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File Number: 21-330 For Fiscal Year 2021-22, the California Department of Finance’s (DOF) Per Capita Personal Income growth rate of 5.73% is higher than the non-residential property assessed valuation rate of 2.06%. The County’s population rate of -0.37% is more advantageous to the City than its own population change rate of -0.63%. Concurrent with Proposition 4, the Revenue and Taxation Code, Section 7910, requires each local agency to establish its appropriations limit by the beginning of each fiscal year. The law also requires governmental entities to factor appropriations from tax revenues into its Gann Limit calculation. The measure stipulates that exceeding the Limit requires agencies to lower tax liability for its residents. The City has never exceeded its Gann Limit. ANALYSIS The calculation starts with the current year’s Gann Limit, multiplies it by the per capita cost of living/non-residential property assessed valuation rate and population growth rate. Both the per capita cost of living and the population growth rates are then converted to a ratio to complete the calculation that establishes the City’s new Gann Appropriations Limit. For Fiscal Year 2021-22, staff used the Department of Finance’s Per Capita Personal Income rate of 5.73% and the County’s Population Growth rate of -0.37% to generate the Gann Limit calculation factor (or “adjustment factor”) of 1.0534. The 2020-21 Appropriation Limit of $264,857,995 multiplied by the adjustment factor of 1.0534 produces the 2021-22 Appropriation Limit of $279,001,412. A Resolution is attached which authorizes the new Gann Appropriation Limit for this upcoming fiscal year and includes the “Attachment 1 Calculation”. The fiscal year 2021-22 budget subject to the limitation excludes self-supporting funds, capital improvement funds, capital outlay grant funds, and specific exclusions such as the Gas Tax Fund. The City’s Fiscal Year 2021-22 appropriation subject to the Gann Limit is $106,128,525, which is significantly below the legal limit allowed of $279,001,412-a margin of over $172 million. Current City Council Policy The Council adopts the appropriation limit during the budget adoption process. Fiscal Impact None. Impacts the City only if the appropriation limit is exceeded by the proposed fiscal year 2021-22 appropriation subject to limitation. CONCLUSION Staff recommends City Council approval of a resolution establishing the City’s appropriation limit of $279,001,412 for fiscal year 2021-22. Page 2 City of San Leandro Printed on 6/23/2021 368