HomeMy WebLinkAboutStaff Report 252-06BUDGET
’06- ’07
City of Palo Alto
City Manager’s Report
TO:
FROM:
DATE:
SUBJECT:
AHONORABLE CITY COUNCIL ll~
CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES
JUN~ 12, 2006 CMR: 252:06
ADOPTION OF PROPOSED APPROPRIATION LIMIT CALCULATION
RESOLUTION FOR FISCAL YEAR 2006-07
RECOMMENDATION
Staff recommends that Council adopt the attached resolution determining the Proposition 4
(Gann) Appropriations Limit calculation for fiscal year 2006-07. The City’s fiscal year 2006-07
appropriations are estimated to be $30.19 million under the limit, assuming Council approval of
the fiscal year 2006-07 Adopted Budget.
DISCUSSION
Article XIIIB of the S_.tate Constitution (Proposition 4) limits the annual appropriations for the
State and local governments. The Appropriations Limit (Limit) is adjusted annually on the basis
of population and per capita income "change factors." These factors are received from the State
in May, after the City’s proposed budget has been submitted to Council. Attached is the final
Appropriations Limit calculation, based on the "change factors" which have been received from
the State. The Appropriations Limit for fiscal year 2006-07 is $100.64 million. When compared
to the recommended 2006-07 Budget, the City’s fiscal year 2006-07 budgeted appropriations are
$30.19 million under the Limit.
Based on Article XIIIB, the City of Palo Alto can use the larger of two measurements of
population growth, county or city population growth factor, in the Limit calculation. For fiscal
year 2006-07, the City is using the population factor for Santa Clara County, which is greater
than the population factor for the City of Palo Alto.
As required by State law, documentation used to compute the Limit has been made available to
the public at least fifteen days prior to the Council meeting at which the Limit is being adopted,
and notice was published of the availability of these materials.
RESOURCE IMPACT
The adoption of the fiscal year 2006-07 Limit has no impact on City resources.
POLICY IMPLICATIONS
This recommendation is consistent with existing City policies.
CMR:252:06 Page 1 of 2
PREPARED BY:
DAVE
Senior Financial Analyst
DEPARTMENT HEAD APPROVAL: ~
l~ector,CAP~L Y~A~°- ’ c’r ~A~nis~~ices
CITY MANAGER APPROVAL:~..~,Z ~. ~O xk4. ~I, EMILY HARRIS))~
Assistant City Manager
ATTACHMENTS
Attachment A: Resolution determining the calculation of the Appropriations Limit
for fiscal year 2006-07
CMR:252:06 Page 2 of 2
ATTACHMENT A
* * *NOT YET APPROVED** *
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO DETERMINING
THE CALCULATION OF THE APPROPRIATIONS LIMIT OF THE CITY OF
PALO ALTO FOR FISCAL YEAR 2006-07
WHEREAS, under Article XIIIB of the Constitution of the State
of California, the City of Palo Alto (City) may not appropriate any
proceeds of taxes in excess of its appropriations limit (Limit);
and
WHEREAS, since fiscal year 1990-91, the City is permitted to
annually adjust its Limit in accordance with inflation and
population adjustment factors; and
WHEREAS, pursuant to Government Code Section 37200, the
calculation of the Limit and the total appropriations subject to
the limit were set forth in the annual budget of the City for
fiscal year 2006-07, which will be adopted by ordinance of the
Council on June 12, 2006; and
WHEREAS, pursuant to Government Code sections 7901 and 7910,
the fina! calculation of the Limit has been determined, and the
adjustment factors on which the calculation is based are a 3.96%
percent change in California per capita income and a 1.18% percent
change in the population growth for the County of Santa Clara; and
WHEREAS, the documentation used in the determination of the
Limit has been made available to the general public for fifteen
(15) days prior to the date of adoption of this resolution; and
WHEREAS, according to the final calculation, the City’s
appropriations subject to limitation are approximately $30.19
mi!lion less than the Limit.
NOW, THEREFORE, the Council of the City of Paio Alto does
RESOLVE as follows:
SECTION i. The Council of the City of Palo Alto hereby
finds that, for fiscal year 2006-07, the final calculation of the
Appropriations Limit of the City of Palo Alto has been determined
in accordance with the adjustment factors referred to above, the
documentation used in the determination of the calculation has been
made available to the general public for the period of fifteen days
as required by law, and the City’s appropriations subject to
limitation are under the Limit by approximately $30.19 million.
SECTION 2. The Council hereby adopts the final calculation
of the Appropriations Limit of the City for fiscal year 2006-07, a
copy of which is attached hereto as Exhibit A.
SECTION 3. The Council finds that the adoption of this
resolution does not constitute a project under the California
Environmental Quality Act,and,therefore,no environmental
assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST: ~APPROVED:
City Clerk Mayor
APPROVED AS TO FORM:
Senior Assistant City Attorney
City Manager
Director, Administrative
Services
2
Exhibit A
APPROPRIATIONS LIMITATION
COMPLIANCE CALCULATION
FOR FISCAL YEAR 2006-07 PROPOSED BUDGET
($ IN MILLIONS)
Total Budgeted Appropriations
Fiscal Year 2006-07 Proposed Budget ($millions)
Less:Debt Service Transactions
Capital Outlay
Non-Proceeds of Taxes
Net Proposed Appropriations Subject to Limit
Combined
Funds
124.51
1.34
11.57
41.15
70.45
General
Fund
107.90
37.94
69.96
Capital
Projects
9.31
11.57
(2.27)
Debt
Service
1.34
1.34
Special
Revenue
5.97
3.21
2.76
Computation of Appropriation Limit:
Fiscal Year 2005-06 Appropriations Limit:
Fiscal Year 2005-06 Santa Clara County
Population Change
Fiscal Year 2005-06 Per Capita Income Change
(1.0118) x (1.0396) x $95,675,394 =
$ 95,675,394
1.18%
3.96%
$100,637,817
The City of Palo Alto remains well within its appropriations limit in fiscal year 2006-07. Future year limit trends can be made based
on the average change in regional population and income growth. The appropriations subject to limitation includes proceeds of
taxes from the General Fund, Special Revenue Funds, Debt Service Funds, and Capital Improvement Funds. The following is a
summary of estimated limits and estimated appropriations subject to the limit.
Historical Appropriations
Appropriations Subject to the Limit
Appropriations Limit
Under Limit By
Projected Appropriations
Estimated Appropriations Subject to Limit
Estimated Appropriations Limit
Under Limit By
FY2002-03 FY2003-04 FY2004-05 FY2005-06 FY2006-07
65.96 61.33 64.13 65.87 70.45
83.21 85.82 89.27 95.68 100.64
17.25 24.49 25.14 29.81 30.1!
FY2007-08 FY2008-09 FY2009-10 FY2010-11 FY2011-1
76.09 82.17 88.75 95.85 103.52
107.03 113.82 121.05 128.74 136.91
30.94 31.65 32.30 32.89 33.40
7:38 AM, 5/25/2006