Agenda Item No. _ 6
CITY OF Y'UCAIPA
AGENDA REPORT
TO: Honorable Mayor and City Council
FROM: Jennifer Crawford, Assistant City Manager
Ryan Blackerby, Accounting Manager l;63
FOR: City Council Meeting of September 12, 2022
SUBKCT: 2023 Mobilehome Park Annual Registration Fee
RECOMMENDATION:
That City Council adopt Resolution No, 2022-51, rescinding Resolution No. 2021-52 and amending Resolution No. 2011-52 Section 2.0007(B)(C)(D), establishing the 2023 annual registration fee for the enforcement of the Mobilehome Rent Stabilization Ordinance.
BACKGROUND:
Pursuant to Yucaipa Municipal Code (YMC) Chapter 1.5.20 the intent of the annual registration fee is to cover the costs of administering the Mobilehome Park Rent Stabilization Program.
Since 2004 the costs associated with this program have increased due to rent increase applications before the Mobilehome Rent Review Commission, appeals before the Council, on- going litigation based on the findings of these applications and changes in personnel costs, Based on these factors, the program had developed a financial deficit.
City Council has established that the Mobilehome Rent Stabilization Program is intended to remain financially self-sufficient. In order to remain financially self-sufficient, it was necessary to adjust the fee structure in order to address both the cumulative deficit at the time and the ongoing expenses. Without an adjustment for both components, the cumulative deficit would have continued to increase, resulting in a General Fund subsidy of this program.
To ensure that the Mobilehome Rent Stabilization Program remains financially self-sufficient, on September 10, 2007, City Council approved an overall funding model that addresses the funding for any accumulated deficit/surplus and the ongoing costs associated with the administration of the program. To prevent potential rate spikes, the funding model includes the elimination of any accumulated deficit/surplus over a three-year period and an additional component to reconcile the previous year's actual balance/deficit to address unforeseen expenses that may have occurred since the annual calculation was completed.
The current model includes the following factors:
1. Calculating a three-year rolling cost average using the two previous years' actual or estimated actual expenses, and the current year's budgeted expenses; and
2. Adding a factor equal to the projected deficit/balance for one subsequent year to M.
City Council Meeting of September 12, 2022
2023 Mobilehome Park Annual Registration Fee
compensate for the one-year delay in collections; and
3. All expenses related to applications and/or appeals before the Commission and/or Council; and
4. All court related expenses when the decisions made by the Commission and/or Council are upheld by the courts; and
5. Reconciliation of actual balance/deficit based on a rolling three-year average.
The Council has directed staff to calculate the revenues and expenses using the approved model and return to Council each Fall to propose the registration fee to be implemented January I" of each subsequent year.
DISCUSSION.
City staff has reviewed and calculated the revenues and expenses using the approved model. Based on the model, Exhibit A (attached) has been updated to reflect the following:
➢ Section I — The three-year rolling average has been updated to include FY 20/21 actual expenses, the FY 21 /22 estimated actuals and the FY 22/23 budgeted expenses. Section I results in a cost per month, per space, in the amount of $7.40. ➢ Section I1 — Attempts to compensate for the delay in the collection of registration fees, which results in an estimated cost of $1.21 per month, per space, based on the subsequent year projected deficit.
➢ Section III — Attempts to reconcile the previous year's estimated fund balance/deficit to the actual fund balance/deficit. In the previous year's report, the estimated fiend balance as of June 30, 2022, was $6,925. After reconciling actual revenues and expenses for FY 21/22, the fund balance for June 30, 2022, is now estimated to be approximately $99,924; a difference of $92,999. This difference is reconciled over the next three years, which will result in a credit of $0.81 per year. This, plus adjustments from prior years, results in slight increase per month, per space in the amount of $0.05 for the current year. The change in estimated to actual is related to expenses (based on a three-year rolling average) in salaries & benefits, overhead, professional services and office supplies relating to the program.
Based on these adjustments, the 2023 annual registration fee will decrease from the 2022 fee of $105.12 ($8.76 per month per space 1 each party paying $4.38) to the recommended 2023 fee of $104.16 (8.68 per month per space 1 each party paying $4.34), which will result in a decrease of $0.04, per month per space for the residents. The attached Resolution No. 2022-51 establishes the annual registration fee of $104.16 for 2023, which is based on Exhibit A.
Upon Council adoption of Resolution No. 2022-51, city staff will send rate adjustment letters to both park owners and residents. The fee increase will take place in ,January of 2023 and will be reflected in the 2023 Mobilehome Park Registrations, which are required to be completed by the -185-
City Council Meeting of September 12, 2022
2023 Mobilehome Park Annual Registration Fee
park owners and filed with, the City by January 31, 2023.
FISCAL IMPACT:
The rent stabilization program model, Exhibit A, reflects that FY 2022/23 projected expenses will exceed revenues by the amount of $48,319. This is expected pursuant to the model approved for recovering costs, including accumulated deficits. However, the model also allows for an adjustment factor to reflect the subsequent year's projected surplus/deficit to account for the timing of collections. In addition, the projected cumulative surplus balance as of June 30, 2023, is $103,785.
The formula depicted in Exhibit A is based on a three-year rolling average, which offsets unforeseen expenses/revenues that may result from issues raised for Commission and/or Council consideration or changes made by the state.
Court related expenses, when the decisions made by the Commission and/or Council are not upheld by the courts, will not be recovered by the registration fees. Any costs not recoverable by registration fees will therefore impact and be borne by the General Fund.
Attachment: Exhibit A
Resolution No. 2022-51
Approved by: 4,4. 4�
Exhibit A
I EXPENSES
Salaries and Benefits
Overhead
Actual Professional ServicestS upplies
Total Expenses
City of Yucaipa
Mobilebome Rent Stabilization Costs
Three year rolling average using two actual previous years plus budget year 20-21 21-22 22-23 23-24 24-25 25-26
Actuals Est. Acmals Budget Projection Projection Projection 177,632
176,598
210,886
216,666
222,619
228,750
28,297
28,091
42377
43,333
44,524
45,750
80,470
29,852
74,825
74,825
74,825
74,825
286.400
234,541
327,889
334,824
341,968
349,325
Monthly cost per space, based upon 3 yr. average cast
6.90 7.31
7.40 7.69
8.43 8.46
Amount actually included in annual regisuadon calculation
8.50 8.76
11 ANNUAL PROJECTED BALANCEfDEF[CfT
Revenues (Based upon rolling 3 year cost average}
$
241,719
$
25.5,400
$
279,569
$
288,451
$
3X 796
$
341,168
Annual projected costs
$
286,400
$
234,541
$
327.889
S
334,824
$
341,968
$
349,325
Revenues over/(larder) expenses
(44,681)
20,859
(48,319)
(46,373)
(37, I72)
(8,157)
Amount required to be collected in subsequent year to address future projected anmial deficit (20,859)
48,319
46,373
37,172
8,157
4,636
Costlspacefmw h based upon subsequem year projected deficit (0.57)
1.31 1.21.
0.95 0.21
0.11 of rent controlled spaces
3, M
3,085
3,185
3,247
3, 309
3,371
Amount included in annuaf regis&adon cafcuku on
$
1.38 $ 1.36
Cost per space per year
5 94.21
$
76.03 $
102.95
$
103A2
$
103.34
$
103.63
Monthly amount per space
S
7.85 S
6.34 $
8.58 $
8.59 $
8.61 $
8.64 3 previous year roiling average costs
$
251,675
$
270,792
$
292,943
$
299,085
S
334,893
$
342,039
Cost of amortizing cumulative deficit for 3 yrs. ($233,119 at 6-NM8) $
-
$
-
$
-
$
-
$
-
$
_
Tota13 year rolling average costs
S
251,075
$
270,792
$
292,943
S
299,085
S
334,893
$
342,039
Aral three year average cost per space per year
$
82.79 $
87.78 S
88.84 $
92.11 $
101.21
S
101.47
1II RECONMA710N DE ACTUAL BALANCEADWICIT
C2017-18 Fesulted in nel 1i53 986 a $69A differentewbcgcnmrared to PMVIOUS year,5 yroj=Li+.. far 6rr30f18 S47 9921 -0. 06 i2(118-19 rearmed in nee $102.639_ a $72.832 difference when crympa=d to merinos )='s pmimdou fcr 6,IMf19 S29 R173 -0. 69 -0. 69 ( 1119-20 itesulted in net - -$84 699 dill rue w n rrKpar d toyie%ira s ysn's J rinn fpr 03OV20 $75.3494 0.80 0.77 0.77 (2020-21 rewlied in net-$5.012_ a-19.593 difference when camp -red to prvams p='� C plojeuion for & 3fkt2 $4 %11 0.09 0.09 49.09 (2021-22 resWted in a net 4 a M999di rencP when compamJ to previm year's FTnie_tion for 6. 30M fi6_47i -0.81 -0_81 -0,81 Line to reconcile previous ear's balanceldeficit (roffing 3year) 4.06 0.17 0.05 (0.72) (0.81)
SUAIMARY
I Monthly cost per space, based upon 3 yr. average cost II Cmuspaeelmonth based upon subsequent year projected surplusl(deficit) M Reconciliation of previous year's actual halanceldeficit Adjust for rounding to even number
Total monthly cost per space to fully fund program (acawl amount assessed for prior years k Revenues, projected beyond budget year,
Expenses, projected expenses beyond budget year
Cumulative program find balance/(deficit)
7.40 7.68 8.43 8.46
1.21 0.95 0.21 0.11
0.05 (0.72) (0.81) -
0.01 S 8.50 $ 8.76 S 8.68 S 7.91 $ 7.93 $ 857
310,080
296,400
324,295
234541
331,750
327.889
308,205
334.824
310.914
341.968
346,674
349,325
S 10,170 $
99,924 S
103.785 S
77.166 $
46.113 $
43,461
-187- 8l3012022
RESOLUTION NO.2022-51
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUCAIPA, CALIFORNIA, RESCINDING RESOLUTION NO. 2021-52 AND AMENDING RESOLUTION NO.2011-52 SECTION 2.0007(11)(C)(D), ESTABLISHING THE 2023 ANNUAL REGISTRATION FEE FOR THE ENFORCEMENT OF THE MOBILEHOME RENT STABILIZATION ORDINANCE.
WHEREAS, the City Council of the City of Yucaipa has adopted a Mobilehome Rent Stabilization Ordinance (Chapter 15.20 of Title 15 of the Yucaipa Municipal Code (YMC)); and WHEREAS, Section 15.20.073 of Chapter 15.20 of Title 15 of the Yucaipa Municipal Code provides that the City may adopt and impose fees for the provision of Mobilehome Park Rent Stabilization Services on those who necessitate or benefit from such services; and WHEREAS, on August 13, 2007, at a noticed public meeting, the City Council conducted a Study Session to review the proposed mobilehome park registration fee adjustment process and directed staff to return to Council with a Resolution authorizing the increase of the annual registration fees; and
WHEREAS, on September 10, 2007, at a noticed public meeting, the City Council approved an overall funding strategy model that addresses the funding for both the cumulative deficit and the ongoing costs associated with the administration of the program and directed staff to return to Council each September to propose the registration fee to be implemented January 1" of each year; and
WHEREAS, on September 28, 2009, at a noticed public meeting, the City Council approved an additional component to the formula for the calculation of the mobilehome park registration fees to reconcile previous year's balance/deficit using a rolling three-year average.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YUCAIPA, CALIFORNIA DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1: Section 2.0007(B)(C)(D) of Resolution. No. 2011-52 is hereby amended to read as follows:
B. Initial and Annual Registration. The Yucaipa City Council has established an initial and annual registration fee of $104.16 per space not exempt from the YMC. The total registration fee is due and payable on or before January 31" of each year. One half ($52.08) of this fee may be passed on to residents of those spaces subject to the YMC, in twelve (12) equal monthly installments of $4.34. This fee may be included in the monthly statement of rent due, but must be itemized separately, and shall not be deemed to be a part of the rent or included in the rent base when calculating rent adjustments.
C. Prorated Registration Fees. In the event a space comes under the jurisdiction of the YMC alter January 31st of each year, a prorated registration fee shall be due and payable no later than January 3I't of the following year as part of the Annual Registration application. The total prorated registration fee shall be calculated by determining the number of months remaining in the calendar year, including the initial month the space is subject to the YMC, and multiplying that
figure by W68, The resulting figure is the total prorated registration fee for that space. One half of this fee may be passed onto the resident of said space in equal monthly installments of $4.34.
This fee must be noticed in accordance with the provisions of State law. This fee may be included in the monthly statement of rent due, but must be itemized separately, and shall not be deemed to be a part of the rent or included in the rent.
D. Prorated_ Registration Fee Refund. In the event a space under the jurisdiction of the YMC becomes exempt as outlined in YMC Section 15,20,030 after January 3 1 " each year, a park owner may apply for a prorated refund at the time of the annual registration. The prorated refund for said space shall be calculated by multiplying the total number of months that the space was exempt by $8.68. The resulting figure may be deducted from the annual registration fee. The park owner may be required to show proof of exemption for any space for which a prorated registration fee refund is requested.
Section 2: Resolution No. 2021-52 is hereby rescinded and of no further force and effect.
PASSED, APPROVED and ADOPTED by the City Council of the City of Yucaipa this 12th day of September 2022.
David Avila
Mayor
ATTEST:
Jennifer Crawford
City Clerk