HomeMy WebLinkAbout13 - PH-3A - Adoption of FY 2011-12 Appropriations - 6/21/2011CITY COUNCIL AGENDA REPORT
MEETING DATE: JUNE 21, 2011
ITEM NUMBER: .,PH -3(b)
SUBJECT: ADOPTION OF FISCAL YEAR 2011-2012 APPROPRIATIONS LIMIT
DATE: JUNE 17, 2011
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
of Costa Mesa at $171,719,781
population adjustment, and the
adjustment.
BACKGROUND
Fiscal Year 2011-2012 Appropriations Limit for the City
by using the County of Orange's population growth for
California per capita income growth for inflationary
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 2011-2012, the inflation and population figures provided by the State
Department of Finance are as follows:
California Per Capita Income Percentage Change 2.51%
County of Orange's Population Growth 0.70%
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 2011-2012 is calculated
at $171,719,781. This amount is the result of applying the 2.51% per capita personal
income factor and the 0.70% City of Costa Mesa population factor to the Fiscal Year
2010-2011 adopted Appropriations Limit of $166,350,696.
The total estimated revenues generated from general tax proceeds for Fiscal Year 2011-
2012 is $82,595,000. This estimate is $89,124,781 or 51.90% below the Appropriations
Limit for Fiscal Year 2011-2012.
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 $89,124,781 or 51.90% below the proposed Fiscal Year 2011-2012
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 2011-2012.
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 2011-2012
Appropriations Limit to be $171,719,781. The adoption of the Fiscal Year 2011-2012
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 YOJ
Budget & Research Officer
Attachments: Attachment 1 - Resolution — Fiscal Year 2011-2012 Appropriations Limit
Exhibit A — Calculation of the Appropriations Limit
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RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF COSTA MESA, CALIFORNIA, DETERMINING AND
ADOPTING THE APPROPRIATIONS LIMIT FOR FISCAL
YEAR 2011-2012, IN ACCORDANCE WITH ARTICLE
XIII -13 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, 2011; and
WHEREAS, the City has chosen to use the California per capita income
percentage change of 2.51% and the County's population growth rate of 0.70% as the
factors to be used in calculating its appropriations limit for Fiscal Year 2011-2012; and
WHEREAS, these factors are applied to the City's adopted appropriations limit
for Fiscal Year 2010-2011 in determining the City's appropriations limit for Fiscal Year
2011-2012;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Costa
Mesa as follows:
The appropriations limit for Fiscal Year 2011-2012 is established at
$171,719,781.00.
PASSED AND ADOPTED this 21st day of June, 2011.
Gary Monahan, Mayor
ATTEST:
APPROVED AS TO FORM:
Julie Folcik, City Clerk Thomas Duarte, City Attorney
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF COSTA MESA )
I, JULIE FOLCIK, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY
that the above and foregoing is the original of Resolution No. 11 -XX and was duly
passed and adopted by the City Council of the City of Costa Mesa at a regular meeting
held on the 21 st day of June, 2011, by the following roll call vote, to wit:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the
City of Costa Mesa this th day of June, 2011.
(SEAL)
JULIE FOLCIK, CITY CLERK
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CITY OF COSTA MESA
CALCULATION OF APPROPRIATIONS LIMIT
FOR FY 2011-2012
The City's Appropriations Limit for FY 11-12 is calculated as follows:
Step 1 Appropriations Limit for FY 10-11
Multiply the FY 10-11 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 11-12
*CALCULATION OF CUMULATIVE GROWTH FACTORS:
Personal Income Factor
Orange County Population Change
Costa Mesa Population Change
(1.0251 x 1.007) = *
Per capita converted to ratio (2.51 +100/100)
Orange County Population converted to ratio (0.70+100/100)
Costa Mesa Population converted to ratio (0.22+100/100)
EXHIBIT A
$ 166,350,696
1.0323 *
$ 171,719,781
1.0251
1.007
1.0022
1.0323
1.0251
1.007
1.0022