San Luis Obispo has gained more revenue than expected from various taxes, putting it in good financial standing, according to city finance director Charles Bourbeau.

In a time where two California cities recently declared bankruptcy, San Luis Obispo is steering clear of financial trouble.

The San Luis Obispo City Council approved the city budget for the upcoming 2012-13 year on June 19, making this year the first in four years the city has made no cuts to the budget. Several factors, including Measure Y taxes, a Transient Occupancy Tax and personal compensation reductions, allowed the city to reach this point, said Charles Bourbeau, the director of finance and information technology for San Luis Obispo.

It was not always like this for San Luis Obispo — the city had to work at the budget to make it sustainable, City Council member John Ashbaugh said.

“We were all biting our fingernails, on the edge of our seats for a while,” Ashbaugh said.

Some of the solutions to the budget problems came from employees of the city voluntarily taking changes to their contracts, Ashbaugh said. He said all city employees, except the police, have agreed to the sustainability program consisting of personal compensation reductions, though the City Council is still negotiating with the police. It is hoping for a 6.8 percent compensation reduction from everywhere though, Ashbaugh said.

“We expect great things from our employees, and in general, they do (great things),” Ashbaugh said. “Not only do they provide a job, but a public service. And they want to work hard to retain the good will from the public.”

In addition to cutting the budget, a few things have set San Luis Obispo apart from other cities, which could contribute largely to its good financial standing, Ashbaugh said.

One of these is the hard work of San Luis Obispo firefighters, Ashbaugh said. He said the city’s firefighters are always leaders in negotiating and “set a standard” for other employees to follow suit in creating tremendous cost savings.

Another factor in San Luis Obispo’s financial solvency is the city’s tourism-orientated taxes. The Transient Occupancy Tax, or “bed tax,” for hotels, as well as Measure Y taxes — the 1/2 cent sales tax passed in November 2006 — brought in a lot of money this year.

Bourbeau said a lot of that money came from the fact that the city is a nice tourist spot with plenty of places to shop and stay the night.

“It’s an attractive place to live and for people to come to,” Bourbeau said.

The next step in the equation for San Luis Obispo is to maintain existing infrastructure and all the enjoyable qualities of the city, Bourbeau said.

“(The previous budget cuts) set the stage for us to reach this point, to at least be stable,” he said. “We need to be able to spend enough money to sustain infrastructure.”

According to Bourbeau, this year the city is devoting $5.9 million to capital improvements, though he said this is not enough.

“We would like to put $9 million a year into these improvements,” Bourbeau said. “If you don’t maintain your roads, streets, buildings and equipment, they are going to fall apart later. And people aren’t going to be happy. You need to spend enough money to keep that from happening.”

Fortunately for some residents things are looking up.

San Luis Obispo resident, Colby Reece commutes an hour to work every week.

“I live in (San Luis Obispo) because I love it here,” Reece said. “I work a week out at a time, and I get to just come here and live.”

The 23 year old said he feels the current financial situation of the city is more appealing for someone of his age.

“I want to settle down in (San Luis Obispo) and hopefully raise a family,” Reece said. “Being nervous about jobs after college and money in general has always been a concern for me … (but the city) is in such good shape. It’s just more incentive for me to stay here in the future.”

Leave a comment

Your email address will not be published.