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Home My WebLink About55B - RESO - AA LIMIT FY 16-17REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 5, 2016 TITLE; RESOLUTION ESTABLISHING THE APPROPRIATION LIMIT OF THE CITY OF SANTA ANA FOR FY 2016 -17 {STRATEGIC PLAN NO. 4, 1D} RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1e0 Reading ❑ Ordinance on 2 "d Reading ❑ Implementing Resolutlon ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Adopt a resolution establishing the appropriation limit for the fiscal year 2016 -17. 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 cities to establish this limit by resolution. Adoption of the subject resolution is necessary for compliance with these provisions for the fiscal year ending June 30, 2017. As detailed in the exhibits to the subject resolution, the City's spending limitation from "Proceeds of Taxes" is calculated to be $997,277,479 (Exhibit 1) for fiscal year 2016 -17. This represents the permitted growth rate factor of 1.0641 times the fiscal year 2015 -16 appropriations limit of $937,202,781. Additionally, Exhibit 1 identifies the factors used to determine the allowable increase from the prior year; Exhibit 2 categorizes Fiscal Year (FY) 2016 -17 anticipated revenues from "Proceeds of Taxes" and "Non- Proceeds of Taxes "; and Exhibit 3 computes the fiscal year 2016 -17 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 2016 -17 appropriation subject to limitation is $164,536,547, which is $832,740,932 below the Gann Limit (allowable limit). 5513-1 Resolution Establishing the Appropriation Limit for Fiscal Year 2016 -2017 July 5, 2016 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 Francisco Gutierrez Executive Director Finance and Management Services Agency Exhibits: 1. Computation of Appropriation Limit 2. Schedule to Categorize Anticipate Revenues 3. Appropriation Subject to Limitation 55B -2 EXHIBIT 1 COMPUTATION OF APPROPRIATION LIMIT FOR FISCAL YEAR ENDING JUNE 30, 2017 Fiscal Year 2015 -16 Appropriations Limit California Per Capita Personal Income: Converted into a Factor Population Growth: Converted into a Factor: $ 937,202,781 5.370% 1.0537 0.99% 1.0099 Calculation of factor for fiscal year 2016 -17 (1.0537 x 1.0099): 1.0641 Fiscal Year 2016 -17 Appropriations Limit $ 997,277,479 * Source: State of California, Department of Finance, Price and Population Information - FY 2016 -17 55B -3 55B -4 EXHIBIT 2 SCHEDULE TO CATEGORIZE ANTICIPATED REVENUES FOR FISCAL YEAR ENDING JUNE 30, 2017 REVENUE TAXES: Property Tax Sales Tax Hotel Visitors' Tax Business Tax Documentary Stamp Tax Utility Users' Tax Medical Marijuana 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 OF TAXES 70,557,000 48, 834,160 9,430,000 11,632,323 800,000 27,780,000 1,500,000 170, 533,483 165,000 230,000 395,000 55B -5 NON- PROCEEDS OF TAXES TOTALS 70, 557, 000 - 48,834,160 - 9,430,000 - 11,632,323 - 800,000 - 27,780,000 - 1,500,000 - 170,533,483 - 165,000 - 230,000 6,829,360 6,829,360 409,305 409,305 1,440, 500 1,440, 500 8,679,165 9,074,165 5,775,465 4,097,444 800,000 30,900,515 2,927,792 20,468,322 4,410,600 465,000 5,471,791 75,316,929 5,775,465 4,097,444 800,000 30,900,515 2,927,792 20,468,322 4,410,600 465,000 5,471, 791 75, 316, 929 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 Sale of Junk and Property Attorney Reimbursements Expense Reimbursements Indirect Cost Recovery From Prior Year Fund Balances Refuse Program Savings Interfund Transfers Total Other Miscellaneous PROCEEDS OF TAXES NON - PROCEEDS OF TAXES TOTALS 4,669,023 8,480,620 4,945,856 21,844,369 16,956,805 75,100 6,926,000 63,897,773 4,669, 023 8,480,620 4,945,856 21,844,369 16,956,805 75,100 6,926,000 63,897,773 - 114,115 114,115 - 23,037 23,037 - 979,000 979,000 - 1,587,937 1,587,937 - 2,400,000 2,400,000 - 40,894,372 40,894,372 - 1,352,000 1,352,000 5,797,295 5,797,295 - 53,147,756 53,147,756 FROM USE OF MONEY: Earnings on Investment 328,697 415,803 744,500 TOTAL REVENUES $ 171,257,180 $ 201,457,426 $ 372,714,606 55B -6 EXHIBIT 3 APPROPRIATION SUBJECT TO LIMITATION FOR FISCAL YEAR ENDING JUNE 30, 2017 Proceeds from taxes Less: Exclusions Appropriation subject to limitation Current year limit Over(under) limit 55B -7 $ 171,257,180 (6,720,633) $ 164,536,547 997,277,479 $ (832,740,932) 55B -8 EXHIBIT 4 imf 6/20/16 RESOLUTION NO. 2016 -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 2016 -2017 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 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 underexpenditures 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, 2016 -xxx Page 1 of 3 55B -9 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 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 5, 2016. 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 2016 -2017 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 20, 2016, 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 2016 -2017 is hereby found and determined to be $997,277.479. 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 5th day of July, 2016. APPROVED AS TO FORM: Sonia R. Carvalho City Attorney By. fib,, Joh I. Funk Assistant City Attorney Miguel A. Pulido Mayor 55B -10 Resolution No. 2016 -xxx Page 2 of 3 AYES: Councilmembers NOES: 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. 2016 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on July 5, 2016. Date: Clerk of the Council City of Santa Ana 55B -11 Resolution No. 2016 -xxx Page 3 of 3 55B -12