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Home My WebLink About15 APPROPRIATION LIMIT FOR FISCAL YEAR 2016/2017MEETING DATE: JUNE 21, 2016 TO: JEFFREY C. PARKER, CITY MANAGER FROM: JENNIFER LEISZ, ACTING FINANCE DIRECTOR SUBJECT: APPROPRIATION LIMIT FOR FISCAL YEAR 2016/2017 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 updated 2nd Year Budget as presented to the City Council on June 21, 2016. RECOMMENDATION: 1. Select the change in the California per Capita Personal Income as the price factor for adjusting the Fiscal Year 2016/2017 appropriations limit. 2. Adopt Resolution No. 16-37 setting the appropriation limit for Fiscal Year 2016/2017 at $82,940,408. 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 21, 2016 Appropriation Limit for FY 2016/17 Page 2 Exhibit "A" shows the calculation of the Appropriation Limit for each of the Fiscal Years 1987/1988 through 2016/2017. 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 $82,940,408. 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 2016/2017 by $24,912,908. P � Glenda Babbitt Management Analyst Attachments: Exhibit A Worksheet #1 Worksheet #2 Worksheet #3 Worksheet #4 Worksheet #5 Resolution No. 16-37 Sean ran Administrative Services Manager 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 1988-89 1.0466 1.0579 1.1072 1.1684 $16,649,876 1989-90 1.0519 1.0238 1.0769 1.2583 $17,930,838 1990-91 1.0421 1.0435 1.0874 1.3683 $19,498,555 1991-92 1.0414 1.0273 1.0698 1.4639 $20,860,143 1992-93 0.9936 1.0615 1.0547 1.5440 $22,001,327 1993-94 1.0272 1.0687 1.0978 1.6949 $24,152,367 1994-95 1.0071 1.0415 1.0489 1.7778 $25,333,288 1995-96 1.0472 1.0508 1.1004 1.9563 $27,876,693 1996-97 1.0467 1.0373 1.0857 2.1240 $30,266,894 1997-98 1.0467 1.0283 1.0763 2.2861 $32,576,913 1998-99 1.0415 1.0337 1.0766 2.4612 $35,072,257 1999-00 1.0453 1.0396 1.0867 2.6746 $38,112,807 2000-01 1.0491 1.0401 1.0912 2.9185 $41,587,510 2001-02 1.0782 1.0172 1.0967 3.2008 $45,610,895 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 2016-17 1.0537 1.0216 1.0765 5.8204 $82,940,408 15-16 Factors as reported by the State Department of Finance Per Capita Personal Income change over Prior Year: 5.37% Population Change: City of Tustin: 2.16% Orange County: 0.99% FY 2016-2017 Expenditure Limit: $82,940,408 FY 2016-2017 Proposed GF Budget: $58,027,500 Estimated (Over)/Under Limit: $24,912,908 Worksheet #1 User Fees Versus Cost Fiscal Year 2016-17 Based on 2016-17 Budget Projections on Administration: 4466 -Non -Residential Fees Sports: 4449 -Sports Fees 4720 -Sports Fee -Youth 4721 -Sports Fee -Tennis Classes: 4450-Classes/Cultural Arts 4711 -Day Camp Senior Programs: 4452 -Senior Classes Support Services: 4713 -CT Gym Rentals Tustin Youth Center: 3663 -Park and Building Rentals Difference Fees 300,000 132,000 432,000 672,000 -240,000 551,600 67,500 67,500 551,600 -484,100 280,450 0 0 280,450 -280,450 366,850 220,000 220,000 366,850 Total 1,034,000 3,741,800 -146,850 -2,707,800 6/162016 Page 2 of 10 862,050 15,000 15,000 862,050 -847,050 1,008,850 179,500 80,000 40,000 299,500 1,008,850 -709,350 672,000 300,000 132,000 432,000 672,000 -240,000 551,600 67,500 67,500 551,600 -484,100 280,450 0 0 280,450 -280,450 366,850 220,000 220,000 366,850 Total 1,034,000 3,741,800 -146,850 -2,707,800 6/162016 Page 2 of 10 Acct # 31xx Property Taxes 3130 AB1290 Pass Thru 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 3343 Planning Plan Check 3344 Planning Permit / Inspection 34xx License/Permits xxxx Fees & Other Permits 35xx Fines & Forfeitures 3660 Interest Income 36xx Use of property 37xx Rev from other Agencies 3772 Motor Vehicle License Fee 41xx Grants 44xx Sports Fees 44xx Class/Pec Fees 4xxx Other Recreation Fees 48xx Transfers In xxxx All Other Sources Sub Total Work Sheet #2 Calculation of Proceeds of Tax Fiscal Year 2016-17 Based on 2016-17 Budget Projections 100 -General Fund 200-CIP Fund 133-SCAQMD 134 -Asset Forfeiture Proceeds Non -Proceeds Proceeds Non -Proceeds Proceeds Non -Proceeds Proceeds Non -Proceeds ,156,400 $75,000 $23,844,400 $1,250,000 $400,000 $350,000 $150,000 $284,200 $175,000 $ 6,450,000 $1,854,000 $67,500 $103,800 $856,400 $290,700 $776,000 $1,003,400 $20,000 $90,000 $299,500 $300,000 $199,500 $1,188,500 $463,300 $14,700 $3,000,000 $100 $1,000 $100,000 $42,135,000 $7,512,600 $14,700 $3,000,000 $100 $0 $1,000 $100,000 Fund Total $49,647,600 Fund Total $3,014,700 Fund Total $100 Fund Total $101,000 6/162016 Page 3 of 10 Work Sheet #2 Calculation of Proceeds of Tax Fiscal Year 2016-17 Based on 2016-17 Budget Projections Sub Total $2,000 $0 $0 $0 $0 $0 $55,000 $155,000 Fund Total $2,000 Fund Total $0 Fund Total $0 Fund Total $210,000 6/162016 Page 4 of 10 138 -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 & Forfeitures 3660 Interest Income $2,000 $0 $55,000 36xx Use of property $140,000 37xx Rev from other Agencies 3772 Motor Vehicle License Fee 41xx County Grants 44xx Sports Fees 44xx Class/Pec Fees 44xx Service Charges 48xx Transfers In xxxx All Other Sources $15,000 Sub Total $2,000 $0 $0 $0 $0 $0 $55,000 $155,000 Fund Total $2,000 Fund Total $0 Fund Total $0 Fund Total $210,000 6/162016 Page 4 of 10 Acct # 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/Pec Fees 44xx Service Charges 48xx Transfers In xxxx All Other Sources Sub Total Work Sheet #2 Calculation of Proceeds of Tax Fiscal Year 2016-17 Based on 2016-17 Budget Projections 136 -Supplemental Law 120-CDBG 141-Landscape/Light Dist. 142 -Street Light Dist. Proceeds Non -Proceeds Proceeds Non -Proceeds Proceeds Non -Proceeds Proceeds Non -Proceeds 623,000 $550,000 $0 $0 $0 $0 $623,000 $550,000 $875,000 $0 Fund Total $0 Fund Total $0 Fund Total $1,173,000 Fund Total $875,000 6/162016 Page 5 of 10 Work Sheet #2 Calculation of Proceeds of Tax Fiscal Year 2016-17 Based on 2016-17 Budget Projections Sub Total $10,000 $896,000 $0 $1,101,000 $0 $874,200 $0 $1,893,500 Fund Total $906,000 Fund Total $1,101,000 Fund Total $874,200 Fund Total $1,893,500 6/162016 Page 6 of 10 181 -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/Pec Fees xxxx Service Charges / Cost Recovery $896,000 $762,500 $1,893,500 48xx Transfers In $1,101,000 xxxx All Other Sources Sub Total $10,000 $896,000 $0 $1,101,000 $0 $874,200 $0 $1,893,500 Fund Total $906,000 Fund Total $1,101,000 Fund Total $874,200 Fund Total $1,893,500 6/162016 Page 6 of 10 Work Sheet #2 Calculation of Proceeds of Tax Fiscal Year 2016-17 Based on 2016-17 Budget Projections 186-Oblg Peimb 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 $11,000 36xx Use of property 37xx Rev from other Agencies 3772 Motor Vehicle License Fee 41xx County Grants 44xx Sports Fees 44xx Class/Pec Fees xxxx Service Charges / Cost Recovery 48xx Transfers In xxxx All Other Sources $12,805,600 $8,500,000 Sub Total $11,000 $0 $0 $12,805,600 $0 $8,500,000 $0 $0 Fund Total $11,000 Fund Total $12,805,600 Fund Total $8,500,000 Totals: Proceeds Non -Proceeds Total Fund Totals $43,726,800 $37,387,900 $81,114,700 Interest Only $268,700 $0 $268,700 Fund Total $0 6/162016 Page 7 of 10 Worksheet #3 Appropriations Subject to Limit Fiscal Year 2016-17 Based on 2016-17 Budget Projections Amount Source A. Proceeds of Taxes $42,135,000 From Work Sheet #2 B. Exclusions C. Appropriations Subject to Limit $42,135,000 D. Current Year Limit $82,940,408 E. Over/(Under) Limit ($40,805,408) (A -B) From Work Sheet #5 M, 6/162016 Page 8 of 10 To Compute Limit to: 2003/04 01/01/02 01/01/03 2004/05 01/01/03 01/01/04 2005/06 01/01/04 01/01/05 2006/07 01/01/05 01/01/06 2007/08 01/01/06 01/01/07 2008/09 01/01/07 01/01/08 2009/10 01/01/08 01/01/09 2010/11 01/01/09 01/01/10 2011/12 01/01/10 01/01/11 2012/13 01/01/11 01/01/12 2013/14 01/01/12 01/01/13 2014/15 01/01/13 01/01/14 2015/16 01/01/14 01/01/15 2016/17 01/01/15 01/01/16 Increase 1.65% 1.42% 1.13% 0.83% 0.84% 1.02% 1.02% 1.01% 0.70% 0.89% 0.78% 0.93% 1.08% 0.99% 6/162016 Page 9 of 10 Worksheet #4 Population Increase Fiscal Year 2016-17 Based on 2016-17 Budget Projections County 1 population Increase Population 68,898 2,928,793 69,753 1.24% 2,977,151 69,712 2,973,732 70,339 0.90% 3,015,888 70,408 3,021,203 70,871 0.66% 3,055,493 70,617 3,045,682 71,767 1.63% 3,071,035 71,754 3,071,222 72,542 1.10% 3,097,008 72,348 3,088,594 74,218 2.58% 3,120,181 73,743 3,106,872 74,825 1.47% 3,138,438 74,736 3,134,276 75,773 1.39% 3,165,962 75,488 3,008,356 75,781 0.39% 3,029,408 75,772 3,027,832 76,567 1.05% 3,054,832 76,618 3,056,919 77,983 1.78% 3,080,859 78,071 3,084,324 78,360 0.37% 3,113,088 78,347 3,113,306 79,601 1.60% 3,146,789 80,968 3,151,043 82,717 2.16% 3,182,175 Increase 1.65% 1.42% 1.13% 0.83% 0.84% 1.02% 1.02% 1.01% 0.70% 0.89% 0.78% 0.93% 1.08% 0.99% 6/162016 Page 9 of 10 Worksheet #5 Appropriations Limit Fiscal Year 2016-17 Based on 2016-17 Budget Projections Amount Source A. Last Years Limit $77,049,230 From Exhibit A B. Adjustment Factors 1. Population 1.0216 2. Price factor 1.0537 1.0765 C. Annual Adjustments $5,891,178 D. Other Adjustments: $0 Sub Total $5,891,178 Dept of Finance Dept of Finance (Bl*B2) (B*A) (C+D) E. Current Year Limit $82,940,408 (A+E) 6/16/2016 Page 10 of 10 RESOLUTION NO. 16-37 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, DETERMINING AND ADOPTING AN APPROPRIATION LIMIT FOR THE FISCAL YEAR 2016- 2017 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, 2016; 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, 2016 through June, 2017 is $82,940,408. 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 21st day of June, 2016. Resolution 16-37 Page 1 of 2 JOHN NIELSEN, Mayor ERICA N. RABE, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) I, Erica N. Rabe, 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. 16-37 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 21 sc day of June, 2016, by the following vote: moll] ► [MI U�iIAdil:l:4:Lwd:6� moll] ► [MI U�iIAdil:l:4:a►[�7 � moll] ► [MI IdiIAdi1:l4:L1:1.1IF_1101100 moll] ► [MI U�iIAdil:l:4:L1:MA►10111111111111111111 ERICA N. RABE, City Clerk Resolution 16-37 Page 2 of 2