2020/09/03 Mobile Home Park Rent Appeals Board Agenda Packet
City of Rohnert Park
Mobile Home Parks Rent Appeals Board
A G E N D A
Thursday, September 3, 2020 -- 6:00 P.M.
* COVID-19 NOTICE *
Consistent with Executive Orders No. N-25-20 and No. N-29-20 from the Executive Department
of the State of California and the Sonoma County Health Official’s March 17, 2020 and March
31, 2020 Shelter in Place Orders, the Mobile Home Parks Rent Appeals Board Meeting will
not be physically open to the public and Board Members will be teleconferencing into the
meeting via Zoom Video Communications software.
How to observe the Meeting:
To maximize public safety while still maintaining transparency and public access, members of
the public can observe the meeting on Cable Channel 26 or by visiting meeting central on our
website https://www.rpcity.org/city_hall/city_council/meeting_central
How to submit Public Comment:
Members of the public may provide public comment by sending comments to the Recording
Secretary by email at rab@rpcity.org. Comments are requested by 3:00 p.m. on the day of the
meeting, but can be emailed until the close of the Agenda Item for which the comment is
submitted. Email comments must identify the Agenda Item Number in the subject line of the
email and should be a maximum of 350 words, which corresponds to approximately 3 minutes of
speaking time. The comments will be read for the record, with a maximum allowance of 30
minutes of total public comments, subject to the Chair’s discretion. If a comment is received
after the agenda item is heard but before the close of the meeting, the comment will still be
included as a part of the record of the meeting but will not be read for the record or considered in
connection with the agenda item.
1. CALL TO ORDER
2. PLEDGE OF ALLEGIANCE
3. ROLL CALL (Engelhart___ Finnigan___ Kirby___ Reymond___ Waterman___)
4. ACKNOWLEDGEMENT OF POSTING OF AGENDA. Agenda posted in a
minimum of three public places: Community Center, Public Safety Building & City Hall.
5. PUBLIC COMMENT (Items not on Agenda). Persons who wish to speak to the Board
regarding an item that is not on the agenda may do so at this time.
6. CONSENT CALENDAR – APPROVAL OF MINUTES
7. AGENDA ITEMS
7.1 Accounts Receivable Write-off of Outstanding Balance of 2014 Rancho Verde
Mobile Home Park Petition
7.2 Study Session on Changing Accounting Period from Calendar Year to Fiscal Year
7.3 Study Session on 2021 Budget
8. ITEMS FROM THE BOARD
9. ITEMS FROM THE STAFF
10. SECOND PUBLIC COMMENT PERIOD (Items not on Agenda)
11. NEXT REGULARLY SCHEDULED MEETING
12. ADJOURNMENT
Page | 1
DATE: September 3, 2020
TO: Rent Appeals Board
FROM: Manuel Orozco, Accounting Supervisor
SUBJECT: Item 7.1 – Accounts Receivable Write-off of Outstanding Balance of 2014
Rancho Verde Mobile Home Park Petition
RECOMMENDED ACTION: Consider staff recommendation to write-off the remaining
balance for Rancho Verde Mobile Home Park Petition CIPT 2014-01 and direct staff to include
this adjustment in next year’s budget.
BACKGROUND: On April 14, 2014, Rancho Verde Mobile Home Park (RVP) submitted a
petition to the Rent Appeals Board for a capital improvement pass-through (CIPT) to recoup the
costs of repaving the asphalt roadways in the park. The total Rent Appeals Board costs incurred
by this petition were $129,033.99, of which RVP submitted payment for $40,000. Staff
demanded payment of the outstanding $89,033.99 in three formal letters, but received no
payment. At its January 5, 2017 meeting, the Board adopt Resolution 2017-01, which ordered
RVP to immediately remit $89,033.99 to fully reimburse the Board for the costs it incurred to
process the petition. Staff submitted this demand on behalf of the Board, but received no
response from RVP. The Board has attempted collection of this bill several times, and to date,
has received nothing from RVP.
Staff discussed the Board’s options for bill collection with the City Attorney’s office, who
informed us that the only route left to the Board would be to file a lawsuit against RVP. This
would likely cost substantially more than the $89,033.99 the Board is attempting to collect from
RVP. For this reason, the Board has not pursued this option.
At the time that RVP submitted the 2014 petition, there was no formal reimbursement agreement
for landlord petitions in place and the Board did not have the power to cease work on a landlord
petition if the landlord was overdrawn on their petition deposit. On January 5, 2017, the Board
approved an amendment to the Mobile Home Parks Rules and Regulations (“Rules”) to
incorporate a reimbursement agreement for landlord petitions and appeals, and include a form
Reimbursement Agreement as an Exhibit. On November 7, 2019, the Board approved additional
amendments to the Rules which included setting $5,000 as the minimum account balance
threshold for landlord petitions. Thanks to these amendments, if a landlord submits a petition,
they must sign a Reimbursement Agreement and must keep their account balance over $5,000, or
the Board will cease work on their petition.
CITY OF ROHNERT PARK
Mobile Home Rent Appeals Board
Page | 2
DISCUSSION: At the Auditor’s request, the City accrued the $89,033.99 for the 2014 RVP
petition costs, during the period of time the Board was reviewing options with the City
Attorney’s office to collect the outstanding balance. This balance has remained as an accounts
receivable in the Board’s fund account for the past several years now. Since the Board is unlikely
to ever collect this amount, staff is requesting that we write-off the receivable balance.
STAFF RECOMMENDATION: Staff recommends the Board approve to write-off the 2014
Petition Costs of the Rancho Verde Mobile Home Park that was recorded as a receivable for
$89,033.99 as it is no longer recoverable. This would be formally approved along with the
budget at next month’s meeting.
FISCAL IMPACT/FUNDING SOURCE: This will result in a fund balance reduction of
$89,033.99 due to the write-off of the receivable and the reversal of prior year revenue. After this
reduction, the fund balance would be $214,757, which are sufficient funds for the Board’s
budget and reserves in the coming year.
Planning Manager Approval Date: 8/28/20
Page | 1
DATE: September 3, 2020
TO: Rent Appeals Board (RAB)
FROM: Manuel Orozco, Accounting Supervisor, Katie Edgar, Accountant, Yosselyn
Valencia, Accountant & Jenna Garcia, Housing Administrator
SUBJECT: Item 7.2 – Study Session on Changing Accounting Period from Calendar
Year to Fiscal Year
RECOMMENDED ACTION: Consider changing the accounting period of the Rent Appeals
Board from a Calendar Year budget that runs January 1-December 31 to a Fiscal Year period that
runs July 1-June 30, making it consistent with the accounting period of the remainder of the City
of Rohnert Park.
BACKGROUND: The City’s financial reporting system is organized on a fund basis.
Individual funds are utilized to identify financial transactions and resources associated with
providing specific activities or programs in conformance with special regulations, restrictions, or
limitations. Among these funds is the Rent Appeals Board (“the Board”) which was established
on December 8, 1987 by the Mobile Home Ordinance No. 494 and was amended by the passing
of Measure L approving the addition of Rohnert Park Municipal Code Section 9.70.132 in 1994.
Since its establishment, the Rent Appeals Board has operated under established Rules and
Regulations adopted to interpret Ordinance No. 494. Each October, the Board adopts its budget
and establishes registration fees to finance its expenses. While all other City programs are now
on a fiscal year budget cycle, which operates from July 1st to June 30th, the Board has remained
on a calendar year budget cycle, operating from January 1st to December 31st. This has created
challenges for tracking and managing the budget and expenses. The City’s financial software
system only tracks budgets and expenses within the fiscal year budgeting cycle, and the City is
audited on a fiscal year basis. In order to prepare budget documents for the Board, staff must
extract each month’s expenses from the system and manually enter it into an external
spreadsheet. This creates opportunity for errors. Additionally, because the budget cycle doesn’t
match the system, there is the potential for timing issues – where an expense may fall within the
“wrong year” because of when it was invoiced.
On September 5, 2019, the Board conducted a study session to consider changing its budget
cycle to a fiscal year. The Board considered this option and directed staff to look into an
additional option of changing the budget cycle to fiscal year and changing the due date of the
registration fees that fund the Board’s budget to July, instead of February. Staff has investigated
this option and is returning with information about both options.
CITY OF ROHNERT PARK
Mobile Home Rent Appeals Board
Page | 2
DISCUSSION: The Rent Appeals Board has historically operated under a calendar year budget
with the adoption of the budget in October and accounting period beginning January 1st. At its
October meeting, the Board also determines the annual registration fee for mobile home park
spaces based on the projected budget for the upcoming year and sets the annual general
adjustment, which determines the maximum allowable space rent for rent-controlled spaces in
Rohnert Park for the coming year. In October, staff sends each mobile home park owner a letter
notifying them of the annual general adjustment and the annual registration fee. The mobile
home park owners send formal notification to their tenants of rent increases for the coming year,
which includes both the increase per the annual general adjustment and the annual registration
fee. Mobile home park owners pay the City registration fees for all rent-controlled spaces within
their mobile home park by February of each year, and then pass along the costs to their tenants to
collect throughout the year.
The City’s Mobile Home Ordinance requires the annual general adjustment to be set on or after
February 1st of each year, based on annual CPI data collected from the previous September. The
Rent Appeals Board Rules and Regulations requires that the Board determine the annual
registration fee on or before December 1st and requires the landlords to re-register all mobile
home spaces by February 1st of each year. In order to promote efficiency and reduce the need for
rent increases to tenants more than once a year, the process to notify landlords of the annual
growth adjustment and registration fees has been consolidated. Below is a description of the two
options for moving the Board’s budget to a fiscal year.
Option 1: Move budget cycle to fiscal year, but keep registration fees due in February
(recommended).
The first option would move the Board’s budget cycle to a fiscal year but would not change
when registration fees are due. This would move the Board’s budget study session from October
to April and would mean that the Board would set registration fees based on previous year’s
actual costs rather than projected costs. This change would require no modifications to the
Ordinance or Rules and Regulations. See Table 1 below.
Table 1: Current and Proposed Budget Timeline
Month Current Proposed
January New budget year starts
February Registration fees due Registration fees due
April Approve fiscal year budget
July New budget year starts
September Study session for budget
October Set the annual general adjustment
Approve calendar year Budget
Set registration fees based on
projected expenses for coming year
Set the annual general adjustment
Set registration fees based on previous
year’s actual expenses
Page | 3
While different from how the Board has previously operated, staff believes that setting the
registration fees based on actual expenses from the previous year would allow the Board to better
manage its funds and ensure that it is not overcharging mobile home tenants. Over the past five
years, the Board has consistently budgeted more than it expended. This method of budgeting has
resulted in a high fund balance. The current fund balance is $214,757. While it is helpful to have
a buffer for unanticipated costs and tenant petitions, the Board does not need to continue
increasing its fund balance at this time. See Table 2 below for budget versus expended by year.
Table 2: Amount Budgeted Versus Expended by Year*
Year Budgeted Expended Difference
2016 $87,900.00 $50,601.44 +$37,298.56
2017 $99,100.00 $94,986.42 +$4,113.58
2018 $87,900.00 $78,900.07 +$8,999.93
2019 $82,900.00 $52,486.30 +$30,413.70
2020** $84,730.00 $8,798.96 +$75,931.04
TOTAL $442,530.00 $285,773.19 +156,756.81
* That this does not include expenses for petitions, which were paid for separately by mobile
home park owners.
** This includes only funds expended year-to-date through June 30, 2020.
Due to the economic impacts of COVID-19, many people today are struggling to make ends
meet. Most people living in mobile home parks are low income, which makes them
disproportionately affected. Because of the Board’s high fund balance and low funds expended
in the current year, staff believes that we can offer tenants COVID relief by providing a
registration fee waiver for the coming year. There will still be a cost for operating the Board, but
fees would be deferred to the following year. This would also give the Board time to adjust to
new its budget cycle.
The Board had previously expressed concern about setting up a budget that might “run in the
red” for part of the year. After considering this, staff recommends setting up a new fund structure
to ensure that there are ample funds available to cover expected and unexpected expenses. See
Table 3 demonstrating the recommended fund structure below.
Table 3: Fund Structure
Operational Funds
Covers normal operational budgeted expenses
Fund Balance
Funds remaining in the fund after operations and reserves are
covered
Reserves
Money set aside for specific purposes, would cover tenant petitions
and unanticipated operational expenses
Page | 4
Operational funds would cover all budgeted expenses and the fund balance would be available to
cover large projects that weren’t expected by the Board. The fund structure would include adding
an official line item for reserves, which would be set aside for tenant petitions and unexpected
operational expenses. (Thanks to the amendment to the Rules adopted last year, landlords are
held responsible to pay for their own petitions.) Prior to accessing reserves, the Board would
need to approve an amendment to the budget. Over the past several years, the Board has assigned
between $10,000 to $20,000 annually to the reserve fund. Staff recommends maintaining a fund
level of $100,000 in reserves. If any of these reserve funds are utilized, the registration fees
would be increased in subsequent years to replenish the reserves, however these could be spread
over 3-5 years to lessen the financial impact on the tenants. The Board currently has a sufficient
fund balance to implement this new fund structure immediately.
If the Board approves this option today, the next steps would be to pass a 6-month budget in
October 2020, which would cover the period through June 30, 2021. Then, in April 2021, the
Board would need to pass a 12-month budget based on the fiscal year. In subsequent years, the
annual general adjustment and registration fees would continue to be approved in the October
meeting, but the budget would be approved in the April meeting.
Option 2: Move budget cycle to fiscal year and move registration fee due date to July (not
recommended.)
In previous meetings, the Board had expressed concerns about setting its registration fees based
on the previous year’s actual expenses, instead of the coming budget year’s projected expenses.
At the Board’s request, staff investigated the option of moving both the budget cycle and the
registration fee due date to start in July.
This change would require an amendment to Chapter 3 of the Rules and Regulations, which
would involve staff and city attorney time. The amendment process would likely take several
months and the change would not be effective until 2022.
Since the Mobile Home Ordinance was passed by voters, amending the due date of the annual
general adjustment would not be possible without returning to the voters. If the due date of the
registration fees were moved to July, it would no longer align with the annual general
adjustment. This would mean that staff would need to send notification letters to landlords twice
a year – in October notifying them of the annual general adjustment increase and in April
notifying them of the registration fees. This would result in landlords needing to notify tenants of
increases twice a year – once for their rent increase and once for their registration fee for the
coming year. (With hundreds of mobile home tenants in Rohnert Park, this is no small task.)
While not impossible, changing the due date of the registration fees would create inefficiencies
and incur expenses for both the Board and for mobile home park landlords. Additionally, this
would impact tenants who are accustomed to receiving notification of rent increases and
registration fees at the same time and plan their annual budgets accordingly. For these reasons,
staff is not recommending this option.
Page | 5
Staff Recommendation
Staff is recommending Option 1 for a variety of reasons, including:
• It does not require an amendment to the Ordinance or to the Board Rules and
Regulations;
• It could go into effect immediately starting January 2021;
• There are sufficient funds in the fund balance to cover current year’s expenses plus
unexpected expenses – the Board will not “run in the red”;
• Setting registration fees based on previous year’s actual expenses results in more accurate
accounting and eliminates the unintentional growth of fund balance;
• Due to low expenses this year and a high fund balance, the Board would be able to offer
tenants a one-year waiver and not charge new registration fees until February 2022;
• The budget would match the City’s fiscal year and be compatible with City finance
software;
• The City’s Finance Department would be able to easily provide accurate real-time
expense data.
OPTIONS CONSIDERED:
1. Consider moving budget cycle to fiscal year, but keep registration fees due in
February (recommended). This would eliminate additional work to provide basic
financial reports, reduce opportunities for errors and appropriation challenges, and align
with the rest of the City’s funds. This would also ensure that the Board charges tenants
accurately for registration fees. If the Board approves this option, staff will bring a
resolution to the next Board meeting in October.
2. Move budget cycle to fiscal year and move registration fee due date to July (not
recommended.) This would require an update to the Rules and would create
inefficiencies for both the Board and for mobile home park landlords. Additionally, this
would impact tenants who are accustomed to receiving notification of rent increases and
registration fees at the same time and plan their budgets accordingly.
FISCAL IMPACT/FUNDING SOURCE: There is no direct fiscal impact associated with the
recommended action.
Planning Manager Approval Date: 8/28/20
1
DATE: September 3, 2020
TO: Rent Appeals Board
FROM: Manuel Orozco, Accounting Supervisor, Yosselyn Valencia, Accountant, Katie
Edgar, Accountant & Jenna Garcia, Housing Administrator
SUBJECT: Item 7.3 – Study Session on 2021 Budget
RECOMMENDED ACTION: Conduct a study session on the 2021 Budget and provide
direction to staff.
BACKGROUND: The Rohnert Park Mobile Home Ordinance (“Ordinance”) was adopted
pursuant to a vote of the people at a special election held on December 8, 1987. The Ordinance
was established to prevent unreasonable rent increases while still assuring mobile home park
owners a reasonable rate of return on their investment.
The Ordinance established a rent appeals board (“Board”) consisting of five (5) appointed
commissioners who serve four-year terms. The Board is empowered to set the rent ceiling for
controlled rental spaces, issue orders, rules and regulations, conduct hearings, and charge fees
(“Registration Fees”) to finance its reasonable and necessary expenses.
Each October, the Board adopts its budget and establishes registration fees. The Board
announces the estimated annual registration fee per rent-controlled mobile home space on or
before November 1st of each year. Annual Registration Fees are paid by each of the five (5)
mobile home parks (collectively, “Parks”) on or before February 1st of each year.
The Board is considering switching to a fiscal year budget, which would change the timing of
certain budgeting activities. The previous item for consideration in this meeting’s agenda (Item
7.2) addresses the next steps to changing to a fiscal year budget. If the Board approves the staff
recommendation to move to a fiscal year budget, the Board would need to adopt a 6-month
budget in October 2020, which would cover the period through June 30, 2021. Then, in April
2021, the Board would need to pass a 12-month budget based on the fiscal year. In subsequent
years, the annual general adjustment and registration fees would continue to be approved in the
October meeting, but the budget would be approved in the April meeting.
This study session offers budget scenarios based on a 6-month budget and a 12-month budget.
DISCUSSION: Due largely to the impacts of COVID-19, expenses in 2020 have been extremely
low. To date, the Board has held no meetings and has had no petitions filed. As a safety measure,
staff have been primarily working remotely, and for that reason, has not made progress on the
Rent Appeals Board digital file organization project.
CITY OF ROHNERT PARK
Mobile Home Rent Appeals Board
2
The maintenance of historic records is an important project for the Board and one staff hopes to
address in the coming year. The Board has approximately twenty boxes of records at the City –
mostly old petitions that need to be kept. The Corporation Yard which stores most of the City’s
physical files is expected to be demolished within the next two years and we need to eliminate as
many paper records as possible, since we will no longer have a good place to store these
documents in hard copy format. The paper records need to be either destroyed, if no longer
needed, or converted into electronic format. This is part of a city-wide effort to consolidate and
convert all City records into electronic format.
In October, staff will request that the Board adopt a budget with the following components:
• Staffing (city liaison and attorney)
• Petition set-aside
• Project expenses for special projects like the records retention project and/or any
minor amendments to the Rules and Regulations
• Postage/mailing/publications
• Cost allocation (for city facilities and administrative services)
• Digital organization project
The following outlines two budget scenarios: the first is a 6-month budget, which would be
implemented if the Board opts to change to a fiscal year budget cycle; the second is a 12-month
budget, which would be implemented if the Board opts to continue using a calendar year budget
cycle.
Six Month Budget – Facilitate Change to Fiscal Year
Attached as Exhibit A is a proposed six-month budget with a recommended budget and an
alternate budget. The recommended budget is based on average expenses from the past four
years for all categories except Project Expenses, which are based on projections for special
projects in the coming year. The alternate budget mirrors the current year’s budget. Both budgets
are cut in half to cover the Board’s expenses through June 30, 2021.
The recommended budget would assign $100,000 to Reserves, $39,470 to Operational Funds for
expenses incurred during January 2021 through June 2021. The remaining $75,287 would rest in
fund balance, and would be assigned for the Fiscal Year 2021/22 operational budget, which
would start July 1, 2021.
Table 1: Fund Structure – Six Month Budget
Fund Type Definition Amount
Operational
Funds
Covers normal operational budgeted expenses $39,470
Fund Balance
Funds remaining in the fund after operations and
reserves are covered
$75,287
Reserves
Money set aside for specific purposes, would
cover tenant petitions and unanticipated
operational expenses
$100,000
3
Twelve Month Budget – Continue Using Calendar Year
Attached as Exhibit A is a proposed six-month budget with a recommended budget and an
alternate budget. The recommended budget is based on average expenses from the past four
years for all categories except Project Expenses, which are based on projections for special
projects in the coming year. The alternate budget mirrors the current year’s budget. Both budgets
are cut in half to cover the Board’s expenses through June 30, 2021.
Attached as Exhibit B is a proposed twelve-month calendar year budget with a recommended
budget and an alternate budget. The recommended budget is based on average expenses from the
past four years for all categories except Project Expenses, which are based on projections for
special projects in the coming year. The alternate budget mirrors the current year’s budget.
The recommended twelve-month calendar year budget would assign $100,000 to Reserves,
$78,940 to Operational Funds for expenses incurred between January 2021 and December 2021.
The remaining $35,817 would rest in fund balance.
Table 2: Fund Structure – Twelve Month Budget
Fund Type Definition Amount
Operational
Funds
Covers normal operational budgeted expenses $78,940
Fund Balance
Funds remaining in the fund after operations and
reserves are covered
$35,817
Reserves
Money set aside for specific purposes, would
cover tenant petitions and unanticipated
operational expenses
$100,000
NEXT STEPS: Following this study session and a decision on the approach related to a calendar
year versus fiscal year budget, staff will prepare a budget for adoption at the October 2020
meeting.
FISCAL IMPACT/FUNDING SOURCE: There is no direct fiscal impact associated with the
recommended action.
Planning Manager Approval Date: 8/28/20
2021 SIX MONTH FISCAL YEAR BUDGET WORKSHEET
2018 2019 2020
Adopted Budget Adopted Budget Adopted Budget Recommended Alternate
Staffing Costs:
6110 City Attorney $15,000.00 $15,000.00 $15,000.00 $9,000.00 $7,500.00
6108 Development Services $15,000.00 $15,000.00 $15,000.00 $9,500.00 $7,500.00
Total Staff Expenses $30,000.00 $30,000.00 $30,000.00 $18,500.00 $15,000.00
Petitions:
5100 Duplication $100.00 $100.00 $100.00 $50.00 $50.00
5130 Postage $200.00 $200.00 $200.00 $100.00 $100.00
6110 Other Legal-Hearings $25,000.00 $25,000.00 $25,000.00 $8,500.00 $12,500.00
Total Petitions Expenses $25,300.00 $25,300.00 $25,300.00 $8,650.00 $12,650.00
Other Expenses:
5100 Supplies $100.00 $100.00 $100.00 $20.00 $50.00
5130 Postage $300.00 $300.00 $300.00 $150.00 $150.00
5200 Publications $100.00 $100.00 $100.00 $50.00 $50.00
Total Other Expense $500.00 $500.00 $500.00 $220.00 $250.00
Rules and Regulations Update Project:
Development Services Staffing Costs $18,000.00 $10,000.00 $8,000.00 $2,000.00 $4,000.00
City Attorney Costs $12,000.00 $5,000.00 $3,000.00 $1,000.00 $1,500.00
Records Retention Project n/a n/a $15,000.00 $7,500.00 $7,500.00
Total Project Expenses $30,000.00 $15,000.00 $26,000.00 $10,500.00 $13,000.00
Miscellaneous Expenses:
6425 Cost Allocation Plan $2,000.00 $2,000.00 $2,830.00 $1,600.00 $1,415.00
6600 Travel/Meetings $100.00 $100.00 $100.00 $0.00 $50.00
Add to Reserves $10,000.00 $0.00 $0.00
Total Miscellaneous Expenses $2,100.00 $12,100.00 $2,930.00 $1,600.00 $1,465.00
Total Expenses $87,900.00 $82,900.00 $84,730.00 $39,470.00 $42,365.00
Estimated Rent Control Spaces 1,184 1,169 1,177
Annual Registration Fee/Space $74.24 $70.92 $71.99 N/A N/A
Monthly Fee/Space $6.19 $5.91 $6.00 N/A N/A
Reserve Balance N/A N/A N/A $100,000.00 $100,000.00
January - June 2021 Budget Options
2021 TWELVE MONTH CALENDAR YEAR BUDGET WORKSHEET
2018 2019 2020
Adopted Budget Adopted Budget Adopted Budget Recommended Alternate
Staffing Costs:
6110 City Attorney $15,000.00 $15,000.00 $15,000.00 $18,000.00 $15,000.00
6108 Development Services $15,000.00 $15,000.00 $15,000.00 $19,000.00 $15,000.00
Total Staff Expenses $30,000.00 $30,000.00 $30,000.00 $37,000.00 $30,000.00
Petitions:
5100 Duplication $100.00 $100.00 $100.00 $100.00 $100.00
5130 Postage $200.00 $200.00 $200.00 $200.00 $200.00
6110 Other Legal-Hearings $25,000.00 $25,000.00 $25,000.00 $17,000.00 $25,000.00
Total Petitions Expenses $25,300.00 $25,300.00 $25,300.00 $17,300.00 $25,300.00
Other Expenses:
5100 Supplies $100.00 $100.00 $100.00 $40.00 $100.00
5130 Postage $300.00 $300.00 $300.00 $300.00 $300.00
5200 Publications $100.00 $100.00 $100.00 $100.00 $100.00
Total Other Expense $500.00 $500.00 $500.00 $440.00 $500.00
Rules and Regulations Update Project:
Development Services Staffing Costs $18,000.00 $10,000.00 $8,000.00 $4,000.00 $8,000.00
City Attorney Costs $12,000.00 $5,000.00 $3,000.00 $2,000.00 $3,000.00
Records Retention Project n/a n/a $15,000.00 $15,000.00 $15,000.00
Total Project Expenses $30,000.00 $15,000.00 $26,000.00 $21,000.00 $26,000.00
Miscellaneous Expenses:
6425 Cost Allocation Plan $2,000.00 $2,000.00 $2,830.00 $3,200.00 $2,830.00
6600 Travel/Meetings $100.00 $100.00 $100.00 $0.00 $100.00
Add to Reserves $10,000.00 $0.00 $0.00
Total Miscellaneous Expenses $2,100.00 $12,100.00 $2,930.00 $3,200.00 $2,930.00
Total Expenses $87,900.00 $82,900.00 $84,730.00 $78,940.00 $84,730.00
Estimated Rent Control Spaces 1,184 1,169 1,177
Annual Registration Fee/Space $74.24 $70.92 $71.99 N/A N/A
Monthly Fee/Space $6.19 $5.91 $6.00 N/A N/A
Reserve Balance N/A N/A N/A $100,000.00 $100,000.00
2021 Budget Options
Mobile Home Parks
Rent Appeals Board
September 3, 2020
Accounts Receivable Write-off
Mobile Home Parks, Rent Appeals Board
September 3, 2020
Jenna Garcia, Housing Administrator
Manuel Orozco, Accounting Supervisor
Background
In 2014, Rancho Verde Mobile Home Park
(RVP) submitted a petition for a CIPT
Total costs incurred = $129,033.99
RVP submitted payment for $40,000
Outstanding balance = $89,033.99
Multiple attempts to collect unsuccessful
Only option available is filing lawsuit,
which is very expensive
Why did this happen?
At that time, there was no formal
reimbursement agreement in place
The Board did not have power to cease
work on petition if landlord overdrew
deposit
RVP paid $5,000 deposit and then
replenished with additional $35,000 then
stopped making payments
The Board had to continue work on
petition
What did we do to address this?
In 2017, the Board updated the Rules to
require reimbursement agreement for
landlord petitions
In 2019, the Board updated the Rules to
set $5,000 as minimum account balance
threshold for landlord petitions
◦Now, if landlord dips below $5,000 deposit,
the Board stops work on petition
Write-off Receivable
Auditor directed City to accrue
$89,033.99 to be consistent with best
accounting practices
The balance has remained as accounts
receivable on Board’s balance sheet for
years
$303,790.00 -$89,033.99 = $214,757
Staff Recommendation
Approve $89,033.99 write-off of the 2014
petition costs of RVP
If approved today, Board will formally
approve along with budget at next
month’s meeting
Comments/Questions?
Accounting Year Period
Mobile Home Parks, Rent Appeals Board
September 3, 2020
Manuel Orozco, Accounting Supervisor
Katie Edgar, Accountant
Jenna Garcia, Housing Administrator
Background
Board approves AGA and registration in
October of each year
Board currently passes budget in October,
which runs on calendar year
◦All City funds except the Rent Appeals Board
follow fiscal year cycle
In September 2019, the Board conducted
a study session and asked staff to
investigate options further and bring back
to the Board
Challenges with Calendar Year
City financial software only tracks within
fiscal year
City is audited on a fiscal year basis
In order to prepare budget documents
for Board, staff must extract then
manually enter data into spreadsheet
◦This is time intensive and creates more
opportunity for error
Potential for “timing issues”
Current Process
Budget is passed in October of each year,
along with the AGA
Registration fees are set based on
projected budget –not actual expenses
Budget is set outside of the normal City
budget cycle
No formal reserves account
Option 1 (Recommended)
Option 1 would move the Board’s budget
cycle to a fiscal year, but would not
change when registration fees are due
Budget study session would be in April
Registration fees would be set based on
previous year’s actual costs rather than
upcoming projected costs
No amendments needed to Ordinance or
Rules
Budget Timeline
Month Current Proposed
Jan New budget year starts
Feb Registration fees due Registration fees due
Apr Approve fiscal year budget
Jul New budget year starts
Sep Study session for budget
Oct Set the annual general
adjustment
Approve calendar year Budget
Set registration fees based on
projected expenses for coming
year
Set the annual general
adjustment
Set registration fees based on
previous year’s actual
expenses
Budgeted vs. Expended
Year Budgeted Expended Difference
2016 $87,900.00 $50,601.44 +$37,298.56
2017 $99,100.00 $94,986.42 +$4,113.58
2018 $87,900.00 $78,900.07 +$8,999.93
2019 $82,900.00 $52,486.30 +$30,413.70
2020**$84,730.00 $8,798.96 +$75,931.04
TOTAL $442,530.00 $285,773.19 +156,756.81
Fund Structure
Fund Type Description
Operational
Funds
Covers normal operational budgeted
expenses
Fund
Balance
Funds remaining in the fund after operations
and reserves are covered
Reserves Money set aside for specific purposes, would
cover tenant petitions and unanticipated
operational expenses
Fund Structure
Setting registration fees based on the
previous year’s actual expenses allows the
Board to better manage its funds and
avoid over-charging
With new fund structure, fund balance
offers a cushion to ensure that Board
never “runs in the red”
Reserves are retained for tenant petitions
and true “rainy-day” situations
Registration Fees for 2021
Due to COVID-19, many low-income
people are struggling financially
Could offer relief via registration fee
waiver for 2021
◦Fees would be deferred until Feb 2022
This would also allow Board time to
adjust to new budget cycle
Option 1: Next Steps
If Board approves this option today, will
need to pass a 6-month budget in
October 2020
Then in April, would pass a 12-month
budget which would run July 1, 2021 –
June 30, 2022
Annual growth adjustment and
registration fees would continue to be
approved in October
Option 2 (Not Recommended)
Option 2 would move the Board’s budget
cycle to a fiscal year, and would move
registration fee due date to July
Board requested staff to investigate this
option, concerned about “running in the
red”
Option 2 -Challenges
This option would require an amendment
to the Rules, which would take staff and
attorney time
Earliest effective date would be 2022
Registration fees would continue to be
set on projected budget, rather than
actual expenses
Option 2 –Challenges (cont.)
Due date of registration fees would not
match AGA
Staff would have to send notification
letters to MHP owners twice a year
Landlords may need to send rent increase
notices to all tenants twice a year
Tenants would effectively receive rent
increases twice a year
Staff Recommendation: Option 1
Does not require amendments to Ordinance or
Rules
Could go into effect starting January 1
Sufficient funds to cover coming year’s expenses
plus unexpected expenses
Set registration fees on previous year’s actual
expenses = better fund management
Budget would match City’s fiscal year
City could provide accurate real-time expense
data
Comments/Questions?
2021 Budget Study Session
Mobile Home Parks, Rent Appeals Board
September 3, 2020
Katie Edgar, Accountant
Jenna Garcia, Housing Administrator
Background
Each October, Board adopts budget and
establishes registration fees
Board is considering switch to fiscal year
budget, which would require passing 6-
month budget at the October meeting
This study session offer budget scenarios
for 6-month and 12-month budgets
Special Projects
Rules Update: Not anticipating major
update, recommend some funding here in
event of minor amendments
Digitization project:
◦Need to digitalize Board records
◦About 20 boxes worth of records in storage
now
Recommended vs. Alternate
Each scenario has a recommended and an
alternate budget
Recommended budget is based on
average expended over the past four
years (except for special projects)
Alternate budget mirrors current budget
6-month budget is 12-month budget cut
in half
6-Month Recommended Budget
Fund Type Definition Amount
Operational
Funds
Covers normal operational
budgeted expenses
$39,470
Fund Balance Funds remaining in the fund after
operations and reserves are
covered
$75,287
Reserves Money set aside for specific
purposes, would cover tenant
petitions and unanticipated
operational expenses
$100,000
2021 6-Month Budget
Item Recommended Alternate
Total Staff Expenses $18,500 $15,000
Total Petitions Expenses $8,650 $12,650
Total Other Expenses $220 $250
Total Project Expenses $10,500 $13,000
Total Misc.Expenses $1,600 $1,465
TOTAL EXPENSES $39,470 $42,365
Reserve Balance $100,000 $100,000
12-Month Recommended Budget
Fund Type Definition Amount
Operation
al Funds
Covers normal operational
budgeted expenses
$78,940
Fund
Balance
Funds remaining in the fund after
operations and reserves are
covered
$35,817
Reserves Money set aside for specific
purposes, would cover tenant
petitions and unanticipated
operational expenses
$100,000
2021 12-Month Budget
Item Recommended Alternate
Total Staff Expenses $37,000 $30,000
Total Petitions Expenses $17,300 $25,300
Total Other Expenses $440 $500
Total Project Expenses $21,000 $26,000
Total Misc.Expenses $3,200 $2,930
TOTAL EXPENSES $78,940 $84,730
Reserve Balance $100,000 $100,000
Next Steps
Based on Board direction, staff will bring
back a budget for adoption at October
2020 meeting
Comments/Questions?