Five Year Budget Forecast Shows Massive Service Reductions of Without New Revenues

San Bruno, CA – The City of San Bruno announced today that its upcoming five-year financial forecast will show significant revenue losses. In addition to a sluggish economy, these losses are driven by state-level actions, and they create the prospect of substantial workforce reductions and corresponding impacts on city services over the next several years.

City staff will present the updated forecast to the City Council on Tuesday, April 28, outlining several scenarios that include personnel reductions ranging from over 10% to as high as 50% of the municipal services if the City is unable to replace lost tax revenues from the state.

“San Bruno is facing a serious, state-driven fiscal challenge that no city can absorb without real impacts,” said City Manager Alex D. McIntyre. “For more than two years, we’ve been warning about these risks. Now they are becoming real, and we have a responsibility to be transparent with our community and to plan a course for the future.”
Loss of Key State of California Revenue Streams
The forecast incorporates multiple major revenue risks, including:

Vehicle License Fee (VLF) In-Lieu backfill revenue of approximately $7 million that the State is defaulting on 2004 legislation; and
Sales Tax sharing agreement of approximately $8-10 million per year that the state has ordered to be returned and reallocated to other agencies; and
Cardroom revenues of approximately $3.4 million that state legislation has authorized casinos to sue cardrooms for the revenue; and
Educational Revenue Augmentation Fund (ERAF) allocation of approximately $2 million that the state has claimed is invalid.

Together, these changes represent roughly $22 million per year (or nearly 1/3 of the City’s annual General Fund budget) in at-risk revenue to the City of San Bruno.

The City is currently challenging some aspects of the state’s findings, but the legal process is moving slowly, and staff are planning for the likelihood that some or all this revenue will be lost over the next few years.
Potential Service Impacts and Workforce Reductions
Because personnel costs make up the majority of the City’s operating expenses, the loss of these revenues would likely result in fewer staff across multiple departments, including:

Police and fire services
Public works and infrastructure maintenance
Parks, recreation, and community services
Administrative and support services

“Ultimately, this may mean slower 911 service, more potholes, and fewer hours at the Library, Recreation and Aquatic Center, and Senior Center,” City Manager McIntyre emphasized.

Future scenarios and potential impacts will be discussed publicly at the April 28 Council meeting, and the full staff report and forecast are available on the City’s website.

The City will also host a community budget workshop at the beginning of June to review and discuss the City Manager’s Proposed FY 2026-27 Budget.
Exploring Solutions: Revenue Measure and Economic Development
In response to these challenges, the City will implement hiring freezes and is currently exploring a combination of solutions, including:

A potential revenue measure on the November 2026 ballot to help replace lost state funding and preserve essential services; and
Economic development strategies, such as a proposed change to the City’s height ordinance, intended to spur new development and strengthen the long-term tax base.

“We want residents to understand the stakes clearly,” said City Manager McIntyre. “Without new revenue, deep cuts will be unavoidable. With thoughtful planning and community support, we can protect core services—including public safety—and maintain the quality-of-life San Bruno residents expect and deserve.”
Commitment to Transparency and Public Involvement
The City of San Bruno will continue to:

Provide regular public updates on the budget outlook at City Council meetings;
Publish key financial documents, including the five-year forecast and staff reports, on the City’s website; and
Invite residents to participate in upcoming discussions about services, potential reductions, and any proposed November revenue measure.

Residents can learn more and access meeting materials at SanBruno.ca.gov/Agenda.
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