Fremont City Council Meeting: 06/14/22 07:00 PM
3300 Capitol Avenue Div/Dept: Finance Department
Fremont, CA 94538 Category: Budget
SCHEDULED
Sponsors:
STAFF REPORT (ID # 4626) DOC ID: 4626
Updated: 6/15/2022 10:59 AM by Alberto Quintanilla Page 1 SECOND PUBLIC HEARING AND ADOPTION OF FY 2022/23 OPERATING BUDGET AND APPROPRIATIONS LIMIT - Second Public Hearing (Published Notice) and Adoption of the FY 2022/23 Operating Budget and Appropriations Limit
Contact Persons:
Name: David Persselin
Title: Finance Director
Div/Dept: Finance Department
Phone: 510-494-4631
E-Mail: [email protected]
Executive Summary: Staff recommends that the City Council hold the second public hearing on the FY 2022/23 Proposed Operating Budget, and adopt resolutions approving the budget and the constitutional appropriations limit.
BACKGROUND: Staff presented the FY 2022/23 Proposed Operating Budget to the City Council during a televised City Council meeting on May 17, 2022 and the City Council held the first public hearing on the proposed budget on June 7, 2022. The budget identifies total appropriations, including all funds, for FY 2022/23 in the amount of $400.3 million. The General Fund portion of the total is $249.3 million. Following tonight’s second public hearing, the Council may adopt the budget.
Article XIIIB of the California State Constitution imposes a limit on annual appropriations funded from taxes and certain regulatory fees, user fees, and investment earnings. The appropriations limit is often referred to as the “Gann limit.” The appropriations limit is adjusted from year to year using adjustment factors that must be adopted annually by the City Council.
DISCUSSION/ANALYSIS: Staff has calculated the FY 2022/23 appropriations limit in accordance with Article XIIIB of the California State Constitution. The appropriations limit is adjusted annually to reflect both the percentage change in population and the percentage change in cost of living.
The percentage change in population for each city is provided by the State Department of Finance, which also provides the percentage change in California per capita personal income. As an alternative to the percentage change in personal income as a cost of living factor, local agencies may choose to use the percentage change in the local assessment roll from the preceding year due to the addition of local nonresidential new construction. The Alameda County Assessor’s Office annually provides information on the value of nonresidential new construction by city.
As the California per capita change in personal income is 7.55%, while the percentage change in the City’s assessment roll due to the value of nonresidential new construction is
0.18%, staff recommends that the City Council adopt the percentage change in per capita Staff Report (ID # 4626) Meeting of June 14, 2022
Updated: 6/15/2022 10:59 AM by Alberto Quintanilla Page 2 personal income as the cost of living factor to be used in calculating the FY 2022/23 appropriations limit.
Using the percentage change in City population of 0.26% and the percentage change in California per capital personal income of 7.55%, the appropriations limit for FY 2022/23 is calculated to be $877.5 million. Based on the proposed General Fund operating budget of $249.3 million, the City is not at risk of exceeding the appropriations limit. The Appropriations Limit Resolution attachment describes in more detail the methodology for calculating the appropriations limit.
FISCAL IMPACT: Total General Fund budgeted resources in the coming fiscal year of $244.6 million and unreserved fund balance (fiscal recovery funds) will be adequate to support total budgeted expenditures of $249.3 million, and the $877.5 million appropriations limit far exceeds the proposed appropriations.
ENVIRONMENTAL REVIEW: None required.
LINK: The FY 2022/23 Proposed Operating Budget is posted on the City’s website at:
https://www.fremont.gov/home/showdocument?id=9158&t=637886311344670000
ATTACHMENTS:
• Draft Resolution Approving and Adopting City's Operating Budget FY 22-23 • Draft Resolution Appropriations Limit
RECOMMENDATIONS:
1. Hold a public hearing on the proposed operating budget for FY 2022/23.
2. Adopt a resolution approving the City of Fremont FY 2022/23 Operating Budget.
3. Adopt a resolution creating an appropriations limit of $877,488,604 for FY 2022/23.