8G Consent 2011 0606 - Laserfiche WebLink

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CITY OF SAN LEANDRO APPROVED AND STAFF REPORT FORWARDED TO CITY COUNCIL — DATE June 6, 2011 Stephen L. Hollister TO: Stephen L. Hollister, City Manager City Manager FROM: Tracy Vesely, Finance Director Finance Department BY: Mary Ann Perini, Budget and Compliance Manager 1�{� Finance Department SUBJECT PROJ ECT /PROJ ECT DESCRI PT ION: RESOLUTION ESTABLISHING THE CITY'S APPROPRIATION LIMIT FOR FISCAL YEAR 2011 -12 SUMMARY AND RECOMMENDATION Staff recommends City Council approval of a resolution establishing the City's appropriation limit for fiscal year 2011-12. Staff has completed the calculations required for determining the City's appropriation limit for 2011 -12, which is 5153,803,850. Budget appropriations that are subject to the 2011-12 limitation total 574,040,811, which is 579,763,039 below the limit. BACKGROUND On November 6, 1979, California voters passed Proposition 4. Statutes clarifying certain provisions of the proposition are now codified in article XIIIB of the California Constitution. This Article is commonly known as the "Gann Initiative." The Initiative established constitutional spending limits allowable for California governmental agencies based on the Consumer Price Index and population growth. Concurrent with Proposition 4, the Revenue and Taxation Code, Section 7910, requires each local governmental unit to establish its appropriations limit by the beginning of each fiscal year. Due to Gann's constraint on State and local governments to respond effectively to the demands of rapid growth around California, a legislative- business -labor coalition drafted and supported Proposition 111, which was adopted June 5, 1990. Proposition 111 makes crucial adjustments to the Gann by allowing it the flexibility to operate in a growing economy while retaining its purpose in placing a limit on government spending. The following are the changes Proposition 111 made to the Gann Initiative. Prior law required spending limits to be tied to the Consumer Price Index or California Per Capita Personal Income growth factor, whichever was lower. The new provisions allow an agency to select the California Per Capita Personal Income growth factor or the Non- residential Property Assessed Valuation growth factor, whichever is higher. Cities may choose to use the percentage rate of change in population within the City or county, whichever is higher.