HomeMy WebLinkAboutItem 8.1 RevApproprLimit 97-98
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CITY CLERK
File # 1Hl~V5l-~[Q]
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AGENDA STATEMENT
CITY COUNCIL MEETING DATE: (June 29, 1998)
SUBJECT:
Adoption of a Revised Appropriations Limit for 1997/98
tI (prepared by: Paul S. Rankin, Assistant City Manager)
EXHIBITS ATTACHED:
1.
Proposed Resolution
RECOMMENDATION: /'t./uD' Approve the selected factors used to calculate the Revised 1997/98
''fV' Limit and adopt the Resolution.
FJNANCIAL STATEMENT:
The Revised 1997/98 Limit is $43,075,087 and based on all
expenditures subject to the Limit, the City spending remains well
below the maximum allowed.
DESCRIPTION:
Each year the City Council is required by State Law to adopt an Appropriations Limit in conjunction with
the annual Budget process. The 1997/98 Appropriations Limit was calculated and adopted by Resolution
86-97 on June 25, 1997. At the time the Limit was adopted information was not available related to one
of the optional factors which can be used in the formula which determines the total Limit. Now that the
information is available it is appropriate for the City Council to consider adopting a Revised 1997-98
.APpropriations Limit in accordance with the governing laws and regulations.
Description of Appropriations Limit
The laws regulating the application of the Appropriations Limit, forbid an agency from appropriating
specific funds which would exceed the Limit. The restriction applies to appropriating monies categorized
as Proceeds of Taxes. The Appropriations Limit carries forward each year and is subject to an adjustment
in accordance with a specified formula
Each government entity is required to calculate an Appropriations Limit and include it as part of the
Annual Budget. This Limit may also be referred to as the Gann Limit or Proposition 4 Limit. The City
has complied with this requirement as well as the posting of the proposed calculation prior to adoption.
The adjustment made annually is based on a formula which may include the following factors:
. Change in City population; or
. Change in population for the entire County;
and
. Change in State per capita income; or
. Change in non-residential assessed valuation.
As will be noted in the actual calculations, selection of some of the factors are discretionary. Typically,
an agency selects from those factors which provide for the largest growth in the Limit.
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COPIES TO:
ITEM NO. -8...i
Hlbudget/97 -98bud/ Apprlimilagaprlmt.doc
Although the City is well below its allowed Limit, it is important to make revisions in a timely manner. .
For record keeping purposes, the Limit carries forward each Fiscal Year, and having an accurate b~e \
simplifies the calculation for the following Fiscal Year.
1997-98 Proposed Revised Appropriations Limit .
Staffhas prepared the calculations necessary to adopt a Revised Appropriations Limit for 1997/98 in
accordance with State Law. The numerical calculations and changes are attached as Exhibit A to the
Resolution (Exhibit 1).
The Revised Fiscal Year 1997-98 calculation includes a minor modification to the January 1, 1997
population figures as reported by the State Department of Finance. Once per year the Department of
Finance updates the population estimate calculated for the previous year. The population figures used in
. the Revised calculation represent the Updated 1997 population estimates issued in May 1998. Both the
City and the County population factors were revised. The growth in the City population remained larger
than the growth in the County population and this factor was selected for use in the calculation.
Availability of Non-Residential Assessed ValuatioD
The second option allows the City to use either the increase in the State Per Capita Income; or, the change
in local Assessed Valuation, due to "Non~Residential Construction". The approved formula for
calculating the change in the assessed valuation compares the total change in assessed valuation to the
amount related strictly to non-residential improvements. When the 1997-98 Appropriations Limit was
adopted by the City Council, the data necessary to calculate the change in Assessed Valuation due to Non-
Residential Construction was not available. Therefore, the City automatically used the change in State
Per Capita Income.
In May of 1998 the County Assessor provided the necessary data based upon the final 1997-98 property
tax roll. The use of this factor will make a material difference in the calculated 1997-98 Appropriations .
Limit. Based upon this information the factor used in the Fiscal Year 1997-98 Revision is the 9.104%
related to non-residential construction, instead of the State Per Capita Income Factor, which was only
4.67%.
Revised Appropriations Limit
Based upon the revised data the Revised Fiscal Year 1997-98 Appropriations Limit is $43,075,087 as
shown on Resolution Exhibit A. Upon adoption, this figure becomes the base limit, which will be
adjusted by the adjus1ment factor calculated for the subsequent fiscal year.
The implementation of the laws related to the Appropriations Limit, resulted in the publication of
Uniform Guidelines by the League of California Cities. lbis publication is also relied upon by the
independent auditors as they must issue a review of the calculation and identifY that the methodology is
consistent with the guidelines. The calculations used to determine the Revised Limit as presented, are
consistent with both the guidelines and the past calculations. The Revised 1997-98 calculation has
increased the originally adopted 1997-98 Limit by $1,907,583.
The Revised 1997/98 Appropriations Limit as calculated on Exhibit A of the Proposed Resolution
(Exhibit I) is $43,075,087. Total appropriations including all sources (proceeds of Taxes and Non-
Proceeds of Taxes) in Fiscal Year 1997-98 are significantly below the allowed amount.
Proposed Resolution
Staffhas prepared a Resolution (Exhibit I) which will adopt the Revised Appropriations Limit for
1997/98. Staff recommends that the City Council adopt the Resolution. .
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RESOLUTION NO. - 98
A RESOLUTION OF THE CITY COUNCa OF THE CITY OF DUBLIN
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ADOPTING A REVISED APPROPRIATIONS LIMIT
FOR FISCAL YEAR 1997/98 OF $43,075,087
WHEREAS, State law requires that an Appropriations Limit (<<Limit") be adopted by the City Council in
conjunction with the Annual Budget process; and
WHEREAS, the City Council previously adopted Resolution No. 86-97 establishing an Appropriations
Limit for Fiscal Year 1997-98; and
WHEREAS, at the time the "'Limit" was adopted certain information related to the amount of <<Non-
Residential Assessed Valuation" was unlmown; and
WHEREAS, the lack of County Assessor information precluded the City from selecting the optional
factor of Assessed Valuation; and
WHEREAS, Assessed Valuation information and revised population estimates are now available; and
WHEREAS, the law allows the option to select the factors to be used in the calculation of the <<Limit";
and
WHEREAS, the City must select between the following factors: (A) the change in City population, Of, (B)
Countywide population, and either: (1) the change in the State per capita income, or, (2) the change in the
assessed valuation oflocal non-residential construction; and
.
WHEREAS, the Revised 1997-98 Appropriations Limit uses the : (1) the Growth in the City Population
and (2) the change in the assessed valuation oflocal non-residential construction as shown in Exhibit A:,
and
WHEREAS, this represents a change from the 'Limit" calculated in Resolution 86-97 which utilized the
change in State per capita income.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby
adopt the City of Dublin Revised Appropriations Limit for Fiscal Year 1997-98 of$43,075,087, as shown
in Exhibit A
PASSED, APPROVED AND ADOPTED this 29th day of June, 1998.
AYES:
NOES:
ABSENT:
ABSTAIN:
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Mayor
ATTEST:
City Clerk
H:budgl!\wordlapprlimi\RSORVISE.DOC
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A.
CALCULATION OF REVISED FISCAL YEAR 1997-98
APPROPRIATIONS LIMIT
SELECTION OF OPTIONAL FACTORS
1.
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Population - City vs. County
(% Decrease)
1/1/97 % Increase
25,544 2.246%
25, 445 1.64P%
1,371,793 2.175%
Alameda Co~nty 1,342,598 1,365,938 1.138%
FACTOR #1 REVISED BASED ON State of California Population Report - California Dept. of Finance
1/196 Figures As Issued May 1, 1997: 1/1/97 Figures As Issued May 1, 1998
11Jrll\llll!11I11)1"_I_W,IIIJella"~.11It'_.i'II11'
1/1/96
City of Dublin
24,983
QB
2.
State Income vs. City Non-Residential Building
Change in State Per Capita Income ::; 4.67%
I
Change in Non-Residential Assessed Valuation ::; (Not Av3il:1ble Juno 1 997t
.(Based on Fiscal Year 1997-98 final tax roll information available from the Alameda
County Assessor May 15,1998, the change for the City of Dublin was 9.104%.)
QB
B.
CALCULATION OF GROWTH LIMIT ADJUSTMENT
I-
The formula for calculating the adjustment is as follows:
Selected Factor 1 + 100
100
::;
x
Selected Factor 2 + 100
100
(X) x (Y) ::; Fiscal Year 1997~98 Appropriations Limit Adjustment Factor
2.246 1.02246
4-:-849+100 ::; 1.01819
100
::;
Y
9.104
4,97+100
100
::;
1.09104
1.0'1670
1.02246 x 1.09104 ::; 1.1155 ::; Revised 1997/98 Adjustment Factor
1.018'19 x 1.01670 1.10661::; 1997/98 Adjustment Factor
c. CALCULATION OF APPROPRIATIONS LIMIT
Fiscal Year 1996-97 Adopted Appropriations Limit ::
Fiscal Year 1997-98 Adjustment Factor x
$ 38,615,049
1.06611.1155
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EXIDBIT A