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remaining in its balance. Also identified $1.OM from the opening of dispensaries for the medical marijuana tax, for FY 18-19 it will include change in ordinance to broaden operation hours and such, and will be reflected in outer year. Robert Cortez, Deputy City Manager, added this is a conservative number that will be brought to the City Council at first meeting in June; which will include Bowers, signage. Anticipate numbers will be increasing, conservative ballpark number to be used at this time. Change in operation hours will provide operators about 40% more opportunity to be open and sale their medical marijuana, anticipating generated increases. In moving from a Type II to holding facility, intent would then be to close the Bureau of Prisons and Marshals contract. Would technically use $2.5M from moving to a holding facility, so that would have to be included. City attorney has expressed including some type of ordinance that would recover legal fees in terms of development, so placeholder for $100,000 placed, which would mean that our -_-- budget gap: would narrow to $9.3M and if you use one-time monies of $9.3M then you would have a balanced budget. This is a placeholder for now as priories have and will be discussed, so those can be included as additions to FY17/18. Looking at Budget Gap for FY 18/19 the plan shows: full value of jail recognizing close of Type II jail and there would be no Strategic Plan funds, Medical marijuana tax changes will be recognized, sale of land on Main Street related to hotels, Citywide Fee Study approved by council, recognize full value of jail revenue, identified revenue sources of two new hotels [Holiday Inn Express and Hampton Inn], expanding parking enforcement, potential economic development and jail reuse revenue, and legal expense reimbursement. The adjusted budget gap for year 2 would be $8.9M; use of remaining one-time monies and if economic uncertainty funds tapped; budget gap then would be $0.7M. If the Economic Uncertainty of $3.M is used, funds would be exhausted. Intent is to not use operating reserves as per fiscal policy; balance out any variations as they may occur to revenues (Prop 6). Use of operating reserves would require 2/3 council approval. Uncertainty funds allows you to use those monies for a two-year period and develop a plan to recover those monies and build up reserves. Mayor Pro Tem Martinez: Use of one-time funds to balance budget is not good practice. Not in favor of amending fiscal policy. Willing to support a resolution for one-time monies. Need ongoing sources of revenues to fulfill budget expenses, unless we make serious cuts. Mr. Gutierrez added: Policy not required to be changed as it relates to operating reserves. The one-time element specifically indicates you can only use for term specific or as one-time expenditure. No trigger that allows council to split or change that. However council has to take action, as policy does not currently allow monies May 15, 2017 1 Economic Development, Infrastructure, Budget & Technology Minutes 13A-8