HomeMy WebLinkAboutItem 18 - Resolution Establishing the Appropriations Limit for FY2026-27 Finance and Management Services
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Item # 18
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
June 16, 2026
TOPIC: Resolution Establishing the Appropriations Limit for FY2026-27
AGENDA TITLE
Resolution Establishing the Appropriations Limit for FY2026-27
RECOMMENDED ACTION
Adopt a resolution establishing the City of Santa Ana's appropriations limit for FY2026-
27, as required by state law.
RESOLUTION NO. 2026-XXX entitled A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF SANTA ANA ESTABLISHING THE APPROPRIATION LIMIT OF THE
CITY OF SANTA ANA FOR FISCAL YEAR 2026-2027
GOVERNMENT CODE 484308 APPLIES: No
DISCUSSION
Article XIII B of the California Constitution, commonly referred to as the "Gann Limit," was
approved by California voters in 1979 through Proposition 4. The Gann Limit establishes
a constitutional restriction on the amount of tax proceeds that state and local governments
may appropriate each fiscal year. The limit is adjusted annually based on changes in
population and the cost of living to allow government spending capacity to grow in line
with economic and demographic conditions.
Pursuant to California Government Code Section 7910, the City is required to establish
its annual appropriations limit by resolution. Adoption of the proposed resolution will
establish the City's appropriations limit for Fiscal Year 2026-27 (FY26-27), and ensure
compliance with State constitutional requirements.
The appropriations limit calculation for FY26-27 was prepared using the growth factors
provided by the California Department of Finance. Consistent with prior years, staff used
the change in California per capita personal income as the cost-of-living factor and
Orange County population growth as the population factor.
Resolution Establishing the Appropriations Limit for FY2026-27
June 16, 2026
Page 2
Using the formula provided by the state, staff calculated the spending limitation from the
"Proceeds of Taxes" at $1,591,945,027 (Exhibit 1) for FY26-27, a 4.6% increase over
Fiscal Year 2025-26. Funds governed by the appropriations limit include the General
Fund, the Capital Outlay Fund, and Special Revenue Funds. Exhibit 1 identifies the
factors used to determine the inflationary increases from the prior year. Exhibit 2
categorizes the FY26-27 anticipated revenues under "Proceeds of Taxes" and "Non-
Proceeds of Taxes." Exhibit 3 computes the FY26-27 appropriations subject to this
limitation and identifies the difference between the limit and the budgeted appropriation.
As demonstrated in Exhibit 3, the City's anticipated appropriations subject to limitation in
FY26-27 are $328,803,299, which is approximately $1,263,141,728 or 79% below the
calculated limit. This substantial margin demonstrates that the City's budgeted
appropriations remain well within the constitutional spending limitation.
The Gann Limit serves as an important fiscal safeguard by ensuring that growth in
government spending supported by tax revenues remains aligned with changes in
population and economic conditions. The City's appropriations are significantly below the
allowable limit, indicating that the City has considerable capacity under the constitutional
threshold and remains fully compliant with Article XIII B of the California Constitution.
The proposed resolution has been prepared in accordance with applicable constitutional
and statutory requirements.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
There is no fiscal impact associated with this action.
EXHIBIT(S)
1. Computation of Appropriation Limit
2. Schedule to Categorize Anticipated Revenues
3. Appropriation Subject to Limitation
4. Resolution
Submitted By: Alexander Trinidad, Executive Director, Finance and Management
Services Agency
Approved By: Alvaro Nunez, City Manager
EXHIBIT 1
EXHIBIT 1
COMPUTATION OF APPROPRIATION LIMIT
FOR FISCAL YEAR ENDING JUNE 30, 2027
Fiscal Year 2025-26 Appropriations Limit $ 1,522,518,198
California Per Capita Personal Income: 4.950% *
Converted into a Factor 1.0495
Population Growth: -0.37% *
Converted into a Factor: 0.9963
Calculation of factor for fiscal year 2025-26: 1.0456
Fiscal Year 2026-27 Appropriations Limit $ 1,591,945,027
* Source: State of California, Department of Finance, Price and Population Information- FY 2026-27
EXHIBIT 2
EXHIBIT 2
SCHEDULE TO CATEGORIZE ANTICIPATED REVENUES
FOR FISCAL YEAR ENDING JUNE 30, 2027
PROCEEDS OF NON-PROCEEDS OF
REVENUE TAXES TAXES TOTALS
TAXES:
Property Tax $ 113,751,600 $ - $ 113,751,600
Sales Tax 146,415,470 - 146,415,470
Hotel Visitors'Tax 9,500,000 - 9,500,000
Business Tax 18,299,000 - 18,299,000
Documentary Stamp Tax 1,150,000 - 1,150,000
Utility Users'Tax 29,450,000 - 29,450,000
Medical Marijuana/Cannabis Tax 13,116,000 - 13,116,000
Total Taxes 331,682,070 - 331,682,070
FROM STATE:
State Motor Vehicle License 425,000 - 425,000
Homeowner Prop Tax Subvention 180,000 - 180,000
State Gas Tax - 18,078,380 18,078,380
SB90 Reimbursements - 200,000 200,000
State Grants - 10,198,620 10,198,620
Standards Training for Corrections
Reimbursement - 54,660 54,660
Total State 605,000 28,531,660 29,136,660
OTHER GOVERNMENT:
Community Development(CDBG) - 4,621,190 4,621,190
Urban Area Security Initiative Grant - 662,390 662,390
Housing (Section 8) - 80,389,360 80,389,360
Workforce Investment Act - 2,743,890 2,743,890
Measure M, Street Grants - 6,198,920 6,198,920
Civic Center and Park - 3,893,890 3,893,890
Program Income - 1,003,140 1,003,140
Other Federal Grants - 1,297,260 1,297,260
Total Other Government - 100,810,040 100,810,040
Exhibit 2
Continued
PROCEEDS NON-PROCEEDS
REVENUE OF TAXES OF TAXES TOTALS
LOCALLY RAISED:
Licenses and Permits - 7,129,550 7,129,550
Franchise Fees - 14,100,000 14,100,000
Fines and Forfeitures - 5,261,980 5,261,980
Charges for Services - 36,622,700 36,622,700
From Use of Property - 12,858,020 12,858,020
Others - 201,000 201,000
Others-I nter-Agency - 1,202,590 1,202,590
Total Locally Raised - 77,375,840 77,375,840
OTHER MISCELLANEOUS:
Donation - 327,710 327,710
Expense Reimbursements - 2,503,400 2,503,400
Indirect Cost Recovery - 20,633,390 20,633,390
Interfund Transfers - 21,097,430 21,097,430
Opioid Settlements - 937,400 937,400
Total Other Miscellaneous - 45,499,330 45,499,330
FROM USE OF MONEY:
Earnings on Investment 2,310,554 1,825,776 4,136,330
TOTAL REVENUES $ 334,597,624 $ 254,042,646 $ 588,640,270
EXHIBIT 3
EXHIBIT 3
APPROPRIATION SUBJECT TO LIMITATION
FOR FISCAL YEAR ENDING JUNE 30, 2027
Proceeds of taxes $ 334,597,624
Less: Exclusions (5,794,325)
Appropriation subject to limitation $ 328,803,299
Current year limit 1,591,945,027
Over(under) limit $ (1,263,141,728)
EXHIBIT 4
RESOLUTION NO. 2026-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA ESTABLISHING THE APPROPRIATION LIMIT
OF THE CITY OF SANTA ANA FOR FISCAL YEAR
2026-2027
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines
and declares as follows:
A. Article XIIIB of the Constitution of the State of California, adopted by the
voters of the State of California in 1979, imposes upon State and local
government the obligation to limit each fiscal year's appropriations to those
established in fiscal year 1978-79 as adjusted for by inflation and
population, together with other specified changes required or permitted.
B. In June of 1990, the voters of the State of California approved Proposition
111, which amended Article XIIIB to establish the limit originally calculated
for fiscal year 1986-87 as a new adjustment base, and to change the
definition of the cost of living to be either the percentage change in
California per capita personal income from the preceding year or the
percentage change in the local assessment roll from the preceding year for
the jurisdiction due to the addition of local non-residential new construction.
C. Proposition 111 further modified Article XIIIB requirements by making
certain capital outlay, debt service, emergency and court ordered
expenditures not subject to the limit, and by allowing expenditures in excess
of one year's limit to be offset by under expenditures in an immediately
following year.
D. The City of Santa Ana has opted to use as the inflation adjustment factor
the percentage change in the California per capita personal income from
the preceding year.
E. The City of Santa Ana has opted to use as the population adjustment factor
the County's percentage change in population from the preceding year.
F. Section 7910 of the Government Code of the State of California requires
the governing body of each local jurisdiction each year to, by resolution,
establish its appropriations limit and make other necessary determinations
for the following fiscal year pursuant to Article XIIIB of the California
Constitution at a regularly scheduled meeting or noticed special meeting.
Resolution No. 2026-XXX
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Fifteen days prior to the meeting, documentation used in the determination
of the appropriations limit and other necessary determinations shall be
available to the public.
G. This matter came before the City Council at its regularly scheduled meeting
of June 16, 2026.
H. The Executive Director of the Finance and Management Services Agency
of the City of Santa Ana has determined the City's appropriation limit for
fiscal year 2026-2027 in accordance with said provisions of the Constitution
and laws of the State of California, and the documentation used in the
determination has been available to the public since not later than June 1
2026, in the office of the Executive Director of the Finance and Management
Services Agency.
Section 2. Based upon the above referenced facts, and all facts specified in the
accompanying Request for Council Action and its attachments, and each of them, the
appropriation limit of the City of Santa Ana for fiscal year 2026-2027 is hereby found and
determined to be $1,591,945,027.
Section 3. This Resolution shall take effect immediately upon its adoption by
the City Council, and the City Clerk shall attest to and certify the vote adopting this
Resolution.
ADOPTED this day of ) 2026.
Valerie Amezcua
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho
City Attorney
By:
J athan T. Martine
Assistant City Attorney
Resolution No. 2026-XXX
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AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, Jennifer Hall, City Clerk, do hereby attest to and certify the attached Resolution
No. 2026- to be the original resolution adopted by the City Council of the City of
Santa Ana on June 16, 2026.
Date:
City Clerk
City of Santa Ana
Resolution No. 2026-XXX
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