National City council adopts FY25 budget with $2M reduction plan after extended debate

Budget Manager Paul Valadez presented the proposed FY25 general‑fund budget and explained a city‑manager reduction plan intended to reduce the planned draw on reserves. Valadez said the manager’s plan includes a 1 percent salary‑savings target across general‑fund departments (about $526,000), a 9 percent reduction in maintenance and operations for those same departments, and a one‑year 50 percent reduction in vehicle‑replacement charges that would use $665,000 of accumulated vehicle‑replacement fund balance. Staff also listed longer‑term strategic measures — a comprehensive fee study, revised cost‑allocation methods, and pursuit of grant and TOT revenue opportunities — designed to strengthen the city’s fiscal position.

Valadez showed that incorporating the reduction plan reduces the proposed use of unassigned fund balance from roughly $7.0 million to about $4.9 million in FY25 and raised the projected ending unassigned fund balance accordingly. He stressed departments will be assigned reduction targets and will bring forward specific reduction proposals and service‑impact analyses; staff plans to return with a midyear update and an updated five‑year forecast.

Councilmembers debated the package at length. Several members urged caution and called for needs assessments before hiring ongoing positions; others emphasized protecting public‑safety staffing. A number of public speakers urged fiscal restraint and transparency: one called for eliminating council discretionary budgets entirely, another urged implementation of reductions now to avoid a larger problem later.

After floor amendments that clarified mayoral reimbursement procedures and the process for pre‑approved conferences (see separate council policy discussion), the council moved to adopt the FY25 budget that reflects the city manager’s reduction plan and the amended policy direction. The council approved the budget and reduction plan (vote recorded as approved per meeting record) and directed staff to return with midyear updates and with needs‑assessment results for proposed enhancements, including community‑services staffing priorities.

City Manager said departments will be tasked with identifying implementable reductions and that some proposed enhancements may be staged or deferred into the midyear review depending on actual revenue and early‑year results. Valadez said the large drivers behind the FY25 gap are the end of ARPA funds, lower sales‑tax forecasts, higher liability insurance costs and the expiration of a federal SAFER grant that had funded firefighter positions.

The council’s action adopts a FY25 spending plan while formally directing staff to implement the $2.0M reduction plan and to return with detailed proposals and a midyear forecast.