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~;tYO, City Council Report
Santa bionics
City Council Meeting: June 28, 2011
Agenda Item:
To: Mayor and City Council
From: Carol Swindell, Director of Finance
Subject: Recommendation to Approve Resolution Establishing the City's GANN
Appropriations Limit for FY 2011-12
Recommended Action
Staff recommends that the City Council approve the attached resolution establishing the
City's GANN Appropriations Limit for FY 2011-12 at $990,025,488.
Executive Summary
On June 21, 2011, the City Council considered the proposed City FY 2011-13 budget
for adoption. In order to meet legal requirements, the City Council must also formally
adopt the City's GANN Appropriations Limit for FY 2011-12 at $990,025,488.
Discussion
State law places limits on the amount of Santa Monica's General Fund appropriations
that can be made without voter approval based on a growth factor calculated on
changes in Santa Monica population and either State per capita personal income
growth or the growth in non-residential assessed valuation. This restriction was placed
in effect in November 1979 with the approval of Proposition 4, commonly known as the
GANN Initiative.
Per the guidelines of Article XIII B of the State Constitution, the City's GANN
Appropriations Limit of $990,025,488 for FY 2011-12 has been calculated and made
available to the public fifteen days prior to this meeting. The FY 2011-12' limit
calculation is based on the following allowable increase factors applied to the FY 2010-
11 GANN Limit: the annual change in State per capita personal income times the
1
annual percentage population change for the City. The per capita income and City
population change factors are provided by the State Department of Finance. Staff
recommends that Council approve the FY 2011-12 limit based on these factors. The
calculation of the City's FY 2011-12 limit using these factors is detailed at Attachment B.
Attachment A is a resolution to establish the City's FY 2011-12 GANN Appropriations
Limit at $990,025,488.
A comparison of the City's FY2011-12 GANN Appropriations Limit and FY2011-12
appropriations and tax proceeds subject to limitation as set forth in the City's Proposed
FY 2011-12 Budget is as follows:
Proposed GANN-related Spending for FY2011-12
Total
GANN Limit $ 990,025,488
Appropriations subject to Limitation 165,967,108
Net Under/ (Over) $ 824,058,380
Proposed GANN-related Tax Proceeds Spending for FY2011-12
Total
GANN Limit $ 990,025;488
Revenues subject to Limitation 174,980,631
Net Under / (Over) $ 815,044,857
FY2 011-12 appropriations subject to limitation are $824,058,380 less than the City's
GANN Appropriations Limit. In terms of receipt of tax proceeds, the City is
$815,044,857 under the GANN Limit.
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Financial Impacts & Budget Actions
Adoption of the attached resolution establishing the City's FY 2011-12 GANN
Appropriations Limit has no financial impact since City appropriations are well below its
GANN limit.
Prepared by: David, Carr, Budget Administrator
Approved:
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Carol Swindell
Director of Finance
Forwarded to Council:
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Rod Gould
City Manager
Attachments:
A. Resolution of the City Council of the City of Santa Monica Establishing the GANN
Appropriations Limit for the Fiscal Year 2011-12
B. Calculation of City's Fiscal Year 2011-12 GANN Limit
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ATTACHMENT B
~A9~~3~ A~prc~pdj~~ic~ns L iir~i~
The GANN Limit was approved on November 6, 1979, by California voters. Under the GANN
Limit, a maximum amount is established for tax-funded government services. That amount
is to be adjusted each year depending on changes in state population, inflation and the
transfer of financial responsibility for various government activities from one level of
government to another. Any significant amount of state tax revenue received above that
GANN Limit is to lead to future tax rebates or tax cuts.
FY2010-11 GANN Appropriations Limit (a)
$ 959,451,919
Adjustment Factors
AUowabte FY2011-12 Adjustment:
Change in California Personal Income (b) 1.0251
City Population Change (b) 1.0066 = X
FY201 i-12 GANN Appropriations Limit
1.0319
$ 990,025,488
(a) As adopted by the City Council on June 15, 2010 (Resolution No. 10494)
(b) Per State Department of Finance, May 2011
Reference Resolution No.
10590 (CCS)