Burbank anticipates surplus in city’s General Fund during 2019-20 fiscal year

Burbank’s financial forecast for the upcoming 2019-20 fiscal year and the next four years have been the best figures the city has seen in some time.

Although the General Fund is projected to have a surplus over the next five fiscal years, Cindy Giraldo, the city’s financial services director, told the council members during a study session last week that the city needs to remain proactive and pay down its rising pension costs before they get out of hand.

During the upcoming 2019-20 fiscal year, Giraldo said the General Fund is expected to have a roughly $5.5-million surplus, which is a significant improvement compared to a deficit of about $185,000 forecast for the 2018-19 fiscal year.

Should finances continue on a positive path for the city, the General Fund is expected to have a surplus of approximately $3.1 million during the 2023-24 fiscal year.

That’s due, in part, to several factors, with one being the approval of Measure T, which Burbank voters approved in June and allowed the city to continue transferring $12.5 million from Burbank Water and Power’s gross annual sales of electricity to the General Fund.

The city also adopted a variety of initiatives that are estimated to result in about $9 million in savings annually. Those changes include getting more employees to pay half of their pension costs, compensating employees at an average market rate, workers’ compensation savings, implementing a fee schedule for city services and using extra funds to pay down pension costs.

Arguably the most significant factor that has helped boost Burbank’s General Fund was the passage of Measure P in November, which is a three-quarter-cent sales tax that went into effect this month and is expected to generate about $20 million annually to help pay for overdue infrastructure maintenance projects and pension costs.

At least half of the funds generated by Measure P will go toward infrastructure projects.

While unfunded infrastructure needs will soon be addressed through the sales tax, Giraldo said the city needs to come up with additional initiatives to ensure that the General Fund stays in the black.

She suggested city officials look into a parking-management plan or consider paid parking to generate money to help with parking enforcement and pay for parking infrastructure.

Additionally, Giraldo said updating the city’s development-impact fees so they are competitive with other cities may generate revenue that could fund capital-improvement projects and mitigate negative impacts caused by new development.

Giraldo also suggested the city should consider regulating short-term rentals to collect possible business and transient-occupancy taxes from those that choose to rent their homes.

While finding new revenue streams is important, Giraldo said city officials need to continue focusing on ways to pay down pension costs.

Although there are some city employees who currently pay half of their pension costs, there are still a considerable number of employees who do not.

However, through ongoing labor negotiations, Giraldo said Burbank is getting closer to having most of its employees pitch in more toward their pensions.

For example, police and fire employees hired before 2013 are currently paying 27% and 34%, respectively, of their pension costs, which is up from the 9% they were previously paying. Labor negotiations are underway to increase those contributions closer to 50%.

anthonyclark.carpio@latimes.com

Twitter: @acocarpio