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2013-12-11 VHC MinutesMINUTES OF THE REGULAR VERNON HOUSING COMMISSION MEETING HELD WEDNESDAY DECEMBER 11, 2013, IN THE COUNCIL CHAMBER OF THE CITY HALL LOCATED AT 4305 SANTA FE AVENUE, VERNON, CALIFORNIA MEMBERS PRESENT: Michael McCormick, Michael Hughes, Henry Haskell, Hector Garcia, John Kriste, and Melissa Ybarra MEMBERS ABSENT: Eric Gustafson The meeting was called to order at 6:03 p.m.; Commission Director Mark Whitworth led the flag salute. Whitworth announced a change to the agenda to address the election matters as the first order of business. ELECTION ITEM Election of Chairperson and Vice Chairperson to serve until the next annual election in December 2014. Commission Director Mark Whitworth opened the forum for nominations. Commissioner Haskell nominated Commissioner Hughes to serve as Chairperson. It was seconded by Commissioner McCormick. There were no other nominations. A roll call vote was taken: - Commissioner Kriste, yes - Commissioner Haskell, yes - Commissioner Hughes, yes - Commissioner Ybarra, yes - Commissioner McCormick, yes - Commissioner Garcia, yes Motion carried, 6-0. Hughes was elected unanimously to serve as the Vernon Housing Commission Chairperson. Commissioner Ybarra nominated Commissioner McCormick to serve as Vice Chairperson; it was seconded by Commissioner Garcia. There were no other nominations. A roll call vote was taken: - Commissioner Kriste, yes - Commissioner Haskell, yes Vernon Housing Commission Meeting Minutes December 11, 2013 Page 2 of 11 - Commissioner Hughes, yes - Commissioner Ybarra, yes - Commissioner McCormick, yes - Commissioner Garcia, yes Motion carried, 6-0. McCormick was elected unanimously to serve as the Vernon Housing Commission Vice Chairperson. PUBLIC COMMENT Chairperson Hughes announced that this was the time allotted for public comment and inquired whether anyone in the audience wished to address the Commission. No one responded. MINUTES 1. Minutes of the Regular Vernon Housing Commission Meeting held June 12, 2013, to be received and filed. Chairperson Hughes sought clarification on how staff moved forward with the recommendation to establish new, lower market rental rates for all five Huntington Park units pursuant to recommendations made by Solari Enterprises, Inc. (“Solari”). In response, Assistant to the Director Kristen Enomoto advised that lower rates were established for the three vacant Huntington Park units as recommended by Solari. It was moved by Haskell and seconded by Garcia to approve the June 12, 2013, Minutes. Motion carried, 5-0-1, with McCormick abstaining. NEW BUSINESS 1. Introduction of newly appointed Commissioner Michael McCormick and announcement of re-appointed Commissioners Melissa Ybarra and Michael Hughes for new four-year terms ending August 2017. Commission Director Mark Whitworth reported on the Mayor’s appointment recommendations and subsequent City Council approval to reappoint Melissa Ybarra and Michael Hughes to the Commission. Vice Chairperson McCormick is new to the Commission and is the City Council representative. Vernon Housing Commission Meeting Minutes December 11, 2013 Page 3 of 11 2. Authorization to Amend the Agreement with Solari Enterprises, Inc. for Third Party Property Management Services of All City of Vernon Owned Housing to Increase the Total Contract Amount Recommendations: (1) Find that approval of the proposed award of a contract for third party property management services 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) Authorize Amendment No. 1 to the June 1, 2013 Services Agreement with Solari Enterprises, Inc. for third party residential property management services for all City of Vernon owned residential properties to increase the total not to exceed amount of the Agreement to $65,000, subject to approval of the same by the City Council, or any lesser amount authorized by the City Council if it does not approve the full amount requested. Assistant to the Director Kristen Enomoto reported on the proposed increase to the Solari Enterprises, Inc. (“Solari”) agreement due to repair and maintenance costs. She explained that during the initial approval, this cost was not fully known. There was uncertainty as to whether Solari or City crews would perform the repairs and maintenance. Since then, Solari’s rates have been found to be comparable to the City’s; Solari has been conducting most of the service calls. This is reflected in the proposed amendment to the contract; an average monthly cost was calculated to determine the recommendation. Additionally, Enomoto reported that the vacant units needed significant work. These costs were higher than originally anticipated and the total cost was not incorporated in the original agreement. Enomoto clarified that Solari’s rates remain the same; the proposed increase is to capture said repair and maintenance costs. Commissioner Haskell recalled that the Commission only has authority to approve expenditures up to $25,000, and inquired whether the Commission’s action would only approve a recommendation to the City Council. Vernon Housing Commission Meeting Minutes December 11, 2013 Page 4 of 11 In response, Enomoto clarified that subject to the City Council’s approval, staff is seeking authorization from the Commission to increase the total contract amount to the proposed $65,000, or any lesser amount authorized by the City Council. Commissioner Haskell sought clarification on the “unit turns,” and he noted significant costs for this service. He also inquired on the unit-to-unit transfer fee. In response, Enomoto advised that the “unit turns” is the preparation of vacant units for leasing. The unit-to-unit transfer fee is $1,000, but noted that the unit turns were to prepare for new occupants. In response to Commissioner Haskell’s inquiry on the substantial estimated costs for unit turns at 4321 Furlong and 6036 Stafford, Enomoto advised that new carpet and paint is a large component of the costs, and various other repairs. Haskell wondered whether capital improvements increased the value of the units. Commissioner Ybarra noted that there are many older units in Vernon that are in need of renovations that have not been addressed. In response to Haskell, Solari representative Gianna Solari clarified that if the units are to be sold, carpeting and paint would add value. However, for this purpose, they simply allow the units to be rented at market rent. In response to Ybarra, she advised that no rehabilitation work is being done. The costs reflect more general maintenance repairs. Commissioner Ybarra opined that $7,000 was excessive for general repairs and preparation, and questioned the work that was included in that cost. In response, Solari advised that an itemized list of expenses can be provided sometime after the meeting. Commissioner Haskell inquired whether the estimated unit turns have been completed. In response, Enomoto advised that 6036 Stafford was in-progress and that 4321 Furlong was completed. Commissioner Haskell confirmed that 6036 Stafford is located in Huntington Park, and opined that the City Council might be Vernon Housing Commission Meeting Minutes December 11, 2013 Page 5 of 11 interested in reviewing this investment as it has repeatedly decided to retain this property. Enomoto noted that the proposed Solari cost for the two unit turns is approximately 50% of the costs that would have been incurred if City crews had conducted the work. Chairperson Hughes inquired whether the City would have done these repairs as part of normal business. Enomoto confirmed that it would have absent the contract with Solari. Commissioner Haskell expressed his disapproval that substantial funds are being expended for units in Huntington Park. Commissioner Ybarra inquired whether these costs were foreseen when the agreement was first proposed. In response, Enomoto advised that some of the costs were foreseen, but that costs for unit turns,the volume of service calls, and the level of certain maintenance and repair jobs were higher than originally anticipated. Commissioner Haskell recalls that the Commission was warned that there may be additional costs. Enomoto further added that under the original agreement, Solari can perform repair and maintenance work as needed. The scope of work was included in the request for proposals at the beginning of the process. Commission Director Mark Whitworth advised that the true expense was unknown at the time. However, a third unbiased group was selected to provide the service. All repairs and maintenance are vetted with Director of Community Services and Water Kevin Wilson. A one-year agreement was specifically entered to allow staff to provide a trial period in which to determine ongoing costs. Commissioner Haskell stated that the recommendation is approving work that has already been done; there is no forward thinking. Before any further work is conducted, he recommends staff to be sensitive to the budget. In response, Enomoto advised that annual inspections of the units are scheduled to occur. This should provide staff an idea of the long-term health of the units as well as potential repair/remodeling type needs. Vernon Housing Commission Meeting Minutes December 11, 2013 Page 6 of 11 Commissioner Haskell recommends approval but further recommends that Council consider the Huntington Park units investment separately as there is no public good served. It was seconded by Ybarra. Motion carried, 5-0-1, with McCormick abstaining. 3. Adopt revised Lease-Up Procedures for New Tenants to provide additional steps to lease vacant units if Waiting Lists are exhausted. Recommendations: (1) Find that adoption of the proposed revisions to the Lease-Up Procedures for New Tenants are 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) Adopt the revised Lease-Up Procedures for New Tenants to:  Provide additional steps to lease vacant units if the applicable Waiting List for a given unit is exhausted, including the use of additional Waiting Lists and advertising/marketing efforts; and  Authorize the use of qualified co-signers in cases where prospective leasees are unable to pass the credit check, but are otherwise in good standing and determined to be good candidates for a lease. Assistant to the Director Kristen Enomoto advised that the recommendation has two components. The first addresses the Commission’s directive to staff regarding additional steps to lease vacant units if waiting lists are exhausted. Enomoto reported on the leasing of a unit to an applicant that did not meet the criteria of the credit check, but had a qualified co-signer. The Lease-Up Procedures were silent on the matter. Staff consulted with Legal Counsel Stuart Leviton, and allowed the leasing of the unit with the cosigner. The second component of the recommendation incorporates procedures for this type of scenario. Chairperson Hughes inquired whether the leasing of the Huntington Park units is on the open market. In response, Gianna Solari of Solari Enterprises, Inc. advised that the respective waiting lists were exhausted, but noted that at the time the units were not completely “turned”. Since then, unit Vernon Housing Commission Meeting Minutes December 11, 2013 Page 7 of 11 turns have been completed and those on the waiting list are invited to revisit the property at the new reduced market rent. Solari confirmed for Commissioner Haskell that once the waiting lists are exhausted, the units will be advertised to the open market. She further explained that advertising will be done online, communicated through the County Housing Authority, and also through gosection8.com. Commissioner Haskell inquired why the Huntington Park units are locked into Vernon unit procedures, such as the waiting list process. He wondered why the units are simply not advertised in the open market. In response, Legal Counsel Stuart Leviton advised that one could draw a distinction between the Vernon and Huntington Park units. The proposed revised procedures would allow these units to go to the open market if the waiting lists are exhausted. Commission Haskell noted that going through the waiting lists is time intensive, and stated that Solari should be allowed to simply go out to the market. Leviton suggested that the item to differentiate the Huntington Park units from the Vernon units be placed on the agenda for the next meeting so that formal discussion and action can be had. Chairperson Hughes agreed since the tenants would not be Vernon residents and concerns over the City’s residents would not be relevant. He order the directive to staff. It was moved by Kriste and seconded by Garcia to adopt revised Lease-Up Procedures for new tenants to provide additional steps to lease vacant units if waiting lists are exhausted. Motion carried, 6-0. 4. Repeal of Resolution No. VHC-4 – Vernon Housing Commission Travel and Expense Reimbursement Policy – in Response to City Council Adoption of Citywide Expense Reimbursement Policy; Resolution No. VHC-7 - A Resolution of the Vernon Housing Commission repealing Resolution No. VHC-4. Recommendations: Vernon Housing Commission Meeting Minutes December 11, 2013 Page 8 of 11 (1) Find that adoption of the proposed resolution to repeal the Vernon Housing Commission Travel and Expense Reimbursement Policy 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) Adopt a resolution to repeal Resolution No. VHC-4, which approved a Vernon Housing Commission Travel and Expense Reimbursement Policy, in light of an updated citywide Expense Reimbursement Policy recently adopted by the Vernon City Council. Assistant to the Director Kristen Enomoto noted that this may not have much applicability to the Commission, but reminded the Commission that early-on an expense reimbursement policy specific to the Commission was adopted. Since then, the City Council has further updated its policy and approved one policy that covers not only the City Council and staff, but also all of the City’s Boards. The recommendation is to repeal the Commission specific policy and adopt the City’s master policy. In response to Commissioner Haskell, Enomoto confirmed that the policy does not affect stipends. Enomoto advised that an amendment to the overnight travel provision of the policy to clearly define mileage is being proposed during the December 17, 2013, City Council meeting. If approved, said amendment would be applicable to the Commission. It was moved by Garcia and seconded by Kriste to approve Resolution No. VHC-7. Motion carried, 6-0. 5. Receive and file the report of the City Council decision rendered in response to the Housing Commission’s recommendation that Council again reconsider the divestment of the City-owned housing units in Huntington Park. Assistant to the Director Kristen Enomoto reported that pursuant to the Commission’s direction, the recommendation that Council reconsider the divestment of the City-owned housing units in Huntington Park was presented during the July 2, 2013, City Council meeting. The vote was 4-1, to not divest the Huntington Park units. At the time, the Commission had just approved reduced rental rates for said units; this was part of their consideration. A decision was made to allow the units to be Vernon Housing Commission Meeting Minutes December 11, 2013 Page 9 of 11 leased under the new reduced rates. The City Council intends to revisit the divestment in upcoming years. Vice Chairperson McCormick added that the Council wished to wait and see if property value would increase. In response to Commissioner Haskell, Commission Director Mark Whitworth advised that Councilmember Ybarra supported the sale of the Huntington Park units. At 6:47 p.m., Vice Chairperson McCormick excused himself from the meeting. DECEMBER 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 June 11, 2012 and 5:00 p.m. on December 10, 2013, will be conducted to create a wait list for all units that become available December 11, 2013 or later. The Commission conducted the lottery. Any vacancy that opens from this day forth will utilize the list created this day. ORAL REPORTS & COMMENTS FROM STAFF AND COMMISSION MEMBERS 1. Semi-annual housing report to be presented by Solari Enterprises, Inc. Gianna Solari of Solari Enterprises, Inc. presented on the housing report. She announced that unit inspections are expected to occur on January 13, 2014. Notice to the occupants has been provided. Based on the inspections, cost projections will be developed. In response to Commissioner Haskell’s inquiry on the unit turnover since the last meeting, Assistant to the Director Kristen Enomoto reported that one unit has been filled; the unit turn for the Furlong vacancy has just been completed. Solari advised that on a go forward, this information will also be included in the report. Solari introduced Regional Manager Breda Ruiz who is working on the oversight of the Vernon units. Vernon Housing Commission Meeting Minutes December 11, 2013 Page 10 of 11 2. Staff update on actions taken relating to impermissible subletting or assigning of housing units. Legal Counsel Stuart Leviton reported on two unlawful detainer actions. He reported that one unit was vacated voluntarily. The second unlawful detainer action has been concluded. The unit was vacated. Chairperson Hughes inquired whether there was undue expense in vacating the tenant. In response, Leviton advised that for unlawful detainers there are attorney fees and other associated expenses, but some of the expenses are can be collected through the judgment. Chairperson Hughes requested a full budget for housing related expenses. In response, Assistant to the Director Kristen Enomoto advised that the information can be provided. 3. Report from the Director of Community Services & Water on the progress of the new housing development project (Vernon Family Apartments) at 4675 East 52nd Drive. Director of Community Services & Water Kevin Wilson presented on the new housing development project and noted that the Commission will not have oversight of the new housing stock. Wilson reported on the receipt of tax credits which was facilitated by the City’s increased contribution; this is now a viable project. The development is moving forward. The City is working with the Department of Toxic Substances Control to get clearance on the property; Wilson reported on the process and on plan requirements to address the soil vapor concerns. Wilson projects that occupancy will take place a year after groundbreaking. In response to Commissioner Haskell, Wilson reported that Meta Corporation will contract the construction but advised that the City does not have any say in the selection of the contractor. The only City requirement is that prevailing wages are included as part of the agreement. 4. Brief reports, announcements, or directives to staff from the Commissioners and Commission Officers. Commission Director Mark Whitworth reported on the residential internet program; sixteen units are currently participating. He Vernon Housing Commission Meeting Minutes December 11, 2013 Page 11 of 11 advised that the Expression of Interest Forms for the lotteries to be held in 2014 are available at the meeting and in the Office of the City Clerk. Commissioner Haskell echoed Chairperson Hughes’ request for data on expenses, and directed staff to provide the information at the next meeting. He recommended a report from the Finance Director to provide a more comprehensive picture rather than the bits of information received thus far. He would be happy to provide guidance on the type of format and information that he would like to see included. SECOND PUBLIC COMMENT Chairperson Hughes announced that this was the time allotted for public comment and inquired whether anyone in the audience wished to address the Commission. No one responded. At 7:11 p.m., it was moved by Ybarra and seconded by Haskell, to adjourn the meeting. Motion carried, 5-0. ________________________ Michael Hughes Chairperson ATTEST: _________________________ Ana Barcia Deputy Secretary