The city of Chino Hills is facing a $2.2 million budget shortfall this fiscal year that will require the use of the reserve funds to maintain essential services, and projected deficits could reduce reserves by nearly half over the next five years, officials announced Thursday.
Before drawing on reserve funds, officials have “taken many steps to proactively reduce costs wherever possible and maximize available resources over the last few years,” according to a city statement. “While the city remains financially stable overall, this deficit signifies a need for strategic long-term revenue planning.”
The 2025-26 budget totals $147.9 million in projected revenues, with spending at $150 million across all of the city’s funds. The General Fund pays the costs of essential services including public safety, infrastructure maintenance, recreation programs and special events. Its revenues are projected at $56.4 million, with expenditures at $58.6 million.
The city’s contract with the San Bernardino County Sheriff’s Department for totals nearly $19 million and is 32% of the city’s General Fund payouts. The 2025-26 contract with the sheriff’s department was about $500,000 higher than the previous year’s cost.
This year’s projected $2.2 million deficit will be covered by General Fund Reserves.
“Much of the City’s revenue is restricted and must be spent for specific purposes such as water, sewer, and landscaping,” according to a city statement. “The General Fund unrestricted reserve is considered the City’s savings account or rainy-day fund for unforeseen circumstances.”
Despite the unbalanced budget requiring a reduction in reserve money, officials said the city will remain “in a strong fiscal foundation,” officials said. The General Fund Reserve totals $46.8 million and an Unrestricted Reserve has a balance of $34.9 million.
“While this level of reserves provides short-term stability, continued deficits are projected to grow and could reduce the City’s reserves by nearly half over the next five years to $27.1 million if new sources of local revenue are not identified,” according to a city statement.
Officials said protecting reserves for long-term needs and emergencies, and a top priority is exploring options for long-term financial stability with public transparency and open communication.
The City Council adopted the 2025-26 budget June 10. To view the City’s Adopted Budget and Budget in Brief document, visit chinohills.org/Budget.
