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Home My WebLink About4.13 FY 2011-2012 AppropriationsFinance Manager DESCRIPTION: STAFF REPORT CITY CLERK DUBLIN CITY COUNCIL File # DATE: June 21, 2011 TO: Honorable Mayor and City Councilmembers FROM: Joni Pattillo, City Manager 3 SUBJECAdoption of an Appropriations Limit for Fiscal Year 2011-2012 Prepared By: Vivian Gong, Finance Manager and Paul S. Rankin, Administrative Services Director EXECUTIVE SUMMARY: 3 0 Each year the City Council is required by State Law to adopt an Appropriations Limit (Limit) in conjunction with the annual Budget process. The Fiscal Year 2011-2012 Appropriations Limit is calculated by multiplying the adopted Limit for the prior year by a set of factors to create a new limit. The Appropriations Limit for Fiscal Year 2011-2012 exceeds the appropriations which are subject to the Limit, by a significant amount. FINANCIAL IMPACT: The proposed Limit for Fiscal Year 2011-2012 is $189,083,145 and only $37,975,638 of the total City appropriations for Fiscal Year 2011-2012 are subject to this Limit. RECOMMENDATION: Staff recommends that the City Council adopt the Resolution adopting an Appropriation Limit for Fiscal Year 2011-2012 of $189,083,145. Q'eb.)1-R_D Submitted By Reviewed By Revi Administrative Services Dir. Assistant Each year the City Council is required by State Law to adopt an Appropriations Limit (Limit) in conjunction with the annual Budget process. The Fiscal Year 2011-2012 Appropriations Limit is calculated by multiplying the adopted Limit for the prior year by factors reflecting economic changes over the prior year. Page 1 of 2 ITEM NO. 14 4 f 3 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 the availability of the changes 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. 2011-2012 Proposed Appropriations Limit Staff has prepared the calculations necessary to adopt the Limit for Fiscal,Year 2011-2012 in accordance with State Law and with the Uniform Guidelines of the League of California Cities. The discretionary factors selected in calculating the 2011-2012 Limit are: (1) the change in the City population; and (2) change in State Per Capita Income. The new Fiscal Year 2011-2012 Appropriations Limit as calculated and attached to the proposed Resolution is $189,083,145, based upon an increased adjustment factor of 4.75% which is applied to the 2010-2011 Limit. The Preliminary Fiscal Year 2011-2012 Budget includes appropriations subject to the Limit totaling $37,975,638 that would be categorized as "Proceeds of Taxes". Therefore, the appropriations subject to the Appropriations Limit are below the allowed amount by $151,107,507. 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. 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 Fiscal Year 2011-2012. NOTICING REQUIREMENTS/PUBLIC OUTREACH: On June 1, 2011 a Public Notice was posted stating that the factors used in calculating the Appropriations Limit were available for public review; the notice was also displayed on the City website; and the information was also contained in the Fiscal Year 2011-2012 Preliminary Budget and Financial Plan. ATTACHMENTS: 1. Resolution adopting an Appropriations Limit for Fiscal Year 2011- 2012 of $189,083,145 Page 2 of 2 4, ~ p RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ************~~*~****~**~*~~ ADOPTING AN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2011-2012 OF $189,083,145 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 meet the definition of a "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, for one of the adjustment factors the City must select between: (A) the change in City population, or (B) Countywide population, and the City has selected the Change in City population; and WHEREAS, for the second adjustment factor the City must select befinreen: (1) the change in the State per capita income, or, (2) the change in the assessed valuation of local non-residential construction, and the City has selected the change in State per capita income; and . WHEREAS, the calculation of the Appropriations Limit for Fiscal Year 2011-2012 is described in Exhibit A, 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 Fiscal Year 2011-2012 City of Dublin Appropriations Limit as $189,083,145. BE IT FURTHER RESOLVED that the limit has been calculated in accordance with State Law and is shown in Exhibit A, attached hereto.. PASSED, APPROVED AND ADOPTED this 21St day of June, 2011. AYES: NOES: ABSENT: ATTEST: Mayor City Clerk "!~,/3 ~~I-le ATTACHMENT 1 ~ ~ EXHIBIT A Calculation of Fiscal Year 2011 - 20'12 Appropriations Limit (Based on Fiscal Year.2010 - 2011 Limit) A. Selection of Optional Factors 1. Chan e in Po ulation - Ci vs. Count . Factors 1/1/2010* 1/1/2011 % Increase a. City of Dublin 43,425 44,374 2.19% b. Count of Alameda 1,506,107 1,518,000 0.79% *State Controller adjusted 2010 population based on 2010 Census The City selected Factor 1a. City of Dublin population growth 2.19% 2. Change in State per Capita Personal Income vs. City Non Residential Building Construction. Factors % Chan e a. Change in State per Capita Personal Income 2.51% b. Chan e in Non Residential Assessed Valuation* 1.02% The City selected Factor 2a. Change in State per Capita Persona{ Income 2.51% *Based on Preliminary tax roll information available from the Alameda County Assessor as of May 2, 2011. The final tax roll figure may be different. B. FY2011-2012 Growth Adiustment Factor The formula for calculating the adjustment is as follows: Selected Factor 1+ 100 = X Selected Factor 2+ 100 = Y (X) *(Y) = Fiscal Year 2011 -2012 Appropriations Limit Adjustment Factor X= Selected Factor #1 + 100 = 2.19+100 = 1.0219 100 100 Y= Selected Factor #2 + 100 =2.51+100 = 1.0251 100 100 Calculation of factor for FY2011-2012 = X~ Y Adjustment Factor for Fiscal Year 2011- 2012: 1.0219 x 1.0251 = 1.0475 C. Calculation of Appropriations Limit Fiscal Year 2010-2011 Appropriations Limit $180,508,969 Fiscal Year 2011-2012 Adjustment Factor x 1.0475 Fiscal Year 2011-2012 Appropriations Limit $189,083,145 Exhibit A