National City’s City Council has signed off on an $89.1 million general fund budget for fiscal year 2026–27, closing part of a looming gap while putting some serious strain on the city’s savings account. The plan keeps marquee services on the table, including meals at the senior nutrition center, and leans on fund transfers to absorb rising personnel and benefit costs.
Numbers behind the $89.1M
The adopted package combines about $79.7 million in general fund operating costs with roughly $9.38 million in transfers to other funds, totaling the $89.1 million headline number in the city’s financial plan. As laid out in the budget documents from the City of National City, the new spending plan trims the earlier projected gap and keeps most day-to-day services in place.
Council votes and contested moves
The final motion to approve the budget passed on a 4-1 vote, with Mayor Ron Morrison in opposition after his alternative proposal failed on a 3-2 tally, according to The San Diego Union-Tribune. That outlet reports that councilmembers chose to keep the Nutrition Center’s daily meal cap at 250 instead of dropping it to 200. The change, estimated at about $235,000, keeps plates full for now, while personnel costs remain a major reason the total budget climbed.
Reserve red flags
At a May 4 budget workshop, staff warned that an early look at the fiscal year 2027 gap had ballooned to roughly $16.1 million and that the unassigned general fund balance was already shrinking. Local meeting coverage notes that staff used the projected fiscal year 2025 ending balance to show how the shortfall could roll forward and cautioned that unassigned reserves, about $23.4 million at the end of fiscal year 2025, might drop to around $500,000 by June 30, 2027 if nothing changes. A summary of that discussion is available from the Citizen Portal.
What officials say
Acting City Manager Steve Manganiello told the council that staff will have to make tough calls over the next six to 12 months to put the city on a solid financial footing. He pushed for a blend of short-term belt-tightening and longer-range revenue strategies. Coverage of the meeting frames his comments as part of a broader effort to pair department-by-department reviews with new revenue ideas and strategic planning work this summer, per The San Diego Union-Tribune.
Next steps: revenue and program choices
To rebuild reserves, staff signaled they will pursue several revenue moves, including business license tax reform, stepped-up enforcement under a short-term rental program, and a possible expansion of digital billboards. The city’s financial plan lists business license and permit revenue among its core income streams, and officials are already rolling out a short-term rental ordinance and permitting system that could generate additional fees. Details are outlined in documents from the City of National City.
