Santa Clarita’s Revenue Rises Above LAFCO Expectations

The city of Santa Clarita has about $7.5 million more in the bank after its first year of operation than predicted by the agency that oversees incorporations in Los Angeles County, city officials said Tuesday.

Mayor Howard P. (Buck) McKeon said the city has $11 million more than anticipated as of this month. Ruth Benell, executive director of the Local Agency Formation Commission, had estimated that the new city would have $3.5 million more in revenue than expenses at the end of its first year.

“This is a big step,” McKeon said.

The mayor said much of the $11 million will be used for programs outside the basic services provided for in LAFCO’s estimated city budget.

Included in the city’s revised 1988-89 budget presented to the City Council Tuesday night are funds for capital improvements, more city staff members, parks and road maintenance.

City Manager George Caravalho said in a budget message to the council that Santa Clarita “is a city on the move.”

Caravalho presented the council with an operating budget of $24.3 million for the fiscal year that ends June 30, 1989. Revenue, which include the $11 million, was estimated at $26.7 million.

5-Year Capital Budget

Caravalho presented a proposed 5-year capital improvements budget of $27.3 million. Included in that budget is $10 million for the possible purchase of the 502-acre Saugus Rehabilitation Center from the city of Los Angeles. Santa Clarita officials hope to use the abandoned rehabilitation center and site for a community center, park and permanent city hall.

“When Santa Clarita was originally incorporated, there were skeptics who felt it would not be financially solvent,” Caravalho said. “This budget makes it clear that not only is the city solvent, it is rapidly on its way to becoming a dynamic city with the ability to provide cost-efficient and the highest quality services . . . “

Caravalho said the operating budget presented Tuesday is significantly different from the $14.1-million preliminary budget adopted by the council in June. Revenue is significantly higher--$26.6 million as opposed to $19 million originally forecast, he said.

“Sales tax alone is 25% off,” he said of LAFCO’s budget projections before incorporation. Caravalho said the city expects to receive $6.5 million in sales tax--$1.3 million more than LAFCO estimated.

“This increase in sales tax revenues speaks well to the robust and growing Santa Clarita economy,” he said. “It may also be indicative of overly conservative revenue estimates originally performed by LAFCO.”

City Treasurer Andrea Daroca said that, based on LAFCO estimates, the city can expect to collect $2.7 million in property tax this year. But she said the actual figure could be 10% higher. “We really don’t have a handle on the property tax. We’re having trouble getting information from the county,” she said.

By June 30, with improved data available, “we will provide a more complete and comprehensive budget in May, 1989,” Caravalho said.

Through the general plan now being written, city officials will be presented with a “detailed project-by-project capital-improvements program” for the 1989-90 budget, Caravalho said.

McKeon said the city has repaid $1.5 million of the about $4 million it agreed to pay the county for providing basic services during Santa Clarita’s first 6 months.

“We still owe them a little over $2 million,” he said. “We were given 5 years to pay that. It looks like we’ll be paying that off a lot sooner.”