CITY COUNCIL PUTS SURPRISE SURPLUS INTO TOP PROJECTS; BUDGET SCAN FINDS $2.5 MILLION.

Byline: Teresa Jimenez Daily News Staff Writer

A midyear budget review discovered an additional $2.5 million from an unexpected increase in tax money and development fees, allowing the city to spend money on high-priority items such as City Central Park and a new Boys & Girls Club facility.

For the first time in several years, the city had a marked increase in revenue because of a booming economy that has spurred growth, home sales and sales tax, said Steve Stark, director of administrative services for the city.

``In the past several years, we have not had the opportunity because of a decline in building and because revenues have been relatively flat,'' Stark said. ``We're fortunate to be able to respond as the economy looks better. It is definitely a welcome change.''

The city has projected an extra $1 million from sales tax for the 1998-99 fiscal year, and $1.2 million from planning and building fees. The remaining $300,000 in additional funds comes mostly from an increase in property tax, Stark said.

The increased property tax money probably has resulted from higher property values from home sales, Stark said.

The funds will allow the city to start on projects that otherwise would have waited until the next fiscal year.

For example, the council decided to give $375,000 to the Redevelopment Agency for its facade improvement program and the arts and theater grant program.

The facade program will provide matching funds to building owners who remodel to help create an Old West environment in downtown Newhall. The arts grant program will offer money to art and entertainment groups interested in creating a theater, gallery or art outlet in the area.

The council also decided to contribute $500,000 to the Santa Clarita Valley Boys & Girls Club for the construction of a new facility in Canyon Country. The club is working with the high school district.

An additional $200,000 will be spent on Wiley Canyon Road improvements, and $300,000 will be used for other capital improvement projects.

The council also approved $110,000 for a billboard program in which the city will buy the unwanted signs and lease them until the cost of the purchase is covered. They will then be torn down.

Other beneficiaries include the Canyon Country beautification effort ($20,000), the Elsmere Canyon preservation effort ($5,000) and a sphere of influence study ($33,000) designed to look at the possibility of extending the city's boundaries.

``The midyear is really a chance to examine the budget based on current information that was not available in March or April'' when city staff members began work on the fiscal year budget, Stark said. ``This was the six-month checkup.''

Just as council members did with the budget, they examined a list of possible projects to fund before making a final decision in disbursing the extra $2.5 million, Stark said.

Other projects on the list included new roads, an aquatics center, more money for City Central Park, more money for the Santa Clarita Sports Complex and a new library, Stark said.

Those projects have not been forgotten. They will be considered again with the 1999-2000 budget, which staff members will begin working on in January.