To avoid budget shortfall, Arroyo Grande lays off workers, will increase fees

Sorry, Arroyo Grande residents — you'll no longer be able to get help at City Hall on Fridays.

The decision to close up shop early isn't to give workers extra-long weekends to enjoy the Central Coast. It's a cost-saving measure while the city tries to avoid a potential budget crisis.

Starting July 6, Arroyo Grande city workers will no longer be available to help residents at the Branch Street office. Instead, they will be inside finishing work from the week and completing their other job duties.

That's not the only change residents can expect to see in the coming months. City Manager Jim Bergman said the city has also laid off workers, increased fees and is restructuring departments to improve efficiency.

"We can't get to the point where we are doing more and more with less and less," Bergman said. "We have to get to the point where we are able to provide services with what we have."

During the national recession in 2008, Arroyo Grande underwent an era of cutbacks that saw the city trimming its services temporarily while it weathered the economic storm.

Bergman cautioned that residents shouldn't expect these latest changes to follow that same pattern.

"The recession was obviously big," he said. "But here's the difference with a recession: You know there is going to be good times ahead. With these cost increases and pensions — it's not just a 'you can ride it out' situation. Now we are to the point we are going to have to cut back permanently."

According to Bergman, economic forecasts indicated that Arroyo Grande's expenditures would soon significantly outpace its revenue — due to increases in costs such as the California Public Employees' Retirement System (CalPERS) and an ongoing funding struggle at the Five Cities Fire Authority. The city anticipated a $900,000 budget shortfall in the 2018 fiscal year.

If left unfixed, the city would face bankruptcy within four years, Bergman said.

"We all know that's not going to happen," Bergman said. "We have the option to change that train, and I think that's what the council has done with it's latest budget. It has said, 'We need to reverse that train.' "

The Arroyo Grande City Council on June 12 approved an $85.9 million two-year budget that authorized layoffs, a $5 million payment to CalPERS to reduce unfunded liabilities, departmental budget cuts and other restructuring to reduce costs.

"I think it's pretty financially prudent," Bergman said of the budget.

With the budget, nine positions were scheduled to be eliminated: four in the Community Development Department, three in the Police Department and two in Public Works.

Of those, three full-time employees chose to retire and receive incentive packages, three part-time workers left to finish school and one reserve police officer will work reduced hours, Bergman said. Two of the positions were vacant intern positions that will not be replaced.

Bergman said some of the positions could later be filled by lower-level employees, while others won't be filled at all. That saved the city roughly $447,000, according to a staff report.

The council on Tuesday also approved a new fee schedule that could add between $250,000 to $387,000 to its coffers annually.

The new plan will increase fees for city services like childcare, adult sports, facilities rentals and development permits, to help cover the full cost of providing those services. It goes into effect Aug. 27.

"I appreciate that we're not trying to make money, we are just trying to cover our costs," Councilwoman Kristen Barneich said. "And we really provide a really good service. When you look at all the things the city is doing, I have a lot of faith in the people performing those duties. It's a good deal for the money."

Meanwhile, the city also decided to reduce public service hours at City Hall, Bergman said.

Starting July 6, city workers will spend Fridays completing their jobs duties without interruption from the public.

"We're calling it 'Finish It Friday,'" he said. "You know when you go into work early and get more done in those early hours than your usual ones because people aren't needing to be helped? We're hoping it will be a way to help improve productivity."

The change won't impact the Police Department, recreation services or Public Works, he said.

Going forward, Bergman said the city could still choose to implement more cuts and changes if the budget situation does not improve.

"Our motivation is to provide the best services we can," he said. "We just have to get there."

This story was originally published June 28, 2018 at 5:40 PM.