Resolution No. 2020-014RESOLUTION NO. 2020-14
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON
ADOPTING THE APPROPRIATION LIMIT FOR FISCAL YEAR 2020-2021,
PURSUANT TO GOVERNMENT CODE SECTION 7910
SECTION 1. Recitals.
A. Government Code Section 7910 (GANN initiative) requires the governing body of
each local jurisdiction to establish, by resolution, an appropriation limit for each fiscal year.
B. On November 6, 1979, California voters approved the Gann Limit, requiring each
government juristjiction to establish its annual appropriate limit for the coming year.
C. On June 5, 1990, the voters of the State of California passed Proposition 111,
which allows the City to use either growth in California per capita income or growth in
non-residential assessed valuation due to new construction within the City as the annual
inflation factor; and eitherthe growth in City or County population forthe population factor.
D. The City calculated its appropriation limit based on the non-residential assessed
valuation due to new construction as its annual inflation factor and the County's
population growth as its annual population growth factors for Fiscal Year 2017-2018,
2018-2019, 2019-2020, and 2020-2021.
E. The documentation used in the determination of the appropriation limit has been
made available for inspection by the public fifteen (15) days prior to the hearing.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
VERNON AS FOLLOWS:
SECTION 2. The City Council of the City of Vernon hereby finds and determines
that the above recitals are true and correct.
SECTION 3. The City Council hereby establishes $1,562,357,724 as the amount
of the appropriation limit for fiscal year 2020-2021, in accordance with the provisions of
Government Code Section 7910.
The computation for fiscal year 2020-2021 is as follows:
2020-2021 APPROPRIATION LIMIT CALCULATION
2019-2020 Appropriation Limit $1,217,370,695
Increase in Nonresidential Construction 28.48%
Los Angeles County population change -0.11%
1.2848 x 0.9989=
$1,562,357,724
Resolution No. 2020-14
Page 2 of 2
SECTION 4. The City Council approved the Fiscal Year 2020-2021 Budget by
adoption of a resolution, which did not exceed the appropriation limit for Fiscal Year 2020-
2021.
SECTION 5. The City Clerk shall certify the passage and adoption of this
resolution and enter it into the book of original resolutions.
APPROVED AND ADOPTED this 2nd day of June, 2020.
LETICIA LOPEZ, Mayor
ATTEST:
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LISA POPE, City ClArk
(seal)
APPROVED AS TO FORM::
ARNOLD ALVARE-GLASMg ,
Interim City Attorney
I CERTIFY THAT THE FOREGOING RESOLUTION NO. 2020-14 was passed and
adopted by the City Council of the City of Vernon at the regular meeting on June 2, 2020
by the following vote:
AYES: 5 Council Members: Davis, Gonzales, Menke, Ybarra, Lopez
NOES: 0
ABSENT: 0
ABSTAIN: 0
LISA POPE, City Clerfc
(seal)
STAFF REPORT
City Council Agenda Item Report
Agenda Item No. COV-193-2020
Submitted by: Scott Williams
Submitting Department: City Administration
Meeting Date: June 2, 2020
SUBJECT
Citywide Budget and Appropriations Limit (GANN) for Fiscal Year 20202021
Recommendation:
A) Adopt Resolution No. 2020-13 approving the Citywide budget for Fiscal Year 2020-2021; and
B) Adopt Resolution No. 2020-14 establishing the Citys Appropriation Limit for the Fiscal Year
2020-2021.
Background:
At the City Council meetings of April 7, April 21, and May 5, 2020, staff presented the proposed Fiscal
Year (FY) 2020-2021 Citywide Budget, including a budget overview encapsulatirg the Citys overall
financial position, identifying challenges (e.g. the Citys structural deficit), and articulating relevant
strategies to address budgetary issues facing Vernon in the short and long tens. The presentations
included information on the Citys fiscal policy, budget process, historical budget comparisons (Citywide
and fund specific), and adjustments made in light of the economic effects of the COVID-19 pandemic.
During the Apri17, 2020 Council meeting, departments were initially advised to maintain expenditures at
the previous fiscal year's levels. General fund revenues were reduced to account for the decrease in
expected utility users tax, sales and use tax, business license tax, and building permit fees due to the
decrease in economic activity as a result of the current state of emergency.
On April 21, 2020, the Council received a presentation which included the addition of funds for the
Westside Development project; adjusting the parcel tax revenues for the CPI increase; and increasing
sales and use tax revenues to take into account the effects of the newly approved sales tax measure. At
the Council's request, during the May 5, 2020 budget presentation, the budget was revised to include
decreasing capital outlays in General Fund and Vernon Public Utilities, decreasing Vernon Public Utility
supplies and services, including the proceeds from the bond offering, and reducing expected utility
revenues.
As staff continues Citywide succession planning efforts and maintains its commitment to maximizing
organizational efficiencies, some positions have been unfunded due to departmental reorganization and
outsourcing. The City remains focused on delivering exceptional, professional, quality services to
businesses and residents and, therefore, will continually evolve by implementing adjustments to staffing
throughout the City to ensure service standards are met. An overall net decrease of approximately
$710,791 due to staffing modifications has been incorporated into the Salaries/Benefits Expenditures in
the FY20202021 Budget.
In order to maintain the heafih and safety of employees and visitors to City Hall, the City has budgeted for
additionaljanitorial services to continuously clean and sanitize the premises. The increase has been
incorporated into the budget for an additional $103,920 in Supplies/Services Expenditures. Adjustments
to the City Attorney Department's budget, including the contract for interim City Attorney services will
increase Supplies/Services Expenditures by $226,000. However, coupled with the reduction in costs
associated to personnel, City Attorneys departmental budget decreased by $484,791 overall. There
were two minor changes to General Fund Supplies/Services Expenditures to consolidate costs across
departments, which reduced the Supplies/Services Expenditure budget by $49,180.
The difference in the total monetary impact from the time of the Budget Workshop in May to present
equates to an overall decrease in City expenditures in the amount of approximately$385,370.
Resolution No. 2020-13 approves the Citywide FY2020-2021 Budget (Attachment 1).
California voters approved an initiative on November 6, 1979 that added Article XIIIB to the State
Constitution, which placed limits on the amount of revenue that can be appropriated by all entities of
government. This State Appropriation Limit is often referred to as the Gann Limit, after Paul Gann, the
author of the measure placing the limit in the State constitution. In accordance with that legislation, the
governing body of each govemmentjurisdiction must, by resolution, establish its annual Appropriation
Limit for the coming year at a regularly scheduled meeting or noticed special meeting (Attachment 2).
The original Article XIIIB (Proposition 4) and its implementing legislation, Chapter 1205/80, was modified
in June 1990 by Proposition 111 and SB 88 (Chapter 60/90). As a result of Proposition 111, the City is
required to choose between two annual inflation factors: (1) the growth in California per capita income;
or (2) the growth in non-residential assessed valuation due to new construction within the City, and two
population factors: (1) the growth in City, or (2) County population.
The City calculated its appropriation limit based on the non-residential assessed valuation due to new
construction as its annual inflation factor and the Countys population growth as its annual population
growth factors for Fiscal Year 2017-2018, 2018-2019, 2019-2020, and 2020-2021 (Attachment 3).
Over the last ten (10) years, and including 2020-2021, the Citys appropriations subject to the
Appropriation Limit have remained well below the Appropriation Limit. Given the size of this gap, it is
unlikely that the Citywill exceed the Appropriation Limit in the upcoming years without significant
changes to the Citys tax structure.
Notice of public hearing for consideration of the Fiscal Year 20202021 Proposed Citywide Budget and
Governmental Appropriation Limit (GANN) published in The Wave on May 18, 2020 (Attachment 4).
Fiscal Impact:
The Fiscal Year 2020-2021 Budget includes $319,963,521 in revenues and expenditures. The
2020-2021 Governmental Appropriation Limit is $1,562,357,724, which is well under the limitations
imposed pursuant to GANN.
Attachments:
1. Resolution No. 2020-13 Budget
2. Resolution No. 2020-14 GANN
3. GANN Calculation
4. Public Hearing Notice
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NOTICE OF CITY COUNCIL PUBLIC HEARING
The City Council of the City of Vernon will conduct a public hearing,which you may attend,at Vernon City Hall,City
Council Chamber, 4305 Santa Fe Avenue, Vernon, CA 90058, on Tuesday, June 2, 2020, at 9:00 a.m. (or as soon
thereafter as the matter can be heard),to:
Consider Adoption of Fiscal Year 2020/2021 Proposed City Wide Budget and Governmental Appropriation Limit
(Gann Limits)
All relevant documents will be available for public review on the City's website once the agenda for the meeting is posted
or from the City Clerk at CityClerk@ci.vemon.ca.us or 323-583-8811,ext.546.
Please send your comments or questions to:
Scott Williams,Finance Director
City of Vernon
4305 Santa Fe Avenue,Vernon,CA 90058
(323)583-8811 Ext. 849 Email:swilliams@ci.vernon.ca.us
PROPOSED CEQA FINDING:Staff will recommend that the Vernon City Council determine that the adoption of the
Fiscal Year 2020/2021 Proposed City Wide Budget and the adoption of the FY 2020/2021 Gann Governmental
Appropriation Limit will not have a significant effect on the environment and that each are exempt from the California
Environmental Quality Act(CEQA). Adoption of the budget and/or the appropriation limit is aligned with the creation
of a government funding mechanism or other government fiscal activity that does not involve any commitment to any
specific project which may result in a potentially significant physical impact on the environment and is therefore not a
"project"as defined under Section 15378(b)(4). Further,even if adoption of either were considered a"project,"it would
be exempt from CEQA review in accordance with Section 15061(bX3), the general rule that CEQA only applies to
projects that may have a significant effect on the environment.
If you challenge the adoption/approval of the Fiscal Year 2020/2021 Proposed City Wide Budget and/or the Gann
Governmental Appropriation Limit or any provision thereof in court,you may be limited to raising only those issues you
or someone else raised at the hearing described in this notice or in written correspondence delivered to the City of Vernon
at,or prior to,the meeting.
In compliance with the Americans with Disabilities Act (ADA), if you need special assistance to participate in the
meeting,please contact the Office of the City Clerk at(323)583-8811 ext.546.
The hearing may be continued, adjourned,or cancelled and rescheduled to a stated time and place without further
notice of a public hearing.
Dated:May 14,2020
Lisa Pope,City Clerk
Publish:May 18,2020