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HomeMy WebLinkAbout04/06/1993, 7 - MID-YEAR BUDGET REVIEW FOLLOW-UP MEETING DATE: �����i ►►�►IIII��piglUlli City Of San LUIS OBISPO 4-4 - 93 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. f� D-90 �� u�►16i�u V��� city o f San ] ins OBispo S�.►, 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- Z-p 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 cl ry CCU.:X; 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 E-) 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 ❑ 'D A iii FETING AGENDA 6'Ai 'O ❑ FWFIRD2-. DATE ' ITEM # L� ATTOfL�IEY ❑ FWD2. 191 K/OMC. ❑ POLICE C11 ❑ MGMT TEA N7 C.I PEC.DIR (^ � "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 -2- 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 - I -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 i 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.