HomeMy WebLinkAboutItem 11c -Establishing an Appropriation Limit for Fiscal Year 2020-21DATE: June 16, 2020
TO: Honorable Mayor and City Council
FROM: Hue C. Quach, Administrative Services Director
Henry Chen, Financial Services Manager/Treasurer
SUBJECT: RESOLUTION NO. 7314 ESTABLISHING AN APPROPRIATION LIMIT
FOR FISCAL YEAR 2020-21 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 of Arcadia to establish the Limit by resolution. As calculated, the
City’s expenditures subject to the limit are $52,547,208 versus a limit of $95,780,015,
meaning that the City is under the GANN Limit by $43,232,807. It is recommended that
the City Council adopt Resolution No. 7314 establishing the annual adjustment factors
and the resultant Limit for Fiscal Year 2020-21.
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.
Resolution No. 7314 Establishing an Appropriation Limit for
Fiscal Year 2020-21
June 16, 2020
Page 2 of 3
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 3.73% has been
used as the inflationary adjustment factor in the calculation of the 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 of Los Angeles (County)
or the City. In the County, the population growth rate was -0.11%; the City’s population
growth rate was -0.09% in 2019. As a result, the City has chosen to use the City’s
growth factor for FY 20-21’s GANN Limit calculation.
The attached Exhibits “A”, “A-1”, “B”, “C”, “C-1”, and “D”, demonstrate the City’s
compliance with Article XIII-B of the State Constitution for the Fiscal Year ending June
30, 2021. As calculated, the City’s Proceeds of Taxes Before Exclusions is established
at $53,040,708 (Exhibit “C”), and the FY2020-21 Appropriation Limit is $95,780,015
(Exhibit “A”). Exhibit “B” shows that the City of Arcadia is under the Appropriation Limit
by $43,232,807.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental
Quality Act (“CEQA”), and it can be seen with certainty that it will have no impact on the
environment. Therefore, this matter is exempt under CEQA.
FISCAL IMPACT
The GANN Limit for the City of Arcadia in FY 2020-21 is established at $95,780,015.
The appropriations subjected to the limit in the annual budget are $52,547,208, which
are well within the Limit. Therefore, the City may fully expend all funds appropriated in
the FY 2020-21 Budget and has room for additional appropriations during the year as
necessary.
RECOMMENDATION
It is recommended that the City Council determine that this project is except under the
California Environmental Quality Act (“CEQA”); adopt Resolution No. 7314 establishing
an Appropriation Limit for Fiscal Year 2020-21 pursuant to Article III-B of the California
Constitution.
Resolution No. 7314 Establishing an Appropriation Limit for
Fiscal Year 2020-21
June 16, 2020
Page 3 of 3
Attachments: Exhibit “A” - Appropriation Limit for Fiscal Year 2020-21
Exhibit “A-1” - Population/Inflationary Adjustment
Exhibit “B” - Appropriations Subject to Limitation
Exhibit “C” - Calculation of Proceeds
Exhibit “C-1” - Interest Earnings produced by Taxes
Exhibit “D” - Exclusions
Resolution No. 7314
EXHIBIT A
AMOUNT
A. LAST YEAR'S LIMIT (2019-20)92,416,070$
B. ADJUSTMENT FACTORS:
CITY OF ARCADIA POPULATION GROWTH 0.9991
PER CAPITA COST OF LIVING CHANGE AS A RATIO 1.0373
TOTAL ADJUSTMENT 1.0364
C. ANNUAL ADJUSTMENT 3,363,945
D. FISCAL 2020-21 LIMIT 95,780,015$
CITY OF ARCADIA
APPROPRIATIONS LIMIT
FISCAL YEAR 2020-21
EXHIBIT A-1
AMOUNT
PERCENTAGE CHANGE IN PER CAPITA PERSONAL INCOME 3.73%
POPULATION GROWTH - LOS ANGELES COUNTY -0.11%
POPULATION GROWTH - CITY OF ARCADIA -0.09%
SOURCE: DEPARTMENT OF FINANCE, STATE OF CALIFORNIA
CITY OF ARCADIA
POPULATION/COST OF LIVING ADJUSTMENT
FISCAL YEAR 2020-21
EXHIBIT B
AMOUNT SOURCE
A. PROCEEDS OF TAXES GRAND TOTAL 53,040,708$ EXHIBIT C
B. EXCLUSIONS (MEDICARE TAX)(493,500) EXHIBIT D
C. APPROPRIATIONS SUBJECT TO LIMITATION 52,547,208$
D. FISCAL 2020-21 LIMIT 95,780,015 EXHIBIT A
E. OVER/(UNDER) LIMIT (43,232,807)$
CITY OF ARCADIA
APPROPRIATIONS SUBJECT TO LIMITATION
FISCAL YEAR 2020-21
EXHIBIT C
REVENUE PROCEEDS OF
TAXES
NON
PROCEEDS OF
TAXES
TOTAL
Property Tax 16,968,000$ -$ 16,968,000$
Public Safety Augmentation 577,600 - 577,600
Sales & Use Tax 15,499,900 - 15,499,900
Transient Occupancy Tax 2,865,900 - 2,865,900
Property Transfer Tax 512,500 - 512,500
Utility Users Tax 6,638,000 - 6,638,000
Business License Tax 1,250,000 50,000 1,300,000
TOTAL TAXES 44,311,900$ 50,000$ 44,361,900$
FROM STATE
Motor Vehicle In Lieu 7,967,800$ -$ 7,967,800$
Gasoline Tax - 1,466,500 1,466,500
Road Maint./Rehabilitation (SB1) - 1,084,000 1,084,000
Homeowner's Exemption 79,000 - 79,000
POST - 15,000 15,000
SB 90 Reimbursements 20,000 - 20,000
TOTAL FROM STATE 8,066,800$ 2,565,500$ 10,632,300$
OTHER GOVERNMENTS
Community Development (CDBG) -$ 304,800$ 304,800$
Citizens Options for Public Safety - 166,600 166,600
Homeland Security - 10,000 10,000
OTS Grant - 73,800 73,800
Other (PROP A&C) Taxes - 2,277,000 2,277,000
Prop A Park Maint. & Services - - -
Measure R - 772,000 772,000
Measure M - 875,000 875,000
Used Oil Grant - 15,500 15,500
Beverage Container Recycling Grant - 14,500 14,500
AQMD (AB2766) - 74,300 74,300
TOTAL OTHER GOVERNMENTS -$ 4,583,500$ 4,583,500$
CITY OF ARCADIA
CALCULATIONS OF PROCEEDS
FISCAL YEAR 2020-21
EXHIBIT C
REVENUE PROCEEDS OF
TAXES
NON
PROCEEDS OF
TAXES
TOTAL
CITY OF ARCADIA
CALCULATIONS OF PROCEEDS
FISCAL YEAR 2020-21
LOCALLY RAISED
LICENSES AND PERMITS
Franchise Fee -$ 900,000$ 900,000$
Parking Permits - 598,400 598,400
Plan Check Fees - 750,000 750,000
Building Permits - 900,000 900,000
Mechanical, Electrical & Plumbing Permits - 350,000 350,000
Home Occupation Permits - 9,500 9,500
Miscellaneous Permits - 10,000 10,000
Planning Applications - 250,000 250,000
Fire Plan Check - 250,000 250,000
Engineering Permit Fees - 130,000 130,000
Fire Code Permits - 140,000 140,000
Fire Permit Inspections - 80,000 80,000
Off-site Improvement - 15,000 15,000
Water Efficient Landscape - 115,000 115,000
Commercial Storm Water Inspection - - -
Storm Water Plan Check Fees - 18,000 18,000
SB1473 building Permit - 300 300
PEG - - -
Charges for Current Service - 3,284,200 3,284,200
Recreation Activities - 747,700 747,700
Library Charges - 84,900 84,900
Rent & Royalty - 1,356,600 1,356,600
Transportation Impact fees - 300,000 300,000
Solid Waste Assessments - 550,000 550,000
Park/Dwelling Unit Fees - 750,000 750,000
TOTAL LICENSES & PERMITS -$ 11,589,600$ 11,589,600$
EXHIBIT C
REVENUE PROCEEDS OF
TAXES
NON
PROCEEDS OF
TAXES
TOTAL
CITY OF ARCADIA
CALCULATIONS OF PROCEEDS
FISCAL YEAR 2020-21
FINES & PENALTIES
Miscellaneous Fines -$ 50,000$ 50,000$
Parking Citations - 450,000 450,000
Code Violations - 28,000 28,000
Fire Citations - 500 500
TOTAL FINES & PENALTIES -$ 528,500$ 528,500$
OTHER REVENUE
Parimutual Receipts 500,000$ -$ 500,000$
Admin. O/H Transit - 123,100 123,100
Admin. O/H Water - 1,329,200 1,329,200
Admin. O/H Sewer - 251,300 251,300
Admin. O/H Lighting District - 107,300 107,300
Admin. O/H Redevelopment - 23,700 23,700
Court Appearances - 5,000 5,000
Waste Management Admin. Fees - 119,000 119,000
TOTAL OTHER REVENUE 500,000$ 1,958,600$ 2,458,600$
Total Estimated Revenues
Before Revenue from Use of Money 52,878,700$ 21,275,700$ 74,154,400$
Revenue Earned from Use of Money
Earned on Non-Proceeds -$ 117,600$ 117,600$
of Taxes: Funds 104, 107, 112, 114, 118
142, 151, 153, 155, 156, 157, 161, 165
Proceeds of Taxes: Fund 302 79,300 - 79,300
General Fund 82,708 33,292 116,000
TOTAL REVENUE EARNED
FROM USE OF MONEY 162,008$ 150,892$ 312,900$
GRAND TOTAL 53,040,708$ 21,426,592$ 74,467,300$
EXHIBIT C-1
AMOUNT
PROCEEDS OF TAXES (EXCLUDING INTEREST)52,878,700$
TOTAL REVENUE (EXCLUDING INTEREST)74,154,400$
PERCENT APPLICABLE TO PROCEEDS OF TAXES 71.30%
TOTAL INTEREST BUDGETED FOR GENERAL FUND 116,000$
INTEREST APPLICABLE TO PROCEEDS OF TAXES 71.30%82,708$
INTEREST APPLICABLE TO NON-PROCEEDS OF TAXES 28.70%33,292$
INTEREST DRIECTLY IDENTIFIED TO THE FUNDS WHICH REVENUES ARE IDENTIFIED AS NON
PROCEEDS OF TAXES - FUND 104, 107, 112, 114, 118, 142, 151, 153, 155, 156, 157, 161, 165 117,600$
INTEREST DIRECTLY IDENTIFIED TO FUNDS WHICH REVENUES ARE IDENTIFIED AS
PROCEEDS OF TAXES - FUND 302 79,300$
CITY OF ARCADIA
INTEREST EARNINGS PRODUCED BY TAXES
FISCAL YEAR 2020-21
EXHIBIT D
FEDERAL MANDATED COSTS:
MEDICARE TAX 493,500$
CITY OF ARCADIA
EXCLUSIONS
FISCAL YEAR 2020-21