What would you do with $120.7 million? In the case of the City of Monterey, the answer is: Run the city for the fiscal year 2025-26, which goes through next June.
Sara Rubin here, looking ahead to what happens after that date. City finance officials project a $10 million structural deficit, meaning it’s baked into the ongoing revenue/expense formula, it’s not a one-time fix. It translates to a test of City Council’s leadership as they make tough decisions to set up Monterey for the future.
“Maintaining status quo is not an option,” City Manager Hans Uslar and Assistant City Manager Nat Rojanasathira wrote in a report to City Council.
This conversation has been simmering for months already, but I’m writing about it now because there are some action items at hand. At 7pm tomorrow, Oct. 21, Monterey City Council is set to discuss what direction to go when it comes to balancing the budget next year. And while they’re not yet scheduled to vote on future strategies, every time this comes up for discussion they get closer to a long-range game plan. The deficit is due largely to rising costs of the city workforce—health insurance premiums and salaries.
In general, there are two ways to solve a deficit: Generate more revenue or cut expenses, or a combination of both.
On the table for tomorrow’s discussion are several potential revenue-generating measures. Councilmembers have expressed support for a new sales tax; extending Measure G beyond its 2029 sunset date; an admission tax; a parking tax; and more. The theme is that all these new taxes require voter approval—aka, it's uncertain.
Another option is to dip into reserves. Uslar and Rojanasathira recommend against that, noting it would be a one-time (therefore partial) solution, and reserves are meant for emergencies. The reserve fund also helps boost the city’s bond rating.
I’m not sure voters will be keen to approve new taxes. Even if they say yes, the city still needs to cut spending.
That’s the painful part, and exactly how to do that will play out partly in some separate discussions. Council already voted to reduce $3 million-$4 million from the list of projects approved by the Neighborhood and Community Improvement Program, and the NCIP Committee is set to dive into which projects will be shelved when they next meet at 6pm on Wednesday, Oct. 22. It will be sort of a reverse process of what the committee normally does, which is vote on their list of priority projects to pursue.
The NCIP has suggested, approved and funded some great projects (one I like in particular is seasonal accessible walkways on Del Monte Beach, installed in 2023). This time, they’ll vote for what can be tabled to help solve a bigger problem—how to keep paying for basic city services. It’s a hard moment in the nice-to-have versus need-to-have debate, but the moment has arrived.
As always, the public is welcome to attend both meetings and offer their comments to decision-makers. Where would you cut spending in Monterey to balance the budget?
(1) comment
It would be nice if governments would learn that they have a fiduciary responsibility to manage the tax payers money well. I watched a city council meeting before the last election talking about the budget and listening to the City Manager talk about the fact that the city doesn't have a revenue problem, it has a spending problem, as is with most government, For a city of only 30,000 people Monterey is ranked 97th among the highest paying cities in the country. Salinas whic is 5 times larger is ranked 127, Santa Cruz whi is twice as large ranks 143, and Sacramento which has over a million people ranks 151. Now i know everything in California costs more but it's kind of ironic that Monterey's Labor and Salary costs are higher than cities much larger than Monterey. just for example one Fire Captain in Monterey in 2024 made 598,859 in total compensation for the year which is 114% higher than the average Fire Captain in CA. There was a Firefighter that made 537,715. Police officers make 3 to 400,000 which is 51% higher than average. Now a lot of that is overtime but why would more the of their salary be overtime than their base pay? The Library Director made 323,160 total compensation. i can go on but i'm just trying to make a point that the city spends more on personnel than cities 2, 5, 30 times larger than Monterey and yet nowhere in the discussions does cutting spending come up. It's funny that no one wants to touch the rainy day fund, but that's what it is for. Why not take the money from there to fill the deficit for the year and use that time to come up with a more practical solution that doesn't go straight to more taxes. Another thing is the fact that the city ranks as the 26th worst in CA 0out of 431 cities in unfunded pension obligations which will not be solved overnight. So yes there is a systemic problem at City Hall and like with most government officials no one wants to make the hard decisions. When businesses have problems they make cuts, when families have problems they make cuts , and when government has problems they just tax the people who pay for their excesses.
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