SR-200-001
CA RLK:SSS:msh
~~uncil Meetlng 05-22-~
Santa Menlca, CalifoTnla
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TO:
Mayor and Clty Councll
FROM:
Clty Attorney
MAY 2 2 1979
SUBJECT:
CONSOLIDATION OF CITY ACCOUNTI~G FUNDS
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Introductlon
ThlS report concerns a request by the City Flnance Department
to amend Santa Monlca Munlclpal Code Bectlon 6500.269 concernlng the
Capltal Improvement Fund. It also concerns the valldlty of Santa
Monlca Charter Bectlen 606 concernlng special leVles to meet the
llablllties of the Speclal Funds detalled ln that sectlon.
Background
Bect10n 1511 of the Santa Monica Charter mandates that the
Clty malntaln a Capltal Outlays Fund and states that the City Councll may
stabllsh the amounts to be deposlted. Once funds are deposlted
ln the Capltal Outlays Fund, they must remaln there to be used for such
?urposes only. The current procedure, establlshed 1n Bectlon 6500.269
automat1cally deposlts one-quarter of all sales and use tax revenues ln
the Capltal Outlays Fund, and three-quaters of the revenues lnto the
General Fund. There is a large surplus ln the Capital Outlays Fund and,
accordlng to the Charter, thlS money may not be removed. On the other
hand, the General Fund lS ln need of addltional revenues.
The Clty may, by ordlnance, regulate the dlstrlbutlon
0= funds and channel all lncomlng funds lnto the General Fund, leavlug
the Speclal Fund inVlo1ate.
Seetlon 606 of the Santa Monlca Charter glves the City power
to levy speclal taxes annually to meet certaln mllnlclpal obllgatlons,
such as the obllgatlons of the Clty to the State Employees Retlrement
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MA'( 2 2 ,g79
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System, C~ty P!ann1ng, Library, Welfare, Parks and Recreat10n) and MUS1C.
The passage of Propos1tlon 13 has made th1S section of the ~
Charter obsolete, as no new taxes may be leVled.
The mun1c1pal obl1gatlons detalled in thlS section of the
Charter are currently funded from the General Fund, pursuant to the
Budget Appropriat~ons procedures of Sectlon 1506 of the Charter.
Alternatlve Solutlons
The Clty Councll could enact an Amendment to Sectlon 6500.269
deta11ing a different proportlonate use of ~ncomlng sales and use tax
funds.
Recommendatlons
The eaSlest way to accompllsh the amendment of Santa Monlca
Munlcipal Code Sectlon 6500.269 would be to repeal the ordlnance. There
lS no need to replace lt with another ordlnance. All lncomlng funds
would automatlcally be placed In the General Fund to be used as the
Clty Caunell sees fit.
Although Sect10n 606 of the C1ty Charter 15 currently obsolete,
the only way ~t can be amended ~s by a vote of the people as a Charter
Amendment. The City Counell could resolve to use Sectlon 1506 of the
Charter to deal with the obllgat~ons prevlously covered by Section 606.
Prepared by: R1chard L. Knickerbocker, Clty Attorney
Stephen Shane Stark, Asslstant Clty Attorney