Arroyo Grande to address $1.2 million budget shortfall

April 28, 2020

The Arroyo Grande City Council is slated to discuss implementing strategies to address a projected budget shortfall, related to the coronavirus, on Tuesday evening.

Before the coronavirus shutdown, city officials were hoping a proposed sales tax increase would pay for increasing retirement costs, deferred infrastructure maintenance, and other unmet needs. Even so, a pre-coronavirus 10-year financial forecast projected a surplus and a positive financial outlook for the city.

Now, because of the pandemic, the city is expecting a $1.2 million budget shortfall. In March, Arroyo Grande furloughed 23 part-time employees.

Michael Stevens, the city’s new administrative services director, is recommending the council reduce expenditures for the remainder of the 2019/2020 fiscal year. He is recommending delaying, postponing, or eliminating expenses, including a travel and hiring freeze. Stevens is opposed to mandatory unpaid employee furloughs.

In recent years, the city has slashed spending through employee layoffs and attrition. In 2018, the city reduced staffing levels, and in turn, service levels in the community by 7.4 full-time equivalent employees.

Last fall, the Arroyo Grande City Council received harsh community criticism for voting to increase council member stipends by 60 percent and the mayor’s stipend by 97 percent.

Government watchdog Julie Tacker recently discovered numerous mathematical errors and issues with credit card purchases and reimbursements for travel expenses, after reviewing several years of expense reports, receipts and invoices.

For example, Mayor Caren Ray Russom used her city credit card to purchase an $18 shot of whiskey and a bottle of Nyquil. After Tacker requested city credit card receipts, Ray Russom reimbursed the city.

In many cases, the city was unable to produce receipts to justify purchases. For example, city staff claimed they lost the receipt for a $135 bill at the Mason Bar.

“This council and staff have been reckless with their bookkeeping,” Tacker said. “City Manager Jim Bergman’s missing receipts do not explain 300 miles of travel on a rental car during the six days he spent in Nashville, Tennessee at a conference.”

In addition, Tacker found a city line-item for purchasing flowers for city staffers who have lost a loved one or former city staffers or officials. However, city staffers regularly use city funds to buy flowers for chosen members of the public who do not fit the criteria.

“If they want to send flowers to someone the staff likes, they should pass the hat, and not use public funds,” Tacker said.

On Tuesday at 6 p.m., the council will meet by teleconference. Members of the public can provide public comment during the meeting by calling (833) 493-5844.