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Home My WebLink AboutCC 2026-01-27_11b City Council Goals and PrioritiesItem 11.b. MEMORANDUM TO: City Council FROM: Matthew Downing, City Manager BY: Aleah Bergam, Management Analyst SUBJECT: Update on City Council Goals and Priorities DATE: January 27, 2026 RECOMMENDATION: Receive an update regarding progress made toward meeting the City Council’s Goals and Priorities for Fiscal Year 2025-27 (July 1, 2025 through December 31, 2025). IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: There are no financial impacts associated with the receipt of the update regarding progress toward meeting the Goals and Priorities for FY 2025-27. Any fiscal impacts associated with the implementation of Goals and Priorities will be analyzed at the time actionable items are brought to the City Council for consideration. BACKGROUND: Every two years, staff and the City Council prepare a Biennial Budget document, which commits government resources and services to accomplish the City’s mission of making Arroyo Grande the best place possible for everyone who lives, works, and visits here. As part of the budgeting process, the City utilizes a thoughtful process to establish the City’s focus and priorities, culminating in the City Council determining goals for th e following two-year period. These goals become the foundation upon which staff prepare the Biennial Budget. On March 11, 20251, the City Council considered and approved a list of Goals and Priorities for FY 2025-27 to help direct the work of the City during the biennial budget cycle. The identified Goals and Priorities are outlined below. This report provides an update regarding the City’s progress throughout 2025, with an emphasis on completing the identified Goals and Priorities for FY 2025-27 (July 1, 2025, through December 31, 2025). This also provides an opportunity for the public to learn of the City’s progress and 1 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=14042 Page 166 of 175 Item 11.b. City Council Update on City Council Goals and Priorities January 27, 2026 Page 2 share input with the City Council on any of the Goals and Priorities or for consideration of any additional direction to staff. Major City Goals The City Council has set five goals for the City for Fiscal Years 2025-27. Goal #1: Pursue New Revenue Sources Strategies for the next two years:  Revenue Generation  Consider Cannabis as a Means of Economic Development  Transient Occupancy Tax Changes Goal #2: Achieve Water Resilience Strategies for the next two years:  Pursue 2026 State Water Ballot Measure  Seek new Water Sources  Work with Regional Partners to Preserve Current Water Sources Goal #3: Implement Road and Sidewalk Improvements Strategies for the next two years:  Prioritize Key Infrastructure Projects  Pursue Alternative Funding Sources for Infrastructure Needs Goal #4: Complete the General Plan Update Strategies for the next two years:  Economic Development Tasks  General Plan Elements  Environmental Impact Report  Code Update  Climate Action Plan Page 167 of 175 Item 11.b. City Council Update on City Council Goals and Priorities January 27, 2026 Page 3 ANALYSIS OF ISSUES: While each of the goals is large and complex, staff is pleased to report that substantial progress has been made in many areas. Below is additional information and details of each goal accompanied by major accomplishments toward meeting those goals. Additional information regarding the status of work toward meeting the Goals and Priorities is included in Attachment 1. Review of Major City Goals Goal #1: Pursue New Revenue Sources Strategy: Revenue Generation  The City Council held a Pre-Application hearing for the proposed hotel development at 400 W. Branch Street and supported continued work with the developer.  Staff continued working with the developer of the proposed hotel to identify information necessary to achieve a complete development application .  Staff are currently working with regional partners on potential new events to drive visitation during shoulder and winter months, as well as build destination awareness.  Staff worked with the South County Chamber of Commerce to implement a Buy Local Program to support businesses during the construction of the Traffic Way Bridge Replacement Project, which led to over 930 submissions and $179,388.49 in direct sales to local merchants. Strategy: Consider Cannabis as a Means of Economic Development  At the December 9, 2025 Council Meeting2, the City Council conducted a Study Session on Cannabis Policy Regulation. At that meeting, City Council directed staff to move forward with preparing items for Council consideration to place a 2https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=16587 Goal #5: Redevelop the East Grand Avenue Corridor (Halcyon Road to Elm Street) Strategies for the next two years:  Scope of Work and RFP  Kick Off and Public Outreach  CEQA  Plan Draft  Final Draft and Hearings Page 168 of 175 Item 11.b. City Council Update on City Council Goals and Priorities January 27, 2026 Page 4 cannabis-related tax measure on the November 3, 2026, ballot to generate discretionary revenue for City services and infrastructure.  At the Study Session, Council provided direction to staff that a development agreement approach would not be in lieu of a cannabis tax, but may be in addition to a general cannabis tax. Strategy: Transient Occupancy Tax Changes  At the August 26, 2025, Council Meeting3, the City Council adopted Ordinance No. 2025-008 amending Chapter 3.46 of the Arroyo Grande Municipal Code regarding the authorized improvements and activities to be funded by assessments imposed through the Arroyo Grande Tourism Business Improvement District.  At the January 13, 2026, Council Meeting4, the City Council conducted a Study Session on a potential TOT ballot measure and potential opportunities related to the AGTBID. Council directed staff not to move forward with an increase to the AGTBID lodging partners at this time, and to consider a potential TOT Ballot Measure in a future election cycle. Goal #2: Achieve Water Resilience Strategy: Pursue 2026 State Water Ballot Measure  Staff will be coming to Council in the coming months to get direction on putting a State Water Ballot Measure on the November 2026 Ballot. This would allow the City the ability to purchase state water any time not just during a declared water shortage emergency. Strategy: Seek new Water Sources  The City is currently conducting a water and wastewater Financial Plan update to adjust rates based on changes to water supply, Lopez Litigation impacts, and changing or new regional partnerships.  The City is looking at possible state water options that may be available with state water contractors in San Luis Obispo County and Santa Barbara County. Strategy: Work with Regional Partners  Significant time has been spent by City management working with the County of San Luis Obispo on the Lopez litigation.  Staff worked with a consultant to develop a webpage to ensure the public has access to the latest Lopez litigation news, at www.arroyogrande.org/lopezlakelitigation5.  Staff continues to participate with NCMA partners on Management Agreement Amendments. 3 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=15706 4 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=16799 5 https://www.arroyogrande.org/889/Lopez-Lake-Water-Release-Litigation Page 169 of 175 Item 11.b. City Council Update on City Council Goals and Priorities January 27, 2026 Page 5  Staff has started working with Golden State Water Co. on a possible interconnector with the City.  The City is actively participating in the San Luis Obispo County Regional Desalination Plant Study. Goal #3: Implement Road and Sidewalk Improvements Strategy: Prioritize Key Infrastructure Projects  The City Council adopted the Plan for Pavement Management for the maintenance of all City streets over the next 13 years.  The 2025 Pavement Management Program is currently in design.  Staff developed an updated sidewalk management program to prioritize sidewalk improvements throughout the city, which was adopted by the City Council.  The City Council adopted the 2025 ADA Transition Plan.  The Traffic Way Bridge Replacement Project has been substantially completed, detours have been removed, and the bridge is open to the public. The project was completed on time and on budget.  The City has entered into a contract for construction of concrete repair work, including sidewalk repairs, which is in progress.  Construction documents for the Halcyon Road Complete Streets Project were developed to the 60% review phase, and the City Council provided direction to staff regarding trees and parking considerations to help finalize construction documents in the near future.  Easements and right-of-way have been obtained from necessary properties to implement the Halcyon Road Complete Streets Project.  Replacement of Traffic Safety Guardrails throughout the City has been completed.  The biennial Corrugated Metal Pipe (CMP) lining project has been completed.  The Cornwall Avenue Watermain Replacement Project was completed. Strategy: Pursue Alternative Funding Sources for Infrastructure Fu nding  The City has entered into a contract with Townsend Public Affairs, Inc. for legislative advocacy and grant writing. The firm has already submitted one grant application, and staff anticipates more grant submissions in the coming months. Goal #4: Complete the General Plan Update Strategy: General Plan Elements  The Preliminary Public Draft of the General Plan was released on November 19, 2025. Two outreach events were held the week of December 1, 2025, including a study session with the Planning Commission and a public workshop to obtain community feedback.  The Planning Commission made recommendations for the City Council’s consideration at an upcoming study session, scheduled for February 24, 2026. Page 170 of 175 Item 11.b. City Council Update on City Council Goals and Priorities January 27, 2026 Page 6 Strategy: Climate Action Plan  Two foundational documents for the Climate Action Plan are currently under review by staff. The Greenhouse Gas (GHG) Emissions Inventory Report (Inventory Report) was prepared to assess emissions within city limits and serves as the foundation for forecasting and setting reduction targets in the updated CAP. Other  The City Council adopted a preferred land use scenario for the General Plan Update. Goal #5: Redevelop the East Grand Avenue Corridor (Halcyon Road to Elm Street) Strategy: Scope of Work and RFP  Staff worked as part of an interdepartmental team to develop and refine a scope of work and anticipate release in the near future. Other Administrative Accomplishments In addition to making substantial progress on the City Council’s goals, staff has made noteworthy progress in other administrative areas, including:  The City Council held a Goal Setting Workshop and identified the five goals identified above for the FY 2025-27 Budget  Staff negotiated a new lease with a local Italian restaurant for continued use of City property for their outdoor patio  Staff Completed the implementation of a new payroll system and human resources management system  The City reinvigorated the staff Safety Committee, who is responsible for o ngoing implementation of Risk Management Evaluation recommendations  Staff initiated a Classification and Compensation study  Staff implemented a robust communications strategy for the Traffic Way Bridge Replacement Project  Staff implemented ADA tools and launched a refreshed City website with g reater functionality  Staff managed upgrades to the City’s Emergency Operations Center to replace outdated equipment and implement current technology  Staff installed water bottle filling stations utilizing a $10,000 grant from the Integrated Waste Management Authority  The City Council adopted updates to the City’s Wireless Telecommunication Facilities regulations in response to changes in technology  The City Council adopted the City’s first Active Transportation Plan  In response to City Council direction, staff created the Measure E-24 Citizen Sales Tax Oversight Committee  The City Council adopted updates to the City’s Water Well regulations Page 171 of 175 Item 11.b. City Council Update on City Council Goals and Priorities January 27, 2026 Page 7  Staff coordinated with the County of San Luis Obispo for consistent animal regulations  Staff presented the City’s first workforce vacancy, recruitment, and retention trends compliance report in accordance with Assembly Bill 2561  Staff and the Council developed the Biennial Budget with an expanded, accessible format and a Ten-Year Capital Improvement Program  The City Council adopted updated State Fire Hazard Severity Zone Maps in accordance with state law  The City Council adopted Revision 4 of the Sewer System Management Plan  Staff secured an $80,000 grant from the California Office of Traffic Safety for traffic safety programs  A new lease agreement for existing parking in the Village was negotiated and approved  Staff completed the triennial update to the California Building Standard Code  The franchise agreement with Phillips 66 was updated and renewed  Staff executed an agreement with FlashVote to conduct statistically valid surveys in the city and conducted three surveys in 2025  Staff began the migration of City records to SharePoint  The Parkside Park Play Structure Replacement Project has been completed.  The City Manager appointed a new Chief of Police following a national recruitment process, which has also led to 4 department promotions.  The Police Department has implemented new technologies to manage records, property & evidence, personnel files, investigations, and improve radio communications.  In collaboration with City staff and the San Luis Obispo Fire Safe Council, the Five Cities Fire Authority (FCFA) completed three Hazardous Fuel Reduction projects within the city.  The FCFA additionally deployed personnel and provided incident support of the Madre and Gifford Fires. ALTERNATIVES: The following alternatives are provided for the Council’s consideration: 1. Receive an update regarding progress toward the Goals and Priorities for FY 2025- 27; or 2. Provide other direction to staff. ADVANTAGES: Receiving the status report on the Goals and Priorities for FY 2025-27 provides an update to the City Council and the public on the City’s efforts toward completing and accomplishing a number of vital work efforts. DISADVANTAGES: There are no disadvantages at this time. Page 172 of 175 Item 11.b. City Council Update on City Council Goals and Priorities January 27, 2026 Page 8 ENVIRONMENTAL REVIEW: Receiving an update on FY 2025-27 Council Goals and Priorities is not a project subject to the California Environmental Quality Act (“CEQA”) because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd. (b)(2)-(3), 15378.) Alternatively, receiving an update on FY 2025-27 Council Goals and Priorities is exempt from CEQA on the basis that it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. (State CEQA Guidelines, § 15061, subd. (b)(3).) PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2. ATTACHMENTS: 1. Goals and Priorities for FY 2025-27 Status Update Page 173 of 175 Goal Strategy Task/Action Carryover Action or New Responsible Department Anticipated to Start Completion Target Update 1.1 Revenue Generation 1.1a 400 W. Branch Disposition and Development Agreement Carryover CMO/CA/CD In Progress 1Q FY 2026-27 In Progress Pursue New Revenue Sources 1.1b Develop a Special Event that drives visitation during shoulder and winter months and build destination awareness Carryover Rec In Progress 4Q FY 2025-26 In Progress 1.1c Develop an Economic Development Program New CMO 1Q FY 2025-26 4Q FY 2025-26 In Progress 1.2 Consider Cannabis as a Means of Economic Development 1.2a Evaluate cannabis operations that bring in revenue New CD/CMO 1Q FY 2025-26 2Q FY 2025-26 In Progress 1.2b Conduct study session with the City Council regarding potential cannabis ordinance Carryover CD/CA/CMO/LIS 3Q FY 2025-26 3Q FY 2025-26 Completed 1.2c Conduct study session with the City Council regarding potential cannabis development agreement Carryover CD/CA/CMO/LIS 4Q FY 2025-26 4Q FY 2025-26 Not Started 1.2d Prepare and adopt cannabis ordinance, if directed by the City Council Carryover CD/CA/CMO 4Q FY 2025-26 1Q FY 2026-27 Not Started 1.2e Evaluate feasibility of a Cannabis Tax, if directed Carryover CD/AS/CA/CMO 4Q FY 2025-26 1Q FY 2026-27 Completed 1.3 Transient Occupany Tax Changes 1.3a Work on changes to TBID ordinance for expanded use of TOT funds New CMO/Rec/LIS 1Q FY 2025-26 1Q FY 2025-26 Completed 1.3b Bring changes to TBID assessment and ordinance to Council for approval New CMO/Rec/LIS 1Q FY 2025-26 1Q FY 2025-26 Completed 1.3c Evaluate opportunities related to City TBID and potential TOT Measure New CMO/Rec/LIS In Progress 4Q FY 2024-25 Completed 1.3d Hold study session with City Council and visitor serving accomodations to eliminate TBID New CMO/Rec/LIS 1Q FY 2025-26 1Q FY 2025-26 Completed 1.3e If directed by Council, issue RFP for consultant to develop a survey and outreach strategy to community for TOT New CMO/LIS 1Q FY 2025-26 2Q FY 2025-26 Council Directed not to Move Forward 1.3f Award contract for consultant to survey and develop outreach strategy for TOT New CMO/LIS 2Q FY 2025-26 2Q FY 2025-26 Council Directed not to Move Forward 1.3g Conduct public education regarding need for TOT New CMO/LIS 2Q FY 2025-26 2Q FY 2026-27 Council Directed not to Move Forward 1.3h Bring TOT measure to City Council for consideration of placing on the November 2026 ballot New CMO/Rec/LIS 4Q FY 2025-26 4Q FY 2025-26 Completed 2.1 Pursue 2026 State Water Ballot Measure 2.1a Meet with Department of Public Works at the County of San Luis Obispo to begin discussion surrounding purchasing some allocated State Water New CMO/PW 4Q FY 2024-25 1Q FY 2025-26 In Progress Achieve Water Resilience 2.1b If directed by Council, Issue an RFP for a Consultant to evaluate feasibility of State Water Ballot Measure New CMO/PW/LIS 1Q FY 2025-26 1Q FY 2025-26 Not Started 2.1c Award bid to consultant and begin public outreach and community messaging regarding a potential State Water Ballot Measure New CMO/PW/LIS 2Q FY 2025-26 2Q FY 2026-27 Not Started 2.1d Seek Council approval on placing a November Ballot Measure New CMO/PW/LIS 4Q FY 2025-26 4Q FY 2025-26 Not Started 2.2 Seek new Water Sources 2.2a Identify opportunities and constraints associated with new Water Sources New CMO/PW In Progress Ongoing Ongoing 2.2b Support ongoing development and financing of regional water solution New CMO/PW In Progress Ongoing Ongoing 2.2c Conduct a water and wastewater rate study to adjust rates based on changes to water supply and changing or new regional partnerships New AS/PW 1Q FY 2025-26 4Q FY 2026-27 In Progress 2.3 Work with Regional Partners 2.3a Preserve Lopez water supply by working with the County on Lopez litigation New CMO/PW/CA In progress Ongoing Ongoing 2.3b NCMA Management Agreement Amendments Carryover PW In progress Ongoing Ongoing FY 2025-27 City Council Goal's Work Plan (Q2 Status Update 7/1/2025-12/31/2025) Attachment 1 Page 174 of 175 Goal Strategy Task/Action Carryover Action or New Responsible Department Anticipated to Start Completion Target Update FY 2025-27 City Council Goal's Work Plan (Q2 Status Update 7/1/2025-12/31/2025) Implement Road and Sidewalk Improvements 3.1 Prioritize Key Infrastructure Projects 3.1a 2025 Pavement Management Program Construction New PW 4Q FY 2025-26 1Q FY 2026-27 In Progress 3.1b Traffic Way Bridge Replacement Project Carryover PW In progress 3Q FY 2025-26 In Progress 3.1c Halcyon Complete Streets Design and Construction Carryover PW In progress 4Q FY 2026-27 In Progress 3.1d Concrete Repair Program Carryover PW 3Q FY 2025-26 Ongoing In Progress 3.1e CMP Lining Carryover CD/PW Completed 2Q FY 2025-26 Completed 3.2 Pursue Alternative Funding Sources for Infrastructure Funding 3.2a Pursue Grant applications and administration for infrastructure projects Carryover PW/CD/AS In progress Ongoing Ongoing 4.1 Economic Development Tasks 4.1a Retail Market Analysis Carryover CD 4Q FY 2024-25 1Q FY 2025-26 Completed 4.1b Market Demand Studies Carryover CD 4Q FY 2024-25 1Q FY 2025-26 Completed 4.2 General Plan Elements 4.2a Land and Safety Analysis Carryover CD 3Q FY 2023-24 2Q FY 2025-26 In Progress 4.2b Administrative Draft Carryover CD In Progress 4.3 EIR 4.3a Complete draft EIR Carryover CD 1Q FY 2025-26 3Q FY 2025-26 Not Started 4.3b Complete final EIR Carryover CD 3Q FY 2024-25 4Q FY 2025-26 Not Started 4.4 Code Update 4.4a Kick off code update Carryover CD/LIS Not Started 4.4b Bring code changes to Planning Commission for approval Carryover CD 3Q FY 2025-26 3Q FY 2025-26 Not Started 4.4c Bring draft Ordinance of code revision update to Council Carryover CD 4Q FY 2025-26 4Q FY 2025-26 Not Started 4.5 Climate Action Plan 4.5a Kick off CAP and research Carryover CD 1Q FY 2025-26 4Q FY 2025-26 In Progress 4.5b Admin Draft Carryover CD 4Q FY 2025-26 2Q FY 2026-27 Not Started 4.5c Final CAP Carryover CD 2Q FY 2026-27 3Q FY 2026-27 Not Started 5.1 Scope of Work and RFP 5.1a Define scope, research other communities New CD 4Q FY 2024-25 3Q FY 2025-26 In Progress 5.2 Kick Off and Public Outreach 5.2a Kick Off New CD 1Q FY 2025-26 3Q FY 2025-26 Not Started 5.2b Public Outreach New CD Ongoing Ongoing Not Started 5.3 CEQA 5.3a Environmental Review New CD 2Q FY 2025-26 3Q FY 2025-26 Not Started 5.4 Plan Draft 5.4a Administrative Draft Plan New CD 3Q FY 2025-26 1Q FY 2026-27 Not Started 5.5 Final Draft and Hearings 5.5a Final Draft New CD 4Q FY 2025-26 1Q FY 2026-27 Not Started 5.5b Planning Commission Hearings New CD 1Q FY 2026-27 2Q FY 2026-27 Not Started 5.5c City Council Hearings New CD 2Q FY 2026-27 2Q FY 2026-27 Not Started CMO AS LIS PD PW Rec Fire CD Legislative and Information Services Police Department Public Works Recreation Services Five Cities Fire Authority Community Development Complete the General Plan Update Redevelop the East Grand Avenue Corridor (Halcyon Road to Elm Street) Key City Manager's Office Administrative Services Attachment 1 Page 175 of 175