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08-15-18 Various Questions and ResponsesCi f August 15, 2018 To: Mayor/Council Candidates From: Derek Johnson, City Manager Subject: Response to Questions and Request for Information from Keith Gurnee We have received a number of questions and requests for information from a Mayor/Council Candidate. Below are the questions and their responses. Question #1 What is the amount of the city’s current public pension liabilities and by how much is that liability due to increase over time? Is there a report on this issue that I could read, particularly on how the amounts of public pensions are calculated? Response The most recent CalPERS valuation reports indicate the City’s total pension liabilities are $397,968,482, of which $149,162,991 is unfunded for a funded ratio of 62.5% as provided in the chart below. The valuation reports include unfunded liability projections for the next five years (2020-21 to 2024-25). These projections are incorporated in the City’s financial forecasts and the City Council adopted the Fiscal Health Response Plan (FHRP) on April 17, 2018 aimed at addressing these costs. Prior to adoption of the FHRP a community forum (Attachment 1 - Presentation) was held to help the public understand public pensions and costs as well as the City’s plan to address these costs. As of 6/30/17 Miscellaneous Safety Total Liabilities 208,024,462 189,944,020 397,968,482 Market Value of Assets 128,186,064 120,619,427 248,805,491 Unfunded Liabilities 79,838,398 69,324,593 149,162,991 Funded Ratio 61.6% 63.5% 62.5% Staff have analyzed paying these costs more aggressively, when possible. During the three years of the Fiscal Health Response Plan staff recommends paying a total of at least $12 million toward the unfunded liability. This will be accomplished by paying on a 20-year amortization schedule and including added payments toward the unfunded liability principal. Council Candidate Questions/Responses August 15, 2018 Page 2 The Enterprise Funds will contribute their obligations to the unfunded liabilities at year three of the Plan. Council will approve the additional principal payments at mid-year by evaluating the recommended amounts arising from the CAFR’s year-end reports. Concurrent to this effort staff will continue to analyze the impacts of these added principal payments in the outer years of the obligation as well as the benefits of a Section 115 Trust. By addressing this problem in this way, over the three years of the Fiscal Health Response Plan, the City will save on reduced interest expense over the life of the payments, will stabilize its expenditures and will not have to consider reductions every year to address continued increases to this unfunded liability. Staff anticipates returning to Council in spring 2019 with further analysis and recommendations. Question #2 In the city’s negotiations with its employee workgroups, what are the current comparative cities being used for comparable compensation and how are those cities determined? Response In general, comparison agencies are selected by considering a number of demographics and characteristics including: 1) coastal or close proximity, 2) proximity to a major college or university, 3) tourism being an important part of the city’s economy, 4) day-time populations ranging from 30,000 to 110,000, 5) education level of residents (that can influence service level expectations), 6) median home sales prices, 7) median household income, and 8) geographic locations from which San Luis Obispo receives applications for position. This methodology resulted in the General Comparison Agencies list below and has been used for negotiations and compensation discussions with the San Luis Obispo City Employees’ Association, Management, Confidential and the San Luis Obispo Police Staff Officers’ Association. The San Luis Obispo Police Officers’ Association (POA) and the International Association of Firefighters, Local 3523 (Fire) and negotiated their comparison agencies as part of their contracts governing wages, hours, and working conditions. In addition to the above demographics, other factors such as number of fire stations, types of call responded to, staffing levels, etc. may be considered in negotiating these cities. General Comparison Agencies 1. Clovis 2. County of SLO 3. Davis 4. Monterey 5. Napa 6. Paso Robles 7. Petaluma 8. Santa Barbara 9. Santa Cruz 10. Santa Maria 11. Santa Monica 12. Ventura Police Officer Association (POA) Comparison Agencies 1. Gilroy 2. Monterey 3. Napa 4. Petaluma 5. Pleasanton 6. Salinas 7. Santa Barbara 8. Santa Cruz 9. Santa Maria Fire Comparison Agencies Council Candidate Questions/Responses August 15, 2018 Page 3 1. Davis 2. Monterey 3. Napa 4. Petaluma 5. Pleasanton 6. Salinas 7. Santa Barbara 8. Santa Cruz 9. Santa Maria Question #3 Who are the top 50 highest compensated city employees and in what positions do they serve? Response This list was generated from base pay and not total compensation or total earnings for a specific time period. The list represents regular rate of compensation and does not include potential for overtime. Also, there are 58 people on this list. The Fire Captains are all being paid at the same base rate and it was not appropriate to include some and not others. L Name F Name Class Title Johnson Derek City Manager Dietrick Jacquelyn Christine City Attorney Cantrell Deanna F Police Chief Olson Garret M Fire Chief Staley Christopher H Police Captain Smith Jeffrey G Police Captain Irons Monica M Director of Human Resource Codron Michael B Director of Community Dev Grigsby Daryl Director of Public Works Mattingly Carrie G Director of Utilities Stanwyck Michele A Director of Parks & Rec Aggson Keith A Deputy Fire Chief Bledsoe John R Police Lieutenant Amoroso Brian C Police Lieutenant Berryman Neal R Fire Battalion Chief Bisson Robert E Fire Battalion Chief Doyle Ray C Fire Battalion Chief Horn Matthew A Dep Dir-Pw/City Engineer Mickel Frederick G Police Lieutenant Davidson Douglas G Dep Dir-Community Development-Dev Review Bochum Timothy S Dep Dir-Public Works Hix David C Dep Dir-Utilities/Wastewater Elke Brigitte R Interim Dir Of Finance Fowler Xzandrea D Dep Dir-Community Development-Long Range Council Candidate Questions/Responses August 15, 2018 Page 4 Pfarr Chad R Police Sergeant Hixenbaugh Kurt A Police Sergeant Cudworth Robert W Police Sergeant Villanti John D Police Sergeant Booth Jeffrey D Police Sergeant Ansolabehere Jon M Assistant City Attorney Schmidt Stephen H Info Technology Manager Hermann Gregory P Interim Deputy City Mgr Floyd Aaron Dep Dir-Utilities/Water Phillips Kevin P Police Sergeant Schafer Aaron J Police Sergeant Maggio Rodger M Fire Marshal Hill Robert A Int Dep Dir-Sustainability Pardo Ricardo M Accounting Manager Shalhoob Trevor R Police Sergeant Hudson Jacob D Transportation Manager Hannula Hal K Supervising Civil Engineer Fisher Richard M Engineering Consultant Treanor Bryan C Police Sergeant Boyle Donald K Hazardous Materials Coord Corey Tyler A Principal Planner Guzman Manuel Construction Engineer Manager Gonzalez Steven R Fire Captain King Michael R Fire Captain Larson Jody J Fire Captain Marshall David L Fire Captain Mac Donald John A Fire Captain Hale Gary S Fire Captain Callahan Matthew N Fire Captain Vasquez Mark L Fire Captain Fox Ii Samuel R Fire Captain Clinite Michael R Fire Captain Lipson Matthew M Fire Captain Gutierrez Armando G Fire Captain Council Candidate Questions/Responses August 15, 2018 Page 5 Question #4 What is the total number of public employees currently working for the city and what is the number of public employees by city department? Response There are 393.55 full-time equivalent regular (not including temporary) positions working for the City. Below is a breakdown of the number of employees by City department. Question #5 What was the total number of public employees working for the city back in 2010 vs. today? Response Below is a table that shows the number of full-time equivalent regular positions working for the City in 2009-10 and 2018-19. DEPARTMENT 2009-10* 2017-18 2018-19 City Administration** 6.5 25.0 26.3 City Attorney's Office 3.0 3.0 3.0 Community Development 41.1 32.4 32.9 Finance** 21.5 12.5 12.5 Fire 53.8 57.0 57.0 Human Resources 5.0 5.0 5.0 Parks & Recreation 12.0 18.0 18.0 Police 86.5 85.5 85.5 Public Works 68.0 84.3 84.3 Utilities 60.8 69.1 69.1 Council Candidate Questions/Responses August 15, 2018 Page 6 FULL TIME EQUIVALENTS (FTEs) 358.2 391.8 393.6 *Source: 2009-11 Financial Plan http://www.slocity.org/Home/ShowDocument?id=4927 **Note: Compared to 2009-10, City Administration now includes IT/GIS (previously in Finance and Public Works), Tourism, City Clerk and Office of Sustainability staff. Question #6 How much revenue is expected to be generated by Measure G in this fiscal year and how much of that revenue is expected to be spent for what identified capital improvements? Response The projected revenue to be generated by the Local Revenue Measure (Measure G) in 2018-19 is $7,673,084. Of that revenue, $4,687,323 was budgeted for capital projects. Below is the list of the 2018-19 capital projects and their budget. The remaining revenue, $2,985,761, is budgeted for positions such as police officers, capital project engineers and open space rangers. For more information regarding the Local Revenue Measure, please click on the Local Revenue Measure Annual Community Report Fiscal Year 2016-17. Measure G 2018-19 Capital Expenditures Budget Mission Plaza Restroom Replacements and Enhancements $25,000 Park Major Replacement & Repairs $290,000 Playground Equipment Replacement $80,000 Fire Station 4 Emergency Backup Generator $72,500 Ongoing Open Space Maintenance $60,000 Open Space Acquisition $100,000 City Facility Parking Lot Maintenance $120,000 Major Facility Replacement $596,700 IT Replacement $182,023 Bicycle Facility Improvements $75,000 Bob Jones Trail Prefumo Creek Connection to Oceanaire $216,000 Neighborhood Traffic Improvements $75,000 Pedestrian and Bicycle Pathway Maintenance $60,000 Railroad Safety Trail (RRST) - Pepper Street to the Train Station $30,000 Transportation Safety & Operations $30,000 Fleet Replacement $508,000 New Street Lights $20,000 Sidewalk Replacement and Installation $50,000 Street Reconstruction & Resurfacing $2,072,100 Traffic Signs & Striping Maintenance $25,000 TOTAL $4,687,323 Council Candidate Questions/Responses August 15, 2018 Page 7 Question #7 How much money did the city contribute to the Chamber of Commerce this year? Response In 2017-18, the City paid the Chamber of Commerce $248,840. Of that amount, $85,900 was paid from the Tourism Business Improvement District (TBID). The TBID levies an assessment on all lodging properties for the purpose of tourism promotion. A seven-member advisory board, comprised of San Luis Obispo hoteliers, recommends the use of the assessment to the benefit of the district’s constituents. This funding does not come from the General Fund. Most of the remaining amount came from the Community Promotions program which promotes the City’s unique lifestyle and enhances the cultural, recreational, and social wellbeing of residents and visitors alike. The primary focus of the program is targeted marketing advised by the Promotional Coordinating Committee (PCC) to support the community. The PCC focuses on the promotion of events and activities, visitor services, and beautification and community enhancement efforts. This funding does come from the General Fund. Question #8 In 2010, the City Council apparently gave its direction to have the LUCE process be “resident based” with extensive outreach and public involvement within individual neighborhoods. Yet when the LUCE was prepared, the process relied upon an appointed “Task Force” comprised of representatives designated to represent certain parts of the community. Why did the original “resident based” and “neighborhood” process not happen? Response The seated Council in 2012 determined the process to appoint LUCE Task Force Members. On March 6, 2012, the City Council determined that the City should seek LUCE Task Force Applicants who are residents and may have broad interests but not necessarily be bound to one interest group or another. Additionally, Council determined that the appointment of task force members would be made by the full Council. To begin the process, the Council determined the size of the committee and the process by which applicants will be appointed and members were selected at a regularly scheduled City Council meeting on March 13, 2012. Thirty-one applications were timely received. Seventeen members were selected by the City Council. A requirement of all applicants was that they lived in the City. Question #9 Has the city risk manager weighed in on the liability exposure of night hiking and biking in its open space reserves? If so, what advice was given? Response The City’s risk manager was not requested to formally “weigh in” regarding the question of potential liability exposure associated with the Pilot Program for Winter Open Space Hours of Use. The City enjoys broad immunities from tort liability associated with recreational trail use under Government Code section 831.4(b)1 and Civil Code section 846. Council Candidate Questions/Responses August 15, 2018 Page 8 Additionally, staff set forth safety, of both trail users and emergency response personnel, among the evaluative criteria for Council to consider in its decision making on this item. Council also received and considered public comment testimony and written correspondence regarding safety that is in the record on this item. The Mitigated Negative Declaration that was adopted for the Pilot Program includes a mitigation measure, BIO-3 Public Information and Education Materials, that will include additional messaging about user safety considerations. Managers throughout the City are trained to incorporate and address potential safety and risk management concerns in their recommendations and to consult with risk management experts as needed for unusual situations. Question #10 What happened to the funding for Laguna Lake dredging and how does that dredging rank amongst the current Council’s priority list? Response In the 2015-17 Financial Plan the Laguna Lake Dredging project was funded with $450,000 to provide engineering, environmental review, permitting, and economic advisory services. With this work ongoing, in the 2017-19 Financial Plan the implementation of this work was funded with $40,000 in the fiscal year 2017-18 and $200,000 in the fiscal year 2018-19. In order to reduce environmental impacts, permit conditions typically require that this dredging work must be completed by October 15th. Due to the limited window of opportunity to complete the dredging work each year, all regulatory permitting work must be completed and the project ready to advertise for construction bids a minimum or four months prior to the beginning of the construction window. In June 2018, staff recommended to Council that the 2018-19 funding in the amount of $200,000 be appropriated from the Laguna Lake Dredging work to a Traffic Safety Project on Laurel Lane that was underfunded and ready to construct as future year budget projections included this level of funding for sediment removal. Council approved staff’s recommendation and the traffic safety project is currently underway. This recommendation was made since all necessary regulatory permits had not been obtained and there was no feasible way to begin the dredging work prior to October 2018., During fiscal year 2019-20 the dredging work is planned to receive an implementation budget of $250,000 with the work anticipated in summer of 2019. This action allowed the community to have enhanced traffic safety on Laurel Lane now due to permitting delays with the Laguna Lake dredging work, while also allowing the Laguna Lake project to move forward once all permits are in-hand. Council has prioritized the Laguna Lake project need and has included this work in the City’s Capital Improvement Plan (CIP)_over the last several years, in advance of other projects in the long-term CIP. It should also be noted that a substantial silt removal project will be underway in the fall of 2018 to remove deposition of silt and cobble material from the “Prefumo Arm” just downstream of Los Osos Valley Road and the Laguna Lake Golf Course. This is an important endeavor also identified in the Laguna Lake Natural Reserve Conservation Plan (2015) that will prevent this material from Council Candidate Questions/Responses August 15, 2018 Page 9 ultimately migrating into the lake itself. This project is funded at $120,000 through the San Luis Obispo County Flood Control and Water Conservation District Zone 9. Question #11 What surety has the City received to cover Grossman’s required contribution to the Prado Road interchange? Is it a bond? What guarantee does the city have that the money will be there when it’s needed? Response The San Luis Ranch Development Agreement was approved by the City Council on July 17, 2018. The second reading for the ordinance will be on the Council’s consent agenda on August 21, and if approved on second reading, the Development Agreement would go into effect 30 days later. The Development Agreement is approved by ordinance and is akin to a contract. The City has authority to enforce its requirements. The developers fair share contribution to the Prado Road interchange is paid for through a variety of mechanisms. These include impact fees paid at the time of permit issuance, property-based financing (Mello Roos District), and a Prado Road Mitigation Fee as specified in the project’s Environmental Impact Report (EIR) and the Development Agreement. Payments are triggered by specific actions, such as the pulling of permits. However, through the Development Agreement and EIR the City established an early trigger for complete payment of the Prado Road Mitigation Fee to ensure that the City has sufficient funding to construct the project. To ensure that these payments can be made in a timely fashion, the developer is required to submit a Letter of Credit with the City. In the event that the developer fails to pay any of the costs associated with the Prado Road Mitigation Fee within 30 days of the City’s written demand, the City may call the Letter of Credit due and payable. Question #12 What is the source and amount of funding required for the proposed parking structure on Nipomo St.? Is the money there to build it? Response The source of the funding for the proposed parking structure is from the Parking Fund. The Parking Fund is solely funded by parking related revenues and does not receive contributions from the General Fund. The total amount of funding necessary to build the Palm Nipomo Structure is projected to be $23.6 million. The Parking Fund plans for an initial payment in the amount of approximately $6 million to come from the working capital reserves with the remaining funds projected to be debt financed. The annual debt financing repayment will come from the Parking Fund and is built into the long-term projections of the Parking Fund. Council Candidate Questions/Responses August 15, 2018 Page 10 Question #13 Where can I find more information about the City’s status as a ‘Welcoming City’? Here is a link to the staff report regarding a resolution that sets forth the City’s current policies and practices relating to Federal immigration enforcement cooperation and declaring the City as a welcoming city to all persons, regardless of their immigration status. Here is a link to the signed Resolution.