BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT: Title
Adopt a Resolution Establishing Appropriations Limit for Fiscal Year 2026-27.
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RECOMMENDATION: Recommendation
A. Select the cost-of-living factor to establish the Santa Clara Valley Water District’s Appropriations Limit; and
B. Adopt the Resolution ESTABLISHING APPROPRIATIONS LIMIT FOR FISCAL YEAR 2026-27.
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SUMMARY:
California’s State Appropriations Limit (SAL) was originally established by Proposition 4 in 1979 and places an “upper bound” each year on the amount of monies that can be spent from tax proceeds. The SAL grows annually by a population and cost-of-living factor.
In accordance with the Requirements of Government Code Section 7901-7914, the Board shall by resolution, establish the Santa Clara Valley Water District’s (Valley Water) annual Appropriations Limit and make other necessary determinations for each fiscal year pursuant to Article XIII B of the California Constitution.
The Appropriations Limit may increase annually by a factor comprised of the percentage change in population on January 1 of the current year, for Santa Clara County in conjunction with either the percentage change in California per capita personal income or the percentage change in assessment roll due to local non-residential new construction. As with prior fiscal years, staff recommends using the percentage change in the California per capita personal income as provided for by the Department of Finance.
For fiscal year (FY) 2026-27, the percentage change in population for Santa Clara County is 0.23% and the percentage change in California per capita personal income is 4.95%, which correspond to factors of 1.0023 and 1.0495, respectively. These factors combine to a growth factor of 1.0519, which, when applied to the FY 2025-26 Appropriations Limit of $215,324,646, results in an FY 2026-27 Appropriations Limit of $226,499,995, as reflected in the attached Resolution.
Estimated proceeds of taxes subject to the limit total $54,318,336 and are derived from the District’s share of the 1% ad valorem property tax for Benefit Assessment Funds 23, 24, and 25. This estimate is calculated by applying the District’s historical proportion of eligible property tax revenues to the projected FY 2026-27 property tax receipts, consistent with the methodology used in prior years.
As a result, when the FY 2026-27 appropriations limit of $226,499,995 is compared to the $54,318,336 estimated proceeds of taxes subject to the limit, Valley Water is projected to be $172,181,659 below the FY 2026-27 Appropriations Limit.
In accordance with Government Code Section 7910, the documentation used in calculating the FY 2026-27 annual Appropriations Limit was made available for public review at least 15 days prior to the meeting date, by posting a copy at Valley Water’s Headquarters Building, 5700 Almaden Expressway, San Jose, CA.
ENVIRONMENTAL JUSTICE IMPACT:
There are no Environmental Justice impacts associated with this item.
FINANCIAL IMPACT:
By adopting the resolution, Valley Water will have complied with SAL and set its FY 2026-27 appropriations limit at $226,499,995.
CEQA:
The recommended action does not constitute a project because it does not have the potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
Attachment 1: Resolution
UNCLASSIFIED MANAGER: Manager
Darin Taylor, 408-630-3068