AgdaPkt 2014-06-09 Closed and Joint SA

Browse Search

7.3.B. - Page 1 REPORT To the Honorable Mayor and City Council From the City Manager June 9, 2014 SUBJECT Annual Appropriations Limit for Fiscal Year 2014-15 RECOMMENDATION Adopt a Resolution establishing the appropriations limit for Fiscal Year 2014-15. BACKGROUND In 1979 the voters of the State of California passed Proposition 4, the Gann spending limit initiative (most recently amended in 1990 by Proposition 111). The initiative establishes and defines annual appropriation limits for state and local government entities and requires that the City adopt an appropriations limit annually. Moreover, the initiative provides for annual adjustments for changes in population (for the City or County, whichever is greater) and either the statewide percentage change in per capita personal income or percentage change in assessed valuation attributable to growth in non-residential new construction. ANALYSIS The recommended appropriations limit for FY 2014-15 is $573,095,639 while the limit for FY 2013-14 was $548,582,152. The estimated proceeds of taxes for FY 2014-15 are only $85,088,000, well below the $573,095,639 legal limit. The increase from FY 2013- 14 is primarily due to the increase (2.39%) in the assessed valuation attributable to growth in non-residential new construction, one of the factors used in calculating the change in the appropriation limit. The attachment displays the calculations utilized to arrive at this amount. ALTERNATIVES There are no practical alternatives as Article XIIIB of the State Constitution requires that the state and all local entities adopt an appropriations limit annually. FISCAL IMPACT There is no fiscal impact associated with adopting the recommended appropriations limit as the appropriation of the proceeds of taxes is well under the recommended limit. ENVIRONMENTAL REVIEW This ordinance is not a "project" within the meaning of the California Environmental Quality Act. (Public Resource Code § 21065; Guidelines § 15378).