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Arroyo Grande city leaders look for ways to bring in more revenue

Posted at 11:11 PM, May 28, 2019
and last updated 2019-05-29 02:44:35-04

The city of Arroyo Grande is facing a more than $3.5 million budget shortfall.

The city says it needs this funding to maintain public facilities.

The city manager says this isn’t a new topic, but rather something the city has been working to address for years.

He says it’s likely not unique to Arroyo Grande.

A couple of ideas were thrown around to address this situation during a meeting Tuesday night.

Among the solutions were a potential half-cent sales tax increase and more economic development.

“This is the point in time where we need to talk about the need and how we are going to fund it,” said Jimmy Paulding, Arroyo Grande City Council Member.

$2.4 million annually is needed to maintain spaces including parks, government buildings, and drainage facilities.

Close to another $1.2 million would be needed to keep streets and parking lots properly paved.

Outside of the recently approved $22 million Brisco Road Interchange project, the shortfall could potentially impact the use of Measure O-06 funds for improvement projects citywide.

Mayor Caren Ray Russom addressed the council’s accountability to its citizens in what the tax measure money should be spent towards.

“I don’t see this as a zero-some game or even that the majority of the money would go to Brisco,” said Jim Bergman, Arroyo Grande City Manager. “If you walk around our town, it’s a beautiful town, but it’s very easy to see that there is a lot of work that needs to be done.”

According to a city report, the majority of the city general fund revenue comes from property and sales taxes.

Council member Lan George is looking for short term and long term solutions.

“From what I am hearing, possibly a tax measure would be a short term (solution) depending on how quickly that would get through and on the ballot and more long term would be the economic development,” said Lan George, Arroyo Grande Council Member.

Bergman says two years ago they realized the city would eventually be spending more money than it was getting.

“We fixed that in this budget,” said Bergman. “We all in common own a bunch of property and it started to deteriorate as time goes on and how do we replace those assets that previous generations bought for us and we’ve been using.”

Increasing economic development could increase revenue from business licensing fees and a transient occupancy tax, but those could take time.

Council members were looking at this shortfall with a multi-faceted approach, and their discussion will likely continue in the future.

If the council looks to increase the sales tax, it would have to be approved by voters.

Tuesday night, council members directed city staff to look into hiring a consultant to break down ways the city can effectively and efficiently generate revenue.

The city is also looking for funding for the 5 Cities Fire Authority.