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Home My WebLink About8.1 Approp Limits 08-09 CITY CLERK File # D~~~-[2d~ AGENDA STATEMENT CITY COUNCIL MEETING DATE: June 26, 2008 SUBJECT: Adoption of an Appropriations Limit for Fiscal Year 2008-2009 (Prepared by: Paul S. Rankin, Admt:.zi;)fative Services Director and Vivian Gong, Finance Manager) f)llL ATTACHMENTS: Resolution /J It! RECOMMENDATION: (\l.)'I ~ Approve the selected factors used to calculate the 2008-2009 Limit and adopt the Resolution. FINANCIAL STATEMENT: The proposed Limit for Fiscal Year 2008-2009 is $170,632,158 and only $41,132,528 in Appropriations for Fiscal Year 2008-2009 are subject to this Limit. DESCRIPTION: Each year the City Council is required by State Law to adopt an Appropriations Limit (Limit) in conjunction with the annual Budget process. The 2008-2009 Appropriations Limit is calculated by multiplying the adopted Limit for the prior year by a factor reflecting growth increases. Description of Appropriations Limit The laws regulating the application of the Limit forbid an agency from appropriating specific funds that would exceed the Limit. The restriction applies to appropriating monies categorized as "Proceeds of Taxes." The Limit carries forward each year and is subject to an adjustment in accordance with a specified formula. Each government entity is required to calculate a 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 is made annually and is based on a formula which may include the following factors (the City has the discretion to choose one factor from each category below): . 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. ------------------------------------------------------------------------------------------------------------- COPIES TO: Document in Gann Limit 10f2 ITEM NO.~ 2008-2009 Proposed Appropriations Limit Staff has prepared the calculations necessary to adopt the Limit for Fiscal Year 2008-2009 in accordance with State Law and with the Uniform Guidelines of the League of California Cities. The discretionary factors selected in calculating the 2008-2009 Limit are: (1) the change in the City population; and (2) change in non-residential assessed valuation. The data from the County Assessor is considered preliminary. If the Assessor provides a final computation related to "non-residential construction" added to the tax roll that is significantly different, Staff may recommend the adoption of a revision to the calculated Limit. Staff will evaluate the desirability of amending the Limit in conjunction with the adoption ofthe Limit next year. The new 2008-2009 Appropriations Limit as calculated and attached to the proposed Resolution is $170,632,158, based upon an adjustment factor of 12.66% over the Revised 2007-2008 Limit. The Preliminary 2008-2009 Budget (including the recommended Higher Service Levels) includes appropriations subject to the Limit totaling $41,132,528 that would be categorized as "Proceeds of Taxes". Therefore, the appropriations subject to the Appropriations Limit are below the allowed amount by $129,499,630. 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; an accurate base simplifies the calculation for the following Fiscal Year. The City must also adopt a Limit prior to the beginning of the Fiscal Year, in accordance with State Law. Staff has prepared a Resolution (Attachment 1) that will adopt an Appropriations Limit for 2008-2009. RECOMMENDATION Staff recommends that the City Council adopt the attached Resolution. 20f2 1';[.;2 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN *************************** ADOPTING AN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2008-2009 OF $170,632,158 WHEREAS, State law requires that an Appropriations Limit be adopted by the City Council in conjunction with the Annual Budget process; and WHEREAS, Article XIII B of the California Constitution places certain restrictions on appropriations made by cities; and WHEREAS, the restrictions are applicable to appropriations, which are defined as "Proceeds of Taxes"; and WHEREAS, the law allows the option to select the factors to be used in the calculation of the Appropriations Limit; and WHEREAS, the City must select between the following factors: (A) the change in City population, or (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 2008-2009 Appropriations Limit used the following discretionary factors: (1) the change in the City population and (2) change in non-residential assessed valuation and WHEREAS, the computation ofthe Appropriations Limit for 2008-2009 is described in the attached schedule, "Calculation of Fiscal Year 2008 - 2009 Appropriations Limit" attached hereto and by reference made a part hereof. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does hereby adopt the City of Dublin Appropriations Limit for Fiscal Year 2008-2009 of $170,632, 158. BE IT FURTHER RESOLVED that the limit has been calculated in accordance with State Law and is shown in the attached schedule. PASSED, APPROVED AND ADOPTED this 26th day of June, 2008. AYES: NOES: ABSENT: ATTEST: Mayor City Clerk 1-iervt 11 &,,/ "/2-6/08 ~ ATTACHM-kNT c2~ c;.';) ATTACHMENT "CALCULATION OF FISCAL YEAR 2008-2009 APPROPRIATIONS LIMIT" (Based on Fiscal Year 2007-2008 Limit) A. SELECTION OF OPTIONAL FACTORS 1. Population - City vs. County a. Change in Population, City of Dublin 01/01/2007 01/01/2008 % Increase 41,308 44,342 7.34% OR b. Change in Population, Alameda County 1,523,746 => Selected Factor #1 == City of Dublin Population Growth 7.34% 1,540,240 1.08% 2. State Income vs. City Non-Residential Buildinq a. Change in State Per Capita Income: 4.29% OR b. Chan~e in Non-Residential Assessed Valuation: 4.96%** * (Based on preliminary tax roll information available from the Alameda County Assessor May, 2008. The final tax roll figure may be different. ) => Selected Factor #2 == Change in Non-Residential Building 4.96% B. CALCULATION OF GROWTH LIMIT ADJUSTMENT The formula for calculating the adjustment is as follows: Selected Factor 1 + 100 == X 100 Selected Factor 2 + 100 == Y 100 (X) * (Y) == Fiscal Year 2008-2009 Appropriations Limit Adjustment Factor 7.34+100 == 1.0734 100 4.96+100 = 1.0496 100 Adjustment Factor FY 2008-2009:1.0734 x 1.0496 == 1.1266 C. CALCULATION OF APPROPRIATIONS LIMIT Fiscal Year 2007-2008 Appropriations Limit Fiscal Year 2008-2009 Adjustment Factor Fiscal Year 2008-2009 Appropriations Limit $151,457,623 x 1. 1266 $170,632,158