Item 10 - Fiscal Year 2024-25 Annual Reports

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CITY OF SANTA ANA, CALIFORNIA AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. Measurement Focus and Basis of Accounting (Continued) AQMD's financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. C. Budgetary Accounting The City and its component units operate on a fiscal year that begins on July 1 and ends on June 30 of the following year. On or before June 15 of each year, the City Manager recommends and submits to the City Council a proposed budget for the ensuing fiscal year. This recommendation is based on a comprehensive financial plan prepared by the heads of the various offices, departments, agencies, and component units of the City. The proposed budget is presented to the City Council during a public meeting, typically held in early June. Before this meeting, a notice of public hearing is published in a local newspaper in May and/or June to inform residents of the opportunity to participate in the budget process. During the public hearing, members of the public are allowed to comment on the proposed budget. Following public testimony, the City Council may modify the proposed budget by the affirmative vote of at least five (5) Council members. After the conclusion of the public hearing, the City Council may continue its deliberations on the proposed budget and make such revisions as it deems necessary. On or before June 30, the City Council meets to adopt the budget, as amended, by a supermajority vote of five (5) of the seven Council members. Pursuant to the City Charter, the budget must be adopted no later than July 31 of each year. Upon adoption, the budget serves as the legal authority for the various departments and agencies to expend funds in accordance with the appropriations approved by the City Council and subject to financial controls established by the City Charter. During the fiscal year, the budget may be amended through an appropriation adjustment. Such amendments require a supermajority vote of at least five (5) members of the City Council. When appropriations are allocated to offices, departments, or agencies for more than one activity or program, the appropriations are considered in the aggregate with respect to the total expenditures authorized for that office, department, or agency within each fund. They are limited to purposes consistent with the revenue sources of such funds. The City Manager is authorized to amend City Council —approved appropriations when such revisions are necessary and proper, provided that the revisions do not increase the overall appropriations approved by the City Council. The City Manager does not have the authority to increase the total budget or appropriations without Council approval. (7)