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2014-03-12 VHC MinutesMINUTES OF THE REGULAR VERNON HOUSING COMMISSION MEETING HELD WEDNESDAY MARCH 12, 2014, IN THE COUNCIL CHAMBER OF THE CITY HALL LOCATED AT 4305 SANTA FE AVENUE, VERNON, CALIFORNIA MEMBERS PRESENT: Michael Hughes, Henry Haskell, Hector Garcia, John Kriste, and Melissa Ybarra MEMBERS ABSENT: Michael McCormick and Eric Gustafson The meeting was called to order at 6:00 p.m. by Chairperson Hughes. Chairperson Hughes confirmed that there are no changes to the agenda. 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 December 11, 2013, to be received and filed. It was moved by Ybarra and seconded by Garcia to approve the December 11, 2013, Minutes. Motion carried, 5-0. NEW BUSINESS 1. Adoption of Revised Lease-Up Procedures for New Tenants for Units Located Within the City of Vernon and Separate Lease-Up Procedures for New Tenants for Units Located Outside the City of Vernon. Recommendation: (1) Find that adoption of the procedures proposed in this staff report 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 Vernon Housing Commission Meeting Minutes March 12, 2014 Page 2 of 8 (2) Adopt revised Lease-Up Procedures for New Tenants for Units Located Within the City of Vernon; and (3) Adopt new Lease-Up Procedures for New Tenants for Units Located Outside the City of Vernon; and Legal Counsel Stuart Leviton advised that the two revised lease- up procedures needed further review and revisions by staff and recommended the Commission consider the initial drafts presented for discussion of the concept only and allow staff to present further revisions at the next meeting. Leviton advised that the new revised lease-up procedures separate the Huntington Park units from the Vernon units. The procedures for the Vernon units are essentially unchanged and include the lottery and waiting list process. The procedures for the Huntington Park units eliminate the lottery and waiting list process and alternatively use commercially appropriate means to advertise and lease units on a first-come-first-serve basis. As previously indicated by the Commission, the lottery and waiting list process are unnecessary for the Huntington Park units, and the bifurcation of the procedures would create greater efficiency in leasing the Huntington Park units. Leviton sought input from the Commission on anything further that needs to be addressed. Chairperson Hughes inquired about the language that staff still needs to further review. In response, Leviton explained that the “Signing Lease and Paying Deposit” section of the procedures for example may need further revision. These procedures are strict due to the waiting list process, but for the Huntington Park units there may be more appropriate restrictions. Leviton confirmed for Chairperson Hughes that the procedures for the Vernon units are unchanged with the exception of the reference to units located outside of the City. This language has been either removed or edited. Staff’s recommendation is to reagendize the item at the next meeting. It was moved by Garcia and seconded by Ybarra to agendize the revised Lease-Up Procedures for the next meeting. Motion carried, 5-0. 2. Request to call a special meeting on April 9, 2014, at 6:00 p.m. to present the results of a comprehensive staff evaluation of the effectiveness of the contract with Vernon Housing Commission Meeting Minutes March 12, 2014 Page 3 of 8 Solari Enterprises, Inc. and to make related recommendations based on the results of said evaluation. Legal Counsel Stuart Leviton explained that the Solari Enterprises, Inc. contract expires at the end of May. The Commission will need to consider whether to extend the agreement or how to handle the property management. Staff is still conducting its evaluation and was not prepared to make a recommendation at this meeting. A special meeting to address this issue is proposed for April 9, 2014, at 6:00 p.m. The revised lease up procedures can also be addressed at this time. It was moved by Ybarra and seconded by Kriste to schedule a Special Meeting on April 9, 2014, at 6:00 p.m. ORAL REPORTS & COMMENTS FROM STAFF AND COMMISSION MEMBERS 1. Quarterly budget report to be presented by City Finance Director Finance Director William Fox presented an update on the City housing financials. Fox presented data for fiscal years 2011 through 2013 for actual revenues and expenditures. He attributed the gain in revenue in 2013 to the Commission’s oversight, the property management, and the new rent schedule which has increased rent fees and will continue to increase until full market rent is achieved for all units. For 2014, Fox presented actual and budgeted data for the first 6 months and a forecast for the full fiscal year. In response to Commissioner Haskell’s inquiry on the variance in the 6 month data, Fox explained that the variance is due to the impact of the new rent schedule and the fact that said information was not accurately budgeted in the past. This has now been synchronized which will create less deviation in the future. In response to Commissioner Haskell, Fox advised that the forecast for fiscal year 2014 does not include capital improvements, which he interprets as new roof or plumbing, etc. Fox noted that expenses are difficult to control; the forecast is based on what the City has experienced thus far. In response to Commissioner Haskell’s inquiry on how the data could still be favorable when the increase in the Solari Enterprises Inc. (“Solari”) contract was recently approved, Fox explained that the City had originally budgeted those costs in Vernon Housing Commission Meeting Minutes March 12, 2014 Page 4 of 8 City labor. Since the City is conducting less of the work itself, the expenses have been reallocated/ reclassified to address the shift in those costs. For fiscal year 2014, Fox presented the forecasted itemized revenue and expenses. In response to Chairperson Hughes, Fox advised that the Solari contract expenses are reflected in the professional services expenditure. In response to Commissioner Garcia, Fox advised that the City’s costs are captured in the salaries and benefits expenses. In response to Commissioner Haskell, Fox noted where the salaries and benefits were under budget and where the repair and maintenance expenditures were in excess of the budgeted amounts. This captures the shift in work. Fox confirmed for Chairperson Hughes that the data includes the entire housing stock. Fox presented a snap shot of what the City anticipates and projects for the next three years. The biggest change is the rent schedule as they continue to mature to full market rates. The expenses are trending based on what the City has experienced this year. Chairperson Hughes inquired whether capital expenditures are anticipated. In response, Fox recommended that at some point there needs to be an assessment of each of the units to determine whether there are any capital needs as the City will need to budget for these expenses. He recommended a reserve of excess funds, set aside for future needs. In response to Chairperson Hughes’ inquiry on whether the funds would come from the general fund, Fox advised that his recommendation is to have a reserve from excess rent revenues. He further advised that a study to assess future capital work can be conducted. Commissioner Haskell stated that the Commission was informed at the previous meeting that an assessment would be performed through Solari. He inquired whether capital improvements would increase the value of the property and whether it would be captured in a separate line item. Vernon Housing Commission Meeting Minutes March 12, 2014 Page 5 of 8 In response, Fox confirmed that it would and that it is good practice. In response to Commissioner Garcia, Fox advised that utilities include water, trash, and electricity expenses. Fox further advised that a small escalation of 2% is calculated into the forecast. Fox welcomed any further suggestions from the Commission on future housing financial update presentations. 2. Quarterly housing report to be presented by Solari Enterprises, Inc. Legal Counsel Stuart Leviton advised that the first page of the report contains the tenants’ names; that page was not distributed. Gianna Solari of Solari Enterprises, Inc. reported on the rents, occupancy and maintenance for the period of June 1, 2013, to March 12, 2014. Commissioner Haskell advised that he appreciates the redaction of the tenants’ names and recommended that the addresses also be removed from any future reporting. The Commission’s concern is with the number of vacancies and such; there is no need for the addresses. Commissioner Haskell inquired whether the summary of findings submitted to the City includes the unit inspections or whether it was simply a maintenance report. In response, Assistant to the Director Kristen Enomoto advised that her understanding is that it is an all-encompassing report, but would verify that all is included. Solari confirmed for Chairperson Hughes that unit inspections would be conducted annually. In response to Commissioner Ybarra’s inquiry on the response time for maintenance calls, Solari explained that minor maintenance calls are addressed promptly, but that other types of calls can take up to three days for a response. In response to Commissioner Ybarra’s inquiry on how the response time can be reduced, Enomoto clarified that the responsibility of overseeing Solari’s handling of the maintenance and service calls has been transferred to the Director of Community Services Vernon Housing Commission Meeting Minutes March 12, 2014 Page 6 of 8 and Water, Kevin Wilson, and his staff in an effort to increase efficiency and effectiveness. She explained that initial responses should be prompt as that does not require any involvement or authorization by the City. The City has established a time and materials threshold for all repair/maintenance work, within which Solari can proceed without further authorization from the City. For work requiring City authorization to proceed, City staff promptly communicates with Solari, but sometimes that discussion may delay the commencement of the work by a day or two. Solari clarified for Commissioner Ybarra that a minor service call usually receives a response within 24 hours. Commissioner Haskell inquired on the residents’ satisfaction with Solari. In response, Enomoto advised that this is part of the information that will be presented during the Special April Meeting. A survey has been distributed to the residents requesting feedback on Solari’s performance. 3. Report from the Director of Community Services & Water on the progress of the new housing development project (Vernon Village Park) at 4675 East 52nd Drive. Assistant to the Director Kristen Enomoto announced that Director of Community Services & Water Kevin Wilson was unable to attend the meeting. Enomoto reported that the new housing development has been named Vernon Village Park. The name was selected through an interactive process with the community and initial suggestions by the Vernon City School 6th grade class. An online poll was conducted that ran for one week. Enomoto reported that the City Council also approved a Subordination Agreement and amendments to the Ground Lease Agreement and Regulatory Agreement with Meta Housing Corporation. She noted that these are common amendments that occur during the final stages of the loan process. Additionally, Enomoto advised that the structural plans had been submitted to the City; minor corrections were requested. The permits should be issued within the week. Escrow is expected to close on March 21, 2014. Enomoto announced that the official groundbreaking is scheduled to be held on April 25, 2014. She indicated that the Commissioners should have received a Save the Date notice Vernon Housing Commission Meeting Minutes March 12, 2014 Page 7 of 8 regarding the event and encouraged the Commissioners to attend. Enomoto advised the Senators Kevin De Leon and Ricardo Lara have both confirmed attendance. 4. Brief reports, announcements, or directives to staff from the Commissioners and Commission Officers. Assistant to the Director Kristen Enomoto reminded the Commissioners that their Form 700 filings are due April 1, 2014. Director Mark Whitworth welcomed additional suggestions on the presentation conducted by the Finance Director. 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. Resident Susie Ybarra reported a complaint for one of the units. She reported on the unit’s odor and appearance. She advised on the general concern of the units and encouraged the maintenance of some of the units that have not been remodeled. Secondly, Susie Ybarra recalled that the divestment of the Huntington Park units had been presented to the City Council. She opined that the Huntington Park units serve no value to Vernon, and that there are units in Vernon that need repairs. She opined that it is time for the Commission to sell the Huntington Park units and rebuild and repair the houses located within Vernon. Chairperson Hughes advised that the Commission can discuss the matter, but that the Commission has made the recommendation to sell the Huntington Park units to the City Council three times. Ultimately, they have the final say. Susie inquired what further can be done. In response, Chairperson Hughes stated that this is a democracy, if the City Council is not serving the residents, do not vote for them. Commission Director Mark Whitworth advised that the Huntington Park units were initially obtained to house responders to the Malburg Generating Station. Their location was to address the concern over voting influence within Vernon. Vernon Housing Commission Meeting Minutes March 12, 2014 Page 8 of 8 The City Council has not elected to sell the Huntington Park units because the housing market was down, and they did not feel it was an appropriate time. The matter is expected to be revisited at a future date. At 6:50 p.m., it was moved by Haskell and seconded by Ybarra to adjourn the meeting. Motion carried, 5-0. ________________________ Michael Hughes Chairperson ATTEST: _________________________ Ana Barcia Deputy Secretary