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2013-06-12 VHC MinutesMINUTES OF THE REGULAR VERNON HOUSING COMMISSION MEETING HELD WEDNESDAY JUNE 12, 2013,IN THE COUNCIL CHAMBER OF THE CITY HALL LOCATED AT 4305 SANTA FE AVENUE, VERNON, CALIFORNIA MEMBERS PRESENT: Eric Gustafson, William Davis, Michael Hughes, Henry Haskell, Hector Garcia, and John Kriste MEMBERS ABSENT: Melissa Ybarra The meeting was called to order at 6:07 p.m. by Chairperson Gustafson. Legal Counsel Stuart Leviton announced that there are no changes to the agenda. PUBLIC COMMENT Leviton announced that this was the time allotted for public comment. The Chairperson inquired whether anyone in the audience wished to address the Commission. No one responded. MINUTES 1. Minutes of the Special Vernon Housing Commission Meeting held March 27, 2013, to be received and filed. It was moved by Davis and seconded by Garcia to approve the March 27, 2013, Minutes. Motion carried, 6-0. NEW BUSINESS 1. Introduction of the new, professional, third party property manager, Solari Enterprises, Inc. pursuant to a one-year contract dated June 1, 2013. Legal Counsel Stuart Leviton introduced Gianna Solari and Diane Wehmeyer of Solari Enterprises, Inc. He advised that they will be reporting regularly to the Housing Commission. / / / / / / Vernon Housing Commission Meeting Minutes June 12, 2013 Page 2 of 6 2. Adoption of Market Rent Implementation Schedule Effective June 12, 2013. Recommendations: (1) Find that adoption of the proposed Market Rent Implementation Schedule Updated June 12, 2013, is exempt under the California Environmental Quality Act (CEQA) in accordance with Section 15061(b)(3), the general rule that CEQA only applies to projects that may have an effect on the environment; and (2) Establish new, lower market rental rates for all five Huntington Park units pursuant to recommendations from the new, professional, third party property manager, Solari Enterprises, Inc. that will be presented at the meeting. The Commission approved rates shall be incorporated into the attached schedule to be finalized at the meeting; and (3) Maintain the existing market rental rates for all Vernon units; and (4) Maintain the existing four-year stair-stepped transition schedule for all tenancies in effect as of July 8, 2011; and (5) Authorize staff to continue to implement annual rental increases each August for the tenancies under five- year leases pursuant to Section 3(B) of said leases; and (6) Finalize and adopt the attached Market Rent Implementation Schedule Effective June 12, 2013. Legal Counsel Stuart Leviton clarified that the recommendation is to continue with the market rent increase implementation schedule as previously approved. Chairperson Gustafson inquired on the Huntington Park (“HP”) units as they have not generated revenue and inquired whether the value of the property had increased. In response, Leviton reported that there are five HP units, some of which are occupied. He explained that staff’s recommendation is to keep the market rent implementation schedule, but to also reduce the market rent for the HP units. It is within the Commission’s discretion whether they want the City Council to revisit the sale of the HP units. Commission Director Mark Whitworth advised that the City Council had previously decided not to divest the HP property. Vernon Housing Commission Meeting Minutes June 12, 2013 Page 3 of 6 Chairperson Gustafson reasoned that the City has worked hard to balance its budget; as such, short term cash flow should be considered. He directed staff to recommend that the City Council reconsider the divestment of the Huntington Park units. Leviton advised that as part of the proposed Market Rent Implementation Schedule, lower market rental rates for all five HP units pursuant to recommendations from Solari Enterprises, Inc. are recommended. He suggested that in addition to the directive to staff to recommend that the City Council reconsideration the divestment of the HP units, staff be directed to lease the HP units at the lower market rental rates in the event the City Council decides to keep the HP units. Chairperson Gustafson was in agreement. Gianna Solari of Solari Enterprises, Inc. advised that in preparation for this night’s meeting, a study and recommendation for reduced market rental rates was prepared. She noted that if the units are leased at the proposed reduced rent, the revenue will make up for the loss during vacancy. She presented the recommendation. Commissioner Haskell inquired on the research conducted as the basis for the recommendation. In response, Solari advised that the recommendation is comparable to properties in the City of Bell. She further clarified that there were no comparable units in Huntington Park due to the difference in amenities. Commissioner Hughes opined that the proposal seem reasonable and fair. Commissioner Haskell sought discussion on efforts made to occupy the HP units. Assistant to City Administrator Kristen Enomoto reported that approximately 40 people on the waiting list had been contacted; she noted that approximately eight of those declined due to the rent price, and the rest were not responsive. In response to Commissioner Haskell, Enomoto advised that no marketing outside of the lottery list was made to lease the properties. Leviton advised that as the new property management firm, Solari may have suggestions for marketing efforts. However, the procedure is to rent the units pursuant to the lottery list. Vernon Housing Commission Meeting Minutes June 12, 2013 Page 4 of 6 The Commission may have to adopt alternative or supplemental procedures to address the issue. It was not anticipated that that the lottery list would be exhausted. Thus far, the only issues encountered have been with the leasing of the HP units. Solari advised that if the Commission approved the reduced rent, the lottery list could be revisited. In response to Chairperson Gustafson, Enomoto advised that the individuals contacted corresponds to the waiting list created during the time of the vacancy. She suggested that staff move on to the next lottery list as part of the process. It was confirmed that Solari would go through the entire lottery lists. It was moved by Hughes and seconded by Davis to adopt the Market Rent Implementation Schedule effective June 12, 2013, with the proposed recommendations, with the directive to staff to first recommend that the City Council reconsider the divestment of vacant Huntington Park units. Motion carried, 6-0. JUNE LOTTERY AND WAIT LIST 1. In accordance with Section 3, Random Selection of Potential New Leasees, of the Vernon Housing Commission Lease-Up Procedures for New Tenants, a lottery drawing of all Expression of Interest Forms received between 5:01 p.m. on December 11, 2012 and 5:00 p.m. on June 11, 2013, will be conducted to create a wait list for all units that become available June 12, 2013 or later. The Commission conducted the lottery. Any vacancy that opens from this day forth will utilize the list created this day. In response to Commissioner Hughes, Legal Counsel Stuart Leviton advised that the old lottery list remains in effect for the Huntington Park units. In was further clarified that should the old list be exhausted, the newly created list will be used. ORAL REPORTS & COMMENTS FROM STAFF AND COMMISSION MEMBERS 1. Quarterly housing report to be presented by Solari Enterprises, Inc. Gianna Solari of Solari Enterprises, Inc. reported on the quarterly housing report. There is one vacancy for which an Vernon Housing Commission Meeting Minutes June 12, 2013 Page 5 of 6 application is being processed. The anticipated move in date is June 28, 2013. Solari reported that she did meet with some of the residents to formally introduce themselves as the new property management firm. Vice Chairperson and resident Davis advised that he had not yet met with Solari. In response, Solari advised that for those residents that they did not meet, a letter will be mailed. 2. Staff update on actions taken relating to impermissible subletting or assigning of housing units. Legal Counsel Stuart Leviton reported that the City has successfully regained possession of one of the units and it is currently being leased. On a second unit, a judgment of possession was obtained; there are additional steps that need to be completed before the City retains possession. 3. Brief reports, announcements, or directives to staff from the Commissioners and Commission Officers. In response to Commissioner Haskell, Assistant to City Administrator Kristen Enomoto reported that there have been no issues with the leasing of the units located within Vernon. She further reported that, 6 units are at full market rent. Two were a result of a unit to unit transfer and four are new tenants. Commission Director Mark Whitworth reminded all that the election of Chairperson and Vice Chairperson will take place during the September meeting. Enomoto further elaborated that three Commissioners’ terms will expire in August. Sufficient notice is being provided; the Mayor will be making the appointments. Enomoto confirmed for Chairperson Gustafson that notice of the vacancy will be provided to residents, businesses, and interested parties. Commissioner Haskell directed staff to develop procedures to close the loop on the lease-up process; specifically, procedures on the next steps should the applicable waiting list be exhausted. Vernon Housing Commission Meeting Minutes June 12, 2013 Page 6 of 6 SECOND PUBLIC COMMENT Leviton announced that this was the time allotted for public comment. The Chairperson inquired whether anyone in the audience wished to address the Commission. No one responded. At 6:49 p.m., it was moved by Haskell and seconded by Hughes, to adjourn the meeting. Motion carried. ________________________ Eric Gustafson Chairperson ATTEST: _________________________ Ana Barcia Deputy Secretary