FY2026-27 Budget Preview
& Five-Year Forecast
City Council Nick Pegueros
April 28, 2026 Admininstrative Services Director & CFO
Today's Discussion
01 FY2025-26 General Fund What it funds, proactive measures, reserves, revenue risks 02 FY2026-27 General Fund
Budget Preview
Revenue and expenditure outlook
04 Five-Year Forecast Interactive Interactive tool to identify challenges and opportunities 03 General Fund Forecast What could change, how we respond City of San Bruno | FY2026-27 Budget Preview & Forecast FY2025-26
General Fund Budget
FY2025-26 General Fund
The City’s primary operating fund
$68.8M
FY26 Budget
188.76
FTEs (287 FTEs, all Funds)
Balanced
Revenue = Expenditure
Police 72.00 FTEs
Patrol, investigations, traffic, dispatch, special assignments Fire 40.00 FTEs
Suppression, emergency medical services, fire prevention Comm. Svcs. 24.95 FTEs
Library, parks, satellite programs, senior center
Public Works 23.16 FTEs
Administration & Engineering and streets
Admin. Svcs. 15.15 FTEs
Finance and human resources
City Manager 7.35 FTEs
Executive leadership, City Clerk, communications
City of San Bruno | FY2026-27 Budget Preview & Forecast
5.00 FTEs Mayor and City Councilmembers
1.15 FTEs in Community Development
City Attorney is a contract service
Proactive Measures Taken
Steps already implemented to strengthen the City’s financial position Department Consolidation $350K/yr FY25
Merged Finance, HR, IT, Risk Management into Administrative Services. Eliminated one department head.
Sale of CityNet $1.0M/yr FY25
Sold to Comcast; Transition finalized Dec 2025. Eliminated exposure to General Fund backfill of CityNet’s structural deficit.
San Bruno Triple Flip Ongoing FY26
Fire Station (San Bruno Community Foundation) → Measure Q (PMP) → Measure G for General Fund operations. 36-Hour Workweek $900K FY26
Offset first 10% of market-rate salary adjustments. Avoids $900K structural increases.
Combined savings: ~$2.25M+
City of San Bruno | FY2026-27 Budget Preview & Forecast General Fund Reserves
As of June 30, 2025
Budget Stabilization $12.60M
Target = 20% of operating expenditures
Contingency $10.84M
Target = 10% of operating expenditures
On-time Revenue $ 9.35M
No target. One-time funds deposited annually
Unassigned fund balance* $24.74M
Net accumulated surplus, drawn at Council discretion
$16M repayment from CityNet for accumulated deficits
Combined reserves: $57.53M
City of San Bruno | FY2026-27 Budget Preview & Forecast *Excludes GASB31 Fair Market Value adjustment as of 6/30/25 Revenue Risks
External risks that could reduce General Fund revenue
VLF Backfill $3.0M
Partial reduction
Incorporated in the Draft FY2026-27 budget
VLF Backfill II $4.0M
Remaining balance of VLF at risk
Possible · FY28+
TRSA $8.0M
$4M transferred to reserves
Possible · FY28+
TRSA Repayment $43-83M
$43M + $8M/yr collected
Possible · One-time
Excess ERAF $2.0M
Negative change in County’s calculation
Possible · FY28+
Cardroom $3.4M
SB 549 litigation
Possible · FY28+
Maximum ongoing: ($20.4M/yr) + one-time repayment up to ($83M) City of San Bruno | FY2026-27 Budget Preview & Forecast FY2026-27
General Fund Budget Preview
Budget Principles
Guiding principles for the City Manager’s recommended budget — promoting sound financial management, strategic alignment with City Council priorities, and long-term stability. Unchanged from previous years. 01 Actively pursue revenue enhancements and strive to achieve full cost recovery for all fee-based services, except where the City Council establishes a public interest in providing a subsidy. 02 Enhance and maintain core City services and infrastructure by prioritizing City Council adopted initiatives and strategies that contribute to the quality of life in San Bruno.
03 Promote the City’s long-term financial sustainability through monitoring and reporting on changes in unfunded liabilities and including those changes in the City’s long-term forecast. 04 Evaluate one-time revenues for highest impact and best investment.
05 Improve productivity through continual review of City services, identifying new programs/initiatives and enhancing, reducing, or eliminating existing programs.
06 Proactively manage the loss of institutional knowledge through succession planning efforts including the ability to provide for overlap in critical positions, at the discretion of the City Manager.
07 Manage staff capacity to efficiently deliver services to the community through investment in new technologies that drive efficiency and productivity.
08 Incorporate a budget assumption for employee vacancies and resulting salary savings into the forecast.
09 Develop programs and initiatives that strengthen San Bruno’s standing as an employer of choice to retain and attract highly qualified personnel.
10 Clearly define the cost and timing of all cash outlays associated with major projects, to allow investment of idle cash, while maintaining liquidity.
11 Communicate the City’s financial position by continuing to refine the budget document and provide comparison to actual results, while enhancing the public’s access to financial information.
12 Increase reserve funds, on an annual basis, as funds are available
.
City of San Bruno | FY2026-27 Budget Preview & Forecast FY2026-27 Budget Preview
General Fund — Draft Budget (VLF loss baked in)
($1.7M)
Deficit
Key Drivers
8.0 FTE vacancies — potential service level reductions to balance the budget (not included in numbers above) $74.7M
Revenue
($3M) VLF backfill loss — Drives budget deficit
Revenue growth: Property Tax +4.5%, Sales Tax +1% — Offset by declining intergovernmental revenue City of San Bruno | FY2026-27 Budget Preview & Forecast $76.4M
Expenditures
Salaries and benefits: $50.0M (65%) — labor agreements adjustments; includes unfunded actuarial liability (UAL) of ~$9.3M
FY2026-27 Revenue by Category
General Fund — $74.7M Total
Sales Tax & TRSA $19.4M 26.0% General sales tax, TRSA participation, public safety augment Property Tax $14.9M 19.9% Secured, unsecured, RPTTF, supplemental, homeowner relief Charges for Services $10.4M 13.9% Internal service charges, permits, recreation, fire fees Business Tax $7.1M 9.5% Business license fees, cardroom revenue Intergovernmental $4.4M 5.9% Vehicle license fee in-lieu ($3M backfill loss baked in) Investment & Rental $4.1M 5.5% Interest earnings, building & property rentals TOT $3.6M 4.8% Transient occupancy (hotel-motel) tax
Transfers In $3.3M 4.4% Interfund transfers from other City funds Other Taxes $3.0M 4.0% Franchise fees, property transfer tax, cannabis tax Excess ERAF $2.2M 2.9% Excess Educational Revenue Augmentation Fund Other Revenue $2.3M 3.1% Fines, reimbursements, other miscellaneous Taxes = 63% of General Fund revenue — Sales Tax includes TRSA (at risk); Intergovernmental reflects $3M VLF backfill loss City of San Bruno | FY2026-27 Budget Preview & Forecast FY2026-27 Expenditures by Department
General Fund — $76.4M Total
Police $23.1M 30.3% Patrol, investigations, traffic, dispatch, special assignments Non-Departmental $16.5M 21.6% UAL pension ($9.3M), transfers out ($6.4M), other Fire $15.0M 19.7% Suppression, emergency medical services, fire prevention Community Services $8.6M 11.3% Library, parks, satellite programs, senior center Public Works $5.4M 7.1% Administration, engineering, and streets Admin Services $3.9M 5.1% Finance, human resources, information technology City Manager & Attorney $2.6M 3.4% CM office, legal services City Clerk $580K 0.8% Clerk operations
City Council $372K 0.5% Council operations
Comm Development $283K 0.4% CD administration
Public Safety (Police + Fire) = $38.1M = 49.9% of General Fund expenditures City of San Bruno | FY2026-27 Budget Preview & Forecast General Fund Forecast
The forecast is a planning tool, not a prediction.
Revenue Risks
External risks that could reduce General Fund revenue
VLF Backfill $3.0M
Partial reduction
Incorporated in the Draft FY2026-27 budget
VLF Backfill II $4.0M
Remaining balance of VLF at risk
Possible · FY28+
TRSA $8.0M
$4M transferred to reserves
Possible · FY28+
TRSA Repayment $43-83M
$43M + $8M/yr collected
Possible · One-time
Excess ERAF $2.0M
Negative change in County’s calculation
Possible · FY28+
Cardroom $3.4M
SB 549 litigation
Possible · FY28+
Maximum ongoing: ($20.4M/yr) + one-time repayment up to ($83M) City of San Bruno | FY2026-27 Budget Preview & Forecast The Structural Gap
Even without additional revenue losses, expenditures outpace revenue Revenue Growth
2.9%*
~$1.7M per year
Expenditure Growth
4.0%*
~$3.3M per year
Baseline Projection (with $3M VLF Backfill loss)
FY27 FY28 FY29 FY30 FY31 FY32
Revenue $74.7M $80.3M $82.2M $83.7M $85.4M $87.1M
Expenditures $76.4M $81.3M $85.2M $88.0M $90.9M $93.8M
Surplus/ (Deficit) ($1.7M) ($1.0M) ($3.0M) ($4.3M) ($5.5M) ($6.7M) *Compound Annual Growth Rate (CAGR)
By FY32: ($6.7M) annual deficit before any additional revenue risk reductions City of San Bruno | FY2026-27 Budget Preview & Forecast
Forecast Scenarios
Three scenarios based on timing and severity of revenue risks Best
($10M)
• No loss of at-risk revenues
• $3.5M revenue measure ‘28
• No service reductions
Middle
($28M)
• $3M VLF backfill loss FY27
• $3.5M revenue measure ‘28
• No service reductions
Worst
($84M)
• All at-risk revenue lost FY27
• $3.5M revenue measure ‘28
• No service level reductions
Reserves as of June 30, 2025: ~$57.5M
City of San Bruno | FY2026-27 Budget Preview & Forecast Revenue Opportunities
Voter-approved measures to close the structural gap
$7M Revenue Measure $7.0M/yr
Parcel tax. Grows to ~$8.2M by FY2031-32 if passed 2026. Growth: 4.0%/yr $3.5M Revenue Measure $3.5M/yr
Additional sales tax, similar to Measure G. Growth: 2.0%/yr $1M Revenue Measure $1.0M/yr
Transfer tax, hotel/motel tax increase, utility users’ tax, etc. Growth: 2.0%/yr Elections: 2026, 2028, 2030, with tax revenue beginning the subsequent fiscal year.
Ad Hoc Subcommittee (Hamilton/Salazar) exploring Nov 2026 ballot.
Balancing the Budget
Three tools, used in combination
New Revenue
Voter-approved measures
$11.5M potential
Service Reductions
Reductions compound
(Earlier = greater impact)
1% ≈ 1.8 FTEs
Reserves
Kicks-the-can
~$57.5M available
City of San Bruno | FY2026-27 Budget Preview & Forecast Interactive Forecast Dashboard
Live Demo
Middle Scenario
City of San Bruno | FY2026-27 Budget Preview & Forecast
Recommendation
Receive the FY2026-27 Budget Preview and Forecast
And provide direction to staff
City of San Bruno | FY2026-27 Budget Preview & Forecast Questions
Asian American
Nati ve Hawai i an
P a c ific Isla n d e r
Heri tage Month
Decl are the Month of as
San Bruno
April 28, 2026
Connect Bay Area Local Investment Plan
1 • SamTrans Snapshot
• Key Issue
• Connect Bay Area Measure
• Transportation Funding in San Mateo County
• SamTrans Financial Outlook
• Local Investment Plan
• Take the Survey and Spread the Word
Agenda
2 ▪ Established in 1976 – Celebrating 50 Years!
• San Mateo County, parts of San Francisco, City of Palo Alto • 315 buses serving 76 bus routes, 10 million annual boardings • Other services: Redi-Wheels and RediCoast paratransit, Ride Plus on-demand rideshare (two zones), shuttles
• School-oriented bus service
▪ Rider Profile
• 94% low income (68% extremely low income) based on SMC affordable housing metrics
• Lowest household income among major Bay Area transit agencies • 40% speak a language other than English at home
• Nearly 80% do not drive/own a car
• 98.8% of pre-pandemic ridership
3 SamTrans Snapshot
• Caltrain, BART, SFMTA, and AC Transit are facing deficits as post-pandemic fare revenue lags and operating costs
rise
• Despite ridership gains and cost efficiency measures, expenses are outpacing revenues
• Federal and state support has declined
• Need for a stable, predictable source of funds to keep these agencies going
4 Key Issue
• 14-year, 1/2 cent sales tax in 4
counties (San Mateo, Santa Clara,
Alameda, Contra Costa), full cent
in San Francisco
• Would generate approx. $980
million annually
• Includes accountability and
oversight provisions
• 24% of SMC sales tax to Caltrain,
27% to BART, 7% to Muni, 37%
SamTrans Local Investment Plan
5 Connect Bay Area Measure
• Approximately $50M annually for 14 years for public
transit in San Mateo County; Total = $700M
• Funds may be used for:
• Public transit operations and capital
• Public transit components of larger capital projects
• Targeted pavement repairs on local roads served by fixed-route transit
6 Connect Bay Area Measure –
San Mateo County
Transportation Funding in SMC
7 Measure A generates approximately $120 million annually. Measure W generates approximately $60 million annually for SamTrans local transit and $60 million annually for SMCTA to allocate for broader transportation improvements and operations throughout the county. 8 SamTrans Financial Outlook
FY26-FY36 Operating Outlook (assumes zero new tax revenue) $M
• Operating deficit projected
to begin in FY28
• Average annual deficit over
next 10 years of nearly $30M
• Increased labor, energy, and
contracted services costs
• Cost saving measures
• No new positions approved,
reducing consultant use
• Cuts across all discretionary
spending
$-
$100
$200
$300
$400
$500
$600
FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36
Operating + Debt Service Only
Net Operating Surplus Net Operating Deficit Total Sources Total Uses • SamTrans’ Local Investment Plan will be informed
by:
• San Mateo County Transit District Strategic Plan
and Capital Improvement Plan (CIP)
• SamTrans Board of Directors
• Stakeholder and Agency Advisory Group
meetings
• City Council presentations
• Public outreach
• Goal is to have a Board-adopted plan in June 2026
9 Local Investment Plan:
Your Input Matters!
Local Investment Plan Categories
10 Local Investment Plan
Feb Mar Apr May Jun
Stakeholder and Agency Advisory Group Meetings:
February – April, May (if needed)
Public Communications Effort: March – May
City Council and other presentations: March – May
Board Information Item: May 6
Board Action Item: June 3
11 Approximately 10 weeks for public engagement
Take the Survey and Spread the Word!
12 Visit
https://www.samtrans.com/projects/LocalFundingPlan
• Multilingual online survey + printable mail-
return version
• Multilingual fact sheets
• Social media toolkit
• Translations in Spanish, Simplified Chinese,
Tagalog
• Additional support and language assistance
available at 1-800-660-4287
Questions/Comments?
13 Contact us!
[email protected]
Thank You
14 In Memory of
Thomas “Tom” E. Ricci
San Bruno Councilmember
(1978
-
1987)
In Memory of
Nancy Magee