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Home My WebLink About10 APPROPRIATION LIMIT FOR FISCAL YEAR 2018/2019MEETING DATE: JUNE 5, 2018 TO: JEFFREY C. PARKER, CITY MANAGER FROM: JOHN A. BUCHANAN, DIRECTOR OF FINANCE SUBJECT: APPROPRIATION LIMIT FOR FISCAL YEAR 2018/2019 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 5, 2018. RECOMMENDATION: 1. Select the change in the California per Capita Personal Income as the price factor for adjusting the Fiscal Year 2018/2019 appropriations limit. 2. Adopt Resolution No. 18-42 setting the appropriation limit for Fiscal Year 2018/2019 at $90,391,756. CORRELATION TO THE STRATEGIC PLAN The adoption of the fiscal year 2018/2019 Appropriation Limit implements strategy number three (3) of Goal C. 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. City Council Agenda Report June 5, 2018 Appropriation Limit for FY 2018/19 Page 2 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. Exhibit "A" shows the calculation of the Appropriation Limit for each of the Fiscal Years 1987/1988 through 2018/2019. 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 $90,391,756. 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 2018/2019 by $26,047,410. John A. Buchanan for of Finance Attachments: Exhibit A Worksheet #1 Worksheet #2 Worksheet #3 Worksheet #4 Worksheet #5 Resolution No. 18-42 Sean Tran Deputy Finance Director —Admin. Svs. Glenda Babbitt Management Analyst I Exhibit A City of Tustin Appropriations Limits Appropriations Limit for the Base Year Ending June 30, 1987: $14,249,831 18-19 Factors as reported by the State Department of Finance Per Capita Personal Income change over Prior Year: 3.67% Population Change: City of Tustin: 0.06% Orange County: 0.69% FY 2018-2019 Expenditure Limit: $90,391,756 FY 2018-2019 Proposed GF Budget: $64,344,346 Estimated (Over)/Under Limit: $26,047,410 5/30/2018 Page 1 of 11 (a) (b) (a)x(b) Per Capita City/County Current P. Income Population Calculation Cumulative Amended Fiscal Year Change Change Factor Factor Limit 1987-88 1.0347 1.0199 1.0553 1.0553 $15,037,847 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 2017-18 1.0369 1.0069 1.0441 6.0769 $86,594,316 2018-19 1.0367 1.0069 1.0439 6.3434 $90,391,756 18-19 Factors as reported by the State Department of Finance Per Capita Personal Income change over Prior Year: 3.67% Population Change: City of Tustin: 0.06% Orange County: 0.69% FY 2018-2019 Expenditure Limit: $90,391,756 FY 2018-2019 Proposed GF Budget: $64,344,346 Estimated (Over)/Under Limit: $26,047,410 5/30/2018 Page 1 of 11 Worksheet #1 User Fees Versus Cost Fiscal Year 2018-19 Based on 2018-19 Budget Projections Program Fees Expenses Difference Tax/(non-Tax) Parks & Recreation Services Administration: 1,084,500 4466 -Non -Residential Fees 16,000 16,000 1,0.84,500 -1,068,500 Sports: 1,063,796 4449 -Sports Fees 160,000 4720 -Sports Fee -Youth 80,000 4721 -Sports Fee -Tennis 45,000 285,000 1,063,796 -778,796 Classes: 801,775 4450-Classes/Cultural Arts 325,000 4711 -Day Camp 133,000 458,000 801,775 -343,775 Senior Programs: 550,800 4452 -Senior Classes 73,500 73,500 550,800 -477,300 Support Services: 344,950 4713 -CT Gym Rentals 0 0 344,950 -344,950 Tustin Youth Center: 398,930 3663 -Park and Building Rentals 295,000 295,000 398,930 -103,930 Total 1,127,500 4,244,751 -3,117,251 5/30/2018 Page 2 of 11 Work Sheet #2 Calculation of Proceeds of Tax Fiscal Year 2018-19 Based on 2018-19 Budget Projections Sub Total $48,193,300 $14,967,660 $0 $2,456,440 $1,000 $95,900 $0 $0 Fund Total $63,160,960 Fund Total $2,456,440 Fund Total $96,900 Fund Total $0 5/30/2018 Page 3 of 11 100 -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 $11,717,700 3130 AB1290 Pass Thru $110,000 32xx Franchise Fees $1,961,000 3330 Sales Tax $25,170,600 3331 Transient Occupancy Tax $1,600,000 3332 Business License $410,000 3333 Real Property Tax $525,000 3334 New Const Tax $75,000 3340 Prop 172 -Sales Tax $330,000 3343 Planning Plan Check $115,030 3344 Planning Permit / Inspection $209,235 34xx License/Permits $1,768,297 xxxx Fees & Other Permits $327,700 35xx Fines Forfeitures $976,000 3660 Interest Income $325,000 $1,000 36xx Use of property $1,652,113 37xx Rev from other Agencies $106,000 $95,900 3772 Motor Vehicle License Fee $7,930,000 41xx Grants $160,000 44xx Sports Fees $285,000 44xx Class/Pec Fees $325,000 4xxx Other Recreation Fees $206,500 48xx Transfers In $5,123,785 xxxx All Other Sources $1,752,000 $2,456,440 Sub Total $48,193,300 $14,967,660 $0 $2,456,440 $1,000 $95,900 $0 $0 Fund Total $63,160,960 Fund Total $2,456,440 Fund Total $96,900 Fund Total $0 5/30/2018 Page 3 of 11 Work Sheet #2 Calculation of Proceeds of Tax Fiscal Year 2018-19 Based on 2018-19 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 & Forfeitures 3660 Interest Income $25,000 $15,000 $50,000 36xx Use of property $223,400 37xx Rev from other Agencies $1,835,900 $2,007,200 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 $93,600 Sub Total $0 $0 $25,000 $1,835,900 $15,000 $2,100,800 $50,000 $223,400 Fund Total $0 Fund Total $1,860,900 Fund Total $2,115,800 Fund Total $273,400 5/30/2018 Page 4 of 11 Work Sheet #2 Calculation of Proceeds of Tax Fiscal Year 2018-19 Based on 2018-19 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 $623,000 $900,000 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 $10,000 36xx Use of property 37xx Rev from other Agencies $176,000 $1,639,139 3772 Motor Vehicle License Fee 41xx County Grants 44xx Sports Fees 44xx Class/Rec Fees 44xx Service Charges 48xx Transfers In $491,000 xxxx All Other Sources Sub Total $0 $176,000 $0 $1,639,139 $623,000 $491,000 $900,000 $10,000 Fund Total $176,000 Fund Total $1,639,139 Fund Total $1,114,000 Fund Total $910,000 5/30/2018 Page 5 of 11 Work Sheet #2 Calculation of Proceeds of Tax Fiscal Year 2018-19 Based on 2018-19 Budget Projections Sub Total $10,000 $1,074,300 $0 $1,101,000 $0 $991,100 $0 $2,884,000 Fund Total $1,084,300 Fund Total $1,101,000 Fund Total $991,100 Fund Total $2,884,000 5/30/2018 Page 6 of 11 181 -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 $240,000 3772 Motor Vehicle License Fee 41xx County Grants 44xx Sports Fees 44xx Class/Rec Fees xxxx Service Charges / Cost Recovery $1,074,300 $751,100 $ 2,884,000 48xx Transfers In $1,101,000 xxxx All Other Sources Sub Total $10,000 $1,074,300 $0 $1,101,000 $0 $991,100 $0 $2,884,000 Fund Total $1,084,300 Fund Total $1,101,000 Fund Total $991,100 Fund Total $2,884,000 5/30/2018 Page 6 of 11 Work Sheet #2 Calculation of Proceeds of Tax Fiscal Year 2018-19 Based on 2018-19 Budget Projections 186-Oblg Reimb Frm Successor Agncy 187 -Backbone Fee Fund 189 -Land Held for Resale 140 -Road Maint & Rehab Alloc 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 $375,000 36xx Use of property 37xx Rev from other Agencies $1,367,900 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 $2,800,000 Sub Total $11,000 $0 $0 $0 $375,000 $2,800,000 $0 $1,367,900 Fund Total $11,000 Fund Total $0 Fund Total $3,175,000 Fund Total $1,367,900 171- Solid Waste 129 - Cable PEG Fees Acct # Description Proceeds Non -Proceeds Proceeds Non -Proceeds Proceeds Non -Proceeds Proceeds Non -Proceeds 3 1x Property Taxes 32xx Franchise Fees $300,000 $130,000 3330 Sales Tax 3331 Transient Occupancy Tax 3332 Business License 3333 Real Property Tax 5/30/2018 Page 7 of 11 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 xxxx Service Charges / Cost Recovery 48xx Transfers In xxxx All Other Sources Sub Total Work Sheet #2 Calculation of Proceeds of Tax Fiscal Year 2018-19 Based on 2018-19 Budget Projections $10,000 $0 $310,000 $0 $130,000 $0 $0 $0 $0 Fund Total $310,000 Fund Total $130,000 Fund Total $0 Fund Total $0 Totals: Proceeds Non -Proceeds Total Fund Totals $50,203,300 $34,654,539 $84,857,839 Interest Only $812,000 $10,000 $822,000 5/30/2018 Page 8 of 11 Worksheet #3 Appropriations Subject to Limit Fiscal Year 2018-19 Based on 2018-19 Budget Projections Amount Source A. Proceeds of Taxes $48,193,300 From Work Sheet #2 B. Exclusions $0 C. Appropriations Subject to Limit $48,193,300 D. Current Year Limit $90,391,756 E. Over/(Under) Limit ($42,198,456) (A -B) From Work Sheet #5 5/30/2018 Page 9 of 11 Worksheet #4 Population Increase Fiscal Year 2018-19 Based on 2018-19 Budget Projections 5/30/2018 Page 10 of 11 County To Compute Limit to: City population Increase Population Increase 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% 2015/16 01/01/14 78,347 3,113,306 01/01/15 79,601 1.60% 3,146,789 1.08% 2016/17 01/01/15 80,968 3,151,043 01/01/16 82,717 2.16% 3,182,175 0.99% 2017/18 01/01/16 82,015 3,171,408 01/01/17 82,372 0.44% 3,193,280 0.69% 2018/19 01/01/17 82,291 3,198,224 01/01/18 82,344 0.06% 3,220,361 0.69% 5/30/2018 Page 10 of 11 Worksheet #5 Appropriations Limit Fiscal Year 2018-19 Based on 2018-19 Budget Projections Amount Source A. Last Years Limit $86,594,316 From Exhibit A B. Adjustment Factors 1. Population 1.0069 2. Price factor 1.0367 1.0439 Dept of Finance Dept of Finance (B1*B2) C. Annual Adjustments $3,797,440 (B*A) D. Other Adjustments: $0 Sub Total $3,797,440 (C+D) E. Current Year Limit $90,391,756 (A+E) 5/30/2018 Page 11 of 11 RESOLUTION NO. 18-42 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, DETERMINING AND ADOPTING AN APPROPRIATION LIMIT FOR THE FISCAL YEAR 2018- 2019 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 1, 2018; 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 1, 2018 through June 30, 2019 is $90,391,756. 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 5th day of June, 2018. Resolution 18-42 Page 1 of 2 ELWYN A. MURRAY, Mayor ERICA RABE, City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) I, Erica 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. 18-42 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 5th day of June, 2018, by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: ERICA RABE, City Clerk Resolution 18-42 Page 2 of 2