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Home My WebLink About10 APPROPRIATION LIMIT FOR FISCAL YEAR 2015/2016 *r'G 1Y O Agenda Item 1 0 m4, Reviewed: AGENDA REPORT City Manager ' tFinance Director a &St MEETING DATE: JUNE 16, 2015 TO: JEFFREY C. PARKER, CITY MANAGER FROM: PAMELA ARENDS-KING, FINANCE DIRECTOR / CITY TREASURER SUBJECT: APPROPRIATION LIMIT FOR FISCAL YEAR 2015/2016 SUMMARY: Article XIII B of the State Constitution requires each City to annually adopt a limit on appropriations for all governmental funds. The following recommendation and attached worksheets are based on the proposed budget as presented to the City Council on May 20, 2015 with subsequent revisions. RECOMMENDATION: 1. Select the change in the California per Capita Personal Income as the price factor for adjusting the Fiscal Year 2015/2016 appropriations limit. 2. Adopt Resolution No. 15-32 setting the appropriation limit for Fiscal Year 2015/2016 at $77,049,230. FISCAL IMPACT: None. BACKGROUND: Article XIII B 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 of 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 local growth patterns. It also required a review of the Limit calculation as part of the annual audit process. City Council Agenda Report June 16, 2015 Appropriation Limit for FY 2015/16 Page 2 Exhibit "A" shows the calculation of the Appropriation Limit for each of the Fiscal Years 1987/1988 through 2015/2016. Worksheets #1-5 go through the various calculations that are required in conformance with the League of California Cities uniform guidelines for calculating the annual appropriation limit. Worksheet #5 goes through the steps necessary to calculate the current limit of $77,049,230. Worksheet #3 carries forward the proceeds of taxes from Worksheet #2 and compares them with the current year's limit from Worksheet #5. The result shows the City of Tustin is below its allowable spending limit for Fiscal Year 2015/2016 by $22,716,530. 062/4 Pamela Arends-King c Sean Tran Finance Director/ City Treasurer Administrative Services Manager Attachment Exhibit A Worksheet#1 Worksheet#2 Worksheet#3 Worksheet#4 Worksheet#5 Resolution No. 15-32 Exhibit A City of Tustin Appropriations Limits Appropriations Limit for the Base Year Ending June 30, 1987: $14,249,831 (a) (b) (a)x(b) Per Capita City/County Current P. Income Population Calculation Cumulative Amended • Fiscal Year Change Change Factor Factor Limit 2002-03 0.9873 1.0143 1.0014 3.2053 $45,675,589 2003-04 1.0231 1.0124 1.0358 3.3201 $47,310,156 2004-05 1.0328 1.0090 1.0421 3.4598 $49,301,686 2005-06 1.0526 1.0113 1.0645 3.6829 $52,481,368 2006-07 1.0396 1.0163 1.0565 3.8912 $55,448,952 2007-08 1.0442 1.0110 1.0557 4.1079 $58,536,694 2008-09 1.0429 1.0258 1.0698 4.3946 $62,622,954 2009-10 1.0062 1.0147 1.0210 4.4869 $63,937,481 2010-11 0.9746 1.0139 0.9881 4.4337 $63,179,627 2011-12 1.0251 1.0039 1.0291 4.5627 $65,018,020 2012-13 1.0377 1.0105 1.0486 4.7845 $68,177,626 2013-14 1.0512 1.0178 , 1.0699 5.1189 $72,944,017 2014-15 0.9977 1.0037 1.0014 5.1261 $73,045,518 2015-16 1.0382 1.0160 1.0548 5.4070 $77,049,230 15-16 Factors as reported by the State Department of Finance Per Capita Personal Income change over Prior Year: 3.82% Population Change: City of Tustin: 1.60% Orange County: 1.08% FY 2015-2016 Expenditure Limit: $77,049,230 FY 2015-2016 Proposed GF Budget: $54,332,700 Estimated (Over)/Under Limit: $22,716,530 Worksheet #1 User Fees Versus Cost Fiscal Year 2015-16 Based on 2015-16 Budget Projections Difference Program Fees Expenses Tax/(non-Tax) Parks & Recreation Services Administration: 804,200 4466-Non-Residential Fees 15,000 15,000 804,200 -789,200 Sports: 961,900 4449-Sports Fees 179,500 4720-Sports Fee-Youth 96,000 4721-Sports Fee-Tennis 40,000 315,500 961,900 -646,400 Classes: 610,800 4450-Classes/Cultural Arts 290,000 4711-Day Camp 127,500 417,500 610,800 -193,300 Senior Programs: 463,200 4452-Senior Classes 67,500 67,500 463,200 -395,700 Support Services: 266,700 4713-CT Gym Rentals 0 0 266,700 -266,700 Tustin Youth Center: 348,200 3663-Park and Building Rentals 243,000 243,000 348,200 -105,200 Total 1,058,500 3,455,000 -2,396,500 6/11/2015 Page 2 of 10 Work Sheet#2 Calculation of Proceeds of Tax Fiscal Year 2015-16 Based on 2015-16 Budget Projections 100-General Fund 200-CIP Fund 133-SCAQMD 134-Asset Forfeiture Acct# Description Proceeds Non-Proceeds Proceeds Non-Proceeds Proceeds Non-Proceeds Proceeds Non-Proceeds 31xx Property Taxes $8,842,700 3130 AB1290 Pass Thru $75,000 32xx Franchise Fees $1,779,000 3330 Sales Tax $24,412,000 3331 Transient Occupancy Tax $1,250,000 3332 Business License $405,000 3333 Real Property Tax $310,000 3334 New Const Tax $150,000 3340 Prop 172-Sales Tax $284,200 3343 Planning Plan Check $119,700 3344 Planning Permit /Inspection $196,800 34xx License/Permits $1,582,300 xxxx Fees S Other Permits $124,200 35xx Fines & Forfeitures $710,000 3660 Interest Income $175,000 $14,700 $100 $1,000 36xx Use of property $1,005,000 37xx Rev from other Agencies $2,350,000 $1,910,000 $82,000 3772 Motor Vehicle License Fee $5,940,000 41xx Grants $48,000 $0 44xx Sports Fees $315,500 44xx Class/Rec Fees $290,000 4xxx Other Recreation Fees $438,000 48xx Transfers In $910,500 xxxx All Other Sources $3,756,400 $1,500,000 $100,000 Sub Total $41,843,900 $13,625,400 $14,700 $3,410,000 $100 $82,000 $1,000 $100,000 Fund Total $55,469,300 Fund Total $3,424,700 Fund Total $82,100 Fund Total $101,000 6/11/2015 Page 3 of 10 Work Sheet#2 Calculation of Proceeds of Tax Fiscal Year 2015-16 Based on 2015-16 Budget Projections 138-Measure M 139-Measure M2 130-Gas Tax 131/132-Park development Acct# • Description Proceeds Non-Proceeds Proceeds Non-Proceeds Proceeds Non-Proceeds Proceeds Non-Proceeds 31xx Property Taxes 32xx Franchise Fees 3330 Sales Tax 3331 Transient Occupancy Tax 3332 Business License 3333 Real Property Tax 3334 New Const Tax 3340 Prop 172-Sales Tax 34xx License/Permits 35xx Fines d Forfeitures 3660 Interest Income $2,000 $0 $55,000 36xx Use of property $128,000 37xx Rev from other Agencies $3,755,800 $1,657,800 3772 Motor Vehicle License Fee 41xx County Grants 44xx Sports Fees 44xx Class/Rec Fees 44xx Service Charges 48xx Transfers In xxxx All Other Sources $15,000 Sub Total $2,000 $0 $0 $3,755,800 $0 $1,657,800 $55,000 $143,000 Fund Total $2,000 Fund Total $3,755,800 Fund Total $1,657,800 Fund Total $198,000 6/11/2015 Page 4 of 10 Work Sheet#2 Calculation of Proceeds of Tax Fiscal Year 2015-16 Based on 2015-16 Budget Projections 136-Supplemental Law 120-CDBG 141-Landscape/Light Dist. 142-Street Light Dist. Acct# Description Proceeds Non-Proceeds Proceeds Non-Proceeds Proceeds Non-Proceeds Proceeds Non-Proceeds 31xx Property Taxes $540,000 $850,000 32xx Franchise Fees 3330 Sales Tax 3331 Transient Occupancy Tax 3332 Business License 3333 Real Property Tax 3334 New Const Tax 3340 Prop 172-Sales Tax 34xx License/Permits 35xx Fines & Forfeitures 3660 Interest Income 36xx Use of property 37xx Rev from other Agencies $173,500 $552,300 3772 Motor Vehicle License Fee 41xx County Grants 44xx Sports Fees 44xx Class/Rec Fees 44xx Service Charges 48xx Transfers In $745,200 xxxx All Other Sources Sub Total $0 $173,500 $0 $552,300 $540,000 $745,200 $850,000 $0 Fund Total $173,500 Fund Total $552,300 Fund Total $1,285,200 Fund Total $850,000 6/11/2015 Page 5 of 10 Work Sheet#2 Calculation of Proceeds of Tax Fiscal Year 2015-16 Based on 2015-16 Budget Projections 181-Workers Comp. 182-Liability Fund 184-Equipment Replacement 185-Information Technology Acct# Description Proceeds Non-Proceeds Proceeds Non-Proceeds Proceeds Non-Proceeds Proceeds Non-Proceeds 31xx Property Taxes 32xx Franchise Fees 3330 Sales Tax 3331 Transient Occupancy Tax 3332 Business License 3333 Real Property Tax 3334 New Const Tax 3340 Prop 172-Sales Tax • 34xx License/Permits 35xx Fines & Forfeitures 3660 Interest Income $10,000 36xx Use of property 37xx Rev from other Agencies $111,700 3772 Motor Vehicle License Fee 41xx County Grants 44xx Sports Fees 44xx Class/Rec Fees xxxx Service Charges/Cost Recovery $877,100 $762,500 $1,837,900 48xx Transfers In $1,546,500 xxxx All Other Sources Sub Total $10,000 $877,100 $0 $1,546,500 $0 $874,200 $0 $1,837,900 Fund Total $887,100 Fund Total $1,546,500 Fund Total $874,200 Fund Total $1,837,900 6/11/2015 Page 6 of 10 Work Sheet#2 Calculation of Proceeds of Tax Fiscal Year 2015-16 Based on 2015-16 Budget Projections 186-Oblg Reimb Frm Successor Agncy 187-Backbone Fee Fund 189-Land Held for Resale Acct# Description Proceeds Non-Proceeds Proceeds Non-Proceeds Proceeds Non-Proceeds Proceeds Non-Proceeds 31xx Property Taxes 32xx Franchise Fees 3330 Sales Tax 3331 Transient Occupancy Tax 3332 Business License 3333 Real Property Tax 3334 New Const Tax 3340 Prop 172-Sales Tax 34xx License/Permits 35xx Fines &Forfeitures 3660 Interest Income 36xx Use of property 37xx Rev from other Agencies 3772 Motor Vehicle License Fee 41xx County Grants 44xx Sports Fees 44xx Class/Rec Fees xxxx Service Charges /Cost Recovery 48xx Transfers In xxxx All Other Sources $10,305,600 $0 Sub Total $0 $0 $0 $10,305,600 $0 $0 $0 $0 Fund Total $0 Fund Total $10,305,600 Fund Total $0 Fund Total $0 Totals: Proceeds Non-Proceeds Total Fund Totals $43,316,700 $39,686,300 $83,003,000 Interest Only $257,700 $0 $257,700 6/11/2015 Page 7 of 10 Worksheet#3 Appropriations Subject to Limit Fiscal Year 2015-16 Based on 2015-16 Budget Projections Amount Source A. Proceeds of Taxes $41,843,900 From Work Sheet #2 B. Exclusions $0 C. Appropriations Subject to Limit $41,843,900 (A-B) D. Current Year Limit $77,049,230 From Work Sheet #5 E. Over/(Under) Limit ($35,205,330) (C-D) 6/11/2015 Page 8 of 10 Worksheet#4 Population Increase Fiscal Year 2015-16 Based on 2015-16 Budget Projections County To Compute Limit to: City population Increase Population Increase 2001/02 01/01/00 68,029 2,864,827 01/01/01 69,199 1.72% 2,922,837 2.02% 2002/03 01/01/01 68,102 2,878,578 01/01/02 69,078 1.43% 2,937,958 2.06% 2003/04 01/01/02 68,898 2,928,793 01/01/03 69,753 1.24% 2,977,151 1.65% 2004/05 01/01/03 69,712 2,973,732 01/01/04 70,339 0.90% 3,015,888 1.42% 2005/06 01/01/04 70,408 3,021,203 01/01/05 70,871 0.66% 3,055,493 1.13% 2006/07 01/01/05 70,617 3,045,682 01/01/06 71,767 1.63% 3,071,035 0.83% 2007/08 01/01/06 71,754 3,071,222 01/01/07 72,542 1.10% 3,097,008 0.84% 2008/09 01/01/07 72,348 3,088,594 01/01/08 74,218 2.58% 3,120,181 1.02% 2009/10 01/01/08 73,743 3,106,872 01/01/09 74,825 1.47% 3,138,438 1.02% 2010/11 01/01/09 74,736 3,134,276 01/01/10 75,773 1.39% 3,165,962 1.01% 2011/12 01/01/10 75,488 3,008,356 01/01/11 75,781 0.39% 3,029,408 0.70% 2012/13 01/01/11 75,772 3,027,832 01/01/12 76,567 1.05% 3,054,832 0.89% 2013/14 01/01/12 76,618 3,056,919 01/01/13 77,983 1.78% 3,080,859 0.78% 2014/15 01/01/13 78,071 3,084,324 01/01/14 78,360 0.37% 3,113,088 0.93% 6/11/2015 Page 9 of 10 Worksheet#5 Appropriations Limit Fiscal Year 2015-16 Based on 2015-16 Budget Projections • Amount Source A. Last Years Limit $73,045,518 From Exhibit A B. Adjustment Factors 1. Population 1.0160 Dept of Finance 2. Price factor 1.0382 Dept of Finance 1.0548 (B1*B2) C. Annual Adjustments $4,003,712 (B*A) D. Other Adjustments: $0 Sub Total $4,003,712 (C+b) E. Current Year Limit $77,049,230 (A+E) 6/11/2015 Page 10 of 10 RESOLUTION NO. 15-32 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, DETERMINING AND ADOPTING AN APPROPRIATION LIMIT FOR THE FISCAL YEAR 2015-2016 IN ACCORDANCE WITH ARTICLE XIII B OF THE CONSTITUTION OF THE STATE OF CALIFORNIA, AND SECTION 7910 OF THE GOVERNMENT CODE The City Council of the City of Tustin does hereby resolve as follows: WHEREAS, Article XIII B was added to the Constitution of the State of California at a general election held November 6, 1989; and WHEREAS, an annual appropriation ' limit must be determined for this City effective for the fiscal year beginning July, 2015; 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 XIII B of the Constitution of the State of California, and Section 7910 of the Government Code, and as set forth in detail in the Attached Exhibit "A", that the appropriation limit for the fiscal year beginning July, 2015 through June, 2016 is $77,049,230. Section 2: The appropriation limit shall not be exceeded in the adopted budget or 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 16TH day of June, 2015. Resolution 15-32 Page 1 of 2 CHARLES E. PUCKETT, Mayor JEFFREY C. PARKER, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN I, Jeffrey C. Parker, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 15-32 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 16TH day of June, 2015, by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: JEFFREY C. PARKER, City Clerk • Resolution 15-32 Page 2 of 2