Report to City Council
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TO: Mayor and City Council
Mayor and City Council Acting in its Capacity as
President and Members of the Board of Directors of
the Moreno Valley Community Services District (CSD)
FROM: Felicia London, Chief Financial Officer/City Treasurer
AGENDA DATE: June 2, 2026
TITLE: PUBLIC HEARING ESTABLISHING APPROPRIATIONS
(“GANN”) LIMIT FOR FISCAL YEAR 2026 /27 (REPORT
OF: FINANCIAL AND MANAGEMENT SERVICES)
(DISTRICT: NOT APPLICABLE)
TITLE SUMMARY: Public Hearing Establishing Appropriations (“G ann”) Limit For Fiscal Year 2026/27 (Resolution No 2026-XX and CSD
2026-XX)
DISTRICT: Not Applicable
Recommendation(s)
That the City Council and CSD:
1. Conduct a Public Hearing to receive public comments on the City of Moreno Valley General Fund appropriations limit for Fiscal Year 2026/27.
2. Adopt Resolution No. 2026-XX, a resolution of the City Council of the City of Moreno Valley, California, establishing the General Fund appropriations limit for Fiscal Year 2026/27.
3. Conduct a Public Hearing to receive public comments on the Moreno Valley Community Services District’s appropriations limit for Fiscal Year 2026/27.
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4. Adopt Resolution No. CSD 2026-XX, a resolution of the Moreno Valley Community Services District establishing the Community Services District appropriations limit for Fiscal Year 2026/27.
SUMMARY
This report recommends that the City Council and the Community Services District Board of Directors conduct public hearings and adopt the resolutions to establish the Gann Appropriations Limits for both the General Fund and the Community Services District (District) for FY 2026/27. The Gann Appropriations Limit, the result of the passage of Proposition 4 in 1979, places limits on the amount of tax proceeds that can be appropriated each year. For FY 2026/27 the limit for the General Fund is $ 192,172,311 and the limit for the District is $ 30,967,251. With revenues subject to the limit totaling $165,337,920 for the General Fund and $ 14,606,737 for the District, there is still significant capacity to accommodate future revenue growth.
DISCUSSION
Section 7910 of the State Government Code requires a governing body to annually adopt by resolution an Appropriation (Gann) Limit for the upcoming fiscal year. For FY 2026/27 the appropriation limit for the General Fund is $192,172,311, and the limit for the District is $30,967,251. With revenues subject to the limit totaling $ 165,337,920 for the General Fund and $14,606,737 for the District, there is still significant capacity to accommodate future revenue growth. The Gann calculation is reviewed by the City’s external audit firm as part of the annual audit process.
In 2008, the available capacity betwee n the appropriations limit and the appropriations subject to the limit for the City reached the lowest point at 6.34%. Over the next three years, appropriation levels were reduced as a result of the recession and declining revenues. Since then, as the loca l economy has improved, the remaining capacity has gradually increased. The current level of approximately 14% of the appropriations limit represents a decrease from the prior year capacity level of approximately 30%, primarily due to the implementation of the additional 1% Measure U Transaction and Use Tax, approved by voters on November 5, 2024, which increased appropriations subject to the limit. Based on projections from the Long -Range Business Plan, we expect capacity levels to re main relatively high , and we do not foresee any issues going forward that would result in the City reaching the appropriations limit.
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The Community Services District continues to maintain sufficient capacity related to the appropriations limit. In 2015 , based on a ruling by the City Attorney, revenues that had previously been accounted for as non -proceeds of tax were reclassified as tax related revenues. This restatement resulted in reducing their appropriation capacity from 78% to 38%. Their available capacity is currently approximately 5 3%. Based on the projections from the Long -Range Business Plan, we anticipate that the capacity rate will remain in this relative range and we do not foresee any issues with the appropriations limit going forward.
Adoption of the proposed resolutions will formalize the Gann Appropriations Limit for FY 2026/27.
ALTERNATIVES
1. Conduct a Public Hearing to receive public comments on the City of Moreno Valley General Fund appropriations limit for Fiscal Year 2026/27.
2. Adopt Resolution No. 2026-XX, a resolution of the City Council of the City of Moreno Valley, California, establishing the appropriations limit for Fiscal Year 2026/27.
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3. Conduct a Public Hearing to receive public comments on the Moreno Valley Community Services District’s appropriations limit for Fiscal Year 2026/27.
4. Adopt Resolution No. CSD 2026-XX, a resolution of the Moreno Valley Community Services District establishing the appropriations limit for Fiscal Year 2026/27.
5. Do not conduct a Public Hearing t o receive comments on the appropriations limit and do not adopt the proposed resolutions establishing the appropriations limit and provide staff with further direction.
Staff recommends Alternatives 1 through 4 since these actions will adopt the Gann Appropriations Limit in accordance with State law.
FISCAL IMPACT
There is no fiscal impact. Both the General Fund and the District are safely within their legal appropriations limit for Fiscal Year 2026/27.
NOTIFICATION
Notification regarding the adoption of the Gann Limit was published in the newspaper on May 15, 2026. The documents were also made available for public review on May 15, 2026.
PREPARATION OF STAFF REPORT
Prepared By: Department Head Approval:
Natalia Medina Felicia London
Financial Resources Division Manager Chief Financial Officer/City Treasurer
Concurred By:
Anna Chacon
Deputy Finance Director (Administration)
CITY COUNCIL GOALS
Revenue Diversification and Preservation: Develop a variety of City revenue sources and policies to create a stable revenue base and fiscal policies to support essential City services, regardless of economic climate.
CITY COUNCIL STRATEGIC PRIORITIES
1. Economic Development
2. Public Safety
3. Library
4. Infrastructure
5. Beautification, Community Engagement, and Quality of Life Youth Programs
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Report Approval Details
Document Title: STAFFREPORT_FMS_GANN LIMIT FY26-27.docx Attachments: - FY 2026-27 Appropriation Gann Limits Report.pdf - FY2026-27 Gann Limit Resolution_2026-XX.docx
- FY2026-27 Gann Limit Resolution_CSD 2026-XX.docx
Final Approval Date: May 27, 2026
This report and all of its attachments were approved and signed as outlined below:
Natalia Medina
Felicia London, MPA
Launa Jimenez
Brian Mohan
Patty Rodriguez