City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: JUNE 6, 2023 FROM: FINANCE DEPARTMENT WARDS: ALL
SUBJECT: FISCAL YEAR 2023/24 ANNUAL APPROPRIATIONS LIMIT ISSUE:
Provide the public the opportunity to review the information used to develop the Fiscal Year 2023/24 Appropriations Limit as required by Article XIIIB of the California Constitution.
RECOMMENDATION:
That the City Council provides the public, in accordance with Section 7910 of the Government Code, an opportunity to review the information used to develop the Appropriations Limit of $413,103,814 for Fiscal Year 2023/24.
LEGISLATIVE HISTORY:
Article XIIIB of the California Constitution was added by the November 1979 passage of the Gann Initiative. For the State and local governments, this legislation mandated that the total annual appropriations subject to the limitation shall not exceed the prior year’s Appropriations Limit, adjusted for the change in the cost of living and population, except as otherwise provided in that article. The Gann Initiative is implemented by Section 7900 et. seq. of the California Government Code. Section 7910 provides that the governing body of each jurisdiction shall annually establish its Appropriations Limit by resolution.
The Appropriations Limit is calculated by determining appropriations financed by proceeds of taxes in the Fiscal Year (FY) 1978/79 base year and adjusting the limit each subsequent year for changes in the cost of living and population. This Appropriation Limit is the maximum limit of proceeds from taxes the City may collect or spend each year. Appropriations financed by proceeds of taxes are limited to actual revenues collected if they are lower than the limit. The Appropriations Limit may be amended at any time during the fiscal year to reflect new data.
BACKGROUND:
The cost of living adjustment may be based upon the changes in the California per capita personal income or the percentage change in the local assessment roll from the preceding year due to the addition of local non-residential new construction. The population adjustment may be based on the changes in the City population or population growth within the County. The annual adjustment factors used for the FY 2023/24 calculation uses the change in California per capita income and the change in the City’s population.
DISCUSSION:
Based on the current calculation, the City’s FY 2023/24 Annual Appropriations Limit is $413,103,814. Actual proceeds from taxes available for appropriations as estimated in the FY 2023/24 proposed budget are $349,588,299, which is $63,515,515 or 15.4% less than our limit.
The City is required to make all documentation used in determining the FY 2023/24 Appropriations Limit available for review by the public fifteen days prior to the adoption of the resolution. This documentation is available in the Finance Department for review.
On June 20, 2023, the City Council will be asked to adopt a resolution establishing the City of Riverside’s Fiscal Year 2023/24 Appropriations Limit at $413,103,814.
STRATEGIC PLAN ALIGNMENT:
This item contributes to Strategic Priority 5 – High Performing Government and Goal 5.3: Enhance communication and collaboration with community members to improve transparency, build public trust and encourage shared decision making.
This item aligns with each of the five Cross-Cutting Threads as follows:
Community Trust: The calculation of the Appropriations Limit is a transparent process as all documentation used in determining the FY 2023/24 Appropriations Limit is available for review by the public at least fifteen days prior to adoption of the resolution. This documentation is available in the Finance Department for review.
Equity: This report is neutral toward this cross-cutting thread.
Fiscal Responsibility: Ensuring proceeds from taxes the City may collect or spend each year and appropriations financed by proceeds of taxes are limited to actual revenues collected if they are lower than the limit demonstrates the City’s commitment to responsible management of the City’s financial resources while providing quality public services.
Innovation: This report is neutral toward this cross-cutting thread.
Sustainability and Resiliency: This report is neutral toward this cross-cutting thread.
FISCAL IMPACT:
There is no fiscal impact associated with this report.
Prepared by: Kristie Thomas, Assistant Chief Financial Officer Certified as to
availability of funds: Edward Enriquez, Interim Assistant City Manager/Chief Financial Officer/City Treasurer
Approved by: Edward Enriquez, Interim Assistant City Manager/Chief Financial Officer/City Treasurer
Approved as to form: Phaedra A. Norton, City Attorney
Attachments: Attachments:
Appropriations Limit Calculation
Presentation
Annual Appropriations Limit ● Page 2