Parking, social needs are top budget issues as SLO emerges from year of COVID, protests
San Luis Obispo City Council members held a lengthy discussion Tuesday on how best to shape a roughly $200 million, two-year budget proposal that focuses heavily on major city goals and infrastructure — including financial planning for the new $43.5 million Palm-Nipomo parking structure.
The budget talks come as the city emerges from a year filled with pandemic losses and social justice protests tied to the Black Lives Matter movement, both of which have substantially shaped how the years ahead might look.
SLO’s major city goals include housing and homelessness, diversity and inclusion, climate action and open space, and economic recovery.
Overall, the city projects a balanced budget with $99 million in revenues in 2021-22 fiscal year, starting in June, and $103 million in 2022-23, with planned spending just under those amounts.
It is receiving $8.93 million over the next two years as part of the American Rescue Plan Act designed to help it recover from the impacts of the pandemic, filling a gap created by lost revenues.
The final budget will be adopted in June, and this week’s discussion was designed to give direction on priorities based on staff recommendations. The new preliminary plan will be released May 18 with more detail.
City Manager Derek Johnson said the budget attempts to tackle “brutal” challenges facing the city, reflecting the country at large, such as systemic racism, climate change, homelessness and economic disruptions from COVID-19.
He acknowledged “there have been chronic policy failures, and that can be frustrating to the community and people can get disillusioned.”
“There is no one-size-fits-all solutions to socially complex issues like systemic racism, homelessness and economic hits from the pandemic,” Johnson said. “At the end of the day, the city of San Luis Obispo can’t do everything.”
Johnson said the city’s needs require partnerships with community organizations and residents, and SLO will seek to build upon civic engagement and collaboration to improve the city at large.
“These are ambitious efforts,” said in regards to social service spending. “Sometimes it can be challenging when throughout the course of the year things come up that seem both urgent and necessary. ... These are socially complex issues that require human behavior changes of human beings, and that’s hard for organizations, and particularly us, to move forward with. But we can do it.”
Downtown parking
Among the most substantial items in the plan is the new parking garage, which will help replace the loss of 130 downtown parking spots converted to parklets, with overall estimated reduced meter parking revenues of $350,000 per year. The parklets are expected to remain permanent on an ongoing annual basis.
The parking structure construction cost would be funded mostly through about $33 million to $37 million in debt obligations (bonds or other state-issued loans), with the rest coming from the city’s Parking Fund.
Construction would begin in 2023 after plans were pushed back due to COVID impacts, city officials said. The garage is expected to open in 2025-26.
Downtown parking structures saw about 80% occupancy before the pandemic, indicating growing need for a new garage, city officials said.
The Palm-Nipomo garage will be located in an expanding cultural corridor that includes the planned new SLO Repertory theater, the SLO Children’s Museum and nearby Mission Plaza.
Moving forward, the city will recommend some measures to boost revenues, such as eliminating one-hour free parking in downtown structures (while nearly cutting in half the daily parking costs in garages) and introducing paid parking in some parts of the city, such as Railroad Square and the Upper Monterey Area.
The proposed new parking restrictions also would also serve to encourage alternative forms of transportation, such as biking and walking, SLO officials said.
Social services vs. police
The budget became a major point of debate this year as racial and social justice advocates turned out to council meetings to call for more spending on social services versus. police.
While supporting the highest quality of police officers possible, Mayor Heidi Harmon expressed concerns about any police budget increases.
“This is a very complex and controversial topic,” Harmon said. “In my own thinking, I don’t necessarily want to see the police budget go up. I hear that loud and clear from a lot of people.”
City staff proposes a police budget estimated at nearly $18.96 million in 2021-22 and a $19.82 million budget in 2022-23, compared with a $17.8 million budget this year, the most of any department in SLO. The department has 89 employees, with about 60 sworn officers.
But the budget increases are to maintain contractual obligations to meet staffing costs through labor agreements with unions, and operational expenses roughly will hold steady.
SLO Interim Police Chief Brian Amoroso cited cost increases totaling $180,000 for some re-classifications of employee positions, software for a state-mandate program on detentions and arrests, and software related to evidence — but the department also lost a detective position assigned to cannabis-related work.
Johnson also noted that a contract re-negotiation process with the police labor union is forthcoming.
“This (new budget) is not an expansion of services,” Johnson said. “It’s providing the same level of service we’ve always had. The city agrees to wage and benefit increases with bargaining groups. What you see in the budget is largely a reflection of those changes in the commitments that we’ve made to those bargaining units.”
At the same time, the city is looking to fund programs that allow it to better serve marginalized communities like the homeless.
For example, a second Community Action Team (CAT) social worker to assist the city’s only CAT team worker John Klevins — who conducts regular homeless outreach — is part of the new police budget because Klevins works in coordination with the city’s police.
And the city proposes spending $1.13 million for new resources directly on affordable housing and homeless in 2021-22 and $1.07 million in 2022-23. That’s in addition to $2.3 budget in ongoing spending for housing and homeless needs, as part of the two-year cycle.
The new budgeting pays for a new mobile crisis unit to respond to homeless needs, a 25% expansion of 40 Prado homeless shelter, and social worker resources, in addition to inclusionary housing program costs.
The city doesn’t have a social services department, and has been collaborating with the SLO County government (which does) and nonprofits to find ways address some of the ongoing mental health, substance abuse and homeless needs.
But officials are considering support to help fund a gap to complete the new $1.67 million detoxification facility at 34 Prado, which is short about $135,000 and is seeking money from other SLO County government agencies and donors as well.
Other SLO housing and infrastructure-related programs that set aside millions of dollars also help people get off the street and into new low-income housing, which have a social services benefit, SLO officials said.
How major city goal will be funded
Some of the proposed budget items focus on major ongoing city goals, such as:
▪ Economic and social recovery: $12 million in 2021-22 and $16 million in 2022-23, including for shop-local incentives and childcare programming
The council also directed the city to allocate $50,000 for a community workforce agreement. That money will explore, through a study, how best the city can partner with local workers on future labor contracts as it has on its current wastewater treatment plant upgrade project.
▪ Diversity, equity and inclusion: $1.1 million in 2021-22 and $930,000 in 2022-23 for forums, programming and projects that celebrate culture diversity and underrepresented community members, as well as support and attract minority-owned businesses through grants and other spending initiatives.
The council directed spending $40,000 on a Multi-Cultural Center feasibility study — which has been supported by the Diversity, Equity and Inclusion Task Force. The study will help determine the project requirements for size, a possible commercial kitchen, meeting space, staffing and more. Cheng Park at Santa Rosa Park also will receive upgrades of about $300,000 in the budget.
▪ Affordable housing: $11 million in 2021-22 and $27 million in 2022-23 to boost housing opportunities downtown and in neighborhoods, as well as addressing homeless challenges and creek cleanup.
▪ Climate change: About $15 million in each year of the two-year budget cycle to address climate action goals, including best practices for urban forestry, preserving the greenbelt and electrifying the city’s bus fleet.
Infrastructure improvements
Other funding will go to variety of infrastructure improvements throughout the city.
Laguna Lake dredging is proposed for $840,000 through SLO’s Measure G sales tax measure this summer as part of a pilot program that covers about 10% of the lake.
An allocation of about $2.4 million through SLO’s Measure G sales tax measure would go to the Prado Road interchange that will add a Highway 101 connector for new residents at San Luis Ranch and throughout the city, partnering with the developer and Caltrans to fund the project, which is still in the planning and design stages.
The city has penciled in about $6.4 million total from its overall funding sources to contribute to the Prado interchange project, which will help alleviate traffic congestion as 1,300 new homes are under phased construction at the San Luis Ranch site off Madonna Road and Avila Ranch near the airport in coming years.
The city also is proposing to add $22 million over two years for the Prado Road creek bridge replacement and South Higuera/Prado Road intersection to facilitate the future Prado Road interchange, adding bike lanes, sidewalks and more there.
The city’s wastewater treatment and water reclamation project will continue its ongoing $140 million construction through a State Revolving Fund loan at its site near Prado Road, with completion expected in late 2023 or 2024.
The city will be proposing a sewer rate increase of 3.5% in each of the next three years to meet overall needs, including the new sewage treatment plant costs and collection system infrastructure.
The city’s Anholm Bikeway project recently was awarded over $1.7 million from the Urban Greening Grant Program to complete the construction of the Anholm Neighborhood Greenway, a bicycle and pedestrian route connecting the downtown north to Foothill Boulevard and the Highland Drive entry to Cal Poly.
A Tank Farm/Orcutt roundabout construction will be supported by $3.6 million in 2021-22.
This story was originally published April 25, 2021 at 5:00 AM.
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