HomeMy WebLinkAboutAGENDA REPORT 2011 0615 CC REG ITEM 10G ITEM 10.G.
MOORPARK CITY COUNCIL :ity council Meetir,•:
AGENDA REPORT
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TO: Honorable City Council _
FROM: Ron Ahlers, Finance Director
BY: Irmina Lumbad, Budget and Accounting Manager
DATE: June 2, 2011 (Council Meeting of June 15, 2011)
SUBJECT: Consider Resolution Establishing the Appropriation Limitation for
Fiscal Year 201112012 for the City of Moorpark at$26,792,899
BACKGROUND
Proposition 4, sometimes referred to as the "Gann Limit", was approved by the voters of
California on the November 1979 special ballot election. This Proposition created
Article XIII B of the State Constitution which sets forth the calculation of the State and
local jurisdictions' annual appropriations limit or the "ceiling" on monies that can be
spent from tax revenues. Each year, it requires the governing body of the local agency
to establish the limit, by resolution, before the beginning of the following fiscal year.
Initially, the appropriations limit was annually adjusted by the population growth of each
local agency and the lesser of the change in cost-of-living or the change in California
per capital personal income from the preceding year. Proposition 111 adopted in June
1990, allowed major adjustments to the methodology. Local agencies may select the
higher of percentage change in population within the City, or County; and the higher of
rate of change in California per capita personal income from preceding year, or the rate
of change in the local assessment valuation due to additional non-residential new
construction from the preceding year.
DISCUSSION
On April 29, 2011 the California State Department of Finance notified the local
jurisdictions of the population and price data for use in the appropriations limit
calculation for FY 2011/2012. Based on this letter, the percentage change in population
for the City of Moorpark is 0.93%, while the Ventura County percentage change is
0.83%. The preceding year's percentage change in cost-of-living factor per capita
personal income is 2.51%. Information regarding the change in local assessment
valuation in non-residential new construction of -9.90% was provided by the City's
property tax consultants, HDL Coren & Cone.
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Honorable City Council
June 15, 2011
Page 2
The City selected to use the percentage change in population for the City (0.93%) and
the percentage change in cost-of-living factor per capita personal income (2.51%) in
adjusting the prior year's appropriations limit of $25,896,031. Accordingly, the City of
Moorpark's limitation for FY 2011/2012 is $26,792,899. Per the Recommended Budget
for FY 2011/2012, the appropriations subject to limit is $13,725,944. This brings us
$13,066,955 or 48.77% under the limit.
FISCAL IMPACT
None.
STAFF RECOMMENDATION
Adopt Resolution No. 2011-
Attachments: A. Resolution No. 2011-
B. Appropriation Limit Calculation
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Attachment A
RESOLUTION NO. 2011-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
MOORPARK, CALIFORNIA, ESTABLISHING THE CITY'S
APPROPRIATION LIMITATION FOR FISCAL YEAR 2011/2012
WHEREAS, Article XIII B of the State Constitution limits annual appropriations
from proceeds of tax revenues for state and local governments; and
WHEREAS, Government Code Section 7910 requires that a city establish its
annual appropriations limitation by resolution at a public meeting of the legislative body;
and
WHEREAS, the Fiscal Year 2011/2012 appropriations limitation has been
calculated in accordance with the State Constitution and applicable sections of the
Government Code by adjusting its Fiscal Year 2010/2011 appropriations limit of
$25,896,031 by the percentage change in the City of Moorpark's population of 0.93%,
as determined by the State of California, Department of Finance and the percentage
change of cost-of-living factor per capita personal income of 2.51% as provided by the
State of California Department of Finance.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The appropriations limitation for the City of Moorpark for Fiscal
Year 2011/2012 is hereby determined to be $26,792,899.
SECTION 2. The City Clerk shall certify to the adoption of this resolution and
shall cause a certified resolution to be filed in the book of original Resolutions.
PASSED AND ADOPTED this 15h day of June, 2011.
Janice S. Parvin, Mayor
ATTEST:
Maureen Benson, City Clerk
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Attachment B
CITY OF MOORPARK
Appropriation Limit Calculation
Article XIIIB of the California State Constitution, commonly referred to as the
Gann Initiative or Gann Appropriations Limit, was adopted by California voters in
1979 and placed limits on the amount of proceeds of taxes that State and local
agencies can appropriate and spend each fiscal year.
The limit is different for every agency and changes each year. The annual limit is
based on the amount of tax proceeds that were authorized to be spent in FY
1978/1979, modified for changes in inflation and population. Inflationary
adjustments are based on increases in the California per capita income or the
increase in non-residential assessed valuation due to new construction. An
adjustment is also made based on changes in Moorpark's population or County
population.
At incorporation in FY 1983/84, the Local Agency Formation Commission
(LAFCO) determined that the initial appropriation limit for the city was $900,000.
The limit was annually adjusted as prescribed by law. However by FY 1988/89, it
became evident that the appropriation limit was set too low and the City has
more revenues that could fund certain levels of service and/or capital
improvement projects. An increase in Gann Limit may be achieved by simple
majority vote by the voters. Thus on June 7, 1988, the voters approved Measure
"C" which increased the City appropriation limit for the four year period beginning
FY 1986/87 through FY 1989/90 by the amount of proceeds of taxed collected in
excess of said limit for each year mentioned.
Subsequently in June 1993, the City reviewed the original incorporation study
and found that the LAFCO's assumptions of revenues, which were the basis for
setting the initial appropriation limit of $900,000, were erroneous. A public
hearing was held to gather information and testimony regarding the correction of
the initial limit. By Resolution 93-953, the FY 1983/84 appropriation limit was
corrected based on actual revenues of the City from $900,000 to $2,400,000.
The City Council subsequently authorized the filing of a validation action with the
Superior Court. On November 22, 1994 (Case No. CIV 147270) the Superior
Court of the State of California for the County of Ventura set the City's
appropriation limit at $2,400,000. The subsequent years' appropriation limits
were adjusted accordingly.
For FY 2011/2012, the estimated tax proceeds appropriated by the Moorpark
City Council are under the limit. The adjusted Appropriation Limit for FY
2011/2012 is $26,792,899. This is the maximum amount of tax proceeds the City
is able to appropriate and spend in FY 2011/2012. The appropriations subject to
the limit is $13,725,944, leaving the City with an appropriations capacity under
the limit of$13,066,955.
Section 7910 of the State Government Code requires the governing body to
annually adopt, by resolution, an Appropriations Limit for the upcoming fiscal
year.
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Attachment B
HISTORY OF LIMIT CALCULATION
Population Price or Non-Residential New
City/County City/County Construction
Fiscal Growth Appropriation
Year Basis Factor Basis Factor Factor Limit
1997-98 City 2.58 Per Capita Income 4.67 1.0737 $11,011,629
1998-99 city 2.72 Per Capita Income 4.15 1.0698 $11,780,241
1999-00 city 0.64 Per Capita Income 4.56 1.0523 $12,392,814
2000-01 City 0.07 Per Capita Income 4.91 1.0498 $13,010,402
2001-02 City 1.37 Per Capita Income 7.82 1.0930 $14,219,997
2002-03 City 4.19 Per Capita Income -1.27 1.0287 $14,627,654
2003-04 City 4.21 Non-residential new construction 9.23 1.13831 $16,650,451
2004-05 County 1.73 Per Capita Income 3.28 1.0507 $17,494,629
2005-06 City 2.66 Per Capita Income 5.26 1.0806 $18,904,696
2006-07 City 0.24 Per Capita Income 3.96 1.0421 $19,700,584
2007-08 City 1.05 Per Capita Income 4.42 1.0552 $20,788,056
2008-09 City 2.13 Non-residential new construction 4.51 1.06741 $22,189,171
2009-10 City 1.27 Non-residential new construction 16.59 1.1807 $26,198,908
2010-11 City 1.421 Per Capita Income -2.54 0.9884 $25,896,031
2011-12 City 0.93 Per Capita Income 2.51 1.0346 $26,792,899
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