a Sa]}: ]Y. ]>A:])n V::+] . >r.:]v ]r>r ♦:::: ii}. :........�Y: }}::v: S:L}}::}�. SFR annual charge $17.31 $23.08 $28.85 $34.62 MFR annual charge $13.85 $18.46 $23.08 $27.69 Business annual share per 10,000 S.F. $108.97 $145.29 $181.61 $217.93 „�y}�� �? ,. C> \•. ;:ti. •,i •{�-'.:r'.•,,.'•_.',::\i ii:\v i:}:.ti 4itt; -Sv, . },�Lttt� �aj� �{, `M .• .>:>i �• ;V}:.i$i I* �v}6v {�M.� ���%�j :t 'r {', ••!I.M.M /((�{��y:+}�{}v}j it i,ia,a,a„G�ZGi<�S•n+a:in. ...+,...,. ....::,a,i,t , , , {i a\\K SFR annual charge $13.85 $18.46 $23.08 $27.69 MFR annual charge $11.08 $14.77 $18.46 $22.15 Business annual share per 10,000 S.F. $87.17 $116.23 $145.29 $174.35 ale. SFR annual charge $10.38 $13.85 $17.31 $20.77 MFR annual charge $8.31 $11.08 $13.85 $16.62 Business annual share per 10,000 S.F. $65.38 $87.17 $108.97 $130.76 •�{{;\r} tt}}:;:•}i •}t}•:titi ,\4�}}};.{;`;•hSii{jj},4i.A�{,`,•.i�•.j►}�J:`{�+,.i,'1]T{;v yf�,%��y �a\�Y. �}[►�]� }��/��\„: �j'� -{p}��y, oar's �i2> +' � h' � `222a2. }}...:...}.::,s �. }'�iiii�:/.�+'^ >]t�:...�;itl`� 41�1.�; \� }�fAiV {RV��'�. •"a��K4�,�RY WI�'L"'�'� T ]S�i' �� ?,�� tth 2ttti\\� AaSC$� {. ,�ltt„tt, {?tLS<LLLGLLLLL�< G,.{{�{f,,a,vaa,xtittt,+ni'< SFR annual charge {{\.i•.,,•. naa�::•n,v. Aai.SL ,,,.x?x�xa`.taaL� $6.92 $9.23 �?;'vxa v.Lv.i,K $11.54 $13.85 MFR annual charge $5.54 $7.38 $9.23 $11.08 Business annual share per 10,000 S.F. $43.59 $58.12 $72.64 $87.17 }2'�i?�tt:;tt'.,}},}aw::ia. .,•{.<i:a"•.t,+}�:,-.a-<: n, a}.S..,a,�\y a�i,)',°k�v} : a�: }a•. Yf � , f., f a nx ......t; ...:..{t �,y, ......:. :...:.::�.�:... '#�;,{ {r �t4: ,:tt{o:i{{t.:.CdCt.:{r'•}:{v�ti� ra\{:, �vX {{a:{ <':i{ v ,v .; v..v i N< R2 Gt{{i{:"• •, .: .:,: �J{},�•]+,it{{{f•,?i ' •v�tt?i.`,..v .'{iittya�`.`{ v, a,. a i t:v �„�a �,�.:,v, 'yay[�{ n }}}^+ v.�. a:•:]P]Ph�'ri4}}:��iiSA\\Einv:JOJGY}]XGT):).VM�[�{������iYri•: t t,lV3JA}.� ..., � ���\�w':L���IIKY ..\\r};wrY v:'..}Sh,T} „ \` •y<}M'++.: }. r... �. � ' " r�rxr...,;... :', f ..r ...ti .f ^ ,�yF {]�� ]V � ..... ... ...... }h YJS>� �.::•�,,...... tiG SFR annual charge $3.46 $4.62 $5.77 $6.92 MFR annual charge $2.77 $3.69 $4.62 $5.54 Business annual share per 10,000 S.F. $21.79 $29.06 $36.32 $43.59 Page 4 49 Assess3 Funding Source Target total annual fund-raising goal # of single family residences (SFR) SFR share of annual target # of multi -family residential (MFR) units ratio of MFR charge to SFR charge MFR share of annual target Commercial, office, industrial share tot. S.F. of all com./officefindus. space Assessment District 9750 40.00%1 8600 1.00 35.28% 24.72% 8,000,000 $750,000 $1,000,000 $1,250,000 $1,500,000 % of total Annual Revenues from Assessment District ....;.. ,+� ...... r a•. } y»,>Y � � ` ` 4`'S`\ `ENkk@`, }}kk}:t�Y>- }¢EEy; y ...•��� ,E.,,�? , �.....,E..a •{: ,>..}?-„ ., a ., - ;: -a ,;.} MI! {'f,•i!:}kN.-•YIJi�•y??}CFI,if YY,t 'Eik }�.'` `., S` `CkiEkk,i '- Y?:,t-t„+.,: �L,:�k \k,\ ,`i�S}k'+k E> t,\', k .�'k• SFR annual charge vt„t.a. ♦ ,t ,t. ta' $30.77 •:.a+t•.,:. .a't>ht, $41.03 .it.M $51.28 ,x.,,,:: .• $61.54 MFR annual charge $30.77 $41.03 $51.28 $61.54 Business annualshare per 10,000 S.F. $231.73 $308.97 $386.22 $463.46 ..'':•.•J.:>,::.vrk'`�'M1'',•'•w..,':ist���r'J.f�S��'r':�:';psi>?'.+.::t::r:,t-r:s-x>:r>aai: �iJrJi�:>is>�sJ»���.�'.+�+.<s3s>.e:s'Ss!6iiisuii..»»�-a75sss.,,E..' SFR annual charge $27.69 $36.92 $46.15 $55.38 MFR annual charge $27.69 $36.92 $46.15 $55.38 Business annual share per 10,000 S.F. $208.56 $278.08 $347.60 $417.12 � ��3t,�,,,�.,i.,.CC�{�}r��fi�h�y`yJ�,�.y,�Lj:2Y{�Cu�@i\\a '7t�,•��{ti{{,t}'{\YYL}h ' SFR annual charge ata a.A�2,AA\ $24.62 {,x'�+,♦l a' $32.82 .i.,lv: ht„{F:.,-.�5.,{kYYia.ii: $41.03 h,\{�:,:aA $49.23 MFR annual charge $24.62 $32.82 $41.03 $49.23 Business annual share per 10,000 S.F. $185.38 $247.18 $308.97 $370.77 #i ' }{}{$ s{{'#:::•'Ac+''y ,`, , ,:.c , ,fF,' f .{ ♦ ��lG + k n� yn3•.ry..•..,•��• +f$'i'itiV. }.�S�. rY\r. �J. ... ry:.1} ,�•-r ..v:.i::..........:::::: A. SFR annual charge $21.54 $28.72 $35.90 $43.08 MFR annual charge $21.54 $28.72 $35.90 $43.08 Business annual share per 10,000 S.F. $162.21 $216.28 $270.35 $324.42 } , Sri v..\T• .y.ti{vCt+: t-:,. t+trtt,v t't+.x>.•'22:•::•ti't\\'•Y<'n. h{L{KL :.YS�MM. E.^•:.:::::,�,,,��AMv.:.+x axat}>}E}}tin�l{•:{•:>:kkkk•,.kxx.,a.,.....n....-,..,i..,t�.x.,,......C�.,x...::: WON [M«K' ::::........ /�/� (j .................. SFR annual charge $18.46 $24.62 $30.77 $36.92 MFR annual charge $18.46 $24.62 $30.77 $36.92 Business annual share per 10,000 S.F. $139.04 $185.38 $231.73 $278.08 50% $37`000 $SDO Ot3tl hhh.�, Q r SFR annual charge $15.38 $20.51 $25.64 $30.77 MFR annual charge $15.38 $20.51 $25.64 $30.77 Business annual share per 10,000 S.F. $115.87 $154.49 $193.11 $231.73 :� 'i`kkk2k k;3„kk..:kr..., �^, y,,�E •' ,E }`•.,{�•.•'.{i{. ':k:J .. :1,141 ��{s;�}} ��k�<+k,�.�Sk$^23tkhk��Ci.......,-.� ..: aY'{y� /j :...Yil. �? ni h��3>i•. �MYt PP �n .::::. :.: ,.. ....,..J•r••:..:.,:.,,:: ,...: .,,.; ■a� �y�{��.?E`++'kss. } �ti,,, �!R•�M.W.•kiii?.:i��Y7 ��.:,.: .......... ,.t,�t{„+c-:-:->r�-.'+'�t2�. SFR annual charge ati�\�k+•. :: $12.31 .:..',-r:•.,•.,•-�:�!v $16.41 $20.51 $24.62 MFR annual charge $12.31 $16.41 $20.51 $24.62 Business annual share per 10,000 S.F. $92.69 $123.59 $154.49 $185.38 �� :y.: v. st000 .. .. ... inw. SFR annual charge 4xhn....... ...:..:�h•:v: i::ii?: $9.23 r.'.yh {vr. x::.=y.:....... $12.31 $15.38 $18.46 MFR annual charge $9.23 $12.31 $15.38 $18.46 Business annual share per 10,000 S.F. $69.52 $92.69 $115.87 $139.04 t{C.}h^F.`• ,fit .+ ,•yi�.. �\14k,Ck _...•y: >>h��\y ,,�-jj��.��ll.r!a > "Sk`4y�ksC,\\}:.10 { `{,yr'-.::»,•. �txY�i, . .. ....:.. ......... ......... „»„h SFR annual charge {{tC,C{,',"L�A\ $6.15 $8.21 $10.26 $12.31 MFR annual charge $6.15 $8.21 $10.26 $12.31 Business annual share per 10,000 S.F. $46.35 $61.79 $77.24 $92.69 ' i $$jj{{' ..{,i<: i:::::{:i?•';]::.�+. ,:r$� a';;��{r:$ �5{{'yri' i:: •{tiLLrx.....4 .{{{rtn:{UL{:,.... ��3>•, '`tit "L�y,y < <s2 k {y<•. {`:.;..?zzs{„ �s r . ,+^4 \k`: tkskkyt.x ::;c�:s:}}: ;.��.`,��� . ,>kr JjQ? > { �iLL .:.\\,.:k $k�'.k,�•$S))5�.>j»?>.t7,ht'ishYr��.,L'm+>'�Oh�$:S]tOJ3:JJ.-rhv\-T.}»yrrrh»W,S}>r�>Fi:��.Y�v:. hl:.�h-. :. Div .-0:v>i,,,W„- .::::::..... . .: >rSr:h n�•x>rr r SFR annual charge $3.08 $4.10 $5.13 $6.15 MFR annual charge $3.08 $4.10 $5.13 $6.15 Business annual share per 10,000 S.F. $23.17 $30.90 $38.62 $46.35 Page 5 60 Uti| Funding Source Utility Users Tax Target total annual fund-raising goal $750'000 $1,000,000 $1.250,0�00 $1,500,000 Current total utility billing base $56.500.000 Current tax rate 5.0096 Typical residential monthly utility bill $250 Typical business monthly utility bill $10.000 Rough assumption is that this tax is distributed 70%130% between residentiallbusinesses Y6mftotal Annual Revenues from Utility Tax typical homeowner monthly share $3.32 $4.42 $5.53 $6.64 typical b i h $13274 $17699 $221.24 $36549 typical business monthly share $119.47 $169.28 $109.12 $238.94 typical homeowner monthly share $2.65 $3.54 $4'42 $5.31 typical business nth| h $108 1S $141 S8 $17698 $21339 typical homeowner monthly share $1.89 $2.65 $3.32 $3.98 typical business monthly share $79.65 $106.19 $13274 $159.29 HIM MIAMI typical bi th| h u6637 $8850 $11062 $13274 typical business monthly share $53.10 $70.80 $88.60 $106.19 typical homeowner monthly share $1]00 $1.33 $1]66 $1.99 typical business monthly share $26.55 $3 TOT Funding Source Transient Occupancy Tax (TOT) Target total annual fund- raising goal $750,000 $1,000,000 $1,250,000 $1,500,000 Current total billing base $25,318,000 Current tax rate 10°/a Current revenue $2,531,800 Assumed average room rate $75 % of total Annual Revenues from TOT : -.} :...,..:.;....,»r:.:.,:.."`�:.,�•:;•:t•}:Y'r}'k�>�5f:19,#r. •, }�,,.3..�,,()�i��.,�.4►:i!��Uc`��:'�YY'{`{' naa3t.,..:.4'.,;;,:.;;.;�\t};.,,,,, ,;• .,. �'CY,w'•;..`.•t..: ♦ tS, t;>:@:{?} :}:•Yi:{'}Y1:•::; 4tJ•�4'4F�''}:.YT 5>54}T.... .... •r�::?S. i.: }::'i}: t.-r:?2fi.Rai♦`iar^"`ri rM1A3S .w:}». v::ix aos }}r }:x•:}: >} ..,�:;,}.�in\•.:,w. vr::w ..r» w, w}:aua. ♦.... :i::»-ao�:• } Daily visitor share $2.22 $2.96 $3.70 $4.44 III .. , �t..: i;i •;. t: `�}',}�• },.,3...}.:'..:;, a. , .: ' $'}EY{Y{..,:"{,.,,:,.._+M1#, E�YY�Y'}•,``;Y`.`..,..£;\;+t\\?+"ti�i ",v ' .� ♦ �}t • { ; ,44' � 2, {�2"'�, } a , ,»aaa',aa,,,,,,,,,,,,,,, •:. i`?«zY#z ^'' }�\�a}}�:z�::#z t,i;;� ;,»»,}t #,C#,; " "�o. 'a :�.\t2;'a Daily visitor share $2.00 $2.67 $3.33 $4.00 uy {.i:.� } ,�}??33?}:3{:;.•`••`•###iii##:?�{•`•{:E:S{`i:ii.�._I ~� •:.�.�?,.�ll'��tF;a .Q.��'•'��:fi,�.: .,{.`>,} �:, #{`r..-i•'♦♦;k}:}:\a:!::}a;{: :.: <E;{::.:.a,::•:: •::: •..{. k ,..'.i k:...:,,..,..tr7>.:.:.::}: 34;� .,.n,. �:... :# xt{..\,..�., •a, . }?x„}, ,iiv: i?,;..\.., ..,i •}{j,>tkky::; tt ::v�:2 3.�..},. ,.t :22:. : �fr�s.�.�::�.�....:::.....:::::::::�io? c-' ✓.w....�nr»c`s.\��.>.»...�?S�}:. - • s�:T:::.:.:.vt,?�2:3r>� `u?:. 3./.,•:::::.{Y, Daily visitor share $1.78 $2.37 $2.96 $3.55 .::'i,Y^;,?�'2•:ak`}��?�{ };» , }. ?} ,y» \+ } , »y .. ,a,v,i^Qi}y}, ,,...,..» ;y :� ....} r'.Y vvfa•\. ,? VY,.',•„?, ,} ,} »2 '.:?:;iir»,t:i..j}�Fi}�#Y ?�tr r }. Sjt {{:iit�a. C, '{yj it yf��y% sy�`w' t}�.} 1} tr�.���(.j} {; .♦. {� `}�ki M1,2Y{ SSS ::£ y •. {#L,,.,}fast.'...aia�..-.a..aav$::::: j}+�Yi . # , Y.IM��1�Y-�i':?YYYk}�f:`��.T.;T.�2j }. ' #} •.: 1 „f�}T ,.�,.,.. 3. . •_•_t#`{?;;K.ti„•.?�,.:.2::;'S??£tss{�ij���#:.Y#2.-:t}}:.:{i{5.:-.".�4xi•:\-.,,. +ii;::. .t.$.:.c.. �� . },t{;, \.,�\;},•`; ty :`i Daily visitor share $1.56 $2.07 $2.59 $3.11 ,,xt, .. {;, +1,`Y;t♦4.,,}:;<.} yr m::;:.»♦ . ,.,`�. j, M Daily visitor share $1.33 $1.78 $2.22 $2.67 }}}{t Yk'::f';';a •>?}. E? E Y;•sati��E•�k}r>Y+}t .,,}„ YE arwa`. }s;} } ` > ,}� ` `t �EE Y. » 0 0 » {32 t,..E Y l }� .■sue{ }� }�< ) 1 j�t�>t {.yk:}:Y,,`: r :. •{Yi { WC { f {{Y ^,tA.:{{};; i{ Vl ( , _ 'PY < }{K YJY;v, 2 ;`�.k+:}:k Y, 3 , � •E♦•.. 4a##`2Y YY #:'���`,}\;;f}}?}?i�? ,. S .. ♦ ak t }y�.•}:?: }... \:,lkfi• . �fY'tk<i1;i; : {. '+.}: �j�^t�j. f;{. .fi r?j} •'; i'::i?: :;<; +, - I .. i'. -'f3# :'}{'}+��•is�'y.Qd}2iEY2;,i`}+a;�K;iiV• :,♦`�C„'tEYtvahaaw.'i,.�Ea<aYata�ii» �t•...,:}Y##at{#„YYk#{#ua,{o,{n}v.::::.-. ..:. •L#w�tYXY,t 4», \, \,01\^0,`Y\\2C»`2a»»»{»v»»i Daily visitor share $1.11 $1.48 $1.85 $2.22 •;C:itjjiji{i{.,,...;.;t;ij `.'S:;t::. ;<{i;t?;:tt \; t::'t;:t; :.v{.w{{{{{i{tt.:{t{t{c;:<;..: {:{{ri;{•{.••{•.; :•<. N,{..,j{{t,�.<{:.: .:,.:•{: :�..... :::. .•;� � k, <`##:.: Y ...};}.;���.::?z::>: ppL� ,�0�;�19tIE€ <<�� .�4�:,�t� t~1i3>#���: .•..w.``Etc.}.:�3i:<:•.:{:.;,}'i :.k. .k..;.. t..:::':: t;k't?: t:Y,:.:;::: .: {•::::. , f}t a'a:}:},.: ..,}}�ti:-i::�;; ;•.•.; itiY#:#; ?•':; 1 �4 r3°t°..i.�} '.: isSSZ;4���S;�w�.}�z,��i��z�i. r��•^::t�o����}kv.»t,o.si,�S?}?:».....»....:..:......�.�. 3sirir��>xa:•j}�": �2ir':}�v' Daily visitor share $0.89 $1.18 $1.48 $1.78 •'.}.A»:^}}»;.,};,}}Y`?;,»;".>}.}.,;E";E;}}; , >E}}Y,2EY:,_,_. �" <'+'\,�},...,,, 2, .,, rya. ,}}•{.:.»,},»},::. ,; ,Y>S.,YtE:•?c :}?2\,....s,f,;.SS:.; ?}:•yt: OM. ';;:::::;, ,•{„'.• ♦['•.>�';y?t�,.,;.i{2it::,•?,}:.}�,v,.•.:,a �� a�kY ' �t5�: `2; �{ -: s< �.:�4 �,N\•�o.:t � a��ilo•' { tyE�kt � �� ;•.��,w,�»\a",,,,,,�oiY2,`StYEEY..;i:'+:#,`}?kwY�i:##�:#;K �##t;±K,#�t,kk2kz<♦:'EY,.»at„E$c�•t\YtY�.t•..,,.,.,t#`f�t�.,`fiYY�.i!i,�\\tta< Daily visitor share $0.67 $0.89 $1.11 $1.33 `itt{{a,�{v t{3,t<�,a:�t �{tt�<titjzstaa{t{tttu{ N.: { a€utt3it}::••.:.::.:: • . v:: : N•;:.•.:;::.}..;r:;„• • ,:,.�{�{y,.. "��: �{;}{;??�w.}•y#'::z;i��i��}'?}}};�Y<i;:?%#??���?��;� •i+�''" {�� a,3<<..�:.:i�� .��1(��: ? J�`�V�' �1,,v �"'S►VrlY; ���} :.>, }Yk}:.�::Y{#} �}:: j: r•.Y�.\\`„•�Z.:;\t;Y't, \',`?;\ , ##, Ya.LS 2: } ,}f i}t#E•.' � 2?Y `#�t♦k i} # i?: t{;Y2`}Z`}:iY,:, L•2 r 1 4j� �j 3gyy.��, f� }4;k},... � .?t� E2Y } }> : ' Y' t ,�:.+}�,,, , }�{.,.•.`,y�; ,�,,��•• ,y�`R,`}�}�5.�.'..i...�.✓,r��2�:�.�7X:5�S>�:•:S���S:jfiiiii�:iiir�.+\'r♦.`*n{} \i:\$�57.• }.Gt.»::3:}a ,?>�}},��#i:FF.;�'`5?}i:. }" ����}5i�i; iSi}}�: •i�a���'`Y Daily visitor share $0.44 $0.59 $0.74 $0.89 :} ,fit•;{•};•>:.E.,;.,,,.}}„Y,.Yv-,.},a,}»>�?> » r �g•,Y ,a Y• :,}}i,` wL. ,}r• . �• �.,4 a. ,� ,r}>.,,,,}•.a;.,a}} ,}, ,}?2 }::}``. ?{::E}?<j:G ':jiii'•3i�»itiii;::,{iiii iS,'i?ii?33.{:i::::: , : y {..i:: . } }::2t#' :::2 tjiiij:iiiij}«::ii:i;�%;:r i ::t• `f{tj ??ii,:.� 1♦.:»:::. .,� , »� •. .:>.:.... }: IN {::. Y fir} y� ;:{i?>:• } �{ i{{:{:}{i$;{#{i Qom'-.{}�,»:::� �•}0 �.,Y`Ja4t:+.\h 'C '4�'i���i��'h�•�i 7?5���'#E'<' < �' iE#� F`.�. #�'�} {'data'-'':v':<<:iEF:;�� +F,���#i.`'' c` ��yYrE.i.+4i'�*'`�3�; z}} A ,-:-- t,\•,::tt•:.it ;•.,•. �:.{,.,„#::.,t•.tt t»! -� tY#aiY„2t {#:{{YY4: i# iit; ... A„♦v„, i, Y, wt„i a• 't}:vat, Daily visitor share $0.22 $0.30 $0.37 $0.44 Page 7 52 PropTrans % of total Annual Revenues from Property Tax $1,091 $1,382 $1,727 $988 $1,244 $1,555 $1,866 $884 $1,106 $1,382 $1 M-61m Funding Source Property Transfer Tax Target total annual fund-raising goal $750,000 $1,000,000 $1,250,000 $1,500,000 Current tax rate per $1000 $1.10 1994-5 revenues $79,600 Total value property transferred in 1994-5 $72,363,636 Following table assumes same total transfer valuation as 1994-5 Note: city would lose its share of the existing $1.10 tax rate if it sets its own rate Therefore, the incremental tax rate would have to be increased by $.55 to maintain current revenue stream Incremental tax per $100,000 valuation Incremental tax per $100,000 valuation �i�ar�me �� �rinrI x•:; � • � � Incremental tax per $100,000 valuation M. Ih�i'iii�+tt#<# annul tax rats nec ry Incremental tax Der $100.000 valuation Incremental tax per $100,000 valuation $677 $829 $1,036 $1,244 �.: � yt::?''�: � K .� � � : •:t'� tip: aV�r?!l�•i� �: •, >"'... ���+?���:? . a'si=�:��.<t#: x]wy\t�.:;t:<:ttj:#;fin??Ei.`::; �a.:::�,..,#� . ti' . ��.�'+ ��.;;z«�?4}'f . }�}}� 5'` . ��.; : hj, t>2a�zz,. ,. �}, , � : �' } ,,,:}•:.,},}�}$#i . }�. �..?� '+jr�dd.37[:�7)�.�yt •i:ljj��jf ?��yy j!��:; •`:. i???}'t+'�}?.,}}�i •'. }{{� �t\${t#{ Y:+4 {}iY: ???Y} } }j�, �+#:/•#'�.. ,>'} , 'A Incremental:F,'N... ..}.i'.i.!i;:�.. l+;7!!..}!G.0 ..: �::} .: .5. .,; n}„:^., .;.» .. ,. t•`\ y } .{„�•. } <��.' , 't' � ' •i� �,+��lQ 1t}>)#'>}'::2t>•.>, •:- i• :..<}}:;., :..?.. ,t:.��e���t . , t ,.;}} ��\:,\� ;t���•'; �+y# 1 �.\y �5� "i if `'2>�•„ �. ,,t}�. .}}. . tz;;% :}'� `: }.#:� \. •: ;;`.:�•`,;,+•\a>.; .t.}., ? a.\kU.. . : {..;,'{'• :}:. :tiY�+�}-, a ' .,t##<}�2. N?' :23},2i::# }� t< #z #z r••:r; zap.}.#:,.z:, z', :.z:.„ �«<•: z..�• , „•. a -., ,y * y,� � y .�.:#}}� ,z- � t�'2�)'\v �:zi3i37�:.t}.;?>`• .{ ... �:} zz:�2#� ?^z• •�>;'�• '1�.2 f'i�i��wi.Pr1.�l,'•�#�v.'4��4:.�,���'{��:;��i�\�tza:::z?'w}"'c��mCi�.�'tii�>�.n��i>.xo->*#,•tit,zit< �zz�`cCasta�z22�,c,ttk�{,fti..�.����f�a E���R,2i2,,,t�.ER•c�\„ Incremental tax per $100,000 valuation $573 $691 $864 $1,036 Incremental tax per $100,000 valuation Incremental tax per $100,000 valuation INi •is3# ••fs { #y� Incremental tax per $100,000 valuation Inaemental annual t'i n Sdil = Adj#3sted incr mental tax rate Incremental tax per S100,000 valuation $470 $553 $691 $829 wuli�•rtf. #)bf#taFF,'�,;3^:#cu.4zzb` $366 $415 $518 $622 $262 $276 $345 $415 $159 $138 $173 $207 Page 8 53 Prop Funding Source Property Tax Target total annual fund-raising goal $750,000 $1,000,000 $1,250,000 $1,500,000 Current total assessed valuation $2,484,000,000 Current tax rate 1 % Current revenue (very little to SLO city) $24,840,000 Monthly tax per $100,000 valuation Yearly tax per $100,000 valuation Monthly tax per $100,006 valuation Yearly tax per $100,000 valuation Monthly tax per $100,000 valuation Yearly tax per $100,000 valuation ?»{- {a::h •-., \v, +„Y., ri, an „ r•. :v.:\, {v,; n. V-:."x\ Monthly tax tax per $100,000 valuation Yearly tax per $100,000 valuation :? Monthly tax per $100,000 valuation Yearly tax per $100,000 valuation Monthly tax per $100,000 valuation Yearly tax per $100,000 valuation mk.>M»�x.{.}}}??i,??} ??;????i;>i>°` ?%�'•'•i <ii ♦P?`?r Y?}i�i: �e «##::: `.` f}it::3;:f:#i:i• :>::?: <.:'t#}. i>riii±:#??:a.:'#,..;+{.s:ti$?}2? Monthly tax per $100,000 valuation Yearly tax per $100,000 valuation NEON 1111 MCI Monthly tax per $100,000 valuation Yearly tax per $100,000 valuation `?x ii�:z?Y??i`�Yk?::ikkn?>t•;;;� k;x ii4��iz��,; k `r.:` >» :i. Monthly tax per $100,000 valuation Yearly tax per $100,000 valuation �} Monthly tax per $100,000 valuation Yearly tax per $100,000 valuation % of total Annual Revenues from Property Tax 00 $2.52 $3.35 $4.19 $5.03 $30.19 $40.26 $50.32 $60.39 \�y•, �+� ai� }� } )$ $ $2.26 $3.02 $3.77 $4.53 $27.17 $36.23 $45.29 $54.35 s.NO $2.01 $2.68 $3.35 $4.03 $24.15 $32.21 $40.26 $48.31 }aw,A Y{ VY{\ �♦���j] \yf`G}tom ■a�� '+yam + n } ` ii... ( zzz#i ��Y. • � M f! $1.76 $2.35 $2.94 $3.52 $21.14}» $28.18 $35.23 $42.27 NOR $1.51 $2.01 $2.52 $3.02 $18.12 $24.15 $30.19 $36.�231 rr� J. ♦ {. IJ •ii #4: c J� $1.26 $1.68 $2.10 $2.52 $15.10 $20.13 $25.16 $30.19 i r} ist3i'si#i Y,k < ,{,G+�.,..•k,kY<;{#;?k\`,,..{�,tkiz7•oY#�##kik♦o�<a«,,,+nc $1.01 $1.34 $1.68 $2.01 $12.08 $16.10 $20.13 $24.15 �. :• a:....}»:. psi. .:::... ..}.... $0.75 $1.01 $1.26 $1.51 $9.06 $12.08 $15.10 $18.12 r?•A.+F.•.v� V M1 a '•?kkkkkYkkk?... }„ :,♦,<V,,,,hv\-.m,#,AA',»»,±,K♦ A♦\,+iGi��{{ytaa,k{v,v,-0�i♦\\4VV< $0.50 $0.67 $0.84 $1.01 $6.04 $8.05 $10.06 $12.08 • aa,{,<#.< it♦<r,♦{t:..,{:::-.,,-.,,,,,,::,,.,a..,., \ {.a 't<i{::aG,G.G,♦<♦,G.-:�{.,< $0.25 $0.34 $0.42 $0.50 $3.02 $4.03 $5.03 $6.04 Page 9 GenFund Funding Source General Fund Revenues (take share of existing revenues) Target total annual fund-raising goal $750,000 $1,000,000 $1,250,000 $1,500,000 Current annual operating budget for SLO $20,000,000 % of total Annual Revenues from TOT ;.�:\ tk� KtE., ;�: '� t�4F ,::,a„ �< t 22�2 itii, � 'y' `Sr;:i:$@2,,,, tit \„�, a; 3„ 2,\\: �,•.,,,�{,ti iv22 .{.,t�a;.,,��;k,: ,tA,v`:, Percentage of normal operating budget 3.75% 5.00% 6.25% 7.50% Percentage of normal operating budget 3.38% 4.50% 5.63% 6.75% '{jLYK;{�{{{t:' K{{{ttn'?{?i�+'-•+. v�>� y�•:y •.,•�{;t {,t-••K r•{ %.•{' .. {�• ::{�::{: {:. Y. {r:{ Ytt�}••t.•••t;••::.::•tti •:{::....::f { ?;' '\\ ^:{ .. r{;':{;`�.�::•.`:.'. �,': ` tx t�{.{}t{;: ' Vic, ,{ ',J..�\.,°S<•.�'�{i;;•; �'ii `:•{�ji�j-'�• $t�i ■w��(ys>(� ij t • •J� �w■{�+j :}}}:2; jv� ` "£��z, ta`e:x.,,\�,�,�`z�,ziiz�zi�z�atz'��'uzz�zztz<;:� ��^zia�{t�:1\��:;,�u{,,5:{{zzcz.� tz {,..,,; � #»„ , ,•�z�t �:tF '� � �' �: Percentage of normal operating budget 3.00% 4.00% 5.000/6 6.00% Percentage of normal of normal operati 2.25% 3.00% 3.75% 4.50% 1.88% 2.50% 3.13% 3.75% Percentage of normal operating budget 1.50% 2.00% 2.50% 3.00% •:{K Y ' t{t{Ky$�\:4{{$$ :' { Ytt{d!ft,\ K:.x ::. r,iv`ti{p.` 'N rr N't{ '4' r •{{:: xr.::Y{ :.::;xzi:<zziizzt`''.*z�`''�''tz�'z,�{•.,,,.,,,{»a�»�zzw3ai:;z�w„»,,.,�:,..:,»�,,,,�:!i�»•z.�� ,»{��Cz�z,az„�,»»z,.:� Percentage of normal operating budget 1.13% 1.50% 1.88% 2.25% i •: {}: •{. •{: » v+K, .rr{� ry it :rs>r»:+;•i: ��C'{�i,:•r`k `kr:'•`-'•»�'f.,.....,,.... •�-.i:{: :•t�i 4`�` ;fiYY`.., iti•,`.}�• ,C \.�vc+,YS:`.ic22'£.^tk "S'2C� '{,' ,. .:., ,»»,»,,,,{`.,tivL)�,•i•.,?{i;` aa'XQ'Y:.::. 3.{;; MAN - ------- -- -----------\ at<,• Z2 ,{.\.t.,a. <tC\2 •{\•A,t.,,\, Percentage of normal operating budget 0.75% 1.00% 1.25% 1.50% . ... ............................................................... Percentage of normal operating budget 0.38% 0.50% 0.63% 0.75% Page 10 .f Trial Trial Worksheet for Open Space Revenues from Various Sources Target total annual fund-raising goal $750,000 $1,000,000 $1,250,000 $1,500,000 Trial # 1 Revenue Source % of Total Revenues from each Source Tax Assessment District 0 D O D O Utility Tax 0 0 0 Property Transfer Tax 0 0 Q 0 Property Tax 0 0 0 0 General Fund 0 0 0 0 Trial # 2 Revenue Source % of Total Revenues from each Source Tax Assessment District 0 �� Utility Tax 0 0 0 0 Property Transfer Tax 0 0 0 0 Property Tax 0 Q 0 General Fund Trial # 2 Revenue Source % of Total Revenues from each Source Tax Assessment District 0 D O D O Utility Tax 0 D O D O Property Transfer Tax 0 D O D O Property Tax 0 D O D O General Fund 0 D O D O Page 11 sG MEMORANDUM March 18, 1996 TO: Open Space Financing Task Force FROM: Bill Statler, Director of Finance W� SUBJECT: REQUESTED INFORMATION FROM MARCH 14 MEETING Transient Occupancy Tax (TOT) Revenue Trends The following summarizes the gross receipts and room data that underlies our TOT revenues. By focusing on changes in this information rather than on actual revenues themselves, we can look at how the revenue base is performing without distortions due increases in the tax rate. TOT Revenue Base: Percent Chances Last Ten Years 1984-85 1985 -86 1986-87 1987-88 1988-89 1989-90 1990 - 91 1991-92 1992-93 1993 - 94 1994-95 Rooms' Sales Number No. Change % Change Amount % Change 1,267 - - - - 13,556,033 - - 1,267 0 0.0% 13,389,533 -1.2% 1,600 333 26.3% 15,791,450 17.9% 1,600 0 0.0% 19,639,650 24.4% 1,787 187 11.7% 21,943,967 11.7% 1,787 0 0.0% 23,796,133 8.4% 1,849 62 3.5% 24,137,033 1.4% 1,849 0 0.0% 24,192,456 0.2% 1,754 (95 -5.1% 24,599,424 1.7% 1,754 0 0.0% 24,150,752 -1.8% 1,754 0 0.0% 24,620,486 1. Average annual number —actual number varies from month to month The task force also requested information regarding average room rates and occupancy rates. The City does not collect this information, and to the best of our knowledge, neither does anyone else. We have asked the Visitors and Conference Bureau (VCB) for any information they may have on this, and they informed us that while they would like this information themselves, and are currently in the process of performing a survey to capture this information on a "snap shot" basis, they do not collect or maintain this data on a regular basis. Assessed Value The City's assessed value for 1995-96 is $2.484 billion. This means that under the "1%" of value maximum allowed under Proposition 13 for general purposes, about $24.8 million is generated annually from property tax related revenues in San Luis Obipso. A very small percentage of this comes to the City; most of this revenue is allocated to schools and to the County. A separate rate for general obligation bonded indebtedness of about 4% of the general purpose rate — or about $80 per year ($6.67 per month) for a home with an assessed value of $200,000 — would raise about $1 million annually. This amount would be reduced somewhat by County tax collection fees allowed under SB 2557 of about 2.3% of the amount collected. H:OS=OT .57 O O O I F-- cl co .0.-N T fn to II n 0 ro �' >. o 0 >,I O v co lco co ,- C\j T v-: O - N N cis cz m ca O A >+ �-- Z = Z E co0 0 Q W a� W —i N W C? N zt 0 W ci N T N :3 c V) � V) rL U) N m a Z 0 u� N T U� za oC aZ N O CC 0 d 4 CV N InN ca"(n.' cn cn cz a�' cn� m Cid • � 00 0) � V cc 00 pZ Z :3 mgco 0 o coop IL c N of v ,- L cZ U) v a) r 3 0 CV CD N O C U c� N = m U C U U p U > U � n. a C. c +'- N co N (�0 O CA p H D m .+ p .� O E j }— CO w ?, N a� cz c a� n) W c 0 U a C cC C d E a2 w m y a c 0 E w a o 0 0 ca A U � cl •y d r- E c : co n p a� 0. 0 Z 0 •C o E E o0 U c O c90. J d � o c >` as U C d 0 N C EXPLANATION OF "BUILD -OUT & ABSORPTION COMPARISONS" TABLE This table answers the question, "If various kinds of development occur at proposed or recent rates, how long would it take to use all the available land?" The Land Use Element designates certain areas of land for certain types and intensities of development. The Environmental Impact Report assessed the element's build -out capacity based on these factors, plus inventories of vacant and partially developed land, and recently approved or completed projects. (The Planning Commission draft would accommodate about 1.6 percent fewer dwellings and slightly more commercial and industrial space than the 1992 hearing draft.) The assessment looked at the types of development indicated across the top of this table: dwellings, retail space, and so on. It also looked at the form of the development: "Infill" is building on vacant land within the current city limits; "Intensification" is adding to existing development on a site, or replacing existing buildings with ones having more dwellings, more space, or the type of use designated for the site; "Expansion" is building on primarily vacant land outside the current city limits, in areas shown as potential annexations. The table's shaded block shows how many years it would take to completely use the draft Land Use Element's development capacity if each of the development types occurred at one, two, or three percent annually, compounded. For example, if housing grew at one percent annually, the residential capacity would be used in 22 years; if retail space grew at two percent, retail capacity would be used in about 28 years. The block below the shading shows how many years it would take to use all the vacant land --both infill and expansion-- if development occurred at the indicated growth rates and all development occurred on vacant land. For example, if the number of motel rooms increased at one percent annually, and motel construction took place only on vacant land, the capacity would be used in about 26 years. The last block shows how many years it would take to use all the development potential within the current city limits --both infill and intensification-- if development occurred at the indicated growth rates, and all development occurred only with the current city limits. For example, if services and manufacturing space grew at one percent annually, the capacity of the current city limits would be used in about 21 years. For comparison: During the 1980's, the number of dwellings increased at an average annual rate slightly above two percent, while nonresidential space increased at about three percent; since 1990, growth of housing and nonresidential space have averaged about 3/4 percent per year. Wi CA w U) CA W z CD m z Q CA LU z w CO Cn W oCC P:O a(1) O I- OU _za U� Q M W J Q Q co Q LU CU7 CL O� LL oa `CL >- LU Q M C z W D LU Cn CL y O Vl C)oCD o O\ 00 O 0 O 42 Fes. a" y � � UUU 'b U W W .O onp vn2UQ y A w co ,q N \O 00 O N O p a� a gQ pc`S000 N.M-�i r— 9) w �y C �000M o A 00 O� 00 1� O a U O 0 O 0 0 0 O O O G 0Q p O N \O N pONONO~0� 69 O �O o a U p 0 0 0 0 0 0 0 0 0 po\�000'�o� ao0000C)'n 69 �1 p o, Ov M N N G N O O O C O a0000 o 0 0 0 p 0 cq pO- oo•tN O � N N 69 0 4° M = cr 0 O r-i g. w w C� � I w Uz ed a z to O: 00 00 64 o Poll O � O t co tot M 0 a �qja q a V '� 4� 4qi h W • 0. co 00cb Q o a ~ ° � o ~ ro bm w q n04 q CIO cz Q gam, 3�!, ate, w�Q s a 0 61 MEMORANDUM March 14, 1996 TO: Open Space Financing Tax Force FROM: Bill Statler, Director of Finance SUBJECT: REVENUE COMPARISONS WITH OTHER CITIES At its March 7 meeting, the task force requested background information on rates charged by other agencies for utility users and transient occupancy taxes. The attached information has been provided for this purpose, and includes similar information for property transfer taxes as well. I thought this might also be of interest to the task force as this source - along with utility users and transient occupancy taxes - is one of the major tax sources identified in ERA's financing analysis that is within the City's authority to control. Data Collection The attached information does not cover these three revenue sources for every city in California. There are 470 cities in the State, and there is no central source that maintains this information. Accordingly, the information we have provided is largely based on data we have previously developed in the past for other purposes. While it does not cover every city in California - and it may be out of date in some cases - it is our hope that this information will still be useful in giving the task force a feel for prevailing practices in the State. Overview of Information Provided For each of these three revenue sources, we have provided the following information: ■ Fact sheets. These were prepared several years ago as part of the 1993-95 Financial Plan process in identifying budget balancing options. In addition to describing the source, each fact sheet identifies rates for the other six cities in the County as well as for twelve other comparable cities that we commonly use for a wide -range of "benchmark" evaluations. These cities typically share many (although not all) of the following characteristics with the City: population greater than 25,000 but less than 100,000; "central" city for its area; college community; coastal community; tourism is a key component of its economy; values its "quality of life". Where applicable, we have annotated the fact sheets to reflect current information. ■ Extended surveys. In the case of utility users and property transfer taxes, we have provided some extended survey data based on information readily available to us from other sources. ■ Revenue summaries. These are excerpts from our Revenue Management Manual providing basic facts about these three revenue sources, including levy authority and changes in rates over time. Conclusions ■ Transient occupancy taxes. The prevailing rate in the San Luis Obispo area and throughout the 6z State is 10% - which is the City's current rate. While there are some cities with rates higher than 10%, this is not the norm, and going much above 10% may put us at a competitive disadvantage relative to other areas. The TOT rate has been increased recently as summarized by the following rate history: TOT adopted - December 1964 5% Increase effective October 1, 1976 6% Increase effective October 1, 1991 9% Increase effective October 1, 1993 10% ■ Utility user taxes. While most cities in California do not have a utility users tax (as of 1992 about 127 cities levied this tax), most Californians are subject to it (about 60% according to the League of California Cities based on their 1992 survey). The rate varies significantly throughout the State, ranging from 1.0% to 12.5%. The City adopted its utility users tax in 1972 at a 5% rate, which has not been changed since then. ■ Property transfer tm: Again, while most cities have not adopted their own property transfer tax, it is common throughout the State of California, with $4.40 per $1,000 of value appearing to be the most common rate levied. ATTACHMENTS A. Transient Occupancy Tax 1. Fact sheet from the 1993-95 Financial Plan 2. Excerpt from the Revenue Management Manual B. Utility Users Tax 1. Fact sheet from the 1993-95 Financial Plan 2. Survey prepared by the League of California Cities in 1992 3. Excerpt from the Revenue Management Manual. C. Property Transfer Tax 1. Fact sheet from the 1993-95 Financial Plan 2. Sampling of rates in other California cities 3.. Excerpt from the Revenue Management Manual. H:0STFREVBA1E&1 a3 AttachmentAj— TRANSIENT OCCUPANCY TAKFACT SHEET What is transient occupancy tar? This is a tax on the rental of a hotel/motel room based on the price of the room. Is this tax in place at this time? )D, Yes. The transient occupancy tax (TOT) rate is currentlyoand provides the City approximately,V,.-3'million dollars annually. p2, S Who pays this tax? This tax is paid by visitors to our community; it is not paid by local residents or businesses. Who currently receives the revenue? / 9s The revenue goes direct e City's General Fund and is used for General Fund purposes. The 'Financial Plan policies allocate 20% of TOT revenues for community promotion, cultural activities, and economic stay purposes. Can cities increase their tar rate? Yes. Cities can change the transient occupancy tax rate by adopting an ordinance increasing the tax rate. No other authority is required to increase this tax. How much revenue would an increase generate? For each percent increase, General Fund revenue will increase approximately $260,000. How does the City's transient occupancy tax rate compare with other cities? Based upon a survey of the cities chosen for comparison, the following transient occupancy tax rates are in effect: San Luis Obispo jqoIp,07. Monterey 10% Camarillo 9% Napa -mac 12. o Santa Barbara 10% Santa Cruz 10% Visalia 0,1W Ventura 10% Palm Springs 4OC/C /r- Santa Maria 10% Davis 10% Petaluma 10% San Juan Capistrano 10% Rates in other San Luis Obispo County areas are: Pismo Beach 10% Atascadero 9% Morro Bay 9% Paso Robles /D o Grover Beach 10% Arroyo Grande -4%- �a`o San Luis Obispo County 9010 21 (014 How can these revenues be used? These revenues are General Fund revenues and can be used for any legitimate government purpose - parks, street maintenance, recreation, police, or fire. Why is this an appropriate City funding soun;e? Placing this tax on the City's visitors appropriately recognizes that they receive municipal services during their stay, and as such, they should share in the cost of providing them. When could an increase be effective? Theoretically, an increase could be implemented immediately upon Council approval. However, an effective date that is 90 to 120 days from the date of adoption is recommended in order to ensure a smooth transition for the hotels and motels as they quote prices to tour companies for future bookings. `S Attach mentl 1- REVENUE ITEM: TRANSIENT OCCUPANCY TAX FUND: General ACCOUNT NUMBER: 100.10.020.114 Authority: Sections 7280 and 7281 of the Revenue and Taxation Code. Administering Agency The City. Description of Revenue: The Transient Occupancy Tax is imposed for the privilege of occupying a room or rooms in a hotel, inn, motel, tourist home, or other lodging facility, unless such occupancy is for a period of 30 days or more. Tax Rate: The tax rate is 10% of the room rental. Use of Revenue: This revenue is unrestricted, however the City earmarks a portion of these revenues to promote tourism. Rate History: The ordinance implementing a 5% transient occupancy tax was passed in December, 1964. Rate inereascs have been implemented as follows: October 1, 1976 6% October 1, 1991 9% October 1, 1993 10% ,6G 305-6 Attachment JF-•J— UTILITY USERS TAX FACT SHEET What is utility users tax? This is a tax on the consumption of utility services (i.e. gas, electricity, water, telephone, cable, etc.) similar to a sales tax on commodities. Is this tax in place at this time? Yes. The tax rate is currently 5% and provides the City approximately $ million dollars annually. . "'4 g Do all utility companies charge utility users tax? No. Two utilities, garbage and sewer, do not include utility users tax on their billings. When the original utility users tax ordinance was adopted, the City was billing for three utilities - water, garbage, and sewer - and only water was included with the other utilities to be taxed. Who pays this tax? The individual or business using the .utility pays the tax at the time the utility bill is paid. Who currently receives the revenue? The revenue is remitted monthly to the City by each of the utility companies collecting the tax. The revenue goes directly into the City's General Fund and is used for any legitimate government purpose - police, fire, recreation, street maintenance, parks. Can cities increase their tax rate? Yes. Cities can change the utility users tax rate by adopting an ordinance increasing the tax rate. No other authority is required to increase this tax. How much revenue would a rate increase generate? For each percent increase in the utility users tax, General Fund revenue will ,increase approximately &546;88@- .�56 0, oo O . Can the City expand the utility users tax base to include all utilities? Yes. Cities can expand the utility users tax base to include all utilities, which in our case would add the two utilities currently not charging the tax - garbage and sewer. To include these two utilities, the City needs to adopt an ordinance indicating the inclusion of garbage and sewer. No other authority is required. How much revenue would be generated by expanding the utility users tax base? By adding the two remaining utilities - garbage and sewer - approximately $300,000 annual revenue would be generated for the General Fund. 23 0 How does the City:r utility users tax rate compare with other cities? Based upon a survey of the cities chosen for comparison, the following utility user tax rates are in effect: San Luis Obispo 5% Monterey 5010 Camarillo none Napa none Santa Barbara 6% Santa Cruz 7% Visalia none Ventura 5% Palm Springs s� Santa Maria none Davis none Petaluma none San Juan Capistrano none Statewide, 127 cities have established a utility user tax ranging from 3-5-55 to 12.5%. Although a majority of cities do not have a utility users tax, an overwhelming majority of State residents (approximately 60%) are covered by the tax. Why is this an appropriate City funding source? Utility users tax is an established means of generating general fund revenue. Most people in the State pay utility users tax. When could a rate increase and/or expansion of the tax base be effective? Theoretically, an increase and inclusion of garbage and sewer in the tax base could be implemented immediately upon Council Approval. However, an effective date that is 60 to 90 days from the date of adoption is recommended in order to allow enough lead time for notification to all utility companies and to allow them time to make any program or billing changes required. `8 24 MAR-02-92 WED 12:42 LEAGUE OF CA CITIES FAX NO. W1 48671 P.04 ` Attachment �• 2 CITIES WITH UTILITY USERS' T&N - 6/92 'Alameda Hollister =Riverside *Albany *Huntington Beach 'Roseville "Alhambra Indio 'Sacramento_ 'Arcadia 'Inglewood 'Salinas Auburn =Irvine =San Bernardino Baldwin Park "Irwindale San Bruno Beaumont Lawndale San Clemente 'Berkeley Lodi San Dimas Brawley "Long Beach 'San Francisco Buena Park *Los Alamitos* *San Jose 'Burbank Los Altos 'San Leandro Burlingame 'Los Angeles *San Luis Obispo Carpinteria Manteca San Pablo `Chico Millbrae Sand City "Chula Vista Cloverdale C''' *Modesto Montclair Sanger *Santa Ana 'Compton 'Monterey 'Santa Barbara Concord Monterey Park 'Santa Cruz Covina Moreno Valley 'Santa Monica *Culver City Morgan Hill *Santa Rosa Cupertino Morro Bay Saratoga =Cypress "Mountain View Seal Beach Daly City 'Oakland Seaside *Del Mar Orange Cove South Pasadena 'Downey *Oroville Stanton El Centro 'Pacific Grove *Stockton El Cerrito Pacifica *Sunnyvale El Monte *Palo Alto *Torrance El Segundo Palos Verdes Estates Tracy Emeryville Paramount *Tulare - "Eureka *Pasadena 'Vallejo Fairfax *Piedmont 'Ventura Firebaugh Pinole Waterford "Folsom 'Placentia *Watsonville Pleasant Hill Westminster Garden Grove =Pomona "Whittier Gardena *Porterville Willows *Gilroy Portola Valley Woodlake "Glendale Rancho Palos Verdes Woodland Greenfield Redding J %7 Grover City Guadalupe 'Redondo Beach =Redwood r. ` * - Chartered Cities City Hawthorne Hermosa Beach Rialto =Richmond-- T ��, , MAR-02-92 WED 12:41 LEAGUE_ OF CA CITIES FAX NO. 9164448671 P.02 Gt.GUE .t Yid o.`X?•` s. .✓..:�l•a� EA Ar _ ucr 17U "'MISSUES qS w5Y' r• UTILITY USER TAX RATES per cent on: CITY ELECTRICITY GAS WATER TELEPHONE CABLE Agoura Hills 0 0 0 0 0 Alhambra 5 5 0 5 0 Aradia 5 5 0 S 0 Artesia 0 0 0 0 0 Avalon 0 0 0 0 0 Azusa 0 0 0 0 0• Baldwin Park 3 3 3 3 3 Bell 0 0 0 0 0 Bellflower 0 0 0 0 0 Bell Gardens 0 0 0 0 0 Beverly Hills 0 0 0 0 0 Bradbury 0 0 0 0 0 Burbank 7 7 0 7 0 Calabasas 5 5 5 5 5 Carson 0 0 0 0 0 Cerritos 0 0 0 0 0 Claremont -G- Commerce .0 0 0 0 0 Compton l0 10 10 10 0 Covina 0 0 0 0 0 Cudahy 4 4 4 4 0 Culver City 11 11 11 11 11 Diamond Bar 0 0 0 0 0 Downey 3 3 0 3 0 Duarte 0 00 0/h 004, 0 �, E1 Monte* 3 3 0 3 E1 Segundo** 3 3 3 2 C Gardena 4 4 4 4 0 Glendale 7 7 7 7 7 Glendora 0 0 0 0 0 Hawaiian Gardens 0 0 0 0 0 Hawthorne' 3.5 3.5 3.5 3.5 3.5 Hermosa Beach 10 10 10 10 10 Hidden Hills 10 10 10 10 0 Huntington Park 0 0 0 0 0 Industry 0 0 0 0 0 Inglewood 10 10 10 10 10 Irwindale*** 7.5 7.5 7.5 7.5 7.5**** 0 La Canada Flintridge 0 0 0 0 La Habra Heights 0 0 0 0 0 Lakewood 0 0 0 0 0 La Mirada 0 0 0 0 0 Lancaster 0 0 0 0 %d 0 La Puente 0 0 0 0 0 7 W- 0 / 0 0 0 0 MAR-02-92 WED 12:42 LEAGUE OF CA CITIES FAX N0, 9164448671 =_P,03 UTILITY USER TAX RATES Percent on: CITY OF ELECTRICITY GAS WATER TELEPHONE CABLE Lawndale 0 0 0 0 0 Lomita 0 0 0 0. 0 Long Beach 10 10 10 10 0 Los Angeles***** 10/12.5 ind 10 0 10 0 Lynwood 6 6 6 6 0 Malibu 5 5 0 5, 5 Manhattan Beach 0 0 0 0 0 Maywood 0 0 0 0 0 Monrovia 0 0 0 0 0 Montebello 0 0 0 0 0 Monterey Park** 2.75 2.75 0 2.75 0 Norwalk 0 0 0 0 0 Palmdale 0 0 0 0 0 Palos Verdes Estates 10 10 10 10 10 Paramount 1 1 1 1 1 Pasadena 7.5 7.5 7.5 7.86 8.92 Pico Rivera 0 0 0 0 0 Pomona 10 10 10 10 0 Rancho Palos Verdes 0 0 0 0 0 Redondo Beach 4.75 4.75 4.75 4.75 4.75 Rolling Hills 0 0 0 0 0 Rolling Hills Estate 0 0 0 0 0 Rosemead 0 0 0 0 0 San Dimas 0 0 0 0 0 San Fernando 0 0 0 0 0 San Gabriel 0 0 0 0 0 San Marino 0 0 0 0 0 Santa Clarita 0 0 0 0 0 Santa Fe Springs 0 0 0 0 0 Santa Monica 9.5 9.5 0 9.5 9.5 Sierra Madre 0 0 0 0 0 Signal Hill 0 0 0 0 0 South E1 Monte 0 0 0 0 0 South Gate 0 0 0 0 0 South Pasadena 0 0 0 0 0 Temple City 0 0 0 0 0 Torrance 6.5 6.5 6 6.5 6.5 Vernon 0 0 0 0 0 Walnut 0 0 0 0 0 West Covina 0 0 0 0 0 West Hollywood 0 0 0 0 0 Westlake Village 0 0 0 0 0 Whittier 4 4 4 4 4 * There is a $40,000 annual combined utility cap - Applies to commercial users only. �� **f First $300 per year not subject to tax. ***• No cable service currently available. ***** The tax rate for electricity is 10% for residential users Attachment 3 REVENUE ITEM: UTILITY USER TAX FUND: General ACCOUNT NUMBER: 1KI0.028,XXX Authority: Derived from "municipal affairs" authority of charter cities and Section 37100.5 of the Government Code for general law cities. Administering Agency: The tax is collected by the utility as a part of its regular billing procedure and remitted to the City. Description of Revenue: Utility User Tax is imposed on the consumer (residential and commercial) on electricity, gas, water, telephone, long distance service, and cable television billings. Tax Rate: The tax rate is 5% on the amount of the utility bill. Use of Revenue: The revenue generated from utility user tax is unrestricted. Rate History: The ordinance implementing the 5% utility users tax was passed in August, 1972. 7 2. 305-5 PROPERTY TRANSFER TAX FACT SHEET Attachment What is a property transfer tax? This is a tax resulting from the transfer of real property ownership based on the value of the property. Is this tax in place at this time? Yes. Section 11901 of the Revenue and Taxation Code (RTC) establishes a statewide property transfer tax at the rate of $1.10 per $1,000 of value (or $275 on a property with a transfer value of $250,000). Who pays this tax? Both the buyer and the seller are jointly liable for payment of the tax; however, it is customary for this tax to be paid by the buyer. Who currently receives the revenue? The County and incorporated cities share equally in the tax revenues - in essence, each has its own rate equal to $0.55 per $1,000. In the unincorporated areas, the County receives all transfer revenues at the $1.10 per $1,000 rate. Can cities increase their tax rate? Yes. Cities are allowed to set their own rate separately from the provisions of RTC Section 11901. In this case, the County would retain the entire proceeds from the $1.10 rate specified in this section. Have any other cities adopted their own property transfer taxes? Yes. At least 22 cities in 10 counties have adopted their own property transfer tax rates. Rates range from $1.10 per $1,000 in Torrance to $10.00 per $1,000 in Berkeley (see attached). How much revenue would an increase generate? This depends on two key factors: the value of property transferred annually and the tax rate established by the City. For comparison purposes, the following is a summary of property transfer tax revenues received by the City over the past seven years at the current rate of $0.55 per $1,000, and the amount that would have been received at rates ranging from $2.20 per $1,000 to $10.00 per $1,000. Fiscal Year Actual Revenues Revenues @ $2.20/51,000 Revenues @ 53.30/S1,000 Revenues @ 54.4061,000 Revenues @ 55.00/51,000 Revenues @ $10.00/51,000 1994-95 $79,600 $318,400 $477,600 $636,800 $723,600 $1,447,100 1993-94 84,900 339,600 509,400 679,200 771,700 1,543,500 1992-93 69,600 278,600 417,600 556,800 632,700 1,265,400 1991-92 68,400 273,600 410,400 547,200 621,800 1,243,600 1991-90 94,300 377,200 565,800 758,200 864,300 1,728,700 1989-90 137,800 551,200 826,800 1,102,800 1,252,700 2,505,400 1988-89 136,700 546,800 820,200 1,093,600 1 1,242,700 2,485,400 What authority is required to increase this tax for the City? If the revenues will be used for f,eneral purposes, Council approval is required. If the revenues will be used for a special purpose, two-thirds voter approval is required. 73 How can these revenues be used? These revenues can be used for any legitimate government purpose - street maintenance, parks, recreation, police, or fire. They can be formally earmarked; however, as noted above, this would require two-thirds voter approval. If designating the use of these revenues is desirable, the Council could allocate them by policy to a special purpose such as parks and open space. For example, the 1993-95 Financial Plan includes several policies regarding the allocation of General Fund revenues. However, the implementing ordinance itself could not earmark them without two-thirds voter approval. Why is this an appropriate City funding source? The City's real property transfer tax will be paid by the buyers of San Luis Obispo properties. As such, it is an appropriate way for new residents to pay their fair share of the amenities that have already been provided by existing residents. For properties changing hands through local buyers, the transfer tax reflects the enhancement of property values by the facilities and programs that the City provides. How would these revenues be collected? The County could continue to collect these revenues for us. Although this would require a formal agreement with the County, initial discussions with them have been favorable. When could an increase be effective? Theoretically, an increase could be implemented immediately upon Council approval. However, an effective date that is 120 to 180 days from the date of adoption is recommended in order to ensure a smooth transition for the County, businesses directly involved in processing property transfers such as escrow, title and lending companies, and any individuals or companies with properties currently in escrow. Are there any other implementation issues? No. There has recently been a court case against the City of Los Angeles for increasing the city property transfer tax. The court decided in favor of the City of Los Angeles, and this ruling was subsequently upheld at the appellate court level. This appellate court decision, along with another case addressing this same issue, was taken to the Supreme Court, where review of both cases was denied. Accordingly, there is no longer a legal basis for not implementing a City property transfer tax. It should be noted that based on the recent "Guardino" court decision, this tax - if implemented for general purposes - can no longer be adopted solely by Council approval in general law cities; majority voter approval is now required in this circumstance. However, charter cities like the City of San Luis Obispo are not affected by this court decision. G:TRA.NSTAX FAX UA Attachment �2 Cities with Their Own Property Transfer Tax The following summarizes cities known at this time to have their own property transfer tax by County. There may be other cities with their own property transfer tax, but this lisiting illustrates that there is a broad range of rates throughout the State. County/ city Rate Per $1,000 of Value Alameda County Berkeley $10.00 Oakland 9.50 Piedmont 4.40 Alameda 4.40 Albany 4.40 San Leandro 2.00 Contra Costa County Richmond 7.00 Los Angeles County Los Angeles 4.40 Culver City 2.20 Redondo Beach 2.20 Torrrance 1.10 Santa Clara County San Jose 3.30 Mountain View 3.30 County/ city Rate Per $1,000 of Value San Francisco County San Francisco $10.00 San Mateo County San Mateo 5.00 Solano County Vallejo 3.60 Sacramento County Sacramento 2.50 Marin County San Rafael 2.00 Sonoma County Sebastobol 2.20 Santa Rosa 2.00 Cotati 1.90 Petaluma 1.15 750' Attachment �° 3 REVENUE ITEM: REAL PROPERTY TRANSFER TAX FUND: General ACCOUNT NUMBER: 100.10.026.136 Authority: Section 11901 et seq. of the Revenue and Taxation Code Administerinp, Agency: The County. Description of Revenue: This tax is imposed on the transfer of real property. Counties are authorized to levy the tax at a rate of $1.10 per $1,000 of the sale value, exclusive of any lien or encumbrance remaining at the time of sale. Once a county has enacted the tax (which all counties have done), a city is authorized to levy a tax at one-half the county rate. The city tax is then credited against the county tax. In such a case, the city and county each receive $ .55 per $1,000 value exclusive of any lien or remaining encumbrance on the property. Additionally, cities may impose their own real property transfer tax at a rate established by Council. When a city establishes its own tax rate, the initial $1.10 per $1,000 of sale value collected by the county is no longer shared with the city, but retained in full by the county. Typically the county collects the city tax along with the initial tax through an administrative agreement between the two agencies. Tax Rate: The City receives one-half of the county rate - $ .55 per $1,000 of the sale value. Use of Revenue: Unrestricted. Rate History: The rate and basis for collecting and distributing this revenue source has not changed in the past ten years. 7G 305-7 MEMORANDUM TO: OPEN SPACE FINANCING TASK FORCE FROM: NEIL HAVLIK, NATURAL RESOURCES MANAGERIA , SUBJECT: CITYWIDE COMPREHENSIVE GREENBELT CONSERVATION PROGRAM -- THE SONOMA COUNTY VOTER CAMPAIGN DATE: MARCH 13, 1996 Following last week's discussion of greenbelt acquisition by the Sonoma County Agricultural Preservation and Open Space District, Task Force members requested additional information about how the measures creating and funding the district were presented to the voters. This memo is intended to respond to that request. There were two phases to the project. The first was the passage of enabling legislation to permit Sonoma County to establish such a special district and allow a majority vote to provide a sales tax increment to fund it. That effort took two legislative sessions, and was signed into law by then -Governor Deukmejian in 1989. The local vote effort began in early 1990. There were three measures on the ballot: one creating the district, one authorizing a 0.25% sales tax increment for funding of the district, and an accompanying measure authorizing a 0.25% sales tax increment for funding widening of Highway 101 in Sonoma County. Commitment to a level of easement acquisition, combined with the strong character of the agricultural community, convinced that community to support the measure. Actual voter outreach consisted of using the names of well-known individuals in the community as supporters of the measures, gaining endorsements of civic groups, and obtaining editorial support from the major newspapers in the community. Volunteers walked precincts and passed out informational flyers, and a campaign group paid for advertising. Out-of-pocket costs were less than $10,000. There was no organized opposition. Ballot argument opposition was provided by a taxpayer group on an anti -tax basis rather than an argument that the goals of the effort were not worthy. The result as noted earlier was a 71% favorable vote to create the district, and a 55% favorable vote for the funding measure. The companion measure for widening of Highway 101 failed by a 45%:55% margin. 77 MEMORANDUM TO: OPEN SPACE FINANCING TASK FORCE �y� �J FROM: NEIL HAVLIK, NATURAL RESOURCES MANAGER 0 � �l r SUBJECT: CITYWIDE COMPREHENSIVE GREENBELT CONSERVATION PROGRAM -- THE SONOMA COUNTY EXAMPLE DATE: MARCH 6, 1996 Task Force members have asked about the example of greenbelt acquisition being set by the Sonoma County Agricultural Preservation and Open Space District. This memo is intended to briefly describe that entity to Task Force members. In November 1990 the voters of Sonoma County approved creation of a special district, known as the Sonoma County Agricultural Preservation and Open Space District (SCAPOSD). This district was established by a 71% favorable vote of the electorate, and funded through a 0.25% sales tax increment by a 55% favorable vote. The district and its funding had a twenty year lifcspan. With a population of 430,000 people, this increment generates some $11,000,000 annually in Sonoma County. According to District General Manager David Hansen, the district can acquire land anywhere in Sonoma County; however, the organization tries hard to follow the guidelines and policies of the County's Agricultural Protection and Open Space General Plan elements. Following its creation, the district created its own plan based upon the County General Plan, and seeks to concentrate its acquisition effort on the edges of the County's urban communities, and upon its more important scenic and resource areas. Also a portion of the monies (about 10%) are annually committed to assisting on projects within the cities of the County. Sonoma County has a Regional Park Department, and the District works closely with the Park staff to ensure that wherever possible lands acquired in fee can be turned over to the Park agency for operation. At this time the district has concentrated on acquisition of easements on farmlands between the cities of Sonoma County. Mr. Hansen states that, to date, the district has acquired about 19,000 acres of land or easements (mostly the latter). Because of the availability of cash, the district enjoys a buyer's market, and has been able to obtain bargain sales and other side benefits from its efforts. The organization is already looking ahead to providing for long-term maintenance for its properties, and some type of successor mechanism to the current situation when it expires in 2010. Mr. Hansen suggested that San Luis Obispo consider flexibility in crafting a funding mechanism or mechanisms. He stated that, although land banking is appropriate in the short term, in the long term the community will want to be able to enjoy some access to scenic or open space lands, and a funding mechanism that can accomodate this would be preferable to one that did not. He also noted that a recent study undertaken by the Regional Parks Department found that open space preservation was among the highest priorities of County citizens; they were aware of the activities of the district and were willing to pay an additional $15/yr for open space maintenance. MEMORANDUM TO: OPEN SPACE FINANCING TASK FORCE FROM: NEIL HAVLIK, NATURAL RESOURCES MANAGER"fi. SUBJECT: CITYWIDE COMPREHENSIVE GREENBELT CONSERVATION PROGRAM -- CURRENT ACTIVITIES DATE: MARCH 6, 1996 A variety of land conservation techniques will be used to accomplish the task of establishing a greenbelt around the City of San Luis Obispo, including: 1. Accepting donations of land or conservation easements from conservation - minded individuals. 2. Obtaining dedications of land or conservation easements in conjunction with granting of development entitlements in suitable areas, both within the City and in neighboring unincorporated areas. 3. Purchase of such interest in land when the other techniques will not work or are inappropriate. At the present time there are no pending offers of outright dedication of land or conservation easements; however, discussions are underway with several area landowners that may involve land dedications associated with development entitlements. Also, City and Land Conservancy staff are currently exploring five possible acquisitions of land or conservation easements covering land ranging from five to 320 acres in size. If negotiations with any of these parties are successful, funding for the acquisition would likely come out of the City's current, $1.4 million acquisition reserve. The smaller projects may possibly utilize other existing funding sources. Funds for purchase of land or conservation easements may also be obtained from a number of outside sources, including bond proceeds, mitigation funds, and State and Federal grant programs. At the present time the City is pursuing possible funding support from the State Coastal Conservancy for the projects currently being explored. This support would be in the form of a grant or no -interest loan, and is intended to stretch existing City funds for those projects. We are also awaiting next year's grant cycle, which begins in October, as an additional funding source, and are pursuing possible use of mitigation monies from projects such as the Water Reuse Project or other projects to support greenbelt activities. Greenbelt acquisition funding being considered by the Task Force should be thought of as part of a comprehensive conservation program. The funding program will complement City -County cooperation and other planning tools such as those described above to achieve the goal of a secure greenbelt. �9 CITY OF SAN fU N CAPISTRANO OPFAI RP A l`,F. 32400 Paseo Adeianto San Juan Capistrano; CA 92675 (714) 443—b338 FAX (1714) 493-1053 MEMO / FAX TRANSMITTAL. TO: C.X c���A-- DATE: P- Z 7-9P ATTN: TIME: REGARDIITG: G%9D c/�'� cVIA: PROJECT: PAGES: FROM: Sharon Heider /T�� 1n.9€VAI� A/ i%1� T AVE OPEN SPACE 1 ;�21 Ci eetien� (;s}si�lt:ittu. Suicc 134, SmIJuaet Cdpibuwiti, Caliii)lttia 9267 Sponsored by San Juan Citizens for Open Space to preserve over 120 acres of our agriculhu-A] land from development SAN JUAN CITIZENS FOR OPEN SPACE Questions & Answers The campaign to educate the voters of San Juan Capistrano on the purchase of open space and park lands is in full swing. Many questions will be asked about our program. In order to maintain continuity of facts we have outlined some of the frequently asked questions and provided you with some recommended answers. QUEST[ON 1 What is San Juan Citizens for Open Space? Answer San .Than Citizens for Open Space is a coalition of SJC residents that have banded together to educate the electorate on the need to acquire the last existing agricultural land in SJC for permanent open space and park land use. QUESTION-2 Which property will be purchased when the bond passes? Answer The properties to be acquired are identified as follows: 1) approximately 19.0 acres in the Northwestern area of the City (near the intersection of Junipero Serra and Camino Capistrano); 2) approximately 20 acres adjacent to Marco Forster Jr. High School. QUESTION _3 How much of the bond proceeds will go to the actual acquisition and improvemeni of this property? Answer $20 million will be used for acquisition and improvement of open space, $1 million will be allocated for bond issuance fees. :� QUESTION 4 When the voters approve the bond issue, when can San Juan residents expect to use the property? AnsweC We estimate that San Juan residents will be able to use the property within 36 months of the passage of the bond. QUESTION 5 What is planned for the property after the bond passes? Answer A mixture of youth athletic fields, senior/community centers, agricultural preserves, passive open space, and equestrian and bike trails are planned. When the bond is successful, citizen participation will be requested for the final planning of the property. QUESTION 6 What will happen if the bond issue fails? Answer Many of the property owners have expressed a desire to sell their property arid development could occur within five years. An example of what the developers will ask for is commercial shops, condominiums, and single family dwellings. QUESTION 7 Could the City stop any potential development if the open space bond fails? Answer In the short term, yes, by slowing the development process with the City's existing agricultural zoning. However, the best long-term solution is the acquisition of this irreplaceable agricultural and open space property. QUESTION' 8 When will the open space bond be on the ballot? StZ Amy-�T The City Council has called an election for April 10, 1990. It will take 6707c of those vutiug to pass the bond. QUESTION 9 How much will it cost the average San Juan Capistrano homeowner to purchase the open space/park lands? How much for the mobile home owner? Answer On the average, it will cost a homeowner $5.50 per month. On the average, it will cost a mobile home owner $2.29 per month, if your coach was purchased after 19R1. If your coach was purchased before 1981, the average assessment will be less than 94 cents per month, some as low as 16 cents. QUESTION 10 Can you deduct the bond payments from your federal income tax? An, YES! These payments are added to your property taxes which are deductible on your federal income tax. OESTION 11 Who controls the bond funds? Answer When the bond passes, an indi ,;,endent trustee will be appointed by a federally insured bank to oversee the bond. QUESTION 12 Does the City now collect money to preserve agriculture in San Juan and what is it used for? %3 Answer Since 1976, the City has collected an agricultural fee from developers. The money can only be spent on agriculture. A total of $2.2 million has been collected, $1.1 million has been used to construct a storm drain ,and water improvements on the agricultural property adjacent to Marco Forster Jr. High, i no How much of the agricultural fund is available and what can it be used for? Answer The City has approximately $1.3 million (including interest) left in the agricultural fund. This monev can be used for the purchase of agriculture land only. No ball diamonds or similar facilities may be developed with this fund, and it will never be substantial ennuph to acquire 140 acres of open space. MI 1wh rk]t S-tAI 'ice Ak, I tENT IN FAVON OF MEASURE D Pursuant to Section S301 of the Election! ;, the Crty Council of the City pf San Juan Capistrano has estimated the to,,,,mrig tax rates which would be requl►ad to be ltv)ed to pay the pr,nupa) and ,nternl on the $21.000 oo;) pl bonds to be issued for the purposes as set forth on the ballot proposition accompanying this statement. The City Council estimates that $10,530.000 Of the bonds will bd sob in 1990. $5.264,000 of the bonds will be sold in t09t. and tS.POS,000 vnU be solo m 1993. The tax estimate is based on the bonds tearing a net interest rate of 30prox1matery eight percent t8%) per annum matunng over a period of 23 years The City Council may sell the bonds it different times and in different amounts The Cfiv Council cannot predict the interest rate that me bonds will beat at the time of sale. 1. The best estimate of the tax rate which would be reouired to be levled to fund the bond issue during the first tisC21 year after the first sale of bonds based on aCca.ed valuations available at ft•.,s time as protected to the fiscal year IM1991 ,s SO.0431266 per $10000 of assessed valuation. 2. The best estimate of the tax rate which would be required to be leased tc fund the bond issue during the fast fiscal year after the last sale Of bonds based on assessed valuations protected to the fiscal year 1993/1994 would be $0.0742691 per $100 00 of assessed valuation. 3. The best estimate of the highest tax rate which would be required to be levied to fund the bond issue based on assessed valuations as projected would be 9.0742691 per s100.00 of assessed valuation during the fiscal year 1993/199* APPROVED BY THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO VOTE rES 10 Save 140 dues of open space for bau a,amonos. soccer f,eids a senro,;• commundy tenter. botanical gardenS. agricultural Dials. and trail$ for nature walks hikers bicycles and equestrians. SAY NO ... To the devaopers and high o"Slty COMO S. commerC 1 develODment, ano the additional traffic, congestion. and pollution they will bring THE BENEFITS OF A YES VOTE n Juan .0170ns to AV OPEN SPACE oak you to vote YES to Save the gtteway to San Juan from the developer's bulldozer. Your YES VOTE will: Maintain San Juan's rural environment. u� arantee 140 acres of existing agricultural land in the city wifl not be developed. Guarantee Sin Juan Will nor look like just another Orange County City urn new youth and adutt atniatic f9elde, ' Guarantee a new senior/community, center, uarantee trails for hikers, bicyclists, and equestrians. WHICH AREAS WILL BE PURCHASED .1 120 acres north of Juniper- rra Road (located between Oso Creek and Interstate 5), and 20 acre$ near Marco Forster Junior High School and the intersection of Del Anon and Aiipaz These are the last agri in the cultural areas left Ci . --- WHAT IS THE COST Independent financial experts project d will cost $21 million to purchase these areas The average San Juan homeowner will pay $6 50 per monin. The average mobile home owner who purchased their coach before 1981 will pay less than 94 cent$ per month, some as low as 16 cent;. The average mobile home owner who purchased their coach after 1981 will pay $2 29 per month WHY DO THE DEVELOPERS OPPOSE SAVE OPENSPACE ..? Because they won't De able to make mlllions wren new Projects in our community. YOUR YES VOTE IS CRUCIAL I Without your YES vote the open space we take for granted today will be gone tomorrow. st Marlene Draper Chairperson, SAVE OPEN SPACE Trustee, %aD151:dllu unitled SCnool District Sr Wilson Buckner Immediate Past President, San Juan Seniors S/ Vickee Donoha F'esident, San Juan Little League S/ Terry Dorse Local Small Businessman ant: Immediate P2St President, San Juan Chamber of Commerce NO ARGUMENT AGAINST THIS MEASURE WAS SUBMITTED Ra 001 TOP OFFICIAL BALLOT CITY OF SAN JUAN CAPISTRANO SPECIAL MUNICIPAL ELECTION ORANGE COUNTY APRIL 10, 1990 This ballot swo inell 06 tom On by preclnr t Goard rnerno61 and nandao to the voter. MEASURE SUBMITTED TO VOTE OF VOTERS f rY OF SAN JUAN CAPISTRANO BOND MEASURE 0 Shnll the- "ity of San Juan C'apistrwto Incur bonded indebtedness In the prin• cipal arnount of up to $21,000,000 to ac- quire lands for park. agriculture, opts ff space, and related uses, in order to save Z, these lands from potential residential and commercial development and to decrlop youth, senior and other community I NO facilities, all in accordance with the Citr's �— ' 3me Open Spucc" Program.' nol IT ti 0 En �r=1',3 h=_LShS'S0:3T QUESTIOt'S AN%"-'4"IVERS I - What as San Juan Citizens for open space? 2. Which property will he purchased when the bond passes? 3. How much of the bond proceeds wiu So to t#Ze vrtt.taf acqulsitlon and Improvement of this property? 4, what Is plonned for the pfCpfifty after ft bond passes? a. What will happen If the bond issue NI ? v. When will the open space bored be on me beloot? 7. How much will It cost the average San Turn Capistrano homeowner to putchcw the open space/park bnda? Now much for the mobBo here owner? 8. CCLI you deduct the bond;xwments from your tedwai Income tax? 7. Who conk9s the bond funds? 10. Does the City now collect money to Preserve agricuFture in Son Juan and how heave them funds been spent? . Is there an attemcrtive other than acquisition thm will perrncirvon+ly ih&ire thaT those properties wlU remain undeveloped? 1- Son Juon Cittzers for Open 3pac9ls a coa91!on of &,lC reakdenhs that hCve banded together to educate the electorate on the need to ocqu,;e the last Wdsfing oarict.&ural land in S,;C 'or pormanent open Epcictr urxd LxA X= use. 2. il�c ploPe,l ra to tie u"ulred are cenntf&o cis follows: t) app(otdmateiy 120 cores In rile Normwez2ro area of the City (near tf^6 intarsection of JuNperc Serra MCI Camino Capistrano): 2) CpprOwnrnely 20 acres W.10cent to Marco Forster Jr. High Schoa, 3. $20 melon Will be used for acqulsitlon and improvement of OPWI Spore, 51 million VAU be allocated for bond leuonoe furs, 4. A miftre of pcWvo open space, agricultural preserves. youth athletic flelds, a senior/c; mrnuni y center, and egr-eMn and blk+e trails are piarned when the bond 0 successful, cttlzen poncclpatbn will be requested for the final piarnln,g of tho property. 5. Moray or the property owners r cve expressed a desire t0 301 tt)ak property anci cievcioprnent m;ld occur wlfhfn No yata. An example of what the deve{apers VAI Q4k for is cammarr4ni shops, conoorniniums, orxd s►ngle fe3mi y aweGings, 6. The City Courxdl he s cdled an electron for April 10, 19W. It wnl take 67% of those voting to pass the bond. 7. On the overage, It W4 cost a homeowner $5.50 per month. If your Coach was purchased before 199 1. the overage assessment vA: be toss than 94 cents per month, some as :ow m 16 cents, If your coact wa; Purchased aft& 1981, the cr✓wogo crzmment will be 62.29 per month. S. VESI These perymanis cue adder to your property t0x9S which ud deducnbte on your teaerot Income tax, 9. Whp.n thR br ad passas. an tdWft0dQnt ttu,tCo will be appointed by c feCerally lr=rea bank to oversee the bond. 10. Slnca 1976. the C,7y has COPected on agricultural No hom Cl"IopWs. A 10'C1 of $2.2 m0lon has been collected, S1.1 million hos boon used to conslyuot C storm C(CF, end water Irprovernents on the agricutural Property docent to Marco FcrSter jr, Hign. The remaining S1.3 Mdon t1nc'udng interest) con or:ly be sprant nn ri�rie ®. Ne, bell didmondo or cmlor facifitios may be Cdeveloped with thu fund, and It wlq never be substontlol enough to acquire 140 acres of open Spare, 1 1. No. Passcge or +M1 s `Jcrc ,slue is the cr;iy method oleeibblc'c ctfter15 or Y;tl Junin Cu;:s?rcno to Permanently preserve these lands fcr open space. C96rutture, and recrearbnal Lssi SAYE OPEN SPACE PROGRAM "SOS" 1. Save Open Space (SOS) Mission Statement. The City of San Juan Capistrano has had a long standing commitment to the preservation of agriculture and the maintenance of open space within the community. In spite of the City's effort, agriculture is vanishing and the City has been under increasing pressure to permit development of these lands for residential and commercial uses. The City completed a parks and open space needs study in late 1929. The principal finding of the study is that the City is in great need of additional park and open space lands and recreation facilities to serve present and future residents. The study further recommends that a general obligation bond be sent to the voters to finance expansion of City park and open space lands and the development of recreation facilities. This "save open space" program is designed to sponsor such a general obligation bond proposal to be presented to the City voters at an April 1990 City election. The passage of this bond proposal by the voters would permit the City to not only continue its long term commitment to agriculture preservation, but would also allow the City to meet the park and recreational needs of its residents. II. Summary of Park and Open Space Land and Facilities Needs that May be Financed by the General Bond Obligation. The parks need study concluded that there is an acute need for additional available parkland and open space, especially to serve a wide range of active recreation needs. The possible recreation needs that could be financed by a bond issue include: -----acquisition of lands to serve as sites for two community parks areas to be located in the Southwest and Northgateway sectors of the City; -----these land areas would serve as staging areas for development of active recreation uses, passive open space, and agricultural uses, and improve the equestrian linkage system; -----the increase of active sports fields with adequate facilities; -----the possible construction of a multi -purpose youth and seniors community center; -----development of large open areas with a minimum of 10 acres in size for unstructured play, community events, botanical gardens, pastoral walkways, community gardens, and special activities such as rodeos; ----completion of and integrated biking, hiking, and equestrian trail system that provides both local and regional links; and -----infrastructure improvements. III. Land Areas Sub'ect to Possible Ac uisition with Bond Funds. With open, undeveloped lands rapidly diminishing in the City, two major land areas in the southwest and northwest sections of the City appear ideally suited to meet the park needs described in this program. These land areas include the open agricultural lands along Camino net Avion and Alipa2 Street, and an area at the northern gateway alon8 Camino Capistrano at he confluence of Oso and Trabuco Creeks. These land areas are more particularly set forth in the mapping attached as Exhibits A These are the land areas proposed as potential acquisition sites with bond proceeds. IV. General Obligation Bond Financing Program/Master Plan for Funds Expenditures. This Save Opcn Space Program proposes to send a general obligation bond measure to the voters of the City at the April 1990 City election. A general obligation bond issue requires a 2/3 vote approval by the voters. The parks need study also pinpointed a bond measure as the most feasible financial tool available to meet these goals. It is proposed tl►at the bond measure be in the total amount of up to $21,000,000.00. Passage of the bond measure would mean that each property owner would be assessed additional property taxes on an amortized basis over a period of 20 to 30 years. An example projection of the range of property taxes needed to repay the bonded indebtedness is set forth in the schedule labeled as Exhibit B. This is a projection only and is not intended to reflect the final breakdown of property taxes needed to repay the bonded indebtedness should the ballot measure pass. In addition to this funding mechanism, the City will also attempt to utilize other funding mechanisms, such as lease option financing and owner participation notes, to help fund the acquisition of these lands as it can be reasonably anticipated that the bond issue funds of $21,000,000 will not be enough to purchase all of the lands identified in Exhibit A. An example might be that the southwest land area be acquired by special financing outside of the bond proceeds with the bond proceeds devoted exclusively to the northwest lands and improvements. It is further planned that up to $2,000,000 of the bond funds be spent for the types of improvements described in Section 11. The precise schedule of improvements are to be left open at this time. Developer fees could also be used to finance recreation facilities once the parklands are acquired. - 2 - O9 Should the bond issue pass, a master plan would be drawn up describing the exact parcels to be acquired and the particular improvements to be installed, together with an appropriate timetable for these activities. V. Conclusions. The City's rising population and diminishing open space require the City to take the extraordinary action to provide substantially more parkland and open space, and recreation facilities for its citizens. The high cost of raw land in Southern Orange County leaves the general obligation bond as the best available financial tool to meet this pressing Community goal. The City Council requests the full support of all City residents to raise the necessary funds to provide these park resources to present and future generations. U -3- 1� EXHIBIT A 91 1� t-:Z:::-: t-S- Fl:z. T 01 -4 r - : �7 1:4-9 T- ' --:13� MEMORANDUM TO: OPEN SPACE FINANCING TASK FORCE FROM: NEIL HAVLIK, NATURAL RESOURCES MANAGER Cr)-fi,. SUBJECT: CITYWIDE OPEN SPACE FINANCING AS PART OF A COMPREHENSIVE GREENBELT CONSERVATION PROGRAM DATE: FEBRUARY 13, 1996 Preserving rural lands has been occasionally compared to controlling a forest fire. Many different techniques are used to control the fire depending upon the terrain, the wind, humidity, and other factors. Some areas are allowed to burn. Other areas needing protection are protected and their surroundings permitted to burn. A logical, defensible boundary to the fire area is determined and that is where a stand is made. The most precious commodity--water--is used sparingly and only in those places where other techniques will not work or are inappropriate. So it is with land conservation. A variety of techniques will need to be used to accomplish the task of establishing a greenbelt around the City of San Luis Obispo, and these will include: 1. Accepting donations of land or conservation easements from conservation -minded individuals. 2. Obtaining dedications of land or conservation easements in conjunction with granting of development entitlements in suitable areas, both within the City and in neighboring unincorporated areas. 3. Purchase of such interest in land when the other techniques will not work or are inappropriate. Sources of funds for purchase of land or conservation easements can be derived from a number of sources. These include: 1. Bond proceeds; 2. State and Federal grant programs; and 3. Mitigation funds. In recent years the above funding sources have become more limited and much more competitive. Linking open space conservation with other projects such as flood control can also help, sometimes significantly. While these resources remain available, and the City will aggressively pursue funding from them, there is a clear need for independent local funding --our water --if we truly expect to be successful in the long-term effort to preserve our community's natural setting. Several different local funding mechanisms are available to support purchase of land or conservation easments for public benefit purposes. Two of these have been used successfully in Solano County, California, in recent years: 1 L- 1. Mello Roos (Community Facility) District. Most commonly used to finance public infrastructure in developing areas, this funding source has been used successfully for open space acquisition and operation for ten years in the Fairfield area. Technically requires a 2/3 affirmative vote, but this is often achieved by a small group of voters with a vested interest in the outcome. It can also be applied to already developed areas, but still requires a 2/3 affirmative vote. 2. Landscaping and Lighting District. LLDs are used for a wide variety of purposes; in 1992 Los Angeles County approved a Countywide LLD for open space acquisition. They can technically be enacted without any vote at all; however, in recent years it has been considered appropriate to have an advisory vote. An area in Solano County known as Green Valley established a landscaping and lighting district by advisory vote, whose purpose was to support purchase of development rights on agricultural lands within the Green Valley area. The Geen Valley district generates about $70,000 per year (770 parcels x $90/yr.), and an inflator clause permits this to increase by approximately 2-3% per year. A closely related funding structure, called a Benefit Assessment Dishict--BAD for short --has also been used for open space conservation purposes, most recently in Santa Clara County. That district recently survived legal challenge and is now looking at annexing additional areas into the District. The rationale for the Santa Clara district is that land conservation benefits urban properties, and therefore can be reasonably assessed to identified urban areas. 3. Local Bond Issuance. Bonds can provide an excellent, reliable source of acquisition or capital improvement monies; however, they require a 2/3 affirmative vote, and this has proven very difficult to achieve even in highly supportive areas such as Marin County. The last known successful local 2/3 bond vote for park and open space purposes was in 1988 in the East Bay, where a $225 million local bond measure was approved by a 68% affirmative vote. Local funding should be thought of in the context of a comprehensive conservation program. Purchase of land or conservation easements will be one of several mechanisms that can and will be used to secure the San Luis Obispo greenbelt. In that context it is hoped that our citizens will understand and support the contribution that they will be asked to make to the community's future. 93 MEMORANDUM February 13, 1996 TO: Open Space Financing Task Force FROM: Bill Statler, Director of Finance SUBJECT: BACKGROUND MATERIALS ON OPEN SPACE FINANCING While there is .certainly a great deal of work ahead of the task force in preparing an open space financing program for Council consideration, a significant amount of work has already been done on this to -date, including: ■ Preparation of a comprehensive financing plan in 1993 by Economic Research Associates (ERA) as part of the Open Space Element. Open space financing forum held in July of 1994. In addition to the ERA analysis which is being distributed to you in its entirety, attached are two Council agenda reports that summarize our work to -date in financing open space preservation: ■ Council agenda report dated August 16, 1994 summarizing the results of the open space financing forum held on July 18, 1994 and providing background materials on the findings and conclusions of the ERA study. Included as an exhibit in this report is a proposal submitted by Dr. Lauren Brown at the forum regarding the preparation of "A Quality of Life Action Plan" that addresses open space preservation as well as other community service and facility needs. ■ Council agenda report dated May 24, 1994 outlining two basic approaches to open space financing ("do something now vs comprehensive approach") and recommending holding an open space financing forum. 0SQ-13STAT.MEM 011 city of sari LUIS OBISPO H-Mn�ma COUNCIL AGENDA REPORT FROM: John Dunn, City Administrative Officer Prepared By: Bill Statler, Director of Finance SUBJECT: RESULTS FROM OPEN SPACE FINANCING FORUM CAO RECOMMENDATION MEETING DATE: ITEM NUMBER ■ Consider the results from the recent community forum on financing open space preservation. ■ Direct staff to evaluate the comments made by forum participants, including the proposal submitted by Lauren Brown, and return with an analysis and recommendation for further action. ■ Authorize staff to meet with the Land Conservancy to discuss ways they can assist the City in implementing the open space element and, depending on the results of these discussions, return with an agreement for services for Council approval. DISCUSSION The community forum on financing open space preservation held on July 18, 1994 was very well attended. There were about fifty participants representing a broad range of interests. The forum began with presentations by City staff on the general purpose of the forum, key goals and objectives of the recently adopted open space element, status update on the parks & recreation element currently under review, and options for financing open space preservation. Provided in Exhibit A are the materials distributed by staff at the forum. A general discussion followed on whether we should set aside funds now for open space purchases, and if so, what the best sources of funding would be. A compilation of the comments, suggestions and ideas presented by participants is provided in Exhibit B. During this discussion, Dr. Lauren Brown presented written materials (Exhibit C) on his vision of how the City should go about funding a wide variety of "quality of life" improvements, including open space preservation. The forum concluded with a brief survey of the general thoughts and impressions of those attending on open space financing issues. A summary of responses to the survey is provided in Exhibit D. Initial Review of Forum Results Although the staff would like an opportunity to more fully analyze the results of this forum before preparing a recommended financing program for Council consideration, one of the strong themes that came forward from the forum was the need for the City to use the existing funds available for open space (about $1.4 million) before implementing a more aggressive ongoing program. In essence, there was consensus on the need for the City to demonstrate the tangible benefits of having funds available for open space preservation before we will be successful in generating broad based community support for raising the additional revenues necessary for a meaninpful onen space acouisition nroeram. '"ik-111;IIIi�Ip1}� city Of SAn LUiS OBtSpO lii;% COUNCIL AGENDA REPORT During the discussion, both before and after the presentation by Lauren Brown, there was an overall sentiment that an active open space/parkland acquisition program would be for the benefit of the entire community. Therefore, the fairest way to pay for it would be with a multi -source financing program, with everyone paying in some way, as opposed to a single - source financing approach, which would weigh most heavily upon and penalize a particular group of people. Using the property transfer tax proposal as an example, there were expressions that it could be explored as a part of a "package" which had everyone paying something to become part of the solution, but there was no favor for it as the "stand alone" source of financing open space. Before this can begin, however, we need clear direction on acquisition candidates and priorities. For example, there are about 33,400 acres in the greenbelt area of the open space element. Obviously, not all of this area would be necessary, desirable, or financially feasible to purchase as open space; other strategies will need to be used for protecting these areas. We need to identify the most important properties for us to purchase given the amount of property to be preserved, other protection strategies available to us, and our limited financial resources. The Land Conservancy of San Luis Obispo County is experienced in preparing the type of information that will be necessary for us to develop in order to make wise acquisition decisions. Specific areas where the Land Conservancy can help the City include: ■ preparing an overlay of land ownership ■ inventorying existing public ownership and easements within the greenbelt ■ preparing an open space and greenbelt base map ■ assisting in landowner contacts ■ assisting in developing purchase priorities based on their findings and the criteria included in the open space element Based on initial contacts with the Land Conservancy, we believe the cost for these services will range between $15,000 and $25,000, which can be funded through the open space funds already set aside by the Council. Accordingly, we are recommending that the Council direct staff to discuss with the Land Conservancy ways they can help the City in implementing our open space element, and depending on the results of these discussions, return to Council with an agreement for your approval: EXHIBITS A. Community forum materials distributed by City staff 1. Agenda 2. Open space element summary 3. Parks and recreation element status update 4. Overview of options for financing open space preservation B. Compilation of comments, suggestions and ideas from forum participants C. Written material provided by Dr. Lauren Brown at the forum D. Summary of survey responses E. Letter sent to all forum participants requesting follow-up information summarizing the results of the forum (if requested, a copy of this agenda report has also been sent to them). COMMUNITY FORUM FINANCING OPEN SPACE Exhibit ---- 1. PRELIMINARY COMMENTS AND PRESENTATION'S (JD) A. Overview - basic questions (1) Is it a community objective that the City preserve/acquire Open Space? (2) Should this be a near -term or long-term goal? (3) What are possible sources of financing for Open Space acquisition? (JM) B. Explanation of City's adopted Open Space Element (1) What is the community value of open space? (2) What does the Element set forth as the City's policies? (3) How is Open Space defined? (AJ) (4) What are the ways open space can be preserved? (PL) C. Explanation of City's Parks and Recreation Element (under preparation) (1) What is it? (2) What is it intended to do? (3) What are some initial conclusions? - (BS) D. Possible sources of financing to obtain above objectives (1) What are the identified potential sources of financing? (2) What are the more workable, probable financing mechanisms? (3) Is there a best one (or best combination)? 2. DISCUSSION, RESPONSES BY FORUN4 PARTICIPAINTS (1) Comments, ideas, suggestions 3. DEVELOPINIENT OF SUGGESTED ACTION PLAIT (1) Survey of Forum participants (2) Reporting back on results 4. SUMMARY OF "WHERE TO, FROM HERE?" A special "thank you" is given to each of you for being here, for being interested in this issue, and for helping to create a solution to a long-standing community concern. 9'7 Exhibit l- Z CITY OF SAN LUIS OBISPO OPEN SPACE ELEMENT SUMMARY The Open Space Element defines open space. 777e Open Space Element defines Open space as all of the following: land or wafer area which remains in a predominately natural Or undeveloped state. Such lards protect and preserve the corrununiry's natural and historical resources, define the urban boundary, and provide visual and physical relief from urban development. Open spaces may consist Qf small portions of a parcel or large trocts of land. Stich lands may include farming and grazing; creels, marshes, tiv(1tershed, and floodplains; scenic resources, plant and animal habitat; historic and archaeological resources; and passive recreation areas.Open- space that 'is carefully planned and effectively managed can serve as the cotolyst for physical development which provides for the safe,), and health, as 'veil as the beauty, of the carrrnruniry. Active recreational uses, such as ball fields, swimming pools, golf courses, community and neighborhood parks, and similar uses, are governed by and provided for in the Parks and Recreation Element. Although these areas do not strictly "teat the definition of open space, they provide nta.ny of the some benefits and are viewed as complentenlary to designated open space. The following categories of open space are importow to the beauty, health and welfare of San Luis Obispo: natural areas & natural resources; fond for the production Of food and other products of economic value; cultural, historic, and archaeological resources; passii-e recreational uses; _ public health and safety (laird with hazardous conditions & public resource areas); areas dcsigr;ated to provide spatial definition (i.e, urban edge); scenic resources. " The Open Space Element establishes a City greenbelt. The Greenbelt Map defines the greenbelt boundaries. Specific policies and programs are provided for the greenbelt. �'S The Open Space Element identifies specific resources to be protected. For each type of resource goals, policies, and programs are stated to provide the protection. The resources addressed include: hills and mountains; creeks; marshes, seeps, vernal pools, lakes, ponds, and other wetlands; grassland communities; plants and animals; hazard areas; historic, archaeological, and cultural resources; outdoor recreation; and urban edges. The Open Space Element contains strategies for protecting open space. The main protection strategies include: minimizing land use impacts through design regulations & site planning; mitigating impacts that do occur by replacing disturbed resources on- or off - site; acquiring partial interest or ownership of open space areas easements, dedications, or other form of acquisition. The proposed strategies are not -intended to be exhaustive. Open space protection programs include direction that the City should pursue implementation of long-term financing mechanisms. gNM\ASEIIAP.WKS Exhibit 3 City of San Luis Obispo Parks and Recreation Department PARKS AND RECREATION ELEMENT UPDATE The Parks and Recreation Element, one of several sections of the City of San Luis Obispo's general plan;is a master plan for a balanced park and recreation system. The approved document will allow for the development of park facilities and recreation programs that best meet the needs of the citizens of San Luis Obispo. The Element will: Analyze the existing Parks and Recreation System Determine where recreational needs are not being met Present a plan to meet those needs Citizen participation is an important part of the Parks and Recreation Element Update. To secure input, the department has held several community meetings, distributed a needs questionnaire, and will soon conduct a phone survey. After gathering this information a draft element update will be reviewed by the Parks and Recreation commission in October. The initial conclusions presented to the commission will include a need for: Youth Athletic Fields. There are 2,900 children in this community involved in soccer, baseball, softball and football. There are 10-12 fields available for use. Perhaps twice that many are needed to adequately meet existing needs. Neighborhood Parks. Research indicates that residents in at least five neighborhoods do not have access to a local park. Gymnasiums. Programs such as baseball, volleyball and exercise have over 2,000 regular participants. The Parks and Recreation Department has one gymnasium to meet their needs. The Element will contain short and long term solutions to address these needs, along with many others. The Element itself must be reviewed and approved by the Park and Recreation Commission and the Planning Commission prior to submission to the Council. The public is encouraged to ro mment at any of the hearings that will be cmiducted. APC Financing Open Space i , eservation Exhibit - .. WHAT ARE THE OPTIONS? In conjunction with preparing the open space element, a comprehensive financial plan was prepared by Economic Research Associates (a national firm specializing in these kinds of analyses) on the options available to the City in funding its open space preservation goals. This report was completed in February of 1993 and is available from the Department of Parks & Recreation upon request at a cost of $4.00, which covers the direct cost of printing. The following is a summary of key findings and recommendations from this report: General Findings & Conclusions •H 'If the City wants to commit itself to a significant program of open space preservation and acquisition, it has the Financial capacityto do so through a combination ofregulation andpurchase. This report demonstrates that the Citycouldfmance lhepurchase of$lOmillion to $20=dbonia open space acquisitions. Newrevenue sources would have to be implemented to do so; however there are a broad range ofrevenue options available to the Cityif open space purchase is a high priority use ofliauted public resources." no- 'The City should exhaust its police power regulatorymethods forpresertdng open space, such asresourc.e protection ordinances, clusterzoning, andsubditison dedication requirements, before relying on public funds to purchase land for open space. Given the liavted amount of funds availa ble, public funds should only be used to purchase Ian where no other recourse for preserva lion is feasible." _ Funding Options The plan presents and discusses in detail a wide range of funding options for purchasing open space when it can not be preserved some other way. It identifies several financing scenarios for the amount and kind of open space that could be preserved. Attached is an excerpt from the report summarizing the following information for each of the 23 funding sources evaluated in the plan: Financing method & brief description rt JEmistingslatus •H Who p2ys rt Pros & cons as a Financiug source m*-- Howit is enacted rt Possible uses (purchase, improvements or maintenance) Leading Resource Candidates The following is a summary of leading resource candidates and the value of open space purchases they could fund, assuming bond financing over a 30 year period. Approval Requirements , Special General Funding Annual I Purchase Source Dcscri lion ____Purpose Purpose Revenue Potential General Set tax rate of S.05 per S100 of assessed value Two thirds not S1,200,000 S16,000,000 Obligation (5% increase in general purpose property taxes voter applicable Bonds or about S10.40 per month for a S250,000 home) approval Sales Tax Set local rate of 1/4% Countywide Count) -vide S1 500,000 S18,750,000 Revenue Bonds Set local rate of 1/2% 2/3 voter ap ry mai voter an ry S3.000.000 S37 i00,000 Assessment Set rate at S5.50 per month for SFR parcels, set Council after not S1,200,000 $14,118,000 District Bonds eauNalent rates for MFR & nonresidential parcelsI protest hearing applicable Limited Obli ation Bonds So ortcd ti Increases in Gcocra/ Fund Sources`. Utility Increase existing rate 71vo thirds Council S1,228,000 S15,350,000 Users Tax from 50b to 7.2595 voter approval Maiority Tranisent Increase existing rate TWo thirds Council S390,000 S4,875,000 OccupancyTax from 10%to 11S% voter approval Maioritv Property Set own rate — increases from existing rate of Two thirds Council S800,000 510,0001f)()0 Trans rer Tax S0.55 per S1,000 of value to $4.40 per S1,000 voter approval Majority AV W < _+ L' e ' c c C [ c d o C c d C c c 7° c c c c a E = E; O E o f o E u o o f o f o _ c o E c c p c E p _ • o • - ,c • • o • v u = • - _ • o • _° '°' E E u E E u E E u E u E E v u° u E E 97 n E E E Q n E < _ ■ < _ d < r < _ < _ d c E < _ < _ t < O w c O c • C r e u e• CD ° L C O E e 0 0 : : e e 6° . aCL D .•r 2 =° i E■ c O O V 7 D•[ w C o E c c c -> i w c ; x D o °'d n> o i o r C. u c o o• w E E o E •= > S C. a c_ ■ n C o g e v E- ` L o c• d o a r L 7 < E c G o _ •_ C 9 o a: O X o > o v e t • c c• c C. p c E c D c D o c : '� n o E 9 • 7 a c D: c � c L U c?° C a i r O d I?: u >° E E < 7 9 > > •u D y w u ° L L 7 7 - • r _ C O p n u a [ u C O 0 O C C V 7 X >• V 7 x ; x > UO C 7 .. p 7 0 ID ■ 7 C i 7 V • o a i r O V C 7-E o• i a ° 7 = 0 • c o + G u• O 7 E C O[ p z u z O a¢ c w• t� • E Z a c a cc)u ¢ D i i 7 c Z u a r c �. o: P a C ■ o ' ° u x c o° ■ ° u E c u c `o u M E 7= o= - )! o V V C■ r 0 a a >' c ■ c• • > V u _� • a r Z • p x ■ o • L C n w Z o o < u 2 5 ti • t o u u �°, U a 5 z u O i ;! 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C c G � • p L O O 0• C _ - _ ■ • ■ ° 7 • • ° o 7 - • O u i ° u ° V - j Y u c u [ u --•, [ o L° C 6 - C C c r p 9 r C 9 j`" c y r O 0 j 9 0 O .�. 3 r 7 o u c o ° c `c ° i c U U` ° s o U v e U c n;- a° U 7 �- ■ U ° u 3 3 - � n ) - o c • • • ' E E C M .2 `o n V • [ G • Do 0 C c ° `o o Y a cL d E ■ o w O m a c c • o E n c r n c o •- r - r - o u d o o 0 0. a o n_ o• o o d� 0 O N • y r Q ° • ° u G E o c w _ G 9 O; u u u a o° c a'°= O - [ E n c n+ c ° a ° °• n _ a° _ E o E u E ° n e o • L u i i ■ O ° E v; D - w lo o = a e r E o uo d d vi < < O o o u u - c o o a C ° LL r ■ • _ d • • • • ■ ° c° x x O • LL ~ Y 7 • O ° O • F o 3 -ILi c e 6 p E i V 6 i • i t c i o 1•- L _ D - • o Y c __ o n • c c u c c 103 Exhibi Community Forum on Financing Open Space Preservation July 18, 1994 COMMENTS, SUGGESTIONS AND IDEAS FROM FORUM PARTICIPANTS The following is a compilation of the comments, suggestions and ideas generated by the participants at the community forum on financing open space preservation held on July 18, 1994. ■ Resources for financing open space should come from a broad community -wide revenue base, since the whole community will benefit. This supports the concept of using an assessment district as a primary resource in financing open space preservation. ■ In identifying key pieces of open space to preserve, we should consider cultural resources as a high priority (for example, converting a farm house to a community resource; preserving native american resources). ■ Increasing the transient occupancy tax (TOT) would be an acceptable source of financing open space acquisitions. This would enable a significant portion of our open space acquisition to be paid by those who visit our community. It would have a minimal impact on tourism since the TOT rate is not a major factor considered by tourists in determining their travel plans. ■ The utility users tax would be a good source of funding open space, since it is also a broad based financing source. ■ Written materials distributed by Dr. Lauren Brown at the forum identify a number of concept. His proposal would: Fund a broad range of "quality of life" programs, including open space preservation. Raise between $34 million annually for this purpose, an increase of about 10% in the City's current budget. Set a 10 year program that would need to be renewed if it is to continue beyond this period. Use a "pay-as-you-go" approach for funding capital improvements because of the 10 year time frame. Create an advisory body of 7 to 9 members representing a broad range of interests in the community to develop this program. ■ Financing programs should be as broad based as possible, which argues against an increase in the property transfer tax. Would it be possible to place a fee or tax for this purpose on our water and sewer bill? Apl ■ Small pocket parks should be part of our open space preservation program. ■ We should consider the financial goals of land owners from whom we might purchase property. For example, creating an income stream for them through a life estate or other method might result in overall lower costs than direct acquisition. ■ The property transfer tax should not be used as a primary funding source; we need to consider the economic impact of additional closing costs on buyers and others who sell to new property owners (ie. large appliances; landscaping). ■ We should focus our open space preservation efforts on what the City can do. The City has been much more successful than the County in preserving open space. Although regional wide efforts are desirable, we shouldn't allow our ability to act to be constrained by others. ■ In considering the "comprehensive" versus "do something now" approach to financing open space, we need to consider the following: - the financing source needs to be broadly based - increasing the transient occupancy tax is not easy, especially in terms of its potential impact on our tourist economy - increasing the property transfer tax is not fair because it would be so narrowly based - in considering general obligation bonds, the need to achieve a two thirds voter approval is not so bad, because it assures that there is in fact broad based support for the program - in developing support for new revenue sources, we need to be site specific in identifying the open space properties we would buy - the financing source should not be specific to individual groups; it needs to be broadly based, to involve the whole community. ■ In crafting an open space preservation financing program, we need to ask ourselves: what approaches have others taken in successfully generating community support for financing open space acquisitions (ie. Sonoma County has a quarter cent sales tax; an assessment district 'for open space preservation was recently approved in Los Angeles County)? what works best for the landowner (ie. creating an income stream, installment sale, life estate, trust fund, etc.)? ■ Before developing new resources, we need to wisely use the funds we currently have available for open space acquisition [$1.4 million currently available]. ■ Increasing the county -wide sales tax by one half or one quarter percent would be a good financing source. 1p,r ■ The utility users tax should not be considered as a primary funding source for open space acquisition since it shifts a disproportionate share of financing to business, where utilities are an important resource in the manufacturing process. ■ Even though an assessment district approach would be broad based, it can be very regressive on a flat basis; as such, perhaps it should be used in combination with other sources. ■ We should consider allocating a specific percentage of the budget for open space acquisition. ■ Until we have some demonstrated successes in open space acquisition, we should use pay-as-you-go financing rather than debt financing. ■ We need to move along in our open space acquisition - we need to accomplish something specific; then we will be able to generate community support for future long- term financings. ■ We should seriously consider the concepts outlined in Dr. Brown's proposal. ■ We should focus any initial purchases in the greenbelt area using existing resources that are available [$1.4 million]. ■ We need to identify the most important parcels that need to be acquired in order to complete the greenbelt. ■ We need to demonstrate tangible success in acquiring important pieces of open space before proceeding with a major financing program ■ Property should only be purchased from willing sellers. ■ We need to solicit interest from land owners and involve them in the planning process. ■ We need to develop more youth athletic facilities. In creating the above listing, we listened and listed and gave equal weight to everyone's input. While there was a great deal of consistency in the suggestions, there needs to be a follow-up process, as incorporation into the staff recommendations. OS\7-18CKNS.1A1P /o6 Exhibit. A Quality of Life Action Plan for San Luis Obispo The Need The city of San Luis Obispo has established itself as a city that is firmly committed to maintaining its environment and quality of life. Specific examples include proposals to maintain a green belt around the city including farm land and hillsides, to maintain a large amount of open space within the city, to construct bicycle and walking paths along the San Luis Creek in an extension of downtown creek -side park and plaza, and to preserve historical buildings. All of these projects, and more like them, if executed properly would not only maintain, but greatly enhance our environment and quality of life and ensure its continuance for future generations. Such projects have a significant monetary cost. In recent years the primary means by which San Luis Obispo has used to finance such projects are the traditional ones that put the main burden on businesses and landowners, either through taxation or through restrictions on the ways in which landowners are permitted to use their land. These approaches have the effect of placing the burden of the large financial costs for the projects on a relatively small part of the population. A Proposal for a New Approach in San Luis Obispo This is the city that has voted repeatedly, often with large majorities, to adopt various proposals that are seen as protecting our quality of life or our environment. A list of such votes are summarized in the Land -Use Element as adopted by the City Council recently. Further, during the recent debates regarding the various provisions of the Land -Use Element there has been strong input from the business community that it, too, is very concerned about the protection of the quality of life in San Luis Obispo. In turn, many in the environmental groups have indicated that they are serious about maintaining an environment that is supportive of healthy businesses. Consequently, I believe that the city of San Luis Obispo, if effectively led by a coalition of business, environmental, neighborhood, agricultural and other groups, would respond positively at the ballot box to approve a measure that would provide financing to be used for a broad'quality of life' program that would include acquisition of open space or development rights. But it should also address broader opportunities, such as an extension of the Mission Plaza, bike paths, parks, and other improvements in the community. This should be a long-term, comprehensive program. It should be bold. It should challenge our whole city to be willing to put real money where we have professed our hearts to be. It should be a broad -based revenue -raising measure so that everyone in the community is making a contribution. It should be discussed widely, with full public input, culminated with voter approval. %7 There are several specific elements to this proposal: 1. The mayor and city council should appoint a broad -based advisory committee of 7 - 9 people with representation from business, environmental, neighborhood, agricultural and other groups to evaluate and prioritize various proposals to enhance the quality of life. This committee should be constituted following the 'November elections in order to avoid politicizing the process and in order to make this a project to be shepherded by the 1995-96 city council. 2. The committee would also consider various revenue -raising measures that would raise sufficient funds to finance the list of projects. Cost-effectiveness should be a paramount concern. I believe serious consideration should be given to a combination of taxes, including increases in sales tax, property tax, motel and restaurant taxes and other so that all who benefit from the enhancements to the community would contribute financially and so that the burden is not concentrated on any single group. The total raised from San Luis Obispo should be $3,000,000 to 54,000,000 annually, which is approximately 10% of our current city budget. 3. Contact with other cities and with the county should be made to encourage them to participate in a county-NNride program. This would enable a regional approach and make possible consideration of bold county -wide programs, as well as individual city projects. This would also make possible the utilization of a sales tax increase, which can only be implemented on a county -wide basis. 4. The levy should have a sunset after 10 years, with continuance of the program requiring fresh voter approval. 5. The funds so raised must be restricted only to the approved projects and not be used to cover general city expenses. 6. The committee would also prepare proposed language for the ballot measure. 7. The city council would be consulted at appropriate times as to progress of the committee's deliberations and would ultimately approve the list of projects, the proposed revenue measures and the wording of the ballot measure. 6. Following approval by the city council, the proposed measure would be circulated as widely as possible with interested groups, businesses, and interested individuals taking the lead in obtaining adequate signatures to place the measure on the ballot for the June, 1996 primary election. This process would be utilized as an essential part of educating the public about the opportunity and be an important step toward generating the broad support needed for the program. 7. The advisory committee would also periodically update the list of approved projects and work closely to advise the city council of new opportunities. Advantages Approval of this concept would place San Luis Obispo in a leadership position as a community with the willingness to put its money where its heart has been. If supported by all segments of our community this could do much to unify the city behind a common vision. It could increase pride that we were willing to adopt the most broadly based taxes to achieve special projects that most communities only dream about. It could create an excitement about what choices our community might make in using these funds. We could think realistically of targeting completion of a large number of projects to create parks, preserve scenic hillsides and a greenbelt around the city, create bicycle and hiking paths and a variety of other projects that seem out of reach now. It could enhance our county as a destination for'green tourism', particularly if the entire county were interested to participate. Progress could be tracked with public displays that would allow the community to see where its money is going and how much progress has been made. Solicitations for individuals to make dedications of land or development rights could be sought to supplement the program and might be more likely to occur if the whole community was also contributing. This proposal would not create additional bureaucracy because each of the proposed taxes is already being collected and no extra machinerywould be needed. Annual retail sales in the city of San Luis Obispo have been in the range of $400,000,000 to $500,000,000. Therefore, a 0.5% sales tax alone could raise approximately $2,000,000. The other taxes could raise a comparable amount and make sure that the total package is not seen to be regressive taxation. A fund of the magnitude of $3,000,000 to S4,000,000 annually could allow San Luis Obispo to achieve some very significant, bold goals. Our example could be used to challenge the county to approve a similar tax which could be used in a broader program to preserve many of the natural resources throughout the county. Offsetting the Disadvantage The obvious disadvantage is that these taxes represents an additional cost that voters in this state have been very reluctant to approve. There may be concern among retail businesses, motels and restaurants that customers would make the decision to go elsewhere. I believe this possibility could be offset by public programs to inform and to instill a pride in what our community is doing. This is a special city, and has led the way before, in matters such as the no -smoking in public places ordinance. This is an idealistic concept, but if effectively presented to our citizens, I believe our voters would approve such a bold proposal. Respectively submitted by Lauren R. Brown /of Community Forum on Financing Open Space Preservation Exhibit D July 18, 1994 SUMMARY OF SURVEY RESPONSES The following summarizes survey responses from participants at the community forum on financing open space preservation held on July 18, 1994: © Should we set money aside now for purchasing open space? Yes 26 No 6 J © If yes, what are the best sources for buying open space? ..... and if you don't necessarily think it's a "best source", which sources would you support? Source Best Source Would Su ort General obligation bonds 0 19 Sales tax increase 12 28 Assessment district 24 30 Utility users tax increase 0 9 Transient occupancy tax increase 4 13 Property transfer tax increase 2 10 Program suggested by Lauren Brown 25 33 Use existing resources 4 19 Use funds set aside for water supply 2 6 development for combination open space preservation & Qroundwater © Should parkland purchases be part of an open space financing program? (purcbase only — not developmen4 maintenance orprograms) • Passive use parks? (na ture reserves, trails) Yes 29 No 1 • Active use parks? (neigbborbood parks, playing fields) Yes _:F�25 No 10 I:OSSURV //0 41f1�1d6��� pIIPI Exhibit Aw�I�N city of sAn Luis oBjPso WM=2��� 990 Palm Street/Post Office Box 8100 * San Luis Obispo, CA 93403-8100 July 28, 1994 Dear "Financing Open Space Preservation Forum" Participants, I want to thank you for your participation at the recent community forum on financing open space preservation. Attached for your information is a compilation of the comments, suggestions and ideas generated by forum participants. Also attached is a summary of responses from the brief survey conducted at the end of the forum. One question asked at the forum that we did not have an answer for at that time was the size of the greenbelt area in the City's open space element. We have since measured this_area, and the total comes to about 33,400 acres. As we discussed at the forum, it would not be necessary, desirable, or financially feasible to purchase all of this property as open space; obviously, other strategies will need to be used in protecting these areas. We plan to bring the results of the forum to the Council at their August 16 meeting and seek direction on where to go from here. We will be happy to provide you with a copy of the agenda report upon your request. Again, thank you for your participation at this forum. If you have any questions on the attached materials, or require additional information, please do not hesitate to contact me. We appreciate your being there and offering your thoughts on commencing this most important activity in preserving and enhancing the special qualities of San Luis Obispo. Sincerely, (: ]jministrative mn Officer P.S. If we have made an error in your mailing address or the spelling of your name, please contact Ella Goven, Department of Finance, at 781-7130 so we can correct this information for future updates on the City's open space program. ATTACHMENTS ■ Comments, suggestions and ideas generated by forum participants ■ Summary of survey responses OThe City of San Luis Obispo is committed to include the disabled in all of its services, programs and activities. �� Telecommunications Device for the Deaf (805) 781-7410. MEETING DATE: �!'Ii��+►��`�"�����il� city of san Luis OBIspo .S-L V - 9 COUNCIL. A.GENOA, REPORT' ITEM NUMBER; FROM: Jolm Dunn, City Administrative Office SUBJECT: , OPEN SPACE PLAN 1MPLEM -Oi CAO RECOMMENDATION Approve program for soliciting community interest in adopting a City property transfer tax in order to begin implementing the recently adopted open space element of the General Plan. DISCUSSION In follow-up to the Council's adoption of the open space element on January 18, 1994, key staff members recently met to discuss our next steps in implementing the policies and programs set forth in this plan. Two basic approaches emerged from this discussion: ■ Comprehensive approach ■ Do something now approach The following describes each of these approaches and summarizes the advantages and disadvantages of each: Comprehensive Approach There are a number of programs established in the open space element which outline the work activities ahead of us in achieving our overall goal of protecting the open spaces identified in the plan. Basic strategies include relying upon our planning policies and working with the County to honor them; protecting open space as a condition of development; and acquiring open space, either through easements or outright purchases. The plan provides a number of criteria that should be followed in determining properties that should be protected through acquisition versus other methods. Under the "comprehensive" approach, we would analyze each of the programs set forth in the plan, and working with the Parks and Recreation Commission, develop priorities in assigning specific activities and tasks. These recommendations would then be submitted for Council approval, and work would begin in accordance with the program priorities and resource allocations approved by the Council. One of the key elements of this overall workscope would be the identification of specific properties - using the criteria set forth in the plan - that are strong candidates for protection through acquisition along with a specific financing plan that would identify revenue sources as well as evaluate the use of debt financing vs pay-as-you-go funding strategies. ■ Advantages of this approach. Experience from other cities shows us that the most successful open space acquisition plans proceed from clearly defined purchase objectives. Without being able to answer the question "what open space do we have to buy and how do we pay for it?", it can be very difficult to generate community 2 �1 �hhlllfG������ill c i ty of s a n J i s o B r s p o COUNCIL .AGENDA, REPORT support for the new resources (and potential debt financing) that will be required to implement a meaningful acquisition program. n Disadvantages of this approach. Realistically, it will take 18 to 24 months to complete this work effort given current resources, other high priority planning activities underway, and the time that will be necessary to accommodate the public review and conununity participation process. During this process, we may lose whatever momentum we may have at this point in implementing at least some program components of the open space plan. Further, we wwould lose up to two years of whatever new revenue source we might be able to put in place, as well as any key opportunities for purchase that might come our way during this period. Do Something Now Approach As part of the open space element preparation and review process, a financing plan was developed which identified strategies that the City might use in protecting open space. While the plan stressed that there are a number of strategies that should be used in protecting open space before acquisition is used, it did present a number of options available to the City in financing those selected properties that might best be protected through purchase. One of these is the implementation of a local property transfer tax that would augment the General Fund's ability to acquire open space. Provided in Attachment A is a fact sheet on this revenue source which was formally introduced to the Council by the Revenue Task Force as part of the Strategic Budget Direction Workshop held in March of 1993 in conjunction with the 1993-95 Financial Plan process. If set at a rate of $4.40 per $1,000 of value, this revenue source under "normal" conditions would generate about S800,000 annually, which could support debt service on an open space acquisition program of about $11 million. Rather than waiting 18 to 24 months to begin a financing program, the Council could implement this new revenue program at this time, setting aside the proceeds for open space acquisition purposes. As discussed in the attached fact sheet, the enabling ordinance itself cannot formally earmark these revenues solely for open space purposes (this would require two-thirds voter approval); but the Council can by policy allocate them for this purpose. ■ Advantages of this approach. We would take a significant step forward in our commitment to open space acquisition right away. Although we may not know the specifics of what our acquisition strategies and financing program should be, we know one thing clearly: it will require more ongoing resources than we are currently making available - which is zero. From this perspective, it is a low risk implementation program, since the likelihood that we will be generating more than we will ultimately need is very remote. This will also allow us to build-up funds on an interim basis for ultimate acquisitions, and provide us with the means to meet any unique purchase opportunities that may come our way during the next two years. It is important to note that the "do something now" approach would not replace the "comprehensive" approach; they would go forward concurrently. The "do something now" approach 113 a,11r�`h'c�ll��11 city of San itAIS OBISpo UNCIL AGENDA REPORT simply starts us on the road to implementation sooner than the "comprehensive" approach. a Disadvantages of this approach. As discussed above, the most successful open space financing plans are based on clearly understood purchase objectives which have significant community support. Until these specific purchase objectives been developed and community support for them achieved, it may be premature to implement a financing program. We could be perceived as purchasing the cart before we have a horse. On the other hand, if -we're pretty sure that we need to prepare for and accelerate our purchase of property for open space preservation purposes, then it is wise to start as soon as possible, and not defer an essential activity. Community Review .Program Before submitting this item for Council decision -making, we recommend holding a conununity forum on the advantages and disadvantages of these two basic approaches. In addition to general advertising, notices would be sent to a broad range of City advisory bodies and community groups informing them of this forum. Additionally, this notice would indicate our willingness to meet further with any advisory body or community group at their convenience. A listing of prospective advisory bodies and community organizations that would receive this notice is provided in Attachment B. After this community review period, we anticipate returning to Council in mid -July with a staff recoirnmendation on this item. SUMMARY Each of these two approaches has advantages and disadvantages. Fundamentally; it is a choice between making a major commitment in this area now (let's get on with what we know we want to do) versus making a more cautious, deliberate choice (not taking any substantial action on open space acquisition until there's a fully developed, specific program). Ultimately, this is the Council's policy choice. However, we believe that the community review program outlined in this report will assist the Council in making this decision, and accordingly, it is our recommendation to proceed and to accurately report the results of this process to the Council by mid -July. ATTACHMENTS A. Property transfer tax fact sheet B. Prospective notice recipients 0swVt0vMN.CAR J, Attacnment _ PROPERTY TRANSFER TAX FACT SHEET Miat is a property transfer tax? This is a tax resulting from the transfer of real property ownership based on the value of the property. Is this tax in place at this time? Yes. Section 11901 of the Revenue and Taxation Code (RTC) establishes a statewide property transfer tax at the rate of $1.10 per $1,000 of value (or $275 on a property with a transfer value of $250,000). T3'7io pays this fax? Both the buyer and the seller are jointly liable for payment of the tax; however, it is customary for this tax to be paid by the buyer. T3'Iro'currently receives the revenue? The County and incorporated cities share equally in the tax revenues - in essence, -each has its own rate equal to $0.55 per $1,000. In the unincorporated areas, the County receives all transfer revenues at the $1.10 per $1,000 rate. Can cities increase their tax rate? Yes. Cities are allowed to set their own rate separately from the provisions of RTC Section 11901. In this case, the County would retain the entire proceeds from the $1.10 rate specified in this section. Have any other cities adopted their o)vn property transfer trues? Yes. At least 22 cities in 10 counties have adopted their own property transfer tax rates. Rates range from $1.10 per $1,000 in Torrance to $10.00 per $1,000 in Berkeley. How much revenue would an increase generate? This depends on two key factors: ■ The value of property transferred annually. ■ The tax rate established by the City. For comparison purposes, the following is a summary of property transfer tax revenues received by the City over the past five years at the current rate of $0.55 per $1,000, and the amount that would have been received at rates ranging from $2.20 per $1,000 to $10.00 per $1,000. Actual Revenues @ Revenues @ Revenues @ Revenues @ Revenues @ Revenues S2.20/S1,000 S3.30/S1,000 S4.40/S1,000 S5.00/S1,000 S10.00/51,000 1992-93 $ 69,600 S 278,600 S 417,600 $ 556,800 S 632,700 S1,265,400 1991-92 1990-91 68,400 94,300 273,600 410,400 547,200 621,800 377,200 1,243,600 1989-90 137,800 565,800 758,200 864,350 551,200 826,800 1,102,800 1,252,700 1,728,700 2,505,400 1988-89 136,700 546,800 820,200 1,093,600 1,242,700 2,485,400 /Ar What authority is required to increase this fax for the City? If the revenues will be used for general purposes, Council approval is required. If the revenues will be used for a special purpose, two-thirds voter approval is required. How can these revenues be used? These revenues can be used for any legitimate government purpose - street maintenance, parks, recreation, police, or fire. They can be formally earmarked; however, as noted above, this would require two-thirds voter approval. If designating the use of these revenues is desirable, the Council could allocate them by policy to a special purpose such as parks and open space. For example, the 1993-95 Financial Plan includes several policies regarding the allocation of General Fund revenues. However, the implementing ordinance itself could not earmark them without taro -thirds voter approval. Wiy is this an appropriate Cityfunding source? The City's real property transfer tax will be paid by the buyers of San Luis Obispo properties. As such, it is an appropriate Nvay for new residents to pay their fair share of the amenities that have already been provided by existing residents. For properties changing hands through local buyers, the transfer tax reflects the enhancement of property values by the facilities and programs that the City provides. Hofv )wuld these revenues be collected? The County could continue to collect these revenues for us. Although this would require a formal agreement with the County, initial discussions with theirs have been favorable. When could an increase be effective? Theoretically, an increase could be implemented immediately upon Council approval. However, an effective date that is 120 to 180 days from the date of adoption is recommended in order to ensure a smooth transition for the County, businesses directly involved in processing property transfers such as escrow, title and lending companies, and any individuals or companies with properties currently in escrow. Are there any other implementation issues? No. There has recently been a court case against the City of Los Angeles for increasing the city property transfer tax. The court decided in favor of the City of Los Angeles, and this ruling was subsequently upheld at the appellate court level. This appellate court decision, along with another case addressing this same issue, was taken to the Supreme Court, where review of both cases was denied. Accordingly, there is no longer a legal basis for delaying implementation of property transfer tax. /40 Attachment Open Space Financing Forum PROSPECTIVE NOTICE RECIPIENTS City Advisory Bodies Business Improvement Association Environmental Quality Task Force Parks and Recreation Commission Planning Commission Community Groups Building Industry Association of the Central Coast Business Coalition Chamber of Commerce of San Luis Obispo Citizens Planning Alliance ECOSLO Foothills Neighborhood Association Land Conservancy of San Luis Obispo County League of Women Voters Residents for Quality Neighborhoods San Luis Drive Neighbors San Luis Obispo Association of Manufacturers and Distributors San Luis Obispo Board of Realtors Association San Luis Obispo Property Owners Association Sierra Club Other identified groups desiring a presentation/discussion // % Section D COMMUNITY FORUM BACKGROUND MATERIALS J Z L 1 A r _ i= =96. 0= _= QiC ~_� F ==t qw-_ 1 = = 7 = 1 I - C - • - - z m i r. - 1 - - i - - - - 1 1 �� - T� - 1 city of SM Luis OBISPO liw.p 990 Palm Street, San Luis Obispo, CA 93401-3249 OPEN SPACE FINANCING TASK FORCE COMMUNITY FORUM PRESERVING OPEN SPACE - HOW SHOULD WE PAY FOR IT? The City of San Luis Obispo has adopted a goal of creating a greenbelt around the city. Such a greenbelt - or what we call "open space" - will help protect the rural character and beauty of our community. This letter is to request your attendance at an upcoming community forum on the subject of financing open space preservation. This forum is scheduled for: Date: Monday, April 29, 1996 Time: 6:45 p.m. Place: City/County Library, Community Room 995 Palm Street, San Luis Obispo In 1994, the City Council adopted an Open Space Element of the City's General Plan. This document serves as the City's overall plan for establishing, protecting and maintaining open space. With adoption of this element, the City began work on the many programs set forth therein. The Council scheduled a community forum in the summer of 1994 to solicit thoughts and views from a wide range of community groups and individuals to discuss advantages and disadvantages of moving forward with financing plans, as well as the possible funding sources available. This forum identified a strong community interest in open space conservation, which led directly to the designation of the San Luis Obispo Greenbelt and the creation in late 1995 of a broad - based task force by the City Council. The Open Space Financing Task Force's charge is to evaluate and recommend to the Council ways of providing long-term funding for open space conservation. A roster of Task Force members is provided on the reverse. The Task Force has met over the past two and a half months and developed several alternatives for funding support, as well as related matters such as a citizen oversight committee for project review, etc. Enclosed is a summary of the Task Force's preliminary findings, along with the full report. In addition, we will be happy to meet with your group at your convenience to further discuss financing options for preserving open space. The Task Force will consider the public input from this forum and make its recommendations to the City Council in June 1996. If you have any questions concerning this forum or require addition information, please do not hesitate to contact Neil Havlik at 781-7211, or Bill Statler at 781-7125 regarding financing options. Sincerely, Penny Rappa, Chair Open Space Financing Task Force City of San Luis Obispo �t— The City of San Luis Obispo is committed to include the disabled in all of its services, programs and activities. 1 Telecommunications Device for the Deaf (805) 781-7410. OPEN SPACE FINANCING TASK FORCE MEMBERS The Open Space Financing Task Force was created by the Council on November 7, 1995. Nominations for membership on the task force were solicited at that time from a broad range of environmental, business, neighborhood, and other community groups, with the goal of appointing members who would represent a wide spectrurn of viewpoints. On January 23, 1996, the Council appointed the following 15 task force members (the group that nominated the member is noted in italics): ■ Lauren Brown, San Luis Obispo Association of Manufacturers and Distributors ■ Bill Coy, San Luis Obispo Chamber of Commerce ■ Joe Delucia, Downtown Business Improvement Association ■ Gary Felsman, Sierra Club ■ Carol Florence, San Luis Obispo Property Owners Association ■ Charlie Fruit, Building Industni Association of'the Central Coast ■ Alan McVay, Central Coast Salmon Enhancement ■ Penury Rappa - Task Force Chair, League of Women Voters ■ Paul Ready, City of San Luis Obispo Planning Commission ■ Amy Shore, ECOSLO ■ David Smith, Land Conservancy of San Luis Obispo County ■ Sally Stoner, City of San Luis Obispo Parks do Recreation Commission ■ Marty Tangeman, Chorro Street Neighborhood Group ■ Pat Veesart, Sierra Club ■ Dan Williamson, ECOSLO/Cal Poly 120 /t z /23 T /4.Ir city Of M San Luis OBISPO Community Forum on ...... PRESERVING OPEN SPACE - HOW CAN WE PAY FOR IT? The City of San Luis Obispo recently adopted a new Open Space Element of the General Plan. This element serves as the City's overall plan for identifying, preserving and maintaining open space in our area. As we begin work on the various program as outlined in this plan, we need to ask and answer two key questions at this time ..... Should we begin setting aside funds for purchasing open space? If so, how should we pay for it? In developing the open space element, a financing plan was prepared that identified a wide range of options for purchasing open space, if it cannot be preserved some other way. We encourage every one who is interested in this topic to attend a community forum to discuss ways of funding our open space preservation goals: WHEN: Monday, April 29, 1996 TIME: 6:45 p.m. WHERE: City/County Library Community Room 995 Palm Street We all want to do our part to improve our City. Your thoughts and ideas are important - please come and share them with us! /24 city of sAn Luis oBispo 990 Palm Street, San Luis Obispo, CA 93401-3249 April 17, 1996 FOR IMMEDIATE RELEASE CONTACT PERSONS: See Last Paragraph OPEN SPACE FINANCING TASK FORCE COMMUNITY FORUM: PRESERVING OPEN SPACE - HOW SHOULD WE PAY FOR IT? The Open Space Financing Task Force is announcing a very important community forum to discuss creating a long-term source of funds to pay for the acquisition of open space in and around the City. The forum will be held on Monday, April 29th at 6:45 p.m. in the City -County Library Community Room. The City of San Luis Obispo has adopted a goal of creating an open space greenbelt around the city. Such a greenbelt will help to permanently protect the rural character and beauty of our community. In late 1995, the City Council appointed the Open Space Financing Task Force to develop recommendations on the best long-term strategy for funding open space preservation. The Task Force is chaired by former City Council member Penny Rappa, and consists of a cross-section of business, environmental, and neighborhood leaders (roster enclosed). "We are a diverse group, but when it comes to open space protection, we have found a lot of common ground", said Chairperson Rappa. "The Task Force has achieved a very V�The City of San Luis Obispo is committed to include the disabled in all of its services, programs and activities. ��� Telecommunications Device for the Deaf (805) 781-7410. Page 2 City of San Luis Obispo Open Space Financing Task Force Forum high level of consensus regarding the importance of preserving open space and protecting the physical qualities that make San Luis Obispo special. The challenge is in figuring out how to finance our preservation efforts, and this is where we need the input of the community". The Task Force is hoping to receive a substantial amount of public comment at the forum. The Task Force will use this information to refine its preliminary recommendations and present a final report to the City Council on June 11, 1996. The goal is to place an open space financing measure on the November 1996 ballot for consideration by the entire community. Further details regarding the forum and the preliminary recommendations of the Task Force are enclosed. In addition to Chairperson Rappa (544-8852), other members of the Task Force available for media comment include Lauren Brown (544-8524), Pat Veesart (546-0518) and Marty Tangeman (541-2800). leg CITY OF SAN L UI S OB I SP O OPEN SPACE FINANCING TASK FORCE PUBLIC FORUM AGENDA Monday, April 29, 1996 Community Room, City -County Library 6:45 p.m. - 10:00 p.m. I. Welcome and Introduction (Rappa) II. Background (Tangeman) A. Open Space Element Goals B. Available Open Space Funding C. "Saving Special Places" Study D. Open Space Financing Task Force Mission 1. Purpose 2. Process 3. Next Steps III. What Others Have Done/What We Can Do (Havlik) IV. Issues and Options (Veesart) V. Preliminary Task Force Findings (Brown) VI. Public Input/Questions (Rappa) /Z9 QUESTIONNAIRE 1. Would you vote for an increase in taxes to support an open space protection program for San Luis Obispo? Yes 34 No 22 2. Would you be more willing, or less willing, to vote for an increase in taxes for open space Protection if 25% of the increase was set aside for the acquisition and/or development of parks? More Willing 15 Less Willing 33 3. Please indicate below the total annual revenue that you think should be raised for open space protection and/or parkland acquisition and development. (0)-10 $1 million 12 $1.5 million 10 $2 million 8 Other $ (?) -2 —T-$500,000)- 4. I -low million) much would you be willing to pay in additional taxes each month to support the a revenue which you indicated in your answer to question no. 3. HNFmillion) Less than $5 per month 22 $5 to $10 per month 18 $10 to $15 per month 8 . 5. The Task Force is considering different funding proposals. Please indicate below if you would support each one. If you would be willing to support more than one of the options, please indicate your order of preference. Do Not Support Support 1. Raise all funds from assessment 21 17 district. -- - 2. Use mix of assessment district (50%), utility tax (37.5%), and hotel tax (12.5%). 16 23_ 3. Other: Development taxes Sales tax & TOT -- Assess . , TOT, prop. tr. - 13 2 ran s c 4. No tax i>�pae @ sment for all 10 7 6. Indicate below any concerns or suggestions you wish to bring to the attention of the Task Force. (SEE ATTACHED SHEET) 130 CONCERNS AND SUGGESTIONS FROM 4/29 FORUM UESTIONNAIRE Community involvement means more than raising taxes. PG&E accelerated depreciation .on Diablo, losing $5-13 million for SL Coastal Unified School District -- no more taxable property of tax rolls. Open space draws tourists -- save it! Base assessment on square footage, not per unit -- unfair to smaller homes. Residential rates based on property value. Add passive recreation component (i.e. continuous Class I bike lane, mountain bike trail, horse trails). Work with County to develop TDC program. Combine hotel tax, assessment district and transfer of property tax. Nonresidents pay full transfer of property tax; residents build up balance in assessment district, using balance toward their transfer of property tax. Stepped program; sunset increase. County should share cost, not property owner. Be responsive to mobile home/low or fixed income. Consider awareness -building program (Sierra Club hikes, slide presentations, voluntary nature of program). Can't trust General Plan which gets often amended for development purposes. Easements are good solutions. Endangered species protected areas. Coordination with existing SLOCO planning criteria. Assessment district source would induce development. To halt building would be a financial tragedy for the building industry. Majority non -property owners will be making the voting decision for property owners. Suggest large sample survey on several options. 131 SUMMARY OF PUBLIC SPEAKERS SPEAKER #1: Against taxing option. Distributed handout to OSFTS members re present taxation SPEAKER #2: - Felt bridges, streets, schools and libraries need assistance, not greenbelt Felt assessment district tax is unfair SPEAKER #3: - Clear definition of "open space" needed - Object to 25% for parks and equipment - Question voting process for open space, not parking structure, etc. - Double taxation issue; further research re property tax option SPEAKER #4: - 75% assessment district appropriate - In -fee purchase is expensive (use only as last resort) - Question of maintenance of open space - Mistrust of use of funds - Recommend stepped process;sunset clause SPEAKER #5: Public awareness is important - Development used as possible funding source Development is defined by open space Land increases in value because of lack thereof; open space will increase land values SPEAKER #6: Private property vs. open space rights Should not be a resident charge SPEAKER #7: Lack of knowledge of what exactly is being acquired SPEAKER #8: Visitors/hotel occupancy will decrease if TOT increased Concerned about no tourism representative SPEAKER'#9: Use percentage of existing utility tax SPEAKER #10: Suggest allowing only property owners to vote Recommend reversionary clause /32 Public Speaker Summary Page 2 SPEAKER #11: Public is "taxed to death" Promises made, then taxes manipulated Request for funds by government, then public is forgotten SPEAKER #12: Unclear re steps taken on advisory vote SPEAKER #13: Suggests anti -impact fee Smaller assessment district derives greater benefit Suggests paying for nondevelopment SPEAKER #14: Suggests incorporating the protection of wildlife and endangered species into program SPEAKER #15: Long-term residents vote only SPEAKER #16: - . Consider mobile home issue SPEAKER #17: City and County work jointly for authority SPEAKER #18: Ineffective County Cluster Ordinance and development application process creates - real need for open space acquisition SPEAKER #19: Concerned agricultural lands will be strangled Feels agriculture is working as an open space option; no threat of clustering effect SPEAKER #20: - Development impacts agriculture through water use SPEAKER#21: More education needed for agricultural community More communication re open space is not about acquiring lands, rather development rights only / :�03 CITY OF SA N L UIS OBISPO OPEN SPACE FINANCING TASK FORCE •:.71-4(- . Summmiy Report on PRELIMINARY FINDINGS April 1996 /.$ f City of San Luis Obispo OPEN SPACE FINANCING TASK FORCE SUMMARY REPORT OF PRELIMINARY FINDINGS San Luis Obispo - A Special Place San Luis Obispo's Mission was established in 1772, the fifth mission in the chain of 21 missions established by the Spanish Franciscan fathers. San Luis Obispo grew very slowly in the nineteenth century, with the coming of the Southern Pacific Railroad in 1894 opening up the area to the rest of California. The City's historical isolation from the major metropolitan areas to the north and south have allowed our area to retain its pastoral and natural image. This identity is a strong contribution to the quality of life for our residents and acts as a strong attractant to visitors from other areas. In order for us to retain our quality of life, the greenspace and open areas and a strong visitor economy, it is necessary that the City government and our citizens become stewards for preserving the best of what is left. Development pressures, a continuation of the trend for the past thirty years, will continue into the future. Now is the time to plan and act if the unique beauty of our area is to be saved for the enjoyment of future generations. Purpose of the Open Space Financing Task Force The Open Space Financing Task Force was established by the City Council in November 1995 to develop recommendations for the Council's consideration on the best strategy for long-term funding of open space preservation. Creation of the task force was preceded by a number of key planning steps in preserving the City's open spaces, the most important of which was the adoption of the Open Space Element of the General Plan in 1994. The Open Space Element sets forth a vision of what open space areas we should protect and why. It also identifies strategies for achieving this vision; among them is the purchase of open space when other approaches will not be successful. Thus, the task force was charged with developing such a funding program. Outlined below is a summary of Task Force findings. The full report is available by calling 781-7211. Task Force Guidelines The task force was given the following guidelines for consideration in preparing a funding program: ■ Brad funding base. Ensure that no one sector of the community is singled -out in funding the program. ■ Revenue requirements. Identify the amount of new revenue that should be generated annually for this purpose and ensure that the proposed program is capable of generating this amount. ■ Clear, simple program. Place a higher priority on those funding sources that can be most clearly communicated to the public and easily administered by the City. ■ Fiscal independence. Focus on funding sources that are within the City's existing authority to implement without approval by other governmental agencies. ■ Timely. Complete work so that any proposed strategy can be acted upon by the Council by the deadline for placement on the November ballot. KEY PRINCIPLES The following principles formed the basis for the task force's recommendations: ■ Pun:hase of open space is part of a comprehensive program. Direct purchase of properties will only be a part of achieving the City's open space preservation goals. Other strategies include donations, conservation easements, resource protection ordinances, dedications through the development review process, cluster zoning, and transfers of development credits. Easement vs. fee. Wherever it is appropriate, purchases should be of a conservation easement (or development rights), leaving land in private ownership and farming. Fee title should be reserved for areas of important natural resources or public access. -1- 1j.5- Open Space Fina. Task Force - Prelintinmy Findings ■ Annual goal. The task force determined that an appropriate level for the funding program to seek was between $1.0 millon and $2.0 million annually. ■ Initial pay-as-you-go program. The initial program should be on a "pay-as-you-go" basis and not involve debt financing. ■ Annual review. Financial status of the program, progress in achieving open space goals, and need to continue the program should be reviewed by the Council annually. ■ Oversight committee. Establish a citizen oversight committee to review project proposals. ■ Use of the funds. The primary focus of this funding program should be to protect open space; however, up to 25% of the funds could be allocated for parkland capital improvements (excluding golf courses). Studies and staffing costs are also excluded. ■ Majorfty voter approval. The task force supports revenue sources that can be approved by majority voter approval or by the City Council. ■ Funds dedicated. The task force determined that revenue sources should be dedicated solely to the purpose of open space conservation and parkland capital improvements. FUNDING OPTIONS The task force considered a large number of possible funding options and combinations. However, in meeting the three key goals of being broad -based, under the City's control and not subject to denial by a narrow segment of the community, the task force narrowed its consideration to the two basic options. These are (1) an assessment district, and (2) a combination of assessment district, transient occupancy tax and utility users tax. Assessment District Only Advantages. (1) May be implemented by the Council or majority voter approval; (2) May be dedicated for a specific purpose without two-thirds voter approval. Disadvantages. (1) Focus on property owners only; (2) Assessment amounts would be fixed regardless of the value of the property or the income of the property owner. Combination of Sources. This option implements a combination of three funding sources: assessment district, transient occupancy tax (TOT) and utility users tax. Advantages. (1) Provides a very broad funding base by directly affecting property owners, residents, businesses, renters and visitors. Disadvantages. (1) May be difficult to communicate to voters, especially since the impacts of the utility users tax can vary significantly from user to user; (2) Revenues from utility tax and TOT portion option cannot be legally earmarked for specific purposes by the Council or by majority voter approval. Instead, a two-thirds vote approval would be needed. Impact of Options on the Typical Homeowner The following summarizes the cost impacts of the two options on a "typical" single-family homeowner on a monthly basis: Range of Annual Revenues P1�-ated Afonthly Cost: Assessment District Estimated A4onthly Cost: Combination of Sources $1.0 million $4.37 $3.54 $1.5 million 6.56 5.32 $2.0 million 8.74 7.08 NEXT STEPS After receiving community feedback, the task force will meet to discuss these comments and finalize recommendations to the Council. The final report should be completed and available for public review by May 21 and formally presented to the Council by earfy June. 2 - 1360 City of San Luis Obispo OPEN SPACE FINANCING TASK FORCE Report on PRELIMINARY FINDINGS April 1996 /37 City of San Luis Obipso OPEN SPACE FINANCING TASK FORCE PRELIMINARY FINDINGS BACKGROUND Purpose of the Task Force The Open Space Financing Task Force was created by the City Council on November 7, 1995 in order to develop recommendations for the City Council's consideration on the best strategy for long-term funding of open space purchases. Creation of the task force was preceded by a number of key planning steps in preserving the City's open spaces. The most important of these was the adoption of the Open Space Element of the General Plan by the Council in January of 1994. The Open Space Element was crafted over a four year period of extensive community review and discussion. The resulting plan sets forth a clear vision of what open space areas we should protect and why we should protect them. It also identifies a number of strategies for achieving this vision, and among them is the purchase of open space when other approaches will not be successful. Now that the City's open space objectives have been set, it is time to focus our efforts on specific implementation tasks. As noted above, one of these key implementation tasks has been assigned to the task force: developing a long-term funding program for consideration by the Council. Task Force Goals The Council specifically charged the task force with the following goals in preparing recommendations for a long-term open space funding program: ■ Broad fielding base. Ensure that the recommended funding program is a broad -based one, and that no one sector of the community is singled -out in funding this program. ■ Revenue requirements. Identify the amount of new revenue that should be generated annually for this purpose, and ensure that the proposed funding program is reasonably capable of generating this amount. ■ Clear, simple program. Place a higher priority on those funding sources that can be most clearly communicated to the public and easily administered by the City. In short, a simple funding program is preferable to a complicated one. ■ Fiscal independence. Focus on funding sources that are within the City's existing authority to implement without approval by other governmental agencies. This goal recognizes that the funding program must be "doable", and this means that the City must be able to independently control its future to the maximum extent possible. ■ Timely. Complete work by the end of May so that any proposed strategy that requires voter approval (or where an advisory vote would be desirable) can be acted upon by the Council by June 25, which is the deadline for placement on the November ballot. -�1- Open Space Financing Task Force - Preliminary Findings Task Force Review Process Beginning in February of 1996, the task force has met every week for the past eight weeks in arriving at the preliminary findings, conclusions and recommendations presented in this report. Over this period of time, the task force has intensively reviewed and considered a number of background materials and issues, including: ■ Open space element of the General Plan ■ Comprehensive report on open space financing options prepared by Economics Research Associates (ERA) in 1993 as part of the open space element preparation process ■ Results of the previous open space financing forum held in July of 1994 ■ Analyses of the other key strategies available to the City in protecting open space other than purchase of land or easements ■ Status of the City's current open space protection efforts and existing funds available to purchase open space ■ Findings of the report recently prepared by the SLO Land Conservancy on Saving Special Places which identifies high priority candidate properties for purchase based on their unique resource features and property owner interest. ■ Analyses of what other agencies do in funding open space protection ■ Comprehensive discussion of the protection strategies and funding options available to the City in preserving open space. KEY ASSUMPTIONS AND PRINCIPLES The following summarizes the key assumptions and principles adopted by the task force which form the foundation for the specific recommendations set forth in this report: ■ Limited role of purchase in preserving open space. It is important to emphasize the limited role that direct purchase of properties can and should play in achieving the City's open space preservation goals. There are a broad range of other strategies as set forth in the City's open space element and the ERA study that must be used as well in protecting open space, including donations, conservation easements, resource protection ordinances, dedications through the development review process, clustering zoning, and transfers of development credits. In short, given the City's limited fiscal resources, purchase of open space - whether an easement or in fee - should only be used as a preservation strategy when all other alternatives are unlikely to achieve the City's open space protection goals. ■ Opportunities for the use of funds Because there are a number of strategies for preserving open space besides direct purchase of land it is important to make the most effective use of limited funds. While clearly articulated policies are necessary in determining when purchase is appropriate over other opera space preservation strategies (and these are set forth in the City's open space element), a specific listing of all of the City's property purchase priorities is not necessary before implementing a funding program, nor perhaps even desirable in terms of assisting the City in conducting purchase negotiations with property owners. In these initial stages, the City is best served by using -2- Open Space Financing Task Force - Preliminary findings its limited funds in making strategic purchases based on the opportunities that will present themselves over time due to property owner interest and other circumstances. In short, the City should not wait to prepare a formal list of specifically identified properties for purchase before implementing a funding program. ■ Conservation easements vs ',fee title" Even in those cases where acquisition may be our best preservation strategy, outright purchase of properties (fee title) may not be necessary to achieve the City's protection goals. For example, in those cases where open space is currently in agricultural uses, and retaining its agricultural use is desired, this may be achieved more cost-effectively by acquiring a "conservation easement" rather than direct purchase of the property itself. In this case, use of the land under a conservation easement will be restricted in perpetuity solely to agricultural uses, and at a much lower cost than if the property is purchased in "fee". In combination with the "non -financial" strategies discussed above, this approach will help the City achieve open space goals in the most cost-effective manner. ■ Annual amount to be raised With over 33,000 acres identified in the City's greenbelt, it is clear that even the most aggressive of funding programs would not be successful in protecting all open space areas through acquisition alone. In balancing the magnitude of the potential costs of acquisition with the use of other protection strategies, the task force proposes that the funding program raise between $1.0 millon and $2.0 million annually. ■ Initial pay-as-you-go program. There may be a role for the use of debt financing in the future as the program demonstrates its value to the community or opportunities arise that require more capital than can be generated in a short period of time from this funding program. However, the initial protection program should be funded on a "pay-as-you-go" basis. ■ Annual review. The financial status of the program, progress in achieving open space goals, and the need to continue the supplemental revenues implemented under this program should be reviewed by the Council annually. ■ Oversight committee. To assist the Council with this review, an oversight committee composed of interested community members should be established for this purpose. One of this committee's key responsibilities should be issuing a formal report annually to the Council and the community on the status of the program in achieving open space goals and the use of the funds generated under this funding program. ■ Use of the funds. The primary focus of this funding program should be on protecting open spaces. However, the task force recommends that up to 25% of the new funds be allocated for parkland acquisition and development. Use of this funding for golf course acquisition and development should not be allowed. Further, only "hard costs" should be funded through this program; studies, plans and staffing costs should be excluded. - 3 - /f Open Space Financing Task Force - Preliminary Frndings ■ Maintenance of open space. After acquiring open space properties, it is important that the City be good stewards of the land, and care for the a properties ppropriately. Accordingly, over time, the funding program needs to set aside reasonable funds for the maintenance of the open space areas that will become the City's responsibilities. It is important to stress that funding for maintenance under this program should be restricted solely for open space; this funding program should not be used in maintaining developed park areas. • County -wide approach needed in the long-term. The task force strongly believes that in the long-term, a County -wide approach will be necessary in preserving open space, and that a sales tax measure would be the best way of funding this program. However, it will take time and significant efforts to bring this kind of program about on a County -wide basis. In the interim, one of the best strategies available to us is to implement an effective local program that can serve as a model for a broader, County -wide program. At such time that a serious County -wide proposal is before us, the City should be very supportive of this concept, and be prepared to discontinue the local funding sources committed to this program in support of a County -wide sales tax for this purpose. Until this happens, however, the City should exercise its own initiative in funding open space. In short, while a more regional approach is desirable, it is probably not attainable in the near term; this is an area where the City will have to take a leadership role - and lead by example - if it wants to begin achieving its open space goals. • Ballot measure. The task force recommends that any new revenue sources for open space protection be placed on the ballot for voter consideration as an advisory measure. ■ Majority voter approval The task force supports revenue sources that can be approved by majority voter approval or by the City Council. We are not supportive of revenue measures that require a super -majority (such as two thirds voter approval that would be required for general obligation bonds or for tax increases formally restricted for special purposes). This would allow a very narrow segment of the population (less 34% of the voters) to prevent a very large portion of the population (potentially up to 66%) from achieving agreed upon, high priority community goals. ■ Broad funding base; clear simple program. In meeting the Council's goals in these areas, the task force has strived to present specific funding options that are broadly-based in their impact on the community, and can be clearly communicated to the public. ■ Dedicated use. The task force believes that it will be much easier to generate community support for new revenue sources for open space if these new sources can be dedicated solely to this purpose. However, with the exception of the assessment district option as discussed below, none of the leading candidates can be formally earmarked without two thirds voter approval. As discussed above, the task force is not supportive of new revenue sources that require this extra -ordinary level of approval. This leads to a dilemma in balancing these conflicting goals of majority voter approval, dedicated use of -4- 141 Open Space Financing Task Force - Preliminary Findings funds, and establishing as broad a funding base as possible. For this reason, the task force has tentatively narrowed down the options to two core options: one which is little less broadly-based but can be dedicated to a specific use and still implemented by majority voter approval; and another that is broader -based and can be approved by majority voter approval, but can not be formally earmarked for this purpose. This second option asks the voters to trust that this and future Councils will be faithful to the underlying reasons behind why these new revenue sources were approved, without a formal legal requirement to do so. FUNDING OPTIONS The task force considered literally hundreds of possible funding options and combinations. However, in meeting the three key goals of being broad -based, under the City's control, and not subject to denial by a narrow segment of the community, only the following four funding sources emerged as leading candidates, which could be used in combination with each other: ■ Assessment district ■ Transient occupancy tax ■ Utility users tax ■ Property transfer tax The task force has narrowed its consideration to the following two basic options, which are further detailed in Exhibit A: Assessment District Only Advantages. This option could be implemented by the Council or majority voter approval, and could raise the annual target funding level recommended by the task force of between $1.0 to $2.0 million. It could also be dedicated for a specific purpose without two thirds voter approval. There are many ways that the assessments can be allocated, and this is one of the strengths of this funding source: the ability of the Council to "tailor-make" the assessment spread to meet specific concerns while crafting a very simple, clear program to communicate in terms of its costs and impacts on residential and non-residential property owners. Disadvantages. Drawbacks to this option include its focus on property owners only, and that assessment amounts would be fixed regardless of the value of the property or the income of the property owner. These concerns are partially offset by the fact that although it would only be applicable to property owners, this is still a very broad group of taxpayers; and that the amounts to be paid are relatively modest, which helps to offset equity concerns with flat assessments. Additionally, while this approach only directly affects property owners, indirectly some of these costs will be passed -on to renters and business tenants. Assumptions. As detailed in Exhibit A.1, this option is presented at the $1.0 million, $1.5 million, and $2.0 million levels, and is based on the following assumptions. (As noted above, - 5 - /4Z Open Space Financing Task Force - Preliminary Findings these can be easily modified; they have been selected for illustrative purposes only.) ■ Assessments are allocated to developed properties only: 85% to residential and 15% to non-residential (commercial, office, industrial). ■ Of the portion allocated to residential, multi -family residential (NUR) rates are set at 75% of the rate for single family residences (SFR). This is based on the population per household differences between SFR and MFR units based on the 1990 census. ■ The portion distributed to non-residential properties is allocated based on square footage. Combination of Sources This option implements a combination of three funding sources: assessment district, transient occupancy tax (TOT) and utility users tax. Advantages. This provides a very broad funding base by directly affecting property owners, residents, businesses, renters and visitors, and could raise the annual funding target recommended by the task force of between $1.0 to $2.0 million. Since the portions paid from TOT and utility users tax would not be fixed but would vary based on utility usage or hotel occupancy, this option better addresses equity concerns than the "assessment district only" option. Disadvantages. Because it combines a number of sources, it may become more difficult to communicate this program to voters, especially since the impacts of the utility users tax can vary significantly from user to user. Additionally, 50% of the revenues from this option can not be formally earmarked for specific purposes by the Council or by majority voter approval (although it would certainly be our policy intent to do so). This might also make it more difficult to communicatc this option to the public and to gain their support. This concern may be ameliorated by the creation of an oversight committee as recommended above which will report annually on the use of these funds. Assumptions. As detailed in Exhibit A.2, this option is presented at the $1.0 million, $1.5 million, and $2.0 million levels and is based on the following assumptions (the assessment district component is based on the same assumptions presented above). Overall Funding Mix rcent Assessment district 0.0% 7t!37.5% Transient occupancy tax 2.5% Utility users tax Open Space Financing Task Force - Preliminary Findings Impact of Options on the Typical Homeowner The following summarizes the cost impacts of the two options on a "typical" single family homeowner on a monthly basis as detailed in Exhibits A.1 and A.2: Range of A nnual Revenues Estimated Monthly Cost: Assessment District Estimated Monthly Cost: Combination of Sources $1.0 million $4.37 $3.54 $1.5 million 6.56 5.31 $2.0 million 8.74 7.08 NEXT STEPS Before finalizing our recommendations to the Council, individual task force members will be discussing our preliminary findings with the various groups that they represent. In addition, the task force will be holding a'community forum on its preliminary findings scheduled for Monday, April 29 at 6:45 pm in the City/County Library Community Room, 995 Palm Street. After receiving community feedback, the task force will meet to discuss these comments and finalize our recommendations to the Council. Our final report should be completed and available for public review by the end of May, and we plan to formally present our findings to the Council at a public meeting early in June. EXHIBITS A. Summary of two focussed options under consideration by the task force 1. Assessment district only 2. Combination of sources B. Matrix of advantages and disadvantages of the leading funding candidates C. Task force members H:OSTFFIND.REP c•� O CD lL O LyN ~^ r I . 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Nominations for membership on the task force were solicited at that time from a broad range of environmental, business, neighborhood, and other community groups, with the goal of appointing members who would represent a wide spectrum of viewpoints. On January 23, 1996, the Council appointed the following 15 task force members (the group that nominated the member is noted in italics): ■ Lauren Brown, San Luis Obispo Association of Manufacturers and Distributors ■ Bill Coy, San Luis Obispo Chamber of Commerce ■ Joe Delucia, Downtown Business Improvement Association ■ Gary Felsman, Sierra Club ■ Carol Florence, San Luis Obispo Property Owners Association ■ Charlie Fruit, Building Industry Association of the Central Coast ■ Alan McVay, Central Coast Salmon Enhancement ■ Penny Rappa - Task Force Chair, League of Women Voters ■ Paul Ready, City of San Luis Obispo Planning Commission ■ Amy Shore, ECOSLO ■ David Smith, Land Conservancy of San Luis Obispo County ■ Sally Stoner, City of San Luis Obispo Parks & Recreation Commission ■ Marty Tangeman, Chorro Street Neighborhood Group ■ Pat Veesart, Sierra Club ■ Dan Williamson, ECOSLO/Cal Poly MEETING AGENDA plect -Ft URI b ITEM # Planning is Lmironntcudd.4•wins OUNCI � .. -Y June 11, 1996 VCG-L'`R " y CAO ❑ FIN DIR "i I�f10A0 ❑ FIRE CHIEF yF/A7MANEY ❑ PYl DIR T CLERK1013I0, ❑ POLICECFIF'` Honorable Allen Settle, Mayor t� d MGMTTE.an4 ❑ Rec oIR I` and members of the-City Council ' 0 C EAR FILE ❑ uT:L D;R City of San Luis Obispo, City Hall 0 PERS;;P San Luis Obispo, CA 93401 I/&4:114 Dear Mayor Settle, and Councilmembers: I.am writing to urge you to support the recommendations of the City's Open Space Financing Task Force, and to go forward with all possible speed in implementing their proposed Open Space Assessment District. For many years now, I have been actively promoting the need for a long-term, stable funding source for acquiring open space lands in this community. I have worked with many of you, and with some of the members of your Open Space.Financing Task Force, to bring out some very early versions of the ideas for open space funding. I'm very pleased that some of these original concepts have found their way into your Task Force recommendations. I'm very grateful for the work that Lauren Brown, Penny Rappa, Dave Smith, and others have performed in finally bringing this proposal into active consideration by your Council. We are finally at the point where we can say that we've learned enough about this topic, and talked enough about it, so let's actually do somethine now that will create a lasting legacy for our community. The proposed Assessment District is balanced, it is fair, and it is feasible. All property owners would be required to pay a little, but all Droperty owners will also benefit from the district.. The revenue that will be generated to acquire open space in our community -- $1.5 million annually -- will be soundly invested to protect vital natural resources. This program will benefit property owners, renters, taxpayers, and visitors, for countless.generations to come. I look forward to your unanimous approval of this recommendation tonight. SincerelyKB. RECEIVED augh JUN.,, . 1_ lYyb 979 Osos Street,Suite ® .A-5 CITY COUNCIL, CITY-OSF.606 ISI Ll 5 0815- San Luis Obispo,California 93401 �i 805/544-8523 FAX 805/544.2703 MEETING , AGEND DATE AL.ITEM #A--L_ ha,-1 c ; ,` ✓ {—o �i UNCIL Q DSR �G J ❑ FIN DIR _ ❑-kMRNEY ❑ FIRECHIEF -- ❑ PW DIR l3-CLERIUORK; .❑ POLICE CHF. Boulders Open Space: ,• ❑ MGMTTEAM ❑ REC DIR Innovation at the Grassroots ❑ C D ILE ❑ UTIL DIR - — '❑ PERS DIR Boulder's Open Space program is the product of a long history of actions taken by the City ^ government and the citizens of Boulder in response to their concern for the preservation of buffer areas and the mountain backdrop. One of the first efforts to preserve the mountain backdrop was the purchase of Chautauqua Park at the foot of Flagstaff Mountain through a bond issue in 1898. In NO, the City was granted 1600 acres of land on Flagstaff from the federal government An additional 1200 acres was purchased in 1912. at the cost of$125 an acrel The Mountain Parc system now contains over 6 000 acres Since the early 1900's when Frederick Law Olmstead encouraged the City to preserve mountain backdrop and major waterways. Boulder's citizens have been concerned about protecting the foothills. In 1958, a charter amendment was passed. establishing a "blue line" above which city water would not be supplied. Citizens who helped pass the issue realized that this would slow development of the foothills, but not stop it. This, along with the fact that Boulder's population doubled between 1950 and 1960 led concerned citizens to organize an action group known as PLAN Boulder. The group has successfully campaigned for many important land preservation and land use issues. Citizen involvement in the open space preservation effort continued with public education a major focus. Council lent its support to the effort. A conference was sponsored by PLAN Boulder to further educate the public. "Greenbelts why and how" included speakers from the ci1y and coup ovenunent. Colorado Open Space Council.Bureau of Outdoor Education.planning consultants and other interested-groups. Committees were formed, slide programs presented, and local drivers sported bumper stickers supporting the greenbelt issue. As a result of a 1967 municipal election Boulder became the first city in the country to tax itself spsa Wally for the acaursrtron management and maintenance of open space. The measure to add 4/10 of one cent sales tax passed by a 57%majority an overwhelming demonstration of support in an era of citizen tax concern. Shortly after the election, the City Manager and City Council appointed an Advisory Committee on Open Space, and in 1973 Council created the.Open Space Board of Trustees to set policies and priorities for acquisition of greenbelt lands. In 1989 76%of voters added 3/10 of one cent to the sales tax for a period of 15 years to accelerate open space preservation. The sales tax revenues, coupled with passage of a charter amendment in 1971 allowing City Council to issue bonds for the acquisition of open space, set into motion an aggressive open space acquisition program. Bonds were agajn issued in 19802 1984 and 1989, and in 1986 achartq amendment providing more permanent Rrotection for open space lands was adopted with DassaL by 79%of the voters. The Boulder Valley Comprehensive Plan_ adopted by the City and County in 1978 recognizes open space as nrovidrng the basic structure for the Plan. Purposes for open space include: preservation or restoration of natural areas; preservation of water resources in their natural or traditional state;preservation of scenic areas or vistas, wildlife habitats, or fragile ecosystems;preservation of land for passive recreational use; preservation of agricultural uses and land suitable for agricultural production; utilization of land for shaping the development of the city utilization of nonurban land for-spatial definition of urban areas; utilization of land to prevent encroachment on floodplain; and preservation of land for its aesthetic or passive recreational value and its contribution to the quality of life of the community. {: ' Today,Boulder citizens eniov over 25.000 acres of open space-'n and around the City. Some of thek. 1 i., in agricultural production, preserving the historic nature of Boulder County while keeping the land open. for wildlife and passive recreational uses. In addition to the aesthetic pleasure of Boulder's Open Space, a extensive trail system is available for hikers and horseback riders. Bicyclists eniov riding on designated trailc._Picnicking and fishing areas also appeal to area residents_as well as a variety of educational Programs conducted by Open Spam staff. With annual visitation approaching 2 million per year, maintenance is becoming increasingly important to preserve the quality of Boulder's Open Space. As Boulder prepares for the 21st century,the need for Open space buffers between growing communities, close-in passive recreational use and preservation of wildlife and riparian areas remains. The success of the Open Space Program has been and will continue to be a direct result of citizen advocacy. Boulder's Open Space belongs to its citizens and their involvement as supporters,users or volunteers ensures a successful tomorrow for this special part of Boulder. RECEIVED JUN i U 1996 CITY CLERK SAN LUIS OBISPO,CA RICHARD SCHMIDT 112 Broad $tLe_eJSan.Luis Q, ispo, CA 93405 (805) 544-4247 COUNCIL 1Lr-Q,j Do s !-GAO ❑ FIN DIR mall:rschmldt@calpoly.edu ❑-ACAO ❑ FIRE CHIEF ' June 10, 1996 13—ATTORNEY ❑ PW DIR e-CLERKIORIC, ❑ POLICE CHF. MEETING AGENDA To the City Council: ❑ MGMT TEAM ❑ REC DIR DATE ��/ �' ITEM ❑ C R FILE ❑ LITIL DIR Re: Open Space Funding Plan ° PErssDn For those of us who have been trying to get the city moving on its open space acquisition program for years, coming to the point of this week's meeting should be a time for rejoicing, but instead it is a time of sadness. It is very sad that once again the city has touched gold and turned it, by perverse alchemy, into a very, very base substance. I urge you not to follow the recommendation of the financing committee to place their proposal as a single stand-alone item on the November ballot. This is a very bad proposal -- bad both for open space protection and for treating the people of this city in an unjust and inequitable fashion. This is a badly conceived measure, and in all likelihood it will deservingly be voted down. Then those who engineered this fiasco can say, "Well, I guess the people don't want open space after all, so let's forget about it." It is difficult to understand the agenda of those behind this proposal, unless it is to produce exactly the outcome described here. A number of things about this proposal are bothersome, including the following: 1. The People Have Spoken. The people of San Luis Obispo have already voted in an advisory election on the matter of protecting open space. The people overwhelmingly told you, their elected officials to protect open space The people have spoken: so quit stalling and just do it! We do not need another advisory election on the subject. Is this to be like state "water," where -- as Jerry James put it so well in his famous cartoon -- the people will just have to keep voting "till they get it right?" 2. Broadly-Based Funding. Any fair and equitable open space funding mechanism mustdraw its financial underpinnings from a wide range of community sources. The proposed funding mechanism fails this test: it draws its funding from only one source -- a radically regressive' property tax. REQUEST: That you adopt a truly broad-based funding strategy, which draws its funds from a How quaint of me to raise the issue of regressive taxes. Every tax is an act of social engineering. Of late,with government of the rich, by the rich and for the rich,we have turned more and more towards regressive taxes— things like sales taxes and"flat"income taxes and payroll taxes which only apply to the bottom rung of earnings (Social Security/Medicare) --taxes in short that levy the largest proportional burden against those least able to afford them, and spare those rich folk who dream them up. A just tax doesn't do that; it taxes inn propo iioVOE D means. Schmidt,Open Space Funding, Page 1 JUN t U 1W el1'Y CLCAK... , �;4N 1 lll�r}d4��•t"n variety of sources, not from a single source. (See proposals below.) 3. Radically Regressive. The proposed property tax levy is radically regressive in that it places the brunt of its burden upon owners of residential property, and hits commercial property very lightly in comparison. It leaves totally untaxed undeveloped parcels, thus sparing the speculator class having to pay anything at all towards open space protection. So, even as property taxes go, it is extremely unjust. Note, also, the following: A. The tax is not related to value. Thus the owner of a very minimal 900 square foot home at the bottom of the housing market (a person like myself, who just barely made it onto the lowest rung of home ownership) is taxed as much as the owner of a palatial 7,000 square foot hillside mansion. THIS IS NOT FAIR. IT IS A TRICKLE UP ECONOMIC TRANSACTION OF THE WORST SORT. It is, unfortunately, typical of the regressive measures the Dunn Dealers come up with these days at City Hall.' B. To illustrate the regressively unfair distribution of taxes between residential and commercial property, I will use figures from Exhibit A.1 , and assume the $1.5 million annual fund accrual level. My 900-square foot residence would be taxed $78.72, whereas 900 square feet of commercial space would be taxed $25.27, or less than one third as much. THIS IS NOT A FAIR DISTRIBUTION OF THE BURDEN OF THIS PROPOSED TAX. But it is also an economically stupid pattern of taxation. In specific, there are a number of subissues here: a. Housing is a necessity. It is a loss item for most of us which we put up with simply because we must have it. b. Commercial property, on the other hand, exists for the purpose of making a profit. Unlike residential property, it generates its own means to pay its taxes. c. Taxes paid on commercial property are deductible, as a cost of doing business, from the federal income taxes of the individual or business entity which owns the property. That being the case, they in effect "cost nothing": the cost of local taxes is passed along to the federal treasury. (All the blather about the difficulties of "passing along" such taxes to renters is thus pure nonsense. They don't need to be passed along to renters because they're passed along to the Feds.) Now, consider this: California is one of a minority of states which pays more into the federal treasury than it receives back from said treasury. A more sensible pattern of local taxation could retain more of this "surplus" federal taxation for local use. As a matter of both pride and common sense, you should be seeking means to make better local use of funds the feds now drain from our community and state. d. It is just plain stupid to tax ourselves in a manner that takes money out of our local economy (which is what homeowner taxation accomplishes) when we could instead adjust the tax schedule so that we reclaim money for our local economy which would otherwise flow to Washington (which is what taxes on business property accomplish). REQUEST: If you proceed with an assessment district tax as one of several methods for financing open space protection, that you adjust the relative taxation of homes and business Your sewer rates are similarly regressive. With my$10 water bills --achieved with stringent conservation-- I pay$40 in sewer fees,the identical amount paid by a wasteaholic with$200 water bills, even though there's a direct relation between the amount of water used and the amount of sewage created. Similarly, your new regressive garbage rates charge someone with orange bag service in the range of ten times more per unit volume than someone with premium service. You should be proud of your radical Reaganaut Gingrichism. Schmidt,Open Space Funding, Page 2 property so that 1, the distribution is EQUITABLE, and 2, to maximize the reclamation of "surplus" tax otherwise flowing to Washington so those funds can be used instead for local benefit. 4. Multi-Source Funding. A good open space funding plan will draw from many sources, thus distributing costs throughout the community. Wherever possible, there should be direct nexus between taxes collected and benefits received. Towards that end, the following proposals are put forth: A. That an assessment district tax, if used at all, be reduced in magnitude of tax, increased in equity, and provide only one portion of the overall funding. The rationale for this is clear from the above. B. That the council immediately enact a property transfer tax, a large portion of which or all of which will go towards open space financing. This is a highly appropriate tax for this purpose since it directly relates enhanced open space funding to the frenzy of buying and selling on the periphery of the city which will take place upon any annexation and subsequent development of land -- and ESPECIALLY SINCE SPRAWLING DEVELOPMENT OUTSIDE TODAY'S CITY LIMITS IS THE CAUSE OF LOSS OF OPEN SPACE -- i.e., a very close nexus. Much of this land was purchased by present owners for$2,500 or less per acre, and immediately upon annexation will be worth 100 to 1,000 times its cost. A tax on this unearned increment is both fair, and good public policy, for it returns to the public a small portion of the huge gift provided to select individuals by the public. Unlike an assessment, this tax would kick in only when the property transfers and money is already flowing. Also, unlike an assessment district, it will require the speculator class to contribute something towards solving the open space problem its activity creates. C. That the council institute an open space impact fee for all newly annexed land, such fee to be forgiven only if actual open space is provided in its stead. This, too, is justified by a nexus between the loss of open space and the need to protect other open space. D. That the council earmark a portion of the transient occupancy tax for open space protection. This could come from the existing tax, or from an increase in the tax. There are three rationales for this: a. The tourist industry is directly dependent upon the quality of our natural surroundings. Without open space and nature, San Luis Obispo would be just another roadside stop along a four-lane highway linking two large urban areas. Without open space we don't have much to market to tourists except a dumb little town with a Mission. That the tourist industry isn't beating the drum for open space protection is incredibly shortsighted. b. The people of San Luis Obispo have put approximately $4 million of public funds into advertising and promotion to benefit the tourist industry. (Most citizens don't know this, but it wouldn't be hard to inform them during the up-coming election cycle about this on-going drain on the public treasury!) It is time the people of San Luis Obispo got something tangible in return for their investment. Allocation of t.o.t. for open space protection would be a reasonable way to return some benefit to the people while also protecting the asset that has created our tourist industry. c. The t.o.t. is a good and just tax. It is a tax on luxuries (nobody must stay in a hotel or motel). It also hits beneficiaries of open space protection who are not residents and would not pay through other proposed means. This is also a painless tax. Nobody "shops" for low t.o.t. tax when looking for a place to stay, so it makes no difference if our tax differs Schmidt,Open Space Funding, Page 3 somewhat from that of neighboring communitieS.3 E. That the council commit the city to contributing a regular sum, on an annual basis, from its discretionary budgetary funds to the protection of open sem. Until Penny Rappa became the ringleader in pulling the plug on this practice several years ago, the city was contributing $700,000 annually to the open space fund. The city should do so again. There are a number of rationales for this: a. If citizens are to be asked to dig into their pockets for funds, the city should indicate it is willing to dig into its own pockets too. Put its money where its mouth is, in other words. b. The city appears to be in better financial shape today than when it pulled the plug on open space funding. The lack of funding appears to be a matter of preference and policy, rather than fiscal necessity. c. The city in the interim since stopping open space funding has had plenty of funds for other things it wanted to do, for example: establishing a costly, divisive and highly political "economic development" program; $5 million for a performing arts center, which the people of this city have never voted that they wanted (but they have voted that they want open space); another $5 million to purchase two firehouse sites when only one was needed, and the subsequent conversion of one into a"park"that was not a part of long-range park masterplanning; $1 million for acquisition of a "park-like place" in an area where no park is needed, and none is shown in the general plan; and the list of pork could go on. Clearly there are funds available for open space funding, but for some reason the council has chosen not to follow the mandate already provided by the people. The point is that THE PEOPLE HAVE ASKED-YOU AT THE BALLOT BOX TO FUND OPEN SPACE PROTECTION, AND YOU HAVE NOT. YET YOU HAVE FUNDED LOTS OF OTHER THINGS. A fair sense of priorities would dictate that you respond with some funds of your own. The Friends of Open Space are sufficiently concerned about the city's overall anti-environmental budgetary tilt and its implications for the protection of open space that it is prepared to circulate a voter initiative that would focus public attention on what the city is spending its money for, and would require that an amount matching that for economic development and tourist promotion be allocated annually for open space funding.° While it is too late to get this measure on the November ballot by petition, the council could place it there; or alternatively, citizens could circulate initiative petitions during election season and thereby educate the electorate on the city's betrayal of their previous open space mandate. On the other hand It might behoove the council to preempt this sort of citizen action by once again establishing regular municipal contributions towards this cause. With the council proving again it is listening to the popular mandate, it would then be unnecessary for citizens to circulate an initiative petition. REQUEST: To summarize, I request that the council establish a multi-source plan for funding This puts me in mind of a routine a former council member and I pulled on a hotel clerk when checking out of a San Francisco hotel after a conference we'd both attended. I asked what percentage the tax was, and when the clerk responded with whatever outrageous percentage SF charges, 1 said to my companion: "How outrageous!We shoulda gone on down the road to Daly City."The clerk was appalled. We laughed, and then explained this was just a bad local joke from our home town. ' See attachment for a draft of this initiative ordinance now being circulated for discussion. Schmidt,Open Space Funding, Page 4 open space protection, to include at leastthe following elements: 1. A property transfer tax; 2. An open space impact fee for newly annexed properties; 3. Transient occupancy tax contributions; 4. General city funds. 5. Avoidance of Bad Taxes. In coming up with a multi-source plan for open space funding, you should avoid "bad" taxes -- in other words, ones that are regressively attached to the purchase of necessities like electricity, gas, phone service, water, as well as a general sales tax. Such taxes place a disproportionate burden upon those least able to pay. On the other hand, any luxury tax (like perhaps an entertainment tax) would be fully justifiable, since such taxes can be avoided. 6. No Election Needed. I don't know who came up with the dim idea of holding an election to ask the citizens if they want to be taxed under this screwball proposal that is before you. One can only assume this was thought up by a provocateur who wants to sabotage the entire open space plan. If the council adopts a widely-based funding plan, there is no need for electoral approval, any more than there is when you don't ask the voters to approve raising garbage, water or sewer rates, or the CAO's salary and benefit package, or the purchase of multiple firehouse sites or "park-like places," or whatever else you don't put before the electorate. You have your mandate already; just do it! If you do, against all good judgment, decide to proceed with an election on open space funding, you must include a variety of more sensible possibilities. If you do decide to hold an election, there should be a variety of good funding options, so that the people can indicate a preference for those while also voting down the present ill-conceived and inequitable proposal. Personally, I think that's a dumb idea. But so is it a dumb idea to hold an election on a sure loser, unless your intent is to sabotage the open space plan. So I urge you not to hold an election on this matter, but instead . . . I urge you to come up with a broad-based plan, and simply enact it. Siq�erely, 'Richard Schmidt Attachment: Draft Friends of Open Space Funding Equity Initiative Schmidt, Open Space Funding, Page 5 Attachment "THE PARITY-FOR-ECONOMIC-STIMULUS-AND-OPEN-SPACE-PRESERVATION INITIATIVE" -- DISCUSSION DRAFT Be it ordained by the voters that the City of San Luis Obisp6 shall budget and set aside from its general discretionary funds an amount each fiscal year for the acquisition or other permanent protection of open space in the greenbelt as designated in the 1994 Open Space Element and Land Use Element of the city's General Plan. The amount of funds to be thus set aside shall be not less than the sum of all city funds allocated in the same fiscal year for all business . promotion and economic development activities, including staff costs associated with such activities. These set aside open space funds may be used only for acquisition or other protection of land, but not for staff or open space programming. Duration of Ordinance: This ordinance shall remain in force at least until the entire greenbelt designated in the forementioned General Plan elements is protected; at which time, by a four-fifths vote of the City Council, a ballot measure may be placed before the voters at a regularly scheduled municipal election asking said voters whether this open space funding mechanism should be continued for other open space acquisitions, or whether it should be terminated. The popular vote is not binding, except that the Council may not terminate said allocations unless the voters at said general election have approved their termination. Schmidt,Open Space Funding,Page 6 v EETING AGENDA LATE 4-11--5'6 ITEM # Cr OUNCIL 0+utR San Luis Obispo Chamber of Commerce tS CAO ❑ FIN DIR P Z ACRO ❑ FIRE CHIEF 1039 Chorro Street • San Luis Obispo, California 93401-3278 ATTORNEY ❑ PW DIR (805) 781.2777 • FAX (805) 543.1255 CLERK/ORIC ❑ POLICE CHF j e-mail: slo-chamber@gslonet.org i ❑ MGMTTEAA4 ❑ RECDIR David E. Garth, Executive Director I ❑ CRE FILE ❑ UT!L DIR May 26,1996 rI ❑ PERS DIR �l. Nsvu� Mayor Allen Settle and Members of the City Council City of San Luis Obispo RE-CEI ED 990 Palm Street San Luis Obispo,California 93401 MAY J J 1` 0 Civ COUNCIL Honorable Mayor and Council Members: The San Luis Obispo Chamber of Commerce would like to commend the City's Open Space Financing Task Force for developing a cogent and realistic plan for placing open space financing on the November 1996 ballot. The Chamber has supported protection of our open spaces for several years,and we are supportive of this advisory vote as a clear and appropriate manner to poll the populace of San Luis Obispo as to their desires on this important concept. On the whole,we feel that the Open Space Financing Task Force proposal represents a sound strategy for financingthat portion of open space acquisition that cannot be accomplished by other means. We support the overall concept wholeheartedly. In addition,we would like to recommend several minor changes that we feel will increase the likelihood of the program's success both at the polls and over the long term. These recommendations are summarized in the enclosed resolutions,which were passed unanimously by our Board of Directors at its May 16 meeting. These resolutions demonstrate our clear support for open space acquisition,and include only those changes that we feel will increase the level of trust in the plan by members of the general public,promote accountability in open space financing over the long term,and increase the likelihood of a successful ballot initiative in November. We look forward to working with the City of San Luis Obispo in coming years to make this program a success,and commend your efforts to implement this progressive approach to environmental protection and economic health. Yours very truly, TIN TFARS tt L1 Robert L.Gi JUN 4 1996 ACCREDITED President � • � CITY CLERK .• ' SAN LUIS OBISPO.CA Adopted Resolution of San Luis Obispo Chamber of Commerce Board of Directors May 16, 1996 As a result of discussion on the City of San Luis Obispo's Open Space Financing Task Force and its efforts to develop a cogent financing plan to protect the natural resources of our area,and pursuant to recommendation by the Chamber's Land Use Task Force,the San Luis Obispo Chamber of Commerce hereby adopts the following resolution: WHEREAS more than 80%of the Chamber's membership has expressed a desire to implement an open space protection program,even if this program results in increased costs to themselves;and WHEREAS the Chamber of Commerce has been a driving force in the effort to protect open space around the City,and has been represented on the Open Space Financing Task Force; RESOLVED that the Chamber supports placing a plan for open space financing on the November 1996 ballot, as developed by the Open Space Financing Task Force,subject to the follo-vving concerns being addressed: • The City should place the assessment district only option rather than the combination plan onto the ballot. The assessment-only option is preferable because of its simplicity and flexibility. In addition, it avoids the double and triple taxation possible under the combination plan, and protects the TOT at current rates. • The assessment district proposal should include$1 million as its stated annual goal. It is better to strive for a smaller funding amount that can be increased after the program has proven successful than to attempt to immediately raise a larger amount and meet defeat on the advisory vote. Also, because purchase of land should be a last resort mechanism for acquisition, lesser funding levels are appropriate. • The City still needs to address the issue of maintenance of open space land. Under the current plan, maintenance costs would come from the open space financing budget. Given the desire to use certain open space lands for park-facilities, as well as the environmental monitoring costs for certain wetland areas and the like, it is possible that in future years it would be necessary to use the majority of funds raised to maintain previously acquired properties rather than acquire new ones; • The entire open space financing program should contain a five year sunset clause. At that time, if the program has been successful, consideration should be given to expanding it to a county-wide program. If the program has been unsuccessful, it should be disbanded. • A citizen-based oversight authority should be created that will ensure the program follows agreed- upon principles in the acquisition of open space,such as safeguarding open space acquisition funding for its intended use. This authority is vital in preserving public trust for the project. Motion waspass . .unanitnotlfsly Respect Submi X W. Scott Gregory Director,Gove tal Affair Adopted Resolution of San Luis Obispo Chamber of Commerce Board of Directors May 16, 1996 The San Luis Obispo Chamber of Commerce Board of Directors adopted the following motion as an addendum to the Land Use Task Force recommendations outlined above. WHEREAS,members of the Land Use Planning Task Force were invited to attend a special meeting of the Tourism Council to discuss the City's proposed funding mechanisms for the Open Space Program. The Tourism Council was concerned with a preliminary recommendation that the transient occupancy tax be raised to fund open space; and WHEREAS,after hearing from Andrew Merriam,Bill Coy and Ken Hampian,the Tourism Council unanimously agreed to support the Land Use Task Force Recommendations to the Board regarding its May 8, 1996 Committee Meeting; RESOLVED,that the Tourism Council requested that the Board consider the following: MOTION: Whereas parks add to the ambiance of the community and benefit local tourism, the city's primary industry, the Chamber supports the Land Use Financing Task Force's recommendation to support the Open Space Financing Task Force proposal, and that this resolution should include a recommendation that up to 25 percent of the open space financing budget be used for parks within the open space plan area. Motion was approved unanimously. Resper itt , W. S Dir ctor,Gove ntal Affairs June 11, 1996 Diane Hull SLO Resident Mayor Settle and Council Members, HIGHER TAXES CONTINUE TO SQUEEZE THE MIDDLE CLASS I prepared a comprehensive analysis of all the income, property, utility and other hidden taxes we pay in San Luis Obispo. The approximate average income per household, as indicated by the UCSB Economic Forecast Report is $37,500 per year. Per my analysis, an average family of four in SLO pays almost 30% of their gross wages on all taxes. After paying the mortgage, only $1,380 is left each month for food, clothing, charitable giving, saving for college, replacing autos and appliances, and maybe a vacation. We are squeezing the middle class!! DO WE WANT TO BECOME ANOTHER MARIN? The Stakeholders Economic Conference in 1992 concluded that SLO was on its way to becoming another Marin. This tax is another step down that road. Do all of the residents really want an exclusive city? As we continue to increase the cost of living in SLO, we inherently restrict residency to only those who can afford to live here. CURRENT POLICIES ARE WORKING We live in a beautiful area. We all enjoy green (or golden) hills and blue skies. San Luis Obispo does NOT look like Los Angeles or Orange County. The current planning policies in the county and city are working to maintain and protect our local environment. We are not in grave danger of becoming like LA as some might like you to believe. WHY THE RUSH FOR A PERMANENT TAX BURDEN? Why does there seem to be such a sense of urgency about implementing this new tax? You are considering a tax assessment that will burden the residents in perpetuity. WE NEED AN ECONOMIC REVIEW TO BALANCE THE ENVIRONMENTAL ONE Two new positions were created as a result of last year's budget. The Natural Resources Manager and the Economic Development Manager. The purpose of these two positions is to provide input to City Council from both economic and environmental concerns. The open space financing proposal needs a balanced Review. Let's get the new Economic Development Manager up to speed and involved with this process. WE NEED MORE TIME TO UNDERSTAND THIS The residents of the city need more time to understand the proposal. Placing an advisory measure on the November ballot, along with the Presidential, Congressional and Local races and numerous propositions, will not allow the voter sufficient time to study, comprehend and evaluate the complicated Open Space Assessment District and its permanent implications. YES -I AM SUSPICIOUS! Someone observed that I sounded suspicious ---Yes, I am suspicious about any proposal that raises taxes. I am concerned that residents within the San Luis Coastal School District already pay nearly 10% more in property taxes, and that the "grandfathered" Measure A passed without 2/3 majority vote, circumventing the spirit of Prop. 13. 1 am concerned when a I hear that a prior city council enacted the utility tax late at night after everybody else had gone home. I am suspicious when the entire amount of the 1 /2 cent sales tax increase does not equal the increase in the police budget, after the voters said that's what they wanted! And, I am suspicious when I hear that the council is legally required to spend only 50% of the proceeds from the proposed assessment district on acquiring open space. Already, 25% has been dedicated to parks and recreation. Let's be more accurate and re -name it the "Open Space and Parks & Recreation Assessment District". What kind of guarantee do the residents have that the remaining 75% will be dedicated to open space acquisition, and not pay for any overhead allocation? How can we be sure that this new tax will not supplement the general fund? LET'S VOTE NEXT YEAR!! We need this proposal reviewed from the economic point of view and more time for the residents to have their questions answered. I urge the council to seek a BINDING VOTE from the residents sometime next year. Thank you for this opportunity to speak, Diane Hull April 29, 1996 Draft prepared by Diane Hull, Cr N and SLO Resident Revised, May 15, 1996 Open Space Financing??? We cannot afford to purchase open space. Assumptions: Couple with two kids, household income of $37,500, recently purchased $140,000 house (with gift from Mom and Dad for down payment) $112,500 mortgage. Est avg monthly Est annual Utilities Pacific Bell: Federal 1.25 15.00 Local (City) 1.30 15.60 PG&E SLO City 5% 2.00 24.00 (avg bill $40) The Gas Company SLO City 5% 1.50 18.00 (avg bill $30) Water/Sewer SLO City 2.25 % 2.00 24.00 Sonic Cable SLO City — 5% 1.21 14.52 Other Property Taxes DMV Car Registration: State —2% of value 500.00 SLO County $4 per car 8.00 2 cars per household Real Property Taxes 1.3% X $140K 1,729.00 County personal property taxes Boats Satellite dishes Income Taxes Payroll Taxes Social Security 7.65% 2,869.00 SDI .8% 300.00 Income Tax (per tax projection, Fed & Cal) 3,000.00 Other Consumer Taxes Sales Tax assume avg spending per month $500 X 7.25% X 12 435.00 Gasoline Tax assume 12,000 miles driven per year, per car (2/household) 20 mpg = 1200 gallons per year Federal Tax 18.4 cents/gallon State & Local 18.0 cents/gallon Sales Tax 7.25% on avg $1.60/gall. Alcohol and Cigarettes: Sales tax Other federal and state taxes 220.80 216.00 139.20 Developer fees added to the cost of your home, increasing your property tax burden and debt service burden. SLO City Fees for a 1500 Square Foot Home: $17,295 Increase in monthly mortgage payment related to the fees (assuming 7-8% rate, 30 year loan) $120 x 12 = $1,440 per year Increase in annual property taxes related to increased "value" $17,295 x 1.4% est prop tax rate = $242 (This hidden tax is already reflected in the property taxes) Total taxes paid by average family $10,968 Average Annual Household Income $37,500** Income left over ($2,211 per month) $26,532 After the mortgage of $825 per month, $1,386 is left each month for food and clothing, charitable giving, childcare, savings for college, vacations, replacing cars and appliances, etc... (No wonder consumer debt continues to rise!) Other hidden taxes: 1 /3 of your medical insurance premiums pays for the uninsured. Part of your fire and car insurance premium (premium tax) pays for insurance companies who go bankrupt. All business taxes are passed through to the consumers. **Based upon UCSB Economic Forecast Report ��`�' • LFgG' o •� _ o - L Of I 1ving In this election year, the economy is the biggest issue for women across the country, according to Ladies' Home Journal's recent Ov1 • 5��� survey. From fear of being downsized to the everyday reality of trying to make ends meet, from higher tax- es to the budget deficit, women are worried about their own — and the country's —economic security. Just how bad is the financial state of our union? This special report will give you the information you need to know. Pull it out and keep it handy; debate and analyze the facts and figures with your family and friends. And, most important, as the presiden- tial campaign continues, use this guide as a 4. reference —to keep track of the candidates' statements, to see if they change their posi- tions or their promises —and to help you specialelection decide how to vote. -Katie Couric z = Where those with the highest --and ° lowest —incomes reside Blue: $26,994 to $32,274 -why+* Yellow: $21,012 to $25,927- Red: $16,531 to $20,927-101341- 0 0 o Highest income: District of Columbia Z Lowest income: Mississippi 0 PERSONAL INCOME PER CAPITA IN CURRENT o DOLLARS, BY STATE, PRELIMINARY I"S O NUMBERS, SOURCE: U.S. BUREAU OF u O 0 ECONOMIC ANALYSIS. ` 0 73 ELECTION '96 "Three job s--�-ad we still can't" ak:e jfe we could go back in s Linda as she looks bills piled up on her kitchen table. "I don't know what ough she and Larry wor ine, the Rosses' com- bine a of $43,000 doesn't sup eir family of four. In fact he past six months, llege graduate —has re- sort second job cleaning monthly expenses are a testimony to how tight things area $700 house payment; $480 for child care; $450 for food; a $250 car payment; plus taxes, student loans and credit-card, med- ical and utility bills. Recently, the Rosses were so far behind on their bills that they went to an office of the Con- sumer Credit Counseling Service for advice. "But when we showed them our budget, they didn't have any suggestions for us," says Linda. "There was nothing left to cut." Already gone are family va- cations, new clothes and dinners 74 LADIES' HOME JOURNAL • JULY 1996 out. Occasionally the family does splurge, as they did last spring when they took Jerel to Disney World for a day. "You get to the point where you feel like if we don't have an extra dime to enjoy, what are we doing it for?" says Linda. That's why Larry de- cided to get a second job. But the additional dollars he earns come at a high price. "For the first four months, Larry worked five nights a ie only saw the baby on cis," Linda recalls sadly. rould ask, `Is Daddy going to be home tonight?' By the mid- dle of the week he was crying, `Daddy's never coming home!' " In March, Larry decided that for Jerel's sake, he needed to spend more time with his family. He cut back to three nights a week, which brings in an additional $500 a month —barely enough to balance the household budget. "If anything out of the ordinary happens, like the car breaking down, we're in trouble," says Linda. "And some- thing always happens." Still, Linda insists that she and Larry don't feel sorry for them- selves. "I try not to get upset when someone calls asking why our car payment is late again," she says. "After all, I'm probably just one name on a list being called." Can government change the economic malaise she and so many others are caught in? "The bottom line is, there are so many qualified people looking for work, there's al- ways somebody willing to do the job for less money," says Linda. "Can the government change that? I don't know. But if it can't, then who can?" Kathryn M. Casey F3 San Luis Obispo County FARM BUREAU June 11, 1996 Council Members San Luis Obispo City Council 990 Palm San Luis Obispo, CA 93401 Dear Council Members: The City proposal of a greenbelt of 33,000 acres of land around the City of San Luis Obispo is a very ambitious, costly and long term program. It needs to be understood that this program is not agriculture asking for the urban conurnmities to supplement agriculture, or for the urban comnuniities to create a program leading to heavy indebtedness on the urban residents to obtain open space that is privately owned production agricultural land. Farm Bureau is approaching the proposed Open Space Financing from the point of view that this is a program that the residents of the City of San Luis Obispo wish to undertake. Further, Farm Bureau is speaking strictly from an agricultural perspective. Based upon the above premises, Farm Bureau is expressing thoughts regarding the open space proposals and some of the issues addressed in the Technical Appendix. Voluntary Pro ram: We understand that there are currently some agricultural landowners interested in participating in the San Luis Obispo City Open Space program. If this program is approved, it must to remain a voluntary program where the landowner chooses to participate. County TDC Program: It is hoped that the City of San Luis Obispo will support the San Luis Obispo County proposed Transfer of Development Credits Program, as approved by the Technical Advisory Committee and being heard before the San Luis Obispo County Planning Commission. This TI)C nro�ram is voluntary, incentive based and market -driven If the City and County work together, neither alters the program, we believe that this joint effort could be an effective tool, accomplishing some of the Financing Task Force's goals. 651 Tank Farm Rd. San Luis Obispo, CA 93401 (805) 543-3654 S L O City Council -2- June 11, 1996 Fee Purcliase of Land: Farm Bureau believes that the Task Force's low priority on the fee purchase of production agriculture land needs to be changed to no nriority on the fee title purchase of private land. Farm Bureau does not support the purchase of private land by public entities. Too many acres of California's and San Luis Obispo County's land (over 542,000 acres) is already in public ownership. Many of these acres are lost to production and furnish no property tax income, yet are often very expensive for the communities to support. The purchase of easements and most certainly the Transfer of Development Credits are far more cost effective means of achieving what the city appears to desire, "open space", as opposed to the fee purchase of land. Maintenance of Open Space: On page 5 of the Final Report, `�mintenance of the open space areas" is recommended by the Task Force. Farm Bureau supports this position as we firmly believes that no land should be involved in any public program without the ability for that land to be maintained throughout the course of the program. Oversight Committee: On page 5 of the Final Report, an Oversight Committee is proposed. Because of the involvement of 25,000 to 30,000 acres of agricultural land in this program, there is a need for members of the affected agricultural community to be on this oversight committee. Continued Agricultural Production: Through the voluntary acquisition of conservation easements or a Transfer of Development Credits program, the agriculturalist can continue farming and producing food, fiber and flowers. Conservation easements and the transfer of development credits are `in perpetuity". Our concern is when the land is no longer agriculturally viable, what will happen to that land? More specifically, when such issues as urban conflicts (crop theft, interference in the cultural practices necessary to produce the crop, trespass, etc.) become so great that the farmer is unable to continue to farm the land, how will the City resolve the issue? What is the City's plan for this land that is restricted, `in perpetuity". to agricultural use? Is the City prepared to follow the same restrictions they will be placing on the private agricultural land? Easement Conditions: A second concern involves the conditions written into a conservation easement or transfer of development agreement. For the agricultural land to remain productive, there must not be unreasonable restrictions or prohibitively costly techniques imposed on the agricultural cultural practices. For example, if the application of sulfur is needed, and the accepted agricultural practice, for the production of sugar peas, then an agricultural use restriction prohibiting the application of sulfur is not acceptable. If the application of a rodenticide is needed, and the accepted agricultural practice, for control of disease carrying ground squirrels, then a restriction prohibiting the application of the rodenticide is not acceptable. SLO City Council -3- June 11, 1996 Agricultural Representation in the Decision Makingl'rocess: Because of the 25,000 and 30,000 acres of the City's proposed greenbelt being in agricultural production, Farm Bureau requests that affected production agriculture representatives be part of the decision making process that develops the voluntary easements and TDC programs. The input from these representatives can help develop realistic easements, easements that allow agriculture to make a living producing food, fiber and flowers. Clarification: On page 35 of the Technical Appendix it was stated in 4. (b), regarding payment of property taxes, that "agriculture, retail commercial, office industry, etc.(property taxes) are paid by the consumer of the product produced or service rendered on the subject property". This misconception needs to be corrected. On production agriculture land, the property tax (or any other cost) is not passed on by the producer. The production agriculturalist does not set the price of the commodity, be it fruit, vegetable or beef. The agricultural producer is a price taker, not a p►•ice setter, therefore has no opportunity to ``pass on the property tax" to the consumer. A prime example of this is in 1996, the beef producer is taking a major loss when he sells his cattle as it is costing far more to raise the animal than the current market will pay. On page 36, (d) those of us in agriculture, attempting to make a living in production of food, fiber and flowers are very much interested in `protecting" agriculture, not "preserving" agriculture as many are fond of stating. We hope that the City of San Luis Obispo remembers that without positive agricultural income, there is no production agriculture, therefore no scenic open space. When you regulate, tax and restrict production agriculturalists out of business, you reap development. We do not believe that this is the intention of the City or the Financial Task Force. Please give our comments your full and serious consideration. If we can help in the future, please contact us at the San Luis Obispo County Farm Bureau office. Sincerely, STEVE ARNOLD President ARIL N BRITTON Executive Manager