RESOLUTION NO. 2023-071
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHINO, CALIFORNIA, UNANIMOUSLY DECLARING A FISCAL EMERGENCY PURSUANT TO ARTICLE XIIIC SECTION 2(b) OF THE CALIFORNIA CONSTITUTION WHEREAS, pursuant to Article XIIIC, Section 2(b) of the California State Constitution, an election to impose a general tax is required to be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by unanimous vote of the governing body; and WHEREAS, the City Council may act to submit to the voters at the special municipal election to be held on March 5, 2024 (an election which does not include the election of a person to membership on the City Council) a question related to the imposition of a general tax, if a fiscal emergency is declared; and WHEREAS, the City of Chino (“City”) faces severe budget pressures due to continued increases in operating expenditures significantly outpacing increases in revenue; and WHEREAS, protecting the City’s long-term financial stability is key to maintaining essential city services for residents and businesses, including police, 911 emergency medical response, street repair, clean local drinking water, clean and safe public areas, while addressing homelessness, and maintaining senior, veteran, and youth programming; and WHEREAS, the City is facing a financial crisis. In Fiscal Year 2023-2024, the City shortfall is projected to be $5.7 million, with reserves covering the difference. Starting in Fiscal Year 2024-2025, the City is projecting a structural deficit of $15 million on average annually; and WHEREAS, after reviewing the Fiscal Year (FY) 2023-2025 budget, which outlines $118 million and $118.7 million in expenditures for 2023-2024 and 2024-2025 budgets, respectively, it is estimated that the City’s current needs require an additional $15 million on average annually, which would deplete the $73 million currently in reserves by FY 2028-29; and WHEREAS, the City Council wishes to declare a fiscal emergency as that term is used in Article XIIIC, section 2(b) of the California State Constitution; and WHEREAS, the City Council undertook a financially responsible approach to overcoming hurdles in the years during and after the recession and COVID-19 to balance the budget, which included reducing the City’s workforce, eliminating programs, and deferring repairs and maintenance; and WHEREAS, while having an operationally balanced budget, the City has approximately $260 million in unfunded infrastructure and neighborhood improvement projects that, over time, will become more expensive to address; and WHEREAS, unless addressed, the City will be facing challenges that may force essential City services and programs to be reduced or eliminated in the coming years if additional sources of revenue for the General Fund are not identified; and WHEREAS, it will become more difficult to protect the City’s valued quality of life programs and maintain essential City services including police, 911 emergency medical response, street repair, clean local drinking water, clean and safe public areas, while addressing homelessness, and maintaining senior, veteran, and youth programming; and WHEREAS, additional locally controlled funding is needed to address service priorities including police, 911 emergency medical response, street repair, clean local drinking water, clean and safe public areas, while addressing homelessness, and maintaining senior, veteran, and youth programming; and WHEREAS, local control over taxpayer dollars will help to ensure more money stays in the City for essential local services and help to maintain the level of service residents expect and deserve; and WHEREAS, despite the City’s sound management and disciplined control of its financial health, the City’s ability to sustain local services in the future is seriously threatened by the fiscal crisis the City faces; and WHEREAS, even with these fiscal difficulties, the City seeks to continue to maintain the same level of essential City services for the benefit of its residents, including police, 911 emergency medical response, street repair, clean local drinking water, clean and safe public areas, while addressing homelessness, and maintaining senior, veteran, and youth programming; and WHEREAS, it is in the best interests of the public welfare of the residents and businesses of the City to avoid future cuts to essential City services; and WHEREAS, the City’s fiscal crisis herein described is of sufficient gravity and severity that the City Council may propose that the electorate approve a one cent (1¢) Transaction and Use Tax, increasing the overall combined (state, county, district, and local) tax rate in the City from 7.75% to 8.75%, to be in effect until ended by the voters.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHINO, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. That the foregoing recitals are true and correct, and are incorporated herein by reference.
Section 2. The City Council hereby makes the following written findings supporting the declaration of said fiscal emergency:
A. The City experienced a budget shortfall of $5.7 million, with reserves covering the difference in Fiscal Year 2023-2024; B. The City is projected to see a structural deficit of $15 million on average annually starting in Fiscal Year 2024-2025; C. The City is facing challenges that may force essential City services and programs to be reduced or eliminated in the coming years if additional sources of revenue for the General Fund are not identified; D. The projected depletion of the $73 million currently in reserves by Fiscal Year 2028-2029; and E. The City Council has taken actions to eliminate programs and defer repairs and maintenance that did not affect services to the community, but reduced expenditures. However, to sustain the current levels of service, the City must consider additional revenue sources.
That based upon the foregoing, the City Council hereby unanimously finds and declares a fiscal emergency, as the term “emergency” is used in Article XIIIC, Section 2(b) of the California Constitution, now exists in the City of Chino justifying calling for a special municipal election on March 5, 2024, in order that the City may propose, and the City voters may consider, adoption of a general tax measure intended to address that emergency by ensuring that the City has the resources necessary to preserve the public health, safety, and welfare in the future.
Section 3. That the City Clerk shall certify to the passage and adoption of this Resolution. This Resolution shall be effective immediately upon passage and adoption.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Chino, California, at a regular meeting held on the 21st day of November, 2023.
EUNICE M. ULLOA, MAYOR
ATTEST:
_____________________________
NATALIE GONZAGA, CITY CLERK
APPROVED AS TO FORM:
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FRED GALANTE, CITY ATTORNEY
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss
CITY OF CHINO )
I, Natalie Gonzaga, City Clerk of the City of Chino, do hereby certify that the foregoing Resolution was duly adopted by the City Council at a regular meeting held on the 21st day of November 2023, by the following votes:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
______________________________
NATALIE GONZAGA, CITY CLERK
01225.0007/937724.1
01225.0007/937724.1
Resolution No. 2023-071