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City of San Leandro <br />Meeting Date: June 28, 2021 <br />Staff Report <br />Agenda Section:File Number:21-330 CONSENT CALENDAR <br />Agenda Number:8.E. <br />TO:City Council <br />FROM:Fran Robustelli <br />City Manager <br />BY:Susan Hsieh <br />Finance Director <br />FINANCE REVIEW:Susan Hsieh <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 2021-22 <br />SUMMARY AND RECOMMENDATIONS <br />Staff recommends the City of San Leandro City Council approve a resolution establishing the <br />City’s appropriation limit for Fiscal Year (FY) 2021-22 . Staff has completed the calculations <br />required for determining the City’s appropriation limit for FY 2021-22, which is $279,001,412. <br />Budget appropriations that are subject to the FY 2021-22 limitation total $106,128,525 which is <br />$172,872,887 below the limit. <br />BACKGROUND <br />On November 6, 1979, California voters passed Proposition 4 to limit governmental spending <br />and taxation. Statutes clarifying certain provisions of the proposition are now codified in article <br />XIIIB of the California Constitution. This Article is commonly known as the “Gann Limit” after one <br />of the measure’s coauthors. <br />Due to the Gann Limit’s constraint on 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 Limit, by allowing it the flexibility to operate in a growing economy, while retaining its <br />purpose in placing a limit on government spending. While the law limits spending and taxation, it <br />does allow for an increase to the Limit based on both population and personal income growth. <br />The revised law allows agencies to select either the California Department of Finance’s (CA <br />DOF) Per Capita Personal Income growth factor or the non-residential property assessed <br />valuation growth factor, whichever is higher. Both are published annually and distributed to local <br />agencies for consideration. Additionally, cities may choose to use the percentage rate of change <br />in population from their city or their county, whichever is higher. <br />Page 1 City of San Leandro Printed on 6/23/2021 <br />367