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Home My WebLink About55A - RESO FOR FY 2020-21REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JUNE 16, 2020 TITLE ADOPT A RESOLUTION ESTABLISHING THE APPROPRIATION LIMIT OF THE CITY OF SANTA ANA FOR FY 2020-21, AS REQUIRED BY STATE LAW /s/ Kristine CITY MANAGER 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 RECOMMENDED ACTION Adopt a resolution establishing the appropriation limit for Fiscal Year 2020-21, 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, 2021. Furthermore, Section 13-90 of the Santa Ana Municipal Code requires the creation of excess Proceeds of Taxes Reserve Fund (Reserve Fund); for the purpose of providing separate accounting of Proceeds of Taxes (Proceeds) received in a fiscal year prior to the period in which they are expended. The City appropriates Proceeds in the same fiscal year during the period anticipated to be received, and therefore creation of the Reserve Fund is not necessary for the Fiscal Year 2020-21. In Fiscal Year 2018-19, the Proceeds of Taxes were $201,108,983 and the actual General Fund expenditures were $261,267,259. As detailed in the exhibits to the subject resolution, the City's spending limitation from "Proceeds of Taxes" is calculated to be $1,174,757,149 (Exhibit 1) for Fiscal Year 2020-21. This represents the permitted growth rate factor of 1.0373 times the Fiscal Year 2019-20 appropriations limit of $1,132,077,815. 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 2020-21 anticipated revenues from "Proceeds of Taxes" and "Non - Proceeds of Taxes"; and Exhibit 3 computes the Fiscal Year 2020-2021 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 2020-21 appropriation subject to limitation is $233,976,657, which is $940,780,492 below the Gann Limit (allowable limit). 55A-1 Resolution Establishing the Appropriation Limit June 16, 2020 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. Exhibits: 1. Computation of Appropriation Limit 2. Schedule to Categorize Anticipated Revenues 3. Appropriation Subject to Limitation 4. Resolution 55A-2 EXHIBIT 7 EXHIBIT 1 COMPUTATION OF APPROPRIATION LIMIT FOR FISCAL YEAR ENDING JUNE 30, 2021 Fiscal Year 2019-20 Appropriations Limit California Per Capita Personal Income: Converted into a Factor Population Growth: Converted into a Factor: Calculation of factor for fiscal year 2020-21 (1.0373 x 1.0004): $ 1,132,077,815 3.730% * 1.0373 0.04% * 1.0004 1.0377 Fiscal Year 2020-21 Appropriations Limit $ 1,174,757,149 * Source: State of California, Department of Finance, Price and Population Information - FY 2020-21 55A-3 EXHIBIT 2 EXHIBIT 2 SCHEDULE TO CATEGORIZE ANTICIPATED REVENUES FOR FISCAL YEAR ENDING JUNE 30, 2021 REVENUE TAXES: Property Tax Sales Tax Hotel Visitors' Tax Business Tax Documentary Stamp Tax Utility Users' Tax Medical Marijuana/Cannabis 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 $ 88,942,800 $ 100,524,800 5,730,000 9,210,000 1,175, 600 24,300,000 10,675,000 240,558,200 178,400 211,600 390,000 NON -PROCEEDS OF TAXES 14,152,910 88,000 11, 769,120 26, 010, 030 6,236,470 3,890,790 838,970 42, 647, 310 2,387,100 5,676,420 7,677,270 313,400 2,896,910 72, 564, 640 TOTALS $ 88, 942, 800 100, 524, 800 5,730,000 9,210,000 1,175, 600 24, 300, 000 10, 675, 000 240, 558, 200 178,400 211,600 14,152,910 88,000 11, 769,120 26, 400, 030 6,236,470 3,890,790 838,970 42, 647, 310 2,387,100 5,676,420 7,677,270 313,400 2,896,910 72, 564, 640 55A-4 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 Expense Reimbursements Indirect Cost Recovery Interfund Transfers Total Other Miscellaneous FROM USE OF MONEY: Earnings on Investment PROCEEDS OF TAXES NON -PROCEEDS OF TAXES 5,783,730 12,166, 000 4,789,730 25, 839, 230 17, 396, 930 1,000 4,572,700 70, 549, 320 162,000 3,972,890 6,597,150 14, 988, 730 25, 720, 770 TOTALS 5,783,730 12,166, 000 4,789,730 25, 839, 230 17, 396, 930 1,000 4,572,700 70, 549, 320 162,000 3,972,890 6,597,150 14, 988, 730 25, 720, 770 660,475 573,135 1,233,610 TOTAL REVENUES $ 241,608,675 $ 195,417,895 $ 437,026,570 55A-5 EXHIBIT 3 EXHIBIT 3 APPROPRIATION SUBJECT TO LIMITATION FOR FISCAL YEAR ENDING JUNE 30, 2021 Proceeds of taxes Less: Exclusions Appropriation subject to limitation Current year limit Over(under) limit $ 241,608,675 (7,632,018) $ 233,976,657 1,174, 757,149 $ (940,780,492) y EXHIBIT 4 EXHIBIT 4 RESOLUTION NO. 2020- 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 2020-2021 ROH: 06/16/20 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 determinations for the following fiscal year pursuant to Article XIIIB of the California Resolution 2020- 55A-7 Page 1 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 16, 2020. 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 2020-2021 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 1, 2020, 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 2020-2021 is hereby found and determined to be $1,174,757,149. 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 12020. APPROVED AS TO FORM: Sonia R. Carvalho City Attorney By: Ryan 0.1 od e Assistan City Attorney Miguel A. Pulido Mayor Resolution 2020- 55A-8 Page 2 of 3 AYES: Councilmembers NOES: Councilmembers IG1:i.��G11►��i.11IM, 1i 1ii1TM 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. 2020- to be the original resolution adopted by the City Council of the City of Santa Ana on June 16, 2020. Date: Clerk of the Council City of Santa Ana A Resolution 2020- 55A-9 Page 3 of 3