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HomeMy WebLinkAbout1986-11-03 RRC Minutes . \ A MINUTES PALM DESERT RENT REVIEW COMMISSION MONDAY, NOVEMBER 3, 1986 CIVIC CENTER COUNCIL CHAMBER * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * I. CALL TO ORDER Chairman Jonathan convened the meeting at 3:15 p.m. II. PLEDGE OF ALLEGIANCE - Commissioner Michael Isbell III. ROLL CALL Present: Vice Chairman Joe Gibbs Commissioner Lois Graham Commissioner Mike Isbell Commissioner Patti Power Chairman Sabby Jonathan Also Present: Doug Phillips, Deputy City Attorney Rick Erwood, Hearing Officer Jean M. Benson, Council Liaison Sheila R. Gilligan, City Clerk/Public Information Officer Mary P. Frazier, Secretary IV. APPROVAL OF MINUTES OF AUGUST 4, 1986 With Commission concurrence, approval of the Commission Minutes of August 4, 1986, was continued to the next scheduled meeting. V. NEW BUSINESS A. REQUEST FROM INDIAN SPRINGS MOBILEHOME PARK FOR HARDSHIP RENT INCREASE. On behalf of the entire Commission, Chairman Jonathan thanked Mr. Erwood for his clear, concise report of his findings and recommendation in this case. MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING NOVEMBER 3, 1986 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Mr. Erwood reviewed his report and findings and stated that at the end of the evidentiary hearing, he had advised both sides that they could request an additional public hearing if they thought it was necessary; otherwise, they were to direct any correspondence in writing to the hearing officer. He stated that they were not to submit responses to each other. However, Mr. Goldstein had submitted a letter dated September 17, 1986, (on file and of record in the City Clerk's office) which was not in accordance with these ground rules, but this information was not reviewed prior to the hearing officer making his report to the Commission. Upon questions by the Commissioners, Mr. Erwood responded that the park managers were a husband and wife whose salaries were being paid by the park owner. Their office hours were a typical 8-5 Monday-Friday work week with no one available during the weekend except by beeper. Upon question by Commissioner Graham regarding the wife's duties, Mr. Erwood stated that she had management duties when the manager was not present and also did bookkeeping and secretarial work and handled the petty cash disbursements. He said the management company also had instructed that the managers go to the bank and make a deposit once an excess of$300 was received at that location. This sometimes meant that two or three trips a day to the bank were made. He added that the park owner was paying for a management company in addition to the on-site managers and that the homeowners felt they were being charged twice for what was basically the same function. However, he as hearing officer did not consider it a double charge. Chairman Jonathan invited testimony from the homeowners' representative. MR. J. K. MORAN, Attorney at Law, 777 E. Tahquitz Way, Suite 200, Palm Springs, 92262, objected to the letter of September 17, 1986, from Mr. Goldstein and requested that it be stricken from the record and not considered by the Board in its dealings in this case. Mr. Phillips stated the objection was sustained without prejudice and instructed the Commission not to refer to the letter in question in any decisions made. Mr. Moran also objected to the document dated October 30, 1986 (on file and of record in the City Clerk's office) and stated that he had not had a chance to review it prior to the meeting. Chairman Jonathan responded that although both sides had been asked to submit any correspondence a week prior to the meeting, this was only so that the Commission could review it. It did not mean that no additional correspondence would be accepted after that deadline. Mr. Phillips added that the letters dated October 29 and October 30 (on file and of record in the City Clerk's Office) were rebuttals to the petition and the only prejudice in this case would be to the Commission because of 2 MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING NOVEMBER 3, 1986 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * receiving them at such a late date. He recommended that Mr. Moran's objection be denied, and the Commission concurred. Mr. Moran reviewed Mr. Goldstein's letter dated October 29, 1986, and offered the following comments: - With respect to Item #6 Landscaping, Mr. Moran stated that although Mr. Goldstein stated he was not trying to recover the expense of replanting the ice plant, he continues to do so. - With respect to Item #3 Legal Fees, Mr. Moran stated he felt the Hearing Officer was right in denying this expense. He said the park owner had indicated a settlement claim had been paid to resident Eunice Mowbray; however, in his review of park directories, he could not find a listing for this person. He stated that similar expenses had not been allowed by the Commission the previous year when the expense turned out to be a small claims expense. - Regarding salaries, Mr. Moran stated that management is not in close proximity to the park; they are two miles away, and the beeper system is far from satisfactory. He added that the management could only be beeped when in the park, the answering service did not pick up when called most of the time, and messages were not passed on to management. He also felt it was unreasonable for management to go to the bank three or five times per day and that the custom in other parks was that at least one member of the husband/wife team was available at all times. - Regarding capital expenses, Mr. Moran urged that the Commission concur with the Hearing Officer's findings that they should not be allowed until actually made. - Mr. Moran further stated he did not feel it was fair to spread the rent increase over 181 spaces instead of the 191 spaces in the park. Chairman Jonathan invited testimony from the park owner or representative. MR. JIM GOLDSTEIN, park owner, stated he felt Mr. Erwood had done an outstanding job during the evidentiary hearing and was very thorough in scrutinizing the park records. He stated that with the increases granted in previous years, he had tried to upgrade the park; he had the ice plants replanted and had seen for himself that it had been done. He reviewed in detail his letters dated October 29, 1986, and October 30, 1986. In response to Mr. Moran's statement that Eunice Mowbray was not a resident, Mr. Goldstein stated that she was the guest of one of the homeowners and that he had been forced to pay the claim. He added that he did not feel this cost was unreasonable. Mr. Moran asked that, in considering a rent increase, the Rent Review Commission keep in mind that many of the homeowners are living substantially or entirely on Social Security, with a 3% projected increase in 3 MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING NOVEMBER 3, 1986 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Social Security payments for 1986. He said an increase would create a hardship for the homeowners. He also stated that payments for small claims were covered by liability insurance for the park and should not be passed on to the homeowners. Mr. Goldstein responded that the amount he was forced to pay was because there was a deductible portion in the insurance policy. Chairman Jonathan declared the public hearing portion of the meeting closed and called a recess at 4:45 p.m. The meeting was reconvened at 5:00 p.m. The Commission reviewed and discussed the recommendations in Mr. Erwood's report. The members agreed that inasmuch as the ice plants were now in, this would be an additional cost for the next year. As far as salaries, Chairman Jonathan stated that he did not feel the Commission should be making a determination as to whether or not the park owner was in compliance with another part of the law not governed by rent control. Commissioner Graham stated she felt the salaries were not unreasonable. Vice Chairman Gibbs stated that the Commission must decide whether or not it agrees with the Hearing Officer's findings regarding salaries, and the issue was not whether or not the salaries were in accordance with the Health and Safety Code. Chairman Jonathan stated he felt the costs were reasonable for the level of services rendered, but the services rendered were not in accordance with the Health and Safety Code. Mr. Erwood stated that the law requires a certain level of services at a mobilehome park with 50 units or more - a resident manager or someone there for emergency type services. He felt reasonable compensation for services the residents are receiving was 50%of the amount requested by the park owner. The Commission members agreed with Mr. Erwood's recommendation. As far as spreading the increase to only 181 units instead of the ntire 191, Mr. Erwood stated that 10 of the units were subject to lease and that the ordinance indicated the rent increase would not apply to those units. As far as pre-approval of capital improvements, Vice Chairman Gibbs stated that the Commission had spent some time discussing this issue and had agreed that the park owner would get pre-approval if actual costs were then submitted to the City Attorney, and it would also be amortized per the normal amortization schedule. Mr. Phillips stated that if the Commission did give pre-approval for the capital improvements requested, it might wish to determine an amortization 4 MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING NOVEMBER 3, 1986 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * time for the mobile home since he did not see anything appropriate on the amortization schedule. Vice Chairman Gibbs moved to grant pre-approval of the requested capital improvements for lighting, carpeting, seepage pits, and the mobile home as listed in Mr. Goldstein's October 29, 1986, letter to the Rent Review Commission, subject to the following: 1) Verification of expenses for each capital improvement; and 2) An appropriate amortization schedule for the mobile home would be determined by the Hearing Officer, with a normal amortization schedule to be used for the other three requested capital improvements. Motion was seconded by Commissioner Graham and carried by unanimous vote of the Commission. Commissioner Graham moved to adopt the findings and approve the recommendation of the Hearing Officer for a $10.15 per space per month rent increase. Motion was seconded by Commissioner Power and carried by unanimous vote of the Commission. Chairman Jonathan asked what portion of the Hearing Officer's bill would be paid by the homeowners and what portion by the park owner. Vice Chairman Gibbs added that there were two bills to be considered: 1) the cost for Mr. Erwood to act as Hearing Officer and prepare findings and recommendation to the Commission; and 2) the cost for Mr. J.K. Moran for his preparations for an evidentiary hearing prior to his removal as Hearing Officer by the Rent Review Commission. Mrs. Gilligan reported that the City had already paid Mr. Moran's bill in the amount of $2,237.75, and Mr. Erwood had estimated that his bill would be approximately $3,125.00 for this hearing. Mr. Moran's bill was paid with the understanding that the City would be reimbursed from either the homeowners registration fee fund or by the park owner. She added that it was up to the Commission to determine what percentage would be paid by each side. Upon question by Chairman Jonathan, Mr. Erwood responded that he had prepared for the hearing on his own and had not used Mr. Moran's work; however, he stated he had read Mr. Moran's letter to Mr. Goldstein citing legal authority and had also reviewed the case file. Commissioner Graham was excused from the meeting at 5:45 p.m. Vice Chairman Gibbs moved that the total costs for both Mr. Moran and Mr. Erwood be divided equally between the homeowners and the park owner. Motion was seconded by Commissioner Power and carried by a 4-1 vote, with Commissioner Graham ABSENT. Councilmember Benson expressed concern that the amount to be taken out of the homeowners' registration fee fund was more than was collected for this particular park. She asked what would happen if and when the last park comes in with a petition for hardship rent increase and there are no funds available in that account. Chairman Jonathan responded that when the Commission was first considering this registration fee fund, it estimated future costs for these hardship rent increase hearings. He added that it was understood that if the fund was insufficient, the City would pay the difference. 5 MINUTES PALM DESERT RENT REVIEW COMMISSION MEETING NOVEMBER 3, 1986 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Mrs. Gilligan added that the City Council sets the actual dollar amount for the registration fee by resolution and that it could be changed to a higher amount next year if necessary. VI. ADJOURNMENT Upon motion by Commission Gibbs, second by Commissioner Isbell, and unanimous vote of the Commission members present, Chairman Jonathan adjourned the meeting at 5:50 p.m. RESPECTFULLY SUBMITTED, MARY P. ZIER, SECR ARY 6