Agenda packet — Orange City Council, May 26, 2026 (part 9 of 10)

Draft Attachment 11
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Planning Commission Minutes - Draft April 6, 2026
incompatibility with the neighborhood context in terms of height, density, and scale; request for modified windows to increase screening of sight line views onto neighboring properties to the north and south; parking on adjacent bank property; fire access on adjacent property; garage storage; roof top restrictions; designated guest parking; setback and height requirements of the C-TR zone; and the enhancement of this portion of Tustin Street with the project.

A motion was made by Commissioner Maldonado to approve as recommended. The motion failed due to lack of a second.

A motion was made by Commissioner Vejar, seconded by Commissioner Martinez, to

1. Adopt Planning Commission Resolution No. PC 08-26. A Resolution of the Planning Commission of the CIty of Orange recommending City Council approval of General Plan Amendment No. GPA25-0003, a request to change the General Plan designation from General Commercial to Medium Density Residential on a 4.23-acre site located at 2375 N. Tustin Street.

2. Adopt Planning Commission Resolution No. PC 09-26. A Resolution of the Planning Commission of the CIty of Orange recommending the City Council approval of Zone Change No. 25-0002 and adoption of an Ordinance to change the zoning designation from Limited Business Tustin Redevelopment Project Area to Residential Multiple Family to establish consistency between the Medium Density General Plan Land Use designation and zoning classification in accordance with state law on a 4.23-acre site located at 2375 N. Tustin Street.

3. Adopt amended Planning Commission Resolution No. PC 10-26. A Resolution of the Planning Commission of the City of Orange recommending the City Council approval of Tentative Tract Map No. TTM25-0001, Major Site Plan Review No.

MJSP25-0002, Administrative Design Review No. ADR25-0018, IS/MND No.

ENV25-0001 and associated Mitigation Monitoring and Reporting Program for the redevelopment of a vacant commercial site with 71, three-story single-family small lot homes, open space recreation area, guest parking, and related site improvements on a

4.23-acre site located at 2375 N. Tustin Street with the following added conditions:

Applicant shall work with staff to modify second and third story north and south facing windows for units along the north and south property lines, similar to other projects with sight line issues, and provide additional renderings and sight line views from the modified windows onto adjacent properties to the north and south, particularly where there is a sight line view into a window or yard space; and applicant shall provide sight line views from the nearest roof decks onto adjacent communities to the north and south.

The motion carried by the following vote:

Ayes: Tucker, Vazquez, Martinez, and Vejar
Noes: Maldonado, and McCormack

Absent: Leslie

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4. ADJOURNMENT
There being no further business, the meeting was adjourned at 7:31 p.m.

The next Regular Planning Commission Meeting will be held on Monday, April 20, 2026 at 5:30 p.m., in the Council Chamber.
________________________
Hayden Beckman
Planning Manager

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CITY OF ORANGE

SMALL LOT SUBDIVISION GUIDELINES
JULY 2021
Attachment 14
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2 ORANGE SMALL LOT SUBDIVISION GUIDELINES

TABLE OF CONTENTS
INTRODUCTION 3
PURPOSE, GOALS, AND APPLICABILITY 4
RELATIONSHIP TO GENERAL PLAN 5
PROCESS 5
DESIGN GUIDELINES 6
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INTRODUCTION
The City of Orange has a distinct community identity and a strong sense of place, attributable to the community’s efforts to preserve significant physical features, such as buildings, parks, and landscapes, that communicate
the City’s cultural, historical, and architectural past. Yet Orange is also a forward-thinking city that looks to adapt and innovate with respect to land development, while
ensuring the preservation of its community character.

In 2019, the City was awarded a SB 2 Planning Grant by
the California Department of Housing and Community
Development (HCD) for the preparation of a small lot
subdivision ordinance to accommodate non-traditional
residential development, specifically on smaller infill sites. In concert with these guidelines, the ordinance is intended to streamline the design review and entitlement process for small lot subdivision development to create efficiencies for housing production in the City by reducing the time, uncertainty, and complexity of approval and
permitting for such projects.

The small lot subdivision ordinance allows for the
development of smaller fee simple, single-family
residential lots in the multi-family residential zones (R-3 and R-4) and in the NMU-24 mixed use zone. The singlefamily residential lots created through the ordinance are less than the typical minimum area of a standard
single-family lot (e.g., 5,000 sf. and minimum lot width of 50 ft. for an R1-5 lot). The ordinance amended Title 17 (Zoning) of the Orange Municipal Code (OMC) to establish new development standards for small lot subdivisions.

These new development standards include regulations
for lot frontage, setbacks, height, private open space, and parking. Furthermore, under the ordinance, small
lot subdivision development is subject to final approval by either the Community Development Director or the
Planning Commission.

Small lot subdivisions provide a space-efficient and
economical alternative to traditional options for
homeownership in the City of Orange. They reduce the
amount of land required for new single-family residences, which potentially creates opportunities for more
affordable homeownership through lower land costs. In
addition, small lot subdivisions allow a greater variety in lot sizes and flexibility in lot configuration, which promote urban infill, a diversity of housing types, and neighborhood stability.

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These potential benefits can come with development
complexities. Small lot design and layout require unique considerations with respect to small lot sizes and irregular lot configurations, parking and vehicle access, adequate access to air and light, and outdoor space and privacy.

In addition, a small lot subdivision’s relationship with surrounding existing developments in an established
neighborhood and public areas, such as streets and
sidewalks, also plays a critical role in shaping its design and layout. The purpose of this document is to address
these spatial complexities and ensure neighborhood
compatibility through design guidelines. These guidelines are intended to be used to support the implementation
of the small lot subdivision ordinance.

PURPOSE, GOALS, AND

APPLICABILITY
Purpose of the Guidelines
These guidelines are intended to convey to property
owners and developers the fundamental expectations the
City has for the development of small lot subdivisions. This document offers guidance to promote context-sensitive
small lot subdivision development.

Goals
These guidelines provide direction for the design of a small lot subdivision project. They illustrate options, solutions, and techniques to achieve high-quality design in new
small lot subdivision development. The guidelines aim to accomplish the following goals:
» Ensure that new small lot subdivisions fit into the
existing neighborhood context.
» Introduce new dwellings and a new housing typology
that maintains and responds to the existing urban form. » Promote walkable urbanism through infill development. » Achieve high-quality new urban design.

Applicability
These guidelines shall apply to all small lot subdivision development that is subject to design review as outlined in OMC Section 17.14.270.

Small lot subdivision development located within
the boundaries of a historic district is also subject to compliance with the relevant historic preservation design standards. Where these guidelines conflict or overlap with the historic preservation design standards, the historic 4 ORANGE SMALL LOT SUBDIVISION GUIDELINES
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preservation standards shall prevail. Likewise, small lot subdivision development located within the Single
Story Overlay District is also subject to the development standards of the overlay, and therefore the height of all buildings within the Single Story Overlay District shall be limited to one story or 20 feet, whichever is less.

RELATIONSHIP TO GENERAL PLAN
The General Plan provides the blueprint for long-term
development in the City of Orange. It identifies a number of goals and policies related to housing production,
preserving community character, and encouraging and
accommodating new development. Included in the Land
Use Element of the General Plan are the following policies:
» Policy 1.3: Provide a range of housing densities and
types to meet the diverse needs and lifestyles of
residents.
» Policy 1.6: Minimize effects of new development on the privacy and character of surrounding neighborhoods.
» Policy 6.1: Ensure that new development is compatible with the style and design of established structures and the surrounding environment.

In addition, a specific Housing Element policy supports small lot subdivision development:
» Policy Action 7: Facilitate Infill Construction
The Small Lot Subdivision Guidelines are consistent with and further the General Plan goals and objectives.

PROCESS
Any small lot subdivision development involving four
or fewer lots and to which the parcel map provisions of the Subdivision Map Act and City of Orange Subdivision
Ordinance apply, is subject to review and approval by
the City’s Design Review Committee (DRC) and the
Community Development Director prior to the issuance
of building permits.

For small lot subdivisions involving five or more lots, the tract map provisions of the Subdivision Map Act and City of Orange Subdivision Ordinance apply. In this case, the project requires approval by the DRC and the Planning
Commission.

Furthermore, some small lot subdivision projects may
also require approval by the Planning Commission if they involve the need for a variance, conditional use permit, or major site plan review in accordance with Chapter 17.10 of the Orange Municipal Code (OMC). City staff will work with

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applicants to determine the appropriate approval process for your project. The review process is initiated through the filing of a Land Use Application with the Planning
Division of the Community Development Department.

Application materials and submittal requirements can
be obtained from City staff or by visiting the Planning Division webpage at: https://www.cityoforange.org/287/
Planning-Division.

DESIGN GUIDELINES
A. Neighborhood Context
The successful fit of a new small lot subdivision project into an existing context depends on how well it relates to neighboring buildings and with the public realm, such as the street and the sidewalk. New small lot development
needs to occur through compatible massing and
thoughtful design. When considering neighborhood
compatibility, the focus should be on basic patterns, which are defined by recurring characteristics such as building scale and massing in the vicinity, and the streetscapes in the neighborhood.

1. Scale and Massing
Buildings within a small lot subdivision should respect adjacent buildings by responding to their scale, massing, and need for light, natural ventilation, and views. Small lot subdivision development should follow the established
size, shape, and form of the surrounding neighborhood
through the use of similar proportions and details.
a. Design small lot homes to be similar in scale and
to have similar forms and shapes to nearby and
surrounding buildings to avoid the appearance of being
Figure 1: Small lot subdivision development should follow the established size, shape, and form of the surrounding neighborhood through the use of similar proportions and details. In this example, the house in color is disproportionate in scale compared to the surrounding houses. 6 ORANGE SMALL LOT SUBDIVISION GUIDELINES
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overwhelming or disproportionate in comparison and
to maintain existing massing patterns.
b. Where the scale of proposed small lot homes
exceeds that of the immediately surrounding lots, use
transitional design elements, such as architectural
elements and features, stepping back upper floors,
varied forms or articulated massing, or vertical and
horizontal projections to provide a human scale and
visual relief.
c. Provide variation in building massing and placement
to create contrast in the façades and to allow for more articulated building design.
d. Small lot homes shall be unique in design so that there is variety between the dwellings within a subdivision.

Variations in building design may include changes
in building orientation, primary entryways, façade
articulation, doors and windows, varied roofline, etc.

2. Access and Connectivity
An important determinant of whether a small lot
subdivision development fits into the existing context
is how it connects to the public realm and completes
the streetscape. The character of the public realm is
compromised when parking, driveways, and garages
dominate the streetscape and undermine the aesthetic
quality and walkability of the street. Access to a small lot subdivision should be designed to reinforce the residential and pedestrian-friendly character of the street.
a. Coordinate the placement of curb cuts to minimize
the width and frequency of curb cuts, to maximize the
number and size of on-street parking spaces available,
and to promote continuity of the sidewalk.
b. When an alley is present, utilize the alley for vehicular access.
c. Provide pedestrian pathways from the public street (or right-of-way) to all primary entryways and common
areas, such as common open space areas, guest
parking, mailboxes, and centralized trash enclosures.

Pathways shall be a minimum width of 3 feet.
d. Provide pedestrian pathways separate from the
driveway whenever possible. When the driveway
provides pedestrian access to individual dwellings, a
distinguishable path shall be provided and treated
with a change of materials, finishes, pattern, or paving that differentiates the pathway from vehicular traffic.

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B. Site Planning
A small lot subdivision’s site layout and circulation,
the façades and entryways of the dwellings, and the
landscaping along the development’s perimeter all
contribute to the overall quality of the streetscape and to the subdivision’s relationship with the street. Yet
by its very nature, small lot design is confronted with spatial challenges. A small lot subdivision’s topography, geometry, location, and orientation are all factors that must be considered when site planning.

1. Building Orientation
Buildings should have a strong relationship to the street they front and should be oriented to positively define and frame adjacent public streets. However, the dimensions of a project site play a critical role in determining the layout of a small lot subdivision.
a. Small lot homes that have street frontage shall be
oriented toward and have direct pedestrian access to
the public right-of-way. Where there is a physical site constraint, a clearly identifiable entry to the site shall be provided from the right-of-way (Figure 2).
b. Small lot homes located in the interior of the
subdivision shall orient the primary entryway toward
and be visible from a pedestrian pathway that is
connected to the public right-of-way or private street
(Figure 3).
c. Small lot homes that front an alley shall orient
the primary entryway toward the alley, or shall be
connected to a pedestrian pathway that leads directly
to a public right-of-way (Figure 4 and Figure 5).
d. Creation of a safe environment should be considered
when planning the orientation of buildings in a small
lot subdivision. Primary entryways should be easily
identifiable and accessible to emergency services,
and windows, lighting, and landscaping should be
designed and properly placed to allow for maximum
visibility and natural surveillance of the site.
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ORANGE SMALL LOT SUBDIVISION GUIDELINES
9 Figure 2: Small lot homes that have street
frontage shall be oriented toward and have
direct pedestrian access to the public right-ofway.

Figure 4: Small lot homes that front an alley shall
orient the primary entryway toward the alley, or
shall be connected to a pedestrian pathway that
leads directly to a public right-of-way..

Figure 3: Small lot homes located in the interior of
the subdivision shall orient the primary entryway
toward and be visible from a pedestrian pathway.

Figure 5: Small lot homes shall be connected to a
pedestrian pathway that leads directly to a public
right-of-way.

RIGHT-OF-WAY

RIGHT-OF-WAY RIGHT-OF-WAY
PRIVATE ROAD Back Patio

ALLEY/ DRIVEWAYALLEY/ DRIVEWAYALLEY/ DRIVEWAY

ALLEY/ DRIVEWAY

RIGHT-OF-WAY
Garage
Garage
Garage
Front Entryway
Front Entryway
Garage
Driveway
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2. Primary Entryways
Building entrances are an important building feature,
providing the connection between the public realm of
the street and sidewalk, and the private realm of the
dwelling. A well-designed building entrance will appear welcoming and inviting to the pedestrian, making the
neighborhood a pleasant place to live. In addition to the doorway itself, the entry may be comprised of stairways, landings, porches, and other elements.
a. Place the primary entryways of street-fronting small lot homes on the front façades so that the entryways
face the street.
b. Incorporate transitions such as landings, porches, and patios in the articulation of the primary entryways.
c. Primary entryways shall provide the address or unit
identification, and ornamental low-level lighting to
illuminate the entry area.
d. Primary entryways shall be well-articulated in order to enhance the overall quality of the entrance.

Elements may include raised landings, recessed
doorways, overhangs, side window panels, decorative
hardscaping in the landing area, etc.

3. Existing Site Features
Unique natural characteristics, such as mature trees and topography, on both the project site and adjacent sites should be respected and taken into account in new
building design and subdivision layout.

4. Privacy
As with any infill development, some loss of privacy to existing neighboring buildings can be expected with the introduction of a small lot subdivision in an urban setting.

To mitigate against any unusual impact on privacy to
neighboring interior living spaces, design modifications can be integrated to minimize the impacts
a. Incorporate landscaping and green screens, where
appropriate, between buildings on adjacent properties.
b. Use solid railings on upper-level balconies and decks. c. Arrange window configurations that break the line of sight between houses.
d. Use translucent glazing such as glass block or frosted glass on windows and doors facing openings on
abutting structures.
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C. Building Character
Thoughtful architectural design means that buildings are conceived holistically. Once a small lot subdivision has been fitted into its neighborhood context, and its relationship to the streetscape has been set, the various architectural issues of the small lot homes can be resolved. There are many opportunities in the building design, including
the selection of materials, window and door assemblies, colors, finishes, balcony orientation, and landscaping
and hardscaping where architects and builders can offer creative solutions to further enhance the overall character of a building and improve the livability within a small lot subdivision.

1. Building Articulation
A building’s architectural details, openings, and materials provide the finishing touches that convey a sense of
quality and define the building’s character. Architectural details have a great impact on how a building is perceived, and provide visual interest, texture, and richness. Small lot homes with virtually identical forms can appear
dramatically different due to their details. Meanwhile, the use of compatible details visually unifies a small
lot subdivision with neighboring buildings, providing
continuity and reinforcing the architectural character of an area.
a. All building façades and exterior building elevations facing a street or the project perimeter shall be treated with an equal level of detail and articulation.
b. Use a combination of materials, textures, colors,
architectural treatments, and details to accentuate
variations in building massing and to add visual
interest to the building elevations.
c. Avoid the creation of uninterrupted blank wall surfaces on the building elevations, especially those facing a
street or common open space area, by breaking the
wall plane a minimum of 6 inches in depth at least
every 20 linear feet and employing varied massing
and architectural elements.
d. Strategically place doors, windows, and other openings to create visual interest and provide visibility from the street-fronting small lot homes to the street.
e. Use porticos, awnings, terraces, balconies, or trellises to provide variations in the building plane.
f. Apply additional architectural enhancements to the
ground floor at the primary entryway, so as to create

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a human scale to the building. Enhancements may
include handrails, fixed planters, and ornamental
details, such as lighting, molding, or tiles.

2. Roof Form
The roof is one of the most distinguishing elements on a building or home, and the collection of roofs in a small lot subdivision or along a streetscape create a “roofline,” which is the profile of the buildings against the sky. To design a visually stimulating house, varied roof types may be used together or the same roof type may be utilized in different ways. This creates a home that uniquely responds to both its interior function and its exterior individuality. Small lot home roofs should be well-articulated and should
consider the types of rooflines found on surrounding
buildings.
a. Rooflines and roof shapes should be consistent with
the design and structure of the building itself as
well as with the rooflines found in the surrounding
established neighborhood.
b. Roof forms should reflect the facade articulation and building massing, as opposed to a single-mass roof
over an articulated facade.
c. Roof articulation may incorporate varying roof planes, sloped roofs, open decks, corner balconies, step backs, or any form of roof modulation that adds visual interest and decreases the perceived scale of the residence.

Figure 6: All roof decks along the project perimeter and abutting residential uses shall be stepped back a minimum of 5 feet from the roof edge, so that they are oriented away from and screened to prevent direct views of abutting residential neighbors.
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ROOF DECK
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3. Private Open Space and Roof Decks
Outdoor living spaces can make a small lot home feel
more like a traditional single-family residence and provide a number of other benefits toward creating healthy and
livable communities. Private open space in a small lot
subdivision can be in the form of a fenced yard or patio at ground level, or balconies or decks above ground level.

Private open spaces should be designed to be inviting
and usable for seating, dining, play equipment, gardening, and other outdoor living activities.
a. When feasible, locate private usable open space next to primary living areas so that the private usable
open space functions as an outdoor extension of the
adjacent living room, family room, dining room, or
kitchen.
b. Provide ground level private usable open space that
is directly accessible from an indoor living space with a door that opens onto it. Ground level open space
should have a minimum width and length of 10 feet.
c. Provide upper-level private usable open space,
such as balconies or decks, that is large enough to
accommodate several chairs. Balconies and decks
should have a minimum dimension of 7 feet.
d. Roof decks are a way to maximize access to private
outdoor space, light, and air in a small lot subdivision.

Roof decks must, however, be designed with the
privacy of residential neighbors in mind.
i. All roof decks along the project perimeter and
abutting residential uses shall be stepped back a
minimum of 5 feet from the roof edge, so that they
are oriented away from and screened to prevent
direct views of abutting residential neighbors. Roof
decks facing a right-of-way are not required to be
stepped back (Figure 6).
ii. Rooftop guardrails, trellises, and other structures should be designed in a manner that is consistent
with the architectural language of the rest of the
building.
iii. Rooftop structures, including guardrails, shall be counted towards building height.

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4. Landscape and Hardscape
Landscape and hardscape within a small lot development
should add to the character of the new buildings, facilitate sustainable water use, and be relatively easy to maintain.

The landscape design should be integrated with the small lot homes and enhance the natural environment of the
neighborhood.
a. All setback and open areas not used for buildings,
parking areas, driveways, pedestrian pathways,
and utilities shall be attractively landscaped and
maintained.
b. All yards abutting the street shall be improved with landscaping (combination of groundcover, shrubs,
and trees) and amenities. Amenities may include:
decorative fencing, garden walls, pedestrian pathways,
uncovered patios, seating areas, and/or decorative bike racks.
c. Plants adapted to the local climate, soil, and hydrology should be used to reduce the need for irrigation. For
suggested plant and tree species, please refer to the
City of Orange Landscape Standards and Specifications.
d. Landscaping should be used to soften walls and
fences and provide a green screen, where appropriate,
between buildings on adjacent properties.
e. Walls and fences exposed to public view (e.g., along the street or common open space areas) are subject
to the following:
i. The form of walls and fences and their materials
should be consistent with the architectural style of
the homes within the small lot subdivision.
ii. Walls and fences should be articulated in a manner
that adds architectural interest.
f. Trash containers should be screened from public view by opaque walls or fences subject to the rest of the
recommendations under these guidelines and to
OMC Section 17.14.270(I).
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Agenda Item
Orange City Council
Item #: 9.3. 5/26/2026 File #: 26-0271
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Russell Bunim, Community Development Director

1. SUBJECT
Public Hearing to consider adoption of an urgency ordinance establishing a temporary moratorium on new massage establishments

2. SUMMARY
The proposed urgency ordinance establishes a temporary moratorium on the approval, issuance, acceptance, or processing of permits, business licenses, and land use entitlements for new massage establishments within the City. This action is necessary due to documented enforcement concerns involving massage establishments. The moratorium will allow the City time to finalize updated regulatory standards currently under development.

3. RECOMMENDED ACTION

1. Conduct and close the Public Hearing.

2. Adopt Ordinance No. 08-26 and the findings of urgency. An Urgency Ordinance of the City Council of the City of Orange establishing a temporary moratorium on massage establishments pending review and update to the City’s Municipal Code and Zoning Code.

4. FISCAL IMPACT
No immediate fiscal impact. The proposed moratorium may temporarily delay potential business license revenue but is necessary to prevent future enforcement costs and resource demands associated with noncompliant operations.

5. STRATEGIC PLAN GOALS
Goal 1: Maintain Strong Emergency and Safety Services

6. DISCUSSION AND BACKGROUND
The City regulates massage establishments to protect public health, safety, and welfare. Massage business operators are currently required to obtain a City Business License, complete a fingerprintbased background check conducted by the Police Department, and comply with minimum zoning requirements prior to the issuance of a Massage Establishment Permit by the Finance Department.

However, the City’s existing regulatory framework lacks several important operational and land use standards necessary to effectively regulate massage establishments and address ongoing City of Orange Page 1 of 4 Printed on 5/21/2026
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Item #: 9.3. 5/26/2026 File #: 26-0271
enforcement concerns. Current regulations do not include:
· Adequate separation requirements, including 500-foot buffer restrictions between massage establishments and sensitive uses such as public and private schools, daycare facilities, parks, and playgrounds;
· Clear zoning standards distinguishing primary massage establishments from ancillary wellness or beauty spa services, including establishments associated with chiropractic, acupuncture, barbering, esthetician, or similar uses, and limitations on the number of dedicated massage rooms;
· Conditional Use Permit requirements and operational performance standards; · Sufficient regulations to deter illicit sexual activity and unprofessional conduct; and · Effective enforcement mechanisms, including permit suspension and revocation procedures, and progressive administrative citation penalties for repeat violations.

As a result of these regulatory deficiencies, the City has experienced a significant increase in the number of massage establishments, with nearly 100 businesses currently operating citywide.

In recent years, the Orange Police Department and the Community Development Department’s Code Enforcement Division have identified evidence of illicit sexual activity and other unlawful conduct occurring within certain massage establishments in the City of Orange. These activities negatively impact surrounding neighborhoods and commercial areas, create public safety concerns, and undermine economic development efforts by contributing to blight and adverse public perception.

Enforcement Actions in the City of Orange
Through inspections and joint enforcement operations, the Orange Police Department and Code Enforcement Division have identified more than 20 massage establishments engaged in violations including:
· Massage services provided without proper State certification or licensing; · Failure to maintain qualified or certified massage therapists on site; · Business operations inconsistent with approved land use standards or permitted uses; · Unsanitary or unmaintained massage facilities,
· Suspected unlawful sexual activity occurring within establishments; and · Misleading, deceptive, or otherwise noncompliant business practices.

In addition to violations involving illicit sexual activity and unprofessional conduct, Code Enforcement officers have documented numerous health, safety, and building code violations during inspections, including: unlicensed business operations; unpermitted interior construction such as partitioned rooms and shower facilities; unsafe electrical, gas, and plumbing systems; illegal residential occupancy; unlicensed alcohol service; and boarded or obscured windows designed to conceal interior activities or prevent visibility into the premises.

In at least one recent case, the City’s Code Enforcement Division and Orange Police Department City of Orange Page 2 of 4 Printed on 5/21/2026
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In at least one recent case, the City’s Code Enforcement Division and Orange Police Department conducted a joint enforcement operation pursuant to a search warrant, during which officers documented multiple violations, including the absence of certified massage therapists and evidence that massage services were actively being performed in violation of City requirements at the time of inspection. These findings demonstrate the ongoing and immediate nature of the City’s enforcement concerns.

The City has also observed recurring patterns in which massage establishments cease operations and subsequently attempt to reopen under new ownership, management, or business names, resulting in continued compliance issues and placing ongoing demands on City enforcement and public safety resources.

Massage and other establishments that offer illicit sexual activity pose an immediate and significant threat to the health, safety, and welfare of the community. Among other things, these impacts include the potential for: (1) injury and abuse to patrons being solicited for unlawful services, and (2) increased opportunities for prostitution activity and human trafficking of workers by virtue of the secretive nature associated with offering unauthorized and undisclosed services.

To address these concerns, the City is currently developing comprehensive amendments to its massage establishment regulations, including enhanced operational standards, updated permitting requirements, ownership and operator restrictions, zoning controls, and enforcement provisions designed to improve accountability and protect the public health, safety, and welfare.

Without the adoption of a temporary moratorium, additional massage establishments may become established or vested under the City’s current regulatory framework before the proposed amendments can be completed and adopted. This could further increase enforcement burdens, undermine the effectiveness of future regulations, and exacerbate existing public safety and nuisance concerns.

Other cities throughout Orange County have recently adopted similar temporary moratoriums on new massage establishments as a proactive measure to preserve the status quo while evaluating and strengthening local regulatory frameworks. These actions reflect a broader recognition among municipalities that existing regulations may be insufficient to address evolving enforcement and land use challenges associated with massage establishments.

The Proposed Urgency Moratorium:

California Government Code Sections 36937 and 65858 authorize the City Council to adopt an Interim Urgency Ordinance to protect the public health, safety, and welfare. Section 65858 specifically permits the City to impose a temporary moratorium on land uses that may conflict with zoning regulations under study.

The proposed Urgency Ordinance includes the required findings that certain massage establishments have been associated with illicit activities that pose a threat to the community. If adopted by a four-fifths vote of the City Council (6 out of 7), the proposed Ordinance would take effect immediately and establish a 45-day moratorium on the approval or issuance of use permits, variances, building permits, and other entitlements for new massage establishments and the expansion of existing establishments.

During the moratorium, massage establishments that already possess a valid massage establishment permit may continue to obtain business licenses and building permits, and existing City of Orange Page 3 of 4 Printed on 5/21/2026
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establishment permit may continue to obtain business licenses and building permits, and existing businesses may continue to apply for and renew business licenses. The City may also continue processing and making final decisions on those applications.

The 45-day period will allow staff to collect data, assess the impacts of massage establishments, and develop recommendations for possible amendments to the Zoning Code and regulatory framework.

Staff will also evaluate potential regulations for personal care businesses with private rooms, inspection requirements and schedules, and whether existing regulatory processes can be applied to other businesses where illicit massage activity may occur.

Under California Government Code Section 65858(b), the City Council may extend the moratorium for an additional 22 months and 15 days, for a maximum total duration of two years. Staff respectfully request that the City Council adopt the proposed interim urgency ordinance to provide time to study and address these issues.

7. ATTACHMENTS
· Urgency Ordinance No. 08-26
City of Orange Page 4 of 4 Printed on 5/21/2026
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Agenda Item
Orange City Council
Item #: 9.3. 5/26/2026 File #: 26-0271
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Russell Bunim, Community Development Director

1. SUBJECT
Public Hearing to consider adoption of an urgency ordinance establishing a temporary moratorium on new massage establishments

3. RECOMMENDED ACTION

1. Conduct and close the Public Hearing.

5. STRATEGIC PLAN GOALS
Goal 1: Maintain Strong Emergency and Safety Services

However, the City’s existing regulatory framework lacks several important operational and land use standards necessary to effectively regulate massage establishments and address ongoing City of Orange Page 1 of 4 Printed on 5/21/2026
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Item #: 9.3. 5/26/2026 File #: 26-0271
enforcement concerns. Current regulations do not include:
· Adequate separation requirements, including 500-foot buffer restrictions between massage establishments and sensitive uses such as public and private schools, daycare facilities, parks, and playgrounds;
· Clear zoning standards distinguishing primary massage establishments from ancillary wellness or beauty spa services, including establishments associated with chiropractic, acupuncture, barbering, esthetician, or similar uses, and limitations on the number of dedicated massage rooms;
· Conditional Use Permit requirements and operational performance standards; · Sufficient regulations to deter illicit sexual activity and unprofessional conduct; and · Effective enforcement mechanisms, including permit suspension and revocation procedures, and progressive administrative citation penalties for repeat violations.

As a result of these regulatory deficiencies, the City has experienced a significant increase in the number of massage establishments, with nearly 100 businesses currently operating citywide.

In at least one recent case, the City’s Code Enforcement Division and Orange Police Department City of Orange Page 2 of 4 Printed on 5/21/2026
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Item #: 9.3. 5/26/2026 File #: 26-0271
In at least one recent case, the City’s Code Enforcement Division and Orange Police Department conducted a joint enforcement operation pursuant to a search warrant, during which officers documented multiple violations, including the absence of certified massage therapists and evidence that massage services were actively being performed in violation of City requirements at the time of inspection. These findings demonstrate the ongoing and immediate nature of the City’s enforcement concerns.

The Proposed Urgency Moratorium:

During the moratorium, massage establishments that already possess a valid massage establishment permit may continue to obtain business licenses and building permits, and existing City of Orange Page 3 of 4 Printed on 5/21/2026
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Item #: 9.3. 5/26/2026 File #: 26-0271
establishment permit may continue to obtain business licenses and building permits, and existing businesses may continue to apply for and renew business licenses. The City may also continue processing and making final decisions on those applications.

The 45-day period will allow staff to collect data, assess the impacts of massage establishments, and develop recommendations for possible amendments to the Zoning Code and regulatory framework.

7. ATTACHMENTS
· Urgency Ordinance No. 08-26
City of Orange Page 4 of 4 Printed on 5/21/2026
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ORDINANCE NO. 08-26

AN URGENCY ORDINANCE OF THE CITY

COUNCIL OF THE CITY OF ORANGE

ESTABLISHING A TEMPORARY MORATORIUM

ON MASSAGE ESTABLISHMENTS PENDING
REVIEW AND UPDATE TO THE CITY’S

MUNICIPAL CODE AND ZONING CODE
WHEREAS, California Government Code Section 65858 authorizes the City Council to adopt an urgency ordinance imposing a temporary moratorium where there is a current and immediate threat to the public health, safety, or welfare; and WHEREAS, California Constitution, Article XI, Section 7, authorizes cities to make and enforce within its limits all local, police, sanitary, and other ordinances, and regulations not in conflict with general laws; and
WHEREAS, the City protects the health, safety, and welfare of the community through numerous avenues, including by establishing and enforcing zoning, licensing and health and safety regulations on specified commercial activities; and
WHEREAS, in 2009, California Senate Bill 731 created the California Massage Therapy Council (“CAMTC”) which limited cities’ ability to regulate massage establishments; and WHEREAS, in 2015, California Assembly Bill 1147 restored the ability of cities to regulate massage establishments through land use and local licensing and health and safety requirements, subject to certain regulations; and
WHEREAS, the City is authorized by State law, including, without limitation, California Government Code Section 51030 et seq. and California Business & Professions Code Section 16000 et seq. to regulate massage establishments; and
WHEREAS, such regulations include Chapter 5.56 of the Orange Municipal Code (“OMC”), which contains the licensing requirements and operational standards for massage establishments in the City; and
WHEREAS, in addition to the requirements of OMC Chapter 5.56, massage establishments are permitted only where massage services are lawfully operated as a permitted use or as an accessory use that is clearly incidental and integrated with the primary business, and where revenue derived from massage services does not exceed twenty-five percent (25%) of the business’s gross income pursuant to OMC Section 17.13.040.PP; and WHEREAS, despite the above regulatory framework, in recent years, the City has experienced issues related to illicit sexual activity and suspected prostitution at businesses offering massage services; and
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2 WHEREAS, in recent years, substantial evidence obtained through more than twenty joint criminal investigations conducted by the Community Development Department’s Code Enforcement Division and the Orange Police Department has revealed recurring health, safety, and code violations, including, but not limited to, unlicensed operations, non-state-certified massage therapists, unpermitted construction of rooms and shower facilities, unsanitary and poorly maintained facilities, unlawful alcohol service, illicit advertising of unprofessional conduct, and suspected unlawful sexual activity; and
WHEREAS, earlier this year, the Orange Police Department’s Special Weapons and Tactics Team executed a court-authorized search warrant at a massage establishment with assistance from the City’s Code Enforcement Division. The investigation documented multiple violations, including the absence of state-certified massage therapists, evidence that massage services were being performed at the time of inspection, unlawful alcohol service, and other conditions inconsistent with lawful operation, thereby demonstrating the ongoing and immediate nature of these enforcement concerns; and
WHEREAS, the above illegal activity resulted in significant public expense including code enforcement inspections, law enforcement surveillance operations, and administrative and legal review and enforcement actions. These illegal activities diverted resources from other pressing City needs; and
WHEREAS, massage establishments that offer illicit sexual activity pose an immediate and significant threat to the health, safety and welfare of the community. Among other things, these impacts include the potential for: (1) injury and abuse to patrons being solicited for unlawful services, and (2) increased opportunities for prostitution activity and human trafficking of workers by virtue of the secretive nature associated with offering unauthorized and undisclosed services; and
WHEREAS, pursuant to California Government Code Sections 36937 and 65858, the City Council may adopt an interim urgency ordinance to protect the public safety, health, and welfare.

Section 65858 specifically allows a temporary moratorium to prohibit any uses that may conflict with a contemplated zoning proposal that the City wishes to study; and WHEREAS, the City Council finds that the development and establishment of new massage establishments, or the expansion or intensification of existing massage establishments, may have adverse impacts on the environment, traffic, aesthetics, and visual quality of surrounding properties and on the economic vitality within the City, and such impacts constitute and pose a current and immediate threat to the public health, safety, or welfare; and WHEREAS, City staff requires time to further gather data about the adverse impacts of massage establishments that provide illicit services, and to research, study, and consider ways to amend the City’s regulatory process and the Orange Municipal and Zoning Codes to protect the public health and safety and reduce illegal activities occurring at these businesses; and WHEREAS, all legal prerequisites to the adoption of this urgency ordinance have occurred.
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3 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ORANGE DOES HEREBY ORDAIN AS FOLLOWS:

SECTION I:

CEQA. The City Council finds that this ordinance is not a project within the meaning of Section 15378 of the State of California Environmental Quality Act (“CEQA”) Guidelines, because it has no potential for resulting in physical change in the environment, directly or indirectly. The City Council further finds, under Title 14 of the California Code of Regulations, section 15061(b)(3) that this interim urgency ordinance is nonetheless exempt from the requirements of CEQA. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION II:

Incorporation. The recitals above are each incorporated by reference and adopted as findings by the City Council.

SECTION III:

Urgency Findings. This Ordinance is adopted under the provisions of California Government Code Sections 36937 and 65858. The City Council finds that massage establishments as described herein pose significant and urgent threats to the health, safety and welfare of the community as follows:
a. In recent years, the City has experienced issues related to illicit sexual activity and suspected prostitution at businesses offering massage services. b. In recent years, the Community Development Department’s Code Enforcement Division and the Orange Police Department have received emails, calls for service, and anonymous complaints from community members reporting suspected prostitution and illicit sexual activity occurring at massage establishments within the City. c. In recent years, substantial evidence obtained through more than twenty joint criminal investigations conducted by the Community Development Department’s Code Enforcement Division and the Orange Police Department has revealed recurring health, safety, and code violations, including, but not limited to, unlicensed operations, nonstate-certified massage therapists, unpermitted construction of rooms and shower facilities, unsanitary and poorly maintained facilities, unlawful alcohol service, illicit advertising of unprofessional conduct, and suspected unlawful sexual activity; d. Earlier this year, the Orange Police Department’s Special Weapons and Tactics Team executed a court-authorized search warrant at a massage establishment with assistance from the City’s Code Enforcement Division. The investigation documented multiple violations, including the absence of state-certified massage therapists, evidence that massage services were being performed at the time of inspection, unlawful alcohol 2115
4 service, and other conditions inconsistent with lawful operation, thereby demonstrating the ongoing and immediate nature of these enforcement concerns; e. The above illegal activity resulted in significant public expense including code enforcement inspections, law enforcement surveillance operations, and administrative and legal review and enforcement actions. These illegal activities diverted resources from other pressing City needs.
f. Massage establishments that offer illicit sexual activity pose an immediate and significant threat to the health, safety and welfare of the community. Among other things, these impacts include the potential for: (1) injury and abuse to patrons being solicited for unlawful services, and (2) increased opportunities for prostitution activity and human trafficking of workers by virtue of the secretive nature associated with offering unauthorized and undisclosed services.

SECTION IV:

Directive. The City Council hereby directs and orders that, during the time that this urgency ordinance is in effect, the City will not approve or issue any use permit, variance, building permit, or other applicable entitlement for the following: New massage establishments, or the enlargement of existing massage establishments. During the moratorium period, any massage establishment that has obtained a use permit will be allowed to obtain a license and building permit to establish.

Existing massage businesses may continue to apply for licenses or license renewals, and the City may continue to make final decisions on those applications.

SECTION V:

Applications. The City will continue to accept and process applications for uses prohibited by this moratorium if so legally required. Any application received and processed during the moratorium shall be processed at the applicant’s sole cost and risk with the understanding that no permit, approval or other entitlement for a use covered by Section 4, above, may issue while this moratorium or any extension thereof is in effect. Notwithstanding anything to the contrary, the City will process and make final decisions on massage establishment license applications and renewals thereof during the moratorium period or any extension thereof.

SECTION VI:

Effective Date and Duration. In accordance with California Government Code Sections 36937 and 65858, this moratorium shall take effect immediately upon its adoption by a four-fifths (4/5) vote of the City Council and shall remain in full force and effect for forty-five (45) days from the date of adoption unless earlier repealed or extended by the City Council pursuant to California Government Code Section 65858.
2116
5 SECTION VII:

Report. No less than 10 days prior to the scheduled expiration of this Ordinance, staff shall issue a report to the City Council on the progress of its study and on determinations for how the City should proceed, insofar as conclusions have been drawn.

SECTION VIII:

Custodian of Records. The custodian of records for this Ordinance is the City Clerk and the records comprising the administrative record are located at Orange City Hall, 300 E. Chapman Avenue, Orange, California 92866.

SECTION IX:

Enforcement. The City may enforce any provision of this Ordinance by mandamus, injunction, or any other appropriate civil remedy in any court of competent jurisdiction.

SECTION X:

If any section, subdivision, paragraph, sentence, clause or phrase of this Ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each section, subdivision, paragraph, sentence, clause and phrase thereof, irrespective of the fact that any one (or more) section, subdivision, paragraph, sentence, clause or phrase had been declared invalid or unconstitutional.

SECTION XI:

The City Clerk is hereby directed to certify the adoption of this Ordinance and cause the same to be published as required by law.

ADOPTED this ____ day of ___________________, 2026.

Daniel R. Slater, Mayor, City of Orange
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6 ATTEST:

Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange

STATE OF CALIFORNIA )

COUNTY OF ORANGE )

CITY OF ORANGE )
I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Urgency Ordinance was duly passed at the regular meeting of the City Council held on the _______ day of ________, 2026 by the following vote, to wit:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
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Agenda Item
Orange City Council
Item #: 9.4. 5/26/2026 File #: 26-0283
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Russell Bunim, Community Development Director

1. SUBJECT
Continued Public Hearing to consider the Introduction and First Reading of Ordinance No. 07-26 to update regulations for Residential Care Facilities and Daycare Homes to ensure consistency with State Law and finding of California Environmental Quality Act (CEQA) exemption (Continued from May 12, 2026)

2. SUMMARY
The proposed ordinance amends the Orange Municipal Code to bring the City’s regulations regarding Residential Care Facilities and Family Day Care Homes into compliance with State law, specifically the California Community Care Facilities Act (Health and Safety Code Sections 1500-1569.889) and Family Day Care Homes Act (Health and Safety Code Sections 1597.40-1597.46), and updates to related definitions and land use tables for consistency.

3. RECOMMENDED ACTION

1. Conduct and close the Public Hearing.

2. Introduce and conduct First Reading of Ordinance No. 07-26. An Ordinance of the City Council of the City of Orange amending Title 17 of the Orange Municipal Code to comply with State law regarding Residential Care Facilities (Health and Safety Code Sections 1267.16 and 1500- 1569.889).

3. Find the ordinance categorically exempt from the California Environmental Quality Act (CEQA) per State CEQA Guidelines Sections 15061(b)(3).

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 3: Enhance Public Communication Strategy and Quality of Life.

6. DISCUSSION AND BACKGROUND
The City of Orange General Plan 2021-2029 Housing Element includes Housing Policy Action 4F, which commits the City to amend the Orange Municipal Code to comply with State law for residential care facilities and day care homes.

The proposed ordinance updates the Orange Municipal Code (OMC) to clarify the treatment of Residential Care Facilities and Family Day Care Homes consistent with State law. It removes outdated definitions, updates operational standards, and revises land use tables to reflect appropriate City of Orange Page 1 of 2 Printed on 5/21/2026 powered by Legistar™2119
Item #: 9.4. 5/26/2026 File #: 26-0283
outdated definitions, updates operational standards, and revises land use tables to reflect appropriate permitting requirements.

These amendments clarify the following:
· Residential care facilities serving six or fewer persons are considered a residential use by right in all zones allowing single-family dwellings, subject to the same standards as any other residential use.
· Residential care facilities serving seven or more persons require a Conditional Use Permit pursuant to OMC Section 17.10.030.
· Family day care homes (small and large) are treated as residential uses and allowed in residential zones with updated operational standards reflecting State law. The definition of Small and Large Family day care are changing as follows:
o Small Family Day Care is now permitted to care for up to eight children. o Large Family Day Care is now permitted to care for between nine to 14 children.

The proposed amendment also removes outdated definitions (e.g., 'rest home,' 'sanitarium,' and 'day nurseries') and adds new definitions such as 'Skilled Nursing Facility,' ensuring alignment with current State licensing categories.

Overall, the proposed amendments are primarily technical and are intended to modernize the Zoning Code, eliminate inconsistencies, and ensure full compliance with State law. The ordinance improves clarity for applicants and staff, removes regulatory barriers, and supports the City’s housing and equity goals by facilitating housing opportunities for seniors, persons with disabilities, and families.

7. ENVIORNMENTAL REVIEW
The proposed project is not subject to the provisions of the California Environmental Quality Act (CEQA) pursuant to (1) Section 15061(b)(3) of the state CEQA Guidelines (Common Sense Exemption) because it can be seen with certainty that there is no possibility that it would have a significant effect on the environment.

8. ATTACHMENTS
· Attachment 1 Ordinance No. 07-26
· Attachment 2 Ordinance No. 07-26 (Redlined)
· Attachment 3 Planning Commission Staff Report, February 19, 2026 · Attachment 4 Planning Commission Meeting Minutes, February 19, 2026 City of Orange Page 2 of 2 Printed on 5/21/2026
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Agenda Item
Orange City Council
Item #: 9.4. 5/26/2026 File #: 26-0283
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Russell Bunim, Community Development Director

3. RECOMMENDED ACTION

1. Conduct and close the Public Hearing.

3. Find the ordinance categorically exempt from the California Environmental Quality Act (CEQA) per State CEQA Guidelines Sections 15061(b)(3).

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 3: Enhance Public Communication Strategy and Quality of Life.

The proposed ordinance updates the Orange Municipal Code (OMC) to clarify the treatment of Residential Care Facilities and Family Day Care Homes consistent with State law. It removes outdated definitions, updates operational standards, and revises land use tables to reflect appropriate City of Orange Page 1 of 2 Printed on 5/21/2026 powered by Legistar™2121
Item #: 9.4. 5/26/2026 File #: 26-0283
outdated definitions, updates operational standards, and revises land use tables to reflect appropriate permitting requirements.

AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF ORANGE AMENDING TITLE 17 OF THE

ORANGE MUNICIPAL CODE TO COMPLY WITH

STATE LAW REGARDING RESIDENTIAL CARE

FACILITIES (HEALTH AND SAFETY CODE
SECTIONS 1267.16 AND 1500-1569.889)
WHEREAS, the City of Orange 2021-2029 Housing Element was adopted by City Council on October 20, 2023, and the California State Department of Housing and Community Development found the Housing Element in substantial compliance with State Housing Element Law on January 2, 2024; and
WHEREAS, the 2021-2029 Housing Element, Housing Plan Program 4F, states “The City will amend the Orange Municipal Code to be compliant with State law regarding residential care facilities serving seven (7) or more persons in all residential zones, as well as ensure barrier-free housing choices for persons with disabilities.” (Sections 1267.8, 1566.3, 1568.0831 of the California Health and Safety Code); and
WHEREAS, Health and Safety Code Sections 1267.16, 1566.3, 1568.0831 require local governments to treat licensed group homes and residential care facilities with six or fewer residents no differently than other by-right single-family housing uses, and that Local agencies must allow these licensed, residential-care facilities in any area zoned for residential use, and may not require licensed, residential-care facilities for six residents or less to obtain conditional use permits or variances that are not required of other family dwellings; and WHEREAS, the Health and Safety Code provides that Residential Care Facilities operating as single-family residences that provide licensable services to more than six residents may be subject to conditional use or other discretionary approval processes; and WHEREAS, the Health and Safety Code states that for the purpose of all local ordinances, a residential care facility that serves six or fewer persons shall not be included within the definition of a boarding house, rooming house, institution, guest home, rest home, community residence, or other similar term that implies that the residential care facility is a business run for profit or differs in any other way from a family dwelling; and
WHEREAS, the Health and Safety Code provides regulations for family day care home facilities for both small and large, and has updated operation regulations; and WHEREAS, the City of Orange seeks to comply with these statutory provisions by amending the Orange Municipal Code (OMC) to appropriately classify and allow residential care facilities in applicable zoning districts and update family day care facilities consistent with state law; and
Attachment 1
2123
2 WHEREAS, the Planning Commission having considered the proposed revisions to the OMC at a public hearing held on February 19, 2026, including review of the staff report, and having received public testimony on the item, and adopted Planning Commission Resolution No. 06-26 recommending that the City Council approve the proposed amendments to Title 17, Chapter

17.13 of the Orange Municipal Code; and
WHEREAS, the City Council, having now considered the proposed changes to the OMC at a public hearing held on May 26, 2026, including review of the staff report, and having received public testimony on the item, desires to adopt the Proposed Ordinance.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ORANGE DOES ORDAIN AS FOLLOWS:

SECTION I:

The recitals stated above are true and correct, incorporated herein, and with the public record, form the basis for this Ordinance.

SECTION II:

Section 17.04.022 of the Orange Municipal Code, “Zoning – Definitions – “C” Definitions,” is hereby amended to delete the following definitions:
“Community Care Facility” means any facility, place or building where non-medical care and supervision are provided for seven or more persons (does not include the licensee or members of the licensee's family or persons employed as facility staff). “Convalescent facility” means a use providing bed care and in-patient services for persons requiring regular medical attention, and persons aged or infirm unable to care for themselves, excluding surgical or emergency medical services.
“Convalescent hospital” means a facility providing long-term nursing, dietary and other medical services to convalescents or invalids but not providing surgery or primary treatments such as are customarily provided in a hospital. A convalescent hospital must be licensed by the State as such.

SECTION III:

Section 17.04.023 of the Orange Municipal Code, “Zoning – Definitions – “D” Definitions,” is hereby amended to revise the following definition:
“Day care center” means any facility which provides non-medical care for an individual on less than a 24 hour basis including child day care centers. Day care centers are separate and distinct from Family day care homes, see definition of Family day care homes, small and large. 2124
3 Section 17.04.023 of the Orange Municipal Code, “Zoning – Definitions – “D” Definitions,” is hereby amended to delete the following definition:
“Day nurseries” means a facility where children are temporarily cared for in their parents' absence when and if there is provided on the lot or adjacent to the premises a play lot completely fenced, and containing an area of not less than 900 square feet, plus an additional 50 square feet for each child in excess of nine children and subject to all safety precautions as required by the Fire Department and Building Division.

SECTION IV:

Section 17.04.025 of the Orange Municipal Code, “Zoning – Definitions – “F” Definitions,” is hereby amended to revise the following definitions as follows:
“Family” means one or more persons living together as a single housekeeping unit in a dwelling unit. This includes, but is not limited to, licensed residential care facilities serving six or fewer persons, as defined by state law. The term “family” shall not be limited by the presence of non-related individuals or the existence of a legal guardianship or other legal relationship. “Family day care homes, large” means a single-family dwelling with the accessory daytime care of nine to 14 children. Pursuant to California Health and Safety Code §1597.40–1597.46 must be considered a residential use of property provided they meet zoning requirements. “Family Day Care, Small” means a single-family dwelling with the accessory daycare of up to eight children. Pursuant to California Health and Safety Code §1597.40–1597.46 must be considered a residential use of property and is permitted by right.

SECTION V:

Section 17.04.026 of the Orange Municipal Code, “Zoning – Definitions – “G” Definitions,” is hereby amended to revise the following definition as follows:
“Group home” means a residential facility that provides 24-hour care and supervision to children, delivered at least in part by staff employed by the licensee in a structured environment.

The care and supervision provided by a group home shall be nonmedical, except as otherwise permitted by law.

SECTION VI:

Section 17.04.033 of the Orange Municipal Code, “Zoning – Definitions – “N” Definitions,” is hereby amended to delete the following definition as follows:
“Nursing home” means an extended or intermediate care facility licensed or approved to provide full-time convalescent or chronic care to individuals who, by reason of advanced age, chronic illness or infirmity, are unable to care for themselves. (Ord. 20-82; Ord. 12-95) 2125
4 SECTION VII:

Section 17.04.037 of the Orange Municipal Code, “Zoning – Definitions – “R” Definitions,” is hereby amended to revise the following definition as follows:
“Residential Care Facility” means any family home, group care facility, or similar facility determined by the department, for 24-hour nonmedical care of persons in need of personal services, supervision, or assistance essential for sustaining the activities of daily living or for the protection of the individual.

Section 17.04.037 of the Orange Municipal Code, “Zoning – Definitions – “R” Definitions,” is hereby amended to delete the following definition as follows:
“Rest home” means an extended or intermediate care facility licensed or approved to provide full-time convalescent or chronic care to individuals who, by reason of advanced age, chronic illness or infirmity, are unable to care for themselves.

SECTION VIII:

Section 17.04.038 of the Orange Municipal Code, “Zoning – Definitions – “S” Definitions,” is hereby amended to add the following definition as follows:
“Skilled Nursing Facility” means a healthcare facility that provides 24-hour skilled nursing care and related services for individuals who require medical or nursing care, or rehabilitation services. These facilities are designed to help patients recover after a hospital stay for an illness or injury, or to provide ongoing care for those with chronic illnesses or disabilities.

Section 17.04.038 of the Orange Municipal Code, “Zoning – Definitions – “S” Definitions,” is hereby amended to delete the following definitions as follows:
“Sanitarium, health” means an institution where patients, other than the mentally disoriented or mentally incompetent, are housed and where medical or post-surgical treatment is provided.
“Sanitarium, mental” means an institution for the recuperation and treatment of the mentally disordered, mentally incompetent or victims of drug addiction.

SECTION IX:

Title 17, Section 17.13.040 of the Orange Municipal Code is hereby amended to revise the following as follows:

NN. Large-Family Day Care Homes. Large-family day care homes are subject to the following:
2126
5 1. The business shall be operated in a single-family residence on property residentially zoned.

2. The City noise ordinance in Chapter 8.24 shall be complied with at all times.

3. Two enclosed parking spaces shall be maintained for parking purposes only.

4. The facility shall be licensed by the State Department of Social Services.

5. The facility shall comply with State Fire Marshal standards for large-family day care facilities.

6. No signs advertising the business shall be allowed.

7. Compliance with all development standards for single-family residential structures is required.

8. A site plan identifying pedestrian access to and from loading area shall be submitted.

SECTION X:

Title 17, Section 17.13.040 of the Orange Municipal Code is hereby amended to add the following:

KKK. Reserved for Future Section.

LLL. Residential Care Facilities. Residential Care Facilities may occur in residential zones as specified in Table 17.13.030 pursuant to the following:

1. Purpose. The purpose of this section is to bring the Orange Municipal Code into compliance with the California Community Care Facilities Act (Health and Safety Code Sections 1500-1569.889) by clarifying the regulation of Residential Care Facilities. In the event of any inconsistency or conflict between the provisions of this code and state law, the provisions of state law shall prevail and be controlling.

2. Residential Care Facilities that do not provided licensable services. Group homes that operate as single-family residences and that do not provide licensable services shall be considered a residential use of property by a single family.

3. Residential Care Facilities for Six or Fewer Persons. In accordance with Health and Safety Code Section 1566.3 and 1568.0831, a Residential Care Facility that provides licensable services to six or fewer persons shall be considered a residential use of property by a single family. Such housing shall be permitted in all zones that allow residential uses, subject to the same standards and restrictions applicable to other residential dwellings of the same type in the same zone. In addition:
2127
6 a. The residents and operators of the facility shall be considered a family for the purposes of any law or zoning ordinance that relates to the residential use of property pursuant to this chapter.
b. A residential care facility that serves six or fewer persons shall not be included within the definition of a boarding house, rooming house, institution, guest home, rest home, community residence, or other similar term that implies that the residential care facility is a business run for profit or differs in any other way from a family dwelling.

4. Residential Care Facilities for Seven or More Persons. A Residential Care Facility that provides licensable services to seven or more persons shall require approval of a conditional use permit, and shall be subject to the applicable zoning, permitting, and conditional use requirements of the underlying zone, consistent with all local and state housing laws.

5. Heath and Safety Requirements. All Residential Care facilities, licensed and unlicensed must comply with applicable code requirements including but not limited to, building code, health and safety code, and fire code.

SECTION XI:

Title 17, Section 17.13.050 of the Orange Municipal Code is hereby amended to delete W.

Family Day Care Home – Large (Seven to 12 Children), and is replaced as follows:

W. Reserved for Future Section.

SECTION XII:

Table 17.13.030, of the Orange Municipal Code, “Zoning – Master Land Use Table – Care Facility,” is hereby amended to be revised to the following:
2128
7 ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

LAND USE
R1-5R1-6 toR-15R1-20 toR-140 &R1-RR2-6 toR2-8R-3R-4MHOPCP/C1CTRC2C3CROTMU-15SOTMU-15OTMU-24NMU-24UMUM1M2A1ROSHPIFP-1FP-2SG Care facility—Includes uses that provide for non-24-hour care of children, elderly, or developmentally disabled persons.

Day Care
Center
(incudes
child,
elderly, or
disabled
- - - - - - - C P
*
P
*
P
*
P
*
- C C C C C - - - - - - - - -
Day Care
Center in
conjunction
with a
church or
school or
other similar
institutional
use

C C C C C C C C C C C C - C C C C C C C C - - C - - -
2129
8 ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

LAND USE
R1-5R1-6 toR-15R1-20 toR-140 &R1-RR2-6 toR2-8R-3R-4MHOPCP/C1CTRC2C3CROTMU-15SOTMU-15OTMU-24NMU-24UMUM1M2A1ROSHPIFP-1FP-2SG Family Day
Care homes,
small (up to
eight
children)

P P P P P P P P P P
Family Day
Care homes,
large (9-14
children)
P
*
P* P* P* P
*
P
*
P
*
P
*
P* P
*
Housing—Includes all structures permitted as living quarters whether they be for short or long-term occupancy. Includes all uses identified in California Building Code definitions that are preceded with main entry words (key terms) that include one of the following: Dwelling, unit, house, housing, congregate, residence, multi-family, dormitory, home(s), hotel, motel, residential care facility, residential facility, or lodging.

Residential
Care
Facility
(all
unlicensed
facilities, or
P
*
P* P* P* P* P* P* - - - - - - P* P* P* P* P* - - - - - - - - - 2130
9 ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

LAND USE
R1-5R1-6 toR-15R1-20 toR-140 &R1-RR2-6 toR2-8R-3R-4MHOPCP/C1CTRC2C3CROTMU-15SOTMU-15OTMU-24NMU-24UMUM1M2A1ROSHPIFP-1FP-2SG licensed
care facility
for 6 or
fewer
persons
Residential
Care
Facility
(licensed
care facility
for 7 or
more
persons

C C C C C C C - - - - - - C C C C C - - - - - - - - -
Congregate
care
(assisted
living)
home health
facility (6 or
fewer
persons)
P
*
P* P* P* P* P* P* - - - - - - - - - P P - - - - - - - - - 2131
10 ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

LAND USE
R1-5R1-6 toR-15R1-20 toR-140 &R1-RR2-6 toR2-8R-3R-4MHOPCP/C1CTRC2C3CROTMU-15SOTMU-15OTMU-24NMU-24UMUM1M2A1ROSHPIFP-1FP-2SG Convalesce
nt
Facility,
skilled
nursing
facility
- - - - - - - - - - - - - - - - P P - - - - - - - - -
Convalesce
nt Hospital
- - - - C C - C C C C C - - - - - - - - - - - - - - -
Home for
elderly, or
mentally,
or
physically
disabled
persons
(6 or fewer
persons
P
*
P* P* P* P* P* P* - - - - - - - - - - - - - - - - - - - - 2132
11 ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

LAND USE
R1-5R1-6 toR-15R1-20 toR-140 &R1-RR2-6 toR2-8R-3R-4MHOPCP/C1CTRC2C3CROTMU-15SOTMU-15OTMU-24NMU-24UMUM1M2A1ROSHPIFP-1FP-2SG Residential
Structure
- - - - - - - - - - - - - - - - - - - - - - - - - C -
Rest Home
Skilled
Nursing
Facility
- - - C C C C C C C - - - - - - - - - - - - - - -
Sanitarium - - - - C C - - - - - - - - - - - - - - C - - - - - - 2133
12 SECTION XIII:

Table 17.34.060.A of the Orange Municipal Code, “Zoning – Off-Street Parking and Loading – Required Number of Parking Spaces for Residential Uses,” is hereby amended to read as follows:

Table 17.34.060.A

REQUIRED NUMBER OF PARKING SPACES FOR RESIDENTIAL USES

USE REQUIRED NUMBER OF SPACES
Skilled
nursing
facility
1 space per 4 beds.

Residential
Care Facility
(all
unlicensed
facilities, or
licensed care
facility for 6
or fewer
persons
Residential Care Facilities (all unlicensed facilities, or licensed care facility for 6 or fewer persons) are treated as a residential use as required by state law, and are to be parked at the same parking requirements as a single-family home.

Residential
Care Facility
(7 or more)
1 space per 3 beds or approval of a Conditional Use Permit for an alternate rate based on a Parking Demand Study. An Overflow Parking Plan may be required as part of a conditional use permit.

Independent
living
facility
1 enclosed or covered space per unit, plus 1 space per 10 units for guests.

SECTION XIV:

This ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) (Common Sense Exemption), because it can be seen with certainty that there is no possibility that the ordinance may have a significant effect on the environment. The proposed amendments do not significantly increase the potential (in manner or degree) for future development, beyond what is currently permitted by the City of Orange Zoning Code. Therefore, the project would not result in a direct or reasonably foreseeable indirect physical change in the environment.

SECTION XV:

If any section, subdivision, paragraph, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each section, subdivision, paragraph, sentence, clause and phrase thereof, 2134
13 irrespective of the fact that any one (or more) section, subdivision, paragraph, sentence, clause or phrase had been declared invalid or unconstitutional.

SECTION XVI:

The City Clerk is hereby directed to certify the adoption of this Ordinance and cause the same to be published as required by law. This Ordinance shall take effect thirty (30) days from and after the date of its final passage.

ADOPTED this day of , 2026.

Daniel R. Slater, Mayor, City of Orange
ATTEST:

Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange

STATE OF CALIFORNIA )

COUNTY OF ORANGE )

CITY OF ORANGE )
I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Ordinance was introduced at the regular meeting of the City Council held on the day of , 2026, and thereafter at the regular meeting of said City Council duly held on the day of , 2026 was duly passed and adopted by the following vote, to wit:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
2135
ORDINANCE NO. 07-26

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
ORANGE AMENDING TITLE 17 OF THE ORANGE MUNICIPAL

CODE TO COMPLY WITH STATE LAW REGARDING

RESIDENTIAL CARE FACILITIES (HEALTH AND SAFETY
CODE SECTIONS 1267.16 AND 1500-1569.889)
WHEREAS, the City of Orange 2021-2029 Housing Element was adopted by City Council on October 20, 2023, and the California State Department of Housing and Community Development found the Housing Element in substantial compliance with State Housing Element Law on January 2, 2024.

WHEREAS, the 2021-2029 Housing Element, Housing Plan Program 4F, states “The City will amend the Orange Municipal Code to be compliant with State law regarding residential care facilities serving seven (7) or more persons in all residential zones, as well as ensure barrierfree housing choices for persons with disabilities.” (Sections 1267.8, 1566.3, 1568.0831 of the California Health and Safety Code).

WHEREAS, Health and Safety Code Sections 1267.16, 1566.3, 1568.0831 require local governments to treat licensed group homes and residential care facilities with six or fewer residents no differently than other by-right single-family housing uses, and that Local agencies must allow these licensed, residential-care facilities in any area zoned for residential use, and may not require licensed, residential-care facilities for six residents or less to obtain conditional use permits or variances that are not required of other family dwellings.

WHEREAS, the Health and Safety Code provides that Residential Care Facilities operating as single-family residences that provide licensable services to more than six residents may be subject to conditional use or other discretionary approval processes.

WHEREAS, the Health and Safety Code states that for the purpose of all local ordinances, a residential care facility that serves six or fewer persons shall not be included within the definition of a boarding house, rooming house, institution, guest home, rest home, community residence, or other similar term that implies that the residential care facility is a business run for profit or differs in any other way from a family dwelling.

WHEREAS, the Health and Safety Code provides regulations for family day care home facilities for both small and large, and has updated operation regulations.

WHEREAS, the City of Orange seeks to comply with these statutory provisions by amending the Orange Municipal Code (OMC) to appropriately classify and allow residential care facilities in applicable zoning districts and update family day care facilities consistent with state law.
2136
WHEREAS, the Planning Commission having considered the proposed revisions to the OMC at a public hearing held on February 19, 2026, including review of the staff report, and having received public testimony on the item, and adopted Planning Commission Resolution No. 06-26 recommending that the City Council approve the proposed amendments to Title 17, Chapter 17.13 of the Orange Municipal Code; and
WHEREAS, the City Council, having now considered the proposed changes to the OMC at a public hearing held on May 26, 2026, including review of the staff report, and having received public testimony on the item, desires to adopt the Proposed Ordinance.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ORANGE DOES ORDAIN AS FOLLOWS:

SECTION I:

The recitals stated above are true and correct, incorporated herein, and with the public record, form the basis for this Ordinance.

SECTION II:

Section 17.04.022 of the Orange Municipal Code, “Zoning – Definitions – “C” Definitions,” is hereby amended to delete the following definitions:
“Community Care Facility” means any facility, place or building where nonmedical care and supervision are provided for seven or more persons (does not include the licensee or members of the licensee's family or persons employed as facility staff). "Convalescent facility" means a use providing bed care and in-patient services for persons requiring regular medical attention, and persons aged or infirm unable to care for themselves, excluding surgical or emergency medical services. "Convalescent hospital" means a facility providing long-term nursing, dietary and other medical services to convalescents or invalids but not providing surgery or primary treatments such as are customarily provided in a hospital. A convalescent hospital must be licensed by the State as such.

SECTION III:

Section 17.04.023 of the Orange Municipal Code, “Zoning – Definitions – “D” Definitions,” is hereby amended to delete the following definition:
“Day nurseries” means a facility where children are temporarily cared for in their parents' absence when and if there is provided on the lot or adjacent to the premises a play lot completely fenced, and containing an area of not less than 900 square feet, plus an additional 50 square feet for each child in excess of nine children and subject to all safety precautions as required by the Fire Department and Building Division.

SECTION IV:

Section 17.04.025 of the Orange Municipal Code, “Zoning – Definitions – “F” Definitions,” is hereby amended to revise the following definitions as follows:
“Family” means an individual or two or more persons related by blood, marriage or adoption, or a group of not more than five unrelated persons, “Family” means one or more persons living together as a single housekeeping unit in a dwelling unit. This includes, but is not limited to, licensed residential care facilities serving six or fewer persons, as defined by state law. The term “family” shall not be limited by the presence of non-related individuals or the existence of a legal guardianship or other legal relationship. “Family day care homes, large” means a single-family dwelling with the accessory daytime care of seven nine to 12 14 children. Pursuant to California Health and Safety Code §1597.40–1597.46 must be considered a residential use of property provided they meet zoning requirements.
“Family Day Care, Small” means a single-family dwelling with the accessory daycare of one to six up to eight children. Pursuant to California Health and Safety Code §1597.40– 1597.46 must be considered a residential use of property and is permitted by right.

SECTION V:

Section 17.04.026 of the Orange Municipal Code, “Zoning – Definitions – “G” Definitions,” is hereby amended to revise the following definition as follows:
"Group home" means any residential care facility for six or fewer persons who are mentally disordered or otherwise handicapped or supervised and where such a facility is licensed by the State.
“Group home” means a residential facility that provides 24-hour care and supervision to children, delivered at least in part by staff employed by the licensee in a structured environment.

The care and supervision provided by a group home shall be nonmedical, except as otherwise permitted by law.
2138
SECTION VI:

Section 17.04.033 of the Orange Municipal Code, “Zoning – Definitions – “N” Definitions,” is hereby amended to delete the following definition as follows:
"Nursing home" means an extended or intermediate care facility licensed or approved to provide full-time convalescent or chronic care to individuals who, by reason of advanced age, chronic illness or infirmity, are unable to care for themselves. (Ord. 20-82; Ord. 12-95) SECTION VII:

Section 17.04.037 of the Orange Municipal Code, “Zoning – Definitions – “R” Definitions,” is hereby amended to revise the following definition as follows:
"Residential care facility" means any family home, group care facility or similar facility as determined by the Director of the State Department of Social Services which provides 24 hour non-medical services, supervision or assistance essential for sustaining the activities of daily living or for the protection of the individual. Such facilities require state licensing and are not considered "senior citizen housing" for the purposes of this title. “Residential Care Facility” means any family home, group care facility, or similar facility as determined by the Director of the State Department of Social Services, for 24-hour nonmedical care of persons in need of personal services, supervision, or assistance essential for sustaining the activities of daily living or for the protection of the individual.

Section 17.04.037 of the Orange Municipal Code, “Zoning – Definitions – “R” Definitions,” is hereby amended to delete the following definition as follows:
"Rest home" means an extended or intermediate care facility licensed or approved to provide full-time convalescent or chronic care to individuals who, by reason of advanced age, chronic illness or infirmity, are unable to care for themselves.

SECTION VIII:

Section 17.04.038 of the Orange Municipal Code, “Zoning – Definitions – “S” Definitions,” is hereby amended to delete the following definitions as follows:
2139
"Sanitarium, health" means an institution where patients, other than the mentally disoriented or mentally incompetent, are housed and where medical or post-surgical treatment is provided.
"Sanitarium, mental" means an institution for the recuperation and treatment of the mentally disordered, mentally incompetent or victims of drug addiction.

SECTION IX:

Title 17, Section 17.13.040 of the Orange Municipal Code is hereby amended to revise the following as follows:

NN. Large-Family Day Care Homes. Large-family day care homes are subject to the following:

1. The business shall be operated in a single-family residence on property residentially zoned.

2. No other licensed large-family day care home shall be located within 600 feet of the exterior property boundaries of the proposed home.

2. The City noise ordinance in Chapter 8.24 shall be complied with at all times, and hours of outdoor play activities shall only be permitted between the hours of 8:00 a.m. to 8:00 p.m.

3. Two enclosed parking spaces shall be maintained for parking purposes only.

4. The facility shall be licensed by the State Department of Social Services.

5. The facility shall comply with State Fire Marshal standards for large-family day care facilities.

6. No signs advertising the business shall be allowed.

7. Compliance with all development standards for single-family residential structures is required.

8. A site plan identifying pedestrian access to and from loading area shall be submitted.

SECTION X:

Title 17, Section 17.13.040 of the Orange Municipal Code is hereby amended to add the following:

KKK. Reserved for Future Section.
2140
LLL. Residential Care Facilities. Residential Care Facilities may occur in residential zones as specified in Table 17.13.030 pursuant to the following:

3. Residential Care Facilities for Six or Fewer Persons.

In accordance with Health and Safety Code Section 1566.3 and 1568.0831, a Residential Care Facility that provides licensable services to six or fewer persons shall be considered a residential use of property by a single family. Such housing shall be permitted in all zones that allow residential uses, subject to the same standards and restrictions applicable to other residential dwellings of the same type in the same zone.

In addition:
a. The residents and operators of the facility shall be considered a family for the purposes of any law or zoning ordinance that relates to the residential use of property pursuant to this chapter.
b. A residential care facility that serves six or fewer persons shall not be included within the definition of a boarding house, rooming house, institution, guest home, rest home, community residence, or other similar term that implies that the residential care facility is a business run for profit or differs in any other way from a family dwelling.

4. Residential Care Facilities for Seven or More Persons.

A Residential Care Facility that provides licensable services to seven or more persons shall require approval of a conditional use permit, and shall be subject to the applicable zoning, permitting, and conditional use requirements of the underlying zone, consistent with all local and state housing laws.

5. Heath and Safety Requirements.

All Residential Care facilities, licensed and un-licensed must comply with applicable code requirements including but not limited to, building code, health and safety code, and fire code.
2141
SECTION XI:

Title 17, Section 17.13.050 of the Orange Municipal Code is hereby amended to delete W. Family Day Care Home – Large (Seven to 12 Children), and is replaced as follows:

W. Family Day Care Home—Large (Nine to 14 Children).

1. No other licensed and permitted large-family day care home shall exist within 300 feet of the exterior property boundaries of the proposed facility.

2. The noise ordinance of this code (Chapter 8.24) shall be complied with at all times, and hours of outdoor play or activities shall only be permitted between the hours of 8:00 a.m. and 8:00 p.m.

3. On-site garages and parking areas needed to meet the parking requirements of the zone shall not be converted to any other use.

4. All owners of real property within 100 feet of the property boundaries of the proposed use, as indicated on the last equalized assessment roll and the City Council, shall be notified by the Zoning Administrator regarding the application not less than 10 days prior to the date on which the decision will be made.

5. No hearing on the application for a permit issued pursuant to this section shall be held before a decision is made unless requested by the applicant or other affected person, in writing, prior to 3:00 p.m. of the decision date.

6. The applicant or other affected person may appeal the decision on the application within 15 days of the decision. Appeals shall be made in accordance with Section 17.08.050.

W. Reserved for Future Section.

SECTION XII:

Table 17.13.030, of the Orange Municipal Code, “Zoning – Master Land Use Table – Care Facility,” is hereby amended to be revised to the following:
2142

ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

Day Care
Center
(incudes
child,
elderly, or
disabled)
- - - - - - - C P
*
P
*
P
*
P
*
- C
*
C
C*
C
C
*
C
P*
C
P
*
C
- - - - - - - - -
Day Care
Center in
conjunction
with a
church or
school or
other similar
institutional
use

C C C C C C C -
C
-
C
-
C
-
C
-
C
- -
C
-
C
-
C
-
C
-
C
-
C
-
C
-
C
- - C - - -
2143

ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

LAND USE
R1-5R1-6 toR-15R1-20 toR-140 &R1-RR2-6 toR2-8R-3R-4MHOPCP/C1CTRC2C3CROTMU-15SOTMU-15OTMU-24NMU-24UMUM1M2A1ROSHPIFP-1FP-2SG Family Day
Care homes,
small (up to
eight
children)

P P P P P P P P P P
Family Day
Care homes,
large (9-14
children)
P
*
P* P* P* P
*
P
*
P
*
C
+
P
*
C+
P*
C
+
P
*
Housing—Includes all structures permitted as living quarters whether they be for short or long-term occupancy. Includes all uses identified in California Building Code definitions that are preceded with main entry words (key terms) that include one of the following: Dwelling, unit, house, housing, congregate, residence, multi-family, dormitory, home(s), hotel, motel, residential care facility, residential facility, or lodging.

Residential
Care Facility
(all
unlicensed
facilities, or
licensed care
P* P* P* P* P* P* P* - - - - - - P* P* P* P* P* - - - - - - - - - 2144

ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

LAND USE
R1-5R1-6 toR-15R1-20 toR-140 &R1-RR2-6 toR2-8R-3R-4MHOPCP/C1CTRC2C3CROTMU-15SOTMU-15OTMU-24NMU-24UMUM1M2A1ROSHPIFP-1FP-2SG facility for 6
or fewer
persons
Residential
Care Facility
(licensed
care facility
for 7 or
more
persons

C C C C C C C - - - - - - C C C C C - - - - - - - - -
Congregate
care
(assisted
living) home
health
facility (6 or
fewer
persons)
P* P* P* P* P* P* P* - - - - - - - - - P P - - - - - - - - - Convalescen
t
facility,
skilled
- - - - - - - - - - - - - - - - P P - - - - - - - - -
2145

ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

LAND USE
R1-5R1-6 toR-15R1-20 toR-140 &R1-RR2-6 toR2-8R-3R-4MHOPCP/C1CTRC2C3CROTMU-15SOTMU-15OTMU-24NMU-24UMUM1M2A1ROSHPIFP-1FP-2SG nursing
facility
Convalescen
t Hospital
- - - - C C - C C C C C - - - - - - - - - - - - - - -
Home for
elderly, or
mentally,
or physically
disabled
persons
(6 or fewer
persons
P* P* P* P* P* P* P* - - - - - - - - - - - - - - - - - - - - 2146

ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

The Single-family Dwelling Use provisions of Table 17.34.060.A of the Orange Municipal Code, “Zoning – Off-Street Parking and Loading – Required Number of Parking Spaces for Residential Uses,” is hereby amended to read as follows:

Table 17.34.060.A

REQUIRED NUMBER OF PARKING SPACES FOR RESIDENTIAL USES

USE REQUIRED NUMBER OF SPACES
Convalescent
facility,
Skilled
nursing
facility, rest
home,
convalescent
hospital or
facility
1 space per 4 beds.

Assisted
living
Residential
Care Facility
(7 or more)
1 space per 3 beds or approval of a Conditional Use Permit for an alternate rate based on a Parking Demand Study. An Overflow Parking Plan may be required as part of a conditional use permit.

Independent
living
facility
1 enclosed or covered space per unit, plus 1 space per 10 units for guests.

SECTION XIV:

ADOPTED this 26th day of May, 2026.
__________________________________________
Daniel R. Slater, Mayor, City of Orange
ATTEST:
____________________________________
Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:
____________________________________
Nathalie Adourian, City Attorney

STATE OF CALIFORNIA )

COUNTY OF ORANGE )

CITY OF ORANGE )
I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Ordinance was introduced at the regular meeting of the City Council held on the 26th day of May, 2026, and thereafter at the regular meeting of said City Council duly held on the 26th day of May, 2026 was duly passed and adopted by the following vote, to wit:
2150
AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:
____________________________________
Pamela Coleman, City Clerk, City of Orange
2151
Agenda Item
Planning Commission
Item #: 5.1. 2/19/2026 File #: 26-0071
TO: Chair and Members of the Planning Commission
THRU: Hayden Beckman, Planning Manager
FROM: Arlen Beck, Associate Planner

1. SUBJECT
Public Hearing to consider recommendation of an Ordinance amending the Orange Municipal Code to update regulations for Residential Care Facilities and Daycare Homes ensuring consistency with State Law; and finding of CEQA exemption.

3. RECOMMENDED ACTION

1. Conduct and close the Public Hearing.

2. Adopt Planning Commission Resolution No. 06-26 recommending the City Council adopt an Ordinance amending Title 17 of the Orange Municipal Code to bring the City’s regulations regarding Residential Care Facilities and Family Day Care Homes into compliance with State law, specifically the California Community Care Facilities Act (Health and Safety Code Sections 1500- 1569.889) and Family Day Care Homes Act (Health and Safety Code Sections 1597.40-1597.46), and updates to related definitions and land use tables for consistency.

3. Recommend that the City Council find the ordinance categorically exempt from the California Environmental Quality Act (CEQA) per State CEQA Guidelines Sections 15061(b)(3).

4. PROJECT BACKGROUND
The City of Orange General Plan 2021-2029 Housing Element includes Housing Policy Action 4F, which commits the City to amend the Orange Municipal Code to comply with State law for residential care facilities and day care homes.

State housing laws require the following:
· Health and Safety Code §§1566.3 and 1568.0831 requires jurisdictions to treat licensed residential care facilities serving six or fewer residents as a by-right residential use. · Health and Safety Code §§1597.40-1597.46 requires that family day care homes be treated as City of Orange Page 1 of 3 Printed on 2/10/2026
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Attachment 3
2152
Item #: 5.1. 2/19/2026 File #: 26-0071
a residential use and to be permitted in all zones allowing residential dwellings.

5. PROJECT DESCRIPTION
The proposed ordinance updates the Orange Municipal Code (OMC) to clarify the treatment of Residential Care Facilities and Family Day Care Homes consistent with State law. It removes outdated definitions, updates operational standards, and revises land use tables to reflect appropriate permitting requirements.

6. PROJECT ANALYSIS
The proposed ordinance updates the City’s zoning regulations governing Residential Care Facilities and Family Day Care Homes to ensure consistency with state law and the City’s adopted 2021-2029 Housing Element. The amendments are primarily technical in nature and are intended to modernize outdated code provisions, eliminate regulatory inconsistencies, and bring the Municipal Code into full compliance with mandatory state requirements.

The current Municipal Code contains outdated terminology and regulatory standards that no longer align with the California Community Care Facilities Act or the Family Day Care Homes Act. Terms such as “rest home,” “convalescent facility,” and “day nursery” are no longer used by the State Department of Social Services or the State Fire Marshal, and their continued use creates confusion for applicants, residents, and City staff. In addition, certain provisions of the Code require discretionary approvals or impose spacing or location requirements on residential care facilities and family day care homes that state law now requires to be treated as residential uses by right.

Overall, the proposed ordinance improves clarity and consistency within the Zoning Code while supporting the City’s broader housing and equity goals. The amendments expand housing opportunities for seniors, persons with disabilities, reduce unnecessary regulatory barriers, and simplify code administration and enforcement. The update strengthens the legal defensibility of the City’s Zoning Code and Housing Element and advances the City’s goal of providing equitable, inclusive, and accessible housing opportunities.

7. AUTHORIZING GUIDELINES
Orange Municipal Code Section 17.08.020 authorizes the Planning Commission to review and make advisory recommendations to the City Council on Zoning Ordinance Amendments.

City of Orange Page 2 of 3 Printed on 2/10/2026
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Item #: 5.1. 2/19/2026 File #: 26-0071

8. PUBLIC NOTICE
On January 29, 2026, a notice was published in the Orange City News newspaper for a public hearing before the Planning Commission on February 19, 2026.

9. ENVIRONMENTAL REVIEW
The proposed project is not subject to the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the state CEQA Guidelines (Common Sense Exemption) because it can be seen with certainty that there is no possibility that it would have a significant effect on the environment.

10. ADVISORY BOARD ACTION
None.

11. ATTACHMENTS
· Attachment 1 Planning Commission Resolution No. PC 06-26 with Draft City Council Ordinance XX-26 - Residential Care Facilities and Family Day Care Update Ordinance (Clean) · Attachment 2 Draft City Council Ordinance XX-26 - Residential Care Facilities and Family Day Care Update Ordinance (Redlined)
City of Orange Page 3 of 3 Printed on 2/10/2026
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APPROVED BY THE PLANNING COMMISSION ON APRIL 20, 2026

MINUTES
City of Orange
Planning Commission
February 19, 2026
The Planning Commission of the City of Orange, California convened on February 19, 2026, at 5: 30 p. m. in a Regular Meeting in the Council Chamber, 300 E. Chapman Avenue, Orange, California.

1. OPENING/ CALL TO ORDER
Chair Vejar called the meeting to order at 5: 32 p. m.

1. 1 PLEDGE OF ALLEGIANCE
Commissioner Ruby Maldonado led the flag salute.

1. 2 ROLL CALL

Present: Leslie, Martinez, Vazquez, Maldonado, Tucker, McCormack, and Vejar

Absent: None

2. PUBLIC COMMENTS
None.

3. CONSENT CALENDAR
All matters listed under the Consent Calendar are considered to be routine by the Planning Commission and will be enacted by one motion. There will be no separate discussion of said items unless members of the Planning Commission, staff or the public request specific items removed from the Consent Calendar for separate action.

3. 1. Approval of meeting minutes of the City of Orange Planning Commission Regular Meeting held on February 2, 2026.

ACTION: Approved minutes as presented.

3. 2. Request for a time extension for the Copic Orthodox Church located at 491 N.

Hewes Street ( Conditional Use Permit No. 3215- 23, Major Site Plan Review No. 1054- 21, and Design Review No. 1799- 15).

ACTION: Approved a two- year extension for Conditional Use Permit No. 3215- 23, Major Site Plan Review No. 1054- 21, and Design Review No. 1799- 15.

Approval of the Consent Calendar
A motion was made by Commissioner Maldonado, seconded by Commissioner McCormack, to approve the Consent Calendar. The motion carried by the following vote:

Ayes: Leslie, Martinez, Vazquez, Maldonado, Tucker, McCormack, and Vejar

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Noes: None

Absent: None

4. COMMISSION BUSINESS

4. 1. Selection of Planning Commission Officers.

A motion was made by Commissioner Tucker, seconded by Commissioner Martinez to nominate Vice Chair Leslie to serve as Chair for a one- year term effective February 20, 2026. The motion carried by the following vote:

Ayes: Leslie, Martinez, Vazquez, Maldonado, Tucker, McCormack, and Vejar Noes: None

Absent: None
A motion was made by Commissioner Vazquez, seconded by Commissioner Martinez to nominate Commissioner Tucker to serve as Vice Chair for a one- year term effective February 20, 2026. The motion carried by the following vote:

Ayes: Leslie, Martinez, Vazquez, Maldonado, Tucker, McCormack, and Vejar Noes: None

Absent: None

5. PUBLIC HEARINGS

5. 1. Public Hearing to consider recommendation of an Ordinance amending the Orange Municipal Code to update regulations for Residential Care Facilities and Daycare Homes ensuring consistency with State Law; and finding of CEQA exemption.

Associate Planner, Arlen Beck, presented a summary of the proposed project.

Chair Vejar opened the Public Hearing at 5: 39 p. m.

There being no speakers, Chair Vejar closed the Public Hearing at 5: 39 p. m.

A motion was made by Chair Vejar, seconded by Commissioner Maldonado to:

1. Adopt Planning Commission Resolution No. 06- 26 recommending the City Council adopt an Ordinance amending Title 17 of the Orange Municipal Code to bring the City' s regulations regarding Residential Care Facilities and Family Day Care Homes into compliance with State law, specifically the California Community Care Facilities Act Health and Safety Code Sections 1500- 1569. 889) and Family Day Care Homes Act Health and Safety Code Sections 1597. 40- 1597. 46), and updates to related definitions and land use tables for consistency.

2. Recommend that the City Council find the ordinance categorically exempt from the California Environmental Quality Act ( CEQA) per State CEQA Guidelines Sections 15061( b)( 3).

The motion carried by the following vote:

Ayes: Leslie, Martinez, Vazquez, Maldonado, Tucker, McCormack, and Vejar Noes: None

Absent: None

5. 2. Public Hearing to consider a request to subdivide an existing vacant site to construct 15 detached three- story residential dwellings at 715 W. Fletcher Avenue and finding of CEQA Exemption ( ENT25- 0015).

Senior Planner, Ryan Agbayani, presented a summary of the proposed project.

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Chair Vejar opened the public hearing at 5:50 p. m.

Applicant Bart Hornstein spoke in favor of the project.

Chair Vejar closed the public hearing at 5:52 p. m.

Commissioners had further questions for the applicant and staff.

Chair Vejar re- opened the public hearing at 5: 53 p. m.

Mr. Hornstein and staff members responded to questions regarding FAR, adjacent uses, ADA sidewalks, existing similar projects, and the affordable units.

Chair Vejar closed the public hearing at 5: 59 p. m.

A motion was made by Commissioner Vazquez, seconded by Chair McCormack to:

1. Adopt Planning Commission Resolution No. PC 07- 26 recommending City Council approval of ENT25- 0015 ( Tentative Tract Map, Major Site Plan Review, and Administrative Design Review).

2. Recommend that the City Council find the request categorically exempt from the California Environmental Quality Act ( CEQA) in accordance with Section 15332 ( Class 32- In- Fill Development Projects) of the State CEQA Guidelines.

The motion carried by the following vote:

Ayes: Leslie, Martinez, Vazquez, Maldonado, Tucker, McCormack, and Vejar Noes: None

Absent: None

6. ADJOURNMENT
There being no further business, the meeting was adjourned at 6: 02 p. m.

The next Regular Planning Commission Meeting will be held on Monday March 2, 2026 at 5: 30 p. m., in the Council Chamber.
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Agenda Item
Orange City Council
Item #: 10.1. 5/26/2026 File #: 26-0166
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Trang Nguyen, Finance Director

1. SUBJECT
Fiscal Year 2026-2027 City of Orange Preliminary Budget and Five-Year Capital Improvement Program

2. SUMMARY
Each spring, the City staff presents an annual preliminary budget to the City Council that serves as the City’s operational and capital improvement plan for the upcoming fiscal year. This budget document is prepared following two City Council budget study sessions, during which various aspects of the proposed budget were considered and direction from City Council was given.

3. RECOMMENDED ACTION

1. Review and affirm the Fiscal Year 2026-2027 Preliminary Citywide Budget, following the two budget study sessions on March 24 and April 14, for all funds consisting of total revenues of $292.9 million and total expenditures of $317.3 million, including transfers. a. General Fund revenues totaling $171.2 million and expenditures totaling $170.8 million; b. Staffing for Fiscal Year 2026-2027 at 708.567 budgeted FTEs; and c. Five-Year Capital Improvement Program.

2. Direct staff to return in June, for the Fiscal Year 2026-2027 budget adoption.

4. FISCAL IMPACT
The Fiscal Year 2026-2027 Preliminary Citywide Budget includes total revenues of $292.9 million and total expenditures of $317.3 million for all funds, including transfers. Available fund balance will be used to cover the difference between revenue and expenditure in Special Revenue Funds and Capital Improvement Project Funds. This does not necessarily reflect an ongoing structural imbalance, but rather timing and funding strategy for these funds.

The total General Fund revenues are $171.2 million, and expenditures are $170.8 million, including transfers.

5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability.

6. DISCUSSION AND BACKGROUND
Background:

The City’s budget is a financial plan based on anticipated revenues and expenditures in a fiscal year City of Orange Page 1 of 14 Printed on 5/21/2026
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The City’s budget is a financial plan based on anticipated revenues and expenditures in a fiscal year starting July 1st through June 30th. Each year, the City’s budget is prepared, prioritizing public safety and infrastructure projects, City Council Goals, and providing the highest possible level of service to the community. The Fiscal Year 2026-2027 (FY27) budget development has been presented and reviewed over the course of two City Council budget study sessions, taking place in March and April 2026.

As noted in the March 2026 budget study session, FY27 continues to present significant financial challenges for the General Fund, as the City faces an ongoing structural imbalance between revenues and expenditures. Development of the FY27 Proposed Budget began with a zero-based budgeting approach, requiring departments to justify expenditures from the ground up rather than relying on prior-year spending as the baseline. Over the last couple of months, staff continued to refine the FY27 budget to incorporate the City Council directions, reprioritize operational needs, and incorporated changes from the third quarter financial information.

In summary, the FY27 Preliminary Budget, for all funds, includes total revenues of approximately $292.9 million and total expenditures of $317.3 million, including transfers. Available fund balance will be used to cover the difference between revenue and expenditure in Special Revenue Funds and Capital Improvement Project Funds. This does not necessarily reflect an ongoing structural imbalance, but rather timing and funding strategy for these funds. The total full-time equivalent (FTE) 708.567 positions, an increase of 18 FTEs from the proposed budget for the enhanced Ambulance Operator program. The General Fund total revenues for FY27 are approximately $171.2 million and expenditures of $170.8 million, including transfers.

Discussion:

Fiscal Year 2025-26 (FY26) General Fund Year-End Estimates On March 24, 2026 staff presented a mid-year review including year-end estimates of FY26 with a focus on the General Fund (Attachment 8). Since then, staff have updated the FY26 year-end estimates based on the third quarter revenues and expenditures.

The year-end estimate for revenues increased by $4.0 million or 2.6% mainly due to the timing of when revenues were recorded in the fees for services, fines, and miscellaneous revenue categories; higher property transfer tax revenue from home sales; and higher-than-anticipated sales tax revenue driven by elevated fuel prices. Additional increases were also attributed to underestimated plan check fees, construction inspection fees, and building permit revenues, which were further revised during the third quarter.

Additionally, year-end estimates for expenditures increased by $2.7 million or 1.7% mainly from the timing of several larger payments made during the third quarter, including the City’s $1.5 million North SPA payment and implementation costs for paid parking, which impacted expenditure estimates for FY26.

This resulted in an operating deficit of $3.7 million, a decrease of $1.3 million from the mid-year review. After setting aside the 18% Catastrophic reserve, the General Fund is estimated to have an undesignated fund balance of $1.9 million. This estimate is based on year-to-date actuals and does not include any year-end entries. Staff will return in the fall with a more comprehensive review of FY26 once the financial audit has been concluded.

Table 1: FY26 Year-End Estimated Fund Balance
FY26 YE Estimate
@ Mid-Year
FY26 YE Estimate
@ Q3
Variance
Operating Revenues $153,826,935 $157,868,578 $4,041,643 Total Revenues 153,826,935 157,868,578 4,041,643
Operating Expenditures 141403713 144093480 2689767
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FY26 YE Estimate
@ Mid-Year
FY26 YE Estimate
@ Q3
Variance
Operating Revenues $153,826,935 $157,868,578 $4,041,643 Total Revenues 153,826,935 157,868,578 4,041,643
Operating Expenditures 141,403,713 144,093,480 2,689,767 Debt Service 17,515,954 17,519,111 3,157
Total Expenditures 158,919,667 161,612,591 2,692,924
Operating Surplus/Deficit -5,092,732 -3,744,013 1,348,719 Transfers-In 4,485,252 4,485,252 -
Transfers-Out 1,455,252 1,455,252 -
Net Surplus/Deficit -2,062,732 -714,013 1,348,719
Estimated Beginning Fund Balance -
7/1/2025
28,553,772 28,553,772 -
Estimated Ending Fund Balance -
6/30/2026
26,491,040 27,839,759 1,348,719
Catastrophic Reserve 25,452,668 25,936,826 484,158
Undesignated Ending Fund Balance
- 6/30/2026
$1,038,371 $1,902,932 $864,561
Fiscal Year 2026-27 (FY27) Preliminary General Fund Revenue The FY27 General Fund operating revenues, including transfers, is projected to be almost $171.2 million, an increase of $492,000 or 0.3% from the proposed budget and an increase of $8.8 million or

5.4% from the FY26 year-end estimates, including transfers.

Provided below is a summary of the assumptions used for the FY27 General Fund revenues:
· Property Tax: The City’s largest source of General Fund revenues is proposed to be $61.7 million in FY27, an increase of approximately $460,000, or 0.8%, over the FY27 Proposed Budget presented at the March Budget Study Session. The increase reflects revised year-end revenue estimates and signs of a strengthening housing market driven by slightly lower interest rates and rising rental costs, which have contributed to increased home sales activity.

While Proposition 13 generally limits annual assessed value increases to 2% on existing properties, additional growth occurs when properties change ownership and are reassessed at current market value. The housing market is expected to remain stable in FY27, supporting continued modest growth in property tax revenues.

FY26 Year-end Estimate: $59,822,181
FY27 Proposed Budget: $61,239,700
FY27 Preliminary Budget: $61,700,600
Increase/Decrease to YE: +$1,878,419 or +3.1%
· Sales Tax: The FY27 revenue is projected at approximately $51.6 million, reflecting a $917,500, or 1.8%, increase over the FY27 Proposed Budget presented at the March Budget Study Session. The increase is primarily attributable to revised year-end revenue estimates and continued upward trends in fuel prices, which are expected to persist through FY27.

According to statewide reports from the City’s sales tax consultant, while inflation has moderated and interest rates have declined, statewide economic indicators suggest City of Orange Page 3 of 14 Printed on 5/21/2026
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Item #: 10.1. 5/26/2026 File #: 26-0166
moderated and interest rates have declined, statewide economic indicators suggest consumers still remain cautious. As a result, taxable sales growth is expected to remain modest in all other categories, with consumer spending largely focused on essential goods and value-oriented purchases. Although fuel prices have continued to trend upward due to external and foreign market factors, the FY27 projections assume moderate additional growth in sales tax revenues due to thresholds within the City’s current sales tax agreements and the potential volatility of this sector.

FY26 Year-end Estimate: $51,335,804
FY27 Proposed Budget: $50,676,800
FY27 Preliminary Budget: $51,594,300
Increase/Decrease to YE: +$258,496 or +0.5%
· Fines and Forfeitures: Fine and forfeitures revenue is projected at approximately $2.9 million in FY27, an increase of about $22,700 (0.8%) over the FY27 Proposed Budget. This reflects anticipated revenues of approximately $1.0 million from the City’s paid parking program in Old Towne, as well as $300,000 from increased collections associated with Transient Occupancy Tax and Business License audit activities. As these revenues are partially dependent on program performance and collection activity, staff have refined this projection accordingly to align with the revised FY26 year-end estimates.

FY26 Year-end Estimate: $2,426,324
FY27 Proposed Budget: $2,874,900
FY27 Preliminary Budget: $2,897,600
Increase/Decrease to YE: +$471,276 or +19.4%
· Fees for Service: The city is projecting just under a total of approximately $8.0 million in FY27, an increase of $1 million (14.5%), compared to FY27 Proposed Budget presented at the March Budget Study Session. These fees are intended to offset the City’s operating costs of providing services and have been revised following the user fee study to more appropriately align charges with the cost of service delivery. This estimate considers the updated fees adopted at the January 13th Council meeting, the April 28th Council meeting, and considers the revised FY26 Year End Estimates.

FY26 Year-end Estimate: $7,647,596
FY27 Proposed Budget: $6,944,100
FY27 Preliminary Budget: $7,953,100
Increase/Decrease to YE: +$305,504 or +4.0%
· Internal Service Charges: Internal Service Charges are projected to be almost $4.8 million, an increase of $334,000 (7.4%) from the FY27 Proposed Budget presented at the March Budget Study Session. The increase in Internal Service Charges from the Proposed Budget considers the revised Year End Estimates. The FY27 Budget reflects a revised methodology that excludes Internal Service Charges charged to and from the General Fund; as a result, both expenditure and revenue projections are lower compared to the FY26 Year-End Estimate.

FY26 Year-end Estimate: $10,077,495
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FY27 Proposed Budget: $4,496,300
FY27 Preliminary Budget: $4,830,500
Increase/Decrease to YE: -$5,246,995 or -52.1%
· Miscellaneous/Other Revenue : Miscellaneous/other revenue is projected at $4.2 million in FY27, a decrease of approximately $805,000 (16.2%) compared to the FY27 Proposed Budget presented at the March budget study session. This category includes one-time reimbursements, donations, and other miscellaneous revenues, including approximately $1.0 million in Cal OES reimbursements for fire deployments and $150,000 to offset credit card fee surcharges. Because portions of this category are dependent on reimbursement timing and other one-time factors, revenues have been refined to reflect the revised FY26 Year End Estimates.

FY26 Year-end Estimate: $3,995,136
FY27 Proposed Budget: $4,982,900
FY27 Preliminary Budget: $4,177,800
Increase/Decrease to YE: +$182,664 or +4.6%
· Revenue from Other Agencies: FY27 revenue in this category is projected at approximately $1.5 million, a $111,000 (6.8%) decrease from the FY27 Proposed Budget presented at the March Budget Study Session. This category is primarily comprised of revenue received from other government agencies, as well as one-time grants from state funded programs. As is typical, revenue in this category may fluctuate throughout the year as additional grant programs are awarded and recognized and the FY27 Preliminary Budget has been updated to reflect the revised FY26 Year End Estimates.

FY26 Year-end Estimate: $1,816,924
FY27 Proposed Budget: $1,615,700
FY27 Preliminary Budget: $1,505,100
Increase/Decrease to YE: -$311,824 or -17.2%
· Transfers In: Transfers into the General Fund are projected to total $15.5 million in FY27, an decrease of $1.5 million over the FY27 Proposed Budget. This amount primarily reflects onetime transfers of available fund balances from the Emergency Medical Transport Fund ($3.5 million), Equipment Replacement Fund ($3 million), and Capital Improvement Program Fund ($9 million) to temporarily offset the projected General Fund operating deficit. These transfers are non-recurring in nature and provide temporary budget relief rather than a long-term structural solution. Based on revised projections, the FY27 Preliminary Budget includes these recommended transfers to address the anticipated budgetary deficit in FY27.

FY26 Year-end Estimate: $4,485,252
FY27 Proposed Budget: $17,000,000
FY27 Preliminary Budget: $15,500,000
Increase/Decrease to YE: +$11,014,748 or +245.6%
Provided in Table 2 is a summary of the major General Fund revenues by source type, comparing the changes from the FY26 year-end estimates, the FY27 Proposed Budget, and the FY27 Preliminary Budget:

Table 2: General Fund Revenues
Revenue Category FY26 YE
Estimate
FY27
Proposed
FY27
Preliminary
Variance
to Estimate
Variance to
Proposed
Property Tax $59,822,181 $61,239,700 $61,700,600 3.1% 0.8% Sales Tax 51,335,804 50,676,800 51,594,300 0.5% 1.8%
Internal Service10077495 4496300 4830500 521% 74%
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Revenue Category FY26 YE
Estimate
FY27
Proposed
FY27
Preliminary
Variance
to Estimate
Variance to
Proposed
Property Tax $59,822,181 $61,239,700 $61,700,600 3.1% 0.8% Sales Tax 51,335,804 50,676,800 51,594,300 0.5% 1.8%
Internal Service
Charges
10,077,495 4,496,300 4,830,500 -52.1% 7.4%
Fees for Services
7,647,596 6,944,100 7,953,100

4.0% 14.5%
Licenses and Permits
7,645,141 6,849,300 7,835,100

2.5% 14.4%
TOT
6,100,192 6,412,400 6,198,100

1.6% -3.3%
Miscellaneous
Revenue 3,995,136 4,982,900 4,177,800

4.6% -16.2%
Use of Property
3,922,905 4,169,800 3,929,100

0.2% -5.8%
Franchises
3,078,880 3,424,400 3,057,300
-0.7% -10.7%
Fines and Forfeitures
2,426,324 2,874,900 2,897,600

19.4% 0.8%
Revenue from other
Agencies 1,816,924 1,615,700 1,505,100
-17.2% -6.8%
Total Operating
Revenues 157,868,578 153,686,300 155,678,600
-1.4% 1.3%
Transfers-In
4,485,252 17,000,000 15,500,000
245.6% -8.8%
TOTAL REVENUES $162,353,830 $170,686,300 $171,178,600 5.4% 0.3% In summary, the General Fund operating revenue projections, excluding transfers, were increased by approximately $2.0 million, or 1.3%, from the FY27 Proposed Budget presented at the March 2026 Budget Study Session, bringing total operating revenues to approximately $155.7 million. These adjustments were made based on revised FY26 year-end revenue estimates and consideration of current economic trends affecting each major revenue category. Total FY27 General Fund revenues, including transfers, are projected at approximately $171.2 million.

FY27 General Fund Expenditures
The General Fund operating expenditures, including debt service, for FY27 Preliminary budget is $161.3 million, an increase of 0.11% or $171,800 from the FY27 Proposed Budget and -0.19% or almost $314,400 decrease from FY26 Year-End Estimates. The operating expenditure reflects the continued focus on maintaining service levels while holding costs steady.

Based on City Council direction, the FY27 budget was created through a zero-based budget process.

All departments provided documentation and descriptions of all non-personnel expenditure requests.

Budget meetings were held between the departments and City Manager and Director of Finance to discuss the requests and necessity of the expenditure.

Provided below are the budget assumptions impacting the FY27 Preliminary Budget General Fund City of Orange Page 6 of 14 Printed on 5/21/2026
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Item #: 10.1. 5/26/2026 File #: 26-0166
expenditures:
· Salaries & Benefits: The FY27 Preliminary Budget for salaries and benefits is $109.8 million, an increase of approximately $157,000 or 0.1% above the FY27 Proposed Budget presented at the March Budget Study Session. The increase reflects the revised staffing assumptions as well as the transfer of five firefighter positions previously charged to the EMT Fund (Fund 225) back to the General Fund. As presented during the FY27 Budget Study Session, the FY27 salaries and benefits budget includes annual step increases and a proposed 3% salary adjustment for all City employees, fully funds projected overtime costs based on recent historical trends, and incorporates approved position changes, including the elimination of

45.55 FTEs, maintaining 10 frozen positions, and adding 18.75 FTEs in FY27. Although the budget includes significant position reductions, salaries and benefits continue to increase year over year primarily due to negotiated compensation adjustments and the City’s transition to fully funding projected overtime costs rather than relying on vacancy savings.

FY26 Year-end Estimate: $103,947,889
FY27 Proposed Budget: $109,683,000
FY27 Preliminary Budget: $109,840,200
Increase/Decrease to YE: +$5,892,311 or +5.7%
· Professional/Other Services: The proposed FY27 budget for contractual services is approximately $7.5 million. This reflects a net decrease of approximately $514,000, or 6.4%, compared to the FY27 Proposed Budget. This expenditure category includes $125,000 to support enhancements within the City’s Economic Development Division, $250,000 for yearround aquatics services, $498,000 for the Old Towne paid parking program, and $100,000 for on-call building inspection services. These increases are partially offset by one-time expenditures included in FY26 for labor relations legal services and the IT Strategic Plan and also consider the revised FY26 Year End Estimates for on-call services.

FY26 Year-end Estimate: $10,083,247
FY27 Proposed Budget: $7,987,000
FY27 Preliminary Budget: $7,473,200
Increase/Decrease to YE: -$2,610,047 or -25.9%
· Materials and Supplies: The proposed FY27 budget for materials and supplies is almost $4.7 million and reflects a decrease of approximately $463,000 (8.9%) compared to the FY27 Proposed Budget presented at the March Budget Study Session. This decrease is primarily driven by further assessment of necessary operating needs.

FY26 Year-end Estimate: $4,702,718
FY27 Proposed Budget: $5,193,600
FY27 Preliminary Budget: $4,731,000
Increase/Decrease to YE: +$28,282 or +0.6%
· Miscellaneous Expenditures: The proposed FY27 budget for miscellaneous expenditures totaling just under $3.9 million reflects an increase of approximately $829,300 (27.1%) compared to the Proposed Budget presented at the March Budget Study Session. This expenditure category includes $800,000 to help offset the estimated costs for North SPA services
FY26 Year-end Estimate: $3,217,645
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FY27 Proposed Budget: $3,065,500
FY27 Preliminary Budget: $3,894,300
Increase/Decrease to YE: +$676,655 or +21.0%
· Internal Service Costs/Allocations: Internal service costs are projected to total approximately $3.7 million, relatively unchanged from the FY27 Proposed Budget presented at the March Budget Study Session. Figures have been refined using the Cost Allocation Plan model and FY26 Year End Estimates. The FY27 Budget reflects a revised methodology that excludes Internal Service Charges charged to and from the General Fund; as a result, both expenditure and revenue projections are lower compared to the FY26 Year-End Estimate FY26 Year-end Estimate: $8,866,258
FY27 Proposed Budget: $3,743,700
FY27 Preliminary Budget: $3,733,900
Increase/Decrease to YE: -$5,132,358 or -57.9%
· Transfers to Internal Service Funds : The FY27 Preliminary Budget includes a transfer of approximately $9.5 million to the Employee Accrued Liability Fund, remaining unchanged from the FY27 Proposed Budget presented at the March Budget Study Session.

FY26 Year-end Estimate: $1,455,252
FY27 Proposed Budget: $9,554,500
FY27 Preliminary Budget: $9,554,500
Increase/Decrease to YE: +$8,099,248 or +556.5%
Table 3: General Fund Expenditures
Expenditure
Category
FY26 YE
Estimate
FY27
Proposed
FY27
Preliminary
Variance
to
Estimate
Variance to
Proposed
Salaries and Benefits $103,947,889 $109,683,500 $109,840,200 5.7% 0.1% Repair/Maintenance
9,594,564 9,898,200 10,037,200

4.6% 1.4%
Professional/Other
Services 10,083,247 7,987,000
7,473,200-25.9% -6.4%
Internal Service
Charges 8,866,258 3,743,700
3,733,900-57.9% -0.3%
Materials and
Supplies 4,702,718 5,193,600
4,731,0000.6% -8.9%
Utility Charges
3,534,948 3,605,500
3,605,5002.0% 0.0%
Capital Outlay
146,212 44,500
74,500-49.0% 67.4%
Miscellaneous
3,217,645
3,065,000 3,894,300 21% 27.1%
Total Operating
Expenditures 144,093,480 143,221,000
143,389,800 -0.5% 0.1%
Debt Services
17,519,111 17,905,400
17,908,4002.2% 0.0%
Transfers Out
1,455,252 9,554,500
9,554,500556.6% 0.0%
TOTAL

EXPENDITURES
$163,067,843 $170,680,900 $170,852,700 4.8% 0.1% City of Orange Page 8 of 14 Printed on 5/21/2026 powered by Legistar™2165
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3,217,645
,,,,
Total Operating
Expenditures 144,093,480 143,221,000
143,389,800 -0.5% 0.1%
Debt Services
17,519,111 17,905,400
17,908,4002.2% 0.0%
Transfers Out
1,455,252 9,554,500
9,554,500556.6% 0.0%
TOTAL

EXPENDITURES
$163,067,843 $170,680,900 $170,852,700 4.8% 0.1%
In summary, the General Fund expenditure projections, including transfers, were adjusted upward by approximately $171,800, or 0.1%, from the FY27 Proposed Budget presented at the March 2026 Budget Study Session, bringing total operating expenditures to approximately $170.8 million. These adjustments reflect updated expenditure estimates and revised operational funding needs identified since the Budget Study Session. Total FY27 General Fund expenditures represent an increase of approximately $7.8 million, or 4.8%, over the prior fiscal year, mostly due to scheduled transfers towards employee accrued liability.

FY27 General Fund - Fund Balance
Based on the updated FY26 Year-End Estimates, the FY27 beginning fund balance is approximately $27.8 million, of which $1.9 million in undesignated fund balance. The FY27 Preliminary Budget is projected to have an operating deficit of $5.6 million. Considering the $9.5 million required transferout to the Employee Accrued Liability Fund, the General Fund has a projected deficit of over $15.0 million. Therefore, staff recommend a one-time use available fund balances from the Capital Improvement Project Fund, EMT Fund, and Equipment Replacement to close the gap for FY27.

The Fiscal Management Policies adopted by the City Council on August 12, 2025 recommend maintaining a catastrophic reserve of 20% of General Fund operating expenditures for FY27.

However, given the fiscal challenges, staff recommends maintaining the reserve at 18% for FY27, with the intent to revisit a phased return to 20% in future years as the City’s financial condition improves. After setting aside the catastrophic reserve, the General Fund is projected to end FY27 with an undesignated fund balance of just over $2.3 million.

The table below highlights the FY27 Preliminary General Fund budget, catastrophic reserve, and undesignated fund balance.

Table 4: Preliminary General Fund Balance
FY26 YE
Estimate
FY27 Proposed FY27
Preliminary
Variance
to
Estimate
Variance to
Proposed
Operating
Revenues
$157,868,578 $153,686,300 $155,678,600 -1% 1%
Total Revenues
157,868,578 153,686,300 155,678,600
-1% 1%
Operating
Expenditures 144,093,480 143,221,000 143,389,800
-1% 0%
Debt Service
17,519,111 17,905,400 17,908,400
2% 0%
Total
Expenditures 161,612,591 161,126,400 161,298,200
0% 0%
Operating
Surplus/Deficit
-3,744,013 -7,440,100 -5,619,600 50% -24%
Transfers-In
4,485,252 17,000,000 15,500,000
246% -9%
Transfers-Out
1,455,252 9,554,500 9,554,500
557% 0%
Net-714013-146% 8272%
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17,519,111 17,905,400 17,908,400
Total
Expenditures 161,612,591 161,126,400 161,298,200
0% 0%
Operating
Surplus/Deficit
-3,744,013 -7,440,100 -5,619,600 50% -24%
Transfers-In
4,485,252 17,000,000 15,500,000
246% -9%
Transfers-Out
1,455,252 9,554,500 9,554,500
557% 0%
Net
Surplus/Deficit
-714,013
5,400 325,900
-146% 8272%
Estimated
Beginning Fund
Balance - 7/1
28,553,772 26,490,989 27,839,759
-3% 5%
Estimated Ending
Fund Balance -
6/30
27,839,759 26,496,389 28,165,659
1% 7%
Catastrophic
Reserve
25,936,826
25,779,780 25,810,164
0% 0%
Undesignated
Ending Fund
Balance - 6/30
$1,902,932 $716,609 $2,355,495 24% 249%
FY27 Preliminary Budget for Other Funds
Special Revenue Funds (200 - 400 Series):

Special Revenue Funds are used to account for revenues that are legally restricted or committed to expenditures for specific purposes. These funds support a variety of City programs and services that are financed through dedicated revenue sources such as grants, state and federal funding, development-related fees, public safety revenues, and other restricted resources. Unlike the General Fund, Special Revenue Funds may only be used for their designated purposes and are subject to specific legal, regulatory, or policy requirements governing their use. The City’s Special Revenue Funds support programs including transportation improvements, public safety initiatives, community development activities, housing programs, and other operational and capital needs. As external funding sources and economic conditions fluctuate, the City continues to closely monitor revenues and expenditures within these funds to ensure ongoing compliance, maintain service levels, and support long-term program sustainability.

Table 5: Preliminary Fund Balance - Special Revenue Funds EMT Program
(225)
Measure M2
(263)
Other
Transportation
Funds
(270-274)
Citywide
TSIP (287)
Proposed Revenues $5,353,600 $4,335,500 $7,474,000 $304,000 Proposed Transfers-In
- -
-
-
Total Proposed Revenues
5,353,600 4,335,500
7,474,000
304,000
Proposed Expenditures
5,575,900 4,205,600
7,801,300
1,695,900
Proposed Transfers-Out
3,500,000 -
-
-
Total Proposed
Expenditures 9,075,900 4,205,600
7,801,300
1,695,900
Proposed Surplus/Deficit -3,722,300
129,900
-327,300 -1,391,900
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Total Proposed Revenues
5,353,600 4,335,500
7,474,000
304,000
Proposed Expenditures
5,575,900 4,205,600
7,801,300
1,695,900
Proposed Transfers-Out
3,500,000 -
-
-
Total Proposed
Expenditures 9,075,900 4,205,600
7,801,300
1,695,900
Proposed Surplus/Deficit -3,722,300
129,900
-327,300 -1,391,900
Estimated Beginning Fund
Balance - 7/1/26 4,176,378 6,919,471
6,764,540
3,662,662
Proposed Ending Fund
Balance - 6/30/27
$454,078 $7,049,371 $6,437,240 $2,270,762
Capital Improvement Funds (500 Series):

Based on and subsequent analysis of the City’s capital needs, the following adjustments were made to the Capital Improvement Program (attached):
· Anticipated completion of the Yorba Dog Park Renovation (257014) in FY26 · Use of $2.3 million in anticipated FY26 unspent funds in FY27 for the following continuing projects in FY27:
o El Modena Area Renovation (257018)
o Parks Master Plan (267003)
o Hart Park Bandshell Roof Renovation (267004)
o Rampart St Park (267005)
Considering these changes, the FY27 Capital Improvement Program totals just over $33.2 million, across 17 different funding sources, reflecting a $2.4 decrease from the FY27 Proposed CIP budget presented at the April budget study session (attached). The following table reflects fund balances for major capital funds.

Table 6: Preliminary Fund Balance - Capital Improvement Funds Capital
Project Fund
(500)
Park Funds
(510-12)
Fire
Facilities
Fund (560)
Police
Facilities
Fund (570)
Library
Facilities
Fund (580)
Proposed Revenues $3,585,000 $383,100 $22,800 $21,500 $17,800 Proposed Transfers-In
- - - - -
Total Proposed Revenues
3,585,000 383,100 22,800 21,500 17,800
Proposed Expenditures
5,140,400 2,870,000 600,000 615,000 326,900
Proposed Transfers-Out
9,000,000 - - - -
Total Proposed
Expenditures 14,140,400 2,870,000 600,000 615,000 326,900 Proposed Surplus/Deficit -10,555,400 -2,486,900 -577,200 -593,500 -309,100 Estimated Beginning Fund
Balance - 7/1/26 12,013,635 8,462,380 703,983 724,052 468,497 Proposed Ending Fund
Balance - 6/30/27
$1,458,235 $5,975,480 $126,783 $130,552 $159,397
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5,140,400 2,870,000 600,000 615,000 326,900
Proposed Transfers-Out
9,000,000 - - - -
Total Proposed
Expenditures 14,140,400 2,870,000 600,000 615,000 326,900 Proposed Surplus/Deficit -10,555,400 -2,486,900 -577,200 -593,500 -309,100 Estimated Beginning Fund
Balance - 7/1/26 12,013,635 8,462,380 703,983 724,052 468,497 Proposed Ending Fund
Balance - 6/30/27
$1,458,235 $5,975,480 $126,783 $130,552 $159,397
Enterprise Funds (600 Series):

Enterprise Funds are used to account for services provided to the public on a fee-for-service basis, where the costs of operations, capital improvements, and debt obligations are primarily recovered through user charges. The City’s Water and Sewer Enterprise Funds support the operation, maintenance, and long-term sustainability of critical utility infrastructure, including water production, distribution, and wastewater collection systems.

In FY27, the City is proposing approximately $6.5 million in water infrastructure improvements to support system reliability, increase groundwater production capacity, and replace aging infrastructure throughout the water system. Additionally, approximately $3.5 million is proposed for sewer system improvements to continue the replacement and rehabilitation of aging sewer pipelines and related infrastructure throughout the City. These investments are intended to address aging infrastructure, reduce ongoing maintenance demands, improve operational efficiency, and ensure the City can continue to meet service and regulatory requirements while maintaining reliable utility services for residents and businesses.

The table below provides a high level overview of the City’s Enterprise funds, reflecting projected revenues, expenditures for operating and capital expenses, and fund balances.

Table 7: Preliminary Fund Balance - Enterprise Funds
Water (600) Sewer (601)
Proposed Revenues $45,584,600 $9,486,700
Proposed Transfers-In
-
-
Total Proposed Revenues
45,584,600
9,754,700
Proposed Expenditures
49,920,000
9,248,600
Proposed Transfers-Out
-
-
Total Proposed Expenditures
49,920,000
9,248,600
Proposed Surplus/Deficit -4,335,400 238,100
Estimated Beginning Fund Balance - 7/1/26
6,057,236
4,917,562
Proposed Ending Fund Balance - 6/30/27 $1,721,836 $5,155,662 Internal Service Funds (700 Series):

Internal Service Funds are used to account for the financing of goods and services provided by one department or agency to other departments or agencies on a cost reimbursement basis. Allocations City of Orange Page 12 of 14 Printed on 5/21/2026
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department or agency to other departments or agencies on a cost reimbursement basis. Allocations to the City’s Internal Service Funds (ISFs), from the General Fund and other operating funds, including Enterprise Funds and eligible Special Revenue Funds, support operating costs related to accrued liability, workers compensation, and general liability insurance.

Historically, these ISFs were intentionally underfunded to minimize impacts to the General Fund, with the expectation that any year-end surpluses would be used to supplement shortfalls through transfers. However, as the City has continued to face budgetary constraints, fewer surplus funds have been available, resulting in continued underfunding of these ISFs and the deferral of necessary capital replacements and other long-term obligations.

It should also be noted that the ISFs for the City’s Information Technology and Fleet divisions were consolidated into the General Fund in FY25. As a result, the associated operational costs associated with those services continue to be reflected comprehensively within the General Fund.

Table 8: Preliminary Fund Balance - Internal Service Funds Equipment
Replacement
(720)
Worker's
Comp (730)
General
Liability (731)
Accrued
Liability (760)
IT Capital (790)
Proposed Revenues $244,200 $6,239,400 $4,887,600 $3,613,000 $446,800 Proposed Transfers-In
- - - 9,554,500
-
Total Proposed
Revenues 244,200 6,239,400 4,887,600 13,167,500
446,800
Proposed Expenditures
2,795,000 5,344,700 6,144,400 10,618,200
1,016,000
Proposed TransfersOut - - - - 3,000,000
Total Proposed
Expenditures 2,795,000 5,344,700 6,144,400 10,618,200
4,016,000
Proposed Surplus/Deficit -2,550,800 894,700 -1,256,800
2,549,300
-$3,569,200
Estimated Beginning Fund
Balance - 7/1/26 3,052,486
-12,755,459 -12,302 -5,606,386 7,181,367
Proposed Ending Fund
Balance - 6/30/27
$501,686 -$11,860,759 -$1,269,102 -$3,057,086 $3,612,167 Unfunded Requests and Future Considerations
Due to limited ongoing revenues, several priority needs were not included in the FY27 Preliminary Budget and remain subject to future Council consideration if additional recurring resources become available, with priority given to those that support public safety, regulatory compliance, and core service delivery. The following items are identified:

Operating Budget
· Restore negative fund balance in the ISFs.
· Restore public safety positions.

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· Address deferred maintenance.
· Expansion of Fire Prevention staffing model to address increased inspection, plan review, and compliance workload.
· Restore community programs and events.
· Implementation of a body-worn camera program for the Code Enforcement Division to enhance transparency, accountability, and staff safety. · Restoration of the Historic Preservation Planner position to support planning, development review, and preservation efforts.
· Additional administrative support within the City Manager’s Office, City Clerk’s Office, and Finance Department to address increasing operational demands and workload.

Deferred Capital Projects
· Facilities Condition Assessment
· City Hall Roof Replacement
· Fire Station 7 - Roof Replacement
· Fire Station 8 - Exterior Paint and Roof Replacement
· Main Library Gutter Replacement
· Community Services Building Roof Replacement
· City Hall Landscape Renovation
· City Hall - Elastomeric Coating Renewal
Conclusion
The FY27 Preliminary Budget reflects the City’s continuing fiscal challenges while balancing public safety and a standard level of service and operations for the citizens and businesses of Orange. The Preliminary Budget includes $23.0 million in budget reductions in the General Fund and the financial forecast is projecting a greater need for reduction over the next five years. Tonight, staff is seeking the City Council’s affirmation of the FY27 Preliminary Budget for all funds and return in June for the FY27 Budget Adoption.

1. SUBJECT
Fiscal Year 2026-2027 City of Orange Preliminary Budget and Five-Year Capital Improvement Program

3. RECOMMENDED ACTION

2. Direct staff to return in June, for the Fiscal Year 2026-2027 budget adoption.

The total General Fund revenues are $171.2 million, and expenditures are $170.8 million, including transfers.

5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability.

6. DISCUSSION AND BACKGROUND
Background:

The City’s budget is a financial plan based on anticipated revenues and expenditures in a fiscal year City of Orange Page 1 of 14 Printed on 5/21/2026
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The City’s budget is a financial plan based on anticipated revenues and expenditures in a fiscal year starting July 1st through June 30th. Each year, the City’s budget is prepared, prioritizing public safety and infrastructure projects, City Council Goals, and providing the highest possible level of service to the community. The Fiscal Year 2026-2027 (FY27) budget development has been presented and reviewed over the course of two City Council budget study sessions, taking place in March and April 2026.

Discussion:

Table 1: FY26 Year-End Estimated Fund Balance
FY26 YE Estimate
@ Mid-Year
FY26 YE Estimate
@ Q3
Variance
Operating Revenues $153,826,935 $157,868,578 $4,041,643 Total Revenues 153,826,935 157,868,578 4,041,643
Operating Expenditures 141403713 144093480 2689767
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FY26 YE Estimate
@ Mid-Year
FY26 YE Estimate
@ Q3
Variance
Operating Revenues $153,826,935 $157,868,578 $4,041,643 Total Revenues 153,826,935 157,868,578 4,041,643
Operating Expenditures 141,403,713 144,093,480 2,689,767 Debt Service 17,515,954 17,519,111 3,157
Total Expenditures 158,919,667 161,612,591 2,692,924
Operating Surplus/Deficit -5,092,732 -3,744,013 1,348,719 Transfers-In 4,485,252 4,485,252 -
Transfers-Out 1,455,252 1,455,252 -
Net Surplus/Deficit -2,062,732 -714,013 1,348,719
Estimated Beginning Fund Balance -
7/1/2025
28,553,772 28,553,772 -
Estimated Ending Fund Balance -
6/30/2026
26,491,040 27,839,759 1,348,719
Catastrophic Reserve 25,452,668 25,936,826 484,158
Undesignated Ending Fund Balance
- 6/30/2026
$1,038,371 $1,902,932 $864,561
Fiscal Year 2026-27 (FY27) Preliminary General Fund Revenue The FY27 General Fund operating revenues, including transfers, is projected to be almost $171.2 million, an increase of $492,000 or 0.3% from the proposed budget and an increase of $8.8 million or

5.4% from the FY26 year-end estimates, including transfers.

According to statewide reports from the City’s sales tax consultant, while inflation has moderated and interest rates have declined, statewide economic indicators suggest City of Orange Page 3 of 14 Printed on 5/21/2026
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moderated and interest rates have declined, statewide economic indicators suggest consumers still remain cautious. As a result, taxable sales growth is expected to remain modest in all other categories, with consumer spending largely focused on essential goods and value-oriented purchases. Although fuel prices have continued to trend upward due to external and foreign market factors, the FY27 projections assume moderate additional growth in sales tax revenues due to thresholds within the City’s current sales tax agreements and the potential volatility of this sector.

FY26 Year-end Estimate: $10,077,495
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FY27 Proposed Budget: $4,496,300
FY27 Preliminary Budget: $4,830,500
Increase/Decrease to YE: -$5,246,995 or -52.1%
· Miscellaneous/Other Revenue : Miscellaneous/other revenue is projected at $4.2 million in FY27, a decrease of approximately $805,000 (16.2%) compared to the FY27 Proposed Budget presented at the March budget study session. This category includes one-time reimbursements, donations, and other miscellaneous revenues, including approximately $1.0 million in Cal OES reimbursements for fire deployments and $150,000 to offset credit card fee surcharges. Because portions of this category are dependent on reimbursement timing and other one-time factors, revenues have been refined to reflect the revised FY26 Year End Estimates.

Table 2: General Fund Revenues
Revenue Category FY26 YE
Estimate
FY27
Proposed
FY27
Preliminary
Variance
to Estimate
Variance to
Proposed
Property Tax $59,822,181 $61,239,700 $61,700,600 3.1% 0.8% Sales Tax 51,335,804 50,676,800 51,594,300 0.5% 1.8%
Internal Service10077495 4496300 4830500 521% 74%
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Revenue Category FY26 YE
Estimate
FY27
Proposed
FY27
Preliminary
Variance
to Estimate
Variance to
Proposed
Property Tax $59,822,181 $61,239,700 $61,700,600 3.1% 0.8% Sales Tax 51,335,804 50,676,800 51,594,300 0.5% 1.8%
Internal Service
Charges
10,077,495 4,496,300 4,830,500 -52.1% 7.4%
Fees for Services
7,647,596 6,944,100 7,953,100

4.0% 14.5%
Licenses and Permits
7,645,141 6,849,300 7,835,100

2.5% 14.4%
TOT
6,100,192 6,412,400 6,198,100

1.6% -3.3%
Miscellaneous
Revenue 3,995,136 4,982,900 4,177,800

4.6% -16.2%
Use of Property
3,922,905 4,169,800 3,929,100

0.2% -5.8%
Franchises
3,078,880 3,424,400 3,057,300
-0.7% -10.7%
Fines and Forfeitures
2,426,324 2,874,900 2,897,600

Based on City Council direction, the FY27 budget was created through a zero-based budget process.

All departments provided documentation and descriptions of all non-personnel expenditure requests.

Budget meetings were held between the departments and City Manager and Director of Finance to discuss the requests and necessity of the expenditure.

Provided below are the budget assumptions impacting the FY27 Preliminary Budget General Fund City of Orange Page 6 of 14 Printed on 5/21/2026
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expenditures:
· Salaries & Benefits: The FY27 Preliminary Budget for salaries and benefits is $109.8 million, an increase of approximately $157,000 or 0.1% above the FY27 Proposed Budget presented at the March Budget Study Session. The increase reflects the revised staffing assumptions as well as the transfer of five firefighter positions previously charged to the EMT Fund (Fund 225) back to the General Fund. As presented during the FY27 Budget Study Session, the FY27 salaries and benefits budget includes annual step increases and a proposed 3% salary adjustment for all City employees, fully funds projected overtime costs based on recent historical trends, and incorporates approved position changes, including the elimination of

FY26 Year-end Estimate: $4,702,718
FY27 Proposed Budget: $5,193,600
FY27 Preliminary Budget: $4,731,000
Increase/Decrease to YE: +$28,282 or +0.6%
· Miscellaneous Expenditures: The proposed FY27 budget for miscellaneous expenditures totaling just under $3.9 million reflects an increase of approximately $829,300 (27.1%) compared to the Proposed Budget presented at the March Budget Study Session. This expenditure category includes $800,000 to help offset the estimated costs for North SPA services
FY26 Year-end Estimate: $3,217,645
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FY27 Proposed Budget: $3,065,500
FY27 Preliminary Budget: $3,894,300
Increase/Decrease to YE: +$676,655 or +21.0%
· Internal Service Costs/Allocations: Internal service costs are projected to total approximately $3.7 million, relatively unchanged from the FY27 Proposed Budget presented at the March Budget Study Session. Figures have been refined using the Cost Allocation Plan model and FY26 Year End Estimates. The FY27 Budget reflects a revised methodology that excludes Internal Service Charges charged to and from the General Fund; as a result, both expenditure and revenue projections are lower compared to the FY26 Year-End Estimate FY26 Year-end Estimate: $8,866,258
FY27 Proposed Budget: $3,743,700
FY27 Preliminary Budget: $3,733,900
Increase/Decrease to YE: -$5,132,358 or -57.9%
· Transfers to Internal Service Funds : The FY27 Preliminary Budget includes a transfer of approximately $9.5 million to the Employee Accrued Liability Fund, remaining unchanged from the FY27 Proposed Budget presented at the March Budget Study Session.

EXPENDITURES
$163,067,843 $170,680,900 $170,852,700 4.8% 0.1% City of Orange Page 8 of 14 Printed on 5/21/2026 powered by Legistar™2179
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3,217,645
,,,,
Total Operating
Expenditures 144,093,480 143,221,000
143,389,800 -0.5% 0.1%
Debt Services
17,519,111 17,905,400
17,908,4002.2% 0.0%
Transfers Out
1,455,252 9,554,500
9,554,500556.6% 0.0%
TOTAL

The Fiscal Management Policies adopted by the City Council on August 12, 2025 recommend maintaining a catastrophic reserve of 20% of General Fund operating expenditures for FY27.

The table below highlights the FY27 Preliminary General Fund budget, catastrophic reserve, and undesignated fund balance.

Table 4: Preliminary General Fund Balance
FY26 YE
Estimate
FY27 Proposed FY27
Preliminary
Variance
to
Estimate
Variance to
Proposed
Operating
Revenues
$157,868,578 $153,686,300 $155,678,600 -1% 1%
Total Revenues
157,868,578 153,686,300 155,678,600
-1% 1%
Operating
Expenditures 144,093,480 143,221,000 143,389,800
-1% 0%
Debt Service
17,519,111 17,905,400 17,908,400
2% 0%
Total
Expenditures 161,612,591 161,126,400 161,298,200
0% 0%
Operating
Surplus/Deficit
-3,744,013 -7,440,100 -5,619,600 50% -24%
Transfers-In
4,485,252 17,000,000 15,500,000
246% -9%
Transfers-Out
1,455,252 9,554,500 9,554,500
557% 0%
Net-714013-146% 8272%
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17,519,111 17,905,400 17,908,400
Total
Expenditures 161,612,591 161,126,400 161,298,200
0% 0%
Operating
Surplus/Deficit
-3,744,013 -7,440,100 -5,619,600 50% -24%
Transfers-In
4,485,252 17,000,000 15,500,000
246% -9%
Transfers-Out
1,455,252 9,554,500 9,554,500
557% 0%
Net
Surplus/Deficit
-714,013
5,400 325,900
-146% 8272%
Estimated
Beginning Fund
Balance - 7/1
28,553,772 26,490,989 27,839,759
-3% 5%
Estimated Ending
Fund Balance -
6/30
27,839,759 26,496,389 28,165,659
1% 7%
Catastrophic
Reserve
25,936,826
25,779,780 25,810,164
0% 0%
Undesignated
Ending Fund
Balance - 6/30
$1,902,932 $716,609 $2,355,495 24% 249%
FY27 Preliminary Budget for Other Funds
Special Revenue Funds (200 - 400 Series):

Table 5: Preliminary Fund Balance - Special Revenue Funds EMT Program
(225)
Measure M2
(263)
Other
Transportation
Funds
(270-274)
Citywide
TSIP (287)
Proposed Revenues $5,353,600 $4,335,500 $7,474,000 $304,000 Proposed Transfers-In
- -
-
-
Total Proposed Revenues
5,353,600 4,335,500
7,474,000
304,000
Proposed Expenditures
5,575,900 4,205,600
7,801,300
1,695,900
Proposed Transfers-Out
3,500,000 -
-
-
Total Proposed
Expenditures 9,075,900 4,205,600
7,801,300
1,695,900
Proposed Surplus/Deficit -3,722,300
129,900
-327,300 -1,391,900
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Total Proposed Revenues
5,353,600 4,335,500
7,474,000
304,000
Proposed Expenditures
5,575,900 4,205,600
7,801,300
1,695,900
Proposed Transfers-Out
3,500,000 -
-
-
Total Proposed
Expenditures 9,075,900 4,205,600
7,801,300
1,695,900
Proposed Surplus/Deficit -3,722,300
129,900
-327,300 -1,391,900
Estimated Beginning Fund
Balance - 7/1/26 4,176,378 6,919,471
6,764,540
3,662,662
Proposed Ending Fund
Balance - 6/30/27
$454,078 $7,049,371 $6,437,240 $2,270,762
Capital Improvement Funds (500 Series):

Table 6: Preliminary Fund Balance - Capital Improvement Funds Capital
Project Fund
(500)
Park Funds
(510-12)
Fire
Facilities
Fund (560)
Police
Facilities
Fund (570)
Library
Facilities
Fund (580)
Proposed Revenues $3,585,000 $383,100 $22,800 $21,500 $17,800 Proposed Transfers-In
- - - - -
Total Proposed Revenues
3,585,000 383,100 22,800 21,500 17,800
Proposed Expenditures
5,140,400 2,870,000 600,000 615,000 326,900
Proposed Transfers-Out
9,000,000 - - - -
Total Proposed
Expenditures 14,140,400 2,870,000 600,000 615,000 326,900 Proposed Surplus/Deficit -10,555,400 -2,486,900 -577,200 -593,500 -309,100 Estimated Beginning Fund
Balance - 7/1/26 12,013,635 8,462,380 703,983 724,052 468,497 Proposed Ending Fund
Balance - 6/30/27
$1,458,235 $5,975,480 $126,783 $130,552 $159,397
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5,140,400 2,870,000 600,000 615,000 326,900
Proposed Transfers-Out
9,000,000 - - - -
Total Proposed
Expenditures 14,140,400 2,870,000 600,000 615,000 326,900 Proposed Surplus/Deficit -10,555,400 -2,486,900 -577,200 -593,500 -309,100 Estimated Beginning Fund
Balance - 7/1/26 12,013,635 8,462,380 703,983 724,052 468,497 Proposed Ending Fund
Balance - 6/30/27
$1,458,235 $5,975,480 $126,783 $130,552 $159,397
Enterprise Funds (600 Series):

The table below provides a high level overview of the City’s Enterprise funds, reflecting projected revenues, expenditures for operating and capital expenses, and fund balances.

Internal Service Funds are used to account for the financing of goods and services provided by one department or agency to other departments or agencies on a cost reimbursement basis. Allocations City of Orange Page 12 of 14 Printed on 5/21/2026
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Item #: 10.1. 5/26/2026 File #: 26-0166
department or agency to other departments or agencies on a cost reimbursement basis. Allocations to the City’s Internal Service Funds (ISFs), from the General Fund and other operating funds, including Enterprise Funds and eligible Special Revenue Funds, support operating costs related to accrued liability, workers compensation, and general liability insurance.

Operating Budget
· Restore negative fund balance in the ISFs.
· Restore public safety positions.

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Item #: 10.1. 5/26/2026 File #: 26-0166
· Address deferred maintenance.
· Expansion of Fire Prevention staffing model to address increased inspection, plan review, and compliance workload.
· Restore community programs and events.
· Implementation of a body-worn camera program for the Code Enforcement Division to enhance transparency, accountability, and staff safety. · Restoration of the Historic Preservation Planner position to support planning, development review, and preservation efforts.
· Additional administrative support within the City Manager’s Office, City Clerk’s Office, and Finance Department to address increasing operational demands and workload.

7. ATTACHMENTS
· Attachment 1 Schedule of Changes in Fund Balance
· Attachment 2 Schedule of Revenues and Expenditures
· Attachment 3 Recommended Staffing Changes
· Attachment 4 Schedule of Positions by Department
· Attachment 5 FY27 Budget Reductions and Balancing Measures · Attachment 6 Five-Year Capital Improvement Plan
· Attachment 7 Fund Description
· Attachment 8 March 24, 2026 Budget Study Session Staff Report · Attachment 9 April 14, 2026 Budget Study Session Staff Report City of Orange Page 14 of 14 Printed on 5/21/2026
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Estimated Projected
Fund No Fund Balance Total Total Fund Balance
General Funds Funds 7/1/2026 Revenues Transfers In Revenue Expenditures Transfers Out Expenditure 6/30/2027 100 General Fund 27,839,759 155,678,600 15,500,000 171,178,600 161,298,200 9,554,500 170,852,700 28,165,659 105 Reimbursable 1,026,414 - - - - - - 1,026,414
Total General Funds 28,866,173 155,678,600 15,500,000 171,178,600 161,298,200 9,554,500 170,852,700 29,192,073 Special
Revenue Funds
200 PEG Program 169,501 323,500 - 323,500 254,800 - 254,800 238,201 201 CASP 507,672 80,000 - 80,000 - - - 587,672
210 Building Records & Planning Doc. 1,646,587 494,000 - 494,000 1,028,900 - 1,028,900 1,111,687 225 EMT Program 4,176,378 5,353,600 - 5,353,600 5,575,900 3,500,000 9,075,900 454,078 226 Opioid Settlement 163,609 46,200 - 46,200 - - - 209,809 231 Affordable Housing 4,936,522 99,500 - 99,500 - - - 5,036,022 232 Low/Moderate Income Hsng Asset 28,124,555 475,900 - 475,900 404,400 - 404,400 28,196,055 245 Air Pollution Reduction (AQMD) 371,485 177,400 - 177,400 68,900 - 68,900 479,985 250 O.C.P.T. 245,132 27,200 - 27,200 12,200 - 12,200 260,132 263 Measure M2 6,919,471 4,335,500 - 4,335,500 4,205,600 - 4,205,600 7,049,371 270 Special Gas Tax Maint 1,663,301 3,818,800 - 3,818,800 4,301,300 - 4,301,300 1,180,801 274 RMRA 5,101,239 3,655,200 - 3,655,200 3,500,000 - 3,500,000 5,256,439 287 Citywide TSIP 3,662,662 304,000 - 304,000 1,695,900 - 1,695,900 2,270,762 291 Santiago LMD 1,201,416 992,100 - 992,100 958,300 - 958,300 1,235,216 293 Sycamore Cross LMD 139,079 51,000 - 51,000 36,300 - 36,300 153,779 294 Del Rio LMD 350,929 96,700 - 96,700 84,700 - 84,700 362,929 310 CDBG 594,752 1,164,200 - 1,164,200 1,067,500 - 1,067,500 691,452 316 Federal Rental Rehab 173,210 5,900 - 5,900 - - - 179,110 317 HOME Grant 7,061,604 962,400 - 962,400 1,137,500 - 1,137,500 6,886,504 353 Federal Police Grants (9,575) - 12,300 12,300 1,300 - 1,300 1,425 355 Asset Seizure-Federal 1,736,993 256,200 - 256,200 294,800 - 294,800 1,698,393 358 Asset Seizure-RNSP Federal 258,130 117,600 - 117,600 - - - 375,730 359 Asset Seizure-RNSP Treasury 5,872 1,400 - 1,400 200 - 200 7,072 360 Asset Seizure-Treasury 1,114,848 354,200 - 354,200 77,600 - 77,600 1,391,448 399 Other Federal Grants (4,368) - - - - - - (4,368)
400 Proposition 172 1,688,684 1,345,600 - 1,345,600 1,162,600 - 1,162,600 1,871,684 412 SB2 Building Home & Jobs Act (3,085,946) - 1,446,200 1,446,200 5,800 - 5,800 (1,645,546) 420 CA Parklands 146,787 5,000 - 5,000 - - - 151,787
450 Traffic Safety Grant 1,034,962 188,200 - 188,200 82,400 - 82,400 1,140,762 454 AB3229-COPS/State 1,057,458 457,400 - 457,400 497,800 - 497,800 1,017,058 456 Asset Seizure-State 85% 177,610 17,600 - 17,600 20,600 - 20,600 174,610 457 Asset Seizure-State 15% 246,021 8,400 - 8,400 200 - 200 254,221 Total Special Revenue Funds 71,576,579 26,673,200 - 26,673,200 26,475,500 3,500,000 29,975,500 68,274,279 Capital Project
Funds
500 Capital Projects 12,013,635 3,585,000 - 3,585,000 5,140,400 9,000,000 14,140,400 1,458,235 510 Park Acquisition 7,651,835 220,100 - 220,100 2,370,000 - 2,370,000 5,501,935 511 Park Acq (Quimby) 49,710 18,700 - 18,700 - - - 68,410 512 El Modena Park Facilities 760,835 144,300 - 144,300 500,000 - 500,000 405,135 540 Old Town Parking 14,667 5,200 - 5,200 15,500 - 15,500 4,367 550 Reimbursable Capital (5,393,860) - 5,300,000 5,300,000 7,850,000 - 7,850,000 (7,943,860) 551 County Park Grants 2,730 - - - - - - 2,730
555 Parking In Lieu 48,245 2,400 - 2,400 - - - 50,645
560 Fire Facilities Fees 703,983 22,800 - 22,800 600,000 - 600,000 126,783 570 Police Facilities Fees 724,052 21,500 - 21,500 615,000 - 615,000 130,552 580 Library Facilities Fees 468,497 17,900 - 17,900 326,900 - 326,900 159,497 877 Serrano 91-2 1,948,768 2,177,200 - 2,177,200 8,500 - 8,500 4,117,468 878 Del Rio CFD #06-1 3,535,344 1,642,200 - 1,642,200 10,500 - 10,500 5,167,044 902 Capital Bond Proceeds 1,630,568 1,801,100 - 1,801,100 1,973,200 - 1,973,200 1,458,468 950 City Trf: Tustin Project Taxable 1,173,473 33,100 - 33,100 - - - 1,206,573 Total Capital Project Funds 25,332,483 14,991,500 - 14,991,500 19,410,000 9,000,000 28,410,000 11,913,983 TOTAL GOVERNMENTAL FUNDS 125,775,234 197,343,300 15,500,000 212,843,300 207,183,700 22,054,500 229,238,200 109,380,334 Internal Service
Funds
720 Equipment Replacement 3,052,486 244,200 - 244,200 2,795,000 - 2,795,000 501,686 730 Worker's Compensation (12,755,459) - 6,239,400 6,239,400 5,344,700 - 5,344,700 (11,860,759) 731 Liability (12,302) - 4,887,600 4,887,600 6,144,400 - 6,144,400 (1,269,102) 760 Emp Accrued Liability (5,606,386) 9,554,500 3,613,000 13,167,500 10,618,200 - 10,618,200 (3,057,086) 790 Computer Replacement 7,181,367 446,800 - 446,800 1,016,000 3,000,000 4,016,000 3,612,167 Total Internal Service Funds (8,140,294) 9,554,500 15,431,000 24,985,500 25,918,300 3,000,000 28,918,300 (12,073,094) Enterprise
Funds
600 Water Fund 6,057,236 45,584,600 - 45,584,600 49,920,000 - 49,920,000 1,721,836 601 Sanitation (Sewer) Fund 4,917,562 9,486,700 - 9,486,700 9,248,600 - 9,248,600 5,155,662 Total Enterprise Funds 10,974,798 55,071,300 - 55,071,300 59,168,600 - 59,168,600 6,877,498 TOTAL OF ALL CITY'S FUNDS 128,609,738 267,845,600 25,054,500 292,900,100 292,270,600 25,054,500 317,325,100 104,184,738 City of Orange
Fiscal Year 2026-2027
Schedule of Changes in Fund Balance
Attachment 1
2186
FY 27 Budget
Actual Actual Estimate Budget
2023-24 2024-25 2025-26 2026-27

REVENUES
General Fund 154,684,366 158,388,022 162,353,829 171,178,600 Reimbursable Fund - 2,814,190 2,979,885 -
Special Revenue 28,471,382 24,455,162 27,661,032 26,673,200 Capital Projects 19,515,841 15,721,660 14,753,861 14,991,500 Internal Service 12,984,456 17,697,416 16,690,095 24,985,500 Enterprise 55,840,641 63,144,043 56,046,450 55,071,300
Total Revenues 271,496,686 282,220,494 280,485,152 292,900,100

EXPENDITURES
General Fund 151,795,316 161,121,280 165,065,616 170,852,700 Reimbursable Fund - 1,713,477 1,997,773 -
Special Revenue 6,743,024 20,002,430 32,773,993 29,975,500 Capital Projects 23,559,416 14,654,042 21,842,711 28,410,000 Internal Service 13,919,190 25,884,001 34,064,844 28,918,300 Enterprise 47,300,113 63,374,964 73,211,778 59,168,600
Total Expenditures 243,317,059 286,750,195 328,956,715 317,325,100 City of Orange
Fiscal Year 2026-2027
Schedule of Revenues and Expenditures
Attachment 2
2187
FY 27 Budget
Actual Actual Estimate Budget
2023-24 2024-25 2025-26 2026-27

GENERAL FUND
100 General Fund 154,684,366 158,388,022 162,353,829 171,178,600 105 Reimbursable - 2,814,190 2,979,885 -
Total General Funds 154,684,366 161,202,212 165,333,715 171,178,600

SPECIAL REVENUE FUNDS
200 PEG Program 236,891 208,802 323,526 323,500
201 CASP 79,084 83,168 85,014 80,000
210 Building Records and Planning Doc. 341,576 396,085 494,831 494,000 225 EMT Program 4,616,185 4,659,493 4,846,695 5,353,600 226 Opioid Settlement (613) 107,552 78,055 46,200
231 Affordable Housing 97,622 16,073 124,270 99,500
232 Low/Moderate Income Hsng Asset 242,754 111,474 383,349 475,900 245 Air Pollution Reduction (AQMD) 194,865 199,427 177,397 177,400 250 O.C.P.T. 26,653 30,659 38,502 27,200
263 Measure M2 3,834,279 5,026,009 4,336,538 4,335,500
270 Special Gas Tax Maint 3,869,702 4,024,837 3,840,277 3,818,800 274 RMRA 3,782,330 4,024,497 3,655,650 3,655,200
287 Citywide TSIP 2,075,725 374,503 304,680 304,000
291 Santiago LMD 1,006,270 1,019,858 948,828 992,100
293 Sycamore Cross LMD 53,530 54,590 51,255 51,000
294 Del Rio LMD 103,275 97,521 103,396 96,700
310 CDBG 1,476,582 975,225 1,164,239 1,164,200
316 Federal Rental Rehab 7,305 8,446 5,968 5,900
317 HOME Grant 976,957 872,374 1,806,913 962,400
353 Federal Police Grants 11,963 12,884 12,336 12,300
355 Asset Seizure-Federal 237,741 140,278 256,236 256,200 358 Asset Seizure-RNSP Federal 76,948 28,424 177,958 117,600 359 Asset Seizure-RNSP Treasury 149 190 1,441 1,400
360 Asset Seizure-Treasury 28,224 52,630 354,207 354,200 399 Other Federal Grants - - - -
400 Proposition 172 1,311,707 1,395,059 1,410,356 1,345,600 412 SB2 Building Home & Jobs Act 3,100,246 (166,156) 1,906,330 1,446,200 420 CA Parklands 6,191 7,158 5,058 5,000
450 Traffic Safety Grant 189,634 206,081 188,359 188,200 454 AB3229-COPS/State 434,016 476,436 553,378 457,400
456 Asset Seizure-State 85% 40,666 3,686 17,633 17,600
457 Asset Seizure-State 15% 12,927 7,901 8,356 8,400
Total Special Revenue Funds 28,471,382 24,455,162 27,661,032 26,673,200

CAPITAL PROJECTS FUNDS
500 Capital Projects 3,502,804 5,258,554 3,584,981 3,585,000 510 Park Acquisition 4,463,357 701,023 1,580,943 220,100 511 Park Acq (Quimby) 14,930 34,780 18,828 18,700
512 El Modena Park Facilities 125,238 167,646 187,741 144,300 540 Old Town Parking 5,360 4,791 5,253 5,200
550 Reimbursable Capital 4,356,548 4,962,536 4,440,791 5,300,000 551 County Park Grants 1,409 242 534 -
555 Parking In Lieu 6,260 3,761 3,964 2,400
City of Orange
Fiscal Year 2026-2027
Schedule of Revenues by Fund
2188
FY 27 Budget
Actual Actual Estimate Budget
2023-24 2024-25 2025-26 2026-27
City of Orange
Fiscal Year 2026-2027
Schedule of Revenues by Fund
560 Fire Facilities Fees 653,179 177,447 306,554 22,800 570 Police Facilities Fees 268,719 82,970 128,576 21,500 580 Library Facilities Fees 382,901 231,230 171,148 17,900 877 Serrano 91-2 2,081,502 2,178,026 2,095,295 2,177,200 878 Del Rio CFD #06-1 1,489,776 1,642,522 1,860,197 1,642,200 902 Capital Bond Proceeds 2,104,127 207,073 320,254 1,801,100 950 City Trf: Tustin Project Taxable 59,729 69,060 48,802 33,100 Total Capital Projects Funds 19,515,841 15,721,660 14,753,861 14,991,500

INTERNAL SERVICE FUNDS
720 Equipment Replacement 305,211 1,276,113 980,627 244,200 730 Worker's Compensation 5,615,880 6,172,361 6,646,155 6,239,400 731 Liability 4,714,473 4,653,747 5,494,246 4,887,600
760 Emp Accrued Liability 1,951,853 2,058,340 3,149,967 13,167,500 790 Computer Replacement 397,038 3,536,855 419,100 446,800 Total Internal Service Funds 12,984,456 17,697,416 16,690,095 24,985,500

ENTERPRISE FUNDS
600 Water Fund 44,813,054 53,344,789 46,632,452 45,584,600 601 Sanitation (Sewer) Fund 11,027,587 9,799,254 9,413,998 9,486,700 Total Enterprise Funds 55,840,641 63,144,043 56,046,450 55,071,300 GRAND TOTAL 271,496,686 282,220,494 280,485,152 292,900,100 2189
FY 27 Budget
Actual Actual Estimate Budget
2023-24 2024-25 2025-26 2026-27
GENERAL FUND (100s)
Property Taxes 54,570,052 57,658,841 59,822,181 61,700,600 Sales Taxes 50,610,366 49,342,726 51,335,804 51,594,300 Transient Occupancy Taxes 6,080,339 6,150,976 6,100,192 6,198,100 Franchises 2,981,298 2,753,299 3,078,880 3,057,300
Licenses & Permits 7,204,690 6,667,071 7,645,141 7,835,100 Fines & Forfeitures 729,875 2,636,075 2,426,324 2,897,600 Use of Money & Property 4,754,322 3,730,340 3,922,905 3,929,100 Revenue from Other Agencies 3,415,296 2,501,399 1,816,924 1,505,100 Fees for Services 6,986,560 6,602,124 7,647,596 7,953,100 Miscellaneous Revenues 3,053,774 1,620,906 3,995,136 4,177,800 Interfund Revenue 11,668,745 15,474,265 10,077,495 4,830,500 Transfers In 2,629,049 3,250,000 4,485,252 15,500,000
Reimbursable Expenses - 2,814,190 2,979,885 -
Total General Fund 154,684,366 161,202,212 165,333,715 171,178,600 SPECIAL REVENUE FUNDS (200s-400s)
Taxes 2,321,307 2,373,571 2,382,408 2,355,800
Franchises 219,936 190,507 312,324 312,300
Licenses & Permits - - - -
Fines & Forfeitures - - - -
Use of Money & Property 1,665,450 1,795,025 1,730,133 1,745,800 Revenue from Other Agencies 17,249,426 14,767,110 17,699,517 16,241,800 Fees for Services 6,921,579 5,126,271 5,367,859 5,874,700 Miscellaneous Revenues 93,684 202,678 168,790 142,800
Interfund Revenue - - - -
Total Special Revenue Funds 28,471,382 24,455,162 27,661,032 26,673,200 CAPITAL PROJECTS FUNDS (500s)
Licenses & Permits 4,002,651 173,749 1,202,910 14,900
Use of Money & Property 1,176,487 1,902,062 1,906,147 1,132,100 Revenue from Other Agencies 4,421,200 4,736,201 4,515,791 5,375,000 Property Tax 3,587,118 3,640,475 3,389,296 3,595,100
Fees for Services 4,616,925 4,772,732 3,739,717 3,159,300 Miscellaneous Revenues - 8,761 - -
Interfund Revenue 1,711,460 487,680 - 1,715,100
Total Capital Projects Funds 19,515,841 15,721,660 14,753,861 14,991,500 Fiscal Year 2026-2027
City of Orange
Schedule of Revenues by Fund Type and Category
2190
FY 27 Budget
Actual Actual Estimate Budget
2023-24 2024-25 2025-26 2026-27
Fiscal Year 2026-2027
City of Orange
Schedule of Revenues by Fund Type and Category

INTERNAL SERVICE FUNDS
Revenue From Other Agencies 14,116 121,901 80,627 80,600 Miscellaneous Revenues 1,659,421 1,853,452 1,887,230 1,506,900 Interfund Revenue 10,310,919 15,722,063 13,822,238 13,843,500 Transfers In 1,000,000 - 900,000 9,554,500
Total Internal Service Funds 12,984,456 17,697,416 16,690,095 24,985,500

ENTERPRISE FUNDS
Licenses & Permits 2,416 604 1,560 1,600
Fines & Penalties 495,013 535,302 1,729,668 809,000
Use Of Money & Property 1,876,433 2,277,641 1,564,156 1,536,400 Revenue From Other Agencies 807,978 4,348,308 1,747,653 1,747,700 Other Revenue 219,402 207,468 283,341 258,200
Inter Fund Revenue 2,310,270 - - -
Water Charges For Services 50,129,129 55,774,720 50,720,071 50,718,400 Total Enterprise Funds 55,840,641 63,144,043 56,046,450 55,071,300 GRAND TOTAL 271,496,686 282,220,493 280,485,153 292,900,100 2191
FY 27 Budget
Actual Actual Estimate Budget
2023-24 2024-25 2025-26 2026-27

GENERAL FUND
100 General Fund 151,795,316 159,407,802 163,067,843 170,852,700 105 Reimbursable - 1,713,477 1,997,773 -
Total General Funds 151,795,316 161,121,280 165,065,616 170,852,700

SPECIAL REVENUE FUNDS
200 PEG Program 285,554 333,396 302,404 254,800
201 CASP 124 8,190 23,945 -
210 Building Records and Planning Doc. 334,233 298,629 269,052 1,028,900 225 EMT Program 3,278,523 3,776,439 3,499,733 9,075,900 226 Opioid Settlement - 56,058 1,286,368 -
231 Affordable Housing (1,127,324) 21,029 2,146 -
232 Low/Moderate Income Hsng Asset (12,323,326) 277,729 824,985 404,400 245 Air Pollution Reduction (AQMD) 154,425 73,215 115,316 68,900 250 O.C.P.T. 1,763 3,099 6,297 12,200
263 Measure M2 4,814,301 3,136,393 5,775,532 4,205,600
270 Special Gas Tax Maint 3,924,179 3,106,446 3,952,653 4,301,300 274 RMRA 5,257,973 1,338,944 3,485,821 3,500,000
287 Citywide TSIP 904,381 167,215 2,137,994 1,695,900
291 Santiago LMD 776,168 1,205,503 1,175,194 958,300
293 Sycamore Cross LMD 38,298 42,191 61,830 36,300
294 Del Rio LMD 69,251 79,342 109,538 84,700
310 CDBG 784,834 982,832 1,839,865 1,067,500
317 HOME Grant (1,759,144) 52,051 741,545 1,137,500
353 Federal Police Grants 11,963 12,884 17,819 1,300
355 Asset Seizure-Federal 218,157 467,537 421,758 294,800 358 Asset Seizure-RNSP Federal 64,924 74,246 26,337 -
359 Asset Seizure-RNSP Treasury - - 681 200
360 Asset Seizure-Treasury 32,618 33,385 58,775 77,600
399 Other Federal Grants - 3,276 859,982 -
400 Proposition 172 720,688 849,722 1,158,598 1,162,600 412 SB2 Building Home & Jobs Act 64,900 3,343,153 3,346,623 5,800 450 Traffic Safety Grant 18,709 77,439 387,896 82,400
454 AB3229-COPS/State 193,593 169,661 862,166 497,800
456 Asset Seizure-State 85% 3,258 12,424 22,378 20,600
457 Asset Seizure-State 15% - - 762 200
Total Special Revenue Funds 6,743,024 20,002,430 32,773,993 29,975,500

CAPITAL PROJECTS FUNDS
500 Capital Projects 7,914,382 4,447,529 8,247,056 14,140,400 510 Park Acquisition 1,718,966 376,429 3,197,255 2,370,000 511 Park Acq (Quimby) 289,815 - 95,095 -
512 El Modena Park Facilities 37,123 85,362 391,683 500,000 540 Old Town Parking 8,235 11,314 17,789 15,500
City of Orange
Fiscal Year 2026-2027
Schedule of Expenditures by Fund
2192
FY 27 Budget
Actual Actual Estimate Budget
2023-24 2024-25 2025-26 2026-27
City of Orange
Fiscal Year 2026-2027
Schedule of Expenditures by Fund
550 Reimbursable Capital 4,306,768 4,238,453 5,612,478 7,850,000 551 County Park Grants 22,565 3,733 6,962 -
CAPITAL PROJECTS FUNDS (CON'T.)
555 Parking In Lieu 57,025 29,420 23,042 -
560 Fire Facilities Fees 222,200 227,013 423,971 600,000 570 Police Facilities Fees 35,433 - 309,681 615,000
580 Library Facilities Fees 8,176 120,330 837,031 326,900 877 Serrano 91-2 2,007,282 2,061,804 7,763 8,500
878 Del Rio CFD #06-1 2,012,981 1,480,419 7,929 10,500
902 Capital Bond Proceeds 4,918,465 1,572,237 2,664,977 1,973,200 950 City Trf: Tustin Project Taxable - - - -
Total Capital Projects Funds 23,559,416 14,654,042 21,842,711 28,410,000

INTERNAL SERVICE FUNDS
720 Equipment Replacement 1,630,894 1,795,113 5,752,229 2,795,000 730 Worker's Compensation 3,894,450 9,526,254 6,181,896 5,344,700 731 Liability 4,573,059 3,974,178 5,376,674 6,144,400
760 Emp Accrued Liability 1,329,942 7,922,919 13,282,413 10,618,200 790 Computer Replacement 2,490,846 2,665,539 3,471,632 4,016,000 Total Internal Service Funds 13,919,190 25,884,001 34,064,844 28,918,300

ENTERPRISE FUNDS
600 Water Fund 38,089,984 51,542,432 59,319,536 49,920,000 601 Sanitation (Sewer) Fund 9,210,129 11,832,533 13,892,242 9,248,600 Total Enterprise Funds 47,300,113 63,374,964 73,211,778 59,168,600 243,317,059 285,036,717 326,958,942 317,325,100
2193
FY 27 Budget
Actual Actual Estimate Budget
2023-24 2024-25 2025-26 2026-27

GENERAL FUND
Salaries and Benefits 101,895,187 104,364,884 103,947,889 109,840,200 Contractual Services 4,384,946 6,141,942 10,083,247 7,473,200 Miscellaneous Expenses 4,115,297 961,597 3,217,645 3,894,300 Materials and Supplies 4,649,079 4,851,803 4,702,718 4,731,000 Repair/Maintenance 7,487,356 6,865,145 9,594,564 10,037,200 Utility Charges 3,006,642 3,321,196 3,534,948 3,605,500 Debt Service 17,385,681 17,377,333 17,519,111 17,908,400 Capital Outlay 192,773 1,006,636 146,212 74,500
Internal Service Costs 8,678,355 14,029,588 8,866,258 3,733,900 Transfers - 487,680 1,455,252 9,554,500
Reimbursable Expenses - 1,713,477 1,997,773 -
Total General Fund 151,795,316 161,121,281 165,065,617 170,852,700

SPECIAL REVENUE FUNDS
Salaries and Benefits 5,724,546 5,749,247 5,275,741 6,553,000 Contractual Services 1,411,036 1,854,991 3,326,513 1,392,100 Miscellaneous Expenses (16,214,721) 2,406,336 3,078,823 890,000 Materials and Supplies 933,497 1,022,682 1,522,065 2,180,600 Repair/Maintenance 1,162,942 998,861 1,453,258 1,237,800 Utility Charges 305,830 297,870 344,138 327,100
Debt Service 648,859 649,024 649,024 4,389,500
Capital Improvements 10,187,477 4,540,597 14,824,387 10,786,500 Internal Service Costs 2,454,510 2,482,822 2,300,044 2,218,900 Transfers 129,049 - - -
Total Special Revenue Funds 6,743,025 20,002,430 32,773,993 29,975,500

CAPITAL PROJECTS FUNDS
Salaries and Benefits 80,568 65,155 67,730 -
Contractual Services 132,189 60,773 99,149 19,000
Miscellaneous Expenditures 277,180 274,877 608,454 300,000 Internal Service Costs - - 139,725 10,800
Debt Service 5,708,540 3,517,341 - 1,715,100
Repair/Maintenance 5,235 11,314 40,230 80,200
Capital Improvements 11,542,434 7,724,581 17,887,423 17,284,900 Transfers Out 5,810,270 3,000,000 3,000,000 9,000,000
Total Capital Projects Funds 23,556,416 14,654,041 21,842,711 28,410,000

INTERNAL SERVICE FUNDS
Salaries and Benefits 2,016,162 8,992,829 14,173,643 11,120,200 Contractual Services 274,726 196,483 768,094 569,200
Miscellaneous Expenses 7,130,643 11,573,821 9,721,101 10,008,600 Materials and Supplies 65,373 63,803 63,982 82,800
Debt Service 661,821 690,558 - -
Capital Outlay 3,418,345 3,673,265 7,923,836 3,845,300
Internal Service Costs 350,918 691,823 482,992 290,900
Utility Charges 1,202 1,421 1,196 1,300
Transfers - - 930,000 3,000,000
City of Orange
Fiscal Year 2026-2027
Schedule of Expenditures by Fund Type and Category
2194
FY 27 Budget
Actual Actual Estimate Budget
2023-24 2024-25 2025-26 2026-27
City of Orange
Fiscal Year 2026-2027
Schedule of Expenditures by Fund Type and Category
Total Internal Service Funds 13,919,190 25,884,003 34,064,844 28,918,300

ENTERPRISE FUNDS
Salaries and Benefits 10,847,239 10,405,128 8,437,361 10,179,600 Contractual Services 692,714 785,512 791,459 828,500
Miscellaneous Expenses 343,836 5,174,887 1,965,353 219,300 Materials and Supplies 18,549,399 25,207,389 29,765,465 26,136,200 Repair/Maintenance 2,238,864 2,005,507 3,130,763 2,918,900 Utility Charges 3,208,479 3,478,111 3,045,104 4,154,300 Debt Service 644,512 678,382 1,301,891 1,333,400
Capital Improvements 7,093,395 9,743,428 21,106,671 10,220,300 Internal Service Costs 3,681,674 5,896,620 3,667,712 3,178,100 Transfers - - - -
Total Enterprise Funds 47,300,112 63,374,964 73,211,779 59,168,600 GRAND TOTAL 243,314,059 285,036,719 326,958,944 317,325,100 2195
Current Position New Position Department Fund FTE Fiscal Impact Request Administrative Assistant City Clerk 100 -1.00 (92,100) Eliminate Assistant City Manager City Manager 100 -1.00 (340,400) Eliminate Management Intern City Manager 100 -0.50 (22,700) Eliminate Historic Preservation Planner Community Development 100 -1.00 (153,900) Eliminate Executive Assistant Community Services 100 -1.00 (114,500) Eliminate Administrative Specialist Community Services 100 -1.00 (91,400) Eliminate Recreation Services Coordinator Community Services 100 -1.00 (99,100) Eliminate Recreation Services Coordinator Community Services 100 -1.00 (99,100) Eliminate All positions under activities 7014 Aquatic Community Services 100 -6.50 (318,500) Eliminate Rec Services Leader I Community Services 100 -4.00 (194,100) Eliminate Rec Services Leader II Community Services 100 -3.00 (136,500) Eliminate Rec Services Leader III Community Services 100 -0.50 (12,400) Eliminate Rec Services Specialist Community Services 100 -1.50 (76,500) Eliminate Assistant Recreation Coordinator Community Services 100 -0.75 (72,900) Eliminate Budget Manager Finance 100 -1.00 (166,300) Eliminate
Finance Supervisor Finance 100/600 -1.00 (163,100) Eliminate Finance Clerk Finance 100 -1.00 (77,300) Eliminate
Purchasing Officer Finance 100 -1.00 (186,400) Eliminate Senior Administrative Analyst Information Technology 100 -1.00 (147,000) Eliminate IT Specialist Information Technology 100 -1.00 (115,400) Eliminate Senior Library Manager Library Services 100 -1.00 (166,500) Eliminate Librarian I Library Services 100 -1.00 (98,700) Eliminate Library Pages Library Services 100 -2.00 (78,400) Eliminate Parking Control Officer I Police 100 -3.80 (169,600) Eliminate Maintenance Worker Police 100 -1.00 (78,200) Eliminate
Police Record Clerk Police 100 -1.00 (90,100) Eliminate Senior Police Clerk Police 100 -1.00 (97,700) Eliminate Administrative Assistant Public Works 100/220/600 -1.00 (86,700) Eliminate Assistant Public Work Director Public Works 100/220/600 -1.00 (221,400) Eliminate Associate Civil Engineer Public Works 100 -1.00 (145,700) Eliminate Manager Transportation Services/City Traffic
Engineer Public Works 100/270 -1.00 (216,500) Eliminate Library Services Director Library Services 100 -1.00 (244,700) Eliminate - merged with CS Police Sergeant Police 100 -1.00 (234,800) Frozen
Police Officer Police 100 -4.00 (683,200) Frozen
Police Officer Police 100 -5.00 (854,000) Frozen
Human Resources Analyst II Risk Management Analyst II City Attorney 100 0.00 - Title change - no fiscal impact Administrative Services Director Community Services & Library Director Community Services 100 0.00 - Title change - no fiscal impact Permit Technician Code Compliance Technician Community Development 100 0.00 - Title change - no fiscal impact Fiscal Year 2026-27
Position Changes
City of Orange
Attachment 3
2196
Current Position New Position Department Fund FTE Fiscal Impact Request Fiscal Year 2026-27
Position Changes
Deputy City Clerk Assistant City Clerk Services Director City Clerk 100 0.00 24,700 Reclass existing position Recreation Services Supervisor Deputy City Clerk City Clerk 100 0.00 24,100 Reclass existing position Sr Assistant to the City Manager Deputy City Manager City Manager 100 0.00 33,800 Reclass existing position Plan Check Engineer Sr Plan Check Engineer Community Development 100 0.00 129,900 Reclass 2 Plan Check Engineer to Senior
Plan Check Engineer
Senior Plan Check Engineer Principal Plan Check Engineer Community Development 100 0.00 37,200 Reclass Sr Plan Check Engineer to Principal
Plan Check Engingeer
Stock Clerk Finance Clerk Finance 100 0.00 7,400 Reclass existing position Accounting Manager Controller Finance 100 0.00 15,300 Reclass existing position Administrative Analyst II Sr Administrative Analyst Fire 100 0.00 12,400 Reclass existing position Librarian III Librarian II Library Services 100 0.00 (29,200) Fill at a lower position Homeless Outreach Specialist Crime Prevention Specialist Police 100 0.00 40,700 Reclass existing position Public Works Administrator Senior Administrative Analyst Public Works 100/220/600 0.00 (163,400) Reclass existing position 189-001
(benefitted)
Public Works Administrator Senior Administrative Analyst Public Works 600 0.00 147,000 Reclass existing position 189-001
(benefitted)
PT Management Intern Finance 100 0.75 45,000
New - 2 PT 19-hour non-benefited
Management Intern
Ambulance Operator Fire 225 18.00 810,000
New positions - enhancement to AO
program
TOTAL CHANGES IN FTE & BUDGET -36.80 (5,010,900)
Freeze vs. Eliminate Total by Funds
Freeze – The position remains authorized but is not funded for the upcoming budget cycle. (5,606,150) General Fund This results in no change to authorized FTE, but funded FTE is reduced. 595,250 Other Funds (5,010,900)
Eliminate – The position is removed from the authorized position list.

This results in a reduction to both authorized FTE and funded FTE. Total by Request FTE Amount
-45.55 (4,373,800) Elminated
-10.00 (1,772,000) Frozen

0.00 279,900 Reclass

18.75 855,000 New
-36.80 (5,010,900)
2197
Department 2023A 2024A 2025A
2026
Authorized
2026
Budgeted
2027
Budgeted
CITY COUNCIL 7.000 7.000 7.000 7.000 7.000 7.000
CITY MANAGER 6.625 9.000 8.000 7.000 7.000 5.000

ECONOMIC DEVELOPMENT
CITY ATTORNEY 8.000 8.000 8.000 8.000 8.000 7.000
CITY CLERK 5.000 8.000 7.500 7.500 6.500 6.500
CITY TREASURER 1.000 1.000 1.000 1.000 1.000 1.000
FINANCE 32.500 32.750 31.250 31.250 30.250 29.000
HUMAN RESOURCES 10.000 10.000 10.000 10.000 10.000 10.000 INFORMATION TECHNOLOGY 8.000 8.000 8.000 8.000 8.000 7.000 LIBRARY SERVICES 40.950 40.950 40.525 40.525 34.000 33.400 FIRE 141.789 141.789 143.039 142.000 142.000 160.000
POLICE 270.639 267.789 258.667 255.667 248.667 237.867
PUBLIC WORKS 144.950 134.000 133.950 132.950 130.950 129.950 COMMUNITY DEVELOPMENT 24.000 39.000 39.500 40.500 39.500 39.500 COMMUNITY SERVICES 64.550 63.950 62.950 62.950 48.075 44.350 TOTAL FTE 765.003 771.228 759.381 754.342 720.942 717.567 Total Elected 9.000 9.000 9.000 9.000 9.000 9.000
Total Revised FTE 756.003 762.228 750.381 745.342 711.942 708.567 City of Orange
Fiscal Year 2026-2027
Schedule of Positions
Attachment 4
2198
Table 1: FY 27 General Fund Budget Balancing Measures - Reductions Measure Amount Deferred/ Reduced
Eliminating Positions $4,373,800
Freezing Positions 1,772,000
Total $6,145,800
Table 2: FY 27 General Fund Budget Balancing Measures – Transfers to General Fund Fund Transfer to GF
225 EMT Program $3,500,000
500 Capital Projects 9,000,000
790 IT Capital 3,000,000
Total $15,500,000
Table 3: FY 27 Deferred and/or Discontinued Projects
Project/Effort Fund
Amount
Deferred/
Reduced
Notes
Facilities Condition Assessment Capital Projects
Fund (500) $100,000 Deferred
City Hall Roof Replacement Capital Projects
Fund (500) 1,350,000 Deferred
Fire Station 7 – Roof
Underlayment Replacement
Capital Projects
Fund (500) 285,000 Deferred
Fire Station 8 – Exterior Paint and
Roof Replacement
Capital Projects
Fund (500) 285,000 Deferred
Main Library Gutter Replacement Capital Projects
Fund (500) 200,000 Deferred
Community Services Building
Roof Replacement
Capital Projects
Fund (500) 350,000 Deferred
City Hall Landscape Renovation Capital Projects
Fund (500) 310,000 Deferred
City Hall – Elastomeric Coating
Renewal
Capital Projects
Fund (500) 200,000 Deferred
Total Deferred Projects $ 3,080,000
Attachment 5
2199

Page 1 ends

Fund 210
General Plan Update - Revenues and expenditures related to the management of building records and planning documents are accounted for in this fund.

Source of Revenue:

1. Technology Fee – This fee is charged at 0.13% of valuation of each building project, and a flat rate for each mechanical, electrical, and plumbing building permit. Funds are utilized to cover the cost of software, services, labor, and equipment used for the storage, management, and retrieval of records and information.

2. General Plan Amendment Update Surcharge – The surcharge is assessed at 0.05% of valuation of each building project. Funds are collected to be utilized for updating the general plan.

3. Interest on Investments – Interest earnings are allocated monthly based on cash balance of this fund at the end of the month.

Restrictions on Revenue – Funds are required by administrative action to be spent only on management of building records and planning documents.

Fund 263
Renewed Measure M (M2) Traffic Improvement - The receipt and disbursement of funds received pursuant to Renewed Measured M (M2), are accounted for in this fund. Measure M was originally approved by Orange County voters in November 1990. It was a 20-year program (1991-2011) for local transportation improvements funded by a ½ cent sales tax. Voters renewed the ½ cent sales tax in November 2006 for another 30 years (2011-2041). Projects and programs associated with M2 funding include improvements to the Orange County freeway system, streets & road networks throughout the County, additional expansion of the Metrolink system, and the cleanup of roadway storm water runoff.

Source of Revenue:

1. Measure M (M2) Tax – The City receives funding from Orange County Transportation Authority (OCTA). The allocations are distributed by OCTA under a formula that accounts for population, street mileage, and amount of sales tax collected in the City.

2. Other Grant – M2 includes funding to support the growing transportation needs of seniors and persons with disabilities through the Senior Mobility Program (SMP). OCTA distributes funding based on the proportion of 60+ residents in the City relative to total county senior population reported by the U.S. Census Bureau.

3. Rents and Concessions - Rental revenue for the property on 292 N. Main Street. This property was purchased with Measure M funds for future Main Street widening project.

4. Plans and Specification Charges – Charges for bids related to street improvement projects.

5. Interest on Investments – Interest earnings are allocated monthly based on cash balance of this fund at the end of the month.

Attachment 7
2200

Page 2 ends

Restrictions on Revenue – Pursuant to the Renewed Measure M Transportation Ordinance No. 3, M2 funds must be used only for transportation purposes and expended within 3 years of receipt. They should not be used to supplant developer funding for transportation projects. M2 interest proceeds must be spent on transportation activities consistent with M2 eligible activities per the M2 Ordinance.

Fund 270
Gas Tax - The receipt and disbursement of gas tax funds used for maintenance and construction of city streets and roads are accounted for in these funds.

Source of Revenue:

1. State Gas Tax – Gas tax revenue from the State apportioned based on population according to Street and Highway Code Section 2103, 2105, 2106, 2107, and 2107.5. The City also receives loan repayments from the state for previous borrowing from public transportation funds. This funding is allocated on a per capita basis over three fiscal years:
17-18, 18-19, and 19-20.

2. Rents and Concessions - Rental revenue for the three properties on La Veta Avenue that were purchased with gas tax funds.

3. Expense Reimbursements – Reimbursements for damage to City property.

4. Interest on Investments – Interest earnings are allocated monthly based on cash balance of these funds at the end of the month.

Restrictions on Revenue – Use of gas tax revenues is restricted by Article XIX of the California State Constitution and by Streets and Highways Code Section 2101. Funds must be expended for the research, planning, construction, improvement, maintenance, and operation of local public streets, highways, and exclusive public mass transit guideways.

Fund 274
Road Maintenance Rehabilitation Account (RMRA) – Road Repair and Accountability Act of 2017 (Senate Bill 1) authorizes the State to allocate gas tax funds under Street and Highway Code Section 2031 through the Road Maintenance and Rehabilitation Account (RMRA). The receipt and disbursement of funds from the RMRA and used for maintenance and construction of city streets and roads are accounted for in this fund.

Source of Revenue:

1. State Gas Tax – SB1 increases per gallon fuel excise tax, diesel fuel sales tax, and vehicle registration fee. The State apportions gas tax revenue to the City based on population.

2. Interest on Investments – Interest earnings are allocated monthly based on cash balance of this fund at the end of the month.

Restrictions on Revenue – Use of gas tax revenues is restricted by Streets and Highways Code Section 2030 for road maintenance, rehabilitation, and critical safety needs on both the state highway and local streets and road system. The City is required to sustain a maintenance of effort (MOE) for the receipt of RMRA funds by spending at least the average of FY 09-10 through FY 11-12 general fund expenditures for street, road, and highway purposes. 2201

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Fund 287
Transportation System Improvement Program (TSIP) - Development impact fees collected for improving the transportation system are accounted for in these funds. A separate fund has been established for each specific geographic area for which the fees are collected and used for the transportation system.

Source of Revenue:

1. TSIP Fees – Fees are collected at building permit issuance according to the fee rates for projects, facilities or uses identified for specific TSIP areas.

2. Interest on Investments – Interest earnings are allocated monthly based on cash balance of these funds at the end of the month.

Restrictions on Revenue – Development impact fees are governed by the Mitigation Fee Act (Government Code Section 66000 et. seq.) for development related capital facilities. Fee revenues can be expended only for transportation improvements in the specific areas from which the fees are collected. Pursuant to Government Code Sections 66001 (d) and (e), all unexpended or uncommitted fees which have been on deposit over five years are subject to refunds to the current owners of the development projects for which the fees were paid.

Fund 310
Community Development Block Grant (CDBG - Grant funds are awarded by the U.S. Department of Housing and Urban Development (HUD) to assist cities and counties in developing programs and projects which benefit low and moderate income residents. The receipt and disbursement of funds for the CDBG. programs are accounted for in these funds.

Source of Revenue:

1. Federal HUD Grants – The City receives CDBG funds from HUD, which determines the amount of each grant by using a formula based on community need, including the extent of poverty, population, housing overcrowding, age of housing, and population growth lag in relationship to other metropolitan areas.

2. Principal Repayments/Principal & Revenue Abatements – Deferred loan repayments received from residents in the City to pay off their loans on housing funded by the CDBG. program.

3. Interest on Deferred Loans – Interests received from the deferred loans noted above.

4. Interest on Investments – Interest earnings are allocated monthly based on cash balance of these funds at the end of the month.

Restrictions on Revenue – Funds can only be disbursed to provide programs and projects for low and moderate income Orange residents. Timely expenditure requirement of grant funds is governed by the Code of Federal Regulations (CFR) Title 24, Section 570.902. The amount of undisbursed grant funds on hand cannot be more than 1.5 times the annual allocation for the current program year at 60 days prior to the end of the program year. HUD can withhold future grants until the unexpended funds are reduced to the required level. 2202

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Fund 454
Grants received from the federal and state governments and disbursement of the funding for law enforcement purposes are accounted for in these funds.

Source of Revenue:

1. State Grants – The City receives the Citizens Option for Public Safety/Supplemental Law Enforcement Services Account (COPS/SLESA) funding allocated from the county based on population.

2. Interest on Investments – Interest earnings are allocated monthly based on cash balance of this fund at the end of the month.

Restrictions on Revenue – Pursuant to Government Code Section 30062, funds from the COPS program must be expended exclusively to support front line law enforcement services.

Fund 500
Capital Projects - Capital projects funded with General Fund revenues and a loan to Special Revenue Fund for a capital project are accounted for in this fund.

Source of Revenue:

1. General Fund contributions, as authorized by City Council.

2. Interfund Loans – Interest received from a loan to Fund 120 Proposition 172 for the purchase of 800 MHz radio system.

Restrictions on Revenue – Funds are required by administrative action to be spent only on major capital projects other than those financed by Internal Service, Proprietary or Redevelopment (Successor) Funds.

Fund 510
Park Acquisition & Development - Park development fees collected to fund the acquisition, construction, and renovation of park facilities are accounted for in these funds.

Source of Revenue:

1. Park Acquisition Fees – The City is divided into two districts, using Newport Avenue as the east/west dividing line. Fees are collected at the issuance of building permits to finance the cost of park facilities and improvements for new residential development.

Park acquisition (infill) fees in fund 510 apply to newly created housing units that are not a part of a new subdivision.

2. Interest on Investments – Interest earnings are allocated monthly based on cash balance of these funds at the end of the month.

Restrictions on Revenue – Park fees in fund 510 are governed by the Mitigation Fee Act (Government Code Section 66000 et. seq.) to fund the need for additional park development based on the impact of the development. The unexpended or uncommitted fees over five years after they were deposited in fund 510 need to be refunded to the current owners of the 2203

Page 5 ends

development projects for which the fees were paid according to Government Code Sections 66001 (d) and (e).

Fund 512
El Modena Park Facility – Rental fees collected from the El Modena cell towers are used to fund the development and improvement of City park and recreational facilities.

Source of Revenue:

1. Cell Phone Tower Rent Revenue – Lease revenue for the cell towers located in the park.

2. Interest on Investments – Interest earnings are allocated monthly based on cash balance of this fund at the end of the month.

Restrictions on Revenue – Funds are required by administrative action to be disbursed only on the development and improvement of park and recreational facilities in the City.

Fund 550
Reimbursable Capital Projects - Projects for which the City is the lead agency and for which funding is provided by a grant or through another agency are accounted for in this fund.

Source of Revenue:

1. Grants – Grant funding received from Federal, County, State or other public agencies.

2. Interest on Investments – Interest earnings are allocated monthly based on cash balance of this fund at the end of the month.

Restrictions on Revenue – Funds are restricted to be expended only on the reimbursable capital projects and are required to stay in compliance with the requirements per the grant/contract agreements.

Fund 560
Fire Facility Fees – Development impact fees collected for the purpose of constructing or improving fire facilities are accounted for in this fund.

Source of Revenue:

1. Fire Facilities and Equipment Fees – Fees are paid at the issuance of building permits to fund the fire facility needs created by new development based on types of land use.

2. Interest on Investments – Interest earnings are allocated monthly based on cash balance of this fund at the end of the month.

Restrictions on Revenue – The funds can be used only for the purpose of acquiring, developing, maintaining and improving the fire protection services, compliant with the Government Code Sections 66000 through 66009 of the Mitigation Fee Act. Fees collected are restricted to be spent or committed within 5 years, or be subject to reimbursement pursuant to Government Code Sections 66001 (d) and (e).

Fund 570
2204

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Police Facility Fees - Development impact fees collected for the purpose of constructing or improving police facilities are accounted for in this fund.

Source of Revenue:

1. Police Facility Fees – Fees are collected at building permit issuance for the construction and improvement of police facilities attributable to new residential and non-residential development projects.

2. Interest on Investments – Interest earnings are allocated monthly based on cash balance of this fund at the end of the month.

Restrictions on Revenue – The funds are restricted by Section 66000 et seq. of the Government Code (the Mitigation Act) to be disbursed only on new Police facilities or expansion of current facilities to serve new development. Fees collected are required to be spent or committed within 5 years, or be subject to reimbursement pursuant to Government Code Sections 66001 (d) and (e).

Fund 580
Library Facility Fees – Development impact fees collected for the purpose of constructing or improving library facilities are accounted for in this fund.

Source of Revenue:

1. Library Impact Fees – Fees are collected at the issuance of building permits for the need of new library facilities and other capital acquisition costs required by new residential development projects only. Fees are calculated based on density classification (dwelling units/gross acre).

2. Interest on Investments – Interest earnings are allocated monthly based on cash balance of this fund at the end of the month.

Restrictions on Revenue – Impact fee revenue must be spent on new library facilities or expansion of current facilities for new residential development in accordance with the Mitigation Fee Act (commencing with Section 66000 of the Government Code). All unexpended or uncommitted fees which have been on deposit over five years are subject to refunds to the current owners of the development projects for which the fees were paid.

Fund 600
Water Utility Operations – Revenues and expenses related to the operation and improvements of the water utility operation are accounted for in this fund.

Source of Revenue:

1. Water Services – Water consumption charge and service capacity charge are collected from customers.

2. Elevation Pumping Charge – This fee is charged to the residents living in higher elevations to recover a portion of the cost of pumping water to elevated zones.

3. Water Fire Service Charge – Customers with a private fire service connection are charged for water system fire flow capacity and maintenance.
2205

Page 7 ends

4. Water Sales – Agricultural, Construction, and Materials – Revenue received for water consumption from nurseries (agricultural), construction water usage, and materials used for new service installations.

5. Water Frontage Charges – Fees are collected for water main connections.

6. Water Connection Fees – This fee is charged for water connection in new development.

7. Development Related Services – Revenue received related to project review, plan check and/or inspection of a developing/redeveloping property on water services requested by a customer.

8. Establishment Fee – This fee is assessed for initiating water services.

9. Plan Check Fees – Plan check and inspection fees for small scale projects.

10. Rental of Construction Meters – Rental revenue for construction meters.

11. Other Water Fees – Fees are charged to recover labor and material costs for new service installations.

12. Water Delinquent Penalty – Penalty charge on unpaid balance for services rendered.

13. Water Penalties – Penalty fee for water reconnection.

14. Cell Phone Tower Rent – Lease revenue for a portion of water facility property to allow a telecommunication company to gain access to a wireless facility.

15. Interest on Investments – Interest earnings are allocated monthly based on cash balance of this fund at the end of the month.

16. Other Revenue – Includes expense reimbursements, damage to City property, and bids from contractors.

Restrictions on Revenue – Revenues generated in the Water fund are to be used to fund the maintenance and operation of the City’s water system as governed by Proposition 218.

Fund 601
Sewer - Sewer development fees collected to fund the construction of sewer mains needed as a result of new development are accounted for in this fund.

Source of Revenue:

1. Sewer Capital – Sewer infrastructure fees are collected to fund sewer replacement and rehabilitation through City identified capital projects that are necessary to replace and upgrade the sewer system.

2. Frontage Charges – Charges for sewer connection at the frontage of new developments.

3. Interest on Investments – Interest earnings are allocated monthly based on cash balance of this fund at the end of the month.
2206

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Restrictions on Revenue - Proposition 218 in the California Constitution Article 13D states that revenues derived by the charge cannot be used for any other purpose other than that for which the charge was imposed for sewer capital. Other funds are restricted by administrative action to be utilized only for sewer construction.

Fund 790
Computer Replacement - Purchases of computer equipment are accounted for in this fund.

Source of revenue:

1. Charges to Budgeted Funds - An allocation is made to all non-general fund programs.

Transfers from the general fund to the internal service funds are made to fund the operations when appropriate.

Restrictions on Revenue - Revenues in the internal service funds are restricted by administrative action to cover only expenditures for these funds.

Fund 954
City Transfer of Bond Funds from Former Redevelopment Agency – The proceeds from the issuance of tax-exempt bonds or notes pledged by tax increment revenues of the combined project area are accounted for in these funds.

Source of revenue:

1. Interest on Investments – Interest earnings are allocated monthly based on the remaining cash balance of these funds at the end of the month.

Restrictions on Revenue – Funds can be utilized only for capital expenditures restricted to “public purpose” activities as defined by California Redevelopment Law. 2207
Agenda Item
Orange City Council
Item #: 3.2. 3/24/2026 File #: 26-0116
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Trang Nguyen, Finance Director

1. SUBJECT
First Budget Study Session for the Proposed Fiscal Year 2026-27 Budget

2. SUMMARY
This is the first budget study session for the Fiscal Year 2026-27 Budget. This session presents revenue assumptions, the proposed expenditure budget, and budget-balancing measures for the General Fund.

3. RECOMMENDED ACTION

1. Provide direction to staff to prepare the Fiscal Year 2026-27 Preliminary Budget.

2. Review and discuss potential revenue measures.

4. FISCAL IMPACT
Fiscal Impact will be determined with final budget adoption.

5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability

6. DISCUSSION AND BACKGROUND
Background
Fiscal Year 2026-27 (FY27) continues to present significant financial challenges for the General Fund, as the City faces an ongoing structural imbalance between revenues and expenditures. The City’s largest revenue source, Property Tax, is expected to grow modestly within the constraints of Proposition 13, while Sales Tax revenues are projected to remain relatively flat. At the same time, costs across all major expenditure categories continue to increase.

Development of the FY27 Proposed Budget began with a zero-based budgeting approach, requiring departments to justify expenditures from the ground up rather than relying on prior-year spending as the baseline. This process resulted in proposed position reductions, continued vacancy controls, and the deferral of several lower-priority or non-core requests in order to align limited General Fund resources with the City’s highest service priorities.

The FY27 Proposed Budget includes reductions totaling approximately 56 full-time equivalent (FTE) positions, reducing the City’s workforce to 689.7 FTEs, or about 3% below FY26 and nearly 6% City of Orange Page 1 of 8 Printed on 3/19/2026
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Attachment 8
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Item #: 3.2. 3/24/2026 File #: 26-0116
below FY24.

Over the past three years, the City has exercised strong fiscal discipline, limiting operating expenditure growth to an average of 2.2%, compared to an average Consumer Price Index for All Urban Consumers (CPI-U) of 3.2%. For FY27, operating expenditures are projected to increase by

1.3%, which remains below the February CPI-U of 2.9%. Despite that restraint, the General Fund continues to face a structural imbalance driven primarily by annual debt service obligations totaling approximately $17.9 million, including $16.2 million for Pension Obligation Bonds and $1.7 million for Lease Revenue Bonds.

This fiscal outlook underscores the need to evaluate potential revenue enhancements and long-term strategies to achieve structural balance and ensure the City’s long-term financial sustainability.

General Fund Revenues
Based on current trends and analysis, General Fund operating revenues, excluding transfers, are projected at approximately $153.7 million for FY27, a decrease of about $140,000 from the FY26 year-end estimate. Total revenues, including transfers, are projected at approximately $170.7 million, an increase of about $12.4 million or 7.8% over the FY26 year-end estimate. Excluding one-time transfers, the FY27 General Fund revenue outlook is essentially flat.

The table below summarizes the General Fund revenues by source type, comparing the changes from the FY26 year-end estimates and the FY27 proposed budget:

Table 1: FY 27 Proposed General Fund Revenue
FY26 Year End
Estimate
FY27 Proposed Variance
From FY26
%
Change
Property Tax $59,355,220 $61,239,700 $1,884,480 3.2%
Sales Tax 50,567,208 50,676,800 109,592 0.2%
Internal Service Charges 10,077,495 4,496,300 -5,581,195 -55.4% Fees for Services 6,599,526 6,944,100 344,574 5.2%
Licenses & Permits 6,742,362 6,849,300 106,938 1.6%
TOT 6,339,957 6,412,400 72,443 1.1%
Miscellaneous Revenue 3,612,876 4,982,900 1,370,024 37.9% Use of Property 3,922,905 4,169,800 246,895 6.3%
Franchises 3,235,228 3,424,400 189,172 5.8%
Fines 1,669,836 2,874,900 1,205,064 72.2%
Revenue from Other
Agencies
1,704,322 1,615,700 -88,622 -5.2%
Total Operating
Revenue
$153,826,935 $153,686,300 -$140,635 -0.1%
Transfers In 4,485,252 17,000,000 12,514,748 279.0%
TOTAL REVENUE $158,312,187 $170,686,300 $12,374,114 7.8% Provided below is a summary of the assumptions used for the FY27 General Fund revenues:
· Property Tax: The City’s largest source of General Fund revenues, is proposed to be City of Orange Page 2 of 8 Printed on 3/19/2026
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· Property Tax: The City’s largest source of General Fund revenues, is proposed to be $61.2 million in FY27, an increase of roughly $1.9 million or 3.2% over FY26 year end estimates. While Proposition 13 generally limits annual assessed value increases to 2% on existing properties, additional growth occurs when properties change ownership and are reassessed at current market value. With the Federal Reserve lowering interest rates over the past year, housing market activity is expected to increase, leading to more home sales and modest additional growth in property tax revenues.
· Sales Tax: The FY27 revenue is projected to remain relatively flat at roughly $50.7 million, reflecting a $109,600 (0.2%) increase over the FY26 year-end estimate. According to statewide reports from the City’s sales tax consultant, while inflation has moderated and interest rates have declined, statewide economic indicators suggest consumers remain cautious. As a result, taxable sales are expected to stabilize, with spending largely focused on essential goods and value-oriented purchases. While fuel prices have been trending upward due to external and foreign market factors, a significant increase in sales tax is not considered in the FY27 projections largely due to thresholds within the City’s current sales tax agreements and the potential for volatility in this sector. · Internal Service Charges: Internal Service Charges is projected to be almost $4.5 million, a decrease of $5.6 million (55.4%) from the FY26 year-end. The decrease in Internal Service Charges does not reflect a corresponding reduction in actual service levels or citywide costs. Rather, it reflects a change in budgeting and reporting methodology, as several formerly separate Internal Service Funds were consolidated into the General Fund.

As a result, costs previously reflected in this category now appear directly in other operating expenditure categories.
· Fees for Services: The city is projecting a total of approximately $6.9 million in FY27, an increase of $345,000 (5.2%), compared to FY26 estimate. These fees are intended to offset the City’s operating costs of providing services and have been revised following the user fee study to more appropriately align charges with the cost of service delivery. This estimate considers the updated fees adopted at the January 13th Council meeting and proposed for the April 28th Council meeting.
· Transient Occupancy Tax (TOT): The projected TOT revenue for FY27 is just over $6.4 million, relatively flat with a slight increase of $72,000 (1.1%) compared to the FY26 year-end estimate. Travel demand has remained relatively stable as consumers continue to prioritize spending on experiences, travel, and leisure, though at somewhat moderate levels compared to the post-pandemic surge. According to the U.S. Travel Association, hotel room demand declined approximately 1% from the prior year, while short-term rental demand grew slightly by about 1%, reflecting shifting travel preferences. · Miscellaneous Revenue: Miscellaneous revenue is projected at just under $5.0 million in FY27, an increase of approximately $1.4 million over the FY26 year-end estimate. This category includes one-time reimbursements, donations, and other miscellaneous revenues, including approximately $1.0 million in Cal OES reimbursements for fire deployments and $150,000 to offset credit card fee surcharges. Because portions of this category are dependent on reimbursement timing and other one-time factors, actual City of Orange Page 3 of 8 Printed on 3/19/2026
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revenues will continue to be monitored and refined as needed during the budget process. · Fine and Forfeitures: Fine and forfeitures revenue is projected at approximately $2.9 million in FY27, an increase of about $1.2 million over the FY26 year-end estimate. This reflects anticipated revenues of approximately $1.0 million from the City’s paid parking program in Old Towne, as well as $300,000 from increased collections associated with Transient Occupancy Tax and Business License audit activities. As these revenues are partially dependent on program performance and collection activity, staff will continue to monitor actual results and update projections as needed. · Revenue from Other Agencies : FY27 revenue in this category is projected at approximately $1.6 million, a $89,000 (5.2%) decrease from the FY26 year-end estimate.

This category is primarily comprised of revenue received from other government agencies, as well as one-time grants from state funded programs. As is typical, revenue in this category may fluctuate throughout the year as additional grant programs are awarded and recognized.
· Transfers In: Transfers into the General Fund are projected to total $17.0 million in FY27, an increase of approximately $12.5 million over the FY26 year-end estimate. This amount primarily reflects one-time transfers of available fund balances from the Emergency Medical Transport Fund, Equipment Replacement Fund, and Capital Improvement Program Fund to temporarily offset the projected General Fund operating deficit. These transfers are non-recurring in nature and provide temporary budget relief rather than a long-term structural solution.

Overall, the FY27 revenue outlook reflects continued stability in core tax revenues, but not sufficient growth to close the City’s underlying structural gap. Staff will continue to monitor key economic indicators and actual revenues over the next few months. If warranted, staff will update the proposed FY27 revenue for the Preliminary Budget presentation.

General Fund Expenditures
The proposed FY27 General Fund operating expenditures total approximately $143.2 million, an increase of about $1.8 million or 1.3% over the FY26 year-end estimate. Total expenditures, including debt service and transfers out, are projected at approximately $170.7 million, reflecting an increase of about $10.3 million or 6.4% year over year.

Table 2 summarizes the General Fund expenditure by category, comparing the changes from the FY25 actuals, the FY26 year-end estimates, and the FY27 proposed budget:

Table 2: FY 26 Proposed General Fund Expenditure
Expenditure Category FY26 YE
Estimates
FY27 Proposed FY 27
Variance from
YE Estimate
% Change
Salaries and Benefits 105,296,845 109,683,500 4,386,655 4.2% Repair/Maintenance 9,469,606 9,898,200 428,594 4.5%
Professional/Other Svcs 7,002,544 7,987,000 984,456 14.1% Internal Service Costs 8,866,258 3,743,700 (5,122,558) -57.8% Materials and Supplies 4,474,858 5,193,600 718,742 16.1% Miscellaneous
Expenses
2,782,239 3,065,000 282,761 10.2%
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YE Estimate
Salaries and Benefits 105,296,845 109,683,500 4,386,655 4.2% Repair/Maintenance 9,469,606 9,898,200 428,594 4.5%
Professional/Other Svcs 7,002,544 7,987,000 984,456 14.1% Internal Service Costs 8,866,258 3,743,700 (5,122,558) -57.8% Materials and Supplies 4,474,858 5,193,600 718,742 16.1% Miscellaneous
Expenses
2,782,239 3,065,000 282,761 10.2%
Utility Charges 3,448,883 3,605,500 156,617 4.5%
Capital Outlay 62,481 44,500 (17,981) -28.8%
Total Operating
Expenditures
141,403,714 143,221,000 1,817,286 1.3%
Debt Services 17,515,954 17,905,400 389,446 2.2%
Transfers Out 1,455,252 9,554,500 8,099,248 556.6%
TOTAL

EXPENDITURES
160,374,920 170,680,900 10,305,980 6.4%
Provided below are the budget assumptions impacting the FY27 General Fund expenditures:
· Salaries & Benefits: The FY27 proposed budget for salaries and benefits is $109.7 million, an increase of about $4.4 million or 4.2% above the FY26 year-end estimate. The increase is attributed to the following factors:
o Salary Increases: The proposed FY27 budget includes annual step increases and a 3% increase for all City employees.
o Position Changes: The proposed budget includes the elimination of 45.7 FTEs while keeping 10 FTEs frozen for FY27. It also included reclassification of select existing positions to better align with current operational needs and organizational priorities.
o Fully Funded Overtime: Historically, overtime budget has been funded at 40% and utilizing vacancies to fill the gap. For FY26, staff is projecting a shortfall of about $5.4 million. Going forward, staff will fully budget projected overtime costs. Staff is projecting approximately $7.5 million in overtime for FY27. This amount is in line with the average of the last four fiscal years.

Although the FY27 Proposed Budget includes significant position reductions, salaries and benefits still increase year over year due primarily to annual step increases, the proposed 3% salary adjustment, and the decision to fully fund projected overtime costs rather than relying on vacancy savings to absorb those expenses.
· Professional/Other Services: The proposed FY27 budget for contractual services is approximately $8.0 million. This reflects a net increase of approximately $980,000, or

14.1%, compared to FY26 year-end estimates. This expenditure category includes $800,000 associated with North SPA services, $125,000 to support enhancements within the City’s Economic Development Division, $250,000 for year-round aquatics services, $498,000 for the Old Towne paid parking program, and $100,000 for on-call building inspection services. These increases are partially offset by one-time expenditures included in FY26 for labor relations legal services and the IT Strategic Plan. · Materials and Supplies: The proposed FY27 budget for materials and supplies is almost $5.2 million and reflects an increase of approximately $719,000 (16.1%) compared City of Orange Page 5 of 8 Printed on 3/19/2026
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almost $5.2 million and reflects an increase of approximately $719,000 (16.1%) compared to the FY26 year-end estimate. This increase is primarily driven by $400,000 for the replacement of mandatory safety equipment for the Fire Department, $100,000 in additional safety uniform costs, and general cost increases across various operating materials and supplies categories due to rising costs for materials and normal pricing adjustments.
· Miscellaneous Expenditures: The proposed FY27 budget for miscellaneous expenditures totaling just under $3.1 million reflects an increase of approximately $280,000 (10.2%) compared to the prior year. This increase is primarily attributable to anticipated election-related costs of $220,000, as well as $95,000 in additional Fire Department training expenses offset through the Santa Ana College training program. · Internal Service Costs/Allocations: As part of the FY26 budget process, the City completed a comprehensive Cost Allocation Plan conducted by Matrix Consulting Group and consolidated internal service functions into the General Fund. As a result of these changes, internal service costs are projected to total approximately $3.7 million, a decrease of approximately $5.1 million (57.8%) in FY27. This reduction reflects updated cost allocation methodologies and the elimination of prior internal service fund structures.

The decrease is partially offset by corresponding increases in other expenditure categories within the General Fund, as costs previously accounted for in Internal Service Funds are now directly reflected in departmental operating budgets.

Transfers to Internal Service Funds
The City’s Internal Service Funds (ISFs) are used to account for goods and services provided internally to support services such as vehicle replacement, computer replacement, general liability, workers’ compensation, and employee accrued liability.

Historically, contributions from the General Fund to certain Internal Service Funds were maintained at reduced levels in order to minimize near-term impacts on the General Fund, with the expectation that future year-end surpluses would be used to replenish those funds. As budgetary constraints have persisted, that strategy has resulted in continued underfunding of several Internal Service Funds, including the Workers’ Compensation Fund, which currently has a negative fund balance. The FY27 Proposed Budget includes a transfer of approximately $9.5 million to the Employee Accrued Liability Fund; however, due to ongoing General Fund constraints, negative balances in the Workers’ Compensation, General Liability, and Employee Accrued Liability Funds totaling approximately $17.3 million will continue to be deferred.

Unfunded Requests and Future Considerations
Due to limited ongoing revenues, several priority needs were not included in the FY27 Proposed Budget and remain subject to future Council consideration if additional recurring resources become available. The following items are identified:

1. Restore negative fund balance in the ISFs.

2. Restore public safety positions.

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3. Address deferred maintenance.

4. Expansion of Fire Prevention staffing model to address increased inspection, plan review, and compliance workload.

5. Restore community programs and events.

6. Implementation of a body-worn camera program for the Code Enforcement Division to enhance transparency, accountability, and staff safety.

7. Restoration of the Historic Preservation Planner position to support planning, development review, and preservation efforts.

8. Additional administrative support within the City Manager’s Office, City Clerk’s Office, and Finance Department to address increasing operational demands and workload.

These unfunded items may be revisited as part of future budget cycles, with priority given to those that support public safety, regulatory compliance, and core service delivery.

General Fund Balance
The proposed FY27 General Fund budget includes approximately $153.7 million in operating revenues, excluding transfers, and approximately $161.1 million in operating expenditures, including debt service, resulting in an operating deficit of approximately $7.4 million. After accounting for transfers out of approximately $9.6 million and one-time transfers in of $17.0 million from the EMT, CIP, and Equipment Replacement Funds, the budget is projected to close with a nominal net surplus of approximately $5,400. While this approach balances the FY27 budget on paper, it relies on onetime resources and does not fully resolve the City’s underlying structural imbalance.

The Fiscal Management Policies adopted by the City Council on August 12, 2025 recommend maintaining a catastrophic reserve of 20% of General Fund operating expenditures for FY27.

However, given the fiscal challenges outlined in this report, staff recommends maintaining the reserve at 18% for FY27, with the intent to revisit a phased return to 20% in future years as the City’s financial condition improves. At the 18% level, the catastrophic reserve is projected to total approximately $25.8 million, leaving an estimated undesignated General Fund balance of approximately $717,000 as of June 30, 2027. Table 3 highlights the proposed fund balance for the General Fund.

Table 3: Proposed Fund Balance for the General Fund
FY26 YearEnd EstimateFY27 Proposed Variance to YE
Estimate
%
Change
Operating Revenues 153,826,935 153,686,300 -140,635 -0.1% Total Revenues 153,826,935 153,686,300 -140,635 -0.1%
Operating Expenditures 141,403,713 143,221,000 1,817,287 1.3% Debt Service 17,515,954 17,905,400 389,446 2.2%
Total Expenditures 158,919,667 161,126,400 2,206,733 1.4% Operating Surplus/
(Deficit)
-5,092,732 -7,440,100 -2,347,368
Transfers-In 4,485,252 -4,485,252 -100.0%
Transfer In - Fund 225
EMT
- 3,700,000 3,700,000
Transfer In - Fund 500 CIP - 10,000,000 10,000,000
Transfer In - Fund 790
Equipment Replacement
- 3,300,000 3,300,000
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Debt Service 17,515,954 17,905,400 389,446 2.2%
Total Expenditures 158,919,667 161,126,400 2,206,733 1.4% Operating Surplus/
(Deficit)
-5,092,732 -7,440,100 -2,347,368
Transfers-In 4,485,252 -4,485,252 -100.0%
Transfer In - Fund 225
EMT
- 3,700,000 3,700,000
Transfer In - Fund 500 CIP - 10,000,000 10,000,000
Transfer In - Fund 790
Equipment Replacement
- 3,300,000 3,300,000
Transfers Out -1,455,252 -9,554,500 -8,099,248 556.6%
Net Surplus/(Deficit) -2,062,732 5,400 2,068,132
Estimated Beginning Fund
Balance - 7/1/2026
28,553,721 26,490,989 -2,062,732 -7.2%
Estimated Ending Fund
Balance - 6/30/2027
26,490,989 26,496,389 5,400 -0.0%
Catastrophic Reserve 25,452,668 25,779,780 327,112 1.3% Estimated Undesignated
Fund Balance - 6/30/2027
1,038,321 716,609 -321,712 -31.0%
Overall, the FY27 Proposed Budget reflects a continued effort to reduce operating expenditures, align ongoing costs with available revenues, and preserve the City’s core service priorities. However, recurring General Fund revenues remain insufficient to fully support recurring operating costs, debt service obligations, and long-term internal service fund needs. As proposed, the FY27 budget relies on one-time transfers from other available fund balances to close the remaining gap. Staff will continue to monitor revenue performance, expenditure trends, and policy options in order to improve long-term structural balance and fiscal sustainability.

Staff is seeking City Council direction on the proposed FY27 budget. Directions received tonight will be included in the Preliminary Budget.

The next study session is tentatively scheduled April 14th and will focus on the City’s Capital Improvement Program. Staff will incorporate the City Council’s directions and feedback received from both study sessions in the FY27 Preliminary Budget for review during a regular City Council meeting in May.

7. ATTACHMENTS
· None
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Agenda Item
Orange City Council
Item #: 6.1. 4/14/2026 File #: 26-0198
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Trang Nguyen, Finance Director

1. SUBJECT
Second Budget Study Session for the Proposed Fiscal Year 2026-27 Budget

2. SUMMARY
This is the second budget study session in support of the preparation of the Fiscal Year 2026-27 Budget. The purpose of this study session is to present the draft Five-Year Capital Improvement Plan for the period of Fiscal Year 2026-27 through Fiscal Year 2030-31.

3. RECOMMENDED ACTION

1. Review and discuss the proposed Fiscal Year 2026-27 Capital Improvement Project Budget.

2. Provide direction to staff regarding preparation of the Five-Year Capital Improvement Plan for the period of Fiscal Year 2026-27 through Fiscal Year 2030-31.

4. FISCAL IMPACT
The proposed FY27 Capital Improvement Project Budget totals approximately $35.7 million across various funds. Final appropriations and funding allocations will be determined as part of the City Council’s adoption of the Fiscal Year 2026-27 Budget.

5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability

6. DISCUSSION AND BACKGROUND
This is the second budget study session in support of the preparation of the City’s Fiscal Year 2026- 27 (FY27) Budget, with a focus on the Five-Year Capital Improvement Plan (CIP) for the period of Fiscal Year 2026-27 through Fiscal Year 2030-31.

The FY27 Five-Year CIP serves as both a comprehensive budget document and a strategic planning tool used to identify the City’s capital infrastructure needs, prioritize projects, and determine available funding sources. Funding for the CIP is derived from a variety of sources, including transportation funds, grants, reimbursement agreements, utility funds, and long-term financing.

Despite ongoing budgetary challenges, the City continues to advance critical capital infrastructure improvements for residents and businesses. The proposed FY27 CIP reflects a focused prioritization strategy that emphasizes safety, regulatory compliance, asset preservation, and projects that City of Orange Page 1 of 6 Printed on 4/9/2026
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leverage outside funding, while deferring lower-priority General Fund-supported work.

Overall, the FY27 Five-Year CIP proposes 69 projects over the five-year planning period. Of those, 54 projects are proposed for funding in FY27, while 13 are anticipated to begin in future years. In addition, 24 previously approved projects will continue into FY27 with no new funding requested.

Under this proposed plan, the City Council would invest approximately $35.7 million in the upcoming fiscal year and approximately $140.4 million across various funds over the five-year planning period, in addition to project appropriations that will be carried over from the current fiscal year. To help address the City’s structural operating deficit, approximately $7.2 million in capital projects is recommended for deferral in FY27.

As in previous years, the CIP will be funded through several sources in FY27. Chart 1 below summarizes the proposed FY27 CIP budget by fund.

Chart 1: FY27 Proposed CIP by Fund Type
Five-Year Capital Improvement Plan
The following are highlights of selected projects included in the FY27 Five-Year CIP.

Playground Equipment Replacement (267037)
This recurring program addresses the replacement of aging playground structures at City parks that are reaching or have exceeded their typical 8-12 year service life. Although the equipment continues to be maintained for safety compliance, many structures exhibit signs of wear and are due for full replacement.

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Based on a systemwide assessment of playground conditions, staff has developed an inventory to guide annual replacement priorities. The list of park playgrounds will be reviewed and prioritized by the Park Planning and Community Events Commission, taking into consideration community needs and available funding. Improvements will include new accessible play equipment and shade sails at select parks where they are currently absent.

The proposed FY27 budget for this project is $800,000. Staff will also continue to pursue supplemental funding opportunities, including federal grant funding, to support project implementation.

Rampart Street Park (367005)
The City has secured an operating agreement with Orange County Public Works for two parcels managed by the Orange County Flood Control District (OCFCD) along the Santa Ana River. This project addresses the smaller of the two parcels, approximately one acre in size, located north of W.

Chapman Avenue between the Santa Ana River Trail and Rampart Street, adjacent to the 57 Freeway.

A conceptual design for the park has been completed and includes a proposed walking path, seating areas, landscaping, a dog amenity area, and a water bottle filling station, while preserving the existing mature shade trees. Staff anticipates releasing a request for proposals in late spring or early summer 2026 to retain a qualified design firm to conduct public outreach, complete final design, and prepare engineering documents.

Additional funding is proposed in FY27 to support completion of the project. The total proposed project budget, inclusive of design and construction, is $1,510,000.

Pavement Management Program
The Pavement Management Program coordinates the comprehensive maintenance needs of the City’s roadway system. Maintenance strategies include asphalt resurfacing, slurry seal, and reconstruction, as needed. Approximately $8.7 million is proposed in FY27 for this program.

Based on the City’s Pavement Management Plan, an annual investment of approximately $10 million is needed to prevent further long-term deterioration of the roadway network. The program is funded through Measure M2, Gas Tax, Capital Projects, and Road Maintenance Rehabilitation Account funds.

Water Projects
A total of $6.5 million is proposed in FY27 for water infrastructure improvements to maintain and enhance the City’s water production and distribution systems. This includes approximately $2.0 million for pipeline replacement, which will fund the design and construction of water mainline replacements throughout the City’s water system.

An additional $2.8 million is proposed for the drilling of a new water production well. The new well is designed to produce approximately 3,000 gallons per minute and significantly enhance the City’s groundwater production capacity.

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Sewer Projects
Approximately $3.5 million is proposed in FY27 for the Sewer Replacement Program to maintain and improve the City’s sewer network through the design and construction of sewer mainline replacements.

Approximately one mile of pipeline is targeted for replacement annually due to increasing age, substandard sizing, corrosion, or high maintenance needs. In FY27, the program will focus on locations such as Grand Street, Glassell Street, Center Street, Culver Avenue, Olive Street, and Maple Avenue.

Capital Projects Fund (500)
Historically, the General Fund has been the primary funding source for the Capital Projects Fund (500), supporting reinvestment in the City’s aging facilities and infrastructure. However, ongoing budgetary constraints and the City’s structural operating deficit have significantly limited the City’s ability to continue making General Fund contributions to this fund. As a result, several needed projects have been deferred, including some involving assets in poor condition.

The proposed FY27 CIP therefore prioritizes projects that can no longer be delayed due to safety concerns, operational necessity, or partial grant funding. For Council consideration, approximately $4.8 million in projects is proposed in FY27, including the following:

1. Elevator Replacement - Police Headquarters and Corporation Yard Buildings 1 and 2 - $520,000

2. Fleet Facilities - HVAC Installation and Interior Painting - $575,000

3. Police Headquarters - Vehicle Gate System Replacement - $90,000

4. Fleet Facilities - Corporation Yard Roll-Up Door Replacement - $270,000

5. Corporation Yard Renovations (Property Wall Completion and Storage Bunkers) - $670,000

6. Quiet Zone/Railroad Crossing Safety - $50,000

7. Streetlight Pole Replacement - $470,000

8. Pavement Management Program - $2,000,000

9. Minor Traffic Control Devices - $200,000
Deferred Projects
To align the FY27 CIP with available resources, several General Fund-supported facility and infrastructure projects continue to be deferred and are not included in the FY27 CIP.

These deferrals do not reflect a lack of need; rather, they represent a necessary prioritization of limited funding toward more urgent operational, safety-related, and externally leveraged capital needs. These projects are listed in Table 1 below.

Table 1: FY27 Deferred and/or Discontinued Projects
Project/Effort Fund Amount
Deferred/
Reduced
Notes
Facilities Condition Assessment Capital
Projects Fund
(500)
$100,000 Deferred
City Hall Roof Replacement Capital
Projects Fund
(500)
$1,350,000 Deferred
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Project/Effort Fund Amount
Deferred/
Reduced
Notes
Facilities Condition Assessment Capital
Projects Fund
(500)
$100,000 Deferred
City Hall Roof Replacement Capital
Projects Fund
(500)
$1,350,000 Deferred
Fire Station 7 - Roof Underlayment
Replacement
Capital
Projects Fund
(500)
$285,000 Deferred
Fire Station 8 - Exterior Paint and Roof
Replacement
Capital
Projects Fund
(500)
$285,000 Deferred
Main Library Gutter Replacement Capital
Projects Fund
(500)
$200,000 Deferred
Community Services Building Roof
Replacement
Capital
Projects Fund
(500)
$350,000 Deferred
City Hall Landscape Renovation Capital
Projects Fund
(500)
$310,000 Deferred
City Hall Elastomeric Roof Coating
Renewal
Capital
Projects Fund
(500)
$200,000 Deferred
Fire Station 5 Workout Room Addition Capital
Projects Fund
(500)
$517,000 Deferred
Fire Station 2 Remodel Capital
Projects Fund
(500)
$1,140,000 Deferred
Fire Station 3 Building Addition Capital
Projects Fund
(500)
$2,500,000 Partially
Funded
Total Deferred $7,237,000
Conclusion
The Proposed FY27 CIP Budget and Five-Year CIP reflect the City’s continued effort to balance critical infrastructure investment with the realities of an ongoing structural operating deficit. The proposed program prioritizes projects that support public safety, regulatory compliance, operational continuity, and long-term asset preservation, while deferring lower-priority projects until fiscal conditions improve.

Over the next two months, staff will continue refining both the operating and capital budgets for City of Orange Page 5 of 6 Printed on 4/9/2026
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preliminary review in May 2026 and final adoption in June 2026.

7. ATTACHMENTS
· Attachment A - FY27 Five Year CIP by Department
· Attachment B - FY27 Five Year CIP by Fund
· Attachment C - FY27 Five Year CIP by Project
· Attachment D - Fund Description Listing
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Agenda Item
Orange City Council
Item #: 10.2. 5/26/2026 File #: 26-0304
TO: Honorable Mayor and Members of the City Council
FROM: Jarad Hildenbrand, City Manager

1. SUBJECT
Review and discuss draft resolutions and ordinance documents relating to a proposed 1¢ Sales Tax Measure, Transient Occupancy Tax Measure, and The Contract with Orange

2. SUMMARY
On May 12, 2026, the Orange City Council evaluated several revenue measures. After hearing public input and discussing each revenue option, the City Council directed City staff to bring back the necessary documents for a 1¢ Sales Tax Measure and a Transient Occupancy Tax Measure.

Additionally, the City Council directed staff to develop The Contract with Orange, a formal declaration that memorializes and reaffirms the City’s commitment to prudent financial practices. The purpose of this item is to review the draft documents and provide direction to City staff.

3. RECOMMENDED ACTION

1. Review and discuss the draft resolutions and ordinances for the proposed 1¢ Sales Tax Measure and Transient Occupancy Tax Measure.

2. Provide direction to staff.

4. FISCAL IMPACT
None. However, the estimated annual revenue for a 1¢ sales tax measure is $37 million and each 1% increase to the transient occupancy tax is estimated to generate an additional $600,000 annually.

5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability.

6. DISCUSSION AND BACKGROUND
Over the past several years, the City has implemented operational efficiencies, evaluated service delivery models, reduced expenditures where feasible, and proactively addressed long-term liabilities. Despite these efforts, long-term fiscal pressures remain. As the City of Orange continues to evaluate long-term fiscal sustainability challenges caused by increasing costs for labor, materials, contractual services, and infrastructure needs, the City Council considered several revenue measures at the May 12, 2026, City Council meeting. These revenue measures included:
· Sales Tax Increase
· Transient Occupancy Tax Increase
· Utility User Tax
· Vacant Property Tax
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· Cannabis Gross Sales Tax
· Parking Operator Tax
· Documentary Transfer Tax
· Evaluate selling the City’s water and sewer utility; and · Business License Modernization
After hearing public input and individually discussing each revenue measure, the City Council directed staff to:

A. Develop the draft resolution and ordinance documents for a transient occupancy tax increase.

B. Develop the draft resolution and ordinance documents for a sales tax increase.

C. Engage a third-party entity to assess the value of City-owned assets.

D. Begin the process of modernizing the City’s business license program for future City Council consideration (Note: Given the time to evaluate and recommend appropriate changes to the City’s business license program, any potential ballot measure will be after the November 2026 election).

E. Evaluate and develop draft commercial cannabis program options for future City Council consideration.

The following analysis focuses on items A and B. Staff will present items C-E at a future City Council meeting.

Transient Occupancy Tax
A Transient Occupancy Tax (TOT) is commonly referred to as a “hotel tax” or “bed tax.” It is imposed on guests staying at hotels, motels, or similar accommodations for less than 30 days. The tax is collected and remitted to the City by the hotel, motel, or similar accommodation operators (Operators).

Proposed Rate, Structure, Duration, and Annual Estimate Pursuant to City Council direction on May 12, 2026, the proposed resolution and ordinance (subject to Orange-voter approval) would increase the TOT rate from the existing 10% to 15% for all Operators with more than 10 rooms. Operators with 10 rooms or less would continue to be subject to the 10% TOT rate. This structure is intended to focus the increase on larger lodging operators while minimizing impacts on smaller operators. Additionally, staff is proposing language that would expand the definition of Operators to include online and other travel companies, thereby expanding the TOT’s application to when a room is booked online.

In separating the 10% and 15% TOT rates for different Operators, the City estimates this revenue measure would generate $3,000,000 annually. However, estimates may vary especially if language expanding the TOT to online and other travel companies is approved by Orange voters. A recent example of this type of TOT expansion occurred in Anaheim with Measure J. Anaheim voters approved Measure J in November 2022, and recent Anaheim budget documents indicate Measure J generated revenues above initial projections. Although Anaheim has more Operators within its boundaries (thereby leading to more online bookings), expanding and modernizing the City’s current City of Orange Page 2 of 4 Printed on 5/21/2026
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TOT language could generate additional revenue.

Lastly, as written, this measure would remain in effect unless amended or repealed by Orange voters.

Request for City Council Direction
Staff are presenting resolution and ordinance documents necessary to place the proposed TOT measure on the November 2026 ballot. Resolution No. 11690 details the proposed ballot question and full ordinance that Orange voters will consider if the City Council voted to place the item on the ballot. Resolution No. 11691 details the process of filing written arguments for or against the measure.

Staff requests City Council feedback and direction on these documents before they are finalized for a formal vote at a future City Council meeting.

Transactions and Use Tax (Sales Tax) Measure
A Transactions and Use Tax would impose an additional local sales tax on the purchase of tangible goods within the City of Orange. Assuming a 1% increase, this measure would add 1¢ to every $1.00 spent on taxable goods.

This tax differs from the City’s existing base 1% Bradley-Burns local sales tax where the allocation is primarily based on the place of sale. By contrast, a voter-approved District Tax (Transactions and Use Tax) is largely destination-based, meaning the revenue generally flows to the jurisdiction where the purchased goods are delivered, shipped, or put into use.

Proposed Rate, Structure, Duration, and Annual Estimate Pursuant to City Council direction, the draft resolutions and ordinance propose a 1% (1¢) sales tax increase. While the City Council discussed the possibility of submitting a duration of 10 or 20 years, an exact term has not been clearly identified; therefore, the term section is left blank. If a 1¢ measure is submitted to the voters and approved, it is estimated this measure will generate $37 million annually.

Request for City Council Direction
Staff are presenting resolution and ordinance documents necessary to place the proposed 1¢ sales tax measure on the November 2026 ballot. Resolution No. 11670 details the proposed ballot question and full ordinance that Orange voters will consider if the City Council voted to place the item on the ballot. Resolution No. 11672 details the process of filing written arguments for or against the measure.

Staff requests City Council feedback and direction on these documents, and in particular, the proposed duration, before they are finalized for future City Council consideration.

The Contract with Orange
At the May 12, 2026, City Council meeting, the City Council directed staff to develop The Contract with Orange to reaffirm the City’s commitment to responsible financial stewardship. The Contract with Orange is within City Council Resolution No. 11689. It includes nine sections that detail spending priorities with existing or new Orange Community-approved revenues. These priorities include:

1. Preserve Public Safety
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2. Independent Citizens’ Oversight Committee

3. Annual Public Transparency Reports

4. Infrastructure Improvement Guarantee

5. Fiscal Responsibility and Balanced Budgeting

6. Pension and Other Post-Employment Benefits Liability Reduction and Long-Term Sustainability

7. Continued Operational Efficiency

8. Economic Vitality Support

9. Measurable Performance Standards.

The Contract with Orange builds upon the Fiscal Years 2025-2030 Citywide Strategic Plan (Plan) and adopted Citywide Financial Management Policies. By coalescing the key tenets of both documents into The Contract with Orange, the City will be adopting one actionable contract with the Orange Community that reaffirms the City’s commitment to local control, fiscal sustainability, and exceptional service delivery.

7. ATTACHMENTS
· Attachment 1 - Resolution No. 11670
· Attachment 2 - Resolution No. 11672
· Attachment 3 - Resolution No. 11690
· Attachment 4 - Resolution No. 11691
· Attachment 5 - Resolution No. 11674
· Attachment 6 - Resolution No. 11689
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Agenda Item
Orange City Council
Item #: 10.2. 5/26/2026 File #: 26-0304
TO: Honorable Mayor and Members of the City Council
FROM: Jarad Hildenbrand, City Manager

1. SUBJECT
Review and discuss draft resolutions and ordinance documents relating to a 1¢ Sales Tax Measure, Transient Occupancy Tax Measure, and The Contract with Orange

3. RECOMMENDED ACTION

1. Review and discuss the draft resolutions and ordinances for the proposed 1¢ Sales Tax Measure and Transient Occupancy Tax Measure.

2. Provide direction to staff.

5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability.

6. DISCUSSION AND BACKGROUND
Over the past several years, the City has implemented operational efficiencies, evaluated service delivery models, reduced expenditures where feasible, and proactively addressed long-term liabilities. Despite these efforts, long-term fiscal pressures remain. As the City of Orange continues to evaluate long-term fiscal sustainability challenges caused by increasing costs for labor, materials, contractual services, and infrastructure needs, the City Council considered several revenue measures at the May 12, 2026, City Council meeting. These revenue measures included:
· Sales Tax Increase
· Transient Occupancy Tax Increase
· Utility User Tax
· Vacant Property Tax
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· Cannabis Gross Sales Tax
· Parking Operator Tax
· Documentary Transfer Tax
· Evaluate selling the City’s water and sewer utility; and · Business License Modernization
After hearing public input and individually discussing each revenue measure, the City Council directed staff to:

A. Develop the draft resolution and ordinance documents for a transient occupancy tax increase.

B. Develop the draft resolution and ordinance documents for a sales tax increase.

C. Engage a third-party entity to assess the value of City-owned assets.

E. Evaluate and develop draft commercial cannabis program options for future City Council consideration.

The following analysis focuses on items A and B. Staff will present items C-E at a future City Council meeting.

In separating the 10% and 15% TOT rates for different Operators, the City estimates this revenue measure would generate $3,000,000 annually. However, estimates may vary especially if language expanding the TOT to online and other travel companies is approved by Orange voters. A recent example of this type of TOT expansion occurred in Anaheim with Measure J. Anaheim voters approved Measure J in November 2022, and recent Anaheim budget documents indicate Measure J generated revenues above initial projections. Although Anaheim has more Operators within its boundaries (thereby leading to more online bookings), expanding and modernizing the City’s current City of Orange Page 2 of 4 Printed on 5/21/2026
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TOT language could generate additional revenue.

Lastly, as written, this measure would remain in effect unless amended or repealed by Orange voters.

Staff requests City Council feedback and direction on these documents before they are finalized for a formal vote at a future City Council meeting.

Staff requests City Council feedback and direction on these documents, and in particular, the proposed duration, before they are finalized for future City Council consideration.

1. Preserve Public Safety
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2. Independent Citizens’ Oversight Committee

3. Annual Public Transparency Reports

4. Infrastructure Improvement Guarantee

5. Fiscal Responsibility and Balanced Budgeting

6. Pension and Other Post-Employment Benefits Liability Reduction and Long-Term Sustainability

7. Continued Operational Efficiency

8. Economic Vitality Support

9. Measurable Performance Standards.

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF ORANGE ORDERING THE SUBMISSION

TO THE VOTERS A QUESTION RELATING TO A

LOCAL GENERAL TRANSACTIONS AND USE TAX
(SALES TAX) AT THE NOVEMBER 3, 2026,

GENERAL MUNICIPAL ELECTION AS CALLED BY
RESOLUTION NO. 11669
WHEREAS, the City of Orange (“City”) provides a full range of municipal services, including police, fire, emergency response, infrastructure maintenance, community and library services, which support the public health, safety, and welfare of residents and businesses; and WHEREAS, the City faces ongoing fiscal demands, including significant unfunded infrastructure and capital improvement needs, as well as increasing costs to maintain existing service levels; and
WHEREAS, maintaining reliable funding for essential City services, including public safety, emergency response, infrastructure, and community programs, is necessary to preserve the quality of life in the City and support continued economic stability; and WHEREAS, Sections 37100.5 and 37101 of the California Government Code acknowledges a city’s authority to levy a sales tax; and WHEREAS, pursuant to California Revenue and Taxation Code Section 7285.9, the City may levy a general transactions and use tax (sales tax), upon a two-thirds vote of the City Council and a majority vote of its qualified voters; and
WHEREAS, on May 26, 2026, the City Council adopted Resolution No. 11669 calling a General Municipal Election on Tuesday, November 3, 2026, and WHEREAS, on May 26, 2026, the City Council also adopted Resolution No. 11673 requesting that the County of Orange Board of Supervisors consolidate the General Municipal Election with the Statewide General Election to be held on November 3, 2026, and permit the Registrar of Voters to perform certain services in conjunction with the City’s election; and WHEREAS, the City Council also desires to submit to the voters at the election a question relating to the adoption of a proposed ordinance enacting a general transactions and use tax (sales tax), the proceeds of which would be available for general governmental purposes; and WHEREAS, the proposed measure would increase the sales tax rate within the City by one percent (1.00%), which is equivalent to one cent ($0.01) for every one dollar ($1.00) spent on taxable goods; and
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2 WHEREAS, the proposed tax would apply to the sale of tangible personal property subject to taxation under state law and would not apply to items that are exempt from sales tax under California law, including groceries and prescription medicine.

NOW, THEREFORE, the City Council of the City of Orange does hereby resolve, declare, determine and order as follows:

SECTION l. That the above recitals are true and correct and incorporated herein.

SECTION 2. That the City Council, pursuant to its right and authority, does order submitted to the voters at the General Municipal Election to be held on November 3, 2026, the following question:

City of Orange Public Safety/Essential Services Measure To maintain City of Orange’s quality of life, such as 9-1-1 response; maintaining police/fire protection; preventing crimes/thefts; retaining/attracting well-trained police officers/firefighters; keeping public parks safe/clean; addressing homelessness; wildfire protection/prevention; repairing streets/potholes; critical infrastructure improvements; shall a measure establishing a 1¢ sales tax, providing approximately $37,000,000 annually for general revenue/government purposes, until ended by voters or expiring after XX years, with independent oversight committee, all funds benefiting Orange residents, be adopted?
YES
NO
SECTION 3. That the proposed complete text of the ordinance submitted to the voters is attached as Exhibit A.

SECTION 4. That the vote requirement for the measure to pass is a majority (50%+1) of the votes cast.

SECTION 5. In all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding municipal elections.

SECTION 6. Notice of the time and place of holding the election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in the time, form and manner as required by law.

SECTION 7. The City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

ADOPTED this ______ day of ________________________ 2026.

Daniel R. Slater, Mayor, City of Orange
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3 ATTEST:

Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney,
City of Orange
Attachment: Exhibit A

STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.

CITY OF ORANGE )
I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Resolution was duly and regularly adopted by the City Council of the City of Orange at a regular meeting thereof held on the day of , 2026 by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
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[PROPOSED] ORDINANCE NO. 03-26

AN ORDINANCE OF THE PEOPLE OF THE CITY
OF ORANGE, ADDING CHAPTER 3.23 TO TITLE
3 OF THE ORANGE MUNICIPAL CODE
IMPOSING 1 CENT GENERAL TRANSACTIONS

AND USE TAX (SALES TAX) FOR GENERAL

GOVERNMENTAL USE TO BE ADMINISTERED

BY THE CALIFORNIA DEPARTMENT OF TAX

AND FEE ADMINISTRATION
WHEREAS, Article XIII C, section 2(b) of the California Constitution provides that any general tax imposed, extended, or increased by the City Council shall not take effect until it is submitted to the electorate and approved by a majority of voters in a regularly scheduled general election in which members of the City Council are also up for election or reelection; and WHEREAS, this Ordinance shall only take effect following its approval by a majority of City voters in the election to be held on November 3, 2026.

NOW, THEREFORE, THE PEOPLE OF THE CITY OF ORANGE DO ORDAIN AS FOLLOWS:

SECTION I:

Chapter 3.23 is hereby added to Title 3 of the Orange Municipal Code to read as follows:

Chapter 3.23 – Transactions and Use Tax

3.23.010 – Title
This ordinance shall be known as the “Orange Transactions and Use Tax Ordinance.” The City of Orange shall be hereinafter referred to as the “City.” This ordinance shall apply in the incorporated territory of the City.

3.23.020 – Operative Date
“Operative Date” means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance.

3.23.030 – Purpose
This ordinance is adopted to achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes:
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2 A. To impose a general transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2, which authorizes the City to adopt this tax ordinance which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose.

B. To adopt a general transactions and use tax ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code.

C. To adopt a general transactions and use tax ordinance that imposes a tax and provides a measure therefore that can be administered and collected by the California Department of Tax and Fee Administration in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes.

D. To adopt a general transactions and use tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions and use taxes, and at the same time, minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance.

3.23.040 – Contract with State
Prior to the operative date, the City shall contract with the California Department of Tax and Fee Administration to perform all functions incident to the administration and operation of this transactions and use tax ordinance; provided, that if the City shall not have contracted with the California Department of Tax and Fee Administration prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract.

3.23.050 – Transactions Tax Rate
For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of 1% of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance.

3.23.060 – Place of Sale
For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an outof-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state 2234
3 sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the California Department of Tax and Fee Administration.

3.23.070 – Use Tax Rate
An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of 1% of the sales price of the property.

The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.

3.23.080 – Adoption of Provisions of State Law
Except as otherwise provided in this ordinance and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein.

3.23.090 – Limitations on Adoption of State Law and Collection of Use Taxes In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:

A. Wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted therefor. However, the substitution shall not be made when:

1. The word “State” is used as a part of the title of the State Controller, State Treasurer, State Treasury, or the Constitution of the State of California.

2. The result of that substitution would require action to be taken by or against this City or any agency, officer, or employee thereof rather than by or against the California Department of Tax and Fee Administration, in performing the functions incident to the administration or operation of this Ordinance.

3. In those sections, including but not necessarily limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to:
(a) Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or;
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4 (b) Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code.

4. In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code.

B. The word “City” shall be substituted for the word “State” in the phrase “retailer engaged in business in this State” in Section 6203 and in the definition of that phrase in Section 6203.

1. “A retailer engaged in business in the District” shall also include any retailer that, in the preceding calendar year or the current calendar year, has total combined sales of tangible personal property in this state or for delivery in the State by the retailer and all persons related to the retailer that exceeds five hundred thousand dollars ($500,000). For purposes of this section, a person is related to another person if both persons are related to each other pursuant to Section 267(b) of Title 26 of the United States Code and the regulations thereunder.

3.23.100 – Permit Not Required
If a seller’s permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor’s permit shall not be required by this ordinance.

3.23.110 – Exemptions and Exclusions
A. There shall be excluded from the measure of the transactions tax and the use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or the amount of any state-administered transactions or use tax.

B. There are exempted from the computation of the amount of transactions tax the gross receipts from:

1. Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government.

2. Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his or her agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point.

For the purposes of this paragraph, delivery to a point outside the City shall be satisfied:
(a) With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle 2236
5 Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out-of-City address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and (b) With respect to commercial vehicles, by registration to a place of business out-ofCity and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address.

3. The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.

4. A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of this ordinance.

5. For the purposes of subparagraphs (3) and (4) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.

C. There are exempted from the use tax imposed by this ordinance, the storage, use or other consumption in this City of tangible personal property:

1. The gross receipts from the sale of which have been subject to a transactions tax under any state-administered transactions and use tax ordinance.

2. Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California.

3. If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.

4. If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of this ordinance. 2237
6 5. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.

6. Except as provided in subparagraph (7), a retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the City or participates within the City in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer.

7. “A retailer engaged in business in the City” shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City.

D. Any person subject to use tax under this ordinance may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for, a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax.

3.23.120 – Term
The tax imposed by this ordinance shall be effective upon adoption and remain in effect for XX years or otherwise altered by a majority of the City’s voters.

3.23.130 – Amendments
All amendments subsequent to the effective date of this ordinance to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part

1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this ordinance, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this ordinance.
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7 3.23.140 – Independent Oversight
A. An Independent Oversight Committee will be created to provide oversight and review of the expenditure of revenues generated by the tax imposed by this chapter and to make recommendations to the City Council regarding those expenditures. The Independent Oversight Committee shall meet publicly on a quarterly basis to:

1. Review all revenues and expenditures of the transactions and use tax imposed by this chapter.

2. Review and make recommendations to the City Council regarding plans for expenditures of the transactions and use tax imposed by this chapter

3. Review annual audit reports related to the tax

4. Make determinations as necessary and appropriate regarding City compliance with the requirements of this chapter.

5. Make at least one written annual report regarding findings to the City Council at a public meeting.

B. The Brown Act shall apply to meetings of the Independent Citizens’ Oversight Committee.

C. Members of the committee will be appointed by the City Council to four-year terms, consisting of each of the following:

1. One residing member from each City Council voting district.

2. One at-large residing member selected by the Mayor.

3. City Treasurer.

4. One member active in a business organization representing the City’s business community.

5. One member active in a bona fide taxpayers’ association.

6. One member active in a bona fide non-profit located within the City.

7. One resident member who is the parent or guardian of a child enrolled in a public, private, or charter school located within the City.

3.23.150 – Audit and Review
The proceeds of the tax imposed by this ordinance, as well as the expenditure thereof, shall be audited annually by an independent accounting firm. The City Council shall discuss the results of 2239
8 such audit at a meeting of the City Council that is open to the public. The report of such audit shall be posted on the City’s website.

3.23.160 – Enjoining Collection Forbidden
No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or the City, or against any officer of the State or the City, to prevent or enjoin the collection under this ordinance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected.

3.23.170 – Severability
If any provision of this chapter or the application thereof to any person or circumstance is held invalid, the remainder of the chapter and the application of such provision to other persons or circumstances shall not be affected thereby.

SECTION II:

The adoption of this Ordinance is exempt from the California Environmental Quality Act (CEQA), Public Resources Code section 21000 et seq. and California Code of Regulations, title 14, section 15000 et seq. (CEQA Guidelines). The general transactions and use tax this Ordinance adopts is a government funding mechanism that does not “involve any commitment to any specific project which may result in a potentially significant physical impact on the environment,” and thus it is not a project under CEQA Guidelines section 15378(b)(4).

SECTION III:

SECTION IV:

Pursuant to California Elections Code Section 9222, this ordinance shall take effect only if approved by a majority of the eligible voters of the City of Orange voting at a General Municipal Election to be held on November 3, 2026. It shall be deemed adopted when the City Council has certified the results of that election by resolution and shall take effect ten (10) days thereafter. 2240
9 SECTION V:

The Mayor and City Clerk are hereby authorized to attest to the adoption of this Ordinance by the People voting thereon on November 3, 2026, by signing where indicated below.

The foregoing ordinance was PASSED, APPROVED AND ADOPTED by the People of the City of Orange voting on November 3, 2026, which vote was certified by the City Council on this ____ day of ___________________, 2026.

Daniel R. Slater, Mayor, City of Orange
ATTEST:

Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney,
City of Orange
2241
RESOLUTION NO. 11672

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF ORANGE SETTING PRIORITIES FOR

FILING WRITTEN ARGUMENTS REGARDING A

CITY MEASURE AND DIRECTING THE CITY

ATTORNEY TO PREPARE AN IMPARITAL

ANALYSIS FOR THE MEASURE TO BE

SUBMITTED TO THE VOTERS AT THE GENERAL

MUNICIPAL ELECTION HELD ON TUESDAY,
NOVEMBER 3, 2026
WHEREAS, a General Municipal Election is to be held in the City of Orange, California, on Tuesday, November 3, 2026, at which there will be submitted to the voters the following measure (hereafter, the “Measure”):

City of Orange Public Safety/Essential Services Measure To maintain City of Orange’s quality of life, such as 9-1-1 response; maintaining police/fire protection; preventing crimes/thefts; retaining/attracting well-trained police officers/firefighters; keeping public parks safe/clean; addressing homelessness; wildfire protection/prevention; repairing streets/potholes; critical infrastructure improvements; shall a measure establishing a 1¢ sales tax, providing approximately $37,000,000 annually for general revenue/government purposes, until ended by voters or expiring after XX years, with independent oversight committee, all funds benefiting Orange residents, be adopted?
YES
NO
NOW, THEREFORE, the City Council of the City of Orange does hereby resolve, declare, determine and order as follows:

SECTION 1. The City Council authorizes the following member(s) of its body (Councilmember In Favor) or (Councilmember Against)
(Councilmember In Favor) or (Councilmember Against)
(Councilmember In Favor) or (Councilmember Against)
(Councilmember In Favor) or (Councilmember Against)
(Councilmember In Favor) or (Councilmember Against)
(Councilmember In Favor) or (Councilmember Against)
(Councilmember In Favor) or (Councilmember Against)
to file written arguments not exceeding 300 words regarding the City Measure as specified above, accompanied by the printed names and signatures of the authors submitting it, in accordance with 2242
2 Article 4, Chapter 3, Division 9 of the Elections Code of the State of California. The arguments may be changed or withdrawn until and including the date fixed by the City Clerk after which no arguments for or against the City Measure may be submitted to the City Clerk.

SECTION 2. The argument(s) shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. The arguments shall be accompanied by the Form of Statement to be Filed by Author(s) of Argument as provided for in California Elections Code Section 9600.

SECTION 3. The City Clerk is directed to transmit a copy of the Measure to the City Attorney unless the organization or salaries of the office of the City Attorney are affected. In accordance with Elections Code Section 9280, the City Attorney is hereby directed as follows:
a. The City Attorney shall prepare an impartial analysis of the measure not exceeding 500 words showing the effect of the measure on the existing law and the operation of the measure. If the measure affects the organization or salaries of the office of the City Attorney, the City Clerk shall prepare the impartial analysis. b. The analysis shall include a statement indicating whether the measure was placed on the ballot by a petition signed by the requisite number of voters or by the governing body of the City.
c. In the event the entire text of the measure is not printed on the ballot, nor in the voter information portion of the voter information guide, there shall be printed immediately below the impartial analysis, in no less than 10-point type, the following: “The above statement is an impartial analysis of Measure ____. If you desire a copy of the ordinance or measure, please call the election official’s office at (714) 744-5500 and a copy will be mailed at no cost to you.”
d. The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments.

SECTION 4. The City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

ADOPTED this ______ day of ____________________ 2026.

Daniel R. Slater, Mayor, City of Orange
2243
3 ATTEST:

Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney,
City of Orange

STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
2244
RESOLUTION NO. 11690

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF ORANGE ORDERING THE SUBMISSION

TO THE QUALIFIED ELECTORS OF THE CITY A

CERTAIN MEASURE RELATING TO EXPANDING
AND INCREASING THE RATE OF THE CITY’S

TRANSIENT OCCUPANCY TAX AT THE
NOVEMBER 3, 2026, GENERAL MUNICIPAL
ELECTION AS CALLED BY RESOLUTION NO. 11669
WHEREAS, pursuant to Title 5 (Business Taxes and Regulations) of the Orange Municipal Code (“OMC”), the City of Orange currently imposes a Transient Occupancy Tax (“TOT”) at the rate of ten percent (10%) on short-term guests of hotels, motels, and other lodgings within the City; and
WHEREAS, the City Council desires to amend the OMC to increase the maximum rate of the TOT from 10 percent (10%) to fifteen percent (15%) for hotels, motels, and other lodgings within the City with 11 rooms or more; and
WHEREAS, the City Council desires to maintain the TOT rate of 10% for hotels, motels, and other lodgings with 10 rooms or less; and
WHEREAS, the City Council desires to modify the existing TOT structure so it may apply to online and other travel companies to collect and remit the TOT; and WHEREAS, TOT is a general tax, the proceeds of which are deposited in the City’s General Fund and pay for essential City services, including but not limited to, fire and police services, senior and youth programs, and other general governmental services.; and WHEREAS, pursuant to California Elections Code Section 9222 and California Revenue and Taxation Code Sections 7280 and 7281, the City Council has the authority to place a measure on the ballot regarding the imposition, extension or increase in local TOT to be considered by the voters at a municipal election; and
WHEREAS, in order to levy such a tax, the ordinance imposing the tax must be approved by a two-thirds vote of all members of the City Council and the tax must be approved by a majority vote of the qualified voters of the City voting in an election on the issue; and WHEREAS, on May 26, 2026, the City Council adopted Resolution No. 11669 calling a General Municipal Election on Tuesday, November 3, 2026, and WHEREAS, on May 26, 2026, the City Council also adopted Resolution No. 11673 requesting that the County of Orange Board of Supervisors consolidate the General Municipal Election with the Statewide General Election to be held on November 3, 2026, and permit the Registrar of Voters to perform certain services in conjunction with the City’s election; and 2245
2 WHEREAS, the City Council also desires to submit to the voters at the election a question relating to the adoption of a proposed ordinance expanding and increasing the rate of the City’s transient occupancy tax (hotel tax).

NOW, THEREFORE, the City Council of the City of Orange does hereby resolve, declare, determine and order as follows:

SECTION 1. That the above recitals are true and correct and are incorporated herein.

SECTION 2. That the City Council, pursuant to its right and authority, does order submitted to the voters at the General Municipal Election to be held on November 3, 2026, the following question:

City of Orange Hotel Tax Modification Measure
Shall the City of Orange’s existing Transient Occupancy Tax, a tax on persons occupying hotel rooms, be updated by increasing the tax rate from 10% to 15% for hotels with 11 or more rooms and applying the tax to online and other travel companies, generating approximately $3,000,000 annually for general City purposes including police, fire and emergency response, parks, and street and infrastructure maintenance, until ended by voters?
YES
NO
SECTION 3. That the proposed complete text of the ordinance to be submitted to the voters is attached as Exhibit A.

SECTION 4. That the vote requirement for the Measure to pass is a majority (50%+1) of the votes cast.

SECTION 5. In all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding municipal elections.

SECTION 7. The City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

ADOPTED this ______ day of .

Daniel R. Slater, Mayor, City of Orange
ATTEST:
2246
3 Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange
Attachment: Exhibit A

STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
2247

EXHIBIT A
[PROPOSED] ORDINANCE NO. 09-26

AN ORDINANCE OF THE PEOPLE OF THE CITY
OF ORANGE AMENDING CHAPTER 5.16 OF

THE ORANGE MUNICIPAL CODE TO UPDATE

THE UNIFORM TRANSIENT OCCUPANCY TAX

INCLUDING INCREASING THE TRANSIENT

OCCUPANCY TAX PERCENTAGE
WHEREAS, the City of Orange wishes to amend and update Chapter 5.16of the Orange Municipal Code as it relates to the City’s Uniform Transient Occupancy Tax including increasing the Transient Occupancy Tax to be imposed from 10% to 15% as specified.

NOW, THEREFORE, THE PEOPLE OF THE CITY OF ORANGE DO HEREBY ORDAIN AS FOLLOWS:

SECTION I:

Chapter 5.16 of the Orange Municipal Code shall be amended to read as follows:

5.16.000. Title
The ordinance codified in this chapter shall be known as the Transient Occupancy Tax Ordinance of the City of Orange.

5.16.010 Administrative Regulations
Unless specifically provided for in the Orange Municipal Code, the City Manager or their designee may adopt reasonable administrative regulations to further define processes and administration of this Chapter.

5.16.020. Definitions
For purposes of this chapter, the following words, terms, phrases, and the derivations and variants thereof, shall have the meanings given herein:
“Accommodation(s)” means any room or other space in a hotel used for lodging or sleeping purposes, as well as other items or services provided to a transient as part of or accompanying the room or space upon which rent is charged pursuant to this chapter. “Accommodations Intermediary” means any person, corporation, entity, trust or partnership (other than an accommodations supplier) that directly or indirectly (i) facilitates the rental and/or facilitates payment processing of accommodation(s) in a hotel, and (ii) charges, collects or receives rent in connection with such rental, which may include, without limitation, a facilitation fee. "Accommodations intermediary" includes, without limitation, a travel or booking agent, a room seller or reseller, an on-line room seller or reseller, and an on-line travel agent or company of any type or 2248
2 nature whatsoever, but does not include employees of an accommodations intermediary or accommodations supplier.
“Accommodations Supplier” means any person, corporation, entity, trust or partnership which operates or provides accommodations in a hotel, whether in the capacity of owner, proprietor, lessee, sublessee, managing agent, mortgagee in possession, debtor in possession, licensee or any other capacity, other than as an employee of an accommodations intermediary or accommodations supplier. "Accommodations supplier" does not mean an accommodations intermediary. “Orange” or “City” means the City of Orange.
“Discount Room Charge” means the total consideration charged by an accommodations supplier to an accommodations intermediary, or an affiliate thereof, for furnishing accommodation(s) in a hotel. “Facilitation Fee” means the total consideration charged by an accommodations intermediary to a transient for accommodation(s), minus the discount room charge, if any, provided that the facilitation fee shall not be less than $0.
“Fiscal Year” means the period commencing July 1 of one calendar year through June 30 of the immediately subsequent calendar year.
“Occupancy” means the use or possession, or the right to the use or possession, of any room or rooms or other living space, or portion thereof, in any hotel for dwelling, lodging or sleeping purposes.
“Hotel” means any structure or portion thereof, which is occupied by persons for lodging or sleeping purposes for periods of less than thirty consecutive days including, without limitation, any hotel, bachelor hotel, motel, lodging house, rooming house, bed and breakfast inn, short-term rental, apartment house, dormitory, vacation ownership resort, public or private club, mobilehome or house trailer at a fixed location, or other similar structure or portion thereof, and any space, lot, area or site in any trailer court, camp, park, or lot which is occupied or intended or designed for occupancy by a tent, trailer, recreational vehicle, mobilehome, motorhome, or other similar conveyance, where such structure, space, lot, area or site is occupied by persons for lodging or sleeping purposes for periods of less than thirty consecutive days.
“Operator” means an accommodations supplier or accommodations intermediary. For purposes of the notice and appeal provisions of this chapter only, "operator" shall also include any managing employee or employee of an accommodations supplier or accommodations intermediary. “Qualifying Rental Agreement” means and is limited to a written contract signed by both the landlord and tenant, legally enforceable by either party, for a rental period of not less than thirty consecutive days. "Qualifying Rental Agreement" shall expressly exclude: (1) any agreement regardless of length of the rental term which is terminated for any reason by either party or by mutual consent prior to the thirtieth consecutive day of the tenancy, or (2) any agreement regardless of the length of the rental term which is for occupancy of lodging or sleeping space which is not the legal residence or principal dwelling place of the occupant, or (3) any agreement which would be unlawful or constitute a violation of law.
2249
3 “Rent” means the total consideration charged by an operator for accommodation(s) in a hotel, without any deduction therefrom whatsoever, including without limitation the discount room charge and/or facilitation fee, if any, as well as any (1) transaction fees, service fees, booking fees, processing fees, retail markups, commissions, cancellation fees, California Tourism Marketing Assessments, unrefunded advance reservation or other rental deposits, (2) separate charges levied for items or services which are part of or accompany such accommodations including, but not limited to, charges for overnight parking, furniture, fixtures, appliances, linens, towels, spa or fitness center usage or access, resort usage or access (commonly referred to as resort or destination fees), internet access, housekeeping or room cleaning, pet occupancy or pet-related cleaning, additional guests/transients, and/or partial days or early or late arrival or departure, (3) consideration or value received by an operator from an award or reward program, including the redemption of award/reward points, incentives or bonuses, or (4) charges reasonably attributable to any of the foregoing taxable items that are part of a special package that includes accommodation(s). “Special Package and Special Package Rate” means room accommodations and beverage services or room accommodations and at least one other benefit having an ascertainable fair market value offered for one fixed charge.
“Short-term Rental" means a residential dwelling or a portion thereof that is rented by an operator to another person or group of persons for occupancy, dwelling, lodging or sleeping purposes for a period of less than thirty (30) consecutive calendar days. For purposes of this definition, residential dwelling means a building, or portion thereof, designed exclusively for residential purposes, including single-family and multiple-family dwellings.
“Tax” means the amounts imposed pursuant to Section 5.16.030 of this chapter. “Tax Administrator” means the City Manager or their designee. “Transient” means any person who exercises occupancy, or is entitled to occupancy, of any room, space, lot, area or site in any hotel by reason of concession, permit, right of access, license or other agreement whether written or oral. Any such person shall be deemed to be a transient until the thirtieth consecutive day (counting partial days as full days) of such occupancy or right of occupancy, and the tax imposed by this Chapter shall be due upon all rent collected or accruing prior to said thirtieth consecutive day unless the occupancy is pursuant to a Qualifying Rental Agreement.

5.16.030. Tax Imposed
For the privilege of occupancy of space in any hotel with 11 accommodations or more, each transient is subject to and shall pay a tax in the amount of 15% of the rent.

For the privilege of occupancy of space in any hotel with 10 accommodations or fewer, each transient is subject to and shall pay a tax in the amount of 10% of the rent.

Accommodations intermediaries and accommodations suppliers shall be jointly and severally liable for collection and remittance of taxes imposed by this Chapter. 2250
4 5.16.040. Exemptions.

No tax shall be imposed upon any person as to whom, or any occupancy as to which, it is beyond the power of Orange to impose the tax.

5.16.050. Operator’s Duties.

Each operator shall collect the tax imposed by this chapter to the same extent and at the same time as the rent is collected from every other transient. The amount of tax shall be separately stated from the amount of the rent charged, and each transient shall receive a receipt for payment from the operator.

No operator of a hotel shall advertise or state in any manner, whether directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the operator, or that it will not be added to the rent, or that, if added, any part will be refunded except in the manner provided in this chapter.

5.16.060. Registration.

Within 30 days after the effective date of the ordinance codified in this chapter, or within 30 days after commencing business, whichever is later, each operator of any hotel renting occupancy to transients shall register the hotel with the Tax Administrator and obtain from him or her a "Transient Occupancy Registration Certificate" to be at all times posted in a conspicuous place on the premises.

Said certificate shall, among other things, state the following:

A. The name of the operator;
B. The address of the hotel;
C. The date upon which the certificate was issued;
D. "This Transient Occupancy Registration Certificate signifies that the person named on the face hereof has fulfilled the requirements of the Transient Occupancy Tax Ordinance by registering with the Tax Administrator for the purpose of collecting from transients the Transient Occupancy Tax and remitting said tax to the Tax Administrator. This certificate does not authorize any person to conduct any unlawful business or to conduct any lawful business in any unlawful manner, nor to operate a hotel without strictly complying with all local applicable laws, including but not limited to, those requiring a permit from any board, commission, department or office of this City. This certificate does not constitute a permit."

5.16.070 Reporting and Remitting.

Each operator shall, on or before the last day of the month following the close of each calendar quarter, or at the close of any shorter reporting period which may be established by the Tax Administrator, make a return to the Tax Administrator, on forms provided by them, of the total rents charged and received and the amount of tax collected for transient occupancies. At the time the return is filed, the full amount of the tax collected shall be remitted to the Tax Administrator. The Tax Administrator may establish shorter reporting periods for any certificate holder if they deem it necessary in order to insure collection of the tax and they may require further information in the return. Returns and payments are due immediately upon cessation of business for any reason. All 2251
5 taxes collected by operators pursuant to this chapter shall be held in trust for the account of the City until payment thereof is made to the Tax Administrator.

5.16.080. Penalties and Interest.

A. Original Delinquency. Any operator who fails to remit any tax imposed by this chapter within the time required shall pay a penalty of 10% of the amount of the tax in addition to the amount of the tax.

B. Continued Delinquency. Any operator who fails to remit any delinquent remittance on or before a period of 30 days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of 10% of the amount of the tax in addition to the amount of the tax and the 10% penalty first imposed.

C. Fraud. If the Tax Administrator determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of 25% of the amount of the tax shall be added thereto in addition to the penalties stated in subsections A and B of this section.

D. Interest. In addition to the penalties imposed, any operator who fails to remit any tax imposed by this chapter shall pay interest at the rate of one-half of one percent per month or fraction thereof on the amount of the tax, exclusive of penalties, from the date on which the remittance first became delinquent, until paid.

E. Penalties Merged with Tax. Every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the tax herein required to be paid.

5.16.090. Failure to Collect and Report Tax—Determination of Tax by Tax Administrator.

If any operator fails or refuses to collect the tax and to make, within the time provided in this chapter, any report and remittance of the tax or any portion thereof required by this chapter, the Tax Administrator shall proceed in such manner as he or she may deem best to obtain facts and information on which to base his or her estimate of the tax due. As soon as the Tax Administrator shall procure such facts and information as he or she is able to obtain upon which to base the assessment of any tax imposed by this chapter and payable by any operator who has failed or refused to collect the same and to make such report and remittance, he or she shall proceed to determine and assess against such operator the tax, interest and penalties provided for by this chapter. In case such determination is made, the Tax Administrator shall give a notice of the amount so assessed by serving it personally or by depositing it in the United States mail, postage prepaid, addressed to the operator so assessed at his or her last known place of address. Such operator may within 10 days after the serving or mailing of such notice make application in writing to the Tax Administrator for a hearing on the amount assessed, If application by the operator for a hearing is not made within the time prescribed, the tax, interest and penalties, if any, determined by the Tax Administrator shall become final and conclusive and immediately due and payable. If such application is made, the Tax Administrator shall give not less than five days' written notice in the manner prescribed herein to the operator to show cause at a time and place fixed in the notice why the amount specified therein should not be fixed for such tax, interest and penalties. At such hearing, the operator may appear and offer evidence why such specified tax, interest and penalties should not be so fixed. After such hearing, the 2252
6 Tax Administrator shall determine the proper tax to be remitted and shall thereafter give written notice to the person in the manner prescribed herein of such determination and the amount of such tax, interest and penalties. The amount determined to be due shall be payable after 15 days unless an appeal is taken as provided in Section 5.16.100.

5.16.100. Appeal—Hearing.

Any operator aggrieved by any decision of the Tax Administrator with respect to the amount of such tax, interest and penalties, if any, may appeal to the Council by filing a notice of appeal with the City Clerk within 15 days of the serving or mailing of the determination of tax due. The Council shall fix a time and place for hearing such appeal, and the City Clerk shall give notice in writing to such operator, at his or her last known place of address. The findings of the Council shall be final and conclusive and shall be served upon the appellant in the manner prescribed above for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of notice.

5.16.110. Operator to Keep Records.

It shall be the duty of every operator liable for the collection and payment to the City of any tax imposed by this chapter to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such tax as he or she may have been liable for the collection of and payment to the City, which records the Tax Administrator shall have the right to inspect at all reasonable times.

5.16.120. Refunds.

A. Whenever the amount of any tax, interest or penalty has been overpaid or paid more than once or has been erroneously or illegally collected or received by the City under this chapter, it may be refunded as provided in subsections B and C of this section provided a claim in writing therefor, stating under penalty of perjury the specific grounds upon which the claim is founded, is filed with the Tax Administrator within three years of the day of payment. The claim shall be on forms furnished by the Tax Administrator.

B. An operator may claim a refund or take as credit against taxes collected and remitted the amount overpaid, paid more than once or erroneously or illegally collected or received when it is established in a manner prescribed by the Tax Administrator that the person from whom the tax has been collected was not a transient; provided, however, that neither a refund nor a credit shall be allowed unless the amount of the tax so collected has either been refunded to the transient or credited to rent subsequently payable by the transient to the operator.

C. A transient may obtain a refund of taxes overpaid or paid more than once or erroneously or illegally collected or received by the City by filing a claim in the manner provided in subsection A of this section, but only when the tax was paid by the transient directly to the Tax Administrator, or when the transient having paid the tax to the operator, establishes to the satisfaction of the Tax Administrator that the transient has been unable to obtain a refund from the operator who collected the tax.
2253
7 D. No refund shall be paid under the provisions of this section unless the claimant establishes his or her right thereto by written records showing entitlement thereto.

5.16.130. Actions to Collect.

Any tax required to be paid by any transient under the provisions of this chapter shall be deemed a debt owed by the transient to the City. Any such tax collected by an operator which has not been paid to the City shall be deemed a debt owed by the operator to the City. Any person owing money to the City under the provisions of this chapter shall be liable to an action brought in the name of the City for the recovery of such amount.

5.16.140. Funds Deposited into Special Fund.

The tax collected by the City, imposed under Section 5.16.030, shall be deposited into the general fund. Funds expended for advertising and promotional purposes shall be paid or transferred from the general fund.

SECTION II:

It is the intent of the people that the provisions of this Ordinance are severable and that if any section, subdivision, paragraph, sentence, clause or phrase of this Ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each section, subdivision, paragraph, sentence, clause and phrase thereof, irrespective of the fact that any one (or more) section, subdivision, paragraph, sentence, clause or phrase had been declared invalid or unconstitutional.

SECTION III:

The adoption of this Ordinance is exempt from the California Environmental Quality Act (CEQA), Public Resources Code section 21000 et seq. and California Code of Regulations, title 14, section 15000 et seq. (CEQA Guidelines). The transient occupancy tax increase this Ordinance adopts is a government funding mechanism that does not “involve any commitment to any specific project which may result in a potentially significant physical impact on the environment,” and thus it is not a project under CEQA Guidelines section 15378(b)(4).

SECTION IV:

The Mayor and City Clerk are hereby authorized to attest to the adoption of this Ordinance by the People voting thereon on November 3, 2026, by signing where indicated below.

Daniel R. Slater, Mayor, City of Orange
ATTEST:

Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange
2255
RESOLUTION NO. 11691

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF ORANGE SETTING PRIORITIES FOR

FILING WRITTEN ARGUMENTS REGARDING A

CITY MEASURE AND DIRECTING THE CITY

ATTORNEY TO PREPARE AN IMPARITAL

ANALYSIS FOR THE MEASURE TO BE

SUBMITTED TO THE VOTERS AT THE GENERAL

City of Orange Hotel Tax Modification Measure
Shall the City of Orange’s existing Transient Occupancy Tax, a tax on persons occupying hotel rooms, be updated by increasing the tax rate from 10% to 15% for hotels with 11 or more rooms and applying the tax to online and other travel companies, generating approximately $3,000,000 annually for general City purposes including police, fire and emergency response, parks, and street and infrastructure maintenance, until ended by voters?
YES
NO
NOW, THEREFORE, the City Council of the City of Orange does hereby resolve, declare, determine and order as follows:

SECTION 1. The City Council authorizes the following member(s) of its body __________ (Councilmember In Favor) or __________ (Councilmember Against) __________ (Councilmember In Favor) or __________ (Councilmember Against) __________ (Councilmember In Favor) or __________ (Councilmember Against) __________ (Councilmember In Favor) or __________ (Councilmember Against) __________ (Councilmember In Favor) or __________ (Councilmember Against) __________ (Councilmember In Favor) or __________ (Councilmember Against) __________ (Councilmember In Favor) or __________ (Councilmember Against) to file written arguments not exceeding 300 words regarding the City Measure as specified above, accompanied by the printed names and signatures of the authors submitting it, in accordance with Article 4, Chapter 3, Division 9 of the Elections Code of the State of California. The arguments may be changed or withdrawn until and including the date fixed by the City Clerk after which no arguments for or against the City Measure may be submitted to the City Clerk. 2256
2 SECTION 2. The argument(s) shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers who is the author of the argument. The arguments shall be accompanied by the Form of Statement to be Filed by Author(s) of Argument as provided for in California Elections Code Section 9600.

SECTION 3. The City Clerk is directed to transmit a copy of the Measure to the City Attorney unless the organization or salaries of the office of the City Attorney are affected. In accordance with Elections Code Section 9280, the City Attorney is hereby directed as follows:
a. The City Attorney shall prepare an impartial analysis of the measure not exceeding 500 words showing the effect of the measure on the existing law and the operation of the measure. If the measure affects the organization or salaries of the office of the City Attorney, the City Council may direct the City Clerk to prepare this impartial analysis. b. The analysis shall include a statement indicating whether the measure was placed on the ballot by a petition signed by the requisite number of voters or by the governing body of the City.
c. In the event the entire text of the measure is not printed on the ballot, nor in the voter information portion of the voter information guide, there shall be printed immediately below the impartial analysis, in no less than 10-point bold type, the following: “The above statement is an impartial analysis of Measure ____. If you desire a copy of the ordinance or measure, please call the election official’s office at (714) 744-5500 and a copy will be mailed at no cost to you.”
d. The impartial analysis shall be filed by the date set by the City Clerk for the filing of primary arguments.

SECTION 4. That if more than one argument for or against the measure is submitted to the City Clerk within the time prescribed, she shall give preference and priority, in the order set forth in California Elections Code Section 9287, to the arguments in favor/against submitted by:
1) the legislative body, or member(s) of the legislative body authorized by that body, 2) individual voter or bona fide association of citizens or combination of voters and associations, who are the bona fide sponsors or proponents of the measure, 3) bona fide associations of citizens, 4) individual voters who are eligible to vote on the measure.

SECTION 5. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

ADOPTED this _____ day of .

Daniel R. Slater, Mayor, City of Orange
2257
3 ATTEST:

Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange

STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
2258
RESOLUTION NO. 11674

A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF ORANGE PROVIDING FOR THE

FILING OF REBUTTAL ARGUMENTS FOR CITY

MEASURES SUBMITTED AT MUNICIPAL

ELECTIONS
WHEREAS, California Elections Code Section 9282 provides for written arguments to be filed in favor of or against city measures not to exceed 300 words in length; and WHEREAS, California Elections Code Section 9285 authorizes the City Council, by majority vote, to adopt provisions to provide for the filing of rebuttal arguments for city measures submitted at municipal elections.

NOW, THEREFORE, the City Council of the City of Orange does hereby resolve, declare, determine and order as follows:

SECTION 1. Pursuant to California Elections Code Section 9285, when the elections official has selected the arguments for and against the measure (not exceeding 300 words each) which will be printed and distributed to the voters, the election official shall send a copy of an argument in favor of the proposition to the authors of any argument against the measure and a copy of an argument against the measure to the authors of any argument in favor of the measure immediately upon receiving the arguments.

SECTION 2. The author or a majority of the authors of an argument relating to a city measure may prepare and submit a rebuttal argument not exceeding 250 words or may authorize in writing any other person or persons to prepare, submit, or sign the rebuttal argument.

SECTION 3. A rebuttal argument shall not be signed by more than five authors.

SECTION 4. The rebuttal arguments shall be filed with the City Clerk, signed, with the printed name(s) and signature(s) of the author(s) submitting it, or if submitted on behalf of an organization, the name of the organization, and the printed name and signature of at least one of its principal officers, not more than 10 days after the final date for filing direct arguments. The rebuttal arguments shall be accompanied by the Form of Statement To Be Filed By Author(s) of Argument.

SECTION 5. Rebuttal arguments shall be printed in the same manner as the direct arguments. Each rebuttal argument shall immediately follow the direct argument which it seeks to rebut.

SECTION 6. This resolution repeals previous resolutions providing for the filing of rebuttal arguments for city measures.
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2 SECTION 7. The City Clerk shall make the rebuttal arguments available for public examination in accordance with the provisions of California Elections Code Section 9295. The City Clerk shall also transmit the rebuttal agreements for or against to the Elections Official for the County of Orange on the date required by that official, for inclusion in the official election pamphlet for the election on November 3, 2026.

SECTION 8. The City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

ADOPTED this ______ day of _______________________ 2026.

Daniel R. Slater, Mayor, City of Orange
ATTEST:

Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange

STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
2260
RESOLUTION NO. 11689

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF ORANGE ADOPTING THE CONTRACT
WITH ORANGE AND REAFFIRMING THE CITY’S

COMMITMENT TO RESPONSIBLE STEWARDSHIP
OF THE PUBLIC’S MONEY
WHEREAS, across the United States and the State of California, the rising costs for goods and services have placed a financial strain on many families and individuals; and WHEREAS, the Orange Community is not immune to these cost pressures with many Orange residents and businesses impacted by inflationary trends which have increased the costs of everyday goods and services; and
WHEREAS, as the Orange Community perseveres through financially arduous times, the Orange City Council fully grasps its significant responsibility to effectively manage the public’s money, and reaffirms its commitment to judicious financial stewardship, and WHEREAS, the money managed by the City of Orange is not the City’s money, but rather it is funding belonging to the public; and
WHEREAS, the Orange City Council has a duty to ethically administer the public’s money and invest into programs that maintain and improve the Orange Community’s quality of life while simultaneously engaging in responsible long-term financial planning, thereby securing a stronger future for our posterity; and
WHEREAS, The Contract with Orange supplements and supports the City of Orange’s Fiscal Years 2025-2030 Citywide Strategic Plan (Strategic Plan) insofar that it represents an actionable contract that will assist the City achieve the Strategic Plan objectives; and WHEREAS, to reaffirm the Orange City Council’s commitment to the Orange Community, the City Council adopts The Contract with Orange, avowing the City Council’s commitment to local control, fiscal discipline, and measurable results.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Orange that The Contract with Orange is hereby adopted, and serves as the Orange City Council’s formal commitment to residents, businesses, and taxpayers that existing or any future increase in local tax revenues authorized by the Orange Community will be managed responsibly, transparently, and with direct public oversight.

The City believes revenue generated by Orange taxpayers should stay in Orange, serve Orange residents, support Orange businesses, and strengthen Orange neighborhoods. This is a commitment to local control, fiscal discipline, and measurable results. This contract ensures taxpayer dollars are protected and used only for the essential priorities as follows:
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2 SECTION 1. Preserve Public Safety: The City recognizes that our community values public safety and places great trust in the Orange Police Department and Orange City Fire Department. Any existing or new tax revenues authorized by the Orange Community will support police services, fire protection, emergency response readiness, and neighborhood safety programs to help keep residents, businesses, and neighborhoods safe. At the same time, the City will continue reviewing operational practices, including excessive overtime costs, to improve efficiency and ensure taxpayer dollars are used responsibly.

SECTION 2. Independent Oversight Committee: The City believes community trust requires community participation. An Independent Oversight Committee composed of Orange residents, business owners, and community leaders will review and report on expenditures associated with any new tax revenues authorized by the Orange Community. This committee will help ensure funds are spent solely in accordance with The Contract with Orange.

SECTION 3. Annual Public Transparency Reports: The City will publish annual accountability reports detailing revenues collected, expenditures made, project status updates, progress toward debt reduction, and measurable outcomes and performance results. This ensures the public has clear visibility into how taxpayer dollars are spent.

SECTION 4. Infrastructure Improvement Guarantee: Any existing or new tax revenues authorized by the Orange Community will help maintain and improve roads and streets, sidewalks and public facilities, parks and recreational spaces, neighborhood beautification, and critical public infrastructure. The City commits to fully funding annual road maintenance to protect Orange’s infrastructure and prevent more costly repairs in the future.

SECTION 5. Fiscal Responsibility and Balanced Budgeting: The City will continue to adopt balanced annual budgets, maintain responsible budgeting practices, limit unnecessary debt, and preserve emergency reserve funds to protect Orange during future economic downturns.

Any new revenues authorized by the Orange Community will not replace fiscal discipline, they will strengthen it. No new revenues authorized by the Orange Community shall be used for unrelated purposes or diverted away from the commitments outlined in The Contract with Orange.

Taxpayer funds must remain aligned with the priorities promised to the residents: public safety, infrastructure, fiscal sustainability, and quality of life.

SECTION 6. Pension and Other Post-Employment Benefits Liability Reduction and Long-Term Sustainability: The City will continue to take all concerted efforts to reduce longterm pension liabilities, address Other Post-Employment Benefit (OPEB) obligations, and strengthen the City’s long-range financial position.

While Pension Obligation Bond debt, unfunded pension liabilities, and retiree health obligations may eventually be reduced or paid off, the City must continue planning for future pension cost volatility, CalPERS rate fluctuations, healthcare inflation, and long-term retirement obligations. To ensure continued fiscal stability, the City will establish and maintain a Section 115 Pension Stabilization Trust to help prefund future pension obligations, smooth contribution rate increases, and protect taxpayers from significant market-driven cost spikes. 2262
3 The City will also continue to responsibly address OPEB liabilities through long-term funding strategies that reduce future burdens on taxpayers and preserve service levels for residents.

Annual budget surpluses, when available, may also be directed toward the Section 115 Trust, pension debt reduction, OPEB liabilities, reserve restoration, and other long-term obligations to improve Orange’s financial sustainability and reduce future fiscal pressures.

The goal is not simply to solve today’s challenges, but to responsibly prepare for tomorrow’s obligations.

SECTION 7. Continued Operational Efficiency: The City will continue scrutinizing staffing levels, service delivery models, and opportunities to use technology to improve efficiency.

The City will continue reviewing revenue performance no less than quarterly and make appropriate budget adjustments when revenues are not meeting projections, ensuring proactive fiscal management rather. The City will continue implementing results-based budgeting, strategic staffing reviews, and operational efficiency measures so that every taxpayer dollar is prioritized based on community value, measurable outcomes, and long-term sustainability.

SECTION 8. Economic Vitality Support: City investments will encourage local economic growth, strengthen commercial districts, support small businesses, and attract responsible development that benefits the entire community. A stronger local economy helps strengthen Orange for future generations.

SECTION 9. Measurable Performance Standards: Additional tax revenues authorized by the Orange Community will be used with clear goals, timelines, and performance metrics to ensure taxpayer dollars produce visible, measurable, and lasting results.

SECTION 10. The City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

ADOPTED this ______ day of _______________________ 2026.

Daniel R. Slater, Mayor, City of Orange
ATTEST:

Pamela Coleman, City Clerk, City of Orange
2263
4 APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange

STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
2264
Agenda Item
Orange City Council
Item #: 10.3. 5/26/2026 File #: 26-0331
TO: Honorable Mayor and Members of the City Council
FROM: Jarad Hildenbrand, City Manager

1. SUBJECT
Vehicle Incentive Program Discussion

2. SUMMARY
The draft Vehicle Incentive Program (VIP) would provide rebates to Orange residents and businesses that purchase or lease vehicles from participating Orange auto dealerships. The program is intended to encourage residents and businesses to make large retail purchases locally in order to support local jobs, local dealerships, and the City’s sales tax base.

3. RECOMMENDED ACTION

1. Discuss the draft Vehicle Incentive Program.

2. If the City Council wishes to move forward with a Vehicle Incentive Program, direct City staff to prepare an economic development subsidy report and schedule a public hearing to consider approval of the Vehicle Incentive Program, contingent upon voter approval of any future transactions and use tax increase.

4. FISCAL IMPACT
There is no fiscal impact associated with tonight’s discussion. As proposed, the annual program would cost $1,600,000, with $1,550,000 allocated for rebates and $50,000 set aside for outreach and program administration. This draft program is entirely contingent upon Orange voters approving any potential transactions and use tax (sales tax) increase.

5. STRATEGIC PLAN GOALS
Goal 3: Enhance Economic Development and Achieve Fiscal Sustainability.

6. DISCUSSION AND BACKGROUND
Shop local programs encourage residents to support local businesses by spending their dollars in Orange. By choosing to shop local, residents can support local jobs, local property investment, and local public services such as police, fire, parks, and libraries. Vehicle purchases are among the largest taxable retail purchases many residents make. Encouraging those purchases to occur within Orange can help retain local sales tax revenue that might otherwise be lost to neighboring jurisdictions or lost to neighboring jurisdictions and competing regional marketplaces. The proposed Vehicle Incentive Program (VIP) would:

A. Provide a $500 rebate to Orange residents and businesses who purchase or lease a new vehicle from eligible dealerships; or
B. Provide a $250 rebate to Orange residents and businesses who purchase a pre-owned vehicle from eligible dealerships
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Item #: 10.3. 5/26/2026 File #: 26-0331
Eligible dealerships include:
· Mazda of Orange
· Selman Chevrolet
· Stadium Nissan
· Toyota of Orange
· Villa Ford of Orange
The program would apply to the purchase and lease of all new vehicles as well as the purchase of pre-owned vehicles with a minimum final sales price of $15,000.

Unlike many retail sectors, automobile purchases generate significant one-time taxable sales and are often highly mobile, with consumers frequently shopping across city boundaries. The proposed program is intended to encourage residents and businesses to complete those purchases locally in order to support Orange-based dealerships, local employment, and local tax revenues. Because automobile purchases generate substantial taxable sales, even modest increases in local purchasing activity may help offset program costs through increased local sales tax generation.

Motorcycles, off-road vehicles, or watercraft would not be eligible purchases for this program.

Participating dealerships would provide the rebate to qualified customers and then submit documentation to the City for reimbursement (see attached program guidelines for additional details about program administration).

Pursuant to California Government Code Section 53083, implementation of the proposed program would require City Council approval of an economic development subsidy report following a duly noticed public hearing. The proposed program term would be from April 1, 2027, to April 1, 2037.

The program budget would be limited to $1,550,000 per year, with an additional $50,000 set aside for the City to market and administer the program. Staff is requesting City Council direction regarding preparation of the required economic subsidy report and scheduling of a public hearing.

7. ATTACHMENTS
· Draft Vehicle Incentive Program
City of Orange Page 2 of 2 Printed on 5/21/2026
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Agenda Item
Orange City Council
Item #: 10.3. 5/26/2026 File #: 26-0331
TO: Honorable Mayor and Members of the City Council
FROM: Jarad Hildenbrand, City Manager

1. SUBJECT
Vehicle Incentive Program Discussion

3. RECOMMENDED ACTION

1. Discuss the draft vehicle incentive program.

2. If the City Council wishes to move forward with a vehicle incentive program, direct City staff to prepare an economic development subsidy report and schedule a public hearing to consider approval of the vehicle incentive program, contingent upon voter approval of any future transactions and use tax increase.

5. STRATEGIC PLAN GOALS
Goal 3: Enhance Economic Development and Achieve Fiscal Sustainability.

A. Provide a $500 rebate to Orange residents and businesses who purchase or lease a new vehicle from eligible dealerships; or
B. Provide a $250 rebate to Orange residents and businesses who purchase a pre-owned vehicle from eligible dealerships
City of Orange Page 1 of 2 Printed on 5/21/2026
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Item #: 10.3. 5/26/2026 File #: 26-0331
Eligible dealerships include:
· Mazda of Orange
· Selman Chevrolet
· Stadium Nissan
· Toyota of Orange
· Villa Ford of Orange
The program would apply to the purchase and lease of all new vehicles as well as the purchase of pre-owned vehicles with a minimum final sales price of $15,000.

Motorcycles, off-road vehicles, or watercraft would not be eligible purchases for this program.

7. ATTACHMENTS
· Draft Vehicle Incentive Program
City of Orange Page 2 of 2 Printed on 5/21/2026
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City of Orange

RESIDENT VEHICLE INCENTIVE PROGRAM
(DRAFT) GUIDELINES
As a means to spur growth of the local tax base and to encourage Orange residents and businesses to “buy local”, the City has developed the Vehicle Incentive Program (VIP) that incentivizes Orange residents and businesses to purchase or lease a car and/or truck from one of 5 franchised Orange auto dealerships.

The VIP provides a $500 rebate to an Orange resident who purchases or leases a new or car/truck or $250 rebate for a pre-owned vehicle from a franchised Orange auto dealer.

The rebates are designed to encourage residents to continue to buy locally when making their largest taxable purchase. The VIP has been developed to avoid leakage of local automotive purchases to outside jurisdictions and would ensure that future revenue generated by this sector will be available to provide vital City services.

Program Objectives
▪ Reinvest in the local economy.
▪ Encourage job creation and retention.
▪ Incentivize residents and businesses to shop local.
▪ Avoid leakage of automotive purchases to other cities. ▪ Maintain a strong retail sales base in the City.

Buy Local
The Resident Vehicle Incentive Program (VIP) has been designed to encourage residents to purchase or lease a car or truck from one of the 5 franchised auto dealers in the City of Orange. A list of eligible dealerships is provided below.

Eligible Dealerships

1. Mazda of Orange – 1350 W. Katella Ave., Orange, CA

2. Selman Chevrolet – 1800 E. Chapman Ave., Orange, CA

3. Stadium Nissan – 1140 West Katella, Orange, CA

4. Toyota of Orange – 1400 North Tustin Ave., Orange, CA

5. Villa Ford of Orange – 2550 North Tustin Ave., Orange, CA 2269
Eligible Participants
Any resident or business of the City of Orange that purchases or leases a new or preowned automobile or truck from the eligible dealership is eligible to receive the rebate. ▪ Qualified residents must be able to provide proof of Orange residency to the dealership by registering their new purchase in Orange and one of the following:
o Valid California Driver’s License
o Utility Bill
o Property Tax Bill
o Proof of insurance
o Bank statement
▪ Qualified businesses must provide proof of valid Orange business license. ▪ Qualified residents and businesses must sign an Orange Resident/Business Rebate Form verifying residency and/or operation of business in Orange. ▪ Rebate will be applied towards the agreed upon purchase/lease price in the final sales contract.

Qualifying Vehicles
▪ All purchases and leases of new cars or trucks are eligible. ▪ All purchases of pre-owned cars or trucks with a final agreed upon sales price of at least $15,000 (after all manufacturer rebates and dealer incentives) are eligible. ▪ Motorcycles, off-road vehicles or watercraft are not eligible purchases under this program.

Rebate Administration and Process
▪ Participating dealers document the sale/lease of the new or pre-owned vehicle using the Resident Rebate Form. Dealer must include: 1) Final sales invoice showing proof of purchase; 2) Proof of auto registration in Orange; 3) Resident Rebate Form; 4) Copy of one of the following: valid resident California Driver’s license; utility bill; property tax bill; proof of insurance; or bank statement; 5) Business License for business purchases for full reimbursement. ▪ On a monthly basis, dealers will submit all Resident Rebate Forms with required documentation to the City of Orange for reimbursement and processing. The purchase summary form must be filled out and attached with rebate forms. 2270
▪ Within 30 days of receipt from dealerships, City will provide reimbursement to dealers.
▪ Dealers that reimburse a non-Orange resident or non-Orange business will not be reimbursed from the City.

Dealer Responsibilities
▪ Dealership franchises must have an Orange business license and be in good standing with their manufacturer.
▪ Dealerships must document the sale/lease of the new or pre-owned vehicle using the Resident Rebate Form. Dealer must include: final sales invoice showing proof of purchase, proof of registration in Orange, Resident Rebate Form. ▪ Dealerships shall identify the $500(new vehicle) or $250(pre-owned vehicle) rebate to be applied towards the purchase price and shall be listed in the sales contract under a separate rebate on the “Other” line with a “Orange VIP Rebate” description. ▪ Dealerships must collect and submit all required documentation as proof of residency for qualified Orange residents. (A copy of one of the following: valid California Driver’s license; utility bill; property tax bill; proof of insurance; or bank statement for residents or a valid business registration for business).
▪ On a monthly basis dealers will submit all Resident Rebate Forms with required documentation to the City of Orange for reimbursement and processing. VIP summary form must be filled out and attached with rebate forms. ▪ Dealers that reimburse a non-Orange resident or non-Orange business will not be reimbursed from the City.

Program Term
The first term of the Resident Vehicle Incentive Program shall be for ten years from April 1, 2027 to April 1, 2037. The City Manager and/or City Council would have authority to extend the program for an additional ten years.
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Program Administration
Within 5 business days of receipt of documentation from dealerships, the City of Orange will review the rebate applications and all supporting documentation. If documentation is missing, staff will request additional documentation from the dealerships. This will delay the processing of payment of deficient rebate applications until all required documentation is received but will not delay the rebates applications that have all required documentation.

Upon approval of documentation, the City of Orange will be responsible for issuing checks to dealerships within 30 days of receipt of approved rebate forms.

Program Funding
The Program budget shall be limited to $1,550,000 per year for resident rebates and $50,000 for City marketing and administration of the program on an annual basis.

Program Evaluation
Staff will evaluate the effectiveness of the program to determine if the incentive has increased or kept stable the number of new and used car sales and leases by Orange residents. Staff will also consider factors like a change in the economy, overall Orange County vehicle sales, brand market share changes and new dealerships opening outside of the City borders.
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ORANGE RESIDENT VIP REBATE FORM

VEHICLE IDENTIFICATION
NUMBER

MAKE AND MODEL RETAIL DELIVERY DATE
CUSTOMER INFORMATION FOR VALIDATION:

CUSTOMER LAST NAME FIRST, M.I. TELEPHONE NUMBER

STREET ADDRESS CITY, STATE ZIP CODE
DEALERSHIP NAME Purchase Amount/Rebate Amount
Initial below: I, the customer and Orange resident, have applied the Orange Resident’s Rebate towards the purchase of my vehicle. Therefore, I have assigned the cash payment directly to the dealer. I release the City of Orange from any further claim or obligation for payment to me for this vehicle.

I, the customer, give the dealership named above permission to share this form, the final sales contract and a copy of my valid identification to the City of Orange to process the rebate. I declare under penalty of perjury that the above information is true and correct.

CUSTOMER SIGNATURE DATE

SALESMANAGER NAME (PLEASE PRINT) DEALERSHIP NAME DATE

SALESMANAGER SIGNATURE DATE
THIS COMPLETED FORM MUST BE FORWARDED TO THE CITY OF ORANGE WITH THE VEHICLE SALES DOCUMENTS. BY

SIGNING THE ABOVE DOCUMENT, THE DEALER IS VERIFYING THAT THE RESIDENT LIVES IN THE CITY OF ORANGE AND QUALIFIES FOR THE REBATE.
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ORANGE BUSINESS VIP REBATE FORM

VEHICLE IDENTIFICATION
NUMBER

MAKE AND MODEL RETAIL DELIVERY DATE
BUSINESS INFORMATION FOR VALIDATION:

BUSINESS NAME REPRESENTATIVE NAME TELEPHONE NUMBER

STREET ADDRESS CITY, STATE ZIP CODE
DEALERSHIP NAME Purchase Amount/Rebate Amount
Initial below: I, the customer and Orange business, have applied the Orange Rebate towards the purchase of my vehicle. Therefore, I have assigned the cash payment directly to the dealer. I release the City of Orange from any further claim or obligation for payment to me for this vehicle.

I, the customer, give the dealership named above permission to share this form, the final sales contract and a copy of my business license to the City of Orange to process the rebate. I declare under penalty of perjury that the above information is true and correct.

ORANGE BUSINESS REPRESENTATIVE SIGNATURE DATE

SALESMANAGER NAME (PLEASE PRINT) DEALERSHIP NAME DATE

SALESMANAGER SIGNATURE DATE
THIS COMPLETED FORM MUST BE FORWARDED TO THE CITY OF ORANGE WITH THE VEHICLE SALES DOCUMENTS. BY SIGNING

THE ABOVE DOCUMENT, THE DEALER IS VERIFYING THAT THE BUSINESS OPERATES IN THE CITY OF ORANGE AND QUALIFIES FOR THE REBATE.
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ORANGE VIP SUMMARY FORM

DATE OF PURCHASE/LEASE RESIDENT/BUSINESS NAME NEW/USED/LEASE AUTO 2275
Agenda Item
Orange City Council
Item #: 10.4. 5/26/2026 File #: 26-0236
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Monica Espinoza, Human Resources Director

1. SUBJECT
Executive Management and Senior Management employees’ classification, compensation, and terms of employment

2. SUMMARY
Resolution No. 11688 amends the compensation and terms of employment for the City’s Executive Management and Senior Management employees for the period of July 1, 2026 through and including June 30, 2027.

3. RECOMMENDED ACTION
Adopt Resolution No. 11688. A Resolution of the City Council of the City of Orange rescinding Resolution No. 11644 and all amendments thereto and the classification, compensation, and terms of employment of Executive Management and Senior Management employees.

4. FISCAL IMPACT
The total cost is approximately $435,100 of which $362,800 is funded through the general fund.

These adjustments are included in the FY27 budget.

5. STRATEGIC PLAN GOALS
Goal 1: Maintain Strong Emergency and Safety Services
Goal 4: Improve Employee Retention and Recruitment

6. DISCUSSION AND BACKGROUND
The City’s Executive and Senior Management employees are a group of unrepresented employees whose classification, compensation, and terms of employment are covered by a City Council-adopted Resolution. The Top Management Resolution covers the City’s executive, division managers, and other senior management employees who are deemed confidential employees and are exempt from overtime provisions of the Federal Labor Standards Act (FLSA). The most recent Resolution covers July 1, 2025 through June 30, 2026.

The proposed Resolution provides for a three percent (3%) cost of living adjustment to base salary effective June 28, 2026. This compensation pattern aligns with what other bargaining groups have received. The Resolution also incorporates language changes and updates that provide greater City of Orange Page 1 of 2 Printed on 5/21/2026
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Item #: 10.4. 5/26/2026 File #: 26-0236
clarity and conform the Resolution to current practices and regulatory compliance.

7. ATTACHMENTS
· Resolution No. 11688
City of Orange Page 2 of 2 Printed on 5/21/2026
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Agenda Item
Orange City Council
Item #: 10.4. 5/26/2026 File #: 26-0236
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Monica Espinoza, Human Resources Director

1. SUBJECT
Executive Management and Senior Management employees’ classification, compensation, and terms of employment

4. FISCAL IMPACT
The total cost is approximately $435,100 of which $362,800 is funded through the general fund.

These adjustments are included in the FY27 budget.

5. STRATEGIC PLAN GOALS
Goal 1: Maintain Strong Emergency and Safety Services
Goal 4: Improve Employee Retention and Recruitment

The proposed Resolution provides for a three percent (3%) cost of living adjustment to base salary effective June 28, 2026. This compensation pattern aligns with what other bargaining groups have received. The Resolution also incorporates language changes and updates that provide greater City of Orange Page 1 of 2 Printed on 5/21/2026
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Item #: 10.4. 5/26/2026 File #: 26-0236
clarity and conform the Resolution to current practices and regulatory compliance.

7. ATTACHMENTS
· Resolution No. 11688
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RESOLUTION NO. 11688

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF ORANGE RESCINDING RESOLUTION
NO. 11644 AND ALL AMENDMENTS THERETO

AND APPROVING PROVISIONS RELATING TO

THE CLASSIFICATION, COMPENSATION, AND

TERMS OF EMPLOYMENT OF EXECUTIVE

MANAGEMENT AND SENIOR MANAGEMENT
EMPLOYEES EFFECTIVE JULY 1, 2026 THROUGH
AND INCLUDING JUNE 30, 2027
WHEREAS, the employees covered by this Resolution constitute unrepresented management personnel; and
WHEREAS, the City Council has consulted with the City Manager and Human Resources Director concerning the proposed terms of employment contained herein; and WHEREAS, the City Council wishes to set forth the wages, hours, and terms of employment for the period of July 1, 2026, through and including June 30, 2027, for those management employees covered herein; and
WHEREAS, City staff is recommending establishing new classifications of Assistant City Clerk Services Director, Community & Library Services Director, Controller, Principal Plan Check Engineer, and a salary range adjustment to the Risk Management Analyst classification pending City Council budget FY27 adoption; and
WHEREAS, the classifications of Community Services Director and Library Services Director are obsolete and being proposed for elimination; and WHEREAS, all salary ranges for the classifications covered herein must be authorized by the City Council and published by the City in order for the salary range to be considered pensionreportable, pursuant to California Public Employees’ Retirement System law.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Orange hereby (1) rescinds Resolution No. 11644 and all amendments thereto; and (2) adopts the compensation and terms of employment through June 30, 2027, for Executive Management and Senior Management employees contained in Appendices A and B, as fully set forth herein, and furthermore (3) authorize staff to adjust the departmental salary and benefit accounts in the FY27 budget to reflect the cost of the provisions.

ADOPTED this 26th day of May 2026.

Daniel R. Slater, Mayor, City of Orange
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2 ATTEST:

Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange

STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
2281

EXECUTIVE MANAGEMENT
&

SENIOR MANAGEMENT

RESOLUTION
JULY 1, 2026 THROUGH JUNE 30, 2027
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TABLE OF CONTENTS
SECTION 1. BASIC COMPENSATION PLAN AND DEFINITIONS. 1
SECTION 2. SALARY AND WAGE SCHEDULE. 1
SECTION 3. ADMINISTRATION OF BASIC COMPENSATION PLAN. 2 SECTION 4. BEGINNING RATES. 2
SECTION 5. SERVICE. 2
SECTION 6. ADVANCEMENT WITHIN SALARY RANGES. 2
SECTION 7. REDUCTION IN SALARY STEPS. 3
SECTION 8. BILINGUAL ASSIGNMENT. 3
SECTION 9. LONGEVITY FOR SAFETY CHIEFS. 3
SECTION 10. EDUCATIONAL INCENTIVE PROGRAM. 4
SECTION 11. INCENTIVE PAY PLAN. 4
SECTION 12. PROMOTION. 5
SECTION 13. DEMOTION. 5
SECTION 14. REASSIGNMENT OF COMPENSATION RANGES. 5
SECTION 15. AT-WILL STATUS. 5
SECTION 16. ACTING TIME PAY. 6
SECTION 17. ADMINISTRATIVE LEAVE. 6
SECTION 18. HOLIDAYS. 7
SECTION 19. VACATION. 8
SECTION 20. PART-TIME, TEMPORARY, AND SEASONAL EMPLOYEES’ ELIGIBILITY FOR FRINGE BENEFITS. 9
SECTION 21. LEAVES OF ABSENCE. 10
SECTION 22. HEALTH INSURANCE. 16
SECTION 23. OTHER INSURANCES. 17
SECTION 24. RETIREMENT. 18
SECTION 25. OTHER FRINGE BENEFITS. 19
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TABLE OF CONTENTS (CONTINUED)
ii
SECTION 26. DIRECT DEPOSIT. 21
SECTION 27. TRAVEL EXPENSE ALLOWED. 21
SECTION 28. GRIEVANCE PROCEDURE. 21
SECTION 29. REIMBURSEMENT FROM CALIFORNIA OFFICE OF EMERGENCY SERVICES (CAL-OES). 22 SECTION 30. EFFECTIVE DATES. 22
APPENDIX A EXECUTIVE MANAGEMENT SALARY RANGES 23
APPENDIX B SENIOR MANAGEMENT SALARY RANGES 24
[Remainder of page intentionally left blank.]
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1 SECTION 1. BASIC COMPENSATION PLAN AND DEFINITIONS.

A. A basic compensation plan is established for all Executive and Senior Management employees of the City of Orange who are now employed or will in the future be employed in any of the classifications of employment listed in this Resolution and its Appendices.

B. The compensation for the City Manager and City Attorney shall be established by contract and they shall receive those benefits and be governed by all applicable rules and regulations related to those benefits provided for Executive Management.

C. Whenever the term "Department Head" is used, it shall be understood to include the City Manager and City Attorney when the personnel action affects a Department Head.

D. Whenever the term “Top Management” is used, it shall be understood to include all covered employees within this Resolution.

E. Whenever the term “Executive Management” is used, it shall be understood to include all classifications within Appendix A.

F. Whenever the term “Senior Management” is used, it shall be understood to include all classifications within Appendix B.

G. Except as amended by a written instrument formally approved by the City Council, the City Manager and City Attorney shall receive the fringe benefits that are afforded to Executive Management and shall have their compensation and terms of employment set forth herein.

SECTION 2. SALARY AND WAGE SCHEDULE.

The annual salaries for employees covered by this Resolution are hereby incorporated, and listed in Appendices A and B.

The attached salary and wage schedules shall constitute the basic compensation plan consisting of six (6) steps or rates of pay. The minimum length of service required for advancement to the next higher step is provided in Sections 5 and 6.

The City Manager reserves the right to grant an additional salary increase of up to five percent (5.0%) for any classifications described herein in Appendices A and B. Any such increases shall not exceed a total cost of one percent (1.0%) of payroll for Top Management employees.

In an effort to avoid compaction between classifications, the following classification shall be compensated with a salary differential as follows:

The Police Chief shall be paid at least ten percent (10.0%) above the base salary of the Police Captain classification.
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2 SECTION 3. ADMINISTRATION OF BASIC COMPENSATION PLAN.

The compensation ranges and steps contained in the attached salary schedule are annual compensation rates.

For all employees covered by this Resolution, the hourly rate of pay shall be the monthly rate multiplied by twelve (12) divided by two thousand eighty (2080) annual hours. In determining the hourly rate, compensation shall be calculated to the nearest one-half (½) cent.

Part-time employees who are scheduled to work an average of at least twenty (20) hours per week on a year-round basis may be considered for advancement to the next higher step upon completion of two thousand eighty (2080) hours of employment.

SECTION 4. BEGINNING RATES.

A new employee of the City shall be paid the rate shown in Step A in the range allocated to the class of employment for which the employee has been hired, except that on the request of the Department Head under whom the employee will serve, and with the authorization of the Human Resources Director, such employee may be placed in Steps B through F depending upon the employee's qualifications.

SECTION 5. SERVICE.

The word service, as used in this Resolution, shall be defined to mean continuous, full-time service in the employee’s present classification, service in a higher classification, or service in a classification allocated to the same salary range and having generally similar duties and requirements.

A lapse of service by any employee for a period of time longer than thirty (30) days by reason of resignation or discharge eliminates the accumulated length of service time of such employee for the purpose of this Resolution. Employees re-entering the service of the City shall be considered as a new employee, except that the employee may, at the discretion of the City, be re-employed within one (1) year and placed in the same salary step in the appropriate compensation range, and earn the same vacation accrual rate, as the employee was at the time of the separation of employment.

SECTION 6. ADVANCEMENT WITHIN SALARY RANGES.

The following regulations shall govern salary advancement:

A. Merit Advancement. An employee shall be considered for advancement through the salary range upon completion of the minimum length of service required. The effective date of such merit increase, if granted, shall be the first day of the next pay period following the completion of the length of service required for such advancement. Advancement through the salary ranges Steps A through F may be granted only for continuous, meritorious, and efficient service, and continued improvement by the employee in the effective performance of the duties of the position. Such merit advancement shall require the following:
1) The Department Head shall file with the Human Resources Director a Personnel Action Form and a completed Performance Evaluation form recommending the granting or denial of the merit increase and supporting such recommendation with specific reasons. 2286
3 If denied by the Human Resources Director, the reason for denial will be provided to the Department Head.
2) Advancements through the pay ranges Step A through Step F, shall occur, if granted, in yearly increments.
3) A lapse of service of thirty (30) continuous calendar days or more for any reason shall extend the due date for the merit performance evaluation by an equal number of days absent.

B. Special Merit Advancement. When an employee demonstrates exceptional ability and proficiency in the performance of duties, the Department Head may recommend to the Human Resources Director that the employee be advanced to a higher pay step without regard to the minimum length of service requirements contained in this Resolution. With concurrence of the City Manager, the Human Resources Director may, on the basis of a Department Head's recommendation, approve such an advancement.

SECTION 7. REDUCTION IN SALARY STEPS.

Any employee who is being paid on a salary step higher than Step A may be reduced by one (1) or more steps upon the recommendation of the Department Head, and with the approval of the Human Resources Director. Such reduction shall take place only after the employee has been notified of the reasons and has had an opportunity to respond. Procedure for such reduction shall follow the same procedure as outlined for merit advancements in Section 6, and such employee may be considered for re-advancement under the same provisions as contained in Subsection A of Section 6.

SECTION 8. BILINGUAL ASSIGNMENT.

Employees covered by this Resolution may be assigned by the Department Head, with approval of the Human Resources Director, to a bilingual assignment. The Department Head shall determine the number of bilingual assignment positions which are necessary based upon a demonstrable need and frequency of use. Employees on bilingual assignment shall receive an additional one hundred forty dollars ($140.00) per month for the duration of the assignment. Employees receiving bilingual assignment compensation may be required to take and pass a proficiency test on an annual or as needed basis as determined by the Human Resources Department. No permanency or seniority may be obtained in a bilingual assignment, and such assignment may be revoked at any time by the Human Resources Director or a duly authorized designee. This form of pay, also referred to as “Bilingual Premium”, shall be reported to CalPERS as special compensation, and is therefore compensation earnable for Classic Members pursuant to CalPERS Regulations, Section 571(a)(4), and pensionable compensation for members hired on or after January 1, 2013, as defined by the Public Employees’ Pension Reform Act of 2013 (PEPRA) pursuant to CalPERS Regulations, Section 571.1(b)(3). However, it is ultimately CalPERS who determines whether any form of pay is reportable special compensation.

SECTION 9. LONGEVITY FOR SAFETY CHIEFS.

A. In an effort to maintain equality with subordinate classifications, the Fire Chief shall be eligible for Longevity Pay as follows:
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4 Years of Service Monthly
Incentive
20 $550.00
25 $750.00
B. In an effort to maintain equality with subordinate classifications, the Police Chief shall be eligible for Longevity Pay as follows:

Years of Service Monthly
Incentive
15 $250.00
20 $500.00
25 $1,250.00
C. This form of pay, also referred to as “Longevity Pay”, shall be reported to CalPERS as special compensation, and is therefore compensation earnable for Classic Members pursuant to CalPERS Regulations, Section 571(a)(1), and pensionable compensation for New Members pursuant to CalPERS Regulations, Section 571.1(b)(1). However, it is ultimately CalPERS who determines whether any form of pay is reportable special compensation.

SECTION 10. EDUCATIONAL INCENTIVE PROGRAM.

A. Employees covered by this Resolution, other than the Police Chief and Fire Chief, with postgraduate degrees (i.e., Master’s degree or higher) shall be eligible to receive six hundred dollars ($600.00) per month.

B. In an effort to maintain equality with subordinate classifications, the Fire Chief shall receive five hundred fifty dollars ($550.00) per month for a Bachelor’s degree or seven hundred fifty dollars ($750.00) per month for a Master’s degree.

C. In an effort to maintain equality with subordinate classifications, the Police Chief shall receive seven hundred dollars ($700.00) for a Bachelor’s degree or nine hundred fifty dollars ($950.00) per month for a Master’s degree.

D. This form of pay, also referred to as “Educational Pay”, shall be reported to CalPERS as special compensation, and is therefore compensation earnable for Classic Members pursuant to CalPERS Regulations, Section 571(a)(2), and pensionable compensation for New Members pursuant to CalPERS Regulations, Section 571.1(b)(2). However, it is ultimately CalPERS who determines whether any form of pay is reportable special compensation.

SECTION 11. INCENTIVE PAY PLAN.

The City Manager may, for the employees covered by this Resolution, put into effect an incentive pay plan, the terms and conditions of which shall be at the City Manager’s full discretion. 2288
5 SECTION 12. PROMOTION.

When an employee is promoted to a position in a higher classification, the employee may be assigned to the step in the new salary range which provides for at least a five percent (5.0%) increase. With the approval of the Department Head and Human Resources Director, the employee may be placed in the step in the new salary range as will grant the employee an increase of at least one, but not more than three salary steps.

SECTION 13. DEMOTION.

When an employee is demoted to a position in a lower classification, the salary rate shall be fixed in the appropriate salary range for the lower classification in accordance with the following provisions:

A. The salary rate shall be reduced by at least one (1) step.

B. The new salary rate must be within the salary range for the classification to which the employee was demoted.

SECTION 14. REASSIGNMENT OF COMPENSATION RANGES.

Any employee who is employed in a classification which is assigned to a different pay range shall be retained in the same salary step in the new range as the employee previously held in the prior range, and shall retain credit for length of service in such step toward advancement to the next higher step; provided, however:

A. That if such retention results in the advancement of more than one (1) step, the Human Resources Director may at the time of reassignment, place the employee in a step which will result in an increase of only one step.

B. That if the reassignment is to a lower compensation range, the F step of which is lower than the existing rate of pay at the time of reassignment, the employee shall continue to be paid at the existing rate of pay until such time as the position is reassigned to a compensation schedule which will allow for further salary advancement, or until such time as the employee is promoted to a position assigned to a higher compensation range.

C. That if the reassignment is to a lower compensation range, the F step of which is higher than the existing rate of pay, the employee shall be placed in that step of the lower compensation range which is equivalent to the existing rate of pay, and shall retain credit for length of service previously acquired in such step toward advancement to the next higher step. If there is no equivalent step, the employee shall be placed in the step which is closest to, but not less than, the employee’s current salary step.

SECTION 15. AT-WILL STATUS.

Members of Top Management serve at the pleasure of the City Manager, with the exception of those members within the City Attorney’s Office who serve at the pleasure of the City Attorney. Consideration for advancement, reduction, demotion, termination, or reassignment shall be at the initiation of the City Manager or City Attorney, as applicable, and in accordance with the Orange Municipal Code. In addition, 2289
6 all employees covered by this Resolution are employed at-will and serve in accordance with Title 2 of the Orange Municipal Code.

SECTION 16. ACTING TIME PAY.

An employee shall receive acting time pay, as further defined below, at A Step of the higher class, or five percent (5.0%) above the employee's regular salary, whichever is greater, for work performed in the higher classification. The Department Head or the authorized designee shall assign the employee to work out of classification but shall notify the Human Resources Director prior to the assignment.

A. Temporary Upgrade Pay. When an employee is working out of classification due to an incumbent’s approved leave of absence, said employee shall receive a Temporary Upgrade Pay premium. Temporary Upgrade Pay, as defined by California Code of Regulations 571(a)(3), is “compensation to employees who are required by their employer or governing board or body to work in an upgraded position/classification of limited duration.” For Classic Members, the above form of compensation shall be reported to CalPERS as special compensation and therefore compensation earnable. However, it is ultimately CalPERS who determines if any form of pay is reportable special compensation. However, Temporary Upgrade Pay will not be reported to CalPERS as pensionable compensation for New Members hired on or after January 1, 2013, as defined by the Public Employees’ Pension Reform Act of 2013 (PEPRA).

B. Out-of-Class Appointment. Out-of-class appointments shall only be made for positions vacated due to voluntary resignation, promotion, demotion or termination. Government Code Section 20480 of the Public Employees' Retirement Law (PERL) defines an “out-of-class appointment” to mean an appointment to an upgraded position or higher classification by an employer or governing board or body in a vacant position for a limited duration. For purposes of this section, a “vacant position” refers to a position that is vacant during recruitment for a permanent appointment. A vacant position does not refer to a position that is temporarily available due to another employee's leave of absence (see “Temporary Upgrade Pay” above).

SECTION 17. ADMINISTRATIVE LEAVE.

Employees covered by this Resolution are exempt from Fair Labor Standards Act overtime provisions as executive, administrative, and professional employees. This Resolution establishes a pay system which provides all covered employees with sick leave and other leave which covered employees use for purposes of public accountability. However, the City will provide paid administrative leave as follows:

A. Regular full-time employees identified in Appendix A shall accrue eighty (80) hours of administrative leave annually for continuous service.

B. Regular full-time employees identified in Appendix B shall accrue sixty-three (63) hours of administrative leave annually for continuous service.

C. Employees hired after January 1st of each year shall receive a prorated portion of the administrative leave during their first calendar year of employment. 2290
7 D. The minimum charge to the employee's administrative leave account shall be one-quarter (¼) hour, while additional actual absence of over one-quarter (¼) hour shall be charged to the nearest one-half (½) hour.

E. Usage of administrative leave shall be at the convenience of the City with the approval of the respective Department Head or City Manager.

F. All administrative leave shall accrue January 1st of each year.

G. Annually, unused administrative leave at the end of the calendar year, and upon retiring from City service and entering CalPERS as a retired annuitant shall be deposited in the employee’s Retirement Health Savings Plan account as described in Section 24(C).

H. Unused administrative leave upon separation for reasons other than retirement shall be forfeited.

SECTION 18. HOLIDAYS.

Employees covered by this Resolution shall receive the following nine (9) hour paid holidays (10 hours for employees assigned to Fire or Police Departments):
1) January 1st (New Year’s Day)
2) Third Monday in January (Martin Luther King Jr. Day) 3) The third Monday in February (Presidents’ Day)
4) Last Monday in May (Memorial Day)
5) July 4th (Independence Day)
6) First Monday in September (Labor Day)
7) November 11th (Veterans Day)
8) Fourth Thursday in November (Thanksgiving Day)
9) Fourth Friday in November (day after Thanksgiving)
10) December 24th (Christmas Eve), if it falls on a Monday through Thursday 11) December 25th (Christmas Day)
A. Floating Holidays. In addition to the above, employees will have credited to their paid leave balance twenty-two and one half (22.5) floating holiday hours beginning January 1st of each year. Employees hired after January 1st of each year shall receive a prorated portion of the twenty-two and one half (22.5) floating holiday hours during their first calendar year of employment. The floating holiday hours shall be taken at the convenience of the City with the approval of the City Manager, Department Head or a duly authorized designee. Unused floating holiday hours at the end of the calendar year or upon separation from City service shall be deposited in the employee’s Retirement Health Savings Plan account as described in Section 24(C).

B. Holidays on Certain Days of the Week. In the event any of the above holidays, except Christmas Eve, fall on a Sunday, the following day will be taken in lieu of the actual date on which the holiday falls. When any of the above holidays fall on a Saturday, except Christmas Eve, the preceding Friday will be taken in lieu of the actual date on which the holiday falls.

When any of the above holidays falls on an employee’s regularly scheduled day off during the week, except Christmas Eve, employees will be credited with nine (9) hours (ten (10) hours 2291
8 for employees assigned to the Fire and Police Departments) of holiday compensatory time.

Accumulated holiday compensatory time must be used by the employee by June 30th of the same fiscal year in which it was accumulated. Unused holiday compensatory time shall be paid in cash to an employee upon separation of employment.

C. Eligibility to Receive Holiday Pay. In order to be eligible to receive holiday pay, an employee must have worked, or be deemed to have worked because of an approved absence, the employee's regularly scheduled day before and regularly scheduled day after the holiday.

Newly hired employees are provided with and are eligible to use floating holiday and fixed holiday hours, according to the guidelines established in this Section, and/or with approval of the Human Resources Director.

D. Holidays During Vacation. Should the holidays listed above fall during an employee's vacation period while an employee is lawfully absent with pay, the employee shall receive holiday pay and no charge shall be made against the employee's accumulated vacation.

SECTION 19. VACATION.

A. Vacation Accrual. All full-time regular employees described herein accrue paid vacation in accordance with the following schedules.
1) For Executive Management, the following schedule shall apply:

Years of Service Vacation Hours
Per Year Years of Service Vacation HoursPer Year
1 144 16 208
2 149 17 212
3 154 18 216
4 159 19 220
5 164 20 224
6 170 21 228
7 172 22 232
8 176 23 236
9 180 24 240
10 184 25 244
11 188 26 248
12 192 27 252
13 196 28 256
14 200 29 260
15 204 30 264
2) For Senior Management, the following schedule shall apply:

Years of Service Vacation Hours
Per Year Years of Service Vacation HoursPer Year
1 104 16 188
2 114 17 192
3 124 18 196
4 134 19 200
5 144 20 204
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9 6 148 21 208
7 152 22 212
8 156 23 216
9 160 24 220
10 164 25 224
11 168 26 228
12 172 27 232
13 176 28 236
14 180 29 240
15 184 30 244
B. Vacation Usage and Accumulation. Vacation shall be taken at the convenience of the City with the approval of the Department Head. Where possible, such vacation should be taken annually and not accumulated from year to year. Employees shall not accumulate vacation in excess of the equivalent number of hours earned in the immediately preceding 24-month period. Employees with less than one (1) year’s continuous service shall accrue vacation but may not use vacation until successful completion of six (6) months of active City service is complete, except with the approval of the City Manager, or in the event of a City Hall holiday closure, with approval of the Human Resources Director. Employees whose accumulated vacation reaches the above-defined limit shall receive no additional vacation accrual until such time as the accumulated vacation hours fall below the allowable limit.

C. Vacation Conversion. An employee may convert up to 50% of their current annual vacation accrual into pay in lieu of time off with pay on an annual basis. An employee requesting such conversion must meet the eligibility requirements as set forth in Section 19(B) and may convert twice in a fiscal year, within the cap provisions stated above. Any exception to this provision requires the approval of the Human Resources Director.

On or before every December 15th, a qualified employee who elects to cash out accrued vacation for the following year shall submit written request to the Human Resources Department stating their irrevocable election(s).

The City shall administer the cash out twice annually every June and December. The City shall make the cash outs in the second paycheck in June and December. Such cash outs shall be paid at the employee’s net salary hourly rate of pay.

D. Vacation Payout Upon Termination. Employees who terminate their employment with the City shall be paid for all accrued vacation, if any, and the prorated portion of their final accrual.

Prorated vacation shall be on the basis of one-twelfth (1/12) of the employee's annual vacation pay for each full month of service.

SECTION 20. PART-TIME, TEMPORARY, AND SEASONAL EMPLOYEES’ ELIGIBILITY FOR FRINGE BENEFITS.

A. Definitions. Nothing contained herein shall guarantee any employee a specified number of hours per day or days per week or weeks per year or months per year of work. 2293
10 1) Regular part-time employees shall be those employees scheduled in the budget to work twenty (20) or more hours per week on a year-round basis (52 weeks minus approved leave).
2) Temporary part-time employees shall be those employees scheduled in the budget to work less than twenty (20) hours per week on a year-round basis (52 weeks minus approved leave).
3) Seasonal employees shall be those employees who are scheduled in the budget to work on less than a year-round basis regardless of hours worked.

B. Entitlement to Fringe Benefits Based Upon Proration of Hours. Regular part-time employees shall receive fringe benefits in proportion to the number of hours an employee is scheduled to work to the normal forty (40) hour week on an annual basis.

The annual schedule for all eligible part-time employees shall be the schedule which is included in the City's approved budget or a schedule which is designated by Management at the commencement of the employee's employment with the City. This formula of proration shall apply to holiday pay, vacation, sick leave, flexible benefit contribution, disability insurance contribution, money purchase retirement plan, and CalPERS retirement contribution.

Regular part-time employees may receive step increases provided they have performed two thousand eighty (2080) hours of service.

C. Temporary and seasonal employees shall be entitled to receive no fringe benefits provided for in the resolution or in any resolution of the City unless otherwise required by law.

SECTION 21. LEAVES OF ABSENCE.

A. Leave of Absence Without Pay. For all regular employees as described herein, the following Leave Without Pay procedure shall apply:
1) After all available leave benefits, including vacation, administrative leave, floating holiday, compensatory time, sick leave, and other leave benefits have been completely used, a regular employee, not under suspension, may make written application to the Department Head for leave without pay or benefits. No such leave will be considered without a written application from the employee requesting leave. 2) If the Department Head and the Human Resources Director agree that such leave is merited and in the interest of the City, leave may be granted for a period not to exceed six (6) months following the date of expiration of all other allowable leave benefits.

The employee shall not be continued “in service” as that term is defined in this Resolution.
3) An employee is ineligible to receive a step increase while on a leave of absence without pay. Step increases shall be delayed by the amount of time an employee is out on leave without pay status.
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11 4) No employment or fringe benefits such as sick leave, vacation, health insurance, retirement, or any other benefits shall accrue to any employee on a leave of absence without pay except as denoted under Section 21(I). During such leave in excess of five (5) working days, no seniority shall be accumulated.
5) Subject to and consistent with the conditions of the group health, life or disability plan, coverage may be continued during a leave, provided direct payment of the total premium by the employee is made through and as prescribed by the Payroll Division.

The City will pay up to six (6) months of the Flexible Benefit Plan contribution for employees who are on long-term disability leave.
6) At the end of any approved leave, if the employee desires additional leave, written application must be made through the Department Head to the Human Resources Director at least ten (10) days before the end of the approved leave, stating the reasons why the additional leave is required and why it would be in the best interests of the City to grant such leave of absence. If such additional leave is merited and would still preserve the best interests of the City, the Human Resources Director may approve such extension of the leave of absence for a period up to, but not to exceed, an additional six (6) months.
7) If the employee does not return to work prior to or at the end of such leave of absence or extension of leave of absence, the employee shall be considered as having abandoned their employment with the City and shall be terminated. 8) An employee on leave of absence must give the City at least seven (7) days’ written notice of their intent to return to work prior to returning to work. 9) Any employee who engages in outside employment during said leave of absence without prior notification and approval of the Human Resources Director and Department Head may be subject to termination.
10) Any employee who falsifies the reason for the request for said leave of absence may be terminated.
11) Such leave shall be granted on the same basis for pregnancy, childbirth, and other medically related conditions, except that such an employee shall retain their seniority rights.
12) Forms setting forth the benefits available or such other pertinent information shall be maintained for distribution in the Human Resources Department. 13) The City Manager will allow an employee to take a leave of absence without pay during a City Hall holiday closure without having to exhaust all accrued leave benefits on the books. During said closure, employees will not see a reduction in benefits, including no loss of eligibility for holiday pay, if Leave Without Pay hours are used during the closure (i.e. the day after Christmas and/or working day before New Year’s day.) B. Jury Duty and Services as Witness for City. When required to serve on a jury, all employees shall be provided with paid time off for a period of actual service required on the jury, provided 2295
12 all jury fees paid to the individual employee, less allowed automobile expenses, are turned over to the City. Once an employee has completed jury service, the employee must provide the Certificate of Jury Service to the immediate supervisor to qualify for jury duty compensation. If an employee is called as a witness on behalf of the City, the employee shall receive their normal pay for the time spent by the employee serving as a witness for the City.

An employee shall be required to pay any witness fees that accrue to the employee for witness service to the City as a condition of receiving normal pay while serving as a witness for the City. Any exceptions to this provision must meet the approval of the Human Resources Director.

C. Military Leave of Absence. If an employee is deployed or required to attend military training, the employee shall be entitled to military leave of absence under the provisions of Federal and State law, including Uniformed Services Employment and Re-employment Rights Act (USERRA) and the Military and Veterans' Code. Employees must provide a copy of their military orders, and Leave and Earnings Statements (LES) if requested, to the Human Resources Department to qualify for a military leave of absence. Any exceptions to this provision shall be considered on a case-by-case basis, with final approval of the Human Resources Director.

D. Sick Leave. Sick leave with pay shall be allowed, credited, and accumulated in accordance with the following:
1) For employees working a regular forty (40) hour week, eight (8) hours of sick leave will accrue for each month of continuous service.
2) All non-benefited employees shall receive sick leave as required by State law. 3) Sick leave will be charged at the rate of one-quarter (¼) hour for each one-quarter (¼) hour an employee is absent.
4) Employees who promote to Top Management shall have all their sick leave hours placed into a sick leave accrual bank.
5) Any employee eligible for sick leave with pay may use such leave for the following reasons:
(a) Medical, dental, and vision appointments during work hours when authorized by the Department Head or a duly authorized designee; and/or (b) Personal illness or physical incapacity resulting from causes beyond the employee's control, in addition to pregnancy, childbirth, and other medically related conditions.
6) Sick Leave Application. Sick leave may be applied only to absence caused by illness or injury of an employee and may not extend to absence caused by illness or injury of a member of the employee's family except as provided for in Subsection E below. 7) Sick Leave Charged. In any instance involving use of a fraction of a day's sick leave, the minimum charged to the employee's sick leave account shall be one-quarter (¼) 2296
13 hour, while additional actual absence of over one-quarter (¼) hour shall be charged to the nearest one-half (½) hour. Sick leave shall only be used for the purposes stated and the Department Head shall be responsible for control of employee abuse of sick leave.

Employees may, upon prior notice and in the complete discretion of the Department Head, be required to furnish a certificate issued by a licensed physician or nurse or other satisfactory written evidence of any subsequent illness. 8) Sick Leave Payout Program. Unused sick leave shall be paid off according to the following:
(a) Employees with sick leave usage of zero (0.0) to twenty-seven (27.0) hours per payroll calendar year will have the option to convert up to forty (40) hours of their unused sick leave to vacation in the first pay period of the following payroll calendar year.
(b) Employees with sick leave usage of twenty-seven and one quarter (27.25) to thirty-six (36.0) hours per payroll calendar year may convert up to thirty (30) hours of unused sick leave to vacation the following year. (c) Employees must have a minimum balance of one hundred eighty (180) hours of sick leave, combining both sick leave banks, available after conversion. In addition, no hours will be converted to vacation if said conversion places the employee’s vacation bank over the maximum allowable accrual. Conversion of sick leave to vacation shall occur in the first pay period of the following payroll calendar year based upon sick leave usage during the previous payroll calendar year.
(d) Any sick leave converted to vacation shall be subject to the provisions described in Section 19. The employee must file a sick leave payout designation form each year, if eligible for the conversion of unused sick leave to vacation. If no designation form is filed, the hours will automatically remain in the employee's new sick leave accumulation account. Employees shall still be subject to the maximum vacation accrual at any given time equivalent to 24 months’ worth of accrued hours. Any request to convert which exceeds the maximum vacation accrual allotted shall not be converted to vacation and shall remain in the employee’s sick leave bank.
(e) Upon retirement from employment with the City and entering CalPERS as a retired annuitant, an employee with a minimum of five (5) years of continuous service to the City shall receive pay for fifty percent (50%) of all unused sick leave hours. The cash value of this unused sick leave payout will be deposited into the employee’s Retirement Health Savings Plan account, as described in Section 24(C).
(f) Upon separation of employment from the City for any reason, other than retirement as noted in the preceding paragraph an employee shall receive no pay for the first one hundred (100) hours (0 to 100 hours) of accrued sick leave, 2297
14 but shall receive twenty-five percent (25%) pay for up to the next one hundred (100) hours, (101 to 200 hours) of accrued sick leave, and fifty percent (50%) pay of any remaining sick leave (201 to 352 hours). No pay shall be received for any accruals higher than three hundred fifty-two (352) hours. (g) Upon the death of an employee while employed by the City, one hundred percent (100%) of all accrued sick leave benefits up to three hundred fifty-two (352) hours shall be paid to the beneficiary of the deceased employee. Payment will be made when proper authorization for payment is received from the estate of the deceased employee.

E. Family Leave. In accordance with the California Family Sick Leave and Paid Sick Leave Acts, an employee is allowed up to forty-eight (48) hours of family leave per calendar year for family illness which shall be charged against the employee's accumulated sick leave. Family as used in this subsection is limited to any relation by blood, marriage or adoption who is a member of the employee’s household (under the same roof); and any parent, substitute parent, parent-inlaw, spouse, registered domestic partner, child, brother, sister, grandchild or grandparent of the employee, regardless of residence. Part-time benefited employees are allowed to use up to one-half of their annual accrual of sick leave for family leave purposes.

F. Bereavement Leave. Regular full-time employees shall be entitled to take up to five (5) days of paid City bereavement leave per incident. The following terms and conditions apply:
1) Bereavement leave may only be used upon the death or critical illness where death appears to be imminent of the employee's immediate family. "Immediate family" as used in this subsection, shall be limited to any relation by blood, marriage or adoption, who is a member of the employee's household; and any parent, legal guardian, parentin-law, brother-in-law, sister-in-law, grandparent, grandchild, aunt, uncle, spouse, registered domestic partner, child, brother, or sister of the employee regardless of residence.
2) Days of absence due to bereavement leave shall not exceed five (5) working days per incident and shall not be deducted from the employee's accumulated sick leave. An employee on bereavement leave shall inform the immediate supervisor of the fact and the reasons therefor as soon as possible. Failure to inform the immediate supervisor within a reasonable period of time may be cause for denial of bereavement leave with pay for the period of absence.

G. Workers’ Compensation Leave for Safety Employees. For the classifications of Fire Chief and Police Chief, salary continuance, including Labor Code Section 4850 leave, will be provided in accordance with current State Workers’ Compensation laws and regulations.

H. Workers’ Compensation Leave for Non-Safety Employees. For the remaining classifications described in Appendices A and B herein, Workers’ Compensation leave shall be granted as follows:
1) Employees who incur a work-related injury or illness will be eligible to receive Workers’ Compensation benefits according to the State of California’s Division of 2298
15 Workers’ Compensation (DWC) laws and regulations and benefits provided pursuant to this MOU.
2) Temporary Disability. A regular employee shall be granted Temporary Disability in accordance with the current State Workers’ Compensation laws and regulations. When a regular employee is eligible to receive Temporary Disability payments, the City will contribute additional compensation to allow the employee to receive one hundred percent (100%) of their regular rate of pay, or provide full salary continuance, for three hundred and sixty-five (365) calendar days. Temporary Disability in excess of three hundred sixty-five (365) days will be provided subject to current State Workers’ Compensation laws and regulations.
3) Claims Pending Compensation Determination. When a claim is pending a compensability decision while in a delayed or denied status, and the employee is losing time off from work, the employee can use their own accruals (sick, vacation, compensatory time, etc.). If the claim is accepted, the employee’s accruals will be credited based on the dates that meet the Temporary Disability criteria under the State of California’s Division of Workers’ Compensation.
4) Physician Pre-Designation. Before a work-related injury, an employee may elect to pre-designate a qualified medical provider if done in accordance with the State of California’s Division of Workers’ Compensation laws and regulations. 5) Fringe Benefits. An employee receiving Temporary Disability benefits will continue to receive the City’s contribution to the employee’s medical, dental, vision, other applicable insurances. If the employee has exhausted Temporary Disability benefits, the employee shall be responsible for paying the full premium for the employee’s medical, dental, vision, and other applicable insurances.

An employee receiving temporary disability payments in accordance with the current State of California Division of Workers’ Compensation laws and regulations may use a prorated amount of accumulated leave (including sick leave, vacation, compensatory time, etc.) to supplement temporary disability payments to reach the amount equal to the employee’s full regular pay until the employee’s leave balances reach zero (0). At that time, the employee would commence an unpaid leave of absence.

I. Family Care and Medical Leave (FCML). State and Federal laws require the City to provide family and medical care leave for eligible employees. The following provisions set forth employees' and employer's rights and obligations with respect to such leave. Rights and obligations which are not specifically set forth below are set forth in the Department of Labor regulations implementing the Federal Family and Medical Leave Act of 1993 (FMLA) and the regulations of the California Fair Employment and Housing Commission implementing the California Family Rights Act (CFRA) (Government Code Section 12945.2). Unless otherwise provided, "Leave" under this article shall mean leave pursuant to the FMLA and CFRA. An employee's request for leave is subject to review and final approval of the Human Resources Director.
1) Amount of Leave. Eligible employees are entitled to a total of twelve (12) work weeks of leave during any 12-month period. An employee's entitlement to leave for the birth or 2299
16 placement of a child for adoption or foster care expires twelve (12) months after the birth or placement.

The twelve (12) month period for calculating leave entitlement will be a "rolling period" measured backward from the date leave is taken and continues with each additional leave day taken. Thus, whenever an employee requests leave, the City will look back over the previous twelve (12) month period to determine how much leave has been used in determining how much leave a member is entitled to.
2) Use of Other Accrued Leaves While on Leave. If an employee requests leave for any reason permitted under the law, the employee must exhaust all accrued leaves (except sick leave) in connection with the leave. This includes vacation, holiday, and other compensatory accruals. If an employee requests leave for the employee’s own serious health condition, in addition to exhausting accrued leave, the employee must also exhaust sick leave. The exhaustion of accrued leave will run concurrently with the Family Care and Medical Leave.
3) Required Forms. Employees must fill out required forms, available in the Human Resources Department, including: Request for Family or Medical Leave; Medical Certification; Authorization for Payroll Deductions for benefit plan coverages (if applicable); and Fitness-for-Duty to return from leave.

SECTION 22. HEALTH INSURANCE.

The City contracts with CalPERS to make available those health insurance benefits provided under the Public Employees' Medical and Hospital Care Act (PEMHCA).

A. Retired Annuitant. The City shall contribute toward the payment of premiums under the CalPERS Health Benefits Plan to each eligible retired annuitant of CalPERS to the extent required by law, which is one hundred sixty-two dollars ($162.00) per month effective January 1, 2026. contribution shall be adjusted annually on January 1st to the amount set by the CalPERS Board of Administration.

B. Flexible Benefits Plan. The City shall provide a Section 125 Flexible Benefits Plan for active full-time and part-time eligible employees and pay the following monthly amounts to provide funds for optional health plans, dental plans, vision plans, health care reimbursement, dependent care, or cash as established by the Internal Revenue Service. The following amounts include the minimum amount required under PEMCHA, which is one hundred sixty-two dollars ($162.00) per month. This contribution shall be adjusted annually on January 1 st to the
amount set by the CalPERS Board of Administration.

C. Any amount in excess of the amount designated in Section 22B necessary to maintain benefits under any benefits plan selected by the employee shall be borne by the employee.

Effective Date Executive
Management
Senior
Management
January 1, 2026 $2,540.00 $2,230.00
2300
17 D. An employee cannot be enrolled in the CalPERS Health Benefits Plan if a spouse is enrolled in the City or enrolled in an agency with CalPERS health, unless the employee (or the spouse) is enrolled without being covered as a family member. Additionally, an employee may choose not to be enrolled in the Health Benefits Plan. If an employee chooses not to be enrolled in the health plan, the employee must provide proof, as determined by the Human Resources Director, that comparable medical insurance is in full force and effect. Based on determination that insurance is in full force and effect, eligible employees shall receive the amount designated below.
1) Employees who were members of Top Management on or before December 31, 2020, OR have a hire date prior to July 1, 2019 (with the exception of the Police Chief and Fire Chief), shall receive indefinitely a capped fixed amount towards the Flexible Benefit Plan as follows: Executive Management shall receive two thousand two hundred sixty five dollars ($2,265.00) per month, and members of Senior Management shall receive one thousand nine hundred fifty five dollars ($1,955.00) per month. 2) Employees in the classifications of Police Chief or Fire Chief with a hire date prior to March 29, 2020, shall receive indefinitely a capped fixed amount of two thousand two hundred sixty-five dollars ($2,265.00) per month towards the Flexible Benefit Plan. 3) For employees that do not meet the criteria of paragraphs 1 or 2 above, Executive Management shall receive seven hundred fifty dollars ($750.00) per month, and members of Senior Management shall receive five hundred dollars ($500.00) per month.

In the event an employee loses group medical insurance (with documentation), the employee must enroll in the CalPERS Health Benefits Plan pursuant to their rules and regulations.

Failure to do so within sixty (60) days of losing group medical insurance shall result in the City seeking reimbursement of monthly waiver amounts paid to the employee.

SECTION 23. OTHER INSURANCES.

A. Life Insurance.
1) For Executive Management, the City shall contribute the full premium towards a two hundred thousand dollar ($200,000.00) life insurance benefit. 2) For Senior Management, the City shall contribute the full premium towards a one hundred thousand dollar ($100,000.00) life insurance benefit.

B. Disability Insurance. The City shall provide a long-term disability plan with a long-term disability benefit of sixty-six and two-thirds percent (66 2/3%) of salary, after a sixty (60) day elimination period, to a maximum of twelve thousand dollar ($12,000.00) per month for Executive Management, and a maximum of ten thousand dollar ($10,000.00) per month for Senior Management.

C. Medicare Insurance. The City shall pay for the employee's portion of the contribution for Medicare coverage for all employees hired after March 31, 1986. 2301
18 SECTION 24. RETIREMENT.

A. The City participates in the California Public Employees’ Retirement System (CalPERS). This participation shall include, but is not limited to, the following retirement benefits:
1) Miscellaneous Retirement Formula – New Members. Miscellaneous employees who are New Members of CalPERS as defined by California Government Code Section 7522.04(f) are subject to the 2% @ age 62 retirement formula as set forth in California Government Code Section 7522.20. These New Members are subject to the three (3) year final compensation measurement period as set forth in California Government Code Section 7522.32. These New Members shall contribute half of normal cost of retirement as determined by CalPERS from their pensionable compensation, on a pretax basis, as set forth in California Government Code Section 7522.30. In all other respects, New Members shall be subject to the terms and requirements of Public Employees’ Pension Reform Act (PEPRA).
2) Miscellaneous Retirement Formula – Classic Members. Miscellaneous employees who are not defined as New Members as outlined in Subsection 1 above are defined as Classic Members of CalPERS and are subject to the 2.7% @ age 55 retirement formula as set forth in Section 21354.5 of the California Government Code. These Classic Members are subject to the one (1) year final compensation measurement period set forth in California Government Code Section 20042. These Classic Members shall contribute 8% of their compensation earnable, on a pre-tax basis. 3) Safety Retirement Formula – New Members. Safety employees who are New Members of CalPERS as defined by California Government Code Section 7522.04(f) are subject to the 2.7% @ age 57 retirement formula as set forth in California Government Code Section 7522.25(d). These New Members are subject to the three (3) year final compensation measurement period set forth in California Government Code Section 7522.32. These New Members shall contribute half of normal cost of retirement as determined by CalPERS from their pensionable compensation, on a pre-tax basis, as set forth in California Government Code Section 7522.30(c). In all other respects, New Members shall be subject to the terms and requirements of PEPRA. 4) Safety Retirement Formula – Classic Members. Safety employees who are not defined as New Members as outlined in Subsection 3 above are defined as Classic Members of CalPERS and are subject to the 3% @ age 50 retirement formula as set forth in Section 21362.2 of the California Government Code. These Classic Members are subject to the one (1) year final compensation measurement period as set forth in California Government Code Section 20042. These Classic Members shall contribute 9% of their compensation earnable, on a pre-tax basis.
5) 1959 CalPERS Survivor Benefit. The City provides the 1959 CalPERS Survivor Benefit at the Fourth Level Option (California Government Code Section 21574) for all covered employees. Employees shall pay their two dollar ($2.00) monthly contribution through payroll deduction. The City shall pay the employer portion subject to the following limit: in the event the employer portion exceeds six dollars ($6.00) monthly, employees shall pay any portion of the employer portion that exceeds six dollars ($6.00) monthly.
2302
19 B. Money Purchase Retirement Plan. The City provides a Money Purchase Retirement Plan for employees covered by this Resolution. The City shall contribute an amount equal to three percent (3.0%) of the employees' base salary as shown in Appendices A and B toward an IRS Section 401(a) account. In lieu of this City provided benefit, the employee may elect to have added to the employee’s base salary an additional three percent (3.0%), however this three percent (3.0%) is not reported to CalPERS as pensionable compensation. This election can be made only upon initial employment and is irrevocable.

C. Retirement Health Savings Plan. Effective October 1, 2002, the City Council approved a Retirement Health Savings Plan for employees covered by this Resolution. Effective January 1, 2008, all Top Management employees are required to participate in the plan by making the following tax-deferred contributions to the plan:
1) The cash value of the employee’s unused floating holiday hours at the end of each calendar year or upon separation from City service;
2) The cash value of the employee’s unused administrative leave balance at the end of each calendar year or upon retirement from City service and entering CalPERS as a retired annuitant; and
3) The full cash value of the employee’s unused sick leave payout upon retirement from City service (i.e., 50% of all unused sick leave hours for qualified employees) and entering CalPERS as a retired annuitant.

SECTION 25. OTHER FRINGE BENEFITS.

A. Wellness Program. Senior Management employees may receive up to five hundred fifty dollars ($550.00) per fiscal year, and Executive Management may receive up to eight hundred fifty dollars ($850.00), towards reimbursement for items 1, 2, 3, and/or 4 below. Requests for the items below must be approved, prior to purchase or participation, by the Human Resources Director.
1) Membership in a health/fitness club.
2) Participation in a weight loss/smoking cessation/wellness/fitness program. 3) Fitness equipment (home gym equipment).
4) An annual medical examination/scan where the content and extent of the examination of each individual shall be determined by the physician in charge and shall be tailored to the individual's particular needs.

The City will not reimburse employees for any of the above listed activities for family/dependent health related expenses. Employees with a future separation date on file are ineligible for this benefit.

B. Educational Assistance & Professional Development. Educational assistance and Professional Development payments to an employee shall not exceed one thousand five hundred dollars 2303
20 ($1,500.00) in any one fiscal year and the employee must still be employed by the City when the course or activity is completed. Participation and/or purchase must be approved in advance by the Department Head and the Human Resources Director. Employees with a future separation date on file are ineligible for this benefit.

The City will reimburse employees for the cost of tuition, textbooks, parking fees, and health fees required for approved community college and college courses, as well as job-required licensing, testing, renewal, and registration fees. An approved course is one designated to directly improve the knowledge of the employee relative to their specific job, and must be approved by the Department Head and the Human Resources Director prior to registration.

Full reimbursement up to the amount specified below will be provided based upon completion of the approved course(s) with a final grade of C or better.

The City will also reimburse employees for the cost of activities which aid in their professional development. Reimbursable activities include the following:
1) Attendance at job-related professional conferences and seminars; 2) Payment of membership dues in community and professional organizations; and 3) Purchase of job-related professional journals, books, and other written materials which further their knowledge and improve their effectiveness in their duties.

The above reimbursable activities are intended to recognize and encourage staff to pursue educational and public relations-oriented activities beyond those normally budgeted for them by their departments and in which they are directed to participate. Approved activities are those which may be expected to further their knowledge of their jobs and the Orange community and which contribute to their improved effectiveness.

Individual departments may continue to budget funds for staff attendance at professional conferences and seminars, for payment of professional membership dues, and for the purchase of books, journals, and related written materials which enhance the staff's knowledge.

C. Uniforms. The City shall pay and report to CalPERS the following values for uniform expenses:
one thousand dollars ($1,000.00) per year for the Fire Chief and Police Chief. This form of pay, also referred to as “Uniform Allowance”, shall be reported to CalPERS as special compensation, and is therefore compensation earnable for Classic Members pursuant to CalPERS Regulations, Section 571(a)(5). This uniform expenditure will not be reported to CalPERS as pensionable compensation for New Members hired on or after January 1, 2013, as defined by PEPRA.

D. Rideshare Incentive Program. An employee may receive thirty dollars ($30.00) per month and eight (8) hours compensatory time every six (6) months for carpooling, using public transportation, biking, walking, or other approved modes of transportation to and from the work-site. To qualify for these incentives, an employee must use one of the above forms of transportation seventy percent (70%) of commuting time. This thirty dollar ($30.00) per month compensation is not pension reportable pursuant to CalPERS Regulations.

E. Technology Stipend. In lieu of being provided a City-issued cell phone pursuant to Section

1.63 of the City’s Administrative Policy Manual, designated employees shall receive fifty 2304
21 dollars ($50.00) per month as reimbursement for any and all cost related to the purchase and use of a cell phone for City-related business. For purposes of this section, designated employees are those that the Department Head have determined are required to carry cell phones so that they may be contacted when they are away from their office phone or computer. This fifty dollar ($50.00) per month compensation is not pension reportable pursuant to CalPERS Regulations.

SECTION 26. DIRECT DEPOSIT.

All employees must participate in the City’s direct deposit paycheck program.

SECTION 27. TRAVEL EXPENSE ALLOWED.

A. Mileage Reimbursement. Expense claims for the use of private automobiles must be authorized by the Department Head, and submitted to the Accounts Payable Division of the Finance Department for reimbursement. Such use, where mileage is reimbursed, will be reimbursed at the rate per mile allowed under the current IRS regulations.

B. Out-of-City Travel. If the estimated expense of contemplated travel outside of the City is too great to expect the employee to finance the trip and be reimbursed upon the employee’s return, the City Manager may authorize advance payment of the estimated amount of the travel expense to the employee.

C. Economy class airfare will be considered standard for out-of-town travel.

D. Use of personal cars for out-of-City trips, within the State, may be approved by the City Manager when use of commercial transportation is not available or practical. If an employee prefers to use a personal car, the employee may be reimbursed mileage expenses as long as the expenses do not exceed the amount of the cost of the commercial transportation.

E. Transportation and Expense Charges. Expenses for air, rail, or public transportation will be allowed whenever such transportation is necessary for conduct of City business. In addition, the following expenses and charges will be allowed, whenever necessary, for the conduct of City business.
1) Expenses will be allowed for adequate lodging. Hotel accommodations shall be appropriate to the purpose of the trip and must be approved by the Department Head. 2) Telephone charges will be allowed for official calls. 3) Expenses for meals will be reimbursed according to Administrative Policy 4.13.

SECTION 28. GRIEVANCE PROCEDURE.

Any employee covered by this Resolution who wishes to file a grievance should follow the procedures outlined in the City’s Employee Handbook.
2305
22 SECTION 29. REIMBURSEMENT FROM FEMA/CALIFORNIA OFFICE OF EMERGENCY SERVICES (CAL-OES).

Salary-exempt employees covered under this Resolution shall be compensated at an overtime rate, portalto-portal, while in the course of their employment and away from their official duty station and assigned to an emergency incident, in support of an emergency incident, or pre-positioned for emergency response during a local emergency proclaimed by the City Manager pursuant to Orange Municipal Code § 2.68, or during any State or federally declared emergency.

SECTION 30. EFFECTIVE DATES.

This Resolution and Appendices hereto shall be effective as of July 1, 2026 and shall continue in full force and effect until June 30, 2027 unless otherwise amended. [Remainder of page intentionally left blank.]
2306
23 APPENDIX A

EXECUTIVE MANAGEMENT

MONTHLY SALARY RANGES
EFFECTIVE JUNE 29, 2025

2.0% Across the Board Salary Increase

CLASSIFICATION TITLE RANGE STEP
A
STEP
B
STEP
C
STEP
D
STEP
E
STEP
F
Administrative Services Director 758 15635 16434 17269 18152 19077 20050 Assistant City Manager 767 16353 17189 18063 18986 19954 20971 City Clerk Services Director 662 9685 10181 10698 11244 11818 12420 Community Development Director 748 14873 15634 16428 17268 18148 19073 Community Services Director* 743 14507 15249 16024 16842 17701 18604 Finance Director 748 14873 15634 16428 17268 18148 19073 Fire Chief 773 16851 17712 18613 19563 20561 21609
Human Resources Director 743 14507 15249 16024 16842 17701 18604 Library Services Director* 713 12491 13129 13797 14502 15241 16018 Police Chief 794 18714 19671 20671 21726 22835 23999
Public Works Director 748 14873 15634 16428 17268 18148 19073

EXECUTIVE MANAGEMENT

ANNUAL SALARY RANGES
EFFECTIVE JUNE 28, 2026

3.0% Cost of Living Adjustment
CLASSIFICATION TITLE A/1 B/2 C/3 D/4 E/5 F/6
ADMINISTRATIVE SERVICES DIRECTOR $193,249 $203,124 $213,445 $224,359 $235,792 $247,818 ASSISTANT CITY MANAGER $202,123 $212,456 $223,259 $234,667 $246,631 $259,202 CITY CLERK SERVICES DIRECTOR $119,707 $125,837 $132,227 $138,976 $146,070 $153,511 COMMUNITY DEVELOPMENT DIRECTOR $183,830 $193,236 $203,050 $213,432 $224,309 $235,742

COMMUNITY & LIBRARY SERVICES
DIRECTOR* $193,249 $203,124 $213,445 $224,359 $235,792 $247,818 FINANCE DIRECTOR $183,830 $193,236 $203,050 $213,432 $224,309 $235,742 FIRE CHIEF $208,278 $218,920 $230,057 $241,799 $254,134 $267,087 HUMAN RESOURCES DIRECTOR $179,307 $188,478 $198,057 $208,167 $218,784 $229,945 POLICE CHIEF $231,305 $243,134 $255,494 $268,533 $282,241 $296,628 PUBLIC WORKS DIRECTOR $183,830 $193,236 $203,050 $213,432 $224,309 $235,742 *Community Services Director and Library Services Director are reclassified and combined effective FY27. 2307
24 APPENDIX B

SENIOR MANAGEMENT

MONTHLY SALARY RANGES
EFFECTIVE JUNE 29, 2025

2.0% Across the Board Salary Increase

CLASSIFICATION TITLE RANGE STEP
A
STEP
B
STEP
C
STEP
D
STEP
E
STEP
F
Accounting Manager 652 9214 9686 10178 10697 11244 11816 Administrative Analyst I 572 6183 6498 6830 7178 7544 7929 Administrative Analyst II 592 6831 7181 7545 7931 8336 8760 Administrative Manager 642 8766 9215 9682 10177 10696 11242 Assistant City Attorney I 698 11590 12183 12802 13456 14143 14864 Assistant City Attorney II 708 12183 12806 13457 14145 14866 15624 Assistant Community Devel. Director 706 12062 12679 13324 14004 14718 15469 Assistant Community Services Director 693 11305 11883 12487 13125 13794 14498 Assistant Field Services Manager 673 10232 10755 11302 11879 12485 13121 Assistant Finance Director 693 11305 11883 12487 13125 13794 14498 Assistant Human Resources Director 693 11305 11883 12487 13125 13794 14498 Assistant Library Services Director 652 9214 9686 10178 10697 11244 11816 Assistant Public Works Director 718 12806 13461 14145 14868 15626 16423 Assistant to the City Manager 642 8766 9215 9682 10177 10696 11242 Assistant Water Manager 673 10232 10755 11302 11879 12485 13121 Budget Manager 642 8766 9215 9682 10177 10696 11242
Budget Officer 632 8340 8766 9211 9682 10176 10694
Building and Safety Manager 673 10232 10755 11302 11879 12485 13121 Chief Building Official 693 11305 11883 12487 13125 13794 14498 Crime Analyst 590 6764 7109 7470 7852 8253 8673
Deputy City Clerk 594 6900 7253 7621 8010 8419 8848
Deputy City Manager 706 12062 12679 13324 14004 14718 15469 Deputy Public Works Director 708 12183 12806 13457 14145 14866 15624 Economic Development Manager 693 11305 11883 12487 13125 13794 14498 Economic Development Project Manager 642 8766 9215 9682 10177 10696 11242 Emergency Manager 657 9448 9930 10435 10968 11528 12114 Employee Benefits Analyst 585 6597 6934 7287 7659 8050 8461 Executive Assistant 539 5245 5512 5794 6089 6400 6725
Executive Assistant to the Chief 559 5795 6090 6401 6727 7070 7431 Field Services Manager 693 11305 11883 12487 13125 13794 14498 Finance Manager 624 8014 8423 8851 9303 9779 10276
Financial Analyst 596 6969 7325 7697 8091 8504 8937
Housing Manager 642 8766 9215 9682 10177 10696 11242
2308
25 APPENDIX B (CONTINUED)

SENIOR MANAGEMENT

MONTHLY SALARY RANGES
EFFECTIVE JUNE 29, 2025

2.0% Across the Board Salary Increase

CLASSIFICATION TITLE RANGE STEP
A
STEP
B
STEP
C
STEP
D
STEP
E
STEP
F
Human Resources Analyst I 577 6339 6663 7002 7359 7735 8129 Human Resources Analyst II 604 7253 7624 8011 8420 8850 9300 Human Resources Manager 673 10232 10755 11302 11879 12485 13121 Information Technology Manager 693 11305 11883 12487 13125 13794 14498 Information Technology Project Manager 673 10232 10755 11302 11879 12485 13121 Intergovernmental & Comm Affairs Mgr 684 10809 11361 11939 12549 13189 13861 Internal Audit Manager 642 8766 9215 9682 10177 10696 11242 Investment/Revenue Officer 612 7548 7934 8337 8763 9210 9679 Manager of Trans Svcs/City Traffic Eng 693 11305 11883 12487 13125 13794 14498 Network/Security Analyst 623 7974 8381 8807 9257 9730 10225 Parks and Facilities Manager 673 10232 10755 11302 11879 12485 13121 Payroll Manager 642 8766 9215 9682 10177 10696 11242
Planning Manager 693 11305 11883 12487 13125 13794 14498 Principal Civil Engineer 673 10232 10755 11302 11879 12485 13121 Principal Planner 662 9685 10181 10698 11244 11818 12420 Public Affairs & Information Manager 642 8766 9215 9682 10177 10696 11242 Public Works Administrator 642 8766 9215 9682 10177 10696 11242 Purchasing Officer 624 8014 8423 8851 9303 9779 10276
Recreation Services Manager 663 9734 10232 10752 11300 11878 12482 Risk Management Analyst 575 6276 6596 6933 7286 7658 8049 Risk Manager 677 10438 10972 11529 12118 12736 13386
Senior Administrative Analyst 622 7934 8340 8763 9211 9681 10174 Senior Assistant City Attorney 728 13461 14149 14869 15628 16425 17263 Senior Assistant to the City Manager 673 10232 10755 11302 11879 12485 13121 Senior Econ Development Project Mgr 668 9980 10490 11023 11586 12178 12798 Senior Executive Assistant to the City
Council and the City Manager 589 6730 7074 7433 7813 8212 8630 Senior Housing Manager 668 9980 10490 11023 11586 12178 12798 Senior Human Resources Analyst 634 8423 8854 9304 9779 10278 10802 Senior Library Manager 632 8340 8766 9211 9682 10176 10694 Systems Analyst 623 7974 8381 8807 9257 9730 10225
Water Manager 693 11305 11883 12487 13125 13794 14498
2309
26 APPENDIX B (CONTINUED)

SENIOR MANAGEMENT

ANNUAL SALARY RANGES
EFFECTIVE JUNE 28, 2026

3.0% Cost of Living Adjustment
CLASSIFICATION A/1 B/2 C/3 D/4 E/5 F/6
ACCOUNTING MANAGER $113,885 $119,719 $125,800 $132,215 $138,976 $146,046 ADMINISTRATIVE ANALYST I $76,422 $80,315 $84,419 $88,720 $93,244 $98,002 ADMINISTRATIVE ANALYST II $84,431 $88,757 $93,256 $98,027 $103,033 $108,274 ADMINISTRATIVE MANAGER $108,348 $113,897 $119,670 $125,788 $132,203 $138,951 ASSISTANT CITY ATTORNEY I $143,252 $150,582 $158,233 $166,316 $174,807 $183,719 ASSISTANT CITY ATTORNEY II $150,582 $158,282 $166,329 $174,832 $183,744 $193,113 ASSISTANT CITY CLERK SERVICES DIRECTOR* $94,272 $99,084 $104,112 $109,428 $115,020 $120,888 ASSISTANT FIELD SVCS MANAGER $126,468 $132,932 $139,693 $146,824 $154,315 $162,176 ASSISTANT FINANCE DIRECTOR $139,730 $146,874 $154,339 $162,225 $170,494 $179,195 ASSISTANT TO THE CITY MANAGER $108,348 $113,897 $119,670 $125,788 $132,203 $138,951 ASSISTANT WATER MANAGER $126,468 $132,932 $139,693 $146,824 $154,315 $162,176 ASST COMMUNITY DEVELOPMENT DIRECTOR $149,086 $156,712 $164,685 $173,089 $181,914 $191,197 ASST COMMUNITY SERVICES DIRECTOR $139,730 $146,874 $154,339 $162,225 $170,494 $179,195 ASST HUMAN RESOURCES DIRECTOR $139,730 $146,874 $154,339 $162,225 $170,494 $179,195 ASST LIBRARY SVCS DIRECTOR $113,885 $119,719 $125,800 $132,215 $138,976 $146,046 ASST PUBLIC WORKS DIRECTOR $158,282 $166,378 $174,832 $183,768 $193,137 $202,988 BUDGET MANAGER $108,348 $113,897 $119,670 $125,788 $132,203 $138,951 BUDGET OFFICER $103,082 $108,348 $113,848 $119,670 $125,775 $132,178 BUILDING AND SAFETY MANAGER $126,468 $132,932 $139,693 $146,824 $154,315 $162,176 CHIEF BUILDING OFFICIAL $139,730 $146,874 $154,339 $162,225 $170,494 $179,195 CONTROLLER* $125,880 $132,312 $139,044 $146,148 $153,600 $161,436 CRIME ANALYST $83,603 $87,867 $92,329 $97,051 $102,007 $107,198 DEPUTY CITY CLERK $85,284 $89,647 $94,196 $99,004 $104,059 $109,361 DEPUTY CITY MANAGER $149,086 $156,712 $164,685 $173,089 $181,914 $191,197 DEPUTY PUBLIC WORKS DIRECTOR $150,582 $158,282 $166,329 $174,832 $183,744 $193,113 ECONOMIC DEVELOPMENT MANAGER $139,730 $146,874 $154,339 $162,225 $170,494 $179,195 ECONOMIC DEVELOPMENT PROJ MGR $108,348 $113,897 $119,670 $125,788 $132,203 $138,951 EMERGENCY MANAGER $116,777 $122,735 $128,977 $135,564 $142,486 $149,729 EMPLOYEE BENEFITS ANALYST $81,539 $85,704 $90,067 $94,665 $99,498 $104,578 EXECUTIVE ASSISTANT $64,828 $68,128 $71,614 $75,260 $79,104 $83,121 EXECUTIVE ASST TO THE CHIEF $71,626 $75,272 $79,116 $83,146 $87,385 $91,847 FIELD SERVICES MANAGER $139,730 $146,874 $154,339 $162,225 $170,494 $179,195 FINANCE MANAGER $99,053 $104,108 $109,398 $114,985 $120,868 $127,011 FINANCIAL ANALYST $86,137 $90,537 $95,135 $100,005 $105,109 $110,461 HOUSING MANAGER $108,348 $113,897 $119,670 $125,788 $132,203 $138,951 HUMAN RESOURCES ANALYST I $78,350 $82,355 $86,545 $90,957 $95,605 $100,474 HUMAN RESOURCES ANALYST II $89,647 $94,233 $99,016 $104,071 $109,386 $114,948 HUMAN RESOURCES MANAGER $126,468 $132,932 $139,693 $146,824 $154,315 $162,176 INFORMATION TECH PROJECT MGR $126,468 $132,932 $139,693 $146,824 $154,315 $162,176 INFORMATION TECHNOLOGY MANAGER $139,730 $146,874 $154,339 $162,225 $170,494 $179,195 INTERGOV/COMM AFFAIRS MANAGER $133,599 $140,422 $147,566 $155,106 $163,016 $171,322 2310
27 APPENDIX B (CONTINUED)

SENIOR MANAGEMENT

ANNUAL SALARY RANGES
CLASSIFICATION A/1 B/2 C/3 D/4 E/5 F/6
INTERNAL AUDIT MANAGER $108,348 $113,897 $119,670 $125,788 $132,203 $138,951 INVESTMENT/REVENUE OFFICER $93,293 $98,064 $103,045 $108,311 $113,836 $119,632 MGR TRANS SVCS/CITY TRAFFC ENG $139,730 $146,874 $154,339 $162,225 $170,494 $179,195 NETWORK/SECURITY ANALYST $98,559 $103,589 $108,855 $114,417 $120,263 $126,381 PARKS & FACILITIES MANAGER $126,468 $132,932 $139,693 $146,824 $154,315 $162,176 PAYROLL MANAGER $108,348 $113,897 $119,670 $125,788 $132,203 $138,951 PLANNING MANAGER $139,730 $146,874 $154,339 $162,225 $170,494 $179,195 PRINCIPAL CIVIL ENGINEER $126,468 $132,932 $139,693 $146,824 $154,315 $162,176 PRINCIPAL PLAN CHECK ENGINEER* $126,468 $132,932 $139,693 $146,824 $154,315 $162,176 PRINCIPAL PLANNER $119,707 $125,837 $132,227 $138,976 $146,070 $153,511 PUBLIC AFFAIRS & INFO MANAGER $108,348 $113,897 $119,670 $125,788 $132,203 $138,951 PUBLIC WORKS ADMINISTRATOR $108,348 $113,897 $119,670 $125,788 $132,203 $138,951 PURCHASING OFFICER $99,053 $104,108 $109,398 $114,985 $120,868 $127,011 RECREATION SERVICES MANAGER $120,312 $126,468 $132,895 $139,668 $146,812 $154,278 RISK MANAGEMENT ANALYST** $89,647 $94,233 $99,016 $104,071 $109,386 $114,948 RISK MANAGER $129,014 $135,614 $142,498 $149,778 $157,417 $165,451 SENIOR ADMINISTRATIVE ANALYST $98,064 $103,082 $108,311 $113,848 $119,657 $125,751 SENIOR ASSISTANT CITY ATTORNEY $166,378 $174,882 $183,781 $193,162 $203,013 $213,371 SENIOR HOUSING MANAGER $123,353 $129,656 $136,244 $143,203 $150,520 $158,183 SENIOR HUMAN RESOURCES ANALYST $104,108 $109,435 $114,997 $120,868 $127,036 $133,513 SENIOR LIBRARY MANAGER $103,082 $108,348 $113,848 $119,670 $125,775 $132,178 SR ASST TO THE CITY MANAGER $126,468 $132,932 $139,693 $146,824 $154,315 $162,176 SR ECONOMIC DEVELPMNT PROJ MGR $123,353 $129,656 $136,244 $143,203 $150,520 $158,183 SR EXEC ASST TO COUNCIL & CM $83,183 $87,435 $91,872 $96,569 $101,500 $106,667 SYSTEMS ANALYST $98,559 $103,589 $108,855 $114,417 $120,263 $126,381 WATER MANAGER $139,730 $146,874 $154,339 $162,225 $170,494 $179,195 *New classification pursuant to FY27 Budget adoption.
**Range adjustment pursuant to FY27 Budget adoption.
2311
Agenda Item
Orange City Council
Item #: 10.5. 5/26/2026 File #: 26-0121
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Pamela Coleman, City Clerk Services Director

1. SUBJECT
Technology Disruption Policy to address disruption of telephonic or internet service during City Council meetings

2. SUMMARY
Changes to the Ralph M. Brown Act enacted via Senate Bill 707 (SB707) require eligible legislative bodies, including the Orange City Council, to provide two-way remote public access to City Council meetings and to adopt a formal policy addressing the disruption of services which enable remote participation in open session. The policy must be adopted by July 1, 2026, and may not be considered on the Consent Calendar.

3. RECOMMENDED ACTION
Adopt Resolution No. 11684. A Resolution of the City Council of the City of Orange adopting a Technology Disruption Policy for public meetings pursuant to Senate Bill 707 and the Ralph M. Brown Act.

4. FISCAL IMPACT
There is no fiscal impact associated with the adoption of the policy.

5. STRATEGIC PLAN GOALS
Goal 3: Enhance Public Communication Strategy and Quality of Life

6. DISCUSSION AND BACKGROUND
On October 3, 2025, Governor Newsom signed into law Senate Bill 707 (SB 707), which amends the Brown Act with the intent to provide enhanced accessibility for members of the public during local government meetings of legislative bodies. Among the various new requirements under SB 707, eligible legislative bodies, as defined by the legislation, must now offer hybrid meetings (through a two-way phone or video platform) and must adopt a policy, in open session, detailing the process by which any interruptions in service will be handled.

The proposed policy establishes a framework for responding to a disruption in telephonic or internet services and formalizing a process for Council and staff to follow should that service be interrupted.

Pursuant to GC § 54953.4.(b)(1)(ib)(Ia) the Technology Disruption Policy is presented for adoption prior to July 1, 2026 as a City Council discussion item.

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7. ATTACHMENTS
· Resolution No. 11684
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Agenda Item
Orange City Council
Item #: 10.5. 5/26/2026 File #: 26-0121
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Pamela Coleman, City Clerk Services Director

1. SUBJECT
Technology Disruption Policy to address disruption of telephonic or internet service during City Council meetings

4. FISCAL IMPACT
There is no fiscal impact associated with the adoption of the policy.

5. STRATEGIC PLAN GOALS
Goal 3: Enhance Public Communication Strategy and Quality of Life

Pursuant to GC § 54953.4.(b)(1)(ib)(Ia) the Technology Disruption Policy is presented for adoption prior to July 1, 2026 as a City Council discussion item.

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Item #: 10.5. 5/26/2026 File #: 26-0121

7. ATTACHMENTS
· Resolution No. 11684
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RESOLUTION NO. 11684

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF ORANGE ADOPTING A TECHNOLOLGY

DISRUPTION POLICY FOR PUBLIC MEETINGS
PURSUANT TO SENATE BILL 707 AND THE RALPH
M. BROWN ACT
WHEREAS, the Ralph M. Brown Act, California Government Code Section 54950 et seq., establishes requirements for open and public meetings of local legislative bodies; and WHEREAS, Senate Bill (“SB”) 707 amended the Brown Act to expand public access, transparency, and participation in local government meetings, including requirements for remote public attendance and comment; and
WHEREAS, Government Code Section 54953.4 requires eligible legislative bodies, including the Orange City Council to provide an opportunity for members of the public to attend open and public meetings remotely through a two-way telephonic service or a two-way audiovisual platform, except in limited circumstances; and
WHEREAS, Government Code Section 54953.4 further requires eligible legislative bodies to adopt a publicly approved policy establishing procedures to be followed when a disruption to telephone or internet service prevents remote public access to a meeting; and WHEREAS, the City Council of the City of Orange qualifies as an eligible legislative body under Government Code Section 54953.4 based on statutory population thresholds; and WHEREAS, technology disruptions may occur due to factors beyond the reasonable control of the City, including internet outages, service provider failures, or system malfunctions; and
WHEREAS, it is necessary and appropriate to adopt a clear, transparent, and consistent policy to ensure good faith compliance with SB 707 while preserving the orderly conduct of City Council meetings; and
WHEREAS, adoption of a Technology Disruption Policy will promote transparency, provide clarity to the public, and establish uniform procedures for responding to interruptions in remote access.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Orange as follows:

SECTION 1. ADOPTION OF POLICY. The City Council hereby adopts the Technology Disruption Policy, as set forth below, pursuant to Government Code Section 54953.4. 2316
2 SECTION 2. PURPOSE. To establish procedures for responding to disruptions in telephone or internet service during City Council meetings that provide two-way remote public access to meetings, as required by the Brown Act (GC § 54953.4).

SECTION 3. APPLICABILITY. This policy applies to all open and public meetings of the Orange City Council at which remote public participation is offered or required under the Brown Act.

SECTION 4. DEFINITIONS. For purpose of this policy:

A. Remote Access means participation in a public meeting through telephone or internet-based technology.

B. Technology Disruption means a failure or interruption of telephone or internet service that prevents members of the public from observing or participating in a meeting remotely.

C. Good Faith Effort means reasonable actions taken by City staff to restore remote access as promptly as practicable under the circumstances.

SECTION 5. PROCEDURES DURING A TECHNOLOLGY DISRUPTION.

A. Initial Response
If a technology disruption occurs that prevents remote public access to a City Council meeting:

1. The Mayor or City Clerk shall announce the disruption to the public.

2. The City Council shall recess the open session of the meeting for a minimum of one hour or until remote access is restored, whichever occurs first. The recess period may be extended if restoration efforts are ongoing.

3. The City Council may convene in closed session during the recess in compliance with the Brown Act.

B. Restoration Efforts
During the recess, City staff shall make a good faith effort to restore remote access, which may include, but is not limited to:
 Checking network and platform status
 Confirming power and physical connections
 Troubleshooting or restarting hardware, software, or control systems as needed  Attempting alternative connection methods
 Coordinating with support staff, external service providers or technology vendors  Transitioning to back-up telephone or internets systems, if available The IT Department shall document all restoration efforts undertaken. 2317
3 C. Reconvening the Meeting
If remote access is restored, the City Council shall reconvene the meeting and resume open session proceedings.

If remote access is not restored following the recess period, the City Council may reconvene and adjourn the meeting or reconvene and continue in open session only after making the findings set forth in Section 6 of this Resolution.

SECTION 6. REQUIRED FINDINGS TO CONTINUE WITHOUT REMOTE ACCESS.

Before continuing the meeting without remote public access, the City Council shall make all of the following findings by roll call vote:

1. The City made a good faith effort to restore remote access in accordance with this policy.

2. The continued inability to provide remote access is due to factors beyond the reasonable control of the City.

3. Continuing with the meeting outweighs the public interest in delaying the meeting to restore remote access.

Upon adoption of these findings, the City Council may continue the open session. All findings shall be entered into the official meeting record.

SECTION 7. NO LIMITATION OF AUTHORITY. Nothing in this Resolution limits the authority of the presiding officer to manage meetings or address disruptive behavior in accordance with the Brown Act, City Council rules, or other applicable law.

SECTION 8. POLICY UPDATES. Any amendments to this policy shall be considered by the City Council at a noticed public meeting. All amendments must be considered in open session and shall not be placed on the Consent Calendar.

SECTION 9. EFFECTIVE DATE. This Resolution shall take effect immediately upon adoption.

ADOPTED this ______ day of __________________________ 2026.

Daniel R. Slater, Mayor, City of Orange
2318
4 ATTEST:

Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange

STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
2319
Agenda Item
Orange City Council
Item #: 11.1. 5/26/2026 File #: 26-0256
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Russell Bunim, Community Development Director

1. SUBJECT
Introduction and First Reading of Ordinance No. 05-26 amending the Orange Municipal Code relating to the Tobacco Retailer Permit program regulations

2. SUMMARY
An Ordinance amending Chapter 5.100 of the Orange Municipal Code (Tobacco Retailers) to update and clarify the requirements and regulations for tobacco retailers.

3. RECOMMENDED ACTION
Introduce and conduct First Reading of Ordinance No. 05-26. An ordinance of the City Council of the City of Orange amending Chapter 5.100 of the Orange Municipal Code to eliminate certain restrictions on the retail sale of tobacco and tobacco products and provide clarification on the transferability of Tobacco Retailer Permits.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 1: Maintain Strong Emergency and Safety Services

6. DISCUSSION AND BACKGROUND
On June 24, 2025, the City Council adopted Ordinance No. 12-25 establishing the Tobacco Retailer Permit Program and related regulations. At the City Council meeting on April 28, 2026, during the public comment period, a local business owner and several state retail advocates expressed concerns regarding two regulations scheduled to take effect on July 1, 2026, as part of Ordinance implementation, as well as the non-transferability of Tobacco Retailer Permits. Specifically, concerns were raised about (1) restrictions on tobacco sales between 2:00 a.m. and 6:00 a.m., (2) the prohibition on the sale of electronic smoking devices and related accessories, and (3) the inability to transfer an existing Tobacco Retailer Permit upon sale of a business. The City Council unanimously directed staff to return with proposed code amendments to address these issues.

In response, staff recommend amending the Orange Municipal Code (OMC) by removing Sections

5.100.060.C.6 and 5.100.060.H.3, which were set to take effect on July 1, 2026, to regulate:

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· The sale of electronic smoking devices and related paraphernalia and accessories; and · Tobacco retail sales between the hours of 2:00 a.m. and 6:00 a.m.

Additionally, staff proposes revisions to Section 5.100.040.E of the OMC to clarify the transferability requirements for Tobacco Retailer Permits. Under the proposed amendment, an existing business holding a valid Tobacco Retailer Permit may transfer the permit to a new business owner, including transfers occurring through an arm’s length transaction between relatives, related entities, or business partners, subject to submission of a transfer application and compliance with all applicable permitting requirements.

To support local tobacco retailers while maintaining regulatory oversight, staff recommends that the City Council approve the proposed amendments to the Tobacco Retailer Permit Program.

7. ATTACHMENTS
· Ordinance No. 05-26
· Ordinance No. 05-26 - Redline
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Agenda Item
Orange City Council
Item #: 11.1. 5/26/2026 File #: 26-0256
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Russell Bunim, Community Development Director

1. SUBJECT
Introduction and First Reading of Ordinance No. 05-26 amending the Orange Municipal Code relating to the Tobacco Retailer Permit program regulations

2. SUMMARY
An Ordinance amending Chapter 5.100 of the Orange Municipal Code (Tobacco Retailers) to update and clarify the requirements and regulations for tobacco retailers.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 1: Maintain Strong Emergency and Safety Services

In response, staff recommend amending the Orange Municipal Code (OMC) by removing Sections

5.100.060.C.6 and 5.100.060.H.3, which were set to take effect on July 1, 2026, to regulate:

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Item #: 11.1. 5/26/2026 File #: 26-0256
· The sale of electronic smoking devices and related paraphernalia and accessories; and · Tobacco retail sales between the hours of 2:00 a.m. and 6:00 a.m.

To support local tobacco retailers while maintaining regulatory oversight, staff recommends that the City Council approve the proposed amendments to the Tobacco Retailer Permit Program.

7. ATTACHMENTS
· Ordinance No. 05-26
· Ordinance No. 05-26 - Redline
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ORDINANCE NO. 05-26

AN ORDINANCE OF THE CITY COUNCIL OF

THE CITY OF ORANGE AMENDING CHAPTER

5.100 OF THE ORANGE MUNICIPAL CODE TO

ELIMINATE CERTAIN RESTRICTIONS ON THE

RETAIL SALE OF TOBACCO AND TOBACCO

PRODUCTS AND PROVIDE CLARIFICATION

ON THE TRANSFERABILITY OF TOBACCO

RETAILER PERMITS
WHEREAS, California Constitution, Article XI, Section 7, authorizes the City of Orange (“City”) to adopt and enforce local police, sanitary, and other ordinances and regulations that are not in conflict with general laws; and
WHEREAS, California Health & Safety Code section 101450 empowers the City Council to take measures necessary to preserve and protect public health, including adopting ordinances, regulations, and orders that are not in conflict with general laws; and WHEREAS, a local tobacco retailer and several tobacco retail advocates provided public comment at a recent City Council meeting regarding the adverse economic impacts of restricting the sale of tobacco products, including electronic smoking devices and related accessories, between the hours of 2:00 a.m. and 6:00 a.m., as well as the resulting impacts on other general merchandise sales, and requested clarification regarding the transferability of a valid Tobacco Retailer Permit to a new proprietor in connection with the sale of a business; and WHEREAS, the City Council finds and determines that removing certain restrictions and clarifying the transferability of a valid Tobacco Retailer Permit to a new proprietor in connection with the sale of a business will help mitigate adverse economic impacts on responsible local tobacco retailers while preserving the City’s regulatory authority and enforcement discretion; and

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ORANGE DOES HEREBY ORDAIN AS FOLLOWS:

SECTION I:

The subject Ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) per State CEQA Guidelines (Guidelines) Sections 15060(c)(2) and 15060(c)(3) because the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment, and it is not a "project" as defined in Guideline 15378.

SECTION II:

Sections 5.100.040 of the Orange Municipal Code, Business Taxes and Regulations – Tobacco Retailers – Tobacco Retailer Permit Applications, is hereby amended to read as follows:
2324
2 5.100.040 Tobacco Retailer Permit Applications
A. Permit Required. No person shall engage in tobacco retailing within the City without first obtaining and maintaining a valid tobacco retailer permit for each specific location.

B. Application Procedure.

1. Applications must be submitted on forms provided by the City and include a nonrefundable annual fee as set by City Council resolution.

2. Each application shall include, at minimum, the following:
a. Full legal name, date of birth, government-issued identification number, mailing address, phone number, and email for each proprietor;
b. Business name, address, phone number, and hours of operation; c. Disclosure of any prior permit suspensions or revocations under this chapter, including dates and reasons;
d. Proof of a valid state tobacco retailer license from the California Department of Tax and Fee Administration;
e. Any other information deemed necessary by the City Manager for the administration or enforcement purposes;
f. A signed certification by each proprietor under penalty of perjury affirming the accuracy of the information provided and compliance with this chapter.

C. Authority to Adopt Administrative Regulations. The City Manager may adopt and implement additional administrative regulations, consistent with this chapter, to effectively enforce and administer local tobacco control measures. All regulations must be published in advance and filed with the City Clerk's office for public inspection.

D. Change of Information. Permittee shall notify the City in writing of any changes to submitted application information within 10 calendar days. A fee as set by City Council resolution may be imposed for processing such changes.

E. Permit Generally Nontransferable. A Tobacco Retailer Permit issued pursuant to this Chapter shall not automatically transfer or assign to any other person, proprietor, entity, or location except as expressly authorized by this Section. A Tobacco Retailer Permit is revocable regulatory privilege only and does not create a vested right, property interest, or entitlement.

F. Transfer Upon Change in Ownership. An existing Tobacco Retailer Permit may be transferred to a new owner or proprietor of the same business location upon approval by the City, provided that:
2325
3 1. The proposed transferee submits a completed transfer application on a form approved by the City as contained in Subsection B prior to the transfer of ownership;

2. The transferee pays all applicable annual fees as established by resolution of the City Council;

3. The business location remains in compliance with all applicable federal, state, and local laws, including this Chapter;

4. No suspension, revocation, unpaid administrative fines, penalties, outstanding violations, or delinquent City obligations exist against the permit or business location at the time of transfer; and

5. The proposed transferee otherwise satisfies all requirements necessary to obtain a Tobacco Retailer Permit under this Chapter.

G. No Expansion of Existing Rights.

1. Approval of a permit transfer shall not authorize:
a. Expansion or intensification of the tobacco retail use; b. Relocation of the business to another site;
c. Modification of any conditions previously imposed upon the permit; or d. Any waiver of applicable buffer, density, zoning, land use, or operational requirements of this Chapter or other applicable law.

H. Arm’s-Length Transactions and Related Transfers.

A transfer application may be considered only where the business remains substantially the same operation at the same approved location and the transfer involves one or more of the following:

1. Sale of the business through a bona fide arm’s-length transaction;

2. Transfer between immediate family members; defined as spouse, domestic partner, parent, child, sibling, grandparent, grandchild or other person related by blood, marriage, or legal guardianship;

3. Transfer between business partners, related entities, corporations, limited liability companies, or successor entities;

4. Change in ownership structure where the business remains substantially the same operation at the same location; or
2326
4 5. Internal restructuring, merger, conversion, or reorganization of the same operating business entity; or

6. Succession following the death or incapacity of the proprietor.

I. City Review Authority.

The City Manager, Community Development Director, or designee may approve, conditionally approve, or deny a transfer application if the proposed transfer does not comply with this Chapter or applicable law.

J. Effect of Unauthorized Transfer.

Any attempted transfer, assignment, or operation under a Tobacco Retailer Permit without City approval shall render the permit void and constitute a violation of this Chapter.

K. Continuation of Operations Pending Review.

A timely filed transfer application shall temporarily toll expiration of the existing Tobacco Retailer Permit during administrative review by the City unless the Tobacco Retailer Permit is suspended, revoked, or otherwise rendered invalid by operation of law.

L. Effect of Prior Violations at Location. Permit ineligibility due to prior violations at a location shall continue to apply unless:

1. The location has been transferred to new proprietor(s) in a bona fide Arm’s Length Transaction; and

2. The new proprietor submits clear and convincing evidence of such transfer to the City's satisfaction.

SECTION III:

Section 5.100.060.C of the Orange Municipal Code, Business Taxes and Regulations – Tobacco Retailers –Prohibitions and Requirements, is hereby amended to read as follows:

5.100.060.C. Prohibitions and Requirements – Prohibited Products and Activities The following items shall not be sold, distributed, displayed, furnished, administered, exchanged, given away, or possessed with the intent to sell or offered for sale by any tobacco retailer:

1. Drug paraphernalia;

2. Nitrous oxide or any device used to dispense it as defined by state law and the City Code;

3. Cannabis, cannabis products, cannabis accessories, or edible cannabis products as defined in state or federal law;
2327
5 4. Controlled substances, including marijuana where applicable, as governed by California Health and Safety Code Sections 11351, 11352, 11359, 11360, 11366, 11378, and 11379 as may be amended from time to time.

5. Flavored tobacco products and tobacco product flavor enhancer, as prohibited under state or federal law;

6. (Reserved).

7. Imitation tobacco products, including, but not limited to, candy cigarettes and bubble gum cigars;

8. Edible tobacco look-alike products, including, but not limited to, snacks packaged or marketed to resemble tobacco products;

9. Disguised vape or electronic smoking devices, including, but not limited to, those made to look like USB drives, pens, markers, phone cases, watches, lipstick, remote keys or other non-tobacco items.

10. Unlawful weapon sales, including, but not limited to, violations of California Penal Code Sections 17235 (switchblade knives over two inches), 20410 (ballistic knives), 21810 (brass knuckles) as may be amended from time to time, and any other applicable local, state or federal laws.

SECTION IV:

Section 5.100.060.H of the Orange Municipal Code, Business Taxes and Regulations – Tobacco Retailers – Prohibitions and Requirements, is hereby amended to read as follows:

5.100.060.H Prohibitions and Requirements - Premises Regulations.

1. The business must maintain a clearly designated front entrance for customers. All nonemergency public access must occur through this entrance.

2. Front entrance doors must remain unlocked during regular business hours, unless temporarily secured for safety or emergency response.

3. (Reserved).

SECTION V:

If any section, subdivision, paragraph, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each section, subdivision, paragraph, sentence, clause and phrase thereof, 2328
6 irrespective of the fact that any one (or more) section, subdivision, paragraph, sentence, clause or phrase had been declared invalid or unconstitutional.

SECTION VI:

ADOPTED this ____ day of ___________________, 2026.

Daniel R. Slater, Mayor, City of Orange
ATTEST:

Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange

STATE OF CALIFORNIA )

COUNTY OF ORANGE )

CITY OF ORANGE )
I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Ordinance was introduced at the regular meeting of the City Council held on the ___ day of _____________, 2026, and thereafter at the regular meeting of said City Council duly held on the ___ day of ____________, 2026 was duly passed and adopted by the following vote, to wit:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
2329
ORDINANCE NO. 05-26

AN ORDINANCE OF THE CITY COUNCIL OF

THE CITY OF ORANGE AMENDING CHAPTER

5.100 OF THE ORANGE MUNICIPAL CODE TO

ELIMINATE CERTAIN RESTRICTIONS ON THE

RETAIL SALE OF TOBACCO AND TOBACCO

PRODUCTS AND PROVIDE CLARIFICATION

ON THE TRANSFERABILITY OF TOBACCO

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ORANGE DOES HEREBY ORDAIN AS FOLLOWS:

SECTION I:

SECTION II:

Sections 5.100.040 of the Orange Municipal Code, Business Taxes and Regulations – Tobacco Retailers – Tobacco Retailer Permit Applications, is hereby amended to read as follows:
2330

5.100.040 Tobacco Retailer Permit Applications
A. Permit Required. No person shall engage in tobacco retailing within the City without first obtaining and maintaining a valid tobacco retailer permit for each specific location.

B. Application Procedure.

1. Applications must be submitted on forms provided by the City and include a nonrefundable annual fee as set by City Council resolution.

2. Each application shall include, at minimum, the following:
a. Full legal name, date of birth, government-issued identification number, mailing address, phone number, and email for each proprietor; b. Business name, address, phone number, and hours of operation; c. Disclosure of any prior permit suspensions or revocations under this chapter, including dates and reasons;
d. Proof of a valid state tobacco retailer license from the California Department of Tax and Fee Administration;
e. Any other information deemed necessary by the City Manager for the administration or enforcement purposes;
f. A signed certification by each proprietor under penalty of perjury affirming the accuracy of the information provided and compliance with this chapter.

E. Non-Transferability. Tobacco retailer permits are non-transferable between persons, proprietors, or locations. Any attempted transfer shall be null and void. A new permit application is required for any change in ownership or location, subject to all applicable conditions.

F. Effect of Prior Violations at Location. Permit ineligibility due to prior violations at a location shall continue to apply unless:

1. The business has been transferred to a new proprietor or proprietors in a bona fide arm's length transaction; and
2331

2. The new proprietor submits clear and convincing evidence of such transfer to the City's satisfaction.

F. Transfer Upon Change in Ownership.

An existing Tobacco Retailer Permit may be transferred to a new owner or proprietor of the same business location upon approval by the City, provided that:

1. The proposed transferee submits a completed transfer application on a form approved by the City as contained in Subsection B prior to the transfer of ownership;

2. The transferee pays all applicable annual fees as established by resolution of the City Council;

3. The business location remains in compliance with all applicable federal, state, and local laws, including this Chapter;

4. No suspension, revocation, unpaid administrative fines, penalties, outstanding violations, or delinquent City obligations exist against the permit or business location at the time of transfer; and

5. The proposed transferee otherwise satisfies all requirements necessary to obtain a Tobacco Retailer Permit under this Chapter.

G. No Expansion of Existing Rights.

H. Arm’s-Length Transactions and Related Transfers.

A transfer application may be considered only where the business remains substantially the same operation at the same approved location and the transfer involves one or more of the following:

1. Sale of the business through a bona fide arm’s-length transaction; 2332

2. Transfer between immediate family members; defined as spouse, domestic partner, parent, child, sibling, grandparent, grandchild or other person related by blood, marriage, or legal guardianship;

3. Transfer between business partners, related entities, corporations, limited liability companies, or successor entities;

4. Change in ownership structure where the business remains substantially the same operation at the same location; or

5. Internal restructuring, merger, conversion, or reorganization of the same operating business entity; or

6. Succession following the death or incapacity of the proprietor.

I. City Review Authority.

J. Effect of Unauthorized Transfer.

Any attempted transfer, assignment, or operation under a Tobacco Retailer Permit without City approval shall render the permit void and constitute a violation of this Chapter.

K. Continuation of Operations Pending Review.

L. Effect of Prior Violations at Location. Permit ineligibility due to prior violations at a location shall continue to apply unless:

1. The location has been transferred to new proprietor(s) in a bona fide Arm’s Length Transaction; and

2. The new proprietor submits clear and convincing evidence of such transfer to the City's satisfaction.

SECTION III:

Section 5.100.060.C of the Orange Municipal Code, Business Taxes and Regulations – Tobacco Retailers –Prohibitions and Requirements, is hereby amended to read as follows:

5.100.060.C. Prohibitions and Requirements – Prohibited Products and Activities 2333
The following items shall not be sold, distributed, displayed, furnished, administered, exchanged, given away, or possessed with the intent to sell or offered for sale by any tobacco retailer:

1. Drug paraphernalia;

2. Nitrous oxide or any device used to dispense it as defined by state law and the City Code;

3. Cannabis, cannabis products, cannabis accessories, or edible cannabis products as defined in state or federal law;

4. Controlled substances, including marijuana where applicable, as governed by California Health and Safety Code Sections 11351, 11352, 11359, 11360, 11366, 11378, and 11379 as may be amended from time to time.

5. Flavored tobacco products and tobacco product flavor enhancer, as prohibited under state or federal law;

6. Electronic smoking devices and related paraphernalia and accessories, effective July 1, 2026, unless preempted or otherwise limited by state or federal law at that time; (Reserved).

7. Imitation tobacco products, including, but not limited to, candy cigarettes and bubble gum cigars;

8. Edible tobacco look-alike products, including, but not limited to, snacks packaged or marketed to resemble tobacco products;

SECTION IV:

Section 5.100.060.H of the Orange Municipal Code, Business Taxes and Regulations – Tobacco Retailers – Prohibitions and Requirements, is hereby amended to read as follows:

5.100.060.H Prohibitions and Requirements - Premises Regulations.

1. The business must maintain a clearly designated front entrance for customers. All non-emergency public access must occur through this entrance. 2334

2. Front entrance doors must remain unlocked during regular business hours, unless temporarily secured for safety or emergency response.

3. No business shall engage in tobacco retailing between the hours of 2:00 a.m. and 6:00 a.m. of the same day, effective July 1, 2026, unless preempted or otherwise limited by state or federal law at that time. (Reserved).

SECTION V:

If any section, subdivision, paragraph, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each section, subdivision, paragraph, sentence, clause and phrase thereof, irrespective of the fact that any one (or more) section, subdivision, paragraph, sentence, clause or phrase had been declared invalid or unconstitutional.

SECTION VI:

ADOPTED this ____ day of ___________________, 2026.

Daniel R. Slater, Mayor, City of Orange
ATTEST:

Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian
City Attorney, City of Orange
2335

STATE OF CALIFORNIA )

COUNTY OF ORANGE )

CITY OF ORANGE )
I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Ordinance was introduced at the regular meeting of the City Council held on the ___ day of _____________, 2026, and thereafter at the regular meeting of said City Council duly held on the ___ day of ____________, 2026 was duly passed and adopted by the following vote, to wit:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
2336
Resolution No. 26-024, Item No. 14 Page 1 of 2
County Highway Declaration for Construction Project on City Streets

RESOLUTION OF THE BOARD OF SUPERVISORS OF

ORANGE COUNTY, CALIFORNIA
April 28, 2026
WHEREAS, those portions of West Metropolitan Drive and The City Drive South, at the intersection of West Metropolitan Drive and The City Drive South, lying within the limits of the City of Orange (“City”), and as depicted in Exhibit A, are deemed to be highways of Countywide importance; and WHEREAS, the County of Orange proposes to perform intersection improvements at those portions of West Metropolitan Drive and The City Drive South (hereinafter referred to as the “City’s Street(s)”); and
WHEREAS, the County and the City have entered into a Cooperative Agreement to facilitate the performance of the work on the City Street(s) by the County (“Cooperative Agreement”); and
WHEREAS, Streets & Highways Code Section 1700-1704 set forth procedures by which the County may perform improvements on City Street(s).

NOW, THEREFORE, BE IT RESOLVED that this Board does hereby:

1. Declare that the City’s Street(s) are a County highway for the purposes of construction by the County of Orange.

2. Direct that this Resolution be forwarded to the City, and that City’s Street(s) shall become a County highway upon the consent of the City consistent with Streets & Highways Code Section 1701 and the Cooperative Agreement.

3. Declare that the improvements to the City Street(s) shall be deemed fully completed upon the filing of a Notice of Completion, and that upon such completion the Board of Supervisors hereby declares City’s Street(s) to no longer be a County highway. The Board directs the County of Orange to file copies of this Resolution and the Notice of Completion with the City Clerk and ten (10) days after said filing, City’s Street(s) shall cease to be a County highway. This action is intended to be, and shall be interpreted as, consistent with Streets and Highways Code Section 1704 and the Cooperative Agreement.

Docusign Envelope ID: 528A56F3-21B5-874E-8379-7F02C6ACF209 233796
Resolution No. 26-024, Item No. 14 Page 2 of 2
County Highway Declaration for Construction Project on City Streets Exhibit A
Docusign Envelope ID: 528A56F3-21B5-874E-8379-7F02C6ACF209 233897
THE FOREGOING was PASSED and ADOPTED by the following vote of the Orange County Board of Supervisors, on April 28, 2026, to wit:

AYES: Supervisor(s): Janet Nguyen, Vicente Sarmiento, Donald Wagner, Doug Chaffee and Katrina Foley
NOES: Supervisor(s):

ABSTAINED: Supervisor(s):

EXCUSED: Supervisor(s):
________________________________
CHAIR

STATE OF CALIFORNIA )
)

COUNTY OF ORANGE )
I, ROBIN STIELER, Clerk of the Board of Orange County, California, hereby certify that a copy of this document has been delivered to the Chair of the Board and that the above and foregoing Resolution was duly and regularly adopted by the Orange County Board of Supervisors.

IN WITNESS WHEREOF, I have hereto set my hand and seal.

Resolution No.: 26-024
Agenda Date: 04/28/2026
Item No.: 14
_________________________________

ROBIN STIELER
Clerk of the Board
County of Orange, State of California
I certify that the foregoing is a true and correct copy of the Resolution adopted by the Board of Supervisors, Orange County, State of California Robin Stieler, Clerk of the Board of Supervisors
By: ________________________________
Deputy
Docusign Envelope ID: 528A56F3-21B5-874E-8379-7F02C6ACF209 233998

COOPERATIVE AGREEMENT BETWEEN THE COUNTY OF ORANGE AND THE

CITY OF ORANGE FOR FUNDING, DESIGN, AND CONSTRUCTION OF TRAFFIC

SIGNAL, INTERSECTION AND ROADWAY IMPROVEMENTS AT WEST

METROPOLITAN DRIVE AND THE CITY DRIVE SOUTH
This Cooperative Agreement is made and entered into this ______ day of ______________, (“Agreement”), by and between the COUNTY OF ORANGE (“County”), a political subdivision of the State of California, and the CITY OF ORANGE (“City”), a municipal corporation organized and existing under the laws of the State of California. The County and City shall sometimes be referred to as “Party” or collectively as “Parties”.

RECITALS
A. County and City desire to perform traffic signal, intersection and roadway improvements at West Metropolitan Drive and The City Drive South (“Project”) for the County’s proposed Workforce Reentry Center located at 561 The City Drive South, Orange (“Property”).

B. The Project is within the municipal jurisdiction of the County and the City. The location and boundaries of the Project are more fully depicted in Exhibit A, which is attached hereto and incorporated herein by this reference. Those portions of West Metropolitan Drive and The City Drive South within the Project area are hereinafter referred to as the “City’s Street(s)”.

C. The purpose of the Project is to improve and ensure safe vehicular and pedestrian access to the Property, while minimizing delays on surrounding roadways, by modifying the existing traffic signal and design for eight-phase operation and implementing all necessary signing, striping, and median improvements including redesign and relocation of the City monument sign. All improvements shall conform to the City of Orange Standard Design Guidelines and/or California Manual on Uniform Traffic Control Devices (CA MUTCD).

D. The Parties intend to conduct Project related construction work from approximately August 2026 through October 2027 (“Project Duration”).

E. The County’s contractor is coordinating with the City to prepare construction plans for the Project. The construction plans shall incorporate the redesign of the City monument sign and shall comply with all City standards regarding materials, features and character.

F. The Parties wish to specify their respective roles and responsibilities for funding obligations and execution of the Project.

AGREEMENT
In consideration of the foregoing and the mutual promises set forth below, the Parties agree as follows:

Page 1 of 10 ends

Orange City CouncilMay 26, 2026

Orange City Council
May 26, 2026