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HomeMy WebLinkAbout04/12/2001, 3 - MAJOR CITY GOAL WORK PROGRAMS FOR 2001-03 Counat MwigD. yo j acEnaa uEpont CITY OF SAN LU I S O B I S P O FROM: Ken Hampian, City Administrative Of icer. Bill Statler, Director of Finance SUBJECT: MAJOR CTTY GOAL WORK PROGRAMS FOR 2001-03 CAO RECOMMENDATION 1. Review, modify as desired and tentatively approve major City goal work programs for 2001- 03. 2. Reclassify the Downtown Cultural Center Plan from the "major City goal" category to "other important objectives. 3. Defer the office supply and demand study(current 1999-01 program objective) to 2003-05. DISCUSSION Work Programs Background. At the February 3, 2001 budget workshop, the Council established twenty-seven goals organized into three priority categories: major City goals, other important objectives and address as resources permit. The purpose of the accompanying work programs for the Major City Goals is to link the adopted goal statements with action plans and the resources needed to achieve the objective by: 1. Clearly defining and scoping the work program. 2. Ensuring that there is a clear understanding of the means selected to pursue the goal. 3. Converting the general goal into specific action steps so we can measure progress in achieving it. The Introduction section of the attached report discusses the purpose, background, organization and content of the work programs. It also summarizes the cost of these programs, and assesses the difficulty we will have in preparing a balanced budget given this very ambitious action plan for the next two years. In this regard, while the Council has established its priorities for the next two years through the 2001-03 goal-setting process, we believe that the Council expects the staff to provide a forthright evaluation of likely implementation costs, funding capacity and potential unintended consequences. The proposed work programs reflect this expectation. Difficult Budget Choices Ahead. As discussed in greater detail in the attached report, General Fund operating and capital costs to implement the work programs total about $7.4 million over the next two years. We have not finalized our revenue projections for 2001-03. However, it is 3 - � Council Agenda Report–Major City Goal Work Programs for 2001-03 Page 2 clear based on the results of the five year forecast—and adverse economic trend since then—that it will be very difficult to fund these work programs while also addressing the "other important objectives" set for 2001-03, maintaining basic services, and meeting other critical service delivery and capital improvement needs. Modified Objectives. In general, we have retained the objectives as originally adopted by the Council in February 2001. However, because of the difficulties we foresee in balancing the budget, we recommend minor modifications to the objectives for open space preservation and cultural services. The adopted objectives for these began with the phrase "continue/increase funding." The proposed work programs delete "increase" from the objective. .We have also . made some revisions in selected objectives in order to more closely focus on what we can accomplish in the next two years. Modified Priority Category: Downtown Cultural Center Plan. While we have retained the objective for the Downtown Cultural Center Plan as originally approved by the Council (and prepared the work program accordingly), we recommend reclassifying this goal to the "other important objectives" category. As discussed below, implementing this goal as adopted by the Council will cost much more than may have initially been apparent—both in direct costs for consultant services (estimated at $300,000) as well as staff resources. Accordingly, given our uncertain fiscal outlook and other high-priority objectives, we believe the Council should reconsider the priority of this goal. What does this change mean? As defined by the Council, major City goals "represent the most important, highest priority goals for the City to accomplish over the next two years, and as such, resources to accomplish them should be included in the 2001-03 Financial Plan." On the other hand, other important objectives "are important for the City to accomplish, and resources should be made available in the 2001-03 Financial Plan if possible." The practical distinction is that unless there are compelling circumstances, the CAO will include funding for all major City goals in the Preliminary Financial Plan---even if this means deleting other key objectives or reducing important day-to-day services—because the Council has defined these as the "most important, highest priority goals" for the City to accomplish. At this point, given our uncertain fiscal outlook, its $300,000 cost and the major impact it will have on staff resources in Community Development, we believe the Council should reconsider if this goal falls into the "must fund" category that major City goals represent. (Note: Of the fifteen major City goals set by the Council, this was ranked fifteenth.) Why is the cost so high? The Council's goal calls for preparing a Specific Plan and Environmental Impact Report (EIR) for a very comprehensive scope of issues, including traffic and parking. We estimate that this will have a direct cost of $300,000 for consultant services. Unfortunately, as discussed in the work.program, there are no "lower cost" options that are likely to yield significant benefits, since the Conceptual Physical Plan for the City's Center already provides a very comprehensive program for the downtown cultural area. 3-2 Council Agenda Report—Major City Goal Work Programs for 2001=03 Page 3 Equally important, even with consultant assistance, completing this goal will have a major impact on staff resources in Community Development, and reduce our capacity to achieve other high-priority goals. As a result of the recent appointment of the Long Range Planning Manager to Community Development Director, we now have a key vacancy in the Division that would be responsible for this project. We expect this vacancy to last for at least six months while we recruit nationally to fill this position. During this same time, the Division will be deeply involved with many important projects, including the Airport, Margarita and Orcutt area Specific Plans, Conservation/Energy Element update and Housing Element update. The new Director will also be heavily involved in overseeing projects in the Development Review Division, including a heavy permit application workload, architectural review guidelines, commercial zone update, Chinatown Historic District-Court Street project and alternative residential street standards. Spin-Off Tasks. For several of the goals, the two-year work programs will complete planning and study plan phases, but actual implementation ("spin-offs") such as property acquisition or project construction will take place in 2003-05 and beyond. In virtually all of these cases, the resources needed to complete "out-year" implementation will simply not be available without significant outside funding such as federal or state grants, or voter-approved new revenues. Notable examples include the railroad recreational trail, North Area Regional Facility (NARF) transit plaza and Los Osos Valley Road freeway overcrossing. Together, these three projects alone will cost at least $17 million to implement. This is beyond any imaginable General Fund capability to do so. Additionally,building civic offices on the Copeland French site will cost$13 million, and will require debt financing (and a repayment source)to do so. This does not mean we cannot achieve these goals; it simply means that in order to do so, we will either need extraordinary success in securing grant funding for them, or voter approval of new revenues. As such, if the Council is committed to accomplishing them, we need to use the next two years wisely in positioning ourselves for these two options. Conceptual Approval of the Work Programs. Tentative Council approval of the work programs at this stage is not formal approval of either the goal or the budget for it. This will not occur until the Council approves the 2001-03 Financial Plan in its entirety in June 2001, after extensive workshops and public hearings. However, if the Council believes that some of the work programs are too ambitious—or do not go far enough—then we need this direction now. Given the pressures we see on the General Fund budget, we recommend that the Council lean towards scaling back work programs rather than adding to them. Next Steps. In-depth reviews of departmental budget requests and revenue projections are currently underway. Once these are completed and the Council has approved the goal work programs, we plan to finalize budget recommendations and issue the Preliminary Financial Plan on May 15, 2001. Key next steps in the budget review process are: -3 Council Agenda Report—Major City Goal Work Programs for 2001-03 Page 4 Kev Next SteDs in the Financial Plan Process Budget.Review Scheduleat 1. Preliminary Financial Plan issuance May 15 2. Budget workshop: Financial Plan overview and General Fund operating programs May 22 3. Budget workshop: General Fund CIP projects May 24 4. Budget workshop: Enterprise Fund programs,projects and rates May 29 5. Continued budget review June 5 6. Continued budget review and budget adoption. June 19 Deferral of Office Supply and Demand Study Background. As part of the 1999-01 Financial Plan, the Council approved funding in the amount of$20,000 for consultant services to study the supply and demand for office space within the City. The request arose from a desire to determine whether the City still has an unmet need for professional office space in excess of 2,500 square feet. An earlier study prepared by QUAD Consultants in 1986 indicated a severe shortage of leaseable space for these large professional office tenants. One of the implementation tasks that grew out of the study was the creation of our current system of allowing large professional offices of 2,500 square feet or larger in the City's service commercial and manufacturing zones, subject to approval of a planned development overlay district. Update Status. Due to an unusually heavy permit load, the large, number of capital improvement plan and other City projects that needed,environmental and permit processing, and other Council assignments that have taken priority attention, we have been unable to proceed with an updated study. This unanticipated workload has also had the effect of slowing other high-priority programs such as updating the City's architectural review guidelines and commercial zoning regulations. These other programs are currently underway, but will extend well into the next budget cycle. Limited Staff Resources. We can include the update of the office supply and demand study in the upcoming 2001-03 Financial Plan, but this work assignment will compete with numerous other Council priorities that grew out of the recent goal-setting process as well as the work programs noted above that will extend into 2001-03. Additionally, Community Development expects to carry position vacancies well into next fiscal year due to a promotion and other staff changes. In short, with the current permit load, and new and continuing Council priorities, there are not enough staff resources to accomplish everything that is on our plate for the next two years. Is this study still a high priority? Feedback from prospective office tenants provided to the Economic Development Manager is that there is still insufficient space for larger office tenants in the City. Based on this community input, we could conclude that we still need office space outside of more preferred downtown locations. However, it may still be beneficial to update the study to see if there have been any other changes in the office supply market since the initial 1986 analysis was performed that would benefit the City in attracting and keeping the office tenants that are desired in our City. Council Agenda Report—Major City Goal Work Programs for 2001-03 Page 5 Options. We have identified five possible,options for Council consideration: 1. Decide that there is no longer a need to perform the study and delete the staff assignment. 2. If the Council still feels like the study is important, but is lower in priority than the adopted 2001-03 Council goals, defer the update for consideration for two years to the 2003-05 Financial Plan process. 3. Modify and reassign the task to the City's Economic Development Manager. Rather than a comprehensive study with detailed inventory data, we could prepare a report providing a general overview of the subject and trends that staff has observed and researched with other business groups. However; this alternative will impact the City's economic development work program, and as such, there is no guarantee that it will be completed any faster. 4. Keep the task in the Community Development work program for 2001-03 and provide funding for consultant services(now estimated at $25,000). Staff will attempt to work on the assignment should the permit load lessen over the next two-year period; however, since completion is conditioned on workload and staff availability, there are no guarantees with this approach that the update will be completed: we may simply tie-up funding that could have been allocated to other high-priority objectives in other departments. 5. Along with consultant service funding, provide additional staff resources to Community Development. One possible way to accomplish this task would be to extend the contract Associate Planner devoted to the Chinatown Historic District-Court Street project and permit load relief for an additional 12 month period(from June 2002 to June 2003). Recommendation. We believe that an updated study would benefit the City. However, given the current workload situation and the need for our limited resources to work on other high- priority Council objectives, we recommend deferring this study and reconsidering it as part of the 2003-05 Financial Plan. FISCAL IMPACT There are no direct fiscal impacts associated with tentatively approving major City goal work programs: conceptual approval of work programs is not approval of the budget. As discussed above, this will only occur with adoption of the Financial Plan in June, following issuance of the Preliminary Financial Plan and extensive budget workshops and hearings. Nonetheless, this is a very important step in the process: with this direction, staff will be certain we understand the Council's intent, and we can prepare the Preliminary Financial Plan accordingly. However, as discussed above, achieving high-priority Council goals while ensuring that we maintain essential services and adequately address our infrastructure needs will require making difficult budget choices from many equally desired—but ultimately competitive—City goals. —S Council Agenda Report—Major City Goal Work Programs for 2601-03 Page 6 SUNBIARY In the final analysis, a balanced budget is not just a financial concept: it also means a balance between delivering day-to-day services, maintaining and improving public facilities, and funding new initiatives. This balance, ultimately set by the Council, cannot be made until all of the budget components are in place and comprehensively viewed. While the major City goal work programs lead the way, the Preliminary Financial Plan will provide us with the opportunity to take this more comprehensive view—and it is likely that some of the work programs will change as we take this broader look at our needs and our fiscal resources.. ATTACHMENT Major'City Goal Work Programs for 2001-03 G:2001-03 Financial Plan/Major City Goal Work Programs/Agenda Report=April 12,2001 2001 =03 Financial Plan MAJOR CITY GOAL WORK PROGRAMS April 12, 2001 a city of san tuis omspo 2001-03 Financial Plan MAJOR CITY GOAL WORK PROGRAMS Table of Contents INTRODUCTION MAJOR CITY GOAL WORK PROGRAMS Overview 1 Public Utilities Background 1 Water Supply 10 Council Goal-Setting Purpose of the Work Programs Transportation Conceptual Approval Streets and Sidewalk Maintenance 14 Other Program Objectives Los Osos Valley Road Improvements 17 General Budget Preparation Framework Flood Protection 21 Organization: Goal Priorities 2 Railroad Recreational Trail 25 Downtown Transportation Center: Major City Goals North Area Regional Facility 28 Other Important Objectives Parking and Access Advisory Body 32 Address As Resources Permit Work Program Content 2 Leisure,Cultural & Social Services Work Program Costs 2 Athletic Fields 35 Recreation Center Remodel: Summary by Funding Source Community/Senior Center 38 Short-Term Outlook: Balancing the Downtown Cultural Center Plan, 40 2001-03 Budget Cultural Services 43 Longer-Term Outlook Objective Revisions 3 Community Development Next Steps 4 Housing 47 Summary 4 Open Space Preservation 51 SUMMARY OF COUNCIL GOALS General Government Civic Offices 54 Maintenance of Basic Services 57 Major City Goals 5 Other Important Objectives 7 REVENUE OPTIONS Address as Resources Permit 7 MAJOR CITY GOALS COST SUMMARY Council-Approved Options 62 Voter-Approved Options 63 Cost and Funding Summary 8 Cost Summary by Major Components 9 1 MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN INTRODUCTION O VERVIEW 1. Define and scope the adopted goal. 2. Ensure that there is a clear understanding of the means selected to pursue the goal. Major City goals for 2001-03 and the related work 3. Convert the general goal into specific action programs reflect a very ambitious action plan for the steps so we can measure progress in achieving next two years, resulting in General Fund operating it. and capital costs of about $7.4 million over the next two years. This is especially important in the case of objectives We have not yet finalized our revenue projections where fully achieving the goal is likely to extend for 2001-03. However, it is clear based on the well beyond the two-year Financial Plan period. results of the five year forecast—and adverse However, we can measure progress—and our economic trends since then—that it will be very success in accomplishing the goal—by clearly difficult to fund these work programs while also defining the specific actions we plan to undertake addressing the `other objectives" set for 2001-03, over the next two years. maintaining basic services, and meeting other critical service delivery and capital improvement Conceptual Approval of the Work Programs. needs. Tentative Council approval of the work programs at this stage is not formal approval of either the goal or ACKGROUND the budget for it. This will not occur until the B Council approves the 2001703 Financial Plan in its entirety in June 2001, after extensive workshops and public hearings. The purpose of the City's Financial Plan process is to link the most important,highest priority things for Other Program Objectives. The Preliminary us to achieve for our community over the next two Financial Plan (which we plan to issue on May 15, years with the resources necessary to do them. 2001) will also include the "other objectives" set by the Council as part of the goal-setting process. It Council Goal-Setting. For this reason, the City will also include objectives proposed by the staff for begins its budget process with Council goal-setting. improving the delivery of City services. These are This follows an extensive effort to involve advisory different from Council-initiated goals in two bodies and the community in this process. It also important ways: follows consideration of a number of analytical reports such as the General Fund Five-Year Fiscal 1. Council goals are generally focused on Forecast. The following work programs have been objectives that can only be successfully prepared based on the Major City Goals set by the achieved through Council leadership, support Council at an all-day workshop held on February 3, and commitment; program objectives proposed 2001. by staff are typically more internally focused on improving day-to-day operations, and can Purpose of the Work Programs. The goals set by usually be achieved through staff leadership, the Council drive the budget preparation process. support and commitment. However, before the staff can build the Preliminary 2. Achieving major City goals has a higher Financial Plan around Council goals, it is essential resource priority. that we have a clear understanding of what the Council hopes to achieve with each goal over the Each of the 73 operating programs presented in the ,next two years. Accordingly, the purpose of each Preliminary Financial Plan will clearly identify work program is to: 4- MAJOR CITY GOALS:''2001-03 FINANCIAL PLAN INTRODUCTION major City goals, other Council goals and other available in the 2001-03 Financial Plan if program objectives. possible. General Budget Preparation Framework. In 3. Address As Resources Permit. While it is striving to achieve Council goals while ensuring that desirable to achieve these goals over the next essential services are delivered at acceptable levels, two years, doing so is subject to current our short-term strategy in balancing the 2001-03 resource availability. budget consists of the following four parts: As approved by the Council, detailed work 1. Limiting operating cost increases and reviewing programs have only been prepared for the Major service levels for expenditure reduction City Goals; the other goals will be presented to the opportunities. Council in the context of the Preliminary Financial 2. Developing a capital improvement plan (CIP) Plan. that adequately maintains our existing infrastructure and facilities. ONTENT 3. Considering new revenue opportunities as allowed under Proposition 218. The work programs are organized by functional 4. Making strategic use of fund balance that may area: public utilities, transportation, leisure, cultural be available above minimum policy levels. & social services, community development and general government. Each work program provides ORGANIZATION: GOAL PRIORITIES the following information: 1. Objective. The goals set by the Council in February 2001 are 2. Discussion, including the proposed workscope, organized into the following priorities: related work accomplished in the past, and challenges we will face in achieving the goal. 1. Major City Goals. These represent the most 3. Action plan detailing specific tasks and schedule important, highest priority goals for the City to for the next two years. When applicable, likely accomplish over the next two years, and as such, "carryover and spin-off' tasks beyond the next resources to accomplish them should be two years are also discussed. included in the 2001-03 Financial Plan., 4. Responsible department. If the work program approved by the Council 5. Financial and staff resources required to achieve the goal. for a major City goal is not included in the Preliminary Financial Plan prepared by the City 6. General Fund revenue potential, if any. Administrator, compelling reasons and 7. Outcome—final work product at the end of the justification must be provided as to why next two years. resources could not be made available to achieve this goal. WORK PROGRAM COSTS In short, these are"must fund"objectives. Work program operating and capital improvement 2. Other Important Objectives. Goals in this plan (CIP) costs total about $28 million over the category are important for the City to next two years. As shown below about, $7.4 million accomplish, and resources should be made is from the General Fund: -2- MAJOR CITY G0ALS:"x001-03 FINANCIAL PLAN INTRODUCTION Work Pro ran: Funding Sources Longer Term Outlook. Achieving Council goals " becomes even more difficult as we look beyond the General Fund $ Operating7 ,10 $ 6,708,00 $ 7,428 1001 next two years. Many of the work programs for Sale of Property 2,300,000 2,300,000 2001-03 include plans and studies that could lead to Trans Impact Fees 423,000 423,000 Water Fund 130,000 12,600,000 12,930,000 much higher implementation costs in future years Transit Fund 80,000 80,000 for property acquisition or project construction. Parking Fund 240,000 240,000 Grants&Contributions 5.003.200 . 5.003.200 Total 850,100 27,552,200 28,402,300 In virtually all of these cases, the resources needed to complete "out-year" implementation will simply Short Term Outlook: Balancing the 2001-03 not be available without significant outside funding Budget. The initial results of the five-year forecast such as federal or state grants, or voter-approved (after adjusting for the mid-year review and other new revenues. budget changes since then) indicated available General Fund resources of about $1.5 million to Notable examples include the railroad recreational fund new initiatives over the next two years, trail, North Area Regional Facility (NARF) transit assuming we continue current service levels and plaza and Los Osos Valley Road freeway adequately maintain existing assets. overcrossing. Together, these three projects alone will cost at least $17 million to implement. This is With General Fund revenues of $33 million beyond any imaginable General Fund capability to annually, this represents limited discretionary do so. Additionally, building civic offices on the flexibility—about 2%of likely resources. Copeland French site will cost $13 million, and will require debt financing (and a repayment source) to However, the economic and fiscal environment has do so. worsened since then, and downward revisions in our revenue projections are likely when we issue the This does not mean we cannot achieve these goals; Preliminary Financial Plan in May. This will further it simply means that in order to do so,we will either reduce our ability to fund new initiatives. need extraordinary success in securing grant funding for them, or voter approval of new revenues. As As such, given other demands on our resources in such, if the Council is committed to accomplishing maintaining essential services and addressing other them, we need to use the next two years wisely in operating and capital needs not reflected in Council positioning ourselves for these two options. goals, it will be very difficult to present a balanced budget that fully funds all of the Council goals for OBJECTIVE REVISIONS 2001-03. In preparing a balanced budget for 2001- 03,this means: In general, we have retained objectives as originally 1. Closely following the goal priorities set by the adopted by the Council in February 2001. However, Council: first, maintaining basic services; and because of the difficulties we foresee in balancing then funding major City goals before other the budget, we recommend minor modifications to important objectives, and other important the objectives for open space preservation and objectives before address as resources permit. cultural services. The adopted objectives for these 2. Seriously considering new revenue options began with the phrase "continue/increase funding." under Proposition 218. These were previously The proposed work programs delete "increase" from reviewed by the Council as part of the 2001-05 the objective. forecast, and are summarized on pages 62 to 64. -3- MAJOR CITY GOALS:2001-03 FINANCIAL PLAN INTRODUCTION We have also made some revisions in selected understand the Council's intent, and we can prepare objectives in order to more closely focus on what we the Preliminary Financial Plan accordingly. can accomplish in the next two years. However, as discussed above, achieving high- Proposed Revision in Goal Priority: Downtown priority Council goals while ensuring that we Cultural Center Plan. While we have retained the maintain essential services and adequately address objective for the Downtown Cultural Center Plan as our infrastructure needs will require making difficult originally approved by the Council (and prepared budget choices from many equally desired—but the work program accordingly), we recommend ultimately competitive—City goals. reclassifying this goal to the "other important objectives"category. Conclusion. In the final analysis, a balanced budget is not just a financial concept: it also means a As discussed in the work program, implementing balance between delivering day-to-day services, this goal as adopted by the Council will cost much maintaining and improving public facilities, and more than may have initially been apparent-both in funding new initiatives. direct costs for consultant services (estimated at $300,000) as well as staff resources. Accordingly, This balance, ultimately set by the Council, cannot given this high costs combined with our uncertain be made until all of the budget components are in fiscal outlook, limited staff resources and other place and comprehensively viewed. While the high-priority objectives, we believe the Council major City goal work programs lead the way, the should reconsider the priority of this goal. Preliminary Financial Plan will provide us with the opportunity to take this more comprehensive view— EXT STEPS and it is likely that some of the work programs will N change as we take this broader look at our needs and our fiscal resources. In-depth reviews of departmental budget requests and revenue projections are currently underway. Once these are completed and the Council has approved the goal work programs, we plan to finalize budget recommendations and issue the Preliminary Financial Plan on May 15, 2001. UMMARY There are no direct fiscal impacts associated with tentatively approving the major City goal work programs. Formal approval of the work programs will not occur until the Council approves. the Financial Plan in its entirety June 2001, following issuance of the Preliminary Financial Plan and extensive budget workshops and hearings. Nonetheless, this is a very important step in the process: with this direction, staff will be certain we -4- MAJOR CITY GOALSA 1001-03 FINANCIAL PLAN SUMMARY OF COUNCIL GOALS MAJOR CITY GOALS grant funding options to complete these proj ects. Public Utilities ■ Downtown Transportation Center: North Area Regional Facility. Work with other ■ Water Supply. Continue efforts to develop agencies to-acquire land for a multi-modal long-term water supplies, including: preserving transportation center and parking structure, present water rights and pursuing all options northeast of Santa Rosa Street. with the exception of State Water; using and protecting groundwater; pursuing acquisition of ■ Parking and Access Advisory Body. Establish property for water supply; completing the water a Citywide parking and access advisory body. reuse project; seeking water supply opportunities as part of any annexations; and Community Development confirming Council water subcommittee to build relationship with north county. ■ Housing. Continue implementing programs to achieve the City's housing goals. Transportation This includes cooperating with initiatives by Cal Poly and Cuesta College to expedite ■ Street and Sidewalk Maintenance. Continue implementing street paving and repair programs; construction of campus housing for students, faculty and staff, expanding opportunities for and augment funding for sidewalk installations low and moderate income housing; and and repair, new street sign installations on approving new housing starts proposed by the arterials and tree plantings in all available tree private sector which use appropriately zoned wells. land, do not exceed the City's 1% growth limit and meet the City's inclusionary housing ■ Los Osos Valley Road Improvements. Widen requirements for low and moderate income Los Osos Valley Road from Madonna Road to families, especially in the Margarita area. Highway 101; and prepare plans for widening the freeway overpass and fixing difficulties ■ Open Space Preservation. Continue funding between freeway exits/entrances and Calle for open space and agriculture preservation, Joaquin, improving flood structures and including management programs for open space providing bicycle and pedestrian lanes over the lands and staffing for implementation of those freeway. plans. ■ Flood Protection. Improve flood protection for Leisure, Cultural& Social Services residents and businesses, including alleviating impediments to carrying-off flood water and ■ Athletic Fields. Explore possibilities for preserving flood plains. additional athletic fields, including plans for two ■ Railroad Recreational Trail. Continue lighted softball fields. planning and purchasing property to complete ■ Recreation Center Remodel: Community/ the Railroad Recreational Trail to Cal Poly Senior Center. Complete remodel of the extend planning to the south connecting the Recreation Center for community and senior Edna-Islay area into the master plan; establish the Morro Street "SLO Street" from the uses. Railroad District to Downtown; and pursue -5- MAJOR CITY GOALS2001-03 FINANCIAL PLAN SUMMARY OF COUNCIL GOALS ■ Downtown Cultural Center Plan. Begin preparing a Specific Plan and Environmental Impact Report that will forward the development of a Cultural Center in the Downtown. The plan should use the Conceptual Physical Plan for the City's Center as its guide. and include the following in its scope: the Mission, Mission Museum, Mission Plaza (extended), County Historical Museum (expanded), Art Center (expanded), Little Theater (relocated), Children's Museum (expanded) and other supportive elements, including parking. The plan should be prepared with the assistance of a design and environmentally sensitive consultant and should address: private and public funding commitments and construction timetables, necessary property acquisitions, street closures and circulation proposals. ■ Cultural Services. Continue funding for arts and culture; and identify long-range funding sources to secure the future of the Performing Arts Center. General Government ■ Civic Offices. Purchase Copeland/French property and pursue construction of a multi- story office building with subterranean parking for City offices. ■ Maintenance of Basic Services. Preserve current service levels and adequately maintain existing facilities and infrastructure. -6- MAJOR CITY GOALS2001-03 FINANCIAL PLAN SUMMARY OF COUNCIL GOALS OTHER IMPORTANT OBJECTIVES ADDRESS AS RESOURCES PERMIT Community Development Transportation ■ Central Commercial Zone Expansion. In o Evaluation of Broad Street Freeway Ramps. accordance with the Conceptual Physical Plan Evaluate closing Broad Street freeway ramps. for the City's Center, expand the Central Commercial (CC) zone and in-lieu parking Leisure, Cultural&Social Services district northeast to the railroad tracks and southwest to Marsh and Higuera Street E Laguna Lake Master Plan. Continue intersection. implementation of Laguna Lake Park Master Plan. ■ Large Building Development Standards. Adopt design and review standards for large ■ Library Services. Increase hours of operation buildings that address sitting, landscaping, at Library, including Sundays. parking access and building design, along with natural space conditioning and lighting Community Development standards. ■ Broad Street Corridor Plan. Prepare a South ■ Neighborhood Identification. Identify the Broad Street Corridor Plan, establishing traffic boundaries and centers of San Luis Obispo medians, residential, mixed-use projects and "neighborhoods" and "communities,". noting the commercial districts. factors that give cohesion to these definitive components of the City. o- Sales Tax Strategy. Develop and implement a long-term strategy to increase sales tax revenues ■ Chinatown Historic District-Court Street at a minimum rate of 5% per year (in constant Project: First Phase Completion. Complete dollars)beginning with the 2001-02 fiscal year. the first phase of the Chinatown Historic District-Court Street project. E Convention Center Strategy. Develop a strategy in cooperation with other agencies for a ■ Historic Preservation. Consider restoration of convention center in the City convenient to funding for low interest loans and seek grants other cultural/visitor resources. for preserving historic properties, including funding restoration of adobes. ■ Downtown Pedestrian Lighting Plan. Establish a historic downtown pedestrian lighting plan in the Downtown in cooperation with the Downtown Association. -7- l MAJOR CITY GOALS:2001-03 FINANCIAL PLAN COST AND FUNDING SUMMARY The following summarizes operating program and capital improvement plan(CEP)costs to achieve the major City goal work programs and proposed funding sources. This summary is followed by a more detailed schedule of the major cost elements for each goal work program. Cost Summary By Project Operating Programs Capital Improvement Plan 2001-02 2002-03 2001-02 2002-03 2003-04 2004-05 Water Supply 65,000 65,000 12,350,000 450,000 2,000,000 Street and Sidewalk Maintenance 60,000 60,000 2,755,000 2,511,000 2,473,000 2,542,000 Los Osos Valley Road Improvements 700,000 250,000 8,700,000 Flood Protection 82,000 50,000 1,136,000 85,000 562,000 209,000 Railroad Recreational Trail 50,000 273,000 600,000 5,100,000 North Area Regional Facility 180,000 1,140,000 2,750,000 13,500,000 Parking and Access Advisory Body Housing Open Space Preservation 34,300 35,400 700,000 250,000 200,000 200,000 Athletic Fields 20,000 20,000 1,119,500 187,500 17,500 17,500 Recreation Center Remodel 500,000 Downtown Cultural Center Plan 300,000 Cultural Services 29,200 29,200 680,200 50,000 50,000 50,000 Civic Center Offices 135,000 2,300,000 11,275,000 Maintenance of Basic Services Total 290,500 559,60011 19,605,700 1 7,946,500 1 8,902,500 1 41,593,500 Cost Summary By Funding Source Operating Programs Capital Improvement Plan 2001-02 2002-03 2001-02 2002-03 2003-04 2004-6 General Fund 225,500 494,600 3,789,500 2,916,500 3,210,500 2,926,500 General Fund: Sale of Property 2,300,000 General Fund:Debt Financing 11,275,000 Transportation Impact Fees 50,000 373,000 250,000 Water Fund 65,000 65,000 12,350,000 450,000 2,000,000 Transit Fund 80,000 Parking Fund 100,000 140,000 1,350,000 13,500,000 Grants and Contributions 3,236,200 767,000 92,000 92,000 New Revenues:Grants ort% -Tter-Approved ._ _ ___ _ ,_ __ 1,000,000 _2,000,000_ 13,800,000, Total 290,500 1 559,600 19,605,700 1 7,946,500 8,902,500 1 41,593,500 -8- MAJOR CITY GOALS:-2001-03 FINANCIAL PLAN COST AND FUNDING SUMMARY Operating Programs Capital Improvement Plan 2001-02 2002-03 2001-02 2002-03 2003-04 2004-05 Water Supply 65,000 65,000 12,350,600 450;000 2,000,000 0 Water Reuse 40,000 40,000 12,300,000 300,000 Groundwater 50,000 150,000 2,000,000 Conservation Program Enhancements 25,000 25,000 Street and Sidewalk Maintenance _ __601000 -._-- 60;000 2;755,0.0.0,-__2,5111;000 -__2,473,000: __2,542,000- Pavement Maintenance 2,242,000 2,307,000 2,373,000 2,442,000 Sidewalk Installation and Repair 60,000 60,000 416,000 100,000 100,000 100,000 New Street Signs:Arterials 97,000 104,000 Los Osos Valley Road Im rovements 0 0 _ _ 0 -700,000 _ 25.01000_ _8,700,000.. Flood Protection 82,000 50,000 1,136,000, 85,000 562,000 209,000 NPDES Implementation Plan 70,000 60,000 Storm Drain Master Plan Completion 32,000 Catch Basin Replacement 50,000 50,000 Silt Removal 6,000 25,000 76,000 25,000 Foothill/Stenner Creek Covert Repair 950,000 Storm Drain Improvements 110,000 1 486,000 184,000 Railroad Recreational Trail 0 0 50,000 273,000 600,000 5,100,000 Phase 3: Santa Rosa to Marsh 50,000 76,000 250,000 2,100,000 Phase 4: Marsh to Foothill 77,000 350,000 3,000,000 Morro"SLO Street" 120,000 North Area Re ional Facility 0 0 180,000 1,140,000 2,750,000 13,500,000 Transit Plaza 80,000 1,000,000 1,400,000 Parking Garage 100,000 140,000 1,350,000 13,500,000 Paiking and Access Advisory,Bod _ .Q _ _ 0_ _.. __. -0-_ -- - ----01-0-_ __6 Hd"ng 0 0 _ - - -0 0 _ ._. - 0 -___ 0 Open Space Preservation _34,300 35,40.0 ._.___7001000. __250,000.. _200,000 200,000 Open Space/Trail Maintenance 20,000 20,000 Expanded Ranger Service 14,300 15,400 Open Space Purchase/Improvements 700,000 250,000 200,000 200,000 Athletic Fields - 20,000 20,000 __1,119,500 _ 187,500 17,500 17,500 Field Rentals 20,000 20,000 Santa Rosa Field Improvements 155,000 35,000 Field Improvement Grants 17,500 17,500 17,500 17,500 Sinsheimer Stadium Light Improvements 47,000 135,000 Cooperative Field Use:Two Lit Fields 500,000 Damon-Garcia Four Lit Fields _400,000 RecreationCenterRemodel 0 0 500,0.00 _. .- 0 -0- Downtown Cultural Center Plno_ 0 - - 300,000 0-- __0 Cultural Services. _ _ _. 29,200 29,200 680,200. 50,000 50,000 50,000 PAC Equipment Replacement 50,000 50,000 50,000 50,000 Rodriguez Adobe:CDBG 190,200 FOCA Administrative Support 15,500 15,500 SPRR Warehouse:TEA Grant 440,000 Continue Library Extended Hours 13,700 13,700 Civic Center Offices '0 0' 135,000 2,300,000 . _0 11,275,000 Environmental Review and Concept Plan 135,000 Land Purchase and Design 2,300,000 Construction11,275,000 Maintenance of Basic Services 0 ._. - 0 .0 _ --- 0_ _- ---_:.:0 --_--_D. TOTAL 1 290,500 1 559,60011 19,605,700 1 7,946,500 1 8,902,500 1 41,593,500 -9- MAJOR CITY GOALS: 1001-03 FINANCIAL PLAN WATER SUPPLY OBJECTIVE Continue efforts to develop long-term water supplies, including: preserving present water rights and pursuing all options with the exception of State Water;using and protecting groundwater, pursuing acquisition of property for water supply; completing the water reuse project; seeking water supply opportunities as part of any annexations; and confirming Council water subcommittee to build relationship with north county. DISCUSSION Background. This is a multifaceted goal that is intended to ensure that the City is pursuing all water supply options concurrently in order to ensure that additional supplies are developed in a timely manner and consistent with the General Plan. 1. Preserving present water rights will focus on the efforts required to comply with the requirements of the State Water Resources Control Board Order granting the City an extension of time on our water rights permit for the Salinas Reservoir Project. Those efforts, which include completing additional fisheries studies immediately downstream of the dam and completing a peer review of the recent seismic analysis of the dam, will ensure that from a water rights standpoint, the Salinas Reservoir Expansion project will remain a viable option for the City. 2. Pursuing all options with the exception of State Water means just that. Staff will be proposing Capital programs and working within our operating budgets to continue to seek the development of the Nacimiento Pipeline Project, development of additional groundwater resources, development of the Water Reuse project, and continue as well as expand implementation of the water conservation program. Staff will remain vigilant and evaluate other supply options that historically have not been feasible, such as desalination and water transfers, on a time available basis. No specific programs for these low priority/feasibility programs are being proposed for this financial plan period. 3. Using and protecting groundwater as stated previously, staff will propose a Capital Improvement Project aimed at increasing the City's use of groundwater. In addition, the City's current planning review process does evaluate any potential impacts to groundwater resources (quantity and quality) as a result of major development projects. Utilities staff will continue to monitor all proposed projects, annexations and acquisitions for opportunities to enhance and or protect the City's groundwater resources. 4. Pursuing acquisition of property for water supply is not a program that is recommended by staff to be actively pursued, however, staff would recommend reviewing all annexation proposals, open space Acquisitions, etc., with this objective in mind should an opportunity arise. The difficulty with this objective is that the City does not need to acquire large parcels of land in order to obtain access to the underlying groundwater. Nor would owning large parcels increase the City's rights to the underlying groundwater for use on properties other than those overlying parcels. Additionally, City General Plan Water and Wastewater Element policy 1.1.3:B identifies that the City will not compete with local agricultural use of groundwater outside the Urban Reserve Line. The City will have to be cautious in pursuing this objective that we do not do so in violation of this General Plan policy. 5. Completing the Water Reuse project is proposed as a continuation of a previous Capital Improvement Project. Council has approved preparation of the Plans and Specifications for Phase I of the project and staff will be continuing to work toward completion and implementation of required project mitigations and further -10- MAJOR CITY GOALS:-Y.001-03 FINANCIAL PLAN WATER SUPPLY definition of the Phase II project. Staff does anticipate that completion of the Phase I project will occur during this financial planning period. 6. Seeking water supply opportunities as part of any annexations has to some degree been previously described above. Staff will review all annexations relative to their opportunity to provide the City with additional water supplies and facilities. For this objective to be meaningful to the City,the annexation would have to provide water supplies in excess of the current demand of the proposed annexation area, and the supply would have to be in such a configuration (quantity, quality, location, etc.) as to be suitable and accessible to the City's water supply or distribution system. 7. Confirming the Council water subcommittee to build our .relationship with the North County was completed on March 13, 2001. Many of the above objectives have been a part of the City's work program to obtain additional long-tern water supplies previously, as this has been a Major City Goal since the early 1990's. Work to date has focused primarily on the study and environmental phases of the Water Reuse, Salinas and Nacimiento projects. Challenges We Will Face in Achieving this Goal. Development of additional water supplies, regardless of source, all will contain significant environmental impacts, are extremely costly,have the potential to affect others water rights, real or perceived, and are considered a key factor in the growth/no-growth debate. As such development of additional water supplies is not something that should be considered an "easily achievable goal." As noted above, the City has chosen a multifaceted approach to seeking additional supplies, pursuing the development of multiple projects concurrently. This strategy not only increases the City's opportunity for success,but will also allow the City to consider the many impacts, costs and issues associated with these projects concurrently and choose the supply option(s)most consistent with City policies and philosophies. ACTION PLAN Task Date Preserving Present Water Rights 1. Revise agreements with URS Consultants for completion of Salinas Downstream Fisheries 9/01 Studies and present to Council for approval. 2. Prepare Request for Proposals and solicit proposals for Seismic Study Peer Review. 1/02 3. Complete Seismic Study Peer Review and present results to the Council and State Water 7/02 Resources Control Board 4. Complete Downstream fisheries Studies and present results to the State Water Resources 12/02 Control Board. Pursuing All Options; and Using and Protecting Groundwater 1. Approve budget for Water Conservation program including program enhancements. 7/01 2. Complete Groundwater Basin analysis and present to Council. 9/01 3. Present Revised Nacimiento Pipeline EIR as prepared by the County to Council for 1/02 consideration. 4. Complete required environmental work for increased groundwater production. 7/02 5. Solicit proposals and award contract for groundwater production and treatment system 12/02 design. -11- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN WATER SUPPLY ACTION PLAN (Continued) Date Complete . - Complete the Water Reuse Project 1. Finalize concurrence on specific mitigation projects with the National Marine Fisheries 9/01 Service 2. Obtain commitment of State Revolving Fund Loan Financing from the State Water 9/01 Resources Control Board 3. Complete Phase I design. 12/01 4. Award Phase I Construction contract 7/02 5. Complete Phase H preliminary design. 7/02 6. Complete Phase II design 6/03 The ultimate goal to be achieved through completion of this action plan and future efforts is the development of additional water supplies sufficient to serve the water resource needs of the City of San Luis Obispo at build-out as identified in our General Plan. Completion of the above tasks during this financial plan period will further the City's efforts in accomplishing this goal in a manner consistent with the philosophies of the City Council. RESPONSIBLE DEPARTMENT The Utilities Department will be the lead department responsible for completion of the above tasks either through in-house work or through the use of consultant services. Community Development will assist with any required environmental review and Administration (Natural Resources) will assist with the development, negotiation and implementation of required mitigations for all projects as they proceed. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Funding required to complete the above objectives will be included in the Draft Capital Improvement Plan (CIP) and included in the Water Fund Analysis presented to Council as a part of their budget deliberations. With the exception of developing an expanded groundwater program, funding required for completion of the above objectives has been previously identified and approved in prior financial plans. Funding to complete the fisheries studies and seismic peer review for the Salinas Reservoir project is available from previous budgets and will be reprogrammed to fund these studies. Completing the study and design component of an expanded groundwater program is estimated to cost $200,000 during 2001-03. Water conservation program enhancements for a water and energy saving washing machine rebate program is estimated to cost $15,000 per year; and a program to train and certify landscape professionals in irrigation efficiency is. estimated to cost$10,000 per year. Completing Phase I of the Water Reuse project is estimated to cost $12.6 million. Funding for this project has also been previously approved in prior financial plans. Financing of the Water Reuse project is anticipated to be provided through a combination of State grants and low interest loans. Additionally, monitoring the emigration of steelhead trout in San Luis Obispo Creek as required by the National Marine Fisheries Service' Biological Opinion for the Water Reuse Project is estimated to cost$40,000 annually. Funding for all actions related to this goal for this financial planning period have been included in the draft Water Fund analysis and no rate increases are projected to be required to complete the activities identified above. 12- MAJOR CITY GOALS: 001-03 FINANCIAL PLAN WATER SUPPLY Because of the favorable position of the Water Fund at the present time, it is anticipated that this goal may be achieved with only minimum rate increases in the future. GENERAL FUND REVENUE POTENTIAL There is no direct General Fund revenue potential. However, since General Fund revenues depend upon a stable local economy, and additional water supplies are key to maintaining the economic health of the community, successful accomplishment of this Major City Goal will support the continued strength of the General Fund. OUTCOME—FINAL WORK PRODUCT Completing the two-year action plan for this goal will move us closer to meeting the water supply requirements necessary to serve build-out as identified in the General Plan, and provide a reliability reserve. Adequate water resources are key to quality of life and providing for the health and safety of the community. -13- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN STREET AND SIDEWALK MAINTENANCE OBJECTIVE Continue implementing street paving and repair programs; and augment funding for sidewalk installations and repair,new street sign installations on arterials and tree planting in all available tree wells. DISCUSSION Background In 1998, the City adopted a new Pavement Management Plan (PMP). Since then, the City has closely followed the PMP and by June 30, 2001 will have provided appropriate maintenance on one-half of the City's streets. This maintenance includes seal coats, overlays and reconstruction. The City is also continuing to implement the PMP in the Downtown. Current sidewalk maintenance consists of. a) City staff responding to individual isolated sidewalk problems (including curb and gutters) by grinding, modifying or replacing the damaged facilities; b) an annual contract sidewalk replacement project in high pedestrian use areas associated with the pavement management program; and c) a Council approved Capital Improvement Plan (CIP) project to install $75,000 in 1999 and $100,000 in 2000 of new sidewalks in conjunction with designated pavement maintenance areas. Historically, the City implemented the placement of new sidewalks via a provision of the 1911 Act of the Streets and Highways Code. With passage of Proposition 218, though, the City could no longer use the 1911 Act for new sidewalk installation in existing developed areas where no sidewalk existed. Starting in 1998 the City began using its own funds to pay for the above-mentioned CIP project to install new sidewalks. This past year the Council adopted a new policy for street name signs. Staff has begun the process of replacing signs, as they require replacement, and a project has been approved to install new signs at intersections downtown. Replacing all existing arterial signs will be carried out over the next two years. Challenges We Will Face in Achieving this Goal 1. Street Paving. Funding for ongoing pavement maintenance is critical if the PMP is to succeed. As mentioned above, Areas 1 through 4 have received the benefit of the initial funding as shown in the PMP. The PMP lays out an eight-year rotation for the entire City, at which time the benefits of a well-planned program will be evident. Maintaining funding and adherence to the plan will be key issues. 2. Sidewalk Installation and Repair. Areas where sidewalk does not exist are, in general, those that were harder and more expensive(such as requiring retaining walls)in the past and therefore never got built. Thus funding established for new sidewalk installation will not provide as much sidewalk as may be hoped but will allow certain key links in the pedestrian sidewalk system to be completed. The current program will continue and selected enhancements are proposed for 2001-02 on South Higuera. Sidewalk removal and replacement is an expensive program but is beneficial in that it provides an ongoing program to make our sidewalks safer for our citizens and results in fewer accidents. General Fund limitations prevent this program from ever completely catching up with the inventory of areas needing work. In some areas, such as the Oceanaire-Huasna neighborhood, where large areas need attention, the City should apply for CDBG funding in the next application period for use in the 2002-03. -14- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN STREET AND SIDEWALK MAINTENANCE 3. Empty Street Tree Wells. Replacing street trees prior to a.street-paving project or prior to a sidewalk repair project is often desired. Often, either or both of these operations require the severing of significant portions of tree roots. Due to budgetary constraints, it is often impossible to replace every tree prior to such work. This may result in trees in poor or stressed condition and lead to unhealthy trees. Empty street tree wells are often an indication that some form of construction has occurred which required the removal but for which funding was not available at the time for replacement. In other areas, the empty tree well may simply be awaiting replacement trees which have lately been withheld delivery to the entire County due to the inspection and quarantine restrictions due to the lacy-wing sharpshooter pest. ACTION PLAN Task Date 1. Continue the program of monitoring the condition of existing sidewalks .2001-03 2. Install street name signs at arterial street intersections. 2001-03 3. Install new sidewalks. 2001-03 4. Continue implementation of the 1998 Pavement Management Plan for Areas 5 and 6. 2001-03 5. Continue to repair damaged sidewalks,curbs and gutters. 2001-03 6. Inventory tree wells in the community that do not have trees installed. 11/01 7. Consider CDBG funding for Oceanaire-Huasna area. 4/02 8. Complete installation of all trees in.empty tree wells 6/02 9. Install new sidewalk on Higuera Street south of Elks Lane 6/02 10. Complete installation of 130— 18"new street name signs at all arterial intersections. 7/02 11. Complete installation of 510— 10"new street name signs at all arterial intersections. 6/03 The sidewalk replacement program will continue indefinitely—both as a means of better pedestrian access and as a means of limiting the City's liability. The new sidewalk program, while programmed as a continuing program, may need to be reduced or eliminated in future years if higher priorities cannot be met. The need for the City's largest single investment — streets — to continue to receive significant funding will continue at least until 2005 when the first full eight-year cycle is complete. Given the success of the current program in addressing the existing structural deficiencies, it is likely that funding beginning in 2006 could be reduced. Street maintenance was the number one concern in all recent citizen surveys and the pavement maintenance program is designed to address those concerns. RESPONSIBLE DEPARTMENT Public Works FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL 1. Street Paving. City general funds will continue to be programmed each budget year to support pavement management activities along with augmented State funding of $92,000 annually. For pavement reconstruction, resurfacing, and resealing (including State funding) this will cost $2,242,000 in 2001-02 and $2,307,000 in 2002-03 compared with $790,000 annually allocated for this purpose in 1995-97 and $2,000,500 annually in 1998-01. The majority of this budget will be spent on pavement reconstruction and resurfacing. Those streets in maintenance areas 5 and 6 not reconstructed or resurfaced will be seal-coated in order to achieve pavement management goals of seal-coating all streets not reconstructed or resurfaced in every eight-year period. -15- � c MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN STREET AND SIDEWALK MAINTENANCE 2. Sidewalk Installation and Repair. The 1999-01 Financial Plan for new sidewalk construction budgeted $75,000 annually for this work but was increased to $100,000 in 2000-01 and that funding level will continue in the next two fiscal years. Construction will continue to be based,upon design and priorities established in the adopted Pavement Management Plan. The 1997-99 Financial Plan included a $30,000 annual appropriation in the operating budget for sidewalk replacement. This amount was increased to $60,000 in 1999-01. This $60,000 annual appropriation will continue for the next two years with design and priorities established by the adopted Pavement Management Plan. The City has received a State grant of$279,000 for installation of sidewalks on South Higuera Street south of Elks Lane. With the City's General Fund match of$37,000, the total project appropriation will be $316,000 in 2001-02. 3. Empty Street Tree Wells. While the number of empty tree wells is unknown at this time, staff estimates that it will be able to find and reference them via GIS mapping within City resources. Staff will attempt to plant all empty tree wells within the existing budget but may return to Council later if resources are found insufficient. 4. Arterial Street Signs. Revised street name sign standards were adopted last year. Proposed CIP appropriations will allow new signs to be purchased and installed at all arterial street intersections over the next two years. In the fust year all 18-inch signs will be replaced at a cost of$97,000; in the second year, all 10-inch signs will be replaced at a cost of$104,000. OUTCOME—FINAL WORK PRODUCT 1. By June 2003, Pavement Management Plan projects will have addressed 75 percent of all City streets. This will result in longer street life and safer, more convenient and attractive access throughout the community for bicycle,transit and vehicle users. 2. Installing new sidewalks will help complete some pedestrian linkages and repairing old sidewalks will make those areas easier to use and safer for pedestrians. 3. Installing new street name signs on arterials will provide improved and more distinctive signing to the traveling public. -16- J MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN LOS OSOS VALLEY ROAD IMPROVEMENTS OBJECTIVE Widen Los Osos Valley Road from Madonna Road to Highway 101; and begin preparing plans to widen the freeway overpass and fix difficulties between freeway exits/entrances and Calle Joaquin, improve flood structures and provide bicycle and pedestrian lanes over the freeway. DISCUSSION Background. Land development in and around the Los Osos Valley Road (LOUR) corridor has been on-going for many years with little attention given to the interchange at Highway 101. A number of residential subdivisions, including DeVaul Ranch, Prefumo Canyon Homes and developments in the County, have been approved or are awaiting approval for construction. A major do-it yourself hardware warehouse—Home Depot—has been approved and is under construction on the Froom Ranch subdivision. In addition, there are a number of other development projects along LOVR either submitted or awaiting filing for City review as part of the land development process. The existing interchange often experiences congestion and vehicle delay during the peak times of the day. The interchange should be improved to keep pace with the demand for roadway capacity in this area in order to maintain City thresholds established in the Circulation Element. A Caltrans Project Study Report (PSR) is underway to study possible solutions and is funded by a $60,000 State Transportation Improvement Program (STIP) grant from the San Luis Obispo Council of Governments (SLOCOG)along with$30,000 from the County and$30,000 from the City. Parts of this objective are already in process: LOVR is scheduled to be widened as a part of the conditions of approval of the DeVaul and the Froom Ranch projects. The City's Flood Management Plan, currently under administrative review, states the existing flooding problems at the freeway are due not to undersized culverts,but rather to constrictions downstream. Creating secondary overflow channels downstream will address this part of the Council objective. Challenges We Will Face in Achieving this Objective. Each part of this major improvement project will be challenging: 1. A PSR-Project Development Study (PSR-PDS) must be completed so the City can become eligible to compete for State or regional funding. The City, as lead agency, has already initiated work on the PSR-PDS in early 2001 and will be processing the study before July 2001. July 2002 is the anticipated date of completion. 2. A Project Development Team (PDT) must be formed with representatives from Caltrans, SLOCOG and the County of San Luis Obispo to oversee the development of the PSR-PDS and the future Caltrans Project Report and PS&E. 3. Modifying the interchange will be a challenge in and of itself due to the existing atypical ramp layout, constrained right-of-way, close proximity of San Luis Creek, existing adjacent commercial land use and lack of alternative access for the Las Verdes condominiums. 4. Drainage and interconnection with future alternative transportation facilities such as the Bob Jones Bike Path will need to be incorporated into the project. 5. Improvements to the LOVR/US 101 interchange must be kept on schedule to address short-term and mid- term impacts associated with development along the LOVR corridor. 17 MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN LOS OSOS VALLEY ROAD IMPROVEMENTS 6. A full financial plan and complete. funding for the ultimate improvements to the interchange remains incomplete at this time. It is anticipated that when the PSR-PDSis completed, the project will compete favorably for regional and State discretionary funding. 7. A detailed engineering analysis of the Prefumo/San Luis Creek backflow characteristics will be necessary to fully evaluate the amount of land, the type of construction, and the level of environmental mitigation needed to provide flood control relief. Once completed, there is no assurance of cooperative property owners selling land for this purpose and thus the use of eminent domain may be necessary. ACTION PLAN Task Date Widenin . - Widenin Madonna Road to Highway 101 1. Review, approve and issue permits for DeVaul Ranch project 7/01 2. Begin LOVR widening, signal installation/modification and minor drainage improvements 7/01 3. Complete improvements 7/02 Interchan a Improvements 1. Obtain funding for the EIR, Project Report and PS&E 11/01 2. Complete PSR-PDS 5/02 3. Prepare RFP for the EIR and Project Report 6/02 4. Obtain Caltrans approval of PSR-PDS 8/02 5. Begin EIR and Project Report 10/02 Flood improvements 1. Complete Waterways Management Plan 12/01 2. Complete Storm.Drainage Master Plan. 6/02 3. Incorporate drainage improvement requirements into the scope of work for the Project 6/02 Report Subsequent work and financial resources will be required beyond the 2001-03 Financial Plan to complete the LOVR/US 101 Interchange improvement project. These tasks include hiring a design consultant to complete plans, specifications and estimates (PS&E) for the project, obtaining additional grant sources and/or voter- approved funding for the project, right-of=way acquisition, bidding the PS&E, obtaining necessary oversight agency permitting and completing construction of the project. The following table illustrates the tentative, best case, schedule for"out-years"of the project. Task -Fiscal Year Caltrans Project Report/EIR 2003-04 PS&E 2003-04 Right-of-Way Acquisition 2003-04 Permit Processing 2004-05 Begin Construction 2004-05 Complete Construction 2006-07 RESPONSIBLE DEPARTMENT Public Works will manage this project through the Transportation Planning and Engineering Program. The CIP Project Engineering Program will be responsible for storm drainage milestones and will contribute engineering -18- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN LOS OSOS VALLEY ROAD IMPROVEMENTS oversight and assistance in all tasks of the project. Community Development will assist in processing environmental review of the project and.assist with any Planning Commission findings if eminent domain is required.. Finance will play an integral role in helping develop a final financial plan for the project. The Natural Resource Manager and City Biologist will assist with issues associated with mitigating the project's impact and effect on San Luis Obispo and Pref imo Creeks. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL A final financial plan for the project is not complete at this time. A total of $120,000 has been previously appropriated for development of the PSR-PDS: $60,000 from STIP; $30,000 from the City General Fund; and $30,000 from the County. It is anticipated that the City will receive approximately $312,000 in mitigation fees for the project from the Froom Ranch/Home Depot project. By 2002-03, we anticipate that an additional 5288,000 in developer fees will have been received. These developer fees, along with $100,000 in transportation impact fees, will allow appropriation of$700,000 in 2002-03 for preparation of the Project Report and EIR. These two documents will be completed toward the end of 2003. All flood protection project studies will be funded as a part of the Project Report. Actual flood control construction will not take place during this two-year fiscal period. In the "out-years" will come the major expenses for design and construction. The City's Transportation Impact Fee program proposed to collect $3 million to go towards construction of the project. These funds remain significantly below the expected $9 million to $12 million believed necessary for the project. It is anticipated that the project will compete favorably for State and regional funding sources that will allow the project to be completed. During the entire project, staff will be looking for additional funding sources. GENERAL FUND REVENUE POTENTIAL This project will not result in increased General Fund Revenues directly. However,by providing easier and safer access to commercial and residential areas there is greater likelihood of shopping in the City, and therefore the possibility of increased sales tax. OUTCOME—FINAL WORK PRODUCT Achieving the two-year action plan will result in the following final work products: 1. LOVR will be widened to a minimum of two lanes in each direction and a centered turn lane from Madonna Road to US 101. 2. Traffic signals along LOVR will be interconnected and coordinated for maximum coordination of traffic flow. 3. Specific flood improvements will be identified for incorporation into the LOVR/US 101 Interchange Project. -19- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN LOS OSOS VALLEY ROAD IMPROVEMENTS 4. Completed (and Caltrans approved) advance development work and advance design of the LOVR/US 101 Interchange Project. 5. Required roadway capacity for future development in the area and outside the City limits. 6. Additional bikeway and pedestrian links to the regional bikeway system. -20- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN FLOOD PROTECTION OBJECTIVE Improve flood protection for residents and businesses, including alleviating impediments to carrying off floodwater and preserving flood plains. DISCUSSION Background In 1983, the City adopted Resolution 5138 approving a Flood Management Policy(also known as the Pink Book) that included policies, standards and action plans or projects for the City's creek system. A majority of specified action plans have been completed over the last 18 years. The remaining projects either did not receive Council support at the time of proposed implementation or can no longer be achieved due to stricter permitting processes adopted over those 18 years. In 1997, recognizing that a new look at flood control issues was necessary, the Council adopted a goal of achieving a document that looked at both the creeks and the more traditional storm drain"pipe"systems, with each requiring its own document. During the past four years the City has: 1. Began construction of the repairs to the Higuera Street Bridge. This project is scheduled for completion in the summer and fall of 2001. 2. Began systematic global positioning system (GPS) and geographic information system (GIS) mapping of all creeks and drainage structures in the City. 3. Received 10 year permits for debris removal annually at Marsh Street Bridge and every three years from the Pref imo Arm of Laguna Lake. 4. Replaced existing storm drains at select locations to reduce localized flooding. 5. Developed a working relationship with Zone 9 staff and Army Corps of Engineers to facilitate work in waterways. 6. Contracted for the second phase of the Stream Corridor Management Plan, now called San Luis Obispo Waterways Management Plan. 7. Contracted for the preparation of a comprehensive National Pollutant Elimination System (NPDES)program to meet federal mandates and contracted for an evaluation of funding sources to support that program upon adoption. 8. Contracted for and received new color aerial photos and Lidar-based contours of the entire city. Creek Systems. For the City's creek system, the final document of the Waterways Management Plan will provide design parameters, resource inventories, identification and prioritization of problems, opportunities for improvement, and management needs. The creeks will be modeled utilizing Army Corps of Engineers and Federal Emergency Management Agency (FEMA) guidelines to provide updated information regarding flood potential. Design standards for calculations of flow, repair of erosion and maintenance procedures will all be included. Finally the plan will propose financing programs. Upon completion, this work will replace the City's 1983 flood management policy(the Pink Book). While the 1983 flood management policy(and its proposed replacement) addresses the needs of the City's major creek systems, it does not address the remaining underground storm drainage system (such as catch basins and -21- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN FLOOD PROTECTION piped systems). We propose addressing this need by preparing a second document entitled the Storm Drainage Master Plan. This plan will map, analyze and identify replacement, funding and maintenance strategies for the City's existing storm drainage facilities. Since the 1995 floods, many older facilities built in the early 1950's have failed and require emergency attention, causing unplanned use of City funds. Adopting the Storm Drainage Master Plan will allow for an orderly and planned use of City financial resources. NPDES. The federal government has adopted regulations covering storm water discharge for most communities of less than 100,000 in population. Larger cities have been regulated for over 10 years. These regulations (National Pollutant Discharge Elimination System—NPDES) require an extensive program to be developed in each of six best management areas and be presented to the Regional Water Quality Control Board (RWQCB) with a Notice of Intention (NOI) to comply by March 2003. The program must be implemented within the following five years to the satisfaction of the RWQCB. The City's program must provide for public involvement and education, identify the existing drainage system and regulate illicit discharges into it, regulate construction for erosion control, regulate post construction projects for erosion maintenance and development and utilize "Best Management Practices"in maintaining City streets and facilities. Challenges We Will Face in Achieving this Goal 1. Zone 9 Funding Concerns. Completing all studies and projects identified in the Waterways Management Program has been very expensive. Zone 9, our local flood control district, does not have unlimited funding. Traditionally, 80% of Zone 9's cash flow was used for the City's annual creek cleaning program. Unused funds gradually accumulated in the reserves. Nearly all of the reserves have been used to complete the Waterways Management Plan in order to meet the requirements of the City, County and the Army Corps of Engineers. Funding by Zone 9 of construction projects will therefore be unlikely. In addition, Zone 9 advisory committee has indicated that they are more willing to fund creek maintenance and enhancement projects outside the City than construction flood improvement projects. 2. Storm Drainage Master Plan. Besides creeks covered by the Waterways Management Plan, most of the City's properties are served and protected by various piped systems that are nearing or at the end of their useful life. Some have recently failed and the Council provided needed emergency funding for replacement. The majority will eventually require repair or replacement, and this will be a major expense. Unless other means of funding can be identified,the General Fund will be responsible for the entire cost of this program. 3. NPDES Program. A plan for implementing the NPDES program should be available by the end of 2001. The plan will describe an implementation program that will begin immediately and continue for the next five to seven years. Significant public input will be a necessary component of this project as a key element will be public acceptance and support. Initial work will involve numerous "town hall" meetings. Evaluation of funding mechanisms is currently underway and should be brought to resolution by Fall 2001 and implemented by July 2002. The City will begin implementing the NPDES program in full beginning in March 2003. This is a big program that will involve multiple departments within the City as well as other agencies such as the County,the other cities in the County and the Central Coast RWQCB. 4. Preservation of Flood Plains. The Waterways Management Plan is an ideal beginning point toward the preservation of flood plains. Guidelines for development or prohibition of development will need to be seriously considered. The federal government is now protecting flood plains by buying developed property and physically moving those to higher ground. The City cannot financially support a similar program. Currently much of the flood plains of San Luis Obispo Creek in the City have been developed. In order to provide protection to the little that remains undeveloped, the City will need to identify significant funding -22- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN FLOOD PROTECTION sources in order to buy the land because the land is in private ownership. The current Capital Improvement Plan does not have adequate funds to do this. ACTION PLAN Task Date 1. Continue drop inlet maintenance program 2001-03 2. Complete construction of Higuera street bridge 10/01 3. Prepare plans to replace the Foothill/Stenner culverts 12/01 4. Complete Waterways Management Plan 12/01 5. Construct new bridge on Foothill Blvd at Stenner Creek 1/02 6. Review flood plain preservation options 6/02 7. Complete Storm Drainage Master Plan 6/02 8. Begin implementing storm water funding program 7/02 9. Clean culvert under Tank Farm Road 7/02 10. Submit a Notice of Intention to comply with the NPDES permit 3/03 RESPONSIBLE DEPARTMENT Public Works will have the primary responsibility for this project. The Natural Resources Protection Program, Utilities and Community Development will be actively involved in preparing the Waterways Management Plan. Other departments will become involved in implementing the Best Management Practices for Public Agencies. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL The work needed to accomplish the proposed action plan will be done by a combination of agency employees (City and County/Zone 9), Cal Poly intems and consultants as needed. Cost estimates of the various activities follow: 1. The Higuera Street Bridge Replacement project is currently funded. 2. Zone 9 Flood Control and Water Conservation District has funded the costs of preparing a new Waterways Management Plan required by the U.S. Army Corps of Engineers. 3. Upon adoption of the Waterways Management Plan, the Council will be asked to begin funding projects recommended in the Plan. These projects will most likely be requested as a part of the 2002-03 budget submittals. 4. Developing the data base and billing system to implement a Storm Water Drainage Utility Enterprise Fund will cost $70,000 during 2001-02. Although this cost will have to be borne initially by the General Fund, it would be eligible for reimbursement by the Storm Water Fund if finally implemented. 5. To keep on schedule for eventual NPDES program and plan adoption, additional resources will be needed. A report on these costs will be presented to the Council in Spring 2001. We anticipate that the next phase of NPDES program funding research and preparation will cost approximately$60,000 in 2002-03. 6. Removing two damaged culverts that convey Sterner Creek under Foothill Boulevard and replacing these culverts with a new bridge will cost $950,000 for construction in 2001-02. $760,000 of this cost will be covered by a federal Highway Bridge Replacement and Rehabilitation grant. -23- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN FLOOD PROTECTION 7. Completing the mapping and documentation of the storm sewer system and using this information to prepare a Storm Drainage Master Plan will cost$32,000 in 2001-02. 8. Installing one new catch basin, modifying three existing catch basins and installing a new storm sewer to correct drainage problems at the intersection of Monterey and Morro Streets will cost$110,000 in 2001-02. 9. Removing silt to increase capacity in the creek that passes under the Tank Farm Road Bridge near Hollyhock will cost$6,000 in 2001-02 for design and$25,000 in 2002-03 for construction. 10. Continuing to replace about 15 substandard catch basins annually will cost$50,000 each year. GENERAL FUND REVENUE POTENTIAL Forming a Storm Water Drainage Utility Enterprise Fund will allow the City to fund storm drainage activities from a source other than the General Fund. This should lead to a more reliable source of revenue for storm water projects and programs, similar to the other utility operations like water and sewer. This will also free-up general- purpose revenues for other important services like police, fire, street maintenance, parks and open space protection that do not have user fee options. OUTCOME—FINAL WORK PRODUCT 1. By preparing and adopting a Waterways Management Plan and Storm Drainage Master Plan, the City will be able to begin flood containment projects that will eventually implement flood protection to levels adopted by the Council. These could lower insurance costs to property owners and reduce community disruption. 2. By continuing to put significant effort toward the NPDES program, the City will be well along the path to adoption of a program as required in March 2003 that will result in a cleaner and better creek system. When a Storm Water Drainage Utility Enterprise Fund is established, the City should have a more reliable way to fund needs for the drainage system; and avoid committing General Fund resources that can be used for other high-priority City services. -24- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN J RAILROAD RECREATIONAL TRAIL OBJECTIVE Continue planning and purchasing property for the Railroad Recreational Trail to Cal Poly; extend planning to the south connecting the Edna-Islay Area into the master plan; establish the Morro Street"SLO Street" from the Railroad District to Downtown; and pursue grant funding to complete these projects. DISCUSSION Background. The City has completed Phase I of the Railroad Recreational Trail (RRT) from Orcutt Road to Bushnell Street along the east side of the Union Pacific Railroad. Phase H(Bushnell Street to the Jennifer Street bridge) should be under construction during Summer 2001. By Summer 2001, the City will receive a presentation from RRM Design on the recommended "route plan" for what is called the "Railroad Safety Trail" that extends from the AMTRAK passenger terminal to Foothill Boulevard. (As part of its work on the Cal Poly Master Plan, RRM Design has established the general alignment of the path north of Foothill Boulevard.) Public Works and Community Development have been working with property owners within the Orcutt Expansion Area to develop a Specific Plan for the area. This plan covers territory from Orcutt Road to Tank Farm Road,east of the railroad,and will include a proposed alignment for the southern extension of the RRT. As a part of the public hearings for the 1993 Bicycle Transportation Plan, a"bicycle boulevard"was proposed for Morro Street between Downtown and Santa Barbara Street(the Railroad District did not exist at the time). It was not adopted but was held for later consideration. In 2000, the Council decided, as a part of the Santa Barbara Corridor Study, that it was time implement the "bike boulevard" concept as part of an overall approach to pedestrian and bicycle related activities occurring along Santa Barbara Street, the adjacent Railroad Transportation Center and the nearby Jennifer Street Bridge. Challenges We Will Face in Achieving this Goal. Each part of this major improvement project will be challenging: 1. For sections of the RRT north of the AMTRAK passenger terminal, obtaining right-of-way and gaining support from the Union Pacific Railroad (UPRR)—and possibly the Public Utilities Commission—may be difficult and expensive; and will require a firm resolve on the Council's part to pursue all political, fiscal and legal options for securing the requisite right-of-way, either through easements, fee purchases or eminent domain. Using a lobbyist to obtain the attention of UPRR may be necessary. Retaining a good eminent domain attorney familiar with railroad issues will most likely be needed. 2. While there may be grant funding available, the costs of various trail segments are out-of-scale with available funding. Strong local funding support is likely a prerequisite for these projects and may affect the speed of implementation. Because transportation impact fees are slow in being accumulated, and because outside grant sources are not a given, it is highly likely that new voter-approved financing for the project will be necessary. Seeking a partnership with Cal Poly to assist with the northern segments of the RRT is important and may allow access to other public grant sources not now available to the City. 3. For sections of the RRT south of Orcutt Road, the path's alignment may avoid using railroad land. Planning for the eventual bike and pedestrian path is a matter of including the necessary provisions in the Orcutt Area Specific Plan and then adopting that Plan. However, the timing of that Plan is far from certain. Staff believes that the Plan will be before the Council for adoption within the two-year financial plan period but -25- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN RAILROAD RECREATIONAL TRAIL previous estimates for adoption hearings on the Margarita Area Specific Plan and the Airport Area Specific Plan have proven elusive. ACTION PLAN Phase III-RRT from AMTRAK Passenger Terminal to Marsh Street 1. Pursue grant funding for design and construction 2001-03 1. Achieve UPRR support for the project and initiate property acquisition 1/02 2. Complete conceptual plans and environmental review 9/02 3. Complete property acquisition 12/02 Phase IV=RRT from Marsh Street to Foothill Boutevar"d 2. Pursue grant funding for design and construction 2001-03 3. Council approves route plan for trail 7/01 4. Achieve UPRR support for project and initiate property actions 1/02 5. Complete property acquisition 4/03 RRT Miscellaneous=Morro Street"SL0 Street" 1. Complete conceptual design of bicycle boulevard 12/01 2. Finalize project plans and specifications for traffic signal at Morro and Santa Barbara and 7/02 other minor improvement; complete environmental review; advertise for bids 3. Complete project 11/02 Subsequent work and financial resources will be required beyond the 2001-03 Financial Plan to design and build Phases III and IV, to extend the RRT into Cal Poly (non-City project) and to begin RRT phases south of Orcutt Road. RESPONSIBLE DEPARTMENT Public Works, Transportation Division, will be the project manager. The Engineering Division will contribute engineering oversight and assistance in all tasks of the project. Community Development will assist in processing environmental review of the project and assist with any Planning Commission findings if eminent domain is required. Finance will play an integral role in assisting in developing a final financial plan for the project. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL 1. RRT: Phase M. Completing plans and environmental review will cost $50,000 in 2001-02 and acquiring property from UPRR will cost$76,000 in 2002-03. 2. RRT: Phase IV. Acquiring property from UPRR will cost$77,000 in 2002-03. 3. Morro"SLO Street." Installing a traffic signal and making other minor improvements will cost$120,000 in 2002=03. These projects will be funded through a combination of General Fund and Transportation Impact Fee Fund resources. -26- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN RAILROAD RECREATIONAL TRAIL GENERAL FUND REVENUE POTENTIAL No significant General Fund revenues are expected as a result of these projects. OUTCOME—FINAL WORK PRODUCT Achieving this goal will result in the following final work projects: 1. Completion of the Morro"SLO Street'bicycle boulevard. 2. Planning and property acquisition for Phases III and IV of the Recreational Railroad Trail. 3. Long-range plan to provide bicycle access to the southern portion of the City. -27- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN - DOWNTOWN TRANSPORTATION CENTER: NORTH AREA REGIONAL FACILITY OBJECTIVE Work with other agencies to acquire land for a multi-modal transportation center and parking structure,northeast of Santa Rosa Street between Monterey and Higuera Streets. DISCUSSION Background. This project creates a major transportation center in the Downtown area of the City. In March 2001, the Council adopted the area north of Santa Rosa between Monterey and Higuera Streets as the preferred location to develop the North Area Regional Facility (NARF) project. The ultimate project will include development of a multi-modal transit transfer center, a transit plaza and a public parking garage that will house much of the necessary employee parking for the Downtown area. On March 13, 2001, the Council approved $70,000 toward the Transit portion of the site for 1. Phase II hazardous material investigation. 2. Property appraisal of the Shell Station property. 3. Preparation of conceptual plans for the transit project. The Council also requested that staff, as part of the 2001-03 Financial Plan, return with recommendations for preliminary development, investigation and appraisal work for the parking component of the NARF project. Challenges We Will Face in Achieving this Goal. This project will face many challenging and difficult tasks before achieving its goal: I. Property owners on the identified block remain opposed to the development of the NARF project and as such, eminent domain will probably be required to pursue the project. 2. Funding for the transit facility, beyond the $70,000, has not yet been acquired and will need to be pursued through internal and external sources. 3. Operating the new parking garage will generate additional revenues, and there are already schedule rate increases for parking meters and other revenues. However, it is unlikely that these will offset increased debt service costs to finance land acquisition and construction. As such, we will need to develop a funding program for this, which will probably require new revenue sources or rate increases. These costs may be partly offset by contributions from the County. The total number of parking spaces needed will drive the overall cost of the project. 4. Financing costs(and overall costs) of the parking component of the project will be higher if office space for private use is included in the overall project 5. Achieving consensus on the concept for uses on the parking portion of the site will.be difficult. The more amenities that are added to the concept(such as day care center, offices, senior center and public restrooms), the fewer parking spaces will be available to meet the demands and a higher cost per space will result. Additionally, the complexity of consensus is magnified by adding necessary stakeholders such as SLORTA, Ride-On/TMA and taxi companies. 6. Parking expansion in the Downtown has always been controversial and the parking component of this project is anticipated to receive much scrutiny from the public. -28- . i i MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN DOWNTOWN TRANSPORTATION CENTER: NORTH AREA REGIONAL FACILITY 7. Participation of other public agencies such as the County will be necessary to complete the project, 8. The transit project will require grantor voter-approved funding. ACTION PLAN Transit 1. Pursue discretionary grant funding for property acquisition and construction 2001-03 2. Begin negotiations for"right of entry"to the Shell Station property to conduct Phase 11 8/01 hazardous material testing 3. Begin conceptual design phase for the Transit Plaza 11/01 4. Receive right of entry approval for Shell Station property; begin Phase II hazardous 11/01 material study 5. Complete appraisal of the Shell Station property 01/02 6. Complete draft conceptual design and environmental review;begin hold public 04/02 workshops and advisory body meetings on proposed plan 7. Council approves implementation plan 10/02 8. Secure funding for property; begin negotiations 01/03 9. Acquire property 06/03 Parkin 1. Pursue County financial participation in the project 2001-03 2. Hire parking design consultant team to develop preliminary project conceptual plans; 1/02 begin property appraisals for all remaining properties on block;begin environmental review of conceptual design 3. Complete draft preliminary project conceptual plans,appraisals,environmental review 10/02 and financing plan 4. Begin holding public workshops and advisory body meetings on proposed plan 10/02 5. Council adopts implementation plan 6/03 RESPONSIBLE DEPARTMENT 1. Public Works. Take lead role in managing the project through the Transportation Planning and Engineering Program, including working with contract attorney on eminent domain proceedings if needed. The CIP Project Engineering Program will contribute engineering oversight and assistance in all tasks of the project. 2. Community Development. Assist in processing environmental review of the project, Architectural Review Commission and Cultural Heritage Committee review and approval, and with any Planning Commission findings if eminent domain is required. 3. Finance Department. Assist in implementing necessary project financing. 4. City Attorney. The City Attorney will assist Public Works in property negotiations and acquisition as required. -29- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN DOWNTOWN TRANSPORTATION CENTER:NORTH AREA REGIONAL FACILITY FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Staffing Impacts The bulk of staff support for this project will be bome by Public Works. Given current and projected workloads, significant time by staff will be spent administering consultant contracts in order to achieve the above listed goals. It is doubtful that the current staffing levels will be able to conduct these tasks without affecting delivery of day-to-day transit and parking service. As such, significant use of consultant contract services will probably be necessary to complete individual project tasks. Financial Resources - Transit Plaza. The Council approved $15,000 from the Transit Fund in the 1999-01 Financial Plan to pursue a transit center study. That study was completed, and in March 2001 the Council authorized an additional $70,000 from the General Fund to prepare conceptual plans, property appraisals and hazardous material studies for the Shell Station property to be used for the transit plaza component of the project. Staff will be pursuing outside funding sources for the remaining portions of the transit project but these sources are not guaranteed. Limited grant funding(requiring a small match of Transportation Development Act revenue, if available) in the amount of $80,000 is assumed in 2001-02 for planning purposes. This will result in an approved Transit Plaza conceptual plan and environmental documents that will provide the City with the foundation for purchasing land and proceeding with construction when sufficient funding sources can be found to do so. rile the Action Plan shows purchase of the property in 2002-03 (estimated at $1 million), this is contingent upon securing new funding for this. We estimate that the entire project could cost about $2.6 million for design, land and construction. However, these figures will need to be refined as part of the 2001-03 work program. Staff will be pursuing FTA and TDA grant funding for property acquisition, design, environmental work and construction of the actual Transit Plaza facilities. It is important to note that the anticipated transit funding sources will be highly competitive and might not materialize. Ultimately, funding may be necessary from new voter-approved financing revenues if no other means of funding the project materializes. Parking Structure. The funding of the parking component of the project is a complex one. The City's parking in-lieu fee and parking enterprise funds normally are earmarked for providing additional public parking in the Downtown area. However, because the County is proposing a major expansion in the Downtown area, it is anticipated that some form of financial participation will be forthcoming to the NARF parking project. It is unknown at this time what amount may be contributed for the project. No detailed funding estimates have yet been provided as to the total cost of the entire parking project. However, based upon early parking space demand numbers, this is roughly estimated at $15 million for design, land and construction. The Parking Fund will be responsible for all acquisitions (any contributions from the County would be deposited into the Parking Fund). Over the next two years, $240,000 from the Parking Fund will be required for conceptual studies, and environmental review of the project once the Council adopts a conceptual plan for staff to analyze. -30- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN DOWNTOWN TRANSPORTATION CENTER: NORTH AREA REGIONAL FACILITY GENERAL FUND REVENUE POTENTIAL By helping keep our Downtown vital, construction these of facilities will indirectly contribute to the fiscal health of the Downtown, which is the City's largest sales tax producing area. OUTCOME—FINAL WORK PRODUCT Achieving this two-year Action Plan will result in the following final work products: 1. Conceptual plans, property appraisals and hazardous material investigation for both the NARF parking and transit components. 2. Long-term financial plan for the parking component of the NARF project to be used in future financial plans. 3. Contingent upon securing new, unidentified funding sources for this,purchase of the Transit Plaza site. -31- Zvi: MAJOR CITY GOALS:A01-03 FINANCIAL PLAN A PARKING AND ACCESS ADVISORY BODY OBJECTIVE Establish a Citywide parking and access advisory body. DISCUSSION Background Council Advisory Bodies. Through the years,the City has received parking"advice"from various bodies. When the City's first Parking Management Plan was being developed in the mid-1980's, there were two advisory bodies on parking issues: Citywide Parking Committee and the Downtown Association's (then called the Business Improvement Area Committee) Parking Subcommittee. Because there was a high-level of overlap in membership between these two advisory bodies, the Council eliminated the City-wide advisory body shortly after approval of the Parking Management Plan in 1987, and delegated the primary advise role to the Downtown Association's (DA) Parking Subcommittee. This group has been the primary source of community input on parking issues since then. In addition to overlapping membership,the Council also based this change on their conclusion that with adoption of overall policy guidance in the Parking Management Plan, main concerns would be focused on the day-to-day operations of parking facilities, and the DA Parking Subcommittee would be closer to these issues. In short, this approach was predicated on the belief that major policy issues on parking were resolved. In hindsight, this conclusion was pre-mature. The Council has also created "ad hoc"task forces as needed on focused parking issues. For example, our highly- successful rate structure resulted from a special task force formed by the Council in 1991 composed of representatives from the Downtown Association, Chamber of Commerce, citizens at-large and City staff from Administration, Finance and Public Works. Community-Based Groups. The Chamber of Commerce has created a subcommittee on parking issues, and in recent years has also made recommendations to the Council and provided a different venue for community input on parking issues. Additionally, other community-based groups such as Save SLO Downtown have emerged to advise the Council on such issues. These groups have promoted a higher level of awareness of pedestrian access issues to be considered simultaneously with downtown parking issues. Proposed Advisory Body Scope:Not Just the Downtown. The many points of view concerning how Downtown . parking should be provided, and how pedestrian access should be addressed, led the Council to request forming a specific advisory body on these key issues. Further, the Council was concerned that the City be treated as a whole and that the new advisory body be charged with reviewing parking and pedestrian access issues throughout the City rather than just in the Downtown. The work program for this objective will determine the best fit of the advisory body and its relation to the existing commissions and committees that currently advise the Council on transportation related issues regarding parking and pedestrian and bicycle access. Challenges We Will Face in Achieving this Goal. There are many major challenges to achieving this goal: 1. Developing duties and authority of the body as it relates to other Council advisory bodies. Advisory bodies that deal with these issues in one form or another include the Planning Commission, Architectural Review Commission, Mass Transportation Committee, Downtown Association, Bicycle Committee and occasionally -32- MAJOR CITY GOALS:1001-03 FINANCIAL PLAN PARKING AND ACCESS ADVISORY BODY the Cultural Heritage Committee. As such, reaching a clear understanding of the purpose and role of this new advisory body will be essential in gaining "buy-in" from the other advisory bodies and the community at-large on its new role. 2. Determining the make-up and representation of advisory body members, 3. Determining a work program and scope of the advisory body, including the nature and scope of the "City- wide" responsibility. Although not requested by the Council, this might include the combining of various other committees that deal with transportation issues such as the Mass Transportation Committee or Bicycle Committee into one advisory body on transportation matters. 4. Ensuring resources for adequate staff supporta Providing the necessary staff reports, research and attendance at meetings to appropriately staff this new advisory body will take time from other currently performed work. Advisory bodies tend to set their own work programs that may or may not coincide with Council goals and objectives. This will be one of the key items to be addressed as part of the Action Plan. 5. Meeting any expectations that this advisory body will make addressing parking issues easier. This advisory body will provide an added and hopefully improved forum for public discussion on parking issues. However, this should not be viewed as a vehicle for expediting conflict resolution. Due to the intensity of diverse community opinions on the parking and access issues that will be heard by this advisory body, it is highly unlikely that forming it will result in fewer speakers, less confrontation or shorter hearings at Council (or other public)meetings. ACTION PLAN Task ..te I. Complete research into other jurisdiction's methods of similar advisory bodies;receive 7/01 to 10/01 input from current advisory bodies on governance issues with and between advisory bodies 2. Hold Council study session to discuss advisory body issues, such as purpose,scope of 12/01 duties,membership and staff support and receive direction 3. Council approves formation of advisory body; staff begins recruitment 01/02 4. Council hold interviews with advisory body candidates 03/02 5. New advisory body holds first meeting 6/02 RESPONSIBLE DEPARTMENT 1. Public Works will act as the lead department on this goal. 2. Administration will assist in determining project objectives and coordinating discussions with the Council, community organizations and the public. 3. City Clerk's Office will assist Council members in recruiting and interviewing candidates. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Minimal direct costs will be incurred in coordinating public workshops, meetings, recruitments and interviews. We believe these can be absorbed within existing resources. Assessing advisory staff and other support needs for the new advisory body and its impact on other City programs is part of the Action Plan workscope. Accordingly, we will not know added resource needs or impacts (if any)until we complete this analysis in Fall 2001. -33- MAJOR CITY GOALS: X001-03 FINANCIAL PLAN PARKING AND ACCESS ADVISORY BODY GENERAL FUND REVENUE POTENTIAL It is unlikely that forming a new parking and access advisory body will produce any new revenue for the General Fund. OUTCODIE--FINAL WORK PRODUCT Creating a parking and access advisory body will provide an additional resource to the Council in determining the appropriate policies, programs and projects regarding parking and access issues Citywide; and provide the community at-large, neighborhood groups, downtown organizations, property owners and merchants with an additional forum to express public opinion regarding often emotional and controversial issues. -34- MAJOR CITY GOALS:X001-03 FINANCIAL PLAN ATHLETIC FIELDS OBJECTIVE Explore the possibilities for additional athletic fields, including plans for two lighted softball fields. DISCUSSION Background There is general community consensus that the City has a shortage of athletic fields. In fact,the current update of the Parks and Recreation Element of the City's General Plan lists athletic fields as the community's number one unmet recreational need. The Damon-Garcia Sports Fields, now in the design phase, meets the needs of the turf-based sports, especially soccer, if all of the fields can be lighted. With the construction of the Damon-Garcia Fields slated for completion in the Spring 2003, the priority shifts to the "diamond" sports of baseball and softball. Adding two lighted softball fields to the inventory would accomplish several things: 1. Provide an additional field for the 1,700 women.and men in the community who now participate in adult softball on two fields. 2. Establish a field to expand programming into senior athletics. 3. Allow Stockton Field (Sinsheimer Park) to be converted to a baseball field, designating Sinsheimer Park as the City's primary baseball facility. 4. Facilitate a rescheduling of other City and School District fields, making most single-sport facilities in accordance with the recently updated Parks and Recreation Element. This allows organizations to adopt these fields and participate in their maintenance. Completion of these two projects and full use of other existing community resources will meet the community's need for athletic fields. Making use of community resources is the"explore the possibilities"portion of this goal. Full use of existing fields adjacent to San Luis Obispo will require the City to be proactive in developing joint- use agreements with agencies such as Cuesta College and the San Luis Obispo County Parks Department. Upgrading and lighting the facilities these agencies have already built (but are under-utilized) would provide cost-effective ways to complete this goal. Other facilities can be rented for sports activities such as tournaments if the renting groups(usually youth sports organizations)can receive fiscal assistance. Renovation of two existing City fields would allow them to be better utilized. The Santa Rosa Park softball field is too small for its current use—adult slow pitch softball. Balls are routinely hit into the parking lot adjacent to the field, damaging vehicles and at times striking park users. Removing the parking lot and turfing the area will remedy this situation and provide more green space in the park. If two lighted softball fields can be added, and the Santa Rosa Park field upgraded, then the softball field in Sinsheimer Park (Stockton Field) can be converted to a youth baseball field. The fields at Sinsheimer will then become single-use for baseball. -35- MAJOR CITY GOALS:2001-03 FINANCIAL PLAN ATHLETIC FIELDS Challenges We Will Face in Achieving this Goal 1. Identifying two existing fields managed by another local government agency and entering into a joint-use agreement to light them could be a controversial project. Such fields exist, and at the staff level, there is a willingness to pursue a joint project. City costs for such a joint venture would be less than half of the cost of building new fields; and no land costs would be incurred. Additionally, a cooperative project on already- built fields will require less support from other City departments, most notably the Public Works Engineering Division. Further, any project that includes night lighting will face a significant level of public concern. Lastly, in the past there has been a preference in the community to build `bur own" fields instead of sharing their use with another agency. Nonetheless, the possibility of making better use of local, already-built fields is promising, especially since there seems to be a willingness among other local agencies to explore joint-use agreements and development projects. 2. Removing the parking lot from Santa Rosa Park to expand the softball fields could cause parking problems at the site. ACTION PLAN Task Date 1. Begin assisting athletic organizations in renting fields 7/01 2. Joint Use Committee begins bi-annual field improvement grant program 8/01 3. Study potential locations for new lighted softball fields 1 /02 4. Pursue a joint-field lighting project 1 /02 5. Present options to Council 3/02 6. Complete joint use agreements with appropriate agencies 6/02 7. Complete renovation of Santa Rosa Park 12/02 8. Light existing softball fields 6/03 9. Complete renovation of Stockton Field 6/03 Scheduling is dependent on the size and complexity of the adopted Capital Improvement Plan, the priorities established for the various projects and the availability of appropriate staff to manage the projects. Lighted Field Alternative As an alternative to a cooperative joint-use lighting agreement with another local agency, the City could construct the two fields and their support facilities on a site of six to seven acres that would need to be acquired. This type of a project would face all of the challenges that any development faces in the community. Once a site is identified, it will need an environmental review before project design can begin. While outside funding is possible for a portion of costs, this is still a $1,000,000 construction project with land costs of$2 to $3 million. Another challenge for the project is timing. There is an expectation in the community that the two fields would be completed in about the same timeframe as the Damon-Garcia project. If that is the case, other projects will need to be reprioritized. -36- MAJOR CITY GOAM"A01-03 FINANCIAL PLAN ATHLETIC FIELDS RESPONSIBLE DEPARTMENT If two existing fields are lighted, outside the City limits, then Parks and Recreation, in cooperation with the other partner agency, will be the lead department. For the renovation of Santa Rosa Park and Stockton Field: 1. Public Works,Engineering Division, will be the lead department. 2. Community Development will coordinate development review. Parks and Recreation will be the lead department in developing joint-use agreements and providing assistance to local athletic organizations in renting fields. The Joint Use Committee will review these actions and advise the City,Council on this process. With staff assistance, the Joint Use Committee will make the field improvement grants. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Pro'ect Cost Summar O eratin Programs 11 Capital Improvement Plan 2001-02 2002-03 2001-02 2002-031 2003-04 2004-05 Athletic Fields 20,000..._ _. 20,000 .... 1,119,500____ 187,500__ _ 17,500 17,500 Field Rentals 20,000 20,000 Santa Rosa Field Improvements 155,000 35,000 Field Improvements Grants 17,500 17;500 17,500 17,500 Sinsheimer Improvements 47,000 135,000 Cooperative Field Use: Two Lit Fields 500,000 Damon-Garcia: Four Lit Fields 400,000 Funding Source Summar O eratin Pro rams Capital Improvement Plan 2001-02 2002-03 2001-02 2002-03 2003-04 200405 Fundin :Sources ___. __.__20,000 20,000_ 1,119,500 187,500 17,500 17,500 General Fund 20,000 20,000 679,500 187,500 17,500 17,500 State Bond Program: Proposition 12 440,000 GENERAL FUND REVENUE POTENTIAL No net General Fund revenue is expected from this proposal. However, we expect adult players to assist in funding the added lighted fields through increased fees. OUTCOME—FINAL WORK PRODUCT If this goal can be achieved, then the existing community need for fields will be met. The City facilities will finally be caught up. Programs and policies found in the Parks and Recreation Element and Master Plan call for sufficient athletic fields to be constructed in new residential developments to meet the needs of the new residents. This will keep the need from coming back. -37- 1 MAJOR CITY GOALS:'2001-03 FINANCIAL PLAN RECREATION CENTER REMODEL: COMMUNITY/SENIOR CENTER OBJECTIVE Complete the remodel of the Recreation Center for community and senior uses. DISCUSSION Background. In May 2000, the Council reviewed a needs assessment for a multi-use community center. The result of that review was a determination that the facility was needed. The community center was envisioned as being in the 20,000 square feet range and included a gymnasium,multi-purpose rooms,kitchen and craft.studios. Enthusiasm for the project was tempered by its $5 million price tag. This precluded its short-term development. As an alternative, the Council approved the concept of remodeling the City's Recreation Center at Santa Rosa and Mill. The purpose of the remodel is to make the center more usable for community and senior uses. It calls for the following: 1. Addition of a full-service kitchen 2. Meeting room for meals, cards, and lectures 3. Pool table room 4. Craft studio 5. Senior services office Other building modifications include: re-roofing and improving acoustics, lighting and building circulation. The Council has already approved $30,000 in funding for the design phase,which is now underway. Challenges We Will Face in Achieving this Goal. A lack of outside funding to assist in financing this project could cause it to be phased over several years. ACTION PLAN Task .. . E3.1. Complete design and invite bids for construction 12/01 2. Award contract and begin construction 02/02 Complete remodel 06/02 RESPONSIBLE DEPARTMENT 1. Public Works,Engineering Division, is responsible for design and construction management of the remodel. 2. Parks and Recreation developed the scope of the project. 3. Community Development will coordinate development review. -38- MAJOR CITY GOALS:2001-03 FINANCIAL PLAN RECREATION CENTER REMODEL: COMMUNITY/SENIOR CENTER FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Capital Costs. The construction cost of the project is projected to be $500,000. Renovations will include re- roofing, installing air conditioning and creating an office for senior services, a poolroom, kitchen and front meeting room. Exterior remodeling of the facility will include repainting and minor alterations to the exterior of the building. Expressed parking concerns also require that the lot be resurfaced and reconfigured. There is significant potential for full outside funding for this project. Staff Resources. Staff resources will be required for managing design and construction (Public Works) and coordinating development review(Community Development). GENERAL FUND REVENUE POTENTIAL No net General Fund revenue is expected from this proposal. OUTCOME—FINAL WORK PRODUCT Once remodeled, this facility will provide an interim solution to the community need for more adequate indoor recreation space. With a moderate amount of parking, the site will be more accessible, especially for seniors. New facilities, such as the kitchen and senior service office,will allow for a significant expansion of programs. -39- I � MAJOR CITY GOALS:-/.001-03 FINANCIAL PLAN DOWNTOWN CULTURAL CENTER PLAN OBJECTIVE Begin preparing a Specific Plan and Environmental Impact Report that will forward the development of a Cultural Center in the Downtown. DISCUSSION Background The City has adopted a Conceptual Physical Plan for the City's Center that envisions the creation of a Cultural Center as a southwestern expansion of Mission Plaza. The Cultural Center would tie together many of the cultural facilities and resources of the Downtown, including the Mission, Mission Museum and Plaza,the County Historical Museum, Art Center, Little Theater and Children's Museum. The proposed Specific Plan would integrate supporting land uses, including additional parking areas, high density residential and office uses. It would also address street closures, vehicle and pedestrian access, necessary property acquisitions, time schedule for constructing improvements and the sequence relationships, and financing plan including private and public funding. The Conceptual Physical Plan provides a detailed description of the features that should be incorporated into a Cultural Center. The area identified for the Cultural Center in the Conceptual Physical Plan has been experiencing steady investment of public and private funding in the recent past. The Mission Plaza Creek Walkway expansion along the north side of the San Luis Obispo Creek from Broad Street to Nipomo Street as well as the renovation of the County Historical Museum were completed in 2000. Several parcels along Monterey Street between Broad Street and Nipomo are underutilized given the value of the land. Circulation improvements for the intersection of Monterey and Broad Street are likely to be considered in the near future. If future improvements to the Art Center, the Children's Museum and properties adjacent to Monterey Street between Broad and Nipomo streets are not coordinated and integrated into an overall plan for a Cultural Center, the City may lose an opportunity to create a cohesive and distinct addition to the unique ambiance of the Downtown. Challenges We Will Face in Achieving this Goal 1. Opposition from Property Owners. The creation of a Cultural Center as envisioned in the Conceptual Physical Plan is likely to require public acquisition and possible re-subdivision of several properties along Monterey Street between Broad and Nipomo streets. Although the City would be required to pay fair market value for the property, property owners who are unwilling to sell are likely to oppose a Specific Plan based on public acquisition of their property. 2. Balancing Competing Interests. There will be strongly held opinions concerning the appropriate role of parking,housing and preservation in this area. 3. Obtaining Funding Commitments from Public and Private Sources. Finding and maintaining funding commitments for public projects that will take years to realize can be difficult to maintain. 4. High Direct Costs. The Council's goal calls for preparing a Specific Plan and Environmental Impact Report (EIR) for a very comprehensive scope of issues, including traffic and parking. We estimate that this will -40- MAJOR CITY GOALS: X001-03 FINANCIAL PLAN DOWNTOWN CULTURAL CENTER PLAN have a direct cost of$300,000 for consultant services. Unfortunately, there are no "lower cost" options that are likely to yield significant benefits, since the Conceptual Physical Plan already provides a very comprehensive program for the downtown cultural area. 5. Limited Staff Resources. Equally important, even with consultant assistance, completing this goal will have a major impact on staff resources in Community Development,and reduce our capacity to achieve other high- priority, goals. As a result of the recent appointment of the Long Range Planning Manager to Community Development Director, we now have a key vacancy in the Division that would be responsible for this project. We expect this vacancy to last for at least six months while we recruit nationally to fill this position. During this same time, the Division will be deeply involved with many important projects, including the Airport, Margarita and Orcutt area Specific Plans,Conservation/Energy Element update and Housing Element update. The new Director will also be heavily involved in overseeing projects in the Development Review Division, including a heavy permit application workload, architectural review guidelines, commercial zone update, Chinatown Historic District-Court Street project and alternative residential street standards. For these reasons,the Action Plan below does not show staff work beginning on this project until after we fill this vacancy. ACTION PLAN Task Date 1. Draft workscope and begin preparing a request for proposals (RFP) 3/02 2. Complete preparation of RFP; Council authorizes issuance 5/02 3. Evaluate proposals, select design and environmentally sensitive consultant and start work 8/02 4. Hold community forums 11/02 to 2/03 5. Complete draftplan;begin re aria EIR 6/03 Carryover Tasks. As reflected above, it is unlikely that we will be able to complete preparation and adoption of the Specific Plan and EIR within the next two years, even if we start the RFP scoping process at the beginning of 2002. The following are tasks and projected schedule for completing this project after 2001-03: 6. Prepare environmental impact report 9/03 7. Complete EIR public comment period 12/03 8. Prepare final draft plan and EIR 4/04 9. Hold public hearings on final draft plan and EIR(advisory bodies) 5/03 to 8/04 10. Council adopts plan and certifies EIR 9/04 to 11/04 RESPONSIBLE DEPARTMENT 1. Community Development. Primary responsibility for managing preparation of the Specific Plan and EIR. 2. Public Works. Evaluation of vehicle circulation; public facility, parking and land acquisition recommendations. 3. Finance. Evaluation of financing plan and funding recommendations. -41- MAJOR CITY GOALS:`4001-03 FINANCIAL PLAN DOWNTOWN CULTURAL CENTER PLAN . FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL A consultant team with expertise in detailed urban design plans, public facility financing and funding, and environmental impact analysis will be needed. Based on recent experiences with other Specific Plans, it is expected that consultant services for planning and environmental review will cost$300,000. Goal Priority Alternative. Implementing this goal as adopted by the Council will cost much more than may have initially been apparent—both in direct costs for consultant as well as staff resources. As such, given our uncertain fiscal outlook, its $300,000 cost and the major impact it will have on staff resources in Community Development, the Council may want to reconsider if this goal falls into the "must fund" category that major City goals represent: it may more appropriately fall in the "other important objectives"category. (Note: Of the fifteen major City goals set by the Council, this was ranked fifteenth.) GENERAL FUND REVENUE POTENTIAL No net General Fund revenue is expected from this proposal. Property tax revenues from the Downtown may increase as a cumulative result of downtown improvements and land use intensification;on the other hand, if the City acquires properties that are currently in private ownership,property tax revenues will decline. Additionally, to the degree that this plan helps retain and enhance the Downtown's economic vitality, it may have an indirect impact in increasing sales and transient occupancy tax revenues. OUTCOME—FINAL WORK PRODUCT The cultural center specific plan will provide a detailed prescription for implementing the Conceptual Physical Plan for the City's Center with regard to focusing cultural facilities adjacent to Mission Plaza. -42- 1 MAJOR CITY GOALS:A01-03 FINANCIAL PLAN CULTURAL SERVICES OBJECTIVE Continue funding for arts and culture; and identify long-range funding sources to secure the future of the Performing Arts Center. DISCUSSION Background Partnerships with Non-Profits for Cultural Services. The City provides support for cultural services in several ways. The City has a number of partnerships with non-profit organizations that help support cultural activities. Additionally, the City provides grant and other direct funding to support cultural activities within the community. Specifically,the City: 1. Contracts with Friends of Las Casas de Adobe (FOCA) to restore three historic City-owned adobes, and has provided on-going administrative support totaling $28,800 over the past three years to cover the cost of expenses such as insurance and utilities at the buildings. 2. Allows the San Luis Obispo Little Theatre (SLOLT)to lease City property on a short-term basis at $1.00 per year, and has agreed to allow them to build a permanent new theater on another piece of City-owned property in the future. 3. Provides the old Carnegie Library as a location for the County Historical Museum at $1.00 per year. 4. Leases property to the San Luis Obispo Art Center at $1.00 per year plus 5% of sales (averaging about $3,500 per year). 5. Leases property to the San Luis Obispo Children's Museum for$1.00 per year. 6. Contracts with an archaeologist to catalogue artifacts recovered during the construction of the Palm Street parldng structure. 7. Upon completion of rehabilitation,has agreed to lease the historic Southern Pacific Freight(SPRR)Depot for $1.00 per year to a non-profit organization to be used as a railroad museum. 8. Through the Promotional Coordinating Committee (PCC), provides grants to local cultural and tourism producing non-profit organizations ($103,000 in 2000-01). 9. Pays the County to allow the City-County Library to remain open on Wednesday evenings ($13,700 in 2000- 01). 10. Administers an Art in Public Places program that addresses public art requirements for both City-funded and privately funded construction projects Perforating Arts Center. In addition to supporting community-based non-profit organizations, the City, Cal Poly and the Foundation for the Performing Arts Center (FPAC) formed a unique partnership over ten years ago to build and operate a world-class performing arts center.. In order to pay for cost overrides that occurred in completing construction of the center, it was necessary to spend the endowment funds that had been raised by FPAC. The endowment was intended to make up any shortfall in annual operating expenses. As a result, the City, FPAC and Cal Poly have all been providing an annual operating subsidy to the center, instead of being able to rely on an endowment. (It should be noted that even if the endowment funds reallocated to construction were in place today, supplemental operating contributions would still be needed, although in lesser amounts). -43- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN CULTURAL SERVICES Additionally, there are still major pieces of equipment that need to be purchased, and a fund must be established for on-going maintenance and repair. Again, the City, FPAC and Cal Poly have all made some level of contribution to address equipment, maintenance and repair needs. However, no formal agreement has been reached on how to address these concerns in the longterm. Two Council members have already been appointed to an ad hoc subcommittee(with members from our other two partners)to address long-term funding issues. This group plans to complete this planning effort and present the results to the Council in Spring 2001. Currently,the City: 1. Provides$100,000 per year to the PAC to makeup for part of its operating deficit 2. Has provided $50,000 per year to the PAC for the past two years to help establish a major maintenance and repair fund. Challenges We Will Face in Achieving this Goal 1. Current City staff needs to develop additional expertise in order to become an efficient grant writing resource for other outside grant funding to support the arts. 2. Solving the long-term finances of the Performing Arts Center (PAC) is complicated by the fact that agreements must be reached between three partners before any actions can be taken. 3. The level of funding needed for the PAC endowment is very high—$12 million—and it will likely be difficult for the partners to provide their share. 4. Because the PAC partners are different types of organizations (municipal government, state educational organization and private foundation), it may be necessary to develop different long-term funding strategies for each partner. 5. There may need to be a short-term PAC strategy for the upcoming Financial Plan, in addition to any long- term funding solution. 6. Grant funding the amount of$440,000 for the SPRR Depot rehabilitation project may not be adequate to fully fund this project. ACTION PLAN Continue n ingfor Arts and Culture 1. Continue the current PCC grant program. 2001-03 2. Continue to support the City's formal cultural partnerships. 2001-03 3. Continue to support the City's Art in Public Places program, with particular emphasis on facilitating the new developer contribution aspect of the program. 2001-03 4. Seek out outside grant funding for additional City cultural activities. 2001-03 5. Continue funding to County for Wednesday evening hours at City-County library. 2001-03 6. Continue to provide administrative assistance funding to FOCA. 2001-03 7. Provide special assistance to FOCA in using Community Development Block Grant funds for rehabilitation of the Rodriguez Adobe. 2001-02 8. Begin rehabilitation of the Southern Pacific Freight Warehouse for use as a railroad museum. 5/02 -44- MAJOR CITY GOALSc z001-03 FINANCIAL PLAN CULTURAL SERVICES ACTION PLAN(Continued) Task bate Lon -Term FundingSolution or Performing Arts Center* 1. Adopt revised PAC operations agreement and possible long-term funding agreement. 10/01 2. Begin implementing the PAC long-term funding plan. 2001-02 *As indicated above, the three partners of the PAC are currently meeting to develop a long-range funding strategy. The results of those meetings may change this work scope or the timing of various steps. As noted above, they hope to complete this work and present their recommendations by Spring 2001. RESPONSIBLE DEPARTMENT Administration has overall responsibility for the goal. Public Works will oversee rehabilitation of the Southern Pacific Freight Warehouse FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL We plan to continue funding at current levels for the City's "1% for public art" policy as part of the capital improvement plan and PCC grants at their current level (adjusted for inflation). We also plan to continue funding extended library at their current level($13,700 annually)as well as ongoing PAC support($100,000 annually). The following summarizes proposed augmentations in funding levels in 2001.03: 2001-02 00 Administrative assistance for FOCA $15,500 $15,500 CDBG funding for Rodriguez Adobe 190,200 Grant funding for Southern Pacific freight warehouse 440,000 Interim payment to PAC maintenance,repair and replacement fund 50,000 50,000 1. At this time, it is impossible to predict the funding implications of the long-term financial plan for the PAC. Approval of any additional funding could occur in the context of the 2001-03 Financial Plan, or it may be occur at some other time. This largely depends on the amount and phasing of any increase in City obligations. 2. No additional staff resources are necessary to achieve this goal. GENERAL FUND REVENUE POTENTIAL An economic study of the PAC done during its first year of operations indicated that approximately $110,000 comes back to the City in terms of increased sales and transient occupancy tax. -45- MAJOR CITY GOALS:'1001-03 FINANCIAL PLAN CULTURAL SERVICES OUTCOME-FINAL WORK PRODUCT Achieving the two-year Action Plan will result in: 1. Continued allocation of cultural grant funding 2. Acquisition of additional outside cultural grant funding 3. On-going success of current non-profit partnerships 4. An increased amount of public art 5. Rehabilitation of the Rodriguez Adobe 6. Rehabilitation of the Southern Pacific Freight Warehouse and the start of a railroad museum 7. Maintenance of longer hours at the City-County Library 8. A revised operations agreement for the PAC, and an approved long-term funding plan. -46- MAJOR CITY GOALS: X001-03 FINANCIAL PLAN HOUSING OBJECTIVE Continue implementing programs to achieve the City's housing production goals. DISCUSSION Background The City currently implements a variety of housing production programs and strategies to facilitate the production of housing and the inclusion of affordable housing, including: 1. Annual Community Development Block Grant(CDBG)funding for affordable housing units. 2. Waiving development review fees for all affordable housing units. 3. Implementing an affordable housing incentive program, including density bonuses. 4. Implementing an inclusionary housing program requiring that 15% of housing built in residential expansion areas and 5% of housing built outside expansion areas to be affordable to low and moderate income households. 5. Waiving development impact fees for all units provided above our inclusionary requirement. 6. Offering low-cost construction financing for affordable housing units. 7. Implementing an inclusionary housing and in-lieu fee program for non-residential development. 8. Working closely with the Housing Authority and other non-profit organizations on affordable housing programs. 9. Waiving development impact fees for all affordable housing units developed by the Housing Authority and other non-profit organizations. 10. Attending Cal Poly campus planning forums and Cal Poly/Cuesta College/City joint student housing discussions; 11. Administering an affordable housing fund. 12. Providing fast-tracked processing for affordable housing permits. 13. As directed by the Council on April 3, 2001, working closely with Cal Poly on their proposal to build faculty and student housing on undeveloped property they own adjacent to the City's limit. The City also implements policies to insure that new residents and housing are assimilated in a gradual way, so as to minimize their impact on existing residents and neighborhoods and ensure that adequate resources are available to serve them. Challenges We Will Face in Achieving this Goal High Land Costs. In recent years,the actual number of housing permits sought has not reached the threshold for enacting limits. Lack of available land has been a key limitation on housing production, and a major obstacle to producing affordable housing. Limitations on land and permits for housing combine with a strong demand for housing in San Luis Obispo to result in high land and housing prices. While the City has many incentive -47- l MAJOR CITY GOALS: A01-03 FINANCIAL PLAN HOUSING programs for encouraging affordable housing, high land costs—which reflect the desirability and quality of life that San Luis Obispo offers—are difficult to overcome in a market economy. Rapidly expanding the supply and availability of land is the most common market solution to this. However, this runs the considerable risk of reducing the quality of life that made this area attractive to begin with. In short, as long as San Luis Obispo is perceived by the market place as a highly desirable place to live,land costs will always be relatively high. Limited Staff Resources for Implementing Programs. Community Development currently allocates approximately 25% of an Associate Planner position to developing and overseeing affordable housing programs. In addition, implementation of existing affordable housing programs involves other Development Review Division staff as these programs are applied to development applications. This typically occurs as incentives or inclusionary housing requirements are requested and reviewed. This amount of staff time has been sufficient to work on one new housing project or program per year. Implementing existing affordable housing programs requires an on-going commitment of staff resources. Updating the General Plan Housing Element will require allocating additional staff resources to those currently allocating to housing. Competition for Use of CDBG Funds. Annually the City Council must choose activities that will be funded from the CDBG program. There are typically more requests for funding for than there are funds available. The Council has previously determined that providing affordable is the highest priority use of CDBG funding. Annually, grants to the housing authority have been the highest single award of grant funds. This is not expected to change. ACTION PLAN Task Date 1. . - 1. Work cooperatively with Cal Poly and Cuesta College in creating on-campus student 2001-03 housing. 2. Work cooperatively with the Cal Poly Foundation to facilitate construction of affordable 2001-03 faculty and staff housing. 3. Continue implementing the inclusionary housing program. 2001-03 4. Approve new housing proposed by the private sector that uses appropriately zoned land, 2001-03 does not exceed the City's 1% growth limit and meets the City's inclusionary housing requirements for low and moderate income families,especially in the Margarita area. 5. Continue to support processing and review of the Orcutt Area Specific Plan. 2001-03 6. Explore the"Community Affordable Housing Fund"concept. 2001-03 7. Continue funding affordable housing programs through the Community Development 2001-03 Block Grant program; and retain this as the highest priority used of these funds. 8. Evaluate the potential for added staff resources to seek affordable housing grant funding, 12/02 new incentive and regulatory programs, and increased inter-agency coordination. 9. Begin updating Housing Element and affordable housing production targets. 7/02 -48- MAJOR CITY-GOALS:-4001-03 FINANCIAL PLAN HOUSING RESPONSIBLE DEPARTMENT 1. Community Development. Primary responsibility for implementing the City's housing goals, including program implementation and administration, General Plan implementation (new programs and projects), updating the Housing Element, interagency coordination and CDBG preparation and coordination. 2. Administration. Interagency coordination, and CDBG review and preparation. 3. Finance. CDBG preparation, administrative support and shared responsibility for administering grant programs; accounting for housing funds; coordination of low-cost construction financing programs; and assistance in developing affordable housing financing programs. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL No added resources are proposed at this time in continuing to implement existing housing programs. The following summarizes the resource constraints and options facing the City over the next two years. Sustaining the current level of existing programs and working on tasks involved in the early stages of the Housing Element update will continue to require the dedication of 50% of one Associate Planner's time and incremental addition of other staff member time as development projects involving incentive programs and the inclusionary housing regulations are processed. The inclusionary housing program will help to provide additional affordable housing as the residential expansion areas are developed. However, even if the inclusionary requirement for affordable housing is built instead of paid for through in-lieu fees, only about 375 affordable housing units will be built in the expansion areas. The number of low and moderate-income families in the City number in the thousands. Task 8 in the Action Plan evaluates the potential to improve the production of affordable housing by dedicating additional staff resources to overcoming the land cost problem through the acquisition of grants to buy down land costs for affordable housing proj ects. Many local governments in the State and nation, including Paso Robles and San Luis Obispo County, dedicate full-time staffing to this endeavor. In addition to acquiring grants, the City could continue to monitor professional housing forums to find new and creative methods for increasing the City's affordable housing supply. A dedicated staff person could explore more thoroughly subsidy and regulatory approaches to creating affordable housing and work more closely with Ca] Poly's housing staff and Cuesta College on housing issues. Existing Housing Element implementation and grant administration, including CDBG), could be combined into this staff position. The position would complement the work of the Housing Authority rather than duplicate it. The work involved is an eligible expense for reimbursement from CDBG grant funds, and as such, funding for this position could be provided through this source. GENERAL FUND REVENUE POTENTIAL Due to the nature of local government finance in California, there are no favorable General Fund impacts from residential development. In fact,there are likely to be significant adverse impacts. This underscores the need for overall balance in the community—as provided in the City's General Plan—between residential and non- residential uses. , -49- MAJOR CITY GOALS:X001-03 FINANCIAL PLAN HOUSING OUTCOME-FINAL WORK PRODUCT Continuing to implement our housing programs—with a special emphasis on working cooperatively with Cal Poly and Cuesta on student, faculty and staff housing needs, implementing inclusionary programs and approving residential development consistent with the General Plan—will help us in achieving our overall General Plan vision of the kind of community we want become. -50- MAJOR CITY GOALS 'z001-03 FINANCIAL PLAN OPEN SPACE PRESERVATION OBJECTIVE Continue funding for open space and agriculture preservation, including management programs for open space lands and staffing for implementation of those plans. DISCUSSION Background Funding for Open Space Acquisition. In the 1997-1999 and 1999-01 Financial Plans, the Council allocated $200,000 in each year, plus a $202,500 augmentation in 2000 ($1,002,500 total) from the General Fund to the open space protection program. During the course of the 1999-01 Financial Plan period, the City completed negotiations with the Union Pacific Railroad, Herbert and Diane Filipponi, and with the Hastings family regarding acquisition of those three properties in fee; and completed a second conservation easement transaction with John Guidetti in conjunction'with the Nature Conservancy of California. In addition to the above, several other transactions are in progress at this time with other property owners, and two large property dedications have recently been completed. Through February 2001, the open space program has led to the acquisition of approximately 1,130 acres of land in fee and 1,480 acres in conservation easements. The 2001-03 program seeks to sustain this effort in order to take advantage of continuing favorable opportunities for grant support, both from the Federal and State governments, as well as the potential for attracting significant private grant support from organizations such as the Nature Conservancy of California. It is anticipated that $700,000 of City funds will be utilized in late 2001 for two major acquisitions, which total $1,750,000 between them. These transactions will basically deplete General Fund open space acquisition resources (including $400,000 allocated for 2001-03 and funds carried over from 1999-01). If funds are needed for new projects that come forward with significant outside funding, staff will return to the Council at that time with funding options. Two projects currently under option are expected to have specific needs for safety improvements and resource' enhancements. As such, we recommend an additional $50,000 for this purpose in 2002-03. Operating Support. The City currently funds about $350,000 annually in direct support of this goal through the Natural Resource Protection ($257,000) and Ranger ($88,700) programs. Additionally, significant staff support is provided by Administration, Community Development,Parks&Recreation and Finance. Open Space Management. As the City acquires more open space, it has become increasingly important to develop plans defining its appropriate management and use. A prior open space preservation objective recognized the need for additional maintenance and patrol responsibilities as our open space grew in size. Following this direction from Council, staff has already started working with the Land Conservancy to develop general open space management guidelines, which can then be applied to individual management plans for specific areas. A focus of this new work program will be to finalize the management guideline_s and complete four such plans.. Challenges We Will Face in Achieving this Goal 1. Acquisition negotiations will be arduous and frustrating at times. The difficulties inherent in the pursuit of this program may result in significant delays, or in the failure or abandonment of certain projects, as was recently experienced with one major transaction. -51- MAJOR CITY GOALS.X001-03 FINANCIAL PLAN OPEN SPACE PRESERVATION 2. As the City acquires additional open space lands, there is a corresponding increase in maintenance and patrol responsibilities,which will require increases in the open space ranger program from time to time. 3. City funding is limited, and competition for grant funds at both the State and federal levels continues to be very intense. Therefore, in addition to efforts in land purchase, it will be necessary to continue to consider innovative development projects that offer open space benefits to the community, and to continue to seek out conservation-minded individuals or families for donations of land or easements. 4. The City's open space system is now truly a system, and requires a comprehensive approach to operation and management as well as cleanup of some new sites. This will place additional time and energy burdens of planning on City staff; however, this is a necessary step at this time. ACTION PLAN Task Date I. . - 1. Continue negotiating with willing property owners 2001-03 2. Continue planning and stewardship support(Land Conservancy&ECOSLO) 2001-03 3. Contract with CCC and others for trail improvement and associated resource protection 2001-03 at Bishop Peak Natural Reserve and possibly other sites 4. Provide for additional half-time Park Ranger, and evaluate ranger staffing needs for 2001-03 newly acquired open space when Johnson Ranch is ready to be opened to the public 5. Council adopts management standards for City open space lands 2001-03 6. Prepare and submit private, state and federal grant applications 2001-03 7. Complete individual management programs for four City open space areas, tentatively identified as follows: a. Irish Hills(Prefumo, Foster, DeVaul open spaces) 1/02 b. Bishop Peak 6/02 c. Johnson Ranch 1/03 d. Cerro San Luis 6/03 RESPONSIBLE DEPARTMENTS 1. Administration—Natural Resources. The Natural Resources Manager will have overall responsibility for program activities, including acquisition, development of management plans for City open space lands, continued development of the natural resources inventory, and ongoing educational and .stewardship programs. 2. Parks and Recreation. The Parks and Recreation Department will assist in project selection and evaluation of long-term management and operational needs. In consultation with the Natural Resources Manager, City Biologist and the City's non-profit partners, the ranger service will implement maintenance, restoration, safety, and patrol activities as well as stewardship and environmental education programs. Also in consultation with the Natural Resources Manager and City Biologist, the Department will also take the lead in evaluating ranger staffmg.needs,to determine if and when additional field staff is needed. 3. Community Development, Fire, Public Works and Finance. Other Departments will provide support as follows: Community Development staff and the Fire Marshal will participate in major planning efforts; Public Works will provide geographic information system (GIS) support; and Finance staff will assist in program financing. -52- MAJOR CITY GOALS: A01-03 FINANCIAL PLAN OPEN SPACE PRESERVATION FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Given the high priority assigned to this goal by the community and the Council, $550,000 is proposed to be spent from General Fund carryover ($150,000) and new funds ($400,000) over the next two years to provide matching monies for current and near-term projects. We expect that significant portion of the carryover from 1999-01 and new funding for 2001-03 will be used early in the Financial Plan period: These are expected to include $300,000 for the Foster property transaction and $400,000 for the Johnson Ranch acquisition. Staff is confident that at least $1.5 to $2 million in grants for land and easement acquisition will be forthcoming over the next two years, primarily from existing State grant programs. Additional grant sources beyond this are being pursued for several projects in very early stages, leading to a possible total of$4 to $5 million over a four-year period. Additionally, $50,000 will be needed for safety improvements and resource enhancements for the Johnson Ranch and Foster properties. Operationally, $20,000 will be needed annually for trail improvements and associated resource protections (primarily at Bishop Peak): and $14,300 annually to support an additional half-time ranger to meet the increased ranger workload from already acquired properties. As noted in the Action Plan, we will need to re-evaluate our ranger staffing needs if the major property acquisitions noted above go forward. Staff resources will continue to be led by the Natural Resources Manager, supported as necessary by the City Biologist and other.City staff, and by staff at the Land Conservancy of San Luis Obispo County. GENERAL FUND REVENUE POTENTIAL The Natural Resources Protection Program does not offer any direct revenue potential to the General Fund,. It does, however, provide a mechanism to leverage City funds with outside grant funds for open space acquisition or resource enhancement projects. In addition, a successful open space program will, over the long term, help to preserve the community character that brings tourists and targeted industries to our area, thus indirectly benefiting the local economy. OUTCOME—FINAL WORK PRODUCT The final work product will the successful continuation of the greenbelt program, evidenced by a satisfactory level of fee and easement acquisitions, dedications and/or donations, as well as appropriate plans for managing open space areas. -53- MAJOR CITY GOALS:-2001-03 FINANCIAL PLAN CIVIC OFFICES OBJECTIVE Purchase Copeland/French property and pursue construction of a multi-story office building with subterranean parking for City offices. DISCUSSION Background Over the years, the City has clearly stated its intention to retain its City Hall location in the Downtown area. At the same time, it recognized that the present City Hall was becoming increasingly crowded. In 1991, the Council directed staff to work with an architect to analyze future space needs for all staff located at City Hall and 955 Morro Street. As a result of that effort, a space needs analysis and detailed project program were developed, followed by the conceptual design for an addition to City Hall. The design project was then suspended due to the City's fiscal constraints. As a result of Council goal setting two years ago, we once again began the process of determining future space needs for City Hall. The services of the architect were again engaged for this purpose. At the same time, the Copeland Chinatown Historic District-Court Street project was presented to the Council. It included the possibility of the City leasing-out or selling some space within the Palm Street portion of the plan. As part of the negotiated Copeland/French Memorandum of Understanding (MPU), approved by the Council in September 2000, two options are included for purchasing different amounts of property located on the comer of Palm and Morro Streets. The MOU is purposely flexible as to exactly how the property would be used. A staff task force has been meeting since that time to evaluate the City's different options for the property. The task force concluded that the City should construct an office building on the property in the range of 20,000 to 30,000 square feet (with some amount of underground parking available); and that the building should be used by the City as an interim City Hall expansion until such time as it is appropriate to build an addition to the existing City Hall on the property that currently houses the old library. Challenges We Will Face in Achieving this Goal 1. The Copelands have requested that they be allowed to change some of the terms of the Chinatown Historic District-Court Street MOU. Depending on the outcome,of those renegotiations, the terms for the City to acquire the Copeland/French property may change, or the whole project may not go forward. Funding for the property purchase and design for the civic offices will come from the sale of City property on Morro Street (the parking lot and 955 Morro Street). As such, this goal may need to be significantly revised if there are major changes in the MOU, or the sale of the City property does not occur. 2. Assuming that the terms of the Copeland/French MOU do not change,the City needs to make a final decision on whether or not to purchase both parcels included in the agreement. This decision will be based on the size of the building planned and the amount and type of parking to be included. 3. A purchase agreement with the Copelands must be developed. 4. Decisions will need to be made on which City departments should be relocated to the new building, and whether space should be included for housing other governmental agencies(and if so, which agencies). -54- MAJOR CITY GOALS: 2001-03 FINANCIAL PLAN CIVIC OFFICES 5. Based on the parameters of a 25,000 square foot building with one level of parking, estimated costs for construction could require debt funding in the range of$11 million. This number could change significantly, depending on decisions that are made concerning the final size of the building; how much underground parking is provided; whether robotic parking is used; or whether the City simply pays an in-lieu parking fee instead of providing on-site parking. In any case, a funding mechanism must be determined in order for construction to proceed. 6. Completing the new building will likely generate the need for some changes at the existing City Hall. 7. The property is located in a known archeologically sensitive area. The cost of archeological study and recovery may be very high. 8. If the City were to attempt to maximize available parking by using a robotic process, we would be considering an unknown concept as far as San Luis Obispo is concerned. It is difficult to estimate what operating and repair costs might be. ACTION PLAN Task D. - 1. Complete analysis on size of building, amount and type of parking,departments to be housed and other potential tenants in order to determine cost of construction;prepare funding plan. 12/01 2. Present project concept and funding plan to Council. 2/02 3. Develop an RFP and award contract to begin conceptual/schematic design. 4. Develop and distribute RFP and award contract for environmental services and 4/02 preliminary archaeological services. 5. Execute purchase agreement with Copeland. 7/02 6. Begin design development. 12/02 RESPONSIBLE DEPARTMENT 1. Administration will be responsible for overall project management. 2. City Attorney's Office will take the lead in negotiating a purchase agreement with the Copelands. 3. Finance will be responsible for developing a funding mechanism. 4. Community Development will be in charge of archeological and other environmental studies. 5. Public Works will provide project coordination with contractors. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Very preliminary estimates for constructing a 25,000 square foot building with one level of underground parking, requiring the purchase of both Copeland lots,is approximately$13 million. The cost of land purchase and design will be offset by the sale of City-owned property across Morro Street from the proposed building. Significant staff resources from Administration, Finance, Public Works and Community Development will be required to manage this project. -55- MAJOR CITY GOALS: c001-03 FINANCIAL PLAN CIVIC OFFICES GENERAL FUND REVENUE POTENTIAL If the City were to lease vacant space to other governmental agencies, lease revenue would return to the General Fund. The amount would depend on the space available and current market lease rates. OUTCOME—FINAL WORK PRODUCT Upon completion of this work program, the City should be well into the design phase for an office building and underground parking on the Copeland/French property. It is estimated that construction could begin sometime in the 2004-05 fiscal year. -56- MAJOR CITY GOALS:2001-03 FINANCIAL PLAN MAINTENANCE OF BASIC SERVICES OBJECTIVE Preserve current service levels and adequately maintain existing facilities and infrastructure. DISCUSSION Background. The General Five Year Fiscal Forecast prepared as part of the 2001-03 goal-setting process concluded that the City should be able to fund current service levels and adequately maintain existing facilities, equipment and infrastructure over the next five years. However, limited Five Year Fiscal Forecast: 2001-06 resources will be available for new $1,250,000Revis_ eC Per Mid-Year Revlaw initiatives such as enhanced and Omer Budget Changea operating programs or the acquisition and construction of new facilities or $1,000,000 — infrastructure. "Net"Available $750,000 Funding for New Initiatives As summarized in the accompanying chart, after a "one-time" carryover of o $500,000 about $1.1 million from 2000-01 " (down from the $2.2 million originally projected in the forecast $zso,000 based on mid-year budget review revisions and other budget changes $o cz oovg,r: 2001-02 2002-03 200344 zooms zoos o0 since then), on average about $380,000 (in 2000 dollars) will be available annually for new initiatives. Considering where we have been in the past—when previous forecasts showed difficulties in funding basic services,let alone any new initiatives—this is a favorable outlook. However, this needs to be placed in the context of unfunded programs and CIP projects based on already adopted plans and polices, as well as the ambitious goals the Council has set for 2001703. It also needs to be placed in the context of the General Fund Five Year Fiscal Outlook budget: the "net available for new `P"�'� • Ongoing"net"for new initiatives of$380,000 annually,or initiatives" only represents about yy about 1%of General Fund revenues. 1% of General Fund revenues. As • Based on"rosy"forecast that is likely to be revised such, even small changes in our m downward in the Preliminary Financial Plan. forecast assumptions can adversely affect our ability to fund current �,... .,...... service levels. Further, this forecast was based on a relatively "rosy economic before the State's current energy crisis fully emerged, and before projected downturns in the national Retail economy. Sees In short, it is highly likely that our revenue projections in the Preliminary 2001-03 Financial Side in Plan will be reduced from those presented in the forecast. In this event, it will be even more Rb(uary difficult to achieve this goal of preserving service levels and adequately maintaining existing assets. a®mr.eaa®ttra.; -57- MAJOR CITY GOALS. 4001-03 FINANCIAL PLAN MAINTENANCE OF BASIC SERVICES Challenges We Will Face in Achieving this Goal. In light of Council goals for 2001-03 and a changing economic environment, we are likely to face a number of challenges in achieving this goal: 1. New Initiatives and Council Goals for 2001-03. By necessity, current programs and services will compete with new initiatives for the same limited resources; and just because we haven't done them before does not mean that new initiatives are not as important (or more) than current services. Provided in the sidebar are Major City Goals set by the Council for 2001-03 with significant General Fund General Fund Impacts implications. ° Los Osos Valley Road Improvements ° Flood Protection 2. Operating Cost Pressures. Even if we do not expand or enhance , ° Railroad Recreational Trail service levels, there will still be inflationary cost pressures on ° Downtown Transportation Center operating expenditures, which account for about 75% of General ° Open Space Preservation Fund outlays. Past experience tells us that it will be difficult to ° Athletic Fields ° Recreation Center Remodel: limit our current operating cost base to just increases in inflation. Community/Senior Center There will still be significant pressures to expand or enhance . Civic Center Offices operating programs in responding to legitimate, unmet service needs. Regulatory requirements may result in increased costs without a commensurate increase in service. And given the current energy situation, we can expect significant cost increases for electricity and natural gas; in the General Fund, this specifically impacts our street lighting, traffic signal and swim center operating costs. Further, we can expect employee groups to want to share in our improved fiscal circumstances; and binding arbitration for police officers and firefighters (our largest General Fund cost area)could place additional cost burdens on the City, if used. 3. Limited Revenue Options. All of our Financial Plans for the last ten years have required new revenues to balance them. However, with the passage of Proposition 218, our revenue options are more limited than they have been in the past. Very few options remain that can be implemented by the Council (and if they were easy to implement, we probably would have already). This means any significant increased or new tax source will require voter approval. In short, the era of Proposition 218 limits has arrived, and the Council will not have the same level of revenue flexibility in balancing the budget between current services and new initiatives that the City has had in the past. 4. Retirement Costs. Over the past several years, the City has been on a rollercoaster ride when it comes to our retirement costs. Based on the most recent actuarial analysis, our retirement plans for both sworn and non- sworn employees have assets significantly in excess of liabilities. For this reason, the City currently makes no employer contribution to the plans. However, our "normal" plan contributions should be 13% of payroll for sworn employees and 5% for non-sworn employees. If these rates were in place today, our contributions would be about $1.4 million annually in the General Fund (versus no costs in 2000-01). At this time, the State forecasts a continuing"zero" employer contribution rate for the foreseeable future. However,based on our past experience, this can change abruptly and dramatically. Further, the "zero rate" forecast assumes no changes in plan benefits, such as 3% at 50 for sworn employees or increased "cost-of-living" allowances. These are not"free," and if implemented, would significantly alter the funding status of our plans. At some point, they would result in a return to the "normal rate" plus an increase to fund the added benefits. -58- i MAJOR CITY GOALS.c001-03 FINANCIAL PLAN MAINTENANCE OF BASIC SERVICES 5. Liability and WorkersCompensation Insurance. The City has been extremely fortunate in controlling these costs in recent years. However, it was not that long ago these were among the City's fastest rising costs. Hopefully, this will continue into the future, but there are no guarantees. For example, in the area of workers' compensation, our most recent actuarial analysis shows the potential for significant cost increases in the future if current trends continue. 6. Internet and Catalog Sales. While there are many advantages to the "new economy," e-commerce presents major problems to us in the collection of sales taxes, our most important revenue source. While Internet sales are still a relatively small component of total retail sales (about 0.3% in 1998), all projections indicate significant increases in the future—as much as $3.2 trillion by 2003—especially as traditional "bricks and mortar"retailers move to e-commerce themselves("clicks and mortar"). Projecting revenue losses from this is very difficult. Hopefully, there will be a rational resolution to collecting such an important revenue source, and this type of assessment will be academic and not required. Placing this in perspective, sales taxes are the State's second largest General Fund revenue (after personal income taxes), bringing in about $22 billion annually and funding about one-third of State operations. In other states, sales tax revenues play an even larger role. In Texas, for example, there is no income tax, and sales tax is the primary state revenue source. In short,because this is such a major issue in funding state and local governments throughout the nation, hopefully a reasonable resolution will ultimately emerge. But if one does not, Internet sales will significantly undercut the City's fiscal condition. 7. Economic Outlook: Downward Revision Likely. As noted above, the current economic outlook is not as bright as we assumed in our initial forecast. As reflected in the accompanying chart, even relatively small changes in the forecast assumptions for a critical revenue source like Five Year Forecast:Alternative Sales Tax Assumptions sales tax result in a significant :. Revland Per Mid-Year Review and deterioration in our ability to fund $I.000 Other Budget changes current service levels. For example, if we retain all other z assumptions but project sales tax = lS+aouPW1 growth at our historic growth level of 3.9% (rather than the higher rates of '�°' "Net"Available Funding 5% to 7% assumed in the forecast), �°��°' for New Initiatives then we will lose any ability to fund new initiatives, and will be facing an "'==) average annual shortfall of about OSales Tax Growth:Forecast(7%in 2000-01;5%2001-06) $200,000 in funding current service OSales Tax Growth:Historic Levels(3.9%) levels. 0Sales Tax Growth:Flat And if we assume no growth in sales tax revenues (and retain all other assumptions), then we will face an operating shortfall of about$1 million in 2001-02, growing to $2.7 million within five years—and continuing to increase thereafter. And depending on its source and severity, an economic downturn can adversely affect virtually all of our top General Fund revenue sources in addition to sales tax, such as property tax, transient occupancy tax, utility user taxes and motor vehicle in-lieu fees. -59- --1 MAJOR CITY GOALS: A01-03 FINANCIAL PLAN - MAINTENANCE OF BASIC SERVICES 8. State Budget. Lastly, based on their past actions, we are not immune to further State budget cuts if it finds itself in fiscal stress. In fact, we can count on it—with elimination of the "VLF backfill" or further property tax grabs as likely candidates for State budget-balancers. And concerns about State budget woes are not unfounded. In dealing with the current "crisis de jour" - energy costs and availability - there is growing concern by the legislature that we will find ourselves in the worst of all worlds this.summer in continuing to make spot market purchases on behalf of private, investor-owned utility companies: ■ We will have expended the$8 billion State surplus. — ■ We will have expended the$10 billion bond issue. Dismal quarter Is WQCSt ■ The down-turned economy will adversely impact State revenues. in two decades ■ Insufficient new generating facilities will have been placed in operation. "^"'"-m'-'"".""'d-"". —.Iabbm.M1wmwwf.mt.ta.b.� P� Y. .wfimlfe.iHaotlW'IYa\b.doY bmlaOlbfMb!®I..R.�.mml v.rmmmw YbeemwE.lRr 11e Me.i.Yw1..V_I T..RwOnl ® Consumer rates will have increased by 50%or more. ab -,nor w.®�+va us.are u a:r._eurmam ACTION PLAN In the long-term, our ability to fund current service levels and adequately maintain existing assets rests on six critical factors: 1. Controlling Operating Costs. Since 75% of our operating costs are for staffing, this means limiting increases in regular staffing. 2. Improving Productivity. Through the effective use of technology, equipment and capital improvements, ongoing training and programs like `organizational vitality," improving the productivity of our work force will allow us to achieve similar(or better) service results with fewer resources. 3. Maintaining Adequate Reserves. In the event of an unforeseen (or deeper than projected) economic downturn (or other difficult-to-project events such as natural and human-made disasters), this is our "first line of defense" in preserving service levels as we prepare longer-term funding plans. This is especially critical if the problem is short-term in nature by providing a bridge to the restoration of more normal times. - - 4. Economic Development We can strengthen our fiscal Leading research fft-predicts recession condition by retaining and attracting businesses that are consistent with our General Plan policies. MWAB WJ.PRIOH �I.bb wd...uJw vM4®v.bm..d• www.w..b.u...� - m'90-91awsn ®.e�w ma.� .e..Y..`�e w"bme'." �,.•®hb...w. A w�sr.}....•. ffiYr9y"..wW bb._m'I.bwY �•� -°�-��^w '""®`"°"a""" 5. Legislative Efforts. We should continue to work closely SSM WS—weYw� a_rama.w nbwn.wrv...w.. rws�sewo.sY _,b..b.....�w -..-bre•" ...m•-b�— ,„,..,,,�..b�.� with others like the League of California Cities to restore v.atwww.sY senor.n ice...b.....n.rr Yw babne..wnua'y�,s,i,�,w,m, State budget cuts to cities during the mid-1990's and to p—wh.mbtr. YkaYlY pwleb V^d•H-. w.bilyj"""c.y�p(1.bwo. ' rddiO reY.nO tlnspblmi.Ys.eY:.'9a..b _.bl."eYw.wblw� improve overall stability in State-local government fiscal rw....b.wrnb: w..�ww.baP bn aen...muawwe_. r,.wwsw... .w aivawPrle b•".". b..rr'. el__taiaaLLW.m - relationships. 6. Voter Support for Major New Initiatives. We will need to rely on new revenues for any major new initiatives. This will mean voter support for new revenues—in evidence on election day. -60- MAJOR CITY GOALS: &001-03 FINANCIAL PLAN MAINTENANCE OF BASIC SERVICES These are long-term efforts that go beyond what we can achieve in the next two years. However, for the next two years, we should do the following: Task bate 1. . - 1. Financial Plan. Prepare and approve 2001-03 Financial Plan that preserves current 7/01 service levels, adequately maintains existing facilities and infrastructure, is consistent with our adopted fiscal policies, funds new initiatives that we can sustain into the foreseeable future and ensures our long-term fiscal heath. 2. Interim Reporting. Closely monitor the City's fiscal condition through continued on-line 2001-03 access to fiscal information,monthly financial reports,quarterly financial newsletter and comprehensive reports,mid-year budget reviews,Financial Plan Supplement.and special reports such as the quarterly sales tax newsletter. 3. Annual Financial Reports. Continue to issue annual financial reports in accordance with 2001-03 generally accepted accounting principles. 4. Revenue Management. Ensure we are maximizing our current revenues by continuing 2001-03 revenue management programs like the business tax and TOT review programs, sales tax monitoring and user fee updates. RESPONSIBLE DEPARTMENT Administration and Finance will have the lead responsibility for coordinating action plan tasks. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL No additional resources are required to complete action tasks. GENERAL FUND REVENUE POTENTIAL There are no significant revenue enhancements as a result of achieving this goal. OUTCOME—FINAL WORK PRODUCT Effectively using our financial planning, reporting and management systems will help us maintain the underlying fiscal capacity that is required in delivering basic services to our community. -61- MAJOR CITY GOALS. - 001-03 FINANCIAL PLAN REVENUE OPTIONS UNDER PROPOSITION 218 The following summarizes City revenue options to the city's storm drainage/flood protection system. organized by those the Council could approve and As storm drainage systems become even more costly those requiring voter approval. in meeting federal clean water standards through the National Pollutant Discharge Elimination System REQUIRES COUNCIL APPROVAL (NPDES), more cities will be turning to this funding approach. The following revenue sources could be set or The Council approved $50,000 in the 1999-01 increased by the Council. All of them have been Financial Plan to study the feasibility of forming a previously considered by past Councils. storm drainage enterprise fund. Conceptually, this fund could fully finance all of the City's operating Mello-Roos Districts for New Development and capital needs for storm drainage and flood Many cities require that new development pay not protection. only for the facilities needed to service them,but for Higher Planning Fee Cost Recovery day-to-day services as well. This could include park and landscape maintenance, street lighting, street As part of the 1999-01 Financial Plan, the Council sweeping, libraries and fire protection. This sets up increased planning service cost recovery for most two classes of city residents: those who receive what services from 25% to 45%. Setting the cost may be perceived as general city services based on recovery level to 100% (which is the goal for our the general purpose tax revenues they pay, and those other development review services) would raise who must pay an additional premium for those same about$500,000 annually. services. However, many cities have moved to this out of fiscal necessity. Higher Paramedic Cost Recovery We currently receive about $115,000 annually from The revenue impact of this is difficult to assess, our local ambulance service for paramedic services. since it would depend on what services were subject However, many cities have put this service on an to the special Mello-Roos tax. Additionally, it "enterprise fund"basis. would require a change in the City's fiscal policy, which states that general purpose revenues—not There are a number of models for this, and revenue special taxes or fees—should pay for services recovery can be quite high depending on how much delivered on a uniform, community-wide basis. of the total cost these cities decided to fund this way. For example, the direct annual cost of the Fire General Facility Impact Fees emergency response program is $3.8 million. The City currently assesses impact fees for water; Including indirect costs (such as vehicles, equipment sewer and transportation improvements needed to' and facilities, departmental administration, dispatch serve new development. Many cities have set fees and organizational support services like legal, for other facility improvements such as parks, insurance, accounting and human resources) cultural facilities, community centers, civic center increases the total cost to about$5.6 million. About improvements and public safety facilities. 75% of all Fire emergency responses are medical related, so potentially up to $4.2 million in Storm Drainage Enterprise Fund paramedic costs could be recovered. Similar to water and sewer, many cities in California Fire Engine Company Inspection Fees fund their storm drainage and flood protection programs and projects as enterprise operations. The Fire department performs ongoing business Fees are generally set based on contributed run-off inspections at no cost. Many cities charge for this -62- MAJOR CITY GOALS &.001-03 FINANCIAL PLAN REVENUE OPTIONS UNDER PROPOSITION 218 service. Based on past studies, this type of fee could property taxes above the "1% of market value" limit raise about$100,000 annually. under any circumstances. However, subsequent amendments to this constitutional limit allow for Higher Franchise Fees: Water,Sewer and Trash increases in property taxes for voter-approved We currently assess a 2% franchise fee on water and bonded indebtedness. While there are no limits to sewer services, and 6% on trash. While further how much could be raised, the proceeds are analysis would be required to support an increase, restricted to specified capital improvements. based on studies in other communities it is likely Mello-Roos special taxes: operating or capital. that we could justify an increase in franchise fees These districts are typically formed to provide based on their impact on City streets. services or capital improvements to new developments (when there is usually just one General Fund Water and Sewer Charges voter„—the developer/land owner),but they can be The General Fund currently pays about $325,000 formed on a citywide basis. Depending how they annually for water and sewer service; most of this is are structured when approved, Mello-Roos special related to park and landscape maintenance. Many taxes can pay for operations and maintenance as cities in the Central Coast and throughout the State well as capital improvements. Approval by two- do not charge themselves for water and sewer thirds of those responsible for paying the special services. taxes, weighted by each property owner's tax obligation,is required. Summary. As noted above, with the exception of a storm drainage enterprise fund, the Council has Majority(General Purpose)or taken a detailed look at all of these concepts in the Two-Thirds(Special Purpose)Voter Approval past, and chosen not to implement them for a number of policy reasons. The following revenue sources could be adopted by either two-thirds or majority voter approval, The above summary is only intended to layout the depending on their purpose. Revenue measures revenue options available to the Council without where the proceeds may be used for "general voter approval. It does not analyze their benefits or purposes” only require majority voter approval. drawbacks, and several of them would be major However, revenue measures where the proceeds are undertakings with serious public policy "earmarked" and designated for specific purposes considerations. require two-thirds majority voter approval. In both cases, depending on how the revenue measure is Based on past studies and Council direction, we structured,the proceeds could be used for operations have no plans at this time to present these for or. capital improvements (including debt service Council consideration, except for the concept of payments on capital projects financed by bonds). forming a storm drainage enterprise fund as previously approved by the Council. Local option sales tax. This would require special State legislation, as current provisions only allow REQUIRES VOTER APPROVAL "local option" sales taxes on a countywide basis. However, several cities—including Truckee, Fort Bragg and most recently, Clovis—have set increased Two-Thirds Voter Approval sales taxes in the cities through local elections and special legislation. Based on current sales tax Property tax increase as part of general obligation revenues, a '/4 cent "local option" rate would raise bond issue. Adopted over 20 years ago, Proposition' about$2.5 million annually, and a %Z centrate would 13 does not allow an increase in general purpose raise about$5.0 million annually. -63- MAJOR CITY GOALS:-X001-03 FINANCIAL PLAN REVENUE OPTIONS UNDER PROPOSITION 218 Transient occupancy tax. Last changed in 1993, Cities are allowed to set their own rate, but must the current rate is 10%, which raises about $3.9 give up their share of the $1.10 rate if they do so. million annually. This is the City's third largest Many cities in California have done this, and these revenue source after sales and property taxes. Each locally assessed rates range from $1.10 to $10.00 "one percent" increase would raise about $390,000 per$1,000 of value. The most common rate is $4.40 annually. per $1,000. At this level, our own property transfer tax (which currently generates about $150,000 Utility users tax Most residents and businesses in annually)would raise about$1.1 million annually. California pay utility user taxes at rates ranging from 3.5% to 12.5%. The City adopted its utility Business tax. Anyone doing business in the City is users tax in 1972 at a rate of 5%, which has required to pay a business tax set at 0.05% of gross remained unchanged since then. It is levied on all receipts (or $50 per $100,000 of gross receipts). utility users except for sewer and trash service. This currently generates about$1.2 million per year. Each 10% increase in the rate (such as $55 per Most cities set their rate based on the sales tax rate $100,000 of gross receipts) would raise about in place at the time, which accounts for some of the $120,000 annually. variability in rates (and our rate of 5%). Generating about$3.2 million annually, this is the City's fourth- Summary largest General Fund revenue source. Each "one increase would raise about .$650,000 Gaining voter approval for new revenues is an percent" incea annually, ea million if it was set at the current extensive and difficult undertaking. In March 2000, sales tax rate. An option would be to leave the the Council was provided with a comprehensive current rate in place, but extend it to sewer and analysis of the feasibility of doing this. While the trash. This would raise about$300,000 annually. results of this study were encouraging, it underscored the importance of careful planning and Given projected increases in energy costs, gaining the critical need for an active community-based voter support for an increase in this revenue source group that would aggressively campaign for its at this time would be especially difficult. passage. Such a group does not currently exist. Property transfer tam Statewide, there is a property The "Maintenance of Basic Services" work program transfer tax of $1.10 per $1,000 of value when discusses this issue in greater depth. property is sold (or $275 on a property worth $250,000). For sales in a city, the proceeds are evenly divided between the city and the county, for an effective city rate of$0.55 per $1,000 of value. (For sales in unincorporated areas, the county retains all of the tax). -64- MEETING AGENDA COUIVOL - COHHUNf4f(ON z.° ITEM #Qw� n DATE: April 11, 2001 0`000NCIL ❑ CDS DIR fftAO CSl'FfN DIR TO: City Council ErACAO ❑ FIRE CHIEF 9,ATTORNEY O PW DIR O-CLERK/ORIG ❑ POLICE CHF FROM: Vice Mayor Ewan ❑ DEPT HEADS ❑ REC DIR CY r'r'r� ❑ UTIL DIR SUBJECT: Energy Bills T2�O gni ❑ HR DIR Recent events in Sacramento have brought at least two bills to the Governor's desk which may help the City to decrease its use of electrical and natural gas energy. These bills Have short-term goals,with a lot of money being allocated for energy conservation, especially in the Utilities division. I would ask council to direct staff to research SD 5X &AB 29X, along with any other pending legislation, for areas where we may be able to gain funding for energy conservation, and apply for those funds as soon as possible. As a community leader, I would also suggest that any programs identified in this legislation which may be used by non-profit organizations such as the Economic Opportunity Commission should be elucidated and forwarded to the appropriate agency. cc: Ken Hampian Wendy George Bill Statler John Moss RECEIVED APR 12 2001 SLO CITY CLERK Communication-John Ewan Storm Water Management Program - NPDES Program Requirements, Recommended Activities and Approach, Program Staffing, and Estimated Costs for City of San Luis Obispo, California Prepared for: Mr. Wayne Peterson, P.E. City of San Luis;'Obispo Public Works Department 955 Morro Street San Luis Obispo, CA 93401 January 9, 2001 Questa Engineering Corporation 98202swprog-finaUJanuary 9, 2001 3'zS, c O� �1 MEETING AGENDA DATE a_o J ITEM #= P.Lc. tivedJ am,C TABLE OF CONTENTS INTRODUCTION I SECTION 1.OVERVIEW OF STORM WATER PHASE II PROGRAM 2 SECTION 2.PUBLIC EDUCATION AND OUTREACH 4 SECTION 3.PUBLIC PARTICIPATIONANVOLVEMENT 8 SECTION 4.ILLICIT DISCHARGE DETECTION AND ELIMINATION 11 SECTION 5.CONSTRUCTION SITE RUNOFF CONTROL 16 SECTION 6.POST-CONSTRUCTION RUNOFF CONTROL 22 SECTION 7.MUNICIPAL OPERATIONS-POLLUTION PREVENTION 24 SECTION 8.PROGRAM DEVELOPMENT AND ANNUAL REPORTING 29 SECTION 9.RECOMMENDED PROGRAM STAFFING 31 SECTION 10.PROGRAM COST ESTIMATE 37 LIST OF FIGURES AND TABLES Table 1 - Total Estimated Program Costs Tablet- Estimated Costs for Program Elements and Reporting Table 3- Estimated Costs for Pre paration/Adoption of Storm Water Ordinance Table 4- Estimated Costs for Public Education and Outreach Table 5- Estimated Costs for Public Participation Table 6- Estimated Costs for Illicit Discharge Detection and Elimination Program Table 7- Estimated Costs for Construction Site Runoff Control Program Table 8- Estimated Costs for Post-Construction Runoff Control Program Table 9- Estimated Costs for Pollution Prevention/Good Housekeeping Program Questa Engineering Corporation 98202swprog finaWanuary 9, 2001 Based on the above milestones and on-going water quality and stormwater program activities, the above dates are easily achievable, and the City can be considered to be "ahead of the game" with respect to Phase II implementation. SECTION 2.PUBLIC EDUCATION AND OUTREACH Public Education and Outreach is the first control measure of the Program. Goals and Requirements The goals of the Education and Outreach component of the Storm Water Program are to: ➢ Raise public awareness about urban runoff pollution and its impacts on the community's water resources; and ➢ Educate the community about specific pollutant sources and what individuals can do to reduce urban runoff pollution. To meet these goals, the requirements of the education/outreach component of the Storm Water Program are to: ➢ Implement a public education program which distributes education materials and conducts outreach activities aimed at informing the public about the impacts of storm water discharges on local water bodies, and receiving waters; and ➢ Implement appropriate BMPs and set measurable goals in order to assess the success of the public education and outreach program. Recommended Education/Outreach Activities, Policies, and Procedures 2A. Provide a wide variety of educational information on non-point source pollution and urban waterways management: 1. Informational brochures, posters, and fact sheets 2. Newspaper, billboard, and radio advertisements 3. Creek Care Guide 4. Web site 5. Educational exhibits 2B. Present workshops: 1. General forum on water resources in SLO 2. Industry-specific workshops/presentations, for food service industry, automotive repair and wrecking, construction/contractors, landscapers, municipal workers. 3. Schools, science fairs. Questa Engineering Corporation Page 4 98202swprog finaUJanuary 9, 2001 2C. Provide education and assistance to homeowners: 1. Creek care (bank stabilization and dumping) 2. Landscaping and water quality protection (use of fertilizers and pesticides) 3. Home repair/maintenance and water quality protection (use and disposal of paints, solvents, and other household chemicals) Existing City Activities That Meet Education/Outreach Program Requirements 2A1, 2C2, 20. The City of SLO Utilities Department currently conducts residential and commercial water audits, which address irrigation runoff and fertilizer management, in addition to water conservation issues. In addition, the Utilities Department conducts education and outreach efforts regarding landscape management, recycling and solid waste management. Educational materials are provided by the Utilities Department addressing these issues. These existing materials can be utilized and modified to address non-point source pollution and urban runoff control. 2A3. The City has a SLO Creek Care guide that can be updated and expanded to discuss the role of creek care in protecting the water quality of creeks within the City. 2C2. The City of SLO Natural Resources Manager, Neil Havlik, is available to discuss creek care issues and make recommendations on bank stabilization and re-vegetation to homeowners as well as guidance to City staff on public projects. Action Plan The recommended Action Plan is divided into two phases: (1) Program development phase, and (2) on-going, annual activities. Note: the recommendations in the Action Plan account for those activities currently conducted by the City that meet Program requirements, and activities that may be needed to supplement these. Program Development Phase To facilitate Program development, we recommend that the City hire a one-half time storm water program Education Coordinator no later than June, 2003. The Education Coordinator would serve the principal role of developing and implementing the public education, outreach, and participation elements of the Program. Additional specific recommend Action Plan items are: 2A1. Compile, develop, and publish informationaUeducational brochures, posters,fact sheets. The City of Monterey's Model Urban Runoff Program (MURP)and City of Watsonville have developed excellent educational materials that are available to MS4s to customize and use. Larger metropolitan areas that have developed Questa Engineering Corporation Page 5 98202swprog finaUJanuary 9, 2001 Annual Program Activities 2B 1, 2 &3 Present workshops and presentations to general public, industry, homeowners, City staff, and schools. Workshops and presentations should be conducted by the Education Coordinator, and alternatively could be done through the Land Conservancy, or as is the case in many communities, through the Resource Conservation District as part of an Adopt-A-Watershed Program. 2C1, 2 &3. Provide assistance to homeowners regarding creek care and home maintenance. We recommend that the City's Natural Resources Manager's duties be expanded to be more available to assist homeowners on creek care issues, including re-vegetation and bank stabilization. In addition, the Education Coordinator should be available to provide information to homeowners regarding home maintenance and landscaping and their potential water quality affects. Staffing According to Ron Munds, the Utilities Department currently allocates approximately 25% time of 1.25 full-time staff equivalents (i.e. approximately 650 hours per year) to education and outreach activities on water quality protection. Currently the City's Natural Resource Manager, Mr. Neil Havlik, estimates he spends approximately 10-15% of his time working on creek related issues, on an annual basis. We recommend the City create a new half-time Storm Water Program Education Coordinator position to carry out the education/outreach tasks identified above. Given the existing public education/outreach work being conducted by the Utilities Department on water conservation and recycling, we suggest the Education Coordinator position could be based in the Utilities Department, and could potentially be an extension of the existing "Conservation Coordinator" position. Alternatively, the Education Coordinator could be in the Public Works Engineering Division. We also recommend that an Assistant Engineer in the Public Works or Utilities Department be allocated 25% time for a six month period to assist the Education Coordinator in developing the education materials. The Assistance Engineer should then be available 5% time to assist in delivering technical workshops on storm water controls. Finally, the City's Natural Resources Manager together with the City Biologist should be available to assist City and the public on creek related issues approximately 20% time, annually. The City may wish to consider hiring an outside consultant to develop and implement the Public Education/Outreach and Participation Programs. However, we believe this would probably not be cost effective, and would result in a more generic Program, less suited for the specific conditions and needs of the City. Questa Engineering Corporation Page 7 98202swprog final/January 9, 2001 Schedule We recommend the City hire the new Storm Water Program Education Coordinator by June 2003. We estimate the Education/Outreach Program materials, presentation and workshops could be developed in approximately six months, so the Education/Outreach Program could be operational by March 2004. The County will be required to conduct many of the same programs as the City. One alternative to seriously consider would be for the County to contract with the City; sharing expenses for Program development and implementation with the City. All educational materials, staff training seminars, and public and industry meetings and forums could be held jointly between the City and County. If this approach is favored, then the Storm Water Program financing consultant (Black and Veach) should determine if costs should beapportioned between the City and County on a per capita basis, acreage basis, or a combination of the two, depending on the Program element(i.e. education vs. street sweeping, etc.). SECTION 3.PUBLIC PARTICIPATIONANVOLVEMENT Public Participation/Involvement is the second control measure of the Program. Goals and Requirements The goals of the public participation/outreach program are to: • Raise public awareness about urban runoff pollution, and • Involve the public in developing and implementing the Storm Water Program in order to promote public interest and support. To meet these goals, the MS4 is required to: • Comply with all State, and local public notice requirements, and • Implement appropriate BMPs and develop achievable and controllable measurable goals aimed at involving the public in the Storm Water Program. Recommended Public Participation/Involvement Activities, Policies, and Procedures 3A. Develop a formal mechanism to solicit public participation/input on Storm Water Program. Questa Engineering Corporation Page 8 98202swprog-finaUJanuary 9, 2001 3B. Provide opportunities for public participation in Storm Water Program and activities to protect urban water quality: 1. Volunteer water quality/benthic monitoring 2. Volunteer storm drain stenciling and maintenance 3. Volunteer creek and beach clean-up 4. Creek walks 3C. Present workshops: 1. General forum on water resources in SLO 2. Industry-specific workshops/presentations, for food service industry, automotive repair and wrecking, construction/contractors, landscapers, municipal workers 3. Schools, science fairs. Existing City Activities That Meet Public Participation Program Requirements 3A. The Zone 9 Flood Control District holds regular meetings that are open to the public, as part of the Phase H SLO Waterway Management Plan development. These meetings are advertised, and the meetings begin with a public comment period. The SLO Land Conservancy currently coordinates the SLO Creek Task Force, which is a citizens group. This Task Force can continue to act as a vehicle in providing information to the public on the storm water program, and to solicit input from the public. 3B 1. The SLO Land Conservancy currently conducts a citizen's volunteer water quality monitoring program. The RWQCB currently has a water quality assessment program as part of its TMDL planning work. In 1995 Cal Poly completed a detailed water quality study/assessment of the SLO watershed. This document provides a listing of recommended water quality BMPs, and can serve as a baseline with which to judge the effectiveness of future storm water BMPs. The Phase II work plan includes completion of a rapid water quality bio- assessment study that will also provide useful information in Storm Water quality planning. 382. The SLO Land Conservancy currently conducts a volunteer storm drain stenciling and maintenance program. Questa Engineering Corporation Page 9 98202swprog-finaUJanuary 9, 2001 3B3. The City currently sponsors creek and beach clean-up days in cooperation with the SLO Land Conservancy. 3B4. The SLO Land Conservancy currently coordinates beach and creek walks. Action Plan Note: the recommendations in the Action Plan account for those activities currently conducted by the City that meet Program requirements. Program Development Phase 3A. Develop of a citizens advisory committee. Two good avenues for such a committee are (1) the Zone 9 advisory committee project meetings for the Phase II Waterway Management Plan, or (2) the San Luis Obispo Creek Task Force, organized by the SLO Land Conservancy. 3B1. Organize a volunteer water quality / benthic monitoring program (see MURP Appendix 3G). The water quality monitoring efforts by the SLO Land Conservancy and the RWQCB, as well as the Phase II rapid bio-assessment survey efforts would largely meet this requirement of the Program. The City/Zone 9 should coordinate with the Land Conservancy and the Regional Board on these activities. In particular, the City and Land Conservancy should collaborate on volunteer monitoring organization efforts, sampling, laboratory analysis and quality control efforts, and data sharing. Annual Program Activities 3B2. The City should continue to coordinate with the SLO Land Conservancy's volunteer storm drain stenciling and maintenance program. The Conservancy organizes volunteer storm drain stenciling and maintenance activities every other year. There are currently no storm drain stencils in the downtown area, and coordination with the Downtown Association is recommended in order to include the downtown area in the stenciling program. 3B3. The City should continue to coordinate creek clean-up in cooperation with the SLO Land Conservancy. 3B4. Continue to coordinate with the SLO Land Conservancy in conducting creek walks. 3C1, 2 & 3 Sponsor workshops and presentations to general public, industry, homeowners, City staff, and schools. Questa Engineering Corporation Page 10 98202swprog finaUJanuary 9, 2001 Staffin The Storm Water Program Education Coordinator should fulfill the staffing requirement for the Public Participation Program. As mentioned, we recommend the Education Coordinator position be a half-time position. We believe a half-time position could adequately meet the Education/Outreach and Public Participation requirements of the Storm Water Program. Schedule We recommend implementing a formal mechanism to solicit public input on the Storm Water Program by March 2002. This could include a Public Meeting on both Phase II Storm Water and the Regional Board's TMDL planning program completed in the next several months (March 2001 target date), as part of the SLO waterway Management Plan. The remaining public outreach tasks can be implemented after March 2003, when the NOI is submitted. SECTION 4. ILLICIT DISCHARGE DETECTION AND ELIMINATION Illicit Discharge Detection and Elimination is the third control measure of the Program. An illicit discharge is any discharge to a MS4 that is not composed entirely of storm water. Illicit discharges enter the storm drainage system through either (1) direct connections (mistaken or deliberate connections to storm drains), or (2) indirect connections, e.g., filtering into storm drains from cracked wastewater pipes, spills draining into storm drains, or waste waters or materials deliberately dumped into storm drains. It is important to note that an illicit discharge does not only include direct dumping into a storm drain, but may occur at a considerable distance from a storm drain. For instance, an oil leak in a driveway can be washed into the storm drainage system during a storm runoff event, and could be considered an illicit discharge. Goals and Requirements The goals of the illicit discharge detection and elimination program are to: • Control illicit discharges by conducting methodological field surveys/investigations of the storm drainage system and eliminating improper connections and discharges. • Prevent improper disposal of wastes through public education and providing appropriate waste material disposal options and incentives. • Contain and cleanup accidental spills using proper cleanup and disposal materials and methods. Questa Engineering Corporation Page 11 98202swprog-finalIJanuary 9, 2001 The requirements for the illicit discharge and detection program, as set forth in the Final Rule, include: • Developing a storm water system map that shows the location of all outfalls and the names and locations of all waters of the U.S. that receive discharges from the outfalls. • Developing an enforceable means to prohibit non-storm water discharges - i.e. an ordinance or other regulatory mechanism. • Developing a municipality-wide plan to detect and address non-storm water discharges. • Educating the general public, businesses, and public employees about the hazards (and legal consequences) of illicit discharge. • Determine appropriate BMPs and measurable goals to meet these requirements. Recommended Activities for Illicit Discharge Program 4A. Prepare storm system map. 4B. Develop ordinance prohibiting illicit discharges. 4C. Conduct field survey/site inspections to identify illicit discharges. 4D. Develop enforcement procedures (in addition to ordinance). Existing City Activities That Meet Illicit Discharge Program Requirements 4A. The City of SLO is in the process of inventorying its storm drainage system and developing an up-to-date map of the system. In addition, the inventory work completed as part of the Phase II Waterway Management Plan included field mapping of storm drain discharge points in SLO creek and its major tributaries. 4B. The City of SLO Municipal Code Chapter 13.08 sets forth standards and regulations governing discharges into the publicly owned treatment works. Section 13.08.130 "Stormwater and unpolluted drainage" item #B states: "No person shall discharge or cause to be discharged any sewage, garbage, rubbish, rubble or otherwise polluted water to any storm drain or natural outlet." Section 13.08.270 "Unlawful to dump on land" states: "It is unlawful for any person to dump or discharge raw or chemically treated sewage from any source onto the surface of any lands within the city.." Though these sections do not use the term "illicit discharge", they directly relate to illicit discharge control. Questa Engineering Corporation Page 12 98202swprog-finaUJanua7y 9, 2001 Section 17.18.050 "Discharges to water or public sewer system" of the Municipal Code states: "Discharges to groundwater or waterways, whether direct or indirect, shall conform with the requirements of the Regional Water Quality Control Board and the California Department of Fish and Game." Since the NPDES Phase II Program is under the Regional Water Quality Control Board's jurisdiction, this section is directly related to the ordinance requirement of the illicit discharge program. 4C. The City Fire Department coordinates the City's hazardous waste and materials management regulation program. This program, known as the Unified Program, is managed by SLO County, which acts as the Certified Unified Program Agency (the CUPA). Under a January 1998 agreement between the City and County of SLO, the City implements a number of programs which are relevant to the illicit discharge program. These existing programs include: (1) the Aboveground Storage Tank Program Spill Prevention Control and Countermeasure Plan, H&SC, Division 20, Chapter 6.67, Section 25270.5(c); (2) the Hazardous Material Release Response Plans and Inventory Program, H&SC, Division 20, Chapter 6.95, Article 1; and (3) the Hazardous Materials Management Plan and the Hazardous Materials Inventory Statement requirements, Uniform Fire Code, Part 7, Article 80, Section 8001.3.2 and Section 8001.3.3, as adopted by the State Fire Marshal pursuant to H&SC Section 13143.9. As part of these programs, the Fire Department conducts site inspections to identify hazardous materials. The City Fire Department also provides emergency response for hazardous materials spills. A principal goal of spill response program is to prevent hazardous materials from entering the storm drainage system, and thereby protect water quality. Spill containment and diversion are the primary techniques used in the City's spill response program. Action Plan Note: the recommendations in the Action Plan account for those activities currently conducted by the City that meet Program requirements. The majority of the work for the illicit discharge detection and elimination program should be done within the first year or two of Program implementation, with spot checks in subsequent years, as necessary. Specific recommended activities include: 4A. The City of SLO should finalize the City's storm system map. This work is underway, and slated to be completed in 2001, well before regulatory requirement dates. Questa Engineering Corporation Page 13 98202swprog-finaUJanuary 9, 2001 4B. The City should amend Municipal Code Sections 13.08.130 "Stormwater and unpolluted drainage", 13.08.270 "Unlawful to dump on land", and 17.18.050 "Discharges to water or public sewer system" to more specifically address illicit discharge control. We recommend reviewing the Model Urban Runoff Program's Model Urban Storm Water Quality Management and Discharge Control Ordinance and incorporating elements of this ordinance to meet the specific requirements and criteria of the City (see MURP Appendix 2B). This Model Ordinance does not contradict the existing City ordinances that address illicit discharges, but provides more detailed language regarding restrictions and enforcement. 4C. Develop monitoring procedures (see MURP Appendix 4A) and a Report of Non- Stormwater Discharge form. The Model Urban Runoff Program has example forms (see MURP Appendix 3I and Appendix 3DD) which should be amended to meet City requirements. Prioritize areas within the City to conduct illicit discharge detection inspections/surveys. Purchase water quality sampling equipment and supplies. Conduct inspections/surveys, focusing on priority areas. 4D. Initiate correspondence (education/warning) with illicit dischargers. Collaborate with law enforcement regarding enforcement, where necessary. Staffing The SLO Fire Department estimates that approximately $41,250 in Engine Company time each year is devoted to hazardous materials spill response, and $177,840 per year in salaries are devoted to compliance with the CUPA program. Material provided by Molly Brown, SLO Fire Department, Hazardous Materials Section. Hazardous Material Emergency Response Annual Costs Categories Annual Costs Engine Company Time $41,250 Materials: Barrels, Absorbent Booms, etc 3,050 Hazardous Material Emergency Response Training 8,000 Hazardous Waste Disposal Fees 620 Countywide Hazardous Material Team Participation 1,000 Subtotal $53,920 Questa Engineering Corporation Page 14 98202swprog finaUJanuary 9, 2001 CUPA Program Compliance Annual Costs Category Annual Costs Salaries $177,840 Computer Program Costs (Envision & CUPA DMS) 500 Training (Non-Emergency Response) 3,500 Vehicles &Equipment 5,000 Subtotal $186,840 Total Hazardous Material and CUPA $240,760 We recommend the Public Works Department coordinate the Illicit Discharge Program. The Engineering Division is currently developing an up-to-date storm system map, and this task should be completed by this Division. We have identified existing City ordinances which relate to illicit discharge, but more work needs to be done to develop the illicit discharge ordinance. We recommend that the City hire a consultant to develop the illicit discharge ordinance. One option to consider would be to amend the existing contract of the City's storm water financing consultant to include this task. The required illicit discharge detection surveys/inspections should be completed by an Assist. Engineer and Engineering Technicians in the Engineering Division, as detailed under the "Schedule" section below. This Division should also coordinate correspondence with illicit dischargers, and work with law enforcement, as necessary. Schedule The storm system map being developed by the Engineering Division is to be completed in spring 2001. We recommend the City hire a consultant to develop the illicit discharge ordinance by January 2002. The new ordinance should be adopted prior to submittal of the NOI. We recommend that a comprehensive inspection/survey effort be completed within the first two years following submittal of the NOI. We estimate this initial inspection/survey effort to require two full-time Engineering Technicians for 1 month and an Assistant Engineer two weeks to oversee this work. Subsequently, we recommend annual "spot checking" of priority areas, identified on the basis of water quality sampling, and the presence of commercial and industrial dischargers along the creek. We estimate this yearly effort would require two Engineering Technicians for 2 weeks and I week for an Engineering Assistant. Questa Engineering Corporation Page 15 98202swprog finaUJanuary 9, 2001 SECTION 5. CONSTRUCTION SITE RUNOFF CONTROL Construction Site Runoff Control is the fourth control measure of the Program. Goals and Requirements The goal of the construction site runoff control program is to: • Develop, implement, and enforce a program to reduce the amount of pollutants in storm water runoff from construction activities that result in land disturbance of greater than or equal to one acre. • The requirements of the construction site runoff control program include: • Developing an ordinance, or other regulatory mechanism, requiring the implementation of proper erosion and sediment controls on construction sites. • Developing procedures for site plan review of construction plans to address water quality protection measures. • Developing procedures for site inspections and enforcement of control measures. • Establishing procedures for receiving information/concems about construction site practices from the public. • Develop appropriate BMPs and measurable goals to meet these requirements. Recommended Activities for Construction Site Runoff Control Program The Construction Site Runoff Control Program is primarily geared toward private sector construction activities, although Public Works projects are included. Within the City of SLO, plan review of proposed projects, including grading and erosion control plan work on private property is the responsibility primarily of the Community Development Department. The Public Works Department, however,, oversees large tract developments, as well as construction activities on City property and right-of-ways. Therefore, the Construction Site Runoff Control Program is the responsibility of both of these Departments. Construction site runoff control on municipal properties is addressed in the Municipal Operations Pollution Prevention/Good Housekeeping Program. Questa Engineering Corporation Page 16 98202swprog-finaUJanuary 9,2001 The recommended activities for the Construction Site Runoff Control Program are as follows: 5A. Develop an ordinance specifically addressing construction site erosion and sediment control. 5B. Develop procedures to ensure adequate review of site plans to address erosion and sediment control on all sites greater than one acre. 5C. Develop procedures to conduct construction site inspections to ensure appropriate erosion and sediment control measures are in place on all site greater than one acre. 5D. Provide informational brochures and fact sheets on construction site erosion control and recommended BMPs. Existing City Activities That Meet Construction Site Runoff Control Program Requirements 5A. The City of SLO Municipal Code has several ordinances that address grading and soil erosion. Section 3316.1 "Slopes" of Chapter 15.04.010 "Amendments to Uniform Administration Code states: "All disturbed surfaces resulting from grading operations shall be prepared and maintained to control against erosion. This control may consist of effective planting installed as soon as practicable and no later than 30 days prior to calling for final approval." Section 3305 of Chapter 15.04.010 sets forth rules and regulations to control excavation, grading and earthwork construction, including fills, embankments, and work within waterways. This section provides specifications for when a grading permit is required. Item #F of Section 16.36.250 "Subdivision Design and Improvements" provides guidelines for the construction of storm drainage and erosion control facilities in subdivisions. Section 13.20.04 "Landscape Standards" in Chapter 13.20 sets landscaping standards, including use of erosion control measures, for all new development. Section 17.16.025 of the City of SLO Municipal Code provides setback requirements for all creeks in order to protect water quality of the creeks. 5B. Under CEQA and NPDES Phase I requirements, the City of SLO Community Development Department currently requires that private projects that grade more than 5 acres develop an Erosion Control Plan during plan review as a condition of project approval. At the discretion of Planning Division,.erosion control measures may be required to be in place prior to issuance of a grading permit. Within the Community Development Department the Building Division is primarily Questa Engineering Corporation Page 17 98202swprog-finaUJanuary 9, 2001 responsible for addressing erosion and drainage controls during the plan check process. The Public Works Department currently requires tract developments to have plans for sediment control. The Public Works Department has a plan sheet that is included in the project plans, which outlines guidelines for sediment control, including siltation ponds, check dams, wattles, etc. The plan sheet is not site specific, but provides guidelines for sediment control. The Public Works Department requires a cash-equivalent deposit in favor of the City for potential erosion and sedimentation impacts. Public Works Inspectors participate in erosion control workshops sponsored by the Regional Water Quality Control Board. 5C. The Building Division of the SLO Community Development Department inspects construction site erosion control features according to the size of a project and proximity to sensitive waterways. There is, however, no formal procedure for completing inspections. Public Works Inspectors conduct construction inspections of tract developments, and inspects sediment control measures. There is, however, no formal procedure for completing inspections or enforcing compliance with the recommended controls. The Building Division of the SLO Community Development Department inspects construction site erosion control features following citizen complaints, and issues a Convection Notice as necessary. Action Plan Note: the recommendations in the Action Plan account for those activities currently conducted by the City that meet Program requirements. Implementation Tasks 5A. The City should amend Municipal Code Sections 3305 and 3316.1 of Chapter 15.04.010 and Section 16.36.250 of Chapter 16.36 to provide more specific guidelines regarding implementation and enforcement of erosion control measures. In part this should include the requirement to develop an Erosion Control Plan for all projects over 1 acre (currently 5 acres). The sample construction site erosion control ordinance presented in the Model Urban Runoff Program should be reviewed and relevant portions implemented in the amended Questa Engineering Corporation Page 18 98202swprog finalIJanuary 9,2001 City ordinances. 5B. Develop a plan review submittal requirements check-off form for contractors/developers to be provided by the Community Development and Public Works Departments (see MURP Appendix 3V, Appendix 3AA, and Appendix 3DD). Train Community Development Department Planning and Building Division and appropriate Public Works staff regarding review of Site Plans for erosion and runoff control BMPs. This should be an annual 1-day workshop. Initiate procedures within the Community Development and Public Works Departments to review Site Plans addressing erosion and runoff control BMPs of all projects that are equal to, or greater than, one acre. An official mechanism needs to be implemented to ensure the appropriate Department reviews site plans for erosion control. These procedures should be developed cooperatively between appropriate Community Development and Public Works Departments personnel. 5C. Train Community Development Department Building Division and appropriate Public Works staff regarding erosion and runoff control BMPs. This should be an annual 1-day workshop coordinated with the above workshop for Planning Division staff. We recommend that the City conduct a site inspection/ field review of all projects adjacent to creeks. The Natural resources Manager should continue to be involved in this task. 5D. Develop erosion control and non-point source pollution BMP fact sheets and informational brochures. We suggest using the San Francisco Bay Regional Water Quality Control Board's "Erosion and Sediment Control Field Manual", the Association of Bay Area Government's (ABAG) "Soil Erosion & Sediment Control Measures" manual, the California Storm Water Best Management Practice - Construction Activity Handbook, and MURP Appendix 30 and Appendix 3P as references'.. Develop guidance materials on preparation of Storm Water Pollution Prevention Plans; we recommend referring to the California Storm Water Best Management Practice-Construction Activity Handbook, and MURP Appendix 3R. Annual Program Tasks 5B. City of SLO Community Development Department and Public Works should Questa Engineering Corporation Page 19 98202swprog finalIJanuary 9,2001 continue to conduct Site Plan and Erosion Control Plan checks, including all project greater than 1 acre. 5C. City of SLO Community Development Department Building Division staff and Public Works Inspectors should continue to conduct construction inspections, including all project greater than 1 acre (see example reference forms in MURP Appendix 3V, Appendix 3AA, and Appendix 3DD). 5D. Present bi-annual workshops to contractors and developers regarding erosion and runoff control BMPs. Workshop information materials are available from the Santa Clara Valley Water District, Alameda Countywide Clean Water Program, Mann County Stormwater Pollution Prevention Program, and San Mateo Countywide Stormwater Pollution Prevention Program. Staffing Based on consultation with City staff, we have determined the following regarding existing labor allocation on erosion control issues: • Community Development Planning Division staff currently do not review erosion and drainage control measures during the plan check process, but rely on Building Division staff to address these issues. • The Building Division Plans Examiner estimates that he and two Building Inspectors each spend approximately 5% (100 hours per year) of their time addressing erosion and drainage control during the plan check process, representing a total labor allocation of approximately 300 hours per year for Building Division staff. • The Public Works Department tract development inspector (Ray Pitt) estimates that he currently spends approximately 10% (2 10 hours per year) of his time per year addressing erosion control issues, both during plan check and inspections. • Two Public Works Department Engineering staff review erosion control measures during plan check procedures, and provide consultation to developers on these issues. Each of these engineers (Jerry Kenny and Howard Birlew) spend approximately 5% (210 hours combined total per year) of their time addressing these issues. We have identified existing City ordinances which relate to erosion control, but more work needs to be done to develop the construction site runoff control ordinance. We recommend that the City hire a consultant to develop the ordinance. Questa Engineering Corporation 98202swprog-finaUJanuary 9, 2001 We estimate the process of initiating (or revising) procedures for site plan checks and site inspections will require approximately 1 week for a Senior Planner/Building Division Plans Examiner and 2 weeks for an Assistant Planner/Building Division Plans Examiner and Public Works Inspector. The Education Coordinator should develop educational materials and conduct the planning staff and inspector training sessions. As described above, the site plan checks should continue to be conducted by Community Development Department Planning and Building Division staff. We estimate the erosion and runoff control component of these plan checks for project greater than 1 acre (current requirement covers projects greater than 5 acres) would require approximately 500 total additional staff hours per year for the Community Development Department and approximately 200 total additional staff hours per year for the Public Works Department. This estimate is based on consultation with Community Development Department and Public Works staff on the number of plan checks that currently are processed. Our estimate is less for Public Works staff as there are fewer municipal projects that fall within the 1-acre category. We estimate the erosion and runoff control component of site inspections for sites greater than 1 acre would require approximately 200 additional staff hours per year for Building Division staff. Schedule We recommend the City: • Hire a consultant to revise the erosion control ordinance by January 2002; • Revise procedures for plan checking and site inspections by March 2004; • Conduct staff training sessions jointly with the County not later than September - October 2004; • Begin the construction site erosion/runoff control plan checks by January 2005; • Begin the construction site erosion/runoff control site inspections by January 2005. Questa Engineering Corporation Page 21 98202swprog-finaUJanuary 9, 2001 SECTION 6. POST-CONSTRUCTION RUNOFF CONTROL Post-Construction Runoff Control is the fifth control measure of the Program. Goals and Requirements Post construction run-off control includes such activities as storm drainage system maintenance, street sweeping, and maintenance/cleaning of oil water separators and filter systems. The goal of the post-construction runoff control program is to: • Reduce the potential for discharge of pollutants into urban runoff from new development and redevelopment. The requirements for the post-construction runoff control program, as set forth in the Final Rule, include: • Developing an ordinance, or other regulatory framework, requiring the implementation of post-construction runoff controls. • Developing appropriate structural and non-structural BMP strategies to address post-construction runoff. • Ensuring adequate long-term operation and maintenance of controls. • Determine appropriate BMPs and measurable goals to meet these requirements. Recommended Activities for Post-Construction Runoff Control Program 6A. Develop an ordinance specifically addressing construction site erosion and sediment control. 6B. Develop City procedures to ensure adequate post-construction controls are implemented and maintained. 6C. Provide informational brochures and fact sheets on post-construction water quality controls. Existing City Activities That Meet Post-Construction Runoff Control Program Requirements 6B. Under CEQA and NPDES Phase I requirements, the City of SLO Community Development Department currently requires that private projects that grade more than 5 acres develop an Erosion Control Plan during plan review as a condition of project approval. The Erosion Control Plan must identify drainage plans which address post-construction drainage conditions. Questa Engineering Corporation Page 22 98202swprog-finaUJanuary 9, 2001 Action Plan Note: the recommendations in the Action Plan account for those activities currently conducted by the City that meet Program requirements. Implementation Tasks 6A. Review City General Plan and Municipal Code policies regarding urban drainage /non-point source pollution, and amend/update, as necessary. 6B. Train planners and building inspectors regarding post-construction erosion and runoff control BMPs (see MURP Appendix 3T). This training should be coordinated with the erosion and runoff control BMP and plan review workshop described in the Construction Site Runoff Control section. Initiate plan check procedures within Community Development Department to ensure that post-construction runoff controls are included and implemented. Annual Program Tasks 6B. Require SWPPP for all projects greater than 1 acre, and conduct plan checks regarding post-construction erosion and runoff controls. Conduct inspections of post-construction controls for projects that exceed 1 acre in size. 6C. Present workshops to contractors and developers regarding post-construction erosion and runoff control BMPs. These workshops should be combined with those addressing construction-phase runoff and erosion control. Staffing We recommend that the City hire a consultant to amend/update post-construction runoff control policies and incorporate these in the City Storm Water Ordinance. The majority of the Post-Construction Runoff Control Program requirements apply to the Community Development Department, though Public Works is responsible for ensuring post- construction controls are implemented for tract developments. The Education Coordinator should develop educational materials and conduct the planning staff and inspector training sessions on post-construction runoff controls. Questa Engineering Corporation Page 23 98202swprog finaUJanuary 9, 2001 Community Development Department Planning and Building Division staff should conduct plan checks for post-construction runoff controls. We estimate this component of the plan checks for project greater than 1 acre would require approximately 200 additional staff hours per year. This estimate is based in part on consultation with Community Development Department staff on the number of plan checks that currently are processed, and assumes approximately 4 hours should be devoted to post-construction controls per project. We estimate the post-construction runoff controls component of site inspections for project greater than 1 acre would require approximately 100 additional staff hours per year; requiring approximately 2 hours per inspection for each new project per year. Based on these assumptions we estimate approximately 50 projects will require post-construction controls review per year. Schedule We recommend the City: • Hire a consultant to review General Plan policies and develop/revise the post- construction runoff controls ordinance by January 2002; • Develop staff plan check procedures by March 2004 • Conduct the staff training workshops by September- October 2004; • Begin the post-construction runoff controls plan checks by January 2005; • Begin the post-construction runoff controls site inspections by January 2005. SECTION 7. MUNICIPAL OPERATIONS -POLLUTION PREVENTION Municipal Operations - Pollution Prevention is the sixth control measure of the Program. Goals and Requirements This measure is specifically aimed at the operations and maintenance procedures to be implemented by the City on municipal projects. The goal of the municipal operations pollution prevention measures is to • Reduce the amount and type of pollutants that collects on streets, parking lots, material storage and vehicle maintenance yards, and are discharged into the storm drainage system. • Reduce the release of pollutants that results from actions such as environmentally damaging land development and flood management practices or poor maintenance of storm drainage systems. Questa Engineering Corporation Page 24 98202swprog-finaUJanuary 9, 2001 The particular requirements of the pollution prevention/good housekeeping measure include: • Developing and implementing an operation and maintenance program for the MS4 to prevent or reduce polluted runoff from municipal operations. • Provide employee training on how to incorporate pollution prevention and good housekeeping into all municipal operations such as park and open space maintenance, fleet and building maintenance, roads maintenance, storm drain maintenance, and urban creek "maintenance". • Determining appropriate BMWs and measurable goals to meet these requirements. Recommended Activities for Municipal Operations Program 7A. Develop a Municipal Operations BMP Manual. 7B. Develop a Storm Drainage Maintenance Program. 7C. Provide necessary training for municipal staff to adequately and appropriately carry out the policies and procedures defined in the Municipal Operations BMP Manual and Storm Drainage Maintenance Program. Existing City Activities That Meet Municipal Operations Program Requirements 7A. Though the City of SLO does not have a Municipal Operations BMP Manual it has a number of programs/policies/activities in place (or in development) that address water quality protection, including the following: As part of the SLO Waterway Management Plan, the Stream Management and Maintenance Program provides policy statements and operations procedures, including BMPs, which address stream bank erosion control, maintenance of hydraulic structures, and herbicide use. The Public Works Department's Fleet Division follows the following practices aimed at protecting storm water quality: (1) the fuel islands used to fuel municipal vehicles is under cover; (2) all shops have an in-house drainage system to collect runoff and spills, which passes through a clarifier, and the untreated water is collected for proper disposal by an outside company; (3) waste oil is stored with secondary containment, and proper manifest procedures are followed when the waste oil is collected by an outside company; (4) spill clean-up kits are available in all shops; and (5) formal and informal training sessions are provided on spill prevention and clean-up. Questa Engineering Corporation Page 25 98202swprog-finalIJanuary 9, 2001 The Public Works Department's Street Division requires vacuuming of all street cut saw waste materials. SLO Parks and Recreation conducts an annual program to remove trash from homeless encampments, which are often located adjacent to creeks and waterways. In the past as much as 10 tons of trash has been removed per year. The Public Works Department's Park Maintenance Division conducts the following activities aimed at protecting storm water quality, (1) fertilizers are applied to turf areas only twice per year, and not during the rainy season; (2) all State guidelines with respect to pesticide use training, application, and reporting are strictly followed; (3) non-native species are selectively removed, preferably by hand removal where ever possible; and (4) grass clippings are left on-site to reduce fertilizer application requirements. Though the City Fire Department has no written policy regarding water quality protection, they are cognizant about keeping fire suppressant waters from entering the storm drainage system. 7B. A maintenance worker within the Streets Maintenance Division of the Public Works Department is allocated full-time Monday through Friday and part time on the weekends to sweep the streets with a sweeper truck. The downtown area is swept on a daily basis. In addition, there are 18 designated areas outside the immediate downtown area, and these areas are swept on a rotational basis. The Utilities Department has a vactor truck that is used nearly full-time by that Department for sewer maintenance. This vactor truck is available to the Public Works Department on an as needed emergency basis for storm drain and catch basin maintenance. 7C. All Parks maintenance personnel that apply pesticides undergo training and certification under the direction of the County Agricultural Commissioner. Some Public Works inspectors have received training from the Regional Water Quality Control Board on erosion and sediment control. Fleet maintenance staff receive training on spill prevention and clean-up. Action Plan Note: the recommendations in the Action Plan account for those activities currently conducted by the City that meet Program requirements. Questa Engineering Corporation Page 26 98202swprog final/January 9, 2001 Implementation Tasks 7A. Develop a Municipal Operations BMP Manual. We recommend that the City adopt or amend the California Storm Water Best Management Practices - Municipal Handbook. Also refer the MURP Appendix 3J and Appendix 3L. Develop guidelines and implement erosion control and pesticide/herbicide/fertilizer control measures (storage, use, and disposal of maintenance chemicals) on City projects, such as parks, public access trails, and golf courses 7B. Develop a Storm Drainage Maintenance Program. The program should: (1) prioritize areas for cleaning/maintenance of catch basins, (2) prioritize areas for installation of catch basin filters, (3) develop an annual schedule for cleaning/maintenance of catch basins and drainage channels, creeks and culverts, (4) review the City's current street sweeping and sidewalk cleaning schedules and evaluate their effectiveness, and (5) implement strategies to improve street sweeping and sidewalk cleaning activities (for instance coordinate street sweeping schedules with garbage collection schedules). Note: catch basin cleaning and filter installation should be prioritized based on land use, with highest priority designated to heavy commercial and industrial areas, and proximity to sensitive aquatic habitats. In addition, water quality sampling results and information from the illicit discharge detection program should be used to prioritize areas for storm drainage system maintenance; Purchase a second vactor truck. While the City already owns one vactor truck, it is used predominantly by the Utilities Department for sewer maintenance. A second truck should be available for storm drainage maintenance. Since it is unlikely that the City will use this second vehicle on a full-time basis, the City should explore performing storm drainage maintenance under contract in County unincorporated MS4 areas, such as the Pismo Beach area, and in Cambria. Annual Program Tasks 7A. Maintain secondary containment structures around hazardous materials in City corporation yards. Add structures to any storage areas that do not have them. Verify that all material storage and maintenance areas in City corporation yards are adequately covered from rainfall. An inventory should be conducted to prioritize those areas where this needs to be done.. Implement record keeping of municipal good housekeeping practices (see MURP Appendix 3M). Questa Engineering Corporation Page 27 98202swprog finaUJanuary 9, 2001 7B. Maintain and use street sweeper daily per guidelines and schedules developed in the Storm Drainage Maintenance Program. The current level of street sweeping appears to meet Program requirements, and no additional sweeping is recommended at this time. However, street sweeping schedules should be coordinated with garbage collection, particularly in the downtown area. Further, the efficiency of the street sweeper trucks should be evaluated, and improvements made, if necessary. Conduct storm drainage maintenance activities, including catch basin cleaning, drainage channel, creek and culvert maintenance, and catch basin filter installation and maintenance. 7C. Train maintenance staff regarding pesticide, herbicide, and fertilizer management (i.e. mixing, storage, use, clean-up, and disposal). Train maintenance staff regarding erosion control practices. Train maintenance staff regarding chemical / hazardous materials use, handling, and spill response. Note: Some or all of the Municipal Operations Pollution Prevention activities for the City of SLO could be coordinated with the County and or other MS4s. In particular, we recommend that the storm drainage maintenance activities, such as catch basin cleaning and possibly street sweeping, be coordinated with the County and other MS4s. Further, the maintenance staff training could be done jointly for City, County and other MS4 staff. Staffing We recommend the Engineering and Maintenance Divisions of the Public Works Department coordinate the development of the Storm Drainage Maintenance Program and Municipal Operations BMP Manual. We estimate these programs would require approximately 40 hours of time for the Streets and Parks Supervisors and the City Engineer, and approximately 20 hours for the Building and Fleet Maintenance Supervisors. The day-to-day staffing requirements includes all Maintenance Division staff, as they will be responsible for protecting water quality in their day-to-day activities. We estimate the additional pollution prevention/good housekeeping and maintenance activities noted here, including construction of secondary containment structures and cover over material storage areas, catch basin and drainage way cleaning, and catch basin filter installation and maintenance, will require, on average, six weeks for two maintenance personnel per year. We recommend that these activities be phased, to avoid excessive labor requirements within the first few years of Program implementation. Questa Engineering Corporation Page 28 98202swprog-finaUJanuary 9, 2001 The Education Coordinator and an Assisting Engineer should provide training to all Maintenance staff, including Streets; Fleet, Facilities, and Park workers. Schedule We recommend: • The Engineering and Maintenance Divisions develop the Storm Drainage Maintenance Program and Municipal Operations BMP Manual before March 2006; • The Education Coordinator begin training Maintenance staff during the fall 2004, prior to the rainy season; • The Public Works-Department purchase a vactor truck by 2007; • The Maintenance Division staff begin implementing water quality protection measures no later than 2007. SECTION 8.PROGRAM DEVELOPMENT AND ANNUAL REPORTING A Notice of Intent (NO 1) serves as the application for the, General Storm Water Permit under NPDES Phase II. The NOI must provide a description of the storm water management program, including a clear identification of the BMPs and "measurable goals" for each of the six minimum control measures. The NOI must also include the estimated months and years in which specific measures will be undertaken, including interim milestones, as well as identify the person or persons responsible for implementing and/or coordinating the Program. Sections 2 through 7 provided specific recommendations for the six minimum control measures of the NPDES Phase II Program. This section provides additional recommendations, not specific to the individual control measures, for Program development and reporting. Program Development Tasks The following tasks should be completed during Program development: 8A. Develop specific BMPs for the six minimum control measures. Many of the recommended actions presented in this report can act as BMPs. EPA was scheduled to provide a list of recommended BMPs on their Phase II web site "Tool Box" by October 2000. At this time the list has not been posted on the site. Once the "Tool Boz" has been released, BMPs for each of the six minimum control measures should be specified. Questa Engineering Corporation Page 29 98202swprog-finaUJanuary 9, 2001 Develop measurable goals for each of the BMPs identified for the six minimum control measures. EPA is scheduled to provide a list of recommended measurable goals on their Phase H web site "Tool Box" by October 2001. At this time, we recommend waiting for further guidance from EPA before developing specific measurable goals for the six minimum control measures. 8B. Continue to coordinate with SLO County and other MS4s to share resources. Consult with the RWQCB on Program BMPs and measurable goals. Staffing We recommend that the Public Works Department act as the lead for the Storm Water Program. In this regard, we recommend that the City Engineer act as the Program Manager, and that he be supported within the Public Works Department by Engineering staff and Streets and Building Maintenance personnel. We estimate that Program development will require approximately 1 month of time for the City Engineer and an Assistant Engineer. This estimate is based in part on consultations with Phase I municipalities. After EPA provides guidance on developing measurable goals for the six minimum control measures (in October 2001), the City may select to hire a consultant to identify specific BMPs and measurable goals for the six minimum control measures, and prepare the NOI. Schedule Once EPA provides all the necessary information for Program development (i.e. guidance on specific BMPs and measurable goals), development of the work program and preparation of the NOI should take approximately 6 months to complete. If the City decides to select a consultant to prepare the NOI, we recommend the City hire the consultant no later than September 2002, in order to meet the March 10, 2003 deadline. Program Reporting Once the NOI is submitted and a NPDES Phase H permit is issued, the term of the NPDES storm water Phase H permit is typically five years. Annual reporting is required for the first permit term. During subsequent permit terms, reports must be submitted in the second and fourth years of the term. The Phase H reporting requirements include: • Discussion of the status of permit condition compliance; • Assessment of the appropriateness of selected BMPs and progress towards achieving measurable goals; Questa Engineering Corporation Page 30 98202swprog-fnaUJanuary 9, 2001 • Presentation of results of information collected or monitoring data; • Summary of activities planned for the next reporting cycle; • Changes to BMPs or measurable goals; and • Notification of relying on other government entities to satisfy permit obligations, if applicable. In order to meet these reporting requirements the following tasks need to be completed annually: 8C. Evaluate effectiveness of the Program. The measurable goals developed for the Program should provide some guidelines/guidance for evaluating Program effectiveness. It is important to note here, that the Phase II Program specifically does not require water quality monitoring for evaluating Program effectiveness, but the Regional Board has the discretion to require such monitoring. Revise/update BMPs and measurable goals, as necessary. Annual record keeping and reporting (see Model Urban Runoff Program [MURP] Appendix 3H). Staffing We estimate that annual management and reporting for the Storm Water Program will require approximately 80 hours of the City Engineers time and approximately 100 hours of an Assistant Engineers time. These estimates are based on consultation with Phase I municipalities. SECTION 9. RECOMMENDED PROGRAM STAFFING This section summarizes and specifies our Program staffing recommendations for additional new work to meet Program requirements, as presented in the preceding sections. Program Development, Coordination, and Management We advise that the Public Works Department Engineering Division manage the Storm Water Program. Public Works Departments typically act as the lead department within Phase I MS4s. In this regard, we suggest the City Engineer act as the Program Manager, supported by staff within the Public Works, Community Development, Utilities, and Parks and Recreation Departments, as outlined in this section. Questa Engineering Corporation Page 31 98202swprog finaUJanuary 9, 2001 Over the next two years, prior to submittal of the NOI in March 2003, with staff and City-hired consultant support, the City Engineer should: (1) work with the County and other MS4s to promote Program coordination, (2) facilitate on-going consultation with the Central Coast RWQCB, and (3) prepare and submit the NOI prior to March 10, 2003. The City Engineer is making good progress to meet these objectives. We recommend an Engineering Assistant act as the primary support staff to the City Engineer in developing the Program. Based on the work completed by the City to date that applies to the Storm Water Program, as well as an understanding of the level of effort required by Phase I municipalities to implement similar Programs, we estimate the Program development phase will require the equivalent of 1 month of full-time labor for the City Engineer and an Engineering Assistant. Following submittal of the NOI, we recommend the Engineering Division continue to manage the Program, ensure the City meet Program requirements as set forth in the NOI, and coordinate annual reporting. We estimate that on-going Program management will require the equivalent of 2 weeks of full-time labor for the City Engineer per year, and approximately 100 hours per year for an Engineering Assistant. In order to meet the annual Program reporting requirements, each of the departments and divisions responsible for components of the Program will assist in record keeping and reporting. The staffing allocation and labor estimates for each of these Program elements is described below. Program Development, Coordination,and Management Staffing Summary Phase Task Position Labor Allocation Program Development 8B City Engineer 1 month 8B Engineering Assistant 1 month On-Going 8C City Engineer 2 weeks per year 8C Engineering Assistant 100 hours per year Public Education and Outreach Program The Public Education and Outreach Program should be developed,implemented and managed by a Storm Water Program Education Coordinator in either the Utilities or Public Works Department. We recommend the City develop this new position and hire a staff,person no later than June 2002. We estimate the Education/Outreach and Public Participation responsibilities of the Education Coordinator can be fulfilled by a half-time (50% or 1,040 hours per year) position. In addition to preparing educational materials, the Education Coordinator would conduct the staff training workshops relevant to the Construction Site Runoff Control, Post-Construction Runoff Control, and Good Housekeeping Programs, and present industry-specific and school group workshops. We suggest a person to fill the Education Coordinator position should have public relations and teaching experience, as well as a solid science and engineering background. Questa Engineering Corporation Page 32 98202swprog-finalIJanuary 9, 2001 We think that if the Public Education and Outreach Program staff person is shared with the County, the position would likely increase slightly to 60% (approximately 1,250 hours), as most educational materials, industry and public seminars, and staff training programs would be held at the same time and use the same materials. In addition, we recommend an Engineering Assistant assist the Education Coordinator in developing and implementing the Public Education Program. We estimate that during Program development, an Engineering Assistant should be available 25% (approximately ten hours per week) time for a six month period to assist the Education Coordinator in developing some of the more technical components of the education materials and workshops/presentations. Following submittal of the NOI, we suggest the Engineering.Assistant be available 5% (approximately 10 hours per month) time on an on-going basis to assist the Education Coordinator in presenting workshops and training sessions. Finally, during Program development we recommend the City's Natural Resources Manager assist in updating the Creek Care Guide. We estimate this task will require 20 hours. Following submittal of the NOI, we recommend the Natural Resources Manager be allocated 10% time (approximately 210 hours a year) to assist homeowners in creek care issues. If the County contracts with the City to provide this assistance in unincorporated areas of the watershed, then an additional 5% (approximately 100 hours) time requirement is estimated. Public Education and Outreach Staffing Summary Phase Task Position Labor Allocation Prog. Devel. 2A 1, 2,4 &5 and 2131 &2 Education Coordinator 50% (20 hours per week) for 6 months 2A1, 2, 4& 5 and 2B1 &2 Engineering.Assistant 25% (10 hours per week) for 6 months 2A3 Nat. Res. Mgr. 20 hours On-Going 2B1, 2, & 3 and 2C2 & 3 Education Coordinator 50% 2B1, 2, & 3 and 2C2 & 3 Engineering Assistant 5% (10 hours per month) 2C1 Nat. Res. Mgr. 10% (20 hours per month) Public Participation Program The Public Participation Program responsibilities should be staffed by the Education Coordinator. The half-time staffing allocation is to meet the Public Participation Program requirements as well as the Education and Outreach Program requirements. Therefore, the staffing allocation for the Public Participation Program is not in addition to that for the Public Education and Outreach activities. Questa Engineering Corporation Page 33 98202swprog-fnaUJanuary 9. 2001 Public Participation Program Summary Phase Task Position Labor Allocation Prog. Devel. A and 3B 1 Education Coordinator 50% for 6 months On-Going 3B2, 3, &4 and 3C1, 2, & 3 Education Coordinator 50% Illicit Discharge Detection and Elimination Program We suggest the Illicit Discharge Detection and Elimination Program be managed by the Public Works Department, as this Department manages the City's storm system and creeks. However, the Public Works Department should be assisted by the Utilities and Fire Departments under the auspices of those activities currently conducted by these departments which are relevant to illicit discharge detection and elimination. As described in the Illicit Discharge Detection and Elimination Program section, we suggest that a comprehensive inspection/survey effort be completed within the first year following submittal of the NOI, and that a less comprehensive "spot checking" of priority areas be conducted annually thereafter. We estimate this initial inspection/survey effort to require two full-time Engineering Technicians for 1 month and an Engineering Assistant 2 weeks to oversee this work. We estimate the on-going yearly effort would require two Engineering Technicians for 2 weeks and 1 week for an Engineering Assistant. Illicit Discharge Program Staffing Summary Phase Tasks Position Labor Allocation Initial Inspections 4C and 4D Engineering Assistant 2 weeks 4C 2 Engineering Technicians 1 month each Annual Spot-Checks 4C and 4D Engineering Assistant 1 week per year 4C 2 Engineering Technicians 2 weeks each per year Construction Site Runoff Control Program The Construction Site Runoff Control Program should be developed and implemented jointly by the Community Development and Public Works Departments. We estimate the development of procedures to ensure plan check and erosion control inspections are completed will require 1 week for a Planning Manager in the Community Development Department and/or Plans Examiner with the Building Division, and 2 weeks for an Assistant Planner and Public Works Inspector. We estimate the plan checks for erosion control of site greater than 1 acre will require approximately 500 total additional staff hours per year for Community Development staff, and Questa Engineering Corporation Page 34 98202swprog finaUJanuary 9, 2001 approximately 200 total additional staff hours per year for Public Works staff. This estimate is based on consultation with Community Development Department and Public Works staff on the number of plan checks that currently are processed. Our estimate is less for Public Works staff as there are fewer municipal projects that fall within the 1-acre category. We estimate the erosion control inspections for site greater than 1 acre will require approximately 200 total staff hours for Community Development and Public Works staff per year.. The training workshops for the Construction Site Runoff Control Program should be conducted by the Education Coordinator, who should be assisted by an Engineering Assistant, as necessary. Construction Site Runoff Control Program Staffing Summary Phase Task Position Labor Allocation Program Development 5B Planning Manager 1 week 5B Assistant Planner 2 weeks 5B Public Works Inspector 2 weeks On-Going 5B Plan Check- Comm. Devel. 500 hours per-year Plan Check - Public Works 200 hours per year 5C Inspections -Bldg. Division 200 hours per year Post-Construction Runoff Control Program The Post-Construction Runoff Control Program should also be developed and implemented jointly by the Community Development and Public Works Departments. The staffing and labor allocation recommendations for the program development phase of the Construction Site Runoff Control Program incorporates staffing and labor allocation for the Post-Construction Runoff Control Program. We estimate the plan checks for post-construction erosion and runoff control of site greater than 1 acre will require approximately 200 total staff hours per year for Community Development and Public Works staff. This estimate is based in part on consultation with Community Development Department staff on the number of plan checks that currently are processed, and assumes approximately 4 hours should be devoted to post-construction controls per project. We estimate the post-construction runoff controls component of site inspections for project greater than 1 acre would require approximately 100 additional staff hours per year, requiring approximately 2 hours per inspection for each new project per year. Based on these assumptions we estimate approximately 50 projects will require post-construction controls review per year. The training workshops for the Post-Construction Runoff Control Program should be conducted by the Education Coordinator, with assistance from an Engineering Assistant, as necessary. Questa Engineering Corporation Page 35 98202swprogfinaUJanuary 9. 2001 Post-Construction Runoff Control Program Staffing Summary Phase Task Position Labor Allocation On-Going 6B Plan Check 200 hours per year 6B Inspector 100 hours per year Pollution Prevention/Good Housekeeping Program The Pollution Prevention / Good Housekeeping Program requirements are principally the responsibility of the Public Works Department. We suggest the City Engineer work collaboratively with the Streets, Parks, Building Maintenance, and Fleet Maintenance Supervisors to develop the Stone Drainage Maintenance Program and Municipal Operations BMP Manual. We estimate these tasks will require approximately 40 hours for the Streets and Parks Supervisors and the City Engineer, and approximately 20 hours for the Building and Fleet Maintenance Supervisors. The on-going pollution prevention / good housekeeping activities should be conducted by all municipal workers. A prominent component of this Program is street sweeping. The City already has an aggressive street sweeping program, and no additional street sweeping is recommended at this time. Therefore, no new staffing allocation for this task is designated. We estimate the additional pollution prevention / good housekeeping activities recommended in this report will require approximately the equivalent of 1 month for two maintenance workers each year. The training workshops for the Pollution Prevention / Good Housekeeping Program should be conducted by the Education Coordinator, with assistance from an Engineering Assistant, as necessary. Pollution Prevention/Good Housekeeping Program Staffing Summary Phase Task Position Labor Allocation Prog. Devel. 7A and 7B City Engineer 40 hours 7A and 7B Streets Supervisor 40 hours 7A and 7B Parks Supervisor 40 hours 7A and 7B Building Maintenance 20 hours 7A and 7B Fleet Maintenance 20 hours On-Going 7A and 7B 2 Maintenance Workers 6 weeks each per year Questa Engineering Corporation Page 36 98202swprog finaUJanuary 9, 2001 Staffing Allocation Summary Provided here is a summary of the approximate total hourly labor requirements per year for the various City staff positions: City Engineer(Public Works): 2 weeks Assistant Engineer(Public Works): 244 hours Eng. Tech. (Public Works): 2 weeks for two staff Education Coordinator: 50% (1040 hours) Natural Resources Mgr.: 10% (20 hours per month) Plan Check(Comm. Devel. & Public Works Dept.) 900 hours Inspector(Comm. Devel. & Public Works): 300 hours Maintenance (Public Works - Streets): 6 weeks for two staff Recommended Consultant Tasks We recommend the following tasks be completed by a City-hired consultant: 4B, 5A, and 6A. Storm Water Ordinance. Provided in this report is the identification of those existing City ordinances that apply to storm water quality management and discharge control. We recommend the City hire a consultant to develop a comprehensive Storm Water Quality Management and Discharge Control Ordinance, and formally amend the existing ordinances to be consistent with the new ordinance. 8A. Prepare NOI. This Storm Water Management Program report provides a significant amount of the information needed to prepare the NOI, which is the application for the General Storm Water Permit under NPDES Phase H. However, EPA is obliged to provide guidance on recommended Best Management Practices (BMPs) and "measurable goals" for each of the six minimum control measures, by January and October 2001, respectively. Once these guidelines are provided, the City will be more equipped to develop a NOI, which must state the specific BMPs and "measurable goals" selected for each of the six minimum control measures, that will be comprehensive, effective, and acceptable to the RWQCB. Therefore, we recommend the City hire a consultant no later than September 2002 to refine this report, incorporating specific BMPs and measurable goals, and prepare the NOI for the City. SECTION 10. PROGRAM COST ESTIMATE Presented in this section is the cost estimate for the City of SLO to develop and implement the storm water program. The cost estimate is summarized in Table 1 and the costs for each of the components of the Program are itemized in Tables 2 through 9. Each cost table identifies both the costs of existing work conducted by the City that meets Program requirements, as well as new/additional costs. The cost tables include a "Remarks" section which notes the rationale for labor and materials cost estimates. The estimate includes estimated lump sum costs associated with recommended consultant tasks. The total cost estimate summary in Table 1 identifies both the total Program cost for existing work combined with new work, as well as the total Program Questa Engineering Corporation Page 37 98202swprog-finaUJanuary 9, 2001 cost for new work alone. The cost estimate for new work is divided into the two project phases. The Program development phase reflects the costs to develop the Storm Water Program and submit the NOI. The on-going Program activities phase reflects the annual costs for tasks to be conducted yearly. The hourly billing rates used for this estimate are based on current labor rate schedules adopted as part of the 1999-2001 Financial Plan, and incorporate indirect costs (office overhead). As a factor of safety, we have applied a 20 percent contingency to our cost estimate. Based on our estimate, the cost to develop the Storm Water Program is approximately $437,300. The on- going (yearly) Program costs are estimated to be approximately $302,200. The annual costs associated with existing activities that meet Program requirements are approximately $559,100. When the Program development costs and four years of on-going (yearly) costs (including existing costs) are distributed over a five year period, the Program costs approximately $12.90/year per City of SLO resident (assuming a population of 43,000). Assuming an average of 2.5 residents per household, this is about $32.27 per residential lot. We believe coordination and collaboration with the County and other MS4s could reduce City Program costs considerably. A primary opportunity for collaboration is in the development and implementation of the Public Education/Outreach and Public Participation Programs. We suggest the City hire an Education Coordinator to develop the educational materials, outreach program, and workshop/training sessions. The City's Education Coordinator could them implement these programs for the County and other MS4s, as well as the City. For instance, joint training for maintenance staff or planners could be conducted. The City could then pass on some of the cost of developing the program to the County and MS4s, or charge a lump sum fee to provide education materials and conduct training and workshops. It is difficult, and beyond our current scope, to estimate exactly what the cost savings (or possibly revenue generating) benefits this education coordination could provide. In addition, the City's Natural Resource Manager, who will be available to assist City homeowners regarding creek care issues, could also provide consultation on projects located in the County. hi this regard, the Natural Resource Manager could provide these services under contract with the County. A second opportunity for collaboration is in the Pollution Prevention / Good Housekeeping Program. An agreement could be developed between the City and County and other MS4s to have joint use of a vactor truck. We recommend the City purchase a new vactor truck for primary use by the Storm Water Program. The City's vactor truck could then be leased to the County and other MS4s under a joint operating agreement. Development of the specifics of this agreement and identification of potential cost savings to the City is beyond our current scope of work. Questa Engineering Corporation Page 38 98202swprog-finaUJanuary 9, 2001 Questa Engineering Corporation Page 39 98202swprog-finaUJanuary 9, 2001 Table 1 - Total Estimated Program Costs 1a - Existing Activities that Meet Program Requirements Program Component Total Costs Public Education/Outreach $81,646 Public Participation $0 Illicit Discharge Detection/Elim. $290,760 Construction Runoff Control $54,742 Post-Construction Runoff Control $0 Municipal Operations $131,955 Total Existing Costs: $559,102 1 b - New Work to Meet Program Requirements Program Component On-Going Development Program Activities Activities Total Costs Program development/reporting $35,756 $14,983 $50,739 Storm Water Ordinance $5,000 $0 $5,000 Public Education/Outreach $117,639 $63,434 $181,073 Public Participation $0 $40,000 $40,000 Illicit Discharge Detection/Elim. $26,381 $15,190 $41,571 Construction Runoff Control $15,271 $64,249 $79,520 Post-Construction Runoff Control $0 $20,720 $20,720 Municipal Operations $164,351 $33,270 $197,622 Total Program Development Cost: $364,398 Total Yearly On-Going Costs: $251,847 Total Yearly On-Going Costs Including Existing Costs: $810,949 Costs with 20% Contingency Total Program Development Cost: $437,278 Total Yearly On-Going Costs: $302,216 Total Yearly On-Going Costs Including Existing Costs: $861,319 Questa Engineering Corporation 98202swprog final/January 9, 2001 Table 2 - Estimated Cost for Program Elements and Reporting Activity Sr. Eng. Assist. Eng. Total Cost Remarks $110.84/hr $61.1&hr Program Development Activities This estimated lump sum 8A Develop BMPs and measurable goals for is a proposed consultant six minimum control measures $6,000 task. 8B Coordinate with County& MS4s Consult Estimate: 1 month for with RWQCB Prepare Program application/ City Eng. and Assist. Submit NOI 173 173 $29,756 Eng. Program Implementation Cost: $35,756 Yearly Program Activities 8C Program Management, and Annual reporting 80 100 $14,983 Yearly Program Cost. $14,983 Questa Engineering Corporation 98202swprog ftnaUJanuary 9, 2001 Table 3 - Estimated Cost for Preparation/Adoption of Storm Water Ordinance Activity Total Cost Remarks Development Activities 4B, 5A, 6A Develop Draft Storm Water Ordinance Present to governing body This estimated lump sum is a proposed Finalize and adopt Ordinance $5,000 consultant task. Program Implementation Cost: $5,000 Questa Engineering Corporation 98202swprog-finaUJanuary 9, 2001 Table 4 - Estimated Cost for Public Education and Outreach 4a - Existing Activities that Meet Program Requirements Activity Ntr. Res. Utilities Mgr. Dpt staff Total Cost Remarks $86.89 $70/hre Utilities Dept. water audits, 25%time for 1.25 water quality education 650 $45,500 staff equivalents Nat. Res. Mgr. assistance 20%time for 1.00 r.e.creek care issues 416 $36,146 staff equivalent Total Existing Costs: $819646 Questa Engineering Corporation 98202swprog finallJanuary 9, 2001 Table 4 - Estimated Cost for Public Education and Outreach (Continued) 4b - New Work to Meet Program Requirements Activity Ntr. Material Assist. Res. Ed. Cost Eng. Mgr. Coord. Total Cost Remarks $61.161h r $86.89 $75/hrd Program Development Activities 2A1 Compile,develop, and publish informational materials. $35,OOOa $35,000 2A2 Develop bus/billboard and radio ad campaign $20,OOOb $20,000 2A3 Augment Creek Care Guide $1,OOOc 20 $2,738 2A4 Develop a "Storm Water Program"website $500c $500 2A5 Develop non-point source pollution workshops, Estimate:Assist. Eng. and $2,OOOc 260 520 $56,902 25%for six months; 2A5 Develop presentation/program for Ed.Coord. 50%for six school groups $500c $500 months. 261 Develop a "Storm Water Program" presentation $1,OOOc $1,000 2132 Develop industry- specific presentations $1,OOOc $1,000 Program Implementation Cost. $1179639 Questa Engineering Corporation 98202swprog-fnaUJanuary 9, 2001 Table 4 - Estimated Cost for Public Education and Outreach (Continued) 4b - New Work to Meet Program Requirements Yearly Program Activities Ntr. Material Assist. Res. Ed. Cost Eng. Mgr. Coord. Total Cost Remarks 2C1 Provide assistance to Estimate: 10%of Creek homeowners on creek care 208 $18,073 Coordinator's time 2131, 2, &3 Deliver Estimate: 25%of Ed. presentations and workshops 104 520 $45,361 Coordinator's time; 5%Assist. Eng. time Yearly Program Cost. $639434 Notes: a)Assumes $0.40/ea.to customize and print brochures. Assumes printing 25,000 copies of three different brochures. b) Assumes $10,000/ea. to develop and run a bus/billboard ad and radio ad. c) Estimate of publication costs d) Estimated labor rate for Education Coordinator. e) Estimated labor rate for Utilities Dept. staff conducting water audits and education activities. Questa Engineering Corporation 98202swprog finaUJanuary 9, 2001 Table 5 - Estimated Cost for Public Participation Ed. Co- Activity Material Cost ordinator Total Cost Remarks Program Development Activities 3A Develop a citizen advisory committee 3131 Organize volunteer monitorir group Program Implementation Cost.- Yearly ost:Yearly Program Activities 3131 Coordinate volunteer monitoring program 3132 Coordinate storm drain $100/stencil; 10 new stenciling program $1,000 $1,000 stencils 3133 Coordinate creek clean-up days 3C1, 2, &3 Deliver presentations $520 $39,000 Estimate: of Ed. and workshops Coordinator's time Yearly Program Cost: $4000 Questa Engineering Corporation 98202swprog ftnaWanuary 9, 2001 Table 6 - Estimated Cost for Illicit Discharge Detection and Elimination Program 6a - Existing Activities that Meet Program Requirements Activity Total Cost Remarks 4A Finalize City's storm system map $50,000 Lump sum (estimate). Fire Dept. spill response activities $53,920 Fire Dept. CUPA activities $186,840 Total Existing Costs: $290,760 6b - New Work to Meet Program Requirements Assist. Eng. Activity Eng. Tech. Total Cost Remarks Initial Program Activities $61.16/hr $48.40/hr 4C Develop Non-Stormwater Discharge form 4C Prioritize areas to conduct inspections pH&conductivity meters 4C Purchase field test ($200/ea); sample pump equipment $1,000 $1,000($200);field test kit($100/ea) Assumes 50 sites requiring 4C Laboratory Costs $100/site $5,000 sampling Estimate: Assist. Eng.for two 4C Conduct illicit weeks;two Eng Techs. for discharge inspections 80 320 $20,381 one month. 4D Record Keeping 4D Correspondence with illicit dischargers Initial Program Cost: $26,381 Yearly Program Activities Assumes 50 sites requiring 4C Laboratory Costs $100/site $5,000 sampling Estimate: Assist. Eng.for 1 4C Conduct illicit week; 2 Eng Techs.for 2 discharge inspections 40 160 $10,190 weeks. 4D Record Keeping 4D Correspondence with illicit dischargers Yearly Program Cost. $15,190 Note: Storm water ordinance addressing illicit discharge is itemized separately. Questa Engineering Corporation 98202swprog-finaUJanuary 9, 2001 Table 7 - Estimated Cost for Construction Site Runoff Control Program 7a - Existing Activities that Meet Program Requirements Staff Inspect Ed. Total Activity Sr. Plan. Plan. or Coord. Cost Remarks $100.681hr$76.031hr $55.141hr $75Ar Bldg. Div. plan checks Refer to labor 300 $22,809 justification in report. Public Works tract development plan Refer to labor checks and inspections. 210 $15,966 justification in report. Public Works plan checks Refer to labor 210 $15,966justification in report. Total Existing Costs: $54,742 7b - New Work to Meet Program Requirements Material Activity Cost Staff Inspect Ed. Total Sr. Plan. Plan. or Coord. Cost Remarks $100.68/hr$76.031hr $55.141hr $751hr Program Development Activities Labor cost to develop 2A1 Develop guidance materials is budgeted materials on SWPPPs $250 $250 under Ed/Outreach. 5B Train planners and inspectors Estimate: Sr. Planner 513 Initiate runoff control for 1 week;two Staff plan check procedures 40 80 80 $14,521 Planners for 2 weeks. 5D Develop fact sheets and info brochures $500 $500 Program Implementation Cost: $159271 Yearly Program Activities Refer to labor 5B Plan check 700 $53,221 justification in report. Refer to labor 5C Conduct inspections 200 $11,028 justification in report. 5D and 3C2 Present workshops to contractors Yearly Program Cost. $649249 Note: Storm water ordinance addressing construction runoff control itemized separately Table 8 - Estimated Cost for Post-Construction Questa Engineering Corporation 98202swprog-finaUJanuary 9, 2001 Runoff Control Program Activity Material staff Ed. COSt Sr.Plan. Plan. Inspector Coord. Total Cost Remarks $100.Whr $76.Mr $55.141hr $75/hr Program Development Activities 6B Initiate mechanism to Procedure ensure controls are maintained implementation task for Sr.Staff Planner is budgeted under Construction Site Runoff Control Program. 6B Train planners and The Ed.Coord.time to inspectors conduct staff training and develop education materials is budgeted under Ed/Outreach Program. Program Implementation Cost: Yearly Program Activities 6B Conduct plan checks and Refer to labor justification inspections 200 100 $20,720 in report. 6C and 3C2 Present workshops The Ed.Coord..time to to contractors conduct workshops Yearly Program Cost: $209720 Note: Storm water ordinance addressing post-construction runoff control itemized separately Questa Engineering Corporation 98202swprog-frnaUJanuary 9, 2001 § . / 0 = ■ k } } _ ? 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E . . : P O R T NPDES PHASE II S`O"'RMWATER FINANCIAL FEASIBILITY STUDY � for ' CITY OF SAN LUIS OBISPO, CA PUBLIC WORKS DEPARTMENT D ewcK a vEnrcH City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study EXECUTIVE SUMMARY The City of San Luis Obispo (City) is required to meet the United States Environmental Protection Agency (EPA) National Pollutant Discharge Elimination System (NPDES) Stormwater Phase 11 stormwater regulations covering agencies with populations greater than 10,000. These regulations require the City to conduct the following programs: • Public Education and Outreach • Public Involvement/Participation • Illicit Discharge Detection and Elimination • Construction Site Runoff Control • Post-Construction Runoff Control, and • Pollution Prevention/Good Housekeeping for Municipal Operations programs The City, with assistance of Questa Engineering, has developed a formal stormwater program to meet these requirements. Details of this program are provided in the report titled Storm Water Management Program- NPDES Program Reguirements, Recommended Activities and.Ayproach, Program Staffiinz and Estimated Costs (SWMP), dated January 9, 2001, by Questa Engineering. The City currently provides stormwater related services including street sweeping, minimal storm drain maintenance, annual inlet cleaning in the City Center, cross connections monitoring, and construction site sedimentation monitoring. These activities are currently funded from General Fund and Water Utility Fund revenues and totaled approximately $322,000 in FY 1999-2000. The Water Utility administers a water conservation program that would provide benefits to the stormwater program. The SWMP report has integrated these activities into the formal stormwater program needed to meet NPDES Phase II requirements. The estimated costs involved in establishing and implementing a formal stormwater program are developed in the SWMP. These costs are in excess of the amount currently funded by the General Fund and Water Utility Fund revenues. The issues the City needs to consider with reference to the financial and organizational elements of the stormwater program are: 1. What is the best financing mechanism? 2. How should costs be recovered? Should the City's General Fund and Water Utility Funds continue to fund the program? BLACK&VEATCH ES-1 April 12, 2001 - DRAFT n City of San Luis Obipso—NPDES Phase II Stormwater Financing,Feasibility Study 3. If the City decides to establishuser fees as a funding source, (i.e., establish a stormwater utility) what is the best (fair and equitable) method to recover costs from the users/properties in the City? How should customers be billed? 4. How should the stormwater utility be structured? 5. How proactive should the City be in stormwater program development and implementation? These issues are discussed in detail in this report and summarized in this executive summary. Background The City is required.to regulate stormwater discharges under EPA's Phase 11 program mandates. The objective of this program is to implement specific Best Management Practices (BMP) to prevent or reduce the amount of pollutant discharged to receiving waters such as the San Luis Obispo Creek that flows through the City. EPA is obligated to issue guidelines on development of measurable goals by October 2001. The measurable goals developed by the City should reflect. the specific needs and characteristics of the City. These goals do not necessarily have to be quantitative but should be attainable and controllable. After EPA provides the guidelines for these goals in October 2001, the City will be in a better position to define specific program goals. By December 8, 2002, general permits will be issued for Phase H and the City will be required to submit a Notice of Intent to initiate permit coverage by March 10, 2003. Program Costs and Funding There are two types of stormwater management program costs that typically need to be tracked-capital and operating costs. The SWMP report currently identifies the purchase of a storm drain cleaning truck for$150,000 in FY 2005-06 as the only major capital cost. The balance of the program costs is mostly on operating Fiscal Year Cost costs of setting up and implementing the.program. Total 2000-01 $347,000 estimated program costs for implementing Phase lI BMP 2001-02 $415,000 requirements are summarized and shown in the adjacent table. 2003-04 $5581 2002-03 $ 81,000,000 These costs are baseY d on the loaded hourly rates for staff to 2004-05 $538,000 perform the activities required for the proposed stormwater 2005-06 $587,000 program. Program costs in FY 2000-01 increased $25,000 from the previous year mainly due to storm drain mapping efforts that began this year. It should be noted that when measurable goals are defined later this year, the costs of the program may have to be revised. In any case, as shown in BLACK&VEATCH ES-2 April 12, 2001 -DRAFT City of San Luis Obipso—IyPDES Phase II_Stormwater Financing Feasibility Study the table, the proposed costs of the program are expected to increase almost 50 percent from the current levels over the next five years. The City's General Fund is forecast to have limited resources to fund these additional stormwater program costs because of the many other outstanding demands on it such as: • Railroad Recreational Trial • Downtown Transportation Center • Open Space Preservation • Athletic Fields • Community/Senior Center • Civic Building These projects cannot be funded through any user fee revenues, leaving General Funds as the only likely funding resource. Thus, any additional funding needed for the stormwater program above the current levels would probably not have priority from the General Fund. We recommend the establishment of a stormwater enterprise fund so that the proposed Phase II storrnwater program has the flexibility to be financed partially or fully by user fee revenues. An independently funded stormwater program can free up funding for other "General Fund" type projects including the projects shown above which are entirely dependent upon General Funds. A parallel may be drawn with the Clean Water Program for wastewater treatment that was initiated in the 1950s. A wastewater enterprise fund is now taken for granted. The stormwater program may grow in similar fashion. Establishing a stormwater enterprise would represent a proactive step on the part of the City to position itself strategically to respond more efficiently to current and future stormwater issues and needs. A 1998-99 Stormwater Utility Survey conducted by Black & Veatch showed that 37 percent of the 112 respondents have formed separate stormwater utilities to address stormwater management needs and meet state and federal regulatory requirements. Of the 112 stormwater utilities surveyed, 82 percent of the respondents indicated that at least 90 percent of their revenue is derived solely from stormwater fees while two percent of the respondents relied solely on other (non-ad valorem assessments) for at least 90 percent of their revenue. The remaining 16 percent of the respondents depend on multiple revenue sources to provide a major share of the total revenue. The survey results can be found in Appendix B. Should the City's General Fund and Water Utility Fund continue to fund stormwater expenses in whole or in part and/or should the City establish a BLACK&VEATCH ES-3 April 12, 2001 -DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study stormwater enterprise fund supported by user revenues to supplement or replace those funding sources? It is recommended that the City establish a stormwater enterprise fund and implement user fees to support stormwater program efforts. Stormwater program expenses may initially be supported by the City's General Fund and Water Utility Fund but user revenues should eventually fund the entire program. A separate stormwater enterprise fund will provide a more stable revenue source and dependence on unreliable General Fund revenues to fund stormwater program costs will no longer be necessary. If the City chooses to establish a stormwater enterprise fund, the City must decide how the stormwater program will be funded. To assist the City, we have discussed and evaluated different funding mechanisms and various user fee methods. Impacts on properties within the City were estimated so that the decision makers can make informed judgements on whether to continue to support the stormwater program from General Fund and Water Utility Fund revenues or to establish an enterprise fund supported by user revenues, or a combination of both. These funding mechanisms are discussed in the following section. Funding Mechanisms Keeping in mind that the City's available General Fund resources are forecast to be limited, alternative funding mechanisms for recovering stormwater program capital and operating costs may provide some added financial security to the future stormwater program. Different mechanisms are available for funding capital-costs and operating costs for the stormwater program. These are described briefly below and in more detail in the body of the report. Capital Costs Recovery Under the current NPDES Phase II program, anticipated capital costs in the near term are not significant. However, the City does have several storm drain refurbishment projects totaling a little over three quarters of a million dollars that need to be implemented over the next four years. Also, as the stormwater management program develops, capital costs to repair, refurbish and replace existing storm sewers and make improvements to the existing system including filtration of stormwater may be needed. These costs may be significant and may be funded through long-term debt. General Fund revenues can be used to fund capital_costs if monies are available. New development could be required to fund their share of capital costs for storm drain sewers or detention basins through in-lieu of construction charges or impact fees. Since the City is close to .build out, limited revenues could be expected from new development. Although such fees offer a means of recovering capital costs associated with growth, they are not a practical means of financing the costs of improvements required to serve already developed areas. BLACK&VEATCH ES-4 April 12, 2001 -DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study Operating Costs Ongoing operating costs may be funded either from General Fund revenues and/or the establishment of stormwater utility user fees and other charges (e.g., plan review, inspection, monitoring/testing, etc.). Typically, user fees provide a more stable revenue source than General Fund revenues. Also, they offer a more fair and equitable means of recovering stormwater management costs, whose proceeds are dedicated exclusively to this purpose. However, a commitment of resources is required to ensure the establishment of a fair and equitable system of user fees. User Fee Methods User fees must be related to the service requirements applicable to each customer or class of customers. For stormwater programs, these services can be measured in terms of stormwater quantity, quality, and customer costs. Quantity costs are those related to the volume of stormwater generated. Quality costs are those costs that relate to the level of pollutants in runoff. Customer costs are related to costs of billing and collecting user fees. There are no specific costs at this time that are tied to the quality of the runoff and since the program is in its infancy, costs for collection and billing are not identified or assigned. To simplify the allocation of stormwater program costs, costs are allocated only by quantity of runoff. There are two primary methods for levying user fees to recover ongoing operating costs. These are: • Total impervious area. Because of its relationship to stormwater runoff and quantity, total impervious area is frequently,used as a basis . for establishing stormwater user charges. This implicitly assumes that there is very little runoff from pervious areas or that the property is not responsible for runoff from pervious areas since it would have occurred regardless of the property's development. The City has available data on building footprint area that contributes to total impervious area and could be used to determine runoff. Building footprint data alone usually does not account for a property's total impervious area and should be supplemented with additional data to show other impervious areas such as driveways, parking lots and paved areas to increase equitability. Since total impervious area data.is very specific to each property it would establish a reasonable relationship or "rational nexus" between the basis between the user charge and the costs incurred. This is required if user fees are to pass the Proposition 218 test (see section below). Class average area can be used to further simplify a total impervious area based user fee. An average area can be defined for single family residential customers for example, and these customers can be charged uniformly. Non-residential customers with varying impervious areas would be charged according to the actual impervious BLACK&VEATCH ES-5 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study area of each parcel. This method when combined with total impervious area is recommended to address the City's needs and minimize data collection efforts. • Gross property area. This is an alternative parameter for estimating stormwater runoff flows, when used in conjunction with runoff or intensity of development factors appropriate to the type of development. Intensity of development factors are indicators of the relative runoff potential from various classes of properties and are determined to represent gross property area that is impervious. Runoff coefficients may recognize additional parameters such as topography, soil characteristics, vegetative cover, etc. Gross property area data is typically available from the tax assessor's database and the City currently has this information. This is a simple system of charging users and is typically used when total impervious data is not available or too costly to obtain. Detailed descriptions of these two primary methods including other methods are presented in the body of this report. This brings us to the issue, "What is the best financing method for user fees assuming. the City chooses to establish a stormwater utility and implement user fees?" We recommend using the total impervious area method since this method provides greater equity than the gross area method. The City currently has building or footprint data that can be used to initially develop the database for charges under this system. This data can be improved to include all impervious areas such as paved areas, driveways and parking areas. This requires additional time and effort to collect the data but will be worthwhile in the long run, as it provides greater equity and flexibility to design a system that meets regulatory requirements and can withstand Proposition 218 challenges. However, the economics of developing this database of total impervious area needs to be investigated further and compared with using gross area with runoff factors. The use of class averages can further simplify these methods and perhaps minimize database development efforts. The example on the following page shows that revenues of$398,000 can be collected by levying an average monthly fee of $1 for single family residential customers and a proportionate amount from multi-family and non-residential customers using building footprint area. This example is based on building footprint area since the City does not currently have additional data on total impervious area for each parcel. This example shows that a relatively small fee can generate revenues to offset a significant portion of the costs of stormwater operations. Example Rates Based on$1.00 Monthly Charge to SFR for Stormwater Charges Method Average Monthly Cost Per Parcel Total Costs Unit Rates BLACK&VEATCH ES-6 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study Single Multifamily Non- City's Share Family Residential residential for Streets Residential Impervious $1.00 $0.84 $1.88 $153,285 48.6¢ per Area and Class month per Average 1000 sq. ft Average area 2,057 sq. ft. 1 1,729 sq.ft. 3,861 sq. ft. These rates will change according to the amount the City would like to generate initially from user fees. Note that the City's contribution is based on the City's share of costs for streets and roads owned by the City. Public buildings were not identified separately in the initial database of records; but once this data is sorted out, charges to City buildings will increase the City's contribution to the stormwater program. This leads to the issue "How much should the City contribute towards stormwater costs above and beyond. their contribution for streets and City owned properties?" • Should the City fund the entire stormwater program costs through the General Fund, of should the City continue to fund the stormwater expenses at the current levels thereby reducing charges to users? • Should the City only pay for costs incurred by streets and City owned properties, or should the City bear any costs at all? • Should the City provide some level of funding in between the two extremes? The City may pay its share of stormwater program costs like any other user in the City. The City could participate in the program and pay for stormwater runoff from streets as shown above. As data on public buildings are identified, the City could also pay for stormwater generated by City owned properties. In addition, the City may wish to use General Funds to contribute towards the program to minimize impacts to the users initially. We recommend that the City consider starting the user charges at a nominal level of at least $1 per month for an average single family residence. This is a very nominal fee and small annual increases will allow the General Fund to reduce its contribution to the stormwater program over time. Fees may be gradually increased each year until the fees collected from users (including the City payment for streets) fully pay for the stormwater program. Institutional Issues There are two different issues that need to be addressed in addition to financing the stormwater program costs: Billing and Organization/Administration. How should BLACK&VEATCH ES-7 April 12, 2001 -DRAFT City of San.Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study customers be billed and what is required to set up the billing? How should the City administer stormwater program efforts that will complement the development and maintenance of a stormwater utility? Billing Assuming that the City decides to implement user charges, the issue is "How should billing be implemented?" There are two options that are discussed in greater detail in the body of the report: • Billing on the County Tax Roll. Charges would be levied semi-annually to property owners on the property tax bills. This is fairly cost-efficient and typically results in the lowest delinquencies. The County may charge the City a nominal amount to collect stormwater charges on the County tax roll. The drawback is that when charges are put on the tax roll, there is a misconception that they are a tax and therefore subject to Proposition 218. • Combine bills with water/wastewater utility. Charges would be levied bi-monthly to water and wastewater users as.opposed to property owners. This is relatively simple since the City is already billing users for water and wastewater services. The City may expect some customer relations issues as a result of "bill creep." Vacant properties, (approximately five percent) which are currently not billed for water and wastewater services, would escape without paying for stormwater charges unless modifications are made to the billing system to always bill for stormwater service. Without this change to always bill for stormwater charges, about five percent of the revenues from stormwater user fees would be lost. In setting up the database to levy stormwater fees along with water and wastewater bills, problems occur when the customer base is not the same. For example, parking lots may not have water service. Significant effort may be required to link water accounts to property records. Since the City is already billing for utility services, we recommend that the City institute stormwater billing along with water/wastewater bills. This will require a one time set up cost to integrate the water use records with property records and data for stormwater billing. The City would receive user fees throughout the year, which mitigates cash flow problems and the City would not have to make payments to the County for collection of stormwater user fees on the County tax roll. Organization/Administration Stormwater operations are administered under a variety of organizational structures. The most common organization includes combining the stormwater operations with Public BLACK&VEATCH ES-8 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study Works by establishing a stormwater division operated as an enterprise fund, with the majority of revenues derived from user fees. Other organization structures could include combining with Wastewater, a division of the Utility Department. It could be a part of the Wastewater Division or a separate division of the Utility Department, or a division of the Public Works Department. Since the various elements of this program will be operated across department lines-Community Department, Public Works, Engineering, and the Utility Department, any of these options is feasible. The ultimate decision of organizational structure is, however, one to be made by the City Council after review and input from City staff. Proposition 218 If the City chooses to charge users a stormwater fee to recover the costs of the stormwater program, Proposition 218 issues need to be considered. Proposition 218 applies to fees and charges imposed by an agency upon a parcel or upon 'a person, incident on property ownership, including a user fee or charge for a property related service. Proposition 218 requires stringent public hearing requirements and requires that the fee or charge may not be imposed if written protests are presented by a majority of the owners of the parcels. If the stormwater fee is set up on total impervious area or gross area with intensity of development and runoff factors in the manner recommended, it will not be incident on property ownership because the fee would be related to stormwater service provided and undeveloped parcels would not be charged. This should mitigate the concerns regarding Proposition 218. Even though it is clearly not a property related fee, levying stormwater user fees on the tax roll may be perceived as such and become a Proposition 218 issue. The City needs to consider this risk in its decision for collection of siormwater user fees should a stormwater utility be established. Community Input One of the issues identified during our public meetings is that the community feels strongly about reducing pollution and maintaining a high quality of life for its members. Our recommendations to form a separate stormwater enterprise fund and a separate stormwater division resulted partly from this input received from the community. The community wants to be proactive in cleaning up and maintaining a good environment and even go beyond the regulatory requirements to initiate and conduct the stormwater program. The City may want to develop a program that goes beyond the current regulatory requirements. BLACK&VEATCH ES-9 April 12, 2001 - DRAFT City of San Luis Obipso-NPDES Phase II Stormwater Financing Feasibility Study Community members expressed interest in increasing the Transient Occupancy Tax to pay fully or partially for the stormwater program, Since this is a tax, the City would need to obtain majority voter approval to use this method of funding. Since this cost is not borne by the local community, such a measure would be popular with the majority of the community. However, the fairness of this approach may be questionable since the, majority of the benefits and costs associated with this program are local in origin and would certainly be opposed by the hotel/motel industry. 0 BLACK&VEATCH ES-10 April 12, 2001 - DRAFT BLACK & VEATCH 6 Venture,Suite 315 Black&Veatch Corporation Irvine,Calitomia 92618-3317 Tel:(949)788.4201 Fax:(949)753.1252 April 12, 2001 Mr. Wayne Peterson City Engineer City of San Luis Obispo 955 Morro Street San Luis Obispo, CA 93401 Subject: Stormwater Financial Feasibility Report Dear Mr. Peterson: Black& Veatch is pleased to present this NPDES Phase H Stormwater Financial Feasibility Report to the City of San Luis Obispo (City). The City must meet EPA NPDES Phase H regulatory requirements and set up a stormwater program that establishes minimum control measures to reduce pollution from stormwater. While the City currently has a stormwater program in place, a formal program that meets regulatory requirements will pose a greater financial responsibility on the City. The cost of implementing a stormwater program that meets NPDES Phase II requirements over the next few years is expected to cost as follows: Fiscal Year Cost 2000-01 $347,000 2001-02 $415,000 2002-03 $392,000 2003-04 $581,000 2004-05 $538,000 2005-06 $587,000 To ensure adequate funding for the NPDES Phase H stormwater program it is recommended that the City establish a stormwater utility as an enterprise fund. This will allow the City the flexibility to adopt a system of user charges that can partially or fully offset the operating and capital costs of the program. There are various funding mechanisms to recover stormwater utility operating and capital costs. These include user fees, General Fund revenues, impact fees and. debt financing. Since the NPDES Phase lI costs are primarily operating costs, we have reviewed several user fee methods and identified total impervious area as the most equitable method for levying stormwater user fees. Since the City only has building footprint data, additional effort would be required to construct a database using total impervious area. The user fee methods need to be reviewed further to determine the most economical method for the City. An alternative method to levy user fees is the method that uses gross area combined with intensity of development factors. The feasibility of using these methods to levy user fees needs to be further studied. To provide an example of the level of revenues generated by user fees, a monthly user charge of approximately $1 on average for single family residences will generate about $398,000 in revenues when applied to all users. This example is based on building footprint area data only as a measurement of impervious area. The total impervious area method would provide greater equity but additional data on parking lots, driveways and other paved areas needs to be collected before the City can use this method. We recommend that the billing and collection of these charges be implemented on the water/wastewater bills. The stormwater operations may be established as a separate enterprise of the Public Works Department. The stormwater program would continue to be implemented across the various departments of the City in the same manner as the water and wastewater enterprises. We are confident that establishment of a stormwater utility as an enterprise fund will be beneficial to the City and its users. The details of establishing the stormwater enterprise need to be worked out further before implementation. We have enjoyed working with you and would like to express our thanks to you, Ms. Alice Carter, and other staff members for their support through the course of this study. If we can be of further assistance please call (949) 788 4234. Very truly yours, Sudhir D. Pardiwala Kathy Wong Project Manager Management Analyst 2 TABLE OF CONTENTS EXECUTIVE SUMMARY................................................................................_...._...._.....ES-1 BACKGROUND.......................................................................................................................ES-2 PROGRAM COSTS AND FUNDING ..........................................................................................ES-2 FUNDING MECHANISMS........................................................................................................ES-4 CapitalCosts Recovery....................................................................................................ES-4 OperatingCosts................................................................................................................ES-5 UserFee Methods.........................................................................................................ES-5 INSTITUTIONAL ISSUES .........................................................................................................ES-7 Billing...............................................................................................................................ES-8 Organization/Administration............................................................................................ES-8 PROPOSITION218..................................................................................................................ES-9 COMMUNITYINPUT..............................................................................................................ES-9 BACKGROUND..........................................................................................................................1 NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM(NPDES)...................................... 1 CITY'S CURRENT STORMWATER OPERATIONS...........................................................................2 CITY'S GOALS TO MEET NPDES PHASE 11 REQUIREMENTS......................................................3 ESTIMATED STORMWATER PROGRAM COSTS.............................................................3 REVENUE REQUIREMENTS..........................................................................................................3 FUNDING MECHANISMS........................................................................................................6 GENERAL AND OTHER UTILITY FUND REVENUES......................................................................6 STORMWATER USER FEES ..........................................................................................................7 UserFee Methods...................................................................................................................9 1. Gross Property Area........................................................................................................9 2. Building Footprint/Total Impervious Area.................................................................. 10 3. Class Average Area...................................................................................................... 11 4. Equivalent Residential Units (ERU)............................................................................ 12 5. Class Intensity of Development................................................................................... 12 6. Runoff Coefficients...................................................................................................... 13 PUBLIC PROPERTY AND STREETS............................................................................................. 13 DETENTION/RETENTION CREDITS ............................................................................................ 14 PROPOSED NPDES PHASE II FINANCING PLAN...........................................................15 STORMWATER USER FEE REVENUES........................................................................................ 15 INITIAL REVIEW OF THE IMPACTS OF FUNDING SOURCES AND LEVEL OF USER FEE............... 16 INSTITUTIONAL ISSUES.......................................................................................................16 BILLING...................................................................................................................................... 17 Billingon County Tax Roll...................................................................................................17 Billing with Water/Wastewater Charges..............................................................................17 ORGANIZATION......................................................................................................................... 18 PROPOSITION 218...................................................................................................................18 BLACK & VEATCH RECOMMENDATIONS.....................................................................20 RECOMMENDED STORMWATER PROGRAM FINANCING............................................................20 RECOMMENDED ORGANIZATION..............................................................................................20 i RECOMMENDATIONS FOR NEXT PHASE.............:..................................................:...................20 APPENDIXA................:.................:............:.........................................:..................:.....:...:......22 CAPITAL COST FUNDING ..........................................................................................................22 Pay-as-you-go Funding.........................................:..............................................................22 In Lieu of Construction Fees................................................................................................23 Impact Fees (System Development Fees)...........................:..............:..................................23 Special Assessment or Improvement Districts......................................................................24 DebtFinancing...................................................................................................:.................24 APPENDIXB..............................................................:..............................................................26 STORMWATER SURVEY RESULTS................:...:.,:......:..:.....:........::.....:....:...:......:......:..............26 ii City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study Background The City of San Luis Obispo (City) conducted this stormwater financial feasibility study to address issues concerning costs of implementing a stormwater program to meet state and federal requirements. This effort will enable the City to be in a better position to meet state and federal requirements of stormwater runoff including the Environmental Protection Agency (EPA) National Pollutant Discharge Elimination System (NPDES) Stormwater Phase II Program requirements as discussed in the next section. By the year 2008, all agencies with populations less than 100,000 and that are subject to the NPDES Phase R requirements will be required to fully implement their stormwater management programs. The City, with assistance of Questa Engineering and Black & Veatch is developing a stormwater program and a financing plan to meet these requirements. The implementation of the stormwater management program to meet Phase II requirements will have a financial impact on the City. This report presents various financing mechanisms and funding alternatives and recommends the best alternative to finance the City's stormwater program. To provide a basis for subsequent analyses and recommendations, a wide variety of issues have been discussed and reviewed with representatives of the City and the public through two public informational meetings. These discussions and Black & Veatch's experience with similar work for other clients provide the basis for the following evaluations and recommendations. National Pollutant Discharge Elimination System (NPDES) In 1993, the EPA implemented Phase 1 of the National Pollutant Discharge Elimination System Stormwater Program in an effort to reduce water pollution from a leading source, urban stormwater runoff. Phase I covers Municipal Separate Storm Sewer Systems (MS4's) serving a population of 100,000 or greater. On December 8, 1999, Phase II of the NPDES Stormwater Program was published that covers M84's serving a population of at least 10,000 that are not already covered under Phase 1. Those subject to Phase II of the NPDES Stormwater Program are required to submit a stormwater program that is to be covered under an NPDES operating permit by March 10, 2003 and to fully implement their stormwater programs by March 2008. . Given the population cutoff of 10,000, the City of San Luis Obispo's MS4 is subject to the federal NPDES requirements of Phase U. BLACK&VEATCH 1 April 12, 2001 - DRAFT City of San Luis Obipso-NPDES Phase H-Stormwater Financing Feasibility Stgdy Phase II regulations require the owners of MS4's to implement the following six minimum control measures (MCM): • Public Education and Outreach. • Public Involvement/Participation. • Elicit Discharge Detection and Elimination. • Construction Site Runoff Control. • Post-Construction Runoff Control. • Pollution Prevention/Good Housekeeping for Municipal Operations. The stormwater program must include specific Best Management Practices (BMP) for each of the six MCM's in addition to defining measurable goals for each of the MCM's. The BMPs for stormwater management are defined as schedules of activities, prohibitions of practices, maintenance procedures, treatment requirements, the use of pollution control devices, and operating procedures to prevent or reduce the pollution of waters that are recipients of stormwater runoff. City's Current Stormwater Operations As with most agencies, the City currently performs some stormwater related activities that are managed by various departments within the City. These include • Street.Sweeping • Minimal Storm Drain Maintenance • Annual Inlet Cleaning • Cross Connections Monitoring • Illicit Discharge Detection/Elimination • Construction Runoff Control • Public Education/Outreach These are minimal efforts performed by the City to maintain their current storm drains and to minimize pollutants entering the San Luis Obispo Creek and other local bodies of water. The estimated annual cost in FY 1999-2000 for these functions is $322,000. Approximately $45,500 comes from the Utilities Department for the Water Conservation Program and its Education/Outreach Program efforts that provide benefits to the stormwater program. The balance is met from the General Fund. Additional programs and costs will be needed to meet the requirements of NPDES Phase 11. BLACK&VEATCH 2 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study City's Goals to Meet NPDES Phase II Requirements The first deadline of Phase II requires all agencies subject to the requirements to be covered under a permit by March of 2003. Questa Engineering has prepared the report "Stormwater Management Program NPDES Program Requirements, Recommended Activities and Approach, Program Staffing, and Estimated Costs, January 9, 2000", (SWMP) outlining the development and implementation efforts needed to develop the City's stormwater program to meet Phase H requirements as well as an action plan for implementation and estimated program costs. The City should have a financing plan in place to fund the City's stormwater operations by July 2002. This report discusses the various financing alternatives, funding mechanisms and organizational structures that can support the proposed stormwater program. A financial plan is proposed for the City based upon the existing and projected programs and costs outlined in the SWMP and is found in a later section of this report. Estimated Stormwater Program Costs The development and implementation of the NPDES Phase H stormwater program will require staff and monetary resources. This comprehensive program developed to meet Phase H requirements will need additional funds for program implementation and annual operating costs that may be limited or not be available from the General Fund in the future. Revenue Requirements Historical stormwater revenue requirements are shown in Table 1. These expenses have historically been paid from the General Fund and the Utilities Department. Existing efforts related to street sweeping, storm drain maintenance, annual inlet cleaning, and cross connections monitoring have been identified in Table 1 as Municipal Operations. Table 1 Existing Stormwater Program Costs FY 1999-2000 Existing Activities that Meet Program Requirements Cost* Public Education/Outreach $81,500 Public Participation $0 Illicit Discharge Detection/Elimination $54,000 Construction Runoff Control $54,500 Post-Construction Runoff Control $0 Municipal Operations $132,000 Total Existing Costs $322,000 Questa Engineering, "SWMP" BLACK&VEATCH 3 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase H Stormwater Financing Feasibility Study Existing Illicit Discharge Detection/Elimination activities costs shown in Table 1 above do not include $186,840 for Certified Unified Program Agency (CUPA) activities which are currently funded through user fees. CUPA activities currently funded by user fees will not be recovered through stormwater user fees. Table 2 outlines the development costs and annual program costs related to new and enhanced programs needed to meet Phase 11 requirements. Development Costs shown in Table 2 are related to program development and are one-time expenses that are not necessarily spent in one year but can span over a number of years. Implementation Expense for the Stormwater Program (SWP) includes consultant assistance to develop appropriate City ordinances, data base development for stormwater billing, billing procedures, organizational changes, etc. needed to implement the new stormwater program. Annual program costs are related to the estimated annual expenditures needed to maintain each program element. These costs were based on the estimated time required for each program including overhead costs as outlined in the SWMP report. These new costs are in addition to the existing FY 1999-2000 annual program costs of $322,000. Table 2 Additional NPDES Phase II Stormwater Program Costs. Annual Additional Elements to Meet Program Development Program Requirements Costs* Costs* Program Development/Reporting $36,000 $15,000 Storm Water Ordinance $5,000 $0 Public Eduction/Outreach $117,500 $63,500 Public Participation $0 $40,000 Illicit Discharge Detection/Elimination $26,500 $15,000 Construction Runoff Control $15,000 $64,000 Post-Construction Runoff Control $0 $21,000 Municipal Operations $164,500 $33,000 Implementation of SWP $125,000 $0 Total Program Costs $489,500 $251,500 20%Contingency $97,900 $50,300 Total Incl.20%Conting.). $587,400 01 800 'Questa Engineering, "SWMP" The stormwater program costs outlined in Table 2 currently do not include any large capital expenditures with the exception of a storm drain cleaning truck estimated at BLACK&VEATCH 4 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase U Stormwater Financing Feasibility Study $150,000 in the year 2005-06. The total costs as shown at the bottom of the table include a 20 percent contingency and are based on 2001 cost estimates. In addition to the stormwater program costs shown above in Table 2, the City's Public Works Department has developed a Capital Improvement Program plan outlining the proposed capital expenditures needed to maintain and improve the City's storm drain system over the next four years. The City anticipates the following projects will be needed to maintain the City's storm drain system and the costs for those improvements are shown below in Table 3. Table 3 Proposed Stormwater Capital Improvement Program Bridge Street drainage $264,000 EI Cerrito drainage repair $89,000 Johnson Ave. lift station motor and controller replacement $75,000 Murray Street drainage $190,000 Johnson Ave at Bishop- Culvert debris detention structure $52,000 Laguna Lake-Perfumo Arm sediment control and removal $70,000 Tank Farm Road bridge sediment clearing $31,000 Total Capital Costs in the Next 4 Years $771,000 The capital projects in Table 3 pose potential future costs for the stormwater program. The City will have to consider various financing alternatives for these projects as these projects are needed. Creation of a stormwater utility will allow the City to fund these projects along with the operating costs and other capital costs in an efficient manner. This report discusses the existing and additional stormwater program costs shown in Tables 1 and 2 and the financing alternatives to fund those costs only. A financial plan for the proposed stormwater capital improvement program is not addressed in this report. Funding mechanisms to cover major capital expenses are covered in Appendix A. The following Table 4 summarizes the proposed stormwater program annual costs for the next five years assuming a three percent annual inflation rate. These costs are primarily operating costs and stormwater program development costs with a minimal capital expenditure for the storm drain cleaning truck in FY 2005-06. As the City continues to develop the stormwater program over time, additional capital expenditures may be needed. 0 BLACK&VEATCH 5 April 12, 2001 -DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study Table 4 Proposed Stormwater Program Annual Costs 2000-01 1 2001-02 1 2002-03 2003-04»1 205TOS 200-"- Annualized Costs of Program' $347,000 $415,000 $392,000 $581,000 $538,000 $587,000 'Questa Engineering,"Stormwater Program Report". Does not include$186,840 in existing annual costs for CUPA which are paid for by user fees. SWP Implementation cost of$125,000 is spread over 5 years beginning 2001-02. "Many of the new annual costs related to program begin in this year. Funding Mechanisms Funding stormwater management programs for the City may be achieved through various methods, some of which are applicable to funding operating costs and others to financing major capital improvements. These capital improvements can include improving the existing system to provide filtration of stormwater, and maintenance and improvements to the stormwater collection system. Only a few of these mechanisms have sufficient flexibility and revenue generating ability to be used as a primary source of funding. The stormwater revenue program will need to consider capital funding needs in the future as well as operations and maintenance needs. The City's proposed NPDES Phase II stormwater program includes the purchase of a storm drain cleaning truck as it's only capital expenditure. While capital costs may be funded with grants, low interest loans or debt, the loans would ultimately have to be paid off by users through a user fee. These funding mechanisms for stormwater program capital costs are described in the appendix. Generally, there are two mechanisms for funding stormwater program operating costs, they are: • General Fund Revenues including Other Utility Fund Revenues • User Fees General and Other Utility Fund Revenues Since the City is currently funding the existing stormwater activities through General and Water Utility Fund revenues, it would be simple and cost effective to continue to fund the existing stormwater activities and the NPDES stormwater program from these sources. However, available monies in the City's General Fund are limited and competition for these funds may limit or even eliminate funding for stormwater programs from year to year. Some of the other projects competing for funding from the General Fund include: • Railroad Recreational Trial BLACK&VEATCH 6 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study • Downtown Transportation Center • Open Space Preservation • Athletic Fields • Community/Senior Center • Civic Building These projects must be funded through the General Fund since they cannot be supported through any user fees. This makes General Fund revenues and Water Utility Fund revenues unreliable sources to fund the NPDES Phase II stormwater program. Developing a separate funding mechanism that generates revenues for stormwater activities from users, and is independent from General Fund and other Utility Fund revenues, will be a necessary element to developing and maintaining the City's NPDES stormwater program. Stormwater User Fees A stormwater user fee is a suitable funding mechanism for a broad range of capital improvements and operating programs. For the City, a stormwater user fee is recommended if the City chooses to establish a separate stormwater utility. Generating additional revenue to support the stormwater program through stormwater user fees.can not only provide a more reliable revenue source, but also free up General Funds for other City, projects. This can be accomplished through the establishment of an enterprise fund for the stormwater program as discussed later in the Organization section of this report. Service fees have been adopted as the primary source of revenue for stormwater programs in many states by cities, counties, and special districts. Municipal enterprise funds are established to account for programs where the intention is to finance operations and/or capital improvements through user charges, or where a periodic determination of revenues, expenses, and net income is appropriate. Enterprise fund stormwater "utilities" are comparable in many ways to the City's water and wastewater utilities except that they are responsible solely and specifically for stormwater management programs, improvements, and systems. Service fees provide a stable yet flexible source of revenue. This allows long-range stormwater and flood control programs and system improvement planning on a scale previously achievable only by water, wastewater, solid waste and other municipal utilities. Under an enterprise fund approach, the City could exercise a high degree of flexibility in prioritizing its needs because stormwater service charges can be made suitable for a broad range of program and capital expenses through careful rate design. BLACK&VEATCH 7 April 12, 2001 -DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study The costs of implementing and maintaining stormwater service charge rate calculation and billing systems are highcompared to other funding mechanisms. Formation of a stormwater utility could involve substantial implementation costs depending upon the method selected. In addition, for any given method, a detailed cost of service rate study exploring different rate structures would be conducted to ensure fairness. Once a rate methodology is selected, a master account file would be designed, data for properties subject to the service charge would be assembled, and existing utility billing systems would be modified or a new system developed. Ongoing costs would include data upkeep and delivery of the bills. The City currently maintains total property area information and building footprint area for each parcel. Additional effort to establish a more detailed database to support the selected rate structure may be needed. The initial revenue capacity of a stormwater service charge would be limited by the ratepayers' willingness to pay. Revenues might not be sufficient immediately to fund the annualized capital improvement and operating program needs. Communities often commence charges at a relatively low level and phase in full cost recovery over several years to reduce initial rate shock. If this is done, deferral of programs or supplemental funding may be required. The financial impact of a stormwater service charge on citizens and businesses would be direct and highly visible, especially if delivered as a separate billing, as a distinct line item on the current utility bill, or as an additional item on the property tax bill. Several other cities and counties use such existing systems at relatively low cost, but the property tax billing option often creates confusion about whether the stormwater charge is a service charge or tax. Since stormwater user fees are typically levied on parcels, the program needs to be designed taking into consideration the requirements of Proposition 218, which could impose additional costs on the stormwater program. If the revenue program is properly designed, the City may be exempted from the requirements of Proposition 218 as discussed later in this report. The actual service charges to individual properties would be a function of the rate structure used. Residential property owners elsewhere have generally been billed between $2 and $4 per month initially. Average stormwater service charges to non- residential properties are usually between 2 and 5 times those charged to single-family residences reflecting the fact that such properties are typically larger and more intensely developed. Rate methodologies are generally consistent with accepted hydrologic engineering principles and design values used for calculating peak stormwater runoff. BLACK&VEATCH 8 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study Perhaps the most attractive aspect of the stormwater service charge approach is that a high degree of equity can be achieved through careful design of a rate concept. In addition, use of primary and secondary funding methods within a rate structure or separately would allow the City to distribute costs on the basis of contribution to stormwater runoff, services rendered, the cost of services and facilities, or a combination of all of these considerations. This level of flexibility is not available in other stormwater funding methods, which typically have strictly defined taxing or special assessment concepts. According to Black & Veatch's 1998-99 Stormwater Utility Survey of 112 stormwater utilities, 82 percent of the respondents indicated that at least 90 percent of their revenue is derived solely from stormwater fees while two percent of the respondents relied solely on other (non-ad valorem assessment) for at least 90 percent of their revenue. The remaining 16 percent of the respondents depend on multiple revenue sources to provide a major share of total revenue. The survey results are included in Appendix B. Presented below are alternative methods to structuring user fees to fund operating costs. Since the City's current program does not include significant capital costs, capital cost funding methods are covered under the section Capital Cost Funding and included in Appendix A. User Fee Methods User fees, by definition, must relate to the quantity of service used by each "customer." For stormwater programs, services can be measured in terms of stormwater quantity, stormwater quality, and customer. Quantity costs are those related to the amount of stormwater or runoff generated. Quality costs would be those costs, if any, which relate to the level of pollutants in runoff from specific classes of customers. Customer costs are the costs of billing and collecting user fees. We have currently not identified specific costs related to quality. Since the program is in its infancy, customer costs have not been broken out separately. As a result we will be allocating costs to quantity of stormwater only. Several rate parameters may be used to recognize stormwater flow volumes and the one a utility adopts is generally dependent on available customer billing data and local conditions. The user fee methods are discussed below. 1. Gross Property Area Gross property area is the most basic parameter for estimating stormwater flows. This data is often readily available in the tax assessor's database and it may be reasonable to equate stormwater flow characteristics with area in some situations. Such situations would include utilitieswhere the overall expenditures are relatively small and where a more complex billing system would significantly increase overall utility expenses. Other BLACK&VEATCH 9 April 12, 2001 -DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study utilities may be sufficiently homogeneous in their density of development so that all properties could reasonably be treated as having the same runoff characteristics. The City currently maintains gross property area data for all properties in the City, thus this method of calculating stormwater flows would require very little additional data collection effort. While this method is simple to implement, it is not a very equitable method because development in the City is not homogenous. The correlation between gross property area and stormwater runoff is weaker than in some of the other methods discussed below. As a result not too many agencies use this method to implement stormwater user fees. The Black & Veatch 1998-99 Stormwater Utilitv Survev results indicated that 16 percent of the respondents utilize the gross property area with runoff or intensity of development factor as the basis for their user fees. The revenue that can be generated by an average rate of$1 per month for a single family residence, when applied to the other properties in the City, yields an annual revenue of over $500,000 as shown in the example below in Table 5. Table 5 Estimated Revenue Collected Based on Gross Property Area No. Gross Area, Area/Parcel, Ratio of Annual Revenue Accounts sq.ft. sq ft. Areas Collected Single Family Res 7,799 51,953,983 6,662 1.0000 $93,588 Multi-Family Res. 6,433 32,838,903 5,105 0.7663 $59,155 Non—Residential 3,839 167,022,659 43,507 6.5310 $300,868 City Streets 1 26,275,565 26,275,565 3,944 $47,332 Total $500,943 2. Building Footprint/Total Impervious Area Total impervious area of a property is frequently used as the measure of the quantity of stormwater flow. Using total impervious area as a billing system parameter at least implicitly assumes that either there is very little runoff from the pervious area or that the property is not responsible for runoff from pervious areas since it would have occurred regardless of the property's development. In this case, undeveloped properties not contributing to stormwater runoff should not be charged a fee. The City currently has data that shows impervious area based on the footprint of structures on a property only. This data does not include areas of pavement such as driveways and parking lots. The City maintains data on total street area that can be used to allocate stormwater costs to the City. The City can use the method based on building footprint area to charge for impervious areas that contribute to stormwater flows since the City already maintains this data. 0 BLACK&VEATCH 10 April 12, 2001 -DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study However this method can be improved by considering other impervious areas on a property such as parking lots, driveways, and other paved areas to increase equitability. Efforts to construct total impervious area may involve takeoffs from maps or.aerial photographs and onsite visits, all of which may be both time consuming and costly. Results from the Black & Veatch 1998-99 Stormwater Utility Survey as found in the appendix, revealed that 54% percent of the respondents utilize the impervious area as the basis for their user fees, while 21% use both impervious and gross areas, and 9% use other bases (e.g., number of rooms, water use, flat fee). To obtain an idea of the revenue generated by using building footprint area, we have estimated the revenue that can be collected from various user groups. The revenue that can be generated by an average rate of $1 per month for a single family residence when applied to the other properties in the City yields an annual revenue of just under $400,000 as shown in the example below. Table 6 Estimated Revenue Collected Based on Building Footprint Area No. Building Area/Parcel, Ratio of Annual Revenue Accounts Area,sq.ft. sq ft. Areas Collected Single Family Residential 7,799 16,045,768 2,057 1.0000 $93,588 Multi-Family Residential 6,433 11,119,466 1,729 0.8401 $64,855 Non—Residential 3,839 14,822,346 3,861 1.8766 $86,452 City Streets 1 26,275,565 26,275,565 12,771 $153,254 Total $398,149 Typically, the total impervious area method would be expected to generate a larger contribution from non-residential properties than the gross property area method because they are more intensely developed. However, because we do not have the total impervious area for each property, the revenue from non-residential properties is larger under the gross area method. These preliminary results again reinforce the need to further review the user fee methods for stormwater charges keeping in mind the effort and cost incurred to establish the database for stormwater billing. 3. Class Average Area A variation of the total impervious area or gross property area method is the class average method. In this method, instead of compiling data on individual properties, they are grouped into classes based on their runoff characteristics. For example, one uniform flat- rate charge could be applied to all single family residential properties, or two or more BLACK&VEATCH 11 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study classes of single family residential properties might be defined which would each have flat rate charges. The composition of the residential housing stock in the City of San Luis Obispo must be considered in determining the appropriate number and definition of classes. Any simplification of the rate methodology by assigning residences to groups or classes should recognize and reflect the differences in terms of demands placed on the stormwater system by each class of customer and the cost of providing services and facilities. This method can be used with building footprint/impervious area to simplify data collection and administration. For example, the City could choose to assume that all single family residences on average have the same impervious area and charge one rate as many of the single family residences in the City probably do not vary significantly in building footprint area. The City can also choose to administer a flat charge for multi-family residences if they are determined to have similar impervious area on average. Non-residential customers with varying impervious areas should be charged according to the actual impervious area on each parcel. This method based on total impervious area would probably suit the City's needs and help minimize data collection efforts. Total impervious area using class averages provides a balance between equitability and simplicity to estimate stormwater flows should the City decide to establish a stormwater utility and implement user fees. Since the City only has building footprint data, additional effort would be required to construct a database using total impervious area. This user fee method and others need to be reviewed further to determine the most economical method for the City. In addition to impervious area, another consideration for user fees include the use of total gross area combined with intensity of development factors (described below). The feasibility of using these methods to levy user charges needs to be further studied. 4. Equivalent Residential Units (ERU) A basic approach to stormwater rate structures is to use the average single family residence as a reference point for stormwater utility service requirements and charges. All single family residences are typically charged the average rate and other customers are charged using parameters which are related to the average single family residence. Rates may be stated in terms of a charge per equivalent residential unit (ERU), such as $1.00 per ERU per month. This is just another way to represent fees for other users relative to those of a single family residence. 5. Class Intensity of Development BLACK.&VEATCH 12 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase H Stormwater Financing Feasibility Study Class intensity of development factors are indicators of the relative runoff potential from various classes of development, i.e., residential, commercial, and industrial properties. Class intensity of development factors customarily are determined to represent the percentage of gross property area that is impervious. These factors can vary from one City to another, and may vary by location within the City. For example, suburban residential properties may have a lower ratio of impervious to gross area than urban residential properties. Class intensity of development factors may be used in conjunction with a charge system based on gross property area to enhance the equity of the user fees. If total impervious area is not readily available, this method represents a good approximation of impervious area and may be used to develop user fees. 6. Runoff Coefficients Runoff coefficients are similar to the intensity of development factors, in that they both reflect the potential for runoff, e.g., relative impervious area. Runoff coefficients, however, recognize additional parameters, and are based on empirical studies. Public Property and Streets State and federal facilities do not pay local property taxes. Charging these properties a stormwater user fee becomes a new source of revenue for the City and broadens the rate base. A case can be made to exempt local government properties which are not subject to property taxes from the stormwater fee because the source of the funds, the local community, is the same in any case. However, "taxpayer" and "ratepayer" are not equivalent terms. The owner of an individual parcel of property will pay one amount in support of stormwater management based on parameters such as gross property area, impervious area, etc. and.another amount in taxes based on value of the property. This payment of costs through taxes is not as fair as payment through user fees. Most municipalities exempt streets and roads from stormwater user fees. Streets are often viewed as an extension of the stormwater collection system, which are improved, operated, and maintained by other public agencies in support of the stormwater management program. In this sense, they should be exempt from the stormwater charge. Furthermore, because the stormwater charge is a user fee, and not a tax, the owners of the City's land area that is tax exempt should pay their fair, equitable share for stormwater management. Moving the stormwater charge for streets to the City's General Fund tax base would have the effect of diluting the user fee nature of stormwater charges, and would also redistribute a significant amount of costs from tax exempt to taxable property. Finally, the ability of the City's General Fund to support some portion of the stormwater 0 BLACK&VEATCH 13 April 12, 2001 - DRAFT City of San Luis Obipso-NPDES Phase II Siormwater Financing Feasibility Study revenue burden without a negative impact on other City services must be considered. If City streets are exempted from the stormwater user fee, private streets similarly situated, i.e., freely available for public use and improved, operated, and maintained by the owner in support of the stormwater management program, should also be exempted. Since the City is planning to share in the costs of running the stormwater utility, it may consider not exempting itself from user charges related to runoff from streets and public properties. It should be noted that if this rationale were used, the City would in effect continue to pay in the future as opposed to the scenario where the City just contributes from the General Fund to minimize impacts and later phases in full cost recovery. Detention/Retention Credits Credits are often granted to improve equity, provide incentives to implement or carry out an overall community stormwater management plan, or advance some other social or environmental objective. The provision of on-site detention or retention systems theoretically reduces the cost of service to the City by reducing flooding related costs and maintenance efforts. Capital costs are lower because smaller conveyance system sizes can be used downstream from the property and because older systems may not require replacement. Maintenance costs are lower because the peak or volume of flow is presumably reduced and the velocity/volume impacts on structures and natural beds and banks are also reduced. The basic principal in developing and granting stormwater credits is that credits should be given for approved private investments or actions which reduce public cost, or for those which result in a stormwater related public benefit that is ongoing. Depending on the type of detention or retention structure, the contribution to the City's stormwater system may be reduced or eliminated and certain pollutants may be filtered better than others, which results in varying impacts on the cost to serve that customer. If credits are to be given, the methodology for calculation of the credit must be determined. Credits can be based on reduction of impact or reduction of cost of service. Reduction of impact is related to lower peaks, lower velocities, lower total volume, lower levels of pollution, and lower erosion and/or sediment. To the extent owners make their property respond as if it is less impervious, it is appropriate to allow a credit. For example, if a property owner makes the hydrologic response from four acres of impervious area respond like it is two acres of impervious area, the owner might get a 50 percent fee reduction. It must be recognized, however, that reduction of impact is subjective, rather than a strict engineering calculation. BLACK&VEATCH 14 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study Reduced cost of service is also difficult to determine, and rules-of-thumb are often used. For example, if the City spends a certain amount per acre on major and minor system maintenance, an estimate can be made of the reduction in cost of service based on the number of acres removed from public responsibility. It must be recognized that each property given a credit on their bill results in the other users picking up the cost difference in order for the City to achieve budgeted revenue goals. Proposed NPDES Phase II Financing Plan A proposed financing plan summary is developed to meet anticipated revenue requirements of the stormwater management program. The plan presented assumes that a stormwater utility is formed and user fees based on building footprint area are collected to pay for the NPDES Phase U stormwater program. It also assumes a declining level of funding from the General Fund because it is expected that user fees will eventually pay for the entire costs of the stormwater program. It is assumed that the General Fund pays for the costs of stormwater generated by City streets only. When the proposed stormwater financing plan is implemented data on City owned public buildings would be developed and the appropriate stormwater fees would be paid for by the General Fund. Stormwater User Fee Revenues For purposes of this analysis, it is assumed that revenues generated by stormwater user fees in the initial years of the program will not fund the entire program but will eventually be adjusted to meet the total revenue requirements in the future. In the plan shown in Table 7, stormwater user fees begin at low levels in the first few years just to help pay for new program expenditures so as to minimize the impact on users. In the second year of the program, additional funding from the General Fund is needed. Stormwater user fees are increased over time to eliminate the need for funding of stormwater related activities by the General Fund. Projected annual stormwater user fee revenues are shown in Table 7 using building footprint area as a measure of impervious area. The revenues generated by each customer class including revenues from the City for stormwater generated from streets and General Fund contribution needed is shown. In this example, the amount of fees generated is estimated assuming an average nominal fee of $1 for a single family residence. The revenue derived from this fee is approximately $398,000 in the first year of program funding in FY 2002-03. This alternative requires the average multi-family and non- residential fees of approximately $0.84 and $1.88 per month respectively. This is equivalent to a rate of 48.6¢ per 1000 sq. ft of impervious area. These fees are increased 0 BLACK&VEATCH 15 April 12, 2001 -DRAFT City of San Luis Obipso-NPDES Phase II Stormwater Financing Feasibility Study by a nominal 25¢ per year each year until the fees generated by stormwater fees are adequate to support the stormwater program. This fee is still relatively small and may be easily accepted by the general public. A contribution from the General Fund is still required in FY 2003-04, but further contributions from the General Fund are not needed in the future years. Estimated annual revenues from the indicated user fees are shown and it is assumed that the stormwater user charge will become effective July 1, 2002. Table 7 Projected Stormwater User Fee Revenues 2002-03 2003-04 2004-05 2005-06 Estimated Annual Cost of Program $392,237 $581,038 $537,603 $587,295 Building Footprint Area Monthly Fee Ave. Monthly SFR Fee(2,057 sq ft) $1.00 $1.25 $1.50 $1.50 Ave. Monthly MFR Fee (1,729 sq ft) $0.84 $1.05 $1.26 $1.26 Ave. Monthly Non-Residental Fee (3,861 sq ft) $1.88 $2.35 $2.81 $2.81 Annual SF Residential Revenue $93,588 $116,985 $140,382 $140,382 Annual MF Residential Revenue $64,855 $81,069 $97,283 $97,283 Annual Non-Residental Revenue $86,452 $108,065 $129,678 $129,678 Annual City Streets Revenue $153,285 $191,606 $229,927 $229,927 Total Annual Revenues from User Charges $398,180 $497,725 $597,270 $597,270 Annual General Fund Contribution $0 $83,313 $0 $0 Total Annual City Contribution(Streets&GF) $153,285 $274,919 $229,927 $229,927 Total Annual Revenue $398,180 $581,038 $597,270 $597,270 Initial Review of the Impacts of Funding Sources and Level of User Fee The initial monthly user fee of $1.00 for an average single family residential customer shown in Table 7 based on building footprint area represents full funding of the projected Stormwater Fund revenue requirements for FY 2002-03. A fee of this magnitude would place the City of San Luis Obispo in the lower quartile of cities that responded to Black& Veatch's 1998-99 Stormwater Utility Survey that can be found in the appendix. The City, upon final completion of a financial plan could decide to choose to fund a larger portion of the program in the future through user fees and further reduce the dependence on General Fund revenues. Institutional Issues There are two issues to be addressed here relating to billing and organization/administration. These are discussed below. BLACK&VEATCH 16 April 12, 2001 -DRAFT City of San Luis Obipso—NPDES Phase H Stormwater Financing Feasibility Study Billing The City has the option of billing on the County Tax Roll or along with its water/wastewater service charges. Billing on County Tax Roll. Many agencies levy wastewater charges on the County tax roll if they do not provide water service. This method of levying charges is fairly efficient and generally low cost. San Luis Obispo County typically charges $2 per parcel added directly to the parcel charge. This would result in an annual added cost of$36,000 to property owners. There would be an additional cost of preparing the charges annually for the County tax roll. This would require investigation of newly developed properties and determination of the charge for that property. An advantage of billing on the County tax roll is that owners of vacant properties would also share in the costs of the stormwater program. The drawback is that when charges are put on the County tax roll, there is a misconception that they are a tax and therefore subject to Proposition 218. It is clearly not a property related tax as defined under Proposition 218, because fees would not be related to stormwater service provided and not all properties would be subject to the fee. Another minor drawback is that .since the fee is levied annually, a newly developed property can potentially escape being billed for a period of time for stormwater depending on when it develops. Finally the revenue would typically come in two major increments at the time the County tax is due in December and April. This would require loans to meet working capital requirements until the revenues were received. Billing with Water/Wastewater Charges Billing stormwater charges along with the City's water/wastewater charges involves using the City's current database for water/wastewater service charges. This method requires account holders to be billed as opposed to property owners. The billing process is straightforward but requires an initial cost to set up the database. Problems occur with this billing method when the customer base is not the same for the two services. For example, parking lots may not have water service and therefore would not be billed for water or stormwater services unless modifications were made to the billing system to always bill for stormwater service. Significant effort may be needed to link the water accounts data to property records. Some issues to consider here are: • The City currently bills on a bi-monthly basis. Adding stormwater charges could result in a customer relations issue because of"bill creep." BLACK&VEATCH 17 April 12, 2001 -DRAFT City of San Luis_Obipso—NPDES Phase II Stormwater Financing Feasibility Study • The City does not bill vacant properties and could potentially lose up to five percent of the stormwater revenues. Organization Stormwater management operations are administered under a variety of organizational structures. A separate stormwater utility allows development of an identity with the public and provides greater autonomy and control over policy and financing. A separate utility does, however, require more effort to implement and administer. The most common organization includes combining the stormwater operations with Public Works by establishing a stormwater division operated as an enterprise fund, with the majority of revenues derived from user fees. Other management structures include integrating stormwater operations with the Wastewater Division of the Utility Department or expanding the Engineering Division of the Public Works Department to include stormwater operations. Regardless of the type of management structure chosen by the City, various program functions will continue to span across department lines in the City. For example, the Engineering Division will be responsible for the capital improvement projects related to stormwater and Community Development will be responsible for issuing building permits and other construction and runoff control efforts. Results from the Black & Veatch 1998-99 Stormwater Utility Survey revealed that separate stormwater utilities have been formed by 31 percent of the respondents, while 52 percent of stormwater operations are combined with Public Works, 8 percent are combined with the Wastewater Utility, and 3 percent of the respondents reported other arrangements. The City may elect to either combine with Public Works or the Utilities Department. This is not a critical issue and the City may act on this at a later time to best meet its requirements. Proposition 218 In November 1996, California voters passed Proposition 218, the "Right to Vote on Taxes Act" adding Articles XIII C and D to the California Constitution. The stated purpose of Proposition 218 was to "close loopholes" in Proposition 13 which allowed local governments to increase fees, charges and benefits assessments without a public vote, rather than increasing taxes which do require a vote. Different requirements are applied to taxes, assessments and fees under Proposition 218. The requirements for fees are discussed below. 0 BLACK&vEATCH 18 April 12, 2001 -DRAFT City of San Luis Obipso—NPDES Phase II Stor nwater Financing Feasibility Study Fees and charges are defined as any levy other than an ad valorem tax, a special tax, or an assessment, imposed by an agency upon a parcel or upon a person incident on property ownership, including a user fee or charge for a property related service. Reliance on any parcel map may be considered a significant factor in determining whether a fee or charge is imposed as an incident of property ownership. Proposition 218 article XMD, sections 6(b) specifies that: • Revenues derived from the fee or charge shall not exceed the funds required to provide the service. • Revenues may not be used for any purpose other than that for which the fee or charge was imposed. • The amount of the fee or charge on a parcel may not exceed the proportional cost of the service attributable to that parcel. • The service for which the fee is imposed must actually be used or immediately available to the owner of the property. • Fees may not be imposed for general governmental services including police, fire, ambulance or library services where the service is available to the public at large in substantially the same manner as to property owners. Proposition 218 thus seeks to put an end to the practice of one way "loans" made from enterprise funds to the general fund. Legitimate overhead cost allocation is still allowed. Before rates or charges can be increased the public needs to be notified. The noticing requirements under Proposition 218 are more stringent. The notice must include the purpose of the fee and basis for calculation must be included along with the time, date and place for a public hearing. Proposition 218 requires a public hearing to be held no less than 45 days after mailing of the notices. The fee or charge may not be imposed if written protests are presented by a majority of the owners of the parcels. No vote is required. If the siormwater fee is set up on total impervious area or gross property area using runoff factors in the manner recommended, it will not be incident on property ownership since properties will be charged on the basis of stormwater contribution. This will mitigate the general legal concerns regarding Proposition 218. In a recent case, Howard Jarvis Taxpayers Association v. City of Salinas, No. 45873 (Monterey County Superior Court, Oct 23, 2000), the trial court exempted stormwater fees from Proposition 218 requirements, finding that the stormwater fees were not property related since they were based on use of the storm drainage system rather than property ownership. BLACK&VEATCH 19 April 12, 2001 - DRAFT City of San Luis Obipso-NPDES Phase II Stormwater Financing Feasibility Study Black & Veatch Recommendations Based on the discussions in this report, the following are Black & Veatch's recommendations for the City's stormwater program organization and financing. Recommended Stormwater Program Financing A user fee based on total impervious area is the most fair and equitable method and is recommended for the City should the City establish a stormwater utility. This method is easily understood, and provides a good balance between equity of the charge system and cost of establishing a billing basis. This method is expected to mitigate the legal concerns of Proposition 218. However, the City has data available on building footprint area only, and we recommend that the feasibility of developing a database of total impervious area including paved area, parking lots, etc. and the cost effectiveness of establishing this database be further studied. Collecting this additional information on paved areas, parking lots, and driveways to obtain total impervious area will allow users to be charged fairly for their contribution of stormwater. Initially, a uniform fee for all single family residences may be implemented. Multi-family and non-residential customers can be charged based on a unit rate applied to their total impervious area. It is recommended that the user fee be assessed to all public and private properties, including local, state, and federal facilities, including streets and roads. A stormwater user fee is recommended as the primary source of funding the City's stormwater management program. A stormwater user fee is a flexible, reliable source of revenue, and with proper design, is an equitable method of charging for stormwater services. User fee revenues may be supplemented through the implementation of other charges such as in-lieu of construction fees, plan review and inspection fees, and special inspection fees for capital costs. Recommended Organization It is recommended that the City establish a separate stormwater utility operated as an enterprise fund. The stormwater utility can be a separate division under the direction of the Public Works Department or other existing City function. Recommendations for Next Phase In the next phase of the study, Black & Veatch recommends that the City review the economic feasibility of developing the total impervious area method for implementation by the City. This would involve acquiring additional information on parking lots, BLACK&VEATCH 20 April 12, 2001 -DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study driveways and other paved areas to obtain total impervious area for each developed parcel. The cost effectiveness of establishing this database along with the equity achieved in using total gross property area with runoff factors will be reviewed. Additionally, we recommend that a firm financial plan be developed to show the user fees for the various user groups in the first year and expected fees in future years so that the City can plan the appropriate funding mechanisms. The costs and resources of implementing the billing method need to be developed so that the City can plan to start collecting user fees for FY 2002-03. Finally ordinances, resolutions, policy and procedures need to be drafted for the stormwater enterprise for effective implementation of the stormwater management program. BLACK&VEATCH 21 April 12, 2001 -DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study APPENDIX A Capital Cost Funding The stormwater program developed by Questa does not include significant capital expenses, however, the City has identified several stormwater related capital projects that need to be constructed over the next four years. It is possible that in the future there may be additional major capital expenses that require additional funding. This section discusses some common mechanisms to fund major capital expenses. There are several alternative mechanisms of funding capital costs. Some of these mechanisms are applicable to new development and others to all capital expenses. The City is over 85 percent developed and therefore the majority of the capital costs would have to be borne by current users. Pay-as-you-go Funding Pay-as-you-go funding involves allocating a portion of the annual budget for capital improvement expenditures. It does not rely on any debt financing and is limited by revenue sufficiency, reliability and priority when in competition with other needs. The major drawback of the pay-as-you-go approach is that competing demands for annual ap- propriations virtually rule it out as a source of funding for major capital improvements, land acquisition, and large pieces of maintenance equipment.. A major increase in funding for stormwater management capital improvements on a pay- as-you-go basis could be achieved only by reducing appropriations to other programs, increasing taxes or other revenues, or both. In the City's case, reducing appropriations to other City programs to fund the stormwater program would not be a likely alternative since the stormwater program is in its infancy and has not yet been established as a priority. Furthermore, increasing taxes to fund the stormwater program would raise Proposition 218 issues as discussed in this report. Even if such a shift in priorities might be made in one year, it could just as easily be reversed in the next. This lack of stability from year to year makes it difficult to plan a thoughtful and coordinated program of system improvements based on pay-as-you-go funding. The development of an effective stormwater system may be continually delayed as monies are accumulated. When projects are deferred, the eventual construction costs may rise due to the effects of inflation. Pay-as-you-go funding is most suitable for small, routine and relatively inexpensive projects. BLACK&VEATCH 22 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study In Lieu of Construction Fees In lieu of construction fees provide an alternative method of financing when regional detention facilities are developed to accommodate stormwater runoff. The purpose of these facilities is to limit the number of private onsite detention facilities built in anticipation that the number of system failures due to improper maintenance by private owners will be reduced. Because these facilities are City owned, regional facilities characteristically are more efficiently operated and maintained. The City's ability to fund regional improvements in anticipation of full development is the key to selecting this type of fee. The City would have to "carry" the costs of regional development until such time as sufficient fees accumulated to pay for the facility. Since the City is almost built out, minimal in lieu of construction fees would be collected to pay for any significant regional improvements. In this case, this method of financing capital improvements may not be the most suitable. Unless the City can anticipate growth and install regional control facilities at lower cost prior to development, it is unlikely that detention or conveyance facilities can be retrofitted at a cost that in lieu of construction fees would support. This funding would essentially recover costs associated with a particular development and would not offset other operating or capital costs. Impact Fees (System Development Fees) Impact fees, or system development fees, are one-time charges to new- or re-development to help offset expenditures for major facilities required as a result of new- or re- development. Essentially, it gives owners of undeveloped land a deferral from participating in capital project costs until the time of development, at which time the deferred payments are recaptured through the impact fee. In California, impact fees or system development fees are governed by Government Code Sections 66013, 66016, and 66022. These require that: "Impact charges should not exceed the estimated reasonable cost of providing the service for which the fee or charges is imposed, unless the amount of the fee or charge imposed in excess of the estimated reasonable cost of providing the services or materials is submitted to, and approved by, a popular vote of two-thirds of those electors voting on the issue." BLACK&VEATCH 23 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study The underlying basis for the legal framework appears to be that impact fees imposed should reflect the estimated reasonable cost of providing service to new customers, unless voters have specifically approved a higher level for the fees. Despite the implementation and administrative expenses involved in establishing an impact fee program, impact fees are gaining acceptance as an equitable financing alternative to ensure that a proportionate share of costs are recovered from development that causes the costs to be incurred by local governments. Since the City is over 85 percent developed, the potential to recover significant revenues from this source would be limited. Special Assessment or Improvement Districts Special assessment or improvement districts are normally a highly feasible secondary financing method for special applications, notably minor remedial repairs or construction for small local stormwater system repair. Citizens may request specific stormwater improvements in their area which does not represent a city wide problem and would be funded through a special assessment on that area or district. Debt Financing Revenue bond, general obligation (GO) and certificates of participation (COPs) allow the City to finance large expenditures through loans which are repaid from revenues over the life of the acquired asset. When general taxes can be used for debt service, general obligation bonding is more common because they normally receive more favorable bond ratings and thus pay a lower rate of interest than revenue bonds issued by the same agency. Although GO bonds are guaranteed by the full faith and credit of the City and its resources, they may also be repaid from other sources of revenue such as user or service charges through a method referred to as "double-barrel" bonding. Revenue bonds and COPs are normally used by "enterprise fund" operations, such as utilities that derive revenues primarily from user charges. If the City establishes a stormwater utility, the preferred route would be to issue revenue bonds. GO bonds need a 2/3 voter approval, a difficult proposition in California. Revenue bonds issued under the 1941 Act need majority approval and therefore agencies typically prefer funding through COPS. CON provide long term financing through a lease, installment sale agreement or loan agreement that is not subject to statutory limitations such as elections, interest rate limits, etc. The parties involved in a COP issue include the public entity (lessee), another public agency such as a redevelopment agency or parking authority (the lessor), and a trustee. Legal basis for COPS comes from basic laws that allow public entities to enter into lease agreements one year at a time, with the understanding that a public entity cannot obligate BLACK&VEATCH 24 April 12, 2001 -DRAFT City of San Luis Obip"so—NPDES Phase U Stormwater Financing Feasibility Study future governing bodies to honor a lease agreement. This may result in COPS commanding a higher interest rate. In other respects COPS are similar to revenue bonds. The City's ability to generate money for capital improvements through COPS is directly related to the capacity of the taxes, service charges, fees, or other sources of revenue pledged to service the debt. For revenue bonds and COPs, the bonding capacity is a function of the charges, fees, or other resources on which the sale is based. Secondary revenue sources such as in lieu of construction fees and impact fees can also be used to repay COPS. They are not, however, stable and dependable funding sources, since their revenues are related to the pace of development. 0 BLACK&VEATCH 25 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study APPENDIX B Stormwater Survey Results In am effort to determine trends in the industry, Black & Veatch conducts biennial surveys. Some interesting results related to financing from the Black & Veatch_ 1998-99 Stormwater Utility Survey are presented below. How is the majority of capital improvement needs financed? 69% Cash Financed 58610 from user fees 3% from ad valorem taxes 5% from other sources(e.g. tax district, grants; development fees) 31% Debt Financed 10% General Obligation backed bonds 11% Storrriwater revenue bonds 2% Combined stormwater/other bonds 8% Other(e.g., sales tax bonds,reserve borrowing) Utilities are typically using pay-as-you-go financing for the bulk of their financing needs. This may reflect that capital improvements are generally incremental in nature and are not typically major projects requiring debt funding and/or the programs are in an infancy stage. What are your user fees designed to pay for? 8% Operation & maintenance (O&M) expenses only 1% Capital improvements only 91% Both O&M expenses and capital improvements User fees do recover the total costs of running the stormwater utility. Are one-time impact/capital recovery fees applied to new stormwater utility customers or new development? 81% No 19%Yes The concept of impact fees is not yet very popular for stormwater services. This may reflect that often capital improvements are needed to serve existing customers, not new growth. BLACK&VEATCH 26 April 12, 2001 - DRAFT City of San Luis Obipso—NPDES Phase II Stormwater Financing Feasibility Study Black & Veatch recently conducted another survey of nearby agencies and results revealed the following in response to the organizational structure, revenue sources and estimated operating budget for stormwater related functions as shown in Table 8. Table 8 Survey of Nearby California Agencies Population Monthly SW Combined w/ Combined w/ NPDES Application O&M Budget Revenue enc Fees Public Works WWUtilitv Status Sources Morro Bay 10,000 x N 60,000 0 EI Paso Robles 23,000 z N Contract Out 0 Burlingame 29,000 x x Y(1) 825,155(4) O Gilroy 35,000 x N Draft O Lompoc 40,000 x N WA O Yuba City 42,000 x P 105,000(5) O Palo Alto 60,000 $425/ERU x Y(2) 1,404,344 SW User Fees,0 Milpitas 66,000 x Y(3) 125,000 O Monterey 32,000 $4.76/ERU x N 650,000 SW User Fees,0 Ma Cruz 55,000 $1.77/SFR x N SW User Fees Santa Maria 72,400 x N WA O Santa Barbara 100,000 z N 2,000,000 TOT (1)Under the San Mateo County NPOES permit (2)Under the Santa Clara County NPOES permit (3)Under local state urban runoff program (4)No separate budget for City. Countywide budget. (5)No separate budget,estimated costs. Part of the street division's budget. N=No application submitted Y=Submitted and approved under Phase I P=Pending O=Other sources. May come from general hind,or other sources such as water,sewer rates,etc. TOT=Transient Occupancy Tax,this is based on 2%of hotel bills ER =1 ERU for single family and duplexes(2,500 sq.It of impervious area for Palo Alto,and.3,313 sq.R for Monterey) The survey shows that where agencies have formed separate enterprise funds, the monthly charges for single family residences are under $5. Most of these agencies, except Santa Barbara, are in the Phase H program. Santa Barbara is in the Phase I program. The survey also shows that the majority of the agencies surveyed does not have separate stormwater user charges but is funded by other sources including general funds, water, sewer, etc. 0 BLACK&VEATCH 27 April 12, 2001 - DRAFT