SLO City Council adjusts budget as tax revenue increases

With improved tax revenue and tourism, as well as prudent spending during the pandemic, the San Luis Obispo City Council made mid-year budget adjustments designed to help “pay off pension debt sooner.” , advancing great city goals, supporting existing public services and meeting emerging community needs,” according to city officials.

The board approved a $24 million budget adjustment mid-year that targets priorities including support for a new theater and pension reimbursement.

As part of its Tuesday meeting, the city council also asked staff to come back with recommendations to prioritize $4.5 million in one-time funding from the American Rescue Plan Act for housing and l homelessness, as well as $100,000 for additional assistance to local nonprofit organizations.

“We will likely hold a public study session at a council meeting prior to the June discussion of the supplementary budget (taking into account housing and homelessness spending),” said Whitney Szentesi, head of city ​​public communications.

On the revenue side, “we have a lot of good news,” said Brigitte Elke, chief financial officer of SLO.

The city cited increases in hotel and sales taxes, with increases of more than 30% in key economic sectors “due to the shift from services to goods, inflation and available savings”, notes a staff report. This is in addition to increased tourism due to the lifting of COVID-19 related restrictions.

“We expect strong revenue growth to continue through 2023,” Elke said.

The city saw lower-than-expected cannabis revenue, down about 26% from budget projections, because “only one of three (licensed citywide) retailers is open and operational,” Elke said, as well. only two delivery companies.

The city plans to add another retail storefront and a new delivery business early this year.

SLO_MegansinSanLuisObispo06 (2)
Megan’s Organic Market, the first recreational cannabis retail store in San Luis Obispo, opens at the former Drum Circuit location on Higuera Street. David Middlecamp dmiddlecamp@thetribunenews.com

Budget adjustments

Due to its revenue sources and priorities, the council’s mid-year changes to the city’s biennial budget include a $12.4 million payment for its pension debt, the largest additional payment to this day.

The source of available funding is a mix of revenue increases and spending savings, with a “cautious decision by City Council to retain the balance of funds available for 2018-19 and 2019-20 to secure city finances. at the height of the COVID-19 pandemic. said Deputy City Manager Greg Hermann.

“This payment puts the city on track to pay off its unfunded debt 10 years ahead of schedule, saving taxpayers $19 million in the long term,” an SLO press release noted.

The council also earmarked a $3.94 million grant from one-time funds to ensure the construction of the new SLO REP theatre, approved by council after a planning review in 2019.

“Once fully operational, the new theater could generate an economic impact of more than $3 million per year, according to an SLO REP economic impact report,” the city said.

The city also pledges to raise salaries for its employees, saying the base salary is 8.55% below the median.

“As a general industry standard and consistent with the city’s labor relations goals, a classification that studies within 5% of the market median is considered competitive,” said a staff report from the city. town.

The exact amount of the increases is still being assessed.

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Nick Wilson covers the city of San Luis Obispo and has been a reporter for the San Luis Obispo Tribune since 2004. He also writes regularly on K-12 education, Cal Poly, Morro Bay and Los Osos. He graduated from UC Santa Barbara and UC Berkeley and is originally from Ojai.

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