Burbank’s projected budget deficit shrinks but remains an issue

Burbank’s projected budget deficit shrinks but remains an issue
The Burbank City Council approved a midyear budget adjustment, which estimates that the city should end the 2017-18 fiscal year with a roughly $200,000 deficit. (File Photo)

Burbank is expected to end the fiscal year with a smaller budget deficit than initially expected, but city officials are still working on how to address an increasing shortfall over the next five years.

The Burbank City Council voted unanimously on Tuesday to approve midyear budget adjustments to its 2017-18 fiscal year budget, in which the recurring deficit is projected to be about $185,000, a significant improvement over the estimated $9.4-million shortfall announced in November, according to city staff.


Cindy Giraldo, Burbank's financial services director, told council members that revenue generated from sales and property taxes have improved since the budget was adopted last year.

However, the main contributing factor to the deficit decrease is the anticipated passage of a ballot measure in June.

Burbank will hold a special election on June 5, in which residents will vote on three ballot measures. The measure that would affect the budget asks voters if the city should continue its past practice of transferring up to 7% of Burbank Water and Power's gross annual sales of electricity to the city's General Fund each year.

This measure would address a court ruling against the city, in which a judge decided in September that the practice of transferring electric funds to the General Fund, which was approved by voters in 1958, was in violation of Proposition 26, a state law passed by voters in 2010 aimed at preventing hidden taxes.

Should voters in June support the ballot measure, it would amend the city charter to state that the practice has been in effect since 1958, and the funds are used to maintain Burbank's lighting infrastructure.

Additionally, the city would be able to retroactively transfer millions of dollars it would have made from the electric sales at the beginning of this fiscal year into the General Fund.

Because of the court ruling, Burbank had to stop the transfer for the 2017-18 fiscal year, which resulted in about a $12-million loss for the General Fund.

Giraldo said the 2017-18 budget deficit is expected to shrink to about $185,000 if the ballot measure passes. However, if voters do not support the measure, the budget deficit for the current fiscal year is projected to be about $8.6 million.

Assuming that the ballot measure is approved, Giraldo said the 2018-19 budget shortfall is expected to be about $1.7 million.

She added that the deficit for the 2022-23 fiscal year is now forecast to be about $14.2 million, which is better than the estimated $27.4-million shortfall discussed in November when the electric-fund revenue transfers had to be discontinued.

Twitter: @acocarpio