HomeMy WebLinkAboutItem 1b - Appropriation Limit for FY 2014-15I 7611 AJ
DATE: June 17, 2014
TO: Mayor and City Council
STAFF REPORT
Administrative Services Department
FROM: Hue C. Quach, Administrative Services Director
Shannon Huang, Financial Services Manager /Treasurer
SUBJECT: RESOLUTION NO. 7036 ESTABLISHING AN APPROPRIATION LIMIT
FOR FISCAL YEAR 2014 -15 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. As calculated, the City's
expenditures subject to the limit are $39,855,000 versus a limit of $73,141,763,
meaning that the City of Arcadia is under the Gann Limit by over $33.7 million. It is
recommended that the City Council adopt Resolution No. 7036 establishing the annual
adjustment factors and the resultant Limit for Fiscal Year 2014 -15.
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 are not accounted as they are restricted for certain
purposes. Similarly, if the State specifies that funds transmitted to cities are restricted in
their use (e.g., State Gas Tax), they are excluded in the calculation of 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
Resolution Establishing an Appropriation Limit for FY14 -15
June 17, 2014
Page 2 of 2
County Assessor. Thus, the change of California Per Capita Income at -0.23% has
been used as the inflationary adjustment factor in the calculation of the City's Fiscal
Year 2014 -15 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 0.78 %; the City's population growth was 1.05%
in 2013. As a result, the City has chosen to use the City's growth factor for FY14 -15's
GANN Limit calculation.
The attached Exhibits "A ", "A-11", "B ", "C ", "C-11", and "D ", demonstrate the City's
compliance with Article XIII -B of the State Constitution for the Fiscal Year ending June
30, 2015. As calculated, the City's Proceeds of Taxes Before Exclusions is established
at $39,855,000 (Exhibit "C "), and the FY2014 -15 Appropriation Limit is $73,141,763
(Exhibit A). Exhibit "B" shows that the City of Arcadia is under the Appropriation Limit
by $33,723,863.
FISCAL IMPACT
The Gann Limit for the City of Arcadia in FY 2104 -15 is established at $73,141,763.
The appropriations subjected to the limit in the annual budget are $39,855,000, which
are well within the Limit. Therefore, the City may fully expend all funds appropriated in
the FY 2014 -15 Budget and has room for additional appropriations during the year as
necessary.
RECOMMENDATION
It is recommended the City Council adopt Resolution No. 7036 establishing an
Appropriation Limit for Fiscal Year 2014 -15 pursuant to Article III -B of the California
Constitution.
Approved:
� , -:
Dominic Lazzare+t
City Manager
Attachments: Exhibit "A"
Exhibit "A -1"
Exhibit "B"
Exhibit "C"
Exhibit "C -1"
Exhibit "D"
Resolution N
Appropriation Limit for Fiscal Year 2014 -15
Population /Inflationary Adjustment
Appropriations Subject to Limitation
Calculation of Proceeds
Interest Earnings produced by Taxes
Exclusions
o.7036
EXHIBIT "A"
CITY OF ARCADIA
APPROPRIATIONS LIMIT
FISCAL YEAR 2014 -15
AMOUNT
A. Last Year's Limit (2013 -14) $72,546,879
B. Adjustment Factors
1. City of Arcadia Population 1.0105
2. Per Capita Cost of Living converted to
a ratio: 0.9977
Total Adjustment (1.0105 * 0.9977) 1.0082
C. Annual Adjustment (72,546,879 x 1.0082 — 72,546,879) 594,884
D. FY2014 -15 Limit $73,141,763
EXHIBIT "A -1"
CITY OF ARCADIA
POPULATION /INFLATIONARY ADJUSTMENT
FISCAL YEAR 2014 -15
Percentage Change in Per Capita
Personal Income
Population Growth — City of Arcadia
Source: Department of Finance, State of California
-0.23%
1.0105%
EXHIBIT "B"
CITY OF ARCADIA
APPROPRIATIONS SUBJECT TO LIMITATION
FISCAL YEAR 2014 -15
A. Proceeds of Taxes Grand Total
B. Exclusions (Medicare Tax)
C. Appropriations Subject to Limitation
D. 2014 -15 Year Limit
E. Over (Under) Limit
AMOUNT SOURCE
$ 39,855,000 Exhibit "C"
( 437,100) Exhibit "D"
39,417,900
73,141,763 Exhibit "A"
($ 33,723,863)
REVENUE
EXHIBIT "C"
CITY OF ARCADIA
CALCULATION OF PROCEEDS
FISCAL YEAR 2014 -15
PROCEEDS
OF TAXES
NON
PROCEEDS
OF TAXES
TOTAL
Property Tax
$ 11,075,900
- $ 11,075,900
Public Safety Augmentation
471,400
- 471,400
Sales & Use Tax
10,473,000
- 10,473,000
Transient Occupancy Tax
2,987,000
- 2,987,000
Property Transfer Tax
649,000
- 649,000
Utility Users Tax
6,700,000
- 6,700,000
Business License Tax
1,250,000
50,000 1,300,000
TOTAL TAXES
$ 33,606,300 $
50,000 $ 33,656,300
FROM STATE
Motor Vehicle In Lieu $ 5,395,500 - $ 5,395,500
Gasoline Tax - $ 1,424,700 1,424,700
Homeowner's Exemption 65,000 - 65,000
POST - 10,000 10,000
SB 90 Reimbursements - 40,000 40,000
TOTAL FROM STATE $ 5,460,500 $ 1,474,700 $ 6,935,200
OTHER GOVERNMENTS
Community Development (CDBG) - 418,700 418,700
Other (PROP A &C) Taxes - 1,821,800 1,821,800
Prop A Park Maint. & Services - 50,000 50,000
Measure R 619,500 619,500
AQMD (AB2766) - 68,000 68,000
TOTAL OTHER GOVERNMENTS - $ 2,978,000 $ 2,978,000
LOCALLY RAISED
LICENSES AND PERMITS
Franchise Fee - $ 1,086,000 $ 1,086,000
Parking Permits - 290,000 290,000
Plan Check Fees - 1,500,000 1,500,000
REVENUE
PROCEEDS
OF TAXES
NON
PROCEEDS
OF TAXES
TOTAL
Building Permits
- 1,600,000
1,600,000
Mechanical, Electrial & Plumbing
- 350,000
350,000
Permits
1,500
$ 622,500 $
Home Occupantion Permits
- 15,000
15,000
Miscellaneous Permits
- 20,000
20,000
Planning Applications
- 400,000
400,000
Fire Plan Check
- 210,000
210,000
Engineering Permit Fees
- 100,000
100,000
Fire Code Permits
- 120,000
120,000
Fire Permit Inspections
- 57,000
57,000
Off -site Improvement
- 25,000
25,000
Water Efficient Landscape
200,000
200,000
Commercial Storm Water Inspection
20,000
20,000
Storm Water Plan Check Fees
- 15,000
15,000
SB1473 building Permit
- 500
500
Transportation Impact fees
- 200,000
200,000
Solid Waste Assessments
380,200
380,200
Charges for Current Service
- 2,705,500
2,705,500
Recreation Activities
- 1,063,100
1,063,100
Library Charges
- 72,500
72,500
Rent & Royalty
- 1,229,100
1,229,100
Park /Dwelling Unit Fees
- 2,000,000
2,000,000
TOTAL LICENSES & PERMITS
- $ 13,658,900 $
13,658,900
FINES & PENALTIES
Miscellaneous Fines
Parking Citations
Code Enforcement
Fire Citations
TOTAL FINES & PENALTIES
OTHER REVENUE
Parimutual Receipts
Admin. O/H Transit
Admin. O/H Water
Admin. O/H Sewer
Admin. O/H Parking District
Admin. O/H Redevelopment
Miscellaneous Receipts
Court Appearances
Waste Management Admin. Fees
TOTAL OTHER REVENUE
$ 700,000
$ 700,000
$ 56,000 $
56,000
550,000
550,000
15,000
15,000
1,500
1,500
$ 622,500 $
622,500
- $
700,000
$ 91,300
91,300
1,052,700
1,052,700
179,400
179,400
1,900
1,900
70,700
70,700
55,000
55,000
2,500
2,500
105,600
105,600
$ 1,559,100 $ 2,259,100
REVENUE
PROCEEDS
OF TAXES
NON
PROCEEDS
OF TAXES
Total Estimated Revenues
Before Revenue from Use of Money $ 39,766,800 $ 20,343,200 $
Revenue Earned from Use of Money
Earned on Non - Proceeds
of Taxes: Funds 107, 118
142, 151, 155,157 & 521,153,161
Proceeds of Taxes: Fund 302
General Fund
TOTAL REVENUE EARNED
FROM USE OF MONEY
GRAND TOTAL
- 59,400
TOTAL
60,110,000
59,400
22,000 - 22,000
66,200 33,800 100,000
$ 88,200 $ 93,200 $ 181,400
$ 39,855,000 $ 20,436,400 $ 60,291,400
EXHIBIT "C -1"
CITY OF ARCADIA
INTEREST EARNINGS PRODUCED BY TAXES
FISCAL YEAR 2014 -15
Proceeds of Taxes (Excluding Interest) $39,766,800
Total Revenue (Excluding Interest) $60,110,000
Percent applicable to Proceeds of Taxes (66.2 %)
Total interests budgeted for General Fund $ 100,000
Interest applicable to Proceeds of Taxes (66.2 %) $ 66,200
Interest applicable to Non - Proceeds of Taxes (33.8 %) $ 33,800
Interest directly identified to Funds which revenues are identified
as Non Proceeds of Taxes — Funds 107,118, 142, 151, 155, 157,
521,153, 161 $ 59,400
Interest directly identified to Funds which revenues are identified as
Proceeds of Taxes — Fund 302 $ 22,000
EXHIBIT "D"
CITY OF ARCADIA
EXCLUSIONS
FISCAL YEAR 2014 -15
FEDERAL MANDATED COSTS:
Medicare Tax $437,100
RESOLUTION NO. 7036
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, ESTABLISHING AN
APPROPRIATION LIMIT FOR FISCAL YEAR 2014 -2015
PURSUANT TO ARTICLE XIII -B OF THE CALIFORNIA
CONSTITUTION
WHEREAS, Article XIII -B of the Constitution of the State of California imposes
restriction upon California governmental agencies to limit their annual appropriations to
the appropriations in fiscal year 1978 -79, adjusted for the subsequent inflation and
population changes; and
WHEREAS, effective for years beginning on or after July 1, 1990, under Section
1.5 of Article XIII -B, the annual calculation of the appropriations limit is subject to a
limited review in connection with the annual audit; and
WHEREAS, the City of Arcadia may use as its inflation factor either the annual
percentage change in California per capital personal income or the percentage change
in its local assessment roll from the preceding year due to the change of local
nonresidential construction. 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, the City of Arcadia may use as its population factor either the annual
percentage change of the City's own population or the annual percentage change in
population of the Los Angeles County. The City of Arcadia has opted to use, as the
population adjustment factor, the change in the population of the City of Arcadia, and
1
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 2014 -15 for the City of
Arcadia shall be and is hereby set in the amount of $73,141,763.
SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
Passed, approved and adopted this day of , 2014.
ATTEST:
City Clerk
APPROVED AS TO FORM:
T
Stephen P. Deitsch
City Attorney
Mayor of the City of Arcadia