San Luis Obispo City Council
October 4, 2022

General Fund Overview
Table C-3: City Manager Approved Carryover Requests – Reappropriation of Assigned Economic Development Funding
Per Resolution 11203 and the Council Agenda Item #19 from December 14th, 2020, $3.4 million of undesignated fiscal year 2018‐19 General Fund Balance was allocated towards economic development efforts and homeless services. One of the recommendations included local investment into short term Certificates of Deposit to generate interest for a grant program to help offset the cost of a Tenant Improvement permit. Due to the low interest rate environment that began shortly after, the City did not make these investments. Instead, it appropriated over $250,000 to directly offer credits for TI permits through the TIPP-Fast 2.0 permitting program and continues to seek opportunities to optimize the use of this assigned fund balance. At the end of FY 2021-22, $1.7 million remained in the balance. Staff recommend utilizing some of this to fund carryover requests directly related to Economic Development, thus freeing up unassigned general fund balance (see Table 6 line 180).

ID Table C-3: 2021-22 City Manager Approved Carryover Budget Amount Beginning Balance: Assigned Economic Development Funding $ 1,700,000 3 Economic Development Branding $ 30,000
4 Economic Development Resources $ 44,000
5 Scorecard to Track Economic Development $ 5,000
7 Downtown Improvements (Mission Plaza, Lighting) $ 63,000 19 TIPP Fast 2.0 (Remaining Balance) $ 81,559
22 Shopping Cart Containment Program - City Grant Funding $ 60,000 Total Carryover Requests Using Economic Development Funding $ 283,559 Remaining Balance: Assigned Economic Development Funding $ 1,416,441 Other Year-End Recommendations
Revenue Stabilization Reserve
A stabilization reserve is a mechanism to insulate the City from large fluctuations in tax revenue. It will allow City to manage a potential economic downturn without immediately utilizing the operating reserve.

The City maintained a Revenue Stabilization Reserve through the Fiscal Health Response Plan but eliminated it with the 2021-23 Financial Plan. Given the economic unknowns, staff recommend reestablishing the reserve, especially as the City grows more reliant on taxes that are the most heavily impacted by economic downturns. Given that the one-time over-realization of 2021-22 revenue was from taxes, it makes sense to assign this funding now. The Enterprise Funds maintain something similar called the “Rate Stabilization Reserve”.

Table C-4: Establishment of Revenue Stabilization Reserve Amount Appropriation of Tax Revenue Above Projections $ 2,000,000

General Fund Overview
Reappropriation of Local Revenue Measure Unassigned Fund Balance The Local Revenue Measure Fund is a sub-fund of the General Fund and is used to track revenue and expenditures related to Local Revenue Measure G-20. It helps protect and maintain services and public infrastructure identified by the community such as community safety, creek protection, addressing homelessness, keeping public areas safe and clean, retaining local businesses, youth/senior services, streets, open space/natural areas and other vital services and facilities.

As previously presented in the 2022-23 Adopted Budget , $907,000 of FY 2021-22 LRM ending fund balance (due to revenues exceeding expenditures) will be transferred to the reserve in order to maintain a committed reserve of 20% of the Capital Improvement Plan Budget . Additionally, given the record high sales tax remittals in FY 2021-22, staff recommend allocating some of the unassigned year-end balance towards budget requests that are ready to execute now. The remaining unassigned fund balance will be reviewed at the mid-year review.

ID Table C-5: Use of Local Revenue Measure (LRM) Fund Balance Amount Unaudited 2021-22 LRM Year End Unassigned Fund Balance $ 2,923,767 28 Type 3 Wildland Engine Replacement Additional Funding $ 85,000 $415,000 is budgeted for CIP ID#46 (Project #1000554) "Fire Heavy Duty Truck (Type 3 Wildland) in FY 2023. Due to inflation from the rising costs of commodities and the vehicle market, the existing budget is not sufficient to purchase the specifications needed to replace the current Type 3 fire engine, "Engine 6". An additional $85,000 is needed for a total budget of $500,000 to complete the replacement project.
30 Fire Recruit Academy to Address Paramedic Shortage $ 110,000 Funding to support a previously unplanned recruit academy needed to be held to fill existing firefighter paramedic vacancies. Presently the department has four vacancies and anticipates two additional for a total of six (6) firefighter openings by January 1st, 2023. In addition, a grievance filed by the labor group in accordance with Article 44 Staffing compels hiring minimum 4 firefighter paramedics as part of the resolution process identified by the fire labor/management and HR. 31 Accelerate Fire Pumper (Engine 4) Replacement $ 900,000 Accelerate Engine 4 Replacement to ensure a sustainable reserve engine fleet. The replacement is currently scheduled in FY 2024-25; however, the aged reserve engine has been encountering more than an expected amount of mechanical issues and may not be a reliable reserve apparatus over the next several years. The current budgeted amount for the replacement project is $780,000 for FY 2024-25. Due to current market conditions, the specifications used to build the most recent Engine replacement (Engine 3) is now expected to cost $900,000. Staff can quickly move on this project to ensure funds get utilized in FY 2022-23. Alternative would be to pursue debt financing to reduce the amount of cash needed in FY 2022-23.
51 Public Works - Contract Coordinator $ 65,846
This funding is being requested to fund a contract staff position of a Public Works Maintenance Contract Coordinator following discussion with the Homeless Steering Committee. This position would assist the department with homeless encampment cleanups and the management of maintenance contracts and CIP projects that do not require engineering support. This position would be funded through 6/30/23. (9 month contract)
$ 1,160,846
Remaining LRM Fund Unassigned Fund Balance $ 1,762,921

Administration and IT
Administration and Information Technology
A Year In Review
Amidst the difficult recruiting environment, Administration welcomed new employees filling the positions of Diversity, Equity, and Inclusion Manager, Sustainability and Natural Resources Analyst and various vital roles throughout the Department. Working to rebound from the impacts of the pandemic, economic recovery, resilience, and fiscal sustainability goals were advanced establishing new programs like the childcare startup support program which partnered with local agencies to implement. Grant funding secured this fiscal year will further sustainable transportation goals in the coming fiscal year. While initially delayed due to the vacancy, Diversity, Equity, and Inclusion goals launched into motion transitioning the Human Relations Commission to the Office of DEI and establishing a workplan with an emphasis on DEI efforts.

Accomplishments and Strategic Goal Updates

Office of the City Manager - The City’s communications program has grown from one to 2.5 FTE, which has enhanced communications and outreach activities across all City departments to keep the public and stakeholder groups informed and engaged throughout the year. This fiscal year, public communications coordination for the CSG departments was brought under the City Administration roof, with the Communications Coordinator position now reporting to the City’s Public Communications Manager. The communications team started regular Council Meeting recaps, which are posted to the City’s website and sent to email subscribers, to provide the public with a brief summary of Council’s decisions after each meeting. The communications team has also diversified how information is provided to the public, which has resulted in fewer traditional news releases than we would normally send out but has also resulted in a significant amount of media coverage. The team also started a significant project to update the City’s website design, clean up the content, and provide a more accessible website for all. The new design went live in September 2022.

During FY 2021-22 the City hired a new Assistant to the City Manager and that position has taken over the management of the City’s Legislative Advocacy Platform from the City Attorney's Office. The Legislative Platform was updated and the City has been active in taking stances on State legislation of interest to our community.

The Office of the City Manager also led the implementation of a new Community Academy program leading over 20 participants through six weeks of educational session and tours to increase overall civic literacy and awareness of opportunities for further involvement in the City.

Office of Economic Development and Tourism - In addition to the traditional economic development activities, the department was active in the recovery from the pandemic. This included the downtown activations like Light Up Downtown and various activations in Mission Plaza. Local businesses were also supported directly through efforts like the “Buy Local Bonus” and the cooperation with the TBID on the “Mid-Weekend” promotion. Systemic long-term issues that impact the economy were also addressed including support for childcare start-ups and the initial work on Diversity Equity and Inclusion. Due to the delayed return to normalcy and some staffing vacancies, several initiatives were slightly postponed including the update of the Economic Development Strategic Plan and permit processing improvements.

Office of Sustainability and Natural Resources - This past year has seen significant progress in each of the topical areas outlined in the Major City Goal, Climate Action, Open Space Preservation, and Sustainable Transportation. For Strategy

4.1 - “Provide capacity to achieve Council’s adopted goals” staff welcomed Lucia Pohlman, Sustainability & Natural Resources Analyst, in November 2021 and also hired two interns in order to build additional capacity. Key relationships across City departments, as well as with non-profits and community partners, also remain robust. For Strategy 4.2 - “Continue to update and implement the Climate Action Plan for carbon neutrality” the Office continued its model of planning and doing; staff prepared the all-electric new buildings ordinances that were adopted by City

Administration and IT
Council, further developed the Better Building SLO program for energy efficient retrofits in existing buildings, and also conducted all of the technical stakeholder workshops, culminating in the recent Climate Party at Sinsheimer Park, in preparation for bringing the Climate Action Plan 2023-2027 work plan to City Council in January 2023. An unplanned addition to this part of the work plan was the recent Request for Proposals for community-based electric vehicle (EV) fast-charging infrastructure at City-owned parking locations due to the rapid uptake of EVs and surging gas prices. For Strategy 4.3 - “Preserve and enhance open space and the urban forest” primary activity was centered around advancing three separate conservation easement projects (Miossi La Cuesta Ranch, Tank Farm Wetlands, and Froom Ranch Specific Plan) as well as opening the City’s recent Miossi Open Space property to the public along new trails including a connection to Poly Canyon in partnership with Cal Poly SLO. A comprehensive program analysis for the City’s Urban Forestry Division was also completed, along significant work towards the preparation of the Urban Forest Master Plan; a study session to discuss findings and preliminary recommendations with City Council is scheduled in January 2023. Strategy 4.4 - “Alternative and sustainable transportation” was led by the City Public Works Department and saw the completion and opening of the Railroad Safety Trail bridge overcrossing, significant pedestrian and bicycle safety upgrades with area pavement plans throughout the City, and plans and specifications for the forthcoming North Chorro Neighborhood Greenway. The City is also rapidly transitioning its fleet to EVs, including two transit buses anticipated by the end of the summer. For Strategy 4.5 - “Planning and implementation for resilience” - staff have been active with the Resilient SLO planning and community engagement process in partnership with the Community Development Department that will culminate with City Council’s consideration of the Climate Adaptation and Safety Element (CASE) in October 2022. Staff remained diligent with flood control and open space fuel reduction efforts, while also expanding our relationships with the Zone 9 Water Conservation and Flood Control District and with the SLO County FireSafe Council.

Community Promotion - This fiscal year the Community Promotions program, led by the Promotional Coordinating Committee (PCC) advanced several projects and programs related to the economic recovery and quality of life for the community and visitors. To name a few, the PCC awarded 22 grants to arts, cultural or recreation based non-profit organizations in the community. They developed and funded the second-year programming of the Think Differently educational series, this year focusing on sustainability and DEI within events that garnered participation from over 350 community members. They led the Support Local work program aimed at promoting local businesses in SLO, which include the DEI focused Business Insider Series on social media, robust media campaign promoting shopping local, public relations focus, and a seasonal promotion called Buy Local Bonus during the holidays. Lastly this year, a record-breaking result as over 100,000 people were served through the financial partnership with the SLO Chamber for the operation of the Visitor Center.

Office of the City Clerk - The Office of the City Clerk completed the implementation of new agenda management system creating significant efficiencies and time savings for staff. The agenda packet process for City Council along with seven of the Advisory Bodies are all completed using the system. In addition, Clerk’s Office staff led the effort to have 100% completion of the annual Conflict of Interest filing by mid-April.

Office of Diversity, Equity and Inclusion - The Office of DEI was successfully established with the hiring of the City’s inaugural DEI manager and DEI Management Fellow. In the first six months of staffing, the office developed and executed a Diversity speaker series for the public, incorporated a new DEI section in the City’s Legislative Platform, successfully transitioned the Human Relations Commission (HRC) from the Community Development Department to the Administration and IT Department and implemented a workplan for the commissioners with a particular emphasis on DEI efforts within the City. Additionally, staff executed a MOU with Cal Poly which outlines efforts to align and collaborate on DEI initiatives in the City and across campus. The Office of DEI also worked internally with various departments to provide consulting and aid in embedding DEI into hiring, recruitment, promotional and onboarding practices along with several other City projects and initiatives. This included the ongoing development and management of the internal DEI committee. Currently the Office of DEI is also managing the HRC GIA grant program for FY2022-23 and the launch of the FY2022-23 DEI High Impact grant program for local organizations which has a total of $300,000 in available funding.

Administration and IT
Information Technology Network Services – Network Services brought the radio backend replacement project across the finish line, upgrading all six radio sites with a simplified system leading to reduced maintenance for the City and consolidated vendor contracts. Progress was made on the KVEC Hill Radio Tower and Shelter with 100% construction plans completed, ready to break ground in the coming fiscal year. Control Systems Administrators remain heavily involved with the two major Utilities construction projects in process: the Water Resource Recovery Facility upgrade and the Water Treatment Plant upgrade. IT support services handled 3,931 support tickets over the year covering the entire range of support activities including hardware and software installation, upgrades, and troubleshooting.

Information Technology Information Services – Information Services completed an integration with the existing asset management platform (CityWorks) bringing uniformity to asset management programs and setting the template for future integrations. Information Services conducted three successful recruitments filling resource needs for the City’s Enterprise Systems and Geographic Information Systems.

Challenges
The difficult recruiting environment presented challenges to the Department delaying some initiatives planned for the fiscal year. While many of the positions were filled through extensive recruitments, an RFP was released to secure Technology Project Management Services due to the repeated unsuccessful recruitment attempts. Throughout the year constraints in the supply chain were experienced triggering the need to extend hardware warranties to secure support in the interim. Information Technology staff adapted to the struggles by placing orders in advance of project timelines to accommodate the extended delivery times and keep technology projects on schedule.

Performance Measures
Table 7: Administration and Information Technology Performance Measures Objective Measure 2021-22
Target
2021-22
Actual
Provides City-wide
communications to the
community.

Open City Hall Participant Satisfaction Rating 90% 94%
# of City News Releases 150 148
Provides reliable IT resources to
the organization and community.

Maintain City Network Reliability Uptime Status 99.9% 99.95% Data backed-up in Gigabytes 173,000 185,448
Number of GIS layers maintained 905 915
Economic Stability
Contacts with businesses regarding starting, expanding, and/or staying in the City 75 85
One-time funds used for direct aid to local businesses
and non-profits4
$500,000 $320,000
Supports our commitment to
sustainability and provides open
space resources to the
community.
# of Green Team5 Meetings 10 10
# of Open Space Conservation Plans that will guide the
long-term protection and stewardship of natural
resource values while guiding appropriate public use
1 0
6 Strengthens the City’s
commitment to advancing
Diversity, Equity and Inclusion
# of City-wide DEI Trainings Offered 10 21
Funds for High-Impact DEI Grants Awarded $150,000 $07

4 The spending has been postponed due to the delayed return to normalcy from the pandemic, but is requested to carryover and be completed in the 2022-23 fiscal year.
2The Green Team is a cross-departmental collaborative body that helps guide the approach of the CAP Pillar ‘Lead by Example: Carbon Neutral City Operations’. As noted in the Major City Goal Work Program, in 2021-23, the Green Team will focus on implementing the carbon neutral municipal operations plan, completing the Resilient SLO project, and facilitating all-staff sustainability training. 6 Two Conservation Plans are anticipated to be completed in 2022-23 (Righetti Hill and South Hills). 7 FY 2022-23 DEI high impact grants will have an extended grant amount of $300,000 to account for the missed grant cycle in FY 2021-22.

Administration and IT
Variance Analysis
Table 8: Administration and Information Technology Variance Analysis

Salaries and Benefits – The savings experienced in staffing came from vacant positions during the windows of recruitment. The difficult recruiting environment prolonged recruitments causing savings to accumulate; some of the savings were partially offset to fund supplemental positions to support vacancies and for recruitment resources.

Contract Services – The 19% savings in contract services correlate with the aforementioned vacancies and delay with filling positions. The DEI Manager position was onboarded later than projected delaying initiatives set forward for fiscal year 2021-22. Several tasks supporting the Diversity, Equity and Inclusion Major City Goal planned for fiscal year 2021-22 will advance in fiscal year 2022-23 including developing a strategic plan for the Office of DEI, supporting a feasibility study for a community based multicultural center, updates to the public engagement and noticing manual, and DEI high impact grants. Additional savings are associated with the Economic Development program, with efforts currently in progress, but not yet expended. The Arts and Cultural recovery grant funding is underway with grants to be awarded in the first quarter of fiscal year 2022-23 as well as funding for other activities related to economic recovery, resiliency and fiscal sustainability.

Other Operating Expenses – A majority of the 6% savings realized in other operating expenses are related to program expenditures that were delayed or implemented differently than planned for the Office of DEI and the limited use of training funds in certain programs due to the pandemic.

Utilities – Utilities inclusive of electric service and communication services ended the year slightly over budget at 101% consumption. Overages are attributed to the rate increase by PG&E on electricity which powers the South Hills transmitter site critical to the City’s network communications. The growth in the City’s workforce also pushed communication services over budget acquiring additional phonelines and workgroup licenses to resource staff appropriately.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing $ 3,471,388 $ 4,285,379 $ 4,004,586 $ 280,793 7% $ 4,757,346 Contract Services $ 1,962,650 $ 3,381,041 $ 2,724,922 $ 656,119 19% $ 2,910,732 Other Operating Expenses $ 1,300,938 $ 1,766,316 $ 1,663,496 $ 102,820 6% $ 1,625,829 Utilities $ 325,368 $ 326,046 $ 327,804 $ (1,758) -1% $ 326,309 TOTAL $ 7,060,343 $ 9,758,782 $ 8,720,808 $ 1,037,974 11% $ 9,620,216 Administration/IT FY 2021-22

City Attorney
City Attorney
A Year In Review
This first year of the 2021-23 Financial Plan was designed to keep the department staffed in a manner sufficient to maintain the necessary level of service delivery while launching, participating in, and concluding a department organizational assessment. Course corrections were made throughout the year including contracting out code enforcement legal support to a local law firm via an informal request for proposals and postponing the hiring of a deputy City Attorney until the position was made permanent. By year end, the organizational assessment was completed by the consultant, staff had recruited and hired two new regular employees, and the department was prepared to transition to a new office space large enough to comfortably house its increased work force.

Accomplishments and Strategic Goal Updates
Staff attorneys have been able to provide legal advice and support to Council, Planning Commission, and staff throughout the organization to help advance, or bring to completion, dozens of important projects, including:
 The implementation of SB 1383’s solid waste mandates and reorganization of the Integrated Waste Management Authority, which required the drafting and review of the joint powers agreements, ordinances, franchise agreement amendments, and rate setting documents.  Negotiation with the County regarding satisfaction of RTA’s conditions of approval related to future construction of the Elks Lane realignment.
 Reached a significant milestone in the Citywide Contract Templates project by drafting and updating seven new contract templates to be used Citywide, developing staff training materials, and creating a Contracts SharePoint site where all City staff can access approved templates and training materials.  Drafted and negotiated the agreement for the City’s nearly $4 million grant to the SLO Reparatory Theatre to assist in the construction of SLO Rep’s new facility.  Assisted Planning staff with completing the City’s 6th Cycle Housing Element.  Amendments to the City’s cannabis regulations.
 Assisted the Homelessness Response Manager in drafting the City’s Compassionate Assistance, Mitigation and Prevention Standards.
 Assisted Public Works and Community Development staff in drafting the permanent Parklet ordinance.  Assisted Planning staff with drafting the Inclusionary Housing Ordinance update.  Managed and defended the City and its employees in several significant litigation matters, including federal civil rights actions, challenges to cannabis permitting actions, a California Voting Rights Act demand, development permitting and CEQA challenges, as well as more routine trip and fall actions.

Challenges
The department organizational assessment, which began promptly in July 2021, unfortunately dragged on months past its estimated completion date and required significant oversight by the Legal Analyst, Assistant City Attorney and City Attorney. This meant the attention of existing staff was pulled away from other projects for longer than expected, and the hiring of new staff and implementation of recommended process changes was significantly delayed. Staff managed this issue by reprioritizing projects and dropping from the fiscal year those projects which could be pushed without detrimental effect on City goals, objectives, and service delivery.

Litigation and claims intensified during the year, including challenges to housing development approvals, cannabis regulatory actions, and police civil rights actions. Despite overwhelming success in defending the City against a variety of meritless cases, the management and support for the City’s defense demanded an unfortunately disproportionate level of staff and attorney time, and public financial resources. Due to the nature of litigation, complete avoidance is improbable and the City’s efforts to mitigate issues via property maintenance, staff training, risk analysis and negotiation with complaining parties never fully eliminate the risks. As with the organization assessment delays, staff

City Attorney
assessed the increased attention demanded this year by litigation and either found qualified outside counsel to represent the City or reprioritized workload to allow staff sufficient time to focus on the litigation matters.

Performance Measures
Table 9: City Attorney Performance Measures
Strategic Goals Measure
2021-22 Target/
Expected
Volume
2021-22
Actual
Timely and Responsive legal
advice and support
Strategic Goal: Department
Objectives
Administrative Citation Appeals received by the City 150 122 Appeals closed without need of a hearing8 25 39
City assisted corrections to defective appeals to
allow access to hearing 15 18
City facilitated hearings on the record without need
for personal appearance by Appellant 50 29
# of hearing days scheduled 7 14
Legal Training & Compliance
Strategic Goal: Department
Objectives
# of Council, Staff, and Advisory Body legal
trainings, legal updates, and compliance advisory
sessions
12 6
9 Municipal Litigation &
Prosecution Management
Strategic Goal: Department
Objectives
Percentage of Claims Resulting in Litigation <5% 14%10
Liability Claims Against the City Reviewed/Managed 70 67 Variance Analysis

Table 10: City Attorney Variance Analysis

Salaries and Benefits – Over the course of the fiscal year, City policy and department hiring decisions were made that varied from the original assumptions of the Financial Plan, but combined they had a result of leaving an amount in excess of the 3% assumed salary savings. Among other things, a COLA in July 2021 and an additional 40 hours of

8 Closed in some way that did not include a decision being issued (e.g. withdrawn by appellant, untimely filed, voided by the issuing department)
9 The ongoing time and attention demanded by the organizational assessment and the delay in bringing that effort to a close (so its staffing and other recommendations could be implemented) has reduced the amount of time available for planning and presenting these legal training sessions.
10 This high percentage is from nine cases. Eight of those are: a person injured during after-hours, reckless use of a City park; an unfair labor practices charge; a writ petition to force the City to permit a disqualified cannabis business applicant; damage done to a gas main during a contractor’s work for the City; a writ to force the issuance of a permit for a yard structure built in violation of the building code; injuries due to a trip and fall on private property near a City sidewalk; a bicyclist fatality; and injuries due to a limb falling from a privately owned tree. The eighth lawsuit was known to not involve the City but was filed to include it anyway out of the plaintiff’s abundance of caution. The City was eventually dismissed from the case following production of discovery responses that supported its non-involvement.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing $ 770,049 $ 888,039 $ 849,608 $ 38,431 4% $ 1,045,075 Contract Services $ 29,185 $ 116,299 $ 116,212 $ 87 0% $ 63,395 Other Operating Expenses $ 97,965 $ 390,794 $ 390,708 $ 86 0% $ 24,465 TOTAL $ 897,198 $ 1,395,133 $ 1,356,529 $ 38,604 3% $ 1,132,935 City Attorney FY 2021-22

City Attorney
vacation sellback related to COVID in December drove costs higher, but a decision to hold off hiring a deputy City Attorney, until a regular, permanent position was created, generated savings. Near the end of the fiscal year, City Manager approval was given to utilize the savings toward the department office space transition and several contracts for outside counsel.

Contract Services – In addition to the funds transferred near year end to use towards electrical, furniture, and other work/purchases needed for the department to transition into its new office space, the budget was used towards code enforcement and other contract outside counsel needs identified by staff.

Other Operating Expenses – Due to the department office space transition, more than predicted was spent on office supplies but this was a one-time occurrence and was offset by savings in other budget lines. Overall, Contract Services an Other Operating Expenditure Budgets were significantly higher in FY 2021-22 than in FY 2022-23 because not all approved staff were on board and budget was moved to these accounts in order to pay for contractual legal services in order to keep up with workload.

Finance Department
Finance Department
The Year In Review
The Finance department added two positions with the 2021-23 Financial Plan to help right-size the fiscal operations with the City’s growth and the workload associated with protecting the City's financial stability. The new positions have allowed the department to implement significant efficiencies and workload distribution in several divisions.

Consistent with current labor trends across the nation, the department experienced its share of turnover and prolonged vacancies. While posing some difficulties, the employee transitions nurtured additional cross-division training and strengthened internal procedures manuals – both of which will make the team more resilient in the long run.

With the economic reopening over the last year, the Revenue and Budget divisions closely monitored major economic trends and considered implications to the City’s long-term forecast. In an unusual circumstance, staff brought forward a revised mid-year report that exponentially increased the forecast presented in the original Financial Plan and allowed an opportunity for immediate investment into the community and addressing of emergent needs. The department has also been at the forefront of the State and Local Fiscal Recovery funding through the American Rescue Plan Act and applicable use in accordance with the U.S. Treasury’s Final Rule.

Accomplishments and Strategic Goal Updates
One of the great accomplishments for the department was the send-off of the planned $12.4 million additional down payment to CalPERS in April 2022. This payment caught up three years of planned additional contributions to keep track with the Fiscal Health Response Plan deliverables. The prudent fiscal approach during the pandemic years allowed for this payment to be realized. It will help achieve the City Council goal to reduce the unfunded pension liability and increase financial stability. As an internal service department, many of team’s accomplishments are the incremental improvements made on a daily basis to maximize revenue collection, ensure adherence to appropriate procurement and expenditure administration, and organization-wide support services.  Enhanced business license and tax management program and compliance enforcement  Realized efficiencies through the new Utility Users’ tax collection program  Improvements to managing contractual third-party risk transfer and certificate of insurance tracking  Important modifications to the Capital Projects module  Adoption of an update to the City’s Purchasing Policy including considerations for a Local Preference and Sustainability in procurement
 Improved audit preparedness and timely transaction for year-end financial report deliverables.  Revised and automated procedures for managing infrastructure related agreements  Re-launch of the Finance website for easy access to financial information including voluntary disclosures.

Challenges
The fact of the matter is the Finance Department is still adapting to the Oracle ERP system and all of its customizable configurations. Much like a relationship, staff are learning new things about Oracle every day and finding new ways to do things that best fit the organizational needs. While at times challenging today, staff are laying a foundation for an optimized system in the future. The accounting division also implemented additional quality control measures that ensure accurate and timely financial management until the needed reconfigurations are done. With the help of IT and Oracle Consulting Services (OCS), the division has a planned path forward to achieve system optimization.

An upcoming challenge will be the recruitment of a new Finance Director as the current department head announced her retirement for the end of December. In coordination with HR, the Department will be launching a national recruitment in parallel with the Fire Chief recruitment. In addition, the City’s only Payroll Specialist took a promotional

Finance Department
position as the Fire Department analyst and filling the resulting vacancy will be critical. However, staff also took this as an opportunity to advance some of its strategic evaluation work for the optimization of the Finance operations.

Additionally, continued economic uncertainty will require constant vigilance, analysis, and modeling of revenue and expenditure trends to ensure the City’s fiscal sustainability and successful delivery of programs and services.

Performance Measures
Table 11: Finance Performance Measures
Objective Measure 2021-22
Target
2021-22
Actual
Enables & enhances transparency,
accountability & integrity.

Strategic Goal: Fiscal Policies
# of calendar days following year-end until ACFR is issued 170 180 # of audits/reviews conducted/ # of additional agreed
upon procedure audits performed 2/2 2/2
Protects & prudently manages its
financial resources.

Strategic Goal: Fiscal Policies
# of funds within fund balance requirements/ total funds with fund balance requirements 8/8 8/8
Net direct debt per capita (General Fund) based on
annual debt payment $44 $43
Twelve-month total rate of return/City portfolio11 3% -3.66%

Variance Analysis

Table 12: Finance Variance Analysis

Staffing – The department ended the year with about 2% savings which is slightly below the City’s assumed salary savings rate (3%) due to the normal ebb and flow from vacancies. The two longest term vacancies were for the Purchasing Specialist and the AP Accounting Assistant positions. The department transferred some of these savings into the Contract Services budget to hire temporary staff through a staffing agency; this allowed the department to continue operating at full capacity.

Contract Services – The majority of the savings in the Contract Services category were due to the budgeted cannabis audits that were not finished by the consultant in FY 2021-22. The audits are underway and going slower than expected due to the newness of the process and the Cannabis Manager vacancy. Ultimately, the audits will be paid for using FY 2022-23 Budget and with a new Cannabis Manager on board, staff will continue to work with its cannabis

11 Based on the June 2022 Investment Report. While ultimately the City aims for a long-term rate of return of 3%, market volatility can cause swings from year to year. This was especially true during the pandemic years due to the Fed’s monetary policy to assist economic activity and recovery. The 0-5 Treasury Index measured a twelve-month rate of return of -3.68%; therefore, the City’s portfolio is performing slightly better than the index. As a government entity, the City’s primary investment objective is to achieve a reasonable rate of return on public funds rather than the maximum generation of income, which could expose the City to unacceptable levels of risk. Unfortunately, the City was not immune to the large market value adjustments that were triggered by the Fed’s interest rate increases.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing $ 1,250,525 $ 1,450,212 $ 1,420,787 $ 29,425 2% $ 1,584,517 Contract Services $ 264,923 $ 494,877 $ 428,577 $ 66,300 13% $ 371,970 Other Operating Expenses $ 17,938 $ 54,018 $ 29,318 $ 24,701 46% $ 53,900 TOTAL $ 1,533,386 $ 1,999,107 $ 1,878,681 $ 120,426 6% $ 2,010,387 Finance FY 2021-22

Finance Department
auditor (HdL) to speed up the process for timely completion in the future. There were also savings in various small contracts and staff were able to bring some services like the annual LRM reports in house achieving efficiencies and monetary savings.

Other Operating Expenses – Consistent with many other departments, Finance had savings in its education and training budget. However, staff did take advantage of many training opportunities and conferences, all of them offered online without related travel cost. There were also reduced printing and mailing costs due to the continued effort to move financial documents online and staff encouraging customers to use its online business license renewal portal as opposed to the paper renewals.

Non-Departmental, Support Services
The Non-Departmental and Support Services cost centers are managed by the Finance Department but are used for expenditures with citywide benefits.

Table 13: Non Departmental, Support Services
Staffing Contingencies – These budget lines are only activated when a department is faced with salary cost increases due to bargaining results, minimum wage increases, or unexpected vacation buyouts that cannot be absorbed within the department’s appropriated budget. Generally, departments are able to withstand these costs increases due to savings from vacancies throughout the year and FY 2021-22 was not different. The 2021-22 contingency budget shown above includes Council approved parameter amounts for all bargaining units that had not been negotiated at the time the budget was created (April 2021). The remaining balance will fall to fund balance and be considered part of the General Fund’s overall salary savings amount.

Unemployment Insurance – Unemployment insurance costs have dramatically decreased since the onset of the pandemic. The average quarterly cost dropped from over $25,000 during the height of the pandemic to less than $5,000 based on the latest payment. The City reduced the budget significantly for FY 2022-23 based on this normalized trend.

Other Operating Expenditures – This line includes budget for expenditures like postage, membership costs for the League of California Cities, print and reproduction, and miscellaneous materials and supplies. The majority of the savings were due to reduced need for printing and postage as the City continues to transition its materials online.

Moving forward, these savings will be partially offset by the increase in postage and material costs.

Covid-19 Expenditures – The COVID-19 account was created as a centralized way to track and record unbudgeted costs associated with the COVID-19 health emergency (PPE, enhanced cleaning, porta potties, etc.). These costs have significantly decreased over the last 12 months. This account was deactivated for the 2022-23 budget and departments have been asked to “operationalize” any ongoing cost associated with COVID-19 as most efforts have now become standard operating procedure.

Bank/Merchant Fees - The negative balance in this category was caused by bank fees that were historically not budgeted for. Generally, these charges are covered by the interest earnings on the accounts. In the recent low interest rate environment, applicable rates-of-return have not been sufficient to cover the cost of doing business. It FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing Contingencies $ - $ 1,336,815 $ - $ 1,336,815 100% $ 2,429,000 Unemployment Insurance $ 101,575 $ 120,000 $ 20,000 $ 100,000 83% $ 40,000 Other Operating Expenditures $ 144,214 $ 162,460 $ 126,584 $ 35,876 22% $ 363,928 Covid-19 Expenditures $ 1,091,661 $ 155 $ 269,393 $ (269,237) -173478% $ - Bank/Merchant Fees $ 190,650 $ 70,000 $ 226,591 $ (156,591) -224% $ 80,000 Total Non-Dept/Support Services $ 1,528,100 $ 1,689,430 $ 642,568 $ 1,046,863 62% $ 2,912,928 Category FY 2021-22

Finance Department
is important to note that this line includes bank fees for all funds, which will be distributed to the respective Enterprise Funds with the annual Cost Allocation Plan.

Human Resources
Human Resources Department
A Year In Review
The year ended with many accomplishments along with some unexpected challenges, particularly an unprecedented demand for recruitment and onboarding of staff; the City added 65 FTEs as part of the 2021-23 Financial Plan and the Great Resignation/Reshuffle which increased staff turnover to 15%, previously trending at an average of 12% in the last five years.

The Department completed a Benchmark Compensation Study that was presented in February 2022 as part of its commitment to the public and labor partners, which found that many of the jobs at the City are not receiving competitive salaries, compared to similar communities. In fact, most of the positions that were evaluated were below the market median salary compared to similar communities (i.e. size, services, complexity, etc.) locally and across California. The purpose of the study was to provide objectively verifiable data to help guide contract negotiations with the City’s largest employee group, the San Luis Obispo City Employees’ Association (SLOCEA), and conversations with Unrepresented Management and Confidential groups. Council approved a three-year successor resolution for the unrepresented groups in April 2022 which incorporates adjustments based on the study, and the City is still actively in negotiations with SLOCEA, hoping to reach agreement soon as their contract expired on June 30, 2022.

Even with the results from the Compensation Study, the Human Resources Department successfully recruited and onboarded 37% of the City’s workforce, between new hires and promotions, to enable all departments to continue to provide high quality services to the community. It developed a Supervisor’s toolkit that provides a wealth of information about onboarding and guidance to set up the supervisors and new employees for success. While experiencing vacancies and turnover of its own, the vacancies within HR were filled by individuals at lower wages and the vacancies themselves provided savings which supported temporary consultant services to supplement existing staff to meet new demands.

As the COVID-19 pandemic continued to surge and the CDC and County Health guidance changed, staff communicated with employees and their supervisors to promote use of best practices and provided resources for their health and safety in compliance with Cal/OSHA’s Emergency Temporary Standards and public health guidance.

This included purchasing an ample supply of rapid tests for use at work or at home to reduce the risk of spreading COVID-19 in the workplace. Staff also relied on the best available technology to hold online meetings, trainings, and interviews that previously were in-person events.

The Human Resources and Utilities Departments collaborated on a reorganization of the Risk Management and Safety roles to promote an integrated safety program and foster a culture of safety with targeted safety compliance within the Utilities Department. A new Safety Officer and Risk Manager were recently hired and will be working together in the Human Resources Department. Following the May 2021 officer fatality within the Police Department, the City started providing preventative mental health services to City employees and will continue to partner with the Police and Fire Departments to continue this program. In addition to bolstering employee wellbeing, this program appears to be preventing workers’ compensation claims.

Human Resources staff, in partnership with staff in Information Technology and Finance, continued to enhance the City’s Human Capital Management System. Over the past year, staff implemented the City’s first employee selfservice Open Enrollment, and progression grade ladders, which reduced manual data entry for these areas by 50%, thus reducing the chance for human error while increasing efficiency.

At the end of the fiscal year, the Department maximized the remainder of its budget to locate to a larger facility as part of an overarching space plan for departmental offices. This move was not anticipated when the previous budget was established and Facilities Maintenance, Information Technology, and Administration staff all contributed to this effort.

Human Resources
Accomplishments and Strategic Goal Updates
The Department met its goals set in the FY21-23 Financial plan by:

1. Continuing to provide high-quality integrated human resources with the resources available, both in terms of budget and in staffing.

2. Providing tools and opportunities to employees to reach their full potential through leadership training and first opportunities for internal promotions. The Supervisor’s Toolkit provided lots of excellent information about opportunities for education and information for success in the workplace.

3. Promoting a high-performing and self-sufficient employee organization that is connected to the community through shared organizational values and goals by providing educational opportunities as required for their respective positions and for general awareness in the workplace.

Challenges
The key challenges that Department faced were due to unexpected events including:
o Increased demand for recruitments and onboarding. Costs associated with this increase included physical exams, fingerprinting services, advertising, and other onboarding costs so cutbacks in other areas offset these expenses to ensure priority needs were met.
o New COVID-19 strains, guidance, and legal requirements for protecting the health and safety of staff and loved ones; while Ventures and Contingencies paid for the supply of rapid tests, the HR budget absorbed some costs to implement protocols such as producing signage for buildings, and the cost of publications and webinars to inform the process, for example.
o Higher than average liability claims and associated expenses. Since the undesignated insurance fund balance was sufficient to pay for these expenses, an allocation was made from the fund to the budget to cover the unbudgeted expenses.
o Generally making sure available funds were targeted for the most important strategic goals for benefit of the departments and City as a whole. The Department managed these unexpected challenges and changes by positioning staff in roles which were best suited to their talents to address immediate and long-term needs of City employees. Members of the Department were resourceful and resilient as they adapted to these changing conditions, and all contributed to achieving the major city goals for the Department throughout this time.

Performance Measures
Objective Measure 2021-22
Target
2021-22
Actual
Integrated HR
Services
Average days between injury and workers’ compensation claim filed. 4 5 Achieved lower severity of workers’ comp claims than the risk pool Yes Yes Liability claims payments under the Self-Insured Retention amount Yes No12 Employee
Development &
Growth
Percentage of on-time employee performance evaluations 95% 86% Percentage of internal promotions 40% 49%
Training sessions coordinated 35 56
Engaged and Aware
Culture
Number of policies communicated 5 44
Informational sessions coordinated 80 35713

12 As detailed in the Insurance Fund summary, the cost of claims this year exceeded the appropriated budget for payments and an allocation from the undesignated insurance fund was authorized to cover these costs; however, not all of this allocation was needed, and the unexpended amount will be returned to fund balance. 13 Human Resources staff have communicated more policies and held significantly more informational sessions this year, primarily due to the changing conditions associated with the pandemic as well as increased recruitment.

Human Resources
Variance Analysis

Table 15: Human Resources Variance Analysis
Salaries and Benefits –The salaries and benefits of full-time staff were marginally less than budgeted, and although vacancies occurred throughout the year, these salary savings were used to hire consultant services and temporary staffing to meet the high demand for services during the course of the year.

Contract Services – A large portion of the Department’s budget consists of contract services for a variety of purposes.

At the end of the year, there are no significant variances to report.

Other Operating Expenses – There were additional unanticipated furnishings and supplies needed to set up the new office space to function properly which resulted in additional expenditures. These expenses were one-time in nature and will not occur on an ongoing basis.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing $ 884,783 $ 1,025,273 $ 1,009,882 $ 15,391 2% $ 1,105,024 Contract Services $ 279,659 $ 542,975 $ 541,922 $ 1,053 0% $ 323,794 Other Operating Expenses $ 51,357 $ 52,563 $ 57,112 $ (4,550) -9% $ 51,300 TOTAL $ 1,215,799 $ 1,620,810 $ 1,608,917 $ 11,894 1% $ 1,480,118 Human Resources FY 2021-22

Community Services Group – Administration
Community Services Group (CSG)
Community Development • Parks & Rec • Public Works • Utilities The Community Services Group is comprised of the City’s four public-facing, service departments. The administrative costs listed below are not specific to a department but benefit each department.

A Year-In Review and Accomplishments
The Community Services Group (CSG) focused on the production of core services, advancement of key Major City Goals and objectives, identification of new departmental efficiencies, communication with the public, and City staffing transitions. The CSG onboarded and hired all four department analysts, a Business Manager, and an Administrative Assistant in FY 2021-22 As the CSG Analyst Team has begun to form, so have opportunities for efficiency, communication, and collaboration among the four departments. The team has been working primarily on budgetary support as Fiscal Officers for their respective departments, but also regularly partner to support department needs. This has included: the start of a budget and Oracle 101 guide for CSG managers and supervisors to reference and track their budgets; a streamlined City Manager Report routing system; an Administrative Support Training for onboarding new admin professionals; policy work such as an Abandoned Shopping Cart Ordinance requiring business compliance with State laws; and analysis on processes and procedures on tracking specialized budgets including the four Enterprise Funds, Impact Fees, and Development Services Designation.

Additionally, a year-long effort began on the feasibility of implementing a centralized resident engagement platform that would replace the "Report an Issue" page on the City website in order to:
organize and streamline public requests and inquiries to reduce the current manual process; respond to the community more effectively and efficiently; enhance the way citizen issues are identified, responded to and tracked (both internally and externally); and generate reports and data on requests, historical responses and response timeliness. A vendor was selected and implementation of the system citywide will occur in FY 2022-23.

With all of the accomplishments of the CSG in FY 2021-22, the core focus of CSG remains to seam Community Development, Parks and Recreation, Public Works, and Utilities together through policy, fiscal and collaborative support efforts to provide quality service to the community.

Finally, CSG Admin has also managed and guided the completion of a CIP Process Improvement study and the hiring of a CIP Process Improvement Manager to implement the 52 recommendations in the study.

Significant efforts have focused initially on right sizing the staffing to produce the City’s CIP Program (which tripled with Measure G-20 adoption), changing some jobs to better reflect the services needed, and creating new policy so that efficiencies and collaboration cross departmentally can occur.

Community Services Group – Administration
Variance Analysis

Table 16: CSG Variance Analysis

Salaries and Benefits – The Community Services Group experienced changes in vacancies and hiring in FY 2021-22. The CSG Part-Time Administrative Assistant and the Communications Coordinator were converted from contract to permanent positions. Ultimately, the Communications Coordinator became vacant in February of 2022, and was moved under the Administration Department in the hopes to centralize City communications and oversight with the Communications Manager position. Additionally, the CSG Business Services Manager was reclassified to a Business Services and Administrative Manager, resulting in the overage.

Contract Services – Contract Services was significantly under budget due to projects continuing into FY 2022-23. Specific to the Community Workforce Agreement Study efforts, approximately $20,000 was spent, and the remaining purchase order balance amounts were rolled and $42,607 in unencumbered funds are requested to continue to FY 2022-23 to continue the ongoing project efforts and in anticipation of further consultant services possibly needed since no Work Force Agreements are in place as of yet.

During Mid-Year, $40,000 budgeted for the Centralized Resident Engagement Platform, the cost for Year 1 was under budget, at approximately $29,500. Lastly, Economic Development provided funding for a $60,000 incentive grant program related to the Shopping Cart Ordinance for the first 12 businesses to submit complete Abandoned Shopping Cart Prevention & Retrieval Plans, to be used toward physical or electronic containment systems, which is also being requested to carry over into FY 22-23.

Other Operating Expenditures – Expenses for the category were not significantly under budget, but remaining funds are mainly a result of the ongoing impacts of COVID and staffing shortages and having fewer expenses in Education & Training and Trips & Meetings than budgeted.

Community Development Department
A Year-In Review
During the first year of the 2021-23 Financial Plan, the Community Development Department (CDD) made substantial progress in implementing its work program and scaling up under a new organizational structure to support the economic success of the community. Housing production continues to move forward with 614 units constructed during calendar year 2021. While the overall economy has experienced some headwinds, housing production and other permit activity remain strong, although total revenue was approximately $1.3 million less than the high experienced during Fiscal Year 2020 As a result, the City underrealized revenue relative to its projections in FY 2022 and is projecting lower total revenue for Fiscal Year 2023.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing $ 300,686 $ 457,331 $ 470,056 $ (12,725) -3% $ 440,712 Contract Services $ 16,969 $ 228,948 $ 107,916 $ 121,032 53% $ 42,833 Other Operating Expenses $ 3,554 $ 12,413 $ 7,764 $ 4,648 37% $ 13,021 TOTAL $ 321,209 $ 698,691 $ 585,736 $ 112,955 16% $ 496,566 CSG Administration FY 2021-22

Community Services Group – CDD
On the policy front, CDD accomplished three critical Housing Element changes during the past year. These include an update to the Zoning Regulations that accomplished the following.

1. Allowed mixed-use development by right in the City’s Services and Manufacturing areas.

2. Updated the development review process to lower the threshold for discretionary review of housing projects.

3. Implemented AB 2162 and AB 101 by streamlining supportive housing projects and low barrier navigation centers, allowing them by right in most cases.

Second, the City adopted Objective Design Standards to ensure that projects allowed by right are designed in a manner that is compatible with the project site and surroundings. Finally, the City adopted a new Inclusionary Housing Ordinance to ensure increased affordable housing production.

All of these projects were required by the State Department of Housing and Community Development (HCD) to be implemented within one year of adoption of the City’s Housing Element and this timeframe was met.

In addition to these important policy projects, CDD supported progress on the Climate Action Major City Goal with implementation of new requirements for all-electric buildings, onboarded and supported the success of a new Homelessness Response Manager, and began to oversee administration of the City’s cannabis business permitting program.

Accomplishments and Strategic Goal Updates

1) Lead the implementation of the Housing and Homelessness Major City Goal a) Three major Housing Element programs were implemented that are consistent with HCD requirements.

Community Services Group – CDD
b) Housing production continues to be consistent with the City’s one percent growth objectives.
c) Homelessness Response has included onboarding of a Homelessness Response Manager who has supported significant work program tasks such as implementation of Community Action Team expansion and the creation of the Mobile Crisis Unit. d) The Homelessness Response Manager served on the County-wide steering committee for the new 5-Year Strategic Plan. A study session was conducted with the City Council on the City’s strategic plan and made substantial progress on that effort. e) Internal coordination has improved regarding Homelessness Response that has resulted in more effective outreach to unhoused individuals and better coordination within the City and with non-profit partners.
2) Support the implementation of the Climate Action and Economic Recovery Major City Goals a) CDD has implemented the Climate Action Plan standards by applying requirements to private development projects through the entitlement process. b) The department supported the project to ban the use of natural gas in new buildings with some exceptions.
c) Electric bikes were provided to building inspectors who have been making great use of this new resource and reduced the number of miles traveled by vehicle. d) The TIPP-FAST project was implemented to help “re-tenant” buildings vacated during the pandemic more quickly.
e) Credits totaling $250,000 were approved to offset the cost of permits for new tenant improvement permits to facilitate economic recovery.
3) Provide excellent customer service to internal and external customers, and advisory body members in the processing of permit applications
a) Improvements to the Energov permitting system were made and staffing challenges were resolved to ensure next-day availability of building inspections. b) An online scheduling system for building inspections was in the final stages of design and then implemented.
c) A new satisfaction survey was initiated that is emailed to customers. 4) Ensure a safe community through implementation of Building and Safety division programs, including Code Enforcement
a) A new Safe Housing Outreach and Education program was onboarded to increase awareness around tenant/landlord rights and responsibilities. b) CDD continued to implement City Council priorities for code enforcement and managed cases consistent with department Key Performance Indicators. 5) Monitor growth, and support and update General Plan policies and Zoning Regulations standards to ensure coordination with all City Departments that provide municipal services for the community
a) As detailed in the 2021 General Plan Annual Report, the Community Development Department is responsible for managing and tracking community growth and coordinating with all the City’s service departments. In FY2021-22, these efforts continued.

Challenges

Community Services Group – CDD
The most significant challenge experienced by CDD during FY 2021-22 was staffing. The department added new positions to address the increased scale of development that the City is experiencing, and it has taken time to write job descriptions, recruit, hire and onboard new staff members. Impacted positions included Permit Technician, Plans Examiner, Associate Planner (3), Deputy Building Official, Cannabis Business Coordinator, Code Enforcement Officer, Supervising Administrative Assistant and Housing Coordinator. In each case, these positions remained unfilled after multiple recruitments. The challenges are summarized in the following table.

Table 17: Community Development Challenges
Vacancy Impact
Cannabis Business
Coordinator
Senior Planner was forced to reprioritize work on the Subdivision Regulations Update and SB9 project.

Building Permit
Technician
Vacancies in this position caused delays in routing plans that are submitted for a building permit.

Plans Examiner The lack of a full-time, in-house plans examiner caused the City to send more plan checks to consultants. In some cases, this caused delays in getting minor modifications accomplished.

Associate Planner There were three vacant Associate Planner positions for most of the fiscal year.

This forced Senior Planners to perform more Development Review activities and has resulted in delays in delivery of policy projects, such as Missing Middle Housing.

Code Enforcement
Officer
The vacant Code Enforcement Officer position resulted in fewer cases being closed and lower revenues associated with fines.

Supervising
Administrative
Assistant
The vacancy experienced for much of the fiscal year in this position shifted work to the department’s Administrative Analyst, including supervision of the Administrative Assistant II, Administrative Assistant III and contract Administrative Assistant II. This position is responsible for coordinating department-wide meetings, website content updates, and employee recognition activities all of which were reduced in number and scope during the past year.

Just in the last few months, key positions were successfully filled and the Plans Examiner, Permit Technician, Supervising Administrative Assistant, Homelessness Response Specialist, and Associate Planner positions are in the recruitment process. Going into FY 2022-23, CDD still has six vacancies in the Administration, Planning and Building and Safety divisions, however, the hiring environment is improving and key positions, such as the Deputy Building Official, have been filled. The filling of these positions has resulted in immediate improvements to customer service and project processing times.

Community Services Group – CDD

Performance Measures
Table 18: Community Development Performance Measures
Objective Measure
2021-22
Target
2021-22
Actual
Affordable
housing
production
Number of affordable housing units secured through entitlements or construction 50 11214
Provide Excellent
Customer Service Customer survey response positivity rate 95% 88%15 Ensure a Safe
Community
Percent of Code Enforcement cases investigated on-time: First Tier - 24 Hours, Second
Tier - 2 Days, and Third Tier - 3-5 Days
85% 84%16
Development
Review activities
The target goal of meeting cycle times 75% of the time reflects an increase in more complex and resource intensive development review activities.
75% 78%
Building
Inspections
Percent of inspections performed the next working day 85% 96%

Variance Analysis
Due to the staffing challenges described above, CDD has variances (savings) in staffing, contract services, and several other operating expenditures. Wherever possible, CDD used salary savings from vacant positions to hire on-call consultants or temporary/contract staff to perform the work. This includes work in the area of planning, building permit plan check, building permit inspections, building permit technicians, and even Building Official work. There was also savings realized in contract services, which is also tied to staffing because certain projects, some supporting the Housing and Homelessness Major City Goal, were not able to be implemented with the staffing levels experienced for most of the year. Carryover requests will be made for projects that staff will complete in FY 2022-23.

Table 19: Community Development Variance Analysis
Salaries and Benefits –
Recruitment continues to be an issue and the department had numerous vacancies throughout the duration of the fiscal year. Every division experienced staff vacancies, with the most affected divisions

14 The number of affordable housing units that have been secured is higher than anticipated due to the sporadic timing in the entitlement process that is hard to project. 94 of these units are from a single development project that received a land dedication to produce 100 percent affordable housing units and a density bonus. 15 Target for FY2022-2023 reduced to 80 percent due to a discrepancy with the initial target and changing to be in line with the Customer Satisfaction Score (CSAT) standard. 16 Response rate to code enforcement cases was impacted due to staff vacancies since October 2021.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing $ 3,522,347 $ 3,962,973 $ 3,646,833 $ 316,140 8% $ 4,673,373 Contract Services $ 1,730,545 $ 2,506,727 $ 2,066,359 $ 440,368 18% $ 920,097 Other Operating Expenses $ 688,224 $ 1,127,183 $ 941,433 $ 185,750 16% $ 375,054 TOTAL $ 5,941,116 $ 7,596,883 $ 6,654,625 $ 942,258 12% $ 5,968,524 Community Development FY 2021-22

Community Services Group – CDD
being Building and Safety, and Planning. The Engineering division was over-spent in Regular salaries due to staff leaving and collecting vacation leave as well as the reclassification of Permit Technician II to Permit Technician III.

Contract Services –
Almost every division in the department had savings in contract services. Areas of savings were due to a delay in projects, most of which are anticipated to be completed in FY 2022-23. Some of these projects include addressing shared cubicles from existing staffing, as well as the need to increase the number of workstations for new staff resulting from the increasing number of staff in the department, implementation of the Housing Element Program, and the Homelessness Strategic Plan. The space planning project in particular was delayed due to modifying other department workspaces in addition to Community Development. For example, to create more room in 919 Palm for additional Public Works and Community Development staff, the GIS Division of Admin/IT is being relocated from 919 Palm to City Hall.

Once GIS is relocated (August 2022), the space planning project in 919 can move forward.

While most of these projects will be accomplished in FY 2022-23, one major project, Missing Middle Housing, will be delayed. Staff did begin to make progress on this effort in FY 2021-22. Specifically, the City worked with a Cal Poly professor, Dave Amos, who used the Missing Middle Housing project as the basis for instruction of a fourth-year planning studio (CRP-411). The final report produced through this effort will be very helpful to the project. However, resource constraints in CDD due to vacancies, combined with the recognition that a much more substantial outreach and engagement effort through the lens of Diversity, Equity, and Inclusion is needed to successfully bring this project forward. As a result, $100,000 of funding previously allocated to the project will not be requested for carry-over, and staff will “rescope” the project and bring it forward for consideration as part of the budget process for the 2023-25 Financial Plan.

The Housing Policy and Homelessness Programs division was the only division over budget due to large costs associated with implementing homelessness programs that were budgeted FY 2020-21, specifically the CAPSLO Safe Parking Program. Encumbrances were not established and invoices from CAPSLO did not come in until the current fiscal year resulting in the over expenditure. Additionally, unanticipated expenses arose with the start of pilot homeless programs including garbage fees for waste collection at the safe parking location.

Other Operating Expenses –
Due to the numerous vacancies in the department, training budgets were not fully utilized, which provided cost savings. There was significant savings in credit card merchant fees due to the front counter being open to the public and people using checks instead of credit cards for their transactions.

CDD Revenue Review
The City’s Development Review programs underrealized revenues during FY 2021-22. In total, Development Services related fees produced $6,181,157 of revenue for a variety of activities in support of development, including planning, infrastructure plan check, subdivision map checks, and building permits. As a result, the variance between budget and actual for Development Review Fees totaled $1,081,704, as illustrated in the following table. Revenue projections for FY 2022-23 have been revised

Community Services Group – CDD
downward to reflect the City’s experience with a slower pace of development than was realized during the pre-pandemic peak in FY 2019-20. While actual revenues were below projections across the board, the most significant factor was due to Infrastructure Plan Check and Inspection Fees, which account for 73 percent of the shortfall.

Table 20: Community Development Revenue Review
Building Permits: Building permits were approximately 10 percent below projections, although the $3.165 million that was collected represents the second highest total for building permits in the City’s history, with the highest total being in the prior year. Based on the strong performance of building permits in FY 2020-21 and the expectation of a post-Covid rebound - while also taking into consideration expected projects that were progressing through the permit process - the City projected building permit revenue to be the same in FY 2021-22 as in FY 2020-21. However, the beginnings of a slow-down period associated with supply chain issues, inflation and increased interest rates were resulted in a reduction in actual revenue of approximately $419,000 from the prior year. The FY 2022-23 forecasted budget for Building Permits is projected to continue a slight downward trend. The potential for a major disruption in revenues due to a possible recession will be tracked closely and adjustments will be recommended at mid-year if revenues are lower than expected.

Code Enforcement Fines: Revenues from Code Enforcement Fines were approximately 31 percent below projections. In FY 2020-21, the City realized approximately $90,000 of code enforcement related revenue and projected to recover the same in FY 2021-22. However, only 68.5 percent ($61,695) of this projection was realized. This change is largely due to a retirement and a promotional opportunity that created vacancies for a portion of the fiscal year. In addition, the City has shifted to collections instead of property liens as a method for collecting delinquent fines due to a change in the law regarding property liens.

Collections has proved to be a less effective way of recovering delinquent fines, especially when those fines are for small dollar amounts as is the case with most of the City’s code enforcement related fines.

Development Review Fees: These fees are collected when projects that have had an entitlement go through the building permit process. The fees reflect staff time spent ensuring that the building permit complies with the previously approved entitlement. These fees were projected to be lower in FY 2021-22 since changes to the Zoning Regulations mean fewer projects are going through the entitlement process and would be subject to this fee during the building permit process. Staff’s projection was $400,000 in Adopted Budget Adjustments Total Budget Actuals Variance % Building Permits $ 3,583,995 $ 3,510,000 $ - $ 3,510,000 $ 3,165,038 $ (344,962) 90% $ 2,921,700 Infrastructure Plan Check & Insp $ 829,252 $ 1,200,000 $ - $ 1,200,000 $ 408,035 $ (791,965) 34% $ 1,432,352 Plan Check Fees $ 1,140,509 $ 355,000 $ 667,861 $ 1,022,861 $ 1,280,615 $ 257,754 125% $ 299,000 Planning & Zoning Fee $ 500,989 $ 600,000 $ - $ 600,000 $ 470,462 $ (129,538) 78% $ 416,195 Development Review Fees $ 508,373 $ 400,000 $ - $ 400,000 $ 363,396 $ (36,604) 91% $ 341,228 Encroachment Permits $ 327,948 $ 305,000 $ - $ 305,000 $ 295,643 $ (9,357) 97% $ 323,340 Engineering Dev Rev Fees $ 116,097 $ 135,000 $ - $ 135,000 $ 136,274 $ 1,274 101% $ 123,803 Code Enforcement Fines $ 90,879 $ 90,000 $ - $ 90,000 $ 61,695 $ (28,305) 69% $ 60,000 Total Revenue Earned $ 7,098,041 $ 6,595,000 $ 667,861 $ 7,262,861 $ 6,181,157 $ (1,081,704) 85% $ 5,917,618 TIPP- Contra Revenue Account** $ (8,279) $ (291,721) $ - $ (291,721) $ (210,161) $ 81,559 72% $ - Total Revenue Received $ 7,089,762 $ 6,303,279 $ 667,861 $ 6,971,140 $ 5,970,996 $ (1,000,144) 157% $ 5,917,618 * The Plan Check Budget increased throughout the year as the City realized revenue for Building Permit Plan Check and, consistent with Budget Policy, utilized those revenues to pay for consultants that performed the plan check services. Fees for these services are established based on a policy of 100 percent cost recovery. * The TIPP‐FAST program provides expedited Tenant Improvement permits for new businesses. The City offered these permits free of charge for a limited period. Per Resolution No. 11203, $3,425,000 in undesignated fiscal year 2018‐19 General Fund Balance was allocated towards economic development and homeless services. $2 million of this funding was assigned to locally invest in short term Certificates of Deposit to generate interest for a grant program to help offset the cost of a TI permit.

One of the recommended SOBCs for the 21‐23 Financial Plan was to utilize $250,000 of this principal to continue funding the TIPP‐fast permitting program in FY 21‐22.

Development Review Fees FY 21 Actual FY 23 Forecasted
Budget
FY 2021-2022

Community Services Group – CDD
revenue after realizing approximately $500,000 in the previous fiscal year. 90 percent of this total, or $363,396 was collected. Revenue from Development Review fees is expected to be slightly lower in FY 2022-23, at $341,228.

Encroachment Fees: Encroachment permits are issued for work in the City’s right-of-way performed by private development. Encroachments are required for all curb, gutter, sidewalk and utilities work in the right-of-way. Almost 97 percent of the projected revenue was collected in FY 2021-22 ($295,643).

Infrastructure Plan Check and Inspection: The most significant gap in the revenue projections for FY 2021- 22 relate to infrastructure plan check and inspection. Although staff had identified projects in progress that would generate additional revenue, those projects did not complete the plan review process during FY 2021-22. In addition, there is approximately $1 million of fees associated with future phases of the Avila Ranch project that were not submitted in FY 2021-22 and are now expected to come forward in FY 2022-23. As a result of slower than expected development, the City only realized 34 percent of the projected revenues in this category, or $408,035, accounting for 73 percent of the total gap between actual versus projected revenue. Infrastructure plan check is considered “lumpy” because it consists of a smaller number of large projects (primarily subdivisions and new neighborhoods). In addition, the City only collects revenues at the end of the process, when permits are issued. Going forward, staff will work to modify its fee schedule to require deposits and progress payments to ensure that work performed during a fiscal year is covered by revenues collected during that fiscal year. Based on the number of projects that have planning entitlements and the proposed changes in billing practice, staff is projecting revenue of approximately $1.4 million for FY 2022-23.

Plan Check Fees: Plan check fees are associated with building permit applications and are administered under a budget policy that allows the City to use collected revenues to pay for the consultant services that are used to complete this work. The City’s contracts with plan check consultants provide for consultants to collect up to 65 percent of the City’s plan check fee. The City uses the remaining 35 percent for administrative overhead, revisions and plan checks that are performed in-house instead of being sent to a consultant. In FY 2021-22, the City collected $1,280,615 in revenue from plan check, which was slightly higher than the FY 2020-21 total. Going forward, Community Development and Finance will work together to fine tune the policy around Plan Check fees to ensure more accurate forecasting. Currently, the policy does not require staff to project expenditures since the policy ensures that a percentage of revenues collected for Building Plan Check pays for the consultants that provide the review and the revenue budget increases as expenditures are utilized to pay for these services. At the 2023-25 Financial Plan, staff will re-evaluate the policy and potentially propose a change that allows staff to begin the year with the full revenue and expenditure budget projection. This will eliminate the continuously increasing budgets as revenue is collected throughout the year.

Planning & Zoning Fees: Similar to Development Review fees, Planning and Zoning fees were lower in FY 2021-22 than the prior year. Changes approved to the Zoning Regulations in support of housing production and economic development allow certain projects to move forward with more timely review of entitlements. Fewer projects go to the Planning Commission and Architectural Review Commission than in the recent past. Staff projected $600,000 in revenue in this area and realized 78 percent of that total, or $470,462. Future projections for this item are projected to be lower still, at $416,195, in consideration of additional streamlining of the development review and entitlement process that occurred in FY 2021- 22 and due to a slow-down in the number of applications submitted, likely due to recessionary concerns.

Community Services Group – CDD
Development Services Designation
Table 21: Development Services Designation Balance
Resolution No. 10539 authorizes the City Manager to approve the appropriation and carryover of up to 75 percent of the over-realized development services revenue to cover the additional funds needed for development projects. This funding is vital to fund resources needed to achieve Major City Goals and department objectives. Many multi-year projects require resources that lag significantly from the revenue collection to the services being rendered. There will be no additions to the Development Services Designation (Designation) balance from FY 2021-22 due to no over-realization of development services revenue. This policy will be evaluated with the 2023-25 Financial Plan to determine if it needs to continue or should be modified given the approved staffing increases that were approved to sufficiently cover the required service and right-size the department staffing levels Table 21: Development Services Designation Balance
2021-22 Beginning Balance $ 710,657
2021-22 Consumption $ (180,000)
2021-22 Remaining Balance $ 530,657
In FY 2021-22, the Designation was utilized for two development review-related needs:

Two Contract Engineering Inspectors ($150,000) – Two contract engineering inspector positions were approved to support the anticipated influx of private development projects requiring engineering inspections.

Contract/Temporary Administrative Assistants ($30,000) – Contract/temporary admin were hired to assist with answering the building inspection phone line dedicated to scheduling and managing building inspections.

Community Services Group - Parks and Recreation
Parks & Recreation Department
A Year In Review
The Parks & Recreation Department ended the year with positive variances in both revenue and expenditures. The Community Services Division brought the community together with popular pop-up events like the Jack House & Gardens Spring Concert Series and Monday Meetups. Working in partnership with San Luis Obispo Museum of Art, the Department commissioned two murals and two temporary sculpture exhibits, repaired, and reinstalled the Flames of Knowledge sculpture at Emerson Park and secured a new sculpture for the Tank Farm/Orcutt Roundabout.

The Department opened a state-of-the-art new outdoor fitness court at Emerson Park, and Facilities continued to offer outdoor dining opportunities to the community, supporting the Downtown Dining program in Mission Plaza.

Youth Services provided quality childcare to the community at all five (5) elementary school sites located within the City (C.L. Smith, Hawthorne, Pacheco, Sinsheimer, and Bishop’s Peak), and expanded summer camp programming to assist in fulfilling community needs. Aquatics returned to standard summer programming while introducing new programming including Super Rec Saturdays, an expanded recreational swim for the community. Staff maintained the 26-acre, 10-hole Laguna Lake Golf Course, offering regular programming despite the closure of the Golf Pro Shop due to flooding and recurring challenges with the aging irrigation infrastructure. Ranger Service has expanded its educational programming with more environmental education videos, Ranger-led interpretive hikes, and adding a third session of the popular Junior Ranger camp. After months of coordination with the Office of Natural Resources, Ranger Service officially opened the Miossi Open Space, adding new trails, including the Cal Poly connector, as well as upgrades to existing trails throughout the City’s Open Spaces, including Irish Hills. The division also continues to dedicate resources for fire fuel management and to clean up trash and debris in the City’s Open Spaces and creeks.

To meet the growing needs of the community, Recreation Administration hired a full-time Administrative Assistant III, which was vacant for a few months due to a promotion, to assist with its supplemental hiring, compliance, communications needs, and supporting the growing department. Youth Services filled six new full-time positions, offering consistency and support at all five City school sites and expanded summer camp options. Community Services hired a full-time Community Services Coordinator position to oversee Senior programming, Community Gardens program, manage the expanding Contract Class program, and support the Community Services division.

Accomplishments and Strategic Goal Updates

1. Received Council endorsement of the Parks & Recreation Blueprint for the Future, a new 20-year master plan and general plan element update

2. Expanded childcare services to serve five (5) elementary school sites located within the City limits (C.L. Smith, Hawthorne, Pacheco, Sinsheimer, and Bishop’s Peak), collaborating closely with SLCUSD

3. Expanded summer Youth Services programming to meet community needs with additional camp options

4. Opened the Miossi Open Space and upgraded existing trails throughout the City’s Open Space

5. Completed an outdoor fitness court at Emerson Park as part of a National Fitness Campaign grant

6. Continued the popular Downtown Dining program in Mission Plaza, offering outdoor dining opportunities to the community to support economic recovery

7. Implemented a first-ever, five-week Summer Sports Camp to off-set childcare needs within the community

8. Oversaw the safe, post-pandemic return of Youth Sports Leagues (Basketball and Futsal) and expanded Youth Sports Clinics and camps

9. Held 13 Community Events: Monday Meet-Ups, Spring Concert Series, Haunted Walk, Egg Hunt, Leprechaun Lost

10. Finalized a new agreement for a new concessionaire for the Laguna Lake Golf Course Challenges

Community Services Group - Parks and Recreation
Recruitment and staffing posed the greatest challenges for the Parks & Recreation Department. A national lifeguard shortage made it difficult to recruit lifeguards, and COVID continued to impact staffing; however, the division was able to optimize its programming to meet community needs. Youth Services experienced staffing challenges and space limitations at program sites, and youth and adult sports encountered staffing challenges. Over the course of FY 2021- 22, the Laguna Lake Golf Course experienced countless irrigation leaks due to its aging infrastructure. While infrastructure improvements are being considered for future capital improvement plans, the Golf Division invested in a hydro excavator to reduce downtime on leak repairs. Additionally, in the month of December, flood damage forced staff to close the Golf Pro Shop and relocated operations to a temporary on-site office trailer. The Pro Shop facility is currently being remediated as part of a Mid-Year budget increase and will reopen in FY 2022-23. The Golf Course struggled with cash-only payments for most of the year as it continues to work towards a partnership with a new credit card merchant that aligns with City financial controls.

Performance Measures
Table 22: Parks and Recreation Performance Measures
Objective Measure 2021-22
Target
2021-22
Actual
Provide inclusive, accessible
programming that serves the whole
community.
# of Department Community Events 20 13
# of non-profit permitted Facility Uses 120 92
# of program registrations 3,200 4,866
# of program offerings 300 584
# of childcare spots filled/offered 1085 /1085 1,131
# of children receiving subsidy
51 CAPSLO
27 City
scholarship
61 CAPSLO
45 City
Scholarship
In Coordination with Public Works,
engage the public to prioritize new
and revitalized Recreational Amenities
# of public outreach meetings 6 3
# of updated or new parks and amenities in process 4 4
Creates and fosters a sense of
community through citizen
involvement
# of volunteers/hours 100/400hrs
79/1495
hours
# of temporary Public Art or Cultural Art Events 5 4
Leverage technology to engage the
community and promote program
offerings
# of Instagram followers 6,700 6,295
# of Facebook followers 4,890 3,920
# of Virtual Program Offerings 15 4
Open Space Preservation and
Enhancement
# of miles of Open Space trails maintained 61 62
# of staff hours dedicated to fuel reduction 2,500 1,68717 # of encampment site clean-ups removed from Open
Spaces 60 85

Variance Analysis

Table 23: Parks and Recreation Variance Analysis

17 The hiring of the newly created open space technician supplemental positions experienced both delays and recruitment challenges, leading to fewer staff hours dedicated to fuel reduction.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing $ 3,050,597 $ 3,801,285 $ 3,229,844 $ 571,441 15% $ 3,863,441 Contract Services $ 247,637 $ 293,958 $ 278,371 $ 15,587 5% $ 249,367 Other Operating Expenses $ 256,934 $ 577,888 $ 482,339 $ 95,548 17% $ 526,025 Utilities $ 98,559 $ 127,913 $ 154,331 $ (26,418) -21% $ 119,895 TOTAL $ 3,653,727 $ 4,801,044 $ 4,144,886 $ 656,158 14% $ 4,758,728 Parks & Recreation FY 2021-22

Community Services Group - Parks and Recreation

Salaries and Benefits – The Facilities division experienced temporary salary savings of $23,000 due to fewer indoor rentals and the pausing of Downtown Dining in the Mission Plaza (resulting from holiday activations). In Youth Services, temporary salaries were lower than usual (nearly $71,000 remaining) because the division was not operating at full staff capacity. In Community Services, the delayed requisition of the Volunteer Coordinator contract position that was budgeted during the Mid-Year Review left nearly $33,000, and the cancellation of the SLO Triathlon left $62,000 in temporary salary savings. In Ranger Service, the conversion of four limited benefit temporary (LBT) employees to full-time (FTE) occurred in August but was budgeted in July, and the hiring of the newly created open space technician positions experienced both delays and recruitment challenges, leading to savings of $142,000. In Aquatics, hiring challenges and program cancellations due to staffing, as well as mechanical issues related to the heating system for the Therapy Pool resulted in salary savings of more than $110,000. At the Laguna Lake Golf Course, supplemental staff was increased during opening and closing shifts for safety reasons, countering some of the salary savings department-wide by approximately $6,000.

Contract Services – A significant portion of contract services in the Community Services Division was not spent due to the cancellation of the SLO Triathlon. This event was cancelled due to declining participation and limited communitywide benefit. Discontinuation of the SLO Triathlon allowed Community Services staff to reallocate $4,000 in contract services toward the implementation of recommendations outlined in the Parks + Recreation Blueprint for the Future and to enhance the City’s community building program opportunities, with fewer expenditures. Additionally, the Department shifted over $7,000 to contract services in the Ranger Services Division due to built-up demand for encampment cleanups.

Other Operating Expenses – The Community Services Division experienced combined savings of more than $32,000 in Advertising & Public Outreach, Materials and Supplies due to the cancellation of the SLO Triathlon. Minimal expenditures at the Jack House also left savings of nearly $7,600 in this account, and staff shortages in Communications reduced paid social media marketing efforts.

Utilities – Due to the aging irrigation infrastructure at the Laguna Lake Golf Course, the necessary repair of numerous water leaks and significant pipe and sprinkler mechanism replacement over the fiscal year created unforeseen overages in overall water use. With every repair, thousands of gallons of water must be drained from the system to reduce pressure. In all, water expenditures exceeded budget by more than $43,000. This was partially offset by limited use of well water for the Golf Course, which draws from Electric Service.

Parks & Recreation Revenues
Table 24: Parks and Recreation Revenues

Community Services Group - Parks and Recreation
Facilities: The closure of the assembly room and kitchen of the Ludwick Community Center for use by the Parks & Recreation Department staff as their temporary office for Q3 and Q4 limited indoor rental use. Additionally, reservations for outdoor BBQ and other summer rentals (birthdays, weddings) were less than estimated as the community transitioned out of COVID restrictions. Special event permits exceeded projections, although they were not at pre-pandemic levels.

Youth Services: Childcare Services continued to exceed targets as sites remained at capacity throughout the fiscal year and a high demand for summer day camps.

Community Services: The cancellation of the Triathlon accounted for a loss of an estimated $50,000 in revenue as well as a reduction in expenditures. More revenue than anticipated in contract classes and youth athletic fees further balanced out this loss of special event revenue with expanded program offerings.

Aquatics: Aquatics revenue exceeded projections with the return of traditional swim lessons format and expanded lap swim times, despite therapy pool closures and temporary modifications to existing contracts.

Golf: Golf revenue was impacted by several factors including, the absence of a credit card processing system for much of FY 2022, the closure of the Pro Shop since mid-December due to flooding and remediation efforts, and staffing challenges. As a result, golf revenue decreased by nearly $27,000 (11%) year-over-year.

Budget Actuals Variance %
Youth Services Childcare $ 849,552 $ 611,785 $ 599,357 $ (12,428) 98.0% $ 639,806 Golf Greens Fees $ 198,058 $ 200,000 $ 178,024 $ (21,976) 89.0% $ 235,180 Adult Athletic Fees $ 46,307 $ 122,400 $ 103,111 $ (21,560) 84.2% $ 154,362 Youth Services Camps $ 86,776 $ 106,650 $ 163,897 $ 57,247 153.7% $ 154,275 Outdoor Rental & Use Fees $ 61,033 $ 88,867 $ 65,813 $ (23,054) 74.1% $ 129,960 Aquatics Daily Use Fees $ 50,361 $ 73,075 $ 89,322 $ 16,247 122.2% $ 115,175 Instruction Fees $ 56,152 $ 61,400 $ 79,690 $ 18,290 129.8% $ 97,830 Other Parks & Recreation Revenue $ 41,780 $ 54,282 $ 40,579 $ (13,703) 74.8% $ 58,482 Special Events - City Sponsored $ 3,564 $ 50,149 $ 149 $ (50,000) 0.3% $ 13,583 Youth Athletic Fees $ 36,071 $ 48,000 $ 62,289 $ 14,289 129.8% $ 55,000 Multi Day Swim Passes $ 56,387 $ 41,753 $ 58,714 $ 16,961 140.6% $ 44,383 Indoor Rental & Use Fees $ 12,201 $ 39,532 $ 29,405 $ (10,127) 74.4% $ 65,100 Golf Cart Rentals $ 12,429 $ 28,262 $ 14,050 $ (14,213) 49.7% $ 29,675 Swim Instruction Fees $ 49,997 $ 20,923 $ 40,803 $ 19,880 195.0% $ 75,108 Special Events App/Permit $ 4,333 $ 20,000 $ 30,653 $ 10,653 153.3% $ 33,293 Driving Range Fees $ 12,561 $ 11,715 $ 8,860 $ (2,855) 75.6% $ 12,900 Golf Rental Fees $ 7,889 $ 10,566 $ 6,070 $ (4,496) 57.4% $ 11,232 Sales Taxable $ 14,741 $ 10,000 $ 11,852 $ 1,852 118.5% $ 10,000 Therapy Pool Fees $ 9,553 $ 8,627 $ 3,642 $ (4,985) 42.2% $ 16,304 Special Events Insurance $ 2,484 $ 7,165 $ 7,426 $ 261 103.6% $ 6,000 Library Rental $ - $ 6,500 $ 4,780 $ (1,720) 73.5% $ 16,290 Junior Ranger Camps $ 4,210 $ 4,500 $ 5,808 $ 1,308 129.1% $ 4,982 Golf Lesson Fees $ 8 $ - $ 159 $ 159 $ -
Total $ 1,616,445 $ 1,626,151 $ 1,604,453 $ (23,969) 99% $ 1,978,920 Parks & Recreation Revenue FY 21 Actuals FY 2021-2022 FY 23 Forecasted Budget

Community Services Group - Public Works
Public Works Department
A Year In Review
The Public Works Department (Department) continued to provide core services to the community by maintaining the City’s park system, community facilities, roadways, maintaining and replacing critical infrastructure, enhancing pedestrian safety and mobility, and maintaining the City’s urban forest. Modified operating standards following COVID-19 has shown to be impactful on the department’s workload and allocation of resources throughout FY 2021-

22. Efforts were focused on achieving key objectives with an emphasis on health and safety as well as economic resiliency much like recent pandemic years. Cost escalation and supply chain issues have significantly impacted operational costs over the fiscal year, in addition to construction costs in the Capital Improvement Plan (CIP) program.

While the Department did not achieve its target of a 10% annual reduction in traffic collisions (actual reduction achieved = 6%) compared to the previous year, this is largely due to a significant decrease in collisions in 2020 (17% total reduction in 2020), likely due to an overall decrease in driving due to the COVID-19 pandemic. Compared to 2019, there has been a 23% reduction in total collisions in 2021. Staff were diligent in continuing ongoing implementation of traffic safety and complete street improvements and program, including completion of the Railroad Safety Trail (Taft to Pepper) project, completion of several new protected/separated bikeways, and made significant progress with construction of the Tank Farm/Orcutt Roundabout.

Efforts continued with implementation of the Open SLO program, facilitating continuation of temporary parklet and outdoor dining installations. Staff recently completed development and Council adoption of a new permanent parklet program, allowing a transition away from the temporary pilot Open SLO activities. This effort necessitated several street and traffic safety measures, as well as increased maintenance and sanitation efforts in the downtown corridor.

In addition to Open SLO program support, staff continued to be proactive in preventative maintenance efforts for City assets, increasing the number of preventative work orders from FY 2020-21.

The department has made progress to fill vacant positions following the completion of several organizational studies.

The recommendations provided in these studies are now in the implementation phases, and will address significant process improvements in staffing, performance tracking, financial management, and delivery of services. Short staffing (further explained in next sections) in the CIP program paired with dynamic economic conditions that escalated construction costs precluded the department from constructing all CIP projects in the year they were budgeted.

Accomplishments and Strategic Goal Updates
The Department continued to address Major City and Department Goals as outlined in the 2021-23 Financial Plan.

The department sustained efforts to address and invest in critical infrastructure through the City’s Capital Improvement Plan (CIP) by allocating nearly $55M toward the maintenance and preservation of City assets across all funding sources. The CIP Engineering program also has made strides following an organizational assessment for process improvements and programmatic efficiencies. In addition, the Transportation and Planning Program successfully implemented the objectives from the Active Transportation Plan including pedestrian and bicycle improvements and street enhancements to improve traffic safety. Major milestones include completion of the Railroad Safety Trail (Taft to Pepper) project, facilitating completion of the Madonna Shared-Use Path and Madonna & LOVR protected intersections as part of San Luis Ranch development, completion of construction documents for the 2022 Pedestrian Crossing Improvements project, facilitation of new protected bikeways and pedestrian crossings downtown on Marsh and Higuera Streets as part of 2021 and 2022 Paving Projects, and made significant progress with the construction of the Tank Farm/Orcutt Roundabout.

Community Services Group - Public Works
Following the passage of the Local Revenue Measure (Measure G-20) in 2020, which increased the local sales tax rate from 0.5% to 1.5% beginning in April 2021, the City has placed major emphasis on addressing infrastructure. The following notable capital projects were complete or largely complete during FY 2021-22, among others:

1. Fire Station 1 HVAC Replacement

2. Sinsheimer Park Irrigation and Stadium Drainage

3. Broad Street/Woodbridge Pedestrian Hybrid Beacon

4. Meadow Park Pathway Maintenance

5. 2021 Downtown Pavement Improvements

6. Mission Plaza Railing Upgrades

7. Laguna Lake 2021 Maintenance Dredging Project

8. Swim Center Therapy Pool Boiler Replacement

9. Railroad Safety Trail Taft to Pepper

10. Sinsheimer Park Hardscape Replacement

11. Storm Drain Culvert Repairs at Broad and Leff

12. Parks and Recreation Interior Office Rehabilitation

13. French Park Parking Lot Maintenance

14. Emerson Park Fitness Court
The Urban Forest Program continued to place focus on the preservation, maintenance, and enhancement of the City’s urban forest. Some notable work over the past year was the completion of the organizational assessment and the tree inventory, which revealed a more accurate inventory of the City’s urban forest. The Department also implemented the City’s first preventive maintenance pruning schedule which is underway by a contractor that specializes in municipal urban forestry maintenance. The Department continued to ensure delivery of its core services by enhancing community and downtown cleanliness through sidewalk scrubbing, street sweeping and clean up, and ongoing maintenance of parks and facilities utilized by all residents, businesses, and visitors.

Challenges
The Department experienced challenges in the areas of staffing, cost escalation, supply chain issues, and keeping up with maintenance of aging infrastructure. In many ways it has had to modify day-to-day operations in order to continue delivering core services following the COVID-19 pandemic. Staffing proved to be a challenge over the fiscal year both in maintenance operations as well as the capital improvement engineering programs. In many instances, staff relied on contract services and consultants to ensure adequate service levels to meet City goals and to deliver key projects. This past year, nearly all programs experienced multiple prolonged staffing vacancies that were a result of retirements, promotions, and resignations, creating a knowledge gap for staff assuming these roles. This will likely result in a higher level of contract services needed over the next year, as newer staff’s technical experience increases.

Within the Capital Improvement Plan Engineering (17 FTE) and Transportation Planning and Engineering programs (7 FTE), staff delivered projects while seeing staffing vacancies. Peak vacancies reached eight full time employee positions in CIP Engineering, impacting progress on many projects which required a project prioritization effort and funding deferrals as part of the 2021-23 Financial Plan Budget Supplement. These programs have engaged in continuous recruitments since March 2022 to fill positions of which two vacancies remain.

The department was able to address several services and improvements that were deferred in years past due to staffing shortages, revenue shortfalls, or in response to the COVID-19 pandemic, such as preventative maintenance to City facilities, fleet assets, and the urban forest. However, project and core service delivery came with major challenges in the areas of cost escalation and supply chain shortages. The City experienced major cost increases in the price of fuel for the City’s fleet, water costs for the City’s parks due to limited rain fall, and in many instances experienced delays in receiving materials and supplies required to keep up with the day-to-day delivery of core services. Fortunately, the City has begun its transition to Electric Vehicles and anticipates a reduction in fuel consumption in the coming years.

Community Services Group - Public Works
Modified operations of core services continue to be a challenge for Public Works. Following the limitations and lifting of restrictions of COVID-19, staff saw an increased use of many outdoor public facilities. This has resulted in a greater need for maintenance and trash collection in the parks. This increased demand coupled with the increased numbers of staff being personally affected by the pandemic, resulted in an on-going need for additional contract services funding. The department secured funding for FY 2021-22 to supplement the increased need for solid waste service and for an increased use of contract services to react to the continued absences as staff due to the ongoing pandemic.

Performance Measures
Table 25: Public Works Performance Measures
Objective Measure FY 21-22 Target FY 21-22 Actual
Proactively enhances traffic safety by providing a system of safe, reliable, and well-maintained roadways, sidewalks, traffic signals and streetlights.

Pavement Condition
Index 74 72
18 Bicycle network in total
miles (Class I/II/III/IV) 12.4/28.9/24.6/2.1 12.1/29.3/25.0/1.2 Street miles maintained 135 135
Enhance the City’s Urban Forest and maintains visually
appealing public spaces.
# of trees maintained 20,250 12,97019
Total acreage of park
inventory 583 58320
Provide high quality services to the community through
efficient and effective delivery of capital improvement projects and management of the City’s infrastructure.

Total value of CIP
Managed $59M $55M

Variance Analysis

Table 26: Public Works Variance Analysis

Salaries and Benefits – There were significant savings in staffing budgets in the department, largely due to vacancies following the FY2020-21 hiring chill and the staffing impacts of COVID 19 including turn over and retirements. The department began to fill vacant positions following the completion of several organizational studies and carried out services during the fiscal year with limited staffing capacity, resulting in personnel related savings as outlined in the table above. While the department experienced vacancies, there was an increased need to utilize contractors or consultants to deliver a variety of services.

Contract Services – Department-wide there were savings realized in contract services with the department expending approximately 96% of its contract services budget. Some programs with excess spending in contract services were

18 Decline in Pavement Condition due to pavement age. Pavement management projects included in the CIP are budgeted to maintain pavement condition near the targeted PCI; however, and pavement condition will still fluctuate year to year. 19 The Urban Forest Services Program recently complete an inventory of trees located within the public rights-of-way, parks, facilities. The urban forest number of managed trees has been aligned with maintenance program scope of service. Many trees in the City’s open space and riparian zones have been removed from the Urban Forest Services maintenance metrics as these trees are maintained by the Parks and Recreation Department Ranger Services Program or Natural Resources. 20 The total acres of Park inventory are 583, with 106 acres being improved with landscaping, play equipment, or turf.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing $ 6,919,048 $ 7,902,660 $ 7,135,851 $ 766,809 11% $ 8,696,449 Contract Services $ 1,281,000 $ 2,402,169 $ 2,314,026 $ 88,143 4% $ 1,818,050 Other Operating Expenses $ 1,268,213 $ 1,984,488 $ 1,763,876 $ 220,612 13% $ 1,900,004 Utilities $ 1,891,528 $ 2,146,642 $ 2,214,933 $ (68,292) -3% $ 2,248,000 TOTAL $ 11,359,789 $ 14,435,959 $ 13,428,687 $ 1,007,273 7% $ 14,662,503 Public Works FY 2021-22

Community Services Group - Public Works
offset by reduced spending on other operating expenses. Parks Maintenance experienced spending beyond budget to address lighting improvements in Mission Plaza while Fleet reduced its overall expenses in contract services to account for a major increase in the fuel budget item. As a result of limited staff, there was a need throughout the year to rely on contract services to deliver services and complete projects.

Other Operating Expenses – There were savings realized in other operating expenses while the department expended approximately 89% of this budget category. Throughout the department, other operating expenses fluctuated drastically over the year primarily due to cost escalation and modified operations. Some programs, including Fleet, experienced major increases such as fuel costs while the department realized cost savings in other operating expenses to offset cost escalation. Across the department, realized savings were captured in construction materials and supplies, equipment maintenance supplies, miscellaneous materials and supplies, and education and training.

Utilities – Water, sewer, electricity, and solid waste utility services varied considerably across all programs. Public Works expended 103% of its utility budget in Fiscal Year 2021-22. The primary driver of the utilities budget amount was due to Parks Maintenance water expenses, associated with limited rain fall during the year. The Department also experienced cost increase in the areas of natural gas due to a recent spike in gas prices, while savings were realized in solid waste services and electricity.

Community Services Group – Solid Waste Program
Solid Waste – AB 939 General Fund
The Solid Waste program is funded by AB 939 funding collected through the solid waste bills. AB 939 funds may only be used to pay for activities that divert waste from the landfill. Any funds remaining at the end of the year must remain within the Solid Waste program budget.

A Year In Review
The Solid Waste and Recycling Program (Program) successfully established funding, staffing support, and program objectives over the past fiscal year which have been key in completion of some large-scale and challenging projects.

In accordance with the requirements of SB 1383, the State’s most expansive solid waste legislation in over 30 years, the Program completed updates to the Municipal Code and long-term franchise agreements, and managed citizen participation in the curbside organic waste program. As a result of SB 1383 and inflation, the Program navigated a difficult solid waste rate increase with a successful Council adoption, including the administration of a third-party solid waste rate study. The Program also played an integral role in making progress in compliance efforts while key external partner, the Integrated Waste Management Authority (IWMA), underwent unexpected changes in executive leadership and membership. Since securing funding for a second full-time City staff member as a part of the rate setting process, the Program anticipates achieving a far greater volume of public outreach and internal facility improvements over the next fiscal year.

Accomplishments and Strategic Goal Updates

1. (4.1.e) Hired a CivicSpark Fellow to jumpstart development of a Municipal Operations Zero Waste Plan aimed at reducing waste generated by City operations by 90%.

2. Renewed membership with the Integrated Waste Management Authority through JPA amendment.

3. (4.2.g) Ensured 96% of major organic waste generators are subscribed to or exempt from organic waste services (in accordance with AB 1826).

4. Processed 1,361 construction and demolition waste management plans.

5. Secured 100 tons of compost to be made available to the City and community members through negotiation of the City’s franchised waste hauling agreements.

6. Updated Municipal Code and 20-year franchise agreements to be compliant with SB 1383.

7. Administered rate study RFP and contract to enlist third-party agency to ensure justifiable and accurate rate evaluation during base year solid waste rate increase, and successfully completed a rate setting process.

Challenges
In FY 2021-22, the three predominant challenges that Solid Waste experienced were understaffing, uncertainties with a critical partner agency, and complexities with rate setting.

The City continues to grow its solid waste management program to administer new and existing regulatory programs like those required by SB 1383 and AB 1826. Since establishment of the Program in 2020, Solid Waste had been staffed by one FTE. To more effectively lead the regulatory programs necessary for compliance with State and regional law, the City added another position in FY 2022-23 that was approved through the supplemental budget and considered in the rate setting process.

The County’s withdrawal from the IWMA and an Executive Director turnover within the past year led to increased City staff involvement in regional agency coordination and planning efforts. Fortunately, the Executive Director role has again been filled, a rate increase supportive of the agency’s defined objectives has been adopted, the County’s withdrawal from the IWMA has been completed, and the remaining members have recently signed amended Joint Powers Agreements ensuring increased stability for the organization in the next fiscal year.

The solid waste base year rate setting also required significant attention from staff and management who oversaw a rate study contract and navigated the largest rate increase in the City’s history. Staff is working on an update to the 1994 Rate Setting Manual which should result in a more efficient rate setting process once adopted.

Variance Analysis
Table 27: Solid Waste Variance Analysis

Community Services Group – Solid Waste Program
Table 28: Solid Waste Overview
Solid Waste AB 939 Overview Budget Actual Variance % Over/Under a) FY21-22 Revenue - AB939 - 190,196
b) FY21-22 Expenditures 355,478 193,703 161,775 -46%
c) FY21-22 Year-End Net Revenue Over Exp (a-c) (3,507)
d) FY20-21 Carryover 103,572
Total Carryover Request (c+d) 100,065

Staffing
One additional full-time Coordinator was budgeted to cover a planned leave of absence. Challenges recruiting for the position led to a vacancy in the position up until two weeks prior to the absence. Two and a half months of anticipated salary and benefits remained. The chosen interim candidate was hired as a 0.75 FTE, resulting in a 25% cost savings in the salary and benefits paid out to the contract employee once hired. Additional salary savings were realized in the absence of the FTE Coordinator from November 25 to February 15 due to maternity leave.

Contract Services
The primary focus of the Solid Waste and Recycling Program over FY 2021-22 was to bring the City into compliance with SB 1383 requirements which led to a high volume of in-house workload including updates to the Municipal Code, franchise agreements, and IWMA Joint Powers Agreement. Execution of time sensitive work efforts and training of backfill staff and new management meant that otherwise anticipated expenditures were delayed.

In an attempt to better prepare for the temporary absence of the Coordinator, a part-time contract Administrative Assistant was budgeted in FY 2021-22. After difficulties in recruiting and ultimately hiring a contract employee to fulfill the scope of work assigned, the Program decided to end the contract term early which created approximately $23,000 in savings.

Workload analysis conducted during FY 2021-22 demonstrated that additional staffing was required to move Program initiatives forward. Therefore, during budget supplement, budget was approved for a second permanent staff position in the Solid Waste Program. With the addition of a second permanent position, the Program can plan several new outreach and compliance efforts not previously feasible.

Budgeted and carryover funds in the Contract services account will be used in FY 2022-23 to execute three major projects planned in the previous fiscal year. Some of the funding will be used to hire a consultant to develop an organics procurement strategy to meet targets set by the State of California. Projects under the scope of work may include designing Direct Service Provider Agreements, drafting a land application ordinance, costing out the purchase, transport, storage, and/or land application of procured materials, and developing regulations for new development to incorporate locally recycled organics in their landscape designs.

The program will also leverage a consultative approach to expanding waste reduction and diversion efforts in the community. A contractor will be sourced to conduct a City-wide waste characterization study. Data generated from the characterization will be used for emission calculations, bin enclosure and building design, waste generation

Community Services Group – Solid Waste Program
calculation, and most importantly will create a baseline for measuring the success of the City and IWMA outreach efforts. Findings from the Municipal Zero Waste Plan started in FY 2021-22 under the CivicSpark program will dictate needed signage and educational resources for internal use. As a result, a contractor will be hired to design educational media and print materials to help meet a 90% reduction in the amount of waste generated by municipal operations.

Other Operating Expenditures
Other operating expenditures includes a substantial amount of unspent Public Outreach and Advertising funds. Most public events were canceled in FY 2021-22 as COVID continued to impact social activities within the County. COVID also delayed waste-related infrastructure improvements within City facilities. With City offices again occupied, staff can complete accurate waste characterizations and purchase necessary equipment to ensure City facilities are in compliance with SB 1383 (bin systems, signage, instructional videos). FY 2022-23 funds are already being utilized to increase outreach at public events including recent purchases of trash related table games, giveaways made of postconsumer recycled content, improvements to public education booth, and permanent posters and signage for City facilities and events.

Additionally, printing and reproduction efforts such as the Utilities Resource magazine and Utility bill insert activities were forecasted but not published in the last fiscal year. These activities will resume in FY 2022-23 and the costs are again applicable to the fund.

The Data Processing Services account includes funds for a construction and demolition waste tracking software called Green Halo. The City’s contract with Green Halo was terminated in May 2022 after failed attempts to integrate the software with the existing Energov platform, thereby making the software ineffective.

Public Safety – Fire
Fire Department
A Year In Review
In FY 2021-22 the Fire Department staff made significant progress on work efforts impacting every program within the department and finished the fiscal year $109,000, or 0.89%, under budget. In Administration, staff continued to provide planning, directing, and evaluation of all program activities through department leadership, public information, personnel management, fiscal and contract management, strategic coordination, and grant efforts.

Emergency Response program personnel continued to focus on providing premier service to the community through all-risk response and training, which received significant improvement with the addition of the Fire Training Captain position early in the fiscal year. The department’s fire prevention program helped protect the life, property, and environment of the community through its fire & life safety inspection programs, fire plan reviews, and publication education efforts. These efforts were helped with the continued rollout of the self-inspection program allowing lowrisk occupancies to conduct inspections through a self-service option. Additionally, the Department significantly bolstered its ability to provide emergency management services to the City and community by adding a new fulltime Emergency Manager position to help improve the City and community’s readiness for a major emergency or disaster, manage critical planning efforts, and oversee hazard mitigation efforts. Additionally, the Fire Department coordinated several emergency management-related training offerings for City staff. Throughout the year the department’s fire apparatus services staff ensured the fire fleet (including both heavy apparatus equipment and fleet vehicles) remained in proper working order to ensure continuous service delivery to the community. Finally, the department implemented a new service program, the Mobile Crisis Unit, which successfully became operational in Quarter 4 of FY 2021-22. The Mobile Crisis Unit provides crisis support services to community members to improve the availability of local programs and help alleviate calls for service traditionally provided by public safety staff by handling low-acuity calls. Staffing remained a focus for the Fire Department in FY 2021-2022 as the staff filled 17 positions which represent nearly 27% of the department's workforce and conducted three promotional exams for newly promoted engineers, captains, and a battalion chief.

Accomplishments and Strategic Goal Updates
 Diversity, Equity, and Inclusion: In coordination with Public Works and Human Resources, continue to enhance the department’s diversity, equity, and inclusion through improvements to fire station facilities, firefighter recruitment and training. The department filled 17 positions and 11 promotional placements including one Battalion Chief, five Fire Captains, and five Fire Engineers. Of the 17 positions filled, four were filled by internal department staff and 13 were external department hires. Two of these positions were the new Fire Intern program which has a goal of improving department diversity by offering individuals an opportunity to learn more about a career in the fire service at an early age. This provided a great opportunity to improve the diversity of department staff which was successful. Human Resources was a critical partner in the success of these hirings. Public Works staff continue to work towards completing a study and plan development to improve the inclusivity of the fire station living quarters at Fire Stations 3 and 4. The anticipated completion date of that work effort is Quarter 4 of FY 2023-24.  Climate Action: In coordination with the Office of Sustainability, continue to reduce the department’s carbon footprint to support Climate Action through best practices and thoughtful replacement of department apparatus resources. Staff continues to seek opportunities to electrify operations to help reduce the carbon footprint left by the department’s operations. In FY 2021-22 staff was able to replace natural gas-powered ovens with electric units and purchase an e-bike for administrative staff to utilize for inner City meetings and travel. Staff also participates on the City’s Green team to help ensure the City can meet the current carbon neutrality goals. In FY 2022-23 staff will seek to replace apparatus and equipment that provides a lower carbon footprint than the replaced units.  Housing and Homelessness: In coordination with Community Development and Administration, implement mobile health care response model to connect services to unhoused residents and visitors in the City. Staff successfully rolled out the Mobile Crisis Unit in June 2022. This Unit functions is staffed by an

Public Safety – Fire
Emergency Medical Technician and contracted Mental Health Case Worker to respond to behavioral health and substance abuse crises to (1) help connect community members with existing services and (2) reduce the calls for service that historically have been handled by Fire Paramedic and Law Enforcement response, which typically is ill-suited to provide care for these types of incidents. In FY2022-23 staff will use response data to adjust the program as needed and work to partner with the County of San Luis Obispo to expand the program.
 Other Department Objectives: Continue the implementation of the five strategic directions identified in the Department’s Annual Operational Plan as part of the 5‐Year Strategic Plan by connecting with our community, continuously evaluate programs and service delivery, analyze relevant data to inform decision making, improve organizational culture, sustainability, and health, and support fiscal sustainability in department operation. Fire Department Staff continued to work through carrying out strategic directions found in the Department’s strategic plan. Some of the major work efforts and accomplishments in FY2022 included partnering with City Administration, and Parks & Recreation to bolster open space fuel reduction hazard mitigation efforts, improving the fire and life safety self-inspection program, improved cross training with dispatch and emergency response personnel, department policy streamlining and improvements, and expanded suppression training programs.

Challenges
The most significant challenge over FY 2021-22 was related to the staffing turnover. As previously discussed, the department conducted 17 position recruitments and filled an additional 11 promotional positions making up over 44% of the department’s staff. The staff time and attention required to facilitate these recruitments, placements, and subsequent training and onboarding impacted department productivity, most significantly related to finalizing the development of an updated department five-year Strategic Plan. Currently, the only vacancies within the department are related to firefighter positions within Emergency Response which will be addressed through a recruit academy to be held in FY 2022-23. At the completion of this Recruit Academy, staff anticipates the department to be fully staffed. Additionally, the current Fire Chief is retiring in the Fall of 2022, and onboarding the new Chief will be a focus for staff. The FY 2021-22 challenges related to staffing are not expected to continue in FY 2022-23, however, succession planning will be an essential focus to improve department resiliency through future turnover.

Another challenge staff encountered in FY 2021-22 was related to the activation of the Mobile Crisis Unit. Staff had originally hoped to have the program rolled out early in the fiscal year, however, encountered several challenges that delayed the commencement of the new service. Some obstacles included job description meet and confer obligations with the impacted labor group, securing the program vehicle, completing a request for proposal for contracted mental health services and securing a subsequent agreement with Transitions-Mental Health Association (TMHA), and finally the recruitment and hiring of the Mobile Crisis Unit Case Manager through the THMA agreement.

These challenges were overcome by June 2022 and the Unit began responding in mid-June.

Fiscally, the biggest challenges came from two areas, which are further discussed in the variance analysis section below. The first challenge area was related contract services for the servicing of the department’s “Plymovent” system which expels diesel exhaust at fire stations that are generated by the fire apparatus. The service and maintenance costs substantially exceeded the allocated budget. Much of these costs are not expected to continue in FY 2022-23, however, the current budget is likely still underfunded, and staff will address as needed for the 2023- 25 Financial Plan. Secondly, fuel costs increased at historic levels following the Russian invasion of Ukraine in February 2022 and impacted the department’s fuel budget which ended the year at 26% over budget. While down from the peak in July, the increase in fuel cost is expected to continue through FY 2022-23 and staff has requested carryover funding to address the anticipated budget shortfall.

Performance Measures
Table 29: Fire Performance Measures

Public Safety – Fire
Objective Measure 2021-22
Target
2021-22
Actual
Deliver Timely Emergency
Response to ensure rapid
care and hazard mitigation.21
Meet the Response Time objective as defined by General
Plan
Safety Element of 4 minutes to 95% of all lights-and-siren emergencies in the City.
4:00 6:02
Meet the Total Response Time (TRT) goal
of 7 minutes or less to 90% of all lights-and-siren
emergencies in the City as defined by the Department’s
Master Plan. TRT Includes Call Processing Time, Turnout Time, and Travel Time.
7:00 8:44
Meet the Call Processing Time goal
of 1 minute or less to 90% of all lights-and-siren
emergencies in the City as part of TRT.
1:00 1:37
Meet the Turnout Time goal
of 2 minutes or less to 90% of all lights-and-siren
emergencies in the City as part of TRT.
2:00 3:00
Meet the Travel Time goal
of 4 minutes or less to 90% of all lights-and-siren
emergencies in the City as part of TRT.
4:00 5:34
Provide timely service to the
development community.
% of Fire Department Development Review activities
completed within published cycle times. 80% 61%22
Variance Analysis
Overall, the department was able to finish the year was minimal savings of less than 1%. The primary drivers of these savings are listed in the descriptions below for the four different expenditure categories.

Table 30: Fire Variance Analysis

21 While the Fire Department did not meet the response time performance targets in 2021-22, the target remains unchanged in 2022-23 due to National Fire Protection Association recommended standards. The fire department is working to implement process improvements based on data analysis to help improve turnout times. Additionally, COVID-19 call screening and additional PPE requirements have impacted the speed of both call processing times and turnout times. Fire department staff will continue to work with Police Department staff to help improve call processing time. Travel time is the most difficult time to improve in the short term as they are impacted by road construction, traffic, roadway design changes, and expanded response zones due to annexations in the southern end of the City.
22 Fire Prevention staff encountered significant staffing challenges that impacted productivity levels related to timely development plan review. The Department’s most senior Fire Inspector retired in December 2021 and the position was filled two months later with an entry-level inspector who had previously been the program’s Administrative Assistant. The Administrative Assistant vacancy was filled at the End of March. Onboarding and outside state fire marshal course training new Inspectors, CUPA and Inspector 1, also impacted review and inspection activity. Even while fully staffed the department struggled to meet the performance measure of 80% and was authorized to hire a half-time fire inspector to assist with workload capacity. The ½ time inspector began in July 2022. Since the hiring, the department’s performance has increased significantly. As of August 18, 2022, the staff is at completing 93% of development review activities within published cycle times.

Public Safety – Fire
Salaries and Benefits – Several factors led to the negative variance related to Staffing and Benefits for the Fire Department in FY 2021-22. The largest driver occurred in the Emergency Response program, which absorbs nearly 80% of the department’s annual operating budget. The overage in emergency response had been offset by salary savings experienced in other department cost centers. The variance was driven by negotiated cost of living and equity adjustments provided to staff after the FY 2021-22 budget was set. Fortunately, the City included a contingency budget for this increase within the Finance Non-Departmental budget which will offset any overages.

Additionally, departments did not budget for the increases related to the employee appreciation leave time that was granted to all employees in December 2021. In emergency response, this leave generated a cost due to the overtime required to backfill employees who utilized the leave benefit and cash out cost for employees who were not able to utilize the leave time before June 2022. Other drivers included workers’ compensation and vacancy-related overtime backfill cost. Staff does not expect this level of variance in FY2022-23 as the current budget incorporated the negotiated wage increases and staffing levels have improved.

Contract Services – The primary driver for savings in contract services was related to saving in the Mobile Crisis Unit mental health case manager agreement. Staff had budgeted for a full year of services, however, due to delays in program implementation, the contracted case manager did not begin until June 2022 resulting in significant savings.

These savings helped offset some contract services overages in different programs including Fire Administration which incurred an unbudgeted one-time cost to support the County Fire Chief’s Association’s effort to complete a ground ambulance feasibility study, and the Fire Station Facilities Support cost center which encountered a significant overage in the fire station exhaust removal (Plymovent) system due to unanticipated maintenance and servicing costs. While the feasibility study fee was a one-time cost and not expected to continue staff anticipates that the plymovent system will require a budget increase and will monitor and adjust as needed for the 2023-25 Financial Plan.

Other Operating Expenses – Moderate savings were observed in most cost centers’ “Other Operating Expenses” with significant savings coming from the Mobile Crisis Unit program which was encountered due to the delayed program implementation. The Mobile Crisis Unit budget was developed for a full year of service and the program did not fully roll out until June of 2022. Other savings can be attributed to training for Emergency Response personnel due to specialized team personnel being out on workers’ compensation leave and unable to attend training.

Additionally, due to low staffing levels encountered in the first two quarters of the fiscal year, volunteer training opportunities were prevented due to the department's minimum available staffing policies. Department staff does not anticipate significant Other Operating Expenses savings in FY 2022-23 but will continue to monitor activity and adjust as needed for the 2023-25 Financial Plan.

Utilities – Electric Service savings was the primary driver for the positive variance related to Fire Department utilities.

Staff observed 30% savings in that account due to recent fire station lighting upgrades to more efficient sighting systems and paired with lower energy rates achieved through the Central Coast Community Energy (CCCE) program.

The department experienced slight savings in sewer services and slight overages in water and natural gas services.

Staff will continue to use actual costs to inform any needed budgetary adjustments for the 2023-25 financial plan.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing $ 10,783,935 $ 10,950,943 $ 11,081,955 $ (131,012) -1% $ 10,541,887 Contract Services $ 129,077 $ 310,928 $ 214,357 $ 96,572 31% $ 267,662 Other Operating Expenses $ 610,500 $ 812,470 $ 690,450 $ 122,020 15% $ 651,935 Utilities $ 97,687 $ 117,687 $ 95,985 $ 21,702 18% $ 123,874 TOTAL $ 11,621,200 $ 12,192,029 $ 12,082,748 $ 109,281 1% $ 11,585,358 Fire FY 2021-22

Public Safety – Fire
Fire Department Revenue
Table 31: Fire Department Revenue
The largest contributor to the Fire Department’s revenue variance was related to the CUPA Inspection program which charges fees for service due to increased inspection activity. Additionally, staff encountered several underground storage tank replacements that occurred at fuel stations throughout the City which incur an additional fee within the CUPA program. Fire Prevention staff inspection activity also was higher than forecasted which resulted in additional Fire Plan Check & Inspection fee revenue. Finally, the department was able to secure funding through the County of San Luis Obispo’s Nuclear Power Program to offset increases in expenditure budget used to purchase Emergency Operations Center Equipment. This revenue was added to the “Other Fire Department Revenue” account which caused a significant variance at that account level due to the originally forecasted revenue.

Budget Actual Variance %
Fire Plan Check & Inspection $ 361,415 $ 368,800 $ 379,865 $ 11,065 103.0% $ 350,000 R1 Inspection Fees $ 327,088 $ 320,000 $ 325,663 $ 5,663 101.8% $ 351,000 Cal Poly Fire Services $ 315,241 $ 273,567 $ 273,567 $ - 100.0% $ 361,684 Medical ER Recovery $ 198,103 $ 201,993 $ 201,991 $ (2) 100.0% $ 216,938 CUPA Inspection Fees $ 146,953 $ 160,000 $ 182,644 $ 22,644 114.2% $ 172,800 Fire Department Permits $ 101,572 $ 100,000 $ 98,529 $ (1,471) 98.5% $ 108,000 Fire Alarm Permits $ 8,962 $ 11,932 $ 10,994 $ (938) 92.1% $ 10,010 Other Fire Department Revenue $ 41,426 $ 7,148 $ 21,195 $ 14,047 296.5% $ 5,890 Total $ 1,500,759 $ 1,443,440 $ 1,494,447 $ 51,008 104% $ 1,576,322 Fire Department Revenue FY 21 Actual FY 2021-2022
FY 23
Forecasted
Budget

Public Safety – Police
Police Department
A Year In Review
Over the past year, the department focused on the following main areas: enhanced recruitment, maintaining COVID19 health and safety, employee wellness, and community partnerships. In FY 2021-22, a total of twelve employees left the department, 75% of these vacancies were police officer positions. As a response, the department revamped recruitment efforts to attract the best candidates available, and as a result twelve positions were filled (this includes sworn and civilian positions).

The department also focused efforts on maintaining employee health during COVID-19. The priority was keeping employees healthy and staffing shifts appropriate; however, this was not always possible as employees contracted COVID-19. With officers unable to work due to being sick and/or quarantining, this required increased overtime and contributed to officer fatigue.

Department staff has also worked to bolster efforts with employee wellness and peer support after the tragic murder of Detective Benedetti. The Peer Support Team provided several resources to employees, staff encouraged others to seek professional services, and many employees are still actively benefitting from these services.

In addition, the department has continued to enhance community relationships by strengthening programs such as the PAC (Police Advisory Committee) and the Police Roundtable. Integrating members of the community in these programs helps foster mutual respect and understanding, it also provides an opportunity for open communication and feedback.

Lastly, the department worked closely with the City Homelessness Response Manager, other City departments, Transitions Mental Health, County Behavioral Health, and the Sheriff’s department to address ongoing concerns with homelessness and the resulting impacts on the community.

Accomplishments and Strategic Goal Updates
 Economic Stability:
o Despite staffing challenges, the police department continued to provide a public safety presence in the downtown during daytime hours. Nighttime coverage was limited due to minimum staffing needs in patrol.
o The department continued to work with Transitions Mental Health (TMHA) to hire two Mental Health Clinicians for its Community Action Team (CAT).. A new contract position was created in the Police Department titled “Homeless Outreach Services Coordinator”, to help with training and oversight of the CAT mental health clinicians and streamline communication between TMHA and the police department.
 Housing:
o A contract was awarded to TMHA for a second Mental Health Clinician position. THMA is currently working to identify qualified candidates; the initial interviews were unsuccessful. o The department has continued to staff one CAT officer in the field partnered with a part-time TMHA resource to provide ongoing homeless outreach services.  Climate Action:
o The department worked to address traffic safety issues by conducting numerous operations under the FY 2021-22 Office of Traffic Safety Grant.
o Staff utilized social media to encourage and educate the community on safe driving behavior.  Other Accomplishments:
o The Racial and Identity Profiling ACT (RIPA) was formed as part of AB953. The goal of RIPA is to eliminate racial profiling and improve diversity and racial and identity sensitivity in law enforcement.

Law enforcement agencies are required to report data to the Department of Justice on an annual

Public Safety – Police
basis. The department started data collection in January 2022 and the first reporting period will be available for review in spring of 2023.
o With the help of funding from the Office of Traffic Safety Grant, staff started the implementation of electronic citation and collision data collection (E-Citation and E-Collision). Currently, all officers are using the E-Collision software and patrol will be utilizing E-Citation in the future. The benefits of using E-Citation software are increasing officer productivity and accuracy, fewer citations are dismissed for errors, and decreases data entry time for Records Clerks. o A Records Lead position was created to provide a backup for the Records Supervisor position and create more efficiencies in the Records Division.
o The department successfully navigated COVID-19 without compromising service to the community. o The department purchased and is implementing a community engagement tool called Spydr Technology which provides automated customer service and survey tools for community members.

The value of Spydr is this will allow the department to collect and analyze real and timely feedback from those using police services at the time the service is rendered. The software is still in the implementation phase, but data should be available in the coming months.

Challenges
Over the last twelve months, the Police Department experienced staffing challenges which adversely affected scheduling in both patrol and dispatch. The vacancies were a result of medical retirements, employees relocating, career retirements, and employees out due to injuries. The department hired nine police officers and two dispatchers during FY 2021-22.

Over the last year, out of a total of 60 sworn positions, the department lost the equivalent of twelve fulltime officers in leave time (including sick, workers’ compensation leave, vacation) and an additional six officers in vacant positions.

This is about 30% of the department's sworn workforce and presented a significant challenge in providing public safety services to the community while still maintaining employee health and resiliency. Like the City of San Luis Obispo, agencies across the nation are struggling to fill positions in law enforcement and have started using hiring incentives to try and attract qualified candidates. Staff is committed to recruiting and retaining qualified candidates that share a common vision with the department and City as a whole.

Performance Measures
Table 32: Police Performance Measures
Objective Measure 2021-22 Target 2021-22 Actual
Reduce Crime # of total Part I Crime by year.23 1,825 2,069 Provide safe
roadways for
pedestrians,
vehicles, and
bicyclists.
# of total traffic collisions.24
Vehicle: 500 399
Pedestrian: 30 32
Bicycle: 42 36
# of targeted enforcement operations
conducted under the Office of Traffic
Safety Grant25
DUI Checkpoints: 2 2
DUI Saturation Patrols:
30 28

23 Part 1 Crimes include: homicide, forcible rape, robbery, aggravated assault, burglary, and motor vehicle theft. Figures shown represent calendar year 2021.
24 Traffic Collision data is shown by calendar year.
25 Office of Traffic Safety grant is on a federal fiscal year (Oct – Sept). Target figures for FY 21-22 were based on the previous year’s grant. Staff completed all grant objectives for the current OTS grant.

Public Safety – Police
Objective Measure 2021-22 Target 2021-22 Actual
Traffic Enforcement
Operations: 15 8
Distracted Driving: 7 7
Bicycle & Pedestrian
Enforcement: 6 5
Reduce Homeless
related Calls for
Service through
proactive
engagement.
# calls related to homelessness26 7200 7441
# of unique individuals contacted by
CAT 600 578
# of Family & Agency Reunification27 60 17
# of Local Permanent Housing28 28 3
# of major camp cleanups 10 13
# of Mental Health/Substance Abuse
Treatment Referrals 160 127
Variance Analysis
Table 33: Police Variance Analysis
Salaries and Benefits –
As reflected in the chart above, expenditures for total staffing ended the fiscal year over budget (101%). Historically, over the past 20 years, the department has not exceeded its total staffing budgeted amounts, but there were unprecedented circumstances that contributed to the overage in FY 2021-22. The department experienced the death of Luca Benedetti in May 2021, only months before the department started FY 2021-22. Department staff did their best to cope with all the challenges related to this loss; unfortunately, many officers experienced challenges returning to work. As a result, in FY 2021-22, Workers’ Compensation Leave increased 58% from the previous year.

During the year, there were 16 police officers out on Workers’ Compensation (WC) Leave, some were out all year while others were out sporadically. This totaled over 11,700 hours in WC leave which was a significant increase from prior years and because of this, staff had to fill scheduling gaps with overtime. The Patrol schedule is completed in advance and anytime an officer is out unexpectantly (sick leave, WC leave, etc.) the schedule must be adjusted to cover the shift which normally results in overtime. Overtime hours worked related to shift coverage increased 18% compared to last fiscal year.

26 All stats related to homelessness are based on calendar year. 27 & 6
Actuals for Family Reunification and Local Permanent Housing were lower than expected. Impacts of COVID were still being experienced in the community; there was a decrease in permanent housing available as well as fewer homeless individuals interested in reunification. Due to staffing shortages in patrol, there was only one CAT officer working during the last part of the fiscal year, in addition, the Mental Health Clinician resigned in early April 2022.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing $ 12,885,932 $ 13,717,392 $ 13,821,611 $ (104,219) -1% $ 14,925,298 Contract Services $ 561,899 $ 936,966 $ 763,754 $ 173,211 18% $ 838,194 Other Operating Expenses $ 338,538 $ 592,904 $ 517,011 $ 75,893 13% $ 415,640 Utilities $ 116,037 $ 147,550 $ 130,184 $ 17,366 12% $ 145,650 TOTAL $ 13,902,407 $ 15,394,812 $ 15,232,560 $ 162,252 1% $ 16,324,782 Police FY 2021-22

Public Safety – Police
Table 34: Workers Compensation Leave Hours by FY
Worker’s Compensation Leave Hours by FY
FY 2019-20 FY 20-21 FY 21-22 % Increase from last FY
3,452 7,439 11,722 58%
Table 35: Overtime Hours for Shift Coverage by FY
Overtime Hours for Shift Coverage by FY
FY 2019-20 FY 20-21 FY 21-22 % Increase from last FY
3,338 5,605 6,613 18%
Total overtime expended for the year was $1.3M, which was about $600K over budget and 13.5% higher than the previous year. In addition to more overtime hours worked, there was a 5% salary increase to all Police Officer Association members that was not included in the department budget. Fortunately, the City included a contingency budget for this increase within the Finance Non-Departmental budget which will offset the Police Department overage.

Table 36: Total Overtime Expenditures by FY
Total Overtime Expenditures by FY
FY 2019-20 FY 20-21 FY 21-22 % Increase from last FY
$994,462 $1,150,966 $1,307,379 13.5%
Other factors that impacted staffing costs included the approval of two officer over-hire positions. The over-hire positions were to help offset vacancies from officers out on WC leave and to fill shifts that the department was desperately trying to fill. Existing officers filling shifts were feeling overworked and fatigued as overtime increased.

In addition to officers out on leave, there were vacant positions as well. During FY 2021-22, there were a total of nine officer positions hired. Hiring of lateral officers and cadets occurred at a very fast pace, which resulted in very minimal salary savings. Patrol positions remained unfilled after hiring due to field training which typically takes about four to six months to complete before an officer can work independently on a shift. Cadet hires took longer to onboard and fill patrol shifts due to attending the academy.

Lastly, costs associated with hiring incentives were covered within the department’s existing salary budget, due to saving created by vacancies. For the police department, this totaled over $68,000. This included incentives for new dispatchers and police officers hired during the fiscal year.

Contract Services –
The Administration and Investigations divisions ended the year with savings in Contract Services. The department budgeted to hire a second mental health clinician (through an agreement with TMHA) to join the Community Action Team; however, Transitions Mental Health has had challenges hiring and therefore the position continues to be unfilled. In addition, there was a Significant Operating Budget Change submitted by City Administration to cover police staffing costs related to Cannabis. The funding was put into a non-staffing account (Other Contract Services); however, because the funds were intended to cover staff time, the department will request that this funding be moved to a more appropriate staffing account instead.

Public Safety – Police
Other Operating Expenses –
Savings in the Other Operating Expenses category were from various cost centers. In late February, the department received City Manager approval for a hotel voucher program to be overseen by the Homelessness Response Manager.

The program has not yet been implemented therefore savings were incurred. Because of this savings, the department will request carry over in anticipation of the program (or a similar program) to start in the new fiscal year. The department budgeted to purchase replacement bicycles for the downtown bike team; however, staff used existing budget and also funding from Ventures and Contingencies to purchase five electric bicycles instead. Department staff worked with the City’s Sustainability Manager to submit for reimbursement for the E-Bikes through the Central Coast Community Energy program, unfortunately the request was denied. Lastly, the department realized savings in data processing services related to the County’s Criminal Justice Information System. Actual costs for the year were less than anticipated; rates are determined by the County and rates per user decreased.

Utilities –
The department had savings in Utilities mainly due to PG&E charges. Other utilities such as sewer and water were slightly over expended, so electric service savings helped offset these overages. It is challenging to budget accurately for utilities, but staff will monitor expenditures and adjust the budget accordingly next fiscal year.

Police Department Revenue
Table 37: Police Department Revenue
Overall department revenue fell short about 9%. The department’s Other Police Revenue account often acts as a pass through for miscellaneous revenue; actuals received are more in line with last fiscal year so staff’s initial budget projection may have been too high. This will be adjusted for FY 2022-23 at the mid-year review. Administrative Citation revenue was less than projected due to a decrease in the amount of noise related administrative citations issued which directly correlates to the reduction in Noise calls for the year. Revenue related to Alarms were low as some companies were still dealing with the effects of COVID; companies went out of business or could not afford to pay false alarm or permit fees which were sent to collections. Permit revenue was also lower than expected but is slowly starting to climb back to pre-COVID amounts; revenue received in FY 21-22 doubled from the previous year.

Budget Actual Variance %
Other Police Revenue $ 217,369 $ 259,639 $ 212,914 $ (46,725) 82.0% $ 250,000 Administrative Citations - Safety $ 136,627 $ 125,000 $ 95,204 $ (29,796) 76.2% $ 152,833 Alarm Permits - Contract (Police) $ 107,717 $ 90,000 $ 80,204 $ (9,796) 89.1% $ 90,000 Police Issued Parking Fines $ 61,057 $ 75,000 $ 80,969 $ 5,969 108.0% $ 70,000 Tobacco Permits $ 29,247 $ 29,000 $ 28,421 $ (579) 98.0% $ 29,000 DUI Cost Recovery $ 18,968 $ 16,417 $ 25,622 $ 9,205 156.1% $ 16,417 Tow Release Fees $ 7,441 $ 9,000 $ 15,824 $ 6,824 175.8% $ 9,000 Police Department Permits $ 2,635 $ 7,511 $ 5,027 $ (2,484) 66.9% $ 7,511 Collision Investigation $ 1,848 $ 3,000 $ 1,139 $ (1,861) 38.0% $ 3,000 Accident Reports $ 1,977 $ 2,000 $ 4,333 $ 2,333 216.6% $ 3,400 Witness Fees $ 1,650 $ 1,606 $ 4,400 $ 2,794 274.0% $ 1,606 Second Response Fees $ - $ 1,071 $ 1,437 $ 366 134.1% $ 1,200 Property Release Fees $ 33 $ 500 $ - $ (500) 0.0% $ (1,642) Miscellaneous Revenue $ 13,837 $ - $ 6,417 $ 6,417 $ -
Total $ 600,406 $ 619,744 $ 561,909 $ (57,835) 91% $ 632,325 Police Department Revenue FY 21 Actual FY 2021-2022 FY 23 Forecasted Budget

Utilities – Water and Sewer Funds
59 Utilities Department
The Utilities Department oversees two Enterprise Funds, an Agency Fund, and the Solid Waste and Recycling program in the General Fund. The Solid Waste and Recycling budget, while managed by the Utilities Department, is a General Fund program, funded by AB 939 and Franchise Fee funding (see Solid Waste write-up). In addition to the Water and Sewer Funds, the Utilities Department also manages the Whale Rock Fund, an agency fund, which is overseen by the Whale Rock Commission. The City’s share of operational expenses and CIP contributions for Whale Rock operations are budgeted for in the Water Fund’s Source of Supply budget.

Table 38: Utilities Funding and Programs
Fund Type of Fund Programs Funded Notes
Water
Fund Enterprise Fund
Administration and Engineering
Source of Supply
Water Treatment
Water Distribution
Water Resources
Utility Billing
The City’s water operations are paid for by
water service rate revenues and cover all
costs for operations, maintenance,
infrastructure replacement, and debt service.

Taxes, including utility user taxes, do not
support these services.

Sewer
Fund Enterprise Fund
Administration and Engineering
Wastewater Collection
Environmental Programs
Water Resource Recovery
Water Quality Lab
Utility Billing
The City’s sewer operations are paid for by
sewer service rate revenues and cover all
costs for operations, maintenance,
infrastructure replacement, and debt service.

Taxes, including utility user taxes, do not
support these services.

Whale
Rock Fund Agency Fund Reservoir Operations The Whale Rock Fund is overseen by the Whale Rock Commission.

General
Fund
(AB939)
General Fund Solid Waste and Recycling
The Solid Waste program is paid for by AB939
and Franchise fee funding.. AB939 funds may
only be used to pay for activities that divert
waste from the landfill so any funds remaining
at the end of the year must remain within the
Solid Waste program budget.

A Year in Review
The Department’s Enterprise Funds ended FY 2021-22 with significant expenditure variances under budget and revenue variances over budget. Revenues in both Water and Sewer were higher than anticipated due to higher irrigation demand associated with a dry winter and development impact fees coming in higher than anticipated.

During FY 2021-22 water consumption increased by 5.56% compared to FY 2020-21. Operating expenditures were also underspent in both Funds. The Water Fund was $1.9 million under budget, and the Sewer Fund was $1.2 million under budget. Further details on these variances are discussed below.

The Utilities Department concluded FY 2021-22 having provided high-quality services with limited interruption while navigating post-pandemic normalization, inflation and supply chain disruptions, and drought-related challenges. The energy efficiency upgrades at the Water Treatment Plant have been completed, and the Water Resource Recovery Facility upgrade is scheduled to be substantially completed by December 2023. The Utilities Department remains in good financial condition, but due to high inflation and above-inflation-rate increases in the chemical and electricity markets, the Department anticipates the need for more substantial rate increases in the next Financial Plan. At the WTP the energy efficiency improvements were offset by a 20% PGE rate increase. These WTP energy efficiency improvements do not offset the 20% increase that we also saw to our source water pumping which is far more

Utilities – Water and Sewer Funds
60 expensive than WTP energy use. Lastly, once the new systems at the Water Resource Recovery Facility (WRRF) are commissioned and a new baseline has been established, staff will better understand how the electrical rate increases will impact the operating budget moving forward . While chemical demands at the new WRRF will be significantly reduced, staff anticipate increased electrical demands with the new regulatory-driven process improvements.

Accomplishments and Strategic Goal Updates
Accomplishments

1. Completed installation of a Tesla backup battery at the Water Treatment Plant.

2. Finalized drafting of Groundwater Sustainability Plan and submitted to State Water Board for review.

3. Replaced Reservoir 1 (treated water storage tank) floating cover.

4. Replaced Terrace Hill Tank with a low-cost Pressure Reducing Station.

5. Completed water treatment plant energy efficiency and ozone system upgrade project.

6. Significant progress of the SLO Water Plus project, located at the WRRF, including the new membrane bioreactor and ultraviolet disinfection system, and a successful cutover to the new facility PG&E power service line.

7. Completed construction of sewer and water pipeline system upgrades to serve San Luis Ranch.

8. Completed construction of site infrastructure and sewer lift station needed to develop Avila Ranch.

9. Completed Phase 1 (study phase) of Prop 1 Groundwater Contamination Study.

10. Application started for the Prop 1 Groundwater Grant Program for additional funding ($5,877,765) for PCE Plume Characterization

11. Staff applied for and received funding from the State for past due water and wastewater bills during the state moratorium in which cities were unable to shutoff water due to nonpayment. Approximately $221,000 was received from the state for past-due water bills in FY 21-22 and $146,000 was received from the state for past-due wastewater bills and will be recorded and applied to customer accounts in FY 2022-23.

12. 277 acre-feet of recycled water delivered (5.5% of total City water use).

13. 81 events staffed for outreach and community engagement, including facility tours, educational visits at local schools, and farmers markets.

14. 69 shutoffs for non-payment April – June 2022, when the Department returned to shutoffs once the state moratorium was lifted (less than 0.5% of all water/wastewater customers)

15. 5+ years of water supply available, based on FY 2021-22 consumption

16. Met/exceeded human health requirement of San Luis Obispo Creek monitoring program due to successful implementation of new and ongoing best management practices.

17. Expanded partnership with California Polytechnic University’s Sustainable Utilities Research and Education program at the WRRF, including an award-winning National Science Foundation funded research pilot led by staff from the State University of New York.

18. Completion of a near real-time, Department-wide energy dashboard designed to reduce demand and demand/time of use electricity charges.

Challenges
The challenges that the Utilities Department experienced in FY 2021-22 can broadly be summarized as staffing shortages and transitions, post-pandemic normalization, inflation, supply chain disruptions, and drought-related challenges.

Post-pandemic normalization including staffing transitions

Utilities – Water and Sewer Funds
61 There are three predominant ways in which Utilities operations have normalized in FY 2021-22 as the City eases out of the COVID-19 pandemic.

1. The distribution of water use amongst customer classes has returned to a pre-pandemic norm as businesses have reopened, remote work has decreased, schools have opened, and Cal Poly has resumed in-person classes.

2. The California State moratorium on water shutoffs for non-payment expired on December 31, 2021.

3. The Utilities Department and its contractors struggled to recruit qualified candidates to address employee turnover during the pandemic. Recruitment and hiring have largely returned to pre-pandemic norms.

The first two items resulted in uncertainty around revenues and substantial work efforts around tracking and adjusting revenue projections. As the City continues to ease out of the COVID-19 pandemic, the Utilities Department anticipates that revenues will stabilize to pre-pandemic norms. The most notable impacts of the third item were to the City’s contract meter reading operations, where inadequate staffing levels resulted in meters not being read on time during multiple billing periods in FY 2021-22. Additionally, the Utilities Department had 20 new hires or promotions (28% of department staff) in FY 2021-22. Consequently, Utilities had to operate significant portions of the year below planned staffing levels. This resulted in more work hours in call back, overtime, and more management time dedicated to staff training to ensure adequate staffing coverage and job skills to fulfill program requirements. Recruitment issues appear to have lessened since the start of the pandemic for the Utilities Department and its contractors.

Inflation and Supply Chain Interruptions
During FY 2021-22, there were substantial increases in the cost of operations that were mostly tied to rising material costs, supply chain disruptions, and inflation.

The most substantial increases in operating costs were chemical and electricity service cost increases. For chemicals, it is typical to see five to ten percent price increases on an annual basis. In FY 2021-22, several chemicals exceeded the aforementioned typical price increase—the highest being 106 percent of budget. Given the uncharacteristically high increase in chemical prices, the City restricted the use of funds in other accounts to offset the increases where possible.

Table 39: Chemical Price Increases
Chemical 2021-22 Contract 2021-22 Mid-Year Increase 2022-23 Contract* % Increase Alum $336 ton $425 ton $450 ton +34%
Fluoride $1,760 ton $3,211.40 ton +82%
Chlorine (Cl2) $0.68 gal $1.13 gal $1.40 gal +106%
Sodium Hydroxide (NaOH) $0.76 gal $1.20 gal $1.28 gal +68% Polymer $0.68 lb $0.95 lb +40%
Liquid Oxygen (Lox) $1.28 gal $1.30 gal +2%
*One year contract with option to re-negotiate in 6 months due to volatile market.

Similarly, the City’s non-Community Choice Energy operations (facilities located outside of City limits) had a 20 percent or higher increase in electricity service costs. Fortunately, these increases were phased in, and were able to be accommodated due to conservative budgeting, staff’s agile and data-centric operational strategies, and cost savings from recent energy efficiency improvements at the Water Treatment Plant.

Several indices corroborate what the Utilities Department is seeing reflected in the cost of operations. The Consumer Price Index, for all items, reflects a 12-month increase of 8.54% increase in May 2022. However, the Municipal Cost Index is likely more indicative of true cost increases and reflects a 12-month increase of 12.45% in May 2022.

Utilities – Water and Sewer Funds
62 Table 39b: Index Comparison
Index 12-month % change
(as of May 2022)
12-month % change
(3-year average from 2019-2021)
Construction Cost Index 10.46% 3.23%
Consumer Price Index 8.54% 2.36%
Municipal Cost Index 12.45% 3.04%
Producer Price Index 21.75% 3.88%
Drought-Related Challenges
On March 28, 2022, Governor Newsom issued an executive order on statewide drought conditions requiring that California’s urban water suppliers implement the water saving measures outlined in Level 2 of their Water Shortage Contingency Plans. Examples of Level 2 actions for the City include but are not limited to:

1. Prohibiting irrigation between 7:00 AM and 7:00 PM

2. Increasing water waste patrols

3. Implementing rebate programs

4. Hosting workshops on effective irrigation practices

5. Conducting water use surveys
In anticipation of these required actions, the City began ramping up water conservation-related work. Impacts to Water and Sewer as a result of drought related actions include:

1. A reduction in water sales revenue as the community curtails consumption

2. An increase in wastewater treatment and conveyance costs as the concentration of waste in the wastewater increases

3. Costs associated with increased public outreach around water conservation and drought

4. The hiring of additional supplemental staff, which was approved as part of the budget supplement, to support increased workloads
Subsequent to the 2012-2015 drought, the City adopted water and sewer rate structures to include higher base fees to minimize fluctuations in revenue due to year-to-year variability in water consumption. Interestingly, water consumption never returned to levels experienced before 2012, as many of the conservation efforts seen during that time period were more permanent in nature, including changes to landscape. In conjunction with water conservation efforts approved in the FY22-23 Adopted Supplemental Budget, and a statewide ban on the irrigation of “nonfunctional turf” for commercial, industrial, and institutional customers, the above actions are a summary of the City’s drought response.

The financial impacts of the drought were not fully realized in FY 2021-22 and are anticipated to continue to impact operations in FY 2022-23. Should the drought worsen, or the State implement additional conservation measures, revenues could be further reduced and require reductions in capital spending, operational reductions, or rate increases to offset lost revenues.

Utilities – Water and Sewer Funds
63 Performance Measures
Table 40: Performance Measures
Objective Measure 2021-22
Target
2021-22 Actuals
Manage Assets Responsibly &
Transparently
Grant and partnership dollars to be obtained to
offset rates29 $4,454,168 $2,303,891
Minimize number of Customers Shut-Off for
Nonpayment30 500 69
Average Infrastructure Asset Age (years)31 20.42 20.35
Connecting the Community to
High Quality & Reliable Service
# Unplanned Service Interruptions32 0 84
# of Sewer Lateral Replacements including Offsets 100 135 Recycled Water Delivered (AF) 300 277
Foster Leadership, productivity,
and opportunity for personal and
professional growth. % of New Hire Safety Trainings Conducted 100%33 100% Provide Coworkers and the
Community with Information &
Opportunities to Participate in
Decisions that Impact them
Public Outreach: # of Communications with the
Community34 170 287
Table 40-a: Utilities - City Manager Approved Carryover Budget Sewer Fund: 2021-22 Carryover Budget Amount
Temporary Salaries (Water Resource Recovery Operator) $ 16,394 National Pollutant Discharges Elimination System Permit $ 90,000 Contract Wastewater Collection System Operator $ 90,000 Total $ 196,394
Water Fund: 2021-22 Carryover Budget Amount
Legal Services – Water Rights Licensing $ 19,600
Other Contract Services – Recycled Water Program/Groundwater Expansion $ 41,527 Total $ 61,127

29 Based on reimbursement of actual project costs as of August 2022. $4,454,168 was initially expected in FY 2021- 22 but due to project timing the shortfall is expected to be captured in FY 2022-23. 30 The state moratorium on shut-offs was lifted in December 2021. In 2018-2019 (a typical year), there were 533 shut-offs for non-payment.
31 Average asset age from City fixed assets data. This should decrease each year as assets are replaced. 32 Includes water main and service line outages, and sanitary sewer overflows. While the goal is to have zero unplanned service interruptions, the City sees 60-80 unplanned interruptions each year do to aging infrastructure.

Most of these interruptions are related to water service line leaks which only impact a single customer. 33 Goal is to have all safety trainings conducted for all new employees within their first three months of employment.
34 Includes Facebook posts, blog posts, email bulletins, groundbreaking events, quarterly project reports, the Resource, website news articles, and bill inserts.

Utilities – Water and Sewer Funds
64 Water Fund
Water Fund - Expenditure Analysis
Table 41: Water Fund - Expenditure Summary
Salaries and Benefits –Salaries and benefits within the Water Fund were underspent by approximately $345,000 or 6% during FY 2021-22. These savings were largely the result of vacancies at the City’s Water Treatment Plant and within administrative functions of the Utilities Department. The Water Treatment Plant also underspent its overtime budget, which had been inflated in comparison with prior years in order to account for anticipated overtime related to the Water Treatment Plant Energy Efficiency Project. The addition of a Water Treatment Plant Operator FTE part way through the Fiscal Year also assisted in reduced shift coverage and overtime expenses.

Contract Services – Contract Services Budget is set aside for miscellaneous consulting services, ongoing contracts, and specialized professional services. Most of the funding in this account is used for engineering, legal, or other related professional services for unplanned issues that may arise during the year. These services were not required in the volume anticipated this year and were not fully utilized.

Other Operating Expenses –Approximately $1 million of the $1.38 million unspent in the other operating expenses accounts can be attributed to the City's water supply account. This account funds costs related to the Salinas, Nacimiento, and Whale Rock Reservoirs. The water supply account represents about half of the entire water fund's operational spending, exceeding $10 million annually. The entirety of the amount unspent in the water supply account is tied to variable electricity costs for the Nacimiento Reservoir. This discrepancy can be summarized by the following:

1. $500,000 was carried over from FY 2020-21 for Nacimiento electrical pumping costs when the Nacimiento pipeline was offline for 4.5 months. This funding was not utilized in FY 2021-22.

2. $250,000 was credited to the City by the County in what is known as the "Nacimiento True Up Payment" where the City is refunded for Nacimiento operating costs by the County of San Luis Obispo based on actual expenditures compared to budgeted expenditures within the prior fiscal year.

3. $250,000 was a result of Nacimiento electrical pumping charges ending the year under budget. Nacimiento pumping charges are variable in nature and impacted by time-of-day delivery and the City’s overall source water strategy. While the City was able to utilize Nacimiento for most of its source water, the total annual pumping cost was less than originally projected.

In addition to the unspent funding outlined above, the water fund did not spend approximately $73,000 in public outreach funding. This was partially due to the vacancy of the Community Services Group Communication Coordinator for three quarters of the fiscal year and the department strategically setting this funding aside as a contingency in case of continued escalation in chemical prices. This funding was not ultimately required to offset chemical price increases and the water fund saved an additional $79,000 in projected chemical costs through optimization of treatment processes at the City’s Water Treatment Plant and within the recycled water portion of the Water Resources Recovery Facility.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing * $ 4,142,776 $ 5,551,424 $ 5,204,820 $ 346,604 7% $ 4,961,606 Contract Services $ 391,237 $ 765,881 $ 704,427 $ 61,454 9% $ 665,420 Other Operating Expenses $ 10,312,986 $ 12,138,663 $ 10,759,699 $ 1,378,964 13% $ 12,175,243 Utilities $ 564,395 $ 679,072 $ 534,005 $ 145,066 $ 691,085 Transfers to General Fund $ 2,672,968 $ 2,517,178 $ 2,517,178 $ - 0% $ 2,311,753 TOTAL $ 18,084,362 $ 21,652,217 $ 19,720,128 $ 1,932,088 9% $ 20,805,107 * Includes one-time CalPERs downpayment in FY 22
Water Fund FY 2021-22

Utilities – Water and Sewer Funds
65 Additional savings exceeding $30,000 in FY 2021-22 can be attributed to a reduction in legal services costs and a reduction in spending in education and training. Legal service costs vary year-to-year and were underspent in FY 2021- 22 due to the lack of need for outside legal counsel. Education and training costs were reduced due to staff limiting out-of-town travel and utilizing less expensive digital training opportunities due to COVID-19.

Utilities – The Water Fund underspent electric budgets for Water Treatment and Recycled Water Treatment in 2021-

22. The underspent budget, approximating $153,000 was largely due to energy efficiency improvements at these facilities. Most notable is the installation of new ozone treatment technology at the Water Treatment Plant.

Transfers – This is the amount transferred into the General Fund based on the calculations from the annual Cost Allocation Plan. Because the Cost Allocation Plan is performed based on the prior year actuals, the FY 2021-22 budget represents the Water Fund’s shared cost of the General Fund programs from FY 2019-20.

Water Fund - Revenue Analysis
Table 42: Water Fund Revenue Analysis
Water Revenue was $5.5 million more than budgeted primarily due to development impact fees exceeding budget by approximately $3.6 million, reflective of continued development in the City and unknowns associated with development construction timelines. Staff continues to refine the methodology behind development impact fee projections; but there are many unknowns which makes forecasting challenging. Water service charges were more than budgeted by $859,467 due to a dry winter which resulted in additional irrigation within the community.

Additionally, staff had budgeted conservatively for water service charges in FY 2021-22 to account for unknowns associated with continued COVID-19 impacts.

Debt proceeds exceeded budget by $698,730 due to construction timing of the Water Treatment plant upgrade.

Simultaneously, State Grants were $1.4M overbudget primarily due to the time extension for the Prop 1B PCE Plume project and expenses accrued in FY 2021-22 instead of the prior fiscal year.

The investment and property revenue budget was calculated based on 2% of the prior year’s working capital. Due to a volatile business cycle and the Feds monetary policy to counteract inflation, the investment and property actuals were adjusted to ’reflect the fair value of Utilities’ investments more accurately. This fair market value adjustment amounted to $675,550 reduction in investment and property revenue actuals for the Water Fund. Budgets have been adjusted to an even more conservative outlook in FY 2022-23 until the economy returns to a normal business cycle.

Utilities – Water and Sewer Funds
66 Cal Poly Capacity & Resilience revenue was underbudget due to an invoice associated with Whale Rock being off-line in FY 2020-21 that was refunded in FY 2021-22. In addition, Water Fund “Other Revenue” was under budget due to a reduction in the Utilities set-up fee. Set-up fees had been reevaluated and adjusted down to account for efficiencies from technology and the budget was not updated accordingly. This has been addressed in FY 2022-23. 2021-22 Fund Summary
Based on unaudited financials, the Water Fund will return $6.5M to working capital.

Table 43: Water Fund Summary FY21-22
Table XX: Water Fund Summary FY21-22 Amount
a) Revenue $ 33,235,095
b) Total Expenditures (c+d+e) $ 26,723,126
c) Operating Expenditures $ 19,720,128
d) Capital Expenditures $ 4,695,624
e) Debt $ 2,307,374
Year-End Net Increase return to Working Capital (a-b) $ 6,511,969 Sewer Fund
Water Fund - Expenditure Analysis
Table 44: Sewer Fund - Expenditure Summary

Salaries and Benefits – Salaries and benefits in the Sewer Fund were underspent by $539,488 (or 9%). These savings were largely due to staff turnover (new staff hired at lower skills-based pay steps) and vacancies for the Wastewater Collection, Water Resource Recovery Facility, Administration and Engineering, and Water Quality Lab teams.

Additionally, there were contract and temporary positions for the Water Resource Recovery team that were added in anticipation of short staffing which were never fully realized due to being fully staffed and adding positions later than anticipated. The Water Resource Recovery contract and temporary accounts resulted in about $50,000 underspend.

Contract Services – Approximately $60,000 of the $291,016 underspend in the Sewer Fund’s Contract Services is due to delays in receiving the new WRRF NPDES permit. NPDES permit amendments were delayed due to external factors under the Regional Water Quality Control Board’s control. There were also substantial cost savings realized (about $50,000) by leveraging Cal Poly for COVID wastewater surveillance analysis. Additionally, the fund was able to realize cost savings (about $20,000) by shifting vendors for environmental compliance monitoring.

The remaining underspend can be attributed to minor-maintenance projects that were deferred due to concurrent construction at the WRRF. These projects are dependent on various SLO Water Plus construction schedules and must be coordinated with other work on site.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing* $ 4,424,073 $ 5,775,389 $ 5,235,901 $ 539,488 10% $ 4,889,494 Contract Services $ 686,709 $ 1,081,706 $ 790,690 $ 291,016 37% $ 863,361 Other Operating Expenditures $ 1,354,878 $ 1,942,632 $ 1,830,631 $ 112,001 6% $ 1,741,111 Utilities $ 540,553 $ 793,027 $ 546,169 $ 246,858 45% $ 937,710 Transfers to General Fund $ 2,401,729 $ 2,368,064 $ 2,368,064 $ - $ 2,573,783 TOTAL $ 9,407,942 $ 11,960,818 $ 10,771,456 $ 1,189,363 10% $ 11,005,459 * Includes one-time CalPERs downpayment in FY 22
Sewer Fund FY 2021-22

Utilities – Water and Sewer Funds
67 Other Operating Expenses – For the Sewer Fund, significant balances in some accounts were intentionally set aside to address unpredictable increases in chemical prices. The chemicals cost at the WRRF ended up being $254,838 over budget. In anticipation of the chemical costs increases, Utilities curtailed spending in public outreach, but chemical costs increases were predominantly offset by electrical service savings. This electrical account surplus was due to modified SLO Water Plus schedules, and operational efficiency measures that staff exercised at the WRRF. The public outreach accounts for approximately $70,000 of the $112,001 underspent in other operating expenses.

Utilities – In anticipation of the new Water Resource Recovery Facility coming online, the City began budgeting more for electric services. The new facility will utilize ultraviolet light to treat wastewater, increasing electricity needs but significantly reducing, and in some cases eliminating certain chemical needs. Due to a modified construction schedule, the commissioning of new systems (overlapping with existing system operations) has been delayed. Consequently, $240,459 of the $246,858 underspend stems from the Water Resource Recovery Facility budget. These savings were used to offset increases in chemical prices this year but the full budget will be needed when the new facility is commissioned.

Transfers – This is the amount transferred into the General Fund based on the calculations from the annual Cost Allocation Plan. Because the Cost Allocation Plan is performed based on the prior year actuals, the FY 2021-22 budget represents the Sewer Fund’s shared cost of the General Fund programs from FY 2019-20.

Sewer Fund - Revenue Analysis
Table 46: Sewer Fund – Revenue Analysis
Sewer Revenue was $20.7 million more than budgeted due to the timing of debt proceeds received for the WRRF project reimbursements. Last fiscal year, Sewer was $22.8 million underbudget in Debt Proceeds due to delays in funding related to the construction timeline and project costs carrying over to FY 2021-22. Debt Proceeds have been adjusted to reflect the expected project reimbursements in the FY 2022-23 budget. Simultaneously, State Grants was $4.7M underbudget primarily due to the timing of WRRF construction and reimbursement requests associated with grant awards.

Sewer development impact fees exceeded budget by approximately $2.3 million, reflective of continued development in the City and unknowns associated with construction timelines. Sewer service charges and base fees were more than budgeted by $1.4 million. Staff budgeted conservatively for Sewer service charges in FY 2021-22, as there were still unknowns associated with COVID-19 continued impacts and the moratorium for service shut-off due to nonpayment was not lifted until December 2021.

The investment and property revenue budget was calculated based on 2% of the prior year’s working capital. Due to a volatile business cycle and the Feds monetary policy to address inflation, the investment and property actuals were adjusted to reflect the fair value of Utilities’ investments more accurately. This fair market value adjustment amounted

Utilities – Water and Sewer Funds
68 to $868,654 reduction in investment and property revenue actuals for the Sewer Fund. Budgets have been adjusted to a more conservative outlook in FY 2022-23 until the economy returns to a normal business cycle. 2021-2022 Fund Summary
The Sewer Fund will return $19.3M to working capital.

Table 47: Sewer Fund Summary
Table XX: Sewer Fund Summary FY21-22 Amount
a) Revenue $ 69,780,885
b) Total Expenditures (c+d+e) $ 50,504,258
c) Operating Expenditures $ 10,771,456
d) Capital Expenditures $ 38,352,806
e) Debt $ 1,379,996
Year-End Net Increase return to Working Capital (a-b) $ 19,276,627

Public Works - Parking Fund
69 Parking Fund
A Year In Review
Throughout FY 2021-22, Parking Services (Parking) was able to carry out many of its operations and programs that were limited over the past few years due to the COVID-19 Pandemic. Parking was successful in assisting with economic recovery efforts and in managing parking services for residents, business owners, and visitors. In years past, capital projects were deferred to account for anticipated revenue shortfalls. However, substantial progress was made over the last year related to the implementation of virtual permits for permitted residential areas and parking districts and the addition of mobile payment methods (Mobile Apps) where pay stations are located.

Parking continues to improve the customers’ experience by modernizing a 50-year-old operational system and equipment, to better suit the needs of the community. The use of existing equipment and staffing resources have been designed to meet the current needs of the community, while work is underway to implement gateless and limited contact parking operations in the structures and at metered spaces. Planned improvements for FY 2022-23 include the roll out of gateless parking operation in the 842 Palm Street parking structure, the groundbreaking on the Cultural Arts District Parking Structure, continued expansion of multi-space pay stations and credit card capable meters, expansion of paid parking in the Upper Monterey and Railroad Square areas, and the update to the Access and Parking Management Plan (APMP).

Accomplishments and Strategic Goal Updates
Parking continues to be actively engaged in the economic recovery effort of the community. Across the year, Parking addressed economic recovery and operational goals through the following actions:

1. Waived parking structure fees on the weekends between the Thanksgiving and New Year holidays

2. Expanded Passenger Loading Zones and Commercial Loading Zones in the downtown area

3. Reduced on-street metered spaces to provide space for businesses to operate in the Open SLO Program

4. Implemented mobile parking applications, which represents roughly 20% of daily transactions

5. Implemented the Conceptual Physical Plan for the City’s Center

6. Provided well-managed access to parking in the downtown area for visitors and employees through appropriately priced daily and monthly parking programs

7. Continued promotion of other transportation methods such as SLO Transit’s Downtown Access Pass

8. Implemented the transportation strategy presented in the General Plan Circulation Element Challenges
Parking, like many other programs across the City, experienced challenges, and impacts in the areas of staffing, materials cost escalation, supply chain issues, infrastructure failures, and in many ways had to modify day-to-day operations in delivering core services. Most notably, cost escalation for the Cultural Arts District – Parking Structure has required staff to make significant recommendations to increase revenue sources to ensure that funding can be secured. Staffing is and will continue to be a challenge in the Parking program due to the nature of the work and staffing structure. This past year Parking Services faced staffing issues with Parking Enforcement Officers, Parking Ambassadors, and Maintenance Worker positions. Staffing shortages had significant financial impacts on the Parking Fund through unrealized meter, structure, and citation revenue in addition to expanded contract needs beyond initial projections.

Parking was able to reprioritize several programmatic improvements and upgrades that were deferred in years past due to revenue shortfalls. However, this came with major challenges in the areas of cost escalation and supply chain shortages related to equipment maintenance and improvements. Staff experienced major cost increases in structure pay station installations, and in many instances experienced delays in receiving materials and supplies required to keep aging infrastructure operable.

Public Works - Parking Fund
70 Parking Services has made numerous efforts to upgrade the parking infrastructure, programs, and parking systems.

While implementing new and improved technology, the program is still in a position where reliance on older infrastructure is necessary. For example, the program experienced gate failures at parking structures, resulting in lost revenue. In addition, staff were informed that single space coin-operated parking meters were no longer supported by the manufacturer and could not receive additional programing updates. Throughout the year, staff were required to address multiple maintenance issues, diverting time and attention from system improvements.

Modified operations of core services continue to be a challenge for the Parking Services Program. Operations staff addressed almost daily impacts of transient activities in the structures including vandalism, graffiti, and debris left behind. Recruitment and retention of the Parking Ambassadors positions has been a challenge since the pandemic began and continues currently. Limited staffing has required parking structure gates to be up more than anticipated during peak evening times. Gating system failure at varying times of the day has led to confusion amongst customers and a significant reduction in revenue. Approved plans to convert the structures to a gateless operation using license plate recognition for payment verification in Q3 of FY 2022-23 will resolve these issues.

Expenditures
Table 48: Parking Fund Expenditures

Salaries and Benefits – There were significant savings in salaries and benefits in the parking fund, largely due to staffing vacancies. Parking only utilized approximately 78 percent of its salaries and benefits budget. The program made ongoing efforts to meet staffing needs and to ensure shift coverage. The use of regular, temporary and contract employees was utilized, however, the parking program did not experience full time staffing levels at any point throughout the year. Staffing shortages had significant financial impacts on the Parking Fund through unrealized revenues and will continue to be a major effort of building out appropriate staffing in combination with new technologies.

Contract Services – The Parking Program experienced excess spending in contract services, expending 111 percent of its budget. This is primarily due to deferred maintenance leading to repairs and infrastructure failures, in addition to cost escalation and supply chain issues. In many ways the program had to modify day-to-day operations in delivering core services. Excess costs were also seen due to contracting increases for parking enforcement around citation issuance and extending maintenance operations while working through staffing issues.

Other Operating Expenses – The Parking Program experienced excess spending in contract services, expending 109 percent of its budget. This is primarily due to unanticipated increases in credit card merchant fees around payment transactions, print and reproduction materials for citation and parking receipts, as well as materials and supplies for day-to-day activities. The program also had to address daily impacts of transient activities in the structures including vandalism, graffiti, and debris left behind.

Utilities – The Parking Fund expended approximately 81 percent of anticipated utility costs. Although utility costs did not exceed the budgeted amounts, utility costs, including water, sewer, electric services, and solid waste services were beyond prior year actuals.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing* $ 1,126,434 $ 2,022,327 $ 1,574,928 $ 447,399 28% $ 1,917,920 Contract Services $ 684,899 $ 751,806 $ 835,453 $ (83,647) -10% $ 584,065 Other Operating Expenditures $ 208,265 $ 365,917 $ 400,266 $ (34,350) -9% $ 401,525 Utilities $ 117,581 $ 211,301 $ 170,905 $ 40,396 24% $ 221,933 Transfers $ 990,911 $ 1,105,120 $ 1,105,120 $ - 0% $ -
TOTAL $ 3,128,091 $ 4,456,471 $ 4,086,672 $ 369,799 8% $ 3,125,444 * Includes one-time CalPERs downpayment in FY 22
Parking Fund FY 2021-22

Public Works - Parking Fund
71 Transfers – This is the amount transferred into the General Fund based on the calculations from the annual Cost Allocation Plan. Because the Cost Allocation Plan is performed based on the prior year actuals, the FY 2021-22 budget represents the Parking Fund’s shared cost of the General Fund programs from FY 2019-20.

Parking Revenues
Table 49: Parking Revenues
As part of the mid-year budget process, the Parking Fund forecast was adjusted to estimate revised revenues for FY 2021-22 due to the economic impacts and parking activities following the height of COVID-19, and adjustments in parking operations. When preparing budget adjustments, staff used a conservative approach considering the limitations COVID-19 may have on parking revenue.

Parking programs returned to pre-COVID activity levels quicker than anticipated and revenue actuals exceeded the revised projections by year-end by 13 percent. On-street parking revenue in June 2021 was nearly identical to revenue received in February 2020 prior to the COVID pandemic. Similarly, parking structure usage quickly returned to pre-COVID levels beginning in May 2021 when the Farmer’s Market was reestablished and non-city staff who work in the downtown area began to utilize the long-term parking program. These are positive indicators of a Parking Fund moving toward fiscal sustainability into the new fiscal year.

Table 49-b: Parking Fund City Manager Approved Budget Carryover Parking Fund: 2021-22 Carryover Budget Amount
Funding for the Access and Parking Management Plan (APMP) $ 100,000 Funding to support agreement with IPS parking enforcement contract $ 11,500 Budget Actuals Variance %
Parking Meters $ 1,265,085 $ 1,940,863 $ 2,210,191 $ 269,328 113.9% $ 2,268,500 Parking Fines $ 654,284 $ 657,606 $ 928,610 $ 271,004 141.2% $ 793,500 Parking Structures $ 346,300 $ 835,294 $ 1,013,028 $ 177,734 121.3% $ 1,328,450 Long Term Parking $ 422,381 $ 547,795 $ 712,634 $ 164,839 130.1% $ 844,900 Other Revenue $ 380,778 $ 569,578 $ 263,362 $ (306,216) 46.2% $ 595,400 Total $ 3,068,827 $ 4,551,136 $ 5,127,825 $ 576,689 113% $ 5,830,750 FY 2021-2022 FY 23 Forecasted
Budget
Parking Fund Revenue FY 21 Actuals

Public Works – Transit Fund
72 Transit Fund
A Year In Review
The Transit Fund (Transit) ended the year with significant variances in both anticipated expenditures and forecasted revenues, primarily due to modified operations following the peak of the COVID-19 pandemic. The pandemic proved to have a negative impact on ridership and fare revenue in years past and this trend continued through FY 2021-22.

Reduced revenues were offset by reduced expenditures in service levels, maintenance, and supplies.

Ridership is a critical component of the on-going health of the Transit Fund. Necessary to secure State Transit Development Act (TDA) funds is a requirement that 20 percent of the programs’ operating budget be generated from local revenue – fares, bus passes, and payment for Cal Poly. For FY 2021-22, the fare box percentage was 36%.

During FY 2021-22, the Transit Program experienced a dramatic increase in ridership from the year prior, which is a major step forward in meeting fare box ratio requirement. The table below outlines ridership levels across the past four years.

Table 50: Transit Fund Overview
In FY 2021-22, the Transit Program looked to the Federal Urbanized Area Grant Funding program (5307 funds) to supplement the Transit Fund, paying for 50 percent of the operating costs while the remaining funds were State transit funds (TDA). The City secured grant funding from the American Rescue Plan Act (ARPA) for 100 percent of operational costs beginning in FY 2022-23 for three fiscal years, and will address driver wages, allow for the purchase of additional zero emission buses, and support other capital projects. The reduction in service levels resulted in cost savings that helped to offset lost revenues. The unused balance of typical annual allocations of Federal 5307 and TDA Funds have been deferred for future use in FY 2022-23.

The Transit Program continued to provide services to the community as well as Cal Poly students, faculty, and staff.

At the beginning of FY 2021-22, the Transit Program was servicing four (4) routes, to provide basic transit services to the community, which remained relatively consistent across the year. During the Fiscal Year, Transit staff worked to modify the operating agreement with Cal Poly (adopted in June of 2022) to continue service delivery for two years with the understanding to develop a more sustainable agreement structure.

Accomplishments and Strategic Goal Updates.

Although the Transit Fund has faced many challenges in operations and fare revenues over the past few years, the program has been successful in obtaining funding from various state and federal programs. In FY 2021-22, the Transit Program successfully secured funding beyond its originally anticipated Federal Transit Administration (FTA) and Transportation Development Act (TDA) formula-based grant funding. $12.3 million in American Rescue Plan Act (ARPA) funding from the FTA was secured to support operations for the next three fiscal years. As a result, funding will be utilized for operational support and allow other funding to be utilized for electric bus purchases. In addition, Transit secured $285,000 in Low Carbon Transportation Operations Program grant funding that will be used for infrastructure costs related to the purchase and installation of electric bus charging units.

Public Works – Transit Fund
73 During FY 2021-22, in coordination with consultants, staff received the completed Transit Program Analysis and Assessment. Overall, the final report outlined that SLO Transit is delivering a quality program while maintaining fiscal responsibility and is performing above key indicators in the county. Recommendations from this study included the annual review of fare structure relative to ridership, an appropriate agreement with Cal Poly, utilizing FTA funds to the greatest extent, and to work with regional transit stakeholders including SLOCOG and RTA.

Consistent with the Major City Goal of Climate Action, two electric buses were purchased in FY 2021-22 and will be delivered in Winter of 2022. In addition, the City Council authorized a two-year extension of the operating agreement with First Transit, which include a significant increase in costs tied to driver and operational staff. An important modification to the operating agreement is intended to attract and retain transit drivers, which is critical in carrying out services.

Challenges
Throughout the Fiscal Year, staffing and labor shortages have caused the Transit Program to shift to an alternative and reduced schedule of routes. Although staffing and recruitment is carried out by a contracted service provider (First Transit), City staff worked in collaboration with First Transit to address staffing shortages while maintaining adequate service levels. Moving into FY 2022-23, staff is working with First Transit to extend the agreement which is expected to adjust wages to attract and retain drivers in a tight and competitive job market.

Fuel costs have steadily risen in FY 2021-22, which could serve as an additional impediment to providing adequate service levels, in addition to staffing challenges. Since the Transit program did not run at full route schedule service, the Fund did not expend excess funding toward fuel this year. Staff will closely monitor the cost of fuel as it relates to the level of service provided. Based on current fuel cost trends, it may be necessary to increase the fuel budget by nearly 50 percent if the program is operating at full-service levels, but with the purchase of new electric vehicles, this will be offset to some extent. The Transit Program is anticipating challenges in how to restore transit services in a post pandemic environment considering ridership, cost of service and other factors. Staff will look to the Transit Innovation Study to address these challenges in future years.

Expenditures
Table 51: Transit Fund Expenditures

The Transit Fund operating costs are typically split equally between state and federal funding sources after deducting the mandated 20% farebox recovery. The state provides TDA funds based on the adopted budget and federal funds are based upon actual costs. When the Transit Fund has savings there will be a reduction in federal funds being reimbursed which shows as a reduction in revenues.

Salaries and Benefits – The Transit Fund utilized 80 percent of budget related to salaries and benefits. Because the Transit Manager position was vacant, Transit relied on an annuitant employee who is serving as the Interim Transit Manager with a maximum of 960 hours per Fiscal Year for program oversight.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing* $ 313,020 $ 422,212 $ 336,205 $ 86,007 26% $ 298,896 Contract Services/ Purchased
Transportation
$ 2,414,328 $ 3,442,517 $ 2,798,890 $ 643,627 23% $ 2,895,950 Other Operating Expenditures $ 378,834 $ 842,308 $ 604,155 $ 238,153 39% $ 684,513 Transfers $ 321,727 $ 226,183 $ 226,183 $ - $ 365,544
TOTAL $ 3,427,909 $ 4,933,220 $ 3,965,433 $ 967,787 20% $ 4,244,903 * Includes one-time CalPERs downpayment in FY 22
Transit Fund FY 2021-22

Public Works – Transit Fund
74 Contract Services – There were 19 percent savings in the contract services budget at year-end. The savings were largely related to reduced purchased transportation cost since the level of service was reduced due to COVID impacts, driver shortages, and the overall reduction in service level.

Other Operating Expenses – There were about 28 percent savings in the other operating expenses budget. The savings were largely related to reduced services, reduced fuel consumption, reduced training availability, and a limited need for materials and supplies.

Transit Revenues35
Table 52: Transit Revenues
In FY 2021-22, the Transit Program looked to the Urbanized Area Grant Funding program (5307 funds) to supplement the Transit Fund, paying for 50 percent of the operating costs while the remaining funds were state and local transit funds (TDA). The City secured grant funding from the American Rescue Plan Act (ARPA) for 100 percent of operational costs beginning in FY 2022-23 for three fiscal years, and will address driver wages, allow for the purchase of additional zero emission buses, and support other capital projects. The reduction in service levels resulted in cost savings that helped to offset lost fare revenues. The unused balance of typical annual allocations of Federal 5307 and State Transit Development Act (TDA) Funds have been deferred for future use in FY 2022-23. The variance in the above table is due to both State and Federal grant disbursement timing where it is normal for full revenues to be realized in the Fall or based on receipts of reimbursements.

Table 52-b: Transit Fund City Manager Approved Carryover Budget Transit Fund: 2021-22 Carryover Budget Amount
Transit - Staffing Assessment $ 10,000

35 Revenues are not fully realized until time of receipt from various Federal and State programs. In years past, revenues are not captured until January of the following year (January 2023). Although revenue actuals only read 40%, staff are confident that the budget amounts are within reason of anticipated actuals.

Budget Actuals Variance %
Interest Revenue $ 4,047 $ 30,826 $ (109,138) $ (139,964) -354.0% $ 6,500 State $ 351,998 $ 2,743,064 $ 2,389,841 $(1,395,415) 87.1% $ 2,040,941 Federal $ 2,805,689 $ 4,093,659 $ 149 $(4,093,510) 0.0% $ 7,248,297 Local (Bus Fare) $ 328,184 $ 687,500 $ 710,457 $ 22,957 103.3% $ 850,000 Total $ 3,489,918 $ 7,555,049 $ 2,991,309 $(5,605,931) 40% $ 10,145,738 Transit Fund Revenue FY 2020-21
Actuals
FY 2021-2022 FY 2022-23
Forecasted
Budget

Special Revenue Funds – TBID & Downtown Association
75 Tourism Business Improvement District (TBID)
The Tourism Business Improvement District (TBID) was established in 2008 in the City of San Luis Obispo at the request of the local lodging industry. The assessment is set at 2% of the lodging industry’s gross receipts and is used to defray the costs of services, activities and programs promoting tourism which benefit the operators of lodging establishments in the district through the promotion of scenic, recreational, cultural, and other attractions in the district as a tourist destination. Annually, the program sets an operating budget to match its forecasted yearly revenues.

A Year In Review
The TBID had a record-breaking year this fiscal year aiding in the collection of over $10 million in transient occupancy tax revenue. Several work efforts supported this accomplishment including the development of a new brand campaign, Say Hello to the SLO Life, that advertised San Luis Obispo and delivered over 30.9 million impressions. In addition, the TBID launched a new promotion called The Midweekend which rewarded guests for staying 2 or more nights midweek in San Luis Obispo to help attract visitation when the lodging properties need it most. In alignment with the Major City Goals, the TBID partnered on a visitor Equity, Diversity, and Inclusion study to inform the marketing team on insights related to attracting diverse audiences to visit San Luis Obispo. This effort also led to the expansion of diversity in marketing assets. This year the TBID piloted a new sustainability initiative, Keys For Trees, through which 1% of TBID revenue goes toward planting trees in the community in support of the City’s climate action goal of planting 10,000 trees by 2035 as part of carbon neutrality goal. The TBID also did significant brand development work including visitor and resident perception studies and investment in a comprehensive brand book, all of which provide a strong foundation for effective marketing in the future.

Variance Analysis – Revenues & Expenditures
Savings experienced in staffing are a result of a vacancy in the Tourism Coordinator position; savings were accrued during the recruitment period for the role which spanned the course of three months. The timing of the Tourism Coordinator position vacancy coincided with the Fall tradeshow season causing the travel and conference budgets to be substantially underutilized for the fiscal year. Additionally, for much of the year Board Meetings continued to be held virtually contributing to the overall savings in operating expenses.

Table 53: TBID Variance Analysis

Downtown SLO Business Improvement District
The Downtown Business Improvement District (DBID) was established in 1975 as a parking and promotions district for the downtown area. As a special fee district, fees are collected from business license holders operating within a designated area and revenue supports the operations of Downtown SLO. The City and Downtown SLO (DSLO) agreed by contract that DSLO would provide various services for the economic, social, cultural, and environmental vitality and beautification of downtown San Luis Obispo. The assessment is a special revenue and is administered in its separate and distinct fund. Expenditures will always be equal to forecasted revenues because all of the collected downtown assessment is remitted to Downtown SLO.

FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Staffing $ 203,149 $ 268,258 $ 225,734 $ 42,524 16% $ 219,993 Contract Services $ 895,456 $ 1,407,345 $ 1,264,462 $ 142,883 10% $ 1,383,565 Other Operating Expenditures $ 24,601 $ 97,627 $ 64,510 $ 33,117 34% $ 89,100 Transfers $ 29,498 $ 28,852 $ 37,887 $ (9,035) -31% $ 34,544 TOTAL $ 1,152,703 $ 1,802,082 $ 1,592,593 $ 209,489 12% $ 1,727,202 Revenue Actual Budget Actual Variance % Projection
TOTAL $ 1,381,194 $ 1,444,000 $ 1,861,536 $ 417,536 29% $ 1,727,202 TBID Operating Expenditures FY 2021-22

Special Revenue Funds – TBID & Downtown Association
76 In additional to the normal activities carried out by DSLO, the organization was active in supporting the economic recovery of the downtown. This included the expanded holiday and ongoing Mission Plaza activations. Additional funding ($210,000) was also provided by the City from the General Fund for enhanced programs to promote a clean, safe, and vibrant environment downtown.

Table 54: DBID Overview
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Pass-through Payments $ 249,074 $ 245,000 $ 222,141 $ 22,859 9% $ 275,000 TOTAL $ 249,074 $ 245,000 $ 222,141 $ 22,859 9% $ 275,000 Revenue Actual Budget Actual Variance % Projection
TOTAL $ 249,824 $ 245,000 $ 227,202 $ (17,798) -7% $ 275,000 Downtown Association FY 2021-22

Insurance Fund
77 Insurance Fund
The City is a member of the California Joint Powers Insurance Authority (CJPIA) which provides general liability and workers’ compensation insurance coverage and coordinates oversight and management of claims administration. In 2016, the City entered into an agreement with CJPIA and Carl Warren, a third-party administrator, to manage its liability claims. Carl Warren provides intake of claims, legal counsel, investigation of claims, and represents the City in mediations and court cases. For workers’ compensation claims, CJPIA covers the costs from the first dollar. The consolidation of all insurance-related expenses into one Insurance Fund has made it easier to oversee and manage them and allow the City to maintain a reserve at the 75% confidence level as required by policy. The Fund also covers premiums for liability, workers’ compensation, and other ancillary insurances such as property, crime, pollution, volunteers, and special events.

The number of liability claims filed in FY 2021-22 was below average compared to those in recent years; however, what is distinctive about FY 2021-22 is there were more complex, higher value claims and the ongoing expenses and required reserves for investigating and managing them has been higher than in previous years. Such claims have taken up to three years to resolve and it is difficult to predict which current claims may be settled in favor of the City and at what point in time. There were 56 non-COVID-19 claims that varied in severity, which is slightly below the annual average of 60. There were also 11 COVID-19 related workers’ compensation claims this fiscal year.

The Insurance Fund was established to have sufficient funds to withstand fluctuations in claims costs and includes a reserve of 75% confidence level based on recent actuarial information. The recommended target for the reserve for FY 2021-22 was $1.5 million. Since the costs for claims and insurance were less than anticipated in some previous years, the fund balance including the reserve grew to nearly $2 million; however, allocations into the Risk Management budget to cover the costs of two large settlements in FY 2020-21 and FY 2021-22, as well as insurance premiums for FY 2022-23 that exceeded budget appropriations , reduced the Insurance Fund to slightly below the required $1.5 million reserve level; however, not all of the funds allocated were needed to satisfy claims costs in FY 2021-22, and the excess will be returned to the Insurance Fund so it once again meets the minimum balance.

The financial outcomes in FY 2022-23 should be carefully monitored during the fiscal year and when making budget assumptions for the next Financial Plan. Because there are higher value claims pending, it will be important to make sure there is a sufficient balance in the Insurance Fund based on current actuarial information, and that the budget reflects adequate funds to cover claims-related expenses based on the average costs of claims over the previous five years at a 75% confidence level as required in the City’s 2021 Fund Balance and Reserve Policy.

In early FY 2021-22, CJPIA analysts indicated that member cities may be billed separately for cyber security coverage due to the increase in cybercrimes and associated expenses that typically have been absorbed in general liability coverage. While this change did not take place in FY 2021-22, it may occur in the future. In the upcoming Financial Plan, costs for cyber security should be identified as early as possible for financial impacts, as well as adequacy of coverage.

Variance Analysis
As noted, liability claims expenses exceeded appropriated budget due to unanticipated increases in claims costs in FY 2021-22 and insurance increases in FY 2022-23. While the City Council appropriated $150K from the City’s Insurance Fund unassigned fund balance to cover anticipated claims and related expenses during the FY 2021-22 third quarter budget review, the entire allocation was not needed, and the unexpended amount will be returned to the Insurance Fund and will restore the required minimum balance. Costs for workers’ compensation were as expected, and property insurance increased as a result of updated property valuations and additions to the insurance schedule.

Insurance Fund
78 Table 55: Insurance Fund Variance Analysis
FY 2020-21 FY 2022-23
Actual Budget Actual Funds Available % Budget
Worker's Comp Insurance $ 2,037,611 $ 2,181,044 $ 2,181,044 $ - 0% $ 2,844,913 Liability Insurance $ 962,461 $ 1,717,347 $ 1,627,589 $ 89,758 5% $ 1,677,911 Other Insurance $ 361,363 $ 434,712 $ 449,981 $ (15,269) -4% $ 515,205 TOTAL $ 3,361,435 $ 4,333,103 $ 4,258,614 $ 74,489 2% $ 5,038,029 Insurance Fund Expenditures FY 2021-22

Debt Service Payments
79 Debt Service
Table 56: Debt Service
FY 2021-22
Budget Actual Variance
General Fund
81001-Principal $ 1,453,459 $ 1,453,734 $ 275
81002-Interest $ 760,996 $ 760,792 $ (204)
Water Fund
81001-Principal $ 1,574,854 $ 1,574,854 $ 0
81002-Interest $ 873,992 $ 732,520 $ (141,472)
Sewer Fund
81001-Principal $ 991,973 $ 991,973 $ -
81002-Interest $ 392,496 $ 388,023 $ (4,472)
Parking Fund
81001-Principal $ 514,458 $ 550,486 $ 36,028
81002-Interest $ 341,042 $ 275,732 $ (65,310)
Total $ 6,903,270 $ 6,728,114 $ (175,157)

Major City Goals
80 Major City Goal Updates (FY 2021-22 Tasks Only)
Strategy Task
Original
Completion
Date
Updated
Completion
Date
Comments (if applicable)

1.2 a-5. Evaluate the continuation and/or modification of the Open SLO program Fitness in the Parks. Completed
Open SLO program continues with Dining in
the Plaza at Mission Plaza. The Fitness in
the Parks program concluded in August 2021
with the lessoning of COVID restrictions for
indoor gyms/wellness businesses.

1.2 a-6. Review transitioning the Business Ambassador
program from a COVID response action to an ongoing
program with an available hotline as well as an online
form option.

Completed Complete

1.4 a-4. Review, evaluate and execute on the outcomes from the Downtown Future Forum ensuring the required public
participation and Council approval as needed.

Completed
Complete. All initiatives have been
reviewed and the relevant ones are being
managed by the appropriate departments.

1.4 e-9. Mission Plaza Railing Replacement FY22 Q2 Completed Construction was completed in November 2021.

1.4 e-8. Downtown safety enhancements - bollards FY22 Q4 Completed 16 Anti-vehicle barriers have been
purchased for Higuera entrances of the
Farmer's Martket. The barriers are being
wrapped with a decrotive design and will be
placed in service in February of 2022.

1.4 d-9. Assist with the continuation of Open SLO parklets and courtesy curbside pick up locations FY22 Q2 Completed
Approximately 55 parking spaces are
currently occupied by parklets and limited
time loading zones (courtesy curbside
pickup locations). Council reviewed parklets
at the July 5th meeting. Parking will
continue to monitor and make adjustments
as the program changes and additional
location for parklets and pickup are
identified.

1.5 d. Complete benchmark compensation survey for SLOCEA, Management, and Confidentials groups. Completed

1.7 b. Regional Transit Authority Analysis: The RTA is currently building a Regional Transit HUB 800 feet from the City’s SLO Transit Bus Yard. Much of the infrastructure that
supports SLO Transit is aged and nearing the end of its lifespan. All transit providers are required to shift the fleet of transit vehicles to zero emission vehicles.

This funding would support the analysis and review of SLO Transit’s operations and infrastructure to determine if there may be benefit to sharing infrastructure, equipment or centralizing services to provide increased community services at the same or reduced purchasing requirements, alternative project delivery methods and other options to support local businesses and employees. The Community
Services Group will be leading this effort.

FY22 Q4 FY 23 Q1
Complete. Scheduling Council Study
Session for October 2022.

Economic Recovery, Resiliency & Fiscal Sustainability

Major City Goals
81 Strategy Task
Original
Completion
Date
Updated
Completion
Date
Comments (if applicable)

2.1 a. Design DEI Administration, Function, and Operations of Completed

2.1 b. Develop DEI Base Operating Budget Completed

2.1 d. Develop positions; Hire Staff Completed

2.1 e. Hire Diversity position - 1.0 FTE Completed Completed DEI manager was hired in February of 2022.

2.1 c. Identify and secure office space (2000/mo @ 7 mos Y1, FY22 Q2 Completed

2.1 g. Hire CivicSparks Fellow - Y2 - .75 FTE FY22 Q4 Completed A DEI management fellow was hired instead of a Sparks fellow.

2.2 c. Present comprehensive plan to City Council for
Adoption FY22 Q2 FY23 Q4
Strategic planning process will begin in FY23
Q1 which will result in a comprehensive
plan for council.

2.2 d. Create project designs and implementation plans.

Identify applicable qualitative and quantitative metrics to measure impact of DEI projects and overall DEI program
FY22 Q2 FY23Q4
Metrics will be developed via the strategic
planning process.

2.2 a. Conduct needs, priority, and resource assessments.

Create comprehensive DEI initiatives and programming
for the organization and community.

FY22 Q4 FY23Q4 This will be completed via the strategic planning process.

2.2 b. Utilize DEI Task Force Recommendations, Internal D&E Audit as foundation; Cal Poly Experience report and other documents as reference and for benchmarking
FY22 Q4 Completed
DEI Task Force recommendations were the
backbone of the DEI MCG workplan and
continue to guide implementation of DEI
initiatives.

2.3 g. Review, evaluate and implement findings of SLO County Child Care Study (First 5’s analysis) of childcare for
working families, as applicable; 22-23 Supplemental Plan as resources permit.

FY22 Q4 Ongoing
Ongoing project. Waiting for results from
First 5. Study is partially complete.

Partnerships with District, Poly continue.

2.5 d. Review new Police Station building program and
budget for opportunities to reduce costs to preserve
resources for community service investments
FY22 Q2
Facilities Maintenance is working with a
Contractor: Broawder Painting to revitilized
the entrance of the PD Building, new paint
on the font sign, wall and trim, sealed the
wooden bench near the entrance, clean the
concrete floor at the front sidewalk and
steps. This work is schedule to start on
04/08/2022 and the PD personnel has been
notified.

2.7 i. City 101 – first stage, short program, easy
access/commitment. Overview of City, how to access,
ways to be involved. Extensive outreach to
Underrepresented minorities, community-based sessions.

Design, pilot Y1
FY22 Q4 Completed

2.7 k. Develop “Undocu‐Friendly” logo for City documents, as allowable by law (cost of internal resources) FY22 Q4 FY23 Q4 Working with local undocu organization to
identify best function of a logo and
appropriate City enagament in support for
the undocumented community.

2.7 m. Park major maintenance and repairs specific to Cheng Park improvements and Mission Plaza railing
improvements.

FY22 Q4 FY 2023 Q2 In Process. Reviewing 90% Plans,
Specifications, and Estimate.

Diversity, Equity, Inclusion

Major City Goals
82 Strategy Task
Original
Completion
Date
Updated
Completion
Date
Comments (if applicable)

3.1 c. Develop Objective Design Standards & Update
Development Review Process (HE 6.22 & 6.23) Completed
Objective Design Standards and
Development Review process has been
updated and complete

3.1 d. Zoning Regulations Update - Housing (HE 5.5, 8.18, 8.23,

2.17 and AB 2345) Completed Zoning Regulations updated

3.11 b. Support a 25% expansion of the number of beds at the 40 Prado Homeless Services Center. Completed Funding provided to non-profit for expansion of beds at 40 Prado

3.10 a. Pair a crisis worker with an Emergency Medical
Technician (EMT) to provide non-emergency response
and care to unhoused community members.

FY22 Q4 Complete Mobile Crisis Unit began response in MidJune 2022.

4.1 a. To ensure consistent maintenance and adequate
oversight of City Open Space lands, add one net new
Ranger Maintenance Worker to maintain level of service
standards following recent Open Space acquisitions. The City's level of service standard for Open Space is 1 Ranger per 1,000 acres.

Completed Completed Hired 1 additional Ranger I position

4.1 b. To address Ranger Services staffing, recruitment, and retention, convert 5 Ranger Specialist positions (currently limited benefit temporary) to full-time regular permanent positions.

Completed Completed
Successfully filled Ranger II positions by
elevating one LBT, converted four LBT
positions to Ranger I level

4.2 g. Provide support for community electric mobility work being led by the SLO Climate Coalition, in support of CAP Connected Communities task 3.1.

FY22 Q2 FY23 Q3
Caltrans provided SLOCOG and SBCAG a
$200,000 Caltrans grant to complete an
regional electric mobility roadmap. That
work is being completed with input forom
the City. Separately, the City also issued a
RFP for fast charging infrastructure at City
owned parking locations in order to help
catalyze the transition.

4.3 b. Complete an Urban Forest Master Plan including a comprehensive update of tree inventory update,
assessment of tree canopy coverage, and implementation
of an ongoing tracking system, as called for by CAP
Natural Solutions task 2.1.

FY22 Q2 FY 23 Q4
In coordination with Public Works, a study
session has been scheduled with City
Council in January 2023 so that staff may
gain Council input on key policy decisions.

The master plan will completed quickly
thereafter and brought back to Council for
its consideration of adoption.

4.3 a. Working with the Coastal San Luis Resource
Conservation District, complete existing planning efforts and pilot program implementation at Johnson Ranch
Open Space and City Farm intended to improve soil
health and remove and store carbon, as called for at CAP Natural Solutions task 1.1.

FY22 Q4 FY 23 Q2
The planning efforts are complete. The team
expects to apply compost for the first pilot
ahead of the 2022/23 rainy season.

Housing and Homelessness
Climate Action, Open Space and Sustainable Transportation

Major City Goals
83 Strategy Task
Original
Completion
Date
Updated
Completion
Date
Comments (if applicable)

4.3 q. Implement Laguna Lake Dredging and Sediment
Management and Shoreline Stabilizations Projects in
order to begin restoration of the lake for recreation and habitat improvement purposes
Completed
The capital project that entailed dredging
and dewatering of Laguna Lake was
complete in November 2021, the results will
be closely monitored by staff in the coming
months to determine if the desired
outcomes related to recreation and habitat
improvement materialize. Update
(8/18/22): Laguna Lake 2021 Maintenance
Dredging Project has been compelted. Staff
is working on additional surveys,
continuation of permitting, and beginning
design for the 2023 Maintenance Dredging
Project.

4.4 b. Prepare a Mobility as a Service Study to guide potential implementation of programs and software tools to create an integrated platform linking access to transit, future bikeshare and ridesharing services, as called for in CAP Connected Communities task 1.2.

FY22 Q4 FY 23 Q3
The Mobility as a Service study scope was
folded into the Transit Innovation Study,
which is currently being solicited for
vendors through a request for proposals
proces.

4.4 t. Preserve and repair pavement surface within SLO
Transit Bus Yard FY22 Q4 FY 2024 To be completed after EV Charging Infrastructure.

4.4 h. Construct the Cerro San Luis Neighborhood Greenway Phases 1B and 2, completing the priority bicycle and
pedestrian route between Foothill Boulevard and
Downtown SLO, including safety lighting and public
artwork at the US 101/Chorro Undercrossing
FY22 Q4 FY 2024
Final Design in progress. On Council Agenda
to advertise for construction July of 2022,
with construction start fall of 2022.

4.5 a. Complete the "Resilient SLO" planning project (Safety Element Update and associated CEQA) to assess
community vulnerability to the impacts of climate change and adopt a resilience policy framework in the City's
General Plan, as required by California Senate Bill 379.

FY22 Q4 FY23 Q2
The technical work and outreach
components of Resilient SLO are now
complete. The associated Climate
Adaptation and Safety Element of the
General Plan and related CEQA work are
currently being drafted and the Element is
expected to be presented to Council for
adoption in FY 23 Q2.

4.5 i. Expand Technical Rescue Team roster from 3 to 6
firefighters to improve the City's open space rescue
capabilities and improve self-sufficiency following the first 72 hours of a regional disaster such as earthquake or flood where resources are often limited.

Completed Complete
The fire department has completed the
expansion of the department's technical
rescue team to 6 members.

4.5 n. Project: Laguna Lake Dredging - rerouting of Prefumo Creek has increased sediment deposits into the lake. This is a pilot project to ascertain if dredging is a viable solution for Laguna Lake and could become a routine
maintenance activity.

Completed
This project was completed in summer 2021
and numerous valuable lessons were
learned about project scale, staging, and
dewatering activities that will inform future
routine maintenance dredging projects.

Climate Action, Open Space and Sustainable Transportation

R ______
RESOLUTION NO. _____ (2022 SERIES)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, APPROVING AMENDMENTS TO THE 2022-23

BUDGET APPROPRIATIONS
WHEREAS, on June 6, 2022, the Council approved and appropriated the 2022-23 Budget Supplement including operating expenditures, debt service, and capital improvement plan (CIP) budget (R-11332); and
WHEREAS, under the City's Financial Plan policies, operating program appropriations not spent during the first year may be carried over into the second year for specific purposes with the approval of the City Manager; and WHEREAS, under Section 8 of the City's Financial Plan policies, Construction projects and equipment purchases which cost $25,000 or more will be included in the CIP and are accounted for in the Capital Outlay Fund; and
WHEREAS, the 2021-23 Financial Plan included $220,000 for 919 Palm Street Office modifications to support a growing workforce; and WHEREAS, under Section 7 of the City's Financial Plan policies, the City will maintain a reserve for the purpose of offsetting unanticipated fluctuations in general fund revenues to provide financial stability. The funding target for the Revenue Stabilization Reserve will be $1,000,000 during the term of the adopted Fiscal Health Response Plan.

Use and allocations of funds of the Revenue Stabilization Fund will be made upon Council approvals of the Financial Plan or as becomes necessary during any fiscal year; and WHEREAS, because the Fiscal Health Response Plan has ended, the current General Fund forecast does not include a Revenue Stabilization Reserve, yet there remain many economic uncertainties that could significantly impact the City’s tax revenue base; and
WHEREAS, General Fund revenue for Fiscal Year 2021-22 exceeded projections by approximately $6 million; and
WHEREAS, The Local Revenue Measure is a 1.5 percent local sales tax approved by City voters in November 2020 to help protect and maintain services and public infrastructure identified by the community such as community safety, creek protection, addressing homelessness, keeping public areas safe and clean, retaining local businesses, youth/senior services, streets, open space/natural areas and other vital services and facilities; and

Resolution No. _____ (2022 Series) Page 2
R ______
WHEREAS, based on unaudited financials presented in the 2021-22 Year-End Budget Report, the Local Revenue Measure Fund has an unassigned fund balance of approximately $3.8 million.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows:

SECTION 1. The 2022-23 budget is hereby amended to transfer operating budget for City facility remodels at 919 and 990 Palm Street into the Capital Outlay fund; and SECTION 2. The 2022-23 budget is hereby amended to appropriate $2,000,000 of one-time over-realized revenue into a Revenue Stabilization Reserve; and SECTION 3. The 2022-23 budget is hereby amended to appropriate $2,067,846 of unassigned Local Revenue Measure Fund Balance into the operating and capital budgets as presented in the 2021-22 Year End Budget Report and in Table 1 below:

Resolution No. _____ (2022 Series) Page 3
R ______
Table 1: Local Revenue Measure - Allocation of Unassigned Fund Balance Type 3 Wildland Engine Replacement Additional Funding $85,000 Fire Recruit Academy to Address Paramedic Shortage $110,000 Accelerate Fire Pumper (Engine 4) Replacement $900,000
Public Works - Contract Coordinator $65,846
Allocation to Capital Reserve $907,000
TOTAL $2,067,846
Upon motion of _______________, seconded by _____________, and on the following roll call vote:

AYES:

NOES:

ABSENT:

The foregoing resolution was adopted this _____ day of _____________________ 2022. ___________________________
Mayor Erica A. Stewart
ATTEST:
________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________
Teresa Purrington
City Clerk

2023-25 Financial Plan Schedule
There are a variety of possibilities to provide input to the City Council to enable them to establish Major City Goals with the community’s interest in mind. These opportunities are highlighted on the following chart and also listed by date at the bottom of this document.

1. “Setting the Stage” Workshop and the Strategic Scan. A regular Council meeting on Tuesday, November 15, 2022 will be devoted to a comprehensive review of the status of current City plans, goals, policies, and programs. This is an especially appropriate start as the Council goal-setting process should take into consideration the City’s adopted long-term plans, current two-year goals, and an updated economic outlook. Accordingly, staff plans to present reports on the following:
a. FY 2022-23 1st Quarter Review Staff will present a brief budget update of the City's current financial position as compared with the adopted 2022-23 Supplemental Budget.
b. Strategic Scan/Setting the Stage Staff will provide an overview of important statistical information that provides trends and patterns pertaining to social, economic, and environmental factors. This will help set the stage for an overview of the City's core services and how the budget is allocated. This will provide important context for decision making through the 2023-25 financial planning process.

c. Status of Major City Goals This meeting will give an opportunity for staff to give an update on Major City Goals.
d. Status of General Plan Programs As in past year, will present an overview of the status of each General Plan program in each of the ten elements (over 400 programs in total). Organized by element, staff will provide a short summary of each program, whether it has been completed, and if not, a high-level assessment of how challenging it will be to complete.

2. “Budget Foundation” Workshop. This meeting on Tuesday, January 10, 2023 will be dedicated to generating policy guidance from Council that will serve as the foundation for the City’s budget and goal-setting process. Staff plans to cover the following topics at this workshop:
a. Finalize plans for the Community Forum and Council Goal-Setting Workshop.

Staff will present a proposed approach for the forum and goal-setting workshop at this meeting.
b. Review of Financial Plan policies contained in the 2021-23 Financial Plan and update or recommend changes as appropriate. This may include proposed changes to the existing fund balance targets for enterprise funds and the capital replacement funds.
c. Review the organization of the Financial Plan and obtain Council guidance regarding the style of presentation expected or preferred by Council. d. Review the long-term economic forecast.1
e. Hold initial discussion on the considered options and policy framework for paying down the unfunded liabilities. Based on Council feedback, staff would return in February with the plan reflecting these options. Getting guiding principles direction from the Council in February will be helpful in crafting the recommendations contained when Strategic Budget Direction is sought in April 2023.

3. Community Forum. The Community Forum is typically an in person public event where the community can come discuss suggested goals and work programs from Council advisory bodies, community groups and individuals who completed the online Community Priorities Survey. Advisory Body goals will be developed during the fall of 2022 and submitted to staff in final form by mid-December 2022. The Community Priorities Survey will be released in mid-November and open for one month to allow for ample time for residents to participate and for staff to review results. The survey will be similar to prior surveys with one minor change that will allow participants the option to keep current city goals. Staff has researched the use of digital technologies and plan to use real-time data gathering tools at a community forum in early 2023, with options to accommodate those who aren’t able or comfortable using the digital tools.

1 The five year forecast will incorporate audited 2021-22 year end results which will be presented to the City Council on January 17, 2023.

Other Community Outreach Efforts. Following Council approval of the budget calendar, staff will mail notices to community groups, governmental agencies, media organizations and interested individuals inviting them to participate in this process. In addition to these notices, staff plans to place display ads in The Tribune, SLO Journal,, and New Times and use social media in order to encourage the broadest possible participation in this process. Information about the goal-setting and budget process will also be placed on the City’s web site and City Hall.

Staff also intends to again insert an informational flyer in all utility bills (in English and Spanish) inviting the public to participate in the online Community Priorities Survey, goalsetting, and budget process. In the past, this approach has generated hundreds of replies which were distributed to the Council along with a summary of the “top emerging themes.”

4. Mid-Year Report and Guiding Principles for Allocation of Resources. The Mid-Year Review and review of the updated Five-Year Forecast,scheduled for Tuesday, February 7, 2023, will allow the Council an early opportunity to provide guiding principles and direction for paying down unfunded liabilities and efficient allocation of resources with the 2023-25 Financial Plan focusing on community priorities.

5. Council Goal-Setting Workshop. Following the receipt of written and oral comments during the Community Forum, the Council goal-setting workshop will be held on Saturday, February 11, 2023 in the Council Chambers. This will be an all-day workshop to answer the question, “What are the most important, highest priority things for the City to accomplish over the next two years?” Council will be asked to provide up to five goals before the workshop which staff will organize and distribute prior to the workshop. Using an independent facilitator allows all Council members to participate fully in the process; and allows staff to devote their efforts to listening to the discussion. Moreover, the facilitator can assist the Council ensuring that the number and scope of the goals established are appropriate.

6. Major City Goal Work Programs and Strategic Budget Direction. On Tuesday, April 18, 2023, this workshop is a critical part of the budget process. It affords the City Council an opportunity to review the draft work programs and associated financial resources proposed to accomplish Major City Goals established by the City Council in January. At this stage of the process the City Council provides direction on any changes needed to refine these work programs and resource allocations to better achieve the desired outcomes. Additionally, the City Council is asked to provide the City Manager with the key policy direction needed to allocate resources in line with Council’s expectations or to further amend budget or fiscal policies that align with Council direction. This process is extremely helpful so that the Preliminary Financial Plan that is presented to the City Council and community in May mirrors the Council’s expectations as much as possible.

At this meeting, staff will prepare detailed work programs for the Major City Goals in order to:
a. Clearly define and scope the work program.
b. Ensure that there is a clear understanding of the means used in pursuing the goal. c. Convert the general goal into specific action steps, so progress can be measured.

Each work program will provide the following information:

Objective. What is to be accomplished? (This will be based on the objective adopted by the Council at the February 11th goal-setting workshop.) Discussion. What are the factors driving the need for this goal? What actions have already been taken in trying to resolve this problem area? What are the key assumptions? What key challenges, constraints or obstacles can be expected in achieving this goal? What concerns, or issues will remain unresolved even if the goal is achieved? Who are the key stakeholders?
Action Plan. What specific tasks will need to be accomplished in order to achieve the goal, and when will they be completed? These “action steps” are the fundamental building blocks in defining and scoping the work program, and in monitoring the progress in accomplishing the goal over the next two years.

Responsible Department. Who is accountable for getting it done? Financial and Staff Resources Required to Achieve the Goal. What will it take to achieve the goal? Will resources be needed (staffing, contract services, CIP project) to do this?
Outcome: Final Work Product. What are the “deliverables?”

7. Budget Hearings and Budget Adoption. Budget hearings (also known as “Fund Reviews” including the City’s four enterprise funds) are currently scheduled for June 6 th
2and 20th. This will allow for a third meeting to be added for the approval of the 2023-25 Financial Plan, should the need arise.

Council Advisory Body Participation
Consistent with past Council direction, the advisory bodies will again play an important role in the goal-setting process by providing the Council with their recommended goals for 2023-25. Staff will provide advisory body members with background materials outlining their important role in this process. An update on this process is also scheduled to be presented at the next quarterly meeting with the Mayor and advisory body chairs in October 2022. Lastly, staff liaisons are already beginning to work with Advisory Body Chairs in scheduling time for this purpose at upcoming advisory body meetings.

2 Staff will work towards distributing the 2023-2025 Financial Plan two weeks prior to the June 6th meeting or by May 23, 2023.

Table 2: Budget Calendar Dates
Item # Date Responsible Action
1 September 15,
2022
Finance Release of goal template and instructions to
advisory body liaisons.
2 October 4, 2022 Council Approve the 2023-25 Financial Plan Schedule
3 October 20,
2022 Council Quarterly Mayor/Advisory Body Chairs
Meeting
4 November 14,
2022 Finance/Admin Community Priorities Survey Release
5 November 15,
2022 Council
Setting the Stage & the Strategic Scan
workshop on the status of programs, CIP,
MCG
6 December 9,
2022 Finance
Receives written comments from community
groups and interested individuals, and goals
from advisory bodies
7 December 15,
2022 Finance/Admin Community Priorities Survey Closes
8 January 10,
2023 Council
Budget Foundation: Finalizes goal setting
process and plans for public outreach. Review
and provides guidance regarding Financial Plan
Policies. Release prior to holidays
9 January 17,
2023 Council Audit 2021-22 – Annual Comprehensive
Financial Report
10 January 26,
2023 Council/Staff Community Outreach Forum
11 February 7,
2023 Council FY 2022-23 Mid-Year review
12 February 11,
2023 Council Saturday Goal Setting Workshop
13 April 18, 2023 Council
Approves detailed work programs for Major City
Goals. Sets strategic budget direction in
preparation of the Preliminary Financial Plan
14 May 10, 2023 Planning
Commission
Reviews Capital Improvement Plan for
consistency with General Plan
15 May 23, 2023 City Manager Issue finalized budget recommendations and issues preliminary budget
16 June 6, 2023 Council
Evening workshop to review and discuss
Preliminary Budget including General Fund and
Enterprise Funds programs, CIP projects, and
rates. Adopt budget if no changes are
recommended.
17 June 20, 2023 Council Holds continued Financial Plan Review and adopts budget and rates (if necessary).
18 June 27, 2023 Council If required, special meeting to continue to review and adopt budget.

City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: October 4, 2022
TO: Mayor and Council
FROM: Matt Horn, Public Works Director
Prepared By: Wyatt Banker-Hix, Engineer III
VIA: Derek Johnson, City Manager
SUBJECT: ITEM 6b – INTRODUCE AN ORDINANCE AMENDMENT TO CREATE A

UTILITY UNDERGROUNDING DISTRICT WITHIN THE LIMITS OF THE

PRADO BRIDGE PROJECT
Staff received the following questions, regarding Item 6b. The questions are below with staff’s response shown in italics:
1) When is the undergrounding project to begin after approval of the new District 16? Utility undergrounding work will start as the first phase of the entire Prado Bridge project, anticipated to start Summer 2024.
2) How long is the undergrounding project expected to take? Staff does not currently have an estimate on the construction duration for undergrounding work. After creation of the undergrounding district, Staff will work with utility providers to produce final plans and construction documents. Once final construction documents are prepared, a total project duration will be estimated. 3) Will the Prado/Higuera intersection be completely closed for the project duration, or will there be traffic workarounds?
The Prado/Higuera intersection will be closed intermittently during the project duration as necessary to facilitate construction work. It is not currently expected to be completely closed for any extended duration. Staff anticipates the intermittent full closures to be during the night or short durations during the day. Closures would require City approval for traffic control and detours.

Item 6b Correspondence – Prado Bridge Undergrounding and CEQA Page 2 4) Will the Prado Road Bridge Widening Project (proposed start date 2024) dovetail into this project and after that the Prado Interchange (Summer 2025?) Meaning will these 3 projects overlap timewise? I see the potential of Higuera/Prado being closed intermittently for a few years. How will residents/business owners in the affected area gain access?
The Prado Interchange project will not start until the Prado Bridge is nearly complete, in order to satisfy Caltrans funding requirements and to minimize concurrent impacts to businesses and residences in the area. Access for residents and businesses will be maintained throughout construction.
5) During undergrounding, will there be, at any time, an interruption of electrical service? Many of us who live here, myself included, use medical equipment.

PG&E will be responsible for maintaining power throughout construction, but it is likely that there will be temporary outages during the switch over from their existing overhead facilities to the new underground facilities. PG&E as utility provider will be responsible for coordinating with affected properties.
6) During the time Higuera might be closed, accessing southbound Higuera from our mobile park takes you thru a business area, northbound Higuera thru a residential area. Are these areas prepared for the extra traffic?
During preparation of the construction documents for the project, staff will develop traffic control requirements for project construction, including requirements for contractor traffic control plans and any proposed detours. Review and approval of traffic control plans often includes conditions for reduction of impacts to detour streets, such as traffic control devices and signage.

Item 6b
Department: Public Works
Cost Center: 5009
For Agenda of: 10/4/2022
Placement: Public Hearing
Estimated Time: 30 Minutes
FROM: Matt Horn, Public Works Director
Prepared By: Wyatt Banker-Hix, Engineer III
SUBJECT: INTRODUCE AN ORDINANCE TO AMEND TITLE 13, CHAPTER 13.12

OF THE MUNICIPAL CODE TO ADD AN UNDERGROUNDING DISTRICT

COMPRISING THE LIMITS OF THE PRADO BRIDGE REPLACEMENT

PROJECT AND ADOPT A RESOLUTION APPROVING THE MITIGATED

NEGATIVE DECLARATION FOR THE PROJE

RECOMMENDATION

1. Introduce a Draft Ordinance entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, amending Section 13.12.040 of the San Luis Obispo Municipal Code to Establish a New Underground Utility District 16”; and

2. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving the Mitigated Negative Declaration for the Prado Bridge Replacement Project” adopting the final Initial Study – Mitigated Negative Declaration (IS-MND).

POLICY CONTEXT
Procedures for underground utility districts are prescribed in Chapter 13.12 (Underground Utilities) of the City’s Municipal Code. Chapter 13.12.030 requires passage of an Ordinance and notification of those affected prior to undergrounding any overhead utilities.

The recommended action, and Prado Bridge Replacement project, helps fulfill the Major City Goal of Climate Action, Open Space, and Sustainable Transportation, specifically Alternative and Sustainable Transportation identified as Strategic Approach #4.4 in the adopted 2021-23 Financial Plan. Within the City’s adopted Active Transportation Plan, Prado Road is identified as a Tier 1 Bicycle and Pedestrian1 corridor. Separated and protected bicycle and pedestrian improvements are included in the project design, and underground utility infrastructure will eliminate barriers such as electrical and telephone poles and guy wires that would restrict user comfort, visibility, and access through bicycle and pedestrian pathways.

1 ATP Tier 1 Project List:
https://www.slocity.org/home/showpublisheddocument/30467/637587480707370000

Item 6b
Undergrounding utilities would also create a more resilient corridor along South Higuera Street, shielded from vehicular impact as well as wind and seismic events. Furthermore, Undergrounding can be accomplished in conjunction with the Prado Bridge Replacement project, providing a cost and time savings while furthering this important Major City Goal.

REPORT IN BRIEF
The Prado Bridge Replacement Project is a legacy bridge replacement and intersection expansion project located at the Prado Road/South Higuera Street Intersection.

Introduction of an undergrounding ordinance within project limits will allow for the removal of existing overhead utilities and provide a safer intersection with cleaner aesthetics.

In addition to the underground utility district, the Initial Study – Mitigated Negative Declaration (IS-MND) is also now ready for adoption. Adoption of the IS-MND by Council, will allow the project to move forward and complete other critical items of work such as Right of Way (ROW) negotiations and construction permit applications.

DISCUSSION
Background
To date, fifteen (15) underground districts have been implemented in accordance with procedures identified in the Municipal Code2. The recommended passage of the proposed ordinance (Attachment A) would be the sixteenth undergrounding district created since 1972 and follow the project limits (Attachment B).

The project team has completed a California Environmental Quality Act (CEQA) document (Attachment C) that is ready for adoption by the City Council. In order to start the environmental permitting process, the CEQA document must be reviewed and adopted via Council Resolution (Attachment D).

The Prado Creek Bridge Replacement Project consists of the removal and replacement of the bridge across San Luis Obispo Creek at Prado Road. Staff identified this bridge as deficient and began discussions with Caltrans to seek and negotiate replacement strategies starting in 2013. With the future Prado Interchange and extension of Prado Road to Broad Street, the widening of the bridge and adjacent intersection was considered the first step in a new Prado Road corridor.

The existing bridge is structurally deficient and too narrow to carry the projected multimodal traffic along Prado Road. The proposed bridge will carry two lanes of traffic in each direction as well as separated pedestrian and cyclist facilities. In order to protect San Luis Creek and reduce the potential for flooding, the bridge will eliminate any columns placed within the Creek vicinity.

2 https://sanluisobispo.municipal.codes/Code/13.12.040

Item 6b
In addition to the bridge replacement, the Prado Road/South Higuera Intersection will be widened to create a protected style intersection and is the first step in the revitalization of the Prado Road corridor as identified in the Active Transportation Plan.

Project Development and Caltrans Oversight
A large portion of this project’s funding is provided by the Federal Government’s Highway Bridge Program (HBP) administered through Caltrans. Caltrans Local Assistance Division oversees this City-owned project and is responsible for reviewing and approving City plans throughout the project process. Due to Federal funding on the project, a National Environmental Policy Act Document (NEPA) is required alongside a CEQA document.

Caltrans is the NEPA lead and will prepare this document separately, although City staff lead the creation of the technical reports required for the NEPA document. Council will not be required to review or approve the NEPA document.

Note this project is related to the Prado Interchange Project in that the City and Caltrans agree that the construction of this project prior to the opening of the Prado Interchange for public use is necessary due to traffic impacts. This will ensure smooth flow of traffic along Prado Road and prevent two adjacent federally funded projects from occurring simultaneously, which could trigger the projects combining into one and forcing a consolidation of the two separate teams and priorities.

This project, the Prado Bridge Replacement project, is ahead of the Prado Interchange in terms of project development, and has entered the final design phase, called Plans, Specifications and Estimate (PS&E). Note during this phase the project team will also begin Right of Way ”ROW” acquisition and permitting efforts with regulatory agencies.

Currently this project is on schedule and intended to start and end construction prior to the commencement of construction of the Prado Interchange Project.

Final Design, Permitting, and ROW acquisition is anticipated to complete in early 2024, with construction starting in the summer of that year and lasting approximately two years:

Note that permitting agencies, ROW Acquisition, and Utility relocation are considered sources of project risk and may drive future schedule updates.

Utilities and Undergrounding
Both Prado Road and South Higuera Street contain electrical and communication overhead utilities (present on wooden power poles). South Higuera Street specifically is a major corridor for many utility companies, whose lines provide service for the southern portion the City of San Luis Obispo (City) as well as the County as a whole.

Fig. 1: Prado Bridge - Project Timeline to Construction Project Phase Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 PS&E
Right of Way:

Construction
FY 22/23 FY 23/24 FY 24/25 FY 25/26

Item 6b
Pacific Gas and Electric (PG&E) is the primary overhead utility and is responsible for providing electrical power throughout the City. Many communications companies like Charter and AT&T attach their overhead cables to poles owned by PG&E and will underground their utilities in turn.

In 1978, the City and PG&E executed a franchise agreement (Attachment E), formally granting PG&E access to public ROW with the condition they would relocate their facilities at no cost to the City when requested. Another part of the franchise agreement stated the City’s intent to underground overhead facilities whenever possible, and share that undergrounding cost with PG&E.

Staff recommends that the overhead facilities within the project limits be undergrounded.

If existing overhead utilities are not undergrounded, the new intersection geometry and multi-modal focus would be compromised by the number of relocated overhead poles that would crowd the project site, impeding site lines and requiring considerable effort to prevent guy wires from interfering with traveling cyclists.

Undergrounding these facilities would also help create a more resilient utility corridor, decreasing the likelihood of an interruption in services from a vehicular collision or inclement weather. Users would also benefit from the lack of visual clutter and improved aesthetic experience that comes with the removal of overhead facilities.

In order to start the undergrounding process, an undergrounding district must be created via the proposed Ordinance within project limits. City and PG&E staff will then meet to discuss the project scope and costs, with the intent of coordinating undergrounding activities with the start of project construction. Staff anticipates that this will provide a cost savings due to project scale, prevent multiple periods of public inconvenience due to road closures, and provide an opportune window for other companies to perform their undergrounding/relocations.

Environmental Review
The Prado Bridge spans San Luis Obispo Creek and will require work within the creek bed, including the removal of riparian vegetation and grading. There are also impacts to traffic, noise, greenhouse gas emissions and endangered species that were considered.

The project team has prepared a CEQA document to address these concerns, called an Initial Study – Mitigated Negative Declaration (IS-MND).

The IS-MND documents each category of concern (traffic, endangered species, land use, water quality) and the level of impact this project will have on each. Each area of potential impact (noise, traffic, endangered species) was studied in depth via a series of technical reports prepared by an environmental consultant. After each study was reviewed and approved by both City and Caltrans staff (these studies will be used for the NEPA document as well), the IS-MND itself could be compiled. This process has taken three years to complete and is ready for Council’s consideration and adoption.

Item 6b
Many of the technical studies developed to support the IS-MND indicated that project will not impact specific resources, that some areas are slightly impacted, and finally some will require mitigation measures to reduce impacts of the project. Each mitigation measure is included in the document, which the contractor that builds the project and City will be required to implement to reduce project impacts. Areas of resource protection or mitigation measures identified were in the areas of Air Quality, Biological Resources and Transportation. Some of the specific mitigation measures include:

1. Reduce and/or eliminate idling construction equipment to protect air quality.

2. Minimize the disturbed area by the project to reduce dust generated.

3. Provide street sweeping and wheel washing to reduce dirt tracked onto streets which reduce impacts to water quality.

4. The project will be surveyed prior to the start of construction to identify and protect some species of concern including Monarch Butterflies, Red Legged Frog, and Steelhead Trout. The project site will also be monitored during construction by a qualified biologist.

5. Screen all dewatering systems and specifically pumping equipment to avoid sucking in wildlife into pumps while operating.

6. Implement appropriate traffic control plans during construction that reduce construction impacts to the community while keeping construction workers safe.

In addition to the above mitigation measure that will be implemented during construction, soil sampling has been completed to ensure that the site is clear of hazardous waste materials and contamination.

Previous Council or Advisory Body Action
Previous Councils have declared undergrounding districts within the City via Ordinance, often coincident with new development or redevelopment of major corridors. The last time a City-funded project included undergrounding work was in 2005 with the widening of Broad Street/State Route 227. (Ordinance 1442)
As noted previously, the Franchise Agreement between the City and PG&E in 1978 outlines the undergrounding process and cost splitting.

Public Engagement
Staff and consultants hosted a public meeting on July 26, 2022 to discuss the Prado Bridge Replacement This was not required as part of the IS-MND or Undergrounding process, but staff believed the Public would benefit from an in-person interaction prior to formal adoption of either item. Caltrans was invited to the meeting, and mailers were sent to businesses and residences within one half mile of the project limits.

The Public meeting started with a project overview, in which environmental mitigation, utility undergrounding, schedule, cost and next steps to delivery were discussed. After that presentation, there were stations where members of the public could speak with staff for additional information on project management, traffic impacts, street and bridge design, as well as environmental mitigation. Attendees could also make formal comments on the IS-MND, or broader project comments.

Item 6b
As required by the Municipal Code, a mailer notice was sent to all potentially affected properties and published in The New Times 30 days prior to this first hearing.

The City is designated the lead agency for CEQA, and after the preparation of the document, a comment period and public meeting, it is ready for Council approval.

Approval of the IS-MND will allow staff to begin pursuit of the environmental permits and ROW negotiations, both considered critical path items. The IS-MND was circulated and sent to State/Federal/Tribal agencies for their review, and invited to the public meeting.

Each party was offered the 30-day comment period, and Tribes were offered formal consultation with staff prior to the public review period. There were no comments received from any Tribe or agency or member of the public.

CONCURRENCE
This project has concurrence from the Community Development, Public Works, and Utilities Departments.

Caltrans has reviewed the environmental technical studies and CEQA document. They concur it is ready for approval.

ENVIRONMENTAL REVIEW
An Initial Study/Mitigated Negative Declaration (IS/MND) was prepared for the Prado Bridge project. The IS/MND and associated Notice of Intent to Adopt a Mitigated Negative Declaration was circulated for public and agency review from July 15 to August 15, 2022.

The IS/MND was submitted to the State Clearinghouse for distribution to state agencies, affected federal and local agencies, and tribal representatives.

As noted above, a public meeting was held at the City’s Corporation Yard (25 Prado, San Luis Obispo) on July 26, 2022. Prior to the public meeting, postcards were distributed to affected property owners inviting the public to the meeting. No comments or concerns were received in response to the IS/MND. The publicly circulated IS/MND addresses overhead utility relocation and has been clarified to specify the undergrounding of existing overhead utilities within the project area consistent with the proposed Ordinance. The clarifications are minor, the area of project disturbance would not change, no additional significant effects would occur, and no new or modified mitigation measures would be required. Therefore, pursuant to CEQA Guidelines Section 15073.5, recirculation of the IS/MND is not required.

FISCAL IMPACT
Budgeted: Yes Budget Year: 2022-2023
Funding Identified: Yes

Item 6b
Fiscal Analysis:

This project is considered a legacy project, with planning and design efforts funded by multiple past budget cycles beginning in 2011. The 2021-23 Financial Plan budgeted funds for final design, ROW, Construction Management, Permitting and Construction phases.

Utility undergrounding was not considered when the current Financial Plan was developed, but those costs along with construction cost escalation seen in the past two years will be included within updated budget requests as part of the upcoming 2023-25 Financial Plan. There is sufficient budget in the project account (#91252) to continue the design and permitting efforts with PG&E as well as the other overhead utilities as seen below:

Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $1,243,013.54 $0
Airport Area
Impact Fee
$2,000.00 $0
Transportation
Impact Fee
$3,875,268.50
Total $5,120,282.04 $0 N/A N/A

ALTERNATIVES

1. Decline the introduction of the Underground Ordinance. City Council could choose to allow overhead utility providers to relocate instead of undergrounding their facility. Staff does not recommend this option. The resulting project would be less resilient, impede the pedestrian/cyclist facilities as well as conflict with the City’s vision of undergrounding all utilities as the opportunity arises.

2. Decline adoption of the IS-MND. City Council could choose to not adopt the IS-MND.

Staff does not recommend that option. It would delay permitting and ROW, both of which are considered critical to timely project delivery.

ATTACHMENTS
A - Draft Ordinance to establish a new Underground Utility District 16 B - Proposed Underground District Overview Map
C - Prado Bridge Replacement Project IS-MND
D - Draft Resolution approving the Prado Bridge Replacement Project IS-MND E - PG&E Franchise Agreement (1978)

O ______
ORDINANCE NO. _____ (2022 SERIES)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AMENDING SECTION 13.12.040 OF THE SAN

LUIS OBISPO MUNICIPAL CODE TO ESTABLISH A NEW
UNDERGROUND UTILITY DISTRICT 16
WHEREAS, The City of San Luis Obispo wishes to improve the resiliency and appearance of the City by the removal of overhead utilities; and WHEREAS, the limits of the Prado Bridge Replacement Project, Specification 91252 (Project) will require significant utility work during construction; and WHEREAS, the City and overhead utility purveyors will be able to share undergrounding costs.

NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo as follows:

SECTION 1. The following Subsection 15 of Section 13.12.040 of the San Luis Obispo Municipal Code is hereby added to establish Underground District 16:

15. That portion of Higuera Street and Prado Road in the City of San Luis Obispo, County of San Luis Obispo, State of California, described as follows:

Beginning at a point on the centerline of Higuera Street that bears South 27°41'25" West 161.18 feet from a found brass pin in monument well marking the intersection of the centerline of Higuera Street with the centerline of the Higuera Street Cul-de-sac as shown on the Record of Survey filed in Book 114 of Records of Surveys at page 89 and on the map of Higuera Commerce Park Tract No. 703 filed in Book 10 of Maps at page 50, in the Office of the County Recorder of said County, from which said brass pin a found pin in monument well marking the intersection of the centerline of Higuera Street with the centerline of Tank Farm Road as shown on said maps bears South 27°41'25" West 798.90 feet [South 26°09'20" West 798.84 feet per said record of survey]; Thence North 62°18'35" West, 42.00 feet (L1) to the northwesterly line of Higuera Street; Thence along said line and along the northwesterly line of the offer to dedicate described in the document recorded in Volume 3020 of Official Records at page 1 in the Office of the County Recorder of said County North 27°41'44" East 709.93 feet to the beginning of a curve to the left, having a radius of 20.00 feet;
Thence continuing along said line and along the southwesterly line of Prado Road, 84 feet wide, along the arc of said curve through a central angle of 90°37'00" a distance of

31.63 feet;

Ordinance No. _____ (2022 Series) Page 2
O ______
Thence continuing along the southwesterly line of Prado Road North 62°55'10" West, 588.88 feet to a point on the northwesterly prolongation of the south line of the “24’ strip to be dedicated to City of San Luis Obispo” shown on Parcel Map SLO-71-178 filed in Book 6 of Parcel Maps at page 70, in the Office of the County Recorder of said County; Thence North 66°21' 50" East, 108.52 feet (L2) to the southwesterly corner of Parcel 2 of Parcel Map No. SLO-73-495 filed in Book 14 of Parcel Maps at page 4 in the Office of the County Recorder of said County;
Thence South 62°55' 10" East, 160.00 feet to the southeasterly corner of said Parcel 2 and the southwesterly corner of Parcel 2 of Parcel Map No. SL 05-0428 filed in Book 68 of Parcel Maps at pages 66-68, in the Office of the County Recorder of said County; Thence along the northwesterly line of said Parcel 2 North 27°45'50" East, 8.00 feet to the northeasterly line of the 8.00 foot offer to dedicate for streets shown on said map and the northerly line of Prado Road;
Thence along said line South 62°55'10" East, 367.41 feet to the beginning of a nontangent curve to the left having a radius of 951.00 feet, the center of said curve bears North 69°11'40" West and to the westerly line of the variable width offer to dedicate for streets shown on said map and to the westerly line of Higuera Street; Thence, along the westerly line of Higuera Street, along the arc of said curve through a central angle of 13°59'45" a distance of 232.31 feet;
Thence South 83°11'25" East, 89.00 feet to the easterly line of Higuera Street as shown on the Record of Survey filed in Book 16 of Licensed Survey Maps at page 75 and to the beginning of a non-tangent curve to the right having a radius of 1040.00 feet, the center of said curve bears North 83°11'25" West;
Thence along said easterly line and along the arc of said curve through a central angle of 14°08'33" a distance of 256.71 feet to the beginning of a reverse curve having a radius of

20.00 feet;
Thence along said easterly line and along the northeasterly line of Prado Road as shown on said Record of Survey along the arc of said curve through a central angle of 78°11'33" a distance of 27.29 feet to the beginning of a reverse curve having a radius of 542.00 feet;
Thence continuing along said northeasterly line along the arc of said curve through a central angle of 10°50'34" a distance of 102.57 feet to the beginning of a reverse curve having a radius of 458.00 feet;
Thence continuing along said northeasterly line along the arc of said curve through a central angle of 19°23'21" a distance of 154.99 feet;

Ordinance No. _____ (2022 Series) Page 3
O ______
Thence South 24°12'45" West, 84.01 feet to the southwesterly line of Prado Road as shown on said Record of Survey and to the beginning of a non-tangent curve to the right having a radius of 542.00 feet, the center of said curve bears North 24°12'45" East; Thence along said southwesterly line and along the arc of said curve through a central angle of 19°23'05" a distance of 183.37 feet to the beginning of a non-tangent curve to the left having a radius of 458.00 feet, the center of said curve bears South 43°27'57" West;
Thence continuing along said southwesterly line along the arc of said curve through a central angle of 08°11'24" a distance of 65.47 feet (C1) to the beginning of a compound curve having a radius of 20.00 feet;
Thence along said southwesterly line and along the southeasterly line of Higuera Street as shown on said Record of Survey, along the arc of said curve through a central angle of 97°33'58" a distance of 34.06 feet (C2);
Thence continuing along said southeasterly line as shown on the Record of Survey filed in Book 114 of Records of Surveys at page 89 South 27°42'35" West, 144.77 feet (L3) to the southwest corner of the land described in the document recorded in Book 4018 of Official Records at page 380 in the Office of the County Recorder; Thence along the south line of said land and along the easterly line of Higuera Street South 88°26'48" East, 3.39 feet (L4) to the easterly line of the offer of dedication for street purposes (width varies) as shown on Parcel Map SLAL-91-102 filed in Book 50 of Parcel Maps at pages 51, in the Office of the County Recorder of said County; Thence along said easterly line the following six courses:

Thence South 27°41'51" West, 19.61 feet (L5);
Thence South 62°18'09" East, 7.50 feet (L6);
Thence South 27°41'51" West, 65.70 feet (L7);
Thence South 62°18'09" East, 3.00 feet (L8);
Thence South 27°41'51" West, 84.40 feet (L9);
Thence North 62°18'35" West, 13.44 feet (L10);
Thence continuing along said easterly line and its southerly prolongation South 27°41'44" West, 393.44 feet;
Thence North 62°18'35" West, 42.00 feet (L11) to the point of beginning.

Ordinance No. _____ (2022 Series) Page 4
O ______
Containing 3.84 acres more or less.

Property owners shall be prepared to receive underground services by June 30, 2024.

Overhead facilities shall be removed from public property by June 30, 2030.

Property owners shall not incur any costs required for conversions.

SECTION 2. A summary of this ordinance, approved by the City Attorney, together with names of the Council Members voting for and against it, shall be published at least five days prior to its final passage, in The New Times, a newspaper published and circulated in the city of San Luis Obispo. This ordinance will go into effect at the expiration of thirty days after its final passage.

INTRODUCED on the _____ day of __________, 2022, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the _____ day of _______, 2022, on the following vote:

AYES:

NOES:

ABSENT:
___________________________
Mayor Erica A. Stewart
ATTEST:
_______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________
Teresa Purrington
City Clerk

N 27° 41' 44" E709.93'
N 62° 55' 10" W588.88'
S 62° 55' 10" E367.41'
∆=13°59'45" L=232.31' R=951.0 '
L=102.57', R=542.00'
D=10° 50' 34"
R=458.00 R=
' 5 42.00'
R=10 40.0 ' L=27.29', R=20.00' ∆ D=78° 11' 33"
=14°08'3 " L
=256.71'
L=31.63', R=20.00'
D=90° 37' 00"
N 27° 45' 50" E

8.00'
N 69° 11' 40" W RAD.

N 43° 27' 57" E RAD.

C2C1
∆=19°23'21" L=15 4.99' ∆=19°23'05" L=183.37'
PARCEL 1
PM SL 05-428
68/PM/67
PARCEL 2
PM SL 05-428
68/PM/67
PARCEL 2
PM SLO 73-495
14/PM/4

PORTION
PARCEL 1
PM SLO 71-178
6/PM/70
PARCEL 2
PM SLO 71-178
6/PM/70
(EXCEPT NLY
24 FEET)

PORTION
PARCEL 1
PM SLO 71-178
6/PM/70

PORTION
PARCEL 1
PM SLO 71-178
6/PM/70
LOT 1
17 MB 71
4018 OR 380 114 LS 89
PARCEL 1
SLAL-91-102
50 PM 51
PARCEL 2
SLAL-91-102
50 PM 51
PORTION LOT 28
16 LS 75
PARCEL 2
SL 85-237
45 PM 73

PORTION
LOT 27
16 LS 75
S 83° 11' 25" E

89.00'
LEGEND

FOUND MONUMENT
PER 114/RS/89

AREA DESCRIBED

RADIAL BEARING
S 27° 41' 25" W 798.90'
RAD. S 27° 41' 44" W 393.44'

PARCEL B
PM SLO 84-176
37/PM/76
S 62° 55' 10" E 160.00'
161.18'
L1
L2
L3
L4
L5
L6
L7
L8
L9
L10

POINT OF

BEGINNING
L11

HIGUERA STREET

PRADO ROAD
(RAD.) S 24° 12' 45" W 84.01'
S 83° 11' 25" E
RAD.

SAN LUIS OBISPO, CA 93401 T 805 544-4011 www.wallacegroup.us F 805 544-4294 612 Clarion Court EXHIBIT B- PROPOSED HIGUERA STREET AND

PRADO ROAD UNDERGROUND DISTRICT SAN

LUIS OBISPO,CA
Sheet 1 of 2
DRAWN BY:

DATE :

DRAWING :

JOB No. :

GM
0061-0077
9/13/2022
PRADO
0 65 130 260
SCALE
1 INCH = 130 FEET

EID-0459-2020
CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2020 1 INITIAL STUDY

ENVIRONMENTAL CHECKLIST FORM
For EID-0459-2020

1. Project Title:

Prado Road Bridge Replacement

2. Lead Agency Name and Address:

City of San Luis Obispo
919 Palm Street
San Luis Obispo, CA 93401

3. Contact Person and Phone Number:

Wyatt Banker Hix, Engineer III
(805) 783-7859

4. Project Location:

The project is located approximately 1,400 feet east of U.S. Highway 101 on the western segment of the signalized intersection of Prado Road and South Higuera Street.

5. Project Sponsor’s Name and Address:

City of San Luis Obispo
Wyatt Banker Hix, Engineer III
919 Palm Street
San Luis Obispo, CA 93401
(805) 783-7859

6. General Plan Designations:

Public Right-of-Way

7. Zoning:

N/A

8. Description of the Project:

The City of San Luis Obispo (City) proposes to replace the existing Prado Road Bridge over San Luis Obispo Creek with a wider, single-span bridge structure and construct roadway improvements to Prado Road and the Prado Road/South Higuera Street intersection (project). The project also includes the restoration and enhancement of an approximately 0.753-acre off-site mitigation area located within the Righetti Ranch development area in the vicinity of the Tank Farm Road/Orcutt Road/Union Pacific Railroad (UPRR) corridor to offset unavoidable temporary and permanent project-related impacts to riparian habitat and jurisdictional water features. The project also includes construction of a noise barrier wall to be located along the northeastern corner of the Prado

EID-0459-2020
CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2020 2 Road/South Higuera Street intersection to reduce vehicle-related noise impacts to nearby residential uses. The proposed project is described in further detail below.

The City has applied for Highway Bridge Program (HBP) funding for eligible bridge-related construction costs.

The HBP is funded by the Federal Highway Administration (FHWA) and administered by the California Department of Transportation (Caltrans). Therefore, the project has been designed and would be required to be implemented in compliance with applicable FHWA and Caltrans standards and regulations.

Purpose and Need
In 2019, a Caltrans Structure Maintenance Routine Inspection Report gave the existing Prado Road Bridge structure a Sufficiency Rating (SR) of 73.5, with a status of “Structurally Deficient” (SD). The existing Prado Road Bridge was also previously deemed functionally obsolete, as the existing two-lane bridge has no bicycle or pedestrian facilities and recent traffic studies indicate that the bridge lacks adequate width to accommodate existing and projected future multimodal (vehicular/bicycle/pedestrian) traffic demands. The City and Caltrans have concurred that bridge replacement is an appropriate action to address these deficiencies.

The primary purpose of the proposed project is to replace the structurally deficient bridge, with secondary consideration for addressing the functional obsolescence of this facility. Additional goals of the project are to provide bicycle and pedestrian facilities across the bridge and to improve multimodal operations at the Prado Road/South Higuera Street intersection. The need of the project is to provide a structurally adequate bridge that safely accommodates expected multimodal traffic.

Bridge Replacement
The existing bridge is a three-span, reinforced concrete, “T” beam bridge built in 1957 spanning San Luis Obispo Creek. The existing bridge is approximately 123 feet long by 26.5 feet wide and currently supports Prado Road, a two-way, east-west arterial roadway with a single vehicle lane in each direction and no bicycle or pedestrian facilities.

The proposed project would replace the existing bridge with a wider, precast, concrete I girder, single-span bridge that spans the creek without the need for supports to be placed in the creek bed. The replacement bridge would have a cross-section that includes four 12-foot-wide through lanes, one 12-foot-wide left-turn lane, one 12-footwide right-turn lane, two 5-foot-wide shoulders/bike lanes, and a 2-foot-wide striped median, for a total curb-tocurb width of 84 feet. Consistent with the City’s Active Transportation Plan, which identifies future plans for physically separated bicycle facilities on both sides of the Prado Road corridor, the replacement bridge cross section includes a 13-foot-wide raised surface on both sides, accommodating 3-foot-wide stamped concrete buffers, 5-foot directional Class IV bikeways (protected bike lanes), 5.5-foot-wide sidewalks, and 1-foot-wide concrete barriers on each side, resulting in an overall proposed bridge width of 114 feet.

Roadway and Intersection Improvements
Based on traffic forecasts developed for the City’s 2035 General Plan Land Use and Circulation Element (LUCE) and several subsequent Environmental Impact Reports (EIRs) for private development projects, in order to maintain acceptable traffic operations through a cumulative horizon year of 2035, the Prado Road corridor requires widening to five lanes, including a center median/turn lane. The cumulative horizon year scenario assumes buildout of the city and the ultimate construction of a full-access interchange at US 101/Prado Road, including both northbound and southbound ramps. In accordance with current City transportation and circulation plans, the Prado Road/South Higuera intersection would remain signal-controlled with widening to provide four vehicular through lanes (two in each direction), a left-turn lane, and a dedicated right-turn lane at the west leg.

A Project Study Report (PSR) was prepared for the US 101/Prado Road Interchange (Prado Interchange PSR, approved April 2018). Using traffic forecasts from the Prado Interchange PSR, a traffic operations analysis was conducted for the Prado Bridge Replacement Project for year 2035 conditions with only a partial-access interchange in place at US 101/Prado Road (northbound ramps only). To maintain acceptable traffic operations this analysis also shows the Prado Road corridor would require widening to five lanes (two through lanes in each direction and a center median/turn lane). Though not a part of the HBP program, intersection traffic analysis shows the Prado

EID-0459-2020
CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2020 3 Road/South Higuera Street intersection would operate acceptably with signal control and widening to provide five lanes at the east leg and six lanes at the west, north, and south legs. The resulting lane configuration would include the following:
x West Leg (Prado Road west of South Higuera Street, carries across the replacement Prado Road bridge) o Four (4) east–west through lanes (two in each direction) o One (1) eastbound to northbound left-turn lane
o One (1) eastbound to southbound right-turn lane
x East Leg (Prado Road east of South Higuera)
o Four (4) east-west through lanes (two in each direction) o One (1) westbound to southbound left-turn lane
x North Leg (South Higuera Street north of Prado Road)
o Four (4) north–south through lanes (two in each direction) o Two (2) southbound to eastbound left-turn lanes
x South Leg (South Higuera Street south of Prado Road)
o Four (4) north–south through lanes (two in each direction) o Two (2) northbound to westbound left-turn lanes
The proposed replacement bridge reflects a minimum cross section with six vehicular travel lanes. The proposed replacement bridge would not preclude the ultimate plans for seven lanes at each leg of the Prado Road/South Higuera Street intersection with the eventual addition of southbound ramps at the US 101/Prado Interchange, as identified in the LUCE and previous development project EIRs. An additional eastbound left-turn lane (seventh lane) could be accommodated at a future date with striping modifications if warranted, but the proposed project does not propose to widen the bridge to a seven-lane configuration at this time.

Bob Jones Bicycle/Pedestrian Trail Connectivity
The project site is located directly adjacent to the Bob Jones Bike Trail, also known as the Bob Jones City to Sea Trail, a paved Class 1 dedicated bicycle and pedestrian path that includes segments located in the city of San Luis Obispo, the county of San Luis Obispo, and the community of Avila Beach. The segment adjacent to the project site terminates at the southwest corner of the Prado Road/South Higuera Street intersection. The City’s Active Transportation Plan identifies the extension of the Bob Jones Bike Trail as a future bicycle and pedestrian project that would play an important role in the future bicycle and pedestrian network. The proposed project includes the construction of protected intersection improvements at the Prado Road/South Higuera Street intersection with separate, channelized bike and pedestrian paths and high-visibility crosswalks. The west leg of the intersection would include a two-way bike crosswalk to facilitate connections between the existing terminus of the Bob Jones Trail and a potential future extension north of Prado Road.

Noise Barrier
The project includes construction of a noise barrier at least 6 feet in height located at the edge of the road shoulder along the northeast corner of the intersection of South Higuera Street and Prado Road (refer to Optional Noise Barrier Location Map, Attachment 5). This barrier would be approximately 400 feet in length and would reduce noise levels from vehicle traffic as perceived from the adjacent residential units by a maximum of 7 decibels (dB).

The noise barrier would replace the existing wooden fence currently located along the northeastern corner of the Prado Road/South Higuera Street intersection and would potentially require removal of portions of existing adjacent landscaping.

In accordance with the Caltrans Traffic Noise Analysis Protocol for New Highway Construction and Reconstruction, Retrofit Barrier Projects (Protocol), noise abatement components must be considered for

EID-0459-2020
CITY OF SAN LUIS OBISPO INITIAL STUDY ENVIRONMENTAL CHECKLIST 2020 4 reasonableness and feasibility as required by 23 Code of Federal Regulations (CFR) 772 and the Protocol. Overall reasonableness of noise abatement measures is determined by the noise reduction design goal and the cost of noise abatement per a Noise Abatement Decision Report (NADR). The NADR prepared for the project found a noise barrier abatement measure was reasonable for residences on the northeast corner of the intersection. Per the Protocol, the next step in determining whether a noise barrier should be constructed was to survey the viewpoints of the benefitted receptors (including property owners and residents of benefitted receptor locations) to determine if those stakeholders wanted the noise barrier to be constructed. The results of the survey concluded that the majority of stakeholders were in favor of the noise barrier being constructed. Therefore, construction of the noise barrier has been incorporated into the project and associated environmental impacts of its construction have been evaluated in this document.

Construction Details
Site Preparation
Trees, bushes, and landscaping in areas needed for construction access and activities would be removed as necessary. Construction activities would be limited to approved project limits of disturbance. The proposed bridge replacement and road improvements would result in the disturbance of approximately 8 acres and would require approximately 7,800 cubic yards of cut material and 480 cubic yards of fill material (net cut of 7,320 cubic yards) and the maximum area disturbed per day would be 0.5 acre.

Based on annual precipitation and timing of construction work, San Luis Obispo Creek could have some water flowing through the channel during construction. In that case, dewatering and a diversion of the water would be required to accommodate construction activities within the creek. Channel flow would be diverted using diversion culverts with coffer dams upstream and downstream of the work area and/or other temporary dewatering measures (e.g., pipes, sandbags, temporary fill). The culverts would intercept the water upstream and release the water downstream of the construction activities, or the water could be pumped from the upstream side of the work to the downstream side of the creek. If groundwater is encountered, it would be pumped to sediment control baffles or basins and then released as clean flow into the downstream area. Excavation of the creek banks at Prado Road would be required to accommodate the new concrete abutments and associated retaining walls. Any excess material would be hauled off-site to an approved disposal facility, as necessary.

Bob Jones Bike Trail Bridge Relocation
The replacement Prado Road Bridge structure is expected to require relocation of the existing Bob Jones Bike Trail bridge and trailhead statue. The eastern abutment of the existing Bob Jones Bike Trail bridge is located approximately 30 feet south of the existing southerly curb of Prado Road and would need to be shifted southward to accommodate the widened Prado Road Bridge. The westerly abutment location does not conflict with the widening and therefore a rotation of the bridge alignment would be centered at that end. Rotation of the easterly end of the bike path bridge is expected to require new cast-in-drilled-hole (CIDH) piling to be placed at the east abutment and would require the widening/modification of the existing abutments. It is anticipated that the existing prefabricated bridge could be lifted by crane, temporarily moved, and then placed onto the realigned abutments once modifications are completed. During this phase of construction, the connection of the Bob Jones Trail to Prado Road west of the creek would remain open for continuity of trail use. Once the bridge is realigned, a temporary trail connection from the east side of the bridge to the sidewalk on South Higuera Street would be constructed to maintain trail use while the roadway and vehicle bridge construction requires the closure of the west bank trail connection to Prado Road.

Pile Installation, Abutment, Retaining Walls
The new bridge abutments would be aligned and constructed behind the existing bridge abutments and would be supported on cast-in-drilled-hole (CIDH) piles. To construct the new bridge abutments, existing abutment excavation and the drilling of holes for the piles would proceed, the reinforcing steel cages would be placed in the holes, and then the holes would be filled with concrete. Once the dewatering culverts and cofferdams are in place, steel piles for creek bank soldier pile retaining walls would also be installed. The steel piles would be placed in drilled holes and filled with concrete to the elevation where the lagging would be placed. The creek soldier pile