The URL can be used to link to this page

Home My WebLink About07 - Adoption of Fiscal Year 2015-16 Appropriations LimitCTY OF F NEWPORT BEACH City Council Staff Report May 26, 2015 Agenda Item No. 7 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Dan Matusiewicz, Finance Director — (949) 644 -3123, dmatusiewicz @newportbeachca.gov PREPARED BY: Katherine Warnke- Carpenter, Budget Analyst PHONE: (949) 949 -3122 TITLE: Adoption of Fiscal Year 2015 -16 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 2015 -16, applicable tax proceeds are estimated at $150.3 million. The City's Gann appropriation limit totals $167.6 million. Therefore, the City is more than $17 million under the Gann Spending Limit. RECOMMENDATION: Adopt Resolution No. 2015 -39, A Resolution of the City Council of the City of Newport Beach Determining and Establishing an Appropriations Limit for Fiscal Year 2015 -16 in Accordance with Article X111B of the California Constitution and Government Code Section 7910, in the amount of $167,578,050. FUNDING REQUIREMENTS: There are no funding requirements 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. 7 -1 The calculation of the City's Appropriation Limit for Fiscal Year 2015 -16 is: FY2014 -15 Appropriations Limit Inflation Adjustment Factor Population Adjustment Factor2 FY2015 -16 Appropriations Limit $159,687,483 3.82 1.08 $167,578,050 1 Based on California per capita income increases as provided by the California Department of Finance, May 2015. 2 Based on Orange County population growth as provided by the California Department of Finance, May 2015. We may calculate the City's Appropriation Limit using either the County's population factor or the City's population factor, whichever is larger. The City's population factor is 0.44 and the County's population factor is 1.08, as provided by the California Department of Finance. We have prepared the City's Appropriation Limit for Fiscal Year 2015 -16 using the County's population factor. The City of Newport Beach estimated proceeds from taxes for Fiscal Year 2015 -16 is $150,286,765, or $17,291,285 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 16, 2015. ATTACHMENTS: Description Attachment A - Resolution 7 -2 ATTACHMENT A Resolution No. 2015 7 -3 RESOLUTION NO. 2015- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DETERMINING AND ESTABLISHING AN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2015 -16 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); WHEREAS, Government Code Section 7910 was added to Chapter 12.05 by Statute at the Regular Session of the California Legislature; WHEREAS, Proposition 111, which, among other things, provides new annual adjustment formulas for the Appropriations Limit, was approved by the voters in June, 1990; 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; 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, 2015 for the City of Newport Beach is $167,578,050. The computation of appropriations for the 2015 -16 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 2015 -16 fiscal year. Section 3: If any section, subsection, sentence, clause or phrase of this resolution is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution and each section, subsection, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses and phrases be declared unconstitutional. Section 4: The recitals provided in this resolution are true and correct and are incorporated into the substantive portion of this resolution. 7 -4 Section 5: The City Council finds the established appropriations limit for Fiscal Year 2015 -2016 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. Section 6: This resolution shall take effect immediately upon its adoption, and the City Clerk shall certify the vote adopting this resolution. ADOPTED this 26th day of May, 2015. Edward D. Selich, Mayor ATTEST: Leilani I. Brown, City Clerk 7 -5 CITY OF NEWPORT BEACH COMPUTATION OF APPROPRIATION LIMIT FOR FISCAL YEAR ENDING JUNE 30, 2016 AS PER ARTICLE XIIIB, CALIFORNIA STATE CONSTITUTION PRIOR YEAR INFLATION POPULATION NEW APPROP. FISCAL YEAR LIMIT ADJUST. (1) ADJUST. (2) LIMIT 2015 -16 $159,687,483 3.82 1.08 $167,578,050 note (1): Based on California per capita income increases note (2): Based on Orange County population growth CALCULATION OF ESTIMATED PROCEEDS OF TAXES FOR FISCAL YEAR ENDING JUNE 30, 2016 Total Estimated Proceeds of Taxes $150,286,765 Less Authorized Exclusions Net Proceeds of Taxes note (3) $0 $150,286,765 note (3): Since 2015 -16 estimated proceeds are substantially less than the Appropriations Limit, exclusions were not calculated. AMOUNT UNDER APPROPRIATIONS LIMIT $17,291,28 7 -6 CITY OF NEWPORT BEACH PUBLIC NOTICE NOTICE IS HEREBY GIVEN that the City Council of the City of Newport Beach will establish the City's Appropriation Limit for the 2015-16 Fiscal Year, pursuant to Article 13B of the State Constitution on Tuesday, May 26, 2015, at 7:00 p.m. or soon thereafter in the Council Chambers at 100 Civic Center Drive, Newport Beach. APPROPRIATION LIMIT: Article 13B Appropriation for 2015-16 Fiscal Year $167,578,050 Total Appropriations Subject to Limit 150,286,765 Amount Under Limit $ 17,291,285 For questions regarding this public notice please contact Dan Matusiewicz, Finance Director, at (949) 644-3123 or dmatusiewiczCa�-newportbeachca.gov. y a�19 Leilani I. Brown, MMC, City Clerk City of Newport Beach Cos Angeles Times ME DIA G ROU P Sold To: City of Newport Beach - C000072031 100 Civic Center Dr Newport Beach,CA 92660 Bill To: City of Newport Beach - C000072031 100 Civic Center Dr Newport Beach,CA 92660 NOTICE IS HEREBY GIVEN that the City Council of the City of Newport Beach will establish the City's Appropriation Limit for the 2015-16 Fiscal Year, pursuant to Article 13B of the State Constitution on Tuesday, May 26, 2015, at 7:00 p -m. or soon thereafter in the Council Chambers at 100 Civic Center Drive, Newport Beach. APPROPRIATION LIMIT: Article 13B Appropriation for 2015-16 Fiscal Year $167,578,050 Total Appropriations Subject tc) Lirrdt 150,286,765 Amount Under Limit $17.291.285 For questions regarding this public notice please contact Dan Matusiewicz, Finance Director, at (949) 644-3123 or DmatusWwicz@newportbeachca.gov Yrl'(y�� O� T /S/Lefard I. Brown, MMC, City C3erk City of Newport Beach v .Z ax r�4r f.e��tir 3291770 - Newport Harbor News Press Combined With Daily Pilot Page 2 of 2 Bios Anneles dimes ME D I A G ROU 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. I am a principal clerk of the Newport Harbor News Press Combined With Daily Pilot, which was adjudged a newspaper of general circulation on June 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 16, 2015 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 20 . [signature] 435 N. Michigan Ave. Chicago, IL 60611 3291770 - Newport HaPbor News Press Combined With Daily Pilot Page 1 of 2