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HomeMy WebLinkAboutRENT REVIEW COMMISSION - MINUTES FEB 1996 - OCT 2007MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING FRIDAY, FEBRUARY 23, 1996 10:00 A.M. CIVIC CENTER COUNCIL CHAMBER *********************************************** I. CALL TO ORDER 9y 9yW OxlmCnt0�'JCFC+JC�TJ �yj fyy Chairman Coates convened the meeting at 10:20 a.m. HC�J COEn W H N- � y z „ „ ("�rdfCy [+77d �' o " N H o b H. PLEDGE OF ALLEGIANCE tj tj ;< �j Chairman Coates gave the Pledge of Allegiance. w � III. ROLL CALL m H Present: �" rt 0 z Commissioner Jim Ainsworth, *alternate y M Commissioner Henry M. Armstrong �� 1; H Chairman Robert Coates ,< d Commissioner McCaughey ri N (D Absent: n ; Commissioner William Adams* x Commissioner Ulrich McNulty o Also Present: ro Rick Erwood, Hearing Officer 0. Marshall Rudolph, Asst. City Attorney Ray L. Janes, Management Analyst II Lorena Armenta, Senior Office Assistant IV. NEW BUSINESS A. Annual Selection of New Chairman and Vice Chairman Mr. Janes announced to the Commission that the new term will be fulfilled in August. Then in September, there will be another election for a new chairman and vice chairman. This will allow this Commission to be on cycle with all other City committees and commissions.. Also, Commissioner Ulrich McNulty called him and said he would like to be nominated for the position of Chairman. Commissioner Armstrong nominated Commissioner Coates with Commissioner McCaughey seconding the nomination. RENT REVIEW COM'i." "SION MINUTES FEBRUARY 23, 1996 PAGE 2 Chairman Coates nominated Commissioner McNulty. A motion was made by Commissioner Armstrong, seconded by Commissioner McCaughey, to re-elect Commissioner Robert Coates as the new Chairman of the Rent Review Commission to be fulfilled until August 1996. Motion carried unanimously with Commissioner Ainsworth voting no. Chairman Coates opened up the discussion for selection of Vice Chairman. A motion was made by Commissioner Armstrong, seconded by Chairman Coates, to elect Commissioner Ulrich McNulty as the new Vice Chairman of the Rent Review Commission to be fulfilled until August 1996. Motion carried unanimously. ] Chairman Coates asked Mr. Janes to give him a review of Anthony Rodriguez's letter dated February 22, 1996. Mr. Janes referred ' the question to Attorney Marshall Rudolph, who has had the opportunity to review the letter, and asked that he give a report. Attorney Rudolph asked the Commission to review Mr. Rodriguez's letter dated February 22, 1996. The letter arrived at this office yesterday, late afternoon via fax machine. Mr. Rodriguez represents the park owner for Silver Spur Mobile Manor. Mr. Rodriguez is expressing concerns on some of the provisions of the draft ordinance. Mr. Rodriguez feels it conflicts with the provision to the state mobile home laws. In Attorney Rudolph's personal opinion, the draft ordinance is just fine. He offered to address each point in the letter briefly. The first objection of Mr. Rodriguez's letter under Section 2. 9.50.050/Improner Repair Maintenance. Mr. Rodriguez is saying that this imposes a maintenance obligation and intrudes on state law which allows tenants to appeal improper park maintenance. But Attorney Rudolph disagrees with that characterization of the ordinance. Rather, he feels the ordinance simply indicates that when maintenance costs have been needlessly exacerbated through unnecessarily deferred maintenance, that fact is relevant information for the Board to consider when reviewing a hardship rent petition. Attorney Rudolph does not feel such a provision conflicts with state law. The second concern of Mr. Rodriguez's letter is that the ordinance implies that newly constructed spaces are subject to rent regulation even though they are exempt from local rent control under state law. Mr. Rudolph disagrees and points out that in all fairness, the ordinance must be viewed in.the context of the entire city code chapter regarding rent review, which RENT REVIEW CO4.:"'SION �� MINUTES FEBRUARY 23, 1996 PAGE 3 it amends. That chapter clearly provides that any tenancy exempt under state law is also exempt from city rent regulations. So the newly constructed spaces are exempt under state law, and under the city's rent control laws. The third concern from Mr. Rodriguez's letter is the cap on rent increases. The provision Mr. Rodriguez refers to provides a cushion for a rent increase in a given year; it cannot exceed more than 6%, unless the Rent Review Board allows it and the excess is carried forward. Mr. Rodriguez points out that you can't have an absolute cap on rent increase. Attorney Rudolph feels this is not an "absolute" cap since an increase of more than 6% is allowed, and it must be carried forward. The ordinance expressly states that an increase greater than even 6% in a year can be permitted by the Rent Review Board recognizing the fact that circumstances may arise where a greater than 6% increase is necessary or appropriate. In addressing the fourth concern from Mr. Rodriguez's letter regarding "Use of Most Recent CPI" on hardship rent petitions. Mr. Rudolph says that ironically, this was put into the draft ordinance for the same reason that Mr. Rodriguez's is objecting to because hardship petitions sometimes take many months to work their way through the process, if not years. During that time, the CPI can change considerably. If the petition and decision is based on old CPI data that was in effect when the petition was first filed, the result may not be accurate by the time the petition actually gets to the Rent Review Board. It seems appropriate to strive for accuracy in rent increases by using the recent data. That is what the draft ordinance is intended to do. Mr. Rodriguez would prefer to give notice of a proposed rent increase at the time the petition is filed, so that the 90-day notice period will have expired by the time a petition was granted. Attorney Rudolph feels the benefit of using the most current data outweighs any logistical inconvenience to the park owners resulting from complying with the state law 90-day rent increase notice period. Finally, Mr. Rodriguez mentions his satisfaction that the ordinance now allows banking of CPI rent increases. Attorney Rudolph expressed a lot of confusion exists regarding the meaning of the word "banking." He pointed out that there is no legal definition of "banking" rent increases. The term suggests a variety of possible interpretations. The ordinance clarifies that changes in CPI are always to be measured from the base year, as opposed to being measured only over the last 12 months. Thus, if a park owner does not impose the maximum rent in a given year, it does not affect his ability to charge the maximum allowable rent in a subsequent year. If that is "banking," then yes, the ordinance allows it and, arguably has always allowed it. Having said that, it is important to note that in no event can a park owner go back and collect rent that could have been charged but was not -- that is, all rent increases are prospective in effect only. The ordinance makes that clear. RENT REVIEW COM:.:_:'SION ` - MINUTES FEBRUARY 23, 1996 PAGE 4 Chairman Coates stated he recently heard on the radio the County of Riverside had adopted a rent review ordinance with respect to mobile home parks. He has not had the opportunity to read the ordinance, but he knows it exists. The County's ordinance has some similar features and issues that this Commission is trying to address. It would give him peace of mind, if the County of Riverside had some rules that were adaptable to all the cities in the County of Riverside. Chairman Coates would like to know if it's possible to institute a study and see if there is a way to conform the City of Palm Desert's Rent Review Ordinance to the County's ordinance. Attorney Rudolph responded that Best, Best & Krieger participated in the County of Riverside's draft ordinance. Their offices were contacted because of their experience with the Palm Desert Rent Review Ordinance and working with other local cities rent control ordinances. The County's ordinance was modeled with the City of Palm Desert's ordinance. The ordinances are very similar, although they are different in a few respects. For example, the County ordinance allows permissive rent increases equal to 100% of the increase in CPI and also use arbitration. Chairman Coates stated the County's ordinance has an automatic cost of living adjustment on an annual basis; if this is correct, then it would eliminate many of the objections and letters from lawyers reguesting a hardship rent increase. Attorney Rudolph said the County's ordinance is actually the same as the City's ordinance with respect to the permissive adjustment that can be made by park owners without filing a hardship rent petition. Under the County's ordinance there are two processes: (1) there is an annual permissive adjustment that can be made by park owners based on CPI changes; (2) And a process for seeking a hardship rent increase. Chairman Coates asked how does the County process compare to the City's process. Attorney Rudolph said the process is basically the same. There are permissive adjustments that can be made based strictly on changes of the CPI without coming to the board. This ordinance is to clarify exactly how the permissive adjustments are calculated. If for some reason, park owners feel that annual permissive adjustment are still not producing a fair return on their property, then they can petition the board for a hardship rent increase. The tenants also have a right to come before the board for hardship or an adjustment for consideration. Chairman Coates asked when addressing the usage of the word "banking," with an automatic cost of living adjustment there would be no need for banking. Attorney Rudolph stated automatic and permissive are sort of synonymous terms. Automatic is used by people sometimes to refer to rent increase that can be imposed without coming to the board for permission; park owners can implement it on their own every year based on changes in the CPI. RENT REVIEW COriLt,.� SION `- ' %MINUTES FEBRUARY 23, 1996 PAGE 5 Chairman Coates asked what happens if the CPI doesn't change. Attorney Rudolph replied, if the CPI doesn't change then there is no increase over the maximum amount of rent that could have been charged the previous year. That would be true for the County's ordinance and for the City's ordinance. We are always measuring back to base year for the purposes of figuring out changes in the CPI. Thus, if every year a park owner always charged the maximum allowable rent and CPI stayed flat for a while, the park owner would be stuck with that amount until the CPI changed again. In those scenarios, the park owner could not increase the rent while the CPI level is flat. Chairman Coates asked if there is still a. provision for hardship rent increases. Is there a time limit that a park owner can impose these rent increases? And if so, in the time limit it lapses, is there something in the rent ordinance that says you can't accept it? Attorney Rudolph responded this ordinance addresses specifically how permissive rent increases are calculated and how they are measured. There are two potential ways of addressing this issue that can be found in local mobilehome ordinances throughout the state: One is to say the base year rent when the ordinance comes into existence was unregulated and is presumed to have produced a fair return on property. That presumption can be rebutted, but the maximum amount of rent you're allowed to charge at any given time is based on a percentage (such as 75%) of how much the CPI has increased from the base year's CPI. You're always looking back to base year. For example, if a park owner decided not to charge the maximum rent or maybe only a few years just let the rent stay at a particular level, when they ultimately decide to charge the maximum rent they would still be comparing today's CPI to back to the base year CPI. The park owner does not get penalized for not charging the maximum rent during those years but that doesn't mean they can go back and retroactively collect the rent. The other school of thought, which is the way some other city ordinances do it, the base year is only significant as a starting point. After that, the only thing that will be looked at is how the CPI has changed the past twelve months. If the CPI has increased during that period, then the rent can be raised; if the rent is not raised, it is lost. The park owner will have to wait until the next year and, once again, can only look back twelve months. It's either use it or lose it. For that reason, however, it forces the park owner to take the maximum allowed rent increase each year. Chairman Coates asked what happens if the CPI goes down. Attorney Rudolph said if the CPI goes down, then the maximum allowable rent decreases, which can be sought by a tenant. Chairman Coates asked what is the process for a tenant to apply for a decrease in rent. Attorney Rudolph replied that first, the park owner should do it automatically which he is required under the ordinance. If the ordinance is not followed, then the tenant has the right to bring a petition to the board to make a decision as to whether the park owner is violating RENT REVIEW CON_:._JSION MINUTES FEBRUARY 23, 1996 PAGE 6 the ordinance. If the Board finds the park owner was wrong, or in violation of the ordinance, the City can then prosecute. It could seek a civil injunction, or seek criminal sanction of some sort. Chairman Coats asked what is the rationale of the County of Riverside using 100% of the CPI versus the City's 75%. Attorney Rudolph said it is strictly a policy oriented, legislative decision. Seventy-five percent (75%) is not a magic number, although it is commonly used in ordinances in this area. It probably reflects the fact that the CPI used by the City relates to certain workers for the Los Angeles, Long Beach and Anaheim area. This is a different area. They don't have measurements of CPI for every little area in the country. Perhaps at the time this was done, it felt that this was the nearest regularly reported one they wanted to use for this area. They may have felt that the change of cost of living here in this area does not increase as dramatically or is not as high on average as it is in Los Angeles or Long Beach. The County of Riverside is using the same CPI or maybe using a different CPI, but in their view 100% of the CPI is appropriate. Some park owners might agree that 100% of the CPI is the best measurement. On the other hand, park tenants might argue that it should be something like 60%. A line has to be drawn somewhere and that just becomes a policy decision for the Board of Supervisors or in this case the City Council. Chairman Coates asked if the speaker particularly has a view point on whether it sees 75% or 100% of the CPI. Attorney Rudolph replied no. The ordinance has used 75% CPI and a majority of other local cities use the same percentage. There is a certain degree of reliance and acceptance of this figure. When the ordinance was being drafted, the one thing they did not want to change was the CPI figure. No one has had any problem with this. The only issue being addressed is how far back to go. This decision would have to be referred to the City Council. Chairman Coates asked the other commissioners if they had any questions. Commissioner Armstrong asked if there was anyone present representing Attorney Anthony Rodriguez or the park owner. No one replied. Commissioner Armstrong asked what was the reason for inserting the word "unnecessarily" under Section 2. Attorney Rudolph said there was discussion by the Commission and they felt that there could be circumstances under which deferred maintenance would be appropriate. The original draft ordinance did not have that word. Chairman Coates stated the Commission has reviewed the proposed revisions then proceeded by asking the commissioners for their comments and input. RENT REVIEW COM_.—=;SION MINUTES FEBRUARY 23, 1996 PAGE 7 Commissioner McCaughey stated the Commission is agreeing with Attorney Rudolph statements. This Commission is trying to clarify this ordinance only. Attorney Rudolph stated attorney's will always come up with arguments; It just depends on who they're representing. In this case, Mr. Rodriguez has his own arguments for the park owner. If Mr. Rodriguez was representing the tenants, he would come up with other arguments. This is simply Mr. Rodriguez's opinion. Attorney Rudolph stated he was the only person who had the opportunity to review the letter and these were strictly his opinions in regards to . Anthony Rodriguez's letter. Again, the letter arrived yesterday late in the afternoon via the fax machine. If for some reason, Doug Philips or Dave Erwin disagree with this view of the ordinance, some language can be inserted if necessary to clarify that this Commission is not intruding or trying to regulate any area that is covered by the state law. If the Commission wants to cover this possibility, the Commission could approve it subject to non -substantive revisions by the City Attorney that they may feel are necessary to clarify or render it consistently with state law. That way, minor clarifying changes could be inserted without having to schedule another Board meeting. Chairman Coates asked about the last paragraph on Mr. Rodriguez's letter stating, "However, in order to avoid future litigation my client again requests the Board to carefully consider the above comments to the proposed amendments." Chairman Coates stated he believes this Commission has done that in addressing Mr. Rodriguez's letter. The Commission has given its full consideration. Chairman Coates asked for the. Commissions vote on the proposed revisions. It was moved by Commissioner Armstrong, seconded by Commissioner McCaughey, that the Rent Review Commission accept the proposed ordinance as submitted with the opportunity that the secretary insert Mr. Rudolph's comments. "If for some reason, Doug Phillips or Dave Erwin disagree with this, some language can be inserted if necessary to clarify that this Commission is not intruding or trying to regulate in a area that is covered by the state law. If the Commission wants to cover this possibility, if it decides to approve the draft ordinance, the Commission could approve it subject to non -substantive revisions that may be necessary to clarify or render it consistent with state law." Motion carried unanimously. V. ORAL COMMUNICATIONS Chairman Coates asked the audience for their remarks. There was none. RENT REVIEW COML,,_]_SION ` MINUTES FEBRUARY 23, 1996 PAGE 8 - VI. -ADJOURNMENT It was moved by Chairman Coates, seconded by Commissioner Armstrong to adjourn the Rent Review Commission meeting at 10:48 a.m. RESPECTFULLY SUBMITTED, s LORENA .ARMENTA SENIOR OFFICE ASSISTANT PALM DESERT RENT REVIEW STUDY SESSION THURSDAY, APRIL 3,1997 6:00 P.M. CIVIC CENTER COUNCIL CHAMBER I. CALL TO ORDER Chairman Coates called the Rent Review Commission meeting to order at 6:00 p.m. to order. H. PLEDGE OF ALLEGIANCE Chairman Coates invocated the Pledge of Allegiance. to, �Cnrn�� III. ROLL CALL w H H ra 0 in ftj HHH•• •• Ms. Armenta called roll call of the Rent Review Commission. H d - Present: Commissioner Bill Adams Commissioner Henry Armstrong Commissioner Robert Coates Commissioner James McCaughey Commissioner Uhich McNulty Others Present: Rick Erwood, Evidentiary Hearing Officer Doug Phillips, Deputy City Attorney Ray L. Janes, Management Analyst II Lorena Armenta, Senior Office Assistant Kurt Delsack, Esq. Anthony Rodriguez, Esq. IV. NEW BUSINESS 0� F'- r m , r7 rl1 OH H eOn0K 02 0 H r n H H 7.. 00 •• �z z0 A. Discuss Issues Applicable to the Silver Spur Mobile Manor 1995 Petition for Hardship Rent Increase Coates: In consideration of the new business, we have to discuss procedural issues applicable to the Silver Spur Mobile Manor, 1995 Petition for Hardship Rent Increase. Chairman Coates asked Mr. Janes to please take over the meeting. Mr. Janes then asked the City Deputy Attorney Phillips to address Item A under new business. M MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Phillips: Yes. Mr. Chairman and members of the Commission we are here tonight to have a study session to brief the Commission on two items that will be coming before you on the 9th of April for hearing purposes. It's been sometime since we met, and we though it would be a good idea to at least acquaint with the procedural of where we are. Where is Item A? Is that the Petition for Rent Hardship or the Petition for Interpretation? Janes: That is the "Procedural Issues Applicable to the Silver Spur Mobile Manor, 1995 Petition for Hardship Rent Increase." Phillips: Okay. There is some history to this Petition for Hardship. You may recall that the petition was filed a number of years ago. And the applicant is the park owner of Silver Spur Mobile Manor. And he was requesting what is termed as discretionary hardship rent increase under the Palm Desert Mobilehome Guidelines Section 10I.B. The matter was referred to our Evidentiary Hearing Officer, Rick Erwood who read the findings and decision, and recommendations. That came before this Board following with an appeal. After this body made its decision, I believe basically affirming Mr. Erwood `s finding and recommendation to deny the petition, the park owner filed a Petition for Writ of Mandate in the Superior Court. And the matter came before the Superior Court Judge Lawrence Fry for a hearing on November 15, 1996. And at that hearing, the court remanded the matter back to this body for one purpose, and that was for this body to render findings which would bridge the gap between the evidence, adduced by your Hearing Officer, and the ultimate conclusion that was reached which was to deny the petition for discretionary rent increase. I want to make it clear that the remand is based on the record that is currently exists. This body and the Hearing Officer have been told by the court not to adduce, not to take any new evidence either from folks in the audience, none from me, none from our Hearing Officer, and actually no new additional evidence from anybody else. The sole purpose of the remand is based on the record that you now have in front of you or will be made available to you for this Board to adopt findings., You have two choices in this respect: (And you will be asked on the 9th of April to make a choice one way or the other.) Either you can decide the matter for yourself right out of the box, and prepare your own findings based on the evidence. Or you can remand the matter back to your Hearing Officer for that purpose; for him to prepare his recommendation as to what those findings should be, and if I'm not mistaken, his decision and findings will then come back to this Board for ultimate approval. 2 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 That's where we stand tonight. I know that we have one attorney here, representing the park owner. The attorney who filed, on behalf of the park owner, the Petition for Hardship Rent Increase. His name is Mr. Anthony Rodriguez. He is present. Our Evidentiary Hearing Officer, Rick Erwood is present as well. Perhaps the Board would like to entertain comments from either one of those folks. You should know that based on the Superior Court order and as contained in the final order that is in your packet, that we are not allowed to coach you or give you discretionary consultation as to what those findings should be. Coates: I have a question. And the question is basically, the Board/Commission made its decision and now we are being told by the court to reconsider this same decision on the same information? Phillips: Right. Coates: It seems like an exercise of futility. Phillips: Well it's not. Because of this. What the court has told us is, when you make decision such as this one, which is based on facts. All right. That you adduce the facts, and that's the basis of the decisions, right? And based on those facts, you make certain findings, based on those facts. Then those findings lead you to a conclusion. What the judge is saying, take look at the evidence please again, same evidence. And this time do what you didn't do before. Adopt findings and bridge the gap between the evidence and the ultimate conclusion. The court did not say that you had to come to the same conclusion that you came to before. Nor the court could do that necessarily. What the court wants for the court's own guidance, as this matter will be back to court as soon as this Board makes its decision. Counsel and I will contact the court and arrange another hearing. The Petition for Writ of Mandate is still out there. So what we need to do is either yourself or by reference to our Hearing Officer, is to provide the court with findings. Coates: Pardon my stupidity. But, I really think I'm kind of dense because I though that is what we did the first time. Phillips: The court disagrees. The court felt that he wanted more information. Let me do this. I am going to quote you from the transcript of the hearing. This might help. MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 McNulty: Are you talking about the hearing in front of Judge Fry where they? Phillips: Yes. The hearing in front of Judge Fry. "Mr. Rodriguez, I think I know where I am on this case, and it has helped to me to talk to the two of you, is that obviously I am to embarrased to tell you that this court does not have the administrative record. I will be looking into why I don't and then into what happened. I would like to blame it on the move but I don't know. The court as you may know moved this past Fall. Anyway, I think the administrative record is obviously important to this case, but also I think it would be important for them, (that's this Board) to articulate how they arrived at their conclusion that your client is getting a fair rate on his return. I am inclined to remand to them to clarify their position as to how they determined that the petitioner got a fair rate in return, and what facts they based that opinion upon." This is what he wants. McNulty: Its sound like to me, Doug, that Judge Fry did not have the administrative record, did not have a transcript of what this Board discussed nor the conclusion that this Board reached. Yet he remanded it back to us to bridge the gap as to what facts we used to reach to the conclusion that we could draw. Somehow the Judge did that, but he did it. I need to know of what the administrative record consist of. Phillips: The administrative record consist of the Petition for Discretionary Hardship Rent Increase and all the exhibit thereto, the Amended Petition for Discretionary Hardship Increase and all of the exhibits thereto. The various briefs filed by counsel for the homeowners', as well as.the attorney for park, the transcript of the hearing before your, the findings and recommendation of your Hearing Officer, the briefs that were filed by the attorneys for and against the Hearing Officer decision, and finally the transcript of the hearing before this Board. McNulty: And in cubic feet, how much is that? Phillips: Several. Several trees. Armstrong: Mr. Chairman, let me test your memory or two. The guts of the decision on page 2 in Judge Fry's thing. "The court hereby remands this matter to the Palm. Desert Rent Review Board to provide more specific findings regarding the evidence the Board relied on in calculating the tJ MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 parkowner's investment in the property, the parkowner's return on investment and the formula." If he remembers right, in Mr. Erwood in his findings, he tried to trace down what the park owner did with the money that they got from refinancing the park midway through this thing. The park owner would never,tell him and as far as he remembers, the park owner never showed up at any of the hearings here. He never told us what he did with the money. I think that was one of the principles. It was due to lack of evidence that this Board had. So this Board went along with Mr. Erwood's recommendation because I least that's what he did. What do you remember about this, Mr. Erwood? Erwood: That is basically correct. If I can find my hardship rent... There was a big question about the property being bought for $2 million dollars in which Mr. Bedig who I believe is now the new park owner by himself. He put up $60 thousand dollars when he was involved in the partnership, bought the property, a number of years elapsed and the property was refinanced for $4 million dollars. The money that was received in that refinancing went to pay-off the members of the partnership. The testimony was they received the money that they initially put into it. And none of the refinance money was traceable to the park. That was one of the issues in respect to whether or not they were getting a fair return on their investment because in a sense, they received back the money they initially put into it. The park was of course, now encumbered by a bigger loan, but increased in value, had money in their pocket, and still had the property that was producing income. This was one of the troubling issues in which there was a lot of testimony in respect to that. In my first finding, I believe that in the ordinance there is wording to the effect the discretionary hardship rent increase petition and procedure can be used when it's showing, what I would call a normal or non -discretionary hardship rent petition, produces or does not produces a fair rate of return on the property. What you have to do is to visualize in this case. In this case, they did not produce any evidence saying, in other words, they did not fill -out and do the calculations that said, under normal hardship rent increase this is what we would get. And under, and we are saying that is why it is insufficient. That's why we need this discretionary rent increase. What they did was to produce expert testimony saying the owner is not receiving a fair return on his property based on different factors. I also recall that the expert was Dr. Fabrikant and he estimates of what produces a fair rate return range from $62 rent increase to $88. I went into that in my report about this. I'm not sure if that necessarily answers your question. Basically, the burden is t MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 on the petitioner by preponderance of the evidence to convince me to recommend and for you to make the finding that are based upon the evidence that they are not getting a fair rate of return and should grant a discretionary hardship rent increase. In a short hand method, failure of proof with respect to those issues. Coates: The way I understand, we are not able to determine a fair rate of return on the investment because we can't pinned down exactly what he has invested. Erwood: Are we talking about the money that was pulled out of the property? Coates: Yes. Erwood: That is a troubling issue. Both sides argued about this. This was troubling for me also. How do you figure out when you're able to take that money out? How do you figure this into this calculation with respect to how much they should now be making? This was a problem. McCaughey: I have one question, going back to Mr. Phillips. You said, we have two choices here, one is to make our own findings here and make a decision ourselves. And the second option would be to remand the matter to our Evidentiary Hearing Officer. My understanding from reading through this, we already have the Hearing Officer's findings. Correct? Phillips: The court indicated he wanted more. More. The Board adopted our Hearing Officer's findings and recommendation. What the court has done this the judge wants more information. My recommendation would be to refer back to the Hearing Officer to look into it. As I've mentioned before, if there are any problems getting the administrative record, I have offered to provide the administrative record copy to this Board. I have a copy of this in my office. Will have it delivered to the City Hall and available for review for the Board or the Evidentiary Hearing Officer. Armstrong: It is my understanding Mr. Erwood, if we did refer it back to you, you did not collect further evidence? Phillips: That is correct. MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Armstrong: I don't ever remember seeing any return on investment figures for the park. And I read the records pretty good. Erwood: There were two different prongs in the petitioner's case, can't remember the expert's name, but they did a rent survey of the other parks in the area. Compared the amenities provided by the park in question with the other ones in the surrounding area. By this rental survey, it was calculated that the rents were insufficient by taking the average rent of the others. Second, Dr. Fabrikant, he was primarily focused on the return that could be achieved if the park owner had taken its money and invested in real estate investment trust. He talked about a 12% return. But he had different theories in which he made these different calculations. Which caused of course the spread of proposed rent increases, I believe of 62 to 88. If my memory's correct. Armstrong: Did we ever actually know what Mr. Bedig investment return had on this place? Erwood: In my first proposed findings there was insufficient evidence to overcome the presumption that the maximum rent defined in the ordinance was not providing a fair rate of return. McNulty: Procedurally speaking, if were to choose to refer this back to Mr. Erwood, would this be done at this evening's study session? Phillips: No: McNulty: Would it be done on April 9? Phillips: Yes. McNulty: When is our court date? Phillips: We don't have one. It all depends when you come up with your decision. Excuse me just a moment. Mr. Phillips then asks Mr. Rodriguez if he recalls about a court date. Rodriguez: ... It is 90 days from February 21. This Board has to make a decision. 7 r MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Phillips: We have a time frame. The process has to be done 90 days from February 20. At the point, we will set a hearing date and may need to have another briefing. I would imagine we would be back in court in 30 - 40 to 65 days. McNulty: So our decision needs to be completed sometime prior to April 20? Phillips: Yes. Adams: I'm a little disturbed about the language in Judge Fry's order. "In addition, neither the Board or the shall consult with the City Attorney or any other person before rendering its decision. The decision shall be based solely on the evidence and argument previously submitted by the parties prior to the Board's decision of December 2, 1994." That bothers me a little bit. Specifically, I would like to ask if this Board either by affirming some recommendation that may be by Mr. Erwood or by arriving at some separate findings or decision of our own, if we come to a decision do we have to write down the findings? I spent 22 years as an attorney for public agencies and I always prepared the findings for the Board that I was representing. This seems to say that you can't prepare the findings? Phillips: That is the way it reads. Adams: I find this highly unusual. McCaughey: If we remand this back to Mr. Erwood, if he doesn't look at any new evidence, and just goes with his current conclusion, is it back on our lap again for this Board to make a decision? Adams: I feel he would actually have to come up with further findings to refer back to us? Phillips: Yes. Adams: How is this Board to make a decision if there was no.evidence? How do you make a finding? If there is no evidence, how do you make a finding? Lack of evidence. Coates: According to page 2 of Judge Fry's remand order, and I am reading, "Accordingly, the Court here by remands this matter to the Palm Desert Rent MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL, 3,1997 Review Board to provide more specific findings regarding the evidence that the Board relied on calculating the park owner's investment and the property. The park owner's return on investment, and the formula if any the board used in determining the park owner's rate of return was fair." What we seem to be saying is, we couldn't calculate any formula because we couldn't come up with any hard information as to what the investment was. How do you calculate a return on an investment? A fair of return or an unfair rate of return, if you don't know what the investment is. If we remand this to Mr. Erwood perhaps he could articulate this, for the Board. Phillips: That is an idea. For him to articulate the findings to bridge the gap. These will be the procedural issues facing you on April 9. At the point, you as a Board will make a decision whether to take this upon yourself or to remand to Mr. Erwood. That's all I have with respect to the first item. B. Discuss Procedural Issues Applicable to the 1996 Petition for Interpretation and Petition for Determination Coates: Let's go on to the second item. Phillips: In addressing the second item, it deals with the same park, procedural it is a different form of petition and it is in a different place procedurally. This petition is known as Petition for Interpretation. In this case, it is a petition filed by the tenants. And they have requested a detennination from this Board as to whether or not rents would be rolled back to the level as they existed in 1988. Which was the date on which a five year settlement agreement had been entered into. The Petition for Interpretation went to your Hearing Officer over a number of hearings over a number of days. Erwood: On the Petition of Interpretation, it was only just a one day hearing. Phillips: Took testimony or arguments? Erwood: Most of the items that had been produced in the prior hearing were by stipulation, introduced at the Petition for Interpretation, a stipulation with respects to pleadings which included some documentation and some depositions, things of that nature. With respect to whether or not this issue had been addressed before or ruled upon before, it was kind of a major issue. At least as the respondent was claiming that this issue came before the Board, MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 and we talked about this whether you go back to this. It was offered as a defense in the Petition for Discretionary Hardship Rent Increase. And then they filed this Petition for Interpretation and we had this argument, and we stipulated pretty much to the evidence. The parties stipulated to the evidence that I could consider this. There was no new testimony. But, there was obviously some different arguments that were presented. Phillips: Where we are now is the Evidentiary Hearing Officer rendered his decision on February 10, and now the petitioner who is represented by Mr. Delsack, (who is now with us) filed an appeal. Now the Petition for Interpretation is back before the Board for consideration. Under the ordinance again, .the Board has a choice. First of all, the Board does not hear any new evidence. The Board on April 9 will hear oral arguments, a report from your Evidentiary Hearing Officer, oral arguments from both sides counsel, and then the Board will make a decision. Under the ordinance, the Board has three options: Grant the appeal and determine that the Evidentiary Hearing Officer's decision should not be followed; 2. Remand the matter back to the Evidentiary Hearing Officer for further work or to modify the decision of the Evidentiary Hearing Officer; 3. And to accept, to agree with and to affirm the Evidentiary Hearing Officer's decision. Mr. Phillips asks the Evidentiary Hearing Officer if he has any questions or would like to add anything. Erwood: I think that is correct. This is like the ... My recommendation has to be ruled on by the Commission. Because my recommendation is just that. It is only a recommendation. Adams: Can I ask Rick? I guess I'm a little bothered by your proposed findings with the petition being frivolous. Could you maybe give me more info why you made that finding? Is it just the fact that the question is being raised again? Is that the basis for claim of frivolity? 10 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Erwood: Yes, that is correct. This issue was brought up in the prior hearing. At the time, I believe it was. It was indicated, I think there was a Commission finding about the rents not be rolled back to 1988. Which it was how they wanted the Petition for Interpretation wanted to calculate the rents from taking back to the date prior to the agreement applying the CPI all the way up. And saying that should be the new rent. Rather than at the end of the agreement, the rent that was being imposed continues on, and has a CPI added to it and hardship rent increase, and things of that nature. My position as the Evidentiary Hearing Officer when that evidence was presented, if I found out that the argument prevailed I had the power to recommend to this Commission at that time that the rents be established at the 1988 level, and would apply to the CPI increase up to the date the agreement would lapse. Now, I believe the petitioner basically is saying, "No, I didn't have the power to make that recommendation and my position is supported in the ordinance, but it is open for interpretation." If what the petitioner is saying is true, even if I was convinced at the hearing that the respondent's position was well taken. That is, the homeowners the rents should be rolled back, I would be powerless to do anything. They would have to then after I denied the discretionary hardship rent increase, they would have to pay a filing fee to the City, request a Petition for Interpretation and bring forward that. To me, I though this was a needless step in the process since this was fully litigated, and no new evidence presented at the Petition for Interpretation. It was submitted on evidence that had been produced at the prior hearing. Adams: As an attorney, if a point is to be made, and I put myself in that position. And I was not on the Board at that time, I can run wild I guess. Phillips: Don't do that. Adams: You made a decision that denied the hardship rent increase. That is not a decision that I, as an attorney, representing a group of tenants would want to challenge. I would want that position to stand. In there, their was also a decision there should not be a roll back. I'm not sure. I'm not sure in my mind from what I've read here that was clearly enough stated as an issue that it would have to be challenged at that time. Then I take a next step, I see the City has adopted CC1094.6 (Not clear on the tape recorder.) It says, "...if you don't challenge within 90 days it becomes final." But, there's a couple of cases that I have run into, even if you don't notice the adoption, then the time for filing a Writ of Mandate is still wide open even years later. For 11 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 example, the Eldorado case. It seems there is enough of a legal issue in attempt. I am not trying to re -arguing the case or rechange the decision. There is enough of a legal issue that an attempt to bring it up, while it may fail. I have a hard time calling it frivolous. It is an attempt to get something done for your client. I am going to have to come convinced of this frivolity. Erwood: This is a difficult issue. This is the first time in doing this in ten years or so that I've made this type of recommendation. It is a close issue, and I have cited cases to support my recommendation in the report that I have submitted to the Commission. There will probably be other cases. Largely, it's a matter of interpretation with respect to what was really addressed at the lower hearing, and was this really made an issue that was going to be fully litigated at that point or not. I think that if the Commission finds that Mr. Delsack brought up this issue, it was not an issue that was fully litigated at that time. I think you can clearly say, this is clearly not frivolous because he has really not had his chance to come before this Board and make a pitch upon the issue. The other side would also be that he has also had his day before the Evidentiary Hearing Officer and before the Board. We've heard this issue before, and there's been nothing new and just rehashing the matter. Then the Board would definitely have the power to assess some of type of award to attorney fees. Adams: They are really different issues between whether the issue is subject to collateral or whether its frivolous. I lean toward, yes, it is frivolous finding. Phillips: I ask the Board to please not make a prejudgement until April 9. Adams: I wouldn't do that. I am just indicating where I am having a problem. Phillips: Both attorneys will have an opportunity to argue their positions on April 9 to this Board. I would also like to make the Board aware that if the Board makes a decision, comes to the conclusion that in fact the Petition was frivolous, then the question comes whether or not this Board will award attorney fees or not. And if you do award attorney fees, how much? There is no evidence nor record that I've seen at this point, as to what attorney fees have been expended, and what would be a reasonable amount if there was to be such an award. And that again, would be an issue, I would remand to the Evidentiary Hearing Officer for review and recommendation, if this Board 12 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 gets this far. Again, this is not a decision to make tonight. This issue is for you to decide as to how to handle that issue if it does become on the 9th. McNulty: Can I ask a procedural question, which will be followed up by a question I have of Mr. Delsack and Mr. Rodriguez? Phillips: Yes. McNulty: Do you have a copy of Mr. Erwood's entitled Silver Spur Homeowners Association, Petition for Interpretation that discusses the issue of whether or not this part by collateral ... whether or not it was a frivolous action? Phillips: Are you talking about the findings and recommendations of ? McNulty: Yes. Unfortunately, there is no date on the report, except when it was received of February 10, 1997, on the bottom of the report. Phillips: Right. Delsack: Good evening ladies and gentlemen. No, I do not have a copy. (Heard to understand what he is saying. He is not speaking into the microphone.) McNulty: The only question I have and it pertains to whether or not for me anyway is the record of December 2, 1994, hearing. Is there any dispute between you folks, as the lawyers for each of the parties with Mr. Erwood's factual statement of December 2, 1994, .the Palm Desert Rent Review Commission adopted the Evidentiary Hearing Officer findings and recommendations? One of the adopted findings was quote, "That the rental rates in the park not be rolled back in existence prior to the 1988 agreement... At the hearing before the Rent Review Commission there was no objection raised by the homeowners with respect to this specific finding." Counsel is asked if there are disputes as to the factual finding of the Evidentiary Hearing Officer in that document. Rodriguez: (Heard to understand what he is saying. He is not speaking into the microphone.) IN MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Delsack: (Heard to understand what he is saying. He is not speaking into the microphone.) McNulty: The only thing that I was concern with if counsel is disputing the factual finding, I think it would be helpful to himself and the Board to have the record to see if that factual finding is supported by the record of December 2. Delsack: (Heard to understand what he is saying. He is not speaking into the microphone.) ...we are not talking about roll back. We are talking about a five year agreement that had a beginning and had an ending. Now where.do we go? When the agreement ends does that mean... that is absurd ... Yeah, I have a real issue with is ... we were all discussing the return of investment and the argument was, see look at his return of investment. Not only is the park owner receiving 25 to 28% ... In addition, that he is ripping off the tenants because he continues to raise rents on a contract that expired... that's it... Therefore, Mr. Erwood's rule ... there is no reason to come back and ask for a hearing before you all. This was never raised. This was never brought to this Board for determination ... This is no basis for foundation... Phillips: I believe that answers your question about looking at the record. McNulty: I'm sorry Doug, I didn't hear what you said. Phillips: You better plan on looking at the record. McNulty: Which is the next question. Will this record be available? Phillips: Yes, it will be available tomorrow at City Hall. I will bring it. Does anyone have any problem with providing the record to the Board? Does anyone have any problem with providing the administrative record that was before the Court? Rodriguez: Yes, I object to the administrative records being available. ...the whole process is close to being in contempt of the Judge's order with regard to the roll back decision... (Unable to understand what he is saying. Not speaking into the microphone.) Phillips: This is not dealing with the Petition for Discretionary Hardship Rent. We are not talking about this. 14 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Rodriguez: (Unable to understand. Not speaking into the microphone.) The hearing is the same time and same night. Phillips: How should we propose we get the record in front of them so that they may look at it? Rodriguez: (Unable to understand. Not speaking . into the microphone.) ... there is a record from when Mr. Bedig, the park owner applied for a rent increase back in 1993... the second record, when Mr. Delsack applies for a Petition for Interpretation, the record is before Mr. Erwood, which is a much smaller record... The only evidence the Board can look at determining whether or not... or whether or not... frivolous... The park owner submitted ... all of that is in the record. Phillips: Then there is two different records that this Board should be looking at? And do you have both records? Rodriguez: No. I have the administrative record from the first set of hearing of the rent increase. Phillips: That is what I have. Rodriguez: Do you have... (Unable to understand. Not speaking into the microphone.)... Phillips: I will provide that for the sole purpose of the hardship rent increase. Then ask Ms. Armenta if the. City has the second record. Ms. Armenta replies, she would need to research through the City Clerk Department. Rodriguez: ... Mr. Delsack had a brief. I had a brief, three declarations ...(Unable to understand. Not speaking into the microphone.) Erwood: Can I interrupt? Mr. Rodriguez didn't you submit also deposition of Joan Funga (not sure of spelling) and some depositions of the residents of the park? Rodriguez: Right. Erwood: Just to be clear, there was actual testimony deposition that was included in his pleadings that was considered as part of the record? 15 ( k 1 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Rodriguez: Right. Phillips: In order to get this record before this Commission, I can have -this record that is filed with the court which is relevant to your Petition for Discretionary Hardship Rent Increase, I will have that before you tomorrow. As far as the smaller record that deals with the Petition for Interpretation, we will check with City Clerk and will let the Board know when it is available. Rodriguez: (Unable to understand. Not speaking into the microphone.) Phillips: So those should be included as well. McNulty: I don't want to get into reviewing the entire work of Mr. Erwood's work. I think that is why he is the Evidentiary Hearing Officer. I am more concerned with this particular issue. If the record supports that the claim was to adopt the Evidentiary Hearing Officer finding which was the rental rates in the park not be rolled back. I understand Mr. Delsack's position is the roll back was never really part of that. Regardless if that is accurately factual or not in the hearing, if we adopted it that is what I am concerned about. Whether or not that is an accurate statement. If that is an accurate statement, I don't need to see for my purposes the rest of the record to see if this is an accurate statement of what we adopted. I just want to know if this is an accurate statement or if there is some dispute between the lawyers as to whether or not factually, we adopted the Evidentiary Hearing Officer findings as its stated. ,. Adams: I like to have access to the record to both cases. Having come into the middle of the thing, I would feel more comfortable if I could skim through and bring myself up to date on the evidence, among other things. If the no roll back finding was, if there was support or lack of support in the initial record that would bear whether continued attempt to change that is or isn't frivolous and therefore, whether they should be attorney fees. I think that I need to go all the way back. Phillips: I believe there is a court reporter transcript on the hearing with respect to discretionary hardship rent increase. I believe there was a court reporter present for the commission's adoption of the findings. I think that should have what you're looking for as far as the arguments on those issues. 16 1 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Adams: That's probably all I will look at, but I would like to look at the whole thing in case something catches my eye. As a member of the Board, we are entitled to the whole record. Erwood: I think that is the record that Mr. Phillips has which was submitted by the petitioner on the discretionary hardship rent increase. Rodriguez: (Unable to understand. Not speaking into the microphone.) Janes: Asks Mr. Rodriguez to go up to the podium and speak into the microphone. Lorena is having a hard time hearing; so that everything that is being said, is being recorded. Rodriguez: I just want to object again, for the record. This is really violating the court order that the two issues not be mixed up. Because what's going to happen here if Mr. Adams decides he wants to look at both records, and one of these cases goes up separately as a hearing, he is going to have a decision that is based on two administrative records when there is only one administrative. Erwood: What we can do Mr. Rodriguez is. What you're saying is we have two different separate hearings before this Commission. The one on the 9th will address the hardship rent increase petition. Then we would have to schedule one later on the Petition for Interpretation. Rodriguez: Right. In fact I wrote a letter to the City Attorney, Mr. Phillips saying last week that I thought that was. Erwood: We cannot consult with the City Attorney, therefore, that should have been addressed to this Commission. Because I don't think that this Board has received this information. It's a little unfair. If you are going to communicate to Mr. Phillips, and say that we can't communicate with him you need to make your position known. This is the first time I've heard about scheduling two hearings, but I thought I was thinking up something new. Obviously, not. That would seem to alleviate all of your concerns. Rodriguez: Right. You can understand if an administrative record that's maybe 2,000 pages long0at deals with the hardship petition in 1993. And there is another separate administrative record from 1996 dealing with the — request for the roll back, and if you read both of those records and make a 17 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 decision on the Petition for Interpretation then the previous record necessarily has to become part of this record. Because you as one of the commissioners have looked at both records. But, you can only look at what was submitted to the Evidentiary Hearing Officer in the proceeding. You can't go outside that second administrative record, to get something from another administrative record. But, I think that all of the relevant evidence to show why this Petition for Interpretation is frivolous was submitted in that second hearing and is in the record. Everybody can agree or disagree whether or not they think it's frivolous. But, the park owner submitted all the information to show the Evidentiary Hearing Officer why they believed it was frivolous, including the previous decision of the Board and the decision from Judge Block in a totally separate lawsuit with nine different causes of action, including a cause of action for racketeering based on sending out rent increase notices that Judge Block threw out of court. All of that is before the Board. Actually, this was not the second time that they tried to bring it up, but it was the third time. So it has been in two separate Rent Control proceedings and in a separate Superior Court action. So you really have three different decisions, and all of the decisions are in the record. Erwood: Excuse me for interrupting. Just so fain clear and everybody is clear. There is only one administrative record, and that is on the Discretionary Hardship Rent Increase. We haven't gone before the Board with the initial determination on the Petition for Interpretation? I don't think this is called an administrative record at that point, is it? Nothing has been done on the Petition for Interpretation at this point. I have only done a recommendation. We haven't had a hearing on that. There's been no record produced of a administrative record. Rodriguez: There was a huge stack of documents that was submitted to you the day that you held that hearing. Erwood: I understand that. And they have those. I am getting confused. Can you explain what you mean about the administrative record. I thought the administrative record was when the matter went to Superior Court. The record of what I had done and what the Commission had done were put together as the record before the Court. What I am saying is that right now we don't have any record with respect to the Petition for Interpretation. The Board has not addressed that issue yet. IF MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Adams: But, its called an administrative record even before it gets to court. It's the petition or the. Erwood: That's my question. To make sure that I am not getting mixed up on those things. So that we know what we've got. Coates: Gentlemen. Gentlemen. What we really need to say is the Petition for Interpretation is still in the future. It is going to be decided next Thursday. That's why we are here. Rodriguez: Right. That is a separate issue from Judge Fry and his remand sending things back from a different petition that was filed years earlier. All I'm saying is the way I read Judge Fry's order and being present at the oral argument, I was very certain that he did not want these issues to get mixed up. And that's the way the order was written. Adams: I don't believe Judge Fry didn't want the members of the Board, particularly a new member that wasn't here when the matter first came through to read the record of the matter before making a decision. Rodriguez: Absolutely. That's the first record. Of course, you can see that with respect to that issue. What I'm getting worried about is that if the Board is going to start flip-flopping and reading two different records to make one decision. Then there maybe something in your mind that you saw something in record #1 that you refer to in decision #2. And then you can't go back to it. That is my fear of looking at both records to make one decision . You have to make decision #1 based on record #1. And decision #2 based on record #2. When you start mixing up together, you endanger violating the courts order. You make it difficult for everybody on appeal because somebody may make a finding in decision #2 based on something they saw in record #1. When we are up at appeal, there is no record #1. And it could be there because its not part of the administrative record. Did everybody follow that? Adams: I can read a record and say, hey, too bad they didn't get that in that piece of evidence over there. Rodriguez: If you have two car crash cases you can only make a decision based on the case that is in front of you. You can't look at the other crash. IV MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Adams: That doesn't mean you can work on both cases. McNulty: From my own prospective, I understand your concerns. It sounds from your position you would prefer to have two separate hearings. I am personally offended that you think that I am not intellectually bright to separate the records. I think I can do that. I do that in my professional life. I do that very well. I think that reading a record is no different. For the Board's convenience, and perhaps for your convenience, we want to do it in one hearing. Rodriguez: Well, Mr. Adams specifically said, that in determining the issue of whether or not this was frivolous he wanted to look at the first record. Adams: That's right. Rodriguez: That has nothing to do with my opinion of your intellectual capabilities. I'm offended, and that is a really sign of bias that you would construe it that way. I don't think the Board should make those type of comments to me. I came in good faith to make sure this mix-up doesn't happen, and we do have a court order. And maybe the judge feels for certain reasons that came up at the hearing that we really can't discuss here as to why there shouldn't be this mixing of decisions. These arguments were made at length to the judge, and he thought that my arguments were appropriate arguments. He decided to sign my form of order as opposed to the City's form of the order. I am not trying to say anything about your capabilities one way or the other. McNulty: In this situation, you have a commissioner at the end, Mr. Adams who doesn't know the history of this. When you refer to the first record and second record, we are at somewhat disadvantage because we don't know what all those records consist of. When we came to the hearing, we primarily had Mr. Erwood's recommendation and whatever documents go along with that. Usually they are the briefs that you have submitted. We don't necessarily know what is contained in the first record as you term it, or the second record or the third record. We are not familiar with the term "administrative record" as you use it in a term of art. So we need to know what record or records you're referring to, or what records he needs to look at so that he can make a determination on whether or not you are to be awarded any lawyer fees. To try to separate, and I think come before this Board and say, hey, you guys are getting close to violating the, court's order 411 I-, MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 and we can't consult with our lawyer to determine what records exist... to try to facilitate a hearing for both of you and for the residents, and the park owner. And to say to us, now you're getting dangerous and slop him over. I don't think that's the case at all. We are trying in good faith, as best as we can to figure out what the facts are, what your positions are, and then form a professional decision. Rodriguez: Okay. All I am saying is that if you are going to make a decision as to whether or not petition 92 is frivolous, you can only look at the record that was before the Evidentiary Hearing Officer for petition #2. You can't go outside of the record and start looking at petition #1 or any other source. You have to look at petition #2 and evidence #2. That is all you canlook at. And if there was no evidence at all, one of the Evidentiary Hearing Officer findings as I read his decision was there was no evidence submitted at all for hearing #2. That's part of what could make it frivolous. For you to go back to hearing record #1 and let's see if we can find something in the first hearing, but makes it not ficklest - is not appropriate. McNulty: Perhaps we are not communicating on this issue. How does Mr. Adams know that coming in late? Rodriguez: It doesn't matter. All he can look at is decision #2 and record #2. Because that's all that Mr. Erwood was allowed to look at. That's all anybody can look at. In a trial, you can't go look at all the other trials that have happened the last fifty years in the county and decide what they did in that case. You can only look at what was before you in that one trial. There was one hearing on Mr. Delsack's Petition for Interpretation. He had an opportunity to come that day, and submit whatever he wanted to and I had an opportunity to come that day and submit whatever I wanted to. We both took advantage of that opportunity. We both came here, and we both submitted things. Those things that were submitted and if you do read them, you can decide based on what you read in that one record, whether or not it was frivolous. You can't go looking at other records. McNulty: I don't know. That what ever session we can. Rodriguez: If you do that, then when we appeal this thing to the Superior Court the Superior Court Judge will say, what did they do? I have this record in front of me from hearing #2, but for all I know this Board made a decision from hearing #1 or maybe there was another mobile home park that had a 21 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 hearing three years ago, and went to look at that to. How is the judge to rule on what you did was proper, if nobody knows what you looked at? All I am saying is the only thing you can look at for decision #2 is the record for decision #2. The only thing you can look at for decision #1 is the record for decision #1. That's all I'm saying. Once you start mixing them up, that makes it impossible for the appellate courts to review what you did because they don't have everything you have. Adams: Decision #1 if you want to call it that, relates to the Petition for Hardship Rent Increase? Correct? Rodriguez: Correct. Adams: This is the matter that is referred back to 1993. Rodriguez: Started in 1993. Adams: 1993. That has a record, administrative record. Rodriguez: Correct. Adams: That's the one that has been referred, remanded by Judge Fry. Rodriguez: Correct. Adams: On #2, the tenants Petition for Interpretation is not in court the way I understand it? That is a matter that will be coming before this Board for a decision. But it seems to me that if the Board is to make a decision. Wait a minute, I want to look at this in order to make my decision. Then the matter is still open for that type of inquiry. If the matter was in court, he could understand. But, it isn't in court. Clearly, if I look at something in record #1 and in making a decision on this later question, I refer to that, there should be some reference to that in the record. There should some reference in the record, a record in the hearing that will take sometime in the future. There should be some reference to the fact that I am referring to or I've looked at this material. That is then part of the administrative record. If you go on a part of Writ of Mandate, that becomes part of the administrative record because the transcript hearing is going to be held next Thursday or some later time, is part of the administrative record. 22 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Phillips: Mr. Adams, there's something I wanted to tell you about. When the matter comes before the Board, the ordinance provides no further evidence shall be permitted nor allowed in the hearing before the Rent Review Board. That's the point. Maybe two different hearings would be a good idea. Initially, I said no. Perhaps the first hearing should be on the Petition for Interpretation. That is a smaller record. There is nothing in the Petition for Interpretation as far as facts that are already in the main record. Conduct that meeting first„ then conduct the Petition for Discretionary Hardship Rent Increase next. Delsack: (Unable to understand. Not speaking into the microphone.) I've been waiting for.. Mr. Erwood, if I'm not mistaken. Didn't you say that this Board that the Petition for Interpretation when we had the hearing that day, that we stipulated that we incorporate everything prior to the hearing. Erwood: I was just looking for that. I have a copy of the transcript hearing, looking for some type of comment like that. Had not found yet. I'm not sure exactly. I know there was a stipulation with respect to the depositions, pleadings and everything else coming in. There may have been a statement with respect to that. This does cloud the issue about violating Judge Fry's. It just clouds the issue. If there was a stipulation that you could consider what occurred at the prior hearing with respect to the issue of the rent, what I characterize as roll back, but its really a recalculation. Delsack: This seems to be my recollection also. In fact, I recall we stipulated that everything that was in the transcript, record #1 should be incorporated by reference, and we all agreed on that. Otherwise, everything would have had to be dragged out and started all over again and present a whole new evidence. And there would be no need for that. Phillips: Do you remember where in the hearing that stipulation took place? Delsack: It was somewhere early on in the part of the hearing. In discussing this whole issue, how do you separate?... (Unable to understand. Not speaking into the microphone.) I hear what Mr. Rodriguez is saying. At hearing number #1 for the Petition Hardship Rent Increase nothing gone before them... (Unable to understand. Not speaking into the microphone.) When it comes to the Petition for Interpretation however, we incorporate the record everything that I brought before. So if you say... then you must by definition include everything that was in the first hearing ..incorporate the 23 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 entire record ... How can you possibly take... Rodriguez: I would be very surprised to find a stipulation like that in the record because I don't think there was one. My recollection was that I said, after Mr. Delsack presented his case, he hasn't put any evidence. My recollection of Mr. Erwood's was that he said, this is true, there is no evidence in here. You've got no evidence. You have just come down here to talk. And I said something like, "I want my evidence that I brought included in the record. Including these three declarations which include the previous decision of the Evidentiary Hearing Officer, and the previous decision of the Board, and all then was brought in new." But, I never stipulated to the best of his recollection to say, every single piece of document submitted in hearing #1, would be part of hearing #2. I said the exact opposite. What is here today is what the record is. Luckily for Mr. Delsack, we did include some of the things from hearing #1, including the tenant testimony, briefs and the decisions on those particular issues. But, it was never resubmitted all of those things about return on investments, and what the rents were at some other mobile home parks, Indio or something like. There was never any agreement to do that; therefore, the records are separated. And perhaps Mr. Erwood has found that part. Erwood: On page 51, lines 12-20, you are stipulated to and correct copy of the 1988 agreement be entered. You had also offered into evidentiary, the declaration, all the exhibits attached to it, Mr. Bedig's declaration and all of the exhibits attached to it and Mr. Alies declaration and the deposition from the Superior Court case of Joan Baumgarten and three tenants that testified in that case. Rodriguez: We agreed to put in the record. That is just what we brought. These depositions from the Superior Court action were not available at the first hearing because the Superior action had not happened yet. That was the new evidence that we brought. The testimony from the tenants prior attorney who herself testified there was no intent to roll back. Erwood: The settlement agreement is characterized as to what was stipulated to coming in from both you and Mr. Delsack. I am just trying to see if there, is anything. I can't find anything at this point. But, I haven't looked through the whole record. oz,I J MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Coates: Gentlemen! Gentlemen! I'd like to break at this point. What appears to be developing is we are asking Mr. Armstrong (actually he means Adams) to make a decision based on facts that he is not aware. And these arguments are carrying back and forth. I don't think that Judge Fry is aware that the Commission is not constituted the same as it was previously. We have a new member. Is there any possible way in view of the 90 days, notice from February 20, is there any possible way of going back to the Judge and ask him for clarification? That would be a reasonable thing to do. Explain the situation to the Judge and say this is your honor, to make a decision. Rodriguez: I really think you are missing something here. You can have five new people and you can still. There is a new judge. There's three guys on appeal that may read this someday and have no idea this is happening. There is a record. All you have to do is look at the record. There is no need to co - mingle these records. There is no need to say there is a new person. The Judge took that into consideration. He said, these guys dealt with this two or three years ago. That is why he gave you 90 days, originally it was 30 days. Mr. Phillips agreed that 30 days would be okay, but the Judge stopped and said, "No. These guys haven't dealt with it for a long time and they're going to have to go through a lot of this. I am going to give them 90 days. That is how it worked at the hearing. It really wouldn't matter if there was five new people up here. What he wants you to do is go through the record and say, this is what we are making our decision on. That's what he wants you to do. Coates: You're telling the Commissioner, Mr. Adams, that he can not review the records? Rodriguez: No, I'm not. I am saying for decision #1, he can review record #1, 24-hours a day up until the next hearing, if he wants to. For decision #2, he can review record #2 as much as he wants. What I'm saying is that you can't go into record #1 to help you make a decision on #2 because then you mix the two cases together. 25 - r � MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Delsack: If that's the case, let me ask you a very simple question. How do you determine, Mr. Erwood said before on the Petition for Interpretation the issue as to the settlement agreement and the so called roll back, had already been fully litigated? In the first transcript hearing of #1 or record #1, how do you determine whether its been fully litigated unless you go back and look at record #1 from record #2. I don't understand that. Rodriguez: That is easy. In record 92, we submitted parts of record #1 where that issue was litigated. We submitted testimony of four tenants that talked about it, and submitted Mr. Delsack's brief where he specifically asked on several occasions that the rents be rolled back. Also, submitted. the Superior Court lawsuit that he filed in the decision of Judge Block who also threw it out. All of that. You,guys can read it. , Delsack: Judge Block said they did not exhaust all of their remedies because the Mr. Erwood decided the settlement agreement was a rental agreement. And it was not a rental agreement, and that case is on appeal. Judge Block's decision is not final and is not binding. All the rulings and decisions can be brought in, but there is no significance. Coates: Mr. Delsack. Phillips: Which hearing should we hold first? Delsack: Both meetings should be held. Rodriguez: I believe, you have to do the Petition for Interpretation first because Judge Fry did not want the Board to deal with the pull back issue while they were considering the hardship issue. That is exactly what his order says. By mixing them together, they are necessarily looking at both. Coates: Actually, on the agenda for April 9 it says, the Petition for Interpretation is discussed before the 1994 Amended Petition for Interpretation for Silver Spur Manor. In a sense, they are separate matters. Delsack: Why can't we hear both issues? Coates: I don't know. I'm waiting for someone to tell me. — Phillips: That's why I put them in that order. 26 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Adams: You know the reason they can't be put. Coates: Why not? In view of the time constraints. Delsack: (I can't understand. Not speaking into the microphone.) ...Have two sets of hearing. It is fine with him. He has no problem with it. Also, they are traveling out-of-town and there are attorney fees, and that is adding up. There are two sets of attorney fees. Rodriguez: That is an incorrect statement. We are not asking for attorney fees for the first petition. Whatever I come for in the second petition is the second petition. We are not getting attorney fees on petition #1 through petition #2. Delsack: (Unable to understand. Not speaking into the microphone.) Rodriguez: That is not true. I can come here 500 other times for everything you can possibly think of, and that wouldn't effect the attorney fees on petition #2. The only thing that effects that is when I am here on petition #2. Coates: Do you have any estimates of what the attorney fees might be? Rodriguez: Not really. I'm guessing a few thousand dollars. I really don't know. Coates: We would like you to have that information when you come here next Thursday night. Rodriguez: Sure. That would be fine. Again, I really don't know the amount. Adams: I surely don't see any problem with the Board hearing two separate matters on the same night. Coates: Excuse me Wednesday. Rodriguez: It's great that none of you see a problem. But, there is a court order. 27 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Phillips: I disagree with that. The court order does not provide that. I would recommend the following: Handle both at the same time. Keep the records separate. One record be held as one matter, then the second record be held as another matter. The only question in my mind is. Furthermore, bring the attorney fees information .(Unable to understand. Not speaking into the microphone.) Coates: I don't see any reason to deviate from the agenda as it is published. Item C is Petition for Interpretation, Item D, 1994 Amended Petition. Rodriguez: If you do that, you will be getting all this evidence on the roll back issue right before you view the hardship issue, which is specifically what the Judge said, the Board shall not do this. Coates: Okay. Let's reverse the order then. Phillips: So you think it should be the other way around? Rodriguez: At a minimum. My question is are they going to make a final decision next week? Phillips: I don't know. Rodriguez: Right. If they don't know that, then the Board should not be hearing any of the roll back evidence until a decision on the Petition for Discretionary application. Then it is back up to Judge Fry. This is what Judge Fry did not want to happen. That is specifically what I told him, I was worried about this happening at that hearing. This is in the court's transcript hearing, which you can read. Coates: You're basically saying there's gotta be two hearings? I Rodriguez: Right. Delsack: Not only should there be two hearings, but they have to be separated by the ..(Unable to understand. Not speaking into the microphone.) Coates: Is this the way you read this Doug? — Phillips: No. 041 r MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Rodriguez: I think you should go back and read this. Phillips: I did. Adams: Unfortunately, the Board cannot consult with the City Attorney because it says that we can't consult with the attorney. McCaughey: Can I consult with Mr. McNulty? It reads here in Mr. Rodriguez, he reads one way that says, "...reconsider or reclarify any other issue that was previously before the Board, including the Board's decision that the rents not be "rolled back" under the 1988 settlement agreement." That to me reads that the Judge does not want us to clarify or redo any decision that was made on that. But, that to me does not state that we cannot look at it in considering item #2. Rodriguez: If you were in the Judge's chamber and said those things, and I was in your position, I would never take that position in front of the judge. and read the Judge's order as liberally as you possibly can and do what ever I want to do. This is what we talked about. Coates: That's not fair. Rodriguez: Right. But, I was. I made it very clear to the Judge both orally and in a subsequent letter the Board should not discuss any other issue before it rules on this issue. So it doesn't get bias or influenced by the other records. Adams: Is that item put into this order? Rodriguez: Well, it's right in there. Adams: What I'm reading, "Nothing shall be construed to allow the Board or the Evidentiary Hearing Officer to reconsider or reclarify any other issue that was previously before the Board, including the Board's decision that the rents not be "rolled back" under the 1988 settlement agreement. Those other issues are not currently before this court." Rodriguez: Right. 29 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Adams: So, we are not going to reconsider, generally that means take up for decision. It doesn't mean merely consider it. To reconsider means, (his interpretation) to reopen for a new decision. That is clearly not what we are intended to do or reclarify. Rodriguez: His Petition for Interpretation, the whole petition is to roll the rents back to the 1988 level. That is exactly what. Delsack: That is exactly not true. That is untrue. What we are asking for in the Petition for Interpretation, where it says, if you have an ordinance that talks about an agreement for fixed term. I want to know what happens when the agreement ends on the fixed term. That's all. Whether it applies to this settlement or any other settlement agreement. This is a Petition for Interpretation. We are seeking to interpret what was the meaning and the significance of these words in the ordinance. I don't know. These people don't know. I don't think anyone up here knows. I don't think anyone sitting over there knows. Someone has to come up with a decision and say, hey these words were put in here, the legislative body decided to put it in. It talks about an agreement. What happens when an agreement ends? The issue as to whether the agreement ... (Unable to understand) belongs in the court, over there. The issue whether to contract was terminated or whether there was a torturous act of done ...(Unable to understand.) That belongs in the court. That is not something which comes under the jurisdiction of the city body. Coates: So far Mr. Delsack, you and the Judge agree. The way I read this order is emphatically, ordered us not to reconsider it. The exact thing that you are asking for. Adams: In the course of determining this issue in the remand, the Judge is not saying we can't reopen that issue as a separate matter. Separate and apart from the remand of this issue for further findings. In other words, in making the further finding that he is asking for here, we are not, there is nothing here that says we can reconsider or reclarify any other issue, just the issues that he specifies. That doesn't mean we couldn't take some complete separate action not related to this issue. Coates: The Judge is using the words, and I refer to lines 23 of page 2, of his remand decision, "...decision that the rents not be "rolled back" under the -1988 settlement agreement..." Then reads line 25, "The court hereby exercises its inherent power to retain jurisdiction over this matter so that the MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Board may clarify its previous decision as set forth above. The Board shall present its new findings to the attorneys for the parties within 90 days of the date of this order." Adams: All he is saying is, there is nothing in here. Rodriguez is correct, and we can't consider and can't change anything concerning the roll back of 1988 in making the findings. Coates: I read it much more absolute than you do. The way I read it, the Judge does not want the Board to reconsider or reclarify. Adams: He says this matter is not before him. On page 2, lines 23 and 24, "Those other issues are not currently before this court." Coates: I would say the Petition for Interpretation is a petition for clarification. That's the way I read it. Adams: That is a separate matter. Coates: What the Judge has ordered for this Board is not to reclarify. And. that is the Petition for Interpretation and that is exactly aimed at reclarification which is specifically what the Judge has told us not to do. Adams: The Judge doesn't order the Board not to. "Nothing in this order is construed to allow it." It doesn't mean you can't. Phillips: Let me see if I know what Judge Fry is saying. We need, one, two, three, four, there are five separate findings with respect to the Petition for the Discretionary Hardship Rent Increase. Counsel and Mr. Erwood can correct me if I am wrong. The way I read it, at the most, only the first two findings on that page (that being insufficient evidence to overcome the presumption): The Judge wants to know where the evidence was insufficient. And the insufficient evidence to establish a deficient in that operating encumberment that would require an increase in rent. Are those the two findings that are ordered? The rest deals with the Petition for Discretionary Hardship Rent Increase which was frivolous, the roll back, and the award of attorney fees. So those are the three, last three. So we are just talking about those two or are we just talking about the first one, the second one or both of them? 31 y i MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Rodriguez: I believe clearly the last three are to be consider. I believe what he was asking was, how exactly did they come up with decision on substance? My problem is, let's say you hold these two meetings together. Judge Fry says, I don't want any arguments or any new evidence coming in regarding the hardship under the Board rules. I want the Board rule on how he did. So you have the hearing on two subjects and the City Attorney says, you can't say anything about this hardship thing because we are going to talk about that now. And the Board its going to make its decision. They are going to talk about it, and maybe sometime three weeks later make a decision. Now that part of the hearing is closed, now we are going to open this other thing about the roll back. Then everybody comes up and says, now we are talking about the roll back. The Judge's decision does not apply anymore, now we are on hearing #2. Now we can say whatever we want about the roll back. And all the evidence that we submitted, and it is basically just the way... (Unable to understand. Not speaking into the microphone.) Because the second part of the public hearing anybody can say anything they want on the whole wide world. Erwood: But, is his order that clear? Would it be better to say, go back to court and specify? Here's the problem. You're saying, I want two separate hearings, as a matter of fact, I want a decision to be rendered first before we even talk about the Petition for Interpretation. Rodriguez: My whole oral argument before Judge Fry was that I wanted to make, it very clear that nobody could come in and give new arguments/evidence to the Board. I went over and over. He agreed with me that wouldn't be a very good idea. By having another hearing on such a closely related issue, at the exact same time, is impossible not to mix both things together. At the second hearing, anybody could come in and talk about these issues that were not supposed to be talked about hearing #1, and the Board is. Delsack: I'm a little confused. May I ask you a question? The purpose of this session that we are having tonight is to clarify things. I walked in pretty clear, and I am confused as hell right now. Mr. Phillips, if I'm not mistaken, you were at the hearing that we are referring to, the Judge Fry's order? Phillips: Right. 32 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Delsack: Was there ever any discussion at the hearing on the Petition for Interpretation and Petition for Determination have been filed? Phillips: No. Delsack: So the only thing the Judge was talking about was the five points that you read that came out of the Petition for Hardship - your recommendations and findings. So that we get all that clear. Judge Fry only talked about the Petition for Hardship Rent Increase. He did not discuss the Petition for Interpretation because I don't think he knew it existed. Coates: I can only read what the Judge's order says. I wasn't at the Judge's hearing. What I have in front of me is a transcript of his order of remand sending it back to the Board. On line 23 of page 2, the Judge absolutely forbids us to reclarify exactly what your Petition is. Delsack: But, hold on a minute. The Judge forbids to reclarify the so-called rolled back as it was discussed and reviewed pertaining to the hardship rent increase. The whole thing is that we are so confusing the issues tonight, that you are now Commissioner Coates, with all due respect, you are now applying a ruling that he made without being aware of the Petition for Interpretation which came after that. Coates: I wasn't at that hearing. I can only read what the printed words say. Delsack: What your interpretation of the printed words say. That is why,there are judges, because everyone has different interpretation. The point is that the Petition for Interpretation was an entirely different petition. It is not a petition. We are not talking about rollbacks. Forget about rollbacks. What we are talking about here is a settlement agreement, an agreement was entered into, just like any contract that had a beginning, it had an ending, it was paid out and it expired. Now what? He stilled continued to go on with that contract once everybody had agreed that the contract has expired. Coates: I refer to your own document, page 2, line 2. Delsack: Are you going to throw my own words back into my face? 33 , MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Coates: Yes. On line 1, page 2, it says, "there was a fiuther finding that rental rates not be rolled back to those in existence prior to 1988." This is in your Petition for Interpretation. Delsack: Yes, this pertains to Petition for Hardship Rent Increase. I am reviewing the background. I am saying that was the ruling that came out of the hardship rent increase; that was the recommendation that was made. That's the background. That's factual. That is just what Mr. Erwood referred to in the five items that are listed here. The Petition for Interpretation is an entirely different thing. It is much more of an academic intellectual discussion, saying, forget about this particular contract does such. What we are saying is, "What does this ordinance mean?" Coates: Mr. Delsack. (Yes.) I remain unconvinced. Some of my fellow commissioners may be convinced. I would like to hear from them. Armstrong: It's way over my head. You guys don't agree. We can't ask our City Attorney what to do concerning the facts about the Petition for Interpretation of the roll back thing. I haven't looked at the case or any documents, except what is in front of him. And the arguments that you, gentlemen had before some judge. I can't understand those either anymore, than what I can understand you tonight. Us guys are up there someplace. When I had to interpret the hardship rent increase about a year ago, I had the opportunity to read all of the documents in the office that had to deal with this issue, and some idea what the case was about. I have no idea what this case of Petition for Interpretation is about. I don't know what you're talking about this roll back. I don't know why you want it? I don't know what basis it is on? I haven't read anything about it. Whether it should be together or apart? Coates: What I was really asking you for, was whether you agree or disagree with me on the Judge in his order specifically forbidding us to consider this Petition for Interpretation? Armstrong: That's where he sent us. Coates: Do you agree? Armstrong: Absolutely. 34 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Coates: Okay, that's two out of five. Adams: This order is in a mandate proceeding dealing with the hardship rent increase. In hearing that, the Judge said, see how you went from the evidence to the decision. I want a finding. The tern they used is "bridges the gap." Between the evidence that you heard and the decision that was made, I don't think the findings are sufficient. Now; this is completely apart from any later Petition for Interpretation. But, now he says, he needs more specific findings on a couple of issues that he lists. In making that, don't go back and reopen this issue about roll back in 1988. That is not before the court. So in making this decision, don't go back and reconsider or reopen or redo or reclarify that decision as to making the findings in this issue. He is not saying you may never at any time talk about that in the future in a separate proceeding. That's what I understand may have happened in the interpretation. Coates: What I am trying to do is eliminate this item from the agenda. That's what I am trying to do. I want clarification from the Judge. I want something from the Judge in writing saying that we can go ahead and hear this Petition for Interpretation. Adams: That is a really good move. In fact, I don't know if motions are in order in a study session, but he would like to make a motion: "I moved to have some type of clarification or get clarification as to whether we can or cannot take into account any facts in the records, any facts in the record, when doing these findings. And secondly, whether the language on page 2, lines 17 - 20 actually means that we can't talk to our City Attorney." I find this incredibly, unbelievable! I feel this interferes with the attorney - client relationship, and does all sorts of things. Delsack: This is an unconstitutional thing. Everyone is entitled to representation. Usually you have a right to counsel, just as any other. party has a right to counsel. The other thing is Commissioner Coates, taking your argument into consideration, if I understand it correctly. What you are saying is that, if you can't look at the Petition for Interpretation. What you're saying . in effect, you're cutting off our right to an appeal. Where.do we go if we get a recommendation? It says in the ordinance, that we come to you. 35 I MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Coates: I am obeying the order of the court. Delsack: The order of the court as it pertains to the Petition for Hardship Rent Increase. It has nothing to do with the Petition for Interpretation. That was a separate hearing, a separate proceeding, it was never in front of Judge Fry. Judge Fry is not the, Judge Block is the one that had something to do with the original filing of the lawsuit against the park. Judge Fry only is involved in this particular Writ of Mandate action. Coates: I repeat, "I remain unconvinced." Delsack: Do you agree then that you're cutting off our right to an appeal? Is that what you're saying? Coates: No! No! Delsack: Then where do they go? Coates: I want you to go back to Judge Fry and ask him for clarification on this one specific point. "Namely, can this Rent Review Commission hear the Petition for Interpretation or not?" Delsack: But, that's what the ordinance says you should do. The ordinance says that upon submitting it to the Evidentiary Hearing Officer he then prepares the findings and recommendations, which he brings. We have already come to you. Then we the opposing party that has been ruled against, then has the right to appeal. Coates: Right. The Judge has issued an order, which is forbidding us to consider this exact point. Delsack: But that interpretation is unconstitutional as denying you the right to counsel. Phillips: As he understands it, there is a motion on the floor. McNulty: I forgot what the motion was. Can it be repeated? Phillips: Go back to the Judge for clarification on how to. M. MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Adams: "I seconded it. It was two points. One was to ask for clarification as to whether we can look at and take into consideration any part of the record in reaching the results that he has asked for more specific findings. And secondly, what is the scope of this ban against consulting with City Attorney or any other person before rendering our decision." Rodriguez: I might make it a lot easier. Perhaps we can stipulate to a few things here. If you try to go to Judge Fry and find out whether or not you can ever look at this roll back issue again, that is not going to get done before this hearing on Wednesday. Right. Most likely. Okay? If we do. You might as well have this hearing on Wednesday, on the Petition for Hardship Rent Increase. Then, we will stipulate without having to go to Judge Fry at all, that after that is completed you can rule on this Petition for Interpretation that order would not prohibit you from doing that. So that all we are doing is keeping the two separate. Which is all we wanted anyway. Because that's where it is going to end up anyway, unless you cancel both hearings. And there is no reason to cancel the one hearing because you're only concerned about the second hearing. So why not just do it that way. The second thing about your ability to consult with the City Attorney, I think that you can ask the City Attorney here in this proceeding, how we should go procedurally. I think what the scope of what the Judge intended, (and I'm sure of this) was that the City Attorney not help you write the decision or give you any ideas of how the decision should be written because that was the whole juice of the argument in court. The Judge did not want the City Attorney to do that. But, is your decision based on; the substance. But, if you want to talk to your City Attorney about how should this hearing be held? What order should be? All of that stuff. I'm sure that he is entitled to give you advice on that. I would stipulate to that. What the Judge did not want the City Attorney's office to do or anybody in the world was to give you any outside ideas as to what your decision should be because he wanted it to be your decision. What did the Board think about this? Not what did Mr. Delsack think? Or what did I think? Or what did the City Attorney think? That is why it was put in there. It was very limited. You cannot go to the City Attorney and say what should be ruled. Erwood: Mr. Rodriguez. In the transcript of the hearing before Judge Fry. Rodriguez: Can I ask a question, does this Board have a copy of Judge Fry Is transcript of the hearing? 37 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Adams: I don't know if we have a transcript. I have a, here is the order. Armenta: No, the Board does not have that. Erwood: I have a copy of the transcript, but I don't believe they do. Rodriguez: It is very inappropriate to give a copy of the transcript to the Evidentiary Hearing Officer because... Erwood: Here is the issue Mr. Rodriguez, you talk about mathematical problem. If I don't review the transcript to understand what your argument is on the mathematical problem, in other words. You took these figures, and these figures, where.did you get them? And then you're saying, Mr. Erwood I don't have to tell you what figures I'm talking about. How am I supposed to answer the Judge's decision and say, these are where I get these figures from in the evidence, in the record, and so forth. What you are saying, Mr. Erwood, you go back and they send it back to you and ,you make this decision, but we are not going to tell you what these errors are of what Mr. Rodriguez is talking about. We are not going to tell you about these specific calculations, and we want you to redo these calculations. How am I suppose to do that, if I don't know what calculations you are talking about? Rodriguez: There were briefs that we submitted before the hearing ended that have calculations that you are more than welcome to go look at. But the things that were submitted after this hearing was over, were the things that we specifically. The Judge wanted to know what you though at the time, not what you thought after reading the briefs of the parties. That's what the Judge wanted. Erwood: He wants to know where I got this. You said, he needed -- Mr. Erwood made an error in these specific figures. He didn't do correct math. Basically that is what you said, isn't that correct? Rodriguez: Yeah. Erwood: Okay. Where am I supposed to? Where am I supposed to? Rodriguez: You should have never known that we said that. — Erwood: How do I answer his order? 38 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Coates: Gentlemen, there is a motion before the Commission. Rodriguez: It is very disturbing that you were given, were you given copies of the briefs as well? Erwood: I don't have the briefs. Rodriguez: Have you ever seen them? Erwood: Nope. Rodriguez: Have you ever seen the City's brief? Erwood: Nope. Rodriguez: But, you have seen the arguments before Judge Fry? Erwood: I've seen a copy of the transcript. Adams: Was that in closed session in the Judge's chamber? Or was it in open court? Erwood: No, it's an open court. Rodriguez: No. But, it was made very clear that the people making the decision should not know what happened that day. Adams: So if a member of the Board had just happened to wander into the court room, they be excluded? Rodriguez: You know, we can argue about this hypothetical as much as we want. Coates: Gentlemen. Let's hold the arguments in a advance while we complete this. Rodriguez: It may be a public record, but the Judge can make an order saying what he wants to say, and that's what the Judge ruled. 39 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Coates: There's been a motion made and seconded. Mr. Armstrong, I mean Mr. Adams, can you please reiterate your motion. Adams: The motion that I made, I am giving it some serious consideration of withdrawing. The motion that I made was that, "Clarification be sought whether the Board may look at any part of the record in making the decision, the clarification of findings that is requested in the order of remand. And secondly, clarification of the ban against consultation with the City Attorney before rendering the decision." Coates: What I think I am seconding is, you're requesting clarification on Items C of Wednesday, April 9, agenda, Petition for Interpretation versus the Judge's specific order, and you're also asking for abatement of the ban of consulting your attorney? Adams: On Item C, the Petition for Interpretation, I'm not sure that is included in the ban that is in here. Coates: Line 22, page 2, the Judge's remand order. Adams: It says, "... we are not to reconsider or reclarify any other issue in making this decision..." We are not to reclarify. Coates: If we are not to reclarify, what do you call a Petition to Interpret? What do you call that? Adams: I haven't read the petition. Coates: Do any of the other commissioners have... McCaughey: I have a question, Mr. Rodriguez brought this up. Mr. Phillips how would you advise us to proceed procedurally on this? Because Mr. Rodriguez earlier, just recently he stated that we can ask you how we should proceed on this matter. But although, it appeared that prior to that he disagreed with you on how we should proceed on this. How do you think we should proceed on this on just looking at the matter? Phillips: One thing we can always do, a motion is still on the floor is go back to the Judge and ask him what he would like us to do, and how -that's one thing we can always do. The second thing that we can do, it seemed to have m MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 met with the least amount of resistance is to hold a hearing on the Petition for Discretionary Hardship Rent Increases purposes, then address the other issue. When you conclude that first issue, then you can go ahead on the Petition for Interpretation. That's gotten the least amount of disagreement. Coates: Commissioner McNulty do you have anything you would like to say? McNulty: I have a lot to say, but I really don't want to say it. It appears to me that the second option that Mr. Phillips suggested is probably the most, for the least resistance, the most efficient and most economical for all parties involved. My only concern is, I want to accommodate Mr. Rodriguez's concern that we don't have an appearance that we are matching records, as I understand that concern. Phillips: We wouldn't even provide you with the second record until you're done with the first. McNulty: But, I don't know if both counsels prefer the one hearing be held separately and apart on a different time and date? Or if we do one hearing, make the resolution as we rule and proceed to the next issue. Phillips: I don't think they mind that. So long as you make your decision on the first case, then you address the second one. McNulty: But, in effect it seems to me that if we then need to have some record at the continuation of that one hearing, we in effect are going to have two hearings. Phillips: Yes, you are. McNulty: And so, it is a question of form over substance, as opposed to, do they want to give us the records and do all at one scoop and allow us to use our own ability to keep the record clean? Or would they prefer to go in a matter in which you suggested? 41 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Phillips: I would really suggest the lateral move. It is cleaner. It may be that you be able to complete the first hearing in one time. And then, at that point, address the second one and get it over in that one hearing. On the other hand, you may not, and you may have to continue or adjourn. It seems from your agenda ... McNulty: I understand that. I am perfectly aware of that. I suppose that the only question I have would be, what does counsel prefer given that you are the ones that have to travel? Delsack: As far as I am concerned, whatever seems easiest to handle... it doesn't matter to me... (Unable to understand. Not speaking into the microphone.) McNulty: "Then I would move to table Mr. Adams motion, then I would move to adopt Mr. Phillips suggestion that we proceed in the manner that he suggested." Motion is seconded by Commissioner McCaughey. Phillips: What we are going to do on April 9, is that Wednesday night? Yes. Wednesday night, the Board will address the questions of the remand on the Petition for Discretionary Hardship Rent Increase. The record for that will be available at City Hall starting tomorrow. I will drop that off. I have that record in my office. When they have made their decision before or after referzing the matter to the Evidentiary Hearing Officer, once they have made their decision, then they will immediately take on the Petition for Interpretation. Delsack: (Unable to understand what he is saying. Not speaking into the microphone.) Coates: I don't think he said that. Phillips: If they take that into submission, then the issue on the Petition for Interpretation will have to wait until they make a decision on the first one. Adams: It is only possible that - I think that among our options - to be simply referred back to the Evidentiary Hearing Officer for clarification. Which then we wouldn't be getting into a lot of complex discussion... Rick do it again. 42 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 Delsack: (Unable to understand what he is saying. Not speaking into the microphone.) Phillips: He specifically said that he wanted more specific findings regarding the: 1. The evidence the Board relied on in calculating park owner's investment property. 2: The park owner's return on investment. 3. The formula, if any the Board used in determining whether the park owner rate of return was fair. That is what we have to do. Someone is speaking. Cannot understand at all. Rodriguez: Then you shouldn't, have said anything. I believe there is a very large difference between the case law as to what the superior court's decision is and what an administrative agency decision is. I believe the California Supreme Court has made it clear that when you take an extra ordinary step of allowing people who aren't judges to make these important kinds of decisions, that the people who are effected by that feel more comfortable that they have gotten due process if it is spelled out. So where is the superior court judge might not have to spell out his decision, I believe the law is the exact opposite. That administrative agencies do have to spell out their decisions, and say, this is the evidence we've looked at, A, B, and C, and it equals D. And that's how we came to the decision D. You just can't say, we decide D. I think that is the Administrative Law of the State of California. I think that is what the Judge wanted the Board to do. This is how we got to this place. And he is not telling you to come to any place at all. He is just saying. He wants to rule on whether or not what you guys did was right. It is a little too vague, I really can't rule on it because I'm really not sure what you guys did as a third person looking at this. I can't really follow this. So make it easier for me to follow. I think that is what he was saying. Delsack: I don't want you all to be left with that because that information is not accurate. Let me quote you from a case, and Mr. Phillips has the cite on this. "And the court in this case says, while the state and federal constitutional mandate the landlords receive a fair return, they do not require local governments to adopt any particular method for determining their rents that may be charged." And we are talking about rents in fair return. So, I don't read it the way Mr. Rodriguez does. I suppose the proper time to argue this would be next week. Cx3 MINUTES - RENT, REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 McNulty: I'think we should vote on the motion first. We are starting to stray into another area. Rodriguez: What I wanted to say was that, there is not supposed to be any argument next week. There is not suppose to be any evidence, nobody is really suppose to talk about this evidence at all. It's supposed to be you guys up there deciding what the evidence was and what you want to do with it. And the road map that you follow or don't follow. I am not supposed to argue the case, and he is not supposedito argue the case on what the return should or should not be. Nobody is supposed to do that. Delsack: All I want to find out is what the Judge wants. That's all I ask. Rodriguez: Then you should have come to the hearing. Delsack: Well you're right, but... Adams: And the motion was? Coates: Gentlemen. Can you please reiterate what the motion was. McNulty: "The motion that I made was to table Mr. Adams motion. And then I separately moved to adopt Mr. Phillips suggestion that we proceed on Wednesday evening with the Discretionary Hardship Rent Increase issue. Assuming that we come to some resolution at that time, immediately follow up with Petition for Interpretation." Motion, seconded by Commissioner Adams. Coates: All in favor? Rent Review Commission: They all respond, 'T" Coates: All abstain? Rent Review Commission: None. Coates: Motion carries. r 44 MINUTES - RENT REVIEW COMMISSION SILVER SPUR MOBILE MANOR APRIL 3,1997 V., ORAL COMMUNICATIONS Commissioner Coates reads Item I and 2. No one has any comments under Items I and 2. VI. ADJOURNMENT Commissioner Coates made a motion to adjourn the Rent Review Commission meeting. Motion is seconded by Commissioner Armstrong: Motion carried unanimously. , Respectfully submitted, i ax ORENA G. ARMENTA SENIOR OFFICE ASSISTANT 45 MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING THURSDAY, MAY 15,1997 6:00 P.M. CIVIC CENTER COUNCIL CHAMBER I. CALL TO ORDER Chairman McNulty called the Rent Review Commission meeting. to order at 6:05 p.m. in the Palm Desert Civic Center Council Chamber. IL PLEDGE OF ALLEGIANCE Chairman McNulty invocated the Pledge of Allegiance. M. ROLL CALL Ms. Armenta called the roll call of the Rent Review Commission. Present: Commissioner Bill Adams Commissioner Henry Armstrong Commissioner Robert Coates Commissioner James McCaughey Chairman Uhich McNulty Others Present: Douglas S. Phillips, Deputy City Attorney Rick Erwood, Evidentiary Hearing Officer Kurt Delsack, Attorney Richard Elias, Bessire & Casenhiser (property management firm) representing Anthony Rodriguez, Attorney at Law Ray L. Janes, Management Analyst II Lorena G. Armenta, Senior Office Assistant r PALM DESERT RENT REVIEW COMMISSION MINUTES MAY 15,1997 PAGE 2 IV. NEW BUSINESS A. Apriroval of the Rent Review Commission Minutes Dated April 3 1997 Chairman McNulty asked the Commission if there were any objections to the Minutes of April 3, 1997. Commissioner Adams made a motion, seconded by Commissioner Armstrong to approve the Minutes of the Palm Desert Rent Review Commission dated April 3, 1997. Motion carried unanimously. B. Qpnroval of the Rent Review Commission Minutes Dated April 9. 1997 Commissioner Adams would like to make a correction on the Minutes of April 9, 1997. At the bottom of page 3, Commissioner Armstrong made a motion that Item C of the agenda be stable until Item D has been discussed and disposed of. Commissioner Adams would like to suggest that the motion should change and reflect that Item C of the agenda be tabled, T-A-B-L-E-D until Item D has been discussed and disposed of. Commissioner Armstrong made a motion, seconded by Commissioner McCaughey, to approve the Minutes of the Palm Desert Rent Review Commission dated April 9,1997, with the correction of Commissioner Adams. "On page 3, at the bottom, where it's stating the motions, it states that Commissioner Armstrong made a motion that Item C of the agenda be stable until Item D has been discussed and disposed of. And I would like to suggest that the motion should change and reflect that Item C of the agenda be tabled, T-A-B-L-E-D until Item D has been discussed and disposed of." Motion carried unanimously. ClarificationC. 1994 Amended Petition of Siliter Spur Mobile Manor for Discretion Hardship Rent Increase: The Rent Review Commission Referred tb Vaxer to the Evidenti= Hearing Officer on April 9--1997- for Prgparation of PALM DESERT RENT REVIEW COMMISSION MINUTES MAY 15,1997 PAGE 3 NOTE: VERBATIM TRANSCRIPT OF THIS PORTION OF THE HEARING IS ATTACHED HERETO AND MADE A PART HEREOF AS EXHIBIT "A." MOTION WAS AS FOLLOWS: Commissioner Adams made a motion, seconded by Commissioner McCaughey to adopt the report of recommendation of the Evidentiary Hearing Officer, Rick Erwood. Motion carried unanimously. 1 :: 1 ulul lU 1 ► Any person wishing to discuss arty item not otherwise on the Agenda may address the Rent Review Commission at this point by stepping to the lectern and giving his/her name and address for the record. Remarks shall be limited to a maximum of five minutes unless additional time is authorized by the Chairman. Mr. Kurt Delsack introduced himself as the attorney for the homeowner's association and the tenants. Mr. Delsack asked if there would be any discussion on the hearing officer's recommendation on the Petition for Interpretation and Petition for Determination. Mr. Delsack is asking the Rent Review Commission about holding the hearing of the Petition for Interpretation and Determination at tonight's meeting. His request for holding the hearing at tonight's meeting is because he has torn his Achilles' tendon and will be having surgery. Mr. Delsack explained that he will be in a cast and have to use crutches for about two to three months, and it will be difficult for him to return to the hearing on the Petition for Interpretation and Petition for Determination. Deputy City Attorney Phillips replied that the hearing cannot be done because Mr. Rodriguez would want to be present for the hearing and would request the meeting be reheld again. Commissioner Adams stated he would like to have the opportunity to review the record on the Petition for Interpretation before making a decision. Commissioner Coates asked -the other commissioner's if Mr. Rodriguez had presented the attorney fees in order to make a decision on the attorney fees. PALM DESERT RENT REVIEW COMMISSION MINUTES MAY 15,1097 PAGE 4 Mr. Richard Elias introduced himself as the property management firm of Bessire & Casenhiser. He was at tonight's -meeting on behalf for Mr. Anthony Rodriguez since his wife was going into labor of was in labor. Mr. Elias reminded the Rent Review Commission that this item was not to be discussed at tonight's meeting. Mr. Elias stated he was protesting any hearing on the matter and would notify Mr. Rodriguez. Deputy City Attorney Phillips said there was no time limit, therefore, the meeting could be scheduled at a later time to give counsel and the commission time to review the record and everyone be present. Mr. Delsack stated he will not be available to drive for the next three months until sometime after August. Commissioner Adams will be out of town from August 30 through September 7. Chairman McNulty suggested Ms. Armenta arrange a time that would be convenient for everyone. In regards to discussion on the Petition for Interpretation and Petition for Determination, there will be no hearing on it tonight. 2. This is the time and place for any person who wishes to comment on non" hearinQ Agenda items. It should be noted at Commission discretion. these comments may be deferred until such time on the Agenda as the item is discuss6d. Remarks shall be limited to a maximum of five minutes unless additional time is No response from the public. VI. ADJOURNMENT It was moved by Commissioner Armstrong, seconded by Commissioner Coates, to ADJOURN the Palm Desert Rent Review Commission meeting at 6:50 p.m. Motion carried unanimously. RESPECTFULLY SUBMITTED, lA LORENA G. ARMENTA RECORDING SECRETARY S I. II. PALM DESERT RENT REVIEW COMMISSION MEETING WEDNESDAY, APRIL 9,1997 6:00 PM. CIVIC CENTER COUNCIL CHAMBER CALL TO ORDER Chairman Coates called the Rent Review Commission meeting to order at 6:13 p.m. to order. yy 0 C�J 0 k V09 n t`j+ � y z PLEDGE OF ALLEGIANCE Chairman Coates invocated the Pledge of Allegiance. III. ROLL CALL � C0M in Lo p H H y adz.. 0 tti dk Ms. Armenta called roll call of the Rent Review Commission. m Present: Commissioner Bill Adams Commissioner Henry Armstrong Commissioner Robert Coates Commissioner James McCaughey Commissioner Uhich McNulty Others Present: Douglas S. Phillips, Deputy City Attorney Rick Erwood, Evidentiary Hearing Officer Kurt Delsack, Attorney Anthony Rodriguez, Attorney Ray L. Janes, Management Analyst II Loren G.-Armenta, Senior Office Assistant A. Approval of the Rent Review Commission Minutes Dated February 23. 1996 Chairman Coates asked the Commission if there was any objection to the Minutes of February 23, 1996. PALM DESERT RENT REVIEW COMMISSION MINUTES APRIL 9,1997 PAGE 2 Commissioner Armstrong made a motion to approve the Minutes of the Palm Desert Rent Review Commission dated February 23,1996. Motion carries a 3-2 vote, with Vice Chairman McNulty and Commissioner Adams abstaining. B. The Annual Selection of a New Chairman and Vice Chairman Chairman Coates asked the Commission if anyone would like to make a nomination. Commissioner Armstrong would like to nominate Robert Coates for Chairman. Vice Chairman McNulty seconds the motion. Vice Chairman states that he would like to nominate himself to the position of Chairman. Commissioner McCaughey seconds the motion. Chairman Coates asked the Commission again if there are any further nominations. Chairman Coates asked for a vote on Vice Chairman McNulty being nominated to Chairman. Motion for Ulrich McNulty to be Chairman of the Palm Desert Rent Review Commission carries a 3-2 vote. Chairman Coates and Commissioner Armstrong abstained. The Secretary polled the Commission for their vote. Commissioner Adams, I Commissioner Armstrong, Abstain Chairman Coates, Abstain Vice Chairman McNulty, I Commissioner McCaughey, I Chairman Coates states that is three out of five votes, and Ulrich McNulty is the new Chairman. Chairman McNulty asked the Commission if there is any nominations for the position of Vice Chairman. PALM DESERT RENT REVIEW COMMISSION MINUTES APRIL 9,1997 PAGE Commissioner Adams would like to nominate Commissioner Coates. Commissioner Coates declined the offer. Commissioner McCaughey would like to nominate Commissioner Adams. Commissioner Adams would like to nominate Commissioner Armstrong because he has had more experience on the Commission. Chairman McNulty asked if there was a second for Commissioner Armstrong. Commissioner McCaughey second the motion for Commissioner Armstrong. Chairman McNulty states there are nominations for Armstrong and Adams. Chairman McNulty asks the Commission for their votes on Commission Adams: Motion for Commissioner Adams to be the Vice Chairman of the Palm Desert Rent Review Commission carries a 3-2 vote. Commissioner Coates and Commissioner Adams abstained. The Secretary polled the Commission for Commissioner Adams as Vice Chairman. Commissioner Adams, Abstain Commissioner Armstrong, I Commissioner Coates, Abstain Commissioner McCaughey, I Chairman McNulty, I C. 1996 Petition for Interpretation: Consideration of the Petitioner's Appeal of the Hearing Officer's Recommendation in the Case of the Tenants4996 Petition for Interpretation: Consideration of the Hearing Officer's Recommendation that Attorngy's Fees be Awarded to the Park Owner NOTE: VERBATIM TRANSCRIPT OF THIS PORTION OF THE HEARING IS ATTACHED HERETO AND MADE A PART HEREOF AS EXHIBIT "A." MOTIONS WERE AS FOLLOWS: Commissioner Armstrong made a motion that Item C of the agenda be stable until Item D has been discussed and disposed of. Motion is seconded by Commissioner Coates. Motion carries a unanimous vote. PALM DESERT RENT REVIEW COMMISSION MINUTES APRIL 9,1997 PAGE 4 D. 1994 Amended Petition of Silver Spur Mobile Manor for Discretionary Hardship Rent Increase: Consideration of Superior Court Order Remanding Case to the Palm Desert Rent Review Board for Clarification of Findings Regarding Return of Investment NOTE: VERBATIM TRANSCRIPT OF THIS PORTION OF THE HEARING IS ATTACHED HERETO AND MADE A PART HEREOF AS EXHIBIT "A". MOTIONS WERE AS FOLLOWS: Vice Chairman Adams made a motion to refer the matter to the Evidentiary Hearing Officer, for him to use his familiarity with that record to make more specific findings and bring back to the Commission to vote yea or nay. The motion is seconded by Commissioner Armstrong. Motion carries a unanimous vote. The Evidentiary Hearing Officer will submit his findings May 6 so that the Rent Review Commission will have the opportunity to review the report. The Commission, Evidentiary Hearing Officer and both counsels for both parties agreed to this date. V. ORAL COMMUNICATIONS Mr. Mark Linkjendal is a resident of the Silver Spur Mobile Manor. Mr. Linkjendal stated there are numerous residents that would be interested in purchasing the park. Perhaps an negotiation could be worked out with the park owner. Mr. Linkjendal said at the last meeting of the homeowner's association, the park owner would like to see the tenants purchase the park. The problem is that several attempts have been made to get a purchase price and they have never received the information. The tenants are very interested in buying the park, and would like to eliminate a lot of these current problems. Attorney Delsack stated he is going to object to some of the things that Mr. Linkjendal said. Attorney Delsack would like it in the record that he has been peripherally involved in the purchase of the park. Attorney Delsack stated to Mr. Linjendal that this was not the place nor the time to discuss these issues. What is being said tonight, can hurt the tenants. PALM DESERT RENT REVIEW COMMISSION MINUTES APRIL 9,1997 PAGE 5 VI. ADJOURNMENT It was moved by Commissioner Armstrong, seconded by Commissioner Coates, to adjourn the Palm Desert Rent Review Commission meeting at 6:50 p.m. RESPECTFULLY SUBMITTED, 6�4Of 10.1 L NA G. ARMENTA SENIOR OFFICE ASSISTANT 0 MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING WEDNESDAY, SEPTEMBER 24,1997 6:00 P.M. CIVIC CENTER COUNCIL CHAMBER �'e is �k �F*ok*xak i°.F �k �kkx9e�9exk$x°F$e>°>F&haF aF eY°F�'c*9c �F ie peek i°>Fae*nYk*aF �F �k�eF*aF ie �F.F9°�F >F k*>k °Fk*>Fde ieeF4eaF °F °F* I. CALL TO ORDER Chairman McNulty called the Rent Review Commission to order at 6:00 p.m. in the Council Chambers. II. PLEDGE OF ALLEGIANCE 3� T> m to ;;; •�< <� m ro H to HHt'rad%�H Chairman McNulty invocated the Pledge of Allegiance. ] H H ° ° ° HOB C " at III. ROLL CALL d 010 y H Secretary Lorena Armenta called the roll call of the Rent Review Co °i � n. (r \ y p Present: H Commissioner Bill Adams Y Commissioner Henry Armstrong Commissioner Robert J. Coates, absent - excused Commissioner James McCaughey µ c4 Chairman Ulrich McNulty Others Present: o-1 Douglas Phillips, Deputy City Attorney Rick Erwood, Evidentiary Hearing Officer Ray Janes, Management Analyst II K Lorena Armenta, Secretary M ILT/ 11MR1[11113101"ZI[OF-V4IMZK Any person wishing to discuss any item not otherwise on the Agenda may address the Rent Review- Commission at this point by stepping to the lectern and giving his/her name and address for the record. Remarks shall be limited to a maximum of five minutes unless additional time is authorized by the Chairman. Chairman McNulty asked the public for any comment or discussion. No comment was made since no one was present. i MINUTES - PALM DESERT RENT REVIEW COMMISSION SEPTEMBER 24,1997 2. This is the time and place for any person who wishes to comment on non -hearing Agenda items. It should be noted at Commission discretion, these comments may be deferred until such time on the Agenda as the item is discussed.. Remarks shall . be limited to a maximum of five minutes unless additional time is authorized by the Commission. Chairman McNulty asked the public for any comment or discussion. No comment was made since no one was present. NOTE: VERBATIM TRANSCRIPT OF THE PORTION OF THE HEARING IS ATTACHED HERETO AND MADE.A PART HEREOF AS EXIIIBIT "A." MOTION WAS AS FOLLOWS: V. NEW BUSINESS • .:its _l.l_ : aJ►0 WXTA I 1_ • ► uJI►lJl� • -o_ _ 1 u A motion was made by Commissioner Adams to follow staffs recommendation to continue this to the October 28 meeting. Motion was seconded by Commissioner McCaughey. Motion carries a 4-0 vote, with Commissioner Coates being absent. VI. OLD BUSINESS A motion was made by Commissioner Adams to continue the matter until October 28,1997, at 6:00 p.m. due to the request of Mr. Delsack and the consent of Mr. Rodriguez and staffs recommendation. Motion seconded by Commissioner Mccaughey. Motion carries a 4-0 vote, with Commissioner Coates being absent. 2 MINUTES - PALM DESERT RENT REVIEW COMMISSION SEPTEMBER 24,1997 N VII. ADJOURNMENT It was moved by Commissioner Armstrong, seconded by Commission Adams, to ADJOURN the Palm Desert Rent Review Commission meeting at 6:10 p.m. Motion carries a 4-0 vote, with Commissioner Coates being absent. RESPECTFULLY SUBMITTED, V LORENA G. ARMENTA 3 MINUTES PALM DESERT RENT REVIEW COMMISSION TUESDAY, OCTOBER 28,1997 6:00 P.M. CIVIC CENTER COUNCIL CHAMBER aF9:x�'e eF �Fxx4e �t*ak �F �Fied:eF&�F��k$$irir iraY it*9:x>k �F �k>tk*ie �F 9e �F �Y �F at �F �F*�Y4e de irxxxie aF �F*xxar>k>F ee 9ede eF a'rx>k eF eF aF �'e I. CALL TO ORDER Chairman McNulty called the Rent Review Commission to order at 6:00 p.m. in the Council Chambers. II. PLEDGE OF ALLEGIANCE Chairman McNulty invocated the Pledge of Allegiance. III. ROLL CALL Secretary Lorena Armenta called the roll call of the Rent Review Commission. Present: Commissioner Bill Adams Commissioner Henry Armstrong Commissioner Robert J. Coates Commissioner James McCaughey, absent Cit�1�sCOIINCIYu ALVIANY Chairman Ulrich McNulty APPROVED DENIED RECEIVED OTHER Others Present: Douglas Phillips, Deputy City Attorney MEETING DATE AYES Rick Erwood, Evidentiary Hearing Office; �r°�2— Ray Janes, Management Analyst II ABSENT: nl r'�BSENT. <-�P0, S� z— Lorena Armenta, Secretary ABSTAIN. nn r Attorney Anthony Rodriguez VERIFIED BY Attorney Kurt Delsack Original on IV. ORAL COMMUNICATIONS 1. Any person wishing to discuss any item not otherwise on the Agenda may address the Rent Review Commission at this point by stepping to the lectern and giving his/her name and address for the record. Remarks shall be limited to a maximum of five minutes unless additional time is authorized by the Chairman. L � PALM DESERT RENT REVIEW COMMISSION - MINUTES OCTOBER 28,1997 Chairman McNulty asked the public for any comment or discussion. No comment was made. 2. This is the time and place for any person who wishes to comment on non -hearing Agenda items. It should be noted at Commission discretion, these comments may be deferred until such time on the Agenda as the item is discussed. Remarks shall be limited to a maximum of five minutes unless additional time is authorized by the Commission. Chairman McNulty asked the public for any comment or discussion. No comment was made. V. NEW BUSINESS A. APPROVAL OF THE RENT REVIEW COMMISSION MINUTES DATED MAY 15, 1997 A motion was made by Commissioner Armstrong to approve the Minutes of May 15, 1997, as submitted. Motion seconded by Commissioner Coates. Motion carries a 4-0 vote, with Commissioner McCaughey being absent. B. APPROVAL OF THE RENT REVIEW COMMISSION MINUTES DATE SEPTEMBER 24. 1997 A motion was made by Commissioner Adams to approve the Minutes of September 24, 1997, as submitted. Motion seconded by Commissioner Armstrong. Motion carries a 4-0 vote, with Commissioner McCaughey being absent. VI. OLD BUSINESS A. CONSIDER THE PETITIONER'S APPEAL OF THE HEARING OFFICER'S RECOMMENDATION IN THE CASE OF THE 1996 PETITION FOR INTERPRETATION AND TO CONSIDER THE HEARING OFFICER'S RECOMMENDATION THAT ATTORNEY FEES BE AWARDED TO THE SILVER SPUR MOBILE MANOR PARK OWNER. ACTION: PALM DESERT RENT REVIEW COMMISSION - MINUTES OCTOBER 28,1997 NOTE: VERBATIM TRANSCRIPT OF THE PORTION OF THE HEARING IS ATTACHED HERETO AND MADE A PART HEREOF AS EXHIBIT "A." MOTION ARE AS FOLLOWS: Chairman McNulty made a motion on the first finding. "That the petition for interpretation is barred by the doctrine of collateral estoppel, I would move that it be adopted based upon Mr. Erwood's findings and recommendations on pages 1 through 5. And I would also incorporate the comments that Mr. Adams made regarding his review of the record, and the statement that Mr. Phillips made about the section of the appellate record -- the page number I do not recall." The motion is seconded by Commissioner Coates. Motion carries a 4-0 vote, with Commissioner McCaughey being absent. A motion was made by Chairman McNulty to address the second item. "I would move that we adopt Mr. Erwood's findings as contained in his recommendation that they are frivolous." The motion is seconded by Commissioner Coates. Motion carries a 2-2 vote, with Comissioners' Adams and Armstrong voting "No," and Commissioners' Coates and McNulty voting "Aye." Commissioner McCaughey was absent. Attorney Phillips states, "Mr. Chairman, and members of the Commission, at this point, then, that motion fails. And that moots number 3. So at this point, frivolity under our ordinance is the only basis for an award of attorney's fees... we will prepare a final order for signature by your Chairman. At this point what this board has determined is that the petition for determination and interpretation is denied because it's barred by the doctrine of collateral estoppel, it was already decided; however, this board has determined by a two - two vote not to find that the petition is frivolous, and therefore has not awarded attorney's fees..." PALM DESERT RENT REVIEW COMMISSION - MINUTES OCTOBER 28,1997 VII. ADJOURNMENT It was moved by Commissioner Coates, seconded by Commission Adams, to ADJOURN the Palm Desert Rent Review Commission meeting at 9:24 p.m. Motion carries a 4-0 vote, with Commissioner McCaughey being absent. RESPECTFULLY SUBMITTED, Ea O• SECRETARY e",.� 3 z 'f ��" MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING Tuesday, May 12, 1998 9:00 a.m. Civic Center Council Chamber I. CALL TO ORDER Commissioner Adams called the Rent Review Commission meeting to order at 9:01 a.m. to order. IL PLEDGE OF ALLEGIANCE Commissioner Adams invocated the Pledge of Allegiance. III. ROLL CALL Ms. Armenta called roll call of the Rent Review Commission. CITY COUNCIL ACTION: Present: APPROVED DEN IEDi RECEIVED / OTHER Commissioner Bill Adams Commissioner Henry Armstrong MEETING DATE Commissioner James McCaugh S (2) vacant positions OES: e� ABSENT: z ABSTAIN: Others Present: VERIFIED BY: Douglas S. Phillips, Deputy CityRVal on File with City Clerk's Offic Anthony Rodriguez, Attorney Charles Prawdzik, Attorney Ray L. Janes, Management Analyst II Lorena G. Armenta, Senior Office Assistant V. ORAL COMMUNICATIONS 1. Any person wishing to discuss any item not otherwise on the Agenda may address the Rent Review Commission at this point by stepping to the lectern and giving his/her name and address for the record. Remarks shall be limited to a maximum of five minutes unless additional time is authorized by the Chairman. " , PALM DESERT RENT REVIEW COMMISSION MINUTES MAY .12, 1998 PAGE 2 No comment from the public. 2. This is the time and place for any person who wishes to comment on non -hearing Agenda items. It should be noted at the Commission's discretion, these comments may be. deferred until, such time on the Agenda as the item is discussed. Remarks shall be limited to a, maximum of five minutes unless additional time is authorized by the Commission. No comment from the public. IV. NEW BUSINESS A. Approval of the Rent Review Commission Minutes Dated Februay 9 8 Commissioner Armstrong made a motion to approve the Minutes of the Palm Desert Rent Review Commission dated February 11, 1998. Motion seconded by Commissioner McCaughey. Motion carried unanimously. Commissioner Adams suggested since there is an addendum to the agenda, this item be discussed first. It is regarding the selection of a new chairman and vice chairman. C. ANNUAL SELECTION OF A NEW CHAIRNIM AND VICE CHAIRMAN Commissioner Armstrong nominated Commissioner Bill Adams for the position of Chairman. Commissioner McCaughey second the motion. Motion carried unanimously, to appoint Bill Adams as the Chairman of the Rent Review Commission. Commissioner McCaughey nominated Commissioner Armstrong for the position of Vice Chairman. Chairman Adams second the motion. Motion carried unanimously, to appoint Henry Armstrong as Vice Chairman of the Rent Review Commission. PALM DESERT RENT REVIEW COMMISSION MINUTES MAY 12, 1998 PAGE 3 u•_ITIAI al low, T e • • • e NOTE: VERBATIM TRANSCRIPT OF THIS PORTION OF THE HEARING IS ATTACHED HERETO AND MADE A PART HEREOF -AS EXHIBIT "A." MOTIONS WERE AS FOLLOWS: Chairman Adams made a motion to deny the request for reconsideration. Commissioner 'McCaughey seconded the motion. Motion carries a unanimous vote. VI. ADJOURNMENT It was moved by Commissioner Armstrong, seconded by Commissioner McCaughey, to adjourn the Palm Desert Rent Review Commission meeting at 10:59 a.m. RESPECTFULLY SUBMITTED, ,AL. LORENA G. ARMENTA SENIOR OFFICE ASSISTANT 6-7 MINUTES MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING TUESDAY, NOVEMBER 10,1998 10:00 A.M. CIVIC CENTER COUNCIL CHAMBER I. CALL TO ORDER Chairman Adams convened the meeting at 10:02 a.m. H. ROLL CALL Present: Chairman William Adams Vice Chairman Henry M. Armstrong Commissioner James McCaughey Absent: Commissioner Donald Moran Commissioner William Sprigg c CITY COUNCIL ACTION: APPRO,V$D DMZMD n RECEIVSD d - Also Present: AYES: Rick Erwood, Evidentiary Hearing o Doug Phillips, City Attorney ABSTAIN Ray L. Janes, Management Analy9I1IFIED BY Seandee Jackson, Support Staff Original on. III. PLEDGE OF ALLEGIANCE Chairman Adams gave the Pledge of Allegiance IV. ORAL COMMUNICATIONS 1. Chairman Adams asked the audience if anyone wished to address the Commission on items not on the agenda. There was none. 2. Chairman Adams asked the audience if anyone wished to comment on non -agenda items to the Commission. Non -agenda items being approval of minutes, the City's holiday party, and one other agenda addition that we will come to in a minute. There was none. RENT REVIEW COMMISSION MINUTES NOVEMBER 10,1998 PAGE 2 V. NEW BUSINESS A. Approval of the Rent Review Commission minutes dated July 13 & 17, 1998. Chairman Adams suggested that the Commission defer the approval of the minutes dated July 13 & 17, 1998, due to staffing changes, until the next - succeeding meeting of the Commission, whenever that may be. A motion was made by Commissioner Armstrong, seconded by Commissioner McCaughey, to defer the approval of the minutes dated July 13 & 17,1998, until the next -succeeding meeting of the commission, whenever that may be. The motion carried unanimously. B. City's 1998 holiday party, Saturday. December 5,1998 at 6.30 p.m. at the Marriott Desert Springs Resort. Mr. Ray Janes informed the Commission if they had not already received the invitations in the mail, that they were formally invited to attend the holiday party, to be held at the Marriott Desert Springs Resort. Chairman Adams asked if Mr. Janes was asking for a RSVP at this point. Mr. Janes informed him that would be okay or that at his convenience he could call. Chairman Adams said that they would give a call when it was appropriate. C. To consider the request of Attorney Charles Prawdzik to have the Commission review the Evidentiary Hearing Officer's findings and recommendation. Chairman Adams asked Vice Chairman Armstrong and Commissioner McCaughey if they had a chance to review the packet pertaining to the request before them. The two said that they had a chance to review the (/ packet. At that time he opened the hearing. Chairman Adams had Attorney Charles Prawdzik start first since it was his motion. Mr. Prawdzik introduced himself as the attorney representing the tenants/residents of the Indian Springs Mobile home Park. He considered this an extremely important meeting since it pertains to almost 200 residents of the Mobile home Park being affected by the Evidentiary Hearing Officer's report. RENT REVIEW COMMISSION MINUTES NOVEMBER 10,1998 PAGE 3 Mr. Prawdzik requested that this matter be determined by the rent review board: to uphold the law, with reference to Ordinance 456, or to ignore the law. And whether or not they feel or believe they can legislate new law. Mr. Prawdzik goes on to explain why he feels we have an ordinance for rent control to begin with. He explained that in the State of California, starting in the 1970's, various local ordinances begin to provide for the manner in which a'setting of maximization, or the control, of rents. The legislature also came up with a Mobile home residency law, because they recognized that a person living in a Mobile home was literally captive under the characteristics that had to be performed to live there. Because of this living arrangement, the legislature felt it was very important to limit the maximization of rents, particularly in Mobile home parks. In order to have rent control, the landlord must be guaranteed a fair and reasonable return. To guarantee a fair and reasonable return the landlord is allowed to raise the rents in the City of Palm Desert in proportion to the consumer price index (CPI - inflation). This is based on the maintenance of net operating income (MNOI). This formula has never been attacked by an appellate court. No case has ever shown this formula to be unfair and not yield a fair return. Why the hearing? Because the hearing officer is denying Mr. Prawdzik's clients their due process rights through his report. He is breaking the law and trying to legislate new law. The application involved was never verified. On page 14:of the hearing officer's report it states that no verification is needed. There is a verification required whether the form is used or not. The application was not verified prior to the evidentiary hearing. It was verified during it. The application is also not one of a hardship. The application submitted was called a pass -through increase. No where in the City of Palm Desert's ordinance is the word "pass -through" mentioned. Two letters were written to the rent review board before there was an evidentiary hearing. The petitions and requests were completely ignored by the rent review board. This has never happened in Mr. Prawdzik's 15 years in tenant law. RENT REVIEW COMMISSION MINUTES NOVEMBER 10,1998 PAGE 4 If the rent review board accepts the report, Mr. Prawdzik believes then the ordinance should be thrown out. The hearing officer ignores the conditions of the ordinance allowing him to proceed under a discretionary hardship. One section of the ordinance, 10l .B. states that one must first show that an MNOI hardship does not yield a fair return for the landlord. This was upheld twice in the Silver Spur case. The rent review board determined that Section 101.13 only applies after a hardship is considered. It was not done in this case. No financial statements were with the application and there is still no idea as to what or was the landlord's overall expense. The copies of financial statements were refused by the landlord and the hearing officer. Then there is the issue of capital expenditure or repair and maintenance. Unless there are financial statements to know repairs and maintenance on the park, then there is not going to be knowledge as to what kind of savings capital expenditures are going to produce under repairs and maintenance. Then there is the approval of Ordinance 800, recommended to the City Council for approval by the rent review commission. It allows for the disregarding of repair and maintenance costs submitted in a given case if the costs could have been minimized or avoided by the park owner through maintenance. The president of the homeowners association for Indian Springs Mobile home park, starting in 1993, has sent an annual letter to the park. Everyone of the'letters has been ignored. The landlord even admitted this in testimony that he never gave an answer over the past five years. The letters contained information on the lack of upkeep to certain areas of the park that needed to be taken care of. The hearing officer ignored this evidence and did not consider it pursuant to the direct instructions of the ordinance. At this time Mr. Prawdzik ask the commissioners if they had any questions or comments. The commissioners did not. Mr. Spangenberg, attorney for the park owner, then takes to the lectern. He goes on to explain that there was a CPA present at the hearing that inspected the park, improvements, and cited case law and authority defining the above as capital improvements. The residents did not put up any evidence in the contrary. He states that the residents approached the park owner about RENT REVIEW COMMISSION NOVEMBER 10,1998 PAGE 5 modernizing the park. The proposal was approved by the homeowners association and sent out to ballot. 106 ballots were received back approving a twenty -some -dollar rent increase that would stagger down after two years and three years and wind its way off over a period of time. So based on the ballots, the park owner did these improvements. So the park owner applied under section 101. B. Mr. Spangenberg then brings up case law from the 9th Circuit court (federal court). The case is Sierra Lake Reserve v. City of Rocklin. 938 F. 2d951, at page 958. The case has made a statement that has become the operating statement for other cities in adopting stand-alone capitol improvement pass -through application processes. Now this would be consider law in the state of California. He also brought up a California State Supreme Court case, Kavanau v. City of Santa Monica. This case adopted the Sierra Lake's standard. Both the federal and state courts are consistent on the issue. The capital improvements constitute a new investment in the property, where a fair rate of return is required. The park owner brought his capital improvements through the evidentiary hearing process for approval which is entitled under "Maintenance and Capital Improvement Information Sheet." So there was consistency there. There was a meeting that took place after the evidentiary hearing that was a question and answer period dealing with what the ordinance exactly meant. Question number 11 on the administrative record has to do with a hardship rent increases that the board was to look into and consider. The answer stated: "The park owner has the right to `pass -through' the cost of capital improvements", and it goes on. Mr Erwood considered this in his finding, he's an attorney. He knows the ordinance and case law. He heard all the facts from the CPA and general contractor. All of the issues were discussed, many of those that Mr. Prawdzik had. The hearing officer has applied the law correctly and the board should uphold the decision. Mr. Spangenberg then went on to add that the last hardship application for this park was filed in 1988. At this time he offered if there were any questions at this time. Commissioner Armstrong wanted to know where the word `pass -through' appeared in quotes. He could not find anything in the ordinance to that. Mr. Spangenberg then directed him to the Administrative record for October 7, 1995. 9:00 a.m. Council Chamber notes. Commissioner RENT REVIEW COMMISSION MINUTES NOVEMBER 10,1998 PAGE 6 Armstrong also had a question on a lease v. non -lease. He wanted to know if people in this park have no lease. The answer was that a lease is exempt from rent control (Civil Code Section 798.17 lease). There are eight leases in the park out of 191 spaces. The total number of 191 was used in doing the calculations. Chairman Adams had two questions: 1. Is the Rohnert Park case on appeal? 2. Is it your position that this commission or the city is in any way estopped by the answers that were given in the course of the meeting cited? Mr. Spangenberg answered question number one to be "moot." The 9th Circuit sent it back to the trail judge, but because the city had amended the ordinance to allow a stand-alone capital improvement pass - through provision, the court sent it back saying it was "moot." The answer to question two was that yes he feels that there is some sort of estoppel. At this time Mr. Phillips had many questions for Mr. Spangenberg, but did not start them until after a recess was taken. After the recess there was a lengthy question and answer period between Mr. Phillips and Mr. Spangenberg since Mr. Phillips did not receive Mr. Spangenberg's closing brief in time to review it before the scheduled meeting. Following the question and answer period, Mr. Prawdzik returned to the lectern for a rebuttal statement. He pointed out that Mr. Spangenberg had used a case Kavanau v. City of Santa Monica, incorrectly. The case was applied just the same as the City ordinance states. But, Mr. Spangenberg said he didn't know. Mr. Prawdzik states that "Kavanau stands for us, the state supreme court, when you read it, approves the hardship formula. It never considered a capital pass -through. It was submitted as a hardship and approved as such all the way to the California Supreme Court." He's not arguing that capital improvements do not deserve interest. They do. He's arguing as to what should be considered a capital improvement v. needed maintenance ignored. For example, a gazebo added on the property where one was never present, most certainly is a capital improvement. But, a roof is not a new roof if one was already existing, it is a replacement roof The roof always existed. Whether or not the roof is new or replaced, the point is the MNOI formula as the ordinance states must be employed. The hardship will be granted and interest will be paid on the money. But in this case the maintenance was atrocious. The residents were asking for the bare things they had when they moved in to the park, not for renovations or modernization. RENT REVIEW COMM, 1[ON MINUTES NOVEMBER 10,1998 PAGE 7 As to an estoppel, an ordinance is an ordinance. It requires votes to be an ordinance. The guidelines must have votes to make it law. Just because a staff member raises a question and there is an answer, does not mean law was created. The word "pass -through" does not appear in the ordinance. At this time, Mr. Prawdzik once again turned it to the Commission for questions. There were no questions. At this time, Chairman Adams asked if any other person would like to comment, since this was a public hearing. If not, the matter was to be closed and taken under submission at that point. No one had comments. The matter was then taken under submission. Commissioner McCaughey began with some comments on how the ordinance reflects on the increase and is it a valid request, and is the ordinance consistent with past, maybe future, and current law. Then there is also the matter of if these where capital improvement or repairs. At this point he would like to listen to the other gentlemen before making a decision. At this time, Commissioner Armstrong stated that he was having a difficult time understanding how the 1013, the resolution, construed to allow a onetime pass -through of capital expenditures. Mr. Erwood went on to explain how it can be read into the ordinance. At this time, Mr. Erwood, Mr. Phillips and Commissioner Armstrong went into a lengthy conversation on this question. Chairman Adams and Mr. Phillips discussed that there is nothing in the language of the guidelines that compels the board to allow the capital improvement pass -through. At this time, Mr. Phillips wanted to know under the ordinance had there been enough opportunity to review the pertinent information to continue the public hearing. He referred to the ordinance that the board had to make a decision within 30 days. Commissioner Armstrong could not find himself able to agree with Mr. Erwood's decision and would like to read the case that requires them to do this. Chairman Adams started his comments, but was cut short for two minutes to allow a short recess. After the recess, Chairman Adams continued his speech regarding the MNOI process and needing to know the base -year net operating income to determine if this could be considered under section 101.B. That did not happen. He could not find anything in the ordinance that supports the concept of a capital expenditures pass -through separate from the MNOI formula to determine hardship. He then went on to RENT REVIEW COMM . [ON MINUTES NOVEMBER 10,1998 PAGE 8 explain the difference between capital expenditures and repairs. Capital expenditures being something new entirely and repairs being replacing or repairing existing items. The ordinance allows for the proper handling of these expenditures to be amortized portions each year as allowable expenses in the total allowable operating expenses in a given year. This is based on the MNOI formula. One must overcome the presumption that those provide a fair return. This application did not provide the information needed to determine base -year or net operating income in the year of the application. Chairman Adams suggested three alternatives to the board regarding decision. 1. To grant the increase -upholding the hearing officer's findings (which he could not do); 2. To reject the hearing officer's recommendation and make the necessary findings of procedural defect and say that the application as filed was insufficient; therefore, we reject that specific provision in our ordinance for that; 3. To remand the matter to the hearing officer, with instructions to determine the case in accordance with the MNOI guidelines, permitting the landlord to amend the petition to include all of the necessary relevant information. After this some question and answer period was taking place between the commissioners and Mr. Phillips to clear up some issues regarding the case. A motion was made by Commissioner McCaughey, seconded by Commissioner Armstrong, for the application to be referred back to the hearing officer for further proceedings under the MNOI guidelines, offering the landlord the opportunity to amend its petition to include data if it so desires. The motion carried unanimously. D. Addition to the Agenda Chairman Adams suggested that an addition be added on the agenda. He would like the title "Commissioner's Comments" to be placed on the agenda before the adjournment. Chairman Adams mentioned that the need for this arose after the posting of the agenda. A motion was made by Commissioner McCaughey, seconded by Commissioner Armstrong, to make the addition of "Commissioner's Comments" to the agenda before adjournment. The motion carried unanimously. Chairman Adams recommended that there be a study session of this commission to consider recommending to the City Council certain changes in our ordinance and guidelines. Also this meeting would serve as an orientation period for the new members that recently joined the board. MINUTES REGULAR PALM DESERT CITY COUNCIL MEETING FEBRUARY 12, 2004 E. REAPPOINTMENTS TO ESTABLISHED CITY COMMITTEES AND COMMISSIONS. Mayor Pro Tem Crites moved to, by Minute Motion, reappoint the following members to the respective positions on City Committees and Commissions, each fora four-yearterm (1/1/04 - 12/31/07) except the Youth Committee, whose terms are for.one year (1/1/04 - 12/31/04): 1) Kristi Hanson, Karen Oppenheim, and John Vuksic to the Architectural Review Commission; 2) Norma Bussing and Suzanne Greenberg to the Art In Public Places Commission; 3) Rod Murphy to the Building Board of Appeals & Condemnation; 4) Linda Buxton Ward to the Housing Commission; 5) Bill Veazie to the Investment & Finance Committee; 6) Dan Barnes, Jerry Dawson, and Randy Guyer to the Parks & Recreation Review=Commission; 8) Donna Jean Darby, William Harris, and Peggy Steen to the Sister Cities Committee; 9) Kayleigh Hyde, Erika McQuillen, and Michelle Stein to the Youth Committee;10) Sonia Campbell to the Planning Commission. Motion was seconded by Ferguson and carried by a 5-0 vote. X. CONSENT CALENDAR A. MINUTES of the Regular City Council Meeting of January 22, 2004. Rec: Approve as presented. Removed for separate consideration B then approved, as amended to reflect the following clarification for page 15, Item C, action No. 3: "3) direct that the trial period placement of the new magazine in hotel rooms be expanded to include both timeshare properties and a full range of hotel properties in the City of Palm Desert, with staff directed to return with said representative sample and what the costs for obtaining this magazine would be for City Council consideration prior to any commitments being made." 5=0 B. CLAIMS AND DEMANDS AGAINST THE CITY TREASURY - Warrant Nos. 148, 149, 152, and 153. Rec: Approve as presented. C. CLAIM AGAINST THE CITY (#525) by Carol Lynn Schiada in the Amount of $50,000. Rec: By Minute Motion, reject the Claim and direct the City Clerk to so notify the Claimant. D. CITY'S/AGENCY'S PORTFOLIO MASTER SUMMARIES for December 2003 (Joint Consideration with the Palm Desert Redevelopment Agency). 4 c' ARCHITECTURAL NJ_ jIEW COMMISSION MINUTES SEPTEMBER 11, 2007 B. Preliminary Plans: 1. CASE NO: PP 07-08 APPLICANT (AND ADDRESS) PRESTNUKSIC ARCHITECTS, 44-530 San Pablo Avenue, Palm Desert, CA 92262 NATURE OF PROJECT/APPROVAL SOUGHT: Final approval of a two-story 15,459 square foot retail/restaurant &Innnnrle LOCATION: 73-999 El Paseo ZONE: C-1 SP Ms. Schrader presented a proposal to demolish' the existing Picanha restaurant. The building taking its place would be two-story with retail on the bottom and a restaurant on the second story with contemporary style architecture. This proposal includes a variance request for three (3) distinct items: height increase, side setback encroachment and to allow the building to encroach into the required commercial street corner. The project requires an additional six (6) feet above the 30-foot clearance for commercial and an exemption or a variance for the side street setback. The side street setback normally would require a five (5) foot setback from the property line, but the project would maintain a 2.5-foot setback. However, by doing so the sidewalk would remain the same size on the entire corner so it may not have that much of an impact. Another rationale for lessening its impact is the fact that this second story restaurant element is set back by a 17-foot terrace all the way around the corner. The general average heights of the predominant pieces are between 29 feet 6 inches and 31 feet and still within the limit. There is an elevator and the plans indicate the handicap path of travel. The landscape plan was submitted and reviewed by the Landscape Specialist and the comments were included in the staff report requesting a number of changes. Commissioner DeLuna stated that the color of the colonnade building next door was very light and asked if that would be updated. Commissioner Vuksic indicated that he would be meeting with the building owner about giving the existing colonnade building a fresher look, including paint colors. G\Planning%Janine Judy\WoW FilesIARC Minutes@00MR070911.mn.00C Page 5 of 8 r' ARCHITECTURAL�,41EW COMMISSION` MINUTES SEPTEMBER 11, 2007 The Commission discussed the water features on the plans. Mr. David Drake, designer, indicated that it was a recirculating fountain and thal they were trying to keep the alley a nice place to walk through for parking. Commissioner DeLuna asked if they addressed LEED standards in the design. Mr. Vuksic, architect, stated that they did not, but they were meeting Title 24 energy calculations. Mr. Bagato stated that City standards are above Title 24. The Commission discussed water features and water calculations. Mr. Vuksic mentioned that the reason for the exception of the setback on Lupine is that the property line on Lupine is further back from the curb than it is at El Paseo. They thought it was reasonable to have the width equal on El Paseo and Lupine for continuity. Mr. Bagato stated that it was consistent with how far The Gardens were from the street, so they were not asking for anything above and beyond the normal. Mr. Vuksic referred to the issue of height and stated that the only part that exceeds the height limit was the tower element on the comer. He indicated that they have worked to keep it at 10% of the overall roof area. Mr. Bagato stated this was not considered a variance and referred to Section 25.56, which says tower elements that shall exceed 10% floor area can be approved over the height and would require approval by City Council. The only variance would be for the setback and the daylight triangle. He discussed the daylight triangle and stated that it didn't make sense on El Paseo on the properties with small lots to have a 30-foot tall building set back 60 feet from the corner. It wouldn't be possible for a retail/pedestrian street building. He stated that they would like to come up with a plan that would be more specific to El Paseo; parking, architecture, setbacks, landscaping and hardscaping, so that these issues can be addressed in the future. Commissioner Van Vliet stated that because the top floor steps back it doesn't dominate the comer like some buildings could. The Commission reviewed and discussed landscaping. Mr. Spencer Knight, Landscaping Manager, had concerns with this being such a big building on a small lot and stated that it was under -landscaped and didn't meet the City's parking lot tree ordinance. He said that this was always a problem with El Paseo and the space dedicated to landscaping was minimal at best with not much canopy over the hardscape. Ms. Diane Hollinger, Landscaped Specialist, stated that there were a lot of tall plants and a lot of low plants but nothing in the middle. She suggested having medium size plants to help break up the huge expanse of building and stated that they could have pots that have greenery in them. Mr. Drake agreed with their suggestions. GAPlawnguanineJudy\Wad Fgm'ARC Minuteffi0071AR070111.mnA0c Page 6 of 8 ARCHITECTURAL ".---'VIEW COMMISSION MINUTES SEPTEMBER 11, 2007 Commissioner Lopez referred to the pots on the staircase and asked if they were movable or attached to the building. Mr. Drake stated that the ones out in the front were a fire element and would be used by the restaurant to attract attention. The other pots going up the side stairs would alternate between fire elements and planters. Mr. Knight stated that there would be a problem with maintaining the plants. He suggested that they discuss that issue when reviewing the landscape plans. The Commission discussed the issues with the irrigation and maintenance of the pots. Commissioner Lopez stated that maintenance of the pots were an issue. He indicated that it wasn't how they looked but problems with the irrigation. For instance, how the valve sticks on or how they are on too long, then you have a puddle and a mess at the base of them and asked if they would be putting in a drain to alleviate that problem. Mr. Drake stated that they would have a small dry well area underneath for overflow and bringing the irrigation up through the concrete. Mr. Gregory stated that it would be to compacted and it would do it all over again. Mr. Drake stated that there would also be an internal irrigation that would be used. Commissioner Lopez stated again that a drain of some sort was needed. Commissioner Lopez questioned the size of the palm trees proposed for the front of the building. He indicated that they appeared to be only one foot or less from the building and didn't feel that they could get the palms in that location. The Commission and the Landscape Manager discussed the size and location of the trees. Mr. Knight indicated that it would take a higher level of scrutiny to get things in and get it close enough that it might have a chance of working. Action: It was moved by Commissioner Lambell, seconded by Commissioner DeLuna, to grant approval subject to: 1) the landscape plan being reviewed and approved by the Landscape Specialist; and, 2) the Conceptual Grading Plan being resubmitted to show the requested comparative data and dimensions of adjacent properties to the satisfaction of the Public Works Department. Motion carried 5-0-1-1, with Commissioner Vuksic abstaining and Commissioner Hanson absent. GAPlanningWanine JudykftM FdWARC Mlnaies'20071AR07091 lmn.00C Page 7 of 8 DRAFT MINUTES PALM DESERT PLANNING COMMISSION OCTOBER 16, 2007 VI. VII. VIII ORAL COMMUNICATIONS None. CONSENT CALENDAR A. Case No. PMW 07-18 - DAVID AND LOIE BUTTERFIELD, Applicants Request for approval of a parcel map waiver to merge Lots 5, 6 and 7 of Tract 25296-5 within Bighorn, also described as 108, 110 and 112 Lantana View. Action: It was moved by Commissioner Tschopp, seconded by Commissioner Tanner, approving the Consent Calendar by minute motion. Motion carried 5-0. =M PUBLIC HEARINGS Anyone who challenges.any hearing matter in court may be limited to raising only those issues he, she or someone else raised at the public hearing described herein, or in written correspondence delivered to the Planning Commission at, or prior to, the public hearing. A. Case Nos. VAR 07-01 and PP 07-08 - A & H MANAGEMENT, Applicant Request for a recommendation to the City Council for: the approval of a Variance to Section 25.28.060 Minimum Street Frontage Setback of the Zoning Ordinance to allow an encroachment into the required 2:1 street frontage setback ratio and to allow a two -foot six-inch encroachment into the minimum five-foot street frontage setback; and a precise plan to construct a 15,499 square foot two-story commercial retail restaurant building including a 36-foot tower element located at 73-399 El Paseo on the southwest corner of Lupine Lane and El Paseo. Ms. Schrader reviewed the staff report and recommended that Planning Commission recommend to the City Council approval of Case Nos. VAR 07- 01 and PP 07-08. 2 o0 DRAFT MINUTES PALM DESERT PLANNING COMMISSION OCTOBER 16 2007 Commissioner Schmidt asked about access to the restaurant upstairs. She asked if there would be an elevator or escalator. Ms. Schrader replied that there would be an elevator located in the rear, as well as stairs on both sides. Commissioner Tschopp asked if there was a formula used to come up with the $75,000 parking fee. Ms. Aylaian explained that she consulted with the operator of the courtesy cart program and determined that the cost to purchase one new cart would be $15,000 and an operation cost of approximately $60,000 per cart per year, which seemed a reasonable fee. She indicated that long term there will be parking issues in the El Paseo District and the City has engaged an engineer to conduct some studies of feasibility for locations of a parking structure and what it would cost. As new projects on El Paseo are proposed, and there are a number coming up in the coming months, staff will be looking for a contribution that will go toward a City -owned public parking structure. It isn't far enough along to identify a location or a specific project, so it was a little nebulous to ask them to participate in the cost on a per stall basis in a parking structure that hasn't been identified. So for this case in particular, it seemed reasonable to suggest that a courtesy cart be added and the operating costs be covered as well because it really does make more flexible the use of parking areas along El Paseo. The cart program had 50,000 riders last year and has been pretty successful and it was felt that people will be able to park a little further away and use the courtesy carts to get around the fact that there isn't parking right in front of their destination. Commissioner Tanner asked if notifications were sent to the nearby condo owners and if there was any opposition or concerns received. Ms. Schrader indicated that no negative responses were received from the notice, which appeared in the paper and through mailers. Commissioner Tanner asked if this was done recently and if the condo owners were permanent residents or seasonal. Ms. Schrader said she didn't know, but knew the mailing for the radius was done. Commissioner Tanner asked about the rear parking in between the proposed restaurant / retail and the condo property line. He asked if that would be used by customers. Ms. Schrader explained that the plan provides for a driveway and then the actual shared parking was in the rear. She displayed a plan showing parking and pointed out the 122 spaces. Commissioner Tanner said he was concerned, although there hadn't been any complaints yet, about the parking on the southern border. Ms. Schrader indicated there are carports, 35-36 feet, and then the landscaped area. Commissioner Tanner said that shouldn't be a problem. Commissioner Limont asked if, based on last season, there was an issue with parking. Ms. Aylaian said there are parking problems in specific areas; 3 DRAFT MINUTES PALM DESERT PLANNING COMMISSION OCTOBER 16, 2007 Presidents Plaza parking lots typically in season are pretty congested and hard to get into and it was anticipated that a number of the uses being proposed will intensify the need for parking in other areas. But right now, Presidents Plaza has the most congestion. On page 2, Chairperson Campbell noted that Buildings 1 and 2 have a parking lot in the rear with 96 parking spaces. Ms. Schrader explained that the entire amount is 122 total for the new proposed parking area and the existing. Chairperson Campbell indicated that there was no construction behind Building 2; that remained the same. Building 3 is the one they were speaking. about. Looking at the design, the restaurant would not be as large on the first floor, but there would be the new building, and that is why they are eliminating parking behind the new building, whereas currently there is parking behind the restaurant. But they were eliminating the parking from Lupine to Building 2 where this building will be built. Ms. Schrader agreed that the current Picanha building has existing parking and that parking will be eliminated. Chairperson Campbell reiterated her concern that they would have a restaurant that is a smaller size, it currently has more parking, and now this building will have 15,000 square feet and they were eliminating that parking. They would have a lot of retail going in, and that retail staff thought will be closed at 5:00 p.m. or 6:00 p.m., and then they would have enough parking for the restaurant. She didn't think that would be the case, because the businesses will be open because the restaurant is there. Then they have the Gardens, so now if there isn't enough parking here, they would go.into the Gardens section and she didn't think that was fair. She could see a parking problem on El Paseo, and during season there is a parking problem in the parking lots. Ms. Schrader agreed that there is a parking impact on El Paseo. Chairperson Campbell asked why this building needed to be extended to the south. Ms. Schrader thought that might be a question better answered by the applicant. There were no other questions for staff and Chairperson Campbell opened the public hearing and asked the applicant to address the Commission. MR. JOHN VUKSIC, Prest Vuksic Architects, came forward. To answer the concerns about parking, he stated that when they did the design for this project, it wasn't their intent to have too much building for the site. The parking lot that is there now is about 20% utilized; he wasn't sure why, but guessed it might be because people didn't know it was there. But the buildings are about 80% occupied and the parking lot only 20% utilized. When they did the calculations, they did them based on their historical method of doing these calculations. A good example was across the street at El Paseo Square, which is where Office Max, Table Top Elegance and Norwalk Furniture are 13 DRAFr MINUTES PALM DESERT PLANNING COMMISSION OCTOBER 16 2007 located. Those calculations were done taking the street parking into account. Those are real parking spaces adjacent to the property. This was done the exact same way; the only difference was that they got them for free and now they had to pay for them. At El Paseo Square there has never been anything even resembling a parking problem and they anticipate this to be much the same based on how much the parking lot is currently used. There are a lot of empty parking spaces there. Chairperson Campbell didn't think they could compare the parking for the two projects. They had talked about the El Paseo Square Highway 111 frontage and building a couple of restaurants there. If those do come along, then they are taking those parking spaces away. Also, they really couldn't compare the existing Coffee Bean to a restaurant, in addition to the seven tenants that will be there, and comparing it to El Paseo Square. All these seven tenants are retail and they will be parking and will be finding those parking spaces which he said are not being used right now. Mr. Vuksic thought that with the street parking adjacent to the property, they are parked at 4/1,000, which is the standard. And they have quite a bit less than 20% for restaurant use, which also, although it isn't written anywhere, has been the standard that has been used by the City. As far as those numbers go, they are in compliance with parking calculations. Commissioner Schmidt asked if he remembered how many total parking spaces there are in the Office Max/Norwalk Furniture parking lot. Mr. Vuksic wasn't sure, but thought around 240. Commissioner Tanner asked if any of the tenants were secured at this point, potential tenants, or if he had a restaurant in mind. Mr. Vuksic answered that he wasn't aware of a restaurant. Commissioner Tanner asked if the restaurant would cater to a lunch and dinner crowd, specifically dinner, or a combination. Mr. Vuksic didn't know; if it catered to the lunch and dinner crowd, the dinner crowd would probably be the bigger crowd. Commissioner Tschopp noted that the staff report indicated that the awnings are for demonstration only and might not be a part of the building. In his 5 DRAFT MINUTES PALM DESERT PLANNING COMMISSION OCTOBER 16, 2007 personal opinion, they added a lot to the building. If they didn't have the awnings, he asked what might be proposed there. Mr. Vuksic said he would propose the awnings, however, they would like the tenants to have a chance to design the awnings to suit their businesses and have their own identity in the awning instead of dictating their awning to them. They would still have control of the design as the owner's representative, as they've had on other projects, and they would still need to meet a standard that they accept, as well as Architectural Review Commission. Commissioner Tschopp asked if Mr. Vuksic knew how tall the current Picanha building is on the site right now. Mr. Vuksic guessed the existing Picanha building was less than 20 feet. Chairperson Campbell noted that the pad was elevated from the sidewalk, so it looks taller. She indicated that the proposed building would excavate down to the level of the other buildings. Mr. Vuksic confirmed it would be lowered to the sidewalk level as opposed to the existing raised patio. Chairperson Campbell asked for confirmation that they want to construct a building in line with Buildings 1 and 2 along the sidewalk. They would have the same size sidewalk as the other buildings and along Lupine they would have the same size sidewalk all the way around. Mr. Vuksic said that was correct. He said they were within the setback on El Paseo, it was Lupine that was a little odd. They were simply proposing that the setback on El Paseo, which is to the building and planning code, be carried around onto Lupine, as opposed to having a bigger sidewalk on Lupine. Chairperson Campbell thought that was fine. There were no other questions of the applicant and Chairperson Campbell asked if anyone wished to speak in FAVOR or OPPOSITION to the application. There was no one and the public hearing was closed. She asked for Commission for comments. Commissioner Limont explained that height is always a concern when it comes to building in Palm Desert, especially on El Paseo. One of the best parts of El Paseo is that people can actually walk along the sidewalks and see the mountains. It's just one of the best parts of El Paseo. But she felt the 0 _F DRAFT MINUTES PALM DESERT PLANNING COMMISSION OCTOBER 16, 2007 applicant had done a terrific job with this building. Despite the fact that she didn't think that was a tower element, but a roof line, she thought they did a really good job architecturally, with balance and with the setback, and although she would love to see it at 30 feet, it worked at 36, so she would be in favor because they put in the effort to mitigate some of the issues with the height. Commissioner Schmidt stated that it is a great project and she was very much in favor of it. As she understood the roof, she shared Commissioner Limont's concern. She understood that from the north to the south coming down to El Paseo there is about a five-foot drop from one end to the other. That rendered that roof lower than it would if that was a flat grade from the front to the back of the building going up toward the condos. So it was like it was in a hole. That was the main reason she didn't object to the roof. She thought it was an interesting element and a beautiful project. She did not share the concern that parking is a problem. She thought it would be alright and that it belonged there and looked good. Commissioner Tschopp concurred that it is a very beautiful building, will be a great addition to the street, and will help anchor it. He was in favor. He did have a concern about parking in that there have been many nights he has been there and parking is a real issue in that area. Just as a precaution, he said he would like to see them add an agreement with the applicant that they will work to take care of any parking deficiency that may occur in the future, and this could include things they have done with other projects such as requiring employees to be brought in from another parking lot, car pooling and things of that nature to help alleviate parking congestion in that area. They've given away those spaces along El Paseo and Lupine several times now and he thought it will be a problem, but he also thought the project would be a great addition and was in favor. Commissioner Tanner also concurred. He thought this would be a great addition to El Paseo and will clearly enhance our major street in Palm Desert. He felt Mr. Vuksic created a great showcase and he was also in favor. Chairperson Campbell concurred as well, although she still had concerns with the parking. She thought it would always be a problem, and wanted it to be a problem, but one that should also be corrected for everyone on the street. Regarding the $75,000 parking fee for the El Paseo courtesy cart or the construction of a parking structure, a parking structure would be the best of the two. She could see behind Building 1 there is an area where a parking structure could be built. She still felt parking would be a problem and agreed 7 MINUTES ®RAFT PALM DESERT PLANNING COMMISSION OCTOBER 16, 2007 with Commissioner Tschopp that they should include something to address future parking; otherwise, she was in favor. Chairperson Campbell asked for a motion. Action: It was moved by Commissioner Schmidt, seconded by Commissioner Tanner, adopting the findings as presented by staff. Commissioner Tschopp asked if that would be conditioned to have the applicant participate in a parking agreement to alleviate the anticipated parking shortage that they were granting the applicant at this time. Commissioner Tanner asked if they should do something during peak season. Chairperson Campbell and Commissioner Tschopp both said year round. Commissioner Tschopp noted that it had been done on other commercial buildings in the area. Ms. Aylaian said they typically do something like a parking management plan, and that is if they have a specific parking garage or parking facility. As Commissioner Tschopp indicated, they would require employees to park most remotely. Commissioner Schmidt asked if they wanted a stipulation in the approval that it would require them to build a parking structure in the future. Chairperson Campbell said no, not at this time. Commissioner Schmidt said she wasn't in favor of requiring the applicant to build a parking structure. Ms. Aylaian suggested that the language be something to indicate that at a future date, if a parking issue arises (in the sole judgement of the City Traffic Engineer), then the applicant will work cooperatively with the City of Palm Desert to establish a parking management plan to maximize use of other available public parking spaces. She thought it needed to be keyed into something. At this point there isn't a problem and they don't know that there will be a problem, but would like to require that they cooperate in the future if there is a problem. She also suggested that it would be up to the City to determine whether or not there is a problem. Commissioner Schmidt indicated that any contribution on their part in the future would not be on this site, but on another public site. Ms. Aylaian wasn't envisioning at this point that cooperation necessarily meant a financial contribution. The $75,000 contribution could either be used for the courtesy cart program or toward a parking structure. Future cooperation would be cooperation to implement a parking management plan. If they were wanting specific fees in the future, they might have to regroup and figure out how that would be implemented or based on. Commissioner Schmidt said if it is an agreement that indicates there is a future parking problem, that they would be part of the solution other than on their site, then her motion is okay. But she did not want to tie her motion to a parking structure. She didn't think that was fair. Chairperson I:l RAH MINUTES PALM DESERT PLANNING COMMISSION OCTOBER 16, 2007 Campbell said that wasn't what they were talking about. Ms. Aylaian didn't think there was any indication that would be the case. Commissioner Schmidt just wanted it to be clear. Commissioner Limont asked if this included the $75,000. Ms. Aylaian indicated that it was already contained in the conditions of approval. Chairperson Campbell noted there was a motion and a second and called for the vote. Motion carried 5-0. It was moved by Commissioner Schmidt, seconded by Commissioner Tanner, adopting Planning Commission Resolution No. 2457 recommending to City Council approval of Case Nos. VAR 07-01 and PP 07-08, subject to conditions as amended. Motion carried 5-0. IX. MISCELLANEOUS A. Informational discussion of upcoming Housing Element Update as required by the State of California. Mr. Stendell noted that this was an informational item to let the Planning Commission know that the City's Housing Element, as required by State law, is due to be updated by June 10, 2008. He said the City is in the beginning stages of the update and were selecting a consultant to work with us on the update. Staff wanted to bring it to the Commission's attention in case they saw any public outreach meetings in the near future, they wouldn't be surprised. He indicated that the Housing Element is part of the City's adopted General Plan, and the update requires a certain level of community outreach programs, getting a certain amount of input from commissions, committees, and the general public, so the process was beginning and staff wanted to let them know about it. He hoped to be before the Planning Commission in the spring of next year. He asked if there were any questions at this time about the City's current Housing Element and reiterated that this discussion item was to make them aware it was coming as mandated by the State, which must be complied with to keep going with our wonderful redevelopment projects. Chairperson Campbell thought it was very informative and wished it was more updated than 2000-2001. Action: None.