HomeMy WebLinkAbout06-23-2015 PH1 Budget AdoptionY o,
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Council Agenda Report
FROM: Katie Lichtig, City Manager
Wayne Padilla, Director of Finance & Information Technology
SUBJECT: ADOPTION OF 2015-17 FINANCIAL PLAN
RECOMMENDATION
Meeting Date: 6-23-15
Item Number: PH1
Adopt a resolution approving the 2015-17 Financial Plan as amended with the changes shown in
Exhibit A of the recommended resolution (Attachment 1).
DISCUSSION
After extensive community participation and nine Council budget workshops and hearings beginning
in November 2014, the 2015-17 Financial Plan is ready for adoption. Key features of the upcoming
two-year budget include:
• Ensures the policy of maintaining an appropriate reserve or working capital amount in the
General and Enterprise Funds;
• Uses fund balance above the required minimums for one-time, not ongoing, purposes;
• Invests in the future by funding maintenance and improvements to City essential
infrastructure, fleet, existing facilities, and information technology; and
• Honors and implements Measure G priorities, the 1/2 -percent local sales tax approved by
voters in 2014.
The 2015-17 Financial Plan includes city-wide budget appropriations for the two year period in the
amount of $122.9 million as summarized below:
Although the City adopts a two-year Financial Plan, appropriations continue to be made annually
under the process. The City Council must adopt the 2015-16 Budget by June 30, 2015. Traditionally,
this has been accomplished by resolution. The Budget Resolution is provided as Attachment 1 to this
report.
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MUMMA i
t i I IIIWFT�s
015-16
2016-17
Operating Programs
Capital Improvement Plan
Debt Service
2,979,135
722,280,267
7,615,525
$ 94,440,166
104,730,000
12,761,766
TOTAL
1 $122,874,927
1 $211,931,932
Although the City adopts a two-year Financial Plan, appropriations continue to be made annually
under the process. The City Council must adopt the 2015-16 Budget by June 30, 2015. Traditionally,
this has been accomplished by resolution. The Budget Resolution is provided as Attachment 1 to this
report.
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Adoption of 2015-17 Financial Plan Page 2
Changes to the Preliminary Financial Plan
In preparing for the adoption of the budget at this meeting, the City Council has held three budget
workshops and hearings on June 9th, 1 lth, and 16th, 2015. During those workshops, several budget
changes were directed or needed; including but not limited to the following:
• Funding for the Jack House elevator removal;
• Funding for the Octagon Barn;
• Additional Park Ranger service for protection and maintenance of the City's Open Space;
• Revised work plan for the Neighborhood Wellness Other Important Objective;
• Amending the list of projects in the Bicycle Transportation Implementation CIP;
• Local Revenue Measure Summary reflecting revised funded projects (Attachment 2); and
• Recognize debt service proceeds for Reservoir #2 construction.
In addition, a number of amendments to the Financial Plan have been identified to reflect information
that was learned after the Preliminary Financial Plan was printed (such as new Budget and Fiscal
Policies that were inadvertently omitted from the draft Financial Plan). All of these changes are listed
in Exhibit A of the recommended resolution (Attachment 1).
Final Documents
After Council adoption of the 2015-17 Financial Plan, staff will prepare and distribute a final version
of both the Financial Plan and Capital Improvement Plan reflecting these changes and will correct
any minor format and typographical changes necessary to produce the final printed copies. Along
with a standard printed distribution of these documents, they will also be published on the City's web
site.
Additionally, staff will prepare a Budget -in -Brief that highlights the City's budget process, key
budget features, major City goals and basic "budget facts." This budget summary is widely
distributed: it will be available at all public counters, included with the utility billings in August and
published on the City's website. With this broad distribution, it will also meet the Measure G
reporting commitments to the community on the use of these funds.
Ongoing Monitoring
Adoption of the Financial Plan is the beginning of a continuous financial management process.
Ongoing monitoring efforts include:
1. Interim Financial Reports. On-line access to up-to-date financial information is provided to
staff throughout the organization. Additionally, financial reports are prepared monthly to
monitor the City's fiscal condition, and a concise but comprehensive report is issued on a
quarterly basis. These are complemented by special reports such as the quarterly Sales Tax
Newsletter, Monthly TOT Report and Quarterly Investment Report.
2. Goal Status Reports. Formal reports are provided to the Council on status of Major City Goals,
other important objectives and major Capital Improvement Plan projects at specific intervals
during the year: with the Mid -Year Budget Review and again in September. These reports are
prepared in addition to ongoing updates through Agenda reports, Council Notes, and other
special reports. The report will also include progress in meeting new performance measures that
were added to the Financial Plan.
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Adoption of 2015-17 Financial Plan Page 3
3. Mid -Year Budget Reviews. The Council formally reviews the City's financial condition and
makes course corrections as needed in February, based on the first six months of the fiscal year.
4. General Fund Five -Year Fiscal Forecast. Throughout the Financial Plan period, the Council
will receive updates to the Five -Year Fiscal Forecast with the Mid -Year Budget Review and the
Financial Plan Supplement. Additional updates may be provided if large or unexpected changes
to the General Fund occur.
5. Financial Plan Supplement for 2015-16. While the City prepares a two-year Financial Plan,
appropriations are still made annually. As such, staff will return to the Council in June 2016 for
formal approval of the 2016-17 Budget. However, these "second year" appropriations will be
based on the foundation developed during the two-year planning and budgetary process. In short,
the Supplement is much like a mid -year budget review, and focuses on changes since adoption of
the Financial Plan.
6. Comprehensive Annual Financial Report. This year-end report shows the final results of the
City's financial operations for all funds. It includes audited financial statements by the City's
independent certified public accountant as well as a comprehensive transmittal memorandum
highlighting key trends and findings about the City's financial condition.
Budget Process Review
Consistent with our long-standing practice, once the Financial Plan process has concluded, we will
review areas where it went well, and areas where we can improve in the future. This will include
soliciting comments from the City Council as well as Department Heads, Budget Review Team and
key staff from the departments involved in the budget preparation process. This type of analysis has
been very valuable in the past in surfacing areas of improvement. After completing this review, we
will return to the Council with recommendations for the 2017-19 Financial Plan process.
ATTACHMENTS
1. Final Budget Resolution approving the 2015-17 Financial Plan
2. Revised Local Revenue Measure Funding Summary
Im 1W Im
tAcouncil agenda reports\2015\2015-06-23 (budget adoption)\budget adoption\final budget resolution 2015-17.docx
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Attachment 1
RESOLUTION NO. (2015 SERIES)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
APPROVING THE 2015-17 FINANCIAL PLAN AND 2015-16 BUDGET
WHEREAS, in accordance with San Luis Obispo Charter Section 802, the City Manager has
submitted the 2015-17 Financial Plan to the Council for its review and consideration consistent with budget
policies and objectives established by the Council; and
WHEREAS, the 2015-17 Financial Plan is based upon extensive public comment and direction of the
Council after scheduled budget workshops and public hearings held on June 9th, 11th, 16th and 23rd.
NOW, THEREFORE, be it resolved by the Council of the City of San Luis Obispo that:
The Preliminary 2015-17 Financial Plan, amended for the items listed in Exhibit A, which is
incorporated by reference herein, is hereby approved and the operating, debt service and capital
improvement plan budget for the fiscal year beginning July 1, 2015 and ending June 30, 2016 is
hereby adopted.
2. The Budget and Fiscal Policies included in the Preliminary 2015-17 Financial Plan and amended as
shown in Exhibit A are hereby approved.
3. The 2014-15 Water Fund and Sewer Fund projected amounts shown in the Fund Review document of
each fund are hereby approved as the 2014-15 amended budget for each fund.
4. Where fund reserves are used as shown in the 2015-17 Financial Plan, restricted reserves shall be
drawn down in advance of any draws from unrestricted reserves and when unrestricted reserve
amounts are drawn down, committed and assigned amounts shall be used in advance of any draws
from unassigned reserve amounts, whenever possible.
5. The City Manager is delegated the authority to approve format and typographical changes found
within the Preliminary 2015-17 Financial Plan as needed.
On motion of
following vote:
AYES:
NOTE:
ABSENT:
seconded by
the foregoing Resolution was passed and adopted on June 23, 2015.
Mayor Jan Marx
ATTEST:
Anthony Mejia, City Clerk
and on the
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APPROVED:
Christine Dietrick, City Attorney
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Exhibit A — Changes to the Preliminary Budget
2015-16 2016-17
Increase CIP total for Jack House elevator repair
Increase CIP expenses in Facility Maintenance Fund $ 22,000
Increase CIP expenses in Local Revenue Measure Fund $ 22,000
Reflect Donation Amount of $22,000; Reflect use of Local Revenue Measure in amount of $22,000
Increase CIP total for Octagon Barn contribution
Increase CIP expenses in Local Revenue Measure Fund $206,000
Increase CIP total for Ranger Vehicle
Increase CIP expenses in Local Revenue Measure Fund $ 35,000
Increase Operating Costs for Ranger Program
Increase Ranger program staffing costs to reflect two 30 hr. /wk employees (1.5 FTE)
supported by General Fund $75,000 $ 75,000
Laguna Lake ADA Trail
Reduce Local Revenue Measure funding for this project ($250,000)
Increase Parkland Development Fund CIP to support this project $250,000
Reduce Storm Drain Replacement CIP design costs
Reduce Local Revenue Measure CIP for Storm Drain Replacement ($ 13,000)
Reduce appropriation for employee leave payouts ($50,000) ($ 50,000)
Reduce salary projections ($25,000) ($ 25,000)
Water Enterprise Fund
Increase operating costs for drought response strategy $179,000
Recognize debt proceeds for Reservoir #2 construction $5.0 million
Recognize debt service on above borrowing $ 367,909
Reflect new user fees resulting from Council action taken on June 16, 2015
Sewer Enterprise Fund
Reflect new user fees resulting from Council action taken on June 16, 2015
Parking Enterprise Fund
Reduce operating costs to reflect savings from lot closures due to new
Development ($40,800) ($41,700)
PH1 - 7
Policy Amendments:
• Page 1127— Productivity. Add the following language which was overlooked for inclusion in the
Preliminary Financial Plan: "Maintaining City purchasing policies and procedures that are as efficient
and effective as possible."
Page H15-16 — Fund Balance and Reserves. Add the following language, which was inadvertently
omitted, should be included in the Financial Plan:
"The Infrastructure Investment Capital Fund has been created to help the City realize the
benefits of growth that is well-planned, and that would not occur in a timely manner without
City participation in the financing of supporting infrastructure. With respect to resources that
are expended from this fund:
1) The use of City funds shall not offset any cost that would be legally required to be
paid to meet the fair share obligation of the developer requesting City investment in an
infrastructure project.
2) The use of City funds shall not offset a private project's specific mitigation cost
identified through the environmental review process or under existing regulations or policies.
3) The use of City funds shall support a project that would not otherwise be feasible in a
timely manner due to the economic environment, the timing of the project, or other
constraints outside the control of the project proponents or the City.
4) The project proponents shall demonstrate a significant public benefit associated with
construction of the project that merits City participation.
5) Approved projects will have a measurable outcome that will be monitored and
reported to the Council and the public."
Revise the Bicycle Transportation Plan Implementation CIP project to reflect the following
allocation for a total proiect cost of $400,000:
1). BTP Prioritization, Education and Advocacy Program $ 5,000
2). Active Transportation, Education and Advocacy Program $ 10,000
3) Highland & Chorro Bicycle Improvements $ 20,000
4) Boysen & Santa Rosa Crossing Project Study Report deferred
5) Prado Rd. Class I Connection Proj. Development & Right -of -Way $100,000
6) Chorro & Foothill Bike Box $ 10,000
7) RRST Class I Connection Laurel & Orcutt $150,000
8) Bicycle & Pedestrian Grants Support $ 15,000
9) Broad Street Bike Boulevard Plan Development $ 90,000
Revise the Neighborhood Compatibility Other Important Objective work program to include a
task to consider alternatives and develop a recommendation to implement Land Use and
Circulation Element Program 2.13 with a due date of June 30, 2016.
PH1 - 8
Attachment 2
The following uses of local sales tax revenue are consistent with Council goals and objectives, the spending priorities of voter -
approved Local Revenue Measure G, and the recommendations of the Citizens' Revenue Enhancement Oversight Commission
(REOC).
Item
Open Space Preservation
Operating Programs
F2015-16 2016-17
1 CIP
1 2015-16
2016-17
General Fund
2 -yr Total
Laguna Lake Dredging and Sediment Management
450,000
450,000
Laguna .. Take PaAE P. AT..t.. al D e.,efye APA A ,.,sable
TraA
250,000
250,000-
50nnnOpen
OpenSpace Acquisition
250,000
250,000
500,000
Open Space Maintenance
285,000
104 099
139,000
285,000
570,000
Ranger Program Pickup Truck (23 in 15-16)
139,000
Natural Resources (Open Space Wildfire Fuel
Reduction)
Ranger Services (Ranger Staffing; FTE = 2)
5,000
1 5,000
1
10,000
121,590
129,530
251,120
Subtotal
1,920,120_
Bicycle and Pedestrian Improvements
Bicycle Facility Improvements
100,000
100,000
200,000
Bicycle Transportation Plan Implementation
400,000
400,000
Bike Bridge at Phillips Lane
250,000
250,000
Bob Jones Trail Octagon Barn Connection
50,000
50,000
Downtown Renewal
6,000
6,000
Pedestrian and Bicycle Pathway Maintenance
100,000
60,000
160,000
Replacement of Lighted Crosswalk on Higuera Street
Safe Route to School Improvements -Pacheco and Bishop
Peak
Sidewalk and Tree Replacements
Sidewalk Ramp Construction
43,500
43,500
45,000
45,000
100,000
100,000
200,000
45,000
45,000
Traffic, Bicycle & Pedestrian Marking Replacement
20,000
20,000
Transportation Planning and Engineering (Engineers,
Bike Coordinator; FTE = 1.6)
Subtotal
Traffic Congestion Relief / Safety Improvements
173,799 1 175,948
349,747
1,769,247
Monterey & Osos Traffic Signal Safety Upgrade
225,000
225,000
Neighborhood Traffic Improvements
20,000
20,000
40,000
Parking Structures Assessment and Rehabilitation Study
8,333
8,333
Signals and Lighting Maintenance Lift Truck
91,000
91,000
South & Parker Traffic Safety Project: Median
30,000
30,000
Traffic Operation Improvement Projects
30,000
30,000
Traffic Safety Improvement Projects
25,000
25,000
50,000
Transportation Radar Trailer
15,000
15,000
Signal and Light Maintenance (Technician; FTE = 1)
1 96,866 1 98,127
1
194,993
Subtotal
I I
1
684,326
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Attachment 2
"Ertl aa.uj; r iv;■ aui5 �.rr vv.. v. c.. . ....0
Item 2015-16 2016-17 2015-16 2016-17 2 -yr Total
Public Safety
911 Phone System 245,000 245,000
Computer -Aided Dispatch 25,000 25,000
Fire Electronic Patient Care Reporting System
53,800
25,700
79,500
Fire Emergency Response Forklift
50,000
50,000
Fire Emergency Response SUV
99,400
99,400
Fire Emergency Response Van with Ambulance Package
180,000
180,000
Fire Prevention SUV (2 in 15-16)
91,000
91,000
Fire Station 2 Exterior Driveway Ramp Replacement
10,000
10,000
Fire Station 2 Restroom and Dorms Privacy
Modifications
160,000
160,000
Police Administration Sedan
38,500
38,500
Police CAD hardware
250,000
250,000
Police Investigations Sedans (2 in 15-16)
66,600
66,600
Police Patrol Sedans (2 in 15-16, 3 in 16-17)
83,500
129,700
213,200
Police Patrol SUV
53,000
53,000
Police Support Services Pickup
31,400
31,400
Police Traffic Safety Motorcycles (2, 1)
63,400
34,200
97,600
Policy Facility Site Assessment
45,000
45,000
Patrol Services (Officers, Sergeant; FTE = 4)
764,741
786,655
1,551,396
Subtotal
3,286,596
Neighborhood Street Paving
Capital Engineering Pickup Truck
31,500
31,500
Street Reconstruction & Resurfacing
1,566,817
1,630,700
3,197,517
Streets Maintenance Asphalt Grinder & Trailer Mount
89,100
89,100
Streets Maintenance Backhoe
128,000
128,000
Streets Maintenance Trucks
69,000
69,000
CIP Project Engineering (Inspector; FTE = 1)
109,234
116,258
225,492
Streets and Sidewalk Maintenance (Maintenance
Worker; FTE = 1) 80,597 85,003 165,600
Subtotal 3,906,209
Code Enforcement
Mission Plaza Railing Upgrade
30,000
30,000
60,000
Building and Safety (Code Enforcement Officer,
Neighborhood Services Specialists; FTE = 3)
247,185
256,639
503,824
Subtotal
563,824
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Attachment 2
"Ertl aiii
Item 2015-16 2016-17 1 2015-16 1 2016-17 2 -yr Total
Flood Protection
Broad Street Bank Reinforcement 40,000 40,000
Flood Control Pickup Truck
2015-16 Revenue
7,133,054
28,500
50,000
28,500
Marsh Street Bridge Replacement
2016-17 Anticipated Interest
50,000
2014-15 Projected Fund Balance
734,000
734,000
Storm Drain System Replacement
Toro Street Bank Stabilization
2015-17 Program Allocations
16,756,109
561,500
548,500
50,000
574,300
1,122,800
577,878
583,794
50,000
1,161,672
Creek and Flood Protection (Collection Operators,
Stormwater Management Plan; FTE = 6)
Subtotal
3,136, 972
Parks and Recreation/Senior Programs and Facilities
Golf Course Pickup Truck
28,500
28,500
Olympic Pool Replastering
290,000
290,000
Park Major Maintenance & Repairs
86,000
220,000
306,000
Restroom Replacement and Remodeling
400,000
80,000
480,000
Octagon Barn Contribution
206,000
206,000
Jack House Elevator Removal
22,000
22,000
Parks and Landscape Maintenance (Maintenance
Worker; FTE = 1)
77,658
78,657
156,315
Subtotal
1,488,815
Total
2,254,548
2,315,611
6,635,350
5,113,100
16,756,109
Local Sales Tax Revenues
Amount
2015-16 Revenue
7,133,054
2015-16 Anticipated Interest
50,000
2016-17 Revenue
7,432,546
2016-17 Anticipated Interest
50,000
2014-15 Projected Fund Balance
2,197,000
Total
16,862,600
2015-17 Program Allocations
16,756,109
Undesignated Measure G funds
106,491
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�y Y (�1
2015-17 Financial Plan and
CITY 4F Smi Luis OBIspo
Budget Adoption
June 23. 2015
Budget Workshop Series
Preliminary
2015-17
Financial Plan
2015-16 Budget
June 9
1. Key Budget Issues
2. Mayor City Goal Work Programs
3. General Fund Operating Programs
June 11
1. Capital Improvement Plan
June 16
1. Enterprise Fund Reviews
2. Water/Sewer Rate Reviews
June 23
1. Budget Adoption
Fiscal Responsibility Philosophy
1. Informed Decision-making
2. Shared responsibility
3. Increased Transparency
4. Aligned Investments
5. Diversified and Aligned Revenue Sources
6. Long -Term Unfunded Liabilities
7. Continued Efficiency and Effectiveness
Other Financial Plan Highlights:
All Funds
2015-16 Expenditures by Fund Type
($122.9 million)
2015-16 Expenditures by Category
($122.9 million)
Debt Se
6%
Fiscal Sustainability: Now and in the Future
Financial Plan (millions)
Operating Programs 79.7 88.5 93.0 94.5
Capital Improvement Plan
Debt Service
Total
H6'1'1
$103.7
01101
10.0
$172.1
22.3
7.6
$122.9
104.7
12.8
$212.0
1. Operating revenues are equal to or greater than operating expenditures, including
debt service, across all City funds.
2. Continued investment in capital improvements.
3. Prefund portions of long-term liabilities.
4. Maintaining and enhancing quality of life for the community through funding for
new or expanded services.
Major City Goals & Other Important Objectives
1%
2015-17 Major City Goal/Objective
Capital Expenditures ($20.9M)
■ Open Space
Preservation
■ Multimodal
Transportation
Housing
■ Neighborhood
Wellness
■ Laguna Lake
Restoration
Downtown
2015-17 Major City Goal/Objective
Operating Expenditures ($3.2M)
■ Open Space
Preservation
■ Multimodal
Transportation
it Housing
■ Neighborhood
Wellness
■ Fiscal Sustainability
■ Downtown
Local Revenue Measure Expenditures
• Voter -approved sales
tax to protect and
maintain essential
services and facilities.
• Expenditures have
been reviewed and
approved by the
Citizen's Revenue
Enhancement
Oversight Commission
(REOC).
2015-17 Local Revenue Measure Expenditures ($16.8M)
(operating & capital)
Open Space Preservation
Bicycle & Pedestrian
Improvements
Traffic Congestion Relief
(Safety Improvements)
■ Public Safety
■ Neighborhood Street Paving
I Code Enforcement
Flood Protection
Parks & Recreation/
Senior Programs & Facilities
New Resources for Providing Service
• Response to
growing demands
for service.
• Mostly funded by
application and
user fees.
• Some positions
needed to
2015-17 New Staff Proposed by Funding Type
(24.7 FTE)
5.50
4.01
Development Services Fees
.25
o Enterprise Fund Fees
Other General Fund
implement Major Rental Housing Inspection
City Goals. 6'95 Program Fees
Financial Plan Adoption:
Changes to Preliminary Budget
1. General Fund/Local Revenue Measure
a. Added $206,000 to Land Conservancy for Octagon Barn*
b. Use Parkland Development monies for Laguna Lake ADA trail
c. Additional Ranger staffing* and vehicle**
d. Added Jack House elevator removal CIP**
e. Lowered Storm Drain design costs*
f. Revised staffing projections
*Measure G funded
** Measure G will fund $22,000 for Jack House and $13,000 for vehicle
Financial Plan Adoption:
Changes to Preliminary Budget
2. Water Enterprise Fund
a. Added drought response strategy costs $179,000 (2015-16)
b. Added debt proceeds and debt service in 2016-17
c. Reflect new rates adopted on June 16th (both years)
3. Sewer Enterprise Fund
a. Reflect new rates adopted on June 16th (both years)
4. Parking Enterprise Fund
a. Reflect savings estimate from lot closures (both years)
Financial Plan Adoption:
Changes to Preliminary Budget
5. Capital Improvement Plan
a. Bike Transportation Plan spending revised
6. Other Important Objectives
a. Neighborhood Wellness work plan now includes LUCE
program 2.13 (R-1 in -fill compatibility policy work)
7. Programs
a. Move HRC oversight to Community Development to coordinate
with other grant -making programs (CDBG, Grants -in -Aid,
Neighborhood Matching Grants, Affordable Housing Fund)
Financial Plan Adoption:
Changes to Preliminary Budget
8. City-wide
a. Budget and Fiscal Policies updated
i. Productivity
ii. Fund Balance and Reserves
Recommendations
1. Adopt the resolution related to the Transportation Planning Budget
2. Adopt the resolution approving the 2015-17 Financial Plan and
2015-16 Budget as amended and revised
!2015-17
Financial Plan
2015-16 Budget