The San Luis Obispo City Council this week unanimously approved a nearly $225 million budget for fiscal year 2026-27 during a late-night vote.
The 5-0 vote advances goals tied to substandard housing, business licenses, code enforcement, and several other city priorities.
Mayor Erica Stewart said, “I think all of us are trying to continue to not just stay balanced, but find this balance of what we can do and what we can’t do.”
The approved budget includes goals related to:
Cultural Vitality & Economic Resilience Diversity/Equity/Inclusion Homelessness Response Housing & Neighborhood Livability Infrastructure & Sustainable Transportation Open Space & Climate Action.
The budget is balanced and draws revenue from nearly $56 million in sales tax, $27 million in property tax, $11.5 million from tourism, and additional sources.
Councilmember Michelle Shoresman pointed out the importance of long-term financial discipline.
“I just want to reemphasize that I think it’s important for us to stick to our priorities when those numbers shrink, of paying down our pension liabilities and also saving for some of the big projects we have coming up,” Shoresman said.
The upcoming projects Shoresman referenced include a new fire station, a new police station, and the Prado Road Bridge work, the completion of which would allow work to begin on the Prado Road overpass project.
Vice Mayor Emily Francis also stressed the importance of following through on commitments made to residents.
“We’ve been making some real promises to the community,” Francis said. “We’re going to need to find the funds to make sure we’re funding these things sustainably.”
The newly-approved budget takes effect on July 1, the same date previously-approved rate hikes for water and sewer start. Water rates are set to rise 5.5%, a change that will directly impact local businesses that rely heavily on water. Residential customers will also see sewer bills increase 6.5% as part of the budget.
Hannah Martin, owner of Pristine Paws Grooming in the Laguna Village Shopping Center off Los Osos Valley Road and Madonna Road, said her water bill may surpass $1,000 a month with the rate increase.
“Currently, I go through $900 to $1,000 already in water a month,” Martin said. “We do between 13 and 19 dogs a day between the three groomers we have here.”
Just across the parking lot from Pristine Paws is another business that relies heavily on H20, as it is Coastal Cure Pure Water’s core product. Employee Andy Rojas said the rate increases are already on his uncle’s radar; his uncle has owned the business for more than two decades.
“The store goes through about 40,000 gallons a month,” Rojas said. “When I started, the water was 50 cents a gallon; now it’s 70 cents.”
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