13 Staff Report - FY 2008/09 Gann Appropriation Limitpow 0 MEETING DATE: JUNE 2, 2008
- ITEM NO:
13
~o 05 COUNCIL AGENDA REPORT
DATE: MAY 28, 2008
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: ADOPT RESOLUTION ESTABLISHING THE FISCAL YEAR 2008109 GANN
APPROPRIATION LIMIT FOR THE TOWN OF LOS GATOS
RECOMMENDATION:
Adopt resolution approving the Gann Appropriations Limit for FY 2008109.
BACKGROUND:
On November 6, 1979, California voters approved. Proposition 4, commonly known as the Gann
Spending Limitation Initiative, establishing Article XIIIB of the California State Constitution.
This proposition, which became effective in fiscal year 1980181, mandated an appropriations
(spending) limit on the amount of tax revenues that the State and most local government
jurisdictions may appropriate within a fiscal year. This limit grows annually by a population and
cost-of-living factor.
The State Appropriation Limit was since modified by two subsequent initiatives - Proposition 98
in 1988 and Proposition III in 1990. Proposition 98 established the return of tax revenues
exceeding appropriation limit levels to the State or citizens through a process of refunds, rebates,
or other means. Proposition 111 allowed more flexibility in the appropriation calculation factors.
Only tax proceeds are subject to this limit. Charges for services, fees, grants, loans, donations
and other non-tax proceeds are excluded. Exemptions are also made for voter-approved debt,
debt which existed prior to January 1, 1979, and for the cost of compliance with court or Federal
government mandates.
The Town Council adopts an annual resolution establishing an appropriations limit for the
following fiscal year using population and per capita personal income data provided by the State
of California's Department of Finance. Each year's limit is based on the amount of tax proceeds
that were authorized to be spent in fiscal year 1978179, with inflationary adjustments ).Wade
annually to reflect increases in po ilation and the cost of living.
PREPARED BY: Steve/JAL rice and Administrative Services Director
NAFINANCH1COUNCIL.ICouncil Staff Aeports\GannlFY 20091FY 2008-09 G ann Limit.doc
Reviewed by:S Assistant Town Manager I IV/ Town Attorney
Clerk Administrator _~C_Finance ommunity Development
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: GANN APPROPRIATION LIMIT
MAY 2, 2007
DISCUSSION:
In alignment with State guidelines, the appropriation limit for fiscal year 2008109 was calculated
using a factor comprised of the change in population for the county combined with the change in
California per capita personal income. Calculation of the 2008109 Gann Appropriations Limit
follows:
FY 2008109 Calculation
Increase in
Change in
2007108
2008109
Town
Per Capita
Appropriation Appropriation
Appropriation
Population
Income
Factor Limit
Limit
1.0318 X
1.0429
= 1.07606422 X $ 26,416,980 =
$ 28,426,367
This Appropriations Limit is the total amount of tax money that can be appropriated by the Town
in the 2008109 fiscal year. The proposed 2008109 budget anticipates $21,935,510 in taxes, which
is $6,490,857 less than the appropriation limit of $28,426,367.
CONCLUSION:
It is recommended that the Council adopt the resolution approving the Gann Appropriations
Limit of $28,426,367.
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no fiurther action is required.
Attachments:
1. Resolution
2. Gann Appropriations Limit calculation
Attachment I
RESOLUTION 2008-
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
ESTABLISHING THE 2008/09 FISCAL YEAR APPROPRIATION LEMT
FOR THE TOWN OF LOS GATOS
WHEREAS, the Town of Los Gatos has established its Base Year appropriation limit as
$5,849,120 (Five Million, Eight Hundred Forty-nine, One Hundred Twenty Dollars); and
WHEREAS, the cumulative appropriate changes to the Town's population, the Consumer Price
Index, and per capita income statewide since the base year established the revised Proposition 111,
1996197 Fiscal Year Appropriation Limit as $14,714,173 (Fourteen Million, Seven Hundred Fourteen
Thousand, One Hundred Severity Three Dollars) as adjusted; and
WHEREAS, to the best of this Town's knowledge and belief, the State Department of Finance
figures provided to this Town in response to Proposition III passed by the voters in June 1990, as
audited, reflect the appropriate statistics relevant to the calculation of the 2008/09 Fiscal Year
Appropriation Limit:
1. County population adjustments for 2008/09, plus 1.0172 (One point zero, one, seven, two percent)
2. Town population adjustments for 2008/09, plus 1.0318 (One point zero, three, one, eight percent)
3. Per Capita personal income change for 2008/09, plus 1.0429 (One point zero, four, two, nine percent).
THEREFORE, BE IT RESOLVED, based on the foregoing figures and the provisions of
Article XIlIB of the Constitution of the State of California, the following figure accurately represents the
2008/09 Fiscal Year Appropriation Limit for the Town of Los Gatos as: $28,426,367 (Twenty Eight
Million, Four Hundred Twenty Six Thousand, Three Hundred Sixty Seven Dollars).
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos,
California, held on the 2"d day of Rune 2008 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
Attachment 2
APPROPRIATION LIMIT FACTORS
For
Beginning
County
Town
Per
Ending
%
YE
Appropriation
Population
Population
Capita
Appropriation
Limit
June 30
Limit
Factor
Factor
Income
Limit
Increase
1999
15,733,994
1.0212
1.0137
1.0415
16,734,358.
6.36%
2000
16,734,358
1.0173
1.0071
1,0453
17,795,043
6.34%
2001
17,795,043
1.0163
1.0095
1.0491
18,973,081
6.62%
2002
18,973,081
1.0147
1.0107
1.0782
20,757;490
9.40%
2003
20,757,490
1.0125
1.0051
0.9873
20,750,044
-0.04%
2004
20,750,044
1.0079
1.0010
1.0231
21,397,082
3.12%
2005
21,397,082
1.0072
1.0004
1.0328
- 22,258,018:
4.02%
2006
22,258,018
1.0112
1.0026
1.0526
23,691,192
6,44%
2007
23,691,192
1.0118
1.0044
1.0396
24,919,990
5.19%
2008
24,919,990
1.0152
1.0100
1.0442
26,416;980
6.01%
2009
26,410,990
1 0172
1,0318
1,0427
28,426,367
7.6 V,10;
FY 2008109 Calculation
% Increase in
Change in
2007108
2008109
Town
Per Capita
Appropriation Appropriation
Appropriation
Population
Income
Factor Limit
Limit
1.0318 X
1.0429
= 1.07606422 X $ 26,416,980 =
$ 28,426,367
Percentage of Appropriation
2008109
2008109
Percentage
Tax
Appropriation
of
Revenues
Limit
Limit
21,935,510
1 $ 28,426,367 =
77%