I. RECOMMENDATION:
Financial Services Director recommends Council adopt Resolution No. 3970 to establish the Gann Appropriation Limit for the Fiscal Year ending June 30, 2021, in the amount of $9,666,991.
II. BACKGROUND:
In 1979, the voters of the State of California approved Proposition 4, commonly known as the (Paul) Gann Initiative. This Proposition created Article XIII B of the State Constitution placing limits on the amount of Tax revenue that can be spent by governmental entities. Under the current guidelines, our Gann Appropriations Limit grows each year by a formula tied to cost of living factor and population growth provided by Department of Finance on an annual basis.
III. DISCUSSION:
For Fiscal Year 2020-2021, the state cost of living factor of 3.73% was used to compute the appropriation limit. The population growth in Fresno County was 0.81% while growth in City of Coalinga was 1.53% as provided by Department of Finance for May 1, 2020. The City has the option of which population factor to use in the Limit calculation. Generally, the larger population factor is used to provide the maximum Limit allowable.
Coalinga Tax revenues are $4,239,677 below the calculated Appropriation Limit meaning there is no impact to the City.
IV. ALTERNATIVES:
The Gann Appropriations Limit calculation is mandated by California Constitution. There is no alternative.
V. FISCAL IMPACT:
Based on the calculation, there is no fiscal impact to the City of Coalinga. |