HomeMy WebLinkAboutNB 5 APPROP LIMIT 12-15-80TO:
FROH:
SUBJECT:
December 10, 1980
NEW BUSINESS
No. 5
12-15-80
Inter -Corn
Honorable Mayor and Member~of~%~ the City Counci!
Ron Nault, Finance Directo~N\
DETERMINATION OF APPROPRIATION LIMIT PER ARTICLE XIII B OF
THE STATE CONSTITUTION (GANN INITIATIVE)
Background
Article XIII B was added to the Sta~e Constitution at the
general election of 11/6/79. It is more widely known as
Proposition 4, "The Gann Spending Limitation." The attempt
of this proposition is to tie the annual increase in
expenditure of "the proceeds of taxes" to the annual increase
in CPI or per capita personal income, whichever is less,
and the increase in population within a governmental agency.
"Proceeds of taxes" are defined as all tax revenues and
proceeds from regulatory licenses, user fees to the extent
that such fees exceed the reasonable costs to provide the
service, and state subventions for other than a specific
required use.
Overview
Although Proposition 4 lacks a specific procedure for
annually adopting the appropriation limit, SB 1352, which
will become effective 1/1/81, requires local government
to establish its appropriation limit by resolution at a
regularly scheduled meeting. First year implementation
is not addressed in SB 1352, but the public interest can
best be served and the intent of legislative action can be
fulfilled by making the Council aware of the spending limi-
tation for fiscal 1981 as determined by the attached exhibits
and presenting to Council a resolution adopting this limi-
tation at the first regularly scheduled meeting in calendar
year 1981.
The adoption of this resolution does not preclude the City
from amending our spending limit during the fiscal year to
reflect new data. The limit as presented to you is based
on information available at the time the fiscal 1981 budget
was prepared. Prior to adopting the fiscal 1982 budget, and
for every budget year thereafter, a new spending limitation
resolution must be adopted.
December 10, 1980
Gann Initiative
Page two
ReCommendation
It is recommended that Council review the attached determination
and discuss any concerns with staff prior to adopting the
spending limitation resolution at the next regularly scheduled
meeting.
Exhibit I
CALCULATION OF CUMULATIVE
GROWTH RATE
"~CITY OF TUSTIN
City of Tustin PopUlation Change
Year Population % Change
Jan 78 31,191
Jan 79 32,185 3.19%a
Jan 80 32,137 -0.15%b
Calculation
3.19a + 100.00
1. 1.10171 x
100.00
2. 1.10532 x -0.15b + 100.00
100.00
= 1.1368
= 1.1036
1.1368 x 1.1036 = 1.2546
25.46% is cumulative percent growth rate for 1980-81
for the City of Tustin
(1) 1979-80 CPI Change
(2) 1980-81 Per Capita Income Change
1978~79 BASE YEAR APPROPRIATION LIMIT
GOVERNMENTAL FUNDS ONLY
Step 1.
Step 2.
Step 3.
Analyze Estimated Revenues
Total Governmental Fund Estimated Revenues
Develop Proceeds of Tax, subtract non-proceeds
Add Excess User Fees
Subtract Debt Service Appropriations
a) General Obligation Bonds
b). Unfunded PERS Liability as of 1~1-79
Proceeds of Tax
$6,548,137
(1,140,041)
-0-
(181,378)
( 12,964)
$5,213,754
Step
Step
Determine 1978-79 Appropriations Subject
to Limit
a) Total 78-79 Appropriations as'Amended
1) Operations & Capital
2) Carry Over Capital Improvement Projects
3) Appropriated Reserves ($539,615 total,
83% proceeds)
Subtract:
1) Non-Proceeds of Tax
2) Debt Service Appropriation
3) PERS Unfunded Liability
Base Year Appropriation
Subject to Limit
Calculate Appropriation Limit for fiscal 80-81.
Base Year Adjusted by Cumulative $ 6,825,272
Growth Rate x 1.2546
1980-81 Appropriations Limit $ 8,562,986
$7,532,040
179,735
447,880
(1,140,041)
( 181,378)
( 12,964)
$6,825,272
1980-81 APPROPRIATIONS SUBJECT TO LIMIT
GOVERNMENTAL FUNDS ONLY
Step 1.
Step 2.
Step 3.
Step 4.
Analyze Estimated Revenues
Total Governmental Funds estimated Revenues
Develop proceeds of tax, subtract non-proceeds
Add Excess'User Fees
Subtract Debt Service Appropriations
a) General Obligation Bonds
b}. Unfunded PERS Liability~ Current
Proceeds of Tax
Determine 1980-81 Appropriations Subject to Limit
a) Total 80-81 Appropriations as adopted
b) Add:
1) Increase to reserves,6/30/81
($627,976 total, 83% proceeds
of tax)
2) 6/30/80 Carry over Capital
Improvement Projects
3) Excess User Fees
c) Subtract:
1) Non-proceeds of Tax
2) Debt Service Appropriation
3) Unfunded PERS Liability, Current
4) Use of Appropriated Reserves to
finance 6/30/80 Carry over projects
1980/81 Appropriations
Subject to Limit
Under/Over Limit
$9,601,269
(3,011,_972)
-0-
(195,703)
(64,026)
$6,329,568
$10,935,956
521,220
377,133
--0--
(3,011,972)
( 195,703)
( 64,026)
(377,133)
$8,185,475
$ 377,511