HomeMy WebLinkAboutItem 38 - Fiscal Year 2021-2022 General Fund - First Quarter Budget Update Finance and Management Services
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Item # 38
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
December 21, 2021
TOPIC: Fiscal Year 2021-2022 General Fund - First Quarter Budget Update
AGENDA TITLE:
Fiscal Year 2021-2022 General Fund - First Quarter Budget Update
RECOMMENDED ACTION
1. Receive and file the fiscal year 2021-2022 General Fund - First Quarter Budget
Update, including the increased sales tax and property tax estimates (Exhibit
1).
2. Amend the fiscal year 2021-2022 budget to add one position funded by the
Water enterprise within the Finance and Management Services Agency
(Exhibit 2) and approve a $42,720 Appropriation Adjustment to fund the
position for the remainder of FY21-22. (Requires five affirmative votes)
3. Approve one-time General Fund Appropriation Adjustments totaling
$24,655,000 described in detail below for fiscal year 2021-2022. (Requires five
affirmative votes)
4. Approve recurring General Fund Appropriation Adjustments totaling
$3,066,900 described in detail below for fiscal year 2021-2022, which includes
amending the FY21-22 budget to add one position to the Community
Development Agency (Exhibit 2) and funding for two positions in the City
Clerk’s Office and the City Attorney’s Office. (Requires five affirmative votes)
5. Adopt a resolution amending the current Fiscal Year 2021-2022 Annual Budget
to add one Full Time Position in the Finance and Management Services Agency
and one Full Time Position in the Community Development Agency.
EXECUTIVE SUMMARY
The first quarter budget update normally covers July through September. At the end of
September, staff received actual sales tax data through June 2021 and had reason to
believe FY21-22 sales tax revenue would be significantly more than the budget estimate.
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December 21, 2021
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In October, with the closing of the FY20-21 books, it became apparent the General Fund
experienced significant positive variances, yet the audit was not yet complete. Therefore,
staff postponed the first quarter budget report until more data was available to provide
complete information to the City Council.
The June 30, 2021 General Fund balance was $109.4 million, which is $42.3 million in
excess of the 18% Reserve policy. The $42.3 million is a one-time resource derived from
$19.5 million additional sales tax revenue during FY20-21 (discussed further below) and
controlled spending across all departments through the pandemic.
This one-time resource is a unique opportunity to address issues underfunded in previous
years. As reported previously, there are significant budget challenges related to the train
station enterprise, the health of internal service funds, and deferred maintenance of City
facilities. The following recommended spending plan would address many of those
challenges and leave $16.4 million of one-time funding for other priorities identified by
City Council.
1. Maintain the 18% General Fund Reserve with $1.3 million of the additional
estimated sales tax revenue.
2. Appropriate the following amounts totaling $24.7 million.
Contribution to the train station enterprise to cure the June 30, 2021
negative fund balance of $1,807,208 plus further depletion of the
fund with the FY21-22 budget.
$1,900,000
Contribution to the risk management funds to provide for the FY21-
22 insurance rates reported to City Council on June 15, 2021.
$1,500,000
Contribution to the internal service fund accounting for employee
benefits to cure the June 30, 2021 negative fund balance of
$1,227,916 plus the further depletion of the fund with the FY21-22
budget.
$3,400,000
Contribution to the internal service fund accounting for building
maintenance due to aging facilities and increased demand for
upkeep.
$2,500,000
Contribution to the internal service fund accounting for fleet
maintenance to avoid the estimated negative fund balance at June
30, 2022, as shown on page B-21 of the budget document.
$1,500,000
Rehab and repurpose the Cypress Fire Station. Based on further
City Council direction, staff can propose a specific project later this
fiscal year.
$1,000,000
Ross Annex improvements to replace an industrial sized air
conditioning unit, second-floor aged carpets and workstations, and
reorganize workspace locations to improve efficiency and
collaboration. The proposed appropriation will optimize efficiency
$1,450,000
Receive and file the FY 2021-2022 General Fund - First Quarter Budget Update
December 21, 2021
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and economies of scale with inter-related City Hall improvement
projects already in the City’s budget.
Deferred maintenance of the train station, including exterior stucco,
painting inside and out, wall tile and coping, fountain repair, parking
lot resurfacing, air conditioning upgrades, restroom remodels, and
other plumbing repairs.
$5,405,000
An economic development project in the South Main Corridor to
provide restaurant incubation and Public Art for the South Main
Corridor revitalization.
$3,000,000
Deferred park maintenance projects.$1,500,000
Remove underground storage tanks at City-owned fire stations 71,
74 and 75.
$1,050,000
Purchase a mini-sweeper for protected bike lanes.$150,000
Memorial to Lives Lost to COVID-19.$200,000
Eliminate shared City Council offices.$100,000
Total Proposed Appropriations – One-Time $24,655,000
To protect service levels, the FY21-22 budget included a $12.6 million use of the General
Fund balance available for spending (a one-time resource). New information related to
sales tax and property tax supports increasing FY21-22 revenue estimates by $16.6
million, resulting in $4 million of FY21-22 revenue available to appropriate ongoing costs.
With the increase to the revenue estimate, the City no longer has a deficit budget for
FY21-22. The following spending plan would address issues raised by the City Council
and partially restore frozen employee positions to improve service levels to the public,
while maintaining a balanced budget.
Recurring Remainder of
FY21-22
Future Annual
Cost
Sidewalk improvement program $500,000 $1,000,000
Traffic calming program $500,000 $1,000,000
Alley improvement program $750,000 $1,500,000
Graffiti removal program enhancements for
the areas adjacent to public pathways in the
railroad corridors
$300,000 $600,000
Protected Bike Lane sweeping program $75,000 $150,000
Contracted administrative support for City
Council (annual allocation of $60,000 per
Council Member)
$210,000 $420,000
Juneteenth Celebration 2022 (full cost
necessary for FY21-22)
$50,000 $50,000
Increase the City Events budget $50,000 $100,000
Receive and file the FY 2021-2022 General Fund - First Quarter Budget Update
December 21, 2021
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Partially restore funding for frozen employee
positions. The estimated value of the FY21-22
hiring freeze is $2,911,300.
$400,000 $800,000
Funding for one full-time Economic
Development Specialist I position to the
Community Development Agency
$57,840 $115,680
Funding for one full-time Records Manager
position to the City Clerk’s Office
$79,980 $159,960
Funding for one full-time Employment Staff
Attorney position to the City Attorney’s Office
$94,080 $188,160
Total Proposed Appropriations – Recurring $3,066,900 $6,083,800
DISCUSSION
The First Quarter Update covers activity posted to the general ledger during July 2021
through September 2021 and the vacancy report for funded staff positions. First quarter
revenue represents less than three months of receipts in many cases due to the lag time
for remittance. Examples include Sales Tax, Hotel Visitors’ Tax, and Cannabis Tax.
Therefore, when analyzing the revenue as of September 30, 2021, it is normal to see
10%-15% revenue received to date. Whereas expenditures have much higher activity in
the first quarter due to annual payments for insurance, the one-month advance for fire
services, and the fact that 59% of the budget is for employee compensation paid twice
per month.
This update focuses on the General Fund, as it is the primary operating fund of the City.
Only notable items for other funds are included in this report.
General Fund Revenue
During the first quarter FY21-22, the City received approximately $36.8 million in General
Fund revenues, which is 10.8% of the annual estimate.
Lookback to FY20-21 Sales Tax (Bradley-Burns and Measure X): Actual FY20-21
sales tax exceeded the estimates reported in February 2021 by a total of $19.5 million.
FY20-21 Estimate FY20-21 Actual Positive Variance
Bradley-Burns $49,198,300 $54,999,505 $5,801,205
Measure X 61,432,700 75,094,336 13,661,636
Total $110,631,000 $130,093,841 $19,462,841
The City’s sales tax consultant receives detailed data from the state, analyzes it, and
provides estimates of future revenue. The pandemic and the Wayfair decision for out-of-
state online vendors to collect California sales tax created an unprecedented
environment, and the consultant understandably provided conservative estimates. Santa
Ana is not alone, as many California cities experienced favorable sales tax results,
including the state of California.
Receive and file the FY 2021-2022 General Fund - First Quarter Budget Update
December 21, 2021
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FY21-22 Sales Tax (Bradley-Burns and Measure X): Moving forward, the sales tax
consultant increased the FY21-22 revenue estimates as follows.
FY21-22 Original FY21-22 Revised Increase
Bradley-Burns $53,650,000 $57,600,000 $3,950,000
Measure X 65,000,000 77,250,000 12,250,000
Total $118,650,000 $134,850,000 $16,200,000
A quarterly report on Sales Tax and Business Activity is provided in Exhibit 3.
$12.6
$29.5 $28.4 $29.6
$26.1 $25.5
$31.3 $32.1
$30.2
$34.1 $32.6
Bradley-Burns Measure X TrendlineQuarterly Sales Tax Revenue
(in Millions)
Property Tax, Property Tax in lieu of VLF & Santa Ana Residual Property Tax: Total
Property Tax collected for the first quarter is $0.7 million. Approximately two-thirds of
Property Tax is collected during the months of December and April. Furthermore, the first
payment (50%) of Property Tax in lieu of VLF is received in January and the second
payment in May. Based on assessed value information available from the county after
adoption of the City’s budget, the City’s property tax consultant has provided an updated
revenue estimate that is $380,000 more than the estimate included in the budget.
Hotel Visitors’ Tax (HVT): HVT collected for the first quarter is approximately $1.5
million, which is nearly double the amount of the prior year’s first quarter results of $0.8
million, but still $0.6 million below pre-pandemic levels in the same quarter of FY 19-20.
The global pandemic has continued to affect hotels’ ability to accommodate guest
services such as banquets, conferences and other meeting events; however, there are
signs for recovery. Staff expects HVT will increase after the pandemic; and after new
Receive and file the FY 2021-2022 General Fund - First Quarter Budget Update
December 21, 2021
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hotels continue through the development process and open for business, such as the
Tapestry by Hilton. Staff will continue to monitor activity over the first six months and may
adjust to increase revenue estimates with the Mid-Year Budget Report as needed.
Business License Tax (BLT): The BLT revenue of $1.4 million collected in the first
quarter exceeded last year’s revenues of $1.0 million. The revenue is on track to meet
the $12.2 million annual estimate. With the hiring of additional staff, our revenue division
has been able to proactively improve collections, including making payment
arrangements with small businesses suffering during the pandemic. Peak business
license periods occur during the third and fourth quarters of the fiscal year, when
approximately 80% of annual BLT is collected.
Utility Users Tax (UUT): The UUT is a 5.5% tax on the following utilities: electric, gas,
water, and telecommunications. UUT collected for the first quarter is nearly $4.4 million,
which exceeded last year’s revenues of $4.0 million. Currently, the electric, gas and water
utilities are trending above last year’s first quarter results. However, the
telecommunications utility users’ tax has been showing a continual downward trend for
the past few years and is nearly $0.1 million less than the prior year. This appears to be
primarily due to service providers readjusting their apportionment of sales from taxable to
nontaxable services.
Permits and Plan Check: Current permit and plan check revenues collected total $3.8
million. Plan check revenues in the first quarter surpassed annual estimates by nearly
$0.1 million or 3.4%, while permit revenues of $1.1 million are nearly doubled the amount
of last year’s first quarter results of $0.6 million. The uptick in planning and building
activity is due to a one-time spike in plan check activity. Staff will continue to monitor
development activity and related revenues and may revise revenue estimates with the
Mid-Year Budget Report.
General Fund Expenditures for FY 2021-2022
Overall, General Fund expenditures are at 22.6% of budget. Each department is within
the expected range of spending for the first quarter. It should be noted the first quarter
activity includes four monthly payments for fire services, as the City pays one month in
advance.
OTHER CITY FUNDS
Cannabis Public Benefit Fund
The Cannabis Public Benefit Fund provides dedicated funding for youth programs
implemented through the Parks, Recreation and Community Service Agency and the
Library. Examples of programs implemented during the first quarter include:
The Book/Tech Mobile program engages the community where they are by placing
an emphasis on technology, robotics and STEM learning.
Receive and file the FY 2021-2022 General Fund - First Quarter Budget Update
December 21, 2021
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Wireless hotspots have been expanded to allow for filtered safe internet services
for the City's youth community.
Year-round aquatics program at Memorial Pool and seasonal aquatic programs for
youth to promote water safety and stay physically active.
The Youth Internship program, in partnership with the Santa Ana Youth (SAY)
Employment Program, provides a paid work experience to introduce youth into the
workforce and is a year around program.
The City Council recently received a report of FY20-21 actual expenditures in the
Cannabis Public Benefit Fund, as recommended by the Orange County Grand Jury.
Parking Enterprise
The Parking Enterprise fund was impacted by COVID-19, but as outdoor dining continues
to be an option in the downtown area and events are planned during the year, we expect
to see a slight improvement in parking revenue. However, staff may recommend a
subsidy with the FY21-22 Mid-Year Budget Report to fund ongoing parking operations.
Internal Service Funds
Internal Service Funds are used to centralize the budget and accounting for services
provided to other City departments. Examples include General Liability claims and
coverage, Employee Benefits, Building Maintenance, and Fleet Maintenance. The City
utilizes a consultant to review, validate, and develop internal charges to City departments.
The FY21-22 budget included increased charges for some of these funds; but other
charges have remained static while labor, supply and contract costs continue to increase.
As such, some of the Internal Service Funds are still troubled and in need of increased
contributions to sustain service levels.
General Liability Fund
The City’s Budget and Reserve Policy includes a target reserve equal to 80% of the
actuarial-determined loss liability. The General Liability Fund is short of this target over
the next two years by $6.4 million. Staff will work towards developing a long-term plan to
achieve target reserve levels.
Workers Compensation Liability Fund
The Workers Compensation Liability Fund is also short of the target reserve level over
the next two years by $12.9 million. Staff will work towards developing a long-term plan
to achieve target reserve levels.
Employee Benefits Fund
The pass-through charges accounted for in the Employee Benefits Fund have remained
level for many years, even though the City’s costs for employee benefits have steadily
increased. The fund has been operating at a loss, depleting the previously accumulated
fund balance. The actual fund balance at June 30, 2021 was negative $1,227,916. The
FY21-22 budget would deplete the fund balance by another $2.2 million, as shown on
page B-21 of the budget document. Recently, staff and the City’s consultant worked
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December 21, 2021
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through an updated cost allocation and internal charge methodology to be included in the
proposed FY22-23 budget. In the meantime, the fund needs a cash infusion to avoid a
negative fund balance at June 30, 2022.
Building Maintenance Fund
The City’s buildings are aged and there has been an increased demand for repairs across
all city facilities including fire stations and the City Hall complex. Over the past four years,
the fund has been operating at a loss and has continued to rely on fund balance to pay
for its operational costs. Staff expects the FY21-22 budget will deplete the fund balance.
We currently recommend a one-time infusion, with a plan to propose a rebalancing of
internal charges and costs with the FY22-23 budget.
Fleet Maintenance Fund
The Fleet Maintenance Fund provides support for the maintenance and operation of city-
owned vehicles. In three of the last four years, the fund has been operating at a loss and
has been using available fund balance to cover operations and new vehicle purchases.
The labor and supply costs have been increasing and growth of the fleet has increased
demand for routine maintenance, yet the corresponding internal charges to departments
have not increased. We currently recommend a one-time contribution, with a plan to
propose a rebalancing of internal charges and costs with the FY22-23 budget.
Full-Time Employee Position Vacancy Report
The FY 2021-22 budget included funding for 1,263 full-time positions. On October 5,
2021, the City Council approved an additional 21 positions across various departments
funded by the Revive Santa Ana program. These new positions funded in the second
quarter will be included in the Mid-Year Budget Report.
Staff recommends adding one full-time Meter Reader Collector position funded by the
Water Enterprise Fund. This area has been experiencing staffing shortages for a number
of years, impacting timely reads and rereads of water meters used for water billing.
Furthermore, staff expects the water fund to receive a significant infusion of funds from
the state in January for past-due water accounts. The requested funding for the position
is $42,720 to cover the remainder of the fiscal year, with the full annual amount to be
included in the FY22-23 budget.
Staff also recommends adding one full-time Economic Development Specialist I position
in the Community Development Agency to support the administration of new economic
development and resident assistance programs. The requested funding for the position
is $57,840 to cover the remainder of the fiscal year, with the full annual amount to be
included in the FY22-23 budget.
Additionally, staff recommends adding one full-time Records Manager position in the City
Clerk’s Office to manage the increased volume of public records request. Human
Resources will provide a final recommendation of appropriate job classification which will
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December 21, 2021
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be included in the Mid-Year Report. The requested funding for the position is estimated
at $79,980 for the remainder of the fiscal year with the full annual amount to be included
in the FY 22-23 budget.
Furthermore, staff recommends adding one full-time employment staff attorney position
in the City Attorney’s Office to provide labor relations support for investigations and
contract negotiations to provide cost savings. The utilization of in-house staff will
minimize the cost of using outside contract attorneys. Human Resources will provide a
final recommendation of appropriate job classification which will be included in the Mid-
Year Report. The requested funding for the position is estimated at $94,080 for the
remainder of the fiscal year with the full annual amount to be included in the FY 22-23
budget.
As of September 30, there is a total of 154 total vacancies (Exhibit 1), of which, 124 are
funded vacant positions and 30 are subject to the hiring freeze. Positions subject to the
hiring freeze provided $2.9 million in savings in the current year budget. At this time, staff
proposes to release $0.8 million of the hiring freezes to improve service to the public, with
an estimated FY21-22 cost of $0.4 million for the remainder of the year.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
On December 9, the City finalized the FY20-21 financial statements and the independent
auditor issued a “clean” opinion. A complete report of the audited financial statements
is scheduled for presentation to City Council on January 18, 2022. A summary of the
June 30, 2021 ending General Fund balance follows.
Amounts to be spent in FY21-22 for continued appropriations and
encumbrances
$4,042,487
18% Policy Reserve 63,083,968
Available for one-time spending 42,289,528
Total General Fund Balance at June 30, 2021 $109,415,983
If City Council approves the staff recommendation, the 18% Policy Reserve will increase
to an estimated $64,354,356 at June 30, 2022 and the remaining available balance for
one-time spending will be $16,364,140.
A summary of the FY21-22 General Fund budget updated with new sales tax and property
tax estimates follows.
Recurring
FY21-22 Budget FY21-22
Updated
Revenue $340,944,200 $357,524,200
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December 21, 2021
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Expenditures (328,791,570)(328,791,570)
Net Transfers to
Other Funds
(24,703,590)(24,703,590)
Net Activity $(12,550,960)$4,029,040
If City Council approves the staff recommendation, FY21-22 recurring expenditures will
increase by $3,066,900 (with an annualized estimate of $6,083,800 for FY22-23).
Staff recommends the following appropriation adjustments.
Adjustments for General Fund contributions to other funds:
Fiscal
Year
Accounting Unit -
Account #
Fund
Description
Accounting Unit,
Account
Description
Amount
FY 21-22 01106019-68000-XX General Fund Inter-Fund Transfers
Service
Enhancement,
Transfer Out
$10,800,000
FY 21-22 06717002-59000-11 SARTC
Operations
Transfer In to
Train Station
Enterprise Fund
$1,900,000
FY 21-22 08X09002-59000-11 General
Liability /
Workers’
Compensation
Transfer In to
General Liability /
Workers’
Compensation Fund
$1,500,000
FY 21-22 08109002-59000-11 Benefits Fund Transfer In to
Employee Benefits
Fund
$3,400,000
FY 21-22 07317002-59000-11 Building
Maintenance
Transfer In to
Building
Maintenance Fund
$2,500,000
FY 21-22 07517002-59000-11 Fleet
Maintenance
Transfer In to Fleet
Maintenance Fund
$1,500,000
Adjustments for one-time project costs:
Fiscal
Year
Accounting Unit-
Account #
Fund
Description
Accounting Unit,
Account Description
Amount
FY 21-22 011XX017-66220 General Fund PWA / PRCSA Service
Enhancement,
$1,450,000
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December 21, 2021
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Improvements Other
Than Building
FY 21-22 01117650-6XXXX General Fund SARTC Maintenance
Service Enhancement
(Deferred Maintenance)
$5,405,000
FY 21-22 01117017-6XXXX General Fund PWA Service
Enhancement
(Repurpose Cypress Fire
Station)
$1,000,000
FY 21-22 01118810-62300 General Fund Economic Development
Service Enhancement (S.
Main Corridor Restaurant
Incubation)
$2,000,000
FY21-22 01117017-62300 General Fund PWA Service
Enhancement (S. Main
Corridor Public Art)
$1,000,000
FY 21-22 01113250-6XXXX General Fund Park Facilities Service
Enhancement (Deferred
Park Maintenance)
$1,500,000
FY21-22 01115330-62300 General Fund Fire Suppression / EMS
(Fire Stations – Removal
of Underground Storage
Tanks)
$1,050,000
FY21-22 01117017-66400 General Fund PWA Service
Enhancement (Mini
Sweeper for Protected
Bike Lanes)
$150,000
FY 21-22 01118810-62300 General Fund Economic Development
Service Enhancement
(Memorial to Lives Lost)
$200,000
FY 21-22 01104012-66210 General Fund City Council Service
Enhancement, Office
Space Improvement
$100,000
Adjustments for ongoing/recurring project costs:
Fiscal
Year
Accounting Unit-
Account #
Fund
Description
Accounting Unit, Account
Description
Amount
FY 21-22 06017645-61XXX Water Fund Water Admin / Engineering
(Meter Reader Collector)
$42,720
FY 21-22 01118810-61XXX General Fund Economic Development
Service Enhancement
(Economic Dev. Spec. I)
$57,840
FY 21-22 01107017-61XXX General Fund COTC Service Enhancement
(Records Manager)
$79,980
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December 21, 2021
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FY 21-22 01108017-61XXX General Fund CAO Service Enhancement
(Employment Staff Attorney)
$94,080
FY 21-22 01117626-62300 General Fund PWA Sidewalks Service
Enhancement (Sidewalk
Improvements)
$500,000
FY 21-22 01117620-62300 General Fund PWA Traffic / Transportation
Service Enhancement (Traffic
Calming)
$500,000
FY21-22 01117017-62300 General Fund PWA Service Enhancement
(Alley Improvements)
$750,000
FY 21-22 01117642-62300 General Fund PWA Graffiti Abatement
Service Enhancement (Graffiti
Removal)
$300,000
FY21-22 01117017-62300 General Fund PWA Service Enhancement
(Protected Bike Lane
Sweeping)
$75,000
FY 21-22 01104012-62302 General Fund City Council Service
Enhancement, Contract
Vendor Personnel Services
$210,000
FY 21-22 01113017-62300 General Fund PRCSA Service
Enhancement (Juneteenth
Celebration 2022)
$50,000
FY 21-22 01113017-62300 General Fund PRCSA Service
Enhancement (City Events)
$50,000
FY 21-22 Various-61XXX General Fund Various (Partially Restore
Frozen Positions)
$400,000
Adjustments for increases to revenue estimates:
Fiscal
Year
Accounting
Unit-Account #
Fund
Description
Accounting Unit,
Account Description
Amount
FY 21-22 01102002-50020 General Fund Sales Tax - Bradley-Burns $3,950,000
FY 21-22 01102002-50022 General Fund Sales Tax - Measure X $12,250,000
FY 21-22 01102002-50011 General Fund Property Tax $380,000
EXHIBITS
1. Fiscal Year 2021-2022 General Fund - First Quarter Budget Update
2. Personnel Resolution
3. Quarterly Report on Sales Tax and Business Activity
Submitted By: Kathryn Downs, FMSA Executive Director
Approved By: Kristine Ridge, City Manager
City Council Meeting
December 21, 2021
Fiscal Year
2021-2022
First Quarter
Budget Update
1
EXHIBIT 1
AGENDA
F i r s t Q u a r t e r G e n e r a l F u n d R e v e n u e s
F i r s t Q u a r t e r G e n e r a l F u n d E x p e n d i t u r e s
V a c a n c y R e p o r t a s o f S e p t e m b e r 3 0 , 2 0 2 1
2
G e n e r a l F u n d O n e -T i m e F u n d i n g
General Fund General Fund
General Fund Available
One-Time Funding
3
FY 2020-21
Carryforward to FY 2021-22 4,042,487
Operating Reserve 18%63,083,968
Available for One-Time Spending 42,289,528
Total Fund Balance 6/30/2021 $109,415,983
FY 2021-22
Available for One-Time Spending $42,289,528
One-Time Proposed Appropriations
Net Increase to Operating Reserve
(24,655,000)
$16,364,140Total Est. Available One-Time Funding
(1,270,388)
1st Quarter General Fund Revenues
4
1st Quarter
Other Key General Fund Revenues
5
Bradley BurnsFY 2020-21
Amended Budget
Actuals
Positive Variance
Sales Tax
Bradley BurnsFY 2021-22
Adopted Budget
Updated Estimate
Increase
$53,650,000
$49,198,300
54,999,505
57,600,000
$3,950,000
$5,801,205
6
Measure X
Measure X
$65,000,000
$61,432,700
75,094,336
77,250,000
$12,250,000
$13,661,636
7
1st Quarter General Fund Expenditures
8
Vacancy Report as of September 30
9
City Council Meeting
December 21, 2021
Fiscal Year
2021-2022
First Quarter
Budget Update
1
EXHIBIT 1
AGENDA
F i r s t Q u a r t e r G e n e r a l F u n d R e v e n u e s
F i r s t Q u a r t e r G e n e r a l F u n d E x p e n d i t u r e s
V a c a n c y R e p o r t a s o f S e p t e m b e r 3 0 , 2 0 2 1
2
G e n e r a l F u n d P e r f o r m a n c e
General Fund Performance
F Y 2 0 -2 1 S a l e s T a x a n d B u s i n e s s T a x p e r f o r m e d b e t t e r t h a n a n t i c i p a t e d
Parks and Libraries were not at full service
Staff vacancies remained vacant
Pandemic priorities funded by CARES supplanted regular operations
Departments were more careful and controlled spending during pandemic uncertainty
F Y 2 0 -2 1 E x p e n d i t u r e S a v i n g s d u r i n g t h e P a n d e m i c
T h e u p d a t e d S a l e s T a x e s t i m a t e f o r F Y 2 1 -2 2 m e a n s t h e C i t y d o e s n o t
n e e d t o u s e G e n e r a l F u n d b a l a n c e f o r t h e F Y 2 1 -2 2 o p e r a t i n g b u d g e t
F i n a l R e s u l t : T h e F Y 2 1 -2 2 b u d g e t i s b a l a n c e d , a n d t h e G e n e r a l F u n d
h a s $4 2 m i l l i o n a v a i l a b l e f o r o n e -t i m e s p e n d i n g
3
General Fund General Fund
General Fund One-Time Availability
4
FY 2020-21
Carryforward to FY 2021-22 4,042,487
Operating Reserve 18%63,083,968
Available for One-Time Spending 42,289,528
Total Fund Balance 6/30/2021 $109,415,983
FY 2021-22
Available for One-Time Spending $42,289,528
One-Time Proposed Appropriations
Net Increase to Operating Reserve
(24,655,000)
$16,364,140Total Est. Available One-Time Funding
(1,270,388)
1st Quarter General Fund Revenues
5
1st Quarter
Other Key General Fund Revenues
6
Bradley BurnsFY 2020-21
Amended Budget
Actuals
Positive Variance
Sales Tax
Bradley BurnsFY 2021-22
Adopted Budget
Updated Estimate
Increase
$53,650,000
$49,198,300
54,999,505
57,600,000
$3,950,000
$5,801,205
7
Measure X
Measure X
$65,000,000
$61,432,700
75,094,336
77,250,000
$12,250,000
$13,661,636
8
1st Quarter General Fund Expenditures
9
Vacancy Report as of September 30
10
Resolution 2021-XXX
Page 1 of 3
EXHIBIT 2
RESOLUTION NO. 2021-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA TO AMEND THE CURRENT FISCAL YEAR 2021-
2022 ANNUAL BUDGET TO ADD ONE FULL TIME POSITION
IN THE FINANCE AND MANAGEMENT SERVICES AGENCY
AND ONE FULL TIME POSITION IN THE COMMUNITY
DEVELOPMENT AGENCY
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1: The City Council hereby finds, determines and declares as follows:
A.On June 15, 2021, the City Council passed and adopted Ordinance
No. NS-3005, establishing the City’s Budget for Fiscal Year 2021-2022
and authorizing position allocations for Fiscal Year 2021-2022. The
Ordinance also sets forth the requirement that alterations in the
allocation of authorized positions be reviewed and approved by the
City Council;
B.On October 5, 2021, the City Council approved Resolution No. 2021-
057 to amend the current Fiscal Year 2021-2022 budget to add limited-
term full-time positions for American Rescue Plan Act Projects.
C.The Executive Director of the Finance and Management Services
Agency now requests to amend the Fiscal Year 2021-2022 budget to
add one (1) full-time Meter Reader Collector;
D.The Executive Director of the Community Development Agency
requests to amend the Fiscal Year 2021-2022 budget to add one (1)
full time Economic Development Specialist I; and
E.It is now desired to amend the Fiscal Year 2021-2022, as amended, in
order to effect this change, as shown below.
Section 2: The City’s Annual budget for Fiscal Year 2021-2022, as amended,
is hereby further amended by adding the following position in the Finance and
Management Services Agency, at the monthly seven-step range as indicated:
7-Step Salary Rate Range Effective 7/1/2021
Classification Title Number of Positions Added Monthly Salary
Minimum-Maximum
Meter Reader Collector 1 $4296 - $5762
EXHIBIT 2
Resolution 2021-XXX
Page 2 of 3
Section 3: The City’s Annual budget for Fiscal Year 2021-2022, as amended,
is hereby further amended by adding the following position in the Community
Development Agency, at the monthly seven-step range as indicated:
7-Step Salary Rate Range Effective 7/1/2021
Classification Title Number of Positions Added Monthly Salary
Minimum-Maximum
Economic Development 1 $6415 - $8599
Specialist I
Section 4: All salary rate range classifications are set forth in the City's "Salary
Schedule" as periodically updated.
Section 5: That except as amended by this Resolution, all other provisions of
the Annual Budget for Fiscal Years 2021-2022, as amended, shall remain in full force
and effect.
Section 6: This Resolution is operative from and after the date upon which it is
adopted.
ADOPTED this _____ day of December, 2021.
___________________________
Vicente Sarmiento
Mayor
APPROVED AS TO FORM
Sonia R. Carvalho
City Attorney
By: __________________
Laura A. Rossini
Chief Assistant City Attorney
EXHIBIT 2
Resolution 2021-XXX
Page 3 of 3
AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, Daisy Gomez, Clerk of the Council, do hereby attest to and certify the attached
Resolution No. 2021-___ to be the original Resolution adopted by the City Council of the
City of Santa Ana on December ____, 2021
Date: ___________________ ____________________________
Clerk of the Council
City of Santa Ana
Top 25 Sales Tax Remitters California sales tax cash receipts increased by 32.3% from
the same quarter last year. In this jurisdiction sales tax cash
7-ELEVEN FOOD STORES receipts increased by 39.4% from the same quarter last year
ARCO AM/PM MINI MARTS due to a increase of $432,159,000 in Taxable Sales.
BUILDERS SURPLUS
CALIFORNIA MOTORS DIRECT Cash Receipts Quarter Annual
CHEVRON SERVICE STATIONS Santa Ana 39.4% 20.1%
CREVIER BMW/MINI Orange Countywide Pool -0.8% 18.9%
FINANCIAL SERVICES VEHICLE TRUST Orange Countywide 37.9% 10.3%
FREEWAY HONDA South Coast Region 34.8% 10.1%
G & M SERVICE STATIONS Statewide 32.3% 12.9%
GUARANTY CHEVROLET
HOME DEPOT Annualized Percent Change in Sales Tax Cash Receipts
MAIN ELECTRIC SUPPLY COMPANY
MCDONALD'S RESTAURANTS
PEOPLE'S OC - MMD
ROGER DUNN GOLF SHOPS
ROSS STORES
SAF-T-CO SUPPLY
SUBARU ORANGE COAST
SUPER CLINIK - MMD
TARGET STORES
THE ARNOLD COMPANIES
VOLKSWAGEN SOUTH COAST
VOLVO OF ORANGE COUNTY
WAL MART STORES
WAXIE'S SANITARY SUPPLY
Business Activity Quarter Annual Quarter Annual Quarter Annual
General Retail 49.9% 14.7%73.5% 6.3% 52.3% 3.0%
Food Products 36.1% -1.7%62.2% -6.6% 42.7% -14.0%
Transportation 57.1% 6.9%55.9% 9.7% 37.1% -0.8%
Construction 14.3% 9.3%11.8% 9.6% 7.7% 2.1%
Business To Business 31.1% 6.6%23.8% -0.8% 11.0% -8.0%
TOTAL LOCAL BUSINESS ACTIVITY 39.8% 7.3%49.4% 3.4% 32.5% -3.7%
COUNTYWIDE POOL ACTIVITY 0.3% 29.8%2.7% 23.6% 7.4% 25.0%
City of Santa Ana
Santa Ana South Coast California
Quarterly Report on Sales Tax and Business Activity
2nd Quarter 2021 in Review
-18.0%
-12.0%
-6.0%
0.0%
6.0%
12.0%
18.0%
24.0%
Santa Ana Orange Countywide Statewide
Orange Countywide Pool -0.8%18.9%
South Coast Region 34.8%10.1%
EXHIBIT 3
Santa Ana
Annual Per Capita Sales Tax
Adjusted for Inflation
(Constant 2017 $)
City of Santa Ana
News
x Economic Activity:Real Gross Domestic Product (GDP) grew at a seasonally adjusted annualized rate of 6.5%
in the second quarter of 2021. Real GDP in Q2 2021 surpassed its Q4 2019 pre-pandemic peak by 0.8%.
(Finance Bulletin, August 2021)
x Employment:The U.S. unemployment rate fell by 0.7% to 5.2% in August of 2021 compared to July of 2021.
Total U.S. nonfarm payroll employment increased by 235,000 (0.2%) in August compared to July of 2021.
California's unemployment rate remained unchanged at June’s revised rate of 7.6% for the month of July
2021. California's civilian employment increased by 56,000 (0.3%) in July of 2021 compared to June of 2021.
(Finance Bulletin, August 2021 & BLS)
x Personal Income:U.S. personal income increased by 2.7% in the Second quarter of 2021, compared to same
quarter previous year. This increase was after a 5.2% growth in the first quarter of 2021. (BEA)
2017Q2 $139 2018Q2 $140 2019Q2 $141 2020Q2 $130 2021Q2 $138
$16 $16 $18 $21 $26$1 $1 $1 $1
$1
$29 $30 $31 $26
$26
$14 $14 $13 $12
$13
$28 $28 $27
$25
$25
$23 $23 $23
$21
$20
$28 $28 $27
$25
$27
General Retail
Food Products
Transportation
Construction
Business To Business
Miscellaneous
County Pool
(Cash Basis)
EXHIBIT 3
City Council Meeting
December 21, 2021
Fiscal Year
2021-2022
First Quarter
Budget Update
1
AGENDA
First Quarter General Fund Revenues
First Quarter General Fund Expenditures
Vacancy Report as of September 30, 2021
2
General Fund Performance
General Fund Performance
FY20 -21 Sales Tax and Business Tax performed better than anticipated
•Parks and Libraries were not at full service
•Staff vacancies remained vacant
•Pandemic priorities funded by CARES supplanted regular operations
•Departments were more careful and controlled spending during pandemic uncertainty
FY20-21 Expenditure Savings during the Pandemic
The updated Sales Tax estimate for FY21 -22 means the City does not
need to use General Fund balance for the FY21 -22 operating budget
Final Result: The FY 21 -22 budget is balanced, and the General Fund
has $42 million available for one -time spending
3
General Fund General Fund
General Fund One -Time Availability
4
FY 2020 -21
Carryforward to FY 2021-22 4,042,487
Operating Reserve 18%63,083,968
Available for One-Time Spending 42,289,528
Total Fund Balance 6/30/2021 $109,415,983
FY 2021-22
Available for One -Time Spending
One-Time Proposed Appropriations
Net Increase to Operating Reserve
(24,655,000)
$16,364,140Total Est. Available One -Time Funding
(1,270,388)
1st Quarter General Fund Revenues
5
1st Quarter
Other Key General Fund Revenues
6
Bradley BurnsFY 2020 -21
Amended Budget
Act u a ls
Positive Variance
Sales Tax
Bradley BurnsFY 2021-22
Adopted Budget
Updated Estimate
Increase
$53,650,000
$49,198,300
54,999,505
57,600,000
$3,950,000
$5,801,205
7
Measure X
Measure X
$65,000,000
$61,432,700
75,094,336
77,250,000
$12,250,000
$13,661,636
8
1st Quarter General Fund Expenditures
9
FY 21-22
Adopted Budget
City Manager 2,774,200 555,222 20.0%
City Council 569,280 107,740 18.9%
Non-Departmental 49,206,780 8,222,586 16.7%
Transfers to Projects and Debt Service 24,173,510 5,101,901 21.1%
Clerk of the Council 1,470,790 296,272 20.1%
City Attorney's Office 2,955,140 628,003 21.3%
Human Resources 3,455,190 820,179 23.7%
Finance & Management Services 10,416,490 2,078,650 20.0%
Library 5,864,340 1,223,188 20.9%
City Owned Museum Building 1,474,030 364,157 24.7%
Parks and Recreation Services Agency 23,289,740 4,618,057 19.8%
Police Department 141,082,500 33,368,870 23.7%
Fire Department*51,618,690 16,558,701 32.1%
Planning & Building Agency 15,535,280 2,710,431 17.4%
Public Works Agency 15,711,070 2,881,665 18.3%
Community Development 3,898,130 491,905 12.6%
TOTAL GENERAL FUND $ 353,495,160 $ 80,027,526 22.6%
*Includes one month advanced payment
Department FY 21-22
1st Quarter % Expended
Vacancy Report as of September 30
10
Questions?
11
Additional Priorities to Consider
•Street lights
•Bristol widening
•Sidewalk improvements
•Additional library location
•Homeless shelter contribution
Infrastructure
12
•Contribution to enhanced dog park
•Pocket parks
•Machander Tennis Center lighting
•Memorial Community Center renovation
Parks & Open Space
•Contribution to Section 115 Trust to mitigate future pension cost spikes
•Payoff debt early to achieve interest savings
Fiscal Sustainability