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HomeMy WebLinkAbout04/10/2003, 2 - MAJOR CITY GOAL WORK PROGRAMS FOR 2003-05 C counat M�m°� 4-10-03 acEnaa REpopm 'm.N. CITY O F SAN LUIS OBISPO FROM: Ken Hampian, City Administrative Officer Bill Statler, Director of Finance SUBJECT: MAJOR CITY GOAL WORK PROGRAMS FOR 2003-05 CAO RECOMMENDATION Review, modify as desired and tentatively approve major City goal work programs for 2003-05. DISCUSSION Background At the February 1, 2003 budget workshop, the Council established twenty-one goals organized into two priority categories: major City goals and other important objectives. 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 and funding sources for these programs, and highlights proposed "objective" revisions for two of the Major City Goals: Housing and South Broad Street Corridor Plan. The individual work programs that follow the Introduction provide a forthright evaluation of challenges we will face in achieving these goals, likely implementation costs and funding sources, financing constraints and realistic timeframes. In preparing these work programs, Department Heads were instructed to be as resourceful as possible in advancing the goal without the need for significant General Fund appropriations beyond those already anticipated in the five-year fiscal forecast. 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 2003-05 Financial Plan in its entirety in June 2003, 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 a - i O 1J Major City Goal Work Programs for 2003-05 Page 2 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, 2003. Key next steps in the budget review process are: BudgetDate 1. Preliminary Financial Plan issuance My 2. Budget workshop: Financial Plan overview and General Fund operating programs May 22 3. Budget workshop: General Fund CIP projects May 27 4. Budget workshop: Enterprise Fund programs,projects-and rates May 29 5. Continued budget review June 3 6. Continued budget review and budget adoption June 17 FISCAL UVWACT 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. SUMMARY 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 2003-05 G:Budget Folders/2003-05 Financial Plan/Major City Goal Work Programs/Agenda Report—April 10,2003 2003=05 Financial Plan MAJOR CITY GOAL WORK PROGRAMS April 10, 2003 �ulli�l:�l,�ii i;Il�iiilll t ,,1 ,11 1,, , c��y o� san tuis oB� s o fi p � - 3 2003-05 Financial Plan MAJOR CITY GOAL WORK PROGRAMS Table of Contents INTRODUCTION MAJOR CITY GOAL WORK PROGRAMS Overview 1 Public Utilities Background 1 Organization: Goal Priorities 2 Long-Term Water Supply 8 Content 2 Objective Revisions 2 Transportation Long-Term Fiscal Health 3 Streets and Sidewalk Maintenance 12 Next Steps 3 Los Osos Valley Road Interchange 15 Summary 3 Bikeway Improvements:.Railroad Safety Trail 18 SUMMARY OF COUNCIL GOALS Leisure,Cultural & Social Services Therapy Pool 20 . Major City Goals 5 Other Important Objectives 6 Community Development MAJOR CITY GOALS COST SUMMARY Housing 23 Neighborhood Wellness 27 South Broad Street Corridor Plan 32 Downtown Improvements: Monterey Plaza 36 Cost and Funding Summary 7 Economic Development: TOT 38 Economic Development: Sales Tax 41 General Government Long-Term Fiscal Health 44 COUNCIL •A INTRODUCTION OVERVIEW Council hopes to achieve with each goal over the next two years. Accordingly, the purpose of each work program is to: Major City goals.for 2003-05 and the related work programs reflect a very ambitious action plan for the 1. Define and scope the adopted goal. next two years, resulting in General Fund operating 2. Ensure that there is a clear understanding of the and capital costs of about $3.5 million over the next means selected to pursue the goal. two years. However, as summarized on page 7, over 90% of this ($3.2 million) is for street and sidewalk 3. Convert the general goal into specific action maintenance—and this reflects a decrease of $1.4 steps so we can measure progress in achieving it. million from 2001-03 levels. This is especially important in the case of objectives As the Council is aware, we are facing our toughest where fully achieving the goal is likely to extend fiscal outlook in many years. However,based on the well beyond the two-year Financial Plan period. proposed "Strategic Budget Direction" that is also However, we can measure progress—and our being submitted to the Council at the April 10, 2003 success in accomplishing the goal—by clearly budget workshop, with its focus on adequately defining the specific actions we plan to undertake maintaining what we already have and preserving over the next two years. essential services, we should be able to fund the proposed work programs. Conceptual Approval of the Work Programs. Tentative Council approval of the work programs at BACKGROUND this stage is not formal approval of either the goal or the budget for it. This will not occur until the Council approves the 2003-05 Financial Plan in its The purpose of the City's Financial Plan process is entirety in June 2003, after extensive workshops and to link the most important, highest priority things for public hearings. us to achieve for our community over the next two years with the resources necessary to do them. Other Program Objectives. The Preliminary Financial Plan (which we plan to issue on May 15, For this reason, the City begins its budget process 2003) will also include the "other important with Council goal-setting. This follows an extensive objectives" set by the Council as part of the goal- effort to involve advisory bodies and the community setting process. It will also include objectives in this process. It also follows consideration of a proposed by the staff for improving the delivery of number of analytical reports such as the General City services. These are different from Council- Fund Five-Year Fiscal Forecast and comprehensive initiated goals in two important ways: updates on the status of long-term plans and policies, current major City goals and capital projects. 1. Council goals are generally focused on objectives that can only be successfully achieved The accompanying work programs have been through Council leadership, support and prepared based on the Major City Goals set by the commitment; program objectives proposed by Council at an all-day workshop held on February 1, staff are typically more internally focused on 2003. improving day-to-day operations, and can usually be achieved through staff leadership, Purpose of the Work Programs. The goals set by support and commitment. the Council drive the budget preparation process. 2. Achieving Council goals has a higher resource However, before the staff can build the Preliminary Financial Plan around Council goals, it is essential priority. that we have a clear understanding of what the COUNCIL • ► INTRODUCTION Each of the 73 operating programs presented in the general government. Each work program provides Preliminary Financial Plan will clearly identify the following information: major City goals, other Council goals and other program objectives. 1. Objective. ORGANIZATION• GOAL PRIORITIES 2. Discussion, including the proposed workscope, related work accomplished in the past and challenges we will face in achieving the goal. The goals set by the Council in February 2003 are 3. Action plan detailing specific tasks and schedule organized into the following priorities: for the next two years. When applicable, likely "carryover and spin-off" tasks beyond the next 1. Major City Goals. These represent the most two years are also discussed. important, highest priority goals for the City to 4. Responsible department. accomplish over the next two years,and as such, resources to accomplish them should be 5. Financial and staff resources required to achieve included in the 2003-05 Financial Plan. the goal. In general, goals in this category represent new 6. General Fund revenue potential, if any. initiatives, or the continuation of existing ones 7. Outcome—final work product at the end of the where significant additional resources are likely next two years. to be required. If the work program approved by the Council for a Major City Goal is not OBJECTIVE REVISIONS included in the CAO's Preliminary Financial Plan, compelling reasons and justification must be provided as to why resources could not be In general, we have retained objectives as originally made available to achieve this goal. adopted by the Council in February 2003. In a few cases, we have made very minor changes for In short,these are"must fund"objectives. improved clarity and grammar, and have no affect on the Council's intent. In two cases, however, we 2. Other Important Objectives. Goals in this are recommending changes in the objective that are category are also important for the City to more than just "wordsmithing:" Housing and the accomplish over the next two years. In general, South Broad Street Corridor Plan. goals in this category reflect the continuation of current goals, or new initiatives that are not Housing. Along with other tasks (to which we are likely to have significant General Fund resource not proposing any changes), the objective as requirements. originally adopted by the Council includes: continue to aggressively advocate that Cal Poly adhere to its As approved by the Council,detailed work programs own master plan, including adequate on-campus have only been prepared for the Major City Goals; student housing. the other goals will be presented to the Council in the context of the Preliminary Financial Plan. Given Cal Poly's recent plans to add 2,750 beds to on-campus student housing, we recommend CONTENT changing this to: encourage and support Cal Poly's efforts to provide more on-campus housing consistent with their adopted master plan for The work programs are organized by functional housing and enrollment. area: public utilities, transportation, leisure, cultural & social services, community development and South Broad Street Corridor Plan. The objective as originally adopted by the Council is: Create a -2- 02 LP COUNCIL •A INTRODUCTION neighborhood concept plan for the South Broad Accomplishing the goals outlined below will require Street area from South Street to Orcutt. a continued commitment to protecting the City's long-term fiscal health. Given the significant fiscal As reflected in the proposed work program, we challenges facing us based on the recently prepared recommend a two-step approach in accomplishing five-year forecast, this will mean developing a this goal: fust, adopting General Plan and rezoning comprehensive strategy for preserving essential amendments to create a mixed-use residential services and adequately maintaining existing neighborhood along this corridor in conjunction with facilities and infrastructure, while at the same time the Housing Element; and following this, preparing protecting the City's fiscal health. a more detailed neighborhood concept plan addressing design and circulation issues: The first Given the importance of preparing this strategy, the step would be accomplished during 2003-05; unless Council directed that we also prepare a work we are successful in attracting grant funding, the program for the "preamble" along with the Major second step would not begin until 2005-07. City Goals. We have done so. And in the interest of clarity, we recommend simply including the We recommend this change for two reasons: "preamble" with the other goals, with the following objective: 1. We believe that separating this goal into two discrete steps will be a more effective way of Develop a comprehensive strategy for preserving addressing the issues that are likely to arise in essential services, adequately maintaining existing making these changes. Moreover, as discussed facilities and infrastructure, and protecting the in the work program, making the land use City's fiscal health. changes in conjunction with the Housing Element update is a more cost effective NEXT STEPS approach. 2. And given our current fiscal situation and In-depth reviews of departmental budget requests unlikely success al obtaining grant funds, we do and revenue projections are currently underway. not recommend allocating over $200,000 from the General Fund for consultant services that Once these are completed and the Council has.approved the goal work programs, we plan to would be required in 2003-05 to take a faster finalize budget recommendations and issue the approach. Preliminary Financial Plan on May 15,2003. Other options are fully discussed in the work SUMMARY program. However, based on our proposed two-step approach, we recommend the following two-year objective for this goal: There are no direct fiscal impacts associated with Adopt General Plan and zoning amendments to tentatively approving the major City goal work create a mixed-use residential neighborhood along programs. Formal approval of the work programs the South Broad Street corridor from South Street to will not occur until the Council approves the Orcutt Road and seek grant funding to create a Financial Plan in its entirety in June 2003, following neighborhood concept plan for the area. issuance of the Preliminary Financial Plan and extensive budget workshops and hearings. LONG-TERM FISCAL HEALTH Nonetheless, this is a very important step in the process: with this direction, staff will be certain we In adopting Major City Goals, the Council also understand the Council's intent, and we can prepare approved the following"pre-amble:" the Preliminary Financial Plan accordingly. -3- i1 _ COUNCIL-GO-ALS INTRODUCTION Conclusion. 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. -4- a �g ' COUNCIL • SUMMARY OF MAJOR CITY GOALS AND OTHER IMPORTANT OBJECTIVES MAJOR CITY GOALS 7. Neighborhood Wellness. Improve Goals in this category represent new initiatives or neighborhoods and neighborhood involvement the continuation of existing ones where significant by continuing to implement the neighborhood additional resources are likely to be required wellness program, including consideration of a rental inspection ordinance. Public Utilities 8. South .Broad Street Corridor Plan. Adopt 1. Long-Term Water Supply. Continue aggressive General Plan and zoning amendments to create a efforts to develop permanent, reliable water mixed-use residential neighborhood along the South Broad Street corridor from South Street to sources to meet General Plan needs, including Orcutt Road and seek grant funding to create a all options under current Council policy. neighborhood concept plan for the area. Transportation 9. Downtown Improvements: Monterey Plaza. Pursue the creation of a "Monterey Plaza" for 2. Street and Sidewalk Maintenance. Continue civic gatherings and passive recreation, maintenance of streets and sidewalks at a dependent upon the Copeland project. moderate level. 10. Economic Development: Transient Occupancy 3. LOVRIHighway 101 Improvements. Continue Tax. Encourage and promote projects that will working towards improvements at the Los Osos increase lodging and conference facilities in Valley Road/Highway 101 interchange. order to generate additional transient occupancy tax revenues. 4. Bikeway Improvements._ Railroad Safety Trail. Acquire right-of-way and property for extension 11. Economic Development. Sales Tax. Encourage of the Railroad Safety Trail from the Jennifer and promote retail projects that will increase Street Bridge to Cal Poly. sales tax revenues. Leisure,Cultural and Social Services General Government 5. Therapy Pool, Pursue development of a warm 12. Long-Term Fiscal Health. Develop a water therapy pool at the Swim Center through a comprehensive strategy for preserving essential financing program for its construction and services, adequately maintaining existing ongoing operation that does not use general- facilities and infrastructure, and protecting the purpose revenues. City's fiscal health. Community Development 6. Housing. Adopt a housing element that expands. housing opportunities for very low, low and moderate income households, preserves and enhances residential neighborhoods and complies with state laws including CEQA; and encourage and support Cal Poly's efforts to provide more on-campus housing consistent with their adopted master plan for housing and enrollment. -5- ��� COUNCIL •A SUMMARY OF MAJOR CITY GOALS AND OTHER IMPORTANT OBJECTIVES OTHER UAPORTANT OBJECTIVES 21. Downtown Improvements: Cultural Center Development. Encourage development of a Goals in this category are also important for the Cultural Center (Art Center, Mission Museum, City to accomplish over the next two years. In Historical Museum, Little Theater, Children's general, they reflect the continuation of current Museum, etc.) in the Mission Plaza extension goals, or new initiatives that are not likely to have area as illustrated in the Downtown Concept significant General Fund resource requirements. Plan, and support this effort through the existing Partnership Policy where possible. Transportation 13. Laurel LanelOrcuttBullock Realignment. Complete the realignment of Laurel Lane/OrcuttBullock Streets. 14. Santa Barbara Street Widening. Complete the existing widening project for Santa Barbara Street from Highway 227/Broad Street to Roundhouse.. 15. Waterways Management Plan Implementation Program. Upon completion of the Waterways Management Plan, adopt an implementation program. 16. Palm-Nipomo Parking Structure Plans. Complete an environmental assessment, preliminary studies and evaluation of options for a new parking structure at Palm and Nipomo Streets per the Conceptual Physical Plan for the City's Center. 17. Short-Range Transit Plan. Implement the Short-Range Transit Plan. Community Development 18. Airport Area Annexation. Annex the Airport Area. 19. Dalidio Property Annexation. Annex the Dalidio property. 20. Auto Center Expansion. Continue to explore the possibility of expanding Auto Center sites via annexation of the McBride and "gap" properties. -6- ^ 10 MAJOR CITY GOALS COST AND FUNDING SUMMARY The following summarizes operating program and capital improvement plan (CIP) costs to achieve the major City goal work programs and proposed funding sources. Cost Summary By Goal Operating Programs Capital Improvement Plan 2003-04 2004-05 2003-04 200405. 2005-06 2006-07 Long-Term Water Supply 69,300 69,300 150,000 250,000 2,050,000 Street and Sidewalk Maintenance 1,585,000 1,630,800 1,677,900 1,726,400 Los Osos Valley Road Interchange 150,000 Railroad.Safety Trail 170,000 Therapy Pool 25,000 200,000 Housing Neighborhood Wellness 67,300 70,800 South Broad Street Corridor Plan Monterey Plaza 75,000 Economic Development:TOT 15,000 Economic Development:Sales Tax 20,000 5,000 Lon -Term Fiscal Health 37,500 Total 209,100 220100 1,760,000 2,400,800 3,727,900 1 1,726,400 Cost Summary By Funding Source Operating Programs Capital Improvement Plan 2003-04 200405 2003-04 2004-05 1 2005-06 2006-07 General Fund 139,800 150,800 1,585,000 1,630,800 1,677,900 1,726,400 Transportation Impact Fees 320,000 Water Fund 69,300 69,300 150,000 250,000 2,050,000 Grants 25,000 200,000 Total 1 209,100 220,100 h1,760,000 2,400,800 3,727,900 1,726,400 -7- C2, 1 1 LONG TERM WATER SUPPLY OBJECTIVE Continue aggressive efforts to develop permanent, reliable water supplies to meet City General Plan needs, including all options consistent with Council policy. DISCUSSION Background The City has been aggressively pursuing the development of additional water supplies. In order to continue with these efforts, consistent with Council policy, Staff will most aggressively pursue those water supply options identified as Tier 1 projects (highest priority) by the Council in June 2002. The Tier 1 projects include water reuse, groundwater development, and additional conservation. If successful with all of the Tier 1 project options, it is possible that the City could satisfy its General Plan objectives through these projects alone. As required and as resources permit, the City will also continue its review and analysis of Tier 2 and 3 project options, Desalination,the Salinas Reservoir Expansion and the Nacimiento Pipeline. Tier 1 Projects 1. Water Reuse. Work completed to date on the Water Reuse Project includes preliminary design, environmental review, design and financing. The Water Reuse Project was advertised for bid on February 8, 2003 and construction of the backbone distribution system and treatment facility improvements will begin by the Summer 2003. Delivery of recycled water is expected to begin in late 2004. Remaining work for the Water Reuse Project includes completion of a Water Reuse System Master Plan to identify the future incremental expansion of the system, development of additional user and/or exchange agreements, design and implementation of user site modifications to accommodate the use of recycled water, and all activities associated with the completion of construction. 2. Groundwater. Work completed to date on groundwater development.includes analysis of the increased yield potential of the San Luis Obispo Groundwater Basin, exploratory well drilling at the southern end of the city, and a preliminary analysis of the opportunities for exchange of recycled water for groundwater currently being used by agriculture. Additionally, a preliminary water quality analysis of the basin and an analysis of the treatment options and the impacts associated with treatment have been completed. Remaining work will include seeking proposals to complete a preliminary design of the pumping and treatment facilities, environmental review,development of plans and specifications for construction, financing and construction of the required facilities. 3. Water Conservation. The City currently has an effective and aggressive water conservation program. As a Tier 1 program, staff will be developing an expanded conservation program aimed at landscape water use and non-residential water use. An analysis of the potential yield from these additional conservation programs has been completed and presented to Council on January 30, 2003. This analysis identified a potential yield of about 340 acre feet per year of water from implementation of these new conservation measures, which are estimated to cost $69,000 annually. A detailed monitoring and verification program will be developed and implemented in order to evaluate the success and yield of the new conservation programs so that the additional safe annual yield can be identified and added to the City's available water supplies, and reported to Council annually. i I -MAJOR GOALS LONG TERM WATER SUPPLY Tier 2 Projects 4. Desalination. This is currently the only Tier 2 project. To date, only preliminary analysis and discussions have occurred in regards to development of a desalination water supply project for the City. As time and resources permit, staff will continue to investigate and evaluate all opportunities for possible development of a desalination project. This may include participation in a project with other agencies such as Morro Bay or Duke Energy, contracting with a private supplier, or development of a City owned and operated facility. Staff will report findings of the opportunities and constraints for the development of a desalination project as information is developed,or at least annually with the Water Resources Status Report. Tier 3 Projects 5. Salinas Reservoir Expansion. Unless specifically directed by Council, no work is planned for the Salinas Reservoir Expansion project for this next two-year period. To date, the water rights permit time extension has been received, seismic analysis of the dam structure completed and an Environmental Impact Report (EIR) has been completed and certified, but the notice of completion has not been filed and is pending Council approval of the project. Should the City decide to proceed with the project, the EIR would require updating and recirculation for public review, property transfer would have to be secured from the Federal government, and engineering design and construction would all have to be completed by the year 2010 when the City's water rights permit time extension for completion of the project expires. 6. Nacimiento Pipeline. This project is being developed by the County of San Luis Obispo. The City continues to be a participant in the project along with numerous other agencies. A revised draft EIR will be circulated for comment and is expected to be certified by the County Board of Supervisors in Fall 2003. Final reservation agreements for the project are proposed to be presented to the participants for execution in Fall 2003. Staff will continue to work with the County as a potential participant and will present an analysis of the project and recommendation to the Council with the presentation of the final reservation agreements, hopefully in the Fall 2003. All activities associated with the current phase of the Nacimiento project are being funded by the County through a special project account. Challenges We Will Face in Achieving this Goal Development of any new water supply project will be faced with significant technical, regulatory, environmental and political challenges. The Tier 1 projects represent perhaps the most feasible of the options available. Water Reuse. This project has been through the majority of its most difficult challenges after nearly 12 years of environmental review and design. Compliance with the regulatory aspects of the project and continued mitigation monitoring will consume staff time as we construct and implement the project. Public opinion can also be a significant challenge to a water reuse project and staff has maintained an ongoing public information/education program in order to maintain public acceptance of the project. Groundwater Development. This represents a significant challenge in achieving,maximum potential yield from the small San Luis Obispo Groundwater Basin without causing a recurrence of ground subsidence or impacting the surface flows in San Luis Obispo Creek. Staff is seeking to develop offsetting uses in the basin through exchange of recycled water with agricultural groundwater pumpers to create a "no net impact" scenario in the operation of the basin. Additionally, the treatment of the contaminated groundwater for removal and disposal of Perchloroethylene(PCE)and nitrate will present some additional significant challenges. Conservation Program Implementation. This presents perhaps the fewest obstacles of our Tier 1 options, but will require ongoing programmatic effort to sustain any additional yield as the proposed programs center around -9- a, 13 f' GOALSMAJOR CITY LONG TERM WATER SUPPLY education and behavior modification rather than hardware retrofit. Ongoing monitoring of the program's success will also present a significant challenge. Desalination. As a Tier 2 project,desalination is faced with the full range of environmental, regulatory, technical and political challenges. Discussions with Morro Bay regarding the shared use of their desalination facility have not progressed as Morro Bay's long term plans for the facility do not include its continuous operation. Other options for desalination will be reviewed as a part of this goal but we should be realistic in considering the significant challenges facing the actual development of a project. Salinas Reservoir Expansion and Nacimiento Pipeline. These Tier 3 projects face significant challenges. The Nacimiento Project faces perhaps its most significant challenge in the cost of the project and the fragile coalition of participants needed to financially support the project. The Nacimiento project also still needs to complete its environmental review processes. The Salinas Project is encumbered with significant environmental impacts as well as institutional issues surrounding the transfer of ownership from the federal government to a local agency, and legal challenges by downstream water interests. These two projects will require significant commitment by the City and others to see them through to completion, if the decision is made to move forward with either as a primary supply option. ACTION PLAN e. - Water Reuse I. Complete design of required user site modifications. 12-03 2. Complete Water Reuse Master Plan defining the logical expansion of the water reuse system 11-04 and include funding for associated CIP in the 2005-07 Financial Plan. 3. Complete construction of the water reuse project backbone pipeline system,Water 12-04 Reclamation Facility improvements and user site modifications. Ground Water bevelo-went 4. Issue RFP for groundwater development and treatment system feasibility analysis. 12-03 5. Select engineer and begin design. 3-04 6. Complete design,invite bids for construction and award contract. (Construction is scheduled 6-05 for completion by June 2006). Conservation 7. Develop program elements and required informational and programmatic resources. 12-03 8. Develop monitoring and evaluation program. 3-04 9. Fully implement landscape and non-residential program. 4-04 10. Present program evaluation report to Council_. 6-05 Nacimiento Pipeline 11. Present project reservation agreements and full project information to Council for 1-04 consideration. Salinas Reservoir E �ansion 12. Review options and issues with Council for consideration of possible project. 6-04 RESPONSIBLE DEPARTMENT The Utilities Department will be responsible for achieving this goal and completion of the identified action steps. The majority of work associated with the Nacimiento Pipeline Project is being completed by the County of San 10 CJ - i i MAJOR CITY GOALS LONG TERM WATER SUPPLY Luis Obispo and their consultants. Utilities staff will continue to work closely with the County on the development of the Nacimiento Pipeline Project. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL All costs are funded through the Water Fund as follows: Tier 1 Projects 1. Water Reuse. This project is a currently budgeted and funded project. It has a total projected capital cost, including environmental mitigation and design, of $18 million. A staffing analysis for the Water Reuse Project along with the increased operating program costs will be presented to Council and included in the 2005-07 Financial Plan. 2. Groundwater. Developing additional yield from groundwater is estimated to cost $150,000 in 2003-04 for study, $250,000 in 2004-05 for design and $2,050,000 in 2005-06 for construction. Operating program increases associated with groundwater development will be identified with the design of the treatment and pumping facilities and will be presented to Council when fully defined and included in the 2005-07 Financial Plan. 3. Expanded Conservation Program. Operating costs in developing and implementing the expanded water conservation programs are estimated at $69,300 per year for temporary staffing (28,300), rebate incentives ($20,000), preparation and distribution of educational materials ($15,000) and other services and supplies ($6,000). Tier 2 and 3 Projects Analysis of these project options will be completed by existing staff on a time available basis. GENERAL FUND REVENUE POTENTIAL Achieving this goal is essential to the ongoing financial well being of the City and the General Fund as achieving many of our General Plan goals are contingent on the City's having.adequate water resources. OUTCOME—FINAL WORK PRODUCT It is possible that the City will be able to achieve sufficient water resources to meet the objectives of the General Plan through the completion and full implementation of the Tier 1 projects. By the end of the 2003-05 Financial Plan period, it is projected that we will have: 1. Constructed and implemented the initial stages of the water reuse project. 2. Completed the Reuse Master Plan and identified projects for the extension of the distribution system; sited and be constructing a treatment facility for groundwater treatment and identified additional safe yield to be obtained from groundwater. 3. Implemented an expanded water conservation program aimed at landscape water use and non-residential customers and completed fust year monitoring and evaluation of the expanded conservation program yield. 4. Reviewed additional information regarding the possibility of developing a desalination project. 5. Made a decision relative to our participation in the Nacimiento Pipeline Project. MAJOR CITY GOALS STREET AND SIDEWALK MAINTENANCE OBJECTIVE Continue maintenance of streets and sidewalks at a moderate level. DISCUSSION Background Pavement Maintenance. In 1998, the City adopted a new Pavement Management Plan (PMP), which sets forth a comprehensive maintenance program of seal coating, overlays and reconstruction. Ori a scale of 0 to 100, the PMP adopts a "Pavement Condition Index" (PCI) goal for the City's overall street system of 80. Since its adoption, the City has closely followed the PMP, and by June 30, 2003, we will have provided appropriate maintenance on three-fourths of the City's streets. This has resulted in raising the overall PCI from 68 to 74—a significant improvement in the five years since its adoption. Due to budget considerations, we recommend reducing PMP funding by about $1.3 million annually. While this reduction will have the effect of delaying the Council's goal of achieving a citywide PCI of 80, the remaining funding (about $1.5 million annually) will maintain the current PCI at 74, without abandoning the City's commitment to residents and businesses in the remaining 25% of the City awaiting the maintenance of their areas. At about $1.5 million annually, this will be less than the average of$2.0 million per year we actually spent from the General Fund during 1998-2003 for this purpose. However, it will be significantly more than the $790,000 annually allocated for this purpose in 1995-97 before adoption of the PMP in 1998. Sidewalks. The sidewalk program for 2001-03 included maintenance of existing sidewalks and installation of new sidewalks. It consisted of: 1. City staff responding to individual isolated sidewalk problems (including curb and gutters) by grinding, modifying or replacing the damaged facilities. 2. An annual contract sidewalk replacement project of$60,000 in high pedestrian use areas associated with the pavement management program. 3. New sidewalk construction of $100,000 from the General Fund annually in conjunction with designated pavement maintenance areas. Supplementing this, the City 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 was$316,000 in 2001-03. It should be noted that prior to 1999-01, no General Fund revenues were allocated on a routine basis for new sidewalks: for this purpose, the City relied upon a mandatory assessment approach that is no longer allowed under Proposition 218. For 1999-01, the City budgeted $75,000 annually from the General Fund for new sidewalk installation, increasing to$100,000 annually in 2001-03. Due to budget considerations and a strategic focus on maintaining what we already have, we recommend discontinuing installation of new sidewalks in 2003-05. - 12- 11.P MAJOR • STREET AND SIDEWALK MAINTENANCE 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 6 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 Replacement and Repair. 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 and claims. General Fund limitations prevent this program from ever completely catching up with the inventory of areas needing work and thus the Council has adopted a policy that directs work to areas of high pedestrian activity. Each year the City uses a small amount of available Community Development Block Grant funding to remove existing sidewalk at street corners and replace it with current ADA accessible sidewalk in order to make our sidewalks accessible to disabled persons. 3. Continued General Fund Revenue Shortfalls. If State takeaways or budget problems persist, then further reductions in the street reconstruction-resurfacing budget may be required. 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 need for the City's largest single investment—streets—to continue to receive significant funding will continue beyond 2005 when the fust full eight-year cycle is complete. ACTION PLAN fask Date I. . - 1. Continue the program of monitoring the condition of existing sidewalks. Ongoing 2. Continue to repair damaged sidewalks,curbs and gutters using City staff. Ongoing 3. Continue implementation of the 1998 PMP for Areas 7 and 8. Ongoing 4. Pursue State grant funding for pavement projects. Ongoing 5. Continue to retrofit existing curbs for disabled access using CDBG funds. Annually in Fall 6. Continue contracts of$60,000 per year to repair damaged sidewalks. Annually in Spring 7. Establish permit guidelines to expedite sidewalk repairs by private property owners. 12/03 RESPONSIBLE DEPARTMENT Public Works - 13- �. I� STREET AND SIDEWALK MAINTENANCE 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. For pavement reconstruction, resurfacing and resealing this will cost $1,525,000 in 2003-04 and$1;570,750 in 2004-05. The majority of this budget will be spent on pavement reconstruction and resurfacing. Those streets in maintenance areas 7 and 8 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. 2. Sidewalk Repair. We recommend continuing the current level of in-house sidewalk repair and contracting for sidewalk repair($60,000 annually). All of the proposed costs are funded through the General Fund. GENERAL FUND REVENUE POTENTIAL None. OUTCOME—FINAL WORK PRODUCT 1. By June 2005, PMP projects will have completed one full cycle and addressed 100% 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. We will have maintained the current PCI of 74, which is a significant improvement from the PCI of 68 five years ago. On the other hand, resurfacing and reconstructing fewer streets than anticipated in 1998 when the PMP was adopted means we will not reach its goal for a PCI of 80. 3. Approximately 660 feet of existing sidewalk will have been removed and replaced. 4. Approximately 30 comer curbs have been retrofitted for improved access by persons with disabilities. - 14- O� ' � 0 LOS OSOS VALLEY ROAD INTERCHANGE OBJECTIVE Continue working towards improvements at the Los Osos Valley Road/Highway 101 interchange. DISCUSSION Background. Land development in and around the Los Osos Valley Road (LOVR) 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 and are under construction; and Home Depot opened its doors and began operation on March 13, 2003. In addition, there are a number of other development projects along LOVR either submitted or awaiting filing for City or County review as part of the land development process. The existing interchange often experiences congestion and vehicle delay during the peak times of the day. Recent widening of LOVR west of the interchange has helped to reduce congestion and speed up travel times for vehicles along LOVR. However, congestion still occurs between the freeway ramps on LOVR. The interchange should be improved to keep pace with the demand for roadway capacity in this area in order to maintain City operational thresholds established in the City Circulation Element. A Caltrans Project Study Report(PSR-PDS) will be completed in summer 2003. Parts of this objective are already in process: LOVR has been widened as a part of the conditions of approval of the DeVaul and Froom Ranch projects. The City's Flood Management Plan states the existing flooding problems at the freeway are not due to undersized culverts, but rather to constrictions downstream. Creating secondary overflow channels downstream will address this part of the Council objective. Further, Environmental Impact Reports conducted for the Costco project as well as traffic studies for the proposed motel projects along Calle Joaquin have recommended that improvements be made to Calle Joaquin and the interchange to mitigate impacts caused by new vehicle trips in and out of the area. As presented in the Action Plan below, we recommend completing this project in phases that allow for individual developments to go forward before all "end-game" improvements are completed, while at the same time assuring that adequate mitigation is in-place. For 2003-05, Phase 1 improvements include those that can go forward without Cal Trans approval (non-interchange improvements), most notably the relocation of Calle Joaquin. Challenges We Will Face in Achieving this Objective. Each part of this major improvement project will be challenging: I. A Project Study Report-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 and it should be completed during summer 2003. 2. A Project Development Team (PDT) has been 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 Plans,Specifications and Estimates (PS&E). 3. Modifying the geometrics of 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/Highway 101 interchange must be kept on schedule to address short-term and mid-term impacts associated with development along the LOVR corridor: - 15 - pCr ' � MAJOR CITY GOALS LOS OSOS VALLEY ROAD INTERCHANGE 6. Because the long-term funding for the project is likely to include Federal money, National Environmental Protection Act (NEPA) as well as California Environmental Quality Act (CEQA) environmental review is recommended. 7. A full financial plan will need to be developed as part of the PSR and private development to insure that the project is financially feasible at a time when public infrastructure funding may be in jeopardy. 8. 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 1. Obtain Caltrans approval of the PSR-PDS. 7-03 2. Finalize plans for Phase 1 improvement/mitigation strategies not requiring Cal Trans 7-03 approval (non-interchange improvements), such as relocation of Calle Joaquin. 3. Prepare Request for Proposal for the CEQA.Enviroamental Impact Report(EIR), NEPA 9-03 Environmental Impact Statement(EIS) and Project Report. 4. Pursue Advance Development Funding for the EIR/EIS, Project Report and PS&E. 9-03 5. Hire consultant and begin preparing EIR/EIS and Project Report. 12/03 6. Complete design of Phase 1 improvements and invite construction bids. 3/04 7. Complete Draft Project Report. 5-04 8. Complete Administrative Draft EIR/EIS. 6-04 9. Complete negotiations for Cal Trans cooperative agreement. 6-04 10. Award contract and begin construction of Phase 1 improvements. 7-04 11. Complete construction of Phase I improvements. 6-05 The Out-Years. Subsequent work and financial resources will be required beyond the 2003-05 Financial Plan to complete the LOVR/Highway 101 interchange improvement project. As private development is reviewed and improved in the area, the City along with Caltrans and the County will need to adequately identify and implement necessary interim project mitigation at the interchange location that will serve the ultimate design solution. Upon completion of the EIR/EIS and the Caltrans Project Report, final construction drawings can be prepared for the project. These tasks include hiring a design consultant to complete the PS&E for the project, obtaining additional grant sources and debt financing for the project, right-of-way acquisition, bidding the PS&E, obtaining necessary oversight agency permitting and completing construction of the project. The schedule for"out-years" will largely depend on the availability of grant funding sources. RESPONSIBLE DEPARTMENT The Public Works Department 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 oversight and assistance in all tasks of the project. Community Development Department will assist in processing environmental review of the project and assist with any Planning Commission findings if eminent domain is required. 16- MAJOR CITY GOALS LOS OSOS VALLEY ROAD INTERCHANGE Finance Department will be integral in helping develop a final financial plan for the project. The Natural Resource Manager and City Biologist will be required to assist with issues associated with mitigating the project's impact and effect on San Luis Obispo and Prefumo Creeks. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL For 2003-05. A final financial plan for the full project is not complete at this time. A total of $900,000 has already been appropriated for development of the PSR-PDS and environmental review in the 2001-03 Financial Plan. With these funds in conjunction with developer contributions, an additional appropriation of$150,000 from the Transportation Impact Fee Fund in 200405 should cover the cost of Phase 1 improvements. The Out-Years. In the out-years will come the major expenses for design and construction related to the interchange itself. The City's 1994 Transportation Impact Fee program proposed to collect $3 million to go towards construction of the project. These funds remain significantly below the expected$10-13 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 but by providing easier and safer access to commercial and residential areas there is greater likelihood of shopping in the City and resulting increased sales tax. OUTCOME—FINAL WORK PRODUCT Achieving the two-year work program will result in the following final work products: 1. Interconnection and coordination of traffic signals along LOVR,resulting in improved traffic flow. 2. Identification of specific flood improvements for incorporation into the interchange project. 3. Completion and Cal Trans approval of the Project Report. 4. Completion of Phase 1 improvements, most notably relocation of Calle Joaquin. - 17- MAJOR CITY GOALS BIKEWAY IMPROVEMENTS: RAILROAD SAFETY TRAIL OBJECTIVE Acquire right-of-way and property for extension of the Railroad Safety Trail from the Jennifer Street Bridge to Cal Poly. DISCUSSION Background Since 1995, the City has pursued the development of a bicycle path adjoining the 4.5-mile segment of the Union Pacific Railroad in San Luis Obispo. This path is called for by the City's General Plan Circulation Element (Program 3.13) and by the 2002 Bicycle Transportation Plan. To date, about 1.5 miles of path have been constructed between Orcutt Road and Jennifer Street and south of Tank Farm Road as part of adjoining subdivisions. In December 2001 the Council approved a preliminary alignment plan for the Railroad Safety Trail extending from the AMTRAK passenger depot at the south end of Santa Rosa Street to Foothill Boulevard. The Public Works staff has been working with Union Pacific (UP) on refining this alignment to address the railroad's concerns. Refined plans prepared by RRM Design were transmitted to UP operations and engineering divisions in December 2002, with feedback expected in the near future. Once UP agrees to the design of the bike path, RRM design will prepare a display map that schematically shows the land that the City intends to purchase. This map will be transmitted to UP officials in Omaha and property discussions will begin. Challenges We Will Face in Achieving this Goal 1. Communicating with West Coast Union Pacific officials and gaining Union Pacific's support for the final refined design. 2. Working with Union Pacific officials in Omaha to establish the form and content of the purchase agreement and to negotiate property issues. 3. Pursing eminent domain against Union Pacific if the railroad decides not to sell the City the requisite territory. ACTION PLAN Workscope The Action Plan assumes that Cal Poly will extend the bike path from the campus south to Foothill Boulevard, consistent with its master plan, and that the City's part of the project would stop at Foothill Boulevard,which is the extent of this project's preliminary alignment plan. It also assumes that the segment of the bike path south of . Foothill Boulevard to Hathaway Street can be located within the California Boulevard right-of-way,thereby reducing the scope of the land acquisition from Union Pacific. - 18- o?^ f) MAJOR • BIKEWAY IMPROVEMENTS: RAILROAD SAFETY TRAIL Tasks and Schedule Task Date 1. Secure Union Pacific support for the final schematic design of the bike path between the 9-1-03 AMTRAK passenger depot and Foothill Boulevard. 2. Secure rights of entry permits from UP,complete land survey and prepare a legal 2-1-04 description of the area proposed for acquisition. 3. Complete negotiations and execute a contract of sale with UP to acquire secure the 4-1-05 property. RESPONSIBLE DEPARTMENT Public Works FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL 1. The City will need to hire a vendor to secure necessary right of entry permits from Union Pacific and complete a land survey and legal description ($15,000). 2. Land acquisition costs are estimated at$155,000 based on past purchase experience. 3. If Union Pacific is not a willing seller, appraisal and legal services will be needed (ranging from $50,000 to $75,000)to manage the requisite eminent domain proceedings. We recommend funding these costs with transportation impact fees. GENERAL FUND REVENUE POTENTIAL None. OUTCOME—FINAL WORK PRODUCT Achieving this goal will result in the acquisition of the land necessary to extend the Railroad Safety Trail between the AMTRAK passenger terminal and Foothill Boulevard. 19_ _7 -'a3 MAJOR CITY GOALS' THERAPY POOL OBJECTIVE Pursue development of a warm water therapy pool at the Swim Center through a financing program for its construction and on-going operation that does not use general-purpose revenues. DISCUSSION Background Studying the need for a community center and therapy pool was a Major City Goal in 1999-01 Financial Plan. The results of this analysis were presented to the Council on May 16, 2000, which clearly demonstrated the need for both of these facilities. As an interim action, Council approved the remodel of the Recreation (Ludwick) Center and directed staff to look for funding sources for both the community center and therapy pool. The therapy pool envisioned for San Luis Obispo is 1,200 square foot, with water depths from 3 to 5 feet. The pool would be heated to 90 degrees. While it does not need to be indoors, it should be at least protected from the wind. If it could be positioned near one of the existing locker rooms at the SLO Swim Center, additional dressing areas -^ t„ t; would not be needed. There are two possible locations for the therapy at the SLO Swim Center. Site 1 is in the southeast portion of the center, next to the tot pool. Site 2 to the north 1 :,3 would replace the non-functioning solar panels. Selecting the best possible location would be part of the planning process for the therapy pool. A therapy pool can provide a number of recreational •, �---—LA'S �. opportunities that are not currently available in the City. The Site 1 4 warm water environment is a particularly attractive place for ,, individuals with physical and developmental disabilities to participate in swimming programs. Infants and young children can be made water safe with instructional programs. During the winter months, youth swimming lessons can be taught. People with range of motion restrictions, such as arthritis,can exercise freely in the warm water. In addition, an added benefit of the potential boost to tourism is the use of the therapy pool during swim meets. The current City pool is 50 meters long, which is competition size. However, major swim competitions require a warm-up pool at the site. A therapy pool can serve that function. Proposition 40, approved by California voters in March of 2002 allocated $225,000 to San Luis Obispo for new construction projects. This funding was allocated to the construction of the Damon-Garcia Sports Fields. However, since that project has come in well under budget, the Council de-obligated funding for this purpose on April 1, 2003. Accordingly, we recommend using Proposition 40 funding for the construction of a therapy pool: while there are other potential park projects that it could be allocated to, this is the only clearly eligible project that is a Major City Goal for 2003-05 where construction could begin within the next two years. Challenges We Will.Face in Achieving this Goal The Council's goal for this project requires that the therapy pool be both constructed and operated without any added funding from the General Fund. For that to happen it must remain as small as possible, while still providing needed services. The general rule is that small pools with shallow water cost less to build and have the -20- rO"l MAJOR • THERAPY POOL best chance of covering their operating costs. This is because most recreational activity takes place in the shallow portions of pools, deep water is used less. Typically, pools tend to grow in size during the planning period as different interest groups weigh in on the design. For this project to succeed, the pool must remain small and shallow. A pool of 60' x 20' is proposed for this project. This would provide ample space for most therapeutic programming. Most of the activities are static, in that the participant exercises while remaining in one spot. For this type of programming 30 people can be accommodated. For non-static programming, such as aqua walking, 20-25 people could use the pool at once. Functioning as a warm up pool for major swim events, 10-12 swimmers can be accommodated at once. Given that each swim event has 8 swimmers in it,there is ample space for warm-up. Proposition 40 has yet to be funded by the legislature, so the date of the availability of the funding is uncertain. Staff in the State Department of Parks and Recreation Department/Office of Grants and Local Assistance believes the funding will be included in the next State Budget. In any event, assuming the proposed use of this funding source, the project could not commence until the funding is allocated by the State. Based upon information supplied by a well-known aquatic facility consulting firm, a construction cost of$125 per square foot is projected for the therapy pool. The pool requires its own stand-alone operating system, including heating, filtration, and water treatment. The cost projections are $150,000 for a 1,200 square foot therapy pool. There will be additional costs of$75,000 for design, demolition, deck, fencing and construction management, for a total project cost of$225,000. While a cover would be a worthwhile addition to the project, it is not mandatory. A structure to cover the pool and provide some wind protection will cost about $40,000. The San Luis Sea Hawks Swim Club has indicated a willingness to raise funds in support of this project; their goal is $50,000. Since this is about the cost of the cover, the Swim Cub donation can be applied directly to the structure. The consulting firm has also indicated that the maintenance cost for a pool of this size is $18,000 per year. In support of this project, the existing pool swimmers have indicated through a poll taken at the pool that they would support a 25-cent (0) increase in the daily pool fee, which will be $2.25 by this fall. With 64,000 paid uses last year, $16,000 can be raised. The Swim Club has promised to contribute $5 per swimmer per month. With 130 active members, an additional $7,000 can be credited toward maintenance. That is a total of$23,000, which is more than enough to fund the maintenance costs. Swim programs will charge a fee of $2.50 per use. The cost of an instructor is about $15 per hour; so six participants will be needed for a class or program to be offered. All swim programs in the therapy pool will require pre-registration to insure minimum attendance. ACTION PLAN Task Date 1. Receive funding approval from the State and formalize SLO Swim Club donations. 1-04 2. Select an architect and begin study and environmental review. 3-04 3. Complete study and environmental review and begin design. 9-04 4. Complete design, invite construction bids and award contract.. 4-05 5. Begin construction. 6-05 -21 - a � MAJOR CITY GOALS THERAPY POOL RESPONSIBLE DEPARTMENT The Parks and Recreation Department will be responsible for securing the grant and donations needed for this project. Parks and Recreation staff will supervise the programs that are offered when the pool is opened. The Engineering Division will be responsible for the study, design, and construction of the pool. The Building Maintenance Division will be responsible for pool maintenance. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL The financial resources to construct the pool can be acquired from non-General Fund sources. Specifically, this is the $225,000 allocation in Proposition 40 funds from the State. If for some reason the Swim Club donation does not materialize, the pool could still be constructed without a cover. Additional staff will be needed for recreation programs. The funding for those temporary positions can come from the increased revenues. The Aquatic Supervisor can absorb the responsibilities for programming the pool within the existing work schedule. The $18,000 needed to maintain the pool will be allocated to the various. maintenance line items. This will include additional temporary staff for responsibilities such as cleaning the pool and.servicing the filters. GENERAL FUND REVENUE POTENTIAL Swim meets that are targeted for off peak periods, such as in the winter,.or even during the week in the summer bring out of the area participants. This has the potential to some TOT and sales tax revenue. OUTCOME—FINAL WORK PRODUCT Completion of this goal will give the City a therapeutic recreation facility that is unique to the community. It will provide significantrecreational opportunities to youth and older adults, two programming targets of the Parks and Recreation Department. It will serve as a warm up pool which may help in attracting large swim meets to the area. -22- d�� Emir MAJOR CITY GOALS - HOUSING OBJECTIVE Adopt a housing element that expands housing opportunities for very low, low and moderate income households, preserves and enhances residential neighborhoods and complies with state laws including CEQA and encourage and support Cal Poly's efforts to provide more on-campus housing consistent with their adopted master plan for housing and enrollment. DISCUSSION Background The City's adopted General Plan Housing Element contains numerous programs to promote the creation and retention of affordable housing in the City. Other policies and programs are directed to avoid exacerbating the need for more affordable housing. About 80% of the programs from the 1994 Housing Element have been, or are being implemented. However, other market-place issues have worked to create a housing situation in the City that remains difficult for most of those trying to find sound, affordable housing. The Long-Range Planning Division of the Community Development Department typically takes the lead on developing the Housing Element Updates and Housing Element programs. The Housing Element Update is mandated by State law and is presently underway. Implementation programs primarily involve developing regulatory requirements and incentive programs to encourage or require private sector development of affordable housing and through its preparation and administration of Community Development Block Grant (CDBG) applications and programs. The City also implements its affordable housing goals through its support of the Housing Authority, which is active in building and providing affordable housing. Programs that are being implemented, such as the approval of specific plans for residential expansion areas with land set aside for additional housing and the inclusionary housing ordinance that requires a minimum contribution to affordable housing for new development, will soon begin to provide more affordable housing than the community has experienced in several years. These programs were prioritized because they offered the most significant results. In addition, the CDBG program has made nearly a million dollars a year available to provide and enhance affordable housing. This March, Cal Poly announced a very aggressive program that.may result in up to 850 additional apartment style units (with 2,750 beds) on the campus. While this is an extremely important proposal and will assist the City with several of it General Plan goals, the project will not solve all of our housing problems. City staff will continue to work with the.University and Cuesta College on this proposal and other programs to assist with the student housing impacts. Challenges We Will Face in Achieving this Goal 1. Limited Staff Resources. As noted in the description of the City's existing implementation methods above, existing staff resources are limited. Community Development Department staff have the primary role in implementing affordable housing programs by creating the ordinances and procedures that accomplish the program goals. Once established, most of the regulatory and incentive programs are implemented on a case- by-case basis as a part of the development review and building permit process. Most housing programs will involve on-going administration, such as tracking the existing affordable housing where such housing has been required to remain affordable for a defined time or to a defined income group. In drafting implementation programs, staff must be diligent to avoid processes or procedures that will create significant new demands on limited staff resources. Any additional allocation of resources to implementing new housing -23- e-?I MAJOR CITY QOALS`­" HOUSING programs or studies will involve redirecting the resources allocated to existing programs and activities, unless new resources are made available. As part of the CDBG review process, the Council has conceptually approved adding staffing—funded by the CDBG program—to better manage and coordinate housing programs. 2. Dependence on Private Development. With the exception of funding the Housing Authority and their affiliates who actually construct affordable housing, and working with the University to provide additional student housing,the City's main method of securing more affordable housing is to encourage or require it as a component of new development. Thus, when development activity is slow, little is accomplished in the interest of affordable housing. The vitality of the general economy and interest rates for construction financing are the primary determinant of development activity, and the City has little influence on State or National economic vitality. 3. Dependence on Funding. Some grant funding is available on a competitive basis for uses that can reduce the cost of housing, including reducing land cost, paying for infrastructure, reduced interest rates or purchase subsidies. The competition for these grants is typically intense and receiving these grants uncertain. Obtaining significant grant funding requires consistent effort to stay abreast of grant opportunities and to put together the applications. This requires a significant amount of staff resource. Access to many grant programs also depends on the City's Housing Element being certified by the State. The City has participated in the CDBG program since 1993. In 1998, the CDBG program provided a $1,000,000 loan to the Housing Authority to construct affordable housing. The loan will be paid though subsequent CDBG program grants. The CDBG program is an entitlement program rather than a competitive one. This means that as long as the federal government allocates money to the program, the expenditure of staff resources to participate in the program will result in some funding for the City. The Community Development Department currently uses about one third of a staff position to coordinate the City's CDBG program. The Finance Department also provides regular staff support for the CDBG program. As the City continues to participate in the CDBG program, the number of projects will increase, eventually increasing the staff resource necessary to administer it. As noted above, the Council has conceptually approved doing so as part of the 2003-04 CDBG program. ACTION PLAN 1. Continue to implement affordable housing programs as available resources permit. The process for allocating existing resources within the Community Development Department involves establishing work program objectives at the beginning of the fiscal year. Existing Council goals and other work program objectives determine available staff resources. The City already has important housing programs: a. Affordable housing incentives. b. Exclusionary housing requirements for both residential and non-residential development projects. c. Neighborhood wellness. d. Working closely with a County-wide Housing Trust Fund. e. Various CDBG housing programs. f. On-going work with Cal Poly in support of on-campus housing. Staff will continue to implement these programs as applicable on an on-going basis. In addition to these programs, the following programs have been identified as high priority for the next two fiscal years. 2. Complete the process of updating the General Plan Housing Element. The extent to which the City can implement many housing programs will hinge on the ability of the City to successfully develop a Housing Element update that can be certified by the State Department of Housing and Community Development. 24- �� OO MAJOR CITY GOAL HOUSING Their certification of the Housing Element will make the City eligible for more grant opportunities. As such, preparing a Housing Element update that can be certified by the State, while maintaining the City's fundamental land use goals, is a high priority. Existing State Law says the City must update our Housing Element by December 31, 2003. The process of updating the Housing Element is a large task. Therefore, staff began the present update process over a year ago in early 2002 in order to meet the mandated deadline. Even so, the year and a half process shown in the table below is ambitious. As reflected in the Council Goal statement, and due to the increasing cost of housing relative to incomes, the Housing Element update will look for programs that provide more help to moderate income households than the former plans. 3. Encourage and support Cal Poly's efforts to provide more on-campus housing consistent with their adopted master plan. The City will continue to work closely with Cal Poly on their proposal with Capstone West to provide student housing. In addition, there are other Campus Master Plan requirements for student, faculty, and staff housing and the City staff will continue to work closely with Cal Poly to help assure that these goals are achieved. Tasks and Schedule Task Date 1. Implement existing affordable housing incentive and inclusionary housing programs. Ongoing 2. Continue working closely with the County-wide Housing Trust Fund. Ongoing 3. Continue working closely with Cal Poly in encouraging and supporting their efforts to Ongoing provide more on-campus housing consistent with their adopted master plan. 4. Coordinate preparation and administration of annual CDBG program. Annual Cycle 5. Update the General Plan Housing Element 12-03 a. Complete background analyses and documentation. b. Identify issues through Housing Element Task Force. c. Draft policies and programs. d. Begin preparing EIR. e. Hold town hall meeting. f. Hold Planning Commission study session. g. Hold Council study session. h. Complete environmental review. i. Hold Planning Commission public hearings. j. Hold Council public hearings and adopt update. k. Begin implementation. RESPONSIBLE DEPARTMENT Community Development. Complete the Housing Element update, implement adopted affordable housing programs and work with Cal Poly on their housing proposals. Administration. Review and provide direction regarding policy recommendations and Council agenda materials. Finance. Review draft program and element update, analyze fiscal impacts and provide advice. -25- MAJOR CITY GOALS" HOUSING FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Significant staff and consultant resources will be required to achieve this goal. As part of the 2002-03 Mid-Year Budget Review, the Council has already approved funding in the amount of$155,000 for consultant assistance in preparing the Environmental Impact Report and analyzing fiscal impacts. In conjunction with this funding, and assuming that current staffing levels are maintained,existing resources will be adequate to achieve this goal. GENERAL FUND REVENUE POTENTIAL None. OUTCOME—FINAL WORK PRODUCT 1. The Housing Element will be updated consistent with the schedule established in the State Government Code. 2. The City will continue to make steady, incremental progress in implementing our adopted affordable housing programs. 3. The City will continue working closely with Cal Poly and Cuesta College on their roles in providing student housing. 26- ar � MAJOR CITY GOALS NEIGHBORHOOD WELLNESS OBJECTIVE Improve neighborhoods and neighborhood involvement by continuing to implement the neighborhood wellness program,including consideration of a rental inspection ordinance. DISCUSSION Background L Included in the adopted Land Use Element is LU 2.15 entitled Neighborhood Wellness Action Plans. The element specifies six specific areas that are designed to help residents preserve and enhance their neighborhoods, stating that over time the City will: 1. Identify neighborhoods, and work with residents to prepare neighborhood plans that empower them to shape their neighborhoods. 2. Help devise strategies to help stabilize the rental/owner ratio, to maintain neighborhood character, safety, and stability. 3. Help identify neighborhood problems, and undertake a wide range of focused development-review, capital improvement and code enforcement efforts. 4. Encourage the formation of voluntary neighborhood groups, so residents can become involved early in the development review process. 5. Involve residents early in reviewing proposed public and private projects that could have neighborhood impacts, by notifying residents and property owners and holding meetings at convenient times and places within the neighborhoods. 6. Provide appropriate staff support, possibly including a single staff person for neighborhood issues, and train all staff to be sensitive to issues of neighborhood protection and enhancement. These General Plan policies, while perhaps not fully implemented in each case, have inspired a number of programs and service improvements throughout the City organization. In addition to "special programs," a substantial portion of the City's day-to-day services are crucial to overall healthy neighborhoods, such as police and fire protection, refuse collection and street sweeping. It is important to think of our neighborhood "investment" in this more comprehensive and interconnected way. Outlined below are examples of departmental and organization-wide neighborhood services that will continue in 2003-04: Police Department 1. Support of a full-time Neighborhood Services Manager to coordinate programs and activities for the Office of Neighborhood Services. 2. Establishment and recent broadening of the Student Neighborhood Assistance Program(SNAP) to enforce the Noise Ordinance,Neighborhood Enhancement Ordinance and Neighborhood Parking Districts. 3. Establishment of the Working to Improve Neighborhoods(WIN) Program to provide public information and education through the Office of Neighborhood Services. Activities involve print, television and radio information to address issues like underage alcohol consumption, and specialty programs to promote neighborhood wellness, such as Good Neighbor Day, Neighborhood Cooperation Week and Make a Difference Day. -27- a- MAJOR CITY GOALS NEIGHBORHOOD WELLNESS 4. Development of the Four Point Crime Prevention Program, which includes radio, television, print and web- based educational components. 5. Creation of a new Manager's Coffee Group of various neighborhood leaders, who are not part of Residents for Quality Neighborhoods (RQN), to meet regularly with the Neighborhood Services Manager. Public Works 6. Support of the Neighborhood Traffic Management Program, which allows neighborhoods to develop localized plans to address their traffic issues. 7. Support of Neighborhood Parking Districts, established at the request of neighborhoods, often in the Cal Poly area. 8. Establishment of the Pavement Management Plan, which sets a standardized rotation of street paving throughout all City neighborhoods. 9. Maintenance of neighborhood parks. Community Development 10. Early notification to, and meetings with, neighborhood groups on projects with neighborhood impacts so their input is received prior to formal review. 11. Establishment of a full-time Code Enforcement Officer through internal departmental reorganization. 12. Coordinated use of Code Enforcement Violation Tracking software (VIOLTRAC), including frequent software upgrades, in order to better receive complaints, track their progress and prepare reports for presentation in court. 13. Passage of the Neighborhood Enhancement Ordinance in 1995 (and updated in 2002), which addresses problems such as furniture placed on lawns and roofs, placement of garbage cans, parking on lawns and overgrown weeds in yards. 14. Recent passage of the Civil Administrative Citation Ordinance, allowing smaller code violations to be handled through the civil process, rather than as criminal actions. This change allows violations to be processed faster and brings in fine revenue to the City. 15. Thorough review of current use permit applications for fraternities and sororities, establishing necessary conditions to address potential problems. 16. A program of year-round inspections of all fraternities and sororities for compliance with use permit conditions,Fire and Building Codes and Property Maintenance Standards. 17. Establishment and enforcement of appropriate zoning to protect the character of neighborhoods. Parks and Recreation 18. Oversight of establishing new parks in newly development neighborhoods. 19. Assurance that neighborhood parks are properly and safely equipped. 20. Provision of Ranger services to address enforcement issues.related to park usage. -28- MAJOR CITY GOALS NEIGHBORHOOD WELLNESS Fire Department 21. Enforcement of the annual weed abatement program to assure that unsafe weeds are removed prior to fire season. Organization-Wide 22. Establishment of the Neighborhood Services Team, made up of representatives of various City departments and representative of RQN,which meets regularly to address neighborhood issues. 23. Strong City participation in the Student-Community Liaison Committee to create better relations between the City, the student community and neighborhoods. 24. Presentations by City officials at Cal Poly WOW Week and SLO Days at Cuesta College on how to find appropriate housing and be a good neighbor. 25. Creation of a Model Rental Ordinance for landlords. Rental Inspection Ordinance In addition to continuing these strong efforts, the work program for 2003-05 includes pursuing a possible rental inspection ordinance. Adding this "tool' to our toolkit would insure that our rental properties are maintained safely and in conformance with existing City and Uniform Housing Codes. The inspection program created by the ordinance would be self-supporting, based on fees charged to the property owners. The benefits of such a program would accrue both to tenants and to the neighborhood in which the rental units are located. Challenges We Will Face in Achieving this Goal 1. Maintaining the current level of City-wide support for existing neighborhood wellness programs at a time of diminishing staff and financial resources will be a challenge. 2 Although a rental inspection ordinance is intended to provide safe housing for renters and hold property owners accountable for cost associated with their business, there is likely to be opposition to such an ordinance. A comprehensive education program will be an important component of this program. ACTION PLAN Task Date I. . - 1. Maintain and support all existing neighborhood wellness programs currently in place. Ongoing 2. Continue encouraging formation and involvement of new voluntary neighborhood groups Ongoing by use of the Neighborhood Managers Coffee program,WIN, Neighborhood Services Team, Neighborhood Planner and similar outreach strategies. 3. Continue involving residents early in the public review of proposed projects by a more Ongoing defined Neighborhood Planner program in Community Development, including expanding the Neighborhood Planner duties to include two-year terms, an annual neighborhood issues conference and attendance at City neighborhood meetings and coffees. 4. Continue contract Building Inspector position to support continued high levels of building 7/03 applications and allow the continuation of a full-time Code Enforcement Officer. -29- c) MAJOR CITY GOALS NEIGHBORHOOD WELLNESS Task Date 5. , - 5. Evaluate a cost recovery program for code enforcement efforts as a strategy to reduce and 12/03 deter repeat offenders while generating increased revenues,and present findings and recommendations to the Council. 6. Research a Rental Inspection Ordinance in an effort to provide a safer housing 7/04 environment for renters and reduce blighted conditions; and present findings and recommendations to the Council. RESPONSIBLE DEPARTMENT 1. Police Department. The Office of Neighborhood Services will have primary responsibility for coordinating and implementing the City's Neighborhood Wellness Action Plan. 2. Community Development. Staff support assigned by the Director of Community Development would include the Code Enforcement Coordinator, Neighborhood Planner and related personnel. 3. Administration. General oversight and participation on the Neighborhood Services Team. 4. Finance. Evaluate fiscal impacts of the Rental Inspection Ordinance and expanded use of civil citations; and if approved by the Council,implement collection system. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL No additional resources in the Office of Neighborhood Services are proposed at this time for continuing to implement existing neighborhood programs. The Community Development Department will need to continue a contract Building Inspector position in order to maintain a full-time Code Enforcement Officer. This will cost $67,300 in 2003-04 and$70,800 in 2004-05,and will be funded in the General Fund. Sustaining the current level of existing programs and working on tasks involved in the early stages of the Neighborhood Wellness Action Plan, including, a new Rental Inspection Ordinance, will require a substantial portion of the Neighborhood Services Manager's time and incremental addition of other staff time as the various action plan elements progress. Development of a Rental Inspection Ordinance will require effort and support from Community Development,Finance, Administration and the City Attorney's Office. GENERAL FUND REVENUE POTENTIAL 1. Rental Inspection Ordinance. There is no "net" General Fund revenue potential with this program. However, any additional costs can be fully offset by inspection fees. 2. Civil Penalties. Aggressive use of civil penalties in increasing cost recovery associated with code enforcement could result in a net increase in General Fund revenues. Traditionally, the City has taken a low profile approach to enforcement, which minor penalties generating small fines utilizing the local courts. With new local legislation passed in 2002, civil penalties may now be used that generate revenue directly for the City, reducing or eliminating the need to prosecute violators in court. Instead, civil fines may now be imposed on persons who commit violations, refuse to take corrective action or delay actions in order to avoid additional tax penalties based on illegal construction and other activities. Using this method of cost recovery for building, zoning, neighborhood enhancement, weed abatement, chronic response properties and related violations could generate revenues to support code enforcement activities in Community Development. -30- 0�1' MAJOR CITY GOALS,-- NEIGHBORHOOD WELLNESS OUTCOME—FINAL WORK PRODUCT Continuing to implement programs that enhance neighborhoods within the city contributes directly to quality of life issues that local citizens increasingly demand, including reduced crime and blight, safer rental housing, enhanced property values and achieving the overall goals of the General Plan. -31 - �'✓J MAJOR SOUTH BROAD STREET CORRIDOR PLAN OBJECTIVE Adopt General Plan and zoning amendments to create a mixed-use residential neighborhood along the South Broad Street corridor from South Street to Orcutt Road and seek grant funding to create a neighborhood concept plan for the area. DISCUSSION Background South Broad Street/State Highway 227 is an active artery leading to and from the City's downtown, connecting it to residential neighborhoods in the City and areas beyond. The South Broad Street corridor developed over a long period of time. There are many different architectural styles along the street, with varying design quality. The result is that the streetscape contributes little to the aesthetic quality of the City and adjacent neighborhoods, or their sense of place. There are few structures and little landscaping providing a human scale to help make pedestrians feel comfortable along the street. The street itself exists as a wide expanse of asphalt with little landscaping, along which vehicles move at a high rate of speed compared to bicycles and pedestrians, exacerbating the unpleasant aspects of this corridor. Streets serve as more than circulation corridors for automobiles. They are also public spaces and components of neighborhoods. The view along streets is a major component of an area's character, a key component of the "sense of place." Streets also serve as bicycle and pedestrian routes. The buildings that front on them serve as residences and places of business. In recent times there has been a growing awareness that many streets serve only the function of circulation for cars, with little regard for their role as defining civic spaces and places for people. When the City updated its General Plan in 1994, several goals relating to these`other" functions of street corridors were adopted, including: L. Maintain the town's character as a small,safe,comfortable place to live. 2. Develop buildings and facilities that will contribute to our sense of place and architectural heritage. 3. Provide a safe and pleasant place to walk and ride a bicycle,for recreation and other daily activities. The General Plan identifies the South Broad Street Corridor (between High and Orcutt streets) as a "special design area" (LU 8.3). This Land Use Element policy states that in this area renovation of streetscapes, landscaping, and building facades is to be encouraged. Furthermore, the policy states that the City should work with property owners to prepare a plan containing design guidelines and implementing programs. Programs may include implementation incentives, such as variations from development standards or loan funds. A group of property owners and residents have started a grass roots planning effort for the corridor. They have been limited by funding constraints and the City's inability to join the effort because of other high priority commitments. Challenges We Will Face in Achieving this Goal 1. Limited Funding to Develop the Plan. Because of State budget problems and the general economy, there will be severe fiscal constraints facing all California cities for most, if not all, of this budget cycle. The City has applied for grant funding through Cal Trans to develop a corridor plan for this neighborhood. At this point it seems fairly certain that the State will not include funding in its 2003-04 budget for these grants and this will severely impede the City's ability to produce the originally envisioned plan. Area plans have been -32- �� MAJOR • SOUTH BROAD STREET CORRIDOR PLAN developed in-house with department staff, and we should consider implementing this program in-house beginning with the General Plan amendment and rezoning. 2. Reluctance to Change in the Eristing Neighborhood. There has been some initial opposition from owners of commercially zoned property along the eastern side of Broad Street to the idea of changes in their zoning. Initial concepts developed by the private sector for a "Broad Street Enhancement Plan" included fairly significant changes in the zoning along the street to allow an intense mix of residential, office, and commercial uses. Early proposals also include significant changes to Broad Street itself in an attempt to reduce speeds and improve safety. The use of traffic circles and planted medians may concern some business owners. 3. Lack of CIP Funding and Dependence on Private Development for Implementation. The plan would address fagade and landscaping improvements on private property adjacent to South Broad Street. Installing these improvements will require the cooperation of property owners. It is not likely that the City will have the financial resources to install or construct recommended building improvements. Most of the improvements that will occur on private property must come as the result of work a property owner initiates. The plan can require that certain plan provisions be implemented as a condition of property development that requires City approval. Relying on permit conditions to implement certain plan provisions will probably result in achieving these provisions over the long-term rather than the short-term. Public improvements over which the City has direct control and the ability to fund in the near term will produce the most immediate results. The plan can explore alternatives for providing incentives that encourage property owners to implement the plan provisions that relate to their property. 4. Property Owner Support. Changes in the existing General Plan and zoning has a better probability of being implemented if it has the support of the stakeholders, the people and organizations or agencies affected by it. Adopting changes that achieve the stated goals for the South Broad Street Corridor will rely on the participation and support of the community and the businesses and property owners in South Broad Street area ACTION PLAN There are four basic options for accomplishing this goal as summarized below. 1. Two-Step Process: Land Use Element and Zoning Changes Preceding Neighborhood Concept Plan. With this approach, the first step would for staff to prepare a General Plan amendment and rezoning addressing the identified neighborhood with the intent of providing more mixed-use/housing opportunities, particularly between South Broad Street and the railroad property. This could be accomplished in conjunction with the Housing Element update, and completed during 2003-05 without additional resources. This approach has the added advantage of placing the issues of appropriate land use mix directly on the table for the neighborhood and community to consider at an early date. If adding significantly more housing and mixed service/office/housing is acceptable to the community, these changes could then be followed by a more detailed neighborhood concept plan that addresses circulation and design guidelines prepared during 2005-07. This is our recommended approach. 2. Consultant Prepared Plan. A consulting firm, with expertise in urban design, can be used to extend the resources of planning staff to prepare the plan, which could be prepared more expediently than a staff- prepared plan. However, this option would cost an additional $212,000 for consultant resources, as well as a larger commitment of limited staff resources than the two-step process above. Without grant funding, which is unlikely at this time, this approach is not recommended given our current fiscal situation. -33 - -39 -MAJOR CITY GOALS SOUTH BROAD STREET CORRIDOR PLAN 3. Staff Prepared Plan. As a staff prepared plan, the work would be done by Community Development staff supplemented by consultant services for limited technical tasks (that are already funded as part of the Housing Element update), similar to the process that produced the Railroad District Plan and the Mid-Higuera Enhancement Plan. However, staff resources are limited. As such, to maintain effort on other Council Goals and on-going duties, this would mean allocating resources to this plan on an "as-available" basis. This approach is likely to result in an untimely and ultimately unsuccessful project. Based on our past experience in preparing special area plans, it is important to commit adequate resources at the outset. To do this would require a significant reprioritization of the Council's goals for the long-range planning. As such, this approach is not recommended. 4. Cal Poly Student Project. Cal Poly City and Regional Planning faculty frequently look for"real-world" case studies for their students. A senior class could prepare urban design recommendations for the South Broad Street Corridor. These would be presented to the Council and become the basis for a more focused work effort by staff or a consultant. One drawback to this option is that the student project would likely require follow-up work by staff or a consultant firm to put concepts into the format of a plan that can be readily implemented. More importantly, such an approach is not likely to meet the Department of Housing and Community Development's test for a qualified housing program that can be recognized as likely to provide housing toward the City's quantifiable objectives.. Environmental review will be needed with any option for preparing the plan. However, with the "two-step" option of beginning with a General Plan amendment and rezoning approach, the environmental effects of adding significant housing to the area could be addressed through the Housing Element Update Environmental Impact Report(EIR). This approach will be much less expensive than a stand-alone EIR. Tasks and Schedule. The tasks listed in the table below apply to the option of preparing a Land Use Element and zoning change preceding the neighborhood concept plan. We believe that this is most practical way of addressing a potential change in the basic character of the neighborhood. In short, sometimes the best way of eating an elephant is one bite at a time—and this "two-step"process allows us to take that approach in achieving the overall goal of this work plan. However, staff would continue to pursue grants to fund the neighborhood concept plan for circulation improvements and design guidelines as a separate,follow-on project. However,given the State's fiscal situation,this is unlikely until 2004-05 at the soonest. Task Date I. . - 1. Identify housing targets as part of the adopted Housing Element update. 12-03 2. Develop work program for General Plan amendment/rezoning. 3-04 3. Initiate the General Plan amendment/rezoning program. 4-04 4. Hold community meeting/issue identification meeting. 5-04 5. Complete background analyses,inventorying analysis and issue identification. 9-04 6. Hold community meeting to discuss and review policies and programs. 11-04 7. Complete environmental review. 1-05 8. Hold Planning Commission hearings and finalize Council recommendation. 3-05 9. Hold Council hearing and adopt General Plan amendment/rezoning. 6-05 10. Continue to seek grant funding for preparation of a follow-on neighborhood concept plan. Ongoing As reflected above, focused work on the General Plan and zoning changes will begin after adoption of the Housing Element update. This has two advantages: it will provide a starting foundation for this effort; and -34- a.3 b MAJOR • SOUTH BROAD STREET CORRIDOR PLAN knowing that this work will follow, the environmental and fiscal impacts can be addressed as part of the work that will be required for the Housing Element any way. This will result in a more efficient,cost effective approach After Council approval of the General Plan and zoning changes, work on design guidelines and circulation improvements as part of a neighborhood concept plan could begin in 2005-07. RESPONSIBLE DEPARTMENT Community Development. Primary staff responsible for preparation of the amendments. Public Works. Responsible for traffic-related analyses as needed. Administration. General overview of developing policy recommendations. Economic Development Manager: Business liaison and economic development recommendations. Natural Resource Manager: Sustainability issues and environmental impacts. Finance. Advise on fiscal impacts of the General Plan amendment/rezoning. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Assuming current staffing levels, existing resources are adequate to accomplish the work program for 2003-05. GENERAL FUND REVENUE POTENTIAL There is no significant General Fund revenue potential. OUTCOME—FINAL WORK PRODUCT Approval of land use and zoning changes will help achieve City housing goals and set the stage for a subsequent neighborhood concept plan that addresses design and circulation issues. -35- -MAJOR CITY GOALS DOWNTOWN IMPROVEMENTS: MONTEREY PLAZA OBJECTIVE Pursue the creation of a "Monterey Plaza" for civic gatherings and passive recreation, dependent upon the Copeland project-. DISCUSSION Background The 1993 Conceptual Physical Plan for the City's Center (Downtown Plan) recommends that a public plaza be created on Monterey Street and that it be closed to traffic for special events. When the County initiated its current effort to construct a new administrative complex, the Council authorized staff to hire that project's architect, Kaplan-McLaughlin-Diaz (KMD), to prepare concept drawings for a public plaza. KMD provided several preliminary sketch plans and is working with the staff to produce a final concept for consideration by the Council (see action plan, Task 1 below). The former Downtown Plan design team has also provided input to the conceptual design, which addresses the physical appearance of the street and minor functional items such as parking. Drainage, traffic flow and costs were not considered in this study. Challenges We Will Face in Achieving this Goal 1. Cost will be a major issue and that will almost certainly keep the project from being developed along with the County Government Center expansion now underway. To the extent that presently programmed under-street. improvements can be developed with adequate depth to provide clearance for the possibility of an inverted street drainage system, the timing should not be an insurmountable problem. 2. Part of the proposed plan is the occasional or permanent closing of Monterey Street for the block between Santa Rosa and Osos streets. This would create some circulation issues that would not be simple to resolve and will surely create some opposition from business owners in the Downtown. 3. If the option is chosen to change the description of a project from providing for temporary or periodic street closure to full closure,amending the Downtown Plan may encounter opposition. ACTION PLAN 1. Consultant completes concept plan. 7-03 2. Council reviews concept plan and forwards it for advisory body review. 9-03 3. After advisory body and public review,Council identifies preferred design concept(s) and 7-04 establishes the scope of technical and environmental studies (such as circulation, access, utility and drainage analysis,and project phasing)for additional study. 4. Consultants complete technical and environmental studies, and project design is modified as 6-05 necessary to address findings. The Out-Years. Depending on the results of the technical and environmental studies completed during 2003-05, and funding availability, the project may move forward during 2005-07 in approving environmental documents, schematic project plans, construction documents; and inviting bids and awarding a construction contract. -36- A�4D MAJOR CITY GOALS "v DOWNTOWN IMPROVEMENTS: MONTEREY PLAZA RESPONSIBLE DEPARTMENT Community Development FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Contracting for technical and environmental studies will cost$75,000 from the General Fund in 200405. Out-Years. Depending on the results of the technical and environmental studies, and the scope of planned improvements, estimated "out-year" costs are $200,000 for design and $2,000,000 for construction. This would most likely require funding from the General Fund. GENERAL FUND REVENUE POTENTIAL No quantifiable revenue enhancement. OUTCOME—FINAL WORK PRODUCT Achieving the work program will result in an approved design concept and completion of technical and environmental studies (such as circulation,access, utilities,drainage and project phasing). -37- a4 t MAJOR CITY GOALS" ECONOMIC DEVELOPMENT: TRANSIENT OCCUPANCY TAX OBJECTIVE Encourage and promote projects that will increase lodging and conference facilities in order to generate additional Transient Occupancy Tax revenues. DISCUSSION Background Increasing Transient Occupancy Tax (TOT) revenues is a logical component in the City's budget balancing strategy during these challenging economic times. In response to advances in technology and the economic slowdown, business travel has been off since 2001 and this trend is not expected to reverse itself. Since September 11, 2001, leisure travel has also been declining. Our local lodging industry has experienced significant declines in occupancy, but this has been offset to a large degree by increased room rates. However, even with increased rates, the City continues to experience declines in TOT revenues. In completing this goal, Staff will explore the different ways in which we can increase TOT and develop a plan for Council's consideration. Additionally, staff will continue to provide high levels of customer service to those projects that will increase lodging and conference facilities. Challenges We Will Face in Achieving this Goal 1. The City has little influence over business travel. This is a segment that marketing efforts cannot easily reach. 2. There is the potential that the addition of new rooms, without more meeting space, will result in only transferring business from one City property to the new property. 3.. Acquiring access to the Veterans Hall building, altliough a seemingly ideal location for a Convention Center, presents many hurdles, and we may find that some may not be overcome when pursuing its possible reuse. 4. The City does not have funding available to subsidize construction of a Convention Center. 5. Currently available meeting facilities are often too small to accommodate large business groups. ACTION PLAN Task bate 1. . - 1. Refocus existing resources toward Direct Advertisement of the City. Develop a focused Ongoing advertising and PR campaign for the City that establishes'stronger identity for the City as a tourist destination with a wide variety of activities to undertake during a stay. 2. Work with various organizations for tourist promotional purposes benefiting both the City Ongoing and the organizations. 3. Work with property owners and real estate brokers to explore increasing Bed and Breakfast Ongoing opportunities,consistent with City land use and zoning policies. -38- ���� MAJOR ECONOMIC DEVELOPMENT:.TRANSIENT OCCUPANCY TAX Task Date 4. Completeassessment of local lodging industry conditions by identifying all such 9/03 properties in the City;identifying all property owners and their managers; and identifying future expansion locations for tourist serving businesses. 5. Assess transportation opportunities for visitors and if necessary make service 9/03 improvements. Strongly consider extending trolley service to the Monterey Street Hotel Area. 6. Present recommendations for improved tourism transportation and trolley service to 12/03 Council for approval. 7. Establish a Task Force of local tourism experts to develop a TOT enhancement strategy. 7/03 a. Explore ways to coordinate efforts amongst property owners and ways to cooperatively 1/04 book rooms to prevent business losses to other communities. Explore ways to increase midweek business travel. b. Present Tourism Task Force recommendations to Council. 3/04 8. Update advertising conversion study completed approximately four years ago. 6/04 9. Explore reuse of large properties on Monterey Street,including sites occupied currently by 6/04 auto dealers (some of whom are expected to relocate). 10. Explore possibility of using the Veterans Memorial Building for convention center 9/04 purposes, work closely with the Veterans and the County in this effort. 11. Upon construction, encourage the Dalidio Project hotel to work with the Embassy Suites 1/05 and develop a coordinated effort to use rooms to support existing conference services at the Embassy Suites. RESPONSIBLE DEPARTMENT Administration will be the lead department for this goal. The Finance Department will evaluate the benefits of continuing annual TOT reviews of lodging properties, and depending on the results, continue implementing them; and provide support in the analysis of TOT receipts. The Community Development and Public Works Departments will be involved in development review aspects of new projects and expansions. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Achieving this goal will require significant work on the part of the City's Economic Development Manager in addition to other ongoing duties. Additionally; updating an advertising conversion study to better assess our advertising under current market conditions will cost$15,000 from the General Fund in 2003-04. -39- , cq' 45 MAJOR CITY GOALS ECONOMIC DEVELOPMENT: TRANSIENT OCCUPANCY TAX GENERAL FUND REVENUE POTENTIAL Increased TOT revenues will result in additional General Fund Revenues. The proposed new hotel, associated with the San Luis Marketplace project is expected to generate approximately $280,000 per year in new TOT, which should net$224,000 after transfer effects are considered. OUTCOME—FINAL WORK PRODUCT Upon completion of this work program, the City should have an improved plan for maintaining and increasing TOT revenues. -40- � e 1 MAJOR CITY GOALS ECONOMIC DEVELOPMENT: SALES TAX OBJECTIVE Encourage and promote retail projects that will increase sales tax revenues. DISCUSSION Background In these challenging budgetary times, increasing our sales tax revenues is a logical component in the City's budget balancing strategy. Like most municipalities, and in response to the larger national economic downturn, the City's sales tax revenues for the past few quarters have been off. Our revenue declines have, however, been minimized by the continued record sales of new automobiles in the City. Staff continues to be surprised by the strength of our automotive sector, and has speculated that declines in these sales must come at some point because they simply do not appear to be sustainable (although we could continue to be pleasantly surprised). There are a variety of ways by which we can attempt to increase our sales tax. The City presently experiences retail leakage in the general consumer area to Northern Santa Barbara County, Arroyo Grande and Paso Robles. The proposed Costco and San Luis Marketplace projects present opportunities to recapture this leakage. The Copelands Project is another project that would create new retailing opportunities. Improving upon and expanding existing retail centers is another strategy, as is developing a marketing campaign to encourage residents to"shop locally". Challenges We Will Face in Achieving this Goal 1. Increasing sales tax revenues largely depends upon the successful completion of new developments, which in part creates a potential conflict between land use decisions and financial decisions. 2. There are environmental issues presented by several of the proposed new retail developments. 3. The community and existing businesses may have concerns about new retail developments and their ability to be sustained,and potential negative fiscal impact on existing business. 4. More development,of any type,creates infrastructure costs as well as timing and implementation concerns. 5. The approval of new retail developments does not guarantee their construction. 6. The City lacks funding and a mechanism to assist in the improvement of outdated retail centers and individual stores. 7. The City's current General Plan Policy for the Gap and McBride Properties requires a 50%dedication of open space, which has inhibited the expansion of the Auto Park Way area. ACTION PLAN Task Date 1. . - 1. Identify retail types that would complement and augment existing market conditions. Ongoing Develop a retail recruitment strategy to encourage new retailers to locate in San Luis Obispo on properties zoned for this purpose. Use direct mail and attendance at industry events to support recruitment strategy. Hold quarterly meetings with local real estate brokers and property owners. -41 - 1J MAJOR CITY GOALS ' ECONOMIC DEVELOPMENT: SALES TAX Task Date 2. Continue to contract with HDL for sales tax analysis services to analyze market conditions. Ongoing 3. Continue to conduct demographic research and information gathering about the City, its Ongoing residents, its visitors and the region to provide to individuals, businesses,real estate professionals and others in analyzing San Luis Obispo for their business purposes.. Continue to use the.UCSB Economic Forecast Project as a data source. 4. Continue to facilitate and coordinate City involvement in major development projects as Ongoing directed by the Council. In particular continue to facilitate the Copelands Project toward construction. Continue involvement in the proposed San Luis Marketplace Project through negotiations, Development Review, EIR, Annexation and Pre-zoning and Agreements for Sales Tax ReimbursemenL Continue involvement in the Airport Area Specific Plan and Annexation. 5. Continue to conduct"economic gardening"in the retail industry through existing customer Ongoing service oriented programs like the Quick Response Team,the Economic Development Program's involvement in major development projects, the Economic Development Program's high level of customer service to individuals,businesses and real estate professionals. 6. Continue to support the Downtown Strategic Plan. Focus support on efforts that maintain Ongoing the retail health of Downtown and increase customer sales in a sustainable way. 7. Explore training opportunities, with local agencies like Cuesta College Institute for Ongoing Professional Development, Private Industry Council, Small Business Development Center and others to assist local retailers in improving their marketing efforts and their"E" Business presence. 8. Promote shopping as an activity for visitors to San Luis Obispo. Ongoing 9. Continue to work with auto dealers in the City. When possible, pursue the expansion of Ongoing the Auto Park Way area. Consider broadening the program of incentives to auto dealers who relocate out of downtown to Auto Park Way to include those who relocate out of downtown to other acceptable sites in the City. Continue to assist Stanley Motors in its efforts to relocate to a larger,new facility. Work closely with remaining Downtown auto dealers to find new locations that are more functional. Explore the reuse of Downtown auto dealer locations for other retail purposes. If space is available, encourage new car lines to locate in San Luis Obispo. 10. Advocate for legislation to extend sales tax to include internet sales. Ongoing 11. Conduct an assessment of current retail conditions by surveying existing retail centers, 9/03 identifying the types of retail business located in existing centers, identifying.retail center property owners or representatives. 12. Develop a"Shop Locally"marketing and PR campaign to encourage residents to purchase 11/03 goods in the City. Focus on branding San Luis Obispo as the shopping destination for the region. Work with the Chamber of Commerce, Downtown Association and others to coordinate efforts and message about shopping in San Luis Obispo. -42- p�"�� Now MAJOR CITY GOALS -` ECONOMIC DEVELOPMENT: SALES TAX Task Date 13. . - 13. Explore the potential annexation of the McBride Property and Gap Property if the Dalidio 2/04 Property is annexed.. 14. Work with each retail area in the City to define itself and develop, when possible, niche- 9/04 marketing efforts. Work closely with property owner and businesses in each area. RESPONSIBLE DEPARTMENT Administration will be the lead department for this goal. The City Attorney's office will assist in the negotiations of various development "deals" that are a part of this goal. The Community Development and Public Works Departments will be involved in development review aspects of new projects and expansions. The Finance Department will provide support in preparing sales tax information and analysis. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Achieving this goal will require significant work on the part of the City's Economic Development Manager in addition to other ongoing duties. Additionally, contracting for economic analysis and assistance in negotiations on the San Luis Marketplace project will cost$20,000 in.2003-04 and$5,000 in 2004-05 from the General Fund. GENERAL FUND REVENUE POTENTIAL Increased sales tax revenues will result in additional General Fund Revenues. The San Luis Marketplace Project alone is projected to generate net new sales taxes between $1.0541.12 million annually (after a deduction for transfer effects); and the Costco project is projected to generate"net"new sales taxes of$500,000 annually. OUTCOME—FINAL WORK PRODUCT Upon completion of this work program, the City should be well positioned to be the regional retail center of the County and receive significant sales tax revenues. The City will also present diversified shopping opportunities for its residents, in particular in the general merchandise category as well as added shopping opportunities for visitors. Property owners may experience increased property values as existing retail areas improve. -43 - �� � 1 MAJOR CITY GOALS" LONG-TERM FISCAL HEALTH OBJECTIVE Develop a comprehensive strategy for preserving essential services, adequately maintaining existing facilities and infrastructure, and protecting the City's fiscal health. DISCUSSION Overview Accomplishing the Major City Goals for 2003-05 will require a continued commitment to protecting the City's long-term fiscal health. Given the significant fiscal challenges facing us based on the recently prepared five-year forecast, this will mean developing a comprehensive strategy for preserving essential services and adequately maintaining existing facilities and infrastructure, while at the same time protecting the City's fiscal health. Since the forecast is based on a"maintenance-only"Capital Improvement Plan (CIP),the challenge becomes even greater if the Council wants to achieve other important CIP goals, such as open space preservation, bikeway and pedestrian paths, pavement maintenance, other transportation system improvements, creek and flood protection, parks and public safety improvements. Background Results of the Five-Year Fiscal Forecast. As part of the goal-setting process for 2003-05, a detailed five-year forecast for the General Fund was prepared and presented to the Council in December 2002 order to assess the City's fiscal environment, and gain some initial insights on the "order of magnitude" difficulty we would likely experience in balancing the budget for 2003-05. The results showed that the City is facing our toughest fiscal outlook in many years. The forecast projected an ongoing budget gap of$5.5 million annually beginning in 2003-04, even if all we do is continue current service levels and adequately maintain existing facilities and infrastructure. While the forecast projected Projected Budget Gap:200348 a "one-time" carryover of $1.9 million (above MOW= our policy minimum) from 2002-03 that helps $1,000,000 offset this somewhat, the fact is that we are $o facing an ongoing problem, which means thatOne-Time (st,000,aao) 200 106 20014 200 ima 200 W =,4 "one-time" fixes won't work. We need to either ($2000OW) c°"'°"°` decrease costs or increase revenues (or some ($3,000.000) combination of the two)on an ongoing basis. ($•o00 000) Since then, we have updated the forecast to ($fi�0m) - reflect new information, most notably the ($,o00 OW) expenditure and revenue changes presented to ($e o00 ow) the Council in February 2003 as part of the Mid- oForecat:Decemher2W2 aFomce t:Reised-March 2003 Year Budget Review. As reflected in the sidebar chart, the ongoing shortfall has increased significantly, and the carryover from 2002-03 has decreased by $700,000. For 2003-05, assuming the use of the carryover (above our policy minimum), the gap increases by $1.2 million on an annual basis, to about $6.4 million. -44- a� g MAJOR CITY GOALS�­,i LONG-TERM FISCAL HEALTH Threat of More State Budget Grabs. The last time the State faced a similar budget crisis ten years ago, the result was that the City lost$1.5 million annually in State takeaways. While none are assumed in the forecast, the threat is very real, and if it happens, it will make our local situation that much worse. There are a number of ways that State can take funds away from us, but the "likely suspect" is the "VLF Backfill." Just a few short years ago, the State had a significant budget surplus, and it flirted briefly with the notion of a State tax cut. Instead, it decided to reduce city and county revenues by reducing vehicle license fees (VLF) by 65%. However, the State agreed to "backfill" these lost revenues, thus keeping cities and counties "whole." The cost to the State in meeting this commitment, which it can undo tomorrow, is $4 billion. For the City, the VLF Backfill is worth about $1.8 million annually. If this is taken away,our projected gap grows to$8.2 million annually for 2003-05. What Are We Doing About This? We have a Fiscal Heath Contingency Plan in place, and have already taken a number of cost saving steps, such as a hiring freeze and $1.8 million in budget reductions to-date. Additionally, as discussed below, along with the Major City Goal work programs, we are presenting the Council with our proposed budget balancing strategy for 2003-05 at the April 10, 2003 budget workshop. Assuming the problem stays about where it is as of March 2003, this proposed budget strategy will go a long way towards stabilizing our budget situation after 2003-05. However, it is based on a significantly reduced CIP that will not be good for the community over the long term. And funding a sufficient CIP beyond 2003-05 will be even harder, since the proposed budget-balancing strategy for 2003-05 uses projected reserves that are above our policy minimum (about$1.2 million). This won't be available after 2003-05: we can only use reserves once. Additionally, while many people say that they want"less government," the fact is that our surveys—and our daily experience—show that we face requests for more service, not less. So, while our immediate goal for 2003-05 is to "stop the bleeding," we will have to continue to work on ways of"re-tooling" the organization and developing new revenues if we want to meet our community's needs and hopes for the long term. Challenges We Will Face in Achieving this Goal Our short-term strategy for balancing the 2003-05 budget and closing the projected $6.4 million gap consists of the following four components: 1. Developing a General Fund that is the lowest possible Budget Balancing Strategy in reasonably maintaining our existing infrastructure and facilities. ❑ New Revenues 2. Using fund balance that is available above minimum 15% policy levels. a Reserves 3. Implementing selected new revenues as allowed under §% ❑cw Proposition 218.. 53% 4. Reducing operating program costs and related service ❑ levels. Operating Expenditures:76% Programs 23% Each of these components will be evaluated further and refined as we prepare the Preliminary Financial Plan. However, this short-term strategy will not serve us well in the longer term if we want to maintain current service levels, adequately maintain existing infrastructure and facilities, and achieve longer-term, already-adopted CIP goals. As such, we need to identify and implement other strategies for preserving service levels, achieving CIP goals and maintaining our fiscal health. These include: -45- r �-f MAJOR CITY GOALSW LONG-TERM FISCAL HEALTH 1. Organizational Vitality. Making our organization more productive, delivering current or higher levels of service for less in response to community needs. 2. Economic Development. Helping our economy perform better than our forecast projections. Generating additional revenues from two of out top three General Fund revenues—sales tax and transient occupancy tax—are both the topics of separate Major City Goals. 3. Legislative Advocacy. Getting back what was taken-away from us by the State; and preventing any further budget grabs like the VLF Backfill. Given the current State budget situation, we cannot rely upon restoring past State budget grabs from cities as either a short or long-term fiscal health strategy. . In fact, if are successful in simply minimizing any further State takeaways, we will have accomplished a significant feat. 4. Citizen-Supported Revenue Options. Developing strategies for a possible March or November 2004 election. ACTION PLAN In concert with the other two related Major City Goals of generating additional revenues from sales tax and transient occupancy tax, there are four proposed components to this action plan for long-term fiscal health: O Increase Organizational Productivity Staffing costs are the largest part of the City's budget, accounting for 75% of operating costs in the General Fund. Continuing our Organizational Vitality program, which identifies and supports methods of improving organizational effectiveness and customer service on an ongoing basis, is a key component of our long-term fiscal health strategy. © Continue Legislative Advocacy We need to continue working closely with our employee associations, the League of California Cities, other local governments, professional associations and other groups to prevent further State raids on city revenue sources. 0 Review and Monitor the City's Fiscal Condition Effective reporting and monitoring of the City's fiscal condition on an ongoing basis is an essential, fundamental component of managing our finances and assuring our long-term fiscal health. 0 Analyze the Feasibility of a.2004 Revenue Ballot Measure As noted above, the recommended budget balancing strategy for 2003-05 will go long way towards stabilizing our budget situation for the long-term, assuming the problem stays about where itis as of March 2003. However, it is based on a significantly reduced General Fund CIP that will not be good for the community over the long term. In short, without draconian reductions in day-to-day services, additional resources will be needed to address our long-term CEP goals—both to adequately maintain what we already have as well as to make reasonable progress in achieving our General Plan objectives. Proposition 218: The Need for Voter-Supported New Revenues. Under Proposition 218, which was approved by California voters in November 1996, new or increased general-purpose taxes require majority voter approval, and the measure must be held at the same time as Council elections. Special taxes require two-thirds majority approval, but the election can be held at any time. This means that any significant new revenues require community support—in evidence on Election Day. Gaining this support requires more than a compelling need: it also requires communicating this need in a compelling way. And this requires effective preparation by the City -46- �^ MAJOR • LONG-TERM FISCAL HEALTH before placing the measure on the ballot; and an effective community-based group that will campaign for its passage afterwards. The first pre-condition—effective preparation—is within the control of the City; the second one—an effective community-based group—is not. Background: Shift from Representative to Direct Democracy. For the past thirty years, California has been on the path to a new era of governance, with fundamental changes in the way that decisions—especially financial ones—are made. While this is occurring at all levels, this paradigm shift from "representative democracy" to "direct democracy" is perhaps most pronounced for local agencies, since they are the level of government closest to the people, and the one most susceptible to these changes. Proposition 13 did not start this trend, but it certainly resulted from it. Since its passage almost twenty-five years ago, there have been an increasing number of citizen-approved limits on the ability of elected officials at the local level to make resource decisions on behalf of the community. While Proposition 218 was the most recent (and sweeping)of these,it was simply the last in a long line of expenditure and revenue limitation ballot measures. There are a number of possible explanations for this change: 1. Lack of leadership (or at least the perception) by elected and appointed officials on important issues to the nation, state and community. 2. Increasing distrust of government in general. 3. Loss of community identity (and support)as places of work and home have become increasingly separated. 4. Increasing frustration with the inability to affect government at the state and federal level, and an over- compensation at the one level—local government—where voters feel they can make a difference. 5. Improved information about public issues,resulting in less reliance on others to make decisions on our behalf. 6. Increased influence of highly-organized and well-financed special interest groups through the initiative process. Whatever the reason, the reality is that there has been a major shift to direct citizen decision-making in a broad range of issues previously thought to be too "technical' for this. While this has occurred in a number of areas such as insurance and campaign financing; it is especially prevalent in "ballot box budgeting" Citizens are no longer willing to give their proxy on financial issues to elected officials, or to their interest group representatives on"blue ribbon"committees. City finance is an issue they want to decide directly for themselves. How does this paradigm shift affect the City's long-term fiscal health? Stated simply, the City will need broad- based community support—in evidence on Election Day—to implement new revenue sources. In this new model of direct democracy,creating support among elected officials and community leaders—even if it broadly crosses a number of interest groups — is no longer enough. With these profound changes in voter approval requirements, cities must communicate a compelling vision for new revenues at a grass roots level among likely voters. Even though this may seem a high-hurdle, many cities throughout the State have been successful in gaining voter approval for revenue measures, even at the two-thirds level. There are excellent examples here in San Luis Obispo County: the City of Arroyo Grande, Lucia Mar Unified School District, the City of Paso Robles and the City of Pismo Beach have all recently approved revenue measures requiring two-thirds voter approval. However; based on the experience of many other communities, achieving this support at the ballot box (the only place it matters) requires two key ingredients: a compelling vision of how the new revenues would be used; and an -47- MAJOR CITY GOALS" LONG-TERM FISCAL HEALTH effective way of communicating this vision to likely voters. Communities in California have been successful in generating broad-based voter support for new revenues when: 1. There has been a major community-wide focus on desired programs. In these cases, revenue increases have followed these "visioning"efforts, not driven them. Cities in this category come in a lot of sizes, and include El Cerrito, Duarte, Brea,Torrance and Claremont. 2. There are serious fiscal or service problems of crisis proportions. Locally, the passage of a bond issue several years ago in the Lucia Mar School District also falls into this category. Although they were driven by very different factors—hopes versus fears—all of these successful efforts share one thing.in common: they were the result of extensive community-based efforts, which included a combination of outreach tools, and professional assistance to use them effectively. Based on the experience of many cities and other local government agencies throughout the State, if the need is compelling and is effectively communicated, this effort is likely to be successful. However, it requires commitment, resources (more on this later), time, and most importantly, a strong community-based advocacy group that will aggressively raise funds and campaign for the issue once it is on the ballot. This last issue cannot be stressed enough. Under State law, cities have broad discretion in using their funds for professional assistance in researching issues, conducting surveys and developing voter support strategies. However, once an issue becomes a formal ballot measure, cities cannot participate as an advocate in any way. In short, unless there is a strong community-based group that is willing to aggressively raise funds and campaign for the measure,it is not likely to pass. Elements of a Successful Revenue Measure. There are three major steps in preparing for a successful revenue measure: 1. Feasibility assessment. Conduct scientifically-based public opinion research and assess the likelihood of a successful revenue measure. 2. Public information prograniL If the public opinion research is favorable, develop and implement a public information educational program on why new revenues are needed. 3. Ballot measure. Place the measure on the ballot if there is a community-based group that will aggressively campaign for its passage. The following further summarizes the components of each of these steps. It is important to stress that while the City can take the lead on these three tasks in preparing for the measure, once it is placed on the ballot we can no longer be an active participant in the process or commit resources to its passage in any way. For this reason even, though the results of the first two steps may have been very positive, placing the measure on the ballot should only occur if there is a community-based group has emerged that will campaign for its passage. Feasibility Asse�smerit The first step in preparing the feasibility assessment is to hire a qualified team of a public opinion research firm and a revenue measure advisor. The results of the public opinion research are invaluable in assessing at the very beginning if there is adequate voter support for a new revenue measure. While support can subsequently be built (or maintained) through an education program, if there is very low support initially, an education campaign is unlikely to be successful in gaining voter support on Election Day. -48- MAJOR GOALSNW LONG-TERM FISCAL HEALTH The public opinion survey will typically surface three key issues: 1. How does the community feel about the City and the services it delivers today? The experience from revenue measures in other communities show that it is very difficult to gain voter support for new revenues where there is already a high level of satisfaction with City services and trust in its government. In short,if voters do not feel that current revenues are being used wisely, they are not likely to approve more. 2. What programs are most likely to attract voter support? What do voters see as the biggest problems in the community, and would be likely to approve additional funding for: Public safety? Street maintenance? Parks and recreation? What messages would be most effective in community the need for additional resources? On the other hand, which service areas are least likely to attract voter support? And what are the reasons why voters would not support a revenue measure? 3. What revenues would voters most likely support? There is a wide range of new revenue options available to the City. Which of these is most likely to attract to attract the most voter support? And how does support change based on the rateand level of revenue generated? In the final analysis, each of these revenue options has underlying philosophical reasons that might make them desirable, such as added revenue diversity (like utility users tax), stability (parcel tax) or shifting the tax burden to non-residents (transient occupancy tax or sales tax). However, the best candidate for a successful measure is probably the one that voters are the most supportive of at the outset. Lastly, how would other competing revenue ballot measures or possible budget- balancing actions by other agencies(like the State)affect support fora City revenue measure? From the results of this research, the City can evaluate the feasibility of a revenue measure; and if it is, determine the elements of an effective education program (which is the next step). Completing this first step will cost $37,500 and take 90 to 180 days to complete. The City completed a similar analysis in May 2000 with theassistance of The Lew Edwards Group and Fairbank, Maslin, Maullin & Associates (FMMA). While the results were generally favorable, the Council decided not to go forward with a revenue measure at that time. Due to significant changes in the economic and fiscal environment since then, we do not recommend relying upon the results of this three-year old analysis. However, if we go forward with this analysis, we recommend retaining the same team based on the quality of their work and their familiarity with the City. Program Before placing a measure on the ballot, this next step is essential in communicating the need for additional revenues to likely voters. It would include: 1. Refining the new revenue purposes and uses, including selecting the financing mechanism and developing key messages. 2. Building community support,including developing and implementing a public education program. 3. Conducting additional public opinion research(tracking poll)to assess shifts in support. Refining the measure. Based on the result of the public opinion survey,the City will need to decide which items to fund in the measure. This includes making a key strategic decision: should this be a majority or two-thirds voter approval measure? On its surface, passage of a majority voter approval measure would appear "numerically"easier; however, since its proceeds cannot be earmarked for a specific purpose, it can be difficult to -49- a �� � MAJOR CITY GOALS LONG-TERM FISCAL HEALTH communicate the need for the measure, when in essence it calls for raising taxes for no particular reason. On the other hand, while it is obviously a greater challenge to gain two-thirds than majority voter approval, it has the advantage of communicating a more focused(and compelling)reason for added revenues. .In general, majority-voter approval measures are more successful when the purpose is to address a`fiscal crisis" in just meeting revenue needs to continue delivering essential day-today services. Two-thirds voter approval measure are more likely when the purpose is to improve services or make community improvements, like a police station,transportation improvements, senior center or athletic fields. One variation on this approach is the "AB" measure, which has been successfully used in a few cases. This is a dual-component measure: the "A" measure function is simply an "advisory" vote on specific projects, asking of voters would support certain uses if new revenues were to become available. The "B" measure asks voters to approve a general-purpose revenue measure, but in the context of the specific project or programs identified in Measure "A," with the expectation that elected officials would be committed ("morally" but not legally) to using the new general revenues for these specific purposes. As such, "AB" measures provide some specificity— although via a non-binding advisory measure—which can be appealing to the electorate. However, they need to be carefully structured from a legal standpoint; and because they are two separate measures with slightly different messages, it may be more difficult to conduct an effective campaign. In short, regardless of whether it is a majority or two-thirds measure, the City needs to communicate a compelling reason for why it needs added revenues. Developing key messages. Once the City has determined the basic strategy (majority or two-thirds voter approval) and refined the funding items, assigned costs and select a funding mechanism, key messages are developed that: 1. Address the need for such a measure: "Why now?" And make the case that this is a needed, fiscally responsible plan. 2. If a two-thirds measure, include specifics of the items to be funded. 3. Establish protections for ensuring money will be spent responsibly, such as outside audits and a Citizens Oversight Committee. Opinion leaders. Depending on the funding mechanism and uses identified for the measure,building community consensus is essential. Early in this process, key constituents, stakeholders, business leaders and other public officials should be contacted and their support, questions or opposition evaluated. This also begins to identify possible members of the community-based group that will be essential later in advocating for passage of the measure. Public information program. An effective public information program includes the following communications components: 1. Personal meetings with external "Opinion Leaders" to educate them on the funding needs.contained in the measure and obtain input. 2. A series of non-partisan, information-only mailings to Opinion Leaders, again about the City's funding needs. 3. A series of non-partisan, information-only mailings to constituents determined by the public opinion survey as needing more information about the City's funding needs. -50- ate. Now- MAJOR CITY GOALS"" LONG-TERM FISCAL HEALTH 4. A "free media" plan that includes (but is not limited to): non-partisan guest columns, `bp-eds" and stories in neighborhood newsletters or other local outlets about the City's funding needs. 5. Where appropriate, "fixed site visibility" activities where constituents and/or City representatives table or otherwise distribute non-partisan information about a potential revenue measure. 6. A Speakers Bureau primarily led by constituents to make presentations to key community organizations as needed. As part of the City's Media/Communications Plan, information-only fact sheets, brochures, letters, newsletters and guest columns are developed for mailing and distribution. Where time permits, these communications seek, citizen input in an "interactive"manner. Ideally,before placing a revenue measure on the ballot, the City's public information program has: 1. Shifted public opinion further towards support of a possible revenue measure. 2. Yielded letters and cards providing the City with guidance on how to further refine the measure. 3. Answered questions about the City's funding needs. 4. Generated greater community awareness before taking action to place a revenue measure on the ballot. Additional public opinion research. Following the public information program, the City should conduct another scientific public opinion survey—an abbreviated version also known as a"tracking poll"just before placing the measure on the ballot. The purpose of this tracking poll is a final"litmus test" in ensuring that there is substantial voter approval at this point, and confirm financial thresholds: that the City is not asking for too little or too much money for the measure. Conducting a tracking poll close to the time that the City makes a final decision in going forward with a ballot measure is the final opportunity to evaluate where the electorate is, and to make adjustments in the measure as necessary—including not going forward at all. Cost and timing. An effective public information program will take 90 to 180 days before placing a measure on the ballot, and cost $50,000 to $75,000 for direct mailings, tracking poll and professional assistance in preparing the public information program Placing the Measure on the Ballot The City's final action is to place the item on the ballot. As noted above, after this the City cannot commit any resources in advocating for its passage. For this reason even if all the other factors to-date have been favorable, the City should seriously consider not placing the measure on the ballot if by this time an effective community- based group has not emerged that will be campaign aggressively for its passage. Summary. Preparing for a successful revenue measure in this era of"direct democracy"requires an approach that will engage the City's voters in the decision-making process. Gaining this support—in evidence on Election Day—requires more than a compelling need: it also requires communicating this need in a compelling way. And this requires effective preparation by the City—doing our homework, and allocating adequate time and resources to this endeavor—before placing revenue measure on the ballot (which is within the control of the City); and an effective community-based group that will campaign for its passage afterwards (which is not). -51 - ^SSS MAJOR CITY GOALS` LONG-TERM FISCAL HEALTH Tasks and Schedule Task Date 1. . - 1. Organizational Productivity.Continue organizational vitality program in improving Ongoing productivity and customer service. 2. Fiscal Independence. Support AB 1412 (Wolk), which would allow local voters to Ongoing approve an increase of 0.25%or 0.5%in the local sales tax rate without special legislation. 3. Legislative Advocacy. Continue working closely with our employee associations, the Ongoing League of California Cities,other local governments,professional associations and other groups to prevent further State raids on city revenue sources. 4. Review and Monitor the City's Fiscal Condition. Continue to effectively review and Ongoing monitor the City's fiscal condition on an ongoing and timely basis,including on-line access to financial data,quarterly newsletters,focused reporting on key revenues,mid-year budget reviews and preparation of annual financial reports in accordance with generally accepted accounting principles and nationally recognized excellence in financial reporting guidelines. 5. Analyze Feasibility of Revenue Ballot Measure in 2004. Use professional assistance in analyzing the feasibility of a revenue ballot measure in March or November 2004: a. Enter into an agreement with The Lew Edwards Group. 7-03 b. Complete the feasibility analysis and present the results to the Council for a"go/no- 11-03 go"decision in taking the next step in preparing for a revenue measure in 2004. RESPONSIBLE DEPARTMENTS All departments play a critically important role in ensuring the City's long-term fiscal health through their management and use of City resources; however, Administration, Human Resources and Finance will be especially involved in achieving this goal. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL 1. Analyzing the feasibility of a 2004 revenue ballot measure will cost $37,500 in 2003-04 from the General Fund. All other tasks can be achieved within existing resources. 2. Depending on the results of this analysis, an additional $50,000 to $75,000 will be needed from the General Fund in 2003-04 if we proceed to the next step in this process of conducting a public education program. GENERAL FUND REVENUE POTENTIAL Each of these action plans is designed to enhance General Fund resources. OUTCOME—FINAL WORK PRODUCT Strategies, programs and systems for assuring our long-term fiscal health in continuing current service levels, adequately maintaining existing infrastructure and facilities, and accomplishing important community goals. -52- p� 'J