With revenue expected to decrease this fiscal year in Millbrae, city officials are being cautious with city expenditures.
The City Council will vote on the 2014-15 budget Tuesday, June 6 and is showing some concern for its estimated $52 million total budget. The projected beginning general fund balance for Millbrae is about $12 million, while the projected ending fund balance is $6.2 million. That’s with approximately $23 million in revenue and about $26 million in expenditures.
“I’m worried that we’re going to [have a shortfall] the next few years because our revenue stream is not keeping up with our expenses,” said Mayor Wayne Lee. “It’s a huge concern. We just have less revenue from the businesses — it’s a mixed bag. We lost Kohl’s, but we got back Safeway and Aloft (Hotel).”
The city is still not keeping up with expenses for pension costs and there’s a possibility of some retirements that could have million-dollar pension costs, Lee said.
During the council’s first budget study session on the budget May 31, it discussed how water purchases from the San Francisco Public Utilities Commission has increased by $1.03 million because of the state’s drought, Lee said. The city’s water and sewer funds are not generating adequate revenues to support ongoing operational and capital needs.
Similarly, the city’s storm drain, streets, parks, technology and other infrastructure needs are inadequately funded in future years as well. Revenue is expected to grow 1 percent. Expenditures are projected to grow by 3 percent over the next five years. There are ongoing infrastructure needs in the city to address as well. Fixing roads, street repairs, water delivery systems, sewers and conducting an Americans with Disabilities Act compliance analysis for $110,000 are needs the city has, according to a staff report.
Still, the transient occupancy tax, TOT, is expected to increase by 16 percent, with the largest increase attributed to the Aloft Hotel. Additionally, property taxes are expected to increase 2 percent over the next five years, according to the staff report. The city is working on getting high-speed internet for businesses, signs on freeways, Site One near BART developed and looking into investment from Vice Mayor Robert Gottschalk’s visit to China this month.
“The council is working hard in investing for our future, instead of waiting for things to happen,” Lee said.
Meanwhile, Councilman Reuben Holober is feeling positive about this year’s budget.
“I’d like to see a stronger revenue stream in Millbrae, but it is promising that revenues have been increasing with TOT and property tax,” he said. I’m glad to see revenues up quite a bit this year, so we can do substantial improvements to infrastructure this year.”
It’s going to be a good budget, said Vice Mayor Robert Gottschalk. Over the longer time, the city hired a consultant to help with economic development and is also putting up monument signs to direct people into Millbrae.
“We have some one-time additional funds and a bit of improvement in revenue in certain areas,” he said. “We want to be really cautious about committing to one-time expenditures. … The investment from China won’t happen quickly. … All things considered, we’re pleased we can do better than the last several years. We’re being cautious and not going to be spending money on things that have costs down the road.”
Additional costs listed on the proposed budget include a $30,016 increase in funding to Millbrae Community Television and $219,000 to support Millbrae Community Youth Center for the year. Additionally, an assistant city manager position has been added, while a finance director has been eliminated, according to the staff report.
The City Council meets 7 p.m. June 10 at Council Chambers, 621 Magnolia Ave. in Millbrae.
(650) 344-5200 ext. 105