OPINION By OTIS PAGE
Both the mayor and the city manager of Arroyo Grande are soliciting comments on the city’s financial status. I suggest one way to respond to their request is to suggest that citizens look at the problem this way.
That the city’s expenditures may be considered as the citizen’s money that is spent in providing services to them.
The city in this sense acts an agent for the citizens while the citizens also pay independently for water, sewer and garbage pick services.
To explain this, I will use general assumptions that are approximate numbers about the city and its general fund.
The following assumptions closely parallel the city actuals:
City population: 16,000. Number of residences: 8,000. Annual general fund expenditures: $16,000,000.
This means the city is spending $1,000 Per Citizen or $2,000 per resident of your money each year.
Considering this is your money, is it reasonable to ask are you receiving as a citizen appropriate services along with the entitlement of being a citizen of the city?
It might help in understanding this explanation to consider what everyone considers to be a major service: the police.
Using the same rationale the police budget is $6,000,000. That translates to being approximately $375 per citizen or $750 per residence each year. Is that a good deal? Security is number one on my list!
The Five Cities Fire Authority (FCFA) poses a different problem since it also covers Oceano and Grover Beach.
The FCFA Budget is $4,000,000. 45 percent, $1,800,000, is Arroyo Grande’s share. This means $113 per sensitize or $225 per residence. Residences typically have provisions for fire insurance. Does the Arroyo Grande amount of $225 seem adequate?
Again, think of this as being your money. The analysis could apply to other departments such as Parks and Recreation and Public Works in a group of all others. It is one half of the general fund at $500 per citizen or $1,000 per residence.
Could there be savings here? Probably, but one area really sticks out and it is a major issue.
The PERS Retirement is $2,000,000 a year. It is $125 per citizens or $250 per residence a year, your money. What would $125 a year mean if you saved that with interest for 20 years – the retirement age?
For more information click here.
It is rich in detail and without question shows why Arroyo Grande is a great place to work compared to the businesses it serves. It is for that fact alone that the city council and the city’s administration must answer the question, is the city becoming too expensive spending your money for the service it renders?
6 Comments about “Is Arroyo Grande becoming to expensive to run?”
Thanks Otis for a really useful way of looking at it. Typos abound, but the article brings a useful tool for considering how city funds are used.
Overall Budget: $16,000,000
Doesn’t leave much for public services that generate the money for the budget, public works, roads, administration etc. Plus CalPers costs are purported to need to be at least doubled to fund the unfunded amount of money to meet it’s obligations:(
This is going to be happening to Cities and Special Districts all over the State, by not dealing with it until now, the cuts will become Draconian!!!
As long as the cuts are in the number of city employees and salaries and benefits I’m all for it. But what I feel will happen is a rush for early retirements by those same employees that should be fired in hopes to cement those pensions and push the problem they have refused to address for decades to those after them. Rats leaving a sinking ship comes to mind.
Citizens pay $2,000,000 for retirement benefits for City employees. How many employees does the city have?
Some offered suggestions:
AG 2016 Population was 18,097, ref: https://www.google.com/search?q=arroyo+grande+population
Re. FCFA 2017 Budget, $5,133,836, ref. https://tinyurl.com/AG-FCFAFullTimeProposal
RE: PERS Retirement, $125 at compounded at an optimistic 1% APR interest for 20 years yields a one-time $33,029, ref. http://www.moneychimp.com/calculator/compound_interest_calculator.htm
While not chump change, it’s hardly a sufficient nest egg to enter ones retirement years on.
Comments are closed.