HomeMy WebLinkAbout12 APPROPRIATION LIMIT FY '23-'24DocuSign Envelope ID: C4132333-6D58-4518-A322-B70AAF2BOE8F 12
Agenda Item
Reviewed: Ds
AGENDA REPORTCity Manager
Finance Director
MEETING DATE: JUNE 20, 2023
TO: MATTHEW S. WEST, CITY MANAGER
FROM: JENNIFER KING, FINANCE DIRECTOR/CITY TREASURER
SUBJECT: APPROPRIATION LIMIT FOR THE FISCAL YEAR 2023/24
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 Fiscal Year 2023/24 Proposed Budget as presented to the
City Council on June 20, 2023.
RECOMMENDATION:
1. Select the change in the assessment roll of the preceding year as the price factor for
adjusting the Fiscal Year 2023/24 Appropriation Limit.
2. Adopt Resolution No. 23-36 setting the appropriation limit for the Fiscal Year 2023/24 at
$118,286,797.
CORRELATION TO THE STRATEGIC PLAN:
The adoption of the Fiscal Year 2023/24 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 the proceeds of taxes and total appropriations. The base year was 1978/79,
DocuSign Envelope ID: C4132333-6D58-4518-A322-B70AAF2BOE8F
Appropriation Limit for the Fiscal Year 2023/24
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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. The Limit calculation is outlined as follows:
By a percentage equal to the increase from the preceding year in county or city
population (whichever is greater).
By a percentage equal to the change in per capita personal income in California
or the change in the assessment roll of the preceding year due to the addition of
local non-residential new construction (whichever is greater).
Exhibit "A" shows the calculation of the Appropriation Limit for Fiscal Year 2023/24. The
result shows that the City of Tustin is below its allowable appropriation limit for the Fiscal
Year 2023/24 by $54,164,926. The data used in computing the City's appropriation limit
is available for public inspection.
1.
Jennifer King
Finance Director/City Treasurer
David Faraone
Sr. Management Analyst
Attachments:
1. Exhibit A
2. Resolution No. 23-36
Sean Tran
Deputy Finance Director
Glenda Babbitt
Management Analyst I
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Appropriations Limit
City of Tustin
Fiscal Year 2023/24
AMOUNT
Last Year's Limit (2022/23) $109,904,672
Adjustment Factors
1. Population(') 0.9983
2. Change in Assessed Valuation(2) 1.0781
Total Adjustment Factor(') 1.0763
Total Adjustments 8,382,125
Appropriations Limit for Fiscal Year 2023/24 $118,286,7aZ
Appropriations Subject to Limit:
Proceeds of Taxes $64,121, 871
Minus Exclusions
Appropriations Subject to Limit $64,121,871
Fiscal Year 2023/24 Appropriations Limit 118,286,797
Less Appropriations Subject to the Limit 64,121,871
Difference Under the Limit $54,164,926
0)The population factor may be based on the change in the population of 1) the City; or 2)
the County of Orange, as provided by the State of California's Department of Finance. The
population factor adopted by the City for the current year's appropriation limit represents
the change in the population of the City of Tustin.
(2)The inflation factor may be based on 1) the change in per capita personal income for the
State of California as provided by the State of California's Department of Finance; or 2)
the change in assessed valuation due to new nonresidential construction within the City.
The inflation factor adopted by the City for the current year's appropriation limit represents
the change in assessed valuation.
MThe total adjustment factor is calculated by multiplying the population factor by the inflation
factor.
DocuSign Envelope ID: C4132333-6D58-4518-A322-B70AAF2BOE8F
RESOLUTION NO. 23-36
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA, DETERMINING AND ADOPTING AN
APPROPRIATION LIMIT FOR THE FISCAL YEAR 2023/24
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 on November 6, 1989; and
WHEREAS, an annual appropriation limit must be determined for this City effective
for the fiscal year beginning July 1, 2023; 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, 2023,
through June 30, 2024, is $118,286,797.
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 20t" day of June 2023.
AUSTIN LUMBARD,
Mayor
ATTEST:
ERICA YASUDA,
City Clerk
Resolution 23-36
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DocuSign Envelope ID: C4132333-6D58-4518-A322-B70AAF2BOE8F
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF TUSTIN )
I, Erica Yasuda, 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. 23-36 was duly
passed and adopted at a regular meeting of the Tustin City Council, held on the 20t" day
of June 2023, by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
ERICA YASUDA,
City Clerk
Resolution 23-36
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