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Home My WebLink About06/19/2001, 3 - ADOPTION OF 2001-03 FINANCIAL PLAN councit M6,D j agenda nepont .13 CITY O F SAN LUIS O B I S P O FROM: Ken Hampian, City Administrative Officer Bill Statler, Director of Finance SUBJECT: ADOPTION OF 2001-03 FINANCIAL PLAN CAO RECOMMENDATION 1. Adopt a resolution approving the 2001-03 Financial Plan and 2001-02 Budget. 2. Authorize the Mayor to vote for the approval of an amendment to the League of California Cities' bylaws on the City's behalf that will implement the "Grassroots Network" legislative advocacy program. DISCUSSION Overview After eleven Council workshops and hearings beginning in October of 2000, the 2001-03 Financial Plan is ready for adoption. Stepping back from the many details in our budget, it is appropriate to ask ourselves: what have we accomplished over the past nine months? The answer is: a great deal. We have prepared a fiscally prudent plan that will guide our efforts over the next two years in delivering important services to our community, maintaining and improving City facilities, and embarking on new initiatives that will make San Luis Obispo an even better place to live, work and visit. We have prepared a Financial Plan that: 1. Meaningfully Invited Community Involvement, and Responds to What We Heard. Through a number of vehicles, including the community forum preceding Council goal- setting, the informal-but-revealing community survey, and the many budget workshops and hearings we have held since then, we have heard from literally hundreds of people in the community about what they believe are important priorities for the City. High on this list is maintaining our streets, preserving open space, developing long term water supplies, mitigating traffic, developing more downtown parking, improving recreational opportunities for our youth and seniors, developing bikeways, enhancing our neighborhoods and improving public safety. The 2001-03 Financial Plan is responsive to all of these interests. 2. Responds to Council Goal-Setting. As shown in the sidebar below, the Council's Major City Goals closely mirror those expressed by the community during the budget process. All 14 of the Major City Goals adopted by the Council are reflected in the Financial Plan based on the detailed work programs approved by the Council in April. Additionally, there are focused new initiatives in virtually all areas of our operations. J-1 Council Agenda Report: Adoption of 2001-03 Financial Plan Page 2 3. Is Fiscally Prudent. While there are a number of financial uncertainties and challenges ahead of us, the fact remains that the Council will adopt a balanced budget that retains our fiscal strength: operating revenues fully cover operating costs; the General Fund balance is Major City Goals maintained at policy levels; and our debt obligations remain low by national standards. • Water Supply Another form of "balance" we have achieved is • Street and Sidewalk Maintenance between maintaining and enhancing City • Los Osos Valley Road services, maintaining and improving current Improvements public facilities, and planning for new ones. • Flood Protection • Railroad Recreational Trail We have done all this within strategies that . Downtown Transportation Center: recognize the uncertainties of the current North Area Regional Facility economic environment, energy outlook and . Parking and Access Advisory Body State budget process. For example, for the first . Athletic Fields time in recent memory, we have created a "CIP . Recreation Center Remodel: reserve," funded in the amount of 467,000 in Community/Senior Center 2001-03. . Cultural Services In short, we can take pride in adopting a budget that ' Housing sets forth an ambitious work program that ' Open Space Preservation accomplishes important community goals in a ° Civic Offices fiscally responsible way. We can take pride in a • Maintenance of Basic Services budget process—that while technically rigorous—is much more than just a financial review process: one that links what we want to accomplish for our community over the next two years with the resources necessary to do so. We can take pride in a budget process that meaningfully involves the community, and where Council goal-setting drives the process, not follows it. We can take pride in a process that looks to the future by setting operational plans for two years, and capital facility plans for four years. In summary, we can take pride in completing an intensive planning process that will set our course for the next two years. Changes to the Preliminary Financial Plan General Fund Based on Council direction from the workshops and public hearings on May 22, May 24, May 29 and June 5, the following summarizes General Fund expenditure changes from the Preliminary Financial Plan: Council Agenda Report: Adoption of 2001-03 Financial Plan Page 3 General Fund Financial Plan Revisions: 2001-03 002002-03 Total Operating Programs Landscape Maintenance Contracts 24,400 24,900 49,300 HRC Grants-in-Aid 10,000 10,000 20,000 Jack House Promotions 5,000 5,000 10,000 Planning Commission/ARC Compensation 12,800 12,800 25,600 Cuesta Student Housing Study 10,000 10,000 Capital ImrovementPlan Mission Plaza: Broad Street Closure 75,000 75,000 Public Art 700 700 Addition to CIP Reserve 17,000 17,000 Total $ 79,200 $ 128,400 $ 207,600 As discussed at the June 5 meeting, based on the use of carryover balances and a small revision in the sales growth rate estimate in the current year (5.5% versus 5.0% in 2000-01), these changes can be funded and still maintain a projected fund balance at the end of 2001-03 that meets our policy minimum (20% of operating expenditures). Other Financial Plan Revisions In addition to including the budget changes described above in the final Financial Plan document, we will also make the "narrative changes" approved by the Council on the June 5 meeting. Most of those were those were previously identified in the June 5 agenda report. However, three revisions were initiated at the June 5 meeting to Appendix B: Capital Improvement Plan: Prado Road Bridge and Roadway Widening. Revise the second Project Objective as follows: 1. Accommodate additional traffic on Prado Road after completion of its extension to Broad Street(Highway 227). LOVR Interchange Improvements. Revise the first and fourth Project Objectives as follows: 2. Reduce traffic congestion at the Los Osos Valley Road/Calle JoaquinJHighway 101 interchange. 3. Evaluate flood carrying capacity in conjunction with the Flood Management Plan. Authorization to Support the League's Proposed Grassroots Network As discussed previously, the Financial Plan includes the City's share of the League's proposed Grassroots Network program ($6,200 in 2001-02 and $4,800 in 2002-03). Implementing this new program requires approval an amendment to the League's bylaws by a majority of League members. Accordingly, we recommend that the Council authorize the Mayor to vote for the approval of this amendment on the City's behalf. J-3 Council Agenda Report: Adoption of 2001-03 Financial Plan Page 4 FINANCIAL PLAN IMPLEMENTATION Next Steps Final Documents After Council adoption of the Financial Plan, we will prepare and distribute a final version reflecting all approved changes from the Preliminary Financial Plan. Based on these changes, we will also revise and distribute a final version of Appendix B: Capital Improvement Plan. Additionally, we will prepare a Budget-in-Brief that highlights the City's budget process, key budget features, major City goals and basic "budget facts." This budget summary is widely distributed and is published on the City's web site. Ongoing Monitoring Adoption of the Financial Plan is the beginning—not the end—of a continuous financial management process. Ongoing monitoring efforts include: 1. Interim Financial Reports. On-line access to "up-to-date" financial information is provided to staff throughout the organization. Additionally, comprehensive financial reports are prepared monthly to monitor the City's fiscal condition, and more formal reports are issued to the Council on a quarterly basis. These are complemented by special reports such as the quarterly Sales Tax Newsletter and Monthly Investment Report. 2. Goal Status Reports. Formal reports are provided to the Council on status of Major City Goals, other important objectives and CIP projects. These are supplemented by ongoing updates through Agenda reports, Council Notes and other special reports. 3. Mid-Year Budget Reviews. The Council formally reviews the City's financial condition and makes "course corrections" as needed six months after the beginning of each fiscal year. 4. Financial Plan Supplement for 2002-03. While we prepare a two-year Financial Plan, appropriations are still made annually. As such, we will return to the Council in June 2002 for formal approval of the 2002-03 Budget. However, these "second year" appropriations will be based on the foundation developed during the two-year planning and budgetary process. In short, the Supplement is much like our mid-year budget reviews, and focuses on changes since adoption of the Financial Plan. 5. Comprehensive Annual Financial Report. This year-end report shows the final results of the City's financial operations for all funds. It includes audited financial statements by the City's independent certified public accountant as well as a comprehensive "transmittal memorandum" highlighting key trends and findings about the City's financial condition. Budget Process Review Once the dust has settled for a few months on this Financial Plan process, we will review areas where it went well, and areas where we can improve in the future. As discussed during this 3-4 I Council Agenda Report: Adoption of 2001-03 Financial Plan Page 5 year's process, one area that we already know will require added attention is a meaningful opportunity for the Council and community to review and discuss the status of longer term goals, policies and plans in laying a better foundation for the goal-setting process. After completing this review, we will return to the Council with recommendations for the 2003-05 Financial Plan process. ATTACffi4ENT Resolution approving the 2001-03 Financial Plan and 2001-02 Budget G:Budget Folders/2001-03 Financial Plan/Prcliminary Budget/Agenda Reports/Adoption of 2001-03 Financial Plan 3-� RESOLUTION NO. (2001 SERIES) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO APPROVING THE 2001-03 FINANCIAL PLAN AND 2001-02 BUDGET WHEREAS, the City Administrative Officer has submitted the Preliminary 2001-03 Financial Plan to Council for their review and consideration in accordance with budget policies and objectives established by the Council; and WHEREAS, the final 2001-03 Financial Plan is based upon extensive public comment and direction of the Council after scheduled budget study sessions and public hearings. NOW, THEREFORE, be it resolved by the Council of the City of San Luis Obispo that the 2001-03 Financial Plan is hereby approved and that the operating, debt service and capital improvement plan budget for the fiscal year beginning July 1, 2001 and ending June 30, 2002 is hereby adopted. On motion of seconded by and on the following roll call vote: AYES: NOTE: ABSENT: the foregoing Resolution was passed and adopted this day of June, 2001. Mayor Allen Settle ATTEST: Lee Price, City Clerk APPROVED: b. J ge n, dty Attorney �j- 6D Jun 19 01 09: 32a CYnNEY HOLCOMB B05la 365 AGENDA p. 1 -SATE `l D I ITEM#� r ,U ® �; RQ� - Residents for Quality Neighborhoods P.O. Box 12604 • Sa Luis Obispo, CA 93406 NCIL ❑ CCD CSIR r C Ik✓FIN DIR A ❑ FIRE CHIEF RNEY ❑ PW DIR u3 LERWORIG ❑ POLICE CHF June 19, 2001 �&- T ❑ REC OIR 13 UTIL DIR Faxed to: 781-7109 ❑ HR DIR Re: Adoption of 2001-03 Financial Plan and Budget, Item #3, Date: 6/19/01 Honorable Mayor and Members of the City Council, We thank you very much for including in the 2001-03 budget the following items which will have a direct benefit to our neighborhoods: 1. Expanding the Student Neighborhood Assistance Program (Snap) from 3, 000 to 6,300 hours of service per year. 2. Adding a Neighborhood Services Technician position in 2002-03. 3. Expenditure of $10;000.00 to the Cooperative Student Housing Study with Cuesta College. We would also like to acknowledge the impressive efforts of all our City staff in dealing with the complexities of preparing this budget, especially in light of an uncertain economic future, and to you for your very thorough and comprehensive review of it. It is most definitely a job well done! Again, thank you for you continued support of our neighborhoods. Sincerely yours. Cydney Holcomb ` J RECEIVED Chairperson, RONF JUN 1 2001 SLO CITY COUNCIL