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

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Proposed Fiscal Year 2025-26 City Budget, Changes to the City’s Basic Classification and Compensation Plan, Changes to the Executive Management Team’s Classification and Compensation Plan, Uniform Schedule of Miscellaneous Fees, and the Seven-Year Capital Improvement Program June 3, 2025 Page 5 costs are expected to rise faster than revenues due to factors such as negotiated salary and benefit increases for City staff, increases to construction costs, and the Orange County Fire Authority (OCFA) contract for fire services that can increase by up to 4.5% annually. In addition, CalPERS investment performance has frequently fallen short of expectations, leading to increased pension debt costs. A significant drop in revenue is also expected in 2029, when the Measure X sales tax rate is scheduled to decrease. Charter Requirement for Public Recreation Program Spending Santa Ana Charter Section 607 requires City Council to adopt a budget that provides the support of public recreation programs of at least the equivalent of six (6) cents on each one-hundred dollars ($100) of the assessed value of taxable property in the City on the legal assessment date for the previous fiscal year. The net taxable value of property for FY2024-25 was $35,876,022,849. When applying the calculation required by the Charter, the required expenditure budget for public recreation programs is $21,525,614. The proposed General Fund budget includes $15,249,460 for the Parks, Recreation, and Community Services Agency, $17,695,430 for the maintenance of parks and facilities, and $3,267,620 for youth services funded by Cannabis tax revenue. The proposed budget exceeds the Charter requirement by $14,686,896 or 68%. Citywide Budget The proposed FY 2025-26 Citywide Budget includes the General Fund as well as all other City funds, including those with internal and external restrictions. A summary of the Citywide Budget is provided below. The negative net activity reflects a proposed use of accumulated fund balances for one- time, non-recurring projects. Exhibit 1 provides detailed budget information for each individual fund.