South County Report: National City’s Bleak Budget Future 

A crowd of residents and environmental activists erupted in cheers Tuesday evening at National City Hall when City Councilmembers voted unanimously to reject a controversial biofuels rail depot on the city’s industrial west side. 

Residents were jubilant as city leaders declared it was time to turn the page on National City’s generations-long legacy as a home to polluting industries. 

But as councilmembers now turn their attention to charting a new course for their small, diverse, mostly lower income city, they face a stark budgetary reality that no one is cheering about. 

A series of recently approved raises for city employees, combined with added spending on programs that councilmembers said earlier this year would help to generate long-term economic benefit, have pushed the city to the budgetary brink. 

A closer look at city budget documents shows that the added spending, combined with a major withdrawal from the city’s reserve funds to cover a deficit, have left the city with little financial room to maneuver – especially in case of unforeseen fiscal emergency. 

On paper, the budget councilmembers passed in June was balanced, with $83 million in general fund expenditures, $74 million in revenues and a drawdown from city reserves to make up the difference. 

But the budget rested on a series of fiscal assumptions that may or may not turn out to be true. And recent raises granted to city employees already have added new spending. 

Though city finance officials estimated overall revenues would decline this year – largely due to a fall in sales tax receipts, hotel tax revenues and assorted other fees – officials nevertheless projected revenues would rise by $2.6 million next year without explaining why. 

At the same time, the Council voted in early September to grant roughly 10 percent raises to firefighters and rank-and-file City Hall employees. The new contracts are projected to cost taxpayers more than $5 million over the next three years. 

Upcoming contracts for police officers and city administrators likely will add several million dollars to that total. 

The June budget also included hiring more than a dozen new employees that councilmembers said are needed to maintain the city’s quality of life, improve efficiency and boost economic growth. 

Added staff include custodians to clean park bathrooms and other city facilities, a new code enforcement officer to ensure businesses comply with city regulations, new recreation center supervisors and enhanced security for the city library. 

The total cost of the new hires is close to $3 million per year. The Council also approved an additional one-time $1 million expenditure for a series of economic development initiatives. 

How did the Council pay for all of this? By dipping heavily into city reserves. 

Taking into account all the spending councilmembers approved this year, the city’s two primary reserve accounts – the unassigned fund balance and the economic contingency reserve, which function respectively like a family’s checking account and emergency savings fund – are set to decline by nearly half over the next year. 

In 2024, those funds held more than $37 million. By the end of next fiscal year, they are projected to dwindle to less than $20 million. 

If current budgetary patterns hold, the city would be on track to burn through its entire savings in just a few years. 

Mayor Ron Morrison addressed the budget situation in an interview this week. Though he voted with other councilmembers to approve both the current budget and the recent city employee raises, he said he did so knowing it would be the last time the city could paper over its budgetary imbalances with reserves. 

City employees, he said, are underpaid compared to peer cities and deserved a raise. “But these numbers are not going away,” he said. “At this rate, in three years we are out of all of our reserves and we’ll have to have a come to Jesus meeting.” 

Morrison and other councilmembers have floated various ideas for boosting city revenues. Ideas range from making it easier for small businesses to operate to raising taxes to drawing visitors to a revamped waterfront area adjacent to the city’s port operations. 

None of those ideas has resulted in a concrete proposal for Council approval yet. 

“We are headed toward a cliff,” Morrison said. “We need to look at doing something different.” 

In Other News 

South County Supervisor Paloma Aguirre scored a key win during this week’s meeting of the County Board of Supervisors. The Board voted unanimously to back a proposal by Aguirre and fellow Democratic Supervisor Monica Montgomery-Steppe to expand the number of county-funded detox beds for drug users. The proposal will pay for 44 new detox beds in downtown San Diego, likely at a new Father Joe’s Villages detox center. 

In other Aguirre news, though the newly elected Supervisor’s campaign ended in July, she will hold a fundraiser to pay off campaign debt on Nov. 12 at a brew pub in San Diego’s Barrio Logan. Suggested contributions range from $100 to $1,100. Aguirre’s most recent campaign finance report shows more than $44,000 in unpaid campaign bills. 

Chula Vista City Councilmember Cesar Fernandez has been working to secure more park space for his west Chula Vista district. Fernandez said plans are coming together to convert a half-acre former fire station at the corner of Oxford Street and Fourth Avenue into a small park featuring green space, exercise equipment and an enclosed dog run. Also in the works: Additional parks on SDG&E right-of-way spaces. “Outdoor space is good for the community,” Fernandez said. 

Several new exhibits are opening this month at the Bonita Museum and Cultural Center. Starting Nov. 8, artists from the Way of the Sacred Mountain indigenous advocacy organization will present a series of works honoring and documenting missing and murdered indigenous people. The museum also will showcase historic portraits of Navy sailors, a flower display by the Bonita Valley Garden Club and an exhibit of student artwork from Eastlake High School. More information here. 

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