Yorba Linda City Council: allocates cash reserves, reviews state-mandated housing report

 Decisions by the Yorba Linda City Council on allocating excess cash reserves and a state-mandated progress report on meeting California housing requirements merit attention this week.

Council approved the disposition of about $7.2 million in excess reserves held in the general fund reserve account at a March 17 meeting. Most of the cash – $5.6 million – will be moved to a special reserve fund for future capital improvement projects.

Significant amounts of $583,100 each will be used to help offset the city’s unfunded pension and post-employment benefits liabilities. Since mid-2017, the city has allotted about $3.1 million to offset the pension liability and about $3.7 million for post-employment benefits.

Council’s action included retaining the remainder in the general fund operating reserve.

The separate library fund, with revenues exceeding expenditures by $933,800, transferred $700,000 for future maintenance and capital improvements and contributed $116,900 each for meeting unfunded pension and post-employment benefits liabilities.

A council policy states that when general fund operating reserves exceed 60% of general fund appropriations, city staff will recommend to the council a plan to use the excess funds, which totaled $7.2 million. Some $23.8 million will remain in the reserve fund.

When the current fiscal ends June 30, a $51,000 operating budget surplus is expected, down from $114,253 anticipated when council approved appropriations of $50.9 million.

The state requires cities to submit an annual report summarizing progress on implementing the city’s general plan and reports on housing production, stated a report from Planning Manager Chris Dominguez.

 “The city remains in compliance with state housing laws and maintains a state-certified housing element, but like most cities, may be subject to...provisions related to housing production progress,” Dominguez reported.

The city’s current Regional Housing Needs Allocation is to provide opportunities for 2,415 units, including 765 for very-low household incomes, 451 for low household incomes, 457 for moderate household incomes and 742 for above-moderate household incomes.

The report states that for 2021 through 2025, 239 units have been permitted, including 91 for very-low income households, 24 for low income households, 16 for moderate income households and 109 for above-moderate income households.

Yorba Linda has been subject to a state provision requiring “by right approval” of projects proposing 50% affordability units since 2018, without ever having a developer submit a project under that provision, according to Dominguez.

This provision is separate from the “builder’s remedy” under the state Housing Accountability Act allowing “by-right approval” of projects that do not comply with the general plan or zoning code in cities without a state-certified housing element, a requirement that Yorba Linda meets, Dominguez noted.