CITY BUDGET BINDER FY 2018-2019_75A-1

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City of Santa Ana - Financial Planning, Policies and Guidelines LONG-TERM FINANCIAL PLANNING Key elements in providing long term stability include; partnering with the various bargaining units to share the burden on pension and medical costs, implementation of innovation and efficiency measures, refinancing of existing debt to save millions in debt service costs, adjusting rates to recover millions in jail cost savings, and partnering with the Orange County Fire Authority for the delivery of Fire and Emergency Medical services. During the budget process for FY 2012-13, the City committed to establishing a fundamental strategy of balancing budgets by adopting a formal Budget and Financial Policy (Policy), which provides guidelines for a balanced budget approach, use of one-time funds, and appropriate reserve levels as recommended by the Government Finance Officers Association (GFOA). Since its approval, the City has achieved a 20% reserve level and has established an Economic Uncertainty account. However, on May 2, 2017, the City forecasted a structural deficit for both FY 17-18 and FY 18-19. In order to address the deficit and allow for an opportunity to develop and implement strategies, staff recommended changes in the fiscal policy to allow the use of one-time revenue to balance the budget. In addition, the Policy maintains base elements of providing a balanced budget including that ongoing revenues should match ongoing expenditures, as well as that one time funds may only be used for one-time non-recurring expenditures or term specific projects or programs. The revised Policy addresses times that the City may encounter structural challenges. In addition, the Policy will now include terminology and define one-time funds such as the ending operating balance, operating reserve account, and the unallocated amount. The Policy was approved on June 2017.