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HomeMy WebLinkAbout06/04/1991, 6 - LAND USE ELEMENT UPDATE - ECONOMIC STUDY SCOPE IIIIpIIp�II�IIIIIIIpI ''II IIUIII ".7 o san LUIS OBISPO 6-' fA. III�NII C� ITEM NU BER: ONGe COUNCIL AGENDA REPORT cam) A FROM: Arnold B. Jonas, Community Development Director BY: Glen Matteson, Associate Planner SUBJECT: Land Use Element update - economic study scope CAO RECOMMENDATION: Provide direction to staff and consultants concerning the draft scope, and authorize the mayor to execute an agreement with Roberta Mundie & Associates incorporating the work scope, schedule, and not-to-exceed cost as may be directed by council. DISCUSSION Background The city has been working on an update of its general plan Land Use Element since 1987. In February 1989, staff published a discussion draft. In April 1990, the Planning Commission sent to the City Council its preferred draft. In September 1990, the City Council referred the draft back to the Planning Commission, with direction to further evaluate certain topics. Also, the council asked for an economic evaluation, to be used in further considering the update. The council was interested primarily in an economic evaluation of the draft update and some of the alternatives which have been discussed, focused on feasibility and internal consistency. On May 6, the City Council and the Planning Commission held a joint meeting to give direction to staff and the selected consultant, Roberta Mundie & Associates, concerning the scope for an economic study; the study will be used in further considering the general plan Land Use Element update. on May 22, the Planning Commission considered the draft work scope which the consultants have prepared. The majority of commissioners thought that the draft scope does not ask all the questions which should be answered to give a balanced evaluation of the consequences to city residents; that it over-emphasizes financial impacts, rather than the broader range of costs, including environmental impacts, which residents may bear. Several commissioners thought the study would be unnecessarily expensive. There was discussion of delays in proceeding with the update. The commission ultimately voted to forward their comments on the draft work scope to the council, expressing their concern for the cost of the study, and calling for great speed in further work on the Land Use Element update. Commissioners then passed a second �iIHi1�N��►I�I�IIIIIIII�� ►pill city of san tu.., osIspo COUNCIL AGENDA REPORT motion calling for environmental evaluation to be given equal status with economic considerations, and requesting that work on the environmental analysis begin at once. The current contract we are working under covers only initial consultation on the work scope. A separate agreement must be negotiated once the work scope is defined and work on the study itself is set to proceed. FISCAL IMPACTS The consultant .estimates the cost to perform the work included in the recommended study scope to be $84,500. No budget has been established for the economic study. j The City Council budgeted $100,000 for outside technical help with the general plan update for 1989-90, though none of this amount has been spent. (The initial consultation with Roberta Mundie & Associates is not to exceed $7, 000, and will come from this budget item. ) ALTERNATIVES i I The council may continue action. RECOMMENDATION Provide direction to staff and consultants concerning the draft scope, and authorize the mayor to execute an agreement with Roberta Mundie & Associates incorporating the work scope, schedule, and not-to-exceed cost as may be directed by council. I ATTACHED Draft work scope prepared by consultant gmD:scope-cc.wp NOTE: The actual contract for this work is currently being prepared and will be available in the City Clerk's Office before 5:00 p.m. on Friday, May 31. The contract will be a standard consultant services agreement; the scope of work will serve as "Exhibit A" to the agreement. MUNDIE & ASSOCIATES Mundie &Associates PROPOSED SCOPE OF WORK FOR ECONOMIC STUDIES May 15,1991 PURPOSE Staff outlined a proposed a scope of work for the consultants in its Council Agenda Report for the joint City Council-Planning Commission meeting of May 6, 1991. That scope identifies five key issues and a series of eight questions intended to elicit information needed to amend and complete the draft Land Use Element (LUE)• At the joint City Council-Planning Commission meeting, considerable support was expressed for the scope of work as it was presented in the Staff Report. Some Commission and Council members, however,raised various questions not articulated in the Staff Report, and several expressed interest in a more general scope of work that would allow the consultants more latitude to examine "the big picture" rather than concentrate solely on answering narrowly-defined questions. To respond to the concerns expressed at the meeting, our work must envision the specifics of City policy within an overall framework of the City's economy. This vision must be grounded in an articulate assessment of realistic opportunities and constraints, and.must reflect the communi- ty's historic respect for the environment that helps make San Luis Obispo an attractive city. SCOPE OF WORK The proposed scope of work outlined below attempts to incorporate the concerns expressed at the joint City Council-Planning Commission meeting. It includes all of the elements of the scope recommended in the Staff Report, grouping these elements into four basic areas of effort: (1) economic analysis (2) fiscal analysis (that is,consideration of city government costs and revenues) (3) consideration of the balance between jobs and housing,and (4) analysis of a variety of impacts - including economic, financial, public serv- ices,quality of life-on city residents. A fifth area of effort is intended to synthesize the findings of these fust four groups and to apply those findings explicitly to the draft LUE. Mundie&Associates Scope of Work for Economic St...ues Page 2 Economic Investigation According to available information,the City of San Luis Obispo currently accounts for at least half of the jobs is the county. In the absence of City action,such as a growth limit recommended by the voters, the City could be expected to continue to capture a substantial(as yet unknown)proportion of countywide economic growth. The actual amount of growth would depend on the city's ongoing attractiveness to economic activity - including its proximity to raw materials and to markets for finished products,its supply of sites,infrastructure (water supply, sewage treatment capacity,road network, power availability),labor force, access to transportation and presence of other activities that are economically linked- compared to the same conditions in other locations. Some of these conditions are beyond the City's control; others are influenced directly or indirectly by City policies. For example,the City can adopt policies about annexations and infrastructure extensions,zoning regulations and fee structures that will influence business decisions about whether to locate in San Luis Obispo; it has less control over regional transportation facilities and no control over either its proximity to raw materials or the policies adopted by other jurisdictions as they attempt to influence growth in their areas. To be able to evaluate the economic and other impacts of the policies and programs included in the draft Land Use Element, the City's decisionmakers must fust have an image of what conditions would be like in the ab- seam of those policies and programs. The'base case"analysis of economic growth and development suggested by staff's Question A would provide this image. The product of a base case analysis is similar to the "environ- mental setting'section of an environmental impact report;it supplies a description of expected conditions in the absence of any project (m this case,the project is the set of policies and programs contained in the draft Land Use Element). Full consideration of the base case must include the following components: ■ How much growth, and of what types, may be expected to seek locations locally, in the City of San Luis Obispo or in the immediately surrounding unincorporated area (the planning area)? ■ Considering existing constraints on growth in the City (such as land supply and water supply, for example), how much of the growth seeking City locations may be expected actually to occur in the City? What types of growth are more and less likely to end up in the City rather than elsewhere in the County? ■ Would the types of development most likely to occur within the City and its planning area make the City's economic base more or less stable than it is now? In answering this question, the analysis should discuss whether having a stable economy should be a goal for the City,and the factors that appear to contribute to stability. ■ Are new economic activities, or new types of economic activities, that locate in the City and planning area likely to displace any existing activities? If so, in what direction will the net change tend to go? Is there a way to evaluate the comparative desirability of the old and new activities? Agricultural uses that currently exist within the city limits and the planning area should be considered as an intrinsic part of this assessment. r Mundie&Associates Scope of Work for Economic Studies Page 3 ■ For what kinds of economic functions does San Luis Obispo operate as a regional cen- ter? What are the advantages and disadvantages of maintaining the City's role as a center of those functions for the County? Will the types of growth most likely to locate within the City tend to emphasize its current status as a center of specialized trade and services? What forces or conditions, internal or external, would reduce the City's cen- tral place function and tend to disperse some of those specialized functions to other areas? ■ To the extent that economic growth occurs through the replacement of existing uses by new uses, what types of activities are likely to decline or be displaced as new activities locate in the City? After the base case is described, the likely impacts of alternative policies and programs must be assessed. For example,the following issues must be discussed. a Important external influences on San Luis Obispo's economy in the recent past have included real estate market conditions in Los Angeles and student enrollment levels at Cal Poly. What other influences have there been on the rate and character of economic growth in the City? What forces will affect the City's character and range of economic choices in the future? ■ Over the 15 years between 1974 and 1989, countywide employment grew at an average annual rate of 5.1 percent; private sector employment grew at an average rate of 6.4 percent during that period. The City has captured a significant (to-be-calculated) share of this growth,but residents have expressed a preference for lower growth rates in the future. How would lower-than-historic growth rates affect (1) future economic stability and(2)the city's status as a center of specialized trade and services? ■ What types of policies, aside from an explicit growth limit, are likely to limit future economic development? (For example,limitations on annexation, service provision and water supply could all limit non-residential development; high development fees or limited labor supply could have similar impacts.) In its entirety,the economic analysis would address Staff Report Questions A,B and C. Fiscal Investieation Once the magnitude and character of economic growth and development - both with and without the growth controls proposed in the draft LUE-have been estimated, it will be possible to evaluate the impacts of growth and of the LUE's growth-enabling and growth-controlling features on the City's costs and revenues. The fiscal analysis will build on the economic analysis by framing a series of realistic future development scenarios(realis- tic in terms of growth levels and internal relationships among land uses) and forecasting their fiscal conse- quences. The computer-assisted analysis will assign costs and revenues by land use types,incorporate economic and population changes, and forecast the results for the general fund. The findings of the scenario analysis would then serve as the departure point for the identification of more specific fiscal issues for further research and analysis. This fiscal analysis corresponds to Staff Report Question D and to questions/issues raised several times at the May 6 meeting by members of the Planning Commission and City Council. Mundie&Associates Scope of Work for Economic Studies Page 4 Among the spec elements of the fiscal model would be: ■ An examination of the levels and characteristics of public services currently provided by the City of San Luis Obispo, the costs to the City of providing those services, and the revenues that the City collects from various sources to cover those costs. ■ An exploration of how costs and revenues change with population growth and economic growth. ■ The identification of cost and revenue changes that are beyond the City's control; for example,state and federal subventions. ■ The projection of City service characteristics, costs and revenues that correspond to the base future scenarios. Among the fiscal issues that may be identified for further research and analysis upon the conclusion of the scenario review are these: ■ What would be the fiscal impacts of changes in the way sales tax is redistributed? ■ What would be the impacts of changes in fees collected for certain City services? ■ Of the policies proposed in the LUE that are amenable to a more specific fiscal analysis, which would benefit from such analysis, providing information useful to City land use planning and policy decisions? The computer-assisted model that we would develop for the study would be delivered to the City for future in- house use,at the time this study is completed. Consideration of the Jobs-Housing_Balance State policy has placed increasing importance during the past decade on having local jurisdictions address the balance between jobs and housing. In part,this policy is intended to address focal concerns (that is,to discour- age local jurisdictions from "fiscal zoning"); it is also intended to address concerns about air quality and traffic volumes associated with relatively long-distance commuting. Several issues raised in the Staff Report and several comments made at the meeting of May 6 require the analy- sis of San Luis Obispo's balance between jobs and housing. This issue is raised whenever people consider limi- tations on growth,levels of traffic congestion and air pollution,availability of affordable housing,designation of land for various uses(through the Land Use Element and the zoning map),job opportunities for local residents and housing opportunities for local workers,and similar issues. In San Luis Obispo, the question of jobs-housing balance is complicated by both the presence of two colleges, which bring population in much greater numbers than jobs, and by the attractiveness of the entire county as a retirement location. Questions that must be addressed in the consideration of an appropriate jobs-housing balance for the City of San Luis Obispo include: Mundie&Associates Scope of Work for Economic Studies Page 5 ■ What is the current relationship between jobs and housing in the City of San Luis Obispo? How does it compare to the relationship in.the County as a whole? ■ What factors (including employment, college enrollment and retirement) contribute to the City's present jobs-housing balance? ■ What factors influence the City's ability to achieve a closer relationship between jobs and housing? (Some of these factors might include housing prices, residential land availability and economic growth at a different rate from residential growth; this list is illustrative rather than exhaustive.) ■ What are the perceived problems engendered by the current relationship between jobs and housing? For example, can the City maintain its position as a center of specialized trade and services if the current balance continues in the future? What are the pros and cons of attempting to achieve a closer relationship between jobs and housing in the City? For example, what would be the effects on economic growth, air quality, traffic congestion, ability to preserve agricultural land, city costs and reve- nues, housing affordability, the ability of children in existing City households to find housing in the City when they grow up, and other quality of life factors? (This list, too, is illustrative. Although we recognize all of these potential effects, we also realize that we may not be able to reach conclusions about all of them.) ■ Considering all of the factors raised above, what would be a responsible approach for the City to follow in considering the relationship between jobs and housing? Should the City seek to alter the balance? If so,what policies and actions would be appropriate? Impacts on Residents The policies and programs that are ultimately adopted in the Land Use Element will affect not only the City of San Luis Obispo as a corporate entity,but every one of the City's residents as well. The research and analysis carried out in the three areas of effort described above will provide indications of the impacts of the proposed policies on job opportunities,housing prices, commercial and cultural opportunities, taxes, level of public serv- ices, and the quality of life experienced by individuals and families. This fourth area of effort is intended to address these issues explicitly. It incorporates Questions F, G and H of the Staff Report. In examining the potential impacts of the draft LUE on the city's residents,we must recognize that maintaining the status quo is not a realistic option: conditions will change over time no matter what policies the City adopts. The critical question is whether the City's policies will direct the changes that do occur in a direction perceived by the people who live there to be beneficial or adverse. Specific issues to be considered might include: ■ Will there be enough jobs for young City residents who want to remain in the local area upon reaching working age, or who choose to return to San Luis Obispo after pursuing work or training somewhere else? ■ Will the types of economic activity expected to remain in, or newly locate in, the City and planning area provide 'meaningful job opportunities' for the City's residents? In this case,'meaningful job opportunities'are those that match skills and provide wages at a level needed to support a household. Mundie&Associates Scope of Work for Economic Stuuies Page 6 ■ Will the probable commuting requirements - that is, the distance between home and work and the time it takes to travel that distance - be acceptable to City residents? What about probable travel requirements to obtain retail goods and services? ■ What changes in tax burdens - or, alternatively, on the level of public services provided by the City- may be expected in the future, under the alternative sets of possible City policies considered in the economic and fiscal investigations? • What are the implications of alternative City policies for future levels of traffic conges- tion and air quality? How might these conditions affect the everyday lives and economic well-being of the City's residents? ■ What are the other quality of life factors that would be affected by City policies? Examples might include the size/scale of the community (knowing one's neighbors and seeing familiar faces in many local settings), a feeling of safety and security, being able to look at the open hulls,being able to reach the edge of the city in only a few minutes, and having a broadly middle-class population. In what ways would these factors be affected? ■ What impacts would future policies have on the natural environment, and what are the trade-offs? For example,allowing growth to continue under current policies might lead to more traffic congestion and therefore more localized air pollution, as well as conver- sion of more open space and agricultural land to Cuban uses. More restrictive growth controls, on the other hand, could limit local increases in traffic volumes but require people to travel to other cities to obtain the goods and services they desire. Air quality impacts would be different but not necessarily less; there would be less urbanization of land in San Luis Obispo,but more in other places. Less growth would mean less pres- sure on the area environment, but could also mean fewer resources to undertake envi- ronmental improvements. This list of questions is, once again, illustrative; a final list can be adopted as the work is begun. In the end, many of these types of questions may not be answerable with quantitative or concrete information. In those cases,we will discuss the implications of various policy options that might be considered. Svnthesi In this final area of effort, we will relate the findings of the four initial investigations explicitly to the policies contained in the draft Land Use Element. In a sense, our work will become an'economic footnote'to the LUE: for each policy or program that will affect the City's economy or fiscal balance, alter the relationship between jobs and housing, or influence the economic, financial or quality-of-life condition of the City's resi- dents,we will provide an annotation that describes our findings. This effort will constitute a sort of economic guide to the draft LUE to facilitate further review by the Planning Commission and City Council. Further, it will provide a solid base of information to be used in the environmental impact analysis to be prepared later. �7 Miindie&Associates Scope of Work for Economic Studies Page 7 BUDGET Our charges are based on the actual time devoted to your project by our staff, billed at standard hourly rates. These rates are subject to revision at the beginning of each calendar year. Expenses,such as for subsistence and incidental travel costs,publications and printing, are invoiced at their cost to us. Other expenses are charged according to our current rates(subject to change on January 1 of each year): travel in staff-owned vehicles, $0275 per mile; in-house photocopying, $0.5 per page;FAX receipts, $030 per page;FAX transmittals,$0.25 per page;telephone charges (including FAX line),itemized cost multiplied by 1.8 within the Pacific Bell service area and itemized cost multiplied by 12 for long distance calls. Bills are submitted monthly and are payable on receipt. For the scope of work outlined above, we ask that you allocate a budget not to exceed $84,500 without prior authorization from you. This request is based on the following estimates for the respective tasks: Economic Investigation $37,500 Fiscal Investigation 22,500 ft'ae fiscal budget would bring the work through the evaluation of scenarios and the consideration of the effects of a change in the State's sales tax'ground rules';other detailed evaluations would be conducted as directed by the City at the time the scenario analysis is completed. The cost of such additional analysis would be estimated at the time requested.] Consideration of the Jobs-Housing Balance 7,500 Impacts on Residents 10,000 Synthesis 7,000 Total $84,500 These figures include both professional time and expenses. SCHEDULE We recognize that the City is eager for the economic analysis of the draft Land Use Element to be completed, so that refinement (if necessary) and adoption of the element may proceed. We are prepared to begin work on this project immediately. We estimate that completion of the work elements outlined above (exclusive of any additional fiscal investigations that may be requested)will require between three and four months. OUR INTEREST IN THE PROJECT We are pleased to have had this opportunity to describe our proposed work scope, and we look forward to as- sisting San Luis Obispo in this important effort. Lt '/ MFMN6G �-9/ AGENDA r D, ®M3A r_._._ Request For A Plan To Expedite LUE Processing To Commission In view of the San Luis Obispo City Council's action last night on Resolution No. 6659 regarding the processing of general plan amendment requests and annexations .. . . specifically their adoption of Option B a policy to accept processing and hearing on ALL such applications within the urban reserve line, I would like to suggest that the Commission take immediate action to expedite the LUE process. I suggest that the Commission request Staff to outline a process or plan to: 1. Immediately review and process the thirteen items sent back to the Commission for further study. 2. Review of the complete draft for Commission and Staff comments, update, and finalization on areas of interest (ie: Neighborhood old town • university area • downtown) with the Citizens Advisory Committee's 21 items considered. 3. Integration of reviews, above, with economic study. 4. Finalization of the LUE for submission to Council. I would like to see a expedited schedule/time line to process the document as fast as possible so we can get on with the regular planning process. I, personally can no longer do other things while this unresolved crises infects everything we do and we become, increasingly the "reason" why "the process" has stopped. The LUE UpDate MUST be completed. One question continues to pop up. Do we have to wait for the economic study to be done on the draft that we intend to change OR does the economic study get done on the draft that we have finished changing? This presumes that after the economic study is complete we will again review the draft with the studies conclusions to guide us. "what goes around, comes around." Commissioner Karleskint CX)PMTa 5/22/91 ❑•Dawtes Acdon UrCM IXR n=gEY ❑ FWDR JUNA UyJI P-�iORIQ ❑ POLIaC7-L `� ❑ MCMI:TF.AJ-f ❑ REC DUL CITY.COUNCIL ❑ READFRE ❑ -JMLDHL SAN LUIS OBISPO.CA 14:2D Pr -s V 'ING AGENDA DAlE (v Y41 ITEM # Draft P.C. Minutes (transcript by Cheryl Hoffman) May 22, 1991 7. Land Use Element - Economic Study Scope. Review and comment on draft workscope prepared by consultant. This is a transcription of Tapes #2 and #3 of that discussion. Tape #1 had a recording malfunction, and was not useable) Beginning of Tape #2--- Jonas: In order to do the analysis, because if you are going to assume that you are going to provide jobs or housing for anybody that just wishes to come here or is born here, then you don't have any controls, you just go out and seek as much of it as you can. So if you make some assumptions that you are going to have certain levels of housing, certain level of jobs and so forth, then how does that relate to what the demand may be, and is that a reasonable relationship? Kouiakis: And part of the question is, what is it reasonable to expect the municipality to provide and guarantee for these individual demands. Schmidt: But is that an economic question ? COFIESTO- ❑•Dawtes Action FYI Williams: What would the municipality be providing? O CDDD RN.DM GVSLEPW,K/=OJUG. & ❑ FMCHU Schmidt: Growth, infrastructure for growth. O FwDnL ❑ POUaCH Hoffman: Yes. ❑ MCMT.>EA&t ❑ RECUR. ❑ s READ FU ❑ ILDUL reT—T r�F�A-� Williams: Well, other than.. Kourakis: Affordable housing, requiring developers to make 50% of all new projects affordable. Karleskint: That's to keep the locals able to buy housing. Kourakis: That's to keep the locals, and that's what were saying Hoffman: It also encourages people to move in Williams: Yes, that's fine but if you're going to.in.. Kourakis: We've just had a bunch of people here tonight telling us that's exactly what we should be doing (re: Villa Rosa), and we also have a mayor who tells us that those things are recipes for economic disaster. RECEIVED JUN 3 -1991 OUNCIL SAN LUIS OBISPo.CA sq:zo P/» Draft P.C. Minutes May 22, 1991 Page 2 Williams: If you aregoing to provide the housing for people to stay, you need to provide the jobs so they will have a way to stay. Kourakis: So the question you...the basic question you need when you're dealing with this is, will there be enough jobs, what is your responsibility, your municipal responsibility. I have those kinds of concerns, and again, I think it should be made quite clear that the study is not a cost-benefit analysis, because there is that concern, or just what the study is. Schmidt: But, wasn't it supposed to be? Hoffman: Yes, I thought that was what it was. Kourakis: I thought it was more of a cost Schmidt: I thought it was suppose to get into cost/benefit Kourakis: An economic ... base information and what the costs would be, and what the fiscal impacts would be, the fiscal impacts are not the same as a cost benefit analysis, the fiscal impacts don't really have anything at all to do with my getting lung cancer because of the air quality, unless you're ready to fax her my medical info. Schmidt: But I thought the intention that it would address that sort of quantifiable question. Kourakis: Is that what we will do in the EIR, or we will do it now? Karleskint: Assuming that's possible Jonas: There is a wide divergence of opinion as to exactly how quantifiable those issues are, and if you do attempt to quantify them, of what value then, the accuracy? My understanding was that they were going to attempt to do some of that, because that's what was asked of them Schmidt: I don't see it here Kourakis: OK, then what is going to happen in the EIR?, if we do that here, that means we will not handle air quality in the EIR Jonas: No, not at all, well certainly ... Williams: You'll probably be able to use some of the same information won't you? Peterson: Isn't this study, this is not a really decision making study, were looking for information, correct? I mean the EIR is a study done based on the final Land Use Element. PC Meeting 22 May 1991 Page 3. Economic Study Discussion Jonas: The EIR itself is a ..., an analysis of the .. various factors of the to help decide if it represents the policies of the... Kourakis: OK, I would just say that those are my concerns, but my greatest concern is that we scope out to adoption, this whole thing right now, and that we do have some sort of clear statement of what the EIR will include. I think that's politically necessary. It's a good idea in terms of planning too. Hoffman: We're supposed to be a-political Karleskint: But reality is reality Schmidt: I had some comments about various aspects of this, do you want to go through them? Hoffman: Yes, if you have some specific points Schmidt: Yes, page 2. I have a lot more, but I'm really out of steam, and I'm sure you are too. Page 2 though, the bottom bullet, I'm really uncomfortable about dealing with agricultural viability in the context in which it's set up here. "Evaluate the comparative desirability of the old and new activity.", This is referring to a new economic activity locating in the city displacing existing ones. That's not what I think we, not what I was after in asking for an analysis of what the city would need to do to continue to make agriculture attractive, or viable, I guess was the word I used. I just, this really sounds to me like it's heading towards some sort of a rationalization of getting rid of agriculture. That's what I'm reading here when I see it couched in terms of new activities and whether its desirable to mitigate them. Karleskint: You want to give other value to the ag besides making money on the crop which they can prove they cant do. Schmidt: Certainly, there is community economic value to ag that goes far beyond the calculation of maximum land value vs. crop value Hoffman: Yes, that's part of.the quality of life Karleskint: And that's why this won't work here, because its not even going to touch that, they're not even asking the question.. Schmidt: Right, I mean its a very un-holistic way of approaching it, if you think in terms of sustainable communities, and all of the inputs that are involved in our food system then you start looking at it totally differently than this question. Karleskint: You're looking at.it like the mission is and the art museum is, from the focus of mission plaza and the museum, its an attraction, it's something nice to have, like the cultural arts center. PC Meeting 22 May 1991 Page 4 Economic Study Discussion Schmidt: Well, but that's not the economic picture, I think you can make an economic argument about ag in the city particularly as the area grows.... Schmidt: At the top of page 3, the second bullet down 'To the extent that economic growth occurs through the replacement of existing uses by new uses, what types of activities are likely to decline or be displaced as new activities locate in the City?" Isn't this the same thing that's in the bullet at the bottom of the previous page, I don't understand the difference, am I missing something? Karleskint: It must be a different way of looking at it. Schmidt: I'm quite perplexed. Williams: I was just going to say, there they're talking about the direction the change would go, here they're talking about specific uses ... "what kinds of activities are likely... displaced," it just kooks to me that they're getting specific, ... Schmidt: Well, maybe they are, I just didn't understand. Another thing I don't understand is immediately following that bullet, "After the base Case is described, the likely impacts of alternative policies and programs must be assessed. For example, the following issues must be discussed:" and then from alternative policies and programs, then suddenly for example the following issues must be discussed: "Important external influences on San Luis Obispo's economy." What does that have do with impacts of alternative policies and programs, and they're talking about things we can't control, in particular like real estate conditions in LA and enrollment at Cal Poly. Jonas: But those thing do have influence on us here. Karleskint: Boy do they. Jonas: And how we respond to them is important, for example housing costs, it is my understanding that there is general agreement that the ability of people to sell housing at high prices in other locations and bring that money here and pay what they want to for housing here, has driven up the cost of housing, therefore malting it more difficult for local people to continue to afford the housing that is here and so how do we respond to that, is that a factor... so ... and what are some alternatives to respond Hoffman: Arnold, on that point, just that one bullet, seems, to me it was saying that, those external influences that were driving up the price of housing, and equated that to economic growth, and, I don't know if I'm misreading it or not, but it seems like that's what they're saying, that that's raising the prices, and that's economic growth, and it's not. Kourakis: Yes, I think you're right Schmidt: It's inflation. PC Meeting 22 May 1991 Page 5 Economic Study Discussion Hoffman: It's strictly inflation.. Karleskint: Artificial inflation at that. Hoffman: And I don't like the tone of something that is indicating that just because prices of things are going up, that's an economic growth & therefore could be looked at as beneficial. Jonas: I'm not certain they're saying that. Hoffman: That's what I'm getting out of that, that's what I'm reading Jonas: But that may not necessarily be the intent Hoffman: OK, if not, they need Jonas: I'm not saying that it is or isn't at this point, I'm just saying that you're reading of that may not be ... Schmidt: Well, I guess there's a problem if we cant understand what they're talking about, that's a real fundamental problem. Hoffman: Exactly. Jonas: Hey, I often don't understand what some .. are talking about. All: joking... Schmidt: But Arnold, were not paid $115 an hour to be clear. Karleskint: You get what you pay for. Jonas:..... Schmidt: I'm real uneasy about some of the things on page 5. We've already talked about some of them, the 3rd bullet down. Says that the list there is illustrative rather than exhaustive. Karleskint: Where's this at? Schmidt: Jobs housing balance, page 5, 3rd bullet down, "What factors influence the City's ability to achieve a closer relationship between jobs and housing?" Isn't when you start talking about housing prices, residential land availability. & economic growth, you've already really prejudged about how you're conceptualizing the issue. PC Meeting 22 May 1991 Page 6 Economic Study Discussion Jonas: I suppose so, if you're attempting to evaluate economic factors, that influence, that balance, then those are the kinds of things that we are looking at. Karleskint: You're going to have to. Schmidt: OK, how about the value of the Yen? Which is probably more relevant than some of the things that are listed here. Karleskint: No, no, you're really reaching out there. Schmidt: I mean, it really bothers me, because they are admitting there are external influences, but yet they are trying to break this down into isolated little parts. So that we get part of the wheel going around, but were not looking at the rest of it, were not looking at the machine that it is a part of. This is what bothers me about the whole thing, it is not a holistic approach to the issue. And that's because all but $7000 of the project is going into something other than synthesis. You've got that skewed emphasis from the very beginning. Schmidt: OK, I'm bothered by the synthesis section, its extremely superficial. I had specifically hoped that they would be doing an analysis on (this is on the bottom of page 6) of the entire, of the fiscal and economic impacts of the entire Land Use Element update, and they're doing exactly what I think they shouldn't be doing, which is looking at each individual policy or program and doing an analysis for it. That's the easy way to do it, but you don't end up with an overall picture, what you end up with there is not an overall picture, you don't have any overall notion of the cost and benefit issues of the overall plan, what you get is good pieces of the plan, and bad pieces of the plan. And I presume you are supposed to pick out the good ones and throw away the bad ones, well, economics isn't all were dealing with here. Hoffman: Any more? Schmidt: No, that's the end. Karleskint: Well, just to continue on with that a little bit, is that we aren't dealing with just economics, but we have to deal with the economics and with the alternatives, and I think alternatives is the key word. Its going to give us some options as to variations we can do, and I'm assuming they're dealing with: If we do it this way, this is going to happen, or if we do it this way, this is going to happen. We have real alternates to look at and you can... Jonas: Presumably a certain set of consequences... Karleskint: So we have either/or, or several different ways of looking at things, and that gives you a mix and match situation where you can look at it and find out how far you can go or not go before you cause big damage. Jonas: You can find the point at which .. maximum comfort PC Meeting 22 May 1991 Page 7 Economic Study Discussion Karleskint: Where the benefit of ag still is a benefit, and it doesn't dump us off a cliff into a danger zone. And from a business standpoint you really have to know how much damage you're going to do before you can perform damage control, so we need to know those alternatives and how far we can go. And I think there's going to be other areas where were going to answer some of these other questions that supposedly aren't in here. This isn't going to answer everything, just like the EIR doesn't answer everything. So, I think together. This is what we asked for and this is certainly better than we started out with months ago. But, I too, am staggered by the cost. I think that's, and I think it is up in the investigation, where supposedly we have so much information already, I don't know why it costs another $40,000 to put it in another book. Jonas: I think that at least portions of some of those costs reflect the input of people like the finance director, who is aware of what some of the information is that's available, & might have some input......because that was one of his concerns as well, that that portion of the ... actual work required to produce those pieces of... Karleskint: Because even at the joint meeting there was some discussion that it won't cost so much because we have so much of this information, even they mentioned it in their little talk, so to have them say it, and everybody say yes, we're better off because, and then have $37,000 and $22,000 pop up, its rather staggering. Schmidt: Arnold, how much is the staff time going to cost? Karleskint: Yes, that's above this Jonas: I don't know that we've made an estimate, because there will certainly be review of it by various people on staff, not just in our department, the finance dept, and other areas as well. Schmidt: You might have already put in $30,000440,000 , right up to this point.. Jonas: Not at the rate we get paid Karleskint: Even with overhead Hoffman: These aren't consultants Schmidt: Even with xerox copies? Karleskint: Because you're only $13,500 away from $100,000 Hoffman: Magic number. I have a few things here. On page 2, where it talks about the, this base-line info they want to get, I'm concerned about what they're actually looking at in that base. The way they described it, it seems to be a "do nothing" case. In other words, what would happen if the city had no rules and regulations on any of this. PC Meeting 22 May 1991 Page 8 Economic Study Discussion Jonas: That's an alternative, isn't it. . Hoffman: But we do currently have a baseline of regulations, the current Land Use Element is in effect, that's where were living now, that should be our baseline, not the "do nothing". Schmidt: Where is this, Gil? Hoffman: 2nd paragraph, page 2. Karleskint: "to be able to evaluate.." Schmidt: of the base-case analysis? Hoffman: Yes, they talk about a base case analysis, and then they want to look at, try to look at the what the effects of the draft Land Use Element are. Schmidt: In the absence of any projects, is that what you're talking about? Hoffman: Right, what I'm seeing from that is that in the absence of anything, and .. Jonas: perhaps there is some mis-communication. The goal of the base case is say What is the current condition? Hoffman: OK, I think that needs to be clear Karleskint: Yes Jonas: And then the project is what are the proposed changes and what effect do they have? Hoffman: OK, I agree that is what it should be Karleskint: You shouldn't be able to read a paragraph like that and come out with those 2 different inferences. Hoffman: Right. Jonas: What was that paragraph again? Hoffman: 2nd paragraph, page 2, about the middle. Schmidt: OK, Gil, can I interrupt, that 1st bullet , up right underneath that, "How much growth, and of what types may be expected to seek locations locally, in the City of SLO or ...?" I read that and I thought they were talking about if there were no controls of any kind, and (I think this relates directly to what Gil just PC Meeting 22 May 1991 Page 9 Economic Study Discussion brought up,) now, are we talking about no controls, or are we talking about under the existing Land Use Element? Jonas: Those are alternatives, under the existing conditions what could we expect, an alternative would be with different sets of controls, what could we expect. That's just what Barry was talking about. Schmidt: But the base case is what I just described, "How much growth, what types,..locally". My question is, is the base case, again, is that with existing controls?, Jonas: Yes, that would be the case. Schmidt: Because when I read this my feeling was that they were talking about Houston, you know, no controls, just do whatever you want to do. Jonas: I think I understand the points you are attempting to make, and will make sure that the base case reflects the current condition and then no controls or more controls, whatever, as alternatives. And see the relationship between those changes. Schmidt: No, no controls should not be an alternative. We do not operate in California with no controls. Hoffman: Realistically, that doesn't happen. Karleskint: Relaxing the controls maybe. Jonas: Yes. Karleskint: Not to zero. Schmidt: Well, have we discussed relaxing the controls from the present Land Use Element? Jonas: We are looking at a holistic approach Richard, we have to look at various alternatives, up and down. Schmidt: No, I don't.., that's a cheap shot Arnold. Jonas: No, Richard, its not, because I'm just attempting to say that if were going to try to be as impartial as possible, which I think is what everybody hopes to be in this case, Schmidt: No, impartiality has to respond to the community's expectations, and I guarantee you that you will be out of a job if the Telegram Tribune prints that you are advocating a study on the basis of no controls on anything. Hoffman, Kourakis,Karleskint:..."he didn't say that, relaxing the controls"..... PC Meeting 22 May 1991 Page 10 Economic Study Discussion Karleskint: Arnold is just saying we want to look at what happens if we take the meters out, that's a relaxing Schmidt: That's right, like we get rid of our existing Land Use Element, and go to the Houston system. And I don't think that's anything that's worth analyzing. Hoffman: It's late, we do have a few people that are here and I would like to open it up to public comment. Carla Sanders - passes out copies of her statements & comments from commissioners about previous copies My name is Carla Sanders, I live in San Luis Obispo, I am a member of the Ad Hoc Committee, representing Citizens Planning Alliance. Started reading comments.-(see her 3-page printed report) The following are additions to her printed comments. page 1, following 4th paragraph: "...from mall extensions." I think Dominic Perello's phraseology is "if you develop all you ag land, what are you going to replace it with, what are you going to mitigate it with, are your going to mitigate it, or pay money?" page 1, following 5th paragraph: "...not be lumped together." The two are sort of lumped together in a sort of warm fuzzy togetherness, and I don't know how you would look at it then. page 1, following bullet #1 under alternative policies and programs "...attract tourists and new businesses." Navarro said it is very difficult to take out the amenity affects. Why do you have high cost of housing? It's because we have good schools, clean air, low crime and the roads can be travelled on. page 2, following #2 "...mockery of the analysis." "You may decide that you just don't want a thorough one, or want a partial one, or you're going to do a cost/benefit analysis of proposed growth controls, except you're only going to look at the costs of controlling growth, and not the benefits; which is sort of what is being proposed. But at least be honest about it. page 2, bullet #3 ... We do not live in a void. page 3, following end of statement: And in very academic terms, Navarro pointed out it is cheaper to do a cost/benefit analysis of proposed growth controls by looking only at the costs and not the benefits, because that is the cheap thing to do. And that's what's happening. That's not original, that was stated at the beginning. Do you'have any questions. The only other concern I have is that we are continuing on a process where we are getting only economic information at this point, we are going to PC Meeting 22 May 1991 Page 11 Economic Study Discussion use that to help re-write the general plan, then we'll take a look at what happened to the environment, rather than collecting environmental information...and I don't think that represents the interest in the community for environmental preservation as shown in the survey. Hoffman: Thank you. Peterson: I have a question. Do you realize the purpose, to my understanding, of the economic study is not to make a decision which would go with the LUE, but to get some background knowledge on economic impacts of what is being recommended. Environmental issues, I think are, if we put more cars on the road, we know we are going to destroy the air quality, which I don't think any of us want to do, but the decisions that are on the draft LUE we, how are they going to impact the community. This economic study could come back and say, we're way over growing. The 1% cap you talk about, they could come back and say, this is way too much, you only need .5% You're looking at the other side of the coin, not... Carla Sanders: I don't understand how that... using your examples of cars. Increased traffic maybe benefits more commercial development, if you just look at sales tax, but we're not looking at the air quality impact. We will not have that until after we have taken the "economic information" to help us re-write the general plan. Peterson: That's what I'm saying, I think it's pretty much a given that if we add more traffic, we're destroying air quality. Carla Sanders: To me, that is a little scary to say, "Look, we all know about the environment, lets really not spend any money looking at it." Peterson: No, that's not what I'm saying. Carla Sanders: That we'll spend the money. Peterson: We're looking for economic information to base judgement on. Carla Sanders: Yes, that's right, and that's exactly what will happen. What you're not getting information on is the environment. And that's a problem. You will make your decision with your economic information, and you won't have any environmental information. Kourakis: Then you find out the damage. Carla Sanders: Yes, after you've written... Kourakis: It's the difference between my eating ice cream, no, my checking the calorie chart and deciding I cannot eat ice cream, or my walking in and getting a hot fudge sundae then checking the calorie chart. PC Meeting 22 May 1991 Page 12 Economic Study Discussion Karleskint: But you still haven't eaten it? Kourakis: No, I've eaten it. And then I have to look for mitigation measures, which is working out and spending the money ..., that's the difference she's talking about. Peterson: I look at this as an'information gathering process, that's what we all decided to do here, and now we keep being pulled apart by the Chamber of Commerce and other groups, and personally I'm in the middle. And I think we all were when we first got this thing, and now we're being pulled apart by all these different groups. Carla Sanders: Simply stated, you're right, we're gathering environmental I mean economic information, we're not gathering environmental information, we won't gather it until afterwards. And I think Janet stated it a little different. Hoffman: OIC Karleskint: But we don't adopt it until after the EIR Hoffman: I think you're right, part of it is that after the EIR is done, there is the opportunity for modification of the plan. I think the fear that I heard expressed from several people is that the likelihood of those changes occurring, is much less. Schmidt: I think there is another issue that Carla is trying to make, which is, what we've done is we've said that we're going to re-evaluate the text of the Land Use Element, by applying economic "information' to it. I don't think it's information, I think economics is one of the greatest arts around. I say that with admiration for economists, but we're going to re-do the text of the plan, based on economic information. Where's the environmental information, why shouldn't we be re-doing the text of the plan based on the thing that most people in this community value the, far more, from everything we've been able to tell, far more than this stuff. Kourakis: And the difference ... we're going to get that back.. Schmidt: What it really seems to be doing is putting one set of issues above all others, now if both of them came along at the end of the process and we re-evaluate the plan according to an environmental impact report and an economic impact report, and they were put on equal footing, I don't think you'd see this kind of tussle, but what's happened is that it has been politicized, not by us. Kourakis: And we are not dealing with just simple base information here, there are judgement calls in here. I would say, I hope she doesn't go into this "I don't have any real information, but in my professional judgement I think the tree is going to turn blue today, or that. I think it is really better to say, "We cannot assess this". But anyway, some of the difference... Williams: For $118 an hour, she ought to know if the tree is going to turn blue. PC Meeting 22 May 1991 Page 13 Economic Study Discussion Kourakis: But some of the difference is that difference between avoiding impacts and mitigating impacts. So that's why you want to know that there is a major creek running through the site before you design the project. If you wait until after you design the property, you find you have the building on top of the creek, by that time you've put in $100,000 in design work, you will not move that. You will only mitigate that by putting it into a conduit or something. Schmidt: We had a real case like that with the previous community development director where the mitigation measure, I'm not kidding you, was to move the building to the top of the bank, instead of putting it in the creek. Kourakis: So what you have to understand is, why people are so suspicious. But, there is this other issue of just missing, if you have the environmental information, you can avoid impacts. They just won't happen. But you can't avoid impacts without knowing what's there. Williams: I agree with that, When will we have the environmental information, what... Kourakis: at the EIR. Karleskint: Well, the thing's written now. Williams: Well, when is that due, that's what I'm asking. Karleskint: We got the thing written when we got it. Hoffman: It won't be started until after the Council has approved, has said the LUE is the way we want it, now go do an EIR on it. Karleskint: Then it starts all over in hearings again Hoffman: It starts all over again. Karleskint: Do you think it will get by this commission by, without any changes. Schmidt: The newspaper today, is this a misprint, the newspaper now says 1994. Williams: I don't like that. Hoffman: No, it was not a misprint. Karleskint: Might be a little soon. Kourakis: I saw 1993, but I will say I think we should just move as fast as we can. Hoffman: Does anyone else wish to speak? PC Meeting 22 May 1991 Page 14 Economic Study Discussion Hoffman: On this item, there has been a lot of points made. Question is, what do we want to do with this. Karleskint: Well, they've got our comments. Schmidt: I'd like to go beyond the comments I've made, I think its far too much money for far too little substance, and I for one would like to say that I don't think we should proceed with it. Karleskint: Talk about rattling cages. Hoffman: Personally, I agree with Richard, first of all its too much money, secondly it's. I don't think it's answering the questions that we, or the council wanted answered. There appears to be too many points of speculation in it, and as Janet said, it has become a very political item, and I would simply send it on to the City Council and say that I do not, cannot recommend it, and its yours to do with as you wish. With comments. Kourakis: I would say, that we need to scope the whole thing, beginning to end, now, I'll say exactly what I said before. We need to structure, now we need to structure the environmental information and analysis, and get started with that, at the same time. Or at least moving on that now, we can't get started at the same time, this one is already ahead, but we need to start on that as soon as possible. And I figure that if this is going to go to a ballot, and I do frankly, I want to see the whole thing get done as soon as possible. I am very concerned about the fact, that in fact, that we are doing this incremental general plan. I want to see the thing move as quickly as possible. Hoffman: And to that end, what would you suggest? Kourakis: Start on the environmental information gathering and analysis right now, and push everybody as hard as possible. I think it would be nice if we got this done before the annexation areas were all designed. And for those who were not at the council hearing last night, Arnold told us they were doing design work for Margarita. Karleskint: Well, we knew that, we went on a tour, a year ago. Jonas: That was decided some time ago, by the council. , Kourakis: Well, I didn't realize that it was as detailed. Schmidt: Well, who is doing the design work? Karleskint: There is a specific plan? Jonas: The property owners were charged with developing a plan that would then come to the same, or integral review. e PC Meeting 22 May 1991 Page 15 Economic Study Discussion Schmidt: So one gets the impression that last night bad been planned for quite some time, and they just needed the excuse of the Telegram-Tribune to pull it off. ... Political Statement. Kourakis: Well, that another, I just think we should proceed as quickly as possible, and we should be moving into the environmental information gathering and analysis right now. Karleskint: This is what we asked for. Nobody pressed for an environmental report as much as we pressed for this. And this is what we got. I think that some of the questions in here are probably better asked differently, it taints of "its already decided where they're going" in some areas. But this is what we asked for, and I keep going back to the original RFD's that we didn't like and this is much better than that was. And I think if this comes out, this will do us some good. I have no objection to doing the environmental at the same time. That would probably save us money too, although every time we save money, it costs us more, so I don't know. I think the amount of money they are charging for this thing is outrageous, I just can't see how they can justify those amounts of money. I'm definitely in the wrong business. Kourakis: We want them to be able to afford their houses. Karleskint: At this rate, they can afford to move to San Luis, maybe that's what they are trying to do. So, this is what we asked for, and you pay for what you get, to some extent, but we're paying too much for this. Williams: I agree with that, especially some of these... Karleskint: $37,000 economic investigation, they all told us they had half the information. Williams: ..economic investigation, I think that's ridiculous. Hoffman: I would say that we have gotten a lot of comments from all various points, please add to that the comments that Carla brought up. At this time, I would entertain a motion to deal with this item. Karleskint: Do we have to have a motion. Hoffman: I would prefer one, yes. How do you want to send it to the City Council. Schmidt: I'll take a stab at it, that we forward our comments and the comments from the public input to the City Council, with grave misgivings about the cost, and no recommendation on whether they should proceed with it or not. Let them make the decision. I don't know if that's good wording or not, but, if somebody wants to clean it Up. Kourakis: No, I think we should proceed. PC Meeting 22 May 1991 Page 16 Economic Study Discussion Karleskint: We need to tell them to proceed with great rapidity Schmidt: I think they should take the heat for it. I don't see why we should be recommending a $91,000 study that's going to produce absolutely nothing, I really think that's reprehensible. Karleskint: We've already voiced our concerns about the money, its overpriced Schmidt: So why recommend that they proceed, just send it to them with no recommendation, send them our comments, Kourakis: I think we should, maybe we should take a vote on whether we proceed or not, but I don't think we should get hung up on it, I think you're outvoted Richard, I don't think it will... Schmidt: OK, ok, well then you make a motion, nobody seconded it. Hoffman: Well, try yours again. Schmidt: OK, My motion would be that we send the comments from the commissioners and public input to the city council, express our concerns about the cost, period. Hoffman: Is there a second? Karleskint: The period stopped me. Kourakis: Barry, you make a motion Karleskint: That we send to the City Council and with deep concern about the cost, disgust might be a better word, but, and urge them,... Kourakis: With everybody's comments Karleskint: with everybody's comments, yes definitely, including the public comments, and well, they need to do something about the cost. But if they can overcome the cost factor, then they should proceed with great speed. Kourakis: Can I add, I'll second it, I would like to add, or maybe this should just be another motion, ok that we encourage them to start gathering the environmental information and doing that analysis immediately also. Williams: That should be a second motion, I think it would be stronger as a second motion. Karleskint: Maybe a second motion, ok, lets do it a second. PC Meeting 22 May 1991 Page 17 Economic Study Discussion Kourakis: OK, I second Barry's motion as it stands, no changes. Hoffman: So the motion is to send our comments and public comments to the Council with grave concern about the cost of the study, and after resolving that consideration, to proceed with all due speed. Karleskint: Right. Hoffman: Is there any discussion? Hoffman: Personally, I can't support it, because I just don't think that the study as outlined is going to give us any real information that we need, and I think we should be proceeding with the LUE, but I think this is the wrong way to go. Hoffman: Call the roll, please Diane: Karleskint - aye; Kourakis - aye; Peterson - aye; Schmidt - no; Williams - aye; Hoffman - no Hoffman: The motion carries Schmidt: Will our minutes also be forwarded to council. Diane: Yes Kourakis: I want to move that we encourage, insist, that the council begin the environmental information gathering and analysis, and, I don't want to just say the EIR process, immediately. Schmidt: How about making a statement that environmental issues be put on an equal footing with economics? Hoffman: We find that the environmental issues are of equal weight and should be on equal footing with economics and therefore... Schmidt: We should hold up the entire LUE until we get an environmental study Kourakis: By that time, your term will be done, Karleskint: By the year 2000 Kourakis: and therefore we ask them to begin the environmental studies immediately. Karleskint: I can't help but think that that will have an economic benefit. Kourakis: Richard, give your statement. PC Meeting 22 May 1991 Page , 18 Economic Study Discussion Schmidt: I've forgotten what I said, what did I say, Kouralds: OK, Gil, the environmental... Hoffman: That we find that the environmental considerations be given equal footing with the economic considerations and therefore request that the city council direct the initiation of collection of environmental information immediately. That. was your motion? Kourakis: Yes Hoffman: I'll second it. Motion passes unanimously. 12:15 am Barry passes out his sheet concerning the processing of the LUE and the revoking the annexation resolution.