Yorba Linda City Council adjusts user fees to cover costs of providing services to residents, developers

 Rising costs have led the Yorba Linda City Council to update several hundred user and regulatory fees that are charged to residents and developers for city-provided services in planning, building and dozens of other categories.

The new fee schedule will be implemented starting July 20 and is expected to bring in $1 million in recovery revenue by the end of the fiscal year on June 30, 2027, according to a report to council members from the city’s treasurer and finance director, Donna Mullally.

Updated fees were recommended in a 149-page report from city-hired consultant Clear Source, a company that provides financial advice to cities. The report was completed in April, the council adopted the new fee schedule on a 5-0 vote at a May 19 meeting.

Included in the approval was a provision allowing an annual consumer price index adjustment not to exceed 3.5%, the first of which will be added on July 1, 2027. The city’s most recent revision in the fee schedule occurred in 2019.

“California cities regularly conduct user fee studies to ensure fees recover the cost of services that provide a specific benefit to an individual or group, rather than the community as a whole,” Mullally told the council.

Mullally noted: “Fees are based on the cost recovery principle that fees cannot exceed the reasonable cost of providing the service.” She also stated the new fee schedule “represents one of the few tools the city has to enhance long-term financial sustainability.”

According to the Clear Source report, “California law provides guidance regarding the amounts the city may charge for fee-related services and activities. Specifically, in order to avoid being considered taxes, the fees charged shall not exceed the estimated reasonable cost of providing the services, activities or materials for which fees are charged.”

The anticipated new revenue includes $550,000 from planning fees, $340,000 from building fees, $80,000 from a technology surcharge and $30,000 from engineering fees.

In addition to the new planning, engineering and building fees, the schedule implements a five percent technology fee to create a “recurring revenue source for the city’s permitting technology and customer service needs.” This surcharge is expected to bring in $80,000 per year.

Another new charge will be a credit card convenience fee of 2.75% or actual cost to offset the fees charged the city for processing credit sales by credit card companies. Mullally reported the city pays some $600,000 per year in credit processing fees, in addition to $400,000 paid yearly by the city-owned Black Gold Golf Club.

The city’s “master schedule of fees” runs 34 pages and includes entries for building, planning, community preservation, public works, library, city clerk, finance, parks and recreation, Black Gold Golf Club and miscellaneous.

A new schedule of parks and recreation fees is expected to be presented at a future meeting.

Lottery to determine potential buyers of below-market-rate homes on Yorba Linda's west side

 A lottery to determine eligibility to purchase eight below-market rate townhome units on the westside of Yorba Linda is part of a housing agreement between the city and the developer Olson Company approved on a unanimous vote by the City Council at a May 19 meeting.

The eight units are part of a three-story, 40-unit project to be built on a nearly two-acre parcel at the northwest corner of the Yorba Linda Boulevard and Liverpool Street intersection (4861 Liverpool St.). The project’s marketing name is Solana Walk.

The affordable units include four one-bedroom, 1.5-bath units and four two-bedroom, 2.5-bath units. The 32 market-rate units include 18 three-bedroom and 14 four-bedroom units.

Moderate-income households are eligible to purchase the eight designated units, which are under 45-year affordability covenants, according to the 109-page housing agreement.

Monthly housing expense for moderate-income families is defined as not less than 28% of gross household income and not to exceed 35% of 110% of the Orange County area medium income. Down payments on the affordable units will be 5%.

The 40 units will be built in four phases, with four of the affordable units completed in the third phase and the other four units in the fourth phase. Sale prices are to be determined later.

The four one-bedroom units will contain 972-square feet each and the two-bedroom units 1,208-square feet each. The eight units are to be identified as affordable in the project’s covenants, conditions and restrictions (CC&Rs).

Under the agreement, the developer is required to formulate an “interest list” from the general public without restrictions and divide the list into two sections, the general public and those who live or work in Yorba Linda.

The Yorba Linda applicants on the list will be offered an affordable unit in the order of their lottery ranking. Any remaining affordable units will be offered to applicants on the other list.

Because 20% of the units will sell for below market-rate prices, the project qualifies for “certain waivers or reductions of development standards,” according to the agreement.

These include waivers regarding setbacks, building separation, open space and landscaping. Other standards that apply to three-story buildings also will not apply to the development.

When any of the affordable units are resold, the new owner also must be income-qualified, “subject to verification by the city throughout the 45-year covenant,” Community Development Director Nate Farnsworth told the council.

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The Olson firm also has proposed to demolish an existing single family residence and build 30 units on 1.62 acres at 4742 Plumosa Drive, north of Lemon Drive and the In-N-Out Burger location.

City staff members have conducted an initial review of the project and determined the application incomplete. A resubmitted application is expected before a public hearing is scheduled.