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HomeMy WebLinkAbout3B-GannAppropriationsLimitNovember 3, 2008 CITY OF PETALUMA, CALIFORNIA AGENDA BILL Agenda Title: Meeting Date: Resolution Adopting FY 2008-2009 Game Appropriations Limit November 3, 2008 Meeting Time: © 3:00 PM ❑ 7:00 PM Category: ❑ Presentation ® Consent Calendar ❑ Public Hearing ❑ Unfinished Business ❑ New Business Department: Director: Contact Person: Phone Number: Finance Tamera Haas Sue Simmons 778-4352 Cost of Proposal: Name of Fund: N/A Various Amount Budgeted: Account Number: N/A I Various Recommendation: It is recommended that the City Council take the following action: Adopt the resolution setting the Gaim Appropriations Limit and Malting the Election to use the Calculations Factors as provided by the California State Department of Finance. Summary Statement: Under the provision of California State Law the City is required to set an Annual Appropriations Limit, which is commonly referred to as the "Gann Limit." This Appropriations Limit is based on appropriations that are originating from "Proceeds of Taxes" as defined by law. This appropriations limit amount is adjusted each year by the application of annual adjustment factors, which include adjustments for population growth and per capita income changes. These adjustment factors are provided by the California State Department of Finance (Attachment #3). The City of Petaluma makes an annual election to choose the adjustment factors as provided by the State. The Appropriations Limit for Fiscal Year 2008-2009 has been calculated by using the increase in the per -capita income and population growth factors as provided. The Fiscal Year 2008-2009 Appropriations Limit is calculated to be $111,090,445. This limit increased by 5% or $5,822,428 from the Fiscal Year 2007- 2008 limit of $105,268,017. The Fiscal Year 2008-2009 Appropriations that are subject to the limit (Proceeds of Taxes) are calculated to be $31,791,406. Attachments to Agenda Packet Item: 1. Resolution Adopting Gann Appropriations Limit and Making Annual Elections 2. Appropriations Limit Calculations — Worksheets 3. California State Department of Finance Price (Per Capita Income) and Population Computations and Information Reviewed mm ves. Dir: I Reviewed by City Attorney: A r ved-bv- itv Manager: Date: I p- f?, 08 Date Date.: ReM Date Last Revised: File: CITY OF PETALUMA, CALIFORNIA NOVEMBER 3, 2008 AGENDA REPORT FOR Resolution Adopting FY 2008-2009 Gaim Appropriations Limit RECOMMENDATION: Adopt the resolution establishing the Appropriations Limit of $111,090,445 for Fiscal Year 2008-2009. BACKGROUND: In November 1979, the people of California 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 require Cities to adopt resolutions setting the annual appropriations limits. In June 1990, the people adopted Proposition I I I that amended Article XIII-B. 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 -capita personal income or the change in the local assessment roll due to local non-residential construction. It also provided for the exclusion of capital expenditures over $100,000 and required independent auditor review of the calculations. Guidelines were developed to define and implement the changes and to establish the annual review requirements. The City of Petaluma has complied with all applicable laws and regulations regarding the Appropriation Limit requirements including Auditor reviews. The City of Petaluma's Appropriations Limit has increased significantly since 1987 by applying the allowable factors as outlined above. In the current Fiscal Year, the City is using the change in per - capita personal income and population growth as the factors to adjust the appropriations limit, as provided by the California State Department of Finance. The change in per -capita income was 4.29% combined with the change in population, 1.19% --resulted in a factor calculated to be 5% increase. This increase adjusted the appropriations limit upward from $105,268,017 in FY 2007-2008 to $111,090,445 for Fiscal Year 2008-2009. As required by California State law, detailed worksheets have been provided showing the appropriations limit calculations. These worksbeets are included with this report and are available for public review and inspection at the City Clerk's office. 3. DISCUSSION: Under the provisions of California State law, the City is required to set an Annual Appropriations Limit commonly referred to as the "Gaim Limit". The limit amount may be adjusted each year by the application of annual adjustment factors of "Per Capita Income" and "Population" changes as provided by the California State Department of Finance. (See Attachment #3.) The City of Petaluma makes an annual election to choose the adjustment factors as provided by the California State Department of Finance. The Limit for Fiscal Year 2008-2009 has been calculated by using the increase in the per -capita income (statewide) and the City's population growth factors. The Fiscal Year 2008-2009 Appropriations Limit is calculated to be $111,090,445. This limit increased by 5% or $5,822,428 from the Fiscal Year 2007-2008 limit of $105,268,017. The Fiscal Year 2008- 2009 Appropriations that are subject to the limit (Proceeds of Taxes) are calculated to be $31,791,406. 4. FINANCIAL IMPACTS: The Appropriations Limit has never been a factor in considering the City's annual budget. Currently, the City is spending $79,299,039 less than the appropriations limit of $111,090,445. The total FY 2009-2009 appropriations subject to the limit are $31,791,406 (Proceeds of Taxes). Attachment #1 RESOLUTION ADOPTING THE APPROPRIATIONS LIMIT FOR FISCAL YEAR 2008-2009 AND MAKING THE ANNUAL ELECTION FOR ADJUSTMENT FACTORS WHEREAS, the people of California on November 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 1, 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 Limit; 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 with the provisions of Article XIII-B in calculation the appropriations limit for Fiscal Year 2008-2009; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Petaluma that: 1. The Fiscal Year 2008-2009 Appropriations Limit shall be $111,090,445 2. The Fiscal Year 2008-2009 Appropriations subject to the Limit is $31,791,406 3. The annual election for Adjustment Factors shall be to use the growth in City Population and the increase in the Per -Capita Personal Income for the State of California, as provided by the California State Department of Finance. Attachment #2 CITY OF PETALUMA, CA APPROPRIATIONS LIMITS CALCULATION FY2008-2009 ADOPTED BUDGET APPROPRIATIONS LIMIT A. Last Year's Limit - June 30, 2008 B. Adjustment Factors 1. Growth in City of Petaluma population 2. Growth in California Per Capita Income Total Adjustment % C. Annual Adjustment $ D. Other Adjustments Lost Responsibility (-) Transfer to Private (-) Transfer to Fees (-) Assumed Responsibility (+) Su bTotal E. Total Adjustments F. This Year's Limit - June 30, 2009 Amount Source 105,268,017 Adopted Budget 1.0119 State Finance 1.0429 State Finance 1.0553 (131 ` B2 ) 5,822,428 ( B-A) 5,822,428 (C+D ) $ 111,090,445 (A+E) CITY OF PETALUMA, CA APPROPRIATIONS LIMIT ANALYSIS FISCAL YEAR 2008-2009 APPROPRIATIONS LIMIT ANALYSIS Last Year's Appropriations Limit Adjustment Factors Change in Per Capita Personal Income City Population Increase January 2007 to January 2008 Total Adjustment Factor This Year's Appropriations Limit Proceeds of Taxes Exclusion 31,791,406 This Year's Appropriations Subject to Limit This Year's Appropriations Under Limit $ 105,268,017 1.0429 1.0119 1.0553 111,090,445 31,791,406 $ 79,299,039 CITY OF PETALUMA, CA APPROPRIATIONS LIMIT ANALYSIS FISCAL YEAR 20087-2009 Revenue Summary TAXES STATE OTHER GOVERNMENTS LOCALLY RAISED USER FEES OTHER MISCELLANEOUS AND INTERFUND TRANSFERS INTEREST INCOME Total Proceds Non -Proceeds of of Taxes Taxes - Exemptions Total 25,225,000 0 0 25,225,000 6,114,000 211,900 0 6,325,900 0 6,070,850 0 6,070,850 0 7,330,000 0 7,330,000 0 6,417,500 0 6,417,500 0 931,000 3,443,000 4,374,000 452,406 302,594 0 755,000 31,791,406 21,263,844 3,443,000 56,498,250 ENT Op w IIII n o m .µ 1)ERA��RTTMAE'NT ❑F ggY Cy G,ppRN�P ® I Y AN �C C E May 2008 Dear Fiscal Officer: Subject: Price and Population Information Appropriations Limit Attachment #3 ARNOLD SCHWARZENEGGER, GOVERNOR 91 5 L STREET ® SACRAMEN70 CA ® 95a 14-2708 M WWW..Or.CA...V The California Revenue and Taxation Code, Section 2227, mandates the Department of Finance (Finance) to transmit an estimate of the percentage change in population to local governments. Each local jurisdiction must use their percentage change in population factor for January 1, 2008, in conjunction with a change in the cost of living, or price factor, to calculate their appropriations limit for fiscal year 2008-09. Enclosure I provide the change in California's per capita personal income and an example for utilizing the price factor and population percentage change factor to calculate the 2008-09 appropriations limit. Enclosure II provides city and unincorporated county population percentage changes, and Enclosure IIA provides county and incorporated areas population percentage changes. 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 the Revenue and Taxation Code, Section 2228 for further information regarding the appropriation limit. You can access the Code from the following website: "htto://www.leginfo.ca.gov/calaw.html" check: "Revenue and Taxation Code" and enter 2228 for the search term to learn more about the various population change factors available to special districts to calculate their appropriations limit. Article XIII B, Section 9, of the State Constitution exempts certain special districts from the appropriations limit calculation mandate. Consult the following website: "http://www.leginfo.ca.gov/.conSY.2rticle_13B" for additional information. Special districts required by law to calculate their appropriations limit must present the calculation as part of their annual audit. Any questions special districts have 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 11005.6 mandates Finance to automatically certify any population estimate that exceeds the current certified population with the State Controller's Office. Finance will certify the higher estimate to the State Controller by June 1, 2008. Please Note: Prior year's city population estimates may be revised. If you have any questions regarding this data, please contact the Demographic Research Unit at (916) 323-4086. MICHAEL C. GENEST Director By: ANA J. MATOSANTOS Chief Deputy Director Enclosure Page 1 Fiscal Year 2008-2009 May 2008 Enclosure I A. Price Factor: Article XIII B specifies that local jurisdictions select their cost -of -living factor to compute their appropriation limit 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, the percentage change to be used in setting the 2008-2009 appropriation limit is: Per Capita Personal Income Fiscal Year Percentage change (FY) over prior year 2008-2009 4.29 B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2008-2009 appropriation limit. 2008-2009: Per Capita Cost of Living Change = 4.29 percent Population Change = 1.31 percent Per Capita Cost of Living converted to a ratio: 4.29 +100100 = 1.0429 31+100 Population converted to a ratio: 1.= 1.0131 100 Calculation of factor for FY 2008-2009: 1.0429 x 1.0131=1.0566 Page 2 Fiscal Year 2008-2009 Enclosure II Annual Percent Change in Population Minus Exclusions January 1, 2007 to January 1, 2008 and Total Population, January 1, 2008 Total County Percent Change - Population Minus Exclusions -- Population City 2007.2008 1.1-07 1-1-08 1-1-2008 Sonoma Cloverdale 1.16 8,479 8,577 8,577 Cotati 0.39 7,503 7,532 7,532 Healdsburg 0.45 11,654 11,706 11,706 Petaluma - 1.19 56,743 57.418 57,418 Rohnert Park 0.68 42,772 43,062 43,062 Santa Rosa 1.69 157,319 159,981 159.981 Sebastopol -0.17 7,727 7,714 7,714 Sonoma 0.45 9,898 9,943 9,943 Windsor 0.95 26,315 26,564 26,564 Unincorporated 0.32 150,098 150,571 151,973 County Total 0.95 478,508 483,068 484,470 (') Exclusions include residents on federal military installations and group quartem'resldents in state mental Institutions, and state and federal correctional Institutions. 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