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City of San Leandro <br />Meeting Date: June 17, 2019 <br />Staff Report <br />Agenda Section:File Number:19-341 CONSENT CALENDAR <br />Agenda Number:8.C. <br />TO:City Council <br />FROM:Jeff Kay <br />City Manager <br />BY:David Baum <br />Finance Director <br />FINANCE REVIEW:David Baum <br />Finance Director <br />TITLE:Staff Report for a City of San Leandro City Council Resolution Establishing the <br />City’s Appropriation Limit for Fiscal Year 2019-20 <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends the City of San Leandro City Council approve the resolution establishing the <br />City’s appropriation limit for Fiscal Year (FY) 2019-20 . Staff has completed the calculations <br />required for determining the City’s appropriation limit for FY 2019-20, which is $248,119,855. <br />Budget appropriations that are subject to the FY 2019-20 limitation total $110,338,856 which is <br />$137,780,999 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. This <br />Article is commonly known as the “Gann Initiative.” The Initiative established constitutional <br />spending limits allowable for California governmental agencies based on the Consumer Price <br />Index and population growth. Concurrent with Proposition 4, the Revenue and Taxation Code, <br />Section 7910, requires each local governmental unit to establish its appropriations limit by the <br />beginning of each fiscal year. <br />Due to the Gann Initiative’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 economy, <br />while retaining its purpose in placing a limit on government spending. <br />Prior law required spending limits to be tied to the Consumer Price Index or California Per Capita <br />Personal Income growth factor, whichever was lower. The new provisions allow an agency to <br />select the California Per Capita Personal Income growth factor or the Non-residential Property <br />Page 1 City of San Leandro Printed on 6/12/2019 <br />39