Item 23 - Public Hearing - Ordinance to Adopt the FY 2026-27 Budget, Resolution Changes to the City’s Classification & Compensation Plan, Uniform Schedule of Misc Fees, 7-Year Capital Improvement Program, and the City’s Annual Update

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Proposed Fiscal Year 2026-27 City Budget, Changes to the City's Classification and Compensation Plan, Uniform Schedule of Miscellaneous Fees, and the Seven-Year Capital Improvement Program June 2, 2026 Page 2 4. Adopt the Seven-Year Capital Improvement Program (CIP) beginning FY2026-27 through FY2032-33, as required by the Orange County Transportation Authority (OCTA) for Measure M2 eligibility. 5. Deposit $1,500,000 into the Section 115 Pension Trust Fund as part of the City's Pension Debt Strategy. GOVERNMENT CODE §84308 APPLIES: No DISCUSSION The City Council provided budget direction on April 7, May 5, and May 19, 2026, and staff incorporated that feedback into the proposed Fiscal Year 2026-27 budget. The proposed budget was developed with input from the City Council and through community engagement efforts beginning in January 2026 to help ensure that resident priorities and neighborhood needs were reflected in funding recommendations. Outreach efforts included visits to all six Council Wards, participation in 14 Listening Tour visits held throughout the community, and two citywide events designed to encourage broad public participation. In addition to in-person outreach, the City used online surveys and social media to expand engagement. Collectively, these efforts resulted in nearly 2,100 survey submissions and participation by 282 attendees at various community meetings and events. The annual operating budget is the City's primary financial and policy document, reflecting the City Council's priorities and allocating resources to support essential public services, infrastructure investments, and community programs for the upcoming fiscal year. Earlier budget projections indicated a $19 million General Fund deficit. Through a combination of expenditure reductions, revenue adjustments, and other balancing measures, staff closed the estimated deficit and prepared a balanced proposed General Fund budget. The proposed FY26-27 budget was developed to maintain core City services and achieve a balanced General Fund budget without layoffs or furloughs of full-time employees. As required by Santa Ana City Charter Sections 604 and 605, the City Manager proposes the FY26-27 Budget for City Council consideration during this Public Hearing. Staff has prepared estimates of available resources, including beginning fund balances and estimated revenues, to support ongoing public services and capital improvement projects. Santa Ana Charter Section 607 requires the City to adopt the annual budget by July 31. If the Council approves the recommended action, the Ordinance will return to the City Council on June 16 for consideration and adoption. General Fund Summary