HomeMy WebLinkAbout10-18-1986 MHRRB Minutescity of sAn tuis93403-8100
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990 Palm Street/Post Office Box 8100 9 San Luis Obispo,
MOBILEHOME RENT REVIEW BOARD
OCTOBER 16, 1986
TAPE *1
I. WELCOME/INTRODUCTIONS
---------------------
Acting Chairperson John Grden declared that the regular meeting
of the Mobilehome Rent Review Board come to order at 1:45 p.m.
with the following in attendance:
BOARDMEMBERS: Barlow, Grden, Label, Wheeler, Wright
STAFF: Henderson, Kemper
II.
APPROVAL _OF_ THE _ MINUTES_ OF SEPTEMBER_251_1986
The minutes of the meeting of September 25, 1986 were approved as
mailed. The minutes of October 8, 1986 were postponed for
approval to the next meeting.
III. REVIEW OF PACKET
----------------
Mr. Henderson reviewed the packet presented to the Board, which
included: 1. handout from Adele Raymond, re: recreational
vehicles and mobilehomes; 2. agenda and minutes.
At this point, and with the permission of the Nicas', the Board
reversed the order of agenda items #4 and #5, thus allowing the
Silver City application to precede the Nicas presentation. Prior
to action on the Silver City application, though, the Board
requested that Staff brief the Board concerning the recent
Council decisions regarding the (appeal of the) Creekside
application and the related MHRRB recommendation.
ADD ITEM
Mr. Henderson explained to the Board that the Council overturned
their (MHRRB) decision and upheld the appeal by the Creekside
Mobilehome Owner's Association. He also noted that the Council
did not agree with the MHRRB's recommendation on water
consumption, usage, and allowance, concerning Creekside Mobile -
home Park.
MHRRB
Minutes - 10/16/86
Page 2
IV. CONTINUATION_ OF SILVER_ CITY_ APPLICATION
The Board entered into deliberations and discussion concerning
the Silver City Application. With the intent of propelling toward
a decision in these, the Board first made a number of comments
and qhs rvations. In sum, the Board discounted, wholly or in
rt, each of the ethodologies presented by the applicant in
rationalizing a rent increase. These methods, as presented in an
appraisal report (Exhibit *16), include: 1. Replacement Cost
Approach; 2. Income Approach; 3. Return on Value Approach; and 4.
Maintenance of Net Operating Income Approach.
The Board took a break from 2:25 - 2:35 p.m..
TAPE *2
Although the Board recognized weaknesses inherent in the above
formulas, it became apparent they found some basic direction from
the assessments provided. Soon thereafter, a consensus of the
Board held the opinion that Silver City did in fact experience
"below market" rents, and this effected an unfair financial
hardship upon the owners. The Board began to establish some
estimates, and, thus, focus the discussion on the amount of a
rent increase, not if an increase would be granted The lower and
upper limits of an average. a space rent to be allowed in 1985
that had support from th Boar were, $170 - $185, respectively.
1r�OCYJ �_O� The cu age base rent at Silver City was $166.00.
After some discussion, the Board stated it could not support a
three-year rent increase as requested by the applicant. Any
increase granted would extend only one year. Additional increases
in the future would have to be submitted to the Board, via the
application process. The Board also emphasized the desire to
address the application with two separate motions, one concerning
the installation of individual water meters (Change in Service),
and the other considering a rent increase. The issue of
individual water metering would first be decided on, followed by
action on the issue of a rent increase.
The Board thoroughly discussed the issue of individual water
meter installation as proposed by the applicant. The concept
itself seemed to have the general support of the Board, but the
formula for establishing a rent reduction allowance, to off -set
an (effective) rent increase, appeared to be unclear, as did
consequences. Action soon hinged on the intent outlined in the
amendment to the application which concerns the establishment of
the water rate, by formula. The amendment stated the water rate
utilized for the purposes of calculating the rent reduction
allowance would be that which existed "at the time this
application is granted."
MHRRB
Minutes - 10/16/86
Page 3
IV. CONTINUATION OF SILVER_ CITY_ APPLICATION
-------------- ---- - ---- -----------
(continued)
TAPE *3
Discussion ensued over using the original language in the
amendment versus amending it to read "prevailing water rates."
Issues and consequences pertaining to each were addressed. The
Board understood that if the original language was left intact,
the rent reduction allowance would become a fixed -sum. That is,
tenants' rent would be reduced this amount consistently, and in
the event of a change in City water rates, tenants would be
responsible for the new rate. The Board also understood that if
it went to such language as "prevailing water rates," that as
water rates change, the rent reduction allowance would be
adjusted according to a direct, inverse proportional
relationship. The Board also suggested amending the amendment to
the application to allow for a usage equaling "660 cubic feet for
double wide spaces," rather than the stated "650 cubic feet."
Neither concerned party to the application had a problem agreeing
to this change.
There was a motion "to approve the amended application by Silver
City allowing for the installation of water meters combined with
a base space rent reduction allowance for water calculated at 610
cubic feet for single-wides and 660 cubic feet for double-wides.
This rate would take effect at the time this application is
granted" (Wheeler, Barlow). The motion was carried after a voice
vote with the following votes recorded: AYES - 5; NAYES - 0.
The Board then moved toward action on the (separate) issue of a
rent increase. The Board considered the idea of adopting a single
method on which to base their reasoning for/against a rent
increase, versus letting individual Boardmembers use their own
judgement concerning this matter. The consensus reached concluded
that individual Boardmembers were free to use their discretion on
the approach to use in making a decision on the rent increase.
At this point, the Board discussed and analyzed a number of
methodologies with the intent of developing an outline to
incorporate reasoning leading to a decision on the subject
application. These include: maintenance of expense to income
ratio; Maintenance of Net Operating Income; Maintenane of Net
Operating Income adjusted for inflation; maintenance of return on
investment ratio (percentage); and comparable rents. On the issue
of comparable rents, the Board did spend some time looking at
past and current figures concerning average base space rents at
other mobilehome parks throughout the City. Acknowledging a
number of inconsistencies among the comparisons, the Board sought
to establish some sort of base from which to work.
MHRRB
Minutes - 10/16/86
Page 4
IV. CONTINUATION OF SILVER CITY APPLICATION r
(continued)
The Board soon established the parameters between which a rent
increase would be granted; $170 - $185. ey noted that the
owners of Silver City have followed a hi t0rically consistent
pattern concerning rent increases; one which paralleled the rise
in the cost of living. The Board declared it would entertain a
motion to allow a similar increase in line with this historical
intent of the owners
TAPE #4
There was a motion "to have average base space rents for Silver
City in 1985 be established at $180, with no retroactive
reimburesment for the owners." Using this figure as a base, would
allow the owners to calculate the CPI (as outlined in the
Ordinance) for 1985, and the new total (increase) would be the
responsibility of the residents 60 days following approval of the
application. There was no second. Also there was a motion "to
allow Silver City to take the CPI adjustment which they
overlooked in 1985, and consider this amount to be their rent
increase. There was no second on this motion either. .f h.Jr,.,,rrd'-{�
TAPE *5 �f�� ��-�,
There was a motion "to have average base space rents for Silver
City in 1985 be established at $176, with no retroactive
reimbursement for the owners" (Label, Grden). The motion was
carried after a roll -call with the following votes recorded: AYES
- Wheeler, Label, Grden; NAYES - Wright, Barlow. Staff suggested
that a subcommittee be formed to assist Staff in drafting
Findings to bring to the next meeting.
TAPE #6
V. PRESENTATION__ Edward _&_Betty_Nicas
Mrs. Nicas, resident �f Oceanaire Mobilehome Park, came before
the Board requesting protection under the Rent Stabization
Ordinance. Mr. & Mrs. Nicas live in a recreational Vehicle, known
as a "Travel Trailer," which are not protected under the current
Ordinance. They urged the Board to amend the Ordinance to include
Travel Trailers under its jurisdiction. Mr. Clairmore Fenderson,
owner of Oceanaire, spoke out against the Nicas' request. Mr.
Chris Lundberg, resident manager of Oceanaire, also spoke out
against the Nicas' request. Charlene Powell, Pismo Beach
resident, spoke in favor of the Nicas request. Mr. Wilson, owner
of Matthews Trailer Park, spoke out against the Nicas request.
MHRRB
Minutes - 10/16/86
Page 5
V. PRESENTATION: _Edward _&_Betty_Nicas
(continued)
The Board moved to table the matter for a later date, for further
study and in anticipation of the Board/Council study session
which will review the intent of the Rent Stabilization Ordinance.
VI. ADJOURN
The meeting was adjourned at 6:00 p.m— Next meeting was set for
Thursday, November 13, 1986 from 1:30 - 5:00 p.m.