Loading...
HomeMy WebLinkAbout06/09/2009, W5 - PRELIMINARY 2009-11 FINANCIAL PLAN ` J council Mad=Dm June 4&9 2009 agenda Report CITY OF SAN LUIS OBISPO FROM: Ken Hampian, City Manager Bill Statler, Director of Finance& Information Technology SUBJECT: PRELIMINARY 2009-11 FINANCIAL PLAN RECOMMENDATION Review and consider the Preliminary 2009-11 Financial Plan at the budget workshops scheduled for June 4 and 9, 2009. DISCUSSION Enclosed for your review and information in preparing for the June 4 and 9 budget workshops are the following three documents: 1. Preliminary Financial Plan. This includes: a. The budget message from the City Manager highlighting challenges facing us and proposed solutions in addressing them (Section A) b. Policies and objectives, including work programs for Major City Goals and Other Important Council Objectives (Section B) c. Simple graphics and charts summarizing the City's budget(Section C) d. Operating programs (Section D) e. Summary of capital improvement plan (CII')projects and funding sources(Section E) f. Debt service requirements (Section F) g. Changes in financial position for each of the City's operating funds (Section G) h. Financial and statistical tables (Section H) i. Budget reference materials (Section 1) 2. Appendix A: Significant Operating Program Changes. This Appendix provides additional supporting documentation for each of the significant operating program changes These are intended abe proposed in the Preliminary Financial Plan. This also used as supplemental al includes detailed information on resources if Council .f proposed operating members have questions program reductions to balance the budget. An overview is on a program or project included in the Appendix that further describes its purpose, as they review the organization and content. Preliminary Financial Plan. In short, while the 3. Appendix B: Capital Improvement Plan Projects. This Council may choose to Appendix provides supporting documentation for each of the read the Appendices from CIP projects proposed in the Preliminary Financial Plan. An cover-to-cover," this overview is included in the Appendix that further describes information is summarized its purpose, organization and content. in the Preliminary Financial Plan. Preliminary 2009-11 Financial Plan Page 2 The June 4 and 9 workshops are the first of several study sessions and public hearings scheduled to review the Preliminary Financial Plan. One of the fundamental purposes of these workshops is to review these documents with the Council in some depth. Accordingly, we do not anticipate that:the Council will have reviewed all of this material in detail by the June 4 workshop. Best Place to Start. The Budget Message and Financial - Highlights (starting on page A-1) are recommended as a good starting point in reviewing the Preliminary Financial The Budget Message Plan and in preparing for the June 4 workshop. It has been provides a concise written with the goal in -mind of discussing all of the key summary budget balancing the proposed actions issues reflected in the Preliminary Financial Plan in a based on the direction concise but comprehensive manner. provided by the Council on April 14, 2009. Focus of the June 4 and 9 Workshops. As summarized _ below, the primary focus of these two workshops will be on General Fund programs and projects; a separate budget workshop/public hearing has been scheduled for June 11, 2009 to review enterprise fund programs, projects and revenues, and adopt rates for 2009-11. June 4 Budget Workshop (Starts at 4.00 PM) 4:00 PM 1. Overview of key budget issues, strategies and fiscal outlook. 2. Fiscal policies and Council goals. 3. General Fund revenues: key assumptions. 7:00 PM 4. General Fund operating programs. June 9 Budget Workshop (Starts at 7.00 PM) 7:00 PM 1. Continued review of General Fund operating programs, if needed. 2. General Fund CIP projects (and other non-enterprise fund projects). 3. Follow-up direction from the Council for subsequent workshops and hearings. Remaining Budget Review Schedule The following four dates have been scheduled for review and adoption of the 2009-11 Financial Plan: Council Budget Re-view Schedule: RemainingSteps June 4 Preliminary Financial Plan review; General fund operating programs June 9 Continued review; General Fund CIP and other non-enterprise fund projects June 11 Enterprise fund programs,projects, revenues and rates(Note: Starts at 4:00 PM) June 16 Continued Preliminary Financial Plan review; approval of General Fund master fee schedule; and Financial Plan adoption. ws �-a Preliminary 2009-11 Financial Plan Page 3 Major City Goals and Other Council Objectives Consistent with Council priorities and direction, the results of the Council's goal-setting process has been integrated into the Preliminary Financial Plan. The way this has been accomplished is discussed at some length in the Budget Message (beginning on page A-1) and in the Policies and Objectives section(in the"Overview"beginning on page B-3). As discussed in the Budget Message, all of the Major City Goals set by the Council as well as the "Other Important Council Objectives" are reflected in the Preliminary Financial Plan based on the work programs approved by the Council on April 14, 2009. The Budget Message also discusses how the"Other Council Objectives" are reflected in the Preliminary Financial Plan. Community Engagement The City is committed to providing the community with meaningful opportunities to participate in the goal-setting and budget process. Provided in Attachment 1 is the notice we sent to over 200 community groups and interested individuals about the budget workshops and hearings ahead of us, and how to find out more information about the budget; and provided in Attachment 2 is the notice we sent to over 60 community groups and interested individuals who have asked to be notified about fee increases. Additionally, links to budget information are provided on the home page of the City's web site at www.slocity.org. ATTACHMENTS 1. Notice on upcoming budget workshops and hearings 2. Notice on proposed fee increases ENCLOSURES 1. Preliminary Financial Plan 2. Appendix A: Significant Operating Program Changes 3. Appendix B: Capital Improvement Plan Projects -.rj.,�; ^thR "''a �'�. .:o-. . .�,+ r ,�� Wim' -�.;t.'S ,•'k .i� .-!. .�K cy+r:.`..; .J^i';i' G:Budget Folders/Financial Plans2009-11 Financial Plan//Preliminary Financial Plan/Agenda Report W5 -3 city of Attachment L. � san WIS OBISPO 990 Palm Street s San Luis Obispo,CA 93401 ®(805)781-7125■Fax: (805)781-7401 ■Email: bstatler@slocity.org UPCOMING BUDGET WORKSHOPS AND HEARINGS May 21, 2009 The City's Preliminary 2009-11 Financial Plan will be distributed to the Council on May 28,2009. This will be followed by series of public workshops and hearings as outlined below. Each of these will be held in the Council Chambers at City Hall,990 Palm Street. Cou.ncil 13,udget Review Schedule June 4 4:00 pm Preliminary Financial Plan and General Fund Overview 7:00 pm General Fund Operating Programs June 9 7:00 pm General Fund Capital Improvement Plan Projects June 11 4:00 pm Enterprise Fund Budget and Rate Reviews: Golf and Parking Funds 7:00 pm Enterprise Fund Rate and Budget Reviews: Transit,Water and Sewer Funds June 16 7:00 pm Continued Preliminary Financial Plan Review and Adoption of the Financial Plan. All interested community groups and individuals are encouraged to attend any of these public meetings. Another Very Tough Budget that Would Be Much Worse Without Measure Y The City is facing a very tough fiscal situation in 2009-11 that is largely due to the greatest economic downturn since the Great Depression. Based on the strategic budget direction approved by the Council on April 14, 2009,the Preliminary Financial Plan details how the City plans to address this challenge. It also shows how the City will accomplish the top goals adopted by the Council for 2009-11. Copies of the Preliminary 2009-11 Financial Plan and supporting documents (Appendix A for Significant Operating Program Changes and Appendix B for Capital Improvement Plan Projects) are available for public review as follows: • Electronic copies are available at no cost on the City's website at: www.slocitv.org. • Printed copies are available as follows: Selections • Budget Message,Financial.Highlights,Major City Goals and up to 10 other at no cost selected pages from the Preliminary Financial Plan, Appendix A or Appendix B Review copies • City Clerk's Office, 990 Palm Street, San Luis Obispo at no cost • City/County Library, 995 Palm Street, San Luis Obispo Complete"hard copies" of these documents are available at the City's direct printing costs. If you have any questions concerning the City's budget process, or require additional information, please call me at 781-7125 or email me at bstatler(d�slocity.org. Please join us at any of these sessions as we finalize the City's course of action in these difficult economic times for the next two years. Sincerely, Bill Statler,Director of Finance&Information Technology is 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. WE /_ y r city of - Attachment Z- san Luis oslspo 990 Palm Street ■San Luis Obispo,CA 93401 ■ (805)781-7125 ■ Fax:(805)781-7401 ■ Email:bstatler@slocity.org May 28, 2009 Preliminary 2009-11 Financial Plan PROPOSED FEE INCREASES Based on the budget-balancing strategy conceptually approved by the Council on April 14, 2009, the Preliminary 2009-11 Financial Plan recommends selected fee increases in helping to close an $11.3 million annual budget gap in the General Fund. As shown in the chart below, expenditure reductions play the leading role in our recommended budget-balancing actions, accounting for about 80% of the solution. However, improved cost recovery in the following areas will also play a role, accounting for about 11% of the"gap-closing"solution. 2009-11 Budget Balancing Strategy: • Open alcohol container violations $11.3 Million Crap ed Hazardous occupancy and underground ° �vrot °Reserve • storage tank("CUPA")permits Recovery 4% Development review fees for planning, 11% building, engineering and fire review o Use of services Property • Recreation fees for child care, swim center, 3% LReductions pital facilityrentals and golf om g °Mutual Aid • Business license fees Reimb 3% 3% These fee proposals are described in detail in Expenditure Reduct the Preliminary 2009-11 Financial Plan and in ■operating the Cost of Services Study, which are Programs available for review on the City's web site 28% (www.slocity.org) and upon request to me ■ Employee either in"hard copy"form or electronically. Concessions 8% Formal Fee Adoption: June 16, 2009. While the Council has conceptually approved these changes, no final action has been taken. Consideration of adopting the proposed fees is scheduled in conjunction with approval of the 2009-11 Financial Plan as follows: Tuesday,June 16,2009,7:00 PM City Hall Council Chambers,990 Palm Street,San Luis Obispo Want More Information? Upon request, we will be happy to meet with you or your organization at your convenience to discuss these proposed fee increases with you. Please call me if have any questions about these proposed fee increases or the City's budget process in general. Sincerely, ^Xlp � Bill Statler, Director of Finance&Information Technology The City of San Luis Obispo is committed to including persons with disabilities all of our services,programs and activities. ® Telecommunications device for those with hearing Impairments:(805)781-7410. ws/-C2 , c i /_C2 I v Vj&gHA44f , LLe 3212 Broad Street, Suite 200, San Luis Obispo, CA 93401 805.544.1144 805.543.2476 fax June 3, 2009 N9Re GPr �Cmg„ i7 COUNCIL. 2 CDD_D1R O GAee to @ F7N DIR RED FILE TAGAer-.4eM Mayor Dave Romero MEETING AGENDA gAnoRNEY IRCHIEF City of San Luis Obispo IETCLERK)OSIQ er PW Dip CHF 990 Palm Street DA Ly of ITEM # UAS 10 DEPT MEADS P qEC DIR San Luis Obispo, CA 93401 aLML DIP j2f -/Mrs Dear Mayor Romero, ju C/ry A)44 t7 °-LEC Please consider this letter as my petition to reinstate the reimbursement which until recently was a part of the 2009-10 proposed budget. A copy of this item is attached. In 2003 we completed capital improvements to Broad Street and Orcutt Road which were city requirements for the building of our small shopping center. The cost of these improvements far exceeded the usual costs estimated for TIF charges for such buildings. As a result, hundreds of thousands of extra dollars ($425,000 in total costs) had to be fronted by us to pay for these off-site capital improvements. We felt a level of comfort in fronting these costs since we had an agreement with the city to reimburse us for costs which were over and above a property owner's reasonable.outlay. Please note that we are not a huge developer who can afford such outlays, but rather ordinary local citizens just trying to make a go of it. Unfortunately, we had to fight for the return of these funds and finally reached an agreement with the city for reimbursement in the amount of$204, 625 in January of 2006. But the city attorney threw in a provision at the last minute allowing the reimbursement to be paid over a period of 15 years—a provision we would have had to fight in court in order to change. The balance due us has currently been reduced to $114,800 (originally proposed to be paid in full in the 2009 budget). We have fought to have this included in the current budget because we thought it unfair to see the balance further reduced over time as a result of inflation. Now the proposed budget has divided it into four payments to be paid over four years. We ask you to consider the fact that we have already been waiting over five years to recoup these costs. The problem with this change is that it only includes half of what we are owed in the current budget, not to mention the fact that inflation continues to erode the balance (since there is no provision for the city to pay interest, which would have been much more.fair). And it causes us once again to have to fight for inclusion of the remaining balance in a future budget. Therefore, we propose a compromise. Reinstate the full $114,800 remaining balance in the 2009-10 budget to be paid in two annual installments of$57,400 beginning in July. We feel this is a just and equitable solution for both parties. I will appear at the June 9, 2009 city council meeting to speak to this issue. Thank you. e4rel , Da TRANSPORTATION TRANSPORTATION IMPACT FEE REIMBURSEMENT CIP Project Summary Reimbursing a developer for project improvements from the Transportation Impact Fee Fund will cost$114,700 in 2009-10. Project Objectives Reimburse the Village for the oversizing of transportation facilities. EAsting Situation Occasionally the City requests that private development projects construct additional improvements to public infrastructure beyond those normally required to build their project. This"oversizing"of public improvements is encouraged to complete necessary infrastructure sooner rather than later and allow orderly development to occur without addition disruptions to the public or numerous construction projects to complete needed improvements. In order to ensure this work, the City has normally agreed to reimburse these.private projects for the oversized improvements recognizing that if the City was to undertake the improvements, it would require similar expenditures of public funds to complete the necessary improvements. One such case has been street and signal improvements performed by Minor Subdivision 99-214 (Source Commercial Group) at the intersection of Broad Street at Orcutt Road and the now called Village Marketplace. This commercial project was built on the southeast comer of the intersection and as part of that development approval, was required to complete frontage improvements that included curb, gutter and sidewalk along with additional paving on Broad Street and Orcutt Road. As part of the approvals of the project the City requested that they complete additional improvements to construct the dual left turn lanes in the southbound direction from Broad Street to Orcutt Road. The timing of this improvement made sense in that the project would be widening Orcutt Road and the second receiving lane could be constructed to allow the dual left turn lane to be completed. The dual left turn lane (including changes to the traffic signal) was not a project specific requirement of the development project and as such was considered an oversizing of public infrastructure. The costs for this improvement are eligible for reimbursement from the City Transportation Impact Fee(TIF) fund which is impact mitigation money collected from all new development. Goal and Policy Links 1. Reimbursement Agreement approved by the City Council on January 17, 2006. 2. Section 16.20.110 of the City's Municipal Code"Reimbursement Agreements" Project Work Completed The physical improvements to the intersection were completed in late 2004 and accepted by the City. A reimbursement agreement was approved by City Council on January 17,2006 in the amount of$204,625.56. Environmental Review None required. 3-230 TRANSPORTATION TRANSPORTATION IMPACT FEE REIMBURSEMENT Project Constraints and Limitations. There are no significant project constraints or limitations. Stakeholders. The stakeholder is the Village Marketplace developer and those that will rely on the TIF for other TIF projects.. Project Phasing and Funding Sources Pro'ect Costs by Phase Project Costs Budget-to-Date 2007.08 2008.09 2009.10 2010-11 Total Total Reimbursement Amount 114,700 Previously Reimbursed 12/20D 36,000 Previously Reimbursed 01/200 40,600 TEF Credit 3220 Broad 13,300 Total 89,900 1 114,700 89,900 Project Funding by Source Transportation ImpactFee Fund. Key Project Assumptions Costs are based on a completed project and the agreed to reimbursement agreement. Project Manager and Team Support Project Manager Public Works—Development Review Project Team. Public Works—Development Review Finance Alternatives 1. Deny the Project. If we do nothing the current Council Approved reimbursement agreement still exist and will require future.action. 2. Defer or Re phase the Request. The reimbursement agreement and City Municipal Code allows for a 15 year reimbursement period. 3-231 . S . + a TRANSPORTATION IMPACT FEE CREDIT (VILLAGE MARKETPLACE) Project Constraints and Limitations There are no significant project constraints or limitations. Stakeholders The stakeholder is the Village Marketplace developer and those that will rely on the TIF for other projects. Project Phasing and Funding Sources Project Costs by Phase Project Costs Budget-to-Date 2009.10 2010-II 2_011-12 2612-13 Total Total Reimbursement Amount 28,700 28,700 28,700 28,700 114,800 Previously Reimbursed 12/2001 36,000 36,00D Previously Reimbursed 01/200 40,600 40,600 TIF Credit 3220 Broad__. 13,300 13,300 Total o'-0dol 8,700 28,700 28,7001 28,7001 204,700 Project Funding Source Transportation Impact Fee Fund Key Project Assumptions Costs are based on a completed project and the reimbursement agreement. Project Manager and Team Support Project Manager Deputy Director of Public Works Project Team Engineering Development Review Finance&Information Technology Alternatives I. Deny the Project If we do nothing the current Council Approved reimbursement agreement still exist and will require future action. 2. Defer or Re-phase the Request The reimbursement agreement and City Municipal Code allows for a 15 year reimbursement period. 3-191