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Home My WebLink AboutMINUTES - 08161994 - 1.105 TO: BOARD OF SUPERVISORS :,•r:s L- Contra FROM: Phil Batchelor, County Administrator Costa . .` .'` Z County �';ti� 4e DATE: August 11, 1994 a cuur+'� SUBJECT: LEGISLATION: AB 2788 (W. BROWN) SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: ADOPT a position in OPPOSITION to any amendments to AB 2788 by Assembly Speaker Willie Brown which would use the increase in the County's Proposition 4 (Gann) limit as a basis for determining the County maintenance of effort requirement in order to be eligible to receive Proposition 172 sales tax revenue for law enforcement programs. BACKGROUND: Assembly Speaker Willie Brown has introduced AB 2788 which would require a maintenance of effort in order to be eligible to receive Proposition 172 funds which were approved by the voters at a special election in 1993. Proposition 172 made permanent a one-half cent sales tax increase, the proceeds of which must be used on specified "public safety" functions, including law enforcement, criminal prosecution and fire suppression. Proposition 172 had no maintenance of effort requirement, but various members of thee Legislature have sought to impose a maintenance of effort requirement as a condition of receiving Proposition 172 funds. Speaker Brown's bill, as amended June 1, 1994, would simply require that a city or county demonstrate that it was spending on "public safety" functions at least the amount of money that was spent in the 1992-93 fiscal year. This type of requirement does not present any immediate problems for Contra Costa County and we did not, therefore, ask the Board of Supervisors to take a position on the bill. CONTINUED ON ATTACHMENT: YES SIGNATURE: L/ � -4—' RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURES) ACTIGN OF BOARD ON August 161994 APPROVED AS RECOMMENDED OTHER f VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. C� ATTESTED ` Contact: PHIL BATA LOR.CLERK OF THE BOARD OF cc: See Page 2 SUPERVISORS AND COUNTY ADMINISTRATOR By ,DEPUTY However, amendments to AB 2788 have been drafted which staff have been asked to review for their impact on the County. These amendments would provide that any city which was unable to meet its maintenance of effort requirement would lose the amount of Proposition 172 funds equal to the amount by which the city was short of meeting its maintenance of effort requirement. This amount would be allocated to the county. The amendments would further provide that any county which was unable to meet its maintenance of effort requirement would lose the amount of Proposition 172 funds equal to the amount by which the county was short of meeting its maintenance of effort requirement. This amount would be allocated to the cities in that county. The real problem comes with the way the proposed amendments determine the amount of the maintenance of effort requirement. The proposed amendments to AB 2788 require that the base year amount spent on public safety programs be increased by the percentage increase of the county's or city's Proposition 4 (Gann) limit each year. This amount would then be the amount which would have to be spent in the current fiscal year in order to be eligible for the full allocation of Proposition 172 funds. In the past, a county's or city's Proposition 4 limit (the maximum amount of tax proceeds that a county or city is authorized to spend in any given year, regardless of the amount of revenue available) was increased (or decreased) from one year to the next by a factor which included changes in the Consumer Price Index (CPI) and changes in population. Proposition 111, approved by the voters at the Primary Election in June, 1990, altered the manner in which a local agency could calculate the increase in its Proposition 4 limit. Instead of using the CPI, a local agency could use a formula which looked at the increase in the assessed value in the jurisdiction due to non- residential new construction as a percentage of the total change in the assessed value in the jurisdiction. This was done because of the feeling that changes in non- residential construction signaled changes in the demand for public services in a way not reflected by population changes alone. However, it needs to be borne in mind that the use of this alternative formula bears no relationship whatever to the increase in the local agency's revenue base or its ability to fund public service programs. In the case of Contra Costa County, because of a substantial drop in residential construction during the 1992-93 fiscal year (the base year for the proposed Proposition 172 maintenance of effort), and a dramatic increase in non-residential construction for a few commercial and industrial complexes, the Proposition 4 increase for the 1993-94 fiscal year is 13.74% and for the 1994-95 fiscal year it is 44.010! As a result, while our 1994-95 funding for public service programs is actually above the 1992-93 level, the 1994-95 County Budget would be $33.8 million below the maintenance of effort requirement for Proposition 172. This means that the County would lose substantially all of its Proposition 172 funds, thereby immediately putting a $33.8 million hole in the adopted 1994-95 fiscal year County Budget! We believe that, if the Legislature, as a matter of policy, wishes to impose a maintenance of effort requirement, any inflation factor that is used needs to be more closely related to increases in the County's discretionary revenue sources, not to a Proposition 4 inflation factor which is used for an entirely different purpose and bears no relationship whatever to revenue increases for the County. We are, therefore, recommending that the Board of Supervisors oppose any amendments to AB 2788 which would use changes in the Proposition 4 limit to determine changes in the Proposition 172 maintenance of effort requirement. cc: County Administrator District Attorney Sheriff-Coroner County Probation Officer Auditor-Controller Tony Enea, Senior Deputy County Administrator George Roemer, Senior Deputy County Administrator -2- Office of COUNTY AUDITOR-CONTROLLER Contra Costa County Martinez, California August 8, 1994 To: Claude Van Marter, Assistant County Administrator From: Roger Edwards, Principal Accountant - Auditor/Contr 11 Subject: Public Safety Maintenance Of Effort AB2788 v,�/'n,,•/ Attached are the 1992-93, 1993-94 and 1994-95 budget summaries for the applicable public safety budget units in Contra Costa County as described in the proposed AB2788 legislation. Also attached is our "best case"--"worst case" scenarios based on the following assumptions and criteria: Y Due to the time constraints in completing the review, we used L.A. Counties Chief Administrative Office's analysis and interpretations of the legislation as the basis for our review. (See attached copy) Y The proposed legislation is unclear as to the use of the original Final Budget as adopted by the Board of Supervisors or the Final year-end Adjusted Budget as amended by them. We have provided estimates for both situations in the attached best/worst case scenarios. As noted in item 2 of the attached best/worst case scenario (Attachment I) we did not adjust the budget figures for the required items such as one time expenditures, grants, capital outlay or contract services to other agencies. These items, if not taken into account, result in a larger MOE requirement due to the inflation effect of the Gann Appropriation Limit adjustment. If you have questions, please call me at ext. 6-2186. CONTRA COSTA COUNTY RECEIVED AUG 91994 F s Y OFFICE OF n?., FIv COUNTY PROP 172M.DOC Attachement I CALCULATION OF PUBLIC SAFETY REQUIREMENT AB2788 (as amended 7/6/94) Prepared by: Auditor/Controller BEST CASE SCENARIO If MOE language requires the use of the"Final Budget" (1) (includes District Attorney, Sheriff, and Coroner.) • highest base is $75,785,202 in 1993-94 (2) • multiplied by a Gann inflator(44.01%for 1994-95) • results in MOE level of$109,138,269 for 1994-95 The 1994-95 Proposed Budget of$75,339,233 is $33,799,036 short of the MOE. WORST CASE SCENARIO If MOE language requires the use of the " Year-End Final Adjusted Budget" (1) • highest base is $76,879,953 in 1992-93 (2) • multiplied by two Gann inflators (13.74%for 1993-94 and 44.01%for 1994-95) • results in MOE level of$125,927,036 for 1994-95 The 1994-95 Proposed Budget of$75,339,233 is $50,587,803 short of the MOE. 1. The proposed legislation is unclear as to the use of the original Final Budget as adopted by the Board of Supervisors or the Final year-end Adjusted Budget as amended by them. 2. The above figures are as adopted and/or amended. We did not attempt to adjust the figures as required in amendment item 4.(A through H) due to insufficient lead time. PROP 172.DOC 08/08/94 . Attachment 11 ANALYIS OFTHE PUBLIC SAFETY MAINTENANCE OFEFFORT AB2788BILL Prepared by: Auditor/Controller Date: 8/5/94 1992-93 1992-03 1993'94 1993'94 1994-96 adopted adjusted adopted adjusted Proposed final yearend final year end Budget Budget Budget Budget Budget net approp. 34,726,475 37,113,210 34,991,513 35,509,655 35,820,396 revenue 12,757,763 13,158,032 20,928,774 29,870,436 30,291,177 net co. cost 21,968,712 23955 178 14,062,739 5,639,219 5,529,219 Sheriff-detention netappnup. 36.066.752 28.025.028 27.034.386 27.139.400 26.392.837 revenue 3085602 3086802 10,357,718 17299834 16,445,282 net co. cost 23000150 23580026 17,276,668 9,839,655 9947555 Coroner netoppnop. 958.071 983.130 080.839 1.073.936 988.530 revenue 42,500 net co. cost 913,571 940630 948,439 1,031,436 S23 53G District Attorneys netmppnup. 11.428.832 12.157.985 12.188.364 13.063.364 12`137.464 revenue 3038476 2100478 5,602,192 8918158 8,885,256 net co. cost 9402356 10057509 6568172 3,147,208 3,252,208 TOTAL NetAppnmp. 73.177.130 76.879.953 75.785.202 75.780.444 75.339.233 revenue 17,892,341 18,366,610 38.831 184 58.128928 56.680715 Net Co. Coat 55284789 58,513,343 38,854,018 �19 � � � � � � ,657,518 19,652,518 pnop172.XLa ,�