This new fiscal year is expected to be Chula Vista’s largest spending year yet, exceeding $300 million to address rising costs in maintaining public services and to finance the newly opened billion-dollar Gaylord Pacific Resort.
City leaders are expected to hold a public hearing and vote Tuesday on the proposed 2025-26 budget, which starts July 1.
The draft spending plan includes $305.6 million for the general fund, which pays for wide-ranging city services, such as police and fire protection, public works and libraries. This is an increase of $31.5 million over the current budget and the first time expenses for San Diego County’s second-largest city are projected to break $300 million, officials said. About $30 million is also allocated for capital improvement projects, most of which are proposed for street pavement, sidewalk upgrades, and traffic-calming efforts.
Chula Vista expects to break even again and see “moderate economic growth,” City Manager Maria Kachadoorian said in the new budget report, amid the imminent possibility of an economic recession and without making deep cuts to public services or using reserves, something its neighbor, San Diego, is considering doing for the first time in at least a decade.
Some highlights in the new proposed budget include:
- Adding 16 new positions, including a police community relations specialist, a parks maintenance staffer for Harborside Park and new parks underway, an engineering position to assist with development projects and a dozen fire personnel to staff a new fire station on the bayfront;
- Improving police training and records management;
- Conducting internal audits;
- Funding operations for Casa Casillas, a soon-to-open community arts center on Fourth Avenue.
The overall increase in expenses is largely due to personnel costs, such as $10.6 million tied to labor agreements and $4.3 million in pension and health insurance costs. It also includes transferring about $15 million from the general fund to a separate fund set up to cover the city’s portion of the Gaylord Pacific’s financing and nearly $1 million in rising gas, electric and water costs.
Under the $305.6 million spending plan, most city departments are projected to increase expenditures. For example, the police department’s current budget of $59.5 million is proposed to increase to $66.3 million, the fire department from $37.2 million to $41.3 million and public works from $24.3 million to $27.4 million.
Revenues with the largest projected increases include property taxes, with a $6.4 million estimated jump over the current year. The main drivers: hikes in property values, expected at $3.9 million, and the Gaylord Pacific, generating about $2.5 million. Chula Vista’s transient occupancy tax (TOT) revenues are estimated to spike at $21.7 million, with an $11 million contribution from the long-awaited, $1.3-billion hotel and convention center. According to budget reports, Chula Vista’s TOT earnings have climbed over the years from $8.8 million in 2023 to $10 million in the current fiscal year.
The Gaylord Pacific’s TOT revenues are pledged for its financing, however. Its complex financial arrangement combines more than $700 million in private monies from RIDA Development and public funding of more than $300 million between Chula Vista and the Port of San Diego. The city and port plan to use general fund and tax revenues from the resort property to pay for taxable and tax-exempt bonds.
This proposed budget also includes $30.8 million in revenues from Measure P, a temporary half-cent sales tax for infrastructure that voters overwhelmingly renewed in November through 2037. It was set to sunset in 2027. Officials said about $10 million of funds generated in the new year will cover improvements to parks, recreation centers, drainage, sidewalk repair and other facilities. Measure A, also a half-cent sales tax that does not expire and covers police and fire departments’ needs, is projected to generate the same amount of revenue as Measure P, which is a $1.5 million increase over the current fiscal year. Some Measure A funds will pay for the addition of three firefighters and a police community relations specialist.
The City Council meeting begins at 5 p.m.
