San Bruno expects budget shortfall

Loss of sales tax, business and vehicle license fees and building permit revenue are among the issues addressed in the report, which also lays out a plan for balancing the city’s general fund.

The largest budgetary hit for the city is the loss of expected building permit fees due to delays in development projects, according to the report.

“Most of the larger development projects have experienced delays with their projects progressing, for various reasons, which has resulted in delaying the permit fees projected at approximately $1.9 million to the city,” said the city report.

Officials last year notably rejected a redevelopment proposal at the corner of San Bruno Avenue and El Camino Real, which was expected to cost the city an estimated $13 million in community benefit payments.

The loss of vehicle license fees, which are split at the county level through the Educational Revenue Augmentation Fund between cities and school districts, was also a blow for the San Bruno budget.

Recently, more local school districts have flipped from being funded primarily through state allocations to relying on local tax revenue, which the county finances with car fees. With more agencies vying for a limited amount of income, enhanced school payments cost San Bruno City Hall an estimated roughly $1 million, according to the report.

Changes in the San Bruno economy cost the city more than $945,000, according to the report, which cited reduced contributions from The Shops at Tanforan and the closure of an airport parking business as a source of the fiscal issues too.

At the shopping center, officials pointed to the closure of Sears and expected vacancy at the site for the extended term as a likely hit to the city’s budget, costing an anticipated $250,000. And the shuttering of SkyPark last month, as well as difficulties associated with collecting other business taxes, should cost the city an estimated $692,000, said the report.

It’s not all doom and gloom for the city’s finances though, as officials showed other revenue sources such as hotel and property taxes are within the expected ranges and the city’s spending is on track with initial projections.

Relief was provided through voters approving a recent sales tax hike as well, which officials suggested could be a source of offsetting the projected fiscal shortfall.

Furthermore, delaying $2.7 million worth of capital improvement projects, postponing hiring new positions and moving unused money from other sources to the general fund is the recommended path for combating the deficit, according to the report.

Holding off on planned improvements to the city’s police and fire stations, as well as reducing the scope of a project planning to install security cameras and other technology at city facilities are among the capital project savings proposed. Also, moving approximately $340,000 from the capital project reserve fund could help fight the deficit too, said the report.

Noting the budget improvement plan is free of any proposed layoffs or service reductions and officials can address the shortfall without overdrawing reserves, the report said more diligence is required over the coming weeks to assure financial security.

“Staff will continue to closely monitor all revenue sources and department expenditures in the general fund to ensure the budget is balanced by the end of the fiscal year,” said the report.

austin@smdailyjournal.com

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