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Non-personnel Expenses — Staff is recommending reducing Non-personnel expenses as identified in Table 3 above (all expense categories other than Personnel) by a total of approximately $2.9 million. These decreases are primarily based on expected savings due to (1) the cancelation of several City programs, events, staff training programs, and conferences (2) reduced repair and maintenance activities, and (3) closing most City facilities. In addition, staff recommends reversing the $980,923 allocation to the R&R funds from the March 3, 2020 Midyear budget surplus. The $980,923 is included in the Repairs & Maintenance expense category. Operating Transfers — The second Midyear Budget reduces transfers to the CIP by $3.4 million, of which $1 million is a reversal of the March 3, 2020 Midyear Budget surplus budget allocation to the CIP. The remaining $2.4 million will reduce General Fund CIP reserves from $10.2 million to $7.8 million. General Fund Reserves and Fund Balance — Staff is not recommending reversing the $2 million added to the General Fund reserve in the March 3, 2020 Midyear budget. Thus, the General Fund ending fund balance continues to be $30.6 million. The City's reserve policy requires a minimum reserve equal to 20 percent of operating expenses and a target of 25 percent. The proposed General Fund reserve of$30.6 million equals 26 percent of the second Midyear General Fund operating expenses. Staff is not recommending adjustments to the remaining funds. COVID-19 Related Funding Request Staff requests an allocation of$100,000 from the CIP Reserve to support a COVID-19 mobile response in partnership with Stanford Valley Care by providing funding to purchase test swabs and other lab materials required to test people for COVID-19. Staff expects these expenses to be eligible for FEMA reimbursement. Status of Federal Funding Congress passed and the president signed the Coronavirus Aid, Relief, and Economic Security Act the "CARES Act" the end of March that authorizes more than $2 trillion to battle COVID-19 and its economic effects, including immediate cash relief for individual citizens, loan programs for small business, support for hospitals and other medical providers, and various types of economic relief for impacted businesses and industries. The CARES Act includes $150 billion that will be distributed to state, local and tribal governments to provide immediate relief. To receive direct funding, local governments must have a population of 500,000 or greater. Since only a few cities in California meet this threshold, the bulk of California's funding will be allocated to the state. The state could allocate some of its funding to cities with populations less than 500,000. As of the writing of this report, the state has not communicated whether it intends to allocate any of its CARES Act funding to cities. That said, the CARES Act increased Community Development Block Grant (CDBG) funding to cities. Staff expects Pleasanton to receive an additional $200,000 in CDBG funds that can be used to prevent and respond to the spread of infectious diseases such as COVID-19. To receive the increased CDBG funding, the City may have to amend its Consolidated Annual Action Plan. Staff will present an amendment to its Page 4 of 5