HomeMy WebLinkAbout06/17/2003, PH 3C - ADOPTION OF 2003-05 FINANCIAL PLAN Council Mi�
6-17-03
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CITY O F SAN LUIS O B I S P O
FROM: Ken Hampian, City Administrative Officer
Bill Statler, Director of Finance
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SUBJECT: ADOPTION OF 2003-05 FINANCIAL PLAN
CAO RECOMMENDATION
Adopt a resolution approving the 2003-05 Financial Plan and 2003-04 Budget.
DISCUSSION
Overview
After thirteen Council workshops and hearings beginning in September of 2002, the 2003-05
Financial Plan is ready for adoption. Stepping back from the many details in our budget, it is
appropriate to ask ourselves: what have we accomplished over the past ten months?
The answer is: a great deal. We have prepared a fiscally prudent plan that will guide our efforts
over the next two years in delivering important services to our community, maintaining and
improving City facilities, and embarking on new initiatives that will make San Luis Obispo an
even better place to live, work and visit. We have prepared a Financial Plan that:
1. Closes a $7 million General Fund budget gap in a responsible, balanced way. As
highlighted in the General Fund five-year forecast presented to the Council in December
2002, we were facing an estimated budget gap of $7 million—almost 20% of the General
Fund—without corrective action. The Financial Plan closes this gap: we now have a
balanced budget that maintains the General Fund reserves at our policy level of 20% of
operating expenditures. Moreover, the Financial Plan closes this gap in a_.-resp_on_s_ible,
balanced way that effectively positions us for an uncertain fiscal future.
2. Preserves basic services and adequately maintains what we already have. While
expenditure reductions play the leading role in balancing_the budget, we have been able to do
this in a way that preserves core services and takes care of what we already have. Compared
with many cities in California, even with these reductions, we will still deliver a high level of
service and infrastructure maintenance.
3. Meaningfully invited community involvement, and responds to what we heard. Through a
number of vehicles, including the community forum preceding Council goal-setting, the.
informal-but-revealing community survey, and the many budget workshops and hearings we
have held over the past ten months, we have heard from literally hundreds of people in the
community about what they believe are important priorities for the City. The 2003-05
Financial Plan is responsive to input we received.
Adoption of 2003-05 Financial Plan Page 2
4. Responds to Council Goal-Setting. As shown in the sidebar below, the Council's Major
City Goals closely mirror those expressed by the community during the budget process. All
12 of the Major City Goals adopted by the
Council are reflected in the Financial Plan based
on the detailed work programs approved by the
Council in April. • Long-Term Water Supply
• Street and Sidewalk Maintenance
• LOVR/Highway 101 Improvements
5. Is Fiscally Prudent. While there are a number of a Bikeway Improvements: Railroad
financial uncertainties and challenges ahead of Safety Trail
us, the fact remains that the Council will adopt a • Therapy Pool
balanced budget that retains our fiscal strength: • Housing
• Neighborhood Wellness
operating revenues fully cover operating costs; . South Broad Street Corridor Plan
the General Fund balance is maintained at policy • Downtown Improvements: Monterey
levels; and our debt obligations remain low by Plaza
national standards. • Economic Development:Transient
Occupancy Tax
• Economic Development: Sales Tax
Another form of "balance" we have achieved is . Long-Term Fiscal Health
between responding to Council goal-setting,
delivering day-to-day services, adequately
maintaining existing facilities and infrastructure, planning for the future, and protecting
against an uncertain future.
6. Was Accomplished with Employee Involvement and No Regular Staff Lay-Offs. We
extensively involved and engaged our employees throughout the organization, both in
communicating the problem and in generating thoughtful solutions. This process resulted in
over 500 "bright ideas for dark times" from employees from all departments in the City.
Many of these are reflected in the budget-balancing strategy approved by the Council, and
many others are undergoing further review of the "in-the-pantry" ideas that may be brought
to bear on challenges facing us in the longer-term. We have worked very closely with the
leadership of our employee associations, and we will continue doing so. They have been
very helpful and supportive in this process.
We also balanced the budget without any regular staff lay-offs. Although we did not
recommend staffing reductions based solely on which positions are vacant—this was done on
a service impact-priority basis, and vacancies happen due to serendipity—vacancies did
provide added organizational flexibility. And creating this flexibility was the underlying
reason for the hiring restrictions that have been in place for the last eighteen months. In
short, while we were not driven by vacancies in reducing costs, it was our conscious goal to
avoid regular staff lay-offs. Of the 8.5 regular positions included in the operating cost
reductions, none of them will result in regular staff lay-offs.
7. Recognizes the Uncertainties Ahead. We have done all this within strategies that recognize
the uncertainties of the current economic environment and the State budget process.
In short, we can take pride in adopting a budget that sets forth a clear work program that
accomplishes important community goals in a fiscally responsible way. We can take pride in a
budget process that—while technically rigorous—is much more than just a financial review
Adoption of 2003-05 Financial Plan Page 3
process: one that links what we want to accomplish for our community over the next two years
with the resources necessary to do so.
We can take pride in a budget process that meaningfully involves the community, and where
Council goal-setting drives the process, not follows it. We can take pride in a process that looks
to the future by setting operational plans for two years, and capital improvement plans for four
years. In summary, we can take pride in completing an intensive planning process that will set
our course for the next two years in a fiscally responsible manner.
The staff wishes to thank the Council for your leadership and support throughout this long and
difficult process.
Changes to the Preliminary Financial Plan
General Fund
Based on Council direction from the workshops and public hearings on April 10, May 6, May
22, May 27, May 29 and June 3, the following summarizes General Fund expenditure changes
from the Preliminary Financial Plan:
General Fund Revisions: 2003-05
2003-042004-05 Total
KCPR contract cancellation (1,000) (1,000) -70,0_070
Continue park trash collection in-house 20,100 20,100 40,200
Insurance -
Liability (160,200) (160,200) (320,400)
Workers compensation 49,300 50,600 99,900
Workers compensation: Golf 900 900 1,800
Engineering pick-up truck (16,000) (16,000)
Public Art at 3/4% rather than 1/2% 8,900 5,500 14,400
Increase: CIP Reserve 182,100 182,100
Total $84,100 $84,100 $0
Other Funds
The following summarizes revisions in other funds from the Preliminary Financial Plan:
Other Fund Revisions: 2003-05
00 2004-05
Equipment Replacement Fund Signal Maintenance Lift Truck 70,000
Downtown Association Workers Compensation 100 100
Water Fund Workers Compensation 5,300 5,300
Sewer Fund Workers Compensation 5,000 5,000
Parking Fund Workers Compensation 1,300 1,300
919 Palm Garage Operations 79,500
Transit Fund Workers Compensation 200 200
Whale Rock Workers Compensation 700 700
3C- 3
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Adoption of 2003-05 Financial Plan Page 4
Other Financial Plan Revisions
In addition to the budget changes summarized above, we will also make the "narrative changes"
and corrections discussed with the. Council at prior meetings. At the June 3 meeting, the
Council directed changes to the work program for the Monterey Plaza major City goal.
Provided in Attachment 2 is a legislative draft of the proposed change.
Final Documents
After Council adoption of the Financial Plan, we will prepare and distribute a final version
reflecting all approved changes from the Preliminary Financial Plan. Based on these changes,
we will also revise and distribute a final version of Appendix B: Capital Improvement Plan.
Additionally, we will prepare a Budget-in-Brief that highlights the City's budget process, key
budget features, major City goals and basic "budget facts." This budget summary is widely
distributed and is published on the City's web site.
Ongoing Monitoring
Adoption of the Financial Plan is the beginning—not. the end—of a continuous financial
management process. Ongoing monitoring efforts include:
1. Interim Financial Reports. On-line access to "up-to-date" financial information is provided
to staff throughout the organization. Additionally, comprehensive financial reports are
prepared monthly to monitor the City's fiscal condition, and a concise but comprehensive
report is issued on a quarterly basis. These are complemented by special reports such as the
quarterly Sales Tax Newsletter, Monthly TOT Report and Monthly Investment Report.
2. Goal Status Reports.. Formal reports are provided to the Council on an ongoing basis on
status of Major City Goals, other important objectives and CIP projects. These are
supplemented by ongoing updates through Agenda reports, Council Notes and other special
reports.
3. Mid-Year Budget Reviews. The Council formally reviews the City's financial condition and
makes "course corrections" as needed six months after the beginning of each fiscal year.
4. Financial Plan Supplement for 2004-05. While we prepare a two-year Financial Plan,
appropriations are still made annually. As such, we will return to the Council in June 2004
for formal approval of the 2004-05 Budget. However, these "second year" appropriations
will be based on the foundation developed during the two-year planning and budgetary
process. In short, the Supplement is much like our mid-year budget reviews, and focuses on
changes since adoption of the Financial Plan.
5. Comprehensive Annual Financial Report. This year-end report shows the final results of
the City's financial operations for all funds. It includes :audited financial statements by the
City's independent certified public accountant as well as a comprehensive "transmittal
memorandum" highlighting key trends and findings about the City's financial condition.
Adoption of 2003-05 Financial Plan Page 5
Budget Process Review
Once the dust has settled for a few months on this Financial Plan process, we will review areas
where it went well, and areas where we can improve in the future. Three areas we will want to
follow-up on are the new concepts we introduced with the 2003-05 Financial Plan: the value of
the "two-step" process in developing advisory body recommendations; if the "setting the table"
workshop we held in November met the Council's goal for a meaningful opportunity for the
Council and community to review and discuss the status of longer term goals, policies and plans
in laying a better foundation for the goal-setting process; and the break-out group approach we
used for the Community Forum. After completing this review, we will return to the Council
with recommendations for the 2005-07 Financial Plan process.
ATTACHMENTS
1. Resolution approving the 2003-05 Financial Plan and 2003-04 Budget
2. Revised major City Goal work program for Monterey Plaza
G:Budget Folders/2003-05 Financial Plan/Preliminary Budget/Agenda Reports/Adoption of 2003-05 Financial Plan
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Attachment
RESOLUTION NO. (2003 SERIES)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
APPROVING THE 2003-05 FINANCIAL PLAN AND 2003-04 BUDGET
WHEREAS, the City Administrative Officer has submitted the 2003-05 Financial Plan to
Council for their review and consideration in accordance with budget policies and objectives
established by the Council; and
WHEREAS, the 2003-05 Financial Plan is based upon extensive public comment and
direction of the Council after scheduled budget study sessions and public hearings.
NOW, THEREFORE, be it resolved by the Council of the City of San Luis
Obispo that the 2003-05 Financial Plan is hereby approved and that the operating, debt service
and capital improvement plan budget for the fiscal year beginning July 1, 2003 and ending June
30, 2004 is hereby adopted..
On motion of , seconded by
and on the following roll call vote:
AYES:
NOTE:
ABSENT:
the foregoing Resolution was passed and adopted on June 17, 2003.
Mayor David F. Romero
ATTEST:
Lee Price, City Clerk
APPROVED:
at P. Lowell, City Attorney
POLICIES AND OBJECTIVES
MAJOR CITY GOALS—DOWNTOWN IMPROVEMENTS: MONTEREY PLAZA
OBJECTIVE conceptual design, and has suggested another design
for consideration. The Council reviewed work-to-
Pursue the creation of a "Monterey Plaza" for civic date on this, including the former design team's
gatherings and passive recreation, dependent upon alternative ideas, at a study session on May 1, 2001
the start-up of the Copeland's Court Street retail-
commercial and the Palm-Morro parking projects. Challenges We Will Face in Achieving this Goal
DISCUSSION 1. Cost will be a major issue and that will almost
certainly keep the project from being developed
Background along with the County Government Center
expansion now underway. To the extent that
The 1993 Conceptual Physical Plan for the City's presently programmed under-street
Center (Downtown Plan) recommends that a public improvements can be developed with adequate
plaza be created on Monterey Street and that it be depth to provide clearance for the possibility of
closed to traffic for special events. When the an inverted street drainage system, the timing
County initiated its current effort to construct a new should not be an insurmountable problem.
administrative complex, the Council authorized staff 2 Part of the proposed plan is the occasional or
to hire that project's architect, Kaplan-McLaughlin permanent closing of Monterey Street for the
Diaz (KMD), to prepare concept drawings for a block between Santa Rosa and Osos streets.
public plaza. Drainage, traffic flow and costs are not This would create some circulation issues that
part of this workscope. would not be simple to resolve and will surely
The location of the new County Administrative create some opposition from business owners in
Center vis-a-vis the existing County Government the Downtown.
Center may exacerbate jywalking between the 3. If the option is chosen to change the description
buildings and pose an. increased pedestrian safety of a project from providing for temporary or
problem if Monterey Street remains open to through periodic street closure to full closure, amending
vehicular traffic. The opening of the Copeland/City the Downtown Plan may encounter opposition..
parking structure with ingress and egress from Palm
Street suggests that south-bound traffic on Monterey ACTION PLAN
Street could be diverted via Santa Rosa Street to
Palm in order for traffic to enter three major parking Task Date
facilities which will then exist between Osos and 1. Consultant completes concept plan. 7-03
Chorro Streets..
2. Council reviews concept plan and 9-03
Additionally,prior citizen input has been supportive forwards it for advisory body review.
of open space-nark uses in this quadrant of 3. After advisory body and public review, 7-04
downtown and in making downtown more Council identifies preferred design
pedestrian-friendly. Closure of Monterey Street concept(s) and establishes the scope of
between Santa Rosa and Osos may achieve these technical and environmental studies
concepts and convert both the street right-of-way the.
underutilized forecourt of the County- Government (such g circulation,access,utility and
drainage analysis, and project phasing)
Center into a totally integrated plaza. for additional study.
KMD has provided several preliminary sketch plans 4. Consultants complete technical and 6-05
and is working with the staff to produce a final environmental studies, and project
concept for consideration by the Council (see action design is modified as necessary to
plan, Task 1 below). The former Downtown Plan address findings.
design team has also provided input to the
B-55
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MAJOR CITY GOALS—DOWNTOWN IMPROVEMENTS: MONTEREY PLAZA
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.
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 2004-05.
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).
B-56
Allen Settle-Preserve greenbelt funds
RECEIVED
From: "Michael Miller' <vmmil@charter.net> JJN I ,7 2003
To: <dromero@slocity.org>, <cmulholland@slocity.org>, <asettle@slocity.o >
<jewan@slocity.org>, <kschwartz@slocity.org> 5LO CIN CLERK
Date: Sun, Jun 8, 2003 8:11 AM
Subject: Preserve greenbelt funds
To Mayor Romero and Honorable City Councilmembers:
I believe that the creation and preservation of greenbelts around urban areas leads to cost
savings in other budget areas such as social services, mental health and other
healthcare services by providing an alternative to our busy lifestyles for
recreation, solace and peace of mind.
Open spaces provide an outlet for these purposes.
I urge you not to cut the$200,000 a year allocation for open space
acquisition from the budget. To rely on grant funding will put the entire
future of open space acquisition at risk. Continued funding is essential to making
progress.
Sincerely,
Vita Miller
1205 Bay Oaks Drive
Los Osos, CA 93402
805-528-5926
RED FILE
MEETING AGENDA
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Dave Romero- Four year plan for Open ` ;e Funding. ,__._.___
From: Jan Marx<janmarx@fix.net>
To: Allen Settle<asettle@cal poly.ed u>, John Ewan <jewan@alteryourenergy.com>,
Christine Mulholland <cdev@thegrid.net>, <dromero@slocity.org>, <kschwartz@slocity.org>
Date: Sat, Jun 14, 2003 9:11 PM
Subject: Four year plan for Open Space Funding
If you are serious about continuing open space funding for the next four
years, I request you allocate$100, 000 per year for the next four years RECEIVED
to that budget item. If you decide on a ZERO allocation, that sends a I 17 2003
message that open space allocation is the first thing to go in a budget JJI�
crunch. The citizens of SLO treasure open space above most else. ItCIT` CLERK
brings in tourist dollars. The program is an overwhelming sucess. $�-�
Please do the right thing on Tuesday night. I will not be in town, so I
cannot testify. Each of you has stated in campaign rhetoric that you
support the open space program. If you do not follow up with real
dollars, your credibility will be seriously in question. Thank you, Jan
Howell Marx
RED FILE
MEETING AGENDA
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i Allen Settle Budget Hearing Input — Page 1
From: Helene Finger<hfinger@cal poly.edu>
To: <asettle@slocity.org>
Date: Mon, Jun 9, 2003 12:18 PM
Subject: Budget Hearing Input
RECEIVED
Dear Alan Settle,
1 am writing today to encourage you to continue long term funding of JUN 17 20031
Open Space acquisition and protection at the$200,000 level. This SLO CITY CLERK
funding is essential to the continued success of SLO in receiving
matching grants for Open Space. The Open Space program has historically
brought in four dollars for every one dollar spent. Reducing the
funding in this area is akin to"spending a dollar to save a dime"-
financially it does not make sense. In order to continue to take
advantage of the grant funding that is available SLO must continue our
general fund contributions. I know that the city has a budget crisis,
but reducing general fund contributions to Open Space will result in a
further 4 times reduction in income! Please look to reductions in
spending that won't also reduce our income.
Thank you for taking the time to read my concern.
Helene
Helene Finger, Professional Civil Engineer
Women's Engineering Program Director RED FILE
California Polytechnic State University NIG AGENDA
San Luis Obispo, CA 93407
(805) 756-2350 DATE ( DLJ ITEM #
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