HomeMy WebLinkAboutItem 60 - Adopt a Resolution Establishing the Appropriations Limit for 2022-23 Finance and Management Services
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Item # 60
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
June 21, 2022
TOPIC: Adopt a Resolution Establishing the Appropriations Limit for 2022-23
AGENDA TITLE:
Adopt a Resolution Establishing the Appropriations Limit of the City of Santa Ana for
Fiscal Year (FY) 2022-23
RECOMMENDED ACTION
Adopt a resolution establishing the appropriations limit of the City of Santa Ana for FY
2022-23, 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, 2023.
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 2022-23. In fiscal year 2020-21,
the Proceeds of Taxes were $284,153,895 and the actual General Fund expenditures
were $324,860,806.
Using the formula provided by the state, staff calculated the spending limitation from
“Proceeds of Taxes” as $1,321,523,319 (Exhibit 1) for fiscal year 2022-23, which is the
FY21-22 limit increased by 7.30%. 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 2022-23 anticipated revenues from “Proceeds of
Taxes” and “Non-Proceeds of Taxes”. Exhibit 3 computes the FY 2022-23 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 fiscal year 2022-23
Adopt a resolution establishing the appropriations limit for 2022-23
June 21, 2022
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appropriations subject to limitation is $313,200,291, which is $1,008,323,028 less than
the allowable GANN Limit.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
There is no fiscal impact associated with this action.
EXHIBIT
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 2021-22 Appropriations Limit $1,231,615,395
California Per Capita Personal Income:7.550%*
Converted into a Factor 1.0755
Population Growth:-0.23%*
Converted into a Factor:0.9977
Calculation of factor for fiscal year 2022-23 (1.0755 x 0.9977):1.0730
Fiscal Year 2022-23 Appropriations Limit $1,321,523,319
* Source: State of California, Department of Finance, Price and Population Information - FY 2022-23
EXHIBIT 1
COMPUTATION OF APPROPRIATION LIMIT
FOR FISCAL YEAR ENDING JUNE 30, 2023
EXHIBIT 1
REVENUE
PROCEEDS OF
TAXES
NON-PROCEEDS OF
TAXES TOTALS
TAXES:
Property Tax $95,988,340 $-$95,988,340
Sales Tax 155,370,100 -155,370,100
Hotel Visitors' Tax 8,500,000 -8,500,000
Business Tax 15,000,000 -15,000,000
Documentary Stamp Tax 1,085,000 -1,085,000
Utility Users' Tax 24,400,000 -24,400,000
Medical Marijuana/Cannabis Tax 22,200,000 -22,200,000
Total Taxes 322,543,440 -322,543,440
FROM STATE:
State Motor Vehicle License 225,100 -225,100
Homeowner Prop Tax Subvention 188,000 -188,000
State Gas Tax - 17,183,130 17,183,130
SB90 Reimbursements - 88,000 88,000
State Grants - 11,319,820 11,319,820
Total State 413,100 28,590,950 29,004,050
OTHER GOVERNMENT:
Community Development (CDBG) - 6,364,230 6,364,230
Urban Area Security Initiative Grant - 6,941,060 6,941,060
Social Services Agency Grant - 842,860 842,860
Housing (Section 8) - 50,942,120 50,942,120
Workforce Investment Act - 2,404,270 2,404,270
Measure M, Street Grants - 6,651,330 6,651,330
Civic Center and Park - 3,908,890 3,908,890
Program Income - 1,370,570 1,370,570
Other Federal Grants - 5,987,680 5,987,680
Total Other Government - 85,413,010 85,413,010
EXHIBIT 2
SCHEDULE TO CATEGORIZE ANTICIPATED REVENUES
FOR FISCAL YEAR ENDING JUNE 30, 2023
EXHIBIT 2
Exhibit 2
Continued
PROCEEDS NON-PROCEEDS
REVENUE OF TAXES OF TAXES TOTALS
LOCALLY RAISED:
Licenses and Permits - 6,554,580 6,554,580
Franchise Fees - 11,200,100 11,200,100
Fines and Forfeitures - 5,516,230 5,516,230
Charges for Services - 19,066,840 19,066,840
From Use of Property - 17,998,410 17,998,410
Others - 80,000 80,000
Others - Inter-Agency - 4,537,900 4,537,900
Total Locally Raised - 64,954,060 64,954,060
OTHER MISCELLANEOUS:
Donation - 240,420 240,420
Expense Reimbursements - 4,000,410 4,000,410
Indirect Cost Recovery - 7,500,000 7,500,000
Interfund Transfers - 27,039,800 27,039,800
Total Other Miscellaneous - 38,780,630 38,780,630
FROM USE OF MONEY:
Earnings on Investment 413,049 300,951 714,000
TOTAL REVENUES $323,369,589 $218,039,601 $541,409,190
Proceeds of taxes 323,369,589$
Less: Exclusions (10,169,298)
Appropriation subject to limitation 313,200,291$
Current year limit 1,321,523,319
Over(under) limit (1,008,323,028)$
EXHIBIT 3
APPROPRIATION SUBJECT TO LIMITATION
FOR FISCAL YEAR ENDING JUNE 30, 2023
EXHIBIT 3
Resolution 2022-____
Page 1 of 3
ROH: 06/21/22
RESOLUTION NO. 2022-
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
2022-2023
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 d eterminations
for the following fiscal year pursuant to Article XIIIB of the California
EXHIBIT 4
Resolution 2022-____
Page 2 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 21, 2022.
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 2022-2023 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 6,
2022, 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 2022-2023 is hereby found and
determined to be $1,321,523,319.
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 ______________, 2022.
_______________________
Vicente Sarmiento
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho
City Attorney
By:________________________
Ryan O. Hodge
Assistant City Attorney
Resolution 2022-____
Page 3 of 3
AYES: Councilmembers ___________________________________
NOES: Councilmembers ___________________________________
ABSTAIN: Councilmembers ___________________________________
NOT PRESENT: Councilmembers ___________________________________
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, Daisy Gomez, Clerk of the Council, do hereby attest to and certify the attached
Resolution No. 2022-______ to be the original resolution adopted by the City Council of
the City of Santa Ana on June 21, 2022.
Date: ____________ ___________________________
Clerk of the Council
City of Santa Ana