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Home My WebLink About2008/11/17 Agenda Packet \ tiecia(8 undt:;" '.'. :::'\' (;':t'l.l i :d.f'i'1 em~:~~~:: gi~~ ~il~r~"a(~~(~~~;:"~~~~e~~hiS ~ ~ r c- nt on the bulletin board according ~ r q rementa. ~ ~~3:="~ Z'/ W SIGNED Cheryl Cox, Mayor Rudy Ramirez, Council member ScottTulloch, Interim City Manager .John McCann, Council member Bart Miesfeld, Interim City Attorney Jerl)' R. Rindone, Council member Donna Norris, City Clerk Steve Castaneda, Councilmember ADJOURNED REGULAR MEETING November 17, 2008 6:30 P.M. Council Chambers City Hall 276 Fourth Avenue CALL TO ORDER ROLL CALL: Councilmembers Castaneda, McCann, Ramirez, Rindone, and Mayor Cox PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE INTRODUCTION BY INTERIM CITY MANAGER TULLOCH OF GARY HALBERT, PLANNING AND BUILDING DIRECTOR PUBLIC COMMENTS Persons speaking during Public Comments may address the Council on any subject matter within the Council's jurisdiction that is not listed as an item on the agenda. State law generally prohibits the Council from discussing or taking action on any issue not included on the agenda, but, if appropriate, the Council may schedule the topic for future discussion or refer the matter to staff Comments are limited to three minutes. BUDGET WORKSHOP 1. PRESENTATION BY MARNEY COX, CHIEF ECONOMIST OF SANDAG ON REGIONAL ECONOMIC OUTLOOK 2. PRESENTATION BY PETER DENNEHY, SENIOR VICE PRESIDENT OF THE SULLIV AN GROUP ON REGIONAL HOUSING MARKET 3. PRESENTATION BY REPRESENTATIVE FROM THE SAN DIEGO COT.JNTY ASSESSORS OFFICE ON CHULA VISTA PROPERTY TAX PROJECTIONS Page I - Council Agenda httn ://V'IWW. chula vistaca. e:ov November 17,2008 .:' 4. QUARTERL Y FISCAL STATUS REPORT FOR THE FIRST QUARTER OF FISCAL YEAR 2008/2009 In accordance with Charter Section 504(f), attached for consideration is the Fiscal Status report covering the First Quarter of Fiscal Year 2008/2009. (Finance Director) Staff recommendation: Council accept the report as suhmitted. 5. FISCAL YEAR 2009/20 I 0 BUDGET OVERVIEW AND 5 YEAR PROJECTIONS . Fiscal Year 2009/2010 General Fund Budget Overview . 5 Year Revenue and Expenditure Projections . Fiscal Year 2009/2010 Development Services Fund Budget Overview . Fiscal Year 2009/2010 Redevelopment Agency Fund Budget Overview . Budget Balancing Strategy/Options 6. CONSIDERATION OF ESTABLISHMENT OF CITY'S MANAGEMENT TEAM FOR THE PURPOSE OF MEETING AND CONFERRING WITH THE CITY'S EMPLOYEE ORGA.1\JIZATIONS In accordance with the Meyers-Milias-Brown Act as contained in Government Code Sections 3500-3511, Council must designate representatives for labor negotiations. Adoption ofthe resolution complies with this requirement. (Human Resources Director) Staff recommendation: Council adopt the following resolution: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPOINTING THE CITY'S MANAGEMENT TEAM FOR THE PURPOSE OF MEETING AND CONFERRING WITH THE CITY'S EMPLOYEE ORGANIZATIONS CLOSED SESSION Announcements of actions taken in Closed Session shall be made available by noon on Wednesday following the Council Meeting at the City Attorney's office in accordance with the Ralph M Brown Act (Government Code 54957. 7). 7. CONFERENCE WITH LABOR NEGOTIATORS PURSUANT TO GOVERNMENT CODE 54957.6 . Agency designated representatives: Scott Tulloch, Marcia Raskin, Bart Miesfeld, Rod Betts, Maria Kachadoorian, Edward Van Eenoo, Leah Browder . Employee organizations: CVEA, IAFF, POA, WCE, and Unrepresented Groups Page 2. - Council Agenda httn://\VvVW .ch u lavi staca. gOY November 17,2008 ADJOURNMENT to the Regular Meeting of November 18, 2008 at 6:00 p.m. in the Council Chambers. Materials provided to the City. Council related to any open-session item on this agenda are available for public review at the City Clerk's Office, located in City Hall at 276 Fourrh Avenue, Building 100, during normal business hours. In compliance with the A.l\1ERICANS WITH DISABILITIES ACT The City of Chula Vista requests individuals who require special accommodations to access, attend, and/or participate in a City meeting, activity, or service request such accommodation at least forty-eight hours in advance for meetings and five days for scheduled services and activities Please contact the City Clerk for specific information at (619) 691-504] or Telecommunications Devices for the Deaf (TDD) at (6] 9) 585-5655. California Relay Service is also available for the hearing impaired. Page 3 - Council Agenda htto:l/www. c h uIa vistaca. 20V November 17,2008 CITY COUNCIL AGENDA STATEMENT ~(f? CITY OF ~ (HULA VISTA 11/17/2008, ItemL ITEM TITLE: QUARTERLY FINA..t'\)CIAL REPORT FOR THE QUARTER ENDED SEPTEMBER 30, 2008 SUBMITTED BY: DIRECTOR OF FINAJ,\)CE/TREAS,-JRER G~ INTERIM CITY MANAGER S"l DEPUTY CITY MANAGER W 4/STHS VOTE: YES D NO ~ REVIEWED BY: SUMMARY Section 504 (f) of the City Charter requires quarterly financial reports to be filed by the Director of Finance through the City Manager. ENVIRONMENT AL REVIEW The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that filing of the quarterly fmancial status report is not a "Project" as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change to the environment; therefore, pursuant to Section l5060(c)(3) of the State CEQA Guidelines the actions proposed are not subject to CEQA. RECOMMENDATION That Council accepts the report. BOARDS/COMMISSION RECOMMENDA nON Not Applicable DISCUSSION Attached for your consideration is the financial report for the first quarter of fiscal year 2008/09. The detailed financial report for the quarter ending September 30, 2008 discusses the financial outlook for the City's General Fund for the remainder of fiscal year 2008/09. 4-1 November 17, 2008, Item 4- DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by accepting tbis'report and has determined that it is not site specific and consequently the 500 foot rule found in the California Code of Regulations section I 8704.2(a)(l) is not applicable. FISCAL IMPACT The City's General Fund ended the fiscal year 2007/08 with an available balance of $9.3 million or 6.1 percent of the operating budget. For fiscal year 2008/09, due to the significant slow down in tbe economy and tbe continued housing crisis as well as the credit crisis, several major revenues are being adjusted downward by a total of $5.5 million or 3.8 percent of total budgeted revenues. ~~:1;'~~;~~?'~~:J(t~O:O_8/0~3~$:~i~ e _u:ela, go. 1tm~ai:J,(fg:~f~?t#i~~P:ror~~Gte:a~ Discretionary Revenues Sales Tax $ 29,678 $ 26,890 ($2,788) Property Tax 30,232 29,932 (300) Motor Vehicle License Fee 20,216 20,134 (82) Franchise Fees 8,732 9,663 931 Utility Users Tax 7,122 7,122 0 Transient Occu anc Tax 2.753 2,753 0 Subtotal $ 98,733 $ 96,494 ($2,239) Programmatic Revenues Development Revenue $1,966 $1.265 ($701) Licenses and Permits $518 $561 $43 Fine, Forfeitures & Penalties $1,494 $1.722 $228 Use of Money and Property $2,421 $2,053 ($368) Other Local Taxes $2,164 $2,148 (516) Police Grants $1,823 $1.775 ($48) Other Agency Revenue $3,520 $3,206 ($314) Charges for Services $6,335 $6,248 ($87) Interfund Reimbursements $8.916 $8,062 ($854) Other Revenues $2,701 $2,747 $46 Transfers From Other Funds $12,272 $11,048 $1,224) Subtotal $ 44,130 $ 40,835 ($3,295) Total Revenue Shortfall $ 142,863 $ 137,329 $ (5,534) Offsetting some of the revenue shortfalls are anticipated savings of approximately $1.6 million due to tbe administrative freeze imposed in the second quarter of the current fiscal year. Taking this into account the current year projected budgetary gap is approximately $4.0 million as reflected in the table below. ra Reserves - July 1, 2008 Projected Revenues & Transfers In Expenditures & Transfers Out Projected Deficit Projected Fund Balance as of June 30, 2009 Percentage of Operating Budget -'~'\"""'-"J'-"a',':-"':~T;:t' ,;J;qJ~~,.,g".,;_~J~~1~ riltiI(\1'H:sl~~'!ili1 9.3 137.3 141.3) $ 4.0) $ 5.3 3.5% 4-2 November 17, 2008, Item ~ ATTACHMENTS Attachment I - Quarterly Financial Report Prepared by: Phillip Davis, Assistant Director of Finance, Finance Department 4-3 ~(~ -...- ..._-~- ~ ...".,..- - - - - -- CllY OF CHUlA VISTA OVERVIEW This financial report summarizes the City'S General Fund financial position for the fiscal year for July 1, 2008 through September 30, 2008. The purpose of this report is to provide the City Council, Management and the Citizens of Chula Vista an update on the City's fiscal status based on the most recent financial information available. ECONOMIC UPDATE National News The Treasury and Federal Reserve enacted several programs in order to promote more liquidity and confidence in the battered financial system. These actions are beginning to have an impact and there are some signs of improvement in the credit markets, most notably a drop in the London Interbank Offered Rate (L1BOR). Yet, amid a global slowdown and reduced spending, the U.S. economy contracted 0.3% in the third quarter. Continued weakness is expected through 2009 as the job market weakens and consumer confidence deteriorates. Increasingly worried about the labor market, consumers were reportedly more pessimistic in October as unemployment swelled to 6.5 percent in October from 6.1 Cans:Jmer CDnfidenc~ lnd9:x1.... percent in the previous month, the highest level in 14 years. This surge in unemployment has prompted economists to forecast continued deterioration in the labor market. For that reason, the Conference Board Index of Consumer Confidence scored a new record low of 38, down from 61.4 in September. Economists believe this decline in confidence will result in a steep drop in consumer spending in the fourth quarter. so 65 50 :J.5 F t.~ ~ ';.1 J' J' A S 0 Retail sales declined 1.2% in September, the largest decline in three years. Much of this decrease occurred in the automobile sector due largely to the poor credit environment and low consumer confidence. U.S. automakers posted the iowest ievel of auto sales in 17 years. Quarterly Financial Report - General Fund First Quarter Ending September 30, 2008 November 17, 2008 The malaise in the housing market also continues to be a significant drag on the economy. Home sales for both new and existing homes staged a modest increase of 2.7% and 5.5% respectively in September. These increases are mostly attributed to distressed home sales. Lower home prices may make homes more affordable and attractive to potential buyers, but enthusiasm for the housing market remains tempered because of elevated inventories, a dire employment situation and tight credit markets. Local News The University of San Diego's Index of Leading Economic Indicators for San Diego County fell 0.8 percent in September. Leading the way to the downside was a surge in initial claims for unemployment insurance and down considerably were building permits, local stock prices, and consumer confidence, while there was a more modest loss in help wanted advertising. September's drop marked the 29th time in 30 months that the USD Index has dropped. San Diego Index of Leading Economic Indicators 150.0 145.0 140.0 135.0 130.0 125.0 120.0 115.0 110.0 105.0 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 There is no change in the previously reported negative outlook for the local economy through the first half of 2009. What is needed to turn the economy around both locally and nationally is stability in the housing market. . Falling prices and a jump in foreclosures have hurt both. the labor market and the financial markets and institutions. The recent increase in home resales is a positive sign, but a bottom in the housing market is not likely to be reached until the latter part of 2009, and home prices are not expected to increase until 2010 at the earliest. 4-4 QUARTERLY FINANCIAL REPORT FIRST QUARTER OF 2008-09 Page 2 of 4 GENERAL FUND SUMMARY City Council Policy No 220-03 recommends the City maintain at least an 8 percent reserve level. As of June 30, 2008, the General Fund reserve level was at 6.1 percent (unaudited). ~1't~~t~ffl!~~!i.~!l.!~~i'%t~b\\i~t~ii,f~1m~~~~' Reserves - July 1, 2008 (unaudited) S 9.3 $ 9.3 Revenues & Transfers In 142.9 137.3 Expenditures & Transfers Out (1429) (1413) Projected Deficit $ S 4.0 Fund Balance as of June 30, 2009 $ 9.3 $ 5.3 Percenta e of 0 eratin Bud et 6.1% 3.5% For fiscal year 2008/09, because of the credit crisis and housing market meltdown, the economy continues to worsen and a General Fund deficit of $4.0 million is currently projected. A projected revenue shortfall composed of discretionary revenues ($2.2 million) and programmatic revenues ($3.3 million) totaling $5.5 million is partially offset by projected expenditure savings of $1.6 million. The projected savings are reiated to a citywide administrative freeze on all discretionary spending such as travel, conferences, memberships and vehicle purchases. These projections will continue to be revised as updated financial information becomes available. Revenues For the first quarter, several discretionary revenues are being adjusted downward by $2.2 million. A brief discussion of the revised revenue projections will follow. %;>k*lft~+;,E,Y;2008/09ii1~I~.i,t~;~ ';g:~Bi.i"d"-'ef~ ,!;,GPr.o~eCted';~ $ 29,678 $ 26,890 30,232 29,932 20,216 20,134 8,732 9,663 7,122 7,122 2,753 2,753 $ 98,733 5 96,494 Sales Tax Property Tax Motor Vehicle License Fee Franchise Fees Utility Users Tax Transient Occuoanc Tax Total ($2,788) (300) (82) 931 o o (52,239) Reflected in the chart below are departmental programmatic revenue adjustments of $3.3 million. These adjustments are necessary due to continued declines in development related revenues, grant reductions, capital improvement project revenues and other fees for city services. ~.ti'i{:(,J5';@IWFY;:2008/0g-t;~1,t1;~~ ~;Bfi"i:fee!j; $1,966 $518 $1,494 $2,421 $2,164 $1,823 $3,520 $6,335 $8,916 $2,701 $12,272 $ 44,130 $ Development Revenue Licenses and Permits Fine, Forfeitures & Penalties Use of Money and Property Other Local Taxes Police Grants Other Agency Revenue Charges for Services Interfund Reimbursements Other Revenues Transfers From Other Funds Total $1,265 $561 $1,722 $2,053 $2,148 $1,775 $3,206 $6,248 58,062 $2,747 $11,048 40,835 ($701) $43 $228 ($368) ($16) ($48) ($314) (587) ($854) $46 $1.2241 $3,2951 Property Taxes. The City of Chula Vista receives property tax revenue based upon a 1.0 percent levy on the assessed value of all real property. Property tax is the City's largest revenue source, representing 19.1 percent of the General Fund revenue in fiscal year 2007/08. The City's assessed value grew at historical rates until recently with the largest percentage increase of 20 percent occurring in fiscal year 2005/06. Based on the June 2008 County Assessor's Annual Valuation Report for fiscal year 2008/09, the assessed value in Chula Vista grew by only 2.21 percent due to a combination of increased commercial values, addition of the SR125 toll road to the tax roll and the drop in residential assessed values. ~ 0 I < f ~ 0 < < . f The fiscal year 2008/09 Property Tax budget anticipated a 3.9 percent increase. The current projections for Property Tax are being adjusted downwards by $300,000 to reflect the final Assessors value of 2.21 percent. 4-5 QUARTERLY FINANCIAL REPORT FIRST QUARTER OF 2008-09 Page 3 of4 Property Tax Delinquency Rate 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0,0% FY98/99 FY01l02 FY04I05 FY071D8 Having more of an immediate impact on property tax revenues are the property tax delinquency rates that continue to climb as the sub-prime mortgage crisis is leaving many homeowners with mortgages that are greater than the current value of their homes. As seen in the chart, the delinquency rate has more than doubled from an average of 1.7 percent for fiscal years 1998/99 to 2004/05 to 3.96 percent for fiscal, year 2007/08. The median home price in the City has dropped significantly from September 2007. Recent sales data indicates that the median price drops range as high as 37.8 percent in the City. For example, the southeast part of the City has seen a decrease of (20.7) percent while the northeastern part of the City has suffered a (37.8) percent drop in median price. North South Eastlake NE SE ;\~~I~~:~~'Mea i;in~p,ric'eHt~i!k1)'S~ ;Et~~~1~-~:r.J11 sirt;2007W/Se'f'200a:f ?"tCnai'!,'el? $400,000 $310,000 -22.5% $ 376,000 $ 250,000 -33.5% $435,250 $340,000 -21.9% $812,500 $505,000 -37.8% $512,000 $370,000 -20.7% Source: San Diego Union Foreclosures are having an additional negative impact on property tax revenues in the City by depressing housing values. The drop in assessed values has triggered Proposition 8, a constitutional amendment passed in 1978 that allows a temporary reduction in assessed value when real property suffers a "decline- in-value". Therefore, as assessed values fall, homeowners can apply for a reassessment of their homes which would lead to a reduction of property taxes based on the lower assessment. Many of these downward reassessments may not appear on property tax bills until next fiscal year requiring further adjustments to the fiscal outlook. 4-6 Sales Tax. Sales tax is the City's second largest revenue source, representing 18.5 percent of fiscal year 2007/08 actual revenues. City staff met with the City's sales tax consultant, MuniServices, to review the most recent sales tax revenues. They report that the change in sales tax receipts between second quarter 2007 and the second quarter 2008 decreased by 3.1 percent Statewide, by 4.0 percent in Southern California and 2.9 percent in Chula Vista. 15.00% 10.00% ;00% 0.00'% 500% _1000% ",1500'% .20.OC% 1 ~ ~ :& " " " < ~ , - . , i ~ " ., ~ , , l , , < , , The above chart compares Chula Vista's sales tax with that of other jurisdictions in the County during the second quarter of the calendar year. The chart below depicts the City's sales tax history from fiscal year 1999/2000 to the end of the current fiscal year. For (;1 . = Sales T~)( History PI" l'"9ICQt~FYlOOll/(l' m Pl0;.e1.d ,"",' ] '" " " i'Y':1iHOO FYQ0I01 FYQ,102 ...,,02103 FY03ia4 FYC<IC5 FY~OIl FY06JW rYorlC1l FY=9 current fiscal year 2008/09, the projection reflects a QUARTERLY FINANCIAL REPORT FIRST QUARTER OF 2008-09 Page 4 of 4 decrease of 5 percent from the prior year actual amount received. Motor Vehicle License Fee (VLF). With the State Budget_Act of 2004, the allocation of VLF revenues to cities and counties was substantially changed. For FY 2005/06 and beyond, the majority of VLF revenues for each city will grow essentially in proportion to the growth in the change in gross assessed valuation. Due to the new formula that relies on assessed valuations and the decline in automotive sales this revenue source has been adjusted downward by approximately $82,000. Franchise Fees. The revenue projection is being revised upward by $900,000 based on actual amounts received in fiscal year 2007/08. Utility Users Tax (UUT). Revenues are budgeted at $7.1 million, which is $250,000 less than actuals for fiscal year 2007/08. No change in the projection is anticipated pending the outcome of the lawsuits that are currently moving through the courts. Development Related Revenues. Development related revenues are being adjusted downwards by $700,000 due to the continued deterioration of the housing market. Interfund Transfers & Reimbursements. Interfund Transfers and reimbursements are being reduced by $1.2 million due to revised gas tax projections, loss of library grant funds, and reduced staff time reimbursements from the sewer and development impact fee funds. Expenditures City Clerk City Attorney Administration Information Technology Human Resources Finance Non-Departmental Planning and Building Engineering Public Works Police Fire Recreation Library Total General Fund 1,311,626 14,736 971,934 2,431,634 4,252.892 3,824,199 4,776,085 2,737,944 5.364.967 2,479,239 4,704,653 24,717,673 47,990,954 22.800,987 6.387,961 8.083.924 $142,851,408 18.8% 25.7% 17,9% 13.8% 20.1% 23.7% 30.2% 19.9% 67.8% 19.6% 20.5% 19.8% 20.1% 22.0% 20.7% 21.5% 22.5% 246,241 3,780 174.148 334.729 856,370 904,782 1,441,505 545.660 3,639,183 487,127 966,698 4,882.601 9,645,533 5.006.601 1,322,996 1,738,187 $32,196.141 The General Fund's Amended Budget refiects the Council adopted budget of $142.3 million and all mid- year appropriations (5507,999) approved by City Council. Actual expenditures to date are reflected in the chart above. It indicates that Departments have expended 22.5 percent of the General Fund bud~et after 25 percent of the fiscal year has elapsed. The following table shows the General Fund departments with their amended budgets and the projected expenditures for the fiscal year. The projected expenditures anticipate savings of approximately $1.6 million. City Council 1,311,626 Boards/Commissions 14,736 City Clerk 971,934 City Attorney 2,431,634 Administration 4,252,892 Information Technology 3,824,199 Human Resources 4,776,085 Finance 2,737,944 Non-Departmental"" 5,364,967 Planning and Building 2,479,239 Engineering 4,704,653 Public Works 24,717,673 Police, 47,990,954 Fire 22,800,987 Recreation 6,387,961 Libra 8,083,924 Total General Fund $142,851,408 ..... Reflects Budgeted Salary Savings 1,311,626 14,736 869.682 2,083.091 3,934,157 3.588,493 5.592.564 2.652.963 7.826.304 2,470,597 4.608,090 23,298,202 46,986.017 22.304,547 6,177.302 7.568,179 $141,286,550 o 102.252 348,543 318,735 235,706 -816,479 84.981 -2.461,337 8,642 96,563 1,419,471 1.004,937 496,440 210,659 515,745 $1,564,858 Mid-Year Budget Amendments Mid-year appropriations during the quarter totaled $507,999 with offsetting revenues of $520,284 for a net positive impact of $12,285. The appropriations were for the In-Custody Drug Treatment Program at the jail, CORR Racing overtime reimbursement for fire and police personnel, a donation to the Animal Care Facility, the addition of two code enforcement officers and a police grant to reduce street racing. In Custody Drug Treatment Program CaRR Racing Overtime Reimbursement _ Police CaRR Hacing Overtime Reimbursement- Fire Donation to Animal Care Facility Addition of Two Code Enforcement Officer II Positions Street Racin Crackdown Grant Total of 1 st Quarter Bud et Amendments '0 $5,572 $6,713 '0 '0 '0 $12,285 Budget Transfers There were no administrative budget transfers during the first quarter. 4-7 ITEM NO. 5. NO WRITTEN MATERlAL PROVIDED ~ CITY COUNCIL AGENDA STATEMENT ~(~ CITYOF 1t ... (HULA VISTA NOVEMBER 17, 2008, Item~ ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPOINTING THE CITY'S MAl'lAGENlENT TEAlv! FOR THE PURPOSE OF NlEETING A}'JD CONFERRING WITH THE CITY'S EiYIPLOYEE ORGAl'IIZATIONS DIRECTOR OF HUM. AN RESOURCESf(ff- INTERIM CITY MAi'lAGER '? ') DEPUTY CITY MAl'lAGER vi SUBMITTED BY: REVIEWED BY: 4/5THS VOTE: YES D NO I X I SUiVIMARY Tbe Meyers-Milias-Brown Act (MMBA) as contained in California Government Code sections 3500-35! 1 provides for tbe orderly administration of employer-employee relations. It states tbat a public agency may adopt reasonable rules and regulations for recognizing employee organizations and for meeting and confemng with tbose organizations regarding wages, bours, and otber terms and conditions of employment. ENVIRO!'<'NIENTAL REVIEW Tbe Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined tbat there is no possibility that the activity may have a significant effect on the environment because it does not involve a physical cbange to the environment; therefore, pursuant to section 15061(b)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Tbus, no environmental review is necessary. RECOiVINIE"''DATION Council adopt tbe resolution. BOARDS/COMMISSION RECOMMENDATION Not applicable. DISCUSSION Pursuant to tbe MMBA, the City of Cbula Vista, as a public agency, by and througb tbe City Council, is autborized to designate a Management Team as its representative for the "Meet and Confer" process. Adoption of the proposed resolution, deemed necessary and appropriate to revise the list of designated members of tbe Management Team for the Meet and Confer process due to recent changes in personnel, accomplisbes this. 6-1 NOVEiYfBER 17,2008, Item_ Page 2 of3 DECISION MAKER CON'FLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California Code of regulations section 18704.2(a)(l) is not applicable to this decision. FISCAL IMP ACT None. ATTACHMENTS Resolution. 6-2 RESOLUTION NO. 2008- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPOINTING THE CITY'S MANAGE1'l.ENT TEAJv{ FOR THE PURPOSE OF Nl.EETING AND CONFERRING WITH THE CITY'S EMPLOYEE ORGAJ"lZA nONS WHEREAS, the "Meyers-Milias-Brown Act" (MMBA) as contained in California Government Code sections 3500-3511 provides for the orderly administration of employer- employee relations; and WHEREAS, the I'vfMBA provides that a public agency may adopt reasonable rules and regulations for recognizing employee organizations and for meeting and conferring with those organizations regarding wages, hours, and other terms and conditions of employment; and WHEREAS, pursuant to the MMBA, the City of Chula Vista, as a public agency, by and through its City Council, is authorized to designate a Management Team as its representative for the "Meet and Confer" process; and 'vVHEREAS, as a result of recent changes in personnel, it is now deemed necessary and appropriate to revise the list of designated members of the Management Team for the Meet and Confer process. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Chula Vista, that pursuant to the MMBA and the City's Employer-Employee Relations Policy, the following persons are designated as members of the Management Team for purposes of meeting and conferring with the City's recognized employee organizations: Scott Tulloch, Interim City Manager Marcia Raskin, Director of Human Resources Bart Miesfeld, Interim City Attorney Rod Betts, Outside Counsel Maria Kachadoorian, Director of Finance Edward Van Eenoo, Deputy City Manager/Director of Budget and Analysis Leah Browder, Deputy City Manager !Director of Library Submitted by Approved as to form by /Id -;;(/"7 r //",,<7 if:~~ ~Miesfel9,// // / teri?O/Attorrrey Marcia Raskin Director of Human Resources 6-3 ./ GAYLORD ENTERTAINMENT' Bennett Westbrook. SCllirr I.'i(( PrcsidclIl, DCI'dol'lI!('JlI. Dni.~n & C{>1I5In/oiNI November 15, 2008 The Honorable Cheryl Cox, Mayor City Council Members City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910 The Honorable Sylvia C. Rios, Chairperson Board of Port Commissioners Port of San Diego P.O. Box 102488 San Diego, CA 92112-0488 Dear Mayor Cox, City Council Members, Chairperson Rios and Port Commissioners, It is with great disappointment that I write this letter to inform you that Gaylord is discontinuing its plans to develop a resort and convention center project on the Chula Vista bayfront. This has been a complex and challenging project which started with our joint efforts to overcome a complicated regulatory and legal structure, as well as conflicting community interests. While we have made many strides on these fronts, we have been unable to overcome perhaps the biggest hurdle of the project - funding the enormous infrastructure costs associated with the bayfront redevelopment in a manner that will generate adequate financial returns for Gaylord, the Port, and the City. From the outset, we knew that overcoming this obstacle was a tall order. As we have jointly dedicated significant internal and external resources to analyze all possible alternatives, we have concluded that there is no workable solution despite our collective best efforts. This conclusion is amplified all the more by the current tumultuous economic environment. We are profoundly disappointed at this ultimate result, as we have no doubt that a Gaylord facility would operate very successfully in Chula Vista. However, we are confident today that this is the correct decision for our company and shareholders. I want to express our sincere appreciation for the hard work that you and your teams have contributed in leading this effort. We have developed great respect for Mayor Cheryl Cox, Bruce Hollingsworth and their respective leadership boards and staff. This Gaylord Emertainmem Company One Gavlord Drive, Nashville. TN 37214 Telephone 61'5-316-6436 Facsimile 615-3]6-6557 Em;]i]; bwestbrook@gaylordemertJimnem.com ('!1' r Letter to Port and City November 14, 2008 Page 2 unfortunate outcome is notwithstanding the best efforts of all parties involved to make this project a reality. On a personal note, I have truly enjoyed getting to know each of you and regret that this decision marks the conclusion of our work together on this project. Bennett Westbrook cc: Randa Coniglio Denny Stone , n,." . (;A'y LOR!..' F.'t-ffEk'rA(NMlS!'-~T-' EMBARGOED RELEASE: 6:00 p.m. CST GAYLORDENTERT~ENTTERNITNATESPLANSTODEVELOPA RESORT AND CONVENTION HOTEL IN CHULA VISTA, CALIFORNIA NASHVILLE, Tenn. - November 17, 2008 - Gaylord Entertainment (NYSE: GET) today announced the tennination of its plans to develop a resort and convention hotel in Chula Vista, California Prolonged planning and approval processes, a complicated regulatory and legal structure, and excessive off-site infrastructure costs contributed to this decision. "We are very disappointed to have made this decision since the greater San Diego region is such an important convention market," said Colin V. Reed, chairman and chief executive officer of Gaylord Entertainment. "However, over the last year to J 8 months, this project has become much more complicated and risky as infrastructure costs escalated and the time line for the hotel was extended by the very complicated and prolonged approval process. While many will likely attribute this announcement to the rapidly deteriorating economy, the fact is that the compiexity and costs of the project were the main drivers of this decision." "Through this process, we have come to know and respect the leadership ofChula Vista and the Port and thank them for their efforts and support," said Reed. The decision regarding the COOla Vista project today has no bearing on Gaylord's other announced development initiatives. Gaylord will be taking a non-cash impairment charge of approximately $5 million in the fourth quarter for costs incurred to-date on the Chula Vista project. About Gaylord Eutertainment Gaylord Entertainment (NYSE: GET), a leading hospitality and entertainment company based in Nashville, Tenn., owns and operates Gaylord Hotels (www.gaylordhotels.com). its network of upscale, meetings-focused resorts and the Grand Ole Opry (www.opry.com). the weekly showcase of country music's finest performers for more than 80 consecutive years. The Company's entertainment brands and properties include the Radisson Hotel Opryland, Ryman Auditorium, General Jackson Showboat, Gaylord Springs Golf Links, Wildhorse Saloon, and WSM-AM. For more information about the Company, visit www.GavlordEntertainment.com. I ,.., .';0.., :<': ')<:.' :- ,:!~ / This press release contains statements as to the Company's beliefs and expectations of the outcome of future events that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include the risks and uncertainties associated with economic conditions affecting the hospitality business generally, the timing of the opening of new hotel facilities, increased costs and other risks associated with building and developing new hotel facilities, the geographic concentration of our hotel properties, business levels at the Company's hotels, our ability to successfully operate our hotels and our ability to obtain financing for new developments. Other factors that could cause operating and financial results to differ are described in the filings made from time to time by the Company with the Securities and Exchange Commission and include the risk factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007. The Company does not undertake any obligation to release publicly any revisions to forward-looking statements made by it to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events. ### Im'e8tor Relations Contacts: lrfetlia Contacts: Mark Fioravanti, Senior Vice President and Brian Abrahamson, Vice President of Corp. Treasurer Communications Gaylord Entertainment Gaylord Entertainment (615) 316-6588 (615) 316-6302 mfioravantir7iJp"aylordentertainment. com babrahamson@"avlordentertainment.com .....or- -or""' Rob Tanner, Director Investor Relations Josh Hochberg Gaylord Entertainment Sloane & Comoany (615) 316-6572 (212) 446-1892 )1annerr7iJ"av lordentertainment. com ihochberq@sloanenr.com 2 ~-e""'~'i>3"'\'C> ~D\.\C- ~~,""f'''~ ,-\;17/08 San Diego-Imperial Counties Labor Council AFL-CJO For Immediate Release Media Contact: Evan McLaughlin, Political Director 619-850-2790 cell Statement on Gaylord Decision to Withdraw from (hula Vista (Monday, Nov. 17, 2008) -- Lorena Gonzalez, secretary-treasurer/CEO of the San Diego and Imperial Counties Labor Council, AFL -C/O, released the fal/owing statement today regarding the decision by Gaylord Entertainment to withdraw its plans for the Chula Vista bayfrant. NOTE: Please view the attached letter from Gaylord Entertainment, which is referenced in the statement by Ms. Gonzalez. "It is unfortunate Gaylord Entertainment will not be pursuing its proposed development of a convention center and resort on the Chula Vista bayfront. "Despite several heated moments throughout the course of negotiations, we were pleased with the progress of negotiations related to the project's construction, operation and environmental standards. Before today's news, the Labor Council was very optimistic that Gaylord's proposal was on its way to becoming a world class destination, save for the financing. Judging from the comments in the company's letter to me today, it seems as if Gaylord agrees: This project failed for reasons related to the larger national financial crisis, not because of labor negotiations. "The Labor Council and its affiliated unions continue to maintain that all communities should expect companies to make real commitments to job quality and environmental preservation and sustainability in exchange for large investments of tax dollars and prime public-owned land. "If there is a silver lining in this experience, it's that Gaylord recognized this and ultimately made a good-faith effort to pursue agreements that would have resulted in a project that would have made the community proud. "Should Gaylord want to re-entertain its proposal at any time in the future, or should the Port District or the City of Chula Vista look to continue the proposal with another developer, organized labor would be happy to build on the progress we've made to turn the Chula Vista bayfront into a winning solution for workers in the community." The San Diego-Imperial Counties Labor Council, AFL-C/O, is a coalition of 124 locol unions that represent 120,000 working families in the region. The Labor Council strives to ensure that 01/ workers in the region earn a fair wage and health core for their families. LORENA GONZALEZ, Secretary- Treasurer MICKEY KASPARIAN, President 4305 University Ave., Ste. 340. San Diego, CA 92105. (619) 283-541 I . Fax (619) 283-2782 . www.unionyes.org @~665 , '. \ '\ I" ,,~ :::,"\l- I ~,. GAYLORD ENTERTAiNMENT' ~1'\.' ') J' . ,( " Bennett Weubroolc. Sr.lior I.'if.. I'r('Jiol!'rll. Otllr/"P"'''''I. Dtt~~" & CO"HfI!(lioll November 15, 2008 Lorena Gonzalez Secretary - Treasurer San Diego - Imperial Counties Labor Council 3717 Camino Del Rio South San Diego, CA 92105 Tom Lemmon Business Manager San Diego County Building and Construction Trades Council 3737 Camino Del Rio South Suite 202 San Diego, CA 92108 Dear Lorena and Tom, It is with great disappointment that I write this letter to inform you that Gaylord is discontinuing its plans to develop a resort and convention center project on the Chula Vista bayfront The Chula Vista project has proven to be very complex and challenging and we have made many strides in addressing the major obstacles before us, Unfortunately, we have been unable to overcome perhaps the biggest hurdle of the project - funding the enormous infrastructure costs associated with the bayfront redevelopment in a manner that will generate adequate financial retums for Gaylord, the Port, and the City of Chula Vista. From the outset, we knew that finding a mutually beneficial way to fund the infrastructure was a tall order. The Port, City and Gaylord committed significant internal and external resources to analyze possible solutions. Nevertheless, we have concluded that there is no workable solution despite our collective best efforts, This is amplified all the more by the current tumultuous economic environment. We are disappointed at this ultimate outcome today, as we have no doubt that a Gaylord facility would operate very successfully in Chula Vista. We do take satisfaction in knowing that Gaylord and your respective organizations collectively resolved our major differences and were down to the final steps of documenting our mutual G;lylord Enten~illmcllt Comr~lIY One G.lvlonl Drive, N;l~h\'ille, TN 37214 Telephone 61.5~J]6-6436 Fa<:~jlllilc 6IS~3IG-0557 Email: bWe5tbrook@~'1ylordemertOlilllllent.colll ...~ Letter to Lorena Gonzalez and Tom Lemmon November 15, 2008 Page 2 agreements. There will likely be people who would like to place the blame for the failed project at the door of organized labor but that simply is not the case. Yes, we had our differences and things got a little heated. At the end of the day, though, we were able to come together and find common ground, and for that we thank you. We regret that we are not going to have the opportunity to work with you to launch the Chula Vista project and realize its significant benefits. We wish you the best of luck in your future endeavors. Bennett Westbrook '. . Regional Economy . Housing Market . Chula Vista Property Assessed Values . Fiscal Year 2008-09 Quarterly Report . Fiscal Year 2009-10 General Fund Overview . 5-Year General Fund Projections . Development Services Fund Budget . Redevelopment Agency Budget . Budget Balancing Options 1 ~ . Declining Sales and Property Tax revenues . Rising labor costs . $5.5 million revenue shortfall in General Fund projected in current fiscal year offset by $1.6 million in expenditures savings - projected gap totals $3.9 million . $19 million General Fund gap projected for FY 2009-10 . Shortfalls also exist in DSF and RDA . Long term solution will require permanent expenditure reductions and/or revenue enhancements ./ Labor and employee briefings ./ Employee focus group ./ Employee suggestions and involvement . November 17 Workshop - Budget overview and balancing options . Community and labor briefings . December 4 Workshop - City Manager's Proposed Budget Reduction Plan . December 9 and 16 Council Meetings . January 6 Workshop - Council approval of Budget Reduction Plan 2 Interfund Reimb. 6% Transfers In 8% Franchise Fees 7% Utility Users Tax 5% TOT 2% Charges for Svcs __________ 5% Other Revenu~ Other Local Tax 9% 2% [?)J~@@@ 3 -Cli;~' ~~~~~<ftW","-"~~i'-~r:'~' :L"fi"2'",'I~~ ~;~,,~ 'J~jT~~~"-~,,,; .~ ' ';ii'ste~Dfe~m;I~S"stss~e~l~~~1 :. ;'~;z-t~1Jt-;-;~~1t:~~~;#AG0~;'"i-- b:~,~~.7,: i)"':::l;~::~;'~r~,:tr;: ;;--, ~ f4'c',."-~:,; ~fjnual;:Percei1tage(}hah'ge',:';' ~ -' " ;'t~:IT2(,;)(Anm;Jl~ki;;:?ti,At-' ,.~:;i&~;tc't:';~~3i:h;(;;d%,:;ijHj;;ti!KltN~\N?!im;LijjH!t,j,i City versus County Overall 25% 20<'>/<.> "Bad,'ee' . :;::"b;J;:~~;~i;:<~';~Jr~4#~ 'pj~rbCol!htY~;;!t2.~ol.ol! ,,>,,...-;; 15% 5% -.-.---- 10% 0% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 -a- Chula Vista ........ County Overall [?):7~@:ID@ FY 2007-08 vs. FY 2008-09 8% ;IBlftrd!~t'as's(lm" - Hbns~:':'- '3. ",:Z'\,,,~J 1,~:"~sr,.: . ~~ '~,0WA;?h ".: . ;R~~~jf~:p"~pj~'cti~~'''- 12% 10% 6% 4% 2% 0% . -2% " 0 0 <n z <n m m r '" '" 3" < " r '" 0 " <n " 0 ~ 0 ~, . 0 " . . " '" 0 ro 0 ~ . a .- 0 0 0 " 0 " " ro 3 0 0 0 " '" 0 0 5 0 m 0 ~ . 0 J1:, .- 0 0 0 " 0 ro 0 ~ " ~ . . . "- .' &' 0 . ro 0 !!I ;;: 0 0 < ,~ 0 '" . 0 0 0 ~ " 0 '" " G) ~ [?):7~_ ro Q 0 0 <': ro a . ro 0 <': . < 0 0 ro 0 4 /" 2'd Qtr Calendar Year (April - June) 15% 20% 10% 5% -5% 1lI.'(: 0% I' ft.nnDT.T~ u~~'=~_ j rit' I' - I ___ _________ __ ________________ ____ ____ -10% -15% -20% Source: MuniServices z r 0 " <n :;:' r <n '" m <n " " <n < <n 3 0 " ~ . "- ~ ~ . 0 0 . ~ 0 ~ . . 0 0 3 0 " .- " 0 0 c .- 0 ~ . a 0 g " . " 0 0 .., 5' 0 .- .- 0 0 . 0 ~ 0 ~ . 0 ~. . rr 1[ 0 0 ~ ~ . ~ . < . .' " . " " 0: . rn 0 ~ .' ~ ~ 0: ~ $ a 0 . 0 0 rn . 0 ~ . ~ . < 0 " . . 0 g 0 0 0 [fl7~@@@ " 2'd Qtr Calendar Year (April - June) Food Products 17% Construction 7% Business to Business 4% [fl7~@@@ 5 State 6.00% State Fiscal Recovery Fund 0.25% *City/Local Government 0.75% Local Transportation Fund 0.25% Local TransNet Funding 0.50% .~~iW~~~;~.ffilOOJ!f,{K'~)}3r!A~'i~:{~~i~.l~~JZ:5~o 'The remaining 0.25% is allocated to Local Govt. by the County. ~~@@@ r#'""'qk"''i'~1'l11'''''iY-ii!~'.'"~-:v.~;I''<UV:~''1-~;:':;'''-''''t';'''l'''lIl'W;h'~' r :'r~~fifpl~~tlwIS'al~s>,~' .'. L","1;::tEilill;';'.,J":,%i3ii<~5'~Y':;"S'fi:<f~~;/*jf~Jcl'l:t;;':jl~p,,~':' :~ l\,.'l:'l'\li"'!'~'d."'___I'_' Q;l'1kw !,.i!i;il^,.,-'n"t"*-,''''''J;M'+/~J.';;;'' w~"" t 'tUlUa Yryen::ell at:le . ".a I a . . ...."..",.'"'.~. ....",.""")fhs.-_~,.;.-..~.-~~..," ~~.. ,.t:.".v;", ,"0 '. . -,.,,'!'- !fu.J~_:t O:--,_~'1;';;._ A~~ ,~.=t'.k.,,:z.:w:...;;_ .:,~-.__:s:;'l,_,'::... 14% - 12% 10% 8% 6% 4% 2% 0% . -2% -4% -6% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008' * The last two sales quarters for 2008 have been estimated ~~@@@ 6 . o .~ :;; $20.0 $15.0 $10.0 $5.0 $0.0 FY 04-05 FY 05-06 FY 06-07 FY 07-08 FY 08-09 mil MVLF-in-Lieu 0 MVLF [?)J~@@@ . $12.0 0 .~ :ii $10.0 $8.0 $6.0 $4.0 $2.0 $- 2005 liD Trash/Cable 2006 2007 2008 2009 (3 Energy - Consumer EI Energy ~ Power Plant [?)J~@@@ 7 ~~:iK1\:'t~~r~l1lllilll?1l.~mr.~nt:j::';;:~~ft?j!'Jl~;;'taW!,N'lt~,;_ :rm::\i,jf(~~1;~;!'-~;~lTIfmf~l;;f10l~~ Sales Tax Property Tax Motor Vehicle License Franchise Fees Public Safely Sales Tx Interest Earnings Development Related Rev Staff Time Reimbursements From +2% to -5% S From +3.9%> to 2.2% S From +2.9% to 2.2% $ Based on FY 08 actuals $ Public Safety STx. $ Reduced cash flow assumptions & interest rates S Zoning Fees, Perm its S PFDIF and Sewer Fund $ Revenue Adjustments $ Departmental Exp Savings Public Liability Expenses Administrative Freeze Higher than normal expenses Expenditure Savings Estimated Deficit FY 2008-09 $ $ $ (2,788,000) (300,000) (82.000) 931,000 (148,000) (368,000) (701,000) (2,078,000) (5,534,000) 2,800,000 (1,200.000) 1,600,000 $ (3,934,000) ~~@@@ 'p'ectea Jll;"YM/_.;4i. .. illi9il~) 9.3 137.3 (141.3) $ (4.0) Projected Fund Balance as of June 30, 2009 Percentage of Operating Budget $ lGeneral Fund impact assumes no mid year corrections. 5.3 3.5% ~~@@@ 8 30% 15% iff t'i 10% ',J 5;;' ~ fl ~ 'iit 'J~' 5% Wi' 1:::! k~ 'it 0%-, !ill- Ii,,; ;.~ ~i ~ )~iI~ ~ :il ~ ~ 8% llif ;;: ;'l( ~;f ~ 0/, >,., ,t ) ffil" 0!' ~!i ~ ,~; 'l~ .1 ! 1m "": !~ "~' ~; ~ ~.j ~8 r'<: fI: .,., ~,~~)Kt 0J,' i'!: 'lill ,t. i"~ ':m ~, ~, ~j g!{ "" j 25% 20% 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 Council 8% Reserve Policy approved in 1996 [fU~@@@ ":..,pn.;;;;FI,"""c"R,-"c,'1l"':2."''''-'_'Y-il;''-'",' "~.\\"-11- ~~ ~7~47" = .' '~T "'~~ ea'sl:i:~es\'f9;,f ,4t_ ,,, Ir'e _4 -'~ :':l1i"~r:eh'tl :"'1Iir-":";-,";';""i:'\.,.)"r1:"_,;f,'^,,.,,kr"'!-,,-;~,wi",,;. . _" u ;; i ,nS;!d1z?'ili)l':.-;"g ;')m0h;~; ,'- 0{t1<'V3id;,',' , "'" 'bh;'l :', -"--(~,,,11'"~0'~''' '" 1~+';''';)---'- , ,"",' '~"""",' " #I" '1 e'alin)efic-i:t1:i~\ _ __" .... :-"-,r~:~>t",,,:-_-'~l b-.''';';.;::J;' ":~,",,-;,,,,~,it~.~:!_ . Hiring freeze . Freeze budgets for training, travel, membership dues, and miscellaneous supplies and services accounts . Scale back vehicle replacement . Early implementation of FY 2009/10 budget reduction plan [fU~@@@ 9 Revenues Expenditures Deficit Projected Deficit $ 135.25 $ 154.22 $ (1897) [fW~@~@ 10 General Fund Revenue Summary In Thousands (000) 1;<:.j\j;J""'"""'.I".>I,....\~~~5il;t~j{jlj.:>>:rmr;'f;1'i'5L~AiU':Ji"'''jiTol;'''''~1'-l..,r;pnrPr~..",r.III'~ Property' Sales MVLF Franchise Fee Other Local Taxes Charges for Services Transfer In Other Re\enue Use of Money & Prop Fines, Forfeitures & Penalties Revfrom Other Agencies Licenses & Permits Total General Fund 30,232 29,678 20,216 8,732 12,039 7,963 12,272 11,617 2,421 1,494 5,376 801 142,842 'Property Tax revenues include delinquerl\ taxes, projection basis for Propeny Taxes is -2% -1.8% -2.0% -1,8% 1.0% 0.2% 4.0% 2.0% -7.4% -9.5% -1.7% -10.4% 17.1% -1.5% [p)J~@~@ General Fund Expenditure Summary by Category In Thousands (000) Personnel Services Supplies and Services Other Expenses Operating Capital Debt ServiceITransfers Out Utilities Total Operating Budget 7% g% -38% 0% 31% 5% 8% [p)J~@~@ 11 . Personnel Services +$8.1 M Includes funding for all Council approved positions $3.0 M increase related to scheduled salary adjustments $3.4 M increase to reflect the elimination of salary savings $0.9 M increase to reflect higher flex/insurance costs $0.8 M increase due to the transfer of Planning & Building Administration from the Development Services Fund (net impact to General Fund totals $550 k) [f'\7?2@~@ w $160 c Q ~ S140 $120 S100 S80 S60 $40 S20 FY 04 Actual FY 05 Actual FY 06 Actual FY 07 Actual FY 08 Actual FY09 FY10 Budget Budget [f'\7~@~@ 12 85% 80(% 75% 70% 60% FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 ~~@~@ January 2007 2% 3% 3% July 2007 2% July 2008 4% 4% January 2009 4% 4% January 2010 4% 4% 4% Compounded Salary Increase 19.3% 10.3% ~~@~@ 13 Compounded Percent Increase 30% 15% 27.4% POA 26.4% IAFF 25% 20% 10% 10.3% Mgmt 5% 4.1% Discretionary Revenues 0% . FY06-07 FY 07-08 FY08-09 FY 09-10 FY 10-11 Discretionary Revenue -POA -IAFF -CVEA, WCE, Conf -Mgmt ln1?2@~@ Relative to Assumed Investment Return of 7.75% 0.00% 23.25% 15.50% 7.75% -7.75% -15.50% -23.25% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 est ln12;@~@ 14 Miscellaneous Employees 40% 35% 30% o D G---O--O 25% 20% 15% 10% 5% 0% FY 02-03 FY 03-04 FY 04-05 FY 05-06 FY 06-07 FY 07 -08 FY 08-09 --+- Employer -0- Employee ~Tolal 1?l7~@~ @ ~ $30 c ~ $25 ~ $20 $15 $10 $5 $0 -----0---<>----<>--<> .,,-....--.............--.--.-- .........."___..n~O......_....._.._.n.n___.____......,.._'...n._..n_________n..'.'..,..,..,.___........,_,...____,,___._.._____....'...m,..,...,.."",. ~- -----/---------------------------------- <;I' FY 03-04 FY 04-05 FY 05-06 FY 06-07 FY 07 -08 FY 08-09 FY 09-1 0 1?l7~@~@ 15 15.4% 11.0% 13.2% 0.1% 10.9% 5.5% 19.9% 8.4% 14.2% January 2006 6.9% 10.0% 8.5% 2007 8.5% 16.4% 12.5% January 2008 5.0% -2.8% 1.1% 2009 8.9% 0.5% 4.7% 2002 - 2009 Avg Increase 8.9% 8.8% 8.9% January 2010 (Estimate) 10.0% 10.0% 10.0% Note: Aetna replaces PacifiCare in January 2009. 1?W?2@~@ City of Chula Vista Staffing (FTEs) Compared to FTE's per Thousand Residents. 500 6.5 1,500 1,250 6.0 "1,000 o 5.5 ~t ~ LiJ 5.0 tL '" tt:: 750 250 4.5 (f 4.0 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 8 Total FTE's -+- FTE's/1 000 I?W~@~@ 16 Workload Measures FY 2003/04 - FY 2008-09 FY 2003/04 FY 2008/09 % Change FTE Employees' 306.50 294.00 -4.1% Storm Drain Miles 196 256 30.6% Sewer Miles 428 481 12.4% Street Lane Miles 959 1,181 23.1% Park Acres 412 492 19.4% . FTE ::: Full Time EquiVclfent !ro~@~@ ~ CVEA POA IAFF WCE CONFIDENTIAL PROFESSIONAL MANAGEMENT' 31.00 81.50 146.00 04'20~. oi. qtANGE, 510.50 (17.87) 240.00 16.00 111.00 29.00 30.00 (11.00) 26.00 (9.00) 70.50 3.00 114.00 (15.75) --------------------------- 1,102.00 (5.62) TOTAL 1,107.62 1,263.76 MANAGEMENT RATIO 1:8 1:8 1:9 "Management includes: Executives, Senior Managers and Mid Managers !ro~@~@ 17 <J> $2.5 " .2 ~ $2.0 $1.5 $1.0 $05 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 1?tI?2@~@ ~ $6.0 " ~ ~ $5.0 $3.0 $4.0 $2.0 $1.0 $- FYOO FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 1?tI?2@~@ 18 " 52.00 c ~ ~ 51.75 ..0" 51.50 51.25 51.00 $0.75 50.50 $0.25 50.00 FY 03-04 FY 04-05 FY 05-06 FY 06-07 FY07-08 [fl(?2@~@ 19 Revenue Category Actual Projected Forecast Forecast Forecast Forecast Forecast 2007 -08 2008-09 2009-10 2010-11 .2011-12 2012-13 2013-14 Sales Tax -1.8% -5.0% -2.0% 2.0% 2.0% 2.0% 2.0% Property Tax 9.9% 2.1% -2.0% 2.0% 2.1% 1.8% 2.1% Franchise Fees 9.6% 0.0% 1.0% 1.0% 1.0% 1.0% 1.0% MVLF 12.0% 1.7% -2.0% 2.0% 2.0% 2.0% 2.0% Utility Users Tax 5.7% -3.5% 0.0% 1.0% 1.0% 1.0% 1.0% TOT 5.7% 2.0% 0.0% 2.0% 2.0% 2.0% 3.0% Average 6.9% -0.5% -0.8% 1.6% 1.7% 1.7% 1.9% "':::LY1:nl"~i .,dY:'Ii:T .,.,.,<:<V:";.: ~.":.~"1jTk'."..T"- 'l '"""5- '*"'~0ll!i;""'"ll '0"'''' '''''t''''I'\.' i~~:'J0, ..,;k_' -j-~~/-".hf i" . '", -- J'. '" "",lear,,' Ul 00 ' '- ,:-r-'~':,;i~~~1:J:;~~,::,::",":,:~~,~:",~~ >~~~" " . ~r.--~fa:~;t'- .,~~, ,~~{, ~\~ l~t~l~j;~J~,~,!:J mPtIQ@~l;i;Tlli~P~!:tttJl~M";~l ,u... .'~._'''''.' .;....__.~, , "0"+';1.,.-.-_." ..w,;(;>"'; ,...,,_Z';t~::Jh. ",,"," ',.'" """,:.!-", _~.l.k~_""_W'W .,--_, ,__ -'I. _jl~_ . PFDIF debt restructured or interfund loan approved . All scheduled MOU increases are included for all bargaining groups and management employees . Assumes no raises after FY 2009-10 (Step increases are budgeted) . No salary savings assumed (100% staffing levels are fully funded) . Health care cost increases of 10% . CalPERS rate increase of 3% in FY 2011-12 due to anticipated investment losses and early retirement incentive program 20 Relative to Assumed Investment Return of 7.75% 23.25% 7.75% 15.50% 0.00% -7.75% -15.50% -23.25% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 est CalPERS % Funded 160% 140% "7~-"-Ql " ~ '\ OJ "U__."."" "...__"__"_._."U__."__....".._."._ 8 ::---0 .". "'".. ">.0--'" .. .." . @o__G- 120% 100% 80% 60%, ----~-----~ -----_._____._. _n_______ __..____ 40% 20% 0% 1993 1994 1995 1996 1997 1998 199920002001 20022003 2004 2005 2006 2007 '-+- Safety Employees -6- Miscellaneous Employees 21 _t~~ Revenues $ 137.30 $ 135.25 $ 136.04 $ 138.55 $141.21 $143.88 Expenditures $ 141.30 $ 154.22 $157.90 $161.31 $160.18 $163.63 Deficit $ (4.00) $ (1897) $ (21.86) $ (22.76) $ (18.97) $ (19.76) Note: Correcting structural deficit will not add to reserves. .~:~n~tt<~~t:- ,:tJJ~;:~;7~'ff~ ,:~.;;:~~:; ,~. ~,. ;e~fii~~f; fu~~J'N~~ijtj1is ,'",:!~r~'{jj~,:~~~~1~1;:i1~:L:~ . .:~t:~:L,~cl~~rl . Economy continues to slide beyond current assumptions . Continued housing market decline and foreclosures . Continued risk to UUT . State budget crisis 22 . ERAF I & II Cumulative Loss $46.9M since 1992. . ERAF III $3.6M in return for Supporting Prop 1A. . MVLF Gap FY 2003/04 $3.5M - Represents June-Oct 2003 Payments. - Repaid in August 2006. . State MVLF Revenue Shortfall - Estimated November Receipts ($100k) . Booking Fees $40k . Library Grant $40k . FY 2008/09 RDA ERAF shift $859,852. - FY 2004/05 $743,358. - FY 2005/06 $900,367. . $1.8M Gas Tax payments delayed. - For months April to August 2008. - Paid in September 2008. - Loss of Investment Earnings to Fund. 23 , . ~C~T'T-"''j' -'W0GW\ry>" ,'- -.~'lU""i:Z'YV7"~~;>m" "~.' __:-'''-:;~l'r;;''~,.,:,_,?'''*, ~'~e~elo";&me'm~~Sel&i'ele , ."" l>.,v-~A>1.:y~ ," cl'~~,","""""^,"" "" j'--"'''''- ...d, -"'" --" .' .,,_.'___~_W '. 'r_. ,*,.':0", ,~. '0 .~- 'l~-JXi:_i(C".::i;;.' 'J":t.;:;'0f>';";>-:":'V<'~';:"4t,~ "~;S:'" :0.,-,,' .' ~ .'.' Ji"1li/ ':',,;lo\,\l(j'0wn'i~~fAffti\liitf,~ " _, ,;;~t(t~f:ni.:JtfA)fFdi~.i._.JtC"0:'ii8,t;ti.t.,. "",L"~\.tj;Q;;i;wn;ffu7:Jc:-",,,~\:s:.:.' In the last 5 years: . Residential permits annually . Total permits annually . Total inspections annually . Annual billable hours . Development related staffing* 'refiects FY2008,09 midyear staffing reductions. -88% -59% -63% -40% -40% 24 500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 o Single Family l3 Multi-Family Reclassifications $ (73,000) Service and Supply savings $ (65,000) Associate Planner $ (83,000) (1.00) Building Inspector II $ (161,000) (2.00) Development Services Technician l! $ (204,000) (3.50) Development Services Counter Manager $ (79,000) (1.00) Plans Examiner $ (104,000) (1.00) Assistant Director of Planning $ (130,000) (1.00) Associate Planner $ (82,000) (1.00) Citywide Overhead (Estimated) $ (142,000) TOTAL REDUCTIONS $ (1,123,000) (10.50) 25 . Additional budget shortfall of $1.3 million projected in current fiscal year . Fee update: - Include Planning, Building, Engineering, Public Works, and Fire services - Balance development related workload with staffing levels - Adjust fees to offset cost of services - Shift General Fund portion of Admin costs out of Development Services Fund (approx $550K) - Anticipate February 2009 presentation to Council 26 AS 1389 ERAF Shift Due by May 1, 2009 ($859,852) Mid-Year Deductions ($859,852) State ERAF Shift (Due by 5/1/09) GiP Funding Postponed Storefront Renovation Program SW Specific Plan Consultant Balance from Completed Projects ($859,852) $270,386 S 65,000 S 50,000 $155,386 Projects Postponed $222,500 Scripps OPA ($ 15,000) Small Business Promotion($ 6,000) Developer Broker Forum($ 9,000) Appraisals ($ 20,000) H 51. Corridor ($120,OOO)Project Area Expansion ($ 25,000) As~needed Financial Consultation($ 27,500) Cut 3 RDA vacant positions Project Coordinator 1111 Senior Secretary 6 mos. of Principal Project Coordinator $249,378 Subtotal 08-09 Savings Remaining Gap Inlertund Loan from Low/Mod $742,264 ($117,588) $117,588 27 . Renegotiate MOUs . Continue hiring freeze . Early retirement incentive (layoff avoidance) . Further program and staffing reductions . Tax and fee increases 28 Scheduled salary increases: January 2010. 4% 4% 4% 4% . Cost of scheduled salary increases: Fiscal Year 2009-10 Fiscal Year 2010-11 S4.6 million S6.4 million Miscellaneous Safety Combined ~ $670,900 $431,800 1$1,102,700 29 San Diego Region Vista Del Mar Imperial Beach Encinitas Solana Beach Oceanside Carls bad Escondido Lemon Grove National City Chula Vista 8% 8% 6% 5% 2% 2% 1% 1% 1% 1% 0% 8% 5% 0% 0% 2% 0% 1% 0% 0% 0% 0% IBarqainioW;l!Jnit~i>:rotal~Mem5ersnipi'; ,Vai;'a'nf ~ositioI1$i~/';~"aca nt'l;i CVEA 510,5 33,0 6,5% POA 240,0 4,0 1,7% Management 114,0 13,0 11A% IAFF 111,0 0,0 0,0% Professional 70,5 5,0 7,1% WCE 30,0 1,0 3,3% Confidential 26,0 2,0 7,7% Total Citywide 1102,0 58,0 5,3% 30 Department Vacancies Mayor & Council 1.0 City Clerk 1.0 City Attorney 3.0 Administration 2.0 Human Resources 2.5 Finance 2.0 Engineering 2.0 Police 11.0 Public Works 15.5 Recreation 2.0 Library 6.0 Total General Fund 48.0 Fund Police Grants(CBAG} Transit Wastewater Redevelopment Agency Total Other Funds Vacancies 3.0 10 20 40 10.0 :mota'I~~ac~nci~~~58Y6{I7'1j;E~1~ ' ;," . "~'\~:~"!;;ji;li.l;a:liat.i:i;;:ii;.;lt+,..0="j"^..J1J.t.\k!,,,,,,,,-1; ~ S160 $16 ~ 0 0 g S140 S14 ~ "- :;; :E $120 $12 $100 $10 S80 S8 $60 $6 $40 S4 $20 $2 $0 $0 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 EEJ Budgeted Salary Savings 13 Actual Salary Savings ....- Personnel Services Budget 31 '~:rm~i ' ".. ~,>i'~'C'~~;;':;"~'~:;;'" I "If., ~<" f~'i0~!i-:i'~~;'~-'~ J,t.., ...~~-C'" . ".:iN' it.i""11 V. 41""'-?d'4t".!"'-(?~ ,s'r:e"""'eD:\, ".' ,""'~'e'''''' ,llt'De --' ,I:; ,111;11 ,19U;!'O' 'BfB.'-' ' )U~Ui ' ,\V"' -!;l,. ,:,~~",,1~~___1:A4i;..?:E'_ '-;G, yO" ;~ - ~,iw@'<'"!<",:,~,_;:'V,:,~';^<"_::J %..::.. Two Previous Retirement Incentive Programs: . 80 employees retired . 55 positions eliminated . 25 positions filled . Estimated on going savings of $6,2 million i.:.aJ:\;;q""~';:--!0? '''':W-',' ?'" 'l!>~; 7'x';;-;:)~Y":'1'd.,"i*$,n~-1;"Y411;r.r," ,";"/''',r ;t~eaj; ij~,_", "k,Ft"~"'B-';:;t'ZI'"'!.4'lS;;' .,p,;'; .,:!;f\:,,\,~.. ~'fP(1)""Ia::'\lI' ';,., _";'irA;;(';~.~> , , 'e ' .. 'a 'an""'lrig" " p. I'O""S i l '1o. , Xii" 'J; -":~ il~': *:1,'/" ~ 'J. Itl' . .~: -; '- ' _ " ':'>~:' ~~~~,?,~,,'t ,.''t ,_ ',i,.-,,'V"~':_;_ ..:~. ;:~':'~. ,_~~ r._'_'~""".,;*::.~:=~..'!~~ ':~;iREiti~f:fle'rn~thl'm'~ef:(ti!~e ;'~ ,<n:1JW;;!1:~.G::"~' '...~.'mx::;::.-:,.,"::.,t::irL.i0i::":+';dt~~1~'tS':J;\I4.'" ~j~>. Recent Survey: . 280 employees are eligible . 19% would consider early retirement with a medical incentive . Approximately 55 employees . Estimated annual savings - $4 to $5 million 32 . Significant reductions to date due to the downturn in the economy and slowdown in development - As part of development of fiscal year 2007-08 . budget 34.25 vacant positions were eliminated - As part of FY 2008-09 budget development eliminated 145.00 positions - During FY 2008-09 eliminated 10.5 positions in Development Services Fund =" ,. General Fund Planning & Building (includes DSF) S (2,377,757) -30% (16.50) Finance $ (79S,S82) -22% (6.00) Administration $ (1,135,394) -22% (100) City Clerk $ (249,429) -20% (1.00) City Attorney $ . (55B,712) -20% (200) Human Resources $ (1,085,652) -19% (4.50) ITS S (868.401) -18% (5.00) Library $ (1,B10,367) -18% (12.50) Recreation $ (1,051,800) -16% (4.00) Eng & Gen Svcs (includes DSF and Fleet) $ (3,165.481) -16% (22.00) Nature Center $ (192.454) -15% (1.00) City Council $ (216,861) -14% Fire $ (3,392,917) -14% (18.00) Public Works (includes DSF) $ (2,340,699) -11% (20.50) Police $ (4,508,903) -9% (30.00) Redevelopment Agency (Fund 651) S (394,311) -8% (1.00) Other Reductions $ (1,944,348) TOTAL REDUCTIONS CITYVVlDE $ (26,089,068) (145.00) 33 CVEA POA IAFF WCE CONFIDENTIAL MANAGEMENTI PROFESSIONAL -14.9% -4.4% -0.9% -12.5% ~9.71% 224.00 (36.50) -16.7% TOTAL 1,248.5 (145.00) ~11.6% *Management includes: Executives. Senior Managers and Mid Managers Recreation S3.7M /""~% ~ibrary S6.0M 6% Planning & Building SO.8M 1% Engineering -SOAM 0% 34 . General Purpose or Special Purpose - General Purpose Tax . 2/3rd City Council approval and . Simple majority electorate approval (50% + 1) - Special Purpose Tax . 2/3rd City Council approval and . 2/3rd electorate approval B'iliilQ~I{"IfEMEfii[~lYi:~sO:@t~~1Jli._J;j~~l?:.I[4t~",,~~~,~l'L~i8 General Sales Tax (50% + 1) 14 5 74% Special Purpose Sales Tax (213 vote) 4 7 36% UUT - Expand what is taxed & reduce rate 8 0 100% UUT - Expand what is taxed & maintain rate 6 0 100% UUT - New or increase 3 6 33% TOT 8 2 80% TOTAL 43 20 68% 35 EI Cajon 0.50% 04/01/2005 10 Years Special Purpose 68.92% National City 1.00% 10/01/2006 10 Years General 59.01% VIsta 0.50% 04/01/2007 30 Years General 53.97% NOVEMBER 4, 2008 ELECTION EI Cajon 0.50% 04/01/2009 20 Years General 51.10% La Mesa 0.75% 04/01/2009 20 Years General 55.30% . Increments of 0.25% up to maximum of 9.25% . Each additional 0.25% = approx $6.4M 0.5% INCREASE SCENARIO (MILLIONS) FY2009 Estimated Revenue $26.9 Estimated Additional Revenue' $12.8 i@~~s:mflVi~li€Rr~~~]l~2tj *Additional revenue estimate applies increase to 50% of vehicle sales sector. 36 2.0% INCREASE SCENARIO (MILLIONS) FY2009 Estimated Revenue $ 2.8 Estimated Additional Revenue $ 0.6 ~]m~.ikf~~'f[liYl~T@2t[s~ti~fIt$l~~ NOVEMBER 4,2008 ELECTION RESULTS - SAN DIEGO COUNTY 4"1. X;j' '~A! '. &'" ~," H;j'q..~ .,," .",1" il!~UR_I$.Dlq}j!ql\l . ~DES~~J!:;:T10:Ndi,q::.J Encinitas +2% on vacation rentals -beach maintenance funding Council authority to increase from 10.5% up to 13%- Del Mar general purpose 55.30% CaTisbad General 11,510,097 S 10,504,353 Cororlado 8.00% General $ 8,624,351 $ 8,910,953 San Diego-Counly 8,00% General $ 3,180,427 S 3,387,032 r.f..iml~Yj~i1.iffi'~'~o:QO~,.~Ui~':iG$ncr.almr~_J.,~~$Ji2;3,3;:;;21J4~slk~55t;:g6R Oceanside 10,00% General $ 2,185,114 S 2.351,759 DelMar 10.50% Gene~al $ 1.564,617 S 1,679,854 Escondido 10,00% General $ 1,221,365 $ 1,318,644 EICajon 10,00% General $ 1,098,769 $ 1,105,546 Encinitas 10.00% 8%General+2%Dedicated $ 1,100,000 S 1,102,623 'Solana Beach 12.00% 10% General + 2% Dedicated $ 919,636 987,246 La Mesa 10.00% General , 872,341 914,629 NatiorlalCity 10.00% General 829,869 837,944 Vis:a 10.00% General , 404,545 , 400,670 San Marcos 10,00% General 327,632 , 363.885 Imperial Beacl1 10,00% General , 240,000 292,411 p-, 10,00% General , 190,097 , 202,767 SSrltee 6,00% General , 118,669 , 128.811 LemorlGrove 6.00% Gerleral 31,810 31,525 37 ../ Labor and employee briefings ../ Employee focus group ../ Employee suggestions and involvement ../ November 17 Workshop - Budget overview and balancing options . 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I "E 6 I C: 0 i Q c: I i 11 << ~ I t .i I t: - - i= Q t': 0 '" ~ 0 I: ~ .~ !i :J I ? II 1 , t! i ::l ., J J 'I ... ... " .. f ::t (i t:J *' I ~ ~ fJ.1 ~ .... , C - if I ~ ~ i ... , :'J J i .. I ~ .. I ~ Jt If) w d - 0 I ~; r:: r .. % . :! .0 & J - I ~I .. (.~ ~ 0 ~ if} r... .'" t;1 " ~1"t ;.:~ , ~ - ?' ~ yo I j :a ! (I) .1 ~>~ , o I :;:,., n _.0 ~-::;j f!!.~a. I:) b Lt', ., Lf) In o LP " I - " - " r,~, [;;J i ,- - ~ -:0 1-, .- D I f"'l' (iJ ! (!) r;1 , ~ !hi ~':i IJ'! D I, ,- - 1.111 ""') T '.;' , 0 , ,- - '~'!;) ~1 ('-J 0 , ~ - i)j ""') r\J r"'i 1 ,- "" l":i -') ~' 0 , f~ 1",1 (!Zi "J C';J . r " ,- ::~ ',- .r.- (,') .I III J~~J m f'" :~} I.,:" "L I:OJ ((I lli " r::', :i ,Q l') F- ro; ~ (.? ell r (I I... -- 6 ("'.j ~ Ct CiJ I C Iti Ci CI CI Ci CI CI Ci 'J 0000000 ~ c..j ["j. 'i' Lf) rr! r.., I I I I I I 6 r', ~ (J~l Ci CI CI Ci Ci CI "=t I;'~I [..j ~ Ci Ct CI ('j CI I C (!J J r;,1 i.J.i I' (!j J (,[I C;,l I G i;,i J (") Cj,i I (!j '-j i:O CI I r (!j J " I II I if) CI I ~ J, I' II , 1! II , , I' " II , 'I) I, I: Ii ? . " 11 I 1i r ,j , r II I 1 ., II I' ~j.. l;.. :, L) ID ~, " I::' , o! I;; . .' .~ C.i (,", '" ~ ,- (!j J ,- ,- c " , - '--. - N~ ~" ~~ ~. " ~a ~"n~.h,-"' ',- .:,,--: ~ - ~ City.of Chu~~Vista.u Novernberc17, 2008~. ." - .- -- -- - --." . - - -- - --. . - --. ..-. SULfJVAN-GROUP,REAL ESTA TE ADVISORS .' - -- - - ___ 0.= - __ ~_ c _ ,__._ _ __ _ . c'" __ - -.-. ~ _00_- _~_ _ __ ~~~ '. ~eterDennehy,uSr/Vi~e-Pre5iden~t "" . (858) 523-14.4.3x118 c. o __ '-_C'<.", _~____ .,,,, _. '_' _ _.".'_ . -p.de-nrlehy@sgr~~:c6m~~ - -- - .- ----.- ---. . ...-.. - - '.""'_, ',. .. ..".c_._. .. ---- AGENDA ,= .~ . ~--.- - '. .," - -: - -. - - : - - - - - " - - - ':::: I. The National Housing Market It The Sa~Di~go Houstng Market III. South County Housing Mark~t _ _ _ ,,:::-~:::: - ~:_ ,C;:o . . _;~" _. tv." Conclusions.- 0"_- -~_ - "",- . _..~-- . t> . lllIlIIllIlJlI! . -t :I: m z )> ... --I 3:_ )>0 ='Oz Aj> mr- ~:I: o c: en - z G) 1,099 ~. ... .... -.-. ...... ....... .. ...... . ..... ....... ............. . ...- -- .... .... ..... . '''_' :_,.,..._ __._ _.' _ __ _ ...d ..... _. ... ....._ "',c.... , New Horne Sales Continufl to FiJlI. , , . '01' '.':(0 (0' '(0 0),'. 0) .-'~ -'~:;T-' co (0 .0)' .... O' N ,... .,... 0). 0) < ~,"f":';:; or-, , , j ~. ! .~ , " " "' , , i < .. , , ~. - - - ~-,. - - -~ -- - . -- - - -- - - Back to 1981 Pace , , i i ! i , ; I 1 '01' ,... 0) ~ . .. ~ 1 , .. ! - - ! .. , . , ! - - , , , /' r',''"' .," ":{"'-,-"::_:",-:~{~' _ :'+:~--~:-" ,:_~;~_ ~Stole'derriahd-. i i J~ :H9,rv~/0tut~;;~'V~ - : , i - I ! , , . .. , . < , , - ! , , . , ~ g ! I , . . ! . i .. , . , i ~ , . , , ~. , ~ f- . ffi " A , , j .. , , ! . , i < - , ~ € ~ ~ , . " , t I , , . , , . ! - . , , ! , it ! , .. . , , , .. , i , ~ , .. , i ~ , . ';I . , i 3 .. , , :. , , , .'01' cD co.o 0) 0)' 0) 0 0).0)' 0) '0 .!""';': :'T""':cf "r". >;:iN -.-- N '01' '(0 o 0 '.0 O. 0 .0 N N..N., , . co o , 0::- , N' .,~ . , o "co 0) ":-T"':." '01' '. '(0 co .' co 0). 0) :'''T'''''-:-,' _~._. .co 0-_ N .co 0). 0) 0) 0).-0) T"'" -T""'_:_::o.__.T""': 1\ 'L - i , , I-- , . . . , j , ~ j !z' ~ ! . , .. . 3 , '. : - . . , - , , 200 .. , . ~ .. ! ~ , , , I , . .. , " 2005 = 1,286,000 Peak 2008 = 464,000 (Annual Pace) (0 co ,.... ,... 0). 0) .... N co .0) '1(""';' . "',"---- . . 0.'.... .,.....^ ..0........_ Census Bureau, released October Z7,2008)Sulliv'an Group. , .... ".....r.,-.....;:: L" ",",2.0, -' .-.-.---, . '" ! .; 0.0 -::'c'T .T '"0,,-;-', New Ho.m~>SiJJJply\UOverhan.g"5 . ____... "..._,. " .n..... .... ,"." ,...,. ::::: . - -...~' ..-. . -- -. .,....'.. - . , ..- - AbsoluteNumbeis~Are Declining 2008* Sept 08 396,000 Units Aug 06 Peak 570,000 Units =='1 10.5 Months , rl ,- - - - ! I . ,Ii, i I 'I i ,"-'-11- ,I -:- --, II -:-1- -1---1-,-1-:- i . : 1- ~ - i , , I i ; i I' 'II i I ; II T _, T T,;:,:?' T _~. _,T T~-,T ,n~ T T_=~; T _ T T -::' T T __ ! '-'C._. 0:: "T;:::T T T~.T ". T;~T r--.. CO~(T) 0 ~.. N M~-'O::t._LO CD r--..co (T)"~O ~. NM .q-LO CD r--.. co (T) o~-~ N M''I:t LO--tO.r-:. co en 0 """": N.M ''If':1.O <D'r--..,:co '<D<D~<Dr--.. ~:...... r--........r--.. ........r--........ ~.CO coco'co co co.co'co'cocoen~en en'(T)<en men'o> 0>:0>00 0 0.0.00'0'0 O>'(T),(T),mQ):Q) :mO');:O'), 0'>': (1)',O'),m--:O') (T).(T),-mm O')O'>,m.m. 0>,.0'>":0'>. (T)!O'kO'>.m ,0');.0') .m~mo o.o~o 0:0"'0-..00 """"_"1:"7;:,:;_~';"""'::-::.~, """"<:'l'::':T'":":",,=:."l7'.'r"_~~r:~;~/-'r"'~ T""_~'T""g~:~T'"":'r",_:'r"~ 'r"'0%-L'r".'r".T""''\''''". 'I"'"'.;",,:.N('\I)C'I:.NN',N N ("I.l._N'-- d- - . ",' f -,,'> -:;'j .100 AV9; Months of Supply 1 , ""'1 .'- ,~ " .. - ~2008~ data is average)anuary-September . : Source: " Census~ Sure_aU; S~lIivan~Group . . ... . 1., Re~al~ ~uJ)plyHas~L~v~/eCiRecently.. Can>WeVYofkiOfiMQri~Su pplyi '1.2009? .5,O(}0,000 Months of supply has decreased '12.0 '4..:.,50.0,000' ~~mpt.1~6~~~ Sept. 2007 to 9.4 in 1'0 0 4000000 ." '. . .'. , ~ 3,5QO,QOO' 3 0000.00.... ,. - , '2j500,QOO "4,000,000 1,500,000...... " ;~;OOO,O_OO,., .' '. 500000.. ::.. ,J'" -0':: ;:',..._ ;:l'~.';; ...,' 0'.- 8.0 6.0 4.0. ..__.. _. ... ...... moo- . _. 'm 0). 0 0 ..::.:...- N N ('r{('f) ""'". "'=i- L!)L!) <b (o>l'-l'-oo ........ '-:i'O'>.OY- O~-..-O -c:r-"'o:~:-_o,.O '0..::0'--:0' 0" 0 ~O'-b. o~';~_o_ 0 O~ ':'""1 -''1~ I ~.~. - 1-- . ""1-- I ~'-"' I' .-1 1--.- - I .,...-, I'-~ I _ ~ ,I __ I 1- ~"';~ I -I I ::"". 'C'U cU C U'.c U C U'c U C"U C U'C U C :J, Q) :J' Q) :J Q)':JQ) :J Q):J. Q) :J', Q)':J Q)',:J Q) :J ,~ o-'o,~ 0..-, 0 -'0,'.7) 0'-',0 O;-,'Q-" .... ........... "'," ..... ofRealt6F~: SllllivanG~oup. . .' .. ...... ,.. ". '.. ,'~' . . - . '" 0 ". . . -,'''; - J' '".;Cio;:'.> ./<<~._ ....'^"';c..", '. . illi!J- h.;.;' . ..'=" / """"-'/" -,~",. _,' c'> _', . . . t..' 0 . 0 .-. ""'-_~-'-'_ "-C-' "._~.'..- .."".. 'J;'"'"" '"!'G''' . .'-', " "~i-' -".".' Jb:l..,-..".....p>. ,;;x;i." .... '. ',. ..~,~.. ,- -~ . - .2,. "........".-... ._,.,.mM"__, . "-,-"-'.-'-',,,. F-'._'-~""""_"" , .... f~~~c~ - .. ..>>"'.., "'."~ "<!~<.' '-0, -Stiuts:at'199J and',-1981 Le - - - ;,~2,500,000 [\2,250,000 . ~'2 000 000 " , , . . : ;:1,750,000, :'1 500 000 " , ',' ::,.1,250,000 :.~1,OOO,OOO' :,--:'750,000 5QO,OOO t~--",: ,__ j ,..,.::_~- f:. ~- ;. 250,000 " " 0 Peak Jan. 2006 = 2,273,000 "v" "u" i-' ,::-.-- (-;i::>:i,,:.-j L___>;'- fc-","'''' '-C' m _:" m ' 0) , c. " .:2:" ::2:,.:2: .:.. ~~~' ~>~ ',,' ~,'" '\""" '; '\""", -m -m ", ':E:E .to '00 ,'00 '00 mm . 'f"'" ,"'f"'" 0) :!E' ,0 0) m, , :'f"'" 0), :2:' N 0) 0') ",,", f -~ - " - -.- '" -- - -.- -~= ---- -= ~- ..- -~- --. - -- - ---- : Source:lJ.S. c.ensus13ureau~'released October 17; Su"iv~n Group .. (f) 0'" CD ',.' :J (f) C' (f)',( ~Fand MF,HousingStarts ,"" o ~ ,~ ~, ~ ~ ~ ~, ~ ,00 (:)' ~ ~ ,a, ,00, (:) ,~, ~, ""',.{: ":..,,," , ".,.., ""it . . ,.., ':: ,'",!"''.i'l''' ;',;,', ;.,," 1970 , 1972 .. ,1,974, "1976 978', ""'i!!,t"';.;,'Hd'; 98.0 " '1982, "'." , ,:" ,', "'1'.. , 1984 1986:' ,1988 ;'1990" ,,1992, '1994'" 996 1998 "2000 '2002 2004 , ,20061; 2008 :,201,0,;, 201 :5: -, ,- ,II"" ,..... ~ Cn," '.. ".., :t O ,,< " ,;:'>'0~ f"oo ' ,~ .......',.) '4-. (I)' - .....,." ...., .j" ,'Q ::0 CD' ~, ,~;':" o ".... ; :; Q.. .'11;", 0, ,r" , I, ...., ,,;. ~ C/) ......' s::u ''''L. ,;. ~ ,"""", CD ", ~" t\)' C C,' ~ .'\) Nati6n_~rJ~oreclosures'Still High. ! .; "",,,,';,; 765,558 '800'000 . "- -; 700 000 .;"",,' '"".,. Quarterly Data Monthly Data ~oo,ooo "",.i ,- , ;>'- a . _; ,There ,are~aboiif"2' millionmoreh"omeowners" ~ctoday than 1ong-term trends would indicate ", 70%' " " " 69% .~~I-iilfllt~~~~ IR~~~% iilil, ~~M 68% , 67% 7.0% ARM interest Rates in 2000 66% 64%' 65% 2Q08=68.1 % 1"_,,1 -.I'''''d..I. I I, .1,,'1->1 1:'1 1.:'1:- I. .1::;11 1"-,1 _~ I" 1::::'-1' " 1<.::'1 'N " to O'l T'"" ""."to.co .O"-N 'to to.. to "r-- r--' ':O'l., O'l'" O'l' :'O'l: O'l , T'""~:' 'T""_'::".oc-:" T"'"'_T'"'" ""_ to., co ;'0 r--" r-- "r-- .co O'l,' O'l '.O'l 'O'l ~_~": 'T""::,,'T'"" _~ir- N "" to. co . 0, co' co. co. co .e0'l O'l. O'l" O'l ' O'l . O'l T"" "T"":' "r'7' _ "'C"""T"" N "". to,'co O'l, O'l, O'l 'O'l O'l' O'l 0'l'0'l _T'"" """'_';:. T'"" ;:';T'"" "0 N ,0 .0 '0 '0 N l'l, '<f" to o ,0 o. 0 N. N ":+: .CO' '0 '0 uN -." ",--"""",,_. U.S. Ho.meovvnership -- ...--- - , -- .-- - ---- -- .- . , , - , - ...... ---, -',,", -',',', ....".. ....- ,-....,. ....",.. -........ ...... ........... '--.--.. ."..." .......... ."....... ............. ...... ......... L.inear (U.~. Homeownership Rate) , Source:CensLls Bureau;SLlllivanGroup. .... , ~ .. .m _. -, ___ ... ~ n. _n _ __ _ .. m _ m .._ ".__ _ __~ . _ 0 _. .... . SCin'Diego!sResidentialPermits'areatthe' "n.', ..... .' . __ - . . . --- 50,;00,0, tJJ 45,0,0,0, .. 40, 0,0,0, I~ __ , .E3e5,OQQ. &.~O,OQQ Cl 25,0,00, t: 20,,0,0,0, .E .15,00,0 ':5 t(),OOQ Ill.. 50, 0, 0, . , '.. ;0, . . . LowesfLevelSince. WWH . , , f l 2004 2005 2006 2007 2008P , , " J , , ! C , 1; , ~ ~ . r ~ "- r: ; , , 0(,0' . (,0 .<.0 0') . ."'0') . ~"t"- N 00 '" ...... ...... .0')'" 0') or- ~. "-::t 0 000') 0') 0') or-. or- ('oN 0'); 0 0') 0 "f"'". N 0.. 00 o o N Source: sacos; Sullivan1;roupReal Estate Advisors 15,587 14,306 9,194 7,461 5,804 -8% -36% -19% -22% Total JyecW 'c!nCi'/txist!ng Homei;,SalesE}ack~to; '9gl...e'yels ...... ." '. c ~~ '~San giego} . ., "... .... '.. , r 2004 2005 2006 2007 2008P " 68,262 +7% 58,953 -14% 42,253 -28% 32,658 -23% 29,503 -10% 8 year Total Home Sales Average 50,507 . -..AdtiveProjects Have Declined 40% in .the Past 24 Months . .....,:. ...-~--. '-'-,__ ....' _:::. ..,0:,..... :C' ...< San Diego: Jan 2005 to Sept 2008 Peak Projects 348 in Nov 06 (-40%) in Sep 08 2,000 400 .l!l (.) Q) ...... o .... c.. . 200.' Q) > ':,0 ~. 100 1,500 VI Q) ~ 1,000 en September 2008 Active Projects - 209 Total Sales -138 500 - ~ +- o I-:' C 7 * ~ ~ u x ~ - . Source: HanleY Wood; Sullivan Group Real Estate Advisors (,0' -(,0 UL" r-.. o.q ct q'- cr. ;c.. :J ~- t) c: --- .~ ~ 0 ~ .Active Projects ,...:-,;. r-.. ...... 0:::- 0 0 ~ ...!,.- :.l. Co ::J U <( ~ 0 --Sales - -."'--o::l o , c: '" '-' .. 'co ':;0 -' I ~ Co <( "Lt),,- (g- 0-' 0 I I'. U C..~ 0:<: !!i" :;"'co-::~ o ...!. ::J ~ , rMo'$t NfiwAtt~qhedJnvent()/i/ih, Central Submafke't' : " ......... ." "". Septernber2008 . .... . . ..' '. 2,000 J,800 ~ 1 600 o '. . ..~ ~,400 .:> . c;.1,20D . . "Q) 1 000 . > .'. :. [,' '::';::::;""'80'0 ,. . ('(l" ',' . ....13 '.600. ','. Q). .. · ,"0.. '.' . 40'0 · ".',(j)u 200 ' o i), achecLlnventoJ:: " , \/ ,.. .-~-,_ - -- c--" 7- .......... ,......,.., ,'- "'.... -'__,' ',,-"" "_m ..__ ,. ',"" A#at-Sttem a'Fket . " ~anDie~o Central . : County',. Coastal Nortl1 ,; .Inland. South Bay North . ,''-:- ,- - -. ;: . Spec~latilj.e Inventory. . Months of.ln\lentory ~ ~ ~ - - --- .-..... - --. -- - ;.Sulllvan Groui)RealEstate Advisors~ 20.0 . 18.0 16.0 :14.0 12.0 .10.0 - 8.0 : 6.0. 4.0 2.0 " 0.0 ~ . O. +-' C, Q) >- 'C, ,+-'- o en .r::', +-' c ; 0" j ~ . ~ ... . . .' Ne'lvf)eta9he(lln'v~n.tory is Generally. Lo~ September2008 750 . 7.5 .~, 600 o . . - C (]). E 450 (]) > 10 300 :J u' ~15.0 (f) .... 6,0 ~ o - C (]) > 'C 4.5 '+- ': 0 3.0,(/) ..r;: - c o 1.5 ~ .. 0.0. San DiegoCen!ral ..... Coastal . County'. North . East Inland ,South Bay "North - - - ,.... .' ..,' .- . _. c.'"-..... . _ -'CO ~,'-.. . -c- _. _ .0- Source: Hanley Wood; Sullivan Group Real Esla'le Advisors Number of Units Months of Inventory. "",., ,..-,,- .-: ~~--_. . "!-~ "--,,- i,:,c\"c~'crota/~xjst!ng Sales Volume Has'Been ~'-. - . ,.:~:_. O' "":...---:'.. ..::::__- __. ..-"."'. ._..~..:_<_.. m... ___'_0 . _. - '., ..:__. .__,..:';0. -:0" -- __~ :--" -- - .. ..... Down For Over Four Years in San Diego .~,ooo .... 7.,00.0 6000 " . .' , ::5,000 ;.4,000. 1'3;000 ..2000 : , ~ '1,000 i ..0, .. "."W" , " .._,,-,,",-__ '.. ". OC) CnO.~:;NM .~ i.tj <.0 .......~.oo'O') 0 ~ N M "l:tLn (,0."";' ". ,.' 00 000')- 0')'0')0') 0') 0')0') 0')0')0')0 0 0 0- 0':0 0 0 _,,,,,.......::,', :,,:.,..:.0:, ..,_.&:........8..':..- O_.:::-.:.I!I..:,.:..D.... =,0.. "-0..-:::. D._., 8-<:_"..1....;.:,_1.. .-.,,8::8: _:. "",D.:._.... 11-::.> .I.._,,~-. ...,_......1....._.::1..:. . ,.'. C') C')C') C'L C) 'C)C') C). Ol' Olc). C') 0') C')' OlOl C) C) C') . C') ;. _~.:<.~.~~..~~.ciJ~. ~.~~~.~:<~::~.~~.~. .<i....<~ci2-~.~~.~..~ .. - ;,. -.. __ -:0,' --: ,_ ",.. - ~ . ..' T()taL~ales... 2 per.- Mo,,: Av'g'. (T9t~~ S~les) Source: Dataquick; Sullivan Group Real Estate f\dvisOrS .' . ,,' .... '.- ... .......... .....-.... ....... -.... ....... ... There'is il4. 9 "Month Su pp.lyof Resale Units 5,00n 4,000 ~ 3 500 000 ~ ii' '3'000 '1 \J . "" ;.'= ::a l - '15,000 ~ W ~, '1%; ii, 2,500 " ~"\ '4 .~ \: 2 000 1 0,000 ~: l~ to, 1 :500 '0001,000 ". ' 5 0 0' '~ . o .. N; o . I ..c Q) LL .1'-- N ' .0 0 ".,~,{~~, , '('.. N' ood . "', . I I. ~~2~ ~,' 'co .,'0 , I ..c Q) LL co o L I- -0.: <C co o I ---c :J -:") co o " 0),'- ._- _ :JT <C co o I .... o CD '., , ,~" , ' ,',_, "Listings' " Total f;xistI~g $ale~ r 4,_9;'months,ofsupplyis based (>r1 Ihe,July;-Aug, ,Sep2008 averag,e monlhlysales: .. S6ufce:'Zip Really;Oalaquick;Sullivan Group Real Eslale Advisors 'Fore clos u res ~Have~_Ju mped: SharpiYln"f ,,' --.. - . ,,,,-"' ,'-' - - .-' " -, ,,- - . .. - - ". - '. ' ~- ,Safl'Di~go County- ~7 000 "", " 6,000 - i ' ::-S;OOO _ , ~4,OOO " "~,3,000, .2,000 '1000 , -,' o ~-~ { ,n ___ - - .- . . ,_0 ,- '0_' -.- '0') 0 T'""N M .""" It) CO....... ,'00 0') 0 ~ N ('II') 'l::f, Lt')CO r-.. 00," ,"'00-0),0') or 0) 0)0)' 0)' 0')-0) 0)0;0 0 0'00:0'0 '0 - - _,,-......._ ~_ ~ ..........~......... ,~ ........ -.........;.,......... ~-_....... .........._........j.......'~.~ ......... -..........--0 -.....;;:".......... ......... .......... , N N N N-N N. N N';-N-,;N N'N~N~N NNN'N N N . '",,'OOO.O,o'oooroo c:rao,-ocroo~oo 0, ..' . Source:-Real,Estat~ R~search_Council;CAR; Sullivan Group RealEstat~ Advjs~rs -- .- ~ ~ ~ - ."- .~ ,. "- . "'''" -_. "-, - -, .. ~-" - -~--~.- :Not{cilsQfDetault inSabOiego'Countyo JylOff = <3,206 Aug 08 =3,176 ep 08 1,360 ~ 1 ,269 4,000 3;500 3,000 2~500 "2,000 1J500 ,:',: .~. < ~~~~ ;,:'~';;':';~~i' : " ,!',11=' 3' I:iJ , b IJhIiI V.IA. II ':::\:,'~~i ,",{ ',;:f';SiSI' ""'RgjJ~"V:"~I:lP:!liW " 7 .',' '" ~'1J.B'GroT;;ingPercf!n! of Overall Transactions' Oct., '08 = ,t2.7%) ',25000 ;;; . .:L!" - .^;: --- ....- '20000 ' ;,,-~-~ .-. .J~ '1'5,000 10,009 , 5~000 ' Sep, & Oct. an aberration due to new state requirement which requires lenders to contact homeowners 30 days prior to filing, 25% \ ' ,20%, '15% /10% 4- o rn ''0", 0)' 0) 0" <( 5% 0% . ~;> rn Cll rn' '0' 0)" 0)' o - "O- N C")., '<::t. I.!) II CO ,/,- CO OJ 0 C")" '<::t I.!) CO J'-.., CO ' ,OJ ,OJ OJ OJ OJ OJ 0) OJ OJ 0 0 0 0 0 ,0,00 0 r, I" I", ,I " 'I " 1 ' 1 'I 1 I, 1 1 1',1 'II 1 ' ,I ' I' 1, 0.. 0.. 0:.' 0..': 0.. '0..0.. 0..0.. 0.. 0.. 0.. 0.. 0.. 0.. 0..0..' 0- Q),Q),Q)hQ)Q),Q) Q),Q) Q),Q) Q) Q) Q)'Q),Q),Q) Q) Q). 'CI) (j), Cl)CI)'(.CI)c;CJ):CI) ,CI) if) CI) CI) CI),CI)' CI)~CI)~~CJ)"CI) CI) , G Notices of Default ~ Trustee's Deed . - - - - - - --- -. -- - .-.... -' "." Source: InnoVest Resource Mgmt; SullivanG!oup Real Estate Advisors ,,'.1 Idi I!l!lIEIilm III!Im!lIllI - . I' -i :t: m :s:cn )>0 ::or.: ,,--I m:t: --In o c: z .....; -< ~ ~ "._...:_'" ;_:.._ ._._.~ :,.' . ,-' -:C:'.:" __mO. ." ,... .., :......:_.. ,. ....,_ "'. ., . .~\SQl1th dou.nty"\New+H()in~=SCJ.les Sales I 2004 - 3,770! 2005 - 2,016' 2006 - 1,620 I 2007 - 8581. 2008P - 491 ! ................... ...~ 4,000.. . .3,500 . 3,000 2,500 2,000. .t,500 1,000. .....;, ...,,,,, 500. o ..... .~ 1988 -- ...--- . . . -- ,--- 1990 "199i:' 19941996 . 1998 2000 2002 '.., ':C',,, . ..c.:....:... ". _:_":. ..:" '~-"--, .'" '::::--""". '.:.:. :: . :":::"'-... ...:-,-:::: ::.:,:. ",,:::.:-:,., ":":-- .." ,--- :..: ...:.::,... ...., . .. u II! Detached III Attached I .2008P is annualized through September: :.Source: Hanley Wood; Sullivan Group \.. --~. 0 _ 2004 20062008P' .. '''C'''~ - '".._ ..-c.. . "._" . '" ..0-.. .. . ",cc . $oilth Coqrity;sShare of New Home .Sales Has Decreased .6000 d.' ... 5000 , "c, ..,-> ~,ooo ~,ooo . ~ .2,000 . '.1l ..C . > 1 000 . , .. .2003 : [JCeritral. ""'..-, .,,:::; -- "- . o Inland North ~ 20.08P is annualized throughgept~mb~r. . , Source, Hanley Wbod;Sullivan Group ",- .,e_."",_' ,,,__,.,:.,_..,. ""_.:,., _, - .:::.___, " .","_'" ., ,._.__ '''",''~ .. - ~~- [glCoastal North .. --, .,.",".: .,.., .-. ,,,.--.,,' '--.~'.'-.'. ,. ,,,.. .. "--': ", . ", -- --, .. -- :~ South County. . ;121 ~&; N; ~ ~~ I ! _L 17.6% ~?i 2005 200SP 2006 D ~ast COIJ'nty~ South Bay's Median Home Prices DroppIng ~~ $900,000 $..800,000 $700,000 $600.000 ...... " $500,000 . $400,006 $300,ooq 00,000 , - .- $.1.ooiooox. "$0 - ... .~ .~19a8 ~ 99Q1992i1994 19961998 2000" 20022004 2006 2008* Median Detached Price ,. 2006 Peak - $773,019 I 2008* Current- $573,982 I % ~hange - ~ Median Attached Price ! 2005 Peak - $417,348: 2008* Current- $337,0321 % Change - (-19%) South Bay D.etached South Bay Attached .5an Dle~o .... . 2008* is averagedthrough throug~September. Source:HanleyWbod;8ullillan Group. > '.. .. '.~' .. >1",>".\/tJ'; .-,-:'~'0i;>. I, tl"'''I''^Ii'Vh :l:3,:::~:stf~1J?~i!; , ~';~-'i~;J;:ITAhciJ~t1';~I' ':~Hl-N0r0~';!L!ill3mt.~ '" ",\~-A:verage'~-BasePrices' ,~__ ,,~ept~l!!ber ~008,_~ ~::::~:alley 'J' $j ,000;000 ,$900;000 Escondido San Diego County Oceanside San Marcos (l) ,0 .... :'c: c.. (l) (/) III III "(l) , '" ~ ~u- g>., $400,000 .. ...- -:~::- - (l)" ' > ',$300;000 <l: " ,:" , ,$200,000 La Mesa $993,165 $825,155 $685,917 $677,723 $561,634 $555,442 $550,105 $525,939 '.Atiach~d.projects andS-alesRate South Bay 20.0 3Q2008 Projects -17 i j Sales Rate - 0.5 ! 18.0 ! 16.0 ~ ~ Ql .- I1l 14.0. a: II> Ql 12.0 ~ '" 10.0 :5 " o 8.0 .:; Ql ~,c:n 6.0 ~ Ql > ., <( 4.0 , , , \ 2.0 , 0.0 "od'- "::>od'-,,o<::,Vo,,::>o<::'Vo :p.<::,'o ,,::>0<::''0 ,,0<::''\ "or!), ,,0<::,'iJ -,,::>0c:,'iJ -. I flllIlliil Projects -+- Sales Rate I - . -, -=..~ - Source: Hanley Wood; Sullivan Group. ~:Detachef/ Projec~s ~ndSalesRate oSouth Bay < 'I/J" ......,,,, u -., '0", ~ - 0.- ~ 25 :;::; u ~: 20 0- ! - ! I I .-! ~ 15 -, ~ :1 ~- ~ " - ~ ~ - -j 91913 871 3 . 91911!"t'.'81T . .'ft, 6;/"., -"<-_.._.;..---_.~._,_.~-----~ 91977 799 7 'j" - .- ,'''s,' '~:' - - ~- "-,......-:',r":;..-r'";: .,91910"" . 676 . . .,' 8."" 91915 650 9 ~1rr-'11;'""!r'l~~~1'T' .:.,91914,,:.,,:"385.. ",";"2.3', T" 92019 332 27 0'~"ST:~t"'S'"~'";_;(1_\1F'''':;--;sp ,',~21.16t"" ..167... "',,,,,.51,.,;:,,: 91978 99 66 ik Note: Zip codes. ranked out of 100 zips. Sourc".DataQuick. Ma Point- Sullivan Grou Housing--Cycles Ha've 5 Parts - Highest Output . 2. Recession, bottom ' --Recovery ^- .. EXPANSION <." 1 5 05 2 '07/'08: -@T ,.- ---~ Sourc"e,: Sullivan..Group Real EslaleAdyisors - ....~.. DebtuLoad - . - - - - -- ---- - -- , - . . . ~ - - V'y' JobLosse.s, c _ _ ~.- Liquidity -- ----- ---- . -- -- - - - - -- ---- -- . - - ~- - 'C 0__ -- -_ -- .....~ - ,", ,.""., .. . low Confidence -.. ,-, .--- - - .. .~'V:Al~"Y Interest.Rate. ,... Thereis:no ind~p~ndeht~vari~bl~~ ,. .-, , :- ".--' i '. -- - -- ~- - - .., ,," -, , '-. ;t , -EfIQIVl ngProduct ltedltlonal'A' 1,083 sq. f1. lrodUlonal'B' 1,383 sq. fl. Troditionnl 'C' 2,171 sq. It. 1,083 sf 1,383 sf 2,171 sf m ~.. ..~ _. . ~ .-.. .-... _.' _- . ~. _._. . - .- ._._'C-'" ._ -" _ .. ...- ..'R~ fgr,$tabilit~af'1d.R~covery~ . . n . ,'"., . - -._- .. The focus: jobs ,and foreclosures ..., "."~ '''', .!... .. .." ' ".. .,,' __, --.. 'r'" '" . '-' - .- .. . --" -..- ... " o Inflation worries soften, " . '. -Loweroil costs , , - Lower.inte'rest rates - ., ," __C' .. __ ,_ Banks take an active role in repricing .-- '0- .- -- ." n..:'. '0 ' -.. . ~ . · C~nfiderice Upswing? ' . ,.. ,.,. ,. . UopreQede,nted na!iongLand international Rolicy" cooperation NewadmiriistrC)tio(l Newy~ar , . .-.. -- 'SoUrce:'Sullivan GrOup " " , , ,{ .- --. " '.',WildCard: :rheC~omrrlerciaIMarket . -'0 . . We:~still have pain ahead but' Why is there opportunity if! Southern California? . C-,. '., .....:':: . "c. ':: ...', ..:0"" '" .-_:_:. --:c.-,:.: .:..> :::. fheClassicfuridamel1tals are still in place: Weather ~Quality of.Life ... Improved gffordability . -,,:-:.: -::: _,.;' ,-:".::.: _0"":";"" "__ . Supply is being consumed (and we really do have a . "limited" lot supply) . ..~. .. ... .. ::., .:,.__.. ....... ......,:.:....,. "',0"_,..,. ...0', ,",....,. ......... · . Lan . scbeing looked.atas a cliability again... .. ,c".."-: ,.... .....".--- .. ....._,_...... ~ = - . - ~ "" - .._ - up._ _ __ ~ HEO,Home~. selling bfHowreplCJpemei]tcpstinSoFal . '," ".- . - C'...... ,. are varyingleveJsof' r.ebourjdability". ':'''''''''::,':: ;',.. ..:::::::.: -". ~."''c:-'":_'.., ,-'::"_::"'_:..;." ;;"'00:"'<. -.,:.:.::J',,' -:__:>:_.: ',.,,", :.....:_ -,:" .'....:::.._:_,.... ......"..... -'.'C.', .,; "..." ,.... . Source: Sullivan Group - -- - - IiIl - tJIIi - - ':,' "lg:~I'ngo ~- hatted aters ~- - , , - -- - . - m' _ _ _ _.-."' . City of Chula:Vista ,Novel11 bet 17i' 2008 "