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Fortress of solitude 

Consolidation falls flat, but Arroyo Grande continues pursuit of new police station

The city of Arroyo Grande is pushing once again for a new police station. But this time around, it had hoped a prospective merger with the Grover Beach Police Department, in the face of shared budget woes, would add a little weight to its plea for new digs.

The Grover Beach City Council recently put an abrupt end to those talks. But Arroyo Grande is trucking forward, on the premise that the new station is needed regardless of whether it plays host to a neighboring agency.

On June 5, Arroyo Grande voters will decide on a ballot measure to refinance city-issued bonds totaling $6.7 million for the construction of the new proposed $8.3 million station.

A simple voter majority will authorize the city to issue new 30-year bonds that would retire those the city issued in 2003 to construct the current fire station. The remaining $1.6 million or so for the new station’s construction will be covered through a combination of local sales tax revenues and on-hand redevelopment funding, as well as proceeds from the sale of the existing station and three lots that will be created from the new station property. City Manager Steve Adams told New Times the primary objective in refinancing the fire station bonds was to avoid passing the costs along to property owners.

According to a report drafted by City Attorney Tim Carmel, the upcoming bond measure includes repaying the 2003 bonds partly through property taxes, at a rate of no more than the current tax rate on the existing fire station bonds. The new station would also be partly covered by revenues from a 2006 local sales tax measure passed to pay the balance of the bond payment.

According to a city staff report, the funding is also partly dependent on a purchase of those bonds by the U.S. Department of Agriculture through a low-interest community facility-financing program, which provides low-interest loans to help local jurisdictions with facility-related projects. Under the program—which the city applied for in March—the federal government purchases the bonds, which Adams said will amount to “substantial” savings in reduced fees when compared to selling the bonds through a traditional sale process.

The USDA is now awaiting the election results before it finishes processing the city’s application. Adams indicated that feedback from USDA representatives has thus far been positive. He said availability of federal funding for the project could change in the near future, which is why the city applied in advance of the vote.

Estimates by Alan Miller, the city’s financial consultant, indicate that the highest annual tax rate to property owners for the bonds will likely be equal to the current tax rate for the fire station bonds—or $8.17 for every $100,000 of the property’s assessed value.

In other words, the annual property tax assessment rate will remain the same, City Manager Adams explained. The difference, he said, is the city will take on new 30-year bonds rather than paying off the existing bonds over the next 10 years. Adams noted that roughly half the debt service payment will be covered by local sales tax revenues in order to avoid increasing the property tax assessment rate.

Should residents turn the measure down, the current fire bonds will remain on the books and would be retired in no more than 10 years.

This isn’t the city’s first go at a bond measure to get the citizenry to put out for a police station; a similar referendum failed to pass muster in June 2010.

In March, Arroyo Grande Police Chief Steve Annibali took New Times on a tour through the city’s antiquated station, pointing out a number of reasons the department needed the new facility, “yesterday.”

First of all, Annibali said, the building was never designed for use as a police station. The city bought the former telephone line switching station in 1973, and last updated it in 1989. Since then, department staffing levels have increased from 12 full-time and six part-time employees to 34 full-time and 15 part-time employees.

Some officers work in trailers behind the building; the leaky roof requires tarps to cover certain sensitive equipment.

“We’re in trailers here already,” Annibali said. “We’re not talking about cushy offices for our officers here … and we’re not talking about something out of a CSI show. We’re talking about a legitimate station with adequate facilities.”

Some residents, however, see the most recent push for a new station as an incentive to execute the proposed consolidation—or vice versa—resulting in greater power for Arroyo Grande. Arroyo Grande estimated the merger would save it approximately $400,000 a year.

If the proposal for consolidation of services had gone through, Grover Beach would have contributed lease payments for the new property, somewhere to the tune of $54,000 annually.

Both Annibali and Adams told New Times the recently deceased proposal relied on the construction of a new police station, but they don’t see the argument for the new station diminished in light of recent events.

“They’re connected, obviously, but that doesn’t mean they’re mutually exclusive,” Annibali told New Times.

He added that if the measure doesn’t pass, it wouldn’t only affect the possibility of continuing talks on any merger in the future, but would also mean another few years—at least—of hardships for his own department, and money will likely have to be spent putting proverbial lipstick on a pig.

As of press time, there was no organized opposition to the bond measure, and no opposing argument published in the county’s voter guide.


Staff Writer Matt Fountain can be reached at

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