5pow N 0 MEETING DATE: JUNE 3, 2013
ITEM NO:
ios GA os COUNCIL AGENDA REPORT
DATE: MAY 3, 2013
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: ADOPT RESOLUTION ESTABLISHING THE FY 2013/14 GANN
APPROPRIATIONS LIMIT FOR THE TOWN OF LOS GATOS
RECOMMENDATION:
Adopt the attached resolution establishing the Gann Appropriations Limit for FY 2013/14
(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 2013/14. 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 2013/14 was calculated using a factor comprised of the change in
PREPARED BY: Stephen D. Conway, Director of Finance / Administrative Services
NAFINANCDCOUNCUCouncil Staff ReportAGannTY 2014TY 2013 -14 Gann Limit.doc _
Reviewed by: EI-I Assistant Town Manager( — Town Attorney _:!�L�Finance
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
County or Town population (whichever is higher) and the change in California per capita
personal income. Calculation of the FY 2013/14 Gann Appropriations Limit is as follows:
FY 2013/14 Calculation
% Increase in
Change in
2012/13
2013/14
County
Per Capita
Appropriation Appropriation
Appropriation
Population
Income
Factor Limit
Limit
1.0157 X
1.0512 =
1.06770384 X $ 31,169,671 =
$ 33,279,977
The appropriations limit is the total amount of tax money that can be appropriated by the Town
in FY 2013/14. The proposed FY 2013/14 budget anticipates $20,917,770 in taxes, which is
$12,362,207 less than the appropriation limit of $33,279,977.
CONCLUSION:
It is recommended that the Council adopt the attached resolution establishing the FY 2013/14
Gann Appropriations Limit of approximately $33,279,977.
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 2013/14
RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS
ESTABLISHING THE FY 2013/14 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 2013/14 is $33,279,977 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 3rd day of June 2013 by the following vote:
COUNCIL MEMBERS: AYES:
NAYS:
ABSENT:
FIX 3 _ AQM
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
For
YE
June 30
Beginning
Appropriation
Limit
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
29,669,366
2014
-3697.
APPROPRIATION LIMIT FACTORS
County
Town
Per
Ending
%
Population
Population
Capita
Appropriation
Limit
Factor
Factor
Income
Limit
Increase
1
1,0004
10328
- 2.2 8 0�8
4.02%
P
1.0112
1.0026
F
1.0526
'�ff
U. 3 91192
6.44%
1,0118
1.0044
1.0396{
9990
5.19%
1,0152
1.0100
1.0442
6.01%
1.0172
1.0318
1,0429
= 8426 :.
F
7.61%
1.0156
1.0108
1.0062
0 8 8 7
2,19%
1.0126
1.0101
0.9746,
` $q X68 -
-1.31%
1,0089
1.0096
1.0251
r 5 -. - -_5 '
3.49%
1,0124
1.0081
1,0377
3169 7
5.06%
FY 2013/14 Calculation
% Increase in
Change in
2012/13
2013/14
County
Per Capita
Appropriation Appropriation
Appropriation
Population
Income
Factor Limit
Limit
1.0157 X
1,0512 =
1.06770384 X $ 31,169,671 =
$ 33,279,977
Percentage of Appropriation
2013/14 2013/14 Percentage
Tax Appropriation of
Revenues Limit Limit
20,917,770 / $ 33,279,977 = 63%
EXHIBIT A