Staff Report — Glendale City Council, August 4, 2026

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CITY OF GLENDALE, CALIFORNIA

REPORT TO THE CITY COUNCIL

AGENDA ITEM
Report: Consideration for Declaration of Fiscal Emergency and Placement of a One-Quarter Percent (0.25%) Supplemental Transactions and Use Tax Measure for Public Safety and Essential City Services, and Proposed Charter Amendments Pertaining to Civil Service, Fund Accounting, and Miscellaneous Cleanup.

1. Resolution Submitting to the Voters the Glendale Public Safety and Essential City Services Measure, an Ordinance of the City of Glendale to Adopt a Quarter Percent (0.25%) Supplemental Transactions and Use Tax, and Declaring a Fiscal Emergency with Respect Thereto.

2. Introduction of Ordinance Adopting a Supplemental Transactions and Use Tax to Be Administered by the California Department of Tax and Fee Administration Subject to Adoption by the Electorate.

3. Resolution Placing a Question on the Ballot Amending the Charter of the City of Glendale to Update its Civil Service Provisions.

4. Resolution Placing a Question on the Ballot Amending the Charter of the City of Glendale to Modernize its Accounting Funds and Make Miscellaneous Cleanup Changes.

5. Resolution Calling and Giving Notice of the Holding of a Special Municipal Election on Tuesday, November 3, 2026, by Submitting to the Voters the Glendale Public Safety and Essential City Services Measure, an Ordinance of the City of Glendale to Adopt a One- Quarter Percent Supplemental Transactions and Use Tax, and Amendments to the Glendale City Charter Pertaining to Updating its Civil Service Provisions, Modernizing its Accounting Funds, and Making Other Miscellaneous Changes; and Requesting the Board of Supervisors of the County of Los Angeles to Consolidate the Special Election with the Statewide General Election to be Held on That Date Pursuant to § 10403 of the Elections Code; and Authorizing the City Clerk or Her Duly Authorized Officers and Agents to Carry Out All Necessary Procedures for Said Election Working With the County of Los Angeles.

6. Resolution Calling for Arguments For and Against the Glendale Public Safety and Essential City Services Measure and the Proposed Charter Amendments for the Ballot for the Special Election on Tuesday, November 3, 2026.

7. Resolution of Appropriation Approving $921,753 in Adjustments to the Adopted FY 2026- 27 Budget.

COUNCIL ACTION
Item Type: Consent Calendar
Approved for August 4, 2026 calendar

EXECUTIVE SUMMARY
The attached report outlines proposed City Charter amendments and a potential revenue measure for Council’s consideration to place on the November 3, 2026 ballot.

Proposed Charter Amendments
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The report recommends placing several Charter amendments before voters, including:
Civil Service
oAdopt a Rule of Three Whole Scores hiring process to provide greater flexibility in selecting candidates.
oExtend the maximum probationary period to 18 months (public safety personnel would remain at 12 months).
oAllow promotional reallocations for employees with specialized qualifications. oMake future department heads at-will employees, while exempting the Police and Fire Chiefs.
Fund Accounting & Fiscal Administration
oModernize and streamline outdated fund structures and accounting practices. oEliminate obsolete fiscal procedures and clarify annual budget adoption requirements.
oPermit both competitive and negotiated bond sales to improve financing flexibility. Miscellaneous Cleanup
oAllow Council action items to be agendized and direction to be given at special meetings held outside Council Chambers.
oClarify post-Council employment restrictions.
oRemove outdated Charter references and obsolete job titles.

Potential Revenue Measure
The City continues to face a persistent structural General Fund deficit, despite years of cost- cutting efforts and implementation of operational efficiencies. Current projections show reserve levels falling below the City's policy target in FY 2027-28, and below the Charter-required minimum within the next five to six years if no additional action is taken.

If approved:
The additional tax would take effect April 1, 2027.
It is projected to generate approximately $11 million annually for the General Fund. Revenue would support public safety, essential City services, infrastructure, and community priorities as determined by the Council.

Next Steps
For these measures to be placed on the ballot, Council must approve the required ordinance and resolutions to place the Charter amendments and sales tax measure on the November 3, 2026 ballot. The resolutions also direct the City Attorney to prepare impartial ballot analyses and authorizes the City Manager to enter into an agreement with the California Department of Tax and Fee Administration to administer the tax if approved by voters.

RECOMMENDATION
As directed by the City Council, the following items are submitted for Council’s consideration:

2. Introduction of Ordinance Adopting a Supplemental Transactions and Use Tax to Be Administered by the California Department of Tax and Fee Administration Subject to Adoption by the Electorate.

3. Resolution Placing a Question on the Ballot Amending the Charter of the City of Glendale to Update its Civil Service Provisions.

4. Resolution Placing a Question on the Ballot Amending the Charter of the City of Glendale to Modernize its Accounting Funds and Make Miscellaneous Cleanup Changes.

7. Resolution of Appropriation Approving $921,753 in Adjustments to the Adopted FY 2026- 27 Budget.

ANALYSIS
On July 28 and July 30, 2026, the City Council was provided information regarding proposed Charter amendments pertaining to Civil Services, Fund Accounting, miscellaneous cleanup and the current and future status of the City’s General Fund budget projections. Subsequently, the Council directed staff to prepare the necessary documents for the potential placement of several measures, including a revenue measure, for the Glendale voters’ consideration on the November 3, 2026, ballot.

Proposed Charter Amendments
The Council has directed staff to return with ballot measures pertaining to the Civil Service System, Fund Accounting/Fiscal Administration, and Miscellaneous Cleanup. Those matters are:

Civil Service
Rule of Three Whole Scores: The proposed revision would allow amendments to the Civil Service Rules to permit appointments to be made using the Rule of Three Whole Score system. Under the Rule of Three Whole Scores, candidates are ranked based on their examination scores, and the appointing authority may select from among candidates who fall within the top three distinct score levels (or “whole scores”), rather than being restricted to only the top three ranked applicants.
Length of Probationary Period: This proposed Charter amendment would change the allowable length of the probationary period to a maximum of 18 months, with public safety sworn personnel remaining at 12 months.
Promotional Reallocation: This proposed Charter amendment would allow the appointment of a person with specialized knowledge and experience unique to the reallocated position, provided a vacancy does not exist 14 24-86691
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At-Will Department Heads: This proposed amendment would remove department heads from the classified service, excluding the positions of Police Chief and Fire Chief, applicable to department heads appointed after November 3, 2026.

Note: As requested by Council and in the time available, staff explored the model involving at-will department heads promoted from within the organization to be returned to a former civil service position upon termination. Staff identified the City of Los Angeles having a provision in its Charter accommodating this practice, but that it applies citywide to all positions and operates in a system with significantly more positions available than the City of Glendale. Additional review would be required to assess the implementation challenges, including bumping rights associated with such a proposal. Thus, if Council is inclined to move forward with the at-will department proposal, staff recommends that it do so consistent with the direction given at the July 30 meeting to exclude the public safety chiefs from the proposal.

Fund Accounting & Fiscal Administration:
Fund Accounting: The Charter amendment will streamline the Charter’s existing fund structures, several of which are outdated, inconsistent with modern accounting practices, and create unnecessary administrative work. This Charter amendment will give the Council flexibility to consolidate or modify funds as accounting standards evolve, and allowing the budgeted electric fund transfer to occur during the fiscal year without changing its calculation.
Fiscal Administration: This Charter amendment will eliminate outdated fiscal procedures, including a requirement that petty cash funds be established by ordinance and clarify the Charter provision governing adoption of the annual budget. Lowest Cost Bond Pricing: This Charter amendment will permit either competitive or negotiated bond sales, allowing the Council to select the method most likely to produce efficient execution and favorable financing terms.

Miscellaneous Cleanup
Location of Council meetings: This proposed revision would keep the requirement requiring Council deliberation and a Council vote to occur in Council Chambers for the Council’s regular meetings, but allow flexibility for the Council to take up action items listed on special meeting agendas and provide direction on those items at special meetings that occur outside of Chambers in the community. These meetings would continue to adhere to the Ralph M. Brown Act, and be open to the community for participation and input. Holding Compensated City Office or City Employment After Council Service: This proposed amendment would confirm the current interpretation of a current provision of the Charter that the prohibition on holding compensated City office or employment within two years of Council service does not apply to the elected positions of Clerk or Treasurer or that of a councilmember appointed to Council in the event of a vacancy. Remove/replace Obsolete Job Titles and Duties: The proposed amendments would also remove and/or replace obsolete job titles and duties referenced in the Charter. 15 24-86691
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Potential Revenue Measure
The City of Glendale has a long tradition of fiscal prudence with balanced budgets and emergency reserves. Despite conscious efforts to reduce expenditures while maintaining City services to the public, the City has experienced multiple years of budget shortfalls. During the FY 2025-26 budget study sessions, the FY 2026-27 ending General Fund balance was estimated to decrease by approximately $31.7 million. This significant yet anticipated budget deficit is driven by continued slowdown in revenue growth, combined with rapidly rising costs required to maintain essential City services.

In response, the City has continued implementing cost saving strategies for many years, including freezing vacant positions, budgetary reductions, service innovation, fiscal discipline, improved revenue collection, and employee collaboration on achieving sustainable benefits in order to stabilize its operational costs. Over the preceding nine months, managers from across all City departments worked collaboratively to identify and develop solutions to narrow the General Fund’s funding gap. Such efforts focused on both revenue enhancement opportunities and cost- reduction strategies.

Despite these efforts, unmitigable expenses continue to outpace revenue growth, resulting in a significant structural imbalance. While the City continues efforts towards implementing new revenue generating alternatives, such efforts are not expected to offset expenditures in an appreciable manner within the short to mid-term. Thus, without further corrective action, cost increases are expected to continue outpacing revenue growth, resulting in the need for further cuts to public services and amenities.

The table below reflects an anticipated ongoing structural deficit in the City’s operating fund for at least the next five years. Built into the assumptions used to develop this projection includes a further 2% reduction across City’s operations in the upcoming 2027-28 fiscal year’s budgeting cycle, which at this juncture is expected to result in tangible and obvious impact to the services and programs offered by the City of Glendale.

GENERAL FUND 5-YEAR FORECAST
Based upon these projections, the following graph illustrates a continued downward trend within the City’s General Fund Reserve account, where the remaining balance is expected to decline below the City’s Council’s 35% Reserve Target in FY 2027-28, and continue in a downward trajectory where it ends below the City’s Minimum Reserve Requirement in FY 2029-30. Absent efforts to further reduce expenses or increase revenues, the projected reserve balance is expected to continue its downward trend, eventually falling below the Charter Mandated Minimum Reserve Requirement within the next 5-6 years.

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City Council held a Special Meeting on July 30,2026 to consider placement of a potential ballot measure on the upcoming November election which would establish a 0.25% City transactions and use tax (TUT) to mitigate against ongoing budget deficits.

This 0.25% sales tax measure would be a general purpose tax, requiring the approval of a simple majority of voters. By placing a general tax on the ballot, the City Council is not approving a specific spending plan at this juncture. The measure, if approved by Glendale voters, would take effect on April 1, 2027 and generate approximately $11 million in annual revenues for the City’s General Fund. This local revenue would be used for City services, capital projects, and align with community priorities as determined by the City Council.

Summary of Sales Tax Distribution
The sales and use tax is a tax imposed on the total retail price of any tangible personal property, and the use or storage of such property when sales tax is not paid. Currently, Glendale’s sales tax is 10.5%, of which the City receives 1.75% (including a 1% Bradly-Burns rate and 0.75% Measure S rate approved by Glendale voters in November 2018). This is authorized by the California Constitution Article XIII §25.5(a)(2), §29; Revenue and Taxation Code §7200 et seq. and administered by the California Department of Tax and Fee Administration (CDTFA-- formerly known as the Board of Equalization or BOE). The basic 1% local Bradly-Burns rate is a general tax and is allocated to all cities in California and the 0.75% Measure S is unique to Glendale.

They are unrestricted and deposited into the City’s General Fund to support general city services.

If Glendale voters were to approve such a local sales tax, it would increase the City’s overall sales tax rate to 10.75%, which is the maximum allowed for Los Angeles County. This rate doesn’t include the recently passed Los Angeles County Measure ER tax, which increases the tax rate by another .50% effective October 1, 2026, to a total of 11.25%. At this time, it is estimated that a .25% local transactions tax for Glendale would generate approximately $11 million in additional revenues for the City’s General Fund.

The benefit of funding local needs with a local sales tax, as opposed to a parcel tax or general obligation bond, is that the revenue raised are derived from purchases made by daytime employees, residents or visitors to Glendale, whereas a parcel tax or general obligation bond

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would solely be funded by Glendale property owners. In a previous study performed by HdL, the City’s tax consultants analyzed sales tax generation within the City’s boundaries based on actual Bradley Burns 1% sales tax revenue and actual Transactions and Use Tax (TUT) revenue collected in the 2024 calendar year.

According to the HdL analysis, it was estimated that 51.0% of the 1% Bradley Burns Sales Tax in 2024 was paid by non-residents. The 1% Bradley Burns tax is based on where the sale is negotiated or the place where the order is taken, whereas the TUT is applied in accordance with where purchased goods are delivered or placed into use. Accordingly, HdL estimated the percentage of a 1% TUT paid by non-residents was 19.8%.

Below is the estimated percentage of sales tax generation from non-residents for the seven major industry groups.

In consideration of placing such a measure on the upcoming November ballot, it is essential that the City of Glendale has the resources to maintain the high quality of life residents need and deserve. Passage of this measure will provide funding to maintain essential public safety services, repair and upgrade of local streets and sidewalks, and maintain continued operation of local parks, libraries, community centers and open space; amongst a myriad of other public services which are essential to maintaining clean and safe neighborhoods.

Next steps
If the City Council wishes to proceed with the placement of these ballot measures on the upcoming November 3, 2026 election, it must approve the attached ordinance and resolutions calling for an election on the measure to be approved by Glendale voters. Additionally, the proposed resolutions direct the City Attorney to prepare the impartial analysis of the measures and the proposed ordinance authorizes the City Manager to contract with the Department of California Tax and Fee Administration to administer and collect the tax if adopted.

STAKEHOLDERS/OUTREACH
The Charter Review Committee has held open public meetings over the course of the last year and a half to discuss potential updates to the City Charter. The discussions and recommendations of the Committee have been presented to the Council at meetings open to the public throughout the course of this time, where members of the public have had the opportunity to voice their opinions.

Further, matters related to the City budget have been discussed in great detail over the course of the last two fiscal years, most recently resulting in the adoption of the FY 2026-27 General Fund

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budget, which included significant cuts to citywide funding and programming.

FISCAL IMPACT
If approved by the Glendale voters on November 3, 2026, a 0.25% local sales tax would take effect on April 1, 2027 on nearly all taxable transactions. Unprocessed foods, such as groceries from grocery store or farmers market; prescription medications; real estate transactions; and services are exempt from the tax. Car sales and leases are taxed according to the tax rate in effect in the buyer’s/lessee’s home jurisdiction, not where the transaction takes place. Staff estimates that a 0.25% local sales tax would generate additional annual revenues of approximately $11 million. These funds would enable the City to invest in services and infrastructure that the community values and help support and maintain public safety and other essential governmental services for Glendale residents.

The cost of election, outreach and education is estimated to cost approximately $921,753, which will be paid out of the General Fund. More specifically, the cost for placing three measures on the Special Election ballot are expected to cost $660,753, and the cost for conducting public education is $261,000. Should the City Council opt to pose more than three ballot measures, placement of additional ballot measures beyond these three will be an additional $69,000 each.

The public education budget consists of the following:

Line Item Cost
Mailers (3x) — fact sheet, postcard & GTV (print/postage) $200,000 Public Education Consultant Fee $30,000
Newspaper Ad Buys
- General-Market outlets
- Foreign-Market Outlets $24,000
Social Media Ad Buys $2,500
Townhalls/Pop-ups $4,500
Total $261,000
Requesting Appropriation
Amount From (Account
String)
To (Account String) Funding Source
$921,753 25300-1010-000 43110-1010-CCD-
1500-P0000
General Fund
Department Cost Center Program
City Clerk Elections

ENVIRONMENTAL REVIEW (CEQA/NEPA)
This activity involves organizational, administrative and fiscal activities of the government related to the City’s general fund and the City’s governance structure, and such internal governance changes and fiscal activities have no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. As such, this action is not a “project” subject to the requirements of the California Environmental Quality Act (CEQA), 14 Cal. Code Regs. § 15378.

CAMPAIGN DISCLOSURE
This item is exempt from campaign disclosure requirements. 19 24-86691
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ALTERNATIVES TO STAFF RECOMMENDATION
Alternative 1: City Council may choose any other alternative not proposed by staff.

ADMINISTRATIVE ACTION
Submitted by:

John Takhtalian, Assistant City Manager
Prepared by:

John Takhtalian, Assistant City Manager
Michael Garcia, City Attorney
Jack Liang, Director of Finance
Approved by:

Roubik R. Golanian, P.E., City Manager

EXHIBITS/ATTACHMENTS

Glendale City CouncilAugust 4, 2026

Glendale City Council
August 4, 2026