A new
year – the 50th 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.