City Budget Bolstered by Federal Stimulus

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.
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City Revenue Likely Lower Than Expected, Officials Say

Revenue for Burbank’s municipal government is projected at lower levels than previously anticipated, city staff members said this week, due mostly to underwhelming tax receipts during the pandemic.
In a report to the City Council on Tuesday, interim financial services director Jennifer Becker said projections for this fiscal year’s sales tax revenue dropped nearly $2.45 million compared to the estimate given during the first-quarter update in October. Projections for revenue from the transient occupancy tax, also called a “hotel bed tax,” decreased by $2 million.

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Council Projects Optimism Despite Gloomy Budget Outlook

Photo by Christian Leonard / Burbank Leader
A woman enters municipal headquarters, where the Burbank City Council was reminded this week that the General Fund will be in the red by the end of the 2021-22 fiscal year unless measures are taken.

The Burbank City Council appeared confident this week that the municipality would find ways to address a projected General Fund deficit caused by the pandemic, though it is not yet clear what a budgetary response would look like.
The city does have some time to figure out its next steps; as staff members reminded the council on Tuesday, the recurring General Fund balance is not expected to be in the red until about June 2022, that fiscal year’s end. At that point, recurring expenses are projected to surpass revenues by $4.1 million.
The annual deficit, according to city projections, will then shrink to $1.9 million in fiscal year 2022-23 and $2.8 in 2023-24, before widening again to $4.3 million in 2024-2025.
“Even though the five-year projections show recurring deficits,” Councilman Jess Talamantes said during this week’s meeting, “it’s not 10s and 15s and 20s [of millions].” He added that it was up to city staff members to determine a budgetary course of action.
Councilman Tim Murphy also pointed out that other cities have announced layoffs due to the economic impacts of the coronavirus.

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