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HomeMy WebLinkAboutItem 4.03 Appropriation Limit 09-10UrvU~lf~ CITY CLERK X11 File # ^©0®-~~ ~- ~ -~• a~ ,C~i~ ~~LIFOR~~b AGENDA STATEMENT CITY COUNCIL MEETING DATE: June 23, 2009 SUBJECT: Adoption of an Appropriations Limit for Fiscal Year 2009-2010. (Prepared by: Paul S. Rankin, Administrative Services Director and Vivian Gong, Finance Manager) (`J~ ATTACHMENTS: Resolution RECOMMENDATION: Adopt the Resolution Adopting an Appropriation Limit for Fiscal Year 2009-2010 of $181,928,007. FINANCIAL STATEMENT: The proposed Limit for Fiscal Year 2009-2010 is $181,928,007 and only $34,740,274 in Appropriations for Fiscal Year 2009-2010 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 Fiscal Year 2009-2010 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: H:\Budget\Agenda Statements\09_Agenda Statement -Appropriation Limit.doc 1 Of 2 ITEM NO. ~• / ! ' ~ 2009-2010 Proposed Appropriations Limit Staff has prepared the calculations necessary to adopt the Limit for Fiscal Year 2009-2010 in accordance with State La~v and with the Uniform Guidelines of the League of California Cities. The discretionary factors selected in calculating the 2009-2010 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 of the Limit next year. The new 2009-2010 Appropriations Limit as calculated and attached to the proposed Resolution is $181,928,007, based upon an adjustment factor of 6.62% over the revised 2008-2009 Limit. The Preliminary 2009-2010 Budget (including the recommended Higher Service Levels) includes appropriations subject to the Limit totaling $34,740,274 that would be categorized as "Proceeds of Taxes". Therefore, the appropriations subject to the Appropriations Limit are below the allowed amount by $147,187,733. 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 2009-2010. RECOMMENDATION Staff recommends that the City Council adopt the Resolution adopting an Appropriation Limit for Fiscal Year 2009-2010 of $181,928,007. 2 of 2 1~~~~. RESOLUTION NO. ~ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ADOPTING AN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2009-2010 OF $181,928,007 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 of local non-residential construction; and WHEREAS, the 2009-2010 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 calculation of the Appropriations Limit for 2009-2010 is described in Attachment 2, 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 2009-2010 of $181,928,007. 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 23rd day of June, 2009. AYES: NOES: ABSENT: ATTEST: City Clerk Mayor ~~~ ~l'3 ~~z3 ~°~ ATTACHMENT 1 EXHIBIT A CALCULATION OF FISCAL YEAR 2009-2010 APPROPRIATIONS LIMIT (Based on Fiscal Year 2008-2009 Limit) A. SELECTION OF OPTIONAL FACTORS 1. Population -City vs. County a. Change in Population, City of Dublin OR ~~ ~ ~.p , ~~ 01 /01 /2008 01 /01 /2009 % I ncrease 44,267 45,661 3.15% b. Change in Population, Alameda County 1,534,959 1,554,220 1.26% _> Selected Factor #1 =City of Dublin Population Growth 3.15% 2. State Income vs. City Non-Residential Building a. Change in State Per Capita Income: 0.62% OR b. Change in Non-Residential Assessed Valuation: 3.36%** * (Based on preliminary tax roll information available from the Alameda County Assessor May 2009. The final tax roll figure may be different. ) B _> Selected Factor #2 =Change in Non-Residential Building 3.36% CALCULATION OF GROWTH LIMIT ADJUSTMENT The formula for calculating the adjustment is as follows: Selected Factor 1 + 100 = X Selected Factor 2 + 100 = Y (X) * (Y) =Fiscal Year 2009-2010 Appropriations Limit Adjustment Factor 3.15+100 = 1.0315 ~~ 3.36+100 = 1.0336 ~~ Adjustment Factor FY 2009-2010:1.0315 x 1.0336 = 1.0662 C. CALCULATION OF APPROPRIATIONS LIMIT Fiscal Year 2008-2009 Appropriations Limit $170,632,158 Fiscal Year 2009-2010 Adjustment Factor x 1.0662 Fiscal Year 2009-2010 Appropriations Limit $181,928,007