Budget for South City looks solid

During the subcommittee meeting last week, Salisbury said revenue and spending projections are largely on track with the allotments approved by officials who at the start of the fiscal year adopted a budget expected to be limited by the pandemic.

Property tax is anticipated to generate about $42.8 million in the existing fiscal year, about $1.5 million than was budgeted, and a healthy retail sector anchored by two Costco outlets could generate about $18.9 million, which would be $1.6 more than anticipated.

Not all the income streams are as healthy though, according to Salisbury who said the stunted travel industry has not recovered to the degree officials had hoped. As a result, she anticipated South San Francisco would receive about $5.9 million in hotel tax, which would be $2 million less than budgeted.

Additionally, service fee income is down about $700,000 because city facilities cannot host gatherings during the pandemic so many of the events that would have generated revenue needed to be canceled and the down payments refunded, said Salisbury.

Meanwhile, Salisbury said about $60 million of the $122 million allocated over the year has been spent through December, meaning expenditures are occurring as planned.

Looking ahead, Salisbury said about $500,000 has been requested in additional spending to address various staffing deficiencies. Among those positions identified are cultural ambassadors which officials have discussed hiring to address social inequity concerns.

The ambassadors would work through the library system to connect with disenfranchised communities throughout South San Francisco, and help connect them to their local government as well as available social service programs.

Officials had proposed hiring those who worked on the city’s census outreach team in the program, because they had already built some connections with the identified populations. But Mayor Mark Addiego suggested investing more substantially in professionals with expertise in the field.

“We need to hire professionals that really understand what they are going to accomplish and will stay with us,” said Addiego.

Departmental budgets have largely been frozen over the last year, while officials examine the damage brought by the pandemic to the local economy.

Officials are comfortable discussing hiring while income is limited due to the pandemic because of a hearty reserve fund worth $58 million. Of that sum, $6.4 million is held over as a surplus from last year, $5 million is set aside to address pension debt, $22 million is for infrastructure needs and $24.1 million is kept in a general reserve fund.

With a full rainy day fund, officials also discussed a variety of potential capital projects that could be addressed in coming years. Among those investments include as much as $25 million for sea level rise protections along Oyster Point, $20 million for a couple of fire stations, $14 million for new ball fields at Orange Park, $25 million to replace the city pool and $7.5 million to purchase parks or more open space.

City Manager Mike Futrell noted the list of capital projects is still being developed and said the potential budgets are inexact at this early stage.

Regarding capital projects, an opportunity to bond against revenue generated by the city’s sales tax to finance an accelerated street improvement plan intrigued officials. Rather than maintain the existing program paying a total of $67.5 million annually over the next 15 years, the city could take advantage of favorable loan environment and take out a bond that would cost about $54 million over the same period of time.

Though no decision was made at the meeting, Addiego admired Salisbury’s proposal.

“I think this is very exciting,” he said.

austin@smdailyjournal.com