HomeMy WebLinkAboutStaff Report 14442
City of Palo Alto (ID # 14442)
City Council Staff Report
Meeting Date: 6/20/2022 Report Type: Consent Calendar
City of Palo Alto Page 1
Title: Adoption of a Resolution Proposing the Appropriations Limit for Fiscal
Year 2023
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that Council adopt the attached Resolution determining the
Proposition 4 (GANN) Appropriations Limit for Fiscal Year 2023 (Attachment A). The
City's Fiscal Year 2023 appropriations are estimated to be $64.91 million under the limit
based on the Fiscal Year 2023 Budget, as recommended to the City Council for review
and adoption on June 20, 2022.
Background
California voters approved an initiative on November 6, 1979 that added Article XIIIB to
the State Constitution, as amended by 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 2023, the
City is using the 2021-2022 percent change in population growth of Palo Alto in the
calculation. 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 provided annually by the California Department of Finance. 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 2023 is $203.30 million for funds
subject to the appropriation limits. The City's Fiscal Year 2023 budgeted appropriations
are estimated to be $64.91 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 2023 Appropriations Limit has no impact on City
resources.
Stakeholder Engagement
A public notice was provided on June 3, 2022 stating the availability of the calculation
materials on the City’s website, and that the Appropriations Limit is being adopted on
June 20, 2022.
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: GANN Resolution FY 2023
• Attachment B: Exhibit 1 GANN Notice FY 2023
NOT YET APPROVED
ATTACHMENT A
1
Resolution No.____
Resolution of the Council of the City of Palo Alto Determining the Calculation of the
Appropriations Limit for Fiscal Year 2023
R E C I T A L S
A. 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
B. Since fiscal year 1991, the City is permitted to annually adjust its Limit in accordance with
inflation and population adjustment factors; and
C. 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 2023, which was adopted by ordinance of the Council on June 20, 2022; and
D. 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 7.55%
percent change in California per capita income and a 0.07% percent change in the
population growth for the City of Palo Alto; and
E. 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
F. According to the final calculation, the City’s net appropriations subject to limitation are
approximately $138.39 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 2023, 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 $64.91 million.
NOT YET APPROVED
ATTACHMENT A
2
SECTION 2. The Council hereby adopts the final calculation of the Appropriations Limit of
the City for Fiscal Year 2023, a copy of which is attached hereto as Exhibit 1.
SECTION 3. The Council finds that the adoption of this resolution does not constitute a
project under the California Environmental Quality Act, and, therefore, no environmental
assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST: APPROVED:
___________________________ _______________________________
City Clerk Mayor
APPROVED AS TO FORM: _______________________________
City Manager
___________________________
City Attorney
_______________________________
Administrative Services Director
Exhibit 1
FY 2023 Adopted Budget 247.55$ 96.50$ 24.36$ 8.79$ 377.21$
Less:
Interfund Transfers (25.36)$ (3.84)$ (19.20)$ -$ (48.40)$
Allocated Charges (22.72)$ (0.38)$ (0.33)$ -$ (23.42)$
Non-Proceeds (58.79)$ (92.52)$ (6.92)$ (8.77)$ (167.00)$
Net Appropriations Subject to Limit 140.68$ (0.23)$ (2.08)$ 0.02$ 138.39$
FY 2023 Per Capita Income Change (CA Department of Finance)7.55%
Factor A 1.075500
FY 2023 Population Change (City of Palo Alto)0.07%
Factor B 1.000007
189.03$
1.075508
203.30$
Net Appropriations Subject to Limit 138.39$
Amount Under the Limit 64.91$
2022 1.0573 0.9999 1.0572 189.03$ 127.09$ 63.07$ 2021 1.0373 1.0037 1.0411 179.86$ 113.06$ 66.81$ 2020 1.0385 1.0033 1.0419 171.74$ 127.42$ 45.34$ 2019 1.0367 1.0040 1.0408 164.83$ 114.94$ 50.87$ 2018 1.0369 1.0082 1.0454 158.36$ 131.49$ 26.88$ 2017 1.0537 1.0130 1.0674 151.48$ 109.51$ 41.97$ 2016 1.0382 1.0113 1.0499 141.92$ 100.60$ 41.31$ 2015 0.9977 1.0150 1.0127 135.17$ 82.93$ 52.24$ 2014 1.0512 1.0157 1.0677 133.48$ 90.28$ 43.20$ 2013 1.0377 1.0124 1.0506 125.01$ 96.73$ 28.28$ 2012 1.0251 1.0089 1.0342 119.00$ 89.00$ 30.00$
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.
FY 2022 Adopted Appropriations Limit
Factor A x Factor B
The City of Palo Alto remains well within its appropriations limit in FY 2023. 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 Per Capita Income
Factor
Population
Change Factor
Total
Adjustment
Factor
Appropriations
Limit
Appropriations
Subject to Limit
Amount Under
the Limit
FY 2023 Adopted Appropriations Limit
APPROPRIATIONS LIMITATION COMPLIANCE CALCULATION
FOR FISCAL YEAR 2023 ADOPTED BUDGET
($ IN MILLIONS)
Total Budgeted Appropriations General Fund Capital
Projects Funds
Special
Revenue Funds Debt Service Fund Combined
Funds