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6.3.B. - Page 1 <br /> RE PO RT <br /> To the Honorable Mayor and City Council <br /> From the Cit Mana er <br /> June 3, 2013 <br /> SUBJECT <br /> Annual Appropriations Limit for Fiscal Year 2013-14 <br /> RECOMMENDATION <br /> Establish, by resolution, the appropriations limit for Fiscal Year 2013-14. <br /> BACKGROUND <br /> In 1979 the voters of the State of California passed Proposition 4 (amended in 1980 by <br /> Proposition 111), the Gann spending limit initiative. The initiative establishes and <br /> defines annual appropriation limits for state and local government entities and requires <br /> that the City adopt an appropriations limit annually. Moreover, the initiative provides for <br /> annual adjustments for changes in population (for the City or County, whichever is <br /> greater) and either the statewide percentage change in per capita personal income or <br /> percentage change in assessed valuation attributable to growth in non-residential new <br /> construction. <br /> ANALYSIS <br /> The recommended appropriations limit for FY 2013-14 is $548,582,152 while the limit <br /> for FY 2012-13 was $515,216,485. The estimated proceeds of taxes for FY 2013-14 are <br /> only $77,200,000, well below the $548,582,152 legal limit. The increase from FY 2012- <br /> 13 is primarily due to the increase (5.12%) in the amount of the increase in per capita <br /> income, one of the factors used in calculating the change in the appropriation limit. <br /> The attachment displays the calculations utilized to arrive at this amount. <br /> ALTERNATIVES <br /> There are no practical alternatives as Article XIIIB of the State Constitution requires that <br /> the state and all local entities adopt an appropriations limit annually. <br /> FISCAL IMPACT <br /> There is no fiscal impact associated with adopting the recommended appropriations <br /> limit as the appropriation of the proceeds of taxes is well under the recommended limit. <br /> ENVIRONMENTAL REVIEW <br /> This resolution is not a "project" within the meaning of the California Environmental <br /> Quality Act. (Public Resource Code § 21065; Guidelines § 15378). <br /> Page 1 of 2 <br />