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Posted on: June 16, 2023

City Council Adopts $56.1 million City Budget for Fiscal Year 2023-24

Contact: Sarah Johnson-Rios, Assistant City Manager/Administrative Services Director

June 16, 2023

City Council Adopts $56.1 million City Budget for Fiscal Year 2023-24

Morro Bay, CA – On June 13th, the Morro Bay City Council adopted the City’s Fiscal Year (FY) 2023-24 Operating and Capital Budget, which funds all City services and capital projects from July 1, 2023 through June 30, 2024.  The budget makes key investments in operations, City staff, capital improvements, and paying down pension liabilities, while also preserving healthy financial reserves to weather future emergencies and economic downturns.  Members of the community can access the budget in digital or printable PDF format at

The FY 2023-24 expenditure budget of $56.1 million includes $36.6 million for operations and $19.5 million for capital improvements (excluding transfers between funds). The budget funds core services including police, fire, water, sewer, parks, roads, recreation, community development, code enforcement, and harbor; supporting administrative services such as human resources, information technology, and finance; and 31 capital projects to improve our shared built environment. A portion of the robust capital improvement budget will fund efforts to repair infrastructure damaged by the winter storms. The capital budget also invests $2.1 million in street paving, a higher level than in prior years, and $13.8 million in water and sewer capital infrastructure projects ($6.8 million for the final components of the Water Reclamation Facility project and the remainder for crucial sewer main replacement work and other priority utilities projects). Smaller amounts are allocated to sidewalk improvements and street tree replacements, Veteran’s Hall improvements, storm drain maintenance, the design of a remodel of the living quarters at the old Bonita Street Fire Station, and trash/recycling can replacements, among other projects. 

The budget also funds action items to achieve the Strategic Planning goals established by the City Council, including: Improving public infrastructure, Achieving economic vitality, Addressing housing needs and homelessness response, and Improving community engagement. 

The City has largely recovered from the economic impacts of the pandemic although recent events related to storm damage and national economic cooling have negatively impacted our financial situation. The City’s major revenue sources, particularly those tied to discretionary spending and tourism, had recovered to pre-pandemic levels but are now flattening. Measure E, passed by Morro Bay voters in 2020, continues to support the City's ability to deliver core public safety services and make progress toward addressing infrastructure needs, though infrastructure needs continue to exceed funds available.

Given macroeconomic uncertainty on the horizon and expenditure growth outpacing revenue growth, the City’s strong financial reserves in all its funds (totaling over $14 million citywide) would help the City weather a future emergency or recession.  This budget also includes $1 million investment into a pension trust fund to help lower the City’s pension liability.   

Lastly, the FY 2023-24 is presented in an interactive web-based format to make it easier for community members to track their investment in the City. To learn more about the Budget, please visit:

Interactive Digital Budget Book