Item 30 - Fiscal Year 2026-27 Budget Work Study Session

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Fiscal Year 2026-27 Budget Work Study Session May 5, 2026 Page 3 agreed that its members would take overtime as paid time off to reduce overtime expenses and eliminate LAPD civilian layoffs. On April 13, the San Diego Union-Tribune reported that the City of San Diego had tentatively agreed to one-week furloughs for more than 5,000 white-collar workers. On April 6, multiple news outlets reported that the City of San Francisco issued 127 layoff notices, expects to defund another 500 jobs in the coming months, and is discussing employee furloughs. If Santa Ana is unable to employ additional cost-saving or revenue-raising strategies for FY26-27, the City Council may need to discuss employee furloughs to avoid layoffs. One 9-hour furlough day from represented employees saves $489,172; this excludes Police Officers, Correctional Officers, and Police Dispatch. At a minimum, the staff presentation during this agenda item is expected to include the following: • Summary of community outreach and priorities • Revenue trends and estimates for significant sources • Summary of the proposed Cannabis Public Benefit Fund spending plan • Update of the current state of the draft General Fund budget, along with a reconciliation from prior estimates and a list of potential balancing measures • Discussion of the recommended $3 million allocation of one-time General Fund money for the City Council to select from a menu of potential uses One-Time General Fund Resources As presented during Early Direction, the City identified approximately$11.6 million in one- time General Fund resources, of which $3.0 million is specifically allocated for City Council direction. Approximately $2.2 million of one-time funds has been shifted to the General Fund reserve to maintain the 18% reserve requirement due to higher recurring revenues in FY 2026-27, leaving $9.4 million for one-time spending. During the Early Direction discussion, City Council reviewed staff's proposed uses of these one-time funds and generally supported prioritizing investments that address risk, maintain infrastructure, and support operational stability. Consistent with that discussion, Exhibit 2 provides a menu of potential one-time uses for the remaining $3.0 million for City Council consideration. A summary of the recommended one-time uses to be included in the Proposed Budget, subject to City Council direction, is provided below: Category Proposed Use Estimated Amount Additional contributions to Liability/Risk Management Workers' Compensation or $2,000,000 General Liability reserves One-time repairs and Infrastructure / Facilities improvements to City-owned $2,000,000 facilities