HomePublicationBurbankPandemic’s Effects Expected to Take Toll on General Fund

Pandemic’s Effects Expected to Take Toll on General Fund

Burbank’s budget is anticipating a dour economic outlook due to the effects of the COVID-19 pandemic that could force the city to continue its hiring freeze and cancel events.
Municipal staff members approached the City Council with an update during its Tuesday meeting, explaining that the city expects to operate at a General Fund recurring deficit of nearly $11 million this fiscal year, followed by additional millions of dollars in deficits annually through the 2024-25 fiscal year.
Without intervention, by the end of the 2021-22 fiscal year the General Fund balance will likely be in the negatives.
For the current fiscal year, city staff members project a decrease in “recurring revenue” of about $18 million from the original projection of $177 million, due to drops in sales, property, parking and hotel taxes.

However, Cindy Giraldo, Burbank’s financial services director, warned that many of the projections aren’t set in stone.
“How much of our revenue losses recurring under the traditional sense is yet to be determined because we’re clearly under extraordinary circumstances,” she told the council.
Proposed measures to help the budget include a continued citywide hiring freeze, closing park facilities and suspending the crossing guard program — rendered moot by the widespread closure of schools.
City staff members also proposed dipping into funds given to Burbank when California dissolved its redevelopment agencies. The savings from taking those steps would total about $14.2 million for this fiscal year.
Other funds will come from Burbank’s allocation from the Coronavirus Aid, Relief, and Economic Security Act. The city has received about $436,000, less than half of the $1.3 million total it is expected to have received by the end of this month.
But even with those measures, this fiscal year’s General Fund, from which the city will pay $8.8 million toward city worker pensions, is projected to end with a balance of roughly $5.5 million.
Additionally, a concern raised by Councilman Timothy Murphy was that if Measure RC is passed by voters in November, the estimated $1.8 million start-up costs and $3.9 million annual operating costs could wipe out much of the General Fund balance.
One report contained some good news: Last fiscal year, which ended in June, appeared to conclude better than expected. The projected General Fund ending balance for that year is $9.9 million, about $4.7 million higher than was anticipated.
Giraldo said her department would monitor Burbank’s finances and return with proposed cost-saving measures at a later date. A final audit of the previous fiscal year will be presented to the council in December.
Council members applauded the city on its financial policies, which they said prepared them well for the lack of revenue caused by the pandemic. Councilman Jess Talamantes added that the city had previously had to dig itself out of a revenue rut after the 2008 economic recession.
Those times “weren’t very pretty, but we managed to get out of them and be successful,” he said. “Now we’re back at it again.”


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