HomeMy WebLinkAboutStaff Report 285-10TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER
DATE: JUNE 28, 2010
REPORT TYPE: Consent
DEPARTMENT: ADMINISTRATIVE
SERVICES
CMR: 285:10
SUBJECT:. Adoption of Resolution Determining the Proposed Calculation of the
Appropriations Limit for Fiscal Year 2011
RECOMMENDATION
Staff recommends that Council adopt the attached resolution determining the Proposition 4
(Gann) Appropriations Limit calculation for Fiscal Year 2011. The City's Fiscal Year 2011
appropriations are estimated to be $36.12 million under the limit, assuming Council approval of
the Fiscal Year 2011 Adopted Budget as proposed.
DISCUSSION
Article XIIIB of the State Constitution (Proposition 4), commonly known as the Gann Initiative,
limits the annual appropriations for State and local governments. The Appropriations Limit
(Limit) is based on the actual appropriations during the 1978-79 Fiscal Year and 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" that have
been received from the State. The Appropriations Limit for Fiscal Year 2011 is $115.06 million.
When compared to the recommended 2011 Budget, the City'S Fiscal Year 2011 budgeted
appropriations are $36.12 million under the Limit. Because the City is well under the Limit,
minor Council adjustments to the proposed budget will not have an impact on the City's Gann
Limit compliance.
Based on Article XIIIB, the City of Palo Alto can use the larger of two measurements of
population growth, (county or city population growth) in the Limit calculation. For Fiscal Year
2011, the City is using the city population factor, which is greater than the population factor for
the County of Santa Clara (County). In Fiscal Year 2010, the city population factor was also used
in lieu of the County's since the City'S population factor was higher than the County's. The City
typically uses the highest factor in order to provide maximum appropriation flexibility.
CMR:285:10 Page 1 of2
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 2011 Limit has no impact on City resources.
POLICY IMPLICATIONS
This recommendation is consistent with existing City policies.
ENVIRONMENTAL REVIEW
This is not a project under section 21065 of the California Environmental Quality Act.
ATTACHMENTS
Attachment 1: Resolution determining the calculation of the Appropriations Limit for fiscal year
2011
Exhibit A: Appropriations Limitation Compliance Calculation for FY 2011 Adopted
Budget
•
PREPARED BY:
DEPARTMENT HEAD APPROVAL:
CITY MANAGER APPROVAL:
City Manager
/
Attachment 1
***NOT YET APPROVED***
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO DETERMINING
THE CALCULATION OF THE APPROPRIATIONS LIMIT FOR FISCAL YEAR
2011
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);
and
WHEREAS, since fiscal year 1991, 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 2011, which will be adopted by ordinance of the Council
on June 28, 2010; and
WHEREAS, pursuant to Government Code sections 7901 and 7910,
the final calculation of the Limit has been determined, and the
adjustment factors on which the calculation is based are a -2.54%
percent change in California per capita income and a 1.44% percent
change in the population growth for the City of Palo Alto; 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
appropriations subject to limitation
million less than the Limit.
calculation, the
are approximately
City's
$78.94
NOW, THEREFORE, the Council of the City of Palo Alto does
RESOLVE as follows:
SECTION 1. The Council of the City of Palo Alto hereby
1
finds that, for fiscal year 2011, 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 $36.12 million.
SECTION 2. The Council hereby adopts the final calculation
of the Appropriations Limit of the City for fiscal year 2011, a
copy of which is attached hereto as Exhibit A.
SECTION 3. The Council finds that the adoption of this
resolution does not constitute a project under the California
Environmental Quality Act, and, therefore, no environmental
assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Senior Assistant City Attorney
2
APPROVED:
Mayor
City Manager
Director, Administrative
Services
Exhibit A
APPROPRIATIONS LIMITATION COMPLIANCE CALCULATION
FOR FY 2011 ADOPTED BUDGET
($ IN MILLIONS)
Combined General' Capital Debt Special
F!!nds Fund . ProJects Service Revenue
Total Budgeted Appropriations
FY 2011 Adopted Budget ($ millions) 140.50 113.00 16.84 2.69 7.97
Less: Debt Service Transactions 2.69 2.69
Capital Outlay 16.84 16.84
Non-Proceeds of Taxes 42.03 39.28 2.75
1 Net Proposed Appropriations Subject to Limit $78.94 $73.72 $0.00 $0.00 $5.221
FY 2011 Appr9prlations Limit 116.06 r'::-", ,:r[/_~u_ -'-"_! i.((
Under L1mltBy 36.12 ,;if cY:I['fIi.ILO'
(/. ,-,,!~~ ,-'-<-c, ~-;j' < -"1 /
''I(.~ /" -, ".d'
Computation of Appropriation Limit: /1('; "\//.-/' ~ , ,:?" '/' //I_'_~~;'/ / \~-\:7"F"-4. /;'
FY 201 0 Appropriations Limit: $116,380,638 {1t')1 ( "j ;(~ ~j ,I -I :1 I,
FY 2011 City of Palo Alto 1.44% ";;;" /r\ ,/ ..' ;~( :,;
Population Change " '. ' /<~,~/ (//
r(" ( )<;:~t')'1
FY 2011 Per Capita Income Change -2.54% ' ;,'1 /(, ~ II' ~ i\\":\~A . /;/
" .'! ," ,
(1.0144)x(0.9746)x$116,380,638 = $115,067,884
The City of Palo Alto remains well within Its appropriations limit In FY 2011. 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
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Appropriations Subject to the Limit 70,45 73.30 78.64 72.00 78.94
Appropriations Limit 100.64 106.68 113.17 116.38 115.06
Under Limit By 30.19 33.38 34.53 44.38 36.12
Projected Appropriations
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016
Estimated Appropriations Subject to Limit 83,44 88.19 93.21 98.52 104.13
Estimated Appropriations Limit 121.61 128.54 135.86 143.60 151.77
Under limit By 38.17 40.35 42.65 45.08 47.64