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04/14/2009, B3 - CITY COUNCIL GOAL WORK PROGRAMS FOR 2009-11
council M=°°°°� 4.14-09 j aciEnaa RepoRt CITY O F SAN LUIS O B I S P 0 FROM: Ken Hampian, City Manager Shelly Stanwyck, Assistant City Manager SUBJECT: CITY COUNCIL GOAL WORK PROGRAMS FOR 2009-11 RECOMMENDATION Conceptually approve the City Council Goal Work Programs for 2009-11, including that $80,000 for Phase II of the Historic Preservation goal be reconsidered in June 2010. DISCUSSION Background Every two years, Council undertakes the process of establishing its Major City Goals for its upcoming year financial plan. Input is taken from City Advisory bodies, representative groups, survey respondents, and residents. A series of meetings focus on this topic with the culmination of this effort an all day workshop where Council identifies its Major City Goals. On January 31, 2009 Council held its major city goal workshop and established nine goals organized into two priority categories: Major City Goals and Other Important Objectives. Under the City's Financial Plan policies Major City Goals reflect the highest priority, most important things for the City to accomplish over the next two year period. As such, resources to accomplish them are included in the City's Financial Plan for that cycle. Accomplishing Major City Goals is therefore a key driver in the City's budget process. The Proposed Major City Goal Work Program The attached report details the work programs for the nine Major City Goals adopted by Council. These work programs link the adopted goal statements with action plans and the resources needed to achieve this objective by: I. Clearly defining and scoping the work program, including its relationship to Measure Y funding and Federal stimulus package grant opportunities. 2. Ensuring there is a clear understanding of the means selected to pursue the goal. 3. Converting the general goal into specific action steps so that progress can be measured and reported on as staff tracks progress and reports back to Council on that progress. The Introduction section of the Major City Goal report discusses the purpose, background, organization, and content of the work programs. It also summarized the cost and funding sources for these work programs. The individual work programs that follow the Introduction also identify constraints and limitations the City is likely to face in achieving these goals. Other information in each work program 33- I Major City Goal Work Programs for 2009-11 Page 2 includes: key assumptions, likely implementation costs and funding sources, descriptions of the proposed task, and proposed (and realistic) timeframes for achieving the proposed tasks. NiMajor City Goals , Major City Goals ■ Infrastructure Maintenance ■ Traffic Congestion Relief ■ Economic Development ■ Preservation of Critical Services and Fiscal Health Other Important Objectives ■ Land Use and Circulation Elements ■ Open Space and Agricultural Land ■ Green House Gas Reduction and Energy Conservation • Downtown Maintenance and Beautification ■ Historic Preservation Only Conceptual Approval of the Work Programs at this Stage of the Financial Plan At this stage of the financial plan process, Council's conceptual approval of the work programs as presented is not formal approval of either the goal or its budget. Those approvals will occur when the Council approves the 2009-11 Financial Plan in June 2009 (after additional workshops and public hearings). However, if Council believes that the work programs presented are too ambitious— or do not go far enough- then direction to staff should be given now before the Preliminary Financial Plan is issued and finalized. Impact of the City's Limited Fiscal Situation on Historic Preservation Work Program For the reasons noted below, staff does not recommend allocating the $80,000 in General Funds needed for the inventory of the City's historic resources. As outlined in the work program for Historic Preservation, the actual historic study is recommended if funds permit and would occur as a phase two component of this work program. Therefore, staff does not recommend encumbering the funds at the time of budget adoption, and instead suggests the evaluation of the availability of funds for this phase when Council considers the 2010-11 Budget Supplement in June 2010. Status of the 2009-11 Financial Plan and Work Completed to Date The City's current planning process for developing the 2009-11 Financial Plan stands in stark contrast to the 2007-09 process. Rather than having significant new revenues and many competing projects and programs from which to prioritize, the current process is reflective of the severe economic crisis faced by the City and the nation. To produce a balanced budget to present to Council for its consideration staff must provide over $10.4 million in savings to meet the City's projected budget deficit for the upcoming B3-(:Z Major City Goal Work Programs for 2009-11 Page 3 fiscal year. Thus, the major elements of the financial plan are being scrutinized for possible reductions and savings, all within the context of community priorities and proposed major goal work programs. At present, staff has developed a significantly reduced Capital Improvement Program (CIP). Additionally, the department operating budgets that have been submitted to the City Manager for review and consideration have generated over $6 million in operational savings. The reductions include significant cuts in spending, reductions in staffing (of both filled and vacant positions), and restructuring of departments and or work groups. Relationship to Measure Y Four of the nine proposed work programs directly support the community's top priorities for the use of Measure Y funds that emerged both before and during the campaign. Measure Y added a one half cent sales tax for every dollar spent in the City limits for a period of eight years. Measure Y funding continues to be used to support the top priorities of our community. Although the ordinance before the voters in November 2006 was a general purpose revenue measure, to protect and maintain essential services,there were however unranked priorities which emerged from the process: • Neighborhood street paving and pothole repair. ■ Traffic congestion relief. • Public safety, including restoring eliminated traffic patrol, Fire Marshal, and fire/paramedic training positions. ■ Flood protection. ■ Senior citizen services and facilities. ■ Neighborhood code enforcement. ■ Open Space preservation. Next Steps As noted above, in-depth reviews of departmental budget requests and proposed budget reductions (as well as revenue projections) are currently underway. After receiving feedback on the work programs for the major city goals and the strategic budget direction from Council at the same meeting, the City Manager will begin formulating recommendations from the menu of options developed by staff. Staff plans to finalize budget recommendations and issue the Preliminary Financial Plan on May 28, 2009. Key next steps in the budget review process are: Council Budget Review Schedule Date 1. Preliminary Financial Plan issuance 77=y28 2. Budget workshop: Financial Plan overview and General Fund operating programs June 4 3. Budget workshop: General Fund CIP projects June 9 4. Budget workshop: Enterprise Fund programs,projects and rates June 11 5. Continued budget review June 16 6. Continued budget review and Financial Plan budget adoption June 23 B3 -3 i Major City Goal Work Programs for 2009-11 Page 4 FISCAL IMPACT There are no direct fiscal impacts associated with tentatively approving major City goal work programs: conceptual approval of work programs is not approval of the budget. As discussed above, this will only occur with adoption of the Financial Plan in June 2009, which of course follows the issuance of the Preliminary Financial Plan and extensive budget workshops and hearings. Nonetheless, this is a very important step in the process: with this direction, staff will clearly understand the Council's intent, and we can prepare the Preliminary Financial Plan accordingly. SUMMARY In the final analysis, a balanced budget is not just a financial concept: it also means a balance between delivering day-to-day services, maintaining and improving public facilities, and funding new initiatives. This balance, ultimately set by the Council, cannot be made until all of the budget components are in place and comprehensively viewed. While the major City goal work programs lead the way, the Preliminary Financial Plan will provides the opportunity to take this more comprehensive view—and it is likely that some of the work programs could change following this broader look at needs and fiscal resources. ATTACHMENT Major City Council Goal Work Programs for 2009-11 - 77,76 _03 ,Y ATTACHMENT 200941 Financial Plan City Council Goal WORK PROGRAMS April 14, 2009 City of San Luis Obispo B3-5 - - ATTACHMENT 2009- 11 Financial Plan CITY COUNCIL GOAL WORK PROGRAMS Table of Contents INTRODUCTION CITY COUNCIL GOAL WORK PROGRAMS Overview and Impact of Fiscal Challenges I Infrastructure Maintenance Impact of American Recovery &Reinvestment 1 Infrastructure Maintenance 7 Act Background 1 2009-11 Budget Review Underway 2 Transportation Relationship to Measure Y 2 Organization: Goal Priorities 2 Traffic Congestion Relief 13 Work Program Content 3 Next Steps 3 Community Development Summary 3 Economic Development 21 SUMMARY OF COUNCIL GOALS General Government Preservation of Critical Services and Fiscal 28 Major City Goals 4 Health Other Important Goals 4 Address As Resources Permit 5 OTHER IMPORTANT GOALS WORK MAJOR CITY GOALS COST SUMMARY PROGRAMS Cost and Funding Summary 6 Community Development Land Use and Circulation Revisions 42 Open Space Preservation 46 Green House Gas Reduction and Energy 52 Conservation Downtown Maintenance and Beautification 56 Leisure,Cultural &Social Services Historic Preservation 61 ATTACHMENT INTRODUCTION OVERVIEW R The work programs of Major City Goals for 2009- The City has established a multi-department work 11 present detailed action plans linking the goals group to identify and collaborate on appropriate with resources and timeframes. opportunities and grant applications. New funding prospects are being reviewed on a daily basis. Impact of Fiscal Challenges. Cumulatively, these have the possibility to The national and state strengthen the City's fiscal economies are experiencing their outlook and allow the City to greatest downturns since the ., proceed with a number of planned Great Depression. While the Infrastructure Maintenance projects. City is better positioned than many communities to deal with Traffic Congestion Relief BACKGROUND this, it is not immune to these Economic Development11_ powerful economic forces. Preservation of Critical Adverse trends in the City's top Services and Fiscal Health The purpose of the City's three General Fund revenues of Financial Plan process is to link sales, property and transient • Land Use and Circulation the most important, highest occupancy taxes will likely Revisions priority items to achieve for the continue during this two year • Open Space Preservation community over the next two Financial Plan. The City is . Green House Gas Reduction years with the resources facing a very tough budget and Energy Conservation necessary implement them. season that would be even worse . Downtown Maintenance& without Measure Y revenues. Beautification For this reason, the City begins its budget process with Council Due to the downturns being felt • Historic Preservation goal-setting. This follows an in virtually all areas of the extensive effort to involve economy, the City is projecting advisory bodies and the either declines or very tepid growth in all of its key community in this process. It also follows revenues. Unfortunately, in the face of this costs are consideration of a number of analytical reports such expected to rise. Improvements to these economic as the General Fund Five-Year Fiscal Forecast and challenges are not expected to occur until 2010 at comprehensive updates on the status of long-term the earliest. plans and policies, current Major City Goals and capital projects. Impact of American Recovery and Reinvestment Act. The recently enacted federal economic The accompanying work programs have been stimulus package, the American Recovery and prepared based on the Major City Goals set by the Reinvestment Act (ARRA), commits a total of$787 Council at an all-day workshop held on January 31, billion nationwide. This funding provides assistance 2009. to the states, funding for various federal projects and assistance for other non-state programs, and aid for Purpose of the Work Programs. The goals set by tax relief. the Council drive the budget preparation process. However, before staff can build the Preliminary California is estimated to receive over $31 billion Financial Plan around Council goals, it is essential from direct funding and billions more in competitive they have a clear understanding of what the Council grants. At this time it is unclear as to what exactly hopes to achieve with respect to each goal over the this means for the City. However, various programs next two years. Accordingly, the purpose of each have already announced competitive and formulaic work program is to: funding availability for which the City will apply and compete. 1. Define and scope the adopted goal, including its relationship to Measure Y funding. t 6 3 -_77- ATTACHMENT INTRODUCTION 2. Ensure that there is a clear understanding of the • Senior citizen services and facilities. means selected to pursue the goal. . Neighborhood code enforcement. 3. Convert the general goal into specific action • Open space preservation. steps so measurement is possible as the goal progresses. There is not a "one-to-one" match between the resource allocations recommended in the proposed This is especially important in the case of objectives work programs and projected Measure Y revenues where fully achieving the goal is likely to extend (nor is there intended to be at this point in the well beyond the two-year Financial Plan period. budget process.) However, progress can be measured—and the success in accomplishing the goal—by clearly ORGANIZATION: GOAL PRIORITIES defining the specific actions necessary to undertake over the next two years. The goals approved by Council in January 2009 are Conceptual Approval of the Work Programs. organized into the following levels of priority: Tentative Council approval of the work programs at this stage is not formal approval of either the goal or I. Major City Goals. These represent the most the budget for it. This will not occur until the important, highest priority goals for the City to Council approves the 2009-11 Financial Plan in its accomplish over the next two years, and as such, entirety in June 2009, after extensive workshops and resources to accomplish them should be public hearings. included in the 2009-11 Financial Plan. 2009-11 BUDGET REVIEW UNDERWAY If the work program approved by the Council for a Major City Goal is not included in the City Manager's Preliminary Financial Plan, It should be noted that department budget proposals compelling reasons and justification must be for other operating program and capital provided as to why resources could not be made improvements (CIP) beyond those identified in the available to achieve this goal. During the Goal work programs are also under consideration by the Setting Workshop in January, Council was well City Manager as part of the 2009-11 Financial Plan aware of the dire fiscal situation facing the City process. and therefore chose to prioritize only four items as Major City Goals. RELATIONSHIP TO MEASURE Y 2. Other Important Goals. Goals in this category are also important for the City to accomplish, Four of the nine proposed work programs directly and resources should be made available in the support the top priorities for the use of Measure Y 2009-11 Financial Plan if at all possible. Due to funds that emerged from the community both before the decreased number of Major City Goals, staff and during the campaign. While the ordinance is presenting work programs for these goals at before the voters in November 2006 was clear that this time also, where they have traditionally this was a general-purpose revenue measure to only been included in the Financial Plan. protect and maintain essential services, it highlighted the following uses of Measure Y funds: 3. Address As Resources Permit. Please note that while Council identified these items as • Neighborhood street paving and pothole repair. priorities, staff is preparing work programs only • Traffic congestion relief. for the top two categories, reflective of the fiscal challenges facing the City. • Public safety, including restoring eliminated traffic patrol,Fire Marshal and fire/paramedic training positions. • Flood protection. -2- 33 - � ATTACHMENT INTRODUCTION WORK PROGRAM CONTENT Council Budget Review Scliedule Date The work programs are organized by functional - Preliminary Financial Plan issuance May 28 area: public safety, transportation, leisure, cultural - Budget workshop: Financial Plan June 4 and social services, community development and overview and General Fund operating general government. Each work program provides programs the following information: - Budget workshop: General Fund CII' June 9 projects 1. Objective. - Budget workshop: Enterprise Fund June 11 2. Discussion of its relationship to Measure Y, programs,projects and rates workscope summary, existing situation and • Continued budget review and budget June 16 related work accomplished in the past. adoption 3. Constraints and limitations. - Continued budget review and Financial June 23 Plan budget adoption(if necessary) 4. Stakeholders. 5. Action plan detailing specific tasks and schedule for the next two years. When applicable, likely SUMMARY "carryover and spin-off' tasks beyond the next two years are also discussed. As noted above, conceptual Council approval of the 6. Key assumptions in preparing the work work programs at this time is not approval of the program. budget: this will only occur with adoption of the 7. Responsible department. Financial Plan in June 2009, following issuance of 8. Financial and staff resources required to achieve the Preliminary Financial Plan in May 2009 and the goal. extensive budget workshops and hearings. 9. General Fund revenue potential, if any. In the final analysis, a balanced budget is not just a 10. Outcome—final work product at the end of the financial concept: it also means a balance between next two years. delivering day-to-day services, maintaining and improving public facilities, and funding new NEXT STEPS initiatives. This balance, ultimately set by the Council, cannot be made until all of the budget components are in place and comprehensively As noted above, in-depth reviews of departmental viewed. budget requests and revenue projections are currently underway. Once these are completed and While the Major City Goal work programs lead the the Council has approved the goal work programs, way, the Preliminary Financial Plan will provide the City with the opportunity to budget recommendations will be finalized and the Preliminary Financial Plan issued on May 28, 2009. comprehensive view—and it is likely that some of ltake this more the work programs will change as a broader view is The following summarizes key next steps in the taken of the City's needs and fiscal resources. Council's review of the budget for 2009-11, which will provide additional opportunities for community Nonetheless, conceptual Council approval of the participation in this process. work programs at this time is a very important step in the process: with this direction, staff.will have clear instruction as to Council's intent, and can prepare the Preliminary Financial Plan accordingly. B3 - 7 - 3- ATTACHMENT COUNCIL •A SUMMARY OF MAJOR CITY GOALS AND OTHER IMPORTANT OBJECTIVES O MAJOR CITY GOALS © OTHER IMPORTANT GOALS These represent the most important, highest priority Goals in this category are important for the City to goals for the City to accomplish over the next two accomplish, and resources should be made years, and as such, resources to accomplish them available in the 2009-11 Financial Plan if at all should be included in the 2009-11 Financial Plan. possible. Infrastructure Maintenance Community Development Infrastructure Maintenance. Sustain an effective Land Use and Circulation Revisions. Initiate a level of existing core infrastructure maintenance focused revision of the Land Use and Circulation such as streets, sidewalks, creek & flood protection, Elements. park, and protection of other physical assets. Open Space Preservation. Continue efforts to Transportation acquire preserve and protect open space and develop a master plan for City-owned agricultural land. Traffic Congestion Relief. Continue efforts on projects which relieve traffic congestion, such as Green House Gas Reduction and Energy street modifications, intersection improvements, Conservation. Adopt and begin implementing a pedestrian improvements, bicycle facilities, traffic plan to reduce greenhouse gases and conserve signal operations and public transit energy for municipal operations and the community. Community Development Downtown Maintenance& Beautification. Expand Downtown beautification efforts, including Economic Development. In collaboration with Cal enhanced maintenance and cleanliness; review and Poly, Cuesta and the business community, develop upgrade of standards; and making phased physical strategies to increase economic development improvements. including emphasis on head-of-household jobs and environmentally sustainable businesses. Leisure,Cultural &Social Services General Government Historic Preservation. Complete a draft Historic Preservation Ordinance and update the inventory of Preservation of Critical Services and Fiscal historic and cultural resources within the City. Health. Adopt a balanced budget that retains the City's fiscal health, preserves critical services and implements long term productivity improvements and cost-reduction strategies. -4- ATTACHMENT COUNCIL •A SUMMARY OF MAJOR CITY GOALS AND OTHER IMPORTANT OBJECTIVES ® 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. As noted earlier fiscal allocations have not been attached to these objectives due to the economic challenges currently facing the City. Transportation Creek and Flood Protection. Advance Mid- Higuera flood protection improvements by seeking Zone 9 funding to complete design, obtain approvals and make progress toward construction as resources will allow. Leisure,Cultural & Social Services Skate Park. Develop plans and specifications and seek funding to constrict a skate park. Urban Forest. Update master plan and develop recommendations to renew the urban forest and plant more trees. Homeless Services. Identify and pursue opportunities to implement the "Ten-Year Plan to End Chronis Homelessness." -5 - ATTACHMENT MAJOR CITY GOALS COST AND FUNDING SUMMARY The following summarizes operating program and capital improvement plan (CEP)costs to achieve the major City goal work programs and proposed funding sources. Cost Runny By Goal capkw Plan 200110 2D10-11 3X&10 2DIO-1l Ir&sMictt re Nhittetranee 7,563,100 6,111,700 Ttaffrc Congestion Relief 15,000 15,000 314&8OD 437,5W Eoax niicDevelgx= Pteserv.of Clerical Semoes&fiscal Hm1th 37,500 37,500 Land Use and ChculationRevisicns 120,000 45,000 Open Spam Preservation 1,07Z50D Gxen Fuse Cas Rechrction&EnmU Cbr& 25,000 DbwtWmNburtauure and Beai tificarion 593,00D 22QOOD Historic Pra ervatiori* 5.00D Trial =500 97,500 ]2471,400 6,79k200 Gxt&M=yByFWAM9Smiue iW hrpffmmt Plan 2009-10 2010-11 2009-10 2D10-I1 Genaal Rud* 167,500 88,750 3,176,700 2,538,700 CDBG 342,700 100,000 PaddrgFund 172,000 Paddand Developneit Rid 195,400 Sma Ftmd 2,476,000 2,0881000 WaterFtud 2,065,000 1,875,000 TranTo tation Intact Fees 35,000 8,750 714,100 167,500 LDVR Sub Area Fie 79,700 Zone 9 ARRA 1,200,000 State Bilm,Cram 890,000 ACL B CA= 350,000 Wnldlife Consavatian Board Grant 400,000 Fleet Replrt Feud 365,800 Trial 2!112;-500 9795M V-377AM 4769.M *$80,000 fa Phase H of the I fistcaic Preserve dcn goal(the inventory)will be r000nsidered in 2010-11,ani v uuld add to these totals if approved at that time. -6- B3 - l� ATTACHMENT MAJOR CITY GOALS INFRASTRUCTURE MAINTENANCE OBJECTIVE Sustain an effective level of core existing infrastructure maintenance such as streets, sidewalks, creeks and flood protection, as well as the protection and maintenance of other physical assets. DISCUSSION Measure Y Relationship; This major City goal for infrastructure maintenance directly supports two top priorities, neighborhood street paving and flood protection,for the use of Measure Y revenues. American Recovery and Reinvestment Act (ARRA) Relationship; At this time, the effect of the American Recovery and Reinvestment Act (ARRA) Federal stimulus package is unknown. Staff has been working with the State and local Council of Governments to apply for available funding. Staff has submitted project lists as potential candidates and will continue to monitor the funding opportunities that may be presented. Workscope Summary The City's infrastructure is key to its residents' quality of life and this Major City Goal touches all aspects of City services, whether it is the buildings and facilities in which recreation activities are provided or the streets people use every day to move about the City. While funding for the Capital Improvement Program (CIP) and Operating Programs is not as plentiful as it was two years ago, the 2009-_11 CIP program recommended for approval will provide an effective level of maintenance for the City's physical assets. This goal will focus on traditional infrastructure maintenance including, buildings, parks, streets, drainage, water, and wastewater facilities. It will also overlap with some of the work recommended to occur under the Downtown Maintenance and Beautification objective. Background The City typically devotes a high percentage of the Annual CII' budget to infrastructure maintenance. Proactive projects to replace aging sewer and water lines, repair City facilities, repair sidewalks, repair streets, add handicap ramps, repair bridges and remove silt from creek channels have helped the City avoid unexpected repairs. With a Council philosophy that we should take care of what we already have, this goal strives to make the most of limited General Fund resources in order to survive the next two years of reduced funding. Eydsting Situation City staff uses a combination of CIP projects and work performed by City crews to make essential repairs to City infrastructure, but has had difficulty during the last several budget cycles reducing a backlog of needed maintenance in the street paving, storm drainage and other areas necessary to keep our infrastructure in a good state of repair. Without significant amounts of new funding, staff will be faced with prioritizing needs for maintenance and continuing to "hold it together" in certain areas with the hope that an emergency failure does not occur. Staff believes that the proposed CII' for 2009-11 sets those priorities in order for an effective level of infrastructure maintenance to be achieved. F,3 -13 -7- ATTACHMENT MAJOR CITY GOALS INFRASTRUCTURE MAINTENANCE Work Completed With the passage of Measure Y in 2007, the City was able to provide additional resources for infrastructure maintenance as part of the 2007-09 Financial Plan. During the two year Financial Plan cycle, staff completed design of 51 maintenance projects and construction of 59 projects. An additional 14 projects are preparing for summer 2009 construction and include a street reconstruction and a street resurfacing project, sidewalk replacement in the downtown, and storm drain pipe replacements. In addition to large construction projects, new storm drain maintenance staff completed cleaning of 90% of the drainage inlets in the City, removing many tons of debris to improve inlet performance in wet weather. City street maintenance crews have also completed maintenance paving of 20 blocks of city street, in addition to smaller patching projects. They also experimented with a new sealing product to see if it holds promise for treating street surfaces, postponing more significant repairs. Finally, Parks maintenance staff implemented new equipment and materials at the Damon Garcia Sports Fields to improve the durability of the turf. WORK PROGRAM CONSTRAINTS AND LIMITATIONS The majority of the City's maintenance projects require minimal review by regulatory agencies with the exception of work in the creeks. Maintenance work generally qualifies for exemptions from environmental review due to the replacement nature of the work. The primary constraints are coordination with business operations and neighborhood access. These issues are addressed on a project by project basis as the sites are investigated during design. Construction contracts are written to address special needs in any given area. Coordination will be required at park facilities that are rented to the community to ensure the facilities are not committed at the same time work will take place. Public Works and Parks & Recreation Department staff will work together to indentify the construction windows and reserve the facility during that time. Projects will also be coordinated to honor the intent of the Pavement Management Plan, which calls for underground work to be completed in each Pavement Area prior to starting the street reconstruction or resurfacing project. Public Works and Utilities department staff will work together to schedule projects to minimize trenching of freshly sealed or paved streets. STAKEHOLDERS The entire community is a stakeholder in infrastructure maintenance. Where work will impact the community, staff uses a variety of contact methods including press releases for large impact projects such as arterial street paving, and door hangers for projects that will impact residential neighborhoods. ACTION PLAN Buildings. Work is recommended for some of the City's buildings to protect them against deterioration. Shower stalls are to be replaced in one of the Fire Stations where leakage is causing damage to the support structure of the building. Restroom replacement at two City parks is also recommended to occur in this budget. This will have the added benefit of making these facilities more accessible. A roof replacement for a park building and the sealing of the masonry at the historical Carnegie Library are also recommended. Park Playground Equipment. The City routinely replaces play equipment both to remove equipment that is broken and to upgrade the equipment to newer more accessible and safer equipment. A shift to wooden structures some years ago has accelerated the need to complete some replacements. The wooden structures did - 8- -R3 - 1Y ATTACHMENT INFRASTRUCTURE MAINTENANCE not hold up well and are being removed due to rot. There are two projects proposed in the CIP to go to construction and three more to be designed and ready for construction with the 2011-13 Financial Plan. Streets. As in past years, significant funding is recommended for street reconstruction and resurfacing, in both the neighborhoods and Downtown. This type of work consistently ranks as a high community priority. Work is also proposed to repair sidewalk sections and modify corners to comply with State and Federal accessibility requirements. The fleet replacement program is recommending the replacement of the paving machine used by the street maintenance crew. The current machine is not operating properly and is very labor intensive, slowing paving operations. The new equipment will improve the efficiency of paving operations and allow the crew to complete larger projects, which are complementary to the street reconstruction and resurfacing work done by contract. Flood Protection. Recommended work will focus on the replacement of aging corrugated metal pipe culverts, repair of a failed culvert under South Higuera Street and improving the performance of the Andrews Creek rock guard. Utilities. Water distribution and wastewater collection work proposed will focus on replacing aging and undersized piped systems and maintaining treatment plant equipment. Replacement of the failing polybutylene water services will also continue. Downtown Design Standards. As part of the Council's Downtown Maintenance and Beautification objective, design standards that are used for replacement of infrastructure in the downtown will be reviewed. The Downtown objective contains a more detailed description of the action plan. Task Dabe Building Maintenance Projects 1. Fire Station 3 Shower Stall Construction,Police Annex Sewer Lateral Replacement,Carnegie 6/10 Library Exterior Sealing,Laguna Lake Restroom Replacement 2. Meadow Park Roof Replacement,Santa Rosa Restroom Replacement 6111 Playground Equipment..Projects 1. Meadow and Throop Park playground Equipment Replacement 6/10 2. Johnson, Santa Rosa and Emerson Park playground Equipment Replacement design 6/11 Streets and Flood Protection Projects I. Andrews Drainage System Design,Drainage Facility Design,Higuera Culvert Repair,Street 6/10 Reconstruction and Resurfacing Design,Sidewalk Repairs,Sidewalk Ramp Construction,Warden Bridge Resurfacing 2. Andrews Drainage System Permitting,Drainage Facility Construction,Sidewalk Repairs,Pavement 6/11 Area and Downtown Street Reconstruction and Resurfacing Design and Construction,Sidewalk Ramp Construction,Parking lot resurfacing,Street Light Pole Painting,Downtown Tree Management Plan Tree and Sidewalk work 3. Pavement and sidewalk maintenance by City staff Ongoing -9- 83 -S ATTACHMENT MAJOR CITY GOALS INFRASTRUCTURE MAINTENANCE Utility Projects 1. Polybutylene Water Service Replacement,Waterline Replacement,Sewerline Replacement,Raw 6/10 Waterline Coating 2. Polybutylene Water Service Replacement,Waterline Replacement,Sewerline Replacement,Water 6/11 Treatment Plant Roof Replacement and Filter Media Replacement,Water Reclamation Facility Digester Repair,Clarifier Recoating,DAFT Repair and Facility Painting Downtown Design Standards Complete review and modifications of Downtown design standards used in infrastructure maintenance 3/10 as part of the Council's Downtown Maintenance and Beautification objective KEY ASSUMPTIONS Project costs are based on recent bids and account for funding currently anticipated to be approved to complete the work. Anticipation of seasonal work has framed the year in which certain work will be accomplished, rather than the year of actual funding. The current financial situation in the country will have an unknown impact on the bidding climate and the City's ability to fund the Capital Improvement Plan as currently recommended. Delivery assumes that staff reductions are not so severe as to hamper delivery of the various projects and maintenance tasks. RESPONSIBLE DEPARTMENT The work of the Capital Improvement Plan will be primarily carried out by the Engineering and Maintenance Division of the Public Works Department. For project work, engineering staff will work as a team with the project proponents to complete delivery of the project outlined in the program. Community Development will largely take the lead in the Design Standards review. 834/ - 10- ATTACHMENT • -i IN I wKelelff 16-2 INFRASTRUCTURE MAINTENANCE FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Cost Summary Operating Programs Capital Improvement Plan 2009-10 2010-11 2009-10 2010711 Fire Station 3 Shower Repair 57,500 1016 Walnut Sewer Lateral 25,000 Santa Rosa Park Restroom Replacement 390,000 Meadow,Throop Play Equipment 224,800 Johnson,Santa Rosa,Emerson Play Equipment 48,700 Meadow Park Roof Replacement 5,000 40,000 City/County Library Masonary Seal 15,000 Andrews Creek Bypass 250,000 Stormdrain Replacements 260,000 260,000 Minor Stormdrain Facilities 25,000 25,000 Higuera Culvert Repair 150.000 Sidewalk Repair 20,000 20.000 Ramp Construction 135,000 200,000 Warden Bridge Resurfacing 45,000 Downtown Paving 200,000 Street Reconstruction&Resurfacing 1,230,000 1,230,000 Parking Lot Resurfacing 122,000 Street Light Painting 50,000 Urban Forest Management Plan 25,000 25,000 Wastewater Collection System 1.695,000 1,663,000 Water Reclamation Facility 695,000 425,000 Polybutylene Services 450,000 250,000 Water Distribution System 1,350,000 1,375,000 Water Treatment Plant 200,000 250,000 Streets Fleet Replacements(Paver,Roller) 365,800 Total $0 $01, $7,685,100 1 $6,111,700 Funding Sources Operating Programs Capital Improvement Plan 2009-10 2010-11 2009-10 2010-11 General Fund 2,269,200 2,048,700 CDBG Fund 342,700 100,000 Parking Fund 122.000 Parkland Development Fund 195,400 Sewer Fund 2,390,000 2,088,000 Water Fund 2,000,000 1,875,000 Fleet Replacement Fund 365,800 Total 0 0 7,685,100 6,111,700 With the exception of the Johnson, Santa Rosa and Emerson Play Equipment, the projects are budgeted through the construction phase. The play equipment at these three sites will require future funding for construction. GENERAL FUND REVENUE POTENTIAL It is not anticipated that there will be any General Fund revenue enhancements as a result of achieving this goal. 63 -I--�- ATTACHMENT INFRASTRUCTURE MAINTENANCE OUTCOME—FINAL WORK PRODUCT Routine infrastructure maintenance primarily accomplishes three things. It completes work on the City's facilities which protects and extends their life, preventing more costly major repairs or replacement. It can also prevent a catastrophic failure which could result in an injury or damage to property. And ultimately, it maintains and enhances the quality of life in the community by providing reliable core services. 12_ 83 -rS' ATTACHMENT MAJOR CITY GOALS TRAFFIC CONGESTION RELIEF OBJECTIVE Continue efforts on projects and programs which relieve traffic congestion, such as street modifications, intersection improvements, pedestrian improvements, bicycle facilities, trip reduction programs, traffic signal operations and public transit. DISCUSSION Measure Y Relationship: This major City goal for relieving traffic congestion directly supports a top priority for the use of Measure Y funds and will launch for the first time an annual report on congestion management, similar to the annual report on traffic safety. American Reinvestment and Recovery Act: At the time of writing this major goal, issues associated with potential funding stemming from the American Reinvestment and Recovery Act (ARRA) are still unresolved. Approximately $1,000,000 is anticipated in one-time only funding for transit capital for use by SLO Transit (this will be discussed under the separate Transit Enterprise Fund review), and $1,200,000 is anticipated to be received for use on general transportation projects. Staff is proposing to program any and all ARRA general transportation funds for the Railroad Safety Trail Phase 111 project which continues to be significantly underfunded but will be ready for construction in FY 2009-10. This recommendation is being made because the project is eligible for Federal funding assistance and should be able to meet delivery requirements of the Act (it is "shovel ready"). Workscope Summary The work program consists of the following key elements: I. Completing construction plans and specifications for the Los Osos Valley Road(LOVR) interchange. 2. Completing project design and beginning construction of Tank Farm and Broad Street intersection widening. 3. Completing construction of a traffic signal at US 101 and Grand Avenue. 4. Working with developers in the Margarita area to begin a phased in approach to improving Prado Road in the "west end"of the Specific Plan area. 5. Improving the intersection at Johnson and Buchon in response to neighborhood traffic concerns. 6. Constructing curb ramps and repairing city sidewalks to improve accessibility for pedestrians. 7. Completing the first annual Congestion Management Report, similar to the annual Traffic Safety Report, to analyze key traffic congestion problems, identify priorities, and make specific recommendations for improvement. 8. Completing bi-annual bicycle and vehicle traffic counts. 9. Implementing Neighborhood Traffic Management projects to address traffic concerns. 10. Continuing to apply for grants for alternative transportation projects such as bikeways and pedestrian paths including: a. Continuing.with bicycle improvements such as the Railroad Safety Trail and Bob Jones City-to-the Sea Trail b. Continuing to promote alternative transportation through marketing and education outreach. 11. Implementing the Short Range Transit Plan (SRTP) update as funds permit. 12. Maintaining basic levels of transit service for SLO Transit and SLO Regional Transit Authority (RTA) during a time of transit funding shortfalls. q ATTACHMENT TRAFFIC CONGESTION RELIEF 13. Working with the San Luis Obispo Council of Governments (SLOCOG) and Caltrans regarding future planning for State Route One (Santa Rosa Street corridor). 14. Accessing to the greatest extent possible, American Recovery and Reinvestment Act(ARRA)Funding. Existing Situation Public Works is responsible for identifying traffic congestion points and safety issues in the City's circulation network and developing solutions to both.This often leads to recommendations to provide additional capacity (as outlined in the Circulation Element) in order to accommodate current and future traffic demands. In addition opportunities for small scale operational improvements to the street system, traffic striping or signage, signal coordination system, bicycle and pedestrian improvements, and mass transit service improvements are frequently identified. To facilitate these efforts, the City is proposing a number of small, medium, and large capital improvement projects. Public Works conducts bi-annual surveys and counts of traffic and travel patterns for both vehicles and bicycles. This information is used to prioritize projects and recommend congestion relief efforts necessary as the City and adjacent communities develop. Through the efforts of the Bicycle Programs Coordinator, the City has been very successful in obtaining partial grant funding for work on improving the City's bikeway system. However, despite these efforts, many of the segments are still underfunded and need further grant assistance to complete construction. Projects currently under design include: the Bob Jones bridge connections at Prado Road and LOVR, Railroad Safety Trail phase 4A (Foothill to Cal Poly), the Bridge over US 101, and Phase 3 (Amtrak to Marsh), and the Safe Route to School project to construct a bridge over Prefumo Creek near LOVR. The City maintains a program for installing bicycle facility improvements in conjunction with City street paving projects to coordinate efforts within the public right of way and reduce project costs. The City maintains a program for constructing curb ramps and repairing City sidewalks to improve pedestrian accessibility, which is implemented through the annual street reconstruction and resurfacing project. Additionally, the City maintains a Neighborhood Traffic Management program to address traffic concerns within the residential neighborhoods. The City also collaborates with SLO Regional Rideshare to promote activities such (as Safe Routes to School, Bike Month, and Rideshare Week) that encourage the use of alternative transportation to vehicles. The City is also working with SLO Regional Rideshare to promote a new 511 traffic hotline. Work Completed As a result of the City's 2007-09 Capital Improvement Program, construction was completed on the widening of Santa Barbara Street and Orcutt Road at the railroad crossing, and a traffic signal will soon be in place at Laurel and Orcutt. The Bob Jones Trail segment was completed from Prado past the Water Reclamation Facility, and Phase 4 of the Railroad Safety Trail was completed from Taft to Foothill. The final phase of the Bill Roalman Bicycle Blvd was completed in Spring 2009. Due to the significant recession in the development community, infrastructure improvements associated with development projects have not occurred. The Prado Road extension between Higuera and Broad Street is the responsibility of development and will likely happen in a reduced or phased approach due to the delay in residential development in that specific plan area. - 14- ATTACHMENT TRAFFIC CONGESTION RELIEF Work is near completion on the environmental document for the Los Osos Valley Road Interchange reconstruction, and staff has met with Los Verdes Park residents to discuss their concerns about noise and access. Design work for the project is expected to be completed in early 2010 with a plan to take advantage of accelerated state or federal infrastructure funding that is available. CONSTRAINTS AND LIMITATIONS 1. The Mid-Higuera widening project has become cost-prohibitive to pursue under its current scope. Staff estimates that right of way acquisition and relocation costs will exceed $5,000,000 and there is no other funding source available. Because of a lack of timely progress on the environmental document, SLOCOG staff have reprogrammed funds from this project to other projects in the County with the caveat that the City could reapply for those grant funds when it has reached a decision on a new scope for the project. Staff will continue to pursue options for a smaller more focused project at the comer of Marsh and Higuera within available funding. 2. Project costs for this work program are based on recent bids and account for funding currently anticipated to be available to complete the work. The current financial situation could impact the bidding climate and the City's ability to fund the Capital Improvement Plan as currently recommended. 3. It is anticipated that several projects will require additional funds for construction to begin. If additional grant funds are not acquired, and General Fund dollars are not available, the projects will not begin construction and will have to wait for future funding. 4. Significant reductions in transit operational funding will make it difficult to maintain current service levels, let alone implement new service recommendations of the Short Range Transit Plan. 5. Because of funding commitments to keep the Los Osos Valley Road Interchange on schedule, other projects must wait for accumulated Transportation Impact Fee (TIF) funds for design and construction. The revised TIF program better reflects the new costs of capital projects and passes on the appropriate share to new development. Unfortunately, the projected state of the development industry makes it unlikely that TIF revenue will be secured in its historical pattern. 6. Infrastructure improvements tied to new growth areas will be delayed due to the economy and may be implemented in a phased approach when development activity returns to historical levels. 7. Approval of the construction documents for the LOVR Interchange is subject to Caltrans and federal review timelines and therefore the date of approval cannot be guaranteed. 8. Many of the Bikeway projects are only partially funded and will need additional resources to complete construction. 9. Given the projections for the 2009-11 City budget, less funding will be available for the construction of sidewalks, curb ramps, traffic calming devices, and bicycle facilities all of which assist in traffic congestion relief. 10. The temporary Bicycle Programs Coordinator position in the Transportation Planning and Engineering Program is set to expire on June 30, 2009 reducing the staffing available to implement this Major City Goal. 11. The City Traffic Engineer position is proposed for elimination with other regular and contract staff taking up the duties. 133 -al _ 15 _ ATTACHMENT ACHMENT MAJOR -GOALS TRAFFIC CONGESTION RELIEF STAKEHOLDERS The stakeholders in this program are largely users of the circulation system that include: motorists, bicyclists, transit riders, pedestrians and residents. Other stakeholders include the business and development community, transportation providers such as freight carriers and transit operators, and the disabled community. ACTION PLAN Transit Service Levels 1. Maintain existing transit levels for local and regional services with uncertain levels of State and Ongoing Federal funding. 2. Implement recommendation in the Short Range Transit Plan if funding is available. Ongoing 3. Explore alternative fuel and vehicle type to offset operational costs. Ongoing Transit Improvements 1. Use federal and state capital funding to replace and upgrade vehicles. Ongoing 2. Use federal(ARRA)and state capital funding to upgrade Automatic Vehicle Location)AVL system for 3/10 improved on time performance. 3. Use federal (ARRA)and state capital funding to improve the transit facility on Prado Road. 3/10 Congestion Management Report Implement low cost recommendations of the Congestion Management Report. Ongoing State Route 1/Highway 101 Work with SLOCOG and Caltrans regarding further planning for State Route One(Santa Rosa Street) 6/10 including an alternatives assessment for US 101/SR 1 interchange. Prado Road Extension Work with west side Margarita area property owners to implement phased improvements to Prado Ongoing Road. Signalization of US 101/Grand Avenue Intersection 1. Complete design. 12/09 2. Begin Construction. 5/10 3. Complete construction. 9/10 Los Osos Valley Road Interchange 1. Complete construction plans and specifications. 5/10 2. Begin right of way acquisition. 6/10 3. Complete right of way acquisition. 6/11 4. Pursue additional funding. Ongoing 5. Implement phase improvements as new development occurs. Ongoing Traffic Model Update . I. Complete base year traffic model update. 7/09 2. Recruit temporary or contract staff,or consultant assistance for traffic model development. 7/09 16- X33 -a 2 ATTACHMENT TRAFFIC CONGESTION RELIEF 3. Complete Traffic Model Update with existing Land Use scenarios. 6/10 4. Identification and development of strategic revisions to the Land Use Element in superseded sections. 3/10-6/11 5. Conduct traffic model assessments of various land use modifications for future year forecasts and 3/10-6/11 strategic revisions to the Circulation Element. Neighborhood Traffic Management Program Update . Update the Neighborhood Traffic Management program to reflect current practices and principles. 7/09 Aero Drive Realignment Work with the County of San Luis Obispo to relocate Aero Drive and signalize access to San Luis Ongoing Obispo Regional Airport. SLO County 511 . Work with Rideshare to promote a new 511 traffic hotline. Ongoing Johnson and Buchon Intersection Improvements 1. Begin project design(Combined Scope of PismoBuchon Neighborhood Traffic Management Program. 8/09 2. Begin construction. 1/10 3. Complete construction. 5/10 Tank Farm Road Intersection Improvements 1. Initiate design of Tank Farm Road widening project. 12/09 2. Complete project design. 6/10 3. Begin construction. 9/10 4. Complete Construction. 6/11 Railroad,Safety Trail-Phase 3.' I. Complete construction documents. 9/09 2. Pursue additional funding. Ongoing 3. Award contract and begin construction. TBD Railroad Safety Trail Phase 4a 1. Complete construction drawings. 7/09 2. Begin Construction 10/09 3. Complete Construction 3/10 Railroad Safety Trail Bridge: Highway 101 Crossing I. Complete Union Pacific Railroad and Caltrans Agreements 10/09 2. Complete design 1/10 3. Pursue additional funding Ongoing 4. Award contract and begin construction. TBD Bob Jones City-to-gea Trail 1. Pursue outside funding for trail connections. Ongoing 2. Complete construction drawings. 9/09 3. Complete construction. 3/10 17_ �3 -a3 ATTACHMENT MAJOR CITY GOALs TRAFFIC CONGESTION RELIEF Bill Roahnan Phase Ii Complete construction. 9/09 Madonna Road Bike_Path Work with property owners and Caltrans to implement a new bicycle facility that connects Madonna 10/09 Road to Marsh Street. Other Projects That Reduce Traffic Congestion 1. Complete curb ramps,on-street bicycle facility paving,and striping improvements in conjunction with Ongoing City Street paving projects. 2. Implement Neighborhood Traffic Management projects. Ongoing 3. Construct curb ramps and install sidewalks. Ongoing 4. Conduct bi-annual vehicle and bicycle traffic counts. Ongoing 5. Complete miscellaneous bicycle facility improvements identified in the Bicycle Transportation Plan, Ongoing as resources permit. 6. Develop a list, in conjunction with the Bicycle Committee,of streets that would benefit from Ongoing increased street sweeping and coordinate with Street Maintenance to use miscellaneous sweeping hours, when available,to increase frequency. 7. Seek funding for the design and construction of bikeways and pedestrian paths within the City. Ongoing 8. Promote bicycling,walking and transit as alternative forms of transportation. Ongoing 9. Provide more bicycle parking through the City's"Racks with Plaques"program. Ongoing KEY ASSUMPTIONS 1. The first Congestion Management Annual Report will be complete in May 2009 and will begin benchmarking various intersection and road segments that are or will experience congestion. An update to the Short Range Transit Plan (SRTP) will be completed in May 2009 with recommendations for service improvements to reduce congestion and provide better service to our transit community. 2. The State will approve "design exceptions" and permits for all projects that require modifications/deviations from current State and Federal standards. This includes design exceptions for the Bob Jones bridge connection at LOVR and the Railroad Safety Trail bridge at US 101. 3. Continuation of the current contract traffic engineering position is needed to conduct and implement this program, which will cost $107,000 annually.However staff is proposing to fund half of this position through reorganization and the other half directly to grant projects or to the Traffic Model Update project that is included in the proposed CII'; the City Traffic Engineer position will be under filled with the Senior Traffic Engineer whom will supervise the Traffic Engineering section. This staffing strategy will actually result in a 20% reduction in operating costs. 4. A minor increase in temporary staffing hours is also needed to conduct and implement this program, which will cost $19,700 annually. However staff is proposing to fund these additional hours thru a reorganization; functions typically performed by contract services will be internalized to provide a cost savings, a portion of this savings will fund these additional hours. This staffing strategy will actually result in a 4% reduction in operating costs. - 1a- 8J"aI ATTACHMENT MAJOR GOALS TRAFFIC CONGESTION RELIEF 5. Overall staffing reductions as a result of budget balancing strategies will not reduce the ability to design and inspect projects in a timely manner. 6. Approximately $617,800 ($543,500 from Mid-Higuera and $74,300 from Granada/Higuera Signal) in Transportation Impact Fees are recommending to be deprogrammed from prior appropriations to CIF's and used to fund projects in the above list. 7. American Recovery and Reinvestment Act funding (ARRA) of $1,200,000 is being recommended for programming on the Railroad Safety Trail Phase III project. Since the project is significantly underfunded but will be ready for construction in FY 2009-10, it is intended that any additional ARRA funding available will be programmed for this project. 8. Additional funding for construction will be acquired for capital projects that are fully designed, including the Railroad Safety Trail Segment 3 and Bridge connection at US 101, the Safe Route to School project at Prefumo Creek,and the Bob Jones Bridge connections. 9. Transit service funding levels will stabilize for 2010 and 2011 without the need to reduce basic service levels further. 10. The temporary Bicycle Programs Coordinator staffing position is needed to assist with implementation of the Major City Goal and Measure Y Priority which will cost $32,700 in 2009-10 and $37,600 in 2010-I1. The Transit fund will fund $20,000 annually of the Bicycle Program Coordinator position and will use the position to assist in transit programs,marketing and bicycle integration. RESPONSIBLE DEPARTMENT The Public Works Department will be responsible for achieving much of this goal.and completion of the identified steps. The Natural Resources Manager, City Biologist, and Community Development Department will assist with environmental issues that may arise on each of the various projects. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Along with significant staff commitment from Public Works Transportation, Engineering, Development Review and other operating department staff, substantial additional funding will be needed to complete or make progress on congestion relief projects and programs. Project delivery assumes that staff reductions are not so severe as to prevent delivery of the various projects and other related tasks. B3 -aS - 19- ATTACHMENT MAJOR GOALS TRAFFIC CONGESTION RELIEF Cost Summar Operating Programs Capital Improvement Plan 2009-10 2010-11 2009-10 2010-11 LOVR Interchange Improvements 79,720 Bicycle Facility Improvements 25,000 25,000 Congestion Management Report Traffic Safety Report Implementation 25,000 25.000 Neighborhood Traffic Management 20.000 20,000 Railroad Safety Trail Lighting 15.000 70.000 Railroad Safety Trail: Phase III 2,148,070 Railroad Safety Trial: Hwy 101 bike/ped bridge 543.500 Sidewalk Accessibility Improvements 135,000 200,000 Sidewalk Repair 20,000 20,000 Street Light Replacements-Broad Street 60,000 Traffic Model Update 77,500 77,500 Bicycle Safety Education 15,000 15,000 Total 1 $ 15,0001 $ 15,000 11 $ 3,148,790 $ 437,500 Funding Sources Operating Programs Capital Improvement Plan 2009-10 2010-11 2009-10 2010-11 General Fund 15,000 15,000 265,000 270,000 Transportation Impact/LOVR Sub-Area Fee 79.720 Transportation Impact Fee 714,070 167.500 State Bicycle Transportation Account Grant 890.000 American Recovery and Rein. Act(ARRA) 1,200,000 Total $ 15,000 $ 15,000 1 $ 3,148,790 1 $ 437,50(1 GENERAL FUND REVENUE POTENTIAL There is no direct potential for General Fund revenues from these projects, however traffic congestion relief will improve access within the City which can increase sales tax and transient occupancy tax revenues. OUTCOME—FINAL WORK PRODUCT These programs and projects should result in significant improvements in reducing traffic congestion in key locations in the City. _20- B3-cX ATTACHMEN MAJOR CITY GOALS ECONOMIC DEVELOPMENT OBJECTIVE In collaboration with Cal Poly, Cuesta, and the business community, develop strategies to increase economic development including emphasis on head-of-household jobs and environmentally sustainable businesses. DISCUSSION Workscope Summary With emphasis on creating head of household jobs and environmentally sustainable businesses: 1. Re-orient the City's Economic Development Program to a proactive, analytically driven program that supports business retention and expansion and more effectively uses web resources to provide information and market the City as a place to do business; 2. Formalize a Business Retention and Expansion Program based on business surveying, data analysis, and outreach; 3. Build on industry cluster opportunities to identify synergistic strategies for Economic Development in San Luis Obispo; 4. Build a collaborative relationship with the Cal Poly and Cuesta College to enhance economic development strategies. Background During the major recession in the early 1990's, the Council established its first Major City Goal focused on economic development. After establishing this goal, an Economic Strategy Task Force was formed and worked for nearly a year to define a "more proactive" economic stability,program. The Task Force also agreed on goals set out in a document entitled "Vision for Economic Stability in San Luis Obispo". In keeping with the recommendations, the Council directed City resources to specific activities intended to preserve and promote the financial stability of the community. From 1993 to 1997, Council expanded the City's fledgling economic stability activities into the Economic Development Program. A dedicated Economic Development Manager was hired (as was a dedicated Natural Resources Manager). Materials touting the phrase "Success, Naturally!" were provided to businesses requesting information about doing business in San Luis Obispo. Following a series of meetings with a task force of business leaders,a Targeted Industry Cluster Report was adopted. It identified industries matching the character, environment, employment, and product needs of residents (1996-97) in an effort to attract these types of businesses to the City. From 1997 through 2002, the Economic Development Program focused on on-going Economic Development activities as well as proactive and strategic marketing initiatives to develop businesses as well as tourism and community promotion. Responding to another significant downturn in the economy, two of the Council's 2003-2005 Major City Goals emphasized the generation of revenues. Specifically the Council focused on increasing Transient Occupancy and Sales Tax revenues for the City. This trend continued into the 2005-2007 Financial Plan. As a result, since 2003, the Economic Development Program has focused on various development projects. This is seen in the completion of the Court Street Center, COSTCO, and Irish Hills Plaza along with location of new retailers in existing Downtown locations. Following the devastating San Simeon earthquake in 2004 the Economic Development Program was expanded to include Unreinforced Masonry (URM) Ordinance compliance and tourism efforts were reassigned to the Principal Administrative Analyst with staffing changes in 2006. g3 -a�- -21 - ATTACHMENT MAJOR CITY GOALS ECONOMIC DEVELOPMENT For several years now, the Economic Development Program has endeavored to provide a high level of customer service to projects that improve the Cityscape and decrease hazards(URM projects)or increase tax revenues(e.g. Chinatown, Garden Street, Auto Dealers). The City's approach to business retention and expansion has been largely reactive to permitting and licensing issues brought forward by businesses. Recently, there have been notable successes for the economic health of the community. In 2008, Phase 1 of the Airport and Margarita Areas were successfully annexed into the City thereby creating future space for expanding businesses. During the strong economic times from 2004 through 2007, several national retailers located along the Los Osos Valley Road corridor, a new Marriott hotel opened on Calle Joaquin, Cole Motors expanded along Broad Street, and land was annexed and set aside for future auto dealers. While the Program's efforts to expand retail and tourism have created many new jobs in recent years, these jobs trend toward lower pay scales not traditionally thought of as head of household jobs. Eydsting Situation The existing Economic Development Program works effectively to facilitate projects that will bolster sales and/or transient occupancy tax such as Chinatown, Garden Street Terraces, and Prefumo Creek Commons. The program also serves in an "ombudsman" capacity for businesses in the City's permitting processes as issues are brought to the City's attention. The Program Manager relies on the relationships facilitated by community partnerships, notably with the Chamber of Commerce, the Downtown Association, and the Economic Vitality Corporation. Assistance for small business is made available through partnerships with organizations such as the Chamber of Commerce, Economic Vitality Corporation, S.C.O.R.E., and Cuesta College's Business Assistance Center. The web and email help to maximize efforts to answer questions and facilitate connections with the business community. The ShopSLO program encourages shoppers to use their dollars locally. Compliance with the Unreinforced Masonry Program deadlines continues to be a priority for the Economic Development Program with outreach and response to affected owners and businesses. Knowledge about the economic health of the community is gathered through contracts with Hinderliter and de Llamas (HdL) and through forecasting the economic outlook by UCSB Economic Forecast Project and City- focused economic forecasting. These sources of information provide data shared through the Economic Development webpage and information for City decision-makers. The City's business retention activities focus on assisting businesses with the permitting process, providing access to data, such as resources and space available via the web, and the Business Visitation Program. The current Business Visits increase the Council and business leaders' knowledge of ten businesses each year. One recent attribute of the businesses chosen for visitation is businesses with sustainability as a focus. Although these visits better expose the varied business enterprises in the City and offer anecdotal information about our businesses, we do not have the type or breadth of information that an effective business retention and expansion program needs. Such information will be provided by the Business Retention and Expansion (BRE) program envisioned in this work program. Work Completed In 2008, City staff and Council members participated in the Chamber of Commerce's fact finding trip to Boulder Colorado which generated ideas for redirecting the economic development efforts of the community. Another outgrowth was a heightened desire for growth of environmentally sustainable businesses in the City. Subsequent to the Boulder trip, efforts have also been underway to bring about greater collaboration between the large economic drivers of our community, notably Cal Poly and Cuesta College. -22- X33-�8' ATTACHMENT MAJOR CITY GOALS ECONOMIC DEVELOPMENT Current research shows that about 65 to 80 percent of new jobs are created by a community's existing businesses rather than by businesses that relocate to a community. As a result and in anticipation of fulfilling the Council Goal, Business Retention and Expansion software has been purchased to facilitate organization and reporting on new and existing business retention activities. This software allows tracking and analysis of information important to helping businesses to thrive and to create new jobs as well as existing efforts to help businesses with concerns about permit processing. The analytics available with this software will give critical insight into the City's efforts to help businesses and feedback about that help. Furthermore, to better understand the business retention model,economic development program staff undertook training in Business Retention and Expansion. CONSTRAINTS AND LIMITATIONS Constraints to this work program are, unsurprisingly, the traditional constraints: staff resources and money. In order to fully re-orient the Economic Development Program, added staff resources are needed. Increased collaboration and coordination with business,environmental,and community partners will require significant staff time as will the collection of data through business surveys. However, adding staff resources is not a practical option at this point in time. Existing staff resources could be redefined so that the high level analytic work necessary for this goal and program reorientation can be realized. This would require prioritization of the economic development program's needs over the needs of other projects in Administration. In a perfect world, the ideal additional resource would be an Administrative Analyst I whose work would also support the efforts of the Natural Resources, Community Promotions, and Cultural Activities programs as well as the Administration Department as a whole. Issues regarding day-to-day development review will also need to shift to other staff. While large scale business issues should remain with the Economic Development Program, the more focused customer service efforts should be handled by Community Development staff following a trend that has already started taking place via coordination between Community Development and Economic Development staff members. Updates to the Economic Development webpage offer a more efficient and effective way to provide information to businesses. Significant financial resources are needed to produce enduring changes to the City's overall website. Since that is not available at this time, staff will endeavor to better utilize the web and perform the necessary changes that are required to achieve this part of the work program. STAKEHOLDERS The stakeholders in this program are largely external to the City. These stakeholders include the business community, some represented by the Chamber of Commerce as well as those that are not so represented. In addition, the environmental community will be interested in this initiative due to the priority on environmental sustainability. With the emphasis on collaboration, the University and Community College communities are stakeholders. ACTION PLAN Re-Orient the Economic Development Program. This Work Program reorients the Economic Development Program from revenue enhancement to a focus on strategies that produce head of household jobs and environmentally sustainable businesses. Staff will use new and existing tools to increase knowledge about and understanding of the City's existing business community. Data collection, analysis, and outreach will be expanded to meet this goal. This work program will emphasize efforts aimed at cultivating the businesses and business clusters already located in the City without overlooking opportunities for attracting new businesses as they arise. -23 - B3'a9 ATTACHMENT ECONOMIC DEVELOPMENT Business Retention and Expansion - Getting to Know City Businesses Better through Business Surveying. The purpose of the Business Retention and Expansion Program (BRE) is to maintain an up-to-date picture of the local economy by obtaining data on the City as a business location. Further it will assess the relative strength of the local economy (e.g. number of business expansions, new investments, etc.) as well as identify areas of interest and concern that can improve the local business climate. These issues could include: workforce availability and quality, regulatory issues, access to capital, environmental sustainability, industrial park development, and input for general plan updates. Data Collection and Analysis. Data collection and analysis is the secret sauce necessary to a business retention and expansion program. Data about specific businesses in the City is available through two primary sources: new information obtained via surveying key businesses and existing data potentially available through the City's business licensing program, the Chamber of Commerce,Downtown Association, or EVC. Business retention surveys require confidential visits to business by volunteers for the purpose of completing a survey and discovering what makes each business tick. Initially, these visits will be undertaken by the Economic Development Manager and volunteers but will grow into a small group who are trained to give the survey. Prior to any surveying, the targeted businesses must be identified and the survey created by staff. This process will be aided by the BRE software and will be further directed by the identification of existing industry clusters and opportunities. The goal is to obtain as much information as possible, as soon as possible, including a program to complete 72 visits by the end of the budget cycle, approximately 4 per month following completion of the survey. The BRE database is intended to be used to provide metrics about economic development efforts, dynamics of the local economy, and the economic well-being of individual companies or clusters. This information will also offer support for the development of marketing efforts and informational tools. Identify Industry Clusters and Opportunities. Identification of existing Industry Clusters in the City is one part of the process of determining the building blocks for business expansion. To identify existing industry clusters, representatives from a wide cross-section of businesses, the environmental community, Cal Poly and Cuesta College, and the City will be tapped for insights and expertise. Industry clusters are important because they are an attribute that fosters expansion by existing or start-up businesses thereby creating jobs.. Identification is, therefore, an important part of the BRE process. On the one hand, industry cluster identification will help to identify businesses that are the most important survey targets. On the other hand, discussion about what is happening in the clusters and whether there are opportunities to encourage businesses should be part of the continuing analysis. Due to this dual nature, on-going discussions will be undertaken with a cross-section of the business,environmental,educational, and governmental community regarding industry clusters. Information Outreach. The internet has developed as the preeminent tool for today's communication. It is an efficient, low cost way to provide 'information and to promote the efforts of the City to meet business needs. Upgrades to the Economic Development webpage will continue to be identified with an eye to making it easier for businesses to find information efficiently and effectively on the City website. It will also include efforts to market our community as a place to do business through publication of analysis facilitated through BRE efforts. Collaborative economic development efforts with the Chamber of Commerce, Cal Poly, and Cuesta College. Universities and Community Colleges have been identified as economic development engines. Past efforts to collaborate with our local educational institutions have lacked focus. Recently, progress has been made toward a higher level of cooperation. In conjunction with this foundational work, the Economic Development program will work to develop a collaborative relationship with Cal Poly to identify ways to better utilize existing tools in support of business start-ups, recruitment of graduating students, and academic programs that may promote job growth. The Program will also work with Cuesta College to identify and coordinate with the College's workforce training and small business management training programs. -24- 133 -30 n ATTACHMENT MAJOR CITY GOALS ECONOMIC DEVELOPMENT Business Retention and Expansion(BRE)—Data Collection and Analysis 1. Develop BRE survey and identify initial businesses to survey. 12/09 2. Develop BRE database within staffing constraints using existing data from city and external sources. 6/10 3. Conduct 72 business surveys(4 per month beginning.January 2010). Ongoing 4. Update database with information from surveys and existing sources of information. Ongoing 5. Use BRE data to produce a quarterly newsletter on business retention and expansion. 3/10 6. Use BRE data to produce metrics about inquiries to the City. Ongoing 7. Work within staffing constraints to manage the BRE database.analyze the information,produce metrics Ongoing and disseminate information. 8. Continue to conduct 10 business visitations with Council per year. Ongoing 9. Continue to collaborate with Community Development on the Seismic Retrofit Program. Ongoing Identify Industry Clusters and Opportunities 1. Begin a series of forums to identify industry clusters and opportunities for job growth drawing on expertise 12/09 from the business,environmental,educational and governmental communities. 2. Draft a working list of industry clusters and opportunities. 12/09 3. Present working list of industry clusters and opportunities to participants and foster opportunities for 3/10 continuing collaboration on the list and opportunities. Information Outreach 1. Identify changes that would make economic development information more accessible to users of the City 11/09 web pages. 2. Work on web upgrades as time and staffing constraints permit. Ongoing 3. Coordinate with available staff to periodically update the web pages with data to market City as place to do Ongoing business. 4. Continue to contract with HdL and economic forecasters for data pertinent to businesses. Ongoing Collaborative Economic Development Efforts 1. Enter into collaboration agreements with the Chamber of Commerce,Cal Poly and Cuesta College. 12/09 2. Take action to foster collaborative activities with Cuesta College and Cal Poly. Ongoing 3. Partner with tourism efforts to market the community as a place to do business. Ongoing -25 B3 -31 - ATTACHMENT . -a i 01114 M ECONOMIC DEVELOPMENT KEY ASSUMPTIONS The overriding assumption is that endeavoring to foster environmental sustainability will be part of all of the efforts undertaken in this work program. With regards to accomplishing the additional work set out in this program, it is assumed that no added resources will be assigned to the program and thus,the timetables and tasks reflect this reality. Without added resources, it is assumed that progress on the new initiatives will be balanced with existing initiatives and the transition from existing tasks and public expectations will happen at a slower pace. If resources were available to assist with the higher level analytic work of a BRE program,the new procedures to accomplish the surveying and internal reporting that is the basis for effective delivery of the business retention and expansion analysis would be able to be conducted in a more timely fashion. In an effort to efficiently use existing information to jump-start the BRE program, it is assumed that information available through the City's business tax program will be used to help populate the BRE database initially and as new businesses are established. This information is critical to rapid success in identifying all of our economic assets and incorporating them into the business retention and expansion efforts. It is also assumed that the Cal Poly and Cuesta are willing to collaborate on activities that foster job growth and environmentally sustainable business in our community. Although collaborative work with Cal Poly has ebbed and flowed over the years, recent work with the business community may lead to greater success in this effort. Cuesta College continues to be a leader in workforce training and appears to be open to collaboration through the Business Assistance Center staff. RESPONSIBLE DEPARTMENT The Administration Department will take the lead role for this work program via the Economic Development Program. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL No new financial resources are required to achieve this goal. However a reprioritization of the time of the Economic Development Manager plus additional staffing resources will be required. GENERAL FUND REVENUE POTENTIAL Potential general fund revenue is a by-product of this work program. One result of business success, the creation of new jobs, is that there is more business activity in our City. This produces business tax as well as business to business taxes. In the past, the City's business retention efforts have been highly focused on development of revenue generating businesses. These activities, while a good short term strategy, do not promote a healthy long term economic health in the community. Businesses that create head of household jobs can be encouraged through BRE efforts to expand in our City and thereby create more wide-spread economic health through the multiplier effects of local high paying jobs. Quantifying these effects will not be as simple as tracking sales tax and transient occupancy tax receipts but should be apparent over time in the overall success of our community's growth in environmentally sustainable businesses that offer head of household jobs. OUTCOME—FINAL WORK PRODUCT This work program will improve the City's understanding of and ability to enhance the business climate in order to encourage job creation and encourage environmentally sustainable businesses through deeper knowledge and -26- 33 -3a- AT'T'ACHMENT MAJOR CITY GOALS ECONOMIC DEVELOPMENT understanding of our business strengths. A major work product will be operation of the Business Retention and Expansion (BRE)Program to gain new depth of understanding of our economy and provide the tools to be proactive in providing a climate for job creation. B3-33 ATTACHMENT MEMSEM PRESERVATION OF CRITICAL SERVICES AND FISCAL HEALTH OBJECTIVE Adopt a balanced budget that retains the City's fiscal health, preserves critical services and implements long-term productivity improvements and cost-reduction strategies. DISCUSSION Workscope Summary As detailed below,the proposed workscope consists of fourteen key action steps: 1. Implement organization-wide savings recommended by community members and City employees. 2. Continue to closely review and monitor the City's fiscal situation. 3. Implement budget balancing strategies adopted in the 2009-11 Financial Plan. 4. Resume "best practice reviews" that focus on one to two significant internal control areas annually that typically cross department activities. 5. Review and update as appropriate key plans that guide key infrastructure maintenance efforts such as the Pavement and Storm Water Management Plans. 6. Continue supporting pension reform. 7. Implement ongoing "benchmark" analysis of key financial and outcome measures with comparable communities every two years. 8. Update the Property Management Manual. 9. Continue evaluating contracting-out opportunities for cost reductions or service improvements. 10. Maximize grant funding opportunities, including"Stimulus Package." 11. Review Memorandums of Agreements. 12. Continue succession planning efforts. 13. Continue to develop, review, modify and implement Human Resources policies in support of fiscal health. 14. Resume formal organizational reviews on an ongoing basis. EAsting Situation Another very tough budget season that would be even worse without Measure Y revenues. Just two years ago, the City's fiscal outlook was characterized as the best in many years. This was largely due to the passage of Measure Y in November 2006, which established a general-purpose, '/2-cent City sales tax, combined with an improved local economy, the absence of the threat of more State budget takeaways and stable labor costs. 2009-14 Forecast Budget Gap $0 Unfortunately, this is not the case ($2.500.000) — today. Stated simply, the City is facing ($$,000,000) — another very tough budget season. ($7s00,000) While Measure Y revenues continue to be a bright spot — in fact, without them ($10,000,000)the City would be facing a dire fiscal ($12,500,000) situation instead of "just" a very tough ($15.000.000) one — all of the other bright spots have ($17,500,000) darkened from two years ago. There are 2009-10 2010-11 2011-12 2012-13 2013.14 several key actors in the City's fiscal 13 Budget cGap a wmVtA Measure y story. However, the most significant is Foreast z8 53 -I ATTACHMENT MAJOR CITY GOALS PRESERVATION OF CRITICAL SERVICES AND FISCAL HEALTH the largest economic downturn since the Great Depression. This results in declines or tepid growth in key revenues while costs—without corrective action—continue to grow. As reflected in the five-year fiscal forecast presented to the Council in December 2008, the City is facing a projected "budget gap" of $10.4 annually in 2009-11. As shown in the chart above,this gap would be much worse without Measure Y revenues: it would rise to about$16 million annually. While the City is better positioned than many communities to deal with this, it is not immune to these powerful economic forces. The City has seen— and will continue to see — adverse trends in our top three General Fund revenues of sales, property and transient occupancy taxes. Lastly, while the City was spared large budget reductions in the State budget process this year, there is no guarantee that this will continue to be the case: this will continue to be a major threat to the City for the foreseeable future. Short-Term Budget Actions So Far. In June 2008, in light of changing fiscal circumstances, the City began implementing the actions set forth in the Fiscal Health Contingency Plan. Along with other short-term actions, this included a hiring"chill." Since that time,the City Manager has turned the"chill"into a hard"freeze". September Budget "Rebalancing" Actions. On September 30, 2008, the Council completed the short-term action steps set forth in the Fiscal Health Contingency Plan when it took formal action to"re-balance"the budget by closing a gap of $4.8 million in the current year. The most significant of these actions was to "freeze" implementation of a new neighborhood patrol program and delete$2.4 million in capital improvement plan(CIP) projects, including $925,000 for street paving. Largely because of these short-term actions, it is projected that the City will begin 2009-11 with a balanced budget. Longer-Term Budget-Balancing Strategies. These will be developed as part of the upcoming 2009-11 Financial Plan, which will be very challenging— and would be much worse without Measure Y revenues. Stated simply, without deep service cuts in other areas, the City will not be able to sustain the service and infrastructure improvements that were initiated in the 2007-09 Financial Plan, let alone consider fihlher service improvements. It also means that the need to retain strong reserves in responding to the many uncertainties is imperative. Key Budget-Balancing Principles. The following reflects the key principles that City staff will use in preparing budget-balancing recommendations to the Council: 1. Meaningfully involve all employees in this process and communicate what's happening. 2. Ensure service reductions are balanced and retain highest priority services. 3. Make reductions based on service priorities, not vacant positions. While attrition is a helpful tactic, it will not be the driving strategy in reducing costs. On the other hand, one of the key purposes of the current "hiring freeze" is to create flexibility in making reductions based on priorities while mitigating the need for lay-offs. 2009-11 Budget Balancing Strategy. Conceptual Budget-Balancing Strategy. The sidebar chart $10.4 Million Gap summarizes the conceptual strategy for closing the$10.4 million gap facing the City: o Other O Reserve Revenues 3°h% 13% • Use of Reserve(Annual Average): $300,000(3%) o Sale of 610 • Sale of 610 Monterey to the Parking and expanded mutual rvto3%rev ° aid reimbursements: $700,000(7%) O Mutual AidO CIP • Other New Revenues: $1.3 million(13%) Reimb Reductions • Operating Program Reductions: $3.1 million(30%) 4% 47% • Capital Improvement Plan(CIP)Reductions: $4.7 million Icxpenditure Reductions:n% (47%) M Operating 30% -29- L3 —3.S ATTACHMENT PRESERVATION OF CRITICAL SERVICES AND FISCAL HEALTH Project Work Completed The following summarizes key City programs already in place that are focused on preserving the City's fiscal health, improving productivity and containing costs. Reserve. It has been the City's longstanding policy to maintain an unreserved, undesignated General Fund balance that is at least 20% of operating expenditures in order to mitigate the risk of: 1. Economic uncertainties, local disasters and other financial hardships or downturns in the local or national economy. 2. Contingencies for unseen operating or capital needs. 3. Cash flow requirements. Annual and Interim Financial Reporting. The City prepares its annual financial statements in accordance with generally accepted accounting principles (GAAP) and strives to meet the stringent requirements of the GFOA's Award for Excellence in Financial Reporting. In accordance with Charter requirements, the City contracts for an annual audit by a qualified independent certified public accountant and strives for an unqualified auditors' opinion. In addition to annual audits of its financial statements, the City prepares and issues timely interim reports on the City's fiscal status to the Council and staff. This includes: on-line access to the City's financial management system by City staff, monthly reports to program in more formal quarterly reports to the Council and Department Heads; mid-year budget reviews; and interim annual reports. It also includes focused reports such as the Monthly Investment Report, Quarterly Sales Tax Report and Monthly Transient Occupancy Tax (TOT)Report. Multi-Year Budgets and Long-Term Financial Planning. The City has used a two-year budget since 1983. Along with reducing the amount of time and resources allocated to preparing annual budgets, avoiding the "use or lose it" budget mentality and establishing realistic timeframes for achieving objectives, this multi-year approach reinforces the importance of long-range planning in managing the City's fiscal affairs. It short, it's not just about adopting a budget that makes sense for the coming year, but afterwards as well. The City also has a longstanding practice of preparing long-term forecasts (five to ten years) in framing the budget challenges ahead in preparing a balanced two-year budget. User Fee Cost Recovery Policy. The City maintains clear polices on the role of user fees in funding City services, which has become a national model for other local governments. Since setting fees is one the few areas where elected officials are able to.exercise discretion in funding City services, defining the role of user fees is more than a just a cost accounting issue: it is a key policy decision. If services fees are not assessed legitimately, then general purpose revenues are making-up the difference. The direct consequence of this is lower levels of service (and in tough times, deeper cuts) in essential programs that have no significant user fee potential, such as police, fire, streets maintenance, traffic congestion relief, creek & flood protection, natural resource preservation and parks &recreation. Low Debt Levels. The City has adopted and followed very conservative debt management policies. This has resulted in very low debt levels compared with other cities (which was cited as a key factor by Standards & Poor's in its recent upgrade of the City's credit rating). Contracting-Out. The City has made extensive use of contracting with the private sector as a key productivity strategy in delivering City services. This includes day-to-day services such as transit operations and maintenance, janitorial service, landscape maintenance, building plan checks, parking meter and citation collections, police and fire false alarm monitoring, copier and printer maintenance, radio maintenance and -30- B3 3(, ATTACHMENT PRESERVATION OF CRITICAL SERVICES AND FISCAL HEALTH printing (unlike many cities, we do not have an in-house print shop) as well as project design, management and construction. In fact, as detailed in the City's 2006 "Benchmark Study," contracting with the private sector, non- profit organizations and other government agencies accounts for about 50% of total City expenditures. Use of Technology. The City has been a local government leader in using technology to improve customer service, productivity and community access to City information. Key examples include the geographic information system (GIS) for improved management of the City's infrastructure and better information for planning decisions; cost-effective fiber optic based network, installed in partnership with Cal Poly user-friendly web site; on-line utility billing and recreation registration; computer aided design; computer aided dispatching and public safety records management system; on-line, up-to-date access to financial information; and the recent installation of a"voice over IP"telephone system that improves service while lowering operating costs. Internal Service "Best Practice Reviews." In 2001, the City began conducting focused reviews of internal policies and procedures on an ongoing basis, with the goal of developing, communicating and implementing "best practices" throughout the organization as part of a continuous effort in assuring internal accountability and effective stewardship of City resources. Using interdepartmental teams with staff from Administration, Human Resources, Finance and the operating departments as appropriate, the approach is to select two to four topics annually, prepare work programs identifying specific tasks and due dates, and cover five key questions: 1. What is our policy in this area? 2. Does the policy make sense? 3. If so, how well is policy being implemented? 4. Based on internal reviews and surveys of other agencies, what revisions and "best practices" should we implement? 5. How can we best implement them organization-wide? To date, we have performed reviews of the City's purchasing polices, time card and accounts payable approval authorizations, cash handling procedures, employee computer purchase program, cell phones, credit card use and travel policies. Due to other priorities, this program has been "on hold" for several years. Candidates for future reviews include compliance with the Fair Labor Standards Act, parking meter collections, construction change orders, fee collections, petty cash and bus fare collections. Fully Funded Liabilities. The City has established policies and practices that assure that long-term liabilities like pensions and retiree health care are actuarially funded rather than budgeting on a "pay-as-you-go" basis, which understates the cost in the short-term and becomes very expensive in the long-term. Benchmarking. One of the key productivity tools used by many private and public sector organizations is "benchmarking" key practices with comparable. highly-regarded agencies. In 2006, at the urging of The Tribune, the City conducted an extensive benchmarking analysis of key financial and performance indicators with comparable cities. The results showed that in virtually all operations, the City compared favorably with the benchmark cities; in several cases, San Luis Obispo was the Sl0 often does more, spends less than other cities, analysis shows "best in class." This is _....... How swe FNANUS, z_,MONT CALIFORNIA CMES SERVE AS BENCHMAM especially notable, as the bar - • ^ -,�.,..,,. prr.nr wiww+_..wwio-mMuwnw.m.•. MarnmH�HeMa_ Nan Wa Um a.ww.. iwxw,Imn4n... i.N,rN Oau1M� was set high in selecting •-+..�n. Q..(nbY...l]4euW IWyW_ imnn. benchmark cities cities that have IbTM.wFbun.lLLVE�u.tl NnMo —I... .•.( well-earned reputations for . being exceptionally managed. - 31 - i'33 -3�'- ATTACHMENT 91 am . . PRESERVATION OF CRITICAL SERVICES AND FISCAL HEALTH Grant Management. The City has an adopted grant management policy that: 1. Sets forth the importance of grant programs in accomplishing City goals and objectives. 2. Establishes general concepts and framework for seeking and managing grant programs. 3. Identifies roles and responsibilities in managing grant programs. 4. Establishes criteria for evaluating the benefits and costs of grant programs. 5. Sets forth the City's policy in complying with federal Single Audit Act requirements. General concepts in the policy include: 1. The aggressive pursuit of grant funding from federal, state and other sources, but only when they are in clear alignment with identified City goals and objectives. 2. The focus on grant projects with one-time costs and avoidance of grants that might aggravate the City's fiscal position with ongoing commitments once the grant funding is no longer available. 3. Seeking grants only where sufficient staff resources are available to effectively administer the program in compliance with grant requirements and successfully perform the grant workscope. Under these guidelines, the City has been very successful in garnering grant funds to achieve City high-priority goals. Recent examples where grant funds fully or partially funded key priorities include open space preservation, transit system improvements, the -widening of Orcutt Road and Santa Barbara Streets, Madonna Road paving and dispatch center/radio system improvements. Continued Support of Pension Reform. In March 2005, the Council adopted a resolution supporting pension reforms developed in cooperation with the League of California Cities Task Force, CalPERS and public employees unions, while expressing opposition to Assembly Constitutional Amendment 5 (ACA 5) and other similar"quick fix" initiatives. Reform recommendations under consideration by the League at that time included changes to pension benefit levels, improved management of rate volatility, and assurance that reforms are actuarially sound. CalPERS has since implemented rate stabilization policies that spread market gains and losses over 15 years. This "smoothing" of investment gains and losses helps reduce rate fluctuation. For example, CalPERS achieved double digit gains in each of the four years leading up to the 2007/2008 fiscal year. Through this smoothing of investment returns, previous positive returns will lessen the impact that current investment losses will have on employer contribution rates in 2009-11. The League of California Cities Task Force continues to analyze issues and possible solutions. It has been aided by the work of an actuary engaged by the League, who is helping the Task Force analyze short and long-term costs or surveys as they consider various scenarios. Risk Management. In 2003, the Council adopted a resolution approving membership in the general liability program of the California Joint Powers Insurance Authority (CJPIA). In 2004, the Council adopted a resolution approving participation in the workers' compensation program of the CJPIA. Prior to 2003 and 2004, the City was a member of the Central Coast Cities Self Insurance Fund (CCCSIF) for general liability and workers' compensation. CCCSIF was comprised of eleven Central Coast cities that did not share risk, but instead, joined together to share administrative costs and to obtain excess workers' compensation and liability coverage over a set amount per claim occurrence that is"self-insured". Unlike the CCCSIF, where members do not share risk, membership in CJPIA means sharing risk with other member agencies. However, the risk is shared among a large number of agencies, who have common goals of risk avoidance, claims control and transfer of risk in order to eliminate or reduce exposure. By following proven -32- 93 '.3 ATTACHMENT MAJOR GOALS PRESERVATION OF CRITICAL SERVICES AND FISCAL HEALTH practices of risk management, member agencies assist each other in keeping claim costs down. By sharing risk, the cost to an agency for a year with significant claims experience is somewhat mitigated and spread out over a four- year period. Each member's cost of coverage is determined by its exposures and its actual loss experience. A premium deposit is made at the beginning of the fiscal year and retrospective adjustments are made based on the claims following the close of the coverage period. Retrospective adjustments are made over a four year period. In addition to pooled risk, the City benefits greatly from the resources and expertise available through membership in the CJPIA. The Authority's training program's mission is to provide innovative risk management solutions for public agency partners. The City participates in numerous CJPIA training sessions each year. In addition, the CJPIA also periodically conducts a proactive risk management evaluation. The risk management evaluation provides a personalized inventory of the issues each member faces and is designed to help members identify potential liability, property and workers' compensation issues on an individual basis. Recommendations assist members in taking risk control, risk avoidance or risk transfer Liability/Propertyand Workers Compensation Costs:Last 15 Years actions to limit future losses. $2,500,000 $2,250.000 As shown in the sidebar chart, the $2,000,000 City has seen its liability costs $1,750,000 stabilize and workers' compensation $1,500,000 costs decrease since joining the $1,250,000 CJPIA. $1,000.000 $7.50.000 KIM Fiscal Policies: Human Resources $500,000 Management. Efficient and $250,000 ". effective management of the City's $0 t t I, human resources has long been a part of the City's fiscal policies. Fiscal Year ending Human Resources Management 13 Compensation policies include guidelines in Liability/Property 0 Workers managing overall staffing costs, including the definition and use of temporary staffing, independent contractors, and overtime. The policies include close examination of all requests for additional regular positions including the evaluation of the necessity, term, and expected results, the costs, the ability of private industry to provide the proposed service, and additional revenues or cost savings that may be realized. Staff has drafted a policy on the Use of Volunteers within the City and is working on more extensive guidelines regarding the use of overtime, including a cost benefit analysis and encouraging other low cost alternatives when feasible. Compensation Philosophy. In 2007, the Council established a compensation philosophy under which the City is committed to providing competitive compensation as part of an overall strategy of attracting and retaining highly qualified employees who exemplify the City's organizational values. The City's compensation philosophy is based on both internal and external considerations, including internal relationships, the relative labor market, fiscal health, and other relevant factors such as: unforeseen economic changes, natural disasters, states of emergency, changes in City services, changes in regulatory or legal requirements, reliable local private sector compensation data, and community acceptability. The adopted philosophy established a consistent methodology for determining whether or not the City's compensation programs are competitive. In addition, the philosophy establishes a broad framework for the Council, citizens, and employees, to guide and understand decisions affecting pay and benefit plans. The -33 - B✓ X13 ATTACHMENT MAJOR CITY GOALS PRESERVATION OF CRITICAL SERVICES AND FISCAL HEALTH philosophy retains maximum flexibility for elected decision-makers, taking such factors as fiscal health and community acceptance into consideration. The philosophy also states that at least every five years, the City will evaluate its compensation structure, programs, and policies to assess market competitiveness, effectiveness, and compliance with state laws. Adjustments to the compensation structure may be made as a result of this periodic evaluation and will be done through the collective bargaining process, if applicable, or other appropriate Council-management processes. Formal Organizational Reviews on an Ongoing Basis. Over the years the City has engaged in formal efforts to analytically and objectively review City operations on an ongoing basis to ensure high service levels, performance and efficiency. Following the maxim the best way to eat an elephant is one bite at a time, the City's past approach was not to complete a single, organization-wide assessment, but to focus on one or two major functional areas (such as public utilities, police protection, development review and information technology) per year. The need for this type of review is included in the City's Productivity Policy (page B-26 of the 2007-09 Financial Plan), which calls for"periodic formal reviews of operations on a systematic,ongoing basis." These organizational reviews have varied from comprehensive strategic or master plans, conducted by, consultants, to other less formal efforts, such as benchmarking of "best practices" reviews completed by City staff. Regardless of the approach, the City has periodically supported organizational reviews and found them to be beneficial in identifying new and innovative ways of doing business and organizing work to more effectively and efficiently provide services. At one time, the human resources operating program budgeted for ongoing organizational reviews. The human resources operating program no longer has funds allocated for this purpose and in recent years, individual departments have budgeted for such reviews. Ongoing formal reviews help ensure that the City is focused on key priorities and provide the foundation for long-term planning. Organizational reviews can focus on core services or efficiencies, as well as group effectiveness. For example, in 2006, the Parks & Recreation Department contracted with a consultant who conducted a culture assessment that examined how "things got done" in the department. Recommendations focused on linking daily priorities to the overall mission of the department and aligning internal systems, such as communication, feedback, rewards and budget, to support achievement of the priorities. The "shelf-life" of an organizational assessment can be several years as the focus is strategic, not tactical. Other Human Resources Programs Supporting Fiscal Health and Productivity. Other programs in place supporting this goal include: I. Organizational values were developed by employees in the late 1990s. These organizational values, which include stewardship, ethics and promoting public trust by using City resources wisely, are reinforced by many human resources programs. For example, management employees receive feedback on how they demonstrate the organizational values as they serve the citizens during their annual performance evaluations. Management salary increases are based on an employee's consistent demonstration of the organizational values as well as achievement of established goals and objectives. A management employee's goals and objectives are linked to the City Manager's goals and in turn, to goals set by Council and ultimately the community through the financial planning process. 2. A fundamental principle of improving efficiency is to encourage life long leaming. The City promotes continual learning to all employees by offering low cost training through its employee university. The City has also partnered with CJPIA, a legal consortium, Cuesta Community College, and the Professional Association of City Employees (PACE) to provide low cost, convenient, and applicable training to City -34- L3,3 ATTACHMENT ' MAJOR CITY GOALS PRESERVATION OF CRITICAL SERVICES AND FISCAL HEALTH employees. In addition, the City offers a tuition reimbursement program further encouraging employees to pursue advanced degrees through accredited institutions or work related courses. 3. Council received a report and presentation on succession planning in October 2007. The presentation was made by then Palo Alto City Manager Frank Benest, who emphasized the importance of succession planning, in mitigating the "brain drain" that many other organizations face as baby boomers retire. San Luis Obispo City demographics were presented indicating approximately one third of the City's workforce would be of retirement age or older in the next five years. Without a more formalized succession planning effort the City would also be at risk of losing valuable institutional knowledge. Succession planning is the ongoing process of identifying, assessing, and developing talent to ensure employee continuity. Succession Planning efforts in 2008 were primarily focused on raising an awareness regarding succession planning, gathering feedback on existing programs, and improving the quality of professional development. The Succession Planning Steering Committee formed subcommittees in the areas of communication, skills, retention and recruitment, and research and resources. A monthly Succession Planning Newsletter keeps employees informed of the committees' activities and progress. Accomplishments include: conducting an employee survey that provided feedback on current programs and practices reviewing and updating the Tuition Reimbursement program; providing "development conversation" training; implementing NEOGOV, an on-line recruitment and application system; and partnering with Cuesta Community College to provide customer service and management and supervision academies. 4. The Employee Suggestion Award Program is designed to encourage employees, or teams of employees, to take an active and integral part in improving, through efficiency and effectiveness, City operations. Employees, whose suggestions have been reviewed by the Suggestion Review Committee and approved by the City Manager, are eligible to receive a cash award equal to ten percent of the first year's estimated savings. Eligible suggestions must accomplish one or more of the following: a) saving of time, money, labor, materials, or supplies; b) an improvement in the quality of a specific public service; c)an improvement in methods and procedures which results in increased efficiency; and d) the elimination of unnecessary and costly procedures which results in time, labor, or material savings. CONSTRAINTS AND LIMITATIONS These include: 1. Uncertainty regarding the outcome of key factors that affect the City's fiscal health such as the depth and duration of the economic downturn*(when will it bottom-out and how fast will it recover) and the ongoing threat of added State takeaways. 2. Significant improvements in productivity usually result from fundamental changes in the way of doing business. This typically involves implementing more robust enterprise systems; overhauling web portals and using automated work flow systems and other information technology related upgrades. Significant financial and staff resources would be required to do this, which are not available at this time. Accordingly, the extent to which efficiencies will be realized is constrained by the systems available within existing resources. 3. The speed in which changes can be implemented is limited by the capacity of the organization to process and accept them. 4. The City's obligation to meet and confer with labor organizations regarding changes in wages, hours and working conditions limit compensation. 2 Ll - 35 - 2� ll ATTACHMENT PRESERVATION OF CRITICAL SERVICES AND FISCAL HEALTH STAKEHOLDERS The stakeholders in this program are both internal to the organization and external: 1. Community members as a whole have a vested interest in the long-term fiscal health of the City and preservation of critical resources. 2. Internal stakeholders include all City employees and labor organizations. Administration, Human Resources and Finance & Information Technology will be active in the development and oversight of policies and programs affecting this goal. However, every department will be involved in how the work scope is implemented. ACTION PLAN I. Implement Organization-Wide Savings Recommended by Community Members and City Employees. During the goal-setting process, a number of cost saving recommendations from community members were received. Administration also received 700 cost saving ideas from employees as part of our internal budget- balancing process. Many of these ideas, while not subject to quantification at this time, reflect good stewardship and provide organization-wide cost saving opportunities. These include the following, which will be implemented either by departments or on an organization-wide basis, wherever it makes sense to do so. • Improve sharing of resources: vehicles, • Increase use of cooperative purchasing for equipment and supplies. lower prices due to economies of scale and • Reduce energy consumption. reduced administrative costs. • Increase use of scanning and"e-documents" • Continue to reduce use of purchased via email and the web to reduce printing and drinking water. postage costs. • Continue encouraging cost saving ideas • Increase use of two-sided printing. from employees; consider supplementing • Evaluate all maintenance and operation recognition programs. contracts for cost saving opportunities. • Reduce overtime costs and use of temporary • Defer vehicle replacements. staffing. • Review all travel,training, memberships • Evaluate opportunities for joint-service and subscription costs for reduction partnerships, such as those already in place opportunities that will not adversely affect with Cal Poly for fire, water, sewer and productivity; and look for more cost- transit service; and the California Joint effective ways of providing training, such as Powers Insurance Authority for general webinars and cooperative on-site training liability,property and workers' with other agencies. compensation coverage. • Lengthen technology replacement cycles where it will not adversely affect system reliability and performance. • Increase use of volunteers and interns. • Review office supplies purchases for reduction opportunities,especially in light of technology changes. 8342 - 36- ATTACHMENT MAJOR CITY GOALS PRESERVATION OF CRITICAL SERVICES AND FISCAL HEALTH 2. Continue to Closely Review and Monitor the City's Fiscal Situation. The City will continue to issue audited annual financial statements on a timely basis prepared in accordance with GAAP, strive for unqualified audit; and meet GFOA standards; and continue to issue timely and meaningful interim reports on the its fiscal situation. The City's annual financial statements currently provide ten-year operating cost trends by function; this will be expanded to include ten-year trends by type, with a focus on staffing cost trends for salaries and benefits. 3. Implement Budget Balancing Strategies Adopted in the 2009-11 Financial Plan. It is likely that the Council will adopt a number of budget balancing actions as part of the 2009-11 Financial Plan. These are likely to include operating budget reductions (including staffing decreases that may result in lay-offs and changes in operations), CIP reductions, selected new revenues and compensation adjustments. Staff will take the follow-up actions needed to implement these, including meeting and conferring with labor associations where applicable; and closely monitoring progress to ensure the achievement of intended results. 4. Resume "Best Practice Reviews." Staff will complete one to two significant internal control areas annually using in-house teams. As noted above, candidates for 2009-11 include compliance with the Fair Labor Standards Act, parking meter collections, construction change orders, fee collections, petty cash and bus fare collections. 5. Review and Update Key Infrastructure Plans. These guide key infrastructure maintenance efforts by setting service delivery policies, standards and practices; and recommending resource allocation levels. Accordingly, periodic review is essential in ensuring that these are achieving intended results. For example, the current Pavement Management Plan was adopted in 1998. After ten years of operation, a comprehensive review of this plan is warranted. There may be other plans that should also be reviewed in 2009-11. 6. Continue Supporting Pension Reform. This continues to be an issue for the League and part of the City's legislative work program. 7. Implement Ongoing "Benchmark" Analysis. Using the framework set forth in the 2006 analysis, staff recommends "benchmarking" key City financial and outcome measures with comparable communities every two years. 8. Update the Property Management Manual. The City's Property Management Manual was adopted in 1986 and has only received limited review and update since then. With the recent adoption of Charter amendments regarding the disposal of surplus real and personal property, staff recommends a comprehensive review of the property management policies and procedures, including property acquisition, sale and lease. 9. Continue Evaluating Contracting-Out Opportunities. As noted above, the City already makes extensive use of contracting-out in delivering services to the community. However, staff will continue to evaluate both during the budget process and throughout the year, added opportunities for cost savings through contracts with the private sector, not-for-profit organizations and other government. This includes considering even greater use of existing contracts, such as janitorial and landscape maintenance, as well as considering new service areas, such as golf course operations and maintenance. 10. Maximize Grant Funding Opportunities, Including "Stimulus Package." Staff will continue to look for grant funding opportunities that are in clear alignment with City priorities. This includes aggressively pursuing"Stimulus Package"funding opportunities. - 37- ATTACHMENT MAJOR GOALS PRESERVATION OF CRITICAL SERVICES AND FISCAL HEALTH 11. Continue Succession Planning Efforts. Succession planning efforts will continue through human resources staff and the Succession Planning Steering Committee. Further work in the areas of core competency identification, performance management, knowledge transfer, professional development and identification of a learning management system is envisioned. Competencies are a combination of the knowledge, skills, abilities, and attitudes necessary in order to be successful in a job. The focus moves from identifying tasks and evaluating whether those tasks are completed, to placing value on how work is performed; thus encouraging efficiency, minimizing redundancy, and maximizing quality and service. However, much of what public servants do is based on decisions made and input received by previous Councils, advisory bodies and citizen group. Therefore, a continued focus on knowledge transfer is essential. A more formal process of identifying institutional knowledge and the best way to"relay" it to future employees is needed. Staff will continue efforts in the area of professional development including leadership skills. A learning management system will reduce the amount of administrative support required to announce training sessions, track attendees, gather feedback and register employees for sessions. In addition, it will reduce the amount of time individual departments spend ensuring employees have met regulatory requirements through training and allow the City to search for employees with specific skills to assist on projects. 12. Continue to Develop, Review. Modify and Implement Human Resources Policies in Support of Fiscal Health. Human Resources and Parks & Recreation staff have been reviewing the use and compensation of temporary employees in recent months. Staff is working on recommendations to the City's Temporary Employee Policy, last modified in 2002, as well as developing guidelines to ensure placement of temporary workers at appropriate wage ranges with internal consistency. Use of volunteers and student interns will likely increase and guidelines were recently drafted to clarify the role of volunteers and student interns. In the next few months, these guidelines will be reviewed and implemented to ensure consistency, reduce potential liability, and maximize efficiency wherever possible. 13. Review Memorandum of Agreements. The City has five represented employee groups. Terms and conditions of employment are negotiated with each group and formalized in a memorandum of agreement (MOA). A student in the Public Policy graduate program at Cal Poly will assist human resources staff in conducting an in-depth review of each memorandum of agreement, comparing and contrasting MOA articles to external benchmarks and recommending potential improvements. Although any changes to MOA's are subject to negotiations with employee groups, the analysis will be strategic in nature and examine longer term possibilities for change. 14. Resume Formal Organizational Reviews on an Ongoing Basis. During the "non-operating budget balancers" brainstorming process, many departments provided input regarding ways to increase efficiency and reduce waste. These suggestions are being explored and implemented by departments on an ongoing basis. However, brainstorming alone will not result in improving efficiency and reducing costs. Structured organizational reviews conducted by external consultants can systematically address operating performance, cost reductions, increased reliability, improved cycle time, reduced hand-offs and downtimes, while at the same time identifying opportunities to improve customer service. Consultants help ensure objectivity; a thorough assessment and fresh look at current practices; provide a broader perspective of both private and public sector best practices; the added resources needed to perform this type of review on a timely basis in light of day-to-day work loads; and independent recommendations that facilitate break-through performance. As proposed, it is likely that two to three major functional areas would be reviewed in 2009-11. As examples, five potential candidates include: f33-#y -38- ATTACHMENT MAJOR CITY GOALS PRESERVATION OF CRITICAL SERVICES AND FISCAL HEALTH a. Organization-wide Scan. This would provide a focused overview of the City's organizational structure, policies and management practices, quickly assessing key areas of strengths and weaknesses. It may make sense to do this"scan"first in identifying priorities for detailed reviews. b. Development Review. This City's development review function, which crosses department lines (planning, building, engineering and fire,), was last reviewed on a comprehensive basis 15 year ago. Likely fee increases in this area, community and developer interest in this function, and slow down in development activity provide an excellent opportunity to take another close look at this function. c. CIP Project Management. Given the significant potential for fluctuating workloads, this review would take a detailed look at design, bid administration and inspection resource requirements, including an analysis of the optimal balance between staff and contract resources, opportunities for workflow streamlining and "metrics" that can be used in the future for measuring resource needs as work loads change. d. Park Maintenance. This function was also last reviewed on a comprehensive basis 15 years ago. This review would take a fresh look at the programs organizational home, which is currently in the Public Works Department, versus other options, such as the Parks & Recreation Department; and the current mix of contracting-out versus in-house staff. e. Human Resource Programs and Practices. The most efficient, highest-performing organizations achieve alignment between their strategic objectives and the culture of their organization. Human Resources programs and systems such as recruitment and retention, classification and compensation, training and development, performance management and recognition shape the culture and impact performance. Given the organizational challenges ahead of us, review of these programs to ensure they are intentionally supporting and reinforcing desired behaviors and outcomes is timely. The following summarize key tasks and due dates. 1. Implement organization-wide savings recommended by community members and City employees. Ongoing 2. Continue to closely review and monitor the City's fiscal situation. Ongoing 3. Implement budget balancing strategies adopted in the 2009-11 Financial Plan. Ongoing 4. Review and update as appropriate key infrastructure maintenance plans. a. Present Pavement Management Plan update to Council. 9/10 b. Review other plans for update as appropriate and present the results to the Council. 6/11 5. Resume"best practice reviews"that focus on one to two significant internal control areas annually that Ongoing typically cross department activities. 6. Continue supporting pension reform. Ongoing 7. Implement ongoing"benchmark"analysis of key financial and outcome measures with comparable 11/10 communities every two years. 8. Update the Property Management Manual: comprehensive review of our property management policies 12/09 and procedures, including property acquisition,sale and lease. 9. Continue evaluating contracting-out opportunities for cost reductions or service improvements. Ongoing 10. Maximize grant funding opportunities, including"Stimulus Package." Ongoing 11. Review Memorandums of Agreements. Ongoing -39 83—`, g ATTACHMENT MAJORCITY-GOALS PRESERVATION OF CRITICAL SERVICES AND FISCAL HEALTH 12. Continue succession planning efforts. Ongoing 13. Continue to develop,review,modify and implement Human Resources policies in support of fiscal Ongoing health. 14. Resume formal organizational reviews on an ongoing basis. a. Identify functional areas for review,prepare request for proposals and present for Council approval. 11/09 b. Evaluate proposals,select consultant and begin work. 2/10 c. Complete fust review and present results to the Council. 8/10 d. Completed second review and present results to the Council. 2/11 KEY ASSUMPTIONS 1. Budget and fiscal policies and plans that have served the City well in the past will remain in place and continue to be effectively implemented. 2. This work program cannot address in its entirety the unprecedented economic uncertainty the world is facing today. However, it does consider the need to be even more prudent, efficient and to retain flexibility in responding to changes circumstances. 3. Information technology infrastructure investments will be made to support efficiencies through the effective use of current and future technology opportunities. 4. The City will work constructively and collaboratively with employee associations, adhering to its obligation to meet and confer on matters affecting wages, hours and working conditions. 5. Any significant organizational change is difficult and recommended improvements in productivity as well as other cost reduction strategies will need to be managed using fundamental organizational change principles, including: meaningfully engaging employees in developing solutions to create as much buy-in as possible and surface a broad range of ideas; communicating extensively and frequently the need for change; listening and acting upon input from employees; celebrating successes; and broadly sharing"lessons learned." 6. Consultant services and related resources will be necessary in providing insights and road maps in achieving efficiencies in some cases. Costs are based on the lower range of similar work in the past. Costs will vary based on the scope of the review and consultant selected. 7. We will use the same consultant for the first and second year reviews. However, depending on the functional areas selected for review, different consultants may be selected if the areas of expertise needed are significantly different. 8. Implementing recommendations identified in organizational reviews may be subject to meet and confer with represented employee groups. RESPONSIBLE DEPARTMENT The Finance & Information Technology will take the lead role for this work program with significant support from Human Resources and Administration. / 7 40 �� ' ATTACHMENT MAJOR CITY GOALS PRESERVATION OF CRITICAL SERVICES AND FISCAL HEALTH FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Along with significant staff commitment from Administration, Finance & Information Technology, Human Resources and operating department staff, $37,500 will be needed annually to complete one comprehensive assessment of a major functional area per year. Cost Summary Operating ProgramCapital Improvement Plan 11 2009-10 2010-1 1 2009-10 1 2010-11 Consultant Services: Organizational Reviews 37,500 37,500 Total $37,500 $37,500 $0 $0 Funding Source: General Fund GENERAL FUND REVENUE POTENTIAL There is no direct potential for added General Fund revenues with this work program. However, successful implementation will improve the City's ability to deliver critical services to the community. OUTCOME--FINAL WORK PRODUCT Development and implementation of ongoing programs, plans and policies for preserving critical services, implementing long-term productivity improvements and cost-reduction strategies, will help maintain the City's long-term fiscal health. -41 - ATTACHMEN' LAND USE AND CIRCULATION REVISIONS OBJECTIVE Initiate a focused revision to the Land Use and Circulation Elements. DISCUSSION Workscope Summary As part of the 2007-2009 Financial Plan work program, the Council reviewed options for updating the Land Use and Circulation Elements, ranging from comprehensive updates to more focused updates. These options included: (a) $1,400,000 for comprehensive updates to both Elements, (b) approximately $850,000 to perform a more "surgical" update to the Land Use and Circulation Elements; (c) approximately $200,000 to update the circulation model currently under development; and (d) not consider amendments to the General Plan Elements until the 2011-2013 Financial Plan. While the Council supported the more surgical option "c" above, even this option appears expensive given the fiscal challenges this City is now facing. As part of its goal-setting, Council identified this project as an "other important goal", therefore the proposed work program for this goal is directed more toward making progress on updating these policy documents, but in smaller(yet meaningful)phases. The proposed work scope for Phase I would include the following key elements: 1. Upgrade the traffic model to enable forecasting of circulation impacts. 2. Evaluate the effectiveness of existing policies and programs of the Circulation and Land Use Elements. 3. Scope the extent of revisions required to address outdated sections of the Land Use and Circulation Elements. 4. Evaluate Sphere of Influence areas and develop work programs if necessary for these areas. 5. Identify new policies and programs that may be warranted to address changing community needs or legislation. Phase 2, anticipated for 2011-2013 would include initiating the actual updates of both the Land Use and Circulation Elements Existing Situation The Land Use and Circulation Elements of the City's General Plan have not been significantly updated since their adoption in 1994, though the Land Use Element has been amended several times annually. Update of the elements has been identified as an `other important goal" in the upcoming 2009-2011 Financial Plan. Project Work Completed The Council funded an upgrade to the existing traffic model in the 2007-09 Financial Plan. This conversion of the model to a multimodal based model has begun and the first phase (converting the base year scenario) is expected to be complete in July 2009. Additional work to complete the future land use forecasts is still necessary to complete the full traffic model upgrade. -42- 33-�T ATTACHMENT OTHER IMPORTANT OBJECTIVES LAND USE AND CIRCULATION REVISIONS WORK PROGRAM CONSTRAINTS AND LIMITATIONS As noted in earlier staff reports, updates to the Land Use and Circulation Elements, focused or otherwise, will be difficult without adequate funding and staffing. This project comprises Phase I of the update and involves many labor-intensive update tasks. Phase 2 will follow in the next two-year budget, and entail preparation of revised draft Land Use and Circulation Elements and taking these through the public hearing process. A key prerequisite of Phase 1 will be working on the traffic model, currently under development, to transform it to one capable of forecasting circulation impacts. This will be especially critical as different land use and circulation patterns and assumptions are evaluated. Completion of the upgrade to the traffic model can be completed by a consultant or, if staff is supplemented by contract staff to conduct normal workload activities, the model can be upgraded by existing staff. However, either option will cost from $125,000 to $200,000 over the next two years of the Financial Plan. Significant resident and business community involvement is anticipated. This will require a substantial amount of public outreach to ensure an accessible, equitable process that encourages input from a wide spectrum of stakeholders. In addition, current City efforts to implement new State law regarding environmental sustainability, such as SB 375 and associated "sustainable communities' strategies", AB 32, CEQA changes, and direction from the Air Resources Board, may limit our ability to treat the project as focused revisions to existing programs and require a more comprehensive look at land use and circulation policies and programs developed in the context of statewide and regional directives. If, as part of staff evaluation of any proposed revisions, it is clear that an Environmental Impact Report (EIR) will be required, staff will return to Council at that time to present options for preparing an EIR or for postponing action until such time as a more comprehensive approach to updating the Land Use and Circulation Elements is feasible. STAKEHOLDERS Stakeholders include City residents, business and property owners, Chamber of Commerce, Downtown Association, Residents for Quality Neighborhoods, Cal Poly, Cuesta College, SLO Property Owners' Association, SLO Green Build, Air Pollution Control District, Regional Water Quality Board, California State Department of Fish and Game, neighborhood groups, Siena Club, Caltrans, County of San Luis Obispo,LAFCO, EcoSlo, San Luis Obispo County Bicycle Coalition, Airport Land Use Commission, Advisory Bodies, San Luis Obispo Coastal Unified School District, Union Pacific Railroad, public utilities, and the SLO Council of Governments. ACTION PLAN The timing associated with these tasks assumes some level of contract or intern assistance to backfill regular staff s current workload. 1. Recruit temporary or contract staff or consultant assistance for traffic model development. 7/09 2. Develop traffic forecast model. 6/10 3. Evaluate effectiveness of existing Land Use and Circulation Element policies and programs and 12/10 identify where changes should be considered. 4. Public outreach and input(throughout process). Ongoing -43- 133— ATTACHMEN OTHER IMPORTANT OBJECTIVES LAND USE AND CIRCULATION REVISIONS 5. Identify and develop of strategic revisions to the Land Use Element and Circulation Element where6/11 sections have been superseded. 6. Produce work program for Sphere of Influence areas and identify new programs that may be 6/t 1 warranted to address changing legislation. 7. Conduct traffic model assessments of various land use modifications for future year forecasts and 6/11 strategic revisions to the Land Use and Circulation Elements. KEY ASSUMPTIONS Work to complete the traffic model update and strategic review of the Circulation Element can be accomplished using existing staff if temporary or contract staff can be used to backfill some of their current workload. Of the two alternatives (temporary staffing assistance versus consultant help), the option of using temporary staff to backfill current staff workload is the least expensive option and impact to the General Fund. It is assumed that adequate staffing and resources will be available to do the work associated with the Land Use Element. Community Development staff will be available to provide support to the program once the Housing Element, Orcutt Area Specific Plan, and Broad Street Corridor Plan efforts are complete and depending on other Council priorities. Major update efforts for policy and program changes to both Land Use and Circulation Elements will occur outside of the 2009-11 Financial Plan timeframe; however, minor revisions will occur during the 2009-11 Financial Plan. However, if the environmental review associated with the minor revisions triggers the need for an Environmental Impact Report, the cost of preparing it would argue against trying to do isolated revisions and would instead, due to economies of scale, be more appropriate when paired with a full update to both Circulation and Land Use Elements. RESPONSIBLE DEPARTMENT Community Development and Public Works will be the lead departments. However, support from, and collaboration with, other departments will be essential. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Even though the proposed strategy attempts to be very conservative, it will take some staff time and assistance from contract staff or consultants to achieve this goal. Staff resources from Community Development and Public Works Departments will be required for the life of this project. If the project is funded to enable contract staff to perform existing assignments thus liberating existing staff to develop the forecast traffic model, the cost to develop the model will be much less (approximately $125,000 instead of $200,000). Aside from the traffic model enhancement, it is anticipated that approximately 1/2 FTE will be required (split between Public Works and Community Development departments) to make progress on the tasks listed that are not related to the traffic model. -44- 153-.sem Ah ATTACHMENT LAND USE AND CIRCULATION REVISIONS Cost Summary Operating Programs Capital Improvement Plan 2009-10 2010-11 2009-10 2010-11 Traffic Model &Circ Programs Evaluation 100,000 25,000 Newspaper ads,meeting facilitation,temporary staff 20,000 20,000 Total $120,000 $45,0001, $0 $0 Funding Sources Operating Programs Capital Improvement Plan 2009-10 2010-11 2009-10 2010-11 Transportation Impact Fee 35,000 8,750 General Fund 85,000 36,250 Total $120,000 $45,000 $0 $0 The costs listed in 2009-10 and 2010-11 are for contract assistance to backfill regular staff in order to develop the forecast traffic model and to conduct the existing programs evaluation. In addition, outreach efforts will require increased costs related to large newspaper ads, mailers, and meeting facilitation for community preference responses. Upgrading the traffic model is an eligible expense of the Transportation Impact Fee program. It is proposed that the final completion of the traffic model work charged to the TIF fund be done on a 35%/65%basis with the General Fund because that is the ratio (35% for new trips) used in the TIF program to have new development fund the projects associated with their growth. There will most likely be out-year costs in 2011-13 to continue with policy and program updates to the two General Plan elements. Whether the update can remain focused will rest largely on whether potential significant environmental impacts are identified with proposed changes. In the event an Environmental Impact Report (EIR) is triggered, staff recommends pursuing a full update of the Land Use and Circulation Elements. The costs associated with an EIR are substantial and will not vary much between a project that proposes minimal changes and one that involves substantive ones. GENERAL FUND REVENUE POTENTIAL It is unlikely that there will be any General Fund revenue enhancements as a result of achieving this goal. It may be possible that Proposition 46 funds will become available during the latter pan of the financial plan period to assist with funding for a general plan update. If those funds do become available, staff will return to Council to amend the scope of work. OUTCOME—FINAL WORK PRODUCT The final work products will be: 1. A traffic model that is capable of forecasting multi-modal scenarios and non-vehicular trip project benefits. 2. A report that evaluates the effectiveness of current policies and programs in the Circulation and Land Use Elements and identifies new programs that may be required to address legislative changes. 3. Several "clean up"amendments to the Land Use and Circulation Elements. B3-5/ -45 - ATTACHMENT OPEN SPACE PRESERVATION OBJECTIVE Continue efforts to acquire, preserve, and protect open space, and develop a master plan for City-owned agricultural land at Calle Joaquin. DISCUSSION Measure Y Relationship; This major City goal for open space acquisition and preservation directly supports a top priority for the use of Measure Y funds. American Recovery and Reinvestment Act Relationship: The Natural Resources Program has identified approximately $965,000 in ARRA funds that could be applied to three recreational and environmental enhancement projects. Workscope Summary The proposed scope of work includes elements in two distinct areas: 1. Continued Open• Space Acquisition, Preservation, and Protection. The scope of work for open space acquisition, preservation, and protection will include: a. Acquisition of additional open space from outright fee title purchase, dedications of easement or fee interest through development approvals, and the donation of easements or land to the City. b. Preservation and protection efforts on City-owned open space lands and along the City's waterways, guided by the City's existing planning documents and regulations, regular duties of the Natural Resources Manager, City Biologist, and Rangers, coordinated volunteer efforts, and requirements of various mitigation projects. 2. Develop a Master Plan for City Owned Agricultural Land. The scope of work for the Master Plan entails coordination with owners of lands in the Calle Joaquin area not presently owned by the City (but anticipated to be by the City's General Plan) but planned to remain in permanent agriculture or open space. Background The City's open space acquisition program has consistently enjoyed strong support in the community and from Council. While the program has had both"healthy" and "lean"years, open space preservation has always ranked among the community's highest priorities. This was evidenced during the Measure Y campaign and the community's consistent acknowledgement that the preservation of local open space is a top priority. As the program has grown, it has taken on a larger scope. In addition to leveraging open space acquisition funds and development conditions into proper improvements within or upon open space lands, the Program is also responsible for natural resource management for City-owned open space lands. This was evidenced in 2000 with the addition of the City Biologist to the Program. Also in that year the City's mitigation programs, which up to that time were handled by individual departments, were consolidated into the Natural Resources Protection Program. In 2002, the Council adopted a set of uniform planning rules for City-owned open space lands, contained within the document Conservation Guidelines for Open Space Lands of the City of San Luis Obispo. Since that time, -46- ���� - ATTACHMENT OTHER IMPORTANT OBJECTIVES OPEN SPACE PRESERVATION the Council has formally adopted five Conservation Plans, which spell out a series of actions for the proper recreational development, use, and habitat protection of those open space lands. Since its inception in 1996 the Natural Resources Protection Program has expended a total of$3,196,400 in General fund monies on acquisition of open space lands. These funds have been matched by a total of $6,557,100 in other City funds and outside funding support. An additional $2,358,000 in value has been obtained through donation of land or discounted sales of land. Finally, the City Water Reuse Program and other grants have contributed $1,675,000 for mitigation and other environmental restoration projects, including several important fish passage projects on San Luis Obispo Creek and Coon Creek near Montana de Oro State Park.. The Natural Resources has thus obtained a total value of$13,786,500 in land and environmental enhancements since 1996. Existing Situation I. Continued Open Space Acquisition, Preservation, and Protection. Currently, the City holds fee title to approximately 3,000 acres of land classified as `open space" and an additional 3,150 acres of land held under easement classified as "agricultural" or "open space." These lands (with one exception) all lie within three miles of the City limits, and form portions of a permanent greenbelt boundary around the community. The fundamental purpose of the City's open space program is to secure as much as possible of this perimeter with a long-term goal of creating a permanent edge to the City's urban area. As the City's inventory of open space lands has increased, so too have its maintenance obligations for trails, fences, and habitat areas. At the present time, the City's Natural Resources staff(Natural Resources Manager and City Biologist) and Ranger staff (Senior Ranger and several part-time Rangers) have primary responsibility for this maintenance. Currently City residents and visitors enjoy the use of 10 open space lands ranging in size from about 30 acres to over 700 acres. These lands are open to the public for passive recreation (hiking and bicycling being the primary uses), and they contain a total of approximately 20 miles of recreational trails. Two to four new acquisitions by the program are anticipated for 2009-11, focusing primarily on completion of the Froom Ranch acquisition and on collaboration with the Land Conservancy of San Luis Obispo County on at least one conservation transaction benefiting both the City and Camp San Luis Obispo through use of Army Compatible Use Buffer (ACUB) program funds. The continued development of passive recreational uses consistent with natural resource protection on City-owned open space lands will also occur. The Johnson Ranch Open Space, South Hills Natural Reserve, Stenner Springs Natural Reserve, and the Bob Jones Bike Trail corridor will be the focus of such efforts over the next two years. To accomplish the primary objective of this goal, the Natural Resources Program will need: a. Funding for preservation of additional open space lands and easements. At present it is anticipated that the Froom Ranch option agreement will be successfully exercised by June 30, 2010. This open space acquisition project is anticipated to require$205,000 of new City funds (plus $55,000 carried over from 2007-2009, and $40,000 represented by the option payment), matched by $400,000 of State and other outside funding. The second acquisition planned is an easement in the area between the City of San Luis Obispo and Camp San Luis Obispo; where City monies can be used to match Federal monies appropriated to Camp San Luis Obispo to preserve undeveloped lands adjacent to the Camp. This program, known as the Army Compatible Use Buffer or ACUB Program, will provide $350,000 in 2009, with a match of $116,666 of City funds needed. Currently the City of San Luis Obispo and the Land Conservancy of San Luis Obispo County are actively pursuing three potential transactions that could utilize these funds. b3-0-47- _- ATTACHMEN0 OPEN SPACE PRESERVATION b. To continue to work with developers to include dedication of lands or easement interests to the City in upon the granting of development entitlements. At the present time there are at least five development projects with significant conservation components in various stages of consideration by the City of San Luis Obispo. These are: (1) Chevron Tank Farm; 332 acres of land, with 67 acres committed to urban uses and 265 acres committed to open space and recreational uses; (2) Orcutt Area; 230 acres of land with 128 acres committed to urban uses and 102 acres committed to open space and recreational uses; (3) County property near General Hospital and the Filipponi/Twisselman property to the east; 120 acres of land, with 15 acres committed to urban uses and 105 acres committed to open space uses; (4) Filipponi/Denbow property at the end of Calle Joaquin; 200 acres, with 40 acres committed to rural residential uses and 160 acres committed to open space uses; and (5) Gap property on Los Osos Valley Road; 31 acres, with 19 acres committed to urban uses and 12 acres committed to open space, agricultural, and recreational uses. Between them, these five projects have the potential to add approximately 645 acres to the City's greenbelt. Acquisition of this open space is contingent upon these projects being entitled and developed. c. To continue to encourage the outright donation of land or easement interest. The Natural Resources Manager maintains strong relations with potential donors of open space and has one such project in the South Hills area of 37 acres identified as a possible donation in 2009-11. d.To continue with maintenance,enhancement, and recreational trails development efforts,and to continue in a leadership role for the Waterway Management Program and Stormwater Management Program. Out of pocket expenses for passive recreational development—chiefly trails=is small, but is driven by the need to have environmentally appropriate and safe crossings of small streams and swales. Thus the primary cost is for building materials. The Natural Resources Program and City Rangers have become very adept at recycling materials for trail use or for use in enhancement projects such as planting programs, retaining walls, erosion control, etc. A small CIP from the 2007-2009 Financial Plan will be carried over to provide funds necessary for such materials. ,Funding from Zone 9 is available to support management activities affecting the City's waterways, which includes general supervision of vegetation management efforts by contractors such as the California Conservation Corps and others. Several major mitigation projects involve commitments of Natural Resources staff time and provide funding support; these include the Tank Farm Force Main project, the Los Osos Valley Road interchange project, and continued monitoring of completed projects such as the Damon-Garcia Sports Fields and Calle Joaquin road realignment. Natural Resources staff will also play a facilitator role in getting the new Stormwater Management Program running smoothly. 2. Develop a Master Plan for City Owned Agricultural Land. The City owns 13 acres of open space lands zoned for agricultural purposes adjacent to Calle Joaquin. Two other properties totaling 80 acres adjacent to the City property have also been designated for agricultural purposes in the City's General Plan. The primary objective of developing a Master Plan for this specific area's agricultural lands is to create a program that can 48 83 'JY ATTACHMENT OTHER IMPORTANT OBJECTIVES OPEN SPACE PRESERVATION encompass all three of the properties (93 acres) while accommodating different timelines and possible different land tenure for the three parcels. The Master plan will follow the City's Conservation Plan format and procedures, which include public workshops and a series of hearings before the Planning Commission, Park and Recreation Commission, and City Council prior to formal adoption of a plan. Following research on this topic a series of public input meetings will be held, then a Plan will drafted, followed by the review and consideration of the proposed Plan by various advisory bodies prior to presentation to Council. Staff believes that a series of meetings promoted to a wide variety of stakeholders will provide sufficient opportunities for public input and that a task force is not necessary. A likely outcome of this effort will be a plan for one or more agricultural facilities such as a community garden, research area and demonstration farm, as well as expansion of the Prefumo Creek riparian corridor. Extension of a bicycle/pedestrian trail between Calle Joaquin and Madonna Road will also be included as called for in City documents. To accomplish this goal, the Natural Resources Program will work with local interest groups, the adjacent landowners, and other interested parties to develop the Plan. Staff anticipates that the development of the draft plan will get underway this fall after initial research is conducted. The Plan is expected to require approximately one year to complete to allow for sufficient public input and research. Funding for the planning effort will be included in the Natural Resources operating budget. However, depending upon what plan elements are ultimately selected, implementation could entail significant new costs. Summary of Funding Sources Staff will aggressively seek grant funding for continued open space acquisition. Opportunities for federal funding through various economic stimulus programs will be constantly monitored and if appropriate to accomplish this goal they will be applied for. The present funding sources areas follows: Froom Ranch $300,000 State of California and $700,000 Private Donations _ $400,000 ACUB Eligible $116,666 Federal ACUB $416,666 Acquisition $350,000 Total 1 $416,666 1 $750,000 $1,116,666 CONSTRAINTS AND LIMITATIONS Constraints for open space acquisition and preservation include obtaining the necessary matching grant funding during the time period in which option agreements are valid or during the prescribed timeframes for the ACUB program. The Master Plan effort could be constrained by property owners not wanting to participate, and by the need to balance diverse and potentially divergent public input. STAKEHOLDERS Stakeholders include the citizens of San Luis Obispo, property owners, the tourism industry, interested agricultural parties, and Cal Poly. -49- B3 -s� ATTACHMENT OTHER IMPORTANT OBjECTIVES OPEN SPACE PRESERVATION ACTION PLAN Continued Open Space Acquisition,Preservation,and Protection I. Secure grant funding for the acquisition of Froom Ranch and take ownership. 6/10 2. Participate in planning efforts that at a minimum include: (a)the Chevron Tank Farm;(b)the Orcutt Ongoing Area;(c)County property near General Hospital and the Filipponi/Twisselman property to the east; (d)the Filipponi/Denbow property at the end of Calle Joaquin;and(e)the Gap property on Los Osos Valley Road. 3. Continue implementation of elements of City adopted Conservation Plans for: Johnson Ranch;South Ongoing Hills;Stenner Springs;and the Bob Jones Trail. 4. Continue efforts to improve informational signage,trail signage,trail conditions,and environmental Ongoing restoration programs. 5. Continue to participate and oversee City-sponsored or—directed mitigation projects, including the Ongoing Los Osos Valley Road interchange,Bob Jones Trail environmental enhancements,and various private mitigation and enhancement projects throughout the city. 6. Continue leadership role in management of the City's natural waterways through Zone 9 projects, Ongoing and provide administrative oversight to the Stormwater Management Program. Develop a Master Plan for City-Owned Agricultural Land 1. Conduct and complete research on various public and quasi-public farming models(e.g.,Fairview 10/09 Gardens). 2. Identify interested parties and groups. Hold a series of public input workshops to identify various 11/09 ideas for the use of City-owned agricultural lands. Develop an email group of participants and provide electronic information updates to this group. 3. Develop a project plan from initial public input that will outline the remainder of the process. Hold a 3/10 study session with Council to discuss project plan and public participation. 4. Complete public workshops on master plan for City-owned agricultural lands. Use public input as 6/10 the basis for drafting the master plan for the use of City-owned agricultural lands. 5. Draft a master plan for the use of City-owned agricultural lands. 9/10 6. Present draft master plan to: Stakeholders,Parks and Recreation Commission,and Planning 11/10 Commission. 7. Adoption of Master Plan by Council. 12/10 KEY ASSUMPTIONS Key assumptions for the Open Space and Agricultural Land Work Program are for: (1) continued staffing at the current level; (2) continued availability of outside crews such as the California Conservation Corps to undertake much of the waterway vegetation management effort these efforts need to be described above and; (3) continued _50- 133'5Z7 ATTACHMENT ' OTHER IMPORTANT MECTIVES OPEN SPACE PRESERVATION interest and availability of volunteer groups to assist in trail construction and other open space enhancement activities. RESPONSIBLE DEPARTMENT Administration will be responsible for the implementation of these programs. Natural Resources Manager, Neil Havlik, will be lead staff person involved in the project supported by the City Biologist. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL By approving the recommended City budget allocation to the Greenbelt Acquisition CIP, the financial resources deemed necessary and available from the City will be in place to successfully complete the two anticipated transactions. Staff time will be devoted to raising needed additional funding at the State level, and to a private fundraising effort. In addition, the current level of expenditure for contractors and consultants for the Natural Resources Program will be sufficient to cover costs of preparation of the Calle Joaquin site Master Plan. Cost Surnmary Operating Programs Capital Improvement Plan 2009-10 2010-11 2009-10 2010-11 Greenbelt Acquisition 1,072,500 Total I $0 1 $0 $1,072,500 1 $0 Funding Sources Operating Programs Capital Improvement Plan 2009-10 2010-11 2009-10 2010-11 General Fund 322.500 Army Compatible Use Buffer(ACUB)Program 350,000 Wildlife Conservation Board 400,000 Total $0 $01, $1,072,500 $0 GENERAL FUND REVENUE POTENTIAL It is unlikely that there will be any significant General Fund revenue enhancements as a result of achieving this goal. OUTCOME—FINAL WORK PRODUCT 1. The expected work final work products from the implementation of this goal include: Fee ownership of the Froom Ranch Open Space resulting in the addition of 310 acres of valuable open space lands at Irish Hills Natural Reserve. 2. A new conservation easement(held either by the City or by the Land Conservancy)on agricultural land near Camp San Luis Obispo. 3. Measurable increases in trail lengths usable to the public, and measurable improvements in conditions on the City's waterways, such as length of near-stream areas thinned and pruned, volume of debris removed, and amounts of exotic vegetation removed 4. A functional master plan for the farmland acreage at the Calle Joaquin site, which will be important in guiding long-term open space management at that site. -Sl - 83 � Ah ATTACHMENT • - - • - • : GREEN HOUSE GAS REDUCTION AND ENERGY CONSERVATION OBJECTIVE Adopt and begin implementing a plan to reduce greenhouse gas emissions and conserve energy for municipal operations and the community. DISCUSSION American Recovery and Reinvestment Act (ARRA) Relationship; At this time, the City has been informed that it is eligible to receive $199,400 in funds from the Energy Efficiency and Conservation Block Grant Program (EECBG)portion of the American Recovery and Reinvestment Act(ARRA) Federal stimulus package. Staff will submit an application for available funding for development of the Climate Action Plan since that activity is listed as an eligible activity for use of EECBG funds. If EECBG funds are awarded, no General Funds will be required. Workscope Summary The proposed work scope for this Major City Goal includes the following key elements: I. Researching climate action plans from other jurisdictions. 2. Analyzing the City's greenhouse gas emissions inventory to identify greenhouse gas (GHG) sources and opportunities for reductions. 3. Researching information available from International Council for Leadership and Environmental Initiatives (ICLEI)—Local Governments for Sustainability-to determine best available practices. 4. Identifying policies and programs already underway to address energy reductions. 5. Convening an internal stakeholders group to develop a strategy to address the areas of impact identified in the inventory. 6. Soliciting input from and participation by community groups. 7. Selecting a reduction goal for emissions. 8. Drafting a Climate Action Plan. 9. Guiding the draft plan through the public review process. Eadsting Situation. The City of San Luis Obispo signed the U.S. Mayors Climate Protection Agreement to advance the goals of the Kyoto Protocol through leadership and action. The California State Legislature subsequently adopted the California Global Warming Solutions Act of 2006 known as AB 32. This legislation establishes a cap on statewide greenhouse gas emissions to reduce emissions to 1990 levels by 2020. AB 32 establishes that the California Air Resources Board (CARB), the state agency charged with regulating statewide air quality, will implement the Act. Under AB 32, greenhouse gases are defined as: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. The regulatory steps laid out in AB 32 require CARB to: adopt early action measures to reduce greenhouse gases; to adopt mandatory reporting rules for significant source of greenhouse gases; and to adopt a scoping plan indicating how emission reductions will be achieved via regulations, market mechanisms and other actions; and to adopt the regulations needed to achieve the maximum technologically feasible and cost-effective reductions in greenhouse gases. Energy consumed by vehicles and buildings is a significant source of GHG emissions. The City General Plan's Conservation and Open Space Element contains policies and programs to achieve greater energy efficiency in both municipal operations and private development. Many of these policies and programs encourage positive -52- 53 58/ ATTACHMENT OTHER IMPORTANT OBJECTIVES GREEN HOUSE GAS REDUCTION AND ENERGY CONSERVATION steps toward "greener" development, but stop short of setting specific energy-saving requirements. The City also has on-going efforts related to solid waste reduction and recycling programs, trip reduction programs, water, materials and energy conservation. The Climate Action Plan would develop more specific energy-saving actions to augment our conservation efforts. In 2008, the Council joined ICLEI, Communities for Climate Protection, and committed the City to a five-step program: 1. Conduct a baseline emissions inventory and forecast. 2. Adopt an emissions reduction target for the forecast year. 3. Develop a local Climate Action Plan. 4. Implement Plan policies and measures. 5. Monitor and verify results. As part of joining ICLEI, the Council authorized staff to complete a greenhouse gas emissions inventory to determine the level of emissions being produced for the base year 2005 for the City government operations and for the community. On January 31, 2009, the Council identified development and implementation of an action plan to reduce greenhouse gas emissions and conserve energy as an 'other important goal' to achieve in the 2009-2011 Financial Plan. Project Work Completed. The baseline Greenhouse Gas Emissions Inventory for the community and for municipal operations has been drafted and is undergoing internal staff and consultant peer review. Staff anticipates presenting the report to the Planning Commission in May 2009. This is the first step in the five-step program. The local Air Pollution Control District (APCD) has awarded a grant to help the other cities and the County of San Luis Obispo to conduct emissions inventories. City staff has been meeting with this group of APCD, cities and County staff on a quarterly basis to share information and strategies. WORK PROGRAM CONSTRAINTS AND LIMITATIONS Developing a Climate Action Plan will involve research, data gathering and entry into a computer model as well as policy and program development. With limited staffing, the effort will require some financial support for additional temporary or contract staff to augment permanent staff efforts. The project can be accomplished without additional funds; however, progress will be very slow due to higher work priorities (Housing Element update, South Broad Street Corridor Plan, and Orcutt Area Specific Plan). One option is to collaborate with Cal Poly — their teaching staff worked with a graduate class recently and completed a Climate Action Plan for the City of Benicia. Their staff learned many lessons in this process and could bring a greater level of experience to the project at a minimal cost. Significant public and business community involvement is anticipated and will require a great deal of outreach and input from various stakeholder groups. If changes to transit operations are proposed, surveys may be needed to capture rider input. STAKEHOLDERS There are many internal stakeholders to this effort. Public Works, Administration, Community Development and the Utilities Departments will be active participants in this work program. PG&E is an external stakeholder but Cg -53 - 133�J/ ATTACHMENT IMPORTANT-OBJECTIVES GREEN HOUSE GAS REDUCTION AND ENERGY CONSERVATION one that may be involved in helping the City develop an energy financing district (authorized by AB 811) to support financing of energy improvements. Other City departments will be involved in more minor roles. Programs that impact municipal and transit operations must be vetted with the departments who are most familiar with current efforts and who may be able to offer recommendations or feedback regarding proposed actions to make municipal operations and structures more efficient. For changes to development regulations, the stakeholders include the Community at large, Chamber of Commerce Sustainability and Economic Subcommittees, the Downtown Association, Cal Poly, the Home Builders' Association, the local chapter of the American Institute of Architects, SLO Green Build, ECOSLO; other building groups; Air Pollution Control District, Sierra Club and the SLO Council of Governments (SLOCOG). For transit changes, stakeholders include the transit providers and riders as well as SLOCOG. ACTION PLAN The timing associated with these tasks assumes some level of contract assistance for permanent staff. Dates shown are the anticipated completion date of the specific activity. 1. Research CAPS from other jurisdictions. 12/09 2. Analyze GHG emissions inventory to identify GHG sources and opportunities for reductions. 12/09 3. Review ICLEI best practices information. 12/09 4. Identifying policies and programs already underway that address energy reductions. 1/10 5. Develop"talking paper"for internal staff review and brainstorming including review of Utilities 2/10 Conservation Office role in the delivery and oversight of energy conservation programs. 6. Council review of progress and adoption of reduction target. 3/10 7. Develop website and information mailer. 4/10 8. Public outreach and input(i.e.Earth Day event,mailers,interactive web site). 6/10 9. Data entry and modeling for alternatives. 3/10 10. Draft Action plan. 3/10 11. Public outreach and input. 6/10 12. Council adopts Climate Action Plan. 9/10 KEY WORK PROGRAM ASSUMPTIONS It is assumed that adequate staffing and resources will be available to do the work. Implementation of work programs identified in the CAP will follow adoption of the plan, but this will occur outside of the 2009-2011 Financial Plan timeframe. -54- ✓J4 ATTACHMENT IOTHE - IMPORTANT OBJECTIVES GREEN HOUSE GAS REDUCTION AND ENERGY CONSERVATION RESPONSIBLE DEPARTMENT Community Development will take the lead but support from and collaboration with Public Works (fleet and facilities management) and the Utilities Department which will be key on other energy conservation components. All Departments may be involved in evaluating programs proposed as part of the Climate Action Plan itself FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL It will take staff time and assistance from temporary and/or contract staff to achieve this goal. Typically, the Community Development Department budget includes some funds for contract services however this line item has been reduced in the draft 2009-2011 Financial Plan in order to meet budget goals. Staff resources from Community Development, Public Works and Utilities Department will be required for the life of this project. If the project must be conducted with existing staff only, approximately �h FTE will be required (split between various departments) and progress up to task 5 of the Action Plan will be delayed until early 2011. Under this scenario, data entry and modeling might be possible in Spring 2011. With additional temporary or contract assistance, the dates shown in the task list above are feasible. Cost Summary Operating Programs Capital Improvement Plan 2009-10 1 2009-10 1 2010-11 Climate Action Plan 25,000 Total 1 $25,000 $0 $0 1 $0 Funding Sources Operating Programs Capital Improvement Plan 2009-]0 2010 11 2009-10 2010-11 General Fund 25,000 Total $25,000 1 $0 $0 $0 The costs listed in 2009-2010 are for research and assistance with developing the "talking paper" for internal staff,data entry,and modeling of various proposals and production of the draft plan and final plan. GENERAL FUND REVENUE POTENTIAL It is unlikely that there will be any General Fund revenue enhancements as a result of achieving this goal. Staff will pursue Energy Efficiency and Conservation Block Grant funds available through the recent Stimulus package to fund development of the Climate Action Plan. It also may be possible that implementation of the programs outlined in the Climate Action Plan (CAP) may be eligible for APCD, PG&E or other energy-related grants, but development of the CAP will not generate revenue. OUTCOME—FINAL WORK PRODUCT The final work product will be a Climate Action Plan with implementation programs. This is important in order to implement the climate change goals adopted by the State, to save City energy and resource costs, and to map out a path for actions the City and development community can do to preserve and improve the City's environmental quality. �3 -61 -55 - ATTACHMENT OTHER IMPORTANT • : DOWNTOWN MAINTENANCE AND BEAUTIFICATION OBJECTIVE Expand Downtown beautification efforts to include enhanced maintenance and cleanliness, a review and upgrade of standards and phased physical improvements. DISCUSSION Workscope Summary This work program is intended to enhance the maintenance and beautification of the Downtown through a reprioritization of projects, new partnerships, clearer standards and design guidelines, and improved internal and external communication. More specific program components include improvements in signage, solid waste collection, tree maintenance, news rack management, street furniture, and other enhancements of existing City infrastructure in the Downtown. In addition, it is recommended to assure more consistency in actual implementation of improvements and better communication internally and externally with stakeholders that one staff member be assigned as the Downtown"champion". Background The Downtown is generally considered the "hear and soul" of the City. It is an attraction for tourists and an important part of community life. It also plays a significant role from an economic perspective, by supporting sales tax revenues in its role as a regional.shopping draw, and enhancing our transient occupancy tax revenues as a result of prolonged tourist stays. In addition, the Downtown's many restaurants, movie theatres, and historical offerings provide a hub for social and cultural activity and gatherings. Existing Situation and Work Completed The City Council approved Major City Goals for the Downtown in the 1999-01 and 2007-09 Financial Plans. Work in past years has included street resurfacing, installation of pedestrian lights, new Mission Style sidewalks, and other minor improvements. During the last two years, work has continued on the goal of improving the downtown. Utility line replacements and street reconstruction work occurred. Stairs in the Mission Plaza were replaced and tile repairs were made to sections of Mission Style sidewalk. New trees were planted with a new style of tree grate to replace trees that were removed. A block of pedestrian level lighting was installed on Higuera Street to showcase the newly adopted light standard. Staff resources were devoted to keeping the Downtown cleaned up through more frequent sidewalk scrubbing as well as a one-half time temporary employee cleaning up each morning. Staff has also worked with the Downtown Association to complete their Strategic Plan and evaluation of alternative organizational forms. The Downtown Association has also become independent from the City to allow it greater freedom to achieve its goals. Tourism and special event promotion is also ongoing to attract tourists to the City. The Police Department continues to support the efforts of the Downtown Association with safety and criminal issues. In the parking program, maintenance of surface lots and structures occurred. Work continues towards provide bicycle parking options downtown as well as more marketing of parking options. -56- 83 -42 ATTACHMENT •l I U*am I kyl - • - • : DOWNTOWN MAINTENANCE AND BEAUTIFICATION One of the largest work efforts for both staff and the Council was the review and adoption of the building height regulations. Staff continues to work with development to implement the Downtown Physical Concept Plan and encourage housing in the Downtown. CONSTRAINTS AND LIMITATIONS The maintenance projects are not anticipated to require specialized review and should proceed readily. Paving and utility line work is often disruptive and will require the cooperation of the Downtown Association to proceed smoothly and get the message out. Staff will complete project specific outreach for these projects. Design standards, solid waste issues and informational signage are expected to generate considerable interest from the business community and warrant outreach efforts to include the Downtown Association and the Chamber of Commerce, along with specifically interested businesses and members of the Architectural Review Committee. Staff anticipates workshops and regular meetings to encourage community involvement in any. changes to the current.standards and guidelines. STAKEHOLDERS Stakeholders for this goal are the residents of the City, downtown businesses, the Downtown Association, City Advisory Bodies, and visitors to downtown including: tourists, shoppers, and parking customers, both automobile and bicycle. Staff has already met with representatives of both the Downtown Association and the Chamber of Commerce to determine what role they can play in promoting this objective. Staff will involve both these groups to discuss implementation options, covering both costs and sequencing, to be presented to the City Council. Both groups have expressed particular interests as follows: 1.The Downtown Association. The Downtown Association recognizes that these are tough times and that the basics, such as sidewalk scrubbing, daily trash and graffiti cleanup, and tree maintenance are key maintenance activities for the City to continue. The Association is very interested in working with the City on a donor program for pedestrian lighting as this the Chamber of Commerce. In addition to collaborating with the City on design guidelines, the Downtown Association will assist the City in identifying the areas that need the most maintenance to better focus our resources. To supplement the City's efforts, the Association will serve the City Arborist as the "Downtown Foresters" and their help with small tree care will continue. Finally, independent of the City, the Association will continue with other independent support services, such as private security and events to promote the health and vitality of the downtown. 2.The Chamber Commerce. The Chamber of Commerce has identified key ways it will support the implementation of this objective. One example is the Chamber's strong desire to developing uniformity in street furniture. The Chamber has suggested that upgrading an entire block with the newly approved standards, could be a good way to "kick start" such a beautification effort. The Chamber intends to educate business owners on such things as cleaning, solid waste management, and maintenance of decorative pots. Improvement on these items not only benefits the Downtown but also translates into improvements in water quality in line with the City's Stormwater Management program. The Chamber has also volunteered to take the lead in an outreach effort to news rack owners to encourage their support of a consolidated news rack approach. l33 -�3 -57 - ATTACHMENT DOWNTOWN MAINTENANCE AND BEAUTIFICATION ACTION PLAN 1. Review of Existing Design Guidelines. The work program proposes to start with a review of the documents that guide the appearance of the downtown. That effort will involve not only City staff but members of the community and City advisory bodies. From this initial review will follow a proposal of how to get to where the City wants to be for the appearance of the Downtown and what that effort is likely to cost. One notable area that will be reviewed is news rack clutter. A consistent news rack design and possible locations for consolidation will be developed for the Council to review, and if appropriate, a trial installation funded. There have also been some indications that proper management of trash and recyclables is also a maintenance issue downtown. The specific concerns about those solid waste issues will be identified so that staff has a clear understanding of the concerns and can then develop a way to address them. 2. Maintenance Work. Maintenance work, such as sidewalk repairs, Mission Sidewalk installation, tree well upgrade and planting, repainting of light poles and replacement of others with updated standards, is also recommended for funding in the 2009-11 budget. The tree well and lighting standards are recent adoptions, so changes to these standards are not anticipated. Ongoing sidewalk scrubbing and general trash and graffiti removal will also continue. 3. Communications Enhancements and Downtown Champion. Staff has discussed possible options to ensure the Downtown Association and local businesses continue to have a positive flow of information to, and from, the City. There are a variety of ways that communication occurs now. For construction projects, engineering staff complete outreach to the Downtown Association and businesses. To schedule construction projects and get the word out, engineering staff has spoken at Downtown breakfasts and attended Board meetings as well as providing simple email updates to be included in the Downtown Association newsletter. Maintenance issues are called directly in to the Public Works Corporation Yard so that response time is reduced to the minimum. The maintenance staff person downtown on a regular basis is a familiar face and can be contacted directly. Questions or requests for City resources outside the current agreement are handled by the Economic Development Manager and reviewed with affected departments. This gives the Downtown Association a single point of contact when they wish to adjust previously agreed upon services. The Economic Development Manager also regularly attends Board meetings and can serve to bring back any concerns to the departments.. Generally, these strategies appear to be providing the needed links for information and communications with the Downtown Association. However, staff proposes designating the Public Works Department Parking Services Manager as the principal staff contact for the City for Downtown oriented communications and activities. With the focus of this program and their physical location in the Marsh Street Garage, this person will be available as a conduit to the City when concerns arise or information is needed, and to help ensure consistent standards are followed when repairs or upgrades are undertaken. Design Standards&Upgrades 1. Assemble all current downtown design guidelines and standards. 8/09 2. Working with the Architectural Review Commission,review the current guidelines and standards and 3/10 revise or confirm the public improvement design strategy for the downtown including street furniture, trash and recycling containers,and regulatory signage,for Council consideration. 3. Develop costs,spending options,and sequencing options to bring the downtown up to new standards. 4/10 -58- ,B.3- ATTACHMENI DOWNTOWN MAINTENANCE AND BEAUTIFICATION 4. Develop a design and identify possible locations fora centralized news rack enclosure to 3/10 accommodate a range of different papers in a consolidated and uniform manner,for Council consideration,and possible funding approval. 5. Install a block of pedestrian level lighting and fill in portions of Mission Style Sidewalk. 6/11 Signage Develop a coordinated program for the City informational and directional signage and recommend 12/10 implementation plan. Solid Waste Identify solid waste issues with the Downtown Association and Chamber of Commerce and develop a 6/11 work plan to address them. Facility Maintenance l_ Provide sidewalk scrubbing service and daily cleanup maintenance work. Ongoing 2. Implement the Downtown Tree Management Plan. Ongoing 3. Complete Warden Bridge resurfacing project. 4/10 4. Complete downtown street and parking lot resurfacing projects. 4/11 5. Complete water and sewerline replacements. 4/11 6. Complete painting of existing street light poles. 6/11 KEY ASSUMPTIONS Facility maintenance costs are based on recent bids and account for funding currently anticipated to be available to complete the work. Anticipation of seasonal work has framed the year in which certain work will be accomplished, rather than the year of actual funding. Delivery of the work program assumes that staff reductions are not so severe as to hamper delivery of the various tasks. RESPONSIBLE DEPARTMENTS In coordination with the Parking Services Manager, Community Development will take the lead in reviewing and updating design standards and guidelines. Public Works will also assist where the standards relate to construction details. Public Works will take the lead on the facility maintenance work needed to complete the goal. Utilities will be a partner in this area where it relates to their pipe systems. The Utilities Department will take the lead for solid waste issues working with the Downtown Association and the Chamber. Administration will take the lead on the implementation of an informational sign program in coordination with the Promotional Committee and assistance from Public Works for installation efforts. -59- Ah ATTACHMENT DOWNTOWN MAINTENANCE AND BEAUTIFICATION FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL Cost Summary Operating Programs Capital Improvement Plan 2009-10 2010-11 2009-10 2010-11 Informational Signage 25,000 50,000 Pedestrian Light Installation 70,000 Mission Sidewalk Installation 25.000 25,000 Downtown Urban Forest Plan 25.000 25.000 Warden Bridge Deck Rehabilitation 45,000 Street Light Repainting 50,000 Parking Lot Resurfacing 122,000 Street Resurfacing 200,000 Utility Line Replacement 151,000 Total I $0 1 $0 $593,000 1 $220,000 Funding Sources Operating Programs Capital Improvement Plan 2009-10 2010-11 2009-10 2010-11 General Fund 320,000 220,000 Parking Fund 122,000 Water Fund 65,000 Sewer Fund 86,000 Total $0 $0 $593,0001 $220,000 GENERAL FUND REVENUE POTENTIAL A healthy, vital, and attractive Downtown may result in stronger sales tax and transient occupancy tax revenues. OUTCOME—FINAL WORK PRODUCT A robust, attractive, and healthy Downtown is vital to its continued success as the retail, social, and visitor hub for San Luis Obispo. The on-going maintenance activities by the City are a key component to keeping the Downtown clean and therefore healthy. Not only does it enhance the Downtown to visitors but it continues to position it as the place to be for our residents. -60- ATTACHMENT OTHER IMPORTANT OBJECTIVES HISTORIC PRESERVATION OBJECTIVE Adopt a Historic Preservation Ordinance and update the City's Inventory of Historic Resources. DISCUSSION Workscope Summary Phase 1 of the proposed work scope includes the following key elements: 1. Prepare a draft Historic Preservation Ordinance. 2. Circulating the draft for comments and input from the community. 3. Review of the ordinance through the public hearing process. 4. Adoption of a Historic Preservation Ordinance. If funds permit,Phase 2 would include the following: 1. Hiring contract staff to organize and lead a historic survey, and to train volunteers. 2. Consideration of eligible properties for addition to the historic resources inventory by the Cultural Heritage Committee and Council through noticed public hearings. Existing Situation. In 1981, a citizen's committee lead by a coordinator under contract to the City surveyed the older buildings in town (built prior to 1941) and the Council approved listing the nominated properties on a historical resources inventory. In 1987, the Council created three historical preservation districts: Old Town, Downtown, and Mill Street. The number of districts has since been increased to five with the addition of the Railroad and Chinatown Historic Districts. Margaret Lovell, a consultant to the Cultural Heritage Committee (CHC), conducted the last citywide historic inventory in 1991. Since then, annexations of previously un-surveyed areas and planning and construction permit applications have underscored the need for updating the Inventory of Historic Resources. As the rate of infill development increases, the number of potentially historic but undocumented buildings affected by new projects has also increased. In the past, buildings were proposed for demolition which—after the demolition applications were received — were determined to be historically significant. These properties had been overlooked in previous historical surveys but under current City and State criteria, would probably qualify as historically significant if evaluated today. Before 1996, any building proposed for demolition would first go to the CHC for a determination of historic significance, allowing a case-by-case approach to historic evaluation. In 1996, the City changed its demolition procedures. With the 1996 changes, only those properties already designated historic are referred to the CHC when proposed for demolition. This change makes the development review process more predictable, but places greater importance on doing through; accurate historical surveys in advance of new development proposals. With the increased rate of development since that time and limited resources, the CHC has not been able to maintain the inventory to keep pace with the rate of infill development, resulting in situations where the City must use outdated, incomplete or sometimes inaccurate information when evaluating the effects of new development on historic resources. This has made it increasingly difficult for the City to fairly and objectively implement General Plan policies on historic preservation. 61 f33'61-- ATTACHMENT HISTORIC PRESERVATION Project Work Completed 1.The Historic Preservation Ordinance Under Community Development Department staff supervision, a graduate planning intern has created a rough draft of a historic preservation ordinance. The draft addresses topics such as, identifying when a remodel is effectively a demolition of a historic structure, demolition by neglect, identifying the types of projects that require CHC review, inclusion or reference to the Secretary of the Interior's standards, standards for relocation and demolition, procedures for listing of resources or districts, standards for contents of historic reports, post- disaster preservation efforts, and enforcement provisions. The draft will require staff review and editing as well as inclusion of graphics to illustrate certain requirements before it is ready for internal circulation and subsequent public and CHC review. 2.Inventory of Historic Resources Since the Margaret Lovell-lead inventory in 1991, additions to the historic resources inventory have been made on either a neighborhood or single property basis. In 2007, 25 properties in the East Railroad area off of Johnson Street were added to the Contributing Properties list. In May, 2008, the Council added eight properties in the Monterey Heights area to the list of Historic resources - one to the Master List and seven to the Contributing Properties list. WORK PROGRAM CONSTRAINTS AND LIMITATIONS Preparation of a Historic Preservation Ordinance will require additional staff work and would benefit from architectural graphics to illustrate key standards in the document. Initiating a revision to the Historic Resources Inventory will be difficult with limited funding and staffing. Due to the nature of the undertaking, updating the inventory can only be conducted if funding is available for professional assistance from a historian. If a citywide historic survey is funded, the Cultural Heritage Committee suggested following a process similar to that used in the successful 1981-1983 historic survey. That survey used a paid temporary staff person, CDD staff support, Cal Poly faculty and community volunteers to survey buildings over most of the City. Staff anticipates that in updating the original survey, a key prerequisite is retaining a professional historian and architect to ensure survey volunteers are adequately trained, and that objective standards and guidance are followed in researching and identifying historic resources. Project management would be provided by staff for coordination with the advisory body and Council and the lead historian will be tasked with training and coordinating the volunteers. Temporary administrative help would be needed to assist with management of the inventory documentation. Updating the inventory would involve a substantial amount of staff time. STAKEHOLDERS AND POSSIBLE PARTICIPANTS The stakeholders include residents and property owners, the Chamber of Commerce, Downtown Association, Residents for Quality Neighborhoods, SLO Property Owners' Association, SOD, Home Builders Association, other building groups, San Luis Obispo County Historical Museum, State Office of Historic Preservation (SHPO), Monday Club, Sierra Club, San Luis Obispo County Land Conservancy, Cal Poly University's College of Architecture and Environmental Design, Cuesta College, local chapters of the American Institute of Architects and American Planning Association, Northern Chumash Tribe, Heritage Shared UCSB Central Coast Information Center, San Luis Obispo County Archaeological Society (SLOCAS), and the Cultural Heritage Committee. - 62- ATTACHMENT HISTORIC PRESERVATION ACTION PLAN 1. Internal staff review and evaluation of draft historic preservation ordinance. 8/09 2. Presentation and discussion of draft ordinance with stakeholder groups. 1/10 3. Early study session with Council to solidify approach. 3/10 4. Public Hearings—draft ordinance. 8/10 5. Contract for Historian and Architect to lead Inventory. 10/09 6. Training Volunteers. 2/10 7. Conduct Historic Survey. 2/11 8. Public Hearing process for consideration of nominated properties. 6/11 KEY WORK PROGRAM ASSUMPTIONS It is assumed that adequate staffing and resources will be available to bring the Historic Preservation Ordinance through the public hearing process. Community Development staff will be available to initiate this phase of the goal once the Housing Element, Orcutt Area Specific Plan, and Broad Street Corridor Plan efforts are complete. Some financial resources will be needed to develop architectural graphics for the ordinance. The Historic Resources inventory is too costly to undertake at this time and is be dependent on funding and priority of other important objectives such as the preliminary update efforts for the Land Use and Circulation Elements and the development of a Climate Action Plan. Without significant funding for a professional historian to lead the project, the scope of the goal will focus solely on Phase 1, the development of the Historic Preservation Ordinance, namely steps one through four listed above. Cal Poly has indicated an interest in including the inventory as a two-quarter program in the environmental design course series. This could provide a designated group of architecture and/or planning faculty and students who would form part of the core volunteer team to assist with training, field survey, background research, and documentation efforts (but would not lessen the cost associated with a professional to lead the effort). RESPONSIBLE DEPARTMENT Community Development will take the lead but participation by other departments' staff, the City Attorney will also be essential. FINANCIAL AND STAFF RESOURCES REQUIRED TO ACHIEVE THE GOAL It will take staff time and assistance from contract staff or consultants to achieve this goal. Typically, the Community Development Department budget includes some funds for contract services; however funding for consultant services in the 2009-2011 Financial Plan has been trimmed to meet budget goals. Staff resources from Community Development Department will be required throughout this project. Finalizing the draft Historic Resources Ordinance and bringing it through the public review process is anticipated to require approximately 1/4 FTE. This commitment will increase with the inventory process to approximately i/7. FTE. In addition,, C�1 -63 - S 3_( ( ATTACHMENT On: HISTORIC PRESERVATION lessons learned from the previous historic survey indicate that a r/4 or rh time administrative assistant is essential to ensure documentation, photos, property owner coordination, correspondence and staff notes are organized, thorough and accurate. Cost Summary Operating Programs Capital Improvement Plan 2009-10 2010-11 .2009-10 2010-11 Contract staff,consultant services,and supplies for Inventory Graphic Services for Historic Pres.Ordinance 5,000 Total $5,000 * $0 $0 Funding Sources Operating Programs Capital Improvement Plan 2009-10 2010-11 2009-10 2010-11 100-40400-7227 5,000 Total $5,000 * $0 $0 The costs listed in 2009-2010 include graphics development for the proposed ordinance and contract staff/consultant assistance to manage the inventory process and provide technical expertise for identification of historic resources; and associated costs for supplies for volunteers assisting in the effort. *The cost for 2010-11 could be $80,000, if the City is able to fund this second phase at that time. GENERAL FUND REVENUE POTENTIAL It is unlikely that there will be any General Fund revenue enhancements as a result of achieving this goal. OUTCOME—FINAL WORK PRODUCT The final work products will be a Historic Preservation Ordinance and an updated Historic Resources Inventory. If funds are not available for the Inventory, the Historic Preservation Ordinance can still proceed as a work item for staff to complete, although illustrations and graphics will be an.important element of this item. Work on the Historic Resources inventory may extend beyond the 2009-2011 Financial Plan. The work product anticipated to be completed by June 30, 2011 will be a set of recommendations by the consultants and volunteers for updates to the existing List of Historic Resources. Those recommendations will need to be considered by the Cultural Heritage Committee and the City Council through the public hearing process and may still be occurring beyond the 2009-2011 Financial Plan timeframe. -64- �j— � f From: Deborah Cash [mailto:dcash@downtownslo.com] Sent: Tuesday, April 14, 20093 :35 PM To: Hooper, Audrey Subject: Red File Memo Audrey, hi We had our board meeting this morning and I was directed to send a memo to Council regarding our support of the Economic Development Program. Thanks for your help in getting this in front of Council before the meeting. Deborah 2 COUNCIL7EC RED FILE y MEETING AGENDA �e�f� L3'ATTORNEY DATE Y ITEM # �3 g O CLERIC/ORIG DEPT HEADS ��� — C�UTIL DIR 21HR 101n Alesd-77/17 rCo ft.)L ' CCM n1.G r - C�L�2(G 14 April 2009 To: Mayor Dave Romero and City Council members From: Deborah Cash, Executive Director Re: Funding for Economic Development Program The Downtown Association Board of Directors this morning discovered that the City's Major City Goal Work Program for Economic Development does not provide for additional funding. In reading the goal, In collaboration with Cal Poly, Cuesta, and the business community, develop strategies to increase economic development including emphasis on head-of- household jobs and environmentally sustainable businesses. it would seem that to simply rely on existing staff and resources would not enable the goal to be achieved to any significant degree. In weak economic times, only strong economic programs can lead us out of the cycle of more money going out than is coming in. And while the need to balance the budget relies on making hard decisions, it's wise to invest in programs whose returns on the funds applied will pay off in the long run. Moreover, to reconfigure a current program without necessary resources restricts the manager's ability to move in a new direction. If we are going to grow jobs, to provide assistance for business expansion and retention and respond to the needs of those willing to invest in the community, we need to support our Economic Development Program by providing the means with which to do so. On behalf of the Downtown Association Board of Directors, I urge you to reconsider the recommendation, provide additional funding for this program and invest in the goal that could provide financial security for the future. Page 1 of 2 Coundl, SloCity From: cvisci@yahoo.com [cvisci@yahoo.com] Sent: Tue 4/14/2009 2:10 PM To: Council,SloCity r_ #A" ee �m Cc: Hamplan, Ken; Hampian, Ken; Dave Garth; Ermina Karim Q' OUNCIL Q"CDD DIR Subject: Economic Development I � eCn`rm�e C'!-FIN DIR Attachments: �McRZ-FIRE CHIEF 3'ATTORNEY LTPW DIR RED FILE atLERK/ORIG f�'POLICE CHF April 14, 2009 ❑ DEPT HEADS C'l�REC DIR MEETING AGENDA x ?� � AEC DIR Dear Council Members: DATE ITEM # 133 -TR iRu�L �; np SII, l N&,u! 17//!E5 CeOr ct�2_ I'm writing as chair of the SLO Chamber's Economic Development Committee to voice y strong support of economic development as a city goal. I'm sure you've seen the same data I have -- that the city and the county are rapidly aging, that our young people (25-44) are migrating out of the county, that we have an insufficient supply of head-of-household jobs, and that we have an over-reliance on the government sector for jobs. In short, the data paint a dismal picture, both near term and long. The State of California is going the wrong way on many fronts, but the City of San Luis Obispo, if the council chooses to be urgent and to apply more staff time and resources, can brighten the city's economic outlook. Toward that, I strongly urge you to find ways to strengthen the staff's Economic Development work program . The two-year program, as currently drafted, has many strong points. At the same time, it would greatly benefit from a greater sense of urgency, a tighter time frame on many of the action steps. To achieve that, you must commit more staff time and resources. Voters will applaud you and regard a faster-paced work schedule as a signal that you understand the urgency of the times. Nothing less than the city's quality of life is at stake. If you add resources, your credibility as the city's elected leaders will be enhanced. I'm sure you understand what a failure to act will mean to your credibility. Thoughtful voters also appreciate that you frace a zero-sum challenge: Adding resources in one area means taking away in another, and someone else's priority will appear to take a hit. That is the difficult challenge you face as the city's elected leaders; it's the challenge you sought when you ran for council, and it's an even more difficult challenge in these tough economic times. But thoughtful leaders also know that the future can be brighter if and only if residents first feel safe and, second, if and only if they believe there is a reasonable opportunity to provide for their families. Seize the moment to do all that you can to cultivate a suitable environment that facilitates healthy businesses and head-of-household jobs. Finally, as you will hear from my Chamber colleagues this evening, the Chamber is a committed stakeholder in this effort. The Chamber stands ready to partner on each element of the two-year work program and will help with marketing of the surreys, data collection, business interviews and industry cluster identification. https://mail.slocity.org/exchange/slocitycouncil/Inbox/Economic%2ODevelopment.EML?... 4/14/2009 Page 2 of 2 Sincerely, Chip Visci Chair, SLO Chamber Economic Development.Committee cc: Ken Hampian https://mail.slocity.org/exchange/sloc itycounciUlnbox/Economic%20Development.ENIL?... 4/14/2009 Page 1 of 1 Council,SloCity From: Richard Kranzdorf[rkranzdo@calpoly.edu] Sent: Tue 4/14/2009 2:44 PM To: Council,SloCity Cc: rkranzdo@calpoly.edu Subject: Open Space Assessment Attachments: Dear Council Members: I am sending this short email at the BEGINNING of the City Council's master plan and budget process. My plea is simple: That open space not be downgraded in favor of some other hot city project or projects! Roads, parking spaces and gosh knows what else too often trump open space on the City agenda. San Luis Obispo is The Jewel in the Crown. On three different occasions in the last week I have stood on the decks of houses in our City and looked out at our magnificent surroundings. I agree with the Council member who said "San Luis Obispo isn't a museum." Rather, it is a living, breathing, functioning entity. It will take constant efforts to keep it that way and not be downgraded by a thousand cuts. Please do right by our City. Sincerely, Richard Kranzdorf Pup Co P/ 6VAIL TCOUNCIL CDD DIR = RED FILE EeAe-0r9Mat. C5-Fl N DIF - MEETING AGENDA [�ACAOAircp�xa/�'�F E CHIEF RI'ATTORNEY ETPW DIR DAT /`�o ITEM # 3 r L�CLERK/ORIG MPOLICE CHF El DEPT HEADS ZAEC DIR t�i ML DIR / AIL'l��'nYYlt'S iCUA.�:CL "G�Y�1 MG/L Ct-G�2� https://mail.slocity.org/exchange/slocitycouncil/Inbox/Open%2OSpace%2OAssessment.E... 4/14/2009 Page 1 of 1 Attachments can contain viruses that may harm your computer.Attachments may not display correctly. Council, SloCity From: John Ewan Dewan@alteryourenergy.com] Sent: Tue 4/14/2009 2:20 PM To: Council,SloCity Cc: Subject. Attachments: Lj REDashbaughb3.pdf(628KB) Council Members Re: AB 811 Implementation John Ashbaugh is taking the lead on moving a very vital program forward. At little cost to the City of San Luis Obispo a credible roadblock to the installation of distributed energy systems can be removed. With Berkeley in the lead and Palm Desert close behind, city after city throughout the US is recognizing the low cost of this financing program and the ability to decrease our carbon footprint NOW. Please move forward the implementation of AB 32 goals by directing staff to bring this AB 811 based financing program to reality as soon as possible. This is a no brainer-there is no reason to wait, do it now. Respectfully John Ewan Council Emeritus RM'q CoP`1 CMRI L- John R. Ewan RED FILE I L'TCOUNCIL 31CDD D I R 12'SRBG19MGK 2'-FINDIR Pacific Energy Company - MEETING AGENDA E1 AGABA%rcgW4N tl?1IRE CHIEF DATE'/ 01 ITEM #. A I' Iff"A70FINEY 2`0W DIR 3`CLERK/0RIG 2POLICE-CHF 2121 Santa Barbara St i ❑ DEPT HEADS CJ'REC;()IR 2rUTIL DIA San Luis Obispo ! _ PfHR DI(; Nod 7lME5 ! (lea VC4L- CA 93401 c rrs, nth C[.raZe Vc. 805-544-4700 R. 805-544-3411 Hours 10-5:30 M-F 11-4:00 Sat. Closed.Sundays https:Hmail.slocity.org/exchange/slocitycounciVInbox/No%2OSubject.EML?Cmd=open 4/14/2009 Page 1 of 1 From: kenneth smokoska [ksmokoska@hotmail.com] Sent: Tuesday, April 14, 2009 2:00 PM To: Ehrbar, Barbara Cc: Ashbaugh, John Subject: RE: Possible Augmentation to City of SLO Major City Goals Work Program. Attachments: CAP_Sonoma_Nov08_AB_811.pdf Hello Barbara, I just spoke to Council member Ashbaugh, and he asked me to send you the attached Sonoma County Climate Protection Campaign analysis of AB 811 for a red file inclusion for council this evening. Thank You Ken Smokoska 805.550.7749 cel Subject: Possible Augmentation to City of SLO Major City Goals Work Program. Date: Tue, 14 Apr 2009 11:39:14 -0700 From: behrbar@slocity.org To: PxWh@pge.com; tpj2@pge.com; dgarth@slochamber.org; ermina@slochamber.org; nickalter@mindspring.com; karen@karenmerriam.com; ksmokoska@hotmail.com; jewan@ajteryourenergy.com; Ikangas@recsolar.com; rwork@recsolar.com; chuck.headington@sbcgloba1.net; cisco@renewfund.com CC: jashbaug@slocity.org Council member Ashbaugh thought you might be interested in the attached memo. Z on L 2'COUNCIL 'CDD DIR Barbara Ehrbar i BTAQ-crn,Mce [SIN DIR City of San Luis Obispo RED FILE 21LAe, n, IRE CHIEF 990 Palm Street - MEETING AGENDA a-rORNEY DIR CLERK/ORIG POO LICE CHF San Luis Obispo, Ca 93401 DAT /y ITEM #_9,3� l9 ❑ DEPT HEADS 27"OlEC DIR P��-- Q_UTILDIR 805-781-7114 Bun1G PrFp o 805-781-7109 (fax) , A/L�,1 nnt� �C_&UVOL_ 'Cr-r'►t /+'ICS Rediscover Hotmail@: Now available on your iPhone or BlackBerry Check i out. 4/14/2009 Evaluation of Assembly Bill 811 : Climate Protection Benefits and Costs Dave Erickson, Technical Director Climate Protection Campaign www.climateprotectioncampaign.org September 30, 2008 Summary Assembly Bill 811 provides powerful financial tools for enabling property owners to install energy efficiency and renewable energy improvements on their property. In this report, we quantify the potential greenhouse gas (GHG) emission reduction impact of a large-scale energy efficiency and distributed renewable energy installation on residential and non-residential property in Sonoma County. This analysis identifies the types of improvements that could potentially be done by property owners using financing through AB 811. We evaluate the "value proposition" for property owners for the different types of AB811-qualifying building retrofits and renewable energy installations. Finally, based on an average residence, we assess the GHG impact in electricity and natural gas consumption of cost-effective measures available under AB 811. Assembly Bill 811 Assembly Bill 811 (AB811) allows cities, counties, or a city/county combination to set up contracts with property owners to finance energy efficiency or distributed generation renewable energy projects. These projects are secured with a lien on the property where they are located. The payments on the amount financed are made via property tax assessment. The city or county (referred to generically as "city"in the statute) is empowered to develop funding sources to provide capital for improvements. AB 811 does not cover properties that are being developed. It does not cover any improvement not permanently connected to the property such as appliances. The city must develop a plan that describes how the capital amount for work performed will be raised. The sale of bonds may be used to finance work performed under contractual assessment. There is no up front cost to the property owner. (There may be an application cost.) The indebtedness of the property owner is not increased, although the annual property tax payment may be significantly increased. There does not appear to be any qualification required for the property owner as part of the statute. However, individual cities may specify qualification such as credit worthiness as part of the contract negotiation. Interest rate and repayment period is set for each contract. Program costs are apportioned among the consenting property owners. AB811 Evaluation I Climate Protection Impacts The climate protection effect of AB811 must be evaluated on the customer side of the electric and/or gas meter. That is, each property and associated meter contributes to total GHG reduction as the consenting property owner contractually participates in the program and reduces their electricity or natural gas use. The reduction in electricity or natural gas bills will be netted out against an increase in property taxes for the property owner to pay for measures. If a property owner is not responsible for the electricity or natural gas bill for a property, such as for a rental property, it may be difficult for the property owner to justify the increase in property tax. This fact may restrict the participation in this program to parties that own and operate facilities on a property such as homeowners or business owners that own their buildings. We separate potential climate protection impacts of AB811-funded measures into those that result from reduction of natural gas or propane use, and the results of reduced electricity use. Building envelope efficiency upgrades and heating/ventilation/air conditioning (HVAC) and water heater upgrades will generally be covered under AB811 because they are permanent modifications to the property. These upgrades will generally affect natural gas or propane use in the Sonoma County area because the majority of water and space heating energy is from natural gas and propane. Any appliance not permanently installed at the property will not be covered by AB811. As shown in the chart below from the 2006 California Energy Commission (CEC) end-use study, the majority of electricity end-use is in "plug load" or appliances not permanently installed in the property. The primary exceptions are central air conditioning, water heat, and furnace fan. Built in lighting would also qualify. The total load represented by AB811 eligible retrofits is 20 percent or less.' According to a recent study 50 percent of the residences in the PG&E service territory have central air conditioning.AB811 qualified retrofit would thus apply to a total of 8 percent of the load from air conditioning, 9.1 percent from water heaters,and the furnace fan load of 3.3 percent. AB811 Evaluation 2 0of total End Use use Refrigerator 13.7 A/C(central+room) 16 Space Heat 10.1 Water Heat 9.1 Lighting 8.8 Residual 7.3 Clothes dryer 5.8 Freezer 3.5 Fumace Fan 3.3 Television 2.9 Electric Range Top 2.8 Dishwasher 2.5 Electric Oven 1.8 Microwave Oven 1.7 Personal Computer Desk To 1.5 Other 9.2 Total 100 The other permanent improvement to a property that would reduce electricity costs generally falls into the category of small scale onsite electricity generation. The generation facility will be connected to the grid via net-metering in most cases, although there is a new "feed-in"tariff available. Financing could conceivably be used to build generation only facilities subject to the Small Renewable Generator tariff.2 There are also technologies that would qualify for AB811 financing such as air-source heat pumps and solar hot water heaters that would nearly or completely eliminate natural gas or propane use,but might increase electricity use. The building efficiency retrofit described below reduces electrical energy used by HVAC fan. Central air conditioning upgrade was not considered, since we assumed that the typical residence with central air would have been retrofitted more recently. There is no data available for Sonoma County penetration of central air. The reduction in furnace fan energy use will typically be less than 10 percent, based on building performance modeling using Energy-1 OTM software.3 We evaluate the number of property owners that would have to install improvements in order to achieve the target in the electricity and natural gas sectors, given projected business-as-usual electricity and natural gas annual consumption for 2015. We also evaluate the costs and the associated emissions reductions of AB811 financed measures. 2 Otherwise known as the"Small Renewable Generator PPA"or"feed-in tariff,"it.specifies how PG&E can purchase power from a Small Renewable Energy Resource,which is 1.5 megawatts or less. 3 Energy-I0rm is exclusively distributed by the Sustainable Buildings Industry Council.The software was developed by National Renewable Energy Laboratory(NREL)under funding from the U.S.Dept.of Energy,Copyright 2005 Midwest Research Institute. AB811 Evaluation 3 Electricity Sector Grid electricity supplied by PG&E in 2015 is projected to be less GHG intense (GHG emissions per kWh generated) than 1990. By 2015, the emissions intensity of electricity procured by PG&E is projected to be 25 percent less than today.a Because of this, demand reductions in each subsector would be less than what is required today to meet the target. Based on projected load growth for 2015, overall emissions from electricity use would need to be about 17 percent below the projected residential level and about 28 percent below the projected non-residential level to reach the reduction target. Climate Protection Campaign has developed projections for total electricity consumption for Sonoma County by the year 2015. For all community sectors of the County, the projected energy consumption is approximately 3,230 GWh per year. This is based on a population of 524,000. In 2005, there were 233,000 residential electric accounts and 31,000 commercial accounts consuming approximately 2,900 GWh per year,based on a population of 466,891. For 2015, we project over 270,000 residential accounts and over 40,000 non-residential accounts. We project that the PG&E emissions factor will be reduced from 0.489 lb/kWh in 2005 to 0.362 in 2015. In order to reach the emission reduction target for the electricity sector, 17 percent of residential and 28 percent of commercial accounts would have to participate in the program and reduce their net electricity consumption to near zero. This equates to nearly 45,000 residential accounts and about 14,000 non-residential accounts that would have to participate to reach the reduction target in the electricity sector for the county. Natural Gas/Propane Sector In 2005 in Sonoma County there were 187,000 residential natural gas accounts, using approximately 77 million therms, which is an average of 404 therms per year per account. There were nearly 11,000 commercial and industrial gas accounts using about 37 million therms, an average of about 3,500 therms per year per account. These consumption levels are projected to increase, but at a lower rate than electricity consumption. Projected use for the residential sector for 2015 is approximately 82 million therms, and 47 million for non-residential. The reduction required to meet the target is approximately 30 percent below projected business-as-usual consumption level for both residential and non-residential since the emission factor for natural gas does not vary.5 Cost Estimates A typical residence in Sonoma County uses about 5,200 kWh per year for lighting, heating/air conditioning, and plug loads. An average of 405 therms is used primarily for space heating and water heating.6 AB811 would not cover plug loads, or most lighting. It would cover baseboard or central heat, central air conditioning, and building envelope retrofits such as building shell sealing, insulation, and windows. It would also cover water heating retrofits. Based on 2006 Long Term Procurement Plan filed with California Public Utilities Commission(CPUC), March 2007 5 U.S. Environmental Protection Agency(EPA)publication AP-42: (httt)://www.epa.gov/ttn/chief/an42/). See also the Source Material for the Sonoma County Community Climate Action Plan available online at (www.coolplan.org) 6 Data from PG&E,personal communication with Carol Foreman AB811 Evaluation 4 For AB811 to offer a value proposition to residential and commercial property owners and thus yield high participation rates, we assume that the savings in energy costs would have to approximately equal or be less than the increase in property taxes. A 25-to 30-year repayment schedule is assumed for this analysis. The repayment schedule is related to the life of the asset being financed. It is conceivable that building envelope retrofits could be financed on a longer term. We assume a 3 percent to 5 percent interest rate if tax exempt municipal bonds are used for project capital. We use a current cost of$0.16 cents per kWh for residential electricity and $1.32 per therm.? This puts the average annual residential electricity bill at $830 and the natural gas bill at $540. Again, we assume that if electricity and natural gas bills can be decreased an amount equal to or greater than the increase in property tax, most property owners will be inclined to participate, which would increase the likelihood of reaching Sonoma County's GHG emissions target. Electricity Emission Reduction Cost We assume that the electrical efficiency upgrades covered by AB811 are minimal, since the big electricity end uses in the residential sector are not permanently connected to the property, with the exception of central air conditioning, electric central heat or baseboard heat, and built-in lighting. Thus we evaluate the financial benefit to the property owner of a small distributed generation system based on solar photovoltaics. Based on an average annual electricity use of about 5,200 kWh,the average residential solar photovoltaic (PV) installation would be 3.3 kW to cover 90 percent of the electricity use per year. Non-residential properties have an average annual energy use of nearly 40,000 kWh. A 25 kW PV system would generate 90 percent of this electricity. Assume that the average installed cost was $7/watt including rebates. Assume that the current state rebates would apply,but not tax credits, since the payments are being made through property taxes. This results in an average residential system cost of about $23,000 and an average non-residential system cost of about $150,000. If financing was available from tax exempt municipal bonds, assume a 30-year term at 3.5 percent could be offered. The annual payment for the residential system on these terms is ,approximately $1,630. The annual payment includes operation and maintenance (O&M), which is primarily inverter replacement at years 15 and 30. Program administration costs are included in the property tax increase. With these terms, the property owner would be paying about $0.35 per kilowatt hour over 30 years.8 If a 4.4 percent escalator is applied to the current average PG&E rate ($0.16), over 30 years the average rate would be $0.33. The chart below shows the historical PG&E increase since 1980. 7 Average costs from PG&E. 8 Actual financing terms being used in Palm Desert,CA are less favorable than those quoted in this example. Loan terms are being quoted at 20 years,maximum,with a maximum interest rate of 7 percent. AB811 Evaluation 5 With this escalator, the annual cost of electricity from the system would equal the PG&E rate at year 18. PG&E Average Retail Electric Rates 20 1s 3 Histrorical 0 Y 10 linear trendline m — a w U 0 data: California Energy Commission The average residential system cost would have to be approximately $10,000 ($3/watt), financed at 2 percent in order for electricity cost(hence annual property tax increase)to equal the current cost from PG&E. Currently, these costs and interest rates are unavailable. Participation at current costs and interest rates will probably be low given the differential between property tax increase and current annual electricity bill. If we assume that the average residential system cost could be brought down to $10,000 and an average non-residential cost of$75,000 and that a 2 percent interest rate was available, we could then project a higher rate of property owner participation and thus a higher likelihood of meeting the target. For a total of 44,000 residential systems and 14,000 non-residential systems, the total amount financed (bond amount) would be approximately $1.5 billion at$3/watt and 2 percent interest rate. At $7/watt and 3.5 percent interest rate, $3.5 billion is the total financed by 2015. This would reach the overall target level of 25 percent below the 1990 level for the electricity sector(for residential and non-residential). Natural Gas/Propane Emission Reduction The Energy-1 OTM program was used to estimate the effect of building envelope retrofit on natural gas use for a typical residence in Sonoma County. The building retrofit measures that were simulated were: • Building shell air seal • Increasing attic insulation from R-19 to R-60 • Install high efficiency (92 percent AFUE) gas furnace • Programmable thermostat AB811 Evaluation 6 These measures have an estimated average total cost of approximately $6,300. The building simulation indicates that these upgrades will save approximately $400/year and will reduce GHG emissions by 29 percent. The annual payment on $6,300 at 3.5 percent interest over 30 years is $342. This represents an attractive tradeoff for the property owner Additionally, other measures such as replacing and sealing ducts and window upgrades could be cost effective. These measures add $5,250 and $5,000 to the cost respectively. The annual property tax increase if the window upgrade or the duct seal was selected would be approximately $650, if the terms were the same as above. Whether or not these measures or others would produce equivalent or greater energy savings would have to be determined on a case-by-case basis. Most efficiency measures were found to reduce combined electricity and natural gas costs more than the annual property tax increase required to repay the loan at 3 percent interest over 30 years. However, the particular"optimal"package would have to be determined for each home, based on a detailed energy audit. It should also be noted that higher interest rates could significantly reduce the value proposition to the customer, and thus the uptake of this program. Conclusion AB811 provides powerful financial tools to property owners to enable them to install aggressive energy efficiency and distributed renewable generation measures. Low interest rates combined with ease of obtaining financing should make it possible for property owners to make significant energy and GHG emission reductions, cost-effectively, in their buildings. However, AB811 is not a panacea that will address all applications equally well. We found in this analysis that residential solar PV installations do not make economic sense for homeowners, even under the most liberal cost and financing assumptions. An average residential PV installation would result in annual.property tax payments that are double the current average residential electricity bill. We assume that this would not be attractive to most residential property owners. We anticipate that as long as the tax benefits are kept in place, that there would be an increase in the uptake of non-residential PV systems, for business owners that own their own property. However, we found that the most effective potential use of AB811 financing would be for building envelope efficiency improvements. A package of measures including building shell air sealing, increased attic insulation,programmable thermostat, high efficiency furnace upgrade, and possibly either duct replacement/sealing or window upgrades would result in a reduction in annual energy cost greater than the AB811 property tax increase. It is important to emphasize that the interest rate of the available financing is critically important in determining whether there is a negative or positive effect on the customer's cash flow. We think that replacement of natural gas furnaces with air-source heat pumps and replacement of gas water heaters with domestic solar hot water heaters could also be cost effective. These replacements would virtually eliminate natural gas and propane use, and would potentially be cost effective using AB811 financing. AB811 Evaluation 7 The authors believe that AB811 can be used in conjunction with other financing systems including PAYS ® and Community Choice Aggregation to maximize the GHG emissions impact of electricity and natural gas use for the lowest possible cost.9 Reaching the 2015 GHG Reduction Target in the Residential and Commercial Electricity Sector with AB 811 funded PV installations SC Po ulation 2005 Persons/Acct 466,8911 2.00436599 Persons/AccY 2015 Adjusted to match 2015 projected consumption) 1.94 2005 Sonoma County Residential and Commercial Electricity use, 2005 Note:90%is Number of 2005 Average Average 90% used to estimate Accounts 2005 Total kWh Annual E(kWh) production level system size Residential 232,937 1,208,035,188 5,186 4,667 Commercial 31,181 1,212,494,587 38,886 34,997 2015 PG&E Emission Factor 0:362 IbikWh Note:Assuming per account consumption remains level ons GHG(ZU73 total emission Projected Pop 2015 accounts total kWh factor) 524,176 270,194 1,401,252,851 253,627 Commercial 330,100 Projected 2015 Use and Target 2015 Total GHG tons Target GHG tons GHG tons Level(25%below reduction below (projected) 1990projected 2015 Residential 253,627 209,632 43,995 Commercial 330,100 239,136 90,964 Residential Target 43,995 tons to reduce 87,989,539 lbs to reduce 207,586,096 kWh to reduce 44,475 total installs Commercial Target 90,964 tons to reduce 181,928.884 lbs to reduce 498,435,299 kWh to reduce O 14,242 total installs T- 9 For a fuller discussion of the complementary set of fmancing tools,please see the Sonoma County Community Climate Action Plan available online at(www.coololan.ore). AB811 Evaluation 8 Average Res PV arra size Average ComY PV array size 3.3 kW 25 kW 8760 hr 8760 hr 16.0% cf 16.0% cf 4,625 kWh 35,040 kWh 0.362 lbs/kWh 0.362 lbs/kW h 0.8 tons/ ear(20 5) 6.3 tons/ ear 2015 7 $/watt installed 7 $/watt installed Average Res PV system cost I Avera a Comm?PV s stem cost $300 permitfees?l $1,000 permit fees? $23,400 total cost including permit cos $176,000 total cost 3.5% interest rate 3.5% interest rate ($1,272.291 annual P&I payment $9,569.35 annual P&I a ent $105.08 $1,260.92 $38,168.67 total payments over period $287,080.63 total payments over 30 years 0.25% program overhead 0.50% program overhead $58.50 annual program cost $880.00 lannuall program cost $300 annual O&M $1,000 lannual O&M" ($1,630.79) total annual cost $1,619.42 total annual cost monthly pay 30 firiancin 301yr life $10,755.00 itotal lifecycle program cost+O& $56,400.00 Itotal lifecycle program cost+0&M ($48,923.67)1 total cost over period I ($343,480.63) total cost over 30 years Levelized Cost Residential Levelized Cost Commercial 138,758 total production over contract peri 1,051,200 total production over 30 years ($0.35) $/kWh over financing period I ($0.33) $/kWh over 30 year life of system $0.26 Average PG&E over period(4.4%escalator) $1,040,711,859 Total residential program cost 147 installed residential MW $2,506,623,924 Total commercial program cost 356 installed commercial MW AB811 Evaluation 9 i Building Simulation Results for Basic Efficiency Retrofit Description* Keference ase Low-Energy Case Weather file: SANTA ROSA.ET1 SANTA ROSA.ET1 Floor Area, ft2 1200 1200 Surface Area ft2 3672.8 3672.8 Volume, ft' 10800 10800 Total Conduction UA, Btu/h-F 694.3 650.7 Average U-value, Btu/hr-ft2-F 0.189 0.177 Wall Construction 2 x 4 frame, 2 x 4 frame, R=12.6 R=12.6 Roof Construction attic, r-19, attic, r-60, Attic insulation upgrade R=18.9 R=60.2 Cost: $788 Slab on Grade, Slab on Grade, Floor type, insulation Reff=9.4 Reff=9.4 Window 4060 single, alum, 4060 single, alum, Construction U=1.23 U=1.23 Window Shading None None Wall total gross area, ft2 1273 1273 Roof total gross area, ft2 1200 1200 Ground total gross area, ft2 1200 1200 Window total gross area, ft2 336 336 Windows N/FJS/W:Roo 4/3/4/3:0 4/3/413:0 sing e, Glazing name single, U=1.11 1 11 AB811 Evaluation 10 Operating parameters for zone 1 HVAC system DX Cooling with Gas DX Cooling with Gas Furnace Furnace Rated Output (Heat/SCool TCool), kBtu/h 32/27/36 32/27/36 Rated Air Flow/MOOA,cfm 1200/0 1200/0 Heating thermostat 67.0 OF,no 67.0 OF, setback to programmable thermostat setback 62.0 OF Cost: $213 Cooling thermostat 120.0 OF, no 120.0 OF, setup to setup 125.0 OF Heat/cool High efficiency furnace erformance eff=80,EER=8.9 eff=92,EER=13.0 Cost: $3290 Economizer?ltype no/NA no/NA Duct leaks/conduction losses total% 11/10 11/10 Peak Gains; IL,EL,HW,OT; W/ft2 0.20/0.04/0.66/0.50 0.20/0.04/0.66/0.50 Added mass? none none Daylighting? no no Building envelope air seal Infiltration, int ELA=169.3 ELA=45.8 Cost: $2000 Results: Energy cost 1.320$/Therm,0.160$ 1.320$/Therm,0.160 /kWh,0.000$/kW /kWh,0.000$/kW 01-Jan to 31- 01-Jan to 31- Energy use reduction: Simulation dates Dec Dec 30% Energy use, kBtu 89613 63053 Ener cost, $ 1833 1438 Energy cost reduction: Total Electric(**), $395 kWh 5659 5268 IntemallExtemal lights, kWh 943/103 943/103 Heating/Cooling/Fan +Aux, kWh 0/0/644 0/0/252 Hot water/Other, kWh 0/3970 0/3970 Peak Electric, kW 1.3 1.1 Fuel, Wheat/total, kStu 11738/58564/70302 11738/33340/45078 Emissions, CO2 emissions reduction: CO2/SO2/NOx, lbs 11070/52/32 7900/47/27 29% AB811 Evaluation 11 Page 1 of 1 Council, SloOtlf From: Christine Mulholland [cdev@thegrid.net] Sent: Mon 4/13/2009 12:04 PM To: Council,SloCity Cc: Subject: Budget-B-3 Attachments: Dear Mayor and Council members, I recognize that the current budget you are working on is fraught with difficulties in these lean fiscal times. I appreciate your efforts and encourage attention to details. I am concerned with the language in the staff report for April 14,2009, item B-3, on pages 54 and 55. There does not seem to be consistency with the General Plan regarding the eventual protection of the ag land from the 3 properties that include the current city open space of 13 acres from the former McBride property, and the land to be preserved in the future when development occurs on the Madonna and Dalidio properties. Specifically, I disagree with the language that proposes less than half of the Madonna property remain in open space. I have reviewed the development proposal for the"gap"area,and find the project lacking in adherence to the General Plan. Roads are development,and must not be considered in the portion of land to be preserved. Roads,and the land on which they are built, must come from the half of the properties that are proposed for development. The General Pian calls for half of ggo of the 3 properties to be preserved in open space. My suggestion is to rezone the entire 90 acres as AG zoning. Do not count land for roads as OS/AG. Require new development to to preserve, at a minimum, half the land when proposing to develop the rest. Please request that staff rewrite the work plan to conform with the General Plan. No roads in AG/OS! Sincerely, Christine Mulholland 2=UNCIL 2 cDD DIR RED FILE McAeUH#V-f- 2-FIN DIR ffAeAeWCtMMa&0'FIRE CHIEF MEETING AGENDA O'ATTORNEY WPW DIR pAT I 122 ITEM # R3- O CLERK/ORIG 17! POLICE CHF .__sC I I-�DEET HEADS EC OIR13 (b CUTLCIA X11 DIP i A +Wrl` e --C4CU&&L, https://mail.slocity.org/exchange/s locitycouncil/InboxBudget%20-%20B-3.EML?Cmd=o... 4/14/2009 RED FILL 2 UiuNCIL C'1'CDD DIR MEETING AGENDA d 7° U� Z LAIN DIR AQ�rug/nQ_ 'FIRE CHIEF DATEy_u_ ITEM # �3— JLJ670FINEY I 'PW DIR Rf� E'CFRF tERF�O From: Ashbaugh, John j ❑ EPT HEADS L'�i REC DIR Sent: Mon 4/13/2009 4:41 PMPIt3L'�i UTIL DIR To: Hampian, Ken; Clark, Claire; Mandeville, John; Murry, Kim ,CZHR DIF Cc: Statler, Bill A/C�JT//nESI CpudC�L Subject: Major Goals work program - a possible augmentation f-(.0+ tri After reviewing the staff report for the Major City Goals Work Programs, I'd like to propose that staff and the Council support investigation and possible implementation of an AB 811-type "green financing"program for a range of eligible projects in the City of San Luis Obispo. This program, described further below, would be in direct support of BOTH the"Major Goal" of Economic Development, as well as the "Other Objective" of Greenhouse Gas Reduction and Energy Conservation. The staff report we have before us now makes one reference to such a program on p. 133-61, but that is only in reference to PG&E as a stakeholder in the Greenhouse Gas Reduction/Energy Conservation program. It is not included as a specific action item in the 12 tasks listed in the work program for that objective, although Community Development staff have indicated that they intend to investigate this program as one component of the Climate Action Plan, due to be completed by September 2010. I am fully in support of doing a Climate Action Plan, but we should not relegate staff work on the feasibility of an energy financing program to that larger project, however important it is. Rather, we should place an emphasis on earlier action toward possible creation of an energy facilities financing district within the Major City Goal of Economic Development. I would urge the Council to consider directing staff to initiate a feasibility study as an integral part of that work program. The concept of an Energy Financing District has been already been introduced to various City staff and to some of us on the Council by representatives from the City of Berkeley. PG&E Government Relations Manager Patricia Wilmore has hosted two of these meetings, including one just last Thursday. Berkeley has initiated one of the first and most successful Energy Financing Districts (see their web site at http://w-ww.ci.berkelev.ca.us/ContentDisplay.aspx?id=26580)—but there are several other similar programs already in place in Palm Desert, Sonoma County, and San Diego. The essence of an AB 811 program is that the city provides below-market financing through a VOLUNTARY assessment that is paid through a property tax lien in order to encourage development of solar installations, as well as other energy efficiency improvements. Reduced utility bills are the primary incentive that would attract borrowers, although a combination of State and Federal tax incentives and rebates are also stimulating a lot of interest in these investments. For more evidence of local interest in creating such a program NOW rather than later, please see the"Viewpoint" column written by Nick Alter of SLO Green Build in the Tribune last month (http://www.sanluisobispo.com/letters-to-the-editor/story/660856.html). I Both Kim Murry and I attended a briefing on this program sponsored by PG&E last Thursday, and we learned the following information that should spur further interest in this type of financing: 1. Eligible projects—at least for a charter city such as ours—need not be restricted to solar photovoltaics or similar energy conservation measures. In fact, this type of financing could be used to support seismic retrofitting and water conservation as well, providing that we can demonstrate a need and assuming that there is interest by potential borrowers and investors. 2. Sources of funding to support this program include not only the sale of assessment bonds on the municipal bond market; there is also a private bond market for these vehicles, and some cities and counties even lend money to the financing pool from their own reserve funds. Additionally. some Federal stimulus funds might be directed toward this purpose —but these are all topics for a feasibility study to address. 1 While these financing districts take a little time and staff work to implement, once a commitment is made it is possible to see results within a mere three to six months. For example, Palm Desert has already committed over $7.5 million to 206 borrowers for their program. Berkeley's program was first announced on November 5, 2008 and "sold out" their first 40 loan applications within about 20 minutes. In summary, if we act promptly and decisively—beginning Tuesday evening—we should seek positive results from our goal-setting exercise without taking all the time required to develop a comprehensive Climate Action Plan. Thanks for considering this proposal. John B. Ashbaugh San Luis Obispo City Council From: Marta Peluso [mailto:director@artsobispo.org] Senn Wed 4/8/2009 2:53 PM To: Council, SloCity Subject: Art.in Public Places Dear Mayor Dave Romero, Vice Mayor Allen Settle and Counci Members John Ashbaugh, Andrew Carter and Jan Howell Marx, Attached is a letter from ARTS Obispo, San Luis Obispo County Arts Council, concerning the City of SLO's Art in Public Places program. This program has been successfully built by the efforts of many individuals over the past 2 decades. We appreciate your consideration of our attached proposal concerning APP. Sincerely, Marta Peluso FLED FILE �OUNCIL EJC D DIR - MEETING AGENDA IN DIR ITEM #2 �ST�T NEY ePW DIR IRECHIEF DA Q'CLERK/ORIG Er-POLICE CHF ❑ QE�j�T�HEADS EHEC DIR -L-�� DIR -� - E HR DIR � Crrh �G2 �CG� ' April 8, 2009 Mayor Dave Romero& San Luis Obispo City Council Members ARTS O B I S P O The San Luis Obispo County Arts Council, also known as ARTS Son tArtss Counc l°YntY Obispo, and the City of San Luis Obispo have historically had an exceptional working relationship. 570 Higuera St.,Ste.175 Since we all are currently victims to a devastating financial crisis, ARTS P.O.Box 1710 San Luis Obispo,CA 93406 Obispo would like to offer for your consideration the following recommendation concerning SLO City's Art in Public Places program. Phone:(805)5449251 Fax:(soy) ospzz rtsobi oF6ce@abispo.org According to the City of San Luis Obispo's guidelines, funds for public ww .artsobispo.org art are generated by I% of all City CII'projects. In addition to the City _ funds, there is also a'/z% contribution from private development that goes into this public art fund. These funds are designated for the public Board Members art program only. ARTS Obispo's suggestion is to lower the City's I% Steve Bland,President contribution to 1/s%. This action will both lighten the City's obligation Man Kay Harrington,Vice-President and ensure that some funds are reserved for public art. The 1/z% Julie Frankel,secretary contribution will also parallel funds contributed by private developers. Fred Ventura,Treasurer "``""da Forbes Although this recommendation may seem self-defeating to a Crissal-tes m Mcrvl Perlocr,. :; nonprofit arts group that has worked so hard alongside the City of And Reath,rs ofirro SLO to build an Art in Public Places program, we feel it is Deborah SPatarore reasonable compromise in these difficult financial times. This Jmevoigts suggestion will hopefully assist the City and, at the same time, s "alis protect the exemplary public art program that has been established through commitment and thoughtful and diligent planning by the City for many years. Staff Marta Peluso ARTS Obispo regrets the loss of public art funds during this period Executive Director of economic struggle, but we realize that it is important for all of us Alissa Maddren Program Director to act in the spirit of cooperation during these difficult times. Thank Emdy.Jagger you for your consideration in this matter. Office Manager Sara Hemrichs Arts in F lucarion&Web Respectfully submitted, Coordinator Jamie Diem,AmeriCorps Volunteer Marta Peluso, Executive Director Coordinator & Ann Ream, ARTS Obispo's Art in Public Places Committee Chair Advancing the Arts in San Luis Obispo County