San Luis Obispo City Council to make $12.4 million payment toward pension debt

SAN LUIS OBISPO, Calif. -- The San Luis Obispo City Council on Tuesday adopted roughly $24 million in current fiscal year budget adjustments, which includes making a $12.4 million payment toward its pension debt – the single largest additional payment to date, according to the city.

“Our fiscal health strategies are working. We are now able to make many important one-time and some long-term investments that will help us meet the most vital, highest-priority goals identified by our community last year,” said City Manager Derek Johnson.

“COVID-19 impacts are still top of mind, but we’re able to pay down a significant amount toward our pension debt, grant funds to SLO Rep Theater, invest in new legacy projects, address workforce shortages, homeless outreach services, and make major improvements to bridges, bike paths, parks and more.”  

The pension payment will save taxpayers $19 million and put the city on track to paying down its unfunded liability 10 years ahead of schedule, according to the city.

During a mid-year budget report presented on Tuesday, the city said it found itself in a "uniquely positive" financial position, allowing the opportunity to address major city goals and services with more funding for community needs.

The city also approved $3.94 million from one-time grant funds to assure the construction of the new SLO REP Theatre that could generate more than $3 million annually, according to a SLO REP economic impact report.

The mid-year budget forecast also planned for an increase in the city's staffing cost to bring employee salaries closer to the salaries of similar employees locally and across the state, according to the city.

“We remain committed to providing the high-quality public services our community expects and needs,” Johnson said. 

“To do that, we must commit to paying fair and competitive salaries that help us attract and retain talented, qualified, and experienced team members.”