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San Bruno posts $5.2M surplus; $9.2M from Walmart tax-sharing fuels results amid state dispute
Summary
City officials presented the annual comprehensive financial report showing an unmodified auditor opinion and a $5.2 million net revenue for FY 2024-25, a surplus the chief financial officer said was driven largely by a 2020 tax-sharing agreement with Walmart that is now the subject of litigation with the state tax agency.
The San Bruno City Council received the fiscal year 2024-25 annual comprehensive financial report (ACFR) on Jan. 13, where Administrative Services Director and CFO Nick Paggeros said independent auditors issued an unmodified opinion and that the city finished the year with $5.2 million in net revenue.
"The auditors concluded that our financial statements present fairly in all material respects the position of the city," Paggeros told the council. He said the general fund reported $72.5 million in revenues and $56.4 million in expenditures for the year and noted that Measure G (about $3.7 million) is included in the totals.
Paggeros cautioned the council that a large share of the surplus flowed from a 2020 tax-revenue-sharing agreement with Walmart. He said the city has received $64.3 million under the agreement through June 30, 2025, with the city receiving slightly more than half of that total; in FY24-25 the city's portion was $9.2 million (Walmart's share about $8.1 million). The California Department of Tax and Fee Administration has ordered that revenues be reallocated to other taxing entities and that determination is currently under litigation, Paggeros said.
Paggeros also described other fiscal items that will affect budgeting: the city has an approximate $66.1 million general fund balance (about half in reserves and half unassigned, with roughly $30 million unassigned), interfund advances totaling $5.6 million, a Recreation & Aquatics (RACK) fund deficit of $2.4 million that staff will recommend be covered by Measure G transfer at mid-year, and a $2 million general-fund advance to set up a parking program whose repayment terms have not been decided.
Enterprise funds show timing-driven swings tied to capital projects for water and wastewater; the CityNet divestment to Xfinity (sale completed March 2025) is in closeout and staff will assess asset disposition and residual liabilities. Auditors advised staff that storm-water lacks sufficient operating revenue to be a self-supporting enterprise fund; staff recommended moving storm-water into a special-revenue fund and will bring details as part of the next budget cycle.
Council member Salazar asked for a detailed historical breakdown of the $30 million unassigned balance to trace sources and prior uses. Council members thanked the finance team and said they had received and filed the ACFR; staff will return with recommendations on reserves and mid-year budget adjustments as needed.
