San Bruno eyes growing budget deficit

While officials are planning to offset the deficit by cutting spending and drawing from reserves, some offered a bleak assessment of the financial forecast projected into the coming year.

“This is scary,” Councilwoman Laura Davis said during the budget study session discussion.

City Manager Jovan Grogan said the financial problems are a combination of a limited budget which was pushed further by the economic devastation brought by the global pandemic. To that end, he suggested about $4 million of the deficit was inherited and the rest was due to losses suffered by the local economy.

He noted the city’s financial footing is bolstered by payments from Pacific Gas and Electric in the aftermath of the Crestmoor neighborhood explosion, which helped San Bruno build up emergency reserves.

In all, the city will need to pay about $1.2 million from reserves which will keep about $19.9 million in various funds to address a variety of emergencies.

For her part, Davis suggested the city should seek to pursue further economic development in hopes of building a better base of income and positioning the city to fend off future deficits.

Noting neighboring cities do not struggle with finances as frequently, Davis said she would like to see more work done in San Bruno to fend of the looming budget threats.

“I think the sad thing about this is that the city of San Bruno has been limping along for many, many years,” she said.

As part of the effort to improve the city’s income, officials will consider Tuesday, June 2, floating a tax on commercial cannabis companies. While the nature of the tax is yet to be determined, officials suggest that some revenue could be generated by allowing marijuana shops to set up in San Bruno.

That income must be weighed against the cost of potentially calling an election though, noted officials in a staff report. Ultimately, a decision must be made by August if officials intend to get the tax on the fall ballot.

Acknowledging commercial cannabis has generated limited revenue for other cities in San Mateo County, San Bruno officials questioned how significant the tax could be in fixing the city’s financial constraints.

“It is difficult to estimate the revenue and cost impacts of implementing the ordinance if adopted by the voters, especially given the experiences of other cities in San Mateo County and the current economic environment,” said the report.

austin@smdailyjournal.com

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