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City of Santa Ana, California <br />Proposal for Municipal Financial Advisory Services <br />March 12, 2020 <br />1. Review and evaluate the City's forecast of its revenue streams (and if necessary, <br />separately model the revenue streams) to understand the structure and rationale, <br />including internal and external factors and variables that may impact the amount of <br />revenue collected. <br />2. Assess the long-term sustainability of existing revenue streams, including strengths, <br />weaknesses and threats, and the likelihood of growth or attrition over the long-term. <br />3. Evaluate opportunities for restructuring/enhancing existing revenue streams or <br />developing new revenue streams, including measures that require voter approval. <br />4. Develop recommendations for potential restructuring of existing revenue streams, <br />and/or the design and implementation of new revenue streams, including measures that <br />would require voter approval, and present a cost-benefit/risk analysis of proposed <br />restructured and new revenue streams. <br />B. Assessment of General Fund Expenditure Categories, Cost Drivers and Program Service Delivery <br />Models <br />Additionally, we can conduct an in-depth fiscal analysis of the General Fund expenditure <br />categories. The goal of our in-depth expenditure assessment is to determine what actions help <br />control or mitigate key cost drivers that most influence decision -making today, such as increasing <br />retirement and post -employment benefit costs, labor -related staffing and workforce retention <br />costs, and contracted core services costs. <br />1. Our first task will be to review and evaluate the City's forecast of its expense categories, <br />the cost drivers affecting the expenses and the variables used to drive the expenses <br />through the City's forecast. Cost drivers are a city's financial and organizational <br />determinants (including linkages and interrelationships) that significantly dictate the <br />expense of inputs required for delivering municipal services. <br />2. The second task will be to examine identified service areas where there is opportunity <br />for cost reduction, containment and recovery. Depending on the data, analytics and <br />information received from the City, this process may involve identification of additional <br />efficiencies that can be achieved within a program's current service delivery model (cost - <br />containment strategies, changes in procedures or policies, etc.) or alternative service <br />models that could enhance program efficiencies while maintaining capacity for effective <br />service delivery and achievement of program outcomes. <br />UFI can provide both a narrative evaluation of the strengths, weaknesses, opportunities and <br />threats for each strategy, and an assessment matrixfor each strategy as to its impact on municipal <br />service levels, organizational stability, fiscal burden to the community, and financial stability to <br />the city. <br />Financial Strategies - Recession Risks <br />With looming economic uncertainty, the question is not whether there will be another recession that <br />impacts the City, but rather when next recession occurs, what will be the extent of its fiscal impact on the <br />VUH 11 <br />25F-30 <br />