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Home My WebLink About75A-4 - RESO - AA LIMITREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JUNE 19, 2018 TITLE: ADOPT A RESOLUTION ESTABLISHING THE APPROPRIATION LIMIT OF THE CITY OF SANTA ANA FOR FY 2018-19, AS REQUIRED BY STATE LAW (STRATEGIC PLAN NO. 4, 1 D) CIT��LANAGER V RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED El As Recommended El As Amended El Ordinance on Is' Reading El Ordinance on 2n' Reading El Implementing Resolution El Set Public Hearing For CONTINUED TO 51`111140=195 T..:F:l Adopt a resolution establishing the appropriation limit for the fiscal year 2018-19, as required by State law. 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, 2019. As detailed in the exhibits to the subject resolution, the City's spending limitation from "Proceeds of Taxes" is calculated to be $1,086,968,617 (Exhibit 1) for fiscal year 2018-19. This represents the permitted growth rate factor of 1.0439 times the fiscal year 2017-18 appropriations limit of $1,041,257,416. The funds constrained by the appropriations limit include the General Fund, the Capital Outlay Fund, and Special Revenue Funds. Additionally, Exhibit 1 identifies the factors used to determine the allowable increase from the prior year; Exhibit 2 categorizes FY 2018-19 anticipated revenues from "Proceeds of Taxes" and "Non -Proceeds of Taxes"; and Exhibit 3 computes the fiscal year 2018-2019 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 2018-19 appropriation subject to limitation is $172,728,141, which is $914,240,476 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). 75A-4-1 Resolution Establishing the Appropriation Limit June 19, 2018 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 75A-4-2 EXHIBIT I COMPUTATION OF APPROPRIATION LIMIT FOR FISCAL YEAR ENDING JUNE 30, 2019 Fiscal Year 2017-18 Appropriations Limit California Per Capita Personal Income: Converted into a Factor Population Growth: Converted into a Factor: Calculation of factor for fiscal year 2018-19 (1.0367 x 1.0069): Fiscal Year 2018-19 Appropriations Limit 1,041,257,416 3.670% 1.0367 0.69% 1.0069 1.0439 1,086,968,617 * Source: State of California, Department of Finance, Price and Population Information - FY 2018-19 75A-4-3 75A-4-4 EXHIBIT2 SCHEDULE TO CATEGORIZE ANTICIPATED REVENUES FOR FISCAL YEAR ENDING JUNE 30,2019 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 Housing (Section 8) Workforce Investment Act Measure M, Street Grants Civic Center and Park Program Income Other Federal Grants Total Other Government PROCEEDS NON -PROCEEDS OF TAXES OF TAXES TOTALS 78,109,701 $ - $ 78,109,701 50,104,702 - 50,104,702 8,500,000 - 8,500,000 12,000,000 - 12,000,000 850,000 - 850,000 25,400,000 - 25,400,000 2,260,000 - 2.260.000 177,224.403 - 177,224,403 153,627 - 153,627 201,205 - 201,205 - 14,338.110 14,338,110 92,000 92,000 1.397,000 1,397,000 354,832 15,827,110 16,181,942. - 6,292,659 6,292,659 - 4,941,936 4,941,936 - 35,871,760 35,871,760 - 2,709,800 2,709,800 - 20,018,984 20,018,984 - 5,914,939 5,914,939 - 300,000 300,000 3,099,023 3,099,023 79,149,101 79,149,101 75A-4-5 Exhibit 2 Continued 75A-4-6 PROCEEDS NON -PROCEEDS REVENUE OF TAXES OF TAXES TOTALS LOCALLY RAISED: Licenses and Permits - 19,381,829 19,381,829 Franchise Fees - 3,598,000 3,598,000 Fines and Forfeitures - 6,129,570 6,129,570 Charges for Services - 24,897,697 24,897,697 From Use of Property - 17,472,813 17,472,813 Others - 5,099,500 5,099,500 Others - Inter -Agency 4,537,918 4,537,918 Total Locally Raised 81,117.327 81,117.327 OTHER MISCELLANEOUS: Donation - 20,000 20,000 Sale of Property - 2,130,300 2,130,300 Attorney Reimbursements - 979,890 979,890 -Expense Reimbursements - 1,562,654 1,562,654 Indirect Cost Recovery - 2,700.000 2,700,000 From Prior Year Fund Balances - 35,341,428 35,341,428 Refuse Program Savings - 1,352,000 1,352,000 Interfund Transfers - 14,550,479 14,550,479 Total Other Miscellaneous - 58,636,751 58,636,751 FROM USE OF MONEY: Earnings on Investment 516,136 719,525 1,235,661 TOTALREVENUES 178,095,371 235,449,814 $ 413,545.185 75A-4-6 EXHIBIT 3 APPROPRIATION SUBJECT TO LIMITATION FOR FISCAL YEAR ENDING JUNE 30, 2019 Proceeds of taxes Less: Exclusions Appropriation subject to limitation Current year limit Over(under) limit 75A-4-7 $ 178,095,371 (5,367,230) $ 172,728,141 1,086,968,617 $ _21L240.476) 75A-4-8 1 *V4 2 1 W I 111E, ROH: 06/19118 RESOLUTION NO. 2018- 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 2018-2019 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 years 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 I I I 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 Count)(s percentage change in population from the preceding year. Resolution No. 2018- 75A-4-9 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 XIIII3 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 19, 2018. 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 2018-2019 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 4, 2018, 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 2018-2019 is hereby found and determined to be $1,086,968,617. 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 2018. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho Resolution No. 201& 75A-4-1 0 AYES: Councilmembers NOES: Counclimembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY 1, Maria D. Hulzar, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2018- to be the original resolution adopted by the City Council of the City of Santa Ana on June 19, 2018. Date: Clerk of the Council City of Santa Ana Resolution No. 2018- 75A-4-11 75A-4-12