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San Bruno projects modest $600,000 surplus but CFO warns of revenue shortfalls and legal uncertainty
Summary
City CFO Nick Feros told the council the general fund is forecast to finish FY24–25 with about a $600,000 surplus on a $67.12 million budget but flagged weaker-than-expected cannabis and parking revenues and an ongoing sales-tax reapportionment dispute with the state.
Nick Feros, San Bruno’s administrative services director and chief financial officer, told the City Council on March 11 that the general fund is projected to end fiscal year 2024–25 with “about $600,000” in surplus on a $67.12 million budget, but said several revenue risks remain.
Feros said three revenue categories have come in lower than the budgeted estimates: cannabis tax receipts, parking-related revenue and certain county apportionments tied to vehicle license fee/sales-tax calculations. “The cannabis operator had presented to the council a $1.4 million annual revenue and while I can’t disclose their actual receipts it’s considerably lower,” he said.
Feros said the city is still refining how to allocate citation revenue and enforcement costs between the paid parking district and the rest of the city, and that loan-repayment timing for startup parking costs may need to be deferred until the parking fund books are closed. He said the midyear revenue and expense picture — including lower revenues and lower personnel and operating costs — nets to the estimated $600,000 surplus.
Council members pressed staff on the parking program’s fund type and enforcement tradeoffs. Feros explained the policy choice: an enterprise fund requires the program to be self-supporting, whereas a special revenue fund would allow a general-fund backstop if revenues fall short. He said staff will return with a detailed parking analysis at the council’s second meeting in April.
Council also heard about legal uncertainty tied to large sales-tax receipts from a major retailer. The city attorney said San Bruno received notices from the California Department of Tax and Fee Administration and has filed both an administrative appeal and a court challenge; the attorney estimated it could be “at least another year” before the merits are reached.
On expenditures, Feros walked council through roughly $5.2 million in proposed budget amendments across funds and described an $820,000 proposed use of one-time capital resources. He repeated staff’s projection that the general fund forecast shows a small structural deficit developing beyond the current year and said a balanced budget approach will be part of the FY26 planning process.
Council adopted a resolution amending the FY24–25 budget as presented. The motion to adopt the resolution passed unanimously (5–0).
