Loading...
HomeMy WebLinkAboutRDA Min 1990-10-08 9-24-90/10-8-90 The meeting was adjourned at 6:55 p.m. ~~/)AJ ~~ ......",. "" I Chairman Seal Beach, California October 8, 1990 The Redevelopment Agency of the city of Seal Beach met in regular adjourned session at 6:47 p.m. with Chairman Forsythe calling the meeting to order with the Salute to the Flag. ROLL CALL Present: Chairman Forsythe Agencymembers Hastings, Hunt, Wilson Absent: Agencymember Laszlo I Hunt moved, second by Wilson, to excuse the absence of Agencymember Laszlo from this meeting. AYES: NOES: ABSENT: Forsythe, Hastings, Hunt, Wilson None Laszlo Motion carried Also present: Mr. Nelson, Executive Director Mr. Barrow, Assistant City Attorney Mr. Parrington, Special Legal Counsel Mrs. Yeo, Secretary WAIVER OF FULL READING Wilson moved, second by Hunt, to waive the reading in full of all resolutions and that consent to the waiver of reading shall be deemed to be given by all Agencymembers after reading of the title unless specific request is made at that time for the reading of such resolution. AYES: NOES: ABSENT: Forsythe, Hastings, Hunt, Wilson None Laszlo Motion carried I PUBLIC HEARING/RESOLUTION NUMBER 90-2 - CONVEYANCE OF REAL PROPERTY - ELECTRIC AVENUE GREENBELT The Assistant city Attorney reported that the title report for the subject property has been obtained however shows a trust deed having been recorded against the property in the early 1960's, that it is understood the trust deed has been paid, therefore a reconveyance is presently being sought. Hunt moved, second by Wilson, to continue the public hearing and consideration of Resolution 90-2 until the next regular meeting, November 26th. AYES: NOES: ABSENT: Forsythe, Hastings, Hunt, Wilson None Laszlo Motion carried 10-8-90 SEAL BEACH TRAILER PARK - AUDIT The Executive Director noted this item is before the Agency as a result of remarks made by a citizen at a prior City Council meeting. He explained that the Agency entered into a Participation and Disposition Agreement with Riverbeach Associates, now Seal Beach partners, Ltd., that covers the operation of the Trailer Park where of the one hundred twenty-six spaces, one hundred twenty are to remain available only to low and moderate income persons. He pointed out that the Agency has approval authority of rent adjustments on those spaces, the procedure for such adjustment being that Park management submits an application for adjustment, including certain financial records as required by the Agreement relative to the Park operation, which would then be reviewed and presented to the Agency for consideration of the requested rent adjustment, and noted the last adjustment was made in 1989. The Director reported that Seal Beach Partners, Ltd. are currently involved in a civil action regarding the management of the Park and that there has been request by both parties for an audit of the operations, explaining that the role of the Agency would relate to establishing the rent pursuant to the Agreement. He noted that information has been provided by the Agency's auditing firm as to the options of the type of audit that may be desired, a full certified audit at a cost between $15,000 to $20,000, a review of financial statements for $5,000 or less, or a limited review based upon an hourly rate. He offered that it may not be appropriate for the Agency to participate in this matter which has come forth as a result of the civil action, however should the Agency choose to pursue the audit, staff would recommend the limited procedure review. Mr. Thomas Parrington, special legal counsel to the Agency for the Trailer Park, pointed out that as part of the Covenants for the Trailer Park, there are three elements to the rent, return on investment, overhead and management allowance, and employee expense, pursuant to a formula set forth in the Agreement that had its origin at the time the estimated and actual costs were incurred for development of the Trailer Park, that it does not relate to out-of-pocket expenditures, but is a number arrived at by computing the cost of living increase on an annual basis for such items as overhead and employee allowance. He advised that the Agency has reviewed expenses in the past, the most recent review required documentation and verification of certain items presented, such as legal and accounting expenses, with several of the items waived by the Park as a result of that review, stated the last increase was fairly consistent with the original schedule of expenses and cost of living adjustments, with the exception of a substantial increase for insurance. Mr. Parrington offered his recommendation that an audit be delayed until such time as there is a formal request from the Trailer Park for a rent increase, and if review of the request indicates a significant difference from the previous request, the audit could be focused on the period from 1989. He explained that the Agency had agreed through the Covenants to submit an annual report to the Coastal Commission whether or not an increase was being considered, however pointed out that the Commission is no longer involved in this type of matter, and clarified that there is no requirement that a rent increase be considered each year, which is at the discretion of the Park management to make such request. I I I . Agencymember Hastings suggested that an audit be authorized for the period since 1989, offered to receive any outstanding documents that may not be available at the Trailer Park, and that the audit be put to bid. She made reference to page six of the Participation and Disposition 10-8-90 I Agreement calling for one hundred twenty low/moderate income lots, sixty of which are to be maintained for persons and families of low income, and that Riverbeach shall accept persons and families of low and moderate income referred by the Agency or the City for rental of trailers or pads that become available. She said she was not certain that there are sixty low and sixty moderate spaces in the Park, questioned what constitutes the low and moderate categories, the number of persons that receive section 8 assistance, and whether the Agency or city has been notified by the Park of available low or moderate trailers or pads for rent, as required by Section 2.08(4). Agencymember Hunt asked if there was question of compliance with the Agreement by the Park management, and the relationship of the questions to consideration of an audit. Agencymember Hastings stated her intent was to obtain information. Agencymember Forsythe inquired as to the legal obligation of the City to monitor the expenditures of the Trailer Park and the income determinations by the management. Mr. Parrington advised that the Agency is only obligated to review financial information as to expenditures in the Park when a rental increase is submitted, however the obligation does apply to annual review of the records that are to be submitted in order to verify that the low and moderate income requirements are being met, stating he did not see that as a major issue except that it appears that some of the records are not in the possession of the current Park manager. He explained that what was low and moderate income housing when the Agreement and Covenants were drafted is considerably different at present time, that State statues provide that low income is eighty percent of the median County income and moderate is one hundred twenty percent, and stated he did not feel that the present occupancy of the Park would now be within the original ranges given the escalation of the median income in Orange County. Chairman Forsythe asked if the Trailer Park office would be limited to Park transactions exclusively during the business day, to which Mr. parrington responded he was not aware of any such restrictions. Chairman Forsythe made reference to April, 1989 minutes where a former Planning Director had said that the Trailer Park, specifically the common areas, could not be used under the Unclassified Use Permit or the zoning regulations as Mr. Dawson's office for the conduct of business other than that of the Trailer Park, however that did not preclude the operation of a business from his home in accordance with City regulations. The Executive Director explained that would be a zoning issue within the purview of the City Council rather than the Redevelopment Agency which has no zoning authority. Agencymember Hunt said he had heard of nothing in recent weeks that would indicate that the residents of the Park are being deprived in any way, that he recognized the responsibilities of the Agency, and in the case of a request for rent increase the Agency has a responsibility to protest in the interest of the tenants, making certain that any adjustments are justified, and noted that there is no such request at this time. He said if an audit is considered, the Agency should hear from the Park management first, secondly the residents should be asked if they favor an audit and if it is desired, that the management of the Park should pay the cost of the audit as opposed to the Agency or City, which would then be reflected in the next rental increase request, concluding that he did not feel there is justification to call for an audit at this time. Agencymember Wilson also noted there are two areas of Agency involvement, rent increases and vacancies, and since the city has not been notified of any vacancies that can not be filled with qualified persons, it is presumed that there are none. Agencymember Hastings said information she has I I 10-8-90 received indicates that expenses should not be more than about three percent of the valuation of the property, therefore it appears the expenses of the Trailer Park are high as compared to other parks, and that an audit would be in order. Ms. Sonia Sonju, Trailer Park partner, spoke in support of a simplified audit, at a lesser cost, and said she believed the Park could accommodate the cost. An I objection was raised by Agencymember Hunt with regard to - receiving testimony until such time as all parties of the Trailer Park are present. Ms. Sonju provided a copy of the 1978 Covenants to the Chairperson. There was an indicated consensus of the Agency members that there should be an annual review of compliance with low and moderate income requirements and Park expenses. Agencymember Hunt moved that for the remainder of this meeting the discussion focus on whether or not an audit should be ordered and what form of audit there should be. Agencymember Wilson seconded the motion. Agencymember Hastings expressed a desire to hear comments from the audience. Councilman Hunt said he felt that would be inappropriate, suggesting that both interested parties should be present to offer their viewpoints as to the facts of this matter. Chairman Forsythe reiterated her feeling that if an audit is desired by both Trailer Park parties, the audit could be directed however the cost should be borne by the Park rather than the City, also that all documents relating to the Park should be gathered together for review. Agencymember Hunt pointed out that the Agreement allows costs for legal and accounting services to be passed on to ~~ tienants even though it may be paid by ,management , I 1n1t ally, however should the tenants deS1re the aud1t, the city should be made aware of that fact, and the audit should then be directed. The Chairman asked if City staff could acquire and research the documents relating to the Park in lieu of an audit, and that the residents of the Park be invited to a meeting to air their concerns. The Executive Director reported that from his discussions with Ms. Sonju and Mr. Dawson's daughter, each has indicated court appearances for pending legal actions are forthcoming, that some documents are apparently missing from the Park, yet each of the persons have offered to provide records within their possession, that staff could review all of the information and report back to the Agency. Chairman Forsythe suggested that the City be the recipient of any and all documents pertinent to the Trailer Park pending determination as to whether or not an audit is desired, and that the Park residents make their thoughts known to City staff. Ms. Sonju stated pending litigation is personal and irrelevant to the audit, that she and Mr. Dawson are equal partners of the Park, that everyone agrees there should be an audit, and offered to provide records within her possession. The Executive Director noted concerns expressed with regard to financial records and low and moderate income status, and offered that it should be kept in mind that a person must qualify under the low or moderate income I categories initially, yet should the income status change _ over time that would not require one to relocate from the Park, and offered that the Orange County Housing Authority has been used to assist in the review of qualifications of persons moving into the Park, also in seeking persons to fill vacancies. He suggested that any documents or information, including comments from the Park residents, be submitted to his office initially, to then be disseminated to the appropriate staff person or agency for review. No action was taken on the motion on the floor. Agencymember Hunt moved that no action be taken on the 10-8-90 allocation of funds for an audit at this time. Agencymember Wilson seconded the motion. It was the consensus of the Agency that documents relating to the Trailer Park would be received by the city and reviewed. I AYES: NOES: ABSENT: Forsythe, Hastings, Hunt, Wilson None Laszlo Motion carried I. ORAL COMMUNICATIONS Chairman Forsythe declared Oral Communications open. Mr. Gordon Shanks, 215 Surf Place, stated that while he sat as Chairman of the Relocation Appeals Board he had requested an audit of the Park. He reported hearing complaints of persons in the Park regarding issues other than rent increases, specifically inflation of the housing, particularly those with two-story cabanas, where the purchase price may be as much as $70,000 thus impacts the rent factor, also accusations that when one moves from the Park the space is sold to the owner which results in an increased price to the next tenant. He noted there are only six spaces that are not affected by the rent formula. Agencymember Hunt suggested that Mr. Shanks bring forth any information he may have of violation of City or State regulations in the Park for investigation by the Agency. Chairman Forsythe asked if construction of the cabanas are in any way a violation of the provisions set forth in Title 25 of Housing/Community Development law. The Executive Director advised that City objections regarding cabanas has been overruled by the State, that the State has treated this particular Park as a special entity, explaining that there are instances in this Park where there is only a trailer floor remaining, the body having been removed, replaced with a cabana, and in that case continues to be in compliance with State law. He reported there are some improved trailers in the Park that are assessed property taxes, and there are some that pay only DMV registration fees. Agencymember Hastings asked that the City be provided with information showing those trailers that have been reassessed. Ms. Sonju said for the past two years she has received a number of complaints from Park residents regarding unfair rental increases, maintenance of low/moderate income housing, size of the lots, inequities of rents, free rents and the impact of same, profit making on the sale of trailers, etc. She expressed concern regarding her personal legal liability, the City having a similar responsibility and liability under the Covenants. Ms. Beverly Casares, Seal Beach, said in 1978 there were one hundred forty low and moderate spaces in the Park, claimed there were fourteen less in 1981, one hundred twenty-seven now and soon to be two less. She asked that the audit be placed on the next Agency agenda, and said the standard for the trailer park industry is that no more than twenty-eight percent of the total income should be devoted to expenses, more than that considered to be poor management. Ms. Casares charged that the City is not fulfilling its obligations under HOD or State low and moderate income requirements, that there is no inspection as to the actual number of trailers in the Park nor the name and telephone number of the registered owner and of the occupant, nor the name of the recipients of HOD rental assistance money, the rent per space, and the number of building permits issued. She offered that dissatisfaction is found when rents are not equal, and claimed one space in the Park appears to be four spaces yet the rent is less than other spaces. Mr. Galen Ambrose, Seal Beach, inquired about removal of undeveloped property from the Redevelopment Agency. The Executive Director advised that there is a process to amend a I 10-8-90 Redevelopment Plan, however in a case where debt has been incurred and removal of a property would jeopardize repayment of the debt, such change would be prohibited. He explained that projects that have been proposed for property currently within the Redevelopment area would create tax increment rather than increasing the obligations of the Agency, and with regard to reference to the Mola project and I the financial impact analysis showing operating costs of the .~ City would be greater than revenues to the city, he pointed out that the financial report also showed that the tax increment would be increased by approximately $600,000 per year to the Agency, without any increased costs to the Agency, and where the tax increment could be used to repay the debt to the city. Mr. Ambrose asked that staff look into what properties could be removed from the Agency, and stated Seal Beach should take the lead to decrease the Agency which would in turn increase taxes to the County and eliminate the need for raising fees. The Executive Director offered that such action would require substantial financial forecasting to determine the future property values and the revenues that would be generated, noted that the Agency is presently not generating sufficient revenue for the twenty percent housing set-aside, which increases each year, therefore based on that fact alone it is felt the Agency needs to retain all of the properties that are presently within the project area and be assessed at full value to continue generating the tax increment to the Agency to satisfy the debt obligation. Mr. Charles Antos, 328 - 17th Street, said the City and the Agency have a direct responsibility in the Trailer park, charging that the previous Council transferred some of the affordable housing I- requirements to the Trailer Park, therefore the city needs to assure that the Park remains, asked how that assurance can be realized if the staff continues to pursue the deannexation of the Trailer Park out of Seal Beach and into the City of Long Beach, questioned why the Housing Element Committee was not made aware of the deannexation effort, and if it is accomplished, who would pay the remaining debt. The Executive Director explained that a portion of the Trailer Park lots along the San Gabriel River are in the city of Long Beach, also that the directors of the Island Village townhomes have requested detachment from Long Beach and that they be placed in the City of Seal Beach, and given the jurisdictional problems relative to public safety in San Gabriel River, staff has pursued whether there is any interest amongst all of the various agencies to go through the process of refining the boundaries, however that effort is not going forward because there was no indicated interest by the other agencies to undertake that project, therefore the portion of the Oakwood Apartments parking area, portions of the Trailer Park lots along the River, and a section of Seal Beach on the westerly side of the River will continue under the jurisdictions as they presently exist. There being no further comments, Chairman Forsythe declared Oral Communications closed. ADJOURNMENT It was the order of the Chair, with consent of the Agency members, to adjourn the meeting at 8:12 p.m. -I &~~:2AA~~ tfi rman ~P~"t'" ~~ f f roRtllD ,~ \~ \ ,r.DUA'\, 10. ! , ~\ 1017 lro "co..",- /A> .~~" ..........;.If:d I,\\",-~