GANNtow NOR MEETING DATE: JUNE 4, 2012
ITEM NO: 9
COUNCIL AGENDA REPORT
DATE: MAY 24, 2012
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: ADOPT RESOLUTION ESTABLISHING THE FY 2012/13 GANN
APPROPRIATIONS LIMIT FOR THE TOWN OF LOS GATOS
RECOMMENDATION
Adopt the attached resolution establishing the Gann Appropriations Limit for FY 2012/13
(Attachment 1).
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 FY 1980/81, 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 for 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
111 allowed more flexibility in the appropriation calculation factors.
DISCUSSION
t
Attached for Council consideration is a resolution establishing an appropriations limit for
FY 2012/13. The appropriations limit is based on population and per capita income data
provided by the State of California Finance Department. In aligmnent with State guidelines, the
PREPARED BY
Finance Director
Reviewed by: J 5. Assistant Town Manager Town Attorney
Clerk Administrator Finance Community Development
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION ESTABLISHING THE FY 2012/13 GANN
APPROPRIATIONS LIMIT FOR THE TOWN OF LOS GATOS
MAY 24, 2012
appropriation limit for FY 2012/13 was calculated using a factor comprised of the change in
County or Town population (whichever is higher) and the change in California per capita
personal income. Calculation of the FY 2012/13 Gann Appropriations Limit is as follows:
FY 2012 /13Calculation
% Increase in
Change in
2011/12
2012/13
Town
Per Capita
Appropriation Appropriation
Appropriation
Population
Income
Factor Limit
Limit
1.0124 X
1.0377 =
1.05056748 X $ 29,669,366 =
$ 31,169,671
The appropriations limit is the total amount of tax money that can be appropriated by the Town
in the FY 2012/13. The proposed FY 2012/13 budget anticipates $21,453,603 in taxes, which is
$9,716,068 less than the appropriation limit of $31,169,671.
CONCLUSION
It is recommended that the Council adopt the attached resolution establishing the FY 2012/13
Gann Appropriations Limit of approximately $31,169,671.
ENVIRONMENTAL ASSESSMENT
Is not a project defined under CEQA, and no further action is required.
Attachment:
1. Resolution establishing the Gann Appropriations Limit for FY 2012/13
RESOLUTION 2012-
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
ESTABLISHING THE FY 2012/13 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 6, 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 governmental 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 2012/13 is $31,169,671 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 4th day of June 2012 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 1
APPROPRIATION LIMIT FACTORS
For
YE
June 30
Beginning
Appropriation
Limit
2004
20,750,044
2005
21,397,082
2006
22,258,018
2007
23,691,192
2008
24,919,990
2009
26,416,980
2010
28,426,367
2011
29,048,811
2012
28,667,689
2013
g2�,6d9;356
FY 2012 /13Calculation
% Increase in
Change in
2011/12
2012/13
Town
Per Capita
Appropriation Appropriation
Appropriation
Population
Income
Factor Limit
Limit
1.0124 X
1.0377 =
1.05056748 X $ 29,669,366 =
$ 31,169,671
Percentage of Appropriation
2012/13 2012/13 Percentage
Tax Appropriation of
Revenues Limit Limit
21,453,603 / $ 31,169,671 = 69%
Comity
Town
Per
Ending
%
Population
Population
Capita
Appropriation
Limit
Factor
Factor
Income
Limit
Increase
1.0079
1.0010
1.0231
21 7,082
3,12%
1.0072
1.0004
1.0328
225$ Ol
4.02%
1.112
1.0026
1.0526
,Fr 23,691,1923
6,44%
G {
1.0118
1,0044
1,0396
24,919,990'
5.19%
1.0152
1.0100
1.0442
e
y MIT'
6.01%
1.0172
1,0318
1,0429
f
" 2$ 26,367
7.61%
1.0156
1.0108
1.0062
s
2.19%
1,0126
1.0101
0.9746
s _ £f 7 08i$11
} 2$�6068
- 1.31%
1.0089
1,0096
1.0251
. t�- r 0,
,,.29
3,49%
EXHIBIT A