Measuring Yorba Linda's economic vitality

Sales tax collections and employment figures are two good measures of this city's economic vitality, with recent statistic-based predictions showing reasons for optimism and some pessimism.

Yorba Linda's share of the state's sales tax revenue is expected to increase 3 percent in the  2013-14 fiscal year beginning July 1 and another 7.3 percent in 2014-15, but the number of residents who are employed will not match a 2008 high in the foreseeable future.

Currently, the sales tax rate is 8 percent in most of Orange County, with 6.5 percent retained by the state, 1 percent returned to the city and one-half percent for the county Transportation Agency.

The state started charging a sales tax--an initial 2.5 percent fee--in 1933, with the 1 percent local levy added in 1962.  The county transportation tax was added in 1991.

The one percent sales tax collections are anticipated to reach the city's near $6.2 million high hit in 2007-08, with the expected revenue climbing to $5.8 million in 2013-14 and just above $6.2 million in 2014-15, according to an analysis by Finance Director Dave Christian.

That's a jump from an estimated $5.6 million to close this fiscal year June 30.  Recent forecasts, stated Christian, “show larger growth partly due to increased spending and partly due to the infusion of new businesses.”

The big boost expected in the 2014-15 fiscal year will be due “mainly” to a new Costco gas station, which will open sometime during the end of the 2013-14 fiscal year, noted Christian.

Sales tax revenue is the second-largest source of this city's general fund revenue, behind property taxes, which will bring in an estimated $13.4 and $13.6 million during the next two years, with total revenue expected to reach $29.5 million 2013-14 and $29 million 2014-15.

However, the employment picture for city residents is less sanguine, based on an April 2012 report from the Southern California Association of Governments cited in a draft version of an upcoming 2014-21 housing element compiled by a city-hired consultant.

The report stated Yorba Linda had 19,000 employed individuals in 2008, with projections of 17,200 in 2020 and 17,300 in 2035.  The consultant noted the regional association does not project the “the city's employment base to return to pre-recessionary levels.”

While most employed Yorba Lindans work outside the city, most jobs within city limits are held by commuters from other cities.  The 2010 census reported that of 11,416 “primary” jobs in the city, 88 percent are filled by non-Yorba Linda residents.

The largest proportion of the city's jobs, 19.5 percent, are in manufacturing and construction.  Retail and trade positions account for 14.9 percent, accommodations and food services 12.4 percent and healthcare and social assistance 9.3 percent.

The figures for Yorba Linda in this regard mirror the numbers for other north Orange County cities, including Anaheim, Brea, Fullerton and Orange, which also have high percentages of their workforces commuting from outside city limits.

Housing document reports city's low-cost efforts

One statement stands out in an otherwise well-documented 138-page draft of this city's latest housing element, a report mandated by and slated to be forwarded to state officials by an Oct. 15 deadline, after anticipated approval by the City Council this summer.

The statement--“Yorba Linda has an active history of supporting affordable housing in its community”--is at odds with comments made by the council members who served on the governing body during the previous housing planning cycle.

As officials struggled to meet state requirements to identify sites for 831 units in low-income categories in the 2008-2013 housing element period, the council often criticized past panels for not providing low-cost housing opportunities, especially as the eastside was developed.

A lack of space on the eastside was the major reason 12 of 14 sites for potential low-income units were named on the westside and just two in the east, both at Savi Ranch. The 14 sites met mandates for the 2008-13 cycle and will meet new requirements for the 2014-21 period.

And council members who identified the 14 properties for rezoning to 10, 20 and 30 units per acre appeared to be motivated mostly by severe negative consequences if they didn't act, including a threat of litigation and loss of local control over land-use decision-making.

Residents obviously agreed with council's decision, since voters approved the zone changes in June 2012, after a city-funded education effort highlighted the penalties. A prior 2010 vote to rezone just the Savi Ranch land had failed.

Of course, if “active history” means looking back just a few years, the city has supported low-cost housing by providing 549 units at Villa Plumosa, Victoria Woods, Arbor Villas, Parkwood, Archstone and the Meta units across from Stater Brothers.

The two Savi Ranch sites will add 123 units, and properly zoned vacant and underutilized sites could provide another 545. Also in the count are 60 of 632 units in six developments: The Hills, Yorba Linda Village, Jamestown, Lakeview, Rancho Linda and Evergreen Villas.

The units are held under 55-year covenants for households in three lower-income groupings: “extremely low” with incomes from $20,250 for one person to $28,900 for four persons; “very low” ranging from $33,750 to $48,150; and “low” running from $53,950 to $77,050.

Categories are based on a percentage of an area median average. Moderate income ranges for one- to four-person households are $71,650 to $102,350, with higher incomes considered above moderate.

A Southern California Association of Governments statement lists Yorba Linda with 21,409 households with income levels that include 1,141 extremely low; 1,328 very low; 2,295 low; 3,027 moderate; and 13,618 above moderate.

Using 2010 census data, the new housing element draft reports 88 percent of 11,400 people employed in the city commute from outside the city limits and 40 percent of the city's primary employment is in lower-paying retail, hospitality, construction and service-related industries, “indicative of the shortage of local affordable housing opportunities for the community's workforce.”  

Audit adds up city's financial worth

So, you might ask, after 46 years as an incorporated city, how does Yorba Linda fare financially in terms of cash resources and capital assets?

The answer to that question can be gleaned from more than 100 pages of audited financial documents presented to the City Council recently by Finance Director Dave Christian.

Three reports and explanatory material, prepared by the independent auditing firm Lance Soll & Lunghard of Brea, reflect the city's financial condition through the end of the most recently completed fiscal year, and, according to the auditors, “present fairly” the city government's cash and asset positions.

Overall, the city's total assets, including cash, investments and capital assets, approach the half-billion dollar neighborhood, namely $518 million assets with $29 million liabilities.

Capital assets, which include land, street pavement, buildings, machinery and equipment, motor vehicles and other infrastructure, total a bit more than $400 million, with the remainder in various forms of cash and investments.

The city's largest expenses last year included $11.6 million for public safety, $10.6 million for “general government,” $9.8 million for public works, $6.4 million for parks and recreation and $2.6 million for community development, as well as $2.9 million for interest paid on long-term debt.

Of that $43.9 million total, $5.8 million was recouped by collecting fees and other charges for services and another $5.3 million came from operating and capital contributions and grants. Taxes paid for the rest.

Interestingly, of the city's two “business-type” activities—golf and solid waste disposal—the former lost money, while the latter showed a bit of a profit.

Black Gold golf expenses totaled more than $6.7 million against some less than $5.9 million in revenue for a negative impact of $864,151, while the city's weekly trash pick-up cost more than $5 million with about $5.2 million in revenue for a positive impact of $130,931.

Of course, expenses for the city's golf operation included $814,519 in depreciation, and the audit ledger listed $782,545 in debt-related interest expense.

Also, according to the audit report, “The General Fund made various advances to the Golf Course fund for capital projects. There is no set repayment schedule or an accrued interest rate at this time. The balance outstanding at June 30, 2012, was $4,702,898.”

Net assets for Black Gold at the beginning of the fiscal year were more than $5.3 million, dropping to about $4.4 million by year's end. The trash operation reduced a negative net asset value of $793,567 to $663,917.

A couple of interesting facts about the city's capital assets: the audit listed Black Gold's net value as nearly $27 million and the city's former Redevelopment Agency land held for resale at $18.8 million.

Since the state forced the agency's dissolution last year, the former agency's assets and liabilities have been held in a “private-purpose trust fund” that listed assets at about $62 million and liabilities at more than $107 million. Total principal and interest remaining on the former agency's land debt is $141.6 million, payable through 2033.