Millbrae’s mid-year budget checkup delivered something every city council likes to hear: no drama. City staff told the council last Tuesday that revenues and expenditures are still tracking to a balanced $45.5 million, and that the city expects to both begin and end the fiscal year with roughly $18 million in fund balance. Finance staff said the general fund holds about $11.5 million in unreserved funds and approximately $6.5 million in formal reserves, a cushion officials say gives Millbrae room to absorb a few unexpected costs while keeping core services intact.
Per the City of Millbrae, the mid-year review appeared as an action item on the council’s agenda last Tuesday, complete with a staff presentation and a resolution to amend the FY2025-26 budget. The agenda packet included the mid-year report and a stack of supporting financial documents that staff used to walk the council through line-by-line changes.
City Finance Director Mike Sung told council that brick-and-mortar sales helped spark a roughly $300,000 increase in sales tax, while license and permitting fees were down about $400,000 because the city is between development cycles. Staff also reported a $200,000 increase in service charges and a one-time $470,000 billing from the San Mateo County Sheriff’s Office for dispatch services, and Sung said Millbrae received about $500,000 less than the $1.6 million it was owed in in-lieu vehicle license fee funding, a shortfall the city has asked the county to help recover. Taken together, those shifts still leave Millbrae’s mid-year outlook balanced around $45.5 million in revenue and expenditures, as reported by the San Mateo Daily Journal.
Grants and surprise bills
The mid-year adjustments also included a Caltrans micromobility grant for the Millbrae station and reimbursements for damage from the 2022 winter storms, which eased some capital pressure even as other costs popped up.
VLF shortfall remains a countywide headache
The vehicle license fee in-lieu shortfall is a countywide problem that has prompted repeated appeals to Sacramento for relief. According to state budget hearing transcripts recorded by CalMatters' Digital Democracy, county leaders and local lawmakers have pushed for one-time fixes and longer-term solutions to the VLF gap that has affected San Mateo and a handful of other counties. Millbrae’s request to the county for the outstanding VLF money is part of that wider push.
For now, councilmembers thanked staff for keeping the books in balance and asked for more detail on the dispatch charge and the city’s letter to the county seeking the missing VLF money. Per the City of Millbrae, staff will return later in the spring with any budget amendments that might be needed if conditions change.
