HomeMy WebLinkAboutStaff Report 2304-135530.Adoption of a Resolution Proposing the Appropriations Limit for Fiscal Year 2024 Late
Packet Report
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City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Administrative Services
Meeting Date: June 19, 2023
Report #:2304-1355
TITLE
Adoption of a Resolution Proposing the Appropriations Limit for Fiscal Year 2024
RECOMMENDATION
Staff recommends that Council adopt the attached Resolution determining the Appropriations
Limit for Fiscal Year 2024 (Attachment A). The City's Fiscal Year 2024 appropriations are
estimated to be $53.86 million under the limit based on the Fiscal Year 2024 Budget, as
recommended to the City Council for review and adoption on June 19, 2023.
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 2024, the City is using the 2022-
2023 percent change in population growth of the County of Santa Clara in the calculation. The
City typically uses the highest factor in order to provide maximum appropriation flexibility.
ANALYSIS
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 appropriations limit calculation, based on the
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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 2024 is
$211.80 million for funds subject to the appropriation limits. The City's Fiscal Year 2024 budgeted
appropriations are estimated to be $53.86 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.
FISCAL/RESOURCE IMPACT
The adoption of the Fiscal Year 2024 Appropriations Limit has no impact on City resources.
STAKEHOLDER ENGAGEMENT
A public notice was provided on June 2, 2023 stating the availability of the calculation materials
on the City’s website, and that the Appropriations Limit is being adopted on June 19, 2023.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because establishing the Fiscal
Year 2024 appropriations limit is a government funding mechanisms or fiscal activity which
does not involve any commitment to any specific project which may result in a potentially
significant physical impact on the environment. CEQA Guidelines section 15378(b)(4).
ATTACHMENTS
Attachment A: GANN Resolution FY 2024
Attachment B: GANN Notice FY 2024
APPROVED BY:
Kiely Nose, Assistant City Manager
NOT YET APPROVED
Attachment A
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Resolution No.XXXX
Resolution of the Council of the City of Palo Alto Establishing the City’s Appropriations
Limit for Fiscal Year 2024
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 adjust its appropriations limit
annually based on inflation and population adjustment factors; and
WHEREAS, pursuant to Government Code Section 37200, the calculation of the
appropriations limit and the total appropriations subject to the limit were set forth in the
annual budget of the City for Fiscal Year 2024, which was adopted by ordinance of the Council
on June 19, 2023; and
WHEREAS, pursuant to Government Code sections 7901 and 7910, the final calculation
of the appropriations limit has been determined, and the adjustment factors on which the
calculation is based are a 4.44% percent change in California per capita income and a -0.25%
percent change in the population growth for the County of Santa Clara; and
WHEREAS, the documentation used in the determination of the appropriations 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 $157.94 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 2024,
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 are under the appropriations limit
by approximately $53.86 million.
NOT YET APPROVED
Attachment A
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SECTION 2. The Council hereby adopts the final calculation of the appropriations limit
of the City for Fiscal Year 2024, a copy of which is attached hereto as Exhibit 1.
SECTION 3. The Council finds that the adoption of this resolution does not constitute
a project under the Section 15378(b)(4) of California Environmental Quality Act Guidelines
because establishing the annual appropriations limit is a fiscal activity, and, therefore, no
environmental assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST: APPROVED:
___________________________ _______________________________
City Clerk Mayor
APPROVED AS TO FORM: _______________________________
City Manager
___________________________
Assistant City Attorney
_______________________________
Administrative Services Director
Attachment B
FY 2024 Adopted Budget 279.58$ 138.31$ 25.74$ 12.02$ 455.65$
Less:
Interfund Transfers (33.58)$ (7.38)$ (19.67)$ -$ (60.63)$
Allocated Charges (25.87)$ (0.28)$ (0.42)$ -$ (26.57)$
Non-Proceeds (57.79)$ (132.92)$ (7.49)$ (12.32)$ (210.52)$
Net Appropriations Subject to Limit 162.35$(2.26)$ (1.84)$(0.30)$157.94$
FY 2023 Per Capita Income Change (CA Department of Finance)4.44%
Factor A 1.0444
FY 2023 Population Change (County of Santa Clara)-0.25%
Factor B 0.9975
203.30$
1.041789
211.80$
Net Appropriations Subject to Limit 157.94$
Amount Under the Limit 53.86$
2023 1.0755 1.0000 1.0756 203.30$ 138.39$ 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$
APPROPRIATIONS LIMITATION COMPLIANCE CALCULATION
FOR FISCAL YEAR 2024 ADOPTED BUDGET
($ IN MILLIONS)
Total Budgeted Appropriations General Fund Capital
Projects Funds
Special
Revenue Funds
Debt Service
Fund
Combined
Funds
FY 2023 Adopted Appropriations Limit
Factor A x Factor B
FY 2024 Adopted Appropriations 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.
The City of Palo Alto remains well within its appropriations limit in FY 2024. 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