ADS PAY DIVIDENDS FOR CITY CAMPAIGN DRIVES REVENUES.

Byline: Heather MacDonald Staff Writer

SANTA CLARITA - The city-funded ``shop local'' campaign that urges residents to buy cars along Valencia Auto Row added $1.2 million to Santa Clarita's general fund, according to a city report.

The surge in sales tax receipts, compared with revenues a year ago, is a result of the local TV and newspaper ad drive that urges people not to go over the hill to buy a new car, truck or sport utility vehicle, according to Interim City Manager Ken Pulskamp.

The city has spent $60,000 on the media campaign targeting the estimated 40 percent of Santa Clarita residents who purchase cars in the San Fernando Valley. The City Council is expected to begin funding the program annually in the 2002-2003 budget, officials said.

``This is a perfect example of business working in harmony with government,'' said Don Fleming, president of the Santa Clarita Automobile Dealers Association, which has spent $130,000 on the campaign to drum up business. ``We could not be more pleased.''

The report, prepared by the city's sales tax consultants, Hinderliter, de Llamas and Associates, shows that revenues outpaced the city's initial estimate of the receipts pegged at $950,000.

Car sales on Valencia Auto Row increased 33.5 percent, according to the report, despite concerns about the slowing economy and increasing unemployment.

``The slowdown never really affected Santa Clarita, thank goodness,'' said Rick Winsman, president of the Santa Clarita Valley Chamber of Commerce.

The city's budget depends on revenue generated by the state sales tax, and, in past years, the auto dealers have generated 23 percent of those receipts, records show.

Some residents had encouraged the City Council to support a generic ``shop local'' campaign they said would benefit all Santa Clarita businesses, not just one industry.

Some evidence suggests the increase in local car buyers is spilling over to the shops and restaurants at the nearby Valencia Town Center, Fleming said.

``This should put to rest any concern that this program was a form of corporate welfare,'' said Councilman Cameron Smyth. ``Sales tax revenue is the only way to pay for the city services we all enjoy.''

Smyth said this week that the city will be able to provide basic city services but not much more because of the budget's declining revenues, increasing costs and outstanding commitments.

Santa Clarita, which is approaching its growth limit, will be forced to rely more heavily on revenues from sales tax in future years to build needed roads, parks and to buy open space as development-related fees shrink, civic and city officials said.

``We need a strong economic base in this town, and this is one way to do it,'' Fleming said. ``The city got a good return on its investment.''