| | | | | | | |  | CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
Staff Report |
June 4, 2024
PUBLIC HEARINGS |
| | | | | | | | TO:
| Honorable Mayor and City Council Members
| SUBMITTED BY:
| Jane Hogan, Accountant
| APPROVED BY:
| Chip Rerig, City Administrator
| | SUBJECT: | Resolution 2024-046 Adopting the Fiscal Year 2024-2025 Appropriations Limit |
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| | | | | | | | | RECOMMENDATION: | Adopt Resolution 2024-046 approving the FY24-25 Appropriations Limit. |
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| | | | | | | | | BACKGROUND/SUMMARY: | The State Constitution (Article XII IB) places a limit on the amount of monies that a governmental entity is able to spend based upon projected tax revenues. This is based on a 1979 law passed by California voters which approved a Proposition put forward by the late political activist Paul Gann, which became known as the "Gann Limit". In accordance with State law, the government entity must adopt an annual appropriations limit. This limit is calculated using a prescribed methodology outlined by the State. The limit is adjusted by the change in the cost of living and the change in population, using the California Department of Finance figures.
In calculating the appropriations limit, the City Council has the option to use either the change in per capita income or the percentage change in the local assessment roll. In addition, the Council may either use the change in population within the City or within the County. For consistency purposes, staff recommends using the California per capita personal income of 3.62% and the population growth for the City of Carmel by the Sea of .55%. The Department of Finance uses a formula that converts the percent change in income and population growth into a ratio and thus the adjustment factors for calculating the Gann limit are 1.0362 for income and 1.0055 for population growth.
These adjustment factors are applied to the current fiscal year (Fiscal Year 2023-2024) Gann limit in order to determine the appropriation limit for the upcoming fiscal year (Fiscal Year 2024-2025). Using this formula, the City’s appropriation limit for Fiscal Year 2024-2025 is $42,449,301. The appropriations in the City budget which are subject to the Gann limit total only $27,108,447; thus, the City is well within its Gann limit. |
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| | | | | | | | | FISCAL IMPACT: | |
The appropriation limit for fiscal year 2024-2025 is based upon budgeted revenues for property tax, sales tax, transient occupancy tax, motor vehicle in lieu and business license tax. Together, these revenues are budgeted at $27,108,447. |
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| | | | | | | | | PRIOR CITY COUNCIL ACTION: | Council adopted the Fiscal Year 2023-2024 Appropriations Limit on June 6, 2023. |
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