Finance and Management Services
www.santa-ana.org/finance
Item # 24
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
May 19, 2026
TOPIC: Fiscal Year 2026-27 Budget Work Study Session
AGENDA TITLE
Fiscal Year 2026-27 Budget Work Study Session
RECOMMENDED ACTION
Discuss and provide further direction to staff.
GOVERNMENT CODE §84308 APPLIES: No
DISCUSSION
The City Council first provided direction on the Fiscal Year 2026–27 (FY26–27) budget during the Early Direction session on April 7, 2026. Additional guidance was provided at the May 5, 2026 City Council Budget Work Study session.
The purpose of this meeting is to provide the City Council with an opportunity to offer additional input on the draft FY26–27 budget, which has been posted for public review.
The draft FY26–27 budget document is included as Exhibit 1 to this staff report. The draft budget document includes spending plans for all funds using available resources, including available fund balances and expected revenues. The draft document also includes the balancing measures presented on May 5, along with additional adjustments to balance the General Fund. The draft document does not yet include the $3 million one-time spending from the menu provided to City Council on May 5, as staff seeks clarifying direction as discussed in this report.
Any revisions to the draft budget, including removing proposed balancing measures or adding new expenditures, would necessitate City Council direction for corresponding reductions in other areas to maintain a balanced budget.
As reported on May 5, staff identified an estimated adjusted structural General Fund deficit of approximately $13 million. To address the deficit, the draft FY26–27 budget incorporates a combination of expenditure reductions, revenue adjustments, and refinement of internal service charges. The draft General Fund budget is balanced without full-time layoffs, employee furloughs, or the elimination of City services. Staff developed
Fiscal Year 2026-27 Budget Work Study Session
May 19, 2026
5 7
7 8
the draft FY26–27 budget with a focus on maintaining core service levels, preserving operational continuity, and minimizing impacts to residents and employees.
The $13 million of proposed balancing measures are detailed in Exhibit 2, and a summary by department follows.
Balancing Measure FY 2026-27
Impact
Department Reductions:
City Manager’s Office $279,810
Human Resources $292,770
City Clerk $40,010
Finance $589,890
Public Works $3,386,515
Planning and Building $1,484,960
Parks and Recreation $1,155,010
Community Development $646,590
Library $465,390
Police $2,213,390
Fire $250,000
Other (Credit Card Fee Recovery, Internal Service Charge Refinements, and Board and Commission Changes) $733,833 Supplemental Budget Requests (SBRs) ($610,593)
Revenue and Fee Adjustments $2,115,082
Total Balancing Measures $13,042,657
During the May 5, 2026, budget workshop, the City Council provided direction on the use of available one-time resources. Based on this discussion, staff included two options in Exhibit 4 for City Council evaluation prior to final incorporation into the FY26–27 Proposed Budget. Option 1 would provide funding for a potential Washington Square land purchase, and Option 2 includes a series of items to address safety concerns, reduce future City liability, and increase future City revenue.
The following sections provide additional detail on select balancing measures and operational adjustments identified in Exhibit 2.
Staffing Budget
The balancing measures include defunding 21 vacant full-time positions and part-time budget reductions, also detailed in Exhibit 2. The proposed plan for part-time budget reductions is to immediately defund vacant positions, then defund positions that become vacant in the first quarter of FY26-27.
Fiscal Year 2026-27 Budget Work Study Session
May 19, 2026
5 7
7 8
Boards and Commissions
The draft budget includes a $27,600 reduction for non-mandated Commissions, as detailed in the table below. The Environmental and Transportation Advisory Commission (ETAC) is also proposed for elimination, but the corresponding $15,800 budget reduction would come from the Public Works Internal Service Fund rather than the General Fund.
Exhibit 3 identifies the activity for each Commission since January 2024, with business items shown in red. The cost of each Commission includes staff time that can be repurposed to other services and projects, partially offsetting the reduction in staffing budgets discussed above. The Personnel Board is not included at this time for two reasons: although all other bargaining groups have agreed to arbitration, the Service Employees International Union (SEIU) has not; and there are four cases expected on the Personnel Board agenda.
City Boards & Commissions Original
Estimated
Cost
Cost of Staff
Time to be
redirected
Estimated
Direct Budget
Savings
Arts & Culture Commission* $34,864 $26,464 $8,400
Parks and Recreation Commission $33,562 $22,762 $10,800 Youth Commission $30,693 $22,293 $8,400
Total from General Fund $99,119 $71,519 $27,600
*Responsibilities to transition to Community Development Commission Elimination of selected Boards and Commissions will necessitate updates to the Santa Ana Municipal Code. Staff will present an ordinance to effectuate the changes concurrently with the proposed budget on June 2. Such actions do not preclude City Council from evaluating the purpose of boards and commissions in the future and re- introducing them at a later date.
Police Athletic & Activity League (PAAL)
The Police Athletic & Activity League (PAAL) provides the following programs to children:
After-school program for 35 weeks during the school year. The program operates at the McFadden and Roosevelt Station locations from 2:30pm to 6:00pm, Monday through Thursday. The McFadden location serves 37 students and the Roosevelt location serves 18 students. The Site Director expects to serve 36 students at Santa Anita with a planned opening of September 2026.
Summer camp serves 32 children when school is not in session. Police Officers serve as mentors and coaches to 228 children through athletic sports teams.
Lunchtime fitness program to visit four local elementary schools, providing 15 minutes of fitness instruction to a total of 2,200 students. This program is currently on pause due to vacancies among part-time staff.
The PAAL budget is summarized as follows:
Fiscal Year 2026-27 Budget Work Study Session
May 19, 2026
5 7
7 8
Description Amount
Employee compensation, including benefits for 1 full-time Site Director (a sworn officer), 2 full-time Assistant Site Directors, and 7 part-time Senior Program Leaders
$708,950
Utilities $36,000
Supplies & Fuel $3,000
Internal Service Charges (equipment, IT, insurance) $69,670 Software, training, and other contract services $59,830 Total Program Costs $877,450
The current program cost per child served is approximately $5,421. One purpose of the PAAL program is to foster positive relationships between Santa Ana’s children and Police Officers. A budget-balancing option is to resume service to 2,200 children through the lunchtime fitness program at local elementary schools, with a total budget of approximately $405,800 for two full-time non-sworn positions and supplies. The after- school program and summer camp, serving a total of 87 children, would be eliminated to save approximately $471,650. However, the sports coaching and mentoring would continue to allow serving the 228 children through the athletics sports teams.
If the proposed programming model is approved, the after-school program would be discontinued, allowing the Santa Anita facility to be repurposed for public programming operated by Parks and Recreation staff, with mentoring and coaching support provided through PAAL. This approach would also expand opportunities for public use and generate additional revenue.
Similar to the Santa Anita model, the Cypress Center would provide Library services alongside PAAL mentoring and coaching opportunities. Both new centers are intended to deliver PAAL services in coordination with Library and Parks and Recreation programs to maximize service delivery, cost-effectiveness, and access to critically needed community services.
Contract Ambulance Service
The FY25-26 budget included a new recurring allocation of $900,000 for an additional 24- hour ambulance unit to improve service. Staff has learned that the City’s peak hours for ambulance service are 9am to 9pm and has therefore reduced the draft budget by $250,000 to provide for a 12-hour unit and ongoing oversight, rather than a 24-hour unit.
Staff expects to recommend awarding a contract for a coverage study to ensure the City’s ambulance resources are deployed as efficiently as possible.
Summary of Documents for the Budget Process
The following table displays when each document will be shared with the City Council and the public:
Fiscal Year 2026-27 Budget Work Study Session
May 19, 2026
5 7
7 8
Document
Type May 19, 2026 (Draft) June 2, 2026
(Proposed)
June 16, 2026
(Proposed)
Detailed Budget
Document
Departmental
Budget Detail for
all City Funds
General Fund
Summary
Cannabis
Spending
Workforce
Changes
Budget Detail for
all City Funds
General Fund
Summary
Cannabis
Spending
Workforce
Changes
10-Yr Outlook
Charter
Requirement for
Public Recreation
Program
Spending
Budget Detail
for all City
Funds
General Fund
Summary
Cannabis
Spending
Workforce
Changes
10-Yr Outlook
Charter
Requirement for
Public
Recreation
Program
Spending
Capital
Improvement
Plan (CIP) –
Includes Seven-
Year CIP
CIP Summary Proposed Document
Classification &
Compensation
Plan
N/A Proposed Document
Uniform
Schedule of
Miscellaneous
Fees
Summary of New,
Modified & Deleted
Fees
Proposed Document
On June 2, the City Council is scheduled to hold a Public Hearing on the budget and to consider the first reading of the ordinance adopting the FY26-27 Budget, which covers the fiscal year from July 1, 2026, through June 2027. The second reading and final adoption of the FY26-27 Budget Ordinance are scheduled for June 16.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
There is no direct fiscal impact at this time.
Fiscal Year 2026-27 Budget Work Study Session
May 19, 2026
5 7
7 8
EXHIBITS
1. Draft Budget FY 2026-27
2. Proposed Balancing Measures totaling $13 million
3. City Boards & Commissions Agenda Activity
4. One-Time Spending – Options 1 & 2
Submitted By: Alexander Trinidad, Executive Director, Finance and Management Services Agency
Approved By: Alvaro Nuñez, City Manager