Agenda packet — National City City Council, September 1, 2026 (part 3 of 3)

36 Contract for Towing & Impound Services
Oct 1, 2026 –Sept 30, 2029

City of National City
and Tony’s Auto Center Inc.

ATTACHMENT B
Pursuant to Section 7.9 of this Agreement, the Negligent Vehicle Impound Release Fee shall apply to vehicles impounded pursuant to the following California Vehicle Code sections and/or National City Municipal Code sections. One or more the listed sections must be included on the impounding documents.

California Vehicle Code
22500 et seq. Prohibited Stopping, Standing, or Parking 22500.1 Prohibited Stopping, Standing, or Parking: Fire Lane 22651 (a) Unattended on Bridge
22651 (b) Hazard to flow of traffic
22651 (d) Blocking a driveway
22651 (e) Blocking fire hydrant access
22651 (h) Operator taken into custody - not practical to park or lock 22651 (i) Unpaid parking citations
22651 (j) Illegally parked and no evidence of registration displayed 22651 (k) Parking over 72 hours
22651 (1) Temporary tow away signs for street repair
22651 (m) Highway authorization for other use, with 24-hour notice 22651 (n) No parking tow away signs posted
22651 (o) (1) Expired registration in excess of six months 22651 (p) Unlicensed or suspended/ revoked license in violation of 12500, 14601, 14601.1, 14601.2, 14601.3, 14601.4, 14601.5, or 14604. 22651 (r) Illegally parked, blocking a legally parked vehicle 22652 Illegally parked in designated handicapped parking space 22653 (c) Removal from private property, at request of property owner, when operator is taken into custody
22655 (a) Hit & Run suspect vehicle
22656 Illegally parked or abandoned within 7-1/2 feet of nearest railroad rail 22669 et seq. Removal of Abandoned Vehicles as determined pursuant to section 22523 CVC

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37 Contract for Towing & Impound Services
Oct 1, 2026 –Sept 30, 2029

City of National City
and Tony’s Auto Center Inc.

National City Municipal Code

11.32.060 Illegally parked - 72 hour violation - vehicle removal

11.32.070 Illegally parked - Restricted hours - vehicle removal

11.32.160 Illegally parked - Emergency parking - vehicle removal

11.32.250 (e) Illegally parked - Taxi Stand - vehicle removal

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38 Contract for Towing & Impound Services
Oct 1, 2026 –Sept 30, 2029

City of National City
and Tony’s Auto Center Inc.

ATTACHMENT C

Pursuant to Section 7.14 of this Agreement, the Serious Traffic Offender Program Fee shall apply to vehicles impounded pursuant to the following California Vehicle Code Sections. One or more of the following sections must be included on the impounding documents.

California Vehicle Code

22651(p) Includes Sections 12500, 14601, 14601.1, 14601.2, 14601.3, 14601.4, 14601.5 or 14604.
22651(h)(2) Upon service of notice of an order of Suspension or Revocation, pursuant to 13388 CVC.
14602.6 Unlicensed, Suspended or Revoked and involved in traffic collision. Sub- section (b) - Certified Mail, 2 -day notice to legal owner. Failure to notify legal owner results in maximum fee for 15 days vehicle storage. 14602.7 Fleeing a Peace Officer - Court Order upon affidavit of Peace Officer, to seize vehicle, not to exceed 30 days. Failure to notify legal owner (2 days’ notice) results in maximum fee for 15 days vehicle storage. 14607.6 Impoundment and Forfeiture of Motor Vehicle.

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PURCHASING TOWING CONTRACT

PRICE COMPARISONS
8/12/2026
Final Pricing
Road 1 Cortes Angelos Quality ASAP TONY'S LOYAL 2026 Difference

FEE SCHEDULE
BASIC TOWING. Includes First Hour Hookup,
Labor, Standby Time, for vehicles Under 9,500
GVW (unloaded).
$280 $180 $260 $200 $291 $220 $195 $200 +$20
MEDIUM SIZE - BASIC TOWING. Includes first
hour hookup, labor, standby time, for vehicles
over 9,500 GVW but less than 22,000
(unloaded)
$360 $205 $295 $220 $328 $230 $225 $220 +$15
LARGE SIZE - BASIC TOWING. includes first hour
hookup, labor, standby time, for vehicles over
22,000 GVW (unloaded)
$420 $240 $345 $240 $390 $240 $245 $240
ON-SCENE or Stand-by labor = each 15-minute
increment, beyond first hour. Is charged only
when extra ordinary labor must be expended to
recover a vehicle. Stand-by is charged when the
job cannot be started and must be explained on
the tow bill.
$120 $40 $40 $25 $60 $0 $170 per
hour
$40
DOLLIES. Will only be used when there is not a
less expensive, safe manner of handling the
situation.
$80 $55 $55 $50 $0 $0 $60 $55
DRY RUN. May also be known as a “hook-up –
drop fee” and is charged when the vehicle is
hooked up and the owner returns before the
vehicle is in transit.
$140 $0 $90 $50 $145 $0 $85 $0 -$50
PER MILE TOWING. Applies only to vehicles
recovered outside the jurisdiction of the city of
National City
$8 $5 $12 $5 $0 $0 $6 $5
MAXIMUM STORAGE - PER DAY. Per day is
defined as a 24-hour period.
$75 $50 $65 Basic $45
Med $55
Hvy $65
$75 $50 $55 $50
STORAGE PER HOUR. The maximum daily hourly
storage rate, not to exceed the maxiumum
storage-per day rate.
$15 $2.08 $15 $15 $75 $5 $2.29 $5 -$10
AFTER HOURS VEHICLE RELEASE. After 5PM
and before 8AM including weekends and all City-
observed holidays.
$140 $65 $100 $75 $60 $75 $75.00 $70 +$5
NOTIFICATION OF LIEN SALE. Vehicle valued at
less than $4.000, (22851.12 CVC).
$70 $35 $75 $70 $70 $70 $70 $70
NOTIFICATION OF LIEN SALE. Vehicle valued at
over $4,000. (22851.12 CVC).
$100 $70 $100 $100 $100 $100 $100 $100
POLICE EQUIPMENT TOWING. Inside jurisdictional
limits of National City
$0 $0 $0 $0 $0 $0 $0 $0
CITY EQUIPMENT TOWING & STORAGE Includes
all City vehicles. Also includes police vehicles towed from outside juridictional limits of National City
25% of
Basic
Towing
Fee
25% of
Basic
Towing
Fee
25% of
Basic
Towing Fee
25% of
Basic
Towing
Fee
25% of
Basic
Towing
Fee
25% of
Basic
Towing
Fee
25% of
Basic
Towing
Fee
25% Basic
Tow Fee
EVIDENTIARY TOWING AND STORAGE. Daily
storage fees for City/vehicles, seized vehicles, and
vehicles for evidentiary purposes.
25% of
Daily
Storage
fee &
25%
Basic
Towing
f
25% of
Daily
Storage
fee &
25%
Basic
Towing
f
25% of
Daily
Storage fee
& 25%
Basic
Towing fee
25% of
Daily
Storage
fee &
25%
Basic
Towing
f
25% of
Daily
Storage
fee & 25%
Basic
Towing fee
$0 25% of
Daily
Storage
fee &
25%
Basic
Towing
f
25% of Daily
Storage fee
TOWING OF VICTIMS' VEHICLES $60 $60.00 $60.00 $60 $60 $60 $90 $60 Red hilight = disqualified
**FINAL
: Final negotiated rates to which both
recommended vendors agreed. Contracts with

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PURCHASING TOWING CONTRACT

PRICE COMPARISONS
8/12/2026
Road 1 Cortes Angelos Quality ASAP TONY'S LOYAL 2026 Difference both vendors will charge the same rates

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RESOLUTION NO. 2026 –

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY, CALIFORNIA,

AUTHORIZING THE MAYOR TO EXECUTE AGREEMENTS WITH CORTES TOWING ENTERPRISES INC. AND TONY’S AUTO CENTER INC . DBA TONY’S AUTO CENTER FOR TOWING AND IMPOUND SERVICES , WITH INITIAL TERMS OF OCTOBER 1, 2026 TO SEPTEMBER 30, 2029.

WHEREAS, the City of National City (“City) Police Department requires professional towing and impound services to maintain the safety of the public right-of-way and to seize and secure vehicles in accordance with the laws of the State of California, the National City Municipal Code, and City regulations; and

WHEREAS, the City currently has two (2) towing and impound operators performing exclusive towing services within the City and desires to continue to receive such services from two (2) operators; and

WHEREAS, on May 5, 2026, the City Council adopted Resolution 2026-45, authorizing Request for Proposal (“RFP”) No. GS2526 -1 for towing and impound services and adopting policies for the selection of towing services in the City; and

WHEREAS, the RFP for towing and impound services was posted on May 12, 2026 on PlanetBids, a free public electronic bidding system; and

WHEREAS, the RFP was advertised in local newspapers (the San Diego Union Tribune and the Star News) and was mailed to potential vendors; and

WHEREAS, seven (7) proposals were received by the 12:00 p.m. deadline on June 15, 2026; and

WHEREAS, the tow contract working group, comprised of City staff from various departments, evaluated the proposals for compliance with the requirements of the RFP , conducted site visits, contacted references, and ranked the responsive proposals to determine the best overall value to the City; and

WHEREAS, upon review of the proposals, all documents submitted, and the results of the site visits and reference checks, the proposals of the two top-ranked tow operators, Cortes Towing Enterprises Inc. and Tony’s Auto Center Inc. dba Tony’s Auto Center, were deemed responsive and to provide the best overall value to the City, with each hav ing a history of accurate, dependable, and reliable service for public agencies, having participated in a competitive process through the RFP, and having the best qualifications and capability of delivering the highest quality, professional towing services for the City at reasonable prices; and

WHEREAS, Cortes Towing Enterprises Inc. and Tony’s Auto Center Inc. dba Tony’s Auto Center represent and warrant they are experienced and staffed in a manner such that they are capable and prepared to deliver the services required by the City, all in accordance with the terms and conditions of the RFP and resulting agreements; and

WHEREAS, City staff recommends awarding contracts to Cortes Towing Enterprises Inc. and Tony’s Auto Center Inc. dba Tony’s Auto Center for towing and impound services for the City

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of National City, with initial terms of October 1, 2026, to September 30, 2029, and authorizes the Mayor to execute the agreements.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF NATIONAL CITY, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS:

Section 1: That the City Council hereby authorizes the Mayor to execute Agreements with Cortes Towing Enterprises Inc. and Tony’s Auto Center Inc . dba Tony’s Auto Center for towing and impound services, with initial terms beginning October 1, 2026 and ending September 30, 2029.

Section 2: That th e City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

PASSED and ADOPTED this 1st day of September, 2026.

Ron Morrison, Mayor

ATTEST:

Shelley Chapel, MMC, City Clerk

APPROVED AS TO FORM:

Heidi Skinner, City Attorney

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AGENDA REPORT

Department: City Manager's Office
Prepared by: Douglas Schulze, City Manager
Meeting Date: Tuesday, September 1, 2026
Approved by: Douglas J. Schulze, City Manager

SUBJECT:

Business and Fiscal Sustainability Plan FY 2027 – 2031.

RECOMMENDATION:

A motion to approve the Business and Fiscal Sustainability Plan FY2027 – 2031.

BOARD/COMMISSION/COMMITTEE PRIOR ACTION:

Not Applicable.

EXPLANATION: The City’s current business and fiscal condition is not sustainable and must be addressed during the next six months to avoid depleting all unassigned fund balances. The attached Business & Fiscal Sustainability Plan lays out a five-year strategy built on three pillars:
(1) closing the structural General Fund gap through a ble nd of new/reformed revenue and disciplined cost containment, (2) rebuilding and protecting reserves so the city is never again “one bad year” from insolvency, and (3) accelerating waterfront and commercial economic development to diversify a revenue base that is currently over-reliant on sales tax.

FINANCIAL STATEMENT:

There is no projected fiscal impact to the City. The Business & Fiscal Sustainability Plan is intended to provide a strategy to achieve fiscal sustainability.

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

EXHIBITS:

Exhibit A – Business & Fiscal Sustainability Plan
Exhibit B – PowerPoint Presentation
Exhibit C – Resolution – Tyler Technologies Amendment

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City of National City: Business & Fiscal Sustainability Plan (FY 2027–2031) Executive Summary
National City, San Diego County's second -oldest incorporated city (1887), is a diverse, working - class community of roughly 55,000 –58,900 residents in the South Bay region, with a median household income around $64,800 –$66,800 and a poverty rate near 14 –18 percent ( California Demographics, World Population Review, U.S. Census Bureau QuickFacts ). The city carries the highest sales-tax revenue per capita in San Diego County thanks to major auto and retail corridors like Mile of Cars and Westfield Plaza Bonita, and its economy is anchored by Naval Base San Diego, Paradise Valley Hospital, and the National School District (National City Municipal Analysis, 2024).

Despite this tax base, National City's General Fund has a structural deficit, which begins in FY 2027 and grows significantly into future years. The city closed FY 2024 with a $4.3 million surplus and FY 2025 with a $500,000 surplus , but adopted an $83 million expenditure / $74 million revenue budget for FY 2026 that drew dow n reserves to balance, and now faces a n adopted FY 2027 General Fund shortfall of approximately $1 2.9 million — a gap large enough to exhaust the city's unassigned fund balance and push it to less than $300,000 ( National City Adopted FY 27 Budget).

This plan lays out a five -year business and fiscal strategy built on three pillars: (1) closing the structural General Fund gap through a blend of new/reformed revenue and disciplined cost containment, (2) rebuilding and protecting reserves so the city is never again "one bad year" from insolvency, and (3) accelerating waterfront and commercial economic development — chiefly the National City Balanced Plan , City property on Bay Marina Drive, and revitalization of downtown National City with higher-density, mixed-use redevelopment — to diversify a revenue base that is currently over-reliant on sales tax. It also incorporates the business license tax reform, which staff project could raise the city's business license revenue from about $700,000 to roughly $7 million annually, which Council voted not to place on the November 2026 ballot, but is scheduled for reconsideration by the Council at a future date.

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City & Economic Profile
Metric Value Source
Population (2024–
2026 estimates)
~55,000–58,900, declining ~0.5–1.5%/yr World Population Review, California Demographics
Land area 7.3–9.2 sq. miles National City Municipal Analysis Median household
income
~$64,800–$66,800 California Demographics
Poverty rate ~14–18% (child poverty higher) World Population Review, BiggestUSCities
Sales & use tax rate 8.75% National City Municipal Analysis Businesses /
employees
~2,000 businesses, ~25,200 jobs National City Municipal Analysis Principal employers Naval Base San Diego, Paradise Valley Hospital, National School District
National City Municipal Analysis
Top taxable sales
generators
Building materials, service stations, new
motor vehicle dealers, family apparel,
quick-service restaurants, department
stores
National City Municipal Analysis
FY 2026 total adopted
city budget (all funds)
$156.9 million ($83 M General Fund;
$75.9 M Utility, Special and Capital
Improvement Funds)
FY 2026 Adopted Budget

National City is unusually reliant on sales and district transaction taxes: combined Bradley-Burns sales tax and Proposition D district transaction tax make up 56 percent of General Fund revenue, and sales plus property tax together account for roughly 73 percent of the revenue budget (FY 26 Adopted Budget). That concentration is a structural vulnerability: post Proposition 13, cities have generally relied on sales tax, and retail has experienced declines in recent decades.

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Current Fiscal Position
Multi-Year General Fund Trend
Fiscal Year GF
Revenue
GF
Expenditure
Gap How Balanced
FY 2024 (actual) $75.8M $70.1M ~$5.7M surplus Surplus
FY 2025
(unaudited)
$78.6M $78.1M $500,000 surplus Surplus
FY 2026
(adopted)
$73.7M $83.0M ~$9.3 M projected deficit Drawdown of
reserves
FY 2027
(adopted)
$76.4M $89.3 M ~$12.9M projected deficit Drawdown of
reserves

FY 2027 Estimated Revenue Detail
Revenue Source FY 2026 Adopted FY 2027 Adopted Change
Sales & Use Tax $24,261,000 $24,723,000 +1.9%
District Transaction Tax (Prop. D) $16,868,000 $18,125,000 +7.5% Property Tax $5,082,384 $4,946,900 (2.7%)
Property Tax Allocated (pass-through) ($2,296,946) ($2,243,150) (2.3%) Property Tax in Lieu of VLF $9,837,550 $9,896,000 +0.6% Other Revenues $19,946,009 $20,987,153 +5.2%
Transfers-in $5,500 $5,500 —
Total $73,703,497 $76,440,403 +3.7%

Source: National City Adopted FY 2027 General Fund Budget

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FY 2027 Preliminary Expenditure Detail
Category FY 2026 Adopted FY 2027 Adopted Change
Personnel Services $54,165,445 $60,450,247 +11.6%
Maintenance & Operations $9,890,698 $9,048,130 (8.5%)
Capital Outlay $255,773 $255,773 0%
Debt Service $554,377 $418,913 (24.4%)
Internal Service Charges $8,113,199 $9,538,530 17.6%
Transfers Out $9,993,791 $9,615,358 (3.8%)
Total $82,973,283 $89,326,951 +7.7%

Source: National City Adopted FY 2027 General Fund Budget Personnel costs are the primary driver of the widening gap, growing 1 1.6 percent year-over-year and reflecting annualized cost -of-living and equity increases, including roughly 10 percent raises approved for firefighters and rank-and-file city employees in September 2025 that are projected to cost more than $5 million over three years, plus more than a dozen new hires (custodians, a code enforcement officer, recreation supervisors, library security) adding close to $3 million per year.

Pension and insurance costs add further pressure: the FY 2027 Adopted Budget carries a $1.9 million increase in CalPERS unfunded liability costs, a $1.4 million increase in general liability insurance premiums, and $4.4 million in required unfunded actuarial liability (UAL) payments plus $4.7 million for debt service on the city's 2021 Pension Obligation Bonds (National City Preliminary FY 2026 –27 Budget Presentation ). Statewide, Ca lPERS' overall funded ratio was about 78.2 percent in 2025, underscoring that pension cost growth is a shared, not unique, pressure on California cities (Equable Institute).

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Reserves: The Closing Window
Item Amount Source
Total reserve balance (June 2025
snapshot)
~$51M, about $9M
above policy target
Annual Reports, City of National City
Unassigned fund balance + economic
contingency reserve (2024)
>$37M Annual Reports, City of National City
Same reserves, projected end of FY 2027 <$20M Adopted FY 2027 Budget Projected ending unassigned fund
balance, FY 2025
$23,394,613 Preliminary FY26/27 Budget Presentation
Less: FY 2026 deficit (based on Q3
projections)
($10,255,467) Preliminary FY26/27 Budget Presentation
Projected ending unassigned fund
balance, FY 2026
$13,139,146 Preliminary FY26/27 Budget Presentation
Less: FY 2027 deficit ($12,886,548) Adopted FY 2027 Budget Projected ending unassigned fund
balance, FY 2027
$252,598 Adopted FY 2027 Budget

On current trajectory, National City's unassigned fund balance becomes nearly exhausted during FY 2027 absent intervention. This is the single most urgent fact this plan is built to address.

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SWOT Analysis
Strengths
 Highest per-capita sales-tax revenue in San Diego County, anchored by Mile of Cars and Plaza Bonita (National City Municipal Analysis)
 Strategic location near downtown San Diego, the U.S.–Mexico border, and San Diego Bay  150 acres of underused public tidelands ( Port of San Diego /waterfront) with an approved redevelopment entitlement
 Prior proactive pension management: $84 million in 2021 Pension Obligation Bonds reduced the effective interest rate from 7.0% to 6.8% and are projected to save roughly $20 million over the bond term (National City Municipal Analysis)
 Voter-approved dedicated revenue streams already in place: Proposition D (transactions/use tax), and Measure C (hotel tax) (Ballotpedia)
Weaknesses
 Structural deficit for FY 2027 and beyond, which exhausts reserves in FY 2028  Revenue base overweighted in sales tax (41%) which is stagnant (1.9% growth) and cyclical  Below-county-average household income and above-average poverty limit  Local tolerance for new taxes/fees
 Recent compensation and staffing increases were approved without a matched, ident ified revenue offset
 National City is built out, which will require more expensive infill redevelopment to reach its housing targets and expand commercial/retail uses, particularly in the Downtown urban core Opportunities
 National City Balanced Plan waterfront redevelopment (Port of San Diego partnership):

Pepper Park expansion by ~50% (to 7.69 acres), an RV park, and eventual development of up to two hotels (up to 365 rooms), approved by the California Coastal Commission in December 2025
 Business license tax modernization from flat-fee to tiered/gross-receipts model, projected to raise $6+ million in new annual revenue

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 Continued growth of Proposition D district transaction tax (+7.5% projected for FY27)  Cannabis business tax revenue (~$400K, including San Diego County's first cannabis consumption lounge) and further cannabis license expansion)  Redevelopment Successor Agency residual balance distributions ($4.1M/year) continuing as a recurring "other revenue" line
Threats
 California's own state-level structural deficit (~$18 billion projected for FY 2026–27) limits the likelihood of new state aid to cities
 A November 2026 statewide ballot initiative would raise the voter-approval threshold for local revenue measures from a simple majority to two-thirds and could retroactively unwind existing voter-approved property-related taxes
 Organized business-community opposition to the business license tax reform from the San Diego Regional Chamber of Commerce and the South County Rental Housing Association, which could delay or defeat the measure
 Continued softening of brick-and-mortar retail sales tax nationally  Rising CalPERS costs and general liability insurance premiums outside city control Strategic Goals

1. Eliminate the structural General Fund deficit within t hree fiscal years (by end of FY 2029) without depleting reserves below policy minimums.

2. Diversify General Fund revenue so no single source exceeds roughly one -third of unrestricted revenue by FY 2031.

3. Rebuild reserves to at least the Council's policy target plus a genuine contingency cushion, reversing the current drawdown trend.

4. Advance the National City Balanced Plan waterfront development to convert underused tidelands into a recurring, growing hotel-tax and lease-revenue stream.

5. Modernize revenue admini stration (business licensing, short -term rental taxation, fee schedules) so revenue keeps pace with actual economic activity in the city.

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6. Protect core services — public safety (currently ~$96.4 million, over half of discretionary unrestricted funding), libraries, parks, and recreation — throughout the balancing process (FY 2026 City Manager's Budget Message).

Budget-Balancing Plan
A. Revenue Enhancement Strategy
Initiative Status Estimated Annual Impact
Business license tax
reform: shift from flat fee to
tiered/gross-receipts
structure; extend to short-
term rental gross receipts
Council workshop held July 21, 2026; formal
vote scheduled August 4, 2026; would head
to November 2026 ballot. Council delayed
vote to a future ballot.
~$6.3M net new (from
~$700K to ~$7M)
National City Balanced
Plan hotels (up to 4 hotels,
700 rooms) at Port of San
Diego waterfront and Bay
Marina Drive

A more robust, diversified
economic development
strategy

Prioritize outreach for big
box commercial

Coastal Commission approved Dec. 2025;
RFPs for hotel developers expected within
months; phase one (park amenities)
reopened March 2026

Ongoing

CarMax moving forward
New, growing TOT
(currently 10% of room
rate) plus ground lease
revenue once hotels open

Identify retail and service
gaps to target business for
recruitment. Living wage
employment

New, growing retail sales
and use tax and property
tax base
Proposition D district
transaction tax growth
Existing, growing +$1.26M (FY26→FY27,
+7.5%)
Cannabis business tax and
licensing expansion
Existing, room to grow ~$400K current;
incremental growth
possible with additional
licenses

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Franchise fee review
(electric, waste)
Ongoing $3.2M current baseline;
review for market-rate
adequacy
Fee study / cost-recovery
update for permits,
recreation, and
development services
Recommended Typically 5–15% of fee
revenue in comparable
cities that haven't updated
fee schedules in several
years
Grant capture
(federal/state
infrastructure, public
safety, housing)
Recommended, ongoing Offsets capital and one-
time costs; reduces
reliance on GF for CIP

The business license tax reform is the single largest near-term lever, but it is politically contested.

Given this, the plan recommends the city pair any ballot measure with a genuine, time -bound business engagement process — addressing concerns that the proposal moved to a vote before local businesses were consulted — to maximize the odds of voter approval in November 2026.

B. Expenditure Management and Cost Containment
 Position control: Freeze non -public-safety vacant positions pending completion of the balancing plan, consistent with measures the city has already contemplated in prior projected deficit years.
 Compensation discipline: Slow the pace of future cost -of-living/equity adjustm ents until structural balance is restored; require any new compensation agreement (police, city administrators) to include an identified, matching revenue or savings offset before Council approval.
 New-hire moratorium exceptions only for revenue -generating, cost-saving or safety- critical roles: Re-evaluate the FY26 wave of new hires (custodians, code enforcement, recreation supervisors, library security, costing ~$3M/year) against measurable service outcomes before adding further net positions.

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 Pension cos t management: Continue leveraging the 2021 Pension Obligation Bond restructuring and the Pension Reserve Trust Fund (to which the city has contributed $21.5 million to date) to smooth CalPERS volatility; resume Additional Discretionary Payments (currently $6.4M held off) once structural balance is achieved, since ADPs reduce long-term interest costs (FY 2025–26 City Manager's Budget Message).  Insurance and risk management review: With general liability premiums rising $1.4 million, pursue a formal risk -pool or joint -powers-authority review, safety -training investment to reduce claims, and higher deductible/self-insurance analysis.  Internal service and overhead review: Internal service charges rose 23.3% year-over-year; audit fleet, IT, and facilities internal service fund allocations for one-time versus recurring cost drivers.
 Convert one-time costs to one-time funding: As previously identified by city finance staff, shift short-term or project-based costs off the ongoing personnel/operations base and fund them from one -time sources (grants, Successor Agency distributions, ARPA -successor funds) where legally permissible.
 Quarterly budget-to-actual reporting: Move from an annual to a quarterly Council review cadence (already partly in practice via mid -year and 4th -quarter reviews) so adjustments happen before deficits compound.

C. Reserve policy and fund-balance stabilization
 Formally re -commit to the Council's reserve policy targets (unassigned fund balance + economic contingency reserve) and prohibit further net reserve draws once the unassigned fund balance reaches the policy floor.
 Because the unassigned fund balance is projected to be exhausted in FY 2027 absent action, treat FY 2027 as the "line in the sand" budget: any gap not closed by the revenue and expenditure actions above must be closed with identified structural solutions, not additional reserve draws.
 Once structural balance is achieved (target: FY 2029), redirect a defined share of new hotel- tax and business-license revenue growth into rebuilding reserves until the policy target (plus a buffer above it, mirroring the ~$9M cushion the city held as recently as m id-2025) is restored.

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D. Illustrative Multi-Year Path to Balance
Fiscal
Year
Projected
Structural
Gap
(status quo)
Plan Actions Applied Residual Gap After
Plan
FY 2027 ~$16.1M Hiring freeze, contract renegotiation, one- time Successor Agency/CIP fund shifts
Reduced but likely still
a moderate reserve
draw
FY 2028 Grows further
under status
quo
Business license tax reform revenue (if
approved Nov. 2026) begins flowing;
Proposition D growth continues
Materially narrowed
FY 2029 — First full year of reformed business license
tax; hotel RFP/lease progress
Target: structural
balance achieved
FY 2030 — First hotel(s) potentially breaking
ground/opening; reserve rebuilding begins
Surplus directed to
reserves
FY 2031 — Full waterfront hotel TOT/lease revenue
online
Reserves restored to
policy target + buffer

This trajectory is illustrative and depends heavily on voter approval of the business license tax measure and the pace of National City Balanced Plan hotel development; the plan's governance section below builds in checkpoints to adjust if either lag.

Economic Development Strategy
The National City Balanced Plan is the centerpiece of the city's long -term revenue diversification strategy. Developed jointly with the Port of San Diego, it expands Pepper Park by nearly 50 percent (from 5.19 to 7.69 acres) and, in its commercial phase, allows for an RV park with about 150 sites, 25 tent sites, 12 cabins, and — when economically viable — conversion of up to 65 RV spaces into two hotels with up to 365 rooms, plus dry boat storage. Phase one — new playgrounds, a splash pad, plazas, and waterfront amenities — reopened in March 2026, with restroom and fishing pier upgrades continuing into early 2026. Phase two moves to commercial development, with RFPs for

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hotel developers expected within a few months of the March 2026 reopening and negotiation s proceeding with developer GB Capital.

Local officials have been explicit that this is a fiscal strategy, not just a recreation project. Local officials have noted that neighboring Chula Vista and San Diego have expanded their hotel and TOT bases and that National City — among the lowest-income cities in the county — needs to do the same. In addition, it is broadly recognized that the underused 150-acre tideland parking lot is land the city "must" redevelop to bring in jobs and revenue. The plan should:
 Set a firm RFP timeline for the hotel parcels and hold the Port of San Diego and GB Capital accountable to it, given how central this revenue is to the multi-year balancing path.  Model conservative and optimistic TOT/lease -revenue scenarios for Council so fu ture budgets do not repeat the pattern, in which "projected revenues would rise... without explaining why".
 Continue supporting the Mile of Cars auto dealership corridor and Westfield Plaza Bonita retail base, National City's largest existing sales -tax gen erators, through streamlined permitting and the Economic Development Strategic Plan's business -support goals ( 2022 General Plan).
 Pursue additional cannabis licensing (retail and consumption lounges) as a smaller but growing, higher-margin revenue source.

Capital Improvement Program Alignment
The FY 2026 budget dedicates $98.7 million to capital investment across the city's funds, including $41.1 million for the electric capital program, $19.8 million for water, $13.1 million for wastewater, $9.1 million for parks, recreation and libraries, $7.6 million for public works, $5.9 million for general government, $1.2 million for citywide technology, and $900,000 for public safety ( FY 2026 City Manager's Budget Message). Because most of this is funded through dedicated utility enterprise funds rather than the General Fund, it should continue on its existing schedule; however, the roughly $1 million annual General Fund transfer to the Capital Improvement Fund should be reviewed alo ngside other discretionary transfers during the balancing period to ensure it isn't crowding out operating-deficit solutions.

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Implementation Roadmap
Near Term (now – FY 2027, through mid-2027)
 August 4, 2026: Council vote on the business license tax refo rm ordinance and whether to place it on the November 2026 ballot.
 Launch a structured business-engagement process on the tax reform to address the process concerns and improve odds of voter approval.
 Implement a hiring review/freeze for non-safety vacancies and complete a line-by-line review of FY 2027 discretionary spending.
 Issue Bay Marina Drive hotel-parcel RFPs for the two City-owned parcels on 24th Street.  Complete a citywide user-fee and franchise-fee adequacy study.

Mid-Term (FY 2028 – FY 2029)
 If approved, implement the reformed business license tax and monitor actual versus projected collections quarterly.
 Negotiate upcoming police and city -administration labor contracts with built -in revenue/savings offsets.
 Support advancement of hotel developer selection and entitlement/lease negotiations at the waterfront.
 Target structural General Fund balance (recurring revenue ≥ recurring expenditure) by end of FY 2029.

Long Term (FY 2030 – FY 2031)
 Bring waterfront hotel(s) into operation and realize new TOT/lease revenue.  Resume CalPERS Additional Discretionary Payments once structural balance is confirmed.  Rebuild unassigned fund balance and economic contingency reserve to policy target plus buffer.
 Reassess the five-year plan and set new targets for FY 2031–36.

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Risk Management
Risk Likelihood Mitigation
November 2026 ballot measure fails or is
delayed
Moderate given
organized
opposition
Prepare a fallback expenditure-only
balancing scenario; avoid over-
programming spending against
unrealized revenue
Statewide 2/3-vote ballot initiative
passes, raising the threshold for local
revenue measures and threatening
existing measures
Uncertain,
pending Nov.
2026 statewide
vote
Accelerate any planned revenue
measures ahead of the initiative's
effective date where legally possible;
diversify toward non-tax revenue
(leases, fees, franchise) as a hedge
Port of San Diego hotel development
slips past projected timeline
Medium (large
waterfront
projects
commonly slip)
Do not build the FY 2028–29 balance
target around hotel revenue alone; treat
it as upside, not baseline
Sales tax continues to underperform
amid retail softening
Medium Diversify revenue mix per Strategic Goal
2; monitor Mile of Cars and Plaza Bonita
performance quarterly
CalPERS investment returns
underperform, raising required
contributions
Low-Medium Maintain Pension Reserve Trust Fund
contributions when feasible; retain POB
structure advantages
Public backlash to expenditure cuts
affecting visible services
High-Medium Sequence cuts to protect public safety
and core services first; communicate
transparently on trade-offs

Governance and Performance Monitoring
 Report General Fund actual-versus-budget performance to Council quarterly (building on the existing mid-year and 4th-quarter review practice) (FY25 Mid-Year Budget Workshop, FY25 4th Quarter Budget Review).

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 Track a standing dashboard of: unassigned fund balance level (versus policy floor), recurring revenue vs. recurring expenditure gap, business license tax collections (if enacted), and waterfront project milestones.
 Require any new ongoing expenditure proposal (compensation increases, new positions, new programs) to be accompanied by an identified ongoing funding source before Council approval — closing the gap identified in the FY26 raise s/hiring decisions that lacked a matched offset.
 Revisit this plan annually during the budget cycle and formally update it at the mid -point (FY 2029) to reflect actual ballot-measure and waterfront-development outcomes.

Conclusion
National City's fiscal challenge is serious but not unusual for a small city with a concentrated, sales- tax-dependent revenue base and rising personnel and pension costs — the state of California itself faces a comparable structural deficit dynamic (California LAO). What distinguishes National City's position is the short runway: on the current path, the unassigned fund balance goes negative during FY 2027. The path out combines near-term expenditure discipline with two significant, city-specific revenue opportunities already in motion — business license tax modernization and waterfront hotel development at Pepper Park and at Bay Marina Drive — that, if executed with the accountability and monitoring structure outlined here, can restore structural balance within roughly three fiscal years and set the city on a more diversified, resilient fiscal footing for the decade ahead.

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BUSINESS & FISCAL SUSTAINABILITY PLAN
(FY 2027 – 2031)

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What is Fiscal
Sustainability?

FISCAL SUSTAINABILITY
• The ability of a government to sustain:
• Current spending
• Tax and other policies
• Long-term view
• Without threatening government solvency
• Without excessive debt accumulation
• Without defaulting on its liabilities or promised
expenditures

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Why Reserves Matter

STUFF HAPPENS
• Economic downturns
• Pandemics
• Geopolitical Crises
• Uncontrollable Impacts
• Unfunded mandates
• Insurance Costs
• Pension Obligations
• Natural or Manmade Disasters

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Fiscal Sustainability Theory Informs Policy
Decisions

IT GUIDES
• Debt management strategies
• Fiscal rules & targets
• Crisis response planning

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Multi-year General Fund Trend
Fiscal Year GF Revenue GF Expenditure Gap How Balanced
FY 2024 (actual) $75.8M $70.1M ~$5.7M surplus Surplus
FY 2025 (unaudited) $78.6M $78.1M $500,000 surplus Surplus FY 2026 (adopted) $73.7M $83.0M ~$9.3 M projected deficit Drawdown of reserves FY 2027 (adopted) $76.4M $89.3 M ~$12.9M projected deficit Drawdown of reserves

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Reserves: The Closing Window
Item Amount
Total reserve balance (June 2025 snapshot) ~$51M, about $9M above policy target Unassigned fund balance + economic contingency
reserve (2024)
>$37M
Same reserves, projected end of FY 2027 <$20M
Projected ending unassigned fund balance, FY 2025 $23,394,613 Less: FY 2026 deficit (based on Q3 projections) ($10,255,467) Projected ending unassigned fund balance, FY 2026 $13,139,146 Less: FY 2027 deficit ($12,886,548)
Projected ending unassigned fund balance, FY 2027 $252,598

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• Highest per-capita sales tax revenue in San Diego
County
• Strategic location near downtown San Diego, the
U.S.-Mexico border, and San Diego Bay
• 150 acres of underused public tidelands with an
approved redevelopment entitlement
• Prior proactive pension management: $84M in 2021
Pension Obligation Bonds reduced the effective
interest rate from 7.0% to 6.8% to save roughly
$20M over term of bond
• Voter-approved dedicated revenue streams already
in place: Proposition D (transactions/use tax), and
Measure C (hotel tax)
SWOT Analysis - Strengths

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• Structural deficit for FY 2027 and beyond, which
exhausts reserves in FY 2028
• Revenue base overweighted in sales tax (41%)
which is stagnant (1.9% growth) and cyclical
• Below county average household income and
above average poverty limit
• Local tolerance for new taxes/fees
• Recent compensation and staffing increases were
approved without a matched, identified revenue
offset
• National City is built out, which will require more
expensive infill redevelopment to reach its housing
targets and expand commercial/retail uses,
particularly in the downtown urban core
SWOT Analysis - Weaknesses

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• National City Balanced Plan waterfront
redevelopment
• Business license tax modernization from flat fee to
tiered/gross receipts model
• Continued growth of Proposition D district
transaction tax
• Redevelopment Successor Agency residual
balance distributions continuing as a recurring
“other revenue” line
• Cannabis business tax revenue and further
cannabis license expansion
• Redevelopment Successor Agency property sale or
long-term ground lease
SWOT Analysis - Opportunities

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• California’s state level structural deficit limits the likelihood of new state aid to cities
• November 2026 statewide ballot initiative would raise the voter-approval threshold for local revenue measures from a simple majority to two-thirds and could
retroactively unwind existing voter-approved property
related taxes
• Organized business community opposition to the
business license tax reform from the San Diego
Regional Chamber of Commerce and the South County
Rental Housing Association.
• Continued softening of brick and mortar retail sales tax nationally
• Rising CalPERS costs and general liability insurance
premiums outside city control
SWOT Analysis - Threats

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1. Eliminate the structural General Fund deficit within three fiscal years without depleting reserves below
policy minimums.

2. Diversify General Fund revenue so no single source
exceeds roughly one-third of unrestricted revenue by
FY 2031.

3. Rebuild reserves to at least the Council’s target plus a genuine contingency cushion, reversing the current
drawdown trend.

4. Advance the National City Balanced Plan waterfront
development to convert underused tidelands into
recurring, growing hotel tax and lease revenue stream.

5. Modernize revenue administration (business licensing, short-term rental taxation, fee schedules) so revenue
keeps pace with actual economic activity in the city.

6. Protect core services – public safety, libraries, parks, and recreation – throughout the balancing process.

STRATEGIC GOALS

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1. Implement Priority Based Budgeting

2. Business License Tax Reform

3. National City Balanced Plan

4. More robust, diversified economic development
strategy

5. Prioritize outreach for big box commercial

6. Proposition D District transaction tax growth

7. Franchise Fee Review (electric, waste)

8. Cannabis business tax and licensing expansion

9. Fee Study/cost recovery update for permits, recreation, and development services

10. Grant capture

REVENUE ENHANCEMENT STRATEGY

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1. Implement Priority Based Budgeting

2. Position control

3. Compensation discipline

4. New-hire moratorium

5. Pension cost management

6. Insurance and risk management review

7. Internal services and overhead review

8. Convert one-time costs to one-time funding

9. Quarterly budget-to-actual reporting

EXPENDITURE MANAGEMENT AND COST

CONTAINMENT

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1. Formally re-commit to the Council’s reserve policy
targets and prohibit further net reserve draws once
the unassigned fund balance reaches the policy
floor

2. Treat FY 2027 as the “line in the sand” budget; any
gap not closed by previously outline actions must
be closed with identified structural solutions, not
additional reserve draws

3. Once structural balance is achieved (target: FY
2029), redirect a defined share of new hotel tax
and business license revenue growth into
rebuilding reserves until policy targets are restored

RESERVE POLICY & FUND BALANCE

STABILIZATION

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ILLUSTRATIVE MULTI-YEAR PATH TO

BALANCE
Fiscal Year Projected Structural
Gap (status quo)
Plan Actions Applied Residual Gap After Plan
FY 2027 ~$16.1M Hiring freeze, contract renegotiation, one-time Successor Agency/CIP fund shifts
Reduced but likely still a moderate
reserve draw
FY 2028 Grows further under status
quo
Business license tax reform revenue (if approved
Nov. 2026) begins flowing; Proposition D growth
continues
Materially narrowed
FY 2029 — First full year of reformed business license tax; hotel RFP/lease progress
Target: structural balance achieved
FY 2030 — First hotel(s) potentially breaking ground/opening; reserve rebuilding begins
Surplus directed to reserves
FY 2031 — Full waterfront hotel TOT/lease revenue online Reserves restored to policy target + buffer

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RESOLUTION NO. 2026 -

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY ,

CALIFORNIA AUTHORIZING THE MAYOR TO EXECUTE AN AMENDMENT TO THE AGREEMENT WITH TYLER TECHNOLOGIES, INC. TO ADD PRIORITY BASED BUDGETING SaaS

WHEREAS, the City is facing a significant structural budget deficit that if left unresolved will cause the City to become insolvent; and WHEREAS, Tyler Technologies, Inc. is a sole source provider of Priority Based Budgeting SaaS; and
WHEREAS, Priority Based Budgeting has been identified as an ICMA leading practice since 2011, is central to GFOA’s national budget guidance including the Rethinking Budgeting initiative, and has been implemented in more than 300 governments and school systems across 30-plus states and Canada; and
WHEREAS, Priority Based Budgeting SaaS is a financial tool that will accelerate the process of identifying what the City does, what each service costs, who depends on it, or what would change if it were delivered differen tly. Priority Based Budgeting will close the structural budget deficit gap.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF NATIONAL CITY,

CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS:

Section 1: That the City Council hereby authorizes the Mayor to execute an amendment to the agreement with Tyler Technologies, Inc. to add Priority Based Budgeting SaaS for a term of three (3) years. The Amendment is attached to the Agenda Report as Exhibit A.

Section 2: That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

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Resolution No. 2026 –
Page Two

PASSED and ADOPTED this __1__st day of _September, 2026.

Ron Morrison, Mayor

ATTEST:

Shelley Chapel, City Clerk

APPROVED AS TO FORM:

Heidi Skinner, City Attorney

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AGENDA REPORT

Department: City Manager's Office
Prepared by: Douglas Schulze, City Manager
Meeting Date: Tuesday, September 1, 2026
Approved by: Douglas J. Schulze, City Manager

SUBJECT:

Amendment to Tyler Technologies, Inc. Agreement to Add Priority Based Budgeting Saas.

RECOMMENDATION:

Adopt a Resolution, Entitled, “Resolution of the City of National City, California, Authorizing the Mayor to Execute an Amendment to the Agreement with Tyler Technologies, Inc. Adding Priority Based Budget Software as a Service (SaaS).”

BOARD/COMMISSION/COMMITTEE PRIOR ACTION:

Not Applicable.

EXPLANATION: The City Council received a presentation on Priority Based Budgeting during the August 18, 2026 meeting. Following the presentation, Q & A, and Council deliberation, direction was provided to the City Manager to provide additional information via a white paper at the September 1, 2026 Regular City Council Meeting. Attachments to this Agenda Report include the Amendment to the Agreement and the requested Priority Based Budgeting SaaS White Paper.

FINANCIAL STATEMENT:

The Amendment includes three (3) years access to Priority Based Budgeting SaaS , implementation, support and onsite training. The contract total is $254,400, which includes a one- time fee of $14,400 and annual recurring fees of $80,000.

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

EXHIBITS:

Exhibit A – Business & Fiscal Sustainability Plan
Exhibit B – Amendment to the Agreement
Exhibit C – Priority Based Budgeting White Paper
Exhibit D -- Resolution

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Source: National City Adopted FY 2027 General Fund Budget

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On current trajectory, National City's unassigned fund balance becomes nearly exhausted during FY 2027 absent intervention. This is the single most urgent fact this plan is built to address.

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1. Eliminate the structural General Fund deficit within t hree fiscal years (by end of FY 2029) without depleting reserves below policy minimums.

2. Diversify General Fund revenue so no single source exceeds roughly one -third of unrestricted revenue by FY 2031.

3. Rebuild reserves to at least the Council's policy target plus a genuine contingency cushion, reversing the current drawdown trend.

4. Advance the National City Balanced Plan waterfront development to convert underused tidelands into a recurring, growing hotel-tax and lease-revenue stream.

5. Modernize revenue admini stration (business licensing, short -term rental taxation, fee schedules) so revenue keeps pace with actual economic activity in the city.

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A more robust, diversified
economic development
strategy

Prioritize outreach for big
box commercial

Coastal Commission approved Dec. 2025;
RFPs for hotel developers expected within
months; phase one (park amenities)
reopened March 2026

Ongoing

CarMax moving forward
New, growing TOT
(currently 10% of room
rate) plus ground lease
revenue once hotels open

Identify retail and service
gaps to target business for
recruitment. Living wage
employment

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The business license tax reform is the single largest near-term lever, but it is politically contested.

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hotel developers expected within a few months of the March 2026 reopening and negotiation s proceeding with developer GB Capital.

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1 AMENDMENT

This amendment (“Amendment”) is effective as of the date of signature of the last party to sign as indicated below (“Amendment Effective Date”), by and between Tyler Technologies, Inc. with offices at One Tyler Drive, Yarmouth, Maine 04096 (“Tyler”) and the City of National City, California, with offices at 1243 National City Boulevard, National City, California 91950 (“Client”).

WHEREAS, Tyler and Client are parties to an agreement dated October 27, 2022 (“Agreement”); and

WHEREAS, Tyler and Client desire to amend the terms of the Agreement as provided herein.

NOW THEREFORE, in consideration of the mutual promises hereinafter contained, Tyler and the Client agree as follows:

1. The items set forth in the Amendment Investment Summary attached as Exhibit 1 to this Amendment are hereby added to the Agreement as of the first day of the first month following the Amendment Effective Date. The initial term for Priority Based Budgeting SaaS is three (3) years from that date and will renew automatically for additional one (1) year terms, at then- current rates, unless terminated in writing upon no less than sixty (60) days written notice to Tyler prior to the end of that initial term or any subsequent annual renewal term.

Notwithstanding any discontinuance of other Tyler SaaS applications included under the Agreement, the Agreement shall remain in effect for the entirety of the initial term for Priority Based Budgeting SaaS, unless the Agreement is terminated in its entirety in accordance with Section F(2) of the Agreement. Payment of fees and costs for such items shall conform to the following terms:

a. Annual SaaS Fees are invoiced on an annual basis, commencing the first day of the first month following the Amendment Effective Date. The annual fees for the initial term indicated in Paragraph 1 above are set forth in Exhibit 1. Thereafter, annual fees shall be at then-current rates.
b. Services fees, plus applicable expenses, are invoiced as provided/incurred.

2. This Amendment shall be governed by and construed in accordance with the terms and conditions of the Agreement.

3. Except as expressly indicated in this Amendment, all other terms and conditions of the Agreement shall remain in full force and effect.

[SIGNATURE PAGE FOLLOWS]

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2 IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the dates set forth below.

Tyl
er Technologies, Inc. City of National City, California By
: By:

Na
me: Name:

Titl
e: Title:

D
ate: Date:

APPROVED AS TO FORM:

By: _______________________________
Heidi Skinner
City Attorney

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Exhibit 1
3 Exhibit 1
Amendment Investment Summary

The following Amendment Investment Summary details the additional software, products, and services to be delivered by us to you under the terms of the Agreement. This Amendment Investment Summary is effective as of the Effective Date, despite any expiration date in the Investment Summary that may have lapsed as of the Effective Date.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

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2026-625071-G3S3V5 CONFIDENTIAL Page 1

Quoted By: Jason Frink
Quote Expiration: 01/05/27
Quote Name: City of National City-ERP-PBB
Quote Description: National City, CA
Saas Term 3.00
Sales Quotation For: Shipping Address:

City Of National City
1243 National City Blvd
National City CA 91950-4397
Tyler SaaS and Related Services
Description Qty Imp. Hours Annual Fee
Priority Based Budgeting
Priority Based Budgeting - Enterprise 1 30 $ 80,000.00
TOTAL 30 $ 80,000.00
Professional Services
Description Quantity Unit Price Ext Discount Extended Price Maintenance Priority Based Budgeting - Director Enterprise 30 $ 255.00 $ 0.00 $ 7,650.00 $ 0.00 Priority Based Budgeting - Project Management Enterprise 4 $ 0.00 $ 0.00 $ 0.00 $ 0.00 Remote Implementation 30 $ 225.00 $ 0.00 $ 6,750.00 $ 0.00 TOTAL $ 14,400.00 $ 0.00

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2026-625071-G3S3V5 CONFIDENTIAL Page 2 Summary One Time Fees Recurring Fees
Total Tyler License Fees $ 0.00 $ 0.00
Total SaaS $ 0.00 $ 80,000.00
Total Tyler Services $ 14,400.00 $ 0.00
Total Third-Party Hardware, Software, Services $ 0.00 $ 0.00 Summary Total $ 14,400.00 $ 80,000.00
Contract Total $ 254,400.00
Comments
Client agrees that items in this sales quotation are, upon Client's signature or approval of same, hereby added to the existing agreement ("Agreement") between the parties and subject to its terms. Additionally, payment for said items, as applicable but subject to any listed assumptions herein, shall conform to the following terms:
•License fees for Tyler and third party software are invoiced upon the earlier of (i) deliver of the license key or (ii) when Tyler makes such software available for download by the Client;
•Fees for hardware are invoiced upon delivery;
•Fees for year one of hardware maintenance are invoiced upon delivery of the hardware; •Annual Maintenance and Support fees, SaaS fees, Hosting fees, and Subscription fees are first payable when Tyler makes the software available for download by the Client (for Maintenance) or on the first day of the month following the date this quotation was signed (for SaaS, Hosting, and Subscription), and any such fees are prorated to align with the applicable term under the Agreement, with renewals invoiced annually thereafter in accord with the Agreement.
•Fees for services included in this sales quotation shall be invoiced as indicated below.

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2026-625071-G3S3V5 CONFIDENTIAL Page 3 •Implementation and other professional services fees shall be invoiced as delivered. •Fixed-fee Business Process Consulting services shall be invoiced 50% upon delivery of the Best Practice Recommendations, by module, and 50% upon delivery of custom desktop procedures, by module. •Fixed-fee conversions are invoiced 50% upon initial delivery of the converted data, by conversion module, and 50% upon Client acceptance to load the converted data into Live/Production environment, by conversion module. •Except as otherwise provided, other fixed price services are invoiced upon complete delivery of the service. For the avoidance of doubt, where "Project Planning Services" are provided, payment shall be invoiced upon delivery of the Implementation Planning document.

Dedicated Project Management services, if any, will be invoiced monthly in arrears, beginning on the first day of the month immediately following initiation of project planning.
•If Client has purchased any change management services, those services will be invoiced in accordance with the Agreement. •Notwithstanding anything to the contrary stated above, the following payment terms shall apply to services fees specifically for migrations: Tyler will invoice Client 50% of any Migration Fees listed above upon Client approval of the product suite migration schedule. The remaining 50%, by line item, will be billed upon the go-live of the applicable product suite. Tyler will invoice Client for any Project Management Fees listed above upon the go-live of the first product suite. Unless otherwise indicated on this Sales quotation, annual services will be invoiced in advance, for annual terms commencing on the date this sales quotation is signed by the Client. If listed annual service(s) is an addition to the same service presently existing under the Agreement, the first term of the added annual service will be prorated to expire coterminous with the existing annual term for the service, with renewals to occur as indicated in the Agreement.
•Expenses associated with onsite services are invoiced as incurred.

Tyler's quote contains estimates of the amount of services needed, based on our preliminary understanding of the scope, level of engagement, and timeline as defined in the Statement of Work (SOW) for your project. The actual amount of services required may vary, based on these factors.

Tyler's pricing is based on the scope of proposed products and services contracted from Tyler. Should portions of the scope of products or services be altered by the Client, Tyler reserves the right to adjust prices for the remaining scope accordingly.

Unless otherwise noted, prices submitted in the quote do not include travel expenses incurred in accordance with Tyler's then-current Business Travel Policy.

Tyler's prices do not include applicable local, city or federal sales, use excise, personal property or other similar taxes or duties, which you are responsible for determining and remitting. Installations are completed remotely but can be done onsite upon request at an additional cost.

In the event Client cancels services less than four (4) weeks in advance, Client is liable to Tyler for (i) all non-refundable expenses incurred by Tyler on Client's behalf; and (ii) daily fees associated with the cancelled services if Tyler is unable to re-assign its personnel.

The Implementation Hours included in this quote assume a work split effort of 30% Client and 70% Tyler.

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2026-625071-G3S3V5 CONFIDENTIAL Page 4 Implementation Hours are scheduled and delivered in four (4) or eight (8) hour increments.

Tyler provides onsite training for a maximum of 12 people per class. In the event that more than 12 users wish to participate in a training class or more than one occurrence of a class is needed, Tyler will either provide additional days at then-current rates for training or Tyler will utilize a Train-the-Trainer approach whereby the client designated attendees of the initial training can thereafter train the remaining users.

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Priority Based Budgeting for the City of National City
Tyler Technologies · Priority Based Budgeting · August 2026
1 T Y L E R T E C H N O L O G I E S
Priority Based Budgeting
for the City of National City, California

What the City is buying, how the work gets done,
and what it asks of your team
Prepared for the City Council and the City Manager's Office Tyler Technologies · Priority Based Budgeting
Engagement lead: Chris Fabian, Senior Director, Product Strategy August 2026

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Priority Based Budgeting for the City of National City
Tyler Technologies · Priority Based Budgeting · August 2026
2 E X E C U T I V E B R I E F · O N E P A G E
Priority Based Budgeting for National City
What the City would be buying, what it returns, and when.

WH E R E T H E C I T Y S T A N D S
$12.7M This year's General Fund gap
~$800K Unassigned reserve projected at June 30, 2027, per the City's own projection 2030 The year the City Manager has identified as the onset of insolvency risk — No new recurring revenue source was adopted in August

WH A T T H I S I S
A method for seeing every service the City provides with its true cost, who relies on it, whether the law requires it, how well it advances the priorities this Council has set, and what other governments have done in order to preserve vital services with less dependence on scarce general government resources. The City then chooses from a menu of documented options. Nothing is cut by approving this. The work asks City staff for roughly 800 hours across a full year — about four tenths of one position for the entire organization, not per department.

F O UR M O V E S T H E C I T Y H A S A L R E A D Y M A D E The move The service On the record
Fund it from a rate
base
Street sweeping Both operator positions sit entirely in the Refuse Enterprise Fund; sweeper split 71% Sewer / 29% Refuse
Share it with a
neighbor
Animal sheltering Chula Vista has run it since 1987 — $41,638/month, capped at ±5% a year Charge the beneficiary Police and fire on Port
tidelands
Port District compensates the City under an agreement that ties the rate to documented cost
Find a grant Right-of-way cleanup $600,000 from Caltrans against a $175,000 City match — Resolution 2026-33

WH A T T H E C I T Y S H O UL D E X P E C T B A C K ~10% of budget analyzed What governments running this method routinely identify. On National City's $133.6M costed base, about $13M.
$13.6M identified in the draft Against a $12.7M gap, from published documents alone. Identified opportunity, not realized dollars.

Collier County, for scale ~$150M identified · ~$50M realized, with the property tax rate rolled back two years running · ~$80M committed for future implementation.

Reported four ways Identified, approved, implemented, and still recurring a year later — to Council, every quarter.

WH A T A R R I V E S WH E N — I N I T I A L L Y P R O P O S E D Weeks 3–4 First draft of the program inventory, costs and scores — re-run on City data Month 3 Full analysis quantified — insights, overlap, benchmarking, measures Months 4–6 Council commitments, landing in the FY2028 budget being built January–March June 2027 FY2028 budget adopted, carrying the Council's choices

W H A T W E A R E N O T C L A I M I N G
Figures here are a first draft from published documents and are re-run on the City's own financial, position and timesheet data at the start of the engagement. Identified opportunity is also not realized dollars — the work between them takes years. Where a recommendation involves resident fees, the Council sets the level and the design.

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3 P U R P O S E O F T H I S D O C U M E N T
Introduction
The City Council has asked for a fuller account of what a Priority Based Budgeting engagement would provide. This document is Tyler Technologies' response.

One point is worth establishing at the outset. The financial tools available to every city — funds, departments, accounts and object codes — exist to demonstrate that public money was spent as authorized, and they perform that function well. They were not designed to answer what a city does, what each service costs, who depends on it, or what would change if it were delivered differently. That is a limitation of the accounting model itself, and it applies equally to every city in the country.

Priority Based Budgeting closes that gap. It requires no new services and no new invention. The City's services already exist and its staff already understand them. What has been unavailable is a way to see all of them at once, described consistently, so that the options within the City's own budget become visible.

This document is written in plain language by design. Where any section is unclear or reads as promotional rather than factual, Tyler would welcome that feedback.

S um ma r y
National City faces a General Fund gap of approximately $12.7 million, with reserves projected near $800,000 by June 2027 and the City Manager having identified insolvency risk by 2030.

Service reductions and revenue increases are the two options ordinarily presented. A third set of options exists, consisting of actions the City can take on its own authority: funding services from other sources, sharing them with neighboring jurisdictions, charging the parties that benefit, capturing grant funding, or redesigning delivery.

National City has already implemented four such measures, each documented in a signed agreement or an adopted resolution. What the City has not had is a means of applying the same analysis to every other service it provides.

That is the function of this engagement. Within ninety days the City would have a complete inventory of its programs, their true costs, the populations that rely on them, and a menu of documented options.

The Council determines which options are pursued.

Tyler welcomes questions on any matter this document leaves unresolved.

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4 What is in this document
Section What it covers

1. The problem, and the third
path
Why a shortfall is usually an options problem before it is a money problem

2. What the preliminary
analysis found
The first-pass analysis of the published budget, what it found, and the limits

3. What return to expect The ten percent benchmark, the Collier arc, and how the Council will see it

4. What PBB solves Nine recurring resource problems that turn out to be one problem

5. Why this is empowering for
staff
Departments correct a draft rather than author data, and keep the services they run

6. Every program has more
than one future
What an insight is, and why it is the point of the work

7. What you receive The complete menu of deliverables

8. How the work gets done The four phases, and exactly what we need from your team

9. What we ask of your staff Hours by role, honestly estimated

10. Year one, and years two
and three
From a first budget to a permanent capability

11. Use of artificial intelligence What the machine does, what it never does, and how you check it

12. Gathering community
priorities
Options for public input into the scoring framework

13. Why it will work, why now,
why us
The case, summarized

14. Engagement leadership and
further reading
Background, credentials and published work

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5 1. The problem, and the third path
Every government facing a shortfall is handed the same two options. Cut services, or raise revenue. In August one option for raising revenue was set aside, which leaves the first — and the first is the one that changes what National City is able to be.

That binary comes from the way the budget is written down. When the only available view is a list of accounts, the only available moves are less of it or more revenue to pay for it. When a city can see salaries, supplies, contracts and equipment, the only available moves are less of it, or more revenue to pay for it. The choice looks like arithmetic, but it comes from a limited view of the budget.

I N P R A C T I C E · W A S H I N G T O N C O U N T Y , W I S C O N S I N Facing a deficit, the county’s parks department was a candidate for elimination. It ran entirely on the property tax levy.

Instead of cutting it, the county rebuilt how it was funded: entrance and boat-launch fees, cabin and glamping rentals, renovated barns rented for weddings, sponsorships and naming rights, memberships, adopt-a-trail. Parks became self-sustaining, and the levy dollars it had consumed went to public safety and health.

The county later established an endowment making parks, trails and golf independent of the levy permanently.

Government Finance Research Center, University of Illinois Chicago

Where the City stands
Amount Source
This year's General Fund gap $12.7M City staff, reported August 2026 Unassigned reserve projected at June 30, 2027 ~$800K City Manager's projection Onset of insolvency risk, as identified by the
City Manager
2030 City Manager's public statements
Two of those figures warrant context. A reserve of that size relative to an $89 million General Fund provides limited absorption capacity for an unbudgeted event. And the FY2027 gap is larger than the FY2026 gap, which points to a structural imbalance rather than a single difficult year.

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6 The third path

The range of options between reducing a service and asking voters for revenue — each one an action the City can take on its own authority.

Between eliminating a service and asking voters for money sits a wide range of moves a city can make on its own. Share it with a neighbor. Charge the people who use it. Fund it from a utility or a restricted source that already exists. Find a grant. Bring in a partner. Take steps out of a process. Consolidate duplicated work. Reprice it. Automate part of it.

None of those requires a ballot measure. None of them eliminates a service. Every one of them is something National City controls.

Th e poin t t ha t ma t te rs m ost
National City has already made four of these moves. Each is documented in a signed agreement or an adopted resolution, and each one is still working today.

What the City has not had is a way to run that same search across every other service it provides, systematically and all at once, instead of one pressure at a time.

Four moves already made
The move The service What it does Source
Fund it from a
rate base
Street sweeping Both Street Sweeper Operator positions are budgeted entirely in the Refuse Enterprise
Fund, which runs on trash rates. The
replacement sweeper is split 71% Sewer / 29%
Refuse because sweeping keeps storm drains
clear.

FY2026 Adopted
Budget, Authorized
Positions by Fund;
FY2026 CIP
Presentation
Share it with a
neighbor
Animal
sheltering
National City has not run its own shelter since
1987. Chula Vista operates it at $41,638 per
month, reduced by redemption fees collected,
Chula Vista
Agreement No. 2024-

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7 The move The service What it does Source
with future pricing capped at ±5% a year
against a three-year rolling intake average.
2501, effective July 1,
2024
Charge the
beneficiary
Police and fire on
Port tidelands
The San Diego Unified Port District
compensates the City — $1,310,324 per year
under the current baseline — for protecting
tidelands that generate no property tax, sales
tax or transient occupancy tax. The agreement
ties the rate to the actual documented cost of
providing the services, and provides for
baseline resets during its term.

Port District
agreement, July 1,
2021 through June
30, 2030
Find a grant Right-of-way
cleanup
$600,000 in Clean California funding against a
$175,000 City match, for litter abatement and
beautification on locally owned right-of-way,
with workforce pathways for people facing
barriers to employment.

Resolution 2026-33,
adopted April 14,
2026
The Port agreement deserves particular attention, for a reason that has less to do with the amount than with the mechanism. The Council has consistently held that National City is not compensated on terms comparable to the other member cities of the Port District. Port property here is working waterfront, and unlike the commercial and entertainment development on Port land in San Diego, Chula Vista, Coronado and Imperial Beach, it produces no sales tax and no transient occupancy tax for the City.

What makes that grievance actionable is the structure of the agreement itself: the rate follows the actual documented cost of providing the services. A city that can document its costs at the program level, service by service and position by position, argues from a materially stronger position at a baseline reset than one working from department totals. Producing exactly that documentation is a direct output of this work.

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8 2. Findings from the preliminary analysis
Prior to this proposal, Tyler conducted a first-draft analysis of National City using only the City's published budget documents. No internal data was accessed, no staff time was required, and no cost was incurred by the City. The purpose was to allow the Council to evaluate the method against its own figures before committing to it.

Everything in this section is a draft. At the start of the engagement all of it is re-run against the City's own financial system, position control, payroll and timesheet data. The program list, the cost allocations, the revenue attribution and every estimate will change, and the re-run version will be considerably more precise than what follows.

What the preliminary analysis produced
What we produced Detail
Program inventory
(draft)
A first-draft list of 178 programs across the City's service departments, generated from the FY2027 Proposed Budget Book, which prints FY2026 Adopted alongside it and so carries every adopted account line by fund, division and account title. The count will change once your departments review it and once the analysis is re-run on your own systems.

Positions 381.00 authorized positions across the 16 departments the City's own schedule lists, with City Treasurer (1.00 FTE) folded into Finance for costing purposes. Titles only — no employee names appear anywhere in the work.

Costs and revenue
(draft)
860 costed lines and 99 revenue lines. Costed services total $133.6M; adding debt service, transfers out and capital brings the total back to the City's own $156.9M FY2026 all-funds figure, within $3.83. Allocations are modeled from published figures and will be replaced by actual payroll and general ledger detail.

Analytics (draft) Peer benchmarking, process overlap detection, and program insights with documented case evidence — all generated from the draft data and re-run once real data is loaded.

What it suggests, and how much weight to put on it
The first-draft analysis points to roughly $13.6 million of identified opportunity against a $12.7 million gap. We want to be careful about how that number is presented, because being careful about it is the whole basis on which you should trust the rest of this.

L im ita t ions of t he p re lim inar y a na lys is
It is a first draft built from public documents. Its purpose is to show the Council how the method works and that it finds real options here. Treat the figure as an order of magnitude.

Individual estimates will change once the City's actual accounting records are applied, and not all will increase. Where the modeled figure and the City's own 2025 Comprehensive User Fee Study diverge, the fee study is the authoritative source and has been treated as such.

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9 Identified opportunity is not the same as money in the budget. Section 3 sets out what the record shows about how much of it typically gets realized, and over what period.

Tyler's practice is to present figures that can be substantiated rather than figures that are larger. Any number in this engagement that cannot be traced to a source document should be raised with the project team.

F R O M N A T I O N A L C I T Y ’ S D R A F T DA T A The draft analysis identified the same underlying process running independently in different parts of the organization. Records management appears as a distinct process inside 58 programs across 24 departments — not only the City Clerk, but Police, Finance, Facilities, Fleet, the City Attorney, Parking Enforcement, Sewer, Fire, the Library and more. Inspection work shows the same pattern: 47 programs across 19 departments, from Parks and Facilities to Fire, Engineering, Housing and Risk Management.

This is not duplicated staff or duplicated departments. It is the same kind of work, organized separately, by people with no particular reason to know the others are doing it. Some of it should stay separate.

Some of it is a shared system, a common retention schedule, or one inspection visit instead of three.

No organizational chart shows this, because a chart describes reporting rather than work. No general ledger contains it, because a ledger records purchases. It becomes visible only when every program is described in a common structure.

Preliminary process overlap analysis, National City FY2026 published budget What the analysis showed about depth
The draft bears on the size of the opportunity in a second way, and this one matters more than any single dollar estimate does.

Where the City has already acted on a program — street sweeping, animal sheltering, tideland protection, right-of-way cleanup — the option set for that same program holds further documented options beyond the one the City pursued. That is the shape of the whole portfolio: the analysis returned several documented options for every program, not one.

That a program carries more options than the one pursued is the expected result, and it is not a criticism of anyone. Each of those decisions was made on a single service, under time pressure, in response to a specific problem — a shelter to operate, a shoreline to patrol, a sweeper to fund. No process in any city produces a priced list of every alternative at the moment the decision has to be made. The options that remain open are not oversights. They are the ones nothing has yet asked about.

F R O M N A T I O N A L C I T Y ’ S D R A F T D A T A The scale of the opportunity is not one option per program. It is the rest of the option set for programs the City is already managing well.

Across the draft, the 178 programs returned between four and ten documented options each, naming more than a thousand distinct implementing governments in total. The City acted first on what was

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10 visible when the decision arose, which is what any city does. The remainder of the set is still on the table.

These are Tyler’s own modeled figures and they will change when the City’s records load. The pattern is the point, not the amounts.

Preliminary insights analysis, National City FY2026 published budget A note on cost recovery, and who pays
Cost recovery is one lever among several. It is worth being clear about who bears the cost when it is applied, since the assumption that it falls on residents is not borne out by the record.

National City's own examples make the point. The Port District pays for tideland protection. Two school districts pay for resource officers. Trash ratepayers carry street sweeping. Caltrans is funding right-of- way cleanup. Developers and contractors pay for plan review and inspection. In each case the cost sits with the party that benefits from or generates the need for the service, and the General Fund is relieved without a resident paying more.

Where a recommendation involves resident fees, the Council sets both the level and the design. Sliding scales, income-based rates, resident and non-resident pricing, and hardship waivers are standard practice and are in use by several of the governments cited in this document. These are policy decisions reserved to the Council.

Wha t t he a na lysis ac t ua lly gives you he re
A complete picture of who currently pays for what. The City has made many of these decisions already — every fee schedule, every rate action, the 2025 fee study. What has not been possible is to see them all together and compare across the portfolio.

For every program: what it costs, what it currently recovers, who benefits from it, and what comparable governments have done. The Council then decides which options to use and which to leave alone.

Cost recovery is also only one of several levers. Sharing a service with a neighbor, capturing a grant, moving eligible work to a restricted fund, consolidating duplicated processes and renegotiating contracts all reduce General Fund pressure without any fee changing.

What changes with your own data
What you provide What it fixes
Payroll and position control The one modeled step disappears. Real loaded cost by position and cost center, including staff who split time across services.

General ledger and revenue
detail
Parsed budget lines are replaced by authoritative amounts, with grant funds, encumbrances and fee revenue attached to the service that earns them.

Program crosswalk for
public safety
Police and Fire appear as a single Operations line in the published budget documents. The City's internal records separate patrol, investigations, dispatch,

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11 What you provide What it fixes
suppression and prevention, which together represent the largest share of General Fund spending.

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12 3. What return the City should expect
The Council is being asked to authorize an investment, and is entitled to an account of the expected return and its timing. The following reflects what the documented record supports.

The benchmark: about ten percent of the budget analyzed Across hundreds of implementations, governments running this method routinely identify optimization and revenue opportunities equal to roughly ten percent of the budget put through the analysis. That figure has held across cities, counties and school districts, and across organizations of very different size.

For National City, the draft analysis put $133.6 million of costed services through the process. Ten percent of that is roughly $13 million, and the draft identified approximately $13.6 million.

Those two figures should not be read as confirming one another. The ten percent benchmark and the models that produced the draft estimates both derive from the same twenty years of completed engagements. That is one source of evidence expressed two ways, and presenting it as independent agreement would overstate what it shows.

What the draft does establish on its own is different and more useful: that documented options exist here in quantity, attached to real National City programs, each naming a government that has already implemented it. Set against a General Fund gap of $12.7 million, the identified opportunity is of the same order as the deficit — a useful sense of scale and nothing more. Identified opportunity does not close a deficit on its own, and the following subsection explains the distinction.

Identification is the beginning, not the end
Identified opportunity and realized dollars are different measures. The interval between them is where the implementation work occurs, and the Council should understand that interval before authorizing the engagement.

Collier County, Florida is the clearest illustration because the engagement has run long enough to show the full arc.

Stage Collier County What it means
Identified ~$150M Opportunities surfaced by the analysis across the full program portfolio.

Realized to date ~$50M Actioned and reflected in the budget. Property tax rate rolled back two years running, with no service cuts.

Committed for future
implementation
~$80M Departments and leadership have agreed to pursue these; they are scheduled but not yet banked.

Not pursued the remainder Reviewed and set aside — infeasible locally, or the department made a persuasive case against.

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13 Roughly a third of what Collier identified has been realized, and roughly another half is committed. That is a strong result, and the shape of it is worth seeing: identify broadly, commit selectively, implement deliberately.

Exp ec te d ou tc ome for N at iona l C it y
The draft analysis identified opportunity of the same order as the projected deficit. That figure represents a starting position for review, and is not a projection of realized savings.

From there the work is collaborative and sequential: your staff and ours review each opportunity for feasibility, the ones that survive become commitments, commitments become budget actions, and budget actions become recurring dollars.

Some opportunities will not survive that review, and they should not. When a department makes a persuasive case against an option, the analysis gets better.

I N P R A C T I C E · C O L L I E R C O U N T Y , F L O R I D A — T H E C O M P L E T E A R C Collier operates a $2.2 billion budget and had raised property taxes for thirteen consecutive years. Using a 90-day, four-phase process, the county built an inventory of 500 to 600 programs, allocated costs to them, scored them against priorities, and benchmarked them.

The analysis surfaced roughly $150 million in potential savings and revenue. Approximately $40 million was implemented in the first pass, and by early 2026 staff reported about $37.3 million in savings, grants and revenue changes already in place — including a workforce prioritization pool that reduced salary cost by about $2.6 million, $10.5 million in septic-to-sewer grants received with a further $28.9 million in pursuit, and updated user fees.

Property taxes were then held unchanged for two straight years, ending the thirteen-year run of increases. No essential services were eliminated.

ICMA PM Magazine; Naples Daily News; Collier County Board briefings I N P R A C T I C E · J O H N S O N C O U N T Y , K A N S A S The most populous county in Kansas adopted a $1.79 billion budget including its sixth mill levy reduction in seven years, while maintaining the lowest county tax rate among Kansas’s 105 counties.

The county manager’s stated principle is the one this method is built to support: fund ongoing operating expense with ongoing revenue, and direct resources toward the programs that align with board priorities and community survey feedback.

Johnson County Board of County Commissioners
I N P R A CT I C E · K A N S A S C I T Y , M I S S O U R I Kansas City scored all 212 of its programs against community priorities and used the results to work a projected shortfall of roughly $100 million down to $54 million within a single budget cycle.

The relevance to National City is the sequence rather than the size: the city did not begin by deciding what to cut. It began by establishing what every program cost and how well each advanced what the community had said mattered.

How the Council will see the return

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14 Every opportunity is tracked through four states and reported to Council quarterly.

Stage What it means for the Council
Identified The analysis found an option, with an estimate and a government that has done it.

Approved Leadership and the department have agreed to pursue it.

Implemented It is in the budget, the fee schedule, the agreement or the operating practice.

Recurring It is still producing a year later — the only stage that closes a structural gap.

We report all four numbers, not just the first. Reporting identified opportunity alone would omit the measures that determine whether a structural gap actually closes.

A note on timing
Very little cash lands in the first fiscal year. New and increased fees require nexus work and a public process that runs roughly twelve months, and partnership or shared-service agreements take time to negotiate. The items that can move quickly are the ones needing no fee action — shifting eligible work to a restricted funding source that already exists, correcting how internal costs are allocated, and renegotiating contracts.

What the first year produces is the menu and the commitments, and the commitments go into the budget the Council adopts in June. The dollars follow in the year after that.

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15 4. What Priority Based Budgeting solves
Cities normally treat the following as separate projects. Each gets its own study, its own consultant, and often its own line in the budget that pays for the study. Structurally they are the same question asked of the same information.

The problem The question underneath it
A budget shortfall Which services can change with the least loss of what the community values? A grant ends or a state cost
shifts
Which services depend on that money, what do they produce, and what replaces the funding?
A fee or rate study Which services have unrealized cost recovery given who actually benefits from them?
A shared-service or
consolidation review
Which services are duplicated across departments, or across neighboring jurisdictions?
A service-level debate What does each level of service actually cost, and who relies on the difference?
A workforce or vacancy plan Where is the staffing, measured against which priorities, and where does attrition create opportunity instead of exposure?
A capital decision Which services does this asset support, and what operating cost does it commit the City to for the next thirty years?
A resilience or continuity
review
Which services are exposed to which shocks, and which ones must survive? An equity review Which populations receive which services, at what investment per resident? Every one of those requires knowing what the City does, what each thing costs, who relies on it, whether the law requires it, what it achieves, and what alternatives exist. That is one schema, asked nine different ways.

Wh y t ha t ma t ters m ore t ha n it s ou nds
The reason cities answer these questions rarely, slowly, and usually under pressure is that each one carries a large fixed cost — and nearly all of that cost is assembling the data, not analyzing it.

Build the structure once and the cost of the next question drops to almost nothing. That changes which questions get asked, not just how fast they get answered. A question that would need a $150,000 study gets asked only in a crisis. A question that costs an afternoon gets asked early, and about small things, which is when problems are still cheap to fix.

I N P R A C T I C E · A L E X A N D R I A , V I R G I N I A One budget cycle produced $4.1 million in efficiencies and cost reductions alongside $1.6 million in increased cost recovery and collections.

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16 What the city did with it matters as much as the total: $3.3 million funded new and expanded services.

The exercise was not only about closing a gap, it was about creating room to do more of what the community wanted.

City of Alexandria adopted budget documents
Why the other instruments cannot reach it
The nine questions above are ordinarily answered with different tools: a fee and rate study, an efficiency audit, a shared-service review, a reorganization, a hiring freeze. Each is well suited to the question it was commissioned to answer, and National City’s 2025 Comprehensive User Fee Study is an example of one done properly.

What none of them starts with is a cost for every program. They work from department totals, from a single service, or from a sample, because that is the data available to them — and so each returns one answer for one service, or one lever applied uniformly across an organization regardless of what any particular service is worth or who relies on it. A city can complete several of them and still not hold a list of its options. Each was answering the question it was asked.

You cannot find an option for a program you cannot see. Program-level cost is the precondition rather than the deliverable, and it is the only thing that turns nine separate studies into one dataset capable of answering all of them. It is what this engagement builds first, and it is the reason the result is a menu covering all 178 services rather than a recommendation covering one.

A note on what this does not do
This work does not decide what the community should value. That is properly the Council's job, and the framework deliberately takes its priority weightings from your adopted strategic direction rather than supplying them.

Some categories of cost sit outside program design. Pension obligations, contractually negotiated salary increases and litigation exposure are governed by actuarial requirements, bargaining agreements and legal process rather than by how a service is delivered or funded. No budgeting method reaches those directly.

What this work does reach is the operating side of the budget — how each service is delivered, what it costs, what it recovers, and who else might carry part of it. That is where the discretionary opportunity sits, it is the part the Council can act on directly, and strengthening it is what creates the capacity to carry the costs that cannot be redesigned.

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17 5. Why this is empowering for your staff
Across the sector, budget reduction exercises tend to follow a familiar pattern. A percentage target is announced, departments are asked to justify existing funding, and the people who understand the work best spend weeks assembling a defense of it. The information that comes back is rarely the organization's best thinking, because the structure gives a department no reason to surface an efficiency it has found.

This works differently, in four specific ways.

1. Departments correct a draft. They do not author data.

The software produces a first draft of each department's program list, cost allocation and scores from the City's own records. Department staff review that draft in short working sessions and correct it — split a program, merge two, rename one, fix an allocation. That is a much smaller task than building a program budget from blank templates on top of the day job.

It also produces better data. Nobody feels obliged to defend a draft they did not write, so the conversation moves quickly to what is wrong with it.

2. The question is how to keep the service, not whether to cut it When a program comes up for discussion, the first question is whether there is another way to deliver or fund it. Of the sixteen positions in the framework, only two point toward doing less. The other fourteen point toward funding it another way, sharing it, resizing it, protecting it, or growing it.

Four attributes of a program produce sixteen positions. Only positions 1 and 5 point toward providing less of a service.

Department directors generally recognize that the framework more often protects a service than reduces it, and that departments bringing forward workable options tend to retain their programs.

3. It separates the mandate from the service level
Directors are often asked to prove that a service is required. The more useful question is what specifically is required, and at what level. A mandate to provide inspections is not a mandate to provide

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18 them within 48 hours. Making that distinction explicit protects the genuinely required work and opens honest conversation about the rest — and it is a distinction most departments have never been given a structured way to make.

4. The comparison is external, not internal
Comparing a program's cost against real peer governments rather than against other departments in the same organization changes the nature of the conversation. A department that comes in below its peers has just been handed evidence for its current funding. A department that comes in above has a question worth investigating.

Wha t de p ar t me nt d irec t ors re p or t af te rwa r d The most frequent comment concerns clarity rather than savings: that it is the first time the department has been able to describe on one page exactly what it does, what each service costs, and who depends on it.

Directors in several jurisdictions have continued using the inventory to onboard staff, brief incoming elected officials and support budget requests long after the engagement concluded.

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19 6. The heart of it: every program has more than one future Everything described in the next section — the inventory, the costing, the scoring, the benchmarks — exists to make one thing possible. It is worth setting out on its own, because it is the part that produces the return.

Take a service everyone understands. Most governments pay for street sweeping out of the general fund and treat that as simply how it is done. But the current version of any program is only one version, and its funding model is only one model.

A PBB Insight is a specific, evidence-backed way to sustain a program when its traditional funding comes under pressure. Not a theory about what might work — a documented account of what another government actually did with this same service, and what it was worth.

I N P R A C T I C E · S I X C I T I E S , O N E S E R V I C E Street sweeping is a useful illustration because most governments assume it must be paid for from the general fund. Six were asked the question directly.

Fridley, Minnesota kept a core crew and hired contractors only at peak, saving roughly $225,000. San Diego enforced no-parking rules so fewer passes were needed, cutting cost 28 to 33 percent. Mankato extended truck replacement cycles and improved routing for 10 to 15 percent. Bloomington charged commercial owners for additional sweeping, generating about $850,000. Sacramento sold route sponsorships. Portland moved the service to the water utility, because sweeping keeps storm drains clear.

Same service. Six different answers. Not one of them a service reduction or a tax increase.

Three cut cost. Two generated revenue. One moved the service off the general fund entirely. Every one of them came from the range of options between reducing a service and asking voters for money — the moves a city can make on its own authority.

One program can carry a surprising amount
The natural objection is that street sweeping is a small service and these are small numbers. The more useful question is how much a single program can produce when it is examined properly.

I N P R A C T I C E · A L A R G E C A L I F O R N I A C O U N T Y — O N E P R O G R A M Applied to a single beach management and maintenance program, the method surfaced more than $1.2 million in combined savings and revenue.

It came from four separate directions: roughly $470,000 in staffing optimization, about $250,000 from a modeled parking-fee adjustment, plus event programming and regional consolidation with neighboring jurisdictions.

One program. Four levers. National City has 178 programs.

The same question, on National City’s own programs

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20 The examples above are other governments. The same question applies to National City’s own program set.

F R O M N A T I O N A L C I T Y ’ S D R A F T D A T A PAYROLL SERVICES. The analysis returned six documented options for the payroll function. One of them is already in place: electronic timesheet approval, through Munis modules awarded in October 2022.

That is a real improvement and it was the right first move. Tyler notes that Munis is a Tyler product, and the Council should weigh that in reading what follows.

The largest of the five that remain is Roseville, California’s move to full automated timekeeping — a modeled $267,000 to $305,000 a year, and a capability sitting inside a system National City has already bought and already pays for.

That open option is larger than the one already captured, which is worth noting: what remains on the table is not confined to the small and the easily found.

The City made a sound decision and captured part of the available value. The rest of it is still there, in a system already in place. Nothing in that sentence requires a service reduction, a fee change or a ballot measure.

Preliminary insights analysis, National City program option set, August 2026 The natural response is that payroll is a small service. That is the point. The City has 178 programs, and the analysis returned between four and ten documented options for every one of them, naming more than a thousand distinct implementing governments across the set.

That is the arithmetic the Council should hold onto. The portfolio-level figure in Section 3 is not a single large idea. It is the accumulation of program-by-program findings, most of them modest, a few of them substantial, and each of them traceable to a government that has already done it.

Why this cannot be done without the data
There is a catch worth pressing on, and it is the reason this approach was out of reach for most governments until recently.

You cannot find an insight on a program you cannot see. Insights require every dollar and every position mapped to a named program, costed honestly, and comparable to peers. Building that data historically took a consulting team three to six months. That cost, rather than the method itself, is what kept this work confined to well-resourced governments.

Section 11 describes how that constraint was removed. The relevant point here is the order of operations: the data is not the deliverable, it is the precondition for the deliverable.

F R O M N A T I O N A L C I T Y ’ S D R A F T D A T A The draft analysis returned six documented options for National City’s street sweeping program alone — generated from published budget documents, without access to the City’s accounting system.

Across the full portfolio it produced program-by-program findings for services in every department.

Each one arrives with a dollar range and the name of a government that has already implemented it.

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21 Preliminary insights analysis, National City FY2026 published budget

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22 7. What you receive
The following is the complete list of deliverables. Everything here is produced from National City's own records, delivered in the application and exportable to Excel and Word, and owned by the City.

7.1 Foundational program data
Program inventory
A structured catalog of every service the City provides, external to the community or internal to support operations, each with a plain-language description, organized by department and division. Generated as a predicted draft from your general ledger and reference data, then reviewed and refined by your departments.

Deliverable: validated program inventory by department and division, in the application and as an export.

Program cost and revenue allocation
Personnel costs, non-personnel operating costs, and program revenues — fees, grants, reimbursements — allocated to each program. Departments review the predicted allocations in a web-based allocator and refine them, producing an accurate price tag and a cost-recovery profile for every service.

Deliverable: complete program cost and revenue dataset, updated annually.

Program scoring and impact mapping
Every program scored against basic attributes — mandate, reliance on the City, cost recovery, demand, population served, and equity or sustainability considerations where the Council wants them — and against the results the community and Council have identified as priorities.

Deliverable: a finalized scoring framework and a scored program dataset that shows how each service aligns with your stated priorities.

Performance metrics framework
Three to five meaningful, trackable measures per program, tied to the priorities they serve. Where a measure cannot currently be sourced, it is recorded as a baseline to establish in the first year.

Deliverable: performance metric framework with example metrics tied to specific programs.

7.2 Program Insights — the resource optimization report For each program, specific opportunities for cost savings, new or enhanced revenue, partnerships, in- sourcing or outsourcing, and service redesign. Each insight is matched to documented practice in a comparable government, with implementation steps and a verification tier that tells you how well evidenced it is.

This is the deliverable that answers the Council's central question: what are our options, and who else has done this?

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23 Deliverable: an ROI and Program Insights report with program-by-program recommendations, quantified savings or revenue potential where it can be supported, and case examples adapted to National City's context.

7.3 Program benchmarking
Your program costs compared against real peer governments — not estimates, but actual costs from a reference set built over twenty years of completed engagements. Each program is classified as high, typical or low cost, with normalized comparisons such as cost per capita.

A low-cost classification gives a department under pressure documented evidence that its current investment is reasonable, which is often the more useful result.

Deliverable: benchmarking report with supporting exports, summarizing cost position and flagging programs for deeper review.

7.4 Process overlap and efficiency analysis
Program descriptions are analyzed to extract the underlying processes — intake, inspection, permitting, records management, customer service, reporting — and to detect where the same process is being performed independently in different parts of the organization.

This is consistently one of the most productive findings, because it is invisible to every other view of a city. No organizational chart shows it, and no ledger contains it. It only appears once every program is described in a common structure.

Deliverable: process overlap and efficiency report identifying consolidation and redesign opportunities, with suggested measures and implementation priorities.

7.5 Target Budget Calculator
A tool that turns priorities into concrete budget guidance. Apply different percentage changes by priority quartile rather than across the board. Model scenarios across the General Fund, enterprise funds and special revenue funds at once. Protect revenue-generating capacity so the City does not cut a program that pays for itself.

Deliverable: modeled target scenarios and exported target tables by department and fund, usable as formal budget guidance.

7.6 PBB Strategist — the on-call analyst
An assistant that lets your staff and leadership ask questions of the City's own PBB data in plain language, and generate briefing material on demand. It draws on two sources at once: the complete PBB methodology built from 300-plus implementations, and National City's own validated program data.

Practical examples: what are our largest savings opportunities in Public Works; how do our recreation programs compare to peers on cost per capita; which programs depend on this grant; prepare a summary of our lowest-quartile programs for a council session.

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24 Deliverable: deployed assistant with access controls set by the City, plus training for executive, finance and department users.

7.7 Reporting, dashboards and budget presentation
Program-level analytics dashboards for leadership and Council, and program budget templates that tie department funding requests directly to the priorities the Council has set — in a format staff, residents and elected officials can all read.

Deliverable: configured dashboards, presentation-ready materials, and budget request assessment wired to your department request cycle so submissions arrive already scored.

A n ote on own ers h ip
The program inventory, the cost data, the scores, the insights and the benchmarks are National City's.

They export, and they persist if the engagement ends.

This is stated explicitly because a durable capability is the objective of the engagement. An inventory your staff keep current stays useful every year. One that is built once and set aside becomes a document in a drawer.

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25 8. How the work gets done
Tyler would initially propose running the engagement in four phases. The pattern in every phase is the same: the software produces a draft from your records, your staff review and correct it in short working sessions, and the corrected version becomes the record. The sequence and pacing get set with your team during setup.

Phase 0 — Setup
Contract execution, an intake form covering organizational context and your fiscal calendar, user provisioning and your IT security review. Start the security review early; in most cities it is the longest single item in this phase and it can run in parallel with everything else.

Phase 1 — Foundation: the program inventory, costs and scores This is the heaviest phase for your staff, and it is front-loaded on purpose so the rest gets easier.

Step What happens Who is involved
Kickoff One meeting per department. Staff learn the review-and- correct workflow.

Directors, budget liaisons
Data extract A single central pull: general ledger, position control export, organization chart, strategic plan. Templates are not
distributed to departments.

Finance, HR, IT
Structure
confirmation
A thirty-minute conversation per department to confirm
division tiers and cost-center attribution. The cheapest moment to fix organizational structure.

Directors, budget liaisons
Priorities Review and approve the priority framework, anchored to the City's adopted strategic direction.

City Manager's Office,
Council
Inventory
review
The main working session per department: split, merge,
rename, add. Target range is roughly 10 to 25 programs per department.

Directors, budget liaisons
Cost review Drill into how positions and dollars landed on programs and correct what is wrong. If one position splits more than three ways, the programs are drawn too finely and we redraw them.

Budget liaisons, Finance
Mandate
evidence
Assemble the citation for each mandated program, separating whether the mandate exists from whether a particular service level is mandated.

Directors, City Attorney
Scoring and
calibration
Score programs, then calibrate across departments in a joint panel. Calibration is what makes scores comparable. Without it each department scores against its own internal standard rather than a shared one, and the results cannot be compared across the organization.

Directors, City Manager's
Office

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26 Step What happens Who is involved
I N P R A C T I C E · C O L L I E R C O U N T Y , F L O R I D A Collier catalogued and validated 500 to 600 programs in a matter of weeks, working in 60 to 90 minute review sessions with departments rather than through extended data-collection assignments.

The county is roughly five times National City’s scale. The pace is achievable because departments correct a generated draft rather than build program data from blank templates.

Phase 2 — Analytics: benchmarking, overlap, insights and measures The analysis runs without staff effort. What departments do in this phase is respond to what it flags — confirm or challenge a peer cost outlier, validate whether an insight is feasible here, and design the three to five measures that matter for each program.

The most productive single conversation in most engagements is a department explaining why its cost differs from peers. Sometimes the explanation is a real difference in service level or geography.

Sometimes it is the beginning of a savings opportunity. Either answer is worth having.

Phase 3 — Applied: turning data into a budget decision
Target scenarios are co-designed with your finance leadership, in the order that matters: free up and reallocate first, generate revenue second, and only then consider taxes and rates. Executive briefings are prepared for the City Manager and the Council. The department request process is wired so that next year's submissions arrive already scored against priorities.

Phase 4 — Adoption: making it survive
Training for executive, finance and department users. Deployment of the Strategist assistant with your data governance sign-off. Documentation and playbook handoff. And year-two planning, which matters more than it sounds — in year two your staff verify what changed rather than rebuild from scratch, and the effort drops sharply.

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27 9. Staff commitment required
Client organizations frequently report that this is the information they most wanted before signing. The figures below are actual estimates rather than general assurances.

The estimates below are drawn from Tyler's standard implementation model for a local government of National City's size, sized to the fifteen departments in scope. They represent City staff time rather than Tyler's. The Council's own commitment is set out separately below and is considerably lighter.

Total commitment
Hours What it means
One department ~48 hours What a single department contributes across the whole year, spread over roughly eight touchpoints. Averaged out, under an hour a week — though it is concentrated in the first phase rather than spread evenly.

All fifteen departments ~715 hours The department figure above, multiplied across the departments in scope.

Central effort ~88 hours Happens once for the engagement regardless of department count. Concentrated in the City Manager's Office and Finance.

THE WHOLE CITY,

COMBINED
~800 hours Everything above, added together. Against a 2,080-hour work year that is about 0.4 of one full-time position — for the entire organization, across twelve months. It is not 0.4 of a position per department.

That last row is the number to hold onto. The engagement asks the City for roughly four tenths of one person's annual time in total, distributed across the fifteen departments in scope and a full year.

By role
Role Approx. hours Concentrated in
Budget Office / City Manager's Office ~133 Priorities, calibration panel, target scenarios, executive briefings
Department Directors (all
departments)
~190 Inventory review, scoring, calibration, insight
feasibility, executive briefing
Department Budget Liaisons (all
departments)
~440 Inventory and cost review, mandate evidence,
measure design and baselines
HR / Position Control ~10 A single position control export, plus questions during cost review
IT / ERP ~20 Data extracts, security review, dashboard
publishing

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28 Role Approx. hours Concentrated in
City Council ~10–12 Priority setting, receiving the menu, budget review, quarterly reporting
What the Council does
The Council's time commitment is small, and it falls at four moments where the Council's judgment is the only thing that can settle the question.

When What the Council does Roughly
Early, before scoring
begins
Set and confirm the priorities. Programs are scored against the results the community values, and those results have to be adopted rather than assumed. This is the single most
consequential hour the Council spends on this work — every program score that follows depends on it.

One workshop, 3–
4 hours
Around month three
to six
Receive the menu. Every program, its cost, who relies on it, and the documented options for each. The Council's questions at this stage shape which options staff pursue, so it works best as a working session.

One session, 2–3
hours
Spring, in the budget
process
Review recommendations. Department requests arrive already scored against the priorities the Council set, and target scenarios are presented in the order that matters: reallocate first, generate revenue second, taxes and rates last.

Within the normal
budget cycle
Quarterly, ongoing Receive the realization ledger. Identified, approved, implemented, and still recurring a year later. The Council reviews the figures directly rather than relying on assurances.

Four reports, ~30
min each
There is a fifth decision, and it is optional: how much public input to gather before priorities are confirmed. Section 12 lays out the practical options and what each costs in time.

Wh y t he pr ior it y -s et t in g session m a tt ers m or e th an it looks Every program in the City is scored against the results the Council adopts. If those results are vague, the scores are vague, and every conversation afterward becomes an argument about the framework rather than about the programs.

It also protects the Council. When a program's score is questioned, and one will be, the answer is a framework the Council adopted in public.

Specific requirements from the City
What From whom When
General ledger export, all funds Finance / IT Phase 1, single central pull

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29 What From whom When
Position control or payroll export with cost
center
HR / Finance Phase 1, single central pull
Organization chart and division structure City Manager's Office Phase 1 Adopted strategic priorities or Council
goals
City Manager's Office Phase 1, before scoring
Mandate citations for legally required
services
Departments, City Attorney Phase 1, during scoring
Demand and cost-recovery figures
(caseloads, permits, visits, fee schedules)
Departments Phase 1 — data departments
already report
A named project lead with authority to
convene departments
City Manager's Office Before kickoff
The final row is the determining factor in whether the engagement succeeds. The work itself is straightforward. It needs someone with the standing to get fifteen departments to the same table on schedule.

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30 10. Year one, and years two and three
Your City Manager has asked for this to be addressed within six months. That is achievable. What follows is the schedule Tyler would initially propose; the actual sequence will be set with your staff during setup, and it will shift with your budget calendar and your departments' capacity.

Year one — FY2027 (initially proposed)
When What you have
Weeks 3–4 The first draft of the program inventory, with costs and scores. Not final, but real enough to look at.

Month 3 The full analysis quantified: insights, process overlap, benchmarking and draft measures.

Months 4–6 Council commitments on the options you choose. These months are January through March, which is exactly when the recommended FY2028 budget is built — so the commitments land in the cycle already underway rather than waiting a year.

June 2027 The FY2028 budget adopted, carrying the choices the Council made.

I N P R A C T I C E · S O U T H J O R D A N , U T A H In its 2026 budget process, South Jordan used priority based budgeting to connect spending to adopted priorities. Seventy-six percent of new funding requests went to programs rated as most or more aligned with city priorities.

That figure is a useful measure of what year two looks like in practice. The question in front of the council stops being which departments asked loudest, and becomes which requests advance what the community said mattered.

ICMA PM Magazine, May 2026
I N P R A C T I C E · F R I S C O I N D E P E N D E N T S C H O O L D I S T R I C T , T E X A S Frisco identified close to $6 million in cost savings through priority based budgeting while operating under an explicit principle: identify and implement new revenue streams, where available, before reducing programs.

In practice that meant increasing facility rental rates, shifting eligible costs to other funding sources, and opening unused capacity to generate revenue — measures taken ahead of, and in place of, program reductions.

Frisco ISD budget materials
Year two — FY2028 (suggested)
The first budget built on the inventory. Departments arrive with requests already scored against priorities. The high-confidence items adopted in the spring are in force at full-year run rate. Fee studies for the larger items are underway. And the first quarterly report on the realization ledger is published.

The realization ledger

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31 Every opportunity is tracked through four states and reported to Council quarterly: identified, approved, implemented, and still recurring a year later. The ledger exists because the most common failure of this work is a large identified number that never actually moves. Pittsburgh identified $41 million through this method and independent reporting later found not all of it materialized. The Council is therefore able to verify progress directly rather than rely on assurances.

Year three — FY2029 and beyond (suggested)
Year three is when this becomes a permanent capability. Three things happen.

Your staff run the annual re-score
Rather than rebuilding, the inventory is verified — what changed, what was added, what moved. The effort is a fraction of year one, and it is done by your people rather than by ours.

The inventory becomes the budget process
It becomes the document through which the budget is built and presented, rather than a parallel exercise. This is the single most important factor in whether this survives. Every budget reform of the last sixty years that was maintained as a separate exercise eventually decayed. The ones that lasted were built into work the organization had to do anyway.

It outlasts the people who started it
A new mayor takes office during this engagement. City managers move on. Our contract ends. The fiscal risk the City Manager has described falls after all of that. If this is a project, it leaves when the people who championed it leave. If it is how the City builds its budget, it stays.

Th e F ou r Le ve ls — w he re t h is is hea de d
Level 1 — Data-driven: conversations shift from line items to programs. The budget becomes readable and Council asks program-level questions.

Level 2 — Entrepreneurial: the City becomes practiced at reallocation and revenue generation.

Departments compete on good ideas rather than on bigger asks.

Level 3 — Results-centric: resources visibly flow toward the outcomes the community named as priorities, and the strategic plan and the budget stop being separate documents.

Level 4 — Regional optimizer: the same logic extends across jurisdictional lines. National City is unusually well positioned here — the Chula Vista shelter agreement and the Port arrangement show the muscle already exists.

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32 11. Use of artificial intelligence
The Council is entitled to a clear account of this. The following describes the functions the software performs and the functions it does not.

What the machine actually does
It handles the predictable, repetitive part of the work: reading thousands of budget lines and drafting how they group into services, proposing how positions and dollars allocate across those services, matching your programs to comparable programs in other governments, and retrieving documented cases where a similar service was funded a different way.

Twenty years of performing these steps manually established that they follow recognizable patterns, and those patterns are what the models were trained on. Work that formerly required a consulting team six to eight months now produces a first draft within days.

What it never does
The machine does not… Because…
Decide anything Every output is a draft that your staff review, edit and approve before it moves forward. The Council decides what happens to a program; the analysis decides nothing.

Invent numbers Figures are retrieved from your records, not generated. When you see a cost, it traces back to a line in your general ledger. A system that produces plausible- looking numbers borrows the authority of the ledger without its discipline, which makes the errors very hard to catch.

Score your priorities for
you
The priority framework comes from the Council's adopted direction and from community input. The model does not decide what National City should value.

Operate as a black box At every stage staff inspect, edit and approve. Where a program is defined incorrectly, the City redefines it and the change is recorded.

Why processing speed matters
This matters more than it might appear. Under the earlier approach, cities spent six to eight months building data before they could act on any of it. In many cases the foundation work consumed most of the available staff time and attention, leaving less for the analysis that actually changes a budget.

National City does not have six to eight months of surplus staff capacity available, and the City Manager has requested progress within six months. Building the data quickly is what makes the remainder of the engagement feasible.

How the recommendations can be checked, not just the numbers There are two fair questions about a system like this. Does it invent numbers? And does it invent recommendations? The first is answered by reconciliation: the draft analysis tied to the City’s own

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33 published control totals within $3.83 across a $156.9 million all-funds budget, using published documents alone. This subsection answers the second.

Every option names a specific government that has implemented it, together with a source and a verification tier, and, wherever the record is published online, a link to the document itself. Nothing in the output rests on Tyler’s assertion that an option is sound. The evidence travels with the option, so any recommendation can be read back against the record of the government that adopted it — by City staff, by the City Attorney, or by a member of the public. The options shown in this document can be checked that way today. The complete set is built on the City’s own data and delivered under the engagement.

How you verify it
Check How
Trace any figure Every cost and revenue amount links back to the source line in your records. Ask for the trace on any number that surprises you.

Compare to what you
already published
Our first-pass analysis reconciled to the City's own all-funds total within $3.83, using only public documents. Your own data should tie even more closely.

Watch the ledger Identified, approved, implemented, recurring — reported publicly every quarter.

Test the
recommendations
Every option carries the government that implemented it, the source, and a verification tier. Ask for the trace on any option shown here, and on any option in the delivered set once the engagement is under way.

Ask your own staff Department directors review and sign off on their own inventory and cost data.

Where a director does not recognize their department in the output, the output is incorrect and is corrected.

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34 12. Gathering community priorities
Programs are scored against the results the community values. Those results have to come from somewhere, and the Council has real choices about how much public input to gather and how formally.

None of what follows is required for the engagement to work. The scoring framework can be anchored entirely to the Council's adopted strategic direction. But if National City wants residents to see themselves in the priorities that drive budget decisions, these are the practical options, from lightest to heaviest.

Option 1 — Anchor to what already exists
Use the City's adopted strategic priorities, general plan themes, and recent Council direction as the scoring criteria. No new outreach. Fastest path, and defensible on the grounds that these priorities were adopted through public process already.

Effort: a few hours of City Manager's Office time. Timeline: immediate.

Option 2 — Statistically valid community survey
A scientific survey of residents asking them to rank or allocate across candidate priorities. Produces results that are representative rather than reflective of whoever chose to participate — which is what makes it defensible when a program's score is challenged.

Tyler's community engagement products, including Polco, are commonly paired with this work for this purpose. Tyler notes that Polco is a Tyler product, and the Council should weigh that in deciding between it and an independent provider. The National Community Survey instrument it administers is widely used and benchmarked across cities, and several independent firms offer comparable services.

Effort: light for staff. Timeline: roughly 6–10 weeks. Cost varies with sample size.

Option 3 — Open digital input
An online priority-setting exercise open to all residents — often a budget allocation simulation where participants distribute a fixed amount across service areas and see the trade-offs. High engagement value and useful for public communication, though self-selected rather than representative.

Effort: light. Timeline: 4–6 weeks live. Best used alongside Option 2, not instead of it.

Option 4 — Facilitated community sessions
In-person or hybrid workshops where residents work through trade-offs in small groups. Slower and more staff-intensive, but produces the qualitative understanding of why residents value what they value — and in a city facing service reductions, the process itself can be as valuable as the output.

Effort: significant staff time. Timeline: 8–12 weeks.

I N P R A C T I C E · L A W R E N C E , K A N S A S

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35 Lawrence rebuilt its budget as a program-based tool supporting a community-driven strategic plan, using cost allocation, service-level rubrics and outcome measures.

For public input it pairs program scoring with a budget simulation that lets residents weigh different service levels against their costs. Program scores and community input are then combined, so the trade- offs residents actually chose are visible in the budget decisions that follow.

Government Finance Review, “Getting People in the Same Boat: Collaboration in Lawrence, Kansas” I N P R A C T I C E · B L O O M B E R G P H I L A N T H R O P I E S C I T Y B U D G E T I N G F O R E Q U I T Y A N D

R E C O V E R Y
Thirty U.S. cities, including Denver, Philadelphia, Seattle, New Orleans, Austin and Fort Collins, used this method to connect community-defined priorities to program-level budget decisions.

The common lesson across the cohort was that the priority framework carries more weight when residents have contributed to it, because a program score is easier to defend when it traces to something the community helped define.

Option 5 — Council-led priority setting
A structured Council workshop that produces the priority set directly, informed by whatever input has been gathered. Most cities do this regardless, as the final step that turns input into adopted criteria.

Effort: one facilitated session. Timeline: a single meeting.

Tyle r 's re c omme n de d a p pr oac h for Na t ion al C ity Start with Option 1 so scoring is not delayed. The engagement should not wait on outreach.

Run Option 2 or 3 in parallel during the first six months, and use the results to validate or adjust the scoring framework before the FY2028 budget is built.

Close with Option 5. A Council workshop that formally adopts the priority set is what gives every subsequent program score its authority — and what lets a councilmember answer a constituent by pointing at a document the Council adopted.

There is a second reason to invest here. If National City eventually needs to ask voters for revenue — and on the current trajectory that remains possible — a Council that can show it examined every program against priorities the community itself helped set is in a substantially stronger position than one that cannot.

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36 13. Why it will work, why now, why us
Why it will work here
Because parts of National City's budget already work this way, and they work because people here built them that way. Street sweeping runs on trash rates. Animal sheltering is contracted to Chula Vista. The Port pays $1.3 million a year for tideland protection. Right-of-way cleanup is running on Caltrans money at nearly four to one against the City's match.

Each of those was a deliberate decision, made well, by people who knew the service and saw an opening. The animal shelter agreement in particular is carefully built — payments reduced by redemption fees, a lower rate if the City staffs one officer, escalation capped against a three-year intake average. That is skilled work. What this engagement adds is the capacity to run that same search across every service at once, rather than one at a time as each pressure arrives.

And because the first-draft analysis, built from nothing but published documents, already found roughly $13.6 million of identified opportunity against a $12.7 million gap. Every part of that will be re-run on the City's own financial, position and timesheet data, and the figures will change. The draft does not have to hold perfectly for the engagement to be worth doing. It only has to show that the options are there, and it does.

The opportunity is also not one idea per service. Where the City has already acted on a program, the analysis returns further documented options for that same program beyond the one the City pursued.

What this engagement adds is not a better idea than the City’s own. It is the rest of the list, priced, for every service at once.

Why now
Three reasons, in order of how much they should matter to the Council. ● The commitments window is the budget window. Months four through six of this engagement are January through March 2027, which is exactly when the recommended FY2028 budget is built. Start now and the options land in the cycle already underway. Start later and the City builds one more budget the old way, with less left to work with. ● Your City Manager asked for this to be addressed in six months, and this is the pace at which it can be. Collier County catalogued 500 to 600 programs in weeks using the same approach, at roughly five times National City's scale.
● The services first named for reduction are also the ones where the funding question has had the least opportunity to be asked. Before the City reduces a service, it is worth ninety days to establish what that service could earn or what else could carry it.

What this costs
The contract terms, the annual investment and the payment schedule are set out in the City Manager's report accompanying this item and will be presented separately. They are not duplicated here, so that the Council reviews one authoritative set of figures.

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Priority Based Budgeting for the City of National City
Tyler Technologies · Priority Based Budgeting · August 2026
37 One observation on cost: the first-draft analysis described in Section 2 was produced prior to any agreement, from published documents, at no charge. The Council is therefore able to weigh the proposed investment against work it has already reviewed.

Why us

The method Priority Based Budgeting has been an ICMA leading practice since 2011, is central t o GFOA's national budget guidance including the Rethinking Budgeting initiative, and has been implemented in more than 300 governments and school systems across 30 -plus states and Canada.

The reference set The benchmark and case library is drawn from twenty years of completed engagements — real government program costs rather than estimates. It is the one thing in this field that cannot be replicated quickly, because it can only be built by doing the work.

The evidence Collier County actioned $40 million in 90 days and rolled back its property tax rate two years running with no service cuts. Los Angeles County, the largest local government in the country, has $290 million in opportunities identified with work underway. Kansas City scored all 212 of its programs and cut a projected shortfall from about $100 million to $54 million in a single cycle.

The honesty Pittsburgh identified $41 million through this method and independent reporting later found not all of it moved. We tell you that because it is why the quarterly ledger exists.

Anyone who claims every identified dollar becomes a real dollar is selling something.

The head start We built National City's first analysis before being hired, from your published documents, and it reconciled to your own all-funds total within $3.83. You can evaluate the method against your own numbers before spending anything.

Basis for a sole source determination
Whether this engagement meets National City's criteria for a sole source award is a determination for the City's procurement staff and City Attorney. The purpose of this subsection is to set out the factual basis on which that determination would rest.

Distinguishing element Why it is not available elsewhere The methodology and its
author
Priority Based Budgeting was developed by Chris Fabian in 2008 and has been continuously refined by him since. He is co-author of GFOA's defining white paper on it, and is the person who would lead this engagement. Other providers may perform program budgeting; the specific methodology ICMA designated a Leading Practice, and which GFOA built into national budget guidance, originates with and is maintained by Tyler.

The comparative
reference database
The benchmarking and insight functions draw on program-level cost and practice data from more than 300 completed implementations accumulated over twenty years. This is proprietary, is not commercially available, and cannot be reconstructed by a competing provider without performing an equivalent volume

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Priority Based Budgeting for the City of National City
Tyler Technologies · Priority Based Budgeting · August 2026
38 Distinguishing element Why it is not available elsewhere of work over an equivalent period. It is the component that makes peer comparison possible using actual government program costs rather than estimates.

The prediction models The machine learning models that draft the program inventory and cost allocation were trained on that same reference set. Their accuracy is a function of the underlying data, which is unique to Tyler. No general-purpose analytic tool can substitute, because the differentiator is the training corpus rather than the algorithm.

The integrated
deliverable set
Program inventory, costing, scoring, peer benchmarking, process overlap detection, insight generation with case evidence, target scenario modeling and the Strategist assistant operate against a single validated dataset. Assembling equivalent capability would require multiple vendors working from separately constructed data, with the reconciliation burden falling on City staff.

Work already performed Tyler has produced a first-draft program inventory and analysis for National City at no cost, reconciled to the City's published control totals. A competing provider would begin from nothing, and the City would forgo work it has already reviewed.

Tyler makes no representation about the capabilities of other providers. The elements above are stated as matters of fact regarding this methodology and this platform, for the City's procurement staff to weigh as they consider appropriate.

What is genuinely novel about this
What is new here is the unit of account, not the financial technique.

Every field becomes workable when it finds the right thing to count and writes down what matters about it. Chemistry had elements for a century before the periodic table arranged them by weight and behavior — and the arrangement predicted elements nobody had found. Medicine had the human genome as three billion letters before anyone described what each gene does and where; the description, not the sequencing, is what made comparison possible. Baseball recorded the walk in every box score for a hundred years before anyone counted it as valuable.

In each case, nothing new was discovered. Somebody found the right thing to count, wrote down what mattered about it, and the answers were already sitting there.

For a city, that unit is the program — a service you provide, with a real cost, real staff, and real people who depend on it. It is the smallest thing about which a resource decision can actually be made. Once every program carries its cost, its revenue, its mandate status, its reliance and its alignment, four yes-or- no questions sort all of them into sixteen positions, and each position points to a different kind of move.

Only two of the sixteen point toward doing less.

Th e se nt en ce w or t h r em em ber in g

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Priority Based Budgeting for the City of National City
Tyler Technologies · Priority Based Budgeting · August 2026
39 A revenue measure closes one year, once. A package of cuts closes one year, once, and permanently changes what the City is able to offer.

This is the only option that leaves National City more capable than it found it — and it is the only one the City has not yet tried.

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Priority Based Budgeting for the City of National City
Tyler Technologies · Priority Based Budgeting · August 2026
40 14. Engagement leadership and further reading
Chris Fabian, Creator of Priority Based Budgeting
Chris Fabian developed Priority Based Budgeting in 2008 while serving as an internal business consultant to Jefferson County, Colorado. It originated inside a working county government responding to a practical need, rather than in a consulting study.

Within three years ICMA designated the approach a Leading Practice for government management. He co-founded the Center for Priority Based Budgeting with Jon Johnson to formalize the methodology, and subsequently founded ResourceX to develop the software that scaled it. Tyler Technologies acquired ResourceX in 2023, and he has led Priority Based Budgeting at Tyler since that time.

His work spans the modern history of budget reform. Between 2005 and 2007 he supported first- generation Budgeting for Outcomes implementations for the City of Fort Collins and the State of Iowa, work that established both the promise and the practical limits of purchasing results rather than funding line items. Priority Based Budgeting debuted publicly in ICMA's PM Magazine cover story in June 2008.

Over approximately two decades he has worked with more than 300 governments and school systems across more than 30 states and Canada. He has presented at every GFOA annual conference since 2008 and every ICMA annual conference since 2009, and teaches four curricula through ICMA and GFOA:
budget modernization, program budgeting, outcome and priority based budgeting, and performance measurement. He also delivers a condensed PBB course within ICMA's Emerging Leaders Development Program.

The method has been co-published with GFOA, is central to its Rethinking Budgeting initiative and its Financial Foundations for Thriving Communities framework, and has been studied in academic and policy research including at the Harvard Kennedy School and the University of Illinois Chicago's Government Finance Research Center. It powered Bloomberg Philanthropies' City Budgeting for Equity and Recovery cohort of thirty U.S. cities, among them Denver, Philadelphia, Seattle, New Orleans, Austin and Fort Collins.

What the credit markets have said
This is worth including because it bears directly on the cost of capital, which matters to a city in National City's position.

Agency What they cited
S&P Global Ratings In its credit assessment of Scott County, Minnesota, S&P cited strong revenue and expenditure assumptions in connection with the county's use of a priority -based budgeting model.

Moody's Investors
Service
Tied Washoe County School District's move to priority-based budgeting to $63.1 million in identified savings.

Fitch Ratings Has likewise referenced jurisdictions' use of the practice as evidence of financial management strength.

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Priority Based Budgeting for the City of National City
Tyler Technologies · Priority Based Budgeting · August 2026
41 Who else is doing this
Priority Based Budgeting has been implemented in California cities of varying size, including several in which a city council directed the work while facing a structural General Fund deficit — the closest parallel to the decision before this Council. Tyler can provide current references on request.

At other scales, Los Angeles County applies it to roughly a $40 billion budget, Dallas across a $5.2 billion budget for its FY25–27 biennial cycle, and Fort Worth across a $3.09 billion budget with more than 300 programs mapped and peer-reviewed. Frisco ISD in Texas has run a priorities-based budget since 2016, and the State of Alabama's budget reform task force recommended shifting toward priority-based spending.

Wh y t his m at te rs t o N a tiona l C it y s pec ifica lly National City would work directly with the individual who developed the methodology and has observed its application across more than 300 organizations, including which implementations proved durable and which did not.

That experience is most consequential in the judgment-dependent portions of the work: the granularity at which programs are defined, distinguishing a legal mandate from an assumed service level, and sequencing options so that departments protect services rather than defend budgets.

Published work and further reading
The following are publicly available and may be of use to the Council or to staff seeking additional background.

Most relevant to National City's situation
Navigating Financial Challenges Through Priority-Based Budgeting ICMA PM Magazine, May 2026. Chris Fabian. The argument that fiscal constraint has become a structural condition rather than a cycle, and that PBB is the governance approach that lets leaders decide, defend and explain which services are sustained, adapted or reduced. This is the piece closest to the situation before the Council. https://icma.org/articles/pm-magazine
The Growing Impact of Priority-Based Budgeting
ICMA, December 2024. A field report from the post-stimulus fiscal turn, including the Wisconsin county parks department that used PBB to become fully self-sustaining and free general fund dollars for higher priorities. https://icma.org/articles/article/growing-impact-priority-based-budgeting It's All in the Questions: The Manager's Role in Achieving Fiscal Health ICMA PM Magazine cover series, September and October 2009. Fabian and Johnson. The finance officer as diagnostician of organizational fiscal health, introducing the fiscal health diagnostic and scenario planning model. https://icma.org/articles/pm-magazine
Foundational papers
Getting Your Priorities Straight
ICMA PM Magazine cover story, June 2008. Fabian, Collins and Johnson. The public debut of Priority Based Budgeting, and the first articulation of fiscal health and prioritization as a single disc ipline. https://icma.org/articles/pm-magazine
Anatomy of a Priority-Driven Budget Process

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Priority Based Budgeting for the City of National City
Tyler Technologies · Priority Based Budgeting · August 2026
42 Government Finance Officers Association, 2011. Kavanagh, Johnson and Fabian. The first published documentation of the method, laying out its eight major steps.
https://www.gfoa.org/materials/anatomy-of-a-priority-driven-budget-process The Challenges and Promise of Program Budgeting
Government Finance Review. Kavanagh, Fabian and Johnson. On the shift from the line item to the program as the unit of budget decision-making.
https://www.gfoa.org/materials/challenges-and-promise-of-program-budgeting-gfr On rethinking budgeting
Cities Come Together to Forge New Paths on Budgeting
ICMA PM Magazine, March 2025. Fabian with Shayne Kavanagh of GFOA and Elizabeth Steward of Envisio. Liberty Lake WA, Denver Public Library and Minnetonka MN putting the Rethinking Budgeting practices into operation. https://icma.org/articles/pm-magazine
Embracing the Decade of Local Government
ICMA PM Magazine cover story, October 2013. Fabian, Johnson and Hilvert. Written after the last recession, arguing that local government could not simply return to the prior status quo. https://icma.org/articles/pm-magazine
Rethinking Budgeting in Local Government
ICMA PM Magazine, April 2023. Chris Fabian. Why traditional budgeting is not equal to current conditions, and what replaces it.
https://icma.org/articles/pm-magazine/rethinking-budgeting-local-government The Growing Impact of Priority-Based Budgeting
ICMA, December 2024. Covering the NACo discussion with Commissioner Chris Hall of Collier County, Florida. https://icma.org/articles/article/growing-impact-priority-based-budgeting A Next-Generation Take on Coordination and Cooperation
Government Finance Review, April 2021. Kavanagh and Fabian, on regi onal and cross-jurisdictional resource optimization.
https://www.gfoa.org/gfr-april-2021
On partnership and community engagement
A Transformative Budgeting Partnership that Optimizes Priority-Based Budgeting ICMA, December 2025. The end-to-end model pairing Tyler's PBB with Envisio's strategy execution and Polco's community engagement — directly relevant to the public input options in Section 12. https://icma.org/articles/article
On equity and fiscal health
Budgeting for Equity
GFOA, May 2023, published under the Rethinking Budgeting initiative. Fabian with Shayne Kavanagh and Andrew Kleine. The framework for building equity considerations into program -level budget decisions. https://www.gfoa.org/rethinking-budgeting
Budgeting with an Equity Lens
Government Finance Research Center, University of Illinois Chicago, 2020. Chris Fabian. On building equity considerations into program scoring — directly relevant to the resident-fee trade-off discussed in Sections 2 and 3. https://gfrc.uic.edu/budgeting-with-an-equity-lens/
Washington County, Wisconsin's Triumph of Fiscal Independence

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Priority Based Budgeting for the City of National City
Tyler Technologies · Priority Based Budgeting · August 2026
43 Government Finance Research Center, University of Illinois Chicago, 2024. Chris Fabian. How a parks department facing elimination became self-sustaining instead — the clearest published case of a service saved by changing how it is funded.
https://gfrc.uic.edu/the-government-finance-research-blog/washington-county-wisconsins-triumph-of-fiscal-independence Interviews and background
Priority Based Budgeting — GovLove podcast
Engaging Local Government Leaders. A conversational introduction to the method and its origins. https://elgl.org/podcast-priority-based-budgeting-with-chris-fabian-resourcex/ GFOA author biography
https://www.gfoa.org/bio/chris-fabian

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Priority Based Budgeting for the City of National City
Tyler Technologies · Priority Based Budgeting · August 2026
44 Conclusion
National City is in a difficult fiscal position, and the Council is being asked to make decisions of a kind no elected body seeks out. Tyler does not wish to minimize that.

The central observation of this document bears repeating. The City has already addressed this problem on four separate occasions, in four different ways, and each of those arrangements remains in effect today. In each case City staff worked through a specific problem — a shelter to operate, a shoreline to patrol, a grant opportunity, a sweeper to fund — and arrived at a solution that preserved the service without reducing it or going to the voters.

In each case the City found the answer without an inventory of its other services to compare against, and without a way to test the same idea everywhere else. Four good answers came out of that, which says something about the people who found them.

This engagement supplies the method, and no fee study, efficiency audit or reorganization does the same job — each of those begins without a cost for every program, and so each returns one answer for one service. It applies the same analysis to all 178 services the City provides, returns the results with a dollar figure and a comparable jurisdiction attached to each, and presents them to the Council as a menu. The Council determines what is acted upon. No service is reduced by authorizing this work.

Another shock will come — a state cost shift, a downturn in sales tax, a grant that ends. That is simply what the next decade looks like for California cities. The question is whether National City meets it with a list of options already prepared, or has to work one out from a standing start.

Tyler Technologies would be glad to address any question this document leaves open, and appreciates the Council's time and consideration.

Submitted by Tyler Technologies
Priority Based Budgeting · Engagement lead: Chris Fabian, Senior Director, Product Strategy

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RESOLUTION NO. 2026 -

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY, CALIFORNIA,

AUTHORIZING THE MAYOR TO EXECUTE AN AMENDMENT TO THE AGREEMENT WITH TYLER TECHNOLOGIES, INC. FOR HOSTED ENTERPRISE RESOURCE PLANNING SOFTWARE TO ADD A PRIORITY-BASED BUDGET MODULE.

WHEREAS, on October 18, 2022, the City of National City ("City") and Tyler Technologies, Inc. (“Tyler") entered into an agreement (the “Agreement”) for hosted enterprise resource planning (“ERP”) software, referred to Munis, for a one-time cost not-to-exceed $361,498 and annual costs of $125,172; and
WHEREAS, to assist the City with shifting toward a priority-based budgeting model, which looks at programs holistically to evaluate community impact and strategic value, with the aim of identifying budget savings and improving operational efficiency, the City desires to acquire software to automate the complex process of shifting to a program-based financial model; and WHEREAS, Tyler offers an AI -driven, cloud-based priority -based budget platform that works with the City’s current ERP software, Munis, for a one-time fee of $14,400 and annual recurring fees of $80,000; and
WHEREAS, City staff recommends approval of an amendment to the Agreement with Tyler to add a priority-based budget module to Munis, in a not-to-exceed amount of $254,400.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF NATIONAL CITY, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS:

Section 1: That the City Council hereby authorizes the Mayor to execute an amendment to the agreement with Tyler Technologies, Inc. to add a priority-based budget module to Munis, for a total amount not-to-exceed $254,400.

Section 2: That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

PASSED and ADOPTED this 1st day of September, 2026.

Ron Morrison, Mayor

ATTEST:

Shelley Chapel, MMC, City Clerk
APPROVED AS TO FORM:

Heidi Skinner, City Attorney

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AGENDA REPORT

Department: City Manager's Office
Prepared by: Douglas Schulze, City Manager
Meeting Date: Tuesday, September 1, 2026
Approved by: Douglas J. Schulze, City Manager

SUBJECT:

Policy No. 105 Request to Add an Item to a Future Agenda.

RECOMMENDATION:

Approve a Motion to Add the Policy 105 Request to the October 20, 2026 Regular City Council Meeting Agenda.

BOARD/COMMISSION/COMMITTEE PRIOR ACTION:

Not Applicable.

EXPLANATION: A City Council Policy 105 Request was submitted on August 11, 2026. The subject of the request is an amendment to the Employer – Employee Relations Policy by striking language in Section 10, Subsection (A) restricting filing of Petitions for organizing to only occur in the month of January. This matter came to the attention of the Interim Human Resources Director and City Attorney in June/July. After conducting a review of the policy and legal analysis, it was determined that an amendment to strike the last sentence of Section 10, Subsection (A) would be appropriate.

Policy 105 establishes the process for consideration of Councilmember requests to add items to a future agenda. This request has been submitted properly and a review has been completed by the City Attorney and City Manager to determine the request is appropriate for consideration at a Regular City Council Meeting. Policy 105 also limits the extent of City Council discussion to whether the item should be added to an agenda and a date, not the merit of the item.

FINANCIAL STATEMENT:

Staff time spent preparing the amendment to the Employer – Employee Relations Policy will be minimal and consistent with the course of normal duties.

RELATED CITY COUNCIL 2020-2025 STRATEGIC PLAN GOAL:

Not Applicable

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

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ORDINANCE:

Not Applicable

EXHIBITS:

Exhibit A – Policy 105 Request Form IBEW
Exhibit B – Policy 105 Request Form Councilmember Bush
Exhibit C – Employer-Employee Relations Policy

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CITY COUNCIL ITEM REQUEST
The City Council Item Request Form is for members of the City Council to submit written requests to the City Manager’s Office for inclusion of an item on a future City Council Meeting Agenda. At the meeting where the initial written request is heard, discussion should be limited to whether the item should be added to an agenda and a date, not the merit of the item. A majority vote of the City Council is required for the item to be added to a future City Council Meeting Agenda for action.

Marcus Bush
Requesting Member of City Council:

Today’s Date: August 11, 2026

Is this matter considered Time-Sensitive by another entity deadline? No

WRITTEN REQUEST
I, Marcus Bush , hereby request that the following item be placed on the City of

National City – City Council meeting agenda for consideration.

IBEW 47 is requesting that the City of National City amend Resolution No. 96-56, by striking the last sentence of Section 10, Subsection (A) “Petitions may only be filed during the month of January each year”. From IBEW: “By striking this section of the resolution, workers will have a fairer system to petition for recognition at the City of National City. Furthermore, your current employees that are requesting to be represented, will be able to have that sooner than later. See attachments for background info.” See attachments for additional background. Looking for potential council discussion in September 2026 and work with City Attorney, City Manager/Human Resources on this.

Page 455 of 476 ends

CITY COUNCIL POLICY

CITY OF NATIONAL CITY

AMENDED: October 21, 2025

ADOPTED: March 12, 1985
POLICY # 105
TITLE: Request by Member of City Council to Place an Item on a City Council Agenda

PURPOSE

In compliance with the Ralph M. Brown Act, items not already on the agenda cannot be discussed or considered during a City Council Meeting. Discussing without notice does not provide the public, staff, or other City Councilmembers time to review the subject matter, and contemplate a response for discussion or provide direction.

This policy is to establish a clear and effective process for the City Councilmembers to place items on the City Council Agenda for consideration.

POLICY

1. The City Councilmembers may request that an item be placed on a future City Council Meeting Agenda for discussion and possible action.

2. For any item to be placed on the City Council Meeting A genda, by the City Councilmembers, the following will assist in the City Manager in the agenda planning process:

a. A Council Agenda Item Request Form to agendize the request to be discussed, and the City Councilmember’s recommended action to address the matter.

b. The request must be submitted no later than 5:00 p.m. on the Tuesday prior to the regularly scheduled City Council Meeting to allow the City Manager and City Attorney time to review the item and determine, if the matter as written, in the request, should be placed on the open or closed session of the City Council Agenda.

c. If the City Manager , in consultation with the City Attorney, determines the matter is appropriate to be included in the open session agenda it will be added to the agenda as written. If the City Attorney, determines the matter should be discussed in Closed Session, the City Manager’s Office will draft the required agenda wording for listing the matter under Closed Session on the City Council Meeting Agenda. The request, written by the City Councilmember, will be provided to the entire City Council in Closed Session.

d. Discussion would be limited to whether an item should be added to an agenda and a date, not the merit of the item.

Page 456 of 476 ends

CITY COUNCIL POLICY

CITY OF NATIONAL CITY

AMENDED: October 21, 2025

ADOPTED: March 12, 1985
POLICY # 105
TITLE: Request by Member of City Council to Place an Item on a City Council Agenda
e. If a majority of the City Council votes to include the item as an action item at a subsequent City Council meeting it will be determined who will provide the report:

i. The City Councilmember prepares a report including supporting information and documentation, and a presentation of the item to be discussed at the meeting, with City Manager and City Attorney review; or

ii. The City staff will be directed to provide a report analysis including fiscal review, legal review, and policy review of the action by the City Councilmember, requesting and recommendation (if any) among alternatives (if any) as soon as the research and staff report can be reasonably completed at a subsequent City Council Meeting.

f. If the request requires further study of the item from staff, a full analysis shall be prepared at the direction of the City Manager with at least thirty (30 ) calendar days to prepare, unless otherwise directed by the City Council.

Status updates will be provided to the City Council every sixty (60) days as an informational memo.

g. This policy would provide the City Manager the authority to determine placement and timing, unless City Co uncil direction is time -sensitive, and requires immediate placement on the next regularly scheduled City Council Meeting.

3. Requirements for Agenda Item Request
Submission

All Policy 105 agenda item requests must include a Justification Statement and an Impact Statement. Co-Sponsorship is optional.

b. Urgent items must identify significant consequences of inaction (financial, legal, safety).

4. Resource Consideration

The City Manager shall review alignment with the City’s Strategic Plan.

b. Significant projects must include cost-benefit and staff time analysis.

c. Each Councilmember may have no more than two active agenda items at a time.

Page 457 of 476 ends

CITY COUNCIL POLICY

CITY OF NATIONAL CITY

AMENDED: October 21, 2025

ADOPTED: March 12, 1985
POLICY # 105
TITLE: Request by Member of City Council to Place an Item on a City Council Agenda

5. Evaluation of Agenda Item Requests

a. Evaluation is performed by the City Manager.

b. Evaluation of merits may occur through quarterly meetings, an evaluation committee, or limited discussion.

c. Item will be placed on the City Council Meeting Agenda under the “Elected Officials Report” section.

6. Exemptions

a. Minor agenda items, such as small code amendments, are exempt from Impact Statement and Resource Consideration.

Related Policy References

National City Municipal Code, Chapter 2 .04
Ralph M. Brown Act
Prior Policy Amendments
June 11, 2013 (Revised – No Resolution – Refer to Meeting Minutes) October 8, 2013 (Resolution No. 2013-147)
March 21, 2017 (Resolution No. 2017-37)
October 5, 2021 (Resolution No. 2021 -148)
October 21, 2025 (Resolution No. 2025- 148)

Page 458 of 476 ends

CITY COUNCIL POLICY

CITY OF NATIONAL CITY
AMENDED: October 21, 2025
ADOPTED: March 12, 1985
POLICY # 105
TITLE: Request by Member of City Council to Place an Item on a City Council Agenda

CITY COUNCIL AGENDA ITEM REQUEST FORM
T
he City Council Agenda Item Request Form is for members of the City Council to submit written requests to the City Manager’s Office for inclusion of an item on a future City Council Meeting Agenda. At the meeting where the initial written request is heard, discussion should be limited to whether the item should be added to an agenda and a date, not the merit of the item. A majority vote of the City Council is required for the item to be added to a future City Council Meeting Agenda for action.

Requestor(
s): _Councilmember Bush______________________________________________ Date Submitted: 8/11/2026 Co-Sponsor (Mayor or Councilmember): ________________________________________________________________________ Section 1. Proposal Title __Employer-Employee Relations Policy_____________________________ Secti
on 2. Justification Statement
☐ What i
s the need/problem to be addressed?
☐ Who is proposed to do the work? (City staff/department, consultant, etc.) ☐ Why is the timing appropriate now?
Sec
tion 3. Impact Statement
☐ Estimated staff time (by department, if applicable)
☐ Expected costs or budget implications (consultant fees, legal review, etc.) ☐ Related/ongoing projects that may be affected
Sec
tion 4. Urgency
☐ Not urgent
☐ Urgent – If urgent, check all that apply and explain:
☐ Potential financial loss
☐ Legal implications
☐ Public safety risks
Sec
tion 5. Strategic Alignment
☐ Explain how this proposal aligns with the City’s Strategic Plan or Council priorities Sec
tion 6. Proposal Type
☐ Significant project (requires staff analysis, legal opinion, or financial evaluation) ☐ Minor amendment/operational adjustment (exempt from full analysis) Section 7. Certification
I certify that this request complies with the requirements of City Council Policy No. 105.

Signature of Requestor: _____________________________________ Date: ______________ Signature of Co-Sponsor: ____________________________________ Date: ______________ Marcus Bush
Digitally signed by Marcus Bush
Date: 2026.08.11 17:05:15 -07'00'
✔

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City of National City, California

COUNCIL AGENDA STATEMENT
May7, 1996 7
MEETING DATE AGENDA ITEM NO.

ITEM TITLE RESOLUTION AMENDING THE EMPLOYER- EMPLOYEE RELATIONS

POLICY FOR THE CITY OF NATIONAL CITY
PREPARED BY Roger C. De DEPARTMENT Personnel
Personnel
EXPLANATION.

The current Employer- E loyee Relations Resolution ( No. 10, 596) was approved by Council on March 14, 1972 and has never been revised. The need for revision became very evident during impasse proceedings with the Police Officer' s Association, when the court, among other things, decided that an impasse did not exist because the language and procedure in our current policy was vague and undefinitive.

The City Representative provided the opportunity to meet and consult to all employee groups on these proposed revisions and did meet with the MEA and the POA to address their concerns. The result of this process is the attached proposed policy.

The most significant changes proposed are the automatic required mediation after the declaration of impasse by an impartial third party rather than by the City Manager and a similar method of resolution in the determination of an unfair labor practice. There are also language changes throughout providing very specific definitions and clarifying the procedures that are already in place. The law firm of Liebert, Cassidy & Frierson was instrumental in providing legally acceptable language.

Environmental Review X N/ A
Financial Statement
N/ A
Account No.

STAFF RECOMMENDATION
Approve Resolution.

BOARD/ COMMISSION RECOMMENDATION
N/ A
96- 56
ATTACHMENTS ( Listed Below) Resolution No.

1. Resolution

2. Employer- Employee Relations Policy
2 A- 200 ( Rev. 9/ 80)

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RESOLUTION NO. 96- 56

RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF NATIONAL CITY

APPROVING THE CITY OF NATIONAL CITY

EMPLOYER- EMPLOYEE RELATIONS POLICY, AS AMENDED
WHEREAS, Chapter 10, Division 4, Title 1 of the Government Code of the State of California was amended effective January 1, 1969for thepurposeof promoting improvedemployer-employeerelationsbetweenpublicemployersandtheiremployeesby establishing uniform and orderly methods of communication between employees and the public agenciesby which they are employed; and
WHEREAS, GovernmentCodeSection3507 empowersa City to adopt reasonablerules andregulationsafter consultationin goodfaith with representativesof its employee organizations for the administration of employer-employee relations; and WHEREAS, theCity of NationalCity desiresto adoptsuchreasonablerules andregulationsasauthorizedby law.

NOW, THEREFORE, BEIT RESOLVEDby theCity Councilof theCity of NationalCity thattheCity CouncildoesherebyapprovetheCity of NationalCity Employer- Employee Relations Policy, as amended. Said Policy is on file in the Office of the Personnel Director.

PASSED and ADOPTED this 7th day of May, 1996.

George H. aters, Mayor
ATTEST:

Lori Anne Peoples, City Odic
APPROVED AS TO FORM:

George H. Eiser, III
City Attorney

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Passedand adopted by the Council of the City of National City, California, on May 7, 1996 by the following vote, to-wit:

Ayes: Council Members Beauchamp, Inzunza, Morrison, Zarate, Waters.

Nays: None.

Absent: None.

Abstain: None.

AUTHENTICATED BY: GEORGE H. WATERS
Mayor of the City of National City, California
O +
s City Jerk of the City of National Ci , California
Vc.S'ATEdr
By:

Deputy
I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 96-56 of the City of National City, California, passedand adopted by the Council of said City on May 7, 1996.

City Clerk of the City of National City, California
By:

Deputy

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CITY OF NATIONAL CITY

EMPLOYER- EMPLOYEE RELATIONS
POLICY

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TABLE OF CONTENTS

SECTION CONTENTS PAGE
SECTION 1 TITLE OF POLICY 1
SECTION 2 STATEMENT OF PURPOSE 1
SECTION 3 DEFINITIONS 2
SECTION 4 EMPLOYEE RIGHTS 4
SECTION 5 CITY RIGHTS 4
SECTION 6 CONFIDENTIAL, MANAGEMENT
AND SUPERVISORY EMPLOYEES:

REPRESENTATION LIMITATIONS 4
SECTION 7 UNFAIR EMPLOYEE
RELATIONS PRACTICES 5
SECTION 8 ADVANCE NOTICE 6
SECTION 9 POLICY AND STANDARDS FOR
DETERMINATION OF APPROPRIATE UNITS 6
SECTION 10 PROCEDURES FOR ESTABLISHMENT

AND MAINTENANCE OF FORMAL

RECOGNITION OF AN EMPLOYEE
ORGANIZATION 7
SECTION 11 IMPASSE PROCEDURES 11
SECTION 12 CONSTRUCTION 12
SECTION 13 RULES AND REGULATIONS 12
SECTION 14 SEPARABILITY 12

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EMPLOYER-EMPLOYEE RELATIONS POLICY
WHEREAS, Chapter 10, Division 4, Title 1 of the Government Code of the State of California was amendedeffective January 1, 1969 for the purpose of promoting improved employer- employee relations between public employers and their employees by establishing uniform and orderly methods of communication between employees and the public agencies by which they are employed; and
WHEREAS, Government Code Section 3507 empowers a City to adopt reasonable rules and regulations after consultation in good faith with representatives of its employee organizations for the administration of employer- employee relations; and WHEREAS, the City of National City desires to adopt such reasonable rules and regulations as authorized by law.

NOW, THEREFORE, the City Council of the City of National City does hereby resolve as follows:

SECTION 1 TITLE OF POLICY
This Policy shall be known as the Employer- Employee Relations Resolution ( EERR) of the City of National City, which supersedesResolutionNo. 10,596previously adoptedby the City Council on March 14, 1972.

SECTION 2 STATEMENT OF PURPOSE
This Resolution implements Chapter 10, Division 4, Title 1 of the Government Code of the State of California ( Sections 3500 et seq.) captioned " Local Public Employee Organizations," by providing orderly proceduresfor the administration of employer-employee relations between the City and its employee organizations. However, nothing contained herein shall be deemed to supersede the provisions of State law, City ordinances, resolutions and rules which establish and regulate the merit and civil service system, or which provide for other methods of administering employer- employee relations. This Resolution is intended, instead, to strengthen merit, civil service and other methods of administering employer- employee relations through the establishment of uniform and orderly methods of communications between employees, employee organizations and the City.

It is the purpose of this Resolution to provide procedures for meeting and conferring in goodfaith with formally RecognizedEmployeeOrganizationsregarding matters that directly affect and primarily involve the wages, hours and other terms and conditions of employment of employees in appropriate units and that are not preempted by Federal or State law. 1-

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SECTION 3 DEreiNITIONS
As usedin this Policy, the following terms shall havethe meaningsindicated:

A) APPROPRIATE UNIT— means a unit of employee classes or positions established pursuant to Section 9, of this Policy.

B) CITY— means the City of National City, a municipal corporation, and where appropriate herein, " City" refers to the City Council, the governingbody of said City, or any duly authorizedmanagementemployeeasherein defined.

C) CONFER IN GOOD FAITH— means a mutual obligation of the City representatives and the recognizedemployeebargaining units to meet at reasonable times and to confer regarding matters within the scope of representation for the purpose of exchanging proposals and counter proposals in an endeavor to reach agreement usually in the form of a Memorandum of Understanding.

D) CONSULT IN GOOD FAITH— means to communicate orally or in writing with any or all employee organizations, whether exclusively recognized or not, for the purpose of presenting and obtaining views or advising of intended actions. Matters affecting employer- employee relations, not subject to meet and confer, shall be subject to meet and consult.

E) EMPLOYEE— means any regular career employee of the City, except those persons elected by popular vote.

F) EMPLOYEE, CONFIDENTIAL— means an employee who has access to information and decisions of City management affecting employer-employee relations.

G) EMPLOYEE, EXECUTIVE MANAGEMENT— means any employee having significant responsibilities for formulating and administering or managing City policies and programs, including but not limited to the chief executive officer and department directors.

H) EMPLOYEE, PROFESSIONAL— means employees engaged in work requiring specialized knowledge and skills attained through completion of a recognized course of instruction, including but not limited to attorneys, physicians, registered nurses, engineers, architects, teachers and various types of physical, chemical, and biological scientists.

I) EMPLOYEE, MID- MANAGEMENT/ SUPERVISORY— means any employee having authority to exercise independent judgment in carrying out City policy to hire, transfer, suspend, promote, discharge, adjust grievancesor effectively to recommend such action if in connection with the foregoing the exercise of such authority is not a merely routine or clerical nature, but requires the use of independent judgment.

Typically an employeein this status is at the division head or deputy department head level with significant responsibility in developingor controlling a budget and establishing department rules and policies.

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J) EMPLOYEE, PanCE OFFICER— means any employee whose duties consist primarily of enforcementof State laws and Localordinances.

K) EMPLOYER- EMPLOYEE RELATIONS OFFICER ( EERO)— means the City Manager. The City Manager may designatea representative (designee) to perform the functions assigned to the EERO.

L) FORMALLY RECOGNIZED EMPLOYEE ORGANIZATION— means an employee organization which has been formally acknowledged by the City as the employee organization representing the employees in an appropriate representation unit pursuantto Section10hereof, havingthe exclusiveright to meetandconferin good faith concerning statutorily required subjects pertaining to unit employees, and therebyassumingthe correspondingobligationoffairly representingsuchemployees.

M) GRIEVANCE— means a dispute which specifically alleges a violation of the City' s policies, rulesor regulationsgoverningpersonnelpracticesor workingconditions, or of the practical consequencesof a City rights' decisionon wages, hours and other terms and conditions of employment. Grievances shall be processed in accordance with procedures established or bargained by the City.

N) INFORMALLY RECOGNIZED EMPLOYEE ORGANIZATION— means an employee organization which has not sought formal recognition, but is acknowledged by the city as representingemployeesin an appropriaterepresentationunit, and having the right to meet and consulton wages, hours and working conditions. 0) IMPASSE— means that the representatives of the City and a formally Recognized EmployeeOrganization have reacheda point in their meeting and conferring in good faith where their differences on matters to be included in a Memorandum of Understanding and over any matters concerningwhich they are required to meet and confer, remain so substantial and prolonged that further meeting and conferring appear futile to either party.

P) MEDIATION OR CONCILIATION— means the efforts of an impartial third person or persons, functioning as intermediaries, to assist the parties in reaching a voluntary resolution to an impasse, through interpretation, suggestion and advice. Mediation and conciliation are interchangeable terms.

Q) POLICY— means unless the context indicates otherwise, the Employer- Employee Relations Policy of the City of National City.

R) PROOF OF REPRESENTATION OR SUPPORT— means ( 1) an authorization card recently signed and personally datedby an employee, or (2) a verified authorization petition or petitions recently signed and personally dated by an employee, or ( 3) employee dues deduction authorization, using the payroll register for the period immediately prior to the date a petition is filed hereunder, exceptthat duesdeduction authorizations for more than one employee organization for the account of any one 3-

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employee shall not be considered as proof of employee support for any employee organization. The only authorization which shall be considered as proof of employee support hereunder shall be the authorization last signed by an employee. The words recently signed" shall mean within ninety (90) daysprior to the filing of a petition.

SECTION 4 EMPLOYEE RIGHTS
Employees of the City shall have the right to form, join and participate in the activities of employee organizations for the purpose of representation on all matters of employer- employee relations, including but not limited to wages, hours and other terms and conditions of employment. Employees of the City also shall have the right to refuse to join or participate in the activities of employee organizations and shall have the right to represent themselves individually in their employment relations through meet and consult procedures with the City, except when they are assigned to an employee group which is formally recognized with the exclusive right to bargain. No employee shall be interfered with, intimidated, restrained, coerced or discriminated against by the City or by any employee organization because of his/ her exercise of these rights.

SECTION 5 CITY RIGHTS
The exclusive rights of the City, include but are not limited to, the right to determine the mission of its constituent departments, commissions and boards; set standards of service; determine the procedures and standards of selection for employment and promotion; direct its employees; take disciplinary action; relieve its employees from duty because of lack of work or for other legitimate reasons; maintain the efficiency of governmental operations; determine the methods, means, types and number of personnel by which government operations are to be conducted; determine the content of class specifications; take all necessary actions to carry out its mission in emergencies; exercise complete control and discretion over its organization and the technology of performing its work.

SECTION 6 CONFIDENTIAL, MANAGEMENT, AND SUPERVISORY
EMPLOYEES: REPRESENTATION LIMITATIONS
A) Management, which includes executive and mid- manager/ supervisory employees, and confidential employees shall not be active members of an employee organization which represents employees of the City who are not management or confidential employees and shall not serve as representatives of such employee organizations before City Management.

B) Supervisory employees shall not represent non- supervisory or subordinate supervisory employees in grievance matters.

C) The EERO or designeeshall specifywhich employeesare confidential, management, supervisory employees, professional or peace officers in accordance with the definitions in Section 3 of this Policy.
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SECTION 7 UNFAIR EMPLOYEE RELATIONS PRACTICES
A) It shall be an unfair employee relations practice for the City:

1. to interfere with, restrain or coerce employees in the exercise of the rights recognized or granted in this Policy;

2. to dominate or interfere with the formation of any employee organization or contribute financial support to it, provided the rights recognized or granted to employee organizations in this Policy shall not be construed as financial support;

3. to refuse to meet and confer in goodfaith with representatives of recognized employee organizations on matters within the scope of representation in a timely manner.

B) It shall be unfair employee relations practice for employee organizations or their representatives or members:

1. to interfere with, restrain or coerce employees in the exercise of the rights recognized or granted in this Policy;

2. to refuse to meet and confer in good faith with City officials in a timely matter on matters within the scope of representation, when the employee organization involved is a recognized employee organization.

C) With respectto the impasseproceduresset forth in Section 11 of this Policy, it shall be an unfair employeerelations practice for either the City or a recognizedemployee organization to fail or refuse to participate in good faith in the impasse procedures or with any mediator selectedor designated, pursuant to the provisions of said Section

11. D) Charges of violations of this Section may be initiated by a management representative, by a representative of any employeeorganization or by an individual employee or group of employees. Such charges shall be filed in writing with the EERO or designee.

E) The EERO or designee shall contact the California State Mediation & Conciliation Service who shall conduct an investigation or shall recommend a third party neutral who shall conduct an investigation to determine whether a party has engaged in an unfair employee relations practice and shall advise the parties of his/ her findings. If there is a finding that an unfair employeerelations practice has been committed, a recommended corrective action shall be submitted to the City Council for resolution.

The City Council may acceptor reject the recommendationor take such other action as it deems appropriate.
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SECTION 8 ADVANCE NOTICE
Written notice shall be given to each recognized employee organization affected of any ordinance, rule, resolution or regulation directly relating to matters within the scope of representation proposed to be adopted by the City Council or by any board or commission of the City; and each shall be given the opportunity to meet with designated representatives of such body prior to adoption, unless an emergency exists.

In cases of emergency when the City or any board or commission of the City determines that an ordinance, rule, resolution or regulation must be adopted immediately without prior notice or meeting with a recognized employee organization, the City, or the board or commission of the City shall provide such notice and opportunity to meet at the earliest practicable time following the adoption of such ordinance, rule, resolution or regulation.

SECTION 9 POLICY AND STANDARDS FOR DETERMINATION OF

APPROPRIATE UNITS
The policy objectives in determining the appropriateness of units shall be based on the effect of a proposed unit has on ( 1) the efficient operations of the City and its compatibility with the primary responsibility of the City and its employees to effectively and economically serve the public, and ( 2) providing employees with effective representation based on recognized community of interest considerations. These policy objectives require that the appropriate unit shall be the broadest feasible grouping of positions that share an identifiable community of interest. Factors to be considered shall be:
a. Community of interest among employees includes, but is not limited to, similarity of the general kinds of work performed, types of qualifications required, the general working conditions, and interest in similar compensation and benefits.
b. History of representation in the City, however, no unit shall be deemed to be an appropriate unit solely on the basis of the extent to which employees in the proposed unit have organized in the past.
c. Consistency with the organizational patterns of the City. d. Number of employees and classifications, and the effect on the administration of employer-employee relations created by the fragmentation of classifications and proliferation of units.
e. Effect on the classification structure and impact on the stability of the employer- employee relationship; dividing a single or related classification among two or more units, shall be avoided whenever possible. 6-

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Notwithstanding the foregoing provisions of this Section, Management and Confidential employees shall not be included in the same unit with non- management and non- confidential employees; at the option of the EERO or designee, mid- management/ supervisory employees may be included in a unit consisting solely of mid- management/ supervisory employees and professional employees shall not be denied the right to be represented in a separate unit from non- professional employees. Non- management peace officers shall not be denied the right to be represented in a separate unit from non- peace officers.

The Personnel Director, after providing notice and opportunity to meet and consult to the affected employee organizations, shall allocate new classifications to the unit deemed appropriate, shall delete eliminated classifications from the various units, and shall reallocate classifications from one unit to another when it is deemed to be a more appropriate unit based on the above criteria. Employee organizations or a majority of the employees in the affected classification may appeal the decision of the Personnel Director to the EERO or designee for final determination within ten ( 10) days of the notice of the decision by the Personnel Director.

SECTION 10 PROCEDURES FOR ESTABLISHMENT AND

MAINTENANCE OF FORMAL RECOGNITION OF AN

EMPLOYEE ORGANIZATION
A) Petition
An employee organization that seeks to be formally acknowledged as the Recognized Employee Organization representing the employees in an appropriate unit shall file a petition with the EERO or designeecontaining the following information and documentation:
a. Name and address of the employee organization. b. Name and titles of its officers.
c. Names of employee organization representatives who are authorized to speak on behalf of the organization.
d. A statement that the employee organization has, as one of its primary purposes, representing employees in their employment relations with the City. e. A statement whether the employee organization is a chapter of, or affiliated directly or indirectly in any manner, with a local, regional, state, national or international organization, and if so, the name and address of each such other organization.
f. Certified copies of the employee organization' s constitutions and by-laws. 7-

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g. A designation of those persons, not exceeding two in number, and their addresses, to whom notice is sent by regular United States mail will be deemed sufficient notice on the employee organization for any purpose. h. A statement that the employee organization has no restriction on membership based on race, color, creed, sex or other prohibited categories of discrimination. i. The established unit and job classifications of employees claimed to be appropriate and the approximate number of member employees therein. j. A statement that the employee organization has in its possession proof of employee support as herein defined to establish that a majority of the employees in the unit claimed to be appropriate have designated the employee organization to represent them in their employment relations with the City.

Such written proof shall be submitted for the confirmation to the EERO or designee.
k. A request that the EERO or designee formally acknowledge the petitioner as the Recognized Employee Organization representing the employees in the unit claimed to be appropriate for the purpose of meeting and conferring in good faith.

The Petition, including the proof of at least thirty ( 30) percent employee support and all accompanying documentation, shall be declared to be true, correct, and complete, under penalty of perjury, by the duly authorized officer(s) of the employee organization executing it.

Petitions may only be filed during the month of January each year.

B) City Response to Recognition Petition
Upon receipt of the Petition, the EERO or designee shall determine whether:
a. There has been compliance with the requirements of the Recognition Petition; and
b. The proposed representation unit is an appropriate unit in accordance with Section 9.

If an affirmative determination is madeby the EERO or designeeon the foregoing matters, he/ she shall so inform the petitioning employee organization, shall give written notice of such request for recognition to the employees in the unit and shall take no action on said request for thirty ( 30) days thereafter prior to scheduling an election and providing notice to affected employees. If either of the foregoing matters are not affirmatively determined, the EERO or designee shall offer to consult thereon with such petitioning employee organization, and if such determination thereafter remains unchanged, shall inform that organization of the reasons therefor in writing. The determination of the EERO or designee shall be final.
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C) Open Period for Filing Challenging Petition
Within thirty ( 30) days of the date written notice was given to affected employees that a valid recognition petition for an appropriate unit has been filed, any other employee organization may file a competing petition to be formally acknowledged as the formally Recognized Employee Organization of the affected employees by showing evidence of proof of employee support in the unit claimed to be appropriate of at least twenty ( 20) percent and otherwise in the same form and manner as set forth herein.

If such challenging petition seeks representation of only a portion of the established unit, the EERO or designee shall call for a hearing on such overlapping petitions for the purpose of ascertaining the more appropriate unit, at which time the petitioning employee organizations shall be heard. Thereafter, the EERO or designee shall determine the appropriate unit or units in accordance with the standards in Section 9 of this Policy. The petitioning employee organizations shall have fifteen ( 15) days from the date notice of such unit determination is communicated to them by the EERO or designee to amend their petitions to conform to such determination.

D) Election Procedure
Upon the expiration of the Open Period for Filing a Challenging Petition and in the absence of a valid challenging Petition having been filed, the EERO or designee having verified employee support equal to 50% plus one of the eligible employees, shall formally acknowledge the petitioning Employee Organization as the Recognized Employee Organization for the designated appropriate unit. If employee support does not equal 50% plus one of the eligible employees in the designated unit the EERO shall arrange for a secret ballot election pursuant to the procedures set forth herein below.

In the event of a valid challenging petition, the EERO or designee shall arrange for a secret ballot election to be conducted by the Personnel Department or the California State Conciliation Service in accordancewith their rules and procedures subject to the provisions of this resolution. All employee organizations who have duly submitted petitions which have been determined to be in conformance with this Section shall be included on the ballot. The choice of" no organization" shall also be included on the ballot. Employees entitled to vote in such election shall be those persons employed in regular permanent positions within the designated appropriate unit who were employed during the pay period immediately prior to the date which ended at least fifteen ( 15) days before the date the election commences, including those who did not work during such period because of illness, vacation or other authorized leaves of absence, and who are employed by the City in the same unit on the date of the election.

An employee organization shall be formally acknowledged as the formally Recognized Employee Organization for the designated appropriate unit following an election or run- off election if it received valid votes equal to 50% plus 1 of the eligible employees in the unit. In an election involving three or more choices, where none of the choices receives a majority of the valid votes cast, a run- off election shall be conducted between the two choices receiving the largest number of valid votes cast; the rules governing an initial election being applicable to a run- off election.
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There shall be no more than one valid election under this resolution pursuant to any petition in a 12-month period affecting the same unit.

Costs of conducting elections shall be borne by the City when conducted by the Personnel Department or borne in equal shares by the City and each Employee Organization appearing on the ballot when the election is conducted by the California State Mediation and Conciliation Services and a charge for such service is made.

E) Procedure for Decertification of Recognized Employee Organizations A Decertification Petition alleging that the incumbent Recognized Employee Organization no longer represents a majority of the employees in an established appropriate unit may be filed with the EERO or designee only during the month of January of any year following the first full year of recognition, or during the thirty ( 30) day period commencing one hundred- eighty ( 180) days prior to the termination date of a Memorandum of Understanding then having been in effect less than three ( 3) years, whichever occurs later.

A Decertification Petition may be filed by five or more employees in a recognized unit or their representative, or an employee organization, and shall contain the following information and documentation declared by the duly authorized signatory under penalty of perjury to be true, correct and complete:
a. The name, address and telephone number of the petitioner and a designated representative authorized to receive notices or requests for further information.
b. The name of the established appropriate unit and of the incumbent Recognized Employee Organization sought to be decertified as the representative of that unit.
c. An allegation that the incumbent Recognized Employee Organization no longer represents a majority of the employees in the appropriate unit, and any other relevant and material facts relating thereto.
d. Proof of employee support that at least thirty ( 30) percent of the employees in the established appropriate unit no longer desire to be represented by the incumbent Recognized Employee Organization. Such proof shall be submitted for confirmation to the Employee Relations Officer within the time limits specified in the first paragraph of this Section.

An employee organization may, in satisfaction of the Decertification Petition requirements hereunder, file a Petition under this Section in the form of a Recognition Petition that evidences proof of employee support of at least thirty ( 30) percent and otherwise conforms to the requirements of this Section. 10-

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The EERO or designee shall initially determine whether the Petition has been filed in compliance with the applicable provisions of this Policy. If his/ her determination is in the negative, he/she shall offer to consult thereon with the representative( s) of such petitioning employees or employee organization, and, if such determination thereafter remains unchanged, shall return such Petition to the employees or employee organization with a statement of the reasons therefore in writing. If the determination of the EERO or designee is in the affirmative, he/she shall give written notice of such Decertification or Recognition Petition to the incumbent Recognized Employee Organization and to unit employees.

The EERO or designee shall thereupon arrange for a secret ballot election to be held on or about fifteen ( 15) days after such notice to determine the wishes of unit employees as to the question of Decertification, and, if a Recognition Petition was duly filed hereunder, the question of representation.

F) Procedure for Modification of Established Appropriate Units Requests by individual employees or employee organizations for modifications of established appropriate units may be considered by the EERO or designee only during the periods specified in this Section. Such requests shall be submitted in the form of a Recognition Petition, under the requirements set forth in this Section and shall contain a complete statement of all relevant facts and citations in support of the proposed modified unit in terms of the policies and standards set forth in this Policy. The EERO or designee shall approve or disapprove request which shall be final.

The Personnel Director may, on his/her own authority, propose that an established unit be modified. The Personnel Director shall give written notice of the proposed modification( s) to each affected employee organization and shall provide the opportunity to meet and consult on the proposed modification( s). The decision of the Personnel Director on such modifications may be appealed to the EERO or designee for final determination within ten ( 10) days of the notice of decision by the Personnel Director.

If a unit is modified pursuant to a decisionby the PersonnelDirector or by a request by individual employees, employee organizations may thereafter file Recognition Petitions, pursuant to the policies established in this section, seeking to become the Recognized Employee Organization for such appropriately modified unit or units.

SECTION 11 IMPASSE PROCEDURES
If the meet and confer process has reached impasse as defined in this Resolution, either party may initiate an impasse proceeding by filing with the EERO and the other party a written request for an impasse proceeding, together with a statement of its position on all disputed issues. An impasse resolution proceeding with a mediator assigned from California State Conciliation Service shall then be scheduled by the EERO or designee.

All mediation proceedings shall be private. The mediator shall make no public recommendation, nor take any public position at any time concerning the issues during the mediation process.
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If the impasse is not resolved by mediation within a reasonable time as determined by the City Council, the City Council may take such action regarding the impasse as it in its discretion deems appropriate in the public interest. Any action by the City Council to resolve the impasse shall be final and binding.

The cost for the services of a mediator utilized by the parties, and other mutually incurred costsof mediation, shall be borne equally by the City and Exclusively Recognized Employee Organization.

SECTION 12 CONSTRUCTION
This Resolution shall be administered and construed as follows:
a. Nothing in this Resolution shall be construed to deny to any person, employee, organization, the City, or any authorized officer, body or other representative of the City, the rights, powers and authority granted by Federal or State law or City Municipal Code provisions.
b. This Resolution shall be interpreted so as to carry out its purpose as set forth in Section 2.
c. Nothing in this Resolution shall be construed as making the provisions of California Labor Code Section 923 applicable to City employees or employee organizations, or of giving employees or employee organizations the right to participate in, support, cooperate or encourage, directly or indirectly, any strike, sick- out or other total or partial stoppage or slowdown of work or a job action of any kind whatsoever during an employee's on duty work hours.

In the event employees engage in unlawful job action, they shall subject themselves to discipline up to and including termination, and may be replaced and employee organizations may thereby forfeit rights accordedthem under City law or contract.

SECTION 13 RULES AND REGULATIONS
The City Council may adopt such Rules and Regulations necessary or convenient to implement the provisions of this Policy and Chapter 10, Division 4, Title 1 of the Government Code of the State of California ( Sections 3500, et sep.). Proposed amendments to this resolution are subject to meet and consult.

SECTION 14 SEPARABILITY
If any provision of this Policy, or the application of such provision to any persons or circumstances, shall be held invalid, the remainder of this Policy, or the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby.
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National City City CouncilSeptember 1, 2026

National City City Council
September 1, 2026