CC 2017-06-13_09c FY 2017-18 Appropriation Limit A./ ROo
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INCORPORATED 9z
3 t MEMORANDUM
JULY 1O. 1911 *
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TO: CITY COUNCIL
FROM: DEBBIE MALICOAT, DIRECTOR OF ADMINISTRATIVE
SERVICES
SUBJECT: CONSIDERATION OF FISCAL YEAR 2017-18 APPROPRIATION
LIMIT
DATE: JUNE 13, 2017
RECOMMENDATION:
It is recommended the City Council adopt the attached Resolution establishing
the appropriation limit from tax proceeds for Fiscal Year 2017-18.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
There are no fiscal or personnel impacts.
BACKGROUND:
Annually, the City is required to calculate the expenditure appropriation limit from
tax proceeds to determine compliance with Propositions 4 (Gann Initiative) and
111 (Spending Limitation Act of 1990). This calculation is based on the previous
year's appropriation limit ($20,572,263) multiplied by the per capita personal
income percentage increase (3.69%) and multiplied again by the population
percentage change (0.09%). The State Department of Finance provides both the
population change and the per capita personal income change for the previous
fiscal year.
ANALYSIS OF ISSUES:
The City is responsible for dividing citywide revenues between tax and non-tax
revenue and applying the formula to the cumulative appropriation limit. For
Fiscal Year 2017-18, the appropriation limit has been calculated to be
$21,350,578.
This calculation means that the City cannot receive more than $21,350,578 in
tax-based revenues in Fiscal Year 2017-18. The estimated tax-based revenues
for the Fiscal Year have been calculated to be $15,221,881, approximately $6.1
million less than the appropriation limit. Therefore, the City is in compliance with
Article XIIIB of the California Constitution.
Item 9.c. - Page 1
CITY COUNCIL
CONSIDERATION OF FISCAL YEAR 2015-17 APPROPRIATION LIMIT
JUNE 13, 2017
PAGE 2
ALTERNATIVES:
The following alternatives are provided for City Council consideration:
- Adopt the Resolution establishing the appropriation limit;
- Do not adopt the Resolution; or
- Provide direction to staff.
ADVANTAGES:
By adopting the Resolution establishing the appropriation limit for Fiscal Year
2017-18, the City will be in compliance with Propositions 4 and 111.
DISADVANTAGES:
There is no disadvantage identified in relation to this recommendation.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City's website in accordance with
Government Code Section 54954.2.
Item 9.c. - Page 2
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE ADOPTING A TAX PROCEEDS
EXPENDITURE APPROPRIATION LIMIT FOR FISCAL
YEAR 2017-18
WHEREAS, Sections 7900 et seq. of the Government Code provide for the effective
and efficient implementation of Article XIIIB of the California Constitution; and
WHEREAS, Government Code Sections 7901 through 7914 provide that each year, the
governing body of each local jurisdiction shall, by resolution adopted at a regularly
scheduled meeting, establish the annual adjustment factors to be used and the tax
proceeds expenditure appropriation limit.
NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of Arroyo
Grande as follows:
1. The California per capita income and the population of Arroyo Grande, California
are recognized as the annual adjustment factors for Fiscal Year 2017-18.
2. The appropriation limit for Fiscal Year 2017-18 is hereby set at twenty one
million, three hundred fifty thousand, and five hundred seventy eight dollars
($21,350,578).
3. Documentation used in the determination of the tax proceeds expenditure
appropriation limit is attached hereto as Exhibit A and incorporated herein by this
reference.
4. This Resolution is effective on its date of adoption.
On motion of Council Member , seconded by Council Member
, and on the following roll call vote, to wit:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this day of ,2017.
Item 9.c. - Page 3
RESOLUTION NO.
PAGE 2
JIM HILL, MAYOR
ATTEST:
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
JAMES A. BERGMAN, CITY MANAGER
APPROVED AS TO FORM:
HEATHER WHITHAM, CITY ATTORNEY
Item 9.c. - Page 4
EXHIBIT A
CITY OF ARROYO GRANDE
CALCULATION OF APPROPRIATION LIMIT FROM TAX PROCEEDS
FOR FISCAL YEAR 2017-18
Appropriation limit for 2016-17 $ 20,572,263 (A)
Multiplied by the appropriation limit change factors:
Per Capita Personal Income Change: 3.69%
Conversion to ratio: 3.69% + 100
1.0369 (B)
100
Population Change:
2016 17,720
2017 17,736 0.09%
Change 16
Conversion to ratio: 16 .09% + 100 1.00090 (C)
17,736 100
Appropriation limit factor: (B x C) 1.0378 (D)
APPROPRIATION LIMIT FOR FISCAL YEAR 2017-18 (A x D) $ 21,350,578
ESTIMATED 2017-18 PROCEEDS OF TAXES SUBJECT TO
APPROPRIATION LIMIT $ 15,221,881
Amount under/(over) limit $ 6,128,697
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