The URL can be used to link to this page

Home My WebLink About2026 05-18 CC AGENDA PKT - SPECIAL - BUDGET WORKSHOPAGENDA Budget Workshop City Council Chamber - 1243 National City Boulevard, National City, CA Ron Morrison, Mayor Stephen Manganiello, Acting City Manager Luz Molina, Vice-Mayor - District 1 Heidi Skinner, Interim City Attorney Jose Rodriguez, Councilmember -District 2 Shelley Chapel, MMC, City Clerk Ditas Yamane, Councilmember – District 3 Marcus Bush, Councilmember– District 4 _______________________________________________________________________ The City Council also sits as the City of National City Community Development Commission, Housing Authority, Joint Powers Financing Authority, and Successor Agency to the Community Development Commission as the National City Redevelopment Agency Thank you for participating in local government and the City of National City Council Meetings. Meetings: Regular City Council Meetings are held on the first and third Tuesday of the month at 6:00 p.m. Special Closed Session Meetings and Workshops may be same day, the start time is based on needs. Check Special Agendas for times. Location: Regular City Council Meetings are held in the Council Chamber located at City Hall, 1243 National City Boulevard, National City, CA 91950, the meetings are open to the public. Agendas and Material: Agendas and Agenda Packet for items listed are available on the City website, and distributed to the City Council no less than 72 hours before the City Council Meeting. Sign up for E-Notifications to receive alerts when items are posted. Public Participation: Encouraged in a number of ways as described below. Members of the public may attend the City Council Meeting in person, watch the City Council Meeting via live web stream, or participate remotely via Zoom. Recording of Meetings are archived and available for viewing on the City’s website. To listen to the live stream in Spanish, you must register for Zoom prior to the meeting for access. All Zoom registration must be completed two (2) hours prior to the City Council Meeting for access. Public Comment: Persons wishing to address the City Council on matters not on the agenda may do so under Public Comments. Those wishing to speak on items on the agenda may do so when the item is being considered. Please submit a Speaker’s Slip to the City Clerk before the meeting or immediately following the announcement of the item. All comments will be limited up to three (3) minutes. The Presiding Officer shall have the authority to reduce the time allotted to accommodate for a large number of speakers. (City Council Policy 104) All written comment must be submitted no later than four (4) hours prior to the start of the meeting to allow time for distribution to the City Council. EFFECTIVE JANUARY 1, 2025 All Contributions to Candidates and Current Elected Officials are required to self-report a Declaration of Campaign Contribution to a Councilmember of more than $500 within the past year (effective Jan 1, 2025). This report may be included on the Public Comment Speaker Slip to be completed prior to the City Council Meeting. Spanish Interpretation Services: Spanish Interpretation Services are available; please contact the City Clerk before the start of the meeting for assistance. clerk@nationalcityca.gov American Disabilities Act Title II: In compliance with the American Disabilities Act of 1990, persons with a disability may request an agenda in appropriate alternative formats as required by Title II. Any person with a disability who requires a modification or accommodation to participate in a meeting should direct such request to the City Clerk’s Office (619) 336-4228 at least 24 hours in advance of the meeting. AGENDA Budget Workshop City Council Chamber - 1243 National City Boulevard, National City, CA Ron Morrison, Mayor Stephen Manganiello, Acting City Manager Luz Molina, Vice-Mayor - District 1 Heidi Skinner, Interim City Attorney Jose Rodriguez, Councilmember -District 2 Shelley Chapel, MMC, City Clerk Ditas Yamane, Councilmember – District 3 Marcus Bush, Councilmember– District 4 _______________________________________________________________________ The City Council also sits as the City of National City Community Development Commission, Housing Authority, Joint Powers Financing Authority, and Successor Agency to the Community Development Commission as the National City Redevelopment Agency Gracias por participar en las reuniones del gobierno local y del Consejo de la Ciudad de National City. Reuniones: Las reuniones regulares del Consejo Municipal se llevan a cabo el primer y tercer martes del mes a las 6:00 p.m. La reunión especial de sesión privada y los talleres pueden ser el mismo día, la hora de inicio se basa en las necesidades. Consulte las agendas especiales para conocer los horarios. Ubicación: Las reuniones regulares del Concejo Municipal se llevan a cabo en la Cámara del Consejo ubicada en el Ayuntamiento, 1243 National City Boulevard, National City, CA 91950, las reuniones están abiertas al público. Agendas y Material: Las Agendas y el Paquete de Agenda para los temas enumerados están disponibles en el sitio web de la Ciudad y se distribuyen al Concejo Municipal no menos de 72 horas antes de la Reunión del Concejo Municipal. Regístrese para recibir notificaciones electrónicas cuando se publiquen artículos. Participación pública: Se fomenta de varias maneras como se describe a continuación. Los miembros del público pueden asistir a la Reunión del Concejo Municipal en persona, ver la Reunión del Concejo Municipal a través de la transmisión web en vivo o participar de forma remota a través de Zoom. Las grabaciones de las reuniones están archivadas y disponibles para su visualización en el sitio web de la Ciudad. Para escuchar la transmission en Español, registration por Zoom es requerido antes del comienzo de la sesión. Todo registro para la trasmisión por Zoom debe completarse dos (2) horas antes de la Reunión del Concejo Municipal. Comentario Público: Las personas que deseen dirigirse al Concejo Municipal sobre asuntos que no están en la agenda pueden hacerlo bajo Comentarios públicos. Quienes deseen hacer uso de la palabra sobre los temas del programa podrán hacerlo cuando se esté examinando el tema. Por favor, envíe una solicitud del orador al Secretario de la Ciudad antes de la reunión o inmediatamente después del anuncio del artículo. Todos los comentarios estarán limitados a tres (3) minutos. El Presidente tendrá la autoridad para reducir el tiempo asignado para dar cabida a un gran número de oradores. (Política del Concejo Municipal 104) Si desea enviar comentarios por escrito, envíe un correo electrónico a la Oficina del Secretario de la Ciudad al menos 1 hora antes de la Reunión del Consejo Municipal para dar tiempo a la distribución al Consejo Municipal. Todos comentarios deben estar sometidos a más tardar cuatro (4) horas antes del comienzo de la sesión. A PARTIR DEL 1 DE ENERO DE 2023 Todas las contribuciones a los candidatos y funcionarios electos actuales deben autoinformar una Declaración de contribución de campaña a un concejal de más de $ 250 en el último año (a partir del 1 de enero de 2023). Este informe puede incluirse en el Recibo del orador de comentarios públicos que se completará antes de la reunión del Concejo Municipal Servicios de interpretación en español: Los servicios de interpretación en español están disponibles, comuníquese con el Secretario de la Ciudad antes del inicio de la reunión para obtener ayuda. Título II de la Ley de Discapacidades Americanas: En cumplimiento con la Ley de Discapacidades Americanas de 1990, las personas con discapacidad pueden solicitar una agenda en formatos alternativos apropiados según lo requerido por el Título II. Cualquier persona con una discapacidad que requiera un modificación o adaptación para participar en una reunión debe dirigir dicha solicitud a la Oficina del Secretario de la Ciudad (619) 336-4228 al menos 24 horas antes de la reunión. State of California ) )ss. County of San Diego ) AFFIDAVIT OF POSTING I, Shelley Chapel, MMC, City Clerk of the City of National City, hereby declare under penalty of perjury that this notice of a Special Meeting – Budget Workshop was called by the City Council of the City of National City was posted and provided on Thursday, May 14, 2026, at 6:00 p.m. Said meeting to be held Monday, May 18, 2026, at 2:00 p.m. in the City Hall, City Council Chambers, 1243 National City Blvd., in the City of National City, California. Said notice was posted on the Bulletin Boards in front of City Hall and the Library. Shelley Chapel Shelley Chapel, MMC, City Clerk AGENDA City Council Workshop Monday, May 18, 2026, 2:00 p.m. City Council Chamber - 1243 National City Boulevard National City, CA Pages 1.CALL TO ORDER 2.ROLL CALL 3.PLEDGE OF ALLEGIANCE 4.PUBLIC COMMENT (Public Comment will be Restricted to Agenda Items Only) 5.STAFF REPORT 5.1 Fiscal Year 2026-2027 Budget Workshop No. 2 2 Recommendation: Review, Receive Presentation, and Provide Staff Direction. 6.ADJOURNMENT AGENDA REPORT Department: Finance Prepared by: Paul Valadez, Budget Manager Meeting Date: Monday, May 18, 2026 Approved by: Stephen Manganiello, Acting City Manager SUBJECT: Fiscal Year 2026-2027 Budget Workshop No. 2 RECOMMENDATION: Review, Receive Presentation, and Provide Staff Direction. BOARD/COMMISSION/COMMITTEE PRIOR ACTION: Not Applicable. EXPLANATION: A recap of the Fiscal Year 2026-2027 preliminary budget from May 4th will be presented at Workshop No. 2, as well as staff recommended budget reductions and department discussions. FINANCIAL STATEMENT: Not Applicable at this time. RELATED CITY COUNCIL 2020-2025 STRATEGIC PLAN GOAL: Balanced Budget and Economic Development ENVIRONMENTAL REVIEW: This is not a project under CEQA, and is therefore, not subject to environmental review. CCR15378; PRC 21065. PUBLIC NOTIFICATION: The Agenda Report was posted at least 72 hours before the Regular Meeting date and time, and 24 hours before a Special Meeting in accordance with the Ralph M. Brown Act. ORDINANCE: Not Applicable EXHIBIT: Exhibit A – PowerPoint Presentation – FY2027 Budget Workshop #2 Page 2 of 59 May 18, 2026 Budget Workshop #2 Fiscal Year 2026/2027 Page 3 of 59 Discussion Items •National City’s Budget Process •Recap of FY27 General Fund Preliminary Budget •Department Discussions •Revenue Initiatives May 18, 20262|Page 4 of 59 Modified Zero-based Budgeting •Discretionary accounts are zero-based •Contracts •Professional Services •Other M&O accounts •Increases limited to inflation or existing obligations •Non-discretionary are not zero-based •Personnel •Unfunded Accrued Liability (UAL) •Pension Obligation Bond •Liability and Worker’s Compensation premiums May 18, 20263|Page 5 of 59 Budgeting Process •Baseline to maintain current service levels •Departments enter zero-based budget detail •Finance develops non-discretionary budgets •Enhancement requests submitted separately •Requests to enhance current level of service •New staffing requests •New program requests •City Manager review •Ensures baseline budget is for current service levels •Reviews justifications for enhancement requests •FY27 Preliminary Budget includes zero enhancement requests May 18, 20264|Page 6 of 59 General Fund Revenues Preliminary FY 2027 Budget May 18, 20265| FY 2026 FY 2027 FY 2026 Budget FY 2026 Budget Adopted Prelim to FY 2027 to FY 2027 Budget Budget Prelim Budget Prelim Budget Sales & Use Tax 24,261,000 24,723,000 462,000 1.9% District Transaction Tax 16,868,000 18,125,000 1,257,000 7.5% Property Tax 5,082,384 4,946,900 (135,484)(2.7%) Property Tax Allocated (2,296,946)(2,243,150)53,796 (2.3%) Property Tax in Lieu of VLF 9,837,550 9,896,000 58,450 0.6% Other Revenues 19,946,009 20,914,153 968,144 4.9% Transfers-in 5,500 5,500 -0% Total 73,703,497 76,367,403 2,663,906 3.6% Page 7 of 59 General Fund Expenditures Preliminary FY 2027 Budget May 18, 20266| FY 2026 FY 2027 FY 2026 Budget FY 2026 Budget Adopted Prelim to FY 2027 to FY 2027 Budget Budget Prelim Budget Prelim Budget Personnel Services 54,165,445 61,373,602 7,208,158 13.3% Maint & Operations 9,890,698 9,606,239 (284,459)-2.9% Capital Outlay 255,773 255,773 (0)0% Debt Services 554,377 418,913 (135,464)-24.4% Internal Svc Chgs 8,113,199 10,006,793 1,893,594 23.3% Transfers Out 9,993,791 10,836,238 842,447 8.4% Total 82,973,283 92,497,558 9,524,275 11.5% Net Surplus/(Deficit)(9,269,786)(16,130,155) Page 8 of 59 Fiscal Year 2027 FTE 7 |May 18, 2026 Fund FTE FTE% General Fund 276.95 72.50% Internal Service Funds 27.00 7.07% Sewer Service Fund 17.20 4.50% Housing / HOME / CDBG 15.75 4.12% Parks Maintenance Fund 13.00 3.40% Library Fund 10.00 2.62% Gas Taxes Fund 8.10 2.12% Nutrition 8.00 2.09% Parking Authority 4.00 1.05% Refuse Enterprise Fund 2.00 0.52% Total 382.00 100.00% Page 9 of 59 General Fund Unassigned Fund Balance May 18, 20268| Projected Ending Unassigned Fund Balance FY 2025 $ 23,394,613 Less Projected Deficit FY 2026 (10,255,467) Projected Ending Unassigned Fund Balance FY 2026 13,139,146 Less Projected Deficit FY 2027 (16,130,155) Projected Ending Unassigned Fund Balance FY 2027 $ (2,991,009) Page 10 of 59 Recommended Reductions May 18, 20269| Department Fund Proposal Exp Reduction Rev Increase Net Reduction Police General Fund Freeze 1.0 FTE Police Corporal $ (196,300)$ -$ (196,300) Police General Fund Freeze 1.0 FTE Police Dispatcher $ (99,600)$ -$ (99,600) Police General Fund 5% reduction of all M&O $ (128,513)$ -$ (128,513) Police Total $ (424,413)$ -$ (424,413) Fire General Fund Freeze 1.0 FTE Plan Checker $ (87,037)$ -$ (87,037) Fire General Fund Freeze 2.0 FTE Firefighters for 6 months $ (124,517)$ -$ (124,517) Fire General Fund 5% reduction in various M&O accounts $ (19,600)$ -$ (19,600) Fire Total $ (231,154)$ -$ (231,154) Engineering / PW General Fund Eliminate new GF CIP request for FY27 $ (1,000,000)$ -$ (1,000,000) Engineering / PW General Fund Freeze 1.0 FTE Assistant Engineer-Civil (.75 GF)$ (91,000)$ -$ (91,000) Engineering / PW General Fund Reduction of contract services $ (300,000)$ -$ (300,000) Engineering / PW Vehicle Fund Reduction of replacement charges $ (161,451)$ -$ (161,451) Engineering / PW Total $ (1,552,451)$ -$ (1,552,451) Planning General Fund Freeze 1.0 FTE Planning Technician $ (90,000)$ -$ (90,000) Building General Fund Reduce hourly wages for PT Building Inspector $ (27,000)$ -$ (27,000) Community Dev Total $ (117,000)$ -$ (117,000) Community Services General Fund Additional ARTS utility reimbursements $ -$ 30,000 $ (30,000) Community Services General Fund New golf course agreement $ -$ 43,000 $ (43,000) Community Services General Fund Freeze 2.0 FTE Rec Center Supervisors $ (194,498)$ -$ (194,498) Community Services General Fund Scale back Kimball Holiday event $ (30,000)$ -$ (30,000) Community Services General Fund Transition Recreation Guide to online format $ (10,000)$ -$ (10,000) Community Services Nutrition Fund Program and Meal Delivery Revenue $ -$ 53,000 $ (53,000) Community Services Nutrition Fund Reduce meal cap from 250 to 200 $ (235,000)$ -$ (235,000) Community Svcs Total $ (469,498)$ 126,000 $ (595,498) Library Library Fund Freeze 1.0 Principal Librarian $ (138,000)$ -$ (138,000) Library Total $ (138,000)$ -$ (138,000) Total Recommended Reductions $ (2,932,516)$ 126,000 $ (3,058,516)Page 11 of 59 Department Discussions May 18, 202610|Page 12 of 59 Police May 18, 202611|Page 13 of 59 Police Department May 18, 202612| Fund: General Fund FTE: 140.0 Revenue Category FY27 Prelim Other Revenues $ 1,811,826 Total Revenue $ 1,811,826 Expenditure Category FY27 Prelim Personnel Services $ 28,754,695 Maint & Operations $ 2,570,260 Capital Outlay $ 255,773 Internal Svc Chgs $ 3,493,860 Total Expenditure $ 35,074,588 Page 14 of 59 Police Department Reductions May 18, 202613| Fund Proposal Exp Reduction Rev Increase Net Reduction General Fund Freeze 1.0 FTE Assistant Chief of Police*$ -$ -$ - General Fund Freeze 1.0 FTE Police Corporal $ (196,300)$ -$ (196,300) General Fund Freeze 1.0 FTE Police Dispatcher $ (99,600)$ -$ (99,600) General Fund 5% reduction of all M&O $ (128,513)$ -$ (128,513) Total Reduction Proposals $ (424,413)$ -$ (424,413) * Reflected in preliminary budget Page 15 of 59 May 18, 202614| Service Level Impacts Unfilled / Underfilled Positions –Projected Salary Savings of ~ $2.1 Million •Impacts to Patrol •Ability to respond to emergencies •Recruitment and retention •Timeline for training •Impacts to Dispatch •Average ~ 63,000 calls for service per year •Understaffed by 5 FTE and 4 part-time call takers •Use of light duty officers to support Dispatch Page 16 of 59 May 18, 202615| Overtime Summary •Budgeted -$1.3 million (3.8% of total budget) •Critical Incidents (Call Outs) -$205,347 (12%) •Mandated Training (10%) •K9 Training -$63,072 •Court Appearances -$106,576 •Contractual Obligations (MOU) (1%) •Motor Pay -$13,043 •SRO School Events -$6,307 •Dispatch -$265,072 (16%) •Prostitution Related Operations -$40,265 (2%) •City Council Meetings / Events -$20,314 (1%) •Library Overtime -$57,159 (3%) Page 17 of 59 May 18, 202616| Reimbursed Overtime OT that is reimbursable through funding sources outside of the General Fund •FBI Violent Crimes Task Force (VCTF) •Narcotics Task Force (NTF) •Regional Realignment Response Group (R3G) •Office of Traffic Safety (OTS) •Gun Retrieval Task Force •Human Trafficking Task Force (HTTF) •HSI (Slot and Other Federal Reimbursement) Total Amount Reimbursed -$286,811 Page 18 of 59 May 18, 202617| Revenue Opportunities / General Fund Offsets •OPIOID FUNDS –$800,000: How can we use these funds to offset some of our personnel costs doing homeless outreach work or clean ups with the City. •COPS GRANT –$150,000: the City receives approximately this amount per year, which is used for public safety equipment. •STOP GRANT –$760,000: This can be used for office space, motorcycles, traffic cars, and equipment to offset general funds. •ALARM PROGRAM SYSTEMS –$84,000:These funds average per year and goes toward the payment of our dispatch center. We plan to purchase an AI dispatch system with these funds to avoid the general fund. •PARKING CITATIONS –Municipal code violations by Traffic and CSO’s return to the City. •PROPERTY & EVIDENCE –$98,502: Assets recovered. These funds will cover remodel costs, new refrigerators and drug disposal. •RECORDS SERVICES –$55,866: The funds from this service will go to the general fund. •LIVE SCAN PROGRAM: This program should be cost neutral to pay for our employees conducting the fingerprint scanning for our community. •STAFFING OF AN OFFICER IN RATT (Regional Auto-Theft Taskforce) –$120,000: Salary coverage with unlimited amounts of overtime reimbursement. •FAST (Fentanyl Apprehension Suppression Team), led by the HSI Team. Overtime reimbursement only. The City would have to cover the cost of salary. •School Contracts-NSD/SUHI pay for an officer each with total of about $406,000. •GRANTS:We continue to look for other grant opportunities in both the State and Federal government that would provide us financial resources that can enhance our policing efforts. Page 19 of 59 Fire May 18, 202618|Page 20 of 59 Fire Department May 18, 202619| Fund: General Fund FTE: 58.0 Revenue Category FY27 Prelim Other Revenues $ 1,899,500 Total Revenue $ 1,899,500 Expenditure Category FY27 Prelim Personnel Services $ 13,738,409 Maint & Operations $ 1,496,754 Internal Svc Chgs $ 1,759,928 Total Expenditure $ 16,995,090 Page 21 of 59 Fire Department Reductions May 18, 202620| Fund Proposal Exp Reduction Rev Increase Net Reduction General Fund Freeze 1.0 FTE Plan Checker $ (87,037)$ (87,037) General Fund Freeze 2.0 FTE Firefighters for 6 months $ (124,517)$ (124,517) General Fund 5% reduction in various M&O accounts $ (19,600)$ (19,600) Total Reduction Proposal $ (231,154)$ (231,154) Page 22 of 59 May 18, 202621| Overtime Analysis Page 23 of 59 May 18, 202622| Opportunities to Reduce Overtime •Implementation of 4-Person staffing on E-34 allows for flexible staffing when vacancy is less than 10 hours and department related •Reduction of ~ 950 hours •Further implementation of the 4-person staffing model would allow greater flexibility •Transitioned from Paramedic School provided by San Diego Fire to Southwestern College •Reduction of ~ 1,200 hours •Ready Rebound Program •Reduction in overtime related to work injury recovery time. Personnel are returned to duty in a shorter time-frame resulting in a projected reduction of 20-30% or 2,250 – 3,400 hours Page 24 of 59 May 18, 202623| Revenue Opportunities / General Fund Offsets Implement Ambulance Transport Services •Opportunity to reassign 2 FTEs to Enterprise Account for ATS Program –Projected GF salaries savings of ~ $450,000 Implement Retired Annuitant Program •Use Retired Annuitants to Respond to Statewide fire incidents Implement a Lift Assist Fee Program •Generate Revenue to offset GF expenditures Implement First Responder Fee Program •Generate Revenue to offset GF expenditures Page 25 of 59 Engineering / Public Works May 18, 202624|Page 26 of 59 Engineering / Public Works May 18, 202625| Fund: General Fund FTE: 9.7 Revenue Category FY27 Prelim Other Revenues $ 233,800 Total Revenue $ 233,800 Expenditure Category FY27 Prelim Personnel Services $ 1,615,104 Maint & Operations $ 1,714,600 Internal Svc Chgs $ 1,392,924 Total Expenditure $ 4,722,628 Page 27 of 59 Engineering / Public Works May 18, 202626| Fund: Parks Fund FTE: 13.0 Revenue Category FY27 Prelim Property Tax (Allocation from General Fund)$ 1,207,175 Other Revenues $ 4,893 Transfer In from General Fund $ 1,415,916 Total Revenue $ 2,627,984 Expenditure Category FY27 Prelim Personnel Services $ 1,588,357 Maint & Operations $ 522,500 Internal Svc Chgs $ 379,359 Transfer Out to POB $ 137,768 Total Expenditure $ 2,627,984 Page 28 of 59 Engineering / Public Works May 18, 202627| Fund: Facilities Maintenance Fund (ISF) FTE: 17.0 Revenue Category FY27 Prelim Internal Service Charges $ 4,624,240 Total Revenue $ 4,624,240 Expenditure Category FY27 Prelim Personnel Services $ 1,713,446 Maint & Operations $ 2,619,000 Internal Svc Chgs $ 157,470 Transfer Out to POB $ 143,824 Total Expenditure $ 4,633,740 Page 29 of 59 Engineering / Public Works May 18, 202628| Fund: Vehicle Service Fund (ISF) FTE: 5.0 Revenue Category FY27 Prelim Internal Service Charges $ 1,957,688 Total Revenue $ 1,957,688 Expenditure Category FY27 Prelim Personnel Services $ 724,200 Maint & Operations $ 1,163,700 Internal Svc Chgs $ 6,167 Transfer Out to POB $ 63,621 Total Expenditure $ 1,957,688 Page 30 of 59 Engineering / Public Works May 18, 202629| Fund: Other Funds Fund FY27 Prelim RV FY27 Prelim XP FTE Gas Tax Fund $ 3,391,788 $ 2,065,745 8.10 Sewer Service Fund $ 13,362,496 $ 12,551,600 17.20 Refuse Enterprise Fund $ 262,000 $ 261,799 2.00 Page 31 of 59 Engineering / Public Works Reductions May 18, 202630| Fund Proposal Exp Reduction Rev Increase Net Reduction General Fund Eliminate new GF CIP request for FY27 $ (1,000,000)$ (1,000,000) General Fund Freeze 1.0 FTE Assistant Engineer-Civil (.75 GF)$ (91,000)$ (91,000) General Fund Reduction of contract services $ (300,000)$ (300,000) Vehicle Fund Reduction of vehicle replacement charges $ (161,451)$ (161,451) Total Reduction Proposal $ (1,552,451)$ (1,552,451) Page 32 of 59 May 18, 202631| Revenue Opportunities / General Fund Offsets •Updated User Fees to move towards a full-cost recovery model for services •Integrate Project Accounting with Payroll •More efficiently tracks costs for service •Meets audit requirements to allow for reimbursement of staff time with grant funds •Continue to leverage GF and other funds to secure grants for capital projects •Complete Storm Water Utility User Fee Study •Opportunity to create an enterprise fund to charge for services and capital projects •Offset GF expenditures maintaining storm water infrastructure Page 33 of 59 Community Development May 18, 202632|Page 34 of 59 Building May 18, 202633| Fund: General Fund FTE: 5.83 Revenue Category FY27 Prelim Other Revenues $ 1,075,000 Total Revenue $ 1,075,000 Expenditure Category FY27 Prelim Personnel Services $ 942,354 Maint & Operations $ 78,163 Internal Svc Chgs $ 119,957 Total Expenditure $ 1,540,474 Page 35 of 59 Building Reductions May 18, 202634| Fund Proposal Exp Reduction Rev Increase Net Reduction General Fund Reduce hourly wages for PT Building Inspector $ (27,000)$ (27,000) Total Reduction Proposal $ (27,000)$ (27,000) Page 36 of 59 Planning May 18, 202635| Fund: General Fund FTE: 4.84 Revenue Category FY27 Prelim Other Revenues $ 65,700 Total Revenue $ 65,700 Expenditure Category FY27 Prelim Personnel Services $ 708,505 Maint & Operations $ 61,450 Internal Svc Chgs $ 86,080 Total Expenditure $ 856,035 Page 37 of 59 Planning Reductions May 18, 202636| Fund Proposal Exp Reduction Rev Increase Net Reduction General Fund Freeze 1.0 Planning Technician $ (90,000)$ (90,000) Total Reduction Proposal $ (90,000)$ (90,000) Page 38 of 59 Neighborhood Services May 18, 202637| Fund: General Fund FTE: 8.83 Revenue Category FY27 Prelim Other Revenues $ 10,050 Total Revenue $ 10,050 Expenditure Category FY27 Prelim Personnel Services $ 1,158,676 Maint & Operations $ 88,680 Internal Svc Chgs $ 305,570 Total Expenditure $ 1,552,926 Page 39 of 59 Neighborhood Services May 18, 202638| Fund: Housing Authority Fund FTE: 2.00 Expenditure Category FY27 Prelim Personnel Services $ 299,292 Total Expenditure $ 299,292 Page 40 of 59 Housing May 18, 202639| Fund: General Fund FTE: 0.25 Expenditure Category FY27 Prelim Personnel Services $ 110,294 Maint & Operations $ 31,500 Internal Svc Chgs $ 52,144 Total Expenditure $ 293,938 Page 41 of 59 Housing May 18, 202640| Fund: Other Funds Fund FY27 Prelim RV FY27 Prelim XP FTE C.D.B.G Fund $ 700,000 $ 332,038 1.70 Housing Authority Fund $ 355,000 $ 410,345 0.60 Housing Choice Voucher (Section 8)$ 19,531,732 $ 19,443,472 8.80 HOME Fund $ 400,000 $ 618,484 1.95 Low/Moderate Housing Asst Fund $ 300,000 $ 387,926 0.70 Page 42 of 59 May 18, 202641| Revenue Opportunities / General Fund Offsets •SANDAG Grant to Update Downtown Specific Plan •Clean National City Revitalization Program •Encampment Resolution Funding Grant •Opioid Settlement Funds for Homeless Outreach Team •Other Federal and State Grants •Code Enforcement Penalties for Habitual Violators •Parking Meters / Paid Parking Technologies Page 43 of 59 Community Services May 18, 202642|Page 44 of 59 Community Services May 18, 202643| Fund: General Fund FTE: 8.0 Revenue Category FY27 Prelim Other Revenues $ 519,500 Total Revenue $ 519,500 Expenditure Category FY27 Prelim Personnel Services $ 1,659,185 Maint & Operations $ 676,890 Debt Service $ 4,000 Internal Svc Chgs $ 981,054 Total Expenditure $ 3,321,130 Page 45 of 59 Community Services May 18, 202644| Fund: Nutrition Fund FTE: 8.0 Revenue Category FY27 Prelim County Grants $ 417,107 Transfer in from Housing Fund $ 608,000 Transfer in from General Fund $ 674,832 Total Revenue $ 1,699,939 Expenditure Category FY27 Prelim Personnel Services $ 877,968 Maint & Operations $ 724,450 Internal Svc Chgs $ 24,989 Transfer Out to POB $ 72,532 Total Exependiture $ 1,699,939 Page 46 of 59 Community Services Reductions May 18, 202645| Fund Proposal Exp Reduction Rev Increase Net Reduction General Fund Additional ARTS utility reimbursements $ 30,000 $ (30,000) General Fund New golf course agreement $ 43,000 $ (43,000) General Fund Freeze 2.0 FTE Rec Center Supervisors $ (194,498)$ (194,498) General Fund Scale back Kimball Holiday event $ (30,000)$ (30,000) General Fund Transition Recreation Guide to online format $ (10,000)$ (10,000) Nutrition Fund Program and Meal Delivery Revenue $ 53,000 $ (53,000) Nutrition Fund Reduce meal cap from 250 to 200 $ (235,000)$ (235,000) Total Reduction Proposals $ (469,498)$ 126,000 $ (595,498) Page 47 of 59 May 18, 202646| Revenue Opportunities / General Fund Offsets •Amended Golf Course Agreement •Initiate comprehensive study to align golf, aquatics, and recreation fees with neighboring municipalities •Marketing of Las Palmas Pool to regional groups for competitive swim meets •“Right-sizing” Nutrition Center Services •Reservation system prioritizes residents, while non-residents are able to sign up at alternative County sponsored senior nutrition centers •Explore additional grants and revenue opportunities •Transition Recreation Guide to Online format •Evaluate City sponsored and co-sponsored events •Cost saving measures •Opportunities for sponsorships Page 48 of 59 Library May 18, 202647|Page 49 of 59 Library May 18, 202648| Fund: Library Fund FTE: 10.0 Revenue Category FY27 Prelim Property Tax (Allocation from General Fund)$ 1,035,975 Other Revenues $ 4,200 Transfer in from General Fund $ 2,544,398 Total Revenue $ 3,584,573 Expenditure Category FY27 Prelim Personnel Services $ 2,161,600 Maint & Operations $ 209,140 Internal Svc Chgs $ 1,070,192 Transfer Out to POB $ 143,642 Total Expenditure $ 3,584,573 Page 50 of 59 Library Reductions May 18, 202649| Fund Proposal Exp Reduction Rev Increase Net Reduction Library Fund Freeze 1.0 Principal Librarian $ (138,000)$ (138,000) Total Reduction Proposal $ (138,000)$ (138,000) Page 51 of 59 May 18, 202650|Page 52 of 59 Revenue Initiatives May 18, 202651|Page 53 of 59 Economic Development & Land Activation Opportunities POSITIONING NATIONAL CITY FOR LONG-TERM REVENUE GROWTH •Active Development & Economic Development Efforts •CarMax Development •Southwestern College Expansion •Bay Marina Parcels Strategy •Long-term Redevelopment •Interim Activation •Land Swap (Drive-in Site) •Downtown Specific Plan Implementation •Potential Business Improvement District •Corridor Activation •Ramada Hotel Reinvestment •SANDAG Grants May 18, 202652|Page 54 of 59 Revenue Initiatives Currently Underway (0-12 Months) CURRENT REVENUE & COST RECOVERY STRATEGIES •Active or In-Progress Initiatives •Gross Receipts Tax (~$5.3 to $7.5 million) •Boarded & Vacant Property Ordinance (~$100,000) •Short-Term Rental Ordinance (~$130,000) •Updated User/Service Fees (effective April 20, 2026) •Updated Development Impact Fees (effective August 6, 2025) •Parking Meters (Downtown) •Code Enforcement Penalties for Habitual Violators •Digital Billboard Expansion (~$350,000) •Business Improvement District (BID) •Port Municipal Services Agreement (MSA) May 18, 202653|Page 55 of 59 Near-Term Revenue Opportunities (1-2 Years) STRATEGIC REVENUE MEASURES & PROGRAM EXPANSION •Potential Revenue Initiatives •½ Cent Sales Tax Increase (~$8 to $10 million) •Potential voter-approved measure to support long-term fiscal sustainability and essential services. •Storm Water Utility User Fee (~$2 to $4 million) •Evaluate the creation of a dedicated funding source for stormwater infrastructure and regulatory compliance. •Cannabis Program Expansion (~$200,000) •Consider opening application window for remaining available licenses (2). May 18, 202654|Page 56 of 59 Long-Term Revenue Strategies (3+ Years) STRUCTURAL REVENUE & FISCAL SUSTAINABILITY OPTIONS •Long-Term Opportunities •Sales Tax Adjustment (~$8 to $10 million) •Evaluate timing and feasibility of measure if not pursued in 2028. •Transient Occupancy Tax (TOT) Adjustment (~$400,000) •Explore increasing TOT to align with neighboring jurisdictions. •Utility Users Tax (UUT) (~$900,000) •Evaluate implementation of a locally controlled revenue source tied to utility consumption. May 18, 202655|Page 57 of 59 Revenue Initiatives Summary Category Initiatives Economic Development & Land Activation CarMax Development, Bay Marina Parcels, Downtown Specific Plan Projects, Ramada Hotel Reinvestment, Southwestern College Expansion, Drive-In Site Land Swap Cost Recovery & Operational Revenue User Fees, Development Impact Fees, Parking Meters, Code Compliance, Port MSA New Revenue Generation Gross Receipts Tax, Sales Tax Measure, Utility Users Tax, TOT Adjustment, Cannabis Expansion Property & Asset Optimization Development / Leasing of City-Owned Properties, Digital Billboards, Interim Activation Projects Community & Business District Initiatives Business Improvement District (BID), Port MSA, Short-Term Rental Ordinance Neighborhood Stabilization & Compliance Boarded & Vacant Property Ordinance, Habitual Violator Penalty Program May 18, 202656|Page 58 of 59 Discussion and Questions Page 59 of 59