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HomeMy WebLinkAbout12/12/2006, BUS 1 - AUTHORIZATION TO EXERCISE THE OPTION AGREEMENT WITH ERCOLE AND NAOMIE BRUGHELLI FOR PURCHASE OF AN council rVOP j agenba nepout C I TY OF SAN LU IS O B I S P O FROM: Shelly Stanwyck, Assistant City Administrative Officer Prepared By: Neil Havlik, Natural Resources Manager'_0IN .- SUBJECT: SUBJECT: AUTHORIZATION TO EXERCISE THE OPTION AGREEMENT WITH ERCOLE AND NAOMIE BRUGHELLI FOR PURCHASE OF AN AGRICULTURAL CONSERVATION EASEMENT ON THE BRUGHELLI RANCH ON BUCKLEY ROAD CAO RECOMMENDATION 1. Authorize staff to exercise the option with Ercole and Naomie Brughelli to purchase an Agricultural Conservation Easement covering the 390 acre Brughelli Ranch on Buckley Road at a below-market price of$750,000. 2. Authorize the remaining available balance in the City's open space protection fund ($625,000) to apply toward purchase of the easement, with the balance ($125,000) to come from community donations. DISCUSSION Overview Community fundraising to complete the Brughelli Ranch has been successfully accomplished. This will allow escrow to be closed on one of the most strategically important open space transactions ever entered into by the City. There are many to recognize for this success, including the Land Conservancy, our other agency partners, and over 200 individual private donors (including four major donors) who collectively contributed$185,000 to the joint Brughelli Ranch/Union Pacific Railroad property fundraising effort. Staff anticipate a dedication ceremony to celebrate this success and honor the many contributors after close of escrow. Background On August 15, 2006, the City Council approved an Option Agreement with Ercole and Naomie Brughelli for the City of San Luis Obispo to purchase an Agricultural Conservation Easement on the 390 acre Brughelli Ranch on Buckley Road. The agreed purchase price for the easement was $750,000, which was approximately 3/a of the fair market value of the easement as determined by appraisal in May of this year. Since the City did not have all the funds necessary to purchase the easement in August, and because of the Brughellis' need for a relatively short option period made fundraising through State grant programs unlikely, the option agreement gave the City time to undertake a public fundraising effort to raise the full amount. This was done in partnership with the Land Conservancy of San Luis Obispo County, which holds an option to purchase 315 acres of land on West Cuesta Ridge from the Union Pacific Railroad Company, and also needed to do some public fundraising. G/Havlik/Councilagenda/Brughelli option exercise Brughelli Option Exercise December 12,2006 Page 2 The option agreement requires that the option be exercised and the transaction concluded before the end of calendar 2006. The Significance of the Brughelli Property to the Open Space Protection Program. Agricultural properties south of the Airport and in the Edna Valley have long been a high priority for easement acquisition by the City of San Luis Obispo. Unfortunately,few landowners have shown, much interest in conservation transactions, and efforts in this area have been challenging. The interest in such a transaction by the Brughelli family is therefore a significant breakthrough in this regard. The 390-acre Brughelli Ranch on Buckley Road is one of the largest single properties in the area south of the Airport (Attachment 1). It consists of prime soils, about 50 acres of which are currently farmed, and rolling hills used for livestock grazing. More of the property was dry- farmed in the past, as was the case on many properties in that area. The Brughellis have repeatedly stated their interest in preservation of the property, and about four years ago entered into formal negotiations with City staff about purchase of an agricultural conservation easement. The matter has gone through several iterations since we first began discussions. The Brughellis have stayed with the effort, and continuing discussions have taken place to explore a concept covering the entire property (rather than a portion), and limiting the property to uses consistent with agricultural zoning in the County. The Easement. The Agricultural Conservation Easement over the Brughelli property: a. Covers the entire 390 acres of the property; b. Restricts the land in perpetuity to uses permitted in the County's current agricultural zone, as that zone exists today; c. Allows for no more than 18 dwelling units on the property, which is the theoretical maximum allowed under current zoning, with a requirement for clustering and subject to the review and approval of both the City of San Luis Obispo and the County of San Luis Obispo; and d. Restricts agricultural land uses to those directly connected to agricultural production from the property. This would still allow, for example, a vineyard and winery, but not a church or agricultural services such as equipment repair or storage, etc. The easement will "lock in" 390 acres of land very close to the city into agricultural uses in perpetuity. Staff believes that this is a creative approach to agricultural land conservation that will prove worthy of emulation in the future, given the tremendous long-term development potential of the property. Exercise of the Option As described in Paragraph One of the Option Agreement, exercise of the option entails giving written notice to the Brughellis and the Escrow Holder(First American Title) of the City's intent —01 Brughelli Option Exercise December 12,2006 Page 3 to exercise the option. Upon payment of the purchase price ($750,000 less the $10,000 option payment), transfer of the easement will be complete. CONCURRENCE The Planning Commission reviewed the easement purchase concept in December 2004, and found the acquisition of an agricultural conservation easement on the property to be consistent with the City's General Plan. The current effort includes more of the property; however, staff feels that the concept is unchanged and the 2004 Planning Commission finding remains valid. FISCAL IMPACT There are three "sources" of funds for this purchase:a charitable contribution by the Brughellis, City open space program funds and interest earned on those funds, and donations from over 200 members from our community. 1. The Brughelli Charitable Contribution The purchase price of the easement is $750,000. This is 76.9% of the easement's appraised value of$975,000. The balance ($225,000) is a charitable contribution on the part of the Brughellis. 2. The City's Contribution. Since Council's approval of the Option Agreement on August 15, 2006, a thorough review of the open space program fund balance revealed that there was $75,000 in accrued interest that could be appropriated to the project. Staff had been unaware that this interest could be applied to the project, thus the monies needed to be raised from the private sector were actually$125,000, rather than the $200,000 originally thought. In completing the purchase, the City can therefore contribute $625,000 in General fund monies (which includes accrued interest) and Airport Area Open Space impact fees. 3. Private Sector Donations. The fundraising effort to "close the gap" which the Natural Resources Program undertook in partnership with the Land Conservancy has been very successful, and sufficient funds have been raised to allow us to exercise the option. Staff is pleased to report that more than 200 contributions were received to make up the remaining balance of$125,000 The Land Conservancy has collected the private sector funds for both this transaction and the Union Pacific Railroad property transaction, and will transfer$125,000 directly into the escrow at First American Title upon request. If Council authorizes the exercise of this option, staff will upon close of escrow coordinate a dedication and recognition event to acknowledge the generosity of the Brughellis and our donors. There will be only minor monitoring costs funded out of the City's Natural Resources Program. ATTACHMENTS 1. Location Map 2. Option Agreement and Agricultural Conservation Easement - 3 on,Park ♦ Q'� 4aN �,�•.,p '¢`��,s1,• . .� :� iy i' + _ ., l -rk1 _- oNl--.o Tower, ; `t) ,f "SrMlaimart�l Park00, on•.•..,ti. �• l_- L_•:.1'1 (i i h Sinsenner r h a ;zao'l. Park y ..�� • y"�_ �' a 1.—..!`� .. �_ . !B ( '• I `'Yater. �• �, '.•} o...A It ., r<s e<a<`�\ f\��`.I-,--_-=� y... v. f,,r•+'•f ..�i.Y.r i�'. •i./ lt\� \°a^\;;� ••r',.°1M• dacurr 1 a� r• �`�.^ \ `.V ,\, c t \` `� •.� .' I BM 2 ••�•• halter P•, `\ ark ••'/ 'Ct4'eu T`roneateli ¢railer u I`\(1�•`g�� �.',••` �� �,•'' �•�eo e•.7 ) `t-.' 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I`. •;' — l\ \... � �,. \ —�'' .. ^� 709 r r 89 �.".�• � •�•` r neo j 1 CITY OF SAN LUIS OBISPO GREENBELT PROTECTION PROGRAM Brughelli property Conservation Easement Acquisition Scale 1 '=2,000' 1 - 4 I I - ATTACHMENT 2 AGREEMENT OF OPTION FOR PURCHASE AND SALE OF AN AGRICULTURAL CONSERVATION EASEMENT AFFECTING REAL PROPERTY This AGREEMENT OF OPTION FOR PURCHASE AND SALE OF AN AGRICULTURAL CONSERVATION EASEMENT AFFECTING REAL PROPERTY is entered into by and between the CITY OF SAN LUIS OBISPO ("Buyer"), a California Charter Municipal Corporation, and ERCOLE C. BRUGHELLI and NAOMIE BRUGHELLI,Trustees of the ERCOLE and NAOMIE BRUGHELLI TRUST dated July 19, 1999 (collectively, "Seller"), pursuant to the following RECITALS WHEREAS, Buyer is a California Charter Municipal Corporation; and WHEREAS, Buyer, acting through its City Council and through adopted public procedures, has determined that certain lands surrounding the city of San Luis Obispo are important to the scenic character, healthy natural environment, and economic and social well being of the community and its citizens; and WHEREAS, Buyer seeks to preserve and conserve characteristics such as visual quality, wildlife habitat, and other community attributes where appropriate surrounding the City; and WHEREAS, Seller is owner of certain lands adjacent to the City which are of scenic and agricultural value to the City and County of San Luis Obispo; and WHEREAS, Seller wishes to preserve, protect and restore the scenic and agricultural values which exist or may exist on the Property, and WHEREAS, the purchase of an agricultural conservation easement on said land in the judgment of Buyer would act to preserve the values indicated above and serve an important municipal purpose; and WHEREAS, both Buyer and Seller recognize that time will be required to secure the funds necessary for the transaction, and for other matters related thereto. NOW,THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS`. 1. OPTION; OPTION TERM; AND EXERCISE OF OPTION. (a) Grant of Option. Seller, for valuable consideration, hereby grants to Buyer an exclusive Option to purchase the conservation easement described in the Open 1 ( - !9, ATTACHMENT 2 Space and Agricultural Conservation Easement Agreement attached as Exhibit A hereto: covering Seller's property located at 485 Buckley Road, San Luis Obispo, California; consisting of approximately 390 acres; identified as San Luis Obispo County APN 076- 061-002; and described more particularly in Exhibit B attached hereto ("the Property"). The open space and agricultural conservation easement described in Exhibit A is hereafter referred to as the "Agricultural Conservation Easement." (b) Term of Option. Buyer and Seller agree that the term of this Option shall commence on the date of execution of this Option Agreement, and continue until December 28, 2006. (c) Exercise of Option. Buyer may exercise the Option at any time within the applicable option period by giving written notice of exercise of the Option to Seller and Escrow Holder(as described below) to consummate the transfer. 2. OPTION PAYMENT; REFUND OF OPTION PAYMENT. (a) Option Payment. As consideration for the grant of the Option, Buyer shall pay Seller the sum of Ten Thousand Dollars ($10,000) as an Option consideration on the execution hereof. Such sum shall not be refundable, except as described in paragraph 2(b) next. If the Option is timely exercised by Buyer, the amounts paid to Seller as Option consideration shall apply to and be credited against the purchase price. (b) Refund of Option_Pavment(s). If Seller is unable to deliver clear title to the Property to Buyer, and Buyer elects not to purchase the Agricultural Conservation Easement then Seller shall refund the full Option payment to Buyer less the amount of any damages described in paragraph 5(b) below when the obligation of Buyer. 3. PURCHASE PRICE The total purchase price for the Agricultural Conservation Easement shall be $750,000.00, payable in cash at the close of escrow. The parties hereby acknowledge that the market value of the Agricultural Conservation Easement is $975,000 determined as of May 15, 2006, by an independent appraisal procured by Buyer. The parties intend that Seller will sell the Agricultural Conservation Easement for less than its fair market value. 4. CONVEYANCE Title to the easement shall be conveyed by recordation of the Agricultural Conservation Easement in the form of Exhibit A attached hereto and shall be insured by a CLTA (or at Buyer's election, an ALTA) owners' policy of title insurance in the amount of the purchase price, showing recordation of the Agricultural Conservation Easement, subject only to those exceptions listed in the Preliminary Title Report and/or Supplemental Report approved or deemed approved by Buyer. 2 � � � ATTACHMENT 2 5. CONDITIONS PRECEDENT FOR BENEFIT OF BUYER Buyer's obligation to purchase the Property is expressly conditioned upon the satisfaction, deemed approval, or Buyer's waiver of each of the following conditions, each of which is deemed exclusively for the benefit of Buyer: (a) Supplemental Title Report. Buyer hereby approves the condition of title and all exceptions thereto set forth in the First American Title Preliminary Report of Title dated by June 23, 2006 and attached as Exhibit C hereto. Buyer's shall have the right to approve any new changes or exceptions to Exhibit C furnished by First American Title in a Supplemental Title Report on exercise of the Option (the "Supplemental Title Report"). Buyer shall have ten (10) calendar days after the receipt of the Supplemental Title Report and copies of all documents referenced therein, to provide to Seller and Escrow Holder written notice of Buyer's disapproval of any specific title exception not shown on Exhibit C. Any new title exception not so disapproved shall be deemed approved. If Buyer disapproves any new title exception, Seller shall have no obligation to cure the same, but Seller may elect, by written notice given to Buyer within ten (10) calendar days after receipt by Seller of Buyer's notice of disapproval, to attempt to cure or remove such disapproved item or to ignore it. If Seller is unable within a reasonable time to accomplish such cure or removal, or elects not to attempt to cure or remove a disapproved exception, then Buyer may elect to (i) terminate its obligations under this Agreement, (ii) waive its objections to such exception, or(iii)elect to correct any such disapproved exception itself, in which case Seller will provide reasonable assistance to Buyer to cure the same. (b) Inspection and Approval of Property and any Testing Thereon. Buyer's inspection and approval of the Property and all improvements thereon, including (at Buyer's option and expense) any surveys or studies deemed necessary in Buyer's sole judgment. Access to the property shall be given to Buyer, its agents and authorized representatives during normal business hours, at their own cost and risk, upon at least one (1)business day's notice to Seller for any purpose relating to Buyer's conditions. Buyer shall indemnify and defend Seller against and hold Seller harmless from all losses, costs, damages, liabilities, and expenses, including, without limitation, reasonable attorney fees arising out of Buyer's entry onto the Property or any activity thereon by Buyer or its agents, or authorized representatives, except to the extent any such losses, costs, damages, liabilities, and expenses arise out of the gross negligence or willful acts of Seller. If Buyer discovers any defect on the Property or improvements thereon which Buyer disapproves, Seller shall have no obligation to correct such defect, but Seller may elect, by written notice to Buyer within ten (10) calendar days after receipt by Seller of such notice of disapproval, to attempt to correct such defect or to ignore it. If Seller is unable within a reasonable time to complete such correction, or if Seller elects not to attempt to correct the same, Buyer may elect to (i) terminate its obligations under this Agreement, (ii) waive its objections to the defect, or(iii)elect to correct the same itself, in which case Seller will provide reasonable assistance to Buyer to correct the 3 ( _ I� ATTACHMENT 2 same. The parties may also enter into additional negotiations, as may be mutually acceptable, concerning adjustment of the purchase price, allocation of risk, or contribution to the costs to cure or other matters, and the Escrow shall be extended for a reasonable time to effect such negotiations. 6. ESCROW (a) Escrow Holder. Buyer and Seller will establish an escrow ("Escrow") with First American Title Insurance Company, 899 Pacific Street, San Luis Obispo, California 93449 ("Escrow Holder") within ten (10) business days of execution of this Agreement, subject to the provisions of the standard conditions for acceptance of escrow and the terms and conditions in this Agreement, with a signed counterpart of this document to be delivered as escrow instructions to Escrow Holder. In the event of any conflict between the terms of this Agreement and the standard conditions for acceptance of escrow, the terms of this Agreement shall control. (b) Prorations and Fees. All escrow fees and costs shall be allocated according to custom in San Luis Obispo County. (c) Closing Date. Escrow shall close on or before December 29, 2006 ("Close of Escrow"). 7. REPRESENTATIONS, WARRANTIES,AND AGREEMENTS (a) Authorized Representative. Buyer and Seller hereby represent and warrant to each other that the persons who sign this agreement and any other documents required to be executed by such party to perform its obligations hereunder, shall have all requisite power and authority to have entered into this Agreement, and that all authorizations required to be obtained by or on the part of such party to execute and perform this Agreement have been obtained. (b) Proof of Citizenship. Seller is not a foreign person as such term is used in Section 1445 of the Internal Revenue Code. Prior to the Close of Escrow, Seller shall deposit in Escrow a non-foreign affidavit as provided under said Section 1445. Failure to do so shall entitle Buyer to withhold from the purchase price such sums as are required by said Section 1445. (c) Legal Actions. Seller represents and warrants to Buyer that there are no actions, suits, or legal proceedings related to the ownership, use, operation or sale of the Property to which Seller is a party nor has Seller received any notice that any such actions are pending or threatened. (d) Seller's Knowledge of Environmental Conditions of the Property. To the best of Seller's knowledge, there are not now nor have there been any hazardous or toxic wastes (as said terms are defined in Federal, State, or County laws or 4 1 — g ATTACHMENT 2 regulations) located on or within any portion of the Property; nor have there been any enforcement, cleanup, removal or other governmental or regulatory actions instituted, contemplated, or threatened pursuant to any applicable Federal, State, or local laws or regulations relating to any hazardous materials and affecting the Property; nor have there been any claims made or threatened by any third party against Seller or the Property, relating to damage, contribution, cost recovery, compensation, loss or injury resulting from any hazardous materials. 8. NOTICES All notices, communications, consents, approvals and disapprovals required or permitted hereunder must be in writing and shall be delivered by personal delivery, facsimile, or deposited in the United.States mail, postage prepaid and addressed as follows: TO BUYER: City of San Luis Obispo Dr. Neil Havlik, Natural Resources Manager 990 Palm Street San Luis Obispo, CA 93401 TO SELLER: Ercole and Naomie Brughelli 485 Buckley Road San Luis Obispo, CA. 93401 With a copy to: Richard N. Racouillat Duggan Smith and Hutkin LLP 979 Osos Street, Suite F San Luis Obispo, CA 93401 The foregoing may be changed by written notice. If served personally, or by facsimile, service shall be conclusively deemed made at the time of service. If served by mail, service shall be conclusively deemed made seventy-two (72) hours after deposit thereof in the United States mail. 9. BROKERS Neither party to this transaction has employed a real estate broker in this transaction and each party hereby indemnifies and holds harmless the other party for any commission claimed through a third party. 10. SURVIVAL The warranties, representations, and agreements made in this Agreement shall survive the close of escrow. 5 1 ATTACHMENT 2 11. MISCELLANEOUS (a) Entire Agreement. This Agreement, and the exhibits hereto, contain the entire agreement between the parties hereto. No modification or addition to any term or provision hereof shall be effective unless made in writing and signed by both parties hereto. The captions and headings in this Agreement are for reference only and shall not be deemed to define or limit the scope or intent of any of the terms, covenants, conditions or agreements contained herein. (b) Attorneys' Fees. If an action or proceeding is commenced between the parties,the prevailing party shall be entitled to recover from,the non-prevailing party its reasonable attorney fees and costs. (c) Successors. This Agreement shall inure to the benefit of and shall be binding upon the parties to this Agreement and their respective heirs, successors, and assigns. (d) Governing Law. This Agreement shall be governed and construed in accordance with California law. (e) Time of Essence. Time is of the essence in this Agreement. (f) Offer and Acceptance. This Agreement shall be of no force or effect whatsoever until signed by authorized representatives of both Buyer and Seller. (g) Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be deemed an original. "Seller" ERCOLE and NAOMIE BRUGHELLI TRUST dated July 19, 1999 ERCOLE C. BRUGHI:LTrustee NAOMIE BRUGHELLI, Trustee DATE: August 3,2006 DATE: August 3, 2006 6 AT ACh,hi`NT 2 «Bue„ CITY OF SAN LUIS OBISPO By: DATE: DAVID F. ROMERO,MAYOR ATTEST: APPROVED AS TO FORM: Audrey Hooper C Lowell City Clerk• City Attorney 7 j ATT SeCHMEXT 2 STATE OF CALIFORNIA ) (. ss t 1 UNTY OF SAN LUIS OBISP n , 2006,be re me, a Notary P lic for the State of California,p onally appeared DAVI F. RONIERO ry personally own to me(or proved to me on a basis of satisfactoa 'dence)to be the person(s)who name(s) is/are subscribed.to within instrument, and knowledged to me that he/she/th executed the same in his/her eir authorized capacity( s), and that by his/her/their si ture(s)on the instrument the p on(s)or the entity upo behalf of which the person(s) d, executed the instrument. WITNESS my han d official seal. Notary Public STATE OF CALIFORNIA ) } ss COUNTY OF SAN LUIS OBISPO ) On August 3, 2006,before me, SANDRA V. HAILEY, a Notary Public for the State of California,personally appeared ERCOLE C. BRUGHELLI and NAOMIE BRUGHELLI personally known to me(or proved to me on the basis of satisfactory evidence)to be the person(s)whose name(s)is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),and that by his/her/their signature(s) on the instrument the person(s)Orme entity upon behalf of which the person(s)acted, executed the instrument. WITNESS my hand and official seal. MMM v Half o Public ear+�rom mikes � Nonan Pubes-Caftft conn oec 81, 8 ATTACHMENT 2 STATE OF CALIFORNIA ) )ss COUNTY OF SAN LUIS OBISPO ) On August.31,2006,before me Audrey Hooper, City Clerk,personally appeared David.F.. Romero,Mayor, CITY OF SAN LUIS OBISPO,personally known to me(or proved to me on the basis of satisfactory evidence)to be the person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature 11A f9 Jerk (Seal) I - i3 / r ATTACHMENT 2 EXHIBIT A RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of San Luis Obispo Office of the City Clerk 990 Palm Street San Luis Obispo, CA 93401-3249 OPEN SPACE AND AGRICULTURAL CONSERVATION EASEMENT AGREEMENT This Open Space and Agricultural Conservation Easement Agreement ("Agreement") is made and entered into this day of , 200_, by and between ERCOLE C. BRUGHELLI and NAOMIE BRUGHELLI, Trustees of the ERCOLE and NAOMIE BRUGHELLI TRUST dated July 19, 1999 (the "Grantor"), and the CITY OF SAN LUIS OBISPO, a municipal corporation of the State of California (the "City"). WITNESSETH A. Grantor owns that certain real property located at 485 Buckley Road in the unincorporated area of the County of San Luis Obispo, California(Assessor Parcel Number 076-061-002), consisting of approximately 390 acres of land and improvements (the "Subject Property"). The Subject Property is more particularly described in Exhibit A attached hereto. Grantor wishes to place the Subject Property under the protective covenants of this Open Space and Agricultural Conservation Easement Agreement. The easement granted in this Agreement is hereafter described as the "Agricultural Conservation Easement." B. The existing buildings and improvements located on the Subject Property are depicted in Exhibit B attached hereto. The Subject Property also includes open farmland and grazing land, approximately 60 percent of whose soils have been classified as prime farmland by the Natural Resource Conservation Service,U.S. Department of Agriculture, and by the California Department of Conservation Farmland Mapping and Monitoring Program, because this land has a soil quality, growing season, and moisture supply needed for sustained agricultural production. C. The agricultural and other characteristics of the Subject Property, its current use and state of improvement are described in a Present Conditions Report prepared by the City with the cooperation of Grantor, and acknowledged by both parties to be reasonably complete and accurate as of the date of this Agreement. A copy of such report is on file at 1 4 dTriACHM, ENT 2 the offices of City and is incorporated herein by this reference. Such report is intended to serve as an objective baseline for monitoring compliance with the terms of this grant. D. The market value of the Agricultural Conservation Easement granted to City by this Agreement has been determined by independent appraisal. A copy of the Appraisal Report of the Subject Property dated as of May 15, 2006, prepared by Schenberger,Taylor, McCormick and Jecker, Inc., and approved by City and Grantor, has been provided to City and Grantor. The Appraisal Report concludes that the market value of the Agricultural Conservation Easement provided for in this Agreement is $975,000.00. Grantor is willing to convey this Agricultural Conservation Easement for less than fair market value, namely $750,000.00, to preserve the Subject Property's natural character and existing openness by voluntarily restricting Grantor's use of and activities on the Subject Property through the imposition of a perpetual open space and agricultural conservation easement on the terms and conditions set forth in this Agreement. E. City will acquire this Agricultural Conservation Easement through a substantial investment intended to qualify under Internal Revenue Code §170(h) applicable to a qualified conservation contribution. The funds paid represent a substantial investment by the People of the State of California in the long-term conservation of valuable agricultural land, and the retention of agricultural land in perpetuity. The Subject Property and this Agricultural Conservation Easement have met the California Farmland Conservancy Program's mandatory eligibility criteria and certain selection criteria. The Subject Property and this Agricultural Conservation Easement also have multiple natural resource conservation objectives. The rights vested herein arise out of the State's statutory role in fostering the conservation of agricultural land in California and its role as contributor of, and fiduciary for, the public investment represented here. F. Grantor grants this Agricultural Conservation Easement to the City for valuable consideration and for the exclusive purpose of assuring that, under the City's perpetual stewardship, the Subject Property will be conserved and maintained in accordance with the terms of this Agreement, and that uses of the Subject Property that are inconsistent with this purpose will be prevented or corrected. The concern of the Grantor and City is that, but for this grant, the agricultural attributes and uses of the Subject Property will be compromised by increasing pressure from neighboring agricultural properties that have been converted to more intensive residential density. G. The conservation purposes of this Easement are recognized by, and the grant of this Easement will serve, the following clearly delineated governmental conservation policies: Section 815 of the California Civil Code, which defines perpetual conservation easements; California Constitution Article XIII, section 8, and Revenue and Taxation Code sections 421.5 and 422.5, under which this Agricultural Conservation Easement is an enforceable restriction, requiring that the Subject Property's tax valuation be 2 l - � � d. consistent with restriction of its use for purposes of food and fiber production and conservation of natural resources. Division 10.2 (sections 10200, et seq.) of the.California Public Resources Code, which creates the California Farmland Conservancy Program; Section 51220 of the California Government Code, which declares a public interest in the preservation of agricultural lands; The San Luis Obispo County General Plan, as amended in December 1996, which includes as one of its goals to protect all viable farmlands designated as prime, of statewide importance, unique, or of local importance from conversion to and encroachment of non-agricultural uses;and Resolution No. 2003-26, approved by the Board of Supervisors of San Luis Obispo County on the 28th day of January, 2002, which expresses support for the acquisition of an agricultural conservation easement on the Subject Property, and finds that such protection is consistent with the County's General Plan. H. City is a California municipal corporation, and, as certified by a resolution of its City Council, accepts the responsibility of enforcing the terms of this Easement. Now, therefore, for the reasons given, and in consideration of their mutual promises and covenants, terms, conditions and restrictions contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Grantor voluntarily grants and conveys to the City, and City voluntarily accepts, a perpetual Conservation Easement, as defined by Section 815.1 of the Civil Code of California, and of the nature and character described in this Agreement, and agree as follows. 1. GRANT OF EASEMENT. Grantor hereby grants to City in perpetuity an open space and agricultural conservation easement on the terms and conditions of this Agreement over the Subject Property as described in Exhibit A. Said grant of an agricultural conservation easement conveys to City an estate and interest in the Subject Property. The purpose of this Agricultural Conservation Easement is to allow continuation of historical agricultural activities on the property and such other activities as are consistent with the restrictions set forth herein, and to otherwise restrict the use of the Subject Property as hereinafter set forth. 2. CONDITIONS OF EASEMENT. The restrictions hereby imposed upon the use of the Subject Property, and any portion thereof, by Grantor and the acts which Grantor shall refrain from doing upon the Subject Property are, and shall be, as follows: (a) General Plan Amendments. Amending the General Plan to a land use category that would allow a higher density of development than that which is allowed on July 1, 2006, (namely, a maximum of 18 residential units) based on the 3 t ^ ( (P ATTACP EENT 2 General Plan of'San Luis Obispo County is prohibited. A certified copy of such General Plan shall be maintained by City. (b) Prohibited Uses. All activities or uses that are not permitted under the General Plan of the County of San Luis Obispo, including its Land Use Ordinances related to property classified as "Agriculture" as of July 1, 2006, are prohibited. A certified copy of such General Plan and such Land Use Ordinances shall be maintained by City. In addition, the following activities or uses that are defined and authorized in land classified as "Agriculture" by such General Plan are prohibited: (1) Airfields or Landing Strips except as may be necessary in support of agricultural activities. (2) Bed and Breakfast facilities except those whose primary purpose is in support of agricultural tourism. (3) Caretaker Residence except as may be necessary in support of agricultural activities. (4) Churches. (5) Concrete, Gypsum, or Plaster Products. (6) Food and Kindred Products when food processing and manufacturing establishments. (7) Indoor Amusement and Recreation Facilities except when permitted under subparagraphs (c) - (f) of this Paragraph 2. (8) Libraries and Museums except when permitted under subparagraphs (c) - (f) of this Paragraph 2. (9) Membership Organization facilities except when permitted under subparagraphs (c) - (f) of this Paragraph 2. (10) Surface Mining. (11) Mobile Homes unless a caretaker's residence or when permitted under subparagraphs (c) - (f) of this Paragraph 2. (12) Paving Materials. (c) Subdivisions. Subdivision of the Subject Property into more lots than are permitted for agricultural zoning is prohibited. Any proposed subdivision of the Subject Property shall be subject to the reasonable review and approval of the City of San Luis Obispo and, if applicable, the approval authority of the County of San Luis Obispo. The parties acknowledge that the intent of this restriction is to keep the property in productive agricultural use and that any permitted residential development shall be located or clustered in such a manner as to protect the productive agricultural use of the Subject Property. 4 ' ^ (� ATTAChR ENT 2 (d) Residential Structures. Construction and placement of any residential structures, and associated infrastructure shall be subject to the reasonable review and approval of the City of San Luis Obispo and, if applicable, the approval authority of the County of San Luis Obispo. (e) Large Agricultural Structures. Large structures associated with agricultural production, such as winery facilities, may be constructed on the Subject Property subject to the reasonable review and approval of the City of San Luis Obispo and, if applicable, the approval authority of the County of San Luis Obispo. Any such large structures must be clearly associated with agricultural production from the Subject Property. (f) Other Improvements. Except as provided in subparagraphs (b), (c), (d), and (e) above, no other buildings or other structures may be constructed or installed on the Subject Property, except structures and improvements permitted in an agricultural zone for agricultural production on the Subject Property. Such other permitted improvements include, for example, barns, equipment sheds, irrigation systems, fencing, and improvements for agricultural production purposes and the sale of farm products predominately grown or raised on the Subject Property. All such structures and improvements, individually and combined, must be consistent with the provisions of this Agricultural Conservation Easement and Public Resources Code § 10262. Any such structures proposed to be built or placed on the Subject Property shall be subject to the reasonable prior review and approval of the City of San Luis Obispo and, if applicable, to the approval authority of the County of San Luis Obispo. (g) Advertisements. No signs, billboards, or similar structures or devices or advertising of any kind or nature may be located on the Subject Property, except for reasonable identifying signage associated with any approved activity. (h) Natural Resources. No extraction of surface or subsurface natural resources (except water resources) may be allowed on the Subject Property. Subsurface oil and gas resources, if found to be present, may be extracted by proper technological methods. (i) Impervious Surfaces. Impervious surfaces shall be minimized, and in no case shall such surfaces exceed five percent (5%) of the area of the Subject Property. 3. GRANTOR TO RETAIN ALL WATER RIGHTS. Grantor shall retain and reserve all water rights of any kind or nature on the Subject Property. 4. EASEMENT TO BE PERPETUAL. This Agricultural Conservation Easement shall remain in effect in perpetuity. 5 , - l �' 5. TERMS BINDING ON SUCCESSORS. The terms and conditions contained herein shall be binding on the parties hereto and their heirs, successors and assigns. 6. ALL OTHER RIGHTS RETAINED BY GRANTOR. Grantor retains the right to perform any act on the Subject Property not specifically prohibited or limited by .this Agreement. Such ownership rights include, but are not limited to, the right to exclude any member of the public from trespassing, and the right to sell, lease, or otherwise transfer the Subject Property, or properly subdivided portions thereof, to anyone they choose. 7. NO OTHER LEGAL OBLIGATIONS IMPOSED ON CITY. Other than as specified herein, this Agreement is not intended to impose any legal or other responsibility on the City of San Luis Obispo, or in any way to affect any existing obligation of the Grantor as owner of the Subject Property. Among other things, this shall apply to: (a) Taxes. Grantor shall be solely responsible for payment of all taxes and assessments levied against the Subject Property including the Easement Area. If the City ever pays any taxes or assessments on the Subject Property, or if the City pays levies on Grantor's interest in order to protect City's interests in the Subject Property, Grantor will reimburse the City for the same. (b) Upkeep and Maintenance. Grantor shall be solely responsible for the upkeep and maintenance of the Subject Property to the extent required by law. City shall have no obligation for the upkeep or maintenance of the Subject Property, except as specifically provided in this Agreement. (c) Liability and Indemnification. In consideration of City's negative rights, limited access to the land, and lack of active involvement in the day-to-day management activities on the Subject Property, Grantor shall indemnify, protect, defend and hold City, its officers, directors, members, employees, contractors, legal representatives, agents, successors and assigns harmless from and against all liabilities costs, losses, orders, liens, penalties, damages, expenses, or causes of action, claims, demands, or judgments,including without limitation reasonable attorney's fees, arising from or in any way connected with injury or the death of any person, or physical damage to any property, or any other costs or liabilities resulting from any act, omission, condition, or other matter related to or occurring on or about the Subject Property, regardless of cause, unless due to the negligence or willful misconduct of City or any of its officers, directors, members, employees, contractors, legal representatives, agents, successors, and assigns. City shall be named additional insured on Grantor's general liability insurance policy. City shall indemnify, protect, defend and hold Grantor, its trustees, officers, directors, employees, contractors, legal representatives, agents, successors and assigns harmless from and against all liabilities costs, losses, orders, liens, penalties, damages, expenses, or causes of action, claims, demands, or judgments, 6. lq including without limitation reasonable attorney's fees, arising from or in any way connected with injury or the death of any person, or physical damage to any property, or any other costs or liabilities resulting from any act, omission, condition, or other matter related to or occurring on or about the Subject Property due to the negligence or willful misconduct of City or any of its officers, directors, members, employees, contractors, legal representatives, agents, successors, and assigns. 8. CITY MONITORING OBLIGATIONS. City shall manage its responsibilities for the Subject Property,including, but not limited to, annual monitoring, such additional monitoring as circumstances may require, record keeping, and enforcement, for the purposes of preserving the agricultural productive capacity and open space character of the Subject Property consistent with the terms of this Agreement in perpetuity. City shall maintain a record of annual monitoring, describing the method of monitoring, condition of the Subject Property, stating whether any violations were found during the period, describing any corrective actions taken, and the resolution of any violation, 9. ENFORCEMENT AND COSTS. City shall have the right to prevent and correct violations of the terms of this Agreement. With reasonable advance notice to Grantor, the City may enter the Subject Property for the purposes of inspection. If the City finds what it believes is a violation, it may at its discretion take appropriate action, including legal action, subject to the provisions of Section 10, Arbitration. Except when an ongoing or imminent violation could irreversibly diminish or impair the open space character and agricultural productivity of the Subject Property, City shall give Grantor written notice of any such violation and thirty (30) days to correct it, before filing any legal action. If a court with jurisdiction determines that a violation may exist or has occurred, City may obtain an injunction to stop it, temporarily or permanently. A court may also issue an injunction requiring Grantor to restore the Subject Property to its condition prior to the violation. The failure of City to discover a violation or to take immediate legal action shall not bar it from doing so at a later time. Without limiting Grantor's liability therefore, City shall apply damages recovered to the cost of undertaking any corrective action on the Subject Property. Should the restoration of lost values be impossible or impractical for whatever reason, City shall apply any and all damages recovered to furthering the City's mission, with primary emphasis on agricultural easement acquisition and enforcement. Nothing contained in this Agreement shall be construed to entitle City to bring any action against Grantor for any injury to or change in the Subject Property resulting from causes beyond Grantor's control, including, without limitation, fire, flood, storm, earth movement or from any prudent action taken by Grantor under emergency conditions to prevent, abate, or mitigate significant injury to the Subject Property resulting from such causes. In any case where a court finds that a violation has occurred and City is not in default hereunder, Grantor shall reimburse City for all its expenses incurred in stopping and correcting the violation, including but not limited to reasonable attorney's fees. If Grantor prevails in any action or proceeding to enforce the terms of this Agreement, Grantor's costs of suit, including, without limitation, attorneys' fees, shall be borne by City. 7 � � 6�LT� CK�AHT 2 10. ARBITRATION. Any controversy arising from this Agreement or its breach, except an imminent violation that could irreversibly diminish or impair the open space character and agricultural productivity of the Subject Property that requires immediate action under Section 9, shall be determined by arbitration as follows: (a) Within thirty (30) days after a notice by either party to the other requesting arbitration and stating the basis of the party's claim, one arbitrator shall be appointed by each party. Notice of appointment shall be given by each party to the other party when made. If a party fails to appoint an arbitrator within such 30- day period, the arbitrator selected by the other party shall decide the matter. (b) If two arbitrators are timely appointed, they shall immediately choose a third arbitrator to act with them. If they fail within fourteen (14) days of their appointment to select a third arbitrator, on application by either party, a third arbitrator shall be appointed by the then presiding judge of the Superior Court of the State of California in and for the County of San Luis Obispo. The party making the application shall give the other party fourteen (14) day's notice of the application. (c) The arbitration shall be conducted under the Code of Civil Procedure (CCP Sections 1280-1294.2) and be held in San Luis Obispo, California. Both parties agree by signing this Agreement that they are agreeing to have any dispute arising from the matters relating to this Agreement, except for imminent violations subject to Section 9, decided by neutral arbitration as provided by California law and that each party is giving up rights to have the dispute litigated in a court or by jury trial. By signing this Agreement, each party is giving up judicial rights to discovery and appeal unless such rights are specially requested in the notice requesting Arbitration or as permitted by CCP 1280 et. seq. If either party refuses to submit to arbitration, they may be compelled to arbitrate under the authority of the California Code of Civil Procedure. - 11. TRANSFER OF EASEMENT BY CITY. If the City should desire to transfer the Agricultural Conservation Easement created by this Agreement to another qualified party, City must first obtain written permission from the Grantor, which permission shall not be unreasonably withheld. The request shall state the name of the qualified party to which the transfer is proposed, the reasons therefore, and such other information as Grantor may reasonably request. If written consent is given for the proposed transfer, City may transfer the Easement created by this Agreement to: (1) a private nonprofit organization that, at the time of transfer, is a"qualified organization" under Section 170(h) of the U.S. Internal Revenue Code and under Section 815.3(a) of the Civil Code of California and has similar purposes to preserve open space and farmland, as well as agreeing to assume the responsibilities imposed by this Agreement; (2) if no such private nonprofit organization is willing to assume the responsibilities imposed by this Agreement, then the Agricultural Conservation Easement created by this Agreement may be transferred to any public agency authorized to hold interests in real property as provided in section 815.3(b) of the Civil Code of California. Such a transfer may proceed only if the 8 ' _ /� � organization or agency expressly agrees to assume the responsibility imposed on City by this Agreement. If City ever ceases to exist or no longer qualifies under Section 170(h) of the U.S. Internal Revenue Code, or applicable state law, a court with jurisdiction shall, upon consultation with the California Department of Conservation, transfer this Agricultural Conservation Easement, pursuant to the California Public Resources Code Section 10235(b), to another qualified organization, as defined in Section 815.3 of the Civil Code of California, and having similar purposes that agrees to assume the responsibility imposed by this Agreement. 12. VOLUNTARY TRANSFER OF TITLE BY OWNER. Any time the Subject Property itself, or any interest in it, is transferred by the Grantor to any third party, Grantor shall notify the City in writing at least 30 days prior to such transfer, and the document of conveyance shall expressly incorporate by reference this Agreement. Any document conveying a lease of the Subject Property shall expressly incorporate by reference this Agreement. Failure of the Grantor to do so shall not impair the validity of this Agreement or limit its enforceability in any way. The purpose of this section is to ensure that new parties to the Agreement or affected by this Agreement are notified of, and are aware of, its existence. 13. AMENDMENTS MUST BE IN WRITING. This Agreement may be amended only with the written consent of Grantor and City. Any such amendment shall be consistent with the purposes of this Agreement and with City's easement amendment policies, and shall comply with Section 170(h) of the Internal Revenue Code, or any regulations promulgated in accordance with that section, and with Section 815 et seq. of the Civil Code of California, or any regulations promulgated thereunder. 14. TERMINATION OF EASEMENT. Termination of this Agricultural Conservation Easement shall be governed by Sections 10270-10277 of the Public Resources Code of California. 15. TERMINATION BY CONDEMNATION. Termination of this Agricultural Conservation Easement or any portion thereof through condemnation is subject to the requirements of Section 10261 of the Public Resources Code. If all or any portion of the Subject Property is acquired by eminent domain, or by purchase in lieu of eminent domain by any public entity other than City, City shall be paid by the condemnor (or purchaser), 76.9% value of the Agricultural Conservation Easement at the time of condemnation (Public Resources Code Section 10261(a) 2). Should this easement be condemned or otherwise terminated on any portion of the Subject Property, the balance of the Subject Property shall remain subject to this Agreement. In this event, all relevant related documents shall be updated and re-recorded by the City to reflect the modified Subject Property subject to this Easement. 16. INTERPRETATION. References to authorities in this Agreement shall be to the statute, rule, regulation, ordinance or other legal provision that is in effect at the time this easement becomes effective. 9 _ This Agreement shall be interpreted under the laws of California, resolving any ambiguities or questions of the validity of specific provisions so as to give maximum effect to its conservation purposes. 17. NO APPROVALS EXPRESS OR ROPLIED. No provision of this Agreement shall constitute governmental approval of any improvements, construction or other activities that may be permitted under this.Agreement. The easement created by this Agreement pursuant to Civil Code section 815.1 shall run with the land in perpetuity. Every provision of this Agreement that applies to Grantor or City shall also apply to their respective agents; heirs, executors, administrators, assigns, and all other successors as their interests may appear. No merger of title, estate or interest shall be deemed effected by any previous, contemporaneous, or subsequent deed, grant, or assignment of an interest or estate in the Subject Property, or any portion thereof, to City, or its successors or assigns, it being the express intent of the parties that this Agricultural Conservation Easement not be extinguished by, or merged into, or any other interest or estate in the Subject Property now or hereafter held by City or its successors or assigns. 18. NOTICES. Any notices to Grantor and City required by this Agreement shall be in writing and shall be personally delivered or sent by first class mail, to the following addresses, unless a party has been notified by the other of a change of address: To Grantor: Ercole and Naomie Brughelli 485 Buckley Road San Luis Obispo, CA.93401 To City: City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 19. GRANTOR'S HAZARDOUS MATERIALS WARRANTY. Grantor warrants that Grantor has no actual knowledge of a release or threatened release of hazardous substances or wastes on the Subject Property and hereby promises to defend and indemnify City against all litigation, claims, demands, penalties and damages, including reasonable attorneys' fees, arising from or connected with any release of hazardous waste or violation of federal, state or local environmental laws. Notwithstanding any other provision herein to the contrary, the parties do not intend this Agreement be construed such that it creates in or gives the City: (a) the obligations or liability of an "owner" or"operator" as those words are defined and used in environmental laws, as defined below, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 USC section 9601 et seq. And hereinafter"CERCLA"); (b) the obligations or liability of a person described in 42 USC section 9607 (a)(3) or (4); 10 -D3 d"TT y (c) the obligations of a responsible person under any applicable Environmental Laws, as defined below; (d) the right to investigate and remediate any Hazardous Materials, as defined below, associated with the Subject Property; or (e) any control over Grantor's ability to investigate, remove, remediate, or otherwise clean up any Hazardous Materials associated with the Subject Property. The term "Hazardous Materials" includes, without limitation, (a) material that is flammable, explosive, or radioactive; (b) petroleum products; and (c)hazardous materials, hazardous wastes, hazardous or toxic substances, or related materials defined in the CERCLA (42 USC section 9601 et seq.), the Hazardous Materials Transportation Act(49 USC section 5101, et seq.), the Hazardous Waste Control Law (California.Health and Safety Code section 25100 et seq.), and in the regulations adopted and publications promulgated pursuant to them, or any other applicable federal, state, or local laws, ordinances, rules, or regulations now in effect or enacted after this date. The term "Environmental Laws" includes, without limitation, any federal, state or local or administrative agency statute, regulation, rule, ordinance, order or requirement relating to pollution, protection of human health, the environment or Hazardous Materials. 20. GRANTOR'S TITLE WARRANTY. Grantor represents and warrants that Grantor has good fee simple title to the Subject Property, free from any and all liens or encumbrances, except those set forth in Exhibit C, all of which have been subordinated to this Agricultural Conservation Easement, and hereby promises to defend the same against all claims that may be made against it. Grantor represents and warrants that the Subject Property is not subject to any other conservation easement whatsoever. Grantor may grant subsequent conservation easements on the Subject Property, provided that such subsequent easements are for the purpose of wetland, wildlife habitat or biological resource creation, enhancement or preservation, or for the protection and enhancement of agricultural productivity of the Subject Property. City shall be notified in advance, in writing, of any proposed conservation or other easement on the Subject Property, and shall have the right of reasonable review and approval of any such new easements. 21. INVALIDATION. If any term, provision, covenant, or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of this Agreement shall remain in full force and effect and shall in no way be affected, impaired, or invalidated. 22. CITY AGREEMENT. As attested by the signature of its Mayor affixed hereto, in exchange for consideration, City hereby accepts without reservation the rights and responsibilities conveyed by this Agreement. 11 �"A pp f r IN WITNESS WHEREOF, the parties hereto have executed this document on the day and year first written above. GRANTOR ERCOLE and NAOLMIE BRUGHELLI TRUST dated July 19, 1999 By By Ercole Brughelli, Trustee Naomie Brughelli, Trustee CITY CITY OF SAN LUIS OBISPO By David F. Romero,Mayor 12 Exhibit A Exhibit A Description of Property The subject property is described as follows: Lots 1 and 2 and the North Half of Section 14, Township 31 South, Range 12 East, Mount Diablo Base and Meridian, in the County of San Luis Obispo, State of California; According to the Official Plat Thereof. Excepting Therefrom That Parcel of Land Conveyed to the Board of Trustees of Santa Fe School District by Deed Recorded November 27, 1878 in Book L Page 251 of Deeds, Title of which has since passed to San Luis Coastal Unified School District by Judgement Quieting Title Recorded April 29, 1996 as Instrument No. 1996-021085 of Official records. Also Excepting Therefrom '/z Interest in and to all Minerals, Oil, Gas, and Other Hydrocarbon Substances of Whatever Nature in, on or under the Land, as Reserved by Jeanne Marriott, et al, in Deed Recorded April 16, 1948 in Book 473 Page 191 of Official Records, Which Deed further provides, as follows: "Together with Right of Ingress and Egress to and from the Said Land for the Purpose of Exploring Thereo, Drilling and Recovering such Minerals, Oil, Gas and all other Hydrocarbon Substances and for the Purpose of Storing the same Thereon, and for the Further purpose of Transporting the Same over and across the Said land, and to Lay and Maintain all Proper and Convenient Roadways, Pipes and Pipelines, and to Erect and Maintain all Necessary, Proper and Convenient Electric Lines, Telephone and Telegraph Lines on Said Premises, with the Further Reservation and Understanding that the Parties of the First Part,Their Heirs, Successors, Administrators, or Assigns, May Lease for Minerals, Oil, Gas and other Hydrocarbon Substance Purpose without the consent of the Parties of the Second Part,Their Heirs, Successors, Administrators, or Assigns, Relative to the Leasing of Said Premises by Said Parties of the First Part for Said purposes Aforesaid." F?Ir^ Exhibit B Buildings and Improvements on the Subject Property The subject property includes the following buildings and improvements: 1. An approximately 1,330 square foot, single story, wood frame home, with perimeter foundation and a raised front porch. The interior includes three bedrooms, one bath, kitchen, dining area, and living room with fireplace; 2. An approximately 940 square foot carport with a concrete foundation and dirt floor, with corrugated steel roof, wood exterior walls, and open side for parking vehicles and equipment. 3. An approximately 5,570 square foot barn, originally designed for hoses and/or dairy cattle. This barn features a relatively new corrugated metal roof and interior bracing. It also has raised central loft for hay storage. 4. An approximately 1,225 square foot implement shed, used for vehicle and equipment storage. The shed features wood post construction and corrugated metal roof. It is enclosed on three sides. 5. An approximately 445 square foot milking room, now used as a workshop. The structure features concrete floors, wood frame walls with stucco siding, and a corrugated metal roof.. 6. A set of corrals, holding pens, loading chute, and squeeze located near Buckley road; and 7. A windmill, water storage tank, septic system, underground water lines, and landscaping, including a lawn and fruit trees. There is also an old boxcar (believed to be from the narrow-gauge Pacific Coast Railroad) without undercarriage, used for storage. 8. Various fences to contain livestock within the property and away from-that portion of the property used for crop production. These fences are mostly barbed wire. Exhibit C Encumbrances on the Subject Property The subject property is subject to the following encumbrances as of June 23, 2006: 1. General and Special taxes for the fiscal year 2006-2007, not yet due or payable. 2. Lien of Supplemental taxes, if any. 3. Standard public easement for Navigation and Fisheries. 4. Rights, rights of way, reservations and exceptions in the patent recorded July 2, 1875 as Book A Page 620 of Patents, affecting Lots 1 and 2. 5. Rights of the public in and to that portion of the land lying within any County roads. 6. A 16-foot wide easement for drainage purposes in favor of San Luis Obispo County within the northeastern portion of the property. 7. A road easement on the westerly 20 feet of the property for Jespersen Road. 8. Terms and Provisions contained within a document executed pursuant to the California Land Conservation Act of 1965 (Williamson Act); and 9. An easement for drainage purposes in favor of San Luis Obispo County within a portion of the property near Buckley Road. i -i STATE OF CALIFORNIA ) ss COUNTY OF SAN LUIS OBISPO ) On 200_, before me, a Notary Public for the State of California, personally appeared DAVID F. ROMERO personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public STATE OF CALIFORNIA ) ss COUNTY OF SAN LUIS OBISPO ) . On 200_, before me, a Notary Public for the State of California, personally appeared ERCOLE C. BRUGHELLI and NAOMIE BRUGHELLI personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public couna mkeinDek 12-12-06 ac,En0A JWPO 2t ttm umM CITY OF SAN LUIS 0 B I S P 0 IN, f] I FROM: Ken Hampian, City Administrative Officer Bill Statler, Director of Finance & Information Technology SUBJECT: GOAL-SETTING PROCESS FOR 2007-09 CAO RECOMMENDATION Approve the goal-setting process for 2007-09. REPORT-IN-BRIEF The purpose of this report is to finalize the goal-setting process for 2007-09, including detailed plans for the Community Forum to be held on January 10 at the Ludwick Community Center and the Council goal-setting workshop to be held on January 27 at the City/County Library Community Room. We plan to build on our past successes and follow a similar approach to goal-setting as the one we used two years ago. However, as discussed in greater detail below, we recommend two changes: 1. Streamlining the format of the Community Forum by no longer scheduling time for smaller break-out groups after individual presentations to the Council. We were not able to do this two years ago due to time constraints (the public comments took longer than we had planned); and given the potential for heightened community interest in this process resulting from the recent passage of Measure Y, this is likely to be the case this year, too. 2. Focusing on the use of Measure Y funds as an integral part of this process. This is especially important in light of the community priorities that have emerged over the last eighteen months. Moreover, the citizen oversight provisions contained in Measure Y call for meaningful opportunities for community involvement in determining the use of Measure Y funds and for close integration with the City's goal-setting and budget process. DISCUSSION Background On August 15, 2006, the Council approved the goal-setting and Financial Plan schedule for 2007-09, including the conceptual approach to Council goal-setting as part of this process. Under this approach, we will continue using a multi-year budget that begins with the Council setting goals for the most important things for the City to accomplish over the next two years. Based on our experience over the past sixteen years, this has been a successful process in assuring that the fundamental purpose of the City's budgetary process is achieved: linking what we want to accomplish for our community over the next two years with the resources necessary to do so. Goal-Setting Process for 2007-09 Page 2 Process Changes from Two Years Ago Building on our past successes, we plan to follow a similar approach to the one we used two years ago. However, there are two notable changes in the proposed process for 2007-09 1. Format of the Community Forum. While there will still be opportunities for participants to interact, we do not recommend scheduling time for smaller break-out groups after individual presentations to the Council. We were not able to do this two years ago due to time constraints (the public comments took longer than we had planned); and given the potential for heightened community interest in this process resulting from the recent passage of Measure Y, this is likely to be the case this year, too. On the other hand, as outlined below, we recommend continuing to provide opportunities to meaningfully engage participants in the process, including"voting with dots" and feedback surveys on community priorities. 2. Use of Measure Y Funds. Along with an eight-year sunset and requirements for annual audits and annual community reports on how much revenue is being generated by the measure and how funds are being spent, Measure Y includes the following accountability and citizen oversight provisions: a. Integration into the City's budget and goal-setting process. The estimated revenue and proposed use of funds generated by this measure shall be an integral part of the City's budget and goal setting process, and significant opportunities will be provided for meaningful participation by citizens in determining priority uses of these funds. b. Annual citizen oversight meeting. An invitation will be extended each year to the entire community inviting them to participate in a forum to review and discuss the use of the revenue generated by this measure. City staff will also be available to meet with any group that requests a specific briefing with their members to - discuss and answer questions about the revenues • Repairing and maintaining generated by the measure and their uses. City streets, potholes, parks and storm drains. The proposed goal-setting process for 2007-09 is . Continuing programs that designed to meet these two requirements. reduce and effectively Additionally, while other priorities can certainly manage traffic congestion. emerge from this process for the use of Measure Y . Improving levels of police, funds, all of our public communications during this fire and paramedic services. process will highlight the priorities that have emerged . Preserving open space. over the last eighteen months as part of our public education and community outreach efforts, as • Protecting senior services summarized in the sidebar chart. and programs. Two-Step Approach With the November 16 and December 12 budget workshops as the foundation, we again recommend using a "two-step" approach to the Council goal-setting process. As previously approved by the Council, Don Maruska will serve as our facilitator at both workshops. l -a Goal-Setting Process for 2007-09 Page 3 1. Community Forum. Held on the evening of Wednesday, January 10,the purpose of this forum is to solicit suggested goals and work programs from Council advisory bodies, community groups and interested individuals. In notices sent to these groups, we have requested that written suggestions be provided to us by January 2, 2007. To ensure that adequate space is available for this workshop, it will be held at the Ludwick Community Center. 2. Council Goal-Seining Workshop. Following the receipt of written and oral comments at the January 10 Community Forum, the Council goal-setting workshop will be held on Saturday, January 27, in the City/County Library Community Room. Goal-Setting Process Attachments 1 through 4 describe the proposed objectives, guidelines, schedule and roles for both the community forum and goal-setting workshops, summarized as follows: Community Forum The January 10 community forum is intended to solicit suggestions from Council advisory bodies, community groups and interested individuals on proposed City goals and fiscal issues. It is also intended to meet the "forum" requirements of Measure Y to "review and discuss the use of the revenue generated by this measure." City staff will summarize the results of the forum and distribute them to the Council by Tuesday, January 16, 2007. The proposed agenda for the Community Forum is provided in Attachment 1; and the"feedback form" we plan to distribute to participants at the end of the forum is provided in Attachment 2. Council Goal-Setting Workshop At the all-day January 27 workshop, the Council will review the consolidated summary of goals presented by Council members to ensure clarity, completeness and understanding; and then narrow the list to finalist goals that are supported by at least three Council members. After this step, the staff will prepare a final listing that the Council can use in prioritizing goals. In 2005- 07, the Council used a ranking system of 5 through 0 for each candidate goal. We recommend continuing to us this ranking system for 2007-09, summarized as follows: 5 Most important, highest priority for City to achieve over the next two years. 4 Very important goal to achieve. 3 Important goal to achieve. 2 Address if resources are available. 1 Defer to 2009-11 for consideration. 0 Not a priority goal. Depending on the number of candidate goals, total points available to individual Council members have ranged in the past from 50 to 75—about 3 points per candidate goal. For example, if there are 15 goals in the final listing, then 50 points might be about right; if there are 25, then 75 might be appropriate. � � 3 I Goal-Setting Process for 2007-09 Page 4 Staff will summarize the results of the Council's ranking during a break at the workshop. Based on our past experience, it is likely that three priority"tiers" will emerge from this process: 1. Major city goals. These represent the most important, highest priority goals for the City to accomplish over the next two years, and as such, resources to accomplish them should be included in the 2007-09 Financial Plan. If the work program approved by the Council for a Major City Goal is not included in the CAD's Preliminary Financial Plan, compelling,reasons and justification must be provided as to why resources could not be made available to achieve this goal. (Eight goals fell into this category in 2005-07.) 2. Other important goals. Goals in this category are important for the City to accomplish, and resources should be made available in the 2007-09 Financial Plan if at all possible. (Six goals fell into this category in 2005-07.) 3. Address as resources permit. While it is desirable to achieve these goals over the next two years, doing so is subject to current resource availability. (Two goals fell into this category in 2005-07.) The proposed agenda for this meeting is provided in Attachment 3; and our suggested guidelines for Council members during the goal-setting process are provided in Attachment 4. Follow-Up on February 6,But Only If Needed Continued consideration of goals for 2007-09 is scheduled for the next regular Council meeting following the workshop (February 6, 2007) — but only if needed. (No follow-up meeting was needed two years ago: the Council concluded all necessary actions at the Saturday goal-setting workshop.) Council Homework Assignment Provided in Attachment 5 is the Council's"homework assignment" for the January 27 workshop. It requests that Council members prepare and submit up to seven (7) candidates for Major City Goals by Monday, January 22. Finance will then compile a verbatim, composite list organized based on common topics, without identifying who submitted the particular statements. We recommend that Council members refrain from releasing their personal lists so that each Council member has flexibility to review all of the submissions and discuss them at the goal-setting workshop before staking a position. This consolidated listing will be distributed to all Council members on Thursday, January 25, for review and consideration before the workshop. Major City Goal Criteria Provided in Attachment 6 is the suggested "criteria for major City goals" which have been used by the Council for the past sixteen years. Goal-Setting Process for 2007-09 Page 5 Extensive Notification We have made extensive efforts to invite community and advisory body participation in this process, including: 1. Comprehensive series of briefings and follow-up reminders with advisory bodies on their important role in the goal-setting and budget process.. 2. "Community Budget Bulletin" inserts in our utility bills requesting goal suggestions from our citizens and inviting them to participate in the community forum. This will reach about 14,000 households and businesses. (This insert is provided in Attachment 8.) 3. Notices to over 200 community groups and interested individuals inviting them to submit written suggestions and participate in the community forum. (This flyer is provided in Attachment 9). 4. Display ads will be run in January in The Tribune, New Times and City News. 5. Up-to-date information about the budget process will be maintained on our web site. Goal-Setting Workshop Notebooks To help organize all the background information that Council members will receive as part of this goal-setting process, notebooks will be distributed by January 5, 2007 with the following twelve sections: Agendas 1. Agendas for the January 10 community forum and January 27 goal-setting workshop. Goal Recommendations 2. Goals received from Council advisory bodies. 3. Goals from the "Community Budget Bulletin' survey as of January 5 (additional submissions received after this date will be distributed to the Council in a three-hole punch format for inclusion in the notebook, along with an updated summary). 4. Goals received by January 5 from community groups and interested individuals (additional submissions received after this date will be distributed to the Council in a three-hole punch format for inclusion in the notebook). 5. Summary of results from the January 10 Community Forum (to be distributed by January 16). 6. Consolidated Council member goals (to be distributed by January 27). Background Materials 7. Status reports from the November 16 budget workshop: General Plan programs; long-term CIP; 2005-07 goals and objectives; and current CII' projects. I - S Goal-Setting Process for 2007-09 Page 6 8. Goal-setting process for 2007-09. 9. Results from June 2006 public opinion research. 10. General Fund Five-Year Fiscal Forecast(presented to the Council on December 12, 2006). 11. Other background information such as the 2007-09 Financial Plan schedule, Budget-in-Brief, Financial Plan policies and public notifications. 12. Notes and space for other supplemental materials that the Council may receive. Council Goal Work Programs: Major City Goals After the Council finalizes goals and objectives for 2007-09, the staff will prepare detailed work programs for each of the Major City Goals. Based on past experience, it is important for the Council to reach consensus not only on the objective for Major City Goals, but also on the program, action plan and resources that will be needed to accomplish it as well. Unless the staff fully understands the scope and timeframe that the Council intended, we cannot identify needed resources; and without this understanding, the Preliminary Financial Plan may significantly over (or under) fund the desired work effort.. In short, before the staff begins to build the Preliminary Financial Plan around Major City Goals, it is essential that we have a clear understanding of what the Council hopes to achieve with each Major City Goal over the next two years. Accordingly, the purpose of each work program is to:. 1. Define and scope the adopted goal. 2. Ensure that there is a clear understanding of the goal and the approach to be used in accomplishing it so appropriate resources are allocated. 3. Convert the general goal into specific action steps so we can measure progress in achieving it. This is especially important in the case of objectives where fully achieving the goal is likely to extend well beyond the two-year Financial Plan period. However, we can measure progress— and our success in accomplishing the goal—by clearly defining the specific actions we plan to undertake over the next two years. Accordingly, the work program for each Major City Goal will address the following topics: 1. Objective- What do we specifically want to accomplish? (This will be based on the objectives adopted by the Council at the January 27 goal-setting workshop.) 2. Discussion. What are the factors driving the need for this goal? What actions have we already taken in trying to resolve this problem area? What key challenges and obstacles can we expect in achieving this goal? What concerns or issues will remain unresolved even if the goal is achieved? Goal-Setting Process for 2007-09 Page 7 3. Action Plan. What specific tasks will we need to accomplish in order to achieve the goal, and when will we complete them? These "action steps" are the fundamental building blocks in defining and scoping the work program, and in monitoring our progress in accomplishing the goal over the next two years. 4. Responsible Department Who is organizationally accountable for getting it done? 5. Financial and Staff Resources Required to Achieve the Goal, What will it take to achieve the goal? Do we need to add resources (staffing, contract services, capital improvement plan project) to do this? 6. Outcome. Final Work Product What will we get if we achieve the goal? What's the "deliverable?" We plan to present the work programs for Major City Goals to the Council on April 10, 2007. As discussed above, programs and projects related to goals in the other two priority categories will be reflected (and highlighted) in the Preliminary Financial Plan. Goal-Setting Calendar The following summarizes key dates leading to the January 27 goal-setting workshop: Council Goal-SeMhr Calendar When What Tuesday, January 2 Finance receives suggested goals from advisory bodies, community groups and interested individuals. Friday, January 5 Council receives goal-setting notebooks. Wednesday, January 10 Council holds community forum. Tuesday,January 16 Council receives written results from community forum. Monday,January 22 Council members submit goals to Finance. Thursday,January 25 Finance distributes consolidated Council member goals organized by similar topics. Saturday, January 27 Council holds goal-setting workshop. Next Steps The Financial Plan calendar approved by the Council on August 15, 2006 is provided in Attachment 7. After the goal-setting.workshop, key dates in the budget process include:. 1 _ Goal-Setting Process for 2007-09 Page 8 Rentainiak Key Dates After JanuarE 27 Goal-Setting Worksho When What Tuesday,February 6 Follow-up to Council Goal-Setting, If Needed. Continued Regular Meeting consideration of goal-setting at the next regularly scheduled Council meeting following the January 27 workshop if needed. Tuesday,February 20 Mid-Year Budget Review.. Consider the City's fiscal status at the Regular Meeting mid-point of the fiscal year and make appropriation adjustments as necessary. Tuesday,April 10 Major City Goal Work Programs. Review and approve detail Special Budget Workshop work programs to accomplish major City goals; provide other budget direction as needed. Thursday, May 17 Preliminary Financial Plan. Receive 2007-09 Preliminary Financial Plan and Appendices A&.B: Significant Operating Program Changes and Capital Improvement Plan(CIP)Projects. Thursday, May 24 Budget Workshop. Review the Financial Plan and consider General Special Budget Workshop Fund operating programs. Tuesday,May 29 Budget Workshop. Consider General Fund CEP projects. Special Budget Workshop Thursday,May 31 Budget Workshop. Consider Enterprise Fund operating programs; Special Budget Workshop CIP projects, revenue requirements and rates. Tuesday,June 5 Budget Workshop. Continue to discuss and receive public Regular Meeting comment on the Preliminary Financial Plan. Tuesday,June 19 Public Hearing. Continue to discuss and receive public comment on Regular Meeting the Preliminary Financial Plan; adopt the budget. SUMMARY Council goal-setting is an important"first step" in the City's Financial Plan process. In fact, it is important to stress just this fact—it is the beginning of the budget process, not the end. Setting goats—and subsequently approving work programs for major City goals—is not adoption of the budget. As reflected in the budget schedule above, this will not occur until June 2007, following issuance of the Preliminary Financial Plan and extensive budget workshops and hearings. ATTACHMENTS 1. Outline for Community Forum (January 10) 2. Community Forum Feedback Form 3. Outline for Council Goal-Setting Workshop (January 27) 4. Guidelines for Council Members During the Goal-Setting Process 5. Form for Council Members to Submit Candidate Goals 6. Criteria for Major City Goals 7. Financial Plan Schedule Summary 8. "Community Budget Bulletin" Inserted in City Utility Bills 9. Notice Sent to Community Groups and Interested Individuals G:Finance/Budget Folders/Financial Plans/2007-09/Council Goal-Setting/Budget Foundation/Council Agenda Reports/Goal-Setting Process. Goat-Setting Process for 2007-09 Page 9 ATTACHMENT 1 Community Forum 6:30 PM to 9:30 PM, Wednesday, January 10, 2007 Ludwick Community Center 6:30 Welcome Mayor 6:35 Process,Current Goals,Measure Y Results and Fiscal Outlook CAO 7:00 Public Comment 1. Members of public who desire to speak complete public comment cards and indicate topic. Where a group has several members present,we encourage them to select a spokesperson and have others in their group indicate support for the same position with a show of hands. 2. We invite each speaker to address a. What do you recommend as a Major City Goal? b. Why is it important to you and the City? c. How do you suggest that it might be accomplished? 3. Mayor calls upon a speaker and identifies topic. 4. Department Head in the priority area for the topic steps up to write the idea on a flip chart sheet and clarifies any linkages with existing programs or plans. 5. Staff posts the public comment in the relevant budget topic area. 9:00 Participants Vote on Top Priorities with Dots 9:15 Participants Complete Summary Feedback Form 9:30 Participation Prizes and Close Preparation • Prepare handouts on budget process,community priorities so far and fiscal forecast to expedite review. • Provide poster boards for each of the major budget priority categories with current and continuing program activities and budget allocations. • Set up the room with a gathering area for each of the budget priority categories. • After receiving public comments,provide 5 adhesive dots per attendee. • Prepare summary feedback form for attendees to note suggested priorities and recommendations. • Give participants coupons for final prize drawings (City t-shirts;mugs, etc.)to reward those who stay to discuss issues with their neighbors. Outline of Summary Feedback Form • Identify desired level of attention(less, same, or more) for budget priorities. • Invite suggestions to accomplish proposed.goals. c � q Goal-Setting Process for 2007-09 Page 10 ATTACHMENT 2 Community Forum Feedback Thank you for participating in the Community Forum for the City of San Luis Obispo's 2007-09 goal-setting process. Please take a few minutes to share your community priorities with us. How would you suggest prioritizing the City's activities? For each budget community priority below, please indicate what level of attention would be desirable for it compared to the current situation, any suggestions about specific changes or potential goals and ideas about possible ways to achieve them. Level of Attention Suggested Changes Possible Ways to Community Priorities (Compared to Current) or Potential Goals Accomplish Them Less Same More Repairing andmaintaining City streets,potholes,parks and storm drains Continuing programs that reduce and effectively manage traffic congestion Improving levels of police, fire and paramedic services Preserving open space Protecting senior services and programs Other Services { Goal=Setting Process for 2007-09 Page 11 Council Goal-Setting Workshop 8:30 AM to 4:30 PM Saturday, January 27, 2007 City-County Library Community Room 8:30-9:00 a.m. Refreshments 9:00 -9:05 a.m. Welcome and Introductions Mayor 9:05 -9:10 a.m. Purpose,Process&Guidelines Facilitator 9:10—Noon Review Goals by Category Council Discuss Relationship of Goals to Current Activities Formulate and Select Candidate Goals Discuss Revenue Enhancement or Service Reduction Possibilities [staff writes candidate goals on flip charts] Noon— 12:15 p.m. [Council may accept further comments from the public that have not been previously presented] 12:15— 1:15 Lunch Break[staff compiles candidate goals] 1:15 -2:15 p.m. Discuss and Clarify the Goals Council Each Member Prepares a Written Ballot Ranking the Goals 2:15 -3:15 p.m. Break while staff tabulates the results 3:15 -4:00 p.m. Review and Identify Major City Goals 4:00-4:30 p.m. Discuss Next Steps Preparation • Staff compiles and distributes composite list of candidate goals to Council members • Staff prepares a template for Council ballot sheet • Assign staff to record goal statements as Council formulates them Goal-Setting Process for 2007-09 Page 12 ATTACHMENT 4 Suggested Guidelines for Council Members During the Goal-Setting Process 1. Encourage advisory boards, community groups and citizens to submit written comments about desired goals. 2. Invite citizens to participate in Community Forum and to listen and learn from their neighbors. 3. Receive comments from community and acknowledge their input without prematurely expressing your point of view. 4. Assure the community that you are willing to listen openly to all perspectives. 5. Focus your submission of suggested goals on a short list of key priorities to target City resources (not to exceed seven candidates). 6. Avoid publicizing.your submission of suggested goals. Let staff compile your submissions verbatim into a composite list of goals by category without identification of who made each suggestion. This enables you to see the whole picture. 7. Give yourself flexibility by not publicly staking positions in advance of the January 27, 2007 Council Goal-Setting Workshop. 8. Use this process as a way to learn from citizens and Council colleagues about what's important. 9. Explore areas where the Council can come together for positive action. 10. Recognize that this is an important step, but only the first step, in the planning and budgeting for the next two years. Goal-Setting Process for 2007-09 Page 13 Council Member Candidate Major City Goals Please prepare up to 7 candidates for Major City Goals below and submit them to Finance by Monday, January 22, 2007. Finance will then compile a verbatim, composite list by topic without identifying who submitted the particular statements. Please refrain from releasing your personal list so that each Council member has flexibility to review all of the submissions and discuss them at the Council Goal-Setting Workshop before staking a position. An electronic version of this form will be provided to you. O O O O Goal-Setting Process for 2007-09 Page 14 ATTACHMENT ' Criteria for Major City Goals 1. Be legitimate to our genuine beliefs (real, supported). 2. Agreed upon by a Council majority. 3. Focused in number for comprehension, communication and focus. 4. Set forth in one document—the Financial Plan. 5. Be clear and understandable. 6. Established as a high priority and a real commitment. 7. Reflect major goals that cannot be achieved without Council support. 8. Translated into the objectives of employees at all levels of the organization. 9. Created within a supportive atmosphere where participants are not afraid to state their suggestions for improving goals or objectives. 10. Reflect genuine consensus: while unanimous agreement is not required, they should be accepted to the point where resistance to them is reduced or eliminated. { I Goal-Setting Process for 2007-09 Page 15 2005-09 Financial Plan Schedule Summary When What July 13, 2006 ■ CAO briefs advisory body chairs on their role in the goal-setting and budget process at their quarterly meeting with the Mayor. August 1 S,2006 ■ Council approves Financial Plan process and schedule. November 16,2006 ■ Special Budget Workshop. Council holds study session on the status of General Plan programs; long-term capital improvement plan(CIP); status of Major City Goals and other objectives; status of current CIP projects; and general fiscal outlook for 2007-09. December 12,2006 ® Special Budget Workshop Council finalizes goal-setting process; considers Financial Plan organization and policies; reviews annual financial report for 2005-06; considers results of five-year fiscal forecast. January 10,2007 ■ Special Budget Workshop. Council holds community forum. January 27,2007 ® Special Budget Workshop. Council holds goal-setting workshop: discusses candidate goals presented at January 10 workshop; discusses Council member goals distributed on January 25; prioritizes and sets major City goals. February 6,2007 ■ If needed, Council finalizesgoals and priorities. February 20,2007 ■ Council considers mid-year budget review. March to May 2007 ■ Departments submit budget requests. ■ Budget review team analyzes requests and meets with departments. ■ CAO finalizes budget recommendations. April 10,2007 ■ Special Budget Workshop. Council approves major City goal work programs and provides direction in preparing the 2007-09 Financial Plan. May 17, 2007 ® CAO issues preliminary budget. May 24,29 and ■ Special Budget Workshops. Council holds evening budget workshops: May 31,2007 . May 24: Financial Plan overview and General Fund operating programs. • May 29: General Fund CIP projects. • May 31: Enterprise Fund programs,CIP projects and rates. May 23 2007 ® Planning Commission reviews CIP for General Plan consistency. June S and 19, 2007 ■ Council holds continued hearings; adopts budget. Council Meeting Dates in Bold �_- city of Attachment k san Luis oBispo COMMUNITY BUDGET BULLETIN What are the most important things for the City to accomplish over the next two years? The Council wants your help in answering this question. And with the passage of Measure Y in November 2006, which will bring$4.5 million annually in added General Fund revenues, it's an especially important question this budget season. Next June, the Council will approve a two-year budget Goal-Setting Process. Our City's budget is based on for 2007-09. In San Luis Obispo, this is much more goals established by the Council before the staff begins than a"numbers" document: the budget determines the preparing the preliminary budget. The Council City's resource priorities and sets our course for the develops these goals only after hearing from our next two years. citizens, representatives of community organizations and Council advisory bodies. Even with the recent Favorable Fiscal Outlook. The City is facing its most passage of Measure Y, our resources are still limited, favorable fiscal outlook in many years. This is due to so we need to hear from you about what is truly three key factors: important to our community: what our highest priorities should be over the next two years. • Passage of Measure Y. This %z-cent sales tax measure was adopted with 65% voter approval on We need your help in two important ways: November 7, 2006. We estimate that it will generate $4.5 million in added General Fund O Fill out and return to us the brief questionnaire revenues. on the reverse side of this bulletin You can mail it, fax it,email it or drop it by any City office. • Structural Budget Balance. With the actions we have taken beginning in 2003, we have achieved p Attend our Community Forum on January 10, "structural budget balance" for the long-term. 2007 from 6:30 to 930 PM at the Ludwick This means that the added revenues from Measure Community Center, 864 Santa Rosa Street. This Y will not be required simply to forestall even forum is an opportunity to present your ideas to the greater cuts, but can be used for service Council and then discuss them with other residents, restorations and new initiatives,based on the goals community groups and Council advisory body that emerge during the City's budget process. members. It's a chance not only to provide your own Strong Financial Condition. Because of our input but also to see how your ideas fit in a broader • prudent planning and budget balancing actions, we community context. will go into the 2007-09 Financial Plan process City staff will compile the results and other with strong reserves that are above our minimum submissions from the public for the Council to review policy level. While this is a "one-time" source, it in advance of its goal-setting workshop on Saturday, can appropriately be used for one-time purposes January 27,2007,when the Council will consider all of like facility and infrastructure improvements to our the previous input it has received in setting major City streets,storm drains and parks. goals for the next two years. If you have any questions about the City's goal-setting and budget process,please can Bill Statler,Director of Finance&Information Technology, at(805)781-7125. ® The City of San Luis Obispo is committed to including disabled persons in all of our services,programs and activities. ` Telecommunications Device for the Deaf(805)781-7410. Attachment What are the most important things for the City to accomplish over the next two years? Please share with us the three to five things that you believe should be the City of San Luis Obispo's most important, highest priority goals to achieve during 2007-09. 0 = For background information in developing your goals, © you may be interested in the following priorities that emerged over the last 18 months from surveys and © community outreach efforts during consideration of placing a sales tax revenue measure on the ballot. 0 • Repairing and maintaining City streets, potholes, parks and storm drains. 0 • Continuing programs that reduce and effectively manage traffic congestion. • Improving levels of police, fire and paramedic You can share your goals with us in several ways. services. • Mail it. Postage is prepaid. Just fold,tape and mail. • Preserving open space. • Fax it. Our fax number is 781-7401. . Protecting senior services • Email it bstatler@slocity.org and programs. • Drop it by. 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