Millbrae’s financial outlook depends on the fire assessment tax currently before property owners through an all-mail ballot, Mayor Robert Gottschalk said yesterday during the annual State of the City address.

"The state of the city is good, but it needs to be stronger financially,” he said.

Facing a minimum of $1.7 million less in its annual budget, Millbrae is turning to voters with two measures for raising revenue. Ballots for the first, a continuation of a $144 annual fire assessment tax over five years to generate $1.2 million a year, are due July 14. In November, the city will be seeking a 2 percent increase to hotel tax which could generate up to $400,000. These efforts may not be enough, however, since the state threatens to take $550,000 in property taxes.

Councilman Dan Quigg agreed the uncertainty of the state adds difficulty to the situation.

"It’s as if you make a personal budget and someone comes by and takes a part away. It’s really unfair,” he said.

Efforts are currently focused on the weighted fire assessment vote. Millbrae voters passed the $144 yearly fee for fire services on single-family homes in 2004 as one solution to address the city’s budget crisis, which began in 2001. The proposal maintains the current $144.26 rate but generates slightly more than currently collected, $1.19 million.

Firefighters are staying positive while results are unknown, said Fire Chief Dennis Haag, who added many cuts would be needed to the city at large if the measure fails.

Gottschalk was confident the residents would support the continuation.

"Time and again, citizens of Millbrae have risen to the occasion to help maintain the quality of life we all cherish,” he said.

Despite financial unknowns, the city is moving forward with the $39 million in needed, but unfunded capital improvements, when opportunities arise. Federal stimulus funds and some money from the city’s transportation fund, for example, will be used to improve a few streets. A solar-powered crosswalk will be put in on Richmond Drive near Geraldine Drive thanks to federal grant money. Grants will also be utilized to put a stoplight at El Camino Real and Victoria Avenue to increase pedestrian safety. The city is also working to get Caltrans approval to add red-light cameras to the Highway 101 southbound off-ramp at Millbrae Avenue, Gottschalk said.

Storm water infrastructure will be a large issue as the city has $5 million in needed updates but is limited by law in its ability to raise rates. City facilities also have $4 million in repairs, without the money to make them.

Millbrae’s over 50-year-old wastewater treatment plant will get a much-needed makeover after the city recently inked a $34 million contract with the California Water Resources Control Board. The 1 percent loan will save the city money over time, Gottschalk said.

The project will go out for bid in August 2009 and should be finished by mid-2012.

On the economic development side, the city is looking forward to the opening of Kohl’s department store Sept. 30. Kohl’s will open in the former Mervyns site on Broadway. Mervyns filed Chapter 11 in July and has since closed.

The city is also looking for a developer for Site One, the area around the Millbrae Bay Area Rapid Transit Station. Last year, the city purchased the land upon which Zack’s Bar and Grill sits using funds from the Redevelopment Agency.

The council previously extended exclusive negotiating rights to Irvine-based Fancher Partners a few times, but it was unsuccessful in securing the property. The effort to develop the land in Site One near the Millbrae BART Station began in 1996. The Site One area ends at El Camino Real on the west, by the yet-to-be-built Victoria Avenue on the north, by the extension of California Drive to the east and by Millbrae Avenue to the south.

The proposed vision — which was last visited in early 2006 — is dubbed the Millbrae Station Pavilion, a six-story, mixed-use development covering about eight acres of land.

Play space in Millbrae should increase in the years to come as the city partnered with the school district to refurbish the fields. The city is also looking for a permanent location for the teen center. Millbrae’s Scout House could be the answer, but will require the community to raise $250,000 over the next three years, Gottschalk said.

Heather Murtagh can be reached by e-mail: heather@smdailyjournal.com or by phone: (650) 344-5200 ext. 105.

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