CC 2023-12-23_09.c. First Quarter Status Report 2023-24Item 9.c.
MEMORANDUM
TO: City Council
FROM: Nicole Valentine, Administrative Services Director
SUBJECT: Consideration of Fiscal Year 2023-24 First Quarter Status Report and
Request to Approve Fifteen Budget Adjustment Requests
DATE: December 12, 2023
SUMMARY OF ACTION:
Consider, receive, and file the Fiscal Year (FY) 2023-24 First Quarter Financial Status
Report and approve fifteen (15) Budget Adjustment Requests.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
Preparation of the First Quarter Financial Status Report requires staff time within the
existing work plan and budget for the Administrative Services Department. At the end of
the first quarter, FY 2023-24 revenues for the Consolidated General Fund were $2.6
million, or two percent (2%), below than the Budget Target (“Target”). Actual Expenditures
were $7 million, and below the Budget Target by approximately $1.5 million, or six percent
(6%).
The City Council is being asked to approve fifteen budget adjustments. The overall impact
to the budget is an increase in Consolidated General Fund expenditures of $180,633, in
Water Fund expenditures of $200,271, and in Water Availability Fund expenditures of
$24,900, as reflected in the following table 1:
Page 23 of 301
Item 9.c.
City Council
Consideration of Fiscal Year 2023-24 First Quarter Status Report and Request to
Approve Fifteen Budget Adjustment Requests
December 12, 2023
Page 2
Table 1 – First Quarter Budget Adjustment Request
RECOMMENDATION:
Consider, receive, and file the FY 2023-24 First Quarter Financial Status Report; and
approve fif teen Budget Adjustment Requests.
BACKGROUND:
Each fiscal year the City Council adopts a budget, 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. The First Quarter Financial Status
Report is the first of four financial performance reports that staff will present to Council
during the 2023-24 fiscal year. The purpose of the FY 2023-24 First Quarter Financial
Status Report is to:
Compare first quarter revenues received and expenditures incurred to the first
quarter of the prior year and to the budgeted Target to determine the City’s financial
performance;
Provide explanations for key account variances and identify any potential trends
that might impact financial planning; and
Request Revenue Expenditure
General
Fund
Water Fund
Impact
Water Availability
Fund Impact
Carryover OTS Grant for Traffic/DUI
Enforcement 22,824 22,824 - - -
Carryover Retraining Scholarship
Program 21,500 21,500 - - -
Carryover F250 Replacement Public
Works Truck - 78,433 78,433 - -
Carryover User Fees & DIF
Contractual Services - 27,200 27,200 - -
Carryover Cash for Grass Program - 24,900 - - 24,900
CDBG Grant increase 7,958 7,958 - - -
Reallocate Vehicle Replacement
Funding towards Mower - 50,000 - - -
Reallocate Salary Savings to
Contractual Services for CIP - 60,000 - - -
Tree Removal Support - 50,000 50,000 - -
Increased need to fill Potholes - 10,000 10,000 - -
Village Sign at Traffic Way & Branch - 15,000 15,000 - -
Community Development Intern - 10,000 - - -
Central Coast Blue (CCB)
Operating Costs - 28,971 - 28,971 -
Phased Main Replacement at
Cornwall Avenue, from Rena to El
Camino Real (ECR)- 171,300 - 171,300 -
Totals 52,282 578,086 180,633 200,271 24,900
Page 24 of 301
Item 9.c.
City Council
Consideration of Fiscal Year 2023-24 First Quarter Status Report and Request to
Approve Fifteen Budget Adjustment Requests
December 12, 2023
Page 3
Provide other key first quarter information including headcount statistics, status of
Capital Improvement Projects, and requests for City Council’s approval of Budget
Adjustment Requests that have not previously been approved.
The City’s actual first quarter financial results will be compared to both the prior year’s
first quarter and the budgeted Target. The Target for expenditures is calculated as one
fourth (25%) of the FY 2023-24 Budget and represents the 3-month period from July 2023
through September 2023, except for the Non-Departmental Annual Payments line that
has a Target of the full budget. This approach increases the expenditure Target from 25%
to 33% for the first quarter. The Target for revenues does not use the 25% Target but a
Target of 12.4% that more accurately reflects the anticipated revenues to be received in
the first quarter of the fiscal year. Using the Target as a comparator against actual results
provides a simplified method to evaluate performance for the quarter.
The First Quarter Report also includes a section regarding Budget Adjustments Requests.
This section summarizes individual budget adjustments approved by the City Council
during the first quarter, as well as administrative adjustments completed by City staff.
Additionally, this section of the report includes new Budget Adjustment Requests not
otherwise addressed in past, individual City Council agenda items. Approval will enable
the City to complete important work items and meet the needs of the community.
AN ALYSIS OF ISSUES:
First Quarter (Q1) Revenue and Expenditures Compared to Prior Year
Table 2 - Current Year Q1 Actuals Compared to Prior Year Q1 Actuals
The Consolidated General Fund shown in Table 2 is the primary operating fund of the
City and accounts for resources and services traditionally associated with government.
The Consolidated General Fund provides administrative, financial, police protection,
community development, public works, fire, and recreation services to the community and
other funds. The Consolidated General Fund accounts for revenues that have
unrestricted uses and are not required legally or by contractual agreement to be
accounted for in another fund. The City has historically reported on the Consolidated
General Fund separately from the Local Sales Tax Fund, although the City’s auditors
traditionally combine this information in the Annual Comprehensive Financial Report
(ACFR). The Local Sales Tax Fund accounts for the revenues derived from Measure O -
06, a local 1/2% sales tax approved by the City's voters in November 2006. Measure O -
06 included advisory measures when passed, providing direction on the uses to which
First Quarter
FY 2023-24
First Quarter
FY 2022-23 Variance
Revenue 2,554,661$ 2,264,418$ 290,243$
Expenditures 7,024,105$ 6,557,687$ 466,418$
Consolidated General Fund
Page 25 of 301
Item 9.c.
City Council
Consideration of Fiscal Year 2023-24 First Quarter Status Report and Request to
Approve Fifteen Budget Adjustment Requests
December 12, 2023
Page 4
the funding should be allocated. To ensure accountability, the measure included a
provision requiring the City to publish and distribute an annual report to each household
on the revenues and expenditures from the sales tax proceeds. To aid in the collection
and reporting of this information, the City has accounted for this fund in a separate
account. This report will present information for the Consolidated General Fund that
includes Local Sales Tax Fund Measure O-06 revenues and expenditures. Consolidated
General Fund revenues at the first quarter of this year were approximately $290,243
higher than the first quarter of the prior year. Expenditures were approximately $466,418
higher at the end of the first quarter of the current fiscal year versus the first quarter of the
prior year. A more thorough explanation of first quarter variances is set forth in the
attached financial report. The following is a summary of the first quarter variances
between the two fiscal years.
Revenue (approximately $290,243 higher)
The majority of the $290,243 variance between the first quarter of this year and the prior
first quarter is related to the increase in User Fees received in the first quarter of FY 2023-
24 when compared to the first quarter of FY 2022-23.
Expenditures (approximately $466,418 higher)
As mentioned, first quarter expenditures compared to the prior year were higher by
$466,418. The majority of the variance between the two fiscal quarters is related to
increased costs of one-time payments for Liability and Property Insurance, CalPERS
Unfunded Accrued Liability, and Workers Compensation.
First Quarter (Q1) Revenue and Expenditures Compared to Target
Table 3 - Current Year Q1 Actuals Compared to Target
Table 3 above compares first quarter actual results to the budgeted Target. First Quarter
actual revenue was short of the Target by $505,338. First Quarter actual expenditures
were short of the Target by approximately $1.5 million. The following is a summary of the
first quarter revenue and expenditure variances compared to the budgeted Target. A
more thorough explanation of first quarter variances is set forth in the attached financial
report.
Revenue ($505,338 lower)
The actual first quarter Consolidated General Fund revenue shortfall compared to the
Target is not unusual. Revenue realization is typically low in the first quarter of the fiscal
FY 2023-24
First Quarter Target
FY 2023-24
First Quarter Actuals Variance
Revenue 3,059,999$ 2,554,661$ (505,338)$
Expenditures 8,512,078$ 7,024,105$ (1,487,973)$
Consolidated General Fund
Page 26 of 301
Item 9.c.
City Council
Consideration of Fiscal Year 2023-24 First Quarter Status Report and Request to
Approve Fifteen Budget Adjustment Requests
December 12, 2023
Page 5
year due to the time lag involved in billing cycles and the receipt of reimbursements. Some
of the larger revenue variances are explained below.
The largest single source of City revenue is Secured Property Tax. Secured
Property Tax is billed by the County to property owners and payable in two (2)
installments. Property owners typically receive their second property tax bill at the
end of September or early October, with a due date of November 1st. Most of the
property tax related to the first installment was received in December, 2022. The
second installment is due on April 1st and will be reflected in the fourth quarter
report. The revenue Target includes the equivalent of one month of property tax
revenue, but actuals were still lower than this conservative revenue assumption
by $490,477.
Transient Occupancy Tax (TOT) revenue reflects a $37,349 favorable variance to
the Target. The Target and actual TOT revenue represents only two months of
TOT receipts due to the timing of payments. Lodging facilities have thirty days
after the month’s end to make their TOT payments.
Other revenue is made up of Business License Tax, Fines, Intergovernmental
Income, Other Charges for Service, and Other Revenues. The actual revenue in
this category is lower than the Target by $129,853. The largest variance in this
category is related to three revenue accounts. The revenue from other
government agencies accounts for the SB 1090 funds earmarked for use of the
general plan update. Once these funds are spent for this project, the revenue will
be recognized at that time.
Expenditures (approximately $1.5 million lower)
Actual first quarter expenditures were $1,487,973 under the Target, though all City
departments were under their spending Targets, except for Recreation Services and
Administrative Services. Some of the more significant savings occurred in the Measure
O-06 Sales & Use Tax Fund, City Administration, Police, Public Works, and Community
Development Departments. The first quarter report provided in Attachment 1 includes
greater detail regarding the causes for the expenditure variances in these departments.
The first quarter report provided in Attachment 1, Section 5, includes a new update on the
Goal Status Reports to Council, that includes City’s progress towards completing Major
City Goals and City’s Capital Improvement Plan. This information is provided to keep the
Council apprised of the status of the Goal Status Reports and includes progress towards
completing Major City Goals and Capital Improvement Plan.
Budget Adjustments
One of the purposes of the First Quarter Financial Status report is to recommend the re-
appropriation (carryovers) of prior year budgets for services/products that were begun,
but not completed, as of June 30, 2023. These requested carryovers do not include capital
improvement projects. Each year, the City Council adopts a budget which commits
Page 27 of 301
Item 9.c.
City Council
Consideration of Fiscal Year 2023-24 First Quarter Status Report and Request to
Approve Fifteen Budget Adjustment Requests
December 12, 2023
Page 6
resources to the Capital Improvement Program (CIP) that addresses infrastructure
maintenance and improvements throughout the City. The CIP is funded through a variety
of sources including significant grants and transfers from other funds. CIP funds do not
have annual appropriated budgets. Control over capital projects is maintained by a
project-length CIP budget. This project-length budget authorizes total expenditures over
the duration of a construction project, rather than year by year. A detailed accounting by
Project is included in Attachment 1 for information purposes.
Staff identified five projects that were budgeted in FY 2022 -23 and were not completed in
that fiscal year but are expected to be completed in the current fiscal year. It is requested
that the following carryover budget adjustments be approved:
Police Department: Carryover $22,824 related to the Office of Traffic Safety (OTS)
Grant for Traffic/DUI Enforcement Program. This Grant program operates from
October 1, 2022 through September 30, 2023. This carryover is due to the
misalignment of the program year ending in September, but budgeted in FY 2022-
23. The invoice for July 1 through September 30, 2023, was submitted totaling
$22,824, and is anticipated to be received within the next few weeks.
City Council: Carryover $21,500 for the retraining scholarship program , funded
using SB 1090 funds. This program was approved at the March 9, 2021 City
Council meeting, Item 10.a. The original approval was for $40,000. In FY 2021-22,
$15,000 was spent and in FY 2022-23, $3,500 was spent. This program is
administered by the South County Chamber of Commerce in partnership with SLO
Partners. The Chamber is continuing to process scholarships throughout this
Fiscal Year as needs arise.
Public Works Department: Carryover $78,433 for the purchase of an F250
Replacement Truck. This replacement vehicle purchase was placed in November
of 2022, but was not received until July of 2023.
Administrative Services Department: Carryover $27,000 for the User Fee and
Development Impact Fee studies. The User Fee study was completed in the
second quarter of FY 2023-24 and it is anticipated that the Development Impact
Fee study will be completed in the third quarter of FY 2023-24.
Public Works Department: Carryover $24,971 for the Cash for Grass program from
the Water Availability Special Revenue Fund that has been allocated to residents
participating in the program but has not been processed for payment related to
completion of work in FY 2022-23.
Nine additional budget adjustments are requested as described in more detail below:
Page 28 of 301
Item 9.c.
City Council
Consideration of Fiscal Year 2023-24 First Quarter Status Report and Request to
Approve Fifteen Budget Adjustment Requests
December 12, 2023
Page 7
CDBG: The CDBG allocation from the County was presented to Council totaling
$56,749. The final allocation provided totals $64,707, an increase of $7,958 to the
City. This budget adjustment request will increase both revenues and expenditures
and will not have an impact on the general fund.
Public Works Department: The proposed includes an increase in the Public Works
Department’s budget for minor adjustments to 5 line items, reflecting a total
increase of $75,000. This increase would include:
o Reallocate $50,000 of budgeted expenditures within the Public Works
budget for the Engineering small truck to be used for a replacement riding
mower. The mower was originally budgeted fo r replacement in FY 2024-25
but has become a higher priority replacement, when compared to the
requested Engineering small truck. The Engineering small truck will be
requested for replacement in FY 2024-25. No funds are being requested
from general fund balance.
o Reallocate $60,000 of budgeted expenditures within the Public Works
Administration Division salary savings, related to staff medical leave, to
continue to fund a consultant to provide CIP project management services
from October through December of 2023.
o Appropriate $50,000 from the general fund to provide additional capacity in
the maintenance of City owned trees. Specifically, the emergency removal
or trimming of 40 to 60 foot tall City trees. Such maintenance is dangerous
for City employees without the specialized equipment needed, such as
cranes, tall bucket trucks and a large crew.
o Appropriate $10,000 from the general fund to support the Streets team in
purchasing a high quality and longer lasting asphalt pothole filler product to
support the increased number of potholes each year.
o Appropriate $15,000 from the general fund to update the “Welcome to
Arroyo Grande” sign and medians at Traffic Way & Branch. This work would
include a larger brick pedestal, new Village sign and rock installed at the
larger and smaller medians at this location.
Community Development Department: Reallocate $10,000 of budgeted
expenditures within the Building Division salary savings to fund an intern position
within Community Development to assist with research, project renderings,
scanning, and organizing project files.
Water Fund: Appropriate $28,971 from the Water Enterprise Fund Balance to fund
the City’s share of the Central Coast Blue (CCB)
Page 29 of 301
Item 9.c.
City Council
Consideration of Fiscal Year 2023-24 First Quarter Status Report and Request to
Approve Fifteen Budget Adjustment Requests
December 12, 2023
Page 8
o Appropriate $3,501 of FY 2022-23 true up costs related to the operating
budget. This was reviewed and approved by the CCB Board on September
18, 2023, item 7.a.
o Appropriate $25,470 associated with the work completed by Urban Futures,
Inc. to provide financial support in the application to the Environmental
Protection Agency (EPA) for a Water Infrastructure Finance and Innovation
Act (WIFIA) loan and S&P Application. The agreement with Urban Futures
was reviewed and approved by the CCB Board on June 19, 2023, item 6.b.
Water Fund: Appropriate $171,300 to fund the Phased Main Replacement at
Cornwall Avenue, from Rena to El Camino Real (ECR). The total pro ject cost is
$750,000, the remaining portion of the project is funded with ARPA funds and
discussed in additional detail below.
Finally, the reallocation of ARPA funds is included as a budget request. Previous
reallocations of the City’s ARPA funds were approved at the February 8, 2022; May 24,
2022; September 27, 2022; and May 9, 2023 City Council meetings. As projects are
completed and project estimates are confirmed, allocation funding numbers in Table 4
provide the City Council approved allocations spent through the end of FY 2022-23. The
third column of Table 4 shows expected spending of funds through the allotted ARPA
deadline of December 31, 2024. ARPA funds must be committed by way of a contract or
purchase order and spend these monies no later th an December 31, 2026. The final
column shows funds that need to be reallocated as a result of budgeted project savings.
Table 4 – ARPA Allocation
Staff reviewed the 5-year Capital Improvement Project Plan, accessed any other
outstanding projects that were prioritized due to public health and safety related issues,
and reviewed the most recent US Treasury Final Rule governing eligible expenditures of
the ARPA funds. During this review the Swinging Bridge Reinforcement project was
identified because the timeframe for completion of this project makes it eligible for ARPA
ARPA Funding Allocation
CC Approved
Allocation
Spent through
06/30/2023
Expected
to Spend
Amount to
Reallocate
COVID related City expenditures 42,375 69,624 - (27,249)
Water Infrastructure Projects 1,350,150 51,400 1,298,750 -
Sewer Infrastructure Projects 549,200 165,534 383,666 -
Stormwater Infrastructure Projects 900,842 881,502 - 19,340
Public Safety Video Cameras 880,700 - 516,493 364,207
Streets Infrastructure Projects 24,958 24,958 - -
Homeless Shelter Support 300,000 - 300,000 -
Non-Profit Assistance/Community Service Grants 114,129 114,129 - -
Childcare Assistance - First 5, 5% request 100,000 100,000 - -
Smart Share ADU SLO Proposal 37,887 - 37,887 -
Grand Total 4,300,241 1,407,148 2,536,796 356,297
Page 30 of 301
Item 9.c.
City Council
Consideration of Fiscal Year 2023-24 First Quarter Status Report and Request to
Approve Fifteen Budget Adjustment Requests
December 12, 2023
Page 9
funding. The budget request of ARPA funds is to reallocate the $356,297 to the Swinging
Bridge Reinforcement project. This project is currently out to bid and is anticipated to be
completed by December 31, 2024.
Through the review process is was noted that the Phased Main Replacement at Cornwall
Avenue project, from Rena to El Camino Real (ECR), is funded with the Water
Infrastructure Project funds but was inadvertently budgeted in FY 2026 -27 with an
estimated total project cost of $1 million. The Council previously approved this project to
be funded with an ARPA allocation of $578,700. The phased main replacement in
Cornwall Avenue, from Rena to ECR, is not anticipated to cost $1 million. The main
replacement on Fair Oaks, from Elm to Alder, was 2,000 feet with more services and had
a total cost of $741,841.17. The main to be replaced in Cornwall Avenue is only 1,400
feet with fewer services and considerably less traffic. The anticipated project budget is
now being set at $750,000, for these reasons.
Table 5 below shows the resulting total allocations of ARPA funding if approved as
recommended by the Council, after which City staff would confirm eligibility and ensure
the appropriate ARPA funding conditions are attached to each project:
Table 5 – Updated ARPA Allocation
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Receive and file the Fiscal Year 2023-24 First Quarter Financial Status Report and
approve fifteen Budget Adjustment Requests;
2. Provide other direction to staff regarding the FY 2023-24 First Quarter Financial
Status Report and the fifteen Budget Adjustment Requests;
ARPA Funding Allocation
CC Approved
Allocation
COVID related City expenditures 69,624
Water Infrastructure Projects 1,350,150
Sewer Infrastructure Projects 549,200
Stormwater Infrastructure Projects 881,502
Public Safety Video Cameras 516,493
Streets Infrastructure Projects 24,958
Homeless Shelter Support 300,000
Non-Profit Assistance/Community Service Grants 114,129
Childcare Assistance - First 5, 5% request 100,000
Smart Share ADU SLO Proposal 37,887
Swinging Bridge Reinforcement 356,297
Grand Total 4,300,241
Page 31 of 301
Item 9.c.
City Council
Consideration of Fiscal Year 2023-24 First Quarter Status Report and Request to
Approve Fifteen Budget Adjustment Requests
December 12, 2023
Page 10
3. Receive and file the FY 2023-24 First Quarter Financial Status Report and do not
approve the Budget Adjustment Requests and provide further direction to staff; or
4. Provide other direction to staff.
ADVANTAGES:
The financial report presents an updated review of the City’s financial performance in the
first quarter of FY 2023-24. Approval of the requested budget adjustments will enable
staff to continue providing high quality services to the organization and to the public.
DISADVANTAGES:
No disadvantages have been identified at this time.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
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. Fiscal Year 2023-24 First Quarter Financial Status Report
Page 32 of 301
ATTACHMENT 1
Page 1
City of Arroyo Grande
Fiscal Year 2023-24
First Quarter Financial Status Report
INTRODUCTION
The following report is an overview of the City’s fiscal position at the end of the first quarter for Fiscal Year
(FY) 2023-24. The purpose of this report is to update the public and the City Council on the City’s financial
position at the end of the first quarter of the fiscal year and compare actual results to the prior year and
the budgeted Target, to determine the City’s performance. The first quarter timeframe is July 1 through
September 30, 2023.
The financial report is organized in the following sections:
Section 1 – an overview of City’s financial position at the
end of the first quarter of FY 2023-24. This includes a
comparison of first quarter results between the current
and prior year. In addition, first quarter results will be
compared to the budgeted Target. As part of the analysis,
brief explanations of significant revenue and expenditure
variances are included.
Section 2 – a listing of any personnel changes occurring
during the first quarter and a summary of headcount by
department. This section also includes the City’s calculated
vacancy rate.
Section 3 – an update on the Capital Improvement Projects
(CIP) managed by the Public Works and Community
Development Departments. This section includes CIP that
were completed in the first quarter along with their final
costs.
Section 4 – a listing of Budget Amendment Requests previously approved by Council and completed in
the first quarter of the fiscal year, as well as a list of additional budget adjustments that are being
presented to Council along with the first quarter report for consideration and approval.
Section 5 – an update on the Goal Status Reports to Council that includes progress towards completing
Major City Goals and Capital Improvement Plan.
ENSURING FISCAL
STABILITY:
In Fall 2020, the City Council
established a goal to ensure
financial stability for the
organization throughout the
planning, budgeting, and
expenditure process, including
preparation and presentation
of year-end and quarterly
financial reports.
Page 33 of 301
ATTACHMENT 1
Page 2
SECTION 1: OVERVIEW OF FINANCIAL POSITION
CITY FUND STRUCTURE
The overall City budget is comprised of many individual funds, which are categorized below. This financial
report will focus primarily on the Consolidated General Fund but will also report on all Governmental
Funds.
Consolidated General Fund – The Consolidated General Fund is the primary operating fund of the City,
which accounts for resources and services traditionally associated with government. The Consolidated
General Fund provides administrative, financial, police protection, community development, public
works, fire, and recreation services to the community and other funds. The Consolidated General Fund
accounts for revenues that have unrestricted uses and are not required legally or by contractual
agreement to be accounted for in another fund. The City has historically reported on the Consolidated
General Fund separately from the Local Sales Tax Fund, although the City’s auditors traditionally combine
this information in the Annual Comprehensive Financial Report (ACFR). The Local Sales Tax Fund accounts
for the revenues derived from Measure O-06, a local 1/2% sales tax approved by the City's voters in
November 2006. Measure O-06 included advisory measures when passed providing direction on the uses
to which the funding should be allocated. To ensure accountability, the measure included a provision
requiring the City to publish and distribute an annual report to each household on the revenues and
expenditures from the sales tax proceeds. To aid in the collection and reporting of this information, the
City has accounted for this fund in a separate account. This report will present information for the
Consolidated General Fund that includes Local Sales Tax Fund Measure O-06 revenues and expenditures.
Special Revenue Funds – Special revenue funds are used to account and report the proceeds of specific
revenue sources that are restricted or committed to expenditure for specified purposes other than debt
service or capital projects.
Debt Service Funds – This fund is used to account for the accumulation of resources and payment of long-
term debt principal interest. This includes the USDA loan issued by the City to finance the relocation of
City Hall.
Enterprise Funds - An enterprise fund is a separate accounting and financial reporting mechanism for
which revenues and expenditures are segregated into a fund with financial statements separate from all
other governmental activities. These funds include Water and Sewer services provided to City residents.
Private Purpose Fund – The private-purpose fund was created to hold the assets of the former
Redevelopment Agency of the City of Arroyo Grande until they are distributed.
Agency Funds – Agency funds are funds that the City holds on behalf of another entity. Currently, there
are three Agency funds. One is the Sanitation District fund, which accounts for the receipt and remittance
of wastewater processing fees on behalf of the South San Luis Obispo County Sanitation District. The
second is the Downtown Parking Fund, which collects assessments from Arroyo Grande Village merchants
within the boundaries of the Parking and Business Improvement Area for maintenance of the Village
parking lots. The third is the San Luis Obispo Tourism Marketing District (SLOTMD) Fund, which accounts
for the receipt and remittance of assessments collected from lodging operators on behalf of the SLOTMD.
The following chart below shows an overview of the City’s fund structure.
Page 34 of 301
ATTACHMENT 1
Page 3
CURRENT YEAR ACTUALS COMPARED TO PRIOR YEAR
Table 1 below reflects revenue and expenditure patterns through the end of the first quarter of FY 2023-
24 and compares the current quarter results against the prior year’s results for all Governmental Funds
as well as the City’s Consolidated General Fund. The totals in the table reflect the first quarter actuals for
both revenue and expenditures, divided by that fiscal year’s annual budget.
Table 1
The following discussion focuses on both the City’s Governmental Funds and the Consolidated General
Fund and provides a comparison between first quarter results for the current and prior year for both
revenue and expenditures. Governmental Funds and Consolidated General Fund revenue and
expenditures for the first quarter of this year are generally on Target with prior year. The Governmental
Funds category includes Special Revenue Funds, Debt Service Funds, as well as the Consolidated General
Fund.
Governmental Funds – At the end of the first quarter of FY 2023-24, Governmental Fund revenue was
-6.4%, or $416,692 lower than prior year, and expenditures were higher by 3.6% or $260,467.
The majority of the revenue and expenditure variances in Governmental Funds were attributed to
variances within the Consolidated General Fund and the newly created American Rescue Plan Act
Legislative & Information Services Fire Protection Impact Fees City Hall Debt Service Sewer Successor Agency to RDA Downtown Parking
Administrative Services Public Access Television Sewer Facility Sanitation Distribution
Community Development Police Protection Impact Water San Luis Obispo Tourism
Police Department Park Development Water Facility Marketing District
Recreation Services Park Improvement Lopez Water (SLOTMD)
Public Works Recreation Community Center
Local Sales Tax Fund Grace Lane Assessment District
Parkside Assessment District
Street (Gas Tax)
Traffic Signalization
Traffic Circulation
Transportation Facility Impact
Transportation
In-Lieu Water Neutralization
In-Lieu Affordable Housing
Tourism Business Improvement Dist.
Water Availability
CDBG Grant Fund
American Rescue Plan Act (ARPA)
State COPS Block Grant Agency FundsSpecial Revenue FundsFIDUCIARY FUNDSGOVERNMENTAL FUNDS
ALL FUNDS
PROPRIETORY FUNDS
General FundDebt Service FundsEnterprise FundsPrivate Purpose FundFirst Quarter
FY 2023-24
First Quarter
FY 2022-23 Variance
Revenue 6,101,535$ 6,518,227$ (416,692)$
Expenditures 7,465,739$ 7,205,272$ 260,467$
First Quarter
FY 2023-24
First Quarter
FY 2022-23 Variance
Revenue 2,554,661$ 2,264,418$ 290,243$
Expenditures 7,024,105$ 6,557,687$ 466,418$
Governmental Funds
Consolidated General Fund
Page 35 of 301
ATTACHMENT 1
Page 4
(ARPA) Fund, which is separate from the Consolidated General Fund and not otherwise addressed in
this report. The Governmental Funds category includes the Consolidated General Fund as well as
other Special Revenue Funds. The Consolidated General Fund and ARPA Fund variances are explained
as follows:
Consolidated General Fund - The Consolidated General Fund is the primary operating fund of the City
and accounts for resources and services traditionally associated with government. Consolidated
General Fund revenue in the first quarter was 12.8%, or $290,243 higher than the first quarter of the
prior year. Expenditures increased by 7.1%, or $466,418 higher than the first quarter of the prior year.
The majority of the variance between the two fiscal years is related to increased costs of one-time
payments for Liability and Property Insurance, CalPERS Unfunded Accrued Liability, and Workers
Compensation.
ARPA Fund – The ARPA Fund was created to help separately track funding provided pursuant to the
American Rescue Plan Act. This Act is intended to provide financial aid to families, governments,
businesses, schools, non-profits and others impacted by the COVID-19 public health crisis. To date the
City has received the full amount allocated totaling $4,300,241. In FY 2021-22 expenditures incurred
totaled $604,246. In FY 2022-23 expenditures incurred totaled $745,837 the remaining $2,950,158 is
currently recognized as revenue in FY 2023-24.
CONSOLIDATED GENERAL FUND IMPACTS
The following discussion focuses on the City’s Consolidated General Fund performance. Chart 1 starts off
with a simple overview of Consolidated General Fund performance compared to the Target. Next are
expenditures by category (Table 2). This is followed by a summarized look at FY 2023-24 first quarter
actual expenditures compared to the Target (Table 3). Lastly, a discussion of Consolidated General Fund
revenue is included, which compares first quarter actual results to the Target (Table 4).
Using the Target as a comparator against actual results provides a simplified method to evaluate
performance for each quarter. The Target for revenues does not use the 25% Target but a Target of 12.4%
that more accurately reflects the anticipated revenues to be received in the first quarter of the fiscal year.
Revenue realization is typically low at the end of the first quarter of the fiscal year due to the timing of
receipt of major tax revenues, the time lag involved in billing cycles, and the receipt of reimbursements.
The City’s actual first quarter financial results will be compared to both the prior year’s first quarter and
the budgeted Target. The Target for expenditures is calculated as one-fourths (25%) of the FY 2023-24
Budget and represents the 3-month period from July 2023 through September 2023, except for the Non-
Departmental Annual Payments line that has a Target of the full budget. This approach increased the
Target from 25% to 33% for the first quarter.
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Chart 1
Chart 1 shows a simple comparison
of actual first quarter revenue and
expenditures to the Target. The
actual first quarter Consolidated
General Fund revenue is less than
the budgeted Target by $500,000,
which is not unusual since revenue
realization is typically lower than
the Target through the first quarter
due to the time lag involved in
billing cycles and the receipt of
reimbursements. Likewise, actual
expenditures through first quarter totaled $7 million, or 28% of the full year’s Budget, and are under the
Target by $1.5 million. A more detailed discussion on Consolidated General Fund revenue and expenditure
variances is included later in this report.
Table 2
Table 2 reflects major expenditure cost
categories within the Consolidated General
Fund. This chart is intended to explain
where the City’s resources were spent
during the first quarter. Within the total
expenditures of $7 million, 59% of the
City’s costs are associated with personnel,
37.4% with operating and maintenance,
1.3% for the City’s debt service, 1.1% for
Capital Outlay, and 1.2% with transfers to other funds.
Table 3 reflects the first quarter status of all Consolidated General Fund operating departments. Some
departments include multiple divisions. The divisions are consolidated under their respective department,
rather than reflected individually within the table.
FY 2023-24 % of
Q1 Actuals Actuals
Personnel Costs 4,142,302$ 59.0%
Operating Costs 2,626,489 37.4%
Debt Service 90,912 1.3%
Capital Outlay 78,578 1.1%
Transfers Out 85,824 1.2%
Total 7,024,105$
Expenditure Category
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Table 3 – Consolidated General Fund Expenditures by Department
Overall, first quarter expenditures were $1.5 million under the Target. Though all City departments were
under their spending Targets, except for Recreation Services and Administrative Services. Some of the
more significant savings occurred in the Measure O-06 Sales & Use Tax Fund, City Administration, Police,
Public Works, and Community Development Departments. A more detailed explanation of key
expenditure variances by individual department/division is provided below.
KEY EXPENDITURE VARIANCES FOR INDIVIDUAL DIVISIONS/DEPARTMENTS FOR
FISCAL YEAR 2023-24
Police Services includes the functions of Administration,
Patrol Services, Support Services and the Office of
Traffic Safety (OTS) Grant for Traffic/DUI Enforcement
Program. For simplicity, Police Services will be analyzed
in total rather than by individual divisions. Some of the
more significant variances include:
The Police Department currently has two vacancies and one medical leave, resulting in labor
savings of approximately $322,000.
The contract with the County Sheriff Department for dispatch services is paid semiannually in the
months of December and June. Payments for these services will not be made until the second and
fourth quarters, resulting in a first quarter favorable variance to the Target of $124,300.
The variance for Police Administration through the end of the first quarter results from City’s
contract with the County for Animal Control Services; the July through September payment was
made in the second quarter, resulting in a first quarter favorable variance to the Target of $25,100.
This fund accounts for the revenues derived from Measure O-06, a local 1/2% sales tax approved by the
City's voters in November 2006. The majority of the favorable variance in this department can be
attributed to transfers and lower spending in debt service. Some of the more significant variances include:
City Administration 1,579,600$ 394,900$ 294,452$ 100,448$ 6%
Legislative & Information Services 449,460 112,365 85,106 27,259 6%
Measure O-06 Sales & Use Tax 3,154,001 788,500 294,741 493,759 16%
Administration Services 4,646,830 1,161,708 1,259,434 (97,726) -2%
Non-Departmental Annual Payments 2,836,525 2,836,525 2,755,499 81,026 3%
Community Development 2,578,122 644,531 390,647 253,884 10%
Police Department 6,882,775 1,720,694 1,193,335 527,359 8%
Recreation Services 901,370 225,343 233,700 (8,357) -1%
Public Works 2,510,055 627,514 517,191 110,323 4%
TOTAL EXPEDITURES 25,538,738 8,512,080 7,024,105 1,487,975 6%
%
Fav/(Unfav)
Consolidated General Fund Department Variances - First Quarter
Consolidated General Fund
Department
2023-24
Adjusted
2023-24 Q1
Actuals
Dollar
Fav/(Unfav)
2023-24 Q1
Target
Department: Police Services
Division: Various (4201, 4203, 4204, 4209)
Issue: Overall savings in salaries and
benefits and contractual services
Impact to Consolidated General Fund:
$527,359 savings
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The variance for Measure O-06 Sales & Use Tax
Fund through the end of the first quarter results from
Transfers Out to Capital Improvement Program (CIP)
Projects; the July through September allocation
towards projects is completed once a project is finished
or at the end of the fiscal year. This is resulting in a first
quarter favorable variance to the Target of $471,100.
The Debt Service for the new Animal Services Shelter is paid semiannually in the months of
November and May. Payments for these services will not be made until the second and fourth
quarters, resulting in a first quarter favorable variance to the Target of $15,000.
The Community Development Department includes the
functions of Planning and Building & Safety Divisions.
The majority of the favorable variance in this
department can be attributed to salary savings and
lower spending in contractual services. Some of the
more significant variances include:
The vacancy of the Building Permit Technician position resulting in labor savings of approximately
$85,300.
Minimal contractual services for the Planning Division were incurred through first quarter
resulting in $101,828 of favorability to the Target. The following table will summarize where these
savings occurred:
The Building Division contractual services has a variance of $36,000 related to the timing of
invoices from CSG Consultants, the billing is based on services provided in each month. The
September invoice has was not received until October.
The Public Works Department includes the functions of
Government Buildings, Engineering, Auto Shop,
Administration, Park Maintenance, and Soto Sports
Complex Divisions within the Consolidated General
Fund. The majority of the favorable variance in this
department can be attributed to salary savings. For
simplicity, Public Works will be analyzed in total rather
than by individual divisions. The Public Works Administration Division currently has a vacant Public Works
Director/Assistant City Manager position and had a vacant Assistant Capital Projects Manager the majority
of the first quarter resulting in labor savings of approximately $107,200.
Budget Target Expenditures Variance
418,182 104,546 8,343 96,203
25,000 6,250 - 6,250
15,000 3,750 4,375 (625)
458,182 114,546 12,718 101,828
On-Call Planning Services and Misc. Planning Studies
On-Call Environmental Review Services
Comprehensive General Plan Update
Planning Contractual Services
Department: Measure O-06 Sales & Use Tax
Fund
Division: Fund 218
Issue: Overall savings in Transfers Out to
CIP Projects and debt service
Impact to Consolidated General Fund:
$493,759 savings
Department: Community Development
Division: Various (4130, 4212)
Issue: Overall savings in salaries and
contractual services
Impact to Consolidated General Fund:
$253,884 savings
Department: Public Works
Division: Various (4213, 4301, 4305, 4307,
4420, 4430)
Issue: Overall savings in salaries and
contractual services
Impact to Consolidated General Fund:
$110,323 savings
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The City Administration Department includes the
functions of City Council, City Attorney, Retirees, City
Manager, and Human Resources Divisions within the
Consolidated General Fund. The majority of the
favorable variance in this department can be attributed
to lower spending in contractual services. Some of the
more significant variances include:
Minimal contractual services for the City Manager Division were incurred through first quarter
resulting in $37,900 of favorability to the Target related to the Ballot Measure and Polling
Consultants beginning work in the second quarter and the Economic Development Consultant
budgeted to begin in the third quarter.
The City Attorney Division has a variance of $42,300 related to the timing of invoices from BBK,
the billing is based on services provided in each month. The September invoice was not received
until October.
The City Council Division has a variance of $18,750 related to the timing of the Community
Services Grant program being approved in the third quarter of the fiscal year.
KEY REVENUE VARIANCES BY ACCOUNT FOR THE FIRST QUARTER
Table 4 – Consolidated General Fund Revenue
As reflected in Table 4, first quarter actual revenue was short of the Target by $505,338. This table uses a
Target of 12.4% that more accurately reflects the anticipated revenues to be received in the first quarter
of the fiscal year. Revenue realization is typically low at the end of the first quarter of the fiscal year due
to the time lag involved in billing cycles and the receipt of reimbursements. A more detailed discussion is
included below to help explain actual revenue variances through the first quarter compared to the Target.
Property Tax – The majority of the City’s property tax revenue comes from Secured Property Taxes. This
tax is billed on a fiscal year (July 1- June 30) basis and is payable in two (2) annual installments. Property
owners typically receive their first property tax bill at the end of September or early October, with a due
Property Tax 6,327,486$ 527,291$ 36,814$ (490,477)$ -8%
Sales Tax 5,268,158 439,013 417,648 (21,365) 0%
Measure O-06 Sales & Use Tax 2,962,000 246,833 269,036 22,203 1%
Transient Occ. Tax 1,545,000 257,500 294,849 37,349 2%
Property Tax in Lieu of VLF 2,001,300 - - - 0%
Franchise Fees 795,600 132,600 44,095 (88,505) -11%
License & Permit Fees 455,800 113,950 127,490 13,540 3%
User Fees 521,500 130,375 220,417 90,042 17%
Planning Fees 371,500 92,875 145,083 52,208 14%
Recreation Fees 415,867 103,967 203,252 99,285 24%
Transfers In 3,114,066 778,517 688,752 (89,765) -3%
Other Revenue 948,316 237,079 107,226 (129,853) -14%
TOTAL 24,726,593 3,060,000$ 2,554,662 (505,338) -2%
Consolidated General Fund Revenue Variances - First Quarter
REVENUE BY CATEGORY 2023-24
Budget
FY 2023-24
Q1 Actuals
Dollar
(Unfav)/Fav
FY 2023-24
Q1 Target
%
Fav/(Unfav)
Department: City Administration
Division: Various (4001, 4002, 4003, 4099,
4101, 4110)
Issue: Overall savings in contractual services
Impact to Consolidated General Fund:
$100,448 savings
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date of November 1st. The majority of property tax related to the first installment will be received in
December 2023. The second property tax bill installment is received in April 2024 and will be included in
the fourth quarter report. Property tax typically represents around 26% of the City’s annual revenue. The
Target is based on one month of Property Tax revenue. Actual revenue received in this category was lower
than this conservative Target.
Sales Tax and Measure O-06 Sales & Use Tax – Sales tax and Measure O-06 Sales & Use Tax realization
through first quarter is on track. Actual sales tax revenue received through first quarter was $417,648 and
Measure O-06 Sales & Use Tax revenue received through first quarter was $269,036 which represents one
month of payments (July). The Target is also based on one month of revenue, taking into account the
timing of anticipated payments.
Transient Occupancy Tax (TOT) – TOT revenue is reflecting an $37,349 favorable variance to the Target.
The Target and actual TOT revenue represents only two months of TOT receipts due to the timing of
payments. Lodging facilities have thirty days after the month’s end to make their TOT payments.
Property Tax in Lieu of Vehicle License Fees (VLF) – Property tax in lieu of VLF is received in two
installments during the fiscal year. Typically, the revenue is received in the months of January (3rd quarter)
and June (4th quarter). The Target for this revenue is zero in the first quarter.
Franchise Fees – Only two months of Waste Water Connection franchise fees were received through first
quarter. In addition, Charter Communications franchise fees earned in the first quarter will not be paid
and received until the second quarter. In light of the timing of payments, the Target is based on 2 months
of revenue. Without the Charter communications franchise fee receipts, the actual revenue at the end of
the first quarter is lower than the Target by $88,505.
License & Permit Fees, User Fees, and Planning Fees – License and permit revenue is above the Target by
$13,540. User fee revenue is above the Target by $90,042. Planning revenue exceeded the Target by
$52,208. The Target is based on 25% or 3 months of the fiscal year’s total budget. Revenue in this category
is customer driven and fluctuates over the course of a year as well as year over year based on demand.
Recreation Fees – Recreation revenue is above the Target by $99,285. The Target is based on 3 months
of the fiscal year’s total budget.
Other Revenues – This revenue category includes business license tax, fines, revenue from other
government agencies, charges for services and any other revenues accounts received in the consolidated
general fund. The largest variance in this category is related to three revenue accounts. The revenue from
other government agencies accounts for the SB 1090 funds earmarked for use of the general plan update.
Once these funds are spent for this project, the revenue will be recognized at that time, resulting in a
revenue shortfall to the Target of approximately $90,900. The majority of the revenue from Business
Licenses is received in December and January of each year, resulting in a revenue shortfall to the Target
of approximately $20,900.
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SECTION 2: POSITION CHANGES AND HEADCOUNT NUMBERS
POSITION ALLOCATION CHANGES MADE BY THE CITY COUNCIL (1st Quarter)
None made during this quarter.
FULL TIME EQUIVALENT (FTE) BY DEPARTMENT – PERMANENT STAFF ONLY
The following table reflects FTE staffing by department. The table only includes permanent staff and does
not include part-time or temporary staffing. While departments may hire part-time staff on a regular or
seasonal basis, they are not included in the analysis below.
EMPLOYEE VACANCY RATE
The City’s employee vacancy rate at the end of the first quarter of FY 2023-24 was 6.4%. This equates to
five (5) vacant positions. The vacancy rate tracks the number of permanent vacant positions at the end of
the quarter in comparison to the total number of permanent positions available. Unlike a turnover rate,
which tracks employees that separated during the period, the vacancy rate only looks at vacancies at the
end of period. The costs associated with turnover includes the cost of advertising new positions, training,
overtime, lowered productivity, and workload balance.
Department Adopted Budget
Headcount (FTE’s)
Vacancies
(1st Qtr)
% of Total
Staffing Vacant Positions
City Manager & Human Resources 3 1 4%City Manager
Administrative Services 7 - 9%
Community Development 10 1 13%Permit Tech.
Legislative & Info Services 2 - 3%
Police Services 29 3 37%Police Officer (3)
Public Works 24 - 31%
Recreation Services 3 - 4%
Total 78 5 100%
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SECTION 3: UPDATE ON COMPLETED CAPITAL PROJECTS
This information is provided to keep the Council apprised of the status of the City’s Capital Improvement
Projects (CIP).
*This does not include the Carryover CIP projects listed below. The Carryover CIP projects will be
incorporated into the Second Quarter Financial Status report.
Project
Number Project Fund
Budget FY
2023-24*
Current
Status
Project Budget
Expended
350-5614 Bridge Street Bridge Habitat Mitigation HBP 48,628$ In Progress 49,971$
350-5679 Traffic Way Bridge Replacement HBP/Sales Tax 718,000$ In Progress 7,190$
350-5638 Pavement Management Program
USHA/General/SB1/Sale
s Tax/General Fund 1,663,380$ In Progress 232,167$
350-5453 Financial Management Software Sewer/Water/Sales Tax 188,000$ In Progress 14,038$
350-5468 Public Safety Video Cameras COPS/Sales Tax 1,000,000$ In Progress -$
350-5695 Active Transportation Plan ATP/Sales Tax 125,000$ In Progress 6,878$
350-5601
Fair Oaks Ave Active Transportation
Improvements, Valley Road to Traffic Way
Developer/Other Gov
Agencies/Sales Tax 75,000$ In Progress -$
350-5478 Arroyo Grande Creek Remediation
Sales Tax, FEMA,
CalOES 400,000$ In Progress -$
350-5610 191 Tally Ho Sales Tax 110,000$ In Progress 850$
350-5616
Virginia Drive and S. Halcyon Road Curb
Ramp and Sidewalk Improvement CDBG 56,749$ In Progress -$
612-5853 Lift Station 3 FEMA/CalOES/Sales Tax 850,000$ Not Started -$
640-5973
Phased Main Replacement - Highway
101 Crossing Upgrade, El Camino
Real to West Branch Street ARPA/Water Fund 43,800$ Not Started 548,350$
350-5479 Fire Station 1 Apparatus Bay Doors Sales Tax 115,000$ Not Started -$
350-5606 Halcyon Road Complete Streets
HSIP/RSHA/USHA/Safe
Routes to
School/General/Sales
Tax/ATP 1,304,000$ Not Started -$
350-5477 Public Works Office Space Remodel Sales Tax 100,000$ In Progress
612-5817
Trenchless Sewer Rehabilitation -El
Camino Real to West Branch St.ARPA 282,000$ Not Started -$
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SECTION 4: APPROPRIATION TRANSFERS AND BUDGET ADJUSTMENTS
Administrative and Previously-Approved First Quarter Budget Adjustments
The following first quarter budget adjustments were previously approved by Council or are classified as
administrative and not requiring Council approval.
Capital Improvement: Administrative Carryover of $9,307,342 for the Capital Projects listed in the table
below. Capital Project funds do not have annual appropriated budgets. Control over capital projects is
maintained by a project-length capital improvement budget. This project-length budget authorizes total
expenditures over the duration of a construction project, rather than year by year.
Affordable Housing Trust Fund: Appropriate $448,370.37 from the Affordable Housing Trust Fund Balance
to support the development of Housing Authority of San Luis Obispo (HASLO)’s affordable housing project
consisting of 63 affordable multi-family units located at 700 Oak Park Blvd. Approved on 07/25/2023
Council meeting, item 9.m.
Water Fund: Appropriate $55,000 from the Water Enterprise Fund Balance to fund the City’s share of the
Central Coast Blue (CCB) project costs to submit an application to the Environmental Protection Agency
(EPA) for a Water Infrastructure Finance and Innovation Act (WIFIA) loan. The initial WIFIA application fee
is $25,000 and the S&P RES fee is $30,000. Approved on 08/08/2023 Council meeting, item 9.c.
Public Works Department: Appropriate $90,000 from the General Fund reserve for the purchase of
decorative concrete barriers and planters associated with the long-term parklets program, along with
wayfaring street signs to guide vehicles to the Olohan and Le Point parking areas. Approved on
08/08/2023 Council meeting, item 9.h.
Fund Project #Project Title Project Budget Adjustment
350 5453 Financial Management Software 225,000
350 5463 Women's Club Lighting Project 821
350 5468 Public Safety Camera System 125,000
350 5473 Replacement Generator at FCFA Station 1 610,714
350 5476 City Hall Front Door Accessibility Improvements 53,341
350 5556 Recreation Services / Community Center Building 44,745
350 5601 Fair Oaks Ave Active Transportation Improvements 50,000
350 5620 Swinging Bridge Reinforcement 1,100,292
350 5621 Arroyo Grande Creek Stabilization 6,300
350 5638 Pavement Management Program 4,882,779
350 5658 Concrete Improvements 452,238
350 5679 Traffic Way Bridge Replacement Project 447,593
350 5695 Active Transportation Plan (ATP)125,000
640 5911 Phased Mains Replacement 785,892
640 5944 Water Well #11 Facilities 42,771
640 5946 Galvanized Service Replacements 63,655
640 5973 Phased Main Replacement - Highway 101 Crossing Upgrade 291,200
9,307,342
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City Manager’s Office: Reallocate $26,500 of budgeted expenditures within the City Manager salary
savings to fund the executive recruitment services for a new City Manager. Approved on 08/22/2023
Council meeting, item 9.b.
Capital Improvement: Appropriate $413,400 from Urban State Highway Account funds (USHA) to increase
the 2022 Pavement Management Program (PMP) budget and to reallocate $134,406 of Local Sales Tax
Funds from PMP to the 2022 Concrete Repairs Project to include the two add alternate elements from the
initial bid. Approved on 08/22/2023 Council meeting, item 9.j.
Administrative Services Department: Reallocate the funding to incorporate the approval of the MOU’s
with AGPOA and SEIU, as well as establishing the salary and benefits for the Management Group. The total
cost of these agreements was $787,725. The FY 2023-24 budget had built in funds anticipation of these
agreements. Approved on 09/12/2023 Council meeting, item 9.e.
Police Department: Receive $65,000 of Office of Traffic Safety Grant funds and appropriated the funding
to implement driving under the influence enforcement services. Approved on 09/12/2023 Council
meeting, item 9.h.
Police Department: Receive $41,500 of Department of Alcoholic Beverage Control (ABC) Grant funds and
appropriated the funding to implement public awareness, minor decoy operations, shoulder tap
operations, Informed Merchants preventing Alcohol-Related Crime Tendencies (IMPACT), and generally,
implementation of ABC Alcohol Policing Partnership program. Approved on 09/12/2023 Council meeting,
item 9.i.
Capital Improvement: Appropriate $3,228.88 of Local Sales Tax Funds for the City’s portion of the Federal
Emergency Management Agency (FEMA) replacement of plant and materials for the Habitat Mitigation
Phase of the Bridge Street Bridge Rehabilitation Project related to the 2023 storm event damages. Council
approved a budget adjustment totaling $51,662. FEMA assistance will be provided at a 75% federal cost
share totaling $38,746.50. California Governor's Office of Emergency Services (Cal OES) assistance will be
provided at an 18.75% state cost share totaling $9,686.62. The City is responsible for the remaining 6.25%
totaling $3,228.88. This request is to use Local Sales Tax Fund balance for the City’s $3,228.88 portion.
Approved on 09/26/2023 Council meeting, item 9.d.
Additional Requested First Quarter Budget Adjustments
In addition to the administrative budget adjustments for the CIP and the adjustments previously-approved
by the City Council during the first quarter, fifteen new budget adjustments are proposed for approval
along with the review and receipt of this report.
Five of the adjustments request to carryover funds for non-CIP projects that were budgeted in FY 2022-
23 and were not completed in that fiscal year but are expected to be completed in the current year. These
five requested carryover adjustments include:
Police Department: Carryover $22,824 related to the Office of Traffic Safety (OTS) Grant for
Traffic/DUI Enforcement Program. This Grant program operates from October 1, 2022 through
September 30, 2023. This carryover is due to the misalignment of the program year ending in
September but budgeted in FY 2022-23. The invoice for July 1 through September 30, 2023, was
submitted totaling $22,824 and it is anticipated to be received within the next few weeks.
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City Council: Carryover $21,500 for the retraining scholarship program funded using SB 1090
funds. This program was approved at the March 9, 2021, City Council meeting, item 10.a., The
original approval was for $40,000. In FY 2021-22, $15,000 was spent and in FY 2022-23, $3,500
was spent. This program is administered by the South County Chamber of Commerce in
partnership with SLO Partners. The Chamber is continuing to process scholarships throughout this
fiscal year as needs arise.
Public Works Department: Carryover $78,433 for the purchase of an F250 Replacement Truck.
This replacement vehicle purchased was placed in November of 2022, but was not received until
July of 2023.
Administrative Services Department: Carryover $27,000 for the User Fee and Development
Impact Fee studies. The User Fee study was completed in the second quarter of FY 2023-24 and
it is anticipated that the Development Impact Fee study will be completed in the third quarter of
FY 2023-24.
Public Works Department: Carryover $24,971 for the Cash for Grass program from the Water
Availability Special Revenue Fund that has been allocated to residents participating in the program
but has not been processed for payment related to completion of work in FY 2022-23.
Nine additional budget adjustments are requested as described in more detail below:
CDBG: The CDBG allocation from the County was presented to Council totaling $56,749. The final
allocation provided totals $64,707, an increase of $7,958 to the City. This budget adjustment
request will increase both revenues and expenditures and will not have an impact on the general
fund.
Public Works Department: The proposed includes an increase in the Public Works Department’s
budget for minor adjustments to 5 line items, reflecting a total increase of $75,000. This increase
would include:
o Reallocate $50,000 of budgeted expenditures within the Public Works budget for the
Engineering small truck to be used for a replacement riding mower. The mower was
originally budgeted for replacement in FY 2024-25 but has become a higher priority
replacement, when compared to the requested Engineering small truck. The Engineering
small truck will be requested for replacement in FY 2024-25. No funds are being requested
from general fund balance.
o Reallocate $60,000 of budgeted expenditures within the Public Works Administration
Division salary savings, related to staff medical leave, to continue to fund a consultant to
provide CIP project management services from October through December of 2023.
o Appropriate $50,000 from the general fund to provide additional capacity in the
maintenance of City owned trees. Specifically, the emergency removal or trimming of 40
to 60 foot tall City trees. Such maintenance is dangerous for City employees without the
specialized equipment needed, such as cranes, tall bucket trucks and a large crew.
o Appropriate $10,000 from the general fund to support the Streets team in purchasing a
high quality and longer lasting asphalt pothole filler product to support the increased
number of potholes each year.
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o Appropriate $15,000 from the general fund to update the “Welcome to Arroyo Grande”
sign and medians at Traffic Way & Branch. This work would include a larger brick pedestal,
new Village sign and rock installed at the larger and smaller medians at this location.
Community Development Department: Reallocate $10,000 of budgeted expenditures within the
Building Division salary savings to fund an intern position within Community Development to
assist with research, project renderings, scanning, and organizing project files.
Water Fund: Appropriate $28,971 from the Water Enterprise Fund Balance to fund the City’s share
of the Central Coast Blue (CCB).
o Appropriate $3,501 of FY 2022-23 true up costs related to the operating budget. This was
reviewed and approved by the CCB Board on September 18, 2023, item 7.a.
o Appropriate $25,470 associated with the work completed by Urban Futures, Inc. to
provide financial support in the application to the Environmental Protection Agency (EPA)
for a Water Infrastructure Finance and Innovation Act (WIFIA) loan and S&P Application.
The agreement with Urban Futures was reviewed and approved by the CCB Board on June
19, 2023, item 6.b.
Water Fund: Appropriate $171,300 to fund the Phased Main Replacement at Cornwall Avenue,
from Rena to El Camino Real (ECR). The total project cost is $750,000, the remaining portion of
the project is funded with ARPA funds and discussed in additional detail below.
Finally, the reallocation of ARPA funds is included as a budget request. Previous reallocations of the City’s
ARPA funds were approved at the February 8, 2022; May 24, 2022; September 27, 2022; and May 9, 2023
City Council meetings. As projects are completed and project estimates are confirmed, allocation funding
numbers in Table 4 provide the City Council approved allocations spent through the end of FY 2022-23.
The third column of Table 4 shows expected spending of funds through the allotted ARPA deadline of
December 31, 2024. ARPA funds must be committed by way of a contract or purchase order and spend
these monies no later than December 31, 2026. The final column shows funds that need to be reallocated
as a result of budgeted project savings.
Table 1 – ARPA Allocation
Staff reviewed the 5-year Capital Improvement Project Plan, accessed any other outstanding projects that
were prioritized due to public health and safety related issues, and reviewed the most recent US Treasury
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Final Rule governing eligible expenditures of the ARPA funds. During this review the Swinging Bridge
Reinforcement project was identified because the timeframe for completion of this project makes it
eligible for ARPA funding. The budget request of ARPA funds is to reallocate the $356,297 to the Swinging
Bridge Reinforcement project. This project is currently out to bid and is anticipated to be completed by
December 31, 2024.
Through the review process is was noted that the Phased Main Replacement at Cornwall Avenue project,
from Rena to El Camino Real (ECR), is funded with the Water Infrastructure Project funds but was
inadvertently budgeted in FY 2026-27 with an estimated total project cost of $1 million. The Council
previously approved this project to be funded with an ARPA allocation of $578,700. The phased main
replacement in Cornwall Avenue, from Rena to ECR, is not anticipated to cost $1 million. The main
replacement on Fair Oaks, from Elm to Alder, was 2,000 feet with more services and had a total cost of
$741,841.17. The main to be replaced in Cornwall Avenue is only 1,400 feet with fewer services and
considerably less traffic. The anticipated project budget is now being set at $750,000, for these reasons.
Table 5 below shows the resulting total allocations of ARPA funding if approved as recommended by the
Council, after which City staff would confirm eligibility and ensure the appropriate ARPA funding
conditions are attached to each project:
Table 5 – Updated ARPA Allocation
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CMO City Manager's Office
AS Administrative Services
LIS Legislative and Information Services
PD Police Department
PW Public Works
Rec Recreation Services
Fire Five Cities Fire Authority
CD Community Development
Key
SECTION 5: UPDATE ON MAJOR CITY GOALS AND CAPITAL IMPROVEMENT PLAN
This information is provided to keep the Council apprised of the status of the Goal Status Reports to
Council that includes progress towards completing Major City Goals and Capital Improvement Plan. These
reports present updates and communications about the status of City projects, goals, and performance
measures. The four major goals are:
The following tables provide a breakdown of the Council Goal’s Work Plan by goal. Here is a key for
purposes of defining each department.
Funding
Support a thriving community through fiscal responsibility, economic development
efforts, and additional and alternative revenue streams.
Fire Services
Implement operational and fire and emergency service delivery improvements
through the Five Cities Fire Authority, and complete the transition of services to
Oceano due to its exit from the Authority.
Infrastructure
Invest in and complete critical infrastructure projects throughout the City through
the strategic prioritization of projects based on available resources.
General Plan Update
Prioritize and complete major work efforts for the comprehensive General Plan update
to provide a vision and framework for future development within the City.
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Goal Strategy Task/Action Carryover Action or New Responsible
Department
Anticipated to
Start Completion Target Update
Funding 1. 1 Economic Development 1.1a Evaluate Economic Development Management Services New CMO 1Q FY2023-24 2Q FY 2023-24 In Progress
1.1b Obtain Economic Development Management Services New CMO 3Q FY 2023-24 3Q FY 2023-24 Not started
1.1c Support Modifications to the AGTBID New CMO/CA/RS/LIS In Progress 2Q FY 2023-24 In Progress
1.1c.i. Transition Administration to City staff New CMO/RS In Progress 1Q FY 2023-24 Complete
1.1c.ii. Complete Modifications to AGTBID Bylaws and Advisory
Board Structure New CMO/CA/LIS In Progress 2Q FY 2023-24 In Progress
1.1d 400 W. Branch Disposition and Development Agreement New CMO/CA/CD In Progress 4Q FY 2023-24 In Progress
1.1e Complete Transition of Temporary Parklets to Permanent
Parklets Carryover CD/PW In Progress 1Q FY2023-24 In Progress
1.1f Develop 1-3 Special Events that drive visitation during shoulder
and winter months and build destination awareness New Rec In Progress 4Q FY 2023-24 In Progress
1.2 Pursue Revenue Measure 1.2a Issue an RFP for a consultant to develop a survey and outreach
strategy to community New CMO/LIS 1Q FY2023-24 1Q FY2023-24 Completed
1.2b Award contract with consultant to develop a survey and outreach
strategy to community New CMO/LIS 1Q FY2023-24 1Q FY2023-24 Completed
1.2c Conduct public outreach to the community to communicate need
for additional revenue, including facilitation of a Citizen Committee Carryover CMO/LIS 1Q FY2023-24 1Q FY 2024-25 In Progress
1.2d Bring Revenue ballot measure to Council for consideration
Carryover
CMO/AS/LIS 3Q FY 2023-24 4Q FY 2023-24 Not started
1.3 Evaluate Potential to Enable
Cannabis Businesses within City
1.3a Conduct study session with the City Council regarding potential
cannabis ordinance Carryover CD/CA/CMO 3Q FY 2023-24 3Q FY 2023-24 Not started
1.3b Prepare and adopt cannabis ordinance, if directed by the City
Council New CD/CA/CMO 3Q FY 2023-24 1Q FY 2024-25 Not started
1.3c Evaluate feasibility of a Cannabis Tax New CD/AS/CA/CMO 3Q FY 2023-24 1Q FY 2024-25 Not started
Fire Services 2.1 Work with Regional Partners on
Fire Services in 5 Cities 2.1a Pursue potential contract with the County to serve Oceano New Fire/CMO 3Q FY 2023-24 4Q FY 2023-24 In Progress
2.2 Funding for Fire Services 2.2a Consider including Public Safety in proposed Revenue measure New CMO/AS/LIS 4Q FY 2024-25 4Q FY 2024-25 In Progress
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Goal Strategy Task/Action Carryover Action or New Responsible
Department
Anticipated to
Start Completion Target Update
Infrastructure 3.1 Pursue Alternative Funding
Sources for Infrastructure Needs
3.1a Consider Community partnership for Mark M. Millis Community
Center construction Carryover CMO/Rec/PW In progress 4Q FY 2023-24 In Progress
3.1b Include infrastructure in new Revenue Measure plans and
outreach Carryover AS/CMO/LIS/ PW/CD 1Q FY 2023-24 4Q FY 2024-25 In Progress
3.1c Collect FEMA reimbursement for January - March 2023 storm
damage New AS In progress 3Q FY2024-25 In Progress
3.1d Pursue Grant applications and administration for infrastructure
projects Carryover PW/CD/AS In progress Ongoing In Progress
3.2 Work with Regional Partners on
Infrastructure Projects
3.2a Support ongoing development and financing of Central Coast
Blue project Carryover CMO/AS/PW In Progress Ongoing In Progress
3.2b NCMA Management Agreement Amendments New PW 3Q FY 2023-24 Ongoing In Progress
3.3 Prioritize Key Infrastructure
Projects 3.3a Traffic Way Bridge Carryover CD/PW In progress 2Q FY 2025-26 In Progress
3.3a.i. Traffic Way Bridge Design Carryover CD/PW In progress 4 Q FY 2023-24 In Progress
3.3a.ii. Traffic Way Bridge ROW Carryover CD/PW 1Q FY 2023-24 3Q FY 2023-24 In Progress
3.3a.iii. Traffic Way Bridge Construction Carryover CD/PW 3Q FY 2024-25 2Q FY 2025-26 Not started
3.3b Swinging Bridge Rehabilitation Carryover CD/PW In progress 2Q FY 2024-25 In Progress
3.3b.i. Swinging Bridge Rehabilitation NEPA Carryover CD/PW In progress 3Q FY 2023-24 Complete
3.3bii Swinging Bridge Rehabilitation Bid for Construction Carryover CD/PW 3Q FY 2023-24 3Q FY 2023-24 Not started
3.3b.iii. Swinging Bridge Construction New CD/PW 4Q FY 2023-24 2Q FY 2024-25 Not started
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Goal Strategy Task/Action Carryover Action or New Responsible
Department
Anticipated to
Start Completion Target Update
3.3c Halcyon Complete Streets New CD/PW Not started
3.3c.i. Halcyon Complete Streets Design acquisition New CD/PW 1Q FY 2024-25 1Q FY 2024-25 Not started
3.3c.ii. Halcyon Complete Streets ROW acquisition New CD/PW 1Q FY 2023-24 1Q FY 2024-25 In Progress
3.3c.iii. Halcyon Complete Streets Construction New CD/PW 1Q FY 2024-25 2Q FY 2025-26 Not started
3.3d ATP Development New CD/PW In Progress 3Q FY 2024-25 In Progress
3.3d.i. Award ATP Contract to Consultant New CD/PW 4Q FY 2022-23 4Q FY 2022-23 In Progress
3.3d.ii. Final Approval of ATP by Council New CD/PW 3Q FY 2024-25 3Q FY 2024-25 Not started
3.3e 2022 Pavement Management Program Construction New CD/PW 1Q FY 2023-24 2Q FY 2023-24 In Progress
3.3f 2024 Pavement Management Program Design New CD/PW 2Q FY 2023-24 3Q FY 2023-24 Completed
3.3g 2024 Pavement Management Program Construction New CD/PW 4Q FY 2023-24 1Q FY 2024-25 In Progress
3.3h Community Safety Camera Network Carryover Police/CD In Progress 4Q FY 2024-25 In Progress
3.3i Replacement Generator at Station 1 New CD/PW/Fire 4Q FY 2022-23 4Q FY 2023-24 In Progress
3.3j Lift Station 3 New CD/PW 1Q FY 2023-24 1Q FY 2024-25 In Progress
3.3k AG Creek Remediation (Debris removal and bank stabilization)New CD/PW 4Q FY 2022-23 4Q FY 2023-24 In Progress
3.3l Concrete Repair Program New CD/PW 1Q FY 2024-25 4Q FY 2024-25 In Progress
3.3m Concept plan/design for new Mark M. Millis Community Center
Building New CD/PW/Rec 1Q FY 2023-24 4Q FY 2023-24 Not started
3.3n CMP Lining New CD/PW 1Q FY 2024-25 Ongoing In Progress
Infrastructure (continued)
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Goal Strategy Task/Action Carryover Action or New Responsible
Department
Anticipated to
Start Completion Target Update
4.1 Public Outreach 4.1a Plan and Host a Kick-Off Meeting with Community New CD/LIS 1Q FY 2023-24 1Q FY 2023-24 In Progress
4.2 Diversity Equity Iinclusivity
Justice Lens 4.2a Management of DEIJ consultant New CD In Progress Ongoing In Progress
4.3 General Plan Elements New CD 2Q FY 2023-24 3Q FY 2024-25 Not started
4.4 Baseline Analysis of Existing
and Future Business Needs 4.4a Survey Local Businesses Carryover Action CD 1Q FY 2023-24 4Q FY 2023-24 Not started
4.4b Conduct a Retail Market Analysis New CD 1Q FY 2023-24 4Q FY 2023-24 Not started
4.5 Climate Action Plan New CD 2Q FY 2023-24 3Q FY 2025-26 Not started
4.6 Code Update 4.6a Bring code changes to Planning Commission for approval New CD 3Q FY 2025-26 3Q FY 2025-26 Not started
4.6b Bring draft Ordinance of code revision update to Council New CD 4Q FY 2025-26 4Q FY 2025-26 Not started
4.7 EIR 4.7a Complete draft EIR New CD 1Q FY 2024-25 3Q FY 2024-25 Not started
4.7b Complete final EIR New CD 3Q FY 2024-25 4Q FY 2024-25 Not started
4.8 Objective Design Standards Carryover CD/CA 1Q FY 2023-24 1Q FY 2023-24 In Progress
General Plan Update
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