HomeMy WebLinkAbout1995-05-23 - AGENDA REPORTS - MH RENT STBILIZATION INCREASE (2)City Manager Approval
Item to bberr sente by:
iI ch II endison
UNFINISHED BUSINESS
DATE: May 23, 1995
SUBJECT: An appeal of the Manufactured Home Rent Stabilization Panel's approval
of a 1994 calendar year rental increase totaling 12.9%, granted to the
owners of Soledad Trailer Lodge mobilehome park ("Park"), The Park is
located at 18300 Soledad Canyon Road (Assessor's Parcel Nos. 2844-001-
038 & 039), and is zoned CC (Community Commercial). Project
Appellant(s): Carl Boyer, as a member of the City Council; and Bill Reed,
as a representative of the Park owners.
DEPARTMENT; Community Development
At its meeting of April 25, 1995, the City Council heard the above referenced appeals of the
Manufactured Home Rent Stabilization Panel's ("Panel") approval of a 12.9% rental increase to
be granted to the owners of Soledad Trailer Lodge ("Park"). Two and nine tenths of one percent
(2.9%) of the rental increase was to be effective as of December 1, 1995, based on the original
date of notice of the proposed rental increase, with the additional ten percent (10%) of the rental
increase to be effective as of March 1, 1995.
During the meeting of April 25, 1995, the City Council: 1) Continued the public hearing; and 2)
scheduled a field visit to Soledad Trailer Lodge for the study session of May 2, 1995. On the
aforementioned date, Mayor Darcy and three of the councilmembers toured the Park. During
their tour, the Mayor and councilmembers in attendance, by a 4-0 vote, closed the public hearing
and continued the item, for action, to the regular Council meeting of May 23, 1995,
After the close of the public hearing, it was explained to the residents who were present during
the Park tour, and to the manager of Soledad Trailer Lodge that no additional testimony
regarding the appeal(s) of the Panel's decision to grant the owners of the Park a 12.9% rental
increase would be accepted by the Council.
app�OdC D Agee h Item:_ �"
The Manufactured Home Rent Stabilization Panel recommends that the City Council:
1) Deny both appeals of the Manufactured Home Rent Stabilization Panel's decision
(Resolution MH95-001), thus upholding the Panel's recommendation and approving a
total rental increase of 12.9% to be granted to the owners of Soledad Trailer Lodge, of
which two and nine tenths of one percent (2.9%) is to be effective as of December 1, 1994,
based on the original date of notice of the proposed rental increase, with the additional
ten percent (10%) of the rental increase to be effective as of March 1, 1995; and,
2) Direct staff to prepare a resolution upholding the Panel's decision, for the Council's
consideration at the June 13, 1995, meeting.
ATTACHMENTS
Staff report for City Council meeting of April 25, 1995
Reading File available at City Clerk's office, including minutes of Panel meetings
GAC:RAH:JDR:lep
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AGENDA REPOF"
City
Item to be presented by:
11AMA 4.
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PUBLIC HEARING
DATE: April 25, 1995
SUBJECT: An appeal of the Manufactured Home Rent Stabilization Panel's approval
of a 1994 calendar year rental increase totaling 12.9%, granted to the
owners of Soledad Trailer Lodge mobilehome park ("Park"). The Park is
located at 18300 Soledad Canyon Road (Assessor's Parcel Nos. 2844-001-
038 & 039), and is zoned CC (Community Commercial). Project
Appellant(s): Carl Boyer, as a member of the City Council; and Bill
Reed, as a representative of the Park owners.
DEPARTMENT: Community Development
BACKGROUND
On November 9, 1994, the Manufactured Home Rent Adjustment Panel met in order to
consider a 90 -day notice of rent increase filed by the property owner(s) of Soledad Trailer
Lodge Mobilehome Park ('Park"). Through the 90 -day notice, the Park proposed a rent
increase of 22% to be effective December 1, 1994, which is a percentage of rental increase
approximately 19% higher than the Consumer Price Index of 2.9% set in January of 1994.
The owners of the Park had determined that a rental increase of 22% was justifiable due to
the decrease in the Park's net operating income .over recent years, due to the fact that the
Park had not been granted CPI rental increases for each calendar year since adoption of the
Manufactured Home Rent Stabilization Ordinance ("Ordinance"), and due to capital
improvements to the property performed since 1991.
The action of the Manufactured Home Rent Stabilization Panel was appealed by two parties.
The first appeal was filed on March 10, 1995, by Councilmember Carl Boyer as a
representative of the residents of the Park. The basis for this appeal is so that the City
Council may review the decision and so that the residents of the Park have an additional
opportunity to be heard. The second appeal was filed on March 23, 1995, by the Park
manager, Bill Reed, as a representative of the owners of Soledad Trailer Lodge. This appeal
was based on claims of an unfair board hearing, on the rules of appeal to the City Council
changing over time, flaws in the Ordinance, the decision of the Panel being viewed as a
compromise of power, failure of the Panel to grant adjustments deemed reasonable as
provided for in the Ordinance, and failure of the City Council to respond in a timely manner
to the vacancy rate of mobilehome parks in the City of Santa Clarita, inasmuch as suspension
of the Ordinance would have permitted the Park to have a greater rental increase. Both
letters of appeal are attached for your reference..
MANUFACTURED HOME RENT STABILIZATION PANEL ACTION
The meeting of November 9, 1994, was continued by the Panel to the meeting date of
December 14, 1994, at which time the Panel granted a 2.9% increase in rent to the owner(s)
of Soledad Trailer Lodge, retroactive to the month of October, .1994. However, City staff
records show that the specific motion made by the Panel was for the 2.9% rental increase to
be effective to the original date of notice, this date being December 1, 1994. Thus, the 2.910
rental increase granted to the owners of the Park on December 14, 1994, was approved to be
retroactively effective to the date of December 1, 1994, as opposed to the date of October 1,
1994. This modification was later reflected in the resolution of approval adopted by the Panel
in March of 1995.
During the December 14, 1994 meeting, the Panel also determined that a continuance of
Manufactured Home Rent Appeal #94-005 was appropriate, so that City staff could review
financial documentation submitted by the Park manager Bill Reed in order to assist the
Panel in determining whether the financial status of the Park warranted an increase in rent
as great as the 22% proposed by the owners of the Park. The Manufactured Home Rent
Adjustment Panel continued Appeal 494-005 to the date of January 11, 1995, at which time
the determination was to be made as to whether an additional increase in rent should be
granted to the owner(s) of Soledad Trailer Lodge.
In order to determine the existing financial status of the park, staff required that the Park
manager submit legal documentation to the City for analysis. Staff had forwarded a list of
information that was necessary for an appropriate fiscal analysis of the Park to the Park
manager, Bill Reed, Mr. Reed had responded by submitting documentation which contained
a portion of the information requested. The information submitted, though, was insufficient
for the fiscal review of the Park, thus, during the meeting of January 11, 1995, it was agreed
upon by the members of the Panel that after submission of the appropriate information, staff
would be given four days to review the documents, and would then return to the Panel on
February 8, 1995, in order to more accurately inform the Panel on the financial status of
Soledad Trailer Lodge. The additional information was not submitted in a timely manner,
although staff was able to complete a financial analysis of the Park within the time frame
originally requested by the Panel.
Per the Mobilehome Rent Stabilization Panel's request, staff performed a review of the
additional financial information provided by Soledad Trailer Lodge. As a part of the process,
an analysis was made of the Park's net operating income for calendar years 1991 through
1994, as defined in the Mobilehome Rent Stabilization Ordinance. This included a review
of financial documents which relate to the history of Soledad Trailer Lodge's net operating
income compared to industry standards. To verify information provided by the applicant,
amounts were compared to annual federal tax returns. Based on this review, staff concluded
that the documentation compiled to support a 22% increase in rent was reasonably accurate
and that calculations performed by the applicant in all material respects followed the
definition of the Ordinance for the calculation of net operating income.
During the meeting of February 8, 1994, the Panel approved a rental increase totaling 12.9%
to Soledad Trailer Lodge in a 3-2 vote, which the homeowner representatives and the
independent mediator supported. Two and nine tenths of one percent (2.9%) of the rental
increase was to be effective as of December 1, 1994, based on the original date of notice for
the rental increase, and the additional 10% of the rental increase was to be effective as of
March 1, 1995.
Three motions were considered by the Panel on February 8, 1995, of which the first two failed
in 2-3 votes. The fust motion was for a rental increase of 19.1%, in addition to the 2.9%
granted to the Park by the Panel on December 14, 1994. This motion would have provided
the Park with a total rental increase of 22%, which was the original rental increase proposed
by the Park. This motion was made and supported by the park owner representatives, The
second motion was for a total rental increase of 8.1%, due to the CPI increases in rent that
were not administered to the Park. The total CPI. percentages, since adoption of the
Manufactured Rent Stabilization Ordinance are as follows:
YEAR CPI
1992
4.1%
1993
3.5%
1994
2.9%
1995
1.7%
TOTAL 12.2%Q
In 1992, Soledad Trailer Lodge was granted a CPI rental increase of 4.1%, and although the
Park did not request rental increases for years other than 1992, the second motion made for
a rental increase of 8.1% is equal to the total. CPI increases deemed reasonable by the.
Ordinance, subtracting out for the 4.1% CPI increase granted to the Park in 1992. The third
motion, which was approved by a vote of 3-2, was for a total rental increase of 12.9%. This
motion was made by the mediator and was supported by the homeowner representatives of
the Panel. The total of a 12.9% rental increase was deemed reasonable by the Panel due to
both the written and verbal evidence presented to them over the four meetings of public
hearing. Over the course of these meetings, the residents submitted documentation and
provided testimony regarding the lack of maintenance of the property, while also discussing
negative personal experiences as residents of the Park under its current management system.:
Contrarily, the Park manager submitted documentation and provided testimony regarding
the depressed financial status of the Park, regarding capital improvements performed on the
site since 1993, and regarding CPI increases granted to the owners of the Park since adoption
of the Manufactured Home Rent Stabilization Ordinance.
Pursuant to the Manufactured Home Rent Adjustment Panel's direction on February 8, 1995,
staff prepared Resolution No.MH95-001 tentatively approving an additional 10% rental
increase to the owners of Soledad Trailer Lodge to be effective March 1, 1995, in addition to
a 2.9% rental increase granted to the Park owners on December 14, 1994, to be effective as
of December 1, 1994, based on the original date of notice. Resolution MH95-001 was
presented to the Panel on March 8, 1995, with the Panel approving the resolution with minor
modifications to the language of the findings as stated in the document. Section 1(C3) and
Section I(C4) were amended, with the Panel also requesting the addition of language in
Section 3(E) of the Resolution clarifying that the 12.9% rental increase was the increase
granted to the owners of the Park for the 1994 calendar year. This additional language
j allows the Park owners to pursue a rental increase for the 1995 calendar year, with the
inflation rate for rental increases this year at 1.7%.
The amendments listed above were added to Resolution MH95-001, which was approved and
adopted by the Panel in a vote of 4-1. The mediator, the homeowner representatives, and one
parkowner representative voted to approve the resolution.
In the adoption of Resolution MH95-001, the Panel took into account all relevant factors of
the case presented before them, and approved findings substantiating their decision as stated
in Section 1(C) of the resolution. Resolution MH95-001 is'attached for your reference.
RECOMMENDATION
The Manufactured Home Rent Stabilization Panel recommends that the City Council:
1) Deny both appeals of the Manufactured Home Rent Stabilization Panel's decision
(Resolution MH95-001), thus approving a total rental increase of 12.9% to be granted
to the owners of Soledad Trailer Lodge, of which two and nine tenths of one percent
(2.9%) is to be effective as of December 1, 1994, based on the original date of notice
of the proposed rental increase, with the additional ten. percent (10%) of the rental
increase to be effective as of March 1, 1995; and,
2) Direct staff to prepare a resolution upholding the Panel's decision, for the Council's
consideration at the May 23, 1995, meeting.
ATTACHMENTS
Appeal Letters
Resolution MH -95-001
Manufactured Home Rent Stabilization Panel staff report(s)
Reading File available at City Clerk's office, including minutes of Panel meetings
GAC:RAHODR
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