The URL can be used to link to this page

Home My WebLink About03 - FY2014-15 Appropriations LimitCITY OF NEWPORT BEACH City Council Staff Report June 10, 2014 Agenda Item No. 3. TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Dan Matusiewicz, Finance Director — (949) 644-3123, dmatusiewicz@newportbeachca.gov PREPARED BY: Susan Giangrande, Budget Manager PHONE: (949) 644-3128 TITLE: Adoption of Fiscal Year 2014-15 Appropriations Limit ABSTRACT: As a governmental entity, the city is subject to the Gann Appropriations Limit Initiative. Under the Gann Limit, a maximum spending threshold is established for tax -supported government services thereby limiting the amount of annual appropriation of tax proceeds. The limit is adjusted annually for changes in population combined with the change in California per capita personal income and must be adopted by Resolution. For Fiscal Year 2014-15, applicable tax proceeds are estimated at $137.3 million. The City's Gann appropriation limit totals $159.7 million. Therefore the City is more than $22 million under the Gann Spending Limit. RECOMMENDATION: Adopt Resolution No. 2014-47, A Resolution of the City Council of the City of Newport Beach Determining and Establishing an Appropriations (Gann) Limit for Fiscal Year 2014-15 in Accordance with Article XIIIB of the California Constitution and Government Code Section 7910, in the amount of $159,687,483. FUNDING REQUIREMENTS: There is no fiscal impact related to this item. DISCUSSION: Article XIIIB of the California Constitution specifies that appropriations of government entities may increase annually only by a limited amount, primarily to allow for population increases and inflation. Each local government is required to establish its appropriations limit by resolution each year at a regularly scheduled or noticed special meeting of the City Council. The attached resolution submitted for Council approval fulfills this requirement. 22 The calculation of the City's Appropriation Limit for Fiscal Year 2014-15 is: FY 2013-14 AppropriationsLimit $159,433,819 111 ati on Adj ustment Factor -0.23 Popul ation Adj ustment Factor2 0.39 FY 2014-15A ppropriationsLimit $159,687,483 'Based on California per capita income increases as provided by the California Department of Finance, May 2014. 2Based on Newport Beach population growth as provided by the California Department of Finance, May 2014. The City of Newport Beach estimated proceeds from taxes for Fiscal Year 2014-15 is $137,276,796, or $22,410,687 under the Appropriations Limit. Calculation of proceeds of taxes can exclude certain public fund uses, including categories of debt service, contribution to some types of revenues, and federal mandates. The exclusion calculation was not performed as we continue to maintain appropriations significantly below our Appropriations Limit. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). The Public Notice for this item was published in the Daily Pilot on May 31, 2014. ATTACHMENTS: Description Attachment A - Resolution No. 2014-47 Attachment B - Appropriations Computation 23 ATTACHMENT A RESOLUTION NO. 2014- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DETERMINING AND ESTABLISHING AN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2014-15 IN ACCORDANCE WITH ARTICLE XIIIB OF THE CALIFORNIA CONSTITUTION AND GOVERNMENT CODE SECTION 7910. WHEREAS, Article XIIIB was added to the California Constitution at the special State-wide election held November 6, 1979 (commonly known as Proposition 4); and WHEREAS, Government Code Section 7910 was added to Chapter 12.05 by Statute at the Regular Session of the California Legislature; and WHEREAS, Proposition 111, which, among other things, provides new annual adjustment formulas for the Appropriations Limit, was approved by the voters in June, 1990; and WHEREAS, the State of California Department of Finance have published population and per capita income growth indexes, as well as guidelines for the uniform application of Proposition 111; and WHEREAS, Government Code Section 7910 requires the governing body of each local jurisdiction to adopt, by resolution, its appropriations limit; and WHEREAS, said appropriations limit must be adhered to in preparing and adopting this City's annual budget. NOW, THEREFORE, the City Council of the City of Newport Beach does hereby resolve as follows: Section 1: In accordance with Article XIIIB of the California Constitution and Government Code Section 7910, the appropriations limit for fiscal year commencing July 1, 2014 for the City of Newport Beach is $159,687,483. The computation of appropriations for the 2014-15 fiscal year are set forth in detail in the attachment hereto, which is incorporated as though fully set forth herein. Section 2: Said appropriations limit shall be adhered to in the City of Newport Beach budget for the 2014-15 fiscal year. ATTEST: ADOPTED this 10th day of June, 2014. Leilani I. Brown, City Clerk Rush N. Hill, II, Mayor 24 ATTACHMENT B CITY OF NEWPORT BEACH COMPUTATION OF APPROPRIATION LIMIT FOR FISCAL YEAR ENDING JUNE 30, 2015 AS PER ARTICLE X11113, CALIFORNIA STATE CONSTITUTION FISCAL YEAR 2013-14 note (1) note (2) PRIOR YEAR LIMIT $159,433,819 INFLATION ADJUST. (1) -0.0023 POPULATION NEW APPROP. ADJUST. (2) LIMIT 0.0039 1 $159,687,483 Based on California per capita income increases Based on Newport Beach population growth CALCULATION OF ESTIMATED PROCEEDS OF TAXES FOR FISCAL YEAR ENDING JUNE 30, 2015 Total Estimated Proceeds of Taxes Less Authorized Exclusions Net Proceeds of Taxes $137,276,796 note (3) $0 $137,276,796 note (3): Since 2013-14 estimated proceeds are substantially less than the Appropriations Limit, exclusions were not calculated. AMOUNT UNDER APPROPRIATIONS LIMIT $22,410,687 25 May 31, 2014 CITY OF NEWPORT BEACH DAN MATUSIEWICZ (949) 644-3123 LEGAL NOTICE NOTICE IS HEREBY GIVEN THAT the City Council of the City of Newport Beach will establish the City's Appropriation Limit for the 2014-15 Fiscal Year, pursuant to Article 13B of the State Constitution on the 10th day of June, 2014, at the hour of 7:00 p.m. in the Civic Center Council Chambers, 100 Civic Center Drive, Newport Beach, CA 92660. APPROPRIATION LIMIT: Article 13B Appropriation for 2014-15 Fiscal Year $159,687,483 Total Appropriations Subject to Limit 137,276,796 Amount Under Limit 22.410.687 R. 0 U P PROOF OF PUBLICATION (2015.5 C.C.P.) STATE OF ILLINOIS County of Cook I am a citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the action for which the attached notice was published. 1 am a principal clerk of The Newport Harbor News Press Combined With Daily Pilot, which was adjudged a newspaper of general circulation on lune 19, 1952, Cases - A24831 for the City of Newport Beach, County of Orange, and State of California. Attached to this Affidavit is a true and complete copy as was printed and published on the following date(s): May 31, 2014 I certify (or declare) under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Dated at Chicago, Illinois on this day of D -e( , 20_. [signature] 435 N. Michigan Ave. Chicago, IL 60611 2412467 - Newport Harbor News Press Combined With Daily Pilot Sold To: City of Newport Beach - CU00063866 100 Civic Center Drive Newport Beach,CA 926633969 Bill To: City of Newport Beach - CU00063856 100 Civic Center Drive Newport Beach,CA 926633969 F . Afty 1014 C A AUSI; G (949) 644- 2412467 - Newport Harbor News Press Combined With Daily Pilot