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HomeMy WebLinkAboutItem 30 - Fiscal Year 2024-25 Budget Work Study Session Finance and Management Services www.santa-ana.org/finance Item # 30 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report May 7, 2024 TOPIC: Fiscal Year 2024-25 Budget Work Study Session AGENDA TITLE Fiscal Year 2024-25 Budget Work Study Session RECOMMENDED ACTION Discuss and provide direction to staff. GOVERNMENT CODE §84308 APPLIES: No No DISCUSSION The City Council provided Early Direction on April 2 and staff has updated the proposed budget accordingly. The City conducted internal budget meetings with departments from March 25 to April 11 to receive supplemental budget requests and staff priorities. After comparing the requests to City Council priorities received during Early Direction and community priorities received during the budget outreach, Finance worked with the City Manager’s Office to build a proposed budget for City Council consideration. Through April 29, the City has received nearly 1,900 budget survey responses. Staff will continue community engagement and will present results during the presentation for this agenda item. At a minimum, the staff presentation is expected to include the following: •A summary of community outreach and priorities •Notable additions to the General Fund Budget •Summary spending plans to serve the Unhoused Community and Youth populations •A summary of the proposed Cannabis Public Benefit Fund spending plan Miscellaneous Fees Benchmarking As requested by the City Council, staff has compiled a sampling of comparative Miscellaneous Fees with other cities (Exhibit 1). In addition, the Parks, Recreation, and Community Services Agency has been studying their fees and how they compare to other cities and may return to City Council with recommendations at a later date. In the Fiscal Year 2024-25 Budget Work Study Session May 7, 2024 Page 2 4 2 5 1 meantime, Staff proposes no increase for Parks, Recreation, and Community Service Fees and an increase of 4.66% for all other FY 2024-25 Miscellaneous Fees. General Fund Reconciliation The General Fund reconciliation (Exhibit 2) accounts for all changes from the adjusted FY 2023-24 General Fund budget to the proposed FY 2024-25 General Fund budget. The reconciliation includes a detailed listing of all proposed additions, both recurring and one-time amounts. ¹Staff is recommending a one-time adjustment to close out the Stores Internal Service Fund at the May 21, 2024 City Council Meeting as part of the Third Quarter Budget Update. Next Steps •May 16 has been reserved for an additional Budget Work Session. •In addition, City Council is also scheduled to consider the proposed FY 2024-25 budget on May 21 to provide further direction to staff. •On June 4, the City Council is scheduled to conduct the Budget Public Hearing and consider the first reading of an ordinance to adopt the budget for FY 2024- 25, which begins on July 1, 2024, and ends on June 30, 2025. •The second reading and adoption of the FY 2024-25 Budget Ordinance is scheduled for June 18. Total Recurri ng Re ve nues 406,527,340 Total FY2024-25 Spe ndi ng Base li ne (Re curri ng)(401,854,110) Propose d Additions for Re curri ng Spe nding (4,420,840) Esti mate d Avail abl e (Re curring)252,390 Esti mate d Ending Bal ance as of June 30, 2024, not i ncludi ng Pensi on De bt Stabil izati on 86,799,113 Thi rd Quarte r Budget Update ¹(850,000) Less 18% Rese rve (73,174,921) Propose d One -Ti me Spendi ng (12,762,760) Esti mate d Spe ndabl e Bal ance at June 30, 2025 (One -Ti me )11,432 Proposed FY24-25 G e ne ral Fund Summary Fiscal Year 2024-25 Budget Work Study Session May 7, 2024 Page 3 4 2 5 1 FISCAL IMPACT There is no direct fiscal impact at this time. EXHIBIT(S) 1. Miscellaneous Fee Benchmarking 2. General Fund Reconciliation Submitted By: Kathryn Downs, Executive Director of Finance and Management Services Approved By: Alvaro Nuñez, Acting City Manager FMSA PD PBA 1 Long Beach Altered - $28 Unaltered - $250 1 Riverside Average $112 1 Anaheim $167 2 Irvine Altered - $28 Unaltered - $159 2 Long Beach Average $90 2 Long Beach $91 3 Santa Ana Altered - $28 Unaltered - $159 3 Santa Ana Average $84 3 Santa Ana $64 4 Anaheim Altered - $17 Unaltered - $100 4 Anaheim N/A 4 Irvine $62 5 Riverside Altered - $17 Unaltered - $100 5 Irvine N/A 5 Tustin $39 6 Riverside $32 1 Irvine $92 1 Riverside $583 1 Anaheim $167 2 Riverside $37 2 Santa Ana $195 2 Long Beach $91 3 Anaheim $35 3 Long Beach $157 3 Santa Ana $64 4 Santa Ana $24 4 Anaheim N/A 4 Irvine $62 5 Long Beach $12 5 Irvine N/A 5 Tustin $39 6 Riverside $32 Dog License Fees Parking Citation Plumbing Permit New Business License License to sell Pistols/ Revolvers Electric Permit 4/29/2024 EXHIBIT 1 PRSCA 1 Brea $100 1 Anaheim $72 1 Irvine $249 2 Anaheim $85 2 Irvine $58 2 Brea $185 3 Fountain Valley $80 3 Long Beach $45 3 Tustin $151 4 Irvine $64 4 Orange $25 4 Fullerton $150 5 Santa Ana $43 5 Fullerton $23 5 Anaheim $120 6 Long Beach $25 6 Santa Ana $21 6 Long Beach $115 7 Orange N/A 7 Tustin $17 7 Santa Ana $115 8 Tustin N/A 8 Brea Non-profit sports groups only 8 Orange $105 9 Fullerton N/A 9 Fountain Valley Must be registered team to rent 9 Fountain Valley Prices Vary, No Full- time Option *Resident Recreational Rate Aqua-Swim Lessons Resident 1 Tustin $130 1 Long Beach $40 2 Irvine $104 2 Orange $35 3 Brea $90 3 Irvine $32 4 Anaheim $79 4 Anaheim $30 5 Santa Ana $58 5 Fullerton $23 6 Long Beach $185 private lessons 10 weeks 6 Tustin $17 7 Orange $30 per private lesson 7 Santa Ana $10 8 Fountain Valley N\A 8 Brea Non-profit sports groups only 9 Fullerton Third-Party Outsourced 9 Fountain Valley N/A *Resident Recreational Rate Youth Sports Soccer Field Rental*Youth Camp- Weekly Resident Baseball Field Rental* 4/29/2024 PWA 1 Santa Ana $378 1 Anaheim $8,000 1 Costa Mesa $465 2 Costa Mesa $220 2 Tustin $1,488 2 Buena Park $380 3 Buena Park $190 3 San Juan Capistrano $886 3 Santa Ana $376 4 Fullerton $122 4 Buena Park $300 4 Tustin $287 5 Anaheim $103 5 Santa Ana $224 5 Fullerton $177 6 San Juan Capistrano $55 6 Costa Mesa $90 6 Anaheim $104 7 Tustin N/A 7 Garden Grove $90 7 San Juan Capistrano $58 8 Garden Grove N/A 8 Fullerton N/A 8 Garden Grove $50 Street Improvement Plan Check 1 Buena Park HourlyRate+20%1 Tustin $5,513 2 Tustin $551 2 Anaheim $5,500 3 Santa Ana $224 3 Santa Ana $1,877 4 Anaheim $168 4 Fullerton $1,500 5 Costa Mesa $90 5 Costa Mesa N/A 6 Garden Grove $90 6 San Juan Capistrano N/A 7 Fullerton $70 7 Garden Grove N/A 8 San Juan Capistrano $58 8 Buena Park N/A Tract Map Check Lane Closure Permit Wireless/Small Cell Application Street Work Permit Issuance 4/29/2024 General Fund Revenues Revenue FY23-24 Original Adopted 400,938,670 Adjustments (97,661) FY23-24 Revised 400,841,009 Adjustments to Revenue Estimates for FY24-25: Measure X Sales Tax (60,890) Bradley-Burns Sales Tax 640,900 Property Tax 2,466,920 Property Tax In-Lieu of VLF 1,252,760 Utility Users Tax 225,000 Cannabis Tax 1,622,870 Business License Tax 200,000 Plan Check & Permits 380,000 Jail Use Fees (3,001,000) Other net adjustments 1,959,771 Total Resources 406,527,340 EXHIBIT 2 General Fund Expenditures Spending FY23-24 Original Adopted Budget, inlcuding Section 115 Trust Contributions 430,556,550 Remove One-Time Items (29,439,332) City Council approved adjustments to recurring costs during FY23-24 (899,500) FY24-25 Adjusted Baseline 400,217,718 Annualize partial year Allocations approved during FY23-24 332,830 Employee Compensation Increase (MOU, step increases, etc.)7,740,307 Cannabis Public Benefit Transfer related to revenue decrease (918,020) Overhead/Internal Service Charge Increases Building Maintenance 466,530 City Equipment & Replacement Charges 680,140 Accident Repair & Replacement 275,380 IT Maintenance & Specific Charges 420,230 Insurance Charges 947,630 Public Works Administrative Charges 107,910 City Yard Rental 17,520 Orange County Fire Authority Contract Increase 1,954,400 CARE Ambulance Increase 587,240 Police Building Payoff (9,039,920) Sunset of VIP Program (1,700,000) Other contract increases/decreases & minor changes across all departments (235,785) FY23-24 Baseline (Recurring)401,854,110 Proposed Additions to FY 24-25 Budget Recurring One-Time 800MHz Contract Increase for Police 90,570 Add Economic Development Staff 445,680 Allocation for Police Retirements, in compliance with MOUs 500,000 Animal Shelter Contract Increase 600,000 Assistant Fleet Services Technician 70,110 Backfill for CIP Engineering as reported on December 19, 2023 900,000 Bristol Street Rehab Completion 680,000 Bus Stop Maintenance 250,000 Car Wash Rehab - City Yard 250,000 City Council Allocations Increase 10,500 City Yard - Rehab Ice Making Room 65,000 City Yard deferred maintenance 250,000 City Yard Operations - Strategic Master Plan/ RFP advertised FY 23/24 400,000 Code Enforcement Overtime 15,000 Dedicated Building Maintenance Technician for Jail 75,830 Delhi Library Operations & Maintenance 75,060 Digital Media Billboard to promote City events and generate revenue from business ads - City Yard 375,000 Dispatch Community Engagement Tech Platform 27,010 DTSA Parking Subsidy 1,658,000 Electrical feeder upgrades (SCE) and Electrical Panel - City Yard 1,000,000 Establish recurring allocation for Pothole Repair 100,000 First Floor Customer Service Representative 97,570 Fleet Electrification Master Plan 100,000 Helicopter Contract (County Rate Increases)93,230 Increase allocation for Employee Appreciation 37,500 Increase budget to provide for actual Senior Services spending 375,000 Increase in Fleet Operating Materials & Supplies 36,910 Increased Maintenance Costs for New Parks (Gerardo Mouet, Ed Caruthers, Santa Ana River Trail. 10th & Flower, King Street)175,000 Independent Audit Fees increase 20,000 Investment Advisory Services (Completely offset by revenues)150,000 Jail Aramark Contract Increase 653,040 Jail Deferred Maintenance 250,000 Jan-Jun 2025 (6 months) Funding for ARPA Positions 375,960 Last 800MHz Debt Payment (2 in a single fiscal year)462,860 Navigation Center Maintenance 100,000 Neighborhood Initiatives Contractual Services 120,000 November 2024 Election Costs 425,000 OPEB Actuarial Valuation 11,000 Parking Validations for City Council Meetings 27,500 Parkland Feasibility Study, including Washington Square 100,000 Planning & Building Records Project 146,000 Planning/Building & Code Enforcement Training 48,600 Rehab Zoo Walkways 400,000 Senior Legal Mgmt Analyst for City Attorney 109,790 Software required to continue banking online 25,000 Software to Upgrade Fueling Station at City Yard 250,000 State Building Utilities prior to demo in December 2025 180,900 Strategic Planning 102,000 Traffic Safety Improvements - Intersections: Segerstrom Ave/Raitt St and Segerstrom Ave/Flower St Traffic 1,300,000 Upgrade Executive Secretary for City Attorney 28,700 Vehicle Replacement (Multiple Departments)1,114,000 Zoning Code Community Outreach 500,000 Zoo North Wall 1,200,000 Zoo Operations & Maintenance related to new animals and exhibits 330,280 Total 4,420,840 12,762,760 CITY COUNCIL BUDGET WORKSHOP City of Santa AnaMay 7, 2024 AGENDA City of Santa Ana Community Engagement Results Notable Spending & General Fund Summary Miscellaneous Fees Notable Improvement Projects Status of FY23-24 Council Requested Initiatives 1 City of Santa Ana COMMUNITY ENGAGEMENT 2 City of Santa AnaOUTREACH EFFORTS Total digital contacts (social media, newsletters, mySantaAna app, etc.) Total “Understanding the City of Santa Ana Budget” Video views (Includes partial views, all 3 languages) on YouTube and social media Budget survey postcards distributed mySantaAna app -Budget Survey App Social Media Impressions (FB, IG, Nextdoor, X) Budget webpage visits News media placements New Santa Ana, Orange County Register, Voice of OC, Little Saigon TV, Nguoi Viet newspaper *Note: Does not reflect total number of people. Some individuals may be counted more than once due to engagement on multiple platforms. *New Visitors from Jan 1-April 29, 2024 *3 push notifications to 28,000-29,000 users per push 460,00 0 29,00 0 396,746 2,94 4 61,42 8 93,661 5 3 City of Santa Ana CITYWIDE EVENTS COMUNITY ENGAGEMENT TOOLS Community Budget Priorities Survey BEST: Simulate & Prioritize 4 February 22 Newhope Library McFadden Institute of Technology Dehli Center Fisher Park Log Cabin COM-Link Forum SAPD Community Room El Salvador Community Center Roosevelt Walker Community Center February 27 March 12 March 14 March 21 April 9 March 28 City of Santa AnaCOMMUNITY BUDGET MEETINGS Community Budget Meetings *As of Wednesday, April 29 Wards Participant s Listening Tour Visits Total Documented Engagements1,900 + 6 9 6 47 5 City of Santa AnaCOMMUNITY BUDGET MEETINGS: MOST HEARD “Youth Programs” “Recreation Centers”“Homeless Reduction Programs” “Crime-Reduction Programs” “Sidewalks, Roads & Tree Trimming” 6 Assumptions •Results came from came from more than 1,900 responses that may not represent a scientific cross-section of residents. •Topics mentioned in the 12 question survey : ⚬City Infrastructure-Parks, crosswalks, lighting along roadway, road repairs, sidewalks, traffic ⚬Code Enforcement ⚬Environmental Justice-Air pollution, flood control, lead abatement, shade coverings ⚬Homeless Reduction Efforts ⚬Public Safety-Crime reduction, reducing police response times, other police services such as PAAL, civilian ride-alongs, assessment response ⚬Youth program offerings and spaces ⚬Basic Needs Access City of Santa AnaBUDGET PRIORITIES SURVEY 7 City of Santa AnaRECURRINGFEEDBACK TOPICS & SUGGESTIONS (The Top 5) OTHER FREQUENTLY MENTIONED TOPICS Recurring Topics Across Engagement Modes by Percentage* Breakdown of recurring comments by City residents across all forms of engagement: community budget meetings, BEST Tools & e-mailed comments. •More public parking in residential areas •Access to affordable housing programs •More street lights for safer neighborhoods at night •Traffic issues such as congestion and calming efforts •Code Enforcement •Increase Economic Development efforts •Bus Stop maintenance *The Other Category was removed for graphical display purposes. Other consisted of individual comments not attributable to a Top 5 Category. The overall text file with all comments will be shared with City Council once the data collection period closes. 8 COMMUNITY BUDGET PRIORITIES SURVEY: TOP BUDGET PRIORITIES City of Santa Ana Question: Which of the following options should be Santa Ana’s highest two budget priorities in the next year? FY 2024-25 Top Budget Priorities According to Survey Respondents *As of Sunday, April 21 9 Question: How important do you think it is for Santa Ana to focus on the following projects? City of Santa AnaCOMMUNITY BUDGET PRIORITIES SURVEY: CONCERNING STREETS & SIDEWALKS More lighting along the City's roadways Reducing traffic congestion Improving sidewalk conditions More crosswalks 10 City of Santa AnaCOMMUNITY BUDGET PRIORITIES SURVEY: CONCERNING PUBLIC SAFETY Question: How important do you think it is for Santa Ana to focus on the following public safety initiatives? Invest in other police services (Police Athletic & Activity League, Civilian Ride-Along program, Evaluation Assessment Response Team) Reduce police response times Improving animal control services (stray animals, dead animal collection, etc.) 11 City of Santa AnaDRAFT BUDGET SUPPORTING COMMUNITY PRIORITIES ACROSS ALL FUNDS Priority Areas •Homeless Reduction Efforts-Navigation Center support, QOLT, grants, CityNet contract & dedicated staff, Homeless Liaison Officers, & public safety response •Streets-New recurring allocation for pothole repair & annual RMRA & Measure M2 funding •Increase Police Presence/Public Safety •Sidewalks-Recurring allocation to replace sidewalks •Youth Programs-Includes library & recreational program offerings, Police Athletic & Activity League (PAAL) & employment programs $25.9M $21.2M $160.6M $1M $10.1M 12 Miscellaneous City of Santa Ana 13 City of Santa AnaPROPOSED FEE INCREASE •A sampling of fee comparisons to other cities was attached to the Staff Report. •Parks, Recreation, & Community Services is currently studying their fees, which may result in recommendations at a later date. Therefore, staff recommends no increases in Parks, Recreation, & Community Services fees at this time. •City employees provide direct services to individuals for cost- recovery fee (e.g. planning permit). •Proposed fee increase of 4.66% is based on CPI locality rate calculations and supported by employee compensation cost increases. 14 NOTABLE SPENDING & GENERAL FUND SUMMARY City of Santa Ana 15 •DTSA Parking Subsidy with a plan to eliminate the subsidy for FY25-26 $1.66M •Zoo Deferred Maintenance Projects: North Wall & Rehab Zoo Walkways $1.6M •Two Traffic Signals: Segerstrom Ave/Raitt St & Segerstrom Ave/Flower St $1.3M •Vehicle Purchases Across Multiple Departments $1.1M •Electrical Feeder Upgrades & Electrical Panel at City Yard $1M •Bristol Street Rehab Completion $680K •Jail Aramark contract increases, with a plan to rebalance jail budget & eliminate subsidy $653K •Zoning Code Community Outreach $500K •November 2024 Election Costs $425K •Jail Deferred Maintenance Projects $250K NOTABLE ADDITIONS TO THE GENERAL FUND BUDGET ONE-TIME SPENDING City of Santa Ana Local Measure X Spending 16 •Backfill for CIP Engineering as reported on 12/19/2023 $900K •County Animal Shelter Contract Increase $600K •Add Economic Development Staff (3) $446K •Workforce Changes (Add 4 positions, Reallocate 1 position) $382K ⚬PWA-2; CAO-1; Finance-1 •Align budget with current recreational program spending $375K •Zoo Operations & Maintenance related to new animals & exhibits $330K ⚬Includes the addition of 1 Zoo position •Bus Stop Maintenance $250K •Increased Maintenance Costs for New Parks $175K ⚬Gerado Mouet, Ed Caruthers, Santa Ana River Trail, 10th & Flower, King St •Environmental Justice (EJ) Initiatives $120K ⚬Grant writing & consulting, community outreach, & interpreting services •Establish Recurring Pothole Repair Allocation $100K $ NOTABLE ADDITIONS TO THE GENERAL FUND BUDGET RECURRING City of Santa Ana Local Measure X Spending $116,300 17 City of Santa AnaEARLY DIRECTION ITEMS INCLUDED IN THE DRAFT BUDGET Priority Items •DTSA Parking Subsidy •Alley Improvements •Two (2) New Traffic Signals: Segerstrom Ave/Raitt St & Segerstrom Ave/Flower St •Economic Development Support •Six (6) Months of ARPA Staff Funding (Jan-Jun 2025) •Parkland Feasibility Study •Parking Validations for City Council Meetings $RECURRING ONE-TIME ONE-TIME $RECURRING RECURRING ONE-TIME ONE-TIME $ 18 SPENDING FOR THE UNHOUSED City of Santa Ana $617k$10M Local Measure X Spending 19 YOUTH PROGRAM SPENDING City of Santa Ana $100K $200K $405K Local Measure X Spending 20 City of Santa AnaCANNABIS PUBLIC BENEFIT FUND FY 2024-25 REVENUE & SPENDING PLAN: $9,436,700 21 OPIOID SETTLEMENT SPENDING City of Santa Ana •Staff is exploring in-hospital detoxification services, to be operated outside of City boundaries, for the City’s unhoused population who wish to detoxify •The City expects to receive Opioid Settlement revenue of at least $405,000 annually over the next 15 years •The in-hospital detoxification service is expected to fit within available revenue •Staff proposes to place the spending plan in the CMO budget, for the Homeless Services Division Manager to oversee 22 SUMMARY OF DRAFT GENERAL FUND BUDGET Total Recurring Revenues $406,527,430 Total FY2024-25 Spending Baseline (Recurring) ($401,854,110) Proposed Additions for Recurring Spending ($4,420,840) Estimated Available (Recurring) $252,390 Estimated Ending Balance as June 30, 2024* $86,799,113 Third Quarter Updates** ($850,000) Less 18% Reserve ($7 3,174,921) Proposed One-Time Spending ($12,762,760) Estimated Available Spendable Balance (One-Time) $11,432 City of Santa Ana Total Total *Estimated Ending Balance as of June 30, 2024 does not include Pension Debt Stabilization **Third Quarter Budget Update will include a recommendation to close-out the Stores Internal Service Fund 23 FY 2024 -25 NOTABLE IMPROVEMENT PROJECTS City of Santa Ana 24 Measure M2 -$6.7M ANNUAL RECURRING PROJECTS: ⚬Local Street Preventative Maintenance ⚬Pavement Management ⚬Right-of-Way Management PROJECTS UNDERWAY: ⚬Main Street Slurry and Resurfacing ￭Design Phase to begin 1st Qtr of FY 24-25 NEW FUNDING FOR RMRA & MEASURE M2 PROJECTS Road Maintenance and Rehabilitation -$11.3M PROJECTS UNDERWAY: ⚬Bristol Street Protected Bike Lanes ￭Expected Completion Date: 2nd Qtr of FY25-2026 ⚬Fairview Avenue Rehab ￭Design Phase to begin Summer 2024 ⚬Civic Center Rehab ￭Shelton to Flower -Design Phase to being Summer 2024 ￭Minter to Santiago -Design Phase to begin early 2025 ⚬Grand Avenue Rehab ￭Construction to begin Fall 2024 ⚬Raitt Street Rehab ￭Construction to begin Summer 2025 City of Santa Ana 25 New monies have been allocated to sustain the advancement of important City projects. PROJECTS UNDERWAY: •Safe Routes To School -$4.7M ⚬Ensures youth are able to safely access school sites. This includes mapping safe routes to school in addition to infrastructure improvements and programs. ⚬Design Phase to begin August 2024 •Bike Lane Projects -$3.4M ⚬Expected Date of Completion: 2nd Qtr of FY 25-26 •Orange Avenue Complete Streets -$851K ⚬Design Phase to begin August 2024 ANNUAL RECURRING PROJECTS: •Traffic Signal Equipment Replacement -$481K •Traffic Safety & Management Plans -$110K TRAFFIC & PEDESTRIAN CAPITAL PROJECTS IN FY 2024-25 DRAFT CIP BUDGET City of Santa Ana 26 MULTI-YEAR CAPITAL PROJECTS IN FY 2024-25 DRAFT BUDGET Logan/Chepas Park Bristol Street Protected Bike Lane City of Santa Ana 27 FY23-24 COUNCIL REQUESTED INITIATIVES City of Santa Ana 28 29 NEXT STEPS JUNEMAY •May 16: City Council Budget Workshop (If needed) •May 21: City Council Budget Workshop (If needed) •Draft documents will be made available to Council & the public ⚬Draft City Budget Summary ⚬Proposed CIP ⚬Proposed Miscellaneous Fees ⚬Updated Ten-Year Outlook •June 4: Public hearing •June 18: Budget adoption City of Santa Ana 30