Yorba Linda City Council updates budget at midpoint of two-year cycle with new figures

Yorba Linda – like many other forward-looking municipalities – operates on a two-year budget cycle, with City Council members reviewing periodic updates dealing with revenue projections and the need for additional expenditures.

The most recent review came a few days before the start of the second year of the current budget cycle that began July 1. The update, from Finance Director Scott Catlett, presented the council with a generally pleasant economic melody dotted with just a couple sour notes.

Overall, the city expects revenue to increase 1.8 percent during the 2018-19 fiscal year over what was anticipated when the budget was adopted last year, resulting in $37.5 million “total available resources.”

Most income is from property taxes, with the city now forecasting a 3.1 percent jump over what had been expected to nearly $19.6 million. Catlett reported, “This is the result of cont-inued strong growth in assessed valuation in the city, which has been occurring for the last several years.”

However, the city now sees a 1.7 percent drop from what was expected in sales taxes to a bit less than $7.4 million. While up from last year, Catlett noted that some additional growth “was anticipated by the city's sales tax consultant that they no longer feel will occur.”

The projection for income from franchise taxes, which residents pay on their public utility bills, will drop again this year, now to some $2 million or 5.3 percent lower than had been expected.

“These declines reflect lower electric usage and a gradual migration of cable television cust-omers to satellite and internet-based services, for which the city does not collect a franchise tax,” Catlett reported.

The projection for revenue from the property transfer tax has been increased to $650,000 or 18.6 percent above what had been expected, due to “strong sales activity in the city,” stated Catlett, who noted, “This trend is expected to continue next fiscal year....”

Income from building permits are projected to drop some $200,000 to $1.6 million, as small increases are expected for transit occupancy and business license taxes and planning fees.

Upward budget adjustments total about $1.8 million from all funds, with $490,595 coming from the city's general fund. Included is $350,000 for new financial and human resources systems.

One of the more interesting additions to the budget is $25,000 for a “space planning study” for city hall, since “accommodating additional employees in city hall is becoming a challenge,” the Catlett report noted. A temporary office trailer added behind city hall is now also full.

Funds “will be utilized to study options for a permanent expansion of city hall,” with council considering a capital improvement project proposal after alternatives have been examined.

And $2,500 was allocated to cover staff time for a LoveYorbaLinda community service day, modeled after the LoveFullerton event in May.