Yorba Linda's city government weathers pandemic 'exceptionally well,' official says in report on taxes

 

So far, Yorba Linda “has weathered the COVID-19 pandemic exceptionally well in comparison to many neighboring jurisdictions,” due to better-than-expected sales tax collections, regular property tax revenue and continued strong building construction activity.

That's the judgment of Finance Director Scott Catlett, as outlined in his most recent report to City Council members detailing the city's current financial condition and offering projections for the remainder of the fiscal year ending June 30, 2021.

The “brightest news” of the past fiscal year, noted Catlett, was a pickup in sales tax income during the final months. While the year ended $442,000 below an estimate when the budget was adopted in June 2019, the city's portion of the tax was $448,000 above an April 2020 revised projection.

According to Catlett, declines in sales tax revenue were smaller than what was experienced state and countywide because of the city's retailer mix, identified as Costco, office furniture and grocery stores, among others.

Also, growth in the city's allocation from the county's sales tax pool, which includes revenue from online sales that have taken the place of brick-and-mortar sales during the pandemic, was larger than anticipated.

“With major theme parks and shopping centers closed...the city's share of the pool is now measurably higher than it was prior to the stay-at-home order. Unfortunately for some neighboring cities, this growth in Yorba Linda's pool allocations was balanced against reductions in the pool allocations to these cities,” Catlett stated.

At the June 30 close of the past fiscal year, sales tax revenue, the city's second-highest income stream, totaled $7.2 million. Property taxes brought in $20.5 million and fees and permits related to building, engineering and planning totaled $2 million, up $100,000 from April's revised projection.

And while park and recreation revenues were $780,000 below the 2019 adopted budget and $440,000 below the April revision, most of the decline was offset by savings in part-time staffing and contract costs, according to Catlett.

The city is projected to end the current fiscal year with a $1.3 million general fund surplus, which, when added to present-day reserves, would total 58% of a year's operating budget, above a city policy of retaining a 50% reserve balance.

The city-owned Black Gold Golf Club also is expected to do better this fiscal year, probably without another city subsidy.

Officials were expecting to support operations with a $530,000 subsidy from the city's general fund due to the course closure earlier this year, but only $410,000 was needed because the club reopened earlier than expected.

So, the city is using the $120,000 remaining subsidy for deferred capital improvement projects, including new furniture for the restaurant and new carpeting to “improve the marketability of the facility and enhance the experience for customers.”