Budget shortfalls projected for Burbank’s upcoming fiscal year and beyond
The Burbank City Council received sobering news Tuesday after city staff told them there were possible shortfalls in the annual budget over the next five years.
Cindy Giraldo, the city’s financial services director, went over the proposed 2016-17 budget and said that the city is expected to be short by about $1.2 million from balancing its finances.
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Giraldo projected the city’s revenue during the 2016-17 fiscal year to be about $164.2 million, while expenses were estimated to be roughly $165.4 million.
The city is expected to fill the gap with money from the General Fund. However, Giraldo said that her office projects budget shortfalls over the next five years, with the deficit estimated to be about $9.7 million during the 2020-21 fiscal year.
Interim City Manager Ron Davis warned council members that the city cannot keep pulling money from the General Fund to make up the difference and that there is “not a lot left to cut” from the budget.
“With a nearly $10-million projected deficit, we’re either cutting services or we’re going to operate differently,” he said. “That’s really our only two options.”
We’ve known it was coming up and not enough was done to avoid it.
— Burbank Vice Mayor Will Rogers
Aside from paying off the shortfall for the upcoming fiscal year, which starts July 1, city staff will work over the next two years to develop a fiscal plan “to systemically balance a systemically imbalanced forecast,” Davis said.
“Something’s got to go,” he said. “We either change models and get more efficient or find better ways to do things, or we’re going to be looking at service-delivery cuts.”
Mayor Jess Talamantes said after the meeting that he agreed that the city is spending more than it is taking in, and that city officials need to find a way to balance the budget.
Talamantes said the last thing he wants to do is lay off city employees or cut programs that benefit residents.
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“It’s really a struggle,” he said. “We depend on the city manager and department heads to come up with some ideas that we can entertain. That’s the bottom line.”
Vice Mayor Will Rogers said after the meeting that the way the city has been operating for the last four years, the news shouldn’t be a surprise.
“We’ve known it was coming up and not enough was done to avoid it,” he said “So we’re going to have to deal with it this year, and the next important step is to make sure that we don’t have to deal with it next year and don’t leave the same mess for others down the line.”
Rising pension costs are a main contributor to the increasing expenses Burbank and other cities are facing. Giraldo said that the city’s contribution rate is expected to increase in the future.
Contribution rates to police, fire and all other city personnel were 37.5%, 24.1% and 19.9%, respectively. However, rates for the 2016-17 fiscal year have bumped up by about 5 percentage points for police, roughly 3 percentage points for fire and about 2 percentage points for city workers, according to a city staff report.
“While these rates will continue to increase, it is still important to know that the city of Burbank has been very fortunate to have been able to curtail some of the impact to our General Fund through labor negotiations, where city groups have agreed to pay their full portion of the employee CalPERS contribution,” Giraldo said.
Though the City Council and city staff discussed the budget, council members still need to approve the financial plan for next fiscal year.
A public hearing will be held on June 7, when council members are expected to vote to adopt the budget.
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Anthony Clark Carpio, anthonyclark.carpio@latimes.com
Twitter: @acocarpio
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