HomeMy WebLinkAboutE-08 Staff Report - FY1819 Gann LimitCONSENT ITEM
E-8
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: SERGIO GONZALEZ, CITY MANAGER
FROM: TALIKA M. JOHNSON, DIRECTOR OF FINANCE
DATE: JUNE 18, 2018
SUBJECT: ADOPTION OF GANN APPROPRIATIONS LIMIT FOR FY 2018-19
BACKGROUND:
Pursuant to State Law, each local government must adopt an Annual Appropriation Limit. The
proposed action will approve Resolution No. 2018-C47 adopting the City’s Annual Appropriation Limit
as required by law.
RECOMMENDATION:
Staff recommends the City Council take the following action:
1)Adopt Resolution No. 2018-C47, approving and adopting the Annual Appropriations Limit
for the Fiscal Year 2018-19 in the Amount of $289,709,341.
ANALYSIS:
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.
APPROVED
CITY COUNCIL
6/18/2018
Gann Appropriations Limit FY 2018-19
June 18, 2018
Page 2
Based on calculations attached to the Resolution, the City is under the cap for FY 2018-19 by
$257,456,001.
FISCAL IMPACT:
There is no fiscal impact associated with the recommended action.
Prepared by: Reviewed and Approved:
Richard Lam Talika M. Johnson
Budget Analyst Director of Finance
Reviewed and Approved:
Sergio Gonzalez
City Manager
Attachments:
1) Resolution No. 2018-C47
2) Exhibit A - FY 2018-19 Annual Appropriations Calculation
3) Exhibit B – FY 2018-19 Appropriations Subject to Annual Limit
RESOLUTION NO. 2018-C47
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA,
CALIFORNIA, APPROVING AND ADOPTING THE ANNUAL
APPROPRIATIONS LIMIT FOR THE FISCAL YEAR 2018-19 IN THE
AMOUNT OF $289,709,341
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 2018-19 shall be adopted in the amount of
$289,709,341 for said Fiscal Year.
PASSED, APPROVED and ADOPTED this 18th day of June, 2018.
___________________________________ Joseph Romero Rocha Mayor
Attachment 1
ATTEST:
___________________________________
Jeffrey Lawrence Cornejo, Jr. City Clerk
STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss.
CITY OF AZUSA )
I HEREBY CERTIFY that the foregoing Resolution No. 2018-C47 was duly adopted
by the City Council of the City of Azusa at a regular meeting thereof, held on the 18th day of June, 2018, by the following vote of Council:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSTAIN: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
___________________________________ Jeffrey Lawrence Cornejo, Jr., City Clerk APPROVED AS TO FORM: ___________________________________ Best Best & Krieger, LLP City Attorney
Attachment 2
EXHIBIT A
ANNUAL APPROPRIATIONS LIMIT CALCULATION
FOR FISCAL YEAR 2018-19
Inflation Factor (selected higher of the following):
Growth in the 3.67% State 1.0367 Factor
California per Department of
capita personal Finance
income
Growth in the 12.54% Hdl Coren & 1.1254 Factor Selected for
non-residential Cone Calculation
assessed
valuation due to
new
construction
within the City
Population Factor (selected higher of the following):
City 0.70% State 1.0070 Factor Selected for
Department of Calculation
Finance
County 0.51% State 1.0051 Factor
Department of
Finance
Annual Limits Calculation:
Appropriations Limit for Fiscal Year 2017-18: 255,638,416$ (A)
Adjustment factors for Fiscal Year 2018-19:
Inflation Factor (B)Population Factor (C)
1.1254 1.0070
Combined Factor (B times C)
1.13327780 0.13328 (D)
Adjustment for inflation and population (A times D): 34,070,926
Appropriations Limit for Fiscal Year 2018-19: 289,709,341$
Attachment 3
EXHIBIT B
APPROPRIATIONS SUBJECT TO THE ANNUAL LIMIT
FOR FISCAL YEAR 2018-19
A. PROCEEDS OF TAXES
Property Tax 11,123,805$
Non-Property Tax 17,965,900
Licenses and Permits 3,083,635
Intergovernmental Revenues 0
TOTAL PROCEEDS OF TAXES 32,173,340
B. EXCLUSION 0
C. NET INVESTED PROCEEDS OF TAXES 32,173,340
D. INTEREST ALLOCATION 80,000
E. APPROPRIATIONS SUBJECT TO LIMIT 32,253,340
F. APPROPRIATIONS LIMIT FOR FY 2018-19 (EXHIBIT A) 289,709,341
G. FY 2019-19 APPROPRIATIONS OVER/(UNDER) LIMIT (257,456,001)$