NATIONAL CITY, Calif. (KGTV) — A warning came to National City at an Aug. 4 city council meeting.
"By 2030, there is a strong possibility is no longer solvent — so this is a real problem," Doug Schulze, National City's City Manager said.
Nearly a month later, Schulze is ready to present solutions. Schulze is preparing to present a five-year strategic plan to city council on Tuesday night to get the city back on solid financial ground.
"It's a five-year strategic plan for fiscal sustainability. We have to look at a blend of both revenue and cost containment," Schulze said.
Schulze became National City's City Manager in June, bringing decades of experience from working as a City Manager in Minneapolis, Washington, and Northern California. He said the budget challenges he faced in Bainbridge Island, Washing was the most comparable to National City's budget deficit, and he fixed it.
National City is currently operating on a $13 million deficit. Schulze projects that figure will grow to $30 million by 2029, driven by two primary factors: stagnant revenue growth and increases in pension costs, personnel costs, and insurance and risk management costs.
The five-year plan maps out where cuts could be made.
"Consolidating departments, and when we do that we can reduce the number of the higher-paid director positions," Schulze said.
The plan also identifies opportunities to generate revenue beyond the city's existing sales tax base.
"Maybe there's an opportunity to rent out the pool to some user groups," Schulze said.
Schulze also discussed bringing in a national big-box retail company, opening an RV park, developing hotels on National City's bayfront, and opening a Southwestern College location as additional revenue-generating possibilities.
"We have to always be growing our revenues in order to continue to provide the services we provide. If we're not growing the revenues, then the alternative is to start cutting services," Schulze said.
Part of the revenue strategy is also aimed at rebuilding the city's reserves, which are currently sitting $7 million below where they should be. Schulze said right now National City's reserves sit at $13M when they should be at $20M.
To find new ways to enhance revenue, Schulze has assembled an internal team of city staff that's going to be the "Care" Team or cost containment and revenue enhancement team — a model that worked for the city before, back in 2005.
"Through the work of that team [in 2005], over $3 million of savings to the city was generated through staff ideas," Schulze said.
Schulze also said his five-year plan aims to revive the proposed increase to National City's business license fee, which failed to pass as a ballot measure at the beginning of August. Schulze said he hopes to get it onto the 2028 ballot.
Schulze said his goal is to generate enough revenue to sustain essential services, particularly public safety, so National City can be a competitive and desirable place to live and do business in.
While the five-year strategic plan sets a long-term course, Schulze said the immediate focus is on the current fiscal year — and finding a way to make between $5 million and $7 million in either reductions or revenue enhancements.
