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HomeMy WebLinkAbout01/07/1997, 7 - GOAL-SETTING PROCESS AND FINANCIAL PLAN POLICIES FOR 1997-990 FROM SUBJECT: council acEnaa aEpout CITY OF SAN LUIS OBISPO John Duna, City Administrative Officer Prepared By: Bill Statler, Director of Finance WVk_1 Dak /-7— 97 GOAL-SETTING PROCESS AND FINANCIAL PLAN POLICIES FOR 1997 -99 CAO RECOM3ffNDATION ■ Approve 1997 -99 goal - setting process and financial plan policies. ■ Consider the City's general economic outlook for 1997 -99. DISCUSSION Goal - Setting Process On Dmmber 3, 1996, the Council approved the preliminary schedule for preparing the Financial Plan and conceptual approach to Council goal- setting as part of this process. The key change from 1995- 97 approved by the Council is the use of a two-step goal - setting process under which the evening of January 14 will be set aside for community input, followed by a Council goal- setting workshop on February 1. Provided in Exhibits A and B are overviews of the proposed objectives, approach, schedule and roles for both of these workshops. Provided in Exlnbit C is the Council's "homework assignment" for the February 1 workshop, which requests that Council members submit their suggested goals by January 24, which will subsequently be consolidated with other Council member goals and distributed on January 27. Provided in Exhibit D is the suggested "criteria for major City goals" which was adopted by the Council in January of 1995, and provided in Exhibit E are the major City goals adopted by the Council in the 1995 -97 Financial Plan. To help organize all the background information that Council members will receive as part of this goal - setting process, notebooks will be distributed at the January 7 with the following nine main sections: ■ Agendas for the January 4 and February 1 workshops. ■ Suggested goals received by January 7 from community groups, interested individuals, Council advisory bodies and staff (additional submissions received after this date will be distributed to the Council in a three -hole punch format for inclusion in the notebook). ■ Status of current major City goals and other Council objectives. ■ Worksheet for keeping notes on public comments received on January 14. ■ Summary of results from the January 14 workshop (to be distributed on January 17 along with any other requested supplemental materials from the January 14 workshop). ■ Five year fiscal forecast (to be distributed on January 17 ). r -1 Council Agenda Report - Goal Setting Process and Financial Plan Policies for 1997 -99 Page 2 ■ Council member goals (to be distributed on January 27). ■ Other background information such as the 1997 -99 Financial Plan calendar, outlines for the community and goal - setting workshops, Council homework assignments, criteria for major City goals and Financial Plan policies. ■ Notes and space for other supplemental materials that the Council may receive. Financial Plan Policies As stated in the 1995 -97 Financial Plan, the overall goal of the financial plan process is to link what we want to accomplish over the next two years with the resources required to do so. Formal statements of key budget policies provide the foundation for achieving this goal by establishing a clear framework for effective and prudent financial decision - making. The City's current Financial Plan policies are set forth section B of the 1995 -97 Financial Plan, and cover a broad range of fiscal issues, including: financial plan organization, revenue management, user fee cost recovery goals, enterprise fund rates and fees, investments, minimum fund balance and working capital levels, capital improvement management and financing, and human resource management. While the need for revisions in these policies may arise as we begin preparing the preliminary financial plan, no changes are recommended at this time. General Economic Outlook Preparation of the five year fiscal forecast for the General Fund is currently underway, and will be ready for distribution by the later part of January. Wile we will have a much better handle on the City's fiscal outlook once we complete this comprehensive review of where we've been and where we seem to be headed, a few general conclusions can be reached based on our initial work so far: Favorable In&catms ■ Strong current financial condition. The City continues to be in strong fiscal position by state and national standards. As discussed more fully in the annual financial report for 1995 -96 recently distributed to the Council, the City's General Fund's fiscal performance for the past year compared favorably with budget projections. ■ Positive economic outlook for the region. The UCSB economic forecast recently presented a favorable outlook for the coming year However, it was also clear that the City's economy — while improving — is not performing as well as the region as a whole. In short, while an improvement in the regional economy is a positive indicator, it is by no means certain that the City will share in this. This is especially true given the increased (and successful) competition by the north and south county areas on our traditional position as the retail center for the County. ■ No further state cuts. While no initiatives are on the horizon to restore any of the State cuts to cities over the past several years (totaling over $1.5 million annually for the City), there are also no current discussions underway to make further cuts to cities. %J- Council Agenda Report - Goal Setting Process and Financial Plan Policies for 1997 -99 Page 3 Unfavorable Indicators ■ Increasing operating costs. Even if we do not expand or enhance service levels, there will be still be inflationary cost pressures on operating expenditures, which account for about 85% of General Fund outlays. The critical question in this regard — which will be addressed in the five year fiscal forecast — is whether revenues overall will rise faster than operating costs. However, past experience tells us that even if we control our current cost base to just increases in inflation, there will still be significant pressures to expand or enhance operating programs in responding to legitimate, unmet service needs. ■ Infrastructure and facility needs Although we have recently completed several major capital projects — most notably the performing arts center and headquarters fire station — our need for a strong capital improvement program, especially in the area of adequately maintaining our existing infrastructure and facilities, will continue. ■ Proposition 218 impacts. While our past budget - balancing strategies have relied primarily on expenditure reductions, new revenues have played a smaller but important role. With the passage of Proposition 218, revenue solutions — even at a limited level — will simply not be as available as in the past. Summary In general, we do not believe that we will be facing the very tough fiscal situation that confronted the City four years ago in 1993 -95, which led us to reduce General Fund operating expenditures by $2.5 million and cut regular staffing by 30 positions. Nonetheless, as highlighted above, there will still be significant challenges &cmg us in maintaining current service levels and achieving capital improvement goals. For example, our past forecasts for 1993 -95 and 1995 -97 assumed a reduction by 50% in our traditional level of capital improvements, from about $2.2 million annually (m 1995 dollars) to $1.1 million However, our actual experience over the past four years does not show any lessening in General Fund support for capital improvements. In fact, the past four years have been among our most aggressive in recent times in accomplishing important capital improvement projects. In summary, we do not foresee grave difficulties ahead of us at this time in ma; +a n±ng current service levels and supporting a minimal capital improvement plan. However, there are operating programs where improvements should be made, and infrastructure needs where more than minimal capital improvement plan projects will be warranted. Funding these improvements in our current fiscal environment will be very difficult. EXHIBM A- Outline for community workshop (January 14) B. Outline for Council goal- setting workshop (February 1) C. Council member submissions for goal - setting workshop D. Criteria for major City goals E. Major City goals for 1995 -97 11,GOALSEITNOl -7CAR 7 -3 Outline for Community Workshop 7:00 -11:00 p.m., Tuesday, January 14, 1997 Objectives Exhibit • Gain valuable input from advisory boards, community groups, etc. on proposed City goals — "What" the community wants. • Encourage discussion about "Why" the goals or projects are of interest to the presenters so that the Council learns what are the underlying hopes or objectives. • Explore "How" the underlying hopes or objectives can be met— altemative approaches, opportunities for collaboration or shared resources with other parties, and requests for additional alternatives to be developed with City staff assistance where appropriate. • Assist Council members in the preparation of their thoughts, priorities, and candidate goals. Approach 1. Request presenters to briefly summarize: requested goals (which most will have submitted in writing), why the goals would contribute to a better San Luis Obispo, alternative approaches, and opportunities for collaboration. 2. Record brief summaries of the "what ", "why ", and "how" for the requests on separate flip charts organized by goal categories: public safety; public utilities; transportation; leisure, cultural & social services; community development; and general government. 3. Encourage Council members to ask questions and use worksheets to formulate their list of possible candidate goals. 4. Review the array of goals by category at the end of the evening workshop and develop key themes about the community's hopes and potential ways to realize them. 5. Distribute results from the meeting: central themes on San Luis Obispo's hopes and aspirations, suggested goals, and alternatives (including any follow up results from staff and community groups). [provide these to Council members by January 17] Don Marnska, NovaQuest 805- 7724667 < -% Schedule 7:00 - 7:05 p.m. Welcome Mayor 7:05 - 7:20 p.m. Introduction (process, past goals, criteria for major City goals, and summary of fiscal outlook) CAO 7:20 - 9:50 p.m. Community input Public 9:50 - 10:00 p.m. break 10:00 -11:00 p.m. Summary: key hopes expressed, potential goals, and further work needed. All Roles Mayor: call and recognize the presenters, participate actively with other Council members. Council members: listen, ask questions, note areas of interest for candidate goals, and participate in developing summary themes at the end of evening. Staff. gather and organize public input prior to workshop, develop and submit staff suggestions for Council consideration (provide written copies for public at the workshop), present staff suggestions at end of public input, record "What ", "why', and "how" on flip charts. Coach: elicit the "what", "why", and "hovel' from presenters, keep the flow and content of the workshop moving constructively, guide Council and participants in developing the summary themes at the end of the evening. Don Maruska, NovaQuest 805 - 7724667 7- S Outline for Council Goal- Setting Workshop 8:30 a.m. - 4:00 p.m., Saturday, February 1, 1997 Objectives Exhibit (?�> • Ground the session in the hopes and aspirations for San Luis Obispo as set forth on January 14. Place proposed goals in context of City's fiscal realities. • Review potential City goals compiled from the Council members' submissions. • Clarify the nature and scope of each potential goal so that everyone is clear about what each one means and its implications. • Select candidate City goals from those submitted (i.e. goals that 3 or more members favor). • Formulate an agreed upon set of Major City Goals. • Identify any additional issues for resolution before or at the February 4 Council meeting. Approach 1. Review the status of existing major City goals. 2. Consider the results of the five -year forecast and other trends. 3. Review potential goals in each category to ensure clarity and completeness. 4. Narrow the list of goals in each category to candidate goals (i.e. those favored by 3 or more Council members). 5. Discuss the balance and weighting Council members want to achieve. 6. Assign the desired weighting to each goal and calculate the ranking of goals. 7. Review the preliminary results and identify any areas needing further consideration. Don Maruska, NovaQuest 805- 7724667 7-6 Schedule 8:30 - 9:00 a.m. 9:00 - 9:05 a.m. 9:05 - 9:10 a.m. 9:10 - 9:30 a.m. Refreshments Welcome and Introductions Purpose, Process & Guidelines Status of Existing City Goals Mayor Coach CAO 9:30 - 10:00 a.m. 5 Year Forecast and Other Trends Fin. Director 10:00 - noon Review Goals by Category and Select Candidate Goals Council [Council may accept further comments from the public that have not been previously presented] noon - 1:00 p.m. lunch [staff compiles candidate goals] 1:00 - 2:00 p.m. Discuss and Weight the Goals Council 2:00 - 2:30 p.m. Tabulate Results Staff 2:30 - 3:15 p.m. Review and Identify Major City Goals Council 3:15 - 4:00 p.m. Note Areas Needing Further Consideration Council /Staff Roles Mayor: preside over the workshop and participate actively with other Council members. Council members: clarify and discuss the potential goals, express views on desired balance, vote their preferred weightings, and specify further work (if needed). Staff: report on status of current goals, review economic trends, ensure goals have needed content and clarity, and tabulate results. Coach: keep the flow and content of the workshop moving constructively, guide Council members in the process of goal weighting and selection, and draw staff and public into deliberations as desirable. Don Maruska, NovaQuest 805-7724667 7-7 Exhibit C� Council Member's Submission for Goal- Setting Workshop due: Friday, January 24, 1997 Please submit a list of the goals you would like the Council to consider at the Goal- Setting Workshop on Saturday, February 1, 1997. Your submissions will be combined with those from all other Council members and compiled into a single list without designating which Council member submitted which items. You will receive this combined list on Monday, January 27, so that you can review and consider it prior to the workshop. Attached to this sheet are the "Criteria for Major City Goals" adopted during the goal- setting process in January, 1995. The 1995 - 1997 goals also are attached as a reference point. Although there is no limit on the number of goals you may wish to suggest, 5 to 7 from each Council member have worked well in the past. Don Maruska, NovaQuest 805-772 -4667 7- Exhibit.L Proposed Criteria for Major City Goals Q �-,� o Be legitimate to our beliefs (real, supported) o Agreed upon by a Council majority o Reduced in number for comprehension, communication, and focus o Set forth in one document: Financial Plan and Budget o Be clear, understandable o Established as a high priority and a real commitment o Translated into the objectives of employees at all levels in the organization o Created within a supportive atmosphere where participants aren't afraid to state their suggestions for improving goals or objections o Accepted to the point where resistance to them is reduced or eliminated. *2-9 POLICIES AND OBJECTIVES Fxhlblt MAJOR CITY GOALS - SUMMARY PUBLIC SAFETY ■ Headquarters Fire Station Construction. Complete construction of a new Headquarters Fire Station, on -time and within budget. PUBLIC UTILITIES ■ Water Supply Development Reach agreement with the County and north county community on solutions for the Salinas Reservoir expansion and Nacimiento pipeline projects. ■ Solid Waste Reduction. Achieve solid waste reduction goals. TRANSPORTATION ■ Circulation Element Inpkmentation. Implement General Plan circulation element projects, including alternative transportation systems and improvements, in order to mitigate traffic impacts on residential and commercial areas. LEISURE, CULTURAL & SOCIAL SERVICES ■ Homeless Services Center. Work with volunteer groups and businesses to construct and develop use agreements for a Homeless Services Center at the City -owned Prado Road site. ■ Parks and Recreation Element Implementation. Adopt and begin implementing the Parks and Recreation Element/Master Plan. ■ Open Space Preservation. Inventory, prioritize and fund acquisition of open space, while continuing to inventory natural resources within the City, urban reserve line, and greenbelt areas. COMMUNITY DEVELOPMENT ■ Natural Resource Protection. Prepare and begin implementing natural resource protection plans, mcludng adoption of a creek setback ordinance which incorporates adequate capability for flood and habitat protection. ■ F -sting Economic Development Program Implementation. Implement the economic development program approved by the Council in 1994. ■ Expanded Economic Development Program Implementation. Implement and staff an expanded economic development program. ■ Seismic Retrofit Program Implement an unreinforced masonry (URN) building seismic strengthening program that is not unduly burdensome. GENERAL GOVERNMENT ■ Financing Seismic, Fire Sprinkler and Sewer Lateral Improvements Establish a joint private and public sector financing program for seismic, fire sprinkler and sewer lateral improvements on private property. ■ Long -Term Fiscal Health. Maintain City fiscal health and a balanced budget B -17 7 -10