HomeMy WebLinkAboutStaff Report 8225
City of Palo Alto (ID # 8225)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 6/27/2017
City of Palo Alto Page 1
Summary Title: Adoption of a Resolution Proposing the Appropriations Limit
for Fiscal Year 2018
Title: Adoption of a Resolution Determining the Proposed Calculation of the
Appropriations Limit for Fiscal Year 2018
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that Council adopt the attached Resolution determining the Proposition 4
(GANN) Appropriations Limit calculation for Fiscal Year 2018 (Attachment A). The City's Fiscal
Year 2018 appropriations are estimated to be $26.88 million under the limit based on the Fiscal
Year 2018 Adopted Budget.
Background
California voters approved an initiative on November 6, 1979 that added Article XIIIB to the
State Constitution as amended with Proposition 98 in 1988 and Proposition 111 in 1990. The
provisions of this article place limits on the amount of revenue that can be appropriated by all
entities of government. The Appropriation Limit is based on actual appropriations during the
1978-1979 fiscal year, as increased each year using specified population and inflationary growth
factors. The original legislation implementing the provisions of Article XIIIB became effective
January 1, 1981. In accordance with that legislation, the governing body of each government
jurisdiction must, by resolution, establish its annual Appropriation Limit for the coming year
(prior to July 1) at a regularly scheduled meeting or noticed special meeting. 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 Appropriations Limit calculation. For Fiscal Year 2018,
the City is using City of Palo Alto population factor, which is greater than the population factor
for the County of Santa Clara. The City typically uses the highest factor in order to provide
maximum appropriation flexibility.
Discussion
The Appropriations Limit is adjusted annually on the basis of population and per capita income
changes. This updated information is received from the California Department of Finance in
May, after the City's proposed budget has been submitted to Council. Attached is the final
City of Palo Alto Page 2
Appropriations Limit calculation, based on the updated information as well as allowable
appropriation limit adjustment factors such as voter-approved debt and capital outlay
expenditures. The Appropriations Limit for Fiscal Year 2018 is $158.37 million for funds subject
to the appropriation limits. The City's Fiscal Year 2018 budgeted appropriations are estimated
to be $26.88 million under the limit. As required by state law, documentation used to compute
the Appropriations Limit has been made available to the public at least fifteen days prior to the
Council meeting at which the Appropriations Limit is being adopted, and notice was published
of the availability of these materials.
Resource Impact
The adoption of the Fiscal Year 2018 Appropriations 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 A: Appropriations Limit Resolution
Attachment A, Exhibit 1: Appropriations Limit Calculation
1
RESOLUTION NO.XXXX
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO DETERMINING THE
CALCULATION OF THE APPROPRIATIONS LIMIT FOR FISCAL YEAR 2018
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 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 2018, which was adopted by ordinance of the Council on June 27, 2017; 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
3.69% percent change in California per capita income and a 0.82% 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 calculation, the City’s net appropriations subject to
limitation are approximately $131.49 million.
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 finds that, for Fiscal Year 2018,
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 $26.88 million.
SECTION 2. The Council hereby adopts the final calculation of the Appropriations Limit of
the City for Fiscal Year 2018, a copy of which is attached hereto as Exhibit 1.
ATTACHMENT A
2
SECTION 3. The Council finds that the adoption of this resolution does not constitute a
project under the California Environmental Quality Act, and, therefore, no environmental
assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST: APPROVED:
___________________________ _______________________________
City Clerk Mayor
APPROVED AS TO FORM: _______________________________
City Manager
___________________________
Senior Assistant City Attorney
_______________________________
Administrative Services Director
Attachment A, Exhibit 1
FY 2018 Adopted Budget 210.43$ 80.26$ 30.02$ 4.67$ 325.37$
Less:
Interfund Transfers (29.38)$ -$ (9.88)$ -$ (39.27)$
Allocated Charges (17.94)$ -$ -$ -$ (17.94)$
Non-Proceeds (49.16)$ (80.26)$ (7.25)$ -$ (136.68)$
Net Appropriations Subject to Limit 113.94$ -$ 12.88$ 4.67$ 131.49$
FY 2018 Per Capita Income Change (CA Department of Finance) 3.69%
Factor A 1.0369
FY 2018 Population Change (City of Palo Alto) 0.82%
Factor B 1.0082
151.49$
1.0454
FY 2018 Adopted Appropriations Limit 158.37$
Net Appropriations Subject to Limit 131.49$
Amount Under the Limit 26.88$
1.0537 1.0130 1.0674 151.49$ 109.51$ 41.97$
1.0382 1.0113 1.0499 141.92$ 100.60$ 41.31$
0.9977 1.0150 1.0127 135.17$ 82.93$ 52.24$
1.0512 1.0157 1.0677 133.48$ 90.28$ 43.20$
1.0377 1.0124 1.0506 125.01$ 96.73$ 28.28$
1.0251 1.0089 1.0342 119.00$ 89.00$ 30.00$
0.9746 1.0144 0.9886 115.06$ 78.94$ 36.12$
1.0062 1.0220 1.0283 116.38$ 72.00$ 44.38$
1.0429 1.0172 1.0608 113.17$ 78.64$ 34.53$
1.0442 1.0152 1.0601 106.68$ 73.30$ 33.38$
Factor A x Factor B
Amount Under
the Limit
Appropriations
Limit
Debt Service
Fund
The City of Palo Alto remains well within its appropriations limit in FY 2018. 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, Capital Projects Fund, and Special Revenue Funds.
Fiscal Year
2017
APPROPRIATIONS LIMITATION COMPLIANCE CALCULATION
FOR FISCAL YEAR 2018 ADOPTED BUDGET
($ IN MILLIONS)
Total Budgeted Appropriations General Fund
Capital
Projects Funds
Special
Revenue Funds
Combined
Funds
FY 2017 Adopted Appropriations Limit
Per Capita
Income Factor
Population
Change Factor
Total
Adjustment
Factor
Appropriations
Subject to Limit
On November 6, 1979, California voters approved Proposition 4, an initiative that added Article XIIIB to the state
Constitution. The provisions of this article place limits on the amount of revenue that can be appropriated by all entities of
government. The Appropriations Limit is based on actual appropriations during the 1978-1979 fiscal year, as increased
each year using specified population and inflationary growth factors.
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