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REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JUNE 5, 2006 TITLE: RESOLUTION ESTABLISHING THE APPROPRIATION LIMIT OF THE CLERK OF COUNCIL USE ONLY: /~ ~~~ ~' ~dticauon !sr APPROVED ^ As Recommended ^ As Amended ^ Ordinance on 15~ Reading ^ Ordinance on 2~d Reading ^ Implementing Resolution ^ Set Public Hearing For CITY OF SANTA ANA FOR FY 2006-07 l - ~ ~~ CITY MANAGER CONTINUED TO FILE NUMBER RECOMMENDED ACTION Adopt a resolution establishing the appropriation limit for the fiscal year 2006-07 DISCUSSION The State of California Constitution includes 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, 2007. As detailed in the exhibits to the subject resolution, the City's spending limitations from "Proceeds of Taxes" is calculated to be $697,830,787 (Exhibit A) for FY 2006-07. This represents the permitted growth rate factor of 20.7438 times the adjusted base year (1978-1978) appropriation limit of $33,640,451. Exhibit B identifies the factors used to determine the allowable increase; Exhibit C categorizes FY 2006-07 anticipated revenues from "Proceeds of Taxes" and "Non-Proceeds of Taxes"; and Exhibit D computes the fiscal year 2006-2007 appropriations subject to this limitation and identifies the difference between the limit and the budgeted appropriation. As demonstrated in Exhibit D the City's anticipated FY 2006-07 "Proceeds of Taxes" revenue will be $631,189,406 below the allowable limit. FISCAL IMPACT There is no fiscal impact associated with this action. rancisco Gutierrez Executive Director Finance & Management Services Agency 55B-1