ACTION:
____________________________
Clerk/Secretary
Department: Finance Item No: C4
Prepared by: Mathew McDonald, Finance Manager Meeting Date: May 24, 2022 Approved by:
Mike Sylvia, Director/Treasurer
Patrick Johnson, City Manager Agenda Location: Consent Calendar SUBJECT: ADOPTION OF THE FISCAL YEAR 2022/23 APPROPRIATION LIMIT RECOMMENDATION: Adopt City Council Resolution No. 2022- , establishing the appropriations limit for Fiscal Year 2022/23.
CORRELATION TO CITY COUNCIL GOALS: Fiscal Responsibility.
PRIOR ACTION: On May 25, 2021, adopted City Council Resolution No. 2021-72, establishing the appropriations limit for Fiscal Year 2021/22 (Vote: 5-0).
See Exhibit 2 for a complete list of prior City Council actions.
STATEMENT ON THE SUBJECT: The City Council annually adopts an appropriation limit as required by Proposition 4, also known as the "Gann Limit" Initiative, approved statewide by voters in 1979. The proposition amended Article XIII-B of the California Constitution, which specifies that appropriations made by the State and local governments may increase annually based upon changes in population and inflation taken together.
The City’s current appropriations limit for Fiscal Year 2021/22 is $495,603,124. According to the California Department of Finance, as of January 1, 2022, the City’s population increased by 0.76 percent over the prior year. During the same period, the County of San Diego population decreased by 0.08 percent. In calculating the appropriation limit increase, either the change in city or county population, whichever is greater, may be used.
The inflation factor authorized for use when calculating the potential increase is either the percentage change in the California per capita personal income, or the change in the local assessment roll due to local non-residential construction. Whichever factor is greater may be used. The percentage change in the California per capita personal income increased by 7.55 percent when compared to the prior year.
The amount of the change in the local assessment roll due to local non-residential construction is 4.54 percent over the prior year.
These two factors, the per capita income growth (7.55 percent) and the City population growth (0.76 percent) when converted to ratios (1.0755 and 1.0076, respectively) and multiplied allow the appropriation limit to be adjusted upwards by 8.37 percent, or an increase of $41,468,997 over the prior year limit.
AGENDA
REPORT
CITY COUNCIL
COMMUNITY DEVELOPMENT COMMISSION
SUCCESSOR AGENCY
BUENA SANITATION DISTRICT
JOINT POWERS FINANCING AUTHORITY
05/24/2022 C4 Page 1 of 10
Approved above recommendation, adopted City Council Resolution No. 2022-73.
Vote: 5-0
MEETING DATE: May 24, 2022 PAGE 2
SUBJECT: ADOPTION OF THE FISCAL YEAR 2022/23 APPROPRIATION LIMIT (Exhibit 3). Therefore, staff recommends the appropriation limit for Fiscal Year 2022/23 to be set at $537,072,121, which is the maximum amount of appropriations that can be funded by tax revenues.
FISCAL IMPACT: The Fiscal Year 2021/22 appropriation limit is $495,603,124. By applying the factors for population and inflation, the appropriation limit for Fiscal Year 2022/23 will be $537,072,121. This is the maximum amount of appropriations that can be funded by tax revenues. Fiscal Year 2022/23 operating revenues that are considered to be “Proceeds of Taxes” total $64,342,583 or 11.89 percent of the limit (Exhibit 4).
EXHIBITS:
1. City Council Resolution No. 2022- , establishing the appropriations limit for Fiscal Year 2022/23
2. Prior City Council Actions
3. Calculations for Allowable Growth Rate In Appropriations for Fiscal Year 2022/23 Per Article XIII-B of the California Constitution
4. Fiscal Year 2022/23 Operating Budget Appropriations Based Upon Proceeds of Taxes
05/24/2022 C4 Page 2 of 10
00107542 2
RESOLUTION NO. 2022-
A RESOLUTION OF THE CITY COUNCIL OF THE CHARTERED CITY
OF VISTA, CALIFORNIA, ESTABLISHING THE APPROPRIATIONS
LIMIT FOR FISCAL YEAR 2022/23
The City Council the City of Vista does resolve as follows:
1.Findings. The City Council hereby finds and declares the following:
A.Article XIII-B of the California Constitution was amended June 5, 1990, by Proposition 111 to change inflation and population factors that may be used by local jurisdictions in setting their appropriations limit.
B.The appropriations limit may increase annually by a factor comprised of either the change in California per capita personal income or the change in the local assessment roll due to local non-residential construction combined with the change in population within the local jurisdiction or within the county in which it is located.
C. The appropriations limit for FY 2021/22 was $495,603,124 D. The 1990-1991 appropriations limit has been recalculated from Fiscal Year 1986/87 using the new growth factors stated in Proposition 111.
E.The City has now received inflation and population data from the State Department of Finance to calculate the 2021/22 appropriations limit.
F.The growth factors used in calculating the Fiscal Year 2022/23 appropriations limit are based on the change in per capita personal income combined with the change in City population.
G. The City Council of the City of Vista intends to establish the appropriations limit for the 2022/23 Fiscal Year for the City of Vista based on the Fiscal Year 2021/22 appropriations limit adjusted by the following ratios of change:
California per Capita
Personal Income
(Inflation Factor)
County Population
Change
(Population Factor)
Ratio of
Change Factor
(a) X (b)
1.0755 1.0076 1.0837
2.Action.
A.The Appropriations limit for the City of Vista for Fiscal Year 2022/23 shall be $537,072,121 based upon the ratio of change for Fiscal Year 2021/22.
B.The Fiscal Year 2021/22 appropriations limit shall be amended when the Fiscal Year 2022/23 appropriations limit is established if the change in the local assessment roll due to non-residential construction in Fiscal Year 2021/22, 4.54 percent, is greater than the California per capita personal income factor, 7.55 percent, used in calculating the 2022/23 appropriations limit.
05/24/2022 C4 Page 3 of 10EXHIBIT 1
RESOLUTION NO. 2022-
CITY COUNCIL OF THE CHARTERED CITY OF VISTA
PAGE 2
00107542 2
3.Adoption. PASSED AND ADOPTED at a meeting of the City Council of the City of Vista held on May 24, 2022, by the following vote:
AYES:
NOES:
ABSTAIN:
APPROVED AS TO FORM:
DAROLD PIEPER, CITY ATTORNEY
By:
JUDY RITTER, MAYOR
ATTEST:
KATHY VALDEZ, CITY CLERK
By:
APPROVED
Darold Pieper
20220517100700
05/24/2022 C4 Page 4 of 10
Exhibit 2
Annual Adoption of the Appropriation Limit
Prior Actions
On May 25, 2021, adopted City Council Resolution No. 2021-72, establishing the appropriations limit for Fiscal Year 2021/22 (Vote: 5-0).
On May 26, 2020, adopted City Council Resolution No. 2020-80, establishing the appropriations limit for Fiscal Year 2020/21 (Vote: 5-0).
On May 28, 2019, adopted City Council Resolution No. 2019-64, establishing the appropriations limit for Fiscal Year 2019/20 (Vote: 5-0).
On June 12, 2018, adopted City Council Resolution No. 2018-85, establishing the appropriations limit for Fiscal Year 2018/19 (Vote: 4-0, Rigby absent).
On June 13, 2017, adopted City Council Resolution No. 2017-75, establishing the appropriations limit for Fiscal Year 2017/18 (Vote: 5-0).
On June 14, 2016, adopted City Council Resolution No. 2016-91, establishing the appropriations limit for Fiscal Year 2016/17 (Vote: 5-0).
On June 9, 2015, adopted City Council Resolution No. 2015-95, establishing the appropriations limit for Fiscal Year 2015/16 (Vote: 5-0).
On June 10, 2014, adopted City Council Resolution No. 2014-89, establishing the appropriations limit for Fiscal Year 2014/15 (Vote: 5-0).
On June 11, 2013, adopted City Council Resolution No. 2013-84, establishing the appropriations limit for Fiscal Year 2013/14 (Vote: 5-0).
On June 12, 2012, adopted City Council Resolution No. 2012-83, establishing the appropriations limit for Fiscal Year 2012/13 (Vote: 5-0).
On June 14, 2011, adopted City Council Resolution No. 2011-99, establishing the appropriations limit for Fiscal Year 2011/12 (Vote: 5-0).
On June 22, 2010, adopted City Council Resolution No. 2010-91, establishing the appropriations limit for Fiscal Year 2010/11 (Vote: 5-0).
On June 23, 2009, adopted City Council Resolution No. 2009-132, establishing the appropriations limit for Fiscal Year 2009/10 (Vote: 5-0).
On June 24, 2008, adopted City Council Resolution No. 2008-126, establishing the appropriations limit for Fiscal Year 2008/09 (Vote: 5-0).
On June 26, 2007, adopted City Council Resolution No. 2007-99, establishing the appropriations limit for Fiscal Year 2007/08 (Vote: 5-0).
On June 13, 2006, adopted City Council Resolution No. 2006-128, establishing the appropriations limit for Fiscal Year 2006/07 (Vote: 5-0).
05/24/2022 C4 Page 5 of 10EXHIBIT 2
On June 14, 2005, adopted City Council Resolution No. 2005-124, establishing the appropriations limit for Fiscal Year 2005/06 (Vote: 5-0).
On June 8, 2004, adopted City Council Resolution No. 2004-105, establishing the appropriations limit for Fiscal Year 2004/05 (Vote: 5-0).
On June 24, 2003, adopted City Council Resolution No. 2003-140, establishing the appropriations limit for Fiscal Year 2003/04 (Vote: 5-0).
On June 25, 2002, adopted City Council Resolution No. 2002-161, establishing the appropriations limit for Fiscal Year 2002/03 (Vote: 4-0).
On June 26, 2001, adopted City Council Resolution No. 2001-117, establishing the appropriations limit for Fiscal Year 2001/02 (Vote: 4-0).
On June 27, 2000, adopted City Council Resolution No. 2000-126, establishing the appropriations limit for Fiscal Year 2000/01 (Vote: 5-0).
On June 22, 1999, adopted City Council Resolution No. 99-96, establishing the appropriations limit for Fiscal Year 1999/00 (Vote: 5-0).
On June 23, 1998, adopted City Council Resolution No. 98-78, establishing the appropriations limit for Fiscal Year 1998/99 (Vote: 5-0).
On June 24, 1997, adopted City Council Resolution No. 97-72, establishing the appropriations limit for Fiscal Year 1997/98 (Vote: 4-0, McClellan Absent).
On June 25, 1996, adopted City Council Resolution No. 96-65, establishing the appropriations limit for Fiscal Year 1996/97 (Vote: 5-0).
On June 27, 1995, adopted City Council Resolution No. 95-69, establishing the appropriations limit for Fiscal Year 1995/96 (Vote: 5-0).
On July 12, 1994, adopted City Council Resolution No. 94-69, establishing the appropriations limit for Fiscal Year 1994/95 (Vote: 5-0).
On June 22, 1993, adopted City Council Resolution No. 93-77, establishing the appropriations limit for Fiscal Year 1993/94 (Vote: 4-0, McClellan Absent).
On June 23, 1992, adopted City Council Resolution No. 92-98, establishing the appropriations limit for Fiscal Year 1992/93 (Vote: 4-0, Wade Absent).
On June 25, 1991, adopted City Council Resolution No. 91-111, establishing the appropriations limit for Fiscal Year 1991/92 (Vote: 4-0, Smith Absent).
On June 25, 1990, adopted City Council Resolution No. 90-125, establishing the appropriations limit for Fiscal Year 1990/91 (Vote: 5-0).
On June 26, 1989, adopted City Council Resolution No. 89-120, establishing the appropriations limit for Fiscal Year 1989/90 (Vote: 5-0).
05/24/2022 C4 Page 6 of 10
On June 27, 1988, adopted City Council Resolution No. 88-141, establishing the appropriations limit for Fiscal Year 1988/89 (Vote: 4-0, Smith Absent).
On June 22, 1987, adopted City Council Resolution No. 87-173, establishing the appropriations limit for Fiscal Year 1987/88 (Vote: 5-0).
On June 24, 1986, adopted City Council Resolution No. 86-157, establishing the appropriations limit for Fiscal Year 1986/87 (Vote: 4-1, Von Haden).
On June 11, 1985, adopted City Council Resolution No. 85-121, establishing the appropriations limit for Fiscal Year 1985/86 (Vote: 5-0).
On June 26, 1984, adopted City Council Resolution No. 84-116, establishing the appropriations limit for Fiscal Year 1984/85 (Vote: 4-0, Neal Absent).
On June 27, 1983, adopted City Council Resolution No. 83-85, establishing the appropriations limit for Fiscal Year 1983/84 (Vote: 5-0).
On June 14, 1982, adopted City Council Resolution No. 82-100, establishing the appropriations limit for Fiscal Year 1982/83 (Vote: 3-1 McClellan, Flick Absent). 05/24/2022 C4 Page 7 of 10
CALCULATIONS FOR ALLOWABLE GROWTH RATE IN APPROPRIATIONS FOR FISCAL YEAR 2022/23 PER ARTICLE XIII-B
OF THE CALIFORNIA CONSTITUTION
Population Factor — Under the Revisions implemented by Proposition 111, the City now has the choice for each year of selecting the greater of:
•Increase in City Population
or
•Increase in County Population
The factors to choose from for the 2022/23 appropriation limit calculation are as follows:
City Population
Increase
County Population
Decrease
0.76% 0.08%
Inflation Factor — Under the revisions implemented by Proposition 111, the City now has a choice for each year selecting the greater of:
•Increase in California Per Capita Income
or
•Increase in Non-residential Assessed Valuation
The factors to choose from for the 2022/23 appropriation limit calculations are as follows:
Per Capita
Personal Income
Non-residential
AV growth
7.55% 4.54%
05/24/2022 C4 Page 8 of 10EXHIBIT 3
Calculation of Appropriation Limitation
2017/18 Factors:
-Per Capita Income Growth x 1.0369
-City Population Growth x 1.0299
2017/18 Limit $407,536,209
2018/19 Factors:
-Per Capita Income Growth x 1.0367
- County Population Growth x 1.0095
2018/19 Limit $426,506,469
2019/20 Factors:
-Per Capita Income Growth x 1.0385
-County Population Growth x 1.0052
2019/20 Limit $445,230,188
2020/21 Factors:
-Per Capita Income Growth x 1.0373
-City Population Growth x 1.0081
2020/21 Limit $465,578,156
2021/22 Factors:
-Per Capita Income Growth x 1.0573
-City Population Growth x 1.0068
2021/22 Limit $495,603,124
2022/23 Factors:
-Per Capita Income Growth x 1.0755
-City Population Growth x 1.0076
2022/23 Limit $537,072,121
05/24/2022 C4 Page 9 of 10
2022/23 OPERATING BUDGET APPROPRIATIONS
BASED UPON PROCEEDS OF TAXES
Taxes
Property Tax $26,827,462
Sales & Use Tax 30,491,354
Transient Lodging Tax 1,600,000
Business License Tax 3,426,650
Other Taxes 769,640
Sub-total: Taxes 63,115,106
Revenue from Other Agencies
Motor Vehicle In Lieu 50,000
Homeowners Relief 82,000
Investment Earnings 1,095,477
Total: 2022/23 Proceeds of Taxes $64,342,583
2022/23 Appropriations Limit $537,072,121
2022/23 Operating Revenue based upon
Proceeds of Taxes (11.89%) $64,342,583
2022/23 Appropriations Margin Limit (88.02%) $472,729,538 05/24/2022 C4 Page 10 of 10EXHIBIT 4