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National City council adopts FY 2025–26 budget, projects a multimillion-dollar general fund shortfall
Summary
Council approved a $156.9 million citywide budget for FY 2025–26 but staff projections show a roughly $9.3 million general fund deficit for the year and an ongoing use of reserves to cover the gap.
The National City City Council adopted the citywide operating and capital budget for fiscal year 2025–26, approving total appropriations of roughly $156.9 million and authorizing a $1.0 million draw from the city’s economic contingency reserve for a downtown revitalization project.
City staff told the council the proposed general fund budget projects $73.7 million in revenue against $82.9 million in expenditures, producing about a $9.3 million shortfall for next year. The staff presentation noted two revenue increases since the council’s last review — an upward revision to sales tax projections (+$518,000) and a franchise-fee escalation (+$321,000) — but said the budget still requires the planned use of roughly $8.3 million from unassigned fund balance and $1.0 million from the economic contingency reserve.
City staff cautioned that labor negotiations scheduled before the next fiscal year were not included in the projection and could add further costs. Councilmembers stressed the budget is a living document: several members emphasized the need for ongoing monitoring, midyear adjustments and work to identify recurring savings or revenue increases.
The council’s action establishes the budget for the coming year and directs departments to proceed within the approved appropriations. No vote tally was read aloud in the meeting record; the mayor announced the motion passed with those present.
