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3. Create a MX Sunset Stabilization Reserve Fund now. Build it in to the 23/24 budget. Build it into any surpluses from the 22/23 fiscal year(if any). Our city needs to put money away now to prepare for the MX rate reduction to lessen the impact and absorb such impact over multiple years instead of at once. MX revenue is such a large amount and if we truly are favoring one-time spending on MX revenue,we certainly should be able to come up with a plan now to put aside some of the revenue generated to help with the sunset. 4. Although I am not in favor of extending the 1.5% rate for MX and I believe I have heard current councilmembers (and past) indicate that they are looking forward to a lower MX sales tax rate, IF the council is going to count on the full 1.5%of MX revenue in 2029 and forward,they need to be honest with our residents, businesses, and visitors and tell us now. Obviously, it is not up to the council to make this decision but the council likely will be the body that would put it on a ballot for the residents to vote upon. IF the current council wants to go that direction,then they should say so. IF the current council does not want to have a 1.5% MX rate,then they need to begin take financially prudent steps NOW...to do otherwise is not financially wise in my opinion. 5. Consider forming a MX Sunset council committee to meet, in public,to discuss and recommend a MX Sunset Plan. I would prefer that this committee meet in public but if that is not the council's desire, I would ask that such a committee be tasked with regular reporting to the council and the public. City Debt(Unrestricted Net Position Deficit) According to the city's latest Statement of Net Position June 30, 2022 which was present previously, our city has an Unrestricted Net Position deficit balance from Governmental Activities of$468,389,289 ($468M for ease of conversation). This$468M is the amount that our city's liabilities exceed its assets adjusted for exclusion of investment in capital assets and also restricted assets. Overall,the city has a positive Net Position from Governmental Activities of$685.1M but that figure includes net capital assets and restricted assets. The city cannot use restricted assets to cover general liabilities due to external restrictions on use of funds and so it seems prudent to exclude such assets when determining operating debt. Additionally, since the city is not really able to sell most of its capital assets (such as rights of way, street trees, infrastructure such as streets and sewer projects) it would also seem appropriate to exclude the net capital assets (net means that included in this figure is the city's debt on that the capital assets0. After you exclude net positions that are not applicable to covering general debts,we are at a deficit of$468M. This is approx$1518 of debt per resident of our city. Let that sink in please...If each resident of our city were asked to pay up for a one time assessment so the city could have assets that equal our liabilities,we each (including our kids) would be writing a check to the city for$1518. This$1518 would not be used to provide additional services to our residents such as fixing streets, improving parks, or increasing public safety but instead would just get us on sound footing. That$1518 would be every resident regardless of their ability to pay including those who are already struggling to find housing,feed their families, and meet general every day needs. So,when we focus on current Revenue covering our Spending,which seems to be true right now,this is just one part of the picture...the bigger picture shows we are in debt. Now a lot of our fellow cities are also in debt though too but that should not make us feel any better IMO. As of 6/30/21 (1 have not looked at the 6/30/22 financials for each city),there are 17 cities in Orange County that actually have per capita surpluses meaning their unrestricted net position from government activities is positive. For example, residents of Cypress each have approx$1800 of surplus, Irvine approx $1400 surplus,Tustin $1300. These are cities whose residents are not in debt just because of where they live. These are cities that can choose to make investments in services and capital. The other 17 cities are in debt. Santa Ana is 31 out of 34 on that list...Brea,Anaheim, and Costa Mesa all have higher per capital deficits than Santa Ana but just imagine if we had a goal to erode that deficit year by year and ultimately be one of the cities that has a surplus. When we say we want to be a top city in the county, we need to have our financial status reflect that also. The city made progress in reducing its deficit during the HE June 30, 2022 which is great to see but that likely was due to a favorable stock/bond market impacting the pension obligations which we may find that flipping in future years due to the more recent markets especially when combined with a looming/lingering recession and inflationary pressures. 3