San Luis Obispo adopts $111 million budget

June 18, 2013

money bagsBy JOSH FRIEDMAN

The San Luis Obispo City Council adopted a $111 million budget for the upcoming fiscal year Tuesday night.

Ten years ago, the council adopted a $72 million budget for 2003-2004. In that past ten years, the population of San Luis Obispo has increased by 2.6 percent from 44,359 to 45,525, yet the budget has increased by 54 percent, or nearly $40 million.

The council voted 3-1 Tuesday in favor of the 2013-2015 financial plan, which includes a $129 million budget for fiscal year 2014-2015.

The city plans to increase capital improvement spending by $17 million in 2014-2015, which accounts for most of the $18 million increase in the overall budget from 2013-2014.

In the last financial plan, the council budgeted $99.9 million for 2011-2012 and $99.6 million for 2012-2013. The city spent a total of $101.6 million in 2011-2012 and has yet to finalize spending for 2012-2013.

The current financial plan also includes a $57.4 million general fund for 2013-2014 and a $56.7 million general fund for 2014-2015.

The general fund in 2003-2004 was $33.2 million.

Councilman Dan Carpenter cast the lone dissenting vote, saying the budget did not adequately address the long-term fiscal health of the city.

“You cannot just pass a budget to pass a budget because we’re up against the cliff again,” Carpenter said.

Carpenter said the current budget did not do enough to address the city’s unfunded pension liability, possible loss of Measure Y revenue and upcoming contract negotiations with its employees.

At the conclusion of 2010-2011, San Luis Obispo had accumulated $107 million in unfunded pension liabilities, which the California Public Employees Retirement System (CalPERS) expects the city to pay off over the next 30 years.

During the budget process, city management proposed a self-imposed 1 percent increase in the city’s total payment to CalPERS in 2014-2015, followed by a 2 percent increase in 2015-2016. Likewise, interim finance director Wayne Padilla said the city is considering issuing a pension obligation bond to cover the long-term liability.

Measure Y, the city’s half-cent sales tax that generates about $6.5 million annually, will expire on April 1, 2015 if voters do not renew it. The current budget has a contingency plan for a potential loss of Measure Y revenue over the final three months of the financial plan, but the council has yet to determine how it would proceed beyond 2014-2015 if voters do not renew the tax.

In its last round of employee negotiations, the city received $3.1 million in compensation concessions. Carpenter said that, at the time, the council majority intended to negotiate more concessions in salaries and benefits in the next round of negotiations.

The current council, which temporarily has four members, has not made any plans to negotiate more employee concessions. The next round of negotiations will begin during the upcoming budget cycle.

Mayor Jan Marx said the council approved a “very conservative, very well crafted budget” but said Carpenter raised very serious issues. Marx proposed a council study session to discuss Carpenter’s financial concerns.

The council spent much of its budget deliberation Tuesday night debating whether or not to add an additional police officer to the downtown area. After about two hours of debate, the council chose to add the extra officer and take money out of street, parking lot and traffic sign maintenance to do so.

The adoption of the budget finalizes water and sewer rate increases for most San Luis Obispo residents, which will take effect July 1.

CORRECTION: The budget increased by 54 percent, not 35 percent over the last decade.


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Well at least our overworked public servants make a nice living…


Someone needs to be able to afford watering their lawns…


Another local government on a steroid overdose with little, if any, sense of reality!


“Mayor Jan Marx said Carpenter raised very serious issues and proposed a council study session to discuss Carpenter’s financial concerns”, funny wouldn’t discussing financial concerns be something you would do prior to adopting a budget?


You have to pass the bill in order to see what’s in the bill! Duh!


And you wonder why we are in trouble…


It’s worse than you think. An increase of $39 million, from $72 million to $111 million, is 54%, not 35% as stated. It’s only 35% if you DECREASE the budget from $111 million to $72 million. In contrast, the cumulative rate of inflation from 2003 to 2013 was 27%. So basically the budget increased by twice the rate of inflation.


I’m very pleased with the decision to add two Police Officers dedicated to the downtown area. Perhaps myself and my family will begin to go there once more after avoiding the area for over three years.


I doubt that the merchants missed me and my family, but I’m pretty sure that we weren’t the only ones avoiding the area because of all the low lifes and bottom feeders that inhabit and infest the down town.


Hopefully, the increased Police presence will make SLO a safer and more pleasant place to visit.


If you have been avoiding the downtown area for the over three years, then please, continue to do so. Who are you to judge other people? If you don’t like them, then ignore them. I don’t seem to have a problem with any of these “lowlifes” and I love spending time downtown. I would rather have these lowlifes than a bunch of snobs any day.


Terrific for you, hang out with them all you like, I’ll pass if you don’t mind. It’s pretty obvious that t’m not alone in my feelings. Didn’t the Downtown Association push for me LEO presence mainly because if this issue?


Sometimes just “ignoring” one of those people doesn’t work, some refuse to be ignored and they’re the ones I take issue with..


Quite honestly, I have never had a problem with anyone refusing to be ignored. Maybe I tend to walk fast and purposefully and that alleviates the problem. I sincerely have no clue what these people who agree with you (and I know there are plenty) are talking about.


“I have never had a problem with anyone refusing to be ignored. Maybe I tend to walk fast and purposefully and that alleviates the problem.”


And perhaps you’re just lucky. Most folks I know that would like to visit the downtown area aren’t there to “walk fast and purposefully”. They’re there to leisurely shop and perhaps visit one of the local restaruants. They go there to enjoy the town and what it has to offer and not to have to ignore a bunch of agressive panhandlers, or step over drunks and druggies.


I’m not so concerned for myself. I’m more concerned about people like my wife and her friends. She and a friend were approached by one of those bottom feeders that just refused to back off. They ended up giving him some change, not because they felt sorry for him or wanted to help, but simply to get him to leave them alone.


That was my wife’s last shopping trip to down town SLO.


Great article. It raises the question, If the population has not increased, and we have cut out most capital improvement projects, and raised fees and fines and surcharges and rates and sales tax to bring in additional money, and we have not substantially increased the staff, and inflation has been negligible, Where is all this money going? Dan Carpenter is right: it is going into salaries and benefits. Are we really any better off as residents than we were ten years ago when the budget was $40 million less? Are we getting our money’s worth? I think not. That $40 million increase translates to an additional $1000 per resident of city government.


I will NEVER vote for Measure Y. The only way to stop this madness is to stop the flow of money to city hall.


A pension obligation bond is the worst possible “solution,” it’s like borrowing money on a credit card. It will also impact negatively our ability to borrow money later if need be .


Someone needs to take a tough stand with Dan Carpenter and get this spending under control. All this budget does is kick the can further down the road. But hey, Katie et all will be retired on their $200,000+ retirement at our expense so why should they care? Their goal is to get through this and let someone else straighten it out. It worked for Ken Hampian and Bill Statler and they will continue this fine legacy of irresponsibility as long as the voters put up with it.


Mayor Jan Marx said the council approved a “very conservative, very well crafted budget.”


The terms “Jan Marx” and “very conservative” and “well crafted” just don’t belong together.


More accurately, “Jan Marx” doesn’t belong anywhere near or in government of any kind.


Anybody have an extra pitchfork they can lend me?


The sad part is; I don’t think they would care if we all grabbed a pitch fork. Today…Government does what they want when they want and we can all eat cake…


Advance to GO, collect $200.00.


Or, as in Marx’s case, Pass “jail” and collect another $1,000 per resident! Hooray for dishonesty and corruption being rewarded! Yay! Vote DCC! Yay!