Yorba Linda small businesses receive pandemic grants; city reduces employee pension liability

 

Each of some 250 small businesses in Yorba Linda that meet specific pandemic-related criteria will end up with close to $10,000 in grant money after a final round of checks are issued in the city's Small Business Relief Program, as approved by the City Council Jan. 19.

Most of the money comes from the federal Coronavirus Aid, Relief and Economic Security Act, popularly known as CARES, passed in March 2020, with amounts distributed to cities in Orange County by the Board of Supervisors.

Other funding comes from the Community Development Block Grant program administered by the federal Housing and Urban Development Department. The program was proposed in 1973 by native son Richard Nixon before his resignation as president.

The city received close to 300 applications when the relief program was initiated last year, with 251 qualifying for grants, according to a report to the council by Pam Stoker, the city's economic development manager.

Funding for a first round of grants ran out after 206 were awarded last year, but 24 more were awarded out of the remaining 45 qualified businesses during a second round. The third round awards this year took care of the remaining 21 businesses.

Criteria for grant awards included business location, employee count, licensing and the ability to demonstrate “undue hardship as a result of the Covid-19 pandemic,” Stoker's report stated.

“Undue hardship” was defined as a forced shutdown because of the state's stay-at-home order, revenue down 25% or more compared to non-Covid months or the layoff of at least one employee.

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During a five-year period that ends at the close of the current fiscal year on June 30, nearly $1.5 million in extra payments will have been made to California's Public Employees Retirement System to reduce Yorba Linda's unfunded pension liability.

That's in addition to the required payments of a bit more than $7.5 million for the same time period, for a total city contribution for employee pensions of $9 million. The city has 111 full-time employees, according to the most recent authorized positions listing.

The city started making the extra payments in 2016 in an effort to amortize the unfunded pension liability over a 20-year period instead of the standard 30 years. This year's extra payment is $186,511 plus $64,141 realized from savings for prepayment.

A city-hired actuary conducts an annual analysis to determine the city's required payment to cover employee pensions, which depends on the pension fund's gains and losses from investments and other changes to the fund's contribution rate.

“This ensures that the city is paying at least the minimum amount each year to mirror a 20-year amortization,” a city report stated.

Also since 2016, the city makes contributions to a pension fund trust to reduce the city's unfunded retiree medical liability. The contribution for the current fiscal year is $236,770.