June 2, 2026
Proposed Budget
Fiscal Year 2026/2027
Item 11.1
Discussion Items
• National City’s Budget Process
• Follow-up Items from Budget Workshop #2
• Fiscal Year 2027 Proposed Budget
• Discussion / Adoption of Proposed Budget
2 | May 18, 2026
Fiscal Year 2027 Budget Process
• Finance develops non-discretionary budgets (Dec – Feb) • Personnel, Debt Service, Pension, General Revenues
• Departments enter discretionary budgets (Jan – Feb)
• Zero-based - Contracts, Professional Services, M&O
• City Manager / Department Meetings (March - April)
• Baseline Review, Enhancement Request Consideration
• Fine-tune Baseline for Preliminary Presentation (April) • Budget Workshop #1 / Preliminary Budget (May 4)
• Budget Workshop #2 / Recommended Budget Reductions (May 18) • Proposed Budget (June 2)
3 | May 18, 2026
General Fund Revenues
4 | May 18, 2026
FY 2024 FY 2025 FY 2026 FY 2026 FY 2027
Actuals Unaudited YTD 3/31/26 Q3 Projected Proposed
Sales & Use Tax 23,833,880 23,835,662 14,078,222 24,277,800 24,723,000 District Transaction Tax 16,261,936 18,218,944 10,499,071 17,747,000 18,125,000 Property Tax 2,685,138 2,645,224 1,627,161 2,714,975 2,703,750 Property Tax in Lieu of VLF 8,850,464 9,273,778 4,896,420 9,703,273 9,896,000 Other Revenues 22,122,793 24,634,685 11,687,268 19,990,949 20,987,153 Transfers-in 2,005,500 4,125 2,750 5,500 5,500
Total 75,759,711 78,612,419 42,790,891 74,439,497 76,440,403 General Fund Expenditures
5 | May 18, 2026
FY 2024 FY 2025 FY 2026 FY 2026 FY 2027
Actuals Unaudited YTD 3/31/26 Projected Proposed
Personnel Services 41,060,996 46,710,861 39,200,373 56,903,451 60,450,247 Maint & Operations 8,834,595 9,985,716 4,912,852 8,799,826 9,048,130 Capital Outlay 1,939,246 2,651,805 421,669 74,842 255,773 Debt Services 549,489 594,667 211,129 554,377 418,913
Internal Svc Chgs 9,493,733 10,180,890 4,732,699 8,227,199 9,538,530 Transfers Out 8,260,666 8,018,675 4,996,896 10,135,268 9,380,358 Total 70,138,725 78,142,616 54,475,617 84,694,963 89,091,951 Fiscal Year 2027 FTE
6 | May 18, 2026
Fund FTE FTE%
General Fund 276.95 72.3%
Internal Service Funds 27.00 7.0%
Sewer Service Fund 17.20 4.5%
Housing / HOME / CDBG 16.75 4.4%
Parks Maintenance Fund 13.00 3.4%
Library Fund 10.00 2.6%
Gas Taxes Fund 8.10 2.1%
Nutrition 8.00 2.1%
Parking Authority 4.00 1.0%
Refuse Enterprise Fund 2.00 0.5%
Total 383.00 100.00%
General Fund Vacancy Snapshot
7 | May 28, 2026
Title Count Est Annual Cost Note
Administrative Technician 1.00 88,029
Alarm Program Coordinator 1.00 72,040
Animal Regulations Officer 1.00 85,715
Assistant Chief Of Police 1.00 - Frozen in Prelim
Assistant Engineer-Civil (.75 GF) 1.00 91,000 Frozen
Assistant Planner 1.00 103,246
Asst.Director Comm Development 1.00 166,647
City Manager 1.00 335,486
Civil Engineering Technician 1.00 83,838
Community Services Officer 2.00 155,078
Crime & Intelligence Analyst 1.00 107,142
Deputy City Manager 1.00 272,409
Director Of Finance 1.00 255,601
Continued on next slide
General Fund Vacancy Snapshot
8 | May 28, 2026
Title Count Est Annual Cost Note
Executive Assistant II 1.00 105,576
Fire Captain 1.00 163,711
Human Resources Director 1.00 284,913
Human Resources Manager 1.00 171,205
Information Technology Analyst 1.00 139,736
Plan Checker 1.00 87,037 Frozen
Police Corporal 3.00 589,149 1.0 FTE Frozen
Police Dispatcher 4.00 398,612
Police Officer 4.00 635,612
Police Sergeant 1.00 196,365
Property Agent 1.00 57,449
Recreation Center Supervisor 2.00 194,498 Frozen
Executive Assistant II 1.00 105,576
Total 35.00 4,840,094
FY 2027 Cost of Living Adjustments
9 | May 18, 2026
Group General Fund Other Funds Total
POA* $825,521 $- $825,521
FFA 350,553 - 350,553
MEA 363,391 340,011 703,402
Confidential 52,422 20,877 73,299
Management 234,091 108,120 342,211
Executive 150,280 19,877 170,157
Total $1,976,258 $488,885 $2,465,143
*includes the value of POA May 2026 COLA
Reductions - Workshop #2
10 | May 18, 2026
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 vehicle 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) Additional Reductions
11 | May 18, 2026
Department Fund Proposal Exp Reduction Rev Increase Net Reduction Engineering / PW Vehicle Fund Further reduction of vehicle replacement charges $ (336,923) $ - $ (336,923) City Manager General Fund Reduction of Legal Services $ (60,000) $ - $ (60,000) Various General Fund Reallocation of UAL, POB, and General Liability $ (80,000) $ - $ (80,000) Mayor’s Office General Fund Reduction of Overtime, Govt Purposes, Hourly Wages $ (40,000) $ - $ (40,000) Total Additional Reductions $ (516,923) $ - $ (516,923) General Fund Revenues
Preliminary FY 2027 Budget
12 | May 18, 2026
FY 2027 FY 2027
Preliminary Proposed
Budget Budget Change
Sales & Use Tax 24,723,000 24,723,000 -
District Transaction Tax 18,125,000 18,125,000 -
Property Tax 4,946,900 4,946,900 -
Property Tax Allocated (2,243,150) (2,243,150) -
Property Tax in Lieu of VLF 9,896,000 9,896,000 -
Other Revenues 20,914,153 20,987,153 73,000
Transfers-in 5,500 5,500 -
Total 76,367,403 76,440,403 73,000
General Fund Expenditures
Preliminary FY 2027 Budget
13 | May 18, 2026
FY 2027 FY 2027
Preliminary Proposed
Budget Budget Change
Personnel Services 61,373,602 60,450,247 (923,355)
Maint & Operations 9,606,239 9,048,130 (558,109)
Capital Outlay 255,773 255,773 -
Debt Services 418,913 418,913 -
Internal Svc Chgs 10,006,793 9,538,530 (468,263)
Transfers Out 10,836,238 9,380,358 (1,455,880)
Total 92,497,558 89,091,951 (3,405,607)
Net Surplus/(Deficit) (16,130,155) (12,651,548)
General Fund Unassigned Fund Balance
14 | May 18, 2026
FY27 Preliminary FY27 Proposed
Projected Ending Unassigned Fund Balance FY 2025 $ 23,394,613 $ 23,394,613 Less Projected Deficit FY 2026 (10,255,467) (10,255,467) Projected Ending Unassigned Fund Balance FY 2026 13,139,146 13,139,146 Less Projected Deficit FY 2027 (16,130,155) (12,651,548) Projected Ending Unassigned Fund Balance FY 2027 $ (2,991,009) $ 487,598 Revenue Initiatives Currently
Underway (0-12 Months)
CURRENT REVENUE & COST RECOVERY STRATEGIES
• Active or In-Progress Initiatives
• Business License Tax Reform (~$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)
15 | May 18, 2026
Discussion and Questions