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City of San Leandro <br />Meeting Date: June 4, 2018 <br />Staff Report <br />Agenda Section:File Number:18-223 CONSENT CALENDAR <br />Agenda Number:8.C. <br />TO:City Council <br />FROM:Jeff Kay <br />Interim 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 2018-19 <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends City Council approval of a resolution establishing the City’s appropriation limit <br />for fiscal year 2018-19. Staff has completed the calculations required for determining the City’s <br />appropriation limit for 2018-19, which is $228,495,132. Budget appropriations that are subject to <br />the 2018-19 limitation total $105,653,459 which is $122,841,673 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 Gann’s constraint on State and local governments to respond effectively to the demands of <br />rapid growth around California, a legislative-business-labor coalition drafted and supported <br />Proposition 111, which was adopted June 5, 1990. Proposition 111 makes crucial adjustments <br />to the Gann Initiative, by allowing it the flexibility to operate in a growing economy, while retaining <br />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 />Assessed Valuation growth factor, whichever is higher. Cities may choose to use the percentage <br />Page 1 City of San Leandro Printed on 5/30/2018 <br />95