75A - BUDGET FY 2010- 2011 - EXHIBIT

Home Browse Search

While the nation waits for signs that the economy is rebounding, all indications are that the decline in the economy has finally leveled off. However, there are events that are occurring that could derail any speedy recovery or relapse into a lingering recession. Primarily the current European debt crisis has the potential to negatively impact the US financial markets and thrust the US economy into another downward spiral. On the home front, the most critical sector that could have a major impact on the nation's economic recovery is commercial real estate. Many institutions are beginning to feel the effects of commercial real estate loan failures. It is estimated that the largest commercial real estate loan losses will occur in 2011 and could be as high as $200 -$300 billion. How the financial markets react to these events will be important for a sustained recovery. Even with these events looming on the horizon, there are some mixed signals that could mark the beginning of a slow recovery. Although commercial real estate poses great concern, residential real estate has shown some indication that the worse is behind us. Unfortunately, the City will continue to feel the effects of lower property values for a few years. In addition, unemployment has eased but is still at unprecedented high levels. T he national average remains at 9.6 %, California at 12.6 %, while Santa Ana is estimated at 14.8 %. Obviously, these rates have a direct impact on consumer spending and on the City's sales tax revenue. Overall, we anticipate a very slow recovery and growth in our revenue. In the meantime, ensuring long -term financial stability for Santa Ana will require the courage to significantly reduce expenditures. In order to provide quality City programs and services so they are financially sustainable in the future, the City must look to reinvent itself through the elimination of redundancies, by consolidating programs, contracting out, and seeking assistance from the various bargaining groups on wages and benefits. Budget Overview The total estimated revenue for all city funds for FY 2010 -2011 is $446,053,320. Of this amount $84.9 million represents the water, sewer, sanitation and refuse funds; $33.6 million comes from grants and other special revenues for restrictive programs; $28.7 million from grants for capital projects; $101.7 million comes from redevelopment and housing assistance; and $197.1 million represents the General Fund. Total budgeted appropriations for all city funds for 2010 -2011 is $472,518,919 whic In is a decrease of 16.7% (or $94.6M) when compared to the prior year budget. Fiscal year 2010 -2011 budget includes a capital improvement budget of $43.0 million; a water, sewer, sanitation and refuse budget of $92.3 million; redevelopment and housing budget of $100.6 million; special revenues and grants of $39.5 million; and a General Fund budget of $197.1 million. The General Fund budget supports the functions most commonly associated with city government: police, fire, recreation, library, planning and building, street maintenance, and general city administration. These services are being provided to an increasing population. According to the State Department of Finance, Santa Ana's population in January 2010 was 357,754 which is over a 50 percent increase over the past 20+ years. The General Fund's four largest revenue sources comprise 56.4% of total General Fund revenues. Those revenue -3-