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HomeMy WebLinkAboutItem 1j: Resolution 6701 Amending Appropriation Limit for Fiscal Year 2009-2010DATE: November 3, 2009 TO: Mayor and City Council FROM: Hue C. Quach, Administrative Services Director Prepared by: Shannon Huang, Financial Services nager/Treasurer SUBJECT: Resolution No. 6701 Amending the Appropriation Limit for fiscal year 2009 -2010 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. Council adopted resolution 6683 and established FY2009 -10 appropriation limit on June 16, 2009. The appropriation limit was mis- calculated due to an incorrect population factor used, therefore, a revision to the appropriation limit is required. The City's current year appropriation will still be more than $32 million under the appropriation limit after the revision. It is recommended that the City Council approve a resolution establishing the revised annual adjustment factors and the resultant Limit for fiscal year 2009 -2010. BACKGROUND 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, which can be spent by City Government. Proposition 4 became effective for the 1980 -81 fiscal year, but the formula for calculating the Limit was based on the 1978 -79 "base year" revenues. In June 1990, the voters of California approved Proposition 111, which, among other things, provides new adjustment formulas that make the Appropriation Limit more responsive to local growth issues. Proposition 111 also implemented a requirement for an annual review of the Limit calculation. 1 STAFF REPORT Administrative Services Department DISCUSSION The Appropriation Limitation imposed by Propositions 4 and 111 creates a restriction on the amount of revenue, which can be appropriated in any fiscal year. The Limit is based on actual City appropriations during the 1978 -79 fiscal year, and is increased each year using the growth of population and inflation. Beginning with the 1990 -91 Fiscal Year, and as a result of the passage of Proposition 111, the annual adjustment factor in computing the limit has changed. Instead of using the change in the California Per Capita Income or U.S. Consumer Price Index to measure inflation, each City may now 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. The second factor and an important change authorized by the passage of Proposition 111 is, instead of using only the population growth of the City, the City may choose to use the population within the County of Los Angeles. Factors used for the 2009 -2010 fiscal year GANN Limit are the population growth of the City of Arcadia at 1.0067 and the California per capita personal income factor of 1.0062. The population growth factor used previously for the GANN calculation was 1.0111. The rate was neither the County's nor the City's population growth rate. Therefore, a recalculation to the GANN limit is necessary by using the City's population growth factor of 1.0067. 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, 2010. As calculated, the City's Proceeds of Taxes net of exclusions is established at $33,241,136 (Exhibit C). The 2009 -2010 Appropriation Limit is $65,429,264 (Exhibit A). Exhibit B shows that the City of Arcadia is under the appropriation limit by 32,188,128. RECOMMENDATION Adopt Resolution No. 6701, a Resolution of the City Council of the City of Arcadia, California, amending the appropriations limit for the fiscal year 2009- 2010 pursuant to Article III -B of the California Constitution. Approved: ci Donald Penman, City Manager CITY OF ARCADIA APPROPRIATIONS LIMIT FISCAL YEAR 2009 -2010 A. Last Year's Limit (2008 -2009) $64,595,976 B. Adjustment Factors 1. Population 1.0067 2. Per Capita 1.0062 Total Adjustment (1.0062 x 1.0067) 1.0129 C. Annual Adjustment (64,595,976 x 1.0129 64,595,976) 833,288 D. 2009 -2010 Limit $65,429,264 3 EXHIBIT "A" AMOUNT CITY OF ARCADIA POPULATION /INFLATIONARY ADJUSTMENT FISCAL YEAR 2009 -2010 PER CAPITA INFLATIONARY ADJUSTMENT POPULATION GROWTH CITY OF ARCADIA SOURCE: DEPARTMENT OF FINANCE, STATE OF CALIFORNIA 4 EXHIBIT "A -1" 0.62% 1.0067 CITY OF ARCADIA APPROPRIATIONS SUBJECT TO LIMITATION FISCAL YEAR 2009 -2010 A. Proceeds of Taxes 33,570,276 B. Exclusions 329,140) C. Appropriations Subject to Limitation 33,241,136 D. 2009 -2010 Year Limit 65,429,264 E. Over (Under) Limit 32,188,128) 5 AMOUNT SOURCE Exhibit "C" Exhibit "D" Exhibit "A" EXHIBIT "B" REVENUE Property Tax Sales Use Tax Transient Occupancy Tax Property Transfer Tax Utility Users Tax Business License Tax TOTAL TAXES FROM STATE Motor Vehicle In Lieu Gasoline Tax Homeowner's Exemption POST SB 90 Reimbursements STC Program TOTAL FROM STATE OTHER GOVERNMENTS Charges to ARA Community Development (CDBG) Other (PROP A &C) Taxes PROP A Park Maint. Services AQMD (AB2766) TOTAL OTHER GOVERNMENTS LOCALLY RAISED LICENSES AND PERMITS Franchise Fee Parking Permits Plan Check Fees Building Permits Mechanical, Electrial Plumbing Permits CITY OF ARCADIA CALCULATION OF PROCEEDS FISCAL YEAR 2009 -2010 PROCEEDS OF TAXES 4,526,000 6 50,000 NON PROCEEDS OF TAXES 9,492,000 9,189,000 2,495,000 216,000 5,300,000 896,580 50,000 27,588,580 50,000 27,638,580 1,448,000 20,000 1,100,000 275,000 535,000 680,000 163,000 EXHIBIT "C" TOTAL 9,492,000 9,189, 000 2,495,000 216,000 5,300,000 946,580 4,526,000 1,448,000 50,000 20,000 4,576,000 1,468,000 6,044,000 239,060 239,060 481,620 481,620 1,461,000 1,461,000 20,000 20,000 65,000 65,000 2,266,680 2,266,680 1,100, 000 275,000 535,000 680,000 163,000 REVENUE Home Occupantion Permits Miscellaneous Permits Planning Applications Fire Plan Check Engineering Permit Fees Fire Code Permits Fire Permit Inspections Storm Water Plan Check Fees Transpaction Impact fees Solid Waste Assessments Charges for Current Service Recreation Activities Library Charges Rent Royalty Park/Dwelling Unit Fees TOTAL LICENSES PERMITS FINES PENALTIES Miscellaneous Fines Parking Citations Code Enforcement Fire Citations TOTAL FINES PENALTIES OTHER REVENUE Total Estimated Revenues Before Revenue from Use of Money PROCEEDS OF TAXES 7 Parimutual Receipts 1,100,000 Admin. O/H Transit Admin. O/H Water Admin. O/H Solid Waste Admin. O/H Sewer Admin. O/H Prop A Admin. O/H Prop C Admin. Parking District Miscellaneous Receipts Court Appearances Sale of Property Waste Management Administration TOTAL OTHER REVENUE 1,100,000 NON PROCEEDS OF TAXES 13,000 7,000 170,000 135,000 20,000 95,000 43,000 5,000 166,000 345,000 2,288,100 824,480 91,820 1,152,000 280,000 8,388,400 50,000 430,000 5,000 10,000 495,000 TOTAL 13,000 7,000 170,000 135,000 20,000 95,000 43,000 5,000 166,000 345,000 2,288,100 824,480 91,820 1,152, 000. 280,000 8,388,400 50,000 430,000 5,000 10,000 495,000 1,100,000 157,960 157,960 1,124, 960 1,124, 960 157,960 157,960 80,880 80,880 19,440 19,440 18,050 18,050 3,290 3,290 46,860 46,860 3,000 3,000 20,000 20,000 100,000 100,000 1,732,400 2,832,400 33,264,580 14,400,480 47,665,060 REVENUE PROCEEDS OF TAXES NON PROCEEDS TOTAL OF TAXES Revenue Earned from Use of Money Earned on Non Proceeds 286,000 286,000 of Taxes: Funds 107, 118 142, 151, 155, 157 521,153 Proceeds of Taxes: Fund 302 60;000 60,000 General Fund 245,696 106,304 352,000 TOTAL REVENUE EARNED FROM USE 305,696 392,304 698,000 GRAND TOTAL 33,570,276 14,792,784 48,363,060 8 CITY OF ARCADIA INTEREST EARNINGS PRODUCED BY TAXES FISCAL YEAR 2009 -2010 PROCEEDS OF TAXES (EXCLUDING INTEREST) $33,264,580 TOTAL REVENUE (EXCLUDING INTEREST) $47,665,060 PERCENT APPLICABLE TO PROCEEDS OF TAXES (69.8 TOTAL INTEREST GENERAL FUND 352,000 INTEREST APPLICABLE TO PROCEEDS OF TAXES (69.8 245,696 INTEREST APPLICABLE TO NON PROCEEDS OF TAXES (30.2 106,304 INTEREST DIRECTLY IDENTIFIED TO FUNDS WHICH REVENUES ARE IDENTIFIED AS NON PROCEEDS OF TAXES FUNDS 107, 118,142, 151, 155, 157, 521,153, 286,000 9 Exhibit "C -1" INTEREST DIRECTLY IDENTIFIED TO FUNDS WHICH REVENUES IDENTIFIED AS PROCEEDS OF TAXES FUND 302 60,000 FEDERAL MANDATED COSTS: CITY OF ARCADIA EXCLUSIONS FISCAL YEAR 2009 -2010 MEDICARE $329,140 10 EXHIBIT "D" RESOLUTION NO. 6701 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, ESTABLISHING A REVISED APPROPRIATIONS LIMIT FOR FISCAL YEAR 2009 -2010 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 City of Arcadia in lieu of the growth in the population of the County of Los Angeles; 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 2009 -2010 for the City of Arcadia shall be and is hereby set in the amount of $65,429,264. SECTION 2. The City Clerk shall certify to the adoption of this Resolution. ATTEST: City Clerk Passed, approved and adopted this APPROVED AS TO FORM: 0 Stephen P. Deitsch City Attorney 2 day of 2009. Mayor of the City of Arcadia