HomeMy WebLinkAboutE-12 Staff Report-FY1718 Gann LimitCONSENT ITEM
E-12
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: TROY L. BUTZLAFF, ICMA-CM, CITY MANAGER
FROM: TALIKA JOHNSON, DIRECTOR OF FINANCE
DATE: JUNE 19, 2017
SUBJECT: ADOPTION OF GANN APPROPRIATIONS LIMIT FOR FY 2017-18
SUMMARY:
Pursuant to State Law, each local government must adopt an Annual Appropriation Limit. The proposed action
will approve Resolution No. 2017-C49 adopting the City’s Annual Appropriation Limit as required by law.
RECOMMENDATION:
Staff recommends that the City Council take the following action:
1) Adopt Resolution No. 2017-C49, approving and adopting the Annual Appropriations Limit for the
Fiscal Year 2017-18 in the Amount of $255,638,416.
DISCUSSION:
In 1980, California voters adopted Article XIIIB of the California State Constitution, commonly referred to as the
Gann Initiative or Gann Appropriations Limit, placing limits on the amount of tax proceeds that state and local
agencies can appropriate each year. The City’s limit is adjusted each year for inflation, population, and other
factors.
On June 5, 1990, Proposition 111 was voted into California Law. Among other provisions, Proposition 111
provided for changes in the calculation of the Gann Appropriation Limit. The annual adjustments to the spending
limit were liberalized by Proposition 111 to be more closely linked to the rate of economic growth. Beyond local
inflation and population factors, the provisions allow a city to use the higher of the percentage growth in personal
income or the percent increase in the local tax roll due to non-residential property construction. Additionally,
cities can choose to use the rate of change in population either within the city or county, whichever is higher. The
City utilized elements of these adjustment factors in calculating the annual Gann Appropriation Limit.
Based on calculations attached to the Resolution, the City is under the cap for FY 2017-18 by $224,644,638.
FISCAL IMPACT:
There is no fiscal impact associated with the recommended action.
APPROVED
CITY COUNCIL
6/19/2017
Gann Appropriations Limit FY 2017-18
June 19, 2017
Page 2
Prepared by: Reviewed and Approved:
Richard Lam Talika M. Johnson
Budget Analyst Director of Finance
Reviewed and Approved: Reviewed and Approved:
Louie F. Lacasella Troy L. Butzlaff, ICMA-CM
Management Analyst City Manager
Attachments:
1) Resolution No. 2017-C49
2) Exhibit A - FY 2017-18 Annual Appropriations Calculation
3) Exhibit B – FY 2017-18 Appropriations Subject to Annual Limit
RESOLUTION NO. 2017-C49
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA,
CALIFORNIA, APPROVING AND ADOPTING THE ANNUAL APPROPRIATIONS
LIMIT FOR THE FISCAL YEAR 2017-18 IN THE AMOUNT OF $255,638,416
WHEREAS, in June of 1990, the voters of the State of California enacted Proposition 111, "The Traffic
Congestion Relief and Spending Limitation Act of 1990"; and
WHEREAS, this Act amended Article XIIIB of the Constitution of the State of California regarding
spending limitations of cities; and
WHEREAS, Article XIIIB of the California Constitution provides that the total annual appropriations
subject to limitation of each governmental entity, including this City, shall not exceed the appropriation limit of
such entity of government for the prior year, adjusted for changes in the cost of living or personal income and
population, except as otherwise provided for in said Article XIIIB and implementing State Statutes; and
WHEREAS, pursuant to said Article XIIIB of said California Constitution, and Section 7900 et seq. of the
California Government Code, the City is required to set its appropriation limit for each fiscal year; and
WHEREAS, the Director of Finance of the City of Azusa has caused a technical review to be made of the
documentation for the City's said appropriation limitation, and has caused the numbers upon which the City's
appropriation limit is based to be researched and said limit to be calculated; and
WHEREAS, based on such calculations, as described in the attached documentation as Exhibit A and B,
the Director of Finance has determined the said appropriation limit and, pursuant to Section 7910 of the said
California Government Code, has made available to the public the documentation used in the determination of said
appropriation limit; and
WHEREAS, the City Council elects to utilize said calculations, which are attached for reference.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Azusa, California, that said
appropriation limit for Fiscal Year 2017-18 shall be adopted in the amount of $255,638,416 for said Fiscal Year.
PASSED, APPROVED and ADOPTED this 19th day of June, 2017.
___________________________________
Joseph Romero Rocha
Mayor
ATTEST:
___________________________________
Jeffrey Lawrence Cornejo, Jr.
City Clerk
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF AZUSA )
I HEREBY CERTIFY that the foregoing Resolution No. 2017-CXX was duly adopted by the
City Council of the City of Azusa at a regular meeting thereof, held on the 19th day of June, 2017, by
the following vote of Council:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
___________________________________
Jeffrey Lawrence Cornejo, Jr.,
City Clerk
APPROVED AS TO FORM:
___________________________________
Best Best & Krieger, LLP
City Attorney
EXHIBIT A
ANNUAL APPROPRIATIONS LIMIT CALCULATION
FOR FISCAL YEAR 2017-18
Inflation Factor (selected higher of the following):
Growth in the 3.69% State 1.0369 Factor
California per Department of
capita personal Finance
income
Growth in the 7.52% Hdl Coren & 1.0752 Factor Selected for
non-residential Cone Calculation
assessed
valuation due to
new
construction
within the City
Population Factor (selected higher of the following):
City 0.68% State 1.0068 Factor Selected for
Department of Calculation
Finance
County 0.57% State 1.0057 Factor
Department of
Finance
Annual Limits Calculation:
Appropriations Limit for Fiscal Year 2016-17: 236,153,102$ (A)
Adjustment factors for Fiscal Year 2017-18:
Inflation Factor (B)Population Factor (C)
1.0752 1.0068
Combined Factor (B times C)
1.08251 0.08251 (D)
Adjustment for inflation and population (A times D): 19,485,314
Appropriations Limit for Fiscal Year 2017/18: 255,638,416$
EXHIBIT B
APPROPRIATIONS SUBJECT TO THE ANNUAL LIMIT
FOR FISCAL YEAR 2017-18
A. PROCEEDS OF TAXES
Property Tax 10,356,205$
Non-Property Tax 17,543,673
Licenses and Permits 3,049,900
Intergovernmental Revenues 0
TOTAL PROCEEDS OF TAXES 30,949,778
B. EXCLUSION 0
C. NET INVESTED PROCEEDS OF TAXES 30,949,778
D. INTEREST ALLOCATION 44,000
E. APPROPRIATIONS SUBJECT TO LIMIT 30,993,778
F. APPROPRIATIONS LIMIT FOR FY 2017-18 (EXHIBIT A) 255,638,416
G. FY 2017-18 APPROPRIATIONS OVER/(UNDER) LIMIT (224,644,638)$