North County Report: Escondido’s Budget Woes – and a Possible Future Solution 

It’s that time of the year again. 

Cities across San Diego County are finalizing their budgets for the fiscal year that begins in July. That’s been an especially burdensome process for some cities. 

Enter Escondido, which has been struggling with an ongoing structural budget deficit and has been relying on one-time funding sources and temporary solutions to close budget gaps in the past few years. 

That’s still the case for the upcoming fiscal year. 

The City Council discussed the preliminary budget a couple weeks ago, and city staff presented a similar outlook to previous years. The city has to, once again, use one-time funding sources to close this year’s gap. Those sources are quickly running out. 

The Budget 

Escondido staff is projecting an average deficit of $18.2 million each year over the next 20 years. For the upcoming fiscal year, the city expects to use one-time funding sources and cost-reduction methods to close its budget gap. 

The city will likely use around $4.8 million in Covid relief funds from the American Rescue Plan Act, which city leaders have tapped in previous years, to cover management contracts with the Escondido Public Library and the California Center for the Arts. 

City staff said those Covid funds must be fully allocated by the end of 2024 and will no longer be a source of revenue for the city moving forward.  

Another saving grace this year will come from the elimination of 10 full-time vacant positions, which reduced the budget by almost $1 million. 

City leaders will also pull around $2.5 million from the city’s workers compensation fund to replace 39 police vehicles. 

That money would typically come from the city’s Fleet Services Fund used to maintain, fuel and replace all city vehicles. The fund once included a pot of money for future vehicle purchases to regularly replace aging vehicles and equipment, but the city emptied it to close past budget gaps. 

This is the first year since 2021 that the city didn’t tap its pension to balance its budget. The city created a pension trust fund in 2018 to set aside money to reduce pension bills and stabilize pension costs.    

Pension liability is the difference between what the city owes retirees and the amount of money available to make those payments. Last year, Escondido had about $270 million in unfunded pension liability, and city leaders ended up pulling $1.5 million from its pension trust. 

City Manager Sean McGlynn warned the City Council recently that the budget will only get more difficult to balance as the years go on.  

Without existing funds to raid, there may be significant cuts to city services as early as next fiscal year. 

“Even though we’re finding a way to manage through our current circumstances, there are looming deficits that we can’t keep pace with,” McGlynn said. 

A few city services and departments have taken a hit over the past few years as city leaders try to reduce costs without sacrificing public safety and other priorities. 

Last year, I reported that the biggest impact has been to Escondido’s maintenance and public works. That includes upkeep of parks, playgrounds, libraries, recreation centers, pools, streets, sidewalks, bridges, storm drains, fleet and other city facilities.   

City finance director Christina Holmes told me in May 2023 that city staff estimates that more than $8 million of maintenance has been deferred annually since about 2008.  

Holmes said then that the annual $8 million in deferred maintenance compounds. So, a park or recreation center that has not been upgraded could remain that way until the city finds the funds to do so. In the meantime, that leaves roughly $128 million in backlogged fixes that Escondido still can’t pay for.  

The City Council is set to approve the final budget for the upcoming fiscal year on June 19. 

Sales Tax Measure, Round Three 

Escondido residents will likely get another opportunity to vote on a sales tax measure this November. 

A citizens’ coalition called Escondido Citizens for Safety announced last week that it’s collected and submitted more than the required 7,600 signatures needed to qualify the measure. It reported collecting close to 12,000 signatures. 

The coalition is led by  the  Escondido Police Officers Association and the Escondido Firefighters Association and is supported by an array of community leaders, business, labor and public safety organizations. 

The measure will ask residents to vote on a one-cent sales tax increase that would sunset after 20 years. It also calls for a Citizens’ Oversight Committee to oversee how new revenue is spent.  

The coalition says the measure would bring in an estimated $25 million each year in new revenue to the city to close its structural budget deficit. 

Escondido has had similar ballot measures twice before that were projected to raise around $20 million annually. The City Council didn’t approve the first one in 2020, and voters rejected the second one at the ballot box in 2022. 

In Other News 

• ICYMI: The Escondido Democratic Club is no longer supporting four Democratic members of Palomar Health’s board who voted in favor of a new management agreement that the club’s leadership says could greatly reduce public access and transparency. (Voice of San Diego) 
• Speaking of Palomar Health, the healthcare district has agreed to a $250,000 settlement after disclosing to the U.S. Drug Enforcement Agency that fentanyl was diverted from automatic-dispensing equipment at its cardiac catheterization lab in Escondido. (Union-Tribune) 
• SANDAG has reduced the number of possible routes for Del Mar’s train tunnel to three options. (Union-Tribune) Related: Read more about the plan to move a portion of the train tracks that run along Del Mar’s coast into an underground tunnel here. (Voice of San Diego)