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Home My WebLink About55D - RESO - ESTABLISH AA LIMITREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 7, 2015 TITLE: RESOLUTION ESTABLISHING THE APPROPRIATION LIMIT OF THE CITY OF SANTA ANA FOR FY 2015 -16 {STRATEGIC PLAN NO. 4, 1D} CITY RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1" Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For_ CONTINUED TO FILE NUMBER Adopt a resolution establishing the appropriation limit for the fiscal year 2015 -16. DISCUSSION The State of California Constitution includes 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, 2016. As detailed in the exhibits to the subject resolution, the City's spending limitation from "Proceeds of Taxes" is calculated to be $937,202,781 (Exhibit A) for FY 2015 -16. This represents the permitted growth rate factor of 27.8594 times the adjusted base year (1978 -1979) appropriation limit of $33,640,451. Exhibit B identifies the factors used to determine the allowable increase; Exhibit C categorizes FY 2015 -16 anticipated revenues from "Proceeds of Taxes" and "Non - Proceeds of Taxes "; and Exhibit D computes the fiscal year 2015 -2016 appropriations subject to this limitation and identifies the difference between the limit and the budgeted appropriation. As demonstrated in Exhibit D, the City's anticipated FY 2015 -16 "Proceeds of Taxes" revenue will be $782,969,710 below the allowable limit. 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). 55D -1 Resolution Establishing the Appropriation Limit July 7, 2015 Page 2 FISCAL IMPACT There is no fiscal impact associated with this action. Francisco Gutierrez Executive Director Finance and Management Services Agency Exhibits: A. Computation of Appropriation Limit B. Calculation of Permitted Growth Rate C. Schedule to Categorize Anticipate Revenues D. Appropriation Subject to Limitation E. Resolution SR 55D -2 EXHIBIT A COMPUTATION OF APPROPRIATION LIMIT FOR FISCAL YEAR ENDING JUNE 30. 2016 Appropriation Limit: 1978 -79 Base Year Permitted Growth Rate in appropriation (Exhibit B) Appropriation Limit for the Fiscal Year Ending June 30, 2016 55D -3 $ 33,640,451 27.8594 $ 937,202,781 55D -4 CALCULATION OF PERMITTED GROWTH RATE IN APPROPRIATIONS FOR FISCAL YEAR ENDING JUNE 30, 2016 Factor 2015 -16: California Per Capita Personal Income: Converted into a Factor Population Growth: Converted into a Factor: Rates of Change: 1.0382 x 1.0108 Multiplied by 2014 -15 Combined Index Combined Index 1979 -80 through 2015 -2016 55D -5 3.820% 1.0382 1.08% 1.0108 1.0494 26.5479 27.8594 55D -6 EXHIBIT C SCHEDULE TO CATEGORIZE ANTICIPATED REVENUES FOR FISCAL YEAR ENDING JUNE 30, 2016 FROM STATE State Motor Vehicle PROCEEDS NON - PROCEEDS 163,000 REVENUE OF TAXES OF TAXES TOTALS TAXES: 311,000 311,000 Property Tax $ 67,413,500 $ - $ 67,413,500 Sales Tax 47,780,000 - 47,780,000 Hotel Visitors' Tax 8,800,000 - 8,800,000 Business Tax 11,490,000 - 11,490,000 Documentary Stamp Tax 788,000 - 788,000 Utility Users' Tax 27,780,000 - 27,780,000 Medical Marijuana Tax 1,500,000 - 1,500,000 Total Taxes 165,551,500 - 165,551,500 FROM STATE State Motor Vehicle 163,000 - 163,000 State Gas Tax - 7,527,406 7,527,406 State Cost Reimbursements 311,000 311,000 State Grants 192,558 192,558 AQMD AB 2766 414,000 414,000 Total State 163,000 8,444,964 8,607,964 OTHER GOVERNMENT: Community Development (CDBG) - Homeowner Prop Tax Subvention 230,000 UASI Grant - SSA Grant - Housing (Section 8) - WIA - Measure M, Street Grants, Gas Tax Exch - Civic Center and Park - Program Income - Other Federal Grants: HOME, HOPWA Total Other Government 230,000 55D -7 5,929,995 1,71 6,090 800,000 32,668,175 3,099,390 8,710,179 4,033,300 170,000 5,929,995 230,000 1,716,090 800,000 32,668,175 3,099,390 8,710, 179 4,033,300 170,000 1,073,375 1,073,375 58,200,504 58,430,504 55D -8 Exhibit C Continued 55D -9 PROCEEDS NON - PROCEEDS REVENUE OF TAXES OF TAXES TOTALS LOCALLY RAISED: Licenses and Permits - 4,555,435 4,555,435 Franchise Fees - 8,325,000 8,325,000 Fines and Forfeitures - 5,723,100 5,723,100 Charges for Services - 13,088,855 13,088,855 From Use of Property - 18,219,465 18,219,465 Others - 63,650 63,650 Others - Inter - Agency - 6,926,000 6,926,000 Total Locally Raised - 56,901,505 56,901,505 OTHER MISCELLANEOUS: Donation - 123,650 123,650 Sale of Junk and Property - 18,610 18,610 Attorney Reimbursements - 979,000 979,000 Expense Reimbursements - 2,041,220 2,041,220 Indirect Cost Recovery - 2,200,000 2,200,000 From Prior Year Fund Balances - 25,775,160 25,775,160 Refuse Program Saving - 1,352,000 1,352,000 Interfund Transfers - 9,387,568 9,387,568 Total Other Miscellaneous - 41,877,208 41,877,208 FROM USE OF MONEY: Earnings on Investment 306,637 353,508 660,145 TOTAL REVENUES $ 166,251,137 $ 165,777,689 $ 332,028,826 55D -9 55D -10 lacir:3r�r� APPROPRIATION SUBJECT TO LIMITATION FOR FISCAL YEAR ENDING JUNE 30, 2016 Proceeds from taxes Less: Exclusions Appropriation subject to limitation Current year limit Over(under) limit 55D -11 $ 166,251,137 12,018,066 $ 154,233,071 937,202,781 $ (782,969,710) 55D -12 ROH: 07/07/15 RESOLUTION NO. 2015- 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 2015 -2016 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 November 1987, 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 X11 B 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 XIII B 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. Resolution No. 2015- 55D -13 F. Division 9 of Title I of the Government Code of the State of California (commencing with section 7900), as enacted by 1980 Statutes, Chapter 1205, effective January 1, 1981, directs 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 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 July 7, 2015. H. The Executive Director, Finance and Management Services Agency of the City of Santa Ana, has determined the City's appropriation limit for fiscal year 2015 -2016 in accordance with said provisions of the Constitution and laws of the State of California and the documentation used in said determination has been available to the public since not later than June 22, 2015, In the office of the Executive Director, Finance & 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 2015 -2016 is hereby found and determined to be $937.202,781. 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. Resolution No. 2015- 55D -14 ADOPTED this day of 2015. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho City AttoMey By:' j Ryan AYES NOES Councilmembers Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, Maria D. Huizar, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2015- to be the original resolution adopted by the City Council of the City of Santa Ana on July 2015. Date: Clerk of the Council City of Santa Ana 55D -15 Resolution No. 2015- 55D -16