Resolution No. 2026-032RESOLUTION NO. 2026-032
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON
ADOPTING THE APPROPRIATIONS LIMIT FOR FISCAL YEAR 2026-
2027, PURSUANT TO GOVERNMENT CODE SECTION 7910
SECTION 1. Recitals.
A. Government Code Section 7910 (GANN initiative), passed by California voters on
November 6, 1979, requires the governing body of each local jurisdiction to establish by
resolution an appropriations limit for each fiscal year at a regularly scheduled meeting or
noticed special meeting.
B. Proposition 111 was passed by California voters on June 5, 1990, and sets forth
the options for making annual adjustments to the appropriations limit based on various
growth factors. The annual inflation factor may be either the growth in California per
capita income or growth in non-residential assessed valuation due to new construction
within the City; and the population factor may reflect the population growth either in the
City or in the County of Los Angeles.
C. The City calculated its appropriations limit based on the non-residential assessed
valuation due to new construction within the City as its annual inflation factor and the
City’s population growth as its annual population growth factor for Fiscal Year 2026-2027.
D. In accordance with Government Code Section 7910, documentation used in the
determination of the appropriations limit has been made available for inspection by the
public at least fifteen (15) days prior to the hearing.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF VERNON AS FOLLOWS:
SECTION 2. The City Council of the City of Vernon hereby finds and determines
that the above recitals are true and correct.
SECTION 3. The City Council hereby establishes $3,920,689,445 as the amount
of the appropriations limit for fiscal year 2026-2027, in accordance with the provisions
of Government Code Section 7910 and Proposition 111.
The computation for fiscal year 2026-2027 is as follows:
2025-2026 APPROPRIATIONS LIMIT CALCULATION
2025-2026 Appropriations Limit $3,272,693,266
Increase in Nonresidential Construction: 20.39%
City population change: -0.49%
1.2039 x 0.9951= x 1.19800089
$3,920,689,445
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Resolution No. 2026-032
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_______________________
SECTION 4. The City Council approved the Fiscal Year 2026-2027 Budget by
adoption of a resolution, which did not exceed the appropriations limit for Fiscal Year
2026-2027.
SECTION 5. Severability. If any provision of this Resolution or the application
thereof to any person or circumstance is held invalid, such invalidity shall not affect other
provisions or applications, and to this end, the provisions of this Resolution are declared
to be severable.
SECTION 6. The City Clerk, or Deputy City Clerk, shall certify the passage and
adoption of this resolution and enter it into the book of original resolutions.
APPROVED AND ADOPTED June 16, 2026.
________________________
MELISSA YBARRA, Mayor
ATTEST:
GENOVEVA ROCHA, City Clerk
(seal)
APPROVED AS TO FORM:
ZAYNAH MOUSSA-MILWARD,
City Attorney
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Resolution No. 2026-032
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_______________________
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF VERNON )
I do hereby certify that the attached is a true copy of Resolution No. 2026-032 that was
passed and adopted at the Regular Meeting held on June 16, 2026, by the following vote:
AYES: Larios, Merlo, Rodriguez, Rivera, Ybarra
NOES:
ABSENT:
ABSTAIN:
__________________________
GENOVEVA ROCHA, City Clerk
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City Council Agenda Report
Meeting Date: June 16, 2026
From: Alice Hui, Director of Finance/City Treasurer
Department: Finance
Submitted by: Angela Melgar, Finance Manager
Subject
Fiscal Year 2026-27 Citywide Annual Operating Budget, Capital Improvement Plan, and
Appropriations Limit (Gann)
Recommendation
A. Adopt Resolution No. 2026-031 approving and adopting the Annual Operating Budget and the
Capital Improvement Plan for Fiscal Year 2026-27; and
B. Adopt Resolution No. 2026-032 adopting the Appropriations Limit for Fiscal Year 2026-27
pursuant to Government Code Section 7910.
Background
Economic Outlook
The current economic environment remains uncertain. While interest rates are anticipated to
decline slowly, which could improve business investment conditions and consumer borrowing
activity during the latter half of FY 2026-27, geopolitical conflicts have created energy price
volatility. These, along with rising labor costs, elevated pension contributions, and federal policy
changes present a mixed economic outlook. Adding to these challenges, the City is experiencing
a transitional period involving changes to some of the City's customer base. Therefore, a
measured approach to budgeting will help preserve the City's ability to effectively serve its
constituents while continuing to foster a strong business environment during these uncertain
times. Opportunities for cost savings and operational efficiencies have been identified, potential
new revenue sources are under evaluation, and ongoing infrastructure investments remain a
priority to sustain the high level of City services that residents and businesses expect.
FY 2026-27 Operating and Capital Budget
Prior to the Fiscal Year (FY) 2026-27 Budget adoption, staff presented two Budget Workshops
to outline the proposed budget and allow City Council to gain an in-depth understanding of the
City's operations and intended fiscal direction. Under the City Administrator's leadership,
collaboration between all City departments ensured a unified vision for the upcoming fiscal year.
As required by Chapter 8.2 of the City's Charter, staff presented the proposed budget for FY
2026-27 to City Council on May 19, 2026 Budget Workshop I focused on the vision for the City
in the upcoming year, departmental highlights for the current year, and the individual department
proposed budget changes from the previous fiscal year. On May 28, 2026, the same presentation
was submitted to the Business and Industry Commission.
Budget Workshop II on June 2, 2026, covered the changes in General and Enterprise Fund
budgets from previous versions, detailing the current iterations for Council's consideration. Staff
also provided more detailed information on the proposed Electric rate increase, request to fund
an interventionist position at Vernon City Elementary School, and fiscal impact of implementing
the strategic goals in the FY 2026-27 Proposed Budget. Council recommended funding the
Reading Interventionist but delaying the construction of the library nook from the Community
Engagement department budget. For the enterprise funds, it was recommended that the Energy
Cost Adjustment and the RPS Pass-through continue to be budgeted separately and itemized
on customer bills instead of a combined Power Supply Adjustment Charge.
Pursuant to Chapter 8.4 of the City's Charter, on June 16, 2026, a public hearing will be held to
present the final version of the FY 2026-27 Budget to City Council for adoption, to go into effect
July 1, 2026 through June 30, 2027. Adoption of Resolution No. 2026-031 approves the Citywide
Annual Operating Budget and Capital Improvement Plan.
Appropriation Limit (Gann Limit)
California voters approved an initiative on November 6, 1979, that added Article XIIIB to the State
Constitution, which placed limits on the amount of revenue that can be appropriated by all entities
of government. This State Appropriations Limit is often referred to as the Gann Limit (Gann),
named after Paul Gann, the author of the measure placing the limit in the State constitution. In
accordance with that legislation, the governing body of each government jurisdiction must, by
resolution, establish its annual Appropriations Limit for the coming year at a regularly scheduled
meeting or noticed special meeting.
The original Article XIIIB (Proposition 4) and its implemented legislation, Chapter 1205/80, was
modified in June 1990 by Proposition 111 and SB 88 (Chapter 60/90). As a result of Proposition
111, the City is required to choose between two annual inflation factors: (1) the growth in
California per capita income; or (2) the growth in non-residential assessed valuation due to new
construction within the City; and two population factors: (1) the growth in the City; or (2) county
population. For the FY 2026-27 Gann appropriations limit calculation, the growth in non-
residential assessed valuation due to new construction within the City and the percentage growth
in the City population was used (Attachment 3). For the previous FY 2025-26 Appropriations
Limit, the growth in California per capita income and the growth in County population was used.
The City's appropriations subject to the limit have remained well below the Gann Appropriations
Limit. Given the size of this gap, it is unlikely that the City will exceed the Appropriations Limit in
the upcoming years without significant changes to the City's tax structure. The documentation
used in the determination of the appropriations limit has been made available for public inspection
on the City's website at least 15 days prior to adoption. Adoption of Resolution No. 2026-032
adopts the Appropriations Limit for Fiscal Year 2026-27 pursuant to Government Code Section
7910.
Pursuant to Government Code Section 65090, on June 4, 2026, the public hearing notice was
posted at City Hall, the City's website and published in the Huntington Park Bulletin (Attachment
4).
Fiscal Impact
The FY 2026-27 Budget proposes total expenditure appropriations of$410,851,577 which is well
under the $3,920,689,445 appropriation limitation imposed pursuant to Gann.
Attachments
1. Resolution No. 2026-031
2. Resolution No. 2026-032
3. Gann Limit Calculation
4. Public Hearing Notice