HomeMy Public PortalAbout14) 8B Public Hearing Confirming the Factors used for calculating the Annual Appropriations LimitAGENDA
ITEM 8.8.
ADMINISTRATIVE SERVICES DEPARTMENT
MEMORANDUM
DATE : June 20, 20 17
TO: The Honorable City Cou ncil
FROM: Bryan Cook , City Manager
By: Tracey L. Hause , Administrative Service s Director
SUBJECT: PUBLIC HEARING -ADOPTION OF RESOLUTION NO. 17-5263
CONFIRMING THE FACTORS USED FOR CALCULATING THE ANNUAL
APPROPRIATIONS LIMIT FOR THE FISCAL YEAR (FY) 2017-18
RECOMMENDATION:
The City Co un ci l is reque sted to :
1. Receive prese ntati on from staff;
2 . Open the pub li c hearing ;
3. Receive public input ;
4 . Close the public hearing ; and
5. Adopt Resol ut ion No . 17-5263 (Attachment "A "), confirming the factors used for
calculating t he annual Appropriat ion s Limit (Limit) for FY 2017-18 .
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
we re placed on all state and local government appropria tions . These
appropriations calculations must be approved by the City Council on an annua l
basis .
2 . In 1980, the State Legislature added Section 9710 of the Government Code stating
that the governing body of each City must establ ish , by reso lution , an
appropriations limit for the fo ll owing year.
3. In June 1990 , the voters of California approved Propos iti on 111 which revised the
annual adjustment factors applied to th e 1986-87 Li mit and each year thereafter.
City Council
June 20,2017
Page 2 of 2
4 . On June 8 , 2017 , 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 compl ied with al l the
provisions of Article XI liB in determining the Limit for FY 2017-18 , and the City Council is
required to confirm all factors used for calculating the Lim it by adoption of a resolution .
For FY 2017-18, the California Per Capita Income and the population growth of the
County were applied to the FY 2016-17 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
2017-18 is $20 ,180 ,423 . The appropriations subject to the Limit per the Proposed FY
2017-18 City Budget is $9 ,369 ,810 . The City of Temple City is $10 ,810 ,613 below the
Limit.
CITY STRATEGIC GOALS :
In order to be in compliance with California State law, adoption of Resolution No. 17-5263
by the City Council will promote or further the City's Strategic Goal of Good Governance.
FISCAL IMPACT:
Adoption of this Resolution does not have an impact on the FY 2017-18 C ity Budget.
ATTACHMENT:
A. Resolution 17-5263
ATTACHMENT A
RESOLUTION NO . 17-5263
A RESOL UTION OF TH E CITY COUNCIL OF THE CITY OF TEMPL E
CITY , CALI FORNI A CONFIRM IN G THE FACTORS USED FOR
CALCULATI NG THE ANNUA L A PPROPRIATIO NS LIMIT FOR THE
FISCAL YEAR (FY ) 2017-2018
WHEREAS, the voters of California in November, 1979 added Article XIIIB (Propos ition 4) to the
State Constitution placing various lim itations on the appropriatio ns of the State and loca l governments ; and
WHEREAS , the vo ters of California in Ju ne , 1990 mod ified A rtic le X III B by approv ing Proposition 11 1
and SB 88 (Chapter 60/90) w hich re vised t he a nnua l adjustmen t factors to be applied to the 1986-87 Li mit
and each year thereafter; a nd
WHEREAS , the decision as to which of the factors : a ) e ither the Ca liforni a Per Capita Income or the
perce ntage change in the local assessment ro ll fro m the preceding year due to the addition of loca l non-
resident ial construction in t he city ; and b) e ither t he city's own population growth or t he entire county ; must be
done by a recorded vote of the City Council ; and
WHEREAS , the C ity of Temple City has complied with all the prov isions of Article X I li B in determin ing
the App ropriat ions Lim it for FY 201 7-18.
NOW, THEREFORE, the City Council of the City of T e mple City does reso lve , determine and order
as fo llows:
SECTION 1. The adjustment facto rs (the California Per Capita Incom e and the population growth of
the Coun ty) a re to be applied to the FY 2016-17 Limit.
SECTION 2. The accumulated growth in the calculation of these new factors are to be appli ed to the
Approp riat ions Limit in FY 2016-17.
SECTION 3. The A ppropria tio ns Limit fo r FY 201 7-18 shall be $20 ,180,423 for the City of T emple
City as determ ined by Ex hibit 1, attached here to.
SECTION 4 . The City Clerk shall ce rt ify to the adoption of th is resolution .
APP ROVED A ND ADOPTED th is 20th day of J une , 2017.
Cynthia Ste rn quist , Mayor
ATTEST: APPROVED AS TO FOR M:
Peggy Ku o , City Clerk Eric Vai l, City Attorney
EXHIBI T 1
ARTICLE Xlll-8 OF THE CALI FORNIA CONSTITU TI ON (GANN I NI TI ATI VE)
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 . No n-Proceeds of Taxes (Fines and Forfeitures and User Fees) were not
subject to this limit.
In 1989-90 Proposition 11 1 was passed , which cha nged t he base year to 1986-87 and allows cities
to adjust their limit annually by either the change in the California per cap ita 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 e ntire county. T he law also all ows for the exclusion from the limit of
"q ualified capital out lay" whic h includes any approp ri ati on for f ixed assets costing over $100 ,000.
The 2017-2018 budget expenditures are well withi n the statutory limit.
It should be noted that futu re revenues exceeding the limitation require a return of the excess to the
taxpayers or a substantial port ion of such excess will be forfeited for State uses .
COMPUTATION OF APPROPRIATIONS LIMIT
2017-2018 APP ROPRIAT IONS LI MIT
2016-171imit (1)
Per Capita Income and City population change
factor applied to 2016-17 appropriat ions limit
2017-2018 appropriations limit
APPROPR IATIONS SUBJECT TO LI MIT AND APPROPR IATIONS MARGIN
Proceeds of Taxes
Less Exclusions:
Qualified Capital Outlay
Appropriations Subject to Limit
Appropriat ions Margin
$19,352 ,151
1.0428
$20 ,180,423
$11,264 ,600
1,894 ,790
$9 ,369 ,810
$10 ,810 ,613
(1) Reca lcu ted as a result of Proposition 111 and in accordance with gu idelines of the League of
California Cities. Formal adoption for the FY 1991 -92 recalculated appropriations limit was approved
by the City Council on Ju ly 2, 1991 .
Page 2 of 6
Schedule of Calcu lations of Appropriations Lim it
for Fiscal Year 2017-18
a) Revised Appropriation Lim it Ca lculation
Increase Annual Base
City or County In California A dj ustment App ropriations
Fiscal Year Population G rowth Pe r Capita Income Factor Limit
1986-87 $5 ,097 ,81 1
1987-88 101.91% County 103.47% 105.45% 5 ,097,81 1
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 .2 1% 105.63 % 6 ,082 ,883
X 1.0563
6,425,349
1991-92 10 1.73% 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 151117
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
Page 3 of 6
Schedule of Calculations of Appropriations Limit
for Fiscal Year 2017-18
a) Revised Appropriatio n Li mit Ca lculation
Increase Annual Base
City o r County I n Ca lifornia Adjustment Appropriations
Fiscal Year Popul ati o n G rowth 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 % 109.6 1% 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 ,7 11
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% 13,183,32 7
X 1.0477
13,812 ,172
2007-08 100.72% County 104.42% 105.17% 13 ,812 ,172
x1 .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 % 15,2 80 ,174
x1.0153
15,513 ,961
2010-11 100.83% County 97.46 % 98.27% 15,513 ,961
X 0 .98 27
15,2 45,569
Page 4 of 6
Schedu le of C alcu latio ns of A pp rop riatio ns Limit
f or Fi sca l Year 20 17-18
a) Revised Appro priation L imit Calcu lation
In c rease Annual Base
City o r County In Cal ifornia Adj ustment Appropr iations
Fi scal Year Popu lation Growth Per Capita Income Factor Lim it
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
16,34 0 ,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
20 15-16 100 .82% County 10 3.82 % 1.047% 17 ,391 ,335
X 1.046 7
18,203,510
20 16-17 100.89% City 105.37 % 1.063% 18,203 ,510
X 1.0631
19,352 ,151
20 17-18 100.57% County 103.69% 1.043% 19,352 ,151
X 1.0428
20 ,180,423
Schedule of Calculations of Appropriations Limit
for Fiscal Year 2017-18
b) Past Appropriation Limit Calcu lation
F iscal 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 Ind ex
103 .04%
103.93 %
104.98 %
103.82% (1)
Annual
Adjustment
Factor
104.80%
104.50 %
104.13%
104.68 %
(1) The i ncrease in Cal ifornia Per Capita Incom e was used instead of the Consumer Price Index
Page 5 of 6
Base
Appropriations
Lim it
$5 ,097 ,8 11
5 ,097 ,8 11
X 1.0480
5,342 ,506
5,342 ,506
X 1.0450
5,582 ,919
5,582 ,9 19
X 1.0413
5,813 ,493
5,813 ,493
X 1.0468
6 ,085 ,565
Page 6 of 6
POPULATIO N GROWTH
F iscal Yea r 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 10 1.42% 100.96 %
1994-95 100 .79% 100.75%
1995-96 10 1.22% 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 %
2000-0 1 101 .53 % 101 .75%
2001-02 101 .33% 101 .66%
2002-03 101 .69% 101 .77%
2003-04 101 .17% 101 .66 %
20 04-0 5 101 .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 %
2016-17 100.89% 100.85%
2017-18 100.00% 100.57%