HomeMy WebLinkAbout04/06/1993, 7 - MID-YEAR BUDGET REVIEW FOLLOW-UP MEETING DATE:
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COUNCIL AGENDA REPORT ITEM NUMBER:
O
FROM: William C. Statler, Director of Finance
SUBJECT: MID-YEAR BUDGET REVIEW FOLLOW-UP
CAO RECOMMENDATION
Approve mid-year budget requests for Business Improvement Area revenue shortfall
($15,900) and parks and landscape water needs ($98,600).
DISCUSSION
Background
On March 16, 1993, the Council considered the mid-year budget review for 1992-93. At that
time,the Council accepted the findings of the report and approved mid-year budget requests
for elections ($8,800) and child care ($2,500 net of revenues). The Council requested
additional information on two other mid-year budget requests:
■ Business Improvement Area - Revenue Shortfall. As part of the 1991-93 Financial
Plan, the Council adopted the goal of moving the BIA to fiscal self-sufficiency. As
documented in the 1991-93 Financial Plan (page D-90), the Council recognized that
achieving this goal by 1992-93 depended upon revising the business tax ordinance,
with an assumption that BIA revenues would increase as a result. The Council
agreed to reconsider General Fund support for BIA during 1991-93 in the event that
the business tax revision did not occur, or resulting revenues were less than initial
estimates. Although General Fund business tax projections were on target, BIA
revenues are projected to be $15,900 less than estimated for 1992-93. Consistent
with this agreement to reconsider BIA funding - as well as the commitment that the
Council made on June 30, 1992 as part of the Action Plan for Fiscal Health to
maintain community group funding levels for 1992-93 - it is recommended that the
Council approve an operating transfer of $15,900 to the BIA for 1992-93.
■ Public Works - Parks and Landscape and Water Needs. The existing water service
budget is based on consumption from fiscal year 1988-89. During this period, the
parks and landscape program reduced consumption by over 50% from pre-drought
levels while adding 16 new locations. Accordingly, additional funding in the amount
of $98,600 is recommended to keep the turf green most of the year while retaining
consumption at an 809b level of pre-drought usage.
Additional information regarding these requests is provided in Attachments 1 and 2.
�iIH�11�IIIIVII�IIII��aIId111 City of San La1S OBISpo
COUNCIL AGENDA REPORT
7Frrt&W of rhe Requests
During the mid-year budget review, concerns were expressed regarding the timing of these
requests. As noted in the mid-year budget report and as stated in our adopted Financial
Plan policies, one of the key purposes of the mid-year budget review - in addition to
formally reporting on the City's financial position at the mid-point of the fiscal year - is to
identify and present any fiscal problem areas to the Council, and to recommend corrective
actions or additional funding if required. As noted in the attached supporting materials,
these problem areas were not identified until after the 1992-93 budget was adopted, and
accordingly, presenting this recommendation to Council as part of the mid-year budget
review was the appropriate time to do so.
ATTACHMENTS
1. Memorandum from Director of Finance regarding BIA funding.
2. Memorandum from Public Works Director regarding parks and landscape water
service budget.
92-93BUD MID YR\MYFOLLOW.WP !
Attachment
MEMORANDUM
March 23, 1993
TO: John Dunn, City Administrative Officer
Pell-
ell-
FROM: William C. Statler, Director of Finance q�
Prepared by: Linda Asprion, Revenue Manager
SUBJECT: BIXS MID-YEAR BUDGET REQUEST
OVERVIEW
This memorandum is in response to your request for additional background information
regarding the Business Improvement Association's (BIA) mid-year budget request. After
an extensive review of background materials related to the 1991-93 Financial Plan, we
believe that the mid-year budgetreview recommendation to provide $15,900 to the BIA for
1992-93 due to a shortfall in revenue projections continues to be appropriate. This
conclusion is based on three key factors:
E The Council expressed its intent on several occasions to revisit General Fund support
for the BIA in the event that the business tax revision did not occur, or resulting
revenue levels were less than initial estimates.
■ Although overall projections for increased revenues from the revised business tax
ordinance were on target, actual revenues from the BIA were less than projected by
$15,900.
® As part of the fiscal health Action Plan approved by the Council on June 30, 1992,
the Council agreed to fund community groups in 1992-93 at the levels provided in the
1991-93 Financial Plan.
BACKGROUND
As indicated in the Mid-Year Budget Review, it was originally anticipated that the BIA
would receive an increase in surcharge fees in 1992-93 in proportion to the General Fund
increase from the revised business tax ordinance. Although the General Fund did receive
the projected revenue increase of approximately 20%,the revised projected revenue increase
for the BIA is only 9%, leaving a shortfall of $15,900. We have extensively reviewed the
supporting documentation for our business tax revenues to confirm these divergent trends.
It is important to note that even through the business tax revision was approved by Council
on October 1, 1991, the first year for renewals under.the new provisions was 1992-93, and
as such, the mid-year budget review was the first appropriate opportunity for presenting
these findings and recommendations.
7.3
At the time the initial revenue projections were made in April of 1991, the BIA expressed
concern regarding the amount of the anticipated*increase. Since the common goal of the
City and the BIA has been to make the BIA self-sufficient, there was an agreement between J
the City and BIA at the time the revenue projection was made that any shortfall (through
1992-93 only) would be reconsidered by the City. Consistent with Council Policy to make
the BIA self-supporting, no further General Fund subsidies are anticipated after 1992-93.
REVIEW OF BUDGET DISCUSSIONS
As requested by the Council, staff has extensively researched the background regarding BIA
funding for 1991-93, which included listening to all the tapes from the Council's budget
discussions as part of the 1991-93 Financial Plan process. At their June 6, 1991 and June
18, 1991 meetings, the Council extensively discussed the following two issues regarding BIA
funding after presentations by City staff and BIA representatives:
■ Moving towards BIA self-sufficiency by eliminating General Fund subsidies.
■ Recognition that achieving this goal during 1991-93 depended upon revising the
business tax ordinance, and an assumption that there would be greater BIA revenues
as a result.
These in-depth discussions concluded with specific direction to staff on June 18, 1991 to
ensure that these concerns were included in the narrative of the 1991-93 Financial Plan.
1
REVIEW OF BUDGET MATERIALS -
1991-93 Financial Plan
Provided in Exhibit A is an excerpt from the June 18, 1991 Council Agenda Report which
discusses the recommendation to discontinue General Fund subsidies to the BIA, with the
recognition that achieving this goal during 1991-93 depended upon anticipated increased
revenues resulting from a revised business tax ordinance. Provided in Exhibit B is an
excerpt from the 1991-93 Financial Plan (page D-90) reflecting this direction,
Action Plan for Fiscal Health (lune 30, 1992)
Provided in Exhibit C is an excerpt from the Council Agenda Report presented to Council
on June 30, 1993, recommending a three step action plan for fiscal health, which was
adopted by the Council. Although the BIA was not specifically referenced in this report,
one of the actions adopted by Council was continuing to fund community groups like the
Chamber of Commerce and Visitors Conference Bureau in 1992-93 at the levels agreed
upon in the 1991-93 Financial Plan. We believe that this part of the action plan approved
by Council further supports the recommendation to maintain BIA funding levels for 1992-93.
EXHIBITS
A. Excerpt from the Council Agenda Report for June 19, 1991 indicating that the
narrative in the 1991-93 Financial Plan would be revised to reflect that General Fund
support would be revisited by the Council if projected revenues for the BIA Program
did not occur.
B. Page D-90 from the 1991-93 Financial Plan - the actual narrative indicating that
General Fund subsidies for the BIA would be discontinued with the 1991-93
Financial Plan, but if revenue levels were subsequently less than projected, General
Fund support for the BIA (for 1991-93 only) would be reconsidered by the Council.
C. Excerpt from the Council Agenda Report for June 30, 1992 on the City's action plan
for responding to the fiscal emergency resulting from proposed State revenue
reductions. Task 4 indicates that funding levels for 1992-93 for community groups
should be honored as approved in the 1991-93 Financial Plan.
C..
•,``��' '�*��� city of Sdn Luis Os1S O 6"' � y' -.1� Exilblt.,ZL
COUNCIL. AGENOA REPORT
and will return.to Council in the near future with a report evaluating the costs and benefits
of. using consultant services for this program. Pending completion of this analysis, no
financial changes have been made to the Financial Plan. However, the Operating Program .
narative will be amended to reflect this further analysis.
Capital Improvement Plan
Railroad Ni'ater Tower
Originally scheduled for 1991-92, this project (which is dependent upon public donations i
as a source of funding) has been deferred to 1993-94. In the interim, staff will monitor the
availability of grant funding and will bring this project back to Council should any become
available. I
Parking Site acquisition j
Supplemental funding in the amount of 5350,000 for the purchase of an additional parking
site has been deferred from 1991-92 to 1993-94.
Other Frnm:cial Plan Changes
In addition to the financial changes noted above, the following narrative changes will also
be made to the 1991-93 Financial Plan:
�l.
■ The Parking Program description will be expanded to include its responsibility
for implementation of the Parking Management Plan. i
■ The Tree Program will include an objective to develop a city-wide tree planting
program that can be implemented when the drought is over. Other goals of the
Tree Program will also be outlined in the budget document. .
e The responsibilities of the Promotional Coordinating Committee (PCC) as
described in the Cultural Activities and Community Promotion Programs will
be amended to include the PCC's responsibility for public art review.
■' The performance and workload indicators for the following programs will be
amended to reflect regular staff support levels: City/County Library; Cultural
Activities; Human Relations; and Community Promotion.
• The narrative in the BIA Program describing the discontinuance of General Fund
subsidiaries gill be amended to recognize that this recommendation is based on
projected revenue levels that depend upon Council adoption of a revised Business
Tax Ordinance. In the event that this revision does not occur, or resulting
revenue levels are subsequently projected to be less than initial estimates, then
the level of General Fund support will be revisited by the Council.
fo
C-132
COMMUNITY DEVELOPMENT citu�w�a
PROGRAM: Business Improvement Area OPERATION:- Economic Development
DEPARTMENT: City Council and Advisory Bodies FUND: BIA Fund
. 1989-90 1990-91 1991-92 1992-93
PROGRAM COSTS ACTUAL BUDGETED REQUESTED PROPOSED
Staffmg $ 65,500 S 64,200 $ 58,000 $ 62,800
Contract services 82,900
3,500 3'500 3'500
Other operating expenditures 900 94,500 103,500 104,100
Minor capital 0 _0 -- 0 —
Total $ 150,300 S. 162,200 $ 165,000 $ 170,400
PROGRAM DESCRIPTION
The Business Improvement Area (BIA) is a special tax district within the downtown business area, established by city
ordinance in 1975 to promote economic vitality in the downtown. The BIA is funded by a 100 percent surcharge added
to the business tax of businesses located within the BIA district. This revenue is allocated based on the recommendations
of the eleven member BIA Advisory Board,which is elected by all of the business operators within the district. The City
Council confirms the election of Board members by formally appointing them to the BIA Board.The program goal is
an attractive; energetic and competitive downtown. This program has four major activities:
■ Downtoxm beautification Devising strategies to keep downtown public areas clean and attractive,providing seasonal
decorations for downtown public areas, suggesting and reviewing capital improvement beautification efforts like
Mission-style sidewalks and bulbouts, street furniture and street landscaping (20 percent or the program)
■ Public evertu promodon Coordinating on-going public events like the Thursday night street closure/farmers market,
scheduling other special events (40 percent of the program)
■ Trade acdvides promotion Exchanging economic and demographic data, sharing business development strategies
(20 percent of the program)
■ Parking improvement Finding ways to make parking.more convenient for downtown customers,reviewing city ca
enpital
improvement projects for parking improvement (20 percent of the program)
STAFFING SUMMARY
Temporary positions: 2.5
Full-time equivalents 2.5 25 2S
SIGNIFICANT EXPENDITURE AND STAFFING CHANGES
■ 1991-93: Downtown sidewalk cleaning costs($20,000 during 1990-91)have been transferred to the General Fund.
■ 1991-93: Combined with this cost transfer, projected revenues enable the BIA to fund existing service levels
without an operating transfer subsidy from the General Fund. General Fund transfers were first ma
to the BIA in 1987-88 "m the amount of$20,000, increasing to $45,000 by 1990-9L
It should be noted that projected revenues are based upon Council adoption ofa revised Business Tax
Ordinance. In the event that this does notoccur or resulting revenue levels are subsequently vroiected
to be less than un_7W estimates,General Fund sunnort for the BIA will be reconsidered by the Council.
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D-90
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COUNCIL ACENDA REF�&0RT
that have not yet been initiated, and classified them into three basic groups as detailed in
Exhibit B:
a. Projects recommended for immediate deferral as of June 30, 1992.
b. Projects that should be considered for deferral based on further review and
Council direction when the scope of the fiscal emergency is better defined. ,
C. Projects that should continue to go forward even during this time of financial j
difficulty and uncertainty based on six major criteria: public health and safety;
outside sources of funding; design substantially underway;long-standing policy i
or contractual commitments;significant operating savings;or requirements for
proper maintenance of existing facilities. i
Projects recommended for immediate or potential deferral total S3.1 .million
summarized as follows:
I
Immediate Potential
Deferral Deferral Total
Public Safety S 65,000 S 220,000 S 285,000
Transportation 429,000 9302000 1,359,000
Leisure, Cultural & Social Services 439,000 766,900 1,205,900
General Government 159.000 80.000 239.000 ;
TOTAL $1,092,000 51,996,900 5390889900
r
Any projects approved for deferral must be reintroduced through the 1993-95 '
Financial Plan preparation process in order to be considered for future funding.
3. Eliminate Undesignated Operating Carry-Over. Under existing Financial Plan policies
regarding our two-year budget approach, operating program appropriations not spent
during the first fiscal year may be carried over for specific purposes into the second
fiscal year with the approval of the CAO (1991-93 Financial Plan, page B-3). In light ,
of the current fiscal situation, carry-over into 1992-93 of undesignated operating
budget balances from 1991-92 will not be allowed.
4. Determine Non-Profit Agency Funding Levels for 1992-93. Under our two-year
budgeting approach, funding levels have previously been established for 1992-93 in
supporting grants-in-aid to a wide range of private, non-profit agencies and
community groups that provide social welfare and cultural services to our community.
Based on this policy commitment, the review by the HRC and PCC has gone
forward, and recommendations for Council consideration:fiave already been made.
In addition to the HRC and PCC grants-in-aid process, multi-year commitments have
also been made to La Fiesta, ECOSLO, Chamber of Commerce, VCB, and the
homeless shelter program. In fairness to these groups that have made laps for
1992-93 based oa the Cily's prior budget commitments it is recoM ended that the
City continue to fund contributions to them based on currently approve 1
levels: we should notLD11t these agencies - whorovtde important services to our
very limited budgets - into the same kind of fiscalchaos that the State
JM forced upon cities. However, in honoring our commitments for 1992-93, tt.nee
C-3 0 — 9L
EMMM
city o� san 1_-IS OBIspo ��
COUNCIL AGENDA REPORT
to be made clear to these agencies that the City's continued suppL
e.
programs at a similar level in future years cannot be relied upon. Tfthese programs and the related level of funding to be provided to thnintegral part of the budget balancing decisions to be made by the Cg
Steps II and III of the action plan. .
5. Evaluate Operating Cost/Service Level Reductiorm In preparing for the Step H
decisions to be made by the Council in Septembe; of 1992, the CAO has already +
directed every department to identify and evaluate further operating cost and service
level reductions. As reflected in Exhibit C, this direction includes preparing options
reflecting 5% and 10% reductions from current operating levels, including their
impact on services to the community. Additionally, departments have been directed +
to fundamentally reexamine basic departmental missions as well as services that j
should rely more on user fees and less on General Fund support.
6. Designate Employee Working Group. It is recommended that an "Employee Working
Group" be formed in order to provide for involvement by a wide-range of employees
in identifying solutions to our impending fiscal emergency. Consisting of employee
association presidents and department fiscal officers, the purpose of this group is to
advise the CAO on cost saving ideas, especially in the area of lay-off mitigation and
employee retention measures that the City should consider in light of the magnitude
of the fiscal problems currently facing us. An informal first meeting of this group
has already taken place on June 26, 1992.
What External Actions Have Been Taken to Date? r
The City has taken a leadership role in informing the community about the State's budget
grab from cities and in trying to convince the Governor and the Legislature that this
approach is simply wrong, and as such, should not be pursued. A summary of our external
efforts to date is provided in Exhibit D, and a Fact Sheet summarizing the State's proposals
and their impact on the City is provided in Exhibit E.
What's Next?
It is difficult to prepare and implement plans in responding to a problem that has yet to be
defined. Nonetheless, we must take appropriate action based on the best information .
currently available that balances the need for responsibly positioning us for the tough
decisions and outcomes that are undoubtedly ahead of us, with retaining our commitment
to acting in a deliberate manner that considers priority services and employee impacts. We
believe that the proposed action plan accomplishes this balance.
To provide the Council and community with an update on the State's fiscal.decision-making
and its impact on the City, a briefing on the status of these issues has also been scheduled
for the July 7, 1992 Council meeting.
3-
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Attachment
Ai13 2 ty��
MEMORANDUM
DATE: March 23, 1993
TO: John Dunn
FROM: Mike McCluskey_�
SUBJECT: Mid-Year Budget Request - Water Service Cost Increases
Public works submitted a 1992/93 mid-year budget request to increase the annual
budget for water service in the parks and landscape maintenance program from
$93,400 to $192,000. During the mid-year review, the Council requested more
information about why the water account was so understated for 1992/93.
During preparation of the 1991/93 financial plan in spring 1991, the budget review
team eliminated all existing contingency budgets and disallowed any budget
amounts based on speculation about future needs. Responding to a request to
increase the budget for irrigation water, the review team directed public works
department to postpone such a request until after drought restrictions ended. All
of these actions pegged the annual water budget at $93,400 for 1990/91,
1991/92, and '1992/93.
After heavy rains in winter 1992, the utilities department lifted water use restric-
tions. With the deadline rapidly approaching to submit change requests for the
1992/93 budget, public works didn't have enough time to sort out what level of
pre-drought consumption was appropriate and what the cost would be. Complicat-
ing this task were erratic consumption trends during the drought, two substantial
rate increases, and the addition of 16 new locations, including Laguna Hills Park.
Meanwhile, in May 1992 the public works director directed the parks staff to
resume watering all park turf areas as necessary to restore them to green, healthy
condition and maintain this condition through the summer.
In September 1992, after receiving information for fiscal year 1991/92, public
works staff examined the history of water consumption and cost over the drought
period and came to two conclusions: 1) that an ongoing irrigation consumption rate
at about 80 percent of pre-drought levels would keep turf areas green most of the
time and prevent some areas from dying back permanently and 2) that the annual
cost at this level of consumption would be about $192,000. Upon reviewing this
information, finance and administration advised public works to prepare a mid-year
budget request by January 1993.
��a
PARKS AND LANDSCAPE PROGRAM
IRRIGATION WATER METERS
LOCATIONS EXISTING IN 1986/87:
Cuesta Park
Hawthorne School
Johnson Park
Laguna Lake Park
Meadow Park
Mission Plaza
Mission School
Mitchell Park
Santa Rosa Park
Sinsheimer Park
Sinsheimer Stadium
Throop Park
Minor Areas:
848 Santa Rosa - Recreation Center Grounds
Higuera/Marsh - Street Landscape
460 Dana
464-466 Dana
536 Marsh -Jack House Grounds
1010 Nipomo - Children's Museum
895 Palm - Kozak/955 Morro Grounds
553 Broad - Community Garden
870 Mission - Tot Lot
2163 Santa Barbara - Street Landscape
60 Higuera - Street Landscape
Broad/Capitolio - Street Landscape
Broad/Orcutt - Street Landscape
1280 Laurel - Community Garden
Sinsheimer Tennis Courts
Johnson/San Luis - Street Landscape
1201 Marsh Street Landscape
1445 Santa Rosa - Senior Center Grounds
1710 Osos - Street Landscape
1818 Osos - Railroad Square
990 Church - Street Landscape
Buena Vista - Street Landscape
150 Anacapa - Street Landscape
Margarita - Street Landscape
3537 Higuera - Street Landscape
100 Las Praderas - Street Landscape
99 Las Praderas - Street Landscape
150 Prado - Street Landscape
Los Osos Valley/Descanso - Street Landscape
310 Madonna - Street Landscape
212 Madonna - Street Landscape
1269 Vista del Lago - Street Landscape
1395 Diablo - Street Landscape
7a/
NEW LOCATIONS SINCE 1986/87:
G
Laguna Hills Park
Minor Areas:
531 Bluerock - Street Landscape
850 Patricia - Street Landscape
995 Palm - Library Grounds
Los Osos Valley/Higuera - Street Landscape
945 Tank Farm - Street Landscape
3999 Poinsettia - Street Landscape
1035 Tank Farm - Street Landscape
1405 Oak Park -'Street Landscape
1207 Tank Farm - Street Landscape
1385 Tank Farm - Street Landscape
1111 Laurel - Community Garden
2889 Rockview - Street Landscape
695 Stoneridge - Street Landscape
1024 Tank Farm - Street Landscape
1040 Fuller - French Park
o*2'&A0
ActionMEETIN AGENDAQZDDDIX
,DATE �3 ITEM # ❑ �OM� D Fw DIX
EXCERPT FROM JUNE 18, 1991 ADOPTION OF 1991-93 FINANCIALKioluc. ❑ ;OLICEO
Q r,ECDIR
AI�TD1991-92 BUDGET '1❑❑ U77LDIP.
Monte Lukov
Mr. Mayor and member of the Council, Monte Lukov with the Business
Improvement Association. Several things that will be reasonably
brief, but I think that we should reiterate and remind the Council
of the letter that we supplied several weeks ago at your study
session, we were unable to really give a presentation on it at that
time. One of the things we would like to have amended in the
projected budget is that the staff projected a budget of $165, 000.
Our budget actually, we anticipated it would be $175,577 . We .then
did ask the Council for $16, 810 in line items of items we would
like to either share with the Council, split costs with, and/or
have the Council fund for us, which does not include the 4th of
July parade. I saw Bill smile at that one. The point is, I think
that we are caught in a catch 22 here in a situation that we're
kind of a high-bred organization. We are really not City, and yet
on the other side of the coin, because of the way the State law is
written, we fall in the purveyance of the City adopting our budget.
I think that there are areas where we agreed with the Council with
the staff, that we would like to be self-sufficient. At this
point, we still don't find it because this last few years the
economy has been dropping, we found out that the City of San Luis
Obispo. wasn't quite bullet proof, and we took a pretty good blood
bath in the commercial areas of this community, and in the downtown
in particular. We've had a- lot of changeover in businesses and
we're :still continuing to see that change come about. The main
thing that we wish the Council to be aware of is that there are
discrepancies between the two sets of projected incomes, between
what the BIA projects is potential income and what the City staff
has projected, that is based upon, and it's a reasonable
assumption, but it is still based upon the hope and desire that
there will be a change in the business license ordinance which
could conceivably raise some additional funds though the City
changes but would also help the BIA. The problem is that if those
changes are not accepted or not adopted this year we are going to
come up considerably short of our budget. I know that Councilwoman
Rappa did bring ug,at thestudy session the Question of whether the
City would reconsider or give us additional opportunity to appear
and ask for an amendment or additional funding, we would like that
recognized in some form so that we do have something to guarantee
us that we're not going to come up suddenly at the end of the year
and have no money. Really, what we re saying is that we want to do
a good job for your we want to become self-sufficient. but at this
point we're worrying about the potential income. One other- thing,
that you Mr. Mayor brought up at the last study session, and I
think it is important for the . City to maybe do a little research
for themselves, you brought the question up of the original $20, 000
and the $30, 000 that we were receiving in the program from the City
to help fund some of our programs. That actually originated back
in 86-87 when we went to the Mainstreet Program, and one of the
stipulations in that program is that there is City funding of the
2
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SAN LUIS Oc,oPC. CA
management program, the direct management program, that's why they
have that program is to have professional management. So, we're
not saying that's what we want, we're just saying that you should
remember that that is something that was in that budget originally
and that was the purpose of it, it wasn't just given to us as a
free gift in a sense, it was given us for a purpose. Thank you.
Ron Dunin
Anybody else?
Gary Fowler
Mayor Dunin and members of the Council, my name is Gary Fowler, 777
Mill Street, San Luis Obispo. This the real issue that I came to
talk about this evening, and here before you again one last time in
a request that you do not consider any :new expenditure of City
funds for new hires for the next budget that is before you. With
our state and county budgets still undefined and allocations in
question, I'm sure that most of the property owners, taxpayers, and
residents of this City are wondering why this Council is spending
as if there's not problem with tax money revenues. If this Council
sees fit to go ahead with these hirings and no end to funding of
staff studies, surveys, and fundings of other questionable
programs, I suppose it's time to support a group which has already
identified itself in this City that wants to try to go to the
initiate process and to the ballot box to see about revoking the
City utility tax ordinance that we have here now of some 5%. If
the State is successful in passing a state-wide 2 . 5% utility tax,
I think this will happen anyway. Most people feel they are being �.
squeezed by too many entities to gain the funding that they cannot
extract from already exorbitant taxes throughout the other parts of
our government. It is indeed unfortunate that you as our elected
representatives cannot understand that just because the monies are
available to you you don't have to spend them without caution and
reserve. I again request that you wait at least a 12-month period
until the current ::tate and county budgets are finalized, until you
have a better picture of our overall sales figures for this current
9-month period of 51. I would also like to request that you defer
until July 2, the nudget, so that the full Council can be here and
we can see how they vote. According to the Telegram Tribune
figures that were recently published, it said that the City of San
Luis is looking at the additional hiring of eleven people, while
other cities in the counties are considering laying people off. I ,
think this is something that definitely should have a little
further consideration, and request that you defer this matter until
the July 2 hearing, thank you.
John Dunn
In regard to the new personnel hiring, the majority of those
positions are in the Police Department and based on law enforcement
and criminal statistics. The majority of the other positions are
conversions of existing positions, which were either temporary or
contract positions and those have been reviewed with the City
Council on a each position one-on-one, and we think they are
prudent recommendations before your. In -.regard to some of the �
other matters that were mentioned, I think that our revenue
projections, in particularly sales tax projections are based on
conservative principles, they based on our best assessment of what
next year will bring to us, we see the continuation and ultimate
slow recovery front the recession, all that has been taken into
account in our figures. Again, there was every effort made to
control the expenditures of this coming year, and certainly to make
those expenditures consistent with our projected revenues, and at
the same time to maintain the reserve policies that are in effect.
And, so I think that many of the points that Mr. Fowler raised are
really incorporated into our budget planning for this year.
Ron Dunin
Anybody else that. would like to address the Council? OK, close the
public hearing. Any further questions to staff?
Penny Rappa
I'd just like a reaffirmation from the Financial Director that the
concerns raised by the BIA I believe are being included as
narrative into the 91-93 budget.
Bill Statler
Yes. the BIA program narrative that describes the discontinuance of
General Fund subsidies will be. amended to recognize that this
recommendation is based on projected revenue levels that depend
upon Council adoption of a revised business 'tax ordinance, in_ the.
event that this revision does not occur or resulting revenue levels
are subsequently less than our original estimate_ then the level of
General fund support will be revisited by the Council.-
Penny Rappa
Well, I would encourage my -two colleagues who approved the budget
this evening, we have been at this a long time, we have a number of
programs that I'd like to and I believe that even those members who
are not present have spoken in favor of. I think that we need to
recognize that we are approving a budget, we will have ample
opportunity to appropriate funds at the appropriate time. I'm
really kind of pleased of the recent turnaround that I think the
nation, this state, and our local economy is showing.. Gottschalks
had their best quarter ever. We now have sort of been able to
better define the areas where our sales tax comes from, and we are
showing areas that: are kind of coming back again, the opening of
Ross's downtown, and I don't know if anyone saw the barricades
taken down, but the Monterey Street side I think is very. . . . ...and
I think that is going to be a real catalyst for revitalization in
the downtown. All. in all, I'm very pleased to be part of a City
that has planned well, has planned conservatively, and is not
forced to make the cutbacks that many other cities are facing. I
would just encourage my two Council. colleagues to approve .the
budget tonight, and let's move on with the land use element update.
Bill Roalman
I'll make it short, I am supportive of the'budget, I commend staff,
Mr. Statler, for the excellent job they've done. I think that it
is a conservative budget, and I hope that the public is aware that
as these expenditures come forth to Council, we have another
decision to approve/authorize that spending. So, what we have in
front of us is a document - a map if you will - of where we hope to
go in the next two years, but that at each turn of the road, we
will have another opportunity to look if the financial situation is
where we think its going to be, and so this is the first time I've
been through it but it was relatively painless and it was fun, so .
I'm supportive of the staff recommendations.
Ron Dunin
I think certain items that were made by Mr. Fowler, I think it's
important for the budget to be approved by the full Council. I
think the budget has to reflect the Council thinking and the
Council support, rhe Council is answerable to the electorate.
However, because I feel that the eventual outcome of this vote will
be passage. of the Council with no changes, I will vote for the
approval at this time, however, I would like to publicly 'state that
I don't want to hear during the year that you voted for the budget.
That's what happened last year, I voted for the budget to save the
budget from going down, and then some of my colleagues and some of
other people were reminding me all the year that you voted for the
budget. I think that the staff has done excellent job .in
preparation of the budget, that is probably the most important
factor in this. I think there are several frills in the budget
that does not reflect the fact that the future is not as rosy as
some of my colleagues are predicting or thinking that, we are in the
upswing in the moment. I think Councilperson Rappa mentioned l
opening of the new store, well, I'm very happy that she did mention
that, because the vitality of the downtown is very important and I
hope that the Council in the future deliberation will adopt the
attitude in supporting of the commercial establishments that are
trying very hard to come to the City because City cannot operate on
wishful thinking :.ome people that we can spend the money for all
the projects that are on their agenda without the considerable
amount of sales tax which is the mainstay in this community. So,
I vote for the budget and. I hope that as it was mentioned that we
will 'be very watchful of our expenditures. ok, if there is nothing
else, please vote.
Penny Rappa
We haven't got a motion yet. I would move approval of the
resolution approving the 91-93 Financial Plan and appropriating
.funds for the 91-92 coming year.
Bill Roalman
Second, and "that includes the amended analysis of staff?
Penny Rappa
Right..
Pam Voges
Motion carried unanimously.
� J
M� VNG AGENDA
�Brolorl'b Skoe git'--C 0 M P A N Y Nit- ` -9 mmiL.L.
COPIEE TO:
GENERAL OFFICES•846 HIGUERA STREET, SUITE'2 TEL �n2 2 FYI
LUIS OBISPO, CALIFORNIA 93401 cauncl CDDDIR�C
( ❑
fL
March 18, 1993 AACAO FIRE1 1EF
•A,iM%NEY ❑ F%1VDIP,
l CLERK/MG. ❑.POLICE C11
❑ mcmT.TE..\d CJ r.Ec.DIR
/Q
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CU
P.EAD FLE 11UTiL DIR. -
Honorable Mayor Peg Pinard 0, CCU N C/� _`^� ED
Vice Mayor Bill Roalman
y
Councilman Allen Settle
MAR 22 1993
CI-1y COUNCIL
Re: Mid-year Budget Review and 81A Funding Request sort L"$OB;SPo•CA .
As citizens of San Luis Obispo we may all have similar goals for our community. We
must also be aware of the fact there are different avenues that may be followed to achieve
these goals. Most often it is a failure in communication/understanding that hampers the
eventual realization of our mutual goals. This is was evidenced on Tuesday evening when
each of you voted to postpone the additional funding requested by the Business
.- Improvement Association.
Having attended the council_ nneeting it seems apparent there is a definite lack of
understanding by some council members when it comes to the goals, objectives, methods
of operation and organization of the BTA. The method of funding and the reasons for city
support seems to be especially misunderstood by certain council members.
Special note should be taken that even though the funding request of the BIA was denied,
approval was voted to fund a child care program and City Clerk's Office budget shortfall.
It is interesting that these two items were approved, while support to an organization that
makes substantial contributions towards the City's revenues was postponed. As a
community we are experiencing difficult economic times. It is important that during
these times investments made with City General Fund monies realize a monetary return
to the City if possible. Achieving a return on their investment has never been a problem
when the City has supported the BIA!
In the BIA's request for the additional funding ($15,900) there seemed to be confusion
on the part of council members as to: 1) Why was the request being made at this time?
2) Was it poor planning on the part of the BIA that eventually caused this shortfall? 3)
Has the BIA made appropriate reductions in its budget to reflect the current economic
env.
ronment? and 4) Why should the BIA expect the Council to approve this additional
funding? ,
After having now served t-wo consecutive terms on the Board Of Directors for the
Business Improveln�nt Association, i may have a better understanding of the difficult and
complex issues the Association is forced to deal with on a day-to-day basis. One of these
difficulties is the convoluted method in which funding is received by and through the
STORES LOCATED IN COLORADO CALIFORNIA SOUTH DAKOTA ARIZONA
I
City. Please be assured, the BIA is very cognizant of its budget limitations and has been
most frugal in making expenditures. Adjustments to our budget have been made not only
at the beginning of each fiscal year but continue to be monitored on a constant basis.
Prudent judgement has been used throughout the BIA's financial planning.
Last year the city staff cane to the BIA with a proposed new business license ordinance
and asked for the BIA's support. In reviewing the new ordinance it was the feeling of
the directors of the BIA that our organization would be receiving less revenue in the
forthcoming year. The City of SLO, on the other hand, would be receiving more
business license revenue because of new categories to be charged business license fees.
Because the City would be increasing its revenues it was eager to adopt the new
ordinance. It was also anxious to have the BIA support the adoption of the proposed
ordinance.
City staff assured the BIA it would receive a small increase in revenue, based upon their
projections, and if not there would be a recommendation back to the Council to approve
a mid-year_adjustment out of the City's General Fund. There were no "behind closed
door guarantees" and staff did not run ahead of the Council. But the fact remains; this
is where the BIA and the Council now find themselves.
Please let me offer a few insights that may make your decision to approve this additional
funding more understandable.
First is the fact that the BIA's principal responsibility is to continue to see that the. health
and well being of the downtown is preserved. This is accomplished by maintaining and
operating successful Promotional, Parking and Beautification committees. Because of the
efforts of these committees, there is additional retail revenue created. To continue to
follow the "income stream", this additional revenue generated, by the BIA creates
additional tax revenue to the city. So, to not consider funding the additional budget
request of the BIA would, in essence; mean a decision is made to have a reduction in.the
city's future income. This would compound the already difficult budget process the city
is faced with at this time.
Councilman Settle stated at the council meeting that he would find it difficult to explain
to a city employee why he voted to fund this request, and while at the same time he
would have to tell a city employee he/she may be laid off. If the downtown is allowed
to flounder because of a shortfall in funding there will be a greater number of employees
to be released from service because of a loss in tax revenues. By not approving the
BIA's midyear budget request the Council is not "spending a dime to make a dollar".
What needs to be understood is a simple fact: The BIA creates jobs, both in the
private and public sector, and generates revenues for the City's General Fund! _J
Councilman Settle's comments lack a basic understanding of what affords the city the
opportunity to generate increased revenues2
Secondly, the BIA has proceeded to operate in good faith that the additional funding now
before the Council would be a priority in any future budget adjustments. Last year when
the Council approved the '92-'93 budget the Council was made well aware of the
likelihood this additional request was a possibility. In fact, this possibility was written
in to the original budget approval.
I strongly urge you at your next council meeting to approve the additional funding of
$15,900 to the BIA. I also urge each and every council member to explore, research and
better understand the functions and importance of a healthy BIA. It is an excellent
organization. It is.also an crganiZat:cn that can help:>>s_.al.:achieve^t'_r £L: . L^. �Cai 0,
a more prosperous and healthy San Luis Obispo.
In closing, I want to thank you for taking the time to review and research the matter of
additional funding for the BIA. If I can answer any questions or be of any further
assista 'e, please do not hesitate to contact me.
C r ,
Tom Brown
cc: Lynn Block
John Dunn
o
3
LJ-Umiotm Action
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iii FETING AGENDA
6'Ai 'O ❑ FWFIRD2-. DATE ' ITEM #
L� ATTOfL�IEY ❑ FWD2.
191 K/OMC. ❑ POLICE C11
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(^ � "E 0.LUnL DIR
LOCAL GOVERNMENT' S ROLE IN DOWNTOWN REVITALIZATION:
CLEARING UP THE MISCONCEPTIONS
b
Pat Noyes V4 AR 2 1993
State Coordinator ry co r:a�
California Main Street 6HNLS0..3_sEe. CA
Of all the organizational issues that face Main Street programs
in small towns across the country, perhaps the, most
persistently visible, ever-changing and fundamentally important
is a program' s relationship with City Hall . A downtown
revitalization program may be in its early start-up stages or
may have existed for several years ; regardless, the interaction
between local government and the downtown' s private interests
requires careful definition,, especially in the assignment and
understanding of roles if efforts undertaken to improve
downtown are to succeed over the long term.
Unfortunately, while most everyone agrees about the
significance of and need for that "public/private partnership"
on behalf of downtown, it is in defining : that
relationship--particularly at the outset of a program--where
misunderstanding, program problems, and sometimes real
controversy arises . The problem seems to lie with the
community having a mixed understanding of what city government
does best versus what the private sector does best. In fact,
automatic assumptions are. often made about city roles and
responsibilities that, if acted upon, can actually thwart
progress in a downtown program.
Despite the fact that situations do differ from town to town
and sometimes demand special treatment, the socio-political
conditions necessary for a solid downtown program are more
similar than they are different in small towns nationally.
Therefore, the most common misconceptions regarding the proper
role of local government. are identifiable and need to be
clarified as a community undertakes and sustains a downtown
program:
1. CITY HALL HAS NO OBLIGATION TO THE REVITALIZATION OF
DOWNTOWN. WRONG!
This belief , often held by city hall itself , could not be
further from the truth. A community' s downtown area
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represents millions of dollars of government investment in -
public pro.perty and infrastructure. ' A public entity has the
same responsibility to maintain and improve its property as
does a private owner to care for his or her property; in fact ,
more so if one remembers that the public investment derives
originally from the private taxpayer . A revitalization program
protects public as well as private capital investment in
downtown and so requires public sector cooperation, involvment
and support.
A downtown program, in fact, maximizes public investment by
improving the opportunity to increase land values. which, in
turn, increases revenue to the city in the form of property tax
and retail sales tax. In short, a city stands to gain greater
earnings .
Cities usually identify job creation as a priority in their
overall economic development planning. Most downtown programs
undertake projects and services that stimulates business
development, which in turn creates . and. retains jobs . A city
can count this activity towards - meeting its employment creation
goals .
Generally, a healthy and attractive downtown experiences fewer --,�
safety and security problems . In terms of health and welfare
issues, therefore, it is in the city' s best interests to .
support endeavors which. protect the downtown environment for
shoppers and workers .
Finally, in most communities the downtown represents what once
was and may still be the commercial and cultural center of
town. As such, the downtown projects an image of the community
as a whole, good or bad, to residents and visitors as well as
to existing and potential investors . A positive community
image is as vital to city government as it is to the private
sector in terms of quality of Life issues and long term
financial gain. So, while the downtown may in fact never again
be the largest--much less only--commercial district in the
community, its role in terms of image alone requires that local
government support efforts to keep that image healthy and
appealing.
2 . CITY GOVERNMENT CAN ' T GIVE PREFERENTIAL TREATMENT TO ONE
COMMERCIAL DISTRICT OVER ANOTHER. WRONG!
In fact, in order to realize progress in a community, city
governments shift priorities among projects all the time.
Usually, local government gives priority to -those areas of a
community which have greatest need and/or to projects which -
-3-
provide the greatest community-wide benefit . A city government
policy, therefore, that affects equal treatment of all business
districts ax all times fails to address real needs and the
reasonable resolution of those needs, calls into question that
elected body' s ability to exert leadership on behalf of
constituent needs, and no doubt breaks down in practice, in any
case.
In terms of city support of a downtown program, therefore, it
is a political reality that downtown cannot always be given top
priority in the list of community projects requesting public
support. However, for the reasons listed above, downtown can
and should be recognized by local government as having
sufficient community-wide impact to warrant status as a major
priority much of the time. As will be discussed below, city
"support" can take several forms .
Giving downtown a priority status does not equate with giving
downtown a handout . The city' s "preferential" treatment of
downtown is matched several times over with investment from the
private sector.. Property owners upgrade their buildings and
store owners improve their inventory and business practices and
increase their advertising. With the city' s cooperative
support, an atmosphere , of positive change instills confidence
in the private investor.
3 . CITY HALL HOLDS ALL THE DECISION-MAKING CARDS: MAIN
STREET' S THEIR RESPONSIBILITY. WRONG!
Both the public and private sectors appear to hold this view
when downtown revitalization is narrowly defined as consisting
primarily or exclusively of physical improvements . The private
sector needs to understand that it has the most to gain in
investment returns and so should serve as a real and active
partner with the city, both financially and in terms of program
management . In many ways the private sector balances the city
in the decision making process .
City Hall , on the other hand, needs to cultivate the financial
and organizational involvement of the private sector in order
to leverage any public funds ( ideally viewed as "seed" money)
to be invested in the downtown and to minimize being in the
difficult and sometimes inappropriate role of real estate agent
on behalf of downtown. Given that the private sector can
respond faster to changes in market conditions. it - is the
private sector' who , provides the gr eates,t opportunity for
positive change. The private sector should be viewed as a
required partner to the city if long term positive change is to
occur . The responsibilities of the public and private sectors
may be different, but they are nonetheless shared .
-4-
4. ALL CITIES HAVE TO OFFER A DOWNTOWN PROGRAM IS MONEY.
WRONG!
However, whether the request comes from a city staff person or
a city resident, it is true that money is likely the first item
discussed when the city is approached to help downtown. In
reality, one of the reasons why City Hall can be such a
valuable partner to a downtown program is the range of
assistance it can provide other than .moaey:
Technical Expertise. In terms of planning, land
use and development standards, public works and
engineering, redevelopment law, economic
development strategies. market research and other
demographic data., design review and the permit
process, the city offers a wealth of information
and staff abilities that can assist a downtown
program enormously. City staff can be directed to
focus on projects involving downtown, thereby
establishing program priority and providing
necessary labor .
* Political/Legislative Policy. City Hall can
support a downtown program by the way it
interprets existing and formulates new '. policy Jl
impacting downtown, including: waiving user fees,
prioritizing development projects, forming
assessment districts, establishing zoning and land
use policies for intill and new commercial,
offering tax rebates, monitoring parking
management, enforcing safety and security
procedures, qualifying projects to receivepublic
funds, placing downtown in a redevelopment
district, supporting the retention of public
offices in the downtown, giving downtown priority
in the city' s capital improvement budget from year
to year. (An example: any decision that a city
may be considering to expand existing or new
commercial districts outside the downtown
automatically needs to be weighed against the
impact such activity would have on the overall
health of the downtown area. )
* In-Kind Contributions . In lieu of funds. _ City
Hall can lend some of the materials and staff time
a downtown program needs ; e.g. , furniture and
supplies, computer time, xeroxing services,
clerical assistance. Some cities are able to
offer downtown programs, insurance coverage under
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-5-
their umbrella policy, or personnel benefits to
program staff , such as health insurance.
5 . IF CITY MONEY IS INVOLVED., THE DOWNTOWN PROGRAM. MUST BE
HOUSED IN CITY HALL. WRONG!
There is no more reason to house Main Street in City Hall
because the program receives city funds than there is reason to
house any other community program receiving city funds in. City
Hall . In fact, with some few exceptions , there is very good
reason not to place a downtown program in City Hall. This
holds true even if , for example, a start up program is
receiving the bulk of its funds for operating expenses from a
single public revenue source and the city is also sinking
substantial funds into downtown public improvements in a
project that requires city staff ,attention. While the above
example demonstrates real city commitment, it does not
automatically define the best case for effective "owne.rship" of
a comprehensive program.
To attract and retain support from downtown businesses ,
property owners and the community at large--support that
translates into private reinvestment, volunteer participation,
and private leadership endorsement_-a downtown program needs
its own identity. For reasons stated above, it is very
difficult for a city to serve as a credible advocate for
downtown, private interests, which it is. forced to do when a
Main Street program is part of city government . Ideally, a
Main Street program is housed in its - own non-profit corporation.
At the same time, as a vital player, City Hall has every right
to be concerned about the management of and results coming from
a downtown program housed in a separate non-profit. Concern is
justified given the city' s existing public investment in
downtown; concern is even greater when a city is planning
projects for downtown and giving money to a program. In such
instances it is entirely appropriate for the city to require a
contract with the Main Street program entity that specifies the
scope of work the program will undertake. it is also
appropriate in such cases for a representative from the city,
ideally an elected official, to sit on the Board of Directors
of the non-profit. A city official,. normally serving in an
ex-officio, non-voting capacity on the Board, performs an
important liaso-a function for both the non-profit and the city,
providing information both ways .
In any case. a non-profit organized .to;' do Main Street needs to
realize that it must be accountable to all funding sources for
program results regardless of the source, and especially it
-6-
must be accountable to the city, regardless of the level of
funding from the city ( if any) . especially because of the
relationship a program needs to cultivate with its local
government entity.
6 . THE CITY ALREADY HAS" AN INDUSTRIAL/ECONOMIC DEVELOPMENT
CORPORATION (CHAMBER OF COMMERCE, ETC. )--THEY CAN DO
MAIN STREET. WRONG!
This does not hold true, for the same reasons stated above.
Downtown requires full time managment and focus . A downtown
program is best sustained and achieves maximum results when the
organization has its own identity and the management discretion
to make needed decisions . City government, a chamber of
commerce and an economic development agency all have geographic
areas of program concern and ranges of political issues that
far exceed the boundaries of downtown. While these entities
are all "stakeholders" in downtown and a credible downtown
program needs to establish strong relationship with each ' of
them, the organization 'of a downtown program needs to be
self-managing.
There are exceptions to this principle, as in the case of
communities whose populations are smaller than 5 , 000 and whose l
downtown business districts have fewer than 50 businesses .
There might also be a chamber of commerce in such instances
already serving the downtown primarily. Human and financial
resources being more limited in such circumstances, it can make
sense to house a downtown program within the chamber orcity
hall .
7 . CITY HALL' S INVOLVEMENT ENDS AFTER THREE YEARS. WRONG!
Three years is the usual time frame associated with programs
given "demonstration" status by a state Main Street program.
However , local program participants from both the public and
private sectors often mistakenly assume that the end of three
years of intensive on-site assistance from either the state or
National Main Street Center means that the local program is
either "finished" or that the local program is "on its own. "
In the first place, downtown is never "finished; " on the
contrary, ,as its market is in constant flux, downtown demands
permanent management if it is to stay attractive and
economically sound. Commitment to this level of long term
management must therefore be permanent . The partnership
between the public and private sectors that is necessary to
initiate a downtown program is the same partnership that is
needed to permanently manage a downtown program. Roles may
shift slightly and activities change, but the relationship must
i
-7-
exist . City involvement is particularly important because
public policy involvement continues .
In addition, a city' s financial commitment to downtown should
continue. While local government can rightfully expect a Main
Street program to attract private funds' for program operation,
thereby reducing the need for city funds , the city is not off
the hook altogether . Experience nationwide shows that Main
Street program budgets increase annually due primarily to added
project costs, and in only a very limited way .to added overhead
costs . It is often these projects which attract private
financial support to a program. In fact , it is easier to raise
private money for specific projects than for overhead.
(Although, in approaching funding sources, it is important for
a Main Street program to market the existence of the
organization as integral to the program services , projects and
products it offers) .
If , then, it is easier to attract public monies to cover
non-profit overhead, it is not inappropriate for a Main Street
program to request and receive some level of financial support
from the city, even if eventually that level is very small . As
it is , a successful downtown program usually reflects the
reality that City Hall is making necessary public improvements
�`• to the downtown, which is a significant commitment in and of
itself . In the final analysis , whether the city' s financial
involvement focuses on Main Street' s operating budget or upon
needed public improvements , or both, city hall ' s involvement
never ends . It is all the more essential , therefore, that Main
Street and the City continue to carefully define the nature and
extent of their partnership .
8368D
i 1
L'I1IS
MIEMOR),NDVM
TO: Mayor Pinard
Council members Rappa, Roalman, Romero, and Settle
FROM: TYM Block, Administrator
DATE: March 22, 1993
RE: 1992/93 Mid Year Budget .Review
The BIA Board of Directors would like to clarify several
factors which were stated .at the City Council meeting on
March 16, 1993 regarding the BIA mid year budget request of
$15,900 to make up the difference between the projected and
collected business license tax revenue for the BIA area.
* The BIA revenue is based solely on the double business
license tax that its members pay. Over the past several
years, the BIA has been working toward self-sufficiency at
i
the direction of the City Council.
The fiscal year 1992/93 was to be the first year of total
dependence on the business license tax revenue. The BIA
budgeted accordingly, based on the recommendation of
City staff the .projected collections and the continued
support of the City Council in funding any difference
between the projection and actual collections.
The BIA started the two year budget process with a healthy
reserve level of $49,000. The reserve level will be
decreased to less than $2,000 should the City Council.
decide not to support its prior motion to fund the
$15,900 difference.
I'
While this may not be a priority to the City Council, as
a part of the City, all other departments maintain a !i
reserve of 20%. The BIA would be the only department that
would have a fund balance of 1%1 The City Council would
be creating a new policy if the request was not supported
of separating the BIA from adhering- to- City Financial
Management policy. !�
i
!
i
ii
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P.O.Bar 1402•&m Lair Ob*•G•93406.805/541-0286
I
* In prior meetings, the City Council has stated that
advertising should not be decreased in order to maintain
economic vitality during the recession. The BIA has cut
the following programs due to the budget shortfall:
* Advertising for the following events:
Peter Rabbit Birthday Party
Children' s Day In The Plaza
Easter Treat Hunt
Mothers Day Promotion
Fathers Day Promotion
Downtown Brown Birthday Party
"Shop Downtown" TV commercial
* Other cuts include: Downtown Brown at Farmers' Market,
New member breakfasts, BIA newsletter, all office
supplies, advertising agency contract, SLO Sweep,
seminars for BIA members, and the BIA contribution .
to La Fiesta Breakfast. `
A decrease in the Administrator' s work schedule to
accommodate two staff salary increases which were
planned before the budget cuts are implemented.
The BIA is staffed by a full time administrator, one
part time clerical, and a coordinator for
TNA/Farmers' Market. An increase of fifty cents per
hour was planned for each of these employees in
April. These employees receive no benefits (health
insurance, sick leave, or paid vacation) since they
are classified as temporary City employees.
We feel that the $15,900 that the City Council would
contribute to the BIA would be a great buy for all
the above activities!
* The City Council has recently appointed an Economic Task
Force designed to develop suggestion for the City Council
to consider on how to retain businesses in the community.
The BIA has always worked to assist and improve the
operation of businesses in the downtown. Promotion of the
area and development of a comprehensive member services
plan which include seminars and shopper programs are two
examples of this effort.
* The City Council has an established grants-in-aid program
to return a portion of the Transient Occupancy Tax to the
community. We feel that by supporting the BIA, you are
re-investing in the future of the downtown.
rp
Thursday Night Activities/Farmers' Market has turned
San Luis Obispo into a three day weekend tourist
destination, adding another night stay increases the
sales tax and TOT revenue. We feel that the sponsorship
of this event and the revenue it brings to the City
justifies our request for the $15,900.
The BIA area represents the second largest source of sales
tax revenue for the City. The 513 businesses. in the BIA
generate 14% of the sales tax or $227,000 per quarter. We
feel that your contribution would yield a higher return to
the City invested in the BIA.
* Finally, the City Council has agreed upon goals and
objectives for the downtown including making it the center
of the cultural, governmental and civic activities of the
community. Without support from the City Council of the
BIA' s efforts how would these .goals and objectives be
accomplished.
The planning that San Luis Obispo has done to maintain the
prosperity of the downtown is held up as an example for
other communities. We encourage you to continue that
support and help us carry out the mission you have
established for the downtown.
We all want to have a downtown that is a place to gather
and enjoy the creek, Mission Plaza, and quality of life
that draws people to our community. Your level of
commitment will shape the future of the downtown.
We are asking that you consider fully the ramifications of
your policy decision. We understand that- the BIA 'must
suffer' with the rest of the City, but it is important to
remember that the City is suffering because sales tax is
down. The BIA revenue is based solely on sales tax
generated by the member business. It is safe to say that
the BIA has been suffering because of the decreases in sales
tax. .we would not need to ask the City Council to fund the
shortfall if sales tax revenue met the City projection.
The City Council has established an Economic Stability Fund.
which was specifically designed to "preserve and promote
financial stability of the Community" . We feel that the
usage of these funds to support the downtown clearly fits
the above stated description.
In anticipation of the lower revenue for the coming year,
based on current vacancies and upstart business in the area,
the BIA has been frugal in its budgeting process. The
budget was reduced from $179,000 in 1991 to .$129,000 in
1993 .
J 1
Attached is an article from the Director of the California
Mainstreet program which is a national organization of J
downtown associations." San Luis Obispo was selected to be
part of this program in 1987. We feel that this article
clearly summarizes the relationship between the City and the
BIA in planning for the prosperous future of downtown.
Please feel free to contact Lynn Block should you have any
questions about this item at 541-0286. We are happy to
discuss any or all of these issues with you at your
convenience prior to the April 6th City Council meeting.