The city of Burbank will receive its first payment from the most recently passed federal stimulus bill this month, officials said, providing a much-needed influx for the municipality.
City staff told City Council members on Tuesday that Burbank is set to receive the first half of its $26 million portion from the American Rescue Plan Act, which was approved in March, by May 10. The payment, which will be followed by a second remittance within a year after it is disbursed, will mitigate much of the pandemic-related revenue losses reported to the city’s General Fund.
As a result, despite previous projections, the fund’s balance is expected to clear the red by the end of next fiscal year.
Longer term, however, officials said they expect that tax revenue will take time to recover, with financial services director Jennifer Becker projecting that the city will likely see a $6.8 million recurring General Fund deficit in fiscal year 2021-2022. The deficit, reflecting the gap between regular city revenues such as taxes and expenses such as department budgets, is then projected to remain at roughly $3.3 million annually for the four fiscal years thereafter.
But without the federal aid Burbank is expected to receive, Becker said, those gaps could be much worse.
“While we don’t like to see five years of recurring deficits in our forecast, we realize that given the extent of the pandemic, we are fortunate to be facing future deficits that are less than 1.5% of our recurring General Fund budget,” she told council members.
The General Fund, which represents about 29% of what the city spends annually, is allocated to the police, fire, parks and recreation, public works and other departments.
Tuesday’s meeting, the first of multiple on the 2021-2022 fiscal year budget, focused much on the fund. The City Council is scheduled to vote on whether to approve the budget at its May 25 meeting.
City staff members are also asking the City Council to approve a number of cost-cutting measures, such as slashing departments’ travel and training budgets. The cancellation of certain city events due to health orders will also aid Burbank’s budget.
The most impactful measure would be the continued use of funds the city received when California dissolved its redevelopment agencies, with municipal employees asking to use nearly $8.8 million from that reserve to help pay the pensions of city workers next fiscal year.
With those proposed measures and the second $13 million payment from the ARP Act, and despite the General Fund’s recurring deficit of about $6.8 million, the fund’s balance is expected to rise from $16.4 million at the end of this fiscal year — in June — to roughly $24.6 million at the end of fiscal year 2021-2022. But that balance could shrink in the following years due to the repeated deficits.
DEPARTMENTS PRESENT BUDGETS
As part of the financial discussion on Tuesday, over a dozen city departments presented their own proposed budgets to the City Council, with some requesting additional money for new projects.
The department with the longest wish list was the Community Development Department, which the City Council has frequently tasked with addressing homelessness, affordable housing, transportation and other topics.
Department officials, who have said their employees are struggling to tackle all the projects assigned to them, requested an additional $510,000 in the next fiscal year to hire four new employees. The department also asked for a recurring budget increase of $555,000 for consultants to assist with processing development applications, including for accessory dwelling units.
Those consultants could eventually reduce the timeline of single-family residence development reviews from nearly a year to about six months, the CDD said, and would be paid for by applicant fees.
The CDD also requested a recurring budget increase of $80,000 for another liaison from StreetPlus, an organization the city pays to connect people experiencing homelessness with the appropriate services.
Altogether, the department proposed an increase to its General Fund budget by about $2.6 million for the next fiscal year, roughly a 23.4% increase from its current budget.
POLICE TO LAUNCH NEW MENTAL HEALTH TEAM
The Police Department was the only agency to request a smaller budget from the General Fund, proposing a 0.12% cut, which Chief Scott LaChasse attributed to lower workers’ compensation costs. The department also indicated it is preparing to launch another Mental Health Evaluation Team, which responds to mental crisis situations with a plainclothes officer and a Los Angeles County clinician.
City officials have praised the MHET’s work, recently expressing interest in having another two-person group active.
LaChasse explained the Burbank Police Department is working with the county on the possibility of bringing in a mental health clinician free of charge; the county and the city split the costs of the clinician in the current MHET.
The BPD is asking the city for $83,300 to purchase a new customized vehicle for the MHET’s use.