DATE:
October 17, 2023
TO:
Paul Buddenhagen, City Manager
FROM:
Lawrence Chiu, Finance Director
SUBJECT:
Resolution Of The City Council Of The City Of Emeryville Rescinding Resolution No. 23-70 And Adopting A Revised Appropriations Limit For Fiscal Year 2024 Of $146,833,723
RECOMMENDATION
Staff recommends that the City Council adopt the above-entitled resolution rescinding Resolution No. 23-70 and adopting a revised Appropriations Limit for Fiscal Year (FY) 2024 of $146,833,723.
BACKGROUND
In 1979, Proposition 4, known as the Gann Initiative, was approved by the California voters. As a result, Article XIII (B) of the California Constitution (Government Code Section 7900-10) places a limit on appropriations from most government revenue sources, including tax proceeds, and requires that the governing body of a local jurisdiction annually establish, by resolution, an appropriations (spending) limit for the following fiscal year. The determination of an appropriations limit is a legislative act and adopted at a regularly scheduled City Council meeting.
Proposition 111, approved by California voters in 1990, further amended Article XIII (B) and updated the base year for calculating the appropriation limit to fiscal year 1986-87 beginning in fiscal year 1990-91.
Proposition 111 also revised that the annual adjustment factors used to calculate an Appropriations Limit to include:
A change in population growth for City or County (whichever is higher); and A change in California Per Capita Personal Income.
DISCUSSION
Establishing an appropriations limit is a state law requirement that all cities must adopt at the beginning of each fiscal year at a regularly scheduled City Council meeting.
As part of the year-end audit, the City of Emeryville’s contracted auditors reviewed the FY 2023 GANN Limit and noticed that there was an error in the calculation. Instead of using the beginning balance from FY 2022, the auditor noted that the FY 2021 beginning balance was incorrectly used in the calculation, resulting in an understatement of the FYs 2023 and 2024 GANN Limit of $6.7 million and $5.5 million respectively.
Based on the audit findings, staff worked with the auditors to perform additional reviews of the GANN limit between FYs 2019 and 2022. The auditors confirmed that the calculations between FYs 2019 and 2022 were correct.
ADVISORY BODY REVIEW
There has been no communication with the budget committees.
CONCLUSION
Staff recommends that the City Council adopt the above-entitled resolution rescinding Resolution No. 23-70 and adopting a revised Appropriations Limit for FY 2024 of $146,833,723.
PREPARED BY: Lawrence Chiu, Finance Director
APPROVED AND FORWARDED TO THE
CITY COUNCIL OF THE CITY OF EMERYVILLE:
Paul Buddenhagen, City Manager
ATTACHMENTS:
Draft Resolution
Attachment A – Fiscal Year 2024 GANN Appropriations Limit Fiscal Year 2024 GANN Limit
MACROBUTTON DISPLAY City Council Meeting | October 17, 2023 Page PAGE 2 of NUMPAGES 22
City of Emeryville
CALIFORNIA
MEMORANDUM