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REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JUNE 2, 2020 TITLE: CONSIDER THE FISCAL YEAR 2020-21 DRAFT BUDGET AND THE SEVEN-YEAR CAPITAL IMPROVEMENT PROGRAM CLERK OF COUNCIL USE ONLY: ❑ As Recommended ❑ As Amended ❑ Ordinance on 11' Reading ❑ Ordinance on 2n° Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO /s/ Kristine Ridge FILE NUMBER CITY MANAGER RECOMMENDED ACTION Receive the Fiscal Year 2020-21 (FY20-21) draft budget and provide additional direction. DISCUSSION As required by Santa Ana Charter Sections 604 and 605, the City Manager proposes a budget for City Council consideration. On May 19, 2020, the City Council held a budget work session and provided initial direction for the FY20-21 budget. The purpose of this report is to provide an updated status, and seek additional direction from the City Council. In accordance with Santa Ana Charter Section 607, the City Council must adopt the budget by July 31 of each year. Based on initial City Council direction, staff has rescheduled the public hearing to consider the proposed budget to June 16, 2020, with adoption planned for July 7, 2020. The delay allows staff to have more sales tax data for revenue estimates, and more time to discuss budget -balancing measures with labor groups. This agenda item includes the draft budget, both in summary and detail (Exhibits 1 and 2), as well as the draft Seven -Year Capital Improvement Plan (Exhibit 3). COVID-19 Expenditures and CARES Act Funding The City has incurred COVID-19 related expenditures, including purchases of personal protection equipment, sanitization supplies, Emergency Operations Center support costs, dedicated staff time, and unemployment claims. Compilation of the City's costs is a work in progress. The City has received $3.7 million of federal and state funding for COVID-19 expenditures related to the homeless, federal CDBG funding allocated to small business grants and rental assistance, and a federal CESF grant. The City also expects to receive federal FEMA reimbursement for 93.75% of eligible expenditures. FEMA money is very restrictive and subject to comprehensive audit procedures. An allocation of federal CARES Act money would provide for other COVID-19 related costs not covered by the foregoing revenue sources. California Governor Newsom included an allocation of federal CARES Act dollars to cities with populations over 300,000 in his state budget proposal revised in May. The state has a legal 65B-1