Yorba Linda residents applaud city's ban on short-term rentals; six-months grace period to Jan. 2020

Residents across Yorba Linda are breathing a sigh of relief after the City Council adopted an ordinance banning short-term rentals in all of the city's residential zones, based on a slew of comments on the issue posted on social media sites.

The ordinance takes effect July 4, 30 days after a second reading of the law was approved at a June 4 council meeting, although currently licensed facilities have a six-month grace period, extending to Jan. 4, 2020, to wind down operations.

Here are the details of the new law:

--The ordinance, which adds Chapter 5.50 to Title 5 of Yorba Linda's municipal code, outlaws offering or making available the rental of any residential dwelling, dwelling unit or room in a dwelling for less than 30 consecutive days for compensation “or any consideration.”

The law covers a rental agreement, lease, license “or any other means, whether oral or written” for 30 days or less. At a recent council meeting, City Attorney Todd Litfin stated that an agreement for more than 30 days is a protected property right that “cannot be prohibited.”

--Also outlawed is the placement or maintenance of any advertisement for a short-term residential rental by any person or entity and any person occupying a short-term rental for less than 30 days for compensation or consideration.

Among the reasons for the prohibition, as cited in the ordinance:

--”The conduct of short-term rental business operations within residential neighborhoods presents significant potential for creating unreasonable nuisance impacts on adjoining residential properties related to noise, traffic, safety, parking, etc.”

--Short-term rental operation “threatens an essential feature that defines neighborhood character,” specifically, “knowing one's neighbors and developing neighborly relations with them.”

--Since other cities have adopted bans or are interpreting their codes as prohibiting short-term rentals, Yorba Linda's residential neighborhoods could become “opportunity areas” for the rentals, which would lead to “further degradation of neighborhood character.”

--One of the city's General Plan “land use compatibility” goals allows the city to “review and monitor uses characterized by high levels of noise, nighttime patronage and safety concerns of local law enforcement to prevent impact on adjacent residences, schools, religious facilities and similar sensitive uses.”

Some 15 residents opposed to short-term rentals and four short-term rental operators opposed to a ban spoke at a May 7 council meeting. The council gave first reading to the prohibition at a May 21 meeting on a 5-0 vote, with the second reading approved on a 4-0 vote June 4 (Councilman Gene Hernandez was absent).

City officials estimate that the ban will result in the loss of less than $20,000 annually in the 10 percent transit occupancy tax that is paid on a quarterly basis by the city's currently licensed short-term rental operators.

New Town Center, library, arts center means more employees on Yorba Linda's municipal payroll

Several new full- and part-time employees will be joining Yorba Linda's municipal workforce during the next two fiscal years, mainly to fill positions associated with Town Center and the library and arts center complex now under construction.

Added during the fiscal year beginning July 1 will be 5.09 full-time equivalent positions, with another 6.8 full-time equivalents hired the next year. Authorized city positions will be 159.02 full-time equivalents by the end of June 2021, up from 147.13 as of May 21.

Town Center construction is nearing completion, and the 45,000-square-foot, two-story library and 13,500-square-foot arts center on Lakeview Avenue just north of Yorba Linda Boulevard are on schedule to open by summer 2020.

Among the full-time positions to be added is a deputy sheriff to work a swing shift, covering the later part of the afternoon and evening hours, “with a focus on supporting the existing patrol deputies,” noted a report to the City Council by Finance Director Scott Catlett.

“This will include regular patrols of the Town Center to maintain a family-focused and safe environment, support of traffic and DUI enforcement and assistance with routine calls for service during the higher volume times of the week,” Catlett stated.

Expenditure for the city will be $360,000 for fiscal 2020, which includes start-up costs for a vehicle and equipment. Ongoing costs in the city's contract with the county Sheriff's Department for the deputy position in fiscal 2021 will be $309,000.

Also added will be a park maintenance supervisor to replace a lower-level worker. The supervisor will focus on park upkeep, allowing the parks and facilities manager time to oversee the Town Center parking structure, library and cultural arts facilities and the Trueblood house.

Another full-time post will be a human resources manager “to ensure...all applicable laws and regulations are adhered to and monitored for updates, policies and procedures are regularly reviewed and updated, recruitments are posted and completed...and employee benefits are reviewed on a regular basis for cost-savings opportunities,” Catlett stated.

The manager will be the first-ever for the city, since human resources duties have been handled on a part-time basis by two assistants to the city manager. Catlett added that a “strong human resources function is critical to the city's long-term success.”

Additional positions to staff the library and cultural arts center are largely part-time. Planned for the library over a two-year period are 1,092 library assistant hours and 2,200 library page hours, with the two facilities sharing a custodian.

A recreation supervisor will manage the arts center, eventually aided by a recreation specialist. Also, 3,515 senior recreation leader and 3,220 recreation leader hours are planned for the center.

Other new part-time positions include office assistants, landscape inspectors and interns.

Sales tax, property tax collections show Yorba Linda as 'thriving local business community' with 'positive growth,' according to city officials

Yorba Linda has “a thriving local business community,” based on accelerating sales tax revenue, and “positive growth” in land valuations, based on increasing property tax income.

That's the assessment of City Manager Mark Pulone and Finance Director Scott Catlett, as expressed in a letter accompanying the 163-page Comprehensive Annual Financial Report

for the 2018 fiscal year compiled by a city-hired auditing firm and presented to the City Council recently.

“While the city expects revenues to increase during the (2019) fiscal year, we continue to be cautious with the city's financial resources and are committed to maintaining a balanced operating budget and one of the strongest … budget reserves in Orange County,” they said.

Taxes comprise about 80 percent of the city's general fund revenues, mainly from property and sales taxes, with both showing increases in the Jan. 1 through March 31 quarter.

Property taxes brought in $265,000 and sales taxes $58,000 more than expected for the three-month period, compared to projections made in a budget review covering the July 1 through Dec. 31, 2018, period, according to a separate report from Catlett.

Most of the increase in property tax revenue is due to savings that occurred when the city issued refunding bonds to lower the debt service costs of bonds originally sold by the city's now-defunct Redevelopment Agency.

Other revenue increases from Jan. 1 through March 31 over the previously projected amount include $100,000 from building permits; $62,000 from parks and recreation fees, mostly from Community Center rentals; and $89,000 from revenue-sharing payments from the city's contract with the county landfill and unclaimed checks and deposits held by the city.

Lower-than-expected income includes $130,000 less from property transfer taxes; $57,000 less in engineering fees; $26,861 less in franchise fees; and $20,000 less in transit occupancy taxes.

The city is projecting $22.2 million million in operating reserves on June 30, which would bring the reserve balance to 64 percent of the year's general fund expenditures.

A key concern is the amount of unfunded liabilities, which grew from $31.7 million to $51 million from 2017 to 2018, due to changes in accounting standards and other factors.

The pension liability is $21.8 million and the liability for retiree medical insurance is $27.1 million. The city's long-term goal is to reduce the amortization period to 20 years from 30 years by making extra payments to the pension system from budget surpluses.

The retiree medical liability will decrease over time, since employees hired after April 2017, now 26 percent of the full-time work force, will receive significantly reduced benefits.

Other liabilities: $1 million each for accrued employee vacation and sick leave and claims and judgments, mostly workers compensation payments to cover the period when Brea provided the city's police services.