City staff are painting a dire and bleak picture of Santa Ana’s future financial outlook projecting a roughly $35 million budget deficit when Measure X, a 1.5% sales tax measure approved in 2018, decreases in four years.
[Read: Santa Ana Leaders Warn Looming Sales Tax Cliff Could Tear Up Public Services]
It’s a projected deficit in the 2028-29 fiscal year that could threaten funding for police, fire and ambulance services, park maintenance and library services.
And if the projected deficit is left unchecked it could reach $129 million in a decade’s time.
Alex Trinidad, the city’s assistant director of Finance and Management Services, said the city’s spending is already outpacing revenue – creating a projected $4.2 million deficit next year.
The gap is expected to widen when Measure X sunsets.
“As we consider balancing options, we may explore potential department wide adjustments, while aiming to minimize service impacts,” he said at Tuesday’s city council meeting.
The projected deficit in Santa Ana comes as officials in neighbouring Orange look to hire a public accounting firm to help them figure out how they ended up in a multi-million dollar deficit and ways to protect the city’s financial future.
[Read: Building Back Trust: Diving into Orange’s Multi-Million Dollar Budget Deficit]
Santa Ana Mayor Valerie Amezcua said officials have to be very careful with how they choose to spend taxpayer’s dollars.
“We need to stick to what’s important,” she said at the March 18 council meeting. “Hopefully this council can agree to pass a budget that is going to keep us firm and on a solid foundation so we’re not having conversations like Orange and other cities.”
The deficit also comes after Santa Ana Unified School board members moved forward with a plan to layoff hundreds of teachers and staff at the end of the school year as district officials try to quell an $187 million budget deficit amid a public school exodus.
In order to address the deficit, the Measure X Citizen Oversight committee is recommending officials form a plan to tackle the shortfall, set aside Measure X revenue for future use and use some of the sales tax dollars to kickstart revenue generating projects.
“I would like to see a minimum of at least $5 million set aside through our measure x, so that we can gradually start to prepare,” Councilman Johnathan Hernandez said at the meeting.
How Will Santa Ana Tackle The Deficit?
While it’s still early in the budget season, Santa Ana City Council members mulled over a host of different ideas on how to shrink the projected deficit at the March 18 city council meeting.
The discussions, which happen in every city throughout Orange County, come before the city must pass a budget by the end of June since the fiscal year runs from July 1 to June 30.
Santa Ana officials voiced support for ways to use $16 million in one-time spending from the general fund to help bring in money as they inch closer to the end of Measure X.
Most council members supported a proposal to spend roughly $5.3 million to expand Santa Ana Stadium by over 2,000 seats and create a beer garden and refreshment area to help bring in more revenue to Santa Ana.
Councilmembers Ben Vazquez, Thai Viet Phan, Hernandez and Amezcua supported spending $250,000 to renovate the Bristol and Edinger Parking Lot and make it a venue for community events that could be charged to use.
“It’s adjacent to some very good restaurants as well in the city, and there’s a large number of residents who are already utilizing this parking lot for Friday night munchies. There’s car shows that happen there as well,” Hernandez said at last Tuesday’s meeting.
“I can see our city utilizing this location every single weekend to generate revenue.”
Vazquez, Hernandez and Phan supported looking at creating a conference space at the senior center to help generate more revenue.
Amezcua questioned how that might impact seniors and the center’s programing.
Councilman Phil Bacerra and Amezcua supported spending $250,000 to improve and expand the Santa Ana Police Department jail for contract housing.
“We’re going to make some money,” Amezcua said, adding the proposal is not for immigration purposes. “People actually pay to stay in jail and not go to county to serve their time.”
Councilmembers Jessie Lopez, Bacerra, Vazquez, Phan and Amezcua supported spending $250,000 to build new bus shelters or replace old one across the city
“We have more bus riders in the city than anywhere else in the county, and it’s just something that we really need to invest in. It’s a lot safer for our residents, especially as things get really hot,” Phan said.
Lopez, Phan, Vazquez and Bacerra supported setting aside at least $1 million to help pay off future pension costs.
Bacerra and Phan supported spending $1.5 million on street repairs in the Majestic, MacArthur Place, and Columbine areas to attract more businesses to Santa Ana
“Those improvements aren’t just going to help that area. They’re going to help the entire city, because obviously we see a lot of high ticket clients, occupants in that area,” Bacerra said, adding there should be a recurring investment in that area.
Hosam Elattar is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.