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Home My WebLink About55A - RESO APPROPRIATION LIMITSREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JUNE 18, 2019 TITLE: ADOPT A RESOLUTION ESTABLISHING THE APPROPRIATION LIMIT OF THE CITY OF SANTA ANA FOR FY 2019-20, AS REQUIRED BY STATE LAW (STRATEGIC PLAN NO. 4, 1D) CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 161 Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER CITY MANAGER RECOMMENDED ACTION Adopt a resolution establishing the appropriation limit for the fiscal year 2019-20, as required by State law. DISCUSSION The State of California Constitution includes various provisions, which impose a limit ("the GANN Limit") on tax proceeds that may be appropriated for expenditures by a local government in any given fiscal year and requires the cities establish this limit by resolution. Adoption of the subject resolution is necessary for compliance with these provisions for the fiscal year ending June 30, 2020. As detailed in the exhibits to the subject resolution, the City's spending limitation from "Proceeds of Taxes" is calculated to be $1,132,077,815 (Exhibit 1) for the fiscal year 2019-20. This represents the permitted growth rate factor of 1.0415 times the fiscal year 2018-19 appropriations limit of $1,086,968,617. The funds constrained by the appropriations limit include the General Fund, the Capital Outlay Fund, and Special Revenue Funds. Additionally, Exhibit 1 identifies the factors used to determine the allowable increase from the prior year; Exhibit 2 categorizes FY 2019-20 anticipated revenues from "Proceeds of Taxes" and "Non - Proceeds of Taxes'; and Exhibit 3 computes the fiscal year 2019-20 appropriations subject to this limitation and also identifies the difference between the limit and the budgeted appropriation. As demonstrated in Exhibit 3, the City's anticipated fiscal year 2019-20 appropriation subject to limitation is $245,301,295, which is $886,776,520 below the GANN Limit (allowable limit). 55A-1 Resolution Establishing the Appropriation Limit of The City of Santa Ana for FY 2019-20 June 18, 2019 Page 2 STRATEGIC PLAN ALIGNMENT Approval of this item allows the City to meet Goal # 4 City Financial Stability, Objective # 1 (maintain a stable, efficient and transparent financial environment), Strategy D (develop a fiscal health analysis tool that informs a department of its financial position in order to assist in its decision making process). FISCAL IMPACT There is no fiscal impact associated with this action. Kathryn Dow Executive Director Finance and Management Services Agency Exhibits: 1. Computation of Appropriation Limit 2. Schedule to Categorize Anticipated Revenues 3. Appropriation Subject to Limitation 4. Resolution 55A-2 COMPUTATION OF APPROPRIATION LIMIT FOR FISCAL YEAR ENDING JUNE 30, 2020 Fiscal Year 2018-19 Appropriations Limit California Per Capita Personal Income: Converted into a Factor Population Growth: Converted into a Factor: Calculation of factor for fiscal year 2019-20 (1.0385 x 1.0029): Fiscal Year 2019-20 Appropriations Limit EXHIBIT 1 1,086,968,617 3.850% * 1.0385 0.29% * 1.0029 1.0415 1,132, 077,815 * Source: State of California, Department of Finance, Price and Population Information - FY 2019-20 55A-3 55A-4 EXHIBIT 2 EXHIBIT 2 SCHEDULE TO CATEGORIZE ANTICIPATED REVENUES FOR FISCAL YEAR ENDING JUNE 30, 2020 REVENUE TAXES: Property Tax Sales Tax Hotel Visitors' Tax Business Tax Documentary Stamp Tax Utility Users' Tax Medical Marijuana/Cannabis Tax Total Taxes FROM STATE: State Motor Vehicle License Homeowner Prop Tax Subvention State Gas Tax SB90 Reimbursements State Grants Total State OTHER GOVERNMENT: Community Development (CDBG) Urban Area Security Initiative Grant Social Services Agency Grant Housing (Section 8) Workforce Investment Act Measure M, Street Grants Civic Center and Park Program Income Other Federal Grants Total Other Government PROCEEDS NON -PROCEEDS OF TAXES OF TAXES TOTALS 81,107,300 $ - $ 81,107,300 113,878,800 - 113,878,800 9,500,000 - 9,500,000 13,000,000 - 13,000,000 884,000 - 884,000 22,500,000 - 22,500,000 10,830,000 - 10,830,000 251,700,100 - 251,700,100 160,000 - 160,000 201,000 - 201,000 - 14,421,080 14,421,080 88,000 88,000 - 1,397,360 1,397,360 361,000 15,906,440 16,267,440 - 6,194,750 6,194,750 - 1,819,030 1,819,030 - 800,000 800,000 - 44,229,570 44,229,570 - 2,493,170 2,493,170 - 19,484,780 19,484,780 - 7,503,000 7,503,000 - 512,500 512,500 - 1,815,340 1,815,340 - 84,862,140 84,852,140 55A-5 Exhibit 2 Continued REVENUE LOCALLY RAISED: Licenses and Permits Franchise Fees Fines and Forfeitures Charges for Services From Use of Property Others Others - Inter -Agency Total Locally Raised OTHER MISCELLANEOUS: Donation Attorney Reimbursements Expense Reimbursements Indirect Cost Recovery Refuse Program Savings Interfund Transfers Total Other Miscellaneous FROM USE OF MONEY: Earnings on Investment TOTAL REVENUES PROCEEDS NON -PROCEEDS OF TAXES OF TAXES TOTALS - 6,777,600 6,777,600 - 3,364,000 3,364,000 - 6,052,300 6,052,300 - 33,262,400 33,262,400 - 16,450,700 16,450,700 - 5,825,100 5,825,100 - 6,755,740 6,755,740 - 78,487,840 78,487,840 20,000 700,000 2,037,900 2.839,300 1,352,000 9,495,300 16,444,500 641,200 532,300 20,000 700,000 2,037,900 2,839,300 1,352,000 9,495,300 16,444,500 1,173,500 $ 252,702,300 $ 196,223,220 $ 448,925,520 y EXHIBIT 3 APPROPRIATION SUBJECT TO LIMITATION FOR FISCAL YEAR ENDING JUNE 30, 2020 Proceeds of taxes Less: Exclusions Appropriation subject to limitation Current year limit Over(under) limit EXHIBIT 3 $ 252,702,300 (7,401,005) $ 245,301,295 1,132,077,815 $ (886,776,520) 55A-7 y • EXHIBIT 4 ROH: 06/18/19 RESOLUTION NO. 2019- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ESTABLISHING THE APPROPRIATION LIMIT OF THE CITY OF SANTA ANA FOR FISCAL YEAR 2019-2020 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. Article XIIIB of the Constitution of the State of California, adopted by the voters of the State of California in 1979, imposes upon State and local government the obligation to limit each fiscal year's appropriations to those established in fiscal year 1978-79 as adjusted for by inflation and population, together with other specified changes required or permitted. B. In June of 1990, the voters of the State of California approved Proposition 111, which amended Article XIIIB to establish the limit originally calculated for fiscal year 1986-87 as a new adjustment base, and to change the definition of the cost of living to be either the percentage change in California per capita personal income from the preceding year or the percentage change in the local assessment roll from the preceding year for the jurisdiction due to the addition of local non-residential new construction. C. Proposition 111 further modified Article XIIIB requirements by making certain capital outlay, debt service, emergency and court ordered expenditures not subject to the limit, and by allowing expenditures in excess of one year's limit to be offset by under expenditures in an immediately following year. D. The City of Santa Ana has opted to use as the inflation adjustment factor, the percentage change in the California per capita personal income from the preceding year. E. The City of Santa Ana has opted to use as the population adjustment factor, the County's percentage change in population from the preceding year. F. Section 7910 of the Government Code of the State of California requires the governing body of each local jurisdiction each year to, by resolution, establish its appropriations limit and make other necessary determinations for the following fiscal year pursuant to Article XIIIB of the California Resolution 2019- 55A-9 Page 1 of 3 Constitution at a regularly scheduled meeting or noticed special meeting. Fifteen days prior to the meeting, documentation used in the determination of the appropriations limit and other necessary determinations shall be available to the public. G. This matter came before the City Council at its regularly scheduled meeting of June 18, 2019. H. The Executive Director of the Finance and Management Services Agency of the City of Santa Ana has determined the City's appropriation limit for fiscal year 2019-2020 in accordance with said provisions of the Constitution and laws of the State of California, and the documentation used in the determination has been available to the public since not later than June 3, 2019, in the office of the Executive Director of the Finance and Management Services Agency. Section 2. Based upon the above referenced facts, and all facts specified in the accompanying Request for Council Action and its attachments, and each of them, the appropriation limit of the City of Santa Ana for fiscal year 2019-2020 is hereby found and determined to be $1,132,077,815. Section 3. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of 2019. APPROVED AS TO FORM: Sonia R. Carvalho City Attorney Ryan O. Ho e V Assistant City Attorney Miguel A. Pulido Mayor Resolution 2019- 55A-10 Page 2 of 3 AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, Norma Mitre -Ramirez, Acting Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2019- to be the original resolution adopted by the City Council of the City of Santa Ana on June 18, 2019. Date: Acting Clerk of the Council City of Santa Ana 55A-11 Resolution 2019- Page 3 of 3 55A-12