Arroyo Grande mayor’s state of the city

June 4, 2018

OPINION by MAYOR JIM HILL

The state of the City of Arroyo Grande is good. We have a highly dedicated staff working diligently for the betterment of our city.

Financially, Arroyo Grande is better off than the vast majority of California cities with regard to the challenge of unfunded liability from the California Public Employees’ Retirement System (CalPERS). In our proposed 2018/2019/2020 budget, Arroyo Grande is stepping up to pay off a significant amount of this obligation using a portion of our reserve funds. This will reduce the amount the city will have to pay in future years and result in significant savings in overall financing costs.

The CalPERS obligation is based on a formula involving two variables – the shortfall of PERS funds with respect to their projected statewide pension costs, and the interest rate PERS receives on their investments. The large initial shortfall resulted from significant investment losses PERS experienced through the last economic downturn. The actual PERS investment return has also been considerably less than projected.

These combined variables have increased cities’ obligations to make the defined pension benefit payments. A lower, more accurate projection of achievable PERS investment income (termed the “discount rate”) increases the annual payments required for cities to make up the resulting deficit.

These increases have already bankrupted other cities such as Stockton. Even if PERS were fully funded at some point, future losses or shortfalls from projected income would produce additional unfunded liability costs for the city.

Arroyo Grande has aggressively moved to reduce operating costs in order to maintain our strong financial status in light of the difficulty in predicting these conditions. I always welcome your input on this and any other matters.

Arroyo Grande is working on affordable and attainable housing projects, both on the ground and in the planning phases. We are also cognizant of the community’s struggle with homelessness and have been a valued partner in the 5 Cities Homeless Coalition’s Warming Center through the last several winters and will be again next year. We are grateful for the volunteers and other agencies collaborative efforts to keep this important facility available to people in need.

It is exciting to see the Fair Oaks Medical building under construction and Arroyo Grande Hospital expanding its Emergency Room. These projects will benefit all in our city.
The Arroyo Grande Shopping Center is also coming along nicely; new shops are opening and we look forward to seeing it filled.

The Courtland and Grand housing phase is nearly complete and we are eager to see a commercial project to support this and the Berry Gardens neighborhood.

The East Grand Avenue Master Plan has us looking forward to more commercial projects that will further benefit residents and help the city’s bottom line. We are working to be a premier “business friendly” city and strive to encourage more business into the city.

Additionally, the Branch Street Inn is well under way; this will bring visitors to the Village and surrounding areas and increase revenue to the city. The East Branch Streetscape project will help with safe access to Paulding Middle School and smooth traffic through that corridor.

The East Cherry Avenue Specific Plan has been adopted; it includes attainable housing and widening of East Cherry Avenue, which should alleviate longstanding traffic concerns there.

A very exciting event is the completion of the Brisco/Halcyon interchange environmental document. I helped secure approximately $6 million from SLOCOG to partially fund this project and we invite public input into the two possible fixes for this long-problematic intersection. While we’re at it, we’re about to rebuild the Bridge Street bridge; it will retain its historic look while getting a whole new undercarriage that will be strong enough to withstand heavier traffic for decades to come. This will be paid for by state bridge funds without additional cost to residents.

Another historic community icon, Camp Arroyo Grande, has been purchased by the Five Cities Men’s Club who have been responsible for numerous community projects such as the restoration of the Paulding Wall. The city is working on ways to partner and utilize this historic open space in the heart of town for city functions and other public uses. Our volunteers and service organizations directly contribute to the betterment of all of us and

I sincerely thank them for all their efforts and involvement.

Of course, as with any city, not all things are rosy. While the Five Cities Fire Authority provides very professional emergency response, we are working through significant economic challenges there. With the considerable growth in the area, FCFA is embarking on an effort to change its model from the old style volunteer fire department to a modern professional fire company.

Affordability issues remain regarding staffing and needed service levels in the proposed FCFA “strategic plan.” The associated budget increases costs dramatically and is currently unsustainable.

After eight years, important issues of service optimization, such as possible closure of one fire station that could provide for more economical service, still have not been addressed. I opposed a draft Memorandum of Agreement on this subject because of too vague provisions and too long a time for resolution while Arroyo Grande residents continue to shoulder a disproportionate majority of the ongoing costs.

The city is also working within its role at the South San Luis Obispo County Sanitation District to overcome several personnel changes and political disruptions in order to bring you the cleanest treated wastewater at the lowest price. To that end, we have started on our secondary treatment redundancy project, which will improve discharge quality in the near term and move significantly closer to optimally recycling our wastewater stream to augment our water supply portfolio.

Partnering with Pismo Beach, a fully operational demonstration wastewater recycling plant has been installed at the Pismo Beach wastewater treatment plant under our trademark “Central Coast Blue.” Please take time to become familiar with this important project that produces clean fresh water from discharged waste at much lower cost than desalination and even lower cost than alternative recycling technology. Implementation of the full scale project is the ultimate answer to our ongoing drought challenge.

We continue to balance the charm and quality of life of Arroyo Grande against new development and still meet our service needs, Police and Fire being paramount. I always welcome public input and look forward to a safe and healthy summer.