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Home My WebLink About23 - 2004-05 Appropriations Limit HearingCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 23 June B, 2004 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Administrative Services Department Dennis C. Danner, Administrative Services Director 949 - 644 -3123 ddanner @city.newport- beach.ca.us SUBJECT: 2004 -05 APPROPRIATION LIMIT HEARING Recommendation: Hold a public hearing and adopt, by Resolution, the City's Appropriation (Gann) Limit for the 2004 -05 fiscal year in the amount of $112,315,605. Background: Article XIIIB of the California Constitution (Proposition 4) specifies that appropriations of government entities may increase annually only by a limited amount (primarily to allow for population increases and inflation). As in the past, SB 1352 (Revenue and Taxation Code Section 7910) requires each local government to establish its appropriations limit by resolution each year at a regularly scheduled or noticed special meeting. The attached resolution submitted for Council approval fulfills this requirement. As the following table shows, even without calculating authorized exclusions, the amount by which our Proceeds of Taxes will have been under the Gann Limit for a twelve year period is sufficient to provide a reasonable margin of comfort. 1993 -94 Gann Limit Margin $15,536,246 1994 -95 Gann Limit Margin $16,193,661 1995 -96 Gann Limit Margin $19,624,749 1996 -97 Gann Limit Margin $19,711,288 1997 -98 Gann Limit Margin $20,285,768 1998 -99 Gann Limit Margin $20,344,472 1999 -00 Gann Limit Margin $21,751,495 2000 -01 Gann Limit Margin $23,470,251 2001 -02 Gann Limit Margin $26,941,613 2002 -03 Gann Limit Margin $21,883,919 2003 -04 Gann Limit Margin $30,781,765 2004 -05 Gann Limit Margin $27,911,157 2004 -05 Appropriation Limit Hearing June 8, 2004 Page 2 There are several factors which have a bearing on the Gann Limit, and on our expenditures subject to the Limit. However, actions by the State reducing our tax revenues, along with weak economic conditions during the early and mid 1990's established the trend which can be seen above. The detailed population and inflation adjustment calculations are still required, but they have been reduced to a level of relative insignificance by these larger factors. This year's dramatic increase in the margin was primarily the result of the annexation related population adjustment. We are still required to perform the calculations and take appropriate Council action, but, unless the law is changed, it is apparent that staying under the Gann Limit is not something we are going to have to worry about any time soon. Submitted by: Dennis Danner Administrative Services Director Attachments: Resolution CITY OF NEWPORT BEACH COMPUTATION OF APPROPRIATION LIMIT FOR FISCAL YEAR ENDING 30 JUNE 20051 AS PER ARTICLE XIIIB, CALIFORNIA STATE CONSTITUTION PRIOR YEAR INFLATION POPULATION FISCAL YEAR LIMIT ADJUST. (1) ADJUST. (2) 2004 -05 $107,226,040 0.0328 0.0142 note (1): Based on California per capita income increases note (2): Based on Orange County population growth NEW APPROP. LIMIT $1121315,605 CALCULATION OF ESTIMATED PROCEEDS OF TAXES FOR FISCAL YEAR ENDING 30 JUNE 2005 Total Estimated Proceeds of Taxes $84,404,448 Less Authorized Exclusions Net Proceeds of Taxes note (3) $0 $84,404,448 note (3): Since 2003 -04 estimated gross proceeds were substantially less than appropriations limit, exclusions were not calculated. AMOUNT UNDER APPROPRIATIONS LIMIT 1$27,911,157 RESOLUTION NO. 2004- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DETERMINING AND ESTABLISHING AN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2004- 05 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 League of California Cities and 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 1 July 2004 for the City of Newport Beach is $112,315,605. The computation of appropriations for the 2004- 05 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 2004 -05 fiscal year. ADOPTED this 8th day of June, 2004. Mayor ATTEST: City Clerk RESOLUTION NO. 2004- 44 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DETERMINING AND ESTABLISHING AN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2004 -05 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 League of California Cities and 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 1 July 2004 for the City of Newport Beach is $112,315,605. The computation of appropriations for the 2004- 05 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 2004 -05 fiscal year. ADOPTED this 8th day of June, 2004. ATTEST: F 70� _�� [CITY CLERK MAVOR STATE OF CALIFORNIA } COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH } I, LaVonne M. Harkless, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; that the foregoing resolution, being Resolution No. 2004 -44 was duly and regularly introduced before and adopted by the City Council of said City at a regular meeting of said Council, duly and regularly held on the 8an day of June, 2004, and that the same was so passed and adopted by the following vote, to wit: Ayes: Heffernan, Rosansky, Adams, Bromberg, Webb, Nichols, Mayor Ridgeway Noes: None Absent: None Abstain: None IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 9th day of June, 2004. (Seal) City Clerk Newport Beach, California Mav 25, 2004 CITY OF NEWPORT BEACH DENNIS DANKER (949) 644 -3123 LEGAL NOTICE NOTICE IS HEREBY GIVEN THAT the City Council of the City of Newport Beach will hold a joint public hearing regarding: (1) Preliminary Budget for the 2004 -05 Fiscal Year, pursuant to Section 1102 of the Newport Beach City Charter; and, (2) the City's Appropriation Limit for the 2004 -05 Fiscal Year, pursuant to Article 13B of the State Constitution. NOTICE IS HEREBY GIVEN THAT said public hearing will be held on the 8' day of June, 2004, at the hour of 7:00 p.m. in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, CA 92663, at which time and place interested persons may appear and be heard thereon. TOTAL BUDGET ALL FUNDS - INCLUDING CAPITAL IMPROVEMENTS: Salaries and Benefits $90,515,243 Maintenance and Operations 45,660,612 Capital Outlay 3,382,398 Capital Improvements 17,320,295 Debt Service 4,293.325 Total Budget X171171.873 APPROPRIATION LIMIT: Article 13B Appropriation for 2003 -04 Fiscal Year $112,315,605 Total Appropriations Subject to Limit 84,404.408 Amount tinder Limit 27.911.157 uCU A�ti May 25, 2004 CITY OF NEWPORT BEACH DENNIS DANNER (949) 644 -3123 LEGAL NOTICE NOTICE IS HEREBY GIVEN THAT the City Council of the City of Newport Beach will hold a joint public hearing regarding: (1) Preliminary Budget for the 2004 -05 Fiscal Year, pursuant to Section 1102 of the Newport Beach City Charter; and, (2) the City's Appropriation Limit for the 2004 -05 Fiscal Year, pursuant to Article 13B of the State Constitution. NOTICE IS HEREBY GIVEN THAT said public hearing will be held on the 8th day of June, 2004, at the hour of 7:00 p.m. in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, CA 92663, at which time and place interested persons may appear and be heard thereon. TOTAL BUDGET ALL FUNDS - INCLUDING CAPITAL IMPROVEMENTS: Salaries and Benefits $90,515,243 Maintenance and Operations 45,660,612 Capital Outlay 3,382,398 Capital Improvements 27,320,295 Debt Service 4,293,325 Total Budget $171,171,873 APPROPRIATION LIMIT: Article 13B Appropriation for 2003 -04 Fiscal Year $112,315,605 Total Appropriations Subject to Limit 84,404,408 Amount Under Limit $-27,911,157 i� �1 Authorized to Publish Advertisements of all kinds including public n Decree of the Superior Court of Orange County, California. Number September 29. 1961, and A -24831 June 11. 1963. PROOF OF PUBLICATION STATE OF CALIFORNIA) ) ss COUNTY OF ORANGE ) May 25. 2004 1 CITY OF NEWPORT BEACH DENNIS DANNER (949) 604 -3123 LEGAL NOTICE NOTICE IS HEREBY GIVEN THAT the City Council of the City of Newport Beach will hold a joint public hearing regarding: (1) Preliminary Budget for the 2004 -05 Fiscal Year, pursuant to Section 1102 of the Newport Beach City Charter; and, (2) the City's Appropriation Limit for the 2004 -05 Fiscal Year, pursuant to Article 13B of the State Constitution. NOTICE IS HEREBY GIVEN THAT said public hearing will be held on the 8ih day of June, 2004, at the hour of 7:00 p.m. in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, CA 92663, at which time and place interested persons may appear and be heard thereon. t I am a Citizen of the United States and a TOTAL BUDGET ALL FUNDS resident of the County aforesaid; I am over the age of eighteen years and not Bamen anc Benefits r Mait ntenance and Operations parry to or interested in the below entitlec Capital Outlay ital Improvements matter. I am a principal clerk of thE Deb Capt Service NEWPORT BEACH - COSTA MESA DAILY PILOT, a newspaper of genera Total Budget circulation, printed and published in th City of Costa Mesa, County of Orange: APPROPRIATION LBvII1 INCLUDING CAPITAL IMPROVEMENTS: State of California, and that attache( Article 13B Appropriation for 2003 -04 Fiscal Year Total Appropriations Subject to Limit Notice is a true and complete copy aE was printed and published on the Amount Under Limit following dates: May 29, 2004 I declare, under penalty of perjury, that the foregoing is true and correct. Executed On May 29 2004 at Costa Mesa, California. Signature $90,515,243 45,660,612 3,382,398 27,320,295 . 4.293.325 $112,315.605 84.404.408