Item 25 - Public Hearing - Fiscal Year 2025-26 City Budget

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Franchise Fees are payments made by service providers to the City of Santa Ana for the use of public streets and rights-of-way. The City collects franchise fees from four primary sources: 1.Refuse (Waste Hauler) 2.Electric Utility 3.Cable Television 4.Gas Utility The City’s waste hauler franchise generates the largest share of franchise fee revenue and accounts for the majority of increases over the past ten years. For Fiscal Year 2025-26, total franchise fee revenue is projected at $13.60 million, reflecting a $1.23 million increase over the FY24-25 estimate. Under the terms of the City’s agreement with the current waste hauler, the City receives the greater of $8 million annually or 17.9% of gross receipts for directly billed customers. For FY25-26, gross receipts are projected at $10 million, an increase of $1 million from the prior year. Southern California Edison (SCE) is the City’s second-largest franchise fee contributor. SCE remits 2% of gross receipts from franchise-related activities, or no less than 0.5% of gross receipts from electricity sales within City limits, plus a Direct Access Municipal Charge. FY25-26 revenue from SCE is projected at $1.9 million, a $100,000 increase over FY24-25. Local cable television franchise licenses are now issued by the California Public Utilities Commission (CPUC). The City receives up to 5% of gross receipts from cable providers operating within its jurisdiction. Cable TV franchise fee revenue is projected to remain flat at $1 million in FY25-26. Southern California Gas Company pays the City based on the higher of 2% of gross receipts from franchise operations or 1% of gross receipts from gas sales within City boundaries. FY25-26 gas utility franchise fee revenue is projected at $700,000, reflecting a $125,000 increase from the prior fiscal year. *This chart excludes the $6.6 million transferred from the Refuse Enterprise Fund to the General Fund in FY19-20. The transfer represented General Fund revenue that had accumulated over time in the Enterprise Fund. 8