Chula Vista

Pandemic May Force Chula Vista to Dip Into Emergency Reserves

South Bay city has lost out on sales and property tax revenue

NBCUniversal, Inc.

The pool is still closed. Kids still can’t climb on the playground. Libraries are quieter than ever.

Such is life in Chula Vista these days.

“This was the go-to place when I was a kid,” said Jim Phillipo while standing outside the Parkway Pool just a few blocks from Chula Vista City Hall.

Unfortunately for Phillipo and more than 250,000 Chula Vistans, the coronavirus pandemic closed Parkway, all the city’s recreation centers and its libraries. Chula Vista was forced to let go all of its seasonal employees.

“Basketball, the referees, the people that ran the community center here,” Phillipo checked off. “It’s just the way it has to be, and we have to grind through it.”

“It’s very scary times,” Maria Kachadoorian said.

Chula Vista’s Assistant City Manager said the South Bay city was doing well financially and planned on ending this fiscal year with a million-dollar budget surplus.

“And then the COVID virus chaos ensued,” sighed Kachadoorian.

That chaos closed stores, killed sales tax revenue, and turned Chula Vista’s surplus this year into a deficit next year.

“I’m looking forward to going back to shopping,” Kachadoorian said half-jokingly.

City governments rely heavily on sales tax revenue to pay salaries and keep city services moving. Kachadoorian said 18% of Chula Vista’s budget comes from sales taxes and the coronavirus walloped most of it.

“For us to cut services, it just adds to the pain that we’re already experiencing,” she said.

However, Kachadoorian has survived rough times before. A recession crippled many U.S. cities a dozen years ago. She was Chula Vista’s Finance Director at the time. Kachadoorian said the city took steps to conserve money every year to start building an economic emergency reserve.

“We knew at some point another recession would hit us. No one expected this, right?” she said.

She added Chula Vista’s economic emergency reserve is approximately $7 million strong. The city also has a $24 million operating reserve that she’d like to avoid dipping into.

Tuesday night, the Chula Vista City Council started considering the proposed budget for the 2020-2021 fiscal year. Kachadoorian said she knows there will be changes and tightening before it’s finally approved later this summer. She said their goal is to avoid major cuts that will impact residents.

“We’re trying to be conservative as we’ve always been, but we may be off. The economy may have slipped a lot further than we anticipate," she said.

“I think it will all come back,” Phillipo said, confident he’ll jump back into the Parkway Pool soon. “You know, it would be nice when it’s open. No doubt about it.”

Contact Us