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HomeMy WebLinkAboutOrd 1305 - Amnd Ch 9.50 - Mobile Home Park Rent Rvw BoardDdlEiMIS DATF �- f - ( 7 GOE.i' t�M T 2 CITY OF PALM DESEVT .� i PE0 TO t14D P;.:,k! ,i SPECIAL PROGRAMS DEPA JWr-:h1T * Continued to the meeting of May 12, STAFF REPORT 2016, with Councilmembers Jonathan and Tanner volunteering to attend the Resident Meeting that will be scheduled for this purpose. REQUEST: ADOPTION OF ORDINANCE NO. 1305 AMENDING CHAPTER 9.50 OF THE PALM DESERT MUNICIPAL CODE, TO INCLUDE ELIMINATION OF THE RENT REVIEW BOARD AND IMPLEMENTATION OF THE CITY MANAGER/HEARING OFFICER REVIEW PROCESS SUBMITTED BY: Robert W. Hargreaves, City Attorney Frankie Riddle, Director of Special Programs DATE: April 14, 2016 CONTENTS: Ordinance No. 1305 Memorandum from Staff Correspondence from Anthony Rodriguez dated March 18, 2016 Recommendation Waive further reading and pass Ordinance No. 1305 to second reading, amending Chapter 9.50 of the Palm Desert Municipal Code to include elimination of the Rent Review Board and implementation of the City Manager/Hearing Officer Review Process. Strateqic Plan Obiective N/A Executive Summary The primary change within the Amended Rent Control Ordinance is the elimination of the Rent Review Board and implementation of the City Manager/Hearing Officer review process. Other minor changes are highlighted in the attached redline document. Rent Review Board Members are aware of the proposed change relative to the elimination of the Board and have expressed their support. The proposed changes have also been posted at each mobile home park within the city that would be impacted by the proposed changes. Background Rent control was initiated in Palm Desert in 1986. Since that time, no significant changes have been made to the City's rent control ordinance and policies. In the early 2000's, an extensive rent review process was initiated, a report was commissioned, Amended Rent Control Ordinance April 14, 2016 Page 2 numerous meetings were held, and many comments were received. That effort proved very contentious and ultimately was put aside pending resolution of litigation with Silver Spur (regarding a rent increase dispute that originated in the 1990's) that was settled in 2014. Staff believes that it is an appropriate time to revisit the modernization of the rent control ordinance. Under the current ordinance, the Palm Desert Rent Review Board is empowered to consider rent control issues and make decisions regarding hardship rent increases. In practice, the Board rarely meets, has not considered a rent increase application in more than ten years, and has lost most of its members, as outlined in the attached memorandum. Given that the Board has not had a realistic opportunity to develop expertise, and is cumbersome to administer, staff is proposing to transfer the Board's functions to the City Manager, and allow the City Manager to designate qualified staff or outside consultants to perform functions relative to rent control. Under the amended ordinance, petitions for rent increases would be considered by trained neutral hearing officers to insure unbiased quality decisions. Decommissioning the Rent Review Board would allow the City to move forward with modernizing its Rent Control Ordinance in a more streamlined fashion. Attached is the correspondence received from Silver Spur Mobile Home Park owner representative, Mr. Anthony Rodriguez requesting modifications and additional changes to the amended ordinance. While the proposed changes outlined by Mr. Rodriguez are worth considering at some point, the principal purpose at this time is to replace the Rent Review Board to expedite the review process going forward. It should be noted that a comprehensive review of the Rent Control Ordinance will take place in due course. Fiscal Analvsis Approval of this item should have no negative impact to the City's General Fund. Submitted by: Frankiek,8idddle roertDirector of Special Programs Approved: 'Ludy Acosta Acting City Manager ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT AMENDING CHAPTER 9.50 OF THE PALM DESERT MUNICIPAL CODE TO ELIMINATE THE RENT REVIEW BOARD AND IMPLEMENT A CITY MANAGER/ HEARING OFFICER REVIEW PROCESS. NOW, THEREFORE, IT SHALL BE ORDAINED by the City Council of the City of Palm Desert as follows: SECTION 1. Chapter 9.50.020 Mobile Home Park Rent Review is hereby amended in its entirety to read as follows: "CHAPTER 9.50 MOBILE HOME PARK RENT REVIEW 9.50.020 Definitions. The following definitions shall govern the construction of this chapter: A. "Management' is the owner of a mobile home park or an agent or representative authorized to act on his behalf in connection with matters relating to a tenancy in the park and also referred to as "mobile home park owner." B. "Mobile home" for the purpose of this chapter shall be defined by the statutes of the state of California. C. "Mobile home park" is an area of land where two or more mobile home sites are rented, or held out for rent, to accommodate mobile homes used for human habitation. D. "Park" is a mobile home park. E. "Rent" or "space rent" is the consideration, including any bonus, benefit or gratuity demanded or received in connection with the use and occupancy of a mobile home space in a mobile home park. F. "Rental agreement" is an agreement between the management and the tenant establishing the terms and conditions of a tenancy and regulating the amount of a monthly space rental and the allowable increases therein. A lease is a rental agreement. G. "Rent schedule" is a statement of the rent charged for each tenancy in a mobile home park, together with any supporting data therefor. 60"11 ..0 Formatted: Line spacing: Exactly 10 pt Formatted: z,mpTrailerltern Formatted: Default Paragraph Font Formatted: Line spacing: Exactly 10 pt H. "Services" means those facilities which enhance the use of the mobile home site, including, but not limited to, repairs, replacements, maintenance, water, utilities, security devices, security patrols, storage, bath and laundry facilities and privileges, janitorial services, refuse removal and recreational and other facilities in common areas of the mobile home park. "Service" does not include charges for interest, depreciation, amortization, financing or refinancing of the mobile home park. I. "Tenancy' is the right of a tenant to the use of a site within the mobile home park on which to locate, maintain and occupy the mobile home, site improvements and accessory structures for human habitation, including the use of the services and facilities of the park. J. "Tenant" is an owner of a mobile home, responsible for paying rent to management. K. "Representative." In the event that a petition is filed by more than one tenant, they shall designate one of them to be their representative. L. The "hearing officer" shall be appointed by the reRt Feview be cit manager. The hearing officer shall be knowledgeable in the rules of evidence. The hearing officer shall be impartial and it shall be his duty to conduct an evidentiary hearing pursuant to the provisions of this chapter to obtain evidence from the parties that he deems necessary to make his recommendation and to make recommendations for findings and determinations to the Fent F9View be citv manaoer. M. Reserved rdappointel p`. cent to Section 9.50.040. N. "Consumer Price Index" is the index published by the United States Department of Labor, Bureau of Labor Statistics, known as the "Consumer Price Index for All Urban Consumers (1982-84) for the Los Anoeles - Riverside - Oranae Countv Area. Area." (Ba6e year - . If this index is changed so that the base year differs from the one defined in this chapter, the index shall be converted in accordance with the conversion factor published by the United States Department of Labor, Bureau of Labor Statistics. If the index is discontinued or revised, such other governmental index or computation with which it is replaced shall be used, or such other action as shall be necessary shall be taken in order to obtain substantially the same result as would be obtained if the index had not been discontinued or revised. O. A "contested hearing" is a hearing which results from a petition for adjustment which is filed pursuant to the provisions of this chapter. P. "Capital improvement costs" are all expenditures which are required to be "capitalized" rather than "expensed" for state or federal income tax purposes. 74_ilxl IMKKM_'.16101 46 I, { Formatted: Line spacing: Exactly 10 Pt CFormatted: zzmpTrallerltem Formatted: Default paragraph Font�� (Formatted: Line spacing: Exactly 10 pt 9.50.040 . Reserved. A. There is xtn !irh cr*m a. chill t awe only to the Fnembers shall c a `rm 9f fouF at tha end of wh*Gh heishe may be I O! crrV I, Any member c is fr car lea!! d hi2 o h2r oi#iee. tT E*G t St expr Wrt!ieh tha firne-apA-plase of its meetings All meetings of the board in asserdaflse w-ith tho pr . l cicvr in a in oerperat+s�n�, tr. f- thn ttic j'ti-dist+en as defined 6hall be filed with the Gity Glerk not 2ti thon Sc^ holdings required hcr&i chill be in -adds ieR to ny other disslesure required by state er der . E The beam I W I n1 sendustin3 iNn tx*n imo h shall be ell 1*19 with the Gity cdt at cll timct. Tha-beard-shell aiiFoint s►oh ef#ioers as may be necessary- F. The beard shall keep a record of itsPreseed+ngs-which shag be -open -fer nspeGfien by any member ef the publiG. �xq 2c r:/ay H: The city manasr - - 'Inhil! r-rspensi 9ek fc� the rr-\r� Formatted: Line spacing: Exactly 10ptpermanent reGE)rd6. � Formatted: zzmpTrallerltem Formatted: Default Paragraph Font (Formatted: Line spacing. Exactly 10 pt `_SI III IXXNII\fah 1115.11� I ,/ l quorNm. Three affirmative 3 wll motions, 9.50.050 Power of the FeAt FeView be citv manager. Within the limitations provided by law, the rent Feview be citv manaoer, or the citv manager's designee, shall have the following powers: A. To fFem t me to time at the Gall c chlairmcm, t344efein-determine the petitions filed hereunder the beafd All meetings :!-Z!I h , B. To appoint and designate hearing officers for the conduct of evidentiary hearings to be conducted hereunder; C. To receive, investigate, hear and determine petitions of landlords for a fair return or capital improvement (collectivelv "hardshipl-adjustment of rent pursuant to Section 9.50.070 and the "Palm Desert Mobile Home Park Rent Review Board Guidelines for Hardship Rent Increase (Fair Return on Propertv)" previously adopted by the Rent Review Board or other regulations approved by the Citv Council, and as modified, if necessarv, to comply with existinq law; l3: To make GF GendUGt 6UGh indepepAcry NNir.ngs or iave6tiga4vnc M .r.ay be appropriate 49-ct',-_i. n c rw ^ , E. To authorize an increase in the maximum amount of rent otherwise permitted to be charged by a mobile home park owner pursuant to this chapter. Such authorizations shall be given where the city manaoerbealrd finds that a hardship increase is necessary to insure that the mobile home park owner receives a fair return as required by law. -+\`r, a rt frqn,+�authoFized inGFea6e, Milt in %:ndue-haKkhip tc th in mC rates; #Property- taxes, nsafance, adveftis�overn t and fees, ar►d feasenablc nUrn on th 'c r cpo^IyI examining ,cpc4 and xn rrymml_ [ee aet*v*ties d; ,7251)0 INx XlI\'46i115.1l,1, �� Formatted: Line spacing: Exactly 10 pt Formatted: zzmpTraJerltem Formatted: Default Paragraph Font Formatted: Line spacing: Exactly 10 pt F. To adopt, promulgate, amend or rescind administrative rules to effectuate the purposes and policies of this chapter, subject to the approval of the city council; G. To maintain and keep at the City Hall rent review hearing files and dockets listing the time, date and place of hearings, the parties involved, the address involved and the final disposition of the hearing; H. To recommend to the city council the adoption of a fee schedule setting such fees and charges as appear necessary or desirable to defray in whole or in part the costs of administration of the beardcity manaaer and conduct of itshis assigned duties; I. To recommend to the city council the imposition of a registration program for implementation of this section, including any registration fees in connection therewith. 9.50.060 Maximum rent. A. Except as otherwise provided in this chapter (e.g., a fixed -term rental agreement or a hardship rent adjustment), the maximum rent that a mobile home park owner may request, demand or receive for a mobile home space shall not exceed the monthly rent that was charged for that space on base date (as defined below) adjusted up or down for the change in the cost of living since the base date. In other words, the maximum rent chargeable will increase or decrease over time based on fluctuations (up or down) in the cost of living. As the cost of living goes up relative to the base date, the maximum chargeable rent will also go up; as the cost of living goes down, the maximum chargeable rent will also go down. If the cost of living remains constant, then the maximum chargeable rent also remains constant. In implementing this section, a mobile home park owner shall not increase — nor be obligated to decrease — the rent charged for any space more than once during any twelve-month period, unless an additional increase or decrease is expressly authorized or ordered by the manaaer. B. Notwithstanding the foregoing, no rent increase in a given twelve-month period shall cause the previous rent charged for the space to increase more than six percent unless expressly permitted by the real-review-beardcity manager. If an increase of more than six percent would occur, then the excess increase may be carried forward for a period of up to eight years, until utilized to allow an automatic, annual increase up to six percent unless expressly permitted by the citv manager. If an increase of more than six percent would occur, then excess increase may be carried forward for a period of up to eight years, until utilized to allow an automatic, annual increase up to six percent in any future years in which the permitted increase in the rent would be less than six percent. C. The "base date" shall be April 28, 1983, for any space that was rented on that date and not governed by a fixed -term rental agreement permitted by this chapter. T_iuu nunnl\�.U. initY (, I � Formatted: Line spacing Exactly 10 pt Formatted: zzmpTraderltem { Formatted: Default Paragraph Font Formatted: Line spacing_ Exactly 10 Pt For all other spaces, the base date shall be the first date after April 28, 1983, that the space was rented and not governed by a fixed -term rental agreement permitted by this chapter. D. Changes in the cost of living shall always measure from the base date. For purposes of this section, the change in the cost of living shall be measured by three- quarters (seventy-five percent) of the net change in the Consumer Price Index (CPI) from the base date until any subsequent date in the present. The CPI used for the subsequent date shall be the most recent CPI published before that date. E. Raising rent during a twelve-month period in accordance with this section shall not prevent a park owner from subsequently filing a hardship rent petition during that same period. Nor shall the filing of a hardship rent petition preclude the subsequent imposition of an otherwise allowable rent increase while the petition is pending, provided any such increase is brought to the attention of the city official or boafdcLty manager considering the petition. At all times during the hardship petition process, the most recent CPI date shall be used. F. Nonimposition of a rent increase permitted by this section during a twelve- month period shall not affect the maximum rent that a park owner may charge in a later twelve-month period. But a park owner may never retroactively collect rent from tenants that could have been charged but was not. That is, rent increases allowed by this section shall only apply prospectively. 9.50.070 Initiation of review and hearing process. A. A mobile home park owner, or any representative of the mobile home park owner, operator or manager of a mobile home park space affected by this chapter, upon payment of such filing fee as shall be duly established, may petition the beardLty manager for a hardship increase of the maximum rent permitted to be charged pursuant to this chapter. If the beardcity manaoer shall designate a form for the filing of such petition, such petition shall be filed upon such form. If no such form shall be designated, such petition shall be in writing, verified by the applicant, and shall contain the name, address and telephone number of the applicant; the name and address of the resident of each mobile home space which would be affected if the petition were granted; a statement of the facts giving rise to the petition for hardship increase, in sufficient detail that if established, such facts would demonstrate the existence of a hardship upon the mobile home park owner warranting such hardship increase; a statement that each resident of a space to be affected by the hardship increase, if granted, has been served a notice of the filing of the petition; such notice shall inform each such resident of the location where the petition may be obtained or reviewed. B. Any resident of a mobile home park, or mobile home park owner, affected by this chapter, upon payment of such filing fee as shall be duly established, may FFomatted: Line spacing: Exactly 10 pt petition the beardcity manaoer for an interpretation of this chapter, for a determination of Formatted: zzmpTrailerltem whether a particular course of action, either proposed or actual, is legal, valid and within Formatted: Default Paragraph Font J Formatted: Line spacing: Exactly 10 pt �;51111 Ili 1i 1111 \_'�IA iI ISJh I. the terms of this chapter. If the beardcity manager shall establish forms for such petitions, the petition shall be prepared and submitted upon such form. In the absence thereof, the petition shall contain the name, address and telephone number of the person requesting the interpretation or opinion; the name, address and telephone number of the mobile home park owner, manager or other person authorized to represent the mobile home park owner; the names, addresses and telephone numbers of any other residents of mobile home space of individuals requesting such determination; and a brief statement of the facts giving rise to the request for interpretation or determination. The procedural rules with respect to petitions for interpretation shall be those applicable to petitions for hardship rent increases, except that, should the city manager determine to do so, petitions for interpretation which raise issues of a legal nature may be referred to the city attorney for final response, or; in the alternative, for preparation of an opinion and recommendation to the FeRt review be citv manaoer. Under the first alternative, the city attorney's opinion shall be final. Under the second alternative, the city attorney's opinion and recommendation shall become final within fifteen days after the filing of the same with the city clerk, and without further action of the rent review beafdcity manager unless a petition to review the city attorney's opinion and recommendation is filed by the requesting party with the city clerk. C. In the event that a petition is filed, the petitioner shall serve a notice of the filing of same. If said petition is by management, service shall be on each tenant within the mobile home park on a form provided by the city; if said petition is by a tenant or tenants, service of a notice of the filing of the same shall be on management. D. Within twenty days after the filing of the proof of service of the notice under the preceding subsections, the opposing party may file opposition. E. The hearing officer shall establish a date for hearing, giving notice to all parties thereof, and shall promptly consider and decide all petitions filed pursuant to this chapter. The matters shall be considered and decided in the order filed. The party filing any petition shall deposit with the city the estimated cost, as estimated by the city manager, of all costs to the city, including without limitation the GOSt Of the meeting 9i aboard, the full cost of conducting the hearings as herein provided, the cost of the hearing officer, and the cost of preparation of any record. In the event the funds so deposited exceed the city's costs, any excess shall be refunded to the parties so depositing the same, and any deficiency must be agreed to be paid by such party. Additional deposits may be required to cover costs when it is determined that the initial deposit is not sufficient to satisfy the same. In the event such deposits, when required, are not made in a timely manner, the petition shall be deemed withdrawn and the proceeding terminated. The hearing officer shall consider all relevant facts presented at the hearing, and may require additional information to be presented by the manager or others to determine what adjustments, if any, should be made. 4.17077.3 2S111HwNw11\2461iis46�l , Formatted: Line spacing: Exactly 10 P-1-1 Formatted: zzmpTrailerltem Formatted: Default Paragraph Font Formatted: Line spacing: Exactly 10 pt F. For any contested hearing, if there is more than one party on a side, the hearing officer may require the parties on one side to designate a representative to receive service of notice and papers and documents with respect to the same; and after such designation, the service on the representative so designated shall be deemed to be giving service to all such parties on that side. G. In the event of any contested hearing, each tenant in the affected mobile home park, (or the tenants' representative if one has been designated), shall be mailed a notice of the time and place of the commencement of the hearing and the possible effect upon his or her rent. Said mobile home park tenants shall be given a chance and an opportunity to be heard at the contested hearing. No further notice shall be required to be given under this chapter for any continuances of the hearing. H. II meeting and hearings shall be open to the public and notice thereof given as required by law. Meetings shall be held as necessary to hear and decide petitioners. I. The city manager shall notify the petitioning party upon receipt of opposition to the petition, and as soon as possible thereafter shall notify both parties of the time, date and place of hearing. J. Upon receipt of a valid petition pursuant to this chapter, the rent review beardcity manaoer, unless heit conducts the hearing himself4sei# under the provisions of this section, shall refer the petition to the opposition and to a hearing officer who shall conduct an evidentiary hearing upon the petition. At the evidentiary hearing, the hearing officer shall take all evidence, and may require any party to the proceedings to provide him with pertinent books, records, papers, etc. In furtherance of this power, the hearing officer may request the city council to issue a subpoena for the same if they are not voluntarily produced, or he may take a refusal to produce the same as evidence that such evidence, if produced, would be adverse to the party refusing to produce the same. K. The management may substitute for any books, records and papers a certified audit by an independent certified public accountant, using generally accepted accounting principles consistently applied, or a verified statement under oath by an independent certified public accountant of what the information sought from such books, records and papers consists of. Notwithstanding this subsection (K), the hearing officer may require production of the books, records and papers. L. The hearing officer shall rule upon the admissibility of all evidence at the evidentiary hearing, and shall have the power and authority to conduct the evidentiary hearing in all respects. M. The hearing officer shall keep detailed notes of the evidence produced and provide for recording of all of the testimony presented at the evidentiary hearing ,7251111 IXllm10461164(, I� � { Formatted: Line spacing: Exactly 10 pt Formatted: zzmpTrailerltem Formatted: Default Paragraph Font Formatted: Line spacing: Exactly 10 pt N. The evidence presented at the evidentiary hearing shall constitute the exclusive record for the decision of the issues involved. O. At the conclusion of the evidentiary hearing, the hearing officer shall prepare a summary of all testimony and evidence admitted at the evidentiary hearing and a statement of all materials officially noticed, and prepare proposed findings of fact and a recommended decision to the FeRt Feymew be itv manaoer, and shall promptly submit the same to the rent review be itv manager, along with copies of all documentary evidence received. Copies of the hearing officer's summary, matters officially noticed, and proposed findings and recommendation for decision shall be mailed to all parties participating in the hearing. The hearing officer's proposed findings and recommended decision shall become the final findings and decision of the feat review board itv manaoer within fifteen days after the filing of the same with the clerk 0 thp rent reviev beard (i.e., the city clerk) without further action of the beafdcity manaoer, unless any party participating in the hearing shall file a petition to review the hearing officer's proposed findings and determination with the ci�clerk of the rent review beard. P. Upon receipt of the hearing officer's summary, proposed findings, official noticed material and recommendations, the documentary evidence admitted in the proceedings, and a petition to review filed pursuant to subsection (0) of this section, the rent review be itv manager shall heaf consider written arguments by the parties based upon the material submitted to himit by thefts hearing officer. Any party at a proceeding may also have prepared, at his expense, a transcript of the hearing to be presented to the FORt review be city manager. No further evidence shall be permitted nor allowed at the hearing before the rent Feview bG itv manaoer, but it shall be based solely upon the materials presented to the hearing officer at the evidentiary hearing. The citv manager mav, but shall not be required to, set a hearing to hear oral aroument from, and present ouestions to, the parties. Q. 1. At the conclusion of the consideration of heafiRg on the proposed findings and recommended decision of its hearing officer before the feRt review beafdcity manager pursuant to subsection (P) of this section, the beafdcity manager shall, within thirty days after the submission of arguments or date of the hearing: a. Accept and confirm the recommendations of the hearing officer and adopt his findings and recommendations; or b. Amend the findings and recommendations of the hearing officer; or C. Send the matter back to the hearing officer for further hearings on the issue pursuant to any instructions provided by the feftt rev*Aw hpafdcity manager. 2. Upon issuing the findings of fact, pursuant to subdivisions (a) or (b) of this subsection, the itv manaoer shall render Ashis final decision. .L2S1111111111 IL\?1610 4(, I Formatted: Line spacing: Exactly 10 pt Formatted: zzmpTrailerltem { Formatted: Default Paragraph Font Formatted: Line spacing: Exactly 10 pt The final decision shall be final and conclusive upon all parties. The final decision by the beardcity manager may include a provision equalizing the rents among all of the tenants of the mobile home park, based upon the location, size and improvements supplied by management of each mobile home site, notwithstanding any previous disparity between rents charged on equivalent mobile home sites. Any tenant whose rents will be so equalized upwards shall be given special notice of the same and chance to be heard. R. Any order of the rent review be citv manager shall, unless otherwise specified in itshis final decision, be effective as of the date thirty days after the filing of the petition for adjustment. S. Any party to a hearing may be assisted by attorneys of the party's choice. T. c parl: in VhiGh he Fesid or hao a `4naRsial er Reserved. U. The reRt review beardcity manager shall keep minutes of hisits meetings and make an official record of a hearing. V. Decisions of a itv manager shall be supported by a preponderance of the evidence. W. The evidentiary hearing need not be conducted according to technical rules relating to evidence and witnesses. Any relevant evidence may be admitted if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule which might make improper the admission of such evidence over objection in civil actions. X. The Fent Fey4ew be itv manager may in hisits final decision direct that the prevailing parties' cost in these proceedings, including any funds paid to the city pursuant to the provisions of this section, shall be reimbursed by the losing party. Such an order for costs may be enforced by a court of law of appropriate jurisdiction. In the event that the FeRt Faview be itv manager determines that any petition or opposition is frivolous, he it -may award reasonable attorney's fees to the other party or parties. Y. The FeRt review be itv manager or hisits hearing officer may spread any retroactive rent adjustment under subsection (R) of this section over several months of future rent. 9.50.090 Enforceability. In the event of a violation by the management of a mobile home park of any maximum rents, an effective rent schedule, or a final decision and order of the rent rev+ew beard itv manager, relief for such a violation shall be enforceable by the � _SOO Ix M M I I\'_�63115.46 1- { Formatted: Line spacing: Exactly 10 pt Formatted: zzmpTraileritem Formatted: Default Paragraph Font Formatted: Line spacing: Exactly 10 pt individual tenants of that park in a court of the appropriate jurisdiction in which injunctive relief may be granted, and damages shall be allowed for any rent paid in excess of the effective rent schedule or any final determination of the itv manaoer. In any such court proceeding, the prevailing party shall be awarded his reasonable attorney's fees, and the court, where applicable, shall be empowered to order treble damages for any rents charged in excess of any effective rent schedule or maximum rent, or in violation of the final decision of the beardcity manaaer (i.e., three times any excessive rent or over charge). 9.50.100 Limitation of action to attack a final decision —Order of the reRt review bGardcity manager. A-. OAny action or proceeding to attack, review, set aside, annul or void a final decision and order of the citv manaoer, or the reasonableness, legality or validity of any provision or condition attached thereto, shall not be maintained by any person unless such action or proceeding is commenced, and service of the summons is effected, within ninety days of the filing with the city clerk of the final determination and order, and notice of the same has been given to the city clerk. ma . 2-. Only upon one or mere of !he fallewing ground-6- a. T#ere-is-newty discovered evidence w#ishthe requesting ►nablo t^ P ent at she hearing; f the desisien s�n^i.!la+ bar e+the� party er There was fraud GF W imp cf th !w.4 hearing effi6 9.50.130 Termination of service. No mobile home park owner shall reduce or eliminate any service to any mobile home space so long as this chapter is in effect, unless and until a proportionate share of the cost savings resulting from such reduction or elimination is passed on to the resident in the form of a decrease in space rent. If a mobile home park owner who provides services to a mobile home space in the nature of utility services, shall reduce or eliminate such service by separate metering or other lawful means of transferring i BSI III IMMXII\'_J (�i115J(� I r, { Formatted: Line spacing: Exactly 10 pt I Formatted: zzmpTrallerltem Formatted: Default Paragraph Font (Formatted: Line spacing: Exactly 10 pt from the mobile home park owner to the resident the obligation for payment for such services, the cost savings, if any, resulting from such reductions or elimination to be passed on to the resident in the form of a decrease of rent, shall be deemed to be the cost of such transferred utility service for the month of April, 1983. If for any reason the utility bill for such service for the month of April, 1983, is not representative of the normal or usual cost of such utility service at the time, or if either mobile home park owner or resident shall protest the use of the April, 1983 billing as the measure of such cost savings, then the computation of such cost savings shall be based upon the average monthly charge for such service for the period of March, 1982, through April, 1983, inclusive, or such other period as the parties shall mutually agree is representative of such cost savings. For the purposes of this section, in determining cost savings to be passed on to the resident in the form of decreased rent, the cost of installation of separate utility meters, or similar or analogous costs to the mobile home park owner to shift the obligation for payment of utility costs to the resident, shall not be considered. Nothing stated herein shall be construed to prohibit or prevent the consideration or inclusion of such costs, together with other operational costs of a mobile home park owner, in any proceedings before a the citv manager, eeFnMissien or ether appointed beady -hearing officer authorized to hear and determine requests for hardship adjustments." SECTION 2. If any section, subsection, clause or phrase of this Ordinance or any part thereof is for any reason held to be invalid, unconstitutional, or unenforceable by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portion of the Ordinance. The City Council declares that it would have passed each section, subsection, paragraph, sentence, clause, or phrase thereof, irrespective of the fact that any one or more section, subsection, sentence, clause or phrase would be declared invalid, unconstitutional or unenforceable. SECTION 3. Pursuant to state and local environmental regulations, it has been determined that the regulations encompassed in this Ordinance are not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. SECTION 4. The City Clerk of the City of Palm Desert, California, is hereby directed to publish this Ordinance in the Desert Sun, a newspaper of general circulation, published and circulated in the City of Palm Desert, California, and shall be in full force and effective thirty (30) days after its adoption. ( Formatted: Line spacing: Exactly 10 pt Formatted: zzmpTrailerltem Formatted: Default Paragraph Font Formatted: Line spacing: Exactly 10 pt 7?51111111111111 \:Jl, i115J(� I _ _ _ _ _,/, PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Palm Desert, California, on the _ day of 2016 by the following roll call vote: AYES: NOES: ABSENT: ABSTAIN: Robert Spiegel, Mayor ATTEST: RACHELLE D. KLASSEN, City Clerk City of Palm Desert, California { Formatted: Line spacing. Exactly 10 Pt Formatted: umpTrailerltem Formatted: Default Paragraph Font Formatted: Line spacing: Exactly 10 pt 44.17077.3 `_'51111111111111\?J6 AIS4A I. _ i CITY OF PALM DESERT SPECIAL PROGRAMS DEPARTMENT INTEROFFICE MEMORANDUM To: John M. Wohlmuth, City Manager From: Frankie Riddle, Director of Special Programs Date: February 25, 2016 Subject: Amendment to Rent Control Ordinance and Changes in Rent Control With the settlement of Silver Spur and the resignation of Arnold Werchick, Chairman of the Rent Control Board, the time for the City to review the Rent Control process is now. Currently, the Board plays an important role in reviewing all rent review issues including requests for rent increase applications (e.g., hardship and capital improvement). Rent Review tends to be contentious and litigious in nature and why members of the Board should be experienced in Rent Control and the law pertaining to Rent Control. Unfortunately, with the resignation of the Chairman and the one remaining, long-term member, that has experience, having on -going health concerns, leaves three remaining members with limited experience to address the challenges of Rent Control. As a result new matters that come before the Board may not be vetted as thoroughly as needed and the services of a hearing officer will more than like be retained in any event. It should be noted that the Board has utilized the service of a hearing officer in previous hearings to review and make recommendation in regards to rent control matters. As a result, it may be appropriate for the City to change direction by utilizing the services of a hearing officer in conjunction with the City Manager to review and make recommendation in regards to rent control matters. Utilizing a hearing officer should not have a major impact on the City, property owner or residents residing within mobile home parks subject to Rent Control as the hearing officer will still be an impartial third parry and should have the necessary experience. In addition, the City would not have to recruit persons to be on the Rent Control Board that have limited to no experience and in general do not express an interested in serving on the Board when submitting an application to the City, but rather are assigned to the Board. Given the above and that the overall Rent Control Ordinance, process, procedures, etc. should be reviewed and changes implemented to better serve the needs of all parties, this appears to be an opportune time for the City to address and potentially implement changes to Rent Control. Franke Riddle Director of Special Programs cc: Rudy Acosta, Assistant City Manager ANTHONY C. RODRIGUEZ ATTORNEY AT LAW 1425 LEIMERT BOULEVARD SURE 101 OAKLAND. CALIFORNIA 94602 -1808 -TELEPHONE (510) 336-I536 FACSIMILE (510) 3W1517 March 18, 2016 VIA EMAIL AND UNITED STATES MAIL Robert W. Hargreaves, Esq. Best, Best & Krieger 74-760 Highway 111, Suite 200 Indian Wells, California 92210 Re: Silver Spur Mobilehome Park/ Obiections to Pronosed Amendments to Rent Review Ordinance Dear Bob: I have reviewed the proposed amendments to the City of Palm Desert's Mobilehome Rent Review Ordinance. Although my client would probably support an amendment that resulted in a hearing officer making the final decision on petitions, my client cannot support the proposed amendments. Based on my experience, I believe the proposed amendments are likely to raise more issues than they resolve, resulting in a more difficult procedure for all concerned in any future hearing, including the City Manager. Rather than attempting to "cut and paste" using the old ordinance as a template, I believe the provisions regarding the powers and duties of the City Manager and/or the hearing officer must be rewritten in their entirety, so there is no ambiguity as to who is supposed to do what. Below is a more detailed analysis of some of the issues that must be addressed if the current ordinance is to be revised. A. Determination of Petitions: Section 9.50.050A of the proposed amendments state that the City Manager shall "determine the petitions filed hereunder." I am not sure what that means. Does that mean the City Manager shall determine (i) whether a petition can be filed, (ii) that a petition is complete, or (iii) that a petition should be granted? These are three distinct roles, which should be defined. B. Selection of the Hearing Officer: Section 9.50.050A of the proposed amendments Robert W. Hargreaves, Esq. March 18, 2016 Page 2 states that the City Manager shall select the hearing officer. However, the proposed amendments contain no guidelines for the selection process. Does that mean the City Manager can select the same person to preside over hearings, year after year, with no input from the parties? In Haas v. County of San Bernardino (2002) 27 Cal. 4`' 1017, 1019, the California Supreme Court found that local agencies cannot appoint the same hearing officer year after year, because of the financial incentive for hearing officers to rule in favor of the agency. In order to avoid that problem, the City Manager cannot have unfettered discretion to select the hearing officer. Rather, a procedure must be developed to insure that hearing officers are selected either at random, or by the parties. C. City Manager as Hearing Officer: Due process is violated if an administrative decision is based on evidence that has not been submitted at a hearing, where it can be tested, explained or refuted. English v. City of Long Beach (1950) 35 Cal. 2d 155, 158-159. The proposed amendments state that when the City Manager appoints a hearing officer, the hearing officer must conduct an evidentiary hearing. However, if the City Manager acts as the hearing officer, no such requirement exists. See Sections 9.50.070J and 9.50.060B. Because the proposed amendments enable the City Manager to render decisions without a hearing, let alone the direct and cross examination of witnesses, the proposed amendments violate due process. D. City Manager on Appeal: If a reviewing agency rejects or modifies a hearing officer's decision, the reviewing agency must review the entire record from the evidentiary hearing. Hohreiter v. Garrison (1947) 81 Cal. App. 2d 384, 398. As a result, the City Manager cannot reject or modify the decision of a hearing officer, unless the City Manager has reviewed all of the evidence submitted to the hearing officer. Because the proposed amendments allow the City Manager to issue decisions on appeal in private, without a hearing or a review of the entire record, the proposed amendments are unconstitutional. See Section 9.50.070P. E. Substantive Changes: Although the City has suggested that the proposed amendments are not substantive, the proposed amendments eliminate most of Section 9.50.050E from the current ordinance. As you know, that provision allows a hearing officer to consider a number of factors in determining whether a rent increase is warranted, including increases in the cost of operating a mobilehome park. Because the proposed amendments result in significant substantive changes, my client also objects on that basis. In this light, it must be stressed that Section 9.50.050E of the proposed amendments could be interpreted as limiting rent increases to those situations where a parkowner is not Robert W. Hargreaves, Esq. March 18, 2016 Page 3 receiving a "fair return." However, the courts have held that the determination of whether a parkowner is receiving a "fair return" is a subject for expert testimony. Whispering Pines Mobilehome Park v. City of Scotts valley (1986) 180 Cal. App. 3d 152, 160-161. Under the proposed amendments, both the parkowner and the tenants must retain expert witnesses regarding fair return, even if the proposed rent increase is based solely on an increase in operating expenses. Because the proposed amendments require the parties to retain experts and litigate issues that would otherwise not be relevant, the parkowner must object for that reason as well. F. Conclusion: My client would probably support amendments that enable a hearing officer to conduct an evidentiary hearing and issue a final decision, without the need for review by a Rent Review Board. In fact, the overwhelming majority of the rent control ordinances I am familiar with are structured that way. However, by simply inserting the City Manager for the Rent Review Board throughout, the proposed amendments may create more problems than they solve. In addition, the proposed amendments would result in significant substantive changes to the ordinance, requiring the parties to retain expert witnesses regarding fair return for every dispute, no matter how small. Rather than attempting to amend the current ordinance by "cutting and pasting," the City should rewrite the ordinance to eliminate the Rent Review Board and provide for evidentiary proceedings to be conducted by hearing officers. Moreover, those hearing officers should not only be allowed to issue a final decision, they must be selected in a manner that is consistent with the California Supreme Court's decision in Haas v. County of San Bernardino (2002) 27 Cal. 41h 1017, 1019. By this letter, the City is respectfully requested to table the proposed amendments and to work with the parties to develop a procedure that enables a properly selected hearing officer to make a final decision on all disputes arising under the ordinance, without the need for further review by any other person within the City. If you have any questions or comments, or if you would like to discuss these issues in detail, please do not hesitate to call me at (510) 336-1536. Thank you. Very truly yours, Anthony C. Rodriguez cc: Marc Lofman INDIAN SPRINGS MOBILE HOME PARK HOMEOWNERS ASSOCIA TION POST OFFICE BOX f824 PALM DESERT, CALIFORNIA 92261 MEMO TO: Robert W. Hargreaves, Esq. City of Palm Desert City Attorney FROM: Mari Schmidt, Legislative Representative Indian Springs Mobile Homeowners' Association RE: Scheduled CC Agenda Item - 04-14-2016 Regarding Rent Control Ordinance Amendment DATE: April 7, 2016 Bob - Want to let you know that I plan to attend today's Special Closed CC Meeting, and hopefully during the "open" parts of the Meeting, I will be allowed to speak briefly regarding the "Notice of Rent Control Amendment" which is scheduled for the City Council's Regular Meeting of April 14, 2016. 1, on behalf of the HOA, will be asking Council (today, if at all possible) to postpone this Agenda Item, at least, until there is a new City Manager appointed to replace John Wohlmuth. The Dissolution of the Rent Control Commission is very serious stuff and directly affects (at least) several thousand residents of this City. If it were not for the RRC, the residents of Indian Springs could now be paying an added $330 per month Hardship Rent Increase claimed by our Park Owner which was really a "failure to maintain" issue. This constituency should not be subject to any City Manager's ability to "allow the City Manager to designate qualified staff or outside consultants to perform functions relative to rent control". At the very least, I would appreciate it if you would see that each Council member, Frankie Riddle, Amy Lawrence, and anyone else who should have a copy of this. I also tried to go to the City's web site to see who remains on the RRC, but couldn't find any information so informing. I would appreciate knowing who the present RRC members are. Thank you, HA4: Si t Mari Schmidt L£ =h Wd L- ddV Rig v3 '183M NlVd 331130 S. V8310 A 113 03AI3338 TO BE READ INTO AND BE MADE A PART OF — THE PERMANENT RECORD AND MINUTES OF THESE PROCEEDINGS: PALM DESERT CITY COUNCIL MEETING — 04-14-2016 SUBJECT: OBJECTION TO THE DISSOLUTION OF THE RENT REVIEW COMMISSION SPEAKER: MARI SCHMIDT, LEGISLATIVE REPRESENTATIVE FOR THE INDIAN SPRINGS HOMEOWNERS ASSOCIATION There are several reasons for my testifying before you today regarding the Dissolution of the Palm Desert Rent Review Commission. As some of you may know: - I've been a coach owner in Indian Springs Mobilehome Park (from 1993 to present); - I've served on the City of Palm Desert Planning Commission (2005 on into 2010); - I've served as President of the ISHOA for 3 separate terms staggered over 7+ years; - 1 was appointed to represent the residents of the Park, along with Bette Heinze, also HOA President for several terms, to help negotiate the 3 Party Settlement Agreements (City/Park Owner/Residents) before Judge Rob Taylor, Retired, in the hope that it might defuse the City's need to file an lengthy "Appeal" litigation to overcome a ruling in favor of the Park Owner regarding his attempt to "convert" the Park with a failing septic system, and a "failure to maintain" issue; The residents of the Park were each facing a $329.57 monthly space rent increase to defray the cost of the new sewer system (and resulting new streets installation) which the RRC presided over; Today, I'm speaking to you as the Legislative Representative to the Indian Springs Homeowners' Association which is a HO Board "Committee Post" responding whenever necessary regarding these kinds of matters. My appeal to you today is to withdraw the Agenda item regarding the DISSOLUTION OF THE CITY OF PALM DESERT'S RENT REVIEW (BOARD) COMMISSION (Page 7 — ORDINANCE NO. 1305) at this time for the following reasons: 1) With the most recent resignation of John Wohlmuth, the Palm Desert City Manager, and the temporary appointment of an "acting City Manager," it is questionable if this long standing Commission should be done away with at least until a new permanent City Manager can be appointed and this possible eventuality can be properly vetted without all the turmoil; 2) The fate of perhaps 1,200+/- residents in the Mobilehome Communities currently protected under "rent control" will be seriously impacted by any "rush" to do away with the Commission; 3) The "NOTICE OF RENT CONTROL ORDINANCE AMENDMENT" only one (1) copy of which was deposited with Indian Springs Mobile Home Park's Resident Manager, Ms. Linda Harrod, in the Park's Clubhouse (on or about 03/15/16) is not sufficient notification to a population of approximately 250+/- residents presently living in Indian Springs. R :8 Nv 9Z M ROd '1j id3S30 N1Vd 3:)1A30 S.)18310 I1110 a3A1303H Ms. Harrod in deference to the residency made two more copies of the Notice and posted them all in three separate locations in the Clubhouse. I speak for myself when I tell you that I am in the Clubhouse at least 6 times a week or more, and I finally discovered the "Notice" on/or about April 41h (2016), and when I read it thoroughly, 1 realized the incredible impact it could have on all "rent controlled" mobile home Parks in the City. In addition, there are residents in the Park who rarely go into the Clubhouse, are "housebound with caregivers", still work and are not around to read such "postings", and it is certainly not in the best interest of any Park Owner for his Resident Manager to disburse such an announcement to the residency as Park Owners will totally support the demise of the Rent Review Commission; Distribution should have been initiated by the City and distributed to each and every resident affected by this "huge" change to "hardship rent increase", "capital improvement increase" and other matters calling for the demise of the RRC; It is interesting to note that the aggregate value of the 190 mobile/manufactured homes just in Indian Springs it somewhere in the realm of $11.5 million dollars; Suncrest CC has somewhere around 300 mobile/manufactured homes, probably equating to $18 million dollars; Silver Spur is at least as large as Indian Springs MHP, probably in the ballpark of $9 million dollars. 4) The (subject) Amendment Notice is substantially incorrect in the statement that "In practice, the Commission rarely meets, has not considered a rent increase application in more than ten years, and has lost most of its members". Not onlv was the Commission an integral part of the "Sewer/Streets S329.57 rent increase attempt for Indian Sprinas residents from at least 2006 to "the 181h day of Februarv. 2009." when William Adams. (then) Chairman signed Resolution No. RRC-3 (coov attached) which pertains to the 3 wav Settlement Agreements between The City of Palm Desert, The Park Owner, and the Homeowners Association which was "attested" to by: Frankie Riddle. Secretary Rent Review Commission. and "APPROVED AS TO FORM" b_v then City Attornev. David I. Erwin. 5) The language of the proposed "ordinance amendment" is vague and ambiguous. It was most certainly difficult for most of us to even read in 10pt type, but I persevered; In conclusion, there are over 50,000 residents in the City of Palm Desert. Most certainly, we could find seven (7) unbiased individuals who would serve on this most important Rent Review Commission, many of whom would serve for free; there are a substantial number of "older" mobile home residents in the City that would have no voice, if this Commission is abandoned; and, with the uncertainty of replacing Mr. Wohlmuth quickly, it seems most inappropriate to "shake the tree," as it were, without some kind of "forum" for resident input regarding this eventuality. Please go slowly with this "quest". It is, truly, not a good or well thought out idea, most especially under present day circumstances. Respectfully submitted, Ml+il� 5e� COPIES — CITY COUNCIL MEMBERS, CITY ATTORNEY RESOLUTION NO. RRC-3 A RESOLUTION OF THE PALM DESERT RENT REVIEW COMMISSION APPROVING THE STIPULATED AGREEMENT AND ORDER OF THE RENT REVIEW COMMISSION REGARDING INDIAN SPRINGS MOBILE HOME PARK WHEREAS, on February 18, 2009, the Palm Desert Rent Review Commission ("Commission") considered and approved, by unanimous vote and subject to the modifications and conditions described below, the Stipulated Agreement and Order of the Rent Review Commission ("Order") proposed by the Indian Springs Mobile Home Park ("Park') and the Indian Springs Mobile Home Owners Association ("Association") and consented to by 89% of the residents of the Park ('Residents to resolve the issues between the Park and the Residents that are delineated in the Order, and WHEREAS, approval of the Order was conditioned on: (1) revision of the proposed Order to conform to changes agreed to by the Parties and read into the record of the hearing by Judge Taylor, and (2) execution by the Park, Association, and City of Palm Desert of Three Related Settlement Agreements prior to the close of business on February 27, 2009; and WHEREAS, the specified revisions have been made and agreed to by the Parties and are incorporated into the final Order attached to this Resolution; and the Three Related Settlement Agreements have been executed and submitted to the City prior to the close of business on February 27, 2009; NOW, THEREFORE, IT IS RESOLVED by the Rent Review Commission of the City of Palm Desert, California as follows: That the Stipulation attached hereto is approved as the Final and Binding Order of the Rent Review Commission as to all matters set forth in the Stipulation. PASSED, APPROVED, AND ADOPTED this 18" day of February, 2009, by the Rent Review Board of the City of Palm Desert, California, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN ADAMS, KOFFLER, TORSNEY, WERCHICK NONE NONE NONE ATTEST: Franitl�RRiddle, Secretary Rent Review Commission APPROVED AS TO FORM: David J. Erwi , City Attorney RMrUH\RRAROREAVES\305G29.1 illiam Adams, Ch it an Rent Review Co#ni ion 1 t. N 0 C" D..� 7t? � Own CF% N �� rn INC W T N ? n T CITY OF PALM DESERT SPECIAL PROGRAMS DEPARTMENT STAFF REPORT REQUEST: CONTINUE THE ADOPTION OF ORDINANCE NO. 1305 AMENDING CHAPTER 9.50 OF THE PALM DESERT MUNICIPAL CODE, TO INCLUDE ELIMINATION OF THE RENT REVIEW BOARD AND IMPLEMENTATION OF THE CITY MANAGER/HEARING OFFICER REVIEW PROCESS TO A DATE UNCERTAIN SUBMITTED BY: Robert W. Hargreaves, City Attorney Frankie Riddle, Director of Special Programs DATE: May 12, 2016 CONTENTS: None Recommendation By Minute Motion, continue proposed Rent Control Ordinance Amendment to a date uncertain to allow City Attorney and City Staff to continue dialogue with mobile home park residents and park owners to address Rent Control related matters. Strateuic Plan Obiective [ Executive Summary On Friday, April 29, 2016, City Attorney and City Staff conducted a community meeting to hear from mobile home park residents and park owners subject to Rent Control. Based on feedback received, there were two primary concerns: 1) Residents were under the impression that the City was proposing to eliminate rent control; 2) residents were generally not in favor of a one -person review and approval process. Staff educated residents that the recommendation did not involve the elimination of rent control and noted the issues the City currently faces with regard to obtaining Rent Control Board Members that are familiar and knowledgeable with rent control as well as the inherent continuous and litigious nature of same. Based on resident feedback and the continued need for the City to handle rent control related matters, staff indicated that its recommendation to Council would be to continue the matter to allow the City to move forward with community dialogue with residents and park owners to address proposed amendments to Rent Control review procedures and processes. Request to Continue Amended Rent Control Ordinance No. 1305 May 12, 2016 Page 2 Background At its meeting of Thursday, April 14, 2016, City Council continued this item to allow staff to conduct a community meeting to hear from residents and park owners as well as discuss recommended changes to the Rent Control Ordinance. Note: The primary change within the Amended Rent Control Ordinance was the elimination of the Rent Review Board and implementation of the City Manager/Hearing Officer review process. The Rent Review Board Members were contacted in regards to the proposed change relative to the elimination of the Board and expressed their support of said change. A notice of the April 29 Community Meeting was prepared and provided by the City to the park management of each mobile home park who in turn hand delivered the notice to each resident within Indian Springs, Silver Spur, Palm Desert Mobile Estates, and Suncrest. Fiscal Analvsis Approval of this item should have no negative impact to the City's General Fund. Submitted by: F nkie Riddle Direc or of Special Programs Reviewed: Rudy Acosta Assistant City Manager Approved: t, t n McCarthy Inteiim City Manager Robert W4rr es U City Attorney