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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />AUGUST 4, 2020 <br />TITLE <br />APPROPRIATE $28.6 MILLION OF <br />FEDERAL CARES ACT MONEY <br />ALLOCATED FROM THE STATE AND <br />APPROVE THE PROPOSED CARES <br />SPENDING PLAN <br />/s/ Kiistine RidE< <br />CITY MANAGER <br />CLERK OF COUNCIL USE ONLY: <br />❑ As Recommended <br />❑ As Amended <br />❑ Ordinance on 1 s' Reading <br />❑ Ordinance on 2ntl Reading <br />❑ Implementing Resolution <br />❑ Set Public Hearing For_ <br />CONTINUED TO <br />RECOMMENDED ACTION <br />1. Approve an appropriation adjustment to allocate the full $28,580,208 of state -allocated <br />funding from the federal Coronavirus Aid, Relief, & Economic Security (CARES) Act for <br />various expenditures to respond to COVID-19. <br />2. Approve the proposed CARES spending plan. <br />3. Authorize the City Manager to move the appropriation between departments, within the <br />CARES special revenue fund, to adjust as needed for residents' actual use of each program. <br />DISCUSSION <br />On March 27, 2020, the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act was <br />signed into law, and included funding for state and local government. The City of Santa Ana did <br />not receive a direct federal allocation; however, the State of California adopted its Fiscal Year (FY) <br />20-21 budget to include a $28.6 million pass -through to the City. The City just recently received <br />the first funding installment from the state in the amount of $4,763,368. Future allocations are <br />anticipated over the next five months. <br />This $28.6 million allocation is separate from the $2,936,476 of federal CARES money passed - <br />through to the City by the County of Orange. The City Council appropriated the county pass - <br />through on July 7, 2020 and allocated it to FYI 9-20 expenditures in response to COVID-19. <br />Per federal guidelines, CARES money is restricted to COVID-19 response expenses incurred <br />beginning March 1, 2020 through December 30, 2020; and cannot be used to backfill local revenue <br />losses. The state has placed a further restriction to submit an expenditure report by September 1, <br />2020, and substantially spend the money by October 30, 2020. The City must return any unspent <br />CARES money to the state. <br />Federal restrictions for CARES funding have evolved several times since March, with the latest <br />guidance issued July 8. There are current discussions at the federal level with the potential to relax <br />restrictions further, even allowing local governments to use up to 25% of CARES funding for <br />60A-1 <br />