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Salas, Diana From: Tim Johnson <tjohnson@jlkrllp.com> Sent: Tuesday, April 21, 2020 11:02 AM To: eComment; Councilmember Jose Solorio; Iglesias, Cecilia; Sarmiento, Vicente; Penaloza, David; Villegas, Juan; Pulido, Miguel; Bacerra, Phil; Ridge, Kristine; Downs, Kathryn Subject: Public Comment- Item 65A Dear Council, City Manager Ridge, and Executive Director Downs ... This email is regarding agenda item 65A on the agenda for April 21, 2020 with regards to the city's finances. Although I am a member of the Measure X Citizens Oversight Committee and also a Certified Public Accountant, these opinions are mine solely as a resident of the City of Santa Ana. I am concerned over multiple items in this agenda item. Some of them I believe that the council needs to direct staff in different or more direct directions while others are more concrete. Further, I am afraid that without an honest discussion about the City's finances, the residents may not be aware of the precarious financial situation that the city finds itself in. I also feel that the city may be walking a legal tightrope as it relates to Proposition 218. I want to also say that the City of Santa Ana is by no means alone in this financial storm. Cities all across the nation, state, and county find themselves in the same situation of figuring out how to respond to this health crisis that has turned into the largest economic crisis that we have seen. Some cities are worse off than Santa Ana while others are better prepared. There have been some decisions made in the past that will hurt us while there will also be some decisions that will help us. Regardless of the past, we can only control how we respond to this situation before us. Summary First: This is a long letter ... I get it, I am rambling and may be saying a lot of what you already know and reiterating info in the Staff Report. So here is the summary first: • Please do not just "receive and file" this item like other "receive and file" items. Please discuss it, understand the current reality, ask questions, challenge assumptions, explore options, direct staff to provide multiple options, and at the end of the day face reality. This is the largest financial crisis we have ever seen in our city and time needs to be devoted to it. Additionally, the time to do this is now and not later. The longer we wait, the tougher it will be. • 1 urge you to explore whether the $6.6M Refuse Enterprise Fund transfer to the general fund is a violation of Proposition 218. This is probably the most important thing that you can seek clarification on tonight because this may be illegal and will open the City up to lawsuits while also being a current directive and not an item for future consideration. If you and City Staff believe it is a legal transfer, please state why on the record for the residents to hear and understand. Even if it is "franchise fee revenue" paid by the refuse provider, those funds very likely originate with the residents of Santa Ana who are paying the fees to the city and then the city paying the refuse provider- otherwise the refuse provider would never agree to take on the contract. Courts frown upon cities mis-using fees which are supposed to pay for services but not provide "profit" or provide other general fund revenue because it has not been properly approved by the voters. If there is a balance, this very well may mean that residents have been overcharged historically. Maybe I am wholly off base here, but if I am thinking it, it is likely others may be also and it would be appreciated to have this item specifically addressed in terms of how the balance came to be and what it is intended to be used for. For example, if it was always to be General Fund revenue, why would it go into that account to begin with? • Please do not limit staff to providing a budget with the only specific direction being utilization of the Economic Uncertainty Reserve. Please direct staff to provide a budget proposal taking into account all necessary and prudent measures including multiple options for prioritization.