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Home My WebLink AboutStaff Report 3.E 6/3/2013 Ag-en w a/Itt✓wv#3 .E a cALU,4, .CYp1 . ' v \.;\ 1856 DATE: June 3, • TO: Honorable:Mayor>and`Metnbers of the City Council through City Manager FROM: WilliamMushallo ;Finance-Director SUBJECT: Resolution Settinithe Gann.Appropriations Liinitt for`FY 2013-2014 RECOMMENDATION. It-is recommended that the City Council,adopt the attached'Resolution adopting the Appropriations Limit--,for Fiscal Year 2013-20 14 and making-the annual election for adjustment factors. BACKGROUND ' In November 1979, California voters added Article.XIII-B to the California.State Constitution, which placed limitations on the Appropriations of State and Local Governments. The Article defined the process to calculate the appropriations limit and required Cities to adopt resolutions establishing the annual appropriations limits. Article XIII-B was amended in June 1990, by ' Proposition 111. The amendment created the new base year of.FY 1986-1987, and allowed annual increases based on factors comprised of the change in population combined with either the change in California'per=,capit'a.personal income or with the change in the local assessment roll due to local non-residential construction. ?Selection of one or the other of these two latter factors is,at the City's election,- It also provided for the exclusion of capital expenditures over $100,000 and requited independeriCauditor review of the-calculations. The City of.Petaluma has complied with all applicable lawsland.regulatiims regarding the Appropriation Limit requirements including Puditorreviews. ' DISCUSSION The City of Petaluma's Appropriations:Liniit has increased significantly since,1987 by applying the allowable factors as outlined above: Under the provisions of California'State law, the City is required to establish an Annual,Appropriations Limit commonly referred toras the "Gann Limit." As is also':required, detailed worksheets arc piovided showing,the appropriations limit calculations. These worksheets are available for public'-review and inspection at the City Clerk's ' office The limit amount maybe adjusted by the City each year by applying the annual adjustment factors of`Per Capita Income"and "Population" changesas provided by the Agenda-Review•n ® City Attorney Finance Di' -tor/.' ) City Manager 1 California Stale Department-of Finance(Attachment•,#3). The Limit for;Fiscal Year 2013=2014 has,been calculated,by using the change in per-capita.personal•income and population growth as the factors to:adjust the^appropriations limit. 'The change ineper-capita income was 5.12% combined with-the change:in population, .96:%, resulting in a factor calculated to be,a 6.1% increase. This increase adjusted the appropriations limit upward from $119,504,706 in FY 2012- 2013 to $126,829,331 for Fiscal'Year 2013-2014,:an.increase of$7,324,625. The Fiscal Year 2013-2014 Appropriations that"are'subject to,"the limit are calculated to be $27,168,530. Only the proceeds oftaxes are subject to the limit. Other revenues earned-by the General and certain Special Revenue Funds are excluded from the limit-as non-proceeds of taxes. FINANCIAL:IMPACTS The Appropriations Limit has never been a.factor in considering the,City's annual.budget. Currently, the City is spending $ 99;660,801 less,than the appropriations limit of$126,829,331. The total FY 2013-2014 appropriations subject to the limit;are^$27;168,530 (Proceeds of Taxes). Examples of proceeds of taxes are Property Taxes, Saks Taxes, TOT Taxes, Business License Taxes, Motor Vehicle In Lieu of Taxes, Gas,Taxes, etc. These taxes are accounted for in the General and various'.Sp"eciaPRevenue funds.. ATTACHMENTS 1. Resolution:Adopting Gann Appropriations,Limit andMaking.Annual Elections 2. Appropriations.Limit Calculations Worksheets' 3. California State Department of Finance PricejPer Capita Income) and Population Computations and Information 2 ATTACHMENT 1 RESOLUTION AD OPTING THEAPfROPRIATIONS LIMIT FOR FISCAL YEAR 2013-2014 AND MAKING THE.ANNUAL ELECTIONFOR.ADJUSTIv1ENT FACTORS WHEREAS, the people of California onNovember 6, 1979; added Article XIII-B to the California State Constitution,placing various limitations on the Appropriations of State and Local Governments; and WHEREAS, the California State Legislature adopted Chapters 1205 and 1342 of the 1980 Statutes which implemented Article,XIII-B;.and WHEREAS, the people of California on June 5, 1990 amended Article XIII-B effective on July I, 1990; and WHEREAS, the provisions of'the amendments have been interpreted by a coalition of statewide organizations, and the organizations'have issued through`the League of California Cities revised guideline to calculate the Appropriations Liniit; and WHEREAS,section 7910 of the Government Code requires,cities to adopt a resolution setting the annual appropriations limit at a-regularly:'scheduled-meeting or a noticed special meeting; and WHEREAS, the City of Petaluma has complied with1beprevisions of.Article XIII-B in calculation the appropriations limit for Fiscal Year 2013-2014; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Petaluma that 1. The Fiscal Year;2013-2014 Appropriations Limit shall be $126,829,331. 2. The Fiscal Year 2013-2014 Appropriations subject to the Limit is $27,168,530. 3. The annual election for Adjustment Factors shall be toouse the=growth in City Population and the increasein the Per-Capita Personal Income for the State of California, as provided by the California State Department of Finance. 3 Attachment`#2 CITY OF PETALUMA;CA APPROPRIATIONS'LIMITS CALCULATION FY2013-2014 ADOPTED BUDGET' APPROPRIATIONS LIMIT Amount Source A. Last Year's Limit-June.30,2013 $ 119,504,706 Adopted Budget B. Adjustment Factors 1 Growth in City of,Petaluma population 1.0096 State Finance 2 Growth in California Per Capita Income 1.0512 State Finance Total Adjustment% 1.0613 (B1 •B2) C.Annual Adjustment$ 7,324 625 (B`A) D.Other Adjustments Lost Responsibility(-) - Transfento Private(-)' - Transfer to,Fees(-); AssumedResponsibility(+) - SubTotal . - E Total Adjustments T324.625 (C+D) F.This Year's Limit-June 30,'2014 S' 126:829:331. (A+E) 4 CITY OF PETALUMA,.CA AP.PROPRIATIONS+LIMIT ANALYSIS. FISCALYEAR'2013-2014 APPROPRIATIONS LIMIT ANALYSIS. Last Year's.Appropriations Limit $ 119,504,706 Adjustment Factors Change in Per Capita Personal Income 1.0512 City Population Increase January 2012to January 2013 1.0096 Total.Adjustment'.Factor 1.0613 This Years Appropriations.Limit :$ 126,829,331 Proceeds of Taxes 27,168,530 Exclusion This Year's Appropriations Subject to Limit 27,168 530 This Year's-Appropriations Under Limit' $ 99,660,801 5 CITY OF PETALUMA,CA APPROPRIATIONS LIMIT ANALYSIS FISCAL YEAR 2013.2014 Revenue Summary Proceds Non-Proceeds of of Taxes Taxes Exemptions Total TAXES ,21,684,282 0 0 21,684,282 STATE 5,413,677 804,000 0 6,217,677 OTHER GOVERNMENTS 0 2,134,276 0 2,134,276 LOCALLY RAISED 0 11,694,453 0 11,694,453 USER FEES 0 4,872,017 0 4,872,017 OTHER MISCELLANEOUS AND,INTERFDND TRANSFERS 0 196,356 2,726,689 2,923,045 INTEREST INCOME 70,571 51,307 0 121,878 Total ',.27;168;530 19,752,409 2;726,689 49,647,628 6 I ,NT:O> A.0 j.. "'t Attachment #3 v A v w IIII n x DEOARTMENT`OF FI NANC E EDMUND G BROWN JA: • GOVERNOR A=w To.CA•93a,<499S• w. ornmE OF i May2013 Dear Fiscal Officer Subject: Price and Populationinformation Appropriations Limit The California Revenue andaTaxationCode'rsection 2227,.;mandates'the Department of Finance to transmit an'estimate of the percentage change in population to local,governments Each local jurisdiction must use their percentage chan ge in population factor for Ja`nuary'1 2013,in conjunction with a change in the cost of living or price factor to calculate their appropriations limit for fiscal year 2013-14. Attachment provides the change in California S per,capita personal income and an eXamble for utilizing,the price factor and population percentage,change factor to,calculate the 2013:14 appropriations limit! iAttechment B.provides city:and--unincorporated.county,population:percentage change Attachment C provides population percentage change for,counties and their summed incorporated areas. The population percentage change data excludes federal:and state Institutionalized populations and,military:populations. . Population Percent Change for Special.Districts Some special districts`must establish•an'annual appropriations limit Consult th Revenue and.Taxation Code section 2228 for further information regarding the appropriations Article•XIII B,:section 9(C),of the State exempts certain special districts from the eppropnallons Ilmlfcalculationmandate.. The Code anddhe CalrforniaConstitutioncan be accessed at the following we websRei h ttp://leq info.leq islatu re ca.q ov/faces/codes.xhtm I. Special districts,required;by law to calculate their„appropriations limit must present'.the calculation as part of their annual audit Any questions special districtshave on this issue should.be.referred to,their respective county for;clarification,,or-to their legal representation,or to the law.itself. No state agency reviews the local appropriations limits. Population Certification The population certification program applies only to cities and counties., Revenue and Taxation Code • section 11008.6mandatesFinance to automatically certify any population estimate'that exceeds the current certified:population with thei.State Controllers Office. Finance will certify the higher estimate to the State,Controller by June 1,2013. Please Note: Prior year's citypopulation estimates may be.revised. If you have any questionsregarding this data,please contactithe.Demographic'Research Unit at (916)323-4086: :ANA J.MATOSANTOS . , ; .... . Director By: ... MICHAELDOHEN' Chief.deputy.Diredtb Attachment �. ■ May 2013 Attachmenta A. Price Factor Article XIII B specifies that local jurisdictions select their cost of living factor to compute their appropriation limn by a vote of their governing body. The cost of living factor provided here is per capita personal income If the.percentage change'in!per capita personal income is selected,theJpercentagechange:to be used in setting the fiscal year,2013-14 appropriation.limit is:' - Per Capita-Personal Income. Fiscal Year Percentage•:change; (FY) over prior year 2013-14 :5.12 B. Following is an'example;usmg;sample,populatwn change and the change in California per,capita;personal income is growth factors in;computing'a 2013-14 appropriation limit:; 2013-14: Per Capita:Cost:of Living Change_=5'12.percent Population Change!=0.79 percent Per Capita"Cost of,Living converted to.a.ratio: 5.12'+100'. = 1.0512 100 Population'+converted to alratior 079+ 100 = 1.0079 100 Calculation of factor for FY;2013-14: 1.0512 x 1.0079=1.0595' 8 Fiscal Year-2013-14 1 Attachment B . Annual Percent Change In Population Minus Exclusions' January 1 2012 to January 1,2013.and Total Population,January 1,2013 • Total County Percent Change -- Population Minus Exclusions ,— Population City ,2012-2013. '1.1.12 1'-1-13 111-2013 Sonoma Cloverdale 0.32'. 8,641 8,669 8,669 Cdali 0.33 7,286 7,310' 7,310 Healdsburg. 0.45 11;458 11,509 11,509 Petaluma 0.96. 58,245 58,804- 58.804 Rohner)Park 0.32 40,902 41,034 41,034 Santa Rosa 0.61 169,070 170,093 170,093 Sebastopol 0.40 7,415 7;445 7;445 Sonoma 0:48 10.680 10731 10,731 Windsor 0.34' 27,041- 27,132 27,132 Unincorporated 0.55 145,560 146,364- 147,696 County.Total 0.57 486.298 489,091 490,423 'Exclusions include residents cn,federal military installations and group quarters residents in state mental institutions,stale and federal correctional institutions and veteran homes. 9