1 MJK:bg A22-02457 (07-29-2022)
01420130.DOCX
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OFFICE OF THE CITY ATTORNEY
CHARLES PARKIN, City Attorney
411 West Ocean Boulevard, 9th Floor
Long Beach, CA 90802-4664
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF LONG BEACH ADOPTING AN APPROPRIATIONS
LIMIT FOR THE CITY OF LONG BEACH FOR THE 2022-2023
FISCAL YEAR PURSUANT TO ARTICLE XIII(B) OF THE
CALIFORNIA CONSTITUTION
WHEREAS, Article XIII(B) of the California Constitution provides for an annual appropriations limit for state and local governments beginning with the 1980 -81 fiscal year, based on 1978-79 appropriations, as adjusted for specified annual changes in population and inflation; and
WHEREAS, Section 7910 of the Government Code also provides that fifteen (15) days prior to such meeting, documentation used in the determination of the appropriations limit shall be available to the public; and that each year the City Council shall, by resolution, establish the appropriations limit for the City of Long Beach for the following fiscal year; and
WHEREAS, Proposition 111 subsequently amended Articl e XIII(B) of the California Constitution to provide for certain revisions in the population and inflation factors used in the calculation of the appropriations limit and to provide for a recalculation of the appropriation limit date for the years 1987-88 through 1990-91; and WHEREAS, Proposition 111 provided that one factor that may be used in the calculation of the appropriations limit is the increase in local non-residential assessed value due to new construction; and
WHEREAS, the documentation which is a ttached hereto and made a part hereof as Exhibit “A” was used in the determination of the appropriations limit for the 2022- 2023 fiscal year, and has been available for public inspection in the office of the City Clerk since August 2, 2022;
RES-22-0162
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1 NOW, THEREFORE, the City Council of the City of Long Beach resolves as 2 follows:
3 Section 1. The appropriations limit for the City of Long Beach for fiscal 4 year 2022-2023 shall be $929,760,175.
5 Section 2. This resolution shall 'take effect immediately upon its adoption 6 by the City Council, and the City Clerk shall certify the vote adopting this resolution. 7 I hereby certify that the foregoing resolution was adopted by the City Council 8 of the City of Long Beach at its meeting of September 6 , 2022, by the 9 following vote:
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28 Ayes: Councilmembers:
Noes: Councilmembers:
Absent: Councilmembers:
Recusal( s ): Council members:
MJK:bg A22-02457 (07-29-2022)
01420130.DOCX
Zendejas, Allen, Price, Supernaw,
Mungo, Saro, Uranga, Austin,
Richardson.
None.
None.
None.
2 "EXHIBIT A"
2021 - 2022 Appropriations Limit: $862,765,566
Adjustment Factor (See Below): 1.077651
2022 - 2023 Appropriations Limit: $929,760,175
II. DETERMINATION OF APPROPRIATIONS FACTOR
Price Factor: 1.075500
Change in Per Capita Income
Department of Finance estimate pursuant
to Revenue Tax Code, Sec. 2227 and 2228,
California = 7.55%
Ratio = (7.55+100)/100 = 1.0755
Population Change: 0.20%
Department of Finance estimate pursuant
to Revenue Tax Code, Sec. 2227 and 2228,
California = 0.20%
Ratio = (.20+100)/100 = 1.0020
Adjustment Factor: 1.077651
1.0755 x 1.002
Factors were converted to ratios
per State guidelines.
III. DETERMINATION OF FISCAL YEAR 2022 - 2023
CALCULABLE REVENUE PERCENTAGE
OF APPROPRIATIONS LIMIT
Appropriated Tax Revenue: 472,345,646
Actual calculable revenue applied
towards Appropriations Limit
Exclusions From Taxable Proceeds ($50,444,907)
Revised Appropriated Tax Revenue 421,900,738
2022 - 2023 Appropriations Limit: $929,760,175
Variance Between Revenue And Limit $507,859,437
2022 - 2023 Percentage of Appropriations Limit: 45.38%
Prepared July 25, 2022
Budget Management Bureau
CITY OF LONG BEACH
I. DETERMINATION OF FISCAL YEAR 2022 - 2023
APPROPRIATIONS LIMIT
Based On Budgeted Revenues
FY 23 GANN Appropriation Calculation.xlsx 7/26/2022
Financial Policies as Adopted by City Council on September 4, 2018
SUMMARY
BUDGETARY AND FINANCIAL POLICIES
CITY OF LONG BEACH, CALIFORNIA
This is a condensed version of the budgetary and financial policies of the City of Long Beach, California.
Note: The Financial Policies written here are as Adopted by City Council on September 4, 2018 and include proposed changes as presented to City Council on December 7, 2021 , proposing to change the revenue projections methodology from reasonably conservativ e to reasonably expected. These updated policies can be formally adopted as part of the FY 23 Budget Adoption.
1. Structural Balance
The budget for the General Fund will be structurally balanced.
2. Multi-Year Financial Projections
The proposed annual budget should include a three -year General Fund surplus/ (shortfall) projection.
3. Budget Process is an Annual Cycle
The annual budget process is used to develop annual service priorities and the level and type of resources to fund those services. Proposed changes to the budget and to service levels during the fiscal year will be minimized. Proposed mid -year changes will be evaluated programmatically and fiscally prior to adoption , and, if adopted, will have a lower priority compared to preexisting programs and projects unless otherwise specified.
A list of any adopted non-routine mid-year budget changes will be provided to the Budget Oversight Committee annually for review.
4. User Fees to be Set at the Cost of Service
Fees will be set to fully recover costs, except where there is a greater public benefit through use of a lower fee. There will be a process for in -depth review of all fees over time.
5. One-Time Resources are for One-Time Uses
One-time resources will not be used to fund ongoing operations and are to be used for one-time purposes. Five percent of new General Fund funds available will be set aside for unfunded liabilities.
Financial Policies as Adopted by City Council on September 4, 2018
6. Capital Projects Budgeted for Both One-Times and Ongoing Costs
Before approving any capital expenditure, the City Council will consider the capital (one- time) costs, the operating (ongoing) components of costs and the replacement costs and the expected approach to funding replacement.
7. Fund Balance Policy
Establishes categories of fund balances - non-spendable, restricted, committed, assigned and unassigned, and creates specific reserves - an emergency reserve, operating reserve s, a reserve for subsequent year appropriates, an infrastructure reserve, and provides for the creation of other reserves.
8. Adequate Emergency and Operating Reserves will be Maintained
Emergency reserves will be maintained at 8% minimum (of General Fund ongoing expenditures, including transfers) and 10% target, operating reserves will be maintained at 2% minimum and 7% maximum, and the City will seek to maintain overall reserves at no less than 16.7% (two months)
9. Adequate Reserves for all Funds
Financial Management will develop and recommend reserve policies for each City fund which will be adopted, as modified, by the City Council.
10. Revenue Projections will Utilize a Reasonably Expected Approach
Revenue projections are to be objectively prepared using a reasonably expected approach, so that there is an equal chance of coming in higher or lower than projection.
11. Stable Revenue Sources will be Used to Fund Operations
Any revenue that has highly variable component may have only a portion of it, or none of it, budgeted for operations.
Oil revenue will be budgeted at a per barrel price likely to be lower than the av erage price, based on historical variability.
12. Fiscal Impact Statements Required
For any proposed City Council action, an analysis is to be provided (fiscal impact statement) of the projected or potential fiscal impact on current and future revenues , expenditures, or resources, including staff resources, and on how the action may impact the City’s financial or economic position.
Financial Policies as Adopted by City Council on September 4, 2018
13. Current Year Costs will be Funded or an Explanation Provided
The budget will include funding for all costs of operation for the current year or will identify, provide general information on, and discuss any costs not fully funded, including unfunded liabilities, unfunded lifecycle replacement costs, and deferred maintenance.
14. Financial Reporting will use Generally Accepted Standards
The City will prepare annual financial statements in accordance with Generally Accepted Accounting Principles (GAAP), will use a consistent approach to budgetary reporting.
Both the basis of accounting and the basis of budget ing will be describ ed in the appropriate documents.
The annual financial report will include a reconciliation of budgetary funds available to the GAAP fund balance or net position.
15. Financial Status will be Reported
The City’s annual comprehensive financial report ( ACFR) will be made available after completion of the annual audit.
There will be periodic reporting on the budgetary status of the City, particularly the General Fund and other funds that have unusual or problematic status. Any major or critical issue will be reported as soon as it is practical.
16. Financial Status of Major Funds will be Reviewed
The City Manager will annually present a brief report discussing the high -level financial status of each major fund of the City. The report may be incorporated into the proposed budget as a component of each fund’s Fund Summary.
17. Appropriate Grants will be Sought
The City will seek grants that address City priorities and are believed to provide a substantial net benefit after considering the City’s cost to secure and administer the grant and the risk associated with unintentional non-compliance.
The City shall maintain administrative support to ensure compliance with grant terms and requirements.
Prior to grant award, the City Council should be aware o f post-grant expectations for funding and continuing or discontinuing of programs; City Council should be informed if the actual situation changes from the original expectations.
Financial Policies as Adopted by City Council on September 4, 2018
18. Debt Maintained at Appropriate Levels
Debt limits will be adopted by the City Council.
The term of debt will generally not exceed the life of the asset being acquired, capital leases for vehicles will be part of a comprehensive strategy, and debt will not be used to fund operations.
A separate policy on debt and debt management will be adopted.
19. Investments will be Conservatively Managed
Investments shall be managed with the priorities of: safety of principal, liquidity (availability of cash), and yield (investment income).
A separate policy on investments and investment management will be adopted.
20. A Long-Term General Financial Plan will be Maintained
A plan will be adopted that outlines general approaches to maintaining and increasing revenues, growing the City’s economy for the purpose of revenue generation, and controlling and managing the cost of services and the method of delivery of services.
21. Financial Policies will be Reviewed
Financial policies will be reviewed every three years. The City Manager will report potential non-compliance on any proposed Council action and will report annually on overall compliance and non-compliance with all the financial policies
22. Administrative Procedures to be Consistent with Policy
Administrative procedures shall be consistent with the adopted City Council budgetary and financial policies.