to: dirk brazil, interim city manager

2 STAFF REPORT

CITY COUNCIL MEETING OF OCTOBER 16, 2018

TO: Dirk Brazil , Interim City Manager

FROM: Olga Tikhomirova, Financial Services Supervisor

RE: Resolution of the City Council of the City of South Lake Tahoe Establishing the Appropriation Limit for Fiscal year 2018-2019 in Compliance with Proposition 111 in the Amount of $75,031 ,112

RECOMMENDATION:

Adopt the resolution establishing appropriation limit at $75,031 ,112 for fiscal year 2018/2019.

BACKGROUND AND DISCUSSION:

Proposition 4 passed in 1979 and Proposition 111 passed in 1990, known as the Gann Initiative; created a restriction on the amount of revenue which can be appropriated in any fiscal year. The limit is based on actual appropriations during the 1978-79 fiscal year (base year) , and is allowed to increase each year based upon the calculation using a percentage change in population as of January 1 of each year in conjunction with a change in the cost of living from previous fiscal year.

Population estimates by the State Department of Finance as of January 1, 2018 indicate 3.91 percent change in the City and 1.17 percent change County-wide (Worksheet 5B). The per capita personal income (cost of living factor) changed by a ratio of 1.0367 from fiscal year 2017-2018. Only revenues referred to as "proceeds of taxes" are restricted by the limit. Proceeds of taxes for fiscal year 2018/2019 are calculated at $35,687,800 (Worksheet 2).

FINANCIAL AND/OR POLICY IMPLICATIONS:

The fiscal year 2018/2019 appropriations limit is $75,031 , 112 (Worksheet 4 ). The City's appropriation subject to the limit from proceeds of taxes is $34,437,154. Therefore, the City's appropriation is under the legal limit by $40,593,958.

CITY COUNCIL WORKPLAN:

• Strategic Priority: Fiscal Sustainability

By: Concurrence:

~-m~~ Debbie McIntyre Director of Finance

Olg Ti homirova Financial Services Supervisor

Approved by:

Dirk Brazil, Interim City Manager

Attachments: Appropriations Limit Calculation worksheets

APPROPRIATIONS LIMIT 2018-2019

WORKSHEET# 1

DIVISION USER FEES REVENUE REVENUE EXPENSE

BUDGET TOTAL BUDGET

10001130-35320 RENTS 264.00 10001130-34120 CODES 0.00

TOTAL CITY CLERK 264.00 443,977.00

10001730-34180 COPY CHARGES 500.00 10001840-34032 IS SERVICES 39,000.00

TOTAL ACCOUNTING 39,500.00 1,539,385.00

10003110-34180 COPY CHARGES 50.00 10003210-32116 TRANSPORTATION 1,500.00 10003210-32120 ENCROACHMENT 70,400.00 10003210-32118 OBSTRUCTION 800.00 10003210-34135 PARCEL MERGE 6,000.00 10003210-34150 ENGINEERING INPECTIONS 500.00 10003210-34155 PLAN CHECK 500.00

TOTAL ENGINEERING 79,750.00 921 ,106.00

10003710-34130 PLANNING PERMITS 58,390.00 10003710-34131 PERMITS ALLOCATION 0.00

TOTAL PLANNING 58,390.00 721 ,724.00

10002210-34520 SVC 500.00 10002220-34220 SUPPRESS.CONTRACT 0.00 10002220-34222 STRUCTURAL FIRE 0.00 10002230-34223 MISCELL 25,000.00 10002220-34260 EMS 0.00 Moved to 236-02262 10002220-36283 OVERTIME REIMBURS. 100,000.00 10002230-32201 BLDG STRUCT 0.00 10002230-34230 SPECIAL INSP 0.00 10002230-34231 ENGINE COINSPECT 0.00

TOTAL FIRE DEPARTMENT 125,500.00 6,456,743.00

10002110-34213 BOOKING FEES 4,000.00 1 0002110-32114 TAXI 300.00 10002110-33221 POLICE TECH .GRANTS 0.00 10002110-34211 PD INCIDENTAL 21 ,000.00 10002110-34210 SPECIAL SVC 62,775.00 10002150-33206 POST 40,000.00

TOTAL POLICE 128,075.00 10,291 ,522.00

10004105-3xx COMMUNITY SVCS ADMIN 10004110-3xx GOLF 150,000.00 10004120-3xx PARKS 0.00

J:\Accountant\GANN Limit\2018\worksheets 2018-2019

10004130-3xx 10004140-3xx 10004150-3xx 10004160-3xx 10004170-3xx 10004210-3xx 10004220-3xx 10004225-3XX 10004230-3xx 10004240-3xx 10004260-3xx 10004270-3xx 10004280-3xx 10004290-3xx

CAMPGROUND BEACH PARK SVC CONTRACTS PARK MAINTENANCE CLASSES RECREATION PROGRAMS SPECIAL EVENTS SENIOR CNTR SPORTS ICE SKATING POOL YOUTH REC SVC

TOTAL PARKS & REC

TOTAL GENERAL FUND USER FEES


842,000.00 0.00 0.00 0.00

169,500.00 0.00

283,000.00 25,000.00

4,900.00 0.00 0.00 0.00 0.00 0.00

1,474,400.00

Revenues 1,905,879.00

2,309,081.00

Expenditures 22,683,538.00

WORKSHEET# 2

(less use of FB) GENERAL FUND REVENUE 42,227,433.00

TOTAL GF REVENUES 42,227,433.00

TAXES Revenue PROPERTY TAXES 7,817,000.00 Summary SALES TAA 8,333,000.00 page BUSINESS LICENSE 1,516,000.00

TOT Taxes 15,469,800.00 31601and 31702 OTHER TAXES 410,000.00

TOTAL taxes 33,545,800.00

REVENUE FROM STATE 10001511-33201 Motor Vehicle in lieu 2,080,000.00 includes 33202 also 10001511-33207 Off Highway Vehicles 0.00 10001511-33204 HOPTR 60,000.00 10001511-33208 MANDATES SB Reimburs. 2,000.00

TOTAL REVENUE FROM STATE 2,142,000.00

PROCEEDS OF TAXES 35,687,800.00 NON TAX PROCEEDS 6,539,633.00

TOTAL PROCEEDS 42,227,433.00 LESS INTEREST INCOME 100,000.00 NET 42,127,433.00

TOTAL TAXES NON-TAX TOTAL 42,227,433.00 35,687,800.00 6,539,633.00 EXCLUSIONS (# 7) 1,250,646.00 1,250,646.00 INTEREST 100,000.00 100,000.00 NET 40,876,787.00 34,437,154.00 6,439,633.00 PERCENT 100.00% 84.25% 15.75% ALLOCATION OF INTEREST 100,000.00 84,246 15,754 ADJUSTED TOTAL 40,976,787.00 34,521 ,400.23 6,455,386.77


CITY: FY:

South Lake Tahoe 2018-2019

APPROPRIATION LIMIT

INTEREST EARNINGS PRODUCED BY TAXES

WORKSHEET# 3

BUDGET: X or ACTUAL:

A. NON-INTEREST TAX PROCEEDS

B. MINUS EXCLUSIONS

C. NET INVESTED TAXES

D. TOTAL NON-INTEREST BUDGET

E. TAX PROCEEDS AS PERCENT OF BUDGET

F. INTEREST EARNINGS

G. AMOUNT OF INTEREST EARNED FROM TAXES

H. AMOUNT OF INTEREST EARNED FROM NON-TAXES

I. Take the result of steps G and H Copy on to worksheet # 2


AMOUNT

35,687,800

1,250,646

34,437,154

40,876,787

0.84246

100,000

84,246

15,754

SOURCE

(Worksheet# 2)

(Worksheet # 7)

(A- B)

(Worksheet# 2)

(CID)

Budget or Actual

(E * F)

(F - G)

APPROPRIATION SUBJECT

TO LIMITATION

CITY: FY:



A. PROCEEDS OF TAXES

8. EXCLUSIONS

C. APPROPRIATIONS SUBJECT TO LIMITATION

D. CURRENT YEAR LIMIT

E. OVER (UNDER) LIMIT

WORKSHEET# 4


AMOUNT

35,687,800

1,250,646

34,437,154

75,031 ,112

(40,593,958)

SOURCE

(Worksheet# 2)

(Worksheet# 7)

(A - 8)

(Worksheet# 6)

(C - D)

WORKSHEET# 5A

May 2018 Attachment A

A. Price Factor: Article XIII B specifies that local jurisdictions select their cost of living factor to compute their appropriation limit by a vote of their governing body. The cost of living factor provided here is per capita personal income. If the percentage change in per capita personal income is selected, the percentage change to be used in setting the fiscal year 2018-19 appropriation limit is:

Per Capita Personal Income

Fiscal Year (FY)

Percentage change over prior year

2018-19 3.67

B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2018-19 appropriation limit.

2018-19:

Per Capita Cost of Living Change = 3.67 percent Population Change= 0.78 percent

Per Capita Cost of Living converted to a ratio:

Population converted to a ratio:

3.67 + 100 = 1.0367 100

0.78 + 100 = 1.0078 100

INFLATION FACTOR

Calculation of factor for FY 2018-19: 1.0367 X 1.0078 = 1.0448

WORKSHEET# 58

Fiscal Year 2018-19

Attachment B Annual Percent Change in Population Minus Exclusions*

January 1, 2017 to January 1, 2018 and Total Population, January 1, 2018

County

City

El Dorado

Placerville

South Lake Tahoe

Unincorporated

County Tota l

Percent Change -- Population Minus Exclusjons ··· 2017-2018 1-1-17 1-1-18

0.70

3.91

0.82

1.17

10,568

21 ,068

154,490

186,126

10,642

21 ,892

155,764

188,298

I21ll. Population

1-1-2018

10,642

21 ,892

155,865

188,399

1·17 + 100 = 1.0117 POPULATION PERCENTAGE 100

POPULATION FACTOR:

The City may adjust its appropriations limit by either the percentage change in the City's own population growth, or the percentage change in the population growth for El Dorado County. The above factor represents the annual percentage change in population for El Dorado County.

*Exclusions include residents on federal military installations and group quarters residents in state mental institutions , state and federal correctional institutions and veteran homes.

APPROPRIATION LIMIT

CITY: FY: BUDGET:


WORKSHEET# 6

_x_ or ACTUAL:-----

A LAST YEAR'S LIMIT (17-18)

B. ADJUSTMENTFACTORS

1. Population % 2. Inflation%

Total adjustment%

C. ANNUAL ADJUSTMENT$

D. OTHER ADJUSTMENTS:

Prior Year Limit Correction ( + )

Sub-Total

E. TOTAL ADJUSTMENTS

F. THIS YEAR'S LIMIT (16-17)


AMOUNT

71 ,537,957

1.0117 1.0367

1.0488

3,493,155

0

0

3,493,155

75,031 ,112

SOURCE

(Worksheet # 5) (State Finance or Assessor)

(81*82)

A*((B-1 )*1)

(C+D)

(A+E)

APPROPRIATION LIMIT

WORKSHEET# 7

EXCLUSIONS

FEDERAL MANDATES

41119 ALL UNEMPLOYMENT INS 41128-41129 ALL MEDICARE

TOTAL FEDERAL

STATE MANDATES

10003410-44091 HAZARDOUS WASTE 20103510-44091 HAZARDOUS WASTE 20703610-44091 HAZARDOUS WASTE

TOTAL HAZ WASTE

10002220-41040 FLSA OT (91% OF FIRE OT) 20103510-33205 OVERLAY (Gas Tax Funds)

TOTAL STATE

GRAND TOTAL EXCLUSIONS


125,683.00 244,113.00

8,350.00 2,000.00 2,000.00

318,500.00 550,000.00

Budget

369,796.00

12,350.00

868,500.00

1,250,646.00

CITY OF SOUTH LAKE TAHOE

RESOLUTION NO. ________ _

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SOUTH LAKE TAHOE ESTABLISHING THE APPROPRIATION LIMIT FOR THE FISCAL YEAR 2018/2019 IN COMPLIANCE WITH PROPOSITION 111 IN THE AMOUNT OF $75,031,112

WHEREAS, Article XIIIB of the California Constitution and Section 7910 of the Government Code of the State of California provide that the governing body of each jurisdiction shall by resolution establish its appropriation limit for the following fiscal year; and

WHEREAS, Proposition 111 approved in November 1990 now requires that the limit be calculated using new growth factors; and

WHEREAS, the City Council has reviewed the appropriate growth factors and does hereby choose the population growth within El Dorado County to better reflect the average daily population; and

WHEREAS, the City Council has reviewed the appropriate cost of living factors and does hereby choose the per capita personal income factor; and

WHEREAS, documentation used in determination of the appropnation limit has been available to the public since September 19, 2018, in the Accounting Division, meeting the required fifteen (15) day period for public inspection as required by Jaw; and

WHEREAS, the City Council of the City of South Lake Tahoe now desires to adopt said appropriation limit,

NOW THEREFORE, BE IT RESOLVED by the City Council of the City of South Lake Tahoe that the appropriation limit for the 2018/2019 fiscal year is established as being $75,031,112.

PASSED AND ADOPTED by the City Council of the City of South Lake Tahoe at a meeting on October l 6t\ 2018, by the following vote:

AYES: Council members

NOES: Council members

ABSENT: Council members

ABSTAIN: Council members __________________ _

Wendy David, Mayor

ATTEST:

, City Clerk

APPROPRIATIONS LIMIT 2018-2019

WORKSHEET# 1

DIVISION USER FEES REVENUE REVENUE EXPENSE

BUDGET TOTAL BUDGET

10001130-35320 RENTS 264.00 10001130-34120 CODES 0.00

TOTAL CITY CLERK 264.00 443,977.00

10001730-34180 COPY CHARGES 500.00 10001840-34032 IS SERVICES 39,000.00

TOTAL ACCOUNTING 39,500.00 1,539,385.00

10003110-34180 COPY CHARGES 50.00 10003210-32116 TRANSPORTATION 1,500.00 10003210-32120 ENCROACHMENT 70.400.00 10003210-32118 OBSTRUCTION 800.00 10003210-34135 PARCEL MERGE 6,000.00 10003210-34150 ENGINEERING INPECTIONS 500.00 10003210-34155 PLAN CHECK 500.00

TOTAL ENGINEERING 79,750.00 921 ,106.00

10003710-34130 PLANNING PERMITS 58,390.00 10003710-34131 PERMITS ALLOCATION 0.00

TOTAL PLANNING 58,390.00 721 ,724.00

10002210-34520 SVC 500.00 10002220-34220 SUPPRESS.CONTRACT 0.00 10002220-34222 STRUCTURAL FIRE 0.00 10002230-34223 MISCELL 25,000.00 10002220-34260 EMS 0.00 Moved to 236-02262 10002220-36283 OVERTIME REIMBURS. 100,000.00 10002230-32201 BLDG STRUCT 0.00 10002230-34230 SPECIAL INSP 0.00 10002230-34231 ENGINE COINSPECT 0.00

TOTAL FIRE DEPARTMENT 125,500.00 6.456,743.00

10002110-34213 BOOKING FEES 4,000.00 10002110-32114 TAXI 300.00 10002110-33221 POLICE TECH.GRANTS 0.00 10002110-34211 PD INCIDENTAL 21 ,000.00 10002110-34210 SPECIAL SVC 62,775.00 10002150-33206 POST 40,000.00

TOTAL POLICE 128,075.00 10,291 ,522.00

10004105-3xx COMMUNITY SVCS ADMIN 10004110-3xx GOLF 150,000.00 10004120-3xx PARKS 0.00


10004130-3xx 10004140-3xx 10004150-3xx 10004160-3xx 10004170-3xx 10004210-3xx 10004220-3xx 10004225-3XX 10004230-3xx 10004240-3xx 10004260-3xx 10004270-3xx 10004280-3xx 10004290-3xx

CAMPGROUND BEACH PARK SVC CONTRACTS PARK MAINTENANCE CLASSES RECREATION PROGRAMS SPECIAL EVENTS SENIOR CNTR SPORTS ICE SKATING POOL YOUTH REC SVC

TOTAL PARKS & REC

TOTAL GENERAL FUND USER FEES


842,000.00 0.00 0.00 0.00

169,500.00 0.00

283,000.00 25,000.00

4,900.00 0.00 0.00 0.00 0.00 0.00

1,474,400.00

Revenues 1,905,879.00

2,309,081 .00

Expenditures 22,683,538.00

WORKSHEET# 2

(less use of FB) GENERAL FUND REVENUE 42,227,433.00

TOTAL GF REVENUES 42,227,433.00

TAXES Revenue PROPERTY TAXES 7,817,000.00 Summary SALES TAX 8,333,000.00 page BUSINESS LICENSE 1,516,000.00

TOT Taxes 15,469,800.00 31601and 31702 OTHER TAXES 410,000.00

TOTAL taxes 33,545,800.00

REVENUE FROM STATE 10001511-33201 Motor Vehicle in lieu 2,080,000.00 includes 33202 also 10001511-33207 Off Highway Vehicles 0.00 10001511-33204 HOPTR 60,000.00 10001511-33208 MANDATES SB Reimburs. 2,000.00

TOTAL REVENUE FROM STATE 2,142,000.00

PROCEEDS OF TAXES 35,687,800.00 NON TAX PROCEEDS 6,539,633.00

TOTAL PROCEEDS 42,227,433.00 LESS INTEREST INCOME 100,000.00 NET 42,127,433.00

TOTAL TAXES NON-TAX TOTAL 42,227,433.00 35,687,800.00 6,539,633.00 EXCLUSIONS (# 7) 1,250,646.00 1,250,646.00 INTEREST 100,000.00 100,000.00 NET 40,876,787.00 34,437,154.00 6,439,633.00 PERCENT 100.00% 84.25% 15.75% ALLOCATION OF INTEREST 100,000.00 84,246 15,754 ADJUSTED TOTAL 40,976,787.00 34,521 ,400.23 6,455,386.77

J :\Accountant\GAN N Limit\2018\worksheets 2018-2019

APPROPRIATION LIMIT

CITY: South Lake Tahoe FY: 2018-2019 BUDGET: X or ACTUAL:

A. NON-INTEREST TAX PROCEEDS

B. MINUS EXCLUSIONS

C. NET INVESTED TAXES

D. TOTAL NON-INTEREST BUDGET

E. TAX PROCEEDS AS PERCENT OF BUDGET

F. INTEREST EARNINGS

G. AMOUNT OF INTEREST EARNED FROM TAXES

INTEREST EARNINGS PRODUCED BY TAXES

WORKSHEET# 3

AMOUNT

35,687,800

1,250,646

34,437,154

40,876,787

0.84246

100,000

84,246

H. AMOUNT OF INTEREST EARNED FROM NON-TAXES 15,754

I. Take the result of steps G and H Copy on to worksheet # 2


SOURCE

(Worksheet# 2)

(Worksheet # 7)

(A - B)

(Worksheet# 2)

(CID)

Budget or Actual

(E * F)

(F - G)

APPROPRIATION SUBJECT

TO LIMITATION

CITY: FY:



A. PROCEEDS OF TAXES

B. EXCLUSIONS

C. APPROPRIATIONS SUBJECT TO LIMITATION

D. CURRENT YEAR LIMIT

E. OVER (UNDER) LIMIT

WORKSHEET# 4


AMOUNT

35,687,800

1,250,646

34,437,154

75,031 ,112

(40,593,958)

SOURCE

(Worksheet# 2)

(Worksheet # 7)

(A - B)

(Worksheet# 6)

(C - D)

WORKSHEET# 5A

May 2018 Attachment A

A. Price Factor: Article XIII B specifies that local jurisdictions select their cost of living factor to compute their appropriation limit by a vote of their governing body. The cost of living factor provided here is per capita personal income. If the percentage change in per capita personal income is selected , the percentage change to be used in setting the fiscal year 2018-19 appropriation limit is:

Per Capita Personal Income

Fiscal Year (FY)

Percentage change over prior year

2018-19 3.67

B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2018-19 appropriation limit.

2018-19:

Per Capita Cost of Living Change = 3.67 percent Population Change= 0.78 percent

Per Capita Cost of Living converted to a ratio:

Population converted to a ratio:

3.67 + 100 = 1.0367 100

0.78 + 100 = 1.0078 100

INFLATION FACTOR

Calculation of factor for FY 2018-19: 1.0367 X 1.0078 = 1.0448

WORKSHEET# 58

Fiscal Year 2018-19

Attachment B Annual Percent Change in Population Minus Exclusions*

January 1, 2017 to January 1, 2018 and Total Population, January 1, 2018

County

City

El Dorado

Placerville

South Lake Tahoe

Unincorporated

County Total

Percent Change 2017-2018

0.70

3.91

0.82

1.17

-- Population Minus Exclusions ··· 1-1-17

10,568

21 ,068

154,490

186,126

1-1-18

10,642

21 ,892

155,764

188,298

I21ll. Population

1-1-2018

10,642

21 ,892

155,865

188,399

1.17 + 100

100 1.0117 POPULATION PERCENTAGE

POPULATION FACTOR:

The City may adjust its appropriations limit by either the percentage change in the City's own population growth, or the percentage change in the population growth for El Dorado County. The above factor represents the annual percentage change in population for El Dorado County.

*Exclusions include residents on federal military installations and group quarters residents in state mental institutions , state and federal correctional institutions and veteran homes.

APPROPRIATION LIMIT

CITY: FY: BUDGET:


WORKSHEET# 6

_x_ or ACTUAL:-----

A. LAST YEAR'S LIMIT (17-18)

B. ADJUSTMENTFACTORS

1. Population % 2. Inflation%

Total adjustment%

C. ANNUAL ADJUSTMENT$

D. OTHER ADJUSTMENTS:

Prior Year Limit Correction ( + )

Sub-Total

E. TOTAL ADJUSTMENTS

F. THIS YEAR'S LIMIT (16-17)


AMOUNT

71 ,537,957

1.0117 1.0367

1.0488

3,493,155

0

0

3,493,155

75,031 ,112

SOURCE

(Worksheet# 5) (State Finance or Assessor)

(81*82)

A*((B-1 )*1)

(C+D)

(A+E)

APPROPRIATION LIMIT

WORKSHEET# 7

EXCLUSIONS

FEDERAL MANDATES

41 119 ALL UNEMPLOYMENT INS 41128-41129 ALL MEDICARE

TOTAL FEDERAL

STATE MANDATES

10003410-44091 HAZARDOUS WASTE 20103510-44091 HAZARDOUS WASTE 20703610-44091 HAZARDOUS WASTE

TOTAL HAZ WASTE

10002220-41040 FLSA OT (91 % OF FIRE OT) 20103510-33205 OVERLAY (Gas Tax Funds)

TOTAL STATE

GRAND TOTAL EXCLUSIONS


125,683.00 244,113.00

8,350.00 2,000.00 2,000.00

318,500.00 550,000.00

Budget

369,796.00

12,350.00

868,500.00

1,250,646.00

to: dirk brazil, interim city manager

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