Funds generated by Measure P were forecast to help Burbank put its General Fund into the black — but only for a few years, city officials said last week.
Cindy Giraldo, Burbank’s financial services director, told council members during a budget study session on Thursday that although the three-quarter-cent sales tax along with cost-saving measures implemented last year are projected to put the city’s finances on the right path, rising pension costs continue to cause financial concerns.
While the last two city budgets projected deficits for the General Fund, the upcoming 2019-20 budget is estimating an $8.8-million surplus for the upcoming fiscal year.
However, Giraldo said the city’s pension costs will continue to grow over the next five years and cut the surplus to about $300,000 by fiscal year 2022-23.
“While we can be proud of the work that we’ve accomplished, we must continue to strategically invest the resources that we do have available to us to ensure that the forecast remains balanced and that our valued community services and infrastructure remain protected,” Giraldo said.
Burbank is expected to receive a significant financial boost from the sales tax approved by voters in November and will go into effect on April 1. The tax is estimated to generate about $20 million annually, and at least half of those funds will go toward infrastructure projects, while the remainder will address pension costs.
Revenue from Measure P alone can’t completely resolve the city’s rising-pension issue. Last year, the city of Burbank had its employees commit to paying half of their pension costs to lower the city’s financial burden.
While employees under the state’s Public Employees’ Pension Reform Act are currently paying for half of their pension costs, Giraldo said there are still many “classic” employees — those who were hired before the state law went into effect in 2013 — who pay less than half of their pension contributions.
To lower ongoing pension expenses, Burbank officials are proposing to pay down the account with one-time funds to save the city money in the long run.
Giraldo said the plan is to commit $53 million over the next four fiscal years to pay down pension costs, which it’s estimated would save the city about $63 million.