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Report ID: 22-408a   
Type: Consent
Meeting Body: Board of Directors - Regular Meeting
Meeting Date: 8/10/2022 Final action: 8/10/2022
Recommended Action: Consider the adoption of Resolution No. 22-029 establishing the Appropriations Limit for Fiscal Year 2022-23 at $625,563,311.
Attachments: 1. STAFF REPORT, 2. Att 1 Resolution 22-029 Adoption, 3. Att 2 - Exh A & B Population and CIP Calc, 4. Master Minute Order

TO:                     AC Transit Board of Directors                                          

FROM:                                             Michael A. Hursh, General Manager

SUBJECT:                     FY 2022-23 Appropriations Limit                     

 

ACTION ITEM

AGENDA PLANNING REQUEST:   


RECOMMENDED ACTION(S):

 

Title

Consider the adoption of Resolution No. 22-029 establishing the Appropriations Limit for Fiscal Year 2022-23 at $625,563,311.

Body

 

STRATEGIC IMPORTANCE:

 

Goal - Financial Stability and Resiliency

Initiative - Financial Efficiency and Revenue Maximization

 

Establishing the District’s Appropriations Limit is necessary for compliance with state law.

 

BUDGETARY/FISCAL IMPACT:

 

There is no budgetary or fiscal impact from this report.

 

BACKGROUND/RATIONALE:

 

On July 13th, the Board of Directors adopted Resolution No. 22-028 giving notice of the scheduled adoption of an Appropriations Limit for FY 2022-23. The notice and supporting documentation associated with the proposed adoption of the Appropriations Limit was posted in the General Office Lobby, on the District’s website and was made available to the public for at least 15 days prior to adoption. 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 (See Attachment 2). 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 Appropriations Limit Calculation

For the District, the FY 2022-23 Appropriations Limit allowable growth factor was positively influenced by the 7.55 percent annual growth rate in the California Per Capita Personal Income Index and combined -0.41 percent annual growth rate in the Population Factor. Staff notes that the Population Factor is -0.62% for Alameda County and -0.41% for Contra Costa County. This means that Alameda County and Contra Costa lost population over calendar year 2021. The calculation uses the higher of the two factors. The calculation of the appropriations limit is included as Exhibit A and B to Resolution 22-029 (Attachment 2).

 

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 22-402 FY 2022-23 Appropriations Limit Notice

 

ATTACHMENTS:

 

1.                     Resolution 22-029

2.                     State Price Factor and Population Information (with Exhibits A and B)

 

Prepared by:

Richard Oslund, Director of Management and Budget

 

Approved/Reviewed by:

Jill A. Sprague, General Counsel

Chris Andrichak, Chief Financial Officer

Linda A. Nemeroff, District Secretary