City Council OKs Municipal Budget

First published in the June 4 print issue of the Burbank Leader.

The Burbank City Council approved the 2022-23 municipal budget last week, with highlights including a narrowly closed deficit, utility rate increases and funding for infrastructure projects.

The council unanimously passed the budget at its May 24 meeting, the last in a monthlong series of hearings held in preparation for the next fiscal year, which begins July 1. Burbank’s roughly $790 million budget has recovered from the economic impacts of the pandemic, city staff members said, though it is experiencing both benefits and challenges from inflation.

“Despite the lingering economic unknowns that exist around the globe,” Financial services Director Jennifer Becker said at the meeting, “the city of Burbank is very well positioned financially through the coming year and into the future.”

The Leader has reported extensively on the city’s budget hearings; below are a number of the most important highlights.

GENERAL FUND REVENUES IMPROVE

Financial officials projected that Burbank’s general fund — its main operating fund that includes most of the city’s departments — will avoid a deficit by about $300,000 next fiscal year, with similarly narrow balances anticipated until fiscal year 2025-26. Though the city will barely avoid being in the red, the estimates reflect a stark difference from projections given in previous fiscal years, which forecasted several years of major pandemic-related deficits.

Federal stimulus payments, hiring freezes, one-time budget savings and a faster-than-expected economic recovery contributed to the improved outlook, city financial officials said.

City staff members expect recurring general fund appropriations — or regular expenses such as payroll and department operations — to rise by about 4.5% next fiscal year, to roughly $202 million, compared to this year. They also projected recurring revenues, bolstered by the rising cost of goods and corresponding tax revenue increases, to grow by about 5.1%, to about $202 million, between the fiscal years.

However, the general fund balance is projected to drop from about $31.2 million at the end of this fiscal year to $12.2 million at the end of next fiscal year. Much of the decline is due to one-time expenses and payments toward city employees’ pension fund, but a significant portion of the money is moving to Burbank’s reserve funds. The City Council, led by Mayor Jess Talamantes, agreed last month to boost the reserves to guard against future economic turmoil.

UTILITY RATES SET TO RISE

The City Council also approved utility rate increases that will go into effect on July 1, saying Burbank Water and Power needs more funds to meet sustainability goals.

The increases included a 6% hike for electricity, a 9% jump for water, 2% for sewage and 4% for refuse. BWP officials indicated they will seek additional rate increases in future fiscal years, pointing out that the utility previously deferred such hikes on multiple occasions and had to pull from its financial reserves.

BWP representatives said they require a major increase in funds to pay for renewable energy initiatives, to pay for the rising costs of water and energy, and to repair or upgrade its aging infrastructure. But they added that they plan to propose a new financial assistance program to help mitigate the effects of the rate increases on some residential customers.

INFRASTRUCTURE PROJECTS PLANNED

The City Council passed roughly $22.5 million in new and ongoing infrastructure projects for the next fiscal year, including $8 million toward street and sidewalk repairs.

The figure was a noticeable increase from the $18 million allocated for capital improvement projects this fiscal year, and does not include BWP projects or the $5.4 million in infrastructure maintenance funds.

Projects include $1.3 million for the next phase of the civic center and new Central Library project, $3 million for a new City Yard Services Building and a $1.15 million in grant funding for the multi-year Glenoaks Boulevard traffic-calming initiative.