MEMORANDUM Finance Department DATE: TO: FROM: SUBJECT: City Council Dave Warren Director of Finance RECOMMENDATION: GANN APPROPRIATION LIMIT Adopt a Resolution establishing the Appropriation Limit (GANN) for Fiscal Year 2010/2011 and determining compliance with Government Code Section 7910., Bold, Bold, Bold, Bold BACKGROUND: In November of 1979, the voters of California passed Proposition IV which specified that government appropriations may increase annually by a factor comprised of change in population combined with either the Consumer Price Index (CPI) or the change in the per capita personal income. This measure was intended to provide citizen control of government spending and taxation. The adoption of the GANN Limit is an annual requirement. The City of Placerville s GANN Limit is currently calculated to be $16,803,270. The General Fund tax proceeds subject to the GANN Limit are estimated to be $4,476,385. Like past fiscal years, the City of Placerville is well within the appropriations limit for Fiscal Year 2010/2011. ANAYSIS: The GANN limit calculation begins with the total General Fund revenues for Fiscal Year 2009/2010 (please see Exhibit A). Of the total revenues, revenue proceeds and non-proceeds are summarized in separate columns. Revenue proceeds are those revenue sources that are subject to the GANN Limit including most tax measures and intergovernmental revenue. Non-proceed revenues include most local fees, fines, and permits and are not subject to the GANN limit. Total General Fund revenues for Fiscal Year 2009/2010 are $6,213,270. Of the $6,213,270 amount, $4,476,385 is calculated to be proceed revenues or revenues subject to the GANN Limit and $1,736,885 is calculated to be non-proceed revenue not subject to the GANN Limit. Interest income has been allocated based on the weighted average of each category. AGENDA 1 Gann Limit FY 10-11
The Council adopted GANN Limit for Fiscal Year 2009/2010 was $17,196,486. Each year, the City is required to adjust Placerville s GANN Limit by both the prior year per capita personal income increment and the prior year change in population (please see Note 4). This information is received from the State Department of Finance (please see the attached letter). The Fiscal Year 2010/2011 GANN Limit was adjusted by a per capita personal increment factor of 0.9746 and a population change factor of 1.0026. The Fiscal Year 2010/2011 GANN Limit is calculated to be $16,803,270. The forecasted General Fund proceed revenues subject to the GANN Limit is $4,476,385 leaving $12,326,886 ($16,803,270 - $4,476,385) of unused appropriation limit. As you can see, Placerville is well within the GANN Limit. This calculation was made available for public viewing at least fifteen days prior tonight s meeting. Staff respectfully requests the Council s approval of the Fiscal Year 2010/2011 GANN Limit calculation. Dave Warren Director of Finance Reviewed and Approved: John Driscoll City Manager/City Attorney AGENDA 2 Gann Limit FY 10-11
Exhibit A Calculation of Appropriations Subject to Proposition IV Limit For Fiscal Year Ended June 30, 2011 Revenues Proceeds Non-Proceeds Allocated General Fund Taxes Property Tax $ 209,083 $ 209,083 $ - $ - Franchise Tax 244,360 244,360 - - Sales Tax 2,865,179 2,865,179 - - Sales Tax-public safety - - - - Transient occupancy tax 115,820 115,820 - - Business tax 153,675 153,675 - - Real property transfer 33,670 33,670 - - Other taxes - - - - Total Taxes 3,621,787 3,621,787 - - Licenses and Permits Construction Permits 107,255-107,255 - Mobile home permits - - - - Other permits - - - - Total licenses and permits 107,255-107,255 - Intergovernmental Revenues Motor vehicle in lieu tax 853,908 853,908 - - Off Highway vehicle license - - - - Other State reimbursements - - - - POST Reimbursements 160-160 Street Sweeping-Cal Trans - - - - Total intergovernmental revenues 854,068 853,908 160 - Charges for Services Plan check fees 27,089-27,089 - Subdivision fees - - - - Planning and zoning fees 13,801-13,801 - Engineering fees 70,900-70,900 - Environmental assessment fees - - - - Finance Service Fees 8,910-8,910 - Police contract services 76,801-76,801 - Fire services - - - - Recreation fees 511,569-511,569 - Total charges for services 709,070-709,070 - Subtotal forwarded 5,292,180 4,475,695 816,485 - AGENDA 3 Gann Limit FY 10-11
Exhibit A (Continued) Calculation of Appropriations Subject to Proposition IV Limit For Fiscal Year Ended June 30, 2011 General Fund, Continued Revenues Proceeds Non-Proceeds Allocated Subtotal forwarded $ 5,292,180 $ 4,475,695 $ 816,485 $ - Fines and forfeitures Vehicle code fines 192,971-192,971 - Abandoned vehicle abatement 5,289-5,289 - Parking citations 41,372-41,372 - Other court fines - - - - Restitution-booking fees - - - - DUI cost recovery 4,705-4,705 - Total fines and forfeitures 244,337-244,337 - Use of Money and Property Interest 957 - - 957 Concession fees - - - - Pool/Scout/Town Hall rentals 24,416-24,416 - Sundry revenues 72,422-72,422 - Total use of money and property 97,795-96,838 957 Other Financing Sources Overhead allocation 578,958-578,958 - Total other financing sources 578,958-578,958 - Subtotal General Fund 6,213,270 4,475,695 1,736,618 957 Interest allocation (Note 2) 690 267 - Total General Fund $ 4,476,385 $ 1,736,885 $ 957 AGENDA 4 Gann Limit FY 10-11
Exhibit B Calculation of Appropriations Subject to Proposition IV Limit For Fiscal Year Ended June 30, 2011 Limit at June 30, 2010 $ 17,196,486 2010/2011 per capita personal 0.9746 income increment (Note 4) 16,759,695 2009 to 2010 population change 1.0026 Appropriations Limit FY 10/11 $ 16,803,270 Appropriations Limit FY 10/11 $ 16,803,270 Total FY 10/11 General Fund revenues subject to 4,476,385 Appropriations Limit (Schedule A) Unused appropriations limit $ 12,326,886 AGENDA 5 Gann Limit FY 10-11
Notes to Proposition IV Limit Calculation For the Fiscal Year Ended June 30, 2011 Note 1: Summary of Significant Policies A. Background In November of 1979, the voters of California passed Proposition IV, which added Article XIIIB to the State Constitution. This article specifies that appropriations made by governmental entities may increase annually by a factor comprised of the change in population, combined with either the change in U.S. Consumer Price Index or California per capita personal income. B. Accounting Basis The City of Placerville prepares the annual budget using an accrual Method of accounting. This method is in conformance with generally accepted accounting principles, and accordingly, the calculation included in this report has been prepared on the budgetary basis used by the City. C. Proceeds / Non-proceeds of Tax The revenue for each governmental type fund has been allocated between proceeds and non-proceeds of tax based on guidelines established by the Office of the State Controller. Please refer to Exhibit A for the City of Placerville s revenue allocation. Note 2: Interest Allocation Interest earned in the general fund is required to be allocated between Proceeds and non-proceeds of taxes. The following calculation was Performed to make this allocation: Total General Fund (Excluding Non- Interest) Proceeds Proceeds Total Revenue Amount $6,212,313 $4,475,695 $1,736,618 Percent 100.00% 72.05% 27.95% Interest Allocated $ 957 $ 690 $ 267 AGENDA 6 Gann Limit FY 10-11
Note 3: Enterprise Fund Actives Each enterprise fund activity must be analyzed to determine if excess revenues exist which may be construed to be proceeds of tax. This analysis was performed for both the water and sewer enterprise funds. It was determined that the costs of providing these services equal the revenues generated. Accordingly, no excess revenues exist as of June 30, 2010. Note 4: Population and Price Indexes The State of California Department of Finance provides to each agency subject to the provisions of Article XIIIB, the population information for the applicable city of county, as well as statewide consumer s price index and per capita income information. These factors are used in the City of Placerville s 2010/2011 Appropriations Limit calculation as illustrated on Exhibit B. AGENDA 7 Gann Limit FY 10-11