Item CC/HA/RA/PA-3
Council Meeting: 6/24/97 Santa Monica, CA
TO: MAYOR AND CITY COUNCIL
FROM: City Staff
SUBJECT: Recommendation to Approve Resolutions Establishing the
City's Gann Appropriations Limit for FY 1997-98 and
Appropriating FY 1996-97 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 FY 1997-98 at $105,099,475
and appropriating available FY 1996-97 funds to Gann'ed reserve
and/or designated balance sheet accounts.
Gann Appropriations Limit for FY 1997-98
On June 24, 1997, the City Council will be considering the
proposed City FY 1997-98 budget for adoption. In order to meet
legal requirements, the City Council must also formally adopt the
City's Gann Appropriations Limit for FY 1997-98.
Based upon Article XIIIB Appropriations Limit Uniform Guidelines
published by the League of California Cities in March 1991, the
City's Gann Appropriations Limit of $105,099,475 for FY 1997-98
has been computed and made available to the public fifteen days
prior to this meeting. The FY 1997-98 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 the County of Los
Angeles. Both factors were provided by the State Department of
Finance. Staff recommends that the Council approve the FY
1997-98 limit based on these factors. The calculation of the
City's FY 1997-98 limit using these factors is detailed at
Attachment A. An appropriate resolution to establish the City's
FY 1997-98 Gann Appropriations Limit at $105,099,475 is at
Attachment B.
Comparison of the FY 1997-98 Gann Limit to the Proposed FY 1997-98 Appropriations and Tax Proceeds Subject to Limitation
A comparison of the City's FY 1997-98 Gann Appropriations Limit
and FY 1997-98 appropriations and tax proceeds subject to
limitation as set forth in the City's Proposed FY 1997-98 Budget
(including recommended final changes) is as follows:
Proposed Gann-related Spending for FY 1997-98
TORCA
On-Gong Override Override
Component + Component* + Component = Total
Gann Limit $65,285,223 $28,196,853 $11,617,399** $105,099,475
Appropriations
Subject to
Limit-
ation*** $55,287,123 $28,196,853 $9,040,895*** $92,524,871
Net Under/
(Over) $9,998,100 $0 $2,576,504 $12,574,604
* For Police, Schools, Basic City Services and Other Specified
Purposes per City Charter.
** Limit reflects estimated FY 1997/98 TORCA Tax proceeds and
share of interest earnings, and estimated unexpended tax
proceeds as of 6/30/97.
*** In terms of receipt of tax proceeds, the City is $1,402,176
under its Gann Limit.
**** Consists of FY 1996-97 appropriations subject to limitation
reappropriated to FY 1997-98 plus new FY 1997-98
appropriations subject to limitation.
The above table indicates that in all components of the City's
total Gann Appropriations Limit, FY 1997-98 appropriations
subject to limitation are equal to or less than the applicable
limit component.
Appropriation of Available FY 1996-97 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 FY 1996-97, 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 FY 1996-97 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 1997-98
and/or subsequent fiscal years free of FY 1997-98 and/or
subsequent fiscal years' Gann limitations.
As the following table indicates, Council adoption of the
resolution at Attachment C means that up to $18,242,342 of "un-Gann'ed" funds which may be available at the end of the current
fiscal year can be "Gann'ed".
Estimated Actual Gann-related Spending for FY 1996-97
TORCA
On-Gong Override Override
Component + Component* + Component = Total
Gann Limit $61,608,485 $26,608,861 $12,029,540** $100,246,886
Estimated
Actual
Spending
Subject to
Limitation $55,187,283 $26,608,861 $217,400 $82,004,544
Net Under/
(Over) $6,430,202 $0 $11,812,140 $18,242,342
* As adopted by the City Council on June 25, 1996
** In terms of receipt of tax proceeds, the City is $165,502
under its Gann Limit.
*** For Police, Schools, Basic City Services and Other Specified
Purposes per City Charter.
When the City's FY 1996-97 Comprehensive Annual Financial Report
is submitted to the Council this Fall, the Finance Director will
report to the Council actual total FY 1996-97 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 FY
1997-98 Gann Appropriations Limit does not have a
budget/financial impact. Adoption of the attached resolution
appropriating available FY 1996-97 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 FY 1997-98 at
$105,099,475 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 the County of Los
Angeles, and which appropriate up to $18,242,342 of available FY
1996-97 funds to Gann'ed reserve and/or designated balance sheet
accounts be approved.
Attachments (available in the Santa Monica City Clerk's Office or
at any of the Santa Monica Public Libraries)
Prepared by: Mike Dennis, Director of Finance