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Councilmember Benavides, asked staff if projected $10.2 million revenue from U.S. Marshal contract will be met and if contract will remain revenue positive. Opined there was a $10.1 million estimated increase in revenue and $5.9 million increase in expense, cannabis tax revenue to be allocated towards community benefit, and priority towards youth programs. Expressed concern as to future of Orange County Fire Authority (OCFA) and need to have exit clause options. Further budget and revenue discussion ensued. Deputy City Manager Cortez, initial budget estimated jail revenue at $2.7 million, addition of U.S. Marshal short term agreement increased revenue estimate to $10 million and is projected to hit $10 million mark. Opined some departments are operating with minimal staffing and are no longer effective or efficient, need to redefine what a core service is, and police expenditures will meet current budget, City Manager Godinez, noted City of Santa Ana would not be impacted if other cities pull out of OCFA and fee based city are separate from other cities. Addressed anticipation of cannabis tax revenue is based on floor area. Division Chief Black, noted City of Santa Ana would not see any upcharge for any service provided by OCFA if any entity within OCFA decides to leave. Councilmember Sarmiento, asked staff for balance of the operating reserve. Noted reserve policy limits access to funds unless City Council votes with two- thirds majority, current deficit amount at $17.1 million, and reserve funds may be exhausted by 2021. Opined need to reinvent the city, redefining service delivery, ways to continue necessary services to community, need to search for bonding opportunities, and offering naming rights to city assets for revenue generating purposes. Asked City Attorney to provide update on California Supreme Court case regarding Public Employee Retirement System (PERS). Further budget and revenue discussion ensued. City Attorney Carvalho, provided City Council with update on ongoing California Supreme Court case regarding PERS which is examining whether the State of California and local agencies can make changes to vested PERS rights and ability to make adjustments. Councilmember Villegas, asked staff if $131 million police budget includes funded positions, noted police budget includes 55 vacancies, current police officer rate is .9 per capita, and officer rate is half of the standard 1.8 per capita. Councilmember Solorio, noted previous City Council discussion on hotel visitor occupancy tax and sales tax that may be placed on the November ballot that are not included in the presentation, adult use cannabis was approved with condition that revenue would go towards enforcement, youth programs, and some administration. Expressed need to continue with council approved direction, staff role is to implement policy approved by City Council, any recommended change must be presented to City Council to reallocate funds CITY COUNCIL MINUTES 38 MAY 1, 2018 1 OB -38