“Look on the bright side,” seemed to be the mantra of San Luis Obispo city officials at a special Sept. 30 budget meeting. It wasn’t easy.
The city, which has built up reserve funds and tackled more capital projects lately, thanks to a half-cent sales tax increase voters approved under the 2006 Measure Y, is suddenly $4.8 million in the hole.
Finance Director Bill Statler said the city suffered a number of economic setbacks this year, including lost revenues totaling $1.4 million from declines in property taxes, sales tax, and hotel taxes. Statler moved quickly between slides and graphs, outlining the depth of the fiscal crunch.
By far, however, the biggest blow was from the $5.4 million settlement awarded to the city’s police union.
“If not for the outcome of the binding arbitration,” City Manager Ken Hampian emphasized, “We would not be here tonight.”
Ultimately the city council approved a new budget that includes deferring $2.3 million in Capital Improvement Projects and a hiring “chill” that will put off hiring new officers for a “Neighborhood Policing Team.” It also dips into reserve funds.
Earlier this year, the SLO Police Officers Association won huge raises after negotiations with the city stalled and both parties entered into binding arbitration.
In August, the first round of checks was cut to police officers, including $50,000 for each officer for retroactive pay. The new starting salary for a police officer with a high-school diploma and basic police training is $85,000, including overtime.
Staff and members of the council made clear that Measure Y was paying for the raises rather than the roads, open spaces, and public safety improvements voters were promised. This year, police salaries will consume the entire pot of Measure Y funds, Councilman Andrew Carter said. The ongoing cost of raises will consume half of Measure Y funds each year thereafter.
“If we didn’t have Measure Y,” Carter said, “We’d really be up a creek.”
Streets, sidewalks, and flood control will take the biggest hit; close to $3 million will be removed from Capital Improvement Projects alone. And 10 percent will be chopped from public safety budgets, including $480,000 from police and fire budgets.