LAGUNA NIGUEL : Increase in City Revenue Reported

Despite the sluggish economic recovery and state budget woes, city revenue is up and expenses are down, the city manager reports.

While there was a dip in revenue sources driven by state and regional trends, the loss was more than made up by sources tied to the local economy, such as sales tax and building and safety fees, City Manager Tim Casey told the City Council on Tuesday.

“For the current fiscal year, in spite of all the state budget problems and the reduction of the property tax share to local government, we appear to be in good, stable financial condition,” Casey said.

Casey said overall revenue is 5.5% better than expected, while costs are 5.3% lower. Motor vehicle license fees are $126,000 below projections, indicating the state’s slump in new car sales, and state gasoline tax revenues fell $31,500 short of the city’s forecast, which Casey said may show that strapped Californians are taking fewer trips.

While Casey’s midyear review of the city’s $20-million budget was upbeat regarding recent performance, he cautioned council members to expect difficult times ahead.

Gov. Pete Wilson’s proposal to shift $2.6 billion in property taxes to the state’s school districts will cut into the funds received by both the city and the Laguna Niguel Community Services District, Casey said. Because there is no specific proposal about the mechanics of such a shift, Casey said there is “significant uncertainty” facing city governments.

Several budget transfers were approved unanimously by the council, including a $120,000 shift to the city attorney’s budget to cover mounting litigation costs, many of them involving proposed development of the Binion property. Council members also approved a $40,000 shift to the public works budget to fund a city tree inventory and anti-graffiti measures.