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CITY OF PETALUMA, CALIFORNIA
AGENDA BILL September 13..2
izefida,:.Title:
Meeting Date:
September 13, 2004
Rie s . olution Adopting FY 2004-,20,05'Gann Appropriationsti'mit;
Meet ngTirne: 3:00 PM
7:00 PM
Category (check one): C onsent Calendar F Public Hearing L_J New.Business
F I)nfinished Business F Presentation
r' Contact Person Ph
Department: Dione Number:
Administrative Services Joseph Netter' Joseph-D4 Netter 778-4323
p
Cost, of Proposal:
Account Number
N/A
N/A
Amount Budgeted:
Name 6f'Fund:
N/A
N/A
Attachments to Agenda Packet Item.
1. Resolution Adopting Gann Appropfidtibfis Limit and Mak Annu FEW tions
2. Appropriations Limit Calculations - Works'heets No.'s Uffirou%gh,7
3. California State Department of Finance Price (Per Capita Income) and Population Co I inputations and
Information
Summary Statement:
Under the provision of California State the city is reqpire4to' an Annual Appropriiations Limit
which is commonly referred to the "Gann L` 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 ad factors which include adjustments for
population growth and per capita. income changes. These adjustment factors are provided by the California
State Department of Finance (Attdchment #3): Thd City of Petaluma makes an annual election to choose
the adjustment factors as provided by the State. The Appropriations Limit for Fiscal Year 2004-05 has
been calculated by using the increase in the. per-capita income and population growth factors as provided.
The Fiscal Year 2004-05 Approp Limit is $90425,321. ' This Appropriati6ns'Limit by
1 or S72 659 from I Fiscal Year 2003-04 Limit of $97 The Fiscal Year 2004-05
1116% .V
Appropriations to the Limit (Pfo"ceeds of Taxes) is calculated to be $20,309:4,80.
Reconitnendcd City, Council Action/Suggested Motion:
Adopt the resolution settin g the 'Gann Appropriations Limit and Making the Election to use the
Calculations : Factors .. as provi e , b Vid - d b the California State Department of Finance.
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sibn # and. Datel Revised'
Rev
File Co de:,
August 23 2004
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CITY OF'`PETALVMA, CALIF®RNIA
SEPTEMBER 13 2004
AGENDA REPORT
FOR
RESOLUTION ADOPTING' FY 2004 -2005, AIPPROPRIAI'IONS LIMIT
L. EXECUTIVE SUMMARY
Under the provisions of'California State law, the City is: required to set an Annual. Appropriations Limit
commonly referred to as the "Gann 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 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 20'04 -05 has been calculated by using the increase in the per - capita
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income (statewide) and the City's population growth factors The Fiscal Year 2004 -2005
Appropriations Limit, is calculated `to be $90;425,321. This;liniit increase by 3.76 %' or $3
fro_ m Fiscal Year 2003 -2004 limit of'$87- The Fiscal Year 2004 -2005: Appropriafions subject
to the limit (Proceeds of iixes)'Js to be $20, 309
2. BACKGROUND
In November 1979, the people of California added Article XII.I -B; to the, California: State Constitution
ed.lim s itation ori'the Appropriations of State and Local'Governments. The Article defined
thel p ocess to calculate
p the appropriations limit and require Cities to' adopt resolutions setting the annual
appropriations limits. In June 1.9,90 people adopted Proposition 111 that amended Article XIII -B.
The amendment created the new'base year: of FY 19864987, and.allowed annual'increases based on
factors cornprised'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 exclusion of capital expenditures over $'100;000 :and ; required; independent auditor
review ofthe 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' , Appropriations Limit has increased significantly since; 1.987 by applying the
allowable factors as, outlined above. In the current Fiscal Year; the City is' using the change in per-:capita
personaLincome 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.3.28% combined with
g p p 6% o -- resulted in a,factor calculated to be 3.74% o increase. 'This increase
adju ted',the appropr ations 1 'mit upward from $87,152 in'FY 2003 -04 to $90;425 for Fiscal
Year 2004 -05,.
As required by California State law, detailed. worksheets have been provided showing the appropriations
limit calculations. ,• These worksheets are included with °this report and are available for public review
and inspeciion the City .Clerk's office.'
3. ALTERNATIVES
None, as California State law°requires the adoption of an Annual. Appropriations Limit.
4. FINANCIAL IMPACTS
The Appropriations Limit' has never been a factor in:considering the City's; annual budget. Currently,
the City is spending $70 ; 115;841 less than the appropriations limit rof -$90,425,321. The'iotalFY 2004-
05 appropriations subject to the limit are $20,3.09480 (Proceeds of Taxes). Obviously, this limit will
not affect the continued operations of the City`currently of for many years.into, the - future.
5. CONCLUSION
As in past years, the Appropriations limit has become less of•a concern for the City of Petaluma, as the
City's expenditures' subject to the "Gann Limit" do not come close to what the limit would allow.
Unless there are drastic changes in the way municipal finance is structured, the; appropriations limit will
continue to 'be , a, mathematical calculations, and not a financial planning tool.
6. OUTCOMES'ORPERFORMANCE MEASUREMENTS THAT WILL IDENTIFY SUCCESSOR COMPLETION:
The adopted resolution.and worksheets will become par -Cof the Fiscal Year 2.0.04-20,0S Adopted Budget
Document:
7. RECOMMENDATION
Adopt the establishing the Appropriations Limit of $90,425,321;f6r.,Fiscal Year;2004 -OS.
s1budget/budget;05 %agenda/gann agenda bill
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Attachment 41
IT FOR FISCAL
YE R 200`4 -2 08 AND MAKING THE A® ULA ®LEC ON FOR
ADJUSTMENT FACTORS
WHEREAS, the people of California on November 6,191% 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, 120 and 1342 of the
1980 Statutes wich implemented Article XIII -B and
WHEREAS, the people of California on June 5, 1990 amended Article XIII -B effective
on July 1, 1090; 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 Coderequires cities to adopt a resolution
® setting the annual appropriations'; limitat 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 2004=2005 ';
NOW, THEREFORE, BE IT RESOLVED' by the City Council ;of the City of Petaluma
that:
1. The Fiscal Year 2 Limit shall be.$90,425,321
2. The Fiscal Year 2004 =2005 Appropriations subject to the Limit is $20,309
3. The',anrival 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 " by the California`State Department of Finance.
Attachment #2
CITY',OF PETALUMA, CA
FISCAL YEAR 2005 GANN'.CALCULATIONS
BASED ON FISCAL YEAR 2004 ADOPTED, BUDGET
t,
WORKSHEET #1 USER FEES VERSUS COSTS
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"
Police Services"'
Fire Services
Community
public: Facilt ies
Recreation
FY 2004 -2005
Development
Totals
COSTS REASONABLY BORNE
$ 7,822,650
$ '415
$ 2,248 I5'0
$ 91.5,750
$ 1,541,650
$ 12,944,100
FEES
156,500
488,350
1,740
188,200
81.5,000
3,388,050
AMOUNT OF FEE REVENUE
LESS THAN COST
$ (7,666,159
$ 72,450
$ (508,150
$ (727,550)
$ (•726,650)
$ (9,556,050)
,
if1e *1budget \budget05 \gann worksheet \gann worksheets
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CITY OF PETAL MA, CA Attachment #2
FISCAL YEAR,2005 GANN CALCULATIONS
BASED ON FISCAL YEAR 2005 ADOP'T'ED BUDGET
rilenarime: sAbudget \budget05 \gann limitation worksheet \gann worksheets
WORKSHEET #2:- CALCULATION OF PROCEEDS OF TAXES'
Proceeds of NonProceeds
REVENUE Taxes of Taxes
Taxes
Subventions from , State
Motor Vehicle In Lieu
Off Highway
Gas Tax
Homeowner's Relief
SB 90 Reimbursements
Other Intergovernmental
Locally Raised
Special Benefit = Landscape Assessments
Licenses and Permits
Fines, Forfeiture and Penalties
Rents
Charges for Services
User Fees (Worksheet'One)
Other
Miscellaneous
- SubTotal
Interest. Earnings'(Worksheet Three)
Total Revenue
Reserve Withdrawals
Total of These Funds
Enterprise Funds
Grand Total.- Adopted :Budget
Total
$ 17,298,550 $
4,647 $
21,939,5,50
2,420,000
-
2,420
-. 750
-
750
-
1,120,000
1.,120
93,500
-
93;500
-
3,198,000
3;198,000
-
304,500
304;500;
-
7,052,200
7,052,200
-
469;250
469,25.0
-
310,250,
310,250
-
3,622,650
3,622,650
-
3,388,050
3
-
1,25,000
125,000
19,812,800
24
44,00700
758;680
- 157,070
915;750
44,959,450
20,571,480
24,387
20;571,480 24,387,970 44,959,450
45,326,800 45,326;800
$ 20,571,480 $ 69,714,770 $ 90,286
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C1T PETALi MA, CA Attachment #2
FISCAL
YEAR 2005 GAIiTI\1 CALCULATIONS
BASED ON FISCAL YEAR 200 5 ADOPTED BUDGET
filename; s: \budget \budget05 \gann limitation worksheet \gann worksheets
WORKSHEET .0 - . INTEREST',EARNhNGS PRODUCED B'Y TAXES
Amount Source
A. Non-Interest Tax Proceeds $ 19812,800 Worksheet # 2
B. Minus Exclusions 262,000 Worksheet # 7
C. Net Invested Taxes . 20 ( A -B )
D. Total Non - Interest Budget 24,230;900 Worksheet # 2
E. Tax Proceeds as % of Budget 82.85% ( C/D )
F. Interest Earnings 915,750 Budget
G. Amount of Interest Earned from Taxes' $ 758 ( E *F )
H. Amount of Interest' Earned "from Non -Taxes $ 157,070 ( F -G )
CITY OF PETALUMA,, CA Attkhment 42
FISCAL YEAR, 2005 . GANN CALCULATIONS
BASED ON FISCAL YEAR 2005 ADOPTED 8U0GETT
filenamp: sAbU,,dglpt\bqclget05\ganh linnitation worksheef\gann worksheets
WORKSHEET #4.- APPROPRIATIONS'SUBJECT TO LIMITATION,
Amount
A. Proceeds of Taxes $ 20,571,480
B. Exclusions 262,
C. Appropriations Subject to Limitation 20
D, Current Year Limitation 90,426.321
E. Ove 0,(Und-er Limit (70 „115,841)
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r CITY OF PETALUIVIA CA
FISCAL, YEAR 2005 . GA,NN CA.L tULATLONS
BASED ON FISCAL. YEAR,2005, AD:OP'I'E'D BUDGET
filename: s: \budget \budget05 \gann limitation worksheet \gann worksheets
WORKSHEET #5 - APPROPRIATIONS LIMIT
A. Last Year's Limit
Attachment #2
Amount Source
87,1 :52,662 Adopted Budget
B. Adjustment Factors
1..Growth in City of Petaluma ~population
1:0328
State Finance
2. Growth in California Per Capita Income
1.'0046
State Finance
Total Adjustment %
1.0376
(B1 - B2)
C. Annual Adjustment $
3,272,;659
( B - A)
D. Other Adjustments
Lost Responsibility ( -)
-
Transfer to Private
Transfer to Fees ( -)
-
Assumed Responsibility,( +)
SubTotal
-
E. Total Adjustments
3
( C +R )
F. This Year's Limit
$ 9:0,;.425,321
(A ±E)
CITY OF PE°TALUMA, CA Attachment #2
FISCAL YEAR 2005 GANN CALCULATIONS
BASED ON FISCAL YEAR 2005; ADOPTED -BUDGET
filename =s: \budget \6udgetO5 \gann limitation worksheet \gann ^worksheets
WORKSHEET #6. - APPROPRIATIONS LIMIT ANALYSIS
FY 2003 -20-04 Appr=opriations Limit $ 87
Adjustment Factors
Change in Per Capita Personal Income (FY 2004 -2005) 1.0328
City. Population Increase January 2003 to January 2004 1:0.04:6
Factor for Fiscal. Year 2004;2005 1:0376
FY 2004- 2005,Appro:priations Limit $ 1 90,425,321
FY 2004 -200.5 Proceeds of Taxes 20,571,480
Exclusion (262
FY 2004 -2005 Appropriations Subject to Limit 20,369
FY2004 =2005 Appropriations Under Limit $ 70,11'5
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CITY OF PE'I'AI,UMA, CA Attachment 42
FISCAL YEAR 2005 GANN CAICi1IATIONS
BASED ONFISCAL YEAR 2005 ADOPTD) BUDG
-WORKSHEET; #7 -- EXCLUSIONS IO APPROPRIATIONS LIMIT
COURT ORDERS. $ -
filename: s :\ budget \budg6t05 \gann*lim,itation wo�ksheet\gannworksheets
FEDERAL MANDATES
FLSA Payments
I
Medicare Payments 250,000
Landfill Closure Costs -
Underground Tank Monitoring -
Unemployemnt "Payments 12,000
TOTAL FEDERAL MANDATES 26-2,000
QUALIFIED CAPITAL OUTLAYS
COP - Street Lights, Police Facility
Community Center
Financing Leases
QUALIFIED DEBT SERVICE -
TOTAL EXCLUDED APPROPRIATIONS $ 262,000
From:U', 'iqpt.. of Finance: 916 327 0222 07/09/2004 09..32 P.001/003
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• 6 4 L D E PA'RTM E N 0' ARNOL •5 CHWARZ EN EGGER, GOVERNOR F I NANQ 9 1!!5 L STREET ®, S AGRAME NTO I CA 2,958,1 4•3706 W
N
May 3, 2004
Dear Fiscal Officer:
Subject: Price and PopUlatidnArit6rmat
Appropriations Limit
The California Revenue and Tax'atio'n Section 2227. mandates'thebeiiartment of Finance (Finance)
to transmit an estimate of'the'perceritag change-in populati6n toilocal, Each'local jurisdiction
must,use their pe.rce,ntagL- ,cffa nfactorfo 4
-ary QO in ponjunc on with a change in
the cost ofliving, or price faictor, ito,calc6late,their appropriations limit,forrfiscal,year 2004-05. Enclosure 1,
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provides the change. i6 per ' ita�.bersohall income and anexarnple":�r utilizifig''the pricefactor
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and population percentage change -factor to 6 a . 2004-05 appro pri ations limit: Enclosure 11 provides
city and unincorporated county population perc qntage and Enclosure;IIA provides county and
bpul
incorporated areas population rc tagebbanges The' population p
. eidrdiant446ichatigedita excludes
ar ' ' I I 'Jn �pe , qn. m ilit a ry ' " '
federal and state institutionalized p opulations land mi itary pop6l ations, as noted.
Population Percent Change for Special Districts
Some special districts mustest6blishah annual appropriations limit. Consult1he Revenueand Taxation
Code Section 2228, for the various population option Ayailabl e'40Wedi6141stricts WasseSs population
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change in their district. Adidle,'XIII, B, .Section , 9,. , of'the1 State i3onstUibn exempts certainispecial districts
from the appropriations limit,czilcul.-
ifib'n mandaite., Special'dis'tricts require d y 1 16 calculate the . ir
byla "to
appropriations limit must prdsent.the calculationas part of 'their annual audit -No State agency reviews the
appropriations limit.
Population Certification
The population certification prograrrij�applies only to cities and countiiB Code
Section" 1 - 1'005.6 mandates Finance to automatically certify any po I pylpItion estimate that :exceeds the.
current,certified population Wifh Controller's Office., Finance wilfcartify the higher estimate to
the State Controller by Ju0
,III Please,,N6te City population 7 estimates , dir l e.,6cirittoi!6d 10 independently calculated. county, population
'estimates. Due to co through 'prior year c i t y , popu
county estimates revisio.0s. for 200 popu estimates
for local areas have also,been revised.
If you h4velany questions reg5rding1his, data, please^ contact.the,Demographic Unit
at (916}323-40M
Sincerely,,
DONNAIJARQUIN
irector
By
MICHAEL C. GENEST
Chief D6luty Director
Enclosure
From:OA Dept. of Finance 916 327 0222 07/09/2004 09'.32 #137 P.002/003
h4m, OUl-t 0 ?)
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May 1, 1064 'Enclosure I
A. Price Factor Article X1 11 B specifies 'that local jurisdictions select, their
cost -of- living factor to compute appropriation a vote , of `their governing .
;body;. The
cost.04iving factor provided, 'here is per. capita personal, incbrhe.,:1f
percentage change ,in Per 6 personal . income 'is, selected, the percentage
I
change to beUsed'i I wsottlng -fhb 2004 =2005 004-2005 appropriation li ' mit1s:
Per Cap al Income
Fiscal Year Percentage change
over odor year
2004-2005 3.28
iB. Fo,I_IovAng is an q)(ample, usinj'samplei 'population change and the change in%
California per capita personal' I
income as g(rbwth in cotnputing
cjppropr!ationdirnk;
- 2004-2005:
Per Capita Change= 3.28 percent
Poo0latibn Change = 1.52 percent
Per Capita convert6d' to a ratio:
Population . converted .to aratio:
Calculation of - factor for FY _2004 - 2005`.
3.28` +100
1.0328
100
1.52+100
I lbb 1.0152
1,0328 x =1.0485
FlY
o,7 - ?.5
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07/09/2004 09:32 #137 P.003/003
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(') Exclusions include residents on'federal "military installations and group quarters residents in state mental institutions'and state and federal
correctional', institutions.
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Enclosure 11'
Annual _Percent Change in Population Minus Exclusions (')
January 1, 2003 to January 1, 2004 and Total Population, January .
1, 2004
Tota
County
Percent Chanae
-= Population Minus:Exclustons -=
Population
City
2003 -2004
1 -1 -03
1 -1.04
1 -1 -2004
SONOMA
CLOVERDALE
639
7,459
7,936.
7,936
COTATI
2.81
6
7,020'
7,020
HEALDSBURG
014
11,580
11596
11,596
PETALUMA
0.46
55,628
55,884
5504
ROHNERT PARK
-0:36
42,281,
47
42,127
SANTA ROSA
0:64.
153,399
154.379
154,379
SEBASTOPOL
-0:23
7;758
7;740
7
SONOMA
1.53
9,540
9;686
9,686
WINDSOR
1.85`
24,325
24;776
24,776
UNINCORPORATED
.1.19'
149,005'
150;775
151,581
COUNTY TOTAL
0 ;88
467,803
471;9,19
472,725
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(') Exclusions include residents on'federal "military installations and group quarters residents in state mental institutions'and state and federal
correctional', institutions.
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