Finance and Management Services
www.santa-ana.org/finance
Item # 19
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
June 17, 2025
TOPIC: Adopt a Resolution Establishing the Appropriations Limit for 2025-26
AGENDA TITLE
Resolution Establishing the Appropriations Limit of the City of Santa Ana For FY 2025-26
RECOMMENDED ACTION
Adopt a resolution establishing the appropriations limit of the City of Santa Ana for Fiscal Year 2025-26, as required by state law.
RESOLUTION NO. 2025-XXX entitled A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF SANTA ANA ESTABLISHING THE APPROPRIATION LIMIT OF THE CITY OF SANTA ANA FOR FISCAL YEAR 2025-2026
GOVERNMENT CODE §84308 APPLIES: No
DISCUSSION
The State of California Constitution imposes a limit (“the Gann Limit”) on tax proceeds to be appropriated for expenditures by a local government in any given fiscal year and requires the cities establish this limit by resolution. Adoption of the subject resolution is necessary for compliance with the California constitution for the fiscal year ending June 30, 2026.
Furthermore, Section 13-90 of the Santa Ana Municipal Code requires the creation of a Reserve Fund for Excess Proceeds of Taxes (Reserve Fund), as a separate accounting of taxes received in a fiscal year prior to the period of expenditure. The City appropriates the expenditure of tax revenue in the same fiscal year of receipt, and therefore creation of the Reserve Fund is not necessary for the fiscal year 2025-26. In fiscal year 2023-24, the Proceeds of Taxes were $322,141,522 and the actual General Fund expenditures were $394,675,261.
Using the formula provided by the state, staff calculated the spending limitation from “Proceeds of Taxes” as $1,522,518,198 (Exhibit 1) for fiscal year 2025-26, which is the FY24-25 limit increased by 6.66%. The funds constrained by the appropriations limit include the General Fund, the Capital Outlay Fund, and Special Revenue Funds.
Adopt a Resolution Establishing the Appropriations Limit for 2025-26 June 17, 2025
5 1
0 9
Exhibit 1 identifies the factors used to determine the allowable inflationary increase from the prior year. Exhibit 2 categorizes FY 2025-26 anticipated revenues from “Proceeds of Taxes” and “Non-Proceeds of Taxes”. Exhibit 3 computes the FY 2025-26 appropriations subject to this limitation, and identifies the difference between the limit and the budgeted appropriation. As demonstrated in Exhibit 3, the City’s anticipated fiscal year 2025-26 appropriations subject to limitation is $321,251,348, which is $1,201,266,850 less than the allowable Gann Limit.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
There is no fiscal impact associated with this action.
EXHIBIT(S)
1. Computation of Appropriation Limit
2. Schedule to Categorize Anticipated Revenues
3. Appropriation Subject to Limitation
4. Resolution
Submitted By: Alex Trinidad, Acting Executive Director, Finance and Management Services Agency
Approved By: Alvaro Nuñez, City Manager