Burlingame faces revenue loss, cuts (by Heather Murtagh, Daily Journal)
Burlingame faces a $1.79 million shortfall if it funds capital improvements this year as planned causing city officials to consider cuts, reorganizing services and new revenue sources.
If the city continues with the adopted budget for this year and next, it will face an estimated $5 million shortfall. A list totaling $200 million of unfunded capital improvements, rising employee benefits and decreasing revenue is causing the City Council to direct department heads to consider potential reductions.
A larger proposal included marketing and redoing the city's mission statement, for example. However, councilmembers found it a bit grand for the situation and scaled back the request.
Vice Mayor Ann Keighran suggested department heads work together to come up with a short-term list. Councilman Jerry Deal agreed, adding the long-term aspects are important and should not be negated either. City Manager Jim Nantell wants department heads to identify one or two major functions then determine how to lower costs whether it be through shared services, reductions or another method. Nantell requested using a department head to act as an assistant city manager to oversee this project. The idea was met with apprehension by the council, which worried it would lead to increased cost or an increased workload within the department from which the leader came. In particular, the council disagreed with the proposed title. Instead, the department heads will come up with 5 percent and 10 percent cut proposals to go before the council in January.
Revenue has been down for years. The dip began after the terrorist attacks of Sept. 11 to just over $31 million down from a pre-Sept. 11 high of $41 million. Currently, the city is looking at beginning the next fiscal year at a shortfall of $190,000 before funding capital needs.
Before the losses, the city invested $8 million to $10 million annually to capital improvements like facility repairs, which has decreased to below $2 million in recent years. The result is the investment of less than $15 million for capital improvements instead of $64 million to $80 million.
The Burlingame Avenue area accounts for 20 percent of the city's sales tax revenue about $2 million. Upgrading the streetscape in the area is estimated to cost $32 million. Since June, the city has seen about a 10 percent decline in sales tax revenue, which is estimated to result in a $700,000 loss if it continues at that level.
The area is not the only one in need. Projects like sidewalks, parking garages and the Broadway overpass will require the city to begin putting money away.
On the employee side, the city needs to begin putting money toward the $44 million unfunded retirement health liability a requirement it currently cannot afford, said Nantell.
To meet these increasing costs, city staff encouraged the council to take a multi-pronged plan of cuts, revamping the employee structure and raising funds.
The city unsuccessfully placed a $39 million storm drainage assessment before voters in 2007. Such a measure is slated to be before voters again in May.
Increasing hotel tax by 2 percent, for example, could mean an additional $2 million in city revenue for the city.
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Re our auto business (see full article in the Daily Journal)
San Mateo County, Redwood City and Burlingame are home to the majority of auto dealerships. Burlingame Finance Director Jesus Nava said there are no new changes to report since he last offered up grim numbers. In early November, Nava said car revenue represented about 35 percent of sales tax coming into the city which itself accounts for 25 percent of Burlingame's revenue. The city saw a 10 percent drop from the first quarter of 2007 to the first quarter of 2008.
– Written by Fiona
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