01 Staff Report - FY 2009/10 Gann Appropriations Limit~qW N OF
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DATE: MAY 14, 2009
TO:
FROM:
SUBJECT:
MEETING DATE: JUNE 2009
ITEM NO:
COUNCIL AGENDA REPORT
MAYOR AND TOWN COUNCIL ~j
GREG LARSON, TOWN MANAGER
ADOPT RESOLUTION ESTABLISHING THE FY 2009110 GANN
APPROPRIATIONS LIMIT FOR THE TOWN OF LOS GATOS
RECOMMENDATION:
Adopt the attached resolution establishing the Gann Appropriations Limit for FY 2009/10
(Attachment 1).
BACKGROUND:
On November b, 1979, California voters approved Proposition 4, commonly known as the Gaiin
Spending Limitation Initiative, establishing Article XIIIB of the California State Constitution.
This proposition, which became effective in FYI980/81, mandated an appropriations (spending)
limit on the amount of tax proceeds that the State and most local government jurisdictions may
appropriate within a fiscal year. Charges for services, fees, grants, loans, donations and other
non-tax proceeds are excluded. Exemptions are also made [or voter-approved debt prior to
January 1, 1979 and the cost of court-related or Federal government mandates.
The initiative was later modified by two propositions - Proposition 98 in 1988 and Proposition
111 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
1 I I allowed more flexibility in the appropriation calculation [actors.
DISCUSSION:
Attached for Council consideration is a resolution establishing an appropriations limit for
FY 2009110. The appropriations limit is based on population and per capita income data
provided by the State of California Fi lance Department. In alignment with State guidelines, the
PREPARED BY: i ce and Administrative Services Director
N.1FINANCr{ICOUNC1LICouncil Staff ReportslGann\FY 2010TY 2004-10 Gana; Limitdoc
Reviewed by: Assistant Town Manager Town Attorney
Cleric Administrator 5g-Finance Community Development
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION ESTABLISHING THE FY 2009110 GANN
APPROPRIATIONS LIMIT FOR THE TOWN OF LOS GATOS
MAY 14, 2009
appropriation limit for FY 2009110 was calculated using a factor comprised of the change in
County or Town population (which ever is higher) and the change in California per capita
personal income. Calculation of the 2009/10 Gann Appropriations Limit is as follows:
FY 2009110 Calculation
% Increase in
Change in
2008109
2009110
County
Per Capita
Appropriation Appropriation
Appropriation
Population
Income
Factor Limit
Limit
1.0156 X
1.0062
= 1.02189672 X $ 28,426,367
- $ 29,049,811
The appropriations limit is the total amount of tax money that can be appropriated by the Town
in the FY 2009110. The proposed FY 2009110 budget anticipates $21,027,500 in taxes, which is
$8,021,311 less than the appropriation limit of $29,048,811.
CONCLUSION:
It is reconnnlended that the Council adopt the attachcd resolution establishing the FY 2009110
Gann Appropriations Limit of approximately $29,048,811.
ENVIRONMENTAL ASSESSMENT:
Is not a project defined tinder CEQA, and no further action is required.
Attachment:
1. Resolution establishing the Gann Appropriations Limit for FY 2009110
RESOLUTION 2009-
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
ESTABLISHING THE FY2009/10 APPROPRIATIONS LIMIT
FOR THE TOWN OF LOS GATOS
WHEREAS, Article XIIIB of the California Constitution (Limitation of Government Appropriations) was
passed by the California electorate on November b, 1979, and became effective on July 1, 1980; and
WHEREAS, Chapter 1205, Statute of 1980, Section 7900 of the California Government Code formally
implements methods for govemmental entities to establish and define annual appropriations limits; and
WHEREAS, the growth factors used to calculate the Annual Appropriations Limit are County or Town
population change and the increase in the California per capita income.
THEREFORE, BE IT RESOLVED, that the Annual Appropriations Limit for the Town of Los Gatos for
FY 2009/10 is $29,048,811 as reflected in Exhibit A.
PASSED AND ADOPTED at a regular meeting of the "Town Council of the Town of Los Gatos,
California, held on the I st day of June 2009 by the following vote:
COUNCIL MEMBERS:
AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTACHMENT I
APPROPRIATION LIMIT FACTORS
For
Beginning
County
Town
Per
Ending
%
YE
Appropriation
Population
Population
Capita
Appropriation
Limit
June 30
Limit
Factor
Factor
Income
Limit
Increase
2000
16,734,358
1.0173
1.0071
1.0453
17;7.95,043
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;7.57;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
26,416,980
1.0172
1.0318
1.0429
28,426,367`
7.61%
2010
28;426,367
1.0 1 >6
1.01.0.8
1:0062
-.,,29,048,811-
2.49%
FY 2009/10 Calculation
% Increase in
Change in
2008/09
2009/10
County
Per Capita
Appropriation
Appropriation
Appropriation
Population
Income
Factor
Limit
Limit
1.0156 X
1.0062
= 1.02189672 X
$ 28,426,367
= $ 29,048,811
Percentage of Appropriation
2009110
2009/10
Percentage
Tax
Appropriation
of
Revenues
Limit
Limit
21,027,500
1 $ 29,048,811 =
72%
EX"IBIT A