HomeMy WebLinkAbout- - Adoption of FY 2010-11 Appropriations Li - 6/15/2010CITY COUNCIL AGENDA REPORT
MEETING DATE: June 15, 2010
ITEM NUMBER:
SUBJECT: ADOPTION OF FISCAL YEAR 2010-2011 APPROPRIATIONS LIMIT
DATE: JUNE 11, 2010
FROM: FINANCE DEPARTMENT /FINANCIAL PLANNING DIVISION
PRESENTATION BY: BOBBY YOUNG, BUDGET AND RESEARCH OFFICER
FOR FURTHER INFORMATION CONTACT: BOBBY YOUNG AT (714) 754-5241
RECOMMENDED ACTION
Adopt Resolution establishing the Fiscal Year 2010-2011 Appropriations Limit for the City of Costa
Mesa at $166,350,696 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 2010-2011,
the inflation and population figures provided by the State Department of Finance are as follows:
California Per Capita Income Percentage Change 0.97%
County of Orange's Population Growth 1.01%
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 2010-2011 is calculated at $166,350,696. This amount is the
result of applying the 0.97% per capita personal income factor and the 1.01% City of Costa Mesa
population factor to the Fiscal Year 2009-2010 adopted Appropriations Limit of $168,979,431.
The total estimated revenues generated from general tax proceeds for Fiscal Year 2010-2011 is
$71,579,000. This estimate is $94,771,696 or 56.97% below the Appropriations Limit for Fiscal
Year 2010-2011.
ALTERNATIVES CONSIDERED
None. 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 $94,771,696 or 56.97% below the proposed Fiscal Year 2010-2011 Appropriations
Limit. Therefore, the City is well within its Appropriation Limit established pursuant to Section
7910 of the Government Code of the State of California and will not exceed this limit during
Fiscal Year 2010-2011.
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 2010-2011
Appropriations Limit to be $166,350,696. The adoption of the Fiscal Year 2010-2011
Appropriations Limit is made on a provisional basis and may need to be revised when the figure for
growth in non-residential assessed valuation due to new construction becomes available from the
County of Orange.
BOBBY YOUNG
Budget & Research Officer
Attachments: Attachment 1 - Resolution — Fiscal Year 2010-2011 Appropriations Limit
Exhibit A — Calculation of the Appropriations Limit
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