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City of San Leandro City Council Meeting Date: June 16, 2025 Agenda Number: 5.f. Agenda Section: CONSENT CALENDAR File Number: 25-287 File Type: Staff Report Adopt a Resolution to Approve the City’s Gann Appropriation Limit for Fiscal Year 2025-2026 SUMMARY AND RECOMMENDATIONS Staff recommends the City of San Leandro City Council adopt a resolution establishing the City’s Gann Appropriation Limit for Fiscal Year 2025-2026, including to correct the previously approved appropriations limit for Fiscal Year 2024-2025 . Staff completed calculations required for determining the appropriation limit for Fiscal Year 2025-2026 at $341,146,079. Budget appropriations subject to the Fiscal Year 2025-2026 appropriation limitation total $126,825,964. This is $214,320,115 below the new appropriation limit. BACKGROUND In 1979, California voters passed Proposition 4 limiting governmental expenditures and taxation. Statutes clarifying provisions of the proposition are codified in Article XIIIB of the California Constitution. This article is known as the Gann Limit. Because the Gann Limit constrained local governments effectively responding to demands of rapid growth in California, a legislative-business-labor coalition drafted and supported Proposition 111, adopted in 1990. Proposition 111 allows flexibility in a growing economy, while retaining limits on government spending. While the law sets limits on spending and taxation, it does allow for increases on the appropriation limit based on both population and personal income growth. ANALYSIS During any fiscal year, a city may not appropriate any proceeds of taxes it receives in excess of its established limit. Excess funds received in any year may be carried into the subsequent year for use if the city is below its limit for that year. Any excess funds remaining after the second year would be required to be returned to local taxpayers by reducing tax rates or fees. As an alternative, a majority of the voters may approve an "override" to increase the city's appropriations limit. Senate Bill 1352 requires that 1) the governing body of each local jurisdiction shall, by legislative action, establish its appropriations limit at a regularly scheduled or special meeting and that the documentation used in the determination of the appropriations limit shall be made available to the public fifteen days before that meeting. Government Code Section 7910 requires that the City adopt its appropriations limit prior to the beginning of each fiscal year. Page 1 City of San Leandro Printed on 9/4/2025