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Home My WebLink AboutPresentation - Item 15M A R C H , 1 8 2 0 2 5 FY 2025 -26 GENERAL FUND BUDGET 1 Item #15 Finance and Management Services Agency COMMUNITY ENGAGEMENT EFFORTS Youth & Families COMMUNITY ENGAGEMENT City Departments & Agencies, Commissions & Committees Civic Service Clubs Community Non- Profits, Community Centers, Churches, Schools, Neighborhood Associations, Com-Link Citywide Events Survey is live in 3 different languages •Post Cards with a QR Code and URL linking to the budget survey are available for distribution •We’re meeting people where they are instead of waiting for them to come to us •Committed to meet with every Council Ward •Vietnamese &Spanish Interpretation services offered at every meeting •Special emphasis on youth engagement ⚬Local non -profits that work specifically w/youth ⚬Santa Ana College ⚬Youth Commission meeting 2 GENERAL FUND INFORMATION 3 ASSUMPTIONS FOR TEN -YEAR OUTLOOK •Includes recurring revenues & spending only •Property Tax estimates from consultant for FY25 -26 through FY29 -30, 2.8% increase thereafter •Sales Tax estimates from consultant for FY25 -26 through FY26 -27, 2.8% increase thereafter •Inflation factor for all other revenues •Labor increases based on MOU’s •Orange County Fire Authority (OCFA) contract increase of 4.5% annually •OC Street Car Contributions to begin as early as January 2026 •Employee pension unfunded liability contributions as estimated by CalPERS are rising due to shortfall in investment returns for FY22 -23 •Contributions to, and uses of, the Pension Stabilization Account have been included to smooth the pension debt fluctuations •Inflation factors for all other revenues and spending 4 GENERAL FUND TEN -YEAR OUTLOOK 5 BALANCING OPTIONS •A department wide adjustment may be explored to align spending with resources while minimizing service impacts ⚬The Measure X spending plan is included and may be used if reductions are needed to balance the budget •Council recommendations welcomed to help guide budget adjustments and prioritization 6 MEASURE X CITIZENS OVERSIGHT (LOCAL SALES TAX) Recommendations: 1.Establish a plan to prepare for the imminent loss of Measure X revenue, including robust public communication. 2.Set aside Measure X revenue today for the future use, when the Measure X tax rate decreases in 2029 and expires in 2039. 3.Favor one -time spending from Measure X for revenue -generating projects. 7 SEEKING DIRECTION FROM CITY COUNCIL 8 ONE -TIME GENERAL FUND SPENDING •As reported in the Mid -Year Update (March 4, 2025), the estimated spendable fund balance for one -time expenditures in the General Fund is $16,080,348 •The following slides include potential options for utilizing this one -time funding 9 REVENUE PRODUCING OPTIONS 10 BRISTOL & EDINGER PARKING LOT •A $250,000 investment would fund fence painting, gate repairs, lighting upgrades, parking lot overlay and striping, and landscaping to enhance usability for future events •These enhancements would help transform the lot into a revenue -generating venue for community events and future opportunities •Staff would propose new fees for the space Shall staff include a one -time $250,000 allocation in the FY25 -26 budget for these improvements? 11 CONFERENCE SPACE AT SENIOR CENTER (THIRD & ROSS) •The City needs more meeting spaces, and demand is growing. The Santa Ana Senior Center can host up to 125 people and offers a central location with City - owned parking. •A small investment in furniture and fixtures could improve functionality. •Staff can develop a funding proposal and explore options if directed. Shall staff explore investment options to enhance and/or expand this space? 12 SANTA ANA STADIUM EXPANSION & UPGRADES •Proposed Investment: ⚬Expand stadium capacity from 9,000 to 11,077 seats (+2,077 seats) ⚬Add a beer garden/refreshment area to enhance amenities and generate revenue ⚬Estimated cost: $5.3 million (includes construction +10% soft costs) •Revenue ⚬Expansion would attract high -profile events like championships, professional soccer, boxing, wrestling and concerts, boosting revenue and offset costs ⚬A fee structure review would help maximize revenue and offset costs Shall staff include one -time funding of $5.3 million for the stadium in FY25 -26? 13 JAIL IMPROVEMENTS •A $250,000 investment in FY25 -26 would restore and expand the facility for paying detainees and contract housing, ensuring revenue while maintaining public safety •These upgrades will support pay to stay programs and contract housing, maximizing capacity and revenue potential Shall staff include a one -time $250,000 investment in the FY25 -26 budget? 14 CITY INFRASTRUCTURE OPTIONS 15 BUS SHELTERS •Public Works recommends a one -time allocation of $250,000 in FY25 -26 to construct new or replace bus shelters at 16 sites across the City •Upgrading bus shelters enhances comfort, safety, and accessibility for transit riders Shall staff include a $250,000 allocation in FY25 -26? 16 CODE BLUE EMERGENCY SYSTEM UPGRADE •Downtown Santa Ana’s Code Blue emergency units provide direct emergency access with surveillance cameras and emergency buttons but require upgrades due to the 3G phase -out •A $79,000 investment would replace 13 units, upgrading to 5G/LTE for improved connectivity and reliable emergency communications Shall staff include a $79,000 investment in FY25 -26? 17 CROSS -CONNECTION COMPLIANCE •The City must comply with state and local regulations to prevent water contamination, but over 80% of backflow prevention assemblies are non - compliant •A $500,000 investment would fund testing, repairs, and replacements to ensure compliance and reduce regulatory risks Shall staff include a $500,000 investment to meet state mandates? 18 ROAD IMPROVEMENTS TO SUPPORT BUSINESS GROWTH •Poor road conditions in the Majestic, MacArthur Place, and Columbine area make it difficult for business attraction and tenant leasing opportunities •A one -time investment of $1.5 million will repair roads, improve accessibility and support business growth Shall staff include a $1.5 million in one -time funding for these road improvements in FY25 -26? 19 28 CIVIC CENTER PLAZA DEMOLITION OPTIONS Options for Moving Forward : •Wait to secure full funding and request a state extension •Use $4.3 million to demolish only the interior, leaving the shell until more funds are available •Negotiate with the County to transfer Plaza of the Fountains and use funds to demolish the Plaza instead Staff seeks City Council direction on how to proceed with the demolition of 28 Civic Center Plaza 20 FISCAL STABILITY OPTIONS 21 FUTURE PENSION COSTS SET - ASIDE Recent Deposits: •$2 million approved in December (“Year -End Results”) •$1 million approved in March (“Midyear Update”) •Limited capacity for further deposits starting in FY25 -26 Setting aside these funds helps earn interest and ensures money is available for future pension cost increases when CalPERS falls below its 6.8% investment target Shall staff set aside another $1 million or more in FY25 -26? 22 GENERAL FUND RESERVE OPTIONS Leave additional funds in the General Fund Reserve •The expected General Fund Reserve per policy is 18% of recurring revenue, which is currently estimated to be $75,527,080 Shall staff leave additional funds in the General Fund Reserve? 23 RECURRING OPERATING BUDGET RECOMMENDATIONS 24 MISCELLANEOUS FEES Fees are charged for services benefitting individuals provided by City employees •Employee bargaining units are in negotiations for wage increases •Many employees also receive merit step increases of up to 5% •Costs for workers’ compensation and insurance have risen by 12% and 10%, respectively •Pension debt has increased by 18.1% Shall the City include a miscellaneous fee increase of 4.76% CPI, substantiated by employee cost increase? 25 CITY EVENTS Below is the proposed realignment of funding: Shall staff include the recommended reduced event funding allocations for FY25 -26? 26 ARTS FUNDING •A $200,000 recurring allocation is proposed for FY25 -26 to support the arts •The Arts & Culture Commission will review and recommend distribution to align with community priorities and cultural programming needs Shall staff include a $200,000 recurring allocation for the arts in FY25 -26? 27 NEW REQUIREMENT: ASSEMBLY BILL 2561 28 NEW REQUIREMENT: ASSEMBLY BILL 2561 Full -Time Staff Vacancies as of January 31, 2025 29 NEXT STEPS May 6 Preliminary results of Budget Priorities Survey & other outreach efforts, draft General Fund Summary May TBD Draft versions: Budget, Miscellaneous Fees & Capital Improvement Program (CIP) May 20 Incorporating City Council feedback & alignment with community priorities June 3 Public Hearing, Approve Resolution of Classification & Compensation Plan, Adoption of Miscellaneous Fee Schedule & CIP June 17 2nd reading to adopt Budget Ordinance 30 31