San Bruno adopts FY 2026-27 budget and CIP; council asks staff to return with equipment-replacement and community-benefit options

San Bruno's City Council adopted its fiscal year 2026-27 operating and capital budgets on June 23 after a public hearing. Staff presented a citywide spending plan of roughly $329 million across all funds and a $75.2 million general fund operating plan. The balanced budget relies on $2.45 million in reductions, including removing eight vacancies (four public-safety and four non-public-safety positions) and reallocating staff costs to special funds where appropriate.

The budget preserves targeted investments: roughly $6.6 million in pavement projects for the "We Love Paving" program in FY 2026-27, a sidewalk trip-hazard clearing program (about $1.8M in assessments and projects), downtown enhancement funds, and a $3.7 million senior-center renovation. Staff noted that many CIP items are staged (design now, construction once funds arrive) so project dollars can be spent promptly.

A major recurring theme was the equipment-replacement reserve, which public comment and council members noted has been drawn down from about $6 million in FY 2023 to approximately $1.7 million. Staff summarized trade-offs: restoring the reserve requires either one-time contributions from fund balance or ongoing recurring appropriations, both of which reduce available general-fund flexibility. Council asked staff to return in September with scenarios for replenishing the equipment reserve (including the annual funding need and what categories of assets to prioritize) and to propose policy guidance for community-benefit funds (Councilmembers suggested pilot uses such as downtown benches, BigBelly compacting trash cans, parking delineation and traffic calming).

Staff also summarized state-driven revenue risks (estimated potential exposure up to about $20 million): expected changes in vehicle-license-fee distributions, a state-driven reallocation of certain tax-share revenue (e.g., the Walmart tax-share adjustment), excess ERAF formula risks, and possible card-room regulatory changes.

Councilmembers asked for additional detail and posed suggestions that included one-time community-benefit allocations for small, visible downtown improvements (bench seating, bike racks, compacting bins), but several members cautioned that staffing capacity to deliver small projects has also been reduced and that projects should be prioritized citywide with an eye to maintainability.

Quote: "The fund has been drawn down considerably over the last five years ... putting aside money each year does soften that impact in future years," the Administrative Services Director said. The council approved the budget and CIP resolutions unanimously; staff will implement the adopted CIP and return with equipment-reserve options and a proposed community-benefit program schedule.

What to watch: staff return in September with an equipment-replacement funding plan and in July with ballot language for measures that could affect long-term revenues.