HomeMy WebLinkAbout15 - PH-1 - Adoption of FY 2017-18 Appropriations - 6/20/2017CITY COUNCIL AGENDA REPORT
MEETING DATE: JUNE 20, 2017 ITEM NUMBER: PFI -1
SUBJECT: ADOPTION OF FISCAL YEAR 2017-2018 APPROPRIATIONS LIMIT
DATE: JUNE 7, 2017
FROM: FINANCE DEPARTMENT /FINANCIAL PLANNING DIVISION
PRESENTATION BY: STEPHEN DUNIVENT, INTERIM FINANCE DIRECTOR
FOR FURTHER INFORMATION CONTACT: STEPHEN DUNIVENT, (714) 754-5243
RECOMMENDED ACTION
Adopt Resolution establishing the Fiscal Year 2017-2018 Appropriations Limit for the City of
Costa Mesa at $223,567,465 by using the County of Orange's population growth for
population adjustment, and the California per capita income growth for inflationary
adjustment.
BACKGROUND
Since the addition of Article XIII -B to the Constitution of the State of California in November
1979, the City has been required to establish annually an Appropriations Limit. This
appropriations limit determines the maximum amount of specific tax revenues which an
agency is allowed to spend. In June 1990, Article XIII -B and its implementing legislation
Chapter 1205/80, were modified by Proposition 111 and Senate Bill 88. The modifications
changed the annual adjustment factors for determining the Appropriations Limit. Beginning
with the calculation of the Fiscal Year 1990-1991 Appropriations Limit, the City may choose
one of the following factors to use for inflationary adjustment:
1) The growth in California per capita income; or
2) The growth in the non-residential assessed valuation due to new construction within
the City.
In addition, the City may choose to use either the population growth of the City or the
population growth within the County. These two adjustment factors (one for inflation and
one for population) are both annual elections for the City in determining its Appropriations
Limit for the following Fiscal Year. For the current year calculation, the City is electing to
use the population growth of the County of Orange rather than the population growth of the
City of Costa Mesa.
ANALYSIS
The methodology used to determine the City's Appropriations Limit is to multiply the inflation
and population adjustment factors by the prior year's Appropriations Limit. For Fiscal Year
2017-2018, the inflation and population figures provided by the State Department of Finance
are as follows:
California Per Capita Income Percentage Change 3.69%
County of Orange's Population Growth 0.69%
Since the growth in non-residential assessed valuation due to new construction is not
available at this time, the growth in California Per Capita Income must be used as the
inflationary factor. The City's Appropriations Limit for Fiscal Year 2017-2018 is calculated
at $223,567,465. This amount is the result of applying the 3.69% per capita personal income
factor and the 0.69% County of Orange population factor to the Fiscal Year 2016-2017
adopted Appropriations Limit of $214,145,081.
The total estimated revenues generated from general tax proceeds for Fiscal Year 2017-
2018 is $110,184,117. This estimate is $113,383,348 or 50.72% below the Appropriations
Limit for Fiscal Year 2017-2018.
ALTERNATIVES CONSIDERED
Section 7910 of the Government Code of the State of California requires the City to
establish an annual Appropriations Limit.
FISCAL REVIEW
The City is $113,383,348 or 50.72% below the proposed Fiscal Year 2017-2018
Appropriations Limit. Therefore, the City is well within its Appropriations Limit established
pursuant to Section 7910 of the Government Code of the State of California and will not
exceed this limit during Fiscal Year 2017-2018.
LEGAL REVIEW
The City Attorney has reviewed and approved the attached Resolution as to form.
CONCLUSION
Staff recommends the City adopt the Resolution determining the Fiscal Year 2017-2018
Appropriations Limit to be $223,567,465.
STEPHEN DUNIVENT
Interim Finance Director
Attachments: 1. Resolution No.17-xx FY17-18 Appropriations Limit
2. Calculation of the Appropriations Limit
2
Attachment 1
RESOLUTION NO. 17-xx
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA,
CALIFORNIA, DETERMINING AND ADOPTING THE APPROPRIATIONS LIMIT FOR
FISCAL YEAR 2017-2018, IN ACCORDANCE WITH ARTICLE XIII -B OF THE
CONSTITUTION OF THE STATE OF CALIFORNIA, AS AMENDED BY PROPOSITION
111 AND SENATE BILL 88.
THE CITY COUNCIL OF THE CITY OF COSTA MESA 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, 1979; and
WHEREAS, Article XIII -B was subsequently modified by Proposition 111 and Senate
Bill 88 (Chapter 60/90) at a general election held on June 5, 1990; and
WHEREAS, in accordance with Section 7910 of the Government Code of the State
of California, an annual appropriations limit must be established for this City effective for the
fiscal year beginning July 1, 2017; and
WHEREAS, the City has chosen to use the California per capita income percentage
change of 3.69% and the County's population growth rate of 0.69% as the factors to be used
in calculating its appropriations limit for Fiscal Year 2017-2018; and
WHEREAS, these factors are applied to the City's adopted appropriations limit for
Fiscal Year 2016-2017 in determining the City's appropriations limit for Fiscal Year 2017-
2018; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Costa
Mesa as follows:
The appropriations limit for Fiscal Year 2017-2018 is established at $223,567,465.
PASSED AND ADOPTED this 20th day of June, 2017.
Katrina Foley, Mayor
ATTEST: APPROVED AS TO FORM:
Brenda Green, City Clerk Thomas Duarte, City Attorney
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF COSTA MESA )
I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY
that the above and foregoing is the original of Resolution No. 17-xx and was duly passed
and adopted by the City Council of the City of Costa Mesa at a regular meeting held on
the 20th day of June, 2017, by the following roll call vote, to wit:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Seal of the
City of Costa Mesa this 21st day of June, 2017.
BRENDA GREEN, CITY CLERK
CITY OF COSTA MESA
CALCULATION OF APPROPRIATIONS LIMIT
FOR FY 2017-2018
The City's Appropriations Limit for FY 17-18 is calculated as follows:
Step 1 Appropriations Limit for FY 16-17
Multiply the FY 16-17 Appropriations Limit by the cumulative growth
factors for changes in the California per capita personal income and the
Step 2 population change for the City of Costa Mesa.
Appropriations Limit for FY 17-18
*CALCULATION OF CUMULATIVE GROWTH FACTORS:
Personal Income Factor
Orange County Population Change
Costa Mesa Population Change
*(1.0369 x 1.0069) _
Per capita converted to ratio (3.69+100/100)
Orange County Population converted to ratio (0.69+100/100)
Costa Mesa Population converted to ratio (-.05+100/100)
Attachment 2
$ 214,145,081
1.0440
$ 223,567,465
1.0369
1.0069
0.9995
1.0440
1.0369
1.0069
0.9995