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PREPARED BY: STEPHEN D. CONWAY <br /> Director of Finance <br /> <br /> <br />Reviewed by: Assistant Town Manager Town Attorney Finance <br /> <br />S:\COUNCIL REPORTS\2016\06-07-16\04 Gann\Staff Report - FY 2016-17 Gann Limit FINAL.doc <br /> MEETING DATE: 06/07/16 <br /> ITEM NO: 4 <br /> <br /> COUNCIL AGENDA REPORT <br /> <br /> <br /> <br />DATE: MAY 23, 2016 <br /> <br />TO: MAYOR AND TOWN COUNCIL <br /> <br />FROM: LAUREL PREVETTI, TOWN MANAGER <br /> <br />SUBJECT: ADOPT RESOLUTION ESTABLISHING THE FY 2016/17 GANN <br /> APPROPRIATIONS LIMIT FOR THE TOWN OF LOS GATOS <br /> <br /> <br />RECOMMENDATION: <br /> <br />Adopt the attached resolution establishing the Gann Appropriations Limit for FY 2016/17 <br />(Attachment 1). <br /> <br />BACKGROUND: <br /> <br />On November 6, 1979, California voters approved Proposition 4, commonly known as the Gann <br />Spending Limitation Initiative, establishing Article XIIIB of the California State Constitution. <br />This proposition, which became effective in fiscal year (FY) 1980/81, mandated an <br />appropriations (spending) limit on the amount of tax proceeds that the State and most local <br />government jurisdictions may appropriate within a fiscal year. Charges for services, fees, grants, <br />loans, donations and other non-tax proceeds are excluded. Exemptions are also made for voter- <br />approved debt prior to January 1, 1979 and the cost of court-related or Federal government <br />mandates. <br /> <br />The initiative was later modified by two propositions: Proposition 98 in 1988 and Proposition <br />111 in 1990. Proposition 98 established the return of tax revenues exceeding appropriation limit <br />levels to the State or citizens through a process of refunds, rebates, or other means. Proposition <br />111 allowed more flexibility in the appropriation calculation factors. <br /> <br />DISCUSSION: <br /> <br />Attached for Council consideration is a resolution establishing an appropriations limit for FY <br />2016/17. The appropriations limit is based on population and per capita income data provided by <br />the State of California Finance Department. In alignment with State guidelines, the <br />appropriation limit for FY 2016/17 was calculated using a factor comprised of the change in