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Home My WebLink About11 APPROP LIMIT 96-97 07-01-96Inter-Com DATE: JUNE 26, 1996 TO: FROM: SUBJECT: WILLIAM A. HUSTON, CITY MANAGER RONALD ~. N~ULT, FINANCE DIRECTOR APPROPRIATION LIMIT FOR FISCAL YEAR 1996-97 RECOMMENDATION: le Select the change in the California per Capita Personal Income as the price factor for adjusting the 1996-97 appropriation limit. · Adopt Resolution 96-75 setting the appropriation limit for Fiscal Year 1996-97 at $30,266,623. FISCAL IMPACT: None. DISCUSSION: Article XIIIB of the State Constitution requires Cities to annually adopt a limit on appropriations for governmental funds.~The basis of this limitation is the relationship between proceeds ~f tax and total appropriations. The base year was 1978-79, and the limit is allowed to grow based on the annual increase in population and U.S. CPI/California per Capita Personal Income, whichever is less. Proposition 111 was approved by voters in 1990 changing the base year from 1978-79 to 1986-87 and amending the adjustment formulas to make the Appropriation Limit more responsive to locai growth issues. It also required a review of the Limit calculation as part of the annual audit process. Exhibit "A" shows the calculation of the Appropriation Limit for each of the Fiscal Years 1986-87 through 1996-97. Worksheets #1-7 go through the various calculations that are required in conformance with the League of California Cities uniform guidelines for calculating the annual appropriations limit. Worksheet #6 goes through the steps necessary to calculate the current limit of $30,266,623. Worksheet #4 carries forward the proceeds of taxes from Worksheet #2 and compares them with the current year's limit from Worksheet #6. The result shows the City of Tustin is below its allowable, spending limit for Fiscal 1996-97 by $10.4 million. Ronald A. Nault Finance Director RAN:ts Attachments RAN5 :Agenda6. Jun. ! $ 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 21 22 25 26 27 28 RESOLUTION 96-75 A RESOLUTION OF THE CITY,COUNCIL OF THE CITY OF TUSTINt CALIFORNIAt DETERMINING A/TD ADOPTING AN APPROPRIATION LIMIT FOR THE FISCAL YEAR 1996-1997 IN ACCORDANCE WITH ARTICLE XIIIB OF THE CONSTITUTION OF THE STATE OF CALIFORNIA~ AND SECTION 7910 OF THE ~OVERNMENT CODE The City Council of The City of Tustin does hereby resolve as follows: WHEREAS, Article XIIIB was added to the Constitution of the State of California at a general election held November 6v 1979; and. WHEREAS, an annual appropriation limit must be determined for this City effective for the fiscal year beginning July, 1996; and WHEREAS, the appropriation limit must be adhered to in preparing and adopting this City's Annual Budget; NOW, THEREFORE, the City Council of the City of Tustin does hereby resolve and order as follows: Section 1: In accordance with Article XIIIB of the Constitution of the State of California, and Section 7910 of th~ Government Code, and as set forth in detail in the Attached Exhibit "A", that the appropriation limit for. the fiscal year beginning July, 1996 through June, 1997 is $30,266,623. Section 2: The appropriation limit shall not. be exceeded in the adopted budget nor by any proposed amendment to the budget. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Tustin held on the 1st day of July , 1996. ATTEST: Tracy Wills Worley, MayOr Pamela Stoker, City Clerk STATE OF CALIFORNIA DEPARTMENT OF FINANCE 915 L STREET SACRAMENTO, CA 95814'4998 May l, 1996 P, ECEIVED FINANCE DEPT. PETE V~LSON. Governor PRICE AND POPULATION DATA FOR LOCAL JtTRISDICTIONS Appropriations Limit Article XIII B of the California Constitution specifies that appropriations made by State and local governments ma3' increase annually by a factor comprised of the change in population combined with either the change in California per capita personal income or the change in the local assessment roll d,:e to local nonresidential construction. The Department of Finance is mandated to provide the population and California per capita personal income change data for local jurisdictions to calculate their appropriation limits. The change in the local assessment roll due to local nonresidential construction may be obtained from your county Assessor. The enclosures contain price and population factors for setting your 1996-97 appropriation limit. Enclosure I provides the change in Califomia's per capita personal income price factor. An example of how to utilize this price factor and the population percentage change factor in calculating your 1996-97 limit is included. EnclosUre II provides the population percentage change factors for cities and counties. Enclosure IIA provides the' population percentage change factor for counties and for the total incorporated population of each count3,. These population percentage changes were prepared pursuant to Sections 2227 and 2228 of the Revenue and Taxation Code and are calculated as of January 1, 1996. Section 2227 specifies that state mental institutions, federal military bases and state and ''~ a-- ' ~u,,a, prisons be excluded from t_he percentage change calculations. Population Factors for Cities and Counties The Demographic Research Unit has adopted a new method of estimating population for the cities and counties. This new method was used for the numbers presented here. The effect is to lower population for the State and most jurisdictions. The new method 'was used to revise city and county numbers for earlier years in the 1990s. The revisions are available on request. Cities and-counties should consult Section 7901 of the Government Code for the various population factors that may be used 'for purposes of change in population. May 1, 1996 Page 2 PopUlation Factors for Special Districts Special districts should consult' Section 7901 of the Government Code and Section 2228 of the Revenue and Taxation Code for the various population factors that may be used for purposes of change in population. .' Article XIII B, Section 9(c) states that special districts in existence on January 1, 1978, which levied a tax of 12½ cents or less per $100 assessed value on property within their boundaries as of the 1977-78 fiscal year are permanently exempt from establishing appropriation limits. In addition, any special districts in existence or created thereafter whose sole funding source is from nonproceeds of taxes are also exempt. Therefore, special districts which meet either of these two tests do not need to establish appropriation limits. This letter may be received by special districts, which were exempt fi-om establishing appropriation limits by Article XIII B, Section 9(c). Receipt of this letter should not be construed as a requirement by the Department of Finance to establish an appropriation limit. Certification The certification program applies to cities and counties only and does not apply to special districts. Sections 11005.6 and 30462.1 of the Revenue and Taxation Code, Section 21022 Streets and Highways Code, and Section 38421 Vehicle Code specify that if a Department of Finance population estimate is greater than the current certified population the Department shall automatically file a certified copy with the Controller not less than 25 days nor more than 30 days after completion of the estimate. The Department will certify the higher estimate unless a ,a~:itten request not to certify is received by the Department from the city or county within 25 days of the completion of the estimate. A city or county requesting that their higher estimate not be certified will remain at the current certified population. The Department of Finance will not certify a population estimate that is lOwer than the current certified population unless requested to do so by a city or a county. The request for certification must be received by the Department on or before June 1, 1996. Further Information Questions concerning population should be directed to the Demographic Research Unit at (916) 322-4651. Director Enclosures ANNUAL PERCENTAGE CHANGE IN POPULATION MINUS EXCLUSIONS* JANUARY l, TO JANUARY l, 1996 AND TOTAL POPULATION JANUARY l, 1996. 1995 ENCLOSURE II DATE PRINTED O4/3O/96 COUNTY CITY POPULATION MINUS EXCLUSIONS ANNUAL PERCENT CHANGE 1995 TO ]996 POPULATION 7-1-95 1-1-96- TOTAL POPULAT I ON 1-1-96 ORANGE ANAHEIM BREA BUENA PARK COSTA MESA CYPRESS DANA POINT FOUNTAIN VALLEY FULLERTON GARDEN GROVE HUNTINGTON BEACH IRVINE LAGUNA BEACH LAGUNA HILLS LAGUNA NIGUEL LA HABRA LAKE FOREST LA PALMA LOS ALAMITOS MISSION VIEJO NEWPORT BEACH ORANGE PLACENTIA SAN CLEMENTE SAN JUAN CAPISTRANO SANTA ANA SEAL' BEACH STANTON ]~TUSTIN VILLA PARK WESTMINSTER YORBA LINDA UNINCORPORATED ORANGE COUNTY 0.59 O.BO O.11 O.11 0.50 0.85 o.13 0.35 0.09 0.32 4.45 0.89 0.32 1.43 0.25 0.10 -o.o6 o.75 1.79 0.22 7.39 0.96 7.38 1.11 -o.17 o.o9 0.07 3.73 0.46 0.So 0.96 5.40 291,536 34,527 72,617 46,167 35,679 54,239 121,63o 151,247 186,587 12o,474 23,581 24,940 54,778 53,980 57,571 15,513 ]],422 88,323 68,920 ]18,105 44,575 45,972 28,629 306,327 25,646 31,861 56,821 6,336 81,879 57,084 165,624 293,245 34,802 72,700 101,269 46,397 35,984 54,311 122,059 151,376 187,18o 125,836 23,790 25,021 55,561 54,117 57,631 15,5o4 11,508 89,906 69,069 119,742 45,003 46,607 28,948 3o5,8oo 25,668 31,882 58,940 6,365 82,536 57,632 174.,570 '293,245 34,802 72,700 102,084 46,397 35,984 54,311 122,059 151,376 187,18o 127,22o 23,790 25,021 55,567 54,117 57,631 15,5o4 12,307 89,906 69,069 ]19,742 45,003 46,607 28,948 305,800 26,366 31,882 63,619 6,365 82,536 57,632 179,571 1.05 2,583,745 2,6]0,959 2,624,335 EXCLUSIONS INCLUDE STATE MENTAL INSTITUTIONS, FEDERAL MILITARY BASES AND STATE AND FEDERAL PRISONS. PAGE 1 S'rATE OF CALIFORNIA DEPARTMENT OF FINANCE 915 L STREET SACRAMENTO, CA 95814-3706 May 13, 1996 PETE VVILSON, Governor RECEIVED, qNANP.,IE DEPT, REVISED APPROPRIATIONS LIMIT DATA FOR LOCAL JURISDICTIONS This letter is to inform you that the Department of Finance has corrected the Price Factor, that is, the percentage change in per capita personal income, to be used in setting the 1996 - 1997 appropriation limit. The revised Price Factor is lower than the Price Factor given in Enclosure I of the letter, Price and Population Data for Local Jurisdictions sent to you on May 1, 1996. The old Price Factor was 5.21 percent. The new Price Factor is 4.67 percent. We have revised Enclosure I to reflect the new Price Factor and to show how the new price factor and population factor are used in computing an appropriations limit. We apologize for an), inconvenience this revision causes. But we do ask that you notify any affected offices within your jurisdiction of this revision. If you have any questions, please call us at (916) 323-4086. Sincerely, Linda Ga~e,o Chief Demographic Research Unit 91 $ L Street, 8th Floor Sacramento, CA 95814 May 13, 1996 Revised Enclosure I Ao Price Factor: Article XIII B specifies that local jurisdictions select their cost-of-living factor to compute their appropriation limit by a vote of their governing body. Local jurisdictions may select either the percentage change in California per capita personal income or the percentage change in the local assessment roll due to the addition of local nonresidential new construction. If the percentage change in per capita personal income is selected, the percentage changes to be used in setting the 1996-97 appropriation limit are: Per Capita Personal Income Fiscal Year (FY) Percentage change over prior year 1996-97 4.67 Bo Following is an example using sample population changes and the changes in. California per capita personal income as growth factors in computing a 1996-97 appropriations limit.* 1996-97: Per Capita Change = 4.67 percent · Population Change = 1.58 percent Per Capita converted to a ratio: 4.67 + 100 = 1.0467 100 Population converted to a ratio: 1.58+100 =1.0158 100 Calculation of factor for FY 96-97: 1.0467 x 1.0158 = 1.0632 * Conversion of the factor to a ratio eliminates minus numbers. (D 0~000000~0 000000000 · 0 -~- 0 · 0 0 81 - 0 ..,1~ c:'~ o .o mC) 0 0 lZ') ~.§§oooo §o, o~ 8o~ 0 0 0 0 0 O~ O0 O0 0 0.0 0 0~ O0 O0 0 O0 0 O0 O0 O0 0 O0 0 00000000000 00000. 00000~00000~00000 ~0000 0000~ 0 0 0 0 I'-, o 8 O0 0 0 0 0 O0 000 O0 0~0 00 0 0 00) 0 00~ 0000 0 x I- uJ o o§ ~! o o o o: 'lC)' 0 ~ 0 0 ( m ~o 0 0 0 o q ~o ~ o o ~ o o ~ o o o ~oo oe~oo =§ 0 0 o olio ~ ~j~. o ~llO ~0 00~ 0 ~ ..0 0mo 0 0 0 00 0 0 0 0 0 E' E E O3 0 0 ~