14-B
TO: Honorable Mayor and Members of the City Council
ATTENTION: Jeffrey L. Stewart, City Manager
FROM: Tae Rhee, Director of Finance/Treasurer
SUBJECT: Consideration and possible action to adopt Resolution No. 23-21 –A Resolution adopting the annual appropriations limit for fiscal year 2023-2024.
DATE: June 12, 2023
EXECUTIVE SUMMARY
In accordance with Article XIIIB of the California Constitution, the appropriations limit (also referred to as the "Gann limit") for fiscal year 2023-2024 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. 23-21; 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 2023-2024 June 12, 2023
BACKGROUND – Continued
INFLATION FACTOR (selected higher of the following):
Change in the California
per capita personal income
4.44%
State
Department of
Finance
Selected for
calculation
Growth in the
nonresidential assessed
valuation due to new
construction within the City
0.17%
HdL Coren &
Cone
POPULATION FACTOR (selected higher of the following):
City of Bellflower
-0.56%
(population as of
1/1/23 of 76,924 vs.
1/1/22 of 77,359)
State
Department of
Finance
Selected for
calculation
Los Angeles County
-1.02%
(population as of
1/1/23 of 9,753,247
vs. 1/1/22 of
9,853,284)
State
Department of
Finance
The appropriations limit for fiscal year 2023-2024 is $98,206,241, an increase of $3,645,447 from the preceding fiscal year (Exhibit A). This new limit has been calculated by adjusting the fiscal year 2022-2023 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 $27,598,242 (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. 23-21....................................................................................................... 3 Exhibit A, Annual Appropriations Limit Calculation .......................................................... 5 Exhibit B, Appropriations Subject to the Annual Limit...................................................... 6 State Department of Finance Letter, Dated May 2023 .................................................... 7 HdL’s Nonresidential New Construction Factor ............................................................. 12
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CITY OF BELLFLOWER
RESOLUTION NO. 23-21 A RESOLUTION ADOPTING THE ANNUAL APPROPRIATIONS LIMIT FOR FISCAL YEAR 2023-2024
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 2023-2024.
SECTION 2. The appropriations limit for fiscal year 2023-2024 for the City of Bellflower is established at $98,206,241.
SECTION 3. The appropriations subject to the annual limit as contained in the Operating Budget for fiscal year 2023-2024 are $27,598,242.
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.
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City of Bellflower
Resolution No. 23-21
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 12TH DAY OF JUNE 2023.
________________________________ Sonny Santa Ines, 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
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EXHIBIT A
(Resolution No. 23-21)
CITY OF BELLFLOWER
ANNUAL APPROPRIATIONS LIMIT CALCULATION
FOR FISCAL YEAR 2023-2024
Appropriations limit for fiscal year 2022-2023:94,560,794$ Adjustment factors for fiscal year 2023-2024:
Inflation Population
Factor Factor Combined
(Note 1)(Note 2)Factor
1.0444 0.9944 1.03855136 x 0.03855136
Adjustment for inflation and population 3,645,447
Appropriations limit for fiscal year 2023-2024:98,206,241$ 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 Bellflower.
S:\AA\Staff Reports\SR 2023-24\Appropriations (GANN) Limit FY 23-24\Approved\ Appropriations (Gann) Limit FY 2023-24 - Exhibits A & B - 5 -
EXHIBIT B
(Resolution No. 23-21)
CITY OF BELLFLOWER
APPROPRIATIONS SUBJECT TO THE ANNUAL LIMIT
FOR FISCAL YEAR 2023-2024
A.PROCEEDS OF TAXES
Property tax 4,504,000$
Property tax in lieu of vehicle license fees 10,458,000 Utility users tax 3,600,000
Cannabis business tax 3,500,000
Sales tax 8,900,000
Transactions and use tax 6,800,000
Real property transfer tax 150,000
Transient occupancy tax 1,090,000
Business license tax 840,000
Motor vehicle license fees 70,000
TOTAL PROCEEDS OF TAXES 39,912,000$
B.EXCLUSIONS:
Qualified Capital Outlay (12,873,449)
Annual Debt Service (230,501)
TOTAL EXCLUSIONS (13,103,950)
C.NET INVESTED PROCEEDS OF TAXES 26,808,050
D.INTEREST ALLOCATION 790,192
E.APPROPRIATIONS SUBJECT TO THE LIMIT 27,598,242$
F.APPROPRIATIONS LIMIT FOR 2023-2024 (Exhibit A)98,206,241$ G.DIFFERENCE (ITEM F MINUS ITEM E)70,607,999$
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).
S:\AA\Staff Reports\SR 2023-24\Appropriations (GANN) Limit FY 23-24\Approved\ Appropriations (Gann) Limit FY 2023-24 - Exhibits A & B - 6 -
May 2023
Dear Fiscal Officer:
Subject: Price Factor and Population Information
Appropriations Limit
California Revenue and Taxation Code section 2227 requires the Department of Finance (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, 2023, in conjunction with a change in the cost of living, or price factor, to calculate their appropriations limit for fiscal year 2023-24. 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 2023-24 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: http://leginfo.legislature.ca.gov/faces/codes.xhtml .
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, 2023.
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.
JOE SPEPHENSHAW
Director
By:
Erika Li
Chief Deputy Director
Attachment
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May 2023
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 2023-24 appropriation limit is:
Per Capita Personal Income
Fiscal Year Percentage change
(FY) over prior year
2023-24 4.44
B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2023-24 appropriation limit.
2023-24:
Per Capita Cost of Living Change = 4.44 percent
Population Change = -0.35 percent
Per Capita Cost of Living converted to a ratio: 4.44 + 100 = 1.0444 100
Population converted to a ratio: -0.35 + 100 = 0.9965
100
Calculation of factor for FY 2023-24: 1.0444 x 0.9965 = 1.0407 - 8 -
Fiscal Year 2023-24
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2022 to January 1, 2023 and Total Population, January 1, 2023 Total
County Percent Change ---Population Minus Exclusions ---Population City 2022-2023 1-1-22 1-1-23 1-1-2023
Los Angeles
Agoura Hills -0.03 19,776 19,770 19,770
Alhambra -0.37 81,609 81,303 81,303
Arcadia -0.74 55,918 55,503 55,503
Artesia -0.82 16,139 16,007 16,093
Avalon -1.03 3,386 3,351 3,351
Azusa 0.06 49,453 49,483 49,483
Baldwin Park -0.63 70,815 70,368 70,368
Bell -0.72 33,612 33,370 33,370
Bellflower -0.92 77,638 76,924 76,924
Bell Gardens -0.84 38,774 38,447 38,447
Beverly Hills -0.90 31,945 31,658 31,658
Bradbury 0.34 886 889 889
Burbank -0.42 104,976 104,535 104,535
Calabasas -0.99 23,037 22,808 22,808
Carson -0.60 92,746 92,186 92,186
Cerritos -1.06 48,402 47,887 47,887
Claremont -0.74 37,034 36,759 36,759
Commerce -1.04 12,163 12,036 12,036
Compton -0.61 94,294 93,719 93,719
Covina -0.67 50,690 50,350 50,350
Cudahy -0.52 22,386 22,270 22,270
Culver City -0.73 39,972 39,682 39,682
Diamond Bar -1.03 53,935 53,381 53,381
Downey -0.73 112,078 111,261 111,261
Duarte 6.60 21,384 22,796 22,796
El Monte -0.84 107,279 106,377 106,377
El Segundo -0.67 17,042 16,928 16,928
Gardena -0.47 60,090 59,809 59,809
Glendale -0.82 192,870 191,284 191,284
Glendora -0.80 51,571 51,159 51,159
Hawaiian Gardens -0.94 13,675 13,546 13,546
Hawthorne -0.96 86,535 85,702 85,702
Hermosa Beach -0.98 19,206 19,018 19,018
Hidden Hills -0.80 1,745 1,731 1,731
Huntington Park -0.93 53,783 53,281 53,281
Industry -0.23 428 427 427
Inglewood -0.64 106,928 106,248 106,248
Irwindale -0.87 1,496 1,483 1,483
*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 2023-24
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2022 to January 1, 2023 and Total Population, January 1, 2023 Total
County Percent Change ---Population Minus Exclusions ---Population City 2022-2023 1-1-22 1-1-23 1-1-2023
La Canada Flintridge -0.65 20,060 19,930 19,930
La Habra Heights -1.06 5,564 5,505 5,505
Lakewood -0.92 80,900 80,154 80,154
La Mirada -1.00 48,384 47,899 47,899
Lancaster -0.54 170,660 169,742 173,376
La Puente -0.63 37,594 37,356 37,356
La Verne -0.89 32,344 32,056 32,056
Lawndale -0.93 31,171 30,882 30,882
Lomita -1.02 20,300 20,092 20,092
Long Beach -0.44 460,199 458,168 458,222
Los Angeles -0.97 3,800,240 3,763,328 3,766,109
Lynwood -0.55 66,595 66,228 66,228
Malibu -0.21 10,534 10,512 10,512
Manhattan Beach -1.24 34,713 34,284 34,284
Maywood -0.94 24,779 24,546 24,546
Monrovia -0.62 37,772 37,539 37,539
Montebello -0.26 61,804 61,645 61,645
Monterey Park -0.90 59,824 59,288 59,288
Norwalk -0.71 101,116 100,399 101,153
Palmdale -0.66 167,015 165,917 165,917
Palos Verdes Estates -0.90 13,052 12,935 12,935
Paramount -0.72 52,557 52,178 52,178
Pasadena -0.60 137,814 136,988 136,988
Pico Rivera -0.77 61,446 60,975 60,975
Pomona -0.12 149,908 149,721 149,721
Rancho Palos Verdes -1.02 41,434 41,013 41,030
Redondo Beach -0.97 69,078 68,407 68,407
Rolling Hills -1.13 1,688 1,669 1,669
Rolling Hills Estates -0.40 8,480 8,446 8,446
Rosemead -0.17 50,109 50,022 50,022
San Dimas -0.95 34,407 34,079 34,079
San Fernando -0.20 23,533 23,487 23,487
San Gabriel -0.58 38,690 38,466 38,466
San Marino -0.62 12,282 12,206 12,206
Santa Clarita 0.71 229,039 230,659 230,659
Santa Fe Springs -0.88 18,689 18,525 18,570
Santa Monica -0.02 91,739 91,720 91,720
Sierra Madre -0.81 10,909 10,821 10,821
Signal Hill -0.84 11,528 11,431 11,431
South El Monte -0.85 19,627 19,461 19,461
*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 2023-24
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2022 to January 1, 2023 and Total Population, January 1, 2023 County
City
Percent Change
2022-2023
---Population Minus Exclusions ---
1-1-22 1-1-23
Total
Population
1-1-2023
South Gate
South Pasadena
Temple City
Torrance
Vernon
-0.78
-0.59
-0.55
-0.88
-0.97
93,355
26,428
36,010
144,327
207
92,628
26,273
35,813
143,057
205
92,628
26,273
35,813
143,057
205
Walnut
West Covina
West Hollywood
Westlake Village
Whittier
Unincorporated
-0.61
0.23 -0.39
-1.12
-0.47
-0.95
27,721
107,642
34,930
8,009
87,707
1,006,954
27,553
107,893
34,793
7,919
87,291
997,407
27,553
107,893
34,793
7,919
87,291
997,999
County Total -0.75 9,826,563 9,753,247 9,761,210
*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
2021/22 TO 2022/23 TAX YEARS - IN PARCEL NUMBER ORDER
Current Year
Improvements
Prior Year
ImprovementsUse CategoryParcel Owner
Percent
Change
7107-015-018 Commercial 78,457 216,240Rodriguez Homero G Cotrustee Rodriguez Trust + 175.6% 7109-008-003 Industrial 170,665 185,501De Vries David Trust Virgil D De Vries Deceased Trust + 8.7% 7109-010-011 Commercial 265,516 459,000Patino Rafael + 72.9% 7110-013-019 Commercial 353,367 401,920Phoropter Property Llc + 13.7% 7161-007-053 Commercial 103,056 250,000J Chase Foundation Business Trust + 142.6% 7161-008-022 Commercial 325,865 402,951All That You Cant Leave Behind Lp + 23.7% 7161-010-015 Commercial 56,042 122,400Johnston Gary Trust Wilson Family Trust + 118.4% 7 Parcels Listed 1,352,968 2,038,012 + 50.6%
This calculation reflects the 2022/23 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 2022/23 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.
685,044
-27,059
657,985
386,495,379
0.17%
Total Change in Non-Residential Valuation Due to New Development Less Automatic 2.000% Assessors's Inflation Adjustment
Actual Change in Non-Residential Valuation
Change in Total Assessed Value
= Alternate 2023/24 Appropriations Limit Factor
Includes taxable primary parcels with known nonresidential use codes, no prior lien year transfers, and improvement value increases greater than 2.0% 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 12/6/2022 By DS Data Source: Los Angeles County Assessor 2022/23 Secured Tax Rolls