NATIONAL CITY (KGTV) — National City's City Council unanimously approved a five-year strategic plan to prevent the city from falling into a $30 million budget deficit by 2029.
At Tuesday night's City Council meeting, City Manager Doug Schulze received unanimous approval to begin implementing his five-year plan — a roadmap that spells out where the city is spending too much and what it will need to cut or create to bring in more revenue.
Besides avoiding insolvency by 2030, Schulze said his five-year plan is to protect core services from cuts, from public safety to libraries, parks, and recreation.
The plan identifies stagnant revenue growth as one of the city's core financial problems.
"The problem is that we don't have a diverse revenue base. Forty percent of the city's revenues, general fund revenues, come from sales tax," Schulze said.
The plan also identifies personnel costs as too high and the main driver of the city's growing debt. In his plan, Schulze created a graph that showed how National City went quickly from a surplus in 2024 to a projected $9.3M deficit by 2026, mainly because of general fund expenditures driven by personnel costs. For that reason, Schulze says some positions will have to be cut.
"For example, we are consolidating the Finance Department, Human Resources Department, and potentially IT under what we're calling the Administrative Services Department. By doing that, we'll be able to save about $400,000 a year," Schulze said.
Beyond cuts, Schulze also wants to generate more revenue through commercial development and what's outlined in the recently approved 'National City Balanced Plan' by the Port of San Diego. It includes bringing in retailers, hotels, an RV park, and more.
Schulze also proposed that in the future, the City looks at reforming its Business License Tax Fee once again, which is expected to raise revenue from $700,000 to roughly $7 million annually. Schulze hopes to get it on the ballot as a measure by 2028.
Schulze said the commercial development in the National City Balanced Plan, along with business license tax reform, could also help rebuild the city’s reserves or its “rainy day fund.” Schulze said those reserves are already $7 million below where they should be, and without changes, could drop to just $300,000 by 2030.
Residents who sat through the full presentation had mixed reactions, feeling both hopeful and in need of a little more information.
JoAnn Fields, who works in National City and is a Southbay Advocate, said she appreciated the framework but wanted more specifics with numbers.
"It's a great outline. I think there needs to be more details," Fields said. "But how much money do we expect to generate? How much money is broken down by department?" Fields said.
Long-time National City resident Edward Nieto said he has nearly 40 years of government accounting experience. Nieto said the presentation was a reality check about how quickly money was running out to pay for city services and replenish the city's reserves — but he also wanted more specifics on timing.
"I wanted timelines for when these things are going to happen? When are they going to help our community? Those were the things I would have liked to have seen that weren't on the plan, but it's a start. And it's more of a start than we've ever had before," Nieto said.
In addition to approving the five-year plan, the council also voted to authorize Schulze to use new software to analyze the city's budget, providing better data to support near-term financial decisions.
