HomeMy WebLinkAbout101-Gann Limit Report.pdf
SARATOGA CITY COUNCIL
MEETING DATE: June 3, 2009 AGENDA ITEM:
DEPARTMENT: Finance & Admin Services CITY MANAGER: Dave Anderson
PREPARED BY: Mary Furey DIRECTOR: Mary Furey
SUBJECT: Fiscal Year 2009/10 Gann Appropriation Limit
RECOMMENDED ACTION
Adopt resolution approving the Gann Appropriations Limit for FY 2009/10.
REPORT DISCUSSION
On November 6, 1979, California voters approved Proposition 4, commonly known as the Gann Spending
Limitation Initiative, establishing Article XIIIB of the California State Constitution. This proposition,
which became effective in fiscal year 1980/81, mandated an appropriations (spending) limit on the amount
of tax revenues that the State and most local government jurisdictions may appropriate within a fiscal year.
This limit grows annually by a population and cost-of-living factor.
The State Appropriation Limit was since modified by two subsequent initiatives - Proposition 98 in 1988
and Proposition 111 in 1990. Proposition 98 established the return of tax revenues exceeding
appropriation limit levels to citizens through a process of refunds, rebates, or other means. Proposition 111
allowed more flexibility in the appropriation calculation factors.
Only tax proceeds are subject to this limit. Charges for services, fees, grants, loans, donations and other
non-tax proceeds are excluded. Exemptions are also made for voter-approved debt which existed prior to
January 1, 1979, and for the cost of compliance with court or Federal government mandates.
The City Council adopts an annual resolution establishing an appropriations limit for the following fiscal
year using population and per capita personal income data provided by the State of California’s
Department of Finance. Each year’s limit is based on the amount of tax proceeds that were authorized to
be spent in fiscal year 1978/79, with inflationary adjustments made annually to reflect increases in
population and the cost of living.
The California Department of Finance distributes the annual percentage change per capita personal income
and the percentage population change within the City and the County to jurisdictions on May 1st each year.
The County’s percentage increase in population change is combined with the State’s change in per capita
income to determine the City’s appropriation factor. The current year’s appropriation limit is then
increased by this appropriation factor to calculate the Gann Appropriation Limit for the following fiscal
year. The calculation for the FY 2009/10 limit is as follows:
% Increase in California 2008/09 2009/10
County Per Capita Appropriation Appropriation Appropriation
Population Income Δ Factor Limit Limit
1.0156 X 1.0062 =1.0219 X 30,592,105$ =31,261,971$
FY 2009/10 Calculation
Summary:
The Gann Appropriation Limit establishes the maximum amount of tax revenue proceeds the City may
appropriate in the following fiscal year. The City’s proposed budget for FY 2009/10 anticipates
$9,941,500 in Gann designated tax revenues, which is $21,320,471 less than the appropriation limit of
$31,261,971.
Conclusion:
It is recommended that the Council adopt the resolution approving the FY 2009/10 Gann Appropriation
Limit of $31,261,971
CONSEQUENCES OF NOT FOLLOWING RECOMMENDED ACTION
The City would not be in compliance with Article XIIIB of the State of California Constitution.
ALTERNATIVE ACTION
N/A
FOLLOW UP ACTION
N/A
ADVERTISING, NOTICING AND PUBLIC CONTACT
N/A
ATTACHMENTS
A - Gann Appropriation Limit Factors and Calculation
B – Resolution
Attachment A
For Beginning County City Per Ending %
YE Population Population Capita Limit
Limit Factor Factor Income Limit Increase
1995 13,793,609 1.0160 1.0050 1.0071 14,113,809 2.32%
1996 14,113,809 1.0170 1.0227 1.0472 15,115,486 7.10%
1997 15,115,486 1.0108 1.0071 1.0467 15,992,250 5.80%
1998 15,992,250 1.0216 1.0289 1.0467 17,222,848 7.69%
1999 17,222,848 1.0212 1.0154 1.0415 18,317,873 6.36%
2000 18,317,873 1.0173 1.0072 1.0453 19,478,927 6.34%
2001 19,478,927 1.0163 1.0055 1.0491 20,768,439 6.62%
2002 20,768,439 1.0147 1.0055 1.0782 22,721,701 9.40%
2003 22,721,701 1.0125 1.0191 0.9873 23,092,833 1.63%
2004 23,092,833 1.0079 1.0029 1.0231 23,694,794 2.61%
2005 23,694,794 1.0072 1.0000 1.0328 24,471,983 3.28%
2006 24,471,983 1.0112 1.0124 1.0526 26,078,624 6.57%
2007 26,078,624 1.0118 1.0034 1.0396 27,203,516 4.31%
2008 27,203,516 1.0152 1.0138 1.0442 28,837,681 6.01%
2009 28,837,681 1.0172 1.0077 1.0429 30,592,105 6.08%
2010 30,592,105 1.0156 1.0070 1.0062 31,261,971 2.19%
% Increase in Change in 2007/08 2009/10
County Per Capita Appropriation Appropriation Appropriation
Population Income Factor Limit Limit
1.0156 X 1.0062 =1.0219 X 30,592,105$ =31,261,971$
2009/10 2009/10 Percentage
Tax Appropriation of
Revenues Limit Limit
10,181,000 /31,261,971$ =33%
June 30
Percentage of Appropriation
FY 2009/10 Calculation
APPROPRIATION LIMIT FACTORS
AppropriationAppropriation
Attachment B
RESOLUTION NO._______
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SARATOGA
ESTABLISHING THE FISCAL YEAR 2009/10 GANN LIMIT APPROPRIATION
FOR THE CITY OF SARATOGA
WHEREAS, the City of Saratoga has established its Base Year Appropriation Limit as
$5,961,747 in Fiscal Year 1978/79; and
WHEREAS, the cumulative changes to population and to the California per capita personal
income since the Base Year established the revised Proposition 111 Fiscal Year 1996/97 Appropriation
Limit as $16,153,314, and
WHEREAS, to the best of the City’s knowledge and belief, the State Department of Finance
figures provided to the City in response to Proposition 111 passed by the voters in June 1990, reflects the
appropriate statistics relevant to the calculation of the Fiscal Year 2009/10 Appropriation Limit, which
includes:
· County population adjustments for the year ended December 31, 2008 equal to 1.56%, and
· City population adjustment for the year ended December 31, 2008 equal to .70%, and
· Change in California per capita cost of living for fiscal year 2009/10 equal to .62%
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Saratoga hereby
resolves that, based on the foregoing figures and the provisions of the Article XIIIB of the Constitution of
the State of California, the following figure accurately represents the Fiscal Year 2009/10 Appropriation
Limit for the City of Saratoga at: $31,261,971
The above and foregoing resolution was passed and adopted at a regular meeting of the Saratoga City
Council held on the 3rd day of June 2009 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
___________________
Chuck Page, Mayor
ATTEST:
_____________________________
Ann Sullivan, City Clerk