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Anaheim finance director outlines midyear budget as general‑fund deficit widens
Summary
City finance director Debbie Moreno told the council the citywide adopted budget is $2.4 billion and that the general fund remains under pressure, with a structural deficit managed in prior years by deficit bonds; staff projected modest revenue gains but higher labor and operating costs will increase the near‑term deficit.
Debbie Moreno, Anaheim's finance director, told the City Council during a midyear budget workshop that the adopted citywide budget is approximately $2.4 billion and that the general fund — the city's main discretionary pool — makes up about 22% of that total. "The general fund adopted budget will be the focus of the remainder of the presentation," Moreno said, outlining the city's primary revenue streams and key risks.
Moreno said the adopted five‑year forecast reflected a structural deficit at adoption: "General fund sources were $611,000,000 and uses were $675,000,000, a deficit of $64,000,000." She recalled a 2021 council decision to issue deficit bonds to smooth the budget and said that a portion of the bond proceeds had been used to balance the plan. The finance director also said transient occupancy tax (TOT), sales tax and property tax are projected to outpace the adopted budget this year but warned that many of the revenue gains are restricted or tied to other funds.
The presentation broke down major revenues — the adopted TOT budget is roughly $247 million (about 38% of general‑fund operating sources), sales and use tax about $115 million, and property tax about $111 million. "TOT, sales tax and property taxes are projected to exceed budget slightly," Moreno said, but added that higher labor contracts and other operating costs are expected to raise expenditures. Staff estimated the net increase in the five‑year forecast deficit at about $12 million above the adopted plan and noted labor contract impacts in the current year on the order of $9–12 million.
Budget Manager Dean Lee outlined department priorities and capital projects that would shape near‑term decisions, highlighting park improvements (new splash pad, skate‑park work and the OC Riverwalk/ River Park project), public‑safety investments including the ambulance program and Fire Station 12 construction, and housing‑program initiatives such as the Azure affordable apartments and the My Anaheim Home down‑payment assistance pilot. Lee said the city expects to continue refining revenue and expenditure estimates through the spring budget calendar and will return with a proposed budget in May.
Councilmembers asked for clarification on when LPMR/resort‑related revenues will pay down associated debt, how the city distinguishes 'uses' from 'expenditures' in charts, and the timing of labor costs; staff said refinements would appear in the proposed May budget. The council concluded the workshop with direction to continue outreach and to bring supplemental detail for the formal budget hearings later in the spring.
The city will publish the proposed budget in May; formal adoption is scheduled for June.
