Burlingame’s proposed total budget of approximately $100 million for the 2014-15 fiscal year looks sound, city officials say.
Nearly four years after the official end of the recession, Burlingame finds itself in a relatively healthy fiscal position, with many of the city’s revenue meeting or exceeding levels experienced prior to the downturn. Because key tax revenue, including property, sales and hotel taxes, have risen over the last few fiscal years, the need for additional reductions in city services has been negated, according to City Manager Lisa Goldman.
“In the current fiscal year the city has made significant progress on the goals established by the City Council in April 2013 and revised and reconfirmed in January 2014,” City Manager Lisa Goldman said in a prepared statement. “Physical improvements in the city range from completion of a majority of the Burlingame Avenue Streetscape project to the opening of a community garden and a new pump station.”
The transient occupancy tax, or hotel tax, receipts in the current fiscal year are expected to exceed $20.1 million, up from $10.2 million just five years ago. For the new fiscal year, there should be strong growth in sales taxes between 8 percent and 9 percent. The $55.3 million in revenue will finance $54.9 million in general fund expenditures in the 2014-15 fiscal year.
There will be a leveling off of property tax growth, despite higher assessed values on the county’s property tax rolls. The appropriations include nearly $47.5 million in operating expenditures and capital outlay, $16.2 to capital projects, $14.1 million to the water enterprise and $10.5 million to the sewer enterprise. The budget includes an 8.8 percent increase in the cost of fire services provided by the Central County Fire Department, for an anticipated cost of $10.1 million.
“I am glad our budget is in such good shape, with healthy reserves and revenues continuing to climb,” said Vice Mayor Terry Nagel. “I think our whole council is committed to continuing to run a tight ship, a strategy that served us well during tough economic times.”
Nagel noted that what many people don’t realize is that the city is also upgrading water, sewer and storm drain systems.
“People don’t see these underground pipes, so many aren’t aware of these long-term projects,” she said. “These upgrades mean all of us will be paying for fewer repairs and can expect this infrastructure to serve us well for many decades to come.”
The city also has unfunded infrastructure projects to keep in mind. The list, approved in November 2013, includes an estimated $35 million to $40 million for the Burlingame Recreation Center, $25 million for the downtown streetscape, $10 million to $20 million for the downtown parking garage, $11.5 million for City Hall safety improvements, $5 million for downtown parking lots resurfacing, $4 million for the new Bayside Park on a state lands parcel, $3.5 million for main library upgrades, $3.4 million for a new parks yard, $2.4 million for fire station improvements, $2 million for a general plan update, $1.6 million for police station improvements, $250,000 for aquatics center improvements and $150,000 for carriage house improvements.
“The city is doing really well,” said Councilman Ricardo Ortiz. “We have to keep in mind we still have a lot of unfunded capital improvements. We need to be cognizant we do have bigger things to fund. Everybody tends to spend when the money is there, but TOT and sales taxes come and go.”
Additionally, unfunded liabilities accrued from prior years continue to prevent the city from attaining a truly sustainable budget, according to Goldman. Although retiree medical benefits earned by current and past employees are now being funded through annual contributions to an irrevocable trust fund, these added costs are significant, and represent payment of past commitments. These funds are not available to support current services. The cost of employee pension obligations provided by California Public Employee Retirement System also continues to increase at an alarming rate, according to Goldman. Though pension benefits have been reduced for future employees, and current employees are contributing the entire employee rate as well as a percentage of the employer rate to the pension system, it will take many years for these reforms to provide relief to the operating budget, she said.
“The city is doing well,” said Councilman Jerry Deal. “Everything that has been done has been so prudent. Unfunded liabilities are always a concern, but we’re doing a lot to get a handle on that.”
Other highlights of the budget include water revenue, projected to be $17.1 million in the new fiscal year, with expenditures of $12.1 million included in the operating budget. Parking fund revenue, which include meter and other parking fees as well as monthly parking permits, are projected to rise approximately 3 percent to $2.5 million.
The council votes on the budget 7 p.m. Monday in Council Chambers, 501 Primrose Road in Burlingame.
(650) 344-5200 ext. 105