SLO city budget doubles in 8 years, surpasses $200 million

June 11, 2019

By JOSH FRIEDMAN

The city of San Luis Obispo’s budget has more than doubled from approximately $100 million to more than $200 million over the last eight years. [Cal Coast Times]

Last week, the San Luis Obispo City Council adopted a two-year budget that totals $200 million in 2019-2020 and $208 million in 2020-2021, according to a city news release. By contrast, a decade ago, the city adopted a $95.6 million budget for 2009-2010 and a $100.5 million budget for 2010-2011.

In 2011, the city council adopted a pair of budgets that were slightly below $100 million. Rising staffing costs have contributed significantly to the doubling of SLO’s budget since then.

City officials are touting the new budget as an end to SLO’s pension-liability induced shortfall. SLO officials are now projecting a balanced budget for the next five years, ending in 2023-2024, with a commitment to paying off its approximately $150 million in unfunded pension liabilities.

Following a decision by the board of the state retirement system, CalPERS, to lower its investment forecasts, SLO had been facing a projected $8.9 million budget gap over three years. The budget gap is now closed, and San Luis Obispo will increase its pension payments in order to eliminate its unfunded liabilities over a 20-year period, city officials claim.

SLO plans to invest $13.8 million in a pension trust, a special fund that will protect the city against pension rate fluctuations and will enable it to earn higher returns on investment funds in its plans, according to the city press release. Likewise, the city is creating a $1 million General Fund Revenue Stabilization reserve to help offset unanticipated market fluctuations.

The increasing efforts to pay down unfunded pension liabilities come at a time when the city’s retirement costs have been skyrocketing. SLO’s annual payments to CalPERS have increased to more than $10 million in recent years and could exceed $20 million in the coming decade.

Additionally, CalPERS is still phasing in changes to its investment forecasts, which causes unfunded liabilities to spike. In response to questions from Cal Coast Times in Oct. 2017, City Manager Derek Johnson said SLO had an unfunded liability of more than $165 million when factoring in the CalPERS rate adjustments.

As Cal Coast Times recently reported, the average full-career retiree from the city of SLO receives an annual pension of approximately $90,000.


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mary margaret

This is what the mayor and city council of SLO need to do. Stop with the B.S. and really tackle our outrageous debt. They are supposed to be directing the staff, but instead staff in directing them to fatten salaries which also increases staffs’ huge retirements. It’s plain old corruption.

KVEC 6/14/19

Guadalupe City Debt Nearly Paid

Guadalupe City Officials say they have taken steps to close their budget gap. Over the past few years, Guadalupe has cut its debt from 700,000 dollars to recently reported 44,000 dollars. They add that good management and a few positive measures helped put the city back on track. Officials say they can now focus on issues such as Public safety and recreation. A new city budget includes increases to police and fire departments. Officials are also hoping to resurrect Guadalupe’s recreation program in the near future. and have the current 44,000 dollar deficit eliminated by the end of the current fiscal year.


standup

What do you expect with people like lib Harmon and her cronies in charge.


womanwhohasbeenthere

The budget is a sham. Where is this extra $7.5 million a year for 20 years coming from? Not from cutbacks, layoffs, outsourcing or anything else, but the latest proposed sales tax increase. And $7.5 M a year for 20 years is still not enough. Until the root cause of the problem – incredibly high retirements and never-ending growth in staff – is tackled, this problem will continue to grow exponentially.


Pensions should be capped. $90,000 a year in retirement from a small city is ridiculous. A non-government employee would need to accumulate close to $2 million in investments to hope to generate that kind of retirement income. How many people in the private sector can save and invest successfully to have that much money by age 50 or 55 on the same salaries paid city employees? None I know.


nazbol gang

And not a single thing has improved for me or anyone I know. The cost of living continues to rise, the wages continue to stagnate. Basic services aren’t being maintained. There is less policing of crime downtown. There is more vandalism. There is more homelessness. Who is that money helping exactly? These morons can’t even pave Higuera, a small stretch of road, the most basic job of government.


kayaknut

” the wages continue to stagnate”, not if you work for the government. ” Who is that money helping exactly?” once again the government. “the most basic job of government.”, again is to grow the government, increase salaries, benefits and pensions.


DocT

Well said kayaknut. The only thing that gets me more riled up than government goons stealing money from the productive class is the productive class thinking government goons are there to help them!


nazbol gang

We get it, you are a classical liberal, but most people don’t work for the government. So your “muh government is the source of all ills” type of liberalism isn’t appropriate here.