JUNE 7, 2005 ANNUAL APPROPRIATION LIMIT FOR FY05- JUNE 7, 2005 ANNUAL APPROPRIATION LIMIT FOR FY05-



TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL

FROM: DIRECTOR OF FINANCE & INFORMATION TECHNOLOGY

DATE: JUNE 7, 2005

SUBJECT: ANNUAL APPROPRIATION LIMIT FOR FY05-06

Staff Coordinator: Jane Lin, Accountant

RECOMMENDATION:

Adopt Resolution No. 2005- establishing the City's Appropriation Limit for FY05-06.

BACKGROUND:

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. The City follows statewide guidelines in preparing the Gann appropriation limit calculation in coordination with the adoption of the annual budget. The calculation of the appropriation limit for FY05-06 will be reviewed by the City's independent auditors in conjunction with the performance of the annual audit.

The appropriation limit establishes a ceiling on the amount of tax revenue the City can receive and appropriate for spending each year. The appropriation limit is computed using a base year amount calculated for FY79-80. The base amount is then adjusted each year using inflationary and population growth statistics provided by the State Department of Finance. The appropriation limit calculated for FY05-06 is $18,822,857.

Based upon the proposed budget, staff has determined that $11,271,942 of projected tax revenue is subject to the appropriation limit in FY05-06. As has historically been the case, the City has a very large margin between the projected tax revenue and the appropriation limit for FY05-06.

Respectfully submitted,

Dennis McLean

Director of Finance & Information Technology

Reviewed:

Les Evans

City Manager

RESOLUTION NO. 2005-

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF RANCHO PALOS VERDES ESTABLISHING

THE FISCAL YEAR 2005-2006 APPROPRIATION LIMIT

FOR THE CITY OF RANCHO PALOS VERDES

WHEREAS, the City of Rancho Palos Verdes has established its Appropriation Limit of $18,822,857 (Eighteen Million, Eight Hundred and Twenty-Two Thousand, Eight Hundred and Fifth-Seven Dollars) for FY05-06; and

WHEREAS, by a letter, dated May 1, 2005, the California Department of Finance has provided the following factors relevant to the calculation of the Appropriation Limit for FY05-06:

California Per Capita Personal Income change:

Plus 5.26% (+ Five Point Two Six Percent)

City of Rancho Palos Verdes Population Adjustment:

Plus 0.77% (+ Zero Point Seven Seven Percent)

WHEREAS, the City Finance staff has calculated the Appropriation Limit for FY05-06 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 FY05-06.

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 $18,822,857 (Eighteen Million, Eight Hundred and Twenty-Two Thousand, Eight Hundred and Fifty-Seven Dollars) for FY05-06.

Section 2: The Appropriation Limit of the City of Rancho Palos Verdes in the amount of $18,822,857 (Eighteen Million, Eight Hundred and Twenty-Two Thousand, Eight Hundred and Fifty-Seven Dollars) exceeds the proceeds from taxes, calculated in the amount of $11,271,942 (Eleven Million, Two Hundred and Seventy-One Thousand, Nine Hundred and Forty-Two Dollars) for FY05-06. 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 7th DAY OF JUNE 2005.

MAYOR

ATTEST:

CITY CLERK

State of California )

County of Los Angeles ) ss

City of Rancho Palos Verdes )

I, CAROLYNN PETRU, City Clerk of The City of Rancho Palos Verdes, hereby certify that the above Resolution No. 2005- was duly and regularly passed and adopted by the said City Council at a regular meeting thereof held on June 7, 2005.

 

CITY CLERK