TO: AC Transit Board of Directors
FROM: Michael A. Hursh, General Manager
SUBJECT: FY 2019-20 Appropriations Limit Correction Adoption
ACTION ITEM
RECOMMENDED ACTION(S):
Title
Consider the adoption of Resolution No. 20-056 establishing the corrected Appropriations Limit for Fiscal Year 2019-20 at $528,714,488 and repeal Resolution No. 19-024.
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
Establishing the District’s appropriations limits is necessary for compliance with state law.
BUDGETARY/FISCAL IMPACT:
There are no budgetary fiscal impacts associated with this report. The corrected amount in the resolution is reduced by less than 0.1% from the prior and incorrect amount.
BACKGROUND/RATIONALE:
On October 14th, the Board of Directors adopted Resolution No. 20-049 giving notice of the scheduled adoption of a corrected Appropriations Limit for FY 2019-20. The notice and supporting documentation must be available to the public at least 15 days prior to the adoption of an Appropriations Limit and were posted on the District’s website and in the General Office lobby on October 16th. The documents are on file with the District Secretary’s Office.
Article XIIIB of the California Constitution places limitations on the annual appropriations of the State and each local government. In 1979, California voters approved Proposition 4 (Article XIIIB of the California State Constitution). Informally known as the "Gann Initiative", Article XIIIB provides limits to the amount of tax proceeds state and local governments can spend each year. The base year was set at FY 1978-79. In 1980, the State Legislature added Section 9710 of the Government Code stating that the governing body of each local jurisdiction must establish, by resolution, an appropriations limit for the following year.
The limit for any fiscal year is equal to the previous year's limit, adjusted for population changes and a cost of living factor. The California Department of Finance publishes each May the statistical information needed to calculate the appropriations limit. This includes (a) the California per Capita Personal Income Index which provides the cost-of-living factor and (b) the change in population from the previous year by county and cities and unincorporated areas within each county which provides the population factor. The special districts that are required by law to calculate their appropriations limit must present the calculation as part of their annual audit.
The District is adopting a corrected appropriations limit due to a small error in the original limit calculation. The corrected appropriation limit is $528,714,488, which is reduced by $682,212, a less than 0.1% change from the prior and incorrect amount. It does not have any practical effect on the District.
ADVANTAGES/DISADVANTAGES:
There is no disadvantage to the establishment of an appropriations limit. State law requires it.
ALTERNATIVES ANALYSIS:
There are no alternatives to the establishment of an appropriations limit. State law requires it.
PRIOR RELEVANT BOARD ACTION/POLICIES:
SR 19-194b Appropriation Limit Correction Notice
ATTACHMENTS:
1. Resolution 20-056 (with Exhibits)
Prepared by:
Mary Archer, Finance Project Manager
Approved/Reviewed by:
Claudia L. Allen, Chief Financial Officer
Chris Andrichak, Acting Deputy Chief Financial Officer
Jill A. Sprague, General Counsel
Linda A. Nemeroff, District Secretary