Agenda Packet_2026-03-03 - Laserfiche WebLink

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Proposed Fiscal Year 25-26 Mid-Year Budget Update, Appropriation Requests, Workforce Changes, and Capital Improvement Program Amendment March 3, 2026 Page 4 lagged countywide and statewide trends. During the summer, receipts from grocery stores and cannabis retailers also declined, reflecting continued pressure on household budgets and shifts in consumer spending. Local Sales Tax (Measure X) The local sales tax revenue estimate for the fiscal year was $83.9 million. Based on sales tax receipts from two completed quarters and updated information from the City's sales tax consultant, staff reduced the revenue estimate by $811,300, bringing it to $83.1 million. Local sales tax revenues declined 1% during the period, with weaker results from general goods, restaurants, gas stations, and building construction suppliers. The decline reflects softer consumer spending and reduced activity across these categories during the summer months. Planning Permit and Plan Check Revenues Based on year-to-date collections through December 2025, planning permit and plan check revenues are trending above the FY 25-26 budget estimates. As a result, staff has increased the planning permit revenue estimate by approximately $824,320, driven by continued activity on several large residential and mixed-use development projects, including The Village Santa Ana and projects in the Metro East area such as Think Together Residential, as well as increased permitting activity as projects advance through entitlement milestones. Plan check revenues are also performing above budget and staff increased the revenue estimate by approximately $339,430. This increase reflects a higher volume of plan submittals for new industrial projects, including the South Coast Technology Center, and associated commercial tenant improvement projects, as previously entitled projects move into construction. These adjustments are based on actual collections through December 2025 and staff will continue to monitor revenues through the remainder of the fiscal year. Property Tax In-Lieu of VLF The City received the January payment for property tax in lieu of Vehicle License Fees (VLF), which represents 50% of the State's annual allocation. This payment enables staff to accurately forecast total fiscal-year revenue. Following the receipt of the January payment, staff revised the annual revenue estimate, increasing it by $646,100, bringing the total budget to $46,485,660. City Events Sponsorship Revenue The Parks, Recreation, and Community Services Agency (PRCSA) actively pursued sponsorship opportunities to help offset City event costs and reduce the overall financial impact on the General Fund. As a result, PRCSA is requesting recognition of$89,941 in City Council 20 — 4 3/3/2026