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Home My Public Portal About15) 8C RESO 15-5093 CONFIRMING FACTORS IN APPROPRIATING LIMITAGENDA ITEM B.C . ADMINISTRATIVE SERVICES DEPARTMENT MEMORANDUM DATE: June 16, 2015 TO: The Honorable City Council FROM: Bryan Cook, City Manager By: Tracey L. Hause, Administrative Services Director SUBJECT: PUBLIC HEARING -ADOPTION OF RESOLUTION NO. 15-5093 CONFIRMING THE FACTORS USED FOR CALCULATING THE ANNUAL APPROPRIATIONS LIMIT FOR THE FISCAL YEAR (FY) 2015-16 RECOMMENDATION: The City Council is requested to : a) Receive presentation from staff; b) Open the public hearing ; c) Receive public input; d) Close the public hearing; and e) Adopt Resolution No. 15-5093 (Attachment "A "), a Resolution confirming the factors used for calculating the annual Appropriations Limit (Limit) for FY 2015 -16. 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. City Council June 16, 2015 Page 2 of 2 4. On May 28 and June 4, 2015, 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, 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 2015-16, and the City Council is required to confirm all factors used for calculating the Limit by adoption of a resolution. For FY 2015-16, the California Per Capita Income and the population growth of the County were applied to the FY 2014-15 Limit. A Resolution confirming the factors used for calculating the annual Limit and the calculations (Exhibit "1" of the Resolution) determining of the Limit are included in this report. The City of Temple City's Limit for FY 2015-16 is $18,203,510. The appropriations subject to the Limit per the Proposed FY 2015-16 City Budget is $9,664,140. The City of Temple City is $8,539,370 below the Limit. CONCLUSION: In order to be in compliance with California State law, City Council adoption of Resolution No. 15-5093 is necessary at this time. FISCAL IMPACT: Adoption of this Resolution does not have an impact on the FY 2015-16 City Budget. ATTACHMENT: A. Resolution 15--5093 ATTACHMENT A RESOLUTION NO. 15-5093 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) 2015-2016 WHEREAS, the voters of California in November, 1979 added Article XI liB (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 XI liB 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 growth or the entire county; must be done by a recorded vote of the City Council; and WHEREAS, the City ofTemple City has complied with all the provisions of Article XIIIB in determining the Appropriations Limit for FY 2015-16. 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 growth of the County) are to be applied to the FY 2014-15 Limit. SECTION 2. The accumulated growth in the calculation of these new factors are to be applied to the Appropriations Limit in FY 2014-15. SECTION 3. The Appropriations Limit for FY 2015-16 shall be $18,203,510 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 16th day of June, 2015 Tom Chavez, Mayor ATTEST: APPROVED AS TO FORM: Peggy Kuo, City Clerk Eric Vail, City Attorney EXHIBIT 1 ARTICLE XIII-B OF THE CALIFORNIA CONSTITUTION (GANN 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 2015-2016 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 2015-2016 APPROPRIATIONS LIMIT 2014-151imit (1) Per Capita Income and County population change factor applied to 2014-15 appropriations limit 2015-2016 appropriations limit APPROPRIATIONS SUBJECT TO LIMIT AND APPROPRIATIONS MARGIN Proceeds of Taxes Less Exclusions: Qualified Capital Outlay Appropriations Subject to Limit Appropriations Margin $17,391,335 1.0467 $18,203,510 $9,948,140 284,000 $9,664140 $8,539,370 (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. Page 2 of 6 Schedule of Calculations of Appropriations Limit for Fiscal Year 2015-16 a) Revised Appropriation Limit Calculation Increase Annual Base City or County In California Adjustment Appropriations Fiscal Year Population Growth Per Capita Income 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 8 104,770 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 Schedule of Calculations of Appropriations Limit for Fiscal Year 2015-16 a) Revised Appropriation Limit Calculation Fiscal Year 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 City or County Population Growth 101.78% County 101.75% County 101.66% County 101.77% County 101.66% County 101.52% County 101.50% County 100.78% County 100.72% County 100.86% County 100.90% County 100.83% County Increase In California Per Capita Income 104.53% 104.91% 107.82% 98.73% 102.31% 103.28% 105.26% 103.96% 104.42% 104.29% 100.62% 97.46% Annual Adjustment Factor 106.39% 106.75% 109.61% 100.48% 104.01% 104.85% 106.50% 104.77% 105.17% 105.19% 101.53% 98.27% Page 3 of6 Base Appropriations Limit 9,074,723 9,654,598 X 1.0675 10,306 283 10,306,283 X 1.0961 11 296,717 11,296,717 X 1.0048 11350941 11,350,941 X 1.0401 11 806114 11,806,114 X 1.0485 12 378,711 12,378,711 X 1.0650 13 183,327 13,183,327 X 1.0477 13,812,172 13,812,172 x1.0517 14 526 261 14,526,261 x1.0519 15 280 174 15,280,174 X 1.0153 15,513 961 15,513,961 X 0.9827 15 245 569 Page 4 of6 Schedule of Calculations of Appropriations Limit for Fiscal Year 2015-16 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 X 1.0290 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 2015-16 100.82% County 103.82% 1.048% 17,391,335 X 1.0467 18203510 Schedule of Calculations of Appropriations Limit for Fiscal Year 2015-16 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% 100.34% Increase In Consumer Price Index 103.04% 103.93% 104.98% 103.82% (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 of6 POPULATION GROWTH Fiscal Year City County 1987-88 101.72% 101.91% 1988-89 100.55% 101.62% 1989-90 99.19% 101.14% 1990-91 100.45% 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% 2014-15 100.44% 100.78% 2015-16 100.34% 100.82%