08 Staff Report - FY 2005/06 Grann Appropriation Limit~pW N OF
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DATE:
TO:
FROM:
SUBJECT:
MEETING DATE: 6/6/05
ITEM NO. g
COUNCIL AGENDA REPORT
JUNE 6, 2005
MAYOR AND TOWN COUNCIL
TOWN MANAGER
ADOPT RESOLUTION ESTABLISHING THE FISCAL YEAR 2005/06
GANN APPROPRIATION LIMIT FOR THE TOWN OF LOS GATOS
RECOMMENDATION:
Adopt resolution approving the Gann Appropriations Limit for FY 2005/06.
BACKGROUND:
Article XIIIB of the California State Constitution was enacted by Proposition 4. The Gann Initiative
of 1979, commonly referred to as the Gann Appropriations Limit, mandates a limit on the amount
of proceeds of taxes that state and local governments can appropriate and spend each year. Councils
may use the change in county or city population combined with a factor of either California per
capita personal income or the change in local assessment roll due to nonresidential construction.
DISCUSSION:
Each year's limit is based on the amount of tax proceeds that were authorized to be spent in fiscal
year 1978/79 in each agency, modified for changes in inflation and population in each subsequent
year. Each year the Town establishes its appropriations limit for the following fiscal year. The
appropriation limit for fiscal year 2005/06 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 2005/06 Gann Appropriations Limit follows:
FY 2005/06 Calculation
% Increase in
Change in
FY 04/05
FY 05/06
County
Per Capita
Appropriation Appropriation
Appropriation
Population
Income
Factor Iimit
Limit
1.0112 X
1.0526
= 1.06438912 X $ 22,258,018
= $ 23,691,192
PREPARED BY: STEPHEN CONWAY, FINANCE DIIX Reviewed by: Assistant Town Manager Town A
tt y C1erk~_ -Finance
Community Development Revised: 5/11/05 2:56 pm
Refonnatted: 5/30/02
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION ESTABLISHING THE FY 2005/06 GANN APPROPRIATIONS LIMIT
JUNE 6, 2005
This Appropriations limit is the total amount of tax money that can be appropriated by the Town in
the 2005/06 fiscal year. The proposed 2005/06 budget anticipates $17,507,310 in taxes, which is
$6,183,8822 less than the appropriation limit of $23,691,192.
CONCLUSION:
It is recommended that the Council adopt the resolution approving the Gann Appropriations Limit
of $23,691,192.
ENVIRONMENTAL ASSESSMENTS
Is not a project defined under CEQA and no further action is required.
Attachments:
1. Resolution
2. Gann Appropriations Limit calculation
RESOLUTION 2005-
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS. GATOS
ESTABLISHING THE 2005/06 FISCAL YEAR APPROPRIATION LIMIT
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, 1996/97 Fiscal Year
Appropriation Limit as $14,714,173 (Fourteen Million, Seven Hundred Fourteen Thousand, One Hundred Seventy
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 111 passed by the voters in June 1990, as audited, reflect the
appropriate statistics relevant to the calculation of the 2005/06 Fiscal Year Appropriation Limit:
• County population adjustments for 2005/06, plus 1.0112 (One point zero, one, one, two percent)
Town population adjustments for 2005/06, plus 1.0026 (One point zero, zero, two six percent)
• Per Capita Personal Income change for 2005/06, plus 1.0526 (One point zero, five, two, six percent).
THEREFORE, BE IT RESOLVED, based on the foregoing figures and the provisions of Article XR1B of
the Constitution of the State of California, the following figure accurately represents the 2005/06 Fiscal Year
Appropriation Limit for the Town of Los Gatos as: $23,691,192 (Twenty Three Million, Six Hundred Ninety One
Thousand, One Hundred Ninety Two Dollars).
ATTACHMENT 1
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California,
held on the 6nd day of June, 2005 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 I
APPROPRIATION LIMIT FACTORS
For
Beginning
County
Town
Per
YE
Appropriation
Population
Population
Capita
June 30
Limit
Factor
Factor
Income
1996
12,221,916
1.017
1.0001
1.0472
1997
13,016,370
1.0800
1.007
1.0467
1998
14,714,173
1.0216
1.0201
1.0467
1999
15,733,994
1.0212
1.0137
1.0415
2000
16,734,358
1.0173
1.0071
1.0453
2001
17,795,043
1.0163
1.0095
1.0491
2002
18,973,081
1.0147
1.0107
1.0782
2003
20,757,490
1.0125
1.0051
0.9873
2004
20,750,044
1.0079
1.0010
1.0231
2005
21,397,082
1.0072
1.0004
1.0328
,000
5,0)1
1.0112
1.110?()
L0~?(
FY 2005/06 Calculation
Ending
%
Appropriation
Limit
Limit
Increase
13,1) I -7
6.50%
1-4,71,14 ,l?3
13.04%
i X3,99
6.93%
1G`,71,3~ti
6.36%
17,795 A41
6.34%
6.62%
7, 7-=11>0
9.40%
7 ~0-0=1=1
-0.04%
1 ) 0,S2
3.12%
01S
4.02%
7 3,691.192
b.°140
% Increase in
Change in
FY 04/05
FY 05/06
County
Per Capita
Appropriation Appropriation
Appropriation
Population
Income
Factor Limit
Limit
1.0112 X
1.0526
= 1.06438912 X $ 22,258,018 =
$ 23,691,192
Percentage of Appropriation
FY 05/06 FY 05/06 Percentage
Tax Appropriation of
17,507,310 / $ 23,691,192 = 74%
Attachment 2