Chino Hills is projecting a $43,036 General Fund surplus in its preliminary budget for fiscal year 2019-20.
The $131.5 million budget was presented to the city council Tuesday afternoon during a two-hour workshop in council chambers.
The budget will be approved at an upcoming city council meeting.
General fund operating revenues are $41.5 million, with property taxes the single largest revenue source.
Estimated general fund reserves, considered to be a gauge to the city’s financial health, are $37.7 million.
Councilman Art Bennett said the general fund reserves are projected to be 80 percent of operating expenditures, which places Chino Hills in a distinct category of cities statewide that are fiscally responsible.
Ben Montgomery, conducting his first budget workshop as city manager, described the general fund reserves as a saving account.
“If our revenue is our paycheck and our expenditures are the checks we write, the best analogy I have is that our general fund reserves is our saving account,” Mr. Montgomery said.
He said these funds can also be considered as a rainy-day fund to tap into if a large unforeseen project comes up, the economy takes a dramatic downturn, a facility needs an unplanned repair, or when a lawsuit doesn’t go in the city’s favor.
Mr. Montgomery said the reserve fund buildup didn’t happen overnight but after many years of fiscal stewardship.
As in years past, the lighting and landscape deficit was brought up as a problem that needs to be solved.
Mr. Montgomery said the city is expected to spend $1.2 million from the general fund to subsidize the lighting and landscape district. Next fiscal year, the amount will rise to $1.6 million and in fiscal year 2021-22, the amount is projected to be just over $2 million.
According to the five-year budget outlook, that amount will rise to $2.85 million in fiscal year 2023-24.
“This is the year to address it before it goes any higher,” Mr. Bennett said. “It hasn’t been equitable since cityhood and we have to bite the bullet.”
Councilman Peter Rogers added, “We’re all in agreement, now is the time.”
Councilman Ray Marquez said it’s a big problem that requires community involvement. “We have to come together and fix this problem,” he said.
The lighting and landscape district, divided into zones, was formed by San Bernardino County in the 1980s to pay for maintenance of parks, trees, slopes, medians, open space and landscaped areas.
Residents who live within these zones are levied assessments that appear on their property tax bill.
Residents who live in older neighborhoods such as Glenmeade, Los Serranos, and some parts of Carbon Canyon do not pay a lighting and landscape fee because they do not live within the district.
When the matter was studied in 2015, former city manager Rad Bartlam said 54 percent of residents pay for lighting and landscape maintenance, while 46 percent do not.
When California voters approved Prop. 218 in 1996, the city could no longer increase fees to keep up with rising landscape costs without a mail-in ballot vote.
However, unlike the water protest votes where only a “no” vote can be cast, lighting and landscape ballots offer a “yes” or “no” vote.
Thomas Gurrola, the only resident who spoke at the workshop, said the budget seems unbalanced when it comes to the lighting and landscape district. He wanted to know how the tax is distributed and was concerned with quality control.
Rising police costs
The law enforcement contract with the San Bernardino County Sheriff’s Department takes up a sizeable chunk of the general fund’s operating expenditures. The contract will increase by $1 million this fiscal year, for a total amount of $14.9 million.
Capt. John Walker said liability costs have skyrocketed. He said claims against the sheriff’s department, the cost of defending those claims, and the astronomical amounts awarded, are impacting law enforcement contracts with cities.
The capital improvement program (CIP) budget was also presented. It includes 48 projects valued at $55 million with $9.99 million for new projects.
Street improvements comprise 59 percent of the new project costs with $1.25 million for the annual overlay and slurry seal program, $956,400 for Mystic Canyon Drive, $420,000 for Pine Avenue from Butterfield Ranch Road to the 71 Freeway, $500,000 for Pipeline Avenue between Chino Hills Parkway and Glen Ridge Drive, $300,000 for Pipeline between Valle Vista and Bayberry drives, and $750,000 for Slate Drive.
The most expensive capital projects are $5 million for well remediation to address a new state contamination level for the chemical TCP which has taken city wells offline and $7.67 million to build a 5-million-gallon reservoir to replace a 1-million-gallon reservoir at the north end of Live Oak Road above Carbon Canyon Road.