FAIRFAX TOWN COUNCIL MEETING
STAFF REPORT
AGENDA ITEM #6.d
MEETING DATE August 6, 2025
PREPARED FOR Mayor and Town Council
PREPARED BY Michael Vivrette, Finance Director
SUBJECT Adoption of a Resolution Making Certain Findings and Determinations in Compliance with Section XIIIB of the California Constitution (Gann Initiative) and Setting the Appropriation Limit for Fiscal Year 2025-26
RECOMMENDATION
Adopt the attached resolution determining the Proposition 4 (Gann) Appropriation Limit calculation for Fiscal Year 2025-26. The Town's Fiscal Year 2026 appropriations are estimated to be $1,261,760 under the limit, based on the Fiscal Year 2025-26 Adopted Budget.
DISCUSSION
In November 1979, the voters of the State of California approved Proposition 4, commonly known as the Gann Initiative. The proposition created Article XIIIB of the State Constitution, placing limits on the amount of revenue that can be spent by all entities of government. Proposition 4 became effective for the 1980-81 fiscal year, but the formula for calculating the limits was based on the 1978-79 "base year" revenues. Appropriations backed by tax revenues collected by all funds within the Town are subject to measurement against the Town's calculated Gann Limit. Since the General Fund is the primary recipient of tax revenue, a rough estimate of the appropriations subject to that limit can be calculated by summing certain tax revenue that the General Fund receives. Please note that the “Proceeds of Taxes” are defined as general purpose taxes the Town receives such as sales and property taxes, but not special purpose taxes such as the special municipal service tax (Measure F). Franchise fees and charges for services are also not included in the “Proceeds of Taxes.”
1. The Appropriation Limit calculation (see Exhibit A to the Resolution) starts with the appropriation limit from the prior year. This limit is updated with the “change factors” from population and CPI changes in the prior year as provided by the State Department of Finance (see Attachment B).
2. The result is compared to the current calculation of “Appropriations subject to limit” (Proceeds of taxes based on the budget for the new fiscal year). Note that in this calculation, the term “appropriations” refers to tax revenues to be received by the town. The Appropriation Limit needs to be higher than the “Appropriations subject to limit” or the Town might have to return revenues to the taxpayers or pass a measure approving a higher limit.
The Appropriation Limit for the Town in Fiscal Year 2025-26 is $8,814,378. Based on the adopted budget for FY 2025-26, the Town is under its limit by $1,261,760.
FISCAL IMPACT
N/A
ATTACHMENTS
Resolution with Exhibits
Town of Fairfax ATTACHMENT A
Resolution No. 2025-
RESOLUTION 25-__
A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF FAIRFAX
MAKING CERTAIN FINDINGS AND DETERMINATIONS IN COMPLIANCE WITH SECTION XIIIB OF
THE CALIFORNIA CONSTITUTION (GANN INITIATIVE) AND SETTING THE APPROPRIATIONS LIMIT FOR FISCAL YEAR 2025-26
WHEREAS, the Town Council discussed and reviewed the proposed budget for fiscal year 2025-26 at the budget workshop conducted on April 18, 2025, as well as the June 4, 2025 and July 16, 2025, Town Council meetings.
NOW, THEREFORE, BE IT RESOLVED by the Town Council of the Town of Fairfax, that in compliance with Section XIIIB of the Constitution of California, the following is hereby found and determined:
1. The appropriation limit for the fiscal year 2024-25 was $8,204,579.
2. During calendar year 2024 the population in Marin County increased by .93% and the per capita personal income in California increased by 6.44% resulting in an appropriations limit adjustment factor of 7.4%, as shown in the attached Exhibit A;
3. The appropriation limit for the Town of Fairfax for fiscal year 2025-26 $8,814,378 as shown in the attached Exhibit A;
4. The Town is under the appropriation limit for 2025-26 by $1,261,760.
The foregoing Resolution was duly passed and adopted at a regular meeting of the Town Council of the Town of Fairfax, held in said Town on the 6h day of August 2025, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST
_________________________________ ______________________________
LISEL BLASH CHRISTINE FOSTER
MAYOR DEPUTY TOWN CLERK
FISCAL YEAR 2025-26 About the Data
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2024 to January 1, 2025 and Total Population January 1, 2025 City County
Percent
Change 24-
25 Population Minus
Exclusions 1-1-24
Population Minus
Exclusions 1-1-25
Total Population
1-1-25
Belvedere City Marin 0.29 2,052 2,058 2,058
Corte Madera City Marin 0.09 9,947 9,956 9,966
Fairfax City Marin 0.09 7,400 7,407 7,407
Larkspur City Marin -0.15 12,750 12,731 12,731
Mill Valley City Marin 0.07 13,679 13,688 13,688
Novato City Marin 0.22 51,372 51,486 51,690
Ross City Marin 0.83 2,290 2,309 2,309
San Anselmo City Marin 0.26 12,519 12,551 12,551
San Rafael City Marin -0.05 59,917 59,885 59,885
Sausalito City Marin 0.07 6,936 6,941 6,941
Tiburon Town Marin 0.18 8,894 8,910 8,910
Balance of County Marin 0.29 63,257 63,441 66,414
Incorporated Marin 0.09 187,756 187,922 188,136
County Total Marin 0.14 251,013 251,363 254,550
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.
an homes.
EXHIBIT A
May 2025
Dear Fiscal Officer:
Subject: 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, 2025, in conjunction with a change in the cost of living, or price factor, to calculate their appropriations limit for fiscal year 2025-26. Attachment A provides the change in California’s per capita personal income and an example for utilizing the price factor and population percentage change factor to calculate the 2025-26 appropriations limit. Attachment B provides the city and unincorporated county population percentage change along with 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. The code section and the California Constitution can be accessed at the following website: http://leginfo.legislature.ca.gov/faces/codes.xhtml.
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, 2025.
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.
JOE STEPHENSHAW
Director
By:
ERIKA LI
Chief Deputy Director
Attachment
EXHIBIT B
May 2025
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 2025-26 appropriation limit is:
Per Capita Personal Income
Fiscal Year Percentage change
(FY) over prior year
2025-26 6.44
B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2025-26 appropriation limit.
2025-26:
Per Capita Cost of Living Change = 6.44 percent
Population Change = 0.28 percent
Per Capita Cost of Living converted to a ratio: 6.44 + 100 = 1.0644 100
Population converted to a ratio: 0.28 + 100 = 1.0028
100
Calculation of factor for FY 2025-26: 1.0644 x 1.0028 = 1.0674