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Arroyo Grande is considering a sales tax ballot measure to save its deteriorating roads, but the problem isn't unique to the area 

Arroyo Grande's worsening pavements might have a long-overdue makeover on their horizon. But fixing those potholes, cracked curbs, and crumbling asphalt would cost residents a 1 percent increase in sales tax.

After receiving an "increasingly frightening picture" of its pavements analyzed by city staff, the Arroyo Grande City Council approved the submission of a sales tax increase ballot measure for November's general municipal election.

"Staff indicated that despite our past efforts to maintain our streets, our street condition including our sidewalks have declined," said City Manager Whitney McDonald at the May 24 City Council meeting. "We saw that our Pavement Condition Index [PCI] ... had decreased to 56, down from 69 in 2016."

click to enlarge WORSE FOR WEAR On a scale of 0 to 100, the average statewide Pavement Condition Index is 66, and maintaining streets at that level will cost California a whopping $3.8 billion annually. Locally, Arroyo Grande's pavement index is 56, and keeping the city's streets at that level of maintenance would cost the city $6.3 million annually. - SCREENSHOT FROM CALIFORNIA STATEWIDE LOCAL STREETS AND ROADS NEEDS ASSESSMENT
  • Screenshot From California Statewide Local Streets And Roads Needs Assessment
  • WORSE FOR WEAR On a scale of 0 to 100, the average statewide Pavement Condition Index is 66, and maintaining streets at that level will cost California a whopping $3.8 billion annually. Locally, Arroyo Grande's pavement index is 56, and keeping the city's streets at that level of maintenance would cost the city $6.3 million annually.

PCI comprises scores from 0 to 100 that classify pavement health into five categories. According to Arroyo Grande's 2022 Pavement Management Program update report, pavements in the 91 to 100 bracket are "excellent," 71 to 90 "good," 51 to 70 "fair," 31 to 50 "poor," and 0 to 30 "failed."

McDonald added that it would cost the city $6.3 million annually to maintain Arroyo Grande's 56 score over the next decade. If the city aims to improve its streets to a PCI of 61, it will cost a total of $8 million each year.

"The wear and tear condition of pavements is cyclical. We haven't raised our sales tax since 2006," Bill Robeson, the city's public works director, told New Times. "So, we have a budget that we use from that 2006 money to maintain our streets and sidewalks. But the way to keep up with pavement management and pavement conditions that are degrading are by increasing that budget. One way to do that is through sales tax because it allows for our citizens to pay into that, but it is also heavily paid for by people who visit our city."

Arroyo Grande's current street maintenance budget averages at $1.25 million a year. At this rate, city officials fear that the PCI can worsen to 35 in 10 years. But Arroyo Grande's pavements aren't the only infrastructure items in need of repair. Sidewalks and storm drains are failing too. Almost 3 miles of existing corrugated metal pipes need to be replaced, McDonald said at the meeting. That replacement work is estimated to cost $4 million. Sidewalk segments also need work that total a little less than $1.4 million.

Such infrastructure issues aren't unique to Arroyo Grande. Not only are other South County cities like Grover Beach and Pismo Beach undertaking their own pavement improvement projects, but cities and towns across California are facing rocky roads. Joe Rierie, the pavement engineer for Pavement Engineering, Inc.—a group hired by Arroyo Grande for consultations—attributed the problem to low funds.

"California knows that's a problem. That's why we recently passed Senate Bill 1 [the Road Repair and Accountability Act of 2017]," Rierie said. "This is not just an Arroyo Grande problem; this is around the state. But several local government agencies are trying to solve the problems on their own knowing that the state funding is insufficient for them. So, they're passing sales tax measures and bond measures."

According to the California Statewide Local Streets and Roads Needs Assessment (2021), the condition of local streets and roads improved only by 1 point since 2018. The statewide average PCI is 66, and 55 of the 58 counties are either at risk of having pavements in poor condition or already have poor pavements. Further, California needs $3.8 billion annually to maintain the current level of pavement quality.

"We're seeing inflation hitting everything. It will have an effect on construction materials and on labor," Rierie said. "Oil is used in the production of asphalt, and as the price of oil goes up, you can expect asphalt prices to also go up. Gas prices going up are an indication that oil prices are going up."

Rierie went on to highlight that California cities like Larkspur, Concord, and even Grover Beach closer home passed sales tax and bond measures to fix their local streets.

SLO County residents also had a chance to vote for a half-cent sales tax called Measure J in the 2016 general election. But it failed to garner the necessary two-thirds majority, making cities lose out on a total of $225 million split over nine years for transportation upgrades.

"That would have helped holistically. It was interesting because it was a special tax. It needed a 66.67 percent 'yes' vote, but it slightly missed that. It came in at 66.31 percent," Robeson said.

The new proposed sales tax increase would bump Arroyo Grande's present 7.75 percent sales tax to 8.75 percent. It's estimated to bring in roughly $5.6 million a year. While the City Council is on board to put the measure on the ballot, it would go through a public examination period from July 23 to Aug. 1. The city must file the final ballot measure documents by Aug. 12.

Unlike its South County counterparts, such as Grover Beach and Pismo Beach that pull in sizable revenue through cannabis and tourism, respectively, Arroyo Grande must look at other avenues, Robeson said.

"We have a pretty stable set of resources that come in for our revenue generation. We rely on property tax, sales tax, and we get a small amount of TOT [transient occupancy tax] comparatively to Pismo," Robeson said.

But some Arroyo Grande residents, like Wendy Holland, want the sales tax increase to be lower.

"We live in a beautiful community—in large part because local prosperity (e.g., taxes) contributes to schools, parks, roads, etc., that are well maintained. Everything is going up in price, and if we want to keep what we've got it'll cost us. But I think 1 percent is excessive," she told New Times via Facebook.

While Holland suggested an increase by a quarter or a half percent, a community member at the May 24 City Council meeting also raised a concern about higher sales taxes being regressive on groups disproportionally hit by inflation.

"There are other financing options to go through, like bond measures, but we're trying not to take on a huge amount of debt. This sales tax measure allows us to not take on massive amounts of debt, like in the $50 million range, which a bond measure would impose upon the city," Robeson said. Δ

Reach Staff Writer Bulbul Rajagopal at brajagopal@newtimesslo.com.

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