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San Luis Obispo gathered with dozens of residents in the Ludwick Community Center on Jan. 26 for its biennial community budget workshop, which sets the stage for the city's next two-year financial plan.
But before locals could weigh in on their preferred priorities, goals, or projects, city officials delivered a cautionary message: the upcoming few years would likely be constrained by rising costs and general economic uncertainty.
"There are some strong economic headwinds at play that we're taking a look at," SLO City Manager Derek Johnson told a packed house. "Inflation has a rather insidious impact on everyone's budget, including local government."
Johnson said that rising construction costs have resulted in a 23 percent cost increase to the city's capital improvement plan. He noted steep spikes in the latest estimates to build the Prado Road overpass at Highway 101 and the Nipomo-Palm Street parking garage.
During the next fiscal year, the city's estimated budget shortfall for all planned capital projects is $8 million to $12 million, he said.
"The promises we've made over the last decade or so to deliver key infrastructure projects, those are costing a lot more than all of us ever imagined," Johnson said. "We're trying to balance what it's going to take to deliver those key projects."
As a result of the Jan. 9 floods, the city is also grappling with about $9 million in unforeseen emergency repairs. While the Federal Emergency Management Agency is expected to reimburse the city for those costs, that could take several months or years to happen, Johnson said.
"Right now, as of today, we have over 100 sites that are going to require rehabilitation," he explained. "Those range from bridges and roads to culverts and stream banks."
Despite the ominous introduction, SLO residents didn't hold back in sharing their thoughts on the 2023-25 budget. Nearly 100 citizens or groups submitted letters to the city ahead of the workshop, and several more spoke during public comment.
Arts and culture organizations made a strong collective pitch to receive priority in the budgeting process. Supporters of the SLO Repertory Theater spoke to the importance of the city moving forward with its long-planned parking garage downtown, which pairs with the nonprofit's plans to build a new theater next to it.
"Our board wrote to you this week regarding our appeal for arts and culture to remain a part of your major city goals," said Ellie Washington, a board member with SLO Rep. "We have so much forward momentum—having raised 72 percent of our capital campaign goal—we can't slow down now. We need the city's continued support to ensure arts and culture remains one of the driving forces of the city's economic recovery, resiliency, and fiscal sustainability."
Cal Poly third-year student Ethan Gutterman echoed his support for the theater and asked that the city reconsider plans to build an estimated $52 million new police station, a sentiment echoed in a handful of written public comments.
"What City Manager Johnson said about economic struggles [is] pretty scary. Is now really the right time to debt finance $52 million for a new police station?" Gutterman said. "Is that the kind of messaging we want to send to the citizens of SLO—having the SLO Rep theater have to practically beg for money. Do we want to prioritize building this brand-new police station or public safety center when the option is there to retrofit it for less than half the cost?"
Several other projects and priorities across the city were identified and supported in written public comments. Those ranged from an appeal for the city to help fund a restoration project at the historic La Loma Adobe house; to prioritize maintenance at the Santa Rosa Park hockey rink; to support public safety and infrastructure improvements at City Farm SLO.
City officials said they would compile the results of the Jan. 26 community workshop, public comment, and a citywide priorities survey in time for an upcoming City Council meeting scheduled for Saturday, Feb. 9. During that meeting, the City Council will set its "major city goals" for the 2023-25 financial plan. Δ