{"id":2272,"date":"2026-06-06T21:03:22","date_gmt":"2026-06-07T04:03:22","guid":{"rendered":"https:\/\/losangelesmovinginsider.com\/index.php\/2026\/06\/06\/national-city-adopts-89-1m-budget-shrinks-deficit-amid-ongoing-reserve-concerns\/"},"modified":"2026-06-06T21:03:22","modified_gmt":"2026-06-07T04:03:22","slug":"national-city-adopts-89-1m-budget-shrinks-deficit-amid-ongoing-reserve-concerns","status":"publish","type":"post","link":"https:\/\/losangelesmovinginsider.com\/index.php\/2026\/06\/06\/national-city-adopts-89-1m-budget-shrinks-deficit-amid-ongoing-reserve-concerns\/","title":{"rendered":"National City adopts $89.1M budget, shrinks deficit amid ongoing reserve concerns"},"content":{"rendered":"
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National City\u2019s City Council this week adopted a $89.1 million general fund budget for fiscal year 2026-27, approving a spending plan that still carries a $12.7 million deficit \u2014 but one significantly reduced from where the city stood just weeks ago.<\/span><\/p>\n

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The adopted budget reflects roughly $3.5 million in reductions from the preliminary spending plan presented May 4, when staff projected a $16.1 million deficit large enough to exhaust the city\u2019s unassigned fund balance\u00a0and leave it an additional $3 million short. The city\u2019s unassigned fund balance, the most liquid and accessible of the city\u2019s overall reserve balance, stood at $23.4 million at the end of fiscal year 2025. It has since fallen to an estimated $13.1 million and is projected to sit at approximately $500,000 by June 30, 2027.<\/span><\/p>\n

What that figure means for the city\u2019s fiscal health, however, was a point of disagreement on the council. Mayor Ron Morrison viewed the near-depletion of the unassigned balance as a serious warning sign, while Councilmember Jose Rodriguez argued it represents just one account within a much larger reserve structure.<\/span><\/p>\n

Morrison said the near-depletion of the unassigned fund balance is cause for alarm \u2014 and warned that the city\u2019s spending problem will follow it into next year. He noted the $12.7 million shortfall carries over, with an additional roughly $2 million in pension payments due on top of that.<\/span><\/p>\n

\u201cAbsolutely,\u201d Morrison said when asked if the reserve outlook is concerning, but described the adopted budget as a legal requirement rather than a finished product. \u201cThis is just what we\u2019re turning into the state and we\u2019ll be back at it in August.\u201d<\/span><\/p>\n

Rodriguez, who championed final passage, offered a different read on the city\u2019s fiscal position. He pointed to a city investment report presented at the same meeting showing the city\u2019s combined reserves \u2014 spread across various accounts, much of which is restricted or designated for specific purposes \u2014 at approximately $98 million as of last December, arguing the unassigned fund balance is just one piece of that larger picture.<\/span><\/p>\n

\u201cWe can\u2019t tell people we\u2019re broke when we have a hundred million in the bank,\u201d Rodriguez said. He also contended the $12.7 million deficit overstates the real structural gap, arguing vacant positions and understated investment earnings could reduce the actual annual shortfall to somewhere between $5 million and $7 million. \u201cIt comes from a scarcity mindset, that we\u2019re running out of something we\u2019re really not. And telling people that creates an undue sense of panic.\u201d<\/span><\/p>\n

Acting City Manager Stephen Manganiello credited staff with the deficit turnaround, calling the reductions a strong first step while acknowledging more difficult decisions lie ahead.<\/span><\/p>\n

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\u201cIf we are going to get the city on a path to fiscal sustainability, we\u2019re all going to have to work together with the staff, with the council, with the community to make some difficult decisions over the next six to 12 months,\u201d Manganiello said.<\/span><\/p>\n

The budget\u2019s largest drivers remain police and fire, with personnel costs rising $7.2 million from the prior year due to recently negotiated labor agreements, increased pension liability payments and higher general liability insurance premiums. Revenue growth has been modest \u2014 sales tax up 1.9%, property tax flat.<\/span><\/p>\n

An amendment to the city\u2019s nutrition center budget, which preserves the program\u2019s daily meal cap at 250 rather than reducing it to 200 as per staff recommendation, sparked the meeting\u2019s sharpest exchanges. Rodriguez argued the $235,000 difference was a matter of priorities.<\/span><\/p>\n

\u201c$235,000 will not make or break us,\u201d Rodriguez said. \u201cThe purpose of the county program is to provide food for needy individuals in our community.\u201d.<\/span><\/p>\n

\n<\/div>\n

Morrison pushed back, making a substitute motion to adopt the budget as presented by staff and revisit the item in August. That motion failed 3-2 \u2014 with Morrison and Councilmember Luz Molina casting dissenting votes \u2014 before the council returned to the original motion. It passed 4-1 as Morrison cast the lone dissenting vote.<\/span><\/p>\n

\u201cIt\u2019s always easy to say it\u2019s just $235,000 when it\u2019s somebody else\u2019s money,\u201d Morrison said. \u201cIt\u2019s not ours.\u201d<\/span><\/p>\n

With the budget now adopted, Manganiello said staff will convene a series of strategic planning workshops beginning in August, focused on priority-based budgeting and continued pursuit of revenue initiatives including business license tax reform, a short-term rental ordinance and digital billboard expansion.<\/span><\/p>\n

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The city’s general fund reserves will shrink to roughly $500,000 by fiscal year’s end under the adopted budget.<\/p>\n","protected":false},"author":1,"featured_media":2271,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-2272","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\nNational City adopts $89.1M budget, shrinks deficit amid ongoing reserve concerns - Los Angeles Moving Insider<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/losangelesmovinginsider.com\/index.php\/2026\/06\/06\/national-city-adopts-89-1m-budget-shrinks-deficit-amid-ongoing-reserve-concerns\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"National City adopts $89.1M budget, shrinks deficit amid ongoing reserve concerns - 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