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City of San Leandro <br />Meeting Date: June 3, 2013 <br />Staff Report <br />Agenda Section:File Number:13-276 CONSENT CALENDAR <br />Agenda Number:8.L. <br />TO:City Council <br />FROM:Chris Zapata <br />City Manager <br />BY:David Baum <br />Finance Director <br />FINANCE REVIEW:David Baum <br />Finance Director <br />TITLE:Staff Report Establishing the City’s Appropriation Limit for Fiscal Year 2013-14 <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends City Council approval of a resolution establishing the City’s appropriation <br />limit for fiscal year 2013-14 . Staff has completed the calculations required for determining the <br />City’s appropriation limit for 2013-14, which is $171,468,034. Budget appropriations that are <br />subject to the 2013-14 limitation total $70,778,848, which is $100,689,186 below the limit. <br />BACKGROUND <br />On November 6, 1979, California voters passed Proposition 4. Statutes clarifying certain <br />provisions of the proposition are now codified in article XIIIB of the California Constitution. <br />This Article is commonly known as the “Gann Initiative .” The Initiative established <br />constitutional spending limits allowable for California governmental agencies based on the <br />Consumer Price Index and population growth. Concurrent with Proposition 4, the Revenue <br />and Taxation Code, Section 7910, requires each local governmental unit to establish its <br />appropriations limit by the beginning of each fiscal year. <br />Due to Gann’s constraint on State and local governments to respond effectively to the <br />demands of rapid growth around California, a legislative-business-labor coalition drafted and <br />supported Proposition 111, which was adopted June 5, 1990. Proposition 111 makes crucial <br />adjustments to the Gann Initiative, by allowing it the flexibility to operate in a growing <br />economy, while retaining its purpose in placing a limit on government spending. The following <br />are the changes Proposition 111 made to the Gann Initiative. <br />Prior law required spending limits to be tied to the Consumer Price Index or California Per <br />Capita Personal Income growth factor, whichever was lower . The new provisions allow an <br />agency to select the California Per Capita Personal Income growth factor or the <br />Non-residential Property Assessed Valuation growth factor , whichever is higher. Cities may <br />Page 1 City of San Leandro Printed on 5/29/2013