Depending on how Burbank residents vote in the upcoming June 5 election, the city's expected budget deficit will either be manageable or dire. To also help address the anticipated shortfall, the city is looking to possibly increase some fees.
The Burbank City Council began its review of the proposed 2018-19 fiscal year budget during a meeting on April 24, when financial services director Cindy Giraldo gave council members an overview of what the city's finances will look like during the next fiscal year, which will begin on July 1.
Giraldo told council members that the budget deficit is projected to be about $200,000 during the upcoming fiscal year, which is not that much of an improvement compared to the roughly $185,000 shortfall the city is facing during the current fiscal year.
The deficit is expected to reach about $9.5 million during the 2022-23 fiscal year, but Giraldo said the negative difference in the General Fund could be much worse should a proposed ballot measure fail at the polls.
In June, Burbank voters will make a decision on Measure T, which asks whether the city should be allowed to continue transferring up to 7% of Burbank Water and Power's gross annual sales of electricity to the city's General Fund each year.
The funds are used to maintain the city's lighting infrastructure.
Burbank officials have been making the transfers since 1958, but the practice recently came under fire when Burbank resident Christopher Spencer sued the city, alleging the movement of funds was in violation of Proposition 26, a state law approved by voters in 2010 designed to prevent hidden taxes.
A judge ruled in favor of Spencer in September, and she suggested the city amend its charter to address the issue, which is what Measure T could fix by reaffirming that Burbank has been allowed to make these transfers in the past.
Should the ballot measure fail, Giraldo said the budget deficit is expected to skyrocket to about $12.4 million for the 2018-19 fiscal year. If that remains the case, Giraldo projected the shortfall to be about $21.7 million during the 2022-23 fiscal year.
The financial services director said Burbank officials have worked to save as much money as possible for the coming years. The city has reported about $9 million in cost savings, mainly through prepaying the unfunded pension liability, having a reduced workers' compensation rate and enacting a new fee schedule throughout the city.
Aside from the budget deficit, city officials also discussed some possible rate hikes for residents.
George Somoano, general manager of Burbank Water and Power, told the City Council that the city-owned utility is proposing to raise water rates during the next fiscal year to help maintain Burbank's water infrastructure.
The proposed 4.9% rate increase is expected to cost about an additional $1.90 a month for a resident who uses about 6,000 gallons of water monthly, or an additional $3.01 for those who use about 12,000 gallons a month.
Additionally, the Public Works Department is proposing to hike the refuse and sewer rates in the city.
Marnell Gibson, public works director, said her department is proposing a 1% rate increase for refuse services, which would mean about a $0.33 hike per month for most residents.
She added that sewer rates are proposed to go up by 2%, which translates into a $0.48 increase per month.
Burbank officials are expected to continue their discussion about the city budget on Tuesday, when they are slated to talk about infrastructure funding.