55A - RESO FOR FY 2020-21 - Laserfiche WebLink

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REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JUNE 16, 2020 TITLE ADOPT A RESOLUTION ESTABLISHING THE APPROPRIATION LIMIT OF THE CITY OF SANTA ANA FOR FY 2020-21, AS REQUIRED BY STATE LAW /s/ Kristine CITY MANAGER CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1"Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER RECOMMENDED ACTION Adopt a resolution establishing the appropriation limit for Fiscal Year 2020-21, as required by State law. DISCUSSION The State of California Constitution includes various provisions, which impose a limit ("the GANN Limit") on tax proceeds that may be appropriated for expenditures by a local government in any given fiscal year and requires the cities establish this limit by resolution. Adoption of the subject resolution is necessary for compliance with these provisions for the fiscal year ending June 30, 2021. Furthermore, Section 13-90 of the Santa Ana Municipal Code requires the creation of excess Proceeds of Taxes Reserve Fund (Reserve Fund); for the purpose of providing separate accounting of Proceeds of Taxes (Proceeds) received in a fiscal year prior to the period in which they are expended. The City appropriates Proceeds in the same fiscal year during the period anticipated to be received, and therefore creation of the Reserve Fund is not necessary for the Fiscal Year 2020-21. In Fiscal Year 2018-19, the Proceeds of Taxes were $201,108,983 and the actual General Fund expenditures were $261,267,259. As detailed in the exhibits to the subject resolution, the City's spending limitation from "Proceeds of Taxes" is calculated to be $1,174,757,149 (Exhibit 1) for Fiscal Year 2020-21. This represents the permitted growth rate factor of 1.0373 times the Fiscal Year 2019-20 appropriations limit of $1,132,077,815. The funds constrained by the appropriations limit include the General Fund, the Capital Outlay Fund, and Special Revenue Funds. Additionally, Exhibit 1 identifies the factors used to determine the allowable increase from the prior year; Exhibit 2 categorizes FY 2020-21 anticipated revenues from "Proceeds of Taxes" and "Non - Proceeds of Taxes"; and Exhibit 3 computes the Fiscal Year 2020-2021 appropriations subject to this limitation and also identifies the difference between the limit and the budgeted appropriation. As demonstrated in Exhibit 3, the City's anticipated Fiscal Year 2020-21 appropriation subject to limitation is $233,976,657, which is $940,780,492 below the Gann Limit (allowable limit). 55A-1