HomeMy WebLinkAboutItem 12g - Establishing an Appropriation Limit for FY2022-23DATE: June 7, 2022
TO: Honorable Mayor and City Council
FROM: Hue C. Quach, Administrative Services Director
Henry Chen, Financial Services Manager/Treasurer
SUBJECT: RESOLUTION NO. 7450 ESTABLISHING AN APPROPRIATION LIMIT
FOR FISCAL YEAR 2022-2023 PURSUANT TO ARTICLE XIII-B OF THE
CALIFORNIA CONSTITUTION
Recommendation: Adopt
SUMMARY
Article XIII-B of the California 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 (“City”) to establish the Limit by resolution. As
calculated, the City’s proposed expenditures subject to the limit are $61,418,270 versus
a limit of $108,019,236, meaning that the City is under the GANN Limit by $46,600,966.
It is recommended that the City Council adopt Resolution No. 7450 establishing the
annual adjustment factors and the resultant Limit for Fiscal Year 2022-23.
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 funds restricted for certain
purposes – such as State Gas Tax, the costs of complying with Court orders, and
Federal mandates – 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. 7450 Establishing an Appropriation Limit for
Fiscal Year 2022-2023
June 7, 2022
Page 2 of 3
County Assessor. Thus, the change of California Per Capita Income at 7.55% 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 -0.71%; the City’s population
growth rate was -0.54% in 2022. As a result, the City has chosen to use the City’s
growth factor for FY2022-23’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, 2023. As calculated, the City’s Proceeds of Taxes Before Exclusions is established
at $61,961,670 (Exhibit “C”), and the FY2022-23 Appropriation Limit is $108,019,236
(Exhibit “A”). Exhibit “B” shows that the City of Arcadia is under the Appropriation Limit
by $46,600,966.
ENVIRONMENTAL ANALYSIS
This 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. Thus, this matter is exempt under CEQA.
FISCAL IMPACT
The GANN Limit for the City of Arcadia in FY 2022-23 is established at $108,019,236.
The appropriations subjected to the limit in the annual budget are $61,418,270, which
are well within the Limit. Therefore, the City may fully expend all funds appropriated in
the FY 2022-23 Budget and has room for additional appropriations during the year as
necessary.
RECOMMENDATION
It is recommended that the City Council determine that this action does not constitute a
project and is therefore, exempt under, the California Environmental Quality Act
(“CEQA”); and adopt Resolution No. 7450 establishing an Appropriation Limit of
$108,019,236 for Fiscal Year 2022-23 pursuant to Article III-B of the California
Constitution.
Resolution No. 7450 Establishing an Appropriation Limit for
Fiscal Year 2022-2023
June 7, 2022
Page 3 of 3
Attachments: Exhibit “A” - Appropriation Limit for Fiscal Year 2022-2023
Exhibit “A-1” - Population/Inflationary Adjustment
Exhibit “B” - Appropriations Subject to Limitation
Exhibit “C” - Calculation of Proceeds
Exhibit “C-1” - Interest Earnings produced by Taxes
Exhibit “D” - Exclusions
Resolution No. 7450
EXHIBIT "A"
AMOUNT
A. LAST YEAR'S LIMIT (2021‐2022)100,980,870$
B. ADJUSTMENT FACTORS:
CITY OF ARCADIA POPULATION GROWTH 0.9946
PER CAPITA COST OF LIVING CHANGE AS A RATIO 1.0755
TOTAL ADJUSTMENT 1.0697
C. ANNUAL ADJUSTMENT 7,038,367
D. FISCAL 2022‐2023 LIMIT 108,019,236$
CITY OF ARCADIA
APPROPRIATIONS LIMIT
FISCAL YEAR 2022‐2023
AMOUNT
PERCENTAGE CHANGE IN PER CAPITA PERSONAL INCOME 7.55%
POPULATION GROWTH ‐ LOS ANGELES COUNTY ‐0.71%
POPULATION GROWTH ‐ CITY OF ARCADIA ‐0.54%
SOURCE: DEPARTMENT OF FINANCE, STATE OF CALIFORNIA
EXHIBIT "A‐1"
CITY OF ARCADIA
POPULATION/COST OF LIVING ADJUSTMENT
FISCAL YEAR 2022‐2023
EXHIBIT "B"
AMOUNT SOURCE
A. PROCEEDS OF TAXES GRAND TOTAL 61,961,670$ EXHIBIT C
B. EXCLUSIONS (MEDICARE TAX)(543,400) EXHIBIT D
C. APPROPRIATIONS SUBJECT TO LIMITATION 61,418,270$
D. FISCAL 2022‐2023 LIMIT 108,019,236 EXHIBIT A
E. OVER/(UNDER) LIMIT (46,600,966)$
CITY OF ARCADIA
APPROPRIATIONS SUBJECT TO LIMITATION
FISCAL YEAR 2022‐2023
EXHIBIT "C"
REVENUE PROCEEDS OF
TAXES
NON
PROCEEDS OF
TAXES
TOTAL
Property Tax 18,694,800$ ‐$ 18,694,800$
Public Safety Augmentation 564,400 ‐ 564,400
Sales & Use Tax 20,268,900 ‐ 20,268,900
Transient Occupancy Tax 3,899,400 ‐ 3,899,400
Property Transfer Tax 638,400 ‐ 638,400
Utility Users Tax 7,538,500 ‐ 7,538,500
Business License Tax 1,180,000 50,000 1,230,000
TOTAL TAXES 52,784,400$ 50,000$ 52,834,400$
FROM STATE
Motor Vehicle In Lieu 8,607,700$ ‐$ 8,607,700$
Gasoline Tax ‐1,667,400 1,667,400
Road Maint./Rehabilitation (SB1)‐1,314,300 1,314,300
Homeowner's Exemption 76,100 ‐ 76,100
POST ‐10,000 10,000
SB 90 Reimbursements ‐ ‐ ‐
TOTAL FROM STATE 8,683,800$ 2,991,700$ 11,675,500$
OTHER GOVERNMENTS
Community Development (CDBG)‐$ ‐$ ‐$
Citizens Options for Public Safety ‐ 170,000 170,000
Homeland Security ‐ ‐ ‐
OTS Grant ‐ 96,500 96,500
Other (PROP A&C) Taxes ‐ 2,572,800 2,572,800
Prop A Park Maint. & Services ‐ ‐ ‐
Measure R ‐ 875,000 875,000
Measure M ‐ 991,800 991,800
Used Oil Grant ‐ 15,500 15,500
Beverage Container Recycling Grant ‐ 14,500 14,500
AQMD (AB2766)‐ 74,500 74,500
TOTAL OTHER GOVERNMENTS ‐$ 4,810,600$ 4,810,600$
CITY OF ARCADIA
CALCULATIONS OF PROCEEDS
FISCAL YEAR 2022‐2023
EXHIBIT C
REVENUE PROCEEDS OF
TAXES
NON
PROCEEDS OF
TAXES
TOTAL
CITY OF ARCADIA
CALCULATIONS OF PROCEEDS
FISCAL YEAR 2022‐2023
LOCALLY RAISED
LICENSES AND PERMITS
Franchise Fee ‐$ 1,007,300$ 1,007,300$
Parking Permits ‐ 598,400 598,400
Plan Check Fees ‐ 1,050,000 1,050,000
Building Permits ‐ 1,200,000 1,200,000
Mechanical, Electrical & Plumbing ‐ 300,000 300,000
Home Occupation Permits ‐ 8,300 8,300
Miscellaneous Permits ‐ 7,000 7,000
Planning Applications ‐ 348,000 348,000
Fire Plan Check ‐ 200,000 200,000
Engineering Permit Fees ‐ 140,000 140,000
Fire Code Permits ‐ 60,000 60,000
Fire Permit Inspections ‐ 140,000 140,000
Off‐site Improvement ‐ 10,000 10,000
Water Efficient Landscape ‐ 90,000 90,000
Technology Fee ‐ 130,000 130,000
Unoccupied Residences ‐ ‐ ‐
Storm Water Plan Check Fees ‐ 16,000 16,000
SB1473 building Permit ‐ 300 300
PEG ‐ 80,000 80,000
Charges for Current Service ‐ 3,471,400 3,471,400
Recreation Activities ‐ 1,325,100 1,325,100
Library Charges ‐ 84,700 84,700
Rent & Royalty ‐ 1,359,200 1,359,200
Transportation Impact fees ‐ 300,000 300,000
Solid Waste Assessments ‐ 570,000 570,000
Park/Dwelling Unit Fees ‐ 1,400,000 1,400,000
TOTAL LICENSES & PERMITS ‐$ 13,895,700$ 13,895,700$
EXHIBIT C
REVENUE PROCEEDS OF
TAXES
NON
PROCEEDS OF
TAXES
TOTAL
CITY OF ARCADIA
CALCULATIONS OF PROCEEDS
FISCAL YEAR 2022‐2023
FINES & PENALTIES
Miscellaneous Fines ‐$ 15,000$ 15,000$
Parking Citations ‐ 370,000 370,000
Code Violations ‐ 18,000 18,000
Fire Citations ‐ 500 500
TOTAL FINES & PENALTIES ‐$ 403,500$ 403,500$
OTHER REVENUE
Parimutual Receipts 400,000$ ‐$ 400,000$
Admin. O/H Transit ‐ 129,400 129,400
Admin. O/H Water ‐ 1,396,500 1,396,500
Admin. O/H Sewer ‐ 264,000 264,000
Admin. O/H Lighting District ‐ 112,700 112,700
Admin. O/H Redevelopment ‐ ‐ ‐
Court Appearances ‐ 5,000 5,000
Waste Management Admin. Fees ‐ 130,000 130,000
TOTAL OTHER REVENUE 400,000$ 2,037,600$ 2,437,600$
Total Estimated Revenues
Before Revenue from Use of Money 61,868,200$ 24,189,100$ 86,057,300$
Revenue Earned from Use of Money
Earned on Non ‐Proceeds ‐$ 176,000$ 176,000$
of Taxes: Funds 104, 107, 112, 114, 118
142, 151, 153, 155, 156, 157, 161, 165
Proceeds of Taxes: Fund 302 ‐ ‐ ‐
General Fund 93,470 36,530 130,000
TOTAL REVENUE EARNED
FROM USE OF MONEY 93,470$ 212,530$ 306,000$
GRAND TOTAL 61,961,670$ 24,401,630$ 86,363,300$
EXHIBIT "C‐1"
AMOUNT
PROCEEDS OF TAXES (EXCLUDING INTEREST)61,868,200$
TOTAL REVENUE (EXCLUDING INTEREST)86,057,300$
PERCENT APPLICABLE TO PROCEEDS OF TAXES 71.90%
TOTAL INTEREST BUDGETED FOR GENERAL FUND 130,000$
INTEREST APPLICABLE TO PROCEEDS OF TAXES 71.90%93,470$
INTEREST APPLICABLE TO NON‐PROCEEDS OF TAXES 28.10%36,530$
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, 165 176,000$
INTEREST DIRECTLY IDENTIFIED TO FUNDS WHICH REVENUES ARE IDENTIFIED AS
PROCEEDS OF TAXES ‐ FUND 302 ‐$
CITY OF ARCADIA
INTEREST EARNINGS PRODUCED BY TAXES
FISCAL YEAR 2022‐2023
EXHIBIT "D"
FEDERAL MANDATED COSTS:
MEDICARE TAX 543,400$
CITY OF ARCADIA
EXCLUSIONS
FISCAL YEAR 2022‐2023