Yorba Linda: recession lingers, recovery slow

Two interesting financial documents – one from the city and the other from the school district – point to the lingering effects of the Great Recession, but both indicate the same slow recovery locally that is seen in state and national economic data.

The city report is a mid-year budget update from Finance Director Dave Christian, who notes general fund revenues, expected to be about $29.4 million this fiscal year, are still more than 9 percent lower than what was collected “just six years ago.”

Revenues “most affected” by the 2007-08 economic downturn were property taxes, sales taxes, franchise fees and other taxes, building permit and other plan check fees, charges for services and interest income, according to Christian.

Property tax income, the city's largest revenue source, continues “slightly higher” than expected, mainly due to the state-forced dissolution of the city's Redevelopment Agency, which siphoned redevelopment area tax increment from the city's general fund.

About $200,000 in taxes that would have gone to the agency have accrued to the general fund this year alone, to be spent on regular city services, such as policing, instead of redevelopment projects and the former agency's affordable housing fund.

Sales tax projections increased slightly this year but continue to lag 2007-08 by more than 6 percent, Christian says. “Because Yorba Linda's sales tax base weathered the economic storm better than some cities...our recovery may appear to be slower than other places....”

Building activity continues to increase, but the resultant income from permits and plan checks is $285,000 lower than expected, due to timing. Christian estimates – “assuming the anticipated projects continue to move forward” – the revenue “will most likely be realized” next year.

The interest earned on investing city funds continues to be 85 per cent lower than the yield from 2006-07, with the Local Agency Investment Fund rate at .2 percent, down from 5.2. Franchise fees, other taxes and charges for services are meeting the current projections.

With one-time income, including $430,000 from the sale of vacant property and $540,000 from the Orange County Transportation Authority for remediation of the former gas station site west of the library, the city expects an overall $885,000 revenue boost.

The school district's state-required interim financial report prepared by Fiscal Services Director Jennifer Miller sees income increasing from a bit more than $203 million this year to about $209 million next year and nearly $222 million the year after.

By 2014-15, the district expects nearly $4.7 million more income than expenses. This year the district anticipates spending about $3.2 million more than income, with the gap narrowing to some $1.7 million next year.

Happily, the district can cover excess expenditures with reserves, expected to end close to $11 million this year, about $9.4 million next year and nearly $14.3 million for 2014-15.