Yorba Linda city budget expects revenue shortfalls amid coronavirus pandemic; Black Gold reopens

Yorba Linda's operating budget for the fiscal year ending June 30 faces several shortfalls in income due to the coronavirus pandemic, according to a report from Finance Director Scott Catlett presented to the City Council April 21.

“Impacts to sales and use tax from the governor's stay-at-home order have been swift and significant,” Catlett told the council. Sales taxes are the second-largest revenue stream for the city at 19% of total income, behind 52% from property taxes.

Loss of sales tax revenue from March through June is estimated at $556,000, a 7.3% decline from what was expected for the full budget year. Another $333,000 loss is expected this year due to the state allowing small business to carry over some sales tax payments into next year.

The city “can only count revenue anticipated to be received by August 31 … as available in the current fiscal year,” Catlett noted. The balance of the payments received after that date will be added to the next fiscal year's income.

The hotel occupancy tax also will see “a dramatic reduction,” Catlett stated, with a drop in occupancy reaching 90%. The loss estimate is $159,000, some 30% of revenue expected.

Catlett told council members that the city staff has taken a “conservative approach of assu-ming that this reduction will persist through May and only begin to slightly increase in June.”

The city is predicting a $340,000 decline in income due to canceled recreation classes, sports leagues and facility rentals. However, some $265,000 in expenses will be saved, resulting in a net loss of about $75,000, based on estimates.

And $182,500 less income from engineering and planning fees is expected for non-pandemic reasons.

On the positive side, Catlett stated that “no material impacts to property tax revenues are anticipated at this time,” but he cautioned, “a prolonged pandemic could result in reduced assessed values,” though the effects would not be felt until 2021-22 “because assessed values impacting next fiscal year's revenues were already established this past January.”

After closing March 18 except for take-out food and packaged groceries sales, the city- owned Black Gold Golf Club opened for limited use April 24, under several restrictions.

Before the reopening, Catlett stated that revenue dropped from $500,000 per month to as little as $20,000, and maintaining the course to avoid expensive work upon reopening and paying limited staffing would cost about $200,000 per month during closure.

Catlett had projected a $530,000 hit to the general fund for the fiscal year, “which is the portion of the operating losses that cannot be offset by the operating profits earned earlier in the fiscal year and the deferral of certain planned capital expenditures.”

Still, the city expects to keep 51.3% of the year's general fund expenses of $42.2 million in reserve, with all reserves, including cash set aside for special purposes, at 73.7%.

Yorba Linda loosens regulations for accessory dwelling units due to new state laws; City Manager Mark Pulone issues emergency proclamation

A new ordinance regulating accessory dwelling units – commonly called “granny flats” or “in-law quarters” or “second units” – is effective today, after 5-0 approval by the Yorba Linda City Council.

The ordinance loosens city restrictions on the units to comply with recently adopted state laws designed to increase the state's supply of housing units. The ordinance replaces the city's previous accessory unit rules, which were rendered “null and void” by the state action.

Generally, permits for accessory dwelling units (ADUs) on residential properties that meet certain criteria are now handled by the city's building department within 60 days from application and no longer need approval from the five-member Planning Commission.

Under the city's new criteria, the maximum size for ADUs is 850-square-feet for a studio or one-bedroom unit and 1,000 square-feet for a unit with more than one bedroom. Maximum size for junior ADUs is 500-square-feet. Minimum size is 150-square-feet for all ADU types.

Larger ADUs are subject to Planning Commission approval through design review and subject to the development standards for the main dwelling. They're also limited to lots at least 15,000-square-feet in size.

Allowable regulations include a height limit of 16 feet and side and rear yard setbacks of at least four feet. The conversion of existing space into an ADU requires independent exterior access from the existing residence and “sufficient side and rear setbacks for fire and safety.”

The new ordinance also loosens previous obligations regarding minimum parcel size, lot coverage and parking requirements.

Though a city can't impose owner-occupancy requirements until Jan. 1, 2025, Yorba Linda will waive fees for owners who voluntarily record an owner-occupancy covenant. If an owner does not reside on site, 24-hour contact information must be provided to the city.

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Declaration of a local emergency in Yorba Linda by City Manager Mark Pulone, acting as the city's Director of Emergency Services, was ratified by the council on a recent 5-0 vote.

The declaration empowers Pulone to “adopt rules, policies and regulations to protect the public, to protect life and property and to ensure the availability of essential city services.”

Also, Pulone may implement “different emergency measures...as deemed reasonable to address the quickly changing, very fluid emergency situation.”

Pulone's proclamation noted that “conditions of extreme peril to the safety of persons has arisen both internationally and within the United States” because of the novel coronavirus.

And “assistance and aid is requested from federal, state and county governance to the city, individuals and businesses affected....“

City code permits Pulone “to request the City Council to proclaim the existence of a local emergency if the council is in session or to issue such proclamation if the council is not in session.”

Yorba Linda prohibits loitering, skateboarding in Town Center parking structure and other city facilities; city's reserves can help sales tax loss

Concerns about loitering and skateboarding in Yorba Linda's four-story Town Center parking structure identified by Sheriff's Department personnel and city staff members are addressed by a new city ordinance scheduled to take effect April 2.

The new law – adopted on a unanimous City Council vote before coronavirus restrictions were implemented – prohibits loitering and skateboarding in the 446-space structure and at other city-owned facilities, such as City Hall and the Community Center, that are not covered by existing ordinances.

The law restricts persons from congregating and lingering in the parking structure or other city-owned facility or parking lot, “unless undertaking actions consistent with the use of the facility,” according to the ordinance.

The law also restricts persons from congregating and lingering on the premises of a drive-in or take-out restaurant, except when waiting for, receiving or consuming a product sold at the restaurant, with violations considered to be a misdemeanor.

In addition, refusing to leave the premises where food is prepared or served to the public when asked by a manager or employee or remaining in the parking structure or other city facility or parking lot when asked to leave by a city employee or police officer is a violation.

And riding a skateboard, bicycle or similar coaster devise on the parking structure, which opened in late 2018, or any other city-owned facility or parking lot also is a misdemeanor violation under the ordinance.

The prohibition includes “the sidewalks immediately adjacent to the parking structure or city-owned facility, so long as such property is posted so as to give reasonable notice of such prohibition.”

Previously, the council approved adding a sheriff's deputy for a shift covering late afternoon and early evening hours to support existing patrol deputies and to include regular patrols of the Town Center “to maintain a family-focused and safe environment,” among other duties, according to a city budget report.

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Loss of sales tax and other income due to business shutdowns and social distancing related to the coronavirus pandemic will challenge municipal budgets for North Orange County cities.

In Yorba Linda, nearly $7.7 million in sales tax revenue was expected to help fund some $39 million in operating expenses for the fiscal year ending June 30, second in the city's revenue stream behind about $20.7 million in property taxes.

Other tax and fee income also will take a hit, including the anticipated $1.9 million from parks and recreation fees included in the current budget.

The city's longtime policy of keeping 50% of a year's general fund expenditures in reserve will help alleviate revenue losses. Operating reserves were estimated at 54% of the fiscal year's general fund expenditures, and total reserves, including those restricted for special purposes, were estimated at 77% of the year's expenses.