Franchise fees, hotel taxes, paperless billing: all play a role in Yorba Linda governmental revenues

Franchise fees, transit occupancy taxes and paperless billing normally fly under the radar, but each plays a role in raising money to pay for services provided by local government agencies.

Cities in most states charge utilities franchise fees for placing infrastructure in public rights-of-way, including electric power lines, natural gas and water pipelines and cable TV transmission lines. Refuse pick-up companies often pay the fees for using public roads for trash pickup.

In Yorba Linda, the city expects to collect a bit more than $2 million in such fees for the fiscal year that began July 1 and ends June 30, 2020, increasing by close to $50,000 the next year.

Of course, the utilities just collect the fees from their customers and pass them on to the city, while noting the franchise fee amount on the monthly bills provided to customers by email or through the postal service.

While the Yorba Linda fees pale in terms of the funds raised through property and sales taxes – at $20.7 million and $7.7 million this fiscal year – the revenue nearly matches the dollars raised by building and engineering permits and fees, the city's third-largest income source.

Here's what the city anticipates collecting this fiscal year: $796,775 from Spectrum cable TV, $619,268 from Southern California Edison, $448,000 from Republic Services waste disposal and $121,310 from Southern California Gas Company.

The Yorba Linda Water District doesn't pay a franchise fee, since it is a separate government agency, but the private Golden State Water Company, serving about 2,000 customers in 400 acres of the city's Locke Ranch region near Fairmont Boulevard, will pay $13,688.

Transit occupancy taxes, also referred to as hotel occupancy taxes, come from the two hotels located on Oakcrest Circle in Savi Ranch. These companies pass on the 10 percent tax to the city on a quarterly basis for stays of less than 30 days.

The 111-room Ayres Suites is expected to pay $332,000 this fiscal year, while the 117-room Extended Stay will pay about $179,000. The city had anticipated collecting close to $19,000 from short-term rentals of homes or rooms in residential areas.

But the City Council has banned the rentals, which end in January for current operators.

Both government agencies and private companies promote paperless billing to eliminate paper waste, but the practice also saves the agencies and companies a bundle of money.

A recent report presented to the five elected directors of the Yorba Linda Water District, which bills nearly 25,000 customers on a monthly basis, indicates the savings involved.

The annual cost to bill 17,175 customers by mail is $115,633, while the yearly cost to send an electronic bill to 7,535 customers is $2,984. If the mail customers converted to paperless bills,

savings would total an annual $109,000.

Paper bills cost 56 cents in postage, paper and other costs; electronic bills cost 3.3 cents.