Elsie Soares was standing in front of her Grover Beach home on a recent Wednesday, pointing out places where she’d used sand and a shovel to try to patch the potholes lining her street, when a woman walked by with her dog.
“Don’t step in a pothole,” Soares warned the walker. “I see where our tax dollars are going,” the woman responded dryly. “I don’t know where.”
The exchange captured one of the challenges that Grover Beach council members will face as they attempt to get voters to pass a $48 million property tax measure on the Nov. 4 ballot that would cover the cost to fix city streets.
Some residents, like Soares, who has owned property in the city since 1970, wonder how the city has been spending their tax dollars over the years.
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“We’ve been paying taxes since the 1970s, and now they want to repair the streets at our expense,” she said.
City officials say they’ve spent more than $11 million over the past two decades on road rehabilitation, but their small budget has historically not been able to stretch far enough to provide basic city services while also properly maintaining 45 miles of wide, paved boulevards — more than 10 million square feet of asphalt.
More than 65 percent of the city’s streets are in poor or failing conditions, a recent analysis found.
City officials decided the only way to make any real, noticeable progress was to somehow get a large infusion of cash. On Nov. 4, the city’s registered voters will decide whether they’ll support a $48 million bond to rehabilitate and reconstruct all 29 miles of residential streets and some of the major thoroughfares.
City officials expect to issue a series of bonds every three years for 20 years. The bonds will mature in 25 years, which means that property owners will pay an annual assessment until the last bond matures — for a total of 45 years of assessments. Selling the bonds in stages keeps the assessments lower in the first few years, rising each year as more bonds are sold. As each bond series matures, the assessments begin to drop.
Some residents, including former council members, say streets have consistently been a top priority for years and that the city has been chipping away at a long-term street rehabilitation program.
“It’s probably the most-repeated desire among council members and city staff than any other project,” said property owner Peter Keith, who served on the Grover Beach City Council in the 1990s, including a stint as mayor.
Keith, who now lives in Arroyo Grande, is considering changing his voter registration to his Grover Beach home so he can vote to support the bond measure in November.
“It’s just finding the money, and every time Grover gets to a place where it thought it had money for reserves … the state, for example, would come in and say we’re eliminating redevelopment,” Keith added.
Grover Beach is mainly a bedroom community with fewer retail centers and hotels than neighboring cities Arroyo Grande and Pismo Beach from which to draw tax revenues. The city receives just 14 to 17 cents out of every dollar of property tax paid, City Manager Bob Perrault said.
Sales tax revenues make up only 20 percent of the city’s general fund budget, while property tax comprises 49 percent.
With 13,432 residents, Grover Beach is the fourth-largest of San Luis Obispo County’s seven cities, but its budget is the smallest of any incorporated city. Grover Beach’s general fund received $7.3 million in revenues in the 2013-14 fiscal year that ended June 30, with about 50 employees.
By comparison, Morro Bay, with 10,461 residents, had a general fund budget of $12.6 million and 101 employees in the 2013-14 fiscal year; Pismo Beach, with 7,861 people, had a $16.5 million general fund budget and 88 employees.
(The largest revenue source for Pismo Beach’s general fund is transient occupancy tax, or hotel tax, which brought in about $7.3 million — the same amount as Grover’s entire general fund budget.)
“The reality is it’s just been too much for any given council,” Perrault said. “I don’t think they were attempting to ignore it; they were trying to do what they could with resources they had.”
Costs outrun funding
Previous councils never created any sort of fund specific to road improvements. In the late 1980s and the mid-2000s, city councils discussed putting a bond measure before voters, but the efforts never materialized.
Articles in The Tribune as far back as 1986 reported on numerous street projects as well as budget cuts for various reasons, including the recent Great Recession.
“This is the year of the street,” former Grover Beach Mayor Dave Ekbom declared during a Chamber of Commerce lunch on Jan. 27, 2000, after the city learned it would receive a $1.3 million grant to widen Oak Park Boulevard.
Recently, when asked to reflect on the city’s spending on streets, Ekbom said: “We’ve had times when we’ve spent a half a million on streets, but a lot of times it was $300,000 to $400,000. That’s nothing for repairing the streets we have.”
Spending has never kept up with the continuous need for maintenance and repairs, records show. In 2001, for example, a city official estimated the city needed $43 million in street improvements. That year, the city budgeted $300,000 for street repairs.
Information provided by Public Works Director Greg Ray lists 83 street projects since 1995, at a total cost of about $11.3 million, or an average of $565,000 a year. The problem, Ray said, is once a street starts failing, it is much more expensive to maintain.
“Once you’re past a point in a street’s life, the cost to keep up with it is astronomical,” he said. “We probably reached that point 20 years ago.”
At this point, a consultant estimated, the city would have to spend $8.6 million a year for 10 years to bring all of the streets into very good condition. Then, with the streets fixed, annual maintenance is estimated at $1.6 million.
Better roads, better business?
Officials hope the city’s tax base continues to grow with new development, which will help Grover Beach continue a better maintenance program.
One of the key projects is the Grover Beach Lodge and Conference Center, which officials hope serves as a catalyst for economic development. Construction could start next year on the 150-room hotel at West Grand Avenue and Highway 1.
“This council recognizes that we’re getting to a point where we have no other options,” Perrault said. “We can’t wait any longer. We need to develop a long-term street rehabilitation program that is adequately funded to ensure the system remains intact.”
Local officials say smoothed streets would improve property values, encourage more investment in the community and keep response times low during emergencies.
“The community will benefit,” Keith said. “And people traveling through the community are going to have a better time — we’re not going to break their jaw, spill their coffee, break an axle or juggle the baby in the baby seat.”
At Five Cities Fire Authority, interim Chief Riki Heath said potholes are hard on the heavy fire engines and the firefighters try to avoid them. Streets with serious issues that firefighters try to avoid if they can include parts of Oak Park Boulevard, South 13th Street, Longbranch Avenue, Seventh Street, Ramona Avenue and Newport Avenue.
“If the streets are getting worse, of course we’re going to respond much slower,” Heath said. “In bad weather, a vehicle like that can slide going down a steep hill.”
Built to fail
Grover Beach’s street problem is compounded by the way the roads were designed and built. In the late 1800s, D.W. Grover, the city’s original land subdivider, designed a street system in a grid pattern with wide avenues — some as wide as 60 feet.
It was laid out as a resort community, with small lots conducive to beach bungalows. The streets developed in different ways. Some were built with little or no base material. Some were just packed sand and oil.
“Once they were used enough, they would pave over the oil and sand,” Ray said.
The city incorporated in 1959 partly with the hope that more money would be available for street repairs than they had received from San Luis Obispo County.
“The roads were in pretty miserable shape, and that was one reason why the residents of Grover Beach were anxious to incorporate — so they could get tax revenue that was going to the county and put it into their streets,” recalled Cliff Clark, a retired attorney who was instrumental in the city’s incorporation and helped draft its municipal code.
Damaged tires, dented rims
A drive around Grover Beach is a jarring experience, with parts of some streets pockmarked with potholes and others literally turning back to gravel.
A map of road conditions prepared by the city’s consultant shows failing or near-failing sections of streets throughout town. More than 85 blocks are considered in very poor condition.
Several residents interviewed recently said they avoid driving on certain streets, or have had to have their vehicle’s wheels aligned more frequently.
The city has received more than two dozen claims for street-related damage to their vehicles over the past 10 years totaling more than $16,000, according to records obtained by The Tribune.
Of those, 20 people claimed that a pothole or rough road surface damaged a rim, tire or other vehicle part. Last year, one Nipomo woman filed a claim saying she fell and hit her head on the pavement after stepping out of her parked car into a pothole.
Information on how many of the claims were substantiated by the city was not available.
Soares said she once saw a Volkswagen car lose its bumper while going over a pothole on her block of Saratoga Avenue.
Which streets to fix?
Ten years ago, the council adopted a process to categorize streets for rehabilitation. A few years ago, the council adopted a short-term strategy that prioritized projects on 13 heavily used streets. That has led some residents to criticize the city for spending money on larger streets such as West Grand Avenue, and ignoring some residential roads.
Soares’ portion of Saratoga hasn’t had any major rehabilitation work in the past 20 years. It isn’t on the list of major streets.
If the bond fails, Ray said, the city will likely continue to focus on major streets, and try to put any leftover money toward pavement replacements on the worst residential areas.
Soares said she plans to vote against the bond measure. “How do I know it’s going to get fixed?” she asked. After all these years, she sees a silver lining in the potholes covering her street: “They slow down traffic.”