Neil Nisperos, Staff Writer
Created: 05/29/2011 06:54:16 PM PDT
CHINO – City officials announced somewhat mixed budget projections for the upcoming fiscal year last week with revenue increases, rising pension costs, a significant reserve dip and the spectre of losing redevelopment agency funds.
Projected general fund expenditures for fiscal year 2011-12 are about $44 million, City Manager Patrick Glover said.
The figure is an increase of about $234,000 from last year, officials said.
City retail sales activity increased 2 percent from last year, Glover said.
Though property tax revenues haven’t been as rosy as sales tax revenues, a projected 0.7 percent increase will provide about $90,000, Glover said.
Development remains sluggish, although the city is seeing some construction activity at its two new housing developments at College Park and The Preserve, which has provided a projected $2.7 million in additional revenue in the coming year.
“We’ve got some new property development at College Park and the Preserve, so hopefully things are starting to turn around,” Mayor Dennis Yates said.
In addition to revenue increases, the city plans to continue saving by leaving eight city positions vacant, bringing a total of 30 unfunded positions in the past three years.
The vacancies will save the city $3.6 million annually, officials said.
Among the positions left vacant is a police lieutenant position, after the recent promotion of Chino Police Lt. Matt Jones to captain this month, which saves the city about $200,000 annually, Yates said.
Despite the gains, the city is bracing for the possibility of the state eliminating redevelopment agencies as part of Gov. Jerry Brown’s plan to close a near $10 billion state budget deficit.
“If this does come to fruition, this will be a severe impact for the city of Chino and our ability to provide funding for projects such as the cultural arts center, and would severely limit our ability to provide low and moderate income families with housing opportunities at the local level,” Glover said.
The city is counting on redevelopment agency funds to help complete a $12 million Cultural Arts Center. Officials plan to begin building next year on Central Avenue across from City Hall.
Even with new savings, the largest impact to general fund expenditures are rising pension benefit costs, officials said.
The city currently pays the full share of contribution costs for employees. The city’s $6.6 million CalPERS contribution this year is increasing to $7.7 million next fiscal year, because earnings from the PERS investment portfolio have fallen short.
In response, Glover announced a city plan to mitigate the rising pension costs by using $4.2 million from general fund reserves to pay off a PERS “side fund” established six years ago to address public safety employee retirement costs.
In addition, the city plans to prepay the annual PERS cost of $7.7 million in July.
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