City Council
AGENDA
Tuesday, October 3, 2023, 5:30 p.m.
Council Chambers, 990 Palm Street, San Luis Obispo
**ITEM 1c HAS BEEN REMOVED FROM THE AGENDA AND CONTINUED TO A DATE UNCERTAIN.
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REGULAR MEETING BEGINS AT 5:30 PM
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•
CLOSED SESSION MEETING BEGINS AT 5:00 PM (Revised Time) Zoom: To join the Closed Session, click this link https://slocity-org.zoom.us/j/87454078099 on any computer or mobile device. Public comment will be accepted at the beginning of the meeting, then the public will be dismissed as Closed Sessions are confidential. Press the “raise your hand” button to indicate you would like to speak. You will be notified when you’ve been unmuted and it’s your turn to speak. Comments are limited to 3-minutes. •
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Pages
1. CLOSED SESSION: STARTS AT 5:00 PM (Revised Time)
1.a CALL TO ORDER
Mayor Erica A. Stewart will call the Closed Session Meeting of the San Luis Obispo City Council to order in the Council Hearing Room at City Hall, 990 Palm Street, San Luis Obispo.
1.b PUBLIC COMMENT FOR CLOSED SESSION ITEMS ONLY
Public comment will only be accepted for Closed Session items.
1.c CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Pursuant to Government Code §54956.8
**THIS ITEM HAS BEEN PULLED FROM THE AGENDA AND IS
CONTINUED TO A DATE UNCERTAIN.
Property:
APN 002-436-022
Negotiating Parties:
1166 Higuera Street LLC
1.d CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Pursuant to Government Code §54956.8
Property:
APN: 053-032-003
Agency Negotiators:
Derek Johnson, Christine Dietrick, Greg Hermann, Markie Kersten, Whitney McDonald, Matt Horn, Shelsie Moore, Noah Maidrand Negotiating Parties:
Jaymie Taylor
Under Negotiation:
Price and terms of payment
Property:
APN: 053-032-004
Agency Negotiators:
Derek Johnson, Christine Dietrick, Greg Hermann, Markie Kersten, Whitney McDonald, Matt Horn, Shelsie Moore, Noah Maidrand Negotiating Parties:
The Kokkonen Family Trust
Under Negotiation:
Price and terms of payment
Property:
APN: 053-032-005
Agency Negotiators:
Derek Johnson, Christine Dietrick, Greg Hermann, Markie Kersten, Whitney McDonald, Matt Horn, Shelsie Moore, Noah Maidrand Negotiating Parties:
BDB Holdings LLC
Under Negotiation:
Price and terms of payment
1.e ADJOURNMENT
The City Council will hold a Regular Meeting on October 3, 2023 at 5:30 p.m. in the Council Chambers at City Hall, 990 Palm Street, San Luis Obispo.
2. CALL TO ORDER
Mayor Erica A. Stewart will call the Regular Meeting of the San Luis Obispo City Council to order.
3. PLEDGE OF ALLEGIANCE
Council Member Michelle Shoresman will lead the Council in the Pledge of Allegiance.
4. PRESENTATIONS
4.a DATING AND DOMESTIC VIOLENCE AWARENESS MONTH
PROCLAMATION
Mayor Stewart will present a proclamation declaring the month of October as "Dating & Domestic Violence Awareness Month".
4.b FIRE PREVENTION WEEK PROCLAMATION
Mayor Stewart will present a proclamation declaring the week of October 8 - 14, 2023 as "Fire Prevention Week".
4.c NATIONAL HISPANIC, LATINX, LATINO HERITAGE MONTH
PROCLAMATION
Mayor Stewart will present a proclamation declaring September 15 to October 15, 2023 as "National Hispanic, Latinx, Latino Heritage Month".
4.d MOBILITY SERVICES DIVISION AND BUSINESS MANAGER
OVERVIEW
Public Works Director Matt Horn, Deputy Director of Mobility Services Jennifer Rice, and Mobility Services Business Manager Alexander Fuchs will provide an overview of the Mobility Services Division and the Business Manager position.
4.e CITY MANAGER REPORT
Receive a brief report from City Manager Derek Johnson.
5. PUBLIC COMMENT PERIOD FOR ITEMS NOT ON THE AGENDA
Not to exceed 15 minutes. The Council welcomes your input. State law does not allow the Council to discuss or take action on issues not on the agenda, except that members of the Council or staff may briefly respond to statements made or questions posed by persons exercising their public testimony rights (Gov. Code sec. 54954.2). Staff may be asked to follow up on such items.
6. CONSENT AGENDA
Not to exceed 15 minutes. Matters appearing on the Consent Calendar are expected to be non-controversial and will be acted upon at one time. A member of the public may request the Council to pull an item for discussion. Pulled items shall be heard at the close of the Consent Agenda unless a majority of the Council chooses another time. The public may comment on any and all items on the Consent Agenda within the three-minute time limit.
Recommendation:
To approve Consent Calendar Items 6a to 6c.
6.a WAIVE READING IN FULL OF ALL RESOLUTIONS AND
ORDINANCES
Recommendation:
Waive reading of all resolutions and ordinances as appropriate.
6.b MINUTES REVIEW - SEPTEMBER 12, 2023 AND SEPTEMBER 19, 2023 COUNCIL MINUTES
9 Recommendation:
Approve the following minutes of the City Council:
• September 12, 2023 - Special Closed Session Meeting
• September 19, 2023 - Regular Meeting
6.c SECOND READING OF ORDINANCE NO. 1730 (2023 SERIES) TO
ADOPT LOCAL AMENDMENTS TO THE CALIFORNIA ENERGY
CODE
19 Recommendation:
Adopt Ordinance No. 1730 (2023 Series) entitled, “An
Ordinance of the City Council of the City of San Luis Obispo, California, adopting Local Amendments to Part 6 of the Building Construction and Fire Prevention Code, 2023,” to be codified under San Luis Obispo Municipal Code Chapter 15.04.060 – “Amendments – Energy Standards”; and
1. Direct staff to submit the approved local amendments and accompanying required submittal forms and information to the California Energy Commission to initiate the local amendments to California Energy Code review and approval process.
2. 7. PUBLIC HEARING AND BUSINESS ITEMS
7.a FY 2022-23 YEAR END BUDGET REVIEW (UNAUDITED) (Estimated Time: 30 minutes)
33 Recommendation:
Receive and file the Fiscal Year 2022-23 Year End Budget report; and
1. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, to delegate appropriation authority to the City Manager for California Integrated Waste Management Act of 1989 (AB939) and
Senate Bill 1383 (SB1383) fees” compliant with the Fund Balance & Reserve Policy and corresponding legislation.
2. 8. STUDY SESSION
8.a CODE ENFORCEMENT UPDATE (Estimated Time: 90 minutes) 139 Recommendation:
Receive a presentation on the current state of Code
Enforcement; and
1. 2. Provide comments and direction to staff.
9. LIAISON REPORTS AND COMMUNICATIONS
Not to exceed 15 minutes. Council Members report on conferences or other City activities. At this time, any Council Member or the City Manager may ask a question for clarification, make an announcement, or report briefly on their activities. In addition, subject to Council Policies and Procedures, they may provide a reference to staff or other resources for factual information, request staff to report back to the Council at a subsequent meeting concerning any matter or take action to direct staff to place a matter of business on a future agenda. (Gov. Code Sec. 54954.2)
10. ADJOURNMENT
The next Regular Meeting of the City Council will be held on October 17, 2023 with Closed Session at 5:00 p.m. in the Council Hearing Room and the Regular Meeting at 5:30 p.m. in the Council Chambers at City Hall, 990 Palm Street, San Luis Obispo.
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The City of San Luis Obispo wishes to make all of its public meetings accessible to the public. Upon request, this agenda will be made available in appropriate alternative formats to persons with disabilities. Any person with a disability who requires a modification or accommodation in order to participate in a meeting should direct such request to the City Clerk’s Office at (805) 781-7114 at least 48 hours before the meeting, if possible. Telecommunications Device for the Deaf (805) 781-7410.
City Council meetings are televised live on Charter Channel 20 and the City's YouTube Chanel: http://youtube.slo.city. Agenda related writings or documents provided to the City Council are available for public inspection in the City Clerk’s Office located at 990 Palm Street, San Luis Obispo, California during normal business hours, and on the City’s website
https://www.slocity.org/government/mayor-and-city-council/agendas-andminutes. Persons with questions concerning any agenda item may call the City Clerk’s Office at (805) 781-7114.
1 Council Minutes
September 12, 2023, 5:30 p.m.
Council Hearing Room, 990 Palm Street, San Luis Obispo
Council Members
Present:
Council Member Emily Francis, Council Member Andy Pease, Council Member Michelle Shoresman, Vice Mayor Jan Marx, Mayor Erica A. Stewart
City Staff Present: Derek Johnson, City Manager, Christine Dietrick, City Attorney, Teresa Purrington, City Clerk
_____________________________________________________________________
1. CALL TO ORDER
A Special Closed Session Meeting of the San Luis Obispo City Council was called to order on September 12, 2023 at 5:30 p.m. in the Council Hearing Room at City Hall, 990 Palm Street, San Luis Obispo, by Mayor Stewart.
2. PUBLIC COMMENT FOR CLOSED SESSION ITEMS ON THE AGENDA ONLY Public Comment:
None
--End of Public Comment--
3. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Action: City Attorney Christine Dietrick indicated that no reportable action was taken.
4. ADJOURNMENT
The meeting was adjourned at 6:45 p.m. The next Regular Meeting of the City Council will be held on September 19, 2023 with Closed Session at 4:45 p.m. in the Council Hearing Room and the Regular Meeting at 5:30 p.m. in the Council Chambers at City Hall, 990 Palm Street, San Luis Obispo. _________________________
APPROVED BY COUNCIL: XX/XX/2023
1 Council Minutes
September 19, 2023, 5:30 p.m.
Council Chambers, 990 Palm Street, San Luis Obispo
Council Members
Present:
Council Member Emily Francis, Council Member Andy Pease, Council Member Michelle Shoresman, Vice Mayor Jan Marx, Mayor Erica A. Stewart
City Staff Present: Derek Johnson, City Manager, Christine Dietrick, City Attorney, Teresa Purrington, City Clerk
_____________________________________________________________________
1. CLOSED SESSION: STARTS AT 4:45 PM
1.a CALL TO ORDER
Mayor Erica A. Stewart called the Closed Session Meeting of the San Luis Obispo City Council to order at 4:45 p.m. in the Council Hearing Room at City Hall, 990 Palm Street, San Luis Obispo.
1.b PUBLIC COMMENT FOR CLOSED SESSION ITEMS ONLY
Public Comments:
None
---End of Public Comment---
1.c CONFERENCE WITH LABOR NEGOTIATORS
ACTION: City Attorney Christine Dietrick reported that the City Council met regarding labor negotiations and there was no reportable action taken on this item. She also indicated that the Council continued the Closed Session to a date certain of September 26, 2023, at 6:00 p.m. in the Council Hearing Room, 990 Palm Street, San Luis Obispo.
1.d ADJOURNMENT
2. CALL TO ORDER
A Regular Meeting of the San Luis Obispo City Council was called to order on September 19, 2023 at 5:35 p.m. in the Council Chambers, 990 Palm Street, San Luis Obispo, by Mayor Stewart.
2 3. PLEDGE OF ALLEGIANCE
Vice Mayor Jan Marx led the Council in the Pledge of Allegiance.
4. PRESENTATIONS
4.a CITY MANAGER REPORT
City Manager Derek Johnson provided a report on upcoming projects.
5. PUBLIC COMMENT PERIOD FOR ITEMS NOT ON THE AGENDA
Public Comment:
Scott Summers
Alan Chegolla
Dylan Freiberg
Carl Grisorti
Eleanor Schauerman
Elaine Genasci
Daniel Andoetoe
Louis Dutra
Marilyn Gordon
Christy Lynch
Sue Gatlin
John Little
--End of Public Comment--
6. CONSENT AGENDA
Vice Mayor Marx recused herself from Item 6d.
Council Member Pease requested Item 6b be pulled from Consent.
Motion By Vice Mayor Marx
Second By Council Member Francis
To approve Consent Calendar Items 6a, 6c and 6e to 6g.
Ayes (5): Council Member Francis, Council Member Pease, Council Member Shoresman, Vice Mayor Marx, and Mayor Stewart
CARRIED (5 to 0)
6.a WAIVE READING IN FULL OF ALL RESOLUTIONS AND ORDINANCES Waive reading of all resolutions and ordinances as appropriate.
6.c EQUIPMENT SURPLUS DESIGNATION AND AUTHORIZATION OF
SALE OF WATER DISTRIBUTION, WASTEWATER TREATMENT, AND
IRRIGATION ASSETS
Authorize the designation and disposal of surplus items in accordance with the City’s policies and procedures as prescribed in the Financial Management Manual Sections, 480-A, and 480-B.
2 6.e FY 2023-24 GRANT APPLICATIONS FOR THE ALCOHOLIC BEVERAGE CONTROL AND BUREAU OF JUSTICE ASSISTANCE; AND
ACCEPTANCE OF GRANT FUNDING FROM THE CALIFORNIA BOARD
OF STATE AND COMMUNITY CORRECTIONS
1. Authorize staff to submit grant applications to the following entities:
a. FY 2023-24 Department of Alcoholic Beverage Control – Office of Traffic Safety in an amount not to exceed $40,000.
b. FY 2023-24 Edward Byrne Memorial Grant for $16,271.
2. Authorize staff to accept funding from the California Board of State and Community Corrections for an Officer Wellness and Mental Health Grant in the amount of $42,124.96; and
3. Adopt Resolution No. 11449 (2023 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, authorizing Grant Applications for funding provided through the Department of Alcoholic Beverage Control and the Office of Traffic Safety through the National Highway Traffic Safety Administration to increase education and enforcement programs focusing on underage drinking and authorizing the City Manager or their designee to execute all related grant documents”; and
4. If the grants are awarded, authorize the City Manager or their designee to execute grant related documents and authorize the Finance Director to make the necessary budget adjustments upon the award of the grant.
6.f AWARD CONSTRUCTION CONTRACT FOR FIRE STATION 1 FLEET MAINTENANCE ROOF PROJECT, SPECIFICATION NO. 2000075-5.01
1. Award a Construction Contract to Edwards Construction Group, Inc. in the amount of $348,290.86 for the Fire Station 1 Fleet Maintenance Roof Project, Specification Number 2000075-5.01; and
2. Approve the transfer $81,893 between Major Facilities Maintenance Account subprojects to support the project; and
3. Approve the transfer of $18,000 from the Local Sales Tax Fund Completed Projects Undesignated Capital Account to the project account (Spec. No. 2000075-5.01).
6.g AUTHORIZE THE CITY MANAGER TO EXECUTE AN AMENDMENT TO TRANSDEV’S AGREEMENT FOR HIRING INCENTIVES AND TERM EXTENSION
1. Approve the sole source procurement for transit operations and maintenance services; and
2. Authorize the City Manager to negotiate and execute an amendment to the transit operations and maintenance agreement with Transdev North America, formerly First Transit, to include hiring incentives and to extend the term of the agreement.
3 Pulled from Consent by Council Member Pease.
6.b MINUTES REVIEW - SEPTEMBER 5, 2023 COUNCIL MINUTES
Motion By Council Member Pease
Second By Council Member Shoresman
To approve the September 5, 2023 City Council Minutes, with the following revisions to bullet #4 of the motion for Item 6a, US 101/Prado Road Interchange Project:
4. Added during the meeting: Council provided direction to staff to explore incorporate leading ways strategies to maximally reduce embodied carbon to the extent feasible.
Ayes (5): Council Member Francis, Council Member Pease, Council Member Shoresman, Vice Mayor Marx, and Mayor Stewart
CARRIED (5 to 0)
6.d APPROVE USE OF FUNDING FOR RECYCLED WATER USER SITE
IMPROVEMENTS
Vice Mayor Marx declared a conflict on this item and recused due to owning property within the San Luis Ranch development, which is near one of the proposed locations.
Motion By Council Member Francis
Second By Council Member Shoresman
1. Authorize the use of up to $172,647.45 in available funding from the Recycled Water System Retrofits CIP (Project #2000573) to make recycled water and water distribution system protection site improvements on qualifying private properties; and
2. Find that the use of this funding does not constitute a gift of public funds and fulfills a public purpose; and
3. Find the action categorically exempt from the California Environmental Quality Act.
Ayes (4): Council Member Francis, Council Member Pease, Council Member Shoresman, and Mayor Stewart
Recused (1): Vice Mayor Marx
CARRIED (4 to 0)
4 7. PUBLIC HEARING AND BUSINESS ITEMS
7.a AWARD CONSTRUCTION CONTRACT FOR THE CULTURAL ARTS
DISTRICT PARKING STRUCTURE PROJECT, SPECIFICATION NO.
90435 (Estimated Time: 20 minutes)
Public Works Director Matt Horn and Engineer III Madeline Kacsinta provided an in-depth staff report and responded to Council questions.
Public Comments:
Patty Thayer
Dave Christy
Diane Clausen
Jim Dantona
Barry Rands
Chris Spencer
---End of Public Comment---
Motion By Mayor Stewart
Second By Council Member Shoresman
1. Approve the final project plans and specifications for the Cultural Arts District Parking Structure Project; and
2. Adopt Resolution No. 11450 (2023 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, to appropriate $47 Million in Bond Proceeds to the Cultural Arts District Parking Structure Project Account”; and
3. Award a construction contract for the Cultural Arts District Parking Structure Project to Swinerton Builders Inc. in the amount of $41,070,044.00.
Ayes (5): Council Member Francis, Council Member Pease, Council Member Shoresman, Vice Mayor Marx, and Mayor Stewart
CARRIED (5 to 0)
5 7.b INTRODUCTION OF AN ORDINANCE APPROVING LOCAL
AMENDMENTS TO THE CALIFORNIA ENERGY CODE (Estimated Time:
45 minutes)
Council Member Pease declared a conflict on this item and recused due to her employment in the building industry.
Deputy City Manager Greg Hermann, Sustainability Manager Chris Read, and Chief Building Official Michael Loew provided an in-depth staff report and responded to Council questions.
Public Comments:
None
---End of Public Comment---
Motion By Council Member Shoresman
Second By Council Member Francis
Introduce Ordinance No. 1730 (2023 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, adopting Local Amendments to Part 6 of the Building Construction and Fire Prevention Code, 2023,” to be codified under San Luis Obispo Municipal Code Chapter 15.04.060 – “Amendments – Energy Standards”.
Ayes (4): Council Member Francis, Council Member Shoresman, Vice Mayor Marx, and Mayor Stewart
Recused (1): Council Member Pease
CARRIED (4 to 0)
8. LIAISON REPORTS AND COMMUNICATIONS
Council Member Shoresman attended the California Men's Colony Advisory Body meeting and the Convocation at Cal Poly.
Vice Mayor Marx attended the IWMA Board meeting.
Council Member Pease attended the RTA meeting and the Groundwater Sustainability Commission meeting.
Council Member Francis attended the IWMA free compost giveaway, the 9-11 Ceremony at Fire Station 1, and the Cal Poly Convocation.
Mayor Stewart attended the 9-11 Memorial at Fire Station 1, the CASA 40th anniversary celebration, a virtual tour of Orange County's Be Well program.
Central Coast Community Energy's annual meeting in Paso Robles, and the
6 Convocation at Cal Poly. She also met with Vishesh Anand, Deputy Regional Director, External Affairs LA, Ventura, SB, and SLO Counties Office of Governor Gavin Newsom and Angel Moreno from the Office of Attorney General Rob Bonita.
9. ADJOURNMENT
The meeting was adjourned at 8:43 p.m. The next Regular Meeting of the City Council will be held on October 3, 2023, with Closed Session at 4:30 p.m. in the Council Hearing Room and the Regular Meeting at 5:30 p.m. in the Council Chambers at City Hall, 990 Palm Street, San Luis Obispo.
APPROVED BY COUNCIL: XX/XX/2023
Item 6c
Department: Administration
Cost Center: 1005
For Agenda of: 10/3/2023
Placement: Consent
Estimated Time: N/A
FROM: Greg Hermann, Deputy City Manager
Timmy Tway, Community Development Director
Prepared By: Chris Read, Sustainability Manager
Michael Loew, Chief Building Official
SUBJECT: SECOND READING OF ORDINANCE NO. 1730 (2023 SERIES) TO
ADOPT LOCAL AMENDMENTS TO THE CALIFORNIA ENERGY CODE
RECOMMENDATION
1. Adopt Ordinance No. 1730 (2023 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, adopting Local Amendments to Part 6 of the Building Construction and Fire Prevention Code, 2023,” to be codified under San Luis Obispo Municipal Code Chapter 15.04.060 – “Amendments – Energy Standards”; and
2. Direct staff to submit the approved local amendments and accompanying required submittal forms and information to the California Energy Commission to initiate the local amendments to California Energy Code review and approval process.
POLICY CONTEXT
Resolution 11159 (2020 Series) adopts a communitywide goal of carbon neutrality and a building sector goal of no net new increase of building GHG emissions as the result of new buildings starting in 2020.
Ordinance 1717 (2022 Series) adds Chapter 8.11 (All-Electric Buildings) to the Municipal Code requiring that all new buildings be all-electric, with certain limited exceptions.
Administrative Order 01 (2023 Series) pauses enforcement of Municipal Code Chapter 8.11 (All-Electric Buildings). Should the City resume enforcement of Chapter
8.11, as set forth in Administrative Order No. 01 (2023 Series), Chapter 8.11 will supersede Ordinance No. 1730.
2023-25 Financial Plan Climate Action Major City Goal 4.1.h directs staff to continue to monitor impacts to Municipal Code 8.11 (All‐Electric New Buildings), and if necessary, return to Council with an alternative approach to achieving the City's climate action goals as they relate to new buildings.
Item 6c
DISCUSSION
Background
On September 19, 2023, the City Council voted 4-0 (Council Member Pease recused) to introduce Ordinance No. 1730, which provides local amendments (also referred to as a “reach code”) to the California Energy Code for the purpose of reducing energy use and reducing greenhouse gas emissions in support of the City’s climate action goals. The Ordinance is provided as Attachment A and includes additional efficiency standards for single-family residential buildings, multi-family buildings, and non-residential buildings.
Public Resources Code Section 25402.1(h)(2) and Section 10-106 of the Building Energy Efficiency Standards establish a process that allows local adoption of energy standards that are more stringent than the statewide standards. Under this process, the California Energy Commission requires any local amendments to the California Energy Code that affect energy use in regulated buildings to be cost effective and use less energy than the standard requirements. At the September 19, 2023 meeting, Council found the amendments proposed in the Ordinance to reduce energy and to be cost effective. 1 These
findings were based on cost effectiveness studies conducted by the California Energy Codes and Standards Statewide Utility Program.
2,3,4
Previous Council or Advisory Body Action
Previous Council Action is described in detail in the September 19, 2023 Council Agenda Report. The ordinance proposed for adoption was introduced at the City Council meeting on September 19, 2023.
Public Engagement
The City conducted a public engagement process as outlined in the September 19, 2023 Council Agenda Report .
Schedule and Next Steps
Should Council approve staff’s recommendations, work would proceed on the timeline provided in the table below. It is important to note that the California Building Code, which includes the California Energy Code, is updated every three years. Should Council adopt staff’s recommendation, the local reach code would expire with the current Building Code on December 31, 2025.
1 The September 19, 2023 Council Agenda Report is available at: https://pubslocity.escribemeetings.com/filestream.ashx?DocumentId=10192 2 The 2022 Cost-Effectiveness Study: Single Family New Construction Study is available at: https://pubslocity.escribemeetings.com/filestream.ashx?DocumentId=10194 3 The 2022 Cost-Effectiveness Study: Multifamily New Construction Study is available at: https://pubslocity.escribemeetings.com/filestream.ashx?DocumentId=10195 4 The 2022 Code: Non-Residential New Construction Reach Code Cost-Effectiveness Study is available at:
https://pub-slocity.escribemeetings.com/filestream.ashx?DocumentId=10196
Item 6c
Task Timeframe
Receive approval from the California
Energy Commission November - December
Reach code goes into effect January 1, 2024
CONCURRENCE
Staff from Administration, Community Development, and the City Attorney’s Office concur with this report.
ENVIRONMENTAL REVIEW
Staff’s recommendations are found to be exempt from CEQA under the general rule, 15061(b)(3), because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. Further, this ordinance is also exempt from CEQA under the categorical exemptions in Section 15308 of the CEQA Guidelines in that the proposed ordinance would institute regulatory requirements intended to protect the environment and natural resources.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2023-24
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $ $ $ $
State
Federal
Fees
Other:
Total $ $ $ $
The reach code requirements will be implemented through the development review and/or building permit review process. The staff time to review projects is already budgeted and is a core work task of the Community Development Department. This work can be directly supported by the 3C-REN Energy Code Coach Program, which provides technical support for code interpretation. Funded under the auspices of the California Public Utilities Commission, Energy Code Coach is free to the user and can be accessed by project applicants and City staff.
Item 6c
ALTERNATIVES
1. Council could request more information, suggest changes, or request that the proposed local amendments to the California Energy Code be presented for adoption at a later date. Should Council pursue this alternative, staff requests specific direction and feedback.
2. Council could take no action and direct staff to pursue other initiatives. This action is not recommended by staff because it is inconsistent the City’s climate action goals and prior Council direction and adopted policy.
ATTACHMENTS
A - Ordinance No. 1730 (2023 Series)
O 1730
ORDINANCE NO. 1730 (2023 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, ADOPTING LOCAL AMENDMENTS TO PART 6
OF THE BUILDING CONSTRUCTION AND FIRE PREVENTION CODE,
2023
WHEREAS, greenhouse gas accumulation in the atmosphere as the result of human activity is the primary cause of the global climate crisis; and WHEREAS, in California alone, the initial impacts of climate change have resulted in unprecedented disasters with tremendous human, economic, and environmental costs; and
WHEREAS, the Intergovernmental Panel on Climate Change estimates that global emissions need to be reduced by 45 percent from 2010 levels by 2030, and 100 percent by 2050 to prevent global catastrophe; and
WHEREAS, the State of California enacted Assembly Bill (AB) 1279 to require statewide carbon neutrality "as soon as possible," but no later than 2045; and WHEREAS, City of San Luis Obispo residents and businesses have repeatedly identified climate action as a top community priority; and WHEREAS, Resolution 11159 (2020 Series) adopts the City of San Luis Obispo Climate Action Plan for Community Recovery, which includes a communitywide goal of carbon neutrality by 2035 and sector specific goal of no net new building emissions from onsite energy use by 2020; and
WHEREAS, Resolution 11381 (2022 Series) reaffirmed the communitywide goal of carbon neutrality by 2035 and sector specific goal of no net new building emissions from onsite energy use by 2020; and
WHEREAS, the inventoried greenhouse gas emissions in the City of San Luis Obispo come from a variety of sources, primarily transportation and energy use in buildings and facilities; and
WHEREAS, in order to achieve carbon neutrality, new sources of greenhouse gas emissions need to be substantially reduced or eliminated; and WHEREAS, Public Resources Code Section 25402.1 (h)(2) allows local agencies to adopt more stringent local amendments to the energy conservation provisions in the California Energy Code; and
Ordinance No. 1730 (2023 Series) Page 2
O 1730
WHEREAS, the California Energy Codes and Standards Statewide Utility Program, has determined specific modifications to the 2022 State Energy Code for each climate zone that are cost-effective; and that such modifications will result in designs that consume less energy than they would under the 2022 State Energy Code; and WHEREAS, staff has reviewed the "2022 Cost-Effectiveness Study: Single Family New Construction Study" and associated study data, the “2022 Cost-Effectiveness Study:
Multifamily New Construction Study” and associated study data, and the “2022 Code:
Non-Residential New Construction Reach Code Cost-Effectiveness Study” and associated data developed for the California Energy Codes and Standards Statewide Utility Program, and find them sufficient to illustrate compliance with the requirements set forth under California Administrative Code Chapter 10-106; and WHEREAS, based on these studies, the City finds the proposed local amendments to the 2022 California Energy Code to be cost-effective and consume less energy than permitted by Title 24, Part 6; and
WHEREAS, the 2022 California Energy Code offers compliance options that were established through the public rulemaking process of the code update; and WHEREAS, the Council expressly declares that the proposed amendments to the Energy Code are reasonably necessary because of local climatic, topological, and geological conditions; and
WHEREAS, the requirements specified in this Ordinance were reviewed via public comment and through a publicly noticed public hearing process.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo as follows:
SECTION 1. Purpose. It is the purpose and intent of this Ordinance to establish standards for new buildings to exceed minimum 2022 Title 24 Part 6 requirements.
SECTION 2. Adoption. The local amendments to Part 6 of the City of San Luis Obispo Building Construction and Fire Prevention Code, 2023 (SLOMC Section
15.02.060) as specified in Exhibit A, are hereby adopted by the City of San Luis Obispo to be codified under Chapter 15.04.060. The Council hereby adopts the recitals herein as separate and additional findings of fact in support of adoption of the ordinance.
SECTION 3. Relationship to Administrative Order 01 (2023 Series) and Supersedure by Municipal Code Chapter 8.11. By its terms, Administrative Order 01 (2023 Series), which paused enforcement of the City’s all-electric new building requirement (SLOMC Chapter 8.11), is rescinded upon any judicial decision which overturns or otherwise vacates the Ninth Circuit panel ruling issued in California Restaurant Association v. City of Berkeley. Should this occur, enforcement of Chapter
8.11 will resume, and enforcement of Section 15.04.060 as adopted herein will be suspended.
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SECTION 4. Severability. If any word, phrase sentence part, section, subsection or other portion of this amendment or any application thereof to any person or circumstance is declared void, unconstitutional, or invalid for any reason, then such word, phrase, sentence, part, section, subsection, or other portion, or the prescribed application thereof, shall be severable, and the remaining provisions of this amendment, and all applications thereof, not having been declared void, unconstitutional or invalid, shall remain in full force and effect. The City of San Luis Obispo hereby declares that it would have passed this amendment and each section, subsection sentence, clause and phrase of this amendment, irrespective of the fact that any one or more sections, subsection, sentences, clauses or phrases is declared invalid or unconstitutional.
SECTION 5. Findings. The City Council finds that each of the changes or modifications to measures referred to therein are reasonably necessary because of local climatic, geological, or topographical conditions in the area encompassed by the boundaries of the City of San Luis Obispo, and the City Council adopts the following findings in support of local necessity for the changes or modifications:
1. San Luis Obispo is situated along a wildland-urban interface and has been identified as a Community at Risk from wildfire and is extremely vulnerable to wildfires and firestorms, and human activities releasing greenhouse gases into the atmosphere cause increases in worldwide average temperature, drought conditions, vegetative fuel, and length of fire seasons- contributing to the likelihood and consequences of fire.
2. The City of San Luis Obispo is situated at the base of a watershed of the Santa Lucia Mountains and flooding of San Luis, Chorro, Stenner, Old Garden, and Brizzolara Creeks results in conditions rendering fire department vehicular traffic unduly burdensome or impossible, as witnessed in major floods that occurred in 1952, 1961, 1969, 1973, 1978, 1982, 1995, and 2023. Furthermore, flood conditions described above create the potential for overcoming the ability of the fire department to aid or assist in fire control, evacuations, rescues and other emergency task demands inherent in such situations. The resulting overburdening of fire department personnel may cause a substantial or total lack of protection against fire for the buildings and structures located in the City of San Luis Obispo. The afore-described conditions support the imposition of fire protection requirements greater than those set forth in the California State Building Standards Code and support the imposition of more restrictive requirements than set forth in the California Energy Code for the purpose of reducing the City's contributions to Greenhouse Gas Emissions resulting in a warming climate and related severe weather events.
3. The aforementioned flood and rain events result in conditions wherein stormwater can inundate the wastewater treatment system as witnessed in major floods that occurred in 1952, 1961, 1969, 1973, 1978, 1982, and 1995.
Furthermore, rain events and flood conditions described above create a condition referred to as Inflow and Infiltration (I/I) that allow rain and flood waters to flow and/or seep into the wastewater system and overcome the ability
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of the wastewater collection system and Water Reclamation Facility (WRF) to convey and treat sewage. The resulting overburdening of the wastewater system can result in threats to public health, public and private property and water quality and violations and fines from the State of California, the Environmental Protection Agency (EPA) or others. To the extent that climate change has the potential to make these conditions worse, more restrictive Energy Code requirements to achieve reduced greenhouse gas emissions are necessary.
4. Seasonal climatic conditions during the late summer and fall create numerous serious difficulties in the control and protection against fire situations in the City of San Luis Obispo. The hot, dry weather in combination with Santa Lucia (offshore) winds frequently results in wildland fires in the brush-covered slopes on the Santa Lucia Mountains, San Luis Mountain, and the Irish Hills areas of the City of San Luis Obispo. The aforementioned areas surround the City.
When a fire occurs in said areas, such as occurred in 1985 when the Los Pilitas fire burned six days and entered the City and damaged many structures, the entirety of local fire department personnel is required to control, monitor, fight and protect against such fire situations in an effort to protect life and preserve property and watershed land. The same climatic conditions may result in the concurrent occurrence of one or more fires in the more populated areas of the City without adequate fire department personnel to protect against and control such a situation. Therefore, the above-described findings support the imposition of measures to increase the efficiency of new buildings in the City to reduce greenhouse gas emissions.
SECTION 6. CEQA. This ordinance is categorically exempt from CEQA because it is an action taken by a regulatory agency for the purpose of protecting the environment (CEQA Guidelines Section 15308). In addition, this ordinance is exempt from CEQA under the general rule, 15061(b)(3), on the grounds that these standards are more stringent than the State energy standards, there are no reasonably foreseeable adverse impacts, and there is no possibility that the activity in question may have a significant effect on the environment. The following findings are made in support of these determinations:
1. The purpose of the implementation of a Reach Code is to reduce the amount of greenhouse gas emissions in the City of San Luis Obispo that are produced from buildings.
2. The Reach Code approval process requires that the City determines that the local standards will require buildings to use no more energy than current statewide requirements. Furthermore, the California Energy Commission approval process requires that the City make the findings as part of its approval process. Therefore, the Reach Code standards can only go into effect if they protect the environment by making buildings more efficient.
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SECTION 7. Violations. Violation of the requirements of this Ordinance shall be considered, at the City’s election, an infraction of the City of San Luis Obispo Municipal Code punishable by all sanctions prescribed in Chapter 1.12, or an administrative violation punishable as provided under Chapter 1.24.
SECTION 8. Effective Date. This Ordinance shall be effective as of January 1, 2024.
SECTION 9. Ordinance Summary. A summary of this ordinance, together with the names of Council members voting for and against, shall be published at least five (5) days prior to its final passage, in The New Times, a newspaper published and circulated in this City. This ordinance shall go into effect at the expiration of thirty (30) days after its final passage.
INTRODUCED on the 19th day of September 2023, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the ____ day of ___________, 2023, 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
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Exhibit A
Section 15.04.060
AMENDMENTS - ENERGY STANDARDS
A. Adoption of Codes and Applicability
The effective date of this ordinance shall be January 1, 2024 and is applicable to newly constructed buildings and facilities, and those that are built after a demolition. The minimum energy compliance margin standards established in this code shall apply to all applicable buildings accordingly. The amendments contained in 15.04.060 do not apply to additions, alterations, or repairs to buildings or facilities constructed prior to the effective date of this ordinance.
B. Add Item D to Subchapter 1, Section 100.0(e)3, to read as follows:
D. Prohibited reduction in source energy performance. No repair, addition, or alteration shall reduce the efficiency of any building or facility, as determined by the source energy compliance margin.
C. Add the following definition to Subchapter 1, Section 100.1(b):
DEMOLITION is the act of reconstructing, removing, taking down or destroying all or portions of an existing building or structure, or making extensive repairs or modifications to an existing building or structure, if such changes involve removal or replacement of fifty percent or more of both the structural framing and cladding or of the exterior walls within a twenty-four-month period. When determining whether a building or structure is demolished, the following applies:
1. The nonconforming portions of any wall are counted as removed or taken down, even when retention of these portions is proposed.
2. Any continuous run of remaining exterior wall surfaces measuring ten feet or less in length are counted as removed or replaced.
D. Add Section 120.11 to Subchapter 3, to read as follows:
120.11 Electric Readiness Requirements for All Systems
Where nonresidential systems using gas or propane are installed, the construction drawings shall indicate a pathway for routing of conduit from the equipment using gas or propane to the point of interconnection with the electrical service.
E. Delete Section 140.1 from Subchapter 5, and replace with new Section 140.1 to read as follows:
A building complies with the performance approach provided that:
1. The TDV energy budget calculated for the Proposed Design Building under Subsection (b) is no greater than the TDV energy budget calculated for the Standard
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Design Building under Subsection (a), and
2. The energy budget calculated for the proposed design building under Subsection (b) has a source energy compliance margin, relative to the energy budget calculated for the standard design building under Subsection (a), of at least 7 percent for all nonresidential occupancies.
Exception to Section 140.1 item 2. A source energy compliance margin of at least 7 percent is not required when nonresidential occupancies are designed with single zone space-conditioning systems complying with Section 140.4(a)2. (a) Energy budget for the standard design building. The energy budget for the Standard Design Building is determined by applying the mandatory and prescriptive requirements to the proposed design building. The energy budget is the sum of the TDV energy for space-conditioning, indoor lighting, mechanical ventilation, photovoltaic (PV) and battery storage systems, service water heating and covered process loads.
(b) Energy budget for the proposed design building.
The energy budget for a proposed design building is determined by calculating the TDV energy for the proposed design building. The energy budget is the sum of the TDV energy for space-conditioning, indoor lighting, mechanical ventilation, photovoltaic (PV) and battery storage systems, and service water heating and covered process loads.
Exception to Section 140.1(b). A community shared solar electric generation system, or other renewable electric generation system, and/or community shared battery storage system, that provides dedicated power, utility energy reduction credits or payments for energy bill reductions to the permitted building and is approved by the Energy Commission as specified in Title 24, Part 1, Section 10- 115, may offset part or all of the solar electric generation system or battery storage system TDV energy required to comply with the standards, as calculated according to methods established by the Commission in the Nonresidential ACM Reference Manual.
(c) Calculation of energy budget. The TDV energy for both the standard design building and the proposed design building shall be computed by compliance software certified for this use by the Commission. The processes for compliance software approval by the Commission are documented in the ACM Approval Manual.
Note: Authority: Sections 25213, 25218, 25218.5, 25402 and 25402.1, Public Resources Code. Reference: Sections 25007, 25008, 25218.5, 25310, 25402, 25402.1, 25402.4, 25402.5, 25402.8, and 25943, Public Resources Code.
G. Amend Subchapter 8, Section 150.1(b) to read as follows, with items 2 and 3 to remain:
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(b) Performance Standards. A building complies with the performance standards if the energy consumption calculated for the proposed design building is no greater than the energy budget calculated for the standard design building using Commissioncertified compliance software as specified by the Alternative Calculation Methods Approval Manual, and as specified in items 1, 2 and 3 below.
1. Newly Constructed Buildings. The Energy Budget for newly constructed buildings is expressed in terms of the Energy Design Ratings, which are based on source energy and time-dependent valuation (TDV) energy. The Energy Design Rating 1 (EDR1) is based on source energy. The Energy Design Rating 2 (EDR2) is based on TDV energy and has two components, the Energy Efficiency Design Rating, and the Solar Electric Generation and Demand Flexibility Design Rating. The total Energy Design Rating shall account for both the Energy Efficiency Design Rating and the Solar Electric Generation and Demand Flexibility Design Rating. The proposed building shall separately comply with the Source Energy Design Rating, Energy Efficiency Design Rating and the Total Energy Design Rating. A newly constructed building complies with the performance approach if the TDV energy budget calculated for the proposed design building is no greater than the TDV energy budget calculated for the Standard Design Building AND the Source Energy compliance margin is at least 6, relative to the Source Energy Design Rating 1 calculated for the Standard Design building.
EXCEPTION 1 to Section 150.1(b)1. A community shared solar electric generation system, or other renewable electric generation system, and/or community shared battery storage system, which provides dedicated power, utility energy reduction credits, or payments for energy bill reductions, to the permitted building and is approved by the Energy Commission as specified in Title 24, Part 1, Section 10-115, may offset part or all of the solar electric generation system Energy Design Rating required to comply with the Standards, as calculated according to methods established by the Commission in the Residential ACM Reference Manual.
EXCEPTION 2 to Section 150.1(b)1. A newly constructed building that does not require a PV system in accordance with section 150.1(c)14 does not need a Source Energy compliance margin of at least 6, relative to the Source Energy Design Rating 1 calculated for the Standard Design building.
I. Add Section 160.9(d), to read as follows:
160.9(d) Central Water Heater Readiness
Where a multi-family central water heating system using gas or propane is installed, the construction drawings shall indicate a pathway for routing of conduit from the equipment using gas or propane to the point of interconnection with the electrical service.
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J. Amend Subchapter 11, Section 170.1, paragraph 1, to read as follows:
A building complies with the performance approach if the TDV energy budget calculated for the proposed design building under Subsection (b) is no greater than the TDV energy budget calculated for the Standard Design Building under Subsection (a). Additionally:
1. The source energy budget of a newly constructed multifamily building (with three or less habitable stories) shall be at least 9% lower than that of the Standard Design Building.
2. The source energy budget of newly constructed multifamily buildings (with four or more habitable stories) shall be at least 3% lower than that of the Standard Design Building.
City of San Luis Obispo, Council Memorandum
City of San Luis Obispo
Council Agenda Correspondence
DATE: October 3, 2023
TO: Mayor and Council
FROM: Emily Jackson, Finance Director
VIA: Derek Johnson, City Manager
SUBJECT: ITEM 7a – FY 2022-23 YEAR END BUDGET REVIEW (UNAUDITED) The purpose of the memorandum is to address a question related to utility user tax revenue and correct a table included in the Water Fund section of the 2022-23 Year End Budget Report document.
Staff received the following question, regarding Utility User Tax (UUT) revenues received in FY 2022-23. Staff’s response is shown in italics:
1. Why were UUT projections so far off? Does this mean that people used much more energy than projected?
As noted in the report, UUT is a pretty volatile
revenue source for the City, so projections are
conservative and based on prior years’ actuals.
The table to the right shows UUT revenues for
the last ten years, and demonstrates the
volitility in this revenue source. Unfortunately,
UUT is not a revenue source that the City has
much influence over, as the charges are based
heavily on consumption of utility services.
The increase in UUT revenue over budget in
FY 2022-23 is largely due to weather
conditions during the fiscal year, which
increased consumption overall. Natural gas
and electricity usage were the biggest contributors to UUT revenues. Based on staff’s own analysis as well as statewide analysis performed by HdL, the increase in natural gas consumption is attributable to colder weather in the area in January through April. The increase in electricity consumption is attributable to hotter summer months.
Fiscal
Year
Revenue %
change
13-14 5,345,342 9%
14-15 5,211,207 -3%
15-16 5,413,720 4%
16-17 5,539,407 2%
17-18 5,627,356 2%
18-19 4,919,892 -13%
19-20 5,439,144 11%
20-21 5,225,979 -4%
21-22 5,338,325 2%
22-23 6,265,673 17%
Item 7a – FY 2022-23 Year End Budget Review (Unaudited) Page 2
2. Correction of Water Fund Table
Several accounts were inadvertently excluded from the FY 2023-24 Budget column of the Water Fund Operating Expenditures table, making the budget appear as if it was significantly lower (which is not the case). This administrative adjustment has no impact on the year-end analysis or the adopted budget. The table will be replaced with the correct version when the report is published on the City’s website.
Existing Attachment A – Table 46 (Packet Page 110)
Corrected Attachment A – Table 46 (Packet Page 110)
FY 2021-22 FY 2023-24
Actual Budget Actual Funds Available % Budget
Staffing $ 5,174,679 $ 5,484,670 $ 4,999,216 $ 485,454 9% $ 5,502,576 Contract Services $ 9,921,661 $11,960,958 $ 9,866,973 $ 2,093,985 17% $12,372,096 Other Operating Expenditures $ 955,013 $ 1,534,093 $ 1,186,567 $ 347,526 20% $ 1,589,739 Transfers Out $ 2,517,178 $ 2,311,753 $ 2,311,753 $ - 0% $ 2,826,143 Utilities $ 526,965 $ 698,125 $ 657,998 $ 40,127 6% $ 1,033,139 Debt Service $ 2,307,374 $ 2,442,558 $ 2,300,546 $ 142,012 0% $ 1,870,392 TOTAL $21,402,870 $24,432,158 $ 21,323,053 $ 3,109,105 13% $25,194,085 Water Fund Operating
Expenditures
FY 2022-23
Item 7a
Department: Finance
Cost Center: 2002
For Agenda of: 10/3/2023
Placement: Business
Estimated Time: 30 Minutes
FROM: Derek Johnson, City Manager
Emily Jackson, Finance Director
Prepared By: Natalie Harnett, Principal Budget Analyst
SUBJECT: FY 2022-23 YEAR END BUDGET REVIEW (UNAUDITED)
RECOMMENDATION
1. Receive and file the Fiscal Year 2022-23 Year End Budget report; and
2. Adopt a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, to delegate appropriation authority to the City Manager for California Integrated Waste Management Act of 1989 (AB939) and Senate Bill 1383 (SB1383) fees” compliant with the Fund Balance & Reserve Policy and corresponding legislation.
POLICY CONTEXT
Development and presentation of the quarterly reports conforms with the following adopted Budget Policies:
Financial Plan Purpose and Organization- Goal Status Reports which requires that the status of major program objectives be formally reported to the Council on an ongoing, periodic basis.
Financial Reporting and Budget Administration- Interim Reporting which requires the City to prepare and issue timely interim reports on the City’s fiscal status to the Council and staff.
DISCUSSION
2022-23 Year End Report
The 2022-23 Year-End Budget Report (Attachment A) shows that all funds ended the year in good financial standing. Major tax revenue sources exceeded projections and actual expenditures came in below budget for the General Fund. The report includes a year-end budget and performance analysis for each of the City’s ten departments. All departments ended the year within their budgets and had many accomplishments associated with Major City Goals and department goals. Operating budget savings were realized due to staffing vacancies and the activation of the City’s Fiscal Health Contingency Plan to reduce spending.
Item 7a
Although there were savings in the City’s normal operational budget, there were over $5.5 million in emergency storm-related expenditures that were paid for out of the City’s reserves1. Due to the operating budget savings and higher than anticipated revenue, the City will be able to replenish the reserve and bring it back to the policy target of 20% for FY 2023-24, a year earlier than forecasted in the 2023-25 Financial Plan.
Overall, the General Fund ended the year with an estimated $1.6 million in unassigned fund balance. The Local Revenue Measure ended the year with an estimated $3.6 million in unassigned fund balance. These figures are unaudited and subject to change until the audited financials are published in December 2023. Staff will make a recommendation to Council at mid-year (February 2024) on how to appropriate the unassigned fund balances. Given the extraordinary storm damage repairs necessary and overall project cost escalations, staff will likely return to Council with a recommendation to use any available balance on infrastructure projects. These recommendations will likely include funding for storm damage repair projects as well as completing additional roadway paving work. The Revenue Enhancement Oversight Commission will be given an opportunity to review the recommendation before it is presented to Council.
The City also made significant progress on its Capital Improvement Plan and Major City Goals (MCGs) during FY 2022-23. Several major projects such as the Orcutt Tank Farm Roundabout and the 2022 Roadway Sealing project were completed. However, some projects were slowed or postponed while staff responded to emergency creek and infrastructure repairs due to the unprecedented winter storms. On the Major City Goal side, 17 tasks were completed in the fourth quarter alone and many of the ongoing efforts continue into the 2023-25 Financial Plan. See Sections 2 and 3 of the report for more information on projects and MCGs.
City Manager Authorization to Appropriate AB 939/SB 1383 Fees The only action recommendation in this item is for Council to adopt a resolution (Attachment B) authorizing the City Manager to appropriate unspent AB 939 and SB 1383 fee revenue held in the General Fund assigned fund balance2.
The City’s Solid Waste & Recycling program is funded by AB 939/SB 1383 revenue, collected through the solid waste bills. The Solid Waste & Recycling program coordinates the planning, development, and implementation of programs and services related to solid waste, recycling, organics recycling, zero waste, and other waste diversion programs.
The revenue collected must only be used to pay for activities that help divert waste from the landfill.
1 R-11391 SECTION 5. The City Manager shall have authority to use General Fund Reserve balance to pay for operating and capital expenditures related to the January 2023 storm events and any revenue over expenditures at the end of FY 2022-23 will be used to build back the reserve. 2 Assigned Fund Balance. Intended use established by highest level of decision making by a body designated for that purpose or by an official designated for that purpose (delegated by the City Council to the City Manager).
Item 7a
Because of staff vacancies and program delays, the revenue is not always entirely spent in the year that it was collected; therefore, a designated account was created to carry over and hold any unspent balance between fiscal years. The creation of this account facilitates transparent accounting and reporting of these funds. The current balance in the fund is about $280,000.
Per the City’s Fund Balance and Reserve Policy, the City Manager has been delegated the authority to move the funds from the designation account into undesignated fund balance, but is not able to appropriate the funds to expend them without prior Council authority. Delegating appropriation authority to the City Manager of the AB939/SB1383 Fees after being moved from the designation account will allow staff to be nimble in responding to expenditure needs outside of the City’s usual budgeting cycles. These activities include, but are not limited to, waste characterization studies, rate analyses, or outreach as mandated by State initiatives.
Public Engagement
Public comment on this item can be provided to the City Council through written correspondence prior to the meeting and through public testimony at the meeting. The FY 2022-23 Year End Budget Report (Attachment A) will be posted on the City’s website for public review.
CONCURRENCE
Operating departments review and monitor financial results on a regular basis. The writeups and variance analyses provided in the report were prepared by the departments and reviewed by Department Heads, the Finance Director, and the City Manager.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378.
FISCAL IMPACT
Budgeted: Yes Budget Year: 2022-23
Funding Identified: Yes
Item 7a
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund N/A N/A N/A N/A
State
Federal
Fees
Other:
Total N/A N/A N/A N/A
The quarterly budget review reports on current revenue and expenditure trends to keep the Council and the community informed about the City’s fiscal picture and program efforts as adopted with the annual budget appropriation.
There is no fiscal impact in the recommendation for Council to authorize the City Manager to appropriate AB939 funds because these funds are already designated for this purpose within the General Fund assigned fund balance.
ALTERNATIVES
Council could decide not to adopt a resolution to delegate appropriation authority to the City Manager for AB939 fees. This is not recommended because it would require staff to return to Council before using any of this funding, which would slow the City’s efforts in waste characterization studies, rate analyses, or outreach as mandated by State initiatives.
ATTACHMENTS
A - FY 2022-23 Year End Budget Report (Unaudited)
B - Draft Resolution adopting authority for the City Manager to appropriate AB 939 and SB 1383 fees
Attachment A
Fourth Quarter Financial Report (Year-End)
Fiscal Year 2022-23
Introduction
The fourth quarter and year-end report provides an overview of the City’s financial position through the fourth quarter of FY 2022-23 (July 1, 2022 – June 30, 2023) for the General Fund and the City’s four enterprise funds. Note: The values within this report are unaudited and are subject to change until the City’s audit is complete and the 2022-23 Annual Comprehensive Financial Report is published in December 2023 and presented to the City Council in January/February 2024.
Table of Contents
General Fund Overview...................................2 General Fund Expenditures Overview ..........2
General Fund Revenues...............................5
General Fund Ending Position......................9
Administration and Information Technology ..11
City Attorney................................................15 Finance Department.....................................18 Non-Departmental, Support Services.............21
Human Resources Department......................22
Insurance Fund (Managed by Human
Resources)................................................25 Fire Department...........................................26 Police Department........................................31 Community Services Group (CSG)..................36
Community Development Department..........38
Parks & Recreation Department....................50
Public Works Department.............................56
Parking Fund ............................................61 Transit Fund .............................................65 Utilities Department.....................................68 Water Fund..............................................74 Sewer Fund ..............................................78 Solid Waste – AB 939 General Fund ...........81
Tourism Business Improvement District.........84
Downtown SLO Business Improvement District
....................................................................85 2022-23 Capital Improvement Plan in Review.86
Major City Goal Update.................................95
General Fund Overview
General Fund Overview
General Fund Expenditures Overview
Overall, the General Fund finished the year in a positive position and experienced about 6% in net expenditure budget savings (excluding storm expenditures). The savings can be associated mainly with staffing vacancies and slightly reduced expenditures in the second half of the year due to activation of the Fiscal Health Contingency Plan. These savings will help the City replenish its reserves that funded over $5 million of storm expenditures in FY 2022-23.
Detailed department information and variance explanations can be found starting on Page 11 of the report, but overall, every department ended the year within the allocated budget.
Table 1: Expenditure Overview by Department
* Shown separately in order to reflect a more accurate year-over-year comparison for departments. Line 17 includes the FY 2021-22 one-time $10.2 million additional down payment to CalPERS from the General Fund (R-11307). This cost is distributed annually between the departments based on calculated weights.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
1 Internal Services
2 Administration/IT $ 8,045,325 $ 11,695,913 $ 11,325,921 $ 369,991 3% $ 10,083,778 3 City Attorney $ 1,078,846 $ 1,504,532 $ 1,474,278 $ 30,253 2% $ 1,247,202 4 Finance $ 1,803,610 $ 2,246,817 $ 2,109,529 $ 137,288 6% $ 2,196,074 5 Non-dept, Support Services $ 653,721 $ 1,105,171 $ 399,194 $ 705,977 64% $ 1,432,583 6 Human Resources $ 1,511,305 $ 2,012,680 $ 1,896,008 $ 116,672 6% $ 1,953,467 7 Public Safey
8 Fire $ 12,053,617 $ 12,216,993 $ 12,042,091 $ 174,902 1% $ 12,503,730 9 Police $ 15,072,783 $ 16,889,261 $ 16,260,719 $ 628,541 4% $ 17,844,283 10 Community Services Group (CSG)
11 CSG Administration $ 501,896 $ 710,820 $ 624,775 $ 86,045 12% $ 642,674 12 Community Development $ 6,234,270 $ 7,877,995 $ 6,936,859 $ 941,136 12% $ 7,460,625 13 Parks & Recreation $ 4,110,700 $ 5,021,865 $ 4,497,028 $ 524,837 10% $ 5,227,462 14 Public Works $ 12,722,187 $ 16,669,102 $ 15,347,872 $ 1,321,230 8% $ 16,299,915 15 Solid Waste (Utilities) $ 162,676 $ 425,624 $ 301,741 $ 123,883 29% $ 303,210 16 Total $ 63,950,936 $ 78,376,772 $ 73,216,015 $ 5,160,757 7% $ 77,195,002 17 CalPERs Unfunded Liability* $ 20,837,422 $ 13,916,694 $ 13,916,694 $ 0 0% $ 11,132,870 18 Total $ 84,788,358 $ 92,293,466 $ 87,132,709 $ 5,160,757 6% $ 88,327,872 Index Department
FY 2022-23
How to read the budget tables in this report
Budget: Adopted budget plus any encumbrances from prior year(s) or approved budget adjustments made throughout the year.
Actual: Actual expenditures plus any encumbrances or obligated funds that were carried forward to FY 2023-24. Data is as of 8/30/2023.
General Fund Overview
Table 2: Expenditure Overview by Type (Category)
Detailed expenditure information for each department starts on page 11of the report, but unsurprisingly, most of the savings were in Staffing. Actual staffing expenditures vary greatly based on the amount of turnover throughout the year, position reclassifications, and employee health benefit options. Over the last six years, annual salary savings ranged from 3% to 7%; therefore, the City assumes a conservative 3% savings in the General Fund forecast. After considering the assumed salary savings programmed in the fiscal forecast, there was an additional $2.2 M (2.5%) in savings.
Table 3: FY 2022-23 Salary Savings
2022-23 Staffing Budget 2022-23 Actual Funds Available (or "Savings") a $69,393,719 $65,560,028 $ 3,803,691
b Assumed salary savings (3% of initial budget) $ 1,632,000 c Additional salary savings (a-b) = 2.5% $ 2,171,803
The City’s Contract Services accounts broadly include budget for annual service contracts, one-time consultant services, and Major City Goal tasks. Variances are more granularly explained the departmental sections, but the majority of the savings in FY 2022-23 can be associated with Fiscal Health Contingency Plan savings or with strategic goal related efforts that were either not completed or came in below budget1. The Utilities category was on track with budget. There were some overages due to the natural gas rate spikes seen over the winter, but they were offset by some savings in electricity costs from the City’s switch to the 3 Central Coast Community Energy (CCCE) program.
1 Often times budget allocationsfor Major City Goal initiatives are based off estimates.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
1 Staffing $ 67,638,979 $ 69,363,719 $ 65,560,028 $ 3,803,691 5% $ 69,137,153 2 Contract Services $ 9,778,408 $ 14,536,567 $ 13,554,492 $ 982,075 7% $ 10,725,560 3 Other Operating Expenditures $ 4,609,947 $ 5,246,239 $ 4,944,824 $ 301,415 6% $ 5,163,024 4 Utilities $ 2,761,025 $ 3,146,941 $ 3,073,365 $ 73,576 2% $ 3,302,135 5 Total $ 84,788,358 $ 92,293,466 $ 87,132,709 $ 5,160,757 6% $ 88,327,872 Index Expenditure Type
FY 2022-23
General Fund Overview
Figure 1: Year-over-year Expenditures by Type
*Operating expenditures only. Excludes insurance, debt, capital, and CalPERS additional down payments (ADP) made in FY 2018- 19 and FY 2021-22.
Considering the higher than usual inflation over the last five years, the General Fund budget has only increased modestly, with most of the growth in Staffing (Salaries and Benefits). Staffing increased because of three major factors:
1. The addition of over 60 FTEs to support growing community needs.
2. Equity adjustments needed to keep the City a competitive employer.
3. Increases in health insurance and other employee benefit costs.
General Fund – Storm Expenditures
The City’s winter storms resulted in two separate emergency declarations at the Federal, State and local level. The City is eligible for reimbursement of most costs related to the storms. As of the end of the fiscal year, the City had spent about $3.6 million for operating costs in response to the storms, including supplies, emergency protective measures, debris removal, and minor repairs. Approximately $275,000 was spent on capital expenditures for immediate repair of damages to City infrastructure, and an additional $7million remains on purchase orders for future planned expenditures. Though the numbers continue to shift, the overall cost of damages to the City is now expected to exceed $28 million; however, staff are still working to prioritize the repairs and identify which projects will be eligible for the highest reimbursement. For more information on storm related capital project, see page 86.
All FY 2022-23 costs were temporarily paid for using the City’s designated reserve account2. The reserve will be replenished as FEMA or California Disaster Assistance Act (CDAA) reimbursement revenue is received or by using any available revenues over expenditures at year end (see
2 Per the City’s Fund Balance and Reserve Policy, it maintains a reserve of 20% of the General Fund operating budget. On February 7, 2023 Council authorized the City Manager to use General Fund Reserve balance to pay for storm costs (R-11391).
$-
$10
$20
$30
$40
$50
$60
$70
2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Millions
Year-over-year General Fund Expenditures, by Category
Salaries and Benefits Contract Services Other Operating Expenses Utilities
General Fund Overview
General Fund Ending Position).
Table 4: FY 2022-23 Storm Expenditures and Use of Reserves Line 2022-23
Actual
2023-24
Projected
2024-25
Projected Total
1 Storm Expenditures Utilizing Reserves $(3,899,843) ($5,100,157) ($9,000,000) 2 Reimbursement Revenue (93.5%) $3,646,354 $4,768,646 $8,415,000 3 Net Total/Impact on General Fund $(3,899,843) $(1,453,803) $4,768,646 $(585,000) General Fund Revenues
The table below shows an overview of the General Fund revenue for FY 2022-23. More detail about fee revenue can be found within the respective department write-ups.
Table 5: General Fund Revenue Overview
*Special Revenue Funds or sub-funds of the General Fund Sales and Use Tax Revenue: Despite ongoing threats of an economic downturn, sales tax revenue remained incredibly strong through FY 2022-23. There is evidence of a cooling, but this was programmed into the budget. Both the Bradley Burns sales tax and the local transaction tax exceeded projections by about 2%. Measure G-20 saw modest declines in Q3 building materials, services stations, and new-used vehicles; however, some of this could have been due to the storms that hit the areas during that time.
Although the categorical data has not been released by the CDFTA, the City received itsfinal payment for June 2023 and Q4 results show an overall decrease of 0.2% compared to the previous year. It is important to note that FY 2021-22 Q4 revenue was an all-time high, so this decline is not too alarming.
Note: The Bradley Burns budget assumption includes a negative $600,000 adjustment to account for a misallocation of revenue by the California Department of Tax and Fee Administration (CDTFA) that should FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Projection
1 Tax and Franchise Revenue $ 96,490,763 $ 98,267,347 $ 100,611,346 $ 2,344,000 2% $ 100,527,765 2 Local Revenue Measure G* $ 29,172,258 $ 30,141,532 $ 30,405,434 $ 263,902 1% $ 30,262,098 3 Sales Tax (Bradley Burns) $ 22,201,225 $ 21,524,304 $ 21,893,989 $ 369,685 2% $ 22,578,995 4 Property Tax $ 20,970,984 $ 21,473,397 $ 21,810,144 $ 336,747 2% $ 21,999,786 5 Transient Occupancy Tax $ 10,650,762 $ 10,704,000 $ 10,882,091 $ 178,091 2% $ 10,704,000 6 Utility User Tax $ 5,085,292 $ 5,544,000 $ 6,265,673 $ 721,673 13% $ 5,710,320 7 Business Tax $ 2,861,863 $ 3,157,566 $ 3,248,552 $ 90,986 3% $ 3,252,293 8 Cannabis Tax $ 998,875 $ 1,100,000 $ 1,127,295 $ 27,295 2% $ 1,100,000 9 Franchise Fees $ 1,978,295 $ 1,800,000 $ 2,131,191 $ 331,191 18% $ 1,854,000 10 Gas Tax* $ 1,130,063 $ 1,305,634 $ 1,239,701 $ (65,933) -5% $ 1,389,292 11 Gas Tax (SB1)* $ 911,849 $ 1,019,914 $ 1,062,584 $ 42,670 4% $ 1,177,994 12 Safety Prop 172 $ 529,299 $ 497,000 $ 544,692 $ 47,692 10% $ 498,988 13 Fees for Service and Other Revenue $ 11,917,323 $ 12,338,611 $ 14,810,795 $ 2,472,184 20% $ 13,064,546 14 Development Review $ 5,970,996 $ 6,653,370 $ 6,424,716 $ (228,653) -3% $ 6,275,536 15 Parks & Recreation $ 1,694,241 $ 1,997,305 $ 1,791,196 $ (206,109) -10% $ 2,021,599 16 Fire $ 1,502,356 $ 1,602,212 $ 1,605,535 $ 3,323 0% $ 1,577,836 17 Police $ 561,909 $ 642,248 $ 753,345 $ 111,097 17% $ 611,917 18 General Government $ 2,187,820 $ 1,443,477 $ 4,236,002 $ 2,792,526 193% $ 2,577,658 21 TOTAL $ 108,408,086 $ 110,605,958 $ 115,422,141 $ 4,816,183 4% $ 113,592,311 FY 2022-23
General Fund Overview
have been allocated to another County agency. Unfortunately, this adjustment has not yet been made; however, is expected to hit in the fall of 2023. To ensure that FY 2023-24 revenue is not negatively impacted, staff manually removed $600,000 from the actuals above and will set aside this amount to offset the future adjustment.
The graph below shows the change in sales tax by major business group for the first quarter of the calendar year (January-March 2023). For the full report, visit slocity.org/finance.
Table 6: Year-over-year Sales Tax Comparison – FY 2022-23 Q3 (Bradley Burns) Property Tax: Pending a major housing crash, property tax revenue continues to grow steadily and remains the City’s most stable revenue source. The City recorded an all‐time high in FY 2022‐23, nearly 4% higher than the prior year due to an attractive and flourishing real estate market. The main reason for growth is the transfer of ownership and the increase in Taxable Assessed Value of homes in the community. Although the days of record‐low mortgage rates are over and the market has cooled, home prices remain sticky because inventory is so low. Data shows that number of home sales was down 9.5% in July 2023 compared to July 2022, but the median sale price was down only 3.1%3. Based on the latest estimates from the County Assessor’s Office, there will be 4% growth in FY 2023-24.
Transient Occupancy Tax (TOT): At the third quarter review, staff had indicated it was likely that TOT revenue wouldn’t reach projections due to storm impacts; however, an incredibly strong fourth quarter turned that around. The average occupancy rate was about 67% which is slightly higher than last fiscal year; however, the average daily rate (ADR) for the year was lower by about 4%. The tourism promotion for the city is led by the work of the City’s Tourism Business Improvement District, known as Visit San Luis Obispo. Staff do not anticipate any mid-year changes to the FY 2023-24 TOT budget.
Utility User Tax (UUT): The FY 2022-23 UUT projection was notably conservative because of the volatility seen in UUT over the last four years; however, the actuals exceeding projections by over 13% is higher than anticipated. After a closer analysis, this is due to several factors related to utility rate spikes experienced over the last year:
3 ‘San Luis Obispo County Housing Market.” Redfin, 23 Aug. 2023, https://www.redfin.com/city/17464/CA/SanLuis-Obispo/housing-market
General Fund Overview
1. An approximate 7% increase in UUT from electricity. Electricity makes up just over 40% of total UUT revenue.
2. An approximate 51% increase in UUT from natural gas. Natural gas makes up 20% of total UUT revenue.
3. An approximate 5% increase in UUT from telecommunications, cable, and water. These categories make up the remaining 40% of revenues.
Staff are working with the City’s UUT consultant, HdL, to better understand the impacts and will likely make a recommendation to increase the FY 2023-24 budget at mid-year.
Business Tax: Business taxes are collected at the beginning of the fiscal year and are based on the gross receipts of the previous calendar year. To no surprise the FY 2022-23 revenues, based on calendar year 2021, were significantly higher than FY 2021-22, based on the heavy-hit Covid year 2020. Despite adjusting the budget upward in expectation of that, actual revenues still slightly exceeded projections. Since the City will receive most of its current year(FY 2023-24) business tax revenue before the mid-year review in February 2024, the budget will be adjusted based on actuals, likely above the current projection. Multiple years of post-covid data will help staff identify trends and improve long-term forecasting for this revenue source.
Cannabis Tax: For the first time since cannabis became legal in the City, cannabis tax revenue exceeded projections; however, the budget was significantly lowered by $300,000 at the FY 2022-23 mid-year review. Looking back at the City’s original cannabis tax projections(from 2019), the annual revenue was expected to exceed $1.5 million by this time; however, delays in businesses opening and lower-thananticipated demand have shifted the forecast. Across the state, the cannabis market has fallen short of what economists expected since the sale of recreational cannabis became legal in 2018. On a positive note,monthly cannabis tax revenue has stayed very consistent since the second retail location opened in April 2021, thus making planning and revenue forecasting easier moving forward.
Franchise Fees: Like UUT revenue, franchise fee revenue was particularly high because the franchise agreements are based on the utility providers’ gross receipts, which spiked in FY 2022-23 due to rate increases. The City’s top franchises’ annual remittal fees increased by approximately 25%.
Gas Tax: Gas tax revenue is split into two unique funds. The main “Gas Tax” revenue (line 10) comes from the Highway Users Tax Account (HUTA), which is a per gallon “gasoline tax”, while SB1 (line 11) or the Road Maintenance and Rehabilitation Account (RMRA) is a per gallon flat fee. The City receives its revenue projections from the California Local Government Finance Almanac. FY 2022-23 revenues were very close to projections. The reason that the growth between the two is often different is because under SB1, various fixed-amount statutory allocations are made from the SB1 tax rates prior to the city and county allocations. Additionally, an individual city’s allocations are affected by change in the city’s population relative to the change in state population. Both revenues are collected in “special revenue” funds because theymust be used to supporttransportation services or infrastructure. Looking forward, the City expects stable, modest year over year growth. While fuel consumption may remain flat or in slight decline, annual cost of living adjustments will help to maintain revenues.
General Government: General Government revenue includes all the City’s non‐departmental revenue such as business license permit fees, interest earning, rent, and other miscellaneous revenue. It also includes grant and subvention revenue which fluctuates significantly from year to year. The most notable
General Fund Overview
variance contributing to the over budgeted revenue was positive $1.2 million investment earnings or Fair Market Value (FMV) adjustments. The FMV adjustment is essentially an accounting process that makes it possible to reassess the fair value of the City’s assets when there is a considerable difference between the market and the current book value of the City’s monetary assets. Interest earnings and FMV adjustments swing widely between fiscal years based on the market and are almost impossible to forecast. The table below showsthe last four years of actuals. Due to the huge negative adjustment in FY 2021-22, the City adjusted its budget for FY 2022-23 in preparation for another hard-hit year.
Table 7: Year-over-year Interest on Investment Earnings and Fair Market Value Adjustments FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 23-24 Forecast Budget $230,000 $230,000 $230,000 $(1,270,000) $230,000 Actual $1,113,062 $54,360 $(1,501,692) $1,192,259 -
Variance $883,062 $(175,640) $(1,731,692) $2,462,259 -
More detail about fee revenue can be found within the respective department write-ups.
General Fund Overview
General Fund Ending Position
The table below shows the ending net position of the general fund and the estimated fund balance at year end. While these numbers are still unaudited, they show that the fund ended with revenue under expenditures (see footnote) and an undesignated fund balance of about $1.6 million. In line with best practices and consistent with the City’s usual process, this balance should not be appropriated until after the formal audit is complete. Afterthe audited financials are published in December 2023, staff will make a recommendation to Council at mid-year (February 2024) on how to appropriate the unassigned fund balance. The City’s Fiscal Policies provide a framework for using fund balance:
1. Reserve Policy: Revenues in excess of expenditures at the end of the fiscal year shall be used to first satisfy committed reserve requirements before appropriating for other uses.
2. Fiscal Policy Section 8 ‐ CalPERs and Unfunded Liabilities: The City sets the following prioritization of unassigned General Fund balance:
a. Additional discretionary payments to CalPERS
b. Infrastructure investments
c. Emerging Health and Safety needs of the community
Table 8: General Fund Ending Position
General Fund Ending Position4(UNAUDITED)
1 A. Beginning Balance $ 40,745,506
2 (+) Revenue $ 134,762,075
3 (-) Expenditures $ (137,675,119)
4 B. Revenue Over/(under) Expenditures5 $ (2,913,045)
5 C. Ending Fund Balance (A+B) $ 37,832,461
6 Committed to:
7 Policy Reserve Level - 20% of operating budget $ 13,727,000 8 Local Revenue Measure Balance (see Table 9 on next page) $ 4,979,120 9 Insurance Fund Balance (see page 25) $ 585,456
10 Assigned to:
11 Encumbrances $ 2,638,965
12 115 Pension Trust Fund $ 2,000,000
13 CalPERS ADP (April 2024 payment) $ 2,000,000
14 Revenue Stabilization Reserve $ 2,000,000
15 Development Services Designation $ 464,136
16 Solid Waste AB939 $ 281,000
17 Other Restricted $ 35,487
18 SLO REP $ 3,940,000
19 Economic Development Opportunities $ 1,400,000
20 D. Undesignated Fund Balance [C-(Lines 7-19)] $ 3,781,296 21 E. Required to maintain reserve levels and fund previously approved one-time expenditures in FY 2023-24 $ 2,144,570 22 F. Estimated Year End Balance for Future Appropriation (D-E) $ 1,636,726
4 Includes Local Revenue Measure and Insurance sub-funds. 5 This value is negative because FY 2023-24 expenditures includes one-time expenditures that used prior year fund balance.
General Fund Overview
Local Revenue Measure Ending Position
The table below shows the ending net position of the Local Revenue Measure (LRM). Because LRM is a sub-fund of the general fund and a general-purpose tax, it can be used to fulfill the City’s fiscal policy guidelines(referenced in the previous section) if necessary. Based on unaudited numbers, there will be sufficient non-LRM balance to replenish reserves and make an additional payment to CalPERs; therefore, LRM can be used to provide one-time funding for community services and infrastructure investments.
Given the extraordinary storm damage repairs necessary and overall project cost escalations, staff will likely return to Council with a recommendation to use any available balance on infrastructure projects.
These recommendations will likely include funding for storm damage repair projects as well as completing additional roadway paving work. The Revenue Enhancement Oversight Commission will be given an opportunity to review the recommendation before it is presented to Council.
Table 9: Local Revenue Measure Ending Position
Local Revenue Measure Ending Position (UNAUDITED)
A. Beginning Balance $ 5,696,864
(+) Revenue $ 30,405,434
(-) Expenditures $ (32,340,558)
B. Revenue Over/(under) Expenditures $ (1,935,123)
C. Unassigned LRM Fund Balance (A+B) $ 3,761,741
Administration and IT
Administration and Information Technology
Office of the City Manager - The Office of the City Manager continued to provide information and recommendations to the City Council, implemented Council policies and programs andmanaged the dayto-day operations of the City including the completion of Major City Goal (MCG) tasks.
The Office of the City Manager operates the City Communications Program, which focused on improving City processes and procedures, and putting new systems in place, to allow for frequent and consistent communications across all City departments. This program supports all City departments and assists City staff in working with on-call marketing and public relations consultants to improve community engagement. The Public Engagement and Noticing Manual was updated in partnership with the community and the Office of Diversity, Equity and Inclusion. The updates focused on creating greater equity to increase diverse participation in City government. Through this program, staff reached and engaged with more people in San Luis Obispo than ever before. The City published 14 topics on its “Open City Hall” platform and received 4,668 responses equating to a total of 233.8 hours of public comment.
The City’s audience on social media grew by 26.4% to 93,157 followers and subscribers and the City’s social media content across all pages were shown to people more than 16 million times (impressions).
The rate at which social media users engaged with the City’s content also increased by 23.3% (for an average engagement rate of 8.8% and 1.4 million engagements, including comments, reactions, likes, clicks, shares, etc.). More people visited the City’s website than ever before and pageviews more than doubled compared to the previous year (nearly 3.5 million pageviews in FY 2022-23).
The Office also continued to manage the City’s Legislative Program including the development of an updated Legislative Platform and advocacy to the State on issues affecting the City as well as the City’s Grant Application Program which has netted over $30 million in funding for the organization since inception.
Office of Economic Development and Tourism – The Economic Development program was a major contributor to the Economic Recovery, Resiliency & Fiscal Sustainability Major City Goal. All the Office’s tasks and goals were completed on or ahead of schedule. The use of the of the $250,000 that was allocated to fund programs to aid in economic recovery and resiliency that were “to be determined” during the budget process were used to support various programs including the Downtown activation programs, return of the Buy Local Bonus program, a new Eat Local Bonus program, additional childcare grants, employee recruitment support and other smaller initiatives. The Office also assisted the Office of Diversity, Equity, and Inclusion in the roll out of the DEI Business grant program. The update of the Economic Development Strategic plan was completed and the plan to reorganize the Office of Economic Development and Tourism was approved in June of 2023 as part of adoption of the 2023-25 Financial Plan.
To accompany this work, the Community Promotions programs though the Promotional Coordinating Committee (PCC), and the tourism marketing through the Tourism Business Improvement District (TBID) enhanced the reach of the Economic Development program this year. Tourism in the city remained strong, resulting in $10.8 million in transient occupancy tax (TOT) contributed to the general fund and outperforming the budget by 22%. Tourism promotion continued to be led by the City’s TBID. Through the PCC the City awarded $200,000 in grant funding to local non-profit organizations through two grant opportunities in the fiscal year, the Arts & Culture Recovery Grant (ACRG) and the Cultural Grants-In-Aid
Administration and IT
(GIA) program. The PCC also expanded the work to promote Public Art in San Luis Obispo by establishing a consistent brand and implementing a 10-month promotional plan. In collaboration, the TBID and PCC rolled out a new neighborhood identity program featured on VisitSLO.com, funded through Economic Development and managed by the PCC.
Office of Sustainability and Natural Resources - In coordination with other departments, staff focused this year on the delivery of the Climate Action, Open Space, and Sustainable Transportation MCG work program. Major highlights included theimplementation of Climate Action Plan across each of itssixpillars, as well as implementation of the Lead by Example Municipal Operations Carbon Neutrality Plan. City Council adopted the Climate Action Plan Volume 3 work program for 2023-2027, the Climate Adaptation and Safety Element of the City’s General Plan, the Community Forest Plan, and the Righetti Hill Open Space Conservation Plan. At the same time, staff remained adherent to its mantra of both planning and doing and significant implementation in each of these program areas was achieved. Lastly, staff played a role in the January through March flood recovery response and subsequent emergency creek repair projects.
Office of the City Clerk - This year the City Clerk’s Office processed agenda packets for 39 City Council meetings; 24 of those meetings were between January and June of 2023. The Clerk’s Office also managed the remodel of the Council Hearing Room and upstairs breakroom. With the help of IT, the Council Chambers and Council Hearing Room were updated with an automated audio and video system that enables the City to host hybrid meetings for City Council. 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 - This year, the Office of Diversity, Equity, and Inclusion implemented key components of the 2021-23 Financial Plan that build the foundation for upcoming years, which include the presentation of the DEI Strategic Plan Framework before Council on May 2, 2023, the l execution of the first round of Human Services Grants (HSG), and the DEI SLO Business Grant, which is a shared goal between the Office of Economic Development & Tourism, and the Office of DEI. Additionally, the Office of DEI completed the search and executed the contract for a consultant who will support the development of the DEI Strategic Plan that is slated to be presented before Council by Winter of 2024.
The Office of DEI also executed a contract with Cal Poly, which is designed to create Multicultural Programming in an effort to create and further learning spaces in the community by focusing on critical topics that build community belonging and acceptance.
Information Technology Network Services – This year Network Services produced the City's first Broadband Plan funded through the Local Agency Technology Assistance (LATA) grant administered by the California Public Utility Commission. A Request for Proposals to identify a partner for conceptual network design is underway and will advance the project in the coming year. Construction on the KVEC Tower is nearing completion with the permanent tower erected, and final construction is expected to wrap up this Fall.
Control Systems Administrators completed the Water Treatment Plant upgrade and have continued to support the installation and programming of the Supervisory Access and Data Acquisition (SCADA) systems at the Water Resource Recovery Facility (WRRF). These systems are part of the ongoing WRRF CIP project. Control Systems Administrators are also working with Utilities on the construction of a new lift station at Calle Joaquin by overseeing the design, installation, and commissioning of SCADA systems at that facility. IT support services resolved 3,244 support tickets over the year, covering a range of support activities including hardware and software installation, upgrades, and troubleshooting.
Administration and IT
Information Technology Information Services – The Information Services, Geographic Information System (GIS) Team played an important role in storm response and recovery efforts this Winter and Spring by creating a mobile application to collect the field data and create a situational status dashboard to disseminate authoritative information for users to make informed decisions. The Database Administrator and System Application Specialist completed Power Business Intelligence (BI) reports measuring key performance indicators in support of the City’s Transparency and Open Government efforts. GIS Team updated all maps in the Climate Adaptation and Safety Element. The Information System (IS) staff also revamped the Homeless Camp application that supports interagency workflows.
The Oracle project portfolio management (PPM) reconfiguration was completed in March 2023. The program team is currently working on the Overtime and Dual Calculation (ODC) which will automate the overtime base rates calculation and enable comparison of Memorandums of Understanding (MOU) and Fair Labor Standards Act (FLSA) within Oracle to facilitate payment of the higher of the two without the need to extract and reimport values. Additionally, IT continuously produces step-by-step interactive user guides, called Oracle Guided Learning (OGL). There are 150 OGLs in production, and many more are in development.
Table 10 - Administration and IT Performance Measures
Objective Measure
2022-23
Target
2022-23
Actual
Provides City-wide
communications to the
community.
Strategic Goal: Citywide
Communications
Open City Hall Participant Satisfaction Rating 90% 94%
# of City News Releases 175 6716
Provides reliable IT resources to
the organization and community.
Strategic Goal: Information
Technology
Maintain City Network Reliability Uptime Status 99.9% 99.9% Data backed-up in Gigabytes 173,000 173,000
Number of GIS layers maintained 915 915
Economic Stability
Strategic Goal: Economic Recovery
and Stability
Contacts with businesses regarding starting, expanding, and/or staying in the City 75 99
One-time funds used for direct aid to local businesses and non-profits $250,000 $495,0007
Supports our commitment to
sustainability and provides open
space resources to the
community.
Strategic Goal: Climate Action,
Open Space, and Sustainable
Transportation
# of Green Team 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 1
# of City-wide DEI Trainings Offered 10 38
6 Total number of e-notifications sent out, including public notices and news / announcements. The City no longer sends traditional news releases and instead sends e-notifications to the community, encouraging local reporters to subscribe for news and announcements.
7 One-time DEI Business Grants expanded direct aid administered to the community. 8 Due to staff turnover in the Office of DEI there were fewer trainings offered this fiscal year.
Administration and IT
Objective Measure
2022-23
Target
2022-23
Actual
Strengthens the City’s
commitment to advancing
Diversity, Equity and Inclusion
Strategic Goal: DEI
Funds for High-Impact DEI Grants Awarded $150,000 $300,0009
Table 11 - Administration/IT Budget Variance Analysis
Staffing – The department ended the year with 3% savings, aligned with the City’s assumed salary savings rate. Over the course of the year a portion of salary savings generated from vacant positions, such as the Technology Project Manager, were redirected to contract services to continue momentum on sensitive projects.
Contract Services – The contract services budget was used to deliver on the objectives and commitments outlined in the Major City Goals. This included DEI Business Grants, DEI High Impact Grants, Human Services Grants, contract services for Downtown, IT infrastructure maintenance and more.
Other Operating Expenses – The department ended the year with some savings in other operating expenses. Most of the savings were tied to expenses related to vacant positions and associated training and start-up costs.
Utilities –Communication services drove the Utilities line over budget this year. Communication services are numerous and include phone services, air cards, and connectivity for public safety vehicles, among other things. There is an increased demand from workforce and programs for data plans in the form of cell phones, tablets, air cards, and machine to machine readers. These costs will now be accounted for when positions are added to avoid overages and large true ups with new budgets.
9 FY 2022-23 DEI High Impact Grants include $150,000 from the missed grant cycle in FY 2021-22.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing $ 5,554,182 $ 6,076,047 $ 5,892,994 $ 183,054 3% $ 6,073,599 Contract Services $ 2,950,324 $ 5,392,285 $ 5,268,132 $ 124,153 2% $ 3,628,317 Other Operating Expenditures $ 762,644 $ 886,919 $ 805,066 $ 81,852 9% $ 820,503 Utilities $ 327,771 $ 347,342 $ 366,410 $ (19,068) -5% $ 327,412 TOTAL $ 9,594,922 $12,702,593 $12,332,602 $ 369,991 3% $10,849,831 Administration/IT
FY 2022-23
City Attorney
City Attorney
A Year In Review
The first few months of the year were turbulent as staff oversaw the work needed to configure a new office space for the department and trained three new employees while preparing to hire a fourth. That fourth new hire was the first ever Deputy City Attorney who had her first day just as the Assistant City Attorney began a leave. Department staff pulled together, supplemented by contract attorneys, to continue meeting deadlines and producing quality work-product for Council and City staff throughout the year, but the Department continues to experience staff turnover, recently filling one support staff vacancy and preparing to launch a recruitment for a second vacancy.
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:
1. Final closure of various, high-profile litigation including Natural Healing Center’s dispute of the revocation of their Cannabis Business Operating Permit and the writ filed by a group, calling itself SLAP, contesting the City’s environmental determination for a mixed-use development at the corner of Marsh and Nipomo.
2. Continued management and negotiation of several high-profile legal or litigation matters including homelessness litigation and evolving caselaw, two consecutive California Voting Rights Act (“CVRA”) district election demands, litigation arising out of the murder of De tective Luca Benedetti, and ongoing analysis and City response to a federal court decision implicating the City’s electric building regulations.
3. Successfully onboarded new Deputy City Attorney who has assumed complex caseload well ahead of anticipated training schedule.
4. Advised on the collection and completed the review and production of voluminous records in response to discovery and Public Records Act requests with legal implications.
5. Legal and negotiations support for implementation and dispute resolution regarding the City’s development agreements for Avila Ranch and San Luis Ranch housing developments, and provided legal advice and support on development review and Capital Improvement Project processing and legal compliance.
6. Assisted with drafting and review of the Subdivision Regulations Update
7. Participated in the EOC response to the 2023 Winter storms and flooding
8. Filed for a receivership for the hazardous property at 48 Prado.
9. Assisted with transaction of the Anderson Hotel affordable housing project.
10. Advised on update of the Cannabis Regulations.
11. Advised on drafting and implementation of the CAMP Standards (Compassionate Assistance, Mitigation and Prevention) for interactions with unhoused community members.
Challenges
Staffing issues from mid-year until June pulled attention away from completion of process improvement, service efficiency and file and document management projects. Additional guidance and re-training were provided for the support staff hired earlier in the year but, for various reasons, all positions were either
City Attorney
vacant or held by a new employee by June. This meant remaining staff were taking on additional workload or onboarding new staff on a continuous basis.
There were several ongoing, time-consuming legal matters requiring intensive legal analysis and support, including the receipt of a second CVRA demand letter a few months after the first was settled; the collection of voluminous records for discovery in Langley v City (allegations of civil rights violations by unhoused community members); ongoing development agreement negotiations; and unanticipated City project, public/private infrastructure delivery, and real property acquisition matters that have consumed significant legal resources and hindered focused staff training and development and process improvement work at the level needed and anticipated.
Table 12 - City Attorney Performance Measures
Strategic Goals Measure 2022-23
Target
2022-23
Actual
Timely and Responsive
legal advice and support
Strategic Goal:
Department Objectives
Administrative Citation Appeals Received by the City 120 110 Appeals closed without need of a hearing10 25 23
City assisted corrections to defective appeals to allow access to hearing 15 6
City facilitated hearings on the record without need
for personal appearance by Appellant 40 35
# of hearing days scheduled 7 1811
Legal Training &
Compliance
Strategic Goal:
Department Objectives
# of Council, Staff, and Advisory Body legal trainings, legal updates, and compliance advisory sessions 12 8
12 Municipal Litigation &
Prosecution Management
Strategic Goal:
Department Objectives
Percentage of Claims Resulting in Litigation <5% 7.8%13 Liability Claims Against the City Reviewed/Managed 70 77
10 Closed in some way that did not include a decision being issued (e.g. withdrawn by appellant, dismissed for untimely filing, voided by the issuing department)
11 A hearing officer’s preference for less appeals heard on a si ngle day led to more overall hearing days needing to be scheduled.
12 Onboarding of multiple staff members and an extended leave of absence made it difficult to prioritize time for the preparation of training materials.
13 Of the six claims that went to litigation, one is a private matter in which the City was named due to plaintiff’s misunderstanding of HASLO and will be dismissed soon; for two the City is indemnified under terms of either an event permit or a construction contract; the others are a personnel matter, a trip and fall at a City park, and an allegation that code enforcement reduced the sale price of a homeowner’s property, which the City assesses as meritless.
City Attorney
Table 13 - City Attorney Budget Variance Analysis
Staffing – Staff turnover and an extended leave of absence during the course of the year contributed to savings at year end. A portion of the savings was transferred to Legal Services and used to fund an increase in the contract to defend the City against the CVRA demand letter received in February.
Contract Services – The Contract Services budget line ended the year under budget but, considered here with Legal Services, the category appears overspent. Staff will adjust their process for tracking budget going forward to avoid this misrepresentation.
Other Operating Expenses – The department funded the physical transition of its offices and managed the defense of the City in various matters while staying within budget.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing $ 1,146,056 $ 1,167,045 $ 1,137,918 $ 29,126 2% $ 1,329,184 Contract Services $ 207,765 $ 517,757 $ 519,073 $ (1,316) 0% $ 50,500 Other Operating Expenditures $ 20,884 $ 28,424 $ 25,981 $ 2,443 9% $ 45,360 TOTAL $ 1,374,705 $ 1,713,226 $ 1,682,973 $ 30,253 2% $ 1,425,044 City Attorney
FY 2022-23
Finance Department
Finance Department
The Year In Review
The Finance Department ended the year with about 5% overall budget savings and was able to deliver on its goals. The Department continued to monitor the City’s unfunded liabilities for the pension and retiree health plan and contracted with an actuarial to get an updated funded status and long-term forecast. In coordination with IT and HR, the Department also continued to make enhancements in the Oracle system that will benefit the organization in the long run.
Because FY 2022-23 was a financial planning year, the Department spent significant time updating its fiscal forecasts and working with departments and Council on the development of the 2023-25 Financial Plan.
As of a result of the 2023 storms, Finance staff were activated in the Emergency Operations Center. They played a key role in tracking expenditures and ensuring that employees were submitting the required documentation in order to maximize the possibility of reimbursement through FEMA and CalOES via the California Disaster Assistance Act (CDAA). The Department is also responsible for ongoing reporting to the US Treasury related to the use of $13.6 million in State and Local Fiscal Recovery Funds provided to address the fiscal impacts of the COVID-19 pandemic.
Lastly, the Department welcomed a new Finance Director in December 2022. Based on the departmentspecific results of the Citywide Employee Engagement Survey conducted in January 2023, the Finance Department began work with HR on an organizational assessment in the Spring of 2023. The assessment is still underway and is intended to: update job descriptions to more accurately reflect the work performed by staff, assure that reporting relationships are appropriate, and that staff throughout the Department have “career ladders” to support their growth and development.
Accomplishments and Strategic Goal Updates
1. Made an additional $2 million payment to CalPERsto help fund pension liabilities and further its Fiscal Health Response Plan.
2. Continued enhancements to the Oracle Enterprise Resource Planning (ERP) and Human Capital Management (HCM) systems in coordination with HR and IT.
3. Reconfigured the Project Portfolio Management (PPM) module to enable more accurate tracking of project budgets.
4. Built out the City’s external budget portal: OpenBook.
5. Established a Section 115 Trust Fund with the California Employers’ Pension Prefunding Trust.
6. Updated the City’s debt management policy.
7. Received the GFOA Distinguished Budget Presentation Award for the 2023-25 Financial Plan.
8. Received over $50,000 in FEMA reimbursement payments for the City’s COVID expenses and expects more in the future.
9. Developed a stand-alone “CalPERS and Unfunded Liabilities” policy to help guide the City’s longterm commitment to payment of unfunded liabilities.
10. Incorporated a DEI questionnaire into the annual business license renewal process to gather information to help further initiatives under the City’s DEI Major City Goal.
11. Coordinated Citywide efforts to track, document and report on storm expenditures to maximize reimbursement.
Finance Department
12. Made significant progress on securing approximately $47 million in Lease Revenue Bond financing to support construction of the Cultural Arts District Parking Structure (CADPS). This effort is expected to wrap up in early September 2023 so that the City can award a construction contract within 60 days of construction bid opening.
13. Supported the continued transition of the Infrastructure Financing Program to the Community Services Group and advised on the fiscal and budgetary components of administration of the Avila Ranch and San Luis Ranch Community Facilities Districts (CFDs).
Challenges
The Finance Department’s biggest challenges in FY 2022-23 were surrounding retirements, staff turnover and response to the fiscal ramifications of the major storms experienced over the winter. In addition to performing regular duties, the Purchasing Analyst has been coordinating Citywide efforts do document storm related work and expenditures and has been working with FEMA and CalOES to seek reimbursement for eligible storm related costs. All of this has been done despite a vacancy in the Purchasing Specialist position, but a recruitment to fill this position is currently underway.
After the only payroll position, the Payroll Specialist, became vacant in beginning of the fiscal year, the Department determined that the payroll function required an additional employee. To address the issue without impacting the Department’s budget, the vacant Finance Administrative Assistant position was reclassified to a Payroll Analyst and the FTE was moved to Payroll. This was vital for the payroll operations but ultimately left the administrative duties spread between others in the Department.
The Department also struggled with turnover in the Revenue division, which includes three critical positions that help with customer service. The department has had difficulty filling the Accountant Assistant positions in the past and the last two incumbents (who were in the roles for less than six months) gave feedback that positions were not as expected based on the job description. Additionally, internal process improvements made over the last five years have changed the scope of the positions. Given that the positions are currently vacant, the Finance Department took this opportunity to work with Human Resources and a third-party consultant to evaluate the job classifications. This evaluation is in progress, but a new Finance Cashier position has been created and a recruitment to fill that position with a permanent employee will begin in September 2023.
As of January 2023, the median tenure of Finance Department staff was 1.38 years. In the Spring of 2023, the Department began a formal organizational assessment to make sure the current Finance Department structure meets the City organization’s needs. It is expected that the organizational assessment will be complete toward the middle of FY 2023-24.
Finance Department
Table 14 - Finance Department Performance Measures
Objective Measure 2022-23
Target 2022-23 Actual
Enables & enhances
transparency, accountability
& integrity.
Strategic Goal: Fiscal Policies
# of calendar days following year-end until ACFR
is issued 170 170
# 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 annual debt per capita (General Fund) $43 $43 Twelve-month total rate of return/City portfolio 3% 1.9% Table 15 - Finance Department Budget Variance Analysis
Staffing – The department experienced turnover throughout the year, specifically in the Revenue Division.
The Department carried an average vacancy of approximately 2.5 FTE over the course of the fiscal year.
Savings due to these vacancies were partially offset by significant leave payouts for two employees that retired during the year. Without the vacancies, the Department would have been over-budget.
Contract Services – There were no significant variances in the Department’s contract services budget. The increase in budget for FY 2023-24 is due to a one-time line item for a City-wide fee study.
Other Operating Expenses – Consistent with trends across the organization, Finance had savings in its education and training budget mainly due to the Fiscal Health Contingency Plan activation in the second half of the year. There were also savings in printing, office supplies, and postage. Expenses in this category can vary year over year depending on what equipment needs to be purchased and how many new employes come on board.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing $ 2,001,911 $ 2,072,644 $ 1,965,155 $ 107,489 5% $ 1,884,921 Contract Services $ 354,677 $ 477,115 $ 470,882 $ 6,233 1% $ 510,720 Other Operating Expenditures $ 28,146 $ 56,617 $ 33,050 $ 23,567 42% $ 52,440 TOTAL $ 2,384,733 $ 2,606,375 $ 2,469,087 $ 137,288 5% $ 2,448,081 Finance
FY 2022-23
Finance Department
Non-Departmental, Support Services
The Non-Departmental and Support Services cost centers are managed by the Finance Department but are used for expenditures that are not specific to an individual department.
Table 16 - Non-Departmental/Support Services Budget Variance Analysis 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 can withstand these costs increases due to savings from vacancies throughout the year, which was the case in FY 2022-
23. Budgeting for these contingencies also helps the City achieve its 3% salary savings 14 assumption in a situation where departments do not have intermittent vacancies. Staffing contingencies also include budget for things like unemployment insurance costs, which fluctuate on an annual basis. During the pandemic, the annual cost was over $100,000 but in FY 2021-22, costs decreased to $17,000.
Other Operating Expenditures –This category 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. These savings were partially offset by increases in postage rates and material costs.
Bank/Merchant Fees - The negative balance in this category was caused by bank fees that were historically not budgeted; however, were offset by interest earnings. In FY 2022-23, the General Fund alone generated over $1 million in interest earnings.
14 The General Fund assumes an annual 3% salary savings in its fiscal forecast due to i ntermittent vacancies and hiring new employees at lower steps. This assumption is based on historical actuals for the last ten years.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing Contingencies $ 48,037 $ 904,334 $ 61,497 $ 842,837 93% $ 1,000,883 Other Operating Expenditures $ 365,424 $ 120,836 $ 115,455 $ 5,381 4% $ 331,700 Bank/Merchant Fees $ 240,261 $ 80,000 $ 222,242 $ (142,242) -178% $ 100,000 TOTAL $ 653,721 $ 1,105,171 $ 399,194 $ 705,977 64% $ 1,432,583 Category
FY 2022-23
Human Resources
Human Resources Department
A Year In Review
This was a year of significant transition, with more than half of the Human Resources Department (HR) either newly hired or promoted. The team continued supporting the growing and changing organization while also striving to establish stability within the department.
Approximately 178 total recruitments were coordinated by HR in the last year. Of those, 45% were promotions and there were a total of 120 employees hired into regular positions. Additionally, the HR team coordinated four department head assessment centers, each being an extensive process that ended successfully. Changes were made to enhance the recruitment process, including steps to utilize the applicant tracking system more fully. Further work is in progress, but the improvements to date have yielded positive results, saving time and increasing bandwidth for the recruitment team.
Associated with the high volume of recruitments and number of employees new to the organization, is a need for added training and development support. An employee engagement survey was completed in January 2023 to gain insight into how the City can best support employees and foster a positive and engaged workforce. The results of the survey emphasized a need for workforce transition and development initiatives, including enhanced onboarding experiences, learning opportunities and a strategic focus on knowledge management and transfer. With the median tenure across all employees being just over five years, further emphasizing this need, the HR team prioritized a comprehensive training plan with an emphasis on getting back to basics. In the past year, 27 training and development opportunities were offered to employees, and tailored resources were provided to new supervisors to ensure they have the tools to be effective in their roles.
Work efforts also included enhancements to the City’s Human Capital Management System (Oracle) to improve functionality for end users, such as manager self-service for terminations and step by step instructions for employees using Oracle Guided Learning. These efforts are aimed at automating processes, reducing manual work effort and adding additional controls to ensure accuracy. Further, the HR team began the process of transitioning to electronic personnel files that will be stored within Oracle for a one stop shop related to personnel records. All of these advanced objectives for the major city goal of Economic Resiliency, Cultural Vitality and Fiscal Sustainability.
This was also a busy year for labor relations. After going through factfinding, an agreement was reached with the City’s largest bargaining unit, the San Luis Obispo City Employees’ Association. Additionally, timely agreement was reached with the police management bargaining unit. HR continues to have strong positive relationships with all public safety bargaining units and strives to enhance and streamline its labor relations processes overall.
Accomplishments and Strategic Goal Updates
The Department met its goals set in the 2021-23 Financial Plan by:
1. Continuing to provide high-quality integrated human resources.
2. Providing tools and opportunities to employees to reach their full potential through leadership training and opportunities for internal promotions.
Human Resources
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 include:
1. Continuing high volume of recruitments, onboarding, and training needs. Part time contract staff were hired using salary savings to assist with this workload.
2. Higher than average expenses associated with liability claims. Since the undesignated insurance fund balance was sufficient to pay for these expenses, allocations were made from the fund to cover the unbudgeted expenses.
3. Unusually challenging contract negotiations with one employee group as well as disciplinary issues that resulted in a need for unbudgeted legal assistance.
4. The majority of the HR team being new to their role, and the resignation of HR Manager during an exceptionally busy year.
Table 17 - Human Resources Performance Measures
Objective Measure 2022-23
Target
2022-23
Actual
Integrated HR Services
Average days between injury and Workers’ Compensation claim filed. 3 2
Achieved lower severity of Workers’ Compensation claims than the risk pool Yes Yes
Annual liability claims payment under the Self-Insured Retention amount. Yes No
Employee
Development &
Growth
Percentage of On-Time Employee Performance Evaluations 95% 92% Percentage of Internal Promotions 40% 41%
Training Sessions Coordinated 35 32
Engaged and Aware
Culture
Number of Policies Communicated 5 8
Informational Sessions Coordinated 90 94
Table 18- Human Resources Budget Variance Analysis
Staffing – The Staffing 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.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing $ 1,400,484 $ 1,468,859 $ 1,404,813 $ 64,047 4% $ 1,451,978 Contract Services $ 459,330 $ 737,006 $ 657,653 $ 79,353 11% $ 628,207 Other Operating Expenditures $ 42,093 $ 54,300 $ 81,028 $ (26,728) -49% $ 61,000 TOTAL $ 1,901,906 $ 2,260,165 $ 2,143,493 $ 116,672 5% $ 2,141,185 Human Resources
FY 2022-23
Human Resources
Contract Services – A large portion of the Department’s budget consists of contract services for a variety of purposes. The only significant variance was due to legal support funding that was not utilized due to a hearing being postponed into the next fiscal year.
Other Operating Expenses – Several expenses were inadvertently charged to the incorrect accounts, resulting in an overage in certain accounts and other accounts being underspent. Overall, the cost center had savings, and training has been provided to ensure expenses are documented correctly in the future.
Insurance Fund – Managed by Human Resources
Insurance Fund (Managed by Human Resources)
The City is a member of the California Joint Powers Insurance Authority (CJPIA) which provides coverage for general liability and workers’ compensation through pooling of losses among its members and coordinates oversight and management of claims administration. In 2016, the City joined the excess program for liability, taking on a $500,000 self-insured retention level, and 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, the City is in the primary program, meaning that CJPIA covers the costs from the first dollar. The third-party administrator for workers’ compensation is Athens Administrators. The consolidation of all insurance-related expenses into one Insurance Fund has made it easier to oversee and manage them. The City strives to maintain a reserve sufficient to guard against substantial claims, which is determined based on annual actuarial report information. In addition to the CJPIA member contributions for liability and workers’ compensation, the Fund also covers premiums for ancillary insurances such as property, crime, pollution, volunteers, and special events.
Table 19- Insurance Fund Budget Variance Analysis
Table 20 - Insurance Fund Balance
FY 2022-23 Ending Fund Balance
a. Beginning Fund Balance $1,845,935
b. Transfers In $4,450,000
c. Expenditures ($5,710,479)
d. FY 2022-23 Year End Balance (a+b+c) $585,456
e. FY 2023-24 Transfer In $6,000,000
f. FY 2023-24 Projected Year End Balance $1,029,983
Allocations were made from undesignated fund balance to cover estimated costs for liability claims during an unusually expensive year. It is difficult to predict the exact timing of claim settlement or closure as there are variables outside the City’s control. Therefore, the remaining balance will return to fund balance and be utilized to pay claims costs in future years.
Reserves/Fund Balance: To meet the City’s definition of a 75% confidence level per policy (150% of the average 5-year claims cost), the City should have a reserve of $750,758 in the insurance fund. To meet actuarial recommendations for a 75% confidence level (meaning, the specified funding level will be sufficient to cover claim costs 75% of the time), the City needs to achieve a reserve of $3,500,000. General fund transfers in are being ramped up over the next five years to increase the available reserve.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Worker's Comp Insurance $ 2,181,044 $ 2,844,913 $ 2,844,913 $ - 0% $ 2,516,607 Liability Insurance $ 1,627,589 $ 2,527,911 $ 2,347,755 $ 180,156 7% $ 2,431,373 Other Insurance $ 442,439 $ 522,747 $ 517,810 $ 4,937 1% $ 607,493 TOTAL $ 4,251,072 $ 5,895,571 $ 5,710,479 $ 185,093 3% $ 5,555,473 Insurance Fund Expenditures
FY 2022-23
Fire Department
Fire Department
A Year in Review
In FY 2022-23 Fire Department staff made significant progress on work efforts impacting every program within the Department budget. In FY 2022-23, the department welcomed both a new Chief and Deputy Chief. Administrative staff provided Department leadership, public information, personnel management, fiscal and contract management, strategic coordination, and grant management. Emergency Response personnel focused on providing premier service to the community through all-risk response and training.
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. The Department continued its rollout of the self-inspection program which allows low-risk occupancies to conduct inspections through a self-service option. The new Emergency Manager position added in late FY 2021-22 was instrumental in managing and coordinating response to the winter storms.
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 Mobile Crisis Unit, which successfully became operational in late FY 2021-22 provided 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. Maintaining staffing levelsremained a focus for the Fire Department in FY 2022-23. The Department filled 10.5 FTE positions (nearly 17% of the department's workforce) and conducted promotional exams for newly promoted engineers and conducted an academy for seven new firefighters.
Accomplishments and Strategic Goal Updates
1. Diversity, Equity, and Inclusion: The department filled eight positions and made six promotional placements including new a new Chief and Deputy Chief, Battalion Chief, three Captains and one Fire Engineer as well as seven new firefighters, including two lateral hire paramedics. This also included the Department’s first female firefighter in several decades, a significant milestone for gender diversity and inclusion within the Department. The Fire Intern program continues to be successful at increasing inclusivity by offering individuals from a variety of backgrounds the opportunity to learn more about the fire service. Human Resources was a critical partner in the success of these hirings. Public Works staff continue to work towards completing a plan 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 toward the end of FY 2023-24.
2. Housing and Homelessness - The Mobile Crisis Unit competed one year of operation in June of 2023. This Unit is staffed by a Firefighter/EMT and a contracted Case Worker to respond to behavioral health and substance abuse crises to help connect community members with existing services and reduce the calls for service that historically have been handled by Fire Paramedic and Law Enforcement response, which typically are ill-equipped to provide care for these types of incidents. The MCU made 3,081 total contacts since July of 2022 and coordinated 28 reunifications for individuals to out of the area family. Each contact by the MCU keeps traditional emergency response available for other calls.
Fire Department
3. Other Department Objectives- T Fire Department Staff continued to work through carrying out strategic directions found in the Department’s strategic plan. Some major work efforts included securing an Assistance to Firefighter Grant (AFG) to send two firefighters to local paramedic school totaling $97,856. This grant will cover their education costs as well as the cost of backfill needed while they are off work for class. Increasing the number of paramedics on staff enhances emergency response capabilities and increases comprehensive emergency care. The Department also accelerated the replacement of Engine 4 after repairs became too costly and the wildland engine was replaced on schedule this year when it reached its end of life. Other major work efforts included updating the fire coverage agreement with Cal Poly, open space fuel reduction hazard mitigation efforts, Department policy streamlining and improvements, and expanded suppression training programs.
Challenges
The most significant challenge during FY 2022-23 was related to staff turnover. As previously discussed, the Department conducted recruitmentsto fill eight positionsand filled an additional sixpositions through promotion of existing staff. The staff time required to facilitate these recruitments, placements, and subsequent training and onboarding impacted Department productivity. Administration saw a large turnover with the retirement of both the Chief and Deputy Chief within months of each other, plus the movement of the Senior Analyst to Emergency Manager leaving the Analyst position vacant. The Fire Marshall plans to retire in early Winter of 2023, in anticipation of the retirement an evaluation of the fire prevention division is being conducted to determine the optimal structure moving forward.
Fiscally, overtime and general cost inflation were the Department’s largest challenges. Multiple vacancies drove the overtime up early in the fiscal year. Newly hired firefighters didn’t begin their duty until Spring of 2023 at which point the Department was able to reduce the need for overtime backfill. The Winter storms created a need for heightened response which also led to an increase in overtime. Inflation also had a substantial impact on the cost of essential items ranging from parts for apparatus to Personal Protective Equipment (PPE). As the costs climb, the budget for maintenance and repairs faced growing strain. Additionally, the escalating prices of critical PPE such as helmets, turnout gear and respiratory equipment have made it increasingly challenging to balance the need for necessary safety equipment with fiscal responsibility. Challenges from inflation have been addressed in the upcoming 2023-24 budget cycle with increases in corresponding budget areas.
Fire Department
Table 21 - Fire Department Performance Measures
Table 22 - Fire Department Budget Variance Analysis
Staffing – The largest driver for the negative variance in staffing was vacancy-related overtime/backfill costs in the Emergency Response program. While a lot of this was offset by the savings due to the vacant positions, the cost of overtime is higher than the cost of normal staffing so it does not always offset the
15 While the Fire Department did not meet the response time performance targets in FY 2022-23, the target remains unchanged in FY 2023-24 due to National Fire Protection Association recommended standards. The fire department successfully worked to implement process improvements based on data analysis and turnout times were improved by 40 seconds year over year. 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, some locations which generate a large proportion of calls further increase travel time stats. 2 Fire Prevention staff encountered challenges early in the year resulting from illness impacting productivity. The department’s performance has increased and as of August 24, 2023, staff is completing 81% of development review activities within published cycle times.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing $16,114,559 $14,402,591 $14,417,808 $ (15,217) 0% $14,143,415 Contract Services $ 344,372 $ 451,360 $ 354,131 $ 97,229 22% $ 400,579 Other Operating Expenditures $ 531,304 $ 616,272 $ 527,399 $ 88,873 14% $ 582,556 Utilities $ 95,985 $ 123,874 $ 119,857 $ 4,017 3% $ 142,229 TOTAL $17,086,220 $15,594,097 $15,419,195 $ 174,902 1% $15,268,779 Fire
FY 2022-23
Objective Metric 2022-23
Target
2022-23
Actual
Deliver Timely Effective
Response to ensure rapid
care and hazard
mitigation. 15
Strategic Goal: Other
Department Objectives
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 8:48
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 1:35 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 2:21 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 5:54
Provide timely service to
the development
community.2
Strategic
Goal: Housing
% of Fire Department Development Review activities
completed within published cycle times. 80% 64%
Fire Department
budget. Several staff remained out on long term injury absence and there were two medical related retirements resulting in more vacancies requiring shift coverage with overtime. Staff response to the winter storms also generated unbudgeted overtime. Staff does not expect this level of variance in FY 2022-23 as the staffing levels improved and the department is currently at full staffing.
Contract Services – The majority of the savings in contract services were resulting from a several month vacancy of the case manager of the Mobile Crisis Unit. Staff budgeted for a full year of services, however, due to an unexpected resignation, the position remained vacant resulting in savings. Facilities Maintenance was able to postpone replacement parts for Automatic External Defibrillators (AEDs) due to the devices reaching replacement age. New devices were purchased using the Equipment Replacement Fund eliminating the need for replacement parts and creating a savings. The budget for FY 2023-24 was reduced based on the purchases made in FY 2022-23. Several other cost centers had smaller unexpected savings that when combined contributed to a more substantial overall cost reduction for the Department.
Other Operating Expenses – The majority of the savings observed in Operating Expenses came from Training Services, Fire Station Facilities and the Mobile Crisis Unit. The need to backfill vacancies prevented staff from attending as much training as budgeted leaving a savings in Training Services. The Mobile Crisis Unit generated the largest savings in operating expenditures, due to a several month staff vacancy that prevented full operation of the MCU and generated savings as a result. The MCU is a new program and staff is slowly learning the most effective ways to use funds resulting in account savings.
Facilities Services was able to delay maintenance and some purchases that created additional savings.
Utilities – Electricity cost savings was the primary driver for the positive variance related to utility costs.
The 16% savings for electricity is due to recent fire station lighting upgrades to more efficient lighting systems, paired with lower energy rates achieved through the Central Coast Community Energy (CCCE) program. The Department experienced slight savings in water and sewer services. Natural Gas prices surged during winter pushing costs over budget, but prices seem to have since stabilized. Staff will continue to use actual costs to inform any needed budgetary adjustments for the upcoming fiscal year.
Fire Department Revenue
Table 23 - 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. Medical ER recovery is based FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
Cal Poly Fire Services $ 273,567 $ 361,684 $ 362,109 $ 425 0% $ 361,684 CUPA Inspection Fees $ 187,019 $ 174,265 $ 211,373 $ 37,108 21% $ 172,800 Fire Alarm Permits $ 10,994 $ 10,010 $ 4,743 $ (5,267) -53% $ 10,010 Fire Department Permits $ 98,529 $ 108,000 $ 99,591 $ (8,409) -8% $ 108,000 Fire Plan Check & Inspection $ 379,865 $ 366,000 $ 363,875 $ (2,125) -1% $ 350,000 Medical ER Recovery $ 201,991 $ 216,938 $ 209,566 $ (7,372) -3% $ 218,452 Other Fire Department Revenue $ 21,195 $ 7,790 $ (430) $ (8,220) -106% $ 5,890 R1 Inspection Fees $ 329,197 $ 357,525 $ 354,708 $ (2,817) -1% $ 351,000 TOTAL $ 1,502,356 $ 1,602,212 $ 1,605,535 $ 3,323 0% $ 1,577,836 Fire Department Revenue
FY 2022-23
Fire Department
on a contract negotiated by the County. It was budgeted with a 7% increase before the contract was finalized, but the actual was 5% creating a slight shortfall in actual revenue. Other Fire Department Revenue had an item from the previous fiscal year go to collections resulting in a negative budget line.
Other account variances are reliant on external factors and can be unpredictable. Overall, the variance for Fire Department revenue was nominal.
Police Department
Police Department
A Year In Review
Over the last year, the Department focused on maintaining service levels and response times with reduced staffing levels, hiring and recruitment challenges, unanticipated storm response needs, developing a 5- year strategic plan, and purchasing a new building for Police and City use.
In response to the winter storms, officers worked over 150 hours of overtime to provide assistance with evacuations, rescues and road closures, and ensure overall safety of the community. Police staff also provided drone support for intelligence gathering for the Emergency Operations Center (EOC) and field staff. Responding to these storms only aggravated a pre-existing staffing shortage since there were vacancies in Patrol. Although officers were burnt out from working increased overtime, they continued to protect and serve the community.
In the fall of 2022 the Department released a Request for Proposals seeking a consultant to lead the development of a five-year Department strategic plan. Jacob Greene and Associates was chosen as the consultant and over the past few months their team has met with various internal and external stakeholders, distributed surveys, met with internal personnel, analyzed data, and prepped for a staff retreat. Once complete, the strategic plan will be a comprehensive road map for the Department over the next five years.
In November 2022, City staff entered into a purchase agreement to buy real estate located at 1106 Walnut Street. The interest in purchasing the building was multi-faceted as the City could utilize the building as temporary over flow office space when needed, the site could be used as a meeting location for any City staff, or the ground level could be used as an emergency operations center during disasters. The idea of moving some Police personnel to the new building is to alleviate some of the pressure points related to office space until a new public safety building has been approved. The Department will continue to collaborate with other City staff to ensure the move is well-organized and efficient.
Accomplishments and Strategic Goal Updates
Economic Recovery and Housing:
1. Despite ongoing staffing challenges in Patrol, the police department continued to provide a public safety presence in the downtown during day and night hours.
2. The department continued to work with Transitions Mental Health Association (TMHA) to hire a Mental Health Clinician (or Case Worker) for the Community Action Team (CAT). Unfortunately, there have been continued challenges with hiring this position, but Police Department staff remains committed to supporting TMHA with hiring efforts.
3. 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. As the department continues to fill vacant officer positions, and new hires are finally able to work independently, the second CAT officer will be able to join the CAT Team.
Climate Action:
Police Department
1. The Department worked to address traffic safety issues by conducting numerous operations under the FY 2022-23 Office of Traffic Safety Grant. These included DUI checkpoints, traffic enforcement operations, distracted driving operations and pedestrian/bicycle enforcement.
2. Staff continues to use social media to encourage and educate the community on safe driving behavior.
Department Specific Accomplishments:
1. The Department fully implemented the use of SPIDR software. This software is a community engagement tool used to collect relevant feedback from those using police services. At this time, the Department’s average satisfactory rate is 4.5 out of 5 and the police officer satisfaction rates are 4.8 out of 5. The Department will continue to use this tool to identify areas of improvement that may be needed when providing police services to our community.
2. The Emergency Communications Center underwent a re-organization. The Communications Manager position was temporarily replaced with a lieutenant; this pilot program was successful in improving morale, raising accountability and providing a more direct link between management and line-level staff. The Department was able to convert the lieutenant to a permanent position in the Communications Center.
3. The purchase of 1106 Walnut Street was an accomplishment this past year, as it will provide much needed office space for the Department’s administrative staff.
4. Luca Benedetti Memorial Highway dedication
5. The Department held a very successful Gun Buyback Event in October 2022. The purpose of this event wasto provide a resource for the community to turn in firearms that they no longer wanted. Turning in guns helps reduce the risk of gun violence, gun theft, accidental discharges, and suicide in the community. The Department provided grocery gift cards in exchange for the guns; in total around 256 guns were collected.
Challenges
In FY 2022-23, there were23 positions that became vacant, equivalent to 25% of the department’s total staffing. The vacant positions included: eight dispatchers, ten police officers and five civilian staff. The vacancies were related to retirements, relocating to other areas, medical retirements, or returning to previous agencies. The department was able to fill a total of 19 positions during the fiscal year.
In the Dispatch Center, the eight vacancies were due to retirement, employees returning to their previous agency or resigning from the profession. There were 10 police officer vacancies which were attributed to retirements, medical retirements, or transferring to another agency for personal reasons. A number of these vacancies have since been filled, but it’s been extremely difficult to recruit qualified applicants.
Agencies across the nation are facing similar challenges with staffing; the City’s new hiring incentive programs are helping but it has continued to be a struggle to fill positions.
Police Department
Table 24 - Police Department Performance Measures
Objective Measure 2022-23
Target
2022-23
Actual
Reduce Crime
Strategic Goal: Economic
Recovery, Department
Mission
# of total Part I Crime by year.16 2,050 2,011
Provide safe roadways
for pedestrians, vehicles,
and bicyclists.
Strategic Goal: Patrol
Objectives, Department
Mission
# of total traffic collisions 17
Vehicle: 450 435
Pedestrian: 25 36
Bicycle: 35 35
# of targeted enforcement operations
conducted under the Office of Traffic
Safety Grant per year18
DUI Checkpoints: 2 2
Saturation Patrols: 24 28
Traffic Enforcement Ops: 12 13
Distracted Driving
Enforcement: 10 5
Bicycle & Pedestrian
Enforcement: 6 9
Reduce Homeless related
Calls for Service through
proactive engagement.
Strategic Goal: Economic
Recovery, Department
Mission, Patrol Objective
# calls related to homelessness 19 7,000 6,699
# of unique individuals contacted by CAT 600 437
# of Family & Agency Reunification 35 6
# of Local Permanent Housing 31 11
# of major camp cleanups 20 12
Data
provided
by Public
Works: 134
camps
# of Mental Health/Substance Abuse Treatment Referrals 130 215 Table 25 - Police Department Budget Analysis
Staffing – The Department ended the fiscal year with a savings of $455,169 in total staffing. The savings was attributed to numerous positions that were vacant for a portion of the fiscal year; these vacancies
16 Part 1 Crimes include: homicide, forcible rape, robbery, aggravated assault, burglary, and motor vehicle theft. Figures show n represent calendar yearfor 2022.
17 Data for Traffic Collisions represent calendar year 2022. 18 Numbers are from Grant Objectives and may vary from target and actuals based on final grant agreement. 19 Calls related to homelessness represent calendar year 2022. 20 Camp Clean Ups are coordinated and managed by Public Works and Parks & Recreation staff.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing $21,261,551 $20,432,276 $19,977,107 $ 455,169 2% $20,677,715 Contract Services $ 740,502 $ 1,095,787 $ 885,954 $ 209,833 19% $ 882,692 Other Operating Expenditures $ 431,546 $ 459,769 $ 510,183 $ (50,414) -11% $ 377,240 Utilities $ 130,184 $ 145,650 $ 131,697 $ 13,953 10% $ 148,406 TOTAL $22,563,783 $22,133,482 $21,504,941 $ 628,541 3% $22,086,053 Police
FY 2022-23
Police Department
included eight dispatch positions, nine sworn positions, and six other staff positions. In total, 23 positions became vacant at some point during the year; these vacancies were attributed to career retirements, medical-related retirements, returning to previous agencies, and moving out of the area. Hiring to fill behind these positions was difficult due to low interest levels in law enforcement careers, which seems to be a common challenge throughout the nation. The Department was able to hire three cadets early to mid-way through the fiscal year; however, the training and onboarding is prolonged due to the academy and field training after academy graduation. Another two cadets were hired in late June and are still in the academy. Additionally, the Department was able to hire three dispatchers which are all still in training and cannot work shifts independently.
As shown in the charts below, total overtime expended for the year was $1.5 million, which was about 15% more from last fiscal year. Overtime related to Shift Coverage increased due to vacancies in both Patrol and Dispatch, as staff filled these scheduling gaps with overtime. The Patrol and Dispatch schedules are completed in advance and anytime an employee is out unexpectantly (sick leave, WC leave, quits, etc.) the schedule must be adjusted to cover the shift which results in overtime.
Table 26 - Overtime Analysis
A. Total Overtime Hours by FY
FY 20-21 FY 21-22 FY 22-23 % Increase from last FY
14,907 15,792 19,115 21%
B. Total Overtime Expenditures by FY
FY 20-21 FY 21-22 FY 22-23 % Increase from last FY
$1.1M $1.3M $1.5M 15%
Contract Services – The Administration and Investigations programs realized the majority of the savings in Contract Services. The Department budgeted for a second mental health case worker and THMA has been unsuccessful in filling the position. Additionally, the Department entered into a contract with a social worker in April 2023, but in May the employee the position which resulted in savings from contract. With the 2019-21 Financial Plan, there was a Significant Operating Budget Change approved to cover anticipated police department costs related to Cannabis. Because the specific costs had not been identified, the funding was put into “Other Contract Services”. This has remained partly unexpended for the last several years because all the investigative work related to cannabis has been done in house (through regular staffing budget). With the 2023-25 Financial Plan, staff moved this budget into staffing to more accurately reflect where the expenditures were hitting.
Other Operating Expenses –The Department ended the year over expended in Other Operating Expenses due to higher than anticipated material and supply costs. In Patrol, the Department over expended Safety Materials and Supplies by about $15,000. This was attributed to adding three new SWAT operators and purchasing the related equipment (SWAT vests and uniforms which average about $3,500 per operator).
The Department also purchased duty vests for the Chaplain and two Community Services Officers, which were not budgeted for. Due to savings in other non-staffing accounts, the Department was able to
Police Department
purchase much needed items such as a ballistic shield for the detective unit, replace broken technology at the dispatch center and laptops for sergeants (replacing desk top computers).
Utilities –The Department had savings in Utilities mainly attributed to an overestimation for PG&E electric costs. However, this was partially offset by Natural Gas being more expensive than anticipated. The budget for FY 2023-24 has been adjusted to reflect actuals with projected increases included.
Police Department Revenue
Table 27 - Police Department Revenue
Overall Department revenue ended the year 17% higher more than budgeted. Staff made conservative adjustments at mid-year based on total revenue received from July to November and some revenue accounts were lower than expected. Alarm revenue increased from FY 2021-22 which is likely due to businesses coming back from the impacts of COVID and affording to pay for permits and false alarms. In addition, in July 2022 the Department started contracting with a new vendor for alarm tracking services and outreach for billing has been more consistent which contributes to increased revenue. Police Issued Parking fines were lower than anticipated which was partly related to SNAP being unable to enforce neighborhood districts in September (which is typically a busy timeframe) due to a parking system delay in issuing permit renewals.
FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
1 Accident Reports $ 4,333 $ 3,400 $ 4,884 $ 1,484 44% $ 3,400 2 Administrative Citations - Safety $ 95,204 $ 152,833 $ 148,616 $ (4,217) -3% $ 125,833 3 Alarm Permits - Contract (Police) $ 80,204 $ 90,000 $ 180,790 $ 90,790 101% $ 90,000 4 Collision Investigation $ 1,139 $ 3,000 $ 972 $ (2,028) -68% $ 3,000 5 DUI Cost Recovery $ 25,622 $ 20,000 $ 28,138 $ 8,138 41% $ 20,417 6 Miscellaneous Revenue $ 6,417 $ - $ 10,031 $ 10,031 $ - 7 Other Police Revenue $ 212,914 $ 254,109 $ 262,032 $ 7,923 3% $ 250,000 8 Police Department Permits $ 5,027 $ 5,100 $ 3,826 $ (1,274) -25% $ 4,011 9 Police Issued Parking Fines $ 80,969 $ 70,000 $ 53,115 $ (16,885) -24% $ 70,000 10 Property Release Fees $ - $ - $ 1,181 $ 1,181 $ -
11 Second Response Fees $ 1,437 $ 1,200 $ 482 $ (718) -60% $ 1,200 12 Tobacco Permits $ 28,421 $ 29,000 $ 32,339 $ 3,339 12% $ 30,450 13 Tow Release Fees $ 15,824 $ 12,000 $ 21,974 $ 9,974 83% $ 12,000 14 Witness Fees $ 4,400 $ 1,606 $ 4,965 $ 3,359 209% $ 1,606 15 TOTAL $ 561,909 $ 642,248 $ 753,345 $ 111,097 17% $ 611,917 Police Revenue FY 2022-23
Community Services Group Administration
Community Services Group (CSG)
Community Development • Parks & Recreation • 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, policy research, and City staffing transitions, including multiple key leadership positions and preparation and knowledge transfer. The CSG Administration (CSG Admin) team consists of the Assistant City Manager, the Business Services and Administrative Manager, and a part-time Administrative Assistant. The CSG Admin team oversees the Analysts in the CSG Departments as well as the Infrastructure Investment Program. The Infrastructure Investment Program and Analyst were moved from the Finance Department to CSG in FY 2022-23 as the position collaborates closely with all the departments within CSG related to development agreements and impact fee funds that affect the group.
In FY 2022-23, the CSG onboarded and hired three new department analysts, as a result of internal promotions of the previous incumbents. It also hired an Infrastructure Investment Financial Analyst and completed the reclassification of the “Administrative Analyst” positions to “Business Analysts” to better represent the job duties. As the CSG Analyst Team has begun to re-form, so have opportunities for efficiency, communication, and collaboration among the four departments. The Analyst Team has been working primarily on budgetary support as Fiscal Officers for their respective departments, but also regularly partner work on CSG efficiencies and needs across departments. This has included: the creation and presentation of a Budget 101 guide for CSG managers and supervisors to understand the basics of how the city budgets, and a guide to reference and track their budgets; a strong focus on orientation and onboarding materials and structure; policy work, such as the continued Abandoned Shopping Cart Ordinance compliance and partnerships with local businesses; and analysis of processes and procedures for tracking specialized budgets including the four Enterprise Funds, Impact Fees, and Development Services Designation.
CSG Admin also implemented a centralized resident engagement platform, now known as Ask SLO, to organize and streamline public requests and inquiries to reduce the prior 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. This tool has been used most often by the CSG departments and helps with efficiency and effectiveness in public communication and engagement with issues and was instrumental in support with storm response. The team will focus on improvements and new ways of utilizing the tool in the 2023-25 Financial Plan.
Additionally, CSG Admin began efforts to complete the Citywide User and Impact Fee Study that is completed on a five-year basis. The last Citywide user fee and rate study was completed in 2017. During FY 2022-23, the Business Services and Administrative Manager and an interdepartmental team completed an extensive RFP process to select a consultant and began the kick-off of the study efforts. The study is anticipated to be completed in FY 2023-24.
Community Services Group Administration
CSG Admin also managed and guided the capital improvement planning processfor the 2023-25 Financial Plan, after significant efforts have focused on right sizing staff, changing some positions to better reflect the services needed, and creating new processes so that collaboration can occur cross departmentally.
With all of the accomplishments of the CSG in FY 2022-23, 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.
Table 28- CSG Administration Budget Variance Analysis
Staffing – This category had only minor variances on the individual line items and ended the year with about 2% savings. The FY 2023-24 budget was increased to account for the transfer of the Infrastructure Investment Financial Analyst budget from Finance to CSG. This position was costed out of CSG for only part of FY 2022-23.
Contract Services – Contract Services expenditures were under budget by approximately $70,000 due to the Community Workforce Agreement project needing less legal support than anticipated and project delays (originally budgeted for $105,000 as a part of the 2021-23 Financial Plan’s Economic Recovery and Resiliency Major City Goal). This budget also helped fund the Centralized Resident Engagement Platform, Ask SLO and the Shopping Cart Containment Program. 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, in which all grants were given.
Other Operating Expenditures – Expensesfor the category were not significantly under budget, but the remaining funds are mainly a result of having fewer expenses in staff parking and Education & Training than budgeted.
FY 2021-22 FY 2023-24
Actual Budget Actual
Funds
Available % Budget
Staffing $ 614,821 $ 599,179 $ 588,627 $ 10,552 2% $ 687,514 Contract Services $ 32,735 $ 191,053 $ 117,751 $ 73,302 38% $ 40,000 Other Operating Expenses $ 7,332 $ 13,021 $ 10,829 $ 2,191 17% $ 13,020 TOTAL $ 654,889 $ 803,252 $ 717,207 $ 86,045 11% $ 740,534 CSG Administration
FY 2022-23
Community Services Group - Community Development Department Community Development Department
A Year-In-Review
During the second year of the 2021-23 Financial Plan, the Community Development Department (CDD) made substantial progress in implementing its work programs and hiring and training staff under a new organizational structure to support the community's economic success. Housing production continues progressing and the department continues to facilitate large development projects. While the economy has experienced turbulence and inflation, housing production and other permit activity remain strong.
After reassessing last year's deficit, this year, CDD’s total revenue anticipated was within 5% of projections, equating to approximately $229,000 less than expected. As a result, the Department revenue projections in FY 2023-24 are slightly less than was projected for FY 2022-23. The Department operated under budget by 10%, equaling $920,885 of savings.
The CDD Administration team continues to provide process management and support for all the divisions within the Community Development Department. The division also supports the department’s advisory bodies and Major City Goal work programs. In addition to customer service support via phone, an online building inspection platform was launched to increase customer satisfaction and expedite the inspection process. The platform is integrated into the Department’s Citizen Self-Service Portal and allows customers to schedule inspections at any time while not being limited to the department’s hours of operation. The division experienced recruitment challenges for the Supervising Administrative Assistant position since last fiscal year. However, the position was filled and helps oversee the staff and projects within the Administration division,such as digitizing a backlog of permitting documents for easier access to the City’s customers in the future.
The Planning Division continues to receive high work volumes associated with planning entitlement and building permit application reviews as well as the work related to homelessness. Significant Municipal Code updates have been completed including an update to the Inclusionary Housing Ordinance, Objective Design Standards for ministerial review of qualified projects, the Downtown Flexible Density Program providing incentives for units under 600 square feet in size, and updates to the Cannabis and Subdivision Regulations. Staff also implemented several state legislative programs that support “missing middle” housing, including updates to the Accessory Dwelling Unit regulations, H.O.M.E Act (SB9), and the Affordable Housing and High Road Jobs Act (AB 2011). Importantly, staff continued the processing of affordable housing projects, which has led to a total of 148 new affordable units that were either entitled or constructed in FY 2022-23. A majority of these efforts support the Housing and Homelessness Major City Goal and additional accomplishments are outlined in the Accomplishments section below.
The Engineering Division has played a major role in facilitating housing production in the City and supports the Housing and Homelessness Major City Goal by providing plan check and mapping services for projects such as the Orcutt Area subdivisions, Froom Ranch, and Avila Ranch. The Division has experienced significant staff turnover, with the retirement of the Supervising Civil Engineer and vacancies of a Senior Civil Engineer and Engineering Technician. A new Supervising Civil Engineer was hired in late February and overlapped with the outgoing supervisor who retired at the end of March.
Community Services Group - Community Development Department The number of Building inspection requests have remained high, with over 6,600 inspections conducted throughoutthe fiscal year. The team has become efficient in providing timely inspections due to effective use of technology upgrades. The building inspection team was fully staffed until one inspector was promoted into the Plans Examiner position in October 2022, and the team was supplemented by a consultant inspector stationed at and funded by the San Luis Ranch Development. The Building Inspector position remained vacant until the position was filled in June 2023. During this transition, the Building and Safety Division utilized the recently promoted Plans Examinerto assist with inspection requestson an as-needed basis. Additionally, the Building Inspection team had one Stormwater Code Enforcement Officer who conducted over 1,100 active construction project inspections throughout the fiscal year to help ensure the City’s ongoing compliance with the State’s stormwater regulations. Permit Counter staff successfully integrated SolarAPP+ plan reviews into the City’s regular business process. This review service allows residential solar project applicants to obtain instant, automated permits through the City’s online self-service portal. Community Development received a $40,000 grant from the State of California to implement this program and, since the start of the program on August 5, 2022, 268 automated solar permits have been issued.
Accomplishments and Strategic Goal Updates
The Community Development Department continues to complete a number of work plan items that directly support Major City Goals adopted by the City Council. The Department's strategic priorities for the 2021-23 Financial Plan are to help advance the City’s overall goals tied to the Major City Goals, Department Strategic Plans, and other priorities as they may arise.
Community Development Department Strategic Goals include:
1. Lead the implementation of the Housing and Homelessness Major City Goal
2. Support the implementation of the Climate Action and Economic Recovery Major City Goals
3. Provide excellent customer service to internal and external customers, and advisory body members, in the processing of permit applications
4. Ensure a safe community by implementing Building and Safety Division programs, including Code Enforcement
5. Monitor Growth, and support and update the General Plan policies and Zoning Regulation standards to ensure coordination with all City Departments that provide municipal services for the community.
Economic Recovery, Resiliency & Fiscal Sustainability :
By facilitating development projects and crafting and implementing certain policies, the Community Development Department directly impacts the economic resiliency of the community and has contributed to the economic recovery efforts that are ongoing. Further, through the implementation of Development Agreements and imposition of fees, the Department contributes to fiscal sustainability and ensures that development “pays its own way.” The following accomplishments are related to economic recovery, resiliency, and fiscal sustainability:
1. Update of the Cannabis retail storefront operations and business overlay zones
2. Continued Processing and Permitting of Avila Ranch, San Luis Ranch, and Orcutt Area Specific Plans
3. Intake and Plan Checking of Froom Ranch Improvement Plans
Community Services Group - Community Development Department
4. Department KPI’s for processing cycle times exceeded targets, ensuring that the Department continues to provide excellent customer service and does not impede development projects
5. Effective engagement with the Los Angeles –San Diego – San Luis Obispo rail corridor (LOSSAN) and CalTrans on their projects within city limits
6. Changes approved to the Zoning Regulations in support of housing production and economic development to allow certain projectsto move forward with a more timely and streamlined review of entitlements
7. Successful completion of the Tenant Improvement Permit Processing programdesigned to assist businesses and property owners with reopening in response to the COVID pandemic
8. Collaboration with Administration on the recently adopted Economic Strategic Plan
9. Transparency Reporting dashboard added to the city website to enhance public awareness and information related to processing times
10. Process improvements to the Department’s role in the stormwater program addressing deficiencies identified by the Regional Water Quality Control Board
Diversity, Equity, Inclusion (DEI):
A number of the housing and homelessness related policy improvements and plans that the Department is creating and implementing contribute to DEI efforts. By facilitating the development of a variety of housing types, including “missing middle” housing, mixed use units, deed restricted units, and transitional and supportive housing, the City is providing a variety of housing options for all members of the community, as well as providing additional housing capacity to welcome new community members. The following accomplishments are associated with this work:
1. The adoption of the Downtown Flexible Density Ordinance that expands housing opportunities downtown by providing incentives for the development of units under 600 square feet in size.
2. General Plan Housing Element policy implementation that ensures that both market-rate and affordable housing units are intermixed within a development and promote equal housing opportunities for persons of all economic segments as new housing projects are developed.
3. Ongoing regional planning policy/coordination efforts with agencies to ensure DEI is considered in regional planning decisions.
4. DEI internal departmental coordination considerations
5. Facilitation of the sale and rental of affordable housing units through the use of the City’s Below Market Rate Housing Administrator (Housekeys) to continue to ensure compliance with fair housing laws in the affordable housing program.
Housing and Homelessness:
Community Development is the lead on implementing the Housing and Homelessness Major City Goal, as the Department is home to the Housing Policy and Programs Manager and the Homelessness Response Manager. In addition, the work of all of the divisions within the Department is directly related to the facilitation of new housing or housing supporting infrastructure, the creation and implementation of policies and plans related to housing, and the ongoing maintenance of community standards related to safe housing. Some key accomplishments related to housing and homelessness are as follows:
Community Services Group - Community Development Department
1. Update of the Inclusionary Housing Ordinance that increases the amount of affordable housing units throughout the City through new development.
2. Issued building permits for 562 new housing units during the calendar year 2022.
3. Adoption of the City’s first Homelessness Strategic Plan that includes strategies for prevention and connection to shelter through a housing continuum.
4. Adoption of an update to the Subdivision Regulations that provides flexibility for lot design that will help increase homeownership opportunities.
5. Continued onboarding with the City’s Below Market Rate Housing Administrator (Housekeys) to update and streamline affordable housing standards, guidelines, and procurement processes and assisted in placing eligible applicants into rental and for sale units.
6. In the two-year financial plan cycle approved five new affordable housing projects that will provide for a total of 257 new affordable homes. Allocation of $5.5M in Affordable Housing Fund awards to support several important affordable housing projects.
7. Funded and permitted HASLO’s Anderson Hotel project that officially closed escrow and is under construction that provides 68 low and very-low-income housing units and ensures the historical preservation of this signature Downtown housing project.
8. Updated Homelessness Response team service agreement, Compassionate Assistance, Mitigation and Prevention (CAMP) Standards and operationalized the standards through a survey 1,2,3 App that is used in the field and allows for coordinated field team data tracking.
9. Reviewed and implemented legislation that has helped in addressing “Missing Middle” housing within single-family neighborhoods through legislative updates to Accessory Dwelling Units and Junior Accessory Dwelling Units State Laws, and implementation of the H.O.M.E Act (SB 9) and the Affordable Housing and High Road Jobs Act (AB 2011).
10. Developed, piloted, and reset the Railroad Safe Parking Program.
11. Supported County application for a $13M Encampment Resolution Grant for the Welcome Home Village at the Department of Social Services site.
12. Kicked-off effort to establish a rotating safe parking program with community partners.
13. The annual strategic housing performance measure for affordable housing unit production secured through entitlement or construction is set at 50, and CDD exceeded this target with an actual of 148 units.
Climate Action, Open Space, and Sustainable Transportation:
CDD supports implementing the Climate Action and Economic Recovery Major City goals. The Department facilitates the development of infill projects and has worked on policy changes to encourage the wise use of resources and land. Several key accomplishments are highlighted below:
1. Adoption of the Climate Adaptation and Safety Element that provides for increased safety and resiliency for SLO residents in the face of natural hazards and changing climate.
2. Implementation of the tree regulations and liaison work on the Tree Committee
3. Historic preservation monitoring and continued programing efforts by the City’s planners
4. Environmental project coordination, mitigation planning efforts, and monitoring
5. Update of the local Building Construction and Fire Prevention code to reference the 2022 California Building Standards
Community Services Group - Community Development Department
6. Implementation of an automated, instant permit issuance business process for SolarApp+ applications (residential solar projects).
Figure 2- Total number of Solar Permits issued in FY 2022-23.
Challenges
The most significant challenge experienced by CDD during FY 2022-23 was staffing. The department continues to monitor the increased scale of development that the City is experiencing and will continue to focus on the recruitment of new staff, staff retention, and onboarding re cently hired staff.
Unfortunately, in some cases, these positions remain unfilled after multiple recruitments because qualified individuals were not identified or did not accept offers. Although the department successfully filled multiple retirement vacancies in FY 2022-23, such as the Community Development Director position, the department is still experiencing an increase in vacancies which may necessitate the use of consultants if recruitments are not successful for key positions for Planning and CDD Engineering. Currently, the department has ten vacancies.
Community Services Group - Community Development Department Table 29- Challenges resulting from vacancies are summarized in the following table:
Vacancy Impact
Cannabis
Business
Coordinator
The Senior Planner was required to reprioritize work on the Subdivision Regulations Update in order to accommodate cannabis related work.
Building Permit
Technician
The permit technician position was vacant through March of FY23, and resulted in delays in responding to public inquiries, and delays in processing permit applications for review.
Building
Inspector II
The City is staffed with one fulltime Building Inspection Supervisor and three regular fulltime building inspectors. The vacancy on the team made it difficult to manage time off requests and required the supervisor to fill-in more than usual.
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. The vacancy also required the hiring of a consultant to work as the in-house plan's examiner during open counter hours.
Associate
Planner (3)
There were three vacant Associate Planner positions for most of the fiscal year. This required Senior Planners to perform more Development Review activities and has resulted in delays in the delivery of policy projects, such as Missing Middle Housing.
Code
Enforcement
Technician
There have been two vacant Code Enforcement technician positions since January of FY23. This has resulted in delayed responses to complaints from the public, fewer cases being closed, a nd lower revenues associated with code enforcement fines.
Senior
Administrative
Analyst
This position was vacant for most of FY23. The Community Service Group obtained analyst assistance from Parks and Recreation and Utilities; these duties were performed in addition to their own department work.
Senior Civil
Engineer (2)
The position’s duties include review of subdivision maps and improvement plans, preparation of Council Agenda Reports for approval of final maps and acceptance of subdivision improvements, coordinating review and processing of as-built record drawings, managing the Division’s responsibilities within the City’s Stormwater Management Program, and performing the duties of the Floodplain Administrator. Vacancies in these positions result in a decrease in the level of service, and potential use of consultants to complete the work.
Engineer 1
The position’s duties include reviewing encroachment and building permits, planning applications, and managing stormwater post-construction requirements during plan review and ongoing monitoring of O&M self-certifications. Vacancy of this position results in challenges related to timely review of applications and the provision of a high level of customer service.
Permit
Technician
The position’s duties include oversight of the front counter and main phone line representing Public Works and the Engineering Division of CDD. The position reviews and issues encroachment permits, transportation permits, parking meter bags, as well as initiating reviews of public improvement plans, subdivision maps, and building permit routings. The position coordinates meetings requested by applicants, and calculates and collects fees for plan reviews, inspections, and development impact fees. Vacancy of this position results in customer service challenges, and increased workload for others at the public counter.
Administrative
Specialist
(Homelessness)
This position was vacant for most of FY 23. The Homelessness Response Manager was required to reprioritize work in order to accommodate Administrative Specialist related work program tasks.
Homelessness
Response
Manager
This position was vacant for a portion of FY 23. The Housing Policy & Programs Manager was required to reprioritize work on housing initiatives in order to accommodate homelessness related work, including the development of the Homelessness Response Strategic Plan.
Community Services Group - Community Development Department While hiring has been difficult, the following positions were filled in FY 2022-23: the Plans Examiner, Building Inspector I, Building Permit Technician I, SeniorAdministrative Analyst, Homelessness Response Manager, one Associate Planner, Engineer I, and Permit Technician. Going into FY 2023-24, CDD has 40 approved regular positions and 31 positions were filled. The hiring environment is unstable, and CDD aims to fill key positions, such as two Senior Civil Engineers, the Assistant and Associate Planners, the Cannabis Business Coordinator, the Urban Forest Program Coordinator/City Arborist (a new position to CDD), and the Administrative Specialist. Community Development accounts for 8% of staffing citywide.
Filling these positions will resultin immediate improvements to customer service and project processing times.
Table 30 - Community Development Department Performance Measures Objective Measure 2022-23
Target
2022-23
Actual
Affordable housing production
Strategic Goal:
Housing
Number of affordable housing units secured
through entitlements or construction 50 148
Provide Excellent Customer Service
Strategic Goal:
Other Department Objectives
Customer survey response positivity rate 80% 83%
Ensure a Safe Community
Strategic Goal:
Housing
Percent of Code Enforcement cases
investigated on-time: First Tier - 24 Hours,
Second
Tier - 2 Days, and Third Tier - 3-5 Days
85% 86%
Development Review activities
Strategic Goal:
Other Department Objectives
The target goal of meeting cycle times 75% of
the time reflects an increase in more complex
and
resource-intensive development review
activities.
75% 77%
Building Inspections
Strategic Goal:
Economic Stability
Percent of inspections performed the next
working day
85% 99%
CDD’s performance measures are outlined in the table above. Despite the staffing challenges experienced over the last year, the Department has met or exceeded the target for all performance measures due in large part to dedicated and efficient staff, as well as technology and process improvements. In addition, staff continues to work on efficiencies that will improve actual outcomes into the coming year. Hiring and retaining staff into the next fiscal year will be crucial to continuing an upward trajectory on performance measures.
CDD is committed to increased customer satisfaction and finding ways to streamline processes, allow for online anytime building inspection scheduling, and increasing performance transparency. Increased transparency and performance tracking is provided through online reporting of Key Performance Indicators. The Department has created Dashboards that provide accurate expectations with the City’s customers for permit processing timelines, code enforcement responses, and customer service results including planning cycle times, average review times, and division statistics. In addition,the department provides customers with the opportunity to complete a customer satisfaction survey, which is tied to
Community Services Group - Community Development Department performance measures. Additional internal efficiencies have materialized due to the performance data collected, such as a commitment to data-driven decision-making, assessing workloads, setting realistic expectations, and incorporating performance-based reporting and analysis for current and future budget decisions.
With the recent technology upgrades, Building Inspection staff has been able to receive inspection requests through the online citizen self-serve portal. This new system has effectively managed inspection requests, and as a result, staff implemented a new Key Performance Indicator (KPI) for the 2023-25 Financial Plan. This new KPI includes the target goal for building development plan reviews to be completed by predetermined due dates for at least 75% of all building permit reviews. The due dates and cycle times vary depending on the type of project and the round of review. This new KPI measures a more complex and resource-intensive part of CDD’s development review activities.
Table 31 - CDD Budget Variance Analysis
Staffing – Recruitment continues to be an issue,and the department had numerous vacancies throughout the duration of the fiscal year (explained in depth in the “Challenges” section above). Every division experienced staff vacancies, with the most affected divisions being CDD Engineering and Planning.
Community Development experienced a 10% salary savings due to vacancies in FY 2022-23. CDD used the salary savings to hire on-call consultants or temporary/contract staff to perform the work wherever possible to minimize disruptions or delays to customers due to staffing shortages.
Contract Services – Most divisions in the department had savings in contract services. Building & Safety which was slightly over budget due to the transparency efforts that required additional information technology consultants. The Engineering division was also slightly over budget because it had to hire oncall engineering consultants to manage workload. It is also important to note that consultants were more expensive than in previous years due to inflation and the high demand for these services. Over-budget divisions were offset by savings due to completing key Housing Element Programs (Flexible Density Ordinance, Subdivision Regulations Update) and the Homelessness Strategic Plan in-house.
While most of last year’s Housing & Homelessness Major City Goal work program items have been accomplished in FY 2022-23, the Missing Middle Housing program has been phased. Staff has focused on recent state legislation that impact the Missing Middle Program, including the H.O.M.E Act (SB9) and the Affordable Housing and High Road Act (AB2011), in addition to revised ADU laws and implemented programs to diversify housing types and opportunities through the Downtown Flexible Density Program, the Subdivision Regulations update, and developing and partnering on programs for transitional and permanent supportive housing opportunities. Additional Missing Middle incentives will be considered in the development of a parking regulations scope of work to reduce barriers to housing construction, as FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing $ 5,193,982 $ 6,099,171 $ 5,477,787 $ 621,384 10% $ 5,853,933 Contract Services $ 2,433,805 $ 2,467,763 $ 2,253,945 $ 213,818 9% $ 2,051,118 Other Operating Expenditures $ 153,217 $ 295,221 $ 189,287 $ 105,934 36% $ 307,660 TOTAL $ 7,781,004 $ 8,862,156 $ 7,921,020 $ 941,136 11% $ 8,212,711 Community Development
Department
FY 2022-23
Community Services Group - Community Development Department well as with the Margarita Area and Airport Area Specific Plan updates. A specific Missing Middle ordinance will be a final phase that will build upon previous work accomplished through a partnership with a Cal Poly professor, Dave Amos, who used the Missing Middle Housing project as the basis for instructing a fourth-year planning studio (CRP-411).
Other Operating Expenditures – Due to inclement weather, the City’s Fiscal Health Contingency Plan policies, and numerous vacancies in the department, training budgets were not fully utilized. There were also significant savings in credit card merchant fees due to the front counter being open to the public and customers using checks instead of credit cards for their transactions.
Development Services Revenue
The actual revenue realized from the City’s Development Review programs was 5% below projections for FY 2022-23. Development Services related fees produced over $6 million in General Fund revenue for various activitiessupporting development, including planning, infrastructure plan check, subdivision map checks, and building permits. The table below illustrates that the variance between the budget and actual Development Review Fees totaled $228,658. FY 2023-24 revenue projections have been revised slightly downward by approximately $378,000 taking into consideration this year’s slight shortfall. While actual revenues were over-realized in half of the fee categories depicted in the chart below, CDD underrealized Building permits, Code Enforcement fines, Development Review Fees, and Infrastructure Plan Check & Inspections.
Table 32 - Development Review Revenue
Building Permits: Building permit fees collected were approximately 14% below projections for the year.
This is attributed to factors such as inclement weather due to rainstorms, supply chain issues, inflation, and increased interest rates that are impacting potential development projects. This shortfall resulted in a reduction in actual revenue of approximately $416,000 this year. CDD anticipates a slight increase in FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
1 Building Permits $ 3,165,038 $ 2,921,700 $ 2,505,378 $(416,322) -14% $ 2,561,860 2 Code Enforcement Fines $ 61,695 $ 60,000 $ 46,560 $ (13,440) -22% $ 79,617 3 Development Review Fees $ 363,396 $ 341,228 $ 330,002 $ (11,226) -3% $ 387,008 4 Encroachment Permits $ 295,643 $ 323,340 $ 418,019 $ 94,679 29% $ 324,437 5 Engineering Development Review Fees $ 136,274 $ 123,803 $ 153,878 $ 30,075 24% $ 160,058 6 Infrastructure Plan Check & Inspection $ 408,035 $ 1,432,352 $ 927,550 $(504,802) -35% $ 970,693 7 Plan Check Fees $ 1,280,615 $ 1,116,311 $ 1,371,473 $ 255,163 23% $ 1,180,266 8 Planning & Zoning Fee $ 470,462 $ 416,195 $ 744,868 $ 328,673 79% $ 611,597 9 TIPP- Contra Revenue Account $ (210,161) $ (81,559) $ (73,012) $ 8,547 -10% $ - 10 TOTAL $ 5,970,996 $ 6,653,370 $ 6,424,716 $(228,653) -3% $ 6,275,536 Development Review Fees FY 2022-23
Community Services Group - Community Development Department Building Permit revenue in FY 2023-24 due to approximately four projects pending building submittals, 29 projects in building review, and 22 projects currently under construction. Although revenues swing greatly month-to-month, the Building and Safety Division ended the fiscal year strong and saw increased activity in the summer months of May and June. Although not currently assumed in the forecast, staff is monitoring the potential for a major revenue disruption due to a possible recession by tracking permit applications. If necessary, adjustments will be recommended at mid-year.
Figure 3 - Building Permit Revenue by Month
Code Enforcement Fines: Revenues from Code Enforcement Fines were approximately 22% below projections. In FY 2021-22, the City realized approximately $61,695, so the total budget for FY 2022-23 was lowered to $60,000. However, only $46,560 of this projection was realized this fiscal year. This change is largely due to two Code Enforcement Technician vacancies. Technicians typically issue citations for violations identified through proactive enforcement. Code Enforcement Officers are resolving neighborhood services violations only identified through complaints, taking them away from being able to work on more complicated cases. In addition, because of a change in the law regarding how fees can be administered, past-due citations are now sent to a collections agency instead of being placed as property liens. This method has proven to be a less effective in recovering delinquent fines, especially when citations are for small dollar amounts (as is the case with most of the City’s code enforcement related fees). Finally, totals also reflect the compliance with corrective notices sent by Code Enforcement Officers that did not materialize into violations and fees.
Development Review and Engineering Development Fees: Development review fees were consistent throughout the fiscal year and only 3% below the projection for the year. Similar to the building permit submittals, there was an increase in Development Reviews in the month of June. These fees are collected when projects with an entitlement go through the building permit process. The fees reflect staff time spent ensuring the building permit complies with the previously approved entitlement. Revenue from Development Review fees is expected to be slightly higher next year due to significant updates to municipal codes that resulted in a more streamlined development review processing, allowing more projects to be reviewed. Engineering Development Review fees are associated with the engineering
Community Services Group - Community Development Department team’s review of development projects. The team processed 211 reviews, equating to $153,878 in revenue.
Encroachment Fees: Encroachment permits are issued for work in the City’s right-of-way by private development. Encroachments are required for all curb, gutter, sidewalk, and utilities work in the right-ofway. Encroachment Permits had a record-high earning months in May and June, equating to 29% more revenue than was projected due to development tract projects. This fee is directly correlated with building permits. .Figure 4 - Monthly Encroachment Permit Revenue Infrastructure Plan Check and Inspection Fees: The most significant gap in the revenue projections for FY 2022-23 relates to infrastructure plan check and inspection fees. Although staff had identified projects in progress that would generate revenue, some of those projects did not complete the plan review process during FY 2022-23. This resulted in CDD receiving 65 percent of expected revenues or $927,550 in FY 2022-23. In addition, infrastructure plan check is a difficult fee to estimate, as it can be unevenly distributed among a smaller number of large projects. If a few of these larger projects lag, or do not materialize, this can have a large impact on realized revenues. Some projects are taking longer than anticipated and will go into the next fiscal year(s). The number of new large projects coming in compared to recent record years is being tracked and monitored to help anticipate future declines. Staff is aware of the underrealized revenue for these fees and will reassess the projected revenue amounts in the future.
Plan Check Fees: Plan checks brought in more revenue than projected and high activity at the beginning and end of the fiscal year explains the almost $1.4 million collected, which equated to 23% more revenue than anticipated. The implementation of SolarApp+ an automated, instant permit issuance business process for residential solar projects, also boosted revenue. The App also reduced costs of consultant services for solar related reviews in FY 2022-23 by roughly $33,000. Plan check services will be fully budgeted at the beginning of the year instead of adjusting the budget as revenue is received. These services are 100% cost recovered, and the administrative change has no fiscal impact on the budget.
Community Services Group - Community Development Department Figure 5 - Monthly Plan Check Revenue
Planning & Zoning Fees: Planning and Zoning fees collected were 79% higher than projected in FY 2022- 23 due to five months of high activity at the beginning of the fiscal year. Changes approved to the Zoning Regulations in support of housing production and economic development allow certain projects to move forward with a timelier review of entitlements. Fewer projects go to the Planning Commission and Architectural Review Commission than have in the recent past. Projections of $416,195 in revenue for Planning and Zoning fees materialized to $744,868, this fiscal year. Next fiscal year the Department is estimating $611,597 in Planning and Zoning fees, in anticipation of a projected slow-down in the number of applications submitted, likely due to continued elevated interest rates and economists' mentions of recessionary concerns.
Development Services Designation
Resolution No. 10539 authorizes the City Manager to approve the appropriation and carryover of up to 75% of the over-realized development services revenue. This ensured that 100% of the department’s operating costs related to development review were covered and promoted timely processing of development permit applications throughoutthe life of applicable projects. Due to no over-realization of development services revenue in FY 2022-23, there will be no revenue added to the Development Services Designation balance.
Because a new Plan Review Policy was established that ensures 100% cost recovery and allows the Finance Director to directly appropriate revenues to pay for costs directly from the fee revenue collected, this designation policy was eliminated with the 2023-25 Financial Plan. A balance of $464,136 remains in the assigned designation account for use on the intended purpose; however, once drawn down, the account will be eliminated.
Community Services Group – Parks and Recreation
Parks & Recreation Department
A Year In Review
In order to support the City-wide effort to reduce expenditures under the Fiscal Health Contingency Plan that was activated in January 2023, the Parks & Recreation Department reduced spending in a variety of areas, held some vacancies open to maintain salary savings, and paused spending on non-essential purchases. While the Department ended the year with slightly lower-than-targeted revenue (which was expected due to the winter storms), expenditure budget savings more than offset the overall impact on the General Fund. It is important to note that FY 2022-23 expenditures do not reflect normal spending levels for the Department.
The Community Services Division brought the community together with popular pop-up events like the Jack House & Gardens Spring Concert Series and Monday Meet-Ups. The September Scramble returned with more than 650 participants, and the Spring Fling and Boo Bash events offered seasonal fun and festivities to local families. Senior programming reached new heights with popular events like Around the Town, Senior Trivia, local excursion events, and hiking groups. Staff expanded Youth Sport Clinic offerings, holding clinics from September through May. The City partnered again with YMCA on the youth basketball league, expanding participation to 65 teams; the futsal league returned to pre-pandemic numbers with 30 teams this year; and Junior Giants baseball league participation exceeded initial capacity with over 240 participants, thanks to the support of over 40 volunteer coaches. Adult softball continued to run with three seasons and averaged 55 teams per season, and the monster Skate Series held a huge finale for our local “shredders” at the SLO Skate Park in May. The Department hired its first-ever full-time Volunteer Coordinator in January to oversee and grow the City-wide volunteer program. In May, the City Council approved the conversion of this role from contract to regular full-time, ensuring the future success of this important community need.
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). Staff expanded programming to include a new TK/Kinder program during the school year in support of the new school district format, a summer Kinder program, and tailored afternoon summer programming to meet the needs of the community and school district. In addition, a new three-week summer sports camp provided childcare to over 100 participants during the weeks when Youth Services programming was not in session.
Working in partnership with San Luis Obispo Museum of Art (SLOMA), 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.
Facilities continued to support the Downtown Dining program in Mission Plaza by setting up daily outdoor dining opportunities to the community.
Aquatics offered consistent summer programming, including its wildly popular Super Rec Saturdays – expanded recreational swim days for the community. Staff updated safety equipment, added new inflatable features, and continued to be the main SLO County provider of lifeguard training sessions to residents countywide.
Community Services Group – Parks and Recreation
Golf staff maintained the 26-acre, 10-hole Laguna Lake Golf Course, offering regular programming outside of the storm-related closures in the winter, and continued its remediation of the on-site Pro Shop. Updates to the course included new course signage and new golf carts.
Ranger Service constructed new trails at Righetti Hills Open Space and Irish Hills Open Space and continued to grow its educational programming with environmental outreach events, three sessions of Junior Ranger camp, and Ranger-led interpretive hikes, including the City’s first Ranger-led bilingual hike in May. 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.
Park planning for the Righetti Ranch Parks system kicked off with a Community Forum in April along with a community-wide survey that advised the initial design of a neighborhood park, linear park and pocket park. Additionally, the initial surveying and design process for Emerson Park Prop 68 State Grant commenced in the spring.
Accomplishments and Strategic Goal Updates
1. Expanded childcare services at five elementary school sites located within the City limits (C.L.
Smith, Hawthorne, Pacheco, Sinsheimer, and Bishop’s Peak), collaborating closely with San Luis Coastal Unified School District (SLCUSD); and offered Teacher Workday camps at the five sites to accommodate more children.
2. Expanded summer Youth Services programming to meet community and school district needs with additional camp options, including a new Kinder summer program with 60 daily participants; and augmented Summer Fun Day Camp to accommodate 300 participants per week (up from 120)
3. Added two new trails (Quarry Trail at Righetti Hill, and Bog Thistle Extension at Irish Hills) and maintained 64 miles of trails and trailheads throughout the City’s Open Space
4. Hosted more than 30 environmental education events
5. Continued the popular Downtown Dining program in Mission Plaza, offering outdoor dining opportunities to the community to support economic recovery
6. Oversaw increasingly popular Youth Sports Leagues (Basketball and Futsal), the largest-to-date Junior Giants league participation, and expanded Youth Sports Clinics, including a three -week Summer Sports Camp
7. Offered 43 new senior events, including Around the Town, Senior Trivia, local excursion events, and guided hikes
8. Held 20 Community Events, including: Monday Meet-Ups, Spring Concert Series, Boo Bash, Spring Fling / Egg Hunt, Leprechaun Lost, September Scramble, and Outdoor Movie Night
9. Oversaw an increase in permitted special events from the prior year and the return of rentals to the Ludwick Community Center after an extended closure of the space
10. Renovated Hole 9 of the Laguna Lake Golf Course, and added new carts to the course Challenges
Recruitment and staffing posed the greatest challenges for the Parks & Recreation Department. Although hiring has gotten easier since the height of the pandemic, a national lifeguard shortage, the City’s ability to provide competitive wages, and overall labor market issues have continued to impact recruitment and retention at the SLO Swim Center. The recruitment difficulties in the first half of the year for the Aquatics
Community Services Group – Parks and Recreation
Specialist position posed additional challenges to programming and providing critical administrative functions; however, the division was still able to optimize its programming to meet community needs.
Youth Services experienced recruitment and retention challenges and space limitations at program sites.
Community Servicesstruggled to ensure sufficient staffing for youth and adult sports, and the absence of a recreation coordinator in late spring amplified these challenges. A restructuring of the Recreation Coordinator position to focus primarily on sports, and the move to more universal recreation leader supplemental positions are anticipated to provide greater stability in FY 2023-24. The Ranger Service division completed the reclassification process to move to a Skill-Based Pay model beginning July 2023 to better retain qualified staff and incentivize training skills for performance.
Winter storms forced the Laguna Lake Golf Course to close a total of 53 days from January through April and caused damage to the bridge which connects the course. The course also experienced countless irrigation leaks due to its aging infrastructure. Infrastructure improvements are being considered for future capital improvement plans. The Pro Shop facility is currently being remediated due to flood damage from December 2021, and is operating out of a temporary on-site office trailer; it is set to reopen in FY 2023-24. The Golf Course struggled with cash-only payments for the first quarter and a half of the year but began accepting credit cards through a City-approved vendor in October 2022.
Table 33 - Parks and Recreation Performance Measures
Objective Measure 2022-23
Target
2022-23
Actual
Provide inclusive, accessible
programming that serves the whole
community.
Strategic Goal: Programming is Directed
to Diverse Users (P&R Strategic Plan
Goal), DEI and Economic Vitality MCGs
# of Department Community Events 20 22
# of non-profit permitted Facility Uses 120 290
# of program registrations 3,500 5,371
# of program offerings 320 480
# of childcare spots filled/offered 1,100/1,100 1,834/1,834 # of children receiving subsidy
51 CAPSLO
27 City
Scholarship
64 CAPSLO
27 City
Scholarship
In Coordination with Public Works,
engage the public to prioritize new and
revitalized Recreational Amenities
Strategic Goal: Expand Parks & Facilities
(P&R Strategic Plan Goal), MCG
Economic Stability
# of public outreach meetings 6 221
# of updated or new parks and amenities in
process
5 9
Creates and fosters a sense of
community through citizen involvement
Strategic Goal: Maximize Community
Resources & Collaborations (P&R
Strategic Plan Goal)
# of volunteers/hours 400/1200hrs 346/1266hrs
# of temporary Public Art or Cultural Art Events 5 5
Leverage technology to engage the
community and promote program
offerings
# of Instagram followers 7,900 7,015
# of Facebook followers 5,200 5,577
21 Public outreach meetings are focused on the development of new parks. Capital Improvement Project delays resulted in the occurrence of only two public outreach meetings during 2022-23.
Community Services Group – Parks and Recreation
Objective Measure
2022-23
Target
2022-23
Actual
Strategic Goal: Programming is Directed
to Diverse Users (P&R Strategic Plan
Goal)
Open Space Preservation and
Enhancement
Strategic Goal: Nurture Open Space (P&R
Strategic Plan Goal), Climate Action MCG
# of miles of Open Space trails maintained 61.75 64
# of staff hours dedicated to fuel reduction 2,500 3,875 # of encampment site clean-ups removed from
Open Spaces 60 84
Variance Analysis
Table 34: Parks & Recreation Expenditures
Staffing – The Facilities division experienced salary savings of $23,000 due to fewer indoor rentals and the vacancy of a Facilities Specialist from May to June. In Youth Services, temporary salaries were lower than usual (nearly $127,000) because the division was not operating at full staff capacity due to recruitment and retention challenges. Short-term vacancies in the Program Assistant role and with a school Site Director role resulted in a salary savings of nearly $36,000. In Community Services, the delayed requisition of the Volunteer Coordinator contract position (now a regular FTE) that was budgeted during the FY 2021- 2022 Mid-Year Review generated nearly $33,000 of savings, and the temporary vacancy of a Recreation Coordinator for the end of May and part of June ($13,000 in savings) led to the need for additional supplemental hours ($4,000 over budget). Two full-time Ranger vacancies for part of the year (totaling $67,000), and a surplus in the Open Space technician budget due to a technical error in the City’s budgeting software ($22,000) contributed as well to the Department salary savings.
Contract Services – While increased field trip bussing costs drove up Contract Services costs in Youth Services ($18,000 over budget), savings in Community Services ($45,000) with many smaller-scale, lower cost events, and other divisional savings throughout the Department allowed for a total surplus of over $48,000. Since the school district required summer camp to be relocated and local transit services were not available, the City was required to charter a bus multiple times a week to transport campers on field trips. The Department has adjusted its budgets appropriately for FY 2023-24 to help account for future unexpected expenditures.
Other Operating Expenses – Youth Services ended the year with savings of $11,000 for childcare site furniture and fixtures, as no furniture or furnishings required immediate replacement. The Golf Course had savings on Chemicals ($13,000) and Construction Materials (nearly $5,000) as it was able to meet immediate needs with existing supplies. Community Services had savings on facility rental costs ($8,000) FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing $ 4,229,104 $ 4,659,642 $ 4,233,128 $ 426,514 9% $ 4,744,608 Contract Services $ 283,723 $ 362,619 $ 300,629 $ 61,991 17% $ 359,747 Other Operating Expenditures $ 439,675 $ 474,559 $ 423,175 $ 51,384 11% $ 422,165 Utilities $ 154,331 $ 119,895 $ 134,947 $ (15,052) -13% $ 149,086 TOTAL $ 5,106,833 $ 5,616,716 $ 5,091,878 $ 524,837 9% $ 5,675,606 Parks & Recreation
FY 2022-23
Community Services Group – Parks and Recreation
as usage needs fluctuate, and savings on program supplies ($8,500) as fewer supplies needed replacement than expected. These accounts make up most of the savings in Other Operating Expenses for the Department.
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 $20,000. This was partially offset by limited use of well water for the Golf Course, which draws from Electric Service, in addition to the limited use of irrigation between January and March due to the storms.
Parks & Recreation Revenue
Table 35: Parks & Recreation Revenue
FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
1 Facilities
2 Indoor Rental & Use Fees $ 30,115 $ 65,100 $ 39,981 $ (25,119) -39% $ 65,100 3 Library Rental $ 4,780 $ 16,290 $ 3,422 $ (12,868) -79% $ 6,500 4 Special Events Insurance $ 7,877 $ 10,000 $ 10,478 $ 478 5% $ 12,000 5 Outdoor Rental & Use Fees $ 66,494 $ 129,960 $ 103,606 $ (26,354) -20% $ 135,003 6 Special Events App/Permit $ 30,653 $ 33,293 $ 33,186 $ (107) 0% $ 30,000 7 Youth Services
8 Youth Services Camps $ 167,010 $ 154,275 $ 94,851 $ (59,424) -39% $ 155,980 9 Youth Services Childcare $ 630,369 $ 639,806 $ 700,427 $ 60,621 9% $ 663,616 10 Community Services
11 Adult Athletic Fees $ 103,148 $ 154,362 $ 100,508 $ (53,854) -35% $ 161,598 12 Youth Athletic Fees $ 63,619 $ 55,000 $ 93,134 $ 38,134 69% $ 57,750 13 Special Events - City Sponsered $ 149 $ 13,583 $ 1,345 $ (12,238) -90% $ 3,400 14 Instruction Fees $ 84,501 $ 97,830 $ 76,158 $ (21,672) -22% $ 102,722 15 Aquatics
16 Swim Instruction Fees $ 86,617 $ 75,108 $ 102,562 $ 27,454 37% $ 82,700 17 Aquatics Daily Use Fees $ 89,743 $ 115,175 $ 86,050 $ (29,125) -25% $ 121,000 18 Multi Day Swim Passes $ 59,898 $ 44,383 $ 66,559 $ 22,176 50% $ 55,000 19 Therapy Pool Fees $ 3,642 $ 16,304 $ 5,270 $ (11,034) -68% $ 16,000 20 Golf
21 Golf Greens Fees $ 178,024 $ 235,180 $ 167,997 $ (67,183) -29% $ 220,000 22 Golf Lesson Fees $ 159 $ - $ 699 $ 699 $ -
23 Golf Rental Fees $ 6,070 $ 11,232 $ 5,140 $ (6,092) -54% $ 6,000 24 Driving Range Fees $ 8,860 $ 12,900 $ 10,901 $ (1,999) -15% $ 13,000 25 Golf Cart Rentals $ 14,050 $ 29,675 $ 19,424 $ (10,251) -35% $ 25,000 26 Other Revenue
27 Sales Taxable $ 11,852 $ 10,000 $ 7,242 $ (2,758) -28% $ 10,000 28 Other Revenue $ 40,804 $ 72,867 $ 56,539 $ (16,327) -22% $ 74,000 29 Junior Ranger Camps $ 5,808 $ 4,982 $ 8,361 $ 3,379 68% $ 5,230 30 TOTAL $ 1,694,241 $ 1,997,305 $ 1,793,843 $ (203,462) -10% $ 2,021,599 Parks & Recreation Revenue FY 2022-23
Community Services Group – Parks and Recreation
Facilities: Permitted event revenue was evenly aligned with target revenue. However, Indoor Rentals and Library Community Room Rentals have still not recovered to pre-pandemic levels, and outdoor rental reservations were impacted by the winter storms in January to March. Prior to the pandemic, many outside groups held regular events at the City’s indoor facilities. The Department has noticed that majority of these groups found alternative venues post-pandemic. The department is working with the Communications division to actively market its indoor facilities to bring these back to pre-pandemic levels.
Additionally, facilities were often booked by the City, the County or other governmental agencies, at no cost.
Youth Services: Youth Services Childcare revenue during the school year exceeded its target by over $60,000 as enrollment was at capacity throughout the year, and year-over-year revenue budget increases were conservative due to the uncertainty of potential facility use and the impact of SLCUSD’s program structural changes from FY 2021-22 to FY 2022-23. At the same time, Youth Services Camps revenue was $60,000 under its target as July summer camp registration revenue was managed through SLCUSD in July and reimbursed to the City; previously it had been collected through the standard City registration process in June. This variance is due to a timing issue, and the revenue will be reflected in FY 2023-24. It should not lead to any variances moving forward unless the process changes again.
Community Services: While adult athletic fees were not particularly low when looking at historical actuals, they are low compared to the budget projections because of planned additional and expanded adult athletic programming. Unfortunately, staff did not have the bandwidth to activate these, along with a shift of priorities to support other community programs, leading to a shortfall of nearly $54,000. At the same time, a very strong year for youth sports ($38,000 over target) based on high attendance for youth basketball, futsal and sports clinics made up for much of this deficit. Instruction Fees (contract class registrations) were heavily impacted by the winter storms (January – March), and summer enrollment was down due to the free summer programming provided by SLCUSD. Unfortunately, the Department was not informed of this change until January 2023, after the approval of FY 2023 budget adjustments at Mid-Year. City-Sponsored Special Event revenue missed targets as the only fee-based event offered was the September Scramble (other events offered to the community were free).
Aquatics: Daily Use Fees and Multi Day Swim Passes landed slightly ($7,000) below targets, but at-capacity swim instruction enrollment pushed Swim Instruction Fee revenue ($27,000) over target. At the same time, Other Pool Revenue shortfalls from fewer pool rentals, and fall staffing-related closures and winter storm closures impacts resulted in an $11,000 shortfall in Therapy Pool revenue.
Golf: Despite a busy and profitable spring and early summer, Golf Course revenue was severely impacted by 53 days of storm-related closures between January and April. Additionally, the Pro Shop was closed for construction due to flooding and remediation efforts, which limited sales, and the absence of a credit card processing system until October also impacted revenue.
Community Services Group – Public Works
Public Works Department
A Year In Review
In order to support the City-wide effort to reduce expenditures under the Fiscal Health Contingency Plan that was activated in January 2023, the Public Works Department reduced spending in a variety of areas, held some vacancies open to ensure salary savings, and paused spending on non-essential purchases. The Department ended the year with expenditure budget savings of about 7%. Departmental efforts were focused on achieving key objectives with emphasis on safety and economic resiliency, following multiple pandemic years. Inflation rates and supply chain issues have significantly impacted operating and capital costs.
The Public Works Department continued to provide core services to the community by maintaining the City’s parks system, community facilities, roadways, maintaining and replacing critical infrastructure, enhancing pedestrian safety and mobility, and maintaining the City’s urban forest. The Department’s need to pivot towards emergency storm response overwhelmed overall workload and operations by having to continue managing and responding to both. Beginning in January 2023, storm cleanup efforts distressed administrative and maintenance staff’s regular operations workloads. The City’s engineering resources were also redirected to storm projects. This remained a challenge through the end of the fiscal year and will continue into the 2023-25 Financial Plan.
The City launched the Ask SLO platform in September of 2022, which allows community members to submit requests online for suggested improvement within the city. This heavily impacted the Public Works Department’s workload; on average, 60% of the requests submitted through AskSLO are assigned to the Public Works Department to address.
Following the completion of several organizational studies related to Urban Forest Services and CIP Engineering, the Department has implemented portions of the recommended process improvements in staffing, performance tracking, financial management, and delivery of services. These changes resulted in more efficient operations and better overall interdepartmental workability. This work is not complete and will continue into the next fiscal year.
Accomplishments and Strategic Goal Updates
The Department continued to address Major City 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 $69 million toward the maintenance and preservation of City assets across all funding sources. The CIP Engineering program also 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.
During FY 2022-23, several major projects were completed. It is important to note that although some capital projects are highly visible to the community, others are not, including water and wastewater system improvements, open space maintenance, silt removal, information technology maintenance,
Community Services Group – Public Works
facilities maintenance, and fleet procurement. The list below highlights some of the major accomplishments in the CIP during the fiscal year:
1. Orcutt Tank Farm Roundabout
2. Roadway Sealing 2022
3. Curb Ramp Improvementsin Laguna Lake and Foothill/Chorro neighborhoods (Pavement Area 6 and 7)
4. Electric Bus Procurements
5. Parks and Recreation Interior Office Rehabilitation
6. Pedestrian Crosswalk Beacon at Ramona
7. 40 Prado Road Bus Shelter Relocation
The Urban Forest Program continued to place focus on the preservation, maintenance, and enhancement of the City’s urban forest. In 2022, the department implemented the City’s first preventative maintenance pruning schedule in many years, which has been operating with great success. Maintaining trees from a preventative standpoint is critical for safety and reducing risk during wind and rain events, which were prevalent in the past fiscal year.
The Department continued to deliver core services by enhancing community and downtown cleanliness through sidewalk scrubbing, street sweeping, parklet maintenance, and ongoing maintenance of parks and facilities utilized by all residents, businesses, and visitors. An important highlight this year was the installation of new “big belly” smart trash receptacles that assists with the trash collection and trash containment process making the downtown area cleaner.
Challenges
The Department experienced challenges in the areas of staffing, cost escalation, supply chain issues, and keeping up with maintenance of aging infrastructure. 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. Filling these vacancies has been challenging as there are limited candidates that apply for these positions. This has resulted in a higher level of contract services needed to manage workload over the last fiscal year and will likely continue into the next year. It should also be noted that hired contract services vendors are often facing similar staffing issues or larger than typical workload demands which limits responsiveness.
Project and core service delivery came with major challenges in the areas of cost escalation and supply chain shortages. The City experienced major increases in the price of fuel for the City’s fleet, the cost of natural gas tripled from December 2022 to January 2023, electricity costs increased 3.5% from March 2022 to January 2023, and chemicals used for maintaining the fleet and swim center have shown varying increases. Metal prices have increased 5-15% within the last fiscal year affecting many purchases, including items to maintain streetlights and signals, fleet parts and vehicles prices, electric vehicle charging infrastructure for the City transit program, and maintenance parts for buildings and parking structures.
Community Services Group – Public Works
Homelessness has affected the entire nation including the City, including the Public Works Department specifically in the Parks Maintenance and Streets Maintenance programs due to their increased response required to address uncleanliness in the City’s Parks and downtown core. The Department receives a high volume of requests through the AskSLO platform that are tied to cleaning up homeless e ncampments in creeks, parks, streets, and public bathrooms. The contract services budget for many programs within the department has increased costs as a result of this work effort associated with cleanup work, replacement of damaged infrastructure, as well as implementing infrastructure improvements that are more robust and could reduce the likelihood of future of homelessness related vandalism.
Damage to City property impacts the Department annually; however, in the past fiscal year, the nonrecoverable cost associated with property damage has resulted in large expenditures in many programs, including Signals and Street Lighting, Parks Maintenance, and Facilities Maintenance programs. Often, the responsible party that damaged the property is not found, which results in substantial impacts to the operational budget, which is predominantly intended for preventative maintenance and standard operations and not asset replacement.
The City received historic precipitation totals from the 2022-2023 winter storms, resulting in flooding around the City. In January 2023, the City declared a “State of Emergency” and activated its Emergency Operations Center (EOC) and Department Operations Center (DOC) to respond to the impacts from the storms. These storms presented risks to the community and were managed by the City’s storm response efforts that operated 24 hours a day to reduce impacts to life and property. The cost of the storms had an impact to many programs that incurred unanticipated costs for materials and overtime. These additional costs are subject to possible future FEMA reimbursement.
Table 36 - Public Works Department Performance Measures Objective Measure 2022-23 Target 2022-23 Actual
Proactively enhances traffic safety by providing a system of safe, reliable, and well-maintained roadways,
sidewalks, traffic signals and streetlights.
MCG: Climate Action
Strategic Goal: Enhance Safe & Efficient Transportation (PW Strategic Plan)
Pavement Condition
Index 75 76
Bicycle network in total
miles (Class I/II/III/IV) 14.7/31.0/24.8/4.0 14.5/31.3/25.3/1.5 Street miles maintained 135 143
Enhance the City’s Urban Forest and maintains visually
appealing public spaces.
MCG: Climate Action
Strategic Goal: Proactively Manage Assets (PW Strategic Plan)
# of trees maintained 12,970 12,970
Total acreage of park
inventory 583 58422
22 The 2023-24 park acreage inventory includes the addition of North Broad Street Park and Parks A, B, and C in Avila Ranch.
Community Services Group – Public Works
Objective Measure 2022-23 Target 2022-23 Actual
Provide high quality services to the community through
efficient and effective delivery of capital improvement projects and management of the City’s infrastructure.
MCG: Economic Recovery
Strategic Goal: Connect with our Community (PW
Strategic Plan)
Total value of CIP
Managed23 $65M $97M24
Table 37 - Public Works Operating Budget Variance Analysis Staffing – There were 9% savings in the staffing category due to vacancies following the FY 2022-23 hiring chill, normal turn over, and retirements. As a result of continued program organizational studi es (CIP, Urban Forestry), the Department continued to fill new positions approved during the 2021-23 Financial Plan; however, as these studies were conducted there was a lag period in hiring that led to savings. While the Department experienced vacancies, there was an increased need to utilize contractors or consultants to deliver a variety of services.
Contract Services – There were minimal savings realized in contract services with the Department expending approximately 97% of its contract services budget. Some programs with excess spending in contract services were offset by reduced spending in other operating programs. The Signals and Lighting Program was over budget by $50,020 largely due to damage to City property by vehicle accidents and this overage was offset by the Swim Center, Parks Maintenance, and Public Works Administration programs having savings within their cost centers accumulating just over $70,000.
Other Operating Expenses – The Department expended approximately 93% of its other operating expenses. Throughout the Department, other operating expenses fluctuated drastically over the year primarily due to cost escalation and modified operations as a result of storm response. Some programs, including Fleet, experienced major increases in fuel costs while the department, as a whole, realized cost savings in other areas to offset cost escalation.
Utilities – Utility expenditures vary considerably year-over-year and the budget is based on estimated usage and projected rates for the year. A 4% variance is very minimal for this category. The unanticipated natural gas price spikes in FY 2022-23 caused that budget line to go over, but lower electricity rates
23 Includes all CIP projects and funding including Utilities, Transit, Parking, Public Works and IT, among others. 24 Accounts for all CIP funds managed. In FY 2022-23 large expenses were seen in the Sewer Fund estimated at $28 million, largely due to the Water Resource Recovery Facility Upgrade project.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing $ 9,916,115 $11,185,877 $10,187,359 $ 998,519 9% $11,013,029 Contract Services $ 1,946,852 $ 2,715,734 $ 2,633,518 $ 82,216 3% $ 2,133,180 Other Operating Expenditures $ 1,584,039 $ 2,133,791 $ 1,983,022 $ 150,770 7% $ 2,026,836 Utilities $ 2,052,754 $ 2,410,180 $ 2,320,454 $ 89,725 4% $ 2,535,002 TOTAL $15,499,759 $18,445,583 $17,124,353 $ 1,321,230 7% $17,708,046 Public Works
FY 2022-23
Community Services Group – Public Works
achieved through the Central Coast Community Energy (CCCE) program helped offset the overages. The FY 2023-24 budget has been adjusted to reflect new rate assumptions and usage estimates.
Parking Fund
Parking Fund
A Year In Review
Parking Services continued its modernization efforts over the last fiscal year by replacing outdated coinonly parking meters with credit card capable meters in the lower tier rate zone along the periphery of downtown and replacing single space meters with multi-space pay stations in the downtown core. The Program also worked in coordination with other staff and contractors to put the Cultural Arts District Parking Structure (CADPS) project out to bid. The Parking Fund ended the fiscal year with revenue above projections and expenditures below budget putting it in a better financial position in advance of bonding for the new CADPS construction costs. The Parking Fund did receive $700,000 of one -time American Rescue Plan Act(ARPA) funding to offset the limited continuation of the first-hour free parking in the City’s three existing parking structures during fiscal year. This benefit was discontinued on June 30, 2023, and replaced with the Park Local Pilot Program, which is specifically designed to benefit local community members.
Accomplishments and Strategic Goal Updates
Parking Services and the Finance Department continue to lead the effort to secure long-term debt financing for the new CADPS. Site preparation began in Spring 2023 with the demolition of three residential structures located on the project site. The project represents a significant investment in the downtown area and will support the SLO Repertory Theatre, adjacent businesses, Mission College Preparatory High School, and visitors alike.
Parking Services developed and received approval to implement a local parking incentive program branded the ‘Park Local Pilot Project’ which extends the first hour free in the parking structures to County residents that register with the City. The Parking Services Program also implemented a gateless parking system in the 842 Palm Street parking structure, which went live in July 2023. Staff continues to work with vendors and other City staff to fine-tune the system. Once the 842 Palm gateless parking structure is operating as intended and meeting community needs, gateless installations will be implemented at the City’s two other parking structures.
The Program was also able to update the Access and Parking Management Plan, which is the City’s guiding document regarding parking and curb access. The last comprehensive update occurred in 2001 and no longer aligned with the City’s goals and objectives for access and demand management in the downtown and residential areas.
The Parking Services Program also transitioned to a new parking enforcement and digital permit vendor during this past fiscal year, which allows the program greater resources and provides a better customer experience. The Program also led efforts and communication around the free holiday parking that encourages downtown activity and commerce during the holiday season. Staff also coordinated efforts with the transition of office space from Parking Services to the Mobility Services Office.
Throughout the fiscal year, staff have supported many efforts associated with the Safe Parking Program at its current location at Railroad Square and the transition to a new temporary location, potentially at Palm Street near the Veterans Hall. Staff have also worked closely with residents and businesses to address camping and vehicle abandonment issues throughout the community.
Parking Fund
Challenges
Communication and project delivery were the biggest challenges faced by Parking this last fiscal year.
Parking Services is three years into its modernization efforts and communication with the community throughout the process has required a significant work effort. Projects like the single space meter conversion and transition to a gateless parking system in the structures have taken longer than anticipated. Adjusting the technology used by the Parking Services Program to align with community needs and expectations has caused some integration issues amongst the various vendors used to administer and enforce the different parking options, but staff continue to be dedicated to ensuring success.
Parking Fund Expenditures
Table 38 - Parking Fund Operating Expenditures
Staffing – Turnover in multiple full-time positions resulted in staffing savings. The Parking Services Supervisor position was vacant for over half of the year, the Parking Meter Repair Worker position was vacant for half of the year, the Parking Enforcement Officer II position was vacant for 10 months, and one of the Maintenance Worker positions was vacant for two months. The Fund was over budget in temporary salaries due to an increased need for part-time staffing to maintain workload. The Fund assumed gateless operation of the parking structures would occur at the beginning of FY 2022-23 and would result in a reduction in part-time positions; however, the roll out of gateless operations was delayed. Part-time Parking Enforcement staff needs also increased over the holiday period to provide night-time security in the parking structures while an agreement for contracted security services was negotiated.
Contract Services – Parking was slightly over budget for Contract Services due to an increase in communication services and outreach efforts for various projects and programs mentioned in the above sections.
Other Operating Expenses –Parking was significantly over budget in credit card merchant fees due to the high adoption rate of the pay stations and mobile applications. Pay stations collect over 90% of revenue from credit cards compared to about 60% with single space parking meters. The credit card merchant fees budget increases slightly in FY 2023-24 but may need to be adjusted at Mid-Year. Staff will monitor the credit card adoption rate and make recommended changes as needed. Parking also over expended its Print and Reproduction budget due to increased outreach efforts. Parking did have savings in the FY 2021-22 FY 2023-24
Actual Budget Actual
Funds
Available % Budget
Staffing $ 1,574,054 $ 1,865,400 $ 1,667,902 $ 197,498 11% $ 1,922,947 Contract Services $ 709,433 $ 962,592 $ 969,815 $ (7,223) -1% $ 930,946 Other Operating Expenditures $ 377,531 $ 429,397 $ 520,179 $ (90,782) -21% $ 403,488 Transfers Out to GF $ 1,105,120 $ 1,263,622 $ 1,263,622 $ - 0% $ 1,387,281 Utilities $ 170,905 $ 221,933 $ 197,701 $ 24,232 11% $ 264,172 Debt Service $ 823,481 $ 851,577 $ 843,342 $ 8,235 1% $ 852,116 TOTAL $ 4,760,523 $ 5,594,521 $ 5,462,561 $ 131,960 2% $ 5,760,950 Parking Fund Operating
Expenditures
FY 2022-23
Parking Fund
Advertising and Public Outreach line item which can be used to supplement Print and Reproduction costs if additional outreach is needed in future years.
Utilities –Electricity, which makes up most of the utilities expenses, came in below budget. This is a result of several electric vehicle charging stations being out of service. The manufacturer is aware of the out of service stations and is working with Parking staff to repair or replace damaged parts covered under the existing warranty. Maintenance staff is collecting and comparing quotes for repairs needed that are not covered under the manufacturer’s warranty.
Transfers – There were no variances in Transfers.
Parking Revenues
Table 39 - Parking Fund Revenue
Parking Meters – Parking realized 12% more revenue from parking meters than anticipated. On-street parking occupancy was higher this past fiscal year than in previous years and the public has adjusted to use of the new multi-space pay stations. Parking meter revenue assumptions for FY 2023-24 increased to account for both rate increases as well as the higher occupancy rates.
Parking Fines – Parking fine revenue is difficult to estimate. With full staffing throughout the year, except for the Parking Enforcement II position and increased focus on the timed parking areas, especially those around Cal Poly, 73% more revenue from parking fines were generated than expected.
Parking Structures – Limited availability of supplemental staff members and equipment issues led to parking structure revenue below projections by about 8%. Parking structures are fully staffed but equipment issues persist. It istaking longer than anticipated to implement the gateless parking system at 842 Palm which may impact the fund’s ability to fully realize the anticipated structure revenue. Staff is working diligently to integrate the gateless operations with the permitting, mobile payment, and enforcement applications.
Long-term Parking – Long term parking revenues were 17% lower than budgeted and have not rebounded to pre-pandemic rates as anticipated. Long term parking revenues were impacted by decreased usages in the proxcard program, fewer 10-hour monthly permits sold, and significant reduction in construction meter bag sales compared to previous years. Staff will continue to monitor this trend and pricing will be reviewed during the upcoming parking fee study to ensure the right balance of cost is distributed to each parking program offered.
Other Rent and Lease Revenue – The forecast assumed termination of Railroad Square lease payments and implementation of hourly paid parking beginning July 2022. However, paid parking was not installed, FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
Federal Stimulus Grants $ - $ 700,000 $ 700,000 $ - 0% $ - Long Term Parking $ 623,639 $ 844,900 $ 700,873 $ (144,027) -17% $ 695,300.00 Parking Fines $ 928,610 $ 793,500 $ 1,369,398 $ 575,898 73% $ 852,100.00 Parking Meters $ 2,210,191 $ 2,268,500 $ 2,543,994 $ 275,494 12% $ 4,876,000.00 Parking Structures $ 1,013,028 $ 1,328,450 $ 1,224,458 $ (103,992) -8% $ 3,242,100.00 Other Revenue/ Interest Revenue $ 260,662 $ 637,690 $ 820,440 $ 182,750 29% $ 537,824.00 Grand Total $ 5,036,131 $ 6,573,040 $ 7,359,163 $ 786,123 12% $ 10,203,324 Parking Revenue FY 2022-23
Parking Fund
so lease payments continued. Staff is working to execute new Railroad Square lease agreements in FY 2023-24 with updated pricing based on maintenance and operation of the Railroad Square lots. The rent and lease revenue budget will be adjusted at Mid-Year once new lease agreements are executed to reflect the new negotiated terms.
Unaudited Ending Fund Balance
Based on unaudited financials, the Parking Fund will return nearly $1.9 million to working capital. The revised budget for FY 2022-23 anticipated returning $1.3 million to working capital. The difference is a result of over realized revenue from parking fines and parking meters.
Transit Fund
Transit Fund
A Year In Review
The Transit Fund ended the fiscal year with both staffing and non-staffing operating savings. SLO Transit is still recovering from the COVID-19 pandemic and continues to have difficulty hiring and retaining drivers. Ridership increased from 453,500 in FY 2021-22 to 502,200 in FY 2022-23; however, this is still significantly lower than annual pre-pandemic ridership, which saw over one million rides a year. SLO Transit continues to take meaningful steps forward to modernize its fleet and operations to help in the recovery effort.
Accomplishments and Strategic Goal Updates.
SLO Transit received the first two fully electric buses at the beginning of calendar year of 2023. One was put into service in August 2023 with the second to follow shortly once it is outfitted with the required third-party components. The Transit Program, in coordination with the CIP Engineering Program, is installing the necessary charging infrastructure for the new electric buses. Two permanent charging stations will replace two temporary charging stations by the end of September 2023, with additional charging stations coming at a later date to support additional zero emission buses (ZEBs). This represents a major step forward in meeting the City’s zero emission goal as well as putting the City on schedule to meet the State’s zero emission bus mandates.
Staff continues to engage internal and external stakeholders in the development of the first Transit Innovations Study which is anticipated to be presented to Council for review in November 2023. The request for proposals (RFP) for the joint Short Range Transit Plan update between SLO Transit and San Luis Obispo Regional Transit Authority (SLORTA) was released in June 2023 and contract award is anticipated for early September 2023. This effort will provide a 5-year strategic plan to help SLO Transit meet the community’s transportation needs and accelerate the return to pre-pandemic ridership levels.
The Transit program was also part of a department reorganization which moved Transit under the Mobility Services Division. The reorganization included a reclassification of the Transit Manager position into the Mobility Services Business Manager which was filled in June 2023. The establishment of the new Mobility Services Division will help align active transportation planning and infrastructure installations, parking programs and services, and transit services to provide a more complete and robust transportation network for community members and visitors alike.
Challenges
Hiring and retaining drivers continues to be the biggest challenge for returning to a full service schedule.
SLO Transit is working with its contracted operations service provider to implement hiring incentives that make SLO Transit a more competitive employer. If the hiring incentives are successful, then staff anticipates a return to a full service schedule by Fall 2024.
Timely fleet replacement continues to be a challenge. In July 2023, Council approved the purchase of six additional electric buses and those new buses should be in service in the next 18 to 24 months, as it takes a minimum of 18 months to produce the bus, train on the new equipment, and register the bus with Department of Motor Vehicles. As the City continues to replace older buses with new electric buses, future maintenance costs reduce. At this time based upon the age of the transit fleet, maintenance costs are
Transit Fund
likely continue to increase until a majority, if not all, of the older buses can be retired from service. Fuel prices will also likely remain high for the next two or more quarters as the Organization of the Petroleum Exporting Countries (OPEC) continue to forecast decreased production rates through the Spring of 2024 thereby decreasing petroleum supplies.
Staff successfully applied and was awarded American Rescue Plan Act (ARPA) Discretionary funding to help cover operating costs for the next three fiscal years; however, long-term fund health is dependent on securing grants to fund operating and capital costs. Staff will continue to pursue discretionary grants to fund additional bus replacements and to rehabilitate the Downtown Transit Center which is identified in the Capital Improvement Plan.
Transit Fund Expenditures
Table 40- Transit Fund Operating Expenditures
Staffing – SLO Transit realized salary and benefits savings due to the vacant Transit Manager position, which has been back-filled by a part-time Retired Annuitant since July 2021. This position has now been filled and future Staffing savings in the program are unlikely.
Contract Services – SLO Transit realized a savings in Purchased Transportation, contracted transit operations services, due to continued operation of a reduced service schedule. The reduction in services is a result of driver shortages throughout the transportation industry, which has experienced a slower return to pre-pandemic normal when compared to other economic sectors. Staff anticipates a return to full academic schedule between winter and spring 2024 which is reflected in the FY 2023-24 budget.
Other Operating Expenses – Fuel costs were $52,000 (16%) higher than anticipated and prices are expected to remain high throughout the entire year as global uncertainties affect the stability of the oil market. Fuel budget was increased in the 2023-25 Financial Plan by more than 9% to account for the inflated fuel prices. Reduced services have provided reduced cost in miscellaneous materials and supplies and printing since minimal changes in services have occurred over the past year. These minor cost savings in materials and supplies and printing were not large enough to offset the additional fuel cost.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing $ 334,738 $ 312,254 $ 187,250 $ 125,004 40% $ 457,758 Contract Services $ 2,658,865 $ 3,647,517 $ 3,085,689 $ 561,828 15% $ 4,362,400 Other Operating Expenditures $ 335,265 $ 379,562 $ 405,112 $ (25,551) -7% $ 410,713 Transfers $ 226,183 $ 365,544 $ 365,544 $ - 0% $ 463,491 TOTAL $ 3,555,050 $ 4,704,876 $ 4,043,595 $ 661,281 2% $ 5,694,361 Transit Fund Operating
Expenditures
FY 2022-23
Transit Fund
Transit Revenues
Table 41 - Transit Fund Revenue
Federal Revenue – Federal Transit Administration (FTA) 5307 is a reimbursement grant and that funding is obligated for the procurement of six additional battery electric buses. Delivery of the buses is scheduled for Spring 2025. Transit was also awarded an ARPA grant of $12.3 million for operating assistance. FY 2022-23 was the first drawdown year of that grant, which totaled $2.74 million. The unused grant funds will rollover to future fiscal years.
Local (Bus Fare) Revenue – Bus fares were 7% lower than budgeted because SLO Transit continues to operate at reduced service levels due to a driver shortage following the COVID-19 pandemic.
Other Revenue – The Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) program provides discounts for the costs of new hybrid and zero emission bus procurement. Voucher payment is received by the manufacturer while the purchaser (City) pays a discounted cost at the time of purchase.
The voucher amount of $138,000 for new battery electric bus purchase was incorrectly accounted for as a revenue source in this fund, even though it is applied to the purchase price at time of order. Other Revenue also includes an Air Pollution Control District (APCD) grant for the installation of electric vehicle charging station infrastructure at the bus yard to support the new battery ele ctric buses. The APCD requires the equipment installation and issuance of a building permit before submittal for reimbursement can occur. The project is anticipated to be completed by the end of September 2023. The HVIP voucher being applied to the purchase price and not realizing revenue associated with the voucher offset each other. The delay in APCD grant reimbursement means the Transit Fund will realize the grant revenue in the following fiscal year but does not have an impact on the Fund’s solvency nor does it jeopardize other Transit funded capital projects.
State Revenue – The Transit Fund received more Local Transportation Fund (LTD) and more State Transportation Act (STA) funding based on regional apportionment than budgeted.
Unaudited Ending Fund Balance
Based on unaudited financials, the Transit Fund will return approximately $2.2 million to working capital.
FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
Federal $ 1,877,362 $ 11,547,838 $ 1,934,329 $ (9,613,509) -83% $ 7,571,830.00 Local (Bus Fare) $ 710,457 $ 850,000 $ 790,223 $ (59,777) -7% $ 990,000.00 Other Revenue/ Interest Revenue $ (131,372) $ 982,173 $ 421,260 $ (560,913) -57% $ 13,579.00 State $ 1,324,408 $ 2,663,080 $ 3,087,209 $ 424,129 16% $ 3,179,564.00 Grand Total $ 3,780,855 $ 16,043,091 $ 6,233,021 $ (9,810,070) -61% $ 11,754,973 Transit Revenue
FY 2022-23
Utilities Department
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 42 - Utilities Department Programs
Fund Fund Type 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 (AB
939)
General
Fund Solid Waste and Recycling
The Solid Waste program is paid for by AB
939 and Franchise fee funding. AB 939 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 be
designated for future activities related to
solid waste diversion.
A Year in Review
The Department’s Enterprise Funds ended FY 2022-23 with significant expenditure savings in both the Water and Sewer Funds. The Water Fund expenditures were $3.1 million under budget, primarily due to credits and savings in the water supply account. The Sewer Fund expenditures were $1.3 under budget, primarily due to staff vacancies, staff turnover at lower steps, and deferred or delayed work related to the implementation of the new Water Resource Recovery Facility.
Utilities Department
The Water Fund revenues were $352,00025 under budget, primarily due to a 9% reduction in water consumption compared to FY 2021-22. The Sewer Fund revenues were over budget by $879,00026 primarily due to an expanding customer base for corresponding sewer services. Sewer service charges are likely to reflect lower returns in FY 2023-24 as the Department implements the sewer cap27 based on an uncharacteristically wet winter. These variances are discussed in detail in the next sections.
The Utilities Department concluded FY2022-23 having provided high-quality services with limited service interruptions while navigating severe weather events. The Utilities Department remains in good financial condition but continues to experience above-inflation increases in industry-specific commodities like chemicals, electricity, and construction materials and services. Due to these significant increases in operational costs in areas such as water treatment chemicals and electricity, the City Council approved rate increases to maintain needed revenues to support the Water and Sewer Funds.
The Department continues to complete several work plan items that directly support the Major City Goals adopted by the City Council. The Department’s strategic priorities are to help advance the City’s overall goals tied to the Major City Goals, Department Strategic Plans, and other priorities as they arise.
Accomplishments and Strategic Goal Updates
1. Substantial completion of the Water Treatment Energy Efficiency Project. MCG: Climate Action
2. Completed the installation of the Tesla Battery Pack at the Water Treatment Plant. MCG: Climate Action
3. Awarded a contract for the development of the Water Treatment Plant Infrastructure Renewal Strategy.
4. Completed the design of the Johnson Waterline Replacement Project.
5. Completed a major update to the water distribution model to reflect new development.
6. Developed plans and went out to bid for the Reservoir 2 Cover Replacement Project.
7. Obtained approval for the creation of a third Water Resources Technician position.
8. Completed the study phase of the Tetrachloroethylene (PCE) Groundwater Contamination Project.
9. Awarded a $5.9 million grant for groundwater contamination cleanup. MCGs: Climate Action and Economic Resiliency
10. Received approval of the Groundwater Sustainability Plan.
11. Implemented GIS and Cityworks at the Whale Rock Reservoir.
12. Advertised and awarded the Spillway Underdrain Repair Project at Whale Rock Reservoir.
25 Excludes budgets and actuals related to debt proceeds. These accounts are dependent on capital project schedules and are offset by capital costs and future debt payments. 26 Excludes budgets and actuals related to debt proceeds. These accounts are dependent on capital project schedules and are offset by capital costs and future debt payments. 27 While the City measures all water consumption by metering the water that is delivered to each property, the City is unable to meter the wastewater or sewer that is collected through the drains in your sinks, toilets and showers. To prevent charging residents for sewer usage for water that is used outdoors, the City caps units of sewer that can be charged based on consumption during December, January, and February, when outdoor water use is minimal.
Utilities Department
13. Completed a major milestone by attaining regulatory compliance for nitrates and trihalomethanes at the Water Resource Recovery Facility (WRRF).
14. Began building out the WRRF’s software databases for the new facility, including the adoption of Cityworks as its new computerized maintenance management system (CMMS).
15. Commissioned a new sewer lift station at the Avila Ranch housing development.
16. Nearing completion of an upgrade to the Calle Joaquin lift station.
17. Adapted Wastewater Collections to a new State-wide Sanitary Sewer Systems General Order.
18. Began the Wastewater Collections Infrastructure Renewal Strategy project. This will include updated system modeling and a flow study to determine the effectiveness of private sewer lateral offset and rebate programs.
19. Completed a program audit of the City’s Sanitary Sewer Management Plan (SSMP).
20. Adopted new software that will increase pretreatment inspection efficiency and effectiveness.
21. Overhauled the City’s Stormwater program Memorandum of Agreement (MOA).
22. Completed a digital transformation of various paper-based systems and adapted the Water Quality Lab program to comply with new program requirements identified by The NELAC Institute (TNI).
23. Began updates to Confined Space Entry and Electrical Safety programs.
Challenges
The challenges that the Utilities Department experienced in FY 2022-23 can broadly be summarized as storm response, operating cost increases, capital project delivery, and increasing regulatory requirements. These are explained in detail below.
Storm Response - In addition to operational challenges, the Utilities Department remained resilient through the storms that occurred in January and March of 2023, driving the City to enact a Fiscal Health Contingency Plan on January 27, 2023. Additional capital costs were incurred due to the storm. These increases in capital costs resulted in compressed operating budgets, which ultimately impacted operations and staffing.
The storms also had positive and negative impacts on the City’s source water supplies. The copious rainfall allowed for all the surface water reservoirs to be filled. Of special note, Whale Rock Reservoir is now near 100% capacity, which has not occurred since 2006. Conversely, small landslides and higher river levels associated with the storms had negative impacts on the City’s water infrastructure. Pipelines were exposed and required repair to adjacent hillsides, and the Nacimiento pipeline was damaged and is undergoing temporary repairs to deliver water while a long-term strategy for a permanent repair is completed.
Operating Cost Increases- While inflation has been less severe in FY 2022-23, inflation on industry-specific commodities like chemicals and electricity remain high. For chemicals, it is typical to see five to ten percent price increases on an annual basis. In FY 2022-23, several chemicals exceeded the 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.
Utilities Department
Table 43 - Chemical Price Increases
Chemical
2021-22
Contract
2022-23
Contract 28
%
Increase
Alum $336 ton $450 ton +34%
Fluoride $1,760 ton $3,211.40 ton +82%
Chlorine (Cl2) $0.68 gal $1.40 gal +106%
Sodium Hydroxide (NaOH) $0.76 gal $1.28 gal +68%
Polymer $0.68 lb. $0.95 lb. +40%
Liquid Oxygen (Lox) $1.28 gal $1.30 gal +2%
Similarly, electricity costs are set to
have a phased increase of about
40% between January 2023 and
September 2023. While these cost
escalations have been partially
offset by data-centric operational
strategies and energy efficiency
projects (i.e., Tesla Battery and the
WTP Energy Efficiency Project), the
magnitude of the rate increases
have impacted the department’s
ongoing operational expenses
substantially.
While several indices indicate
slowing inflation, the fallout of extreme inflation in FY 2020-21 and FY 2021-22 have ongoing impacts on operations and capital costs. The Consumer Price Index, for all items, reflects a 12-month increase of
4.06% in May 2023. The Municipal Cost Index reflects a 12-month increase of 0.62% in May 2023.
28 One year contract with option to re-negotiate in 6 months due to volatile market. $-
$200,000.00
$400,000.00
$600,000.00
$800,000.00
$1,000,000.00
$1,200,000.00
$1,400,000.00
$1,600,000.00
FY 2021 FY 2022 FY 2023
Chemical YoY Expenditures
Figure 6 - Chemical YoY Expenditures
Utilities Department
Figure 7 - Municipal Cost Index Changes
Capital Project Delivery - Capital project costs continue to exceed available budgets, resulting in the need for higher-than-average rate increases. As project costs increase, the Utilities Department has addressed cost increases by trimming project scopes, deferring project delivery, and using alternative funding sources such as savings from projects that were underbudget and undesignated working capital.
Table 44 - Escalating Project Costs
Project Original
Estimate
Current Cost
Estimate
%
increase
Reservoir 2 Cover Replacement $960,000 ~$3,000,000 +213% Johnson Waterline Replacement $3,480,000 $5,010,000 +44% Replacement of Actiflo Mixer Gearboxes $245,000 $416,322 +70% Water Treatment Plant Facility Infrastructure
Renewal Strategy
$150,000 $451,111 +201%
These cost increases are reflected in various indices. One example is the year over year (YoY) increase in the Producer Price Index for plastic sewer, storm drain, and water main pipe. -10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2019 2020 2021 2022 2023
May YoY % Index Change by Year
Construction Cost Index Consumer Price Index Municipal Cost Index Producer Price Index 5‐year increase: 149%
Utilities Department
Figure 8 - Year-over-year Producer Price Index
Continued project deferrals and delays may cause issues in future years, when other high-value projects must be delayed.
Increasing Regulatory Requirements - Regulatory requirements for water conservation, groundwater management, and water and wastewater operations are often drivers of new or increased spending. For example, some of the following major expenses are directly tied to increased regulatory requirements:
a) The Water Resource Recovery Facility upgrade
b) Creation of a third Water Resources Technician position c) New permits and associated operating costs (i.e., MS4, NPDES, UCMR5) d) As regulatory requirements increase, the costs and operational complexities of providing water and wastewater services will also increase.
Table 45 - Utilities Department Performance Measures
Objective Measure 2022-23
Target
2022-23
Actual
Manage Assets Responsibly &
Transparently
Utilities Strategic Goal: Public
Stewardship
Grant and partnership dollars to be obtained to
offset rates $1,395,000 $1,658,716
Minimize number of Customers Shut-Off for
Nonpayment <450 352
Average Infrastructure Asset Age (years)29 19.92 21.45
# Unplanned Service Interruptions 30 0 8
29 Average asset age from City fixed assets data. This should decrease each year as assets are replaced. 30 This performance measure includes water main and service line outages, and sanitary sewer overflows. While the Department aims to minimize service interruptions, service interruptions are a byproduct of aging 0 50
100
150
200
250
300
2018 2019 2020 2021 2022
December YoY PPI Index
Commodity: Plastics sewer, stormdrain, and water main pipe Source: U.S. Bureau of Labor Statistics PPI Detailed report
Utilities Department
Objective Measure 2022-23
Target
2022-23
Actual
Connecting the Community to
High Quality & Reliable Service
Utilities Strategic Goal: Public
Service
# of Sewer Lateral Replacements including
Offsets 100 95
Recycled Water Delivered (AF) 325 23631
Foster Leadership,
productivity, and opportunity
for personal and professional
growth.
Utilities Strategic Goal:
Workforce
% of new/transferred employees who completed
safety trainings, assigned through CJPIA, within
30 days of hiring
100% 100%
Provide Coworkers and the
Community with Information &
Opportunities to Participate in
Decisions that Impact them.
Utilities Strategic Goal:
Communication
Public Outreach: # of Communications with the
Community32 200 196
Water Fund
Table 46 - Water Fund Operating Expenditure Analysis
Staffing – Salaries and benefits within the Water Fund were underspent by approximately $485,000 or 9% during FY 2022-23. These savings were largely the result of vacancies and substantial staff turnover at lower steps for the Water Treatment Plant, Water Distribution, Water Resources, and Administration and Engineering teams. The Water Treatment Plant also underspent its overtime budget, which had been
infrastructure. In an average year the City sees 60-80 unplanned interruptions. Most of these interruptions are related to water service line leaks, which only impact a single customer. 31 Currently, recycled water is exclusively used for landscape irrigation. An extremely wet winter resulted in less water demand for landscape irrigation.
32 Includes Facebook posts, blog posts, email bulletins, groundbreaking event, quarterly project reports, the Resource, website news articles, and bill inserts.
FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing $ 5,174,679 $ 5,484,670 $ 4,999,216 $ 485,454 9% $ 5,502,576 Contract Services $ 9,921,661 $ 11,960,958 $ 9,866,973 $ 2,093,985 18% $ 966,840 Other Operating Expenditures $ 955,013 $ 1,534,093 $ 1,186,567 $ 347,526 23% $ 1,589,739 Transfers Out $ 2,517,178 $ 2,311,753 $ 2,311,753 $ - 0% $ 2,826,143 Utilities $ 526,965 $ 698,125 $ 657,998 $ 40,127 6% $ 1,033,139 Debt Service $ 2,307,374 $ 2,442,558 $ 2,300,546 $ 142,012 6% $ 1,870,392 TOTAL $21,402,870 $ 24,432,158 $ 21,323,053 $ 3,109,105 13% $13,788,829 Water Fund Operating
Expenditures
FY 2022-23
Utilities Department –Water Fund
inflated in comparison with prior years to account for anticipated overtime associated with the Water Treatment Plant Energy Efficiency Project.
Contract Services – Approximately $1.8 million of the approximately $2.1 million unspent in the contract services budget 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 $11 million annually. The entirety of the amount unspent in the water supply account is tied to variable electricity and operating costs for the Nacimiento Reservoir. This discrepancy can be summarized by the following:
1. $915,000 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 from the prior fiscal year.
2. $580,000 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. Due to the winter storms, the Nacimiento pipeline was down for 5 months in FY 2022-23, which reduced actual costs associated with pumping.
3. $247,000 was carried over from FY 2021-22 for Nacimiento electrical pumping costs. This funding was not utilized in FY 2022-23.
In addition to the unspent funding outlined above, the Water Fund did not spend approximately $209,000 in miscellaneous consulting services. Most of the funding in this account is used for engineering, legal, or other related professional services. About $88,000 was underspent in Advertising and Public Outreach.
Following a dry FY 2021-22 and an executive order from the Governor of California in March 2022, the City had increased Advertising and Public Outreach to meet requirements that the City implement measures associated with Stage 2 requirements of the City’s Water Shortage Contingency Plan. A wet winter in FY 2022-23 alleviated ongoing drought concerns and resulted in the City removing many temporary water conservation requirements associated with Stage 2 of the City’s Water Shortage Contingency Plan, reducing the need for conservation-related outreach and its associated costs.
Other Operating Expenditures – Approximately $195,000 of the $350,000 unspent in other operating expenditures can be attributed to the chemical account. While chemical prices have risen sharply, chemical demand in FY 2022-23 was lower for the following reasons:
1. The City utilized more water from the Whale Rock Reservoir, which requires substantially less chemical treatment. The City used more water from the Whale Rock Reservoir, because:
a. Nacimiento pipeline was damaged for 5 months in FY 2022-23, which forced the use of alternative water sources.
b. The extremely wet weather in the winter of FY 2022-23 led to the Whale Rock Reservoir spilling for four months, which meant the City could utilize this water supply without drawing down reservoir levels.
2. The overall volume of water treated at the Water Treatment Plant was 6% lower in FY 2022-23 then FY 2021-22. This overall decrease results in less chemical demand.
In addition to the unspent funding outlined above, the Water Fund had $155,000 savings in the miscellaneous materials and supplies, safety materials and supplies, postage, construction materials and
Utilities Department –Water Fund
supplies, and education and training. The reasons for savings in these accounts are varied. Some of the more substantial savings are listed below:
1. One-time costs for self-contained breathing apparatuses (SCBAs) were 70% less expensive than previously anticipated. This resulted in $28,000 in savings.
2. $34,000 in savings on miscellaneous materials and supplies, such as maintenance supplies for valves, vaults, and pipes. This was due to a reduction in water mainline leaks in the second half of FY 2023.
3. Approximately, $37,000 in savings on postage due to the deferral of the Utilities Resource Newsletter and an increasingly computer savvy customer base transitioning to electronic billing.
Utilities – 68% (or $27,000) of the savings in this account are for electric service for the conveyance and treatment of water. In all, the $27,000 in savings for the electric service account, accounts for about 4% of the $656,000 budget in FY 2022-23. The remaining savings in the utilities budget are mostly for communications services. There was a carryover amount of $2,100 from FY 2021-22, which partially explains the savings. The communications services account will be monitored in FY 2023-24 for a possible midyear and budget supplement reductions.
Transfers out to General Fund – The transfers category represents transfers from the Water Fund to the General Fund for contributions to internal services and auxiliary services such as Human Resources, City Clerk, Information Technology, Public Works, etc. This is paid in arrears and calculated based on the previous fiscal year’s actuals; in this case FY 2021-22. There is no variance in this cost category.
Debt Service – The debt service category represents debt the Water Fund holds for financing capital projects. There is a $142,000 savings in the debt interest account due to amortization of bond premiums, discounts, and deferred amounts on refunding.
Table 47 - Water Fund Revenue
Water Fund revenues were $1.1 million less than budgeted. The primary reasons that Water Fund revenues were under budget are:
1. $750,000 under budget in long term debt proceeds due to capital project schedules and corresponding disbursements for the Water Treatment Energy Efficiency Project.
FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
1 Service Charges and Base Fees $ 24,074,968 $ 24,123,079 $ 23,297,077 $ (826,002) -3% $ 26,146,099 2 Development Impact Fees $ 5,162,275 $ 3,058,532 $ 3,614,800 $ 556,268 18% $ 800,000 3 COVID Rate Relief Program $ (225,016) $ - $ (53,940) $ (53,940) $ - 4 Other Revenue $ 461,096 $ 235,521 $ 466,983 $ 231,462 98% $ 139,000 5 State Grants $ 1,621,599 $ 963,449 $ 371,201 $ (592,247) -61% $ 697,500 6 Other Grants/Subventions $ 226,994 $ - $ 53,940 $ 53,940 $ - 7 Cal Poly Capacity & Resilience $ 114,317 $ 259,490 $ 233,025 $ (26,465) -10% $ 251,072 8 Investment and Property Revenue $ (749,398) $ 50,000 $ 355,331 $ 305,331 611% $ 50,000 9 Long Term Debt Proceeds $ 2,397,475 $ 872,574 $ 122,214 $ (750,360) -86% $ 872,574 10 Total $ 33,084,310 $ 29,562,644 $ 28,460,631 $(1,102,014) -4% $ 28,956,246 Water Fund Revenue FY 2022-23
Utilities Department –Water Fund
2. $592,000 under budget in state grants due to capital project schedules and corresponding disbursements for the Water Treatment Generator project and disbursements through California Office of Emergency Services (Cal OES).
3. $826,000 under budget in service charges and base fees due to a 9% reduction in water consumption.
Impact fees were $556,000 over budget, 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.
The investment and property revenue budget was reverted to a flat $50,000 due to market volatility and poor performance in FY 2021-22. In this business cycle, revenues exceeded this mark by $219,000. An additional fair market value adjustment amounted to $87,000 increase in investment and property revenue actuals for the Water Fund on existing investments. Budgets continue to reflect a cautious outlook in FY 2023-24 until the economy returns to a normal business cycle.
Cal Poly Capacity and Resilience revenue was underbudget because a $21,000 invoice for pumping charges was realized in FY 2021-22. In addition, Water Fund other revenue was over budget by $231,000 due to a combination of the following:
1. $84,000 overbudget for the low-income subsidy account. The Water Fund budgets -$100,000 in revenues for financial assistance administered through the Customer Assistance Program (CAP), which gives eligible customers a 15% discount. In FY 2022-23, the department administered $16,000 in financial assistance to 160 customers through the CAP. This resulted in $84,000 in budgeted revenues losses that were never realized. The Utilities Department will continue to look for opportunities to expand awareness of this program.
2. $54,000 overbudget in other grants/subventions for financial assistance for customers obtained through the Low-Income Households Water Assistance Program (LIHWAP).
3. $72,000 overbudget through EnelX, which compensates the Water Treatment Plant for ceasing electric consumption during extremely high peak demand periods.
4. $24,000 overbudget in utilities set-up fees due to an expanding customer base.
5. $51,000 overbudget in non-recurring citations, penalties, and other miscellaneous revenues 33.
FY 2022-23 Unaudited Ending Fund Balance34
Based on unaudited financials, the Water Fund will return $4,463,190 to working capital.
Figure 9 - FY 2022-23 Water Fund Summary
Water Fund Summary FY 2022-23 Amount
a) Revenue $ 28,460,631
b) Total Expenditures (c+d+e) $ 23,928,935
c) Operating Expenditures $ 19,022,507
33 These revenues include cost recovery for damage to City property, sale of scrap metal, citations, and other types of revenues that cannot reliably be accounted for on an annual basis. 34 These numbers are accurate as of August 17, 2023. When compared to audited financials values may vary based on any journal entries that may have been posted after this date.
Utilities Department –Water Fund
d) Capital Expenditures $ 2,605,882
e) Debt $ 2,300,546
Year-End Net Increase return to Working Capital (a-b) $ 4,531,696 Sewer Fund
Table 48 - Sewer Fund Operating Expenditure Analysis
Staffing – Salaries and benefits in the Sewer Fund were underspent by $540,000 (or 10%). $158,000 of the cost savings were due to a later than anticipated hire of a contract Wastewater Collection Operator and deferred hire of a WRRF Operator Intern. There was an additional $103,000 in the contingency expense account for salary negotiations, that was not adjusted when salary negotiations were completed.
The remaining savings were largely the result of vacancies and substantial staff turnover at lower steps for the Wastewater Collection, Water Resource Recovery Facility, Administration and Engineering, and Water Quality Lab teams.
Contract Services – Approximately $330,000 of the $446,000 underspent in the Sewer Fund’s Contract Services budget is due to delays in receiving the WRRF’s new National Pollutant Discharge Elimination (NPDES) permit. This permit was delayed due to external factors, not under the City’s control, including the new permit review and approval process. Staff utilize outside consultants during the le ngthy negotiation process of being issued new NPDES permits to ensure appropriate levels of regulatory compliance requirements. The reasons for the remaining $116,000 cost savings are varied. Some of the more substantial savings are listed below:
1. $20,000 delayed and reduced work related to wastewater collection system modeling.
2. $67,000 is tied to strategic underspending of advertising and public outreach as a contingency for potential electric service and chemical cost escalation.
3. $31,000 for deferred work with a contractor for pretreatment inspections of breweries.
4. $37,000 for deferred maintenance of assets that may be decommissioned or repurposed when the WRRF upgrade is completed.
Other Operating Expenditures – While the other operating expenditures accounts are mostly balanced, there was some strategic underspending that occurred to balance unanticipated overspending. The two primary accounts that were overspent are:
FY 2021-22 FY 2023-24
Actual Budget Actual
Funds
Available % Budget
Staffing $ 5,183,631 $ 5,470,802 $ 4,930,396 $ 540,406 10% $ 5,491,135 Contract Services $ 684,637 $ 1,500,542 $ 1,053,766 $ 446,776 30% $ 1,103,229 Other Operating Expenditures $ 1,445,312 $ 1,690,614 $ 1,572,907 $ 117,707 7% $ 1,528,601 Transfers Out $ 2,368,064 $ 2,573,783 $ 2,573,783 $ - 0% $ 3,104,155 Utilities $ 541,456 $ 942,423 $ 773,208 $ 169,215 18% $ 1,062,892 Debt Service $ 1,379,997 $ 1,380,938 $ 1,376,380 $ 4,558 0% $ 1,382,346 TOTAL $11,603,097 $ 13,559,102 $ 12,280,440 $ 1,278,662 9% $13,672,358 Sewer Fund Operating
Expenditures
FY 2022-23
Utilities Department –Sewer Fund
1. $71,000 over budget for regulatory fees. This was due to nitrate and disinfection byproduct violations. The WRRF Upgrades have addressed this issue and it should not recur going forward.
2. $11,000 over budget for chemicals. The liquids phase 1 stage of the WRRF upgrade was delayed by four months. Consequently, staff spent four months longer using the less chemical-efficient facility.
These over budget accounts were offset by electric service accounts, which were also under budget for the same delay as part of the WRRF upgrade. There were additional cost savings in deferred equipment maintenance supplies due to assets that may be decommissioned or repurposed when the WRRF upgrade is completed.
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) had been delayed. These savings were used to offset increases in chemical prices this year but will be needed when the new facility is commissioned.
Transfers out to General Fund – The transfers category represents transfers from the Sewer Fund to the General Fund for contributions to internal services and auxiliary services like Human Resources, City Clerk, Information Technology, Public Works, etc. This is paid in arrears and calculated based on the previous fiscal year’s actuals; in this case FY 2021-22. There is no variance in this cost category.
Debt Service – The debt service category represents debt the Sewer Fund holds for financing capital projects. There is $4,600 savings in the debt interest account due to amortization of bond premiums, discounts, and deferred amounts on refunding.
Table 49 - Sewer Fund Revenue
Sewer Fund revenues were under budget by $8.9 million. This variance can be explained by underrealized revenues in long term debt proceeds and grants, which are contingent upon capital project schedules and corresponding disbursements.
Long term debt proceeds were $9.7 million under budget because of shifting capital project schedules for the WRRF upgrade and associated disbursements. Last fiscal year, the Sewer Fund was $22.6 million overbudget in debt proceeds. With the WRRF upgrade project potentially reaching substantial completion in FY 2023-24, the budget will be adjusted at midyear to reflect actual costs of project delivery and FY 2021-22 FY 2023-24
Actual Budget Actual Variance % Budget
1 Service Charges and Base Fees $ 19,381,278 $ 18,634,189 $ 19,483,177 $ 848,988 5% $ 19,324,641 2 Development Impact Fees $ 3,825,751 $ 2,226,361 $ 1,968,592 $ (257,769) -12% $ 600,000 3 Other Revenue $ 605,981 $ 291,000 $ 319,724 $ 28,724 10% $ 224,000 4 State Grants $ 95,308 $ 1,386,153 $ 1,275,831 $ (110,321) -8% $ 1,386,153 5 Federal Stimulus Grants $ - $ - $ (42,256) $ (42,256) $ - 6 Cal Poly Capacity & Resilience $ 243,568 $ 243,568 $ 243,568 $ - 0% $ 472,534 7 Investment and Property Revenue $ (1,035,754) $ 50,000 $ 461,201 $ 411,201 822% $ 50,000 8 Long Term Debt Proceeds $ 46,555,923 $ 31,132,364 $ 21,384,848 $(9,747,516) -31% $ 31,132,364 9 Total $ 69,672,054 $ 53,963,635 $ 45,094,684 $(8,868,951) -16% $ 53,189,691 Sewer Fund Revenue FY 2022-23
Utilities Department –Sewer Fund
corresponding loan disbursements. Simultaneously, Federal Stimulus Grants were underbudget by $42,000 because the City had to return an overpayment tied to the COVID-19 wastewater arrearage program from October 2022. Additionally, state grants were $110,000 underbudget due to the project delivery timing for the WRRF upgrade and corresponding disbursements from Integrated Regional Water Management (IRWM) and Cal OES.
Sewer development impact fees were under budget by approximately $258,000, reflective of continued development in the City and unknowns associated with construction timelines. Sewer service charges and base fees were more than budgeted by $849,000. Sewer service charges are likely to reflect lower returns in FY23-24 as the City implements the sewer cap based on an uncharacteristically wet winter.
The investment and property revenue budget was reverted to a flat $50,000 due to market volatility and poor performance in FY 2021-22. In this business cycle, the Department exceeded this mark by $339,000.
An additional fair market value adjustment amounted to a $72,000 increase in investment and property revenue actuals for the Sewer Fund on existing investments. Budgets continue to reflect a conservative outlook in FY 2023-24 until the economy returns to a normal business cycle.
FY 2022-23 Unaudited Ending Fund Balance35
Based on unaudited financials, the Sewer Fund will return $1,290,011 to working capital.
Table 50 - FY 2022-23 Sewer Fund Summary
Sewer Fund Summary FY 2022-23 Amount
a) Revenue $ 45,094,684
b) Total Expenditures (c+d+e) $ 43,804,673
c) Operating Expenditures $ 10,904,060
d) Capital Expenditures $ 31,524,233
e) Debt $ 1,376,380
Year-End Net Increase return to Working Capital (a-b) $ 1,290,011
35 These numbers are accurate as of August 17, 2023. When compared to audited financials values may vary based on any journal entries that may have been posted after this date.
Utilities Department –Solid Waste Division (General Fund) Solid Waste – AB 939 General Fund
The Solid Waste program is funded by AB 939 funding, collected through the solid waste bills.
A Year In Review
The Solid Waste and Recycling Program (Program) successfully established core funding, staffing support, and program objectives over the past fiscal year. In accordance with SB 1383 requirements, the State’s most expansive solid waste legislation in over 30 years, the Program made significant progress in compliance efforts while its key external partner, the Integrated Waste Management Authority (IWMA), onboarded new executive leadership.
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 the Program’s establishment in 2019, it had been staffed by only one Solid Waste and Recycling Coordinator. To more effectively lead the regulatory programs necessary for compliance with State and regional law, the City added a Solid Waste and Recycling Program Manager position in FY 2022-23 that was approved through the supplemental budget and considered in the rate setting process.
Since securing funding for a second full-time City staff member as a part of the rate setting process, the Program hired a Solid Waste and Recycling Program Manager in November 2022 and hired a Solid Waste and Recycling Coordinator from a vacancy at the end of the fiscal year. With the new staffing, the Program has plans to achieve a high level of public outreach, complete large-scale and challenging projects, and work towards achieving Program related Climate Action Plan goals.
Accomplishments and Strategic Goal Updates
1. Compliance Efforts
a. AB 341: Mandatory Commercial Recycling - 100% compliance36 b. AB 1826: Mandatory Commercial Organics Recycling –100% compliance c. SB 1383: Short-Lived Climate Pollutants (Organics) –99% compliance
2. Obtained a competitive Cal Recycle Beverage Container Recycling Grant for $236,531 to order and install 30 dual stream Big Belly units (trash and recycling) with Wi-Fi and trash compacting capabilities for the downtown area.
3. Processed 640 construction and demolition waste management plans.
4. Secured 36 tons of compost for City use and to be made available to community members.
5. Utilized the preliminary work of developing a Municipal Operations Zero Waste Plan done by a CivicSpark Fellow in FY 2021-22 and selected a vendor for a Waste Characterization and Generation Study to determine baseline diversion and generation data at City facilities.
6. Ordered and installed organics recycling containers at highly rented and utilized indoor City facilities.
7. Conducted Summer Clean Up Week in partnership with San Luis Garbage and Cal Poly, removing 143 tons of materials from curbs and the public right of way.
36 Compliance efforts are monitored and measured through the SLO County Integrated Waste Management Authority and refers to the percentage of covered generators who are compliant with either a waiver or subscription to required services.
Utilities Department –Solid Waste Division (General Fund)
8. Facilitated a Storm Debris Drop-Off Program for residents to dispose of their storm-damaged debris from private property at no cost, resulting in a collection of over 19 tons.
Challenges
In FY 2022-23, the predominant challenges the Program experienced were staff recruitment and uncertainties with Integrated Waste Management Authority (IWMA) membership from other agencies.
The Solid Waste and Recycling Program Manager was hired in November 2022; however, the Solid Waste and Recycling Coordinator position was vacant for the remainder of the fiscal year, with a 0.75 FTE contract Coordinator providing assistance to the program. By the end of the fiscal year, a new, permanent coordinator had been hired.
The County’s withdrawal from the IWMA in November 2021 and leadership turnover led to increased City staff involvement in regional agency coordination and planning efforts. Fortunately, the Executive Director and Deputy Director roles at the IWMA were filled with permanent employees and greater agency efficiencies were identified. These efficiencies led to a one percent temporary decrease in the IWMA Solid Waste Management Fee for the upcoming fiscal-year. The County of San Luis Obispo officially showed intent to rejoin the IWMA, which could result in additional changes to the fee and an amendment to the Joint Powers Agreements adding the County back as a member agency.
Table 51 - Solid Waste Program Budget Variance Analysis
Staffing – The Solid Waste and Recycling Program Manager position was vacant for five months at the beginning of the fiscal year, and the Solid Waste and Recycling Coordinator position was vacant the entire fiscal year. A contract coordinator working 0.75 FTE filled the vacancy for the permanent coordinator, who was hired in July 2023. Substantial salary savings were realized for both the manager and coordinator positions.
Contract Services – The primary focus of the Program in FY 2022-23 was to maintain compliance with State recycling and organics legislation, such as SB 1383, and continue to complete large-scale projects.
Due to the vacancies, some projects were paused to be completed in the next fiscal year. Execution of time sensitive work efforts and training of backfill staff and new management meant that otherwise anticipated expenditures were delayed.
Despite the vacancies, the new program manager and contract coordinator completed or began numerous compliance and strategic goal objectives from budgeted and carry over funds. These include hiring a consultant for a City facility Waste Characterization and Generation Study to create a benchmark for the zero-waste component of the Lead by Example Plan, securing funds for targeted video advertisements for proper source separation, ordering professional trash, recycling, and organics FY 2021-22 FY 2023-24
Actual Budget Actual Funds
Available % Budget
Staffing $ 158,177 $ 296,053 $ 215,836 $ 80,217 27% $ 276,375 Contract Services $ 24,324 $ 128,088 $ 92,824 $ 35,264 28% $ 40,500 Other Operating Expenditures $ 3,381 $ 26,510 $ 18,109 $ 8,401 32% $ 22,544 TOTAL $ 185,882 $ 450,651 $ 326,768 $ 123,883 27% $ 339,419 Solid Waste
FY 2022-23