Millbrae passes balanced budget, but with caveats

Ballots for a fire assessment redo vote were mailed to property owners April 30 and will be counted June 12 after a first assessment vote failed in February. 

With passage of the fee — set to charge $199 a year for single-family homes and $142 for multifamily homes — the city will have $1.8 million for fire and emergency services. Without the assessment, city revenue will come in at $39.3 million, putting Millbrae in a financial deficit with current spending costs. 

The 2024-25 budget also assumes Millbrae will receive hotel tax from the La Quinta Inn, which city staff previously said could bring in around $750,000 a year in hotel, business and sales tax and impact fees.  

The hotel’s longevity remains a question for the city — the San Mateo County Board of Supervisors passed a resolution announcing its intent to purchase the La Quinta Inn for homeless families and senior housing in September 2023, although Project Homekey funding for the project is still in flux. 

Millbrae also filed a lawsuit against the purchase, asserting it violated residents’ state constitutional rights to vote on low-income housing, and resolution on whether the hotel will remain a long-term Millbrae revenue source or become housing for those who are homelessness has not been reached. 

The city is not, however, relying on $2.5 million in vehicle license fee revenue designated from the state, City Manager Tom Williams said. 

Cities across the county have been struggling with the state’s decision to withhold VLF reimbursements to manage its own deficit — by the end of next year, it’s predicted the state will owe San Mateo County around $114 million, although the state maintains it is not obliged to pay cities back. 

“Without expectation that VLF will immediately come in, we have a balanced budget, and that does not come without hard work,” Mayor Anders Fung said. 

Councilmember Ann Schneider brought up alternative revenue sources during the meeting, maintaining Millbrae should receive a portion of funds coming from nearby San Francisco International Airport’s hotel tax, gas tax, sales tax and licensing fees — a portion of which currently goes to the county. 

“The trucks drive on our roads … the entire city of Millbrae is now at 9.3% of particulate matter pollution, which can impact asthma and [have] other health impacts. The airport should be held accountable for that,” she said. “We should be looking at those funds to help serve the city of Millbrae.” 

The airport made around $50 million in use fees from Uber and Lyft last year, Schneider said, which Councilmember Gina Papan suggested should be leveraged to help Millbrae maintain its roads. 

“If we can tap into the number of cars that get in there via our roads, maybe with San Bruno or Burlingame, it might help because, just the wear and tear,” she said. 

The city has a capital budget of $30.3 million and will be pursuing key infrastructure projects like sewer and water main replacements and pavement rehabilitation during the upcoming year, Sung said.