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National City officials flag $16.1 million preliminary FY27 deficit; schedule second workshop to close remaining gap
Summary
City staff presented a preliminary FY27 general‑fund budget with a $16.1 million estimated shortfall and calculations showing the city could exhaust its unassigned reserves; councilmembers pressed for department‑level actuals, asked for a 0‑based review option, and instructed staff to return with detailed options at a second workshop focused on a remaining $3.0 million gap.
Mayor Morrison convened a special daytime budget workshop where finance staff presented the National City preliminary general fund budget for fiscal year 2027 and councilmembers pressed for more detailed backup and next steps.
Paul Valadez, the city's budget manager, said the preliminary general fund budget includes 382 full‑time equivalent positions (276 in the general fund) and anticipates rising pension and insurance costs. He listed several drivers of increased spending — labor agreements, inflation, contract adjustments and unfunded liabilities — and said the preliminary FY27 general‑fund deficit is estimated at $16,100,000, compared with a $9,300,000 shortfall in the FY26 adopted budget. Valadez also noted $1,900,000 in additional unfunded pension liability in the FY26…
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