A routine Temecula financial report that rarely drew attention in the past gave new insights Tuesday night, Feb. 12, into the economy, a recent staff upheaval and the problems plaguing a troubled YMCA facility that anchors a city park.

The mid-year budget adjustment did not trigger any discussion by the City Council before it was approved along with other noncontroversial agenda items. But it revealed key details on how the city is emerging from a recession, transitioning from one administration to another and grappling with the future of a YMCA center that has drifted into bankruptcy.

The city report spotlighted a revenue surge of more than $860,000 during the first half of the current fiscal year. Much of that increase – about $537,000 – came from a higher than expected bump in taxes reaped from new car sales as well as mushrooming retail and restaurant receipts in the fiscal year that ends July 1.

The remainder of the revenue increase came from higher than anticipated receipts in planning, land development and building and safety fees.

"That’s encouraging for us as a sign that the economy is moving in the right direction," said Aaron Adams, who recently capped his first two months as Temecula’s interim city manager.

The sales tax increases will likely continue to climb, he said, because work is expected to begin soon on two new auto dealerships that have received permission to open in the city.

Some rising costs will limit the city’s total financial windfall to about $350,700 for the fiscal reporting period, according to the analysis.

The budget report also gave new clues as to how Adams’ administration will differ from that of his predecessor and former boss, Bob Johnson.

Adams took the helm as the dust settled from Temecula’s first management upheaval, a shakeup that played out during a string of public meetings that began Nov. 14. The separate dismissals of Johnson, and the city’s finance director, Genie Wilson, were unprecedented for Temecula, city officials and observers agreed at the time. No reasons have been given for the abrupt dismissals.

Adams’ status was formalized on Dec. 11, which was when the City Council approved his employment contract as interim city manager. No Advertisement

[ Metalography ] steps have been taken to seek outside applicants for the permanent manager’s post.

The budget report stated that Adams will return the city to a management structure that was put in place during Johnson’s tenure. The traditional structure favored by Adams will give Temecula an assistant city manager instead of a director of community relations. It will also abandon several department head titles that Johnson had created.

A new economic development position will be created and that municipal function will again come under the city manager’s direction, according to the report.

"I’m kind of putting it back the way it was," Adams said in an interview following the council meeting. "It’s going back to a similar model we’ve been accustomed to that proved efficient."

The report also identified three personnel-related costs that together total more than $160,000. A $65,416 cost was listed as a "contract obligation" owed to Johnson. The related expenditures were a similar obligation owed to Wilson as well as a contract for a consultant to look into a possible preference that could be given to local product vendors or service providers.

Johnson had worked as a Temecula assistant manager for nearly five years before he was picked over Adams and others for the city’s top post in December 2011. Johnson served as city manager for less than a year before he was dismissed by the council.

The budget report also identified $439,178 in unspent public facility funds and $569,030 in accrued payroll savings. Those funds were previously earmarked for the city’s possible purchase of a troubled YMCA facility that opened about three years ago in the 2.2-acre Margarita Community Park.

The city tentatively agreed to purchase the building for $1.6 million about a year ago, but a dispute surfaced over its condition and the deal stalled. The standoff became more complicated when the YMCA’s regional office filed for bankruptcy protection late last year.

The City Council met in closed session Tuesday night to discuss whether Temecula should interject itself into the bankruptcy litigation. But no decision was reached by the council and the details of that discussion will be kept confidential, City Attorney Peter Thorson said afterward.