TO: ADAM PIRRIE, CITY MANAGER
FROM: JEREMY STARKEY, FINANCE DIRECTOR
DATE: MAY 27, 2025
Reviewed by:
City Manager: AP
SUBJECT:
Title
ADOPTION OF A RESOLUTION DETERMINING AND ESTABLISHING THE 2025-26 APPROPRIATIONS LIMIT IN THE AMOUNT OF $55,762,360
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SUMMARY
The “Gann Initiative”, established by 1979’s Proposition 4, insured voters that limits were placed on all State and local government appropriations. After the passage of Proposition 13, fiscal conservatives were concerned that State spending increases would prompt California lawmakers to increase other taxes to compensate for the reduction in property tax revenues. The Gann Limit was proposed as a mechanism to limit State spending. In June 1990, California voters approved Proposition 111 which revised the annual adjustment factors applied to the 1986-87 appropriations limit and each year thereafter.
Pursuant to Article XIII B of the State Constitution and Section 7910 of the State Government Code, all government entities must adopt an annual appropriations limit. The Gann Appropriations Limit specifies that appropriations funded by taxes may be increased annually by the change in California per capita income and the change in Claremont population or Los Angeles County population.
The City Council is required to confirm, each fiscal year, the factors used for calculating the annual appropriations limit. Using the changes in California per capita income and Los Angeles County’s population provided by the State Department of Finance, the calculated appropriations limit for the City of Claremont for 2025-26 is $55,762,360.
RECOMMENDATION
Recommended Action
Staff recommends the City Council adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, DETERMINING AND ESTABLISHING AN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2025-26.
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ALTERNATIVE TO RECOMMENDATION
In addition to the recommendation, there is the following alternative:
• Request additional information.
FINANCIAL REVIEW
Estimated tax receipts subject to the appropriations limit for 2025-26 total $40,438,601. These revenues are $15,323,759 less than the calculated appropriations limit of $55,762,360.
The staff cost to prepare this report is estimated at $300 and is included in the operating budget of the Financial Services Department.
ANALYSIS
The appropriations limit for 2025-26 is included as an Exhibit to the proposed Resolution (Attachment A).
The data used to calculate the City of Claremont’s 2025-26 appropriations limit is the change in California per capita income and the County of Los Angeles’ change in population (Attachment B). The application of these factors to the City’s 2024-25 appropriations limit of $52,231,843 results in an appropriations limit of $55,762,360 for 2025-26.
RELATIONSHIP TO CITY PLANNING DOCUMENTS
Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documents and finds that it applies to the following City Planning Documents: 2024-26 Budget.
CEQA REVIEW
This item is not subject to environmental review under the California Environmental Quality Act (CEQA).
PUBLIC NOTICE PROCESS
The agenda and staff report for this item have been posted on the City website and distributed to interested parties. If you desire a copy, please contact the City Clerk’s Office.
Submitted by:
Jeremy Starkey
Finance Director
Attachments:
A - Resolution Determining and Establishing the Appropriations Limit
B - Tax Receipts Comparison to Appropriation Limit