Residents may foot revenue gap

Residents may be asked to pay higher sales taxes or help fund fire services to offset an upcoming $800,000 deficit.

Starting in June 2009, Millbrae will face an $800,000 shortfall after a voter-approved measure for $1.1 million that charges property owners annually expires. The money to offset the shortfall, which represents nearly 5 percent of the city’s budget, will likely come from residents’ pockets, according to city officials.

The current fire assessment, which voters approved four years ago, charges each property owner an annual fee — single-family home-owners, for instance, pay $144. It is used to fund fire-prevention services, which make up about one-third of the Fire Department. Renewing the assessment would require voter approval.

Options for making up the revenue gap include raising the sales tax, hotel tax or business license fees; a new or continued fire assessment; additional red light camera revenues and savings from Fire Department consolidations, City Manager Ralph Jaeck said.

“We’re taking a position that we need to be prepared for the worst,” Assistant City Manager Jeff Killian said.

During tonight’s City Council meeting, officials will begin figuring out how to offset the looming deficit, a process that will continue until December. The community will have its chance to voice their opinion during meetings in the early part of 2009, before any final decisions, especially on ballot measures, are made by this time next year.

“I think we’re in comparatively good shape whenwe look at where we were five years ago,” Jaeck said.

The city’s revenue from hotel tax, its biggest source of income, halved from $4.4 million to $2.2 million in the 18 months after the Sept. 11 attacks. The city has also managed to build up about $4 million in general reserves after it was empty a half-decade ago.

During the next two years the city will also embark on its largest project ever: a $32 million refurbishment and reconstruction of the wastewater treatment plant funded mostly by bonds, Killian said.

mrosenberg@sfexaminer.com

Millbrae budget

A glance at the city’s financial situation in the next two years

Total budget: $16.9 million

June 2008 to June 2009: Balanced budget

June 2009 to June 2010: $800,000 shortfall

Fundraising options

» New fire assessment to charge property owners an annual fee; must be approved by voters

» Increase sales tax; must be approved by voters

» Raise business license fee

» Hike hotel tax; must be approved by voters

» Boost revenue from red light cameras

» Use savings from consolidating fire services with other cities

Source: City of Millbrae

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