SR-201-004 (11)
F:\FINANCE\BUDGET\OBBUDREV\0307\FINALCHA\SRGANN.DOC
Council Meeting: June 17, 2003 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 2003-04 and Appropriating FY 2002-03 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 2003-04 at $425,376,656 and appropriating available FY 2002-
03 funds to Gann'ed reserve and/or designated balance sheet accounts.
Gann Appropriations Limit for FY 2003-04
On June 17, 2003, the City Council will be considering the proposed City FY 2003-04
budget for adoption. In order to meet legal requirements, the City Council must also
formally adopt the City’s Gann Appropriations Limit for FY 2003-04.
Based upon Article XIIIB Appropriations Limit Uniform Guidelines published by the League
of California Cities, the City's Gann Appropriations Limit of $425,376,656 for FY 2003-04
has been computed and made available to the public fifteen days prior to this meeting.
The FY 2003-04 limit has been computed based on the following allowable increase
factors applied to the FY 2002-03 Gann Limit: the annual percentage change in the City’s
non-residential assessed valuation times the annual percentage population change for the
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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 2003-04 limit
based on these factors. The calculation of the City's FY 2003-04 limit using these factors
is detailed at Attachment A. An appropriate resolution to establish the City's FY 2003-04
Gann Appropriations Limit at $425,376,656 is at Attachment B.
Comparison of the FY 2003-04 Gann Limit to the Proposed FY 2003-04 Appropriations
and Tax Proceeds Subject to Limitation
A comparison of the City's FY 2003-04 Gann Appropriations Limit and FY 2003-04
appropriations and tax proceeds subject to limitation as set forth in the City's Proposed FY
2003-04 Budget is as follows:
Proposed Gann-related Spending for FY 2003-04
Total
Gann Limit $425,376,656
Appropriations Subject to Limitation 109,326,745
Net Under/(Over) $316,049,911
The above indicates that FY 2003-04 appropriations subject to limitation are less than
the City’s Gann Appropriations Limit. In terms of receipt of tax proceeds, the City is
$312,550,086 under the Gann Limit.
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Appropriation of Available FY 2002-03 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 2002-03, an
appropriate resolution to accomplish this transaction is at Attachment C.
By taking this action, the City Council, in effect, subjects to the FY 2002-03 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 2003-04 and/or subsequent fiscal
years free of FY 2003-04 and/or subsequent fiscal years' Gann limitations.
As the following table indicates, Council adoption of the resolution at Attachment C means
that up to $250,594,930 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 2002-03
Total
Gann Limit* $363,163,173
Estimated Actual Spending Subject to Limitation 112,568,243
$250,594,930
Net Under/(Over)
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*As adopted by the City Council on June 18, 2002 (Resolution #9775)
The above indicates that FY2002-03 estimated actual spending subject to limitation is less
that the FY2002-03 Gann appropriation. In terms of receipt of tax proceeds, the City is
$257,695,173 under its FY 2002-03 Gann Limit.
When the City's FY 2002-03 Comprehensive Annual Financial Report is submitted to the
Council this Fall, the Finance Director will report to the Council actual total FY 2002-03
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 2003-04 Gann
Appropriations Limit does not have a budget/financial impact. Adoption of the attached
resolution appropriating available FY 2002-02 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 2003-04 at $425,376,656 based on the allowable increase
factors of the annual percentage change in the City’s non-residential assessed valuation
and the annual percentage population change of the City, and which appropriate up to
$250,594,930 of available FY 2002-03 funds to Gann'ed reserve and/or designated
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balance sheet accounts be approved.
Prepared by: Mike Dennis, Director of Finance
Janet L. Shelton, Budget Manager
Attachments: A. City of Santa Monica Calculation of FY 2003-04 Gann Appropriations
Limit
B. Resolution of the City Council of the City of Santa Monica Establishing
the Gann Appropriations Limit for the Fiscal Year 2003-04 (SEE
RESOLUTION NO. 9864 (CCS)
C. Resolution of the City Council of the City of Santa Monica Appropriating
FY 2002-03 Funds to Gann’ed Reserve and/or Designated Balance
Sheet Accounts
– (SEE RESOLUTION NO. 9865 (CCS)
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Attachment A
City of Santa Monica Calculation of FY 2003-04 Gann Appropriations Limit
CITY OF SANTA MONICA
GANN APPROPRIATIONS LIMIT
CALCULATION OF FY 2003-04 LIMIT
(a)
FY 2002-03 GANN APPROPRIATIONS LIMIT$363,163,173
ADJUSTMENT FACTORS
Allowable FY 2003-04 Adjustment:
Non-Residential Assessed Valuation
(b)
Change 1.1523 times
(c)
City Population Change 1.0165 = X 1.17131
FY 2003-04 GANN APPROPRIATIONS LIMIT $425,376,656
(a) As adopted by the City Council on June 18, 2002 (Resolution #9774)
(b) Based on assessed valuation data provided by the Los Angeles County Assessor for FY
2002-03
(c) Per State Department of Finance, May 1, 2003
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