San Luis Coastal Unified School District and a coalition of six local cities in the county recently reached agreement on an increased proposed settlement with PG&E to offset revenue loss due to the closure of Diablo Canyon Power Plant.

According to representatives, San Luis Coastal still has $8 million to cut from its budget in order to plan for anticipated revenue losses over the coming years, and the cities are still studying the potential impacts.

On Thursday Dec. 8 representatives from San Luis Coastal, the Coalition of Cities, and the Institute for Nuclear Host Communities joined a joint meeting of the SLO Chamber’s Legislative Action and Economic Development committees to share an update, and what the recently-announced proposal means.

“This is going to be a long-term issue,” said San Luis Obispo City Manager Katie Lichtig. “We have to view this as a short-term weigh station on the journey to economic sustainability.”

The proposed settlement agreement between PG&E, San Luis Coastal and the coalition reached in late November will provide $85 million, with a bulk load, $75 million, to be split between San Luis Coastal, the county, cities and community services districts. The $10 million left will go into an economic development fund.

San Luis Coastal will receive $36 million to be put into an endowment. San Luis Obispo County as well as the cities and community service districts will receive portions of the remaining $39 million.

The $10 million in economic development funds will be split between San Luis Obispo ($1.82 million), Arroyo Grande ($747,422), Atascadero (783,106), Morro Bay ($497,472), Paso Robles ($1.15 million), Pismo Beach ($767,028), and the county ($3.784 million). This also includes $400,000 for immediate economic impact mitigation.

The $400,000 is expected to be received by the county in the fall of 2017, according to Lichtig who represented the Coalition of Cities at the joint committee meeting, and will be put to work determining what the impacts of the closure of Diablo will be.

It is known that there will be huge impacts on vendors that work directly with PG&E as well as the school district, however the extent of those impacts as well as the indirect impact needs to be studied.

As for the City of San Luis Obispo, Lichtig said that staff will present to the city council whether to put in place an economic fluctuation reserve to be used to address the changes ahead.

Possible spending options in the city include investing in infrastructure, supporting knowledge and innovation, increasing broadband infrastructure, and tourism attraction.

Lichtig also said that the city wants to strengthen regional partnerships to attract new businesses and will be looking for new and enhanced partnerships between the cities and county to do so.

Even after the closure settlement agreement, San Luis Coastal will still need to cut $8 million from their 2016 budget, according to Ryan Pinkerton, San Luis Coastal assistant superintendent, business and support services, who presented at the committee meeting.

“It’s all people, so that’s super painful,” Pinkerton said. “Were hoping to do this all through attrition, but with that said, there will be layoffs.”

Immediately following the closure announcement in June, the district began looking at potential areas for reduction and, according to Pinkerton, Superintendent Eric Prater is putting together a blue-ribbon budget program to continue this work.

San Luis Coastal is expecting its first installment of the money in 2017.

According to Jennifer Stromsten, program director with the Institute for Nuclear Host Communities, San Luis Obispo County and its cities are working more proactively to address the impacts of the closure compared to other communities in similar situations.

“You are so far ahead of the curve,” Stromsten said. “What you are doing right now is inventing best practices for future regions going through shutdowns.”

She also warned not to make plans based on assumptions and even though planning is ahead of the game, it should be taken further to help mitigate any unplanned impacts such as an earlier closure of the plant.