Chino Valley Town council to hold public hearings on alternative expenditure limitation - Home rule option

The Chino Valley Town Council will be proposing to place an extension of the Town’s alternative expenditure limitation - home rule option on the Town’s August 2016 ballot. The Council will hold two Public Hearings regarding the home rule option extension during its regular meetings on Tuesday, March 22, 2016 and April 12, 2016, both at 6:00 p.m., at which Town staff will present an overview of the ballot measure. Citizens are encouraged to attend the Public Hearings to learn more and offer comments.

What is an expenditure limitation and the alternative home rule option? Per state law, the state imposes a limit on the amount of revenues the Town may allocate in its annual budget. It also requires that the Town have a balanced budget in which expenditures do not exceed available revenues. Each fiscal year, when the Town Council adopts its annual budget, it must also adopt a dollar amount as the cap (the “expenditure limitation”) that expenditures will not exceed, thereby creating the required balanced budget.

However, if the state-imposed limit no longer reflects the actual revenues and expenditure needs of the Town, state law allows the Town’s voters to approve one of several alternative expenditure limitation options. In 1985, the Town’s voters approved the home rule option and they have voted to extend it six times. The Town’s current extension expires in June 2017.

The difference between the state-imposed limitation and the home rule option can be significant. The home rule option allows the Town’s citizens and Council to adopt a budget with a spending limit that is based on actual and projected local revenues and local priorities. Under the state-imposed formula, the Town’s authority to expend funds to provide services would be restricted to the state calculation, regardless of the Town’s actual revenues. For example, in fiscal year 2014-2015, the Town’s actual revenues were $15,125,827, while under the state-imposed formula, the Town’s expenditures would have been limited to $6,037,050, or 40 percent of the limit under the home rule option. The remaining $9,088,777 would have been unavailable to provide services or infrastructure to the citizens.