HomeMy WebLinkAboutItem 19 - Early Direction for the Fiscal Year 2024-25 Budget (continued from the meeting on 3-19-2024) Finance and Management Services
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Item # 19
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
April 2, 2024
TOPIC: Early Direction for the Fiscal Year 2024-25 Budget
AGENDA TITLE
Early Direction for the Fiscal Year 2024-25 Budget (continued from the meeting of
March 19, 2024, Item No. 26)
RECOMMENDED ACTION
Provide direction for preparation of the proposed FY 2024-25 budget.
GOVERNMENT CODE §84308 APPLIES: No
DISCUSSION
This Early Direction agenda item is the beginning of City Council deliberations for the
upcoming FY 2024-25 budget. This report has two purposes: provide information that
impacts the budget in FY 2024-25 or the future, and request direction from City Council.
The City Council is scheduled to consider the proposed budget in May and hold a public
hearing in June.
Budget Outreach
On December 19, 2023, the City Council approved the Budget Calendar and
Community Engagement Plan for the FY 2024-25 budget process. To date, the
following actions have been taken:
•The budget survey was posted to the City’s website on January 8 in three
languages.
•On February 12, the City began Social Media posts regarding budget
engagement, including the simulation tools.
•Community outreach at events began on February 3.
•During the February 20 City Council meeting, staff shared a new budget video
with the City Council and the public.
•Neighborhood meetings began on February 22.
•A postcard with engagement information was mailed to every household on
March 1.
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Through March 3, the City has received 719 budget survey responses. Staff will
continue community engagement and expects to present summary results to the City
Council on May 7.
Budget Process
The City will conduct its internal budget meetings with departments from March 25 to
April 5 to receive supplemental budget requests and staff priorities. After comparing the
requests to City Council priorities received during Early Direction and community
priorities received during budget outreach, Finance will work with the City Manager’s
Office to build a proposed budget for City Council consideration in May.
City Council Priorities Identified to Date
City Council Members have identified some of their top priorities to address during the
budget process. Exhibit 1 includes a list of those priorities, along with additional
information and recommendations for each.
GENERAL FUND
The recurring portion of the FY 2023-24 (current year) General Fund budget is
summarized below.
Revenue $400,824,370
Spending ($400,811,075)
Net Recurring Activity $13,295
With costs increasing faster than revenue sources, we expect the FY 2024-25 budget
will be difficult to balance. Receiving Early Direction from City Council will help staff
develop a balanced proposed budget that meets the needs of the community.
General Fund Ten-Year Outlook
The General Fund Ten-Year Outlook has been updated with the latest information
available. The following assumptions were used:
•Only recurring revenues and spending were included;
•Property Tax estimates from consultant for FY 2024-25 through FY28-29, 3%
increase thereafter;
•Sales Tax estimates from consultant for FY 2024-25 through FY 2029-30, 3%
increase thereafter;
•Inflation Factor for all other revenues: increase of Consumer Price Index as
forecasted by CA Department of Finance for FY 2024-25 through FY 2026-27
(2.4%, 2.6%, 2.7%) and 3% thereafter;
•Labor at the top of the range: negotiated increases of 3% for FY 2024-25,
Inflation Factor thereafter;
•For labor below the top of the range, use the same 3% as above + 5% merit step
increases;
•Orange County Fire Authority contract increase of 4.5% annually;
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•Contribution to OC Street Car operations beginning November 2025, increasing
by Inflation Factor;
•Debt retirements (Police Building, City Hall Annex, 800Mhz communication
system, Streetlights);
•Employee pension unfunded liability contributions as estimated by CalPERS,
increasing due to the CalPERS investment losses in FY 2021-22;
•Contributions to, and uses of, the Pension Stabilization Account have been
included to smooth the pension debt fluctuations; and
•Inflation Factor for all other spending.
The graphical results of the Outlook indicate that expenditures are increasing faster
than revenue, creating a deficit beginning in FY 2025-26. When the Measure X rate
decreases in 2029, that deficit will increase significantly.
There are three basic options to rebalance the budget in the future:
1. Request voter approval for a revenue measure;
2. Reduce service levels to fit within available resources; and/or
3. Encourage new development to increase the tax base in the City, which may also
necessitate increased spending to serve additional residents and businesses.
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The FY 2023-24 Measure X spending plan is attached to this report as Exhibit 2. The
detailed spending plan identifies expenditures that may be considered if and when it
becomes necessary to reduce costs to rebalance the budget.
Recommendations from Measure X Oversight Committee
The Measure X Citizens Oversight Committee met on February 21 and March 13 to
formulate recommendations for the FY 2024-25 budget process. Staff expects to
include those recommendations in the April 2 presentation to City Council.
Use of One-Time General Fund Money
As part of the Midyear Budget Report on February 20, staff provided an estimate of
$14,650,726 of General Fund balance available for one-time spending. Staff seeks
direction from City Council regarding one-time spending to include in the proposed FY
2420-25 budget. Options follow.
•Establish a Measure X sunset stabilization fund, as recommended by the
Measure X Citizens Oversight Committee.
•Make an additional contribution to the employee pension cost stabilization fund to
mitigate future cost increases due to CalPERS investment losses.
•As discussed throughout this report, staff has multiple recommendations for one-
time spending to be included in the proposed FY 2024-25 budget.
Miscellaneous Fees
The City charges fees for services to individuals that do not benefit the public at large
(e.g. building permit). Per state law, the City cannot charge more than its cost to provide
the service. Each year, staff recommends increasing miscellaneous fees to keep up
with the City’s costs of doing business. Last year, the budget included an increase of
4.1%, based upon the increase of compensation for employees providing the services
(both salary and benefits).
The increase of the Consumer Price Index for Los Angeles-Long-Beach Anaheim for
the year ended December 2023 was 4.66%. The employee bargaining groups
negotiated wage increases of 3% for the current fiscal year. In addition, many of the
City’s employees received merit step increases of 5%. Contributions for employee
health insurance increased 8.1% and the City’s normal cost contribution for the
employee pension plan increased by 9.5% for public safety and 11.75% for all other
employees.
Based on this information, an increase of up to 4.66% is substantiated and the City
would maintain compliance with state law. Shall staff include a miscellaneous fee
increase of 4.66% in the proposed FY 2024-25 budget?
Ambulance Transport Reimbursements
As previously reported on May 16, 2023 and with the Midyear Budget report on
February 20, 2024, the City has benefited from a new federal program that provides
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higher reimbursement rates for Medicare and Medi-Cal transports, which comprise
three-quarters of the ambulance transports in Santa Ana.
The California Department of Health Care Services (DHCS) developed the Public
Provider Ground Emergency Medical Transport (PP-GEMT) Intergovernmental Transfer
Program (IGT) program to provide increased reimbursements, by application of an add-
on increase, to emergency medical transports provided by eligible public GEMT
providers. The program became effective on January 1, 2023 and requires an overall
level of participation from local agencies in the form of discretionary contributions to
fund a portion of the increased reimbursements. Based on the latest information we
have, this new program has nearly doubled the revenue to the City; yet the City is the
only remaining large agency in the state that has not paid the PP-GEMT contribution,
estimated to be $2.9 million annually.
The City’s consultant AP Triton is working to complete an Emergency Medical Services
Transportation and Optimization Study. The Study includes recommendations to
increase and establish fees to be reimbursed by PP-GEMT and insurance companies.
In addition, it may be beneficial for the City to have an ongoing consultant arrangement
to help manage the ambulance contract and maximize transport reimbursements. If staff
pursued these fee recommendations, revenue may exceed $13 million (current estimate
is $10 million). The increased revenue could be used to pay for the PP-GEMT
contribution and consulting assistance.
Shall staff pursue the fee increases recommended by AP Triton and include allocations
for the PP-GEMT contribution and consulting assistance in the FY 2024-25 budget,
offset by increased revenue?
Parking Validations
The City Clerk provides parking validations for all who attend City Council meetings and
park in the Civic Center garage. The cost of providing these parking validations is
approximately $27,500 annually, which is not budgeted. To date, the cost has been
absorbed with other budgetary savings.
Shall staff continue to provide parking validations and include the cost in the proposed
FY 2024-25 budget?
Parking Enforcement Program
In addition to Parking Control Officers, the Parking Enforcement program utilizes
services from two different contractors: Data Ticket and LAZ Parking California. These
contracted services help the City generate $4.9 million of annual parking fine revenue
with a current year Parking Enforcement program budget of approximately $3 million.
The current year budget allocated for Data Ticket automated parking citation and
processing services is $368,200 based on the original agreement approved in February
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2022. On January 16, 2024, staff proposed and City Council approved an amendment
to the contract to provide for increased postage costs and an increased volume of
delinquency processing. The amended cost of annual service is approximately
$700,000.
Shall staff include an allocation of $700,000 in the proposed FY 2024-25 budget (an
increase of $331,800 from baseline budget) to maintain service levels and process
delinquency payments? Or shall staff seek an option with a lower level of service to fit
within the baseline budget of $368,200?
The current year budget included an allocation of $826,260 for the LAZ parking
enforcement contract. The highest-scoring proposal for services included a cost of
$1,153,368. The Police Department reduced the proposed service hours to arrive at a
contract cost of $938,444 per year, which was approved by City Council on June 20,
2023. The Police Department has found that the reduced level of service is not sufficient
for the City’s needs.
Shall staff include an allocation of $1,153,368 in the proposed FY 2024-25 budget (an
increase of $327,108 from baseline budget) to return to the previous level of service? Or
shall staff maintain the decreased level of service and include an allocation of $938,444
in the proposed FY 2024-25 budget?
Downtown Parking Enterprise
Prior to the COVID-19 pandemic in March 2020, the Parking Enterprise fund had been
spending down the accumulated fund balance for three years to install automated
parking garage equipment, new parking meters, and lighting improvements. Due to the
decrease in parking rates requested by the downtown business community, the Parking
Enterprise has received multiple General Fund subsidies to backfill the cost of
operations. The table below illustrates the current deficit with variable parking rates.
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If the City continues providing reduced parking rates, the estimated General Fund
subsidy necessary for FY 2024-25 will be $2.2 million. A significant portion of the
Parking Enterprise includes Downtown Enhancement with the Clean and Safe program
which undertakes functions such as power washing and other debris pick-up.
Reinstating rates to fund the Parking Enterprise is important for the atmosphere and
upkeep of amenities in Downtown Santa Ana.
Shall staff reinstate the downtown parking rates to avoid another General Fund subsidy
in Parking Enterprise?
Zoo Operations
The costs to operate Municipal zoos, aquariums, and museums are typically subsidized,
based on the educational and recreational benefits to residents. The Santa Ana Zoo has
an annual operations budget of approximately $3 million. This does not include any
capital projects such as new or rehabilitated exhibits and safety improvements. Last
year, revenue reached $1.8 million, the most ever received. Therefore, the Zoo currently
requires an annual subsidy of approximately $1.2 million (or 40%) for recurring
operations. In contrast, the City’s General Fund contributes nearly $1.7 million annually
to the Bowers Museum for operations.
The Zoo continues to find creative ways to increase revenue for a higher level of
operations that support accreditation. On February 20, the City Council approved a
concession agreement that includes alcohol sales, with the Zoo receiving a revenue
share ranging between 6% and 10% of sales. The Zoo is considering implementation of
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other revenue-generating programs such as yoga in the Zoo and behind-the-scenes
animal encounters. The Zoo will host its second Brew at the Zoo event this year.
Last year, the Zoo increased admission prices by $1. Due to the extensive ongoing
construction that includes the Giant River Otter habitat, staff does not plan to request
another admission price increase for FY 2024-25. However, the City may need to
consider an admissions increase in the following year. Except for the Orange County
Zoo which has an unusual heavily subsidized admission of $2 per person, the Santa
Ana Zoo is still a relative bargain when compared to other similar attractions. Any future
staff proposal will include details and benchmarking.
To provide a recurring allocation for deferred maintenance and other capital needs, staff
will consider recommending a Zoo subsidy increase from $1.4 million to $1.7 million
with the proposed FY 2024-25 budget.
Vehicle Incentive Program
In 2019, the City Council approved the Santa Ana Vehicle Incentive Program, which
provides a $500 dollar rebate to residents who purchase a new or used vehicle at one
of 10 participating Santa Ana auto dealerships. The program was developed at the
request of the auto dealers, as they were concerned with the impacts that the
November 2018 Measure X sales tax increase would have on auto sales. This 5-year
program is currently funded by the General Fund and the agreement is set to expire in
March 2024. The dealerships have requested a 10-year extension of the program at $1
million per year. Actual program expenditures since inception and the current year
budget follow.
FY19-20 $937,500
FY20-21 $860,000
FY21-22 $649,500
FY22-23 $651,500
FY23-24 to date $606,000
FY23-24 budget $1,700,000
Staff does not recommend extending the program. As an alternative, City Council could
consider an extension to March 31, 2029 (the last day of the 1.5% Measure X rate), with
a smaller funding allocation.
Shall staff prepare an extension of the program for City Council consideration and
include a Vehicle Incentive Program allocation in the proposed FY 2024-25 budget?
City Events
The City Events budget for the current year includes a $1,581,640 allocation from
recurring revenue and $900,000 from one-time resources. The FY 2024-25 draft
proposed budget is $1,605,700 with no one-time allocations. This does not include
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Public Safety support for these events; which to date, has been absorbed by the Public
Safety budgets using staff vacancy savings.
Event Approximate
Current Year
Allocations
Current Year
One-Time
Allocation
Proposed FY24-25
Allocations
Easter $35,000 $45,000
Juneteenth $55,000 $41,000
Movie Series $65,000 $70,000
Fourth of July $105,000 $100,000
Concert Series $60,000 $70,000
Birch Series $18,640 $0
Indigenous Peoples’
Day
$30,000 $31,000
Chicano Heritage $145,000 $125,000
Fiestas Patrias $530,000 $475,000
Santa Ana Holidays $290,000 $900,000 $240,000
Mid-Autumn Festival $60,000 $75,000
Recreation Section
Events
$3,000 $117,700
Tet Festival $95,000 $75,000
Zoo Events $10,000 $36,000
Shakespeare $10,000 $10,000
Santa Ana Fun Run $70,000 $85,000
Pacific Symphony $0 $10,000
Totals $1,581,640 $900,000 $1,605,700
Staff welcomes City Council direction regarding the City Events budget.
INTERNAL SERVICE FUNDS
During the 2023 budget process, staff shared concerns with the City Council regarding
the fiscal health of internal service funds. These funds provide a centralized service and
charge departments for use of the services (e.g. Building Maintenance). Over the last
several years, the City has taken steps to solve long-term issues for each fund. Most
recently on December 19, City Council approved a one-time $2.9 million subsidy for the
Engineering Division. There are four potential forthcoming requests for internal service
funds, discussed below.
Central Stores
Due to just-in-time availability from resource vendors, the use of Central Stores has
decreased over the years. With decreased usage, the City has lost economies of scale
and there is no longer a cost benefit of maintaining a Central Stores. At this point, there
is only a need to keep specialized water operations equipment on hand. Therefore, staff
is preparing to close the Central Stores internal service fund by the end of the current
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fiscal year and transfer the remaining inventory and staffing to the Water Enterprise. In
preparation for the closure, the City recently ended its relationship with Shamrock
Supply Company for consignment inventory. Account reconciliations indicate that a one-
time subsidy ranging from $500,000 to $800,000 will be necessary to close the fund.
Once the fund is closed, gas and diesel sales will move to the Corporate Yard fund.
Corporate Yard
In recent past, the City’s Corporate Yard has been underutilized, and has not been able
to charge enough usage fees to cover its costs. In addition, the Corporate Yard recently
incurred significant costs to mitigate hazardous waste. Therefore, we expect to request
a one-time subsidy ranging from $500,000 to $700,000 to make the fund whole. Going
forward, Public Works is exploring potential use from other governmental agencies to
increase revenue for the Corporate Yard; and as noted above, the operation will benefit
from fuel sales.
Information Technology
The Information Technology internal service fund has an estimated spendable fund
balance of $12 million to be used for a variety of system upgrade projects, including a
new land management system and a new Enterprise Resource Planning (ERP) system.
A new ERP system would serve Accounting, Payroll, Human Resources, and
Cashiering. The existing systems were implemented roughly 20 years ago, and were
simply upgrades of the previous mainframe versions. The City recently received ERP
system proposals and is in the process of evaluation. Although it is too soon to identify a
specific amount, the latest estimate is $7.65 million. Additional funding may be
necessary to purchase the system, implement it, and provide training.
Equipment Replacement Fund
The City has a large fleet of vehicles used to provide services to the public, comprised
of both owned and leased vehicles. On December 19, the City Council approved
renewal agreements with Enterprise Fleet Management for leased vehicles used in both
the Police Department and the Planning & Building Agency (PBA). There are a total of
18 leased vehicles used in PBA, all with lease terms that end during FY 2024-25. When
vehicles are held for the full useful life of the vehicle, leasing becomes a more
expensive option than purchasing.
The estimated cost to purchase 18 new vehicles for PBA is approximately $1 million,
due to the new state law requiring a mix of electric vehicles in the fleet. To minimize
long-term costs, shall staff include a one-time spending allocation in the proposed FY
2024-25 budget to purchase replacement vehicles for PBA?
RESTRICTED FUNDS
Cannabis Public Benefit Fund
Two-thirds of Cannabis Tax revenue related to adult-use and supply activities is
transferred to the Cannabis Public Benefit Fund each year pursuant to Santa Ana
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Municipal Code Section 13-203. To date, this funding has provided for both recurring
programs and one-time projects supporting youth services and enforcement activities.
The Cannabis tax rates were reduced effective January 1, 2023, resulting in a decrease
of revenue transferred to the Cannabis Public Benefit Fund.
Now that we have a full year of experience with the decreased tax rates, it appears that
ongoing revenue is approximately $9.4 million and the recurring baseline budget is
approximately $9.8 million. The accumulated fund balance was able to absorb the
spending deficit for FY 2023-24, but the recurring budget must be rebalanced for FY
2024-25.
A snapshot of recurring spending programs follows. Approximately $4.2 million is
programmed for youth services and approximately $5.6 million is programmed for
enforcement activities.
Li brary Book Mobil e 135,360
Li brary Di gital Subscri pti ons & Conte nt 174,540
Li brary Hotspots and Chromebooks Data Pl ans 295,460
Li brary Li brary Staf fi ng & Support 271,110
Li brary Li brary Youth Programs/Eve nts 98,530
Re cre ati on Recre ati on & Zoo Staff ing & Support 2,031,620
Re cre ati on Zoo and You 114,880
Re cre ati on Zoo Nature Ce nter 70,610
Re cre ati on Aquatics 102,280
Re cre ati on Aquatics Mai ntenance 40,000
Re cre ati on Teen Excursi ons 62,510
Re cre ati on Recre ati on Mobi l e 8,750
Re cre ati on Recre ati on Events 5,350
Re cre ati on Recre ati on Youth Programs 29,050
Re cre ati on Internshi p Program Wage s & Support 742,360
CAO Ci ty Attorney Staffing & Support 253,080
CAO Legal Service s Contracts 300,000
PBA Code Enforceme nt Staffing & Support 1,172,520
PBA Code Enforceme nt Equi p/Supply 18,000
Pol i ce Pol ice Staff ing & Support 2,359,350
Pol i ce Evi de nce Warehouse 132,400
Pol i ce Body Worn Came ra Program (ye ar 2 of 5)1,029,150
Fi nance Fi nance Col lecti ons Staffi ng & Support 107,440
Fi nance Cannabis Audi ti ng Contracts 255,550
Total Expe nditures - Ori gi nal Budget 9,809,900
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Staff expects to propose a balanced budget for FY 2024-25, which may result in
reduced spending for one or more of the programs listed above. Staff welcomes City
Council input regarding programs that should be considered for reduction.
Opioid Settlement Money
To date, the City has received $1.75 million of opioid settlement money. The City has
also received an invoice for attorney’s fees of $248,208 to be paid from the settlement
money, and the City used $1 million of this money to help purchase the Carnegie
Shelter, leaving a balance of $0.5 million. The City will continue to receive settlement
payments of at least $400,000 annually through 2039. The money is highly restricted to
specific opioid-related expenditures.
Currently, staff is planning to purchase naloxone for first responders to use and
distribute once the state no longer provides it to local government for free. The City’s
Homeless Services Division Manager has indicated that we have a need for securing
beds at College Hospital or Phoenix House for homeless individuals who want to
detoxify from Fentanyl. The process of detoxification is very difficult and is best done
with hospital rehabilitation.
Shall staff explore the feasibility of using this funding for medical treatment for homeless
individuals with an addiction to Fentanyl who wish to detoxify?
Gas Tax
The City receives allocations from the state Highway Users Tax Account (HUTA,
commonly known as Gas Tax) and the Road Maintenance and Rehabilitation Account
(RMRA). Both HUTA and RMRA are cents-per-gallon taxes. Therefore, if consumption
decreases, so does the City’s revenue allocations.
The City expects to receive $15.8 million from these allocations in the current fiscal
year. Next fiscal year, the estimate from the League of California Cities is $16.5 million
or 4.4% more overall. The increase is short-lived.
The California Legislative Analyst Office (LAO) released a report in December 2023
regarding the impact of California’s climate policies (e.g. mandating more electric
vehicles) on transportation funding such as HUTA and RMRA. The report states: “Most
significantly, policies aimed at increasing the adoption of ZEVs will decrease the
consumption of gasoline and diesel fuels, and consequently reduce the associated tax
revenues that currently support the state’s transportation system.” The report goes on to
estimate state transportation revenues will decrease by 31% over the next decade, and
recommends the California Legislature develop a long-term plan.
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The City’s HUTA and RMRA allocations currently fund the following expenditures.
Debt Service for $68 million of local street improvements
beginning in 2007 (debt is scheduled to be paid-off in 2040)
$3.2 million
Traffic Signal Maintenance $2.6 million
Median Landscaping $1.2 million
Roadway Maintenance $2.0 million
Street Projects (SB-1 spending plan approved by City Council
each year)
$7.7 million
Recurring Programs Paid by Gas Tax Fund $16.7 million
In the last five years, since the passage of Measure X, the City’s General Fund began
paying for the following recurring roadway maintenance expenditures.
Streetlights $1.0 million
Alley Improvements $1.5 million
Sidewalk and/or Street Repair $1.0 million
Traffic Calming $1.0 million
Median Landscaping $0.5 million
Street Paving $2.0 million
Recurring Programs Paid by Measure X in the General Fund $7.0 million
Additional General Fund spending may become necessary in the future with the
eventual decrease of Gas Tax revenue, yet the Measure X funding source is scheduled
to decrease by 33% in 2029.
Revive Santa Ana
The Revive Santa Ana spending plan is primarily funded with the City’s $128 million
allocation from the federal American Rescue Plan Act (ARPA), which is one-time
money. To date, the City has spent and obligated total funding of $70.5 million. Many
projects are in the design phase and are scheduled for contract award during 2024. The
deadline to obligate the remaining funding is December 31, 2024. The deadline for final
spending is December 31, 2026.
Staff is performing an internal review of project status to determine if there are project
savings available to fund additional items. The following is a short list of unfunded high-
priority projects that qualify for ARPA money.
•The Main Library renovation project has a funding shortfall of $2.3 million for
furniture and fixtures.
•The Zoo Master Plan includes a Zoo Primate Forest. Funding of approximately
$1 million is needed to prepare the design and construction documents, to
ensure the project is shelf-ready for grant and other restricted funding
opportunities.
•Recreation & Parks has identified a need for $2.1 million of funding for park
lighting, as detailed below.
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o Delhi Park: upgrade existing baseball field lights, install new LED lighting
for two additional multi-purpose fields including security lighting, and
lighting for the playground and fitness court.
o Angels Park: install new multi-purpose LED field lighting, security lighting,
basketball court lighting, and playground lighting.
o Adams Park: retrofit existing poles and fixtures to LED including security
lighting, and lighting for the restrooms and playground.
o Rosita Park: retrofit existing poles and fixtures to LED including security
lighting, and lighting for the playground and fitness court.
•Cypress Fire Station project with an estimated cost of $4.3 million with no
identified funding source.
Federal ARPA funding for staffing must be spent by December 31, 2024. In other
words, the only staff expenditures that will be accepted from January 1, 2025 through
December 31, 2026 are those related to compliance and reporting activities. ARPA-
funded staff positions below are not eligible for expenditure after December 31, 2024.
Position Service Provided Annual
Cost
PAAL Assistant Director Plans and supervises recreational and
educational after-school programs, teen
activities and mentoring programs.
$112,620
Associate Engineers (2)Development of Plans, Specification, &
Cost Estimates, including consultant and
contractor oversight. Managing various
contracts related to Park & Facility
projects.
$327,230
Public Works Projects
Manager (under-filled)
Scope development for projects,
contractor oversight, and contract
management for various Park & Facility
projects.
$132,290
Public Works Projects
Specialist
Scope development for projects,
contractor oversight, and contract
management for various Park & Facility
projects.
$149,840
Associate
Parks/Landscape Planner
(under-filled)
Implementation of the Parks Master Plan,
including managing architects and
consultants agreements for various park
planning efforts.
$112,750
Assistant Parks/Landscape
Planner
Implementation of the Parks Master Plan,
including managing architects and
consultants agreements for various park
planning efforts.
$112,200
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Economic Development
Specialist (50%)
Bilingual Business Retention and
Attraction for businesses including
specialty outreach and grants coordination
with small businesses and microenterprise
efforts for start-ups.
$73,950
Total $1,020,880
Shall staff include an allocation of approximately $0.5 million in the proposed FY 2024-
25 budget to continue funding these positions for January 1 through June 30, 2025, with
a future annual recurring cost of approximately $1 million?
Water Enterprise Revenue Bonds
In 2019, the City prepared a water rate study, which indicated debt (revenue bonds)
would be necessary to meet the capital needs of the system. Since 2019, the water
enterprise has been spending down an accumulated fund balance for water
infrastructure improvements.
The rate study consultant’s latest estimate of planned improvements that remain
unfunded is $30.2 million. In addition, the City is currently installing smart meters as part
of the Advanced Metering Infrastructure (AMI) project. The latest information suggests
we have an $11 million funding shortfall to complete the project. Finally, the City may
have an opportunity to refinance the outstanding $8.9 million of water bonds issued in
2014.
The City has assembled a financing team to structure a proposed revenue bond issue.
The debt would be secured by water enterprise revenue, and therefore would only
require City Council approval. The financing team would only be paid if bonds are
issued, and payment would come from the bond proceeds.
Staff expects to return to the City Council prior to June 30 to consider a
recommendation to proceed with a proposed debt financing.
FISCAL IMPACT
There is no direct fiscal impact at this time, as the recommended action would only
provide direction to staff. City Council is scheduled to consider the proposed FY 2024-
25 budget in May and take action in June.
EXHIBIT(S)
1. City Council Priorities
2. FY23-24 Measure X Spending Plan
Submitted By: Kathryn Downs, FMSA Executive Director
Approved By: Tom Hatch, Interim City Manager
EXHIBIT 1
Page 1 of 6
City Council Priority Information and Recommendations
Bristol Street Rehabilitation
– Make it a priority to wrap
up the project
The Bristol Street Phase 4 project has a budget of $20,667,120,
entirely funded from restricted money sources. The latest estimates
indicate there is a $680,000 funding shortfall for this project.
Construction is expected to begin towards the end of 2024, as the
project has required coordination with 6 utility companies for a single
trench in the roadway.
Staff plans to include a one-time spending allocation of $680,000 in
the proposed FY24-25 budget.
Repair Civic Center Drive
from Flower to Bristol
Public Works is planning a project for FY24-25 to repair Civic Center
Drive from Shelton to Flower for an estimated cost of $1,220,000 from
Gas Tax revenue. If the project were to be expanded to Bristol Street,
the project estimate would increase by $900,000 and additional
funding would be necessary.
Repair Raitt Street from
Civic Center to Washington
This project has not yet been programmed or funded. The street is
concrete, and the estimated cost to demolish and replace is $3 million.
Repair 5th Street from Raitt
to Fairview
This project has not yet been programmed or funded. The estimated
cost to repave is $1.6 million.
Safer Streets in Various
Locations
Chestnut and Ross: A section of the street is currently being studied
for appropriate improvements. We have funding if stop signs or speed
humps are warranted, and no additional funding would be necessary.
McFadden from Flower to Main: We have a Capital improvement
project going out to bid by June that will install protected (and striped)
bike lanes along McFadden in those limits. The street will be repaved
and striped as part of project.
Center from Edinger to McFadden: We have received a grant for the
Safe Routes to Schools improvements on Center between Edinger &
Wilshire. Improvements do not extend all the way to McFadden.
Additional bulb outs, etc. toward McFadden would require
approximately $500,000 in new funding.
Pine near Santa Ana High School: We will need to evaluate this section
of street. We have funding if stop signs or speed humps are
warranted, and no additional funding would be necessary.
Alley Improvements The General Fund has a recurring alley improvement program of $1.5
million annually. Staff has identified 14 miles of alley reconstruction
needed, which will take 25 years to work through with the annual
budget allocation.
Angled Parking Generally angled parking is not feasible, and currently there are no
identified locations that warrant it.
Designated Parking Stations The permit parking study will evaluate shared parking opportunities
and will identified potential locations.
ADA Ramp Improvements There is no dedicated stream of funding. Local street ramps are
approximately $10,000 each to construct. Staff would recommend an
EXHIBIT 1
Page 2 of 6
allocation of $250,000 to $500,000 to install ramps in a meaningful
strategic area.
Various Traffic Calming
Measures
Round-about for Memory and Flower – the City has received
grant for a new Memory Lane Bikeway Project that will change
the intersection geometry and prohibit the ability to install a
round-about.
Candlestick delineators – a budget of $50,000 would be
necessary to replace them in the identified locations. The
enhanced versions would cost approximately $100,000.
Repainting of striping and pavement markers – this is ongoing
maintenance work and redone approximately every 3 years.
An additional $200,000 is needed help expedite the
completion of the repainting cycle and help get us down to a
2-year cycle.
Center Medians – depending on location and size, these may
range from $250,000 to $500,000 each.
Traffic Mitigation in Mabury Park – Staff has evaluated and
found that mitigation is unwarranted at this time.
Stop Sign at a specific location – Staff will conduct a stop sign
warrant and traffic signal warrant. If warranted, $750,000
would be needed to fund a pedestrian hybrid beacon or traffic
signal.
Speed humps on English and Alona – Staff evaluated and
determined they are not warranted. Other locations are
currently being evaluated. Funding is available for qualifying
speed hump locations.
Sidewalk Repairs The budget includes an annual funding allocation of $1 million
for sidewalk repairs. The City’s needs warrant doubling the
budget.
Sidewalk repairs in the Park Santiago neighborhood were
recently completed that addressed the major concerns. This
neighborhood is not scheduled for sidewalk repairs for a few
years. An allocation of $75,000 to $100,000 could address
additional sidewalks in the neighborhood.
Bolivar Circle is in City of Garden Grove. Properties on the
west side of Fairview in this segment are not in the City of
Santa Ana.
Pedestrian Bridge
Improvements
An RFP to assess the condition of the bridge between W River Lane
and W Riviera will be released in next month. The assessment/design
costs are expected to approximate $100,000 and construction costs
are to be determined.
Solar-Powered Lighting
Under Overpass
The Santiago St Bridge in currently in the queue to address.
Neighborhood Lights The Cost of neighborhood street light projects vary by scope but we
can assume about $750,000 per neighborhood.
Faded Neighborhood Street
Signs
Sign replacement is part of ongoing maintenance. City Council can
identify specific locations.
EXHIBIT 1
Page 3 of 6
Fencing on the Canal on
Raitt Street Between
Edinger and McFadden
This fencing is owned and maintained by the County. Staff will
coordinate with the County to request an upgrade from the existing
chain link to wrought iron.
Add a Third Quality of Life
Team
The estimated cost of a third team is $440,000. This includes a
cleaning crew of 2 for a cost of approximately $140,000 and police
support for a cost of approximately $300,000.
Keep Sales-Tax Generating
Areas Clean & Safe
Staff is proposing an increase to the Sanitation Fee to preserve and
enhance Citywide services.
Washington Square
Neighborhood Park
Feasibility Study
The City has received several inquiries from interested property
owners in Washington Square regarding a request for the City to
purchase privately-owned vacant land and develop a neighborhood
park. The property, located behind the Newsong Church at 1010 W
17th, is roughly 1.3 acres in size and surrounded by other residential
uses. A recent property appraisal indicates a value of $3.7 million.
Before considering a land purchase, the City would need to perform a
feasibility study for the possible development of a park at the location.
The cost of a Feasibility Study is estimated to be $100,000, including
preliminary designs and estimates of recurring operations and
maintenance costs. If the City pursues and receives grant money to
purchase the property, there may be a required matching contribution
of up to 50%.
Staff does not recommend moving forward with the feasibility analysis
for several reasons.
Development of a park at 10th & Flower is underway. This
location is approximately 2,000 feet from the parcel noted
above.
The location was not identified in the City’s Park Master Plan.
The parcel is in a neighborhood zoned for Single Family
residences (R1).
The City has recently embarked upon several new park
projects, which will require an increased level of operations
and maintenance during a time when the Measure X rate
decreases. Developing a park on the parcel would increase
ongoing costs.
Stadium Investment to
Produce Revenue
Funding of $500,000 has been earmarked to replace all seats on the
press-box side of the Stadium. Design is underway to close the bowl
and add 2,500-3,300 seats, but we do not yet have construction
estimates.
El Salvador Park Restrooms A restroom renovation project is budgeted with $300,000 of Cell
Tower revenue. Project design is 90% complete and it appears the
project cost may be closer to $400,000. An additional funding request
may be forthcoming. The project could begin as early as July 2024
when the fields are down for turf renovation.
Various Park Improvements There is no funding identified for the following requested
improvements: Riverview lot restoration, new shade
EXHIBIT 1
Page 4 of 6
structures at Cabrillo/Edna/Santiago, new restrooms at
Cabrillo/Portola, Edna Park lot restoration, Santiago Park log
cabin restoration, Riverview bleachers, and stolen park signs.
Hydration stations are funded by cell tower revenue and are
currently in design with construction to follow.
Design is currently underway for a splash pad in Ward 3, but
construction requires funding.
Additional Teen Center The City offers a variety of teen programming and activities in the
existing community centers and library locations. More teen activities
will be added once smaller community centers re-open to the public
(e.g. Logan). In addition, the Delhi Library will have dedicated teen
space and teen programming; and Delhi park lighting has been
identified as a priority use of federal ARPA money, adding more
flexibility to the timing of such programs.
Dual-Use Parks with the
Santa Ana Unified School
District
During the March 4 meeting of the Joint School Collaboration City
Council Subcommittee meeting, there was general interest in future
additional discussions of maximizing the use of public property.
Upgrade Parks & Snack Bars As funding becomes available, staff proposes the highest priority park
projects. The existing budget includes funding for lighting, restrooms,
splash pads, field, and playground improvements at various parks.
The cost of each snack bar upgrade is approximately $95,000,
including new paint and epoxy flooring, stainless steel sink, hot water
heater, electrical and plumbing upgrades, and door/window
replacement. Staff maintains a priority list for Renovation that
includes Jerome, Memorial, Thornton, Riverview, Cabrillo, Adams and
Rosita, which can be addressed as funding becomes available.
Community Garden City Council could direct staff to see if ARPA funding can be used for a
community garden. In addition to identifying a location, staff would
need to determine the feasibility and ongoing cost.
Santa Anita Mural
Restoration
This is a mural on a private building, and addressing it could create an
expectation that all private-building murals be maintained by the City.
Staff has been in contact with interested parties and they are aware of
the options available to them.
Market at Santa Ana Bus
Terminal
This project was included in the Revive Spending Plan. Staff has found
that the location is not feasible for the envisioned farmers market. A
different location could be considered if a farmers market is a high
priority for City Council. A recurring budget would be necessary for
special-event staffing to manage the vendors and the location.
Enhance Recruitment and
Fill Vacancies
A separate staff report on the March 19 agenda proposes to add a
Human Resources Analyst to increase recruiting efforts.
Address Homelessness and
Safety Issues
Increase Grant Writing Staff
The Interim City Manager has directed a reallocation of vacant
positions to provide for a Grant Analyst, 2 additional Code
Enforcement Officers, a Senior Organization Development & Training
Analyst and a Deputy City Manager. These staffing reallocations will
be included in the proposed FY24-25 budget.
EXHIBIT 1
Page 5 of 6
In-House Prosecution
Division
To improve the prosecution services within Santa Ana, the City
Attorney’s Office offers the concept of an in-house Prosecution
Division. Tasks would include the following.
Prosecute misdemeanor offenses occurring in the City of Santa
Ana arising out of violations of City law and certain state laws
as authorized by the Orange County District Attorney.
Draft and file criminal complaints in Superior court.
Conduct office hearings, pretrial hearings, and court and jury
trials.
Represent the People of the State in motions, writs and
appeals.
Provide advice to and train Santa Ana law enforcement.
This Division would include a Nuisance Abatement Program to form a
multi-agency task force designed to identify and find solutions to
neighborhood crime problems. The task force would address problem
property locations within Santa Ana in a comprehensive manner.
Members of the task force would include representatives from the City
Prosecutor’s office, Neighborhood Associations, Santa Ana Police
Department, Code Compliance, and the Housing Department. The
mission would include resolving long-standing problems at particular
locations throughout the City, and educate property owners about
crime and decay from their property. The educational component
would include community outreach.
A Prosecution Division would need to be staffed with the following
positions (annual cost estimates included):
Senior Assistant City Attorney (1), $220,000
Assistant City Attorney (3), $190,000 x 3 = $570,000
Deputy City Attorney (1), $150,000
Senior Paralegal (1), $110,000
Senior Legal Secretary (1), $85,000
Investigator (1), $100,000
The City would derive associated revenue by:
Increased nuisance abatement activity where we can recover
attorney fees, staff costs and impose fines at $5K to $10K per
day; and
A mandatory reimbursement agreement policy to recover in-
house and special counsel fees, consultant costs and staff
costs.
At this time, staff recommends exploring all administrative options to
improve prosecution in the City of Santa Ana before making a
recommendation to prepare a deeper analysis of the in-house option.
In addition, having an in-house Prosecution Division would not
guarantee Court prosecution actions.
EXHIBIT 1
Page 6 of 6
Renters Defense Fund On February 28, the Community Development Commission approved
$150,000 for the Fair Housing Council of Orange County for Fiscal
Years 2024-26. This will be presented to the City Council at the May 7
Council meeting for consideration.
Maintain Immigrant Defense
Fund
The Measure X spending plan includes an annual allocation of
$300,000.
Continue to pay off
structural debt
The City is paying all required debt service on outstanding long-term
debt. In addition, the City has been making annual contributions to
the Pension Cost stabilization fund for future pension debt increases.
City Council Ad-Hoc
Committee to Consider
Revenue-Raising Proposals
The Mayor can choose to appoint an ad-hoc committee.
EXHIBIT 2
City of Santa Ana Measure X
Fiscal Year Ended June 30, 2024
Recurring costs
identified in
Prior Fiscal Years
7,000,000
1,200,000
500,000
622,920
‐
Recurring costs
identified in
FY23‐24
One‐time costs
identified inDepartment
Responsible
Total plan
spendingCategoryDescription
FY23‐24
Addressing Homelessness
Addressing Homelessness
Addressing Homelessness
Addressing Homelessness
Addressing Homelessness
Addressing Homelessness
Addressing Homelessness
Fixing Streets
Public Safety Response ‐ Homelessness (Labor)
Public Safety Response ‐ Homelessness (Contractual and Other)
QOLT Clean‐Up Contract Homeless Services
Homeless Outreach & Engagement
Purchase of Carnegie Building (Homeless Shelter)
QOLT Clean‐Up Staffing (2 Maint Workers II + Sanitation Inspect II)
Code Enforcement Officers (2)
PD
PD
7,000,000
1,200,000
500,000
622,920
1,011,141
358,420
PWA
CDA
CDA
PWA
PBA
PWA
PWA
PWA
PWA
PWA
PWA
PWA
PWA
PWA
PWA
1,011,141
358,420
313,620
1,000,000
1,500,000
1,000,000
1,000,000
2,000,000
500,000
‐
313,620
Streetlight Pole work ‐ Under lit Areas
Alley improvement program
1,000,000
1,500,000
1,000,000
1,000,000
2,000,000
500,000
500,000
250,000
675,000
670,290
Fixing Streets
Fixing Streets
Fixing Streets
Fixing Streets
Fixing Streets
Fixing Streets
Fixing Streets
Fixing Streets
Sidewalk and/or Street Repair
Traffic Calming
Pavement Maintenance
Median Landscaping
Additional Asphalt Pothole Repair Services
Citywide Roadway Striping & Signage Maintenance Improvement
Traffic Signal on Segerstrom Avenue and Spruce Street
Traffic Signal Maintenance Staff Charges
500,000
250,000
675,000
670,290
‐
‐
‐Fixing Streets
Funding for additional police officers, traffic collision investigators; office
assistants to relieve police officers stand‐by pay, cash‐outs and related benefitsMaintain Effective 9‐1‐1 Response
Maintain Effective 9‐1‐1 Response
Maintain Effective 9‐1‐1 Response
PD
PD
PD
4,696,570
1,500,000
4,696,570
1,500,000Police Department Overtime
Public Safety Specialized Units: Criminal Investigations; Metro Division;
Communications; Vice; and Investigations and Support Service
1,400,000
3,512,400
670,000
1,400,000
3,512,400
670,000
Maintain Effective 9‐1‐1 Response
Maintain Effective 9‐1‐1 Response
Maintain Effective 9‐1‐1 Response
Maintaining Parks
Maintaining Parks
Maintaining Parks
Maintaining Parks
Retaining Firefighters
Youth Services
Youth Services
Youth Services
Ambulance Service Contract increase to maintain service level
Park Security Contract
Human Resources Technician dedicated to Police Recruiting
Park Maintenance and Repairs / Master Plan
Armed Security for Parks
Park Facilities ‐ Personnel
Park Ambassador
Orange County Fire contract increase to maintain service level
Zoo and Recreation Personnel
Zoo Contract & Supply Enhancements
Crossing Guard
FMSA
PRCSA
HR
PRCSA/PWA
PRCSA
PWA
PRCSA
FMSA
PRCSA
PRCSA
PWA
116,747 116,747
4,674,450
1,500,000
1,300,000
300,000
10,675,000
513,130
776,500
466,626
458,480
100,720
4,674,450
1,500,000
1,300,000
300,000
10,675,000
513,130
776,500
466,626
458,480
100,720
‐
‐
Youth Services
Youth Services
Youth Services
Subtotal Before Unrestricted Purposes
Librarians and administrative Support (Personnel)
Youth Employment Program
Sports & Rec Equipment Lending + Additional Programming
Library
CDA
PRCSA 200,000
49,855,583
200,000
52,962,0143,106,431
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
FY18‐19 Budget Deficit ‐ Planned Use of General Fund Reserve
FY18‐19 Budget Deficit ‐ Planned Staff Savings not implemented
Vehicle Incentive Program (VIP)
FMSA
FMSA
CDA
10,200,000
1,500,000
1,705,760
800,000
10,200,000
1,500,000
1,705,760
800,000New Debt Payments for Purchase of Streetlights PWA
City of Santa Ana Measure X
Fiscal Year Ended June 30, 2024
Recurring costs
identified in
Prior Fiscal Years
236,000
300,000
50,000
Recurring costs
identified in
FY23‐24
One‐time costs
identified in
FY23‐24
Department
Responsible
Total plan
spendingCategoryDescription
Street Tree Maintenance (Tree‐Trimming)
Universal Legal Defense Fund for Dreamers & Parents
Public Meeting Software & ADA Captioning
Sales Tax Rebate ‐ Volvo & Tac Energy
Santa Ana Regional Transportation Center Subsidy and Maintenance
Support for Utility Billing, Business Retention and HR ‐ Administrative
Permit Service Technician‐ PBA salaries
Engineering Salaries for review of Plan Checks and Permits
Vietnamese Community Liaison
Part‐Time staff salaries
Executive Assistance
(1) Full‐time staff attorney position
Protected Bike Lane sweeping program
Records Manager
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Unrestricted General Revenue Purpose
Subtotal Unrestricted Purposes
PWA
CMO
COTC
CDA
PWA
FMSA
PBA
236,000
300,000
50,000
725,000
1,100,000
700,000
105,707
500,000
150,000
67,920
119,740
206,190
150,000
104,504
340,500
100,000
200,000
115,680
420,000
600,000
100,000
‐
725,000
1,100,000
700,000
105,707
500,000
150,000
67,920
119,740
206,190
150,000
104,504
340,500
100,000
200,000
115,680
420,000
600,000
100,000
16,285,920
36,958,021
PBA
CMO
CMO
CMO
CAO
PWA
COTC
PRCSA
CDA
CDA
CDA
COTC
PWA
PBA
Increase the City Events budget
Graffiti Arts Program
Arts & Culture Event Sponsorship Program
Economic Dev. Spec. I
City Council, Contract Vendor Personnel Services
PWA Graffiti Abatement Service Enhancement (Graffiti Removal)
General Plan requirements for communications/outreach/monitoring
Future Pension Stabilization (115 Trust)Multiple 16,285,920
16,285,92020,672,101 ‐
‐Totals $70,527,684 $$19,392,351 $89,920,035