14-I
TO: Honorable Mayor and Members of the City Council
ATTENTION: Jeffrey L. Stewart, City Manager
FROM: Tae Rhee, Finance Director/Treasurer
SUBJECT: Consideration and possible action to adopt Resolution No. 22-29 – A Resolution adopting the annual appropriations limit for fiscal year 2022-2023.
DATE: June 13, 2022
EXECUTIVE SUMMARY
In accordance with Article XIIIB of the California Constitution, the appropriations limit (also referred to as the "Gann limit") for fiscal year 2022-2023 has been calculated by applying inflation and population factors provided by the State Department of Finance.
RECOMMENDATION TO THE CITY COUNCIL
1) Adopt Resolution No. 22-29; or
2) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
None.
BACKGROUND
On November 6, 1979, California voters approved the Gann Spending Limitation Initiative (Proposition 4) establishing Article XIIIB of the State Constitution. Subsequently, on June 5, 1990, California voters approved the Traffic Congestion Relief and Spending Limitation Act (Proposition 111), which made various amendments to Article XIIIB of the State Constitution. Article XIIIB sets limits on the amount of tax revenues that the State and most local governments can appropriate within a given fiscal year.
- 1 -
Staff Report – Appropriations Limit for Fiscal Year 2022-2023 June 13, 2022
BACKGROUND – Continued
INFLATION FACTOR (selected higher of the following):
Change in the California
per capita personal income
7.55%
State
Department of
Finance
Selected for
calculation
Growth in the
nonresidential assessed
valuation due to new
construction within the City
1.53%
HdL Coren &
Cone
POPULATION FACTOR (selected higher of the following):
City of Bellflower
-0.13%
(population as of
1/1/22 of 77,359 vs.
1/1/21 of 77,458)
State
Department of
Finance
Selected for
calculation
Los Angeles County
-1.84%
(population as of
1/1/22 of 9,853,284
vs. 1/1/21 of
10,037,774)
State
Department of
Finance
The appropriations limit for fiscal year 2022-2023 is $94,560,794, an increase of $6,523,711 from the preceding fiscal year (Exhibit A). This new limit has been calculated by adjusting the fiscal year 2021-2022 appropriations limit for the changes in the California per capita personal income and the City’s population. Based on the Operating Budget, the appropriations that are subject to this limit total $34,965,946 (Exhibit B). Due to the fact that the annual appropriations limit is greater than the appropriations that are subject to the limit, the City is in compliance with the provisions of Article XIIIB of the California Constitution. The City’s calculation of the annual appropriations limit must also be reviewed by the auditors as part of the standard annual financial audit.
ATTACHMENTS
Resolution No. 22-29....................................................................................................... 3 Exhibit A, Annual Appropriations Limit Calculation .......................................................... 5 Exhibit B, Appropriations Subject to the Annual Limit...................................................... 6 State Department of Finance Letter, Dated May 2022 .................................................... 7 HdL’s Nonresidential New Construction Factor ............................................................. 12
- 2 -
CITY OF BELLFLOWER
RESOLUTION NO. 22-29
A RESOLUTION ADOPTING THE ANNUAL APPROPRIATIONS
LIMIT FOR FISCAL YEAR 2022-2023
THE CITY COUNCIL RESOLVES AS FOLLOWS:
SECTION 1. The City Council finds and declares as follows:
A. The City Council may choose the method of calculating adjustments to the City’s Appropriations Limit on an annual basis pursuant to Article XIIIB of the California Constitution. For inflation, pursuant to Article XIIIB, § 8(e)(2), adjustments to the Appropriations Limit may be calculated using either the percentage change in per capita personal income from the preceding year or the percentage change in the local assessment roll from the preceding year because of local nonresidential new construction. For population growth, pursuant to Government Code § 7901(b), the City may either use the percentage growth either in its jurisdiction or from the surrounding county;
B. Pursuant to Article XIIIB of the California Constitution, and those Government Code sections adopted pursuant to Article XIIIB, § 8(f), the City Council chooses to adjust the City’s Appropriations Limit by calculating inflation using the percentage change in the California per capita personal income from the preceding year and calculating population growth by using the percentage change in the City of Bellflower population;
C. The information necessary for making these adjustments is illustrated in attached Exhibits A and B, which are incorporated by reference; and
D. The City of Bellflower has complied with all the provisions of the amended Article XlIIB in determining the appropriations limit for fiscal year 2022-2023.
SECTION 2. The appropriations limit for fiscal year 2022-2023 for the City of Bellflower is established at $94,560,794.
SECTION 3. The appropriations subject to the annual limit as contained in the Operating Budget for fiscal year 2022-2023 are $34,965,946.
SECTION 4. This Resolution does not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before, this Resolution’s effective date. Any such amended part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Resolution.
- 3 -
City of Bellflower
Resolution No. 22-29
SECTION 5. If any part of this Resolution or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Resolution are severable.
SECTION 6. Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
SECTION 7. The Mayor, or presiding officer, is authorized to affix a signature to this Resolution signifying its adoption by the City Council of the City of Bellflower and the City Clerk, or her duly appointed deputy, is directed to attest thereto.
SECTION 8. This Resolution will become effective immediately upon adoption.
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER ON THIS 13TH DAY OF JUNE 2022.
________________________________
Ray Dunton, Mayor
ATTEST:
________________________________
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
________________________________
Karl H. Berger, City Attorney
ATTACHMENTS:
Exhibit A – Annual Appropriations Limit Calculation
Exhibit B – Appropriations Subject to the Annual Limit
- 4 -
EXHIBIT A
(Resolution No. 22-29)
CITY OF BELLFLOWER
ANNUAL APPROPRIATIONS LIMIT CALCULATION
FOR FISCAL YEAR 2022-2023
Appropriations limit for fiscal year 2021-2022: 88,037,083$ Adjustment factors for fiscal year 2022-2023:
Inflation Population
Factor Factor Combined
(Note 1) (Note 2) Factor
1.0755 0.9987 1.07410185 x 0.07410185
Adjustment for inflation and population 6,523,711
Appropriations limit for fiscal year 2022-2023: 94,560,794$ Notes:
1. INFLATION FACTOR:
2. POPULATION FACTOR:
The City may adjust its appropriations limit by either the annual percentage change in per capita personal income provided by the State Department of Finance, or the percentage change in local assessment roll from the preceding year due to the addition of local nonresidential construction. The above factor represents the annual percentage change in the California per capita personal income provided by the State Department of Finance.
The City may adjust its appropriations limit by either the percentage change in the City's own population growth, or the percentage change in the population growth for Los Angeles County. The above factor represents the annual percentage change in population for the City of Bellflow er.
http://sharepoint/Agenda Library/6-13-22 CC Meeting/06-13-2022-FD-Consent-2022-23 Appropriations(Gann) Limit/ Appropriations (Gann) Limit FY 2022-23 - Exhibits A & B - 5 -
EXHIBIT B
(Resolution No. 22-29)
CITY OF BELLFLOWER
APPROPRIATIONS SUBJECT TO THE ANNUAL LIMIT
FOR FISCAL YEAR 2022-2023
A. PROCEEDS OF TAXES
Property tax 4,195,000$
Property tax in lieu of vehicle license fees 9,612,000
Utility users tax 3,000,000
Cannabis business tax 3,000,000
Sales tax 8,250,000
Transactions and use tax 5,140,000
Real property transfer tax 200,000
Transient occupancy tax 961,000
Business license tax 700,000
Motor vehicle license fees 57,000
TOTAL PROCEEDS OF TAXES 35,115,000$
B. EXCLUSIONS:
Qualified Capital Outlay -
Annual Debt Service (230,500)
TOTAL EXCLUSIONS (230,500)
C. NET INVESTED PROCEEDS OF TAXES 34,884,500
D. INTEREST ALLOCATION 81,446
E. APPROPRIATIONS SUBJECT TO THE LIMIT 34,965,946$
F. APPROPRIATIONS LIMIT FOR 2022-2023 (Exhibit A) 94,560,794$ G. DIFFERENCE (ITEM F MINUS ITEM E) 59,594,848$
CONCLUSION:
The City is in compliance with the provisions of Article XIIIB of the California Constitution as the Annual Appropriations Limit (Item F) is greater than the Appropriations Subject to the Limit (Item E).
http://sharepoint/Agenda Library/6-13-22 CC Meeting/06-13-2022-FD-Consent-2022-23 Appropriations(Gann) Limit/ Appropriations (Gann) Limit FY 2022-23 - Exhibits A & B - 6 -
: http://leginfo.legislature.ca.gov/faces/codes.xhtml .
May 2022
Dear Fiscal Officer:
Subject: Price Factor and Population Information
Appropriations Limit
California Revenue and Taxation Code section 2227 requires the Department of Finance to transmit an estimate of the percentage change in population to local governments. Each local jurisdiction must use their percentage change in population factor for January 1, 20 22, in conjunction with a change in the cost of living, or price factor, to calculate their appropriations limit for fiscal year 2022-23. Attachment A provides the change in California’s per capita personal income and an example for utilizing the price factor and population percentage change factor to calculate the 2022-23 appropriations limit. Attachment B provides the city and unincorporated county population percentage change. Attachment C provides the population percentage change for counties and their summed incorporated areas. The population percentage change data excludes federal and state institutionalized populations and military populations.
Population Percent Change for Special Districts
Some special districts must establish an annual appropriations limit. California Revenue and Taxation Code section 2228 provides additional information regarding the appropriations limit.
Article XIII B, section 9(C) of the California Constitution exempts certain special districts from the appropriations limit calculation mandate. The code section and the California Constitution can be accessed at the following website
Special districts required by law to calculate their appropriations limit must present the calculation as part of their annual audit. Any questions special districts have on this requirement should be directed to their county, district legal counsel, or the law itself. No state agency reviews the local appropriations limits.
Population Certification
The population certification program applies only to cities and counties. California Revenue and Taxation Code section 11005.6 mandates Finance to automatically certify any population estimate that exceeds the current certified population with the State Controller’s Office. Finance will certify the higher estimate to the State Controller by June 1, 2022.
Please Note: The prior year’s city population estimates may be revised. The per capita personal income change is based on historical data.
If you have any questions regarding this data, please contact the Demographic Research Unit at (916) 323-4086.
KEELY MARTIN BOSLER
Director
By:
ERIKA LI
Chief Deputy Director
Attachment
- 7 -
May 2022
Attachment A
A. Price Factor: Article XIII B specifies that local jurisdictions select their cost of living factor to compute their appropriation limit by a vote of their governing body. The cost of living factor provided here is per capita personal income. If the percentage change in per capita personal income is selected, the percentage change to be used in setting the fiscal year 2022-23 appropriation limit is:
Per Capita Personal Income
Fiscal Year Percentage change
(FY) over prior year
2022-23 7.55
B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2022-23 appropriation limit.
2022-23:
Per Capita Cost of Living Change = 7.55 percent
Population Change = -0.30 percent
Per Capita Cost of Living converted to a ratio: 7.55 + 100 = 1.0755 100
Population converted to a ratio: -0.30 + 100 = 0.997
100
Calculation of factor for FY 2022-23: 1.0755 x 0.997 = 1.0723 - 8 -
Fiscal Year 2022-23
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2021 to January 1, 2022 and Total Population, January 1, 2022 Total
County Percent Change ---Population Minus Exclusions ---Population City 2021-2022 1-1-21 1-1-22 1-1-2022
Los Angeles
Agoura Hills -1.02 19,975 19,771 19,771
Alhambra -0.42 82,182 81,834 81,834
Arcadia -0.54 56,240 55,934 55,934
Artesia -0.74 16,261 16,140 16,226
Avalon -0.99 3,428 3,394 3,394
Azusa -0.97 50,191 49,704 49,704
Baldwin Park -0.84 71,455 70,855 70,855
Bell -1.00 33,962 33,624 33,624
Bellflower -0.96 78,107 77,359 77,359
Bell Gardens -1.03 39,265 38,861 38,861
Beverly Hills -0.92 32,565 32,265 32,265
Bradbury -1.09 914 904 904
Burbank -0.77 106,268 105,451 105,451
Calabasas -0.97 23,151 22,926 22,926
Carson -0.59 92,912 92,362 92,362
Cerritos -1.08 49,163 48,634 48,634
Claremont -0.78 37,364 37,072 37,072
Commerce -1.08 12,273 12,140 12,140
Compton -1.08 95,261 94,233 94,233
Covina -0.95 50,933 50,449 50,449
Cudahy -0.92 22,526 22,318 22,318
Culver City -0.48 40,330 40,135 40,135
Diamond Bar -1.06 54,782 54,204 54,204
Downey -0.83 113,525 112,584 112,584
Duarte -1.00 21,473 21,258 21,258
El Monte -0.94 108,728 107,706 107,706
El Segundo -0.93 17,244 17,084 17,084
Gardena -0.72 60,382 59,947 59,947
Glendale -0.77 194,618 193,116 193,116
Glendora -0.95 52,316 51,821 51,821
Hawaiian Gardens -0.99 13,755 13,619 13,619
Hawthorne -1.00 87,722 86,841 86,841
Hermosa Beach -1.09 19,382 19,171 19,171
Hidden Hills 0.12 1,736 1,738 1,738
Huntington Park -1.06 54,519 53,942 53,942
Industry -0.45 440 438 438
Inglewood -0.62 107,143 106,481 106,481
Irwindale 0.54 1,482 1,490 1,490
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes. - 9 -
Fiscal Year 2022-23
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2021 to January 1, 2022 and Total Population, January 1, 2022 Total
County Percent Change ---Population Minus Exclusions ---Population City 2021-2022 1-1-21 1-1-22 1-1-2022
La Canada Flintridge -1.03 20,291 20,081 20,081
La Habra Heights -1.08 5,655 5,594 5,594
Lakewood -0.99 81,681 80,876 80,876
La Mirada -0.77 49,074 48,696 48,696
Lancaster -0.62 172,298 171,234 175,164
La Puente -0.10 37,626 37,587 37,587
La Verne -0.93 32,608 32,304 32,304
Lawndale -1.07 31,638 31,301 31,301
Lomita -1.05 20,851 20,633 20,633
Long Beach 0.20 459,711 460,636 460,682
Los Angeles -0.88 3,851,093 3,817,053 3,819,538
Lynwood -0.80 67,260 66,723 66,723
Malibu -0.49 10,739 10,686 10,686
Manhattan Beach -1.29 35,357 34,902 34,902
Maywood -0.87 25,033 24,814 24,814
Monrovia -0.65 37,809 37,563 37,563
Montebello -0.90 62,180 61,622 61,622
Monterey Park -1.00 60,814 60,207 60,207
Norwalk -0.56 101,517 100,946 101,645
Palmdale -0.89 168,895 167,398 167,398
Palos Verdes Estates -1.04 13,116 12,980 12,980
Paramount -1.00 53,009 52,477 52,477
Pasadena -0.52 139,029 138,310 138,310
Pico Rivera -0.62 61,827 61,442 61,442
Pomona 0.60 148,879 149,766 149,766
Rancho Palos Verdes -0.98 41,861 41,451 41,468
Redondo Beach -1.10 69,742 68,972 68,972
Rolling Hills -1.12 1,703 1,684 1,684
Rolling Hills Estates 0.07 8,283 8,289 8,289
Rosemead -0.61 50,823 50,511 50,511
San Dimas -0.86 34,651 34,352 34,352
San Fernando 0.00 23,520 23,519 23,519
San Gabriel -1.03 39,250 38,845 38,845
San Marino -0.62 12,334 12,257 12,257
Santa Clarita 0.33 228,084 228,835 228,835
Santa Fe Springs 1.05 18,523 18,718 18,763
Santa Monica -0.89 93,242 92,408 92,408
Sierra Madre -0.86 10,959 10,865 10,865
Signal Hill -0.90 11,702 11,597 11,597
South El Monte 0.70 19,532 19,668 19,668
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes. - 10 -
Fiscal Year 2022-23
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2021 to January 1, 2022 and Total Population, January 1, 2022 County
City
Percent Change
2021-2022
---Population Minus Exclusions ---
1-1-21 1-1-22
Total
Population
1-1-2022
South Gate
South Pasadena
Temple City
Torrance
Vernon
0.51 -1.00
-0.64
-0.99
-0.95
92,783
26,849
36,497
145,876
210
93,259
26,580
36,262
144,433
208
93,259
26,580
36,262
144,433
208
Walnut
West Covina
West Hollywood
Westlake Village
Whittier
Unincorporated
-0.88
-0.96
-0.43
-0.96
0.05 -0.67
28,344
109,290
35,553
8,121
87,886
1,016,054
28,094
108,243
35,399
8,043
87,931
1,009,225
28,094
108,243
35,399
8,043
87,931
1,009,857
County Total -0.71 9,923,635 9,853,284 9,861,224
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes. - 11 -
NONRESIDENTIAL NEW CONSTRUCTION
THE CITY OF BELLFLOWER
2020/21 TO 2021/22 TAX YEARS - IN PARCEL NUMBER ORDER
Current Year
Improvements
Prior Year
ImprovementsUse CategoryParcel Owner
Percent
Change
6271-021-025 Commercial 168,894 320,643Nikrad Enterprises Inc + 89.8% 6277-002-013 Commercial 68,496,257 69,620,790Kaiser Foundation Hospitals + 1.6% 7106-016-008 Commercial 1,489,212 1,605,676Shadrall Bellflower Lp + 7.8% 7107-020-011 Commercial 357,000 463,754Terra Firma California Llc + 29.9% 7161-002-014 Commercial 212,241 542,8063351 Scott Street Llc + 155.8% 7162-004-005 Industrial 517,140 2,235,057Mvg Turnpike Llc + 332.2% 7162-011-051 Commercial 624,240 1,136,6519032 Artesia Holdings Llc + 82.1% 7162-019-062 Industrial 448,355 556,055Bny Enterprises Llc + 24.0% 7163-003-032 Institutional 1,849,645 1,893,807Valley Christian School System + 2.4% 9 Parcels Listed 74,162,984 78,375,239 + 5.7%
This calculation reflects the 2021/22 increase in taxable values for this city due to non-residential new construction as a percentage of the total taxable value Increase (as of the 2021/22 lien year roll date). This percentage may be used as an alternative to the change in California per-capita personal income for calculating a taxing agency's annual adjustment of its Appropriation Limit pursuant to Article XIIIB of the State Constitution as Amended by Proposition 111 in June, 1990.
4,212,255
-768,329
3,443,926
225,338,604
1.53%
Total Change in Non-Residential Valuation Due to New Development Less Automatic 1.036% Assessors's Inflation Adjustment
Actual Change in Non-Residential Valuation
Change in Total Assessed Value
= Alternate 2022/23 Appropriations Limit Factor
Includes taxable primary parcels with known nonresidential use codes, no prior lien year transfers, and improvement value increases greater than 1.0% Change in Total Assessed Value is the assessed value change of the locally assessed secured and unsecured tax rolls.
This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone Prepared On 10/21/2021 By MV Data Source: Los Angeles County Assessor 2021/22 Secured Tax Rolls
- 12 -