Loading...
HomeMy WebLinkAbout013125 Two-Year Implementation Plan TWO-YEAR IMPLEMENTATION PLAN (FY 2025/26 – 2026/27) INTRODUCTION For years, the Town of Danville has successfully delivered key strategic initiatives while maintaining high-quality programs, capital projects, and municipal services. This ability to balance one-time high-profile efforts with daily operations was achieved through a small, long-tenured staff whose deep knowledge of the community and its policy direction enabled them to manage a substantial workload despite limited resources. Recently, the Town has experienced higher-than-usual staff turnover due to retirements and transitions, coupled with increasingly constrained resources highlighted in the Mid-Year Operating Budget and Capital Improvement Updates. Additionally, an influx of new residents and Commissioners who may be unfamiliar with Danville’s service delivery approach underscores the need for a clear annual framework that communicates the Town’s priorities and its resulting financial and staffing resource allocation. In summary, this Two-Year Implementation Plan (a "Work Plan") provides a roadmap for the Town’s key near-term initiatives. It reflects the Town Council’s policy direction—shaped by years of thoughtful public discussion—and serves as a: • Prioritization tool to focus limited resources on initiatives with the greatest long- term impact. • Communication resource to provide staff, residents, and stakeholders a clear understanding of the Town’s priorities and efforts, fostering alignment and trust. • Accountability framework that ensures transparency by clearly defining goals and tracking progress. These high-profile initiatives will be undertaken in addition to the Town’s daily operations, requiring focus and a careful re-balance of priorities if new efforts are introduced and considered. 2 DISCUSSION Building on prior Town Council direction, the overarching theme for the next two years emphasizes fiscal and economic health. To ensure Danville remains both fiscally sound and economically vibrant, this Work Plan focuses on three key initiatives: 1. Fiscal Health: Stabilize the Lighting and Landscape Assessment District to address the growing maintenance needs of community assets added since incorporation. 2. Infrastructure: Secure new funding resources to maintain an extensive network of aging infrastructure—transportation systems, storm drains, and park features—in a state of good repair. 3. Economic Health: Support local businesses in adapting to evolving consumer preferences and economic trends. Initiative #1: Fiscal Health - LLAD Rate Adjustment The Danville Lighting and Landscape Assessment District (LLAD) 1983-1 is the Town’s third-largest revenue source, essential for maintaining public parks, roadside landscaping, and street lighting. Securing an adjustment in assessment rates to more fully offset actual costs is critical for long-term fiscal stability. Why This is Important Due to stagnant revenues and rising costs, current LLAD expenditures are budgeted at $5.52 million, while assessment revenues total just $3.13 million, leaving a $2.39 million shortfall. This deficit is currently offset by a $1.45 million subsidy from the General Fund and $939,000 from LLAD reserves, which are projected to be depleted by the end of FY 2026/27. Assessment Revenues $3.13 M Budgeted Expenditures ($5.52 M) Budget Balance (Shortfall) ($2.39 M) General Fund Subsidy $1.45 M LLAD Reserves (projected depletion by end of FY 2026/27) $0.94 M Total Deficit Off-Sets: $2.39 M Without an increase in LLAD revenues and with reserves depleting by 2026/27, the General Fund subsidy would need to increase by approximately $1 million per year. Alternately, service levels reductions would be necessary to balance the budget. 3 Stagnant Revenues and Rising Costs LLAD assessment rates have remained unchanged since 2003, keeping revenues nearly flat at $3.02 million in FY 2003/04 and $3.13 million in FY 2024/25. Meanwhile, operating expenditures have risen sharply to $5.52 million, driven by higher utility costs, which account for 56% of the increase. On the Capital Improvement side, aging infrastructure and new community amenities added since incorporation, have resulted in additional capital maintenance costs of $1.3 million annually, above and beyond the $2.38 million annual LLAD operating shortfall. Structural Challenges The LLAD, established before Proposition 218 (1996), has two key structural issues. First, the most recent assessment increase in 2003 lacks an inflation escalator, leaving assessments flat as costs rise. Second, it assesses multifamily units at a disproportionately low rate compared to single-family homes. With a state-mandated 2023-2031 Housing Element that plans for at least 2,241 new homes, mostly multifamily, this imbalance will worsen alongside increasing demand for LLAD- maintained parks and street lighting. Work Plan for Initiative #1 Consistent with Town Council direction, this initiative involves seeking property owner approval in spring 2025 for a rate adjustment to help *partially* close the LLAD budget shortfall, guided by a preliminary benefit analysis that also recommends: • Updating the assessment methodology and LLAD zones to better allocate costs between “special” benefits for property owners and “general” benefits for the public; and • Revising multifamily and non-residential property assessments to more accurately reflect the benefits received. A complete schedule of work activities is included in Attachment A. If successful, the passage of a rate adjustment would support the Town’s broader goal of maintaining high-quality infrastructure and public spaces. Furthermore, it allows the Town to reallocate General Fund resources to address the demands of its aging infrastructure network. If the LLAD rate adjustment is not approved, the initiative would shift to exploring a revised LLAD strategy and/or alternative revenue sources to address the community’s growing maintenance and infrastructure needs. 4 Initiative #2: Infrastructure – Capital Planning The Town’s capital priorities are outlined in a five-year rolling Capital Improvement Program (CIP), guided annually by the Town Council to align strategic objectives, projected revenues, and staff capacity. Over the past 30 years, the Town has added numerous community assets, making maintenance increasingly resource-intensive while revenues remain stagnant. In the current FY 2024/25, $6.69 million was allocated for capital projects, with capital maintenance and infrastructure replacement efforts comprising 61% of the budget. Over the next 10 years, upholding the current standard of maintenance for aging infrastructure is estimated to require the capital budget to grow approximately another $1.26M, to $7.95 million annually, with $6.01 million (76%) dedicated solely to capital maintenance and infrastructure replacement, as detailed below: Major Assets (sampling) Count Average Cost (estimated) Life Cycle Estimated Annual Arterial Roadways 18.04 centerline miles $3.3M CLM 20 years $2.15M Local Roadways 140.34 centerline miles $440K CLM 20 years $2.65M Bike Safety (e.g., green bike lanes) 45,000 SF $20/SF 15 years $50K Pedestrian Safety (e.g., RRFBs) 16 sets $30K/set 10 years $30K Parks – Playgrounds 5 main playgrounds $1.5M/playground 15 years $500K Parks – Turf Fields 3 turf fields $1M/field 9 years $330K Parks – Sports Field Lighting 2 parks $1M/park 20 years $100K Storm Drain Infrastructure Hydraulic structures, open channel, pipes Varies Varies $200K Recommended Annual Set-Aside for Infrastructure Maintenance and Replacement: $6.01M Work Plan for Initiative #2 a. Evaluate funding options for these infrastructure maintenance needs, including: • If the LLAD rate adjustment passes, re-allocate some portion of the current $1.45M in General Fund subsidy to the LLAD toward capital maintenance and replacement. • If the LLAD rate adjustment does *not* pass:  Spend down remaining reserves of approximately $2.64 million in the LLAD.  Spend CIP General Purpose revenue. The current unappropriated balance in the CIP is approximately $10 million. At an annual rate of $2.5 million, and assuming that funds were allocated only for this purpose, the LLAD could be funded for 3-4 more fiscal years. 5  Evaluate alternative revenue sources for either capital maintenance and replacement, or, for other off-setting expenditures. b. Deploy new capital planning and management software that enables the Town to better organize, evaluate, budget, and track all your capital planning activities. Initiative #3: Economic Health – Business Support Consumer spending patterns have shifted significantly post-pandemic. While online shopping continues to grow, in-store shopping remains a vital part of the retail landscape. National and state trends highlight key changes impacting brick-and- mortar retailers: • Personalization: 71% of consumers expect stores to deliver personalized interactions, and 76% become frustrated when those expectations aren’t met.1 • Experiential Retail: 80% of customers believe the experience a company provides is as important as its products or services.2 • Social Commerce: Social media is increasingly integral to retail, with U.S. consumers projected to spend $80 billion annually on social commerce by 2025.3 • Community-Centric Retail: A strong preference for supporting local businesses is especially evident among younger demographics. 85% of Gen Z consumers shop on their local main street monthly, with many visiting weekly. Additionally, 70% of Gen Z and 69% of Millennials are willing to shop locally more often to support their communities.4 These insights, supported by local observations, underscore the importance of adapting the Town’s economic development strategies to align with evolving consumer behaviors and partnering with businesses to meet these emerging trends. The Four-Legged Stool A thriving business community relies on a collaborative effort, often described as a four-legged stool, with each "leg" representing a critical stakeholder: • Public Entity (Town): Plays a key role in creating a vibrant physical economic environment (such as downtown improvements) and by attracting a broad audience through initiatives that draw visitors. 1 McKinsey & Company. “The value of getting personalization right—or wrong—is multiplying.” 2 Salesforce. “State of the Connected Customer.” 4th Edition. 3 McKinsey & Company. “Social Commerce: The future of how consumers interact with brands.” 4 Finance & Commerce. “U.S. consumers willing to spend more to support small local businesses, survey finds.” May 24, 2024. 6 • Business Owner: Converts public interest into actionable customer engagement by creating compelling experiences, attracting potential customers, and engaging those who visit to close sales. • Property Owner: Ensures rental rates remain feasible, fostering a stable and sustainable environment for businesses to thrive. • Community: Acts as the foundation, collectively supporting local retail by choosing to shop locally and championing the success of their small businesses. When these four stakeholders align, they create a balanced and resilient economic ecosystem that drives long-term economic vitality and community enrichment. To better reflect a Town-wide effort with multiple partners, as well as a shift in consumer behavior, we have developed a Danville Business Support Funnel, based on the classic marketing funnel concept of Awareness>Interest>Desire>Action. 7 The Business Support Funnel clarifies and re-frames broad marketing goals as Awareness>Interest>Conversion>Loyalty. Each marketing goal has key functions and aligns with brand goals held by various groups involved in retail marketing for Danville: Visit Tri-Valley, the Town, Danville Area Chamber of Commerce, and businesses. Work Plan for Initiative #3 In keeping with the Danville Business Support Funnel, the Town will take a broad and supportive role in economic development over the upcoming two years. 1. Provide Continuing Education In speaking with business owners in the community, from new to closing businesses, we have found that there is a diversity of backgrounds that leads to different approaches to running a business. Simple approaches that may have worked well pre-pandemic are no longer viable, and some business owners have not modified their approach. To better support continuing education, the Town will directly provide a business workshop series and identify local opportunities for low- or no-cost education through regional partners. In 2022, the Town Council allocated $5,000 to the Danville Area Chamber of Commerce for a Business Workshop series. While planning was stalled for some time, there is a renewed focus on developing and presenting these workshops. The Chamber conducted a survey to assess desired topics, and the series will focus on key foundational areas such as building a business plan, digital marketing, and financial planning. The workshop series will be free and open to all Danville-based businesses. The Town will also provide meeting space and materials to support the workshops. In addition to direct support, the Town will also help connect businesses with existing opportunities in the community. Through the new quarterly Business Focus email newsletter and through a dedicated webpage, we will share ongoing and upcoming opportunities from groups such as Small Business Development Center East Bay, Small Business Administration Score Program, and workshops held online at local community colleges. 2. Development Destination Marketing Strategy The Town collaborates with Visit Tri-Valley to promote Danville as part of a regional attraction. To complement this effort and in recognition of Danville’s unique characteristics, the Town plans to launch a hyper-local destination 8 marketing strategy that highlights Danville’s unique appeal. This initiative would focus on the first two tiers of the Business Support Funnel by developing a destination brand and marketing goals. Guidance will be sought informally from Visit Tri-Valley at no additional cost, and the Town will leverage strategies used by nearby cities with similar assets, minimizing the need for independent consultation. Groundwork is already underway with the Discover Danville brand, which includes a web-based app featuring dining, retail, and historic sites. Since its launch in fall, the app has attracted 1,209 visitors and 5,760 page views. Additionally, a business listing website is being developed to showcase Danville’s restaurants, retail options, and events by category, helping visitors plan their trips. The initiative will also engage residents through the “I ♥ Danville” campaign, an overarching theme for events in 2025. Starting with Valentine’s Day, this year-long campaign will celebrate all that makes Danville special, with tie-ins to Downtown business events, summer activities, and art programs. 3. Provide and Support Promotional Opportunities In addition to an annual $25,000 holiday campaign budget, the Town also allocates $25,000 to business promotion grants. These grants primarily support marketing for business collaboration community events, such as sip-n-strolls and festivals. For 2025, the program was modified to include digital marketing grants, which allows businesses to be reimbursed for up to $100 in digital marketing per year. The digital marketing grant would be supported by the Business Workshops mentioned above and would encourage businesses to embrace a social-first marketing effort. The Economic Development staff would also provide social media marketing tips through its quarterly newsletter. The community events hosted through the Business Promotion Grant Program have been helpful to Downtown businesses, but we will work more closely with the Chamber to ensure a wide range of businesses – members and non- members – are aided by the events they host. We will also seek to gather feedback in partnership with the Chamber, to ensure each event improves its impact, and continue the successful Town-hosted events that foster business promotion. 9 The Scarecrow Stroll provided a fun, flexible Town event that drove foot traffic Downtown. The “Swing into Danville” holiday campaign created new opportunities for promotion, including a bag giveaway and storefront decorating contest. We received positive feedback on these initiatives and will expand on them to include other events in 2025. 4. Assist and Support Downtown Businesses This effort is key to building a strong support network for Downtown businesses. Fifty-eight of the Town’s top 100 sales tax generating businesses are located downtown, including 34 restaurants. These businesses generate 30.2% of the top 100 sales tax. While the downtown area generates a smaller share of sales tax, it embodies the historic charm and heart of the community. Unlike shopping centers elsewhere in Town, which are supported by collective marketing efforts, Downtown outreach efforts would benefit from an organized group with cohesive goals, supported by a partnership with the Town. To foster this, the Town has been working with Downtown business owners and managers to develop an informal association. Meetings held in October 2024 and January 2025 aimed to establish a framework and identify leaders from within the business community. These meetings intentionally excluded property owners, elected officials, and organizations like the Chamber of Commerce to encourage self-reliance and grassroots organization among the business owners themselves. While individual owners often approach elected officials for support, these meetings are focused on creating a collective voice to identify challenges and coordinate Town assistance. The group is exploring various models for organization, ranging from a Main Street America group to a Business-Based Improvement District. The informal nature of the meetings has fostered collaboration and will guide the formation of a structure that reflects the needs of the businesses. The Town will continue to provide guidance and support as the group evolves, with meetings scheduled at a pace set by the business owners. Building relationships with local business organizations and with business owners will create a collaborative atmosphere for moving Danville’s economic development strategy into a new era. 10 SUMMARY Consider the work activities associated with the initiatives in this Work Plan and provide feedback to staff as appropriate. Attachments: A - LLAD Rate Adjustment Work Plan ATTACHMENT A Initiative 1: LLAD Rate Adjustment Work Plan LLAD Rate Adjustment Activities • February 4: Town Council adopts the Resolution of Initiation for LLAD No. 2025-1. • March 18: Town Council adopts Resolution of Intention and approves the preliminary Engineer’s Report for LLAD No. 2025-1. • April 4 (minimum of 45 days prior to LLAD No. 2025-1 public hearing): Deadline to mail Proposition 218 notices and ballots to all property owners in the Town. • May 20: Town Council holds public hearing, declares balloting period closed, and continues item to June 3rd meeting. • May 21: Ballot tabulation and determination of results. • June 3: Town Council declares results of ballot tabulation. If property owners support a rate adjustment, the Town Council would adopt final Resolution confirming the FY 2025-26 assessments for LLAD No. 2025-1. If property owners do *not* support a rate adjustment through LLAD No. 2025- 1 (i.e., a “majority protest”), the Town Council would adopt Resolution of Initiation for LLAD No. 1983-1 (existing LLAD), with the following steps: • June 17: Town Council will adopt Resolution of Intention and approve the preliminary Engineer’s Report for LLAD No. 1983-1. • July 3 (minimum of 10 days prior to LLAD No. 1983-1 public hearing): Deadline to publish the notice of public hearing for LLAD No. 1983-1 in the local newspaper. • July 15: Town Council will hold the public hearing and adopt the final Resolution confirming the FY 2025-26 assessments for LLAD No. 1983-1. Community Engagement: Concurrently, the Town has initiated an outreach strategy to educate property owners about the LLAD and the need for adjustments. Efforts will include newsletter articles, social media posts, and expanded website content to build awareness and prepare for a planned Proposition 218 balloting procedures in spring 2025.