An audit of Burbank’s 2017-18 budget found the city is in stable condition should it continue its cost-saving measures.
Cindy Giraldo, the city’s financial services director, gave a financial report to City Council members on Tuesday, detailing Burbank’s financial health during that fiscal year, which resulted in the city having a year-end spendable balance of $19,315.
She said General Fund revenue came in at roughly $170 million, about $4.5 million more than projected. The brighter financial picture was due primarily to the city generating more money through state and county sales taxes, service charges, building permits and a transient parking tax.
Giraldo added that the passage of Measure T in June, which allowed the city to continue transferring up to 7% of Burbank Water and Power’s electric sales to the General Fund, helped boost the city’s finances.
Meanwhile, General Fund expenditures were reported to be about $178.8 million, or approximately $5 million less than what was appropriated for the fiscal year.
However, Giraldo said rising pension costs continue to be a concern for the city. For the 2017-18 fiscal year, Burbank’s pension liability was about $376 million, a jump of about $38 million compared with the previous fiscal year.
To try and address increasing pension costs, Burbank officials implemented a cost-saving policy that includes having all employees pay half of their pension costs and adjusting employee compensation, which officials estimate will save the city about $9 million a year.
In addition, Burbank voters approved Measure P, a three-quarter-cent sales tax that goes into effect April 1 that officials estimate will generate about $20 million annually. Those funds will help pay for infrastructure and pension costs.
Taking all the cost-saving measures and the approval of two ballot initiatives, Giraldo said Burbank is projected to have a $2.7-million General Fund surplus for the 2018-19 fiscal year.
However, with pension costs rising, she said the city expects to have a roughly $300,000 surplus during the 2022-23 fiscal year.
“By remaining focused on our long-term fiscal health and not just on our annual budget, the [City] Council was able to achieve success and balance in all five years of our forecast,” Giraldo said. “While we can be proud of what we have accomplished today, there’s more work to be done, and we must continue to strategically invest our resources to ensure long-term financial stability for the city.”