Council directs staff to place temporary Gann appropriations‑limit increase on June ballot

City finance staff presented budget projections showing Sierra Madre could exceed the constitutional Gann appropriations limit under conservative growth assumptions by fiscal year 2029. To avoid the constitutional consequences of exceeding the limit (mandatory refunds or reductions in appropriations), staff recommended asking voters to temporarily increase the city’s appropriations limit by 16% — approximately $2.4 million over four years — via the June 2026 statewide primary ballot.

Staff emphasized the measure would not impose a new tax, raise existing tax rates or permanently alter appropriations authority; it would instead permit the city to appropriate revenues it already lawfully receives under current tax structures. The proposed increase is temporary (four years) and would require future voter approval to remain in place beyond that period.

Council discussed modeling assumptions, including conservative inflation (2.5%) and flat population growth assumptions appropriate for a largely built‑out city. Members asked how the cap interacts with capital versus general‑fund spending; staff explained water‑rate and enterprise projects funded by ratepayers are treated differently from general‑fund appropriations under the Gann calculation.

Council gave direction to staff to place the measure on the June 2026 ballot and instructed staff and the city attorney to return with final ballot language and the formal call for election in February so the March 6 deadline for ballot placement can be met. Council noted that approval requires a simple majority (50% + 1) and that a community education campaign would be needed before June.