YORBA LINDA : City Will Dip Into Reserve Funds

Facing an $800,000 budget deficit partly caused by a decline in revenues from new home construction, city officials said last week that they plan to use reserve funds in an effort to close the budget gap.

Yorba Linda’s 1990-91 budget had anticipated $10.2 million in revenue from building permits, property and sales taxes, and motor vehicle, business and planning fees, Finance Director Gordon Vessey said. But the city now is expecting to garner $9.4 million from such fees this year, he said.

“We’re not going to have to lay off anyone,” he said. “We’re going to have to tighten our belts a bit.”

Vessey said the city has been fortunate because it has a strong reserve account. Yorba Linda’s $6 million in reserves have been built up in years in which the city collected higher-than-expected revenues.

Vessey added that department heads have been aware of the budget shortfall when planning their budgets for next year. Their proposals were submitted to his office last week, he said.

City officials blame a dramatic slowdown in new home construction as a major reason for the shortfall. From July through February, the city approved 59 single-family building permits, contrasted with 462 permits in the same period the year before, Vessey said.

“We had anticipated some slowdown in building, (but) not that dramatic of a drop,” he said.

Yorba Linda received $1.7 million in building-permit fees last year, but it is expected to receive only $850,000 this year, he said. The city has a $23.8-million budget this year.

Still, Vessey said that other revenue sources, including sales-tax revenues, have remained constant or have increased.