Loading...
Reso FY 14/15 Appropriations Limitpow" of MEETING DATE: 06/02/14 ITEM NO: 5 �OS'BA'i0S COUNCIL AGENDA REPORT DATE: MAY 14, 2014 TO: MAYOR AND TOWN COUNCIL FROM: GREG LARSON, TOWN MANAGER,,, SUBJECT: ADOPT RESOLUTION ESTABLISHING THE FY 2014/15 GANN APPROPRIATIONS LIMIT FOR THE TOWN OF LOS GATOS RECOMMENDATION: Adopt the attached resolution establishing the Gann Appropriations Limit for FY 2014/15 (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: Attached for Council consideration is a resolution establishing an appropriations limit for FY 2014/15. The appropriations limit is based on population and per capita income data provided by the State of California Finance Department. In alignment with State guidelines, the appropriation limit for FY 2014/15 was calculated using a factor comprised of the change in PREPARED BY: Stephen '' ect�nance / Administrative Services Reviewed by: =Assistant Town Manager 19Y6<Town Attorney Finance NAFINANCE)COUNCIUComcil State Reports \Gam\FY 2015\FY 2014 -15 Gam Limit doc PAGE MAYOR AND TOWN COUNCIL SUBJECT: ADOPT RESOLUTION ESTABLISHING THE FY 2014/15 GANN APPROPRIATIONS LIMIT FOR THE TOWN OF LOS GATOS MAY 14, 2014 County or Town population (whichever is higher) and the change in California per capita personal income. Calculation of the FY 2014/15 Gann Appropriations Limit is as follows: FY 2014/15 Calculation % Increase in Change in 2013/14 2014/15 County Per Capita Appropriation Appropriation Appropriation Population Income Factor Limit Limit 1.0150 X 0.9977 = 1.0126655 X $ 33,279,977 = $ 33,701,485 The appropriations limit is the total amount of tax money that can be appropriated by the Town in FY 2014 /15. The proposed FY 2014/15 budget anticipates $22,383,532 taxes, which is $11,317,953 less than the appropriation limit of $33,701,485. CONCLUSION: It is recommended that the Council adopt the attached resolution establishing the FY 2014/15 Gann Appropriations Limit of approximately $33,701,485. 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 2014/15 RESOLUTION 2014- RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS ESTABLISHING THE FY 2014/15 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 2014/15 is $33,701,485 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 2d day of June 2014 by the following vote: COUNCIL MEMBERS: AYES: I►GYi.3 ABSENT: ABSTAIN: SIGNED: MAYOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA I:71610*11 CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS LOS GATOS, CALIFORNIA ATTACHMENT 1 APPROPRIATION LIMIT FACTORS For Beginning County Town Per Ending % YE Appropriation Population Population Capita Appropriation Limit June 30 Limit Factor Factor Income Limit Increase 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 24019,990 5.19% 2008 24,919,990 1.0152 1.0100 1.0442 26,416080 6.01% 2009 26,416,980 1.0172 1.0318 1.0429 28,426,367 7.61% 2010 28,426,367 1.0156 1.0108 1.0062 29,048,811 2.19% 2011 29,048,811 1.0126 1.0101 0.9746 28,667,689 -1.31% 2012 28,667,689 1.0089 1.0096 1.0251 29,669,366 3.49% 2013 29,669,366 1.0124 1.0081 1.0377 31,169,671 5.06% 2014 31,169,671 1.0157 1.0147 1.0512 33,279077 6.77% 2015 33,279077 1.0150 1.0120 0.9977 33,701,485 1.27% FY 2014/15 Calculation % Increase in Change in 2013/14 2014/15 County Per Capita Appropriation Appropriation Appropriation Population Income Factor Limit Limit 1.0150 X 0.9977 = 1.0126655 X $ 33,279,977 = $ 33,701,485 Percentage ofAooroorlation 2014/15 2014/15 Percentage Tax Appropriation of Revenues Limit Limit 22,383,532 / $ 33,701,485 = 66% EXHIBIT A O � • DEPARTMENT OF 0911�R�1'F i N A N C E EDMUND G. BROWN JR. • GOVERNOR STATE CAF170I • ROOM 1 145 ■ SACRAMENTO CA ■ 95614 -4998 ■ WWw.Op F.cn.ppV OFFICE OF THE DIRECTOR May 2014 Dear Fiscal Officer: Subject: Price and Population Information Appropriations Limit The California Revenue and Taxation Code, section 2227, mandates the Department of Finance (Finance) to transmit an estimate of the percentage change in population to local governments. Each local jurisdiction must use their percentage change in population factor for January 1, 2014, in conjunction with a change in the cost of living, or price factor, to calculate their appropriations limit for fiscal year 2014 -15. Attachment A provides the change in California's per capita personal income and an example for utilizing the price factor and population percentage change factor to calculate the 2014 -15 appropriations limit. Attachment B provides city and unincorporated county population percentage change. Attachment C provides population percentage change for counties and their summed incorporated areas. The population percentage change data excludes federal and state institutionalized populations and military populations. Population Percent Change for Special Districts Some special districts must establish an annual appropriations limit. Consult the Revenue and Taxation Code section 2228 for further information regarding the appropriations limit. Article XIII B, section 9(C), of the State Constitution exempts certain special districts from the appropriations limit calculation mandate. The Code and the California Constitution can be accessed at the following website: http : /: / /Ieginfo.legislature.cagov /faces /codes.xhtmi /faces /codes.xhtmi. Special districts required by law to calculate their appropriations limit must present the calculation as part of their annual audit. Any questions special districts have on this issue should be referred to their respective county for clarification, or to their legal representation, or to the law itself. No state agency reviews the local appropriations limits. Population Certification The population certification program applies only to cities and counties. Revenue and Taxation Code section 11005.6 mandates Finance to automatically certify any population estimate that exceeds the current certified population with the State Controller's Office. Finance will certify the higher estimate to the State Controller by June 1, 2014. Please Note: Prior year's city population estimates may be revised. If you have any questions regarding this data, please contact the Demographic Research Unit at (916) 323 -4086. MICHAEL COHEN Director By: KEELY M.BOSLER Chief Deputy Director Attachment May 2014 Attachment A A. Price Factor: Article XIII B specifies that local jurisdictions select their cost of living factor to compute their appropriation limit by a vote of their governing body. The cost of living factor provided here is per capita personal income. If the percentage change in per capita personal income is selected, the percentage change to be used in setting the fiscal year 2014 -15 appropriation limit is: Per Capita Personal Income Fiscal Year Percentage change (FY) over prior year 2014 -15 -0.23 B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2014 -15 appropriation limit. 2014 -15: Per Capita Cost of Living Change = -0.23 percent Population Change = 0.95 percent Per Capita Cost of Living converted to a ratio: Population converted to a ratio: -0.23+100 =0.9977 100 0.95+100 =1.0095 100 Calculation of factor for FY 2014 -15: 0.9977 x 1.0095 = 1.0072 Fiscal Year 2014 -15 Attachment B Annual Percent Change in Population Minus Exclusions' January 1, 2013 to January 1, 2014 and Total Population, January 1, 2014 County Percent Change - Population Minus Exclusions Total Population City 2013 -2014 1.1.13 1 -1.14 1.1 -2014 Santa Clara Campbell 4.01 40,373 41,993 41,993 Cupertino 0.62 59,575 59,946 59,946 Gilroy 1.76 51,505 52,413 52,413 Los Altos 0.67 29,769 29,969 29,969 Los Altos Hills 1.16 8,258 8,354 8,354 Los Gatos 1.02 30,225 30,532 30,532 Milpitas 3.31 67,845 70,092 70,092 Monte Sereno 0.97 3,417 3,450 3,450 Morgan Hill 2.87 40,049 41,197 41,197 Mountain View 0.76 76,204 76,781 76,781 Palo Alto 0.82 66,318 66,861 66,861 San Jose 1.72 983,574 1,000,536 1,000,536 Santa Clara 0.86 120,196 121,229 121,229 Saratoga 0.66 30,683 30,887 30,887 Sunnyvale 0.82 145,864 147,055 147,055 Unincorporated 0.26 86,022 86,243 87,263 County Total 1.50 1,839,877 1,867,538 1,868,558 "Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes. THIS PAGE INTENTIONALLY LEFT BLANK