CC SR 20260616 F - FY26-27 Appropriation Limit
CITY COUNCIL MEETING DATE: 06/16/2026
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA TITLE:
Consider establishing the City’s appropriation limit for Fiscal Year 2026-27.
RECOMMENDED COUNCIL ACTION:
(1) Adopt Resolution No. 2026-__, A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF RANCHO PALOS VERDES ESTABLISHING THE FISCAL YEAR (FY)
2026-27 APPROPRIATION LIMIT AT $42,876,353 FOR THE CITY OF RANCHO
PALOS VERDES.
FISCAL IMPACT: None.
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Robert Moya, Deputy Director of Finance RM
REVIEWED BY: Vina Ramos, Deputy Director of Finance VR
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Resolution No. 2026-__ (page A-1)
B. FY 2026-27 Gann limit calculation (page B-1)
C. California Department of Finance Price Factor and Population Information
(page C-1)
BACKGROUND:
In conjunction with the adoption of the annual budget, the City adheres to statewide
guidelines when calculating the Gann appropriation limit (named after Paul Gann the
author of the Measure). In November 1979, under Article XIIIB of the California
Constitution, known as the Gann Spending Limitation Initiative, governmental agencies
in California have been subject to limitations on the total amount of annual appropriations
from the proceeds of taxes. The appropriation limit establishes a ceiling on the amount of
tax revenue the City can collect and appropriate for spending each year. The amount is
adjusted each year using inflationary and population growth statistics provided by the
California Department of Finance (DOF).
In addition to the guidelines under § 1.5 of Article XIIIB of the California Constitution, the
annual calculation of the appropriations limit is subject to an agreed -upon procedures
review in connection with the annual audit.
DISCUSSION:
Staff has completed calculating the Gann limit for FY 2026-27. The necessary information
to calculate the limit was obtained from the DOF website, which included the percentage
change in the population factor as of January 1, 2026, as well as the change in cost of
living or price factor specific to the City of Rancho Palos Verdes. The key points are as
follows:
• The DOF reported a 4.95% change over the prior year for the California Per Capital
Personal Income.
• The annual percentage change in population , minus exclusions for the City,
decreased by 0.44%, while Los Angeles County also decreased by 0.53%.
Based on the above information, the City’s FY 2026-27 appropriation limit has been
calculated at $42,876,353. Based on the FY 2026-27 draft budget of $34,345,000 for tax
proceeds, the City meets the Gann limit. This allocation constitutes 80% of the Gann
appropriation limit (see Attachment B).
CONCLUSION:
Staff recommends the City Council adopt the attached resolution (Attachment A) to
establish the City’s appropriation limit of $42,876,353 for FY 2026-27.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative actions are available for
the City Council’s consideration:
1) Do not adopt the attached resolution and provide Staff with direction for
consideration at a future meeting.
2) Take other action, as deemed appropriate.
RESOLUTION NO. 2026__
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF RANCHO PALOS VERDES
ESTABLISHING THE FISCAL YEAR (FY) 2026-27
APPROPRIATION LIMIT AT $42,876,353 FOR THE
CITY OF RANCHO PALOS VERDES
WHEREAS, by a letter dated May 2026, the California Department of Finance has
provided the following factors relevant to the calculation of the Appropriation Limit for FY
2026-27:
California Per Capita Personal Income change:
4.96% (Four Point Ninety-Six Percent)
City of Rancho Palos Verdes Population Adjustment:
-0.44% (Negative Point Forty-four Percent)
WHEREAS, the City’s Finance Department Staff has calculated the Appropriation
Limit for FY 2026-27 based upon the foregoing factors and the provisions of Article XIII B
of the Constitution of the State of California. The working papers supporting the
calculation are maintained in the files of the Finance Department within the City.
WHEREAS, the Appropriation Limit for the City of Rancho Palos Verdes
establishes the ceiling for which proceeds from taxes can be appropriated during FY
2026-27.
NOW BE IT, THEREFORE, RESOLVED BY THE CITY COUNCIL OF THE CITY
OF RANCHO PALOS VERDES:
Section 1: The Appropriation Limit of the City of Rancho Palos Verdes is
established at $42,876,353 (Forty-two Million Eight Hundred Seventy-six Thousand
Three Hundred Fifty-three Dollars) for FY 2026-27.
Section 2: The Appropriation Limit of the City of Rancho Palos Verdes in the
amount of $42,876,353 (Forty-two Million Eight Hundred Seventy-six Thousand Three
Hundred Fifty-three Dollars) for FY 2026-27 exceeds the proceeds from taxes, calculated
in the amount of $34,345,000 (Thirty-four Million Three Hundred Forty-five Thousand
Dollars) for FY 2026-27. Therefore, the City of Rancho Palos Verdes shall be in
compliance with the provisions of Article XIII B of the Constitution of the State of
California.
Section 3: The City Clerk shall certify to the passage of this resolution.
A-1
APPROVED AND ADOPTED THE 16th DAY OF JUNE 2026.
___________________________
Paul Seo, Mayor
ATTEST:
______________________________
Teresa Takaoka, City Clerk
State of California )
County of Los Angeles ) ss
City of Rancho Palos Verdes )
I, TERESA TAKAOKA, City Clerk of The City of Rancho Palos Verdes, hereby certify that
the above Resolution No. 2026-__ was duly and regularly passed and adopted by the
said City Council at a regular meeting thereof held on June 16, 2026.
__________________________
Teresa Takaoka, City Clerk
A-2
City of Rancho Palos Verdes
Ten- Year Gann Limit Calculation
FY 2026-27
Year
No.
Fiscal
Year
Califronia
per Capita
Population
Change
RPV
Factor Factor
Appropriation
Limit
Proposed Budget
Proceeds of Taxes
% of Budget
to Limit
10 2026-27 4.96 -0.44 -0.53 1.04404 $42,876,353 $34,345,000 80%
9 2025-26 6.44 0.3 -0.25 1.06174 $41,067,843 $33,113,200 81%
8 2024-25 3.62 0.05 -0.5 1.03102 $38,679,792 $33,113,200 86%
7 2023-24 4.44 -0.75 -1.02 1.06786 $37,516,080 $30,989,920 83%
6 2022-23 7.55 -0.71 -0.98 1.06786 $36,291,352 $28,333,280 78%
5 2021-22*5.73 -0.89 -0.7 1.04789 $33,984,996 $24,285,400 71%
4 2020-21*3.73 -0.11 -0.26 1.03616 $32,431,834 $23,621,500 73%
3 2019-20 3.85 -0.01 -0.24 1.0384 $31,300,056 $25,513,980 82%
2 2018-19 3.67 0.51 0.22 1.04199 $30,142,693 $25,078,500 83%
1 2017-18 3.69 0.57 0.31 1.04281 $28,928,085 $24,109,140 83%
*FY 2020-21 Appropriation Limit corrected from $31,301,409
*FY 2021-22 Appropriation Limit corrected from $32,800,435
B-1
CALCULATION OF PROCEEDS OF TAXES
DRAFT BUDGET FY 2026-27
NON
PROCEEDS PROCEEDS
GENERAL FUND OF TAXES OF TAXES TOTAL
TAXES
TOTAL TAXES 33,505,000 2,654,500 36,159,500
LICENSES AND PERMITS
TOTAL LICENSES AND PERMITS 0 3,555,300 3,555,300
FINES AND FORFEITURES
TOTAL FINES AND FORFEITURES 0 59,250 59,250
RENTS
TOTAL RENTS 0 818,500 818,500
INTEREST
TOTAL INTEREST 840,000 210,000 1,050,000
CHARGES FOR SERVICES
TOTAL CHARGES FOR SERVICES 0 357,900 357,900
REVENUES FROM OTHER AGENCIES
TOTAL REVENUES FROM OTHER AGENCIES 0 0 0
OTHER REVENUES
TOTAL OTHER REVENUES 0 502,000 502,000
B-2
CALCULATION OF PROCEEDS OF TAXES
DRAFT BUDGET FY 2026-27
NON
PROCEEDS PROCEEDS
Inter-Fund Transfers
TOTAL INTER-FUND TRANSFERS 0 320,000 320,000
TOTAL GENERAL FUND 34,345,000 8,477,450 42,822,450
NON
PROCEEDS PROCEEDS
ALL FUNDS OF TAXES OF TAXES TOTAL
TOTAL ALL FUNDS 34,345,000 29,960,710 64,305,710
PROCEEDS OF TAXES 34,345,000
GANN LIMIT 42,876,353
% OF GANN LIMIT 80%
B-3
May 1, 2026
Dear Fiscal Officer:
Price Factor and Population Information
Appropriations Limit
California Revenue and Taxation Code section 2227 requires the Department of Finance
to transmit an estimate of the percentage change in population to local governments.
Each local jurisdiction must use their percentage change in population factor for
January 1, 2026, in conjunction with a change in the cost of living, or price factor, to
calculate their appropriations limit for fiscal year 2026–27. Attachment A provides the
change in California’s per capita personal income and an example for utilizing the
factors to calculate the 2026–27 appropriations limit. Attachment B provides the city and
unincorporated county population percentage change. Attachment C provides the
population percentage change for counties and their summed incorporated areas. The
population percentage change data excludes federal and state institutionalized
populations and military populations.
Population Percent Change for Special Districts
Some special districts must establish an annual appropriations limit. California Revenue
and Taxation Code section 2228 provides additional information regarding the
appropriations limit. Article XIII B, section 9(C) of the California Constitution exempts
certain special districts from the appropriations limit calculation mandate. Special districts
required by law to calculate their appropriations limit must present the calculation as
part of their annual audit. Any questions special districts have on this requirement should
be directed to their county, district legal counsel, or the law itself. No state agency
reviews the local appropriations limits.
Population Certification
The population certification program applies only to cities and counties. California
Revenue and Taxation Code section 11005.6 mandates Finance to automatically certify
any population estimate that exceeds the current certified population with the State
Controller’s Office. Finance will certify the higher estimate to the State Controller by
June 1, 2026. Please note: The prior year’s city population estimates may be revised.
The per capita personal income change is based on historical data.
If you have any questions regarding this data, please contact the Demographic
Research Unit at (916) 323-4086.
/s Erika Li
Attachment
C-1
May 2026
Attachment A
A.Price Factor: Article XIII B specifies that local jurisdictions select their cost of
living factor to compute their appropriation limit by a vote of their governing
body. The cost of living factor provided here is per capita personal income. If
the percentage change in per capita personal income is selected, the
percentage change to be used in setting the fiscal year 2026–27
appropriation limit is:
Per Capita Personal Income
Fiscal Year Percentage change
(FY) over prior year
2026-27 4.95
B.Following is an example using sample population change and the change in
California per capita personal income as growth factors in computing a
2026–27 appropriation limit.
2026–27:
Per Capita Cost of Living Change = 4.95 percent
Population Change = -0.14 percent
Per Capita Cost of Living converted to a ratio: 4.95 + 100 = 1.0495
100
Population converted to a ratio: -0.14 + 100 = 0.9986
100
Calculation of factor for FY 2026–27: 1.0495 x 0.9986 = 1.0480
C-2