South San Francisco is on track to have a balanced budget in the coming years after operating with a deficit amid the pandemic, according to a report released this week by the city.
The city, like many others in the region, has seen its revenues plummet as economic activity slowed during the pandemic. But while the city expects to end the current fiscal year ending next month with a general fund loss of $2.3 million, the coming year should produce a nearly balanced budget with a deficit reduced to $99,000.
“Barring any unforeseen events, South San Francisco’s books are balanced into the future without cutting services,” City Manager Mike Futrell said. “It took years through very wise financial decisions by City Council and staff…and this city is very well positioned today and into the future in the event of a recession or downturn.”
Total general fund revenue for the coming year is expected to be $122.1 million, nearly double what it was a decade ago, and an increase from the year ongoing is expected to close at $116.3 million. The previous year’s figure was $111.5 million, according to the report.
The city derives most of its revenue from property taxes, with $41 million expected this year and $43.8 million next year, representing 36% of the general fund contribution. Sales tax next year is expected to be $20.9 million, or 17.2%, licenses and permits $15.5 million, or 12.3%, and city hotel tax $11.2 million dollars, or 9.2%.
The hotel tax, the revenue stream hardest hit by the pandemic, was the hardest hit in fiscal 2020-21, dropping to $6.7 million from more than $17 million where it was. was before COVID-19.
To overcome the current year’s deficit, the city will dip into its reserves, which are expected to remain at a healthy level of $51.2 million. The city also received $12.2 million in federal pandemic relief funds, some of which went to city social programs like the Guaranteed Income Pilot Project.
The city’s largest expenditures from its general fund continue to be police and fire departments, which consume 52% of expenditures. Parks and recreation accounts for 16%, with the remainder split among various other city departments.
The projected budget also takes into account various new municipal staff positions, including the hiring of three new human resources staff at an additional annual cost of $500,000. It also explains the hiring of an equity and inclusion officer, something that has been a board priority but put on hold amid the pandemic.
Regarding new hires, council member Mark Addiego said the city is fortunate to be able to make these decisions, especially compared to some neighboring towns that have been hit harder by the tax loss. hotels.
“South San Francisco is in an enviable position, and we can commit to improving the HR experience for both the people employed there and those who depend on their services,” he said.
Vice Mayor Flor Nicolas adopted a more cautious tone, pointing to potential new variants of COVID-19.
“Hopefully knowing what we know now, we will be able to realize all of these assumptions that we have,” she said.
The board will meet on June 8 to further consider the proposed budget ahead of the June 22 adoption deadline.