Is SLO prepared for possible loss of Measure Y money?

July 16, 2014


The San Luis Obispo City Council received a staff report Tuesday on a contingency plan for the loss of around $6.7 million in annual revenue from the city’s half-cent sales tax. The council responded to the report with no deliberation and moved on to talking about an entry monument at the Highland Avenue city limit.

Measure Y, the city’s half-cent sales tax, accounts for about 12 percent of San Luis Obispo’s general fund revenue, according to the staff report prepared by budget manager Joe Lamers. If a majority of San Luis Obispo voters support a renewal of the tax in November, the revenue stream will extend for another eight years.

If voters reject the tax, though, the city will stop collecting half-cent sales tax revenue on March 31, 2015.

In the case that voters reject the sales tax extension, the city plans to address the loss in general fund money largely through cuts to spending on capital improvement projects. The contingency plan presented by city staff Tuesday included three options, two of which involved cutting $4 million annually in capital improvement expenditures.

City staff claims that it spends about $4 million, or 60 percent, of annual Measure Y funds on capital improvement projects. But, staff has changed its definition of capital improvement projects multiple times and now includes routine maintenance as a form of capital improvement.

Without Measure Y money, the city would focus on covering potholes rather than paving streets, Lamers said Tuesday.

Even with Measure Y in effect, though, staffing costs account for about 80 percent of general fund expenditures. Staffing costs have more than doubled in the last 15 years, increasing from less than $18 million in 1999 to approximately $42 million currently.

The third budgeting option that Lamers presented Tuesday did involve pay cuts for most city staff. In that case, the council would strive to attain $2.2 million in employee concessions, or 5.9 percent pay cuts for all employees whose salaries come out of the general fund.

The council would have to negotiate with employee unions in order to achieve the cuts.

Regardless of how the council would go about cutting expenditures, in the case Measure Y renewal fails, it is likely that city fees would increase. Lamers mentioned in his report the possibility of city staff making up for some Measure Y money by finding new sources of revenue, such as fee increases.

“There may be options for increased user fees, fines or use of property,” Lamers wrote in the report. “Employees throughout the organization will be encouraged to surface revenue-raising options.”

After Lamers completed his presentation and two members of the public addressed the council on the matter, Mayor Jan Marx said Lamers’s report was very interesting.

“I appreciated the matrix in the back going into greater detail and really flush out the different scenarios,” Marx said.

She then moved on to the next agenda item, and no other council member chimed in.

Voters will decide on Nov. 4 whether or not the city will have to make up for approximately $6.7 million in lost annual revenue.

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Of course the City of San Luis Obispo is prepared to lose Measure Y. The City has over $100,000,000.00 in reserves, has the highest water and sewer rates in the entire state of California. In addition, the City has the highest paid employees in the County of San Luis Obispo. And of course the City has spent millions of dollars (out of pocket and staff time) defending itself against stupid actions of staff. All one has to do is look back at the poor legal advice Dietrick provided on the SLO homeless issue and the poor legal advice she provided in regards to repealing binding arbitration and of course Police appealed that issue and won. The City has yet to inform the populace of SLO about this fiasco. Then there have been the 6 plus officers during the past few years busted for extortion, rape, drug importation and dealing, beating people up. But that doesn’t top the stupidity of the Utilities staff for dumping hazardous waste at the back of the City’s Yard, growing pot on City property, running a con game on residents for services the residents already pay for. And there was that employee who got exposed for misappropriating nearly $4000 in City assets, instead of firing him, Katie gave him a big increase the next year – See artice City Rewarding Dubious Behavior. Then to top it all off, remember when Measure Y was voted in, the funds were used to simply back fill funding gaps created when Administration used existing project funds to give these stellar employees raises. Administration will give employees raises and the threat is if you don’t vote for measure Y, the City will reduce services. The City has a $100,000,000.00 in reserves which is larger than any other City under a population of 100,000 statewide.

So no to measure y.

Government is never prepared for having less of our money, which is why they are always planning new and creative ways to get more of it.