HomeMy WebLinkAboutItem 3b - Resolution No. 7074 - Appropriation Limit for FY 2015-16674010
DATE:
TO:
FROM
STAFF REPORT
Administrative Services Department
June 16, 2015
Honorable Mayor and City Council
Hue C. Quach, Administrative Services Director
Shannon Huang, Financial Services Manager /Treasurer
SUBJECT: RESOLUTION NO. 7074 ESTABLISHING AN APPROPRIATION LIMIT
FOR FISCAL YEAR 2015 -16 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 $43,332,600 versus a limit of $76,557,483,
meaning that the City of Arcadia is under the Gann Limit by $33.2 million. It is
recommended that the City Council adopt Resolution No. 7074 establishing the annual
adjustment factors and the resultant Limit for Fiscal Year 2015 -16.
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 No. 7074 Establishing an Appropriation Limit for
Fiscal Year 2015 -16
June 16, 2015
Page 2 of 2
County Assessor. Thus, the change of California Per Capita Income at 3.82% has been
used as the inflationary adjustment factor in the calculation of the City's Fiscal Year
2015 -16 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 0.82 %; the City's population growth was 0.41%
in 2014. As a result, the City has chosen to use the County's growth factor for FY15-
16'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, 2016. As calculated, the City's Proceeds of Taxes Before Exclusions is established
at $43,726,900 (Exhibit "C "), and the FY2015 -16 Appropriation Limit is $76,557,483
(Exhibit "A "). Exhibit "B" shows that the City of Arcadia is under the Appropriation Limit
by $33,224,883.
FISCAL IMPACT
The Gann Limit for the City of Arcadia in FY 2015 -16 is established at $76,557,483.
The appropriations subjected to the limit in the annual budget are $43.332.600, which
are well within the Limit. Therefore, the City may fully expend all funds appropriated in
the FY 2015 -16 Budget and has room for additional appropriations during the year as
necessary.
RECOMMENDATION
It is recommended the City Council adopt Resolution No. 7074 establishing an
Appropriation Limit for Fiscal Year 2015 -16 pursuant to Article III -B of the California
Constitution.
Approved:
Dominic Lazzar t
City Manager
Attachments: Exhibit "A" - Appropriation Limit for Fiscal Year 2015 -16
Exhibit "A -1 "- Population /Inflationary Adjustment
Exhibit "B" - Appropriations Subject to Limitation
Exhibit "C" - Calculation of Proceeds
Exhibit "C -1 "- Interest Earnings produced by Taxes
Exhibit "D" - Exclusions
Resolution No. 7074
I_1
C
EXHIBIT "A"
CITY OF ARCADIA
APPROPRIATIONS LIMIT
FISCAL YEAR 2015 -16
Last Year's Limit (2014 -15)
Adjustment Factors
County of Los Angeles Population Growth
Per Capita Cost of Living converted to a ratio
Total Adjustment
1.0082
1.0382
1.0467
Annual Adjustment (73,141,763 x 1.0467 — 73,141,763)
AMOUNT
$73,141,763
3,415,720
D. FY2015 -16 Limit $76,557,483
EXHIBIT "A -1"
CITY OF ARCADIA
POPULATION /INFLATIONARY ADJUSTMENT
FISCAL YEAR 2015 -16
Percentage Change in Per Capita Personal Income 3.82%
Population Growth — County of Los Angeles 0.82%
Source: Department of Finance, State of California
EXHIBIT "B"
CITY OF ARCADIA
APPROPRIATIONS SUBJECT TO LIMITATION
FISCAL YEAR 2015 -16
A. Proceeds of Taxes Grand Total
B. Exclusions (Medicare Tax)
C. Appropriations Subject to Limitation
D. 2015 -16 Year Limit
E. Over (Under) Limit
AMOUNT SOURCE
$ 43,726,900 Exhibit "C"
( 394,300) Exhibit "D"
43,332,600
76,557,483 Exhibit "A"
($ 33,224,883)
REVENUE
EXHIBIT "C"
CITY OF ARCADIA
CALCULATION OF PROCEEDS
FISCAL YEAR 2015 -16
PROCEEDS
OF TAXES
NON
PROCEEDS
OF TAXES
TOTAL
Property Tax
$ 12,291,000
- $ 12,291,000
Public Safety Augmentation
504,100
- 504,100
Sales & Use Tax
11,969,000
- 11,969,000
Transient Occupancy Tax
3,399,000
- 3,399,000
Property Transfer Tax
544,100
- 544,100
Utility Users Tax
7,023,000
- 7,023,000
Business License Tax
1,250,000
50,000 1,300,000
TOTAL TAXES
$ 36,980,200 $
50,000 $ 37,030,200
FROM STATE
Motor Vehicle In Lieu $ 5,839,000 - $ 5,839,000
Gasoline Tax - $ 1,549,000 1,549,000
Homeowner's Exemption 70,000 - 70,000
POST - 5,000 5,000
SB 90 Reimbursements 40,000 - -
TOTAL FROM STATE $ 5,949,000 $ 1,554,000 $ 7,463,000
OTHER GOVERNMENTS
Community Development (CDBG)
Citizens Options for Public Safety (COPS)
Other (PROP A &C) Taxes
Prop A Park Maint. & Services
Measure R
AQMD (AB2766)
TOTAL OTHER GOVERNMENTS
LOCALLY RAISED
LICENSES AND PERMITS
405,400
100,000
1,894,540
50,000
644,223
70,000
405,400
100,000
1,894,540
50,000
644,223
70,000
$ 3,164,163 $ 3,164,163
Franchise Fee - $ 1,162,200 $ 1,162,200
Parking Permits - 312,000 312,000
Plan Check Fees - 1,200,000 1,200,000
REVENUE
PROCEEDS
OF TAXES
NON
PROCEEDS
OF TAXES
TOTAL
Building Permits
- 1,300,000
1,300,000
Mechanical, Electrial & Plumbing
- 350,000
350,000
Permits
- 1,027,200
1,027,200
Home Occupantion Permits
- 15,000
15,000
Miscellaneous Permits
- 20,000
20,000
Planning Applications
- 350,000
350,000
Fire Plan Check
- 180,000
180,000
Engineering Permit Fees
- 80,000
80,000
Fire Code Permits
- 125,000
125,000
Fire Permit Inspections
- 55,000
55,000
Off -site Improvement
- 25,000
25,000
Water Efficient Landscape
200,000
200,000
Storm Water Plan Check Fees
- 20,000
20,000
SB1473 building Permit
- 500
500
Transportation Impact fees
- 330,000
330,000
Solid Waste Assessments
380,200
380,200
Charges for Current Service
- 2,907,600
2,907,600
Recreation Activities
- 1,062,100
1,062,100
Library Charges
- 70,500
70,500
Rent & Royalty
- 1,271,400
1,271,400
Park /Dwelling Unit Fees
- 1,800,000
1,800,000
TOTAL LICENSES & PERMITS
- $ 13,216,500 $
13,216,500
FINES & PENALTIES
Miscellaneous Fines - $ 65,000 $ 65,000
Parking Citations - 530,000 530,000
Code Enforcement - 10,000 10,000
Fire Citations - 500 500
TOTAL FINES & PENALTIES - $ 605,500 $ 605,500
OTHER REVENUE
Parimutual Receipts $
700,000 - $
700,000
Admin.O /H Transit
- $ 94,700
94,700
Admin. O/H Water
- 1,027,200
1,027,200
Admin. O/H Sewer
- 161,900
161,900
Admin. O/H Lighting District
- 86,800
86,800
Admin. O/H Redevelopment
41,700
41,700
Miscellaneous Receipts
- 80,000
80,000
Court Appearances
- 5,000
5,000
Waste Management Admin. Fees
- 111,700
111,700
TOTAL OTHER REVENUE $
700,000 $ 1,609,000 $
2,309,000
REVENUE
PROCEEDS
OF TAXES
NON
PROCEEDS
OF TAXES
Total Estimated Revenues
Before Revenue from Use of Money $ 43,629,200 $ 20,199,163 $
Revenue Earned from Use of Money
Earned on Non - Proceeds
of Taxes: Funds 107, 118
142, 151, 153 „155, 156, 157, &161
Proceeds of Taxes: Fund 302
General Fund
TOTAL REVENUE EARNED
FROM USE OF MONEY
GRAND TOTAL
- 63,000
TOTAL
63,828,363
63,000
29,300 - 29,300
68,400 31,600 100,000
$ 97,700 $ 94,600 $ 192,300
$ 43,726,900 $ 20,293,763 $ 64,020,663
EXHIBIT "C -1"
CITY OF ARCADIA
INTEREST EARNINGS PRODUCED BY TAXES
FISCAL YEAR 2015 -16
Proceeds of Taxes (Excluding Interest) $43,629,200
Total Revenue (Excluding Interest) $63,828,363
Percent applicable to Proceeds of Taxes (68.4 %)
Total interests budgeted for General Fund $ 100,000
Interest applicable to Proceeds of Taxes (68.4 %) $ 68,400
Interest applicable to Non - Proceeds of Taxes (31.6 %) $ 31,600
Interest directly identified to Funds which revenues are identified
as Non Proceeds of Taxes — Funds 107,118, 142, 151, 155, 156,
157,153, 161 $ 63,000
Interest directly identified to Funds which revenues are identified as
Proceeds of Taxes — Fund 302 $ 29,300
EXHIBIT "D"
CITY OF ARCADIA
EXCLUSIONS
FISCAL YEAR 2015 -16
FEDERAL MANDATED COSTS:
Medicare Tax $394,300
RESOLUTION NO. 7074
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, ESTABLISHING AN
APPROPRIATIONS LIMIT FOR FISCAL YEAR 2015 -2016
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 1975 -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 Los Angeles County,
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 2015 -16 for the City of
Arcadia shall be and is hereby set in the amount of $76,557,483.
SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
Passed, approved and adopted this day of 2015.
ATTEST:
City Clerk
APPROVED AS TO FORM:
a
Stephen P. Deitsch
City Attorney
Mayor of the City of Arcadia