Staff Report�oWN of MEETING DATE: 06/16/15
ITEM NO:
tos eGA(os COUNCIL AGENDA REPORT
DATE: JUNE 4, 2015
TO: MAYOR AND TOWN COUNCIL ?
FROM: LES WHITE, INTERIM TOWN MANAG
SUBJECT: ADOPT RESOLUTION ESTABLISHING THE FY 2015/16 GANN
APPROPRIATIONS LIMIT FOR THE TOWN OF LOS GATOS
RECOMMENDATION:
Adopt a resolution (Attachment 1) establishing the Gann Appropriations Limit for FY 2015/16.
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 2015/16. 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
PREPARED BY: STEPH N
Director of Finance Administrative Services
Reviewed by:
Town Manager `_Town Attorney Finance
NWGR�AdminWorkFiles\2015 Council ReponsVane 16\FP 2015 -16 Game Lunit.doc
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION ESTABLISHING THE FY 2015/16 GANN
APPROPRIATIONS LIMIT FOR THE TOWN OF LOS GATOS
JUNE 4, 2015
DISCUSSION (cont'd):
appropriation limit for FY 2015/16 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 2015/16 Gann Appropriations Limit is as follows:
FY 2015/16 Calculation
% Increase in
Change in
2014/15
2015/16
County
Per Capita
Appropriation Appropriation
Appropriation
Population
Income
Factor Limit
Limit
1.0113 X
1.0382 =
1.04993166 X $ 33,701,485 =
S 35,384,256
The appropriations limit is the total amount of tax money that can be appropriated by the Town
in FY 2015/16. The proposed FY 2015/16 budget anticipates $23,599,742 taxes, which is
$11,784,514 less than the appropriation limit of $35,384,256.
CONCLUSION:
It is recommended that the Town Council adopt the attached resolution establishing the FY
2015/16 Gann Appropriations Limit of approximately $35,384,256.
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 2015/16 (with Exhibit A,
Appropriation Limit Factors)
RESOLUTION 2015-
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
ESTABLISHING THE FY 2015/16 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 201 5/16 is $35,384,256 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 16`h day of June 2015 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
Beginning
County
Town
Per
Ending
%
YE
Appropriation
Population
Population
Capita
Appropriation
Limit
June 30
Limit
Factor
* —
Factor
Income
Limit
Increase
2007
23,691,192
1.0118
OL18
1.0044
r --
1.0396
249 9f9,0,,
9;
5.19%
2008
24,919,990
1.0152
1.0100
1.0442,'
26,416',280
6.01%
2009
26,416,980
1.0172
1.0318
1.0429
r `" 2,8,A2667
7.61%
2010
28,426,367
1.0156
1.0108
1.0062
= 29;048,$11
2.19%
2011
29,048,811
1.0126
1.0101
0.9746
8,667�,68�;
-1.31%
2012
28,667,689
1.0089
1.0096
1.0251
29669,3,§6 i
3.49%
2013
29,669,366
1.0124
1.0081
1.0377
41 31,1b9;671
5.060
2014
31,169,671
1.0157
1.0147
1.0512
33279;977;
6.77%
2015
33,279,977
1.0150
1.0102
0.9977
:.: 33,701;485 "
1.27%
2016
':;33:701ARS' z
'1 (11;13'.
7 nn�n
i nxun.
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...,.,,.>
% Increase in
County
Population
1.0113
FY 2015/16 Calculation
Change in
Per Capita
Income
X 1.0382 =
2014/15
Appropriation Appropriation
Factor Limit
1.04993166 X $ 33,701,485
Percentage_ of Appropriation
2015/16 2015/16 Percentage
Tax Appropriation of
Revenues Limit Limit
23,599,742 / $ 35,384,256 = 67%
2015/16
Appropriation
Limit
$ 35,384,256
EXHIBIT A