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HomeMy WebLinkAboutItem 2d - Adopt Resolution No. 6971 - Appropriation Limit for Fiscal Year 2013-14I 7611 AJ DATE: June 4, 2013 TO: Mayor and City Council STAFF REPORT Administrative Services Department FROM: Hue C. Quach, Administrative Services Director Shannon Huang, Financial Services Manager /Treasurer SUBJECT: ADOPT RESOLUTION NO. 6971 ESTABLISHING AN APPROPRIATION LIMIT FOR FISCAL YEAR 2013 -14 PURSUANT TO ARTICLE XIII -B OF THE CALIFORNIA CONSTITUTION Recommendation: Adopt SUMMARY Article XIII -B of the State Constitution imposes a limit ( "the Gann Limit ") on tax proceeds that can be appropriated for expenditures in any given fiscal year. Section 7910 requires the City to establish the limit by resolution. It is recommended that the City Council adopt Resolution No. 6971 (Exhibit E) establishing the annual adjustment factors and the resultant Limit for Fiscal Year 2013 -14. DISCUSSION In November 1979, the voters of the State of California approved Proposition 4, commonly known as the Gann initiative. This proposition created Article XIII -B of the State Constitution placing limits on the amount of revenue that can be spent by any city government. Each government was allocated a base year Limit, which is adjusted annually for inflation and population growth. The law also requires an annual review of the Limit calculation. Certain revenues do not count toward the annual Gann Limit. For instance, the expenditure of tax proceeds on voter- approved debt and the costs of complying with Court orders and Federal mandates, do not count, with certain restrictions. Similarly, if the State specifies that funds transmitted to cities are restricted in their use (e.g., State Gas Tax), then they are not counted in the City's Gann Limit. To measure inflation, each City may choose the greater of the growth in the California Per Capita Income or the growth in the non - residential assessed valuation due to new construction within the City. At the present time, the data necessary to calculate the increase in the non - residential assessed valuation is not available from the Los Angeles County Assessor. Thus, the change of California Per Capita Income at 5.12% has been used as the inflationary adjustment factor in the calculation of the City's Fiscal Year 2013 -14 Appropriation Limit. The second factor for calculating the Limit is the change in population. Cities may choose the greater of the population growth within the county or the City. In the County of Los Angeles, population growth was 0.69 %; the City's population growth was 0.52% in 2012. As a result, the City has chosen to use the County growth factor for FY13 -14's GANN Limit calculation. The attached exhibits A, B, C, and D, demonstrate the City's compliance with Article XIII -B of the State Constitution for the Fiscal Year ending June 30, 2014. As calculated, the City's Proceeds of Taxes Before Exclusions is established at $37,519,188 (Exhibit C), and the FY2013 -14 Appropriation Limit is $72,546,879 (Exhibit A). Exhibit B shows that the City of Arcadia is under the Appropriation Limit by $35,446,991. FISCAL IMPACT The Gann Limit for the City of Arcadia in FY 2103 -14 is established at $72,546,879. The appropriations subjected to the limit in the annual Budget are $37,519,188, which are well within the Limit. Therefore, the City may fully expend all funds appropriated in the FY 2013 -14 Budget and has room for additional appropriations during the year as necessary. RECOMMENDATION It is recommended the City Council adopt Resolution No. 6971 establishing an Appropriation Limit for Fiscal Year 2013 -14 pursuant to Article III -B of the California Constitution. Approved Dominic Lazzare City Manager Attachments- Exhibit A Exhibit A -1 Exhibit B Exhibit C Exhibit C -1 Exhibit D Exhibit E - Appropriation Limit for Fiscal Year 2013 -14 - Population /Inflationary Adjustment - Appropriations Subject to Limitation - Calculation of Proceeds - Interest Earnings produced by Taxes - Exclusions - Resolution No. 6971 I C CITY OF ARCADIA APPROPRIATIONS LIMIT FISCAL YEAR 2013 -14 EXHIBIT "A" AMOUNT Last Year's Limit (2012 -13) $68,537,439 Adjustment Factors 1. Los Angeles County Population 1.0069 2. Per Capita 1.0512 Total Adjustment (1.0512 *1.0069) 1.0585 Annual Adjustment (68,537,439 x 1.0585 — 68,537,439) 4,009,440 FY2013 -14 Limit $72,546,879 EXHIBIT "A -1" CITY OF ARCADIA POPULATION /INFLATIONARY ADJUSTMENT FISCAL YEAR 2013 -14 Per Capita Inflationary Adjustment 5.12% Population Growth — County of Los Angeles 1.0069 Source: Department of Finance, State of California CITY OF ARCADIA APPROPRIATIONS SUBJECT TO LIMITATION FISCAL YEAR 2013 -14 A. Proceeds of Taxes B. Exclusions C. Appropriations Subject to Limitation D. 2013 -14 Year Limit E. Over (Under) Limit EXHIBIT "B" AMOUNT SOURCE $ 37,519,188 Exhibit "C" ( 419,300) Exhibit "D" 37,099,888 72,546,879 Exhibit "A" ($ 35,446,991) REVENUE Property Tax Public Safety Augmentation Sales & Use Tax Transient Occupancy Tax Property Transfer Tax Utility Users Tax Business License Tax TOTALTAXES FROM STATE EXHIBIT "C" CITY OF ARCADIA CALCULATION OF PROCEEDS FISCAL YEAR 2013 -14 PROCEEDS NON OF TAXES PROCEEDS TOTAL OF TAXES $ 10,085,400 - $ 10,085,400 442,000 - 442,000 9,762,800 - 9,762,800 2,859,700 - 2,859,700 522,900 - 522,900 6,722,200 - 6,722,200 1,150,000 50,000 1,200,000 $ 31,545,000 $ 50,000 $ 31,595,000 Motor Vehicle In Lieu $ 5,072,500 - $ 5,072,500 Gasoline Tax - $ 1,651,250 1,651,250 Homeowner's Exemption 82,800 - 82,800 POST - 20,000 20,000 SB 90 Reimbursements - 30,000 30,000 TOTAL FROM STATE $ 5,155,300 $ 1,701,250 $ 6,856,550 OTHER GOVERNMENTS Community Development (CDBG) Other (PROP A &C) Taxes Prop A Park Maint. & Services Measure R AQMD (AB2766) TOTAL OTHER GOVERNMENTS LOCALLY RAISED LICENSES AND PERMITS 272,200 272,200 1,760,840 1,760,840 40,000 40,000 598,700 598,700 67,800 67,800 $ 2,739,540 $ 2,739,540 Franchise Fee - $ 1,066,100 $ 1,066,100 Parking Permits - 290,000 290,000 Plan Check Fees - 867,500 867,500 FINES & PENALTIES Miscellaneous Fines PROCEEDS NON 56,000 REVENUE OF TAXES PROCEEDS TOTAL - OF TAXES Building Permits - 1,000,000 1,000,000 Mechanical, Electrial & Plumbing - 250,000 250,000 Permits - 1,500 Home Occupantion Permits - 20,000 20,000 Miscellaneous Permits - 15,000 15,000 Planning Applications - 250,000 250,000 Fire Plan Check - 170,000 170,000 Engineering Permit Fees - 70,000 70,000 Fire Code Permits - 110,000 110,000 Fire Permit Inspections - 50,000 50,000 Off -site Improvement - 18,000 18,000 Water Efficient Landscape 100,000 100,000 Storm Water Plan Check Fees - 6,600 6,600 SB1473 building Permit - 300 300 Transpaction Impact fees - 500,000 500,000 Solid Waste Assessments 342,000 342,000 Charges for Current Service - 2,626,500 2,626,500 Recreation Activities - 1,066,400 1,066,400 Library Charges - 73,500 73,500 Rent & Royalty - 1,282,400 1,282,400 Park /Dwelling Unit Fees - 1,200,000 1,200,000 TOTAL LICENSES & PERMITS - $ 11,374,300 $ 11,374,300 FINES & PENALTIES Miscellaneous Fines - $ 56,000 $ 56,000 Parking Citations - 550,000 550,000 Code Enforcement - 17,000 17,000 Fire Citations - 1,500 1,500 TOTAL FINES & PENALTIES - $ 624,500 $ 624,500 OTHER REVENUE Parimutual Receipts $ 750,000 - $ 750,000 Admin. O/H Transit - $ 94,100 94,100 Admin. O/H Water - 1,070,700 1,070,700 Admin. O/H Sewer - 199,100 199,100 Admin. O/H Parking District - 1,800 1,800 Admin. O/H Redevelopment 41,000 41,000 Miscellaneous Receipts - 20,000 20,000 Court Appearances - 2,500 2,500 Waste Management Admin. Fees - 104,600 104,600 TOTAL OTHER REVENUE $ 750,000 $ 1,533,800 $ 2,283,800 REVENUE Total Estimated Revenues PROCEEDS OF TAXES NON PROCEEDS OF TAXES Before Revenue from Use of Money $ 37,450,300 $ 18,023,390 $ Revenue Earned from Use of Money Earned on Non - Proceeds - 69,470 of Taxes: Funds 107, 118 142, 151, 155, 157 & 521,153,161 Proceeds of Taxes: Fund 302 13,200 - General Fund 55,688 26,812 TOTAL REVENUE EARNED FROM USE OF MONEY $ 68,888 $ 96,282 $ GRAND TOTAL $ 37,519,188 $ 18,119,672 $ TOTAL 55,473,690 69,470 13,200 82,499 165,169 55,638,859 Exhibit "C -1" CITY OF ARCADIA INTEREST EARNINGS PRODUCED BY TAXES FISCAL YEAR 2013 -14 Proceeds of Taxes (Excluding Interest) $37,450,300 Total Revenue (Excluding Interest) $55,473,690 Percent applicable to Proceeds of Taxes (67.5 %) Total interests budgeted for General Fund $ 82,500 Interest applicable to Proceeds of Taxes (67.5 %) $ 55,688 Interest applicable to Non - Proceeds of Taxes (32.5 %) $ 26,812 Interest directly identified to Funds which revenues are identified as Non Proceeds of Taxes — Funds 107,118, 142, 151, 155, 157, 521,153, 161 $ 69,470 Interest directly identified to Funds which revenues are identified as Proceeds of Taxes — Fund 302 $ 13,200 EXHIBIT "D" CITY OF ARCADIA EXCLUSIONS FISCAL YEAR 2013 -14 FEDERAL MANDATED COSTS: Medicare $419,300 EXHIBIT "E" RESOLUTION NO. 6971 [Attached behind this page] RESOLUTION NO. 6971 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, ESTABLISHING AN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2013 -2014 PURSUANT TO ARTICLE XIII -B OF THE CALIFORNIA CONSTITUTION WHEREAS, Article XIII -B of the Constitution of the State of California imposes upon the City of Arcadia, as well as all cities, the obligation to limit each fiscal year's appropriations in fiscal year 1978 -79 as adjusted for subsequent inflation and population changes; and WHEREAS, the City of Arcadia has opted to use, as the inflation adjustment factor, the percentage change in California per capita personal income in lieu of the growth in the non - residential assessed valuation; and WHEREAS, at the time the appropriations limit calculations were prepared, the date necessary to calculate the increase in the non - residential assessed valuation was generally not available from the County Assessor; and WHEREAS, there exists a possible need to adjust the appropriations limit once the assessment date is available, and consequently this Resolution is being adopted on a provisional basis; and WHEREAS, the City of Arcadia has opted to use, as the population adjustment factor, the growth in the population of the County of Los Angeles in lieu of the growth in the population of the City of Arcadia, and WHEREAS, pursuant to Article XIII -B of the California Constitution, the City is required to set its appropriation limit for each fiscal year, and has made available to the public the documentation used in the determination of said appropriation limit. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS: SECTION 1. The appropriation limit for Fiscal Year 2013 -14 for the City of Arcadia shall be and is hereby set in the amount of $72,546,879. SECTION 2. The City Clerk shall certify to the adoption of this Resolution. Passed, approved and adopted this 4th day of June, 2013. Mayor of the City of Arcadia ATTEST: City Clerk APPROVED AS TO FORM: City Attorney