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Home My WebLink AboutItem 8.1 AdoptAppropriationsLimit (2) . . CITY OF DUBLIN AGENDA STATEMENT CITY COUNCIL MEETING DATE: June 21, 1994 SUBJECT: Adoption of Appropriations Limit: Revised 1991-92 Base Limit Revised 1992-93 and 1993-94 Limits 1994-95 Appropriations Limit ~ (Prepared by: paul S. Rankin, Assistant city Mqr) EXHIBITS ATTACHED: 1./Resolution Adopting Base Appropriations Limit For Fiscal Year 1991-92 As Adjusted By Factors Allowed By The Passage of proposition 111 2. ~Resolution Adopting A Revised Appropriations Limit For Fiscal Years 1992/93 and 1993/94 To Account For Revised Assessor Information 3. ~Adopting An Appropriations Limit For Fiscal Year 1994/95 of $20,855,341 RECOMMEHDATION~ ~. FINANCIAL STATEMENT: Approve the factors selected to calculate the Limits and adopt the Resolutions.. The 1994/95 Limit is $20,855,341.. only $11,605,925 in appropriations are Subject to this limit.. DESCRIPTION: Each year the City Council must adopt an Appropriations Limit in conjunction with the annual Budget process. The laws regulating the application of the Appropriations Limit forbid the appropriation of specific funds, which would exceed the Limit. The Appropriations Limit carries forward each year and is subject to an adjustment in accordance with a specified formula.. This report will describe recommended adjustments to the Appropriations Limits adopted in previous years as well as the adoption of an Appropriations Limit for Fiscal Year 1994/95. DescriDtion of A9propriations Limit 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 adjustment made annually is based on a formula which may include the following factors: change in Ci ty population, change in population for the entire County, change in State per capita income, and change in non-residential assessed valuation. As will be noted in the actual calculations selection of some of the factors are discretionary. The Appropriations Limit does not apply to all funds appropriated by the city Council. The law only applies to those appropriations that are funded by "Proceeds of Taxes". Proceeds of Taxes are narrowly defined by State Law. Historically, the applicable ap~ropriations made by the Ci ty of Dublin have always been well below the l~mit.. 1991-92 Revised Base Appro~riations Limit In June of 1990 the voters approved Proposition 111, which revised the methodology for calculating the Limi t. The data necessary to revise existing Limits was not distributed by the state until after the beginning of the 1990/91 Fiscal Year. When the city council adopted the 1992/93 Appropriations Limit, the documents indicated the following statement: ---------------------------------------------------------------------- ITEM NO. 8.1 COPIES TO: CITY CLERK FILE ~ . . . "The city's appropriations limit base for 92-93 calculations, is the 91-92 appropriation limit of $17,515,325 ad;usted by the chanqes allowed bv Proposition 111 approved in June of 1990 to S17.644.667.n(Underlining added) In order to have a clear record Staff has prepared a Resolution, which will specifically identify the revised 1991-92 Limit. (Exhibit 1) This will provide a starting point for adoption of an Appropriations LiJDit applicable to subsequent years. Fiscal Year 1992/93 and Fiscal Year 1993/94 Revised Appropriations Limits The Limits previously adopted by the City Council for Fiscal Years 1992/93 and 1993/94 both utilized the change in non-residential assessed valuation. This factor must be provided by the Alameda County Assessor and may be used in lieu of the change in state per capita income. In 1992/93 the per capita income figure was negative. It was to the city's benefit to utilize a factor which would provide growth in the Appropriations Limit. At the time that the Limit was calculated for both years the City relied upon information which appears to have been preliminary. staff has now obtained final figures from the Assessor for the affected years. Exhibi t 2 is a Resolution, which will revise the Appropriations Limi t previously adopted for each year. Exhibi ts A and B attached' to the Resolution, document how the calculation was made. The 1992/93 Limit begins with the 1991/92 Limit discussed above and is adjusted by the 1992/93 Growth Factor. The following compares the previously adopted Appropriations Limits to the revised calculations: 1992/93 1993/94 Net Difference As originally Adopted $18,978,048 $20,975,686 Pro~sed Revised Li.~t $19,054,829 $20,468,888 Difference $ 76,781 <$506,198> <$430,017> The factors selected for both years are (1) the change in the City Population and (2) the change in non-residential assessed valuation. Ado~tion of the proposed Resolution will bring the adopted Appropriations Lim~t into conformance with supporting data provided by the Assessor. 1994/95 ~DDropriations Limit Exhibit 3 including the attachment describes the calculation of the 1994-95 Appropriations Limit. The County Assessor had not fully completed the appraisal of additions to the non-residential valuation at the tiae that this report was prepared. Therefore, the 1994/95 Appropriations Limit was calculated using; (1) the Change in the City population and (2) the Change in the state per capita Income.. In the event that the final Assessor figures would benefit the city, a revision :may be proposed at a later date. The Total 1994/95 Appropriations Limit is $20,855,341. Staff has calculated that total a~propriations of $11,605,925 are subject to this limit. Therefore, the C1ty can have significant growth in the proceeds of taxes before being impacted by the Appropriations Limit. Staff recommends that the city council adopt the three Resolutions. . . RESOLUTION NO.. - 94 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN *************************** Adopting The Base Appropriations Limit For Fiscal Year 1991-92 As Adjusted By Factors Allowed By The Passage of Proposition 111 WHEREAS, The city is required to annually adopt an Appropriations Limit in accordance with the state Constitution; and WHEREAS, In June of 1990, the voters of California adopted Proposition 111, which revised the formula for calculating the Appropriations Limit; and WHEREAS, Prior to June of 1990 adjustments to the Limit were based upon the change in the city population and the lesser of;(l) the change in the U. S. Consumer Price Index, or, (2) the change in the State per capita personal income; and WHEREAS, proposition 111 allowed the recalculation of the Appropriations Limit starting with 1986-87 and adjusting each subsequent year by the change in population and either; (1) the change in the State per capita income, or, (2) the change in the assessed valuation of local non-residential construction; and WHEREAS, The 1992/93 Budget Document presented a revised base Appropriations Limit for Fiscal Year 1991-92 of $17,644,667; and WHEREAS, The revised base Limit was calculated by starting with the 1986-87 Limit and adjusting it by (1) the growth in the City population except for FY 91/92, when the change in the county population factor was used, and (2) the change in State per capita personal income, as allowed under Proposition 111. NOW, THEREFORE, BE IT RESOLVED that the City council of the city of Dublin does hereby adopt the Appropriations Limit For Fiscal Year 1991- 1992 as $ 17,644,677. BE IT FURTHER RESOLVED that said Limit was calculated in accordance with State Law and shall be utilized as the base limit for calculations in subsequent years. PASSED, APPROVED AND ADOPTED this AYES: th day of , 1994. NOES: ABSENT: Mayor ATTEST: City Clerk EXHIBIT L . . RESOLUTION NO.. - 94 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN *************************** ADOPTING A REVISED APPROPRIATIONS LIMIT FOR FISCAL YEAR 1992/93 AND FISCAL YEAR 1993/94 TO ACCOUNT FOR REVISED ASSESSOR INFORMATION ON THE CHANGE IN NON- RESIDENTIAL ASSESSED VALUATION WHEREAS, State law allows for revisions to the Appropriations Limit to be adopted by the City Council: and WHEREAS, In June of 1990, the voters of California adopted Proposition 111, which revised the formula for calculating the Appropriations Limit: and WHEREAS, Proposition 111 allowed the calculation of the Appropriations Limit adjusted by the change in population and either: (1) the change in the state per capita income, or, (2) the change in the assessed valuation of local non-residential construction: and WHEREAS, The Alameda County Assessor needed time to develop a system for reporting the change in non-residential assessed valuation: and WHEREAS, The Assessors records are now capable of providing historical information on this factor: and WHEREAS, The city Council previously adopted a 1992-93 and a 1993-94 Appropriations Limit using preliminary Assessor Data: and WHEREAS, for auditin9 ~urposes and consistency it is important to have an adopted Approprations Llmlt based upon the revised Assessor Data: and WHEREAS, The revised 1992-93 and Revised 1993-94 Appropriations Limits were calculated using: (1) the Growth in the City Population, and (2) the change in non-residential assessed valuation: and WHEREAS, The calculation and restatement of the Appropriation Limits are described in Exhibit A (1992-93) and Exhibit B (1993-94), 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 Revised Appropriations Limits For Fiscal Year 1992-1993 and 1993-94 as described in Exhibits A and B. PASSED, APPROVED AND ADOPTED this AYES: th day of , 1994. NOES: ABSENT: Mayor ATTEST: city Clerk ~'ll,ifl~;lI~. . ~T". d.. & \.Y ~,.".~, fir G l:lL~ ~r1! 'H :"\F . 1;1..,,1 ,..~ <i ill ~~" ~ .. ...........-!- ~~ i.:!............. f!i ~ . . RESTATEMENT OF FISCAL YEAR 1992-93 APPROPRIATIONS LIMIT A. SELECTION OF OPTIONAL FACTORS I. POPulation - City VB. County % Decrease 1/1/91 1/1/92 % Increase City of Dublin 22,382 24,020 7.32% OR Alameda County 1,280,875 1,301,156 1.58% Selected Factor = City Population Growth + 7.32% II. State Income vs. City Non-Residential Buildinq Change in state Per Capital Income = (0.64%) OR change in Non-Residential Assessed Valuation = +0.6261% Selected Factor = Non-Residential Assessed Valuation = 0.6261% B. CALCULATION OF GROWTH LIMIT ADJUSTMENT The formula for calculating the adjustment is as follows: Selected Factor I + 100 100 = IX Selected Factor II + 100 100 = Y (X) x (Y) = Fiscal Year 1992-93 Appropriations Limit Adjustment Factor 7.32 + 100 = 1.07320 100 .6261 + 100 = 1.00626 100 1.07320 x 1.00626 = 1.07992 = Fiscal Year 1992-93 Adjustment Factor C. CALCULATION OF APPROPRIATIONS LIMIT Fiscal Year 1991-92 Adjusted Appropriations Limit = $ 17,644,667 Fiscal Year 1992-93 Adjustment Factor x 1.07992 Adjusted Fiscal Year 1992-93 Limit $ 19,054,829 EXHIBIT A . . ,RESTATEMENT OF FISCAL YEAR 1993-94 APPROPRIATIONS LIMIT A. SELECTION OF OPTIONAL FACTORS I. Population - Citv vs. Countv % Decrease 1/1/92 1/1/93 % Increase City of Dublin 24,140 24,704 2.34% OR Alameda county 1,304,267 1,324,430 1. 55% Selected Factor = City Population Growth + 2.34% II. State Income vs. Citv Non-Residential Buildinq I Change in state Per Capital Income = 2.72% OR Change in Non-Residential Assessed Valuation 4.965% Selected Factor = Non-Residential Assessed Valuation = 4.965% B. CALCULATION OF GROWTH LIMIT ADJUSTMENT The formula for calculating the adjustment is as follows: Selected Factor I + 100 100 = x Selected Factor II + 100 100 = Y (X) x (Y) = Fiscal Year 1993-94 Appropriations Limit Adjustment Factor 2.34 + 100 100 = 1. 02340 4.965 + 100 100 = 1. 04965 1.02340 x 1.04965 = 1.07421 = Fiscal Year 1993-94 Adjustment Factor c. CALCULATION OF APPROPRIATIONS LIMIT Fiscal Year 1992-93 Adjusted Appropriations Limit = Fiscal Year 1993-94 Adjustment Factor $ 19,054,829 x 1. 07421 Adjusted Fiscal Year 1993-94 Limit $ 20,468,888 EXHIBIT B . . RESOLUTION NO. - 94 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN *************************** ADOPTING AN APPROPRIATIONS LIMIT FOR FISCAL YEAR 1994/95 OF $20,855,341 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 ~n 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 of local non-residential construction; and WHEREAS, The Alameda County Assessor does not have complete data available for 1994/95 related to non-residential assessed valuation; and WHEREAS, In the event that the final change in non-residential assessed valuation is larger than the selected factor, the city Council may be requested to adopt a revised calculation at a future meeting; and WHEREAS, The 1994-95 Appropriations Limit used: (1) the Growth in the City Population and (2) the Change in the State per capita income; and WHEREAS, The calculation of the Appropriation Limit for 1994/95 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 City of Dublin Appropriations Limits For Fiscal Year 1994-95 of $20,855,341. 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 th day of , 1994. AYES: NOES: ABSENT: Mayor ATTEST: city Clerk E"o:;;';\ t; 'H~~" t'Illi'~ 3> ~~~.~. ~ J\h UJr ; . . . CALCULATION OF FISCAL YEAR 1994-95 APPROPRIATIONS LIMIT A. SELECTION OF OPTIONAL FACTORS I. Population - city vs. County % Decrease 1/1/93 1/1/94 % Increase City of Dublin 24,658 24,947 1.17% OR = Alameda County 1,321,342 1,334,127 .97% I Selected Factor = City Population Growth + 1.17% II. State Income vs. City Non-Residential Buildina Change in State Per Capita Income = 0.71% OR I Change in Non-Residential Assessed Valuation = * *(Complete information not available from Alameda County) Selected Factor = State Per Capita Income = 0.71% B. CALCULATION OF GROWTH LIMIT ADJUSTMENT The formula for calculating the adjustment is as follows: Selected Factor I + 100 100 = x Selected Factor II + 100 100 Y (X) x (Y) = Fiscal Year 1994-95 Appropriations Limit Adjustment Factor 1. 17 + 100 100 '" 1. 01170 0.71 + 100 100 == 1.00710 1.01170 x 1.00710 = 1.01888 = Fiscal Year 1994-95 Adjustment Factor C. CALCULATION OF APPROPRIATIONS LIMIT Fiscal Year 1993-94 Adjusted Appropriations Limit = $ 20,468,888 Fiscal Year 1994-95 Adjustment Factor I x 1.01888 Fiscal Year 1994-95 Limit $ 20,855,341 EXHIBIT A