14-K
TO: Honorable Mayor and Members of the City Council
ATTENTION: Ryan Smoot, City Manager
FROM: Tae Rhee, Director of Finance/Treasurer
SUBJECT: Consideration and possible action to adopt Resolution No. 24-32 – A Resolution adopting the annual appropriations limit for fiscal year 2024-2025.
DATE: June 10, 2024
EXECUTIVE SUMMARY
In accordance with Article XIIIB of the California Constitution, the appropriations limit (also referred to as the "Gann limit") for fiscal year 2024-2025 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. 24-32; 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.
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BELL F O 1“ X
t r o taftep s
Staff Report – Appropriations Limit for Fiscal Year 2024-2025 June 10, 2024
BACKGROUND – Continued
INFLATION FACTOR (selected higher of the following):
Change in the California
per capita personal income
3.62%
State
Department of
Finance
Selected for
calculation
Growth in the
nonresidential assessed
valuation due to new
construction within the City
1.30%
HdL Coren &
Cone
POPULATION FACTOR (selected higher of the following):
City of Bellflower
0.09%
(population as of
1/1/24 of 76,990 vs.
1/1/23 of 76,924)
State
Department of
Finance
Los Angeles County
0.64%
(population as of
1/1/24 of 9,815,428
vs. 1/1/23 of
9,753,247)
State
Department of
Finance
Selected for
calculation
The appropriations limit for fiscal year 2024-2025 is $102,412,579, an increase of $4,206,338 from the preceding fiscal year (Exhibit A). This new limit has been calculated by adjusting the fiscal year 2023-2024 appropriations limit for the changes in the California per capita personal income and the Los Angeles County’s population. Based on the Operating Budget, the appropriations that are subject to this limit total $38,536,207 (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. 24-32....................................................................................................... 3 Exhibit A, Annual Appropriations Limit Calculation .......................................................... 5 Exhibit B, Appropriations Subject to the Annual Limit...................................................... 6 State Department of Finance Letter, Dated April 2024 .................................................... 7 HdL’s Nonresidential New Construction Factor ............................................................. 12
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CITY OF BELLFLOWER
RESOLUTION NO. 24-32
A RESOLUTION ADOPTING THE ANNUAL APPROPRIATIONS
LIMIT FOR FISCAL YEAR 2024-2025
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 County of Los Angeles 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 2024-2025.
SECTION 2. The appropriations limit for fiscal year 2024-2025 for the City of Bellflower is established at $102,412,579.
SECTION 3. The appropriations subject to the annual limit as contained in the Operating Budget for fiscal year 2024-2025 are $38,536,207.
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. 24-32
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 10TH DAY OF JUNE 2024.
________________________________
Dan Koops, 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. 24-32)
CITY OF BELLFLOWER
ANNUAL APPROPRIATIONS LIMIT CALCULATION
FOR FISCAL YEAR 2024-2025
Appropriations limit for fiscal year 2023-2024:98,206,241$ Adjustment factors for fiscal year 2024-2025:
Inflation Population
Factor Factor Combined
(Note 1) (Note 2) Factor
1.0362 1.0064 1.04283168 x 0.04283168
Adjustment for inflation and population 4,206,338
Appropriations limit for fiscal year 2024-2025: 102,412,579$ 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 County of Los Angeles.
Appropriations (Gann) Limit FY 2024-25 - Exhibits A & B.xlsx - 5 -
EXHIBIT B
(Resolution No. 24-32)
CITY OF BELLFLOWER
APPROPRIATIONS SUBJECT TO THE ANNUAL LIMIT
FOR FISCAL YEAR 2024-2025
A. PROCEEDS OF TAXES
Property tax 4,624,000$
Property tax in lieu of vehicle license fees 10,775,000 Utility users tax 3,700,000
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 866,000
Motor vehicle license fees 70,000
TOTAL PROCEEDS OF TAXES 40,475,000$
B. EXCLUSIONS:
Qualified Capital Outlay (2,798,689)
Annual Debt Service (230,501)
TOTAL EXCLUSIONS (3,029,190)
C. NET INVESTED PROCEEDS OF TAXES 37,445,810
D. INTEREST ALLOCATION 1,090,397
E. APPROPRIATIONS SUBJECT TO THE LIMIT 38,536,207$
F. APPROPRIATIONS LIMIT FOR 2024-2025 (Exhibit A) 102,412,579$ G. DIFFERENCE (ITEM F MINUS ITEM E) 63,876,372$
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).
Appropriations (Gann) Limit FY 2024-25 - Exhibits A & B.xlsx - 6 -
April 30, 2024
Dear Fiscal Officer:
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, 2024, in conjunction with a change in the cost of living, or price factor, to calculate their appropriations limit for fiscal year 2024-25. Attachment A provides the change in California’s per capita personal income and an example for utilizing the factors to calculate the 2024-25 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. 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, 2024. 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.
/s Richard Gillihan
RICHARD GILLIHAN
Chief Operating Officer
Attachment
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Iv:
o P DEPARTMENT OF Gavin Newsom - Governor
“L'Fn‘l‘” FINANCE 1021 O Street, Suite 3110 - Sacramento CA 95814 I www.dof.ca.gov
OFFICE OF THE DIRECTOR
May 2024
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 2024-25 appropriation limit is:
Per Capita Personal Income
Fiscal Year Percentage change
(FY) over prior year
2024-25 3.62
B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2024-25 appropriation limit.
2024-25:
Per Capita Cost of Living Change = 3.62 percent
Population Change = 0.17 percent
Per Capita Cost of Living converted to a ratio: 3.62 + 100 = 1.0362 100
Population converted to a ratio: 0.17 + 100 = 1.0017 100
Calculation of factor for FY 2024-25: 1.0362 x 1.0017 = 1.0379
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Fiscal Year 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 Total
County Percent Change ---Population Minus Exclusions ---Population City 23-24 1-1-23 1-1-24 1-1-24
Los Angeles
Agoura Hills -0.44 19,928 19,841 19,841
Alhambra 0.05 81,753 81,790 81,811
Arcadia -0.13 55,855 55,783 55,783
Artesia -0.21 16,053 16,019 16,019
Avalon -0.57 3,332 3,313 3,313
Azusa -0.35 49,595 49,420 49,420
Baldwin Park -0.06 70,700 70,660 70,660
Bell -0.34 33,414 33,301 33,301
Bellflower -0.03 77,014 76,990 76,990
Bell Gardens -0.49 38,569 38,381 38,381
Beverly Hills -0.45 31,950 31,806 31,806
Bradbury -0.77 905 898 898
Burbank 0.11 105,484 105,603 105,603
Calabasas -0.50 22,857 22,742 22,742
Carson -0.52 92,399 91,920 91,924
Cerritos -0.53 48,063 47,806 47,806
Claremont 0.03 37,673 37,686 37,686
Commerce 0.57 12,055 12,124 12,124
Compton -0.37 94,016 93,671 93,671
Covina 0.19 50,390 50,485 50,485
Cudahy -0.52 22,327 22,210 22,210
Culver City 0.89 39,859 40,213 40,213
Diamond Bar -0.43 53,566 53,335 53,335
Downey -0.15 111,656 111,493 111,493
Duarte 3.04 22,958 23,656 23,656
El Monte 0.08 106,649 106,738 106,786
El Segundo -0.08 16,953 16,939 16,964
Gardena 0.22 59,896 60,028 60,028
Glendale -0.25 192,072 191,586 191,586
Glendora -0.32 51,374 51,209 51,209
Hawaiian Gardens -0.29 13,600 13,560 13,560
Hawthorne -0.37 85,886 85,566 85,566
Hermosa Beach -0.42 19,169 19,088 19,088
Hidden Hills 0.17 1,724 1,727 1,727
Huntington Park -0.31 53,374 53,209 53,219
Industry -0.23 427 426 426
Inglewood -0.53 106,628 106,065 106,065
Irwindale 0.74 1,488 1,499 1,499
*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 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 Total
County Percent Change ---Population Minus Exclusions ---Population City 23-24 1-1-23 1-1-24 1-1-24
La Canada Flintridge -0.20 20,089 20,048 20,048
La Habra Heights -0.45 5,513 5,488 5,488
Lakewood -0.25 80,365 80,162 80,162
La Mirada -0.40 48,271 48,077 48,077
Lancaster -0.10 169,939 169,776 172,631
La Puente -0.19 37,530 37,459 37,459
La Verne 0.06 31,678 31,697 31,697
Lawndale -0.55 31,026 30,855 30,855
Lomita -0.38 20,397 20,320 20,320
Long Beach -0.18 459,315 458,498 458,813
Los Angeles 0.27 3,800,438 3,810,548 3,814,318
Lynwood -0.23 66,424 66,271 66,271
Malibu -0.18 10,640 10,621 10,621
Manhattan Beach -0.50 34,367 34,195 34,195
Maywood -0.49 24,572 24,451 24,451
Monrovia 1.39 37,563 38,087 38,087
Montebello 0.32 61,730 61,930 61,930
Monterey Park -0.42 59,592 59,340 59,347
Norwalk -0.39 100,732 100,341 101,172
Palmdale -0.02 166,089 166,055 166,055
Palos Verdes Estates -0.44 13,031 12,974 12,974
Paramount -0.34 52,331 52,153 52,153
Pasadena 1.09 138,187 139,692 139,692
Pico Rivera -0.32 61,014 60,820 60,820
Pomona 0.68 151,132 152,166 152,166
Rancho Palos Verdes -0.50 41,106 40,902 40,919
Redondo Beach -0.27 68,424 68,239 68,239
Rolling Hills -0.53 1,686 1,677 1,677
Rolling Hills Estates 0.46 8,495 8,534 8,534
Rosemead 0.08 50,503 50,541 50,541
San Dimas -0.31 34,027 33,920 33,920
San Fernando 0.04 23,633 23,643 23,643
San Gabriel -0.09 38,648 38,613 38,613
San Marino 0.23 12,350 12,379 12,379
Santa Clarita -0.27 231,045 230,428 230,428
Santa Fe Springs -0.34 18,574 18,511 18,640
Santa Monica 0.34 92,598 92,912 92,912
Sierra Madre -0.15 10,925 10,909 10,909
Signal Hill -0.35 11,488 11,448 11,448
South El Monte -0.21 19,482 19,441 19,441
*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 2024-25
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2023 to January 1, 2024 and Total Population, January 1, 2024 County
City
Percent Change
23-24
---Population Minus Exclusions ---
1-1-23 1-1-24
Total
Population
1-1-24
South Gate
South Pasadena
Temple City
Torrance
Vernon
0.03 -0.37
-0.18
-0.36
-0.49
92,701
26,367
36,040
143,433
206
92,729
26,270
35,975
142,910
205
92,729
26,270
35,975
142,910
205
Walnut
West Covina
West Hollywood
Westlake Village
Whittier
Unincorporated
-0.10
0.65 -0.44
-0.45
0.22 -0.19
27,896
108,404
35,229
7,938
87,333
998,818
27,867
109,105
35,075
7,902
87,527
996,956
27,867
109,105
35,075
7,902
87,527
997,587
County Total 0.05 9,810,925 9,815,428 9,824,091
*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
2022/23 TO 2023/24 TAX YEARS - IN PARCEL NUMBER ORDER
Current Year
Improvements
Prior Year
ImprovementsUse CategoryParcel Owner
Percent
Change
6278-007-027 Industrial 1,207,209 2,550,184Boral Marc + 111.2% 6278-008-002 Industrial 641,500 1,291,164Boral Marc + 101.3% 7106-008-014 Commercial 102,971 251,231Brassard Philippe G Et Al + 144.0% 7106-008-027 Commercial 3,545 5,255Brassard Philippe G Et Al + 48.2% 7110-020-027 Institutional 426,886 515,423Pioneer Christian Schools Of Southern California + 20.7% 7161-005-008 Commercial 2,383 10,000Cmac Transport Llc + 319.6% 7161-006-020 Industrial 1,026,062 1,538,533Cleveland Properties Lp + 49.9% 7162-005-024 Commercial 792,768 2,088,690Spirit Master Funding Viii Llc + 163.5% 7163-003-032 Institutional 1,931,183 2,657,625Valley Christian School System + 37.6% 9 Parcels Listed 6,134,507 10,908,105 + 77.8%
This calculation reflects the 2023/24 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 2023/24 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.
4,773,598
-122,690
4,650,908
358,752,529
1.30%
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 2024/25 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 3/6/2024 By MV Data Source: Los Angeles County Assessor 2023/24 Secured Tax Rolls
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I-Idl‘?
Coren & Cone