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CITY COUNCIL AGENDA ITEM NO. 2

Meeting Date: June 27, 2006

Subject/Title: Approve a resolution adopting the 2006/07 Prop 4 Appropriation Limit

Prepared by: Douglas Alessio, Business Services Manager

Submitted by: Pamela Ehler, Director of Finance and Information Systems

RECOMMENDATION
Approve a resolution adopting the 2006/07 Prop 4 Appropriations Limitation using the change in the City population factor of 9.14% to calculate the limit.

PREVIOUS ACTION
None

BACKGROUND
Article XIIIB of the California State Constitution, more commonly referred to as the Gann Initiative, was adopted by California voters in 1980 and placed limits on the amount of proceeds of taxes that state and local governmental agencies can appropriate each fiscal year. The Appropriations Limitation does not apply to enterprise funds, redevelopment or bond issues.

The Limit is based on actual appropriations during the 1986/87 fiscal year, and is increased each year using the growth of population and inflation. In June 1990, the voters approved Proposition 111 which provided new adjustment formulas which makes the Appropriations Limit more responsive to local growth issues. The annual adjustment made to the Limit is based on a formula which includes the following factors:

Change in City population or Change in population for the entire County
AND
Change in State per capita income or Change in non-residential assessed valuation

Typically, an agency selects the factors which provide for the largest growth in the Limit. For the calculation of the 2006/2007 Limit, the Change in the City Population is used as it provides a greater Limit.

Article XIIIB specifies that local jurisdictions select their cost-of-living factor to compute their appropriation limit by vote of their governing body. The cost of living factor provided here is per capita personal income at 3.96%. If the percentage change in per capita personal income is selected, the percentage change to be used in setting the 2006/07 Appropriation Limit are:

Appropriation Limit for Fiscal Year 2005/06 $ 37,884,693

Population in January 2006 45,892
Population in January 2005 42,050
Percentage Increase in Population - City of Brentwood 9.14%
Percentage Increase in Contra Costa County 1.00%

California Per Capita Personal Income 3.96%
Factor to be applied to Prior Year 1.134619
(Population Factor x Per Capita Factor)

Appropriation Limit for Fiscal Years 2006/07 $ 42,984,709

FISCAL IMPACT
None

Attachment:
Resolution

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD ADOPTING THE PROP 4 APPROPRIATION LIMIT FOR THE FISCAL YEAR OF 2006/07

WHEREAS, the Department of Finance staff have notified the City of the change in the California per capita personal income and the change in the local assessment roll due to local nonresidential construction in which the City has the option to use the greater percentage change, which change is an increase of 3.96% in the California per capita personal income for the prior calendar year, and;

WHEREAS, the Department of Finance staff have notified the City of the change in population of the City and the entire Contra Costa County in which the City has the option to use the greater percentage change, which change is an increase of 9.14% for the City of Brentwood for the prior calendar year, and;

WHEREAS, pursuant to California Constitution Article XIIIB, Section 1 and Government Code sections 7900 et seq., and pursuant to the guidelines set forth by Proposition 111, the City appropriations limit must be adjusted for changes from the base year of 1986/87 to the fiscal year ending June 30, 2005.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood, adopts the appropriations limit for the City of Brentwood for fiscal year ending June 30, 2006 is $42,984,709.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on June 27, 2006 by the following vote:

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