08.b. FY 2012-13 Appropriation LimitMEMORANDUM
TO: CITY COUNCIL
FROM: ANGELA KRAETSCH, DIRECTOR OF ADMINIS'TRA'TIVE
SERVICES
SUBJECT: CONSIDERATION OF FISCAL YEAR 201 2-1 3 APPROPRIATION
LIMIT
DATE: JUNE 12,2012
RECOMMENDATION:
It is recommended the City Council adopt the attached Resolution establishirlg
the appropriation limit from tax proceeds for Fiscal Year 2012-1 3.
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
11 1 (Spending Limitation Act of 1990). This calculation is based on the previous
year's appropriation limit ($17,089,162) multiplied by the per capita personal
income percentage increase (1.0377%) and multiplied again by the population
percentage change (.99913%). 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 2012-13, the appropriation limit has been calculated to be
$1 7,717,995.
'This calculation means that the City cannot receive more than $17,717,995 in
tax-based revenues in Fiscal Year 2012-13. The estimated tax-based revenues
for Fiscal Year 2012-1 3 have been calculated to be $1 1,550,043, approximately
$6.2 million less than the appropriation limit. Therefore, the City is in compliance
with Article XlllB of the California Constitution.
Agenda Item 8.b.
Page 1
CITY COUNCIL
CONSIDERATION OF FISCAL YEAR 201 2-1 3 APPROPRIATION LIMIT
JUNE 12,2012
PAGE 2
ALTERNATIVES:
The following alternatives are provided for City Council consideration:
- Adopt the Resolution to establish the appropriation limit for Fiscal Year
201 2-1 3;
- Do not adopt the Resolution;
- Provide direction to staff.
ADVANTAGES:
By adopting the Resolution to establish the appropriation limit for Fiscal Year
2012-13, the City will be in compliance with Propositions 4 and 11 1.
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 in front of City Hall on Thursday, June 7, 2012. The
Agenda and report were posted on the City's website on Friday, June 8, 2012.
No public comments were received.
Attachment:
1. Categorization of Estimated Revenue
Agenda Item 8.b.
Page 2
Attachment 1
CITY OF ARROYO GRANDE
CA TEGORIZA TlON OF ESTIUL1 TED REVENUE
Proceeds
Revenue Sources From Taxes
Taxes
Property Tax
Sales Tax
Sales Tax-Safety
Transient Occupancy Tax
Business License Tax
Other Taxes
Licenses and Permits
Building Dept. Permits
Other Licenses and Permits
Fines
M.V. Code Fines
Local Ordinanceparking
Use of Property
Rent
NSF Fees/Cr.Bur.Coll.
Aid From Other Gov't Agencies
M.V. License Fees
Homeowners Prop.Tax Relief
P.O.S.T. Reimb.
Mandated Cost Recovery
P.D.Officer GrantISharing
Other Grants
Gas Tax
Streets Revenues
Charges For Current Services
Community Development Fees
Safety Impact Fees
Recreation Program Fees
Public Access Fees
Sewer Utility Billings
Park Development Fees
District Assessments
Traffic Signal Assessment
Transportation Facility Impact
Water Neutralization Impact Fees
Other Current Services
Non Proceeds
From Taxes
Agenda Item 8.b.
Page 3
Attachment 1
Revenue Sources
CITY OF ARROYO GRANDE
CA TEGORlZA TlON OF ESTIM TED RE VENUE
Proceeds Non Proceeds
Charges For Current Services
Sewer Facility Charges
Hydrant Water
Water Utility Billings
Meter Installations
Water Avail.Charges
Lopez Utility Billings
Water DistribIMain Charges
Assessments-Parking District
Other Revenue
Sales of Property
Expenditure Recovery
Miscellaneous
Other Revenue
Total Revenue, Not Including Interest
Interest Percentage
Interest % Applied
Total Revenue, Including Interest
Grand Total Budget City Revenue
From Taxes From Taxes
Agenda Item 8.b.
Page 4
RESOLUTION NO.
A RESOLUTION OF THE CITY COLlNClL OF THE CITY OF
ARROYO GRANDE ADOPTING A TAX PROCEEDS
EXPENDITURE APPROPRIATION LIMIT FOR FISCAL YEAR
201 2-1 3
WHEREAS, Sections 7900 et seq. of the Government Code provide for the effective and
efficient implementation of Article XlllB 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 San Luis Obispo County,
California are recognized as the annual adjustment factors for Fiscal Year 2012-1 3.
2. The appropriation limit for Fiscal Year 201 2-1 3 is hereby set at seventeen million,
seven hundred and seventeen thousand, and nine hundred and ninety-five dollars
($17,717,995).
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 ,201 2.
Agenda Item 8.b.
Page 5
RESOLU'TION NO.
PAGE 2
TONY FERRARA, MAYOR
ATTEST:
KELLY WETMORE, ClTY CLERK
APPROVED AS TO CONTENT:
STEVEN ADAMS, ClTY MANAGER
APPROVED AS TO FORM:
TIMOTHY J. CARMEL, ClTY ATTORNEY
Agenda Item 8.b.
Page 6
Exhibit A
CITY OF ARROYO GRANDE
CALCULATION OF APPROPRIATION LIMIT FROM TAX PROCEEDS
FOR FISCAL YEAR 20 12- 1 3
Appropriation limit for 20 1 1 - 12
Multiplied by the appropriation limit change factors:
Per Capita Personal Income Change:
Conversion to ratio:
- -
100
Population Change:
201 1 17,306
2012 17,29 1 -0.0868%
Change (15)
Conversion to ratio: (15) -.0868 + 100 0.99913
- - - -
APPROPRIATION LIMIT FOR FISCAL YEAR 2012-13 !! 17,717,995
ESTIMATED 2012-13 PROCEEDS OF TAXES SUBJECT TO
APPROPRIATION LIMIT
Ag
e
n
d
a
I
t
e
m
8
.
b
.
Pa
g
e
7
THIS PAGE INTENTIO NALLY LEFT BLANK
Agenda Item 8.b.
Page 8
OT e p
* P
Q IIIIi_....., Z w n
o Py
* DEPARTMENT OF EDMUND G. BROWN JR. • GOVERNOR
Cq&IFDIU F I N ANC E 915 L STREET• SACRAMENTO CA• 95514-3706 ■WWW.DDF.CA.GDV
May 2012
Dear Fiscal Officer:
Subject: Price and Population Information
Appropriations Limit
The California Revenue and Taxation Code, Section 2227, mandates the Department of Finance(Finance)
to transmit an estimate of the percentage change in population to local governments. Each local jurisdiction
must use their percentage change in population factor for January 1, 2012, in conjunction with a change in
the cost of living, or price factor, to calculate their appropriations limit for fiscal year 2012-2013. Enclosure I
provides the change in California's per capita personal income and an example for utilizing the price factor
and population percentage change factor to calculate the 2012-2013 appropriations limit. Enclosure II
provides city and unincorporated county population percentage changes, and Enclosure IIA provides county
and incorporated areas'summed population percentage change. The population percentage change data
excludes federal and state institutionalized populations and military populations.
Population Percent Change for Special Districts
Some special districts must establish an annual appropriations limit. Consult the Revenue and Taxation
Code, Section 2228 for further information regarding the appropriations limit. You can access the Code
from the following website: "http://www.leginfo.ca.gov/calaw.html" check box: "Revenue and Taxation
Code"and enter 2228 for the search term to learn more about the various population change factors
available to special districts to calculate their appropriations limit. Article XIII B, Section 9(C), of the State
Constitution exempts certain special districts from the appropriations limit calculation mandate. Consult the
following website: "http://www.leginfo.ca.gov/.const/.article 13B"for additional information. Special districts
required by law to calculate their appropriations limit must present the calculation as part of their annual
audit. Any questions special districts have on this issue should be referred to their respective county for
clarification, or to their legal representation, or to the law itself. No State agency reviews the local
appropriations limits.
Population Certification
The population certification program applies only to cities and counties. Revenue and Taxation Code
Section 11005.6 mandates Finance to automatically certify any population estimate that exceeds the
current certified population with the State Controller's Office. Finance will certify the higher estimate to
the State Controller by June 1,2012.
Please Note: Prior year's city population estimates may be revised.
If you have any questions regarding this data, please contact the Demographic Research Unit at
(916)323-4086.
ANA J. MATOSANTOS
Director
By:
V.V\AA.J2—e CeZ-------
MICHAEL COHEN
Chief Deputy Director
Enclosures
Fiscal Year 2012-2013
May 2012
Enclosure I
A. Price Factor: Article XIII B specifies that local jurisdictions select their cost-of-living
factor to compute their appropriation limit by a vote of their governing body. The
cost-of-living factor provided here is per capita personal income. If the percentage
change in per capita personal income is selected, the percentage change to be used
in setting the 2012-2013 appropriation limit is:
Per Capita Personal Income
Fiscal Year Percentage change
(FY) over prior year
2012-2013 3.77
B. Following is an example using sample population change and the change in
California per capita personal income as growth factors in computing a 2012-2013
appropriation limit.
2012-2013:
Per Capita Cost of Living Change= 3.77 percent
Population Change = 0.68 percent
Per Capita Cost of Living converted to a ratio: 3.77+ 100 = 1.0377
100
Population converted to a ratio: 0.68 + 100 = 1.0068
100
Calculation of factor for FY 2012-2013:
1.0377 x 1.0068 = 1.0448
Fiscal Year 2012-2013
Enclosure II
Annual Percent Change in Population Minus Exclusions
January 1,2011 to January 1,2012 and Total Population,January 1,2012
Total
County Percent Change --- Population Minus Exclusions --- Population
City 2011-2012 1-1-11 1-1-12 1-1-2012
San Luis Obispo
Arroyo Grande -0.09 17,306 17,291 17,291
Atascadero 0 00 27,390 27,391 28,477
El Paso De Robles 1.03 29,918 30,225 30,225
Grover Beach -0.28 13,199 13,162 13,162
Morro Bay -0.19 10,294 10,274 10,274
Pismo Beach -0.09 7,682 7,675 7,675
San Luis Obispo 0.09 45,269 45,308 45,308
Unincorporated 0.86 112,247 113,212 119,071
County Total 0.47 263,305 264,538 271,483
(•)Exclusions include residents on federal military installations and group quarters residents in state mental institutions,state and federal
correctional institutions and veteran homes.
Page 1