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City Takes Immediate Action to Address Financial Challenges Due to COVID-19 Emergency; Begins to Plan for Economic Recovery and Resiliency

Post Date:04/08/2020 1:30 PM

The City of San Luis Obispo is actively addressing both the short and long-term economic impacts of the COVID-19 emergency.  The City has taken immediate action and plans to develop an Economic Recovery and Resiliency Plan. The plan will focus on actively engaging in economic stability and recovery efforts in partnership with residents, businesses, and community and regional partners while building long-term resiliency to support San Luis Obispo into the future.

While providing essential City services in response to the COVID-19 emergency, the City has also taken immediate steps to address the financial impacts of this unprecedented event. In March 2020, the Council allocated $6.2 million of one-time year-end savings to support the City’s emergency response. At the same time, the City activated its Fiscal Health Contingency Plan limiting hiring and purchases to essential services and closing City programs and services not allowed under the Shelter at Home Order, resulting in approximately 100 fewer part-time and seasonal employees. The City has also taken a number of steps to support local businesses including the City Council recently approving the delay of late fees and penalties for transient occupancy tax remittance through August 31, 2020.

“Our community has always overcome challenges and emerged even stronger from them,” said Mayor Heidi Harmon.  “Our priority right now is to continue providing essential services to protect the health and safety of our City. It will take a community wide effort to develop and implement a plan that puts us on a path towards economic recovery and resiliency. I am confident that we are better together and that our strong relationships with our residents, the County, Cal Poly, local businesses, and community organizations will result in a collaborative effort as we all lean into efforts to revive our economy.”

As of April 7, 2020, preliminary revenue projections foreshadow a loss of approximately $6.5 million in revenues primarily from significant declines in transient occupancy and sales tax. Revenues are also lower in the Parking, Transit, and Water and Sewer enterprise funds. In addition to the immediate actions already taken, further cost reductions are expected as part of the 2020-21 budget, scheduled to be adopted in June. Those reductions will focus on limiting the overall impacts to the community while also ensuring the City is in position to support recovery efforts. The City’s Economic Recovery and Resiliency Plan will be presented to Council with the 2020-21 budget in June and will provide goals and objectives in support of economic stability and recovery efforts in partnership with residents, businesses, and community and regional partners.

“I am proud of the steps we have taken to manage our fiscal health during this unprecedented time,” said Derek Johnson, City Manager.  “We are committed to doing what is necessary to both protect public health and safety during this emergency and take actions that will repair the economic damage that has been caused.”

For more information from the City’s response to COVID-19, please visit www.slocity.org/covid19. The City is committed to keeping our community informed.

To receive updates from the City regarding COVID-19, please register for City News e-notifications on the City’s website at www.slocity.org or follow the City of San Luis Obispo on social media.