After 10 years of financial volatility, Burlingame city officials are moving forward with new policies of conservative projections and saving — rather than spending — any additional funds to boost depleted reserves.
The city has an estimated $41.5 million budget for next year, but a special City Council budget study session last night focused also on the years to come. The council opted for conservative estimates of 2 percent growth, not because it expects that to be true but as the benchmark for projected spending. Any revenue growth over that mark will most likely go to rebuilding the reserves. However, the biggest challenge will be keeping employee costs within that 2 percent growth. Employee costs represent 76 percent of next year’s budget, city staff said.
“We’ve got to show employees we just don’t have the money. The point isn’t that we don’t want to do this. We can’t keep doing this,” said Vice Mayor Jerry Deal.
In previous years, the city had assumed it would start to bounce back. This year it was conservative and began to see growth. City Manager Jim Nantell said next year could be the first year in which an aggressive assumption could be made, but that doesn’t answer projections for the next five years.
Deal was first to suggest a conservative 2 percent projection in the years ahead, adding that while the city saw some growth this year, the last 10 years have been volatile.
Councilman Michael Brownrigg agreed and said just because the city is expecting more revenue, doesn’t mean it needs to spend it.
Department heads requested a phased-in approach to the new policy.
The discussion about capital projects was more to the point. Public Works Director Syed Murtuza put forward $2.77 million in projects but only has $2 million to spend.
Setting aside money to later fund the Broadway overpass reconstruction wasn’t popular with the council. Burlingame’s share is estimated to be $8 million in the fiscal year 2014-15, which should come from setting aside $1 million or more annually. Murtuza suggested $600,000 to $800,000.
Councilwoman Cathy Baylock preferred putting the smallest amount possible.
Brownrigg argued against having money sit in a bank account when it could be used for good now. In addition, he said the city could use a bond measure. Mayor Terry Nagel believed federal funding options were still available which could reduce the city’s possible payment.
The city expects $1.7 million from various federal and state sources to fund street resurfacing on a number of streets including: Arc Way, Balboa Avenue, Bernal Avenue, Bloomfield Road, Broadway, Clarice Lane, Cortez Avenue, Forest View Avenue, Frontera Way, Laguna Avenue, Lincoln Avenue, Martsen Road, Paloma Avenue, Rosedale Avenue, Sherman Avenue and Willow Avenue. This only takes a chunk out of the $13 million in projects backlogged for the 84 miles of streets maintained by the city.
Sidewalks were another issue. Burlingame has often fought over who should foot the bill for sidewalk improvements. The shared-cost method was imposed. Next year, the area west of El Camino Real, between Easton Drive, Vancouver Avenue and Davis Drive, extending west to the border of unincorporated San Mateo County will be the program’s focus, said Murtuza.
As proposed, the capital improvement budget will result in 15 to 20 new handicap ramps, a new coat of paint for the main library and a number of traffic signals and signs.
Murtuza also suggested a city-wide study of mechanical systems, a $75,000 cost. Heaters, air conditioners and all other machines are about 20 to 30 years old, he said. However, it will most likely not be funded. Another unfunded idea is a new $250,000 play structure at Ray Park for liability reasons.
Cities must approve the budget by June 30. Last night’s discussion was just the first conversation by city officials.
Heather Murtagh can be reached by e-mail: email@example.com or by phone: (650) 344-5200 ext. 105.