4 - FY 2010/11 Gann Appropriations Limittawx uF MEETING DATE: JUNE 7, 2010
` ~ ITEM NO: ~--I
.~,~,
tos•~Aios COUNCIL AGENDA REPORT
DATE: MAY 30, 2010
TO: MAYOR AND TOWN COUNCIL O~
FROM: GREG CARSON, TOWN MANAGER
SUBJECT: ADOPT RESOLUTION ESTABLISHING THE FY 2010/11 GANN
APPROPRIATIONS LIMIT FOR THE TOWN OF LOS GATOS
RECOMMENDATION:
Adopt the attached resolution establishing the Game Appropriations Limit for FY 2010/11
(Attachment 1).
BACKGROUND:
On November 6, 1979, California voters approved Proposition 4, coxnlnolily known as the Galin
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 ofcourt-related or Federal government mandates.
The idritiative was later modified by two propositions -Proposition 98 in 1988 -and Proposition
111 in 1990. Proposition 98 established the rehun of tax revenues exceeding appropriation linut
levels to the State or citizens tluough 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 au appropriations limit for
FY 2010/11. The appropriations limit is based on population and per capita income data
provided by the State of Cal' ornia Financ~ ment. In alignment with State guidelines, the
PREPARED BY: .~~~ ,Finance and Administrative Sernices Director
N:\F'INANCE\COUNCIL\Council StaffRepo~ \FY 2011\FY 2010-I1 Gann Limit.doc
~\
Reviewed by: 1~_Assistant Town Manager ~~ , ~1'own Attorney
Clerk Administrator Finance olnmunity Development
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: ADOPT RESOLUTION ESTABLISHING THE FY 2009/10 GANN
APPROPRIATIONS LIMIT FOR THE TOWN OF LOS GATOS
MAY 14, 2009
appropriation limit for FY 2010/11 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 2010/11 Gaim Appropriations Lunit is as follows:
FY 2010/11 Calculation
Increase in Change in 2009/10 2010/11
County Per Capita Appropriation Appropriation Appropriation
Population Income Factor Limit Limit
1.0126 X 0.9746 = 0.98687996 X $ 29,048,811 = $ 28,667,689
The appropriations lirnit is the total amount of tax money that can be appropriated by the Town
in the FY 2010/11. The proposed FY 2010/11 budget anticipates $21,155,598 in taxes, which is
$7;512;091 less than the appropriation limit of $28,667,689.
CONCLUSION:
It is recormnended that the Council adopt the attached resolution establishing the FY 2010/11
Gann Appropriations Limit of approximately $28,667,689.
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no further action is required.
Attaclunent:
1. Resolution establishing the Gann Appropriations Lunit foz FY 2010/11
RESOLUTION 2010-
RESOLUTION OF THE TOWN COUNCII, OF THE TOWN OF LOS GATOS
ESTABLISHING THE FY 2010/11 APPROPRIATIONS LIMIT
FOR THE TOWN OF LOS GATOS
WHEREAS, Article ~ 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 TT RESOLVED, that the Annual Appropriations Limit for the Town of Los Gatos for
FY 2010/11 is $28,667,689 as reflected in Exhibit A.
PASSED AND ADOPTED at a regular meeting of the Town CouncIl of the Town of Los Gatos,
California, held on the7th day of June 2010 by the following vote:
COUNCIL MEMBERS: AYES:
NAYS:
ABSENT:
ABSTAIN:
SIGNED:
MAYOR OF THE TOW1~T OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK ADMINISTRATOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTACHI\4ENT 1
APPROPRIATION LID4IT FACTORS
For Beginning CounTy
YE Appropriation Population
June 30 Limit Factor
2002 18,973,081 1.0147
2003 20,757,490 1.0125
2004 20,750,044 1.0079
2005 21,397,082 1.0072
2006 22,258,018 1.0112
2007 23,691,192 1.0118
2008 24,919,990 1.0152
2009 26,416,980 1.0172
2010 28,426,367 1.0156
2011 # ':°:29 048 811 ~,> ~ ~ O12b
Town Per Ending
Population Capita Appropriation Limit
Factor Income Limit Increase
1.0107 1.0782 yr" 207F490 ~
~4
~~
` 9.40%
L0051
L0010 0.9873
1
0231 2 ~5
[
- ~
£ Y',a~~iF ty~ '~
~~
'2J -0.04%
3
12%
. ~
~,~`",~-~
' .
1.0004 1.0328 ;2r~$^
07$ 4.02%
1.0026 1.0526 9 ~.°~~.~~` 6.44%
1.0044 1.0396 "~-9~a~` 5.19%
1.0100 1.0442 ~ 4' D 6.01%
1.0318 ~ 1.0429 ~ ~8~4'-`2 ~~~ 7.61%
1.0108 1.0062 ~ :0 $~$1 2.19%
FY 2010/11 Calculation
Increase in Change in 2009/10 2010/11
County Per Capita Appropriatiou Appropriation Appropriation
Population Income ~ Factor Limit Limit
1.0126 X 0.9746 = 0.98687996 X $ 29,048,811 = $ 28,667,689
Percentage of Appropriation
2010/11 2010/11 Percentage
Tax Appropriation of
Revenues Limit Limit
21,155,598 / $ 28,667,689 = 74%
EXHIBIT A