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HomeMy WebLinkAbout04/14/1987City Council Minutes Tuesday, April 14, 1987 - 7:00 p.m. Page 2 Gary Label. Rent Review Board Member, read a prepared statement into the record. He was supportive of the arbitration alternative. Naoma Wright, Rent Review Board Member, stated she preferred the ordinance to stay the way it is. Dennis Wheeler, Rent Review Board Member, read a prepared statement into the record. He felt that price controls don't work and the politics should be taken out. He supported mediation and arbitration. Steve Henderson, Assistant to the City Administrative Officer, reviewed the agenda report at length section by section and allowed Council comments and questions to staff and Board after each section. Staff recommended Council accept the Rent Review Board's recommendations to consider an arbitration -type ordinance and implement it within the framework of the existing ordinance. If the Council did not substitute binding arbitration, the Board recommended modifications to the existing rent stabilization ordinance including: 1) a sliding scale consumer price index; 2) safe harbor concept; 3) vacancy decontrol /change of occupancy: 4) recreation vehicles; 5) water /utility allowance; 6) tenant rent stabilization based on economic need; 7) using maintenance of net operating income (MNOI) as the formula to determine a fair and reasonable rate of return; 8) leases; 9) mediation; and 10) other items of interest (see agenda report dated 4- 14 -87). 8:35 p.m. Vice -Mayor Griffin declared a recess. 8:50 p.m. City Council reconvened, Mayor Dunin absent. Vice -Mayor Griffin stated for the record that in addition to reviewing the extensive minutes and proceedings of the Rent Review Board, rent regula- tions and lease terms of other communities, the Council had also received 1 numerous letters from associations and individuals and acknowledged receipt as follows: (letters on file in the City Clerk's Office #428): Leola Rubottom (2), Ward R. Spencer, Richard Clark, Charles B. Bowlen, Richard D. Miller, John Grden, Naoma Wright, Ruth & Jack Michael, Agnes R. Blackwell. Ed & Clarissa Rector, Sara Botill, B.L. Snodgrass, Paul Beauvais, Joseph G. & Catherine R. Moody, Margaret Powers, Bettie Lou Hines, Bernice D. Cardoza, Art Jack (2), George J. Moylan, Francis H. Packard, David D. Brymer, and Edward D. and Maria E. Hughes. Vice -Mayor Griffin asked for public comment from the audience on items not listed on the agenda. None was forthcoming. Vice -Mayor Griffin opened the public portion for comments. Lee Willard, Chumash Village, read a prepared statement into the record. He spoke against arbitration due to the high cost and attorney fees. He felt space rents were too high in this community. Patrick Perry, Attorney representing the homeowners of Creekside Mobilehome Park, made some general comments and reviewed several issues he felt would not be appropriate in the ordinance. He felt the rent review procedures needed to be revised rather.than deleted just because its too costly to administer. A "reasonable rate of return" should be clearly defined and arbitration should not be implemented. He suggested the city hire a professional hearing officer; a lower percentage of decontrol (15% 1 is too high) and that the issue of rent control be placed on the ballot. Francis Packard, President of the Golden State Mobilehome Owner's League, Inc., spoke in support of the ordinance. Dennis Law, Attorney representing five mobilehome parks, urged that the ordinance encourage park owners and tenants to work out their differences. The proposed recommendations would not solve all the problems but the parkowners were willing to live with them. The Board's recommendations should stand as they are with a few compromises. Dick Hart, President of Hacienda Del Pismo Mobilehome Park Association in Pismo Beach, urged the Council to be responsible to the seniors in any amendments to the ordinance. City Council Minutes Tuesday. April 14. 1987 - 7:00 P.M. Page 3 Ward Spencer, mobilehome owner, urged the Council to keep the ordinance to Protect the tenants. Charleen Hall, mobilehome owner living outside of the city, felt the leases were illegal, rents too high, and water bills excessive. Mike Nolan, attorney, stated rent control is necessary. He offered some recommendations on MNOI and stated the ordinance should be more objective Dennis Law, attorney, restated his concerns regarding getting people together. Patrick Perry, attorney, stated that some tenants have been offered a lease and are usually willing to negotiate anything except money. Art Jack, resident of Laguna Lake Mobilehome Park, referred to his letter of April 14, 1987, recommending against arbitration and supporting a city -paid hearing officer. He also supported mediation and long -term leases. Ed Evans, owner of Creekside Mobilehome Park, felt the ordinance was unfair and he's prepared to sit down with tenants, sign leases, and get the City out of the rent regulation business. Francis Packard made some additional comments for keeping the ordinance. C.J. Sanderson, mobilehome park owner since 1969, felt there needed to be some framework to introduce long -term leases. John Grden, resident of San Luis Obispo and a Rent Review Board member, read a prepared statement into the record (see letter dated March 30, 1987) supporting arbitration. Pat Barlow, Mobilehome Rent Review Board Chairperson, encouraged the Council to use someone from outside the City as a hearing officer to provide independent and unbiased decisions. Vice -Mayor Griffin closed the public portion. Councilman Settle did not feel that binding arbitration would solve the problem and suggested the ordinance be more specific. He urged the tenants and park owners work out their differences with the City to 07et out of direct control. He offered the following motion: 1) Direct the City Administrative Officer to prepare a communication to an association of arbitrators (i.e. the American Arbitration Association or other competent agency in this field) to recruit a paid hearing officer to handle the administration of the existing ordinance and participate in the recommendations to the City Council. The correspondence that is issued will be reviewed by the City Council prior to be being sent. The Council shall specify its intent of ordinance amendments prior to or at the time of the hearing officer's appointment. 2) Retain the Mobilehome Rent Stabilization Ordinance as it currently exists using alternative *2 until the Council reviews and makes changes by May 5 or June 2, 1987. 3) The hearing officer be selected by a list of qualified members from agencies such as the American Arbitration Association or comparable agency approved by Council with a recommendation to the CAO and Council Subcommittee. 4) A contract with the hearing officer should be similar to that currently used by the City and its labor relations consultant in the process of contract contents, again subject to Council approval. 5) Park residents and owners to be to meet and confer.prior to meeting with the hearing officer over issues of the rent question. 6) The park owners and tenants to pay fees for the hearing officer and related support needs. The fee to be no more than $9 per year to be collected by the park owners and submitted to the City under separate account. This account can be reviewed by the CAD with the assistance of the Council after six months .for purposes of adequacy and need. 7) The hearing officer decisions to be appealable to the City Council. 8) The performance of the hearing officer reviewable by the City Council. 9) The hearing officer to have access to all relevant documents needed to make findings and conduct informal hearing procedures. 10) The existing Rent Stabilization Board having 1 1 1 City Council Minutes Tuesday, April 14, 1987' -'7:00 p.m. P1 ,ye 4 accomplished their objectives and made their recommendations, to be retired. The CAO to proceed with the hearing officer process and the Council to meet again by the dates proposed. Motion died for lack of a second. Councilwoman Dove y could support the concept of a hearing officer: however, she felt that this person's decision would be appealed the same as the hearing board, and the Council would be right back where it is now if it's appealable to the Council. She said that the Council might just as well serve as the hearing board to save the hassle. She would consider looking at the hearing officer concept with refinements. The issue was that the tenants and owners that needed to talk and resolve their own problems. Councilwoman Rap pa stated that the ordinance, as it is written, does not give clear direction to who ever is reviewing it. She would like to see the Council sit down and clarify the ordinance with all the recommendations that have been given to the Council. She agreed that the Council needed to set an early date to review the ordinance. Councilwoman Dove y stated that of the recommendations that were made by the Board, she would like to seriously consider: 1) safe harbor, 2) vacancy decontrol /change of occupancy; 3) methodology for determining a reasonable rate of return. On #4 of the staff report, water metering and any utility allowance, she would like to see this broken out of the base space rent and allow a pass through of any increases. On #5 she would like to consider the consumer price index recommendation; #6 definition of a recreational vehicle; and #8) rent control based on economic need, would like to encourage the concept of the parkowner's fund. She would like to see some refinements by staff on these issues and some suggested language as an ordinance amendment in each of those areas. She also agreed with the Board on #9 concerning leases. Councilwoman Rappa recommended that the ordinance be amended to reflect that the Council serve, on an interim basis, as the review board, rather than the Rent Review Board. Councilman Settle moved to direct the City Administrative Officer to prepare a communication for the purposes of investigating a hearing officer from an agency such as the American Arbitration Association and secondly, retain the Mobilehome Rent Stabilization Ordinance as it currently exists using alternative #2, until the Council makes its recommendations on changes to the ordinance as to the points in the staff report on either May 5 or June 2. Motion died for lack of a second. Vice -Mayor Griffin suggested that the Council: 1) help create an environment through which the parkowners and tenants can bargain on an equal footing through agreements which result in stabilized rent increases; 2) develop a more complete framework of regulations which would reinforce in a constructive and a balanced way the relationship between the landlords and tenants and which would be straight- forward, fair and more certain; and 3) remove the ongoing and extensive direct involvement of the staff and advisory body and perhaps even the City Council in resolving hardship cases of the landlords and tenants, and identify critical and exclusive factors to be applied in determining those hardship cases. He recommended that the Rent Review Board be disbanded, substitute the Council on an interim basis and, concurrently, move ahead to meet and refine some of the recommendations to the ordinance. Moved by Vice -Mayor Griffin, seconded by Councilwoman Rapp a, to direct staff to prepare amendment to the existing ordinance substituting the Rent Review Board with *the City Council (4 -0 -1, Mayor Dunin absent). Moved by Vice -Mayor Griffin, seconded by Councilwoman Dom, to direct the City Administrative Officer.to expand the analysis and present options for refining the existing ordinance that would take into consideration recommendations of the Rent Review Board in these areas (concepts only): safe harbor, vacancy decontrol, methodology for rate of return, separate City Council Minutes Tuesday, April 14, 1987 - 7:00 p.m. Page 5 metering of utility allowances, consumer price index. resolving the definition of recreational vehicle, further exploration with cooperation of the park owners and the Housing Authority on an economic need based alternative and a hearing officer or mediation concept. Councilwoman Rappa stated that she could not support any further exploration of 1) safe harbor; and 2) vacancy decontrol /change of occupancy. She could support a hearing officer or some other procedure Councilman Settle agreed with Councilwoman Rappa. After brief discussion, motion failed 2 -2 -1, Councilmembers Rappa and Settle voting no; Mayor Dunin absent. After discussion, moved by Councilwoman Rappa, seconded by Vice -Mayor Griffin, to direct staff to provide information for ordinance amendments dealing with the following areas: 1) determining reasonable rate of return; 2) utility allowance; 3) consumer price index; 4) definition of a recreational vehicle; 5) economic need; 6) mediation; and 7) hearing officer concept to be brought back in early June. Motion failed on a 2 -2 -1 vote, Councilmembers Dovey and Settle voting no; Mayor Dunin absent. Councilwoman Dovey supported at least an evaluation and discussion of safe harbor and vacancy decontrol. After discussion, Moved by Councilwoman Rappa, seconded by Councilman Settle, to direct staff under the authority of the City Administrative Officer to bring forth suggested wording changes re: 1) methodology for determining a reasonable rate of return; 2) water metering /utility allowance; 3) consumer price index; 4) definition of a recreational vehicle; 5) rent control based on economic need; 6) mediation; and 7) comprehensive review of the hearing officer procedure. To be brought back the first week of June, 1987. Motion passed on a 3 -1 -1 vote, Councilwoman Dovey voting no; Mayor Dunin absent. There being no further business to come before the City Council, Vice -Mayor Griffin adjourned the meeting at 11:35 p.m. By I Z&V on Jones, Recording Secretary Pa Voges,, Cit�Clerk APPROVED BY COUNCIL: 6 -16 -87 1 1 1