SR-201-004F:\FINANCE\BUDGET\OBBUDREV\0001 \FINALCHA\SRGANN.W PD
Council Meeting: June 20, 2000 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Recommendation to Approve Resolutions Establishing the City's Gann
Appropriations Limit for FY 2000-01 and Appropriating FY 1999-00
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 2000-01 at $240,902,380 and appropriating available
FY 1999-00 funds to Gann'ed reserve and/or designated balance sheet accounts.
Gann A~propriations Limit for FY 2000-01
On June 20, 2000, the City Council will be considering the proposed City FY 2000-01
budget for adoption. In order to meet legal requirements, the City Council must also
formally adopt the City's Gann Appropriations Limit for FY 2000-01.
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
$240,902,380 for FY 2000-01 has been computed and made available to the public
fifteen days prior to this meeting. The FY 2000-01 limit has been computed based on
the following allowable increase factors applied to the FY 1999-00 Gann Limit: the
annual percentage change in the State Per Capita Personal Income times the annual
percentage population change for the City. Both factors were provided by the State
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Department of Finance. Staff recommends that Council approve the FY 2000-01 limit
based on these factors. The calculation of the City's FY 2000-01 limit using these
factors is detailed at Attachment A. An appropriate resolution to establish the City's
FY 2000-01 Gann Appropriations Limit at $240,902,380 is at Attachment B.
The Gann Appropriations Limit presented in the Proposed FY 2000-01 City Budget at
page #iii-9, reflected an estimated California Per Capita Personal Income Change
factor as this factor was not available from the State when the Proposed Budget was
published. Subsequently, the State Department of Finance provided the actual factor
which has been used to calculate the City's FY 2000-01 Gann Appropriations Limit as
set forth in this staff report.
Comparison of the FY 2000-01 Gann Limit to the Proposed FY 2000-01 A~propriations
and Tax Proceeds Subject to Limitation
A comparison of the City's FY 2000-01 Gann Appropriations Limit and FY 2000-01
appropriations and tax proceeds subject to limitation as set forth in the City's Proposed
FY 2000-01 Budget is as follows:
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Proposed Gann-related Spendinq for FY 2000-01
Gann Limit
Total
$240,902,380
Appropriations Subject to Limitation 95,563,783
Net Under/(Over) 145.338.597
The above table indicates that FY 2000-01 appropriations subject to limitation are less
than the City's Gann Appropriations Limit. In terms of receipt of tax proceeds, the City
is $127,506,087 under its Gann Limit.
Appropriation of Available FY 1999-00 Funds to Gann'ed Reserve and/or Desiqnated
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 1999-00, an appropriate resolution to accomplish this transaction is at
Attachment C.
By taking this action, the City Council, in effect, subjects to the FY 1999-00 Gann
Appropriations Limit the funds so appropriated to Gann'ed reserve and/or designated
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balance sheet accounts. Thus, the "Gann'ed" monies become available to finance
carryover capital projects or for appropriation during FY 2000-01 and/or subsequent
fiscal years free of FY 2000-01 and/or subsequent fiscal years' Gann limitations.
As the following table indicates, Council adoption of the resolution at Attachment C
means that up to $137,396,667 of "un-Gann'ed" funds which may be available at the
end of the current fiscal year can be "Gann'ed". In terms of receipt of tax proceeds,
the City is $122,838,593 under its Gann Limit.
Estimated Actual Gann-related Spendinq for FY
1999-00
T„t~ i
Gann Limit* $223,112,769
Estimated Actual Spending Subject to Limitation 85,716,102
Net Under/(Over) $137,396,667
* As adopted by the City Council on June 22, 1999
When the City's FY 1999-00 Comprehensive Annual Financial Report is submitted to
the Council this Fall, the Finance Director will report to the Council actual total
FY 1999-00 spending and the actual amount which the Council has appropriated to
"Gann'ed" reserve and/or designated balance sheet accounts.
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Budqet/Financial Impact
Adoption of the attached resolution establishing the City's FY 2000-01 Gann
Appropriations Limit does not have a budget/financial impact. Adoption of the
attached resolution appropriating available FY 1999-00 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 2000-01 at $240,902,380 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 City, and which appropriate up to
$137,396,667 of available FY 1999-00 funds to Gann'ed reserve and/or designated
balance sheet accounts be approved.
Prepared by: Mike Dennis, Director of Finance
Attachments: A. City of Santa Monica Calculation of FY 2000-01 Gann Appropriations
Limit
B. Resolution of the City Council of the City of Santa Monica
Establishing the Gann Appropriations Limit for the Fiscal Year
2000-01
C. Resolution of the City Council of the City of Santa Monica
Appropriating FY 1999-00 Funds to Gann'ed Reserve and/or
Designated Balance Sheet Accounts
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ATTACHMENT A
CITY OF SANTA MONICA CALCULATION
OF FY 2000-01
GANN APPROPRIATIONS LIMIT
(Revised 5/18/00)
FY 1999-00 GANN APPROPRIATIONS
LIMIT a $
223,112,769
ADJUSTMENT FACTORS
Allo
wabl 1.0491 times
e FY 1.0292 =
2000
-01
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FY 2000-01 TOTAL ~
GANN 240,902,380
APPROPRIATIONS
LIMIT
(a) As adopted by the City Council on June
22, 1999 (Resolution #9416)
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(b) Per the State Department of Finance,
May 18, 2000.
(c) Per State Department of Finance, May
1, 2000.
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