HomeMy WebLinkAbout21 - Annual Appropriation Gann LimitCouncil Agenda Number 21
CITY OF NEWPORT BEACH
Administrative Services Department
Resource Management • Fiscal Services • M.I.S.• Revenue • Accounting
11 June 2002
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
From: Dennis Danner, Administrative Services Director te�14-
SUBJ: ADOPTION OF THE ANNUAL APPROPRIATION (GANN) LIMIT
Recommendation: Hold a public hearing and adopt, by Resolution, the City's
Appropriation (Gann) Limit for the 2002 -03 fiscal year in the amount of $94,769,006.
Background: Article XIIIB of the California Constitution (Proposition 4) specifies
that appropriations of government entities may increase annually only by a limited
amount (primarily to allow for population increases and inflation). As in the past, SB
1352 (Revenue and Taxation Code Section 7910) requires each local government to
establish its appropriations limit by resolution each year at a regularly scheduled or
noticed special meeting. The attached resolution submitted for Council approval
fulfills this requirement.
As the following table shows, even without calculating authorized exclusions, the
amount by which our Proceeds of Taxes are under the Gann Limit during the past
eleven years has been sufficient to provide a reasonable margin of comfort.
1991 -92 Gann Limit Margin: $6,955,931
1992 -93 Gann Limit Margin:
$6,527,790
1993 -94 Gann Limit Margin:
$15,536,246
1994 -95 Gann Limit Margin: -
$16,193,661
1995 -96 Gann Limit Margin:
$19,624,749
1996 -97 Gann Limit Margin:
$19,711,288
1997 -98 Gann Limit Margin:
$20,285,768
1998 -99 Gann Limit Margin:
$20,344,472
1999 -00 Gann Limit Margin:
$21,751,495
2000 -01 Gann Limit Margin:
$23,470,251
2001 -02 Gann Limit Margin
$26,941,613
2002 -03 Gann Limit Margin
$21,883,919
11 June 2002
Page 2
There are several factors which have a bearing on the Gann Limit, and on our
expenditures subject to the Limit. However, actions by the State reducing our tax
revenues, along with weak economic conditions during the early and mid 1990's
established the trend which can be seen above. The detailed population and inflation
adjustment calculations are still required, but they have been reduced to a level of
relative insignificance by these larger factors. We are still required to perform the
calculations and take appropriate Council action, but, unless the law is changed, it is
apparent that staying under the Gann Limit is not something we are going to have to
worry about any time soon.
RESOLUTION NO. 2002-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DETERMINING
AND ESTABLISHING AN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2002 -03 IN
ACCORDANCE WITH ARTICLE XIIIB OF THE CALIFORNIA CONSTITUTION AND
GOVERNMENT CODE SECTION 7910.
WHEREAS, Article XIIIB was added to the California Constitution
at the special State -wide election held November 6, 1979 (commonly known
as Proposition 4); and
WHEREAS, Government Code Section 7910 was added to Chapter
12.05 by Statute at the Regular Session of the California Legislature; and
WHEREAS, Proposition 111, which, among other things, provides
new annual adjustment formulas for the Appropriations Limit, was approved
by the voters in June, 1990, and
WHEREAS, The League of California Cities and the State of
California Department of Finance have published population and per capita
income growth indexes, as well as guidelines for the uniform application
of Proposition 111, and
WHEREAS, Government Code Section 7910 requires the governing
body of each local jurisdiction to adopt, by resolution, its
appropriations limit; and
WHEREAS, said appropriations limit must be adhered to in
preparing and adopting this City's annual budget.
NOW, THEREFORE, the City Council of the City of Newport Beach
does hereby resolve as follows:
Section 1: In accordance with Article XIIIB of the California
Constitution and Government Code Section 7910, the appropriations limit
for fiscal year commencing 1 July 2002 for the City of Newport Beach is
$94,769,006. The computation of appropriations for the 2002 -03 fiscal
year are set forth in detail in the attachment hereto, which is
incorporated as though fully set forth herein.
Section 2: Said appropriations limit shall be adhered to in
the City of Newport Beach budget for the 2002 -03 fiscal year.
ATTEST:
ADOPTED this 11th day of June, 2002.
City Clerk
Mayor
CITY OF NEWPORT BEACH
COMPUTATION OF APPROPRIATION LIMIT FOR
FISCAL YEAR ENDING 30 JUNE 2003,
AS PER ARTICLE XIIIB, CALIFORNIA STATE CONSTITUTION
PRIOR YEAR INFLATION POPULATION NEW APPROP.
FISCAL YEAR LIMIT ADJUST. (1) ADJUST. (2) LIMIT
2002 -03 $94,050,612 - 0.0127 0.0206 $94,769,006
note (1): Based on California per capita income increases
note (2): Based on Orange County population growth
CALCULATION OF ESTIMATED PROCEEDS OF TAXES FOR
FISCAL YEAR ENDING 30 JUNE 2003
Total Estimated Proceeds of Taxes $72,885,087
Less Authorized Exclusions
Net Proceeds of Taxes
note (3) $0
$72,885,087
note (3): Since 2002 -03 estimated gross proceeds were substantially less than
appropriations limit, exclusions were not calculated.
AMOUNT UNDER APPROPRIATIONS LIMIT 1$21r883,919