ITEM 6-B
Council Meeting: June 23, 1992 Santa Monica, California
TO: MAYOR AND CITY COUNCIL
FROM: City Staff
SUBJECT: Recommendation to Approve Resolutions Establishing the
City's Gann Appropriations Limit For FY1992-93 and
Appropriating FY1991-92 Funds to Gann'ed Reserve and/or
Designated Balance Sheet Accounts
Introduction
This report recommends approval of resolutions establishing the
City's Gann Appropriations Limit for FY1992-93 at $83,684,834 and
appropriation of available FY1991-92 funds to Gann'ed reserve
and/or designated balance sheet accounts.
Gann Appropriations Limit for FY1992-93
On June 23, 1992, the City Council will be considering the
proposed City FY1992-93 budget for adoption. In order to meet
legal requirements, the City Council must also formally adopt the
City's Gann Appropriations Limit for FY1992-93.
Based upon Article XIIIB Appropriations Limit Uniform Guidelines
released by the League of California Cities in March 1991, the
City's Gann Appropriations Limit of $83,684,834 for FY1992-93 has
been computed and made available to the public fifteen days prior
to this meeting. The FY1992-93 limit has been computed based on
the following allowable increase factors: the annual percentage
change in the State Per Capita Personal Income times the annual
percentage population change for Los Angeles County. Staff
recommends that the Council approve the FY1992-93 limit based on
these factors. The calculation of the City's FY1992-93 limit
using these factors is detailed at Attachment A. An appropriate
resolution to establish the City's FY1992-93 Gann Appropriation
Limit at $83,684,834 is at Attachment B.
The alternate factors of the "annual percentage population change
of the City of Santa Monica" and the "annual percentage change of
local non-residential assessed valuation due to new construction"
were not used because: a) the annual percentage population change
for Los Angeles County is a better approximation of the increase
in the actual population served by the City, and b) data
concerning the annual percentage change in the local
non-residential assessed valuation due to new construction is not
available from the County Assessor's Office.
Comparison of Proposed FY1992-93 Appropriations and Tax Proceeds
Subject to Limitation to the FY1992-93 Gann Limit
A comparison of the City's FY1992-93 Gann Appropriations Limit
and FY1992-93 appropriations and tax proceeds subject to
limitation as set forth in the City's proposed FY1992-93 budget
(including recommended final changes) is as follows:
Proposed Gann-related Spending for FY1992-93
TORCA
On-Going Override Override
Component + Component* + Component = Total
Gann
Limit $52,401,789 $24,705,800 $6,577,245** $83,684,834
Appropriations
Subject to Limi-
tation 44,701,097 24,705,800 5,622,598 75,029,495
Net under/
(over) $ 7,700,692 $ -0- $ 954,647 $8,655,339***
* For Police, Schools, Basic City Services and Other Specified
Purposes per City Charter.
** Limit reflects estimated 92/93 TORCA Tax proceeds and share
of interest earnings, and estimated unexpended tax proceeds
as of 6/30/92.
*** In terms of receipt of tax proceeds (exclusive of TORCA tax
proceeds), the City is $6,146,152 under its' Gann Limit.
The above table indicates that in all components of the City's
total Gann Appropriations Limit, FY1992-93 appropriations subject
to limitation are equal to or less than the applicable limit
component.
Appropriation of Available FY1991-92 Funds to Gann'ed Reserve
and/or Designated Balance Sheet Accounts
Under the provisions of Article XIIIB of the State Constitution,
a city is authorized to appropriate to reserve and/or designated
balance sheet accounts the difference between actual spending
(i.e. expenditures and encumbrances) subject to the Gann
Appropriations Limit and the City's Gann Appropriations Limit for
that fiscal year. This action can be accomplished by the City
Council passing a resolution to this effect. For FY1991-92, an
appropriate resolution to accomplish this transaction has been
prepared and is at Attachment C.
By taking this action, the City Council, in effect, subjects to
the FY1991-92 Gann Appropriations Limit the funds so appropriated
to Gann'ed reserve and/or designated balance sheet accounts.
Thus, the "Gann'ed" monies become available to finance carryover
capital projects or for appropriation during FY 1992-93 and/or
subsequent fiscal years free of FY1992-93 and/or subsequent
fiscal year's Gann limitations.
As the following table indicates, Council adoption of the
resolution at Attachment C means that up to $10,421,818 of funds
which may be available at the end of the current fiscal year can
be "Gann'ed".
Estimated Actual Gann-related Spending for FY1991-92
TORCA
On-going Override Override
Component + Component*** + Component = Total
Gann
Limit* $51,965,281 $24,500,000 $4,979,565**** $81,444,846
Estimated Actual
Spending Subject
to Limitation 46,423,286 24,500,000 99,742 71,023,028
Net
under/ $ 5,541,995 $ -0- $4,879,823 $10,421,818**
(over)
* As adopted by the City Council on June 25, 1991 and revised
by voters on June 2, 1992.
** In terms of receipt of tax proceeds (exclusive of TORCA tax
proceeds), the City is $6,602,581 under its' Gann Limit.
*** For Police, Schools, Basic City Services and Other
Specified purposes per City Charter.
**** Limit reflects estimated 6/30/92 fund balance which is
proceeds of taxes.
When the City's FY1991-92 Comprehensive Annual Financial Report
is submitted to the Council this Fall, the Finance Director will
report to the Council actual total FY1991-92 spending and the
actual amount which the Council has appropriated to "Gann'ed"
reserve and/or designated balance sheet accounts.
Budget/Financial Impact
Adoption of the attached resolution establishing the City's
FY1992-93 Gann Appropriations Limit does not have a
budget/financial impact. Adoption of the attached resolution
appropriating available FY1991-92 funds to "Gann'ed" reserve
and/or designated balance sheet accounts will enable the City to
continue to finance carryover capital projects and increase the
City's ability to respond to future service needs.
Recommendation
It is recommended that the attached resolutions which establish
the City's Gann Appropriations Limit for FY1992-93 at $83,684,834
based on the allowable increase factors of the annual percentage
change in the State Per Capita Personal Income and the annual
percentage population change of Los Angeles County,and which
appropriate up to $10,421,818 of available FY1991-92 funds to
Gann'ed reserve and/or designated balance sheet accounts be
approved.
Attachments
Prepared by: Mike Dennis, Director of Finance
ATTACHMENT A
CITY OF SANTA MONICA CALCULATION OF FY1992-93
GANN APPROPRIATIONS LIMIT
FY1991-92 TOTAL GANN APPROPRIATIONS LIMIT
Ongoing Component (a) (Exclusive of $51,965,281
TORCA Override Component
Police, Schools, Basic City Services
and Other Specified Purposes
Expenditure Override (b) 24,500,000
Sub-Total $76,465,281
ADJUSTMENT FACTORS
Allowable FY1992-93 Adjustment
California Per
Capital Personal
Income Change (c) .9936 times
County Pop. Chg. (c) 1.0149 =
1.0084 x 1.0084
Sub-Total $77,107,589
Plus FY1992-93 TORCA Override Component
(Per Section 2015B of City Charter) (d) 6,577,245
FY1992-93 TOTAL GANN APPROPRIATIONS LIMIT $83,684,834
(a) As adopted by City Council on 6/25/91.
(b) Approved by City voters on June 2, 1992.
(c) Per State Department of Finance, May 1, 1992.
(d) Approved by City voters June 2, 1992; amount reflects: a)
estimated FY1992-93 TORCA tax proceeds and share of interest
earnings, and b) estimated unexpended tax proceeds as of 6/
30/92.
ATTACHMENT B
Council Meeting: June 23, 1992 Santa Monica, California
RESOLUTION NO.
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SANTA
MONICA ESTABLISHING THE GANN APPROPRIATIONS
LIMIT FOR THE FISCAL YEAR 1992-93
WHEREAS, the City Council is required under the
provisions of Government Code Section 7910 and Article XIIIB of
the California Constitution to establish its appropriations limit
by resolution; and
WHEREAS, documentation used in the determination of the
appropriations limit has been available to the public for fifteen
days prior to this meeting as required by Government Code Section
7910.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA
MONICA DOES RESOLVE AS FOLLOWS;
SECTION 1. For purposes of Article XIIIB of the
California Constitution, the City of Santa Monica appropriations
limit for the fiscal year 1992-93 shall be $83,684,834.
SECTION 2. The City Clerk shall certify to the
adoption of the Resolution, and thenceforth and thereafter the
same shall be in full force and effect.
APPROVED AS TO FORM:
ROBERT M. MYERS
City Attorney
ATTACHMENT C
Council Meeting: June 23, 1992 Santa Monica, California
RESOLUTION NO.
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SANTA MONICA APPROPRIATING FISCAL YEAR
1991-92 FUNDS TO GANN'ED RESERVE AND/OR
DESIGNATED BALANCE SHEET ACCOUNTS
WHEREAS, under the provisions of Article XIIIB of the
California Constitution, a city is authorized to appropriate to a
Gann'ed reserve and/or designated balance sheet accounts the
difference between actual spending subject to the Gann
Appropriations Limit and the City's Gann Appropriations Limit for
that fiscal year; and
WHEREAS, appropriating available funds to Gann'ed
reserve and/or designated balance sheet accounts is in the public
interest because establishment of Gann'ed reserve and/or
designated balance sheet accounts increases the ability of the
City Council to respond to the service needs of the citizens of
the City of Santa Monica.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA
MONICA DOES RESOLVE AS FOLLOWS:
SECTION 1. All Fiscal Year 1991-92 General Fund, Parks
and Recreation Fund, and TORCA Fund appropriations, exclusive of
Federal or State grant appropriations, shall be adjusted to
actuals as determined by the City's annual financial audit as set
forth in the City's Fiscal Year 1991-92 Comprehensive Annual
Financial Report, and the difference between the lesser of
$10,421,818 or actual expenditures and encumbrances subject to
limitation as determined by the City's annual financial audit as
set forth in the City's Fiscal Year 1991-92 Comprehensive Annual
Financial Report for these Funds and the City's Fiscal Year
1991-92 Gann Appropriations Limit, to the extent funds are
available, is hereby appropriated to reserve and/or designated
balance sheet accounts in these respective Funds.
SECTION 2. The City Clerk shall certify to the
adoption of this Resolution, and thenceforth and thereafter the
same shall be in full force and effect.
APPROVED AS TO FORM:
ROBERT M. MYERS
City Attorney