San Bruno's budget hangs in the balance

San Bruno is looking at a $500,000 deficit for the upcoming year, but cuts aren't looming since the city should have some leftover funds from the current budget.

The City Council got a quick rundown of what to expect in the upcoming year at a special study session Tuesday evening. A deficit is anticipated, however it should be covered by shifting around available funds that went unused during this fiscal year. Although the plan means little to no cuts, the city needs to find new revenue sources in the near future.

"It's not good news. But, it's not horrible news. We're going to be here another year," said Mayor Larry Franzella.

Every year the expenses are $400,000 to $500,000 more than revenue, said Finance Director Jim O'Leary. Last year, the council approved the use of about $400,000 in savings to cover this year's shortcoming. It has yet to be touched and O'Leary anticipated it to stay that way. The use of this money in the upcoming year will create a balanced budget situation for the 2007-2008 fiscal year.

Soon the city will need to come up with a long-term plan to raise additional revenues since the $400,000 difference won't be disappearing in the upcoming years, said O'Leary.

Brainstorming hasn't taken place, but O'Leary said it might be time to talk about another tax. It's been about seven years since taxes were raised.

On a good note, sales tax revenue continues to rise with an 8 percent increase estimated in the next year partly due to the success of The Shops at Tanforan. The shopping center reopening was a great revenue boost for the city. Unfortunately, its opening coincided with the closure of San Bruno Ford - the number six highest sales tax producer for the city.

Budget reviews will continue in June.