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Finance and Management Services <br /> www.santa-ana.org/finance <br /> Item # 30 <br /> City of Santa Ana <br /> 20 Civic Center Plaza, Santa Ana, CA 92701 <br /> Staff Report <br /> May 5, 2026 <br /> TOPIC: Fiscal Year 2026-27 Budget Work Study Session <br /> AGENDA TITLE <br /> Fiscal Year 2026-27 Budget Work Study Session <br /> RECOMMENDED ACTION <br /> Discuss and provide direction to staff. <br /> GOVERNMENT CODE 484308 APPLIES: No <br /> DISCUSSION <br /> The City Council provided Early Direction on April 7; staff has since updated the draft <br /> budget based on City Council consensus. This report includes additional information on <br /> some of the funding options and strategies discussed. <br /> The City's two largest General Fund revenue sources are property tax and sales tax, <br /> which together account for 57% of resources. Roughly 16% of property in Santa Ana <br /> pays no property tax due to government or nonprofit ownership, excluding City-owned <br /> property and the public right-of-way. The median household income in Santa Ana is <br /> $93,000, yet the cost of living is 60% above the national average. When the economy <br /> softens or takes a downturn, our sales tax revenue is immediately impacted. <br /> The City can raise revenue through voter-approved taxes and recover costs for individual <br /> services. With significant effort, the City can also support a thriving business community <br /> that generates sales tax revenue and local jobs, but these relationships and projects often <br /> take years to bear fruit. Thus, the City should maximize it's ability to generate income <br /> through the use of City property, which currently accounts for only 3.5% of our General <br /> Fund revenue. This includes park facility rentals and investment earnings on idle cash, <br /> both of which are subject to market limitations. <br /> Within these revenue realities, the City operates in a heavily regulated sphere with high <br /> costs to provide fast, effective public safety; parks and related programs; libraries; events; <br /> and discretionary programs that address homelessness and support immigration and the <br /> arts. The City is subject to legal requirements and has entered into contracts, both of <br /> which prohibit cost reductions in many areas throughout the budget. In addition, the City <br />