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6.2.A. - Page 1 <br />REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br />June 27, 2011 <br />SUBJECT <br />Annual Appropriations Limit for Fiscal Year 2011 -12 <br />RECOMMENDATION <br />By resolution, establish the appropriations limit for Fiscal Year 2011 -12. <br />BACKGROUND <br />In 1979 the voters of the State of California passed Proposition 4, the Gann spending <br />limit initiative. The initiative establishes and defines annual appropriation limits for state <br />and local government entities and requires that the City adopt an appropriations limit <br />annually. Moreover, the initiative provides for annual adjustments for changes in <br />population (for the City or County, whichever is greater) and either the statewide <br />percentage change in per capita personal income or percentage change in assessed <br />valuation attributable to growth in non - residential new construction. <br />The recommended appropriations limit for FY 2011 -12 is $374,820,769 while the limit <br />for FY 2010 -11 was $361,486,037. The estimated proceeds of taxes for FY 2011 -12 are <br />only $65,674,960, well below the $374,820,769 legal limit. <br />The attachment displays the calculations utilized to arrive at this amount. <br />ALTERNATIVES <br />There are no practical alternatives as Article XIIIB of the State Constitution requires that <br />the state and all local entities adopt an appropriations limit annually. <br />FISCAL IMPACT <br />There is no fiscal impact associated with adopting the recommended appropriations <br />limit as the appropriation of the proceeds of taxes is well under the recommended limit. <br />BRIAN PONTY <br />FINANCE DIRECTOR <br />ROBERT B. BELL <br />CITY MANAGER <br />