55A - RESO - ESTABLISH APPROPRIATION LIMITS

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REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 18, 2011 TITLE: RESOLUTION ESTABLISHING THE APPROPRIATION LIMIT OF THE CITY OF SANTA ANA FOR FY 2011-12 CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1" Reading ? Ordinance on 2nd Reading ? Implementing Resolution ? Set Public Hearing For CONTINUED TO FILE NUMBER Adopt a resolution establishing the appropriation limit for the fiscal year 2011-12. 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, 2012. As detailed in the exhibits to the subject resolution, the City's spending limitations from "Proceeds of Taxes" is calculated to be $799,646,976 (Exhibit A) for FY 2011-12. This represents the permitted growth rate factor of 23.7704 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 2011-12 anticipated revenues from "Proceeds of Taxes" and "Non- Proceeds of Taxes"; and Exhibit D computes the fiscal year 2011-2012 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 2011-12 "Proceeds of Taxes" revenue will be $676,289,202 below the allowable limit. FISCAL IMPACT There is no fiscal impact associated with this action. Francisco Gutierrez Executive Director Finance and Management Services Agency 55A-1