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Finance and Management Services <br />www.santa-ana.org/finance <br />Item # 26 <br />City of Santa Ana <br />20 Civic Center Plaza, Santa Ana, CA 92701 <br /> Staff Report <br />June 20, 2023 <br />TOPIC: Appropriations Limit for Fiscal Year 2023-24 <br />AGENDA TITLE <br />Adopt a Resolution Establishing the Appropriations Limit of the City of Santa Ana for <br />Fiscal Year (FY) 2023-24 <br />RECOMMENDED ACTION <br />Adopt a resolution establishing the appropriations limit of the City of Santa Ana for FY <br />2023-24, as required by state law. <br />DISCUSSION <br />The State of California Constitution imposes a limit (“the GANN Limit”) on tax proceeds <br />to be appropriated for expenditures by a local government in any given fiscal year and <br />requires the cities establish this limit by resolution. Adoption of the subject resolution is <br />necessary for compliance with the California constitution for the fiscal year ending June <br />30, 2024. <br />Furthermore, Section 13-90 of the Santa Ana Municipal Code requires the creation of a <br />Reserve Fund for Excess Proceeds of Taxes (Reserve Fund), as a separate accounting <br />of taxes received in a fiscal year prior to the period of expenditure. The City <br />appropriates the expenditure of tax revenue in the same fiscal year of receipt, and <br />therefore creation of the Reserve Fund is not necessary for the fiscal year 2023-24. In <br />fiscal year 2021-22, the Proceeds of Taxes were $318,009,638 and the actual General <br />Fund expenditures were $358,303,787. <br />Using the formula provided by the state, staff calculated the spending limitation from <br />“Proceeds of Taxes” as $1,373,855,642 (Exhibit 1) for fiscal year 2023-24, which is the <br />FY22-23 limit increased by 3.96%. The funds constrained by the appropriations limit <br />include the General Fund, the Capital Outlay Fund, and Special Revenue Funds. <br />Exhibit 1 identifies the factors used to determine the allowable inflationary increase from <br />the prior year. Exhibit 2 categorizes FY 2023-24 anticipated revenues from “Proceeds of <br />Taxes” and “Non-Proceeds of Taxes”. Exhibit 3 computes the FY 2023-24 <br />appropriations subject to this limitation, and identifies the difference between the limit <br />and the budgeted appropriation. As demonstrated in Exhibit 3, the City’s anticipated