Yorba Linda economy moving in positive direction for 2017, reports from city finance director show

A new year – the 50^th since Yorba Linda incorporated as a city in 1967 – finds the economy moving in a positive direction, as measured by increases in property and sales tax revenue collected to fund municipal operations during the current fiscal year.

Here's a breakdown of the latest budget numbers from recent financial reports compiled by city Treasurer and Finance Director Scott Catlett for examination by City Council members:

--Property taxes, the city's largest revenue source, were expected to produce a bit more than $16.4 million from July 1, 2016, through June 30 of this year, when the current two-year budget was adopted. The latest projection stands at close to $17.6 million, up 7 percent.

Sales tax revenue was initially pegged at more than $6.9 million, but the latest projection is close to $7.8 million, an increase of 12.3 percent. The city's third-largest revenue source is franchise taxes from cable television and utilities, which remains steady at about $2 million.

Interestingly, Catlett noted that part of the additional sales tax revenue received from July through September of last year was “due to misallocations to other jurisdictions that have been corrected through the efforts of the city's sales tax consultant....”

And, Catlett stated, the projection “does not yet include the anticipated positive impact related to the opening of the JStar Motors Maserati dealership in Savi Ranch. Because no sales tax data is available for the dealership since its relocation to Yorba Linda, staff is not yet comfort-able forecasting the impact of the dealership's sales on the city's sales tax revenue.”

--The city's operating expenses should total some $32.7 million by fiscal year-end, June 30.

Transfers to other funds (nearly $2.8 million to the city's Landscape Maintenance Assessment District, $1.6 million for capital projects and $567,000 to special reserves) is expected to bring the total to just over $37.6 million.

Catlett hasn't yet projected possible savings from the expenditure side of the budget, but he stated, “...consistent with past fiscal years, it is anticipated that...savings will be identified....”

--The latest estimate from Catlett is the city will add $733,000 to an already robust operating reserve of nearly $21.1 million, about 68 percent of general fund expenditures. Add close to $8.3 million in special reserves, and the total nears $29.4 million, 94 percent of expenditures.

Based on a policy adopted in October, whenever operating reserves are more than 60 percent of expenses, “staff must present a plan to the City Council to utilize the excess funds,” Catlett noted, adding that the excess totaled about $1.6 million last June 30.

Catlett will present a plan incorporating the excess into a multi-year program “for addressing the city's liabilities and unfunded needs,” when the next two-year budget is presented before the current fiscal year ends June 30.