HomeMy WebLinkAbout05.20.2025@430 SP Budget CCTuesday, May 20, 2025
4:30 PM
City of South San Francisco
P.O. Box 711 (City Hall, 400 Grand Avenue)
South San Francisco, CA
City Manager's Conference Room, 400 Grand Avenue
South San Francisco, CA 94080
Budget Standing Committee of the City Council
EDDIE FLORES, Mayor
MARK ADDIEGO, Vice Mayor
Special Meeting Agenda
1
May 20, 2025Budget Standing Committee of the
City Council
Special Meeting Agenda
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Page 2 City of South San Francisco Printed on 5/21/2025
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May 20, 2025Budget Standing Committee of the
City Council
Special Meeting Agenda
CALL TO ORDER
ROLL CALL
AGENDA REVIEW
PUBLIC COMMENTS: Comments are limited to items on the Special Meeting Agenda.
MATTERS FOR CONSIDERATION
Motion to approve the Minutes for the meeting of January 29, 2025.1.
Report regarding the City of South San Francisco Operating Budget for Fiscal Year
2025-26 (Karen Chang, Director of Finance)
2.
Report Regarding Options for Revenue Enhancement. (Rich Lee, Assistant City
Manager & Wing-See Fox, Urban Futures, Inc.)
3.
Report regarding proposed Capital Improvement Program for the Fiscal Year
2025-26. (Eunejune Kim, Director of Public Works/City Engineer, and Matthew
Ruble, Principal Engineer)
4.
ADJOURNMENT
Page 3 City of South San Francisco Printed on 5/21/2025
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City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #:25-580 Agenda Date:5/20/2025
Version:1 Item #:1.
Motion to approve the Minutes for the meeting of January 29,2025.
City of South San Francisco Printed on 5/16/2025Page 1 of 1
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CALL TO ORDER TIME: 4:00 p.m.
ROLL CALL PRESENT: Mayor Flores
Vice Mayor Addiego
AGENDA REVIEW
None.
PUBLIC COMMENTS
The following individual addressed the subcommittee:
• Cynthia Marcopulos
MATTERS FOR CONSIDERATION
1. Motion to approve the Minutes for the meeting of May 8, 2024.
Motion – Vice Mayor Addiego / Second – Mayor Flores: to approve the minutes. The motion carried
unanimously.
2. Report presenting Fiscal Year (FY) 2024-25 Mid-Year Financial Report as of December 31,
2024, and proposed budget amendments for FY 2024-25 Operating and Capital
Improvement Program (CIP) Budgets (Karen Chang, Director of Finance)
Director Chang presented the report and reviewed the 2024-25 budget and reviewed proposed
adjustments. Department representatives discussed appropriation requests and responded to inquiries
from the subcommittee.
Vice Mayor Addiego highlighted the response to the new Business License Tax and requested
additional data surrounding Transient Occupancy Tax (TOT).
Director Chang concluded with reviewing the 5-year budget projection, recommendations, and next
steps.
The subcommittee provided feedback to staff for presenting the item to the Council.
3. Staff Report for Discussion on Pension Funding Policy and update on pension and OPEB
liabilities (Karen Chang, Director of Finance)
MINUTES
SPECIAL MEETING
BUDGET STANDING COMMITTEE
OF THE CITY OF SOUTH SAN FRANCISCO
WEDNESDAY, JANUARY 29, 2025
4:00 p.m.
City Hall, City Manager’s Conference Room
400 Grand Avenue, South San Francisco, CA
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SPECIAL BUDGET STANDING COMMITTEE MEETING JANUARY 29, 2025
MINUTES PAGE 2
Director Chang presented the report and discussed a potential pension funding policy.
City staff and subcommittee members engaged in discussions surrounding strategies for addressing
obligations.
Mayor Flores requested the item be brought to the Council with tables to identify variables for
visibility.
4. Preliminary information regarding federal aid freeze and implications for existing City
contracts and subgrantees. (Sharon Ranals, City Manager)
City Manager Ranals indicated the item was added to discuss the potential freeze of federal funding.
She noted the City is working to create a comprehensive report of federally funded programs and
encouraged the subcommittee to provide any thoughts.
The subcommittee indicated there is not a desire to withhold payments and provided feedback to staff.
ADJOURNMENT
Being no further business, Mayor Flores adjourned the meeting at 5:25 p.m.
Submitted by: Approved by:
Jazmine Miranda Eddie Flores
Assistant City Clerk Mayor
Approved by the Budget Standing Committee: / /
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City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #:25-438 Agenda Date:5/20/2025
Version:1 Item #:2.
Report regarding the City of South San Francisco Operating Budget for Fiscal Year 2025-26 (Karen Chang,
Director of Finance)
Attachments:
Att A - Operating Budget Staff Report - *due to formatting limitations, the full report is included in Attachment
A.
Att 1 - General Fund Proposed Budget FY 2025-26
Att 2 - New Requests - Personnel cost GF & Other Funds
Att 3 - New Requests - Supplies and Services GF & Other Funds
Att 4 - Revenue Adjustments GF & Other Funds
Att 5 - Budget Subcommittee Presentation
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City of South San Francisco Page 1 of 15
File#: 25-438 Agenda Date: 5/20/2025
Version: 1 Item #:
Report regarding the City of South San Francisco Operating Budget for Fiscal Year 2025-26.
(Karen Chang, Director of Finance)
RECOMMENDATION
It is recommended that the Budget Standing Committee provide feedback in preparation for
the City Council study session on June 11, 2025, related to the establishment of the City’s
Fiscal Year (FY) 2025-26 operating budget.
BACKGROUND/DISCUSSION
The City’s budget process is an annual cycle that aligns financial planning with service delivery,
policy goals, and community needs for the fiscal year beginning July 1 and ending June 30. It
serves as both a financial plan and a policy document, guiding how City resources are allocated
and managed.
Each year, the process begins with the development and refinement of City Council policy goals,
typically occurring in the first quarter of the calendar year. These goals serve as a strategic
foundation for budget development, providing direction for departmental priorities, new
initiatives, and resource allocation. This early-stage policy discussion ensures that the budget
reflects the long-term vision and evolving priorities of the City Council and the community.
Following this, departments prepare budget requests based on operational needs and policy
alignment. These requests are reviewed by the Finance Director and City Manager, and department
heads participate in individual meetings to evaluate and refine their proposals. Revenue forecasting
is conducted primarily by the Finance Department for major tax categories, while departments
contribute estimates for fees, permits, and other sources.
Capital improvement requests are managed separately by the Public Works Department and
submitted via a dedicated staff report to ensure alignment with infrastructure planning and long-
term capital needs.
The public component of the budget process begins with the Budget Standing Committee, which
reviews preliminary recommendations and key assumptions. The proposed budget is then
presented in a public City Council Study Session for discussion and feedback. A final version is
adopted by the City Council in a regular meeting, completing a three -step public review and
approval process.
City of South San Francisco
Legislation Text
P.O. Box 711
(City Hall, 400 Grand Avenue)
South San Francisco, CA
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City of South San Francisco Page 2 of 15
The process is guided by best practices in fiscal management, emphasizing transparency,
accountability, and the alignment of financial resources with strategic priorities.
CITYWIDE OVERVIEW – EXECUTIVE SUMMARY
While each fund, particularly the General Fund, face specific revenue-side concerns, the cost
pressures affecting the City’s budget are broad and largely universal across departments and funds.
A key driver of rising expenditures in the FY 2025–26 Proposed Budget is the continued growth
in personnel costs. The budget currently includes a 3% cost-of-living adjustment (COLA), which
adds approximately $3.0 million to the City’s payroll base. However, this projection may change,
as contracts for all bargaining units will expire on June 30, 2025, and are currently being
negotiated. In this context, the City must balance fiscal sustainability with the need to retain and
attract a high-quality workforce.
Healthcare premiums continue to rise this year; however, the rate of increase has tapered off
compared to last fiscal year's peak. Kaiser's premium, which rose 17% last year, shows no change
this year, while Blue Shield's rates increased by 4%, and dental premium remain unchanged.
The City is also experiencing a sharp rise in its required pension contributions. The total Unfunded
Accrued Liability (UAL) payment to CalPERS in FY 2025–26 is projected at $23.6 million — a
$3.7 million or 19% increase over FY 2024–25.
These increases are primarily due to CalPERS’ adjustments in actuarial assumptions—such as
lower expected investment returns and changes in retiree longevity—as well as past investment
losses that are now being amortized over time. Additionally, COLAs for salaries in South San
Francisco have exceeded CalPERS’ actuarial assumption of 2.8%1 which further increases our
UAL payment. Since pension liabilities are closely tied to employee compensation, this higher-
than-expected wage growth has added upward pressure to the UAL. These impacts are
compounded by CalPERS’ structured amortization schedules. CalPERS uses a layered
amortization approach to manage gains and losses over time, typically spreading each year’s
changes over 20 years. These schedules are deliberately backloaded: payments begin at lower
amounts and ramp up over the first five years. While this method provides participating agencies
with less pension contribution volatility, it does result in paying more interest than straight-line
amortization of investment losses. The City is experiencing the ramp up period, and payments are
rising in FY 2025–26 not only due to new liabilities, but also due to the natural progression of
earlier amortization layers reaching their peak. This structured, escalating curve is intended to
smooth volatility over time but presents near-term budget pressures for the City.
With respect to CalPERS’ investment portfolio performance in the current fiscal year, while it
experienced significant paper losses due to market volatility from federal government tariffs,
through May 9, 2025, the market value of CalPERS investment portfolio is $533.6 billion, which
is a 6.1% year to date return on investment (ROI). Of note, it is the deviation between the discount
rate (currently 6.8%) and the ROI that determines whether CalPERS amortizes an investment gain
or loss for a fiscal year.
Other non-personnel operating costs are also rising. Mid-year adjustments to utility rates have been
carried forward into the new budget, contributing to higher baseline expenses. In addition, ongoing
1 https://www.calpers.ca.gov/documents/jrs-actuarial-valuation-2024/download?inline
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inflation continues to drive up the cost of supplies, materials, and contracted services, placing
added pressure on the City's operating budget. To help manage rising costs, the City Manager
instructed departments to be highly selective in submitting new requests during the budget
development process –especially those related to staffing. With limited exception, new position
requests were discouraged in order to contain long-term cost growth and preserve budget
flexibility. This directive reflects a strategic effort to align the City’s service levels with available
resources, ensuring fiscal sustainability while minimizing the accumulation of ongoing obligations
in a challenging revenue environment.
Table 1 illustrates the citywide impact of these trends. While revenues are projected to increase
slightly from FY 2024–25 to FY 2025–26, overall expenditures, particularly payroll and supplies
and services, are rising more sharply, resulting in a projected net deficit of $6.0 million:
Table 1. Citywide Operating Budget (in million)
Funds Gen F Meas W Spec. Rev
Ent.
Fund ISF Other Total
Revenue $139.0 $14.6 $9.6 $37.6 $31.1 $0.0 $232.1
Transfers In $1.5 - - $0.9 $0.3 $13.2 $15.9
Payroll ($117.0) ($0.2) ($1.1) ($14.0) ($19.6) ($0.0) ($151.9)
Supplies & Svcs ($25.0) - ($1.9) ($14.3) ($11.0) ($0.1) ($52.2)
Capital Purchases ($0.0) - ($0.1) ($1.1) ($1.4) - ($2.6)
Debt Service - - - ($5.5) - ($13.2) ($18.7)
Inter Dept ($10.2) - ($0.0) ($2.3) ($0.1) - ($12.6)
Transfers Out ($0.5) ($13.2) ($2.2) - - - ($15.9)
Surplus/ (Deficit) ($12.2) $1.2 $4.3 $1.3 ($0.6) ($0.1) ($6.0)
Table 1 highlights the growing gap between revenue growth and expenditure needs, a trend that
without strategic action, could significantly constrain the City’s ability to sustain existing service
levels in the years ahead.
The remainder of the discussion of this report will be focused mainly on the General Fund
operating budget. The General Fund is the City’s largest and core operational fund, where all of
the City’s tax revenues and the bulk of the essential services are delivered by departments such as
Economic and Community Development, Fire, Library, Parks and Recreation, Police, Public
Works, and City Administration are budgeted and accounted for.
GENERAL FUND OVERVIEW – EXECUTIVE SUMMARY
City Council adopted the FY 2024-25 mid-year budget on February 12, 2025. At that time General
Fund total revenues and resources were projected to be $152.6 million, while expenditures were
projected at $159.5 million resulting in a General Fund deficit of approximately $6.9 million.
FY 2024-25 Budget update
Since mid-year, additional updates have prompted revisions to the year-end projections.
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As shown in Table 2, the projected net deficit has improved slightly, decreasing from $6.9 million
to $5.8 million.
The adjustments following the mid-year, as shown in Table 2 are:
1. Following the mid-year adjustment, subsequent budget adjustments have resulted in a net
reduction of $2.7 million to the projected year-end available fund balance.
2. Further Adjustments represent additional adjustments by staff on the projected revenues
and expenditures.
a. Revenues:
i. $0.2 million in City Council authorized budget adjustments increasing
revenue.
ii. $1.4 million reduction in revenue due to the one-time billboard project
being moved to the next fiscal year.
b. Expenses:
i. $2.9 million in City Council authorized budget adjustments increasing
expenditure authority.
ii. $3 million reduction in projected payroll expenses due to additional
anticipated vacancy savings.
iii. $2.2 million reduction in Supplies and Services due to the closure of
completed Purchase Orders with remaining balances.
Table 2. General Fund Year End Projection
Mid-Year
Projected
FY 2024-25
Year End
Updated
Projected
FY 2024-25
Year End
Year Start Available Fund Balance 34.8 34.8
Adjustments to Fund Balance1 7.8 7.8
Revenues (inflows) 145.3 144.1
Expenditures (159.9) (157.6)
Change in Available Fund Balance (6.9) (5.8)
Projected Year-End Available Fund Balance 27.9 29.0
1. Adjustment to fund balance is the release of encumbered funds back into the
available reserve.
Despite the projected available fund balance of $29.0 million in the General Fund reflecting a 17
percent decrease when compared to the prior year, it remains at a fiscally sound level.
FY 2025-26 Proposed Budget
As the City begins development of the FY 2025–26 budget, it continues to monitor a range of
national and state economic risks that may impact fiscal performance. At the national level, slower-
than-expected economic growth, persistent core inflation, and the potential for prolonged high
interest rates are creating uncertainty for both consumer behavior and municipal revenues. At the
state level, ongoing budget deficits in California- unlikely to improve in near term-pose additional
risks, particularly for local governments that rely on intergovernmental funding or economic
activity linked to state-level policy. These factors present a greater risk to the City’s revenues than
to its expenditure, as approximately 80 percent of General Fund spending is committed to
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personnel costs, which tend to remain stable and are less immediately affected by economic
fluctuations. These fiscal pressures provide important context for the City’s FY 2025–26 General
Fund budget, which, as shown in Table 3, requires the use of $12.2 million in General Fund
available fund balance to close the budget gap, representing a 43 percent reduction in City’s
General Fund’s available fund balance.
Table 3. General Fund Operating Budget
FY 2025-26 Proposed Budget (in millions)
Beginning Available Fund Balance $29.0
Revenues $140.5
Less: Expenditure 152.7
Surplus/ (Deficit) (12.2)
Use of General Fund Reserve 12.2
Net Surplus/(Deficit) Balanced
Ending Available Fund Balance $16.8
The table above provides a high-level overview of the General Fund's projected revenues and
expenditures for FY 2025–26. To better understand the factors driving the City’s financial position,
the following sections provide additional detail, beginning with the revenue categories. Each
revenue source is influenced by a range of economic, policy, and operational factors that shape the
City’s ability to fund services and maintain fiscal stability.
1. FY 25-26 GENERAL FUND REVENUE PROJECTIONS
The FY 2025-26 Operating Budget has been developed, assuming many of the revenue categories
would experience moderate to flat growth. Comparisons are generally made to the prior year
adopted budget unless otherwise noted.
1. Property Tax revenue is projected to be higher based on historical information, but slightly
lower than the mid-year update due to the assumption that the State of California will not
appropriate funds to backfill the VLF shortfall
2. Sales Tax is expected to decrease from last year’s adopted but remain flat from the mid-
year update.
3. Transient Occupancy Tax (TOT) revenue projected with modest increase.
4. Other Tax, which includes the voter-approved update to the Business License Tax, is
projected to have a significant increase.
5. Franchise Fees remain flat
6. Permit Fee revenues are projected to decrease significantly.
The General Fund revenue forecast (excluding Measure W), Table 4 for FY 2025-26 is shown
below, set against FY 2024-25 budget and FY 2023-24 actuals (in millions):
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Table 4. General Fund Operating Revenue Budget
REVENUES FY 2023-24 FY 2024-25 FY 2025-26
(in millions)
Actual as of
6/30/2024
Adopted
Budget
Adjusted
Budget
Proposed
Budget
Percent
Change
from FY
2024-25
Adopted
Taxes
Property Tax $56.4 $50.2 $57.1 $56.9 13.3%
Sales Tax 23.2 23.2 21.2 21.2 -8.6%
Transient Occupancy Tax 14.9 14.5 14.8 15.3 5.4%
Other Tax 7.1 6.7 7.7 9.0 34.6%
Franchise Fees 5.3 6.2 6.2 6.2 0.0%
License and Permits
Building 8.3 9.0 8.0 5.7 -36.7%
Fire 3.8 2.3 2.9 2.7 15.7%
Public Works 1.6 1.8 2.7 2.3 25.7%
Other 0.2 0.0 0.0 0.1 700.0%
Fines & Forfeitures 0.5 0.9 0.9 0.9 0.1%
Intergovernmental 6.5 2.7 4.9 2.9 10.7%
Charges for Services
Planning 0.7 0.4 0.4 0.8 86.5%
Fire 4.8 3.7 3.9 3.3 -9.5%
Parks & Recreation 4.2 3.4 3.4 3.5 2.7%
Police 1.2 1.1 1.1 1.0 -8.6%
Other* 0.1 0.0 0.0 0.0 4.9%
Inter-Fund Admin Charge 2.0 2.0 2.0 2.0 0.0%
Use of Money & Property 7.1 4.5 5.7 5.1 13.5%
Other Revenues 0.3 0.3 0.3 0.3 0.1%
Transfers In 6.3 1.7 2.3 1.5 -10.1%
PO/CIP Rollover 10.5
Measure W 0.0 3.0 0.0 0.0 -100.0%
TOTAL REVENUES $154.6 $137.4 $156.0 $140.5 2.2%
*Revenue appears as 0 due to rounding.
Property Tax remains the City’s largest revenue source, projected at $56.9 million in FY 2025-
26. Over the past five years, property tax revenues grew at an average annual rate of 6%, fueled
by a strong economy and significant development activity. This growth is reflected in the assessed
value of properties in South San Francisco, which rose by 12% in 2023 and 9% in 2024.
However, in 2025, assessed value growth slowed sharply to just 2.23%. As a result, staff have
projected only a modest increase in property tax revenue over the current year’s adjusted budget.
While the growth rate is lower, staff have updated the forecasting methodology to use the adjusted
budget as the baseline, rather than the prior year’s base budget as was previously done. Since the
adjusted budget is significantly higher than the base, this change results in a notable increase over
the prior base budget.
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Growth in this revenue stream is further constrained by the increasing risk of Property Tax In-Lieu
of Vehicle License Fee (VLF) shortfalls, driven by the declining number of non-basic aid schools.
The State is expected to consider this claim for appropriation as part of its FY 2025-26 budget.
However, Governor Newsom’s proposed FY 2025-26 budget does not include any appropriations
to cover the FY 2023-24 shortfall, of which the City’s share is $4.8 million. Although the State
has consistently appropriated funding for San Mateo County’s VLF shortfalls since FY 2019-20,
these funds are now at significant risk due to mounting State budget pressures and the sharp
increase in the shortfall over the past three years. The City has submitted a letter to its state
representatives to address this matter. To be conservative, staff have not included the state backfill
for the FY 2023-24 VLF shortfall in the proposed budget but will continue to monitor and update
as needed.
Despite these issues, property tax revenues are projected to increase by $6.7 million, a 13.3 percent
increase over the FY 2024-25 adopted budget due to continued increase in the City’s share, as a
taxing entity, of property tax residual from the former Redevelopment Agency (RDA). Also, if the
state backfills the FY 2023-24 VLF shortfall, the City’s projected property tax revenue will
increase by $4.8M.
Sales Tax revenues in the City of South San Francisco have experienced fluctuations due to
various economic factors. Since the adoption of the FY 2024-25 budget, the City’s sales tax
consultant has revised projections downward in response to factors such as rising unemployment,
a shift in consumer spending from taxable goods to non-taxable services, and increasing costs in
areas like housing, insurance, groceries, energy, healthcare, and education. At the end of 2024,
only 6 of California’s 58 counties reported positive sales tax growth, while 26 counties experienced
year-over-year declines of at least 4% in the local 1% Bradley-Burns revenue. Statewide, sales tax
revenues have declined in seven consecutive quarters, with an eighth projected.
Consumer sentiment remains one of the most significant drivers of sales tax revenue. Amid
ongoing uncertainty related to tariffs and persistent inflationary pressures, consumer spending has
slowed, contributing to the deceleration in sales tax growth and overall revenue performance.
Sales tax revenues in FY 2025-26 are expected to decrease by $2 million, or 8.6 percent, compared
to the FY 2024-25 adopted budget. As discussed during the FY 2024-25 Mid-Year budget meeting
in February 2025. The City’s sales tax revenue is particularly sensitive to gas prices as gasoline
sales tax makes up a significant portion of the City’s overall sales tax revenue, so any major
changes in gas prices can directly affect our revenue performance. At mid-year, California was
experiencing lower gasoline prices. With the planned closures of refineries in the East Bay, the
impact on gasoline price remains to be seen. To reflect this change, and per the City’s sales tax
consultant, a FY 2024-25 mid-year adjustment was made to revise the sales tax forecast downward.
For FY 2025-26, projected sales tax revenue is $21.2 million. While this is $2.0 million lower than
the FY 2024-25 adopted budget, it is slightly above the revised mid-year estimate. This projection
aligns with the updated trend and reflects a stabilization in revenue following the reclassification.
Transient Occupancy Tax (TOT) revenue has experienced a strong recovery since the pandemic,
reflecting renewed domestic travel activity. However, recent declines in international tourism raise
concerns, and the full extent of their impact on TOT revenue remains to be seen. In FY 2024 -25,
hotel occupancy reached 66 percent. For FY 2025-26, we project a 68% occupancy rate. Based on
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this assumption, staff expects TOT revenue to increase by $0.8 million, representing a 5.4%
increase over last year’s adopted budget.
Other Tax revenues, comprised primarily of the Business License Tax and Commercial Parking
Tax, continue the upward trend projected at mid-year. At that time, Business License Tax revenue
was revised upward by $1 million. This additional increase results in a total of $2 million above
the prior year’s adopted budget, driven by the voter-approved tax update. Staff have increased
Commercial Parking Tax revenue to match current year actuals.
Franchise Fee revenues are expected to remain flat in FY 2025-26 compared to FY 2024-25. The
total includes a one-time electronic billboard revenue of $1.4 million originally budgeted for FY
2024-25. However, due to delays in receiving the funds, this amount is being carried forward into
FY 2025-26. The revenue is not anticipated to recur in future years and should be treated as a one-
time adjustment rather than ongoing income.
Licenses and Permit revenues remained relatively stable prior to FY 2022-23, supported by
strong construction activity and robust economic development throughout the City. The City saw
a surge in permits issued in FY 2022-23, when developers rushed to submit applications ahead of
anticipated building code changes and fee increases, causing a temporary spike.
However, rising interest rates driven by persistent inflation beginning in mid-2022, combined with
increased market uncertainty and regional bank failures, created a more challenging environment
for developers in FY 2023-24. These conditions contributed to a slowdown in project activity.
Despite these challenges, staff remains cautiously optimistic about future development but
continues to take a conservative approach to revenue projection. Permit revenues for FY 2024-25
were adopted at $13.2 million and later adjusted upward to $13.6 million at mid-year. However,
for FY 2025-26, permit revenues are projected to decline further by $2.5 million, bringing the total
to $10.7 million. This represents a significant decrease by the Building Division, partially offset
by increases from the Fire and Public Works departments. The overall decline reflects continued
softness in the development market, driven by persistently high interest rates and ongoing
economic uncertainty.
Intergovernmental revenue primarily consists of grants and includes mutual aid cost recovery for
the Fire Department’s response to disasters outside the City. This revenue has been increased by
$400 thousand to align with the four-year historical trend. However, the traffic signal maintenance
fee, previously budgeted at $275 thousand, will no longer be recorded as intergovernmental
revenue and has been reduced to $0. The FY 2025-26 budget also includes the continuation of two
multi-year library grants totaling $232 thousand. As a result, the net projected increase
in intergovernmental revenue of $285 thousand, or 10.7%, when compared to the FY
2024-25 adopted budget.
Charges for Services for FY 2025-26, staff expect to see variable changes across different
departments. Economic and Community Development (ECD) and Parks and Recreation (P&R)
are projected to have increases of 86% and 3% relatively. ECD’s increase is due to the expectation
that more projects will start over next year. However, the City anticipates lower revenue from the
Fire Department for their participation in the ambulance program of about $350 thousand, a 9%
decrease from the FY 2024-25 adopted budget.
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Use Money & Property is budgeted at the same level as FY 2024–25. The primary source of
revenue for this category is investment in the U.S. Treasuries and high-quality agency bonds, as
required by statute. Given recent volatility in U.S. Treasury yields and other fixed-income markets,
staff recommends maintaining a flat projection for now, but will monitor the market condition and
provide an update during the mid-year review.
Transfers In are budgeted with a $168 thousand reduction from FY 2024–25. This is due to the
elimination of a budgeted transfer from the Developer Fee Fund from the prior year but the
inclusion of two transfers from the Special Revenue Fund: $60 thousand from Police Evidence
Revolving account to offset Police recruiting expenses and $72 thousand from the Opioid
settlement to partially offset the cost of the Crisis Intervention Specialist.
2. PROPOSED FY 2025-26 GENERAL FUND EXPENDITURES
The following tables, Table 5 and Table 6, show the proposed FY 2024-25 General Fund
expenditure budgets (in millions).
Table 5. General Fund Operating Expenditure Budget by Category (in millions)
EXPENDITURES FY 2023-24 FY 2024-25 FY 2025-26
(in millions)
Actual as of
6/30/2024
Adopted
Budget
Adjusted
Budget
Proposed
Budget
Percent
Change
from FY
2024-25
Adopted
Salary and Benefits $106.1 $113.4 $114.4 $117.01 3.2%
Supplies and Services 23.0 22.1 34.3 25.0 13.1%
Capital Outlay 0.2 0.0 0.7 0.0 0.0%
Debt Service 0.0 0.0 0.0 0.0 0.0%
Interdepartmental Charges 10.2 9.5 9.5 10.2 7.0%
Transfers - Operation 0.5 0.5 0.5 0.5 0.0%
Transfers - Capital
Transfers 0.7 0.0 3.4 0.0 0.0%
TOTAL EXPENDITURES $140.8 $145.4 $162.8 $152.7 5.0%
1.2025-26 Salary and Benefits budget assumes $8.0 million in vacancy savings.
16
City of South San Francisco Page 10 of 15
Table 6. General Fund Operating Expenditure Budget by Department (in million)
EXPENDITURES FY 2023-24 FY 2024-25 FY 2025-26
(in millions)
Actual as of
6/30/2024
Adopted
Budget
Adjusted
Budget
Proposed
Budget
Percent
Change from
FY 2024-25
Adopted
City Council $0.3 $0.3 $0.3 $0.3 -14.5%1
City Clerk 1.0 1.3 1.4 1.4 6.6%
City Treasurer 0.2 0.2 0.2 0.2 26.7%1
City Attorney 1.7 1.5 2.3 1.5 4.0%
City Manager 3.4 3.9 4.3 4.8 24.3%
Finance 3.3 3.9 4.2 4.3 11.1%
Non expense/Dept 2.0 1.9 2.2 1.9 0.0%
Economic & Comm Develop 11.1 8.9 12.0 9.6 8.1%
Fire 36.7 36.4 38.1 40.2 10.4%
Police 37.1 38.2 38.4 42.3 10.8%
Public Works 10.1 11.1 14.4 12.6 13.4%
Library 7.7 8.9 9.1 9.3 5.5%
Parks and Recreation 22.9 26.3 29.6 29.1 10.4%
CIP 0.7 0.0 3.4 0.0 0.0%
Non expense/Dept 2.0 1.9 2.2 1.9 0.0%
Salary Savings 0.0 0.0 0.0 (8.0) -
TOTAL EXPENDITURES $140.8 $145.4 $162.8 $152.7 5.0%
Information Technology2 4.2 4.3 4.6 4.7 10.2%
1. Changes are due primarily to adjustments in optional City medical
coverage.
2. Non-General Fund: budgeted as internal service fund in Fund 785
17
City of South San Francisco Page 11 of 15
FY 2025-26 Expenditure Projection
Attachments 2 and 3 to this report provide a detailed explanation of each department’s requests,
along with the proposed funding budget breakdown of payroll, supplies and services.
The following provides additional information for each of the major expenditure categories.
Payroll:
• As noted above, the primary drivers of payroll costs are the 3% assumed COLA salary
increase as well as the increase in the UAL and health benefit costs. While payroll
request details for all funds are provided in Attachment 2, the following are the most
impactful requests for the General Fund.
o Police
▪ Change: New Position Crisis intervention Specialist
▪ Cost: $230,000
▪ Source: Opioid settlement for $70,000, the remainder General Fund.
o Parks and Recreation.
▪ Change: Cultural Arts Positions
▪ Cost: $21,000
▪ Source: Paid through the Arts-In-Lieu Fee no General Fund Impact.
▪ Change: Aquatics Positions
▪ Cost: $520,000
▪ Source: General Fund
▪ Change: Senior Program
▪ Cost: $74,000
▪ Source: General Fund
▪ Change: Parks Program
▪ Savings: $(12,562)
▪ Source: General Fund
Supplies and Services:
• The proposed budget includes all departmental decision packages (new requests) that
have been reviewed by the City Manager and are to be submitted for City Council’s
approval. These requests are detailed in Attachment 3 for all funds. However, overall,
there are $1.3 million in new requests for the General Fund. In particular:
o $560 thousand these requests are for contractors who support the City’s permit
and fee process, which means these costs are directly offset by increased
projected revenue.
o $100 thousand are related to the increased operating costs for the new pool.
o $300 thousand from the City Manager’s office.
▪ $200 thousand request is for contract service for Abandoned/Derelict
Vessel Removal/Destruction at the Marina.
▪ $100 thousand for the biennial community survey.
18
City of South San Francisco Page 12 of 15
Interdepartmental Charges:
• Interdepartmental Charges are expenses that are accounted for in the General Fund (and
other funds as necessary) and then transferred out to support internal services functions.
The largest internal service fund is the Information Technology (IT) Department. In
effect, the cost of providing IT services is calculated and then “charged” to various City
funds, with the General Fund bearing the majority of the charge.
3. OTHER FUNDS
There are other funds that the City Council oversees beyond the General Fund. The new requests
from other funds can be found in Attachment 3. Many of the final budgets for these funds are
contingent upon the adoption of the Capital Improvement Program (CIP) by City Council. The
numbers may change based upon Council’s action related to the FY 2025-26 CIP program.
As noted in the Citywide section, the City’s Enterprise Funds are also experiencing pressure from
rising costs. The three Enterprise Funds—Sewer, Parking District, and Stormwater, are
summarized below in Table 7. Each fund follows a distinct process for adjusting revenues;
however, due to statutory limitations in increasing Stormwater funding, this fund is currently
heavily subsidized with transfers from the General Fund and Gas Tax revenues.
Table 7. Enterprise Funds Operating Budgets
Enterprise Sewer Parking Storm
Revenue $36.1 $1.0 $0.5
Transfers In - - $0.9
Payroll ($12.1) ($0.5) ($1.5)
Supplies & Services ($13.2) ($0.8) ($0.3)
Capital Purchases ($1.1) - -
Debt Service ($5.5) - -
Inter Dept ($2.0) ($0.2) ($0.1)
Transfers Out - - -
Surplus/ (Deficit) $2.2 ($0.4) ($0.5)
4. OTHER REQUESTS NOT INCLUDED
Due to ongoing fiscal pressures, departments have opted not to include the following items in this
year’s request. Some of these items were previously requested as one-time needs or are directly
tied to Council priorities. While they are not part of the proposed budget, the requesting
departments wish to bring them to the Sub-committee’s attention for transparency and potential
discussion.
• Economic and Community Development
o Bio Conference 2026 – $100 thousand; opt for a different venue
o Citywide Holiday Decorations – $170 thousand
o Promotores Social Service Navigators – $165 thousand.
19
City of South San Francisco Page 13 of 15
• Public Works
o To effectuate the Council Priority of Traffic Management and Safety, a Traffic
Engineer would provide the necessary expertise and leadership to implement
effective solutions and will have authority over critical traffic control functions,
including traffic signal timing implementation, optimization, and coordination and
smart corridor traffic management – $325 thousand.
o To effectuate the Council Priority of Quality of Life / Implement Clean SSF,
addition of four (4) PW Maintenance Workers are necessary to perform clean team
operations to proactively address graffiti removal, illegal dumping, city property
damage, etc. Additional personnel will enhance the City's ability to maintain clean
and safe public spaces - $600 thousand.
5. RESERVES
The City’s financial reserve funds are expected to be approximately $56.2 million. A breakdown
is shown below:
Table 8. General Fund Reserves
The General Reserve, which represents 20 percent of the City’s annual revenue budget, excluding
transfers in (General Fund), follows the best practices guidelines from the Government Finance
Officers’ Association (GFOA).
The Infrastructure Reserve is largely comprised of General Fund surpluses that were set aside
over previous years in anticipation of the City’s future infrastructure projects. The value shown is
the unencumbered monies available that have not yet been designated toward a project. It should
be noted that within the proposed FY 2025-26 Capital Improvement Program, a net $1.9 million
of direct capital project funding is requested from the Infrastructure Reserves, which is reflected
in the ending balance above.
The CalPERS Stabilization Reserve was established through two separate Council actions in FY
2015-16 and FY 2017-18 totaling $5.5 million. Finance took advantage of the higher interest
environment and set up a separate investment account with the City’s investment manager,
Chandler, in December 2022 that yields a higher rate of return. As of April 30, 2025, the balance
of the account has grown to $6.2 million.
The Available General Fund Balance is the available fund balance remaining in the General Fund
(as shown in the table in the summary section of this report) that has not been assigned for any
particular purpose. This balance will change depending on the extent to which expenditures may
exceed revenues (deficit) in FY 2025-26. It is important to note that the available fund balance
also acts as a buffer allowing for the natural ebb and flow within the General Fund that occurs
Estimated Ending Financial Reserve
for FY 2025-26 (in million)
General Reserve $27.8
Infrastructure Reserve* 5.4
CalPERS Stabilization Reserve 6.2
Available GF Balance* 16.8
Total $56.2
20
City of South San Francisco Page 14 of 15
during the year as a result of the mismatch between when revenues are received, and expenditures
are incurred.
Although placed in different categories, the City Council, by majority vote, is allowed to use the
above reserve funds as necessary.
FISCAL IMPACT
For Fiscal Year 2025-26, the City’s General Fund is projected to have operating revenues of $140.5
million and use of General Fund Reserve of $12.2 million for a total of available revenues and
resources of $152.7 million. Expenditures net of any carryover purchase orders are projected to be
$152.7 million, resulting in a balanced budget.
RELATIONSHIP TO STRATEGIC PLAN
The budget is the City’s spending plan that supports Priority Area 3, Financial Stability.
CONCLUSION
The General Fund continues to experience a structural deficit, as revenue growth remains
insufficient to keep pace with rising expenditures. Key cost drivers—including personnel
expenses, healthcare costs, and inflation—are escalating at a faster rate than incoming revenues.
Property tax revenue continues to increase but are anticipated to do so at a slower pace than in
previous years. In light of increasing fiscal pressure from the State’s own budget deficit, staff has
adopted a more prudent approach by assuming that the State will not backfill the FY 2023-24
Property Tax in-lieu of Vehicle License Fees (VLF) shortfall. Should this funding materialize, it
could reduce the FY 2025-26 budget deficit by approximately $5 million. Staff will continue to
monitor this and provide updates as new information becomes available.
Revenue sources such as sales taxes and TOT are subject to ongoing uncertainty due to tariffs
and inflation. Additionally, permit fee revenues from developers have slowed, influenced by
high interest rates and trade-related pressures. To help balance the long-term structural deficit,
the City is evaluating potential revenue enhancement strategies. The proposed budget is
structured to maintain current service levels, and no significant cuts are proposed at this time.
A key driver of rising expenditures in the FY 2025–26 Proposed Budget is the continued growth
in personnel related costs. Since labor negotiations have not yet been finalized, the proposed
budget assumes a 3% cost-of-living adjustment (COLA); any changes to this assumption will
impact the projected deficit. On the other hand, since the City has experienced higher-than usual
staff turnover, staff has included a 7% vacancy assumption, which is approximately $8 million in
personnel costs to account for the anticipated salary savings. Staff will continue to update the
budget as more information becomes available.
This budget is prepared with a strategic effort to align the City’s service levels with available
resources, ensuring fiscal sustainability while minimizing the accumulation of ongoing
obligations in a challenging revenue environment.
Staff welcomes feedback from the Budget Standing Committee related to the information
contained herein.
21
City of South San Francisco Page 15 of 15
Attachments:
Att 1 – General Fund Revenue and Expenditure Reports
Att 2 - New Request – Positions – GF and Other Funds
Att 3 – New Request – Supplies and Services – GF and Other Funds
Att 4 – Department Revenue Adjustments – GF and Other Funds
22
General Fund 2025-26
Proposed Budget
Attachment 1
REVENUES
(in millions)
Actual as of
6/30/2024
Adopted
Budget
Adjusted
Budget
Proposed
Budget
Percent
Change from
FY 2024-25
Adopted
Taxes
Property Tax $56.4 $50.2 $57.1 $56.9 13.3%
Sales Tax 23.2 23.2 21.2 21.2 -8.6%
Transient Occupancy Tax 14.9 14.5 14.8 15.3 5.4%
Other Tax 7.1 6.7 7.7 9.0 34.6%
Franchise Fees 5.3 6.2 6.2 6.2 0.0%
License and Permits
Building 8.3 9.0 8.0 5.7 -36.7%
Fire 3.8 2.3 2.9 2.7 15.7%
Public Works 1.6 1.8 2.7 2.3 25.7%
Other 0.2 0.0 0.0 0.1 700.0%
Fines & Forfeitures 0.5 0.9 0.9 0.9 0.1%
Intergovernmental 6.5 2.7 4.9 2.9 10.7%
Charges for Services
Planning 0.7 0.4 0.4 0.8 86.5%
Fire 4.8 3.7 3.9 3.3 -9.5%
Parks & Recreation 4.2 3.4 3.4 3.5 2.7%
Police 1.2 1.1 1.1 1.0 -8.6%
Other*0.1 0.0 0.0 0.0 4.9%
Inter-Fund Admin Charge 2.0 2.0 2.0 2.0 0.0%
Use of Money & Property 7.1 4.5 5.7 5.1 13.5%
Other Revenues 0.3 0.3 0.3 0.3 0.1%
Transfers In 6.3 1.7 2.3 1.5 -10.1%
PO/CIP Rollover 10.5
Measure W 0.0 3.0 0.0 0.0 -100.0%
TOTAL REVENUES $154.6 $137.4 $156.0 $140.5 2.2%
*Revenue appears as 0 due to rounding.
FY 2023-24 FY 2025-26FY 2024-25
23
General Fund 2025-26
Proposed Budget
Attachment 1
EXPENDITURES
(in millions)
Actual as of
6/30/2024
Adopted
Budget
Adjusted
Budget
Proposed
Budget
Percent
Change from
FY 2024-25
Adopted
City Council $0.3 $0.3 $0.3 $0.3 -14.5%
City Clerk 1.0 1.3 1.4 1.4 6.6%
City Treasurer 0.2 0.2 0.2 0.2 26.7%
City Attorney 1.7 1.5 2.3 1.5 4.0%
City Manager 3.4 3.9 4.3 4.8 24.3%
Finance 3.3 3.9 4.2 4.3 11.1%
Human Resources 2.6 2.7 3.0 3.0 12.5%
Economic & Comm Develop 11.1 8.9 12.0 9.6 8.1%
Fire 36.7 36.4 38.1 40.2 10.4%
Police 37.1 38.2 38.4 42.3 10.8%
Public Works 10.1 11.1 14.4 12.6 13.4%
Library 7.7 8.9 9.1 9.3 5.5%
Parks and Recreation 22.9 26.3 29.6 29.1 10.4%
Non expense/Dept 2.0 1.9 2.2 1.9 0.0%
Non Dept Salary Savings 0.0 0.0 0.0 (8.0)-
CIP 0.7 0.0 3.4 0.0 0.0%
TOTAL EXPENDITURES $140.8 $145.4 $162.8 $152.7 5.0%
Information Technology*4.2 4.3 4.6 4.7 10.2%
FY 2023-24
* Non-General Fund: budgeted as internal service fund in Fund 785
FY 2025-26FY 2024-25
24
Position Requests Attachment 2
Position FTE
GF -
FY25-26
Sewer - FY25-
26 &
Ongoing
Parking -
FY25-26 &
Ongoing
Other
FY25-26 &
Ongoing GF - Ongoing
Total -
Ongoing
City Manager
Administrative Assistant II¹1.00 - - - - 150,272 150,272
Administrative Assistant I -1.00 - - - - (142,697) (142,697)
Total Change - City Manager 0.00 7,576 7,576
Econ & Com Dev
Promotores -1.00 (91,520) - - - (91,520) (91,520)
Total Change - Econ & Com Dev -1.00 (91,520) - - - (91,520) (91,520)
Fire
Safety Inspector I¹1.00 - - - - 242,461 242,461
Safety Inspector I - Hourly -1.00 - - - - (230,906) (230,906)
Overtime Mutual Aid 0.00 500,000 - - - 500,000 500,000
Total Change - Fire 0.00 500,000 - - - 511,555 511,555
HR
Intern-Hourly 0.17 7,200 - - - - -
Total Change - HR 0.17 7,200 - - - - -
Library
Library Assistant I - Hourly¹2.00 - - - - 142,173 142,173
Library Page - Hourly -2.00 - - - - (99,901) (99,901)
Total Change - Library 0.00 - - - - 42,271 42,271
Parks and Rec
Cultural Arts (Art-In-Lieu Fee)0.40 - - - 20,929 - 20,929
Aquatics2 8.54 519,404 - - - 1,038,807 1,038,807
Senior Program 1.13 74,244 - - - 74,244 74,244
Parks Program 0.00 (12,562) - - - (12,562) (12,562)
Total Change - Parks and Rec 10.08 581,085 - - 20,929 1,100,489 1,121,418
Police
Crisis Intervention Specialist3 1.00 157,630 - - - 227,630 227,630
Total Change - Police 1.00 157,630 - - - 227,630 227,630
Public Works -
Program Manager 1.00 51,343 198,988 51,343 - 51,343 301,673
Management Analyst II -1.00 (49,969) (199,877) - - (49,969) (249,847)
Management Analyst II 1.00 199,877 49,969 - - 199,877 249,847
Management Analyst I -1.00 (227,229) - - - (227,229) (227,229)
Total Change - Public Works 0.00 (25,979) 49,080 51,343 - (25,979) 74,444
IT
Overtime and Standby Pay (IT ISF)0.00 - - - 40,000 - 40,000
Total Change - IT 0.00 - - - 40,000 - 40,000
Total Change - City Wide 10.25 1,128,416$ 49,080$ 51,343$ 60,929$ 1,772,021$ 2,057,665$
1. Salary Savings are used to fund positions without a cost in the first year.
2. Ongoing is assumed at 2x the current partial year ask as an estimate, but will be updated in the next budget cycle.
3. This position is proposed to be funded with $70,000 in Opioid Settlement funds for FY25-26
25
Position Requests Attachment 2
Parks Positions Detail FTE
GF -
FY25-26
Sewer - FY25-
26 &
Ongoing
Parking -
FY25-26 &
Ongoing
Other
FY25-26 &
Ongoing GF - Ongoing
Total -
Ongoing
Cultural Arts (Art-In-Lieu Fee)
Recreation Leader II - Hourly 0.25 - - - 12,677 - 12,677
Recreation Leader III - Hourly 0.15 - - - 8,253 - 8,253
Total Change - Cultural Arts 0.40 - - - 20,929 - 20,929
Aquatics
Recreation & Community Services
Program Coord 0.27 25,989 - - - 51,977 51,977
Recreation Leader II - Hourly 0.83 41,931 - - - 83,862 83,862
Recreation Leader III - Hourly 5.29 291,192 - - - 582,385 582,385
Recreation Leader IV - Hourly 1.65 100,726 - - - 201,451 201,451
Building Maintenance Custodian 0.50 59,566 - - - 119,132 119,132
Total Change - Aquatics 8.54 519,404 - - - 1,038,807 1,038,807
Senior Program
Recreation & Community Services
Prog Coor - Hourly 0.25 23,256 - - - 23,256 23,256
Recreation Leader III - Hourly 0.50 27,508 - - - 27,508 27,508
Recreation Leader IV - Hourly 0.38 23,479 - - - 23,479 23,479
Total Change - Senior Program 1.13 74,244 - - - 74,244 74,244
Parks Program
Miscellaneous Hourly 0.50 29,801 - - - 29,801 29,801
Park Maintenance Worker - Hourly -0.50 (42,363) - - - (42,363) (42,363)
Total Change - Parks Program 0.00 (12,562) - - - (12,562) (12,562)
Total Change - Parks & Rec 10.08 581,085$ -$ -$ 20,929$ 1,100,489$ 1,121,418$
26
Supply and Service Requests Attachment 3
Funding Source
Request GF Sewer Parking Other Total
City Attorney
Contract Increase 65,000 - - - 65,000
Request Total - City Attorney 65,000 - - - 65,000
City Manager's Office -
Abandoned/Derelict Vessel Removal/Destruction 200,000 - - 200,000
Biennial Community Survey 100,000 - - 100,000
Request Total - City Manager's Office 300,000 - - - 300,000
Finance
Property Tax Consultant 20,000 - - - 20,000
Request Total - Finance 20,000 - - - 20,000
Human Resources
Contract for Investigation and Compensation 50,000 - - - 50,000
Recruitment Costs 50,000 - - - 50,000
Request Total - Human Resources 100,000 - - - 100,000
Econ & Comm Dev
Construction Coordination Committee 75,000 - - - 75,000
TDM & Trip Cap Monitoring and Compliance 40,000 - - - 40,000
Retail Strategies for ECR & Commercial Centers 30,000 - - - 30,000
Building Permit Plan Check (136,828) - - - (136,828)
JP Morgan Investment Conference 50,000 - - - 50,000
Request Total - Econ & Comm Dev 58,172 - - - 58,172
Fire
Plan Review Contract Services 400,000 - - - 400,000
Equipment and Supplies 58,811 - - - 58,811
Replace Aging Vehicle Extrication Equipment 41,287 - - - 41,287
Equipment and Lodging for Mutual Aid 50,000 - - - 50,000
Request Total - Fire 550,098 - - - 550,098
Police
Increased Recruitment Support 60,000 - - - 60,000
Request Total - Police 60,000 - - - 60,000
27
Supply and Service Requests Attachment 3
Funding Source
Request GF Sewer Parking Other Total
Public Works
Thermoplastic Machine 20,000 - - - 20,000
Anaerobic Digestor - 750,000 - - 750,000
Uniforms (Sewer)- 64,000 - - 64,000
Uniforms (Stormwater)- -- 12,000 12,000
Uniforms (Garage)- -- 5,500 5,500
Essential Tools (Garage)- -- 45,000 45,000
Power-Washing Contract - -75,000 - 75,000
Licenses Plate Readers for Parking Enforcement - -140,000 - 140,000
Vehicles - 1,100,000 - - 1,100,000
Request Total - Public Works 20,000 1,914,000 215,000 62,500 2,211,500
Library
PLAN Network Service Increases 10,000 - - - 10,000
Youth Library Program Support 5,000 - - - 5,000
Children's Books 5,000 - - - 5,000
ESL Grant Expenses 24,754 - - - 24,754
Request Total - Library 44,754 - - - 44,754
Parks and Recreation
Pool Opening Services and Supplies 192,149 - - - 192,149
Building Maintenance 14,500 - - - 14,500
Vehicular Gates and Rollup Door Maintenance 20,000 - - - 20,000
Caltrans Plaza Airspace Lease 2,600 - - - 2,600
Sculpture for OP IIC location (Art In Lieu)- - - 75,000 75,000
Request Total - Parks and Recreation 229,249 - - 75,000 304,249
Information Technology
Computer Purchase (Equipment Replacement)- - - 100,000 100,000
EOC Video Wall Update (PEG Funds)- - - 300,000 300,000
Software (Development Software Fee)- - - 294,100 294,100
Software (IT ISF)- - - 142,000 142,000
Phone Service Update (IT ISF)- - - 124,334 124,334
Request Total - Information Technology - - - 960,434 960,434
Request Total - City Wide 1,447,272$ 1,914,000$ 215,000$ 1,097,934$ 4,674,206$
28
Revenue Adjustments Attachment 4
Fund
Request GF Sewer
Gen Plan Main
Fee Comm Linkage Aff Hou Trust Total - Ongoing
Econ & Comm Dev
General Plan Maintenance Fee - - 2,500,000 - - 2,500,000
Commercial Linkage Impact Fee - - - 1,500,000 - 1,500,000
Building Permit Fees (3,316,152) - - - - (3,316,152)
Planning Fees 350,000 - - - - 350,000
Miscellaneous Revenue - - - - 17,700 17,700
Total Change - Econ & Comm Dev (2,966,152) - 2,500,000 1,500,000 17,700 1,051,548
Fire
Fire Permits 360,000 - - - - 360,000
Ambulance Transport (350,000) - - - - (350,000)
Program Reimbursement-Mutual Aide 400,000 - - - - 400,000
Total Change - Fire 410,000 - - - - 410,000
IT
Celluar/Antennae Rental Revenue 100,000 - - - - 100,000
Total Change - IT 100,000 - - - - 100,000
Library
ESL Grant 132,822 - - - - 132,822
ACES Grant 99,350 - - - - 99,350
Total Change - Library 232,172 - - - - 232,172
Parks and Recreation
Aquatics Program 163,000 - - - - 163,000
Program Increases 600,000 - - - - 600,000
ELOP Program Budgeted Seperatly (622,178) - - - - (622,178)
Total Change - Parks and Recreation 140,822 - - - - 140,822
Police
Dispatch Services for Other Cities 22,722 - - - - 22,722
Alarm Registration Fee and Fines 70,500 - - - - 70,500
County Task Force Program Ended (114,630) - - - - (114,630)
OTS Grant (2,000) - - - - (2,000)
Total Change - Police (23,408) - - - - (23,408)
Public Works
Traffic Signal Maintenance Fee (275,000) - - - - (275,000)
Grading and Other PW Permits 469,000 - - - - 469,000
Sewer Operational Revenue - 1,741,995 - - - 1,741,995
Total Change - Public Works 194,000 1,741,995 - - - 1,935,995
Total Change - City Wide (1,912,566)$ 1,741,995$ 2,500,000$ 1,500,000$ 17,700$ 3,847,129$
29
FY 2025-26
Proposed Budget
Presentation to Budget Subcommittee
Karen Chang, Director of Finance
May 20, 2025 30
AGENDA
1 FY 2024-25 Financial Update
(Year End Update)
2 FY 2025-26 Proposed Budget
3 5-Year Projection
22
4 Q&A
31
GF Available Fund Balance Update
1FY 2024-25 Financial Update
3
Mid-Year Projected
FY 2024-25
Year End
Updated Projected
FY 2024-25
Year End
Year Start Available Fund
Balance $34.8 $34.8
Adjustments to Fund Balance¹7.8 7.8
Revenues (inflows)145.3 144.1
Expenditures (159.9)(157.6)
Change in Available Fund
Balance (6.9)(5.8)
Projected Year-End Fund
Balance $27.9 $29.0
1. Adjustment to fund balance is the release of encumbered funds back into the available reserve .
32
2025-26 Proposed
Budget
Citywide Impacts
2FY 2025-26 Proposed Budget
33
Citywide Expense Assumptions
•3% COLASalaries
•4% Blue Shield, Flat OthersHealthcare
•$3.7 million increaseUAL
•$2.2 million increaseUtilities
•2.7%General Inflation
2FY 2025-26 Proposed Budget
34
Fiscal
Challenge
•Revenues are not keeping
up with Expenditure
growth
2FY 2025-26 Proposed Budget
35
2025-26 Proposed
Budget
General Fund
36
FY 2025-26 Proposed Budget Summary
8
2FY 2025-26 Proposed Budget
FY2025-26
Proposed Budget
Revenues $140.5M
Expenses 152.7M
Net Surplus/(Deficit)($12.2M)
37
FY 2025-26 General Fund Proposed Budget -Revenues
▪FY 2025-26 Budgeted Revenues = $140.5 million
9
REVENUES FY 2023-24 FY2024-25 FY2025-26
(in millions)Actuals as of
6/30/2024
Adopted
Budget
Adjusted
Budget Proposed
Property Tax $56.4 $50.2 $57.1 $6.7M →$56.9M
Sales Tax 23.2 23.2 21.2 (2.0M)→21.2M
TOT 14.9 14.5 14.8 0.8M →15.3M
Other Taxes 7.1 6.7 7.7 2.3M →9.0M
Franchise Fees 5.3 6.2 6.2 0.0M →6.2M
Sub-Total $106.9 $100.8 $107.0
2FY 2025-26 Proposed Budget
38
FY 2025-26 General Fund Adjusted Budget -Revenues
▪FY 2025-26 Budgeted Revenues = $140.5 million
1
0
REVENUES FY 2023-
24
FY2024-25 FY2025-26
(in millions)Actuals as
of
6/30/2024
Adopted
Budget
Adjusted
Budget Proposed
License and Permits $14.0 $13.2 $13.6 -$2.4M →$10.7M
Intergovernmental 6.5 2.7 4.9 $0.3M →2.9M
Service Charges 11.0 8.5 8.7 $0.0M →8.5M
All Other Revenues*9.9 7.6 8.9 $0.6M →8.2M
Transfers In 6.3 4.7 2.3 -$3.2M →1.5M
PO/CIP Rollover 0.0 0.0 10.5 $0.0M →0.0M
TOTAL REVENUES $154.6 $137.4 $156.0 $3.1M →$140.5M
2FY 2025-26 Proposed Budget
* Includes Fines & Forfeitures, Inter-Fund Admin Charge, Use of Money & Property, and Other Revenues.39
FY 2025-26 General Fund Adjusted Budget -Expenditures
▪FY 2025-26 Budgeted Expenditures = $152.7 million
11
Expenditures FY
2023-24
FY2024-25 FY2025-26
(in millions)Actuals as
of
6/30/2024
Adopted
Budget
Adjusted
Budget Proposed
Salary and Benefits $106.1 $113.4 $114.4 $3.6M →$117.0M*
Supplies and Services 23.0 22.1 34.3 2.9M →25.0M
Capital Outlay 0.2 0.0 0.7 0.0M →0.0M
Interdepartmental Charges 10.2 9.5 9.5 0.7M →10.2M
Transfers -Operation 0.5 0.5 0.5 0.0M →0.5M
Transfers -Capital Transfers 0.7 0.0 3.4 0.0M →0.0M
TOTAL EXPENDITURE $140.8 $145.4 $162.8 $7.2M →$152.7M
2FY 2025-26 Proposed Budget
* Includes 7% vacancy savings, $8.0M 40
Department Requests
41
FY 2025-26 GF Proposed Dept Budget –Expenditures
13
EXPENDITURES FY2023-24 FY2024-25 FY2025-26
(in millions)Actuals as of
6/30/2024
Adopted
Budget
Adjusted
Budget
Proposed
Budget
% Change from
FY2024-25
Adopted
City Council $0.3 $0.3 $0.3 $0.3 -14.5%
City Clerk 1.0 1.3 1.4 1.4 6.6%
City Treasurer 0.2 0.2 0.2 0.2 26.7%
City Attorney 1.7 1.5 2.3 1.5 4.0%
City Manager 3.4 3.9 4.3 4.8 24.3%
Finance 3.3 3.9 4.2 4.3 11.1%
Human Resources 2.6 2.7 3.0 3.0 12.5%
Econ & Comm Develop 11.1 8.9 12.0 9.6 8.1%
Fire 36.7 36.4 38.1 40.2 10.4%
Police 37.1 38.2 38.4 42.3 10.8%
2FY 2025-26 Proposed Budget
42
FY 2025-26 GF Proposed Dept Budget –Supplies & Services
14
EXPENDITURES FY2023-24 FY2024-25 FY2025-26
(in millions)Actuals as of
6/30/2024
Adopted
Budget
Adjusted
Budget
Proposed
Budget
% Change from
FY2024-25
Adopted
Public Works $10.1 $11.1 $14.4 $12.6 13.4%
Library 7.7 8.9 9.1 9.3 5.5%
Parks and Recreation 22.9 26.3 29.6 29.1 10.4%
CIP 0.7 0.0 3.4 0.0 0.0%
Non-Dept Expense 2.0 1.9 2.2 1.9 0.0%
Salary Savings 0.0 0.0 0.0 -8.0 0.0%
TOTAL EXPENDITURES $140.8 $145.4 $162.8 $152.7 5.0%
Information Technology*4.2 4.3 4.6 4.7 10.2%
2FY 2025-26 Proposed Budget
*Non-General Fund: budgeted as internal service fund in Fund 785
43
GF –City Attorney
➢Expense –Services & Supplies $65,000
–Contract Increase $65,000
Net ($65,000)
15
2FY 2025-26 Proposed Budget
44
GF –City Manager’s Office
➢Expense –Services & Supplies $300,000
–Abandoned/Derelict Vessel $200,000
Removal/Destruction
–Biennial Community Survey $100,000
➢Expense –Personnel $0
–Upgrade position from AAI to AAII $7,576*
Net ($300,000)
*Salary savings will cover the cost in the first year.
16
2FY 2025-26 Proposed Budget
45
GF –Economic & Community Development
➢Revenue ($2,966,152)
–Building Permit Fees ($3,316,152)
–Planning Fees 350,000
17
2FY 2025-26 Proposed Budget
46
GF –Economic & Community Development
➢Expense –Services & Supplies $58,172
–Construction Coordination
Committee $75,000
–TDM & Trip Cap Monitoring
and Compliance 40,000
–Retail Strategies for ECR &
Commercial Centers 30,000
–Building Permit Plan Check (136,828)
–JP Morgan Investment Conference 50,000
18
2FY 2025-26 Proposed Budget
47
GF –Economic & Community Development
➢Expense –Personnel ($91,520)
–Switch PT Hourly position
to a Contract model-Promotores ($91,520)
Net ($2,932,804)
19
2FY 2025-26 Proposed Budget
48
GF –Finance
➢Expense –Services & Supplies $20,000
–Property Tax Consultant $20,000
Net ($20,000)
20
2FY 2025-26 Proposed Budget
49
GF –Fire
$410,000
$360,000
(350,000)
➢Revenue
–Fire Permits
–Ambulance Transport
–Program Reimbursement
for Mutual Aid 400,000
21
2FY 2025-26 Proposed Budget
50
GF –Fire
$550,098
$400,000
41,287
58,811
➢Expense – Services & Supplies
–Plan Review Contract Services
–Replace Aging Vehicle
Extrication Equipment
–Equipment & Supplies
–Equipment & Lodging for Mutual Aid 50,000
22
2FY 2025-26 Proposed Budget
51
GF –Fire
$500,000
$11,555*
➢Expense – Personnel
–Reclass Hourly Safety Inspector
to FT Position
–Overtime Mutual Aid 500,000
Net ($640,098)
*Salary savings will cover the cost in the first year.
23
2FY 2025-26 Proposed Budget
52
GF –Human Resources
➢Expense –Services & Supplies $100,000
–Contract for HR Investigation
& Compensation $50,000
–Recruitment Costs 50,000
➢Expense –Personnel $7,200
–Annual Hourly Summer Interns $7,200
Net ($107,200)
24
2FY 2025-26 Proposed Budget
53
GF –Library
➢Revenue $232,172
–ESL Grant $132,822
–ACES Grant 99,350
25
2FY 2025-26 Proposed Budget
54
GF –Library
➢Expense –Services & Supplies $44,754
–PLAN Network Service Increases $10,000
–Youth Library Program Support 5,000
–Children’s Books 5,000
–ESL Grant Expenses 24,754
➢Expense –Personnel $0
–Reclass Hourly Library Page
to Library Assistant $42,271*
Net $187,418
*Salary savings will cover the cost in the first year.26
2FY 2025-26 Proposed Budget
55
GF –Parks and Recreation
➢Revenue $140,822
–Aquatics Program $163,000
–Program Increases 600,000
–ELOP Program1 (622,178)
27
2FY 2025-26 Proposed Budget
1. The annual Expanded Learning Opportunities Program (ELOP) revenue, has been removed from the current budget. This item wil l be
presented separately to City Council for consideration, and is expected to be significantly higher. Expected revenues will be adjusted at that
time.56
GF –Parks and Recreation
➢Expense –Services & Supplies $229,249
–Pool Opening Supplies & Services1 $192,149
–Building Maintenance 14,500
–Vehicular Gates & Rollup
Door Maintenance 20,000
–Caltrans Plaza Airspace Lease 2,600
➢Expense –Personnel $581,086
–Aquatics Positions1 519,404
–Senior Program 74,244
–Parks Program (12,562)
Net ($669,513)
28
2FY 2025-26 Proposed Budget
1. Expenses are for a half year of operations at the new pool.57
GF –Police
➢Revenue ($23,408)
–Dispatch Services for Other Cities $22,722
–Alarm Registration Fee and Fines 70,500
–County Task Force Program Ended (114,630)
–OTS Grant (2,000)
29
2FY 2025-26 Proposed Budget
58
GF –Police
➢Expense –Services & Supplies $60,000
–Increased Recruitment Support $60,000
➢Expense –Personnel $157,630
–Crisis Intervention Specialist $227,630*
Net ($241,038)
*This position is proposed to be funded with $70,000 in Opioid Settlement funds for FY2025-26.
30
2FY 2025-26 Proposed Budget
59
GF –Public Works
➢Revenue $194,000
–Traffic Signal Maintenance Fee ($275,000)
–Grading and Other PW Permits 469,000
➢Expense –Services & Supplies $20,000
–Thermoplastic Machine $20,000
➢Expense –Personnel1 ($25,979)
–Upgrade MAII to Program Manager $1,373
–Upgrade MAI to MAII (27,352)
Net $148,021
31
2FY 2025-26 Proposed Budget
1. Additional adjustments for these positions in Non-GF,additional adjustments to funding source of some PW positions pending.
60
GF –IT
➢Revenue $100,000
–Cellular/Antennae Rental Revenue $100,000
Net $100,000
32
2FY 2025-26 Proposed Budget
61
Non-GF
➢Revenue $5,759,695
–ECD –General Plan
Maintenance Fee $2,500,000
–ECD –Commercial
Linkage Impact Fee 1,500,000
–ECD –Housing Trust Fund 17,700
–PW –Sewer Operational
Revenue 1,741,995
33
2FY 2025-26 Proposed Budget
62
Non-GF
➢Expense –Services & Supplies $2,266,500
–Parks & Rec –Sculpture for
OP IIC Location (Art In Lieu)$75,000
–PW –Anaerobic Digestor (Sewer)750,000
–PW –Uniforms
(Sewer, Stormwater, Garage)81,500
–PW –Essential Tools (Garage) 45,000
–PW –Power-Washing Contract
(Parking)75,000
–PW –License Plate Readers
(Parking)140,000
–PW –Vehicles (Sewer)1,100,000
34
2FY 2025-26 Proposed Budget
63
Non-GF
➢Expense –Personnel $121,352
–Parks & Rec –Cultural Arts Positions $20,929
–Upgrade MAII to Program Manager 50,454
–Upgrade MAI to MAII 49,969
Net $3,371,843
35
2FY 2025-26 Proposed Budget
64
Non-GF –IT
➢Expense –Services & Supplies $960,434
–IT –Computer Purchase
(Equipment Replacement)$100,000
–IT –EOC Video Wall Update
(PEG Funds)300,000
–IT –Software 436,100
–IT –Phone Service Update 124,334
➢Expense –Personnel $40,000
–IT –Overtime & Standby Pay $40,000
Net ($1,000,434)
36
2FY 2025-26 Proposed Budget
65
Discussion
➢Expense –Services & Supplies $435,000
–ECD –BIO Conference $100,000
–ECD –Citywide Holiday
Decorations 170,000
–ECD –Promotores Social
Services System Navigators 165,000
Net ($435,000)
37
2FY 2025-26 Proposed Budget
66
Discussion
➢Expense –Personnel $925,000
–PW –Traffic Management & Safety $325,000
1 FTE Traffic Engineer
–PW –Clean SSF 600,000
4 FTE PW Maint. Workers
Net ($925,000)
38
2FY 2025-26 Proposed Budget
67
Projected GF Available F/B (As of June 30, 2026)
3Reserve & Other Considerations
39
Available GF Fund Balance (FY 25)$29.0
FY 2025-26 Projected Deficit (12.2)
Available GF Ending Fund Balance (FY 26)$16.8
43% Reduction
68
Financial Analysis –5 Year Projection
35 Year Projection
40
Revenues &
Expenditures
(in thousands)
2025 Mid
Year
Budget
2025 YE
Projected
2026
Forecast
2027
Forecast
2028
Forecast
2029
Forecast
Total Revenue $152,267 $151,814 $140,488 $143,492 $146,720 $149,974
Total
Expenditures 159,255 157,565 152,668 161,188 166,354 172,683
Surplus/(Deficit)$ (6,988)$ (5,751)$(12,180)$(17,695)$(19,634)$(22,709)
69
Staff
Recommendation
Use $12.2M to balance GF budget
Incorporate feedback from Budget
Standing committee in preparation for the
City Council study session on June 11, 2025,
70
QUESTIONS?
4Q&A
4271
City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #:25-540 Agenda Date:5/20/2025
Version:1 Item #:3.
Report Regarding Options for Revenue Enhancement.(Rich Lee,Assistant City Manager &Wing-See Fox,
Urban Futures, Inc.)
BACKGROUND/DISCUSSION
The City's General Fund has a growing structural deficit for the foreseeable future due to expenditures growing
at a faster pace than revenues.The current estimate of the structural deficit for the upcoming fiscal year is $14
million.While South San Francisco voters approved an amendment to the City's business license tax in
November 2024,the projected additional revenue will not solely resolve the General Fund structural deficit.In
order to avoid service level reductions, the City will need to consider additional revenue enhancement.
Revenue Needs and Considerations
To assist the City in evaluating its revenue enhancement options,the City retained the consulting team of Urban
Futures,Inc.(UFI)and NBS.Over the past six weeks,the consulting team has worked with City staff to select
and analyze four potential revenue enhancement options based on these key considerations:
·Adequacy &Certainty.Sustainable revenue generation of at least $14 million with low volatility and
opportunity to grow with City operating expenses.
·Equity &Competitiveness.Appropriate distribution of tax burden and comparable tax rate to
surrounding communities.
·Transparency & Voter Approval. Clear structure and likelihood of voter approval.
·Simplicity. Ease of administration and implementation.
Summary of Revenue Enhancement Options
Based on analysis in the attached presentation,the key details for each of the four selected revenue
enhancement options are summarized below.The four options are presented in rank order based on how well
each satisfies the key considerations listed above.The rates presented for each option are the estimated rates
required to generate at least $14 million in the first year of implementation.
1.Transaction and Use Tax (TUT)
·0.50%increase to current rate (would increase total rate to 10.375%);would be at top-end of the
peninsula region.
·Some volatility due to fluctuations in the economy.
·Tax burden spread across residents, businesses, and visitors/commuters.
·High voter approval for TUTs in recent elections (80% for 2024 elections).
·Requires special legislation as South San Francisco is "capped" at 9.875%.
·Potential competition with County Transportation measure in Nov. 2026.
City of South San Francisco Printed on 5/16/2025Page 1 of 2
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File #:25-540 Agenda Date:5/20/2025
Version:1 Item #:3.
2.Parcel Tax
·Either $770 per parcel (flat amount)or $0.069 per square foot (rate);would be at top-end of the
peninsula region.
·Lowest volatility of all options and could include inflationary index.
·Can design with different tiered amounts or rates to improve equity.
·High voter approval for non-school parcel taxes (80%) in recent elections.
·Two-thirds voter approval required (66.7%).
3.Utility User Tax (UUT)
·7%rate on gas,electric,and telecommunications;would be highest in peninsula region except
San Francisco.
·Lower volatility than TUT or Real Property Transfer Tax.
·Can establish different rates for residential vs.commercial users but generally considered
regressive tax because utilities are essential services.
·Low voter approval rates for new UUTs (32%) in recent elections.
·Long-term revenue adequacy concerns due to changing utility usage patterns.
4.Real Property Transfer Tax (RPTT)
·$11 per $1,000 of sale price; would be at top-end of the peninsula region.
·Highest volatility of all options (annual revenue range from $6.2M to $26.5M).
·Can design with tiered rates to improve equity.
·Strong voter approval rates (70%) in recent elections (but limited number).
·Requires voter approval of city charter and tax measure.
RECOMMENDATION
UFI and NBS recommend the City continue evaluating both the Transaction and Use Tax (TUT)and Parcel Tax
revenue enhancement options due to their combination of adequacy (lower volatility),growth potential,and
strong voter acceptance.The next step in the City’s evaluation process would be to conduct community
outreach and opinion research on these two options.The TUT option will also require working with state
legislators on special legislation to authorize the additional rate before placing the measure on the November
2026 ballot.
FISCAL IMPACT
The cost of developing a ballot measure,including community outreach and opinion research,is estimated at
$100,000,which would be paid from the General Fund.If successful,the proposed revenue measure would
generate approximately $14 million annually for the General Fund.
ATTACHMENTS
1. Revenue Enhancement Analysis Presentation (May 20, 2025).
City of South San Francisco Printed on 5/16/2025Page 2 of 2
powered by Legistar™73
CITY OF SOUTHSAN FRANCISCO, CA
May 20, 2025
REVENUE ENHANCEMENT ANALYSIS - GENERAL FUND
74
Presentation Outline
Tax Revenue Options & Analysis - General Fund 3
Transaction and Use Tax (TUT)5
Parcel Tax 8
Utility User Tax (UUT)13
Real Property Transfer (RPT) Tax 16
Recommendations & Next Steps 19
2 75
Tax Revenue Options &
Analysis
General Fund
3 76
General Fund Revenue Taxes – 4 Basic Considerations
1.Adequacy & Certainty (volatility)
•Sustainably generates annual needed revenue.
•Not subject to significant variation (low volatility).
2.Equity (who bears tax burden) & Competitiveness (fairness)
•Fiscal burden appropriately spread.
•Proportionate to surrounding communities.
•Does not highly skew economic incentives.
3.Transparency & Voter Approval
•Easy to find information on the revenue/tax structure and understand how it operates.
•Likelihood of voter approval.
4.Simplicity
•Does not require multiple ballot measures (voter confusion and fatigue).
•Not highly burdensome, costly or complicated to administer (by city or payors).
4 77
Transaction and Use Tax (TUT)
Basics of a TUT
•Functionally similar to state Sales and Use Tax
(SUT) with important difference:
•SUT – Point of Sale
•Where did sales transaction occur?
•TUT – Point of Receipt/Delivery/Use
•Where did Buyer receive goods or put
them to use?
•Voter approval rates of new or increased TUTs for
general purposes (majority vote)
•80% for 2024 Election (63 of 79)
•73% for 2022 Election (30 of 41)
•74% for 2020 Election (65 of 88)
•State law requires supermajority approval by city
council (2/3 vote) to place TUT measure on ballot.
South San Francisco
State SUT & Local TUT Rate 9.875%Expiration
State Sales Tax 6.00%--
Bradley-Burns Local Share 1.25%*--
Local/Regional TUT (2.0% total cap)
San Mateo County Transportation
Authority (1989) Measure A 0.50%December
2033
San Mateo County Transit District
(2002) Measure A 0.50%--
San Mateo County TUT (2013)
Measure A 0.50%March 2043
South San Francisco TUT (2016)
Measure W 0.50%March 2046
Special Legislation
San Mateo County Transit District
Authority (2019) Measure W 0.50%June 2049
Peninsula Corridor JPA Retail
Transactions and Use Tax (2020)0.125%June 2051
5
*1.0% to City and 0.25% to County for transportation purposes. The City receives
95% and the County receives 5% of the 1.0% Bradley-Burns.
78
Transaction & Use Tax (TUT)
SSF Current Rate – “Capped Out” @ 9.875%
•State Sales & Use Tax 7.25%
•Countywide TUTs 1.50% + .625% special leg.
•SSF TUT (Measure W) 0.50%
•Total Rate in SSF 9.25% + .625% special leg.
Special Considerations
•Because SSF is currently “capped out,” state legislature
must authorize any additional TUT through special
legislation.
•County Transportation Authority considering placing
existing Measure A (1989) on November 2026 ballot for
extension and possible additional 0.25% (add-on would
require special legislation from state legislature).
Estimated Additional TUT Annual Revenue @ 0.50%
= $14.5 million growing to $19.2 million over ten years.
•Total New Rate = 10.375% (or 10.625% if County
measure with add-on is also approved).
City/Area Rate*
San Mateo Countywide 9.375%
Belmont 9.875%
Brisbane 9.875%
Burlingame 9.625%
Daly City 9.875%
East Palo Alto 9.875%
Pacifica 9.875%
Redwood City 9.875%
San Bruno 9.875%
San Mateo 9.625%
South San Francisco 9.875%
Santa Clara Countywide 9.125%
Campbell 9.875%
Los Gatos 9.25%
Milpitas 9.375%
San Jose 9.375%
San Francisco 8.625%
Alameda County 10.25 to 10.75%
Contra Costa County 9.25 to 10.25%
*Effective rates as of April 2025.
6 79
Transaction & Use Tax (TUT)
Pros:
Voter Approval. TUT measures in last three election cycles (2020, 2022, and 2024) have
high approval rates (74%, 73%, and 80% respectively) despite economic volatility due to
Covid-19 pandemic and recent high inflation.
Adequacy & Certainty. Estimated annual revenues at/above target with expected growth at
or above estimated inflation.
Equity. Tax burden spread across residents, businesses, and visitors (which includes
significant daytime workforce – 36,600 employees in 2022).
Cons:
o Certainty (volatility). Sales tax is more volatile (elastic) than UUT or parcel tax because
generally correlates with overall economic trends; but less volatile than property transfer tax
(see later slides).
o Competitiveness. Additional 0.50% TUT puts City at 10.375% total sales tax rate, which
would be higher than other cities on the peninsula side of the Bay Area.
o Special Considerations. Requires state legislature to enact special legislation authorizing
the additional TUT. County Transportation sales tax measure may also be on the November
2026 ballot and potentially add another 0.25% to the total rate.
7 80
Parcel Tax
Basics of Parcel Tax
•Non-ad valorem (non-value based) tax levied on parcels
of property.
•Methodology: Either a fixed/flat amount per-parcel or a
fixed rate depending on the size, use, or number of
units on the parcel.
•Can establish different amount/rate based on
property use but must be applied uniformly and
roughly proportional to demand for service.
•Can include inflationary index.
•Parcel taxes are considered special taxes requiring 2/3
voter approval (Govt. Code s. 50077). Majority approval
required if proposed by citizen initiative and 55%
approval if for school bonds (Prop. 39).
Statewide Facts - Parcel Tax
•Since 2010, largest percentage of all
approved parcel taxes (42%) are for
schools (251 of 600 measures).
•Since 2010, 67% of proposed city
parcel taxes were approved (118 of
176 measures).
•Because 2/3 vote required to approve
city parcel tax, almost all restrict tax
revenues to specified purpose; less
than 4% are for general municipal
funding.
•Most common methodology: flat rate
per parcel.
8 81
Parcel Tax
No Current Parcel Taxes in SSF
•SSF’s parcel tax initiative measure in 2022 for
early childhood education (Measure DD) failed to
get 50% vote ($2.50 per sf on commercial
parcels).
Parcel tax measures in Santa Clara & San Mateo
counties (2/3 vote)
•Since 2008, 20 non-school parcel taxes on ballot
with 80% approved (16 of 20).
•All for special purposes: libraries, roads,
police/fire, water, and open space.
•Since 2018, 40 school parcel taxes on ballot with
73% approved (29 of 40).
City/Area Rate/yr.*
San Mateo County
E. Palo Alto – Office Space $2.50 per sf
Portola Valley – Roads $950 parcel
Highlands CSA – Police & Fire $65 parcel
Atherton – Police $750 parcel**
Santa Clara County
Santa Clara - Libraries $34 parcel
Santa Clara – Open Space $24 parcel
San Jose – Libraries $30 parcel
North County - Libraries $76 parcel
County Library JPA $17 or $34 unit
Santa Clara Water Dist.$0.006 per sf
El Matador - Roads $350-$750 parcel
*Rates as of April 2025.
**Not renewed in 2017.
9 82
Parcel Tax
Estimated Annual Revenue – Alternative Structures
Flat Amount per Parcel
Parcel Type # of Parcels**Per Parcel Tax Annual Revenues (est.)
Single-Family Residential (SFR)*15,679 $ 770 $ 12,072,830
Multi-Family (three-family & larger)811 770 624,470
Commercial/Office/Industrial 1,706 770 1,313,620
Total $ 14,010,920
*Includes condos, townhomes, and duplexes.
**Excludes parcels with following land use: Water Co., Water Rights, Pipelines & Canals, Streets & Highways, and Farm Improvements.
***Tiered amounts based on average parcel size in each land use for “rough proportionality” between tax amount and use/demand on service.
Flat Amount per Parcel - Tiered by Land Use/Avg. Parcel Size
Parcel Type Avg. Parcel Size # of Parcels**Per Parcel Tax***Annual Revenues (est.)
Single-Family Residential (SFR)*4,350 15,679 $ 302 $ 4,735,058
Multi-Family (three-family & larger)8,370 811 581 471,284
Commercial/Office/Industrial 74,498 1,706 5,172 8,823,484
Total $ 14,029,825
10 83
Parcel Tax
Fixed Rate per Square Foot (sf) of Parcel Size ($0.069 per sf)
Parcel Type Avg. Parcel
Size
Annual Tax Avg.
Parcel
Total
Acreage**Annual Revenues (est.)
SFR1 - up to 5,000 sf 3,091 sf $ 214 683 $ 2,060,333
SFR2 - 5,000 to 10,000 sf 5,943 sf 412 787 2,374,016
SFR3 - 10,000 to 17,500 sf 11,872 sf 822 65 197,402
SFR4 - over 17,500 sf 25,933 sf 1,797 31 93,425
Multi-Family (three-family & larger)8,370 sf 580 156 470,300
Commercial/Office/Industrial 74,498 sf $ 5,161 4,639 8,805,069
Total $ 14,000,545
*Includes condos, townhomes, and duplexes.
**Excludes parcels with following land use: Water Co., Water Rights, Pipelines & Canals, Streets & Highways, and Farm Improvements.
Estimated Annual Revenue – Alternative Structures (cont.)
11 84
Parcel Tax
Pros:
Certainty. Parcel tax revenue not impacted by overall economic trends (non-ad valorem)
and inflationary index (if included) can help revenues keep pace with rising expenses.
Equity. Parcel tax provides some flexibility in designing tax structure (such as tiered
amounts or square foot rate) to help mitigate inequity/regressive nature of a flat amount
(but must retain “rough proportionality” to use/demand on services).
Voter Approval. Voter approval for non-school parcel taxes has been strong (80%).
Almost all have been designated for special purposes (public safety, roads, libraries, etc.).
Cons:
o Voter Approval. State law requires 2/3 approval by electorate.
o Competitiveness. Parcel tax ($770/parcel or $0.069 per sf) would be at the upper end of
parcel tax amounts in surrounding communities.
12 85
Utility User Tax (UUT)
Basics of UUT
•Percentage tax based on the consumption of utility
services: electricity, gas, water, sewer, refuse,
telecommunications, and cable television.
•Most cities apply UUT to electricity, gas, and
telecommunications; only half include water.
•Can establish different rate for residential and
commercial. Tax is collected by utility and transmitted
to city.
•Most of the cities with UUTs adopted the taxes prior to
1986 by vote of the city council.
•Since 2002, only 32% approval (28 of 87) for new or
increased UUT rates (statewide). Including advisory
measure may increase voter approval rate by 20%
(limited data).
Statewide Facts on UUTs*
•157 cities in CA have a UUT
•Rates range from 1% to 11%
•Statewide mean rate = 5.5%
•Statewide median = 5% (+- 2.07%)
•Total UUT revenue statewide is
approximately $1.8 billion*
•On average, UUT provides 15% of
General Fund revenue**
•All UUTs in California (except two) are
currently levied for general purposes
(majority vote)
*Data as of April 2025 – CaliforniaCityFinance.com.
**Data as of April 2021 – CaliforniaCityFinance.com.
13 86
Utility User Tax (UUT)
Estimated UUT Annual Revenue = $1.9 to $2.2 million
per 1.0% on gas, electric, & telecommunications
•@ 5.0% = $9.6 to $10.8 million
•@ 6.0% = $11.6 to $12.9 million
•@ 7.0% = $13.5 to $15.1 million
City projects 2.75% growth in Franchise Fee revenues
which provides a good “proxy” for UUT revenue growth,
but statewide trend for UUT revenues for gas is flat and
for telecommunications is negative.
UUT measures on the peninsula side of the Bay Area
since 2002:
•New UUT: approved Menlo Park (2006), rejected
Morgan Hill (2008), and Saratoga(2004).
•Modernize Telecomm UUT: 3 approved with rate
reduction, 7 approved, & 1 rejected.
City/Area Rate*
San Mateo County
Daly City 5.0%
East Palo Alto 5.0%
Menlo Park 0.0%**
Pacifica 6.5%
Portola Valley 4.5%
Redwood City 4.0 to 5.0%
Santa Clara County
Cupertino 2.4%
Gilroy 4.5 to 5.0%
Los Altos 3.2 to 3.5%
Mountain View 3.0%
Palo Alto 4.75 to 5.0%
San Jose 4.5 to 5.0%
Sunnyvale 2.0%
San Francisco 7.5%
Alameda – 10 Cities 3.25 to 9.5%
Contra Costa – 6 Cities 1.0 to 9.5%
*Rates as of April 2025.
**2.5% to 3.5% but reduced to 0% beginning 2024.
14 87
Utility User Tax (UUT)
Pros:
Certainty. UUT revenues have been less volatile than other economic-sensitive revenues
like TUT, but are less certain than a Parcel Tax, particularly over the long-term (see
“Adequacy” concern below).
Equity. Can establish different rates for residential vs. commercial.
Cons:
o Voter Approval. Historic voter approval rates for new UUT are low (32%) but advisory
measure might help (+20%). Voter data in region for UUT ballot measures is dated and
small, necessitating more extensive community outreach.
o Adequacy. The competitive rate of 5.0% falls short of the City’s revenue target. Would need
to include water or increase rate to 7.0% or higher to meet target. For the long-term
adequacy, important to note current projections in the region and statewide of 2.5% to
3.0% annual growth are due to electric rates/consumption, more than offsetting
flat/declining revenues for gas and telecommunications.
15 88
Real Property Transfer Tax (RPTT)
Basics of RPTT
•Tax imposed on the transfer of title of real property
from one person or entity to another.
•Additional to Documentary Transfer Tax imposed
under state law ($1.10 per $1,000 of sale price), of
which half allocated to city and half to county, but if
city adopts RPTT, full amount goes to county.
•Methodology: Based on property sale price and can be
paid by either buyer or seller. Collected by county and
remitted to city.
•Typically imposed as flat rate per $1,000 of sale
price. Some cities have used % of sale price rate
and/or used tiered rates based on property value.
•Can only be imposed by charter city.
•Majority approval by voters if for general purposes.
Statewide Facts - RPTT
•Since 2010, 70% of RPTT measures
have been approved (21 of 30). All
were for general purposes (majority
vote).
•27 cities have a RPTT, of which 15 are
in the Bay Area.*
•For flat tax rates, amount ranges from
$2.20 per $1,000 to $26.10 per $1,000
(top tier).
•For % of sale tax rates, amount ranges
from 0.50% to 6.0%.
*Does not include charter cities that have imposed a RPTT
at rate equivalent to the Documentary Transfer Tax.
16 89
Real Property Transfer Tax (RPTT)
Real Property Transfer Tax @ $11 per $1,000 sale price
= Estimated $14 million on average per year.
•Significant year-to-year variation in estimated
annual revenue. Historical city revenue from
Documentary Transfer Tax has dropped -71% YOY
and risen +131% YOY.
•Based on above, annual revenues could be as low
as $6.2 million or as high as $26.5 million.
•Flat rate does not index to rising expenses, but
revenues increase as property sales values rise,
subject to the significant variation noted above.
•Requires SSF voters to adopt city charter. Two cities
have adopted a charter for the purpose of imposing
RPTT (Emeryville 2014, El Cerrito 2018). Both the
charter and tax measure were on the same ballot.
City/Area Rate*
San Mateo County
San Mateo 0.5% except 1.5% > $10m.
Santa Clara County
Mountain View $3.30/$1,000 except $15 > $6m.
Palo Alto $3.30 per $1,000
San Jose $3.30/$1,000 + 0% to 1.5% (4 tiers)
San Francisco 0.5% to 6.0% (6 tiers)
Alameda County
Alameda $12 per $1,000
Albany $15 per $1,000
Berkeley 1.5% to 3.0% (three tiers)
Emeryville $12 to $25 (three tiers)
Hayward $8.50 per $1,000
Oakland 1% to 2.5% (four tiers)
Piedmont $13 per $1,000
San Leandro $11 per $1,000
Contra Costa County
El Cerrito $12 per $1,000
Richmond 0.7% to 3% (four tiers)
* Rates as of April 2025.
17 90
Real Property Transfer Tax (RPTT)
18
Pros:
Voter Approval. Requires majority vote approval for general purpose tax and generally
strong historical approval rates by voters (70% of ballot measures).
Equity. Tiered rates can help mitigate inequity/regressive nature of a flat rate. Also, tax
imposed as incidence of property sale allowing buyer and seller to negotiate who pays
what portion at close.
Cons:
o Certainty (Volatility). Significantly more volatile than all other tax revenue options being
evaluated. Difficult to fund municipal services with consistent annual operating expenses
using a highly volatile revenue source.
o Competitiveness. Only 5 cities on peninsula side of the Bay Area have an RPTT. Proposed
rate ($11 per $1,000) would be significantly higher than all except top tiers in SF and SJ.
Proposed rates more comparable to cities on east side of Bay Area.
o Charter Approval. Requires voters to approve changing SSF to a charter form of
government and to approve the tax measure. Both measures can be on same ballot.
91
Recommendations &
Next Steps
19 92
Tax Revenue Options – Recommended Ranking
Rank Revenue
Option
Est.
Annual
Revenue
Pros Cons
1
Transaction
& Use Tax
(TUT)
$14 million
•50% + 1 vote required with high voter
approval in recent elections.
•Generates most revenue with rate
proportionate to surrounding cities.
•Tax paid by residents, businesses and
visitors/daytime workforce.
•Requires special legislation.
•Potential ballot competition from
County TUT in November 2026.
•Total rate (10.375%) highest
among communities in region.
•TUT is more volatile than UUT or
parcel tax, but lower than RPTT.
2 Parcel Tax $14 million
•Parcel tax has lowest volatility
compared to all others.
•High voter approval but tax measures
were for restricted special purposes
(not general purposes).
•Can use per sf rate to improve equity
of otherwise regressive flat amount.
•2/3 vote required.
•Per parcel amount ($770) and per
sf rate ($0.069 per sf), both at top-
end among communities in
region.
20 93
Tax Revenue Options – Recommended Ranking (cont.)
Rank Revenue
Option
Est.
Annual
Revenue
Pros Cons
3 Utility User
Tax (UUT)
$14
million
•50% + 1 vote required.
•UUT has lower volatility than TUT or
RPTT, but higher than parcel tax.
•6-7% rate would be at top-end
among communities in region.
•Low voter approval of new UUTs
(32%) in recent decades.
•Adequacy of annual revenue
growth rate may be an issue.
4
Real
Property
Transfer Tax
(RPTT)
$14
million
•50% + 1 vote required.
•Tiered amounts or rates can help
mitigate inequity/regressive nature of
flat tax.
•Significantly more volatile than all
other options; difficult for funding
municipal services.
•$11 rate would be at top-end
among neighboring communities.
•Requires voters to approve city
charter.
21 94
November 2026 Ballot Measure – Potential Timeline
Dates Task
July to December 2025 Community input and opinion research conducted.
January to March 2026 Staff develops options for revenue measure based on community input and
opinion research, Council input, and other relevant considerations.
April to June 2026 Public information disseminated explaining why and how Council is
considering placing a revenue measure on the ballot.
June 2026 Council decision on appropriate revenue measure and direction for staff to
prepare ballot measure language and required resolutions.
July 8, 2026 Last regularly scheduled meeting of Council for Introduction/First Reading of
revenue measure ordinance.
July 22, 2026
Last regularly scheduled meeting of Council for Second Reading/Adoption of
revenue measure ordinance and approval of resolution for consolidated
election.
August 7, 2026 Deadline for City submission of ballot measure to Registrar of Voters.
August 18, 2026 Deadline for City’s submittal of impartial analysis of ballot measure to
Registrar of Voters.
November 3, 2026 Election Day.
22 95
City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #:25-199 Agenda Date:5/20/2025
Version:1 Item #:4.
Report regarding proposed Capital Improvement Program for the Fiscal Year 2025-26.(Eunejune Kim,
Director of Public Works/City Engineer, and Matthew Ruble, Principal Engineer)
RECOMMENDATION
Staff recommends that the Budget Standing Committee of the City Council review and provide feedback
on the proposed Capital Improvement Program for the Fiscal Year 2025-26.
BACKGROUND/DISCUSSION
The Capital Improvement Program (CIP) outlines large capital expenditures and infrastructure improvement
projects throughout the City. City departments identify necessary improvements and prioritize project
implementation when preparing the CIP.
City staff considers the following criteria when selecting projects for inclusion in the CIP:
•Grant-funded projects requiring a City contribution
•Previously approved projects under construction or contract
•Projects required for regulatory compliance
•Projects to maintain or upgrade existing City infrastructure
•Projects with no General Fund allocations
•Projects requested by the community or City departments
Based on these guidelines, staff proposes the following Fiscal Year (FY) 2025-26 CIP budget appropriations.
The proposed FY 2025-26 CIP budget is $231.82 million, with $24.03 million of new appropriations and
approximately $207.79 million of appropriations from prior fiscal years for continuing projects. In addition, the
City continues to work diligently to identify projects within Infrastructure Reserves and Sewer Enterprise
Funds to be redirected back to the City’s budget to help support the CIP budget needs for FY 2025-26 and out-
years. These projects are included in a separate attachment, along with other funding sources and projects that
the City has identified for either closeout or deferral. As these projects are anticipated to be eliminated or
deferred, they will not be included in the FY 2025-26 Budget Book.
CIP Project Summary
The FY 2025-26 CIP includes 186 projects: 10 new projects and 176 continuing projects.
The CIP is comprised of six (6) project types:
•Public Facilities
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•Parks
•Storm Drains
•Sanitary Sewer
•Streets
•Traffic
The following brief overview identifies proposed new projects and additional appropriation requests for
continuing projects.
Public Facilities Projects - These projects renovate, construct, and improve city buildings and infrastructure.
New appropriations requests:
There are no new public facilities appropriation requests for Fiscal Year 2025-26.
Total New Public Facilities Appropriation Requests = $0
Parks Projects - These projects replace and improve playgrounds, renovate baseball fields, and expand parks
at city-owned public spaces.
New appropriations request:
·(pk2301) Orange Memorial Park Main Playground Replacement (BONDS) - Surfacing and equipment
replacement of main playground at Orange Memorial Park. Equipment to be replaced with inclusive
elements for all-abilities. - $865,073.24
·(pk2302) Centennial Trail Improvements - Construct park spaces along Centennial Trail. - $1,666,279
·(pk2305) Linden Park Project - Project to transform two adjacent vacant lots into a vibrant
neighborhood park and cultural plaza for our community to enjoy. - $300,000
·(pk2501) Dedicated Pickleball Courts - Addition of Pickleball courts to Orange Park; additional costs to
add noise attenuation and improved surfacing. - $400,000
·New project (pk2601) Cypress and Pine Park Renovation Project - Improve and rehabilitate the existing
Cypress and Pine Park with new play features, furnishings, landscape, and other improvements. -
$3,000,000
·New project (pk2602) Playground Surfacing City Hall Tot Lot, Avalon Park, Westborough Park -
Replacement of rubberized surfacing that has reached end of life and is degraded beyond patch repairs. -
$180,000
Total New Parks Appropriation Requests = $6,411,352
Storm Drain Projects - Projects repair and improve storm drains and infrastructure to reduce pollution run-off
into the San Francisco Bay.
New appropriations request:
(sd1801) Orange Memorial Park Stormwater Capture Project - Design and construct a storm water capture
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device including pre-treatment system. - $20,000
Total New Storm Drain Appropriation Requests = $20,000
Sanitary Sewer Projects: Projects maintain the Water Quality Control Plant (WQCP), Collection System
Pumps Stations, and sanitary sewer lines within the City.
New appropriations request:
·(ss2202) Oyster Point Pump Station - The project will design and construct a new pump station to
support the development at Oyster Point. - $2,850,000
·New project (ss2601) Sanitary Sewer Rehab FY 2025-26 - Annual systematic rehabilitation of the sewer
system gravity lines by sewer basins as determined by the sewer master plan and recent video inspection
efforts prior to Surface Seal Area 2. - $5,800,000¹
·New project (ss2602) Harbor Way Sewer Main Upsize - Upgrade of sewer main due to capacity
constraints. - $500,000
·New project (ss2603) Sanitary Sewer Pump Station Master Plan - Condition and Capacity assessment of
all Pump Stations and associated force mains. - $500,000
Total New Sanitary Sewer Appropriation Requests = $9,650,000
Streets Projects: These projects repair bridges, resurface streets, improve medians and sidewalks, and study
the feasibility of proposed roadway and rail extensions.
New appropriations Request:
·(st1703) Bridge Preventative Maintenance Program - This project will conduct preventative
maintenance on nine (9) city-maintained bridges including: Colma Creek Bridge at Produce Avenue,
Canal Bridge at Linden Avenue, two (2) bridges over San Bruno Channel over North Access Road,
Colma Creek Bridge at Spruce Avenue, Colma Creek Bridge at Utah Avenue, Grand Ave. and San
Bruno Channel over North Access Road. - $200,000
·(st1904) Underground Utilities District (UUD) Rule 20A for Mission Road - Establish an Underground
Utility District on Mission Road from Grand Avenue to connect with underground utilities at the South
San Francisco BART south entrance. Additional funding is required to replace city-owned street
lighting. - $1,500,000
·(st2301) Junipero Serra Boulevard/Westborough Boulevard Corridor Feasibility Project - To fund the
planning of the Junipero Serra Blvd and Westborough Blvd Bike and Ped improvements as identified in
the Active South City Plan - $200,000
·(st2505) 2026 Surface Seal Project - This project will provide asphalt pavement maintenance from
design through construction in Area 2 (Sierra Highlands neighborhood) of the Pavement Management
Program (PMP). - $3,300,000
·New project (st2601) Tanforan Ave Reconstruction - Reconstruction of Tanforan Ave between San
Mateo Ave and Railroad Place. - $100,000
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·New project (st2602) Citywide Misc Striping - This project includes the installation, replacement, and
maintenance of roadway striping and pavement markings at various locations citywide. - $300,000
·New project (st2603) Citywide Trip Hazard - Funds to be used to mitigate trip hazards identified as part
of the trip hazard assessment. - $150,000
·New project (st2604) 2027 Surface Seal - Street surface treatments with base repairs in preparation of
2027 surface seal project. - $200,000
·New project (st2605) 2026 Pavement Repair and Crack Seal - A preventive maintenance program that
includes repairs to localized defective pavement areas and crack sealing - $1,000,000
Total New Streets Appropriation Requests = $6,950,000
Traffic Projects: These projects focus on arterials, corridors, and key intersections within the City including
adaptive traffic signals to provide better traffic flow, improve pedestrian safety, traffic calming, and better
bicycle rider safety on city streets.
New appropriations Request:
·(tr2002) Smart Corridor - Implementation of Intelligent Transportation System (ITS) along segment of
101 corridor north of I-380. - $350,000
·(tr2301) Miscellaneous Traffic Improvements - Design & construct any traffic related improvements in
the City, such as striping, signs, and other traffic calming measures from the Traffic Advisory
Committee, Neighborhood meetings or as needed. - $250,000
·(tr2406) Traffic Studies and Grant Support - Support for any traffic-related studies from the Traffic
Advisory Committee, Neighborhood meetings or as needed, and support for grant applications as
needed. - $100,000
·(tr2415) Colma/SSF ECR Bicycle & Ped Improvement - Part of Bike/Ped master plan - $300,000
Total New Traffic Appropriation Requests = $1,000,000
Infrastructure Reserve Refund:To release financial resources for urgent needs, the City has decided to
release Infrastructure Reserves previously allocated to four projects, three of which will be closed. This action
will enable the City to redirect funds toward projects that require immediate attention.
·(st1803) Street Lighting Enhancement - ($200,000)
·(st1805) ECR Gateway Sign & Median Improvement (Noor/Spruce) - ($42,985.38) CLOSE
·(st2002) Survey Monument - ($125,000) CLOSE
·(st2305) CDBG Curb Ramp Replacement - ($150,025.86) CLOSE
TOTAL REFUND TO Infrastructure Reserve = $518,011.24
Sewer Enterprise Fund Refund:To support sustainable resource management, the City has thoroughly
reviewed current and upcoming projects dependent on Sewer Enterprise Funds. As a result, four projects are
recommended for closure and nine for deferral. Additionally, two projects will be reclassified and moved to the
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Capital Outlay Fund. These actions will release a total of $11.87 million back into the Sewer Enterprise Fund to
support critical needs in FY 2025-26 and future years.
·(ss1301) WQCP Wet Weather and Digester Imprvmts - ($564,441.59) CLOSE
·(ss1601) Sodium Hypochlorite Tank Replacement - ($57,201.08) CLOSE
·(ss1703) WQCP Secondary Clarifiers #1 & #2 Rehab - ($1,316,576.22) CLOSE
·(ss1704) WQCP Effluent Storage Basin Liner Rplmnt - ($855,993.07) CLOSE
·(ss1307) Plant Wide Industrial Re-Coat - ($2,000,000)
·(ss2302) WQCP Sludge Dewatering Improvements - (1,393,290)
·(ss1205) WQCP Solar PV - ($270,356.94)
·(ss1901) Pump Station Industrial Re-Coating Prog - ($2,125,266.56)
·(ss2301) WQCP Diffused Air Flotation Thickener Re - ($548,100)
·(ss2404) Programmable Logic Controller Repl-WQCP - ($1,498,140)
·(ss2407) SB1383 Organic Diversion Mandate Comp - ($73,080)
·(ss2408) Biosolids Drying & Recycling- Proj #2 - ($73,080)
·(ss2501) Sanitary Pump Stations 5, 6, 7 Upgrade - ($219,240)
TOTAL REFUND to Sewer Enterprise Fund = $10,994,765.46
Additional Project Closures/Refunds:
The City has also identified three additional projects for adjustment across other funding sources. One project
will be closed, resulting in an additional release of $1,165,073.24. These actions are intended to align remaining
project balances with evolving capital priorities and funding needs.
·(pf2205) Oyster Pt Phase 2C Parking Lot Improve - ($150,000)
·(pf2206) Oyster Pt Phase 2C Landscape Improvement - ($150,000)
·(pk2309) OMP Sports Field Renovation (BONDS 522) - ($865,073.24)
TOTAL REFUND to Other = $1,165,073.24
FUNDING
This staff report outlines the proposed allocations for the FY 2025-26 CIP budget totaling $231.82 million,
which includes $24.03 million in new appropriations and approximately $207.79 million in carryforward
funding for ongoing projects. To support financial efficiency, the City has identified $518,000 in Infrastructure
Reserve refunds, $10.99 million in Sewer Enterprise Fund reallocations, and $1.2 million from additional
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project closures.
Funding allocations by source and project are detailed in Attachment 1 - FY 2025-2026 Funding Source
Summary, while Attachment 2 - Excerpts from the One-Year CIP Proposed Budget provides a visual
breakdown of new appropriations. Attachment 3 - Proposed Project Closures and Deferrals outlines projects
identified for closeout, deferral, or reallocation.
This strategic approach reflects the City’s commitment to responsible fiscal management and aligning capital
investments with critical infrastructure priorities.
CONCLUSION
Staff will amend the FY 2025-26 CIP based on direction from the Budget Subcommittee and present the revised
CIP at the Special City Council Study Session June 7, 2025.
Attachments:
1.FY 2025-2026 Funding Source Summary for All Appropriation Requests
2.Excerpts from the FY 2025-2026 One-Year CIP Proposed Budget
3.Proposed Project Closures and Deferrals
¹Funding request is contingent upon City Council approval of the staff report scheduled for May 28, 2025,
which proposes fund transfer reimbursing Sewer Fund (710) with applicable Sewer Capacity revenue.
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Funding SourceProject Number Request TitleFY2026Bonds/Loanspk2301 pk2301 Orange Memorial Park Main Playground Replacement (BONDS)$865,073.24Total Bonds/Loans$865,073.24Citywide Traffic Impact Feetr2415tr2415 COLMA/SSF ECR BICYCLE & PED IMPROVEMENT$300,000.00tr2002 tr2002 Smart Corridor$350,000.00tr2406 tr2406 Traffic Studies and Grant Support$100,000.00tr2301 tr2301 Miscellaneous Traffic Improvements$250,000.00st2301 st2301 Junipero Serra Boulevard/Westborough Boulevard Corridor Feasibility Project$200,000.00Total Citywide Traffic Impact Fee$1,200,000.00East of 101 Sewer Impact Feess2603 ss2603 Sanitary Sewer Pump Station Master Plan$500,000.00ss2602 ss2602 Harbor Way Sewer Main Upsize$500,000.00ss2202 ss2202 Oyster Point Pump Station$2,400,000.00ss2401 ss2401 Oyster Point Sewer Main Upsize$1,000,000.00Total East of 101 Sewer Impact Fee$4,400,000.00Gas Taxst2602 st2602 Citywide Misc Striping $120,000.00st2601 st2601 Tanforan Ave Reconstruction$100,000.00Total Gas Tax$220,000.00Infrastructure Reservespk2602 pk2602 Playground Surfacing City Hall Tot Lot, Avalon Park, Westborough Park$180,000.00sd1801 sd1801 Orange Memorial Park Stormwater Capture Project$20,000.00st1904 st1904 Underground Utilities District (UUD) Rule 20A for Mission Road$1,500,000.00st1703 st1703 Bridge Preventative Maintenance Program$200,000.00Total Infrastructure Reserves$1,900,000.00Measure Ast2605 st2605 2026 Pavement Repair and Crack Seal$500,000.00st2604 st2604 2027 Surface Seal$200,000.00st2603 st2603 Citywide Trip Hazard$150,000.00st2602 st2602 Citywide Misc Striping $180,000.00st2505 st2505 2026 Surface Seal Project$1,166,667.00Total Measure A$2,196,667.00Other (IQHQ Developer Contribution)pk2305 pk2305 Linden Park Project$300,000.00Total Other Funding Sources$300,000.00Park Land Constructionpk2601 pk2601 Cypress and Pine Park Renovation Project$3,000,000.00pk2302 pk2302 Centennial Trail Improvements$1,666,279.00pk2501 pk2501 Dedicated Pickleball Courts$400,000.00Total Park Land Construction$5,066,279.00Road Maintenance Acct (SB1)st2505 st2505 2026 Surface Seal Project$566,667.00Total Road Maintenance Acct (SB1)$566,667.00102
SMC Measure Wst2605 st2605 2026 Pavement Repair and Crack Seal $500,000.00st2505 st2505 2026 Surface Seal Project$1,566,666.00Total SMC Measure W$2,066,666.00Sewer Enterprisess2601 ss2601 Sanitary Sewer Rehab FY 2025-26 $5,800,000.00ss2202 ss2202 Oyster Point Pump Station$150,000.00Total Sewer Enterprise$5,950,000.00Successor Agency Fundsss2202 ss2202 Oyster Point Pump Station$300,000.00Total Successor Agency Funds$300,000.00Total Funding Sources25,031,352.24103
Capital Improvement Program - 1-Year: FY2025-26
Below is the breakdown of appropriations for the CIP budget by Funding Source:
Total Capital Requested
24 ,031,352
24 Capital Improvement Projects
The one-year plan has a budget request of $25.03 million.
Total Funding Requested by Source
TOTAL $24,031,352.24
Bonds/Loans (4%)$865,073.24
Citywide Traf c Impact Fee (5%)$1,200,000.00
East of 101 Sewer Impact Fee (14%)$3,400,000.00
Gas Tax (1%)$220,000.00
Infrastructure Reserves (8%)$1,900,000.00
Measure A (9%)$2,196,667.00
Other Funding Sources (1%)$300,000.00
Park Land Construction (21%)$5,066,279.00
Road Maintenance Acct (SB1) (2%)$566,667.00
Sewer Enterprise (25%)$5,950,000.00
SMC Measure W (9%)$2,066,666.00
Successor Agency Funds (1%)$300,000.00
104
CIP Appropriations by City Fund
The table below shows the CIP budget appropriations by City fund number.
CIP Appropriations by Project Type
The following pie chart shows the FY2025-26 appropriations for capital improvement projects split by project type. Sanitary
Sewer capital projects account for the largest proportion of project funding ($9.65 million or 40.16% of total appropriations).
Capital Improvement Plan by Project Type
Sanitary Sewer $9,650,000 (40.16%)
Streets $6,950,000 (28.92%)
Parks $6,411,352 (26.68%)
Traf c $1,000,000 (4.16%)
Storm Drains $20,000 (0.08%)
Public Facilities $0 (0.00%)
105
Capital Improvement Plan Requests
Itemized Requests for 2026
pk2301 Orange Memorial Park Main Playground Replacement (BONDS)$865,073
Surfacing and equipment replacement of main playground at Orange Memorial Park. Equipment to be replaced with
inclusive elements for all-abilities.
pk2302 Centennial Trail Improvements $1,666,279
Construct park spaces along Centennial Trail.
pk2305 Linden Park Project $300,000
Project to transform two adjacent vacant lots into a vibrant neighborhood park and cultural plaza for our community to
enjoy.
pk2501 Dedicated Pickleball Courts $400,000
Addition of Pickleball courts to Orange Park; additional costs to add noise attenuation and improved surfacing.
pk2601 Cypress and Pine Park Renovation Project $3,000,000
Improve and rehabilitate the existing Cypress and Pine Park with new play features, furnishings, landscape, and other
improvements.
pk2602 Playground Surfacing City Hall Tot Lot, Avalon Park, Westborough Park $180,000
Replacement of rubberized surfacing that has reached end of life and is degraded beyond patch repairs.
sd1801 Orange Memorial Park Stormwater Capture Project $20,000
Design and construct a storm water capture device including pre-treatment system.
ss2202 Oyster Point Pump Station $2,850,000
The project will design and construct a new pump station to support the development at Oyster Point.
ss2601 Sanitary Sewer Rehab FY 2025-26 $5,800,000
Annual systematic rehabilitation of the sewer system gravity lines by sewer basins as determined by the sewer master plan
and recent video inspection efforts prior to Surface Seal Area 2.
ss2602 Harbor Way Sewer Main Upsize $500,000
Upgrade of sewer main due to capacity constraints.
ss2603 Sanitary Sewer Pump Station Master Plan $500,000
Condition and Capacity assessment of all Pump Stations and associated force mains.
st1703 Bridge Preventative Maintenance Program $200,000
This project will conduct preventative maintenance on nine (9) city-maintained bridges including: Colma Creek Bridge at
Produce Avenue, Canal Bridge at Linden Avenue, two (2) bridges over San Bruno Channel over North Access Road, Colma
Creek...
st1904 Underground Utilities District (UUD) Rule 20A for Mission Road $1,500,000
Establish an Underground Utility District on Mission Road from Grand Avenue to connect with underground utilities at the
South San Francisco BART south entrance. Additional funding is required to replace city-owned street lighting.
st2301 Junipero Serra Boulevard/Westborough Boulevard Corridor Feasibility Project $200,000
The City applied for SMCTA Bike / Ped Cycle 6 grant funding to fund the planning of the Junipero Serra Blvd and
Westborough Blvd Bike and Ped improvements as identi ed in the Active South City Plan. The City was awarded funding
for the rst year...
106
st2505 2026 Surface Seal Project $3,300,000
This project will provide asphalt pavement maintenance from design through construction in Area 2 (Sierra Highlands
neighborhood) of the Pavement Management Program (PMP). The PMP cycles through Areas 1 to 5, providing a new
surface seal of...
st2601 Tanforan Ave Reconstruction $100,000
Reconstruction of Tanforan Ave between San Mateo Ave and Railroad Place.
st2602 Citywide Misc Striping $300,000
This project includes the installation, replacement, and maintenance of roadway striping and pavement markings at
various locations citywide.
st2603 Citywide Trip Hazard $150,000
Funds to be used to mitigate trip hazards identi ed as part of the trip hazard assessment.
st2604 2027 Surface Seal $200,000
Street surface treatments with base repairs in preparation of 2027 surface seal project.
st2605 2026 Pavement Repair and Crack Seal $1,000,000
Roadway distress such as cracks, pumping, pushing, wheel rutting, raveling, and pot holing in the asphalt concrete (AC)
pavement are defects that need to be addressed in a timely manner. A preventive maintenance program that includes
repairs to...
tr2002 Smart Corridor $350,000
Implementation of Intelligent Transportation System (ITS) along segment of 101 corridor north of I-380.
tr2301 Miscellaneous Traf c Improvements $250,000
Design & construct any traf c related improvements in the City, such as striping, signs, and other traf c calming measures
from the Traf c Advisory Committee, Neighborhood meetings or as needed.
tr2406 Traf c Studies and Grant Support $100,000
Support for any traf c-related studies from the Traf c Advisory Committee, Neighborhood meetings or as needed, and
support for grant applications as needed.
tr2415 COLMA/SSF ECR BICYCLE & PED IMPROVEMENT $300,000
Project advances key elements of the Bike/Ped Master Plan. Colma is leading the effort and has secured a TA grant.
Caltrans asked the project scope be extended to include the segment from the previous project limits to Hickey Boulevard
and El...
Total:$24,031,352
107
Fund Type Project ID Project Name Refund Amount Action
Infrastructure Reserve st1803 Street Lighting Enhancement 200,000.00$ Release
Infrastructure Reserve st1805 ECR Gateway Sign & Median Improvement (Noor/Spruce)42,985.38$ Close
Infrastructure Reserve st2002 Survey Monument 125,000.00$ Close
Infrastructure Reserve st2305 CDBG Curb Ramp Replacement 150,025.86$ Close
TOTAL – Infrastructure Reserve 518,011.24$
Sewer Enterprise Fund ss1301 WQCP WET WEATHER AND DIGESTER IMPRVMTS 564,441.59$ Close
Sewer Enterprise Fund ss1601 SODIUM HYPOCHLORITE TANK REPLACEMENT 57,201.08$ Close
Sewer Enterprise Fund ss1703 WQCP SECONDARY CLARIFIERS #1 & #2 REHAB 1,316,576.22$ Close
Sewer Enterprise Fund ss1704 WQCP EFFLUENT STORAGE BASIN LINER RPLMNT 855,993.07$ Close
Sewer Enterprise Fund ss1307 PLANT WIDE INDUSTRIAL RE-COAT 2,000,000.00$ Release
Sewer Enterprise Fund ss2302 WQCP SLUDGE DEWATERING IMPROVEMENTS 1,393,290.00$ Release/Defer
Sewer Enterprise Fund ss1205 WQCP SOLAR PV 270,356.94$ Release/Defer
Sewer Enterprise Fund ss1901 Pump Station Industrial Re-Coating Prog 2,125,266.56$ Release/Defer
Sewer Enterprise Fund ss2301 WQCP DIFFUSED AIR FLOTATION THICKENER RE 548,100.00$ Release/Defer
Sewer Enterprise Fund ss2404 PROGRAMMABLE LOGIC CONTROLLER REPL-WQCP 1,498,140.00$ Release/Defer
Sewer Enterprise Fund ss2407 SB1383 ORGANIC DIVERSION MANDATE COMP 73,080.00$ Release/Defer
Sewer Enterprise Fund ss2408 BIOSOLIDS DRYING & RECYCLING- PROJ #2 73,080.00$ Release/Defer
Sewer Enterprise Fund ss2501 Sanitary Pump Stations 5, 6, 7 Upgrade 219,240.00$ Release/Defer
TOTAL - Sewer Enterprise 10,994,765.46$
Successor Agency pf2005 OYSTER PT PHASE 2C PARKING LOT IMPROV.150,000.00$ Release
Successor Agency pf2006 OYSTER PT PHASE 2C LANDSCAPE IMPROVEMENT 150,000.00$ Release
Loan/Debt Proceeds pk2309 OMP SPORTS FIELD RENOVATION (BONDS 522)865,073.24$ Release
TOTAL-Other 1,165,073.24$
Proposed Project Closures and Refunds
108
Capital Improvement Program FY 2025-26
Budget Standing Committee
May 20, 2025
109
CIP by Project Type
2
4
6
9
4
1
110
FY 2025-26 CIP Project Requests by Funding Source
3
5
6
9
4
111
pk2301 Orange Memorial Park Main Playground Replacement
(BONDS)
4
$865,073
CIP Bond Fund
112
pk2302 Centennial Trail Improvements
5
$1,666,279
Park Construction
Fee
113
pk2305 Linden Park Project
6
$300,000
IQHQ Developer Deposit
114
pk2501 Dedicated Pickleball Courts
7
$400,000
Park Construction
Fee
115
pk2601 Cypress and Pine Park Renovation Project
8
$3,000,000
Park Construction
Fee
116
pk2602 Playground Surfacing City Hall Tot Lot, Avalon Park, Westborough Park
9
$180,000
Infrastructure
Reserves
117
sd1801 Orange Memorial Park Stormwater Capture Project
10
$20,000
Infrastructure
Reserves
118
ss2202 Oyster Point Pump Station
11
$2,850,000
$2,400,000 East of 101
Sewer Impact Fees
$300,000 Successor
Agency Funds $150,000
Sewer Enterprise
119
ss2401 Oyster Point Sewer Main Upsize
12
$1,000,000
East of 101 Sewer
Impact Fees
120
ss2601 Sanitary Sewer Rehab FY 2025-26
13
$5,800,000
Sewer Enterprise Fund
121
ss2602 Harbor Way Sewer Main Upsize
14
$300,000
East of 101 Sewer Impact
Fees
122
ss2603 Sanitary Sewer Pump Station Master Plan
15
$500,000
East of 101 Sewer Impact
Fees 123
st1703 Bridge Preventative Maintenance Program
16
$200,000
Infrastructure
Reserves
124
st1904 Underground Utilities District (UUD) Rule 20A for Mission Road
17
$1,500,000
Infrastructure Reserves
125
st2301 Junipero Serra Boulevard/Westborough Boulevard Corridor
Feasibility Project
18
$200,000
Citywide Transportation
Impact Fee
126
st2505 2026 Surface Seal Project
19
$3,300,000
$1,166,667 Measure A
$566,667 SB1 RMRA
$1,566,666 SMC
Measure W
127
st2601 Tanforan Ave Reconstruction
20
$100,000
Gas Tax
128
st2602 Citywide Misc Striping
21
$300,000
$120,000 Gas Tax
$180,000 Measure A
129
st2603 Citywide Trip Hazard
22
$150,000
Measure A
130
st2604 2027 Surface Seal
23
$200,000
Measure A
131
st2605 2026 Pavement Repair and Crack Seal
24
$1,000,000
$500,000 Measure A
$500,000 SMC
Measure W
132
tr2002 Smart Corridor
25
$350,000
Citywide
Transportation Impact
Fee
133
tr2301 Miscellaneous Traffic Improvements
26
$250,000
Citywide Transportation
Impact Fee
134
tr2406 Traffic Studies and Grant Support
27
$100,000
Citywide
Transportation
Impact Fee
135
tr2415 COLMA/SSF ECR BICYCLE & PED IMPROVEMENT
28
$300,000
Citywide Transportation Impact Fee
136
Capital Improvement Program FY 2025-26
City of South San Francisco
THANK YOU
FOR JOINING US TODAY
137