Millbrae budget in good standing with tax income

The report from the office of Finance Director DeAnna Hilbrants detailed increases from each of the city’s primary sources of income — sales, property and transit occupancy taxes.

Hilbrants lauded the city’s economic position in the report.

“Through a challenging recession and ongoing economic recovery, the city has continued to take a prudent and proactive approach to secure the city financially including taking drastic cost savings measures to streamline operations and maintain service levels in the community,” she said. “As a result, the city has maintained a strong financial position.”

Property taxes accounted for the largest source of income, according to the report which showed $13.4 million collected over the last fiscal year, a jump of about $900,000 from the year prior.

Property tax income met its highest point reached over the last decade, equaling the $13.4 million received in both the 2010 and 2011 fiscal years, according to the report. Property tax income dipped in 2012 to $10.9 million, then reached $9.2 million in 2013 — its lowest point of the past decade — and has ticked up each year since.

Transient occupancy tax, or income received when a traveler stays in a Millbrae hotel, generated the second most money for the city’s budget last year. In 2019, hotel taxes created $8.8 million for the city, about $300,000 more than the year prior.

Hotel tax income in Millbrae increased significantly over the past decade, generating only $2.9 million in 2010. The city’s proximity to San Francisco International Airport drove the tourism industry, which has grown as the local economy has improved since the Great Recession. Millbrae’s hotel industry is not as hearty as neighboring cities though, as Burlingame received $29 million last year from transit occupancy tax.

Meanwhile, sales tax income generated $3.3 million in the last fiscal year for Millbrae, an increase of about $200,000 from the year prior, and the most received in the last decade, said the report. The local economy generated $2 million in sales tax in 2010, and the revenue received has remained flat or incrementally increased each subsequent year.

Officials have discussed ways to further stimulate the local economy, and last year examined the feasibility of establishing a business improvement district as a vehicle for making downtown a more desirable shopping destination.

The planned development of new homes, offices and retail outlets around the Millbrae train station is also expected to eventually generate more income for the city, once construction of the Gateway at Millbrae Station and Serra Station projects are completed.

In all, Millbrae received $39.6 million in revenue last year from a variety of income streams, up $2 million from $37 million in the previous fiscal year, according to the report. The additional money received allowed officials to set aside more money for debt payments, and unfunded liabilities. The city’s general fund unrestricted balance showed $16.7 million, according to the report which also illustrated a $4.8 million emergency reserve fund.

Over the past decade, Millbrae’s population increased by 1,186 residents to 23,154 last year, according to the report. In that same time, per capita income jumped from $36,753 to $51,880 and unemployment shrunk from 4.6% in 2010 to 1.8% in 2019.

The largest employer in Millbrae last year was the San Francisco Public Utilities Commission with 237 employees, followed by the Millbrae Elementary School District with 215 jobs. The largest private employer was the Westin Hotel, also with 215 jobs.

Despite the city’s good fortune, Hilbrants called for further conservative budgeting over the coming years to maintain its relative economic health.

“While city is in a strong financial position, deferred maintenance and costs of post-employment benefits (pension and retiree medical insurance) require ongoing prudent management and planning to sustain Millbrae into the future,” she said.

austin@smdailyjournal.com

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