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TODAY"S RECOMMENDATIONS
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Adopt Resolution
for updates to
employee
classifications
(specs and
compensation)
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ESTIMATED FUND BALANCE AFTER
MID -YEAR ADJUSTMENTS
If City Council approves the mid -year requests:
Remaining recurring funds: $13,272
Remaining one-time funds:
$1610801348
SALES TAX REVENUE TRENDS
Regional Decline: Orange County taxable fell 2.,3%.,
matching the 2.3% decline in Southern California.
Local Sector Highlights:
High interest rates weakened new car
sales, leading to consumer hesitation
on big -ticket purchases.
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Business -to -business saw slight
growth, but most categories remained
flat or declined due to economic
pressures.
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Fuel payments dropped 13 % due to
lower consumption and prices, with
continued declines expected through
FY24-25.
MEASURE
X
BY QUARTER
_,_-_-_--.:_-------- ------ - -
10,000,00D
�,004,044
2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR 1ST QTR 2ND QTR
3RD QTR
4TH QTR 1ST QTR 2ND QTR 3RD QTR 4TH QTR IST QTR 2ND QTR 3RD QTR 4TH QTR IST QTR 2ND QTR
2019 2019 2019 202D 2020 2020 2020 2021 2021
2021
2021 2022 2022 2022 2022 2023 2023 2023 2023 2024 2024
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REVENUE CHALLENGES FOR CANNABIS
The local legal cannabis market faces ongoing revenue
challenges due to several key factors.
' Regional unlicensed sellers continue to dominate, offering lower prices due to tax avoidance and fewer
regulations.
More cities allowing cannabis sales has increased supply, leading to price drops and reduced profitability.
Revenue declines began even before the cannabis tax rate was lowered on January 1, 2023.
Medical
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OTHER GENERAL FUND REVENUES
While some revenue sources are underperforming,
growth in other areas is partially_ offsetting the decline.
•
Utility User Tax •
Increased SCE rates, higher electricity consumption from heatwaves,
and growing EV adoption are driving additional revenue.jo
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Business Tax
Improved compliance efforts are ensuring more businesses are
properly licensed, contributing to sustained revenue growth.
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PROPOSED
GENERAL FUND SPENDING
Reduction in General Fund Two -Thirds
Transfer to Cannabis Public Benefit Fund
Reduction in Alley Improvements Program
Orange County Fire Authority (OCFA) budget
contractual savings
Santiago Gym flooring & Children's Zoo
programming
QOLT Homeless Services cleaning contract
Streetlight utility expenses
Graffiti Abatement Program
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(21Z840
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One -Time = ($2,943,680)
Q Recurring = $473,300
A%k A total Of 13 full-time positions, with
costs full} offset by part-time savings,
contract carvings, or additional revenues
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PROPOSED ADJUSTMENTS
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IN OTHER FUNDS
or
$9071600
$990000
$4501000
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Varies
NEXT STEPS
March 18, 2025 City Council Meeting:
Early direction for the FY25-26 budget .
PWA is bringing a construction contract and a one-time General
Fund appropriation request for Centennial Park improvements.
These improvements include enhanced lighting, family recreation
area
with
additional lighting,
restroorn
upgrades, dog park, walking
trail,
and a
connection to the
Santa Anna
River.
• Staff is
bringing a
separate staff
report at a future City Council
meeting
to propose
the addition of a
full-time construction crew.
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NEE MENOMONEE MENNEN
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