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HomeMy WebLinkAboutMC-14811 ORDINANCE NO. MC -1481 2 ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN 3 BERNARDINO, CALIFORNIA, AMENDING SAN BERNARDINO MUNICIPAL CODE CHAPTER 8.90 (MOBILE HOME RENTS) DISSOLVING THE MOBILE 4 HOME RENT BOARD AND DELEGATING RESPONSIBILITY FOR THE REVIEW OF MOBILE HOME PARK RENT INCREASE REQUESTS TO AN INDEPENDENT 5 HEARING OFFICER 6 WHEREAS, the People of the City of San Bernardino adopted a new Charter at the 7 November 8, 2016 municipal election; and 8 WHEREAS, the new Charter was filed with the California Secretary of State on 9 January 31, 2017 and became effective on that date; and 10 WHEREAS, the City Council in implementing the new Charter provisions has evaluated the community's need for various committees and commissions and desires to 11 eliminate some bodies (Charter Section 600) and consolidate others to increase efficiency and 12 preserve scarce resources; and 13 WHEREAS, the City Council has determined that the implementation of the Mobile Home Rents Chapter (Chapter 8.90), would be more streamlined and responsive if it were to 14 be effectuated through an administrative process instead of a Board; and 15 WHEREAS, City Council desires to amend Chapter 8.90 to effectuate an 16 administrative process and otherwise make the Chapter consistent with the new Charter. 17 NOW, THEREFORE, THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO DO ORDAIN AS FOLLOWS: 18 19 SECTION 1. Chapter 8.90 of the San Bernardino Municipal Code is hereby amended to read in its entirety as follows: 20 8.90.010 Title 21 22 This Chapter may be cited as the Mobile Home Park Rent Stabilization Ordinance of the City of San Bernardino, California. 23 8.90.020 Statement of purpose 24 25 A. Mobile home owners have a substantial investment in their residences and appurtenances for which space is rented or leased. Alternate sites for relocation 26 of mobile homes are difficult to find due to the shortage of vacant spaces, the restrictions of age, size, or style of mobile homes permitted in many parks, and 27 related to the installation of mobile homes, including pennits, landscaping and 28 site preparation. Additionally, the cost of moving a mobile home is substantial, and the risk of damage in moving is significant. 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The result of these conditions is the creation of a captive market of mobile home owners and tenants. This immobility, in turn, contributes to the creation of a great imbalance in the bargaining relationship between park owners and mobile home park tenants in favor of the park owners. B. Because mobile homes are often occupied by senior citizens, persons on fixed income and persons of low or moderate income, exorbitant rent adjustments fall upon these individuals with particular harshness. The continuing possibility of unreasonable space rental adjustments in mobile home parks threatens to diminish the value of the investment of the mobile home owners. Further, existing state law permits mobile home park owners to require mobile home owners to make modifications to their homes for reasons of aesthetics or confonnity to park standards that amount to capital improvements which would accrue to the benefit of the park owner by potentially increasing the market value of the park itself. C. This Council finds and declares it necessary to facilitate and encourage fair bargaining between mobile home owners and park owners in order to achieve mutually satisfactory agreements regarding space rental rates in mobile home parks. Absent such agreements, this Council further finds and declares it necessary to protect the owners and residents of mobile homes from unreasonable space rental adjustments while simultaneously recognizing and providing for the need of park owners to receive a just and reasonable return on their property. 8.90.030 Application The provisions of this Chapter shall apply to all mobile home residential rental spaces located within the City of San Bernardino except if otherwise exempt from the provisions of this Title, as such exemptions are provided for hereinafter. Nothing in this Chapter shall be deemed to supersede any provision of California Civil Code Section 798, et seq. 8.90.040 Definitions In construing the provisions of this Chapter, the following definitions shall apply: A. "City Manager" means the City Manager or his or her designee. B. "Consumer Price Index" or "C.P.I." means the Index known as the "Consumer Price Index for all Urban Wage Consumers: for the Los Angeles - Long Beach — Anaheim Area," (base year, 1967), and if published for the San Bernardino — Riverside -Ontario Area for the year 1984, and thereafter. These documents are published by the United States Department of Labor Bureau of Labor Statistics. 2 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C. "Hearing Officer" is an individual appointed by the Mayor and City Council to hear matters on which testimony may be taken. D. "Landlord" means any owner, lessor, operator or manager of a mobile home park. E. "Mobile Home" means a structure designed for human habitation and for being moved on a street or highway under permit pursuant to Section 35790 of the Vehicle Code. Mobile home does not include "recreational vehicle" as defined in Section 799.29 of the Civil Code or a "commercial modular" as defined in Section 18218 of the Health and Safety Code. F. "Mobile Home Owner" or "Resident" means any person entitled to occupy a mobile home dwelling space pursuant to ownership thereof or a rental or lease agreement with the owner thereof. G. "Mobile Home Park Owner" or "Park Owner" means the owner, lessor, operator, manager or designated agent thereof of a mobile home park; sometimes referred to as "owner." H. "Mobile Home Space" or "Space" means the site within a mobile home park intended, designed, or used for the location or accommodation of a mobile home and any accessory structures or appurtenances attached thereto or used in conjunction therewith. I. "Rent" means the consideration, including any bonus, benefit or gratuity, demanded or received by a landlord for the use and occupancy, including services and amenities, of a residential rental space. "Rent Adjustments" means any rent increase or decrease demanded of or paid by a tenant, including any reduction in housing services without a corresponding reduction in the monies demanded or paid for rent. K. "Rental Agreement" means an agreement between a mobile home park owner and tenant establishing the terns and conditions of a tenancy in a mobile home park. A lease is a rental agreement. L. "Residential rental space" means any mobile home space occupied by any person other than the owner of the park for payment of rent pursuant to an oral or written lease, or other form of rental agreement. M. "Space Rent" means the consideration, including any bonuses, benefits, or gratuities demanded or received for and in connection with the use or occupancy of a mobile home space within a mobile home park, or for housing services provided and security deposits, but exclusive of any amounts paid for the use of the mobile home as a dwelling unit. The use or occupancy of a mobile home 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 space shall include the exercise of all rights and privileges and the use of facilities, services and amenities accruing to the residents thereof. "Space Rent" shall not include any separately billed utility fees and charges for natural gas or liquid propane gas, electricity, water, cable television, garbage or refuse service and sewer service. N. "Tenancy" means the right of a tenant to the use of a mobile home site within a mobile home park on which to locate, maintain, and occupy a mobile home, site improvements and accessory structures; for human habitation, including the use of the services and facilities of the mobile home park. 0. "Tenant" means any person entitled to or proposing to occupy such mobile home space pursuant to an oral or written lease with the owner thereof, or pursuant to some other rental agreement with the owner, lessor, operator or manager thereof. P. "Vacancy" means the condition deemed to have occurred upon the removal of any mobile home from a mobile home park. 8.90.050 Exemptions from coverage The provisions of this Ordinance shall not apply to the following: A. New Space or First Time Space Exemption - Space rent or space rent adjustments for new mobile home spaces first rented after the effective date of this Chapter shall be exempt from the provisions of the Chapter to the extent that those rents would have been controlled had the spaces been previously occupied. There shall be no prospective exemption in such circumstances, however, as to rents that may be adjusted annually under this Chapter after a space is first rented. In such cases, the base date for purposes of detennining permissible future rent adjustments shall be the date of first rental or conveyance. B. Vacancies If the mobile home space is voluntarily vacated by the tenant, or vacated pursuant to California Civil Code Section 798.56, the landlord may adjust the rental rate to any amount as provided in Subsection A of this Section 8.90.050. 2. If the mobile home is sold and is to remain on site, the landlord may increase the rental rate for the new resident by an amount not to exceed ten percent (10%) of the then existing rent. Any rent increase pursuant to this Subsection B2 shall be implemented at the time the new resident first occupies the space and/or first enters into a rental agreement with the landlord. The implementation of any rent increase allowed under this Subsection B shall not change the anniversary date for the annual permissive inflationary adjustment to rent allowed under Section 8.90.100(A) of this Chapter. 11 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4. A vacancy is voluntary if the tenant voluntarily and without coercion by the landlord vacates the rental space or, if the tenant dies and there is no surviving cohabitant. Where the rent is increased pursuant to this Subsection B, the landlord shall, at the time the rent increase is implemented, provide the new tenant with written notice of the previous base rent for the space, the new base rent for the space in both dollar and percentage terms, and the anniversary date for the space for purposes of the annual pennissive inflationary adjustment to rent allowed under Section 8.90.100(A) of this Chapter. The rent increases allowed under this Subsection B shall be in addition to any other rent increases authorized by this Chapter, including but not limited to the annual pennissive inflationary adjustment to rent allowed under Section 8.90.100(A) of this Chapter. Notwithstanding anything herein to the contrary, nothing in this Chapter shall preclude any landlord from implementing any rent increases that are exempt under the provisions of the California Mobile Home Residency Law, including any rent increases that are exempt under Civil Code Sections 798.17, 798.41 and/or 798.49. 8.90.060 Registration Within sixty (60) calendar days after the effective date of this Chapter, mobile home park owners are required to register all mobile home parks and mobile home rental spaces within such parks with the City Manager. The initial registration shall include: the name(s), business address(es), business telephone number(s) of each person or legal entity possessing an ownership interest in the park and the nature of such interest; the number of mobile home rental spaces within the park; a rent schedule reflecting space rents within the park on the effective date of this Chapter; a listing of all other charges, including utilities not included in space rent, paid by mobile home residents within the park and the approximate amount of each such charge; and the name and address to which all required notices and correspondence may be sent. The City Manager is hereby empowered to establish procedures for requiring such re -registration as he/she deems necessary. No park owner shall be eligible to receive any rent ceiling adjustment as provided for under the provisions of this Chapter unless such current registration as may then be required for the mobile home park is on file with the City Manager at the time the petition for the rent ceiling adjustment is filed. 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The registration and re -registration requirement provided for in this section, or which may be hereafter established by the City Manager, shall apply to all mobile home parks including those exempt from the space rent ceiling limitation by reason of the existence of a valid space rent agreement. 8.90.080 Space rent ceiling or maximum allowable space rent Beginning the first month which commences following the day after the effective date of this Chapter when originally adopted on March 24`x', 1993, no mobile home park owner shall charge space rent for any mobile home space in an amount greater than the space rent in effect on December 31, 1988. The space rent in effect on that date shall be known as the "space rent ceiling." If there was no space rent in effect on December 31, 1988, the space rent ceiling shall be the space rent that was charged on the first date that space rent was charged after December 31, 1988. If a mobile home park is exempted from the application of this Chapter by reason of the existence of a space rent agreement and this agreement expires, the space rent ceiling for that park shall be the space rent in effect on the date the agreement expires. 8.90.090 Space rent ceiling adjustment - initial adjustment A. No adjustment in space rent ceilings shall be pennitted except as provided for herein. B. Permissive Adjustment - A park owner shall be entitled to an initial permissive adjustment gross space rental income equal to eighty percent (80%) of the percentage increase in the Consumer Price Index (CPI) from the end of the base year (1988) to the date of application for the adjustment. The percentage adjustment in the CPI shall be calculated by subtracting the CPI reported for December, 1989, from the most recently reported monthly CPI preceding the application and then dividing this remainder by the December, 1989 CPI. 8.90.100 Space rent ceiling adjustment - annual adjustments Commencing in calendar year 1990, park owners shall be entitled to the following annual adjustments. A. Pennissive Adjustment - A park owner shall be entitled to an annual pennissive adjustment of gross space rental income equal to eighty percent (80%) of the percentage adjustment in the CPI from the date of the most recent initial or annual adjustment to the date of application for the proposed adjustment. B. Net Operating Income Adjustment C 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In the event a park owner believes he or she does not receive a just and reasonable return on park property after receiving the maximum permissive adjustment provided for above, said park owner may upon payment of a filing fee established by resolution of the Mayor and City Council, file an application with the City Manager for an adjustment of the space rent ceiling, providing adequate justification for the proposed increase. 2. If the City Manager shall designate a form for the filing of such petition, such petition shall be filed upon such form. If no such form shall be designated, such petition shall be in writing verified by the applicant, and shall contain the naives, address and telephone number of the applicant, the name and address of the tenant of each rental space which would be affected if the petition were granted, a statement of the facts giving rise to the petition for a Net Operating Income (NOI) adjustment in sufficient detail that if established, such facts would demonstrate the existence of a decrease in the NOI warranting such NOI adjustment. Within thirty (30) working days after the petition has been submitted to the City Manager for filing, petitioner shall be given notice of the time and place of the hearing, which notice together with a copy of the petition shall be served upon or mailed to each tenant of a rental space which would be affected by the NOI adjustment if granted. When a declaration of service has been submitted to the City Manager, the petition for an NOI adjustment shall be deemed filed. 3. A park owner shall be entitled to an adjustment of the space rent ceiling so as to enable the park owner's Net Operating Income (NOI) for the subsequent year to be increased by a rate which, when added to the maximum permissible adjustment provided for above will give the park owner a just and reasonable return on park property. C. Special Assessment Based on Capital Improvements. An application for a special assessment based on the cost of a completed capital improvement may be filed with the City Manager pursuant to this subsection. For the purposes of this subsection "Capital Improvement" is defined as the installation of new improvements and facilities and/or the replacement or reconstruction of existing improvements and facilities which consist of more than ordinary maintenance or repairs, with a useful life of at least five (5) years, and have been agreed upon between the park owner, the resident committee, if any, and approved by more than 50 percent of the owners of all mobile -homes located within the park in an election called to consider the matter with each space casting one vote. 2. A special assessment may be granted at the discretion of the Hearing Officer considering all circumstances without approval of the homeowners if the capital improvement is necessary to protect the health and safety of the residents of the park, or to comply with governmental laws or regulations. 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Capital Improvement Assessments shall be amortized over the useful life of the improvement as set forth in Internal Revenue Service "class life" tables then in effect, unless the Hearing Officer in his/her discretion determines that the use of such tables is unreasonable under the circumstances. 4. In addition to the cost of the improvements(s) the Assessment shall include interest at two percent over the prime rate at Bank of America in effect at the time the assessment is approved calculated annually on the unamortized cost of improvement. 5. Capital Improvement Assessments shall be apportioned equally among all spaces in the mobile -home park and shall be payable monthly, and shall be set forth by the park owner as a separate item from the space rent. The Assessment shall remain in effect until the cost of the improvement, plus interest as set forth herein, has been fully recovered. D. No annual adjustment shall become effective if the previous annual adjustment became effective within the previous twelve (12) months unless approved by the Hearing Officer pursuant to Section 8.90. 100 B. 8.90.105 Required Certification on Rental Adjustment Notice The Hearing Officer shall have the right to deny any rent adjustments under this Chapter if the owner: A. Has failed to comply with any provisions of this Chapter and/or regulations issued thereunder by the City Manager or the Mayor and City Council or any other federal, state or City law, ordinance or regulation concerning mobile home parks. B. Has failed to comply substantially with any applicable state or local housing, health or safety law. 8.90.110 Powers and Duties of the City Manager The City Manager shall administer and carry out to the fullest extent possible the expressed intent and purposes of this Chapter. The City Manager shall have the following duties, responsibilities, and functions, together with all powers reasonably incidental thereto: A. Adoption of Rules and Regulations. Subject to the approval of the Mayor and City Council the City Manager may snake and adopt her/his own administrative rules and regulations as may be necessary to effectuate the purposes and policies of this Chapter and to enable the City Manager to carry out his/her powers and duties thereunder, so long as such rules and regulations are consistent with the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 laws of the State, this Chapter, and any guidelines adopted by the Mayor and City Council. Any such rules and regulations shall be reduced to writing and be on file with the City Manager at all times. B. Maintenance of Records. The City Manager shall keep a record of the hearing proceedings, which shall be open for inspection by any member of the public. C. Conduct Studies and Investigations. The City Manager shall have the power to make such studies, surveys, and investigations, and obtain such information as is necessary to carry out her/his powers and duties. D. Require Registration. The City Manager shall require such registration of mobile home parks as the City Manager may deem necessary to carry out his/her duties. E. Evaluation. The City Manager shall render at least semi-annually a comprehensive written report to the Mayor and City Council concerning the activities, holdings, actions, results of hearings, and all other matters pertinent to this Chapter. F. Related Duties. The City Manager shall undertake such other related duties as may be assigned by the Mayor and City Council. 8.90.120 Petition by tenant A. Any tenant of a mobile home rental space affected by this Chapter, upon payment of such filing fee as shall be duly established, may petition the City for a determination whether a proposed or actual action by the landlord of such tenant is legal, valid, and within the terms of this Chapter. If the City Manager shall establish fonns for such petitions, the petition shall be prepared and submitted upon such fon-n. In the absence of such designated form, the petition shall contain the name, address and telephone number, if known, of the landlord, owner, manager, or other person authorized to represent the owner of the mobile home park, a brief statement of the facts giving rise to the request for interpretation or determination, and a statement that a copy of the petition has been personally served or mailed to the owner, manager or other person authorized to accept and receive notices to the landlord. B. In the event that a petition by tenant(s) results in a downward adjustment in the space rent, the park owner shall not be obligated to adjust any rent except the rent of those tenant(s) who signed the petition and paid the established filing fee. 8.90.130 Petition by landlord Any landlord of a mobile home park affected by this Chapter may, upon, payment of such filing fee as shall be duly established, petition the City for a determination whether a particular course of action by said landlord is allowable, valid and in conformity with this Chapter. The City Manager may designate forms for the 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 filing of such petitions. In the event that no such form has been designated, the petition shall be in writing, and shall contain the name, address and telephone number, if any, of the person requesting the interpretation or opinion, the name and address of each tenant of a rental unit owned or managed by the person requesting the interpretation or opinion, if it is intended that such interpretation or opinion affects such rental unit, a brief statement of the facts giving rise to the request for interpretation or opinion, and a statement that a copy of such petition has been personally served upon or mailed to each such tenant who might be affected thereby. 8.90.140 Conduct of Proceedings A. The Mayor and City Council shall appoint a Hearing Officer to hear matters pertaining to San Bernardino Municipal Code Chapter 8.90. B. Each party to a hearing may have assistance in presenting evidence or in setting forth by argument his position, from an attorney or such other person as may be designated by said party. C. Fon-nal rules of evidence shall not apply in proceedings; however, all oral testimony offered as evidence shall be under oath. D. In the event that any party shall fail to appear at the time and place set for hearing of a petition, the Hearing Officer may hear and review such evidence as may be presented, and may make such findings and decisions as shall be supported by the evidence presented. E. The Hearing Officer shall base his/her decision on evidence presented at the hearing and may consider any evidence resulting from independent investigations of the City Manager pursuant to §8.90.110. 4 of this Chapter, where such evidence has been disclosed to the parties. F. The Hearing Officer shall make findings based on the evidence as to each fact relevant to the Hearing Officer's decision on the petition. The decision of the Hearing Officer shall be based upon the findings, and shall: Determine whether the action or proposed action of a landlord is valid, permitted, and in conformity with this Chapter; and/or 2. Detennine whether an adjustment is necessary, and if so, the nature and amount of relief to be granted or authorized to the landlord or homeowner. G. The Hearing Officer shall consider the evidence and arguments of the parties no later than thirty (30) days after the matter has been submitted for decision and the Hearing Officer shall snake her/his final decision at the conclusion of their deliberations. No rent adjustment will be authorized unless supported by the evidence. A notice of the Hearing Officer's decision shall be sent to each party to a proceeding. Unless good cause to the contrary shall appear, each decision of 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the Hearing Officer shall apply on a space by space basis, taking into account the possibility of differences in base rent, services provided, and other facts differentiating rental spaces. H. Nothing in this Chapter, or in any decision of the Hearing Officer, shall require any landlord to raise rents or charges to tenants. If an adjustment in the maximum permissible rent is authorized, a landlord may raise rents or charges by a lesser amount, or for a lesser time than is authorized by the decision of the Hearing Officer. The findings and decisions of the Hearing Officer shall be a final administrative action. There shall be no right of appeal to the Mayor and City Council. Such findings and decisions shall be public records, and may be certified by the City Clerk. Each decision shall set forth a notice as required by California Government Code Section 1094.6. The decision shall become effective upon mailing to the party unless otherwise indicated at the hearing. This section supersedes Chapter 2.64 of the San Bernardino Municipal Code. 8.90.150 Priorities All petitions for hearings shall be heard in order of date filed. 8.90.160 Rent adjustment regulations For purposes of determining allowable rent adjustments, the rules and regulations set forth in this section shall be used. In authorizing individual adjustments of the rent ceilings, the Hearing Officer shall consider the purposes of this Chapter and the requirements of law. The Hearing Officer may consider all relevant factors including: increases or decreases in operating and maintenance expenses, the extent and cost of utilities paid by the owner, necessary and reasonable capital improvements of the park as distinguished from normal repair, replacement and maintenance, increases or decreases in amenities, equipment, insurance or services, substantial deterioration of the park other than as a result of ordinary wear and tear, failure on the part of the owner to provide adequate repair, housing services or failure on the part of the owner to comply with applicable housing, health and safety codes, federal and state income tax benefits, the speculative nature of the investment, whether or not the property is acquired or is held as a long term or short term investment, the owner's rate of return on investment, the owner's current and base year Net Operating Income and any other factors deemed relevant by the Hearing Officer in providing the owner a fair return. A sale of a mobile home park by the owner, subsequent to June 3, 1991, which results in a Proposition 13 tax increase, cannot be a factor to be considered in a request for a rent adjustment by the new owners. 8.90.170 Net operating income Net Operating Income (NOI) shall be gross income less allowable operating expenses. 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8.90.180 Gross income Gross Income equals: A. Gross rents, computed as gross rental income at 100% paid occupancy, plus B. Interest from rental deposits, unless directly paid by the landlord to the tenants, plus C. Income from miscellaneous sources, including, but not limited to, laundry facilities, vending machines, amusement devices, cleaning fees or services, garage and parking fees, plus D. All other income or consideration received or receivable for or in connection with the use or occupancy of rental units, E. Minus uncollected rents due to vacancy and bad debts to the extent that the same are beyond the landlord's control. 8.90.190 Allowable Operating Expenses Operating expenses shall include the following: A. Real property taxes, B. Utility costs, C. Management fees actually paid if management services are contracted for. If all or a portion of management services are performed by landlord, management fees shall include the reasonable value for such landlord perforined services. Management fees greater than five percent (5%) of gross income are presumed to be unreasonable. Such presumption may be rebutted. D. Other reasonable management expenses, including, but not limited to, necessary and reasonable advertising, accounting and insurance. E. Normal repair and maintenance expenses, including, but not limited to, painting, normal cleaning, fumigation, landscaping, and repair of all standard services, including electrical, plumbing, carpentry, furnished appliances, drapes, carpets, and furniture. E. Owner-perfonned labor, which shall be compensated at the following hourly rates upon documentation of the date, time, and nature of the work performed: 1. At the general prevailing rate of per diem wages for the San Bernardino area, for the specific type of work performed, as detennined and published by the 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Director of the Department of Industrial Relations of the State of California pursuant to Section 1770, et seq. of the Labor Code of the State of California. 2. If no such general prevailing rate has been detennined and published, then a cost per hour for general maintenance and a cost per hour for skilled labor as established by resolution of the Mayor and City Council. Notwithstanding the above, a landlord may receive greater or lesser compensation for self - labor if the landlord proves by clear and convincing evidence that the amounts set forth above are substantially unfair in a given case. Owner perfonned labor in excess of 5% of Gross Income shall not be allowed unless the landlord proves by clear and convincing evidence that such excess labor expenses resulted in proportionately greater services for the benefit of tenants. G. License and registration fees required by law to the extent same are not otherwise paid by tenants. H. The yearly amortized portion of capital expenses including financing costs, computed in accordance with any useful life table utilized by the Internal Revenue Service. I. Reasonable attorney's fees and costs incurred as normal and reasonable costs of doing business, including, but not limited to, good faith attempts to recover rents owing and good faith unlawful detainer actions not in derogation of applicable law, to the extent same are not recovered from tenants. 8.90.200 Operating expenses not allowable Operating expenses shall not include the following: A. Avoidable and unreasonable or unnecessary expenses; B. Mortgage principal and interest payments; C. Lease purchase payments and rent or lease payments to landlord's lessor; D. Penalties, fees or interest assessed or awarded for violation of this or any other statute; E. Attorney's fees and other costs incurred for proceedings before the Hearing Officer or in preparation for such proceedings, or in connection with any civil actions or proceedings against the City, or a decision, ruling, or order of the Hearing Officer; F. Depreciation of the real property; 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 G. Any expenses for which the landlord has been reimbursed by any security deposit, insurance settlement, judgment for damages, settlement, or any other method. 8.90.210 Presumption of fair base year net operating income Except as provided in Section 8.90.220, it shall be presumed that the Net Operating Income produced by a park owner during the base year, provided a fair return on property. Owners shall be entitled to maintain and increase their Net Operating Income from year to year in accordance with Sections 8.90.080 and 8.90. 100.13. 8.90.220 Rebutting the presumption It may be detennined that the base year net operating income yielded other than a fair return on property, in which case, the base year Net Operating Income may be adjusted accordingly. In order to snake such a determination, the Hearing Officer must make at least one of the following findings: A. The owner's operating and maintenance expenses in the base year were unusually high or low in comparison to other years. In such instances, adjustments may be made in calculating such expenses so the base year operating expenses reflect average expenses for the property over a reasonable period of time. The hearing officer shall consider the following factors: The owners made substantial capital improvements during 1988 which were not reflected in the rent levels on the base date. 2. Substantial repairs were made due to damage caused by natural disaster or vandalism which management has taken appropriate action to reduce. Maintenance and repair were below accepted standards so as to cause significant deterioration in the quality of housing services. 4. Other expenses were unreasonably high or low notwithstanding the following of prudent business measures. B. The rental rates on the base date were disproportionate due to enumerated factors below. In such instances, adjustments may be made in calculating gross rents consistent with the purpose of this Chapter. 1. The rental rates on the base date were substantially higher or lower than in preceding months by reason of premiums being charged or rebates being given for reasons unique to particular units or limited to the period detennining the base rent. 14 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. The rent on the base date was substantially higher or lower than at other times of the year by reason of seasonal demand or seasonal variations in rent. The rental rates on the base date were exceptionally high or low due to other factors which would cause the application of the base year net operating income to result in gross inequity to either the owner or tenant. 8.90.230 Determination of base year net operating income A. To detennine the Net Operating hlcome during the base year, there shall be deducted from the annualized gross income being realized in 1988, a sum equal to the actual operating expenses for calendar year 1988, unless the owner demonstrates to the satisfaction of the Hearing Officer that the use of some other consecutive 12 -month period is justified by reasons consistent with the purposes of this section. B. In the event the owner did not own the subject property during the base year, the operating expenses for 1988 shall be determined by one of the following methods whichever the Hearing Officer deter -nines to be more reliable in the particular case: The previous owner's actual operating expenses as defined in Section 8.90. 190 if such figures were available, or 2. Actual operating expenses for the first calendar year of ownership, discounted to 1988 by the schedule. 8.90.240 Determination of current year net operating income To determine the current year net operating income, there shall be deducted from the annualized gross income, determined by analyzing the monthly rents in effect at the time of filing of a petition, a sum equal to the actual operating expenses for the last calendar year (unless the owner demonstrates to the satisfaction of the Hearing Officer that the use of some other consecutive 12 -month period is justified by reasons consistent with the purposes of this section). 8.90.250 Schedule of increases in operating expenses Where scheduling of rental increases, or other calculations, requires projections of income and expenses, it shall be assumed that operating expenses, exclusive of property taxes, and management expenses, increases at 5% per year, that property taxes increase at 2% per year, and that management expenses constitute 5% of gross income, provided, however, that if actual increases are greater or less than those listed in this section, the actual increases shown according to proof shall be the increases applicable. 1F 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8.90.260 Allowable rent adjustments The Hearing Officer may permit rent adjustments, unless otherwise prescribed by law, such that the owner's net operating income will be adjusted at the rate as specified in Section 8.90. 100 B.2. 8.90.270 Discretionary considerations While the Net Operating Income formula should operate to guarantee a park owner a fair return on investment, the Hearing Officer considering a request for rent increases shall consider all relevant factors presented in snaking a determination, as set forth in this Chapter. 8.90.280 Limit on increases pending hearing or litigation Notwithstanding any other provisions of this Chapter, no adjustment in rents in a mobile home park shall be valid during the time that any hearing or proceeding is being conducted pursuant to this Chapter, nor shall such increase be valid during the period in which the Hearing Officer's decision for that park is being reviewed by a Court of competent jurisdiction, except those the tenants shall be required to pay as the Permissible Adjustment as provided for under Section 8.90.090 B. 8.90.290 Rent adjustments for reduction in services A. No owner shall reduce the level or kind of services provided to tenants as of the date of adoption of this Chapter or take any other punitive action in retaliation for the exercise by tenants of any of the rights granted by this Chapter. B. If a mobile home park provides in the rent, without separate charge, utilities or similar services (including, but not limited to, natural gas, electricity, water, sewer, trash, and cable television) and converts to separate charge for such service by separate metering, separate charge or other lawful means of transferring to the tenant the obligation for payment for such services, the cost savings shall be passed through to tenants by a rent adjustment equal to the actual cost to the park of such transferred utility or similar service (less common area usage, based on costs for the twelve (12) months period prior to notice to the tenants of the change). Provided compliance with this section occurs, provisions for mediation and/or hearing shall not apply. It is the intent of this Section for those rental agreements entered into on or after January 1, 1991, to be consistent with the provisions of Civil Code Section 798.41 as adopted by Chapter 1013, Section 2 of the Statutes of 1990. C. For purposes of Section 8.90.290 A. above, in determining cost savings to be passed on to tenants in the form of decreased rent, the cost of installation of separate utility meters, or similar costs incurred by the owner to shift the obligation for payment of utility costs to the tenants shall not be considered. 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 However, this shall not be construed to prohibit or prevent the consideration of inclusion of such costs as an increased operating expense at mediation or arbitration. D. If a service other than a utility or similar service per subsection A. above is reduced or eliminated, or if a utility or similar service is reduced or eliminated without a concomitant decrease in rent, the provisions of this Chapter regarding petition and/or hearing shall apply subject to the following conditions. Any petition initiating mediation or hearing must be filed within twelve (12) months of the date on which the service was reduced or eliminated, and the reduction or elimination in services must continue to exist at the time of the hearing. Rent adjustments shall only be granted prospectively. 8.90.300 Quantum of proof and burden of proof The decision of the Hearing Officer must be supported by the evidence submitted at the hearing. The petitioning party shall have the burden of proof in such proceedings. 8.90.310 Hearing Officer Decision Final The decision of the Hearing Officer is final. This section specifically supersedes Municipal Code Chapter 2.64. 8.90.320 Judicial review An owner or tenant aggrieved by any action of the Hearing Officer may seek judicial review by appealing to the appropriate Court within the jurisdiction. Sections 1094.5 and 1094.6 of the Code of Civil Procedure are applicable. 8.90.330 Termination of tenancy A tenancy which is not held pursuant to a written rental agreement that confonns to the provisions of Section 798.15, et seq. of the California Civil Code shall be terminated only pursuant to Section 798.55, et seq. of the California Civil Code. 8.90.340 Remedies for violation A. Civil Remedies - Any person who demands, accepts, or retains any payment in violation of any provision of this Chapter shall be liable in a civil action to the person from whom such payment is demanded, accepted, or retained for damages in the\sum of three (3) times the amount by which the payment or payments demanded, accepted or retained exceed the maximum rent which could lawfully be demanded, accepted, or retained, together with reasonable attorney's fees and costs as determined by the Court. 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B. Criminal Remedies - It shall be unlawful for an owner to adjust any rent in an amount in excess of that allowed under this Chapter or by order of the Hearing Officer. Any owner who willfully and knowingly violates any of the provisions of this Chapter or the orders of the Hearing Officer shall be guilty of a misdemeanor. C. Injunctive and Other Civil Relief - The City Manager, the City, and the tenants and owners may seek relief from the appropriate Court in the jurisdiction within which the rental unit is located to enforce any provision of this Chapter or its implementing regulations or to restrain or enjoin any violation of this Chapter and of the rules, regulations, orders and decisions of the Hearing Officer. D. Non -waiver of Rights - Any waiver or purported waiver by a tenant of rights granted under this Chapter prior to the time when such rights may be exercised, whether oral or written, shall be void as contrary to public policy. 8.90.350 Periodic review of Chapter A. The Mayor and City Council shall review the provisions of the Chapter at any other time deemed appropriate, in order to consider the following: Whether this Chapter continues to be necessary to protect the public health, safety, and welfare. 2. Whether the implementation of the provisions of this Chapter have been adequate, and Whether the provisions of this Chapter should be amended to provide more effective regulations or to avoid unnecessary hardship. 8.90.360 Chapter to be liberally construed This Chapter shall be liberally construed to achieve the purposes of this Chapter and to preserve its validity. SECTION 2. INCONSISTENCIES. Any provision of the San Bernardino Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies, is hereby repealed or modified to the extent necessary to effect the provisions of this Ordinance. SECTION 3. SEVERABILITY. If any section, subsection, subdivision, sentence, clause, phrase, or word in this Ordinance or any part thereof is for any reason held to be unconstitutional, invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Ordinance or any part thereof. The Mayor and City Council hereby declares that it would have adopted each IN 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 section irrespective of the fact that any one or more subsections, subdivisions, sentences, clauses, phrases, or words be declared unconstitutional, invalid, or ineffective. SECTION 4. PUBLICATION. This Ordinance shall take effect and be in full force thirty (3 0) days from and after the passage thereof, and prior to the expiration of fifteen (15) days from its passage shall be published once in a newspaper of general circulation, printed and published in the City of San Bernardino or, in the alternative, the City Clerk may cause to be published a summary of this Ordinance and a certified copy of the text of this Ordinance shall be posted in the office of the City Clerk five (5) days prior to the date of adoption of this Ordinance, and within fifteen (15) days after adoption, the City Clerk shall cause to be published the aforementioned summary and shall post in the office of the City Clerk a certified copy of this Ordinance together with the names of the members of the City Council voting for and against the same. 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDINANCE NO. MC -1481 ORDINANCE OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, AMENDING SAN BERNARDINO MUNICIPAL CODE CHAPTER 8.90 (MOBILE HOME RENTS) DISSOLVING THE MOBILE HOME RENT BOARD AND DELEGATING RESPONSIBILITY FOR THE REVIEW OF MOBILE HOME PARK RENT INCREASE REQUESTS TO AN INDEPENDENT HEARING OFFICER I HEREBY CERTIFY that the foregoing Ordinance was duly adopted by the Mayor and City Council of the City of San Bernardino at a joint regular meeting thereof, held on the I e day of April 2018, by the following vote, to wit: Council Members: AYES MARQUEZ BARRIOS VALDIVIA SHORETT NICKEL RICHARD MULVIHILL kis) NAYS ABSTAIN ABSENT Georgeann Manna, CMC, Uty Clerk The foregoing Ordinance is hereby approved this 18a' day of A rid 2018ox G R. Carey Davi, Mayor City of San Bernardino Approved as to form: Gary D. Saenz, City Attorney B<L�) ye, 20