ACTION:
____________________________
Clerk/Secretary
Department: Finance Item No: C4
Prepared by: Mathew McDonald, Finance Manager Meeting Date: May 28, 2024 Approved by:
Mike Sylvia, Director/Treasurer
John Conley, City Manager Agenda Location: Consent Calendar SUBJECT: ADOPTION OF THE FISCAL YEAR 2024/25 APPROPRIATION LIMIT RECOMMENDATION: Adopt City Council Resolution No. 2024- , establishing the appropriations limit for Fiscal Year 2024/25.
CORRELATION TO CITY COUNCIL GOALS: Fiscal Responsibility.
PRIOR ACTION: On May 23, 2023, adopted City Council Resolution No. 2023-76, establishing the appropriations limit for Fiscal Year 2023/24 (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 the combined changes in population and inflation.
The City’s current appropriations limit for Fiscal Year 2023/24 is $558,954,910. According to the California Department of Finance, as of January 1, 2024, the City’s population decreased by 0.39 percent over the prior year. During the same period, the County of San Diego population increased by 0.07 percent. In calculating the appropriation limit increase, either the change in city or county population 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 3.62 percent when compared to the prior year.
The amount of the change in the local assessment roll due to local non-residential construction is 5.59 percent over the prior year.
These two factors, the local non-residential construction (1.0559) and the County Population Growth (1.0007) when multiplied allow the appropriation limit to be adjusted upwards by 5.66 percent, or $31,658,720 (Exhibit 3).
AGENDA
REPORT
CITY COUNCIL
COMMUNITY DEVELOPMENT COMMISSION
SUCCESSOR AGENCY
BUENA SANITATION DISTRICT
JOINT POWERS FINANCING AUTHORITY
Approved above recommendation, adopted City Council Resolution No. 2024-64.
Vote: 5-0
MEETING DATE: May 28, 2024 PAGE 2
SUBJECT: ADOPTION OF THE FISCAL YEAR 2024/25 APPROPRIATION LIMIT FISCAL IMPACT: The Fiscal Year 2023/24 appropriation limit was $558,954,910. By applying the factors for population and inflation, the appropriation limit for Fiscal Year 2024/25 will be $590,613,630.
This is the maximum amount of appropriations that can be funded by tax revenues. Fiscal Year 2024/25 operating revenues that are categorized as “Proceeds of Taxes” total $74,261,527 or 12.6 percent of the limit (Exhibit 4).
EXHIBITS:
1.City Council Resolution No. 2024- , establishing the appropriations limit for Fiscal Year 2024/25
2.Prior City Council Actions
3.Calculations for Allowable Growth Rate In Appropriations for Fiscal Year 2024/25 Per Article XIII-B of the California Constitution
4. 2024/25 Operating Budget Appropriations Based Upon Proceeds of Taxes 05/28/2024 C4 2 of 10
00097806 1
RESOLUTION NO. 2024-
A RESOLUTION OF THE CITY COUNCIL OF THE CHARTERED CITY
OF VISTA, CALIFORNIA, ESTABLISHING THE APPROPRIATIONS
LIMIT FOR FISCAL YEAR 2024/25
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 2023/24 was $558,954,910 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 2024/25 appropriations limit.
F. The growth factors used in calculating the Fiscal Year 2024/25 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 2024/25 Fiscal Year for the City of Vista based on the Fiscal Year 2023/24 appropriations limit adjusted by the following ratios of change:
Non-residential
Assessed Value
Growth
(Inflation Factor)
County Population
Change
(Population Factor)
Ratio of
Change Factor
(a) X (b)
1.0559 1.0007 1.0566
2. Action.
A. The appropriations limit for the City of Vista for Fiscal Year 2024/25 shall be $590,613,630 based upon the ratio of change for Fiscal Year 2023/24.
B. The Fiscal Year 2023/24 appropriations limit shall be amended when the Fiscal Year 2024/25 appropriations limit is established using the greater of the change in the local non- residential assessed value (5.59 percent) or the per capita income growth factor (3.62 percent) 05/28/2024 C4 3 of 10
EXHIBIT 1
RESOLUTION NO. 2024-
CITY COUNCIL OF THE CHARTERED CITY OF VISTA
PAGE 2
00097806 1
as well as the greater of the City (-0.39 percent) or County (0.07 percent) population growth factor.
3. Adoption. PASSED AND ADOPTED at a meeting of the City Council of the City of Vista held on May 28, 2024, by the following vote:
AYES:
NOES:
ABSTAIN:
APPROVED AS TO FORM:
WALTER CHUNG, CITY ATTORNEY
By:
JOHN FRANKLIN, MAYOR
ATTEST:
KATHY VALDEZ, CITY CLERK
By:
APPROVED
Walter C. Chung
20240520100457
05/28/2024 C4 4 of 10
EXHIBIT 2
ANNUAL ADOPTION OF THE APPROPRIATION LIMIT
PRIOR ACTIONS
On May 23, 2023, adopted City Council Resolution No. 2023-76, establishing the appropriations limit for Fiscal Year 2023/24 (Vote: 5-0).
On May 24, 2022, adopted City Council Resolution No. 2022-73, establishing the appropriations limit for Fiscal Year 2022/23 (Vote: 5-0).
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). 05/28/2024 C4 5 of 10
EXHIBIT 2
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).
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). 05/28/2024 C4 6 of 10
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).
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). 05/28/2024 C4 7 of 10
CALCULATIONS FOR ALLOWABLE GROWTH RATE IN APPROPRIATIONS FOR FISCAL YEAR 2024/25 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 2024/25 appropriation limit calculation are as follows:
City Population
Decrease
County Population
Increase
0.39% 0.07%
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 2024/25 appropriation limit calculations are as follows:
Per Capita
Personal Income
Non-residential
AV growth
3.62% 5.59%
05/28/2024 C4 8 of 10
EXHIBIT 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
2023/24 Factors:
-Per Capita Income Growth x 1.0444
-City Population Growth x 0.9965
2023/24 Limit $558,954,910
2024/25 Factors:
-Non-Residential AV Growth x 1.0559
-City Population Growth x 0.0007
2024/25 Limit $590,613,630
05/28/2024 C4 9 of 10
Taxes
Property Tax 33,589,780$
Sales & Use Tax 24,648,594
Cannabis Tax 7,200,000
Transient Lodging Tax 2,031,767
Business License Tax 2,771,654
Other Taxes 618,196
Sub-total: Taxes 70,859,991
Revenue from Other Agencies
Motor Vehicle In Lieu 75,743
Homeowners Relief 81,178
Investment Earnings 3,244,615
Total: 2024/25 Proceeds of Taxes 74,261,527$
2024/25 Appropriations Limit 590,613,630$
2024/25 Operating Revenue based upon
Proceeds of Taxes (12.6%)74,261,527$
2024/25 Appropriations Margin Limit (87.4%)516,352,102$ 2024/25 OPERATING BUDGET APPROPRIATIONS
BASED UPON PROCEEDS OF TAXES
05/28/2024 C4 10 of 10
EXHIBIT 4