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Santa Ana council hears early budget outlook showing widening gap after Measure X decline
Summary
City staff warned the Santa Ana City Council that recurring expenditures are outpacing revenues and urged early action to prepare for a large drop in Measure X revenue in 2029. Staff sought direction on one-time spending, reserve policy and a set of proposed one-time investments.
City staff told the Santa Ana City Council on March 18 that recurring costs are rising faster than recurring revenues and that the city must begin planning now to address a projected shortfall that will widen when Measure X revenue declines beginning in 2029.
The presentation by Alex Trinidad, acting director in the Finance and Treasury Department, outlined a 10-year general fund outlook showing a potential deficit beginning in fiscal 2025–26 and a larger gap after Measure X phases down. Trinidad said the projection uses current recurring revenues and applies inflation assumptions; staff will update sales tax estimates in April.
Trinidad said the general fund supports public safety, parks, libraries, code enforcement and other basic services and called for council input on balancing strategies and policy choices. “One of the major revenue sources, sales tax, is experiencing modest growth,” Trinidad said, adding that updated consultant estimates will be available in early April.
The staff presentation listed a package of one-time spending ideas drawn from the city’s $60 million in one-time general fund resources — ranging from a $250,000 upgrade at the Bristol and Edinger lot to a $5.3 million package of stadium improvements — and asked the council whether staff should develop more detailed proposals. Staff also recommended continuing annual deposits to a Section 115 pension trust to help smooth future CalPERS costs and presented options for keeping a healthy general fund reserve (staff’s baseline estimate for a policy-compliant reserve was roughly $75.5 million for FY 2025–26).
Council members pressed staff about priorities and timing. Several members — including Councilmember Hernandez and Mayor Pro Tem Vasquez — endorsed building a plan now to set aside Measure X revenues and favoring one-time spending for revenue-generating projects. Councilmember Lopez emphasized street and sidewalks and urged that infrastructure projects be prioritized to support businesses and neighborhoods. Councilmember Fan asked staff to leave additional funds in the general fund reserve if possible and supported a $1 million pension set‑aside. Multiple members pressed staff to provide clearer cost estimates and schedules for proposed projects before any final decisions.
Trinidad and City Manager Cat Downs said public outreach and a budget priority survey will continue through April; staff will return in May with draft budget documents, a draft capital program, and a proposed fee schedule, and the council will hold a public hearing in June with final adoption expected June 17.
The council did not take final budget votes at the meeting. Instead, members gave staff direction to refine the numbers, pursue additional revenue analyses and return with more detailed cost and schedule information for the citywide investments and reserve options discussed.
