With the new fiscal year beginning in July, Burlingame city officials are homing in on a spending plan for coming years — which includes a continued deficit as the city dips into its savings to maintain operations.
Lisa Goldman
The city’s finances were rocked amid the pandemic by a massive hit to its transient occupancy tax, a fee collected from hoteliers and short-term rentals that was previously the city’s primary moneymaker. The revenue stream has been slowly recovering and the city expects its budget will be out the red by the 2026-27 year.
“We are in a little bit different position than we were last year, last year we were really in the thick of the pandemic and there were a whole lot of uncertainties,” said City Manager Lisa Goldman. “Things are a little bit brighter this year.”
A tentative budget proposal indicates the city will pull from its reserves by $4.6 million in the coming year and again by $3.3 million, $6.4 million and $1.2 million over the following three years. The current year is on track to close out with a $2.4 million loss.
As a result, the city’s general fund balance, $45.2 million in July 2021, could dwindle to $28.3 million by July 2025 before beginning a rebound.
“It is not against the rules to dip into reserves and so we are doing that,” said Goldman, who pointed out the council had built up a healthy savings to weather such a downturn. “We are still funding the things that we need to do, but times are a little bit tight.”
While the city has deferred certain infrastructure projects amid the pandemic, all full-time staff were retained, and the forecast for coming years allows for renewed infrastructure spending, including contributing toward large projects like the Broadway grade separation, completing the new recreation center and the San Mateo Union High School District’s pool renovation project.
It also accounts for a considerable pay increase for the city clerk and modest increases for the city librarian, Parks and Recreation director and Human Resources director. The council approved a revised pay structure which shows a $60,000 bump in the salary schedule for the city clerk, moving the pay range, previously $115,000 to $139,000, to $175,000 to $213,000. The other positions increased by a few thousand to top out at a similar figure.
The city clerk position was noted to have seen its responsibilities expanded in recent years and a city report stated the role, currently and traditionally held by a woman, was underpaid compared with those held by men and was not on par with surrounding markets.
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“This is not about this city clerk, as much as I admire how much she’s done,” said Vice Mayor Michael Brownrigg. “To me this is an investment, if you look around the country and you see the attack on the election process, we absolutely need to make sure we have the strongest possible election mechanism in place ... and we do that in part by investing in talent.”
Additionally slated to expand payroll, the city is looking to fill several vacancies for other roles.
The city’s general fund expenditures plus transfers out to various funds are projected to close out at $74.4 million this year and to grow to $89 million by 2026-27 — the same year a surplus of $3.4 million is expected to be reached. The biggest revenue increase in that time will be the hotel tax.
The city gathered more than $29 million from the tax in 2018-19, nearly 35% of the city’s revenue that year. It fell to $5.7 million last year and this year is expected to produce $10 million, jumping to $12.9 million in the coming year and $22 million by 2026-27.
“It’s still a little bit cloudy in terms of how the hotels are going to come back completely,” said Goldman. “They’re really relying on business to come back, so as more businesses start having more meetings, our hotels will do better.”
Other revenue will grow as well, most notably property tax, planned to grow by nearly $7 million over the next five years from the $26.8 million expected to be collected this year.
The council will reconvene again before adopting next year’s budget during a June 6 meeting.
As usual, it’s not an income problem it’s a recurring expense problem. Let’s not forget that for any salary increases or new government jobs, the pensions and benefits due to those increases will only increase – forever. Hold onto your wallets Burlingame residents. Many more tax and fee increases are in your future since Burlingame doesn’t decrease their head count – as can be read from the article.
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As usual, it’s not an income problem it’s a recurring expense problem. Let’s not forget that for any salary increases or new government jobs, the pensions and benefits due to those increases will only increase – forever. Hold onto your wallets Burlingame residents. Many more tax and fee increases are in your future since Burlingame doesn’t decrease their head count – as can be read from the article.
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PLEASE TURN OFF YOUR CAPS LOCK.
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