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04/19/2005, BUS 1 - MAJOR CITY GOAL WORK PROGRAMS FOR 2005-07
councit M'.knD' 4-19-05 j agenda Report '�N I CITY OF SAN L U I. S O B I S P O FROM: Ken Hampian, City Administrative Officer Wendy George, Assistant City Administrative Officer SUBJECT: MAJOR CITY GOAL WORK PROGRAMS FOR 2005-07 CAO RECOMMENDATION Review, modify as desired and tentatively approve major City goal work programs for 2005-07. DISCUSSION Background At the January 29, 2005, budget workshop, the Council established sixteen goals organized into three priority categories:Major City Goals, Other Council Objectives, and Address as Resources Permit. The purpose of the accompanying work programs for the Major City Goals is to link the adopted goal statements with action plans and the resources needed to achieve the objective by: 1. Clearly defining and scoping the work program. 2. Ensuring that there is a clear understanding of the means selected to pursue the goal. 3. Converting the general goal into specific action steps so we can measure progress in achieving it. The Introduction section of the attached report discusses the purpose, background, organization and content of the work programs. It also summarizes the cost and funding sources for these programs, and highlights proposed "objective" revisions for two of the Major City Goals: Downtown and Traffic Congestion Relief. Additionally, it contains a section highlighting the assumptions staff has made in developing the work programs. It is important that the Council be comfortable with these assumptions, as changes to them could significantly alter the proposed work programs. 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 2005-07 Financial Major City Goal Work Programs for 2005-07 Page 2 Plan in its entirety in June 2005, after extensive workshops and public hearings. However, if the Council believes that some of the work programs are too ambitious—or do not go far enough— then we need this direction now. Given the pressures we see on the General Fund budget and staff resources, 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 19, 2005. Key next steps in the budget review process are: Budget Review Schedule Date 1. Preliminary Financial Plan issuance May 19 2. Budget workshop: Financial Plan overview and General Fund operating programs May 26 3. Budget workshop: General Fund CII'projects May 31 4. Budget workshop: Enterprise Fund programs,projects and rates June 2 5. Continued budget review June 7 6. Continued budget review and budget adoption June 21 FISCAL IMPACT There are no direct fiscal impacts associated with tentatively approving major City goal work programs: conceptual approval of work programs is not approval of the budget. As discussed above, this will only occur with adoption of the Financial Plan in June, following issuance of the Preliminary Financial Plan and extensive budget workshops and hearings. Nonetheless, this is a very important step in the process: with this direction, staff will be certain we understand the Council's intent, and we can prepare the Preliminary Financial Plan accordingly. 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 2005-07 I:\Budget 2005-07\Major City Goal Work Programs\Agenda Report-April 19,2004.doc I - a 2005=07 Financial Plan MAJOR CITY GOAL WORK PROGRAMS April 19, 2005 city of san tuis oBi spo e - 3 2005-07 Financial Plan MAJOR CITY GOAL WORK PROGRAMS Table of Contents INTRODUCTION MAJOR CITY GOAL WORK PROGRAMS Overview 1 Infrastructure Maintenance Background 1 Organization: Goal Priorities 2 Infrastructure Maintenance 8 Content 2 Objective Revisions 2 Transportation Work Program Assumptions 3 Traffic.Congestion Relief 14 Next Steps 4 Bikeway Improvements 21 Summary 4 Leisure,Cultural &Social Services SUMMARY OF COUNCIL GOALS Cooperative Use of Sports Facilities 26 Major City Goals 5 Community Development Other Council Objectives 5 Open Space Preservation 30 Address As Resources Permit 6 Economic Development: MAJOR CITY GOALS COST SUMMARY Sales &Transient Occupancy Tax Revenues 33 Downtown 38 Cost and Funding Summary 7 General Government Long-Term Fiscal Health 49 COUNCIL •A INTRODUCTION OVERVIEW Purpose of the Work Programs. The goals set by the Council drive the budget preparation process. However, before the staff can build the Preliminary Major City goals for 2005-07 and the related work Financial Plan around Council goals, it is essential programs reflect an action plan for the next two that we have a clear understanding of what the years resulting in General Fund operating and Council hopes to achieve with each goal over the capital costs of about $3.4 million. Over 60% of next two years. Accordingly, the purpose of each this ($2.1 million) is for street and sidewalk work program is to: maintenance – and this reflects a two-year decrease of$1.1 million from 2003-05 levels (which, in turn 1. Define and scope the adopted goal. reflected significant reductions from 2001-03, which 2. Ensure that there is a clear understanding of the fully funded Pavement Management Plan means selected to pursue the goal. recommendations). 3. Convert the general goal into specific action As the Council is aware, we are facing our toughest steps so we can measure progress in achieving fiscal outlook in many years. However, based on it. the proposed "Strategic Budget Direction" that is also being submitted to the Council at the April 19, This is especially important in the case of objectives 2005 budget workshop, with its focus on adequately where fully achieving the goal is likely to extend maintaining what we already have and preserving well beyond the two-year Financial Plan period. essential services, we should be able to fund the However, we can measure progress—and our proposed work programs. success in accomplishing the goal—by clearly defining the specific actions we plan to undertake BACKGROUND over the next two years. Conceptual Approval of the Work Programs. The purpose of the City's Financial Plan process is Tentative Council approval of the work programs at to link the most important,highest priority things for this stage is not formal approval of either the goal or us to achieve for our community over the next two the budget for it. This will not occur until the years with the resources necessary to do them. Council approves the 2005-07 Financial Plan in its entirety in June 2005, after extensive workshops and For this reason, the City begins its budget process public hearings. with Council goal-setting. This follows an extensive effort to involve advisory bodies and the community Other Program Objectives. The Preliminary in this process. It also follows consideration of a Financial Plan (which we plan to issue on May 19, number of analytical reports such as the General 2005) will also include the "Other Council Fund Five-Year Fiscal Forecast and comprehensive Objectives" and "Address as Resources Permit" updates on the status of long-term plans and items set by the Council as part of the goal-setting policies, current major City goals and capital process. It will also include departmental objectives projects. proposed by the staff for improving the delivery of City services. These are different from Council- The accompanying work programs have been initiated goals in two important ways: prepared based on the Major City Goals set by the Council at an all-day workshop held on January.29, 1. Council goals are generally focused on 2005. objectives .that can only be successfully achieved through Council leadership, support and commitment; program objectives proposed by staff are typically more internally focused on 1 i � S_ COUNCIL GOALS INTRODUCTION improving day-today operations, and can CONTENT usually be achieved through staff leadership, support and commitment.. The work programs are organized by functional 2. Achieving Council goals has a higher resource area: infrastructure maintenance, transportation, priority. leisure, cultural & social services, community development and general government. Each work Each of the 73 operating programs presented in the program provides the following information: Preliminary Financial Plan will clearly identify major City goals, other Council goals and other 1. Objective. program objectives. 2. Discussion., including the proposed workscope, ORGANIZATION: GOAL PRIORITIES related work accomplished in the past and challenges we will face in achieving the goal. 3. Action plan detailing specific tasks and schedule The goals approved by the Council in January 2005 for the next two years. When applicable, likely are organised into the following priorities: "carryover and spin-off' tasks beyond the next two years are also discussed. 1. Major City Goals. These represent the most 4. Responsible department. important, highest priority goals for the City to accomplish over the next two years,and as such, 5. Financial and staff resources required to achieve resources to accomplish them should be the goal. included in the 2005-07 Financial Plan. 6. General Fund revenue potential, if any. If the work program approved by the Council 7. Outcome—final work product at the end of the for a Major City Goal is not included in the next two years. CAD's Preliminary Financial Plan, compelling reasons and justification must be provided as to OBJECTIVE REVISIONS why resources could not be madeavailableto achieve this goal. In general, we have retained objectives as originally 2. Other Council Objectives. Goals in this adopted by the Council in January 2005. In a few category are also important for the City to cases, we have made very minor changes for accomplish, and resources should be made improved clarity and grammar that have no affect on available in the 2005-07 Financial Plan if at all the Council's intent. In two cases, however, we are possible. recommending changes that are somewhat more than just, "wordsmithing": Downtown and Traffic 3. Address As Resources Permit. While it is Congestion Relief. desirable to achieve these goals over the next two years, doing so is subject to current As originally adopted by the Council, the resource availability. Downtown goal read as follows: As approved by the Council, detailed work Make downtown improvements, with emphasis on programs have only been prepared for the Major pedestrian lighting. City Goals; the other goals will be presented to the Council in the context of the Preliminary Financial Because the City recognizes the importance of the Plan, downtown to both to our economic health and to the community's quality of life, even in difficult fiscal -2 COUNC IL GOALS INTRODUCTION times we believe that our goal should be to continue WORK PROGRAM ASSUMPTIONS the high level of support that we currently provide to the downtown, and to look for opportunities to expand that support and add improvements In developing the work programs for the 2005-07 wherever we can, given the available resources. Major City Goals, staff has made a number of basic Accordingly, we have proposed changing the assumptions that direct the manner in which the language of the goal somewhat to broaden it and programs are written. It is important that these acknowledge the need to carry on what we currently assumptions be carefully considered, and accepted do in such areas as maintenance, economic by the Council, as changes to them could development and public safety, in addition to what significantly affect the proposed work programs. limited physical improvements we can make. The These assumptions are: proposed new language is: 1. The City's financial resources are limited. Continue the City's traditionally strong support for the downtown in multiple areas, such as 2. The 5-Year Fiscal Forecast is built around a maintenance, economic development, public safety, maintenance-only Capital Improvement Program parking and tourism promotion, including progress (CIP) and so new capital initiatives should be on the installation of pedestrian lighting and other extremely limited. _ improvements as resources allow. i 3. The Forecast CII' clearly stated it did not The work program has been built around this include intersection improvements, railroad broader goal, while still acknowledging the crossings, new bikeways or pedestrian paths, the Council's desire to start a program for installing Mid-Higuera Plan or the Railroad Area plan. pedestrian lighting. Any new General Fund expenditures in these areas will increase the forecasted budget deficit The Traffic Congestion Relief goal's original for the next two fiscal years. language was: 4. Engineering staff resources are likely to be Aggressively pursue projects to relieve traffic reduced as a result of expenditure cuts needed to congestion with particular emphasis on outside close the budget gap. funding. 5. Work programs for goals that will use the same As discussed in the goal's work program, we will be staffing resources, such as engineering, have able to make good progress on required preliminary been cross-referenced and integrated so that as a studies and design for several large traffic group, they will not exceed resource capacity. congestion relief projects, however, given staffing Examples are the Downtown, Infrastructure and fiscal restraints, the City will likely be unable to Maintenance, Bikeway Improvements and move into the actual construction phase on any of Traffic Congestion Relief. As a result, work them. Accordingly, to more accurately reflect the programs have been scoped accordingly. work program,the goal has been modified to read: 6. Whenever possible, staff has looked for creative Continue efforts to improve traffic flow, safety and ways to accomplish goals without using City reduce congestion throughout the City. funds, and instead using entrepreneurism, community collaboration, outside funding, and volunteers. -3 - ( ^ INTRODUCTION 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 19,2005. SUMMARY There are no direct fiscal impacts associated with tentatively approving the major City goal work programs. Formal approval of the work programs will not occur until the Council approves the Financial Plan in its entirety in June 2003, 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. 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- ` O COUNCIL •A SUMMARY OF MAJOR CITY GOALS AND OTHER IMPORTANT OBJECTIVES MAJOR CITY GOALS 7. Downtown. Continue the City's traditionally strong support for the downtown in multiple These represent the most important, highest priority areas, such as maintenance, economic goals for the City to accomplish over the next two development, public safety, parking and tourism years, and as such, resources to accomplish them promotion, including progress on the installation should be included in the 2005-07 Financial Plan. of pedestrian lighting, and other improvements as resources allow. Infrastructure Maintenance General Government 1. Infrastructure Maintenance. Continue to 8 Long-Term Fiscal Health. Continue maintain City infrastructure, such as roads, sidewalks, water, sewer, storm drainage and developing and implementing along-term plan parks, at a moderate level. that will deliver desired service levels, adequately maintain existing infrastructure and Transportation facilities, and preserve the City's long term fiscal health. 2. Traffic Congestion Relief. Continue efforts to OTHER COUNCIL OBJECTIVES improve traffic flow, safety and reduce traffic congestion throughout the City. Goals in this category are important for the City to 3. Bikeway Improvements. Continue efforts to accomplish, and resources should be made improve bicycling in the City, including available in the 2005-07 Financial Plan if at all completion of the Railroad Safety Trail, Bob possible. Jones City-to-Sea Trail and the Bill Roalman Bicycle Boulevard. Transportation Leisure,Cultural and Social Services 9. Upper Monterey Street Parking. Identify parking solutions for the upper Monterey Street 4. Cooperative Use of Sports Facilities. Support area so that the area can be included in the the Joint Use Committee in further redeveloping parking district and zoned to Downtown school district sports facilities. Commercial. Community Development Leisure,Cultural &Social Services 5. Open Space Preservation. Continue funding 10. Laguna Lake Park. Move forward on Laguna open spade acquisition and the natural resources Lake Park Master Plan implementation. program; maintain and enhance open space, creeks and riparian habitat; and continue "SLO 11. Community Partnerships: Adobe Preservation Stewards" program and collaboration with and Railroad Museum. . Work with conservation organizations. community partners to seek funding for the protection and improvement of adobes and 6. Economic Development: Sales and Transient development of railroad museum. occupancy Tax Revenues. Encourage and promote projects and programs that will Community Development increase sales tax and transient occupancy tax revenues. 12. Housing. Aggressively follow-up on adopted Housing Element by supporting affordable -5 - I_ 1 COUNCIL •A SUMMARY OF MAJOR CITY GOALS AND OTHER IMPORTANT OBJECTIVES housing program implementation, pursuing grant sources and processing subdivisions in approved areas efficiently and effectively. 13. Neighborhood Services. Continue neighborhood services programs and move forward with Neighborhood Wellness/Community Participation Plan. 14. Broad Street Corridor Plan. Promote South Broad Street corridor planning and improvements. ADDRESS AS RESOURCES PERNUT While it is desirable to achieve these goals over the next two years, doing so is subject to current resource availability. 15. Neighborhood Street Tree Planting. Develop and implement neighborhood street tree planting programs with community"planting days." 16. City Gateway Enhancements. Develop concept plans for City gateway enhancements that can be achieved by community groups, neighborhood organizations or other outside funding resources. � - 10 MAJOR CITY GOALS- --COST AND FUNDING SUMMARY The following summarizes operating program and capital improvement plan costs to achieve the major City goal work programs and proposed funding sources. MAJOR CITY GOAL COST AND FUNDING SUMMARY Cost Summary By Goal Operating Programs Capital Improvement Plan 2005-06 2006-07 2005-06 2006-07 Infrastructure Maintenance 273,400 260,900 4,265,100 3,838,400 Traffic Congestion Relief 1,898,800 236,200 Bikeway Improvements 133,500 989,500 Cooperative Use of Sports Fields 6,000 30,000 Open Space Preservation 150,000 150,000 Economic Development: Sales&TOT Tax Revenues Downtown 25,000 10,000 83,000 95,000 Long-Term Fiscal Health 47,500 Total 1 $351,9001 $270,90011 $6,560,400 1 $5,309,100 Cost Summary By Funding Source Operating Programs Capital Improvement Plan 2005-06 2006-07 2005-06 2006-07 General Fund 351,900 260,900 1,528,100 1,258,400 Transportation Impact Fees 303,500 900,700 Water Fund 1,500,000 1,500,000 Sewer Fund 1,300,000 1,125,000 Parking Fund 10,000 Grants and Other Outside Sources 1 1,928,800 1 525,000 Total $351,900 $270,900 $6,560,400 $5,309,100 -7 - l \ MAJOR CITY GOALS— INFRASTRUCTURE MAINTENANCE OBJECTIVE Continue to maintain City infrastructure, such as roads, sidewalks_, water, sewer, storm drainage and parks, at a moderate level. DISCUSSION Background During the past few budget cycles, the City has devoted a significant amount of resources to infrastructure maintenance. Regular projects to replace aging sewer and water lines, repair City facilities, repair sidewalks, repair streets,add handicap ramps,repair bridges and remove silt from creek channels have helped the City avoid unexpected repairs. With a Council philosophy that we should take care of what we already have,this goal strives to make the most of limited General Fund resources in order to survive the next two years of reduced funding. A combination of Capital Improvement Plan (CIP) projects and work performed by City crews will make essential repairs to City infrastructure, but will not make gains on a backlog of maintenance in the street paving, storm drainage and bridge maintenance areas necessary to keep our infrastructure in a good state of repair, as might be expected ordinarily when adequate funding is available. Paving (General Fund). In 1998, the City adopted a new Pavement Management Plan (PMP). Since then, the City has closely followed the PMP and by June 30, 2005, we will have completed one cycle of the City providing recommended maintenance on all of the City's streets with the exception of arterial street maintenance. Due to budget constraints, the level of funding for pavement maintenance was reduced for the 2003-05 budget to Pavment Condition Index: 1998 to 2007 approximately $1.5 million per year. With Proposed Level of Funding in 2005-07 This reduction had the effect of putting 7s.o on hold the Council's stated goal of 75.0 Estimated achieving a citywide Pavement 74.0 Condition Index (PCI) of 80 by 2008. 73.0 - To illustrate the effect that the reduction in funding to the street 72.0 reconstruction program has had, the 71.0 sidebar chart shows the changes in the 70.0 PCI for the corresponding change in 69.0 annual funding levels: 68.0 The amounts expended in previous 67.0 co Cn o 8 n years do not have an immediate effect R @ 8 8 8 $ 9 8 88 8 on the PCI. A reduction (or increase) in funding would be reflected in the PCI two years after the funds have been allocated. The reason for this is that the project is typically constructed at the end of its funding year, and the improvement is not reflected until the pavement is surveyed later in the following.year. As part of the proposed budget-balancing strategy for 2005-07, the amount proposed for street paving and reconstruction(about$500,000 annually) will be insufficient to prevent a further decline in the PCI. The sidebar chart shows the impact of this proposed level of funding on the PCI. On one hand,the level will fall somewhat in 2005-07. On the other hand, we have made significant progress in improving the condition of our streets since -8- 1 - I � i MAJOR CITY GOALE�___ INFRASTRUCTURE MAINTENANCE 1998; and even with the projected decline in 2005-07, we will be at a higher level of pavement condition than before we started this program. However, this underscores the importance of allocating added resources after 2005-07: without them,the PCI will continue to fall,and become much more expensive to correct in the future. With the proposed reduction in funding, the work program for 2005-07 emphasizes major pavement repair on City arterials rather than resurfacing. In other words, we recommend suspending the area paving rotation and concentrate strictly on the highest priority repairs. If adequate funding is available, our goal will be for the street reconstruction and resurfacing program to resume its cycle in Area 1 starting in July 2007 (the 2007-09 Financial Plan) in order to meet the City's commitment to residents and businesses for regular pavement maintenance and improved City streets. Sidewalks (General Fund). The sidewalk program for 2001-03 included maintenance of existing sidewalks and installation of new sidewalks,consisting 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 in high pedestrian use areas associated with the pavement management program. 3. Installation of$200,000 of new sidewalks in conjunction with designated pavement maintenance areas. Due to budget constraints, the 2003-05 Financial Plan did not fund the installation of new sidewalks, putting this program on hold until better fiscal times. Storm Drains and Bridges (General Fund). Storm drain pipe repair will receive modest amount of funding in the two year Financial Plan to repair known problems. Bridges will also receive a modest amount of funding to perform some recommended maintenance. Water and Sewer Lines (Enterprise Funds). The Water and Sewer Funds are enterprise funds, entirely supported by the City's water and sewer fees and charges (including development impact fees). Therefore, we are able to allocate adequate levels of funding over the next two years. Water mains, sewer mains and related facilities are assumed to have a useful service life of 50 years. This results in an ongoing replacement schedule that roughly corresponds with 2% of the system each year. This is a general `rule of thumb", however, as the City has facilities in service that are over 100 years old. Databases are maintained that track the age, material and condition of the water and sewer infrastructure. Projects are selected to provide the greatest relief from emergency repairs and maintenance demands on operating staff. Parks and Urban Forest (General Fund). The City maintains 25 park facilities involving 156 acres (including the new Damon-Garcia sports fields). We also maintain about 5 acres of landscaped areas around City buildings. The work includes mowing turf, maintaining irrigation systems, managing playground equipment, maintaining restrooms, preparing ball fields and trimming and managing the health of 23,000 trees. Minor CEP projects (less than $15,000) for repair and maintenance have typically been included in the operating budget for the Parks and Landscape program. The Urban Forest program has also relied on contract tree trimming services ($30,000 per year) to supplement City staff. Some noticeable reduction in maintenance may occur over the next two years, as the same staff further stretches to meet growing needs with fewer resources. As mentioned in the Downtown Major City Goal, an Urban Forest Management Plan will be developed, and implementation begun during the 2005-07 budget period. The intent of the plan is to begin the process of identifying, pruning, removing and -9- ( - 13 MAJOR CITY GOALS INFRASTRUCTURE MAINTENANCE replacing large trees in the downtown core a few at a time to reduce tree hazards, create a safe environment and avoid the need for large-scale replacements by waiting for trees to die. Challenges We Will Face in Achieving this Goal 1. Reduced Engineering Staffing Levels. The reductions recommended to balance the budget for 2005-07 are likely to include not filling a vacant engineering staff position. Capital improvement projects will have to be prioritized in order to deliver the most important infrastructure maintenance projects. Staff time will be split between General Fund projects and Utility funded projects. The project workload has been coordinated with the Major City Goals to be certain that staff will be able to accomplish the Action.Plan tasks outlined below. 2. Street Paving. Funding for ongoing pavement maintenance is critical if the PMP is to succeed. As mentioned above, Areas 1 through 8 have received the fust round of street reconstruction and resurfacing as envisioned in the PMP. As noted above, the repair-only strategy will cause the overall PCI to decrease by about 0.5 per year. To prevent further declines in the future, it is critical to resume the eight-year rotation plan of the PMP as soon as funding can be secured. 3. Sidewalk Replacement and Repair. Sidewalk removal and replacement is an essential and beneficial program in that it provides the means to make our sidewalks safer for citizens and reduces liability and claims against the City. City staff actively monitors sidewalks for deficiencies and problems but can only make temporary repairs. 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. 4. Staff Resources in Maintenance Divisions. For the past ten years, staffing levels in the Streets, Parks, Tree, Building and Fleet Maintenance Divisions have remained unchanged. Increases in staff and contract services have not followed increases in inventory, so the consequence has been that staff has had to adjust maintenance practices and crew assignments in order to keep up with the increased workload. This has resulted in longer response times to customer service requests, deferral of routine maintenance projects and longer durations between maintenance activities. For the next budget period, this trend will continue, as no new resources are being allocated to the maintenance divisions for increases in staff. Continued General Fund Revenue Shortfalls. The passage of Proposition lA is likely to stop further State takeaways, but without additional revenues, or with less than expected revenues, there could be continued reductions to the street reconstruction and resurfacing budget during the second year of this Financial Plan. Further progress to mitigate the decline of the City's overall pavement condition could be delayed. ACTION PLAN Pavia 1. Perform pavement repairs on City streets using City crews. Ongoing 2. Pursue State grant funding for pavement projects. Ongoing 3. Complete two CIP projects to perform pavement repair on arterial streets Citywide. 6/07 Repairs will be limited to.grinding out and replacing failed pavement, but will not include overlays or reconstruction of streets. - 10- i ' (, � — I `f MAJOR CITY GO ALS INFRASTRUCTURE MAINTENANCE Sidewalks 4. Monitor the condition of existing sidewalks, with City staff making temporary repairs. Ongoing 5. Repair damaged sidewalks,curbs and gutters using City crews. Ongoing 6. Establish permit requirements to expedite sidewalk repairs required of private property 12/06 owners. 7. Complete two CIP projects to retrofit existing curbs for disabled access using Community 6/07 Development Block Grant (CDBG)funds. Storm Drains 8. Perform creek/storm drain cleaning annually using City crews. Ongoing 9. Complete CEP project to rehabilitate culvert under Augusta Street. 6/06 10. Complete two CIP projects to replace a number of drainage inlets in order to improve 6/07 flood protection. 11. Complete silt removal CIP projects at Marsh Street and Prefumo Creek. 6/07 Water and Sewer 12. Complete six CIP projects for wastewater collection system improvements based on the 6/07 Utilities Department priorities. 13. Complete two CIP projects for water distribution system improvements based on the 6/07 Utilities Department priorities. 14. Complete two CIP projects for polybutylene water service replacements based on the 6/07 Utilities Department priorities. Parks 15. Replace pool cover at the swim center. 6/06 16. Continue to maintain parks and street trees at a moderate level, within existing resources. Ongoing 17. Begin maintenance and operation of the Damon-Garcia sports fields by transferring full- 7/05 time City staff, and backfilling with contract maintenance. 18. Complete a Downtown Urban Forest Management Plan. 1/06 19. Implement.Phase 1 recommendations of the Downtown Urban Forest Management Plan. 6/07 Other 20. Complete bridge deck maintenance CIP project at Marsh and Toro Street bridges. 6/06 21. Complete design for Marsh Street bridge repair CIP project. 6/06 22. Complete design for roof replacement CIP project at Corporation Yard admin building. 6/07 f MAJOR CITY GOALS'- INFRASTRUCTURE MAINTENANCE Task Date 23. Perform moderate level of building and facility repairs annually using City crews. Ongoing 24. Install electrical service fusing on City-owned street light fixtures. Ongoing RESPONSIBLE DEPARTMENTS Public Works and Utilities FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL 1. CIP Projects. General Fund resources will continue to be programmed each budget year to provide for CIP support and construction costs. Water and sewer enterprise funds will provide for CIP support and construction each year as well. City engineering staff will perform design and inspect the construction of identified CIP projects. 2. Ongoing Maintenance Activities. City crews will perform the bulk of the work in order to provide a moderate level of infrastructure maintenance. With the exception of increased resources for the Damon- Garcia Sports Fields, no additional maintenance resources are planned at this time as part of the 2005-07 Financial Plan. Cost Summary Operating Programs Capital ImprovementPlan 2005-06 2006-07 2005-06 2006-07 Damon-Garcia Maintenance 273,400 260,900 85,100 Bridge Deck Maintenance 105,000 Marsh Street Bridge Repair(Design) 8,400 Sidewalk Repair 45,000 45,000 Street Reconstruction and Resurfacing(includes$75,000/year for downtown Paving) 1,025,000 1,025,000 Augusta Culvert Rehabilitation 35,000 Drainage Inlet Replacements 25,000 25,000 Pool Cover Replacement 15,000 Silt Removal 80,000 45,000 Reroof Corp Yard Admin Bldg(Design) 15,000 Sidewalk Ramp Construction (CDBG) 75,000 75,000 Water Distribution System.Improvements 1,250,000 1,250,000 Polybutylene Water Service Replacements 250,000 250,000 Sewer Collection System Improvements 1,300,000 1,125,000 Street Light_ Electrical Service Boxes 1 1 50,000 1 50,000 Total $ 273400 1 $ 2609900 $ 4,3409100 1 $ 399139400 _ 12_ 1 - I (P MAJOR CITY GOALS-- INFRASTRUCTURE MAINTENANCE GENERAL FUND REVENUE POTENTIAL There is no potential General Fund revenue to be achieved with this goal. If staff is successful in securing a grant for pavement repair or some other work,a corresponding amount of General Fund revenue may become available for another use,or more projects can be completed. OUTCOME—FINAL WORK PRODUCT Implementing the Action Plan will provide for a moderate level of infrastructure maintenance. Pavement repairs will result in extended street life, but reductions to street resurfacing will result in less attractive streets throughout the community for bicycle, transit and vehicle users. The suspension of the Pavement Management Plan will reduce the overall Pavement Condition Index. Some sidewalks will have been repaired or replaced and some comer curbs will have been retrofitted for disabled access. Water distribution and wastewater collection systems will be more reliable because of the completion of the listed CIP projects. Parks will be maintained at a moderate level with an emphasis on safety, particularly in the playground areas. Street trees will also be maintained at a moderate level with an emphasis on safety and longevity and the Downtown Urban Forest Management Plan will assist in our long-term planning for trees in the downtown core. i MAJOR • TRAFFIC CONGESTION RELIEF OBJECTIVE Continue efforts to improve traffic flow, safety and reduce traffic congestion throughout the City. DISCUSSION Background Public Works is responsible for identifying traffic problem locations and solutions to relieve traffic congestion and safety problem locations throughout the City. Sometimes this results in providing additional capacity (as outlined in the Circulation Element) to accommodate current and future traffic demands anticipated by both the City and County. At other times this may result in small scale operational improvements to the street system, traffic striping or signage, signal coordination system, bicycle and pedestrian improvements or mass transit service changes. As a continuation of these efforts, the City will be pursuing a number of small, large and very large capital improvement projects. A separate Major City Goal —Bikeway Improvements - looks to accomplish several non-motorized transportation and access improvement projects that will help relieve congestion. Public Works will continue to monitor congestion, safety and modal splits of the City by conducting bi-annual surveys and counts of traffic and travel patterns. This information will be used to prioritize projects and recommend other congestion relief effortsthatmay be necessary as the City and adjacent communities develop. On a small scale, the City has planned to signalize the intersections of Broad and Pacific Streets, as well as the intersections of Johnson and Ella Streets and Higuera and Granada Streets. As part of the Costco project, Garcia Drive will be extended across the Pacific Beach High School property to align with the new signal at Los Osos Valley Road (LOVR) and Froom Ranch Way allowing for better access into the south Oceanaire neighborhood and new shopping area. Large scale projects include future widening of regionally significant roadways,specifically: Mid-Higuera Street, Orcutt Road, Santa Barbara Street, and Prado Road. All four of these projects have multi-phase implementation schedules, with much of the work over the next two years devoted to completing environmental, preliminary design and property acquisition. Some operational improvements will be made at the LOVR and Highway 101 interchange and at the Tank Farm Road and Route 227 (Broad Street) intersection. As part of the Costco project, Calle Joaquin South will be relocated and realigned with Calle Joaquin North at LOUR. A new traffic signal will be constructed and coordination timing along LOVR will improve. Very large scale projects include projects that cannot be completed within the next two year period because of their complexity and long-term implementation requirements. However, continuing to pursue environmental, preliminary design and necessary property acquisition will be the objective during the 2005-07 Financial Plan. Projects in this category include the Prado Road and LOVR Interchange reconstructions, widening of the Prado Road Bridge over San Luis Obispo Creek, and the extension of Prado Road from Higuera Street to Broad Street. Unfortunately, due to major delays to State,Federal and local funds, many of these projects are now significantly under-funded. During the next two year period, staff will be able to complete much of the required advanced development work, which is essential to keep these projects moving forward. However, our ability to move into the next phase of actual construction currently seems unlikely without additional funding sources. - 14- MAJOR CITY GOALS TRAFFIC CONGESTION RELIEF Challenges We Will Face in Achieving this Goal. 1. Reductions recommended to balance the budget for 2005-07 are likely to include not filling a vacant engineering staff position. Reduced engineering staffing levels will affect the number of projects that can be accomplished. The Capital Improvement Plan (CII') workload has been coordinated with the Major City Goals to be certain that staff can accomplish the Action Plan tasks outlined below. 2. Extremely limited City, State and Federal funding will not permit projects to be fully funded in a timely manner unless additional revenue sources are secured. 3. Existing (and potential future) delays to State funding has resulted in significant project cost increases that may not be recoverable, will be difficult to backfill using City resources or funding, and may continue indefinitely. 4. Large and very-large scale projects are highly complex and have diverse environmental, property acquisition and land development issues. 5. During the next two year period, staff will be focusing on completing required environmental clearance, some right-of-way acquisition and project design for some congestion relief projects. This work will keep these projects on track for the time being. However, when it is completed at the end of this Financial Plan period, there is unlikely to be any funding available for actual construction. 6. While staff will be moving forward to complete studies and designs for major projects,because of unavailable construction funding, the City may later find that work done now is no longer usable, due to the passage of time. 7. Because of funding commitments to the Prado Road Interchange and Prado Road Bridge Widening, and the inability of the General Fund to advance construction funding by debt financing, other projects such as Orcutt Road widening, LOUR Interchange Improvements and Higuera Street widening must await accumulated Transportation Impact Fees (TIF) for construction — which will take a long time and may jeopardize existing funding. 8. In 1992 as part of the approval of the current TIF fee program, Council reduced the retail and hotel TIF fees by 50% to reflect sales and transient occupancy tax (TOT) benefits of development projects. However, this 50% results in an under-funded TIF program 9. Large scale projects are primarily contingent on new private development (Marketplace, Costco, Irish Hills, and Margarita Area Specific Plan) and as such, the market will dictate schedules which may be beyond City control. IO.It now appears that many partially funded grant projects (Orcutt, Santa Barbara Street and Railroad Safety Trail) may have been backfilled by Federal dollars at the State level to assist the State budget issues. The net result that anticipated CEQA clearance will now need to be federalized (including right of way acquisition) will increase project costs above those contained in the 2005-07 Financial Plan. A lack of transportation funding will continue to be the most critical obstacle to delivering the large and very large congestion relief projects that will be necessary to meet Council and community objectives. In addition, State delays to outside transportation funding for some projects such as Orcutt Road and Higuera Street widening have resulted in significant increases to project costs that must now be remedied without having access to additional transportation funding sources. If anything, this trend will continue as the State of California attempts to solve its own budget problems. To partially address this issue, staff has worked to revise the current TIF program to better reflect the new costs of these capital projects and pass on the appropriate share to new development. Unfortunately, based upon - 15- r - H MAJOR CITY GOALS TRAFFIC CONGESTION RELIEF historical revenue trends ($400,000 - $500,000 per year), even with a revised TIF rate, it is unlikely that more than one large scale project can be pursued without looking at an alternative funding source such as debt financing or ballot measure initiative.Both of these alternatives will not occur in the next two years and may ultimately never occur. Complicating these issues is the fact that two projects, Orcutt Road and Higuera Street widening, have existing, partially funded grants that have been secured, and significant delays to the projects may endanger the grants from a lapse of funding perspective. Because of these complications, it is hoped that for the next two year period; we can continue to pursue completion of environmental, design and property acquisition. Because of likely reductions in the Engineering Division, some of the advance development work, including the design, may need to be contracted out to meet project timelines for grant purposes. The very large scale Prado Road and LOVR Interchanges and the Prado Road extension from Higuera to Broad Street are related to new development projects. The Prado Road interchange will be designed and built by the Marketplace with the intention of beginning construction in early 2006. The City will continue to pursue the ultimate design of the reconstructed LOVR Interchange but it may be until summer of 2006 before a Caltrans Project Report can be certified by Caltrans and the City. As such, as development pressure along LOVR continues, there may be the need to identify and then pass on phases of the ultimate project (similar to what has been done for Calle Joaquin Relocation)to improve the facility and mitigate development traffic increases. The extension of Prado Road through the Margarita Area will be constructed by the properties located within the Margarita Area Specific Plan (MASP) area and will begin design and environmental in 2006-07. Construction level design will begin in 2006-07, with construction of the roadway occurring no sooner than calendar year 2007. Issues regarding the financing mechanism for the extension will be resolved in summer 2005 as part of project development and scoping. ACTION PLAN Mid-Hi uera Street Widening 1. Complete National Environmental Policy Act(NEPA)document to secure funding for 12/05 design and construction. 2. Complete preliminary design and resolve access issues. 12/05 3. Begin property acquisition negotiations if funding is available. 2/06 4. Complete final project design with in-house staff. 6/07 5. Pursue additional funding as needed to complete Mid-Higuera.widening project-Marsh to Ongoing High Street. Orcutt Road Widening 6. Review and process EIR for the Four Creeks rezoning project which includes widening of 7/05 Orcutt Road from McMillan to UPRR tracks. 7. Complete California Environmental Quality Act(CEQA)/NEPA environmental review. 5/06 - 16- I i MAJOR CITY GOALS TRAFFIC CONGESTION RELIEF Task Date 8. . - 8. Complete design—Duncan to Laurel Lane with in-house staff. 8/06 9. Pursue additional funding as needed to complete Orcutt Road widening project-Duncan Ongoing to Laurel Lane. Santa Barbara Street Widening 10. Complete NEPA/CEQA environmental review. 3/06 11. Re-appraise needed right-of-way from properties on the east side of Santa Barbara using 3/06 Federal requirements. 12. Complete property acquisition from adjacent property owners (subject to State allocation). 9/06 13. Hire consultant and complete project plans and design(grant funded). 12/06 14. Pursue additional funding as needed to complete Santa Barbara widening. Ongoing Prado Road Bride Widening 15. Complete CEQA environmental review. 3/06 16. Complete NEPA environmental review of Bob Jones Bicycle Trail at Prado Road. 9/06 17. Complete design of Prado Road Bridge widening project 6/07 Prado Road Extension 18. Work with west side Margarita Area Specific Plan (MASP)property owners to resolve Ongoing funding issues and outline project development schedule. 19. Begin environmental review and technical studies by MASP property owners. 7/05 20. Begin project plans, specification and estimates (PS&E)by MASP property owners. 7/05 21. Complete CEQA environmental review. 2/06 22. Complete PS&E by MASP property owners. 9/06 Prado Road Interchange(If the Marketplace Project Goes Forward) 23. Work with Caltrans,the developer and other stakeholders to resolve drainage and other Ongoing environmental issues required by Caltrans. 24. Complete Caltrans environmental review and approval. 9/05 25. Complete Caltrans Project Report,plan, specifications &estimates (PS&E). 2/06 26. Begin construction of Prado Road interchange. 11/06 Signalization of Broad Street and Pacific Street Intersection 27. Begin construction. 7/05 17- � — MAJOR CITY GOALS'-- TRAFFIC CONGESTION RELIEF Task Date 28. Complete construction. 12/05 Si alization of Johnson Avenue/Ella Street Intersection and Ili era/Granada 29. Complete environmental review and project design. 11/05 30. Begin construction. 3/06 31. Complete construction. 8/06 Los Osos Valley Road Interchange 32. Complete Phase 1 of the Caltrans environmental and Project Report process. 7/05 33. Hire consultant to prepare the final Caltrans environmental and Project Report. 7/05 34. Begin CEQA/NEPA EIR/EIS process and hire EIR/EIS consultant. 7/05 35. Complete Calle Joaquin Realignment project. 11/05 36. Complete EIR/EIS. 6/07 37. Implement phase improvements as new development is approved and can be identified. Ongoing Tank Farm Road Intersection Improvements 38. Initiate design of Tank Farm Road widening project. 6/06 RESPONSIBLE DEPARTMENT The Public Works Department will be responsible for achieving this goal and completing the identified tasks. The Natural Resources Manager, City Biologist and Community Development Department will assist with environmental issues that may arise on each of the various projects. The City Attorney will assist with land acquisition and the Finance and Information Technology Department will assist with funding mechanisms. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL The chart below summarizes the funding to-date by source already approved for these projects (if any), the amount proposed for 2005-07 by source based on the Action Plan and the future amounts needed by source to complete the projects, except for the following three projects, where there are unique funding circumstances: 1. Prado Road Interchange. The phasing of this project is dependent upon the results of the April 26 election. In the event that the three ballot measures related to the Marketplace project are approved by the voters, this $22 million project has a dedicated source of funding composed of Mello-Roos district bonds ($15.4 million) and TIF revenues ($6.6 million, to be financed through a bond funded by TIF fees but issued through the General Fund). 2. Prado Road Extension. This$10 million project will be funded through Margarita Area impact fees. 3. Calle Joaquin Relocation. This $3.1 million project will be built by Costco and funded through a reimbursement agreement of LOVR sub-area fees approved by the Council on October 7,.2003. 1 - 18- MAJOR-CITY • TRAFFIC CONGESTION RELIEF All Other Projects Project 2005-07 Finanical Plan Future To-Date 2005-06 1 2006-07 Years_ Total Mid-Higuera Widening - Transportation Impact Fees 352,400 236,200 3,155,300 3,743,900 Grants 287,600 963,800 1 1,251,400 Total 640,000 963,800 1 236,2001 3,155,300 4,995,300 Orcutt Road Widening _ Transportation Impact Fees 591,000 1,745,400 2,336,400 Grants 202,500 _ 590,000 1 1 792,500 Total 793,5901 590,000 1 1 1,745,400 1 3,128,900 Santa Barbara-Street_Widening, Grants 450,000 1 450,000 Total 450,000 450,000 Prado Road Bride Widening Transportation Impact Fees 1 680,000 5,000,000 1 5,680,000 Si -alization of Broad @ Pacific Intersection General Fund 75,000 75,000 Parldng Fund 80,000 80,000 Total 155,6061 1 1 1 155,000 Signalization of Johnson @ Ella Intersection Housing Authority Contribution 50,000 50,000 Transportation Impact Fees 15,000 15,000 Developer Mitigation Fee 100,000 100,000 Total 165,000 165,000 Si tion of South Higuera @ Granada Intersection Transportation Impact Fees 1 180,0001 1 180,000 Los Osos Valley Road @ Highway 101 Interchange Direct Developer Contributions 600,000600,000 Transportation Impact Fees 170,000 1,600,000 1,770,000 LOVR Sub-Area Fees 6,400,000 6,400,000 Grants 279,000 8,000,000 8,279,000 Total 1,049,0001 16,000,000 17,049,000 Tank Farm Road @ Broad Intersection Improvements Ai ort Area Impact Fees 1 25,000-1 350,000 375,000 TOTAL $3,767,500 1 $1,898,800 1 $236,200 1, $25,900,7001 $31,803,200 GENERAL FUND REVENUE POTENTIAL Many of these projects are needed to mitigate previously and currently approved new development projects that are TOT or sales tax generators. New revenue generating development projects will need to mitigate their impacts, which may include phasing of capital improvements projects or advancing construction of these congestion relief projects. 19 f a3 M-AJOR CITY GOALS` TRAFFIC CONGESTION RELIEF OUTCOME—FINAL WORK PRODUCT The primary goal of this work program is to continue the development of these critical capital improvement projects during a very dire fiscal funding time. Because transportation funding is extremely limited it is hoped that we will continue to move forward on each of the projects during the next two years. Some facilities will be designed and constructed, existing facilities will be, improved, and funding sources will be sought in order to accommodate existing and future traffic demands. Most projects will need additional funding allocations during the`but'years to complete construction or construct phased improvements. -20- I MAJOR CITY GOALS--' BU SWAY IMPROVEMENTS OBJECTIVE Continue efforts to improve bicycling in the City including completion of the Railroad Safety Trail, Bob Jones City-to-Sea Trail and the Bill Roalman Bicycle Boulevard. DISCUSSION Background The Transportation Division of the Public Works Department is responsible for bikeway improvements in the City. In the past several years, the City has completed construction of an important piece of the Railroad Recreational Trail (Phase 1 and 2) providing the City's first Class 1 bikeway adjacent to the railroad tracks between Orcutt Road and the San Luis Obispo train station.. Additionally, the City has updated the Bicycle Transportation Plan and constructed miscellaneous bikeway improvements identified in the Plan, developed and adopted conceptual plans for the Railroad Safety Trail and Bob Jones City-to-Sea Trail,designed and constructed Phase 1 of the Bill Roalman Bicycle Boulevard on Morro Street, and made efforts to promote bicycling and public education about bicycling through media campaigns and special events such as Bike to Work Week. Finally, late last year the City gained Union Pacific Railroad's (UPRR) conceptual approval of plans for the Railroad Safety Trail on identified sections of UPRR property. Project Descriptions Railroad Safety Trail,Phase 3. The City will finalize license agreements with UPRR for sections of the Railroad Safety Trail (RBST) that are located on the west side of the railroad tracks on UPRR property between Santa Rosa Street(Amtrak Station) and Marsh Street. R.R.Safety Trail Phase 3 \t \ -21 - 0 ' - MAJOR CITY GOALS : iA r r • • r NN \ f� '`` -' �♦� r � ���.♦♦ice♦��;�`l+ns jar Ilr���+ E 1 �y <; r#lt•INl a •r �lj�la � ...�►i����■ ���`,�. �`= =11111= ::;G�; � � �rerrrr� lIIII RUN I�'`a �Il� tr,�■111 IIIIII�III:: ' =111 �inr �iilpll±llllll flHOW 111111 ulmlm 51 ®fir �� .'Ipr�G ..� ■ No �� .1111rr�np r rf� • WA INNIS �..rye. rftli• .._. Eli e�•'� �'� +N11Pr,...... �� �I ,Lam:_�.. �1a, � �i �� � ��� • •r • r• . •• • • •• •1 • • : ••jonAmWea •r • r ela �`�/lilt♦ HHI�_ ►1 11 .�... -- �,3. � df nurun ) l5.ux.non.n..� ~ MAJOR CITY GOALS BH SWAY IMPROVEMENTS Bill Roalman Bicycle Boulevard, Phase 2. The City will complete the design and construction of Phase 2 of the bicycle boulevard which includes signage, striping, traffic control modifications and bulbouts along Morro Street between Santa Barbara and Marsh Streets to further encourage bicyclists to utilize this low volume residential street as an alternative route instead of using Osos Street into the downtown. `�`}v�.<C �.-�r j'\%tea r�uerua�_Mw�o svm�i`��ys�`�\'i"y\�✓"��� `--. /:' \i, ` i/ \ \ \.�r'\i�\ \``. •�� v Ohl ;� '1dA� "�'�� �,�..�.�`..Y '{�.>'' l +r.r •.�'\?'4�Sr^', ,Y 1.1��,\\\: 4�v`t \, �•-\'-J`1 '�\ /o Y. Ra➢ro His \<` \„y t'.%�Y/S�y `"'•;� nary♦ • .n DIIDiG BouiMaiY Old Toem ♦ r \ Hi50oriC Ostr¢f Bo�ry i r t =r � .: � �! �/��\./.ice` \r�\V�"✓,;`�'���`\l'" .{--._.� �� � , �v�� —'--�+i i+ � Miscellaneous Bikeway Projects. The City will complete miscellaneous bikeway improvements identified in the City's Bicycle Transportation Plan; complete the second phase of the Bicycle Transportation Plan update; and continue bicycling marketing and educational efforts. Challenges We Will Face in Achieving this Goal. 1. Maintaining the current level of support at a time of diminishing staff and financial resources. 2. Negotiating with UPRR on the license agreements and fencing design/placement. 3. Completing the NEPA document for the Bob Jones City-to-Sea Trail section that is included in the Los Osos Valley Road interchange project and sections of any other bikeways that receive federal funding.. 4. Funding miscellaneous bikeway improvements is very cost effective when it can be done in conjunction with other City activities such as pavement maintenance. If activities such as restriping City streets are postponed due to budget constraints; fewer bikeway improvements can be made. 5. Finding qualified consultants to assist the City in our marketing and educational efforts. SLO Regional Rideshare has provided these services in the past; however, they have not expressed an interest to continue, so the City is looking to the Bike Coalition to provide these services. -23- MAJOR CITY GOALS BIKEWAY IMPROVEMENTS ACTION PLAN Task Date Railroad . - Railroad Safety Trail-Phase 3 1. Complete land survey and prepare legal description of area for license agreement. 12/05 2. Complete negotiations and execute license agreement with UPRR for use of their property 6/06 for the RRST bikeway. Railroad Safety Trail-Phase 4 3. Complete construction drawings for Phase 4 on City property between Hathway Street and 6/07 Foothill Boulevard and begin construction. Bob Jones City-to-Sea Trail 4. Complete NEPA document to secure funding for Phase la. 6/06 5. Complete design of Bob Jones City-to-Sea bike trail,Phase la. 6/07 6. Further develop design concepts and funding for other sections of the Bob Jones trail. 6/07 Bill Roalman Bicycle Boulevard, Phase 7. Complete design of the Bill Roalman Bicycle Boulevard. 6/06 8. Complete construction of the Bill Roalman Bicycle Boulevard. 6/07 Other Projects that Improve Bicycling 9. Complete miscellaneous bicycle facility improvements identified in the Bicycle Ongoing Transportation Plan,as resources permit. 10. Seek funding for the construction of bikeways within the City. Ongoing 11. Complete the second phase of the Bicycle Transportation Plan update. 6/06 12. Continue bicycling marketing and educational efforts. Ongoing RESPONSIBLE DEPARTMENT The Public Works Department will be responsible for achieving this goal and completion of the identified steps. The Natural Resources Manager, City Biologist and Community Development Department will assist with environmental issues that may arise on the Bob Jones City-to-Sea Trail project. The City Attorney's office will assist with Union Pacific Railroad negotiations. -24- I MAJOR CITY GOALS BUCEWAY aPROVEMENTS FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL The financial and staff resources needed to complete this goal have been and will be included in the Public Works Department operating and capital improvement plan (CIP) budgets. Transportation Impact Fees (TIF)and grant funding are expected to pay for these bikeway improvements. The City will hire a consultant to complete the needed land survey and prepare the legal descriptions. The City may hire a consultant to prepare construction documents if in-house staff is not available. Bob Jones-Ci1y to-Sea Trail. $640,000 in grant monies has been approved as part of the 2003-05 Financial Plan for this project. Cost Summary Operating Programs Capital Improvement Plan 2005-06 2006-07 2005-06 2006-07 Bicycle Facility Improvements 25,000 25,000 Bill Roalman Bicycle Blvd Phase 2 25,000 85,000 Railroad Safety Trail-Phase 3 25,000 391,000 Railroad SafetyTrail Phase 4 58,500 488,500 Total - -_ $ 133,500 1.$ _9899500 GENERAL FUND REVENUE POTENTIAL This project will not result in increased General Fund revenues directly, but by providing improvements for bicycling, it is hoped that impacts to the City's roadway system will be reduced and less monies will be needed for roadway paving and widening. OUTCOME—FINAL WORK PRODUCT Bicycling will be enhanced throughout the City because new facilities will be designed and constructed, existing facilities will be improved, and campaigns that promote bicycling and educate the community will be undertaken. More specifically, achieving this goal will result in the addition of two new sections of Class 1 bikeways (Bob Jones Phase la and Railroad Safety Trail Phase 4)for use by bicyclists and pedestrians along with the completion of the Bill Roalman Bicycle Boulevard,the City's first bicycle boulevard. -25- COOPERATIVE USE OF SPORTS FACILITIES OBJECTIVE Support the Joint Use Committee in further redeveloping school district sports facilities. DISCUSSION Background The Advisory Committee on Joint Use of Recreational Property (JUC) advises the City Council on issues related to recreational facilities that have been developed with other government agencies. Currently there are Joint Use Agreements with two agencies—the County of San Luis Obispo and the San Luis Coastal Unified School District. The County agreement is for improvements planned at the El Chorro Park Softball Field. The larger and more encompassing agreement is with the San Luis Coastal Unified School District and covers a variety of facilities including: 1. Gymnasiums at five elementary schools 2. Taylor Gymnasium 3. Taylor Field 4. Throop Park 5. Facilities at San Luis Obispo High School 6. Athletic fields at seven schools 7. Sinsheimer Park including the SLO Swim Center,Baseball Stadium, disc golf course, Stockton Field and the tennis courts. In addition, the JUC is authorized by the Council to distribute funding to community based sports organizations. Currently, $18,000 is available for improvements to joint use facilities and $13,500 is designated to be used for the rental of athletic facilities by sports organization from agencies such as Cal Poly and Cuesta College that do not have joint use agreements with the City. In considering the needs of the community,the JUC has several areas of concern: 1. Maintaining and improving the current joint use facilities 2. Improving the access to sports facilities 3. Planning for additional tennis courts within the City 4. Begin planning for an expansion of the Joint Use Agreement with the San Luis Coastal Unified School District that includes the replacement of the Holt Field turf and running track 5. Considering long term solutions for developing more sports fields Workscope To accomplish this goal, a five step process that addresses the JUC's areas of concern without any increased General Fund monies is proposed: 1. To maintain and improve existing fields, staff plans to reallocate current funding within the Parks and Recreation Department operating budget and increase the NC's field improvement account by $4,000. In addition, the JUC is recommending the transfer of $8,000 from the facility rental account to the field improvement account. The JUC feels that with the opening of the Damon-Garcia Sports Fields, less funding _26_ 1 211 MAJOR • COOPERATIVE USE OF SPORTS FACILITIES will be needed for facility rental. These actions would increase the field improvement funding to approximately $30,000. The bulk of this funding would go to the very successful cooperative field improvement program managed by the San Luis Obispo Youth Sports Association (YSA). This program includes funding from the JUC, YSA and every local youth sports organization. The money is directed to field improvements at joint use fields such as Sinsheimer, C.L. Smith and Laguna Middle School. The actual improvements have focused on upgrading irrigation systems and turf development. The conditions at these fields have improved noticeably. 2. To improve access to existing athletic fields, an online field reservation system can be implemented. Since there is not a system in place to schedule most sports fields, use is first-come,fust-served. As a result, some fields are used considerably more than others. A field reservation system would distribute the use of fields and actually increase access. By charging a modest reservation fee, the cost of software,licenses and training for this program could be recovered within the two year budget time period. 3. A multi-faceted approach is needed to increase the number of tennis courts in the community. Long term, tennis courts can be located in the parks planned as part of the Margarita and Orcutt area developments. Parks and Recreation and Community Development staff are currently working to insure that tennis courts are included in the specific plans for these parks. The JUC has been deluged with requests to use the tennis courts in Sinsheimer Park. An additional court at French and Islay Parks would assist the JUC in meeting the current needs. There may be non-general fund money available for the project in the future from a residential development proposed for the Orcutt-Broad Streets area. This development, while too small for a neighborhood park, will generate significant park-in- lieu fees. The funding could be used to provide additional recreation facilities in the parks that the new residents of this area are likely to use. The neighborhood is literally surrounded by parks: Sinsheimer, Damon-Garcia, French and Islay. Additional courts at French and Islay Park could be funded from the park- in-lieu fees. Given the timing of the development, the courts would likely be constructed during the 2007-09 Financial Plan period, but only if the development is approved and the citizens generally accept an added court at these parks. The challenge affecting this item will be neighborhood acceptance of additional courts in these parks. 4. A group of local citizens is currently working with the San Luis Coastal Unified School District to improve the Holt Field facilities. Specifically, the track would be replaced with an all-weather surface and the field would be converted to artificial turf. The citizen group has requested staff assistance from the Parks and Recreation Department. Staff sees several areas where this assistance could be provided in the next two years: 1) researching items such as artificial turf and all-weather track surfacing; 2) obtaining neighborhood and community acceptance of the project, if the City participates; and 3) researching ways for the City to participate in this project in future years. The ability of the citizens groups to raise the necessary funding will determine the success of the project. 5. Staff also plans to study the replacement of the grass on existing sports fields in the City with artificial turf. This would increase the amount of time fields can be utilized while decreasing maintenance costs. Artificial turf has been revolutionized in the past few years to the point that it is safer and more useable than natural grass. Potential funding for this would be available in future years from developments in the Orcutt area. While a viable project, there is much to learn and many issues to be resolved before a field replacement program could be considered. A challenge affecting this project is that the development that will generate the funding has not yet be approved. -27- I " MAJOR CITY GOALS COOPERATIVE USE OF SPORTS FACILITIES Challenges We Will Face in Achieving this Goal The work scope of this project is driven by the major fiscal challenges facing the City. ACTION PLAN Date 1. Make the necessary budget adjustments to increase funding for the JUC field improvement 7/05 program. 2. Purchase and install field reservation system. 10/05 3. Report to the City Council on the feasibility of replacing existing grass fields with artificial 12/05 fields. 4. Assist local citizen groups in research and neighborhood outreach on the Holt Field project. 6/07 5. Continue to include tennis courts in the plans for parks in the Margarita and Orcutt areas. Ongoing Monitor park planning in the Orcutt-Broad Street areas. RESPONSIBLE DEPARTMENT The Parks and Recreation Department, working closely with the Parks Maintenance section of the Public Works Department, will be responsible for completing this goal. Assistance with planning issues will be required from the Community Development Department. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Staff resources from within the affected department will be allocated to the completion of this goal. The two staff most responsible will be the Parks and Recreation Director and Recreation Manager assigned as staff to the JUC. All of the costs associated with the online registration system (noted below) will be recovered through a registration fee. Cost Summary Oper!24 Programs Ca ital Improvement Plan 2005-06 2006-07 2005-06 2006-07 Online Registration/Reservation Maintenance 6,000 Internet Registration/Servation Software 30,000 Total $6,000 $0 $30,000 $0 GENERAL FUND REVENUE POTENTIAL The more efficient use of existing facilities, such as sports fields, would potentially increase revenues. Artificial turf sports fields provide the opportunity to increase use fees while decreasing operating costs. -28- � " � MAJOR-CITY • . GOALS COOPERATIVE USE OF SPORTS FACILITIES OUTCOME-FINAL WORK PRODUCT Successful completion of this goal will provide: 1. Increased funding to maintain joint use fields. 2. More efficient use of existing sports fields. 3. The inclusion of tennis courts in the plans for several City parks. 4. Neighborhood and community support for the Holt Field project. 5. A comprehensive plan to increase the use of City athletic fields while decreasing maintenance costs. -29- — 33 MAJOR CITY GOALS OPEN SPACE PRESERVATION OBJECTIVE Continue funding open space acquisition and the natural resources program; maintain and enhance open space, creeks and riparian habitat; and continue "SLO Stewards" program and collaboration with conservation organizations. DISCUSSION Background From the 1992 through the 2003-05 Financial Plan period, the City Council has appropriated a total of $3,052,500 from the General Fund to the Open Space Protection Program. That funding was used to leverage $7,256,370 in outside grants since.July 1, 1997. During this time, the City has completed negotiations with a number of landowners for both fee and easement acquisitions, as well as accepting several land and easement dedications related to development approvals; or outright donations of land or easements. Through December 2004, the City of San Luis Obispo has acquired approximately 1,558 acres of land in fee and 1,810 acres in easement, for a total of 3,368 acres. Several other transactions are in progress at this time with other property owners. The 2005-07 program anticipates the continuation of this effort in a more conservative vein, recognizing the reduction in grant opportunities from both State and Federal governments, and the City's overall budget situation. While anticipated transactions will use most of the open space acquisition program monies (including funds carried over from previous years), staff anticipates several land donations or dedications that will continue the growth of the City's open space system, with a minimum of cash outlay. In addition, some added funding from the program established in the Airport Area Specific Plan may be available depending upon the success and timing of an annexation.. Finally, through existing grant funds for the Bob Jones Bikeway, as well as mitigation funds from private projects,additional opportunities and needs will be met. Challenges We Will Face in Achieving this Goal 1. Acquisition negotiations will be arduous and frustrating at times. The difficulties inherent in the pursuit of this program may result in significant delays, or in the failure or abandonment of certain projects, including some in which significant time investment has been made in good faith. 2. As the City acquires additional open space lands, there is a corresponding increase in maintenance and patrol responsibilities, which will require increases in the open space ranger program from time to time, and will ultimately require some capital outlay for the limited infrastructure that such facilities require. 3. City funding is limited, and competition for grant funds at both the State and Federal levels has become very intense. Furthermore, State and Federal funds are themselves being significantly reduced. Therefore, in addition to efforts in land purchase, it will be desirable to respond favorably to innovative development projects that offer significant open space benefits to the community, and to continue to seek out conservation- minded individuals or families for donations of land or easements. 4. The City's open space system is now truly a system and requires a comprehensive approach to operation and management, as well as cleanup of some new sites. This will necessarily replace some of the program's other focal points and, given budget constraints and the dedication of much of the Biologist's time to required mitigation projects, may progress only slowly (in the form of Conservation Plans for the various open space lands). -30- 1 MAJOR CITY GOALS OPEN SPACE PRESERVATION ACTION PLAN Task Date 1. Continue to pursue easement and/or fee acquisition opportunities. Ongoing 2. Pursue negotiations with Property owners. Ongoing 3. Pursue State and Federal grant applications. Ongoing 5. Pursue private grant applications. As appropriate 6. Place on the market two to three surplus City-owned properties to provide Ongoing continued funding for open space and agricultural land conservation. 7. Contract with California Conservation Corp(CCC)and others for development of Ongoing facilities and improvements ancillary to the Bob Jones Bikeway; trail improvement and associated resource protection at the Bowden Ranch Open Space and possibly other locations. 8. Continue planning and stewardship support(Land Conservancy;ECOSLO). Ongoing 9. Complete individual Conservation Plans programs for two additional City open space lands: a) South Hills 12/05 b) Johnson Ranch 12/06 10. Continue implementing Conservation Plans adopted for acquired open space lands, Ongoing as funding permits. (Irish Hills, Bishop Peak,Cerro San Luis) RESPONSIBLE DEPARTMENTS Administration: Natural Resources. The Natural Resources Manager will have overall responsibility for program activities, including acquisition, development of management plans for City open space lands, and with the assistance of the City Biologist, continued development of the natural resources inventory, oversight of mitigation projects, and ongoing educational and stewardship programs. Parks and Recreation. The Parks and Recreation Department will assist in project selection and evaluation of long-terns management and operational needs. In consultation with the Natural Resources Manager and City Biologist and the City's nonprofit partners, the ranger service will implement maintenance, restoration, safety, and patrol activities, as well as stewardship and environmental education programs. Also in consultation with the Natural Resources Manager and City Biologist, the Department will also take the lead in evaluation of ranger staffing needs, to determine if and when additional field staff is needed. Community Development,Fire, Public Works and Finance & IT. Other Departments will provide support as follows: Community Development Department staff and the Fire Marshal will participate in major planning efforts; Public Works will provide GIS support; and Finance & IT staff will assist in program financing. Also, Natural Resources and Fire Department staff will collaborate in determining appropriate levels of fuel management in critical areas of the urban-wildland interface, particularly where sensitive habitat considerations are involved.. -31 - i -MAJOR • OPEN SPACE PRESERVATION FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Given the City's General Fund budget situation, $50,000 is proposed to be spent over the next two years primarily to provide for implementing open space management plans. Virtually all currently unexpended funds allocated to the Open Space Protection Program are expected to be utilized early in the Financial Plan period. Greater focus will be placed on enhancements to existing open space lands, and achieving growth of the open space system through land or easement dedications associated with the City's entitlement process. Open space funds from the Airport Area may also become available to assist with some purchase or grant funding match requirements. Should a significant grant opportunity arise for which there are no available open space funds, we will return to Council with a request to consider a special appropriation of funds for this purpose. In addressing current needs or opportunities, significant outside funding will be used; $700,000 in grant funds will be expended over the Financial Plan period for improvements and associated resource protections on the Bob Jones Bikeway between Prado Road and Los Osos Valley Road $150,000 in development of mitigations at the privately-owned Boysen Ranch associated with impacts occasioned by the Calle Joaquin extension; and $50,000 at the Filipponi Ecological Area for mitigations to the rare Congdon tarplant occasioned by the development of the Costco store. Staff resources will continue to be led by the Natural Resources Manager, supported as necessary by the City Biologist and other City staff, and by staff at the Land Conservancy of San Luis Obispo County and the Environmental Center of San Luis Obispo County. Cost Summary Operating Programs Capital Improvement Plan 2005-06 2006-07 2005-06 2006-07 Open Space Protection 25,000 25,000 Grant funding 125,000 125,000 Total $0 $0 $150,000 $150,0.00 GENERAL FUND REVENUE POTENTIAL The Natural Resources Protection Program does not offer any direct revenue potential to the General Fund. It does, however, provide a mechanism to leverage City funds with outside grant funds for open space acquisition or resource enhancement projects. In addition, a successful open space program will, over the long term, help to preserve the community character that brings tourists and targeted industries to our area, thus indirectly benefiting the local economy. OUTCOME—FINAL WORK PRODUCT The final work product will be the successful continuation of the Greenbelt Program,evidenced by a satisfactory level of fee and easement acquisitions, dedications, and/or donations, as well as appropriate attention to public access needs and concerns. -32- MAJOR CITY GOALS ECONOMIC DEVELOPMENT: SALES AND TRANSIENT OCCUPANCY TAX REVENUES OBJECTIVE Encourage and promote projects and programs that will increase sales tax and transient occupancy tax revenues. DISCUSSION Background Increasing revenues continues to be a significant component of the City's budget balancing strategy. By implementing various strategies, two of the City's primary revenue sources, sales tax and transient occupancy tax (TOT) can be impacted in a positive fashion. Much of the work on each of these revenue sources will be a continuation of efforts begun in 2003 in association with Major City Goals established at that time to increase sales tax and TOT. Sales Tax Increased sales taxes is an accomplishable goal. However, the City's sales tax revenues are dependant upon larger economic forces. For instance, if the national economy experiences significant impacts such as inflation, or the local real estate market finally cools off, local consumer spending will likely decline. That said,new retail outlets and record sales of new automobiles continue to bolster the City's sales tax revenues. There are a variety of ways the City can try to increase its sales tax revenues. One is to literally increase the sales tax rate through a ballot initiative. This path has its obvious uncertainties. A second method is to continue to stem the retail leakage in the general consumer area to northern Santa Barbara County, Arroyo Grande and Paso Robles. New retail opportunities can be created through the further development of the Los Osos Valley Road general retail corridor (completion of Froom Ranch, the Madonna "gap" property, and remaining Madonna Family properties), the expansion of the Autopark Way area, the completion of already approved large sized commercial retail projects and the continued redevelopment of downtown properties including the Chinatown Project. Also in the downtown, the seismic strengthening requirements will create some significant retail challenges, but they will also provide an opportunity for improved and possibly enlarged retail spaces for downtown growth. A third strategy is to improve upon and expand existing retail centers. A final strategy is to continue the marketing efforts of the Shop SLO—Keep it Local campaign. Transient Occupancy Tax TOT revenues have increased incrementally over the course of the past.year but continue to be volatile on a month-to-month basis. This is in stark contrast to our past boom years of 10% TOT growth per annum Much of this change is attributable to changes in travel patterns. At one time, the City dominated the business travel market in the County. Since 2001 however, business travel has permanently changed, for example, with the advent of"virtual" meetings and conferences. Additionally, many of our neighboring communities are our direct competitors today. Significant numbers of rooms have been added in the North County. At present, both the North County and South Coast aggressively market themselves as tourist destinations. In completing this goal, staff will continue to implement and expand upon the various strategies developed during the 2003-05 Financial Plan. A focused advertising and public relations effort will continue to implement the objectives of the Tourism Marketing Plan while utilizing the brand, San Luis Obispo - Experience the SLO Life. Staff will continue to work with real estate brokers and property owners to improve upon and expand existing lodging opportunities. Promotion of events, City amenities, and conference opportunities will also continue. -33- MAJOR CITY GOALS ECONOMIC DEVELOPMENT: SALES AND TRANSIENT OCCUPANCY TAX REVENUES Challenges We Will Face in Achieving this Goal Sales Tax 1. Consumer spending is often dependent upon external factors which may preclude increased sales taxes. 2. Increasing sales tax revenues by ballot initiative is dependent upon voter approval, should the City decide to consider this option. 3. Increasing sales tax revenues by the successful completion of new developments creates a potential conflict between land use decisions and financial decisions. 4. There will be environmental issues faced by some of the proposed retail developments which may prevent their completion within the time period for this goal. 5. The community and existing businesses may have concerns about additional retail developments and their ability to be sustained. 6. Additional development, of any type, creates additional infrastructure costs as well as implementation and timing concerns. 7. The City's seismic strengthening program, with its more aggressive deadlines, has the potential to negatively impact retail sales in the downtown. However, through the efforts of theSeismicCoordinator, these impacts will be reduced as much as possible. 8. Project approval does not guarantee that new retail facilities will actually be constructed. 9. The City lacks funding, and a mechanism (such as a fagade enhancement program) to assist in the improvement of individual stores and outdated (and underperforming)retail centers.. Many communities use CDBG funding for this purpose. 10. The City lacks the funding for placing paid advertising for the Shop SLO—Keep it Local campaign and for an aggressive retail recruitment program. 11. The further development of the Los Osos Valley Road area, including the Madonna Family properties and the Gerhard auto project, may be inhibited by traffic issues associated with the area. Transient Occupancy Tax 1. TOT has been unpredictable for several years and many external factors(such as weather)affect TOT. 2. The City has little influence over business travel which has changed its patterns in recent years, especially after September 11, 2001. This is a segment that marketing efforts cannot easily reach. 3. The City faces increased competition from neighboring cities for visitors to the Central Coast. Our neighbors in Monterey and Santa Barbara counties have significantly larger budgets to spend on marketing their areas as destinations. 4. There is the potential that adding new rooms will result in only transferring business from one City property to another. 5. Existing meeting facilities are not ideal for needs of larger business groups and conferences. 6. Significant conference business is dependant upon a level of air service that is presently not available to the City. -34- MAJOR CITY GOALS ECONONHC DEVELOPMENT: SALES AND TRANSIENT OCCUPANCY TAX REVENUES ACTION PLAN Sales Tax 1. Continue to identify retail types and specific retailers that will complement and augment Ongoing existing market conditions. Continue 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 retail recruitment strategy. Have regular meetings with local real estate brokers and property owners. 2. Continue to contract with HDL for sales tax analysis and services to analyze market Ongoing conditions. 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 conduct"economic gardening"in the retail industry through existing customer Ongoing service oriented practices like the Quick Response Team, the Economic Development Program's involvement in major development projects, and the Economic Development Program's high level of customer service to individuals,businesses and real estate professionals. When possible support other local agencies' training programs and encourage local retailers to utilize these services. 5. Continue to support the strategies in the Downtown Strategic Business Plan and assist in 11105 its update, as more fully discussed in the Downtown Major City Goal. Focus support on efforts that maintain the retail health of Downtown and increase customer sales in a sustainable way. 6. Promote shopping as an activity for visitors to San Luis Obispo. Ongoing 7. Continue to work with auto dealers in the City. Provide assistance to the Gearhardt Ongoing Autopark Expansion and the Madonna"gap"property development. Work closely with remaining Downtown auto dealers to find locations that are more functional. Explore the reuse of Downtown auto dealer locations for other retail purposes. If space becomes available,encourage new brands of automobiles to locate in San Luis Obispo. 8. Continue to facilitate and coordinate City involvement in significant retail development On-going projects as directed by Council. Work closely on the Chinatown Project, Los Valley Road corridor projects(including the Gerhardt Auto Development,Froom Ranch expansion, Madonna"gap"development and the Calle Joaquin hotel projects), Airport Area Specific Plan approval and property annexation and other large-sized projects,if for example,the Marketplace proceeds. l -35- NOVI MAJOR CITY GOALS ECONOMIC DEVELOPMENT: SALES AND TRANSIENT OCCUPANCY TAX REVENUES Task Date 9. Continue the Shop SLO—Keep it Local marketing and public relations campaign to Ongoing encourage residents to purchase goods in the City. Focus on branding San Luis Obispo as the shopping destination for the region. Work with the Downtown Association, local businesses and local retail centers to coordinate efforts and messages about shopping in San Luis Obispo. 10. Through the Seismic Coordinator,continue to provide displaced businesses and property Ongoing owners with support during the retrofit of their buildings.. Work closely with property owners who opt to redevelop their properties in addition to seismically strengthening them 11. Encourage retail areas to define and develop niche marketing efforts, as in the"West End" Ongoing of Downtown. 12. Upon annexation of the Airport Area,revise the targeted industries list for community 6/07 compatibility and present to Council for consideration. Transient Occupancy Tax 13. Continue a community promotions program that implements the strategies of the adopted Ongoing Tourism Marketing Plan,as well as the brand,San Luis Obispo -Experience the SLO Life. If the need arises, update the Tourism Marketing Plan. 14. Continue the focused advertising and public relations campaign that establishes and Ongoing identifies the City as a tourist destination with a wide variety of activities to undertake during a stay.. Develop and encourage cooperative advertising opportunities with local properties. 15. Work with property owners and real estate brokers to increase lodging opportunities, Ongoing consistent with City land use and zoning policies,including the Courtyard Marriot, Hampton Inn,Motel Inn and Larkspur Hotel. Continue to monitor opportunities for the reuse of large or downtown properties for unique boutique hotels. 16. Continue to monitor transportation opportunities for visitors,and when necessary Ongoing recommend service improvements. 17. Continue to identify and implement strategies to improve overnight stays during non-peak Ongoing seasons and mid-week. 18. To increase conferences, work with local lodging properties to support existing large-sized On-going conference facilities and services at the Madonna Inn and Embassy Suites Hotel. 19. As new facilities are completed and available for use(Damon Garcia Sports Fields, the Ongoing Children's Museum and the Railroad History Museum, promote the facilities as local amenities to visitors. 4D -36--36- i MAJOR CITY • ► ECONOMIC DEVELOPMENT: SALES AND TRANSIENT OCCUPANCY TAX REVENUES Task Date 20. Continue to partner with the local arts community and the San Luis Obispo Vintners& Ongoing Growers Association to promote the City's public art and arts events and the Edna Valley wine region to visitors. 21. Support efforts to make San Luis Obispo more accessible to visitors by improving signage Ongoing in Downtown. 22. Continue to market the outdoor amenities of the City's open space to visitors. Ongoing RESPONSIBLE DEPARTMENT Administration will be the lead department for achieving this goal. The Economic Development Manager will provide the overall staff support to this goal. The Community Development and Public Works Departments will be involved in development review aspects of new projects and expansions. The Finance and Information Technology Department will provide support in providing information and analysis of sales tax and TOT. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Achieving this goal will require significant work on the part of the Economic Development Manager in addition to other ongoing duties. It will also utilize the half-time Seismic Coordinator and development review staff from the Public Works and Community Development Departments, as appropriate. However, no added funding is. recommended. In fact, there will be less funding available in the Economic Development program in 2005-07 due to more"belt tightening". GENERAL FUND REVENUE POTENTIAL Increased sales tax and TOT revenues will result in additional General Fund Revenues. OUTCOME—FINAL WORK PRODUCT Upon completion of this work program the City will have increased revenues from both sales tax and TOT. The City will continue to have an aggressive and successful Community Promotions Program marketing the City as a visitor destination. The City will continue to present diversified shopping opportunities for its residents and visitors. Residents and visitors will experience increased safety as unreinforced masonry buildings are retrofitted. Property owners may experience increased property values as existing retail areas improve. -37- 1 . 4 ( MAJOR CITY GOALS DOWNTOWN OBJECTIVE Continue the City's traditionally strong support for the downtown in multiple areas, such as maintenance, economic development, public safety, parking and tourism promotion, including progress on the installation of pedestrian lighting, and other improvements as resources allow. DISCUSSION Background The Downtown has long been considered the City's "heart and soul" and therefore San Luis Obispo City Council's have traditionally provided an extra level of support and service to the downtown. The downtown's role in the community's quality of life is crucial. From an economic development perspective, tourists enjoy the ambience of downtown, bringing transient occupancy tax (TOT) and sales tax dollars to the City. Downtown is also a regional shopping draw for the County, and provides bars, restaurants and movie theaters for entertainment, as well. As a result, the City has worked closely with the Downtown Association over the years to provide additional resources to downtown, such as dedicated police officers, sidewalk cleaning and maintenance, support for Thursday night Farmers' Market, a staff transient task force and a part-time maintenance worker for general clean-up. The City has also provided direct support to the Downtown Association itself, in the form of ongoing administrative services (such as accounting, payroll and personnel), reduced or no fees for special events and other services (e.g. hanging banners), and funding for the development of a strategic business plan. Attached to this work program is a complete listing of the many services provided by the City in its efforts to improve the downtown. However,as the success of the downtown has grown, so have its challenges—for example, parking,maintenance, policing, special event management, higher merchant expectations, greater coordination of promotional efforts and more retail competition within the City and the region. As an example of our efforts to keep pace with these challenges, in 1999-01 the Council approved a Major City Goal relating to the downtown, which included activities in its workscope such as establishing a strategic retail recruitment partnership with the Downtown Association, real estate brokers and property owners; expanding Mission-style sidewalks; installing public restrooms; and strengthening the cultural core. A currently funded project will soon provide "way finding"signs to improve downtown parking for tourists and shoppers, and this proposed work program includes ideas for at least advancing the pedestrian lighting goal. Therefore, even in this time of difficult finances, the City continues to recognize the need to commit resources toward improving the downtown. However, given the downtown's growing complexity and strength — and the fiscal limits that have become "the norm" in local government — it may be time to consider new strategies for keeping pace with the level of sophistication required in downtown planning and funding. The Downtown Association staff has submitted a request to update their Strategic Business Plan.. Such an update would reexamine the Downtown's assets and challenges and develop recommendations for strategies to promote the downtown's future success. Such an examination would also consider the downtown's long term funding and service levels, and offer various strategies for meeting those needs.. In addition to this proposed new initiative, two other initiatives are suggested in this work program. First, pursuing the Council's desire to provide better pedestrian lighting downtown, thereby improving its ambiance and safety during the evening hours. Steps will be taken to move toward such a program to the greatest degree possible within existing resources. Second, developing and implementing a Downtown Urban Forest 38 1 - a MAJOR CITY GOALS'---' DOWNTOWN Management Plan. The intent of the plan is to begin the process of identifying, pruning, removing and replacing large trees in the downtown core a few at a time to reduce tree hazards, create a safe environment and avoid the need for large-scale replacements by waiting for trees to die. Challenges We Will Face in Achieving this Goal The greatest difficulty the City will face in trying to achieve this goal will be the lack of General Fund and staff resources available to keep up with downtown service level demands and complete any significant new capital improvements over the next two years, including installing pedestrian lighting. In addition to the need for lighting, the Council has already approved several downtown projects that have proceeded through the design stage, but no further, because there is no financial support for them For example, the Garden Street Makeover, additional improvements in Mission Plaza near the Art Center, the installation of additional Mission-style sidewalks, the expansion of the Creek Walk, widening of sidewalks for outdoor dining and the creation of a Monterey Plaza have all been put on the shelf because of the City's budget problems over the last several years. Accordingly, while it is still possible to take some steps to improve the downtown, and even to move toward the goal of providing pedestrian lighting, those steps will not be able to include the kind of significant projects necessary to bring us closer to achieving the downtown envisioned by the Conceptual Physical Plan for the Downtown, unless additional funding sources can be realized through grants or other sources, including a more effective downtown "self-funding" mechanism. Even without added City General Funds, however, the City's support for the downtown is still extraordinary, and will continue to include many components. ACTION PLAN 1. Finalize the selection of a pedestrian light style,develop a plan for the placement of 9/05 pedestrian lights and present both to Council for approval. 2. Upon completion and approval of a lighting plan, seek out opportunities to install electrical On-going conduit for pedestrian lights as part of other private and public projects in the downtown. In cases where conduit and/or electrical wiring is available, work with the Downtown Association to find donors to purchase and install light standards. 3. Continue to provide staff support to the"Trout About Downtown"art project,both as an 9/05 attraction for tourists and as a fund-raiser for the Prado Day Center. 4. Complete downtown street resurfacing projects on Monterey Street between Santa Rosa and 9/05 Chorro Streets. 5. Complete downtown street resurfacing projects on Higuera Street from Morro to Broad 9/06 Streets. 6. Work with Economic Development Director to assist the Downtown Association with 11/05 revisions to and implementation of their Downtown Strategic Business Plan,including the consideration of alternative methods of governance and funding. 7. Complete conceptual designs for the Palrn/Nipomo parking structure. 12/05 8. Through the City's Seismic Coordinator,continue to support efforts to strengthen downtown On-going buildings, and assure that all owners meet the requirement to have approved building permits -39- 1, 43 MAJOR CITY GOALS DOWNTOWN for seismic work by January 1, 2006. 9. Continue the efforts of the Transient Task Force to minimize the negative impacts of On-going homeless individuals in the downtown. 10.Re-institute and support the graffiti hotline to ensure that the downtown remains free from On-going unsightly graffiti. 11.Provide staff support for the completion of important downtown construction projects: On-going Court Street, the Palm/Morro parking and office building and,possibly,Chinatown. 12.Continue to provide support for the Art Center and Children's Museum as they move On-going forward with their new buildings,and to the San Luis Obispo Little Theatre in any actions they take to remodel their current space. 13.Continue to provide support to the downtown and the Downtown Association as outlined in On-going the document entitled Services the City of SLO Provides to the Downtown Association and Downtown Area. 14.Complete a Downtown Urban Forest Management Plan. 1/06 15.Implement Phase 1 recommendations of the Downtown Urban Forest Management Plan. 6/07 16.Improve downtown parking by installing"way finding"signs to parking structures. 6/07 17.Complete a feasibility study for the installation of pay-on-foot equipment at the City's 6/07 parking structures. RESPONSIBLE DEPARTMENT The Administration Department will be responsible for completing this goal, with assistance from the Public Works Department for pedestrian lighting, design of the Palm/Nipomo Parking Structure, street resurfacing, parking improvements, and the UrbanForest Management Plan, the Downtown Association for their Strategic Business Plan update and pedestrian lighting donation program and the Community Development Department, should the Chinatown project move forward in the next two years. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL The Principal Administrative Analyst, in her role as liaison to the downtown and Downtown Association, will provide the over-all staff support to this goal. It is estimated that this will require 20 percent of her time. Work on the pedestrian lighting plan will require the effort of one (1) Public Works engineering staff member. Completion of the design for the Pahn/Nipomo parking structure will be achieved through three(3)Public Works engineering staff members, with the assistance of the Parking Manager. The Public Works Department will also coordinate and implement the Urban Forest Management Plan and street resurfacing projects. The Community Development Department will provide support should the Chinatown project go forward during this timeframe. The Seismic Coordinator will support implementation of the seismic ordinance and the Economic Development Manager will coordinate staff support for any large development projects, requiring approximately 20% of her time. 1 - 44 -40- MAJOR • DOWNTOWN Significant Operating Program Requests in the amounts listed below will be necessary to fund the update to the Downtown Association's Strategic Business Plan and complete the feasibility study for pay-on-foot parking garage equipment. A CIP has been submitted for FY 05-07 to design and implement the Urban Forest Management Plan. Funding is currently available in the Parking Fund for design of the Palm-Nipomo parking structure and in the Capital Outlay Fund for"way finding"signs and street resurfacing projects. Cost Summary Operating Programs Capital Improvement Plan 2005-06 2006-07 2005-06 2006-07 Downtown Urban Forest Management Plan 8,000 20,000 Downtown Paving(included in Street Reconstruction&Resurfacing) 75,000 75,000 Pay-on-Foot Parking Garage Equipment Study 10,000 Downtown Association Strategic Business Plan 25,000 1.Total $25,000 $10,000 $83,000 $95,000 GENERAL FUND REVENUE POTENTIAL By continuing to snake the downtown attractive to visitors, and with the addition of the Trout About Downtown art project, we believe that the City should, at a minimum, meet its revenue goal for transient occupancy tax. Completion of the Court Street project and making the downtown an enjoyable shopping experience are necessary to assure that we meet our sales tax revenue projections. OUTCOME—FINAL WORK PRODUCT A constantly improving downtown is critical to the City retaining and improving its position as a tourist destination. On-going activities on the part of City staff to assure its cleanliness and safety are an important part of creating the ambience tourists desire. Maintaining the downtown's attractiveness also enhances its draw as a regional shopping and entertainment location. Preparing an Urban Forest Management Plan will provide the City with a systematic tree maintenance and replacement program that will ensure both ambiance and safety for years to come. Completing a pedestrian lighting plan will allow the City and the Downtown Association to collaborate on a lighting donation program that will eventually create an aesthetically pleasing, well-lighted, safe and enjoyable nighttime downtown experience. Selective paving of Downtown streets will provide for better street surfaces and marking for pedestrians. -41 - Services the City of San Luis Obispo Provides to the Downtown Association and Downtown Area (June 2004) The City of San Luis Obispo (City) presently provides to the San Luis Obispo Downtown Association (DA) and the downtown area a wide range of services. This document is intended to provide an overview of those services and the discussion has been divided into four categories: 1. Ongoing Services a. To the Downtown Association (DA) b. o the Downtown Area 2. Fee Policies for the DA 3. Special Project Assistance for the DA 4. Special Event Assistance for the DA All of the services listed in the document are provided free-of-charge by the City to the DA or the downtown area, unless otherwise noted. Services not included in this document are assumed to be the responsibility of the DA (i.e. telephone charges, hanging holiday garlands, etc.) This document is intended to reflect the mutual understanding of existing service levels and respective responsibilities between the City and the DA. The goal is to avoid confusion or misunderstanding from arising during the year while carrying out numerous activities in the downtown area. The listing of services is provided for informational purposes only and should not be viewed as a binding commitment. Several of the service levels listed are required to be set or modified by the City Council (e.g. street sweeping), and thus may be subject to change, if financial or other circumstances warrant. The DA will be notified well in advance of any proposed changes to the services provided in order to obtain DA input prior to receiving final approval. To keep this document up-to-date and accurate, the City and the DA will review the listing of provided services annually(in the spring of each year to coincide with the budget process) and make appropriate changes at that.time. 1. ONGOING SERVICES A. To the Downtown Association • Special Liaisons-The City Council designates liaisons to the DA, who attend board meetings and other meetings, as appropriate. City Administration designates a staff liaison (presently the Principle Administrative Analyst), who provides day-to-day ombudsman support to the DA Executive Director relative to City departments and service issues. The Economic Development Manager provides support to the DA Executive Director relative to the Strategic Plan and Economic Activities Subcommittee. • Ouarterly Meetings.-The CAO,Economic Development Manager and Principal Administrative Analyst hold quarterly breakfasts or lunches with the DA 42 t Board ( � I ,, ^`C o President, Executive Director, and possibly other DA staff, to discuss issues of mutual concern. • Day-to-Day Operations Support-The City provides the DA with ongoing full- service support from Human Resources,Finance, (payroll, accounts payable, revenue management, collections, investments, general ledger and financial reporting), Attorney, and Administration. B. To the Downtown Area • Street Sweeping-The City provides street sweeping services in the downtown seven days per week, compared to once a month on arterials and residential areas. • Trash and Recycling-The City's solid waste franchisee provides refuse and recycling pickup in the downtown on a daily basis, as opposed to other retail areas, which are responsible for contracting on their own schedule. • Sidewalk and Trash Can Cleaning-The City provides steam cleaning to the sidewalks and trashcans in the downtown on a quarterly basis. • Tree Trimming Services- City provides a high level of tree trimming services to the Downtown. • Bicycle Racks- The City maintains and installs bicycle racks throughout the downtown. • Graffiti -The City provides ongoing graffiti clean up. • Fire Inspections - „provides fire inspections of businesses once a month. • Support During.Construction-.addition to direct promotional support to the DA during City construction projects, the City also provides enhanced staff liaison to downtown businesses and forbids construction during the holiday season. • Police-The City provides a large variety of police services directed toward the downtown. ➢ Four sworn personnel committed to the downtown area full time. ➢ A satellite office provided on Marsh Street. ➢ Special event planning. ➢ Attendance at Downtown Association meetings. ➢ A majority of time spent Wednesday through Saturday providing police services in response to nighttime activity in the downtown. (20% of the total number of police calls handled in 2001 were for service in the downtown core.) ➢ Directed enforcement and outreach pertaining to homeless individuals in downtown and Mission Plaza. ➢ Education programs for downtown bar/restaurant employees. (, -43- ➢ Attendance at Bar Owners Association meetings. 2.FEE POLICIES FOR THE DA • Reduced Fees for Special Events- All City services and fees charged to the DA for special events are assessed and paid at 50% of the billable rate. • Reduced Vendor Fees - Vendor Fees for DA special events are assessed at 50% of the billable rate(5% of each vendor's gross sales at event or$10.00 per vendor booth at event). The DA pays vendor fees for all DA sponsored special events exce t Concerts in the Plaza,Taste of San Luis, and Holiday Parade. • Payments-The City provides the DA with a detailed invoice of assessed charges after the completion of an activity(i.e. banners, concerts) or a special event. • Reduced Banner Fees-The City services for hanging and removing downtown banners is charged to the DA at the 50% rate.Fees are assessed only when City staff provides this service. No fees are assessed for banners hung by the DA or private entity. • Free Facility Use-The City provides free usage of City facilities for DA sponsored events. 3. SPECIAL ARRANGEMENTS OR PROJECT ASSISTANCE FOR THE DA • Free Downtown Bench Installation and Maintenance-The City provides installation and maintenance of all decorative benches in the downtown. • Construction Promotional Support-The City provides direct financial assistance to the DA to be used for promotional support when City construction projects cause disruption to the downtown. • Shared Access to Metal Chairs -,.City and DA mutually own 150 metal chairs stored in the City's Murray Adobe, available for use at City and/or DA sponsored event only. The City and DA jointly approve all other chair uses. • Installation of Flags -The City allows the DA to hang flags from City-owned street light poles. • Free Storage-The City provides free space for a storage container in the lot adjacent to the Corporation Yard. 4.SPECIAL EVENT ASSISTANCE FOR THE DA Thursday Night Activities • Enhanced Parking Structure.Security -The City provides a security guard at each parking structure until 11:00pm during Thursday Night Activities. -44- i • Enhanced Police Support-The City deploys 2-8 patrol officers on bicycles and on Toot(an average of 4) downtown each Thursday night to monitor event activities. Shortly, they will be joined by Cal Poly bicycle officers. (The number of officers deployed is dependent on time of year and crowd size.) • Enhanced Parks and Recreation Department Support-The City's Parks and Recreation Department coordinates and provides staff support for 3 special events each year during Thursday Night Activities (Snow Night, Easter Egg Hunt, and Halloween Hoopla). • Barricade Setup and Removal -The City provides barricade setup and removal each Thursday night..The DA is assessed a fee established by the City for this service including barricade replacement costs. • Vehicle Towing- City police traffic officers arrange for vehicles within the Fanners Market area to be towed prior to the event. • Free Portable Restrooms Usage-The City provides the transport and.setup of 2 trailer units with 8 portable restrooms for use downtown on Thursday night. • Enhanced Fire Support- The City provides periodic safety walk-through on Thursday nights at 6:30pm to ensure fire codes are maintained. An engine and crew, as well as paramedic unit, are in attendance at every Farmer's Market. • Free Annual Barbeque.Area Cleanup -The City provides cleaning of downtown barbeque sites on an annual basis. If a site needs additional cleaning during the year, the vendor will be charged for the cost. Holiday Season Activities • Trolley Usage-The City provides the Trolley for transporting City officials only in the Holiday Parade. The DA provides decorations and staff to decorate the Trolley for the holiday season. • Free Mission Plaza Christmas Tree Installation-The City provides installation of the Christmas tree (with.lights) in the Mission Plaza, with assistance provided by DA volunteers. • Holiday Parade Coordination -The City provides special event parade coordination, facility use of Mission Plaza, barricade setup and removal, and transport and setup of 2 trailer units with 8 portable restrooms. • Police Support.- City provides police support for parade and monitor training. • Fire Inspections -�.provides fire inspections of holiday parade floats. L LH -45- • Free Santa's House Storage-The City provides storage for the Santa House adjacent to the Corporation Yard. The DA is responsible for transporting the Santa House to the Mission_ Plaza and back to the storage area. The DA is responsible for all repairs required. • Meter Bagging- City provides meter bagging for Christmas sales days. Taste of San Luis • Extended Marsh Street Parking Structure Elevator Hours -The City provides the elevator service until 10:30pm on the day of the event. • Free Mission Plaza Preparation -The City provides a routine hosing down of the Mission Plaza prior to the event. The DA will be charged for any additional scrubbing, if requested. • Support of Event- Council members and staff purchase tickets (usual two tables' worth) and attend the Taste of San Luis in support of the event. Concerts in the Plaza • Free Use of Mission Plaza-The City provides facility use of the Mission Plaza and the Murray Adobe for storage of chairs, fencing, and other event related items. • Support Staff-The DA provides support staff at each concert event. City support staff provided(if requested by the DA) for each concert event will be charged to the DA at the current billable rate. -46- I Policies and Practices Beneficial to the Downtown General Plan Policies • Center of the City-LU 4.1 discusses downtown's role as the cultural, social and political center of the City, as well as home for those who live in its historic neighborhoods. Further, the General Plan encourages entertainment and cultural facilities in the Downtown (LU 4.3) • Parking LU 4.10 requires a diversity of parking opportunities in the Downtown with major increases in supply being in the form of structures outside the commercial core. • Creek--LU 4.11 describes the protection and restoration of San Luis Obispo Creek in the Downtown. • Historical Preservation -.LU 4.12 focuses on the preservation and restoration of architecturally and historically significant buildings in the Downtown and requires new buildings to be compatible. • Pedestrian.Orientation -.Several General Plan policies encourage Downtown to be pedestrian oriented, compact and the City's most intensely developed area (LU Sections 4.5,4.15, 4.16.1). • Design Principles - There are many General Plan policies relating to the design of Downtown which encourage active uses on the street level, encourage residential uses above the street level, encourage continuous store frontage,taller buildings in the mid-block, and appealing details at the street level to be enjoyed by pedestrians on the sidewalks (LU 4.16.1 - 4.16.6). • Government Offices- Both City and County government offices are encouraged to continue to be in the Downtown (LU 4.17, 5.14 and 5.3). • Cultural Facilities - The City is required to help provide facilities for a library and for arts and sciences which meet broad community needs (LU 5.2). Development Standards Applicable to Downtown Only • Parkine District-The Downtown has a parking district that allows business and/or property owners to pay fees in lieu of providing on-site parking. • Parking Requirements- o...g ratios in the Downtown (e.g. the number of required spaces per square foot of floor area and use) are one half of that required in other commercial areas. • Parking Structures -The in-lieu parking fees charged do not cover the costs of building structured parking and the City subsidizes the remainder of the cost. • Residential Density-The Downtown is allowed the greatest residential density in the City. • Development of Property—There are no property line setbacks required in the Downtown (except for creeks) and 100% lot coverage is allowed. -47- -�' I • Building Height-The height of buildings in the Downtown is allowed to the maximum in the City of 50 feet. • Sidewalk Dining- Sidewalk dining is allowed in the Downtown with private use of the City- right-of-way fora nominal fee. • San Luis Creek - City improvement of San Luis Creek with Mission Plaza and Creekwalk as project amenities and dual access to retail establishments and restaurant spaces. Other Policies Benefcial to the Downtown • Public Works P'roiects in Downtown- For the City's most recent Public Works construction projects in the downtown extra levels of staff support and financial support have been provided to provide the highest levels of communication and service to the businesses, property owners, customers and community members who utilize downtown. The most recent example of this is the efforts by Public Works, Utilities and Administration during the Century Project in conjunction with the allocation of funds for a marketing campaign during the project by the Downtown Association. • Construction-Construction is prohibited in the downtown during the holiday shopping season, from Thanksgiving through New Year's. • Public Art-The majority of the City's public art has been placed in the downtown. • Cultural Activities -To help downtown serve as the City's cultural center, the City provides rent at $1 per year to the Little Theatre, Children's Museum and Carnegie Library, and at a much reduced rate to the Arts Center. S r, -48- MAJOR CITY GOALS LONG-TERM FISCAL HEALTH OBJECTIVE Continue developing and implementing a long-term plan that will deliver desired service levels, adequately maintain existing infrastructure and facilities,and preserve the City's long-term fiscal health. DISCUSSION Overview Accomplishing the Major City Goals for 2005-07 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 delivering desired service levels 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 in achieving other important CIP goals such as implementing the Laguna Lake Park Master Plan, relieving traffic congestion,preserving open space and improving sports fields. Background Results of the Five-Year Fiscal Forecast. As part of the goal-setting process for 2005-07, a detailed five-year forecast for the General Fund was prepared and presented to the Council in December 2004 in 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 2005-07. The results showed that the City is facing another difficult fiscal future. The forecast projected an annual average budget gap of$2.4 million for the 2005-07 planning period and an ongoing short-fall of approximately $700,000 for each year after that, even if all we do is maintain current service levels and continue to severely limit infrastructure and facility maintenance. This is excluding a one-time shortfall of$1.4 Forecast Budget Gap:2005-10 million in the City's minimum reserve in 2004-05 that will carryover into 2005-06 as 2005-06 2006-07 2007-08 2008-09 2009 10 $250,000 the result of taking our reserve level to 16% of operating expenditures rather than the -$500,000 policy minimum of 20%. -$1,250,000 Tough Fiscal Past, Tough Fiscal Future. -$2,000,000 The fiscal situation facing the City two years -$2,750,000 ago in 2003-05 was the toughest in over ten -$3,500,000 years, since the "one-two punch" of the -$4,250,000 recession and State budget takeaways of the -$5,000,000 mid-1990's. We were facing a General Fund budget gap of$7 million—about 20% of our Annual Gap Wrryover Gap from2004-05 General Fund revenues—which we successfully closed through a combination of expenditure reductions in operations and capital improvements, new revenues and use of reserves. Because of added State takeaways totaling $1.5 million, we had to revisit the General Fund budget in 2004-05. To accommodate this, we made further expenditure cuts (most notably in our paving program); reinstated the hiring -49- LONG-TERM FISCAL HEALTH and training chill; and for the first time since we adopted our minimum reserve policy fifteen years ago of 20% of operating expenditures, we went below this level to 16%. While this is significant in signaling the tough fiscal times facing us, it is also consistent with the strategy adopted as part of the 2003-05 Financial Plan: to maintain reserves at policy levels as our fust line of defense against even more State budget grabs. Fewer Budget Balancing Options Remain. While the amount of the gap is significantly lower than the one facing us two years ago, there are aspects of the current situation that are even tougher. In closing the $7 million budget gap two years ago,we: 1. Reduced operating expenditures(and related 2003-65 Budget Balancing Strategy services)by$1.7 million. Cloaing the General Fund Gap 2. Implemented$1.1 million in new revenues o Reserves 11% (primarily user fees). p Revenues aP 3. Significantly reduced our capital improvements 15% 49% (by about$3.5 million from target levels). 4. Used$800,000 in reserves. Expenditures:740?o o Operating Programs In short, we have already used these budget- 25% balancers and they are now part of our current base: we can't "count them twice." Coming on top of these, this means that any further service reductions will be much more difficult to implement, especially in light of the fact that police and fire protection accounts for over 50% of General Fund operating costs; and new revenue options under Proposition 218-are few and far between. Lower Reserves. As noted above, we went below our policy level in 2004-05 for the fust time since we adopted our minimum reserve policy fifteen years ago. While this was consistent with our adopted strategy of using reserves as our first line of defense against even more State budget grabs, it means we will go into the 2005-07 Financial Plan process with a lower level of reserves than we did two years ago: we began 2003-05 with General Fund reserves that were 30% of operating expenditures, compared with our current projection of 16% at the end of 2004-05. In summary, the gap facing us in 2005-07 follows a series of tough budget-balancing actions over the past two years. One Bright Spot: Passage of Proposition IA. The recent passage of Proposition lA on November 2, 2004 significantly improves our fiscal situation by shielding us from more State budget raids, and thus provides us with greater certainty and stability on this front than we've experienced in many years. However, it is important to stress that it only helps prevent added State budget cuts to cities in the future: it doesn't return any past takeaways, which currently cost the City over$3 million each and every year(and total over$22 million over the past sixteen years). It is also important to note that Proposition 1A does not create an impervious firewall from more State raids: they are still possible, but they are much harder to do. The Ground Rules: If two-thirds of the legislature declares a fiscal emergency, then funds can be taken away from local government, but only as a loan that must be repaid t — ,g' -50- MAJOR CITY GOAL�3 LONG-TERM FISCAL HEALTH within three years; the amount cannot be more than $1.3 billion; it cannot occur more than twice in a ten-year period; and no new takeaways can be made if a past takeaway has not been repaid. This is a high hurdle to overcome,certainly,but not an impossible one. In exchange for this reasonable assurance (but not guarantee) of "no mas, no mas" in the future, local governments agreed to give the State $1.3 billion per year for two years (in 2004-05 and 2005-06), for a total of$2.6 billion. The City's share of this is about$680,000 per year, or $1.36 million over two years. After this, we should return to our prior situation, which, as noted above, is continuing to lose$3 million per year to the State. In short, while passage of Proposition lA was essential for our future fiscal health and stability,it does not improve our current fiscal situation: it simply deters the State from making it worse. Preparing for 2005-07: Steps Already Taken. In addition to the budget-balancing actions taken as part of the 2003-05 budget process, we have taken a number of steps in positioning the City for 2005-07. We have a Fiscal Health Contingency Plan in place, and have already taken a number of cost saving steps, including a hiring freeze,ongoing reductions in operating costs and deep cuts in CIP projects. 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 2005-07 is to bring expenditure and revenues into balance for the next two years, 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 2005-07 budget and closing the projected $2.4 million annual gap consists of the following four components: 1. Developing a General Fund CIP that is the lowest possible in reasonably maintaining our existing infrastructure and facilities. 2. Strategically using our reserves. 3. Implementing selected new revenues as allowed under Proposition 218. 4. Reducing operating program costs and related service levels. 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 deliver desired service levels, adequately maintain existing infrastructure and facilities, and achieve longer-term, already-adopted CEP 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:. 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 our top three General Fund revenues—sales tax and transient occupancy tax—are both the topics of a separate Major City Goal. -51 - MAJOR CITY GOALS LONG-TERM FISCAL HEALTH 3. User Fees. Ensuring that the City's user fees recover costs in accordance with adopted user fee policies. 4. Legislative Advocacy. Working closely through our legislative program to prevent further adverse fiscal impacts on the City by state,federal or County agencies. 5. Citizen-Supported Revenue Options. Developing strategies for a possible revenue ballot measure in June or November 2006. ACTION PLAN In concert with the related Major City Goal of generating additional revenues from sales tax and transient occupancy tax,there are five proposed components to this action plan for long-term fiscal health: O Increase Organizational Productivity Staffmg 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, unfunded mandates, reductions in key grant programs such as the Community Development Block Grant and other State or federal actions that limit our fiscal independence. © 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. O Update the 2000 Cost of Services Study Under the City's user fee policy,a comprehensive cost of services study should be prepared at least once every five years in ensuring an appropriate cost in setting City fees. In the interim,fees are adjusted by changes in the consumer price index as well as adjustments due tosignificant changes in the method, level or cost of delivering specific services. We performed our last comprehensive review of service costs and related revenues in 2000; as such, it is timely to update this analysis for 2006 by an independent cost accounting firm specializing in this type of work. This update will answer four basic questions: 1. How much does it cost us to provide various City services? 2. Are these costs reasonable? 3. What are our current revenues and cost recovery levels? 4. What should our revenue levels be given our adopted user fee policy? -52- � _� ITETATITeRfei LONG-TERM FISCAL HEALTH © Consider Preparing for a Revenue Ballot Measure in 2006 As noted above, the recommended budget balancing strategy for 2005-07 will go a long way towards stabilizing our budget situation for the long-term, assuming the problem stays about where it is 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-today services, additional resources will be needed to address our long-term CIP 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 unless the Council unanimously decided to hold a ballot measure sooner. 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 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. Stated simply, the City will need broad-based community support–in evidence on Election Day–to implement new revenue sources. 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. 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 effective way of communicating this vision to likely voters. Although they were driven by very different factors, communities in California that have been successful in generating broad-based voter support for new revenues 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. -53- MAJOR CITY GOALS LONG-TERM FISCAL HEALTH 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 program 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. As noted above, it is important to stress that while the City can take the lead on the fust two 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 a community-based group has emerged that will campaign for its passage: Summary. Gaining voter support for a revenue measure—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 a 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). Tasks and Schedule Task Date 1. Organizational Productivity. Continue organizational vitality program in improving Ongoing productivity and customer service. 2. 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 adverse fiscal impacts on the City by State, federal or County agencies. 3. 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. 4. Update the 2000 Cost of Services Study. Consistent with the City's user fee policy of preparing a comprehensive cost of services study at least every five years: a. Develop workscope and issue request for proposals. 10/05 b. Select consultant,award contract and begin preparing study. 12/05 c. Complete draft report. 3/06 d. Present findings to Council. 4/06 e. Implement cost recovery policies. 7/06 -54- ^ !�- 0 MAJOR CITY GOALS LONG-TERM FISCAL HEALTH t.as k Date 5. Consider Preparing for a Revenue Ballot Measure in 2006. Complete analysis of the 7/05 feasibility of a revenue ballot measure and present the results to the Council for a"go/no- go"decision in taking the next step in preparing fora revenue measure in 2006. If the Council decides to go forward,follow-up action steps will be determined at that time. 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 & Information Technology will be especially involved in achieving this goal. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL 1. Updating the cost of services study will cost$47,500 in 2005-06. 2. Analyzing the feasibility of a 2006 revenue ballot measure has already been funded in the amount of$35,000 as part of the 2004-05 Mid-Year Budget Review.. Depending on the results of this analysis, an additional $75,000 to $150,000 will be needed if we proceed to the next step in this process of conducting a public education program. If the Council decides to place a measure on the ballot; then $20,000 to $60,000 will be needed in contracting with the County to hold this election. 3. All other tasks can be achieved within existing resources. Cost Snmmar Operatio P rogram Ca ital Im rovement Plan 2005-06 1 2006-07 2005-06 2006-07 Update 2000 Cost of Services Study 47,500 Total $47,500 $0 $01 n. Only funding for the cost of services study is recommended at this time as part of the 2005-07 Financial Plan. Any funding decisions in preparing for a revenue ballot measure should wait until the Council decides to do so, which is likely to occur after the Council approves the 2005-07 Financial Plan. In the event that the Council approves going forward with a public information program as "Step 2: in this process, we believe that this would be an appropriate use of the reserve as a one-time cost that positions us for an improved long-term fiscal outlook. GENERAL FUND REVENUE POTENTIAL Each of these action pians is designed to enhance General Fund resources. OUTCOME=FINAL WORK PRODUCT Strategies, programs and systems for assuring our long-term fiscal health in delivering desired service levels, adequately maintaining existing infrastructure and facilities; and accomplishing important community goals. -55 - - �9