PROPOSE CITY BUDGET SUMMARY FY 18-19_75A-1

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that rate, the reserve would be depleted in approximately two (2) months if we had a catastrophic event. Additionally, like most California cities, Santa Ana relies on these fund balance reserves to maintain a positive cash position during the course of the fiscal year, especially during the first five to six months of each fiscal year, since the majority of the City's revenues are not received until December/ January and April/May. As we accrue cost savings or revenue surpluses into the future, I will continue to recommend that these reserves be increased; we owe it to the community and to our employees. Maximizing Opportunities Given our fiscal challenges, a top priority has been to maximize economic development opportunities. With the advent of Proposition 64, the City took a lead role among municipalities to regulate cannabis uses within our City; culminating in being one of the first of only a handful of cities that had adult -use retail cannabis dispensaries operating on January 1, 2018 in California. This has been followed by the adoption of regulatory ordinances for cannabis testing uses, and more recently, commercial cannabis uses. Since these commercial uses may require more substantial tenant improvements, and thus more prolonged entitlement processes, we are only budgeting a third of the lower range of projected revenues for FYI 8-19. There also has been considerable development interest in housing and mixed use projects, and staff has been working very diligently to accommodate all of this interest in our City. Currently, there are 108 total residential and non-residential projects in entitlement plan check or under construction. Of these projects, we anticipate 6,180 residential units and 1,396,390 square feet of non-residential development, With this increased investment comes additional housing and retail amenities for our community, and more property tax revenue to support our City services. Moving Forward As previously mentioned, our current predicament was several years in the making, and consequently, our transition back to fiscal sustainability will also occur over a couple of years. The path forward will likely involve a concerted effort to reduce costs and also increase revenues. As we look at reducing costs, it's important to note that Santa Ana is already recognized as being one of the most efficient at providing services when compared to the 1 I largest cities in California, and the largest 100 cities in the country. The organization has become lean over time. As an example, in FY 1986-87, the ratio of employees to population served was 7.5 employees per 1,000 residents; currently, our ratio is 3.46 per 1,000 residents. The pressure to limit costs will be tremendous, given the needs of the Ca1PERS system to remain solvent, the need to continue resolving compliance issues within some of our enterprise finds, the need to address deferred maintenance for our infrastructure, in addition to any requests from our bargaining units at the negotiation table. Therefore, this next year is being proposed as a "bridge" year, an opportunity to frame the policy discussions around which core services we can afford to deliver and at what service levels, along with vetting all revenue measures for consideration. Within the realities of our budget outlook, strategic investments are being made that will yield positive results moving forward. Of particular note are the following projects; completion of