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CC SR 20170620 F - City's Appropriation Limit for FY17-18RANCHO PALOS VERDES CITY COUNCIL AGENDA REPORT AGENDA DESCRIPTION: MEETING DATE: 06/20/2017 AGENDA HEADING: Consent Calendar Consideration and possible action to adopt a resolution establishing the City's Appropriation Limit for FY17-18. RECOMMENDED COUNCIL ACTION: (1) Adopt Resolution No. 2017-_, establishing the City's Appropriation Limit for FY17-18. FISCAL IMPACT: None Amount Budgeted: N/A Additional Appropriation: N/A Account Number(s): N/A ORIGINATED BY: Vina Ramos, Accounting Supervisor ';i2_ REVIEWED BY: Deborah Cullen, Director of Finance 1�f — APPROVED BY: Doug Willmore, City Manager Q,���,-� ATTACHED SUPPORTING DOCUMENTS: ✓�'� A. Resolution No. 2017-_ (page A-1) B. Gann Limit calculation (page B-1) BACKGROUND AND DISCUSSION: The Gann Initiative of 1979 amended the State Constitution to require cities to adopt an annual limit on the amount of tax revenue that can be appropriated for spending each fiscal year. In coordination with the adoption of the annual budget, the City follows statewide guidelines to calculate the Gann appropriation limit. The appropriation limit establishes a ceiling on the amount of tax revenue the City can receive and appropriate for spending each year. The amount is adjusted each year using inflationary and population growth statistics provided by the State Department of Finance. The adoption of the draft resolution (Attachment A) will establish the City's FY17-18 appropriation limit of $28,928,085. Based upon the proposed budget of $24,109,140 for proceeds of taxes, the City is in compliance with the Gann limit, falling below 83% of the appropriation limit (Attachment B). 1 RESOLUTION NO. 2017- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES ESTABLISHING THE FISCAL YEAR 2017-2018 APPROPRIATION LIMIT FOR THE CITY OF RANCHO PALOS VERDES WHEREAS, the City of Rancho Palos Verdes has established its Appropriation Limit of $28,928,085 (Twenty -Eight Million, Nine -Hundred Twenty Eight Thousand and Eighty -Five Dollars) for FY 2017-2018; and WHEREAS, by a letter, dated May 2017, the California Department of Finance has provided the following factors relevant to the calculation of the Appropriation Limit for FY 2017-2018: California Per Capita Personal Income change: 3.69% (Three Point Sixty Nine Percent) County of Los Angeles Population Adjustment: 0.57% (Zero Point Fifty Seven Percent) WHEREAS, the City Finance staff has calculated the Appropriation Limit for FY 2017-2018 based upon the foregoing factors and the provisions of Article XIII B of the Constitution of the State of California. The working papers supporting the calculation are maintained in the files of the Finance department within the City. WHEREAS, the Appropriation Limit for the City of Rancho Palos Verdes establishes the ceiling for which proceeds from taxes can be appropriated during FY 2017-2018. BE IT, THEREFORE, RESOLVED BY THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES: Section 1: The Appropriation Limit of the City of Rancho Palos Verdes is $28,928,085 (Twenty -Eight Million, Nine -Hundred Twenty Eight Thousand and Eighty -Five Dollars) for FY 2017-2018. Section 2: The Appropriation Limit of the City of Rancho Palos Verdes in the amount of $28,928,085 (Twenty -Eight Million, Nine -Hundred Twenty Eight Thousand and Eighty -Five Dollars) exceeds the proceeds from taxes, calculated in the amount of $24,109,140 (Twenty - Four Million, One Hundred and Nine Thousand and One Hundred Forty Dollars) for FY 2017- 2018. Therefore, the City of Rancho Palos Verdes shall be in compliance with the provisions of Article XIII B of the Constitution of the State of California. Section 3: The City Clerk shall certify to the passage of this resolution. APPROVED AND ADOPTED THE 20th DAY OF JUNE 2017. MAYOR A-1 ATTEST: CITY CLERK State of California ) County of Los Angeles ) ss City of Rancho Palos Verdes ) I, EMILY COLBORN, City Clerk of The City of Rancho Palos Verdes, hereby certify that the above Resolution No. 2017- was duly and regularly passed and adopted by the said City Council at a regular meeting thereof held on June 20, 2017. CITY CLERK A-2 City of Rancho Palos Verdes Gann Limit Calculation Ten Years Fiscal Year Resolution No. Califronia per Capita LA Population Change Factor Appropriation Limit Proposed Budget Proceeds of Taxes % of Budget to Limit 2017-18 17-xx 3.69 0.57 1.04281 $28,928,085 $24,109,140 83% 2016-17 16-25 5.37 0.85 1.06266 $27,740,504 $22,903,240 83% 2015-16 15-45 3.82 0.82 1.04671 $26,104,866 $22,430,257 86% 2014-15 14-36 -0.23 0.78 1.00548 $24,939,845 $21,366,388 86% 2013-14 13-35 5.12 0.69 1.05845 $24,803,869 $20,069,270 81% 2012-13 12-41 3.77 0.42 1.04206 $23,434,071 $19,123,734 82% 2011-12 11-37 2.51 0.38 1.02900 $22,488,252 $18,439,843 82% 2010-11 10-44 -2.54 0.83 0.98269 $21,854,570 $16,946,217 78% 2009-10 09-39 0.62 0.9 1.01526 $22,239,555 $14,598,734 66% 2008-09 08-60 4.29 0.86 1.05187 $21,905,372 $15,116,425 69% As CALCULATION OF PROCEEDS OF TAXES PROPOSED BUDGET FY 2017-2018 PROCEEDS GENERAL FUND OF TAXES NON PROCEEDS OF TAXES TOTAL TAXES Golf Tax 370,400 370,400 Property Tax 7,664,800 7,664,800 Property Tax In -Lieu of Sales Tax 0 0 Property Tax In -Lieu of VLF Revenues 4,623,800 4,623,800 Property Tax Redev Tax Trust 100 100 Property transfer Tax 457,400 457,400 Franchise Tax 2,112,800 2,112,800 Sales and Use Tax - PW (PSAF) 79,700 79,700 Sales and Use Tax 2,500,500 2,500,500 Utility Users Tax 1,871,100 1,871,100 Transient Occupancy Tax 302,000 302,000 Transient Occupancy Tax - Terranea 5,438,000 5,438,000 814,400 Business license Tax 814,400 TOTAL TAXES 24,042,500 2,192,500 26,235,000 LICENSES AND PERMITS Planning permits 455,600 455,600 Bldg and safety permits & geology fees 1,672,700 1,672,700 Right of way & parking permits 102,800 102,800 Film permits 50,000 50,000 Massage permits Animal control fees 0 0 40,000 40,000 TOTAL LICENSES AND PERMITS 0 2,321,100 2,321,100 FINES AND FORFEITURES Tow fees False alarm fines Misc court fines 8,000 8,000 5,000 5,000 100,000 100,000 TOTAL FINES AND FORFEITURES 0 113,000 113,000 RENTS Rent- Citywide 152,700 152,700 Rent- Cityhall 25,000 25,000 Facility rentals - All Rec & Park 249,000 249,000 TOTAL RENTS 0 426,700 426,700 INTEREST Interest earnings 66,640 16,660 83,300 TOTAL INTEREST 66,640 16,660 83,300 CHARGES FOR SERVICES Engineering fees Sale of Signs/Services Recreation fees 10,000 10,000 700 700 244,000 244,000 TOTAL CHARGES FOR SERVICES 0 254,700 254,700 REVENUES FROM OTHER AGENCIES Motor vehicle license fees 0 0 Grant income 0 0 TOTAL REVENUES FROM OTHER AGENCIES 0 0 0 OTHER REVENUES Special Fund Admin 89,700 89,700 Successory Agency Admin 50,000 50,000 CALCULATION OF PROCEEDS OF TAXES PROPOSED BUDGET FY 2017-2018 PROCEEDS NON GANN LIMIT PROCEEDS OF GANN LIMIT RDA Loan Repayment Donations 179,000 179,000 19,000 19,000 PVIC Gift Shop Miscellaneous Revenues 120,000 120,000 315,800 315,800 TOTAL REVENUES FROM OTHER AGENCIES 0 773,500 773,500 TOTAL GENERAL FUND 24,109,140 6,098,160 30,207,300 ALL FUNDS NON PROCEEDS PROCEEDS OF TAXES OF TAXES TOTAL GENERAL FUND 24,109,140 6,098,160 30,207,300 Gas Tax 1,261,200 1,261,200 1972 ACT 0 0 EL PRADO LIGHTING DISTRICT 2,500 2,500 CDBG 139,300 139,300 1911 ACT 617,800 617,800 WASTE REDUCTION 209,900 209,900 AIR QUALITY MANAGEMENT 50,600 50,600 PROPOSITION C 667,000 667,000 PROPOSITION A 803,600 803,600 PUBLIC SAFETY GRANTS 100,300 100,300 MEASURE R 508,600 508,600 MEASURE M 540,800 540,800 FEDERAL GRANTS 1,131,300 1,131,300 STATE GRANTS 600,000 600,000 HABITAT RESTORATION 5,000 5,000 SUBREGION 1 MAINTENANCE 4,800 4,800 MEASURE A MAINTENANCE & CAPITAL 90,100 90,100 ABALONE COVE SEWER DISTRICT 55,600 55,600 GINSBERG CULTURAL ARTS BLDG 500 500 DONOR RESTRICTED DONATIONS 7,500 7,500 QUIMBY 65,400 65,400 LOW -MOD INCOME HOUSING 45,300 45,300 AFFORDABLE HOUSING IN LIEU 3,500 3,500 ENVIRONMENTAL EXCISE TAX 114,500 114,500 BIKEWAYS 82,500 82,500 WATER QUALITY 0 0 BEAUTIFICATION FUND 2,900 2,900 CIP 458,600 458,600 EQUIPMENT REPLACEMENT FUND 300,900 300,900 IA - PORTUGUESE BEND 1,100 1,100 IA - ABALONE COVE 3,400 3,400 TOTAL ALL FUNDS 24,109,140 13,972,660 38,081,800 PROCEEDS OF TAXES 24,109,140 GANN LIMIT 28,928,085 OF GANN LIMIT 83% �►`��7 of �r +� IIII n Q �7 * DEPARTMENT OF �4c�woRTt�P F I N AN C E OFFICE OF THE DIRECTOR May 2017 Dear Fiscal Officer: EDMUND G. BROWN JR. . GOVERNOR STATE CAPITOL ■ ROOM 1 1 453 ■ SACRAMENTO CA ■ 95814-49SS ■ WWW.00F.CA.C-.OY Subject: Price Factor and Population Information Appropriations Limit The California Revenue and Taxation Code, section 2227, requires 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, 2017, in conjunction with a change in the cost of living, or price factor, to calculate their appropriations limit for fiscal year 2017-18. Attachment A 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 2017-18 appropriations limit. Attachment B provides the city and unincorporated county population percentage change. Attachment C provides the population percentage change for counties and their summed incorporated areas. 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. The Revenue and Taxation Code, section 2228 provides additional information regarding the appropriations limit. Article XIII B, section 9(C) of the California Constitution exempts certain special districts from the appropriations limit calculation mandate. The Code and the California Constitution can be accessed at the following website: http://Ieginfo.legislature.ca.gov/faces/codes.xhtm1. 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 requirement should be directed to their county, district legal counsel, or 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, 2017. 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. MICHAEL COHEN Director By: AMY M. COSTA Chief Deputy Director Attachment May 2017 Attachment A 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 fiscal year 2017-18 appropriation limit is: Per Capita Personal Income Fiscal Year Percentage change (FY) over prior year 2017-18 3.69 B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2017-18 appropriation limit. 2017-18: Per Capita Cost of Living Change = 3.69 percent Population Change = 0.85 percent Per Capita Cost of Living converted to a ratio: Population converted to a ratio: Calculation of factor for FY 2017-18: 3.69 + 100 = 1.0369 100 0.85 + 100 = 1.0085 100 1.0369 x 1.0085 = 1.0457 R Fiscal Year 2017-18 Attachment B Annual Percent Change in Population Minus Exclusions* January 1, 2016 to January 1, 2017 and Total Population, January 1, 2017 Total County Percent Change --- Population Minus Exclusions --- Population City 2016-2017 1-1-16 1-1-17 1-1-2017 Los Angeles Agoura Hills 0.01 21,015 21,018 21,018 Alhambra 0.79 86,237 86,922 86,922 Arcadia 0.31 57,194 57,374 57,374 Artesia -0.02 16,734 16,730 16,816 Avalon 0.03 3,717 3,718 3,718 Azusa 0.68 49,424 49,762 49,762 Baldwin Park 0.41 75,227 75,537 75,537 Bell 0.00 36,409 36,408 36,408 Bellflower 0.00 76,657 76,657 76,657 Bell Gardens 0.07 42,796 42,824 42,824 Beverly Hills -0.10 34,679 34,646 34,646 Bradbury -0.27 1,110 1,107 1,107 Burbank -0.01 105,046 105,033 105,033 Calabasas 0.14 24,168 24,202 24,202 Carson 0.23 93,455 93,674 93,674 Cerritos 1.21 49,439 50,039 50,039 Claremont 0.17 36,165 36,225 36,225 Commerce -0.02 13,067 13,064 13,064 Compton 0.00 100,046 100,050 100,050 Covina 0.02 49,000 49,011 49,011 Cudahy -0.02 24,417 24,411 24,411 Culver City -0.04 40,120 40,103 40,103 Diamond Bar 0.26 56,919 57,066 57,066 Downey 0.09 113,729 113,832 113,832 Duarte -0.02 22,038 22,033 22,033 EI Monte -0.02 114,295 114,268 114,268 EI Segundo 0.08 16,703 16,717 16,717 Gardena 0.31 60,534 60,721 60,721 Glendale 0.57 200,600 201,748 201,748 Glendora 1.31 51,928 52,608 52,608 Hawaiian Gardens -0.05 14,761 14,753 14,753 Hawthorne 0.01 87,649 87,662 87,662 Hermosa Beach -0.48 19,711 19,616 19,616 Hidden Hills 0.48 1,876 1,885 1,885 Huntington Park 0.00 59,385 59,383 59,383 Industry 0.00 440 440 440 Inglewood -0.02 114,921 114,900 114,900 Irwindale 0.28 1,419 1,423 1,423 *Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes. i • Fiscal Year 2017-18 *Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes. Attachment B Annual Percent Change in Population Minus Exclusions* January 1, 2016 to January 1, 2017 and Total Population, January 1, 2017 Total County Percent Change --- Population Minus Exclusions --- Population City 2016-2017 1-1-16 1-1-17 1-1-2017 La Canada Flintridge -0.04 20,505 20,497 20,497 La Habra Heights 0.46 5,438 5,463 5,463 Lakewood 0.04 79,239 79,272 79,272 La Mirada -0.03 49,448 49,434 49,434 Lancaster -0.03 153,328 153,289 157,820 La Puente 0.04 40,440 40,455 40,455 La Verne 0.35 33,058 33,174 33,174 Lawndale 0.02 33,357 33,365 33,365 Lomita 0.20 20,363 20,403 20,403 Long Beach 0.09 479,679 480,096 480,173 Los Angeles 1.06 3,996,347 4,038,817 4,041,707 Lynwood 0.19 71,863 71,997 71,997 Malibu -0.04 12,747 12,742 12,742 Manhattan Beach 0.45 35,329 35,488 35,488 Maywood -0.02 28,023 28,016 28,016 Monrovia 2.95 37,411 38,514 38,514 Montebello 0.20 63,792 63,917 63,917 Monterey Park 0.38 61,372 61,606 61,606 Norwalk 0.00 104,764 104,760 105,526 Palmdale -0.02 158,643 158,605 158,605 Palos Verdes Estates -0.08 13,674 13,663 13,663 Paramount 0.10 55,868 55,923 55,923 Pasadena 1.68 140,960 143,333 143,333 Pico Rivera 0.02 64,031 64,046 64,046 Pomona 0.75 154,151 155,306 155,306 Rancho Palos Verdes 0.31 42,736 42,867 42,884 Redondo Beach 0.09 68,844 68,907 68,907 Rolling Hills 0.00 1,922 1,922 1,922 Rolling Hills Estates -0.02 8,061 8,059 8,059 Rosemead -0.01 54,990 54,984 54,984 San Dimas 0.05 34,215 34,231 34,231 San Fernando 0.05 24,473 24,486 24,486 San Gabriel 1.69 40,339 41,020 41,020 San Marino 0.00 13,467 13,467 13,467 Santa Clarita 2.97 210,101 216,350 216,350 Santa Fe Springs -0.02 18,250 18,246 18,291 Santa Monica 0.59 93,282 93,834 93,834 Sierra Madre -0.03 11,013 11,010 11,010 Signal Hill 0.02 11,607 11,609 11,609 South EI Monte 0.31 20,798 20,862 20,862 *Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes. Fiscal Year 2017-18 *Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes. Attachment B Annual Percent Change in Population Minus Exclusions* January 1, 2016 to January 1, 2017 and Total Population, January 1, 2017 Total County Percent Change --- Population Minus Exclusions --- Population City 2016-2017 1-1-16 1-1-17 1-1-2017 South Gate 0.05 98,581 98,633 98,633 South Pasadena 0.00 25,993 25,992 25,992 Temple City 0.00 36,389 36,389 36,389 Torrance -0.01 147,116 147,101 147,101 Vernon 0.00 209 209 209 Walnut 0.11 30,101 30,134 30,134 West Covina -0.01 107,819 107,813 107,813 West Hollywood 0.31 35,770 35,882 35,882 Westlake Village 0.00 8,370 8,370 8,370 Whittier 0.10 87,622 87,708 87,708 Unincorporated -0.25 1,054,688 1,052,097 1,053,030 County Total 0.57 10,173,616 10,231,933 10,241,278 *Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.