3-2019 City of Orange Appropriation Limit Worksheets Report GANN
CITY OF ORANGE, CALIFORNIA
APPROPRIATIONS LIMIT WORKSHEET NO. 6
WITH INDEPENDENT ACCOUNTANTS’ REPORT
ON AGREED-UPON PROCEDURES APPLIED
TO APPROPRIATIONS LIMIT WORKSHEET NO. 6
FOR THE YEAR ENDED JUNE 30, 2019
2875 Michelle Drive, Suite 300 | Irvine, California 92606 | WNDECPA.com | 714.978.1300
1
INDEPENDENT ACCOUNTANTS’ REPORT
ON AGREED-UPON PROCEDURES APPLIED
TO APPROPRIATIONS LIMIT WORKSHEET NO. 6
Honorable City Council
of the City of Orange
Orange, California
We have performed the procedures enumerated below to the accompanying Appropriations Limit
Worksheet No. 6 of the City of Orange, California for the year ended June 30, 2019. These procedures,
which were agreed to by the City of Orange, California and the League of California Cities (as
presented in the League publication entitled “Article XIII-B Appropriations Limit Uniform
Guidelines”) were performed solely to assist the City of Orange, California in meeting the
requirements of Section 1.5 of Article XIIIB of the California Constitution. The City of Orange’s
management is responsible for the Appropriations Limit Worksheet No. 6.
This agreed-upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. The sufficiency of the
procedures is solely the responsibility of those parties specified in this report. Consequently, we make
no representation regarding the sufficiency of the procedures described below either for the purpose for
which this report has been requested or for any other purpose.
The procedures performed and our findings were as follows:
1.We obtained the completed Worksheet No. 6 for the year ended June 30, 2019, and compared the
limit and annual adjustment factors included in that worksheet to the limit and annual adjustment
factors that were adopted by resolution of the City Council. We also compared the population and
inflation options included in the aforementioned worksheet to those that were selected by a
recorded vote of the City Council.
The City used the fiscal year 2017/2018 population factor of 1.0009 instead of the City’s
population factor of 1.0069 for fiscal year 2018/2019.
2.For the accompanying Appropriations Limit Worksheet No. 6, we added last year’s limit to the
total adjustments, and compared the resulting amount to this year’s limit. We also recalculated the
adjustment factor and the adjustment for inflation and population, and compared the results to the
amounts on Worksheet No. 6.
Utilizing the current fiscal year population factor for the City as noted in Procedure 1 above, the
adopted appropriations limit for fiscal year 2018-2019 would have increased from $177,819,419 to
$178,919,887.
2
3. We compared the prior year appropriations limit presented in the accompanying Appropriations
Limit Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the
prior year.
No exceptions were noted as a result of our performing this procedure.
We were not engaged to, and did not, perform an audit, the objective of which would be the expression
of an opinion on the accompanying Appropriations Limit Worksheet No. 6. Accordingly, we do not
express such an opinion. Had we performed additional procedures, other matters might have come to
our attention that would have been reported to you. No procedures have been performed with respect
to the determination of the appropriation limit for the base year, as defined by the League publication
entitled “Article XIII-B Appropriations Limit Uniform Guidelines”.
This report is intended solely for the information and use of the City Council and management of the
City of Orange, California and is not intended to be, and should not be, used by anyone other than
these specified parties.
Irvine, California
December 3, 2019
3
CITY OF ORANGE
APPROPRIATIONS LIMIT WORKSHEET NO. 6
For the year ended June 30, 2019
Appropriations limit for fiscal year ended June 30, 2018 (see Note 2) $ 171,370,238
Adjustment factors for the fiscal year ended June 30, 2019 (see Note 2):
Inflation Population
Factor Factor Combined
(Note 3) (Note 4) Factor
1.03670000 1.00090000 1.03763303 x 0.03763303
Adjustment for inflation and population 6,449,181
Other adjustments (Note 5) -
Total adjustments 6,449,181
Appropriations limit for fiscal year ended June 30, 2019 $ 177,819,419
See accompanying Notes to Appropriations Limit Worksheet No. 6
4
CITY OF ORANGE
NOTES TO APPROPRIATIONS LIMIT WORKSHEET NO. 6
For the year ended June 30, 2019
1. PURPOSE OF LIMITED PROCEDURES REVIEW:
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative),
California governmental agencies are restricted as to the amount of annual appropriations from
proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of
Article XIIIB, the annual calculation of the appropriations limit is subject to a limited procedures
review in connection with the annual audit.
2. METHOD OF CALCULATION:
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1, 1990, the
appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87,
adjusted for the inflation and population factors discussed at Notes 3 and 4 below.
3. INFLATION FACTORS:
A California governmental agency may adjust its appropriations limit by either the annual
percentage change in the 4th quarter per capita personal income (which percentages are supplied by
the State Department of Finance), or the percentage change in the local assessment roll from the
preceding year due to the change of local nonresidential construction. The factor adopted by the
City of Orange (the City) for the fiscal year 2018-2019 represents the annual percentage change in
the 4th quarter per capita personal income.
4. POPULATION FACTORS:
A California governmental agency may adjust its appropriations limit by either the annual
percentage change of the jurisdiction’s own population, or the annual percentage change in
population in the County where the jurisdiction is located. The factor adopted by the City for fiscal
year 2018-2019 represents the annual percentage change in population of the City for the fiscal
year 2017-2018, which was incorrect.
5. OTHER ADJUSTMENTS:
A California government agency may be required to adjust its appropriations limit when certain
events occur, such as the transfer of responsibility for municipal services to, or from, another
government agency or private entity. The City had no such adjustments for the year ended
June 30, 2019.