Staff Report re FY 2026-27 Appropriation Limit Adoption Page 1 of 2
STAFF REPORT
TO: Mayor and Members of the City Council
FROM: Nathan Bassett, Administrative Services Director VIA: Dan Barros, City Manager
MEETING DATE: June 10, 2026
SUBJECT: Adoption of FY 2026-27 Appropriation (GANN) Limit
RECOMMENDATION
Staff recommends that the City Council adopt the following:
RESOLUTION ADOPTING THE FY 2026-27 APPROPRIATION LIMIT, PURSUANT TO CEQA GUIDELINE 15378
COUNCIL ADOPTED VALUES
The staff recommendation is consistent with the Council adopted values of:
•Responsibility: Approval of the FY 2026-27 Appropriation Limit is the responsible action because it ensures the Town’s FY 2026-27 budget complies with State laws.
BACKGROUND
California voters approved propositions amending the State Constitution and requiring the annual Town budget include a calculation of the Appropriations Limit, also known as the Gann Limit. This requirement was imposed by Proposition 4 (1979) and later amended by Proposition 111 (1990).
The requirement imposes a restriction on the amount of governmental revenue which may be appropriated in any fiscal year. The Appropriations Limit was first based on actual appropriations during the base year (1986-87), and it can be increased each year based on a specific formula and specified growth factors. The Appropriations Limit does not apply to all funds. It only applies to funds that are “proceeds of taxes.”
Each year, the adjustment to the Appropriations Limit takes into consideration two factors: 1) the change in the cost of living, and 2) the change in population. For each of these factors, the Town may select between two optional factors. Additionally, State law requires that the calculation factors must be available to the public for 15 days prior to adoption.
To comply with State law, the documentation used in the determination of the appropriations limit was made available to the public beginning on May 27, 2025 for a full 15 days prior to the City Council meeting.
AGENDA ITEM #4
Staff Report re FY 2026-27 Appropriation Limit Adoption Page 2 of 2
ANALYSIS
The appropriation limit analysis includes two parts. The first part is the calculation of the appropriation limit based on the change in the county’s or the city’s population and the State’s per capita personal income. The new FY 2026-27 Appropriations Limit, as calculated and attached to the proposed resolution, is $73,122,383. The increased adjustment factor of 1.0492 is calculated using the County’s population change of -0.03 percent and the change in the State per capita personal income of 4.95 percent. These adjustments were published in the Department of Finance’s Price and Population Report.
The second part of the analysis is to verify that the “Proceeds of Taxes” do not exceed the limit calculated above. The “Proceeds of Taxes” is determined based on the City Council adopted budget for the new fiscal year. The City Council will consider adoption of the FY 2026-27 Operating and Capital Budget on June 10, 2026, with a projection of $ 24,946,867 in General Fund revenues.
Of this amount, the “proceeds of taxes” subject to the limit is $24,182,142 which is $48,940,241 less than the FY 2026-27 Appropriations Limit of $73,122,383.
FISCAL IMPACT
Adoption of the Limit will ensure the Town appropriations are in compliance with State requirements. The FY 2026-27 Appropriations subject to the limit (“Proceeds of Taxes”) total $24,182,142 which means the Town is $48,940,241 below the authorized limit.
ENVIRONMENTAL
The adoption of the resolution is exempt from environmental review pursuant to CEQA Guideline 15378 as a governmental fiscal activity without any impact on the environment.
ALTERNATIVES
Council could choose not to adopt this resolution and to request further information on the Appropriations Limit and calculation thereof, but to remain compliant with California State law, adoption of a resolution updating the calculation is required on an annual basis.
CONCLUSION
Staff recommends that the Council adopt the attached resolution to maintain compliance with State legal requirements.
ATTACHMENTS
A. Resolution Adopting the FY 2026-27 Appropriation Limit
Res 2026-##, FY 2026-27 Appropriations Limit Page 1 of 3 RESOLUTION NO. 2026-##
OF THE CITY COUNCIL OF THE TOWN OF COLMA
RESOLUTION ADOPTING THE FY 2026-27 APPROPRIATION LIMIT, PURSUANT TO CEQA GUIDELINE 15378
The City Council of the Town of Colma does resolve as follows.
1.Background
(a)Article XIIIB of the California Constitution places certain restrictions on annual appropriations by cities;
(b)The restrictions only apply to those appropriations which meet the definition of “Proceeds of Taxes”;
(c)The FY 2026-27 Appropriations Limit Calculation was publicly noticed and posted on the Town’s website on May 27, 2026, which is a full fifteen days for review consistent with California Government Code Section 7910;
(d)The adoption of the Appropriations Limit must identify the optional calculation factors to be used as adjustment factors.
2.Findings
(a)The first adjustment factor, the Town must select between: (A) the change in Town population, or (B) Countywide population, and the Town has selected the Change in Colma’s population; and
(b)The second adjustment factor the Town must select between: (1) the change in the State per capita income, or, (2) the change in the assessed valuation of local nonresidential construction, and the Town has selected the change in the State per capita income; (c)The detailed calculation of the Appropriations Limit for Fiscal Year 2026-27 is described in Exhibit A, attached hereto and by reference made a part hereof. (d)The City Council finds that the Fiscal Year 2026-27 budget does not exceed the constitutional appropriation limit placed on “Proceeds of Taxes” for Fiscal Year 2026-27 and is $48,940,241 below the authorized limit.
3.Appropriation Limit
The Appropriation Limit for the Fiscal Year 2026-27 shall be, and hereby is determined to be $73,122,383.
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ATTACHMENT A
Res 2026-##, FY 2026-27 Appropriations Limit Page 2 of 3 Certification of Adoption
I certify that the foregoing Resolution No. 2026-XX was duly adopted at a regular meeting of the City Council of the Town of Colma held June 10, 2026 by the following vote:
Name Voting Present, Not Voting Absent
Aye No Abstain Not Participating
Carrie Slaughter, Mayor
Helen Fisicaro
Joanne F. del Rosario
Thomas Walsh
Ken Gonzalez
Voting Tally
Dated ______________________ ____________________________________ Carrie Slaughter, Mayor
Attest: _____________________________
Michelle Estabillo Gourlie, City Clerk
Res 2026-##, FY 2026-27 Appropriations Limit Page 3 of 3 EXHIBIT TO RESOLUTION 2026-##
FISCAL YEAR 2026-27 APPROPRIATIONS LIMIT
Each year, the adjustment to the Appropriations Limit takes into consideration two factors: 1) the change in the cost of living, and 2) the change in population. For each of these factors, the Town may select between two optional factors.
Selection of Optional Factors
1. Change in Population (Town of Colma vs. San Mateo County)
Options
Population
1/1/2025
Population
1/1/2026
% Increase
a. Town of Colma 1,410 1,405 -0.35%
b. County of San Mateo 748,271
748,049 -0.03%
2. Change in State per capita Personal Income vs. Colma Non-Residential Building Construction Options % Increase
a. Change in State Per Capita Personal Income 4.95%
b. Change in Colma Non-Residential Assessed Valuation N/A* * Change in non-residential assessed valuation was not available.
For the Fiscal Year 2026-27 calculation, the Town selected County’s population growth rate of -0.03% and the change in the State Per Capita Income of 4.95%.
APPROPRIATION LIMIT CALCULATION 2026-27
Population Change (San Mateo Co.) -0.03% ((-0.03+100)/100 = 0.9997) State Per Capita Personal Income 4.95% ((0.0495+100)/100 = 1.0495) Calculation of Factor for 2025-26 1.0492 0.9997 x 1.0495 = 1.0492 Prior Year Appropriation Limit (2024-25) $ 69,694,451 Appropriation Limit 2025-26 $ 73,122,383 $69,694,451 x 1.0492 = $73,122,383
The 2026-27 Appropriations subject to the limit (“Proceeds of Taxes”) total $24,182,142, which means the Town is $48,940,241 below the authorized limit.