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    20.    
City Council Regular
Meeting Date: 06/09/2020  

SUBJECT:
HEARING TO ADOPT THE 2020-21 FISCAL YEAR BUDGET AND ESTABLISH THE 2020-21 FISCAL YEAR APPROPRIATIONS LIMITS
RECOMMENDATION:
Conduct a public hearing, consider evidence, and adopt resolutions entitled:
  1. A RESOLUTION OF THE CITY OF CHINO HILLS, ADOPTING A BUDGET FOR FISCAL YEAR 2020-21.
     
  2. A RESOLUTION OF THE CITY OF CHINO HILLS, ESTABLISHING THE FISCAL YEAR 2020-21 APPROPRIATIONS LIMIT FOR THE CITY OF CHINO HILLS AND THE COMMUNITY FACILITIES DISTRICTS.
BACKGROUND/ANALYSIS:
On May 13, 2020, the Preliminary Budget document for the Fiscal Year (FY) 2020-21 was provided to the City Council and subsequently posted on the City’s website on May 21, 2020. On May 27, 2020, a Budget Workshop was held to discuss the proposed budget for FY 2020-21.
 
FISCAL YEAR 2020-21 BUDGET:
The proposed FY 2020-21 expenditures are projected to be $124.1 million including General Fund operating expenditures of $44.2 million. The City's revenues are estimated to be $134.6 million including General Fund operating revenues of $44.2 million. The Capital Improvement Program for FY 2020-21 includes expenditures in the amount of $2.1 million.

APPROPRIATIONS LIMIT FOR FY 2020-21:
Cities are required to establish an appropriations limit for a new fiscal year by June 30 of the current fiscal year in accordance with Article XIIIB of the California Constitution - Gann Initiative. Each year, the appropriations limit is modified by two factors; one factor is a population-based factor; the second factor is an economic-based factor. The population factor that may be selected is the greater of the percentage increase in the City's population or the County's population. The economic factor that may be selected is either (a) the percentage change in the state's per capita personal income, or (b) the percentage change in the City's assessed valuation caused by new non-residential construction.
 
The population factor selected for FY 2020-21 is the County’s growth factor, which is an increase factor of 0.51 percent (per the State Department of Finance). The economic factor selected for the FY 2020-21 is the increase in the state's personal income per capita factor of 3.73 percent as this is the only economic factor available at this time.
 
The City may revise the prior year's calculation if it is determined that the percentage change factor for the new non-residential construction assessed valuation is in the best interest of the City rather than the percentage change in the personal income per capita factor. The County does not release the factor for the change in the assessed valuation caused by new non-residential construction until July of a fiscal year.  Therefore, this factor is unknown at the time the City is required to adopt its appropriations limit.
 
The City's appropriations limit based on the above-mentioned growth factors for the FY 2020-21 is $333,580,665.
 
Community Facilities District (CFD) No. 10 (Fairfield Ranch) and CFD No. 2015-1 (Vila Borba) require an annual appropriations limit be approved which has been included in the attached resolution.  The appropriations limit based on the above-mentioned growth factors for FY 2020-21 is $355,171,581 for CFD No. 10 (Fairfield Ranch) and $6,987,167 for CFD No. 2015-1 (Vila Borba).

Public Notice
A public notice regarding the FY 2020-21 Budget Adoption and the FY 2020-21 Appropriations Limit calculation was published on May 23, 2020, in the Chino Hills Champion newspaper.
ENVIRONMENTAL (CEQA) REVIEW:
This recommended action is exempt from  review under  the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA") and CEQA regulations (14 California Code of Regulations ("CCR") §§ 15000, et seq.) because this action involves government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment and constitute an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. Accordingly, the recommended action does not constitute a "project" that requires environmental review (see specifically 14 CCR § 15378(b)(4-5)). 
FISCAL IMPACT:

Proposed Budget
The Proposed Operating and Capital Improvement Program Budget for FY 2020-21 includes appropriations and transfers to other funds totaling $124,148,232.
 
Appropriations Limit
None.
Attachments
Budget Resolution
Appropriations Limit Resolution
Exhibit A-C Appropriations Limit Calculations
FY 2020-21 Preliminary Budget
PowerPoint Budget Adoption

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