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Home My WebLink About8.1 RevApproprLimit 97-98 '/" , \ CITY CLERK File # 1Hl~V5l-~[Q] . 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. .------------------------------------------------------------------- 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. . - ~- . '" RESOLUTION NO. - 98 A RESOLUTION OF THE CITY COUNCa OF THE CITY OF DUBLIN *************************** . 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: . Mayor ATTEST: City Clerk H:budgl!\wordlapprlimi\RSORVISE.DOC ~ .. A. CALCULATION OF REVISED FISCAL YEAR 1997-98 APPROPRIATIONS LIMIT SELECTION OF OPTIONAL FACTORS 1. - 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 - EXIDBIT A