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Indicators for SJC Economy Look Good

Sales tax revenues, hotel taxes and new housing starts act as a finger on the pulse of the area's financial health.

While there’s no San Juan Capistrano economic forecast, watching the amount of money flowing into city coffers could serve as one. And the area’s leading indicators are mostly showing positive signs of growth, according to a report the City Council heard Tuesday.

Sales tax receipts are expected to be up 12.5 percent over last year, said Cindy Russell, the city’s chief financial officer. Compared to the same quarter last year, sales taxes are up nearly 22 percent.

“Each quarter, we’re seeing that improve a little bit,” she said.

So what are you all buying?

New cars make up 21.5 percent, but business-to-business transactions are the area of most growth, Russell said, especially in the area of heavy industry. Proceeds from service stations are up, with some credit come from the .

New housing starts have Russell excited. Building permits plummeted after 2006-07 but are slowly on the uptick.

“We’ve had 37 permits [pulled] compared to 16 at this point last year,” Russell said. “The new housing starts are a very good sign for San Juan Capistrano.” Her report cited as one of the reasons.

The city grossly underestimated the amount of hotel taxes the would generate, Russell reported. Staff conservatively predicted the hotel would generate $100,000 in revenues a year for the city. But the hotel’s fast start has it on track to bring in four times that amount – or more.

"I think we're really headed in the right direction," said Councilman John Taylor, who lives downtown and has noticed patronage of downtown businesses have really picked up.

"It's busy downtown like I've never seen it before. They're coming from all over the place," Taylor said.

Mayor Larry Kramer added that he learned from the that businesses plan seven ribbon-cuttings in the next month.

"It's a good indication of the economic vitaity of the town," Kramer said.

All in all, the city now expects to close the year out with $152,125 more than it had expected when it began its fiscal year, Russell said.

The city’s Water Department has been under close scrutiny ever since it unexpectedly . But Russell said the city is steadily closing the gap. By June 30, the fund’s balance will be $5.29 million under.

Meanwhile, the groundwater recovery plant will produce 3,800 acre feet of water it was anticipated, said . An acre foot is a little bit less than 326,000 gallons of water.

Russell added that the city used more local water from the groundwater recovery plant than it bought in imported water.

Alberto Barrera May 17, 2012 at 03:16 AM
Reading this reminds me of the economic boom scene in The Iron Lady.

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