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Home My WebLink About55A - RESO - AA LIMITREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JUNE 20, 2017 TITLE: RESOLUTION ESTABLISHING THE APPROPRIATION LIMIT OF THE CITY OF SANTA ANA FOR FY 2017-18 (STRATEGIC PLAN NO. 4, 1 D) CITY ANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 15' Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Adopt a resolution establishing the appropriation limit for the fiscal year 2017-18. 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, 2018. As detailed in the exhibits to the subject resolution, the City's spending limitation from "Proceeds of Taxes" is calculated to be $1,041,257,416 (Exhibit 1) for fiscal year 2017-18. This represents the permitted growth rate factor of 1.0441 times the fiscal year 2016-17 appropriations limit of $997,277,479. Additionally, Exhibit 1 identifies the factors used to determine the allowable increase from the prior year; Exhibit 2 categorizes FY 2017-18 anticipated revenues from "Proceeds of Taxes" and "Non -Proceeds of Taxes"; and Exhibit 3 computes the fiscal year 2017-2018 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 2017-18 appropriation subject to limitation is $185,816,470, which is $855,440,946 below the Gann Limit (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). 55A-1 Resolution Establishing the Appropriation Limit June 20, 2017 Page 2 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 Anticipated Revenues 3. Appropriation Subject to Limitation 4. Resolution 55A-2 EXHIBIT 1 COMPUTATION OF APPROPRIATION LIMIT FOR FISCAL YEAR ENDING JUNE 30, 2018 Fiscal Year 2016-17 Appropriations Limit California Per Capita Personal Income: Converted into a Factor Population Growth: Converted into a Factor: $ 997,277,479 3.690% 1.0369 0.69% 1.0069 Calculation of factor for fiscal year 2017-18 (1.0369 x 1.0069): 1.0441 Fiscal Year 2017-18 Appropriations Limit $ 1,041,257,416 * Source: State of California, Department of Finance, Price and Population Information - FY 2017-18 55A-3 EXHIBIT 2 SCHEDULE TO CATEGORIZE ANTICIPATED REVENUES FOR FISCAL YEAR ENDING JUNE 30, 2018 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 Innovation & Opportunity Act Measure M, Street Grants Civic Center and Park Program Income Other Federal Grants Total Other Government PROCEEDS OF TAXES $ 73,360,459 $ 52,619,000 9,900,000 11, 770,000 800,000 27,780,000 2,500,000 178,729,459 153,627 201,205 NON -PROCEEDS OF TAXES TOTALS $ 73,360,459 52,619,000 9,900,000 11,770,000 800,000 27,780,000 2,500,000 178,729,459 153,627 - 201,205 9,529,725 9,529,725 97,000 97,000 - 1,323,068 1,323,068 354,832 10,949,793 11,304,625 - 5,602,201 - 1,756,797 - 2,740,000 - 30,284,691 - 3,022,836 - 21,993,906 - 5,708,600 - 179,000 - 4,609,949 75,897,980 55A-4 5,602,201 1,756,797 2,740,000 30,284,691 3,022,836 21,993,906 5,708,600 179,000 4,609,949 75,897,980 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 Saving Interfund Transfers Total Other Miscellaneous FROM USE OF MONEY: Earnings on Investment TOTALREVENUES PROCEEDS NON -PROCEEDS 125,000 OF TAXES OF TAXES TOTALS - 5,803,105 5,803,105 - 8,570,047 8,570,047 - 5,193,499 5,193,499 - 24,054,881 24,054,881 - 6,095,292 6,095,292 - 2,300 2,300 - 4,537,918 4,537,918 54,257,042 54,257,042 125,000 125,000 500 500 979,890 979,890 1,747,343 1,747,343 2,538,822 2,538,822 30,651,801 30,651,801 1,352, 000 1,352,000 8,124,850 8,124,850 45,520,206 45,520,206 388,467 434,033 822,500 $ 179,472,758 $ 187,059,054 $ 366,531,812 55A-5 EXHIBIT 3 APPROPRIATION SUBJECT TO LIMITATION FOR FISCAL YEAR ENDING JUNE 30, 2018 Proceeds from taxes Less: Exclusions Appropriation subject to limitation Current year limit Over(under) limit y $ 179,472,758 (6,343,712) $ 185,816,470 1,041,257,416 $(855,440,946) EXHIBIT 4 ROH: 06/20/17 RESOLUTION NO. 2017- 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 2017-2018 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. Resolution No. 2017- 55A-7 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 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, 2017. 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 2017-2018 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, 2017, 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 2017-2018 is hereby found and determined to be $1,041,257,416. 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 , 2017. APPROVED AS TO FORM: Sonia R. Carvalho Resolution No. 2017- y • Miguel A. Pulido Mayor 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. 2017- to be the original resolution adopted by the City Council of the City of Santa Ana on June 20, 2017. Date: Clerk of the Council City of Santa Ana Resolution No. 2017- 55A-9 55A-10