Loading...
HomeMy WebLinkAboutItem 7a. Jackson and Kuhn - Staff Agenda CorrespondenceCity of San Luis Obispo, Council Memorandum City of San Luis Obispo Council Agenda Correspondence DATE: November 10, 2026 TO: Mayor and Council FROM: Emily Jackson, Finance Director Prepared By: Riley Kuhn, Budget Manager VIA: Whitney McDonald, City Manager SUBJECT: ITEM 7a – FY 2025-26 YEAR-END BUDGET REPORT Staff received the following questions, regarding the FY 2025-26 Year-End Budget Report. The questions are below with staff’s response shown in italics: 1. On page 147, Code Enforcement Goals and Targets are outlined. We had a Code Enforcement Study Session awhile back where we discussed and highlighted the importance of responding timely to Tier 1 Health and Safety- oriented calls. However, it still seems we have trouble meeting our target response times for those calls (66% timely response rate when the goal is 85%). Do we need to adjust our targets in the coming year or do we have a plan for methods we might employ to get closer to our targets? It is correct that the stated goals were not met. For the full fiscal year, staff investigated 38.8% of cases within the established timelines, which is below the 85% target. The results also show that many requests were addressed shortly after the deadline: the overall response rate reached 61.0% within one day after the due date and 64.4% within two days. For Priority 1 health and safety calls, staff met the original deadline 66.7% of the time, with that rate reaching 83.3% within two days after the deadline. These later responses do not meet the established timelines, but they help show how quickly staff is addressing requests while prioritizing urgent health and safety concerns. Staff recommends keeping the current targets in place while working on improvements, including reviewing the division’s organizational structure, exploring additional support, and streamlining work on frequent issues such as abandoned shopping carts. Staff will also adopt a new case management system that integrates with the current citizen request management system and includes enhancements to help staff work more efficiently. Staff recommends giving these efforts time to improve response times before considering changes to the targets, while continuing to prioritize immediate health and safety concerns. FY 2025-26 Year End Budget Report Page 2 2. On page 157 of the report, it notes that some improvements planned to the Employee Wellness Room were not made as planned in 2025-26. Do we plan to roll those improvements into the next year, or was it decided those improvements were not needed? New equipment was purchased for the wellness rooms in June 2026 (Downtown: Kettlebells, Aerobic step platform, Key/bag holders, rollers, resistance bands, mirror; Corp yard: stationary bike). However, due to the timing of the credit card statement for these purchases, the charges were applied to FY 2026-27. 3. Can you describe a little more about the temporary arrangement with the School District that impacted Kinder Care this past year? Is this situation anticipated to occur again in the future? Additionally, not in the report, but related to the school district, has there been any new information on funding for the School Resource Officer (SRO) for the current and future year? The San Luis Coastal Unified School District (SLCUSD) requested staff support for the TK program which occurred after the City’s budget for FY 2025-26 was approved and an MOU was established for staff cost reimbursements. Staffing hours were increased outside of the traditional Before and After School childcare program which the Parks & Recreation Department provides at the five elementary schools, and the District provided reimbursement for this additional cost. The District has restructured their TK programs this academic year which no longer requires the additional hours of staffing to support their program. Related to the SRO position and funding, at the conclusion of the 2025-2026 school year, SLCUSD informed the City that it was no longer able to sustain funding for the SRO position. The Police Department did not have sufficient budgetary resources allocated to independently fund the position. Consequently, in July 2026, the Police Department applied for funding through the Community Oriented Policing Services (COPS) Hiring Grant Program to support the continuation of the SRO position. Based on the pending grant application, the Police Department agreed to maintain the SRO assignment on campus while awaiting the funding decision this fall. The Police Department has remained in regular communication with the District and expects to receive notification regarding the grant award by the end of November. Both the Police Department and the District remain committed to continuing the SRO program and are working collaboratively to ensure its ongoing success. FY 2025-26 Year End Budget Report Page 3 4. Can you please provide a status update of the golf course bridge replacement and Pro Shop repairs? The Pro Shop repairs are currently in the interior design phase. The bridge replacement is scheduled for late spring 2027. 5. Page 167 of the report indicates performance measures for the Police Department. Can you please explain how the number of collisions in the community reflects the performance of the police department? And if so, why the number of bike and pedestrian-related collisions have gone up? While overall traffic collisions have decreased slightly, the department has seen a slight increase in pedestrian and bicycle related collisions. Several factors may be contributing to this trend, including continued population growth in San Luis Obispo, increasing enrollment at Cal Poly, and the influx of new drivers who may be unfamiliar with local roadways and traffic patterns. The Police Department is actively addressing these concerns through a collaborative approach and continues to work closely with Traffic Engineering to identify and implement roadway improvements that enhance safety for all users. In addition, the department is utilizing Office of Traffic Safety (OTS) grant funding to support targeted enforcement, education, and collision prevention efforts focused on pedestrian and bicycle safety. This performance measure helps the department drive safety programming and staffing to achieve desired community goals. The department recently filled one of the Traffic Safety Unit Officer positions, which will increase the ability to address traffic-related concerns throughout the community. As part of these efforts, officers have increased proactive traffic enforcement, resulting in more citations issued than in previous years. Through engineering, education, and enforcement strategies, the City remains committed to improving safety for motorists, pedestrians, and bicyclists alike in conjunction with the City’s Vision Zero Operational Plan. 7. On page 174 of the packet, I don’t understand the note here: This note was carried over from the FY 2025-27 Financial Plan adoption and was inadvertently included in the year-end budget report. It should be amended to read: FY 2025-26 Year End Budget Report Page 4 “FY 2025-26 Target is based on the ridership projections established in the 2025 Short-Range Transit Plan. FY 2025-26 Actual is based on actual recorded ridership.” 8. On page 179, what is a “Water Distribution Hot Tap Machine”? Hot tapping is a method of connecting a new water service line to an existing water main without shutting off water service to neighboring properties. It allows construction and system improvements to proceed while minimizing service disruptions to customers and protecting water quality. Instead of turning off the water to an entire neighborhood, a hot tap machine is used to cut a hole into the live pipe without losing water from the water main. In general, this is done by: • Cleaning and preparation: Expose the watermain, clean the exterior surface, and inspect the pipe material to ensure it is structurally sound and won't split under the clamping or drilling pressure. • Wrapping the pipe: A metal saddle is clamped around the outside of the active pipe to create a secure, leak-proof branch point. • Adding a valve: Bolt a valve onto that new saddle to allow water to be turned on/off to the property. • Drilling the hole: A sealed drilling machine (hot tap machine) attaches to the outside of the open valve. It reaches inside, drills a hole through the pipe wall, and pulls the loose cutout piece safely back out. • Close the valve: The drill is pulled back, and the valve is shut tight. The drill is removed, leaving behind a brand-new point of connection. • New water service line connection: The new service line is connected to the outlet of the isolation valve, and the valve is opened to put the new line into service. 9. On page 195 of the packet, this item in the work plan update appears: Do we have any “pre-approved” plans for ADUs currently in SLO? The City has not received any requests from architects or builders to have their ADU plans be used as pre-approved plans. FY 2025-26 Year End Budget Report Page 5 10. What is the actual dollar amount of the unassigned fund balance? The chart on page 8 says $11,970,342. The text on page says $12 million. The chart on page 12 (2 of the General Fund Summary) says $15.1 or 13% favorable to budget. Preliminary, unaudited general fund undesignated balance is $11,970,342 as indicated on page 128 of the agenda packet. This number is expected to change before the audit is finalized and appropriations are recommended. In line with Council adopted fund balance and reserve policies, this number is calculated after fully funding the operating reserve, which consumed $3.7 million of the $15.1 million in over-realized revenues. This balance does not include Local Revenue Measure fund balance of approximately $1.8 million. 11. Is there a plan for the use of 975 Broad? If not, what options being considered? The plan for interim and long term use of 975 Broad Street was identified in the May 19, 2026 Council Agenda Report which authorized the purchase of the building: “If the transaction to acquire 975 Broad Street is successful, it is envisioned that interim, non-public uses of the property and existing structure by the City would be enacted to ensure basic maintenance and an ongoing, visible pattern of use to ensure safety and prevent trespass and vandalism. Staff recommend a future Council-directed process for engaging with community stakeholders and partners to identify a long-term use for the property be undertaken as a work program item during the 2027-29 Financial Plan period.” Staff plan to bring a work plan item to Council as part of the 2027-29 Financial Planning period to initiate a community engagement process with stakeholders and partners to identify the long-term use of the property. 12. What Carryover Requests were not approved? Requests from departments for operating budget carryover that were not approved by the City Manager were generally not policy compliant. They included: • Temporary salaries for the Parks & Recreation Community Services division • Bi-Annual Equipment purchases for the Parks & Recreation Community Services division • Funding for a neighborhood grant program for the Administration & IT department 13. Is the planned carry over funding for outside counsel ($50,000) sufficient to cover ongoing and anticipated litigation needs? No- $50,000 in carryover has been added to the contract with Civica Law Group for their support of the City in the receivership of the commercial property at 1150 Laurel Lane. An additional $38,500 was also carried over for Human Resources related matters. All that funding has been assigned to various matters but there is approximately $600,000 in further funding needed for the 10-14 matters that have either already arisen or are expected to before the end of Fiscal Year 2026-27. FY 2025-26 Year End Budget Report Page 6 14. What is the anticipated cost of the reorganization of the Deputy City Manager’s department, including but not limited to the establishment of a new Deputy Director of Administration position, promotions, filling the Sustainability Manager position, interim staffing, transfer of “Non profit partners” management? The recent reorganization within the Administration and IT Department is cost- neutral. The Sustainability and Natural Resources Official position was reclassified as the Deputy Director of Administration position, and the Sustainability Manager position was reclassified as the Sustainability and Natural Resources Manager position. All costs associated with these reclassifications were managed within existing departmental resources. The majority of the funding needed was made available by addressing an increased need for administrative support for the Tourism Business Improvement District within existing resources, thereby offsetting General Fund costs that could be applied to the reclassifications. Resources for interim staffing of the Sustainability and Natural Resources Analyst position, while that individual is on planned leave, were approved through the carryover process, and an offer has been extended to a candidate. Support for Community Partnerships has shifted to the Policy and Project Manager position. These responsibilities fall within the position’s existing job description, and sufficient capacity exists due to the recent completion of one-time projects, including implementation of Citywide Single Vote. 15. Given the Parking Fund’s over realization of revenue (p 51), how much further could parking fees be reduced? The Parking Fund’s over realization of revenue is mostly attributable to investment income from cash balances prior to payment of invoices for the Cultural Arts District Parking Structure construction project. This totals nearly $648,000. Since that cash has since been used to pay vendors, investment income will not continue at this level. Additionally, GASB 87 requires the accrual of lease revenue on the Parking Fund’s two larger leases (Hotel Cerro and Jamestown) more evenly over the lease term. These accounting accruals represented about $508,000 in non- cash Other Revenue which cannot be used to fund operations. The FY 2026-27 Budget assumes increased fee revenues from the new Cultural Arts District Parking Structure of $826,575, and this revenue is necessary to maintain sufficient fund balance. Based on current revenue levels, parking fees are not recommended for a reduction at this time. FY 2025-26 Year End Budget Report Page 7 16. Is there data regarding the effectiveness of the Diversity, Equity and Inclusion programs in realizing stated goals? The Office of Diversity, Equity, and Inclusion monitors progress toward its established goals through quarterly reporting on the City's Major City Goal tasks and annual reporting on the implementation of the Diversity, Equity, and Inclusion Strategic Plan. These reports provide measurable indicators of implementation progress, while additional evaluation efforts, including participant surveys and the recently launched Belonging Needs Assessment and Community Benchmark Survey, help assess program outcomes and community experiences. To date, 70% of the identified Diversity, Equity, and Inclusion Major City Goal tasks have been completed and 77% of the Diversity, Equity, and Inclusion Strategic Plan's 90 tactics have been operationalized or are on track, demonstrating continued progress in integrating access, inclusion, and belonging into City programs, services, and operations. Additional details regarding the implementation status of individual tactics are available in the Diversity, Equity, and Inclusion Strategic Plan Progress Report. The Office is also evaluating program effectiveness through community feedback surveying after each event in The Belonging Project . These surveys assess whether the event strengthened community connections, introduced new perspectives, and encouraged continued civic and community engagement. Survey responses have consistently indicated that a majority of respondents feel more connected to the San Luis Obispo community after participating and report gaining a greater understanding of different perspectives and experiences, along with increased motivation to take action in their community. In addition to evaluating individual programs and initiatives, the recently launched Community Benchmark Survey and a Belonging Needs Assessment will help the Office better understand residents' experiences and perceptions of belonging within the San Luis Obispo community. These surveys represent an important next step in establishing measurable indicators of community belonging and evaluating progress toward the goals of the Diversity, Equity, and Inclusion Strategic Plan. 17. What is the status of the SLOMA project and can you provide a link to the letter that states what they are requesting? SLOMA is continuing progress on their Downtown expansion project. Staff have also been continuing to meet with SLOMA to evaluate progress related to the City’s Phase 1 grant. Based on the updates provided, SLOMA has completed the requirements of this grant, which include securing all funds for Phase 1 of the project, receiving all necessary project entitlements, completing a fundraising plan for the full project, completing a 3-year budget forecast, and identification of additional public benefits. FY 2025-26 Year End Budget Report Page 8 The City Council received an update on the SLOMA project and a request for an additional $2M grant to support the Phase 2 property purchase of their expansion project on October 27th. If Council desires, direction may be provided to staff as part of this agenda item to prepare an amendment to the grant agreement for an additional amount that could be considered for appropriation from unassigned fund balance as part of the FY 2026-27 Q2 Budget Report recommendations, pending audited financial statements. The Council may also continue the consideration of options and recommendations for additional funding for Phase 2 to the FY 2026- 27 Q2 Budget Report or to the 2027-29 Financial Plan development, or not take any action at this time. 18. I’m not sure I am following how these CAO measures are “on target”? I’m sure I am not getting something, but aren’t the actuals (second column of numbers) a fair amount lower than the targets (first column)? Yet, the notes say “on target.” Can you help me understand what I am missing? The 3rd, 4th, and 5th measures under the “Efficient and Transparent Administrative Appeals Program” Objective (as shown above) are considered “on target” despite being lower than the targets provided in the first column because the total number of appeals (1st measure)—which dictates the subsequent measures—dropped. The 3rd-5th measures remain on target because they represent approximately the same percentage of the lower total of appeals received as those “targeted” for measures in this category. FY 2025-26 Year End Budget Report Page 9 19. Also, can you give me a little more explanation of this one? Criminal enforcement of violations the City’s municipal code is one tool the City uses to correct chronic or serious misconduct. Multi-count complaints are criminal filings that include multiple cited violations (e.g., eight counts of open container violations/SLOMC 9.04.010.) A primary goal of criminal municipal code enforcement is to get chronically cited individuals connected with social services, such as drug and alcohol, housing, and/or mental health services. The lower-than- expected number of multi-count complaints can be explained, in part, by the death of certain chronic offenders (who received multiple criminal citations in previous years) and incarceration of others, in which case they were not committing new violations. Proactive community intervention by the City’s CAT and MCU teams may also have contributed to this lower number. FY 2025-26 Year End Budget Report Page 10 20. Can we use consultants to start doing some of the work to establish a rental registry? Can we do this or some other element of the rental registry preparation with minimal impact to current work? If you believe this is feasible, how much should we allocate to this phase? City staff has reached out to several firms to determine if there are consultant teams that could assist with the development of a rental registry. There do appear to be consultants that are able to help with research, public outreach, public meetings, and development of a program implementation strategy. The estimated cost of this type of work is approximately $300,000, and would require staff to support the consultant’s work. Staff anticipates that an RFP can be developed with existing resources in the next several months, however, it is anticipated that additional staff would be required to manage the consultant after the first several months. If directed by the City Council, staff could return with the FY 2026-27 Q2 Budget Report in February with more information about the additional staffing that would be necessary, along with authorization to release the RFP for the consultant team.