HomeMy Public PortalAbout13) 8B Adoption of Resolution 14-4997 Confirming the factors used for calculating the annual appropriations Limit for FY 2014-15DATE:
TO:
FROM:
SUBJECT:
AGENDA
ITEM 8.8.
ADMINISTRATIVE SERVICES DEPARTMENT
MEMORANDUM
June 3, 2014
The Honorable City Council
Donald E Penman, Interim City Manager~
By: Tracey L. Hause, Administrative Services Director
PUBLIC HEARING -ADOPTION OF RESOLUTION NO. 14-4997
CONFIRMING THE FACTORS USED FOR CALCULATING THE ANNUAL
APPROPRIATIONS LIMIT FOR THE FISCAL YEAR (FY) 2014-15
RECOMMENDATION:
It is recommended that the City Council adopt Resolution No. 14-4997 (Attachment "A"), a
Resolution confirming the factors used for calculating the annual Appropriations Limit
(Limit) for FY 2014-15.
BACKGROUND:
1. In November 1979, Proposition 4 was approved by the voters adding Article XIIIB,
also known as the Gann Limitation, to the State Constitution to insure that limits
were placed on all state and local government appropriations. These
appropriations calculations must be approved by the City Council on an annual
basis.
2. In 1980, the State Legislature added Section 9710 of the Government Code stating
that the governing body of each City must establish, by resolution, an
appropriations limit for the following year.
3. In June 1990, the voters of California approved Proposition 111 which revised the
annual adjustment factors applied to the 1986-87 Limit and each year thereafter.
4. On May 15 and May 19, 2014, Notice of the Public Hearing to establish the Limit
subject to the California Constitution was published in the Temple City Tribune.
ANALYSIS:
Article XIII-B provides limits to the amount of tax proceeds state and local governments
can spend each year. The limit for any fiscal year is equal to the previous year's limit,
City Council
June 3, 2014
Page 2 of 2
adjusted for population changes and the change in the U.S. Consumer Price Index or
California per capital personal income, whichever is less. Staff has complied with all the
provisions of Article XIIIB in determining the Limit for FY 2013-14, and the City Council
is required to confirm all factors used for calculating the Limit by adoption of a
resolution. For FY 2014-15, the California Per Capita Income and the population
growth of the County were applied to the FY 2013-14 Limit. A Resolution (Attachment
"A") confirming the factors used for calculating the annual Limit and the calculations
(Attachment "B") determining of the Limit are included in this report. The City of Temple
City's Limit for FY 2014-15 is $17,391,335. The appropriations subject to the Limit per
the Proposed FY 2014-15 City Budget is $8,708,475. The City of Temple City is
$8,682,860 below the Limit.
CONCLUSION:
In order to be in compliance with California State law, City Council adoption of
Resolution 14-4997 is necessary at this time.
FISCAL IMPACT:
Adoption of this Resolution does not have an impact on the FY 2014-15 City Budget.
ATTACHMENT:
A. Resolution 14-4997
ATTACHMENT A
RESOLUTION NO. 14-4997
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMPLE
CITY, CALIFORNIA CONFIRMING THE FACTORS USED FOR
CALCULATING THE ANNUAL APPROPRIATIONS LIMIT FOR THE
FISCAL YEAR (FY) 2014-2015
WHEREAS, the voters of California in November, 1979 added Article XIIIB (Proposition 4) to the
State Constitution placing various limitations on the appropriations of the State and local governments; and
WHEREAS, the voters of California in June, 1990 modified Article XIIIB by approving Proposition
111 and SB 88 (Chapter 60/90) which revised the annual adjustment factors to be applied to the 1986-87
Limit and each year thereafter; and
WHEREAS, the decision as to which of the factors: a) either the California Per Capita Income or
the percentage change in the local assessment roll from the preceding year due to the addition of local non-
residential construction in the city; and b) either the city's own population grow1h or the entire county; must
be done by a recorded vote of the City Council; and
WHEREAS, the City of Temple City has complied with all the provisions of Article XIIIB in
determining the Appropriations Limit for FY 2014-15.
NOW, THEREFORE, the City Council of the City of Temple City does resolve, determine and order
as follows:
SECTION 1. The adjustment factors (the California Per Capita Income and the population grow1h
of the County) are to be applied to the FY 2013-14 Limit.
SECTION 2. The accumulated grow1h in the calculation of these new factors are to be applied to
the Appropriations Limit in FY 2013-14.
SECTION 3. The Appropriations Limit for FY 2014-15 shall be $17,391,335 for the City of Temple
City as determined by Exhibit 1, attached hereto.
SECTION 4. The City Clerk shall certify to the adoption of this resolution.
APPROVED AND ADOPTED this 3rd day of June, 2014
MAYOR
ATTEST APPROVED AS TO FORM:
City Clerk City Attorney
EXHIBIT 1
ARTICLE XI li-B OF THE CALIFORNIA CONSTITUTION IGANN INITIATIVE)
Effective July 1, 1980, Proposition 4 (Gann) put a limit on the City's expenditures from tax revenues
based on 1978-79 appropriations that is adjusted each succeeding year by Consumer Price Index
and population changes. Non-Proceeds of Taxes (Fines and Forfeitures and User Fees) were not
subject to this limit.
In 1989-90 Proposition 111 was passed, which changed the base year to 1986-87 and allows cities
to adjust their limit annually by either the change in the California per capita income or the percentage
change in growth in total assessed valuation due to non residential construction. For population
changes, cities now have the option of using either the percentage increase of the City or the
percentage increase of the entire county. The law also allows for the exclusion from the limit of
"qualified capital outlay" which includes any appropriation for fixed assets costing over $100,000.
The 2014-2015 budget expenditures are well within the statutory limit.
It should be noted that future revenues exceeding the limitation require a return of the excess to the
taxpayers or a substantial portion of such excess will be forfeited for State uses.
COMPUTATION OF APPROPRIATIONS LIMIT
2014-2015 APPROPRIATIONS LIMIT
2013-141imit (1)
Per Capita Income and County population change
factor applied to 2013-14 appropriations limit
2014-2015 appropriations limit
APPROPRIATIONS SUBJECT TO LIMIT AND APPROPRIATIONS MARGIN
Proceeds ofT axes
Less Exclusions:
Qualified Capital Outlay
Appropriations Subject to Limit
Appropriations Margin
$17,296,206
1.0055
$17 391 335
$9,446,000
737 525
$8 708 475
$8,682,860
(1) Recalcuted as a result of Proposition 111 and in accordance with guidelines of the League of
California Cities. Formal adoption for the FY 1991-92 recalculated appropriations limit was approved
by the City Council on July 2, 1991.
Page2 of6
Schedule of Calculations of Appropriations Limit
for Fiscal Year 2014-15
a) Revised Appropriation Limit Calculation
Increase Annual Base
City or County In California Adjustment Appropriations
Fiscal Year Population Growth Per Capita I nco me Factor Limit
1986-87 $5,097,811
1987-88 101.91% County 103.47% 105.45% 5,097,811
X 1 0545
5,375,642
1988-89 101.62% County 104.66% 106.36% 5,375,642
X 1.0636
5,717,533
1989-90 101.14% County 105.19% 106.39% 5,717,533
X 1.0639
6,082,883
1990-91 101.36% County 104.21% 105.63% 6,082,883
X 1.0563
6 425,349
1991-92 101.73% County 104.14% 105.94% 6,425,349
X 1.0594
6,807,015
1992-93 101.49% County 99.36% 100.84% 6,807,015
X 1.0084
6,864,194
1993-94 101.42% City 102.72% 104.18% 6,864,194
X 1 0418
7,151,117
1994-95 100.79% City 100.71% 101.51% 7,151,117
X 1 0151
7,259,099
1995-96 101.22% City 104.72% 106.00% 7,259,099
X 1 0600
7,694 645
1996-97 100.63% City 104.67% 105.33% 7,694,645
X 1.0533
8104,770
1997-98 101.30% City 104.67% 106.03% 8,104,770
X 1.0603
8,593,488
1998-99 101.39% County 104.15% 105.60% 8,593,488
X 1 0560
9,074 723
Page 3 of 6
Schedule of Calculations of Appropriations Limit
for Fiscal Year 2014-15
a) Revised Appropriation Limit Calculation
Increase Annual Base
City or County In California Adjustment Appropriations
Fiscal Year Population Growth Per Capita Income Factor Limit
1999-00 101.78% County 104.53% 106.39% 9,074,723
X 1 0639
9 654 598
2000-01 101.75% County 104.91% 106.75% 9,654,598
X 1.0675
10,306,283
2001-02 101.66% County 107.82% 109.61% 10,306,283
X 1.0961
11,296,717
2002-03 101.77% County 98.73% 100.48% 11,296,717
X 1 0048
11,350,941
2003-04 101.66% County 102.31% 104.01% 11,350,941
X 1.0401
11 806,114
2004-05 101.52% County 103.28% 104.85% 11,806,114
X 1.0485
12,378 711
2005-06 101.50% County 105.26% 106.50% 12,378,711
X 1.0650
13 183 327
2006-07 100.78% County 103.96% 104.77% 13,183,327
X 1.0477
13,812,172
2007-08 100.72% County 104.42% 105.17% 13,812,172
X 1.0517
14,526,261
2008-09 100.86% County 104.29% 105.19% 14,526,261
x1.0519
15,280 174
2009-10 100.90% County 100.62% 101.53% 15,280,174
x1.0153
15,513,961
2010-11 100.83% County 97.46% 98.27% 15,513,961
X 0.9827
15,245,569
Page 4 of 6
Schedule of Calculations of Appropriations limit
for Fiscal Year 2014-15
a) Revised Appropriation Limit Calculation
Increase Annual Base
City or County In California Adjustment Appropriations
Fiscal Year Population Growth Per Capita Income Factor Limit
2011-12 100.38% County 102.51% 1.029% 15,245,569
x1.0290
15,687,691
2012-13 100.38% County 103.77% 1.042% 15,687,691
X 1.0416
16,340,299
2013-14 100.69% County 105.12% 1.059% 16,340,299
X 1 0585
17 296 206
2014-15 100.78% County 99.77% 1.006% 17,296,206
X 1 0055
17,391,335
Schedule of Calculations of Appropriations limit
for Fiscal Year 2014-15
b) Past Appropriation Limit Calculation
Fiscal Year
1986-87
1987-88
1988-89
1989-90
1990-91
City
Population
Growth
101.72%
100.55%
99.19%
100.45%
Increase
In Consumer
Price Index
103.04%
103.93%
104.98%
104.21% (1)
Annual
Adjustment
Factor
104.80%
104.50%
104.13%
104.68%
(1) The increase in California Per Capita Income was used instead of the Consumer Price Index
Page 5 of6
Base
Appropriations
Limit
$5,097,811
5,097,811
X 1.0480
5,342,506
5,342,506
X 1 0450
5,582 919
5,582,919
X 1 0413
5,813,493
5,813,493
X 1 0468
6 085,565
Page 6 of 6
POPULATION GROWTH
Fiscal Year City County
1987-88 101.72% 101.91%
1988-89 100.55% 101.62%
1989-90 99.19% 101.14%
1990-91 10045% 101.36%
1991-92 100.93% 101.73%
1992-93 100.93% 101.49%
1993-94 101.42% 100.96%
1994-95 100.79% 100.75%
1995-96 101.22% 100.33%
1996-97 100.63% 100.48%
1997-98 101.30% 101.24%
1998-99 101.37% 101.39%
1999-00 101.62% 101.78%
2000-01 101.53% 101.75%
2001-02 101.33% 101.66%
2002-03 101.69% 101.77%
2003-04 101.17% 101.66%
2004-05 101 89% 101.38%
2005-06 100.91% 101.18%
2006-07 100.09% 100.78%
2007-08 100.52% 100.72%
2008-09 100.50% 100.86%
2009-10 100.75% 100.90%
2010-11 100.78% 100.83%
2011-12 100.28% 100.38%
2012-13 100.32% 100.38%
2013-14 100.52% 100.69%
2014-15 10044% 100.78%