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BACKGROUND In 1979, the voters passed Proposition 4 ("Prop 4") with the intent of limiting government spending. Prop 4 accomplishes this by limiting an agency's ability to keep and spend its tax revenue to a level determined by its base year 1978/79FY spending, adjusted annually by an inflation factor and the agency's increase in population. The factors used to compute the Prop 4 limits are: (1) either the percentage change of the California per capita personal income or the percentage change in the local assessment roll from the preceding year due to the addition of local nonresidential construction in the City, and (2) either the City's own population growth or the population growth of the entire County. DISCUSSION The State of California Department of Finance recently provided the California per capita personal income change percentage, computed as 2.51%. This percentage change exceeds the percentage change in Pleasanton's local assessment roll due to the reduction in the assessed value for non-residential properties as detailed by the County Assessor's office. In addition, Alameda County's population growth of 0.79% exceeds the City's population growth of 0.63%. Therefore, the calculation for the 2011/12FY is based on the percentage change of the California per capita personal income and the County population growth. The attached Exhibit A details the calculation of the Prop 4 appropriations limit for the 2011/12FY of $391,068,060. Submitted by: Approved by: 6,/ Emily Er Nelson Fialho Director of Finance City Manager Attachments: 1. Resolution 2. 2011/12FY Appropriations Limit Calculation Page 2 of 2