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the current European debt crisis and turmoil in the Middle Eastern countries have the potential <br />to negatively impact the US financial markets and thrust the US, economy into another <br />downward spiral. On the home fron� the most critical sector that could have a major impact <br />on the nation's economic recovery is comnnnercia| real estate. Many institutions are feeling the <br />effects of commercial real estate loan failures. It is estimated that the largest commercial real <br />estate loan losses will occur in 2011 and could be as high as $200-$300 billion. How the <br />financial markets react to these events will be important for a sustained recovery. <br />Even with these events |oorning on the horizon, the economy appears to be recovering. <br />Although commercial real estate continues to poses great concern, residential real estate ha,s <br />shown some indication that the worse |s behind us. Unfortunately, the City will continue tofeel <br />the effects of lower property values for a few years. In addition, unemployment has eased but <br />is still at unprecedented high levels. The national average remains at 8.8%, California at 12.3%� <br />while Santa Ana 1s estimated at 14.3Y8. Obviously, these rates have a direct impact on <br />consumer spending and on the City's sales tax revenue. Overall, we anticipate a very slow <br />recovery and growth in our revenue. In the meantime, ensuring long-term financial stability <br />for Santa Ana will require the courage to significantly reduce expenditures. In order to provide <br />quality City programs and services so they are financially sustainable in the future, the City must <br />look to reinvent itself through the elimination of redundancies, by consolidating programs, <br />contracting out, and seeking assistance from the various bargaining groups on wages and <br />benefits. <br />Budget s <br />The total estimated revenue for all city funds for FY2O11,2O12is $440,323,,344. Of this amount <br />$84.2 million represents the water, sewer, sanitation and refuse funds; $35 million comes from <br />grants and other special revenues for restrictive programs; $22.6 rnUUVn from grants for capital <br />projects; $88.5 million oznmes from redevelopment and housing assistance; and $21O million <br />represents the General Fund. <br />Total budgeted appropriations. for all city funds for 2011-2012ls$459,3G1,890 which |sa <br />decrease of2.Q% (or $13.lM) when compared to the prior year budget. Fiscal year 2Ol1'2O12 <br />budget includes a capital inmprovemnent budget of $25.4 million; a water., sewer,, sanitation and <br />refuse budget of $92 million; redevelopment and housing budget of $89.8 million; special <br />revenues and grants of$42.1million; and a General Fund budget of$2lOmillion. <br />The General Fund budget supports the functions most cornnnonk/ associated with city <br />government: police, fire, recreation, Ubrnp& planning and building, street maintenance, and <br />general city administration. These services are being provided to an increasing population. <br />According to the State Department of Finance, Santa Ana's popu|atlon in January 2011 was <br />325,228 which is over a 50 percent increase over the past 20+ years. The General Fund's four <br />largest revenue Sources comprise 5496of total General Fund revenues. Those revenue Sources <br />are Sales Tax (17.1%), Property Tax (13%), Property Tax in Lieu of Motor Vehicle Fees /I2%\ and <br />Utility Users Tax (11.9%). <br />3 <br />