Finance director warns El Cajon faces multi‑year shortfalls and urges steady mitigation

City finance staff presented the fiscal year 2024 midyear report and an updated five‑year business plan on April 23, describing revenue softness and structural pressures that could drive multi-year deficits.

Director of Finance Clay Shane said sales-tax revenue is tracking below prior expectations and projected FY24 general‑fund revenues at roughly $94.9 million versus a $98.4 million budget. He said the city faces a roughly $1.3 million shortfall compared with FY23 collections and that projections show structural shortfalls continuing into later years when the city also faces the scheduled sunset of Prop J.

Shane identified three primary drivers: softer revenue performance (notably sales tax), higher CalPERS unfunded actuarial liability contributions and increased employee costs tied to tentative labor agreements. "We are currently projecting shortfalls in all 10 years of the projection window," Shane said, noting general‑fund reserves could be largely depleted if no mitigation occurs over the decade.

Councilmembers asked how much additional revenue or cuts would be needed to maintain current service levels. Shane said next year the city would need to find roughly $3.6 million of additional revenue or cutbacks to maintain status quo and later years could demand larger sums depending on outcomes for Prop J and labor costs.

Council directed staff to continue work on metrics and options that balance public‑safety priorities with other services, and the council unanimously received and accepted the midyear report and five‑year update.

Shane and councilmembers emphasized the work is a long‑lead planning exercise: staff recommended careful, steady adjustments and community engagement rather than abrupt eliminations of priorities.