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Home My WebLink About23- Finance CITY OF SAN BERN A RDINO REQUEST F"�R COUNCIL ACTION From: BARBARA PACHON, DIRECTOR OF FINANCE Subject: APPROPRIATION LIMIT FOR FISCAL YEAR 1993/94 Dept: FINANCE Date: JUNE 24, 1993 Synopsis of Previous Council action: 7/22/93 Resolution #93-249 adopted. 10/23/91 Resolution #91-429 adopted. 9/05/90 Resolution #90-370 adopted. Recommended motion: Adopt Resolution Signature Contact person: Barbara Pachon, Director of Finance Phone: X - 5242 Supporting data attached: Ward: FUNDING REQUIREMENTS: Amount: Source: (Acct. No.) (Acct. Description) Finance: Council Notes: 75-0262 Agenda Item No. �� CITY OF SAN BERN; IDINO - REQUEST F'R COUNCIL ACTION STAFF REPORT RECOMMENDATION It is recommended that the City Council adopt the attached resolution setting the City's FY 1993-94 Appropriations Limit at $124 , 229, 850. BACKGROUND AND OVERVIEW On November 6, 1979, California voters approved the Gann Spending Limitation Initiative (Proposition 4) establishing Article XIII B of the State Constitution. Article XIII B sets limits on the amount of tax revenues that state and most local governments can appropriate within a given fiscal year. Its basic provisions are as follows: - Each year, state and local governments must adopt a resolution establishing an appropriations limit. FY 1978-79 appropriations serve as the base for this limit with adjustments being made annually to reflect increases in population, the cost of living, and service responsibility transfers. Only tax proceeds are subject to the limit. Charges for services, regulatory fees, grants, loans, donations and other non-tax proceeds are not subject to the limit. Exemptions are also made for voter approved debt and debt which existed prior to January 1, 1979, and for the cost of compliance with court or federal government mandates. All tax revenues received in excess of the appropriations limit must be refunded to taxpayers within a two year period. - An increase in the appropriations limit may be approved by the voters. For the increase to remain in effect, however, it must be reapproved by voters at four year intervals. On June 5, 1990, California voters approved the Traffic Congestion Relief and Spending Limitation Act (Proposition 111) which made various amendments to Article XIII B of the State Constitution. The major changes, which became effective July 1, 1990, are as follows: The change in the cost of living is now defined to be either the change in California per capita personal income or the change in assessed valuation due to the addition of non- residential new construction. Previously, the change in the cost of living was defined as the lesser of the change in the U.S. Consumer Price Index or the change in California Per capita personal income. 75-0264 I r - The change in population is now defined to be either the change in the City's population or the change in the population of San Bernardino County as a whole. Previously, the change in population was defined to be the change in the City's population. Calculation of the City's appropriation limit for FY 1990-91 is to be made using the FY 1986-87 appropriation limit as a base with the revised annual adjustment factors for both cost of living and population increases. "Qualified capital outlay projects" have been added to the items exempted from the appropriations limit. Qualified capital outlay projects must have a useful life of ten or more years and cost which equals or exceeds $100, 000. Tax revenues received in excess of the appropriations limit must be refunded to tax payers only if the limit is exceeded over a two year period. The annual calculation of the appropriations limit must be reviewed as part of the City's annual financial audit. FINDINGS The information used to calculate the City's FY 1993/94 Appropriation Limit is presented in Attachment A. The City's Appropriation Limit in the FY 1986/87 base year was $72, 956,219. The cumulative seven year increase allowed by Proposition 111 due to population changes and increases in the cost of living is 70.28%. This results in a FY 1993/94 Appropriation Limit of $124,229.850. As indicated above, both Proposition 4 and Proposition 111 made provisions for proceeds not subject to the limit. Attachment B details these proceeds and after taking these deductions into consideration, the balance of the FY 1993/94 budget appropriations still subject to the limitation is $80, 125,900. SUMMARY Each year the City is required to adopt a resolution establishing a limit on its appropriation of tax proceeds. The Traffic Congestion Relief and Spending Limitation Act (Proposition 111) , approved by the voters on June 5, 1990, changed some of the factors used in the calculation of this limit. For FY 1993/94 the City's appropriation limit is calculated to be $124,229,850. This limit is $44 , 103 ,950 greater than the City's budgeted appropriations subject to the limit. ATTACHMENT A 0 I CITY OF SAN BERNARDINO 1993/94 APPROPRIATION LIMITATION COMPUTATION (PERMITTED GROWTH RATE) 1993/94 CPI CHANGE 2 .72% POPULATION CHANGE (SAN BERNARDINO COUNTY) 3 .20% CPI CHANGE CONVERTED TO A RATIO 1. 0272 POPULATION CHANGE CONVERTED TO A RATIO 1. 0320 CALCULATION 1. 0272 X 1. 0320 = 1.0601 1992/93 LIMIT 1.6063 (PRIOR YEARS) X 1. 0601 = 1.7028 1993/94 APPROPRIATION LIMIT --------------------------- BASE YEAR (1986/87) - $72,956, 219 X 1.7028 = $124, 229,850 ATTACHMENT B CITY OF SAN BERNARDINO 1993/94 APPROPRIATIONS SUBJECT TO LIMIT TOTAL 1993/94 PRELIMINARY BUDGET 105, 403, 900 LESS: APPROPRIATION NOT SUBJECT TO LIMITATION ENTERPRISE FUNDS REFUSE (127) 14 , 688,900 INTERNAL SERVICE FUNDS LIABILITY INSURANCE (629) 2, 653, 400 TELEPHONE SUPPORT (630) 650, 100 MOTOR POOL (635) 3 ,557,700 WORKERS COMPENSATION (678) 1,830, 600 MGMT INFORMATION SYSTEMS (679) 1, 010,800 ------------ TOTAL 9,702 , 600 DEBT SERVICE GENERAL GOVERNMENT (001) 187, 600 LIBRARY (105) 698,900 TOTAL 886, 500 TOTAL EXCLUSIONS NOT SUBJECT TO LIMITATION 25, 278, 000 TOTAL APPROPRIATIONS SUBJECT TO LIMITATION 80, 125, 900 p I RESOLUTION NO. 2 A RESOLUTION OF THE CITY OF SAN BERNARDINO, ESTABLISHING, THE APPROPRIATION LIMIT FOR THE FISCAL YEAR 1993/94 FOR THE CITY 3 OF SAN BERNARDINO IN ACCORDANCE WITH THE PROVISIONS OF DIVISION 9 OF TITLE 1 OF THE CALIFORNIA CODE, AND REPEALING RESOLUTION NO. 4 93-249 . 5 WHEREAS, Article XIII B of the Constitution of the State of 6 California as proposed by the Initiative Measure approved by the 7 people at the special statewide election held on November 6, 8 1979, provides that the total annual appropriations subject to 9 limitation of each local government shall not exceed the 10 appropriations limit of such entity for the prior year adjusted 11 for changes in the cost of living and population except as 12 otherwise specifically provided for in said Article; and 13 WHEREAS, Section 7910 of the Government Code provides that 14 each year the governing body of each local jurisdiction shall, by 15 resolution, establish its appropriations limit for the following 16 fiscal year pursuant to Article XIII B at a regularly scheduled 17 meeting or a noticed special meeting and that fifteen days prior 18 to such meeting, documentation used in the determination of the 19 appropriations limit shall be available to the public; and 20 WHEREAS, the City Council of the City of San Bernardino 21 wishes to establish the appropriations limit for fiscal year 22 1993/94 for the City of San Bernardino. 23 24 25 26 27 1 28 I NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE 2 CITY OF SAN BERNARDINO, CALIFORNIA, AS FOLLOWS: 3 SECTION l: That it is hereby found and determined that the 4 documentation used in the determination of the appropriations 5 limit for the City of San Bernardino for fiscal year 1993/94 was 6 available to the public in the Finance Department of said City at 7 least fifteen days prior to this date. 8 SECTION 2 : That the appropriations limit for the City of 9 San Bernardino as established in accordance with Section 7902 (a) 10 of the Government Code is $124 , 229, 850. 11 SECTION 3 : That resolution 93-249 be repealed. 12 I HEREBY CERTIFY that the foregoing resolution was duly 13 adopted by the Mayor and Common Council of the City of San 14 Bernardino at a meeting thereof, held on the 15 day of 1993 , by the following vote, 16 to wit: 17 18 19 20 21 22 23 24 25 26 27 2 28 r 1 A RESOLUTION OF THE CITY OF SAN BERNARDINO, ESTABLISHING, THE APPROPRIATION LIMIT FOR THE FISCAL YEAR 1993/94 FOR THE CITY 2 OF SAN BERNARDINO IN ACCORDANCE WITH THE PROVISIONS OF DIVISION 9 OF TITLE 1 OF THE CALIFORNIA CODE, AND REPEALING RESOLUTION NO. 3 93-249. 4 COUNCIL MEMBERS AYES NAYS ABSTAIN ABSENT 5 NEGRETE 6 CURLIN 7 HERNANDEZ 8 OBERHELMAN 9 OFFICE VACANT 10 POPE-LUDLAM 11 MILLER 12 13 CITY CLERK 14 The foregoing resolution is hereby approved this day 15 of , 1993 . 16 17 Tom Minor, Mayor 18 City of San Bernardino 19 Approved as to form and legal content: 20 JAMES F. PENMAN 21 City Attorney 22 23 By: 24 25 26 27 3 28