Item 19 - Fiscal Year 2020-21 Mid-Year Budget Update and Appropriation Adjustments

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Fiscal Year 2020-21 Mid-Year Budget Update and Appropriation Adjustments February 16, 2021 Page 6 4 3 9 The City was able to use a portion of its federal CARES allocation to pay for Police COVID-19 response. Additional overtime costs related to public protests and the absorption of four Police Officers previously funded by the Parking Enterprise offset the savings. As discussed further below, Parking Garage revenue is insufficient to fund all Parking Enterprise commitments to the downtown business community. Fire Services: The City was able to use a portion of its federal CARES allocation to pay for Orange County Fire Authority’s COVID-19 response to Santa Ana residents. As such, staff recommends a reduction to General Fund appropriations of $2,736,183 to reflect the savings. Finance & Management Services: On January 19, 2021, the City Council approved proposed agreements for property tax and utility users’ tax consultants to provide auditing and projection of related revenues. Previously, staff recorded the cost of these agreements as an offset in the revenue accounts. To improve the transparency of accounting practices, staff will begin recording the cost of the agreements in a expenditure account, and record the gross revenue instead of net revenue. As such, both the revenue estimate and corresponding appropriation will increase by $159,125 with no net fiscal impact to the General Fund. To market CARES and Advanced Meter Infrastructure (AMI) programs, the City has increased its usage of printing services, and staff proposes an appropriation increase of $50,000. In support of the City Council goal to modernize operations, staff proposes to update its credit card payment system from card-swipe to Chip & PIN to comply with Payment Card Industry (PCI) standards. The cost of this update is $20,000. Community Development Agency: CDA is primarily a grant-funded agency. The administrative allowances for grant funds such as the Workforce Innovations and Opportunities Act (WIOA) and Housing Programs have decreased over the years, yet the administrative burden to ensure compliance with grant requirements has increased. The result is a need for ongoing General Fund subsidy to support the continued administration of these programs. Due to the receipt of additional federal funding this year related to the pandemic, there is no requested adjustment at this time. However, staff expects a General Fund subsidy may be necessary for future periods. OTHER FUNDS Cannabis Public Benefit Fund: The City Council established the Cannabis Public Benefit Fund for Youth and Enforcement Programs utilizing two-thirds of the Adult-Use Retail and Commercial Cannabis tax revenue collected in the General Fund. With an increase in these revenues, the corresponding transfer to this fund must increase by $5.3 million. The additional funding will be available to appropriate as part of the FY21-