San Bruno officials are making plans to address a potential $18 million budget deficit by 2034 by moving toward placing a bond measure on the November ballot.
Budget projections include a worst-case potential deficit of up to $60 million but also a best-case potential surplus of $40 million if development of the YouTube campus positively affects property taxes or the redesigned Tanforan comes online sooner than expected.
Midpoint estimates show a slowly increasing deficit over time with a $9.2 million deficit by 2029 and nearly double that — to $18 million — by 2034.
“As we head into the budget, we’re going to have to make some rough choices,” Councilmember Tom Hamilton said. “We definitely have to take action on finding new revenue sources to help our general fund, and we have to take action on our expenses.”
The city has some revenue at “considerable risk,” Chief Financial Officer Nick Pegueros said. That includes a pending lawsuit against the state around the city’s deal with Walmart.com, which currently designates sales tax from the online site headquartered in San Bruno to be shared only with the city.
“We have begun to take measures to protect us in the future in the event that the lawsuit does not go in our favor,” Pegueros said.
San Bruno is also losing out on state-promised money to backfill vehicle license fee revenue, which went away in 2003. Complicated formulas developed by the state to backfill the revenue source work against three counties in California, including San Mateo, Pegueros said.
“I didn’t get the sense that there was strong optimism,” Pegueros said of receiving the money. “Not only have we not received backfill for this current year but the shortfall grows next year — it doubles — and it’s anticipated and it’s recommended we plan for that revenue to entirely disappear under the 10-year forecast.”
Additionally, American Rescue Plan Act funding will be winding down in the next 10 years, creating another dent in the city’s budget, he said.
“I don’t know if quiet sobbing counts as a question,” Hamilton said after the City Council was asked for questions on the budget forecast presentation. “Obviously this is not good news.”
One San Bruno resident, Eleni Katout, asked the City Council to be mindful of continually placing challenging revenue issues on residents, pointing to one instance when the City Council voted against a 1% transfer tax that would have placed more financial responsibility on big businesses.
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“I want you guys to keep in mind how quick you are to be willing to place that burden on San Bruno residents, but you delay things and ask lots of questions when it pertains to bigger businesses,” she said.
Councilmembers did move forward on potentially creating another revenue source in the form of a general obligation bond measure that could cost $30 for every $100,000 of assessed property value and raise about $3.1 million a year — if it’s placed on the November ballot and residents pass it.
Funding from a potential bond measure would go toward San Bruno’s unfunded capital needs, which is roughly estimated at $581 million.
Bond measure money could only be used for infrastructure projects, including stormwater infrastructure, valued at approximately $350 million, and the reconstruction of two fire stations, No. 51 and 52, which are over 70 years old and would cost roughly $116 million to redo.
“None of these items are wishlist items, [they’re] all absolutely necessary items to keep San Bruno moving ahead,” Hamilton said. “The list of items to include are all based on absolute need and on what we felt voters could get behind.”
The City Council directed staff to conduct outreach and assessment on a potential bond. Polling and public communications would be completed in May and June and the City Council would take official action on whether or not to put a measure on the ballot in July.
Other unfunded improvement items include street light replacement at $7 million and Senior Center renovation at $28 million.
“I’m a fan of a general obligation bond because I know how badly the city needs to update its infrastructure but that also limits it only to being spent on infrastructure,” resident Matt Jones said. “I’m wondering if there’s additional revenue the city could pursue … looking at the tech industry, looking at the casinos, the folks who are creating the most money, instead of putting the burden on the city, the working class.”
The City Council briefly discussed the possibility of bringing a business licensing tax to the city, which has been implemented by other cities within the Peninsula like Burlingame, Menlo Park, Redwood City and Foster City, Councilmember Marty Medina said.
“Our needs are so large, we have to look under every rock, every possibility and do whatever we can to minimize the direct burden on the majority of our residents,” he said. “The most difficult thing about serving on the council is knowing that our needs are so great but our revenue doesn’t match up.”
(3) comments
I suspect we will be seeing more of this problem in other cities
which have been profligate in their spending in recent years. Staff should be directed at finding belt tightening opportunities before bond advancement. just my opinion
This is a microcosm of government at ANY level. Taxation is fine when the collected taxes are used wisely for their intended purpose. But government always overspends, they are overly generous in the salaries, pensions, bonuses and benefits they agree to give to themselves. No one holds government accountable, yet the government holds "the people" accountable for their own personal finances. But I doubt there is anything that can be done.
Hold onto your wallets, San Bruno taxpayers, and vote no on any tax measures or bonds. Most, if not all of the bond money will go to paying salaries, increased pensions and benefits. Remember, this $18 million bond may cost up to $50 million or more (depending upon the bond rate) and also because I’ve no doubt that future bonds will be floated to pay off these bonds, should this bond measure pass. Are you willing to give San Bruno more money to waste? Now and in the future, forever?
Remember, and this is off the top of my head, the money wasted by San Bruno on inconsequential cease-fire resolution discussions. Cease-fire resolution discussions which resulted in harassment of a city employee which now requires money wasted on a San Bruno PD investigation. Paying for a parcel tax study with taxpayer money to, of all things, increase taxes on residents. Raising water service rates unilaterally. Spending over $4 million into a downtown parking meter program to charge folks for what was previously free. I’m sure others can look at the budget and easily come up with $18 million (and likely much, much more). Seems to me that if San Bruno listened to brewster1 and Not So Common, they wouldn’t need the bond. San Bruno gets the government they vote for, so vote wisely.
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