HomeMy WebLinkAbout57 - PH-2 - Adoption of FY 2014-15 Appropriations - 6/17/2014CITY COUNCIL AGENDA REPORT
MEETING DATE: JUNE 17, 2014
ITEM NUMBER:
SUBJECT: ADOPTION OF FISCAL YEAR 2014-2015 APPROPRIATIONS LIMIT
DATE: MAY 30, 2014
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 2014-2015 Appropriations Limit for the City
of Costa Mesa at $191,787,464 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 2014-2015 the inflation and population figures provided by the State
Department of Finance are as follows:
California Per Capita Income Percentage Change -0.23%
County of Orange's Population Growth 0.93%
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 2014-2015 is calculated
at $191,787,464. This amount is the result of applying the -0.23% per capita personal
income factor and the 0.93% County of Orange population factor to the Fiscal Year 2013-
2014 adopted Appropriations Limit of $190,458,330.
The total estimated revenues generated from general tax proceeds for Fiscal Year 2014-
2015 is $97,507,000. This estimate is $94,280,464 or 49.2% below the Appropriations
Limit for Fiscal Year 2014-2015.
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 $94,280,464 or 49.2% below the proposed Fiscal Year 2014-2015
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 2014-2015.
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 2014-2015
Appropriations Limit to be $191,787,464.
STEPHEN DUNIVENT
Interim Finance Director
Attachments: 1. Resolution No. 14-15 Appropriations Limit
2. Calculation of the Appropriations Limit
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