TO: MAYOR AND CITY COUNCIL MEMBERS, CITY OF CHINO
FROM: LINDA REICH, CITY MANAGER
SUBJECT
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Fiscal Year 2025-2026 Budget Adoption.
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RECOMMENDATION
recommendation
1) Adopt Resolution No. 2025-034, approving the Fiscal Year (FY) 2025-26 Proposed Budget; 2) adopt Resolution No. 2025-035, approving the Appropriations Limit for Fiscal Year 2025-26; and 3) authorize the City Manager to execute all necessary documents on behalf of the City.
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FISCAL IMPACT
The City’s total budget for FY 2025-26, excluding the Successor Agency, reflects a comprehensive financial plan ensuring fiscal sustainability across municipal operations. The total City budget stands at $325,463,781 in revenue and $266,048,003 in expenditures. Total transfers in and out between funds amount to $61,885,305, supporting interfund allocations and operational needs. Total capital projects across all funds amount to $8,986,653, ensuring continued investment in infrastructure and municipal improvements.
As the primary operating fund of the City, the General Fund supports essential municipal services, including public safety, administration, and community programs. The FY 2025-26 General Fund Budget includes updated revenue estimates, expenditures, capital projects, and fund transfers. General Fund revenue is projected at $131,036,755, with $100,167,052 in expenditures and $287,000 allocated for capital projects. Transfers include $1,841,662 in incoming funds and $27,900,879 in outgoing allocations, resulting in an estimated net surplus of $4,523,486.
The Successor Agency budget totals $3,276,688 in revenue and $3,343,403 in expenditures, reflecting its financial obligations to wind down the activities of the former redevelopment agency.
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above furthers the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Financial Stability
• Responsible Long-Range Planning
BACKGROUND
On May 22, 2025, the City Council held a Budget Workshop to review and discuss the proposed budget for FY 2025-26. Since that workshop, additional budget adjustments have been made to reflect updated expenditure priorities, operational needs, and strategic initiatives.
ISSUES/ANALYSIS
Following the Budget Workshop on May 22, 2025, the following changes have been incorporated into the final proposed budget. These adjustments reflect feedback, updated financial projections, and operational refinements. A full list of changes is attached for reference, with key highlights outlined below. Some of these budget adjustments were previously approved by the City Council through separate agenda items, while others will be presented tonight for consideration in individual discussions.
Estimated Revenue Adjustments:
The General Fund revenue estimate has been reduced by $3,000,000 due to changes in the administrative charge for Development Impact Fees (DIFs). The administrative fee for DIFs has been lowered from 12% to 3%, resulting in the revenue reduction. This adjustment will be discussed in further detail as a separate agenda item during tonight’s City Council meeting.
Projected Expenditure Adjustments:
General Fund 100
• Civic Center Paint Project - $50,000 - Council Budget Workshop Request
Staff has included funding for the painting of the City Hall Building. A preliminary cost estimate of $2.5 million was obtained; however, to initiate the design process, $50,000 has been allocated in the FY 2025-26 proposed budget.
To ensure funding availability when the project moves forward, $2,450,000 will be designated from the FY 2024-25 General Fund balance to be allocated once the design phase is complete and final cost estimates are available.
Other Funds and changes:
• Preserve Teen Center Programming - $168,475 - Council Workshop Request
- Staffing/Supplies - $78,475 (CS Fund 330)
- Van IE268 - $90,000 (Equip Mgt Fund 660)
• West End Regional Navigation Center - $200,000 (Affordable Housing Fund 310)
• Title Change - Management Analyst to Permit Center Coordinator in Development Services - no fiscal impact for this change.
Incomplete and Ongoing Projects
In addition to the new appropriations for FY 2025-26, the budget includes a revised estimated $87,740,797 in continuing appropriations for ongoing projects that remain incomplete as of June 30, 2025. These carryover funds ensure that essential initiatives continue without disruption. Importantly, they are sourced from fund balance savings, not the FY 2025-26 operating budget. To streamline financial operations, staff will automatically carry over these funds at the close of FY 2024-25 into FY 2025-26, allowing uninterrupted project progress without requiring additional Council action.
Labor Negotiations
The City is currently in negotiations with various bargaining units, recognizing that its employees are a vital investment in delivering quality services to the community. While the associated costs have not yet been included in the proposed budget, once agreements are finalized, adjustments may be necessary to reflect changes in compensation and benefits, ensuring continued support for the workforce.
Appropriations Limit
Article XIII-B of the State Constitution (as amended by Proposition 111) requires the City to adopt an annual limit on the appropriation of tax proceeds, which defines the amount of tax revenues the City can allocate in a given year. For FY 2025-26, the City’s appropriations limit has been calculated in accordance with State guidelines. This calculation was made by using the Per Capita Personal Income change at 6.44% and the City’s annual population change of 1.76 %, which is in accordance with the provisions of Article XIII-B of the State Constitution.
The appropriations limit for FY 2025-26 for the City of Chino is $3,779,762,440.13. Tax revenue budgeted for this fiscal year that is subject to the appropriations limit is $115,952,197.32, which places the FY 2025-26 City budget $3,663,810,242.81 under the limit. The difference represents the amount of tax revenue that the City could appropriate if the revenue is available. Resolution No. 2025-035 sets the City’s Appropriations Limit (Gann Limit) for FY 2025-26.
Tonight, staff is pleased to present the FY 2025-26 Proposed Budget for City Council's consideration.
Attachments:
1. Changes to the FY 2025-26 Proposed Budget
2. FY 2025-26 Proposed Budget - (5/22/2025 Budget Workshop version)
3. Budget Resolution No. 2025-034
4. GANN Limit Resolution No. 2025-035