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HomeMy WebLinkAbout1983-09-27MINUTES ADJOURNED MEETING OF THE PALM DESERT CITY COUNCIL TUESDAY, SEPTEMBER 27,1983 CITY HALL COUNCIL CHAMBERS * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * I. CALL TO ORDER Mayor Puluqi convened the Adjourned Meeting of the City Council at 9:05 a.m. II. ROLL CALL Present: Excused Absence: Councilman Phyllis Jackson Mayor Pro-Tem Walter H. Snyder Councilman S. Roy Wilson Mayor Romeo S. Puluqi Also Present: Richard S. Kelly Carlos Ortega, Acting City Manager Ray Diaz, Director of Environmental Services Sheila R. Gilligan, City Clerk III. NEW BUSINESS A. REQUEST FOR AUTHORIZATION TO EXECUTE AN AGREEMENT WITH BOB DOWNS IN AN AMOUNT NOT TO EXCEED $2,500 FOR THE RECONSTRUCTION AND REDESIGN OF THE CITY'S ENTRANCE SIGN AT HIGHWAY 111 AND PAINTERS PATH. Mayor Puluqi reported that this was an agreement with the City of Palm Desert to renovate the entrance sign with volunteer labor. He said the Exchange Club had assumed the lead role in coordinating the effort. Councilman Wilson moved to approve the request and authorize the Mayor to execute the agreement. Snyder seconded the motion, and motion passed by unanimous vote of the Councilmen present. IV. CONTINUED BUSINESS A. REQUEST FOR CONSIDERATION OF GUIDELINES FOR RENT REVIEW COMMISSION. Mayor Puluqi reported that he had received a request for changes in the guidelines from the Indian Springs Mobile Homeowners Association. He emphasized the fact that whenever a law or regulation is passed, it should be as airtight as possible. In reviewing this request, he had some questions regarding the recommended changes. Mayor Puluqi went on to say that he did not see that 50% is too high, and the 75% automatic raise would give owners 125%. The 75% of the Cost Price Index would be nullified if there is no increase of the CPI. He asked the City Attorney is there is any merit to this recommended change. Jeff Patterson explained that the 75% and the 50% figures were not the same, and were multiplied by different portions of the accounting. Under these guidelines, the owners were automatically entitled to a rent increase of up to 75% of the increase in the Cost Price Index. If the park owners' net income has not increased by 50%, then he can apply to the Commission for a Hardship Rent increase. Mr. Patterson MINUTES ADJOURNED CITY COUNCIL MEETING SEPTEMBER 27, 1983 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * went on to explain that these guidelines have been adopted by the City of Los Angeles, and recently were upheld in a Court of Appeals. With regard to depreciation of capital expenses referenced in Section 102c, Mr. Patterson said that the Commission had gone over this section in detail and had arrived at a medium ground position. The Commission decided there should be depreciation of up to $100 per rental unit, more or less. For instance, if the streets in the park are bad, the expenses for this improvement would not come entirely out of the owner's pocket. Mayor Puluqi questioned street improvements as being a capital expense, stating that this should come under repair and maintenance. Mr. Patterson replied that it would depend on the extent of the repair. Another example of a capital expense would be the construction of a swimming pool. There are guidelines as to what can be claimed as a capital expense. Mayor Puluqi asked that if the park owners are going to be using this swimming pool and charge the tenants for it, shouldn't there be a consensus of the tenants as to whether they want the improvement or not? Mr. Patterson replied that this is one thing that has been suggested in the proposed changes as to whether or not we should allow 51% of the tenants to determine what improvements the owner is allowed to make on his own property. The Commission felt that if this was included in the guidelines, it would not hold up in court as it may be construed as infringement of property rights. Mayor Puluqi suggested specifying any capital improvements to improve the health and welfare of tenants. Mr. Patterson said that this would have to be researched. With regard to the 50% figure as being excessive, Mr. Patterson stated that the Commission had deliberated over this for over three hours, and that although the percentage could be as low as 40%, therefore giving park owners a 10% break, the Commission decided to keep it at 50% as they felt this would be fair to everyone. Mr. Patterson closed by explaining that the operating expenses and property tax expense increases were not reviewed in great detail, but were adopted from several other cities' guidelines. He added that these guidelines can be studied and reviewed further, and future recommendations would be submitted to Council for approval. Mayor Puluqi asked Council for their comments. Councilmember Jackson agreed with Mr. Patterson that the Commission should not include a clause stating that a 51% consensus of the tenants is required for capital improvements as this would be an infringement of property rights and immediately contested in court. Mayor Puluqi invited comments from the audience. Ken Paine, Indian Springs Mobile Homeowners Association, spoke to Council. He stated that he had attended the Commission meeting a week ago, and it was his impression that the Commissioners did not fully understand the guidelines and that this was a bad omen. He felt that the calculations governing the allowable rent increases are too complicated. Mr. Patterson explained that the increase is figured on the most current CPI available at the time of filing, subtracting that percentage from the year-end percentage of the previous year, and dividing the resulting figure by the CPI for that previous year. Councilman Wilson suggested there might be some simpler table with which to calculate this percentage. Mr. Paine went on to say that with the present guidelines, the owners would hesitate to make any capital improvements such as a tennis court -2- MINUTES ADJOURNED CITY COUNCIL MEETING SEPTEMBER 27, 1983 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * without getting his money back. Mayor Puluqi asked Mr. Paine if he was representing the entire mobile home community or speaking for himself. Mr. Paine replied that there were three other property owners present. He went on to state that the guidelines specifically disallowed depreciation on property. Regarding Section 102c, he felt that this rewarded the property owners for poor maintenance and repair. Under Section 103b, the owner is guaranteed 50% of the gross profit. If the owner makes that kind of profit, he should be exempt from the hardship rent increase. The property taxes should not be assumed to increase at 2% per year. Mr. Adolph Hart of Palm Desert Mobile Estates addressed Council. He stated that he was very much in agreement with the points that Mr. Paine had brought out. It was hoped that some improvements could be made so that the full intent of the Review Board can be carried out with a minimum of confusion. He felt that the Ordinance passed by the Council is very sound and should not be ruined by adding things to it that would nullify the intent. Councilman Wilson asked where the assumptions came from in Section 105. Mr. Patterson explained that those figures have been adopted from other guidelines, reviewed briefly by the Commission, and determined to be fairly accurate. While some people would think these percentages are too high or excessive, the Commission has merely followed the guidelines of other cities, those having been proven sound in a Court of Appeals. Mr. Patterson felt that it would be better to leave the figures as presented and change or modify them in the future if necessary. Without these conditions, the ordinance would weakened. Councilman Wilson asked if the Section could be worded to assume that the operating expenses increase up to 10% per year, or up to but not to exceed 10%. Mr. Patterson suggested these figures could be assumed unless there are facts that would justify some other increase. Mayor Puluqi felt that 10% increase in operating expenses was excessive. He agreed with Wilson that the wording of "not to exceed" would be less restrictive. Councilmember Jackson stated that going above or below a certain percentage would be a more fair way of doing it, particularly when people are faced with fluxuating utility costs of up to 20%. Mr. Patterson replied that these are not set percentages and could be researched by the Commission. Mayor Puluqi asked for a consensus by Council of adding the wording "not to exceed". Jackson felt this was an unfair assumption. Wilson commented that should an owner be able to justify higher expenses, then he would qualify for a hardship increase. Mr. Patterson stated that based on these assumptions, the Commission could make a fair assessment of the applicants' case. Wilson felt that adding "not to exceed" would be fair, and if owners could prove otherwise, they could qualify. Jackson commented that these are not hard and fast rules, but guidelines for the Commission. Councilman Snyder said that the key word in Section 105 is "assume", and that it gives the opportunity for both sides to take exception to these figures. He felt that the Commission should have a guideline that would ultimately stand up in court and be usable. He felt that the Commission should have more time to evaluate and modify the guidelines. Jackson asked Patterson if the Commission had reviewed Section 101 and make an attempt to simplify the calculations. Patterson said they did go over the figures, although they were all assumptions due to not having an updated CPI figure. He went on to clarify the steps taken to arrive at a certain increase amount. Jackson moved to approved the guidelines as submitted. Motion died for lack of a second. Wilson moved to approve the guidelines as amended to insert "not to exceed" in Section 105 and to ask the Rent Review Commission to reconsider rewording Section 101 for specific clarification. Snyder seconded. Motion carried by unanimous vote of the Councilmen present. -3- MINUTES ADJOURNED CITY COUNCIL MEETING SEPTEMBER 27, 1983 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * IN. OLD BUSINESS A. REQUEST FOR AUTHORIZATION TO CLEAR MISCELLANEOUS ITEMS RELATING TO THE CIVIC CENTER. Barry McClellan reported that this request entailed buying a new base station for the Building Department that would be compatible with the Public Works hook-up at a cost of $1200-1300. The total price for the equipment is $1,124.00 including tax. Therefore, the price, including relocating the radio antenna, is a total of $1,309.50. Wilson moved to authorize staff to maintain Motorola as a single source purchase in obtaining base station equipment and relocating and hook-up of the existing radio antenna for a total amount of $1,309.50. Snyder seconded the motion, and motion passed by unanimous vote of the Councilmen present. Ray Diaz reported that, as discussed in the last Adjourned Meeting, the cost of the wood paneling for the interior areas of the three buildings totalled $46,000.00. Council had asked that staff review this item and report to Council with a square footage cost. Since that time, the paneling in the central building had been eliminated, and only the two wings would be paneled for a cost of $19,000. The square foot price is approximately $10.00. The options are to panel, utilize wallcovering, or paint the walls. Mayor Puluqi stated that the square foot price was excessively high. Jackson agreed that the price was too high, and suggested that the paneling be entirely eliminated. The money saved could be utilized for other accessories; Council could consider the less expensive options without losing the aesthetics of the decor. Mayor Puluqi pointed out that he wished to get the building completed and staff moved in as soon as possible and that any wall treatment could be added at a later time. The issue of the fire-resistant storage vault was discussed. Charles Martin, the Civic Center architect, reported that if the originally planned computer room was made fire-resistant, it would cost an additional $3,000. The current plan was to make room 30 and 63 fire- resistant, and a decision must be made as to whether room 30 is to remain the fire-resistant storage room, or switch to room 35, the computer room, and make that a one -hour fire-resistant storage room. Sheila Gilligan was asked what the City Clerk's storage needs were, and she replied that the law states that the Clerk's office shall protect the City's records records from all hazards at all times. We currently have fire-resistant cabinets, and the cost of additional cabinets would run approximately $900 per cabinet. Jackson pointed out that the originally planned storage room was selected because of the large size, affording more storage space for increasing volumes of permanent records and files. The other room would then be utilized as an extra office. It was concurred that the larger room, room 35, would be utilized as the fire- resistant storage vault and that an additional charge for making it a one -hour room would be authorized. Martin also reported that the voting machine for the council chambers would cost approximately $1,100.00. Jackson moved that Council approve the purchase of the voting machine. Mayor Puluqi seconded the motion. Mayor Puluqi pointed out the merits of a voting machine in that the public would be able to clearly see how each Councilman voted on an issue. There was general agreement that the machine was a needed item for council meetings. Motion carried by a unanimous vote of the councilmen present. Charles Martin gave a status report on the Civic Center. The crews will be pouring the roof tomorrow on Building A, by Friday all the curbs should be in, grading will start Thursday for all the parking lots, the blacktop should be in by next week, the walkway to Building A and -4- MINUTES ADJOURNED CITY COUNCIL MEETING SEPTEMBER 27, 1983 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * benches will be done by Friday, the perimeter walks will be done next week, and carpeting will possibly be installed next week. Interior touch-up painting is scheduled for next week, and the exterior paint samples are on the C Building walls right now. It was requested by Carlos Ortega that Council adjourn to the Redevelopment Agency Meeting and reconvene the Adjourned City Council Meeting immediately thereafter. VI. ORAL COMMUNICATIONS - B None VII. REPORTS AND REMARKS A. CITY MANAGER N one B. CITY ATTORNEY None C. MAYOR AND MEMBERS OF THE CITY COUNCIL None VIII ADJOURNMENT Upon motion by Snyder, second by Jackson, and unanimous vote of the Councilmen present, Mayor Puluqi adjourned the meeting until completion of the Redevelopment Agency Meeting immediately following. Mayor Puluqi reconvened the Council meeting at 11:05 a.m. Mr. Ortega requested a motion by Council authorizing staff to put the Visitor Information Center out to bid. Upon motion by Puluqi, and seconded by Jackson, the motion carried by unanimous vote of the Councilmen present. Upon motion by Snyder, seconded by Puluqi, and unanimous vote of the Councilmen present, Mayor Puluqi adjourned the meeting at 11:06 a.m. ATTEST: -'SHEILA R. GIL AN, CIT ♦ ERK CITY OF PALM DESERT,LIFORNIA RO O S. PU LU . . MAYOR -5- MINUTES ADJOURNED CITY COUNCIL MEETING EXHIBIT "A" Indian Springs Mobilehome Owner Association 49.305 Highway 74, Space) 188 Palau Duwat, CA 92260 September 27, 1983 q,„" Subject: Changes requested in Rent Review Board Guidelines To: Rent Rewiew Board and Mr. Jeff Patterson Sept. 26,1903 101. Allowable Rent Increases Upon filing of an individual hardship petition by a landlord, the Commission shall permit rent increases, unless proscribed by law, such that the landlord's net operating income will be increased by fifty per cent (50) of the increase in the Coneumer Price Index (CPI) over the base year. The increase in CPI shall be calculated by sub tracting the CPI for December 1982 from the CPI for the most recently reported month at the time of filing of the petition , and dividing the resulting figure by the CPI for December 1982. CHANCE REQUESTED: We believe that the 50% figure le too high and with the 17% automatic raise gives the owner 125% raise which is exa cessive. The second sentence is very confusing. The calculation should be the same as the 75% automatic raise. 102. C Operating Expenses i. Capital expenses that are depreciable should not be allowed as operating expense. Depreciation of the property is not allowed in the Guidelines. 103. Rebutting the 1-resumption CHANGE REQUESTED: A. 1. a. Capital improvements should not be paid for by the tenants unless requested by 51% of the tenants. c. This rewards the owner for poor maintenance and repair. d. This is another break for the owner by ignoring the large savings in property taxes due to Prop 13 which was not passed on to the tenants. 103. B It shall be presumed that where net operating income is less than 50% of gross income in the base year, after making adjustments as permitted by Subsection A of this section, the landlord was receiving less than a fair return on property. In such a case, for purposes of determining base year net operating income, gross income shall be adjusted upward to twice the amount of adjusted base year operating expenses. CHANGE REQUESTED: This is a fantastic deal for the owners, gudrenteeing there a profit of 50% of gross income. This sounds like vintage Swanson. The least it should say is that if the owner wakes wore than 50% of gross income that he is not entitled to a hardship raise. 105. Schedule of increase in Operating Expenses. CHANCES REQUESTED We dont believe that operating expenses increase at 10% per year or that property taxes increase at 2% per year. :/ tr en Paine Chairman 346-732b