SR-201-004 (10)
F:\FINANCE\BUDGET\OBBUDREV\0102\FINALCHA\SRGANN.DOC
Council Meeting: June 19, 2001 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 2001-02 and Appropriating FY 2000-01Funds
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 2001-02 at $333,300,049 and appropriating available FY 2000-
01 funds to Gann'ed reserve and/or designated balance sheet accounts.
Gann Appropriations Limit for FY 2001-02
On June 19, 2001, the City Council will be considering the proposed City FY 2001-02
budget for adoption. In order to meet legal requirements, the City Council must also
formally adopt the City's Gann Appropriations Limit for FY 2001-02.
Based upon Article XIIIB Appropriations Limit Uniform Guidelines published by the League
of California Cities, the City's Gann Appropriations Limit of $333,300,049 for FY 2001-02
has been computed and made available to the public fifteen days prior to this meeting.
The FY 2001-02 limit has been computed based on the following allowable increase
factors applied to the revised FY 2000-01 Gann Limit: the annual percentage change in
the City’s non-residential assessed valuation times the annual percentage population
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change for the City. The assessed valuation change factor is based on data provided by
the Los Angeles County Assessor, and the City population change factor was provided by
the State Department of Finance. Staff recommends that Council approve the FY 2001-02
limit based on these factors. The calculation of the City's FY 2001-02 limit using these
factors is detailed at Attachment A. An appropriate resolution to establish the City's
FY 2001-02 Gann Appropriations Limit at $333,300,049 is at Attachment B.
Comparison of the FY 2001-02 Gann Limit to the Proposed FY 2001-02 Appropriations
and Tax Proceeds Subject to Limitation
A comparison of the City's FY 2001-02 Gann Appropriations Limit and FY 2001-02
appropriations and tax proceeds subject to limitation as set forth in the City's Proposed FY
2001-02 Budget is as follows:
Proposed Gann-related Spending for FY 2001-02
Total
Gann Limit $333,300,049
Appropriations Subject to Limitation 108,468,355
Net Under/(Over) $224,831,694
The above indicates that FY 2001-02 appropriations subject to limitation are less than
the Citys Gann Appropriations Limit. In terms of receipt of tax proceeds, the City is
=
$218,876,622 under its FY 2000-01 Gann Limit.
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Appropriation of Available FY 2000-01 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 2000-01, an
appropriate resolution to accomplish this transaction is at Attachment C.
By taking this action, the City Council, in effect, subjects to the FY 2000-01 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 2001-02 and/or subsequent fiscal
years free of FY 2001-02 and/or subsequent fiscal years' Gann limitations.
As the following table indicates, Council adoption of the resolution at Attachment C means
that up to $136,963,216 of un-Ganned funds which may be available at the end of the
A=@
current fiscal year can be "Gann'ed". In terms of receipt of tax proceeds, the City is
$173,427,943 under its FY 2000-01Gann Limit.
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Estimated Actual Gann-related Spending for FY 2000-01
Total
Gann Limit* $282,579,801
145,616,585
Estimated Actual Spending Subject to Limitation
Net Under/(Over) $136,963,216
* As adopted by the City Council on February 27, 2001 (Resolution #9625)
When the City's FY 2000-01 Comprehensive Annual Financial Report is submitted to the
Council this Fall, the Finance Director will report to the Council actual total FY 2000-01
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 2001-02 Gann
Appropriations Limit does not have a budget/financial impact. Adoption of the attached
resolution appropriating available FY 2000-01 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 2001-02 at $333,300,049 based on the allowable increase
factors of the annual percentage change in the City’s non-residential assessed valuation
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and the annual percentage population change of the City, and which appropriate up to
$136,963,216 of available FY 2000-01 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 2001-02 Gann Appropriations
Limit
B. Resolution of the City Council of the City of Santa Monica Establishing
the Gann Appropriations Limit for the Fiscal Year 2001-02
C. Resolution of the City Council of the City of Santa Monica Appropriating
FY 2000-01 Funds to Ganned Reserve and/or Designated Balance
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Sheet Accounts
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CITY OF SANTA MONICA CALCULATION OF FY 2001-02
GANN APPROPRIATIONS LIMIT
(a)
FY 2000-01 REVISED GANN APPROPRIATIONS LIMIT$282,579,801
ADJUSTMENT FACTORS
Allowable FY 2001-02 Adjustment:
Non-Resident Assessed Valuation
(b)
Change 1.1575 times
(c)
City Population Change 1.0190= X 1.17949
FY 2001-02 GANN APPROPRIATIONS LIMIT$333,300,049
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(a)As adopted by the City Council on February 27, 2001 (Resolution
#9625)
(b)Based on assessed valuation data provided by the Los Angeles
County Assessor for FY 2000-01
(c)Per State Department of Finance, May 1, 2001
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