TO: AC Transit Board of Directors
FROM: Michael A. Hursh, General Manager
SUBJECT: FY 2020-21 Appropriations Limit Adoption
ACTION ITEM
RECOMMENDED ACTION(S):
Title
Consider adoption of Resolution No. 20-037 establishing the Appropriations Limit for Fiscal Year 2020-21 at $551,175,027.
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
Adopting an appropriation limits is necessary for compliance with state law.
BUDGETARY/FISCAL IMPACT:
There are no budgetary or fiscal impacts associated with this report.
BACKGROUND/RATIONALE:
On June 24th, the Board of Directors adopted Resolution No. 20-033 giving notice of the scheduled adoption of an Appropriations Limit for FY 2020-21. The notice and supporting documentation must be available to the public at least 15 days prior to the adoption of an Appropriations Limit. The notice and supporting documentation were posted on the District’s website and in the General Office lobby on June 29th and are on file with the District Secretary’s Office for public inspection.
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.
For the District, the FY 2020-21 Appropriations Limit allowable growth factor was positively influenced by the 3.73% percent annual growth rate in the California Per Capita Personal Income Index and combined 0.37% percent annual growth rate in the Population Factor. The rates for both factors were the result of continued growth in the State and Bay Area economy. The calculation of the appropriations limit is included as Exhibit A to Attachment 1.
ADVANTAGES/DISADVANTAGES:
There is no disadvantage to the establishment of an appropriations limit. State law requires it.
ALTERNATIVES ANALYSIS:
There is no alternative to the establishment of an appropriations limit. State law requires it.
PRIOR RELEVANT BOARD ACTION/POLICIES:
20-249 - FY 2020-21 Appropriations Limit Notice
ATTACHMENTS:
1. Resolution 20-037 (with Exhibits)
Prepared by:
Chris Andrichak, Acting Deputy Chief Financial Officer
Approved/Reviewed by:
Claudia L. Allen, Chief Financial Officer
Jill A. Sprague, General Counsel
Linda A. Nemeroff, District Secretary