South County Report: Budget Blues

It’s budget season in South County. For some cities, that means hard choices and sharp disagreements. For others, it’s a time for self-congratulation and maybe a bit of well-timed politicking. 

Across our region, public agencies are struggling. Covid-era infusions of federal support are drying up as the economic outlook falters and decisions made in previous years – employee raises, new programs, splashy projects – become unaffordable. 

Three South County cities – Chula Vista, Imperial Beach and National City – all adopted budgets this month. They’re regional neighbors but you wouldn’t know it based on their balance sheets. 

I recently combed through budget documents in all three cities. Here’s what I learned and what it means. 

Chula Vista 

On paper, South County’s largest city is a budget darling. As Mayor John McCann frequently points out in his campaign to fill a vacant seat on the San Diego County Board of Supervisors, Chula Vista recently passed a balanced budget that fully funds city services without cutting programs, raising taxes or raiding city reserves. 

The city’s roughly $640 million budget, adopted last month, is the largest in the city’s history. The budget includes new firefighters and police officers, improvements to city parks and recreation centers and replacement of a city bridge. 

How did Chula Vista balance its budget without painful cuts like those currently tormenting neighboring San Diego? Part of the credit goes to what McCann refers to as Chula Vista’s pro-business policies: Streamlined permitting, new home construction and the recently opened Gaylord Pacific Resort on the city’s redeveloped bayfront, all of which fueled growth in property, sales and hotel tax revenue. 

Another key factor is two tax hikes approved by voters in 2016 and 2018. Measure P and Measure A each added half a cent to the city’s sales tax to pay for infrastructure and public safety. Together, the two measures will contribute roughly $62 million to the city’s budget this year. 

That matters because tax increases have become an issue in the District 1 Supervisor race. McCann says he opposes new taxes and accuses his opponent, Imperial Beach Mayor Paloma Aguirre, of supporting them. Aguirre denies that but she has sent conflicting signals. 

McCann is an ardent supporter of both of Chula Vista’s tax increases. He says that doesn’t contradict his anti-tax stance in the Supervisor race because Chula Vista’s tax increases were targeted for specific purposes, approved by voters and overseen by citizen commissions. The beauty of a tax hike, it seems, is in the eye of the beholder. 

Imperial Beach

Imperial Beach, which operates on a two-year budget cycle, approved budgets for the next two years earlier this month. Unlike in Chula Vista, there were no victory laps after the vote. 

The $50 million budget for the coming year includes the unpopular elimination of city swim programs at the Mar Vista High School pool. Councilmembers voted late last year to eliminate the programs because they said the programs served too few people to justify their cost. Eliminating the programs, along with a few other smaller cuts, reduced the Recreation Department’s budget by $562,000. 

City sales tax revenue is flattening amid a decline in tourism. Inflation and raises granted to city employees are increasing the cost of services. Even with the swimming cut, the city will use more than $800,000 in reserve funds to pay for several one-time expenditures, including upgrading firefighting equipment, replacing some city vehicles and designing a city pickleball court. City Manager Tyler Foltz’s annual budget message included blunt instructions to department heads to control costs and streamline operations. 

The city’s use of reserves echoes another debate playing out in the District 1 Supervisor race. Aguirre has argued that the county should consider using reserve funds, which she calls “the people’s money,” to cushion the effects of anticipated federal budget cuts. McCann says reserves should be used only in emergencies and the county should cut what he calls wasteful or non-essential spending to balance its books. 

National City 

Some of the sharpest budget debates in South County took place in National City this year. Councilmembers sparred over whether to use what the city calls unassigned funds – money held over from previous years or not yet spent on anticipated projects – to balance the budget and finance programs that some Councilmembers say will promote economic growth. 

The Council even argued over what such unassigned funds actually are. Mayor Ron Morrison said the funds are akin to city reserves and should be preserved so they can be used for upcoming costs such as an anticipated rise in pension payments and completion of capital projects now underway. 

Several Councilmembers disagreed, saying the city historically has invested too little in economic development and needs to spend more to bolster local businesses, maintain city services and increase tax revenues. 

In the end, the Council voted last week to use roughly $10 million in unassigned funds to balance a budget totaling $145 million. The budget includes new employees in the police and fire departments plus additional custodians to address residents’ complaints about park bathrooms frequently used by homeless people. 

Deputy Mayor Marcus Bush said the additional spending would include efforts to raise the city’s economic profile. 

“We’re trying to raise more sales tax revenue and hotel [taxes] with partnering with the Chamber of Commerce and having more events – art, food and culture – and encouraging people to spend more,” Bush said. 

At the same time, Bush said, the city would seek to save money by leaving some employee vacancies unfilled and “looking at which departments could make further cuts.” 

Supervisor Candidates Square Off – Again  

Political junkies who sat at the edge of their seats during last week’s debate between candidates in the District 1 Supervisor race got another chance last night to watch rivals Paloma Aguirre and John McCann in action. 

The candidates faced off in a more informal – and in some ways more revealing – setting at a town hall in Spring Valley hosted by an array of local civic groups. The event took place in a school auditorium. There were boxes of pizza and bags of chips for attendees. Candidates took questions from the stage. 

Head moderator Cheryl Alethia Phelps used an innovative format for some questions – permitting only “yes,” “no” or “I don’t know” answers – to cut down on political bluster. 

The format revealed that McCann would seek to consolidate Spring Valley, which is currently split between two county supervisorial districts, into District 1. That would require removing part of the unincorporated community from Supervisor Monica Montgomery Steppe’s District 4. Aguirre, endorsed by Montgomery Steppe, said she remains undecided about the idea. 

The candidates’ positions on homelessness also came into sharper focus. McCann touted Chula Vista’s approach to the issue, which includes a street outreach team and a tiny home shelter that requires residents to remain sober and commit to progressing toward self-sufficiency. 

McCann said he opposes a similar county-funded tiny home shelter in the Lemon Grove-Spring Valley area because those communities already struggle with homelessness and the shelter would be located near a liquor store and cannabis dispensary. He said he would seek to halt the project and move it elsewhere. 

Aguirre stressed the need for compassion, citing her own city’s efforts to work with homeless people until they decide on their own to accept services. She said she would seek to speed up county plans to hire more mental health workers and establish crisis response centers where people struggling on the streets can be assessed and referred to service providers. 

Unlike McCann, Aguirre said she supports the Lemon Grove homeless shelter, which she said meets a critical need and can be modified to address neighbors’ concerns. 

Attendee Jeff Redondo of Chula Vista said he attended to get a closer look at Aguirre, since he’s already familiar with McCann as Chula Vista’s mayor. Redondo’s top issues in the race? Homelessness and the cost of housing. He said he was leaning toward McCann but, like all District 1 voters, would render his final verdict on July 1, the last day to vote in the race.