City Council to discuss budget adjustments, business park plan

Santa Clarita City Hall, as pictured on February, 26, 2020, is located on the 23900 block of Valencia Blvd. Dan Watson/The Signal

The City Council is expected to discuss mid-year budget adjustments and the environmental study for a business park project in Saugus, among other items, during the final council meeting of 2022. 

The budget adjustments are projected to leave the city with about $5 million more than anticipated, according to an agenda report prepared by the city’s Administrative Services Department. 

The plan for the business park, if approved, would be the first step adding to the city’s footprint for warehouse space, another area of the real estate market where demand is growing and availability is in short supply.  

Budget projections 

The city is now looking at having approximately $14.1 million more in its coffers to help offset expenditures expected to increase by about $9 million for the fiscal year ending in June 2023, according to a report set to be discussed at Tuesday’s City Council meeting. 

The adjusted revenue sources are expected to be: a little over $2 million in the general fund; just under $8.5 million in “various grant funds”; a little over $1 million in transportation funds; about $926,000 in special district funds; just over $918,000 in “other revenue funds”; and a little over $1 million between the city’s “internal service” and its “recreational facility” fund. 

The revenue projections also show a decrease of more than $330,000 in anticipated money from the state’s gas tax fund. 

The biggest revenue increase, $8,465,797 in various grant funds, includes revenue allocations that were deferred in the amount of $10.7 million in American Rescue Plan Act, a federal COVID-19 funding package approved by Congress in March 2021, and a $1.9 million reduction in grant revenues that were budgeted in the fiscal year. There were also adjustments to city funds related to the Vista Canyon Metrolink Station project.  

The expenditure adjustments include about $3 million more expected to come out of the city’s general fund, for everything from bond debt service costs ($689,105) to increased credit card-processing fees ($90,000) and higher utility rates ($95,000). 

“The recommended expenditure increase in the Pension Liability Fund for $2,000,000 represents an additional contribution toward the city’s unfunded accrued pension liability,” according to the City Council’s agenda packet. 

More information on the budget adjustments can be viewed at the city’s website.  

Business Park 

The Covington Group, a Dallas-based developer of business parks, is looking to construct a little over 400,000 square feet of warehouse for the Santa Clarita Commerce Center project. 

On Tuesday, council members are expected to consider the first step of the project, approval for a $230,000 environmental impact review of the project on the 24-acre site that’s east of Railroad Avenue and the railroad right-of-way, north of Oakridge Drive, west of the Circle J Ranch residential development and south of the southern end of Springbrook Avenue, in Saugus. 

The fee for the review would be paid for by the project’s developer. 

The property was envisioned as a business park when it was entitled in 2009, according to Jason Crawford, director of community development for the city of Santa Clarita. 

The project would include four new industrial buildings varying in height from 50 to 55 feet, totaling more than 432,000 square feet, which would include 26,000 square feet of office space and about 406,000 square feet of warehouse space. 

“Generally, we’re seeing strong demand for business park (space),” Crawford said, “and that’s great for us because that means more jobs here in town and more opportunities for our residents.” 

A report by industry analyst Yardi Matrix indicates the rent for industrial space has increased by 7% for the Los Angeles market in the past 12 months, fourth-highest nationally for metro markets, while the vacancy rate sits at about 1.9%. 

A spokesman for Covington did not immediately respond to a request for comment Monday. 

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