San Bruno manager presents FY 2026–27 budget; council warned of multiple state revenue risks

San Bruno, Calif. — The city manager and finance staff presented the City of San Bruno's recommended FY 2026–27 budget on June 9, a $281 million plan across 47 funds that includes $75.2 million in general fund operating expenditures and measures intended to preserve essential services while responding to significant state-level revenue uncertainties.

City Manager McIntyre summarized the package as a one-year financial plan and emphasized the city's priority programs — public safety, capital delivery (streets, water/wastewater), downtown improvements, and the "Elevate San Bruno" economic development initiative. "Trimming at the edges no longer cuts it," McIntyre said, asking the council to weigh tradeoffs.

Administrative Services Director and CFO Nick Pagaros walked the council through the revenue picture and the principal budget risks. The city removed roughly $3 million in the FY27 revenue projection to reflect a likely reduction in the Vehicle License Fee (VLF) backfill; that removal is already built into the recommended budget. Pagaros flagged several additional potential exposures:

- Walmart.com tax-sharing revenue: San Bruno currently budgets approximately $8 million annually from a tax-sharing arrangement; the state issued a reallocation notice that could reduce or eliminate that amount. The recommendation is to budget half of that revenue and set the other half aside in a reserve pending appeals and final resolution. Pagaros said that as of the end of FY26 the city had received roughly $43 million of such receipts that could be subject to reallocation.

- Excess education-revenue allocations ("excess RAA"/E.R.A.): the county and cities are appealing a state finding; a potential adverse outcome could reduce San Bruno revenues by about $2.2 million.

- Card-room revenue and litigation/regulatory risk: ongoing state actions and federal litigation could affect local card-room receipts; the magnitude and timing of potential losses are uncertain.

To balance FY27 staff recommended—and council accepted in the recommended package—removing eight currently vacant positions (three firefighters, one police officer, two analysts, two engineers) generating roughly $1.5 million in salary and benefit savings and additional line-item reductions across departments (police contract services $170K; fire $100K; community services $80K). Staff also reallocated selected positions (for example, charging code enforcement to a special revenue/community development fund where appropriate) to reduce general fund burden.

Key ongoing initiatives funded in the recommended budget include a $2 million ERP (enterprise resource planning) project to replace an end-of-life financial system, downtown lighting and beautification ($350K appropriated), the Elevate San Bruno economic-development/code package (estimated up to $2.8M), and a proposed senior center renovation (estimated $5.5M total, with $3.2M from development impact fees and a $2.3M funding gap being pursued through federal earmarks and other sources).

Public works staff presented a $138 million capital improvement program dominated by enterprise projects for water/wastewater (~$96M) and $22M for streets/road projects. The city highlighted a five-year paving program (Measure G era) that invested approximately $40 million since Measure G was passed.

City Manager McIntyre asked the council for any direction on changes by June 18 so staff could include adjustments in the June 23 public hearing and action. Officials emphasized the recommendation is intentionally conservative to allow the city to respond to additional state revenue adjustments should they materialize.

Sources: Presentation and Q&A by City Manager McIntyre, Assistant City Manager Joe Tony, Public Works Director Matt Lee, and CFO Nick Pagaros during the San Bruno City Council meeting, June 9, 2026.