The City Council unanimously approved the municipal budget for fiscal year 2021-22 on Tuesday, projecting optimism that Burbank’s finances are beginning to recover from the pandemic.
With businesses reopening and the number of total vaccinations increasing across the county, city officials said they expect tax revenue to recover next fiscal year, which begins in July. Despite that, General Fund recurring revenues are still projected to be nearly $9 million below pre-pandemic expectations.
The General Fund balance, expected to be at $24.6 million at the end of next fiscal year, would likely be in the red without the $26 million Burbank is anticipated to receive from the American Rescue Plan, a stimulus package President Joe Biden signed in March. The City Council has also approved several cost-cutting measures, such as shrinking departments’ travel and training budgets.
In approving the budget, the City Council greenlit a number of new positions, including several for the Community Development Department, which is heavily involved in homelessness initiatives and development projects.
The city attorney’s office will also receive funding for another employee to handle litigation and other issues, while the Parks and Recreation Department will get funding for two part-time workers who will patrol local parks.
In keeping with its financial policies, the city will continue to set aside money for its reserves and fund its portion of municipal employees’ pension costs.
“I think it’s a great budget,” Mayor Bob Frutos said at the meeting. “It’s not the best because of our financial [situation], but I think we still are following our conservative policies that the council has handed down.”
With resources of nearly $200 million, the General Fund is only about 30% of the overall city budget, but funds the police, fire, parks and recreation and public works departments, among others. It has faced nearly $30 million in revenue losses as a result of the COVID-19 pandemic, most of that lost this fiscal year.
Burbank is also projected to face repeated deficits between its recurring — or regular — revenues and costs in the next fiscal year and beyond. The gap is estimated at about $6.8 million in fiscal year 2021-22 and at more than $3 million for each of the next four years following.
There are some early signs of recovery, however. Sales tax revenue, which provides the second-largest cash source for the General Fund, is projected to increase from about $46.1 million this year to $49.8 million next fiscal year. The latter figure is just above Burbank’s sales tax revenue for fiscal year 2019-20, which included a few months of the pandemic.
Property tax revenue has remained relatively stable during the pandemic and is expected to increase next fiscal year, according to the city budget.
In total, recurring General Fund revenue is anticipated to rise from $172.6 million this fiscal year to $186.2 million next fiscal year.
On Tuesday, the City Council also approved a few last-minute budget items, including providing a $50,000 arts endowment through the Parks and Recreation Department, and setting aside $250,000 for a city sign near the Burbank Boulevard bridge.
