Loading...
04/19/1982City Council Minutes Monday, April 19, 1982 - 12:10 p.m. Page 2 economy was in a period of stagnation and he expected very little turn around next year. Secondly, the State would be withdrawing funds from local government equal to or exceeding the amounts proposed in the Governor's budget. Using those two assumptions, it appeared the City would experience a 1.1% increase in total revenues. One factor was that the investment earnings would be substantially reduced as water and sewer reserves would used for capital improvements. He explained that he was using a "worst case" estimate of the coming year's resources. He then went through twenty -five exhibits he had prepared giving the historical trends from 1977 through projections of 1983. Looking at total revenues, the estimate for the coming year showed a smaller percentage increase in 78 -79, which was the year of Prop 13. Next year estimates showed total revenues of $16,263,136. He then broke this down into various categories of revenue. The most dramatic being that as a government agency we are dependent upon taxes for our existence as 47.9% of our revenue in the coming year would be coming from taxes. The second most significant category was the enterprise operations of the City which is the water and sewer utilities, parking funds and bus transit operations, which contribute 26.1% of the total revenue. The revenues derived from fees and services charges and its expenditure is restricted to the services being provided. He stated the final category of significance was ,subventions.; and :grants . received =from other governments. Those accounted for 15% of the total projected income and came from a variety of sources although many contained restrictions of their use. The remaining categories when combined, contribute the final 11% of the total projected revenue. He then examined each of the significant categories, i.e. 1) tax revenues, which consist of property tax, sales tax, utilities taxes, bed tax revenues, franchise tax and business license revenues; 2) subventions and grants consisting of motor vehicle in lieu fees, property tax relief,, state cigarette tax, state gasoline taxes; federal revenue sharing, other grants and in lieu taxes and alcoholic beverage fees; and 3) enterprise revenues, water utility revenues, sewer utility revenues, parking fund revenues, transit ' revenues. He summed it up by stating that in the end the City could expect the General Fund increased by 2.4% and special revenue funds by 6.6 %. The total monies available for streets and highways would increase by 9.3% while the funds traditionally used for capital improvements would decrease by 12.3 %. Finally, the combined enterprise funds would show a margin of 1.9% increase and the overall total would post a net gain of 1.1 %. Paul Lanspery, City Administrative Officer, stated that, of all of these taxes and other fees collected, only the parking fines could be increased by the Council, although this would represent a very small percentage of the overall picture. He did state that other fees such as park and recreation fees would continue to be increased so programs would pay for themselves: He stated that he is working on the initial departmental budget requests and would expect several of them to require cutbacks. Also, not included in these figures is the Police and Fire MOU's. After brief discussion,. Council received and filed the reports (5 -0). Monday, May 17th, at 12:10 p.m. was set to discuss the overall 1982/1983 budget process. ITEM 2: PCC BUDGET FORMULA Paul Lanspery, City Administrative Officer, explained that the policy included a policy statement which he would not expect the Council to adopt today, but rather review it and make any recommendations or suggested changes and then adopt it as a part of the upcoming budget hearings. Rudy Muravez, Finance Director, explained that -with the expenditure of public funds there has to be an attempt at reconciling costs with benefits since the purpose of these expenditures were defined as "community promotion ". He had performed an analysis of the benefits which accrued from promoting San Luis Obispo, recognizing that this was a tourist related community and that.a substantial portion of the local City Council Minutes Monday, April 19, 1982 - 12:10 p.m. Page 3 economy was dependent upon the tourist industry. He explained that if you applied the percentage differences of those tourist related categories to the total retail base, you arrive at a tourist market of approximately $32 million annually. A second element of the tourist industry was the revenue derived from hotels and motels using the amounts of estimated bed tax that was approximately $13 million in annual revenue. As a 'comparison,' he used the City of Santa- Maria'which shows an estimated hotel and motel market of $6,250,OOO.finding that the difference or incremental revenue is approximately $6,750,000. When this is added to retail sales of $32 million it definitely shows that tourism makes a significant contribution to the local economy. He then explained how advertising is classed as a hard sell expenditure to promote the tourist industry. Promotional services, however, would be a soft sell expenditure and that many of the Chamber of Commerce activities benefit local residents as well as promote other industries. And lastly, the grants -in -aid and facilities reserve, which relate to community promotion. Those two categories were intended to provide the environmental amenities, both cultural and physical, which would make the City a desirable place to visit and live. He felt the earmarking of funds for community promotion had resulted in a soundly financed and beneficial promotion program during the past 12 years. It was therefore staff's recommendation to continue the current general formula approach whereby the Council would allocate funds on an annual basis for promotional expenses. It was also recommended that the program name be changed from Community Promotion to read "Community Promotion and Facility Support ". Councilman Griffin stated that he had no real problem with the philosophical approach; however it was time to review the formula. He did feel the original establishment of this formula had some validity. He would like to see the policy statement,. though, recognize the cultural aspects of this functional area. He felt the facilities support was a valid one. Councilwoman Dovey stated she had no problem using the bed tax as one of the bases for the formula especially in light of the history and promised by previous Councils to the hotel and motel industry that the bed tax would be used for promotion. However, she would suggest limiting the formula by eliminating both the sales tax and the business license tax. This would also allow the General Fund to be increased and yet using a certain percentage of the bed tax would not decrease the promotional funds available. Councilman Dunin gave a brief history of the promotional formula and the establishment of the Promotional Coordinating Committee. A great deal of thought had gone into the establishment of this formula. He felt it was a good one and unless someone could present a better one, he could not see disposing of it. Councilman Settle agreed with Councilman Dunin and stated he could support the formula and also support the suggested name change from Community Promotions and Facility Support. He would support the staff recommendation. Councilwoman Dovey stated that she did not like the idea of earmarking funds unless there was no other way. She felt her suggestion of eliminating the other two taxes was an effort to simplify the formula. She would like the formula simplified and staff to take an overall look at the revenues derived. Councilman Griffin stated his primary concern was not locked into any one particular formula but he did feel there should be some continuity and assurances that monies would be continued to support these promotional and cultural activities. Councilman Dunin expressed again that the main source of income to the City was through the sales tax and bed tax which constituted the financial health of the City of San Luis Obispo and unless something better comes along he would support the current formula to promote the 1 1 1 1 1 1 City Council Minutes Monday, April 19, 1982 - 12:10 p.m. Page 4 City. In response to an earlier comment, he stated that if the City were to find itself in financial trouble then this is the time where more monies need to be put into advertising. He would support adopting the policy statement at the budget hearings. After brief discussion, and upon general consensus, Council agreed to maintain the current promotional formula, look at the policy statement during budget time and include a statement emphasizing the cultural aspects. Council also agreed to the name change. 2:00 p.m. Councilman Griffin left the meeting. A -2 LEASE AT SAN LUIS JUNIOR HIGH SCHOOL Paul Lanspery, Administrative Officer, stated that the Board of Education of the San Luis Coastal Unified School District had opted to close the Junior High School at the close of 81/82 to ease the strain on their budget during a period of low enrollment. Subsequently, the board called for bids from the outside for interim use of the school and received four bids plus a letter from the City of San Luis Obispo indicating preliminary interest in the office, gym, home economics unit and the outdoor fields and court. The Board would meet again on Tuesday, April 20th, to consider those .bids received. He questioned whether the Council was interested in the City continuing to indicate to the Superintendent of Schools that the ,City was interested in acquiring this site on-an interim basis: Upon question, he' stated the City was looking at a five year lease with an option to lease for an additional five years, or a total of ten. He submitted a list of preliminary figures prepared by Jim Stockton, Recreation Director, on the first year cost estimates. He explained that the indication to the school district that the City was interested would be followed up with a written proposal after negotiation and better costs had been determined. He was simply now asking if the Council was interested in submitting this type of proposal. Councilman Dunin stated proposal at this point. and was afraid this could that he could only be lukewarm about the He felt there were a lot of pitfalls involved get quite costly. After brief discussion, Council directed staff to write a letter to the school district informing them of the City's interest in a possible lease proposal (4 -0 -1). There being no further business to come before the City Council, Mayor Billig adjourned the meeting at 2:15 p.m. ...'APPROVED BY COUNCIL: 5/18/82 Pamela Voges, C' y Clerk