Yorba Linda City Council reviews new two-year budget, sees property, sales tax revenue increase

 

Yorba Linda's City Council members have been reviewing budget and other financial reports as the governing panel prepares for the new fiscal year that begins July 1, with the city's five elected representatives seeing clear indications of an improving local economy.

The city's proposed two-year operating budget was presented to the council at a May 25 workshop session, and adoption of the $41 million spending plan for each of the next two fiscal years is expected at a June 15 meeting.

Increases in the city's two main sources of income are projected for the next two fiscal years. Property tax revenue is expected to increase to nearly $22.5 million for 2022 and up to $23.2 million for 2023, from the $21.5 million estimated by June 30 this year.

Those figures represent a growth rate of 4.6% for 2022 and 3.1% for 2023, “reflecting a continued increase in housing prices and adjusted assessed valuations as properties are sold,” and “the recent residential and retail construction activity in the city,” according to a report by Finance Director Dianna Honeywell.

And, in a sign of better local economic conditions, the city's sales tax revenue is expected to climb 4.7% to about $7.7 million in 2022 and 3.8% to about $8 million in 2023 from the $7.35 million estimated by June 30 this year.

Also expected to increase is income from the franchise taxes that residents pay on their gas, water, electric, cable and trash disposal bills that could total close to $2.3 million for the 2023 fiscal year, up from this year's $2 million.

Overall, total revenues are projected to increase 2% for fiscal year 2022 and 2.9% for fiscal year 2023. A $1 million-plus budget surplus is anticipated for fiscal year 2023, which would put operating reserves at 55.7% of a year's operating expenditures at the end of fiscal 2023.

Embedded in the proposed budget is a 4.46% increase in the cost of the city's contract with the Orange County Sheriff's Department for fiscal 2022, for a total of $12.9 million, up about $552,000 from this year. Existing service and staffing levels will be maintained.

This will be the city's ninth year for contracting law enforcement services with the county department. The first contract was negotiated in 2012 and implemented in 2013, after a 42-year association with Brea Police. The current county pact runs through June 30, 2023.

The city-owned Black Gold Golf Club is projecting a positive cash flow of $69,300 in fiscal 2022 and $70,700 in fiscal 2023. The recent fee increase for golf rounds and driving range use is expected to bring in an added $200,000 annually.

Green fees vary due to “dynamic pricing,” depending on weather, day-of-week, time-of-day and other factors. The average $57.91 cost to play will increase to $61.33.

Interestingly, this fiscal year's city income increased by $1.2 million, largely because of federal funds from the Coronavirus Aid, Relief and Economic Security Act.