National City took the first public steps toward addressing the city’s financial goals through 2025 and the next budget cycle during its Feb. 21 City Council meeting.
City Manager Brad Raulston said the city has just begun internal budgeting meetings. A workshop with an initial city-proposed budget will be held on April 18 along with a follow up workshop on May 16. The city anticipates adopting a balanced budget in June.
A summary of council member-supplied priorities, gathered individually in recent weeks, include maintaining a balanced budget, district-specific communication, the ratio of ownership to rental housing, homelessness, public safety, infrastructure, and city services such as cleanliness that impact quality of life.
Council will be discussing which priorities will be addressed in the coming year at an upcoming March 24 meeting, and staff will develop implementation plans for those priorities including budget recommendations.
“We will also be giving an update on recruitment and retention efforts on March 7 and the initial 5-year financial forecast on March 7,” Raulston said.
The city has seven functional groups funded by the city, Raulston said: police, fire, public works and engineering, community development, library and community services, the housing authority, and leadership and administration which includes the city manager, attorney services, finance, human resources, information technology and the city clerk.
About 50% of the city’s budget is supported by the General Fund, Administrative Services Director Molly Brennan said, supplemented by one-time revenues used for specific projects.
“The idea is that if we’re going to be adding expenditures, we need to be adding revenue to support those expenditures,” Brennan said.
Currently, about 75% of the city’s expenditures go toward personnel costs including labor contracts, recruitment, pension obligations and staffing. Of those expenditures, 46% is spent on police and 19% is spent on fire; community development uses 12% of the funding and administration uses 10% while the remaining functional groups all use less than 7% apiece.
Over 35% of the general fund comes from sales tax while just 12% of the general fund comes from property tax, Brennan said, and “there is not an opportunity to grow that piece of the pie” without a lot of property changing hands.
Although Brennan said the city does have some unassigned revenue, due in part to shifts in how pensions were funded in recent years, that revenue will be needed to maintain a balanced budget.
“Not to preview the 5-year plan but most importantly with the American Rescue Plan Funding going away, we’re going to need our unassigned revenue to balance the budget in the coming years,” Raulston said.
