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CONSIDERATION OF AMENDING CHAPTER 18 (MOBILEHOMES) OF THE CITY’S MASTER FEE SCHEDULE
RESOLUTION NO. 2017-072 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING CHAPTER 18 (MOBILEHOMES) OF THE CITY’S MASTER FEE SCHEDULE, SETTING THE ADMINISTRATIVE FEE FOR RENT CONTROL SERVICES AT $25 FOR FISCAL YEAR 2017-18
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RECOMMENDED ACTION
Recommended Action
Council conduct the public hearing and adopt the resolution.
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SUMMARY
Effective August 18, 2011, the City, under Chula Vista Municipal Code (CVMC) Section 9.50.030, established an Administrative Fee to be assessed upon all eligible mobilehome residents receiving benefits and services under CVMC 9.50 (“Chapter 9.50”) - Mobilehome Park Space Rent Review. Chapter 9.50 requires that the Administrative Fee be established annually by the action of the City Council. At this time, staff recommends reducing the fee from $30 to $25 for fiscal year 2017-18 (“FY 18”).
ENVIRONMENTAL REVIEW
Environmental Notice
Environmental Notice
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
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Environmental Determination
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
BOARD/COMMISSION RECOMMENDATION
The Mobilehome Rent Review Commission considered this item at their April 20, 2017 meeting and recommended that Council adopt the fee for FY 18 at $25 by a vote of 4-0.
DISCUSSION
On July 19, 2011, City Council approved an amendment to Chapter 9.50 - Mobilehome Park Space Rent Review, establishing an Administrative Fee to provide funding for implementation of the ordinance. This Ordinance offers unique benefits and services solely to those eligible mobilehome residents. As part of the annual Administrative Fee update process, staff is reporting out on prior year revenues and expenditures to establish the amount necessary to recover the costs of administering Chapter 9.50. This report provides an update on revenues and expenditures for July 1, 2016 - June 30, 2017 and recommends the fee for FY 18.
Fiscal Year 2016-17 (“FY 17”) Projected Revenues and Expenditures
Anticipated revenues for FY 17 were expected to be $63,000 based on 2,100 residents paying the fee at $30. Actual payments were received from 2,247 eligible spaces for total collected revenues of $67,410. A fiscal analysis of revenues and projected expenditures is provided in Table 1 with a description of the activities following.
Table 1
FY 2017 BUDGET SUMMARY
Staff Charges
Administration of Chapter 9.50 is projected to result in staff charges of $30,000 for FY 17. Staff provided the following services:
• Ombudsman Activities (Office Visits & Mobilehome Information Line) - Staff responded bilingually to all inquiries related to Chapter 9.50.
• Resident Invoicing Preparation - A June 1st billing and/or ineligible notice was sent to all mobilehome/trailer residents and an August 1st reminder notice was sent to all residents with a balance due. Set-up costs to outsource billing were incurred in FY 17.
• Fee Collection - Collection and processing of fee payments received.
• Database Maintenance - Maintained the database with current resident information.
• Mobilehome Rent Review Commission (“MHRRC”) Educational Meetings - Provided general ombudsman related activities to residents and held informational meetings with the MHRRC.
• Annual Permissive Rent Calculations - Twice a year, the Consumer Price Index (CPI) is released and notification was sent to all park owners and managers of the annual permissive rate as calculated under Section 9.50.050.
• Rent Review Inquiries/Hearing Administration - Staff coordinated inquiries regarding rental increases between residents and park management as needed.
Experts
No rent review hearings or hiring of experts was necessary during FY 17. Funds collected will be available to appropriate in FY 18 for hiring of experts if a second rent review case is required. The lack of hearings also resulted in staff time reimbursement savings to the program.
Administrative Costs (Postage, Office Supplies and Printing)
In FY 17, the billing of the administrative fee was contracted out for the first time. Contracting out the preparation and mailing of invoices resulted in an increase in contract costs but a decrease in City staff charges. Based on the number of payments received this year, and efforts to increase program efficiency, staff will continue to contract out billing services. Additional annual administrative costs include CPI notices and publication of this hearing notice.
Fiscal Year 2017-18 (“FY 18”) Budget and Administrative Fee
Staff recommends the fee be reduced from $30 to $25 dollars for FY 18 due to the current fund balance and recent rent review hearing activity. Important factors taken into consideration include:
• Since the ordinance amendments in 2012 no rent review cases have been heard for existing residents. Prior to amendments, existing resident rent review cases occurred approximately every other year and therefore staff has forecasted expenditures with one case every other year.
• Staff costs to administer the fee and rent review services have stabilized and therefore a reduction of approximately $25,000 in staff time is reflected in the FY 18 budget.
Table 2 provides a summary of the FY 18 budget which anticipates one rent review case and a contingency of $25,000 for expert time related to one additional case if needed, with an estimated ending fund balance of $136,714.
Table 2
FY 2018 BUDGET SUMMARY
With the fee at $25, annual revenues alone will not cover costs if heavy administrative costs are expended in a given year. Therefore fund balance would be used to maintain administrative services. Given current workload and few anticipated cases, staff has projected being able to maintain the fee for several years at this rate and will make further considerations to changes in the fee if no cases are heard in the next few years.
DECISION-MAKER CONFLICT
Staff has determined that the action contemplated by this item is ministerial, secretarial, manual, or clerical in nature and, as such, does not require the City Council members to make or participate in making a governmental decision, pursuant to California Code of Regulations Title 2, section 18704(d)(1). Consequently, this item does not present a conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter.
LINK TO STRATEGIC GOALS
The City’s Strategic Plan has five major goals: Operational Excellence, Economic Vitality, Healthy Community, Strong and Secure Neighborhoods and a Connected Community. Amending the Administrative fee for Mobilehome Rent Control Services supports Strategy 1.1 of the Operational Excellence Goal: Uphold a Commitment to Fiscal Health.
CURRENT YEAR FISCAL IMPACT
All staff time and costs to prepare this report were included in the adopted fiscal year 2016-17 budget. No additional appropriation is required.
ONGOING FISCAL IMPACT
Staff time and costs associated with the administration of Chapter 9.50 are anticipated in the collected fee and will be adopted as part of the fiscal year 2017-18 budget.
ATTACHMENTS
1. Proposed Chapter 18 of the Master Fee Schedule
Staff Contact: Stacey Kurz, Senior Project Coordinator