"The City With a Heart"
Rico E. Medina, Mayor
Sandy Alvarez, Vice Mayor
Tom Hamilton, Councilmember, District 2
Michael Salazar, Councilmember, District 3
Marty Medina, Councilmember, District 4
AGENDA
SAN BRUNO CITY COUNCIL SPECIAL MEETING
February 24, 2026
5:30 PM
IN PERSON* MEETING LOCATION
San Bruno Recreation and Aquatic Center, Community Room 251 City Park Way
San Bruno, CA 94066
*Please turn off all electronic devices before the start of the meeting to prevent disruptions*
**Zoom Link
https://sanbrunocagov.zoom.us/j/89433801039?
pwd=juB5q9TOyomYwqMb1PkcjCowTNWF1c.1
Phone Line: 16465588656
Webinar ID: 894 3380 1039
Webinar Password: 189303
*Broadcast of the meeting is offered via Zoom as a
courtesy to the public.
**No public comment accepted via Zoom.
PUBLIC COMMENT: In person attendees who want to provide public comment, will be asked to fill out a speaker card and turn it into the City Clerk. Public comment may also be emailed to [email protected] . Comments received via email will not be read
aloud during the meeting.
ACCESSIBILITY: In compliance with the Americans with Disabilities Act, individuals requiring special accommodations or modifications to participate in this meeting should contact the City Clerk’s Office 48 hours prior to the meeting at (650) 6167061 or [email protected] .
*Any disclosable public writings related to an open session item on a regular meeting agenda and distributed by the City to at least a majority of the City Council less than 72 hours prior to that meeting are available for public inspection at the City Clerk's Office at City Hall located at 567 El Camino Real, San Bruno, California during normal business hours. In addition, the City may also post such documents on the City’s Website at sanbruno.ca.gov/AgendaCenter .
1. CALL TO ORDER
2. ROLL CALL
3. CLOSED SESSION
a. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
(paragraph (1) of subdivision (d) of Section 54956.9)
Name of Case: City of San Bruno and Walmart.com USA, LLC, v California Department of Tax and Fee Administration (San Mateo County Superior Court Case No. 23CIV05021)
b. CONFERENCE WITH LABOR NEGOTIATORS
Agency designated representatives: City Manager
Employee Organizations: Teamsters Local 856, IBT Police; Teamsters Local 856, IBT Public Safety MidManagement; and Unrepresented Employees
4. STUDY SESSION
Public comment will be requested after each topic in this section a. Receive the Fiscal Year 202526 General Fund MidYear Financial Update
5. ADJOURNMENT – The next Regular City Council Meeting will be held on February 24, 2026 at 7:00 pm.
POSTING: I declare a copy of this agenda was posted at City Hall, 567 El Camino Real, San Bruno, among other locations in the city limits of San Bruno, on February 19, 2026, by 8:00 pm. 1 of 5
"The City With a Heart"
Rico E. Medina, Mayor
Sandy Alvarez, Vice Mayor
Tom Hamilton, Councilmember, District 2
Michael Salazar, Councilmember, District 3
Marty Medina, Councilmember, District 4
AGENDA
SAN BRUNO CITY COUNCIL SPECIAL MEETING
February 24, 2026
5:30 PM
IN PERSON* MEETING LOCATION
San Bruno Recreation and Aquatic Center, Community Room 251 City Park Way
San Bruno, CA 94066
*Please turn off all electronic devices before the start of the meeting to prevent disruptions*
**Zoom Link
https://sanbrunocagov.zoom.us/j/89433801039?
pwd=juB5q9TOyomYwqMb1PkcjCowTNWF1c.1
Phone Line: 16465588656
Webinar ID: 894 3380 1039
Webinar Password: 189303
*Broadcast of the meeting is offered via Zoom as a
courtesy to the public.
**No public comment accepted via Zoom.
PUBLIC COMMENT: In person attendees who want to provide public comment, will be asked to fill out a speaker card and turn it into the City Clerk. Public comment may also be emailed to [email protected] . Comments received via email will not be read
aloud during the meeting.
ACCESSIBILITY: In compliance with the Americans with Disabilities Act, individuals requiring special accommodations or modifications to participate in this meeting should contact the City Clerk’s Office 48 hours prior to the meeting at (650) 6167061 or [email protected] .
*Any disclosable public writings related to an open session item on a regular meeting agenda and distributed by the City to at least a majority of the City Council less than 72 hours prior to that meeting are available for public inspection at the City Clerk's Office at City Hall located at 567 El Camino Real, San Bruno, California during normal business hours. In addition, the City may also post such documents on the City’s Website at sanbruno.ca.gov/AgendaCenter .
1. CALL TO ORDER
2. ROLL CALL
3. CLOSED SESSION
a. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
(paragraph (1) of subdivision (d) of Section 54956.9)
Name of Case: City of San Bruno and Walmart.com USA, LLC, v California Department of Tax and Fee Administration (San Mateo County Superior Court Case No. 23CIV05021)
b. CONFERENCE WITH LABOR NEGOTIATORS
Agency designated representatives: City Manager
Employee Organizations: Teamsters Local 856, IBT Police; Teamsters Local 856, IBT Public Safety MidManagement; and Unrepresented Employees
4. STUDY SESSION
Public comment will be requested after each topic in this section a. Receive the Fiscal Year 202526 General Fund MidYear Financial Update
5. ADJOURNMENT – The next Regular City Council Meeting will be held on February 24, 2026 at 7:00 pm.
POSTING: I declare a copy of this agenda was posted at City Hall, 567 El Camino Real, San Bruno, among other locations in the city limits of San Bruno, on February 19, 2026, by 8:00 pm. 2 of 5
City Council Agenda Item
Staff Report
CITY OF SAN BRUNO
DATE: February 24, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Alex D. McIntyre, City Manager
PREPARED BY: Nick Pegueros, Administrative Services Director & CFO SUBJECT: Receive the Fiscal Year 2025-26 General Fund Mid-Year Financial Update
BACKGROUND:
On June 24, 2025, the City Council approved Resolution No. 2025-62, setting the FY26 budget at $275.7 million, with $219.1 million for operations and $56.6 million for capital projects. This mid-year report updates the community on the City's financial status and highlights areas of concern after six months of operations.
DISCUSSION:
The Mid-year Financial Update mainly focuses on the General Fund, which finances many City services like public safety, engineering, senior services, and library operations. Other funds of policy interest, such as development impact fees, community benefit funds, Stormwater, CityNet, and Parking Enterprises, will be discussed in a future report. These operations are driven by unique factors and are not affected by core tax revenues that influence the city's ability to provide essential services to the public.
Overview
Table 1 summarizes the FY26 revenue and expenditure estimates. Both are tracking positively compared to the approved budget, resulting in a projected $4.5 million operating surplus. This includes an estimated $8 million in revenue from the City’s sales tax revenue sharing agreement (TRSA) with Walmat.com. The California Department of Tax and Fee Administration, however, continues to assert that the City cannot retain the sales tax dollars received through the City's Participation Agreement (TRSA), and that those funds must be reallocated to other local jurisdictions. Absent the TRSA revenue, the City faces a structural budget deficit of $3.6 million for FY26, growing in future years.
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Item 4a.
Honorable Mayor and Members of the City Council
February 24, 2026
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5 Table 1. General Fund
Revenue
Estimated actual revenues are projected to be $1.7 million more than budgeted. The excess revenue comes from two main categories: taxes, which are expected to exceed budget by $2.0 million due to higher sales tax revenue ($3 million) from the TRSA agreement, offset by a shortfall of $1.7 million in Vehicle License In-Lieu (VLF In-Lieu) backfill revenue from the State.
F Y 25 A ctual F Y 26 B udget
F Y 26 E st.
A ctual
F Y 2026
Over/(under)
budget
Revenues
T axes 47,301,846 $ 44,291,239 $ 46,313,057 $ 2,021,818 $ C harges for services 5,610,661 7,542,640 7,960,357 417,717 L icenses and permits 627,978 307,550 372,030 64,480
Intergovernmental 6,158,153 4,291,440 4,359,342 67,902
F ines and forfeitures 792,217 667,195 506,991 (160,204) Use of money and property 3,542,985 5,492,024 5,065,157 (426,868) Other revenue 4,097,636 3,588,921 3,353,802 (235,120)
T ransfers in 1,127,055 2,599,241 2,574,241 (25,000)
T otal Revenues 69,258,531 68,780,250 70,504,976 1,724,726 E xpenditures
S alaries and wages 25,053,316 29,865,796 27,883,963 (1,981,833) B enefits 16,761,871 20,200,313 18,483,026 (1,717,287)
S ubtotal S alaries and benefits 41,815,187 50,066,109 46,366,990 (3,699,119) S upplies and materials 1,202,957 1,148,664 1,379,632 230,968 Maintenance and repair 487,788 417,640 619,144 201,504
P rofessional services 2,021,909 1,719,450 2,819,845 1,100,395 C ontract services 1,222,733 1,442,480 1,162,532 (279,948) Utilities, insurances, fees 919,692 1,102,792 1,111,634 8,842 Dues, meetings, and staff development 507,635 676,211 692,897 16,686 Intergovernmental charges 984,736 1,099,500 928,052 (171,448) Other expenditures 20,794 200,000 200,000 -
Internal service charges 6,566,059 9,549,432 9,549,532 100 S ubtotal Operating E xpenditures 13,934,302 17,356,169 18,463,268 1,107,099 T ransfers out 1,295,466 1,150,401 1,150,401 -
T oal E xpenditures and T ransfers out 57,044,955 68,572,679 65,980,659 (2,592,020) Net Revenue 12,213,576 $ 207,571 $ 4,524,317 $
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Honorable Mayor and Members of the City Council
February 24, 2026
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5 Other factors driving revenues include lower than expected investment income resulting from a reduction in rates earned on City investments.
Expenditures
On the expenditure side, estimated actual FY26 expenditures are projected to be approximately $2.6 million below budget. All departments have successfully managed to keep General Fund expenditures under budget due to various factors, primarily driven by salary savings. The budget accounted for anticipated savings from staff vacancies; however, the actual vacancy rate has surpassed projections. The recently completed closure of the City’s cable enterprise resulted in staff reassignments, which will reduce the vacancy rate in the second half of the fiscal year. Additionally, the budget includes provisions for increased costs due to the expiration of labor contracts, costs that will be realized more fully through the remainder of the fiscal year.
While some planned work will be completed through alternative means instead of regular staffing, particularly using professional services, it is important to note that this represents missed productivity and potential budgetary savings.
Net Surplus/ (Deficit)
Despite a projected net surplus of $4.5 million, the potential loss of the VLF In-Lieu backfill and ongoing uncertainties from the TRSA lawsuit create significant budgetary and managerial challenges. Every operational decision must factor in that such revenue losses would lead to a structural deficit in the General Fund, which is influenced by decisions made by the State and beyond the City's control.
Annual Budget Amendments
Staff will come back on March 10 with a budget amendment seeking approval to update the FY26 budget. This update will include changes in operations, new requests, and budget corrections.
FISCAL IMPACT:
This report has no fiscal impact. Overall, at mid-year, the City's budget is meeting expectations, continuing to rely on the TRSA to address the structural deficit. Future budget considerations will need ongoing attention to the status of TRSA and VLF In-Lieu backfill, as both are at high risk of being lost.
ENVIRONMENTAL IMPACT:
The action is not a project subject to CEQA. City Council’s action is not considered a “Project” per CEQA Guidelines and therefore no further environmental analysis is required.
RECOMMENDATION:
Receive the Fiscal Year 2025-26 General Fund Mid-Year Financial Update
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