Upticks in property, sales tax collections show Yorba Linda economy continues improving

One important measure of the strength of the Yorba Linda economy is the revenue the city collects in taxes and fees, especially from property and sales taxes, which reflect the state of the real estate and retail sectors that are often key indicators of growth, stability or decline.

Happily, both of these income sources will be increasing for the next two years, according to projections presented in a recent report from Dave Christian, who serves in city government as treasurer, finance director and assistant city manager.

Property tax income – the city's largest source of general fund revenue at 48.7 percent for the fiscal year that began July 1 – is expected to increase 6.2 percent for 2015-16 and 3 percent for 2016-17, totaling $15.9 million and $16.4 million, respectively, over 2014-15's $15 million.

Due to the real estate recovery, the city “is beginning to see larger-than-normal increases as the result of Proposition 8, which has allowed assessed values to return to the levels they would have been prior to any downward reassessment adjustments,” Christian reported.

Also on an upswing are sales tax collections, the general fund's second largest source of revenue at 20.4 percent. The 2015-16 increase is expected to be 6.4 percent and the 2016-17 increase 4 percent, totaling $6.7 million and $6.9 million over 2014-15's $6.3 million.

“While this revenue has been slow to rebound during the recovery, forecasts now show larger growth partly due to increased spending and partly due to the addition of the Costco gas station,” Christian noted. The station opened in the middle of the 2014-15 fiscal year.

Another key revenue source, as the city continues a long transition from a semi-rural to a more suburban identity, is the 9.3 percent of revenues from building permits and plan checks.

This income is expected to jump 100 percent to $3 million in 2015-16 and decline 31.1 percent to $2.1 million in 2016-17, due to fluctuation in building activity.

“A significant portion of the activity now anticipated to occur in fiscal year 2015-16 was originally slated for fiscal year 2014-15 but was adjusted downward at the mid-year point due to delays with the builders,” Christian explained.

Franchise fees residents pay with cable TV, disposal and utility bills will be steady at about $2 million the next two years, down some from this year's $2.1 million. Business taxes will bring in $361,500 each year, up from this year's $345,000 but down from $431,000 in 2013-14.

Other estimated income for each of the next two years: recreation fees, $1.7-$1.8 million; interest income, $2 million; property transfer tax, $450,000; and motel-hotel tax, $405,000.

Black Gold Golf Club annual revenue is expected in the $6 million range the next two years, with expenses roughly $5.5 million, excluding capital costs and depreciation. The latter is a book entry of about $850,000 per year, not a cash outlay.