HomeMy WebLinkAboutItem 26 - Appropriations Limit for Fiscal Year 2023-24 Finance and Management Services
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Item # 26
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
June 20, 2023
TOPIC: Appropriations Limit for Fiscal Year 2023-24
AGENDA TITLE
Adopt a Resolution Establishing the Appropriations Limit of the City of Santa Ana for
Fiscal Year (FY) 2023-24
RECOMMENDED ACTION
Adopt a resolution establishing the appropriations limit of the City of Santa Ana for FY
2023-24, as required by state law.
DISCUSSION
The State of California Constitution imposes a limit (“the GANN Limit”) on tax proceeds
to 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 the California constitution for the fiscal year ending June
30, 2024.
Furthermore, Section 13-90 of the Santa Ana Municipal Code requires the creation of a
Reserve Fund for Excess Proceeds of Taxes (Reserve Fund), as a separate accounting
of taxes received in a fiscal year prior to the period of expenditure. The City
appropriates the expenditure of tax revenue in the same fiscal year of receipt, and
therefore creation of the Reserve Fund is not necessary for the fiscal year 2023-24. In
fiscal year 2021-22, the Proceeds of Taxes were $318,009,638 and the actual General
Fund expenditures were $358,303,787.
Using the formula provided by the state, staff calculated the spending limitation from
“Proceeds of Taxes” as $1,373,855,642 (Exhibit 1) for fiscal year 2023-24, which is the
FY22-23 limit increased by 3.96%. The funds constrained by the appropriations limit
include the General Fund, the Capital Outlay Fund, and Special Revenue Funds.
Exhibit 1 identifies the factors used to determine the allowable inflationary increase from
the prior year. Exhibit 2 categorizes FY 2023-24 anticipated revenues from “Proceeds of
Taxes” and “Non-Proceeds of Taxes”. Exhibit 3 computes the FY 2023-24
appropriations subject to this limitation, and identifies the difference between the limit
and the budgeted appropriation. As demonstrated in Exhibit 3, the City’s anticipated
Appropriations Limit for Fiscal Year 2023-24
June 20, 2023
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fiscal year 2023-24 appropriations subject to limitation is $317,674,415, which is
$1,056,181,227 less than the allowable GANN Limit.
FISCAL IMPACT
There is no fiscal impact associated with this action.
EXHIBIT(S)
1. Computation of Appropriation Limit
2. Schedule to Categorize Anticipated Revenues
3. Appropriation Subject to Limitation
4. Resolution
Submitted By: Kathryn Downs, FMSA Executive Director
Approved By: Kristine Ridge, City Manager
Fiscal Year 2022-23 Appropriations Limit $ 1,321,523,319
California Per Capita Personal Income:4.440% *
Converted into a Factor 1.0444
Population Growth:-0.46% *
Converted into a Factor:0.9954
Calculation of factor for fiscal year 2023-24 (1.0444 x 0.9954):1.0396
Fiscal Year 2023-24 Appropriations Limit $ 1,373,855,642
* Source: State of California, Department of Finance, Price and Population Information - FY 2023-24
COMPUTATION OF APPROPRIATION LIMIT
FOR FISCAL YEAR ENDING JUNE 30, 2024
EXHIBIT 1
REVENUE
PROCEEDS OF
TAXES
NON-PROCEEDS OF
TAXES TOTALS
TAXES:
Property Tax $101,557,690 $- $ 101,557,690
Sales Tax 156,203,000 - 156,203,000
Hotel Visitors' Tax 8,500,000 - 8,500,000
Business Tax 15,000,000 - 15,000,000
Documentary Stamp Tax 1,000,000 - 1,000,000
Utility Users' Tax 25,800,000 - 25,800,000
Medical Marijuana/Cannabis Tax 16,060,130 - 16,060,130
Total Taxes 324,120,820 - 324,120,820
FROM STATE:
State Motor Vehicle License 300,000 - 300,000
Homeowner Prop Tax Subvention 182,000 - 182,000
State Gas Tax - 16,507,380 16,507,380
SB90 Reimbursements - 85,000 85,000
State Grants - 5,555,470 5,555,470
Standards Training for Corrections Reimbursemen - 55,620 55,620
Total State 482,000 22,203,470 22,685,470
OTHER GOVERNMENT:
Community Development (CDBG) - 5,372,380 5,372,380
Urban Area Security Initiative Grant - 444,680 444,680
Social Services Agency Grant - 838,970 838,970
Housing (Section 8) - 56,694,610 56,694,610
Workforce Investment Act - 2,648,020 2,648,020
Measure M, Street Grants - 37,189,040 37,189,040
Civic Center and Park - 3,908,250 3,908,250
Program Income - 1,158,520 1,158,520
Other Federal Grants - 1,938,300 1,938,300
Total Other Government - 110,192,770 110,192,770
SCHEDULE TO CATEGORIZE ANTICIPATED REVENUES
FOR FISCAL YEAR ENDING JUNE 30, 2024
EXHIBIT 2
Exhibit 2
Continued
PROCEEDS NON-PROCEEDS
REVENUE OF TAXES OF TAXES TOTALS
LOCALLY RAISED:
Licenses and Permits - 6,537,440 6,537,440
Franchise Fees - 11,192,830 11,192,830
Fines and Forfeitures - 5,661,100 5,661,100
Charges for Services - 23,784,360 23,784,360
From Use of Property - 19,157,200 19,157,200
Others - 1,310,000 1,310,000
Others - Inter-Agency - 4,537,900 4,537,900
Total Locally Raised - 72,180,830 72,180,830
OTHER MISCELLANEOUS:
Donation - 346,670 346,670
Expense Reimbursements - 5,961,520 5,961,520
Indirect Cost Recovery - 8,395,000 8,395,000
Interfund Transfers - 21,941,710 21,941,710
Opioid Settlements - 600,000 600,000
Total Other Miscellaneous - 37,244,900 37,244,900
FROM USE OF MONEY:
Earnings on Investment 558,142 438,718 996,860
TOTAL REVENUES $ 325,160,962 $ 242,260,688 $ 567,421,650
Proceeds of taxes 325,160,962$
Less: Exclusions (7,486,547)
Appropriation subject to limitation 317,674,415$
Current year limit 1,373,855,642
Over(under) limit (1,056,181,227)$
APPROPRIATION SUBJECT TO LIMITATION
FOR FISCAL YEAR ENDING JUNE 30, 2024
EXHIBIT 3
RESOLUTION NO. 2023-XXX
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
2023-2024
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 inco me 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
EXHIBIT 2
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 20, 2023.
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 2023-2024 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 5,
2023, 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 2023-2024 is hereby found and
determined to be $1,373,855,642.
Section 3. This Resolution shall take effect thirty (30) days after its adoption by
the City Council, and the City Clerk shall attest to and certify the vote adopting this
Resolution.
ADOPTED this _____ day of ______________, 2023.
_______________________
Valerie Amezcua
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho
City Attorney
By:________________________
Andrea Garcia-Miller
Assistant City Attorney
AYES: Councilmembers ___________________________________
NOES: Councilmembers ___________________________________
ABSTAIN: Councilmembers ___________________________________
NOT PRESENT: Councilmembers ___________________________________
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, Jennifer Hall, City Clerk, do hereby attest to and certify the attached Resolution
No. 2023-______ to be the original resolution adopted by the City Council of the City of
Santa Ana on June 20, 2023.
Date: ____________ ___________________________
City Clerk
City of Santa Ana